[Congressional Record Volume 151, Number 153 (Thursday, November 17, 2005)]
[House]
[Pages H10545-H10620]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEFICIT REDUCTION ACT OF 2005
Mr. NUSSLE. Mr. Speaker, pursuant to House Resolution 560, I ask call
up the bill (H.R. 4241) to provide for reconciliation pursuant to
section 201(a) of the concurrent resolution on the budget for fiscal
year 2006, and ask for its immediate consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 560, the bill
is considered read and the amendment printed in House Report 109-303,
as modified, is adopted.
The text of the bill, as amended, is as follows:
H.R. 4241
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 ``Deficit Reduction Act of
2005''.
SEC. 2. TABLE OF TITLES.
The table of titles is as follows:
TITLE I--COMMITTEE ON AGRICULTURE
TITLE II--COMMITTEE ON EDUCATION AND THE WORKFORCE
TITLE III--COMMITTEE ON ENERGY AND COMMERCE
TITLE IV--COMMITTEE ON FINANCIAL SERVICES
TITLE V--COMMITTEE ON THE JUDICIARY
TITLE VI--COMMITTEE ON RESOURCES
TITLE VII--COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
TITLE VIII--COMMITTEE ON WAYS AND MEANS
TITLE I--COMMITTEE ON AGRICULTURE
SECTION 1001. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the
``Agricultural Reconciliation Act of 2005''.
(b) Table of Contents.--The table of contents of this title
is as follows:
Sec. 1001. Short title; table of contents.
Subtitle A--Commodity Programs
Sec. 1101. Percentage reduction in amount of direct payments for
covered commodities and peanuts.
Sec. 1102. Reduction in percentage of direct payment amount authorized
to be paid in advance.
Sec. 1103. Cotton competitiveness provisions.
Subtitle B--Conservation
Sec. 1201. Limitations on use of Commodity Credit Corporation funds to
carry out watershed rehabilitation program.
Sec. 1202. Conservation security program.
Sec. 1203. Limitations on use of Commodity Credit Corporation funds to
carry out agricultural management assistance program.
Subtitle C--Energy
Sec. 1301. Termination of use of Commodity Credit Corporation funds to
carry out renewable energy systems and energy efficiency
improvements program.
Subtitle D--Rural Development
Sec. 1401. Enhanced access to broadband telecommunications services in
rural areas.
Sec. 1402. Value-added agricultural product market development grants.
Sec. 1403. Rural business investment program.
Sec. 1404. Rural business strategic investment grants.
Sec. 1405. Rural firefighters and emergency personnel grants.
Subtitle E--Research
Sec. 1501. Initiative for Future Food and Agriculture Systems.
Subtitle F--Nutrition
Sec. 1601. Eligible households.
Sec. 1602. Availability of commodities for the emergency food
assistance program.
Sec. 1603. Residency requirement.
Sec. 1604. Disaster food stamp program.
Subtitle A--Commodity Programs
SEC. 1101. PERCENTAGE REDUCTION IN AMOUNT OF DIRECT PAYMENTS
FOR COVERED COMMODITIES AND PEANUTS.
(a) Covered Commodities.--Section 1103 of the Farm Security
and Rural Investment Act of 2002 (7 U.S.C. 7913) is amended--
(1) in subsection (c), by striking ``The amount'' and
inserting ``Except as provided in subsection (e), the
amount''; and
(2) by adding at the end the following new subsection:
``(e) Direct Payment Amount Reduction.--Notwithstanding
subsection (c), for the 2006 and 2007 crop years (and the
2008 and 2009 crop years if direct payments are provided
under this section for those crop years), the Secretary shall
reduce the total amount of the direct payment to be paid to
the producers on a farm for a covered commodity for the crop
year concerned by an amount equal to 1 percent of the direct
payment amount otherwise determined for that farm for that
covered commodity for that crop year. No reduction shall be
made under the authority of this subsection if direct
payments are made for the 2010 or any subsequent crop year of
a covered commodity.''.
(b) Peanuts.--Section 1303 of such Act (7 U.S.C. 7953) is
amended--
(1) in subsection (d), by striking ``The amount'' and
inserting ``Except as provided in subsection (f), the
amount''; and
(2) by adding at the end the following new subsection:
``(f) Direct Payment Amount Reduction.--Notwithstanding
subsection (d), for the 2006 and 2007 crops of peanuts (and
the 2008 and 2009 crops of peanuts if direct payments are
provided under this section for those crops), the Secretary
shall reduce the total amount of the direct payment to be
paid to the producers on a farm for that crop of peanuts by
an amount equal to 1 percent of the direct payment amount
otherwise determined for that farm for that crop of peanuts.
No reduction shall be made under the authority of this
subsection if direct payments are made for the 2010 or any
subsequent crop of peanuts.''.
SEC. 1102. REDUCTION IN PERCENTAGE OF DIRECT PAYMENT AMOUNT
AUTHORIZED TO BE PAID IN ADVANCE.
(a) Covered Commodities.--Section 1103(d)(2) of the Farm
Security and Rural Investment Act of 2002 (7 U.S.C.
7913(d)(2)) is amended in the first sentence by striking
``2007 crop years'' and inserting ``2005 crop years and up to
40 percent of the direct payment for a covered commodity for
each of the 2006 and 2007 crop years''.
(b) Peanuts.--Section 1303(e)(2) of such Act (7 U.S.C.
7953(e)(2)) is amended in the first sentence by striking
``2007 crop years'' and inserting ``2005 crop years and up to
40 percent of the direct payment for each of the 2006 and
2007 crop years''.
SEC. 1103. COTTON COMPETITIVENESS PROVISIONS.
(a) Repeal of Authority to Issue Cotton User Marketing
Certificates.--Section 1207 of the Farm Security and Rural
Investment Act of 2002 (7 U.S.C. 7937) is amended--
(1) by striking the section heading and inserting the
following: ``UPLAND COTTON IMPORT QUOTAS.'';
(2) by striking subsection (a);
(3) by redesignating subsections (b) and (c) as subsections
(a) and (b), respectively;
(4) in subsection (a), as so redesignated--
(A) in paragraph (1)--
(i) in subparagraph (B), by striking ``, adjusted for the
value of any certificate issued under subsection (a),''; and
(ii) in subparagraph (C), by striking ``, for the value of
any certificates issued under subsection (a)''; and
(B) in paragraph (4), by striking ``subsection (c)'' and
inserting ``subsection (b)''; and
(5) in subsection (b)(2), as so redesignated, by striking
``subsection (b)'' and inserting ``subsection (a)''.
(b) Conforming Amendment.--Section 136 of the Federal
Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7236) is repealed.
(c) Effective Date.--The amendments made by this section
take effect on August 1, 2006.
Subtitle B--Conservation
SEC. 1201. LIMITATIONS ON USE OF COMMODITY CREDIT CORPORATION
FUNDS TO CARRY OUT WATERSHED REHABILITATION
PROGRAM.
(a) Fiscal Year 2007 Funding.--Subparagraph (E) of section
14(h)(1) of the Watershed Protection and Flood Prevention Act
(16 U.S.C. 1012(h)(1)) is amended by striking ``$65,000,000''
and inserting ``$50,000,000''.
(b) Termination of Multi-Year Availability of Funds.--Such
section is further amended by striking ``, to remain
available until expended'' in the matter preceding
subparagraph (A).
(c) Rescission of Unobligated Prior-Year Funds.--Funds
previously made available under such section for a fiscal
year and unobligated as of September 30, 2006, are hereby
rescinded effective on that date.
SEC. 1202. CONSERVATION SECURITY PROGRAM.
(a) Funding.--Section 1241(a) of the Food Security Act of
1985 (16 U.S.C. 3841(a)) is amended--
(1) in the matter before paragraph (1), by striking ``For''
and inserting ``Except as otherwise provided in this
subsection, for''; and
(2) in paragraph (3), by striking ``not more than
$6,037,000,000'' and all that follows through ``2014.'' and
inserting the following:
``not more than--
``(A) $2,213,000,000 for the period of fiscal years 2006
through 2010; and
``(B) $5,729,000,000 for the period of fiscal years 2006
through 2015.''.
(b) Duration.--Section 1238A(a) of such Act (16 U.S.C.
3838a(a)) is amended by striking ``2007'' and inserting
``2011''.
SEC. 1203. LIMITATIONS ON USE OF COMMODITY CREDIT CORPORATION
FUNDS TO CARRY OUT AGRICULTURAL MANAGEMENT
ASSISTANCE PROGRAM.
Section 524(b)(4)(B) of the Federal Crop Insurance Act (7
U.S.C. 1524(b)(4)(B)) is amended--
[[Page H10546]]
(1) in clause (i), by inserting before the period at the
end the following: ``, except fiscal years 2007 through
2010''; and
(2) in clauses (ii) and (iii), by striking ``2007'' both
places it appears and inserting ``2006''.
Subtitle C--Energy
SEC. 1301. TERMINATION OF USE OF COMMODITY CREDIT CORPORATION
FUNDS TO CARRY OUT RENEWABLE ENERGY SYSTEMS AND
ENERGY EFFICIENCY IMPROVEMENTS PROGRAM.
Section 9006(f) of the Farm Security and Rural Investment
Act of 2002 (7 U.S.C. 8106(f)) is amended by striking
``2007'' and inserting ``2006''.
Subtitle D--Rural Development
SEC. 1401. ENHANCED ACCESS TO BROADBAND TELECOMMUNICATIONS
SERVICES IN RURAL AREAS.
(a) Termination of Fiscal Year 2007 Funding.--Subparagraph
(B) of section 601(j)(1) of the Rural Electrification Act of
1936 (7 U.S.C. 950bb(j)(1)) is amended by striking ``for each
of fiscal years 2006 and 2007'' and inserting ``for fiscal
year 2006''.
(b) Termination of Multi-Year Availability of Funds.--Such
section is further amended by striking ``, to remain
available until expended'' both places it appears.
(c) Rescission of Unobligated Prior-Year Funds.--Funds
previously made available under such section for a fiscal
year and unobligated as of September 30, 2006, are hereby
rescinded effective on that date.
SEC. 1402. VALUE-ADDED AGRICULTURAL PRODUCT MARKET
DEVELOPMENT GRANTS.
(a) Termination of Fiscal Year 2007 Funding.--Section
231(b)(4) of the Agricultural Risk Protection Act of 2000
(Public Law 106-224; 7 U.S.C. 1621 note) is amended by
striking ``October 1, 2006'' and inserting ``October 1,
2005''.
(b) Termination of Multi-Year Availability of Funds.--Such
section is further amended by striking ``, to remain
available until expended''.
(c) Rescission of Unobligated Prior-Year Funds.--Funds
previously made available under such section for a fiscal
year and unobligated as of September 30, 2006, are hereby
rescinded effective on that date.
SEC. 1403. RURAL BUSINESS INVESTMENT PROGRAM.
(a) Termination of Fiscal Year 2007 and Subsequent
Funding.--Subsection (a)(1) of section 384S of the
Consolidated Farm and Rural Development Act (7 U.S.C. 2009cc-
18) is amended by inserting after ``necessary'' the
following: ``through fiscal year 2006''.
(b) Termination of Multi-Year Availability of Funds.--Such
section is further amended--
(1) by striking ``(a) In General.--''; and
(2) by striking subsection (b).
(c) Rescission of Unobligated Prior-Year Funds.--Funds
previously made available under such section and unobligated
as of September 30, 2006, are hereby rescinded effective on
that date.
SEC. 1404. RURAL BUSINESS STRATEGIC INVESTMENT GRANTS.
(a) Termination of Multi-Year Availability of Funds.--
Subsection (a) of section 385E of the Consolidated Farm and
Rural Development Act (7 U.S.C. 2009dd-4) is amended by
striking ``, to remain available until expended,''.
(b) Rescission of Unobligated Prior-Year Funds.--Funds
previously made available under such section and unobligated
as of September 30, 2006, are hereby rescinded effective on
that date.
SEC. 1405. RURAL FIREFIGHTERS AND EMERGENCY PERSONNEL GRANTS.
(a) Termination of Fiscal Year 2007 Funding.--Section
6405(c) of the Farm Security and Rural Investment Act of 2002
(7 U.S.C. 2655(c)) is amended by striking ``2007'' and
inserting ``2006''.
(b) Termination of Multi-Year Availability of Funds.--Such
section is further amended by striking ``, to remain
available until expended''.
(c) Rescission of Unobligated Prior-Year Funds.--Funds
previously made available under such section for a fiscal
year and unobligated as of September 30, 2006, are hereby
rescinded effective on that date.
Subtitle E--Research
SEC. 1501. INITIATIVE FOR FUTURE FOOD AND AGRICULTURE
SYSTEMS.
(a) Termination of Fiscal Year 2007, 2008, and 2009
Transfers.--Subsection (b)(3)(D) of section 401 of the
Agricultural Research, Extension, and Education Reform Act of
1998 (7 U.S.C. 7621) is amended by striking ``2006'' and
inserting ``2009''.
(b) Termination of Multi-Year Availability of Fiscal Year
2006 Funds.--Paragraph (6) of subsection (f) of such section
is amended to read as follows:
``(6) Availability of funds.--
``(A) Two-year availability.--Except as provided in
subparagraph (B), funds for grants under this section shall
be available to the Secretary for obligation for a 2-year
period beginning on the date of the transfer of the funds
under subsection (b).
``(B) Exception for fiscal year 2006 transfer.--In the case
of the funds required to be transferred by subsection
(b)(3)(C), the funds shall be available to the Secretary for
obligation for the 1-year period beginning on October 1,
2005.''.
Subtitle F--Nutrition
SEC. 1601. ELIGIBLE HOUSEHOLDS.
``(a) Eligible Households.--The Food Stamp Act of 1977 (7
U.S.C. 2011 et seq.) is amended--
``(1) in section 5----
``(A) in the 2d sentence of subsection (a); and
``(B) in subsection (j);
by striking `receives benefits' each place it appears and
inserting `in fiscal years 2006 through 2010 receives cash
assistance, and in any other fiscal year receives benefits,';
``(2) in section 5(a) by adding at the end the following:
`Notwithstanding any other provisions of this Act except
sections 6(b), 6(d)(2), and 6(g) and section 3(i)(4),
households in which each member receives substantial and
ongoing noncash benefits under a State program funded under
part A of title IV of the Social Security Act (42 U.S.C. 601
et seq.) provided for purposes of shelter, utilities, child
care, health care, transportation, or job training, and that
have a monthly income that does not exceed (before the
exclusions and deductions provided for in subsections (d) and
(e)) 150 percent of the poverty line, as defined in section
673(2) of the Community Services Block Grant Act (42 U.S.C.
9902(2)), for the forty-eight contiguous States and the
District of Columbia, Alaska, Hawaii, the Virgin Islands of
the United States, and Guam, respectively, shall be eligible
to participate in the food stamp program.'; and
``(3) in section 5(j) by adding at the end the following:
`Notwithstanding subsections (a) through (i), a State agency
shall consider a member of a household in which each
household member receives substantial and ongoing noncash
benefits under a State program funded under part A of title
IV of the Social Security Act (42 U.S.C. 601 et seq.)
provided for purposes of shelter, utilities, child care,
health care, transportation, or job training, and which has a
monthly income that does not exceed (before the exclusions
and deductions provided for in subsections (d) and (e)) 150
percent of the poverty line, as defined in section 673(2) of
the Community Services Block Grant Act (42 U.S.C. 9902(2)),
for the forty-eight contiguous States and the District of
Columbia, Alaska, Hawaii, the Virgin Islands of the United
States, and Guam, respectively, to have satisfied the
resource limitations prescribed under subsection (g).'.''
(b) Extensions.--The Food Stamp Act of 1977 (7 U.S.C. 2011
et seq.) is amended in--
(1) section 11(t)(1);
(2) section 16--
(A) in subparagraphs (A)(vii) and (E)(i) of subsection
(h)(1); and
(B) in subparagraphs (A) and(B)(ii) of subsection (k)(3);
(3) section 17(b)(1)(B)(vi);
(4) section 18(a); and
(5) section 19(a)(2)(A)(ii);
by striking ``2007'' each place it appears and inserting
``2011''.
SEC. 1602. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD
ASSISTANCE PROGRAM.
Section 27(a) of the Food Stamp Act of 1977 (7 U.S.C.
2036(a)) is amended--
(1) by striking ``2007,'' and inserting ``2005 and for each
of the fiscal years 2007 through 2011'';
(2) by inserting ``, and for fiscal year 2006 the Secretary
shall purchase $152,000,000,'' before ``of a variety''; and
(3) by adding at the end the following:
``Of the funds used to purchase commodities in accordance
with this subsection for fiscal year 2006, $12,000,000 shall
be used to purchase commodities for distribution to States
that received a Presidential designation of a major disaster
under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5121-5206) as a result of Hurricane
Katrina or Hurricane Rita and States contiguous to those
States.''.
SEC. 1603. RESIDENCY REQUIREMENT.
Section 402(a)(2)(L) of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8 U.S.C.
1612(a)(2)(L)) is amended by striking ``5 years or more'' and
inserting ``7 years or more effective until September 30,
2010, and for a period of 5 years or more beginning'' and
inserting the following:
``for a period--
``(1) effective until September 30, 2010--
``(A) for an alien--
``(i)(I) who is 60 years of age or older;
or
``(II) with respect to whom--
``(aa) an application for naturalization under Immigration
and Nationality Act is approved; or
``(bb) such application is pending under such Act and no
previous application for naturalization has been rejected
under such Act; and
``(ii) who is a member of a household that receives food
stamp benefits; as of the date of the enactment of the
Agricultural Reconciliation Act of 2005, of 5 years or more;
and
``(B) for an alien with respect to whom subparagraph (A)
does not apply, of 7 years or more; and
``(2) effective beginning on October 1, 2010, of 5 years or
more;
beginning''.
(c) Certification for School Lunch Program.--Section 9 of
the Richard B. Russell National School Lunch Act (42 U.S.C.
1758) is amended--
(1) in subsection (b)(12)--
(A) in subparagraph (A)--
(i) in clause (v), by striking ``; or'' and inserting a
semicolon;
(ii) in clause (vi), by striking the period and inserting
``; or''; and
(iii) by adding at the end the following new clause:
[[Page H10547]]
``(vii) a member of a household in which each member
receives or is eligible to receive non-cash or in-kind
benefits under a State program funded under part A of title
IV of the Social Security Act (42 U.S.C. 601 et seq.), and
requires participants to have a gross monthly income at or
below 200 percent of the Federal poverty level.''; and
(B) in subparagraph (B), by striking ``or assistance'' and
inserting ``, benefits, or assistance''; and
(2) in subsection (d)(2)--
(A) in subparagraph (D), by striking ``; or'' and inserting
a semicolon;
(B) in subparagraph (E), by striking the period and
inserting ``; or''; and
(C) by adding at the end the following:
``(F) documentation has been provided to the local
educational agency showing that the household is one in which
each member receives or is eligible to receive non-cash or
in-kind benefits under a State program funded under part A of
title IV of the Social Security Act (42 U.S.C. 601 et seq.),
and requires participants to have a gross monthly income at
or below 200 percent of the Federal poverty level.''.
SEC. 1604. DISASTER FOOD STAMP PROGRAM.
Notwithstanding section 16(a) of the Food Stamp Act of 1977
(7 U.S.C. 2025(a)), the Secretary of Agriculture is
authorized, at the discretion of the Secretary, to pay to
State agencies 100 percent of the administrative costs
incurred in the certification of, and issuance of benefits
to, applicant households that become eligible to receive food
stamp benefits under the disaster food stamp program
eligibility standards in effect during the Presidentially
declared emergency in response to Hurricane Katrina or
Hurricane Rita.
TITLE II--COMMITTEE ON EDUCATION AND THE WORKFORCE
SECTION 2000. TABLE OF CONTENTS.
The table of contents of this title is as follows:
TITLE II--COMMITTEE ON EDUCATION AND THE WORKFORCE
Sec. 2000. Table of contents.
Subtitle A--Welfare Reform
Part 1--Short title; references
Sec. 2001. Short title.
Sec. 2002. References.
Part 2--TANF
Sec. 2011. Universal engagement and family self-sufficiency plan
requirements.
Sec. 2012. Work participation requirements.
Sec. 2013. Work-related performance improvement.
Sec. 2014. Report on coordination.
Sec. 2015. Fatherhood program.
Sec. 2016. State option to make TANF programs mandatory partners with
one-stop employment training centers.
Sec. 2017. Sense of the Congress.
Sec. 2018. Prohibition on offshoring.
Part 3--Child Care
Sec. 2021. Short title.
Sec. 2022. Goals.
Sec. 2023. Authorization of appropriations.
Sec. 2024. Application and plan.
Sec. 2025. Activities to improve the quality of child care.
Sec. 2026. Reports and audits.
Sec. 2027. Report by Secretary.
Sec. 2028. Definitions.
Sec. 2029. Waiver authority to expand the availability of services
under Child Care and Development Block Grant Act of 1990.
Part 4--State and Local Flexibility
Sec. 2041. Program coordination demonstration projects.
Part 5--Effective Date
Sec. 2051. Effective date.
Subtitle B--Higher Education
Sec. 2101. Short title.
Part 1--Amendments to the Higher Education Act of 1965
Sec. 2111. References; effective date.
Sec. 2112. Modification of 50/50 Rule.
Sec. 2113. Reauthorization of Federal Family Education Loan Program.
Sec. 2114. Loan limits.
Sec. 2115. Interest rates and special allowances.
Sec. 2116. Additional loan terms and conditions.
Sec. 2117. Consolidation loan changes.
Sec. 2118. Deferment of student loans for military service.
Sec. 2119. Loan forgiveness for service in areas of national need.
Sec. 2120. Unsubsidized Stafford loans.
Sec. 2121. Elimination of termination dates from Taxpayer-Teacher
Protection Act of 2004.
Sec. 2122. Loan fees from lenders.
Sec. 2123. Additional administrative provisions.
Sec. 2124. Funds for administrative expenses.
Sec. 2125. Significantly simplifying the student aid application
process.
Sec. 2126. Additional need analysis amendments.
Sec. 2127. Definition of eligible program.
Sec. 2128. Distance education.
Sec. 2129. Student eligibility.
Sec. 2130. Institutional refunds.
Sec. 2131. College access initiative.
Sec. 2132. Cancellation of Student Loan Indebtedness For Survivors of
Victims of the September 11, 2001, Attacks.
Sec. 2133. Independent evaluation of distance education programs.
Sec. 2134. Disbursement of student loans.
Part 2--Higher education relief
Sec. 2141. References.
Sec. 2142. Waivers and modifications.
Sec. 2143. Cancellation of institutional repayment by colleges and
universities affected by a Gulf hurricane disaster.
Sec. 2144. Cancellation of student loans for cancelled enrollment
periods.
Sec. 2145. Temporary deferment of student loan repayment.
Sec. 2146. No affect on grant and loan limits.
Sec. 2147. Teacher loan relief.
Sec. 2148. Expanding information dissemination regarding eligibility
for Pell Grants.
Sec. 2149. Procedures.
Sec. 2150. Termination of authority.
Sec. 2151. Definitions.
Subtitle C--Pensions
Sec. 2201. Increases in PBGC premiums.
Subtitle A--Welfare Reform
PART 1--SHORT TITLE; REFERENCES
SEC. 2001. SHORT TITLE.
This subtitle may be cited as the ``Personal
Responsibility, Work, and Family Promotion Act of 2005''.
SEC. 2002. REFERENCES.
Except as otherwise expressly provided, wherever in this
subtitle an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
amendment or repeal shall be considered to be made to a
section or other provision of the Social Security Act.
PART 2--TANF
SEC. 2011. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY
PLAN REQUIREMENTS.
(a) Modification of State Plan Requirements.--Section
402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended by striking
clauses (ii) and (iii) and inserting the following:
``(ii) Require a parent or caretaker receiving assistance
under the program to engage in work or alternative self-
sufficiency activities (as defined by the State), consistent
with section 407(e)(2).
``(iii) Require families receiving assistance under the
program to engage in activities in accordance with family
self-sufficiency plans developed pursuant to section
408(b).''.
(b) Establishment of Family Self-Sufficiency Plans.--
(1) In general.--Section 408(b) (42 U.S.C. 608(b)) is
amended to read as follows:
``(b) Family Self-Sufficiency Plans.--
``(1) In general.--A State to which a grant is made under
section 403 shall--
``(A) assess, in the manner deemed appropriate by the
State, the skills, prior work experience, and employability
of each work-eligible individual (as defined in section
407(b)(2)(C)) receiving assistance under the State program
funded under this part;
``(B) establish for each family that includes such an
individual, in consultation as the State deems appropriate
with the individual, a self-sufficiency plan that specifies
appropriate activities described in the State plan submitted
pursuant to section 402, including direct work activities as
appropriate designed to assist the family in achieving their
maximum degree of self-sufficiency, and that provides for the
ongoing participation of the individual in the activities;
``(C) require, at a minimum, each such individual to
participate in activities in accordance with the self-
sufficiency plan;
``(D) monitor the participation of each such individual in
the activities specified in the self-sufficiency plan, and
regularly review the progress of the family toward self-
sufficiency;
``(E) upon such a review, revise the self-sufficiency plan
and activities as the State deems appropriate.
``(2) Timing.--The State shall comply with paragraph (1)
with respect to a family--
``(A) in the case of a family that, as of October 1, 2005,
is not receiving assistance from the State program funded
under this part, not later than 60 days after the family
first receives assistance on the basis of the most recent
application for the assistance; or
``(B) in the case of a family that, as of such date, is
receiving the assistance, not later than 12 months after the
date of enactment of this subsection.
``(3) State discretion.--A State shall have sole
discretion, consistent with section 407, to define and design
activities for families for purposes of this subsection, to
develop methods for monitoring and reviewing progress
pursuant to this subsection, and to make modifications to the
plan as the State deems appropriate to assist the individual
in increasing their degree of self-sufficiency.
``(4) Rule of interpretation.--Nothing in this part shall
preclude a State from--
``(A) requiring participation in work and any other
activities the State deems appropriate for helping families
achieve self-sufficiency and improving child well-being; or
``(B) using job search or other appropriate job readiness
or work activities to assess the employability of individuals
and to determine appropriate future engagement activities.''.
(2) Penalty for failure to establish family self-
sufficiency plan.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is
amended--
(A) in the paragraph heading, by inserting ``or establish
family self-sufficiency plan'' after ``Rates''; and
(B) in subparagraph (A), by inserting ``or 408(b)'' after
``407(a)''.
[[Page H10548]]
SEC. 2012. WORK PARTICIPATION REQUIREMENTS.
(a) Elimination of Separate Participation Rate Requirements
for 2-Parent Families.--
(1) Section 407 (42 U.S.C. 607) is amended in each of
subsections (a) and (b) by striking paragraph (2).
(2) Section 407(b)(4) (42 U.S.C. 607(b)(4)) is amended by
striking ``paragraphs (1)(B) and (2)(B)'' and inserting
``paragraph (1)(B)''.
(3) Section 407(c)(1) (42 U.S.C. 607(c)(1)) is amended by
striking subparagraph (B).
(4) Section 407(c)(2)(D) (42 U.S.C. 607(c)(2)(D)) is
amended by striking ``paragraphs (1)(B)(i) and (2)(B) of
subsection (b)'' and inserting ``subsection (b)(1)(B)(i)''.
(b) Work Participation Requirements.--Section 407 (42
U.S.C. 607) is amended by striking all that precedes
subsection (b)(3) and inserting the following:
``SEC. 407. WORK PARTICIPATION REQUIREMENTS.
``(a) Participation Rate Requirements.--A State to which a
grant is made under section 403 for a fiscal year shall
achieve a minimum participation rate equal to not less than--
``(1) 50 percent for fiscal year 2006;
``(2) 55 percent for fiscal year 2007;
``(3) 60 percent for fiscal year 2008;
``(4) 65 percent for fiscal year 2009; and
``(5) 70 percent for fiscal year 2010 and each succeeding
fiscal year.
``(b) Calculation of Participation Rates.--
``(1) Average monthly rate.--For purposes of subsection
(a), the participation rate of a State for a fiscal year is
the average of the participation rates of the State for each
month in the fiscal year.
``(2) Monthly participation rates; incorporation of 40-hour
work week standard.--
``(A) In general.--For purposes of paragraph (1), the
participation rate of a State for a month is--
``(i) the total number of countable hours (as defined in
subsection (c)) with respect to the counted families for the
State for the month; divided by
``(ii) 160 multiplied by the number of counted families for
the State for the month.
``(B) Counted families defined.--
``(i) In general.--In subparagraph (A), the term `counted
family' means, with respect to a State and a month, a family
that includes a work-eligible individual and that receives
assistance in the month under the State program funded under
this part, subject to clause (ii).
``(ii) State option to exclude certain families.--At the
option of a State, the term `counted family' shall not
include--
``(I) a family in the first month for which the family
receives assistance from a State program funded under this
part on the basis of the most recent application for such
assistance;
``(II) on a case-by-case basis, a family in which the
youngest child has not attained 12 months of age; or
``(III) a family that is subject to a sanction under this
part or part D, but that has not been subject to such a
sanction for more than 3 months (whether or not consecutive)
in the preceding 12-month period.
``(iii) State option to include individuals receiving
assistance under a tribal family assistance plan or tribal
work program.--At the option of a State, the term `counted
family' may include families in the State that are receiving
assistance under a tribal family assistance plan approved
under section 412 or under a tribal work program to which
funds are provided under this part.
``(C) Work-eligible individual defined.--In this section,
the term `work-eligible individual' means an individual--
``(i) who is married or a single head of household; and
``(ii) whose needs are (or, but for sanctions under this
part or part D, would be) included in determining the amount
of cash assistance to be provided to the family under the
State program funded under this part.''.
(c) Recalibration of Caseload Reduction Credit.--
(1) In general.--Section 407(b)(3)(A)(ii) (42 U.S.C.
607(b)(3)(A)(ii)) is amended to read as follows:
``(ii) the average monthly number of families that received
assistance under the State program funded under this part
during the base year.''.
(2) Conforming amendment.--Section 407(b)(3)(B) (42 U.S.C.
607(b)(3)(B)) is amended by striking ``and eligibility
criteria'' and all that follows through the close parenthesis
and inserting ``and the eligibility criteria in effect during
the then applicable base year''.
(3) Base year defined.--Section 407(b)(3) (42 U.S.C.
607(b)(3)) is amended by adding at the end the following:
``(C) Base year defined.--In this paragraph, the term `base
year' means, with respect to a fiscal year--
``(i) if the fiscal year is fiscal year 2006, fiscal year
1996;
``(ii) if the fiscal year is fiscal year 2007, fiscal year
1998;
``(iii) if the fiscal year is fiscal year 2008, fiscal year
2001; or
``(iv) if the fiscal year is fiscal year 2009 or any
succeeding fiscal year, the then 4th preceding fiscal
year.''.
(d) Superachiever Credit.--Section 407(b) (42 U.S.C.
607(b)) is amended by striking paragraphs (4) and (5) and
inserting the following:
``(4) Superachiever credit.--
``(A) In general.--The participation rate, determined under
paragraphs (1) and (2) of this subsection, of a superachiever
State for a fiscal year shall be increased by the lesser of--
``(i) the amount (if any) of the superachiever credit
applicable to the State; or
``(ii) the number of percentage points (if any) by which
the minimum participation rate required by subsection (a) for
the fiscal year exceeds 50 percent.
``(B) Superachiever state.--For purposes of subparagraph
(A), a State is a superachiever State if the State caseload
for fiscal year 2001 has declined by at least 60 percent from
the State caseload for fiscal year 1995.
``(C) Amount of credit.--The superachiever credit
applicable to a State is the number of percentage points (if
any) by which the decline referred to in subparagraph (B)
exceeds 60 percent.
``(D) Definitions.--In this paragraph:
``(i) State caseload for fiscal year 2001.--The term `State
caseload for fiscal year 2001' means the average monthly
number of families that received assistance during fiscal
year 2001 under the State program funded under this part.
``(ii) State caseload for fiscal year 1995.--The term
`State caseload for fiscal year 1995' means the average
monthly number of families that received aid under the State
plan approved under part A (as in effect on September 30,
1995) during fiscal year 1995.''.
(e) Countable Hours.--Section 407 (42 U.S.C. 607) is
amended by striking subsections (c) and (d) and inserting the
following:
``(c) Countable Hours.--
``(1) Definition.--In subsection (b)(2), the term
`countable hours' means, with respect to a family for a
month, the total number of hours in the month in which any
member of the family who is a work-eligible individual is
engaged in a direct work activity or other activities
specified by the State (excluding an activity that does not
address a purpose specified in section 401(a)), subject to
the other provisions of this subsection.
``(2) Limitations.--Subject to such regulations as the
Secretary may prescribe:
``(A) Minimum weekly average of 24 hours of direct work
activities required.--If the work-eligible individuals in a
family are engaged in a direct work activity for an average
total of fewer than 24 hours per week in a month, then the
number of countable hours with respect to the family for the
month shall be zero.
``(B) Maximum weekly average of 16 hours of other
activities.--An average of not more than 16 hours per week of
activities specified by the State (subject to the exclusion
described in paragraph (1)) may be considered countable hours
in a month with respect to a family.
``(3) Special rules.--For purposes of paragraph (1):
``(A) Participation in qualified activities.--
``(i) In general.--If, with the approval of the State, the
work-eligible individuals in a family are engaged in 1 or
more qualified activities for an average total of at least 24
hours per week in a month, then all such engagement in the
month shall be considered engagement in a direct work
activity, subject to clause (iii).
``(ii) Qualified activity defined.--The term `qualified
activity' means an activity specified by the State (subject
to the exclusion described in paragraph (1)) that meets such
standards and criteria as the State may specify, including--
``(I) substance abuse counseling or treatment;
``(II) rehabilitation treatment and services;
``(III) work-related education or training directed at
enabling the family member to work;
``(IV) job search or job readiness assistance; and
``(V) any other activity that addresses a purpose specified
in section 401(a).
``(iii) Limitation.--
``(I) In general.--Except as provided in subclause (II),
clause (i) shall not apply to a family for more than 3 months
in any period of 24 consecutive months.
``(II) Special rule applicable to education and training.--
A State may, on a case-by-case basis, apply clause (i) to a
work-eligible individual so that participation by the
individual in education or training, if needed to permit the
individual to complete a certificate program or other work-
related education or training directed at enabling the
individual to fill a known job need in a local area, may be
considered countable hours with respect to the family of the
individual for not more than 4 months in any period of 24
consecutive months.
``(B) School attendance by teen head of household.--The
work-eligible members of a family shall be considered to be
engaged in a direct work activity for an average of 40 hours
per week in a month if the family includes an individual who
is married, or is a single head of household, who has not
attained 20 years of age, and the individual--
``(i) maintains satisfactory attendance at secondary school
or the equivalent in the month; or
``(ii) participates in education directly related to
employment for an average of at least 20 hours per week in
the month.
``(C) Parental participation in schools.--Each work-
eligible individual in a family shall make verified visits at
least twice per school year to the school of each of the
individual's minor dependent children required to attend
school under the law of the State in which the minor children
reside, during
[[Page H10549]]
the period in which the family receives assistance under the
program funded under this part. Hours spent in such activity
may be specified by the State as countable hours for purposes
of paragraph (2)(B).
``(d) Direct Work Activity.--In this section, the term
`direct work activity' means--
``(1) unsubsidized employment;
``(2) subsidized private sector employment;
``(3) subsidized public sector employment;
``(4) on-the-job training;
``(5) supervised work experience; or
``(6) supervised community service.''.
(f) Penalties Against Individuals.--Section 407(e)(1) (42
U.S.C. 607(e)(1)) is amended to read as follows:
``(1) Reduction or termination of assistance.--
``(A) In general.--Except as provided in paragraph (2), if
an individual in a family receiving assistance under a State
program funded under this part fails to engage in activities
required in accordance with this section, or other activities
required by the State under the program, and the family does
not otherwise engage in activities in accordance with the
self-sufficiency plan established for the family pursuant to
section 408(b), the State shall--
``(i) if the failure is partial or persists for not more
than 1 month--
``(I) reduce the amount of assistance otherwise payable to
the family pro rata (or more, at the option of the State)
with respect to any period during a month in which the
failure occurs; or
``(II) terminate all assistance to the family, subject to
such good cause exceptions as the State may establish; or
``(ii) if the failure is total and persists for at least 2
consecutive months, terminate all cash payments to the family
including qualified State expenditures (as defined in section
409(a)(7)(B)(i)) for at least 1 month and thereafter until
the State determines that the individual has resumed full
participation in the activities, subject to such good cause
exceptions as the State may establish.
``(B) Special rule.--
``(i) In general.--In the event of a conflict between a
requirement of clause (i)(II) or (ii) of subparagraph (A) and
a requirement of a State constitution, or of a State statute
that, before 1966, obligated local government to provide
assistance to needy parents and children, the State
constitutional or statutory requirement shall control.
``(ii) Limitation.--Clause (i) of this subparagraph shall
not apply after the 1-year period that begins with the date
of the enactment of this subparagraph.''.
(g) Conforming Amendments.--
(1) Section 407(f) (42 U.S.C. 607(f)) is amended in each of
paragraphs (1) and (2) by striking ``work activity described
in subsection (d)'' and inserting ``direct work activity''.
(2) The heading of section 409(a)(14) (42 U.S.C.
609(a)(14)) is amended by inserting ``or refusing to engage
in activities under a family self-sufficiency plan'' after
``work''.
SEC. 2013. WORK-RELATED PERFORMANCE IMPROVEMENT.
(a) State Plans.--Section 402(a)(1) (42 U.S.C. 602(a)) is
amended--
(1) in subparagraph (A), by adding at the end the
following:
``(vii) The document shall--
``(I) describe how the State will pursue ending dependence
of needy families on government benefits and reducing poverty
by promoting job preparation and work;
``(II) include specific, numerical, and measurable
performance objectives for accomplishing subclause (I); and
``(III) describe the methodology that the State will use to
measure State performance in relation to each such objective.
``(viii) Describe any strategies and programs the State may
be undertaking to address--
``(I) employment retention and advancement for recipients
of assistance under the program, including placement into
high-demand jobs, and whether the jobs are identified using
labor market information;
``(II) services for struggling and noncompliant families,
and for clients with special problems; and
``(III) program integration, including the extent to which
employment and training services under the program are
provided through the One-Stop delivery system created under
the Workforce Investment Act of 1998, and the extent to which
former recipients of such assistance have access to
additional core, intensive, or training services funded
through such Act.''; and
(2) in subparagraph (B), by striking clause (iv).
(b) Report on Annual Performance Improvement.--Section 411
(42 U.S.C. 611) is amended by adding at the end the
following:
``(c) Annual Report on Performance Improvement.--Beginning
with fiscal year 2007, not later than January 1 of each
fiscal year, each eligible State shall submit to the
Secretary a report on achievement and improvement during the
preceding fiscal year under the numerical performance goals
and measures under the State program funded under this part
with respect to the matter described in section
402(a)(1)(A)(vii).''.
(c) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C.
613(d)(1)) is amended by striking ``long-term private sector
jobs,'' and inserting ``private sector jobs, the success of
the recipients in retaining employment, the ability of the
recipients to increase their wages,''.
(d) Performance Improvement.--Section 413 (42 U.S.C. 613)
is amended by adding at the end the following:
``(k) Performance Improvement.--The Secretary, in
consultation with States, shall develop uniform performance
measures designed to assess the degree of effectiveness, and
the degree of improvement, of State programs funded under
this part in accomplishing the work-related purposes of this
part.''.
SEC. 2014. REPORT ON COORDINATION.
Not later than 6 months after the date of the enactment of
this Act, the Secretary of Health and Human Services and the
Secretary of Labor shall jointly submit a report to the
Congress describing common or conflicting data elements,
definitions, performance measures, and reporting requirements
in the Workforce Investment Act of 1998 and part A of title
IV of the Social Security Act, and, to the degree each
Secretary deems appropriate, at the discretion of either
Secretary, any other program administered by the respective
Secretary, to allow greater coordination between the welfare
and workforce development systems.
SEC. 2015. FATHERHOOD PROGRAM.
(a) Short Title.--This section may be cited as the
``Promotion and Support of Responsible Fatherhood and Healthy
Marriage Act of 2005''.
(b) Fatherhood Program.--
(1) In general.--Title I of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (Public Law 104-
193) is amended by adding at the end the following:
``SEC. 117. FATHERHOOD PROGRAM.
``(a) In General.--Title IV (42 U.S.C. 601-679b) is amended
by inserting after part B the following:
`PART C--FATHERHOOD PROGRAM
`SEC. 441. FINDINGS AND PURPOSES.
`(a) Findings.--The Congress finds that there is
substantial evidence strongly indicating the urgent need to
promote and support involved, committed, and responsible
fatherhood, and to encourage and support healthy marriages
between parents raising children, including data
demonstrating the following:
`(1) In approximately 84 percent of cases where a parent is
absent, that parent is the father.
`(2) If current trends continue, half of all children born
today will live apart from one of their parents, usually
their father, at some point before they turn 18.
`(3) Where families (whether intact or with a parent
absent) are living in poverty, a significant factor is the
father's lack of job skills.
`(4) Committed and responsible fathering during infancy and
early childhood contributes to the development of emotional
security, curiosity, and math and verbal skills.
`(5) An estimated 19,400,000 children (27 percent) live
apart from their biological father.
`(6) Forty percent of children under age 18 not living with
their biological father had not seen their father even once
in the last 12 months, according to national survey data.
`(b) Purposes.--The purposes of this part are:
`(1) To provide for projects and activities by public
entities and by nonprofit community entities, including
religious organizations, designed to test promising
approaches to accomplishing the following objectives:
`(A) Promoting responsible, caring, and effective parenting
through counseling, mentoring, and parenting education,
dissemination of educational materials and information on
parenting skills, encouragement of positive father
involvement, including the positive involvement of
nonresident fathers, and other methods.
`(B) Enhancing the abilities and commitment of unemployed
or low-income fathers to provide material support for their
families and to avoid or leave welfare programs by assisting
them to take full advantage of education, job training, and
job search programs, to improve work habits and work skills,
to secure career advancement by activities such as outreach
and information dissemination, coordination, as appropriate,
with employment services and job training programs, including
the One-Stop delivery system established under title I of the
Workforce Investment Act of 1998, encouragement and support
of timely payment of current child support and regular
payment toward past due child support obligations in
appropriate cases, and other methods.
`(C) Improving fathers' ability to effectively manage
family business affairs by means such as education,
counseling, and mentoring in matters including household
management, budgeting, banking, and handling of financial
transactions, time management, and home maintenance.
`(D) Encouraging and supporting healthy marriages and
married fatherhood through such activities as premarital
education, including the use of premarital inventories,
marriage preparation programs, skills-based marriage
education programs, marital therapy, couples counseling,
divorce education and reduction programs, divorce mediation
and counseling, relationship skills enhancement programs,
including those designed to reduce child abuse and domestic
violence, and dissemination of information about the benefits
of marriage for both parents and children.
`(2) Through the projects and activities described in
paragraph (1), to improve outcomes for children with respect
to measures such as increased family income and economic
security, improved school performance, better health,
improved emotional and behavioral stability and social
adjustment,
[[Page H10550]]
and reduced risk of delinquency, crime, substance abuse,
child abuse and neglect, teen sexual activity, and teen
suicide.
`(3) To evaluate the effectiveness of various approaches
and to disseminate findings concerning outcomes and other
information in order to encourage and facilitate the
replication of effective approaches to accomplishing these
objectives.
`SEC. 442. DEFINITIONS.
`In this part, the terms ``Indian tribe'' and ``tribal
organization'' have the meanings given them in subsections
(e) and (l), respectively, of section 4 of the Indian Self-
Determination and Education Assistance Act.
`SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.
`(a) In General.--The Secretary may make grants for fiscal
years 2006 through 2010 to public and nonprofit community
entities, including religious organizations, and to Indian
tribes and tribal organizations, for demonstration service
projects and activities designed to test the effectiveness of
various approaches to accomplish the objectives specified in
section 441(b)(1).
`(b) Eligibility Criteria for Full Service Grants.--In
order to be eligible for a grant under this section, except
as specified in subsection (c), an entity shall submit an
application to the Secretary containing the following:
`(1) Project description.--A statement including--
`(A) a description of the project and how it will be
carried out, including the geographical area to be covered
and the number and characteristics of clients to be served,
and how it will address each of the 4 objectives specified in
section 441(b)(1); and
`(B) a description of the methods to be used by the entity
or its contractor to assess the extent to which the project
was successful in accomplishing its specific objectives and
the general objectives specified in section 441(b)(1).
`(2) Experience and qualifications.--A demonstration of
ability to carry out the project, by means such as
demonstration of experience in successfully carrying out
projects of similar design and scope, and such other
information as the Secretary may find necessary to
demonstrate the entity's capacity to carry out the project,
including the entity's ability to provide the non-Federal
share of project resources.
`(3) Addressing child abuse and neglect and domestic
violence.--A description of how the entity will assess for
the presence of, and intervene to resolve, domestic violence
and child abuse and neglect, including how the entity will
coordinate with State and local child protective service and
domestic violence programs.
`(4) Addressing concerns relating to substance abuse and
sexual activity.--A commitment to make available to each
individual participating in the project education about
alcohol, tobacco, and other drugs, and about the health risks
associated with abusing such substances, and information
about diseases and conditions transmitted through substance
abuse and sexual contact, including HIV/AIDS, and to
coordinate with providers of services addressing such
problems, as appropriate.
`(5) Coordination with specified programs.--An undertaking
to coordinate, as appropriate, with State and local entities
responsible for the programs under parts A, B, and D of this
title, including programs under title I of the Workforce
Investment Act of 1998 (including the One-Stop delivery
system), and such other programs as the Secretary may
require.
`(6) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits as the Secretary may find necessary
for purposes of oversight of project activities and
expenditures.
`(7) Self-initiated evaluation.--If the entity elects to
contract for independent evaluation of the project (part or
all of the cost of which may be paid for using grant funds),
a commitment to submit to the Secretary a copy of the
evaluation report within 30 days after completion of the
report and not more than 1 year after completion of the
project.
`(8) Cooperation with secretary's oversight and
evaluation.--An agreement to cooperate with the Secretary's
evaluation of projects assisted under this section, by means
including random assignment of clients to service recipient
and control groups, if determined by the Secretary to be
appropriate, and affording the Secretary access to the
project and to project-related records and documents, staff,
and clients.
`(c) Eligibility Criteria for Limited Purpose Grants.--In
order to be eligible for a grant under this section in an
amount under $25,000 per fiscal year, an entity shall submit
an application to the Secretary containing the following:
`(1) Project description.--A description of the project and
how it will be carried out, including the number and
characteristics of clients to be served, the proposed
duration of the project, and how it will address at least 1
of the 4 objectives specified in section 441(b)(1).
`(2) Qualifications.--Such information as the Secretary may
require as to the capacity of the entity to carry out the
project, including any previous experience with similar
activities.
`(3) Coordination with related programs.--As required by
the Secretary in appropriate cases, an undertaking to
coordinate and cooperate with State and local entities
responsible for specific programs relating to the objectives
of the project including, as appropriate, jobs programs and
programs serving children and families.
`(4) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits as the Secretary may find necessary
for purposes of oversight of project activities and
expenditures.
`(5) Cooperation with secretary's oversight and
evaluation.--An agreement to cooperate with the Secretary's
evaluation of projects assisted under this section, by means
including affording the Secretary access to the project and
to project-related records and documents, staff, and clients.
`(d) Considerations in Awarding Grants.--
`(1) Diversity of projects.--In awarding grants under this
section, the Secretary shall seek to achieve a balance among
entities of differing sizes, entities in differing geographic
areas, entities in urban and in rural areas, and entities
employing differing methods of achieving the purposes of this
section, including working with the State agency responsible
for the administration of part D to help fathers satisfy
child support arrearage obligations.
`(2) Preference for projects serving low-income fathers.--
In awarding grants under this section, the Secretary may give
preference to applications for projects in which a majority
of the clients to be served are low-income fathers.
`(e) Federal Share.--
`(1) In general.--Grants for a project under this section
for a fiscal year shall be available for a share of the cost
of such project in such fiscal year equal to--
`(A) up to 80 percent (or up to 90 percent, if the entity
demonstrates to the Secretary's satisfaction circumstances
limiting the entity's ability to secure non-Federal
resources) in the case of a project under subsection (b); and
`(B) up to 100 percent, in the case of a project under
subsection (c).
`(2) Non-federal share.--The non-Federal share may be in
cash or in kind. In determining the amount of the non-Federal
share, the Secretary may attribute fair market value to
goods, services, and facilities contributed from non-Federal
sources.
`SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.
`(a) In General.--The Secretary may make grants under this
section for fiscal years 2006 through 2010 to eligible
entities (as specified in subsection (b)) for 2 multicity,
multistate projects demonstrating approaches to achieving the
objectives specified in section 441(b)(1). One of the
projects shall test the use of married couples to deliver
program services.
`(b) Eligible Entities.--An entity eligible for a grant
under this section must be a national nonprofit fatherhood
promotion organization that meets the following requirements:
`(1) Experience with fatherhood programs.--The organization
must have substantial experience in designing and
successfully conducting programs that meet the purposes
described in section 441.
`(2) Experience with multicity, multistate programs and
government coordination.--The organization must have
experience in simultaneously conducting such programs in more
than 1 major metropolitan area in more than 1 State and in
coordinating such programs, where appropriate, with State and
local government agencies and private, nonprofit agencies
(including community-based and religious organizations),
including State or local agencies responsible for child
support enforcement and workforce development.
`(c) Application Requirements.--In order to be eligible for
a grant under this section, an entity must submit to the
Secretary an application that includes the following:
`(1) Qualifications.--
`(A) Eligible entity.--A demonstration that the entity
meets the requirements of subsection (b).
`(B) Other.--Such other information as the Secretary may
find necessary to demonstrate the entity's capacity to carry
out the project, including the entity's ability to provide
the non-Federal share of project resources.
`(2) Project description.--A description of and commitments
concerning the project design, including the following:
`(A) In general.--A detailed description of the proposed
project design and how it will be carried out, which shall--
`(i) provide for the project to be conducted in at least 3
major metropolitan areas;
`(ii) state how it will address each of the 4 objectives
specified in section 441(b)(1);
`(iii) demonstrate that there is a sufficient number of
potential clients to allow for the random selection of
individuals to participate in the project and for comparisons
with appropriate control groups composed of individuals who
have not participated in such projects; and
`(iv) demonstrate that the project is designed to direct a
majority of project resources to activities serving low-
income fathers (but the project need not make services
available on a means-tested basis).
`(B) Oversight, evaluation, and adjustment component.--An
agreement that the entity--
`(i) in consultation with the evaluator selected pursuant
to section 446, and as required by the Secretary, will modify
the project design, initially and (if necessary)
[[Page H10551]]
subsequently throughout the duration of the project, in order
to facilitate ongoing and final oversight and evaluation of
project operation and outcomes (by means including, to the
maximum extent feasible, random assignment of clients to
service recipient and control groups), and to provide for
mid-course adjustments in project design indicated by interim
evaluations;
`(ii) will submit to the Secretary revised descriptions of
the project design as modified in accordance with clause (i);
and
`(iii) will cooperate fully with the Secretary's ongoing
oversight and ongoing and final evaluation of the project, by
means including affording the Secretary access to the project
and to project-related records and documents, staff, and
clients.
`(3) Addressing child abuse and neglect and domestic
violence.--A description of how the entity will assess for
the presence of, and intervene to resolve, domestic violence
and child abuse and neglect, including how the entity will
coordinate with State and local child protective service and
domestic violence programs.
`(4) Addressing concerns relating to substance abuse and
sexual activity.--A commitment to make available to each
individual participating in the project education about
alcohol, tobacco, and other drugs, and about the health risks
associated with abusing such substances, and information
about diseases and conditions transmitted through substance
abuse and sexual contact, including HIV/AIDS, and to
coordinate with providers of services addressing such
problems, as appropriate.
`(5) Coordination with specified programs.--An undertaking
to coordinate, as appropriate, with State and local entities
responsible for the programs funded under parts A, B, and D
of this title, programs under title I of the Workforce
Investment Act of 1998 (including the One-Stop delivery
system), and such other programs as the Secretary may
require.
`(6) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits (in addition to those required under
the preceding provisions of paragraph (2)) as the Secretary
may find necessary for purposes of oversight of project
activities and expenditures.
`(d) Federal Share.--
`(1) In general.--Grants for a project under this section
for a fiscal year shall be available for up to 80 percent of
the cost of such project in such fiscal year.
`(2) Non-federal share.--The non-Federal share may be in
cash or in kind. In determining the amount of the non-Federal
share, the Secretary may attribute fair market value to
goods, services, and facilities contributed from non-Federal
sources.
`SEC. 445. ECONOMIC INCENTIVE DEMONSTRATION PROJECTS.
`(a) In General.--The Secretary may make grants under this
section for fiscal years 2006 through 2010 to eligible
entities (as specified in subsection (b)) for two to five
projects demonstrating approaches to achieving the objectives
specified in section 441(b)(1). Drawing on the success of
economic-incentive programs in demonstrating strong
employment effects for low-income mothers, projects shall
test the use of economic incentives combined with a
comprehensive approach to addressing employment barriers to
encourage non-custodial parents to enter the workforce and to
contribute financially and emotionally to their children. The
Secretary may make grants based on the level of innovation,
comprehensiveness, and likelihood to achieve the goal of
increased employment by the applicant.
`(b) Eligible Entities.--An entity eligible for a grant
under this section must be a national nonprofit fatherhood
promotion organization that meets the following requirements:
`(1) Experience with fatherhood programs.--The organization
must have substantial experience in designing and
successfully conducting programs that meet the purposes
described in section 441.
`(2) Experience addressing multiple barriers to
employment.--The organization must have experience in
conducting such programs and in coordinating such programs,
where appropriate, with State and local government agencies
and private, nonprofit agencies (including community-based
and religious organizations), including State or local
agencies responsible for child support enforcement and
workforce development.
`(3) Negotiated agreements with state and local agencies
for appropriate policy changes to address barriers to
employment.--The organization must have agreements in place
with State and local government agencies, including State or
local agencies responsible for child support enforcement and
workforce development, to incorporate appropriate policy
changes proposed to address barriers to employment.
`(c) Application Requirements.--In order to be eligible for
a grant under this section, an entity must submit to the
Secretary an application that includes the following:
`(1) Qualifications.--
`(A) Eligible entity.--A demonstration that the entity
meets the requirements of subsection (b).
`(B) Other.--Such other information as the Secretary may
find necessary to demonstrate the entity's capacity to carry
out the project, including the entity's ability to provide
the non-Federal share of project resources.
`(2) Project description.--A description of and commitments
concerning the project design, including the following:
`(A) In general.--A detailed description of the proposed
project design and how the project will be carried out, which
shall--
`(i) state how the project will address each of the 4
objectives specified in section 441(b)(1);
`(ii) state how the project will address employment
barriers across programs (such as child support, criminal
justice, and workforce development programs) using both
sanctions and compliance along with monetary incentives for
obtaining employment, with earning subsidies contingent upon
work and child support payment;
`(iii) demonstrate that there is a sufficient number of
potential clients to allow for the random selection of
individuals to participate in the project and for comparisons
with appropriate control groups composed of individuals who
have not participated in such projects; and
`(iv) demonstrate that the project is designed to direct a
majority of project resources to activities serving low-
income fathers (but the project need not make services
available on a means-tested basis).
`(B) Oversight, evaluation, and adjustment component.--An
agreement that the entity--
`(i) in consultation with the evaluator selected pursuant
to section 446, and as required by the Secretary, will modify
the project design, initially and (if necessary) subsequently
throughout the duration of the project, in order to
facilitate ongoing and final oversight and evaluation of
project operation and outcomes (by means including, to the
maximum extent feasible, random assignment of clients to
service recipient and control groups), and to provide for
mid-course adjustments in project design indicated by interim
evaluations;
`(ii) will submit to the Secretary revised descriptions of
the project design as modified in accordance with clause (i);
and
`(iii) will cooperate fully with the Secretary's ongoing
oversight and ongoing and final evaluation of the project, by
means including affording the Secretary access to the project
and to project-related records and documents, staff, and
clients.
`(3) Addressing child abuse and neglect and domestic
violence.--A description of how the entity will assess for
the presence of, and intervene to resolve, domestic violence
and child abuse and neglect, including how the entity will
coordinate with State and local child protective service and
domestic violence programs.
`(4) Addressing concerns relating to substance abuse and
sexual activity.--A commitment to make available to each
individual participating in the project education about
alcohol, tobacco, and other drugs, and about the health risks
associated with abusing such substances, and information
about diseases and conditions transmitted through substance
abuse and sexual contact, including HIV/AIDS, and to
coordinate with providers of services addressing such
problems, as appropriate.
`(5) Coordination with specified programs.--An undertaking
to coordinate, as appropriate, with State and local entities
responsible for the programs funded under parts A, B, and D
of this title, programs under title I of the Workforce
Investment Act of 1998 (including the One-Stop delivery
system), and such other programs as the Secretary may
require.
`(6) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits (in addition to those required under
the preceding provisions of paragraph (2)) as the Secretary
may find necessary for purposes of oversight of project
activities and expenditures.
`(d) Federal Share.--
`(1) In general.--Grants for a project under this section
for a fiscal year shall be available for up to 80 percent of
the cost of such project in such fiscal year.
`(2) Non-federal share.--The non-Federal share may be in
cash or in kind. In determining the amount of the non-Federal
share, the Secretary may attribute fair market value to
goods, services, and facilities contributed from non-Federal
sources.
`SEC. 446. EVALUATION.
`(a) In General.--The Secretary, directly or by contract or
cooperative agreement, shall evaluate the effectiveness of
service projects funded under sections 443 and 444 from the
standpoint of the purposes specified in section 441(b)(1).
`(b) Evaluation Methodology.--Evaluations under this
section shall--
`(1) include, to the maximum extent feasible, random
assignment of clients to service delivery and control groups
and other appropriate comparisons of groups of individuals
receiving and not receiving services;
`(2) describe and measure the effectiveness of the projects
in achieving their specific project goals; and
`(3) describe and assess, as appropriate, the impact of
such projects on marriage, parenting, domestic violence,
child abuse and neglect, money management, employment and
earnings, payment of child support, and child well-being,
health, and education.
`(c) Evaluation Reports.--The Secretary shall publish the
following reports on the results of the evaluation:
`(1) An implementation evaluation report covering the first
24 months of the activities
[[Page H10552]]
under this part to be completed by 36 months after initiation
of such activities.
`(2) A final report on the evaluation to be completed by
September 30, 2013.
`SEC. 447. PROJECTS OF NATIONAL SIGNIFICANCE.
`The Secretary is authorized, by grant, contract, or
cooperative agreement, to carry out projects and activities
of national significance relating to fatherhood promotion,
including--
`(1) Collection and dissemination of information.--
Assisting States, communities, and private entities,
including religious organizations, in efforts to promote and
support marriage and responsible fatherhood by collecting,
evaluating, developing, and making available (through the
Internet and by other means) to all interested parties
information regarding approaches to accomplishing the
objectives specified in section 441(b)(1).
`(2) Media campaign.--Developing, promoting, and
distributing to interested States, local governments, public
agencies, and private nonprofit organizations, including
charitable and religious organizations, a media campaign that
promotes and encourages involved, committed, and responsible
fatherhood and married fatherhood.
`(3) Technical assistance.--Providing technical assistance,
including consultation and training, to public and private
entities, including community organizations and faith-based
organizations, in the implementation of local fatherhood
promotion programs.
`(4) Research.--Conducting research related to the purposes
of this part.
`SEC. 448. NONDISCRIMINATION.
`The projects and activities assisted under this part shall
be available on the same basis to all fathers and expectant
fathers able to benefit from such projects and activities,
including married and unmarried fathers and custodial and
noncustodial fathers, with particular attention to low-income
fathers, and to mothers and expectant mothers on the same
basis as to fathers.
`SEC. 449. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR
CERTAIN PURPOSE.
`(a) Authorization.--There are authorized to be
appropriated $20,000,000 for each of fiscal years 2006
through 2010 to carry out the provisions of this part.
`(b) Reservation.--Of the amount appropriated under this
section for each fiscal year, not more than 35 percent shall
be available for the costs of the multicity, multicounty,
multistate demonstration projects under section 444, the
economic incentives demonstration projects under section 445,
evaluations under section 446, and projects of national
significance under section 447, with not less than $5,000,000
allocated to the economic incentives demonstration project
under section 445.'.
``(b) Inapplicability of Effective Date Provisions.--
Section 116 shall not apply to the amendment made by
subsection (a) of this section.''.
(2) Clerical amendment.--Section 2 of such Act is amended
in the table of contents by inserting after the item relating
to section 116 the following new item:
``Sec. 117. Fatherhood program.''.
SEC. 2016. STATE OPTION TO MAKE TANF PROGRAMS MANDATORY
PARTNERS WITH ONE-STOP EMPLOYMENT TRAINING
CENTERS.
Section 408 (42 U.S.C. 608) is amended by adding at the end
the following:
``(h) State Option to Make Tanf Programs Mandatory Partners
With One-Stop Employment Training Centers.--For purposes of
section 121(b) of the Workforce Investment Act of 1998, a
State program funded under part A of title IV of the Social
Security Act shall be considered a program referred to in
paragraph (1)(B) of such section, unless, after the date of
the enactment of this subsection, the Governor of the State
notifies the Secretaries of Health and Human Services and
Labor in writing of the decision of the Governor not to make
the State program a mandatory partner.''.
SEC. 2017. SENSE OF THE CONGRESS.
It is the sense of the Congress that a State welfare-to-
work program should include a mentoring program.
SEC. 2018. PROHIBITION ON OFFSHORING.
Section 408(a) (42 U.S.C. 608(a)) is amended by adding at
the end the following:
``(12) Prohibition on offshoring.--A State to which a grant
is made under section 403 shall not use any part of the
grant--
``(A) to enter into a contract with an entity that,
directly or through a subcontractor, provides any service,
activity or function described under this part at a location
outside the United States; or
``(B) to reduce employment in the United States through use
of 1 or more employees outside the United States.''.
PART 3--CHILD CARE
SEC. 2021. SHORT TITLE.
This part may be cited as the ``Caring for Children Act of
2005''.
SEC. 2022. GOALS.
(a) Goals.--Section 658A(b) of the Child Care and
Development Block Grant Act of 1990 (42 U.S.C. 9801 note) is
amended--
(1) in paragraph (3) by striking ``encourage'' and
inserting ``assist'',
(2) by amending paragraph (4) to read as follows:
``(4) to assist States to provide child care to low-income
parents;'',
(3) by redesignating paragraph (5) as paragraph (7), and
(4) by inserting after paragraph (4) the following:
``(5) to encourage States to improve the quality of child
care available to families;
``(6) to promote school readiness by encouraging the
exposure of young children in child care to nurturing
environments and developmentally-appropriate activities,
including activities to foster early cognitive and literacy
development; and''.
(b) Conforming Amendment.--Section 658E(c)(3)(B) of the
Child Care and Development Block Grant Act of 1990 (42 U.S.C.
9858c(c)(3)(B)) is amended by striking ``through (5)'' and
inserting ``through (7)''.
SEC. 2023. AUTHORIZATION OF APPROPRIATIONS.
Section 658B of the Child Care and Development Block Grant
Act of 1990 (42 U.S.C. 9858) is amended--
(1) by striking ``is'' and inserting ``are'', and
(2) by striking ``$1,000,000,000 for each of the fiscal
years 1996 through 2002'' and inserting ``$2,300,000,000 for
fiscal year 2006, $2,500,000,000 for fiscal year 2007,
$2,700,000,000 for fiscal year 2008, $2,900,000,000 for
fiscal year 2009, and $3,100,000,000 for fiscal year 2010''.
SEC. 2024. APPLICATION AND PLAN.
Section 658E(c)(2) of the Child Care and Development Block
Grant Act of 1990 (42 U.S.C. 9858C(c)(2)) is amended--
(1) by amending subparagraph (D) to read as follows:
``(D) Consumer and child care provider education
information.--
``(i) Certification.--Certify that the State will collect
and disseminate, through resource and referral services and
other means as determined by the State, to parents of
eligible children, child care providers, and the general
public, information regarding--
``(I) the promotion of informed child care choices,
including information about the quality and availability of
child care services;
``(II) research and best practices on children's
development, including early cognitive development;
``(III) the availability of assistance to obtain child care
services; and
``(IV) other programs for which families that receive child
care services for which financial assistance is provided
under this subchapter may be eligible, including the food
stamp program, the WIC program under section 17 of the Child
Nutrition Act of 1966, the child and adult care food program
under section 17 of the Richard B. Russell National School
Lunch Act, Head Start programs, Early Head Start programs,
services and activities under section 619 and part C of the
Individuals with Disabilities Education Act, and the medicaid
and SCHIP programs under titles XIX and XXI of the Social
Security Act.
``(ii) Information.--Information provided to parents shall
be in plain language and, to the extent practicable, be in a
language that such parents can understand.'', and
(2) by inserting after subparagraph (H) the following:
``(I) Coordination with other early child care services and
early childhood education programs.--Demonstrate how the
State is coordinating child care services provided under this
subchapter with Head Start programs, Early Head Start
programs, Early Reading First, Even Start, Ready-To-Learn
Television, services and activities under section 619 and
part C of the Individuals with Disabilities Education Act,
State pre-kindergarten programs, and other early childhood
education programs to expand accessibility to and continuity
of care and early education consistent with the goals of this
Act, without displacing services provided by the current
early care and education delivery system.
``(J) Public-private partnerships.--Demonstrate how the
State encourages partnerships with private and other public
entities to leverage existing service delivery systems of
early childhood education and increase the supply and quality
of child care services.
``(K) Child care service quality.--
``(i) Certification.--For each fiscal year after fiscal
year 2006, certify that during the then preceding fiscal year
the State was in compliance with section 658G and describe
how funds were used to comply with such section during such
preceding fiscal year.
``(ii) Strategy.--For each fiscal year after fiscal year
2006, contain an outline of the strategy the State will
implement during such fiscal year for which the State plan is
submitted, to address the quality of child care services in
the State available from eligible child care providers, and
include in such strategy--
``(I) a statement specifying how the State will address the
activities described in paragraphs (1), (2), and (3) of
section 658G;
``(II) a description of measures for evaluating the quality
improvements generated by the activities listed in each of
such paragraphs that the State will use to evaluate its
progress in improving the quality of such child care
services;
``(III) a list of State-developed child care service
quality targets for such fiscal year quantified on the basis
of such measures; and
``(IV) for each fiscal year after fiscal year 2006, a
report on the progress made to achieve such targets during
the then preceding fiscal year.
[[Page H10553]]
``(iii) Rule of construction.--Nothing in this subparagraph
shall be construed to require that the State apply measures
for evaluating quality to specific types of child care
providers.
``(L) Access to care for certain populations.--Demonstrate
how the State is addressing the child care needs of parents
eligible for child care services for which financial
assistance is provided under this subchapter who have
children with special needs, are limited English proficient,
work nontraditional hours, or require child care services for
infants or toddlers.''.
SEC. 2025. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.
Section 658G of the Child Care and Development Block Grant
Act of 1990 (42 U.S.C. 9858e) is amended to read as follows:
``SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE
SERVICES.
``A State that receives funds to carry out this subchapter
for a fiscal year, shall use not less than 6 percent of the
amount of such funds for activities provided through resource
and referral services and other means, that are designed to
improve the quality of child care services in the State
available from eligible child care providers. Such activities
include--
``(1) programs that provide training, education, and other
professional development activities to enhance the skills of
the child care workforce, including training opportunities
for caregivers in informal care settings;
``(2) activities within child care settings to enhance
early learning for young children, to promote early literacy,
and to foster school readiness;
``(3) initiatives to increase the retention and
compensation of child care providers, including tiered
reimbursement rates for providers that meet quality standards
as defined by the State; or
``(4) other activities deemed by the State to improve the
quality of child care services provided in such State.''.
SEC. 2026. REPORTS AND AUDITS.
Section 658K(a)(1)(B)(iii) of the Child Care and
Development Block Grant Act of 1990 (42 U.S.C.
9858i(a)(1)(B)(iii)) is amended by inserting ``ethnicity,
primary language,'' after ``race,''.
SEC. 2027. REPORT BY SECRETARY.
Section 658L of the Child Care and Development Block Grant
Act of 1990 (42 U.S.C. 9858j) is amended to read as follows:
``SEC. 658L. REPORT BY SECRETARY.
``(a) Report Required.--Not later than October 1, 2007, and
biennially thereafter, the Secretary shall prepare and submit
to the Committee on Education and the Workforce of the House
of Representatives and the Committee on Health, Education,
Labor and Pensions of the Senate a report that contains the
following:
``(1) A summary and analysis of the data and information
provided to the Secretary in the State reports submitted
under section 658K.
``(2) Aggregated statistics on the supply of, demand for,
and quality of child care, early education, and non-school-
hours programs.
``(3) An assessment, and where appropriate, recommendations
for the Congress concerning efforts that should be undertaken
to improve the access of the public to quality and affordable
child care in the United States.
``(b) Collection of Information.--The Secretary may utilize
the national child care data system available through
resource and referral organizations at the local, State, and
national level to collect the information required by
subsection (a)(2).''.
SEC. 2028. DEFINITIONS.
(a) Eligible Children.--Section 658P(4)(B) of the Child
Care and Development Block Grant Act of 1990 (42 U.S.C.
9858N(4)(B)) is amended by striking ``85 percent of the State
median income'' and inserting ``income levels as established
by the State, prioritized by need,''.
(b) Limited English Proficient.--Section 658P of the Child
Care and Development Block Grant Act of 1990 (42 U.S.C.
9858n) is amended--
(1) by redesignating paragraph (9) as paragraph (10); and
(2) by inserting after paragraph (8) the following:
``(9) Limited english proficient.--The term `limited
English proficient' means with respect to an individual, that
such individual--
``(A)(i) was not born in the United States or has a native
language that is not English;
``(ii)(I) is a Native American, an Alaska Native, or a
native resident of a territory or possession of the United
States; and
``(II) comes from an environment in which a language that
is not English has had a significant impact on such
individual's level of English language proficiency; or
``(iii) is migratory, has a native language that is not
English, and comes from an environment in which a language
that is not English is dominant; and
``(B) has difficultly in speaking or understanding the
English language to an extent that may be sufficient to deny
such individual--
``(i) the ability to successfully achieve in classrooms in
which the language of instruction is English; or
``(ii) the opportunity to fully participate in society.''.
SEC. 2029. WAIVER AUTHORITY TO EXPAND THE AVAILABILITY OF
SERVICES UNDER CHILD CARE AND DEVELOPMENT BLOCK
GRANT ACT OF 1990.
(a) Waiver Authority.--For such period up to June 30, 2006,
and to such extent as the Secretary considers to be
appropriate, the Secretary of Health and Human Service may
waive or modify, for any affected State, and any State
serving significant numbers of individuals adversely affected
by a Gulf hurricane disaster, provisions of the Child Care
and Development Block Grant Act of 1990 (42 U.S.C. 9858 et
seq.)--
(1) relating to Federal income limitations on eligibility
to receive child care services for which assistance is
provided under such Act,
(2) relating to work requirements applicable to eligibility
to receive child care services for which assistance is
provided under such Act,
(3) relating to limitations on the use of funds under
section 658G of the Child Care and Development Block Grant
Act of 1990, and
(4) preventing children designated as evacuees from
receiving priority for child care services provided under
such Act, except that children residing in a State and
currently receiving services should not lose such services in
order to accommodate evacuee children,
for purposes of easing State fiscal burdens and providing
child care services to children orphaned, or of families
displaced, as a result of a Gulf hurricane disaster.
(b) Definitions.--For purposes of this section:
(1) Affected state.--The term ``affected State'' means the
State of Alabama, Florida, Louisiana, Mississippi, or Texas.
(2) Gulf hurricane disaster.--The term ``Gulf hurricane
disaster'' means a major disaster that the President declared
to exist, in accordance with section 401 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act, and
that was caused by Hurricane Katrina or Hurricane Rita.
(3) Individual adversely affected by a gulf hurricane
disaster.--The term ``individual adversely affected by a Gulf
hurricane disaster'' means an individual who, on August 29,
2005, was living, working, or attending school in an area in
which the President has declared to exist a Gulf hurricane
disaster.
PART 4--STATE AND LOCAL FLEXIBILITY
SEC. 2041. PROGRAM COORDINATION DEMONSTRATION PROJECTS.
(a) Purpose.--The purpose of this section is to establish a
program of demonstration projects in a State or portion of a
State to coordinate multiple public assistance, workforce
development, and other programs, for the purpose of
supporting working individuals and families, helping families
escape welfare dependency, promoting child well-being, or
helping build stronger families, using innovative approaches
to strengthen service systems and provide more coordinated
and effective service delivery.
(b) Definitions.--In this section:
(1) Administering secretary.--The term ``administering
Secretary'' means, with respect to a qualified program, the
head of the Federal agency responsible for administering the
program.
(2) Qualified program.--The term ``qualified program''
means--
(A) activities funded under title I of the Workforce
Investment Act of 1998, except subtitle C of such title;
(B) a demonstration project authorized under section 505 of
the Family Support Act of 1988;
(C) activities funded under the Wagner-Peyser Act;
(D) activities funded under the Adult Education and Family
Literacy Act; or
(E) activities funded under the Child Care and Development
Block Grant Act of 1990;
(c) Application Requirements.--The head of a State entity
or of a sub-State entity administering 2 or more qualified
programs proposed to be included in a demonstration project
under this section shall (or, if the project is proposed to
include qualified programs administered by 2 or more such
entities, the heads of the administering entities (each of
whom shall be considered an applicant for purposes of this
section) shall jointly) submit to the administering Secretary
of each such program an application that contains the
following:
(1) Programs included.--A statement identifying each
qualified program to be included in the project, and
describing how the purposes of each such program will be
achieved by the project.
(2) Population served.--A statement identifying the
population to be served by the project and specifying the
eligibility criteria to be used.
(3) Description and justification.--A detailed description
of the project, including--
(A) a description of how the project is expected to improve
or enhance achievement of the purposes of the programs to be
included in the project, from the standpoint of quality, of
cost-effectiveness, or of both; and
(B) a description of the performance objectives for the
project, including any proposed modifications to the
performance measures and reporting requirements used in the
programs.
(4) Waivers requested.--A description of the statutory and
regulatory requirements with respect to which a waiver is
requested in order to carry out the project, and a
justification of the need for each such waiver.
(5) Cost neutrality.--Such information and assurances as
necessary to establish to
[[Page H10554]]
the satisfaction of the administering Secretary, in
consultation with the Director of the Office of Management
and Budget, that the proposed project is reasonably expected
to meet the applicable cost neutrality requirements of
subsection (d)(4).
(6) Evaluation and reports.--An assurance that the
applicant will conduct ongoing and final evaluations of the
project, and make interim and final reports to the
administering Secretary, at such times and in such manner as
the administering Secretary may require.
(7) Other information and assurances.--Such other
information and assurances as the administering Secretary may
require.
(d) Approval of Applications.--
(1) In general.--The administering Secretary with respect
to a qualified program that is identified in an application
submitted pursuant to subsection (c) may approve the
application and, except as provided in paragraph (2), waive
any requirement applicable to the program, to the extent
consistent with this section and necessary and appropriate
for the conduct of the demonstration project proposed in the
application, if the administering Secretary determines that
the project--
(A) has a reasonable likelihood of achieving the objectives
of the programs to be included in the project;
(B) may reasonably be expected to meet the applicable cost
neutrality requirements of paragraph (4), as determined by
the Director of the Office of Management and Budget; and
(C) includes the coordination of 2 or more qualified
programs.
(2) Provisions excluded from waiver authority.--A waiver
shall not be granted under paragraph (1)--
(A) with respect to any provision of law relating to--
(i) civil rights or prohibition of discrimination;
(ii) purposes or goals of any program;
(iii) maintenance of effort requirements;
(iv) health or safety;
(v) labor standards under the Fair Labor Standards Act of
1938; or
(vi) environmental protection;
(B) with respect to section 241(a) of the Adult Education
and Family Literacy Act;
(C) in the case of a program under the Workforce Investment
Act, with respect to any requirement the waiver of which
would violate section 189(i)(4)(A)(i) of such Act;
(D) with respect to any requirement that a State pass
through to a sub-State entity part or all of an amount paid
to the State;
(E) if the waiver would waive any funding restriction or
limitation provided in an appropriations Act, or would have
the effect of transferring appropriated funds from 1
appropriations account to another; or
(F) except as otherwise provided by statute, if the waiver
would waive any funding restriction applicable to a program
authorized under an Act which is not an appropriations Act
(but not including program requirements such as application
procedures, performance standards, reporting requirements, or
eligibility standards), or would have the effect of
transferring funds from a program for which there is direct
spending (as defined in section 250(c)(8) of the Balanced
Budget and Emergency Deficit Control Act of 1985) to another
program.
(3) Agreement of each administering secretary required.--
(A) In general.--An applicant may not conduct a
demonstration project under this section unless each
administering Secretary with respect to any program proposed
to be included in the project has approved the application to
conduct the project.
(B) Agreement with respect to funding and implementation.--
Before approving an application to conduct a demonstration
project under this section, an administering Secretary shall
have in place an agreement with the applicant with respect to
the payment of funds and responsibilities required of the
administering Secretary with respect to the project.
(4) Cost-neutrality requirement.--
(A) General rule.--Notwithstanding any other provision of
law (except subparagraph (B)), the total of the amounts that
may be paid by the Federal Government for a fiscal year with
respect to the programs in the State in which an entity
conducting a demonstration project under this section is
located that are affected by the project shall not exceed the
estimated total amount that the Federal Government would have
paid for the fiscal year with respect to the programs if the
project had not been conducted, as determined by the Director
of the Office of Management and Budget.
(B) Special rule.--If an applicant submits to the Director
of the Office of Management and Budget a request to apply the
rules of this subparagraph to the programs in the State in
which the applicant is located that are affected by a
demonstration project proposed in an application submitted by
the applicant pursuant to this section, during such period of
not more than 5 consecutive fiscal years in which the project
is in effect, and the Director determines, on the basis of
supporting information provided by the applicant, to grant
the request, then, notwithstanding any other provision of
law, the total of the amounts that may be paid by the Federal
Government for the period with respect to the programs shall
not exceed the estimated total amount that the Federal
Government would have paid for the period with respect to the
programs if the project had not been conducted.
(5) 90-day approval deadline.--
(A) In general.--If an administering Secretary receives an
application to conduct a demonstration project under this
section and does not disapprove the application within 90
days after the receipt, then--
(i) the administering Secretary is deemed to have approved
the application for such period as is requested in the
application, except to the extent inconsistent with
subsection (e); and
(ii) any waiver requested in the application which applies
to a qualified program that is identified in the application
and is administered by the administering Secretary is deemed
to be granted, except to the extent inconsistent with
paragraph (2) or (4) of this subsection.
(B) Deadline extended if additional information is
sought.--The 90-day period referred to in subparagraph (A)
shall not include any period that begins with the date the
Secretary requests the applicant to provide additional
information with respect to the application and ends with the
date the additional information is provided.
(e) Duration of Projects.--A demonstration project under
this section may be approved for a term of not more than 5
years.
(f) Reports to Congress.--
(1) Report on disposition of applications.--Within 90 days
after an administering Secretary receives an application
submitted pursuant to this section, the administering
Secretary shall submit to each Committee of the Congress
which has jurisdiction over a qualified program identified in
the application notice of the receipt, a description of the
decision of the administering Secretary with respect to the
application, and the reasons for approving or disapproving
the application.
(2) Reports on projects.--Each administering Secretary
shall provide annually to the Congress a report concerning
demonstration projects approved under this section,
including--
(A) the projects approved for each applicant;
(B) the number of waivers granted under this section, and
the specific statutory provisions waived;
(C) how well each project for which a waiver is granted is
improving or enhancing program achievement from the
standpoint of quality, cost-effectiveness, or both;
(D) how well each project for which a waiver is granted is
meeting the performance objectives specified in subsection
(c)(3)(B);
(E) how each project for which a waiver is granted is
conforming with the cost-neutrality requirements of
subsection (d)(4); and
(F) to the extent the administering Secretary deems
appropriate, recommendations for modification of programs
based on outcomes of the projects.
PART 5--EFFECTIVE DATE
SEC. 2051. EFFECTIVE DATE.
(a) In General.--Except as otherwise provided in this
subtitle, this subtitle and the amendments made by this
subtitle shall take effect on the date of the enactment of
this Act.
(b) Exception.--In the case of a State plan under part A of
title IV of the Social Security Act which the Secretary
determines requires State legislation in order for the plan
to meet the additional requirements imposed by the amendments
made by this subtitle, the effective date of the amendments
imposing the additional requirements shall be 3 months after
the first day of the first calendar quarter beginning after
the close of the first regular session of the State
legislature that begins after the date of the enactment of
this Act. For purposes of the preceding sentence, in the case
of a State that has a 2-year legislative session, each year
of the session shall be considered to be a separate regular
session of the State legislature.
Subtitle B--Higher Education
SEC. 2101. SHORT TITLE.
This subtitle may be cited as the ``Higher Education Budget
Reconciliation Act of 2005''.
PART 1--AMENDMENTS TO THE HIGHER EDUCATION ACT OF 1965
SEC. 2111. REFERENCES; EFFECTIVE DATE.
(a) References.--Except as otherwise expressly provided,
whenever in this part 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 Higher Education Act of
1965 (20 U.S.C. 1001 et seq.).
(b) Effective Date.--Except as otherwise provided in this
part, the amendments made by this part shall be effective on
the date of enactment of this Act.
SEC. 2112. MODIFICATION OF 50/50 RULE.
Section 102(a)(3) (20 U.S.C. 1002(a)(3)) is amended--
(1) in subparagraph (A), by inserting ``(excluding courses
offered by telecommunications as defined in section
484(l)(4))'' after ``courses by correspondence''; and
(2) in subparagraph (B), by inserting ``(excluding courses
offered by telecommunications as defined in section
484(l)(4))'' after ``correspondence courses''.
SEC. 2113. REAUTHORIZATION OF FEDERAL FAMILY EDUCATION LOAN
PROGRAM.
(a) Authorization of Appropriations.--Section 421(b)(5) (20
U.S.C. 1071(b)(5)) is amended by striking ``an administrative
cost allowance'' and inserting ``a loan processing and
issuance fee''.
[[Page H10555]]
(b) Extension of Authority.--
(1) Federal insurance limitations.--Section 424(a) (20
U.S.C. 1074(a)) is amended--
(A) by striking ``2004'' and inserting ``2012''; and
(B) by striking ``2008'' and inserting ``2016''.
(2) Guaranteed loans.--Section 428(a)(5) (20 U.S.C.
1078(a)(5)) is amended--
(A) by striking ``2004'' and inserting ``2012''; and
(B) by striking ``2008'' and inserting ``2016''.
(3) Consolidation loans.--Section 428C(e) (20 U.S.C. 1078-
3(e)) is amended by striking ``2004'' and inserting ``2012''.
SEC. 2114. LOAN LIMITS.
(a) Federal Insurance Limits.--Section 425(a)(1)(A) (20
U.S.C. 1075(a)(1)(A)) is amended--
(1) in clause (i)(I), by striking ``$2,625'' and inserting
``$3,500''; and
(2) in clause (ii)(I), by striking ``$3,500'' and inserting
``$4,500''.
(b) Guarantee Limits.--Section 428(b)(1)(A) (20 U.S.C.
1078(b)(1)(A)) is amended--
(1) in clause (i)(I), by striking ``$2,625'' and inserting
``$3,500''; and
(2) in clause (ii)(I), by striking ``$3,500'' and inserting
``$4,500''.
(c) Counting of Consolidation Loans Against Limits.--
Section 428C(a)(3)(B) (20 U.S.C. 1078-3(a)(3)(B)) is amended
by adding at the end the following new clause:
``(ii) Loans made under this section shall, to the extent
used to pay off the outstanding principal balance on loans
made under this title, excluding capitalized interest, be
counted against the applicable limitations on aggregate
indebtedness contained in sections 425(a)(2), 428(b)(1)(B),
428H(d), 455, and 464(a)(2)(B).''.
(d) Effective Date.--The amendments made by this section
shall apply with respect to any loan made, insured, or
guaranteed under part B or part D of title IV of the Higher
Education Act of 1965 for which the first disbursement of
principal is made on or after July 1, 2007.
SEC. 2115. INTEREST RATES AND SPECIAL ALLOWANCES.
(a) FFEL Interest Rates.--Section 427A (20 U.S.C. 1077a(k))
is amended--
(1) in subsection (k)--
(A) by striking ``, and Before July 1, 2006'' in the
heading of such subsection; and
(B) by striking ``, and before July 1, 2006,'' each place
it appears in paragraphs (1), (2), and (3);
(2) by striking subsection (l); and
(3) by redesignating subsections (m) and (n) as subsections
(l) and (m), respectively.
(b) Direct Loan Interest Rates.--Section 455(b) (20 U.S.C.
1087e(b)) is amended--
(1) in paragraph (6)--
(A) by striking ``, and before july 1, 2006'' in the
heading of such paragraph; and
(B) by striking ``, and before July 1, 2006,'' each place
it appears in subparagraphs (A), (B), and (C);
(2) by striking paragraph (7); and
(3) by redesignating paragraphs (8) and (9) as paragraphs
(7) and (8), respectively.
(c) Consolidation Loan Interest Rates.--
(1) FFEL loans.--Section 427A(k) (20 U.S.C. 1077a(k)) is
further amended--
(A) in the heading of paragraph (4), by inserting ``before
july 1, 2006'' after ``loans'';
(B) by redesignating paragraph (5) as paragraph (6); and
(C) by inserting after paragraph (4) the following:
``(5) Consolidation loans on or after july 1, 2006.--
``(A) Borrower election.--With respect to any consolidation
loan under section 428C for which the application is received
by an eligible lender on or after July 1, 2006, the
applicable rate of interest shall, at the election of the
borrower at the time of application for the loan, be either
at the rate determined under subparagraph (B) or the rate
determined under subparagraph (C).
``(B) Variable rate.--Except as provided in subparagraph
(D), the rate determined under this subparagraph shall,
during any 12-month period beginning on July 1 and ending on
June 30, be determined on the preceding June 1 and, for such
12-month period, not be more than--
``(i) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to such June 1;
plus
``(ii) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
``(C) Fixed rate.--Except as provided in subparagraph (D),
the rate determined under this subparagraph shall be
determined for the duration of the term of the loan on the
July 1 that is or precedes the date on which the application
is received by an eligible lender, and shall be, for such
duration, not more than--
``(i) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to the June 1
immediately preceding such July 1; plus
``(ii) 3.3 percent,
except that such rate shall not exceed 8.25 percent.
``(D) Consolidation of plus loans.--In the case of any such
consolidation loan that is used to repay loans each of which
was made under section 428B or was a Federal Direct PLUS Loan
(or both), the rates determined under clauses (B) and (C)
shall be determined--
``(i) by substituting `3.1 percent' for `2.3 percent';
``(ii) by substituting `4.1 percent' for `3.3 percent'; and
``(iii) by substituting `9.0 percent' for `8.25
percent'.''.
(2) Direct loans.--Section 455(b)(6) (20 U.S.C.
1087e(b)(6)) is further amended--
(A) in the heading of subparagraph (D), by inserting
``before july 1, 2006'' after ``loans''
(B) by redesignating subparagraph (E) as subparagraph (F);
and
(C) by inserting after subparagraph (D) the following:
``(E) Consolidation loans on or after july 1, 2006.--
``(i) Borrower election.--Notwithstanding the preceding
paragraphs of this subsection, with respect to any Federal
Direct Consolidation Loan for which the application is
received by the Secretary on or after July 1, 2006, the
applicable rate of interest shall, at the election of the
borrower at the time of application for the loan, be either
at the rate determined under clause (ii) or the rate
determined under clause (iii).
``(ii) Variable rate.--Except as provided in clause (iv),
the rate determined under this clause shall, during any 12-
month period beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and, for such 12-month
period, be equal to--
``(I) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to such June 1;
plus
``(II) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
``(iii) Fixed rate.--Except as provided in clause (iv), the
rate determined under this clause shall be determined for the
duration of the term of the loan on the July 1 that is or
precedes the date on which the application is received by the
Secretary, and shall be, for such duration, equal to--
``(I) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to the June 1
immediately preceding such July 1; plus
``(II) 3.3 percent,
except that such rate shall not exceed 8.25 percent.
``(iv) Consolidation of plus loans.--In the case of any
such Federal Direct Consolidation Loan that is used to repay
loans each of which was made under section 428B or was a
Federal Direct PLUS Loan (or both), the rates determined
under clauses (ii) and (iii) shall be determined--
``(I) by substituting `3.1 percent' for `2.3 percent';
``(II) by substituting `4.1 percent' for `3.3 percent'; and
``(III) by substituting `9.0 percent' for `8.25
percent'.''.
(d) Consolidation Loan Conforming Amendment.--Section
428C(c)(1)(A)(ii) (20 U.S.C. 1078-3(c)(1)(A)(ii)) is amended
by striking ``section 427A(l)(3)'' and inserting ``section
427A(k)(5)''.
(e) Conforming Amendments for Special Allowances.--
(1) Amendment.--Subparagraph (I) of section 438(b)(2) (20
U.S.C. 1087-1(b)(2)) is amended--
(A) by striking clause (ii) and inserting the following:
``(ii) In school and grace period.--In the case of any loan
for which the first disbursement is made on or after January
1, 2000, and for which the applicable interest rate is
described in section 427A(k)(2), clause (i)(III) of this
subparagraph shall be applied by substituting `1.74 percent'
for `2.34 percent'.'';
(B) in clause (iii),
(i) by striking ``or (l)(2)''; and
(ii) by striking ``, subject to clause (v) of this
subparagraph'';
(C) in clause (iv)--
(i) by striking ``or (l)(3)'' and inserting ``or (k)(5)'';
and
(ii) by striking ``, subject to clause (vi) of this
subparagraph''; and
(D) by striking clauses (v), (vi), and (vii) and inserting
the following:
``(v) Recapture of excess interest.--
``(I) Excess credited.--With respect to a loan on which the
applicable interest rate is determined under section 427A(k)
and for which the first disbursement of principal is made on
or after July 1, 2006, if the applicable interest rate for
any 3-month period exceeds the special allowance support
level applicable to such loan under this subparagraph for
such period, then an adjustment shall be made by calculating
the excess interest in the amount computed under subclause
(II) of this clause, and by crediting the excess interest to
the Government not less often than annually.
``(II) Calculation of excess.--The amount of any adjustment
of interest on a loan to be made under this subsection for
any quarter shall be equal to--
``(aa) the applicable interest rate minus the special
allowance support level determined under this subparagraph;
multiplied by
``(bb) the average daily principal balance of the loan (not
including unearned interest added to principal) during such
calendar quarter; divided by
``(cc) four.
``(III) Special allowance support level.--For purposes of
this clause, the term `special allowance support level'
means, for any loan, a number expressed as a percentage equal
to the sum of the rates determined under subclauses (I) and
(III) of clause (i), and applying any substitution rules
applicable to such loan under clauses (ii), (iii), and (iv)
in determining such sum.''.
(2) Effective date.--The amendments made by this subsection
shall not apply with respect to any special allowance payment
[[Page H10556]]
made under section 438 of the Higher Education Act of 1965
(20 U.S.C 1087-1) before July 1, 2006.
SEC. 2116. ADDITIONAL LOAN TERMS AND CONDITIONS.
(a) Federal Default Fees.--
(1) In general.--Subparagraph (H) of section 428(b)(1) (20
U.S.C. 1078(b)(1)(H)) is amended to read as follows:
``(H) provides--
``(i) for loans for which the first disbursement of
principal is made before July, 1, 2006, for the collection of
a single insurance premium equal to not more than 1.0 percent
of the principal amount of the loan, by deduction
proportionately from each installment payment of the proceeds
of the loan to the borrower, and ensures that the proceeds of
the premium will not be used for incentive payments to
lenders; or
``(ii) for loans for which the first disbursement of
principal is made on or after July 1, 2006, for the
collection and deposit into the Federal Student Loan Reserve
Fund under section 422A of a Federal default fee of 1.0
percent of the principal amount of such loan, which shall be
deducted proportionately from each installment payment of the
proceeds of the loan to the borrower prior to payment to the
borrower, and ensures that the proceeds of the Federal
default fee will not be used for incentive payments to
lenders;''.
(2) Unsubsidized loans.--Section 428H(h) (20 U.S.C. 1078-
8(h)) is amended by adding at the end the following new
sentence: ``Effective for loans for which the first
disbursement of principal is made on or after July 1, 2006,
in lieu of the insurance premium authorized under the
preceding sentence, each State or nonprofit private
institution or organization having an agreement with the
Secretary under section 428(b)(1) shall collect and deposit
into the Federal Student Loan Reserve Fund under section 422A
a Federal default fee of 1.0 percent of the principal amount
of the loan, obtained by deduction proportionately from each
installment payment of the proceeds of the loan to the
borrower. The Federal default fee shall not be used for
incentive payments to lenders.''.
(3) Voluntary flexible agreements.--Section 428A(a)(1) (20
U.S.C. 1078-1(a)(1)) is amended--
(A) by striking ``or'' at the end of subparagraph (A);
(B) by striking the period at the end of subparagraph (B)
and inserting ``; or''; and
(C) by adding at the end the following new subparagraph:
``(C) the Federal default fee required by section
428(b)(1)(H) and the second sentence of section 428H(h).''.
(b) Disbursement.--Section 428(b)(1)(N) (20 U.S.C.
1078(b)(1)(N)) is amended--
(1) in clause (i), by inserting ``(including an eligible
foreign institution, except as provided in clause (ii))''
after ``institution''; and
(2) in clause (ii), by striking ``or at an eligible foreign
institution''.
(c) Repayment Plans.--
(1) FFEL loans.--Section 428(b)(9)(A) (20 U.S.C.
1078(b)(9)(A)) is amended--
(A) by inserting before the semicolon at the end of clause
(ii) the following: ``, and the Secretary may not restrict
the proportions or ratios by which such payments may be
graduated with the informed agreement of the borrower'';
(B) by striking ``and'' at the end of clause (iii);
(C) by redesignating clause (iv) as clause (v); and
(D) by inserting after clause (iii) the following new
clause:
``(iv) a delayed repayment plan under which the borrower
makes scheduled payments for not more than 2 years that are
annually not less than the amount of interest due or $600,
whichever is greater, and then makes payments in accordance
with clause (i), (ii), or (iii); and''.
(2) Direct loans.--Section 455(d)(1) (20 U.S.C.
1087e(d)(1)) is amended--
(A) by redesignating subparagraph (D) as subparagraph (E);
and
(B) by striking subparagraphs (A), (B), and (C) and
inserting the following:
``(A) a standard repayment plan, consistent with subsection
(a)(1) of this section and with section 428(b)(9)(A)(i);
``(B) a graduated repayment plan, consistent with section
428(b)(9)(A)(ii);
``(C) an extended repayment plan, consistent with section
428(b)(9)(A)(v), except that the borrower shall annually
repay a minimum amount determined by the Secretary in
accordance with section 428(b)(1)(L);
``(D) a delayed repayment plan under which the borrower
makes scheduled payments for not more than 2 years that are
annually not less than the amount of interest due or $600,
whichever is greater, and then makes payments in accordance
with subparagraph (A), (B), or (C); and''.
(d) Origination Fees.--
(1) FFEL program.--Paragraph (2) of section 438(c) (20
U.S.C. 1087-1(c)) is amended--
(A) by striking the designation and heading of such
paragraph and inserting the following:
``(2) Amount of origination fees.--
``(A) In general.--''; and
(B) by adding at the end the following new subparagraph:
``(B) Subsequent reductions.--Subparagraph (A) shall be
applied to loans made under this part (other than loans made
under sections 428C and 439(o))--
``(i) by substituting `2.0 percent' for `3.0 percent' with
respect to loans for which the first disbursement of
principal is made on or after July 1, 2006, and before July
1, 2007;
``(ii) by substituting `1.5 percent' for `3.0 percent' with
respect to loans for which the first disbursement of
principal is made on or after July 1, 2007, and before July
1, 2008;
``(iii) by substituting `1.0 percent' for `3.0 percent'
with respect to loans for which the first disbursement of
principal is made on or after July 1, 2008, and before July
1, 2009;
``(iv) by substituting `0.5 percent' for `3.0 percent' with
respect to loans for which the first disbursement of
principal is made on or after July 1, 2009, and before July
1, 2010; and
``(v) by substituting `0.0 percent' for `3.0 percent' with
respect to loans for which the first disbursement of
principal is made on or after July 1, 2010.''.
(2) Direct loan program.--Subsection (c) of section 455 (20
U.S.C. 1087e(c)) is amended to read as follows:
``(c) Loan Fee.--
``(1) In general.--The Secretary shall charge the borrower
of a loan made under this part an origination fee of 4.0
percent of the principal amount of loan.
``(2) Subsequent reduction.--Paragraph (1) shall be applied
to loans made under this part, other than Federal Direct
Consolidation loans and Federal Direct PLUS loans--
``(A) by substituting `not more or less than 3.0 percent'
for `4.0 percent' with respect to loans for which the first
disbursement of principal is made on or after July 1, 2006,
and before July 1, 2007;
``(B) by substituting `not more or less than 2.5 percent'
for `4.0 percent' with respect to loans for which the first
disbursement of principal is made on or after July 1, 2007,
and before July 1, 2008;
``(C) by substituting `not more or less than 2.0 percent'
for `4.0 percent' with respect to loans for which the first
disbursement of principal is made on or after July 1, 2008,
and before July 1, 2009;
``(D) by substituting `not more or less than 1.5 percent'
for `4.0 percent' with respect to loans for which the first
disbursement of principal is made on or after July 1, 2009,
and before July 1, 2010; and
``(E) by substituting `not more or less than 1.0 percent'
for `4.0 percent' with respect to loans for which the first
disbursement of principal is made on or after July 1, 2010.
``(3) Waivers and repayment incentives prohibited.--
Beginning with loans made on or after July 1, 2006, the
Secretary is prohibited--
``(A) from waiving any amount of the loan fee prescribed
under this section as part of a repayment incentive in
section 455(b)(7); and
``(B) from providing any repayment incentive before the
borrower enters repayment.''.
(e) Consolidation Loan Offset Charge.--
(1) FFEL consolidation loans.--Section 438(c) (20 U.S.C.
1087-1(c)) is further amended--
(A) in paragraph (1)(A), by inserting after ``paragraph (2)
of this subsection'' the following: ``and the amount the
lender is authorized to collect as a consolidation loan
offset charge in accordance with paragraph (9) of this
subsection'';
(B) in paragraph (1)(B)--
(i) by inserting ``and the consolidation loan offset
charge'' after ``origination fee''; and
(ii) by inserting ``and consolidation loan offset charges''
after ``origination fees'';
(C) in paragraphs (3) and (4), by inserting ``and
consolidation loan offset charge'' after ``origination fee''
each place it appears;
(D) in paragraph (5)--
(i) by inserting ``or consolidation loan offset charge''
after ``origination fee''; and
(ii) by inserting ``or consolidation loan offset charges''
after ``origination fees'';
(E) in paragraph (7)--
(i) by inserting ``and consolidation loan offset charges''
after ``origination fees''; and
(ii) by striking ``428A or''; and
(F) by adding at the end the following new paragraph:
``(9) Consolidation loan offset charge.--For any loan under
section 428C, the lender is authorized to collect a
consolidation loan offset charge in an amount not to exceed
1.0 percent of the principal amount of the loan. Such amount
may be added to the principal amount of the loan for
repayment by the borrower.''.
(2) Direct loans.--Section 455(c) (20 U.S.C. 1087e(c)), as
amended by subsection (d)(2) of this section, is further
amended by adding at the end the following new paragraph:
``(4) Consolidation loan offset charges.--For any Federal
Direct Consolidation Loan, the Secretary shall collect a
consolidation loan offset charge in an amount not more or
less than 1.0 percent of the principal amount of the loan.
Such amount may be added to the principal amount of the loan
for repayment by the borrower. Such amount is not subject to
the requirements of paragraph (3) of this subsection.''.
SEC. 2117. CONSOLIDATION LOAN CHANGES.
(a) Cross-Consolidation Between Programs.--Section 428C (20
U.S.C. 1078-3) is amended--
(1) in subsection (a)(3)(B)(i)--
(A) by inserting ``or under section 455(g)'' after ``under
this section'' both places it appears;
(B) by inserting ``under both sections'' after
``terminates''
(C) by striking ``and'' at the end of subclause (III);
(D) by striking the period at the end of subclause (IV) and
inserting ``; and''; and
(E) by adding at the end the following new subclause:
[[Page H10557]]
``(V) an individual may obtain a subsequent consolidation
loan under section 455(g) only for the purposes of obtaining
an income contingent repayment plan, and only if the loan has
been submitted to the guaranty agency for default
aversion.''; and
(2) in subsection (b)(5), by striking the first sentence
and inserting the following: ``In the event that a lender
with an agreement under subsection (a)(1) of this section
denies a consolidation loan application submitted to it by an
eligible borrower under this section, or denies an
application submitted to it by such a borrower for a
consolidation loan with income-sensitive repayment terms, the
Secretary shall offer any such borrower who applies for it, a
Federal Direct Consolidation loan. The Secretary shall offer
such a loan to a borrower who has defaulted, for the purpose
of resolving the default.''.
(b) Repeal of in-School Consolidation.--
(1) Definition of repayment period.--Section 428(b)(7)(A)
(20 U.S.C. 1078(b)(7)(A)) is amended by striking ``shall
begin--'' and all that follows through ``earlier date.'' and
inserting the following: ``shall begin the day after 6 months
after the date the student ceases to carry at least one-half
the normal full-time academic workload (as determined by the
institution).''.
(2) Conforming change to eligible borrower definition.--
Section 428C(a)(3)(A)(ii)(I) (20 U.S.C. 1078-
3(a)(3)(A)(ii)(I)) is amended by inserting ``as determined
under section 428(b)(7)(A)'' after ``repayment status''.
(c) Interest Payment Rebate Fee.--Section 428C(f)(2) (20
U.S.C. 1078-2(f)(2)) is amended--
(1) by striking ``Special rule.--'' and inserting ``Special
rules.--(A)''; and
(2) by adding at the end the following new subparagraph:
``(B) For consolidation loans based on applications
received on or after July 1, 2006, if 90 percent or more of
the total principal and accrued unpaid interest outstanding
on the loans held, directly or indirectly, by any holder is
comprised of principal and accrued unpaid interest owed on
consolidation loans, the rebate described in paragraph (1)
for such holder shall be equal to 1.30 percent of the
principal plus accrued unpaid interest on such loans.''.
(d) Additional Amendments.--Section 428C (20 U.S.C. 1078-3)
is amended--
(1) in subsection (a)(3), by striking subparagraph (C); and
(2) in subsection (b)(1)--
(A) by striking everything after ``under this section'' the
first place it appears in subparagraph (A) and inserting the
following: ``and that, if all the borrower's loans under this
part are held by a single holder, the borrower has notified
such holder that the borrower is seeking to obtain a
consolidation loan under this section;'';
(B) by striking ``(i) which'' and all that follows through
``and (ii)'' in subparagraph (C);
(C) by striking ``and'' at the end of subparagraph (E);
(D) by redesignating subparagraph (F) as subparagraph (G);
and
(E) by inserting after subparagraph (E) the following new
subparagraph:
``(F) that the lender of the consolidation loan shall, upon
application for such loan, provide the borrower with a clear
and conspicuous notice of at least the following information:
``(i) the effects of consolidation on total interest to be
paid, fees to be paid, and length of repayment;
``(ii) the effects of consolidation on a borrower's
underlying loan benefits, including loan forgiveness,
cancellation, deferment, and reduced interest rates on those
underlying loans;
``(iii) the ability of the borrower to prepay the loan, pay
on a shorter schedule, and to change repayment plans;
``(iv) that borrower benefit programs may vary among
different loan holders, and a description of how the borrower
benefits may vary among different loan holders;
``(v) the tax benefits for which borrowers may be eligible;
``(vi) the consequences of default; and
``(vii) that by making the application the applicant is not
obligated to agree to take the consolidation loan; and''.
(e) Effective Date for Single Holder Amendment.--The
amendment made by subsection (d)(2)(A) shall apply with
respect to any loan made under section 428C of the Higher
Education Act of 1965 (20 U.S.C. 1078-3) for which the
application is received by an eligible lender on or after
July 1, 2006.
(f) Conforming Amendments to Direct Loan Program.--Section
455 (20 U.S.C. 1087e) is amended
(1) in subsection (a)(1) by inserting ``428C,'' after
``428B,'';
(2) in subsection (a)(2)--
(A) by striking ``and'' at the end of subparagraph (B);
(B) by redesignating subparagraph (C) as subparagraph (D);
and
(C) by inserting after subparagraph (B) the following:
``(C) section 428C shall be known as `Federal Direct
Consolidation Loans'; and ''; and
(3) in subsection (g)--
(A) by striking the second sentence; and
(B) by adding at the end the following new sentences: ``To
be eligible for a consolidation loan under this part, a
borrower must meet the eligibility criteria set forth in
section 428C(a)(3). The Secretary, upon application for such
a loan, shall comply with the requirements applicable to a
lender under section 428C(b)(1)(F).''.
SEC. 2118. DEFERMENT OF STUDENT LOANS FOR MILITARY SERVICE.
(a) Federal Family Education Loans.--Section 428(b)(1)(M)
(20 U.S.C. 1078(b)(1)(M)) is amended--
(1) by striking ``or'' at the end of clause (ii);
(2) by redesignating clause (iii) as clause (iv); and
(3) by inserting after clause (ii) the following new
clause:
``(iii) not in excess of 3 years during which the
borrower--
``(I) is serving on active duty during a war or other
military operation or national emergency; or
``(II) is performing qualifying National Guard duty during
a war or other military operation or national emergency;
or''.
(b) Direct Loans.--Section 455(f)(2) (20 U.S.C.
1087e(f)(2)) is amended--
(1) by redesignating subparagraph (C) as subparagraph (D);
and
(2) by inserting after subparagraph (B) the following new
subparagraph:
``(C) not in excess of 3 years during which the borrower--
``(i) is serving on active duty during a war or other
military operation or national emergency; or
``(ii) is performing qualifying National Guard duty during
a war or other military operation or national emergency;
or''.
(c) Perkins Loans.--Section 464(c)(2)(A) (20 U.S.C.
1087dd(c)(2)(A)) is amended--
(1) by redesignating clauses (iii) and (iv) as clauses (iv)
and (v), respectively; and
(2) by inserting after clause (ii) the following new
clause:
``(iii) not in excess of 3 years during which the
borrower--
``(I) is serving on active duty during a war or other
military operation or national emergency; or
``(II) is performing qualifying National Guard duty during
a war or other military operation or national emergency;''.
(d) Definitions.--Section 481 (20 U.S.C. 1088) is amended
by adding at the end the following new subsection:
``(d) Definitions for Military Deferments.--For purposes of
parts B, D, and E of this title:
``(1) Active duty.--The term `active duty' has the meaning
given such term in section 101(d)(1) of title 10, United
States Code, except that such term does not include active
duty for training or attendance at a service school.
``(2) Military operation.--The term `military operation'
means a contingency operation as such term is defined in
section 101(a)(13) of title 10, United States Code.
``(3) National emergency.--The term `national emergency'
means the national emergency by reason of certain terrorist
attacks declared by the President on September 14, 2001, or
subsequent national emergencies declared by the President by
reason of terrorist attacks.
``(4) Serving on active duty.--The term `serving on active
duty during a war or other military operation or national
emergency' means service by an individual who is--
``(A) a Reserve of an Armed Force ordered to active duty
under section 12301(a), 12301(g), 12302, 12304, or 12306 of
title 10, United States Code, or any retired member of an
Armed Force ordered to active duty under section 688 of such
title, for service in connection with a war or other military
operation or national emergency, regardless of the location
at which such active duty service is performed; and
``(B) any other member of an Armed Force on active duty in
connection with such emergency or subsequent actions or
conditions who has been assigned to a duty station at a
location other than the location at which such member is
normally assigned.
``(5) Qualifying national guard duty.--The term `qualifying
National Guard duty during a war or other military operation
or national emergency' means service as a member of the
National Guard on full-time National Guard duty (as defined
in section 101(d)(5) of title 10, United States Code) under a
call to active service authorized by the President or the
Secretary of Defense for a period of more than 30 consecutive
days under section 502(f) of title 32, United States Code, in
connection with a war, other military operation, or a
national emergency declared by the President and supported by
Federal funds.''.
(e) Rule of Construction.--Nothing in the amendments made
by this section shall be construed to authorize any refunding
of any repayment of a loan.
(f) Effective Date.--The amendments made by this section
shall apply with respect to loans for which the first
disbursement is made on or after July 1, 1993, to an
individual who is a new borrower (within the meaning of
section 103 of the Higher Education Act of 1965 (20 U.S.C.
1003)) on or after such date.
SEC. 2119. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL
NEED.
Section 428K (20 U.S.C. 1078-11) is amended to read as
follows:
``SEC. 428K. LOAN FORGIVENESS FOR SERVICE IN AREAS OF
NATIONAL NEED.
``(a) Purposes.--The purposes of this section are--
``(1) to encourage highly trained individuals to enter and
continue in service in areas of national need; and
``(2) to reduce the burden of student debt for Americans
who dedicate their careers to service in areas of national
need.
[[Page H10558]]
``(b) Program Authorized.--
``(1) In general.--The Secretary is authorized to carry out
a program of assuming the obligation to repay, pursuant to
subsections (c)(2) and (d), a qualified loan amount for a
loan made, insured, or guaranteed under this part or part D
(other than loans made under section 428B and 428C and
comparable loans made under part D), for any new borrower
after the date of enactment of the Higher Education Budget
Reconciliation Act of 2005, who--
``(A) has been employed full-time for at least 5
consecutive complete school, academic, or calendar years, as
appropriate, in an area of national need described in
subsection (c); and
``(B) is not in default on a loan for which the borrower
seeks forgiveness.
``(2) Award basis.--Loan repayment under this section shall
be on a first-come, first-served basis pursuant to the
designation under subsection (c) and subject to the
availability of appropriations.
``(3) Regulations.--The Secretary is authorized to issue
such regulations as may be necessary to carry out the
provisions of this section.
``(c) Areas of National Need.--
``(1) Statutory categories.--For purposes of this section,
an individual shall be treated as employed in an area of
national need if the individual is employed full-time and is
any of the following:
``(A) Early childhood educators.--An individual who is
employed as an early childhood educator in an eligible
preschool program or child care facility in a low-income
community, and who is involved directly in the care,
development and education of infants, toddlers, or young
children through age five.
``(B) Nurses.--An individual who is employed--
``(i) as a nurse in a clinical setting; or
``(ii) as a member of the nursing faculty at an accredited
school of nursing (as those terms are defined in section 801
of the Public Health Service Act (42 U.S.C. 296)).
``(C) Foreign language specialists.--An individual who has
obtained a baccalaureate degree in a critical foreign
language and is employed--
``(i) in an elementary or secondary school as a teacher of
a critical foreign language; or
``(ii) in an agency of the United States Government in a
position that regularly requires the use of such critical
foreign language.
``(D) Librarians.--An individual who is employed as a
librarian in--
``(i) a public library that serves a geographic area within
which the public schools have a combined average of 30
percent or more of their total student enrollments composed
of children counted under section 1113(a)(5) of the
Elementary and Secondary Education Act of 1965; or
``(ii) an elementary or secondary school which is in the
school district of a local educational agency which is
eligible in such year for assistance pursuant to title I of
the Elementary and Secondary Education Act of 1965, and which
for the purpose of this paragraph and for that year has been
determined by the Secretary (pursuant to regulations and
after consultation with the State educational agency of the
State in which the school is located) to be a school in which
the enrollment of children counted under section 1113(a)(5)
of the Elementary and Secondary Education Act of 1965 exceeds
30 percent of the total enrollment of that school.
``(E) Highly qualified teachers: bilingual education and
low-income communities.--An individual who--
``(i) is highly qualified as such term is defined in
section 9101 of the Elementary and Secondary Education Act of
1965; and
``(ii)(I) is employed as a teacher of bilingual education;
or
``(II) is employed as a teacher for service in a public or
nonprofit private elementary or secondary school which is in
the school district of a local educational agency which is
eligible in such year for assistance pursuant to title I of
the Elementary and Secondary Education Act of 1965, and which
for the purpose of this paragraph and for that year has been
determined by the Secretary (pursuant to regulations and
after consultation with the State educational agency of the
State in which the school is located) to be a school in which
the enrollment of children counted under section 1113(a)(5)
of the Elementary and Secondary Education Act of 1965 exceeds
40 percent of the total enrollment of that school.
``(F) First responders in low-income communities.--An
individual who--
``(i) is employed as a firefighter, police officer, or
emergency medical technician; and
``(ii) serves as such in a low-income community.
``(G) Child welfare workers.--An individual who--
``(i) has obtained a degree in social work or a related
field with a focus on serving children and families; and
``(ii) is employed in public or private child welfare
services.
``(H) Speech-language pathologists.--An individual who is a
speech-language pathologist, who is employed in an eligible
preschool program or an elementary or secondary school, and
who has, at a minimum, a graduate degree in speech-language
pathology, or communication sciences and disorders.
``(I) Additional areas of national need.--An individual who
is employed in an area designated by the Secretary under
paragraph (2) and has completed a baccalaureate or advanced
degree related to such area.
``(2) Designation of additional areas of national need.--
After consultation with appropriate Federal, State, and
community-based agencies and organizations, the Secretary
shall designate additional areas of national need in which an
individual may be employed full-time to be eligible for loan
repayment under this section. In making such designations,
the Secretary shall take into account the extent to which--
``(A) the national interest in the area is compelling;
``(B) the area suffers from a critical lack of qualified
personnel; and
``(C) other Federal programs support the area concerned.
``(d) Qualified Loan Amount.--Subject to the availability
of appropriations, the Secretary shall repay not more than
$5,000 in the aggregate of the loan obligation on a loan made
under section 428 or 428H that is outstanding after the
completion of the fifth consecutive school, academic, or
calendar year, as appropriate, described in subsection
(b)(1).
``(e) Construction.--Nothing in this section shall be
construed to authorize the refunding of any repayment of a
loan made under section 428 or 428H.
``(f) Ineligibility of National Service Award Recipients.--
No student borrower may, for the same service, receive a
benefit under both this section and subtitle D of title I of
the National and Community Service Act of 1990 (42 U.S.C.
12601 et seq.).
``(g) Ineligibility for Double Benefits.--No borrower may
receive a reduction of loan obligations under both this
section and section 428J or 460.
``(h) Definitions.--In this section
``(1) Child care facility.--The term `child care facility'
means a facility, including a home, that--
``(A) provides for the education and care of children from
birth through age 5; and
``(B) meets any applicable State or local government
licensing, certification, approval, or registration
requirements.
``(2) Critical foreign language.--The term `critical
foreign language' includes the languages of Arabic, Korean,
Japanese, Chinese, Pashto, Persian-Farsi, Serbian-Croatian,
Russian, Portuguese, and any other language identified by the
Secretary of Education, in consultation with the Defense
Language Institute, the Foreign Service Institute, and the
National Security Education Program, as a critical foreign
language need.
``(3) Early childhood educator.--The term `early childhood
educator' means an early childhood educator employed in an
eligible preschool program who has completed a baccalaureate
or advanced degree in early childhood development, early
childhood education, or in a field related to early childhood
education.
``(4) Eligible preschool program.--The term `eligible
preschool program' means a program that provides for the
care, development, and education of infants, toddlers, or
young children through age 5, meets any applicable State or
local government licensing, certification, approval, and
registration requirements, and is operated by--
``(A) a public or private school that may be supported,
sponsored, supervised, or administered by a local educational
agency;
``(B) a Head Start agency serving as a grantee designated
under the Head Start Act (42 U.S.C. 9831 et seq.);
``(C) a nonprofit or community based organization; or
``(D) a child care program, including a home.
``(5) Low-income community.--In this subsection, the term
`low-income community' means a community in which 70 percent
of households earn less than 85 percent of the State median
household income.
``(6) Nurse.--The term `nurse' means a nurse who meets all
of the following:
``(A) The nurse graduated from--
``(i) an accredited school of nursing (as those terms are
defined in section 801 of the Public Health Service Act (42
U.S.C. 296));
``(ii) a nursing center; or
``(iii) an academic health center that provides nurse
training.
``(B) The nurse holds a valid and unrestricted license to
practice nursing in the State in which the nurse practices in
a clinical setting.
``(C) The nurse holds one or more of the following:
``(i) A graduate degree in nursing, or an equivalent
degree.
``(ii) A nursing degree from a collegiate school of nursing
(as defined in section 801 of the Public Health Service Act
(42 U.S.C. 296)).
``(iii) A nursing degree from an associate degree school of
nursing (as defined in section 801 of the Public Health
Service Act (42 U.S.C. 296)).
``(iv) A nursing degree from a diploma school of nursing
(as defined in section 801 of the Public Health Service Act
(42 U.S.C. 296)).
``(7) Speech-language pathologist.--The term `speech-
language pathologist' means a speech-language pathologist who
meets all of the following:
``(A) the speech-language pathologist has received, at a
minimum, a graduate degree in speech-language pathology or
communication sciences and disorders from an institution of
higher education accredited by an
[[Page H10559]]
agency or association recognized by the Secretary pursuant to
section 496(a) of this Act; and
``(B) the speech-language pathologist meets or exceeds the
qualifications described in section 1861(ll)(3) of the Social
Security Act (42 U.S.C. 1395x(3)).
``(i) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section such
sums as may be necessary for fiscal year 2006 and such sums
as may be necessary for each of the 5 succeeding fiscal
years.''.
SEC. 2120. UNSUBSIDIZED STAFFORD LOANS.
(a) Amendment.--Section 428H(d)(2)(C) (20 U.S.C. 1078-
8(d)(2)(C)) is amended by striking ``$10,000'' and inserting
``$12,000''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to loans for which the first disbursement of
principal is made on or after July 1, 2007.
SEC. 2121. ELIMINATION OF TERMINATION DATES FROM TAXPAYER-
TEACHER PROTECTION ACT OF 2004.
(a) Extension of Limitations on Special Allowance for Loans
From the Proceeds of Tax Exempt Issues.--Section 438(b)(2)(B)
(20 U.S.C. 1087-1(b)(2)(B)) is amended--
(1) in clause (iv), by striking ``and before January 1,
2006,''; and
(2) in clause (v)(II)--
(A) by striking ``and before January 1, 2006,'' each place
it appears in divisions (aa) and (bb); and
(B) by striking ``, and before January 1, 2006'' in
division (cc).
(b) Additional Limitation on Special Allowance for Loans
From the Proceeds of Tax Exempt Issues.--Section 438(b)(2)(B)
(20 U.S.C 1087-1(b)(2)(B)) is further amended by adding at
the end thereof the following new clause:
``(vi) Notwithstanding clauses (i), (ii), and (v), the
quarterly rate of the special allowance shall be the rate
determined under subparagraph (A), (E), (F), (G), (H), or (I)
of this paragraph, as the case may be, for a holder of
loans--
``(I) that were made or purchased on or after October 1,
2005; or
``(II) that were not earning a quarterly rate of special
allowance determined under clauses (i) or (ii) of
subparagraph (B) of this paragraph (20 U.S.C. 1087-
1(b)(2)(b)) as of October 1, 2005.''.
(c) Elimination of Effective Date Limitation on Higher
Teacher Loan Forgiveness Benefits.--Paragraph (3) of section
3(b) of the Taxpayer-Teacher Protection Act of 2004 (20
U.S.C. 1078-10 note) is amended by striking ``, and before
October 1, 2005''.
(d) Additional Changes to Teacher Loan Forgiveness
Provisions.--
(1) FFEL provisions.--Section 428J (20 U.S.C. 1078-10) is
amended--
(A) in subsection (b)(1)(B), by inserting after ``1965''
the following: ``, or meets the requirements of subsection
(g)(3)'';
(B) in subsection (c)(3)--
(i) by striking ``and'' at the end of subparagraph (A);
(ii) by striking the period at the end of subparagraph (B)
and inserting ``; and''; and
(iii) by inserting after subparagraph (B) the following new
subparagraph:
``(C) an elementary or secondary school teacher who
primarily teaches reading--
``(i) who meets the requirements of subsection (b);
``(ii) who has obtained a separate reading instruction
credential from the State in which the teacher is employed;
and
``(iii) who is certified by the chief administrative
officer of the public or nonprofit private elementary or
secondary school in which the borrower is employed to teach
reading--
``(I) as being proficient in teaching the essential
components of reading instruction as defined in section 1208
of the Elementary and Secondary Education Act of 1965; and
``(II) as having such credential.''; and
(C) in subsection (g), by adding at the end the following
new paragraph:
``(3) Private school teachers.--An individual who is
employed as a teacher in a private school and is exempt from
State certification requirements (unless otherwise applicable
under State law), may, in lieu of the requirement of
subsection (a)(1)(B), have such employment treated as
qualifying employment under this section if such individual
is permitted to and does satisfy rigorous subject knowledge
and skills tests by taking competency tests in the applicable
grade levels and subject areas. For such purposes, the
competency tests taken by such a private school teacher must
be recognized by 5 or more States for the purpose of
fulfilling the highly qualified teacher requirements under
section 9101 of the Elementary and Secondary Education Act of
1965, and the score achieved by such teacher on each test
must equal or exceed the average passing score of those 5
States.''.
(2) Direct loan provisions.--Section 460 (20 U.S.C. 1087j)
is amended--
(A) in subsection (b)(1)(A)(ii), by inserting after
``1965'' the following: ``, or meets the requirements of
subsection (g)(3)'';
(B) in subsection (c)(3)--
(i) by striking ``and'' at the end of subparagraph (A);
(ii) by striking the period at the end of subparagraph (B)
and inserting ``; and''; and
(iii) by inserting after subparagraph (B) the following new
subparagraph:
``(C) an elementary or secondary school teacher who
primarily teaches reading--
``(i) who meets the requirements of subsection (b);
``(ii) who has obtained a separate reading instruction
credential from the State in which the teacher is employed;
and
``(iii) who is certified by the chief administrative
officer of the public or nonprofit private elementary or
secondary school in which the borrower is employed to teach
reading--
``(I) as being proficient in teaching the essential
components of reading instruction as defined in section 1208
of the Elementary and Secondary Education Act of 1965; and
``(II) as having such credential.''; and
(C) in subsection (g), by adding at the end the following
new paragraph:
``(3) Private school teachers.--An individual who is
employed as a teacher in a private school and is exempt from
State certification requirements (unless otherwise applicable
under State law), may, in lieu of the requirement of
subsection (a)(1)(A)(ii), have such employment treated as
qualifying employment under this section if such individual
is permitted to and does satisfy rigorous subject knowledge
and skills tests by taking competency tests in the applicable
grade levels and subject areas. For such purposes, the
competency tests taken by such a private school teacher must
be recognized by 5 or more States for the purpose of
fulfilling the highly qualified teacher requirements under
section 9101 of the Elementary and Secondary Education Act of
1965, and the score achieved by such teacher on each test
must equal or exceed the average passing score of those 5
States.''.
SEC. 2122. LOAN FEES FROM LENDERS.
Section 438(d)(2) (20 U.S.C. 1087-1(d)(2)) is amended to
read as follows:
``(2) Amount of loan fees.--The amount of the loan fee
which shall be deducted under paragraph (1) shall be equal
to--
``(A) 0.50 percent of the principal amount of the loan with
respect to any loan under this part for which the first
disbursement was made on or after October 1, 1993, and before
July 1, 2006; and
``(B) 1.0 percent of the principal amount of the loan with
respect to any loan under this part for which the first
disbursement was made on or after July 1, 2006.''.
SEC. 2123. ADDITIONAL ADMINISTRATIVE PROVISIONS.
(a) Treatment of Exempt Claims.--
(1) Insurance coverage.--Section 428(b)(1)(G) (20 U.S.C.
1078(b)(1)(G)) is amended by inserting before the semicolon
at the end the following: ``and 100 percent of the unpaid
principal amount of exempt claims as defined in subsection
(c)(1)(G)''.
(2) Treatment.--Section 428(c)(1) (20 U.S.C. 1078(c)(1)) is
amended--
(A) by redesignating subparagraph (G) as subparagraph (H),
and moving such subparagraph 2 em spaces to the left; and
(B) by inserting after subparagraph (F) the following new
subparagraph:
``(G)(i) Notwithstanding any other provisions of this
section, in the case of exempt claims, the Secretary shall
apply the provisions of--
``(I) the fourth sentence of subparagraph (A) by
substituting `100 percent' for `95 percent';
``(II) subparagraph (B)(i) by substituting `100 percent'
for `85 percent'; and
``(III) subparagraph (B)(ii) by substituting `100 percent'
for `75 percent'.
``(ii) For purposes of clause (i) of this subparagraph, the
term `exempt claims' means claims with respect to loans for
which it is determined that the borrower (or the student on
whose behalf a parent has borrowed), without the lender's or
the institution's knowledge at the time the loan was made,
provided false or erroneous information or took actions that
caused the borrower or the student to be ineligible for all
or a portion of the loan or for interest benefits thereon.''.
(b) Reduction of Insurance Percentage.--
(1) Insurance percentage reduction.--Section 428(b)(1)(G)
as amended by subsection (a)(1) is further amended by
inserting after the matter inserted by such subsection the
following: ``, except, for any loan for which the first
disbursement of principal is made on or after July 1, 2006,
the preceding provisions of this subparagraph shall be
applied by substituting `96 percent' for `98 percent' ''.
(2) Increase insurance for exceptional performance.--
Section 428I (20 U.S.C. 1078-9) is amended to read as
follows:
``SEC. 428I. SPECIAL INSURANCE AND REINSURANCE RULES FOR
EXCEPTIONAL PERFORMANCE.
``(a) Designation of Lenders and Servicers.--
``(1) In general.--Whenever the Secretary determines that
an eligible lender or servicer meets the performance measures
required by paragraph (2), the Secretary shall designate that
eligible lender or servicer, as the case may be, for
exceptional performance. The Secretary shall notify each
appropriate guaranty agency of the eligible lenders and
servicers designated under this section.
``(2) Performance measures.--
``(A) In determining whether to award a lender or servicer
the exceptional performance designation, the Secretary shall
require that the lender or servicer be performing at or above
the 95 percentile of the industry, and demonstrate improved
performance against the lender's or servicer's average of the
last 3 years on the factors described in subparagraph (B).
``(B) The factors on which the Secretary shall require
improvement shall include--
``(i) delinquency rates;
[[Page H10560]]
``(ii) the rate at which delinquent accounts are restored
to good standing;
``(iii) default rates;
``(iv) the rate of rejected claims; and
``(v) any other such measures as determined by the
Secretary.
``(C) In addition, the Secretary shall not make any award
of such a designation unless the consequence of the
designation is cost-neutral to the Federal Government.
``(3) Additional information on lenders and servicers.--
Each appropriate guaranty agency shall provide the Secretary
with such other information in its possession regarding an
eligible lender or servicer desiring designation as may
relate to the Secretary's determination under paragraph (1),
including but not limited to any information suggesting that
the application of a lender or servicer for designation
should not be approved.
``(4) Determinations by the secretary.--
``(A) The Secretary shall designate an eligible lender or
servicer for exceptional performance if the eligible lender
or servicer meets the performance measures required by
paragraph (2).
``(B) The Secretary shall make the determination under
paragraph (1) based upon the documentation submitted by the
eligible lender or servicer as specified in regulation, such
other information as provided by any guaranty agency under
paragraph (3), and any information in the possession of the
Secretary or submitted by any other agency or office of the
Federal Government.
``(C) The Secretary shall inform the eligible lender or
servicer and the appropriate guaranty agency that its
application for designation as an exceptional performance
lender or servicer has been approved or disapproved.
``(5) Transition.--
``(A) Any eligible lender or servicer designated for
exceptional performance as of the day before the date of
enactment of the Higher Education Budget Reconciliation Act
of 2005 shall continue to be so designated, and subject to
the requirements of this section as in effect on that day
(including revocation), until the performance standards
described in paragraph (2) are established.
``(B) The Secretary shall not designate any additional
eligible lenders or servicers for exceptional performance
until those performance standards are established.
``(b) Payment to Lenders and Servicers.--A guaranty agency
shall pay, to each eligible lender or servicer (as agent for
an eligible lender) designated under subsection (a), 98
percent of the unpaid principal and interest of all loans for
which claims are submitted for payment by that eligible
lender or servicer for the one-year period following the
receipt by the guaranty agency of the notification of
designation under this section, or until the guaranty agency
receives notice from the Secretary that the designation of
the lender or servicer under subsection (a)(2) has been
revoked.
``(c) Revocation Authority.--
``(1) The Secretary shall revoke the designation of a
lender or a servicer under subsection (a) if the Secretary
determines that the lender or servicer has failed to meet the
performance standards required by subsection (a)(2).
``(2) Notwithstanding any other provision of this section,
a designation under subsection (a) may be revoked at any time
by the Secretary, in the Secretary's discretion, if the
Secretary determines that the eligible lender or servicer has
failed to meet the criteria and performance standards
established by the Secretary in regulation, or if the
Secretary believes the lender or servicer may have engaged in
fraud in securing designation under subsection (a), or is
failing to service loans in accordance with program
regulations.
``(d) Documentation.--Nothing in this section shall
restrict or limit the authority of guaranty agencies to
require the submission of claims documentation evidencing
servicing performed on loans, except that the guaranty agency
may not require greater documentation than that required for
lenders and servicers not designated under subsection (a).
``(e) Special Rule.--Reimbursements made by the Secretary
on loans submitted for claim by an eligible lender or loan
servicer designated for exceptional performance under this
section shall not be subject to additional review by the
Secretary or repurchase by the guaranty agency for any reason
other than a determination by the Secretary that the eligible
lender or loan servicer engaged in fraud or other purposeful
misconduct in obtaining designation for exceptional
performance.
``(f) Limitation.--Nothing in this section shall be
construed to affect the processing of claims on student loans
of eligible lenders not subject to this section.
``(g) Claims.--A lender or servicer designated under
subsection (a) failing to service loans or otherwise comply
with applicable program regulations shall be considered in
violation of section 3729 of title 31, United States Code.
``(h) Termination.--The Secretary may terminate the
designation of lenders and servicers under this section if he
determines that termination would be in the fiscal interest
of the United States.
``(i) Definitions.--As used in this section--
``(1) the term `eligible loan' means a loan made, insured,
or guaranteed under this part; and
``(2) the term `servicer' means an entity servicing and
collecting student loans that--
``(A) has substantial experience in servicing and
collecting consumer loans or student loans;
``(B) has an independent financial audit annually which is
furnished to the Secretary and any other parties designated
by the Secretary;
``(C) has business systems which are capable of meeting the
requirements of this part;
``(D) has adequate personnel who are knowledgeable about
the student loan programs authorized by this part; and
``(E) does not have any owner, majority shareholder,
director, or officer of the entity who has been convicted of
a felony.''.
(3) Effective date of amendments.--The amendments made by
this subsection shall apply with respect to loans for which
the first disbursement of principal is made on or after July
1, 2006.
(c) Documentation of Forbearance Agreements.--Section
428(c) (20 U.S.C. 1078(c)) is further amended--
(1) in paragraph (3)(A)(i)--
(A) by striking ``in writing''; and
(B) by inserting ``and documented in accordance with
paragraph (10)'' after ``approval of the insurer''; and
(2) by adding at the end the following new paragraph:
``(10) Documentation of forbearance agreements.--For the
purposes of paragraph (3), the terms of forbearance agreed to
by the parties shall be documented by confirming the
agreement of the borrower by notice to the borrower from the
lender, and by recording the terms in the borrower's file.''.
(d) Consolidation of Defaulted Loans.--Section 428(c) (20
U.S.C. 1078(c)) is further amended--
(1) in paragraph (2)(A)--
(A) by inserting ``(i)'' after ``including''; and
(B) by inserting before the semicolon at the end the
following: ``and (ii) requirements establishing procedures to
preclude consolidation lending from being an excessive
proportion of guaranty agency recoveries on defaulted loans
under this part'';
(2) in paragraph (2)(D), by striking ``paragraph (6)'' and
inserting ``paragraph (6)(A)''; and
(3) in paragraph (6)--
(A) by inserting ``(A)'' before ``For the purpose of
paragraph (2)(D),'';
(B) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively; and
(C) by adding at the end the following new subparagraphs:
``(B) A guaranty agency shall--
``(i) on or after October 1, 2006--
``(I) not charge the borrower collection costs in an amount
in excess of 18.5 percent of the outstanding principal and
interest of a defaulted loan that is paid off through
consolidation by the borrower under this title; and
``(II) remit to the Secretary a portion of the collection
charge under subclause (I) equal to 8.5 percent of the
outstanding principal and interest of such defaulted loan;
and
``(ii) on and after October 1, 2009, remit to the Secretary
the entire amount charged under clause (i)(I) with respect to
each defaulted loan that is paid off with excess
consolidation proceeds.
``(C) For purposes of subparagraph (B), the term `excess
consolidation proceeds' means, with respect to any guaranty
agency for any Federal fiscal year beginning on or after
October 1, 2009, the proceeds of consolidation of defaulted
loans under this title that exceed 45 percent of the agency's
total collections on defaulted loans in such Federal fiscal
year.''.
(e) Collection Retention Percentages.--Clause (ii) of
section 428(c)(6)(B) (20 U.S.C. 1078(c)(6)(B)), as
redesignated by subsection (d)(3) of this section, is amended
to read as follows:
``(ii) an amount equal to 24 percent of such payments for
use in accordance with section 422B, except that--
``(I) beginning on October 1, 2003, and ending on October
1, 2006, this clause shall be applied by substituting `23
percent' for `24 percent'; and
``(II) beginning on October 1, 2006, this clause shall be
applied by substituting `20 percent' for `24 percent'.''.
(f) Voluntary Flexible Agreements.--Section 428A (20 U.S.C.
1078-1) is amended--
(1) in subsection (a)(1)(B), by striking ``unless the
Secretary'' and all that follows through ``designated
guarantor'';
(2) by striking paragraph (2) of subsection (a);
(3) in paragraph (4)(B) of subsection (a), by striking
``and any waivers provided to other guaranty agencies under
paragraph (2)'';
(4) by redesignating paragraphs (3) and (4) of subsection
(a) as paragraphs (2) and (3), respectively; and
(5) by striking paragraph (3) of subsection (c) and
inserting the following:
``(3) Notice to interested parties.--Once the Secretary
reaches a tentative agreement in principle under this
section, the Secretary shall publish in the Federal Register
a notice that invites interested parties to comment on the
proposed agreement. The notice shall state how to obtain a
copy of the tentative agreement in principle and shall give
interested parties no less than 30 days to provide comments.
The Secretary may consider such comments prior to providing
the notices pursuant to paragraph (2).''.
(g) Fraud: Repayment Required.--Section 428B(a)(1) (20
U.S.C. 1078-2(a)(1)) is amended--
(1) by striking ``and'' at the end of subparagraph (A);
(2) by redesignating subparagraph (B) as subparagraph (C);
and
[[Page H10561]]
(3) by inserting after subparagraph (A) the following new
subparagraph:
``(B) in the case of a parent who has been convicted of, or
has pled nolo contendere or guilty to, a crime involving
fraud in obtaining funds under this title, such parent has
completed the repayment of such funds to the Secretary, or to
the holder in the case of a loan under this title obtained by
fraud; and''.
(h) Default Reduction Program.--Section 428F(a)(1) (20
U.S.C. 1078-6(a)(1)) is amended--
(1) in subparagraph (A), by striking ``consecutive payments
for 12 months'' and inserting ``9 payments made within 20
days of the due date during 10 consecutive months'';
(2) by redesignating subparagraph (C) as subparagraph (D);
and
(3) by inserting after subparagraph (B) the following new
subparagraph:
``(C) A guaranty agency may charge the borrower and retain
collection costs in an amount not to exceed 18.5 percent of
the outstanding principal and interest at the time of sale of
a loan rehabilitated under subparagraph (A).''.
(i) Financial and Economic Literacy.--
(1) Default reduction program.--Section 428F is further
amended by adding at the end the following:
``(c) Financial and Economic Literacy.--Where appropriate,
each program described under subsection (b) shall include
making financial and economic education materials available
to the borrower.''.
(2) Program assistance for borrowers.--Section 432(k)(1)
(20 U.S.C. 1082(k)(1)) is amended by striking ``and
offering'' and all that follows through the period and
inserting ``, offering loan repayment matching provisions as
part of employee benefit packages, and providing employees
with financial and economic education and counseling.''.
(j) Credit Bureau Organization Agreements.--Section 430A(a)
(20 U.S.C. 1080a(a)) is amended by striking ``agreements with
credit bureau organizations'' and inserting ``an agreement
with each national credit bureau organization (as described
in section 603(p) of the Fair Credit Reporting Act)''.
(k) Uniform Administrative and Claims Procedure.--Section
432(l)(1)(H) (20 U.S.C. 1082(l)(1)(H)) is amended by
inserting ``and anticipated graduation date'' after ``status
change''.
(l) Default Reduction Management.--Section 432 is further
amended--
(1) by striking subsection (n); and
(2) by redesignating subsections (o) and (p) as subsections
(n) and (o), respectively.
(m) Schools as Lenders.--Paragraph (2) of section 435(d)
(20 U.S.C. 1085(d)(2)) is amended to read as follows:
``(2) Requirements for eligible institutions.--
``(A) In general.--To be an eligible lender under this
part, an eligible institution--
``(i) shall employ at least one person whose full-time
responsibilities are limited to the administration of
programs of financial aid for students attending such
institution;
``(ii) shall not be a home study school;
``(iii) shall not--
``(I) make a loan to any undergraduate student;
``(II) make a loan other than a loan under section 428 or
428H to a graduate or professional student; or
``(III) make a loan to a borrower who is not enrolled at
that institution;
``(iv) shall award any contract for financing, servicing,
or administration of loans under this title on a competitive
basis;
``(v) shall offer loans that carry an origination fee or an
interest rate, or both, that are less than such fee or rate
authorized under the provisions of this title;
``(vi) shall not have a cohort default rate (as defined in
section 435(m)) greater than 10 percent;
``(vii) shall, for any year for which the institution
engages in activities as an eligible lender, provide for a
compliance audit conducted in accordance with section
428(b)(1)(U)(iii)(I), and the regulations thereunder, and
submit the results of such audit to the Secretary; and
``(viii) shall use any proceeds from special allowance
payments and interest payments from borrowers, interest
subsidies received from the Department of Education, and any
proceeds from the sale or other disposition of loans, for
need-based grant programs.
``(B) Administrative expenses.--An eligible lender under
subparagraph (A) shall be permitted to use a portion of the
proceeds described in subparagraph (A)(viii) for reasonable
and direct administrative expenses.
``(C) Supplement, not supplant.--An eligible lender under
subparagraph (A) shall ensure that the proceeds described in
subparagraph (A)(viii) are used to supplement, and not to
supplant, non-Federal funds that would otherwise be used for
need-based grant programs.''.
(n) Disability Determinations.--Section 437(a) (20 U.S.C.
1087(a)) is amended by adding at the end the following new
sentence: ``In making such determination of permanent and
total disability, the Secretary shall not require a borrower
who has been certified as permanently and totally disabled by
the Department of Veterans Affairs or the Social Security
Administration to present further documentation of disability
for purposes of this title.''.
(o) Treatment of Falsely Certified Borrowers.--Section
437(c)(1) (20 U.S.C. 1087(c)(1)) is amended by inserting ``or
parent's eligibility'' after ``such student's eligibility''.
(p) Perfection of Security Interests.--Section 439(d) (20
U.S.C. 1087-2(d)) is amended--
(1) by striking paragraph (3); and
(2) by redesignating paragraphs (4) and (5) as paragraphs
(3) and (4), respectively.
(q) Additional Technical Amendments.--
(1) Section 428(a)(2)(A) (20 U.S.C. 1078(a)(2)(A)) is
amended--
(A) by striking ``and'' at the end of subclause (II) of
clause (i); and
(B) by moving the margin of clause (iii) two ems to the
left.
(2) Section 428(a)(3)(A)(v) (20 U.S.C. 1078(a)(3)(A)(v)) is
amended--
(A) by striking ``or'' at the end of subclause (I);
(B) by striking the period at the end of subclause (II) and
inserting ``; or''; and
(C) by adding after subclause (II) the following new
subclause:
``(III) in the case of a loan disbursed through an escrow
agent, 3 days before the first disbursement of the loan.''.
(3) Section 428(c)(1)(A) (20 U.S.C. 1078(c)(1)(A)) is
amended by striking ``45 days'' in the last sentence and
inserting ``30 days''.
(4) Section 428(i)(1) (20 U.S.C. 1078(i)(1)) is amended by
striking ``21 days'' in the third sentence and inserting ``10
days''.
(5) Section 428G(e) (20 U.S.C. 1078-7(e)) is amended by
striking ``, made to a student to cover the cost of
attendance at an eligible institution outside the United
States,''.
(6) Section 428H(e) (20 U.S.C. 1078-8(e)) is amended by
striking paragraph (6) and inserting the following:
``(6) Time limits on billing interest.--A lender may not
receive interest on a loan under this section from a borrower
for any period that precedes the dates described in section
428(a)(3)(A)(v).''.
(7) Section 432(m)(1)(B) (20 U.S.C. 1082(m)(1)(B)) is
amended--
(A) in clause (i), by inserting ``and'' after the semicolon
at the end; and
(B) in clause (ii), by striking ``; and'' and inserting a
period.
(8) Section 438(b)(4)(B) (20 U.S.C. 1087-1(b)(4)(B)) is
amended by striking ``shall be computed'' and all that
follows through ``to the loan'' and inserting ``described in
subparagraph (A) shall be computed using the interest rate
described in section 3902(a) of title 31, United States
Code,''.
SEC. 2124. FUNDS FOR ADMINISTRATIVE EXPENSES.
Section 458 is amended to read as follows:
``SEC. 458. FUNDS FOR ADMINISTRATIVE EXPENSES.
``(a) Administrative Expenses.--
``(1) Mandatory funds for fiscal year 2006.--For fiscal
year 2006, there shall be available to the Secretary, from
funds not otherwise appropriated, funds to be obligated for--
``(A) administrative costs under this part and part B,
including the costs of the direct student loan programs under
this part; and
``(B) account maintenance fees payable to guaranty agencies
under part B and calculated in accordance with subsections
(b) and (c),
not to exceed (from such funds not otherwise appropriated)
$820,000,000 in fiscal year 2006.
``(2) Authorization for administrative costs beginning in
fiscal year 2007.--For each of the fiscal years 2007 through
2011, there are authorized to be appropriated such sums as
may be necessary for administrative costs under this part and
part B, including the costs of the direct student loan
programs under this part.
``(3) Continuing mandatory funds for account maintenance
fees.--For each of the fiscal years 2007 through 2011, there
shall be available to the Secretary, from funds not otherwise
appropriated, funds to be obligated for account maintenance
fees payable to guaranty agencies under part B and calculated
in accordance with subsection (b).
``(4) Account mainenance fees.--Account maintenance fees
under paragraph (3) shall be paid quarterly and deposited in
the Agency Operating Fund established under section 422B.
``(5) Carryover.--The Secretary may carry over funds made
available under this section to a subsequent fiscal year.
``(b) Calculation Basis.--Account maintenance fees payable
to guaranty agencies under subsection (a)(3) shall not exceed
the basis of 0.10 percent of the original principal amount of
outstanding loans on which insurance was issued under part B.
``(c) Budget Justification.--No funds may be expended under
this section unless the Secretary includes in the Department
of Education's annual budget justification to Congress a
detailed description of the specific activities for which the
funds made available by this section have been used in the
prior and current years (if applicable), the activities and
costs planned for the budget year, and the projection of
activities and costs for each remaining year for which
administrative expenses under this section are made
available.''.
SEC. 2125. SIGNIFICANTLY SIMPLIFYING THE STUDENT AID
APPLICATION PROCESS.
(a) Expanding the Auto-Zero and Further Simplifying the
Simplified Needs Test.--
(1) Simplified needs test.--Section 479 (20 U.S.C. 1087ss)
is amended--
(A) in subsection (b)--
(i) in paragraph (1)--
(I) by striking clause (i) of subparagraph (A) and
inserting the following:
[[Page H10562]]
``(i) the student's parents file, or are eligible to file,
a form described in paragraph (3) or certify that they are
not required to file an income tax return, and the student
files, or is eligible to file, such a form or certifies that
the student is not required to file an income tax return, or
the student's parents, or the student, received benefits at
some time during the previous 12-month period under a means-
tested Federal benefit program as defined under subsection
(d); and''; and
(II) by striking clause (i) of subparagraph (B) and
inserting the following:
``(i) the student (and the student's spouse, if any) files,
or is eligible to file, a form described in paragraph (3) or
certifies that the student (and the student's spouse, if any)
is not required to file an income tax return, or the student
(and the student's spouse, if any) received benefits at some
time during the previous 12-month period under a means-tested
Federal benefit program as defined under subsection (d);
and''; and
(ii) 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 parent, files a form described in this subsection, or
subsection (c), as the case may be, if the student or parent,
as appropriate, files'';
(B) in subsection (c)--
(i) in paragraph (1), by striking subparagraph (A) and
inserting the following:
``(A) the student's parents file, or are eligible to file,
a form described in subsection (b)(3) or certify that they
are not required to file an income tax return, and the
student files, or is eligible to file, such a form or
certifies that the student is not required to file an income
tax return, or the student's parents, or the student,
received benefits at some time during the previous 12-month
period under a means-tested Federal benefit program as
defined in subsection (d); and''; and
(ii) in paragraph (2), by striking subparagraph (A) and
inserting the following:
``(A) the student (and the student's spouse, if any) files,
or is eligible to file, a form described in subsection (b)(3)
or certifies that the student (and the student's spouse, if
any) is not required to file an income tax return, or the
student (and the student's spouse, if any) received benefits
at some time during the previous 12-month period under a
means-tested Federal benefit program as defined in subsection
(d); and''; and
(C) by adding at the end the following new subsections:
``(d) Definition of Means-Tested Federal Benefit Program.--
For the purposes of this section, the term `means-tested
Federal benefit program' means a mandatory spending program
of the Federal Government, other than a program under this
title, 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 may include such programs as the
supplemental security income program under title XVI of the
Social Security Act, the food stamp program under the Food
Stamp Act of 1977, the free and reduced price school lunch
program established under the Richard B. Russell National
School Lunch Act, the temporary assistance to needy families
program established under part A of title IV of the Social
Security Act, and the women, infants and children program
established under Section 17 of the Child Nutrition Act of
1966, and other programs identified by the Secretary.
``(e) Reporting Requirements.--The Secretary 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 this section. In particular, the Secretary shall
evaluate whether using receipt of benefits under a means-
tested Federal benefit program (as defined in subsection (d))
for eligibility continues to target the Simplified Needs
Test, to the greatest extent possible, for use by low- and
moderate-income students and their families.''.
(b) Improvements to Paper and Electronic Forms.--
(1) Common financial aid form development and processing.--
Section 483(a) (20 U.S.C. 1090(a)) is amended--
(A) by striking paragraphs (1), (2), and (5);
(B) by redesignating paragraphs (3), (4), (6), and (7), as
paragraphs (9), (10), (11), and (12), respectively;
(C) by inserting before paragraph (9), as redesignated by
subparagraph (B), the following:
``(1) In general.--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 as the `Free Application for Federal
Student Aid' or the `FAFSA'.
``(2) Early estimates.--
``(A) In general.--The Secretary shall permit applicants to
complete such forms as described in this subsection in the 4
years prior to enrollment in order to obtain a non-binding
estimate of the family contribution, as defined in section
473. The estimate shall clearly and conspicuously indicate
that it is only an estimate of family contribution, and may
not reflect the actual family contribution of the applicant
that shall be used to determine the grant, loan, or work
assistance that the applicant may receive under this title
when enrolled in a program of postsecondary education. Such
applicants shall be permitted to update information submitted
on forms described in this subsection using the process
required under paragraph (5)(A).
``(B) Evaluation.--Two years after the early estimates are
implemented under this paragraph and from data gathered from
the early estimates, the Secretary shall evaluate the
differences between initial, non-binding early estimates and
the final financial aid award made available under this
title.
``(C) Report.--The Secretary shall provide a report to the
authorizing committees on the results of the evaluation.
``(3) Paper format.--
``(A) In general.--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 form under this
subparagraph 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
form under this subparagraph such data items as may be
necessary to award State financial assistance, as provided
under paragraph (6), except that the Secretary shall not
include a State's data if that State does not permit its
applicants for State assistance to use the form under this
subparagraph.
``(iv) Free availability and processing.--The provisions of
paragraph (7) shall apply to the form under this
subparagraph, and the data collected by means of the form
under this subparagraph shall be available to institutions of
higher education, guaranty agencies, and States in accordance
with paragraph (9).
``(v) Testing.--The Secretary shall conduct appropriate
field testing on the form under this subparagraph.
``(C) Promoting the use of electronic fafsa.--
``(i) In general.--The Secretary shall--
``(I) develop a form that uses skip logic to simplify the
application process for applicants; and
``(II) make all efforts to encourage applicants to utilize
the electronic forms described in paragraph (4).
``(ii) Maintenance of the fafsa in a printable electronic
file.--The Secretary shall maintain a version of the paper
forms described in subparagraphs (A) and (B) in a printable
electronic file that is easily portable. The printable
electronic file will be made easily accessible and
downloadable to students on the same website used to provide
students with the electronic application forms described in
paragraph (4) of this subsection. The Secretary shall enable
students to submit a form created under this subparagraph
that is downloaded and printed from an electronic file format
in order to meet the filing requirements of this section and
in order to receive aid from programs under this title.
``(iii) Reporting requirement.--The Secretary shall report
annually to Congress on the impact of the digital divide on
students completing applications for title IV aid described
under this paragraph and paragraph (4). The Secretary will
also report on the steps taken to eliminate the digital
divide and phase out the paper form described in subparagraph
(A) of this paragraph. The Secretary's report will
specifically address the impact of the digital divide on the
following student populations: dependent students,
independent students without dependents, and independent
students with dependents other than a spouse.
``(4) Electronic format.--
``(A) In general.--The Secretary shall produce, distribute,
and process common forms in electronic format to meet the
requirements of paragraph (1). The Secretary shall develop
common electronic forms for applicants who do not meet the
requirements of subparagraph (C) of this paragraph.
``(B) State data.--The Secretary shall include on the
common electronic forms space for information that needs to
be submitted from the applicant to be eligible for State
financial assistance, as provided under paragraph (6), except
the Secretary shall not require applicants to complete data
required by any State other than the applicant's State of
residence.
``(C) Simplified applications: fafsa on the web.--
``(i) In general.--The Secretary shall develop and use a
simplified electronic application form to be used by
applicants meeting the requirements under subsection (c) of
section 479 and an additional, separate simplified electronic
application form to be used by applicants meeting the
requirements under subsection (b) of section 479.
``(ii) Reduced data requirements.--The simplified
electronic application forms shall permit an applicant to
submit for financial
[[Page H10563]]
assistance purposes only the data elements required to make a
determination of whether the applicant meets the requirements
under subsection (b) or (c) of section 479.
``(iii) State data.--The Secretary shall include on the
simplified electronic application forms such data items as
may be necessary to award state financial assistance, as
provided under paragraph (6), except that the Secretary shall
not require applicants to complete data required by any State
other than the applicant's State of residence.
``(iv) Availability and processing.--The data collected by
means of the simplified electronic application forms shall be
available to institutions of higher education, guaranty
agencies, and States in accordance with paragraph (9).
``(v) Testing.--The Secretary shall conduct appropriate
field testing on the forms developed under this subparagraph.
``(D) Use of forms.--Nothing in this subsection shall be
construed to prohibit the use of the forms developed by the
Secretary pursuant to this paragraph by an eligible
institution, eligible lender, guaranty agency, State grant
agency, private computer software provider, a consortium
thereof, or such other entities as the Secretary may
designate.
``(E) 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 forms. Data collected by
such electronic version of the forms 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 forms
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, and an expected
family contribution has been calculated by the Secretary,
except as may be permitted under this title.
``(F) Signature.--Notwithstanding any other provision of
this Act, the Secretary may permit an electronic form under
this paragraph to be submitted with an electronic signature.
``(5) Streamlining.--
``(A) Streamlined reapplication process.--
``(i) 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--
``(I) in the academic year succeeding the year in which
such applicant first applied for financial assistance under
this title; or
``(II) in any succeeding academic years.
``(ii) Mechanisms for reapplication.--The Secretary shall
develop appropriate mechanisms to support reapplication.
``(iii) Identification of updated data.--The Secretary
shall determine, in cooperation with States, institutions of
higher education, agencies, and organizations involved in
student financial assistance, the data elements that can be
updated from the previous academic year's application.
``(iv) Reduced data authorized.--Nothing in this title
shall be construed as limiting the authority of the Secretary
to reduce the number of data elements required of
reapplicants.
``(v) 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.
``(B) Reduction of data elements.--
``(i) Reduction encouraged.--Of the number of data elements
on the FAFSA on the date of enactment of the Higher Education
Budget Reconciliation Act of 2005 (including questions on the
FAFSA for the purposes described in paragraph (6)), the
Secretary, in cooperation with representatives of agencies
and organizations involved in student financial assistance,
shall continue to reduce the number of such data elements
following the date of enactment. Reductions of data elements
under paragraph (3)(B), (4)(C), or (5)(A)(iv) shall not be
counted towards the reduction referred to in this paragraph
unless those data elements are reduced for all applicants.
``(ii) Report.--The Secretary shall annually report to the
House of Representatives and the Senate on the progress made
of reducing data elements.
``(6) 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 State need-based financial aid under section
415C, except as provided in paragraphs (3)(B)(iii) and
(4)(C)(iii) of this subsection. Such items shall be selected
in consultation with State agencies in order to assist in the
awarding of State financial assistance in accordance with the
terms of this subsection, except as provided in paragraphs
(3)(B)(iii) and (4)(C)(iii) 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 a State notifies the
Secretary that the State no longer requires those data items
for the distribution of State need-based financial aid.
``(B) Annual review.--The Secretary shall conduct an annual
review process to determine which forms and data items the
States require to award State need-based financial aid and
other application requirements that the States may impose.
``(C) State use of simplified forms.--The Secretary shall
encourage States to take such steps as necessary to encourage
the use of simplified application forms, including those
described in paragraphs (3)(B) and (4)(C), to meet the
requirements under subsection (b) or (c) of section 479.
``(D) Federal register notice.--The Secretary shall publish
on an annual basis a notice in the Federal Register requiring
State agencies to inform the Secretary--
``(i) if the State agency is unable to permit applicants to
utilize the simplified application forms described in
paragraphs (3)(B) and (4)(C); and
``(ii) of the State-specific data that the State agency
requires for delivery of State need-based financial aid.
``(E) State notification to the secretary.--
``(i) In general.--Each State agency shall notify the
Secretary--
``(I) whether the State permits an applicant to file a form
described in paragraph (3)(B) or paragraph (4)(C) of this
subsection for purposes of determining eligibility for State
need-based financial aid; and
``(II) the State-specific data that the State agency
requires for delivery of State need-based financial aid.
``(ii) Acceptance of forms.--In the event that a State does
not permit an applicant to file a form described in paragraph
(3)(B) or paragraph (4)(C) of this subsection for purposes of
determining eligibility for State need-based financial aid--
``(I) the State shall notify the Secretary if the State 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 simplified application forms under paragraphs (3)(B)
and paragraph (4)(C) of this subsection.
``(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 simplified
application forms under paragraphs (3)(B) and paragraph
(4)(C) of this subsection; and
``(II) not require any resident of that State to complete
any data previously required by that State under this
section.
``(7) Charges to students and parents for use of forms
prohibited.--
``(A) Fees prohibited.--The FAFSA, in whatever form
(including the EZ-FAFSA, paper, electronic, simplified, or
reapplication), shall be produced, distributed, and processed
by the Secretary and no parent or student shall be charged a
fee by any entity for the collection, processing, or delivery
of financial aid through the use of the FAFSA. The need and
eligibility of a student for financial assistance under parts
A through E of this title (other than under subpart 4 of part
A) may only be determined by using the FAFSA developed by the
Secretary pursuant to this subsection. No student may receive
assistance under parts A through E of this title (other than
under subpart 4 of part A), except by use of the FAFSA
developed by the Secretary pursuant to this subsection. No
data collected on a form, worksheet, or other document for
which a fee is charged shall be used to complete the FAFSA.
``(B) Notice.--Any entity that provides to students or
parents, or charges students or parents for, any value-added
services with respect to or in connection with the FAFSA,
such as completion of the FAFSA, submission of the FAFSA, or
tracking of the FAFSA for a student, shall provide to
students and parents clear and conspicuous notice that--
``(i) the FAFSA is a free Federal student aid application;
``(ii) the FAFSA can be completed without professional
assistance; and
``(iii) includes the current Internet address for the FAFSA
on the Department's web site.
``(8) Application processing cycle.--The Secretary shall
enable students to submit a form created under this
subsection in order to meet the filing requirements of this
section and in order to receive aid from programs under this
title and shall initiate the processing of applications under
this subsection as early as practicable prior to January 1 of
the student's planned year of enrollment.''.
(2) Master calendar.--Section 482(a)(1)(B) (20 U.S.C. 1089)
is amended to read as follows:
``(B) by March 1: proposed modifications, updates, and
notices pursuant to sections 478, 479(c)(2)(C), and 483(a)(6)
published in the Federal Register;''.
(c) Increasing Access to Technology.--Section 483 (20
U.S.C. 1090) is further amended by adding at the end the
following:
``(f) Addressing the Digital Divide.--The Secretary shall
utilize savings accrued by moving more applicants to the
electronic
[[Page H10564]]
forms described in subsection (a)(4) to improve access to the
electronic forms described in subsection (a)(4) for
applicants meeting the requirements of section 479(c).''.
(d) Expanding the Definition of an Independent Student.--
Section 480(d) (20 U.S.C.1087vv(d)) is amended by striking
paragraph (2) and inserting the following:
``(2) 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;''.
SEC. 2126. ADDITIONAL NEED ANALYSIS AMENDMENTS.
(a) Income Protection Allowance for Dependent Students.----
(1) Amendment.--Section 475(g)(2)(D) (20 U.S.C.
1087oo(g)(2)(D)) is amended by striking ``$2,200'' and
inserting ``$3,000''.
(2) Conforming amendment.--Section 478(b) (20 U.S.C.
1087rr(b)) is amended by adding at the end the following new
paragraph:
``(3) Revised amounts after increase.--Notwithstanding
paragraph (2), for each academic year after academic year
2006-2007, the Secretary shall publish in the Federal
Register a revised income protection allowance for the
purpose of section 475(g)(2)(D). Such revised allowance shall
be developed by increasing the dollar amount contained in
such section by a percentage equal to the estimated
percentage increase in the Consumer Price Index (as
determined by the Secretary) between December 2005 and the
December next preceding the beginning of such academic year,
and rounding the result to the nearest $10.''.
(3) Effective date.--The amendments made by this subsection
shall apply with respect to determinations of need for
periods of enrollment beginning on or after July 1, 2006.
(b) Employment Expense Allowance.--Section 478(h) (20
U.S.C. 1087rr(h)) is amended--
(1) by striking ``476(b)(4)(B),''; and
(2) by striking ``meals away from home, apparel and upkeep,
transportation, and housekeeping services'' and inserting
``food away from home, apparel, transportation, and household
furnishings and operations''.
(c) Discretion of Student Financial Aid Administrators.--
Section 479A(a) (20 U.S.C. 1087tt(a)) is amended--
(1) by striking ``(a) In general.--'' and inserting the
following:
``(a) Authority to Make Adjustments.--
``(1) Adjustments for special circumstances.--'';
(2) by inserting before ``Special circumstances may'' the
following:
``(2) Special circumstances defined.--'';
(3) by inserting ``a student's status as a ward of the
court at any time prior to attaining 18 years of age, a
student's status as an individual who was adopted at or after
age 13, a student's status as a homeless or unaccompanied
youth (as defined in section 725 of the McKinney-Vento
Homeless Assistance Act),'' after ``487,'';
(4) by inserting before ``Adequate documentation'' the
following:
``(3) Documentation and use of supplementary information.--
''; and
(5) by inserting before ``No student'' the following:
``(4) Fees for supplementary information prohibited.--''.
(d) Treating Active Duty Members of the Armed Forces as
Independent Students.--Section 480(d)(3) (20 U.S.C.
1087vv(d)(3)) is amended by inserting before the semicolon at
the end the following: ``or is currently serving on active
duty in the Armed Forces for other than training purposes''.
(e) Excludable Income.--Section 480(e) (20 U.S.C.
1087vv(e)) is amended--
(1) by striking ``and'' at the end of paragraph (3);
(2) by striking the period at the end of paragraph (4) and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(5) any part of any distribution from a qualified tuition
program established under section 529 of the Internal Revenue
Code of 1986 that is not includable in gross income under
such section 529.''.
(f) Treatment of Savings Plans.--
(1) Amendment.--Section 480(f) (20 U.S.C. 1087vv(f)) is
amended--
(A) in paragraph (1), by inserting ``qualified tuition
programs established under section 529 of the Internal
Revenue Code of 1986 (26 U.S.C. 529), except as provided in
paragraph (2),'' after ``tax shelters,'';
(B) by redesignating paragraph (2) as paragraph (3); and
(C) by inserting after paragraph (1) the following new
paragraph:
``(2) A qualified tuition program shall not be considered
an asset of a dependent student under section 475 of this
part. The value of a qualified tuition program for purposes
of determining the assets of parents or independent students
shall be--
``(A) the refund value of any tuition credits or
certificates purchased under section 529 of the Internal
Revenue Code of 1986 (26 U.S.C. 529) on behalf of a
beneficiary; or
``(B) the current balance of any account which is
established under such section for the purpose of meeting the
qualified higher education expenses of the designated
beneficiary of the account.''.
(2) Conforming amendment.--Section 480(j) (20 U.S.C.
1087vv(j)) is amended--
(A) by striking ``; Tuition Prepayment Plans'' in the
heading of such subsection;
(B) by striking paragraph (2);
(C) in paragraph (3), by inserting ``, or a distribution
that is not includable in gross income under section 529 of
such Code,'' after ``1986''; and
(D) by redesignating paragraph (3) as paragraph (2).
(g) Treatment of Family Ownership of Small Businesses.--
Section 480(f)(3) of the Higher Education Act of 1965 (20
U.S.C. 1087vv(f)(3)), as redesignated by subsection (f) of
this section, is amended--
(1) in subparagraph (A), by striking ``or'';
(2) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(C) a small business with not more than 100 full-time or
full-time equivalent employees (or any part of such a small
business) that is owned and controlled by the family.''.
(h) Designated Assistance.--Section 480(j) (20 U.S.C.
1087vv(j)) is amended by adding after paragraph (2) (as
redesignated by subsection (f)(2)(D) of this section) the
following new paragraph:
``(3) Notwithstanding paragraph (1) and section 472,
assistance not received under this title may be excluded from
both estimated financial assistance and cost of attendance,
if that assistance is provided by a State and is designated
by such State to offset a specific component of the cost of
attendance. If that assistance is excluded from either
estimated financial assistance or cost of attendance, it
shall be excluded from both.''.
SEC. 2127. DEFINITION OF ELIGIBLE PROGRAM.
Section 481(b) (20 U.S.C. 1088(b)) is amended by adding at
the end the following new paragraph:
``(3) For purposes of this title, an eligible program
includes an instructional program that utilizes direct
assessment of student learning, or recognizes the direct
assessment of student learning, in lieu of credit hours or
clock hours as the measure of student learning. In the case
of a program being determined eligible for the first time
under this paragraph, such determination shall be made by the
Secretary before such program is considered to be eligible.
The Secretary shall provide an annual report to Congress
identifying the programs made eligible under this
paragraph.''.
SEC. 2128. DISTANCE EDUCATION.
(a) Distance Education: Eligible Program.--Section 481(b)
(20 U.S.C. 1088(b)) is amended by adding after paragraph (3)
(as added by section 2127 of this Act) the following new
paragraph:
``(4) An otherwise eligible program that is offered in
whole or in part through telecommunications is eligible for
the purposes of this title if the program is offered by an
institution, other than a foreign institution, that has been
evaluated and determined (before or after the date of
enactment of this paragraph) to have the capability to
effectively deliver distance education programs by an
accrediting agency or association that--
``(A) is recognized by the Secretary under subpart 2 of
Part H; and
``(B) has evaluation of distance education programs within
the scope of its recognition, as described in section
496(n)(3).''.
(b) Correspondence Courses.--Section 484(l)(1) (20 U.S.C.
1091(l)(1)) is amended--
(1) in subparagraph (A)--
(A) by striking ``for a program of study of 1 year or
longer''; and
(B) by striking ``unless the total'' and all that follows
through ``courses at the institution''; and
(2) by amending subparagraph (B) to read as follows:
``(B) Exception.--Subparagraph (A) does not apply to an
institution or school described in section 3(3)(C) of the
Carl D. Perkins Vocational and Technical Education Act of
1998.''.
SEC. 2129. STUDENT ELIGIBILITY.
(a) Fraud: Repayment Required.--Section 484(a) (20 U.S.C.
1091(a)) is amended--
(1) by striking the period at the end of paragraph (5) and
inserting ``; and''; and
(2) by adding at the end the following new paragraph:
``(6) if the student has been convicted of, or has pled
nolo contendere or guilty to, a crime involving fraud in
obtaining funds under this title, have completed the
repayment of such funds to the Secretary, or to the holder in
the case of a loan under this title obtained by fraud.''.
(b) Technical Amendment.--Section 484(b)(5) (20 U.S.C.
1091(b)(5)) is amended by inserting ``or parent (on behalf of
a student)'' after ``student''.
(c) Loan Ineligibility Based on Involuntary Civil
Commitment for Sexual Offenses.--Section 484(b)(5) (20 U.S.C.
1091(b)(5)) is further amended by inserting before the period
the following: ``, and no student who is subject to an
involuntary civil commitment upon completion of a period of
incarceration for a sexual offense (as determined under
regulations of the Secretary) is eligible to receive a loan
under this title''.
(d) Freely Associated States.--Section 484(j) (20 U.S.C.
1091(j)) is amended by inserting ``and shall be eligible only
for assistance under subpart 1 of part A thereafter,'' after
``part C,''.
(e) Verification of Income Date.--Paragraph (1) of section
484(q) (20 U.S.C. 1091(q)) is amended to read as follows:
``(1) Confirmation with irs.--The Secretary of Education,
in cooperation with the Secretary of the Treasury, is
authorized to confirm with the Internal Revenue Service the
information specified in section
[[Page H10565]]
6103(l)(13) of the Internal Revenue Code of 1986 reported by
applicants (including parents) under this title on their
Federal income tax returns for the purpose of verifying the
information reported by applicants on student financial aid
applications.''.
(f) Suspension of Eligibility for Drug Offenses.--Section
484(r)(1) (20 U.S.C. 1091(r)(1)) is amended by striking
everything preceding the table and inserting the following:
``(1) In general.--A student who is convicted of any
offense under any Federal or State law involving the
possession or sale of a controlled substance for conduct that
occurred during a period of enrollment for which the student
was receiving any grant, loan, or work assistance under this
title shall not be eligible to receive any grant, loan, or
work assistance under this title from the date of that
conviction for the period of time specified in the following
table:''.
SEC. 2130. INSTITUTIONAL REFUNDS.
Section 484B (20 U.S.C. 1091b) is amended--
(1) in subsection (a)(1), by inserting ``subpart 4 of part
A or'' after ``received under'';
(2) in subsection (a)(2), by striking ``takes a leave'' and
by inserting ``takes one or more leaves'';
(3) in subsection (a)(3)(B)(ii), by inserting ``(as
determined in accordance with subsection (d))'' after
``student has completed'';
(4) in subsection (a)(4), by amending subparagraph (A) to
read as follows:
``(A) In general.--After determining the eligibility of the
student for a late disbursement or post-withdrawal
disbursement (as required in regulations prescribed by the
Secretary), the institution of higher education shall contact
the borrower and obtain confirmation that the loan funds are
still required by the borrower. In making such contact, the
institution shall explain to the borrower the borrower's
obligation to repay the funds following any such
disbursement. The institution shall document in the
borrower's file the result of such contact and the final
determination made concerning such disbursement.'';
(5) in subsection (b)(1), by inserting ``no later than 45
days from the determination of withdrawal'' after ``return'';
(6) in subsection (b)(2), by amending subparagraph (C) to
read as follows:
``(C) Grant overpayment requirements.--
``(i) In general.--Notwithstanding subparagraphs (A) and
(B), a student shall only be required to return grant
assistance in the amount (if any) by which--
``(I) the amount to be returned by the student (as
determined under subparagraphs (A) and (B)), exceeds
``(II) 50 percent of the total grant assistance received by
the student under this title for the payment period or period
of enrollment.
``(ii) Minimum.--A student shall not be required to return
amounts of $50 or less.''; and
(7) in subsection (d), by striking ``(a)(3)(B)(i)'' and
inserting ``(a)(3)(B)''.
SEC. 2131. COLLEGE ACCESS INITIATIVE.
Part G is further amended by inserting after section 485C
(20 U.S.C. 1092c) the following new section:
``SEC. 485D. COLLEGE ACCESS INITIATIVE.
``(a) State-by-State Information.--The Secretary shall
direct each guaranty agency with which the Secretary has an
agreement under section 428(c) to provide to the Secretary
the information necessary for the development of web links
and access for students and families to a comprehensive
listing of the postsecondary education opportunities,
programs, publications, Internet Web sites, and other
services available in the States for which such agency serves
as the designated guarantor.
``(b) Guaranty Agency Activities.--
``(1) Plan and activity required.--Each guaranty agency
with which the Secretary has an agreement under section
428(c) shall develop a plan and undertake the activity
necessary to gather the information required under subsection
(a) and to make such information available to the public and
to the Secretary in a form and manner as prescribed by the
Secretary.
``(2) Activities.--Each guaranty agency shall undertake
such activities as are necessary to promote access to
postsecondary education for students through providing
information on college planning, career preparation, and
paying for college. The guaranty agency shall publicize such
information and coordinate such activities with other
entities that either provide or distribute such information
in the States for which such guaranty agency serves as the
designated guarantor.
``(3) Funding.--The activities required by this section may
be funded from the guaranty agency's operating account
established pursuant to section 422B and, to the extent funds
remain, from earnings on the restricted account established
pursuant to section 422(h)(4).
``(c) Access to Information.--
``(1) Secretary's responsibility.--The Secretary shall
ensure the availability of the information provided by the
guaranty agencies in accordance with this section to
students, parents, and other interested individuals, through
web links or other methods prescribed by the Secretary.
``(2) Guaranty agency responsibility.--The guaranty
agencies shall ensure that the information required by this
section is available without charge in printed format for
students and parents requesting such information.
``(3) Publicity.--Within 270 days after the date of
enactment of the Higher Education Budget Reconciliation Act
of 2005, the Secretary and guaranty agencies shall publicize
the availability of the information required by this section,
with special emphasis on ensuring that populations that are
traditionally underrepresented in postsecondary education are
made aware of the availability of such information.''.
SEC. 2132. CANCELLATION OF STUDENT LOAN INDEBTEDNESS FOR
SURVIVORS OF VICTIMS OF THE SEPTEMBER 11, 2001,
ATTACKS.
(a) Definitions.--For purposes of this section:
(1) Eligible public servant.--The term ``eligible public
servant'' means an individual who, as determined in
accordance with regulations of the Secretary--
(A) served as a police officer, firefighter, other safety
or rescue personnel, or as a member of the Armed Forces; and
(B) died (or dies) or became (or becomes) permanently and
totally disabled due to injuries suffered in the terrorist
attacks on September 11, 2001.
(2) Eligible victim.--The term ``eligible victim'' means an
individual who, as determined in accordance with regulations
of the Secretary, died (or dies) or became (or becomes)
permanently and totally disabled due to injuries suffered in
the terrorist attacks on September 11, 2001.
(3) Eligible parent.--The term ``eligible parent'' means
the parent of an eligible victim if--
(A) the parent owes a Federal student loan that is a
consolidation loan that was used to repay a PLUS loan
incurred on behalf of such eligible victim; or
(B) the parent owes a Federal student loan that is a PLUS
loan incurred on behalf of an eligible victim.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Education.
(5) Federal student loan.--The term ``Federal student
loan'' means any loan made, insured, or guaranteed under part
B, D, or E of title IV of the Higher Education Act of 1965.
(b) Relief From Indebtedness.--
(1) In general.--The Secretary shall provide for the
discharge or cancellation of--
(A) the Federal student loan indebtedness of the spouse of
an eligible public servant, as determined in accordance with
regulations of the Secretary, including any consolidation
loan that was used jointly by the eligible public servant and
his or her spouse to repay the Federal student loans of the
spouse and the eligible public servant;
(B) the portion incurred on behalf of the eligible victim
(other than an eligible public servant), of a Federal student
loan that is a consolidation loan that was used jointly by
the eligible victim and his or her spouse, as determined in
accordance with regulations of the Secretary, to repay the
Federal student loans of the eligible victim and his or her
spouse;
(C) the portion of the consolidation loan indebtedness of
an eligible parent that was incurred on behalf of an eligible
victim; and
(D) the PLUS loan indebtedness of an eligible parent that
was incurred on behalf of an eligible victim.
(2) Method of discharge or cancellation.--A loan required
to be discharged or canceled under paragraph (1) shall be
discharged or canceled by the method used under section
437(a), 455(a)(1), or 464(c)(1)(F) of the Higher Education
Act of 1965 (20 U.S.C. 1087(a), 1087e(a)(1),
1087dd(c)(1)(F)), whichever is applicable to such loan.
(c) Facilitation of Claims.--The Secretary shall--
(1) establish procedures for the filing of applications for
discharge or cancellation under this section by regulations
that shall be prescribed and published within 90 days after
the date of enactment of this Act and without regard to the
requirements of section 553 of title 5, United States Code;
and
(2) take such actions as may be necessary to publicize the
availability of discharge or cancellation of Federal student
loan indebtedness under this section.
(d) Availability of Funds for Payments.--Funds available
for the purposes of making payments to lenders in accordance
with section 437(a) for the discharge of indebtedness of
deceased or disabled individuals shall be available for
making payments under section 437(a) to lenders of loans as
required by this section.
(e) Applicable to Outstanding Debt.--The provisions of this
section shall be applied to discharge or cancel only Federal
student loans (including consolidation loans) on which
amounts were owed on September 11, 2001. Nothing in this
section shall be construed to authorize any refunding of any
repayment of a loan.
SEC. 2133. INDEPENDENT EVALUATION OF DISTANCE EDUCATION
PROGRAMS.
(a) Independent Evaluation.--The Secretary of Education
shall enter into an agreement with the National Academy of
Sciences to conduct a scientifically correct and
statistically valid evaluation of the quality of distance
education programs, as compared to campus-based education
programs, at institutions of higher education. Such
evaluation shall include--
(1) identification of the elements by which the quality of
distance education, as compared to campus-based education,
can be assessed, including elements such as subject matter,
interactivity, and student outcomes;
(2) identification of distance and campus-based education
program success, with respect to student achievement, in
relation to
[[Page H10566]]
the mission of the institution of higher education; and
(3) identification of the types of students (including
classification of types of students based on student age) who
most benefit from distance education programs, the types of
students who most benefit from campus-based education
programs, and the types of students who do not benefit from
distance education programs, by assessing elements including
access to higher education, job placement rates,
undergraduate graduation rates, and graduate and professional
degree attainment rates.
(b) Scope.--The National Academy of Sciences shall select
for participation in the evaluation under subsection (a) a
diverse group of institutions of higher education with
respect to size, mission, and geographic distribution.
(c) Interim and Final Reports.--The agreement under
subsection (a) shall require that the National Academy of
Sciences submit to the Secretary of Education, the Committee
on Health, Education, Labor and Pensions of the Senate, and
the Committee on Education and the Workforce of the House of
Representatives--
(1) an interim report regarding the evaluation under
subsection (a) not later than December 31, 2007; and
(2) a final report regarding such evaluation not later than
December 31, 2009.
SEC. 2134. DISBURSEMENT OF STUDENT LOANS.
Section 422(d) of the Higher Education Amendments of 1998
(Public Law 105-244; 112 Stat. 1696) is amended by adding at
the end the following new sentence: ``Such amendments shall
also be effective on and after July 1, 2006.''.
PART 2--HIGHER EDUCATION RELIEF
SEC. 2141. REFERENCES.
References in this part to ``the Act'' are references to
the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
SEC. 2142. WAIVERS AND MODIFICATIONS.
Notwithstanding any other provision of law, unless enacted
with specific reference to this section, the Secretary of
Education is authorized to waive or modify any statutory or
regulatory provision applicable to the student financial
assistance programs under title IV of the Act, or any student
or institutional eligibility provisions in the Act, as the
Secretary of Education deems necessary in connection with a
Gulf hurricane disaster to ensure that--
(1) the calculation of expected family contribution under
section 474 of the Act used in the determination of need for
student financial assistance under title IV of the Act for
any affected student (and the determination of such need for
his or her family, if applicable), is modified to reflect any
changes in the financial condition of such affected student
and his or her family resulting from a Gulf hurricane
disaster; and
(2) institutions of higher education, systems of
institutions, or consortia of institutions that are located
in an area affected by a Gulf hurricane disaster, or that are
serving affected students, are eligible, notwithstanding
section 486(d) of the Act, to apply for participation in the
distance education demonstration program under section 486 of
the Act, except that the Secretary of Education shall include
in reports under section 486(f) of the Act an identification
of those institutions, systems, and consortia that were
granted participation in the demonstration program due to a
Gulf hurricane disaster.
SEC. 2143. CANCELLATION OF INSTITUTIONAL REPAYMENT BY
COLLEGES AND UNIVERSITIES AFFECTED BY A GULF
HURRICANE DISASTER.
Notwithstanding any provision of title IV of the Act or any
regulation issued thereunder, the Secretary of Education
shall cancel any obligation of an affected institution to
return or repay any funds the institution received before the
date of enactment of this Act for, or on behalf of, its
students under subpart 1 or 3 of part A or parts B, C, D, or
E of title IV of the Act for any cancelled enrollment period.
SEC. 2144. CANCELLATION OF STUDENT LOANS FOR CANCELLED
ENROLLMENT PERIODS.
(a) Loan Forgiveness Authorized.--Notwithstanding any
provision of title IV of the Act, the Secretary shall
discharge all loan amounts under parts B and D of title IV of
the Act, and cancel any loan made under part E of such title,
disbursed to, or on behalf of, an affected student for a
cancelled enrollment period.
(b) Reimbursement.--The Secretary of Education shall--
(1) reimburse each affected institution for any amounts
discharged under subsection (a) with respect to a loan under
part E of title IV of the Act in the same manner as is
required by section 465(b) of the Act with respect to a loan
cancelled under section 465(a) of the Act; and
(2) reimburse lenders for the purpose of discharging any
loan amounts disbursed to, or on behalf of, an affected
student under part B of title IV of the Act for a cancelled
enrollment period.
(c) Limitation on Consolidation Loans.--A loan amount for a
loan made under section 428C of the Act or a Federal Direct
Consolidation Loan may be eligible for discharge under this
section only to the extent that such loan amount was used to
repay a loan to an affected student for a cancelled
enrollment period.
(d) Construction.--Nothing in this section shall be
construed to authorize any refunding of any repayment of a
loan.
SEC. 2145. TEMPORARY DEFERMENT OF STUDENT LOAN REPAYMENT.
An affected individual who is a borrower of a qualified
student loan or a qualified parent loan shall be granted a
deferment, not in excess of 6 months, during which periodic
installments of principal need not be paid, and interest--
(1) shall accrue and be paid by the Secretary, in the case
of a loan made under section 428, 428B, 428C, or 428H of the
Act;
(2) shall accrue and be paid by the Secretary to the
Perkins loan fund held by the institution of higher education
that made the loan, in the case of a loan made under part E
of title IV of the Act; and
(3) shall not accrue, in the case of a Federal Direct Loan
made under part D of such title.
SEC. 2146. NO AFFECT ON GRANT AND LOAN LIMITS.
Notwithstanding any provision of title IV of the Act or any
regulation issued thereunder, no grant or loan funds received
by an affected student under title IV of the Act for a
cancelled enrollment period shall be counted against such
affected student's annual or aggregate grant or loan limits
for the receipt of grants or loans under that title.
SEC. 2147. TEACHER LOAN RELIEF.
The Secretary of Education may waive the requirement of
sections 428J(b)(1) and 460(b)(1)(A) of the Higher Education
Act of 1965 that the 5 years of qualifying service be
consecutive academic years for any teacher whose employment
was interrupted if--
(1) the teacher was employed in qualifying service, at the
time of a Gulf hurricane disaster, in a school located in an
area affected by a Gulf hurricane disaster; and
(2) the teacher resumes qualifying service not later than
the beginning of academic year 2006-2007 in that school or
any other school in which employment is qualifying service
under such section.
SEC. 2148. EXPANDING INFORMATION DISSEMINATION REGARDING
ELIGIBILITY FOR PELL GRANTS.
(a) In General.--The Secretary of Education shall make
special efforts, in conjunction with State efforts, to notify
affected students and if applicable, their parents, who
qualify for means-tested Federal benefit programs, of their
potential eligibility for a maximum Pell Grant, and shall
disseminate such informational materials as the Secretary of
Education deems appropriate.
(b) Means-Tested Federal Benefit Program.--For the purpose
of this section, the term ``means-tested Federal benefit
program'' means a mandatory spending program of the Federal
Government, other than a program under the Act, 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 may include such programs as the supplemental security
income program under title XVI of the Social Security Act,
the food stamp program under the Food Stamp Act of 1977, the
free and reduced price school lunch program established under
the Richard B. Russell National School Lunch Act, the
temporary assistance to needy families program established
under part A of title IV of the Social Security Act, and the
women, infants, and children program established under
section 17 of the Child Nutrition Act of 1966, and other
programs identified by the Secretary of Education.
SEC. 2149. PROCEDURES.
(a) Deadlines and Procedures.--Sections 482(c) and 492 of
the Act (20 U.S.C. 1089(c), 1098a) shall not apply to any
waivers, modifications, or actions initiated by the Secretary
of Education under this part.
(b) Case-by-Case Basis.--The Secretary of Education is not
required to exercise any waiver or modification authority
under this part on a case-by-case basis.
SEC. 2150. TERMINATION OF AUTHORITY.
The authority of the Secretary of Education to issue
waivers or modifications under this part shall expire at the
conclusion of the 2005-2006 academic year, but the expiration
of such authority shall not affect the continuing validity of
any such waivers or modifications after such academic year.
SEC. 2151. DEFINITIONS.
For the purposes of this part, the following terms have the
following meanings:
(1) Affected individual.--The term ``affected individual''
means an individual who has applied for or received student
financial assistance under title IV of the Higher Education
Act of 1965, and--
(A) who is an affected student; or
(B) whose primary place of employment or residency was, as
of August 29, 2005, in an area affected by a Gulf hurricane
disaster.
(2) Affected institution.--The term ``affected
institution'' means an institution of higher education that--
(A) is located in an area affected by a Gulf hurricane
disaster; and
(B) has temporarily ceased operations as a consequence of a
Gulf hurricane disaster, as determined by the Secretary of
Education.
(3) Affected state.--The term ``affected State'' means the
State of Alabama, Florida, Louisiana, Mississippi, or Texas.
(4) Affected student.--The term ``affected student'' means
an individual who has applied for or received student
financial assistance under title IV of the Higher Education
Act of 1965, and who--
(A) was enrolled or accepted for enrollment, as of August
29, 2005, at an institution of higher education in an area
affected by a Gulf hurricane disaster;
[[Page H10567]]
(B) was a dependent student enrolled or accepted for
enrollment at an institution of higher education that is not
in an area affected by a Gulf hurricane disaster, but whose
parents resided or were employed, as of August 29, 2005, in
an area affected by a Gulf hurricane disaster; or
(C) was enrolled or accepted for enrollment at an
institution of higher education, as of August 29, 2005, and
whose attendance was interrupted because of a Gulf hurricane
disaster.
(5) Area affected by a gulf hurricane disaster.--The term
``area affected by a Gulf hurricane disaster'' means a county
or parish, in an affected State, that has been designated by
the Federal Emergency Management Agency for disaster
assistance for individuals and households as a result of
Hurricane Katrina or Hurricane Rita.
(6) Cancelled enrollment period.--The term ``cancelled
enrollment period'' means any period of enrollment at an
affected institution during the academic year 2005.
(7) Gulf hurricane disaster.--The term ``Gulf hurricane
disaster'' means a major disaster that the President declared
to exist, in accordance with section 401 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act, and
that was caused by Hurricane Katrina or Hurricane Rita.
(8) Institution of higher education.--The term
``institution of higher education'' has the meaning given
such term in section 102 of the Higher Education Act of 1965,
except that the term does not include institutions under
subsection (a)(1)(C) of that section.
(9) Qualified student loan.--The term ``qualified student
loan'' means any loan made, insured, or guaranteed under part
B, D, or E of title IV of the Higher Education Act of 1965,
other than a loan under section 428B of such title or a
Federal Direct Plus loan.
(10) Qualified parent loan.--The term ``qualified parent
loan'' means a loan made under section 428B of title IV of
the Higher Education Act of 1965 or a Federal Direct Plus
loan.
Subtitle C--Pensions
SEC. 2201. INCREASES IN PBGC PREMIUMS.
(a) Flat-Rate Premiums.--Clause (i) of section
4006(a)(3)(A) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1306(a)(3)(A)) is amended by striking
``$19'' and inserting ``$30''.
(b) Adjustment for Inflation.--Paragraph (3) of section
4006(a) of such Act (29 U.S.C. 1306(a)) is amended by adding
at the end the following new subparagraph:
``(F) For each plan year beginning after 2006, there shall
be substituted for the $30 dollar amount in subparagraph
(A)(i) the amount equal to the product derived by multiplying
the premium rate, as in effect under this paragraph
immediately prior to such plan year for basic benefits
guaranteed by the corporation under section 4022 for single-
employer plans, by the ratio of--
``(i) the national average wage index (as defined in
section 209(k)(1) of the Social Security Act) for the first
of the 2 calendar years preceding the calendar year in which
such plan year begins, to
``(ii) the national average wage index (as so defined) for
the first of the 3 calendar years preceding the calendar year
in which the plan year begins,
with such product, if not a multiple of $1, being rounded to
the next higher multiple of $1 where such product is a
multiple of $0.50 but not of $1, and to the nearest multiple
of $1 in any other case.''.
(c) Additional Discretionary Increase.--Paragraph (3) of
section 4006(a) of such Act (as amended by subsection (b) of
this section) is further amended by adding at the end the
following new subparagraph:
``(G)(i) The corporation may increase under this
subparagraph, effective for plan years commencing with or
during any calendar year after 2006, the premium rate
otherwise in effect under this section for basic benefits
guaranteed by it under section 4022 for single-employer plans
if the corporation determines that such increase is necessary
to achieve actuarial soundness in the plan termination
insurance program under this title.
``(ii) The amount of any premium rate described in clause
(i), as increased under this subparagraph for plan years
commencing with or during any calendar year, may not exceed
by more than 20 percent the amount of the premium rate, in
effect under this paragraph for plan years commencing with or
during such calendar year for basic benefits guaranteed by
the corporation under section 4022 for single-employer plans,
as determined for plan years commencing with or during such
calendar year without regard to this subparagraph.
``(iii) The preceding provisions of this subparagraph shall
apply in connection with plan years commencing with or during
any calendar year only if--
``(I) the corporation transmits to each House of the
Congress and to the Comptroller General its proposal for the
increase in the premium rate for plan years commencing with
or during such calendar year, subject to Congressional review
under chapter 8 of title 5 of the United States Code
(relating to Congressional review of agency rulemaking) not
later than 120 calendar days after the beginning of the
preceding calendar year, and
``(II) a joint resolution disapproving such increase has
not been enacted as provided in section 802 of such title,
within the 60-day period described in section 802(a) of such
title.
The proposal transmitted by the corporation shall include a
description of the methodologies and assumptions used in
formulating its proposal. At the time of the transmittal of
any such proposal to each House of the Congress pursuant to
subclause (I), the corporation shall transmit a copy of such
proposal to the Committee on Education and the Workforce and
the Committee on Ways and Means of the House of
Representatives and the Committee on Health, Education,
Labor, and Pensions and the Committee on Finance of the
Senate. Any such proposal shall, for purposes of chapter 8 of
such title 5, be treated as a rule which is a major rule.''.
(d) Premium Rate for Certain Terminated Single-Employer
Plans.--Subsection (a) of section 4006 of such Act (29 U.S.C.
1306) is amended by adding at the end the following:
``(7) Premium Rate for Certain Terminated Single-Employer
Plans.--
``(A) In general.--If there is a termination of a single-
employer plan under clause (ii) or (iii) of section
4041(c)(2)(B) or section 4042, there shall be payable to the
corporation, with respect to each applicable 12-month period,
a premium at a rate equal to $1,250 multiplied by the number
of individuals who were participants in the plan immediately
before the termination date. Such premium shall be in
addition to any other premium under this section.
``(B) Special rule for plans terminated in bankruptcy
reorganization.--If the plan is terminated under
4041(c)(2)(B)(ii) or under section 4042 and, as of the
termination date, a person who is (as of such date) a
contributing sponsor of the plan or a member of such
sponsor's controlled group has filed or has had filed against
such person a petition seeking reorganization in a case under
title 11 of the United States Code, or under any similar law
of a State or a political subdivision of a State (or a case
described in section 4041(c)(2)(B)(i) filed by or against
such person has been converted, as of such date, to such a
case in which reorganization is sought), subparagraph (A)
shall not apply to such plan until the date of the discharge
of such person in such case.
``(C) Applicable 12-month period.--For purposes of
subparagraph (A)--
``(i) In general.--The term `applicable 12-month period'
means--
``(I) the 12-month period beginning with the first month
following the month in which the termination date occurs, and
``(II) each of the first two 12-month periods immediately
following the period described in subclause (I).
``(ii) Plans terminated in bankruptcy reorganization.--In
any case in which the requirements of subparagraph (B) are
met in connection with the termination of the plan with
respect to 1 or more persons described in such subparagraph,
the 12-month period described in clause (i)(I) shall be the
12-month period beginning with the first month following the
month which includes the earliest date as of which each such
person is discharged in the case described in such clause in
connection with such person.
``(D) Coordination with section 4007.--
``(i) Notwithstanding section 4007--
``(I) premiums under this paragraph shall be due within 30
days after the beginning of any applicable 12-month period,
and
``(II) the designated payor shall be the person who is the
contributing sponsor as of immediately before the termination
date.
``(ii) The fifth sentence of section 4007(a) shall not
apply in connection with premiums determined under this
paragraph.''.
(e) Conforming Amendments.--
(1) Section 4006(a)(2) of such Act (29 U.S.C. 1306(a)(2))
is amended, in the matter following subparagraph (E), by
inserting ``paragraph (3)(G) of this subsection or'' after
``Except as provided in''.
(2) Section 4006(b)(1) of such Act (29 U.S.C. 1306(b)(1))
is amended by inserting ``or a proposal for a premium rate
increase under subsection (a)(3)(G)'' after ``or (E)''.
(f) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to plan years beginning after December 31, 2005.
(2) Premium rate for certain terminated single-employer
plans.--
(A) In general.--Except as provided in subparagraph (B),
the amendment made by subsection (d) shall apply with respect
to terminations for which the termination date occurs on or
after the date of the enactment of this Act.
(B) Treatment of cases in bankruptcy.--In any case in which
the requirements of subparagraph (B) of section 4007(a)(7) of
the Employee Retirement Income Security Act of 1974 (as added
by subsection (d)) are met in connection with the termination
of the plan with respect to 1 or more persons described in
such subparagraph, the amendment made by subsection (d) shall
apply with respect to any such termination described in such
subparagraph (B), notwithstanding subparagraph (A) of this
paragraph, if the case under title 11, United States Code, or
under any similar law of a State or political subdivision of
a State (referred to in such subparagraph (B)) commenced
after October 26, 2005.
(3) Special rule if subsequent savings enacted.--The
amendments made by this section shall not take effect if,
after the date of enactment of this Act and before January 1,
2006, a Federal law is enacted which--
(A) provides for decreases in Federal outlays which in the
aggregate are less than the decreases in Federal outlays by
reason of the amendments made by this section; and
[[Page H10568]]
(B) specifically provides that such decreases are to be in
lieu of the decreases in Federal outlays by reason of the
amendments made by this section.
TITLE III--COMMITTEE ON ENERGY AND COMMERCE
Subtitle A--Medicaid
Sec. 3100. Short title of subtitle; rule of construction with regard to
Katrina evacuees.
Chapter 1--Payment for Prescription Drugs
Sec. 3101. Federal upper limit (FUL).
Sec. 3102. Collection and submission of utilization data for certain
physician administered drugs.
Sec. 3103. Improved regulation of drugs sold under a new drug
application approved under section 505(c) of the Federal
Food, Drug, and Cosmetic Act.
Sec. 3104. Children's hospital participation in section 340B drug
discount program.
Sec. 3105. Improving patient outcomes through greater reliance on
science and best practices.
Chapter 2--Reform of Asset Transfer Rules
Sec. 3111. Lengthening look-back period; change in beginning date for
period of ineligibility.
Sec. 3112. Disclosure and treatment of annuities and of large
transactions.
Sec. 3113. Application of ``income-first'' rule in applying community
spouse's income before assets in providing support of
community spouse.
Sec. 3114. Disqualification for long-term care assistance for
individuals with substantial home equity.
Sec. 3115. Enforceability of continuing care retirement communities
(CCRC) and life care community admission contracts.
Chapter 3--Flexibility in Cost Sharing and Benefits
Sec. 3121. State option for alternative medicaid premiums and cost
sharing.
Sec. 3122. Special rules for cost sharing for prescription drugs.
Sec. 3123. Emergency room copayments for non-emergency care.
Sec. 3124. Use of benchmark benefit packages.
Sec. 3125. State option to establish non-emergency medical
transportation program.
Sec. 3126. Exempting women covered under breast or cervical cancer
program.
Chapter 4--Expanded Access to Certain Benefits
Sec. 3131. Expanded access to home and community-based services for the
elderly and disabled.
Sec. 3132. Optional choice of self-directed personal assistance
services (cash and counseling).
Sec. 3133. Expansion of State long-term care partnership program.
Sec. 3134. Health opportunity accounts.
Chapter 5--Other Provisions
Sec. 3141. Increase in medicaid payments to insular areas.
Sec. 3142. Managed care organization provider tax reform.
Sec. 3143. Medicaid transformation grants.
Sec. 3144. Enhancing third party identification and payment.
Sec. 3145. Improved enforcement of documentation requirements.
Sec. 3146. Reforms of targeted case management.
Sec. 3147. Emergency services furnished by non-contract providers for
medicaid managed care enrollees.
Sec. 3148. Adjustment in computation of medicaid FMAP to disregard an
extraordinary employer pension contribution.
Subtitle B--Katrina Health Care Relief
Sec. 3201. Targeted medicaid relief for States affected by Hurricane
Katrina.
Sec. 3202. State high risk health insurance pool funding.
Sec. 3203. Recomputation of HPSA, MUA, and MUP designations within
Hurricane Katrina affected areas.
Sec. 3204. Waiver of certain requirements applicable to the provision
of health care in areas impacted by Hurricane Katrina.
Sec. 3205. FMAP hold harmless for Katrina impact.
Subtitle C--Katrina and Rita Energy Relief
Sec. 3301. Hurricanes Katrina and Rita energy relief.
Subtitle D--Digital Television Transition
Sec. 3401. Short title.
Sec. 3402. Findings.
Sec. 3403. Analog spectrum recovery: hard deadline.
Sec. 3404. Auction of recovered spectrum.
Sec. 3405. Digital Television Conversion Fund.
Sec. 3406. Public Safety Interoperable Communications Fund.
Sec. 3407. NYC 9/11 Digital Transition Fund.
Sec. 3408. Low-power television transition provisions.
Sec. 3409. Consumer education regarding analog televisions.
Sec. 3410. Additional provisions.
Sec. 3411. Deployment of broadband wireless technologies.
Sec. 3412. Sense of Congress.
Sec. 3413. Band plan revision required.
Subtitle A--Medicaid
SEC. 3100. SHORT TITLE OF SUBTITLE; RULE OF CONSTRUCTION WITH
REGARD TO KATRINA EVACUEES.
(a) Short Title.--This subtitle may be cited as the
``Medicaid Reconciliation Act of 2005''.
(b) Rule of Construction With Regard to Katrina Evacuees.--
None of the provisions of the following chapters of this
subtitle shall apply during the 11-month period beginning
September 1, 2005, to individuals entitled to medical
assistance under title XIX of the Social Security Act by
reason of their residence in a parish in the State of
Louisiana, or a county in the State of Mississippi or
Alabama, for which a major disaster has been declared in
accordance with section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170)
as a result of Hurricane Katrina and which the President has
determined, before September 14, 2005, warrants individual
and public assistance from the Federal Government under such
Act.
CHAPTER 1--PAYMENT FOR PRESCRIPTION DRUGS
SEC. 3101. FEDERAL UPPER LIMIT (FUL).
(a) In General.--Subsection (e) of section 1927 of the
Social Security Act (42 U.S.C. 1396r-8) is amended to read as
follows:
``(e) Pharmacy Reimbursement Limits.--
``(1) Federal upper limit for ingredient cost of covered
outpatient drugs.--
``(A) In general.--Subject to subparagraph (B), no Federal
financial participation shall be available for payment for
the ingredient cost of a covered outpatient drug in excess of
the Federal upper limit for that drug established under
paragraph (2).
``(B) Optional carve out.--A State may elect not to apply
subparagraph (A) to payment for either or both of the
following:
``(i) Drugs dispensed by specialty pharmacies (such as
those dispensing only immunosuppressive drugs), as defined by
the Secretary.
``(ii) Drugs administered by a physician in a physician's
office.
``(2) Federal upper limit.--
``(A) In general.--Except as provided in subparagraph (D)
and subject to paragraph (5), the Federal upper limit
established under this paragraph for the ingredient cost of
a--
``(i) single source drug, is 106 percent of the RAMP (as
defined in subparagraph (B)(i)) for that drug; and
``(ii) multiple source drug, is 120 percent of the volume
weighted average RAMP (as determined under subparagraph (C))
for that drug.
A drug product that is a single source drug and that becomes
a multiple source drug shall continue to be treated under
this subsection as a single source drug until the Secretary
determines that there are sufficient data to compile the
volume weighted average RAMP for that drug.
``(B) RAMP and related provisions.--For purposes of this
subsection:
``(i) RAMP defined.--The term `RAMP' means, with respect to
a covered outpatient drug by a manufacturer for a calendar
quarter and subject to clauses (ii) and (iii), the average
price paid to a manufacturer for the drug in the United
States in the quarter by wholesalers for drugs distributed to
retail pharmacies, excluding service fees that are paid by
the manufacturer to an entity and that represent fair market
value for a bona-fide service provided by the entity.
``(ii) Sales exempted from computation.--The RAMP under
clause (i) shall exclude any of the following:
``(I) Sales exempt from inclusion in the determination of
best price under subsection (c)(1)(C)(i).
``(II) Such other sales as the Secretary identifies as
sales to an entity that are merely nominal in amount under
subsection (c)(1)(C)(ii)(III).
``(iii) Sale price net of discounts.--In calculating the
RAMP under clause (i), such RAMP shall include any of the
following:
``(I) Cash discounts and volume discounts.
``(II) Free goods that are contingent upon any purchase
requirement.
``(III) Sales at a nominal price that are contingent upon
any purchase requirement or agreement.
``(IV) Chargebacks, rebates (not including rebates provided
under an agreement under this section), or any other direct
or indirect discounts.
``(V) Any other price concessions, which may be based on
recommendations of the Inspector General of the Department of
Health and Human Services, that would result in a reduction
of the cost to the purchaser.
``(iv) Retail pharmacy.--For purposes of this subsection,
the term `retail pharmacy' does not include mail-order only
pharmacies or any pharmacy at a nursing facility or home.
``(C) Volume weighted average ramp defined.--For purposes
of this subsection, for all drug products included within the
same multiple source drug billing and payment code (or such
other methodology as may be specified by the Secretary), the
volume weighted average RAMP is the volume weighted average
of the RAMPs reported under subsection (b)(3)(A)(iv)
determined by--
[[Page H10569]]
``(i) computing the sum of the products (for each National
Drug Code assigned to such drug products) of--
``(I) the manufacturer's RAMP (as defined in subparagraph
(B)); and
``(II) the total number of units specified under section
1847A(b)(2) sold; and
``(ii) dividing the sum determined under clause (i) by the
sum of the total number of units under clause (i)(II) for all
National Drug Codes assigned to such drug products.
``(D) Exception for initial sales periods.--
``(i) In general.--In the case of a single source drug
during an initial sales period (not to exceed 2 calendar
quarters) in which data on sales for the drug are not
sufficiently available from the manufacturer to compute the
RAMP or the volume weighted average RAMP under subparagraph
(C), the Federal upper limit for the ingredient cost of such
drug during such period shall be the wholesale acquisition
cost (as defined in clause (ii)) for the drug.
``(ii) Wholesale acquisition cost.--For purposes of clause
(i), the term `wholesale acquisition cost' means, with
respect to a single source drug, the manufacturer's list
price for the drug to wholesalers or direct purchasers in the
United States, not including prompt pay or other discounts,
rebates or reductions in price, for the most recent month for
which the information is available, as reported in wholesale
price guides or other publications of drug or biological
pricing data.
``(E) Updates; data collection.--
``(i) Frequency of determination.--The Secretary shall
update the Federal upper limits applicable under this
paragraph on at least a quarterly basis, taking into account
the most recent data collected for purposes of determining
such limits and the Food and Drug Administration's most
recent publication of `Approved Drug Products with
Therapeutic Equivalence Evaluations'.
``(ii) Collection of data.--Data on RAMP is collected under
subsection (b)(3)(A)(iv).
``(F) Authority to enter contracts.--The Secretary may
enter into contracts with appropriate entities to determine
RAMPs and other data necessary to calculate the Federal upper
limit for a covered outpatient drug established under this
subsection and to calculate that payment limit.
``(3) Dispensing fees.--
``(A) In general.--A State which provides medical
assistance for covered outpatient drugs shall pay a
dispensing fee for each covered outpatient drug in accordance
with this paragraph. A State may vary the amount of such
dispensing fees, including taking into account the special
circumstances of pharmacies that are serving rural or
underserved areas or that are sole community pharmacies, so
long as such variation is consistent with subparagraph (B).
``(B) Dispensing fee payment for multiple source drugs.--A
State shall establish a dispensing fee under this title for a
covered outpatient drug that is treated as a multiple source
drug under paragraph (2)(A) (whether or not it may be an
innovator multiple source drug) in an amount that is not less
than $8 per prescription unit. The Secretary shall define
what constitutes a prescription unit for purposes of the
previous sentence.
``(4) Effect on state maximum allowable cost limitations.--
This section shall not supersede or affect provisions in
effect prior to January 1, 1991, or after December 31, 1994,
relating to any maximum allowable cost limitation established
by a State for payment by the State for covered outpatient
drugs, and rebates shall be made under this section without
regard to whether or not payment by the State for such drugs
is subject to such a limitation or the amount of such a
limitation.
``(5) Evaluation of use of retail survey price
methodology.--
``(A) In general.--The Secretary may develop a methodology
to set the Federal upper limit based on the reported retail
survey price, as most recently reported under subparagraph
(C), instead of a percentage of RAMP or volume weighted
average RAMP as described in paragraph (2).
``(B) Initial application.--For 2007, the Secretary may use
this methodology for a limited number of covered outpatient
drugs, including both single source and multiple source
drugs, selected by the Secretary in a manner so as to be
representative of the classes of drugs dispensed under this
title.
``(C) Determination of retail survey price for covered
outpatient drugs.--
``(i) Use of vendor.--The Secretary may contract services
for the determination of retail survey prices for covered
outpatient drugs that represent a nationwide average of
pharmacy sales costs for such drugs, net of all discounts and
rebates. Such a contract shall be awarded for a term of 2
years.
``(ii) Use of competitive bidding.--In contracting for such
services, the Secretary shall competitively bid for an
outside vendor that has a demonstrated history in--
``(I) surveying and determining, on a representative
nationwide basis, retail prices for ingredient costs of
prescription drugs;
``(II) working with retail pharmacies, commercial payers,
and States in obtaining and disseminating such price
information; and
``(III) collecting and reporting such price information on
at least a monthly basis.
``(iii) Additional provisions.--A contract with a vendor
under this subparagraph shall include such terms and
conditions as the Secretary shall specify, including the
following:
``(I) The vendor must monitor the marketplace and report to
the Secretary each time there is a new covered outpatient
drug available nationwide.
``(II) The vendor must update the Secretary no less often
than monthly on the retail survey prices for multiple source
drugs.
``(III) The vendor must apply methods for independently
confirming retail survey prices.
``(iv) Availability of information to states.--Information
on retail survey prices obtained under this subparagraph,
including applicable information on single source drugs,
shall be provided to States on an ongoing, timely basis.
``(D) State use of retail survey price data.--
``(i) Distribution of price data.--The Secretary shall
devise and implement a means for electronic distribution to
each State agency designated under section 1902(a)(5) with
responsibility for the administration or supervision of the
administration of the State plan under this title of the
retail survey price determined under this paragraph.
``(ii) Authority to establish payment rates based on
data.--A State may use the price data received in accordance
with clause (i) in establishing payment rates for the
ingredient costs and dispensing fees for covered outpatient
drugs dispensed to individuals eligible for medical
assistance under this title.
``(6) Limitation on judicial review.--There shall be no
administrative or judicial review of--
``(A) the Secretary's determinations of Federal upper
limits, RAMPs, and volume weighted average RAMPs under this
subsection, including the assignment of National Drug Codes
to billing and payment classes;
``(B) the Secretary's disclosure to States of the average
manufacturer prices, RAMPs, volume weighted average RAMPs,
and retail survey prices;
``(C) determinations under this subsection by the Secretary
of covered outpatient drugs which are dispensed by a
specialty pharmacy or administered by a physician in a
physician's office;
``(D) the contracting and calculations process under this
subsection; and
``(E) the method to allocate rebates, chargebacks, and
other price concessions to a quarter if specified by the
Secretary.''.
(b) Conforming Amendments.--
(1) Reporting ramp-related information.--Subsection
(b)(3)(A) of such section is amended--
(A) by striking ``and'' at the end of clause (ii);
(B) by striking the period at the end of clause (iii) and
inserting ``; and''; and
(C) by inserting after clause (iii) the following new
clause:
``(iv) for calendar quarters beginning on or after July 1,
2006, in conjunction with reporting required under clause (i)
and by National Drug Code (including package size)--
``(I) the manufacturer's RAMP (as defined in subsection
(e)(2)(B)(i)) and the total number of units required to
compute the volume weighted average RAMP under subsection
(e)(2)(C);
``(II) if required to make payment under subsection
(e)(2)(D), the manufacturer's wholesale acquisition cost, as
defined in clause (ii) of such subsection; and
``(III) information on those sales that were made at a
nominal price or otherwise described in subsection
(e)(2)(B)(ii)(II);
for all covered outpatient drugs.''.
(2) Disclosure to states.--Subsection (b)(3)(D) of such
section is amended--
(A) by striking ``and'' at the end of clause (ii);
(B) by striking the period at the end of clause (iii) and
inserting ``, and''; and
(C) by inserting after clause (iii) the following new
clause:
``(iv) to States to carry out this title.''.
(3) Limitations on federal financial participation.--
Section 1903(i) of such Act (42 U.S.C. 1396b(i)) is amended--
(A) in paragraph (10)(A), by striking ``and'' at the end;
(B) in paragraph (10)(B), by striking ``or'' at the end and
inserting ``and'';
(C) by adding at the end of paragraph (10) the following:
``(C) with respect to any amount expended for the
ingredient cost of a covered outpatient drug that exceeds the
Federal upper limit for that drug established and applied
under section 1927(e); or''; and
(D) in paragraph (21), as inserted by section 104(b) of
Public Law 109-91, by inserting before the period at the end
the following: ``or described in subparagraph (B) or (C) of
section 1927(d)(2)''.
(c) Effective Date.--Except as otherwise provided, the
amendments made by this section take effect with respect to a
State on the later of--
(1) January 1, 2007; or
(2) the date that is 6 months after the close of the first
regular session of the State legislature that begins after
the date of the enactment of this Act.
(d) GAO Study on Dispensing Fees ``, Estimated Payment
Amounts, and Pharmacy Acquisition Costs''.--The Comptroller
General of the United States shall conduct a study on the
appropriateness in payment levels to pharmacies for
dispensing fees under the medicaid program, including payment
to specialty pharmacies ``, and on whether the estimated
average payment amounts to pharmacies for covered outpatient
drugs
[[Page H10570]]
under the medicaid program after implementation of the
amendments made by this section are below the average prices
paid by pharmacies for acquiring such drugs.'' Not later than
9 months after the date of the enactment of this Act, the
Comptroller General shall submit to Congress a report on such
study.
(e) Secretarial Authority to Delay Implementation.--The
Secretary of Health and Human Services may delay the
implementation of the amendments made by subsections (a) and
(b)(3)(C) for a period of not more than 1 year, if the
Comptroller General finds, in the study conducted under
subsection (d), that the estimated average payment amounts to
pharmacies for covered outpatient drugs under the medicaid
program after implementation of such amendments are below the
average prices paid by pharmacies for acquiring such drugs.
If the Secretary delays the implementation of such amendments
under this subsection, the Secretary shall transmit to
Congress, prior to the termination of the period of delay, a
report containing specific recommendations for legislation to
establish a more equitable payment system.
(f) IG Report on Use of RAMP and Retail Survey Prices.--Not
later than 2 years after the date of the enactment of this
Act, the Inspector General of the Department of Health and
Human Services shall submit to Congress a report on the
appropriateness of using RAMPs and retail survey prices,
rather than the average manufacturer prices or other price
measures, as the basis for establishing a Federal upper limit
for reimbursement for covered outpatient drugs under the
medicaid program.
SEC. 3102. COLLECTION AND SUBMISSION OF UTILIZATION DATA FOR
CERTAIN PHYSICIAN ADMINISTERED DRUGS.
(a) In General.--Section 1927(a) of the Social Security Act
(42 U.S.C. 1396r-8(a)) is amended by adding at the end the
following new paragraph:
``(7) Requirement for submission of utilization data for
certain physician administered drugs.--
``(A) Single source drugs.--In order for payment to be
available under section 1903(a) for a covered outpatient drug
that is a single source drug that is physician administered
(as determined by the Secretary), and that is administered on
or after January 1, 2006, the State shall provide for the
submission of such utilization data and coding (such as J-
codes and National Drug Code numbers) for each such drug as
the Secretary may specify as necessary to identify the
manufacturer of the drug in order to secure rebates under
this section for drugs administered for which payment is made
under this title.
``(B) Multiple source drugs.--
``(i) In general.--Not later than January 1, 2007, the
information shall be submitted under subparagraph (A) using
National Drug Code codes unless the Secretary specifies that
an alternative coding system should be used.
``(ii) Identification of most frequently physician
administered multiple source drugs.--Not later than January
1, 2007, the Secretary shall publish a list of the 20
physician administered multiple source drugs that the
Secretary determines have the highest dollar volume of
physician administered drugs dispensed under this title. The
Secretary may modify such list from year to year to reflect
changes in such volume.
``(iii) Requirement.--In order for payment to be available
under section 1903(a) for a covered outpatient drug that is a
multiple source drug that is physician administered (as
determined by the Secretary), that is on the list published
under clause (ii), and that is administered on or after
January 1, 2008, the State shall provide for the submission
of such utilization data and coding (such as J-codes and
National Drug Code numbers) for each such drug as the
Secretary may specify as necessary to identify the
manufacturer of the drug in order to secure rebates under
this section.
``(C) Hardship waiver.--The Secretary may delay the
application of subparagraph (A) or (B), or both, in the case
of a State to prevent hardship to States which require
additional time to implement the reporting system required
under the respective subparagraph.''.
(b) Limitation on Payment.--Section 1903(i)(10) of such Act
(42 U.S.C. 1396b(i)(10)), as amended by section 3101(b)(3),
is amended--
(1) by striking ``and'' at the end of subparagraph (B);
(2) by striking ``or'' at the end of subparagraph (C) and
inserting ``and''; and
(3) by adding at the end the following new subparagraph:
``(D) with respect to covered outpatient drugs described in
section 1927(a)(7), unless information respecting utilization
data and coding on such drugs that is required to be
submitted under such section is submitted in accordance with
such section; or''.
SEC. 3103. IMPROVED REGULATION OF DRUGS SOLD UNDER A NEW DRUG
APPLICATION APPROVED UNDER SECTION 505(C) OF
THE FEDERAL FOOD, DRUG, AND COSMETIC ACT.
(a) Inclusion With Other Reported Average Manufacturer and
Best Prices.--Section 1927(b)(3)(A) of the Social Security
Act (42 U.S.C. 1396r-8(b)(3)(A)) is amended--
(1) by striking clause (i) and inserting the following:
``(i) not later than 30 days after the last day of each
rebate period under the agreement--
``(I) on the average manufacturer price (as defined in
subsection (k)(1)) for covered outpatient drugs for the
rebate period under the agreement (including for all such
drugs that are sold under a new drug application approved
under section 505(c) of the Federal Food, Drug, and Cosmetic
Act); and
``(II) for single source drugs and innovator multiple
source drugs (including all such drugs that are sold under a
new drug application approved under section 505(c) of the
Federal Food, Drug, and Cosmetic Act), on the manufacturer's
best price (as defined in subsection (c)(1)(C)) for such
drugs for the rebate period under the agreement;''; and
(2) in clause (ii), by inserting ``(including for such
drugs that are sold under a new drug application approved
under section 505(c) of the Federal Food, Drug, and Cosmetic
Act)'' after ``drugs''.
(b) Conforming Amendments.--Section 1927 of such Act (42
U.S.C. 1396r-8) is amended--
(1) in subsection (c)(1)(C)--
(A) in clause (i), in the matter preceding subclause (I),
by inserting after ``or innovator multiple source drug of a
manufacturer'' the following: ``(including any other such
drug of a manufacturer that is sold under a new drug
application approved under section 505(c) of the Federal
Food, Drug, and Cosmetic Act)''; and
(B) in clause (ii)--
(i) in subclause (II), by striking ``and'' at the end;
(ii) in subclause (III), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following:
``(IV) in the case of a manufacturer that approves, allows,
or otherwise permits any other drug of the manufacturer to be
sold under a new drug application approved under section
505(c) of the Federal Food, Drug, and Cosmetic Act, shall be
inclusive of the lowest price for such authorized drug
available from the manufacturer during the rebate period to
any wholesaler, retailer, provider, health maintenance
organization, nonprofit entity, or governmental entity within
the United States, excluding those prices described in
subclauses (I) through (IV) of clause (i).''; and
(2) in subsection (k)--
(A) in paragraph (1)--
(i) by striking ``The term'' and inserting the following:
``(A) In general.--The term''; and
(ii) by adding at the end the following:
``(B) Inclusion of section 505(c) drugs.--In the case of a
manufacturer that approves, allows, or otherwise permits any
drug of the manufacturer to be sold under a new drug
application approved under section 505(c) of the Federal
Food, Drug, and Cosmetic Act, such term shall be inclusive of
the average price paid for such authorized drug by
wholesalers for drugs distributed to the retail pharmacy
class of trade, after deducting customary prompt pay
discounts.''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 3104. CHILDREN'S HOSPITAL PARTICIPATION IN SECTION 340B
DRUG DISCOUNT PROGRAM.
(a) In General.--Section 1927(a)(5)(B) of the Social
Security Act (42 U.S.C. 1396r-8(a)(5)(B)) is amended by
inserting before the period at the end the following: ``and a
children's hospital described in section 1886(d)(1)(B)(iii)
which meets the requirements of clauses (i) and (iii) of
section 340B(b)(4)(L) of the Public Health Service Act and
which would meet the requirements of clause (ii) of such
section if that clause were applied by taking into account
the percentage of care provided by the hospital to patients
eligible for medical assistance under a State plan under this
title''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to drugs purchased on or after the date of the
enactment of this Act.
SEC. 3105. IMPROVING PATIENT OUTCOMES THROUGH GREATER
RELIANCE ON SCIENCE AND BEST PRACTICES.
(a) In General.--Section 1927 of Social Security Act (42
U.S.C. 1396r-8) is amended--
(1) in subsection (d)(5)--
(A) in the matter before subparagraph (A), by striking
``providing for such approval--'' and inserting ``providing
for such approval meets the following requirements:'';
(B) in subparagraph (A)--
(i) by inserting ``The system'' before ``provides''; and
(ii) by striking ``; and'' and inserting a period;
(C) in subparagraph (B)--
(i) by striking ``except'' and inserting ``Except''; and
(ii) by inserting ``the system'' before ``provides''; and
(D) by adding at the end the following new subparagraphs:
``(C) The system provides that an atypical antipsychotic or
antidepressant single source drug may be placed on a list of
drugs subject to prior authorization only where a drug use
review board has determined, based on the strength of the
scientific evidence and standards of practice, including
assessing peer-reviewed medical literature, pharmacoeconomic
studies, outcomes research data and such other information as
the board determines to be appropriate, that placing the drug
on prior approval or otherwise imposing restrictions on its
use is not likely to harm patients or increase overall
medical costs.
``(D) The system provides that where a response is not
received to a request for authorization of an atypical
antipsychotic or
[[Page H10571]]
antidepressant drug prescribed within 24 hours after the
prescription is transmitted, payment is made for a 30 day
supply of a medication that the prescriber certifies is
medically necessary.''; and
(2) in subsection (g)(3)(C), by inserting after clause
(iii) the following new clause:
``(iv) The development and oversight of prior authorization
programs described in subsection (d)(5).''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on January 1, 2007.
CHAPTER 2--REFORM OF ASSET TRANSFER RULES
SEC. 3111. LENGTHENING LOOK-BACK PERIOD; CHANGE IN BEGINNING
DATE FOR PERIOD OF INELIGIBILITY.
(a) Lengthening Look-Back Period for All Disposals to 5
Years.--Section 1917(c)(1)(B)(i) of the Social Security Act
(42 U.S.C. 1396p(c)(1)(B)(i)) is amended by inserting ``or in
the case of any other disposal of assets made on or after the
date of the enactment of the Medicaid Reconciliation Act of
2005'' before ``, 60 months''.
(b) Change in Beginning Date for Period of Ineligibility.--
Section 1917(c)(1)(D) of such Act (42 U.S.C. 1396p(c)(1)(D))
is amended--
(1) by striking ``(D) The date'' and inserting ``(D)(i) In
the case of a transfer of asset made before the date of the
enactment of the Medicaid Reconciliation Act of 2005, the
date''; and
(2) by adding at the end the following new clause:
``(ii) In the case of a transfer of asset made on or after
the date of the enactment of the Medicaid Reconciliation Act
of 2005, the date specified in this subparagraph is the first
day of a month during or after which assets have been
transferred for less than fair market value, or the date on
which the individual is eligible for medical assistance under
the State plan and is receiving services described in
subparagraph (C) but for the application of the penalty
period, whichever is later, and which does not occur during
any other period of ineligibility under this subsection.''.
(c) Effective Date.--The amendments made by this section
shall apply to transfers made on or after the date of the
enactment of this Act.
(d) Availability of Hardship Waivers.--Each State shall
provide for a hardship waiver process in accordance with
section 1917(c)(2)(D) of the Social Security Act (42 U.S.C.
1396p(c)(2)(D))--
(1) under which an undue hardship exists when application
of the transfer of assets provision would deprive the
individual--
(A) of medical care such that the individual's health or
life would be endangered; or
(B) of food, clothing, shelter, or other necessities of
life; and
(2) which provides for--
(A) notice to recipients that an undue hardship exception
exists;
(B) a timely process for determining whether an undue
hardship waiver will be granted; and
(C) a process under which an adverse determination can be
appealed.
(e) Additional Provisions on Hardship Waivers.--
(1) Application by facility.--Section 1917(c)(2) of the
Social Security Act (42 U.S.C. 1396p(c)(2)) is amended--
(A) by striking the semicolon at the end of subparagraph
(D) and inserting a period; and
(B) by adding after and below such subparagraph the
following:
``The procedures established under subparagraph (D) shall
permit the facility in which the institutionalized individual
is residing to file an undue hardship waiver application on
behalf of the individual with the consent of the individual
or the legal guardian of the individual.''.
(2) Authority to Make Bed Hold Payments for Hardship
Applicants.--Such section is further amended by adding at the
end the following: ``While an application for an undue
hardship waiver is pending under subparagraph (D) in the case
of an individual who is a resident of a nursing facility, if
the application meets such criteria as the Secretary
specifies, the State may provide for payments for nursing
facility services in order to hold the bed for the individual
at the facility, but not in excess of payments for 30
days.''.
SEC. 3112. DISCLOSURE AND TREATMENT OF ANNUITIES AND OF LARGE
TRANSACTIONS.
(a) In General.--Section 1917 of the Social Security Act
(42 U.S.C. 1396p) is amended by redesignating subsection (e)
as subsection (f) and by inserting after subsection (d) the
following new subsection:
``(e)(1) In order to meet the requirements of this section
for purposes of section 1902(a)(18), a State shall require,
as a condition for the provision of medical assistance for
services described in subsection (c)(1)(C)(i) (relating to
long-term care services) for an individual, the application
of the individual for such assistance (including any
recertification of eligibility for such assistance) shall
disclose the following:
``(A) A description of any interest the individual or
community spouse has in an annuity (or similar financial
instrument which provides for the conversion of a countable
asset to a noncountable asset, as may be specified by the
Secretary), regardless of whether the annuity is irrevocable
or is treated as an asset.
``(B) Full information (as specified by the Secretary)
concerning any transaction involving the transfer or disposal
of assets during the previous period of 60 months, if the
transaction exceeded $100,000, without regard to whether the
transfer or disposal was for fair market value. For purposes
of applying the previous sentence under this subsection, all
transactions of $5,000 or more occurring within a 12-month
period shall be treated as a single transaction. The dollar
amounts specified in the first and second sentences of this
subparagraph shall be increased, beginning with 2007, from
year to year based on the percentage increase in the consumer
price index for all urban consumers (all items; United States
city average), rounded to the nearest $1,000 in the case of
the first sentence and $100 in the case of the second
sentence.
Such application or recertification form shall include a
statement that under paragraph (2) the State becomes a
remainder beneficiary under such an annuity or similar
financial instrument by virtue of the provision of such
medical assistance.
``(2)(A) In the case of any annuity in which an
institutionalized individual or community spouse has an
interest, if medical assistance is furnished to the
individual for services described in subsection (c)(1)(C)(i),
by virtue of the provision of such assistance the State
becomes the remainder beneficiary in the first position for
the total amount of such medical assistance paid on behalf of
the individual under this title (or, where there is a
community spouse or minor or disabled child in such first
position, in the position immediately succeeding the position
of such spouse or child or both).
``(B) In the case of disclosure concerning an annuity under
paragraph (1)(A), the State shall notify the issuer of the
annuity of the right of the State under subparagraph (A) as a
preferred remainder beneficiary in the annuity for medical
assistance furnished to the individual. Nothing in this
paragraph shall be construed as preventing such an issuer
from notifying persons with any other remainder interest of
the State's remainder interest under subparagraph (A).
``(C) In the case of such an issuer receiving notice under
subparagraph (B), the State may require the issuer to notify
the State when there is a change in the amount of income or
principal being withdrawn from the amount that was being
withdrawn at the time of the most recent disclosure described
in paragraph (1)(A). A State shall take such information into
account in determining the amount of the State's obligations
for medical assistance or in the individual's eligibility for
such assistance.
``(3)(A) For purposes of subsection (c)(1), a transaction
described in paragraph (1)(B) shall be deemed as the transfer
of an asset for less than fair market value unless the
individual demonstrates to the satisfaction of the State that
the transfer of the asset was for fair market value.
``(B) The Secretary may provide guidance to States on
categories of arms length transactions (such as the purchase
of a commercial annuity) that could be generally treated as a
transfer of asset for fair market value.
``(4) Nothing in this subsection shall be construed as
preventing a State from denying eligibility for medical
assistance for an individual based on the income or resources
derived from an annuity described in paragraph (1)(A).''.
(b) Effective Date.--The amendments made by this section
shall apply to transactions (including the purchase of an
annuity) occurring on or after the date of the enactment of
this Act.
SEC. 3113. APPLICATION OF ``INCOME-FIRST'' RULE IN APPLYING
COMMUNITY SPOUSE'S INCOME BEFORE ASSETS IN
PROVIDING SUPPORT OF COMMUNITY SPOUSE.
(a) In General.--Section 1924(d) of the Social Security Act
(42 U.S.C. 1396r-5(d)) is amended by adding at the end the
following new paragraph:
``(6) Application of `income first' rule for funding
community spouse monthly income allowance.--For purposes of
this subsection and subsection (e), any transfer or
allocation made from an institutionalized spouse to meet the
need of a community spouse for a community spouse monthly
income allowance under paragraph (1)(B) shall be first made
from income of the institutionalized spouse and then only
when the income is not available from the resources of such
institutionalized spouse.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to transfers and allocations made on or after the
date of the enactment of this Act by individuals who become
institutionalized spouses on or after such date.
SEC. 3114. DISQUALIFICATION FOR LONG-TERM CARE ASSISTANCE FOR
INDIVIDUALS WITH SUBSTANTIAL HOME EQUITY.
(a) In General.--Section 1917 of the Social Security Act,
as amended by section 3112, is further amended by
redesignating subsection (f) as subsection (g) and by
inserting after subsection (e) the following new subsection:
``(f)(1) Notwithstanding any other provision of this title,
subject to paragraph (2), in determining eligibility of an
individual for medical assistance with respect to nursing
facility services or other long-term care services, the
individual shall not be eligible for such assistance if the
individual's equity interest in the individual's home exceeds
$750,000. The dollar amount specified in the preceding
sentence shall be increased, beginning with 2011, from year
to year based on the percentage increase in the consumer
[[Page H10572]]
price index for all urban consumers (all items; United States
city average), rounded to the nearest $1,000.
``(2) Paragraph (1) shall not apply with respect to an
individual if--
``(A) the spouse of such individual, or
``(B) such individual's child who is under age 21, or (with
respect to States eligible to participate in the State
program established under title XVI) is blind or permanently
and totally disabled, or (with respect to States which are
not eligible to participate in such program) is blind or
disabled as defined in section 1614,
is lawfully residing in the individual's home.
``(3) Nothing in this subsection shall be construed as
preventing an individual from using a reverse mortgage or
home equity loan to reduce the individual's total equity
interest in the home.
``(4) The Secretary shall establish a process whereby
paragraph (1) is waived in the case of a demonstrated
hardship.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to individuals who are determined eligible for
medical assistance with respect to nursing facility services
or other long-term care services based on an application
filed on or after January 1, 2006.
SEC. 3115. ENFORCEABILITY OF CONTINUING CARE RETIREMENT
COMMUNITIES (CCRC) AND LIFE CARE COMMUNITY
ADMISSION CONTRACTS.
(a) Admission Policies of Nursing Facilities.--Section
1919(c)(5) of the Social Security Act (42 U.S.C. 1396r(c)(5))
is amended--
(1) in subparagraph (A)(i)(II), by inserting ``subject to
clause (v),'' after ``(II)''; and
(2) by adding at the end of subparagraph (B) the following
new clause:
``(v) Treatment of continuing care retirement communities
admission contracts.--Notwithstanding subclause (II) of
subparagraph (A)(i), subject to subsections (c) and (d) of
section 1924, contracts for admission to a State licensed,
registered, certified, or equivalent continuing care
retirement community or life care community, including
services in a nursing facility that is part of such
community, may require residents to spend on their care
resources declared for the purposes of admission before
applying for medical assistance.''.
(b) Treatment of Entrance Fees.--Section 1917 of such Act
(42 U.S.C. 1396p), as amended by sections 3112(a) and
3114(a), is amended by redesignating subsection (g) as
subsection (h) and by inserting after subsection (f) the
following new subsection:
``(g) Treatment of Entrance Fees of Individuals Residing in
Continuing Care Retirement Communities.--
``(1) In general.--For purposes of determining an
individual's eligibility for, or amount of, benefits under a
State plan under this title, the rules specified in paragraph
(2) shall apply to individuals residing in continuing care
retirement communities or life care communities that collect
an entrance fee on admission from such individuals.
``(2) Treatment of entrance fee.--For purposes of this
subsection, an individual's entrance fee in a continuing care
retirement community or life care community shall be
considered a resource available to the individual to the
extent that--
``(A) the individual has the ability to use the entrance
fee, or the contract provides that the entrance fee may be
used, to pay for care should other resources or income of the
individual be insufficient to pay for such care;
``(B) the individual is eligible for a refund of any
remaining entrance fee when the individual dies or terminates
the continuing care retirement community or life care
community contract and leaves the community; and
``(C) the entrance fee does not confer an ownership
interest in the continuing care retirement community or life
care community.
``(3) Treatment in relation to spousal share.--To the
extent that an entrance fee is determined to be an available
resource to an individual applying for medical assistance and
the individual has a community spouse as defined in section
1924(h), the entrance fee shall be considered in the
computation of spousal share pursuant to section 1924(c).''.
CHAPTER 3--FLEXIBILITY IN COST SHARING AND BENEFITS
SEC. 3121. STATE OPTION FOR ALTERNATIVE MEDICAID PREMIUMS AND
COST SHARING.
(a) In General.--Title XIX of the Social Security Act is
amended by inserting after section 1916 the following new
section:
``State option for alternative premiums and cost sharing
``Sec. 1916A. (a) State Flexibility.--
``(1) In general.--Notwithstanding sections 1916 and
1902(a)(10)(B), a State, at its option and through a State
plan amendment, may impose premiums and cost sharing for any
group of individuals (as specified by the State) and for any
type of services (and may vary such premiums and cost sharing
among such groups or types, including through the use of
tiered cost sharing for prescription drugs) consistent with
the limitations established under this section. Nothing in
this section shall be construed as superseding (or preventing
the application of) section 1916(g).
``(2) Definitions.--In this section:
``(A) Premium.--The term `premium' includes any enrollment
fee or similar charge.
``(B) Cost sharing.--The term `cost sharing' includes any
deduction, deductible, copayment, or similar charge.
``(b) Limitations on Exercise of Authority.--
``(1) Individuals with family income below 100 percent of
poverty level.--In the case of an individual whose family
income does not exceed 100 percent of the Federal poverty
level applicable to a family of the size involved, subject to
subsections (c)(2) and (e)(2)(A), the limitations otherwise
provided under subsections (a) and (b) of section 1916 shall
continue to apply and no premium will be imposed under the
plan, except that the total annual aggregate amount of cost
sharing imposed (including any increased cost sharing imposed
under subsection (c) or (e)) for all individuals in the
family may not exceed 5 percent of the family income of the
family involved for the year involved.
``(2) Individuals with family income above 100 percent of
poverty level.--In the case of an individual whose family
income exceeds 100 percent of the Federal poverty level
applicable to a family of the size involved, the total annual
aggregate amount of premiums and cost sharing imposed
(including any increase and cost sharing imposed under
subsection (c) or (e)) for all individuals in the family may
not exceed 5 percent of the family income of the family
involved for the year involved.
``(3) Additional limitations.--
``(A) Premiums.--No premiums shall be imposed under this
section with respect to the following:
``(i) Individuals under 18 years of age that are required
to be provided medical assistance under section
1902(a)(10)(A)(i), and including individuals with respect to
whom adoption or foster care assistance is made available
under part E of title IV without regard to age.
``(ii) Pregnant women.
``(iii) Any terminally ill individual who is receiving
hospice care (as defined in section 1905(o)).
``(iv) Any individual who is an inpatient in a hospital,
nursing facility, intermediate care facility for the mentally
retarded, or other medical institution, if such individual is
required, as a condition of receiving services in such
institution under the State plan, to spend for costs of
medical care all but a minimal amount of the individual's
income required for personal needs.
``(B) Cost sharing.--Subject to the succeeding provisions
of this section, no cost sharing shall be imposed under this
section with respect to the following:
``(i) Services furnished to individuals under 18 years of
age that are required to be provided medical assistance under
section 1902(a)(10)(A)(i), and including services furnished
to individuals with respect to whom adoption or foster care
assistance is made available under part E of title IV without
regard to age.
``(ii) Preventive services (such as well baby and well
child care and immunizations) provided to children under 18
years of age regardless of family income.
``(iii) Services furnished to pregnant women, if such
services relate to the pregnancy or to any other medical
condition which may complicate the pregnancy.
``(iv) Services furnished to a terminally ill individual
who is receiving hospice care (as defined in section
1905(o)).
``(v) Services furnished to any individual who is an
inpatient in a hospital, nursing facility, intermediate care
facility for the mentally retarded, or other medical
institution, if such individual is required, as a condition
of receiving services in such institution under the State
plan, to spend for costs of medical care all but a minimal
amount of the individual's income required for personal
needs.
``(vi) Emergency services (as defined by the Secretary for
purposes of section 1916(a)(2)(D)).
``(vii) Family planning services and supplies described in
section 1905(a)(4)(C).
``(C) Construction.--Nothing in this paragraph shall be
construed as preventing a State from exempting additional
classes of individuals from premiums under this section or
from exempting additional individuals or services from cost
sharing under this section.
``(4) Indexing nominal amounts.--In applying section 1916
under paragraph (1) with respect to cost sharing that is
`nominal' in amount, the Secretary shall increase such
`nominal' amounts for each year (beginning with 2006) by the
annual percentage increase in the medical care component of
the consumer price index for all urban consumers (U.S. city
average) as rounded up in an appropriate manner.''.
``(5) Determinations of family income.--In applying this
subsection, family income shall be determined in a manner
specified by the State for purposes of this subsection,
including the use of such disregards as the State may
provide. Family income shall be determined for such period
and at such periodicity as the State may provide under this
title.
``(6) Poverty line defined.--For purposes of this section,
the term `poverty line' has the meaning given such term in
section 673(2) of the Community Services Block Grant Act (42
U.S.C. 9902(2)), including any revision required by such
section.
``(7) Construction.--Nothing in this section shall be
construed--
``(A) as preventing a State from further limiting the
premiums and cost sharing imposed under this section beyond
the limitations provided under this subsection;
``(B) as affecting the authority of the Secretary through
waiver to modify limitations
[[Page H10573]]
on premiums and cost sharing under this subsection; or
``(C) as affecting any such waiver of requirements in
effect under this title before the date of the enactment of
this section with regard to the imposition of premiums and
cost sharing.
``(d) Enforceability of Premiums and Other Cost Sharing.--
``(1) Premiums.--Notwithstanding section 1916(c)(3) and
section 1902(a)(10)(B), a State may, at its option, condition
the provision of medical assistance for an individual upon
prepayment of a premium authorized to be imposed under this
section, or may terminate eligibility for such medical
assistance on the basis of failure to pay such a premium but
shall not terminate eligibility of an individual for medical
assistance under this title on the basis of failure to pay
any such premium until such failure continues for a period of
not less than 60 days. A State may apply the previous
sentence for some or all groups of beneficiaries as specified
by the State and may waive payment of any such premium in any
case where the State determines that requiring such payment
would create an undue hardship.
``(2) Cost sharing.--Notwithstanding section 1916(e) or any
other provision of law, a State may permit a provider
participating under the State plan to require, as a condition
for the provision of care, items, or services to an
individual entitled to medical assistance under this title
for such care, items, or services, the payment of any cost
sharing authorized to be imposed under this section with
respect to such care, items, or services. Nothing in this
paragraph shall be construed as preventing a provider from
reducing or waiving the application of such cost sharing.''.
(b) Conforming Amendment.--Section 1916(f) of such Act (42
U.S.C. 1396o(f)) is amended by inserting ``and section
1916A'' after ``(b)(3)''.
(c) GAO Study of Impact of Premiums and Cost Sharing.--The
Comptroller General of the United States shall conduct a
study on the impact of premiums and cost sharing under the
medicaid program on access to, and utilization of, services.
Not later than January 1, 2008, the Comptroller General shall
submit to Congress a report on such study.
(d) Effective Date.--The amendments made by this section
shall apply to cost sharing imposed for items and services
furnished on or after January 1, 2006.
SEC. 3122. SPECIAL RULES FOR COST SHARING FOR PRESCRIPTION
DRUGS.
(a) In General.--Section 1916A of the Social Security Act,
as inserted by section 3121, is amended by inserting after
subsection (b) the following new subsection:
``(c) Special Rules for Cost Sharing for Prescription
Drugs.--
``(1) In general.--In order to encourage beneficiaries to
use drugs (in this subsection referred to as `preferred
drugs') identified by the State as the least (or less) costly
effective prescription drugs within a class of drugs (as
defined by the State), with respect to one or more groups of
beneficiaries specified by the State, subject to paragraphs
(2) and (5), the State may--
``(A) provide an increase in cost sharing (above the
nominal level otherwise permitted under section 1916 or
subsection (b), but subject to paragraphs (2) and (3)) with
respect to drugs that are not preferred drugs within a class;
and
``(B) waive or reduce the cost sharing otherwise applicable
for preferred drugs within such class and shall not apply any
such cost sharing for such preferred drugs for individuals
for whom cost sharing may not otherwise be imposed under
subsection (b)(3)(B).
``(2) Limitations.--
``(A) By income group as a multiple of nominal amounts.--In
no case may the increase in cost sharing under paragraph
(1)(A) with respect to a non-preferred drug exceed, in the
case of an individual whose family income is--
``(i) below 100 percent of the poverty line applicable to a
family of the size involved, the amount of nominal cost
sharing (as otherwise determined under subsection (b));
``(ii) at least 100 percent, but below 150 percent, of the
poverty line applicable to a family of the size involved, two
times the amount of nominal cost sharing (as otherwise
determined under subsection (b)); or
``(iii) at least 150 percent of the poverty line applicable
to a family of the size involved, three times the amount of
nominal cost sharing (as otherwise determined under
subsection (b)).
``(B) Limitation to nominal for exempt populations.--In the
case of an individual who is otherwise not subject to cost
sharing due to the application of subsection (b)(3), any
increase in cost sharing under paragraph (1)(A) with respect
to a non-preferred drug may not exceed a nominal amount (as
otherwise determined under subsection (b)).
``(C) Continued application of aggregate cap.--In addition
to the limitations imposed under subparagraphs (A) and (B),
any increase in cost sharing under paragraph (1)(A) continues
to be subject to the aggregate cap on cost sharing applied
under paragraph (1) or (2) of subsection (b), as the case may
be.
``(D) TRICARE pharmacy benefit program limitations.--In no
case may a State--
``(i) treat as a non-preferred drug under this subsection a
drug that is treated as a preferred drug under the TRICARE
pharmacy benefit program established under section 1074g of
title 10, United States Code, as such program is in effect on
the date of the enactment of this section; or
``(ii) impose cost sharing under this subsection that
exceeds the cost sharing imposed under the standards under
such pharmacy benefit program, as such program is in effect
as of the date of the enactment of this section.
``(3) Waiver.--In carrying out paragraph (1), a State shall
provide for the application of cost sharing levels applicable
to a preferred drug in the case of a drug that is not a
preferred drug if the prescribing physician determines that
the preferred drug for treatment of the same condition either
would not be as effective for the individual or would have
adverse effects for the individual or both.
``(4) Exclusion authority.--Nothing in this subsection
shall be construed as preventing a State from excluding from
paragraph (1) specified drugs or classes of drugs.
``(5) Prior authorization and appeals process.--A State may
not provide for increased cost sharing under this subsection
unless the State has implemented for outpatient prescription
drugs a system for prior authorization and an appeals process
for determinations relating to prior authorization.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to cost sharing imposed for items and services
furnished on or after October 1, 2006.
SEC. 3123. EMERGENCY ROOM COPAYMENTS FOR NON-EMERGENCY CARE.
(a) In General.--Section 1916A of the Social Security Act,
as inserted by section 3121 and as amended by section 3122,
is further amended by adding at the end the following new
subsection:
``(e) State Option for Imposing Cost Sharing for Non-
Emergency Care Furnished in an Hospital Emergency Room.--
``(1) In general.--Notwithstanding section 1916 or the
previous provisions of this section, but subject to the
limitations of paragraph (2), a State may, by amendment to
its State plan under this title, impose cost sharing for non-
emergency services furnished to an individual (within one or
more groups of individuals specified by the State) in a
hospital emergency department under this subsection if the
following conditions are met:
``(A) Access to non-emergency room provider.--The
individual has actually available and accessible (as such
terms are applied by the Secretary under section 1916(b)(3))
an alternate non-emergency services provider with respect to
such services.
``(B) Notice.--The physician or hospital must inform the
beneficiary after the appropriate screening assessment, but
before providing the non-emergency services, of the
following:
``(i) The hospital may require the payment of the State
specified cost sharing before the service can be provided.
``(ii) The name and location of an alternate non-emergency
services provider (described in subparagraph (A)) that is
actually available and accessible (as described in such
subparagraph).
``(iii) The fact that such alternate provider can provide
the services without the imposition of the increase in cost
sharing described in clause (i).
``(iv) The hospital provides a referral to coordinate
scheduling of this treatment.
Nothing in this subsection shall be construed as preventing a
State from applying (or waiving) cost sharing otherwise
permissible under this section to services described in
clause (iii).
``(2) Limitations.--
``(A) For poorest beneficiaries.--In the case of an
individual described in subsection (b)(1), the cost sharing
imposed under this subsection may not exceed twice the amount
determined to be nominal under this section, subject to the
percent of income limitation otherwise applicable under
subsection (b)(1).
``(B) Application to exempt populations.--In the case of an
individual who is otherwise not subject to cost sharing under
subsection (b)(3), a State may impose cost sharing under
paragraph (1) for care in an amount that does not exceed a
nominal amount (as otherwise determined under subsection (b))
so long as no cost sharing is imposed to receive such care
through an outpatient department or other alternative health
care provider in the geographic area of the hospital
emergency department involved.
``(C) Continued application of aggregate cap.--In addition
to the limitations imposed under subparagraphs (A) and (B),
any increase in cost sharing under paragraph (1) continues to
be subject to the aggregate cap on cost sharing applied under
paragraph (1) or (2) of subsection (b), as the case may be.
``(3) Construction.--Nothing in this section shall be
construed--
``(A) to limit a hospital's obligations with respect to
screening and stabilizing treatment of an emergency medical
condition under section 1867; or
``(B) to modify any obligations under either State or
Federal standards relating to the application of a prudent-
layperson standard with respect to payment or coverage of
emergency services by any managed care organization.
``(4) Determination standard.--No hospital or physician
that makes a determination with respect to the imposition of
cost sharing under this subsection shall be liable in any
civil action or proceeding for such determination absent a
finding by clear and convincing evidence of gross negligence
by
[[Page H10574]]
the hospital or physician. The previous sentence shall not
affect any liability under section 1867 or otherwise
applicable under State law based upon the provision (or
failure to provide) care.
``(5) Definitions.--For purposes of this subsection:
``(A) Non-emergency services.--The term `non-emergency
services' means any care or services furnished in a emergency
department of a hospital that the physician determines do not
constitute an appropriate medical screening examination or
stabilizing examination and treatment screening required to
be provided by the hospital under section 1867.
``(B) Alternate non-emergency services provider.--The term
`alternative non-emergency services provider' means, with
respect to non-emergency services for the diagnosis or
treatment of a condition, a health care provider, such as a
physician's office, health care clinic, community health
center, hospital outpatient department, or similar health
care provider, that provides clinically appropriate services
for such diagnosis or treatment of the condition within a
clinically appropriate time of the provision of such non-
emergency services and that is participating in the program
under this title.''.
(b) Grant Funds for Establishment of Alternate Non-
Emergency Services Providers.--Section 1903 of the Social
Security Act (42 U.S.C. 1396b) is amended by adding at the
end the following new subsection:
``(x) Payments for Establishment of Alternate Non-Emergency
Services Providers.--
``(1) Payments.--In addition to the payments otherwise
provided under subsection (a), subject to paragraph (2), the
Secretary shall provide for payments to States under such
subsection for the establishment of alternate non-emergency
service providers (as defined in section 1916A(f)(5)(B)), or
networks of such providers.
``(2) Limitation.--The total amount of payments under this
subsection shall be equal to, and shall not exceed,
$100,000,000 during the four-year period beginning with 2006.
This subsection constitutes budget authority in advance of
appropriations Acts and represents the obligation of the
Secretary to provide for the payment of amounts provided
under this subsection.
``(3) Preference.--In providing for payments to States
under this subsection, the Secretary shall provide preference
to States that establish, or provide for, alternate non-
emergency services providers or networks of such providers
that--
``(A) serve rural or underserved areas where beneficiaries
under this title may not have regular access to providers of
primary care services; or
``(B) are in partnership with local community hospitals.
``(4) Form and manner of payment.--Payment to a State under
this subsection shall be made only upon the filing of such
application in such form and in such manner as the Secretary
shall specify. Payment to a State under this subsection shall
be made in the same manner as other payments under section
1903(a).''.
(c) Effective Date.--The amendments made by this section
shall apply to non-emergency services furnished on or after
the date of the enactment of this Act.
SEC. 3124. USE OF BENCHMARK BENEFIT PACKAGES.
Title XIX of the Social Security Act is amended by
redesignating section 1936 as section 1937 and by inserting
after section 1935 the following new section:
``State flexibility in benefit packages
``Sec. 1936. (a) State Option of Providing Benchmark
Benefits.--
``(1) Authority.--
``(A) In general.--Notwithstanding any other provision of
this title, a State, at its option as a State plan amendment,
may provide for medical assistance under this title to
individuals within one or more groups of individuals
specified by the State through enrollment in coverage that
provides--
``(i) benchmark coverage described in subsection (b)(1)
and, for a qualifying child, benchmark dental coverage as
defined in subparagraph (F); or
``(ii) benchmark equivalent coverage described in
subsection (b)(2)and, for a qualifying child, benchmark
dental coverage as defined in subparagraph (F).
``(B) Limitation.--The State may only exercise the option
under subparagraph (A) for eligibility categories that had
been established before the date of the enactment of this
section.
``(C) Option of wrap-around benefits.--In the case of
coverage described in subparagraph (A), a State, at its
option, may provide such wrap-around or additional benefits
as the State may specify.
``(D) Treatment as medical assistance.--Payment of premiums
for such coverage under this subsection shall be treated as
payment of other insurance premiums described in the third
sentence of section 1905(a).
``(E) Qualifying child defined.--For purposes of
subparagraph (A), the term `qualifying child' means a child
under 18 years of age with a family income below 133 percent
of the poverty line applicable to a family of the size
involved.
``(F) Benchmark dental coverage.--For purposes of
subparagraph (A), the term `benchmark dental coverage' means,
with respect to a State, dental benefits coverage that is
equivalent to or better than the dental coverage offered
under the dental benefit plan that covers the greatest number
of individuals in the State who are not entitled to medical
assistance under this title.
``(2) Application.--
``(A) In general.--Except as provided in subparagraph (B),
a State may require that a full-benefit eligible individual
(as defined in subparagraph (C)) within a group obtain
benefits under this title through enrollment in coverage
described in paragraph (1)(A). A State may apply the previous
sentence to individuals within one or more groups of such
individuals.
``(B) Limitation on application.--A State may not require
under subparagraph (A) an individual to obtain benefits
through enrollment described in paragraph (1)(A) if the
individual is within one of the following categories of
individuals:
``(i) Mandatory pregnant women and children.--The
individual is a pregnant woman or child under 18 years of age
who is required to be covered under the State plan under
section 1902(a)(10)(A)(i).
``(ii) Dual eligibles.--The individual is entitled to
benefits under any part of title XVIII.
``(iii) Terminally ill hospice patients.--The individual is
terminally ill and is receiving benefits for hospice care
under this title.
``(iv) Eligible on basis of institutionalization.--The
individual is an inpatient in a hospital, nursing facility,
intermediate care facility for the mentally retarded, or
other medical institution, and is required, as a condition of
receiving services in such institution under the State plan,
to spend for costs of medical care all but a minimal amount
of the individual's income required for personal needs.
``(v) Medically frail and special medical needs
individuals.--The individual is medically frail or otherwise
an individual with special medical needs (as identified in
accordance with regulations of the Secretary).
``(vi) Beneficiaries qualifying for long-term care
services.--The individual qualifies based on medical
condition for medical assistance for long-term care services
described in section 1917(c)(1)(C).
``(C) Full-benefit eligible individuals.--
``(i) In general.--For purposes of this paragraph, subject
to clause (ii), the term `full-benefit eligible individual'
means for a State for a month an individual who is determined
eligible by the State for medical assistance for all services
defined in section 1905(a) which are covered under the State
plan under this title for such month under section
1902(a)(10)(A) or under any other category of eligibility for
medical assistance for all such services under this title, as
determined by the Secretary.
``(ii) Exclusion of medically needy and spend-down
populations.--Such term shall not include an individual
determined to be eligible by the State for medical assistance
under section 1902(a)(10)(C) or by reason of section 1902(f)
or otherwise eligible based on a reduction of income based on
costs incurred for medical or other remedial care.
``(b) Benchmark Benefit Packages.--
``(1) In general.--For purposes of subsection (a)(1), each
of the following coverage shall be considered to be benchmark
coverage:
``(A) FEHBP-equivalent health insurance coverage.--The
standard Blue Cross/Blue Shield preferred provider option
service benefit plan, described in and offered under section
8903(1) of title 5, United States Code.
``(B) State employee coverage.--A health benefits coverage
plan that is offered and generally available to State
employees in the State involved.
``(C) Coverage offered through hmo.--The health insurance
coverage plan that--
``(i) is offered by a health maintenance organization (as
defined in section 2791(b)(3) of the Public Health Service
Act), and
``(ii) has the largest insured commercial, non-medicaid
enrollment of covered lives of such coverage plans offered by
such a health maintenance organization in the State involved.
``(2) Benchmark-equivalent coverage.--For purposes of
subsection (a)(1), coverage that meets the following
requirement shall be considered to be benchmark-equivalent
coverage:
``(A) Inclusion of basic services.--The coverage includes
benefits for items and services within each of the following
categories of basic services:
``(i) Inpatient and outpatient hospital services.
``(ii) Physicians' surgical and medical services.
``(iii) Laboratory and x-ray services.
``(iv) Well-baby and well-child care, including age-
appropriate immunizations.
``(v) Other appropriate preventive services, as designated
by the Secretary.
``(B) Aggregate actuarial value equivalent to benchmark
package.--The coverage has an aggregate actuarial value that
is at least actuarially equivalent to one of the benchmark
benefit packages described in paragraph (1).
``(C) Substantial actuarial value for additional services
included in benchmark package.--With respect to each of the
following categories of additional services for which
coverage is provided under the benchmark benefit package used
under subparagraph (B), the coverage has an actuarial value
that is equal to at least 75 percent of the actuarial value
of the coverage of that category of services in such package:
``(i) Coverage of prescription drugs.
``(ii) Mental health services.
``(iii) Vision services.
``(iv) Hearing services.
[[Page H10575]]
``(3) Determination of actuarial value.--The actuarial
value of coverage of benchmark benefit packages shall be set
forth in an actuarial opinion in an actuarial report that has
been prepared--
``(A) by an individual who is a member of the American
Academy of Actuaries;
``(B) using generally accepted actuarial principles and
methodologies;
``(C) using a standardized set of utilization and price
factors;
``(D) using a standardized population that is
representative of the population involved;
``(E) applying the same principles and factors in comparing
the value of different coverage (or categories of services);
``(F) without taking into account any differences in
coverage based on the method of delivery or means of cost
control or utilization used; and
``(G) taking into account the ability of a State to reduce
benefits by taking into account the increase in actuarial
value of benefits coverage offered under this title that
results from the limitations on cost sharing under such
coverage.
The actuary preparing the opinion shall select and specify in
the memorandum the standardized set and population to be used
under subparagraphs (C) and (D).
``(4) Coverage of rural health clinic and fqhc services.--
Notwithstanding the previous provisions of this section, a
State may not provide for medical assistance through
enrollment of an individual with benchmark coverage or
benchmark equivalent coverage under this section unless--
``(A) the individual has access, through such coverage or
otherwise, to services described in subparagraphs (B) and (C)
of section 1905(a)(2); and
``(B) payment for such services is made in accordance with
the requirements of section 1902(bb).''.
SEC. 3125. STATE OPTION TO ESTABLISH NON-EMERGENCY MEDICAL
TRANSPORTATION PROGRAM.
(a) In General.--Section 1902(a) of the Social Security Act
(42 U.S.C. 1396a(a)) is amended--
(1) in paragraph (66), by striking ``and'' at the end;
(2) in paragraph (67) by striking the period at the end and
inserting ``; and''; and
(3) by inserting after paragraph (67) the following:
``(68) at the option of the State and notwithstanding
paragraph (10)(B) or (23), provide for the establishment of a
non-emergency medical transportation brokerage program in
order to more cost-effectively provide transportation for
individuals eligible for medical assistance under the State
plan who need access to medical care or services and have no
other means of transportation which--
``(A) may include a wheelchair van, taxi, stretcher car,
bus passes and tickets, secured transportation, and such
other transportation as the Secretary determines appropriate;
and
``(B) may be conducted under contract with a broker who--
``(i) is selected through a competitive bidding process
based on the State's evaluation of the broker's experience,
performance, references, resources, qualifications, and
costs;
``(ii) has oversight procedures to monitor beneficiary
access and complaints and ensure that transport personnel are
licensed, qualified, competent, and courteous;
``(iii) is subject to regular auditing and oversight by the
State in order to ensure the quality of the transportation
services provided and the adequacy of beneficiary access to
medical care and services; and
``(iv) complies with such requirements related to
prohibitions on referrals and conflict of interest as the
Secretary shall establish (based on the prohibitions on
physician referrals under section 1877 and such other
prohibitions and requirements as the Secretary determines to
be appropriate).''.
(b) Effective Date.--The amendments made by subsection (a)
take effect on the date of the enactment of this Act.
(c) IG Report on Utilization.--Not later than January 1,
2007, the Inspector General of the Department of Health and
Human Services shall submit to Congress a report that
examines the non-emergency medical transportation brokerage
programs implemented under section 1902(a)(68) of the Social
Security Act, as inserted by subsection (a). The report shall
include findings regarding conflicts of interest and improper
utilization of transportation services under such programs,
as well as recommendations for improvements in such programs.
SEC. 3126. EXEMPTING WOMEN COVERED UNDER BREAST OR CERVICAL
CANCER PROGRAM.
Notwithstanding any other provision of law, none of
provisions of the previous sections of this chapter, or
amendments made by such sections, shall apply to women who
are receiving medical assistance by virtue of the application
of sections 1902(a)(10)(A)(ii)(XVIII) and 1902(aa) of the
Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)(XVIII),
1396a(aa)).
CHAPTER 4--EXPANDED ACCESS TO CERTAIN BENEFITS
SEC. 3131. EXPANDED ACCESS TO HOME AND COMMUNITY-BASED
SERVICES FOR THE ELDERLY AND DISABLED.
(a) In General.--Section 1905(a) of the Social Security Act
(42 U.S.C. 1396d(a)) is amended--
(1) in paragraph (27), by striking ``and'' at the end;
(2) by redesignating paragraph (28) as paragraph (29); and
(3) by inserting after paragraph (27) the following new
paragraph:
``(28) subject to section 1902(cc), home and community-
based services (within the scope of services described in
paragraph (4)(B) of section 1915(c) for which the Secretary
has the authority to approve a waiver and not including room
and board) provided pursuant to a written plan of care for
individuals--
``(A) who are 65 years of age or older, who are disabled
(as defined under the State plan), who are persons with
developmental disabilities or mental retardation or persons
with related conditions, or who are within a subgroup thereof
under the State plan;
``(B) with respect to whom there has been a determination,
in the manner described in paragraph (1) of such section,
that but for the provision of such services the individuals
would require the level of care provided in a hospital, a
nursing facility, or an intermediate care facility for the
mentally retarded the cost of which could be reimbursed under
the State plan; and
``(C) who qualify for medical assistance under the
eligibility standards in effect in the State (which may
include standards in effect under an approved waiver) as of
the date of the enactment of this paragraph; and''.
(b) Conditions.--Section 1902 of such Act (42 U.S.C. 1396a)
is amended by adding at the end the following new subsection:
``(cc) Provision of Home and Community-Based Services Under
State Plan.--
``(1) Conditions.--A State may provide home and community-
based services under section 1905(a)(28), other than through
a waiver or demonstration project under section 1915 or 1115,
only if the following conditions are met:
``(A) Expiration of previous waiver.--Any State waiver or
demonstration project under either such section with respect
to services for individuals described in such section has
expired.
``(B) Information.--The State must monitor and report to
the Secretary, in a form and manner specified by the
Secretary and on a quarterly basis, enrollment and
expenditures for provision of such services under such
section.
``(2) Options.--Notwithstanding any other provision of this
title, in a State's provision of services under section
1905(a)(28)--
``(A) a State is not required to comply with the
requirements of section 1902(a)(1) (relating to
statewideness), section 1902(a)(10)(B) (relating to
comparability), and section 1902(a)(10)(C)(i)(III) (relating
to income and resource rules applicable in the community);
``(B) a State may limit the number of individuals who are
eligible for such services and may establish waiting lists
for the receipt of such services; and
``(C) a State may limit the amount, duration, and scope of
such services.
Nothing in this section shall be construed as applying the
previous sentence to any items or services other than home
and community-based services provided under section
1905(a)(28).
``(3) Use of electronic data.--The State shall permit
health care providers to comply with documentation and data
requirements imposed with respect to home and community-based
services through the maintenance of data in electronic form
rather than in paper form.''.
(c) Effective Date.--The amendments made by this section
shall apply to home and community-based services furnished on
or after October 1, 2006.
SEC. 3132. OPTIONAL CHOICE OF SELF-DIRECTED PERSONAL
ASSISTANCE SERVICES (CASH AND COUNSELING).
(a) Exemption From Certain Requirements.--Section 1915 of
the Social Security Act (42 U.S.C. 1396n) is amended by
adding at the end the following new subsection:
``(i)(1) A State may provide, as `medical assistance',
payment for part or all of the cost of self-directed personal
assistance services (other than room and board) under the
plan which are provided pursuant to a written plan of care to
individuals with respect to whom there has been a
determination that, but for the provision of such services,
the individuals would require and receive personal care
services under the plan, or home and community-based services
provided pursuant to a waiver under subsection (c). Self-
directed personal assistance services may not be provided
under this subsection to individuals who reside in a home or
property that is owned, operated, or controlled by a provider
of services, not related by blood or marriage.
``(2) The Secretary shall not grant approval for a State
self-directed personal assistance services program under this
section unless the State provides assurances satisfactory to
the Secretary of the following:
``(A) Necessary safeguards have been taken to protect the
health and welfare of individuals provided services under the
program, and to assure financial accountability for funds
expended with respect to such services.
``(B) The State will provide, with respect to individuals
who--
``(i) are entitled to medical assistance for personal care
services under the plan, or receive home and community-based
services under a waiver granted under subsection (c);
``(ii) may require self-directed personal assistance
services; and
``(iii) may be eligible for self-directed personal
assistance services,
an evaluation of the need for personal care under the plan,
or personal services under a waiver granted under subsection
(c).
[[Page H10576]]
``(C) Such individuals who are determined to be likely to
require personal care under the plan, or home and community-
based services under a waiver granted under subsection (c)
are informed of the feasible alternatives, if available under
the State's self-directed personal assistance services
program, at the choice of such individuals, to the provision
of personal care services under the plan, or personal
assistance services under a waiver granted under subsection
(c).
``(D) The State will provide for a support system that
ensures participants in the self-directed personal assistance
services program are appropriately assessed and counseled
prior to enrollment and are able to manage their budgets.
Additional counseling and management support may be provided
at the request of the participant.
``(E) The State will provide to the Secretary an annual
report on the number of individuals served and total
expenditures on their behalf in the aggregate. The State
shall also provide an evaluation of overall impact on the
health and welfare of participating individuals compared to
non-participants every three years.
``(3) A State may provide self-directed personal assistance
services under the State plan without regard to the
requirements of section 1902(a)(1) and may limit the
population eligible to receive these services and limit the
number of persons served without regard to section
1902(a)(10)(B).
``(4)(A) For purposes of this subsection, the term `self-
directed personal assistance services' means personal care
and related services, or home and community-based services
otherwise available under the plan under this title or
subsection (c), that are provided to an eligible participant
under a self-directed personal assistance services program
under this section, under which individuals, within an
approved self-directed services plan and budget, purchase
personal assistance and related services, and permits
participants to hire, fire, supervise, and manage the
individuals providing such services.
``(B) At the election of the State--
``(i) a participant may choose to use any individual
capable of providing the assigned tasks including legally
liable relatives as paid providers of the services; and
``(ii) the individual may use the individual's budget to
acquire items that increase independence or substitute (such
as a microwave oven or an accessibility ramp) for human
assistance, to the extent that expenditures would otherwise
be made for the human assistance.
``(5) For purpose of this section, the term `approved self-
directed services plan and budget' means, with respect to a
participant, the establishment of a plan and budget for the
provision of self-directed personal assistance services,
consistent with the following requirements:
``(A) Self-direction.--The participant (or in the case of a
participant who is a minor child, the participant's parent or
guardian, or in the case of an incapacitated adult, another
individual recognized by State law to act on behalf of the
participant) exercises choice and control over the budget,
planning, and purchase of self-directed personal assistance
services, including the amount, duration, scope, provider,
and location of service provision.
``(B) Assessment of needs.--There is an assessment of the
needs, strengths, and preferences of the participants for
such services.
``(C) Service plan.--A plan for such services (and supports
for such services) for the participant has been developed and
approved by the State based on such assessment through a
person-centered process that--
``(i) builds upon the participant's capacity to engage in
activities that promote community life and that respects the
participant's preferences, choices, and abilities; and
``(ii) involves families, friends, and professionals in the
planning or delivery of services or supports as desired or
required by the participant.
``(D) Service budget.--A budget for such services and
supports for the participant has been developed and approved
by the State based on such assessment and plan and on a
methodology that uses valid, reliable cost data, is open to
public inspection, and includes a calculation of the expected
cost of such services if those services were not self-
directed. The budget may not restrict access to other
medically necessary care and services furnished under the
plan and approved by the State but not included in the
budget.
``(E) Application of quality assurance and risk
management.--There are appropriate quality assurance and risk
management techniques used in establishing and implementing
such plan and budget that recognize the roles and
responsibilities in obtaining services in a self-directed
manner and assure the appropriateness of such plan and budget
based upon the participant's resources and capabilities.
``(6) A State may employ a financial management entity to
make payments to providers, track costs, and make reports
under the program. Payment for the activities of the
financial management entity shall be at the administrative
rate established in section 1903(a).''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to services furnished on or after January 1,
2006.
SEC. 3133. EXPANSION OF STATE LONG-TERM CARE PARTNERSHIP
PROGRAM.
(a) In General.--Section 1917(b)(1)(C) of the Social
Security Act (42 U.S.C. 1396p(b)(1)(C)) is amended--
(1) in clause (ii), by inserting ``or which has a State
plan amendment that provides for a qualified State long-term
care insurance partnership (as defined in clause (iii))''
after ``1993,''; and
(2) by adding at the end the following new clauses:
``(iii) For purposes of this paragraph, the term `qualified
State long-term care insurance partnership' means an approved
State plan amendment under this title that provides for the
disregard of any assets or resources in an amount equal to
the insurance benefit payments that are made to or on behalf
of an individual who is a beneficiary under a long-term care
insurance policy (including a certificate issued under a
group insurance contract), if the following requirements are
met:
``(I) The policy covers an insured who was a resident of
such State when coverage first became effective under the
policy.
``(II) The policy is a qualified long-term care insurance
policy (as defined in section 7702B(b) of the Internal
Revenue Code of 1986) issued on or after the first day of the
first calendar quarter in which the plan amendment was
submitted to the Secretary.
``(III) If the policy does not provide some level of
inflation protection, the insured was offered, before the
policy was sold, a long-term care insurance policy that
provides some level of inflation protection.
``(IV) The State Medicaid agency under section 1902(a)(5)
provides information and technical assistance to the State
insurance department on the insurance department's role of
assuring that any individual who sells a long-term care
insurance policy under the partnership receives training or
demonstrates evidence of an understanding of such policies
and how they relate to other public and private coverage of
long-term care.
``(V) The issuer of the policy provides regular reports to
the Secretary that include, in accordance with regulations of
the Secretary (promulgated after consultation with the
States), notification regarding when all benefits provided
under the policy have been paid and the amount of such
benefits paid, when the policy otherwise terminates, and such
other information as the Secretary determines may be
appropriate to the administration of such partnerships.
``(VI) The State does not impose any requirement affecting
the terms or benefits of such a policy unless the State
imposes such requirement on long-term care insurance policies
without regard to whether the policy is covered under the
partnership or is offered in connection with such a
partnership.
In the case of a long-term care insurance policy which is
exchanged for another such policy, subclause (I) shall be
applied based on the coverage of the first such policy that
was exchanged.
``(iv) The Secretary--
``(I) as appropriate, shall provide copies of the reports
described in clause (iii)(V) to the State involved; and
``(II) shall promote the education of consumers regarding
qualified State long-term care insurance partnerships.
``(v) The Secretary, in consultation with other appropriate
Federal agencies, issuers of long-term care insurance, the
National Association of Insurance Commissioners, and State
insurance commissioners, shall develop recommendations for
Congress to authorize and fund a uniform minimum data set to
be reported electronically by all issuers of long-term care
insurance policies under qualified State long-term care
insurance partnerships to a secure, centralized electronic
query and report-generating mechanism that the State, the
Secretary, and other Federal agencies can access.''.
(b) Construction.--Nothing in the amendments made by
subsection (a) shall be construed as affecting the treatment
of long-term care insurance policies that will be, are, or
were provided under a State plan amendment described in
section 1917(b)(1)(C)(ii) of the Social Security Act that was
approved as of May 14, 1993.
(c) Effective Date.--A State plan amendment that provides
for a qualified State long-term care insurance partnership
under the amendments made by subsection (a) may provide that
such amendment is effective for long-term care insurance
policies issued on or after a date, specified in the
amendment, that is not earlier than the first day of the
first calendar quarter in which the plan amendment was
submitted to the Secretary of Health and Human Services.
(d) Standards for Reciprocal Recognition Among Partnership
States.--In order to permit portability in long-term care
insurance policies purchased under State long-term care
insurance partnerships, the Secretary of Health and Human
Services may develop, in consultation with the States and the
National Association of Insurance Commissioners, uniform
standards for reciprocal recognition of such policies among
States with qualified State long-term care insurance
partnerships.
SEC. 3134. HEALTH OPPORTUNITY ACCOUNTS.
Title XIX of the Social Security Act, as amended by section
3124, is amended--
(1) by redesignating section 1937 as section 1938; and
(2) by inserting after section 1936 the following new
section:
``Health opportunity accounts
``Sec. 1937. (a) Authority.--
``(1) In general.--Notwithstanding any other provision of
this title, the Secretary shall establish a demonstration
program
[[Page H10577]]
under which States may provide under their State plans under
this title (including such a plan operating under a statewide
waiver under section 1115) in accordance with this section
for the provision of alternative benefits consistent with
subsection (c) for eligible population groups in one or more
geographic areas of the State specified by the State. An
amendment under the previous sentence is referred to in this
section as a `State demonstration program'.
``(2) Initial demonstration.--The demonstration program
under this section shall begin on January 1, 2006. During the
first 5 years of such program, the Secretary shall not
approve more than 10 State demonstration programs, with each
State demonstration program covering one or more geographic
areas specified by the State. After such 5-year period--
``(A) unless the Secretary finds, taking into account cost-
effectiveness, quality of care, and other criteria that the
Secretary specifies, that a State demonstration program
previously implemented has been unsuccessful, such a
demonstration program may be extended or made permanent in
the State; and
``(B) unless the Secretary finds, taking into account cost-
effectiveness, quality of care, and other criteria that the
Secretary specifies, that all State demonstration programs
previously implemented were unsuccessful, other States may
implement State demonstration programs.
``(3) Approval.--The Secretary shall not approve a State
demonstration program under paragraph (1) unless the program
includes the following:
``(A) Creating patient awareness of the high cost of
medical care.
``(B) Providing incentives to patients to seek preventive
care services.
``(C) Reducing inappropriate use of health care services.
``(D) Enabling patients to take responsibility for health
outcomes.
``(E) Providing enrollment counselors and ongoing education
activities.
``(F) Providing transactions involving health opportunity
accounts to be conducted electronically and without cash.
``(G) Providing access to negotiated provider payment rates
consistent with this section.
Nothing in this section shall be construed as preventing a
State demonstration program from providing incentives for
patients obtaining appropriate preventive care (as defined
for purposes of section 223(c)(2)(C) of the Internal Revenue
Code of 1986), such as additional account contributions for
an individual demonstrating healthy prevention practices.
``(4) No requirement for statewideness.--Nothing in this
section or any other provision of law shall be construed to
require that a State must provide for the implementation of a
State demonstration program on a Statewide basis.
``(5) Reports.--The Secretary shall periodically submit to
Congress reports regarding the success of State demonstration
programs.
``(b) Eligible Population Groups.--
``(1) In general.--A State demonstration program under this
section shall specify the eligible population groups
consistent with paragraphs (2) and (3).
``(2) Eligibility limitations during initial demonstration
period.--During the initial 5 years of the demonstration
program under this section, a State demonstration program
shall not apply to any of the following individuals:
``(A) Individuals who are 65 years of age or older.
``(B) Individuals who are disabled, regardless of whether
or not their eligibility for medical assistance under this
title is based on such disability.
``(C) Individuals who are eligible for medical assistance
under this title only because they are (or were within the
previous 60 days) pregnant.
``(D) Individuals who have been eligible for medical
assistance for a continuous period of less than 3 months.
``(3) Additional limitations.--A State demonstration
program shall not apply to any individual within a category
of individuals described in section 1936(a)(2)(B).
``(4) Limitations.--
``(A) State option.--This subsection shall not be construed
as preventing a State from further limiting eligibility.
``(B) On enrollees in medicaid managed care
organizations.--Insofar as the State provides for eligibility
of individuals who are enrolled in medicaid managed care
organizations, such individuals may participate in the State
demonstration program only if the State provides assurances
satisfactory to the Secretary that the following conditions
are met with respect to any such organization:
``(i) In no case may the number of such individuals
enrolled in the organization who participate in the program
exceed 5 percent of the total number of individuals enrolled
in such organization.
``(ii) The proportion of enrollees in the organization who
so participate is not significantly disproportionate to the
proportion of such enrollees in other such organizations who
participate.
``(iii) The State has provided for an appropriate
adjustment in the per capita payments to the organization to
account for such participation, taking into account
differences in the likely use of health services between
enrollees who so participate and enrollees who do not so
participate.
``(5) Voluntary participation.--An eligible individual
shall be enrolled in a State demonstration program only if
the individual voluntarily enrolls. Except in such hardship
cases as the Secretary shall specify, such an enrollment
shall be effective for a period of 12 months, but may be
extended for additional periods of 12 months each with the
consent of the individual.
``(c) Alternative Benefits.--
``(1) In general.--The alternative benefits provided under
this section shall consist, consistent with this subsection,
of at least--
``(A) coverage for medical expenses in a year for items and
services for which benefits are otherwise provided under this
title after an annual deductible described in paragraph (2)
has been met; and
``(B) contribution into a health opportunity account.
Nothing in subparagraph (A) shall be construed as preventing
a State from providing for coverage of preventive care
(referred to in subsection (a)(3)) within the alternative
benefits without regard to the annual deductible.
``(2) Annual deductible.--The amount of the annual
deductible described in paragraph (1)(A) shall be at least
100 percent, but no more than 110 percent, of the annualized
amount of contributions to the health opportunity account
under subsection (d)(2)(A)(i), determined without regard to
any limitation described in subsection (d)(2)(C)(i)(II).
``(3) Access to negotiated provider payment rates.--
``(A) Fee-for-service enrollees.--In the case of an
individual who is participating in a State demonstration
program and who is not enrolled with a medicaid managed care
organization, the State shall provide that the individual may
obtain demonstration program medicaid services from--
``(i) any participating provider under this title at the
same payment rates that would be applicable to such services
if the deductible described in paragraph (1)(A) was not
applicable; or
``(ii) any provider at payment rates that do not exceed 125
percent of the payment rate that would be applicable to such
services furnished by a participating provider under this
title if the deductible described in paragraph (1)(A) was not
applicable.
``(B) Treatment under medicaid managed care plans.--In the
case of an individual who is participating in a State
demonstration program and is enrolled with a medicaid managed
care organization, the State shall enter into an arrangement
with the organization under which the individual may obtain
demonstration program medicaid services from any provider
under such organization at payment rates that do not exceed
the payment rate that would be applicable to such services if
the deductible described in paragraph (1)(A) was not
applicable.
``(C) Computation.--The payment rates described in
subparagraphs (A) and (B) shall be computed without regard to
any cost sharing that would be otherwise applicable under
sections 1916 and 1916A.
``(D) Definitions.--For purposes of this paragraph:
``(i) The term `demonstration program medicaid services'
means, with respect to an individual participating in a State
demonstration program, services for which the individual
would be provided medical assistance under this title but for
the application of the deductible described in paragraph
(1)(A).
``(ii) The term `participating provider' means--
``(I) with respect to an individual described in
subparagraph (A), a health care provider that has entered
into a participation agreement with the State for the
provision of services to individuals entitled to benefits
under the State plan; or
``(II) with respect to an individual described in
subparagraph (B) who is enrolled in a medicaid managed care
organization, a health care provider that has entered into an
arrangement for the provision of services to enrollees of the
organization under this title.
``(4) No effect on subsequent benefits.--Except as provided
under paragraphs (1) and (2), alternative benefits for an
eligible individual shall consist of the benefits otherwise
provided to the individual, including cost sharing relating
to such benefits.
``(5) Overriding cost sharing and comparability
requirements for alternative benefits.--The provisions of
this title relating to cost sharing for benefits (including
sections 1916 and 1916A) shall not apply with respect to
benefits to which the annual deductible under paragraph
(1)(A) applies. The provisions of section 1902(a)(10)(B)
(relating to comparability) shall not apply with respect to
the provision of alternative benefits (as described in this
subsection).
``(6) Treatment as medical assistance.--Subject to
subparagraphs (D) and (E) of subsection (d)(2), payments for
alternative benefits under this section (including
contributions into a health opportunity account) shall be
treated as medical assistance for purposes of section
1903(a).
``(7) Use of tiered deductible and cost sharing.--
``(A) In general.--A State--
``(i) may vary the amount of the annual deductible applied
under paragraph (1)(A) based on the income of the family
involved so long as it does not favor families with higher
income over those with lower income; and
``(ii) may vary the amount of the maximum out-of-pocket
cost sharing (as defined in subparagraph (B)) based on the
income of
[[Page H10578]]
the family involved so long as it does not favor families
with higher income over those with lower income.
``(B) Maximum out-of-pocket cost sharing.--For purposes of
subparagraph (A)(ii), the term `maximum out-of-pocket cost
sharing' means, for an individual or family, the amount by
which the annual deductible level applied under paragraph
(1)(A) to the individual or family exceeds the balance in the
health opportunity account for the individual or family.
``(8) Contributions by employers.--Nothing in this section
shall be construed as preventing an employer from providing
health benefits coverage consisting of the coverage described
in paragraph (1)(A) to individuals who are provided
alternative benefits under this section.
``(d) Health Opportunity Account.--
``(1) In general.--For purposes of this section, the term
`health opportunity account' means an account that meets the
requirements of this subsection.
``(2) Contributions.--
``(A) In general.--No contribution may be made into a
health opportunity account except--
``(i) contributions by the State under this title; and
``(ii) contributions by other persons and entities, such as
charitable organizations.
``(B) State contribution.--A State shall specify the
contribution amount that shall be deposited under
subparagraph (A)(i) into a health opportunity account.
``(C) Limitation on annual state contribution provided and
permitting imposition of maximum account balance.--
``(i) In general.--A State--
``(I) may impose limitations on the maximum contributions
that may be deposited under subparagraph (A)(i) into a health
opportunity account in a year;
``(II) may limit contributions into such an account once
the balance in the account reaches a level specified by the
State; and
``(III) subject to clauses (ii) and (iii) and subparagraph
(D)(i), may not provide contributions described in
subparagraph (A)(i) to a health opportunity account on behalf
of an individual or family to the extent the amount of such
contributions (including both State and Federal shares)
exceeds, on an annual basis, $2,500 for each individual (or
family member) who is an adult and $1,000 for each individual
(or family member) who is a child.
``(ii) Indexing of dollar limitations.--For each year after
2006, the dollar amounts specified in clause (i)(III) shall
be annually increased by the Secretary by a percentage that
reflects the annual percentage increase in the medical care
component of the consumer price index for all urban
consumers.
``(iii) Budget neutral adjustment.--A State may provide for
dollar limitations in excess of those specified in clause
(i)(III) (as increased under clause (ii)) for specified
individuals if the State provides assurances satisfactory to
the Secretary that contributions otherwise made to other
individuals will be reduced in a manner so as to provide for
aggregate contributions that do not exceed the aggregate
contributions that would otherwise be permitted under this
subparagraph.
``(D) Limitations on federal matching.--
``(i) State contribution.--A State may contribute under
subparagraph (A)(i) amounts to a health opportunity account
in excess of the limitations provided under subparagraph
(C)(i)(III), but no Federal financial participation shall be
provided under section 1903(a) with respect to contributions
in excess of such limitations.
``(ii) No ffp for private contributions.--No Federal
financial participation shall be provided under section
1903(a) with respect to any contributions described in
subparagraph (A)(ii) to a health opportunity account.
``(E) Application of different matching rates.--The
Secretary shall provide a method under which, for
expenditures made from a health opportunity account for
medical care for which the Federal matching rate under
section 1903(a) exceeds the Federal medical assistance
percentage, a State may obtain payment under such section at
such higher matching rate for such expenditures.
``(3) Use.--
``(A) General uses.--
``(i) In general.--Subject to the succeeding provisions of
this paragraph, amounts in a health opportunity account may
be used for payment of such health care expenditures as the
State specifies.
``(ii) General limitation.--In no case shall such account
be used for payment for health care expenditures that are not
payment of medical care (as defined by section 213(d) of the
Internal Revenue Code of 1986).
``(iii) State restrictions.--In applying clause (i), a
State may restrict payment for--
``(I) providers of items and services to providers that are
licensed or otherwise authorized under State law to provide
the item or service and may deny payment for such a provider
on the basis that the provider has been found, whether with
respect to this title or any other health benefit program, to
have failed to meet quality standards or to have committed
one or more acts of fraud or abuse; and
``(II) items and services insofar as the State finds they
are not medically appropriate or necessary.
``(iv) Electronic withdrawals.--The State demonstration
program shall provide for a method whereby withdrawals may be
made from the account for such purposes using an electronic
system and shall not permit withdrawals from the account in
cash.
``(B) Maintenance of health opportunity account after
becoming ineligible for public benefit.--
``(i) In general.--Notwithstanding any other provision of
law, if an account holder of a health opportunity account
becomes ineligible for benefits under this title because of
an increase in income or assets--
``(I) no additional contribution shall be made into the
account under paragraph (2)(A)(i);
``(II) subject to clause (iii), the balance in the account
shall be reduced by 25 percent; and
``(III) subject to the succeeding provisions of this
subparagraph, the account shall remain available to the
account holder for withdrawals under the same terms and
conditions as if the account holder remained eligible for
such benefits.
``(ii) Special rules.--Withdrawals under this subparagraph
from an account--
``(I) shall be available for the purchase of health
insurance coverage; and
``(II) may, subject to clause (iv), be made available (at
the option of the State) for such additional expenditures
(such as job training and tuition expenses) specified by the
State (and approved by the Secretary) as the State may
specify.
``(iii) Exception from 25 percent savings to government for
private contributions.--Clause (i)(II) shall not apply to the
portion of the account that is attributable to contributions
described in paragraph (2)(A)(ii). For purposes of accounting
for such contributions, withdrawals from a health opportunity
account shall first be attributed to contributions described
in paragraph (2)(A)(i).
``(iv) Condition for non-health withdrawals.--No withdrawal
may be made from an account under clause (ii)(II) unless the
accountholder has participated in the program under this
section for at least 1 year.
``(v) No requirement for continuation of coverage.--An
account holder of a health opportunity account, after
becoming ineligible for medical assistance under this title,
is not required to purchase high-deductible or other
insurance as a condition of maintaining or using the account.
``(4) Administration.--A State may coordinate
administration of health opportunity accounts through the use
of a third party administrator and reasonable expenditures
for the use of such administrator shall be reimbursable to
the State in the same manner as other administrative
expenditures under section 1903(a)(7).
``(5) Treatment.--Amounts in, or contributed to, a health
opportunity account shall not be counted as income or assets
for purposes of determining eligibility for benefits under
this title.
``(6) Unauthorized withdrawals.--A State may establish
procedures--
``(A) to penalize or remove an individual from the health
opportunity account based on nonqualified withdrawals by the
individual from such an account; and
``(B) to recoup costs that derive from such nonqualified
withdrawals.''.
CHAPTER 5--OTHER PROVISIONS
SEC. 3141. INCREASE IN MEDICAID PAYMENTS TO INSULAR AREAS.
Section 1108(g) of the Social Security Act (42 U.S.C.
1308(g)) is amended--
(1) in paragraph (2), by inserting ``and subject to
paragraph (3)'' after ``subsection (f)''; and
(2) by adding at the end the following new paragraph:
``(3) Fiscal years 2006 and 2007 for certain insular
areas.--The amounts otherwise determined under this
subsection for Puerto Rico, the Virgin Islands, Guam, the
Northern Mariana Islands, and American Samoa for fiscal year
2006 and fiscal year 2007 shall be increased by the following
amounts:
``(A) For Puerto Rico, $12,000,000 for fiscal year 2006 and
$12,000,000 for fiscal year 2007.
``(B) For the Virgin Islands, $2,500,000 for fiscal year
2006 and $5,000,000 for fiscal year 2007.
``(C) For Guam, $2,500,000 for fiscal year 2006 and
$5,000,000 for fiscal year 2007.
``(D) For the Northern Mariana Islands, $1,000,000 for
fiscal year 2006 and $2,000,000 for fiscal year 2007.
``(E) For American Samoa, $2,000,000 for fiscal year 2006
and $4,000,000 for fiscal year 2007.
Such amounts shall not be taken into account in applying
paragraph (2) for fiscal year 2007 but shall be taken into
account in applying such paragraph for fiscal year 2008 and
subsequent fiscal years.''.
SEC. 3142. MANAGED CARE ORGANIZATION PROVIDER TAX REFORM.
(a) In General.--Section 1903(w)(7)(A)(viii) of the Social
Security Act (42 U.S.C. 1396b(w)(7)(A)(viii)) is amended to
read as follows:
``(viii) Services of managed care organizations (including
health maintenance organizations, preferred provider
organizations, and such other similar organizations as the
Secretary may specify by regulation).''.
(b) Effective Date.--
(1) In general.--Subject to paragraph (2), the amendment
made by subsection (a) shall be effective as of the date of
the enactment of this Act.
(2) Grandfather.--
(A) In general.--Subject to subparagraph (B), in the case
of a State that has had approved as of the date of the
enactment of this Act a provider tax on services described
[[Page H10579]]
in section 1903(w)(7)(A)(viii) of the Social Security Act, as
amended by subsection (a), such amendment shall be effective
as of October 1, 2008.
(B) Transition rule for fiscal year 2009.--In the case of a
State described in subparagraph (A), the amount of any
reduction in payment under subsection (a)(1) of section 1903
of the Social Security Act (42 U.S.C. 1396b) that would
otherwise be required under subsection (w) of such section
for calendar quarters in fiscal year 2009 because of the
amendment made by section (a) shall be reduced by one-half.
SEC. 3143. MEDICAID TRANSFORMATION GRANTS.
(a) In General.--Section 1903 of the Social Security Act
(42 U.S.C. 1396b), as amended by section 3123, is amended by
adding at the end the following new subsection:
``(y) Medicaid Transformation Payments.--
``(1) In general.--In addition to the payments provided
under subsection (a), subject to paragraph (4), the Secretary
shall provide for payments to States for the adoption of
innovative methods to improve the effectiveness and
efficiency in providing medical assistance under this title.
``(2) Permissible uses of funds.--The following are
examples of innovative methods for which funds provided under
this subsection may be used:
``(A) Methods for reducing patient error rates through the
implementation and use of electronic health records,
electronic clinical decision support tools, or e-prescribing
programs.
``(B) Methods for improving rates of collection from
estates of amounts owed under this title.
``(C) Methods for reducing waste, fraud, and abuse under
the program under this title, such as reducing improper
payment rates as measured by annual payment error rate
measurement (PERM) project rates.
``(D) Implementation of a medication risk management
program as part of a drug use review program under section
1927(g).
``(E) Methods in reducing, in clinically appropriate ways,
expenditures under this title for covered outpatient drugs,
particularly in the categories of greatest drug utilization,
by increasing the utilization of generic drugs through the
use of education programs and other incentives to promote
greater use of generic drugs.''.
``(3) Application; terms and conditions.--
``(A) In general.--No payments shall be made to a State
under this subsection unless the State applies to the
Secretary for such payments in a form, manner, and time
specified by the Secretary.
``(B) Terms and conditions.--Such payments are made under
such terms and conditions consistent with this subsection as
the Secretary prescribes.
``(C) Annual report.--Payment to a State under this
subsection is conditioned on the State submitting to the
Secretary an annual report on the programs supported by such
payment. Such report shall include information on--
``(A) the specific uses of such payment;
``(B) an assessment of quality improvements and clinical
outcomes under such programs; and
``(C) estimates of cost savings resulting from such
programs.
``(4) Funding.--
``(A) Limitation on funds.--The total amount of payments
under this subsection shall be equal to, and shall not
exceed--
``(i) $50,000,000 for fiscal year 2007; and
``(ii) $50,000,000 for fiscal year 2008.
This subsection constitutes budget authority in advance of
appropriations Acts and represents the obligation of the
Secretary to provide for the payment of amounts provided
under this subsection.
``(B) Allocation of funds.--The Secretary shall specify a
method for allocating the funds made available under this
subsection among States. Such method shall provide preference
for States that design programs that target health providers
that treat significant numbers of medicaid beneficiaries.
Such method shall provide that not less than 25 percent of
such funds shall be allocated among States the population of
which (as determined according to data collected by the
United States Census Bureau) as of July 1, 2004, was more
than 105 percent of the population of the respective State
(as so determined) as of April 1, 2000.
``(C) Form and manner of payment.--Payment to a State under
this subsection shall be made in the same manner as other
payments under section 1903(a). There is no requirement for
State matching funds to receive payments under this
subsection.
``(5) Medication risk management program.--
``(A) In general.--For purposes of this subsection, the
term `medication risk management program' means a program for
targeted beneficiaries that ensures that covered outpatient
drugs are appropriately used to optimize therapeutic outcomes
through improved medication use and to reduce the risk of
adverse events.
``(B) Elements.--Such program may include the following
elements:
``(i) The use of established principles and standards for
drug utilization review and best practices to analyze
prescription drug claims of targeted beneficiaries and
identify outlier physicians.
``(ii) On an ongoing basis provide outlier physicians--
``(I) a comprehensive pharmacy claims history for each
targeted beneficiary under their care;
``(II) information regarding the frequency and cost of
relapses and hospitalizations of targeted beneficiaries under
the physician's care; and
``(III) applicable best practice guidelines and empirical
references.
``(iii) Monitor outlier physician's prescribing, such as
failure to refill, dosage strengths, and provide incentives
and information to encourage the adoption of best clinical
practices.
``(C) Targeted beneficiaries.--For purposes of this
paragraph, the term `targeted beneficiaries' means medicaid
eligible beneficiaries who are identified as having high
prescription drug costs and medical costs, such as
individuals with behavioral disorders or multiple chronic
diseases who are taking multiple medications.''.
SEC. 3144. ENHANCING THIRD PARTY IDENTIFICATION AND PAYMENT.
(a) Clarification of Third Parties Legally Responsible for
Payment of a Claim for a Health Care Item or Service.--
Section 1902(a)(25) of the Social Security Act (42 U.S.C.
1396a(a)(25)) is amended--
(1) in subparagraph (A), in the matter preceding clause
(i)--
(A) by inserting ``, including self-insured plans'' after
``health insurers''; and
(B) by striking ``and health maintenance organizations''
and inserting ``health maintenance organizations, pharmacy
benefit managers, or other parties that are, by statute,
contract, or agreement, legally responsible for payment of a
claim for a health care item or service''; and
(2) in subparagraph (G)--
(A) by inserting ``a self-insured plan,'' after ``1974,'';
and
(B) by striking ``and a health maintenance organization''
and inserting ``a health maintenance organization, a pharmacy
benefit manager, or other party that is, by statute,
contract, or agreement, legally responsible for payment of a
claim for a health care item or service''.
(b) Requirement for Third Parties to Provide the State With
Coverage Eligibility and Claims Data.--Section 1902(a)(25) of
such Act (42 U.S.C. 1396a(a)(25)) is amended--
(1) in subparagraph (G), by striking ``and'' at the end;
(2) in subparagraph (H), by adding ``and'' after the
semicolon at the end; and
(3) by inserting after subparagraph (H), the following:
``(I) that the State shall provide assurances satisfactory
to the Secretary that the State has in effect laws requiring
health insurers, including self-insured plans, group health
plans (as defined in section 607(1) of the Employee
Retirement Income Security Act of 1974), service benefit
plans, health maintenance organizations, pharmacy benefit
managers, or other parties that are, by statute, contract, or
agreement, legally responsible for payment of a claim for a
health care item or service, as a condition of doing business
in the State, to--
``(i) provide eligibility and claims payment data with
respect to an individual who is eligible for, or is provided,
medical assistance under the State plan, upon the request of
the State;
``(ii) accept the subrogation of the State to any right of
an individual or other entity to payment from the party for
an item or service for which payment has been made under the
State plan;
``(iii) respond to any inquiry by the State regarding a
claim for payment for any health care item or service
submitted not later than 3 years after the date of the
provision of such health care item or service; and
``(iv) agree not to deny a claim submitted by the State
solely on the basis of the date of submission of the
claim;''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section take effect on January 1,
2006.
(2) Delayed effective date.--In the case of a State plan
under title XIX of the Social Security Act which the
Secretary determines requires State legislation in order for
the plan to meet the additional requirements imposed by the
amendments made by this section, the State plan shall not be
regarded as failing to comply with the requirements of such
Act solely on the basis of its failure to meet these
additional requirements before the first day of the first
calendar quarter beginning after the close of the first
regular session of the State legislature that begins after
the date of enactment of this Act. For purposes of the
previous sentence, in the case of a State that has a 2-year
legislative session, each year of the session shall be
considered to be a separate regular session of the State
legislature.
SEC. 3145. IMPROVED ENFORCEMENT OF DOCUMENTATION
REQUIREMENTS.
(a) In General.--Section 1903 of the Social Security Act
(42 U.S.C. 1396b) is amended--
(1) in subsection (i), as amended by section 104 of Public
Law 109-91--
(A) by striking the period at the end of paragraph (21) and
inserting ``; or''; and
(B) by inserting after paragraph (21) the following new
paragraph:
``(22) with respect to amounts expended for medical
assistance for an individual who declares under section
1137(d)(1)(A) to be a citizen or national of the United
States for purposes of establishing eligibility for benefits
under this title, unless the requirement of subsection (z) is
met.''; and
[[Page H10580]]
(2) by adding at the end, as amended by sections 3123 and
3143, the following new subsection:
``(z)(1) For purposes of subsection (i)(22), the
requirement of this subsection is, with respect to an
individual declaring to be a citizen or national of the
United States, that, subject to paragraph (2), there is
presented satisfactory documentary evidence of citizenship or
nationality (as defined in paragraph (3)) of the individual.
``(2) The requirement of paragraph (1) shall not apply to
an alien who is eligible for medical assistance under this
title--
``(A) and is entitled to or enrolled for benefits under any
part of title XVIII;
``(B) on the basis of receiving supplemental security
income benefits under title XVI; or
``(C) on such other basis as the Secretary may specify
under which satisfactory documentary evidence of citizenship
or nationality had been previously presented.
``(3)(A) For purposes of this subsection, the term
`satisfactory documentary evidence of citizenship or
nationality' means--
``(i) any document described in subparagraph (B); or
``(ii) a document described in subparagraph (C) and a
document described in subparagraph (D).
``(B) The following are documents described in this
subparagraph:
``(i) A United State passport.
``(ii) Form N-550 or N-570 (Certificate of Naturalization).
``(iii) Form N-560 or N-561 (Certificate of United States
Citizenship).
``(iv) Such other document as the Secretary may specify, by
regulation, that provides proof of United States citizenship
or nationality and that provides a reliable means of
documentation of personal identity.
``(C) The following are documents described in this
subparagraph:
``(i) A certificate of birth in the United States.
``(ii) Form FS-545 or Form DS-1350 (Certification of Birth
Abroad).
``(iii) Form I-97 (United States Citizen Identification
Card).
``(iv) Form FS-240 (Report of Birth Abroad of a Citizen of
the United States).
``(v) Such other document (not described in subparagraph
(B)(iv)) as the Secretary may specify that provides proof of
United States citizenship or nationality.
``(D) The following are documents described in this
subparagraph:
``(i) Any identity document described in section
274A(b)(1)(D) of the Immigration and Nationality Act.
``(ii) Any other documentation of personal identity of such
other type as the Secretary finds, by regulation, provides a
reliable means of identification.
``(E) A reference in this paragraph to a form includes a
reference to any successor form.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to determinations of initial eligibility for
medical assistance made on or after July 1, 2006, and to
redeterminations of eligibility made on or after such date in
the case of individuals for whom the requirement of section
1903(z) of the Social Security Act, as added by such
amendments, was not previously met.
SEC. 3146. REFORMS OF TARGETED CASE MANAGEMENT.
(a) In General.--Section 1915(g) of the Social Security Act
(42 U.S.C. 1396n(g)) is amended by striking paragraph (2) and
inserting the following:
``(2) For purposes of this subsection:
``(A)(i) The term `case management services' means services
which will assist individuals eligible under the plan in
gaining access to needed medical, social, educational, and
other services.
``(ii) Such term includes the following:
``(I) Assessment of an eligible individual to determine
service needs, including activities that focus on needs
identification, to determine the need for any medical,
educational, social, or other services. Such assessment
activities include the following:
``(aa) Taking client history.
``(bb) Identifying the needs of the individual, and
completing related documentation.
``(cc) Gathering information from other sources such as
family members, medical providers, social workers, and
educators, if necessary, to form a complete assessment of the
eligible individual.
``(II) Development of a specific care plan based on the
information collected through an assessment, that specifies
the goals and actions to address the medical, social,
educational, and other services needed by the eligible
individual, including activities such as ensuring the active
participation of the eligible individual and working with the
individual (or the individual's authorized health care
decision maker) and others to develop such goals and identify
a course of action to respond to the assessed needs of the
eligible individual.
``(III) Referral and related activities to help an
individual obtain needed services, including activities that
help link eligible individuals with medical, social,
educational providers or other programs and services that are
capable of providing needed services, such as making
referrals to providers for needed services and scheduling
appointments for the individual.
``(IV) Monitoring and follow-up activities, including
activities and contacts that are necessary to ensure the care
plan is effectively implemented and adequately addressing the
needs of the eligible individual, and which may be with the
individual, family members, providers, or other entities and
conducted as frequently as necessary to help determine such
matters as--
``(aa) whether services are being furnished in accordance
with an individual's care plan;
``(bb) whether the services in the care plan are adequate;
and
``(cc) whether there are changes in the needs or status of
the eligible individual, and if so, making necessary
adjustments in the care plan and service arrangements with
providers.
``(iii) Such term does not include the direct delivery of
an underlying medical, educational, social, or other service
to which an eligible individual has been referred, including,
with respect to the direct delivery of foster care services,
services such as (but not limited to) the following:
``(I) Research gathering and completion of documentation
required by the foster care program.
``(II) Assessing adoption placements.
``(III) Recruiting or interviewing potential foster care
parents.
``(IV) Serving legal papers.
``(V) Home investigations.
``(VI) Providing transportation.
``(VII) Administering foster care subsidies.
``(VIII) Making placement arrangements.
``(B) The term `targeted case management services' means
case management services that are furnished without regard to
the requirements of section 1902(a)(1) and section
1902(a)(10)(B) to specific classes of individuals or to
individuals who reside in specified areas.
``(3) With respect to contacts with individuals who are not
eligible for medical assistance under the State plan or, in
the case of targeted case management services, individuals
who are eligible for such assistance but are not part of the
target population specified in the State plan, such
contacts--
``(A) are considered an allowable case management activity,
when the purpose of the contact is directly related to the
management of the eligible individual's care; and
``(B) are not considered an allowable case management
activity if such contacts relate directly to the
identification and management of the noneligible or
nontargeted individual's needs and care.
``(4)(A) In accordance with section 1902(a)(25), Federal
financial participation only is available under this title
for case management services or targeted case management
services if there are no other third parties liable to pay
for such services, including as reimbursement under a
medical, social, educational, or other program.
``(B) A State shall allocate the costs of any part of such
services which are reimbursable under another federally
funded program in accordance with OMB Circular A-87 (or any
related or successor guidance or regulations regarding
allocation of costs among federally funded programs) under an
approved cost allocation program.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2006.
SEC. 3147. EMERGENCY SERVICES FURNISHED BY NON-CONTRACT
PROVIDERS FOR MEDICAID MANAGED CARE ENROLLEES.
(a) In General.--Section 1932(b)(2) of the Social Security
Act (42 U.S.C. 1396u-2(b)(2)) is amended by adding at the end
the following new subparagraph:
``(D) Emergency services furnished by non-contract
providers.--Any provider of emergency services that does not
have in effect a contract with a medicaid managed care entity
that establishes payment amounts for services furnished to a
beneficiary enrolled in the entity's medicaid managed care
plan must accept as payment in full the amounts (less any
payments for indirect costs of medical education and direct
costs of graduate medical education) that it could collect if
the beneficiary received medical assistance under this title
other than through enrollment in such an entity.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2007.
SEC. 3148. ADJUSTMENT IN COMPUTATION OF MEDICAID FMAP TO
DISREGARD AN EXTRAORDINARY EMPLOYER PENSION
CONTRIBUTION.
(a) In General.--Only for purposes of computing the Federal
medical assistance percentage under section 1905(b) of the
Social Security Act (42 U.S.C. 1396d(b)) for a State for a
fiscal year (beginning with fiscal year 2006), any
significantly disproportionate employer pension contribution
described in subsection (b) shall be disregarded in computing
the per capita income of such State, but shall not be
disregarded in computing the per capita income for the
continental United States (and Alaska) and Hawaii.
(b) Significantly Disproportionate Employer Pension
Contribution.--For purposes of subsection (a), a
significantly disproportionate employer pension contribution
described in this subsection with respect to a State for a
fiscal year is an employer contribution towards pensions that
is allocated to such State for a period if the aggregate
amount so allocated exceeds 50 percent of the total increase
in personal income in that State for the period involved.
[[Page H10581]]
Subtitle B--Katrina Health Care Relief
SEC. 3201. TARGETED MEDICAID RELIEF FOR STATES AFFECTED BY
HURRICANE KATRINA.
(a) 100 Percent Federal Matching Payments for Medical
Assistance Provided in Katrina Impacted Areas.--
(1) In general.--Notwithstanding section 1905(b) of the
Social Security Act (42 U.S.C. 1396d(b)), for items and
services furnished during the period that begins on August
28, 2005, and ends on May 15, 2006, the Federal matching rate
for providing medical assistance for such items and services
under a State Medicaid plan to any individual residing in a
Katrina impacted parish or county (as defined in subsection
(c)(1)) or to a Katrina Survivor (as defined in subsection
(b)), and for costs directly attributable to all
administrative activities that relate to the provision of
such medical assistance, shall be 100 percent.
(2) Application to child health assistance.--
Notwithstanding section 2105(b) of the Social Security Act
(42 U.S.C. 1397ee(b)), for items and services furnished
during the period described in paragraph (1), the Federal
matching rate for providing child health assistance for such
items and services under a State child health plan under
title XXI of such Act in a Katrina impacted parish or county
or to a Katrina Survivor, and for costs directly attributable
to all administrative activities that relate to the provision
of such child health assistance, shall be 100 percent.
(b) Katrina Survivor.--For purposes of subsection (a), the
term ``Katrina Survivor'' means an individual who, on any day
during the week preceding August 28, 2005, had a primary
residence in a major disaster parish or county (as defined in
subsection (c)).
(c) Definitions.--For purposes of this section:
(1) Katrina impacted parish or county.--The term ``Katrina
impacted parish or county'' means any parish in the State of
Louisiana, any county in the State of Mississippi, and any
major disaster parish or county in the State of Alabama.
(2) Major disaster parish or county.--A major disaster
parish or county is a parish of the State of Louisiana or a
county of the State of Mississippi or Alabama for which a
major disaster has been declared in accordance with section
401 of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5170) as a result of Hurricane
Katrina and which the President has determined, as of
September 14, 2005, warrants individual assistance from the
Federal Government under such Act.
SEC. 3202. STATE HIGH RISK HEALTH INSURANCE POOL FUNDING.
There are hereby authorized and appropriated $90,000,000
for fiscal year 2006 for grants under subsection (b)(1) of
section 2745 of the Public Health Service Act (42 U.S.C.
300gg-45). The amount so appropriated shall be treated as if
it had been appropriated under subsection (c)(2) of such
section.
SEC. 3203. RECOMPUTATION OF HPSA, MUA, AND MUP DESIGNATIONS
WITHIN HURRICANE KATRINA AFFECTED AREAS.
(a) In General.--For purposes of the Public Health Service
Act (42 U.S.C. 201 et seq.), the Secretary of Health and
Human Services shall conduct a review of all Hurricane
Katrina disaster areas and, as appropriate taking into
account the lack of availability of health care providers and
services due to Hurricane Katrina--
(1) shall designate such areas as health professional
shortage areas or medically underserved areas; and
(2) shall designate one of more populations of each such
area as a medically underserved population.
(b) Hurricane Katrina Disaster Area Defined.--For purposes
of this section, the term ``Hurricane Katrina disaster area''
means an area for which a major disaster has been declared in
accordance with section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170)
as a result of Hurricane Katrina and which the President has
determined, before September 14, 2005, warrants individual
and public assistance from the Federal Government under such
Act.
SEC. 3204. WAIVER OF CERTAIN REQUIREMENTS APPLICABLE TO THE
PROVISION OF HEALTH CARE IN AREAS IMPACTED BY
HURRICANE KATRINA.
(a) Eligible Area.--
(1) Definition.--In this section, the term ``eligible
area'' means an area identified by the Secretary of Health
and Human Services pursuant to paragraph (2).
(2) Identification.--Not later than 30 days after the date
of the enactment of this Act, the Secretary of Health and
Human Services shall identify areas that--
(A) have been directly impacted by Hurricane Katrina; or
(B) are located in a State which has absorbed a significant
number of Hurricane Katrina evacuees.
(b) Health Centers.--For the purpose of determining whether
an entity located in an eligible area qualifies as a health
center under section 330 of the Public Health Service Act (42
U.S.C. 254b):
(1) Board composition.--
(A) Waiver.--The Secretary of Health and Human Services
shall waive any requirement that a majority of the governing
board of the entity be consumers of the entity's health care
services.
(B) Rule of construction.--This paragraph shall not be
construed as requiring the Secretary of Health and Human
Services to waive a requirement that the governing board of
the entity include representation of the consumers of the
entity's health care services.
(2) Medically underserved population.--
(A) Determination.--At the request of the entity, the
Secretary of Health and Human Services shall determine
whether, taking into consideration any change in population
associated with Hurricane Katrina, the entity serves a
medically underserved population (as that term is defined in
section 330(b)(3) of the Public Health Service Act (42 U.S.C.
254b(b)(3))).
(B) Deadline.--The Secretary of Health and Human Services
shall make a determination under subparagraph (A) not later
than 60 days after the date on which the Secretary receives
the request for the determination.
(C) Restriction.--The Secretary of Health and Human
Services shall not make any determination under this
paragraph on whether a population has ceased to qualify as a
medically underserved population under section 330 of the
Public Health Service Act (42 U.S.C. 254b).
(3) Required primary health services.--The Secretary of
Health and Human Services shall waive any requirement for the
entity to provide primary health services described in clause
(iii), (iv), or (v) of section 330(b)(1) of the Public Health
Service Act (42 U.S.C. 254b(b)(1)).
(c) National Health Service Corps.--Notwithstanding the
provisions of subpart II of part D of title III of the Public
Health Service Act (42 U.S.C. 254d et seq.) requiring that
members of the National Health Service Corps be assigned to
health professional shortage areas, the Secretary of Health
and Human Services may assign members of the National Health
Service Corps to any eligible area.
(d) Termination of Authority.--The authority vested by this
section in the Secretary of Health and Human Services and the
Secretary of Homeland Security shall terminate on the date
that is 2 years after enactment of this Act. The Secretary of
Health and Human Services may not grant any waiver under
subsection (b)(1) or (b)(3) and may not make any assignment
of personnel under subsection (c), and the Secretary of
Homeland Security may not allow any agreement under
subsection (d), for a period extending beyond such date.
SEC. 3205. FMAP HOLD HARMLESS FOR KATRINA IMPACT.
Notwithstanding any other provision of law, for purposes of
titles XIX and XXI of the Social Security Act, the Secretary
of Health and Human Services in computing the Federal medical
assistance percentage under section 1905(b) of such (42
U.S.C. 1396d(b)) for any year after 2006 for a State that the
Secretary determines has a significant number of evacuees who
were evacuated to, and live in, the State as a result of
Hurricane Katrina as of October 1, 2005, the Secretary shall
disregard such evacuees (and income attributable to such
evacuees).
Subtitle C--Katrina and Rita Energy Relief
SEC. 3301. HURRICANES KATRINA AND RITA ENERGY RELIEF.
(a) Findings.--The Congress finds the following:
(1) Hurricanes Katrina and Rita severely disrupted crude
oil and natural gas production in the Gulf of Mexico. The
Energy Information Administration estimates that as a result
of these two hurricanes, the amount of shut in crude oil
production nearly doubled to almost 1,600,000 barrels per
day, and the amount of natural gas production shut in also
doubled to about 8,000,000,000 cubic feet per day. The
hurricanes also initially shut down most of the crude oil
refinery capacity in the Gulf of Mexico region. These
disruptions led to significantly higher prices for crude oil,
refined oil products, and natural gas.
(2) These production and supply disruptions are expected to
lead to significantly higher heating costs for consumers this
winter. The Energy Information Administration projects an
increase in residential natural gas heating expenditures of
32 percent to 61 percent over last winter, with the Midwest
seeing the largest increase. Winter heating oil expenditures
are projected to increase by 30 percent to 41 percent over
last winter, again with the Midwest seeing the largest
increase. Propane expenditures for home heating are projected
to increase 20 percent to 36 percent over last winter, with
the Midwest seeing the largest projected increase.
Expenditures for home heating using electricity are expected
to increase by 2 percent to 9 percent over last winter, with
the South seeing the largest increase. Overall, average home
heating expenditures this winter are projected to increase
about 33 percent, assuming a normal winter. These significant
increases in home heating costs this winter will particularly
harm low-income consumers. The Low-Income Home Energy
Assistance Program is designed to assist these low income
consumers in this situation. Accordingly, Congress seeks a
one-time only supplement to the Low-Income Home Energy
Assistance Program fund to assist low income consumers with
the additional home heating expenditures that they will face
this winter as a result of Hurricanes Katrina and Rita.
(b) Relief.--In addition to amounts otherwise made
available, there shall be directly available to the Secretary
of Health and Human Services for a 1-time only obligation and
expenditure $1,000,000,000 for fiscal year
[[Page H10582]]
2006 for allocation under section 2604(a) through (d) of the
Low-Income Home Energy Assistance Act of 1981 (42 U.S.C.
8623(a) through (d)), for the sole purpose of providing
assistance to offset the anticipated higher energy costs
caused by Hurricane Katrina and Hurricane Rita.
(c) Sunset.--The provisions of this section shall
terminate, be null and void, and have no force and effect
whatsoever after September 30, 2006. No monies provided for
under this section shall be available after such date.
Subtitle D--Digital Television Transition
SEC. 3401. SHORT TITLE.
This subtitle may be cited as the ``Digital Television
Transition Act of 2005''.
SEC. 3402. FINDINGS.
The Congress finds the following:
(1) A loophole in current law is stalling the digital
television (DTV) transition and preventing the return of
spectrum for critical public safety and wireless broadband
uses.
(A) In 1996, to facilitate the DTV transition, Congress
gave each full-power television broadcaster an extra channel
of spectrum to broadcast in digital format while continuing
to broadcast in analog format on its original channel. Each
broadcaster was supposed to eventually return either the
original or additional channel and broadcast exclusively in
digital format on the remaining channel.
(B) In 1997, Congress earmarked for public safety use some
of the spectrum the broadcasters are supposed to return.
Congress designated the rest of the spectrum to be auctioned
for advanced commercial applications, such as wireless
broadband services. Congress set December 31, 2006, as the
deadline for broadcasters to return the spectrum for public
safety and wireless use.
(C) A loophole, however, allows broadcasters in a market to
delay the return of the spectrum until more than 85 percent
of television households in that market have at least one
television with access to digital broadcast channels using a
digital television receiver, a digital-to-analog converter
box, or cable or satellite service. Experts forecast it will
take many more years to meet the 85-percent test nationwide.
(2) Eliminating the 85-percent test and setting a ``hard
deadline'' will close the loophole, making possible the
nationwide clearing necessary to complete the DTV transition
and free the spectrum for public safety use.
(A) Some police officers, firefighters, and rescue
personnel already have equipment to communicate over the
spectrum the broadcasters are supposed to return, and are
just awaiting the turnover. Many more public safety officials
cannot purchase equipment or begin planning without a date
certain for the availability of the spectrum.
(B) Five years to the day before September 11, 2001, an
advisory committee report to the Federal Communications
Commission (FCC) noted that public safety officials
desperately needed more spectrum to better communicate with
each other in times of emergency. The 9/11 Commission has
specifically recognized the importance of clearing for public
safety use the spectrum at issue here, especially following
the terrorist attacks on the Pentagon and the World Trade
Center. The spectrum is also important for communications
during natural disasters.
(3) The certainty of a nationwide hard deadline will enable
consumers, industry, and government to take the necessary
steps to make the transition as smooth as possible.
(A) Under existing law, once a market meets the 85-percent
penetration test, the remaining 15 percent of households in
the market would lose access to broadcast programming unless
they obtain a digital television receiver, a digital-to-
analog converter box, or cable or satellite service.
(B) Determining when the 85-percent test in current law has
been met in a particular market would be extremely difficult
for the FCC to accomplish. Moreover, because no one can
predict precisely when any market will meet the 85-percent
test, and because different markets will meet the test at
different times, consumers, industry, and government cannot
adequately plan on a either a local or nationwide basis.
(C) With a hard deadline, government, industry, and
consumer groups can develop concrete plans for consumer
education. Manufacturers can build large quantities of low-
cost digital-to-analog converter boxes for consumers who wish
to continue using their analog televisions. Clearing the
spectrum on a unified, nationwide basis will also enable the
government to maximize the revenue from the auction. Some of
that revenue can be used to help make the converter boxes
available.
(D) The deadline will have little impact on most television
households. The vast majority of households already subscribe
to cable or satellite services. Allowing cable and satellite
operators to convert digital broadcasts into an analog-
viewable format will enable their subscribers that wish to
continue using analog televisions to do so.
(4) Setting a hard deadline will bring consumers and the
economy the benefits of the DTV transition faster.
(A) DTV offers sharper and wider pictures, and CD-quality
sound. Even consumers with analog televisions connected to a
converter box or cable or satellite service will receive
better service than they did before the transition.
(B) Once the transition is complete, broadcasters can
redirect the resources they currently expend running both
analog and digital stations and focus on programming that
capitalizes on the advanced features of digital
transmissions. Manufacturers can also increase the production
of televisions and other consumer electronics equipment that
takes advantage of these features, which will also drive down
prices.
(C) The cleared spectrum can be used to bring cutting-edge
wireless services to public safety officials and consumers.
This spectrum travels greater distances at lower costs, and
more easily penetrates buildings and foliage. Consequently,
it is ideal to bring mobile broadband services not only to
urban areas, but to rural areas as well, which currently have
very few cost-effective broadband options.
(D) The increase in DTV programming, services, and
equipment, and the provision of products and services that
use the cleared spectrum, will improve America's global
competitiveness and result in significant investment and
innovation, boosting our economy and fostering new jobs.
SEC. 3403. ANALOG SPECTRUM RECOVERY: HARD DEADLINE.
(a) Amendments.--Section 309(j)(14) of the Communications
Act of 1934 (47 U.S.C. 309(j)(14)) is amended--
(1) in subparagraph (A), by striking ``December 31, 2006''
and inserting ``December 31, 2008'';
(2) by striking subparagraph (B);
(3) in subparagraph (C)(i)(I), by striking ``or (B)'';
(4) in subparagraph (D), by striking ``subparagraph
(C)(i)'' and inserting ``subparagraph (B)(i)''; and
(5) by redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C), respectively.
(b) Implementation.--
(1) DTV allotment table of in-core channels for full-power
stations.--The Federal Communications Commission shall--
(A) release by December 31, 2006, a report and order in MB
Docket No. 03-15 assigning all full-power broadcast
television stations authorized in the digital television
service a channel between channels 2 and 36, inclusive, or 38
and 51, inclusive (between frequencies 54 and 698 megahertz,
inclusive);
(B) release by July 31, 2007, any reconsideration of such
report and order; and
(C) not adopt any further changes between July 31, 2007,
and January 1, 2009, to the channels assigned to full-power
broadcast television stations for the provision of digital
television service unless doing so is necessary for reasons
of public safety or necessary to prevent a delay in the end
of broadcasting by full-power stations in the analog
television service.
(2) Status reports.--Beginning with a report on January 31,
2006, and ending with a report on July 31, 2007, the
Commission shall submit reports to the Committee on Energy
and Commerce of the House of Representatives and the
Committee on Commerce, Science, and Transportation of the
Senate every six months on the status of international
coordination with Canada and Mexico of the digital television
service table of allotments.
(3) Terminations of analog licenses and broadcasting.--The
Federal Communications Commission shall take such actions as
are necessary to terminate all licenses for full-power
television stations in the analog television service and to
require the cessation of broadcasting by full-power stations
in the analog television service by January 1, 2009.
(4) Additional unlicensed spectrum for wireless
broadband.--The Commission shall, within one year after the
date of enactment of this Act, issue a final order in the
matter of Unlicensed Operation in the TV Broadcast Bands (ET
Docket No. 04-186).
(c) Technical Amendment.--Paragraph (15) of section 309(j)
of the Communications Act of 1934 (47 U.S.C. 309(j)), as
added by section 203(b) of the Commercial Spectrum
Enhancement Act (P.L. 108-494; 118 Stat. 3993), is
redesignated as paragraph (16) of such section.
SEC. 3404. AUCTION OF RECOVERED SPECTRUM.
(a) Deadline for Auction.--Section 309(j)(15)(C) of the
Communications Act of 1934 (47 U.S.C. 309(j)(15)(C)) is
amended by adding at the end the following new clauses:
``(v) Additional deadlines for recovered analog spectrum.--
Notwithstanding subparagraph (B), the Commission shall
conduct the auction of the licenses for recovered analog
spectrum by commencing the bidding not later than January 7,
2008, and shall deposit the proceeds of such auction in
accordance with paragraph (8)(E)(i) not later than June 30,
2008.
``(vi) Recovered analog spectrum.--For purposes of clause
(v), the term `recovered analog spectrum' means the spectrum
between channels 52 and 69, inclusive (between frequencies
698 and 806 megahertz, inclusive) reclaimed from analog
television service broadcasting under paragraph (14), other
than--
``(I) the spectrum required by section 337 to be made
available for public safety services; and
``(II) the spectrum auctioned prior to the date of
enactment of the Digital Television Transition Act of
2005.''.
(b) Extension of Auction Authority.--Paragraph (11) of
section 309(j) of such Act is repealed.
(c) Study of Auction Authority.--
(1) Inquiry and study required.--Within 120 days after the
date of enactment of this
[[Page H10583]]
Act, the Federal Communications Commission shall initiate an
ongoing inquiry and study--
(A) to evaluate the participation of women, minorities, and
small businesses in the auction process, including the
percentage of winning bidders that are women, minorities, and
small businesses; and
(B) to assess the efforts made by the Commission to ensure
that women, minorities, and small businesses are able to
successfully participate in the auction process.
(2) Report.--The Commission shall submit a report to the
Congress on the results of the inquiry and study required by
paragraph (1) at least biennially beginning not later than
one year after the date of enactment of this Act.
SEC. 3405. DIGITAL TELEVISION CONVERSION FUND.
(a) Reservation of Auction Proceeds to Assist Conversion.--
Section 309(j)(8) of the Communications Act of 1934 (47
U.S.C. 309(j)(8)) is amended--
(1) in subparagraph (A), by striking ``subparagraph (B) or
subparagraph (D)'' and inserting ``subparagraphs (B), (D),
and (E)'';
(2) in subparagraph (C)(i), by inserting before the
semicolon at the end the following: ``, except as otherwise
provided in subparagraph (E)(i)''; and
(3) by adding at the end the following new subparagraph:
``(E) Transfer of revenues for digital television
conversion.--
``(i) Proceeds for dtv conversion fund.--Notwithstanding
subparagraph (A), of the proceeds (including deposits and
upfront payments from successful bidders) from the use of a
competitive bidding system under this subsection with respect
to recovered analog spectrum--
``(I) $990,000,000 shall be deposited in a separate fund in
the Treasury to be known as the `Digital Television
Conversion Fund', and be available exclusively to carry out
section 159 of the National Telecommunications and
Information Administration Organization Act;
``(II) $500,000,000 shall be deposited in a separate fund
in the Treasury to be known as the `Public Safety
Interoperable Communications Fund', and be available
exclusively to carry out section 160 of such Act;
``(III) $30,000,000 shall be deposited in a separate fund
in the Treasury to be known as the `NYC 9/11 Digital
Transition Fund', and be available exclusively to carry out
section 161 of such Act;
``(IV) $3,000,000 shall be deposited in a separate fund in
the Treasury to be known as the `Low-Power Digital-to-Analog
Conversion Fund', and be available exclusively to carry out
section 162 of such Act; and
``(V) the remainder of such proceeds shall be deposited in
the Treasury in accordance with chapter 33 of title 31,
United States Code.
``(ii) Recovered analog spectrum.--For purposes of clause
(i), the term `recovered analog spectrum' has the meaning
provided in paragraph (15)(C)(vi).''.
(b) Converter Box Program.--Part C of the National
Telecommunications and Information Administration
Organization Act is amended by adding at the end the
following new section:
``SEC. 159. DIGITAL-TO-ANALOG CONVERTER BOX PROGRAM.
``(a) Creation of Program.--The Assistant Secretary--
``(1) shall use the funds available under subsection (d) of
this section to implement and administer a program through
which households in the United States may obtain, upon
request, up to two coupons that can be applied toward the
purchase of digital-to-analog converter boxes, subject to the
restrictions in this section and the regulations created
thereunder; and
``(2) may award one or more contracts (including a contract
with another Federal agency) for the administration of some
or all of the program.
``(b) Program Specifications.--
``(1) Form of coupon request.--The regulations under this
section shall prescribe the contents of the coupon request
form and the information any household seeking a coupon shall
provide on the form. The coupon request form shall be
required to include instructions for its use and also
describe, at a minimum, the requirements and limitations of
the program, the ways in which the form and the information
the household provides will be used, and to whom the form and
the information will be disclosed.
``(2) Distribution of coupon request forms.--
``(A) Paper and electronic forms.--The Assistant Secretary
shall provide for the distribution of paper coupon request
forms at Government buildings, including post offices. The
Assistant Secretary shall provide for the availability to
households of electronic coupon request forms, and may permit
such forms to be submitted electronically.
``(B) Additional distribution.--If the Assistant Secretary
determines that doing so would make the program more
successful and easier for consumers to participate in, paper
and electronic coupon request forms shall also be distributed
by such private entities as the Assistant Secretary shall
specify (such as retailers, manufacturers, broadcasters,
religious organizations, and consumer groups) and shall be
distributed in the manner specified by the Assistant
Secretary.
``(3) Limitations.--
``(A) Two-per-household maximum.--A household may obtain
coupons only by making a request as required by the
regulations under this section. Any request must be made
between January 1, 2008, and January 31, 2009, inclusive. The
Assistant Secretary shall ensure that each requesting
household receives no more than two coupons.
``(B) No combinations of coupons.--Two coupons may not be
used in combination toward the purchase of a single digital-
to-analog converter box.
``(C) Duration.--All coupons shall expire 3 months after
issuance.
``(4) Distribution of coupons.--
``(A) Coupons shall be distributed to requesting households
by mail and each coupon shall be issued in the name of a
member of the requesting household, and shall include a
unique identification number as well as any other measures
the Assistant Secretary deems necessary to minimize fraud,
counterfeiting, duplication, and other unauthorized use.
``(B) Included on or provided with each coupon shall be, at
a minimum, instructions for the coupon's use and a
description of the coupon's limitations.
``(C) The Assistant Secretary shall expend not more than
$160,000,000 on administrative expenses and shall ensure that
the sum of all administrative expenses for the program and
the total maximum value of all the coupons redeemed, and
issued but not expired, does not exceed $990,000,000.
``(D) The Assistant Secretary may expend up to $5,000,000
of the administrative expenses on the public outreach program
required by section 330(d)(4) of the Communications Act of
1934 (47 U.S.C. 330(d)(4)). Such funds may be used for grants
to the Association of Public Television Stations, in
partnership with noncommercial educational television
broadcast stations (as defined section 397(6) of the
Communications Act of 1934 (47 U.S.C. 397(6))) to carry out
such public outreach.
``(5) Qualifying purchases.--
``(A) Qualifying box.--The regulations shall specify
methods for determining and identifying the converter boxes
that meet the definition in subsection (g).
``(B) Coupon value.--The value of each coupon shall be $40.
``(6) Redemption of coupons.--No coupon shall be redeemed
except upon submission of reasonable proof that the
individual redeeming the coupon is the individual named on
the coupon, and such additional information as is required by
the regulations under this section. In the case of retail
distribution of digital-to-analog converter boxes over the
Internet or by telephone, submission of a valid credit card
number issued in the name of the household member, the unique
identification number on the coupon, the address of the
household, and such other information as is required by the
regulations under this section shall be reasonable proof of
identity, except that the redemption of coupons over the
Internet or by telephone shall be prohibited if the Assistant
Secretary determines that such redemption would be
unreasonably susceptible to fraud or other abuse.
``(7) Retailer certification.--
``(A) Any retailer desiring to qualify for coupon
reimbursement under this section shall, in accordance with
the regulations under this section, be required to undergo a
certification process to qualify for participation in the
program.
``(B) As part of the certification process, retailers shall
be informed of the program's details and their rights and
obligations, including their obligations to honor all valid
coupons that are tendered in the authorized manner, and to
keep a reasonable number of eligible converter boxes in
stock.
``(8) Coupon reimbursement and retailer auditing.--
``(A) Reimbursement.--The regulations under this section
shall establish the process by which retailers may seek and
obtain reimbursement for the coupons, and shall include the
option for retailers to seek and obtain reimbursement
electronically.
``(B) Audits.--Such regulations shall establish procedures
for the auditing of retailer reimbursements.
``(9) Appeals.--The regulations under this section shall
establish an appeals process for the review and resolution of
complaints--
``(A) by a household alleging that--
``(i) the household was improperly denied a coupon;
``(ii) a valid coupon properly tendered was not honored; or
``(iii) the household was otherwise harmed by another
violation of this section or such regulations; or
``(B) by a retailer of digital-to-analog converter boxes
alleging that the retailer was improperly denied
reimbursement for a valid coupon properly tendered and
accepted under this section or such regulations.
All such complaints shall be resolved within 30 days after
receipt of the complaint.
``(10) Enforcement.--The regulations under this section
shall provide for the termination of eligibility to
participate in the program for retailers or households that
engage in fraud, misrepresentation, or other misconduct in
connection with the program, or that otherwise violate this
section or such regulations.
``(11) Progress report.--Beginning with a report on March
31, 2008, and ending with a report on June 30, 2009, the
Assistant Secretary shall submit reports to the Committee on
Energy and Commerce of the House of Representatives and the
Committee on Commerce, Science, and Transportation of the
Senate, every three months summarizing the progress of coupon
distribution
[[Page H10584]]
and redemption, including how many coupons are being
distributed and redeemed, and how quickly.
``(c) Privacy.--The program under this section shall ensure
that personally identifiable information collected in
connection with the program under this section is not used or
shared for any other purpose than as described in this
section, except as otherwise required or authorized by law.
For purposes of this subsection, the term `personally
identifiable information' shall have the same meaning as
provided in section 338(i)(2).
``(d) Availability of Funds.--
``(1) In general.--From the Digital Television Conversion
Fund established by section 309(j)(8)(E)(i)(I) of the
Communications Act of 1934, there shall be available to carry
out this section such sums as may be necessary for fiscal
years 2008 and 2009. Any sums that remain unexpended in the
Fund at the end of fiscal year 2009 shall revert to and be
deposited in the general fund of the Treasury.
``(2) Credit.--The Assistant Secretary may borrow from the
Treasury such sums as may be necessary not to exceed
$990,000,000 to implement and administer the program in
accordance with this section. The Assistant Secretary shall
reimburse the Treasury, without interest, as funds are
deposited into the Digital Television Conversion Fund under
section 309(j)(8)(E) of such Act.
``(e) Energy Standards Required.--
``(1) Standard.--The maximum energy consumption for the
passive standby mode of a digital-to-analog converter box
shall be no more than 9 watts.
``(2) Enforcement.--The Secretary of Energy shall enforce
the requirements of paragraph (1). Any converter box that the
Secretary of Energy determines is not in compliance with the
requirements of paragraph (1) shall not be eligible for
purchase with assistance made available under this section.
``(3) Preemption.--No State or any political subdivision
thereof may establish or enforce any law, rule, regulation,
or other provision having the force of law that regulates the
energy output, usage, or consumption standards for a digital-
to-analog converter box.
``(f) Implementation.--The Secretary of Commerce shall
promulgate, within 9 months after the date of enactment of
the Digital Television Transition Act of 2005, such
regulations as are necessary to carry out this section.
``(g) Definition.--For purposes of this section:
``(1) Digital-to-analog converter box.--The term `digital-
to-analog converter box' means a stand-alone device that does
not contain features or functions except those necessary to
enable a consumer to convert any channel broadcast in the
digital television service into a format that the consumer
can display on television receivers designed to receive and
display signals only in the analog television service.
``(2) Household.--The term `household' means the residents
at a residential street or rural route address, and shall not
include a post office box.
``(3) Standby passive mode.--The term `standby passive
mode' means a low power state the digital-to-analog converter
device enters while connected to a power source which
fulfills not the main function but can be switched into
another mode by means of an internal or external signal.''.
SEC. 3406. PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS FUND.
Part C of the National Telecommunications and Information
Administration Organization Act is amended by adding after
section 159 (as added by section 3405(b) of this Act) the
following new section:
``SEC. 160. PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS FUND.
``(a) Program Authorized.--From the funds available under
subsection (f), the Assistant Secretary shall carry out a
grant program to assist public safety agencies in the
acquisition of, deployment of, or training for the use of
interoperable communications systems that utilize, or enable
interoperability with communications systems that can
utilize, reallocated public safety spectrum for radio
communications.
``(b) Terms and Conditions of Grants.--In order to obtain a
grant under this section, a public safety agency shall--
``(1) submit an application to the Assistant Secretary at
such time, in such form, and containing or accompanied by
such information and assurances as the Assistant Secretary
shall require;
``(2) agree that, if awarded a grant, the public safety
agency will submit annual reports to the Assistant Secretary
for the duration of the grant award period with respect to--
``(A) the expenditure of grant funds; and
``(B) progress toward acquiring and deploying interoperable
communications systems funded by the grant;
``(3) agree to provide, from non-Federal sources, not less
than 20 percent of the costs of acquiring and deploying the
interoperable communications systems acquired and deployed
with funds provided under this section; and
``(4) agree to remit to the Assistant Secretary any grant
funds that remain unexpended at the end of the 3-year period
of the grant.
``(c) Duration of Grant; Recovery of Unused Funds.--Grants
under this section shall be awarded in the form of a single
grant for a period of not more that 3 years. At the end of 3
years, any grant funds that remain unexpended shall be
remitted by the grantee to the Assistant Secretary, and,
subject to subsection (f)(2), may be awarded to other
eligible grant recipients. At the end of fiscal year 2010,
any such reawarded grant funds that remain unexpended shall
be remitted by the grantee to the Assistant Secretary and may
not be reawarded to other grantees.
``(d) Oversight of Expenditures.--The Assistant Secretary
shall submit to the Committee on Commerce, Science, and
Transportation of the Senate and the Committee on Energy and
Commerce, not later than 6 months after the first award of a
grant under this section and every 6 months thereafter until
October 1, 2010, a report--
``(1) identifying, on a State-by-State basis, using the
information submitted under subsection (b)(2), the results of
the program, including an identification, on a State-by-State
basis, of--
``(A) the public safety agencies awarded a grant;
``(B) the amount of the grant;
``(C) the specified use for the grant; and
``(D) how each such grant was spent; and
``(2) stating the cumulative total of the amount of grants
awarded, and the balance, if any, remaining in the Public
Safety Interoperable Communications Fund; and
``(3) in the final such report, stating the amount in the
Fund that reverted to the general fund of the Treasury.
``(e) Regulations.--The Secretary is authorized to
prescribe such regulations as are necessary to carry out this
section.
``(f) Availability of Funds.--
``(1) Availability.--From the Public Safety Interoperable
Communications Fund established by section
309(j)(8)(E)(i)(II) of the Communications Act of 1934, there
shall be available to carry out this section such sums as may
be necessary for fiscal years 2008, 2009, and 2010.
``(2) Reversion.--Any sums that remain unexpended in the
Fund at the end of fiscal year 2010 shall revert to and be
deposited in the general fund of the Treasury.
``(g) Definitions.--For purposes of this section:
``(1) Public safety agency.--The term `public safety
agency' means any State or local government entity, or
nongovernmental organization authorized by such entity, whose
sole or principal purpose is to protect the safety of life,
health, or property.
``(2) Interoperable communications systems.--The term
`interoperable communications systems' means communications
systems which enable public safety agencies to share
information amongst local, State, and Federal public safety
agencies in the same area via voice or data signals.
``(3) Reallocated public safety spectrum.--The term
`reallocated public safety spectrum' means the bands of
spectrum located at 764-776 megahertz and 794-806 megahertz,
inclusive.''.
SEC. 3407. NYC 9/11 DIGITAL TRANSITION FUND.
Part C of the National Telecommunications and Information
Administration Organization Act is amended by adding after
section 160 (as added by section 3406 of this Act) the
following new section:
``SEC. 161. NYC 9/11 DIGITAL TRANSITION FUND.
``(a) Funds Available.--From the NYC 9/11 Digital
Transition Fund established by section 309(j)(8)(E)(i)(III)
of the Communications Act of 1934, there shall be available
to carry out this section such sums as may be necessary for
fiscal years 2006 through 2008. Any sums that remain
unexpended in the Fund at the end of fiscal year 2008 shall
revert to and be deposited in the general fund of the
Treasury. The Assistant Secretary may borrow from the
Treasury such sums as may be necessary not to exceed
$30,000,000 to implement and administer the program in
accordance with this section. The Assistant Secretary shall
reimburse the Treasury, without interest, as funds are
deposited into the NYC 9/11 Digital Transition Fund under
section 309(j)(8)(E) of such Act.
``(b) Use of Funds.--The sums available under subsection
(a) shall be made available by the Assistant Secretary by
grant to be used to reimburse the Metropolitan Television
Alliance for costs incurred in the design and deployment of a
temporary digital television broadcast system to ensure that,
until a permanent facility atop the Freedom Tower is
constructed, the members of the Metropolitan Television
Alliance can provide the New York City area with an adequate
digital television signal as determined by the Federal
Communications Commission.
``(c) Rule of Construction.--Nothing in this section shall
be construed to alter or otherwise affect the Federal
Communications Commission's authority with respect to
licensing and interference regulation.
``(d) Definitions.--For purposes of this section:
``(1) The term `Metropolitan Television Alliance' means the
organization formed by New York City television broadcast
station licensees to locate new shared facilities as a result
of the attacks on September 11, 2001 and the loss of use of
shared facilities that housed broadcast equipment.
``(2) The term `New York City area' means the five counties
comprising New York City and counties of northern New Jersey
in immediate proximity to New York City (Bergen, Essex, Union
and Hudson Counties) .''.
SEC. 3408. LOW-POWER TELEVISION TRANSITION PROVISIONS.
(a) Removal and Relocation.--Section 337(e) of the
Communications Act of 1934 (47 U.S.C. 337(e)) is amended--
(1) in paragraph (1), by striking ``person who'' and
inserting ``full-power television station licensee that'';
[[Page H10585]]
(2) in paragraph (2), by striking ``746 megahertz'' and
inserting ``698 megahertz''; and
(3) by adding at the end the following new paragraph:
``(3) Continuation of low-power broadcasting.--Subject to
section 336(f) of the Communications Act (47 U.S.C. 336(f)),
a low-power television station, television translator
station, or television booster station (as defined by
Commission regulations) may operate above 698 megahertz on a
secondary basis in accordance with Commission rules,
including rules governing completion of the digital
television service transition for low-power broadcasters.''.
(b) Exemption From Deadline.--Section 309(j)(14)(A) of such
Act (47 U.S.C. 309(j)(14)(A)) is amended by by inserting
``full-power'' before ``television broadcast license''.
(c) Advanced Television Services.--Section 336(f)(4) of
such Act (47 U.S.C. 336(f)(4)) is amended by inserting ``or
other low-power station'' after ``television translator
station'' in the first sentence.
(d) Low-Power Television Digital-to-Analog Conversion.--
Part C of the National Telecommunications and Information
Administration Organization Act is amended by adding after
section 161 (as added by section 3407 of this Act) the
following new section:
``SEC. 162. LOW-POWER TELEVISION DIGITAL-TO-ANALOG
CONVERSION.
``(a) Creation of Program.--The Assistant Secretary shall
use the funds available under subsection (d) from the Low-
Power Digital-to-Analog Conversion Fund to implement and
administer a program through which each eligible low-power
television station may receive compensation toward the cost
of the purchase of a digital-to-analog conversion device that
enables it to convert the incoming digital signal of its
corresponding full-power television station to analog format
for transmission on the low-power television station's analog
channel. An eligible low-power television station may receive
such compensation only if it submits a request for such
compensation on or before December 31, 2008.
``(b) Eligible Stations.--For purposes of this section, an
eligible low-power television station shall be a low-power
television broadcast station, Class A television station,
television translator station, or television booster
station--
``(1) that is itself broadcasting exclusively in analog
format; and
``(2) that has not purchased a digital-to-analog conversion
device prior to enactment of this section.
``(c) Qualifying Devices and Amounts.--The Assistant
Secretary--
``(1) may determine the types of digital-to-analog
conversion devices for which an eligible low-power broadcast
television station may receive compensation under this
section; and
``(2) shall determine the maximum amount of compensation
such a low-power television broadcast station may receive
based on the average cost of such digital-to-analog
conversion devices during the time period such low-power
broadcast television station purchased the digital-to-analog
conversion device, but in no case shall such compensation
exceed $400.
``(d) Funds Available.--From the Low-Power Digital-to-
Analog Conversion Fund established by section
309(j)(8)(E)(i)(IV) of the Communications Act of 1934, there
shall be available to carry out this section such sums as may
be necessary for fiscal years 2008 and 2009. Any sums that
remain unexpended in such Fund at the end of fiscal year 2009
shall revert to and be deposited in the general fund of the
Treasury.''.
(e) Report and Order Required.--The Federal Communications
Commission shall, not later than December 31, 2008, issue a
report and order specifying the methods and schedule by which
the Commission will complete the digital television service
transition for low-power broadcasters.
SEC. 3409. CONSUMER EDUCATION REGARDING ANALOG TELEVISIONS.
(a) Commission Authority.--Section 303 of the
Communications Act of 1934 (47 U.S.C. 303) is amended by
adding at the end the following new subsection:
``(z) Require the consumer education measures specified in
section 330(d) in the case of apparatus designed to receive
television signals that--
``(1) are shipped in interstate commerce or manufactured in
the United States;
``(2) have an integrated display screen or are sold in a
bundle with a display screen; and
``(3) are not capable of receiving broadcast signals in the
digital television service.''.
(b) Consumer Education Requirements.--Section 330 of the
Communications Act of 1934 (47 U.S.C. 330) is amended--
(1) in subsection (d), by striking ``sections 303(s),
303(u), and 303(x)'' and inserting ``subsections (s), (u),
(x), and (z) of section 303'';
(2) by redesignating subsection (d) as subsection (e); and
(3) by inserting after subsection (c) the following new
subsection:
``(d) Consumer Education Regarding Analog Television
Receivers.--
``(1) Requirements for manufacturers.--Any manufacturer of
any apparatus described in section 303(z) shall--
``(A) place in a conspicuous place on any such apparatus
that such manufacturer ships in interstate commerce or
manufactures in the United States after 180 days after the
date of enactment of the Digital Television Transition Act of
2005, a label containing, in clear and conspicuous print, the
warning language required by paragraph (3); and
``(B) also include after 180 days after the date of
enactment of the Digital Television Transition Act of 2005,
such warning language on the outside of the retail packaging
of such apparatus, in a conspicuous place and in clear and
conspicuous print, in a manner that cannot be removed.
``(2) Requirements for retail distributors.--Any retail
distributor shall place conspicuously in the vicinity of each
apparatus described in section 303(z) that such distributor
displays for sale or rent after 45 days after the date of
enactment of the Digital Television Transition Act of 2005, a
sign containing, in clear and conspicuous print, the warning
language required by paragraph (3). In the case of a retail
distributor vending such apparatus via direct mail, catalog,
or electronic means, such as displays on the Internet, the
warning language required by such paragraph shall be
prominently displayed, in clear and conspicuous print, in the
vicinity of any language describing the product.
``(3) Warning language.--The warning language required by
this paragraph shall read as follows: `This television has
only an analog broadcast tuner. After December 31, 2008,
television broadcasters will broadcast only in digital
format. You will then need to connect this television to a
digital-to-analog converter box or cable or satellite service
if you wish to receive broadcast programming. The device, if
any, that a cable or satellite subscriber will need to
connect to an analog television will depend on the cable or
satellite service provider. The television should continue to
work as before, however, with devices such as VCRs, digital
video recorders, DVD players, and video game systems. For
more information, call the Federal Communications Commission
at 1-888-225-5322 (TTY: 1-888-835-5322) or visit the
Commission's website at: www.fcc.gov.'.
``(4) Commission and ntia outreach.--Beginning within one
month after the date of enactment of the Digital Television
Transition Act of 2005, the Commission and the National
Telecommunications and Information Administration shall
engage, either jointly or separately, in a public outreach
program, including the distribution of materials on their web
sites and in Government buildings, such as post offices, to
educate consumers regarding the digital television
transition. The Commission and the National
Telecommunications and Information Administration may seek
public comment in crafting their public outreach program, and
may seek the assistance of private entities, such as
broadcasters, manufacturers, retailers, cable and satellite
operators, and consumer groups in administering the public
outreach program. The program shall educate consumers about--
``(A) the deadline for termination of analog television
broadcasting;
``(B) the options consumers have after such termination to
continue to receive broadcast programming; and
``(C) the converter box program under section 159 of the
National Telecommunications and Information Administration
Organization Act.
``(5) Additional disclosures.--
``(A) Announcements and notices required.--From January 1,
2008, through December 31, 2008--
``(i) each television broadcaster shall air, at a minimum,
two 60-second public service announcements per day, one
during the 8 to 9 a.m. hour and one during the 8 to 9 p.m.
hour; and
``(ii) each multichannel video program distributor (as such
term is defined in section 602 of this Act) shall include a
notice in any periodic bill.
``(B) Contents of announcements and notices.--The
announcements and notices required by subparagraphs (A)(i)
and (A)(ii), respectively, shall state, at a minimum, that:
`After December 31, 2008, television broadcasters will
broadcast only in digital format. You will then no longer be
able to receive broadcast programming on analog-only
televisions unless those televisions are connected to a
digital-to-analog converter box or a cable or satellite
service. The device, if any, that a cable or satellite
subscriber will need to connect to an analog television will
depend on the cable or satellite service provider. Analog-
only televisions should continue to work as before, however,
with devices such as VCRs, digital video recorders, DVD
players, and video game systems. You may be eligible for up
to two coupons toward the purchase of up to two converter-
boxes. For more information, call the Federal Communications
Commission at 1-888-225-5322 (TTY: 1-888-835-5322) or visit
the Commission's website at: www.fcc.gov.'.
``(6) Report required.--Beginning January 31, 2006, and
ending July 31, 2008, the Commission and the National
Telecommunications and Information Administration, either
jointly or separately, shall submit reports every six months
to the Committee on Energy and Commerce of the House of
Representatives and the Committee on Commerce, Science, and
Transportation of the Senate, on the Commission's and such
Administration's consumer education efforts, as well as the
consumer education efforts of broadcasters, cable and
satellite operators, consumer electronics manufacturers,
retailers, and consumer groups. The Commission and such
Administration may solicit public comment in preparing their
reports.''.
[[Page H10586]]
(c) Preserving and Expediting Tuner Mandates.--The Federal
Communications Commission--
(1) shall, within 30 days after the date of enactment of
this Act revise the digital television reception capability
implementation schedule under section 15.117(i) of its
regulations (47 CFR 15.117(i)) to require, in the case of
television reception devices that have, or are sold in a
bundle with, display screens sized 13 to 24 inches,
inclusive, that 100 percent of all such units must include
digital television tuners effective March 1, 2007; and
(2) shall not make any other changes that extend or
otherwise delay the digital television reception capability
implementation schedule for television reception devices that
have, or are sold in a bundle with, display screens.
SEC. 3410. ADDITIONAL PROVISIONS.
(a) Digital-to-Analog Conversion.--Section 614(b) of the
Communications Act of 1934 (47 U.S.C. 534(b)) is amended by
adding at the end the following new paragraphs:
``(11) Carriage of digital formats.--
``(A) Primary video stream.--With respect to any television
station that is transmitting broadcast programming
exclusively in the digital television service in a local
market, a cable operator of a cable system in that market
shall carry the station's primary video stream and program-
related material in the digital format transmitted by that
station, without material degradation, if the licensee for
that station--
``(i) relies on this section or section 615 to obtain
carriage of the primary video stream and program-related
material on that cable system in that market; and
``(ii) permits the cable system to carry without
compensation any other programming broadcast by that station
that is carried on that system.
``(B) Multiple formats permitted.--A cable operator of a
cable system may offer the primary video stream and program-
related material of a local television station described in
subparagraph (A) in any analog or digital format or formats,
whether or not doing so requires conversion from the format
transmitted by the local television station, so long as--
``(i) the cable operator offers the primary video stream
and program-related material in the converted analog or
digital format or formats without material degradation; and
``(ii) also offers the primary video stream and program-
related material in the manner or manners required by this
paragraph.
``(C) Transitional conversions.--Notwithstanding the
requirement in subparagraph (A) to carry the primary video
stream and program-related material in the digital format
transmitted by the local television station, but subject to
the prohibition on material degradation, until January 1,
2014--
``(i) a cable operator--
``(I) shall offer the primary video stream and program-
related material in the format or formats necessary for such
stream and material to be viewable on analog and digital
televisions; and
``(II) may convert the primary video stream and program-
related material to standard-definition digital format in
lieu of offering it in the digital format transmitted by the
local television station;
``(ii) notwithstanding clause (i), a cable operator of a
cable system with an activated capacity of 550 megahertz or
less--
``(I) shall offer the primary video stream and program-
related material of the local television station described in
subparagraph (A), converted to an analog format; and
``(II) may, but shall not be required to, offer the primary
video stream and program-related material in any digital
format or formats.
``(D) Location and method of conversion.--
``(i) A cable operator of a cable system may perform any
conversion permitted or required by this paragraph at any
location, from the cable head-end to the customer premises,
inclusive.
``(ii) Notwithstanding any other provision of this Act
other than the prohibition on material degradation, a cable
operator may use switched digital video technology to
accomplish any conversion or transmission permitted or
required by this paragraph.
``(E) Conversions not treated as degradation.--Any
conversion permitted or required by this paragraph shall not,
by itself, be treated as a material degradation.
``(F) Carriage of program-related material.--The obligation
to carry program-related material under this paragraph is
effective only to the extent technically feasible.
``(G) Definition of standard-definition format.--For
purposes of this paragraph, a stream shall be in standard
definition digital format if such stream meets the criteria
for such format as specified in the standard recognized by
the Commission in section 73.682 of its rules (47 CFR 73.682)
or a successor regulation.''.
(b) Tiering.--Clause (iii) of section 623(b)(7)(A) of such
Act (47 U.S.C. 543(b)(7)(A)(iii)) is amended to read as
follows:
``(iii) Both of the following signals:
``(I) the primary video stream and program-related material
of any television broadcast station that is provided by the
cable operator to any subscriber in an analog format, and
``(II) the primary video stream and program-related
material--
``(aa) of any television broadcast station that is
transmitting exclusively in digital format, and
``(bb) that is provided by the cable operator to any
subscriber in a digital format,
but excluding a signal that is secondarily transmitted by a
satellite carrier beyond the local service area of such
station.''.
(c) Comparable Treatment of Satellite Carriers.--Section
338 of the Communications Act of 1934 (47 U.S.C. 338) is
amended--
(1) by adding at the end the following new subsection:
``(l) Specific Carriage Obligations After Digital
Transition.--
``(1) Carriage of digital formats.--With respect to any
television station that requests carriage under this section
and that is transmitting broadcast programming exclusively in
the digital television service in a local market in the
contiguous United States (hereafter in this paragraph
referred to as an eligible requesting station), a satellite
carrier carrying the digital signal of any other local
television station in that local market shall carry the
eligible requesting station's primary video stream and
program-related material, without material degradation, if
the licensee for that eligible requesting station--
``(A) relies on this section to obtain carriage of the
primary video stream and program-related material by that
satellite carrier in that market; and
``(B) permits the satellite carrier to carry without
compensation any other programming broadcast by that local
station that is carried on that system.
``(2) Formatting of primary video stream.--A satellite
carrier must offer the primary video stream and program-
related material of an eligible requesting station in the
digital format transmitted by the station if the satellite
carrier carries the primary video stream of any other local
television station in that local market in the same digital
format.
``(3) Multiple formats permitted.--A satellite carrier may
offer the primary video stream and program-related material
of an eligible requesting station in any analog or digital
format or formats, whether or not doing so requires
conversion from the format transmitted by that eligible
requesting station, so long as--
``(A) the satellite carrier offers the primary video stream
and program-related material in the converted analog or
digital format or formats without material degradation; and
``(B) also offers the primary video stream and program-
related material in the manner or manners required by this
subsection.
``(4) Transitional conversions.--Notwithstanding any
requirement in paragraphs (1) and (2) to carry the primary
video stream and program-related material in the digital
format transmitted by the local television station, but
subject to the prohibition on material degradation, until
January 1, 2014, a satellite carrier--
``(A) shall offer the primary video stream and program-
related material of any local television broadcast station
required to be carried under paragraph (1) in the format
necessary for such stream to be viewable on analog and
digital televisions; and
``(B) may convert the primary video stream and program-
related material to standard-definition format in lieu of
offering it in the digital format transmitted by the local
television station.
``(5) Location and method of conversion.--A satellite
carrier may perform any conversion permitted or required by
this subsection at any location, from the local receive
facility to the customer premises, inclusive.
``(6) Conversions not treated as degradation.--Any
conversion permitted or required by this subsection shall
not, by itself, be treated as a material degradation.
``(7) Carriage of program-related material.--The obligation
to carry program-related material under this subsection is
effective only to the extent technically feasible.
``(8) Definition of standard-definition format.--For
purposes of this subsection, a stream shall be in standard
definition digital format if such stream meets the criteria
for such format as specified in the standard recognized by
the Commission in section 73.682 of its rules (47 CFR 73.682)
or a successor regulation.'';
(2) in subsection (b)(1), by striking ``subsection (a)''
and inserting ``subsection (a) or (l)'';
(3) in subsection (c)(1), by striking ``subsection (a)(1)''
and inserting ``subsections (a)(1) and (l)''; and
(4) in subsection (c)(2), by striking ``subsection (a)''
and inserting ``subsections (a) and (l)''.
(d) Deadline.--The Federal Communications Commission shall
revise its regulations to implement the amendments made by
this section within one year after the date of enactment of
this Act.
SEC. 3411. DEPLOYMENT OF BROADBAND WIRELESS TECHNOLOGIES.
Not later than 45 days after the effective date of this
Act, the Commission shall initiate a rulemaking to assess the
necessity of rechannelizing the spectrum located between 767-
773 megahertz and 797-803 megahertz to accommodate broadband
applications. Such rulemaking shall be completed within 180
days.
SEC. 3412. SENSE OF CONGRESS.
(a) Findings.--The Congress finds the following:
(1) The wireless communications industry in the United
States is becoming increasingly concentrated: there are
currently no
[[Page H10587]]
ownership limitations on wireless companies, and the five
largest wireless carriers in the United States control nearly
90 percent of United States wireless subscribership.
(2) Over 90 percent of households receive their broadband
services through either cable or digital subscriber line
(DSL) service, and most cable and DSL providers are heavily
concentrated within their geographic markets.
(3) Under the Omnibus Budget and Reconciliation Act of
1993, Congress tasked the Federal Communications Commission
to promote economic opportunity by disseminating wireless
communications licenses among a wide variety of applicants,
including small businesses and rural telephone companies.
(4) Upcoming auctions for the returned analog broadcast
spectrum in the 700 megahertz band that will be cleared
following the transition from analog to digital broadcast
television and Advanced Wireless Services (AWS) in the 1710-
1755 megahertz and 2110-2155 megahertz bands will likely be
the last reallocation opportunities for commercial wireless
communications services and wireless broadband services in
the foreseeable future.
(5) In the near term, wireless broadband presents the most
promising opportunity to provide a third option (other than
cable modem or DSL service) for broadband Internet access for
most consumers, and the spectrum in the 700 megahertz band is
considered ``beachfront'' property by telecommunications
carriers because wireless signals at this frequency range
pass easily through buildings, trees, and other interference.
(6) The 700 megahertz band offers a historic opportunity to
provide the equivalent of a ``third wire'' into the home - an
alternative to telephone or cable broadband access that will
create new competition and incentives for new entrants,
innovation, and broader service offerings.
(b) Sense of the Congress.--It is the sense of the Congress
that the Federal Communications Commission should disseminate
wireless communications licenses consistent with the findings
in subsection (a) and do so utilizing its existing authority
under section 309(j) of the Communications Act of 1934, which
requires the Commission to promote the following objectives:
(1) the development and rapid deployment of new
technologies, products, and services for the benefit of the
public, including those residing in rural areas, without
administrative or judicial delays;
(2) promoting economic opportunity and competition and
ensuring that new and innovative technologies are readily
accessible to the American people by avoiding excessive
concentration of licenses and by disseminating licenses among
a wide variety of applicants, including small businesses and
rural telephone companies;
(3) recovery for the public of a portion of the value of
the public spectrum resource made available for commercial
use and avoidance of unjust enrichment through the methods
employed to award uses of that resource; and
(4) efficient and intensive use of the electromagnetic
spectrum.
SEC. 3413. BAND PLAN REVISION REQUIRED.
(a) Proceeding Required.--The Federal Communications
Commission shall commence a proceeding no later than June 1,
2006, to reevaluate the band plan for the auction of the
unauctioned portions of the lower 700 megahertz band
(currently designated as Blocks A, B, and E).
(b) Reconfiguration Required.--The Federal Communications
Commission shall reconfigure the band plan to license
spectrum for Block B of such portion according to Cellular
Market Areas (i.e., Metropolitan Statistical Areas (``MSAs'')
and Rural Service Areas (``RSAs'')) to facilitate the
offering of competitive wireless services by regional and
smaller wireless carriers.
TITLE IV--COMMITTEE ON FINANCIAL SERVICES
SECTION 4000. TABLE OF CONTENTS.
The table of contents for this title is as follows:
Sec. 4000. Table of contents.
Subtitle A--Deposit Insurance Reform
Sec. 4001. Short title.
Sec. 4002. Merging the BIF and SAIF.
Sec. 4003. Increase in deposit insurance coverage.
Sec. 4004. Setting assessments and repeal of special rules relating to
minimum assessments and free deposit insurance.
Sec. 4005. Replacement of fixed designated reserve ratio with reserve
range.
Sec. 4006. Requirements applicable to the risk-based assessment system.
Sec. 4007. Refunds, dividends, and credits from Deposit Insurance Fund.
Sec. 4008. Deposit Insurance Fund restoration plans.
Sec. 4009. Regulations required.
Sec. 4010. Studies of FDIC structure and expenses and certain
activities and further possible changes to deposit
insurance system.
Sec. 4011. Bi-annual FDIC survey and report on increasing the deposit
base by encouraging use of depository institutions by the
unbanked.
Sec. 4012. Technical and conforming amendments to the Federal Deposit
Insurance Act relating to the merger of the BIF and SAIF.
Sec. 4013. Other technical and conforming amendments relating to the
merger of the BIF and SAIF.
Subtitle B--FHA Asset Disposition
Sec. 4101. Short title.
Sec. 4102. Definitions.
Sec. 4103. Appropriated funds requirement for below market sales.
Sec. 4104. Up-front grants.
Subtitle A--Deposit Insurance Reform
SEC. 4001. SHORT TITLE.
This subtitle may be cited as the ``Federal Deposit
Insurance Reform Act of 2005''.
SEC. 4002. MERGING THE BIF AND SAIF.
(a) In General.--
(1) Merger.--The Bank Insurance Fund and the Savings
Association Insurance Fund shall be merged into the Deposit
Insurance Fund.
(2) Disposition of assets and liabilities.--All assets and
liabilities of the Bank Insurance Fund and the Savings
Association Insurance Fund shall be transferred to the
Deposit Insurance Fund.
(3) No separate existence.--The separate existence of the
Bank Insurance Fund and the Savings Association Insurance
Fund shall cease on the effective date of the merger thereof
under this section.
(b) Repeal of Outdated Merger Provision.--Section 2704 of
the Deposit Insurance Funds Act of 1996 (12 U.S.C. 1821 note)
is repealed.
(c) Effective Date.--This section shall take effect on the
first day of the first calendar quarter that begins after the
end of the 90-day period beginning on the date of the
enactment of this Act.
SEC. 4003. INCREASE IN DEPOSIT INSURANCE COVERAGE.
(a) In General.--Section 11(a)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(a)(1)) is amended--
(1) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) Net amount of insured deposit.--The net amount due to
any depositor at an insured depository institution shall not
exceed the standard maximum deposit insurance amount as
determined in accordance with subparagraphs (C), (D), (E) and
(F) and paragraph (3).''; and
(2) by adding at the end the following new subparagraphs:
``(E) Standard maximum deposit insurance amount defined.--
For purposes of this Act, the term `standard maximum deposit
insurance amount' means--
``(i) until the effective date of final regulations
prescribed pursuant to section 4009(a)(2) of the Federal
Deposit Insurance Reform Act of 2005, $100,000; and
``(ii) on and after such effective date, $130,000, adjusted
as provided under subparagraph (F).
``(F) Inflation adjustment.--
``(i) In general.--By April 1 of 2007, and the 1st day of
each subsequent 5-year period, the Board of Directors and the
National Credit Union Administration Board shall jointly
prescribe the amount by which the standard maximum deposit
insurance amount and the standard maximum share insurance
amount (as defined in section 207(k) of the Federal Credit
Union Act) applicable to any depositor at an insured
depository institution shall be increased by calculating the
product of--
``(I) $130,000; and
``(II) the ratio of the value of the Personal Consumption
Expenditures Chain-Type Index (or any successor index
thereto), published by the Department of Commerce, as of
December 31 of the year preceding the year in which the
adjustment is calculated under this clause, to the value of
such index as of the date this subparagraph takes effect.
``(ii) Rounding.--If the amount determined under clause
(ii) for any period is not a multiple of $10,000, the amount
so determined shall be rounded to the nearest $10,000.
``(iii) Publication and report to the congress.--Not later
than April 5 of any calendar year in which an adjustment is
required to be calculated under clause (i) to the standard
maximum deposit insurance amount and the standard maximum
share insurance amount under such clause, the Board of
Directors and the National Credit Union Administration Board
shall--
``(I) publish in the Federal Register the standard maximum
deposit insurance amount, the standard maximum share
insurance amount, and the amount of coverage under paragraph
(3)(A) and section 207(k)(3) of the Federal Credit Union Act,
as so calculated; and
``(II) jointly submit a report to the Congress containing
the amounts described in subclause (I).
``(iv) 6-month implementation period.--Unless an Act of
Congress enacted before July 1 of the calendar year in which
an adjustment is required to be calculated under clause (i)
provides otherwise, the increase in the standard maximum
deposit insurance amount and the standard maximum share
insurance amount shall take effect on January 1 of the year
immediately succeeding such calendar year.''.
(b) Coverage for Certain Employee Benefit Plan Deposits.--
Section 11(a)(1)(D) of the Federal Deposit Insurance Act (12
U.S.C. 1821(a)(1)(D)) is amended to read as follows:
``(D) Coverage for certain employee benefit plan
deposits.--
``(i) Pass-through insurance.--The Corporation shall
provide pass-through deposit insurance for the deposits of
any employee benefit plan.
[[Page H10588]]
``(ii) Prohibition on acceptance of benefit plan
deposits.--An insured depository institution that is not well
capitalized or adequately capitalized may not accept employee
benefit plan deposits.
``(iii) Definitions.--For purposes of this subparagraph,
the following definitions shall apply:
``(I) Capital standards.--The terms `well capitalized' and
`adequately capitalized' have the same meanings as in section
38.
``(II) Employee benefit plan.--The term `employee benefit
plan' has the same meaning as in paragraph (8)(B)(ii), and
includes any eligible deferred compensation plan described in
section 457 of the Internal Revenue Code of 1986.
``(III) Pass-through deposit insurance.--The term `pass-
through deposit insurance' means, with respect to an employee
benefit plan, deposit insurance coverage provided on a pro
rata basis to the participants in the plan, in accordance
with the interest of each participant.''.
(c) Doubling of Deposit Insurance for Certain Retirement
Accounts.--Section 11(a)(3)(A) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(a)(3)(A)) is amended by
striking ``$100,000'' and inserting ``2 times the standard
maximum deposit insurance amount (as determined under
paragraph (1))''.
(d) Increased Insurance Coverage for Municipal Deposits.--
Section 11(a)(2) of the Federal Deposit Insurance Act (12
U.S.C. 1821(a)(2)) is amended--
(1) in subparagraph (A)--
(A) by moving the margins of clauses (i) through (v) 4 ems
to the right;
(B) by striking, in the matter following clause (v), ``such
depositor shall'' and all that follows through the period;
and
(C) by striking the semicolon at the end of clause (v) and
inserting a period;
(2) by striking ``(2)(A) Notwithstanding'' and all that
follows through ``a depositor who is--'' and inserting the
following:
``(2) Municipal depositors.--
``(A) In general.--Notwithstanding any limitation in this
Act or in any other provision of law relating to the amount
of deposit insurance available to any 1 depositor--
``(i) a municipal depositor shall, for the purpose of
determining the amount of insured deposits under this
subsection, be deemed to be a depositor separate and distinct
from any other officer, employee, or agent of the United
States or any public unit referred to in subparagraph (E);
and
``(ii) except as provided in subparagraph (B), the deposits
of a municipal depositor shall be insured in an amount equal
to the standard maximum deposit insurance amount (as
determined under paragraph (1)).
``(B) In-state municipal depositors.--In the case of the
deposits of an in-State municipal depositor described in
clause (ii), (iii), (iv), or (v) of subparagraph (E) at an
insured depository institution, such deposits shall be
insured in an amount not to exceed the lesser of--
``(i) $2,000,000; or
``(ii) the sum of the standard maximum deposit insurance
amount and 80 percent of the amount of any deposits in excess
of the standard maximum deposit insurance amount.
``(C) Municipal deposit parity.--No State may deny to
insured depository institutions within its jurisdiction the
authority to accept deposits insured under this paragraph, or
prohibit the making of such deposits in such institutions by
any in-State municipal depositor.
``(D) In-state municipal depositor defined.--For purposes
of this paragraph, the term `in-State municipal depositor'
means a municipal depositor that is located in the same State
as the office or branch of the insured depository institution
at which the deposits of that depositor are held.
``(E) Municipal depositor.--In this paragraph, the term
`municipal depositor' means a depositor that is--'';
(3) by striking ``(B) The'' and inserting the following:
``(F) Authority to limit deposits.--The''; and
(4) by striking ``depositor referred to in subparagraph (A)
of this paragraph'' each place such term appears and
inserting ``municipal depositor''.
(e) Technical and Conforming Amendment Relating to
Insurance of Trust Funds.--Paragraphs (1) and (3) of section
7(i) of the Federal Deposit Insurance Act (12 U.S.C. 1817(i))
are each amended by striking ``$100,000'' and inserting ``the
standard maximum deposit insurance amount (as determined
under section 11(a)(1))''.
(f) Other Technical and Conforming Amendments.--
(1) Section 11(m)(6) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(m)(6)) is amended by striking ``$100,000''
and inserting ``an amount equal to the standard maximum
deposit insurance amount''.
(2) Subsection (a) of section 18 of the Federal Deposit
Insurance Act (12 U.S.C. 1828(a)) is amended to read as
follows:
``(a) Insurance Logo.--
``(1) Insured depository institutions.--
``(A) In general.--Each insured depository institution
shall display at each place of business maintained by that
institution a sign or signs relating to the insurance of the
deposits of the institution, in accordance with regulations
to be prescribed by the Corporation.
``(B) Statement to be included.--Each sign required under
subparagraph (A) shall include a statement that insured
deposits are backed by the full faith and credit of the
United States Government.
``(2) Regulations.--The Corporation shall prescribe
regulations to carry out this subsection, including
regulations governing the substance of signs required by
paragraph (1) and the manner of display or use of such signs.
``(3) Penalties.--For each day that an insured depository
institution continues to violate this subsection or any
regulation issued under this subsection, it shall be subject
to a penalty of not more than $100, which the Corporation may
recover for its use.''.
(3) Section 43(d) of the Federal Deposit Insurance Act (12
U.S.C. 1831t(d)) is amended by striking ``$100,000'' and
inserting ``an amount equal to the standard maximum deposit
insurance amount''.
(4) Section 6 of the International Banking Act of 1978 (12
U.S.C. 3104) is amended--
(A) by striking ``$100,000'' each place such term appears
and inserting ``an amount equal to the standard maximum
deposit insurance amount''; and
(B) by adding at the end the following new subsection:
``(e) Standard Maximum Deposit Insurance Amount Defined.--
For purposes of this section, the term `standard maximum
deposit insurance amount' means the amount of the maximum
amount of deposit insurance as determined under section
11(a)(1) of the Federal Deposit Insurance Act.''.
(g) Conforming Change to Credit Union Share Insurance
Fund.--
(1) In general.--Section 207(k) of the Federal Credit Union
Act (12 U.S.C. 1787(k)) is amended--
(A) by striking ``(k)(1)'' and all that follows through the
end of paragraph (1) and inserting the following:
``(k) Insured Amounts Payable.--
``(1) Net insured amount.--
``(A) In general.--Subject to the provisions of paragraph
(2), the net amount of share insurance payable to any member
at an insured credit union shall not exceed the total amount
of the shares or deposits in the name of the member (after
deducting offsets), less any part thereof which is in excess
of the standard maximum share insurance amount, as determined
in accordance with this paragraph and paragraphs (5) and (6),
and consistently with actions taken by the Federal Deposit
Insurance Corporation under section 11(a) of the Federal
Deposit Insurance Act.
``(B) Aggregation.--Determination of the net amount of
share insurance under subparagraph (A), shall be in
accordance with such regulations as the Board may prescribe,
and, in determining the amount payable to any member, there
shall be added together all accounts in the credit union
maintained by that member for that member's own benefit,
either in the member's own name or in the names of others.
``(C) Authority to define the extent of coverage.--The
Board may define, with such classifications and exceptions as
it may prescribe, the extent of the share insurance coverage
provided for member accounts, including member accounts in
the name of a minor, in trust, or in joint tenancy.'';
(B) in paragraph (2)--
(i) in subparagraph (A)--
(I) in clauses (i) through (v), by moving the margins 4 ems
to the right;
(II) in the matter following clause (v), by striking ``his
account'' and all that follows through the period; and
(III) by striking the semicolon at the end of clause (v)
and inserting a period;
(ii) by striking ``(2)(A) Notwithstanding'' and all that
follows through ``a depositor or member who is--'' and
inserting the following:
``(2) Municipal depositors or members.--
``(A) In general.--Notwithstanding any limitation in this
Act or in any other provision of law relating to the amount
of insurance available to any 1 depositor or member, deposits
or shares of a municipal depositor or member shall be insured
in an amount equal to the standard maximum share insurance
amount (as determined under paragraph (5)), except as
provided in subparagraph (B).
``(B) In-state municipal depositors.--In the case of the
deposits of an in-State municipal depositor described in
clause (ii), (iii), (iv), or (v) of subparagraph (E) at an
insured credit union, such deposits shall be insured in an
amount equal to the lesser of--
``(i) $2,000,000; or
``(ii) the sum of the standard maximum deposit insurance
amount and 80 percent of the amount of any deposits in excess
of the standard maximum deposit insurance amount.
``(C) Rule of construction.--No provision of this paragraph
shall be construed as authorizing an insured credit union to
accept the deposits of a municipal depositor in an amount
greater than such credit union is authorized to accept under
any other provision of Federal or State law.
``(D) In-state municipal depositor defined.--For purposes
of this paragraph, the term `in-State municipal depositor'
means a municipal depositor that is located in the same State
as the office or branch of the insured credit union at which
the deposits of that depositor are held.
``(E) Municipal depositor.--In this paragraph, the term
`municipal depositor' means a depositor that is--'';
(iii) by striking ``(B) The'' and inserting the following:
``(F) Authority to limit deposits.--The''; and
[[Page H10589]]
(iv) by striking ``depositor or member referred to in
subparagraph (A)'' and inserting ``municipal depositor or
member''; and
(C) by adding at the end the following new paragraphs:
``(4) Coverage for certain employee benefit plan
deposits.--
``(A) Pass-through insurance.--The Administration shall
provide pass-through share insurance for the deposits or
shares of any employee benefit plan.
``(B) Prohibition on acceptance of deposits.--An insured
credit union that is not well capitalized or adequately
capitalized may not accept employee benefit plan deposits.
``(C) Definitions.--For purposes of this paragraph, the
following definitions shall apply:
``(i) Capital standards.--The terms `well capitalized' and
`adequately capitalized' have the same meanings as in section
216(c).
``(ii) Employee benefit plan.--The term `employee benefit
plan'--
``(I) has the meaning given to such term in section 3(3) of
the Employee Retirement Income Security Act of 1974;
``(II) includes any plan described in section 401(d) of the
Internal Revenue Code of 1986; and
``(III) includes any eligible deferred compensation plan
described in section 457 of the Internal Revenue Code of
1986.
``(iii) Pass-through share insurance.--The term `pass-
through share insurance' means, with respect to an employee
benefit plan, insurance coverage provided on a pro rata basis
to the participants in the plan, in accordance with the
interest of each participant.
``(D) Rule of construction.--No provision of this paragraph
shall be construed as authorizing an insured credit union to
accept the deposits of an employee benefit plan in an amount
greater than such credit union is authorized to accept under
any other provision of Federal or State law.
``(5) Standard maximum share insurance amount defined.--For
purposes of this Act, the term `standard maximum share
insurance amount' means--
``(A) until the effective date of final regulations
prescribed pursuant to section 4009(a)(2) of the Federal
Deposit Insurance Reform Act of 2005, $100,000; and
``(B) on and after such effective date, $130,000, adjusted
as provided under section 11(a)(1)(F) of the Federal Deposit
Insurance Act.''.
(2) Doubling of share insurance for certain retirement
accounts.--Section 207(k)(3) of the Federal Credit Union Act
(12 U.S.C. 1787(k)(3)) is amended by striking ``$100,000''
and inserting ``2 times the standard maximum share insurance
amount (as determined under paragraph (1))''.
(h) Effective Date.--This section and the amendments made
by this section shall take effect on the date the final
regulations required under section 4009(a)(2) take effect.
SEC. 4004. SETTING ASSESSMENTS AND REPEAL OF SPECIAL RULES
RELATING TO MINIMUM ASSESSMENTS AND FREE
DEPOSIT INSURANCE.
(a) Setting Assessments.--Section 7(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
(1) by striking subparagraphs (A) and (B) and inserting the
following new subparagraphs:
``(A) In general.--The Board of Directors shall set
assessments for insured depository institutions in such
amounts as the Board of Directors may determine to be
necessary or appropriate, subject to subparagraph (D).
``(B) Factors to be considered.--In setting assessments
under subparagraph (A), the Board of Directors shall consider
the following factors:
``(i) The estimated operating expenses of the Deposit
Insurance Fund.
``(ii) The estimated case resolution expenses and income of
the Deposit Insurance Fund.
``(iii) The projected effects of the payment of assessments
on the capital and earnings of insured depository
institutions.
``(iv) the risk factors and other factors taken into
account pursuant to paragraph (1) under the risk-based
assessment system, including the requirement under such
paragraph to maintain a risk-based system.
``(v) Any other factors the Board of Directors may
determine to be appropriate.''; and
(2) by inserting after subparagraph (C) the following new
subparagraph:
``(D) Base rate for assessments.--
``(i) In general.--In setting assessment rates pursuant to
subparagraph (A), the Board of Directors shall establish a
base rate of not more than 1 basis point (exclusive of any
credit or dividend) for those insured depository institutions
in the lowest-risk category under the risk-based assessment
system established pursuant to paragraph (1). No insured
depository institution shall be barred from the lowest-risk
category solely because of size.
``(ii) Suspension.--Clause (i) shall not apply during any
period in which the reserve ratio of the Deposit Insurance
Fund is less than the amount which is equal to 1.15 percent
of the aggregate estimated insured deposits.''.
(b) Assessment Recordkeeping Period Shortened.--Paragraph
(5) of section 7(b) of the Federal Deposit Insurance Act (12
U.S.C. 1817(b)) is amended to read as follows:
``(5) Depository institution required to maintain
assessment-related records.--Each insured depository
institution shall maintain all records that the Corporation
may require for verifying the correctness of any assessment
on the insured depository institution under this subsection
until the later of--
``(A) the end of the 3-year period beginning on the due
date of the assessment; or
``(B) in the case of a dispute between the insured
depository institution and the Corporation with respect to
such assessment, the date of a final determination of any
such dispute.''.
(c) Increase in Fees for Late Assessment Payments.--
Subsection (h) of section 18 of the Federal Deposit Insurance
Act (12 U.S.C. 1828(h)) is amended to read as follows:
``(h) Penalty for Failure to Timely Pay Assessments.--
``(1) In general.--Subject to paragraph (3), any insured
depository institution which fails or refuses to pay any
assessment shall be subject to a penalty in an amount not
more than 1 percent of the amount of the assessment due for
each day that such violation continues.
``(2) Exception in case of dispute.--Paragraph (1) shall
not apply if--
``(A) the failure to pay an assessment is due to a dispute
between the insured depository institution and the
Corporation over the amount of such assessment; and
``(B) the insured depository institution deposits security
satisfactory to the Corporation for payment upon final
determination of the issue.
``(3) Special rule for small assessment amounts.--If the
amount of the assessment which an insured depository
institution fails or refuses to pay is less than $10,000 at
the time of such failure or refusal, the amount of any
penalty to which such institution is subject under paragraph
(1) shall not exceed $100 for each day that such violation
continues.
``(4) Authority to modify or remit penalty.--The
Corporation, in the sole discretion of the Corporation, may
compromise, modify or remit any penalty which the Corporation
may assess or has already assessed under paragraph (1) upon a
finding that good cause prevented the timely payment of an
assessment.''.
(d) Assessments for Lifeline Accounts.--
(1) In general.--Section 232 of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (12 U.S.C.
1834) is amended by striking subsection (c).
(2) Clarification of rate applicable to deposits
attributable to lifeline accounts.--Section 7(b)(2)(H) of the
Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(H)) is
amended by striking ``at a rate determined in accordance with
such Act'' and inserting ``at \1/2\ the assessment rate
otherwise applicable for such insured depository
institution''.
(3) Regulations.--Section 232(a)(1) of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (12 U.S.C.
1834(a)(1)) is amended by striking ``Board of Governors of
the Federal Reserve System, and the''.
(e) Technical and Conforming Amendments.--
(1) Paragraph (3) of section 7(a) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(a)(3)) is amended by striking
the 3d sentence and inserting the following: ``Such reports
of condition shall be the basis for the certified statements
to be filed pursuant to subsection (c).''.
(2) Subparagraphs (B)(ii) and (C) of section 7(b)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1817(b)(1)) are each
amended by striking ``semiannual'' where such term appears in
each such subparagraph.
(3) Section 7(b)(2) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(b)(2)) is amended--
(A) by striking subparagraphs (E), (F), and (G);
(B) in subparagraph (C), by striking ``semiannual''; and
(C) by redesignating subparagraph (H) (as amended by
subsection (e)(2) of this section) as subparagraph (E).
(4) Section 7(b) of the Federal Deposit Insurance Act (12
U.S.C. 1817(b)) is amended by striking paragraph (4) and
redesignating paragraphs (5) (as amended by subsection (b) of
this section), (6), and (7) as paragraphs (4), (5), and (6)
respectively.
(5) Section 7(c) of the Federal Deposit Insurance Act (12
U.S.C. 1817(c)) is amended--
(A) in paragraph (1)(A), by striking ``semiannual'';
(B) in paragraph (2)(A), by striking ``semiannual''; and
(C) in paragraph (3), by striking ``semiannual period'' and
inserting ``initial assessment period''.
(6) Section 8(p) of the Federal Deposit Insurance Act (12
U.S.C. 1818(p)) is amended by striking ``semiannual''.
(7) Section 8(q) of the Federal Deposit Insurance Act (12
U.S.C. 1818(q)) is amended by striking ``semiannual period''
and inserting ``assessment period''.
(8) Section 13(c)(4)(G)(ii)(II) of the Federal Deposit
Insurance Act (12 U.S.C. 1823(c)(4)(G)(ii)(II)) is amended by
striking ``semiannual period'' and inserting ``assessment
period''.
(9) Section 232(a) of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 1834(a)) is
amended--
(A) in the matter preceding subparagraph (A) of paragraph
(2), by striking ``the Board and'';
(B) in subparagraph (J) of paragraph (2), by striking ``the
Board'' and inserting ``the Corporation'';
(C) by striking subparagraph (A) of paragraph (3) and
inserting the following new subparagraph:
[[Page H10590]]
``(A) Corporation.--The term `Corporation' means the
Federal Deposit Insurance Corporation.''; and
(D) in subparagraph (C) of paragraph (3), by striking
``Board'' and inserting ``Corporation''.
(f) Effective Date.--This section and the amendments made
by this section shall take effect on the date that the final
regulations required under section 4009(a)(5) take effect.
SEC. 4005. REPLACEMENT OF FIXED DESIGNATED RESERVE RATIO WITH
RESERVE RANGE.
(a) In General.--Section 7(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(b)(3)) is amended to read as
follows:
``(3) Designated reserve ratio.--
``(A) Establishment.--
``(i) In general.--The Board of Directors shall designate,
by regulation after notice and opportunity for comment, the
reserve ratio applicable with respect to the Deposit
Insurance Fund.
``(ii) Not less than annual redetermination.--A
determination under clause (i) shall be made by the Board of
Directors at least before the beginning of each calendar
year, for such calendar year, and at such other times as the
Board of Directors may determine to be appropriate.
``(B) Range.--The reserve ratio designated by the Board of
Directors for any year--
``(i) may not exceed 1.4 percent of estimated insured
deposits; and
``(ii) may not be less than 1.15 percent of estimated
insured deposits.
``(C) Factors.--In designating a reserve ratio for any
year, the Board of Directors shall--
``(i) take into account the risk of losses to the Deposit
Insurance Fund in such year and future years, including
historic experience and potential and estimated losses from
insured depository institutions;
``(ii) take into account economic conditions generally
affecting insured depository institutions so as to allow the
designated reserve ratio to increase during more favorable
economic conditions and to decrease during less favorable
economic conditions, notwithstanding the increased risks of
loss that may exist during such less favorable conditions, as
determined to be appropriate by the Board of Directors;
``(iii) seek to prevent sharp swings in the assessment
rates for insured depository institutions; and
``(iv) take into account such other factors as the Board of
Directors may determine to be appropriate, consistent with
the requirements of this subparagraph.
``(D) Publication of proposed change in ratio.--In
soliciting comment on any proposed change in the designated
reserve ratio in accordance with subparagraph (A), the Board
of Directors shall include in the published proposal a
thorough analysis of the data and projections on which the
proposal is based.''.
(b) Technical and Conforming Amendment.--Section 3(y) of
the Federal Deposit Insurance Act (12 U.S.C. 1813(y)) is
amended--
(1) by striking ``(y) The term'' and inserting(y)
Definitions Relating to Deposit Insurance Fund.--
``(1) Deposit insurance fund.--The term''; and
(2) by inserting after paragraph (1) (as so designated by
paragraph (1) of this subsection) the following new
paragraph:
``(2) Designated reserve ratio.--The term `designated
reserve ratio' means the reserve ratio designated by the
Board of Directors in accordance with section 7(b)(3).''.
(c) Effective Date.--This section and the amendments made
by this section shall take effect on the date that the final
regulations required under section 4009(a)(1) take effect.
SEC. 4006. REQUIREMENTS APPLICABLE TO THE RISK-BASED
ASSESSMENT SYSTEM.
Section 7(b)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1817(b)(1)) is amended by adding at the end the
following new subparagraphs:
``(E) Information concerning risk of loss and economic
conditions.--
``(i) Sources of information.--For purposes of determining
risk of losses at insured depository institutions and
economic conditions generally affecting depository
institutions, the Corporation shall collect information, as
appropriate, from all sources the Board of Directors
considers appropriate, such as reports of condition,
inspection reports, and other information from all Federal
banking agencies, any information available from State bank
supervisors, State insurance and securities regulators, the
Securities and Exchange Commission (including information
described in section 35), the Secretary of the Treasury, the
Commodity Futures Trading Commission, the Farm Credit
Administration, the Federal Trade Commission, any Federal
reserve bank or Federal home loan bank, and other regulators
of financial institutions, and any information available from
credit rating entities, and other private economic or
business analysts.
``(ii) Consultation with federal banking agencies.--
``(I) In general.--Except as provided in subclause (II), in
assessing the risk of loss to the Deposit Insurance Fund with
respect to any insured depository institution, the
Corporation shall consult with the appropriate Federal
banking agency of such institution.
``(II) Treatment on aggregate basis.--In the case of
insured depository institutions that are well capitalized (as
defined in section 38) and, in the most recent examination,
were found to be well managed, the consultation under
subclause (I) concerning the assessment of the risk of loss
posed by such institutions may be made on an aggregate basis.
``(iii) Rule of construction.--No provision of this
paragraph shall be construed as providing any new authority
for the Corporation to require submission of information by
insured depository institutions to the Corporation.
``(F) Modifications to the risk-based assessment system
allowed only after notice and comment.--In revising or
modifying the risk-based assessment system at any time after
the date of the enactment of the Federal Deposit Insurance
Reform Act of 2005, the Board of Directors may implement such
revisions or modification in final form only after notice and
opportunity for comment.''.
SEC. 4007. REFUNDS, DIVIDENDS, AND CREDITS FROM DEPOSIT
INSURANCE FUND.
(a) In General.--Subsection (e) of section 7 of the Federal
Deposit Insurance Act (12 U.S.C. 1817(e)) is amended to read
as follows:
``(e) Refunds, Dividends, and Credits.--
``(1) Refunds of overpayments.--In the case of any payment
of an assessment by an insured depository institution in
excess of the amount due to the Corporation, the Corporation
may--
``(A) refund the amount of the excess payment to the
insured depository institution; or
``(B) credit such excess amount toward the payment of
subsequent assessments until such credit is exhausted.
``(2) Dividends from excess amounts in deposit insurance
fund.--
``(A) Reserve ratio in excess of 1.4 percent of estimated
insured deposits.--Whenever the reserve ratio of the Deposit
Insurance Fund exceeds 1.4 percent of estimated insured
deposits, the Corporation shall declare the amount in the
Fund in excess of the amount required to maintain the reserve
ratio at 1.4 percent of estimated insured deposits, as
dividends to be paid to insured depository institutions.
``(B) Reserve ratio equal to or in excess of 1.35 percent
of estimated insured deposits and not more than 1.4
percent.--Whenever the reserve ratio of the Deposit Insurance
Fund equals or exceeds 1.35 percent of estimated insured
deposits and is not more than 1.4 percent of such deposits,
the Corporation shall declare the amount in the Fund that is
equal to 50 percent of the amount in excess of the amount
required to maintain the reserve ratio at 1.35 percent of the
estimated insured deposits as dividends to be paid to insured
depository institutions.
``(C) Basis for distribution of dividends.--
``(i) In general.--Solely for the purposes of dividend
distribution under this paragraph and credit distribution
under paragraph (3)(B), the Corporation shall determine each
insured depository institution's relative contribution to the
Deposit Insurance Fund (or any predecessor deposit insurance
fund) for calculating such institution's share of any
dividend or credit declared under this paragraph or paragraph
(3)(B), taking into account the factors described in clause
(ii).
``(ii) Factors for distribution.--In implementing this
paragraph and paragraph (3)(B) in accordance with
regulations, the Corporation shall take into account the
following factors:
``(I) The ratio of the assessment base of an insured
depository institution (including any predecessor) on
December 31, 1996, to the assessment base of all eligible
insured depository institutions on that date.
``(II) The total amount of assessments paid on or after
January 1, 1997, by an insured depository institution
(including any predecessor) to the Deposit Insurance Fund
(and any predecessor deposit insurance fund).
``(III) That portion of assessments paid by an insured
depository institution (including any predecessor) that
reflects higher levels of risk assumed by such institution.
``(IV) Such other factors as the Corporation may determine
to be appropriate.
``(D) Notice and opportunity for comment.--The Corporation
shall prescribe by regulation, after notice and opportunity
for comment, the method for the calculation, declaration, and
payment of dividends under this paragraph.
``(3) Credit pool.--
``(A) One-time credit based on total assessment base at
year-end 1996.--
``(i) In general.--Before the end of the 270-day period
beginning on the date of the enactment of the Federal Deposit
Insurance Reform Act of 2005, the Board of Directors shall,
by regulation, provide for a credit to each eligible insured
depository institution, based on the assessment base of the
institution (including any predecessor institution) on
December 31, 1996, as compared to the combined aggregate
assessment base of all eligible insured depository
institutions, taking into account such factors as the Board
of Directors may determine to be appropriate.
``(ii) Credit limit.--The aggregate amount of credits
available under clause (i) to all eligible insured depository
institutions shall equal the amount that the Corporation
could collect if the Corporation imposed an assessment of 12
basis points on the combined assessment base of the Bank
Insurance Fund and the Savings Association Insurance Fund as
of December 31, 2001.
[[Page H10591]]
``(iii) Eligible insured depository institution defined.--
For purposes of this paragraph, the term `eligible insured
depository institution' means any insured depository
institution that--
``(I) was in existence on December 31, 1996, and paid a
deposit insurance assessment prior to that date; or
``(II) is a successor to any insured depository institution
described in subclause (I).
``(iv) Application of credits.--
``(I) In general.--The amount of a credit to any eligible
insured depository institution under this paragraph shall be
applied by the Corporation, subject to subsection (b)(3)(E),
to the assessments imposed on such institution under
subsection (b) that become due for assessment periods
beginning after the effective date of regulations prescribed
under clause (i).
``(II) Regulations.--The regulations prescribed under
clause (i) shall establish the qualifications and procedures
governing the application of assessment credits pursuant to
subclause (I).
``(v) Limitation on amount of credit for certain depository
institutions.--In the case of an insured depository
institution that exhibits financial, operational, or
compliance weaknesses ranging from moderately severe to
unsatisfactory, or is not adequately capitalized (as defined
in section 38) at the beginning of an assessment period, the
amount of any credit allowed under this paragraph against the
assessment on that depository institution for such period may
not exceed the amount calculated by applying to that
depository institution the average assessment rate on all
insured depository institutions for such assessment period.
``(vi) Predecessor defined.--For purposes of this
paragraph, the term `predecessor', when used with respect to
any insured depository institution, includes any other
insured depository institution acquired by or merged with
such insured depository institution.
``(B) On-going credit pool.--
``(i) In general.--In addition to the credit provided
pursuant to subparagraph (A) and subject to the limitation
contained in clause (v) of such subparagraph, the Corporation
shall, by regulation, establish an on-going system of credits
to be applied against future assessments under subsection
(b)(1) on the same basis as the dividends provided under
paragraph (2)(C).
``(ii) Limitation on credits under certain circumstances.--
No credits may be awarded by the Corporation under this
subparagraph during any period in which--
``(I) the reserve ratio of the Deposit Insurance Fund is
less than the designated reserve ratio of such Fund; or
``(II) the reserve ratio of the Fund is less than 1.25
percent of the amount of estimated insured deposits.
``(iii) Criteria for determination.--In determining the
amounts of any assessment credits under this subparagraph,
the Board of Directors shall take into account the factors
for designating the reserve ratio under subsection (b)(3) and
the factors for setting assessments under subsection
(b)(2)(B).
``(4) Administrative review.--
``(A) In general.--The regulations prescribed under
paragraph (2)(D) and subparagraphs (A) and (B) of paragraph
(3) shall include provisions allowing an insured depository
institution a reasonable opportunity to challenge
administratively the amount of the credit or dividend
determined under paragraph (2) or (3) for such institution.
``(B) Administrative review.--Any review under subparagraph
(A) of any determination of the Corporation under paragraph
(2) or (3) shall be final and not subject to judicial
review.''.
(b) Definition of Reserve Ratio.--Section 3(y) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(y)) (as amended
by section 4005(b) of this subtitle) is amended by adding at
the end the following new paragraph:
``(3) Reserve ratio.--The term `reserve ratio', when used
with regard to the Deposit Insurance Fund other than in
connection with a reference to the designated reserve ratio,
means the ratio of the net worth of the Deposit Insurance
Fund to the value of the aggregate estimated insured
deposits.''.
SEC. 4008. DEPOSIT INSURANCE FUND RESTORATION PLANS.
Section 7(b)(3) of the Federal Deposit Insurance Act (12
U.S.C. 1817(b)(3)) (as amended by section 4005(a) of this
subtitle) is amended by adding at the end the following new
subparagraph:
``(E) Dif restoration plans.--
``(i) In general.--Whenever--
``(I) the Corporation projects that the reserve ratio of
the Deposit Insurance Fund will, within 6 months of such
determination, fall below the minimum amount specified in
subparagraph (B)(ii) for the designated reserve ratio; or
``(II) the reserve ratio of the Deposit Insurance Fund
actually falls below the minimum amount specified in
subparagraph (B)(ii) for the designated reserve ratio without
any determination under subclause (I) having been made,
the Corporation shall establish and implement a Deposit
Insurance Fund restoration plan within 90 days that meets the
requirements of clause (ii) and such other conditions as the
Corporation determines to be appropriate.
``(ii) Requirements of restoration plan.--A Deposit
Insurance Fund restoration plan meets the requirements of
this clause if the plan provides that the reserve ratio of
the Fund will meet or exceed the minimum amount specified in
subparagraph (B)(ii) for the designated reserve ratio before
the end of the 10-year period beginning upon the
implementation of the plan.
``(iii) Restriction on assessment credits.--As part of any
restoration plan under this subparagraph, the Corporation may
elect to restrict the application of assessment credits
provided under subsection (e)(3) for any period that the plan
is in effect.
``(iv) Limitation on restriction.--Notwithstanding clause
(iii), while any restoration plan under this subparagraph is
in effect, the Corporation shall apply credits provided to an
insured depository institution under subsection (e)(3)
against any assessment imposed on the institution for any
assessment period in an amount equal to the lesser of--
``(I) the amount of the assessment; or
``(II) the amount equal to 3 basis points of the
institution's assessment base.
``(v) Transparency.--Not more than 30 days after the
Corporation establishes and implements a restoration plan
under clause (i), the Corporation shall publish in the
Federal Register a detailed analysis of the factors
considered and the basis for the actions taken with regard to
the plan.''.
SEC. 4009. REGULATIONS REQUIRED.
(a) In General.--Not later than 270 days after the date of
the enactment of this Act, the Board of Directors of the
Federal Deposit Insurance Corporation shall prescribe final
regulations, after notice and opportunity for comment--
(1) designating the reserve ratio for the Deposit Insurance
Fund in accordance with section 7(b)(3) of the Federal
Deposit Insurance Act (as amended by section 4005 of this
subtitle);
(2) implementing increases in deposit insurance coverage in
accordance with the amendments made by section 4003 of this
subtitle;
(3) implementing the dividend requirement under section
7(e)(2) of the Federal Deposit Insurance Act (as amended by
section 4007 of this subtitle);
(4) implementing the 1-time assessment credit to certain
insured depository institutions in accordance with section
7(e)(3) of the Federal Deposit Insurance Act, as amended by
section 4007 of this subtitle, including the qualifications
and procedures under which the Corporation would apply
assessment credits; and
(5) providing for assessments under section 7(b) of the
Federal Deposit Insurance Act, as amended by this subtitle.
(b) Rule of Construction.--No provision of this subtitle or
any amendment made by this subtitle shall be construed as
affecting the authority of the Corporation to set or collect
deposit insurance assessments before the effective date of
the final regulations prescribed under subsection (a).
SEC. 4010. STUDIES OF FDIC STRUCTURE AND EXPENSES AND CERTAIN
ACTIVITIES AND FURTHER POSSIBLE CHANGES TO
DEPOSIT INSURANCE SYSTEM.
(a) Study by Comptroller General.--
(1) Study required.--The Comptroller General shall conduct
a study of the following issues:
(A) The efficiency and effectiveness of the administration
of the prompt corrective action program under section 38 of
the Federal Deposit Insurance Act by the Federal banking
agencies (as defined in section 3 of such Act), including the
degree of effectiveness of such agencies in identifying
troubled depository institutions and taking effective action
with respect to such institutions, and the degree of accuracy
of the risk assessments made by the Corporation.
(B) The appropriateness of the organizational structure of
the Federal Deposit Insurance Corporation for the mission of
the Corporation taking into account--
(i) the current size and complexity of the business of
insured depository institutions (as such term is defined in
section 3 of the Federal Deposit Insurance Act);
(ii) the extent to which the organizational structure
contributes to or reduces operational inefficiencies that
increase operational costs; and
(iii) the effectiveness of internal controls.
(2) Report to the congress.--The Comptroller General shall
submit a report to the Congress before the end of the 1-year
period beginning on the date of the enactment of this Act
containing the findings and conclusions of the Comptroller
General with respect to the study required under paragraph
(1) together with such recommendations for legislative or
administrative action as the Comptroller General may
determine to be appropriate.
(b) Study of Further Possible Changes to Deposit Insurance
System.--
(1) Study required.--The Board of Directors of the Federal
Deposit Insurance Corporation and the National Credit Union
Administration Board shall each conduct a study of the
following:
(A) The feasibility of establishing a voluntary deposit
insurance system for deposits in excess of the maximum amount
of deposit insurance for any depositor and the potential
benefits and the potential adverse consequences that may
result from the establishment of any such system.
(B) The feasibility of privatizing all deposit insurance at
insured depository institutions and insured credit unions.
(2) Report.--Before the end of the 1-year period beginning
on the date of the enactment of this Act, the Board of
Directors of the Federal Deposit Insurance Corporation
[[Page H10592]]
and the National Credit Union Administration Board shall each
submit a report to the Congress on the study required under
paragraph (1) containing the findings and conclusions of the
reporting agency together with such recommendations for
legislative or administrative changes as the agency may
determine to be appropriate.
(c) Study Regarding Appropriate Deposit Base in Designating
Reserve Ratio.--
(1) Study required.--The Federal Deposit Insurance
Corporation shall conduct a study of the feasibility of using
actual domestic deposits rather than estimated insured
deposits in calculating the reserve ratio of the Deposit
Insurance Fund and designating a reserve ratio for such Fund.
(2) Report.--The Federal Deposit Insurance Corporation
shall submit a report to the Congress before the end of the
1-year period beginning on the date of the enactment of this
Act containing the findings and conclusions of the
Corporation with respect to the study required under
paragraph (1) together with such recommendations for
legislative or administrative action as the Board of
Directors of the Corporation may determine to be appropriate.
(d) Study of Reserve Methodology and Accounting for Loss.--
(1) Study required.--The Federal Deposit Insurance
Corporation shall conduct a study of the reserve methodology
and loss accounting used by the Corporation during the period
beginning on January 1, 1992, and ending December 31, 2004,
with respect to insured depository institutions in a troubled
condition (as defined in the regulations prescribed pursuant
to section 32(f) of the Federal Deposit Insurance Act). The
Corporation shall obtain comments on the design of the study
from the Comptroller General.
(2) Factors to be included.--In conducting the study
pursuant to paragraph (1), the Federal Deposit Insurance
Corporation shall--
(A) consider the overall effectiveness and accuracy of the
methodology used by the Corporation for establishing and
maintaining reserves and estimating and accounting for losses
at insured depository institutions, during the period
described in such paragraph;
(B) consider the appropriateness and reliability of
information and criteria used by the Corporation in
determining--
(i) whether an insured depository institution was in a
troubled condition; and
(ii) the amount of any loss anticipated at such
institution;
(C) analyze the actual historical loss experience over the
period described in paragraph (1) and the causes of the
exceptionally high rate of losses experienced by the
Corporation in the final 3 years of that period; and
(D) rate the efforts of the Corporation to reduce losses in
such 3-year period to minimally acceptable levels and to
historical levels.
(3) Report required.--The Board of Directors of the Federal
Deposit Insurance Corporation shall submit a report to the
Congress before the end of the 6-month period beginning on
the date of the enactment of this Act, containing the
findings and conclusions of the Corporation with respect to
the study required under paragraph (1), together with such
recommendations for legislative or administrative action as
the Board of Directors may determine to be appropriate.
Before submitting the report to Congress, the Board of
Directors shall provide a draft of the report to the
Comptroller General for comment.
SEC. 4011. BI-ANNUAL FDIC SURVEY AND REPORT ON INCREASING THE
DEPOSIT BASE BY ENCOURAGING USE OF DEPOSITORY
INSTITUTIONS BY THE UNBANKED.
The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.)
is amended by adding at the end the following new section:
``SEC. 49. BI-ANNUAL FDIC SURVEY AND REPORT ON ENCOURAGING
USE OF DEPOSITORY INSTITUTIONS BY THE UNBANKED.
``(a) Survey Required.--
``(1) In general.--The Corporation shall conduct a bi-
annual survey on efforts by insured depository institutions
to bring those individuals and families who have rarely, if
ever, held a checking account, a savings account or other
type of transaction or check cashing account at an insured
depository institution (hereafter in this section referred to
as the `unbanked') into the conventional finance system.
``(2) Factors and questions to consider.--In conducting the
survey, the Corporation shall take the following factors and
questions into account:
``(A) To what extent do insured depository institutions
promote financial education and financial literacy outreach?
``(B) Which financial education efforts appear to be the
most effective in bringing `unbanked' individuals and
families into the conventional finance system?
``(C) What efforts are insured institutions making at
converting `unbanked' money order, wire transfer, and
international remittance customers into conventional account
holders?
``(D) What cultural, language and identification issues as
well as transaction costs appear to most prevent `unbanked'
individuals from establishing conventional accounts?
``(E) What is a fair estimate of the size and worth of the
`unbanked' market in the United States?
``(b) Reports.--The Chairperson of the Board of Directors
shall submit a bi-annual report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate containing
the Corporation's findings and conclusions with respect to
the survey conducted pursuant to subsection (a), together
with such recommendations for legislative or administrative
action as the Chairperson may determine to be appropriate.''.
SEC. 4012. TECHNICAL AND CONFORMING AMENDMENTS TO THE FEDERAL
DEPOSIT INSURANCE ACT RELATING TO THE MERGER OF
THE BIF AND SAIF.
(a) In General.--The Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.) is amended--
(1) in section 3 (12 U.S.C. 1813)--
(A) by striking subparagraph (B) of subsection (a)(1) and
inserting the following new subparagraph:
``(B) includes any former savings association.''; and
(B) by striking paragraph (1) of subsection (y) (as so
designated by section 4005(b) of this subtitle) and inserting
the following new paragraph:
``(1) Deposit insurance fund.--The term `Deposit Insurance
Fund' means the Deposit Insurance Fund established under
section 11(a)(4).'';
(2) in section 5(b)(5) (12 U.S.C. 1815(b)(5)), by striking
``the Bank Insurance Fund or the Savings Association
Insurance Fund,'' and inserting ``the Deposit Insurance
Fund,'';
(3) in section 5(c)(4), by striking ``deposit insurance
fund'' and inserting ``Deposit Insurance Fund'';
(4) in section 5(d) (12 U.S.C. 1815(d)), by striking
paragraphs (2) and (3) (and any funds resulting from the
application of such paragraph (2) prior to its repeal shall
be deposited into the general fund of the Deposit Insurance
Fund);
(5) in section 5(d)(1) (12 U.S.C. 1815(d)(1))--
(A) in subparagraph (A), by striking ``reserve ratios in
the Bank Insurance Fund and the Savings Association Insurance
Fund as required by section 7'' and inserting ``the reserve
ratio of the Deposit Insurance Fund'';
(B) by striking subparagraph (B) and inserting the
following:
``(2) Fee credited to the deposit insurance fund.--The fee
paid by the depository institution under paragraph (1) shall
be credited to the Deposit Insurance Fund.'';
(C) by striking ``(1) UNINSURED INSTITUTIONS.--''; and
(D) by redesignating subparagraphs (A) and (C) as
paragraphs (1) and (3), respectively, and moving the left
margins 2 ems to the left;
(6) in section 5(e) (12 U.S.C. 1815(e))--
(A) in paragraph (5)(A), by striking ``Bank Insurance Fund
or the Savings Association Insurance Fund'' and inserting
``Deposit Insurance Fund'';
(B) by striking paragraph (6); and
(C) by redesignating paragraphs (7), (8), and (9) as
paragraphs (6), (7), and (8), respectively;
(7) in section 6(5) (12 U.S.C. 1816(5)), by striking ``Bank
Insurance Fund or the Savings Association Insurance Fund''
and inserting ``Deposit Insurance Fund'';
(8) in section 7(b) (12 U.S.C. 1817(b))--
(A) in paragraph (1)(C), by striking ``deposit insurance
fund'' each place that term appears and inserting ``Deposit
Insurance Fund'';
(B) in paragraph (1)(D), by striking ``each deposit
insurance fund'' and inserting ``the Deposit Insurance
Fund''; and
(C) in paragraph (5) (as so redesignated by section
4004(e)(4) of this subtitle)--
(i) by striking ``any such assessment'' and inserting ``any
such assessment is necessary'';
(ii) by striking subparagraph (B);
(iii) in subparagraph (A)--
(I) by striking ``(A) is necessary--'';
(II) by striking ``Bank Insurance Fund members'' and
inserting ``insured depository institutions''; and
(III) by redesignating clauses (i), (ii), and (iii) as
subparagraphs (A), (B), and (C), respectively, and moving the
margins 2 ems to the left; and
(iv) in subparagraph (C) (as so redesignated)--
(I) by inserting ``that'' before ``the Corporation''; and
(II) by striking ``; and'' and inserting a period;
(9) in section 7(j)(7)(F) (12 U.S.C. 1817(j)(7)(F)), by
striking ``Bank Insurance Fund or the Savings Association
Insurance Fund'' and inserting ``Deposit Insurance Fund'';
(10) in section 8(t)(2)(C) (12 U.S.C. 1818(t)(2)(C)), by
striking ``deposit insurance fund'' and inserting ``Deposit
Insurance Fund'';
(11) in section 11 (12 U.S.C. 1821)--
(A) by striking ``deposit insurance fund'' each place that
term appears and inserting ``Deposit Insurance Fund'';
(B) by striking paragraph (4) of subsection (a) and
inserting the following new paragraph:
``(4) Deposit insurance fund.--
``(A) Establishment.--There is established the Deposit
Insurance Fund, which the Corporation shall--
``(i) maintain and administer;
[[Page H10593]]
``(ii) use to carry out its insurance purposes, in the
manner provided by this subsection; and
``(iii) invest in accordance with section 13(a).
``(B) Uses.--The Deposit Insurance Fund shall be available
to the Corporation for use with respect to insured depository
institutions the deposits of which are insured by the Deposit
Insurance Fund.
``(C) Limitation on use.--Notwithstanding any provision of
law other than section 13(c)(4)(G), the Deposit Insurance
Fund shall not be used in any manner to benefit any
shareholder or affiliate (other than an insured depository
institution that receives assistance in accordance with the
provisions of this Act) of--
``(i) any insured depository institution for which the
Corporation has been appointed conservator or receiver, in
connection with any type of resolution by the Corporation;
``(ii) any other insured depository institution in default
or in danger of default, in connection with any type of
resolution by the Corporation; or
``(iii) any insured depository institution, in connection
with the provision of assistance under this section or
section 13 with respect to such institution, except that this
clause shall not prohibit any assistance to any insured
depository institution that is not in default, or that is not
in danger of default, that is acquiring (as defined in
section 13(f)(8)(B)) another insured depository institution.
``(D) Deposits.--All amounts assessed against insured
depository institutions by the Corporation shall be deposited
into the Deposit Insurance Fund.'';
(C) by striking paragraphs (5), (6), and (7) of subsection
(a); and
(D) by redesignating paragraph (8) of subsection (a) as
paragraph (5);
(12) in section 11(f)(1) (12 U.S.C. 1821(f)(1)), by
striking ``, except that--'' and all that follows through the
end of the paragraph and inserting a period;
(13) in section 11(i)(3) (12 U.S.C. 1821(i)(3))--
(A) by striking subparagraph (B);
(B) by redesignating subparagraph (C) as subparagraph (B);
and
(C) in subparagraph (B) (as so redesignated), by striking
``subparagraphs (A) and (B)'' and inserting ``subparagraph
(A)'';
(14) in section 11(p)(2)(B) (12 U.S.C. 1821(p)(2)(B)), by
striking ``institution, any'' and inserting ``institution,
the'';
(15) in section 11A(a) (12 U.S.C. 1821a(a))--
(A) in paragraph (2), by striking ``liabilities.--'' and
all that follows through ``Except'' and inserting
``liabilities.--Except'';
(B) by striking paragraph (2)(B); and
(C) in paragraph (3), by striking ``the Bank Insurance
Fund, the Savings Association Insurance Fund,'' and inserting
``the Deposit Insurance Fund'';
(16) in section 11A(b) (12 U.S.C. 1821a(b)), by striking
paragraph (4);
(17) in section 11A(f) (12 U.S.C. 1821a(f)), by striking
``Savings Association Insurance Fund'' and inserting
``Deposit Insurance Fund'';
(18) in section 12(f)(4)(E)(iv) (12 U.S.C.
1822(f)(4)(E)(iv)), by striking ``Federal deposit insurance
funds'' and inserting ``the Deposit Insurance Fund (or any
predecessor deposit insurance fund)'';
(19) in section 13 (12 U.S.C. 1823)--
(A) by striking ``deposit insurance fund'' each place that
term appears and inserting ``Deposit Insurance Fund'';
(B) in subsection (a)(1), by striking ``Bank Insurance
Fund, the Savings Association Insurance Fund,'' and inserting
``Deposit Insurance Fund'';
(C) in subsection (c)(4)(E)--
(i) in the subparagraph heading, by striking ``funds'' and
inserting ``fund''; and
(ii) in clause (i), by striking ``any insurance fund'' and
inserting ``the Deposit Insurance Fund'';
(D) in subsection (c)(4)(G)(ii)--
(i) by striking ``appropriate insurance fund'' and
inserting ``Deposit Insurance Fund'';
(ii) by striking ``the members of the insurance fund (of
which such institution is a member)'' and inserting ``insured
depository institutions'';
(iii) by striking ``each member's'' and inserting ``each
insured depository institution's''; and
(iv) by striking ``the member's'' each place that term
appears and inserting ``the institution's'';
(E) in subsection (c), by striking paragraph (11);
(F) in subsection (h), by striking ``Bank Insurance Fund''
and inserting ``Deposit Insurance Fund'';
(G) in subsection (k)(4)(B)(i), by striking ``Savings
Association Insurance Fund member'' and inserting ``savings
association''; and
(H) in subsection (k)(5)(A), by striking ``Savings
Association Insurance Fund members'' and inserting ``savings
associations'';
(20) in section 14(a) (12 U.S.C. 1824(a)), in the 5th
sentence--
(A) by striking ``Bank Insurance Fund or the Savings
Association Insurance Fund'' and inserting ``Deposit
Insurance Fund''; and
(B) by striking ``each such fund'' and inserting ``the
Deposit Insurance Fund'';
(21) in section 14(b) (12 U.S.C. 1824(b)), by striking
``Bank Insurance Fund or Savings Association Insurance Fund''
and inserting ``Deposit Insurance Fund'';
(22) in section 14(c) (12 U.S.C. 1824(c)), by striking
paragraph (3);
(23) in section 14(d) (12 U.S.C. 1824(d))--
(A) by striking ``Bank Insurance Fund member'' each place
that term appears and inserting ``insured depository
institution'';
(B) by striking ``Bank Insurance Fund members'' each place
that term appears and inserting ``insured depository
institutions'';
(C) by striking ``Bank Insurance Fund'' each place that
term appears (other than in connection with a reference to a
term amended by subparagraph (A) or (B) of this paragraph)
and inserting ``Deposit Insurance Fund'';
(D) by striking the subsection heading and inserting the
following:
``(d) Borrowing for the Deposit Insurance Fund From Insured
Depository Institutions.--'';
(E) in paragraph (3), in the paragraph heading, by striking
``bif'' and inserting ``the deposit insurance fund''; and
(F) in paragraph (5), in the paragraph heading, by striking
``bif members'' and inserting ``insured depository
institutions'';
(24) in section 14 (12 U.S.C. 1824), by adding at the end
the following new subsection:
``(e) Borrowing for the Deposit Insurance Fund From Federal
Home Loan Banks.--
``(1) In general.--The Corporation may borrow from the
Federal home loan banks, with the concurrence of the Federal
Housing Finance Board, such funds as the Corporation
considers necessary for the use of the Deposit Insurance
Fund.
``(2) Terms and conditions.--Any loan from any Federal home
loan bank under paragraph (1) to the Deposit Insurance Fund
shall--
``(A) bear a rate of interest of not less than the current
marginal cost of funds to that bank, taking into account the
maturities involved;
``(B) be adequately secured, as determined by the Federal
Housing Finance Board;
``(C) be a direct liability of the Deposit Insurance Fund;
and
``(D) be subject to the limitations of section 15(c).'';
(25) in section 15(c)(5) (12 U.S.C. 1825(c)(5))--
(A) by striking ``the Bank Insurance Fund or Savings
Association Insurance Fund, respectively'' each place that
term appears and inserting ``the Deposit Insurance Fund'';
and
(B) in subparagraph (B), by striking ``the Bank Insurance
Fund or the Savings Association Insurance Fund,
respectively'' and inserting ``the Deposit Insurance Fund'';
(26) in section 17(a) (12 U.S.C. 1827(a))--
(A) in the subsection heading, by striking ``BIF, SAIF,''
and inserting ``the Deposit Insurance Fund''; and
(B) in paragraph (1)--
(i) by striking ``the Bank Insurance Fund, the Savings
Association Insurance Fund,'' each place that term appears
and inserting ``the Deposit Insurance Fund''; and
(ii) in subparagraph (D), by striking ``each insurance
fund'' and inserting ``the Deposit Insurance Fund'';
(27) in section 17(d) (12 U.S.C. 1827(d)), by striking ``,
the Bank Insurance Fund, the Savings Association Insurance
Fund,'' each place that term appears and inserting ``the
Deposit Insurance Fund'';
(28) in section 18(m)(3) (12 U.S.C. 1828(m)(3))--
(A) by striking ``Savings Association Insurance Fund'' in
the 1st sentence of subparagraph (A) and inserting ``Deposit
Insurance Fund'';
(B) by striking ``Savings Association Insurance Fund
member'' in the last sentence of subparagraph (A) and
inserting ``savings association''; and
(C) by striking ``Savings Association Insurance Fund or the
Bank Insurance Fund'' in subparagraph (C) and inserting
``Deposit Insurance Fund'';
(29) in section 18(o) (12 U.S.C. 1828(o)), by striking
``deposit insurance funds'' and ``deposit insurance fund''
each place those terms appear and inserting ``Deposit
Insurance Fund'';
(30) in section 18(p) (12 U.S.C. 1828(p)), by striking
``deposit insurance funds'' and inserting ``Deposit Insurance
Fund'';
(31) in section 24 (12 U.S.C. 1831a)--
(A) in subsections (a)(1) and (d)(1)(A), by striking
``appropriate deposit insurance fund'' each place that term
appears and inserting ``Deposit Insurance Fund'';
(B) in subsection (e)(2)(A), by striking ``risk to'' and
all that follows through the period and inserting ``risk to
the Deposit Insurance Fund.''; and
(C) in subsections (e)(2)(B)(ii) and (f)(6)(B), by striking
``the insurance fund of which such bank is a member'' each
place that term appears and inserting ``the Deposit Insurance
Fund'';
(32) in section 28 (12 U.S.C. 1831e), by striking
``affected deposit insurance fund'' each place that term
appears and inserting ``Deposit Insurance Fund'';
(33) by striking section 31 (12 U.S.C. 1831h);
(34) in section 36(i)(3) (12 U.S.C. 1831m(i)(3)), by
striking ``affected deposit insurance fund'' and inserting
``Deposit Insurance Fund'';
(35) in section 37(a)(1)(C) (12 U.S.C. 1831n(a)(1)(C)), by
striking ``insurance funds'' and inserting ``Deposit
Insurance Fund'';
(36) in section 38 (12 U.S.C. 1831o), by striking ``the
deposit insurance fund'' each place that term appears and
inserting ``the Deposit Insurance Fund'';
(37) in section 38(a) (12 U.S.C. 1831o(a)), in the
subsection heading, by striking ``Funds'' and inserting
``Fund'';
(38) in section 38(k) (12 U.S.C. 1831o(k))--
[[Page H10594]]
(A) in paragraph (1), by striking ``a deposit insurance
fund'' and inserting ``the Deposit Insurance Fund'';
(B) in paragraph (2), by striking ``A deposit insurance
fund'' and inserting ``The Deposit Insurance Fund''; and
(C) in paragraphs (2)(A) and (3)(B), by striking ``the
deposit insurance fund's outlays'' each place that term
appears and inserting ``the outlays of the Deposit Insurance
Fund''; and
(39) in section 38(o) (12 U.S.C. 1831o(o))--
(A) by striking ``associations.--'' and all that follows
through ``Subsections (e)(2)'' and inserting
``associations.--Subsections (e)(2)'';
(B) by redesignating subparagraphs (A), (B), and (C) as
paragraphs (1), (2), and (3), respectively, and moving the
margins 2 ems to the left; and
(C) in paragraph (1) (as so redesignated), by redesignating
clauses (i) and (ii) as subparagraphs (A) and (B),
respectively, and moving the margins 2 ems to the left.
(b) Effective Date.--This section and the amendments made
by this section shall take effect on the first day of the
first calendar quarter that begins after the end of the 90-
day period beginning on the date of the enactment of this
Act.
SEC. 4013. OTHER TECHNICAL AND CONFORMING AMENDMENTS RELATING
TO THE MERGER OF THE BIF AND SAIF.
(a) Section 5136 of the Revised Statutes.--The paragraph
designated the ``Eleventh'' of section 5136 of the Revised
Statutes of the United States (12 U.S.C. 24) is amended in
the 5th sentence, by striking ``affected deposit insurance
fund'' and inserting ``Deposit Insurance Fund''.
(b) Investments Promoting Public Welfare; Limitations on
Aggregate Investments.--The 23d undesignated paragraph of
section 9 of the Federal Reserve Act (12 U.S.C. 338a) is
amended in the 4th sentence, by striking ``affected deposit
insurance fund'' and inserting ``Deposit Insurance Fund''.
(c) Advances to Critically Undercapitalized Depository
Institutions.--Section 10B(b)(3)(A)(ii) of the Federal
Reserve Act (12 U.S.C. 347b(b)(3)(A)(ii)) is amended by
striking ``any deposit insurance fund in'' and inserting
``the Deposit Insurance Fund of''.
(d) Amendments to the Balanced Budget and Emergency Deficit
Control Act of 1985.--Section 255(g)(1)(A) of the Balanced
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C.
905(g)(1)(A)) is amended--
(1) by striking ``Bank Insurance Fund'' and inserting
``Deposit Insurance Fund''; and
(2) by striking ``Federal Deposit Insurance Corporation,
Savings Association Insurance Fund (51-4066-0-3-373);''.
(e) Amendments to the Federal Home Loan Bank Act.--The
Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is
amended--
(1) in section 11(k) (12 U.S.C. 1431(k))--
(A) in the subsection heading, by striking ``SAIF'' and
inserting ``the Deposit Insurance Fund''; and
(B) by striking ``Savings Association Insurance Fund'' each
place such term appears and inserting ``Deposit Insurance
Fund'';
(2) in section 21 (12 U.S.C. 1441)--
(A) in subsection (f)(2), by striking ``, except that'' and
all that follows through the end of the paragraph and
inserting a period; and
(B) in subsection (k), by striking paragraph (4);
(3) in section 21A(b)(4)(B) (12 U.S.C. 1441a(b)(4)(B)), by
striking ``affected deposit insurance fund'' and inserting
``Deposit Insurance Fund'';
(4) in section 21A(b)(6)(B) (12 U.S.C. 1441a(b)(6)(B))--
(A) in the subparagraph heading, by striking ``Saif-insured
banks'' and inserting ``Charter conversions''; and
(B) by striking ``Savings Association Insurance Fund
member'' and inserting ``savings association'';
(5) in section 21A(b)(10)(A)(iv)(II) (12 U.S.C.
1441a(b)(10)(A)(iv)(II)), by striking ``Savings Association
Insurance Fund'' and inserting ``Deposit Insurance Fund'';
(6) in section 21A(n)(6)(E)(iv) (12 U.S.C.
1441(n)(6)(E)(iv)), by striking ``Federal deposit insurance
funds'' and inserting ``the Deposit Insurance Fund'';
(7) in section 21B(e) (12 U.S.C. 1441b(e))--
(A) in paragraph (5), by inserting ``as of the date of
funding'' after ``Savings Association Insurance Fund
members'' each place that term appears; and
(B) by striking paragraphs (7) and (8); and
(8) in section 21B(k) (12 U.S.C. 1441b(k))--
(A) by inserting before the colon ``, the following
definitions shall apply'';
(B) by striking paragraph (8); and
(C) by redesignating paragraphs (9) and (10) as paragraphs
(8) and (9), respectively.
(f) Amendments to the Home Owners' Loan Act.--The Home
Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended--
(1) in section 5 (12 U.S.C. 1464)--
(A) in subsection (c)(5)(A), by striking ``that is a member
of the Bank Insurance Fund'';
(B) in subsection (c)(6), by striking ``As used in this
subsection--'' and inserting ``For purposes of this
subsection, the following definitions shall apply:'';
(C) in subsection (o)(1), by striking ``that is a Bank
Insurance Fund member'';
(D) in subsection (o)(2)(A), by striking ``a Bank Insurance
Fund member until such time as it changes its status to a
Savings Association Insurance Fund member'' and inserting
``insured by the Deposit Insurance Fund'';
(E) in subsection (t)(5)(D)(iii)(II), by striking
``affected deposit insurance fund'' and inserting ``Deposit
Insurance Fund'';
(F) in subsection (t)(7)(C)(i)(I), by striking ``affected
deposit insurance fund'' and inserting ``Deposit Insurance
Fund''; and
(G) in subsection (v)(2)(A)(i), by striking ``the Savings
Association Insurance Fund'' and inserting ``or the Deposit
Insurance Fund''; and
(2) in section 10 (12 U.S.C. 1467a)--
(A) in subsection (c)(6)(D), by striking ``this title'' and
inserting ``this Act'';
(B) in subsection (e)(1)(B), by striking ``Savings
Association Insurance Fund or Bank Insurance Fund'' and
inserting ``Deposit Insurance Fund'';
(C) in subsection (e)(2), by striking ``Savings Association
Insurance Fund or the Bank Insurance Fund'' and inserting
``Deposit Insurance Fund'';
(D) in subsection (e)(4)(B), by striking ``subsection (1)''
and inserting ``subsection (l)'';
(E) in subsection (g)(3)(A), by striking ``(5) of this
section'' and inserting ``(5) of this subsection'';
(F) in subsection (i), by redesignating paragraph (5) as
paragraph (4);
(G) in subsection (m)(3), by striking subparagraph (E) and
by redesignating subparagraphs (F), (G), and (H) as
subparagraphs (E), (F), and (G), respectively;
(H) in subsection (m)(7)(A), by striking ``during period''
and inserting ``during the period''; and
(I) in subsection (o)(3)(D), by striking ``sections 5(s)
and (t) of this Act'' and inserting ``subsections (s) and (t)
of section 5''.
(g) Amendments to the National Housing Act.--The National
Housing Act (12 U.S.C. 1701 et seq.) is amended--
(1) in section 317(b)(1)(B) (12 U.S.C. 1723i(b)(1)(B)), by
striking ``Bank Insurance Fund for banks or through the
Savings Association Insurance Fund for savings associations''
and inserting ``Deposit Insurance Fund''; and
(2) in section 536(b)(1)(B)(ii) (12 U.S.C. 1735f-
14(b)(1)(B)(ii)), by striking ``Bank Insurance Fund for banks
and through the Savings Association Insurance Fund for
savings associations'' and inserting ``Deposit Insurance
Fund''.
(h) Amendments to the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989.--The Financial
Institutions Reform, Recovery, and Enforcement Act of 1989
(12 U.S.C. 1811 note) is amended--
(1) in section 951(b)(3)(B) (12 U.S.C. 1833a(b)(3)(B)), by
inserting ``and after the merger of such funds, the Deposit
Insurance Fund,'' after ``the Savings Association Insurance
Fund,''; and
(2) in section 1112(c)(1)(B) (12 U.S.C. 3341(c)(1)(B)), by
striking ``Bank Insurance Fund, the Savings Association
Insurance Fund,'' and inserting ``Deposit Insurance Fund''.
(i) Amendment to the Bank Holding Company Act of 1956.--The
Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
amended--
(1) in section 2(j)(2) (12 U.S.C. 1841(j)(2)), by striking
``Savings Association Insurance Fund'' and inserting
``Deposit Insurance Fund''; and
(2) in section 3(d)(1)(D)(iii) (12 U.S.C.
1842(d)(1)(D)(iii)), by striking ``appropriate deposit
insurance fund'' and inserting ``Deposit Insurance Fund''.
(j) Amendments to the Gramm-Leach-Bliley Act.--Section 114
of the Gramm-Leach-Bliley Act (12 U.S.C. 1828a) is amended by
striking ``any Federal deposit insurance fund'' in subsection
(a)(1)(B), paragraphs (2)(B) and (4)(B) of subsection (b),
and subsection (c)(1)(B), each place that term appears and
inserting ``the Deposit Insurance Fund''.
(k) Effective Date.--This section and the amendments made
by this section shall take effect on the first day of the
first calendar quarter that begins after the end of the 90-
day period beginning on the date of the enactment of this
Act.
Subtitle B--FHA Asset Disposition
SEC. 4101. SHORT TITLE.
This subtitle may be cited as the ``FHA Asset Disposition
Act of 2005''.
SEC. 4102. DEFINITIONS.
For purposes of this subtitle, the following definitions
shall apply:
(1) The term ``affordability requirements'' means any
requirements or restrictions imposed by the Secretary, at the
time of sale, on a multifamily real property or a multifamily
loan, such as use restrictions, rent restrictions, and
rehabilitation requirements.
(2) The term ``discount sale'' means the sale of a
multifamily real property in a transaction, such as a
negotiated sale, in which the sale price is lower than the
property market value and is set outside of a competitive
bidding process that has no affordability requirements.
(3) The term ``discount loan sale'' means the sale of a
multifamily loan in a transaction, such as a negotiated sale,
in which the sale price is lower than the loan market value
and is set outside of a competitive bidding process that has
no affordability requirements.
(4) The term ``loan market value'' means the value of a
multifamily loan, without taking into account any
affordability requirements.
(5) The term ``multifamily real property'' means any rental
or cooperative housing
[[Page H10595]]
project of 5 or more units owned by the Secretary that prior
to acquisition by the Secretary was security for a loan or
loans insured under title II of the National Housing Act.
(6) The term ``multifamily loan'' means a loan held by the
Secretary and secured by a multifamily rental or cooperative
housing project of 5 or more units that was formerly insured
under title II of the National Housing Act.
(7) The term ``property market value'' means the value of a
multifamily real property for its current use, without taking
into account any affordability requirements.
(8) The term ``Secretary'' means the Secretary of Housing
and Urban Development.
SEC. 4103. APPROPRIATED FUNDS REQUIREMENT FOR BELOW MARKET
SALES.
(a) Discount Sales.--Notwithstanding any other provision of
law, except for affordability requirements for the elderly
and disabled required by statute, disposition by the
Secretary of a multifamily real property during fiscal years
2006 through 2010 through a discount sale under sections
207(l) or 246 of the National Housing Act (12 U.S.C. 1713(l),
1715z-11), section 203 of the Housing and Community
Development Amendments of 1978 (12 U.S.C. 1701z-11), or
section 204 of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies
Appropriations Act, 1997 (12 U.S.C. 1715z-11a), shall be
subject to the availability of appropriations to the extent
that the property value exceeds the sale proceeds. If the
multifamily real property is sold, during such fiscal years,
for an amount equal to or greater than the property market
value then the transaction is not subject to the availability
of appropriations.
(b) Discount Loan Sales.--Notwithstanding any other
provision of law and in accordance with the Federal Credit
Reform Act of 1990 (2 U.S.C. 661 et seq.), a discount loan
sale during fiscal years 2006 through 2010 under section
207(k) of the National Housing Act (12 U.S.C. 1713(k)),
section 203(k) of the Housing and Community Development
Amendments of 1978 (12 U.S.C. 1701z-11(k)), or section 204(a)
of the Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act,
1997 (12 U.S.C. 1715z-11a(a)), shall be subject to the
availability of appropriations to the extent that the loan
value exceeds the sale proceeds. If the multifamily loan is
sold, during such fiscal years, for an amount equal to or
greater than the loan market value then the transaction is
not subject to the availability of appropriations.
(c) Applicability.--This section shall not apply to any
transaction that formally commences within one year prior to
the enactment of this section.
SEC. 4104. UP-FRONT GRANTS.
(a) 1997 Act.--Section 204(a) of the Departments of
Veterans Affairs and Housing And Urban Development, and
Independent Agencies Appropriations Act, 1997 (12 U.S.C.
1715z-11a(a))) is amended by adding at the end the following
new sentence: ``A grant provided under this subsection during
fiscal years 2006 through 2010 shall be available only to the
extent that appropriations are made in advance for such
purposes and shall not be derived from the General Insurance
Fund.''.
(b) 1978 Act.--Section 203(f)(4) of the Housing and
Community Development Amendments of 1978 (12 USC 1701z-
11(f)(4)) is amended by adding at the end the following new
sentence: ``This paragraph shall be effective during fiscal
years 2006 through 2010 only to the extent that such budget
authority is made available for use under this paragraph in
advance in appropriation Acts.''.
(c) Applicability.--The amendments made by this section
shall not apply to any transaction that formally commences
within one year prior to the enactment of this section.
TITLE V--COMMITTEE ON JUDICIARY
SEC. 5001. TABLE OF CONTENTS.
TITLE V--COMMITTEE ON JUDICIARY
Sec. 5001. Table of contents.
Subtitle A--Visa Fees
Sec. 5101. Fees with respect to immigration services for intracompany
transferees.
Subtitle B--Circuit and District Judgeships
Sec. 5201. Short title.
Sec. 5202. Circuit judges for the circuit courts of appeals.
Sec. 5203. District judges for the district courts.
Sec. 5204. Establishment of Article III court in the Virgin Islands.
Sec. 5205. Effective date.
Subtitle C--Bankruptcy Judgeships
Sec. 5301. Short title.
Sec. 5302. Authorization for additional bankruptcy judgeships.
Sec. 5303. Temporary bankruptcy judgeships.
Sec. 5304. Conversion of existing temporary bankruptcy judgeships.
Sec. 5305. General provisions.
Sec. 5306. Effective date.
Subtitle D--Ninth Circuit Reorganization
Sec. 5401. Short title.
Sec. 5402. Definitions.
Sec. 5403. Number and composition of circuits.
Sec. 5404. Number of circuit judges.
Sec. 5405. Places of circuit court.
Sec. 5406. Assignment of circuit judges.
Sec. 5407. Election of assignment by senior judges.
Sec. 5408. Seniority of judges.
Sec. 5409. Application to cases.
Sec. 5410. Temporary assignment of circuit judges among circuits.
Sec. 5411. Temporary assignment of district judges among circuits.
Sec. 5412. Administration.
Sec. 5413. Effective date.
Subtitle E--Authorization of Appropriations
Sec. 5501. Authorization of appropriations.
Subtitle A--Visa Fees
SEC. 5101. FEES WITH RESPECT TO IMMIGRATION SERVICES FOR
INTRACOMPANY TRANSFEREES.
Section 214(c) of the Immigration and Nationality Act (8
U.S.C. 1184(c)) is amended by adding at the end the
following:
``(15)(A) The Secretary of State shall impose a fee on an
employer when an alien files an application abroad for a visa
authorizing initial admission to the United States as a
nonimmigrant described in section 101(a)(15)(L) in order to
be employed by the employer, if the alien is covered under a
blanket petition described in paragraph (2)(A).
``(B) The Secretary of Homeland Security shall impose a fee
on an employer filing a petition under paragraph (1)
initially to grant an alien nonimmigrant status described in
section 101(a)(15)(L) or to extend for the first time the
stay of an alien having such status.
``(C) The amount of the fee imposed under subparagraph (A)
or (B) shall be $1,500.
``(D) The fees imposed under subparagraphs (A) and (B)
shall only apply to principal aliens and not to spouses or
children who are accompanying or following to join such
principal aliens.
``(E) Fees collected under this paragraph shall be
deposited as offsetting receipts in the Treasury, and shall
not be available for expenditure until appropriated.
``(F)(i) An employer may not require an alien who is the
beneficiary of the visa or petition for which a fee is
imposed under this paragraph to reimburse, or otherwise
compensate, the employer for part or all of the cost of such
fee.
``(ii) Section 274A(g)(2) shall apply to a violation of
clause (i) in the same manner as it applies to a violation of
section 274A(g)(1).''.
Subtitle B--Circuit and District Judgeships
SEC. 5201. SHORT TITLE.
This subtitle may be cited as the ``Federal Judgeship Act
of 2005''.
SEC. 5202. CIRCUIT JUDGES FOR THE CIRCUIT COURTS OF APPEALS.
(a) In General.--The President shall appoint, by and with
the advice and consent of the Senate--
(1) 1 additional circuit judge for the first circuit court
of appeals;
(2) 2 additional circuit judges for the second circuit
court of appeals;
(3) 1 additional circuit judge for the sixth circuit court
of appeals; and
(4) 5 additional circuit judges for the ninth circuit court
of appeals, whose official duty station shall be in
California.
(b) Temporary Judgeships.--
(1) In general.--The President shall appoint, by and with
the advice and consent of the Senate--
(A) 1 additional circuit judge for the eighth circuit court
of appeals; and
(B) 2 additional circuit judges for the ninth circuit court
of appeals, whose official duty station shall be in
California.
(2) Vacancies.--
(A) Eighth circuit.--The first vacancy in the office of
circuit judge in the eighth circuit court of appeals,
occurring 10 years or more after the confirmation date of the
judge named to fill the circuit judgeship created in that
circuit by paragraph (1)(A) shall not be filled.
(B) Ninth circuit.--The first 2 vacancies in the office of
circuit judge in the ninth circuit court of appeals,
occurring 10 years or more after judges are first confirmed
to fill both temporary circuit judgeships created by
paragraph (1)(B) shall not be filled.
(c) Table of judgeships.--In order that the table contained
in section 44 of title 28, United States Code, will, with
respect to each judicial circuit, reflect the changes in the
total number of permanent circuit judgeships authorized under
subsection (a) of this section, such table is amended to read
as follows:
Number of
``Circuits Judges
District of Columbia............................................12
First............................................................7
Second..........................................................15
Third...........................................................14
Fourth..........................................................15
Fifth...........................................................17
Sixth...........................................................17
Seventh.........................................................11
Eighth..........................................................11
Ninth...........................................................33
Tenth...........................................................12
Eleventh........................................................12
Federal......................................................12.''.
SEC. 5203. DISTRICT JUDGES FOR THE DISTRICT COURTS.
(a) In General.--The President shall appoint, by and with
the advice and consent of the Senate--
(1) 1 additional district judge for the northern district
of Alabama;
(2) 4 additional district judges for the district of
Arizona;
(3) 3 additional district judges for the northern district
of California;
(4) 4 additional district judges for the eastern district
of California;
(5) 4 additional district judges for the central district
of California;
(6) 1 additional district judge for the southern district
of California;
[[Page H10596]]
(7) 1 additional district judge for the district of
Colorado;
(8) 4 additional district judges for the middle district of
Florida;
(9) 3 additional district judges for the southern district
of Florida;
(10) 1 additional district judge for the district of Idaho;
(11) 1 additional district judge for the northern district
of Illinois;
(12) 1 additional district judge for the southern district
of Indiana;
(13) 1 additional district judge for the western district
of Missouri;
(14) 1 additional district judge for the district of
Nebraska;
(15) 1 additional district judge for the district of
Nevada;
(16) 1 additional district judge for the district of New
Mexico;
(17) 3 additional district judges for the eastern district
of New York;
(18) 1 additional district judge for the western district
of New York;
(19) 1 additional district judge for the district of
Oregon;
(20) 1 additional district judge for the district of South
Carolina;
(21) 3 additional district judges for the southern district
of Texas;
(22) 2 additional district judges for the eastern district
of Virginia; and
(23) 1 additional district judge for the western district
of Washington.
(b) Temporary Judgeships.--
(1) In general.--The President shall appoint, by and with
the advice and consent of the Senate--
(A) 1 additional district judge for the middle district of
Alabama;
(B) 1 additional district judge for the district of
Arizona;
(C) 1 additional district judge for the northern district
of California;
(D) 1 additional district judge for the district of
Colorado;
(E) 1 additional district judge for the middle district of
Florida;
(F) 1 additional district judge for the northern district
of Iowa;
(G) 1 additional district judge for the district of
Minnesota;
(H) 1 additional district judge for the district of New
Jersey;
(I) 1 additional district judge for the district of New
Mexico;
(J) 1 additional district judge for the southern district
of Ohio;
(K) 1 additional district judge for the district of Oregon;
and
(L) 1 additional district judge for the district of Utah.
(2) Vacancies not filled.--The first vacancy in the office
of district judge in each of the judicial districts named in
paragraph (1) occurring 10 years or more after the
confirmation date of the judge named to fill the district
judgeship created in that district by paragraph (1) shall not
be filled.
(c) Existing Judgeships.--
(1) Permanent judgeships.--The existing judgeships for the
district of Hawaii, the district of Kansas, and the eastern
district of Missouri authorized by section 203(c) of the
Judicial Improvements Act of 1990 (Public Law 101-650; 28
U.S.C. 133 note) shall, as of the effective date of this Act,
be authorized under section 133 of title 28, United States
Code, and the incumbents in those offices shall hold the
office under section 133 of title 28, United States Code, as
amended by this Act.
(2) Extension of temporary judgeship.--Section 203(c) of
the Judicial Improvements Act of 1990 (Public Law 101-650; 28
U.S.C. 133 note) is amended in the fifth sentence (relating
to the northern district of Ohio) by striking ``15 years''
and inserting ``20 years''.
(d) Table of Judgeships.--In order that the table contained
in section 133(a) of title 28, United States Code, will, with
respect to each judicial district, reflect the changes in the
total number of permanent district judgeships authorized
under subsections (a) and (c) of this section, such table is
amended to read as follows:
``Districts Judges
``Alabama:
``Northern.......................................................8
``Middle.........................................................3
``Southern.......................................................3
``Alaska...........................................................3
``Arizona.........................................................16
``Arkansas:
``Eastern........................................................5
``Western........................................................3
``California:
``Northern......................................................17
``Eastern.......................................................10
``Central.......................................................31
``Southern......................................................14
``Colorado.........................................................8
``Connecticut......................................................8
``Delaware.........................................................4
``District of Columbia............................................15
``Florida:
``Northern.......................................................4
``Middle........................................................19
``Southern......................................................20
``Georgia:
``Northern......................................................11
``Middle.........................................................4
``Southern.......................................................3
``Hawaii...........................................................4
``Idaho............................................................3
``Illinois:
``Northern......................................................23
``Central........................................................4
``Southern.......................................................4
``Indiana:
``Northern.......................................................5
``Southern.......................................................6
``Iowa:
``Northern.......................................................2
``Southern.......................................................3
``Kansas...........................................................6
``Kentucky:
``Eastern........................................................5
``Western........................................................4
``Eastern and Western............................................1
``Louisiana:
``Eastern.......................................................12
``Middle.........................................................3
``Western........................................................7
``Maine............................................................3
``Maryland........................................................10
``Massachusetts...................................................13
``Michigan:
``Eastern.......................................................15
``Western........................................................4
``Minnesota........................................................7
``Mississippi:
``Northern.......................................................3
``Southern.......................................................6
``Missouri:
``Eastern........................................................7
``Western........................................................6
``Eastern and Western............................................2
``Montana..........................................................3
``Nebraska.........................................................4
``Nevada...........................................................8
``New Hampshire....................................................3
``New Jersey......................................................17
``New Mexico.......................................................7
``New York:
``Northern.......................................................5
``Southern......................................................28
``Eastern.......................................................18
``Western........................................................5
``North Carolina:
``Eastern........................................................4
``Middle.........................................................4
``Western........................................................4
``North Dakota.....................................................2
``Ohio:
``Northern......................................................11
``Southern.......................................................8
``Oklahoma:
``Northern.......................................................3
``Eastern........................................................1
``Western........................................................6
``Northern, Eastern, and Western.................................1
``Oregon...........................................................7
``Pennsylvania:
``Eastern.......................................................22
``Middle.........................................................6
``Western.......................................................10
``Puerto Rico......................................................7
``Rhode Island.....................................................3
``South Carolina..................................................11
``South Dakota.....................................................3
``Tennessee:
``Eastern........................................................5
``Middle.........................................................4
``Western........................................................5
``Texas:
``Northern......................................................12
``Southern......................................................22
``Eastern........................................................7
``Western.......................................................13
``Utah.............................................................5
``Vermont..........................................................2
``Virginia:
``Eastern.......................................................13
``Western........................................................4
``Washington:
``Eastern........................................................4
``Western........................................................8
``West Virginia:
``Northern.......................................................3
``Southern.......................................................5
``Wisconsin:
``Eastern........................................................5
``Western........................................................2
``Wyoming.......................................................3.''.
SEC. 5204. ESTABLISHMENT OF ARTICLE III COURT IN THE VIRGIN
ISLANDS.
(a) Establishment of Judicial District.--
(1) Virgin islands.--Chapter 5 of title 28, United States
Code, is amended by inserting after section 126 the following
new section:
``Sec. 126A. Virgin Islands
``The Virgin Islands constitutes 1 judicial district
comprising 2 divisions.
``(1) The Saint Croix Division comprises the Island of
Saint Croix and adjacent islands and cays.
``Court for the Saint Croix Division shall be held at
Christiansted.
``(2) The Saint Thomas and Saint John Division comprises
the Islands of Saint Thomas and Saint John and adjacent
islands and cays.
``Court for the Saint Thomas and Saint John Division shall
be held at Charlotte-Amalie.''.
(2) Technical and conforming amendment.--The table of
contents for chapter 5 of title 28, United States Code, is
amended by inserting after the item relating to section 126
the following:
``126A. Virgin Islands.''.
(b) Number of Judges.--The table contained in section
133(a) of title 28, United States Code, is amended by
inserting after the item relating to Vermont the following:
``Virgin Islands...............................................2''.....
(c) Bankruptcy Judges.--The table contained in section
152(a)(2) of title 28, United States Code, is amended by
inserting after the item relating to Vermont the following:
``Virgin Islands...............................................0''.....
(d) Judicial Conferences of Circuits.--Section 333 of title
28, United States Code, is amended in the third sentence of
the first undesignated paragraph--
(1) by striking ``, the District Court of the Virgin
Islands,''; and
(2) by striking ``to the conferences of their respective
circuits'' and inserting ``to the conference of the ninth
circuit''.
[[Page H10597]]
(e) Judges in Territories and Possessions.--Section 373 of
title 28, United States Code, is amended--
(1) in subsection (a), by striking ``, the District Court
of the Northern Mariana Islands, or the District Court of the
Virgin Islands'' and inserting ``or the District Court of the
Northern Mariana Islands''; and
(2) in subsection (e), by striking ``, the District Court
of the Northern Mariana Islands, or the District Court of the
Virgin Islands'' and inserting ``or the District Court of the
Northern Mariana Islands''.
(f) Annuities for Survivors of Certain Judicial Officials
of the United States.--Section 376(a) of title 28, United
States Code, is amended--
(1) in paragraph (1)(B), by striking ``, the District Court
of the Northern Mariana Islands, or the District Court of the
Virgin Islands'' and inserting ``or the District Court of the
Northern Mariana Islands''; and
(2) in paragraph (2)(B), by striking ``, the District Court
of the Northern Mariana Islands, or the District Court of the
Virgin Islands'' and inserting ``or the District Court of the
Northern Mariana Islands''.
(g) Authority of Attorney General.--Section 526(a)(2) of
title 28, United States Code, is amended by striking ``and of
the district court of the Virgin Islands''.
(h) Courts Defined.--Section 610 of title 28, United States
Code, is amended--
(1) by striking ``the United States District Court for the
District of the Canal Zone,''; and
(2) by striking ``the District Court of the Virgin
Islands,''.
(i) United States Magistrate Judges.--Section 631(a) of
title 28, United States Code, is amended--
(1) in the first sentence, by striking ``the Virgin
Islands, Guam,'' and inserting ``Guam''; and
(2) in the second sentence, by striking ``the Virgin
Islands, Guam,'' and inserting ``Guam''.
(j) Court Reporters.--Section 753(a) of title 28, United
States Code, is amended by striking ``, the United States
District Court for the District of the Canal Zone, the
District Court of Guam, and the District Court of the Virgin
Islands'' and inserting ``and the District Court of Guam''.
(k) Final Decisions of District Courts.--Section 1291 of
title 28, United States Code, is amended by striking ``, the
United States District Court for the District of the Canal
Zone, the District Court of Guam, and the District Court of
the Virgin Islands,'' and inserting ``and the District Court
of Guam,''.
(l) Interlocutory Decisions.--Section 1292 of title 28,
United States Code, is amended--
(1) in subsection (a), by striking ``, the United States
District Court for the District of the Canal Zone, the
District Court of Guam, and the District Court of the Virgin
Islands,'' and inserting ``and the District Court of Guam,'';
and
(2) in subsection (d)(4)(A), by striking ``the District
Court of the Virgin Islands,''.
(m) Jurisdiction of the United States Court of Appeals for
the Federal Circuit.--Section 1295(a) of title 28, United
States Code, is amended in paragraphs (1) and (2)--
(1) by striking ``the United States District Court for the
District of the Canal Zone,''; and
(2) by striking ``the District Court of the Virgin
Islands,''.
(n) United States as Defendant.--Section 1346(b)(1) of
title 28, United States Code, is amended by striking ``,
together with the United States District Court for the
District of the Canal Zone and the District Court of the
Virgin Islands,''.
(o) Adequate Representation of Defendants.--Section
3006A(j) of title 18, United States Code, is amended by
striking ``the District Court of the Virgin Islands,''.
(p) Savings Provisions.--
(1) Tenure of incumbent judges.--A judge of the District
Court of the Virgin Islands in office on the effective date
of this section shall continue in office until the expiration
of the term for which the judge was appointed, or until the
judge dies, resigns, or is removed from office, whichever
occurs first. When a vacancy occurs on the court on or after
the effective date of this section, the President, in
accordance with section 133(a) of title 28, United States
Code, shall appoint, by and with the advice and consent of
the Senate, a district judge for the District of the Virgin
Islands.
(2) Retirement rights and benefits.--The amendments made by
this section shall not affect the rights under sections 373
and 376 of title 28, United States Code, of any judge of the
District Court of the Virgin Islands who retires on or before
the effective date of this section or who continues in office
after that date under paragraph (1) of this subsection.
Service as a judge of the District Court of the Virgin
Islands appointed under section 24 of the Revised Organic Act
of the Virgin Islands (48 U.S.C. 1614) shall be included in
calculating service under sections 371 and 372 of title 28,
United States Code, and shall not be counted for purposes of
section 373 of that title, if the judge is reappointed, after
the effective date of this section, under section 133(a) of
title 28, United States Code, as district judge for the
District of the Virgin Islands.
(q) Amendments to Revised Organic Act of the Virgin
Islands.--
(1) Repeals.--Sections 24, 25, 26, and 27 of the Revised
Organic Act of the Virgin Islands (48 U.S.C. 1614, 1615, 1616
and 1617) are repealed.
(2) Rights and prohibitions.--Section 3 of the Revised
Organic Act of the Virgin Islands (48 U.S.C. 1561) is amended
in the 23d undesignated paragraph--
(A) by inserting ``article III;'' after ``section 9,
clauses 2 and 3;'' and
(B) by striking ``That all offenses against the laws of the
United States'' and all that follows through ``section 22(b)
of this Act or'' and inserting ``That all offenses against
the laws of the Virgin Islands which are prosecuted''.
(3) Jurisdiction.--Section 21 of the Revised Organic Act of
the Virgin Islands (48 U.S.C. 1611) is amended to read as
follows:
``SEC. 21. JURISDICTION OF THE COURTS OF THE VIRGIN ISLANDS.
``(a) Jurisdiction of the Courts of the Virgin Islands.--
The judicial power of the Virgin Islands shall be vested in
such trial and appellate courts as may have been or may
hereafter be established by local law. The local courts of
the Virgin Islands shall have jurisdiction over all causes of
action in the Virgin Islands over which any court established
by the Constitution and laws of the United States does not
have exclusive jurisdiction.
``(b) Practice and Procedure.--The rules governing the
practice and procedure of the courts established by local law
and those prescribing the qualifications and duties of the
judges and officers thereof, oaths and bonds, and the times
and places of holding court shall be governed by local law or
the rules promulgated by those courts.''.
(4) Income tax matters.--Section 22 of the Revised Organic
Act of the Virgin Islands (48 U.S.C. 1612) is amended to read
as follows:
``SEC. 22. JURISDICTION OVER INCOME TAX MATTERS.
``The United States District Court for the District of the
Virgin Islands shall have exclusive jurisdiction over all
criminal and civil proceedings in the Virgin Islands with
respect to the income tax laws applicable to the Virgin
Islands, except the ancillary laws relating to the income tax
enacted by the legislature of the Virgin Islands. Any act or
failure to act with respect to the income tax laws applicable
to the Virgin Islands which would constitute a criminal
offense described in chapter 75 of subtitle F of the Internal
Revenue Code of 1986 shall constitute an offense against the
Government of the Virgin Islands and may be prosecuted in the
name of the Government of the Virgin Islands by the
appropriate officers thereof in the United States District
Court for the District of the Virgin Islands without the
request or consent of the United States attorney for the
Virgin Islands.''.
(5) Appellate jurisdiction.--Section 23A of the Revised
Organic Act of the Virgin Islands (48 U.S.C. 1613a) is
amended--
(A) by striking ``District Court of the Virgin Islands''
each place it appears and inserting ``United States District
Court for the District of the Virgin Islands''; and
(B) in subsection (b), by striking ``pursuant to section
24(a) of this Act: Provided, That no more than one of them
may be a judge of a court established by local law.'' and
inserting ``pursuant to chapter 13 of title 28, United States
Code, or a recalled senior judge of the former District Court
of the Virgin Islands. The chief judge of the United States
Court of Appeals for the Third Circuit may assign to the
appellate division a judge of a court of record of the Virgin
Islands, except that no more than 1 of the judges sitting in
the appellate division at any session may be a judge of a
court established by local law.''.
(r) Additional References.--Any reference in any provision
of law to the ``District Court of the Virgin Islands'' shall,
on and after the effective date of this section, be deemed to
be a reference to the United States District Court for the
District of the Virgin Islands.
(s) Effective Date.--This section and the amendments made
by this section shall take effect at the end of the 90-day
period beginning on the date of the enactment of this Act.
Any complaint or proceeding pending in the District Court of
the Virgin Islands on the effective date of this section may
be pursued to final determination in the United States
District Court for the District of the Virgin Islands, the
United States Court of Appeals for the Third Circuit, the
United States Court of Appeals for the Federal Circuit, and
the Supreme Court of the United States.
SEC. 5205. EFFECTIVE DATE.
Except as provided in section 5204(s), this subtitle and
the amendments made by this subtitle shall take effect on the
date of the enactment of this Act.
Subtitle C--Bankruptcy Judgeships
SEC. 5301. SHORT TITLE.
This subtitle may be cited as the ``Enhanced Bankruptcy
Judgeship Act of 2005''.
SEC. 5302. AUTHORIZATION FOR ADDITIONAL BANKRUPTCY
JUDGESHIPS.
The following judgeships shall be filled in the manner
prescribed in section 152(a)(1) of title 28, United States
Code, for the appointment of bankruptcy judges provided for
in section 152(a)(2) of such title:
(1) 1 additional bankruptcy judgeship for the eastern and
western districts of Arkansas.
(2) 1 additional bankruptcy judgeship for the eastern
district of California.
(3) 2 additional bankruptcy judgeships for the middle
district of Florida.
(4) 2 additional bankruptcy judgeships for the northern
district of Georgia.
(5) 1 additional bankruptcy judgeship for the southern
district of Georgia.
[[Page H10598]]
(6) 1 additional bankruptcy judgeship for the eastern
district of Kentucky.
(7) 1 additional bankruptcy judgeship for the district of
Maryland.
(8) 3 additional bankruptcy judgeships for the eastern
district of Michigan.
(9) 1 additional bankruptcy judgeship for the southern
district of New York.
(10) 1 additional bankruptcy judgeship for the western
district of Pennsylvania.
(11) 1 additional bankruptcy judgeship for the western
district of Tennessee.
(12) 1 additional bankruptcy judgeship for the eastern
district of Texas.
(13) 1 additional bankruptcy judgeship for the district of
Utah.
SEC. 5303. TEMPORARY BANKRUPTCY JUDGESHIPS.
(a) Authorization for Additional Temporary Bankruptcy
Judgeships.--The following judgeships shall be filled in the
manner prescribed in section 152(a)(1) of title 28, United
States Code, for the appointment of bankruptcy judges
provided for in section 152(a)(2) of such title:
(1) 1 additional bankruptcy judgeship for the northern
district of Florida.
(2) 2 additional bankruptcy judgeships for the middle
district of Florida.
(3) 1 additional bankruptcy judgeship for the northern
district of Indiana.
(4) 1 additional bankruptcy judgeship for the northern
district of Mississippi.
(5) 1 additional bankruptcy judgeship for the district of
Nevada.
(6) 1 additional bankruptcy judgeship for the western
district of North Carolina.
(7) 1 additional bankruptcy judgeship for the southern
district of Ohio.
(b) Vacancies.--
(1) Districts with single appointments.--Except as provided
in paragraph (2), the first vacancy occurring in the office
of bankruptcy judge in each of the judicial districts set
forth in subsection (a)--
(A) occurring 5 years or more after the appointment date of
the bankruptcy judge appointed under subsection (a) to such
office, and
(B) resulting from the death, retirement, resignation, or
removal of a bankruptcy judge,
shall not be filled.
(2) Middle district of florida.--The 1st and 2d vacancies
in the office of bankruptcy judge in the middle district of
Florida--
(A) occurring 5 years or more after the respective 1st and
2d appointment dates of the bankruptcy judges appointed under
subsection (a)(2), and
(B) resulting from the death, retirement, resignation, or
removal of a bankruptcy judge,
shall not be filled.
(c) Eligibility for Subsequent Appointments.--A judge
holding office in any of the districts enumerated in
subsection (a) shall, at the expiration of the term of the
judge (other than by reason of paragraph (1)(B) or (2)(B) of
subsection (b)), be eligible for reappointment as a
bankruptcy judge in that district.
SEC. 5304. CONVERSION OF EXISTING TEMPORARY BANKRUPTCY
JUDGESHIPS.
(a) Judgeships Authorized by Public Law 102-361.--The
following temporary bankruptcy judgeships authorized by the
following paragraphs of section 3(a) of Public Law 102-361,
as amended by section 307 of Public Law 104-317 (28 U.S.C.
152 note), are converted to permanent bankruptcy judgeships
under section 152(a)(2) of title 28, United States Code:
(1) The temporary bankruptcy judgeship for the district of
Delaware authorized by paragraph (3).
(2) The temporary bankruptcy judgeship for the southern
district of Illinois authorized by paragraph (4).
(3) The temporary bankruptcy judgeship for the district of
Puerto Rico authorized by paragraph (7).
(b) Judgeships Authorized by Public Law 109-8.--The
following temporary bankruptcy judgeships authorized by the
following subparagraphs of section 1223(b)(1) of the
Bankruptcy Abuse Prevention and Consumer Protection Act of
2005 (Public Law 109-8), are converted to permanent
bankruptcy judgeships under section 152(a)(2) of title 28,
United States Code:
(1) The 4 temporary bankruptcy judgeships for the district
of Delaware authorized by subparagraph (C).
(2) The temporary bankruptcy judgeship for the southern
district of Georgia authorized by subparagraph (E).
(3) One of the 3 temporary bankruptcy judgeships for the
district of Maryland authorized by subparagraph (F).
(4) The temporary bankruptcy judgeship for the eastern
district of Michigan authorized by subparagraph (G).
(5) The temporary bankruptcy judgeship for the district of
New Jersey authorized by subparagraph (I).
(6) The temporary bankruptcy judgeship for the northern
district of New York authorized by subparagraph (K).
(7) The temporary bankruptcy judgeship for the southern
district of New York authorized by subparagraph (L).
(8) The temporary bankruptcy judgeship for the eastern
district of North Carolina authorized by subparagraph (M).
(9) The temporary bankruptcy judgeship for the eastern
district of Pennsylvania authorized by subparagraph (N).
(10) The temporary bankruptcy judgeship for the district of
South Carolina authorized by subparagraph (S).
(11) The temporary bankruptcy judgeship for the western
district of Tennessee authorized by subparagraph (Q).
SEC. 5305. GENERAL PROVISIONS.
(a) Table of judgeships.--In order that the table contained
in section 152(a)(2) of title 28, United States Code, will,
with respect to each judicial district, reflect the changes
in the total number of bankruptcy judgeships authorized under
sections 5302 and 5304, such table is amended to read as
follows:
``Districts Judges
``Alabama:
``Northern.......................................................5
``Middle.........................................................2
``Southern.......................................................2
``Alaska...........................................................2
``Arizona..........................................................7
``Arkansas:
``Eastern and Western............................................4
``California:
``Northern.......................................................9
``Eastern........................................................7
``Central.......................................................21
``Southern.......................................................4
``Colorado.........................................................5
``Connecticut......................................................3
``Delaware.........................................................6
``District of Columbia.............................................1
``Florida:
``Northern.......................................................1
``Middle........................................................10
``Southern.......................................................5
``Georgia:
``Northern......................................................10
``Middle.........................................................3
``Southern.......................................................4
``Hawaii...........................................................1
``Idaho............................................................2
``Illinois:
``Northern......................................................10
``Central........................................................3
``Southern.......................................................2
``Indiana:
``Northern.......................................................3
``Southern.......................................................4
``Iowa:
``Northern.......................................................2
``Southern.......................................................2
``Kansas...........................................................4
``Kentucky:
``Eastern........................................................3
``Western........................................................3
``Louisiana:
``Eastern........................................................2
``Middle.........................................................1
``Western........................................................3
``Maine............................................................2
``Maryland.........................................................6
``Massachusetts....................................................5
``Michigan:
``Eastern........................................................8
``Western........................................................3
``Minnesota........................................................4
``Mississippi:
``Northern.......................................................1
``Southern.......................................................2
``Missouri:
``Eastern........................................................3
``Western........................................................3
``Montana..........................................................1
``Nebraska.........................................................2
``Nevada...........................................................3
``New Hampshire....................................................1
``New Jersey.......................................................9
``New Mexico.......................................................2
``New York:
``Northern.......................................................3
``Southern......................................................11
``Eastern........................................................6
``Western........................................................3
``North Carolina:
``Eastern........................................................3
``Middle.........................................................2
``Western........................................................2
``North Dakota.....................................................1
``Ohio:
``Northern.......................................................8
``Southern.......................................................7
``Oklahoma:
``Northern.......................................................2
``Eastern........................................................1
``Western........................................................3
``Oregon...........................................................5
``Pennsylvania:
``Eastern........................................................6
``Middle.........................................................2
``Western........................................................5
``Puerto Rico......................................................3
``Rhode Island.....................................................1
``South Carolina...................................................3
``South Dakota.....................................................2
``Tennessee:
``Eastern........................................................3
``Middle.........................................................3
``Western........................................................6
``Texas:
``Northern.......................................................6
``Eastern........................................................3
``Southern.......................................................6
``Western........................................................4
``Utah.............................................................4
``Vermont..........................................................1
``Virgin Islands...................................................0
``Virginia:
``Eastern........................................................5
``Western........................................................3
``Washington:
``Eastern........................................................2
``Western........................................................5
``West Virginia:
``Northern.......................................................1
[[Page H10599]]
``Southern.......................................................1
``Wisconsin:
``Eastern........................................................4
``Western........................................................2
``Wyoming.......................................................1.''.
(b) Sense of Congress.--It is the sense of the Congress
that bankruptcy judges in the eastern district of California
should conduct bankruptcy proceedings on a daily basis in
Bakersfield, California.
SEC. 5306. EFFECTIVE DATE.
This subtitle and the amendments made by this subtitle
shall take effect on the date of the enactment of this Act.
Subtitle D--Ninth Circuit Reorganization
SEC. 5401. SHORT TITLE.
This subtitle may be cited as the ``Judicial Administration
and Improvements Act of 2005''.
SEC. 5402. DEFINITIONS.
In this subtitle:
(1) Former ninth circuit.--The term ``former ninth
circuit'' means the ninth judicial circuit of the United
States as in existence on the day before the effective date
of this subtitle.
(2) New ninth circuit.--The term ``new ninth circuit''
means the ninth judicial circuit of the United States
established by the amendment made by section 5403(2)(A).
(3) Twelfth circuit.--The term ``twelfth circuit'' means
the twelfth judicial circuit of the United States established
by the amendment made by section 5403(2)(B).
SEC. 5403. NUMBER AND COMPOSITION OF CIRCUITS.
Section 41 of title 28, United States Code, is amended--
(1) in the matter preceding the table, by striking
``thirteen'' and inserting ``fourteen''; and
(2) in the table--
(A) by striking the item relating to the ninth circuit and
inserting the following:
California, Guam, Hawaii, Northern Mariana Islands.'';.................
and
(B) by inserting after the item relating to the eleventh
circuit the following:
Alaska, Arizona, Idaho, Montana, Nevada, Oregon, Washington.''.........
SEC. 5404. NUMBER OF CIRCUIT JUDGES.
The table contained in section 44(a) of title 28, United
States Code, as amended by section 5202(c) of this Act, is
further amended--
(1) by striking the item relating to the ninth circuit and
inserting the following:
``Ninth.......................................................19'';....
and
(2) by inserting after the item relating to the eleventh
circuit the following:
``Twelfth.....................................................14''.....
SEC. 5405. PLACES OF CIRCUIT COURT.
The table contained in section 48(a) of title 28, United
States Code, is amended--
(1) by striking the item relating to the ninth circuit and
inserting the following:
Honolulu, Pasadena, San Francisco.'';..................................
and
(2) by inserting after the item relating to the eleventh
circuit the following:
Las Vegas, Missoula, Phoenix, Portland, Seattle.''.....................
SEC. 5406. ASSIGNMENT OF CIRCUIT JUDGES.
Each circuit judge of the former ninth circuit who is in
regular active service and whose official duty station on the
day before the effective date of this subtitle--
(1) is in California, Guam, Hawaii, or the Northern Mariana
Islands shall be a circuit judge of the new ninth circuit as
of such effective date; and
(2) is in Alaska, Arizona, Idaho, Montana, Nevada, Oregon,
or Washington shall be a circuit judge of the twelfth circuit
as of such effective date.
SEC. 5407. ELECTION OF ASSIGNMENT BY SENIOR JUDGES.
Each judge who is a senior circuit judge of the former
ninth circuit on the day before the effective date of this
subtitle may elect to be assigned to the new ninth circuit or
the twelfth circuit as of such effective date and shall
notify the Director of the Administrative Office of the
United States Courts of such election.
SEC. 5408. SENIORITY OF JUDGES.
The seniority of each judge--
(1) who is assigned under section 5406, or
(2) who elects to be assigned under section 5407,
shall run from the date of commission of such judge as a
judge of the former ninth circuit.
SEC. 5409. APPLICATION TO CASES.
The following apply to any case in which, on the day before
the effective date of this subtitle, an appeal or other
proceeding has been filed with the former ninth circuit:
(1) Except as provided in paragraph (3), if the matter has
been submitted for decision, further proceedings with respect
to the matter shall be had in the same manner and with the
same effect as if this subtitle had not been enacted.
(2) If the matter has not been submitted for decision, the
appeal or proceeding, together with the original papers,
printed records, and record entries duly certified, shall, by
appropriate orders, be transferred to the court to which the
matter would have been submitted had this subtitle been in
full force and effect at the time such appeal was taken or
other proceeding commenced, and further proceedings with
respect to the case shall be had in the same manner and with
the same effect as if the appeal or other proceeding had been
filed in such court.
(3) If a petition for rehearing en banc is pending on or
after the effective date of this subtitle, the petition shall
be considered by the court of appeals to which it would have
been submitted had this subtitle been in full force and
effect at the time that the appeal or other proceeding was
filed with the court of appeals.
SEC. 5410. TEMPORARY ASSIGNMENT OF CIRCUIT JUDGES AMONG
CIRCUITS.
Section 291 of title 28, United States Code, is amended by
adding at the end the following:
``(c) The chief judge of the Ninth Circuit may, in the
public interest and upon request by the chief judge of the
Twelfth Circuit, designate and assign temporarily any circuit
judge of the Ninth Circuit to act as circuit judge in the
Twelfth Circuit.
``(d) The chief judge of the Twelfth Circuit may, in the
public interest and upon request by the chief judge of the
Ninth Circuit, designate and assign temporarily any circuit
judge of the Twelfth Circuit to act as circuit judge in the
Ninth Circuit.''.
SEC. 5411. TEMPORARY ASSIGNMENT OF DISTRICT JUDGES AMONG
CIRCUITS.
Section 292 of title 28, United States Code, is amended by
adding at the end the following:
``(f) The chief judge of the United States Court of Appeals
for the Ninth Circuit may, in the public interest--
``(1) upon request by the chief judge of the Twelfth
Circuit, designate and assign 1 or more district judges
within the Ninth Circuit to sit upon the Court of Appeals of
the Twelfth Circuit, or a division thereof, whenever the
business of that court so requires; and
``(2) designate and assign temporarily any district judge
within the Ninth Circuit to hold a district court in any
district within the Twelfth Circuit.
``(g) The chief judge of the United States Court of Appeals
for the Twelfth Circuit may in the public interest--
``(1) upon request by the chief judge of the Ninth Circuit,
designate and assign 1 or more district judges within the
Twelfth Circuit to sit upon the Court of Appeals of the Ninth
Circuit, or a division thereof, whenever the business of that
court so requires; and
``(2) designate and assign temporarily any district judge
within the Twelfth Circuit to hold a district court in any
district within the Ninth Circuit.
``(h) Any designations or assignments under subsection (f)
or (g) shall be in conformity with the rules or orders of the
court of appeals of, or the district within, as applicable,
the circuit to which the judge is designated or assigned.''.
SEC. 5412. ADMINISTRATION.
The court of appeals for the ninth circuit as constituted
on the day before the effective date of this subtitle may
take such administrative action as may be required to carry
out this subtitle and the amendments made by this subtitle.
Such court shall cease to exist for administrative purposes 2
years after the date of the enactment of this Act.
SEC. 5413. EFFECTIVE DATE.
This subtitle and the amendments made by this subtitle
shall take effect no later than December 31, 2006.
Subtitle E--Authorization of Appropriations
SEC. 5501. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for each of fiscal
years 2006 through 2009 such sums as are necessary to carry
out subtitles B, C, and D of this title, including such sums
as may be necessary to provide appropriate space and
facilities for the judicial positions created by this title.
Funds appropriated pursuant to this section in any fiscal
year shall remain available until expended.
TITLE VI--COMMITTEE ON RESOURCES
Subtitle A--Miscellaneous Amendments Relating to Mining
Sec. 6101. Fees for recordation and location of mining claims.
Sec. 6102. Patents for mining or mill site claims.
Sec. 6103. Mineral examinations for mining on certain lands.
Sec. 6104. Mineral development lands available for purchase.
Sec. 6105. National mining and minerals policy to encourage and promote
the productive second use of lands.
Sec. 6106. Regulations.
Sec. 6107. Protection of national parks and wilderness areas.
Subtitle B--Disposal of Public Lands
Chapter 1--Disposal of Certain Public Lands in Nevada
Sec. 6201. Short title.
Sec. 6202. Definitions.
Sec. 6203. Land conveyance.
Sec. 6204. Disposition of proceeds.
Chapter 2--Disposal of Certain Public Lands in Idaho
Sec. 6211. Short title.
Sec. 6212. Definitions.
Sec. 6213. Land conveyance.
Sec. 6214. Disposition of proceeds.
Subtitle C--Oil shale
Sec. 6301. Oil shale and tar sands amendments.
Subtitle D--Sale and Conveyance of Federal Land
Sec. 6401. Collection of receipts from the sale of Federal lands.
[[Page H10600]]
Subtitle A--Miscellaneous Amendments Relating to Mining
SEC. 6101. FEES FOR RECORDATION AND LOCATION OF MINING
CLAIMS.
(a) Dimensions of Mining Claims.--Section 2320 of the
Revised Statutes (30 U.S.C. 23) is amended by striking the
second and third sentences and inserting the following: ``A
mining claim located after May 10, 1872, whether located by
one or more persons, and including a claim located before
exposure of the vein or lode, may equal, but shall not
exceed, 1,500 feet in length along the vein or lode, and
shall extend no more than 300 feet on each side of the middle
of the vein at the surface, nor shall any claim be limited by
any mining regulation to less than 25 feet on each side of
the middle of the vein at the surface, except where adverse
rights existing on May 10, 1872, render such limitation
necessary.''.
(b) Rights Secured by Claim Maintenance Fees.--Section 2322
of the Revised Statutes (30 U.S.C. 26) is amended by
inserting ``(a) Rights of Locators, Generally.--'' before the
first sentence, and by adding at the end the following:
``(b) Rights Secured by Maintenance Fees.--Prior to
issuance of a patent, timely payment of the claim maintenance
fee secures the rights of the holder of a mining claim, mill
site, or tunnel site, both prior to and after discovery of
valuable mineral deposits, to use and occupy public lands
under the provisions of the general mining law of the United
States (as that term is defined in section 2324 of the
Revised Statutes) for mineral prospecting, exploration,
development, mining, milling, and processing of minerals,
reclamation of the claimed lands, and uses reasonably
incident thereto. Except for the location fee and the
maintenance fees in section 2324 of the Revised Statutes (30
U.S.C. 28), and the patent prices in sections 2325, 2326,
2333, and 2337 of the Revised Statutes (30 U.S.C. 29, 30, 37,
and 42), no other fees or fair market value assessments shall
be applied to prospecting, exploration, development, mining,
processing, or reclamation, and uses reasonably incident
thereto.''.
(c) Patent Requirements.--Section 2325 of the Revised
Statutes (30 U.S.C. 29) is amended--
(1) in the second sentence by striking ``, or at any time''
and inserting ``shall include a processing fee of $2,500 for
the first claim or site, and $50 for each additional claim
contained therein, and at any time''; and
(2) in the fourth sentence by inserting ``and if the
applicant has complied with the law of discovery'' after
``publication''.
(d) Mining District Regulations by Miners.--Section 2324 of
the Revised Statutes (30 U.S.C. 28) is amended to read as
follows:
``Sec. 2324. (a) Authority to Make Regulations.--The miners
of each mining district may make regulations not in conflict
with the laws of the United States, or with the laws of the
State or Territory in which the district is situated,
governing the location, manner of recording, amount of work
necessary to hold possession of a mining claim, subject to
the following requirements:
``(1) The location must be distinctly marked on the ground
so that its boundaries can be readily traced.
``(2) All records of mining claims made after May 10, 1872,
shall contain the name or names of the locators, the date of
the location, and such a description of the claim or claims
located by reference to some natural object or permanent
monument as will identify the claim.
``(b) Recordation of Mining Claims and Abandonment.--The
locator of an unpatented lode or placer mining claim, mill
site, or tunnel site located after October 21, 1976, pursuant
to the general mining law of the United States shall, within
90 days after the date of location of such claim, file in the
office designated by the Secretary of the Interior a copy of
the official record of the notice of location or certificate
of location, including a description of the location of the
mining claim or mill or tunnel site sufficient to locate the
claimed lands on the ground. The failure to file such
instruments as required by this subsection is deemed
conclusively to constitute an abandonment of the mining
claim, mill site, or tunnel site by the owner. Such
recordation by itself shall not render valid any claim that
would not be otherwise valid under applicable law.
``(c) Location Fee.--Notwithstanding any other provision of
law, for every mining claim, mill site, or tunnel site
located after the date of the enactment of this subsection
pursuant to the general mining law of the United States, the
locator shall, at the time the location notice is recorded
pursuant to subsection (b), pay a location fee of $100 per
claim. This fee shall be in addition to the first year's
claim maintenance fee required by subsection (d). Payment of
the location fee required by this subsection and the
maintenance fee required by subsection (d) secures to the
locator the right to use and occupy the public lands for
purposes of the general mining law of the United States.
``(d) Schedule of Claim Maintenance Fees.--(1) The holder
of each unpatented mining claim, mill site, or tunnel site
located pursuant to the general mining law of the United
States on or after the date of the enactment of this
subsection shall pay to the Secretary of the Interior, on or
before September 1 of each year, a claim maintenance fee per
claim. Except as provided in paragraph (2), such claim
maintenance fee shall be paid in the following amounts:
``(A) $35 per claim for each of the first through fifth
maintenance years, beginning with the year the claim was
recorded.
``(B) $70 per claim for each of the sixth through tenth
maintenance years.
``(C) $125 per claim for each of the eleventh through
fifteenth maintenance years.
``(D) $150 per claim for the sixteenth maintenance year and
each year thereafter.
``(2) Notwithstanding any other provision of law, for each
unpatented mining claim located after the date of enactment
of this subsection pursuant to the general mining law of the
United States from which minerals are produced, and in lieu
of the fee otherwise required by paragraph (1), the holder
shall pay to the Secretary of the Interior an annual
maintenance fee of $200 per claim.
``(3) The holder of each unpatented mining claim, mill
site, or tunnel site located pursuant to the general mining
law of the United States before the date of enactment of this
subsection shall pay to the Secretary of the Interior for
such claim--
``(A) except as provided in subparagraph (B), the claim
maintenance fee that applied before such date of enactment;
or
``(B) the claim maintenance fee that applies under
paragraph (1) or (2), based on the number of years since the
original location of the claim, if before the date the
payment is due the claim holder--
``(i) notifies the Secretary; and
``(ii) pays to the Secretary a transfer fee of $100.
``(e) Adjustment of Claim Maintenance Fees.--Claim
maintenance fees under subsection (d) shall not be subject to
adjustment.
``(f) Work Requirement.--(1) The holder of each unpatented
mining claim, mill site, or tunnel site located pursuant to
the general mining law of the United States after the date of
enactment of this subsection, and any holder of a claim that
has transferred such claim to the claim maintenance fee
schedule under subsection (d), shall conduct physical
evaluation and development of the claim or of any contiguous
block of claims of which the claim is a part. Exploration and
mining activities conducted pursuant to a notice, approved
plan of operations, or, in the case of split estate lands, a
comparable State or county notice or approval, demonstrates
compliance with this section.
``(2) If physical evaluation of the claim is not carried
out in accordance with paragraph (1) before the end of the
fifth, tenth, or fifteenth maintenance year (beginning with
the maintenance year in which the claim is filed),
respectively, the claim holder shall be required to pay in
the next maintenance year the location fee described in
subsection (c), in addition to the annual claim maintenance
fee required to be paid for the next maintenance year.
``(g) Waiver of Claim Maintenance Fee Adjustments and Work
Requirement.--If a delay in meeting the work requirements
under subsection (f) is the result of pending administrative
proceedings, rights-of-way disputes, or litigation concerning
issuance or validity of any permit or authorization required
under Federal, State, or local law for physical evaluation
and development of the claim--
``(1) any increase in the claim maintenance fee that would
otherwise apply under subsection (d) and the work
requirements under subsection (f) shall be suspended for the
claim; and
``(2) claim maintenance fees required to be paid each year
for the claim shall be the same as the fee that applied for
the year in which the delay first occurred, and no additional
location fee will be owed.
``(h) Time of Payment.--The claim maintenance fee required
under subsection (d) for any maintenance year shall be paid
before the commencement of the maintenance year, except that,
for the maintenance year in which the location is made the
locator shall pay the claim maintenance fee and the location
fee imposed under subsection (c) at the time the location
notice is recorded with the Bureau of Land Management. The
Director of the Bureau of Land Management, after consultation
with the Governor of Alaska and by not later than 1 year
after the date of enactment of this subsection, may establish
a claim maintenance fee filing date for Alaska claim holders
that is not later than 60 days after September 1.
``(i) Small Miner Claim Maintenance Fee.--(1) In the case
of a claim for which the holder certifies in writing to the
Secretary that, on the date the payment of any claim
maintenance fee under this section was due, the claim holder
and all related parties held not more than 10 mining claims,
mill sites, or tunnel sites, or any combination thereof, on
public lands--
``(A) the claim maintenance fee shall be $25 per claim per
year for the life of the claim or site held by the claim
holder; and
``(B) subsection (f) shall not apply.
``(2) In this subsection:
``(A) With respect to any claim holder, the term `related
party' means--
``(i) the spouse and dependent children (as defined in
section 152 of the Internal Revenue Code of 1986 (26 U.S.C.
152), as in effect on the date of the enactment of this
paragraph of the claim holder; and
``(ii) a person who controls, is controlled by, or is under
common control with the claim holder.
``(B) The terms `control', `controls', and `controlled'
include actual control, legal control, and the power to
exercise control, through or by common directors, officers,
stockholders, a voting trust, or a holding company or
investment company, or any other means.
[[Page H10601]]
``(j) Failure to Pay.--(1) Failure to pay a claim
maintenance fee or a location fee for an unpatented mining
claim as required by this section shall subject an unpatented
mining claim, mill site, or tunnel site to forfeiture by the
claim holder as provided in this subsection.
``(2) The Secretary of the Interior shall provide the claim
holder with notice of the failure and the opportunity to cure
within 45 calendar days after the claim holder's receipt of
the notice.
``(3) The claim holder must, within such 45-day period, pay
twice the amount of maintenance fee that would otherwise have
been required to be timely paid. The Secretary of the
Interior shall specify the amount that must be paid in the
notice under paragraph (2).
``(4) Failure by the claim holder to make a timely and
proper payment in the amount specified in the notice by the
Secretary of the Interior, within 45 days after the claim
holder's receipt of the notice, shall constitute a forfeiture
of the mining claim, mill site, or tunnel site by the claim
holder by operation of law.
``(k) Failure of Co-Owner to Contribute.--Upon the failure
of any one of several co-owners of a claim to contribute the
co-owner's proportion of any claim maintenance fee required
by this section, the co-owners who have paid the claim
maintenance fee, at the expiration of the year in which any
unpaid amount was due, may give such delinquent co-owner
personal notice in writing or notice by publication in the
newspaper of record for the county in which the land that is
subject to the claim or mill site is located, at least once a
week for 90 days. If at the expiration of such 90-day period
such delinquent co-owner fails or refuses to contribute the
co-owner's proportion of the claim maintenance fee required
by this section, the co-owner's interest in the claim shall
become the property of the other co-owners who have paid the
claim maintenance fee. The co-owners who have assumed the
interest in the claims shall notify the Secretary of the
Interior within 30 days of the assumption.
``(l) Oil Shale Claims Subject to Claim Maintenance Fees
Under Energy Policy Act of 1992.-- This section shall not
apply to any oil shale claim for which a fee is required to
be paid under section 2511(e)(2) of the Energy Policy Act of
1992 (30 U.S.C. 242).
``(m) General Mining Law of the United States Defined; Rule
of Construction.--(1) In this section the term `general
mining law of the United States' means the provisions of law
codified in chapters 2, 12, 12A, 15, and 16 of title 30,
United States Code, and in sections 161 and 162 of such
title.
``(2) Subsections (b) and (c) shall be construed in
accordance with judicial decisions under section 314 of the
Federal Land Policy and Management Act of 1976, as in effect
before the enactment of those subsections.''.
(e) Conforming Amendments.--
(1) The Federal Land Policy and Management Act of 1976 is
amended--
(A) by striking section 314 (43 U.S.C. 1744);
(B) in the table of contents preceding title I by striking
the item relating to section 314; and
(C) in section 302(a) by striking ``section 314, section
603,'' and inserting ``section 603''.
(2) Section 22 of the Alaska Native Claims Settlement Act
is amended by striking ``and section 314 of the Federal Land
Policy and Management Act of 1976 (43 U.S.C. 1744)''.
(3) Section 31(f) of the Mineral Leasing Act (30 U.S.C.
188(f)) is amended by striking ``section 314 of the Federal
Land Policy and Management Act of 1976 (43 U.S.C. 1744)'' and
inserting ``subsections (b) and (c) of section 2320 of the
Revised Statutes (30 U.S.C. 23)''.
(4) Section 2511(e) of the Energy Policy Act of 1992 (30
U.S.C. 242(e)) is amended by striking the last sentence.
SEC. 6102. PATENTS FOR MINING OR MILL SITE CLAIMS.
(a) Repeal of Limitation on Use of Funds for Applications
for Patent.--Section 408(a) of the Department of the
Interior, Environment, and Related Agencies Appropriations
Act, 2006 (Public Law 109-54) is repealed.
(b) Payment Amounts.--The Revised Statutes are amended--
(1) in section 2325 (30 U.S.C. 29) by striking ``five
dollars per acre'' and inserting ``$1,000 per acre or fair
market value, whichever is greater'';
(2) in section 2326 (30 U.S.C. 30) by striking ``five
dollars per acre'' and inserting ``$1,000 per acre or fair
market value, whichever is greater;'';
(3) in section 2333 (30 U.S.C. 37)--
(A) by striking ``five dollars per acre'' and inserting
``$1,000 per acre or fair market value, whichever is
greater;''; and
(B) by striking ``two dollars and fifty cents per acre''
and inserting ``$1,000 per acre or fair market value,
whichever is greater'';
(4) in section 2337 (30 U.S.C. 42)--
(A) in subsection (a) by striking ``made at the same rate''
and all that follows through the end of that sentence and
inserting ``at the rate of $1,000 per acre or fair market
value, whichever is greater.''; and
(B) in subsection (b) by striking ``made at the rate'' and
all that follows through the end of that sentence and
inserting ``at the rate of $1,000 per acre or fair market
value, whichever is greater.''; and
(5) in section 2325 (30 U.S.C. 29) by adding at the end the
following: ``For purposes of this section and sections 2326,
2333, and 2337 of the Revised Statutes, fair market value for
the patenting of mining claims or mill sites shall be
determined by appraisals prepared by an appraiser certified
or qualified under applicable professional criteria or State
law, in accordance with the Uniform Appraisal Standards for
Federal Land Acquisitions and the Uniform Standards of
Professional Appraisal Practice, submitted by the applicant
for a patent to the Secretary of the Interior upon
application for patent, that is completed within 120 days
prior to submission of the application for patent.''.
(c) Mineral Development Work Requirements.--Section 2325 of
the Revised Statutes (30 U.S.C. 29) is amended--
(1) by striking ``five hundred dollars' '' and inserting
``$7,500''; and
(2) by striking ``labor has been expended'' and inserting
``mineral development work has been performed''.
(d) Patent Applicants in Limbo.--If the holder of an
unpatented mining claim or mill site submitted an application
for a mineral patent and paid the patent service charges
required by regulation at the time the application was
submitted, and the Secretary of the Interior did not complete
all actions to process the application before April 26, 1996,
the holder of such claim may, at the holder's election, have
such application processed under rules that applied before
the date of the enactment of this Act.
(e) Alternative Valuable Mineral Deposit Criteria.--Section
2325 of the Revised Statutes is further amended by inserting
``(a) Manner for Obtaining Patent, Generally.--'' before the
first sentence, and by adding at the end the following:
``(b) Alternative Valuable Mineral Deposit Criteria.--
``(1) Claims subject to ongoing activities.--The holder of
an unpatented mining claim or mill site who is conducting
mining activities that meet the definition of a mine under
section 3(h) of the Federal Mine Safety and Health Act of
1972 (30 U.S.C. 802(h)) and whose activities with respect to
that claim or site are described in section 4 of such Act (30
U.S.C. 803) may receive a patent for any unpatented mining
claims on which mining activities are occurring or any mill
sites, within the boundaries of an approved plan of
operations or a comparable State or county approval. Upon
confirmation by the Secretary that minerals being mined are
locatable in accordance with Federal law and that actual
sales of minerals have taken place, all Federal lands within
those boundaries are eligible for patent upon compliance with
this section and sections 2327 and 2329 of the Revised
Statutes (30 U.S.C. 34, 35).
``(2) Disclosed claims and mill sites.--The holder of an
unpatented mining claim or mill site whose proven and
probable reserves are publicly disclosed in compliance with
the Securities Act of 1933 (15 U.S.C. 77a) or the Securities
Exchange Act of 1934 (15 U.S.C. 78a) may receive a patent for
any such unpatented mining claim containing such reserves or
for any mill site within the boundaries of a plan of
operations or a comparable State or county approval for such
reserves. All Federal lands within those boundaries are
eligible for patent upon compliance with this section and
sections 2327 and 2329 of the Revised Statutes (30 U.S.C. 34,
35).
``(c) Mineral Examinations.--
``(1) In general.--In order to process patent applications
in a timely and responsible manner, upon the request of a
patent applicant, the Secretary of the Interior shall allow
the applicant to fund a qualified third-party examiner from a
list maintained by the Bureau of Land Management to conduct a
mineral examination of the mining claims or mill sites
contained in a patent application as set forth in this
section and sections 2333 and 2337 of the Revised Statutes
(30 U.S.C. 37, 42). The Bureau of Land Management shall have
the sole responsibility to maintain the list of qualified
third-party examiners.
``(2) Training.--The Director of the Bureau of Land
Management shall provide training in the conduct of mineral
examinations to qualified individuals. The Director may
charge fees to cover the costs of the training.
``(3) Qualified third-party examiner defined.--In this
subsection the term `qualified third-party examiner' means a
person who is a registered geologist or registered
professional mining engineer licensed to practice within the
State in which the claims are located.
``(d) Disposition of Proceeds.--The gross proceeds of
conveyances of land under this section and sections 2319,
2330, 2332, 2333, and 2337 of the Revised Statutes (30 U.S.C.
22, 36, 37, 38, 42) shall be used as follows:
``(1) 10 percent shall be deposited into the Federal Energy
and Mineral Resource Professional Development Fund.
``(2) 20 percent shall be available to the Secretary of the
Army for use, through the Corps of Engineers, for the
Restoration of Abandoned Mine Sites Program and section 560
of the Water Resources Development Act of 1999.
``(3) 70 percent shall be deposited into the General Fund
of the Treasury.
``(e) Issuing Patents.--If no adverse claim has been filed
with the register and the receiver of the proper land office
at the expiration of the 60-day period beginning on the date
of publication of the notice that an application for mineral
patent has been filed under section 2325, 2333 and 2337 of
the Revised Statutes (30 U.S.C. 29, 37, 42), the Secretary
shall issue the patent not later than 24 months after the
date on which the application for patent was filed.
[[Page H10602]]
``(f) Small Miner Patent Adjudication and Mineral
Development Work Requirements.--The holder of 10 claims or
less who applies for a mineral patent under this section or a
direct purchase under section 2319 of the Revised Statutes
(30 U.S.C. 22) shall pay one-fifth of the processing fees and
perform one-fifth of the mineral development work required
under this section and section 2319 (30 U.S.C. 22).''.
SEC. 6103. MINERAL EXAMINATIONS FOR MINING ON CERTAIN LANDS.
Section 302 of the Federal Land Policy and Management Act
of 1976 (43 U.S.C. 1732) is amended by adding at the end the
following:
``(e) The Secretary shall not require a mineral examination
report, otherwise required to be prepared under regulations
promulgated pursuant to this Act, to approve a plan of
operations under such regulations for mining claims and mill
sites located on withdrawn lands if such mining claims, mill
sites, and blocks of such mining claims and mill sites are
contiguous to patented or unpatented mining claims or mill
sites where mineral development activities, including mining,
have been conducted as authorized by law or regulation.''.
SEC. 6104. MINERAL DEVELOPMENT LANDS AVAILABLE FOR PURCHASE.
Section 2319 of the Revised Statutes (30 U.S.C. 22) is
amended--
(1) by inserting ``(a) Lands Open to Purchase by
Citizens.--'' before the first sentence; and
(2) by adding at the end the following:
``(b) Availability for Purchase.--Notwithstanding any other
provision of law and in compliance with subsection (c), the
Secretary of the Interior shall make mineral deposits and the
lands that contain them, including lands in which the
valuable mineral deposit has been depleted, available for
purchase to facilitate sustainable economic development. This
subsection shall not apply with respect to any unit of the
National Park System, National Wildlife Refuge System,
National Wild and Scenic Rivers System, or National Trails
System, or to any National Conservation Area, any National
Recreation Area, any National Monument, or any unit of the
National Wilderness Preservation System.
``(c) Application.--The holder of mining claims, mill
sites, and blocks of such mining claims and mill sites
contiguous to patented or unpatented mining claims or mill
sites where mineral development activities, including mining,
have been conducted as authorized by law or regulation and on
which mineral development work has been performed may apply
to purchase Federal lands that are subject to the claims. The
filing of the proper application shall include such
processing fees as are required by section 2325 of the
Revised Statutes (30 U.S.C. 29). The applicant or applicants,
or their predecessors must present evidence of mineral
development work performed on the Federal lands identified
and submitted for purchase. Mineral development work upon
aggregation must average not less than $7,500 per mining
claim or mill site within the Federal lands identified and
applied for.
``(d) Land Surveys.--For the purpose of this section, and
notwithstanding section 2334 of the Revised Statutes (30
U.S.C. 39), land surveys of the Federal lands applied for
shall be paid for by the applicant and shall be completed
either by a land surveyor registered in the State where the
land is situated, or by such a surveyor also designated by
the Bureau of Land Management as a mineral surveyor, if such
mineral surveyors are available, willing, and able to
complete such surveys without delay at a cost comparable to
the charges of ordinary registered land surveyors.
``(e) Deadline for Conveyance; Price.--Notwithstanding any
other provision of law, and not later than one year after the
date of the approval of any survey required under subsection
(d), the Secretary of the Interior shall convey to the
applicant, in return for a payment of $1,000 per acre or fair
market value, whichever is greater, all right, title, and
interest in and to the Federal land, subject to valid
existing rights and the terms and conditions of the Act of
August 30, 1890 (26 Stat. 391). For purposes of this
subsection, fair market value for mineral development lands
available for purchase shall be determined by appraisals
prepared by an appraiser certified or qualified under
applicable professional criteria or State law, in accordance
with the Uniform Appraisal Standards for Federal Land
Acquisitions and the Uniform Standards of Professional
Appraisal Practice, submitted by the applicant to the
Secretary of the Interior upon application for purchase, that
is completed within 120 days prior to submission of the
application. Fair market value for the interest in the land
owned by the United States shall be exclusive of, and without
regard to, the mineral deposits in the land or the use of
such land for mineral activities.
``(f) Environmental Liability.--Notwithstanding any other
Federal, State or local law, the United States shall not be
responsible for--
``(1) investigating or disclosing the condition of any
property to be conveyed under this section; and
``(2) environmental remediation, waste management, or
environmental compliance activities arising from its
ownership, occupancy, or management of land and interests
therein conveyed under this section with respect to
conditions existing at or on the land at the time of the
conveyance.
``(g) Mineral Development Work Defined.--In this section
the term `mineral development work' means geologic,
geochemical or geophysical surveys; road building;
exploration drilling, trenching, and exploratory sampling by
any other means; construction of underground workings for the
purpose of conducting exploration; mine development work;
mineral production from underground or surface mines;
environmental baseline studies; construction of environmental
protection and monitoring systems; environmental reclamation;
construction of power and water distribution facilities;
engineering, metallurgical, geotechnical, and economic
feasibility studies; land surveys; and any other work
reasonably incident to mineral development.''.
SEC. 6105. NATIONAL MINING AND MINERALS POLICY TO ENCOURAGE
AND PROMOTE THE PRODUCTIVE SECOND USE OF LANDS.
Section 101 of the Mining and Minerals Policy Act of 1970
(30 U.S.C. 21a) is amended--
(1) in the first sentence--
(A) in clause (2) by inserting ``including through remining
where appropriate'' after ``needs,'';
(B) in clause (3) by striking ``and'' after the comma at
the end; and
(C) by striking the period at the end and inserting the
following: ``, and (5) facilitate the productive second use
of lands used for mining and energy production.'';
(2) in the second sentence by striking ``oil shale and
uranium'' and inserting ``oil shale, and uranium, whether
located onshore or offshore''; and
(3) in the third sentence--
(A) by striking ``the Secretary of the Interior'' and
inserting ``the head of each Federal department and of each
independent agency''; and
(B) by striking ``his''.
SEC. 6106. REGULATIONS.
The Secretary of the Interior shall issue final regulations
implementing this subtitle by not later than 180 days after
the date of the enactment of this Act.
SEC. 6107. PROTECTION OF NATIONAL PARKS AND WILDERNESS AREAS.
Subject to valid existing rights, nothing in sections 6202,
6203, 6204, 6205, and 6206 of this subtitle shall be
construed as affecting any lands within the boundary of any
unit of the National Park System, National Wildlife Refuge
System, National Wild and Scenic Rivers System, or National
Trails System, or any National Conservation Area, any
National Recreation Area, any National Monument, or any unit
of the National Wilderness Preservation System as of the date
of the enactment of this Act.
Subtitle B--Disposal of Public Lands
CHAPTER 1--DISPOSAL OF CERTAIN PUBLIC LANDS IN NEVADA
SEC. 6201. SHORT TITLE.
This chapter may be cited as the ``Northern Nevada
Sustainable Development in Mining Act''.
SEC. 6202. DEFINITIONS.
In this chapter:
(1) Claimant.--The term ``Claimant'' means Coeur Rochester,
Inc.
(2) County.--The term ``County'' means Pershing County,
Nevada.
(3) General mining law.--The term ``general mining law''
means the provisions of law codified in chapters 2, 12, 12A,
15, and 16 of title 30, United States Code, and in sections
161 and 162 of such title.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 6203. LAND CONVEYANCE.
(a) Conveyance of Land.--Notwithstanding any other
provision of law, and not later than 90 days after the date
of the enactment of this Act, the Secretary shall convey to
the Claimant, in return for a payment of $500 per acre, all
right, title, and interest, subject to the terms and
conditions of subsection (c), in the approximately 7,000
acres of Federal lands subject to Claimant's mining claims
maintained under the general mining law and depicted on the
Rochester Sustainable Development Project map on file with
the Committee on Resources of the House of Representatives.
(b) Exemption From Review, Etc.--Any conveyance of land
under this chapter is not subject to review, consultation, or
approval under any other Federal law.
(c) Terms and Conditions of Conveyance.--
(1) No impact on legal obligations.--Conveyance of the
lands pursuant to subsection (a) shall not affect Claimant's
legal obligations to comply with applicable Federal mine
closure or mine land reclamation laws, or with any other
applicable Federal or State requirement relating to closure
of the Rochester Mine and use of the land comprising such
mine, including any requirement to prepare any environmental
impact statement under the National Environmental Policy Act
of 1969. Federal reclamation and closure obligations shall
not be construed to require removal of infrastructure
identified by Claimant as being usable by a post-mining land
use.
(2) Title to materials and minerals.--Notwithstanding any
other provision of law, Claimant shall own and have title to
all spent ore, waste rock and tailings, and other materials
located on lands conveyed pursuant to subsection (a).
(3) Valid existing rights.--All lands conveyed pursuant to
subsection (a) shall be subject to valid existing rights
existing as of the date of transfer of title, and Claimant
[[Page H10603]]
shall succeed to the rights and obligations of the United
States with respect to any mining claim, mill site claim,
lease, right-of-way, permit, or other valid existing right to
which the property is subject.
(4) Environmental liability.--Notwithstanding any other
Federal, State or local law, the United States shall not be
responsible for--
(A) investigating or disclosing the condition of any
property to be conveyed under this chapter; and
(B) environmental remediation, waste management, or
environmental compliance activities arising from its
ownership, occupancy, or management of land and interests
therein conveyed under this chapter with respect to
conditions existing at or on the land at the time of the
conveyance.
SEC. 6204. DISPOSITION OF PROCEEDS.
The gross proceeds of conveyances of land under this
chapter shall be used as follows:
(1) Such sums as are necessary shall be used to cover 100
percent of the administrative costs, not to exceed $20,000,
incurred by the Nevada State Office and the Winnemucca Field
Office of the Bureau of Land Management in conducting the
conveyance under this chapter.
(2) $500,000 shall be paid directly to the State of Nevada
for use in the State's abandoned mined land program.
(3) $100,000 shall be paid directly to Pershing County,
Nevada.
(4) Proceeds remaining after the payments pursuant to
paragraphs (1) through (3) shall be deposited in the general
fund of the Treasury.
CHAPTER 2--DISPOSAL OF CERTAIN PUBLIC LANDS IN IDAHO
SEC. 6211. SHORT TITLE.
This chapter may be cited as the ``Central Idaho
Sustainable Development in Mining Act''.
SEC. 6212. DEFINITIONS.
In this chapter:
(1) Claimant.--The term ``Claimant'' means TDS LLC, an
affiliated company of L&W Stone Corporation.
(2) County.--The term ``County'' means Custer County,
Idaho.
(3) General mining law.--The term ``general mining law''
means the provisions of law codified in chapters 2, 12A, 15,
and 16 of title 30, United States Code, and in sections 161
and 162 of such title.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 6213. LAND CONVEYANCE.
(a) Conveyance of Land.--Notwithstanding any other
provision of law, and not later than 90 days after the date
of the enactment of this Act, the Secretary shall convey to
the Claimant, in return for a payment of $1,000 per acre, all
right, title, and interest, subject to the terms and
conditions of subsection (c), in the approximately 519.7
acres of Federal lands subject to Claimant's mining claims
maintained under the general mining law and depicted as
``proposed land exchange alignment'' on the Central Idaho
Sustainable Development Project map on file with the
Committee on Resources of the House of Representatives.
(b) Exemption From Review, Etc.--Any conveyance of land
under this chapter is not subject to review, consultation, or
approval under any other Federal law.
(c) Terms and Conditions of Conveyance.--
(1) Transfer of fee title in federal lands.--
Notwithstanding any other provision of law, full fee title in
approximately 519.7 acres of Federal lands described in
subsection (a) shall be transferred to Claimant as depicted
as ``proposed land exchange alignment'' on the Central Idaho
Sustainable Development Project map.
(2) Valid existing rights.--All lands conveyed pursuant to
subsection (a) shall be subject to valid existing rights
existing as of the date of transfer of title, and Claimant
shall succeed to the rights and obligations of the United
States with respect to any mining claim, mill site claim,
lease, right-of-way, permit, or other valid existing right to
which the property is subject.
(3) Environmental liability.--Notwithstanding any other
Federal, State, or local law, the United States shall not be
responsible for--
(A) investigating or disclosing the condition of any
property to be conveyed under this chapter; and
(B) environmental remediation, waste management, or
environmental compliance activities arising from its
ownership, occupancy, or management of land and interests
therein conveyed under this chapter with respect to
conditions existing at or on the land at the time of the
conveyance.
SEC. 6214. DISPOSITION OF PROCEEDS.
Within one year of the completion of the conveyance under
this chapter, the gross proceeds of the conveyance shall be
used as follows:
(1) Such sums as are necessary shall be used to cover 100
percent of the administrative costs, not to exceed $15,000,
incurred by the Idaho State Office and the Challis Field
Office of the Bureau of Land Management in conducting
conveyances under this chapter.
(2) $200,000 shall be paid directly to the State of Idaho
for use in the State Parks program.
(3) $200,000 shall be paid directly to Custer County,
Idaho.
(4) Proceeds remaining after the payments pursuant to
paragraphs (1) through (3) shall be deposited in the general
fund of the Treasury.
Subtitle C--Oil Shale
SEC. 6301. OIL SHALE AND TAR SANDS AMENDMENTS.
(a) Commercial Leasing of Oil Shale and Tar Sands.--Section
369(e) of the Energy Policy Act of 2005 (Public Law 109-58)
is amended to read as follows:
``(e) Commencement of Commercial Leasing of Oil Shale and
Tar Sand.--Not later than 365 days after publication of the
final regulation required by subsection (d), the Secretary
shall hold the first oil shale and tar sands lease sales
under the regulation, offering for lease a minimum of 35
percent of the Federal lands that are geologically
prospective for oil shale and tar sands within Colorado,
Utah, and Wyoming. The environmental impact statement
developed in support of the commercial leasing program for
oil shale and tar sands as required by subsection (c) is
deemed to provide adequate environmental analysis for all oil
shale and tar sands lease sales conducted within the first 10
years after promulgation of the regulation, and such sales
shall not be subject to further environmental analysis.''.
(b) Repeal of Requirement to Establish Payments.--Section
369(o) of the Energy Policy Act of 2005 (Public Law 109-58;
119 Stat. 728; 42 U.S.C. 15927) is repealed.
(c) Treatment of Revenues.--Section 21 of the Mineral
Leasing Act (30 U.S.C. 241) is amended by adding at the end
the following:
``(e) Revenues.--
``(1) In general.--Notwithstanding the provisions of
section 35, all revenues received from and under an oil shale
or tar sands lease shall be disposed of as provided in this
subsection.
``(2) Royalty rates for commercial leases.--
``(A) Initial production.--For the first 10 years after
initial production under each oil shale or tar sands lease
issued under the commercial leasing program established under
subsection (d), the Secretary shall set the royalty rate at
not less than 1 percent nor more than 3 percent of the gross
value of production. However, the initial production period
royalty rate set by the Secretary shall not apply to
production occurring more than 15 years after the date of
issuance of the lease.
``(B) Subsequent periods.--After the periods of time
specified in subparagraph (A), the Secretary shall set the
royalty rate on each oil shale or tar sands lease issued
under the commercial leasing program established under
subsection (d) at not less than 6 percent nor more than 9
percent of the gross value of production.
``(C) Reduction.--The Secretary shall reduce any royalty
otherwise required to be paid under subparagraphs (A) and (B)
under any oil shale or tar sands lease on a sliding scale
based upon market price, with a 10 percent reduction if the
monthly average price of NYMEX West Texas Intermediate crude
oil at Cushing, Oklahoma, (WTI) drops below $50 (in 2005
dollars) for the month in which the production is sold, and
an 80 percent reduction if the monthly average price of WTI
drops below $30 (in 2005 dollars) for the month in which the
production is sold.
``(3) Disposition of revenues.--
``(A) Deposit.--The Secretary shall deposit into a separate
account in the Treasury all revenues derived from any oil
shale or tar sands lease.
``(B) Allocations to states and local political
subdivisions.--The Secretary shall allocate 50 percent of the
revenues deposited into the account established under
subparagraph (A) to the State within the boundaries of which
the leased lands are located, with a portion of that to be
paid directly by the Secretary to the State's local political
subdivisions as provided in this paragraph.
``(C) Transmission of allocations.--
``(i) In general.--Not later than the last business day of
the month after the month in which the revenues were
received, the Secretary shall transmit--
``(I) to each State two-thirds of such State's allocations
under subparagraph (B), and in accordance with clauses (ii)
and (iii) to certain county-equivalent and municipal
political subdivisions of such State a total of one-third of
such State's allocations under subparagraph (B), together
with all accrued interest thereon; and
``(II) the remaining balance of such revenues deposited
into the account that are not allocated under subparagraph
(B), together with interest thereon, shall be transmitted to
the miscellaneous receipts account of the Treasury, except
that until a lease has been in production for 10 years 80
percent of such remaining balance derived from a lease shall
be paid in accordance with subclause (I).
``(ii) Allocations to certain county-equivalent political
subdivisions.--The Secretary shall under clause (i)(I) make
equitable allocations of the revenues to county-equivalent
political subdivisions that the Secretary determines are
closely associated with the leasing and production of oil
shale and tar sands, under a formula that the Secretary shall
determine by regulation.
``(iii) Allocations to municipal political subdivisions.--
The initial allocation to each county-equivalent political
subdivision under clause (ii) shall be further allocated to
the county-equivalent political subdivision and any municipal
political subdivisions located partially or wholly within the
boundaries of the county-equivalent political subdivision on
an equitable basis under a formula that the Secretary shall
determine by regulation.
[[Page H10604]]
``(D) Investment of deposits.--The deposits in the Treasury
account established under this section shall be invested by
the Secretary of the Treasury in securities backed by the
full faith and credit of the United States having maturities
suitable to the needs of the account and yielding the highest
reasonably available interest rates as determined by the
Secretary of the Treasury.
``(E) Use of funds.--A recipient of funds under this
subsection may use the funds for any lawful purpose as
determined by State law. Funds allocated under this
subsection to States and local political subdivisions may be
used as matching funds for other Federal programs without
limitation. Funds allocated to local political subdivisions
under this subsection may not be used in calculation of
payments to such local political subdivisions under programs
for payments in lieu of taxes or other similar programs.
``(F) No accounting required.--No recipient of funds under
this subsection shall be required to account to the Federal
Government for the expenditure of such funds, except as
otherwise may be required by law.
``(4) Definitions.--In this subsection:
``(A) County-equivalent political subdivision.--The term
`county-equivalent political subdivision' means a political
jurisdiction immediately below the level of State government,
including a county, parish, borough in Alaska, independent
municipality not part of a county, parish, or borough in
Alaska, or other equivalent subdivision of a State.
``(B) Municipal political subdivision.--The term `municipal
political subdivision' means a municipality located within
and part of a county, parish, borough in Alaska, or other
equivalent subdivision of a State.''.
Subtitle D--Sale and Conveyance of Federal Land
SEC. 6401. COLLECTION OF RECEIPTS FROM THE SALE OF FEDERAL
LANDS.
(a) In General.--Notwithstanding any other law, the
Secretary shall make the lands described in subsection (b)
available for immediate sale through a competitive sale
process at fair market value. Requirements under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.)
shall not apply to the sale of lands under this section.
(b) Lands Described.--The lands referred to in subsection
(a) are the following:
(1) Poplar Point (Transfer and Conveyance of Properties in
the District of Columbia, Map Number 869/80460, Dated July
2005, p. 28 of 28).
(2) U.S. Reservations 44, 45, 46, 47, 48 and 49 (Map Number
869/80460, Dated July 2005, p. 13 of 28).
(3) U.S. Reservation 251 (Map Number 869/80460, Dated July
2005, p. 14 of 28).
(4) U.S. Reservation 8 (Map Number 869/80460, Dated July
2005, p. 15 of 28).
(5) U.S. Reservation 17A (Map Number 869/80460, Dated July
2005, p. 20 of 28).
(6) U.S. Reservation 484 (Map Number 869/80460, Dated July
2005, p. 21 of 28).
(7) U.S. Reservation 721, 722 and 723 (Map Number 869/
80460, Dated July 2005, p. 25 of 28).
(8) Certain land adjacent to Robert F. Kennedy Stadium
Parking Lot (Transfer and Conveyance of Properties in the
District of Columbia, Map Number 869/80460, Dated July 2005,
p. 26 of 28).
(9) United States Reservation 243, 244, 245, and 247
(Transfer and Conveyance of Properties in the District of
Columbia, Map Number 869/80460, Dated July 2005, p. 22 of
28).
The Secretary may retain from sale proceeds and spend without
further appropriation up to $1,000,000 each year to implement
land sales under this subsection, including hiring
contractors and appraisers
(c) Poplar Point.--
(1) Retention of funds.--The Secretary may retain
$10,000,000 from funds received from the sale of land under
subsection (b)(1) and spend such funds without further
appropriations for the purposes of complying with
subparagraph (2).
(2) Continuity of operation.--Before the sale and
development of land referred to in subparagraph (b)(1), the
Secretary shall ensure that the existing facilities and
related properties (including necessary easements and
utilities related thereto) occupied or otherwise used by the
National Park Service are either withheld from any sale and
remain in operation at its current location or will be
relocated to suitable replacement facilities along the
Anacostia River in the District of Columbia using funds made
available by subparagraph (c)(1).
(d) Conveyance of Lands to the District of Columbia.--
(1) In general.--Notwithstanding any other law, the
Secretary shall immediately convey all right, title, and
interest of the United States in the lands described in this
subsection to the District of Columbia upon enactment of this
section. Requirements under the National Environmental Policy
Act (42 U.S.C. 4321 et seq.) shall not apply to the
conveyance of lands under this subsection.
(2) Lands described.--The lands referred to in this
subsection are as follows:
(A) United States Reservation 128, 129, 130, 298 and 299
(Transfer and Conveyance of Properties in the District of
Columbia, Map Number 869/80460, Dated July 2005, p. 23 of
28).
(B) United States Reservation 174 (Map Number 869/80460,
Dated July 2005, p. 27 of 28).
(C) United States Reservation 277A and 277C (Map Number
869/80460, Dated July 2005, p. 16 of 28).
(D) United States Reservation 343D and 343E (Map Number
869/80460, Dated July 2005, p. 24 or 28).
(E) United States Reservation 404 (Map Number 869/80460,
Dated July 2005, p. 12 of 28).
(F) United States Reservation 451 (Map Number 869/80460,
Dated July 2005, p. 11 of 28).
(G) United States Reservation 470 (Transfer and Conveyance
of Properties in the District of Columbia, Map Number 869/
80460, Dated July 2005, p. 17 of 28).
(e) Transfer of Administrative Jurisdiction Over Certain
Properties.--
(1) In general.--Upon the date of the enactment of this
subsection, administrative jurisdiction over each of the
following properties (owned by the United States and as
depicted on listed maps) is hereby transferred from the
District of Columbia to the United States for administration
by the Secretary of the Interior through the Director of the
National Park Service:
(A) An unimproved portion of Audubon Terrace Northwest,
located east of Linnean Avenue Northwest, that is within U.S.
Reservation 402 (Audubon Terrace, NW, Transfer and Conveyance
of Properties in the District of Columbia, Map Number 869/
80460, Dated July 2005, p. 2 of 28) .
(B) An unimproved portion of Barnaby Street Northwest,
north of Aberfoyle Place Northwest, that abuts U.S.
Reservation 545 (Barnaby Avenue, NW, Map Number 869/80460,
Dated July 2005, p. 3 of 28).
(C) A portion of Canal Street Southwest, and a portion of V
Street Southwest, each which abuts U.S. Reservation (Canal
and V Streets, SW, Map Number 869/80460, Dated July 2005, p.
3 of 28).
(D) Unimproved streets and alleys at Fort Circle Park
located within the boundaries of U.S. Reservation 497 (Fort
Circle Park, Map Number 869/80460, Dated July 2005, p. 5 of
28)''.
(E) An unimproved portion of Western Avenue Northwest,
north of Oregon Avenue Northwest, that abuts U.S. Reservation
339 (Western Avenue, NW, Map Number 869/80460, Dated July
2005, p. 6 of 28).
(F) An unimproved portion of 17th Street Northwest, south
of Shepard Street Northwest, that abuts U.S. Reservation 339
(17th Street, NW, Map Number 869/80460, Dated July 2005, p. 7
of 28).
(G) An unimproved portion of 30th Street Northwest, north
of Broad Branch Road, Northwest, that is within the
boundaries of U.S. Reservation 515 (30th Street, NW, Map
Number 869/80460, Dated July 2005, p. 8 of 28).
(H) Land over I-395 at Washington Avenue, Southwest (Lands
over I-395 at Washington Avenue, SW, Map Number 869/80460,
Dated July 2005, p. 9 of 28).
(I) A portion of U.S. Reservation 357 at Whitehaven Parkway
Northwest, previously transferred to the District of Columbia
in conjunction with the former proposal for a residence for
the Mayor of the District of Columbia (Portion of U.S.
Reservation 357, Transfer and Conveyance of Properties in the
District of Columbia, Map Number 869/80460, Dated July 2005,
p. 10 of 28).
(2) Use of certain property for memorial.--In the case of
the property for which administrative jurisdiction is
transferred under paragraph (1)(H), the property shall be
used as the site for the establishment of a memorial to honor
disabled veterans of the United States Armed Forces
authorized to be established by the Disabled Veterans' LIFE
Memorial Foundation by Public Law 106-348 (114 Stat. 1358; 40
U.S.C. 8903 note), except that the District of Columbia shall
retain administrative jurisdiction over the subsurface area
beneath the site for tunnels, walls, footings, and related
facilities.
TITLE VII--COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
SEC. 7001. EXTENSION OF VESSEL TONNAGE DUTIES.
(a) Extension of Duties.--Section 36 of the Act entitled
``An Act to provide revenue, equalize duties and encourage
the industries of the United States, and for other
purposes'', approved August 5, 1909 (36 Stat. 111; 46 U.S.C.
App. 121), is amended--
(1) by striking ``9 cents per ton'' and all that follows
through ``2002,'' the first place it appears and inserting
``4.5 cents per ton, not to exceed in the aggregate 22.5
cents per ton in any one year, for fiscal years 2006 through
2010,''; and
(2) by striking ``27 cents per ton'' and all that follows
through ``2002,'' and inserting ``13.5 cents per ton, not to
exceed 67.5 cents per ton per annum, for fiscal years 2006
through 2010,''.
(b) Conforming Amendment.--The Act entitled ``An Act
concerning tonnage duties on vessels entering otherwise than
by sea'', approved March 8, 1910 (36 Stat. 234; 46 U.S.C.
App. 132), is amended by striking ``9 cents per ton'' and all
that follows through ``and 2 cents'' and inserting ``4.5
cents per ton, not to exceed in the aggregate 22.5 cents per
ton in any one year, for fiscal years 2006 through 2010, and
2 cents''.
(c) Offsetting Receipts.--Increased tonnage charges
collected as a result of the amendments made by subsection
(a) shall be deposited in the general fund of the Treasury as
offsetting receipts of the department in which the Coast
Guard is operating and ascribed to Coast Guard activities
related to marine safety, search and rescue, and aids to
navigation.
TITLE VIII--COMMITTEE ON WAYS AND MEANS
SEC. 8001. SHORT TITLE.
This title may be cited as the ``Work, Marriage, and Family
Promotion Reconciliation Act of 2005''.
[[Page H10605]]
SEC. 8002. TABLE OF CONTENTS.
The table of contents of this title is as follows:
Sec. 8001. Short title.
Sec. 8002. Table of contents.
Sec. 8003. References.
Sec. 8004. Findings.
Subtitle A--TANF
Sec. 8101. Purposes.
Sec. 8102. Family assistance grants.
Sec. 8103. Promotion of family formation and healthy marriage.
Sec. 8104. Supplemental grant for population increases in certain
States.
Sec. 8105. Elimination of high performance bonus.
Sec. 8106. Contingency fund.
Sec. 8107. Use of funds.
Sec. 8108. Repeal of Federal loan for State welfare programs.
Sec. 8109. Universal engagement and family self-sufficiency plan
requirements.
Sec. 8110. Work participation requirements.
Sec. 8111. Maintenance of effort.
Sec. 8112. Performance improvement.
Sec. 8113. Data collection and reporting.
Sec. 8114. Direct funding and administration by Indian tribes.
Sec. 8115. Research, evaluations, and national studies.
Sec. 8116. Study by the Census Bureau.
Sec. 8117. Definition of assistance.
Sec. 8118. Technical corrections.
Sec. 8119. Fatherhood program.
Sec. 8120. State option to make TANF programs mandatory partners with
one-stop employment training centers.
Sec. 8121. Sense of the Congress.
Sec. 8122. Drug testing of applicants for and recipients of assistance.
Subtitle B--Child care
Sec. 8201. Entitlement funding.
Subtitle C--Child support
Sec. 8301. Federal matching funds for limited pass through of child
support payments to families receiving TANF.
Sec. 8302. State option to pass through all child support payments to
families that formerly received TANF.
Sec. 8303. Mandatory review and adjustment of child support orders for
families receiving TANF.
Sec. 8304. Mandatory fee for successful child support collection for
family that has never received TANF.
Sec. 8305. Report on undistributed child support payments.
Sec. 8306. Decrease in amount of child support arrearage triggering
passport denial.
Sec. 8307. Use of tax refund intercept program to collect past-due
child support on behalf of children who are not minors.
Sec. 8308. Garnishment of compensation paid to veterans for service-
connected disabilities in order to enforce child support
obligations.
Sec. 8309. Maintenance of technical assistance funding.
Sec. 8310. Maintenance of Federal Parent Locator Service funding.
Sec. 8311. Information comparisons with insurance data.
Sec. 8312. Tribal access to the Federal Parent Locator Service.
Sec. 8313. Reimbursement of Secretary's costs of information
comparisons and disclosure for enforcement of obligations
on Higher Education Act loans and grants.
Sec. 8314. Technical amendment relating to cooperative agreements
between States and Indian tribes.
Sec. 8315. State option to use statewide automated data processing and
information retrieval system for interstate cases.
Sec. 8316. Modification of rule requiring assignment of support rights
as a condition of receiving TANF.
Sec. 8317. State option to discontinue certain support assignments.
Sec. 8318. Technical correction.
Sec. 8319. Reduction in rate of reimbursement of child support
administrative expenses.
Sec. 8320. Incentive payments.
Subtitle D--Child welfare
Sec. 8401. Extension of authority to approve demonstration projects.
Sec. 8402. Elimination of limitation on number of waivers.
Sec. 8403. Elimination of limitation on number of States that may be
granted waivers to conduct demonstration projects on same
topic.
Sec. 8404. Elimination of limitation on number of waivers that may be
granted to a single State for demonstration projects.
Sec. 8405. Streamlined process for consideration of amendments to and
extensions of demonstration projects requiring waivers.
Sec. 8406. Availability of reports.
Sec. 8407. Clarification of eligibility for foster care maintenance
payments and adoption assistance.
Sec. 8408. Clarification regarding Federal matching of certain
administrative costs under the foster care maintenance
payments program.
Sec. 8409. Technical correction.
Sec. 8410. Technical correction.
Subtitle E--Supplemental security income
Sec. 8501. Review of State agency blindness and disability
determinations.
Sec. 8502. Payment of certain lump sum benefits in installments under
the Supplemental Security Income program.
Subtitle F--State and local flexibility
Sec. 8601. Program coordination demonstration projects.
Subtitle G--Repeal of continued dumping and subsidy offset
Sec. 8701. Repeal of continued dumping and subsidy offset.
Subtitle H--Effective date
Sec. 8801. Effective date.
SEC. 8003. REFERENCES.
Except as otherwise expressly provided, wherever in this
title an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
amendment or repeal shall be considered to be made to a
section or other provision of the Social Security Act.
SEC. 8004. FINDINGS.
The Congress makes the following findings:
(1) The Temporary Assistance for Needy Families (TANF)
Program established by the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (Public Law 104-193)
has succeeded in moving families from welfare to work and
reducing child poverty.
(A) There has been a dramatic increase in the employment of
current and former welfare recipients. The percentage of
working recipients reached an all-time high in fiscal year
1999 and continued steady in fiscal years 2000 and 2001. In
fiscal year 2003, 31.3 percent of adult recipients were
counted as meeting the work participation requirements. All
States but one met the overall participation rate standard in
fiscal year 2003, as did the District of Columbia and Puerto
Rico.
(B) Earnings for welfare recipients remaining on the rolls
have also increased significantly, as have earnings for
female-headed households. The increases have been
particularly large for the bottom 2 income quintiles, that
is, those women who are most likely to be former or present
welfare recipients.
(C) Welfare dependency has plummeted. As of June 2004,
1,969,909 families and 4,727,291 individuals were receiving
assistance. Accordingly, the number of families in the
welfare caseload and the number of individuals receiving cash
assistance declined 55 percent and 61 percent, respectively,
since the enactment of TANF.
(D) The child poverty rate continued to decline between
1996 and 2003, falling 14 percent from 20.5 to 17.6 percent.
Child poverty rates for African-American and Hispanic
children have also fallen dramatically during the past 7
years.
(2) As a Nation, we have made substantial progress in
reducing teen pregnancies and births, slowing increases in
nonmarital childbearing, and improving child support
collections and paternity establishment.
(A) The birth rate to teenagers declined 30 percent from
its high in 1991 to 2002. The 2002 teenage birth rate of 43.0
per 1,000 women aged 15-19 is the lowest recorded birth rate
for teenagers.
(B) During the period from 1991 through 2001, teenage birth
rates fell in all States and the District of Columbia, Puerto
Rico, Guam, and the Virgin Islands. Declines also have
spanned age, racial, and ethnic groups. There has been
success in lowering the birth rate for both younger and older
teens. The birth rate for those 15-17 years of age has
declined 40 percent since 1991, and the rate for those 18 and
19 has declined 23 percent. The rate for African American
teens--until recently the highest--has declined the most--42
percent from 1991 through 2002.
(C) Since the enactment of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996, child support
collections within the child support enforcement system have
grown every year, increasing from $12,000,000,000 in fiscal
year 1996 to over $21,000,000,000 in fiscal year 2003. The
number of paternities established or acknowledged in fiscal
year 2003 (over 1,500,000) includes a more than 100 percent
increase through in-hospital acknowledgement programs--
862,043 in 2003 compared to 324,652 in 1996. Child support
collections were made in nearly 8,000,000 cases in fiscal
year 2003, significantly more than the almost 4,000,000 cases
having a collection in 1996.
(3) The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 gave States great flexibility in
the use of Federal funds to develop innovative programs to
help families leave welfare and begin employment and to
encourage the formation of 2-parent families.
(A) Total Federal and State TANF expenditures in fiscal
year 2003 were $26,300,000,000, up from $25,400,000,000 in
fiscal year 2002 and $22,600,000,000 in fiscal year 1999.
This increased spending is attributable to significant new
investments in supportive services in the TANF program, such
as child care and activities to support work.
(B) Since the welfare reform effort began there has been a
dramatic increase in work participation (including
employment, community service, and work experience) among
welfare recipients, as well as an unprecedented reduction in
the caseload because recipients have left welfare for work.
[[Page H10606]]
(C) States are making policy choices and investment
decisions best suited to the needs of their citizens.
(i) To expand aid to working families, almost all States
disregard a portion of a family's earned income when
determining benefit levels.
(ii) Most States increased the limits on countable assets
above the former Aid to Families with Dependent Children
(AFDC) program. Every State has increased the vehicle asset
level above the prior AFDC limit for a family's primary
automobile.
(iii) States are experimenting with programs to promote
marriage and paternal involvement. Over half of the States
have eliminated restrictions on 2-parent families. Many
States use TANF, child support, or State funds to support
community-based activities to help fathers become more
involved in their children's lives or strengthen
relationships between mothers and fathers.
(4) However, despite this success, there is still progress
to be made. Policies that support and promote more work,
strengthen families, and enhance State flexibility are
necessary to continue to build on the success of welfare
reform.
(A) Significant numbers of welfare recipients still are not
engaged in employment-related activities. While all States
have met the overall work participation rates required by
law, in an average month, only 41 percent of all families
with an adult participated in work activities that were
countable toward the State's participation rate. In fiscal
year 2003, four jurisdictions failed to meet the more
rigorous 2-parent work requirements, and 25 jurisdictions
(States and territories) are not subject to the 2-parent
requirements, most because they moved their 2-parent cases to
separate State programs where they are not subject to a
penalty for failing the 2-parent rates.
(B) In 2002, 34 percent of all births in the U.S. were to
unmarried women. And, with fewer teens entering marriage, the
proportion of births to unmarried teens has increased
dramatically (80 percent in 2002 versus 30 percent in 1970).
The negative consequences of out-of-wedlock birth on the
mother, the child, the family, and society are well
documented. These include increased likelihood of welfare
dependency, increased risks of low birth weight, poor
cognitive development, child abuse and neglect, and teen
parenthood, and decreased likelihood of having an intact
marriage during adulthood.
(C) There has been a dramatic rise in cohabitation as
marriages have declined. It is estimated that 40 percent of
children are expected to live in a cohabiting-parent family
at some point during their childhood. Children in single-
parent households and cohabiting-parent households are at
much higher risk of child abuse than children in intact
married families.
(D) Children who live apart from their biological fathers,
on average, are more likely to be poor, experience
educational, health, emotional, and psychological problems,
be victims of child abuse, engage in criminal behavior, and
become involved with the juvenile justice system than their
peers who live with their married, biological mother and
father. A child living with a single mother is nearly 5 times
as likely to be poor as a child living in a married-couple
family. In 2003, in married-couple families, the child
poverty rate was 8.6 percent, and in households headed by a
single mother the poverty rate was 41.7 percent.
(5) Therefore, it is the sense of the Congress that
increasing success in moving families from welfare to work,
as well as in promoting healthy marriage and other means of
improving child well-being, are very important Government
interests and the policy contained in part A of title IV of
the Social Security Act (as amended by this title) is
intended to serve those ends.
Subtitle A--TANF
SEC. 8101. PURPOSES.
Section 401(a) (42 U.S.C. 601(a)) is amended--
(1) in the matter preceding paragraph (1), by striking
``increase'' and inserting ``improve child well-being by
increasing'';
(2) in paragraph (1), by inserting ``and services'' after
``assistance'';
(3) in paragraph (2), by striking ``parents on government
benefits'' and inserting ``families on government benefits
and reduce poverty''; and
(4) in paragraph (4), by striking ``two-parent families''
and inserting ``healthy, 2-parent married families, and
encourage responsible fatherhood''.
SEC. 8102. FAMILY ASSISTANCE GRANTS.
(a) Extension of Authority.--Section 403(a)(1)(A) (42
U.S.C. 603(a)(1)(A)) is amended--
(1) by striking ``1996, 1997, 1998, 1999, 2000, 2001, 2002,
and 2003'' and inserting ``2006 through 2010''; and
(2) by inserting ``payable to the State for the fiscal
year'' before the period.
(b) State Family Assistance Grant.--Section 403(a)(1)(C)
(42 U.S.C. 603(a)(1)(C)) is amended by striking ``fiscal year
2003'' and inserting ``each of fiscal years 2006 through
2010''.
(c) Matching Grants for the Territories.--Section
1108(b)(2) (42 U.S.C. 1308(b)(2)) is amended by striking
``1997 through 2003'' and inserting ``2006 through 2010''.
SEC. 8103. PROMOTION OF FAMILY FORMATION AND HEALTHY
MARRIAGE.
(a) State Plans.--Section 402(a)(1)(A) (42 U.S.C.
602(a)(1)(A)) is amended by adding at the end the following:
``(vii) Encourage equitable treatment of married, 2-parent
families under the program referred to in clause (i).''.
(b) Healthy Marriage Promotion Grants; Repeal of Bonus for
Reduction of Illegitimacy Ratio.--Section 403(a)(2) (42
U.S.C. 603(a)(2)) is amended to read as follows:
``(2) Healthy marriage promotion grants.--
``(A) Authority.--The Secretary shall award competitive
grants to States, territories, and tribal organizations for
not more than 50 percent of the cost of developing and
implementing innovative programs to promote and support
healthy, married, 2-parent families.
``(B) Healthy marriage promotion activities.--Funds
provided under subparagraph (A) shall be used to support any
of the following programs or activities:
``(i) Public advertising campaigns on the value of marriage
and the skills needed to increase marital stability and
health.
``(ii) Education in high schools on the value of marriage,
relationship skills, and budgeting.
``(iii) Marriage education, marriage skills, and
relationship skills programs, that may include parenting
skills, financial management, conflict resolution, and job
and career advancement, for non-married pregnant women and
non-married expectant fathers.
``(iv) Pre-marital education and marriage skills training
for engaged couples and for couples or individuals interested
in marriage.
``(v) Marriage enhancement and marriage skills training
programs for married couples.
``(vi) Divorce reduction programs that teach relationship
skills.
``(vii) Marriage mentoring programs which use married
couples as role models and mentors in at-risk communities.
``(viii) Programs to reduce the disincentives to marriage
in means-tested aid programs, if offered in conjunction with
any activity described in this subparagraph.
``(C) Voluntary participation.--
``(i) In general.--Participation in a program or activity
described in any of clauses (iii) through (viii) of
subparagraph (B) shall be voluntary.
``(ii) Requirements for receipt of funds.--The Secretary
may not award a grant under this paragraph to an applicant
for the grant, unless--
``(I) the application for the grant describes--
``(aa) how the programs or activities proposed in the
application will address, as appropriate, issues of domestic
violence; and
``(bb) what the applicant will do, to the extent relevant,
to ensure that participation in the programs or activities is
voluntary, and to inform potential participants that their
participation is voluntary; and
``(II) the applicant agrees that, as a condition of receipt
of the grant, the applicant will consult with experts in
domestic violence or relevant community domestic violence
coalitions in developing the programs and activities funded
with the grant.
``(D) Appropriation.--Out of any money in the Treasury of
the United States not otherwise appropriated, there are
appropriated for each of fiscal years 2006 through 2010
$100,000,000 for grants under this paragraph.''.
(c) Counting of Spending on Non-Eligible Families to
Prevent and Reduce Incidence of Out-of-Wedlock Births,
Encourage Formation and Maintenance of Healthy, 2-Parent
Married Families, or Encourage Responsible Fatherhood.--
Section 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)) is
amended by adding at the end the following:
``(V) Counting of spending on non-eligible families to
prevent and reduce incidence of out-of-wedlock births,
encourage formation and maintenance of healthy, 2-parent
married families, or encourage responsible fatherhood.--The
term `qualified State expenditures' includes the total
expenditures by the State during the fiscal year under all
State programs for a purpose described in paragraph (3) or
(4) of section 401(a).''.
SEC. 8104. SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN
CERTAIN STATES.
Section 403(a)(3) (42 U.S.C. 603(a)(3)) is amended--
(1) in subparagraph (E)--
(A) by striking ``1998, 1999, 2000, and 2001'' and
inserting ``2006 through 2009''; and
(B) by striking ``, in a total amount not to exceed
$800,000,000'';
(2) in subparagraph (G), by striking ``2001'' and inserting
``2009''; and
(3) by striking subparagraph (H) and inserting the
following:
``(H) Further preservation of grant amounts.--A State that
was a qualifying State under this paragraph for fiscal year
2004 or any prior fiscal year shall be entitled to receive
from the Secretary for each of fiscal years 2006 through 2009
a grant in an amount equal to the amount required to be paid
to the State under this paragraph for the most recent fiscal
year for which the State was a qualifying State.''.
SEC. 8105. ELIMINATION OF HIGH PERFORMANCE BONUS.
Section 403(a) (42 U.S.C. 603(a)) is amended by striking
paragraph (4).
SEC. 8106. CONTINGENCY FUND.
(a) Deposits Into Fund.--Section 403(b)(2) (42 U.S.C.
603(b)(2)) is amended--
(1) by striking ``1997, 1998, 1999, 2000, 2001, 2002, and
2003'' and inserting ``2006 through 2010''; and
[[Page H10607]]
(2) by striking all that follows ``$2,000,000,000'' and
inserting a period.
(b) Grants.--Section 403(b)(3)(C)(ii) (42 U.S.C.
603(b)(3)(C)(ii)) is amended by striking ``fiscal years 1997
through 2006'' and inserting ``fiscal years 2006 through
2010''.
(c) Definition of Needy State.--Clauses (i) and (ii) of
section 403(b)(5)(B) (42 U.S.C. 603(b)(5)(B)) are amended by
inserting after ``1996'' the following: ``and the Food Stamp
Act of 1977 as in effect during the corresponding 3-month
period in the fiscal year preceding such most recently
concluded 3-month period''.
(d) Annual Reconciliation: Federal Matching of State
Expenditures Above ``Maintenance of Effort'' Level.--Section
403(b)(6) (42 U.S.C. 603(b)(6)) is amended--
(1) in subparagraph (A)(ii)--
(A) by adding ``and'' at the end of subclause (I);
(B) by striking ``; and'' at the end of subclause (II) and
inserting a period; and
(C) by striking subclause (III);
(2) in subparagraph (B)(i)(II), by striking all that
follows ``section 409(a)(7)(B)(iii))'' and inserting a
period;
(3) by amending subparagraph (B)(ii)(I) to read as follows:
``(I) the qualified State expenditures (as defined in
section 409(a)(7)(B)(i)) for the fiscal year; plus''; and
(4) by striking subparagraph (C).
(e) Consideration of Certain Child Care Expenditures in
Determining State Compliance With Contingency Fund
Maintenance of Effort Requirement.--Section 409(a)(10) (42
U.S.C. 609(a)(10)) is amended--
(1) by striking ``(other than the expenditures described in
subclause (I)(bb) of that paragraph)) under the State program
funded under this part'' and inserting a close parenthesis;
and
(2) by striking ``excluding any amount expended by the
State for child care under subsection (g) or (i) of section
402 (as in effect during fiscal year 1994) for fiscal year
1994,''.
(f) Effective Date.--The amendments made by subsections
(c), (d), and (e) shall take effect on October 1, 2007.
SEC. 8107. USE OF FUNDS.
(a) General Rules.--Section 404(a)(2) (42 U.S.C. 604(a)(2))
is amended by striking ``in any manner that'' and inserting
``for any purposes or activities for which''.
(b) Treatment of Interstate Immigrants.--
(1) State plan provision.--Section 402(a)(1)(B) (42 U.S.C.
602(a)(1)(B)) is amended by striking clause (i) and
redesignating clauses (ii) through (iv) as clauses (i)
through (iii), respectively.
(2) Use of funds.--Section 404 (42 U.S.C. 604) is amended
by striking subsection (c).
(c) Increase in Amount Transferable to Child Care.--Section
404(d)(1) (42 U.S.C. 604(d)(1)) is amended by striking ``30''
and inserting ``50''.
(d) Increase in Amount Transferable to Title XX Programs.--
Section 404(d)(2)(B) (42 U.S.C. 604(d)(2)(B)) is amended to
read as follows:
``(B) Applicable percent.--For purposes of subparagraph
(A), the applicable percent is 10 percent for fiscal year
2006 and each succeeding fiscal year.''.
(e) Clarification of Authority of States to Use TANF Funds
Carried Over From Prior Years to Provide TANF Benefits and
Services.--Section 404(e) (42 U.S.C. 604(e)) is amended to
read as follows:
``(e) Authority to Carryover or Reserve Certain Amounts for
Benefits or Services or for Future Contingencies.--
``(1) Carryover.--A State or tribe may use a grant made to
the State or tribe under this part for any fiscal year to
provide, without fiscal year limitation, any benefit or
service that may be provided under the State or tribal
program funded under this part.
``(2) Contingency reserve.--A State or tribe may designate
any portion of a grant made to the State or tribe under this
part as a contingency reserve for future needs, and may use
any amount so designated to provide, without fiscal year
limitation, any benefit or service that may be provided under
the State or tribal program funded under this part. If a
State or tribe so designates a portion of such a grant, the
State shall, on an annual basis, include in its report under
section 411(a) the amount so designated.''.
SEC. 8108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE PROGRAMS.
(a) Repeal.--Effective as of October 1, 2006, section 406
(42 U.S.C. 606) is repealed.
(b) Conforming Amendments.--
(1) Section 409(a) (42 U.S.C. 609(a)) is amended by
striking paragraph (6).
(2) Section 412 (42 U.S.C. 612) is amended by striking
subsection (f) and redesignating subsections (g) through (i)
as subsections (f) through (h), respectively.
(3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by
striking ``406,''.
SEC. 8109. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY
PLAN REQUIREMENTS.
(a) Modification of State Plan Requirements.--Section
402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended by striking
clauses (ii) and (iii) and inserting the following:
``(ii) Require a parent or caretaker receiving assistance
under the program to engage in work or alternative self-
sufficiency activities (as defined by the State), consistent
with section 407(e)(2).
``(iii) Require families receiving assistance under the
program to engage in activities in accordance with family
self-sufficiency plans developed pursuant to section
408(b).''.
(b) Establishment of Family Self-Sufficiency Plans.--
(1) In general.--Section 408(b) (42 U.S.C. 608(b)) is
amended to read as follows:
``(b) Family Self-Sufficiency Plans.--
``(1) In general.--A State to which a grant is made under
section 403 shall--
``(A) assess, in the manner deemed appropriate by the
State, the skills, prior work experience, and employability
of each work-eligible individual (as defined in section
407(b)(2)(C)) receiving assistance under the State program
funded under this part;
``(B) establish for each family that includes such an
individual, in consultation as the State deems appropriate
with the individual, a self-sufficiency plan that specifies
appropriate activities described in the State plan submitted
pursuant to section 402, including direct work activities as
appropriate designed to assist the family in achieving their
maximum degree of self-sufficiency, and that provides for the
ongoing participation of the individual in the activities;
``(C) require, at a minimum, each such individual to
participate in activities in accordance with the self-
sufficiency plan;
``(D) monitor the participation of each such individual in
the activities specified in the self-sufficiency plan, and
regularly review the progress of the family toward self-
sufficiency;
``(E) upon such a review, revise the self-sufficiency plan
and activities as the State deems appropriate.
``(2) Timing.--The State shall comply with paragraph (1)
with respect to a family--
``(A) in the case of a family that, as of October 1, 2005,
is not receiving assistance from the State program funded
under this part, not later than 60 days after the family
first receives assistance on the basis of the most recent
application for the assistance; or
``(B) in the case of a family that, as of such date, is
receiving the assistance, not later than 12 months after the
date of enactment of this subsection.
``(3) State discretion.--A State shall have sole
discretion, consistent with section 407, to define and design
activities for families for purposes of this subsection, to
develop methods for monitoring and reviewing progress
pursuant to this subsection, and to make modifications to the
plan as the State deems appropriate to assist the individual
in increasing their degree of self-sufficiency.
``(4) Rule of interpretation.--Nothing in this part shall
preclude a State from--
``(A) requiring participation in work and any other
activities the State deems appropriate for helping families
achieve self-sufficiency and improving child well-being; or
``(B) using job search or other appropriate job readiness
or work activities to assess the employability of individuals
and to determine appropriate future engagement activities.''.
(2) Penalty for failure to establish family self-
sufficiency plan.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is
amended--
(A) in the paragraph heading, by inserting ``or establish
family self-sufficiency plan'' after ``rates''; and
(B) in subparagraph (A), by inserting ``or 408(b)'' after
``407(a)''.
SEC. 8110. WORK PARTICIPATION REQUIREMENTS.
(a) In General.--Section 407 (42 U.S.C. 607) is amended by
striking all that precedes subsection (b)(3) and inserting
the following:
``SEC. 407. WORK PARTICIPATION REQUIREMENTS.
``(a) Participation Rate Requirements.--A State to which a
grant is made under section 403 for a fiscal year shall
achieve a minimum participation rate equal to not less than--
``(1) 50 percent for fiscal year 2006;
``(2) 55 percent for fiscal year 2007;
``(3) 60 percent for fiscal year 2008;
``(4) 65 percent for fiscal year 2009; and
``(5) 70 percent for fiscal year 2010 and each succeeding
fiscal year.
``(b) Calculation of Participation Rates.--
``(1) Average monthly rate.--For purposes of subsection
(a), the participation rate of a State for a fiscal year is
the average of the participation rates of the State for each
month in the fiscal year.
``(2) Monthly participation rates; incorporation of 40-hour
work week standard.--
``(A) In general.--For purposes of paragraph (1), the
participation rate of a State for a month is--
``(i) the total number of countable hours (as defined in
subsection (c)) with respect to the counted families for the
State for the month; divided by
``(ii) 160 multiplied by the number of counted families for
the State for the month.
``(B) Counted families defined.--
``(i) In general.--In subparagraph (A), the term `counted
family' means, with respect to a State and a month, a family
that includes a work-eligible individual and that receives
assistance in the month under the State program funded under
this part, subject to clause (ii).
``(ii) State option to exclude certain families.--At the
option of a State, the term `counted family' shall not
include--
``(I) a family in the first month for which the family
receives assistance from a State program funded under this
part on the basis of the most recent application for such
assistance;
``(II) on a case-by-case basis, a family in which the
youngest child has not attained 12 months of age; or
[[Page H10608]]
``(III) a family that is subject to a sanction under this
part or part D, but that has not been subject to such a
sanction for more than 3 months (whether or not consecutive)
in the preceding 12-month period.
``(iii) State option to include individuals receiving
assistance under a tribal family assistance plan or tribal
work program.--At the option of a State, the term `counted
family' may include families in the State that are receiving
assistance under a tribal family assistance plan approved
under section 412 or under a tribal work program to which
funds are provided under this part.
``(C) Work-eligible individual defined.--In this section,
the term `work-eligible individual' means an individual--
``(i) who is married or a single head of household; and
``(ii) whose needs are (or, but for sanctions under this
part or part D, would be) included in determining the amount
of cash assistance to be provided to the family under the
State program funded under this part.''.
(b) Recalibration of Caseload Reduction Credit.--
(1) In general.--Section 407(b)(3)(A)(ii) (42 U.S.C.
607(b)(3)(A)(ii)) is amended to read as follows:
``(ii) the average monthly number of families that received
assistance under the State program funded under this part
during the base year.''.
(2) Conforming amendment.--Section 407(b)(3)(B) (42 U.S.C.
607(b)(3)(B)) is amended by striking ``and eligibility
criteria'' and all that follows through the close parenthesis
and inserting ``and the eligibility criteria in effect during
the then applicable base year''.
(3) Base year defined.--Section 407(b)(3) (42 U.S.C.
607(b)(3)) is amended by adding at the end the following:
``(C) Base year defined.--In this paragraph, the term `base
year' means, with respect to a fiscal year--
``(i) if the fiscal year is fiscal year 2006, fiscal year
1996;
``(ii) if the fiscal year is fiscal year 2007, fiscal year
1998;
``(iii) if the fiscal year is fiscal year 2008, fiscal year
2001; or
``(iv) if the fiscal year is fiscal year 2009 or any
succeeding fiscal year, the then 4th preceding fiscal
year.''.
(c) Superachiever Credit.--Section 407(b) (42 U.S.C.
607(b)) is amended by striking paragraphs (4) and (5) and
inserting the following:
``(4) Superachiever credit.--
``(A) In general.--The participation rate, determined under
paragraphs (1) and (2) of this subsection, of a superachiever
State for a fiscal year shall be increased by the lesser of--
``(i) the amount (if any) of the superachiever credit
applicable to the State; or
``(ii) the number of percentage points (if any) by which
the minimum participation rate required by subsection (a) for
the fiscal year exceeds 50 percent.
``(B) Superachiever state.--For purposes of subparagraph
(A), a State is a superachiever State if the State caseload
for fiscal year 2001 has declined by at least 60 percent from
the State caseload for fiscal year 1995.
``(C) Amount of credit.--The superachiever credit
applicable to a State is the number of percentage points (if
any) by which the decline referred to in subparagraph (B)
exceeds 60 percent.
``(D) Definitions.--In this paragraph:
``(i) State caseload for fiscal year 2001.--The term `State
caseload for fiscal year 2001' means the average monthly
number of families that received assistance during fiscal
year 2001 under the State program funded under this part.
``(ii) State caseload for fiscal year 1995.--The term
`State caseload for fiscal year 1995' means the average
monthly number of families that received aid under the State
plan approved under part A (as in effect on September 30,
1995) during fiscal year 1995.''.
(d) Countable Hours.--Section 407 (42 U.S.C. 607) is
amended by striking subsections (c) and (d) and inserting the
following:
``(c) Countable Hours.--
``(1) Definition.--In subsection (b)(2), the term
`countable hours' means, with respect to a family for a
month, the total number of hours in the month in which any
member of the family who is a work-eligible individual is
engaged in a direct work activity or other activities
specified by the State (excluding an activity that does not
address a purpose specified in section 401(a)), subject to
the other provisions of this subsection.
``(2) Limitations.--Subject to such regulations as the
Secretary may prescribe:
``(A) Minimum weekly average of 24 hours of direct work
activities required.--If the work-eligible individuals in a
family are engaged in a direct work activity for an average
total of fewer than 24 hours per week in a month, then the
number of countable hours with respect to the family for the
month shall be zero.
``(B) Maximum weekly average of 16 hours of other
activities.--An average of not more than 16 hours per week of
activities specified by the State (subject to the exclusion
described in paragraph (1)) may be considered countable hours
in a month with respect to a family.
``(3) Special rules.--For purposes of paragraph (1):
``(A) Participation in qualified activities.--
``(i) In general.--If, with the approval of the State, the
work-eligible individuals in a family are engaged in 1 or
more qualified activities for an average total of at least 24
hours per week in a month, then all such engagement in the
month shall be considered engagement in a direct work
activity, subject to clause (iii).
``(ii) Qualified activity defined.--The term `qualified
activity' means an activity specified by the State (subject
to the exclusion described in paragraph (1)) that meets such
standards and criteria as the State may specify, including--
``(I) substance abuse counseling or treatment;
``(II) rehabilitation treatment and services;
``(III) work-related education or training directed at
enabling the family member to work;
``(IV) job search or job readiness assistance; and
``(V) any other activity that addresses a purpose specified
in section 401(a).
``(iii) Limitation.--
``(I) In general.--Except as provided in subclause (II),
clause (i) shall not apply to a family for more than 3 months
in any period of 24 consecutive months.
``(II) Special rule applicable to education and training.--
A State may, on a case-by-case basis, apply clause (i) to a
work-eligible individual so that participation by the
individual in education or training, if needed to permit the
individual to complete a certificate program or other work-
related education or training directed at enabling the
individual to fill a known job need in a local area, may be
considered countable hours with respect to the family of the
individual for not more than 4 months in any period of 24
consecutive months.
``(B) School attendance by teen head of household.--The
work-eligible members of a family shall be considered to be
engaged in a direct work activity for an average of 40 hours
per week in a month if the family includes an individual who
is married, or is a single head of household, who has not
attained 20 years of age, and the individual--
``(i) maintains satisfactory attendance at secondary school
or the equivalent in the month; or
``(ii) participates in education directly related to
employment for an average of at least 20 hours per week in
the month.
``(d) Direct Work Activity.--In this section, the term
`direct work activity' means--
``(1) unsubsidized employment;
``(2) subsidized private sector employment;
``(3) subsidized public sector employment;
``(4) on-the-job training;
``(5) supervised work experience; or
``(6) supervised community service.''.
(e) Penalties Against Individuals.--Section 407(e)(1) (42
U.S.C. 607(e)(1)) is amended to read as follows:
``(1) Reduction or termination of assistance.--
``(A) In general.--Except as provided in paragraph (2), if
an individual in a family receiving assistance under a State
program funded under this part fails to engage in activities
required in accordance with this section, or other activities
required by the State under the program, and the family does
not otherwise engage in activities in accordance with the
self-sufficiency plan established for the family pursuant to
section 408(b), the State shall--
``(i) if the failure is partial or persists for not more
than 1 month--
``(I) reduce the amount of assistance otherwise payable to
the family pro rata (or more, at the option of the State)
with respect to any period during a month in which the
failure occurs; or
``(II) terminate all assistance to the family, subject to
such good cause exceptions as the State may establish; or
``(ii) if the failure is total and persists for at least 2
consecutive months, terminate all cash payments to the family
including qualified State expenditures (as defined in section
409(a)(7)(B)(i)) for at least 1 month and thereafter until
the State determines that the individual has resumed full
participation in the activities, subject to such good cause
exceptions as the State may establish.
``(B) Special rule.--
``(i) In general.--In the event of a conflict between a
requirement of clause (i)(II) or (ii) of subparagraph (A) and
a requirement of a State constitution, or of a State statute
that, before 1966, obligated local government to provide
assistance to needy parents and children, the State
constitutional or statutory requirement shall control.
``(ii) Limitation.--Clause (i) of this subparagraph shall
not apply after the 1-year period that begins with the date
of the enactment of this subparagraph.''.
(f) Conforming Amendments.--
(1) Section 407(f) (42 U.S.C. 607(f)) is amended in each of
paragraphs (1) and (2) by striking ``work activity described
in subsection (d)'' and inserting ``direct work activity''.
(2) The heading of section 409(a)(14) (42 U.S.C.
609(a)(14)) is amended by inserting ``or refusing to engage
in activities under a family self-sufficiency plan'' after
``work''.
SEC. 8111. MAINTENANCE OF EFFORT.
(a) In General.--Section 409(a)(7) (42 U.S.C. 609(a)(7)) is
amended--
(1) in subparagraph (A), by striking ``fiscal year 1998,
1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, or 2007'' and
inserting ``fiscal year 2006, 2007, 2008, 2009, 2010, or
2011''; and
(2) in subparagraph (B)(ii)--
(A) by inserting ``preceding'' before ``fiscal year''; and
(B) by striking ``for fiscal years 1997 through 2006,''.
[[Page H10609]]
(b) State Spending on Promoting Healthy Marriage.--
(1) In general.--Section 404 (42 U.S.C. 604) is amended by
adding at the end the following:
``(l) Marriage Promotion.--A State, territory, or tribal
organization to which a grant is made under section 403(a)(2)
may use a grant made to the State, territory, or tribe under
any other provision of section 403 for marriage promotion
activities, and the amount of any such grant so used shall be
considered State funds for purposes of section 403(a)(2).''.
(2) Federal tanf funds used for marriage promotion
disregarded for purposes of maintenance of effort
requirement.--Section 409(a)(7)(B)(i) (42 U.S.C.
609(a)(7)(B)(i)), as amended by section 8103(c) of this Act,
is amended by adding at the end the following:
``(VI) Exclusion of federal tanf funds used for marriage
promotion activities.--Such term does not include the amount
of any grant made to the State under section 403 that is
expended for a marriage promotion activity.''.
SEC. 8112. PERFORMANCE IMPROVEMENT.
(a) State Plans.--Section 402(a) (42 U.S.C. 602(a)) is
amended--
(1) in paragraph (1)--
(A) in subparagraph (A)--
(i) by redesignating clause (vi) and clause (vii) (as added
by section 8103(a) of this Act) as clauses (vii) and (viii),
respectively; and
(ii) by striking clause (v) and inserting the following:
``(v) The document shall--
``(I) describe how the State will pursue ending dependence
of needy families on government benefits and reducing poverty
by promoting job preparation and work;
``(II) describe how the State will encourage the formation
and maintenance of healthy 2-parent married families,
encourage responsible fatherhood, and prevent and reduce the
incidence of out-of-wedlock pregnancies;
``(III) include specific, numerical, and measurable
performance objectives for accomplishing subclauses (I) and
(II); and
``(IV) describe the methodology that the State will use to
measure State performance in relation to each such objective.
``(vi) Describe any strategies and programs the State may
be undertaking to address--
``(I) employment retention and advancement for recipients
of assistance under the program, including placement into
high-demand jobs, and whether the jobs are identified using
labor market information;
``(II) efforts to reduce teen pregnancy;
``(III) services for struggling and noncompliant families,
and for clients with special problems; and
``(IV) program integration, including the extent to which
employment and training services under the program are
provided through the One-Stop delivery system created under
the Workforce Investment Act of 1998, and the extent to which
former recipients of such assistance have access to
additional core, intensive, or training services funded
through such Act.''; and
(B) in subparagraph (B), by striking clause (iii) (as so
redesignated by section 8107(b)(1) of this Act) and inserting
the following:
``(iii) The document shall describe strategies and programs
the State is undertaking to engage religious organizations in
the provision of services funded under this part and efforts
related to section 104 of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996.
``(iv) The document shall describe strategies to improve
program management and performance.''; and
(2) in paragraph (4), by inserting ``and tribal'' after
``that local''.
(b) Consultation With State Regarding Plan and Design of
Tribal Programs.--Section 412(b)(1) (42 U.S.C. 612(b)(1)) is
amended--
(1) by striking ``and'' at the end of subparagraph (E);
(2) by striking the period at the end of subparagraph (F)
and inserting ``; and''; and
(3) by adding at the end the following:
``(G) provides an assurance that the State in which the
tribe is located has been consulted regarding the plan and
its design.''.
(c) Performance Measures.--Section 413 (42 U.S.C. 613) is
amended by adding at the end the following:
``(k) Performance Improvement.--The Secretary, in
consultation with the States, shall develop uniform
performance measures designed to assess the degree of
effectiveness, and the degree of improvement, of State
programs funded under this part in accomplishing the purposes
of this part.''.
(d) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C.
613(d)(1)) is amended by striking ``long-term private sector
jobs'' and inserting ``private sector jobs, the success of
the recipients in retaining employment, the ability of the
recipients to increase their wages''.
SEC. 8113. DATA COLLECTION AND REPORTING.
(a) Contents of Report.--Section 411(a)(1)(A) (42 U.S.C.
611(a)(1)(A)) is amended--
(1) in the matter preceding clause (i), by inserting ``and
on families receiving assistance under State programs funded
with other qualified State expenditures (as defined in
section 409(a)(7)(B))'' before the colon;
(2) in clause (vii), by inserting ``and minor parent''
after ``of each adult'';
(3) in clause (viii), by striking ``and educational
level'';
(4) in clause (ix), by striking ``, and if the latter 2,
the amount received'';
(5) in clause (x)--
(A) by striking ``each type of''; and
(B) by inserting before the period ``and, if applicable,
the reason for receipt of the assistance for a total of more
than 60 months'';
(6) in clause (xi), by striking the subclauses and
inserting the following:
``(I) Subsidized private sector employment.
``(II) Unsubsidized employment.
``(III) Public sector employment, supervised work
experience, or supervised community service.
``(IV) On-the-job training.
``(V) Job search and placement.
``(VI) Training.
``(VII) Education.
``(VIII) Other activities directed at the purposes of this
part, as specified in the State plan submitted pursuant to
section 402.'';
(7) in clause (xii), by inserting ``and progress toward
universal engagement'' after ``participation rates'';
(8) in clause (xiii), by striking ``type and'';
(9) in clause (xvi), by striking subclause (II) and
redesignating subclauses (III) through (V) as subclauses (II)
through (IV), respectively; and
(10) by adding at the end the following:
``(xviii) The date the family first received assistance
from the State program on the basis of the most recent
application for such assistance.
``(xix) Whether a self-sufficiency plan is established for
the family in accordance with section 408(b).
``(xx) With respect to any child in the family, the marital
status of the parents at the birth of the child, and if the
parents were not then married, whether the paternity of the
child has been established.''.
(b) Use of Samples.--Section 411(a)(1)(B) (42 U.S.C.
611(a)(1)(B)) is amended--
(1) in clause (i)--
(A) by striking ``a sample'' and inserting ``samples''; and
(B) by inserting before the period ``, except that the
Secretary may designate core data elements that must be
reported on all families''; and
(2) in clause (ii), by striking ``funded under this part''
and inserting ``described in subparagraph (A)''.
(c) Report on Families That Become Ineligible to Receive
Assistance.--Section 411(a) (42 U.S.C. 611(a)) is amended--
(1) by striking paragraph (5);
(2) by redesignating paragraph (6) as paragraph (5); and
(3) by inserting after paragraph (5) (as so redesignated)
the following:
``(6) Report on families that become ineligible to receive
assistance.--The report required by paragraph (1) for a
fiscal quarter shall include for each month in the quarter
the number of families and total number of individuals that,
during the month, became ineligible to receive assistance
under the State program funded under this part (broken down
by the number of families that become so ineligible due to
earnings, changes in family composition that result in
increased earnings, sanctions, time limits, or other
specified reasons).''.
(d) Regulations.--Section 411(a)(7) (42 U.S.C. 611(a)(7))
is amended--
(1) by inserting ``and to collect the necessary data''
before ``with respect to which reports'';
(2) by striking ``subsection'' and inserting ``section'';
and
(3) by striking ``in defining the data elements'' and all
that follows and inserting ``, the National Governors'
Association, the American Public Human Services Association,
the National Conference of State Legislatures, and others in
defining the data elements.''.
(e) Additional Reports by States.--Section 411 (42 U.S.C.
611) is amended--
(1) by redesignating subsection (b) as subsection (e); and
(2) by inserting after subsection (a) the following:
``(b) Annual Reports on Program Characteristics.--Not later
than 90 days after the end of fiscal year 2006 and each
succeeding fiscal year, each eligible State shall submit to
the Secretary a report on the characteristics of the State
program funded under this part and other State programs
funded with qualified State expenditures (as defined in
section 409(a)(7)(B)(i)). The report shall include, with
respect to each such program, the program name, a description
of program activities, the program purpose, the program
eligibility criteria, the sources of program funding, the
number of program beneficiaries, sanction policies, and any
program work requirements.
``(c) Monthly Reports on Caseload.--Not later than 3 months
after the end of a calendar month that begins 1 year or more
after the enactment of this subsection, each eligible State
shall submit to the Secretary a report on the number of
families and total number of individuals receiving assistance
in the calendar month under the State program funded under
this part.
``(d) Annual Report on Performance Improvement.--Beginning
with fiscal year 2007, not later than January 1 of each
fiscal year, each eligible State shall submit to the
Secretary a report on achievement and improvement during the
preceding fiscal year under the numerical performance goals
and measures under the State program funded under this part
with respect to each of the matters described in section
402(a)(1)(A)(v).''.
[[Page H10610]]
(f) Annual Reports to Congress by the Secretary.--Section
411(e), as so redesignated by subsection (e) of this section,
is amended--
(1) in the matter preceding paragraph (1), by striking
``and each fiscal year thereafter'' and inserting ``and by
July 1 of each fiscal year thereafter'';
(2) in paragraph (2), by striking ``families applying for
assistance,'' and by striking the last comma; and
(3) in paragraph (3), by inserting ``and other programs
funded with qualified State expenditures (as defined in
section 409(a)(7)(B)(i))'' before the semicolon.
(g) Increased Analysis of State Single Audit Reports.--
Section 411 (42 U.S.C. 611) is amended by adding at the end
the following:
``(f) Increased Analysis of State Single Audit Reports.--
``(1) In general.--Within 3 months after a State submits to
the Secretary a report pursuant to section 7502(a)(1)(A) of
title 31, United States Code, the Secretary shall analyze the
report for the purpose of identifying the extent and nature
of problems related to the oversight by the State of
nongovernmental entities with respect to contracts entered
into by such entities with the State program funded under
this part, and determining what additional actions may be
appropriate to help prevent and correct the problems.
``(2) Inclusion of program oversight section in annual
report to the congress.--The Secretary shall include in each
report under subsection (e) a section on oversight of State
programs funded under this part, including findings on the
extent and nature of the problems referred to in paragraph
(1), actions taken to resolve the problems, and to the extent
the Secretary deems appropriate make recommendations on
changes needed to resolve the problems.''.
SEC. 8114. DIRECT FUNDING AND ADMINISTRATION BY INDIAN
TRIBES.
(a) Tribal Family Assistance Grant.--Section 412(a)(1)(A)
(42 U.S.C. 612(a)(1)(A)) is amended by striking ``1997, 1998,
1999, 2000, 2001, 2002, and 2003'' and inserting ``2006
through 2010''.
(b) Grants for Indian Tribes That Received JOBS Funds.--
Section 412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)) is amended by
striking ``1997, 1998, 1999, 2000, 2001, 2002, and 2003'' and
inserting ``2006 through 2010''.
SEC. 8115. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.
(a) Secretary's Fund for Research, Demonstrations, and
Technical Assistance.--Section 413 (42 U.S.C. 613), as
amended by section 8112(c) of this Act, is further amended by
adding at the end the following:
``(l) Funding for Research, Demonstrations, and Technical
Assistance.--
``(1) Appropriation.--Out of any money in the Treasury of
the United States not otherwise appropriated, there are
appropriated $102,000,000 for each of fiscal years 2006
through 2010, which shall be available to the Secretary for
the purpose of conducting and supporting research and
demonstration projects by public or private entities, and
providing technical assistance to States, Indian tribal
organizations, and such other entities as the Secretary may
specify that are receiving a grant under this part, which
shall be expended primarily on activities described in
section 403(a)(2)(B), and which shall be in addition to any
other funds made available under this part. The Secretary may
not provide an entity with funds made available under this
paragraph unless the entity agrees that, as a condition of
receipt of the funds for a program or activity described in
any of clauses (iii) through (viii) of section 403(a)(2)(B),
the entity will comply with subclauses (I) and (II) of
section 403(a)(2)(C)(ii).
``(2) Set aside for demonstration projects for coordination
of provision of child welfare and tanf services to tribal
families at risk of child abuse or neglect.--
``(A) In general.--Of the amounts made available under
paragraph (1) for a fiscal year, $2,000,000 shall be awarded
on a competitive basis to fund demonstration projects
designed to test the effectiveness of tribal governments or
tribal consortia in coordinating the provision to tribal
families at risk of child abuse or neglect of child welfare
services and services under tribal programs funded under this
part.
``(B) Use of funds.--A grant made to such a project shall
be used--
``(i) to improve case management for families eligible for
assistance from such a tribal program;
``(ii) for supportive services and assistance to tribal
children in out-of-home placements and the tribal families
caring for such children, including families who adopt such
children; and
``(iii) for prevention services and assistance to tribal
families at risk of child abuse and neglect.
``(C) Reports.--The Secretary may require a recipient of
funds awarded under this paragraph to provide the Secretary
with such information as the Secretary deems relevant to
enable the Secretary to facilitate and oversee the
administration of any project for which funds are provided
under this paragraph.''.
(b) Funding of Studies and Demonstrations.--Section
413(h)(1) (42 U.S.C. 613(h)(1)) is amended in the matter
preceding subparagraph (A) by striking ``1997 through 2002''
and inserting ``2006 through 2010''.
(c) Report on Enforcement of Certain Affidavits of Support
and Sponsor Deeming.--Not later than March 31, 2006, the
Secretary of Health and Human Services, in consultation with
the Attorney General, shall submit to the Congress a report
on the enforcement of affidavits of support and sponsor
deeming as required by section 421, 422, and 432 of the
Personal Responsibility and Work Opportunity Reconciliation
Act of 1996.
(d) Report on Coordination.--Not later than 6 months after
the date of the enactment of this Act, the Secretary of
Health and Human Services and the Secretary of Labor shall
jointly submit a report to the Congress describing common or
conflicting data elements, definitions, performance measures,
and reporting requirements in the Workforce Investment Act of
1998 and part A of title IV of the Social Security Act, and,
to the degree each Secretary deems appropriate, at the
discretion of either Secretary, any other program
administered by the respective Secretary, to allow greater
coordination between the welfare and workforce development
systems.
SEC. 8116. STUDY BY THE CENSUS BUREAU.
(a) In General.--Section 414(a) (42 U.S.C. 614(a)) is
amended to read as follows:
``(a) In General.--The Bureau of the Census shall implement
or enhance a longitudinal survey of program participation,
developed in consultation with the Secretary and made
available to interested parties, to allow for the assessment
of the outcomes of continued welfare reform on the economic
and child well-being of low-income families with children,
including those who received assistance or services from a
State program funded under this part, and, to the extent
possible, shall provide State representative samples. The
content of the survey should include such information as may
be necessary to examine the issues of out-of-wedlock
childbearing, marriage, welfare dependency and compliance
with work requirements, the beginning and ending of spells of
assistance, work, earnings and employment stability, and the
well-being of children.''.
(b) Appropriation.--Section 414(b) (42 U.S.C. 614(b)) is
amended--
(1) by striking ``1996,'' and all that follows through
``2003'' and inserting ``2006 through 2010''; and
(2) by adding at the end the following: ``Funds
appropriated under this subsection shall remain available
through fiscal year 2010 to carry out subsection (a).''.
SEC. 8117. DEFINITION OF ASSISTANCE.
(a) In General.--Section 419 (42 U.S.C. 619) is amended by
adding at the end the following:
``(6) Assistance.--
``(A) In general.--The term `assistance' means payment, by
cash, voucher, or other means, to or for an individual or
family for the purpose of meeting a subsistence need of the
individual or family (including food, clothing, shelter, and
related items, but not including costs of transportation or
child care).
``(B) Exception.--The term `assistance' does not include a
payment described in subparagraph (A) to or for an individual
or family on a short-term, nonrecurring basis (as defined by
the State in accordance with regulations prescribed by the
Secretary).''.
(b) Conforming Amendments.--
(1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is amended by
striking ``assistance'' and inserting ``aid''.
(2) Section 404(f) (42 U.S.C. 604(f)) is amended by
striking ``assistance'' and inserting ``benefits or
services''.
(3) Section 408(a)(5)(B)(i) (42 U.S.C. 608(a)(5)(B)(i)) is
amended in the heading by striking ``assistance'' and
inserting ``aid''.
(4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is amended by
striking ``assistance'' and inserting ``aid''.
SEC. 8118. TECHNICAL CORRECTIONS.
(a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended by
inserting a comma after ``appropriate''.
(b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C.
611(a)(1)(A)(ii)(III)) is amended by striking the last close
parenthesis.
(c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is
amended by striking ``section'' and inserting ``sections''.
(d)(1) Section 413 (42 U.S.C. 613) is amended by striking
subsection (g) and redesignating subsections (h) through (j)
and subsections (k) and (l) (as added by sections 8112(c) and
8115(a) of this Act, respectively) as subsections (g) through
(k), respectively.
(2) Each of the following provisions is amended by striking
``413(j)'' and inserting ``413(i)'':
(A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C.
603(a)(5)(A)(ii)(III)).
(B) Section 403(a)(5)(F) (42 U.S.C. 603(a)(5)(F)).
(C) Section 403(a)(5)(G)(ii) (42 U.S.C. 603(a)(5)(G)(ii)).
(D) Section 412(a)(3)(B)(iv) (42 U.S.C. 612(a)(3)(B)(iv)).
SEC. 8119. FATHERHOOD PROGRAM.
(a) Short Title.--This section may be cited as the
``Promotion and Support of Responsible Fatherhood and Healthy
Marriage Act of 2005''.
(b) Fatherhood Program.--
(1) In general.--Title I of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (Public Law 104-
193) is amended by adding at the end the following:
``SEC. 117. FATHERHOOD PROGRAM.
``(a) In General.--Title IV (42 U.S.C. 601-679b) is amended
by inserting after part B the following:
[[Page H10611]]
`PART C--FATHERHOOD PROGRAM
`SEC. 441. FINDINGS AND PURPOSES.
`(a) Findings.--The Congress finds that there is
substantial evidence strongly indicating the urgent need to
promote and support involved, committed, and responsible
fatherhood, and to encourage and support healthy marriages
between parents raising children, including data
demonstrating the following:
`(1) In approximately 84 percent of cases where a parent is
absent, that parent is the father.
`(2) If current trends continue, half of all children born
today will live apart from one of their parents, usually
their father, at some point before they turn 18.
`(3) Where families (whether intact or with a parent
absent) are living in poverty, a significant factor is the
father's lack of job skills.
`(4) Committed and responsible fathering during infancy and
early childhood contributes to the development of emotional
security, curiosity, and math and verbal skills.
`(5) An estimated 19,400,000 children (27 percent) live
apart from their biological father.
`(6) Forty percent of children under age 18 not living with
their biological father had not seen their father even once
in the last 12 months, according to national survey data.
`(b) Purposes.--The purposes of this part are:
`(1) To provide for projects and activities by public
entities and by nonprofit community entities, including
religious organizations, designed to test promising
approaches to accomplishing the following objectives:
`(A) Promoting responsible, caring, and effective parenting
through counseling, mentoring, and parenting education,
dissemination of educational materials and information on
parenting skills, encouragement of positive father
involvement, including the positive involvement of
nonresident fathers, and other methods.
`(B) Enhancing the abilities and commitment of unemployed
or low-income fathers to provide material support for their
families and to avoid or leave welfare programs by assisting
them to take full advantage of education, job training, and
job search programs, to improve work habits and work skills,
to secure career advancement by activities such as outreach
and information dissemination, coordination, as appropriate,
with employment services and job training programs, including
the One-Stop delivery system established under title I of the
Workforce Investment Act of 1998, encouragement and support
of timely payment of current child support and regular
payment toward past due child support obligations in
appropriate cases, and other methods.
`(C) Improving fathers' ability to effectively manage
family business affairs by means such as education,
counseling, and mentoring in matters including household
management, budgeting, banking, and handling of financial
transactions, time management, and home maintenance.
`(D) Encouraging and supporting healthy marriages and
married fatherhood through such activities as premarital
education, including the use of premarital inventories,
marriage preparation programs, skills-based marriage
education programs, marital therapy, couples counseling,
divorce education and reduction programs, divorce mediation
and counseling, relationship skills enhancement programs,
including those designed to reduce child abuse and domestic
violence, and dissemination of information about the benefits
of marriage for both parents and children.
`(2) Through the projects and activities described in
paragraph (1), to improve outcomes for children with respect
to measures such as increased family income and economic
security, improved school performance, better health,
improved emotional and behavioral stability and social
adjustment, and reduced risk of delinquency, crime, substance
abuse, child abuse and neglect, teen sexual activity, and
teen suicide.
`(3) To evaluate the effectiveness of various approaches
and to disseminate findings concerning outcomes and other
information in order to encourage and facilitate the
replication of effective approaches to accomplishing these
objectives.
`SEC. 442. DEFINITIONS.
`In this part, the terms ``Indian tribe'' and ``tribal
organization'' have the meanings given them in subsections
(e) and (l), respectively, of section 4 of the Indian Self-
Determination and Education Assistance Act.
`SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.
`(a) In General.--The Secretary may make grants for fiscal
years 2006 through 2010 to public and nonprofit community
entities, including religious organizations, and to Indian
tribes and tribal organizations, for demonstration service
projects and activities designed to test the effectiveness of
various approaches to accomplish the objectives specified in
section 441(b)(1).
`(b) Eligibility Criteria for Full Service Grants.--In
order to be eligible for a grant under this section, except
as specified in subsection (c), an entity shall submit an
application to the Secretary containing the following:
`(1) Project description.--A statement including--
`(A) a description of the project and how it will be
carried out, including the geographical area to be covered
and the number and characteristics of clients to be served,
and how it will address each of the 4 objectives specified in
section 441(b)(1); and
`(B) a description of the methods to be used by the entity
or its contractor to assess the extent to which the project
was successful in accomplishing its specific objectives and
the general objectives specified in section 441(b)(1).
`(2) Experience and qualifications.--A demonstration of
ability to carry out the project, by means such as
demonstration of experience in successfully carrying out
projects of similar design and scope, and such other
information as the Secretary may find necessary to
demonstrate the entity's capacity to carry out the project,
including the entity's ability to provide the non-Federal
share of project resources.
`(3) Addressing child abuse and neglect and domestic
violence.--A description of how the entity will assess for
the presence of, and intervene to resolve, domestic violence
and child abuse and neglect, including how the entity will
coordinate with State and local child protective service and
domestic violence programs.
`(4) Addressing concerns relating to substance abuse and
sexual activity.--A commitment to make available to each
individual participating in the project education about
alcohol, tobacco, and other drugs, and about the health risks
associated with abusing such substances, and information
about diseases and conditions transmitted through substance
abuse and sexual contact, including HIV/AIDS, and to
coordinate with providers of services addressing such
problems, as appropriate.
`(5) Coordination with specified programs.--An undertaking
to coordinate, as appropriate, with State and local entities
responsible for the programs under parts A, B, and D of this
title, including programs under title I of the Workforce
Investment Act of 1998 (including the One-Stop delivery
system), and such other programs as the Secretary may
require.
`(6) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits as the Secretary may find necessary
for purposes of oversight of project activities and
expenditures.
`(7) Self-initiated evaluation.--If the entity elects to
contract for independent evaluation of the project (part or
all of the cost of which may be paid for using grant funds),
a commitment to submit to the Secretary a copy of the
evaluation report within 30 days after completion of the
report and not more than 1 year after completion of the
project.
`(8) Cooperation with secretary's oversight and
evaluation.--An agreement to cooperate with the Secretary's
evaluation of projects assisted under this section, by means
including random assignment of clients to service recipient
and control groups, if determined by the Secretary to be
appropriate, and affording the Secretary access to the
project and to project-related records and documents, staff,
and clients.
`(c) Eligibility Criteria for Limited Purpose Grants.--In
order to be eligible for a grant under this section in an
amount under $25,000 per fiscal year, an entity shall submit
an application to the Secretary containing the following:
`(1) Project description.--A description of the project and
how it will be carried out, including the number and
characteristics of clients to be served, the proposed
duration of the project, and how it will address at least 1
of the 4 objectives specified in section 441(b)(1).
`(2) Qualifications.--Such information as the Secretary may
require as to the capacity of the entity to carry out the
project, including any previous experience with similar
activities.
`(3) Coordination with related programs.--As required by
the Secretary in appropriate cases, an undertaking to
coordinate and cooperate with State and local entities
responsible for specific programs relating to the objectives
of the project including, as appropriate, jobs programs and
programs serving children and families.
`(4) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits as the Secretary may find necessary
for purposes of oversight of project activities and
expenditures.
`(5) Cooperation with secretary's oversight and
evaluation.--An agreement to cooperate with the Secretary's
evaluation of projects assisted under this section, by means
including affording the Secretary access to the project and
to project-related records and documents, staff, and clients.
`(d) Considerations in Awarding Grants.--
`(1) Diversity of projects.--In awarding grants under this
section, the Secretary shall seek to achieve a balance among
entities of differing sizes, entities in differing geographic
areas, entities in urban and in rural areas, and entities
employing differing methods of achieving the purposes of this
section, including working with the State agency responsible
for the administration of part D to help fathers satisfy
child support arrearage obligations.
`(2) Preference for projects serving low-income fathers.--
In awarding grants under this section, the Secretary may give
preference to applications for projects in which a majority
of the clients to be served are low-income fathers.
`(e) Federal Share.--
`(1) In general.--Grants for a project under this section
for a fiscal year shall be
[[Page H10612]]
available for a share of the cost of such project in such
fiscal year equal to--
`(A) up to 80 percent (or up to 90 percent, if the entity
demonstrates to the Secretary's satisfaction circumstances
limiting the entity's ability to secure non-Federal
resources) in the case of a project under subsection (b); and
`(B) up to 100 percent, in the case of a project under
subsection (c).
`(2) Non-federal share.--The non-Federal share may be in
cash or in kind. In determining the amount of the non-Federal
share, the Secretary may attribute fair market value to
goods, services, and facilities contributed from non-Federal
sources.
`SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.
`(a) In General.--The Secretary may make grants under this
section for fiscal years 2006 through 2010 to eligible
entities (as specified in subsection (b)) for 2 multicity,
multistate projects demonstrating approaches to achieving the
objectives specified in section 441(b)(1). One of the
projects shall test the use of married couples to deliver
program services.
`(b) Eligible Entities.--An entity eligible for a grant
under this section must be a national nonprofit fatherhood
promotion organization that meets the following requirements:
`(1) Experience with fatherhood programs.--The organization
must have substantial experience in designing and
successfully conducting programs that meet the purposes
described in section 441.
`(2) Experience with multicity, multistate programs and
government coordination.--The organization must have
experience in simultaneously conducting such programs in more
than 1 major metropolitan area in more than 1 State and in
coordinating such programs, where appropriate, with State and
local government agencies and private, nonprofit agencies
(including community-based and religious organizations),
including State or local agencies responsible for child
support enforcement and workforce development.
`(c) Application Requirements.--In order to be eligible for
a grant under this section, an entity must submit to the
Secretary an application that includes the following:
`(1) Qualifications.--
`(A) Eligible entity.--A demonstration that the entity
meets the requirements of subsection (b).
`(B) Other.--Such other information as the Secretary may
find necessary to demonstrate the entity's capacity to carry
out the project, including the entity's ability to provide
the non-Federal share of project resources.
`(2) Project description.--A description of and commitments
concerning the project design, including the following:
`(A) In general.--A detailed description of the proposed
project design and how it will be carried out, which shall--
`(i) provide for the project to be conducted in at least 3
major metropolitan areas;
`(ii) state how it will address each of the 4 objectives
specified in section 441(b)(1);
`(iii) demonstrate that there is a sufficient number of
potential clients to allow for the random selection of
individuals to participate in the project and for comparisons
with appropriate control groups composed of individuals who
have not participated in such projects; and
`(iv) demonstrate that the project is designed to direct a
majority of project resources to activities serving low-
income fathers (but the project need not make services
available on a means-tested basis).
`(B) Oversight, evaluation, and adjustment component.--An
agreement that the entity--
`(i) in consultation with the evaluator selected pursuant
to section 445, and as required by the Secretary, will modify
the project design, initially and (if necessary) subsequently
throughout the duration of the project, in order to
facilitate ongoing and final oversight and evaluation of
project operation and outcomes (by means including, to the
maximum extent feasible, random assignment of clients to
service recipient and control groups), and to provide for
mid-course adjustments in project design indicated by interim
evaluations;
`(ii) will submit to the Secretary revised descriptions of
the project design as modified in accordance with clause (i);
and
`(iii) will cooperate fully with the Secretary's ongoing
oversight and ongoing and final evaluation of the project, by
means including affording the Secretary access to the project
and to project-related records and documents, staff, and
clients.
`(3) Addressing child abuse and neglect and domestic
violence.--A description of how the entity will assess for
the presence of, and intervene to resolve, domestic violence
and child abuse and neglect, including how the entity will
coordinate with State and local child protective service and
domestic violence programs.
`(4) Addressing concerns relating to substance abuse and
sexual activity.--A commitment to make available to each
individual participating in the project education about
alcohol, tobacco, and other drugs, and about the health risks
associated with abusing such substances, and information
about diseases and conditions transmitted through substance
abuse and sexual contact, including HIV/AIDS, and to
coordinate with providers of services addressing such
problems, as appropriate.
`(5) Coordination with specified programs.--An undertaking
to coordinate, as appropriate, with State and local entities
responsible for the programs funded under parts A, B, and D
of this title, programs under title I of the Workforce
Investment Act of 1998 (including the One-Stop delivery
system), and such other programs as the Secretary may
require.
`(6) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits (in addition to those required under
the preceding provisions of paragraph (2)) as the Secretary
may find necessary for purposes of oversight of project
activities and expenditures.
`(d) Federal Share.--
`(1) In general.--Grants for a project under this section
for a fiscal year shall be available for up to 80 percent of
the cost of such project in such fiscal year.
`(2) Non-federal share.--The non-Federal share may be in
cash or in kind. In determining the amount of the non-Federal
share, the Secretary may attribute fair market value to
goods, services, and facilities contributed from non-Federal
sources.
`SEC. 445. EVALUATION.
`(a) In General.--The Secretary, directly or by contract or
cooperative agreement, shall evaluate the effectiveness of
service projects funded under sections 443 and 444 from the
standpoint of the purposes specified in section 441(b)(1).
`(b) Evaluation Methodology.--Evaluations under this
section shall--
`(1) include, to the maximum extent feasible, random
assignment of clients to service delivery and control groups
and other appropriate comparisons of groups of individuals
receiving and not receiving services;
`(2) describe and measure the effectiveness of the projects
in achieving their specific project goals; and
`(3) describe and assess, as appropriate, the impact of
such projects on marriage, parenting, domestic violence,
child abuse and neglect, money management, employment and
earnings, payment of child support, and child well-being,
health, and education.
`(c) Evaluation Reports.--The Secretary shall publish the
following reports on the results of the evaluation:
`(1) An implementation evaluation report covering the first
24 months of the activities under this part to be completed
by 36 months after initiation of such activities.
`(2) A final report on the evaluation to be completed by
September 30, 2013.
`SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE.
`The Secretary is authorized, by grant, contract, or
cooperative agreement, to carry out projects and activities
of national significance relating to fatherhood promotion,
including--
`(1) Collection and dissemination of information.--
Assisting States, communities, and private entities,
including religious organizations, in efforts to promote and
support marriage and responsible fatherhood by collecting,
evaluating, developing, and making available (through the
Internet and by other means) to all interested parties
information regarding approaches to accomplishing the
objectives specified in section 441(b)(1).
`(2) Media campaign.--Developing, promoting, and
distributing to interested States, local governments, public
agencies, and private nonprofit organizations, including
charitable and religious organizations, a media campaign that
promotes and encourages involved, committed, and responsible
fatherhood and married fatherhood.
`(3) Technical assistance.--Providing technical assistance,
including consultation and training, to public and private
entities, including community organizations and faith-based
organizations, in the implementation of local fatherhood
promotion programs.
`(4) Research.--Conducting research related to the purposes
of this part.
`SEC. 447. NONDISCRIMINATION.
`The projects and activities assisted under this part shall
be available on the same basis to all fathers and expectant
fathers able to benefit from such projects and activities,
including married and unmarried fathers and custodial and
noncustodial fathers, with particular attention to low-income
fathers, and to mothers and expectant mothers on the same
basis as to fathers.
`SEC. 448. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR
CERTAIN PURPOSE.
`(a) Authorization.--There are authorized to be
appropriated $20,000,000 for each of fiscal years 2006
through 2010 to carry out the provisions of this part.
`(b) Reservation.--Of the amount appropriated under this
section for each fiscal year, not more than 15 percent shall
be available for the costs of the multicity, multicounty,
multistate demonstration projects under section 444,
evaluations under section 445, and projects of national
significance under section 446.'.
``(b) Inapplicability of Effective Date Provisions.--
Section 116 shall not apply to the amendment made by
subsection (a) of this section.''.
(2) Clerical amendment.--Section 2 of such Act is amended
in the table of contents by inserting after the item relating
to section 116 the following new item:
``Sec. 117. Fatherhood program.''.
[[Page H10613]]
SEC. 8120. STATE OPTION TO MAKE TANF PROGRAMS MANDATORY
PARTNERS WITH ONE-STOP EMPLOYMENT TRAINING
CENTERS.
Section 408 of the Social Security Act (42 U.S.C. 608) is
amended by adding at the end the following:
``(h) State Option to Make TANF Programs Mandatory Partners
With One-Stop Employment Training Centers.--For purposes of
section 121(b) of the Workforce Investment Act of 1998, a
State program funded under part A of title IV of the Social
Security Act shall be considered a program referred to in
paragraph (1)(B) of such section, unless, after the date of
the enactment of this subsection, the Governor of the State
notifies the Secretaries of Health and Human Services and
Labor in writing of the decision of the Governor not to make
the State program a mandatory partner.''.
SEC. 8121. SENSE OF THE CONGRESS.
It is the sense of the Congress that a State welfare-to-
work program should include a mentoring program.
SEC. 8122. DRUG TESTING OF APPLICANTS FOR AND RECIPIENTS OF
ASSISTANCE.
(a) Requirement.--Section 408(a) (42 U.S.C. 608(a)) is
amended by adding at the end the following:
``(12) Drug testing requirements.--A State to which a grant
is made under section 403(a) for a fiscal year shall--
``(A) require an individual who has applied for, or is a
recipient of, assistance from the State program funded under
this part to undergo a physical test designed to detect the
use by the individual of any controlled substance (as defined
in section 102(6) of the Controlled Substances Act) if the
State has reason to believe that the person has unlawfully
used such a substance recently;
``(B) if a test administered pursuant to this paragraph
indicates that an individual has so used such a substance
recently, or if the State otherwise determines (on the basis
of such indicators as the State may establish) that an
individual is likely to have so used such a substance
recently--
``(i) ensure that the self-sufficiency plan developed under
section 408(b) with respect to the individual addresses the
use of the substance;
``(ii) suspend the provision of cash assistance under the
program to the family of the individual until a subsequent
such test indicates that the individual has not been using
the substance; and
``(iii) require, as a condition of providing any benefit
under the program to the family of the individual, that the
individual comply with the self-sufficiency plan, including
the provisions of the plan that address the use of the
substance, and undergo additional such tests every 30 or 60
days, as the State deems appropriate; and
``(C) terminate for 3 years the participation in the
program of the family of any individual who tests positive
for such use of such a substance in such number of
consecutive tests administered pursuant to this paragraph
(which shall be not less than 3 and not more than 6) as the
State deems appropriate.''.
(b) Penalty for Noncompliance.--Section 409(a) (42 U.S.C.
609(a)) is amended by adding at the end the following:
``(15) Penalty for failure to comply with drug testing
requirements.--If the Secretary determines that a State has
not complied with section 408(a)(12) during a fiscal year,
the Secretary shall reduce the grant payable to the State
under section 403(a)(1) for the immediately succeeding fiscal
year by an amount equal to not less than 5 percent and not
more than 10 percent of the State family assistance grant, as
the Secretary deems appropriate based on the frequency and
severity of the noncompliance.''.
Subtitle B--Child Care
SEC. 8201. ENTITLEMENT FUNDING.
Section 418(a)(3) (42 U.S.C. 618(a)(3)) is amended--
(1) by striking ``and'' at the end of subparagraph (E);
(2) by striking the period at the end of subparagraph (F)
and inserting a semicolon; and
(3) by adding at the end the following:
``(G) $2,717,000,000 for fiscal year 2006;
``(H) $2,767,000,000 for fiscal year 2007;
``(I) $2,817,000,000 for fiscal year 2008;
``(J) $2,867,000,000 for fiscal year 2009; and
``(K) $2,917,000,000 for fiscal year 2010.''.
Subtitle C--Child Support
SEC. 8301. FEDERAL MATCHING FUNDS FOR LIMITED PASS THROUGH OF
CHILD SUPPORT PAYMENTS TO FAMILIES RECEIVING
TANF.
(a) In General.--Section 457(a) (42 U.S.C. 657(a)) is
amended--
(1) in paragraph (1)(A), by inserting ``subject to
paragraph (7)'' before the semicolon; and
(2) by adding at the end the following:
``(7) Federal matching funds for limited pass through of
child support payments to families receiving tanf.--
Notwithstanding paragraph (1), a State shall not be required
to pay to the Federal Government the Federal share of an
amount collected during a month on behalf of a family that is
a recipient of assistance under the State program funded
under part A, to the extent that--
``(A) the State distributes the amount to the family;
``(B) the total of the amounts so distributed to the family
during the month--
``(i) exceeds the amount (if any) that, as of December 31,
2001, was required under State law to be distributed to a
family under paragraph (1)(B); and
``(ii) does not exceed the greater of--
``(I) $100; or
``(II) $50 plus the amount described in clause (i); and
``(C) the amount is disregarded in determining the amount
and type of assistance provided to the family under the State
program funded under part A.''.
(b) Applicability.--The amendments made by subsection (a)
shall apply to amounts distributed on or after October 1,
2008.
SEC. 8302. STATE OPTION TO PASS THROUGH ALL CHILD SUPPORT
PAYMENTS TO FAMILIES THAT FORMERLY RECEIVED
TANF.
(a) In General.--Section 457(a) (42 U.S.C. 657(a)), as
amended by section 8301(a) of this Act, is amended--
(1) in paragraph (2)(B), in the matter preceding clause
(i), by inserting ``, except as provided in paragraph (8),''
after ``shall''; and
(2) by adding at the end the following:
``(8) State option to pass through all child support
payments to families that formerly received tanf.--In lieu of
applying paragraph (2) to any family described in paragraph
(2), a State may distribute to the family any amount
collected during a month on behalf of the family.''.
(b) Applicability.--The amendments made by subsection (a)
shall apply to amounts distributed on or after October 1,
2008.
SEC. 8303. MANDATORY REVIEW AND ADJUSTMENT OF CHILD SUPPORT
ORDERS FOR FAMILIES RECEIVING TANF.
(a) In General.--Section 466(a)(10)(A)(i) (42 U.S.C.
666(a)(10)(A)(i)) is amended--
(1) by striking ``parent, or,'' and inserting ``parent
or''; and
(2) by striking ``upon the request of the State agency
under the State plan or of either parent,''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on October 1, 2007.
SEC. 8304. MANDATORY FEE FOR SUCCESSFUL CHILD SUPPORT
COLLECTION FOR FAMILY THAT HAS NEVER RECEIVED
TANF.
(a) In General.--Section 454(6)(B) (42 U.S.C. 654(6)(B)) is
amended--
(1) by inserting ``(i)'' after ``(B)'';
(2) by redesignating clauses (i) and (ii) as subclauses (I)
and (II), respectively;
(3) by adding ``and'' after the semicolon; and
(4) by adding after and below the end the following new
clause:
``(ii) in the case of an individual who has never received
assistance under a State program funded under part A and for
whom the State has collected at least $500 of support, the
State shall impose an annual fee of $25 for each case in
which services are furnished, which shall be retained by the
State from support collected on behalf of the individual (but
not from the 1st $500 so collected), paid by the individual
applying for the services, recovered from the absent parent,
or paid by the State out of its own funds (the payment of
which from State funds shall not be considered as an
administrative cost of the State for the operation of the
plan, and such fees shall be considered income to the
program);''.
(b) Conforming Amendment.--Section 457(a)(3) (42 U.S.C.
657(a)(3)) is amended to read as follows:
``(3) Families that never received assistance.--In the case
of any other family, the State shall distribute to the family
the portion of the amount so collected that remains after
withholding any fee pursuant to section 454(6)(B)(ii).''.
(c) Effective Date.--The amendments made by this section
shall take effect on October 1, 2006.
SEC. 8305. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.
Not later than 6 months after the date of the enactment of
this Act, the Secretary of Health and Human Services shall
submit to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
report on the procedures that the States use generally to
locate custodial parents for whom child support has been
collected but not yet distributed. The report shall include
an estimate of the total amount of undistributed child
support and the average length of time it takes undistributed
child support to be distributed. To the extent the Secretary
deems appropriate, the Secretary shall include in the report
recommendations as to whether additional procedures should be
established at the State or Federal level to expedite the
payment of undistributed child support.
SEC. 8306. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE
TRIGGERING PASSPORT DENIAL.
(a) In General.--Section 452(k)(1) (42 U.S.C. 652(k)(1)) is
amended by striking ``$5,000'' and inserting ``$2,500''.
(b) Conforming Amendment.--Section 454(31) (42 U.S.C.
654(31)) is amended by striking ``$5,000'' and inserting
``$2,500''.
(c) Effective Date.--The amendments made by this section
shall take effect on October 1, 2006.
SEC. 8307. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT
PAST-DUE CHILD SUPPORT ON BEHALF OF CHILDREN
WHO ARE NOT MINORS.
(a) In General.--Section 464 (42 U.S.C. 664) is amended--
(1) in subsection (a)(2)(A), by striking ``(as that term is
defined for purposes of this paragraph under subsection
(c))''; and
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by striking ``(1) Except as provided in paragraph (2),
as used in'' and inserting ``In''; and
[[Page H10614]]
(ii) by inserting ``(whether or not a minor)'' after ``a
child'' each place it appears; and
(B) by striking paragraphs (2) and (3).
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on October 1, 2007.
SEC. 8308. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR
SERVICE-CONNECTED DISABILITIES IN ORDER TO
ENFORCE CHILD SUPPORT OBLIGATIONS.
(a) In General.--Section 459(h) (42 U.S.C. 659(h)) is
amended--
(1) in paragraph (1)(A)(ii)(V), by striking all that
follows ``Armed Forces'' and inserting a semicolon; and
(2) by adding at the end the following:
``(3) Limitations with respect to compensation paid to
veterans for service-connected disabilities.--Notwithstanding
any other provision of this section:
``(A) Compensation described in paragraph (1)(A)(ii)(V)
shall not be subject to withholding pursuant to this
section--
``(i) for payment of alimony; or
``(ii) for payment of child support if the individual is
fewer than 60 days in arrears in payment of the support.
``(B) Not more than 50 percent of any payment of
compensation described in paragraph (1)(A)(ii)(V) may be
withheld pursuant to this section.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on October 1, 2007.
SEC. 8309. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.
Section 452(j) (42 U.S.C. 652(j)) is amended by inserting
``or the amount appropriated under this paragraph for fiscal
year 2002, whichever is greater,'' before ``which shall be
available''.
SEC. 8310. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE
FUNDING.
Section 453(o) (42 U.S.C. 653(o)) is amended--
(1) in the 1st sentence, by inserting ``or the amount
appropriated under this paragraph for fiscal year 2002,
whichever is greater,'' before ``which shall be available'';
and
(2) in the 2nd sentence, by striking ``for each of fiscal
years 1997 through 2001''.
SEC. 8311. INFORMATION COMPARISONS WITH INSURANCE DATA.
(a) Duties of the Secretary.--Section 452 (42 U.S.C. 652)
is amended by adding at the end the following:
``(m) Comparisons With Insurance Information.--
``(1) In general.--The Secretary, through the Federal
Parent Locator Service, may--
``(A) compare information concerning individuals owing
past-due support with information maintained by insurers (or
their agents) concerning insurance claims, settlements,
awards, and payments, and
``(B) furnish information resulting from such a comparison
to the State agencies responsible for collecting child
support from such individuals.
``(2) Liability.--An insurer (including any agent of an
insurer) shall not be liable under any Federal or State law
to any person for any disclosure provided for under this
subsection, or for any other action taken in good faith in
accordance with this subsection.''.
(b) State Reimbursement of Federal Costs.--Section
453(k)(3) (42 U.S.C. 653(k)(3)) is amended by inserting ``or
section 452(m)'' after ``this section''.
SEC. 8312. TRIBAL ACCESS TO THE FEDERAL PARENT LOCATOR
SERVICE.
Section 453(c)(1) (42 U.S.C. 653(c)(1)) is amended by
inserting ``or of any Indian tribe or tribal organization''
after ``any agent or attorney of any State''.
SEC. 8313. REIMBURSEMENT OF SECRETARY'S COSTS OF INFORMATION
COMPARISONS AND DISCLOSURE FOR ENFORCEMENT OF
OBLIGATIONS ON HIGHER EDUCATION ACT LOANS AND
GRANTS.
Section 453(j)(6)(F) (42 U.S.C. 653(j)(6)(F)) is amended by
striking ``additional''.
SEC. 8314. TECHNICAL AMENDMENT RELATING TO COOPERATIVE
AGREEMENTS BETWEEN STATES AND INDIAN TRIBES.
Section 454(33) (42 U.S.C. 654(33)) is amended by striking
``that receives funding pursuant to section 428 and''.
SEC. 8315. STATE OPTION TO USE STATEWIDE AUTOMATED DATA
PROCESSING AND INFORMATION RETRIEVAL SYSTEM FOR
INTERSTATE CASES.
Section 466(a)(14)(A)(iii) (42 U.S.C. 666(a)(14)(A)(iii))
is amended by inserting ``(but the assisting State may
establish a corresponding case based on such other State's
request for assistance)'' before the semicolon.
SEC. 8316. MODIFICATION OF RULE REQUIRING ASSIGNMENT OF
SUPPORT RIGHTS AS A CONDITION OF RECEIVING
TANF.
(a) In General.--Section 408(a)(3) (42 U.S.C. 608(a)(3)) is
amended to read as follows:
``(3) No assistance for families not assigning certain
support rights to the state.--
``(A) In general.--Subject to subparagraph (B), a State to
which a grant is made under section 403 shall require, as a
condition of providing assistance to a family under the State
program funded under this part, that a member of the family
assign to the State any rights the family member may have (on
behalf of the family member or of any other person for whom
the family member has applied for or is receiving such
assistance) to--
``(i) support from any other person which accrues during
the period that the family receives assistance under the
program; and
``(ii) at the option of the State, support from any other
person which has accrued before such period.
``(B) Limitation.--The total amount of support that may be
required to be provided with respect to rights assigned to a
State by a family member pursuant to subparagraph (A) shall
not exceed the total amount of assistance provided by the
State to the family.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on October 1, 2008.
SEC. 8317. STATE OPTION TO DISCONTINUE CERTAIN SUPPORT
ASSIGNMENTS.
Section 457(b) (42 U.S.C. 657(b)) is amended by striking
``shall'' and inserting ``may''.
SEC. 8318. TECHNICAL CORRECTION.
The second paragraph (7) of section 453(j) (42 U.S.C.
653(j)) is amended by striking ``(7)'' and inserting ``(9)''.
SEC. 8319. REDUCTION IN RATE OF REIMBURSEMENT OF CHILD
SUPPORT ADMINISTRATIVE EXPENSES.
Section 455(a)(2) (42 U.S.C. 655(a)(2)) is amended--
(1) in subparagraph (B), by striking ``, and'' and
inserting a semicolon;
(2) in subparagraph (C), by striking ``fiscal year 1990 and
each fiscal year thereafter.'' and inserting ``fiscal years
1990 through 2006;''; and
(3) by adding at the end the following:
``(D) 62 percent for fiscal year 2007;
``(E) 58 percent for fiscal year 2008;
``(F) 54 percent for fiscal year 2009; and
``(G) 50 percent for fiscal year 2010 and each fiscal year
thereafter.''.
SEC. 8320. INCENTIVE PAYMENTS.
(a) In General.--Section 455(a)(1) (42 U.S.C. 655(a)(1)) is
amended by inserting ``from amounts paid to the State under
section 458 or'' before ``to carry out an agreement''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on October 1, 2007.
Subtitle D--Child Welfare
SEC. 8401. EXTENSION OF AUTHORITY TO APPROVE DEMONSTRATION
PROJECTS.
Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by
striking ``2003'' and inserting ``2010''.
SEC. 8402. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS.
Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by
striking ``not more than 10''.
SEC. 8403. ELIMINATION OF LIMITATION ON NUMBER OF STATES THAT
MAY BE GRANTED WAIVERS TO CONDUCT DEMONSTRATION
PROJECTS ON SAME TOPIC.
Section 1130 (42 U.S.C. 1320a-9) is amended by adding at
the end the following:
``(h) No Limit on Number of States That May Be Granted
Waivers to Conduct Same or Similar Demonstration Projects.--
The Secretary shall not refuse to grant a waiver to a State
under this section on the grounds that a purpose of the
waiver or of the demonstration project for which the waiver
is necessary would be the same as or similar to a purpose of
another waiver or project that is or may be conducted under
this section.''.
SEC. 8404. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS
THAT MAY BE GRANTED TO A SINGLE STATE FOR
DEMONSTRATION PROJECTS.
Section 1130 (42 U.S.C. 1320a-9) is further amended by
adding at the end the following:
``(i) No Limit on Number of Waivers Granted to, or
Demonstration Projects That May Be Conducted by, a Single
State.--The Secretary shall not impose any limit on the
number of waivers that may be granted to a State, or the
number of demonstration projects that a State may be
authorized to conduct, under this section.''.
SEC. 8405. STREAMLINED PROCESS FOR CONSIDERATION OF
AMENDMENTS TO AND EXTENSIONS OF DEMONSTRATION
PROJECTS REQUIRING WAIVERS.
Section 1130 (42 U.S.C. 1320a-9) is further amended by
adding at the end the following:
``(j) Streamlined Process for Consideration of Amendments
and Extensions.--The Secretary shall develop a streamlined
process for consideration of amendments and extensions
proposed by States to demonstration projects conducted under
this section.''.
SEC. 8406. AVAILABILITY OF REPORTS.
Section 1130 (42 U.S.C. 1320a-9) is further amended by
adding at the end the following:
``(k) Availability of Reports.--The Secretary shall make
available to any State or other interested party any report
provided to the Secretary under subsection (f)(2), and any
evaluation or report made by the Secretary with respect to a
demonstration project conducted under this section, with a
focus on information that may promote best practices and
program improvements.''.
SEC. 8407. CLARIFICATION OF ELIGIBILITY FOR FOSTER CARE
MAINTENANCE PAYMENTS AND ADOPTION ASSISTANCE.
(a) Foster Care Maintenance Payments.--Section 472(a) (42
U.S.C. 672(a)) is amended to read as follows:
``(a) In General.--
``(1) Eligibility.--Each State with a plan approved under
this part shall make foster care maintenance payments on
behalf of each child who has been removed from the home of a
relative specified in section 406(a) (as in effect on July
16, 1996) into foster care if--
``(A) the removal and foster care placement met, and the
placement continues to meet, the requirements of paragraph
(2); and
[[Page H10615]]
``(B) the child, while in the home, would have met the AFDC
eligibility requirement of paragraph (3).
``(2) Removal and foster care placement requirements.--The
removal and foster care placement of a child meet the
requirements of this paragraph if--
``(A) the removal and foster care placement are in
accordance with--
``(i) a voluntary placement agreement entered into by a
parent or legal guardian of the child who is the relative
referred to in paragraph (1); or
``(ii) a judicial determination to the effect that
continuation in the home from which removed would be contrary
to the welfare of the child and that reasonable efforts of
the type described in section 471(a)(15) for a child have
been made;
``(B) the child's placement and care are the responsibility
of--
``(i) the State agency administering the State plan
approved under section 471; or
``(ii) any other public agency with which the State agency
administering or supervising the administration of the State
plan has made an agreement which is in effect; and
``(C) the child has been placed in a foster family home or
child-care institution.
``(3) AFDC eligibility requirement.--
``(A) In general.--A child in the home referred to in
paragraph (1) would have met the AFDC eligibility requirement
of this paragraph if the child--
``(i) would have received aid under the State plan approved
under section 402 (as in effect on July 16, 1996) in the
home, in or for the month in which the agreement was entered
into or court proceedings leading to the determination
referred to in paragraph (2)(A)(ii) of this subsection were
initiated; or
``(ii)(I) would have received the aid in the home, in or
for the month referred to in clause (i), if application had
been made therefor; or
``(II) had been living in the home within 6 months before
the month in which the agreement was entered into or the
proceedings were initiated, and would have received the aid
in or for such month, if, in such month, the child had been
living in the home with the relative referred to in paragraph
(1) and application for the aid had been made.
``(B) Resources determination.--For purposes of
subparagraph (A), in determining whether a child would have
received aid under a State plan approved under section 402
(as in effect on July 16, 1996), a child whose resources
(determined pursuant to section 402(a)(7)(B), as so in
effect) have a combined value of not more than $10,000 shall
be considered a child whose resources have a combined value
of not more than $1,000 (or such lower amount as the State
may determine for purposes of section 402(a)(7)(B)).
``(4) Eligibility of certain alien children.--Subject to
title IV of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, if the child is an alien
disqualified under section 245A(h) or 210(f) of the
Immigration and Nationality Act from receiving aid under the
State plan approved under section 402 in or for the month in
which the agreement described in paragraph (2)(A)(i) was
entered into or court proceedings leading to the
determination described in paragraph (2)(A)(ii) were
initiated, the child shall be considered to satisfy the
requirements of paragraph (3), with respect to the month, if
the child would have satisfied the requirements but for the
disqualification.''.
(b) Adoption Assistance.--Section 473(a)(2) (42 U.S.C.
673(a)(2)) is amended to read as follows:
``(2)(A) For purposes of paragraph (1)(B)(ii), a child
meets the requirements of this paragraph if the child--
``(i)(I)(aa) was removed from the home of a relative
specified in section 406(a) (as in effect on July 16, 1996)
and placed in foster care in accordance with a voluntary
placement agreement with respect to which Federal payments
are provided under section 474 (or section 403, as such
section was in effect on July 16, 1996), or in accordance
with a judicial determination to the effect that continuation
in the home would be contrary to the welfare of the child;
and
``(bb) met the requirements of section 472(a)(3) with
respect to the home referred to in item (aa) of this
subclause;
``(II) meets all of the requirements of title XVI with
respect to eligibility for supplemental security income
benefits; or
``(III) is a child whose costs in a foster family home or
child-care institution are covered by the foster care
maintenance payments being made with respect to the minor
parent of the child as provided in section 475(4)(B); and
``(ii) has been determined by the State, pursuant to
subsection (c) of this section, to be a child with special
needs.
``(B) Section 472(a)(4) shall apply for purposes of
subparagraph (A) of this paragraph, in any case in which the
child is an alien described in such section.
``(C) A child shall be treated as meeting the requirements
of this paragraph for the purpose of paragraph (1)(B)(ii) if
the child--
``(i) meets the requirements of subparagraph (A)(ii);
``(ii) was determined eligible for adoption assistance
payments under this part with respect to a prior adoption;
``(iii) is available for adoption because--
``(I) the prior adoption has been dissolved, and the
parental rights of the adoptive parents have been terminated;
or
``(II) the child's adoptive parents have died; and
``(iv) fails to meet the requirements of subparagraph (A)
but would meet such requirements if--
``(I) the child were treated as if the child were in the
same financial and other circumstances the child was in the
last time the child was determined eligible for adoption
assistance payments under this part; and
``(II) the prior adoption were treated as never having
occurred.''.
SEC. 8408. CLARIFICATION REGARDING FEDERAL MATCHING OF
CERTAIN ADMINISTRATIVE COSTS UNDER THE FOSTER
CARE MAINTENANCE PAYMENTS PROGRAM.
(a) Administrative Costs Relating to Unlicensed Care.--
Section 472 (42 U.S.C. 672) is amended by inserting after
subsection (h) the following:
``(i) Administrative Costs Associated With Otherwise
Eligible Children not in Licensed Foster Care Settings.--
Expenditures by a State that would be considered
administrative expenditures for purposes of section 474(a)(3)
if made with respect to a child who was residing in a foster
family home or child-care institution shall be so considered
with respect to a child not residing in such a home or
institution--
``(1) in the case of a child who has been removed in
accordance with subsection (a) of this section from the home
of a relative specified in section 406(a) (as in effect on
July 16, 1996), only for expenditures--
``(A) with respect to a period of not more than the lesser
of 12 months or the average length of time it takes for the
State to license or approve a home as a foster home, in which
the child is in the home of a relative and an application is
pending for licensing or approval of the home as a foster
family home; or
``(B) with respect to a period of not more than 1 calendar
month when a child moves from a facility not eligible for
payments under this part into a foster family home or child
care institution licensed or approved by the State; and
``(2) in the case of any other child who is potentially
eligible for benefits under a State plan approved under this
part and at imminent risk of removal from the home, only if--
``(A) reasonable efforts are being made in accordance with
section 471(a)(15) to prevent the need for, or if necessary
to pursue, removal of the child from the home; and
``(B) the State agency has made, not less often than every
6 months, a determination (or redetermination) as to whether
the child remains at imminent risk of removal from the
home.''.
(b) Conforming Amendment.--Section 474(a)(3) of such Act
(42 U.S.C. 674(a)(3)) is amended by inserting ``subject to
section 472(i)'' before ``an amount equal to''.
SEC. 8409. TECHNICAL CORRECTION.
Section 1130(b)(1) (42 U.S.C. 1320a-9(b)(1)) is amended by
striking ``422(b)(9)'' and inserting ``422(b)(10)''.
SEC. 8410. TECHNICAL CORRECTION.
Section 470 (42 U.S.C. 670) is amended by striking ``June
1, 1995'' and inserting ``July 16, 1996''.
Subtitle E--Supplemental Security Income
SEC. 8501. REVIEW OF STATE AGENCY BLINDNESS AND DISABILITY
DETERMINATIONS.
Section 1633 (42 U.S.C. 1383b) is amended by adding at the
end the following:
``(e)(1) The Commissioner of Social Security shall review
determinations, made by State agencies pursuant to subsection
(a) in connection with applications for benefits under this
title on the basis of blindness or disability, that
individuals who have attained 18 years of age are blind or
disabled as of a specified onset date. The Commissioner of
Social Security shall review such a determination before any
action is taken to implement the determination.
``(2)(A) In carrying out paragraph (1), the Commissioner of
Social Security shall review--
``(i) at least 20 percent of all determinations referred to
in paragraph (1) that are made in fiscal year 2006;
``(ii) at least 40 percent of all such determinations that
are made in fiscal year 2007; and
``(iii) at least 50 percent of all such determinations that
are made in fiscal year 2008 or thereafter.
``(B) In carrying out subparagraph (A), the Commissioner of
Social Security shall, to the extent feasible, select for
review the determinations which the Commissioner of Social
Security identifies as being the most likely to be
incorrect.''.
SEC. 8502. PAYMENT OF CERTAIN LUMP SUM BENEFITS IN
INSTALLMENTS UNDER THE SUPPLEMENTAL SECURITY
INCOME PROGRAM.
(a) In General.--Section 1631(a)(10)(A)(i) (42 U.S.C.
1383(a)(10)(A)(i)) is amended by striking ``12'' and
inserting ``3''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect 3 months after the date of the enactment of
this Act.
Subtitle F--State and Local Flexibility
SEC. 8601. PROGRAM COORDINATION DEMONSTRATION PROJECTS.
(a) Purpose.--The purpose of this section is to establish a
program of demonstration projects in a State or portion of a
State to coordinate multiple public assistance, workforce
development, and other programs, for
[[Page H10616]]
the purpose of supporting working individuals and families,
helping families escape welfare dependency, promoting child
well-being, or helping build stronger families, using
innovative approaches to strengthen service systems and
provide more coordinated and effective service delivery.
(b) Definitions.--In this section:
(1) Administering secretary.--The term ``administering
Secretary'' means, with respect to a qualified program, the
head of the Federal agency responsible for administering the
program.
(2) Qualified program.--The term ``qualified program''
means--
(A) a program under part A of title IV of the Social
Security Act; or
(B) the program under title XX of such Act.
(c) Application Requirements.--The head of a State entity
or of a sub-State entity administering 2 or more qualified
programs proposed to be included in a demonstration project
under this section shall (or, if the project is proposed to
include qualified programs administered by 2 or more such
entities, the heads of the administering entities (each of
whom shall be considered an applicant for purposes of this
section) shall jointly) submit to the administering Secretary
of each such program an application that contains the
following:
(1) Programs included.--A statement identifying each
qualified program to be included in the project, and
describing how the purposes of each such program will be
achieved by the project.
(2) Population served.--A statement identifying the
population to be served by the project and specifying the
eligibility criteria to be used.
(3) Description and justification.--A detailed description
of the project, including--
(A) a description of how the project is expected to improve
or enhance achievement of the purposes of the programs to be
included in the project, from the standpoint of quality, of
cost-effectiveness, or of both; and
(B) a description of the performance objectives for the
project, including any proposed modifications to the
performance measures and reporting requirements used in the
programs.
(4) Waivers requested.--A description of the statutory and
regulatory requirements with respect to which a waiver is
requested in order to carry out the project, and a
justification of the need for each such waiver.
(5) Cost neutrality.--Such information and assurances as
necessary to establish to the satisfaction of the
administering Secretary, in consultation with the Director of
the Office of Management and Budget, that the proposed
project is reasonably expected to meet the applicable cost
neutrality requirements of subsection (d)(4).
(6) Evaluation and reports.--An assurance that the
applicant will conduct ongoing and final evaluations of the
project, and make interim and final reports to the
administering Secretary, at such times and in such manner as
the administering Secretary may require.
(7) Other information and assurances.--Such other
information and assurances as the administering Secretary may
require.
(d) Approval of Applications.--
(1) In general.--The administering Secretary with respect
to a qualified program that is identified in an application
submitted pursuant to subsection (c) may approve the
application and, except as provided in paragraph (2), waive
any requirement applicable to the program, to the extent
consistent with this section and necessary and appropriate
for the conduct of the demonstration project proposed in the
application, if the administering Secretary determines that
the project--
(A) has a reasonable likelihood of achieving the objectives
of the programs to be included in the project;
(B) may reasonably be expected to meet the applicable cost
neutrality requirements of paragraph (4), as determined by
the Director of the Office of Management and Budget; and
(C) includes the coordination of 2 or more qualified
programs.
(2) Provisions excluded from waiver authority.--A waiver
shall not be granted under paragraph (1) with respect to any
provision of law relating to--
(A) civil rights or prohibition of discrimination;
(B) purposes or goals of any program;
(C) maintenance of effort requirements;
(D) health or safety;
(E) labor standards under the Fair Labor Standards Act of
1938; or
(F) environmental protection;
(3) Agreement of each administering secretary required.--
(A) In general.--An applicant may not conduct a
demonstration project under this section unless each
administering Secretary with respect to any program proposed
to be included in the project has approved the application to
conduct the project.
(B) Agreement with respect to funding and implementation.--
Before approving an application to conduct a demonstration
project under this section, an administering Secretary shall
have in place an agreement with the applicant with respect to
the payment of funds and responsibilities required of the
administering Secretary with respect to the project.
(4) Cost-neutrality requirement.--
(A) General rule.--Notwithstanding any other provision of
law (except subparagraph (B)), the total of the amounts that
may be paid by the Federal Government for a fiscal year with
respect to the programs in the State in which an entity
conducting a demonstration project under this section is
located that are affected by the project shall not exceed the
estimated total amount that the Federal Government would have
paid for the fiscal year with respect to the programs if the
project had not been conducted, as determined by the Director
of the Office of Management and Budget.
(B) Special rule.--If an applicant submits to the Director
of the Office of Management and Budget a request to apply the
rules of this subparagraph to the programs in the State in
which the applicant is located that are affected by a
demonstration project proposed in an application submitted by
the applicant pursuant to this section, during such period of
not more than 5 consecutive fiscal years in which the project
is in effect, and the Director determines, on the basis of
supporting information provided by the applicant, to grant
the request, then, notwithstanding any other provision of
law, the total of the amounts that may be paid by the Federal
Government for the period with respect to the programs shall
not exceed the estimated total amount that the Federal
Government would have paid for the period with respect to the
programs if the project had not been conducted.
(5) 90-day approval deadline.--
(A) In general.--If an administering Secretary receives an
application to conduct a demonstration project under this
section and does not disapprove the application within 90
days after the receipt, then--
(i) the administering Secretary is deemed to have approved
the application for such period as is requested in the
application, except to the extent inconsistent with
subsection (e); and
(ii) any waiver requested in the application which applies
to a qualified program that is identified in the application
and is administered by the administering Secretary is deemed
to be granted, except to the extent inconsistent with
paragraph (2) or (4) of this subsection.
(B) Deadline extended if additional information is
sought.--The 90-day period referred to in subparagraph (A)
shall not include any period that begins with the date the
Secretary requests the applicant to provide additional
information with respect to the application and ends with the
date the additional information is provided.
(e) Duration of Projects.--A demonstration project under
this section may be approved for a term of not more than 5
years.
(f) Reports to Congress.--
(1) Report on disposition of applications.--Within 90 days
after an administering Secretary receives an application
submitted pursuant to this section, the administering
Secretary shall submit to each Committee of the Congress
which has jurisdiction over a qualified program identified in
the application notice of the receipt, a description of the
decision of the administering Secretary with respect to the
application, and the reasons for approving or disapproving
the application.
(2) Reports on projects.--Each administering Secretary
shall provide annually to the Congress a report concerning
demonstration projects approved under this section,
including--
(A) the projects approved for each applicant;
(B) the number of waivers granted under this section, and
the specific statutory provisions waived;
(C) how well each project for which a waiver is granted is
improving or enhancing program achievement from the
standpoint of quality, cost-effectiveness, or both;
(D) how well each project for which a waiver is granted is
meeting the performance objectives specified in subsection
(c)(3)(B);
(E) how each project for which a waiver is granted is
conforming with the cost-neutrality requirements of
subsection (d)(4); and
(F) to the extent the administering Secretary deems
appropriate, recommendations for modification of programs
based on outcomes of the projects.
Subtitle G--Repeal of Continued Dumping and Subsidy Offset
SEC. 8701. REPEAL OF CONTINUED DUMPING AND SUBSIDY OFFSET.
(a) Repeal.--Section 754 of the Tariff Act of 1930 (19
U.S.C. 1675c), and the item relating to section 754 in the
table of contents for title VII of that Act, are repealed.
(b) Existing Accounts.--All amounts remaining, upon the
enactment of this title, in any special account established
under section 754(e)(1) of the Tariff Act of 1930 (as in
effect on the day before the date of the enactment of this
title) shall be deposited in the general fund of the
Treasury.
Subtitle H--Effective Date
SEC. 8801. EFFECTIVE DATE.
(a) In General.--Except as otherwise provided in this
title, this title and the amendments made by this title shall
be effective as of October 1, 2005.
(b) Exception.--In the case of a State plan under title IV
of the Social Security Act which the Secretary determines
requires State legislation in order for the plan to meet the
additional requirements imposed by the amendments made by
this title, the effective date of the amendments imposing the
additional requirements shall be 3 months after the first day
of the first calendar quarter beginning after the close of
[[Page H10617]]
the first regular session of the State legislature that
begins after the date of the enactment of this Act. For
purposes of the preceding sentence, in the case of a State
that has a 2-year legislative session, each year of the
session shall be considered to be a separate regular session
of the State legislature.
The SPEAKER pro tempore. The gentleman from Iowa (Mr. Nussle) and the
gentleman from South Carolina (Mr. Spratt) each will control 1 hour.
The Chair recognizes the gentleman from Iowa (Mr. Nussle).
{time} 2230
Mr. NUSSLE. Mr. Speaker, several months ago, we approved the fiscal
year 2006 budget resolution. In that budget, the Republicans and
Congress laid out our plan, which is based on our fundamental
principles to promote economic growth, create jobs, and control
government spending. It is part of an overall plan.
Today we stand at what is a critical juncture in implementing that
plan and making it a reality. The Deficit Reduction Act starts the
process of adopting the real policies and the real reforms that make
these massive entitlement programs more effective, more efficient, and
less costly.
I expect, as we have already seen, that this is going to be a very
vigorous and even sometimes contentious debate. I welcome that. I think
we should all welcome that. I think that is what this Chamber is really
for. It is what our constituents sent us here to do, to set the
priorities, to come up with a solid plan, to do the real work, even if
it is difficult, even if it is a challenge, even if you have to fight
for it, even if you have to make a debate and a speech and everything
else in order to get it done. The point is, we have got to work on this
plan and see it through.
This is far from the first day that we have been on the floor or
worked in committees in order to get this done. Mr. Speaker, for the
past three budget years, we have been working on this plan to get the
economy going, to create jobs, to control spending, and to actually
reduce the deficit. I would like to review our plan.
First, Republicans committed to reduce the total discretionary
spending, making the first actual reduction in the annual spending that
happens because we vote on it here in Congress. That is the
discretionary spending. It is the first time we have made an actual
reduction in this nondiscretionary spending, this discretionary
spending part of the budget. The first time we have done that since the
1980s.
Second, the Republicans committed to no tax increases. More
importantly, we did not want an automatic tax increase happening. In
fact, if Congress does not act this year, if we fail to pass the tax
reconciliation, taxes automatically go up, no vote. They just go up.
Third, we decided that we wanted to tackle these important mandatory
programs. For the past 3 years, we have stuck to our plan, and we have
produced results. Let me just show you this chart. Mr. Speaker, when we
started this process, we had a $521 billion deficit that was staring us
in the face, caused by what happened on September 11, 2001, the war in
Afghanistan, the war in Iraq, the stock market dot-com bubble bursting,
the emergency spending we had to deal with in order to deal with so
many broken lives, so many challenges across the country in the wake of
the terrorist attack.
Homeland Security spending skyrocketed; and interestingly enough, the
same opposition party who comes to the floor tonight decrying spending,
decrying deficits voted for most of that spending that got us to the
$521 billion worth of deficit. As part of implementing this plan, we
reduced that deficit from $521 billion to $427 billion in the first
year; $90-some billion in 1 year alone the deficit came down
implementing that plan.
Second year, that we just closed the books on, actual reduction from
$521 billion to $427 billion to $319 billion. I will suggest to you
that $319 billion is not where we want to be. We are heading in the
right direction. We are heading in the right direction because we have
a plan to grow the economy, to control spending, to create jobs, and
create taxpayers. As a result of that, revenues have come in. The
strong sustained growth in our economy has driven Federal tax receipts
up over 15 percent over last year, even with tax reduction.
Let me repeat that. I understand all the rhetoric on the floor here
tonight, but we reduced taxes. The economy expanded. More money came
into Washington. That is a fact, incontrovertible fact. No one can come
to the floor tonight and tell you any differently. Revenues have
increased as a result of strong economic growth.
The Democrats act like this is the government's money that we are
talking about here tonight, that all of these, whether it is tax
reductions or spending or whatever it is, that this is the government's
money. This is not the government's money.
Mr. Speaker, this is the hard-working taxpayers' money. They do the
working, they do the sweating, they do the toiling, they are the ones
that open small businesses and farms. They are the ones that employ
Americans. They are the ones that do not wait for the government to
come to bail them out. If they have a tough year, they are the folks
who do all the hard work and pay the taxes. It is their money that we
are talking about here tonight. That surge of revenue, that surge of
money coming from those taxpayers was the largest factor in this
dramatic reduction of the deficit, nearly $100 billion this year, $200
billion over the last 2 years.
Even combined, growing the economy and limiting just that 30 percent
of our spending is not going to be enough. It is not going to be enough
to get where we need to be. The set of challenges still faces us.
We added a third prong to this important deficit reduction. We
committed for the first time in nearly a decade to reform and find
savings in the largest portion of our Federal spending. That is what we
are here to do tonight. It is part of that overall plan.
This spending is what we call mandatory, our automatic pilot-kind of
spending. It is over now 50 percent of the entire amount of money that
is spent by the Federal Government; and it is without boundaries, it is
without reform, and it is pretty much without any kind of review
whatsoever. In fact, Congress does not even have to vote on these
increases. Let me say that again so you understand. If we do nothing
tonight, spending automatically increases, and we have got to go to the
taxpayers to get more money. We have got to go to those hard-working
Americans to get more money from them in order to run the government.
Automatically, if we do nothing tonight, just like if we do nothing
on taxes, they will automatically increase. That is the fantasy that we
are dealing with tonight. That is the fantasy of our congressional
budget process unfortunately, is things automatically occur if you do
not do the hard work of reforming and reducing our spending and our
taxes. Compounding the problem is that unchecked spending is growing
faster than our economy, faster than inflation, and far beyond our
means to sustain it whatsoever. The money is usually just feeding a
gigantic bureaucracy. Really, this is a bureaucracy that is failing
most of the people it is intended to help.
I asked eight of our very able chairmen and their committees to go to
work. I asked them to make some reforms. Over the last 6 months,
hundreds of ideas were discussed. Hearings were held. We listened to
our constituents, to scholars, to experts, to people who understand the
intricacies of these programs. We partnered with the States. We talked
to our Governors. All of the committees have met or exceeded the
original savings targets with reforms, bringing the total of savings
that we will consider here tonight to $50 billion over 5 years.
Really, this is not about saving money. This is an effort to start
reforming our largest Federal programs and ensure that they can
continue to serve their missions, to serve the people and help the ones
who are most in need. Most of these programs desperately need reform.
In many cases, they are operating on decades-old models.
Take Medicaid as an example. We are talking about Medicaid tonight as
just one of the myriad programs, invented in 1965 before the personal
computer, before we walked on the Moon. Yes, it is a program we all
support; but, yes, it is a program in need of dramatic reform in order
to meet the needs of our changing society and Nation.
Most of these programs desperately need this reform. They are
operating
[[Page H10618]]
on these models, and we need to make this change. This process that we
call reconciliation is just one of the few tools that we have at our
disposal in order to make sure that we can go through this process.
I want to give you a sampling of the reforms that are in this
package. We expand and build upon the welfare reform that was so
successful from 1996. We reformed Medicaid, just as the Governors have
asked us to give the States the flexibility in those 50 laboratories to
deliver a better-quality service to the people who need them.
We reformed food stamps, a program that helped so many in need, but
is in so much need of reform. We enhanced pension security, just at a
time when the Pension Benefit Guaranty Corporation has come out telling
us we need these reforms, otherwise people's pensions are a desperate
concern.
Boosting the low-income heating assistance, at a time we know the
winter is going to be challenging and eliminating the excessive student
loan overhead costs.
People are going to come here tonight to protect the bureaucracy of
these programs. We want to make sure that these programs are helping
those in need. These are just a good start. But these reforms and
savings are not going to solve the long-term spending problem in a
single stroke. But if you listen to the debate, it will sound tonight
like we are eliminating half the Federal Government. You will hear
debate tonight that will make it sound like we have eliminated these
programs.
In fact, what we are talking about here is the total amount of this
bill. If you take all of it together, the total savings amounts to less
than one-half of 1 percent over the next 5 years. These programs will
grow. What we are saying is we just need to slow them down a little bit
and instill some reforms so that they can work better. Even though our
opponents will claim that these are cuts, spending will continue to
grow under each of these programs faster, even, than inflation.
Under our plan, Medicaid is an example. We will continue to grow at
7.5 percent instead of what it is currently growing at, which all of
our Governors came to Washington to say was an unsustainable rate at
7.7 percent. That is not a cut. Only in Washington would that be called
a cut.
I know my friends on the other side will disagree with our plan to
reform our government programs and achieve these savings for American
taxpayers. That is fair. We can have that debate tonight. But I ask
you, through the Speaker, where is your plan?
You were given an opportunity to present a plan tonight. You will
come to the floor tonight and tell us how important these programs are
and how they are already failing Americans, but you have not one
scintilla of an idea of how to make sure that these programs can
continue.
What is your plan to reform these important programs? What are your
innovative ideas, or is it simply increase taxes on hard-working
Americans? Is it simply more politics as usual? Is it more press
releases and attack ads? I have no doubt that is what it is going to
be.
I hope Democrats do not plan to come and waste our time tonight,
telling us yet again that you do not agree with us. I mean, gee, that
is really news. Mr. Speaker, in fact, boy, look at the balcony where
all the reporters usually sit. It is really news that you do not
support our plan. It is really news that you disagree with the
Republicans. It is really news that Republicans and Democrats are
fighting. That is not news at all.
What would be news is if you came forward with an alternative. That
would be news. If you came with a plan, that would actually be a
surprise. It is not going to happen tonight.
You were allowed to present a plan. I am proud to present our plan to
reform these very important government programs that achieve savings
for hard-working American people who pay the taxes around here. It is
part of our successful ongoing effort during one of the most
challenging times in our history to promote personal responsibility, to
reform government bureaucracy, the same bureaucracy that they will
defend tonight is the same bureaucracy that did not get the job done
down in the gulf. They decry the bureaucracy on the one hand, and yet
they try and protect it on the other.
{time} 2245
This eliminates some of the waste, fraud and abuse within our system.
And it grows our economy to create jobs and opportunities for the
American people. We have a plan to reduce the deficit and to govern
America.
Mr. Speaker, I ask you, where is their plan? Where is your agenda for
America, to govern and to reduce your deficit and get us back on path?
I ask that we support the only plan and the best plan and that is the
plan we propose tonight.
Mr. Speaker, I reserve the balance of my time.
Mr. SPRATT. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, with all due respect, this bill is a sham. This bill
does not reduce the deficit. It increases the deficit by at least $7
billion, and it results from a budget resolution passed a few months
ago that does not lower the deficit. It raises the deficit by over $100
million over the next 5 years.
Now, I know the supporters of this bill claim it is going to help for
Hurricanes Katrina and Rita, well, that is a phony claim, too. This
bill has nothing to do with paying for Katrina. It has everything to do
with facilitating further tax cuts. This bill comes out of a larger
budget resolution for 2006 that calls for a total of $106 billion in
new and additional tax cuts, $70 billion in reconciled tax cuts, $36
billion in unreconciled tax cuts. So the spending cuts in this bill are
really just the first step in a three-step process.
Step number two will come tomorrow or soon thereafter when tax cuts
are introduced in the form of another reconciliation bill. And when
these two are put together, the result will be a bigger deficit. So
this is not a deficit reduction bill. It does not lead to deficit
reduction. And after the tax cuts are passed, there will not be a dime
left to pay for Katrina and Rita, but there will be a bigger deficit.
And that brings on the third step in this process and that is a $781
billion increase in the national debt of the United States of America.
That is, this bill is part of the process that will require an increase
in the national debt ceiling of $781 billion. As you can see, over the
last 4 fiscal years, to accommodate the budgets of this administration
and the leadership of this Congress, the Congress has raised the legal
debt ceiling of the United States by $3 trillion 15 billion, of which
$781 billion is included in this budget resolution, deemed approved
when we pass the budget resolution.
Once upon a time, the purpose for reconciliation was to reduce the
deficit, rein in the deficit. But the reconciliation bills for this
year, this one and the tax bill to come, stand that purpose on its
head. They actually raise the deficit for the reasons I have just
mentioned. And this is our first reason for opposing the bill. In the
end, it will not reduce or rein in the deficit. It will only make it
worse.
Let me answer the gentleman's charge of where is our plan? We do not
need a plan. We produced a plan as an alternate budget which they chose
not to vote for just a few months ago. The budget resolution for 2006
which we brought to this House floor would have balanced the budget in
the year 2012, and accumulated far less debt than their budget
resolution in the process.
Where is the plan tonight? We do not need a plan because this plan
tonight on the House floor is a plan to permit further tax cuts. It was
our feeling that when you have a $412 billion deficit, and that is what
it was in 2004, the first rule of holes is to quit digging. Do not make
the deficit worse. So we did not propose further tax cuts that would
have made the deficit worse, which we would have done and we are trying
to mitigate with this particular bill. That is why we did not have a
plan here. Our budget did not call for it. But our budget resolution
would put the budget in the surplus again by the year 2012.
This bill calls itself ``The Deficit Reduction Act of 2005,'' but it
does not live up to its name. This bill results from a budget
resolution that does not lower the deficit. The bill raises the deficit
by $100 billion over the next 5 years.
Supporters claim that this bill will help pay for Hurricanes Katrina
and Rita. This too is a phoney claim. This bill has nothing to do with
paying for Katrina; it has everything to do with facilitating further
tax cuts. This bill comes out
[[Page H10619]]
of a larger budget resolution that calls for a total of $106 billion in
new and additional tax cuts: $70 billion in reconciled tax cuts, along
with $36 billion in unreconciled tax cuts.
The spending cuts in this bill are the first step in a three-step
process. The second step will come tomorrow or soon thereafter in the
form of tax cuts, and when these two steps are completed, the net
result will be an increase in the deficit of around $7 billion. After
the tax cuts are passed, there will not be a dime left to pay for
Katrina and Rita. But there will be a bigger deficit, and so that
brings in the third step in this process, a $781 billion increase in
the government's debt ceiling. The budget resolution of 2006 already
deems its approval by the House.
Once upon a time, the purpose of reconciliation was to rein in the
deficit. The reconciliation bills for this year stand that purpose on
its head. They will actually raise the deficit, for reasons I have just
mentioned. This year's budget resolution called for $106 billion in new
tax cuts over five years. $70 billion of that is assured a fast track
through the Senate because these tax cuts are ``reconciled.'' The
mandatory spending cuts, contained in this bill, will go to offset in
part the revenues lost to tax cuts. Nothing goes toward deficit
reduction or toward paying for Katrina, due to new and additional tax
cuts.
This is our first reason for opposing this bill. In the end, it will
not reduce or rein in the deficit; it will only make it worse.
Now, that outcome may not be immediately clear. That's because this
reconciliation bill with spending cuts is being considered separately
from a second reconciliation bill with tax cuts.
There is another reason for the hiatus between spending cuts and tax
cuts. The spending cuts made by this bill will hit the young, the old,
the sick, and the poor, and hit them hard. The savings realized from
these spending cuts will go to offset, partially at least, tax cuts for
taxpayers whose incomes are in the upper brackets. Our colleagues from
across the aisle want to avoid that connection, so they have separated
the two bills.
He may not buy the claim that this bill is ot pay for or partially
offset the cost of Katrina. But we do believe that disaster relief is a
form of shared sacrifice. So in paying for Katrina, we believe that the
cost should be spread equitably over the entire country, and not just
loaded on those least able to bear it. Yet that's exactly what this
bill does. Who bears the brunt of the cuts made by this bill? Single
mothers seeking child support from delinquent missing dads. Students
struggling to pay loans for their college education. Foster children.
The sick and poor whose only access to health care coverage is
Medicaid, and families who depend on food stamps. Is this any way to
pay for Hurricane Katrina? Or to pave the way for tax cuts?
There are $11.4 bilion in cuts to Medicaid, including cuts over $8
billion that fall upon beneficiaries through co-pays, premiums, and
benefit reduction; -$14.3 billion in spending cuts to college student
loan programs over 5-years, of which $7.8 billion is realized through
increases in the interest rates and fees that students pay; -$4.9
billion in cuts to child support enforcement, which will cut back the
state's capacity to enforce child support orders, -$577 million in
foster care cuts; $732 million in SSI cuts.
Other provisions in this bill cut conservation by $504 million; cut
deeply into rural development; and eliminate altogether the Byrd
Amendment. The Byrd Amendment requires that duties paid by foreign
firms, as a penalty for dumping their goods here at prices below cost,
should be shared with U.S. firms damaged by import dumping.
This reconciliation package claims to offset the cost of Hurricane
Katrina. That, like the title, is a false claim for two reasons. Rather
than helping pay for Katrina, many of the services cut, such as Food
Stamps and Medicaid, benefit the victims of these disasters, the people
who have been uprooted and displaced.
I must say, we are mystified over this newfound interest in offsets.
Since 2003, we have passed three huge supplementals to cover the cost
of war and reconstruction in Iraq and Afghanistan. We supported all of
them, because when we put troops in the field, we stand behind them.
But any notion of offsetting those costs was dismissed out of hand.
As we have asked before, why is it that you insist on offsetting the
cost of rebuilding Biloxi, but not the cost of rebuilding Baghdad or
Basra? Will the next supplemental for Iraq be offset? There is $50
billion in ``bridge funding'' in the defense bill not offset.
If this bill reduced the deficit or helped pay for Katrina, as you
claim, we would still have trouble with the cuts you have chosen. Many
hurt those who need help most. Moreover, the savings are overstated,
and some won't stand scrutiny. For example:
This bill includes $6.2 billion in increased PBGC premiums, but these
premiums are entrusted to pay pension benefit guaranties, and in the
near future, these additional premiums will be spent for that very
purpose. You can claim these additional receipts as offsets to your tax
cuts only because the federal government runs a cash-basis budget. If
we accrue the liability for benefit guaranties, there would be no
balance in this trust fund to use as an offset to tax cuts.
This bill makes crippling cuts to child support enforcement: $4.9
billion over five years. This will only shift the cost to the states,
and if the states don't make up the difference, this reduction will
result in a loss of more than $24 billion in child support over the
next ten years. This is a flagrant case of false economy.
And as if the reduction in child support were not tough enough, this
bill allows Medicaid to charge children co-pays, and to deny care if
the cost-sharing is not paid. At $3 and up, the co-pays may not seem
much to us, but they can be a birch well for someone living at or below
the poverty line. The co-pays as such do not save much in total
Medicaid spending. The way they save money is by discouraging low-
income children and others from seeking medical care.
This bill also claims one-time receipts from spectrum auctions to
offset the recurring loss of revenues to permanent tax cuts, and it
overestimates the net receipts by assuming the cost of converter boxes
at $1 billion, though the cost is likely to be about three times that
amount.
This bill cuts $2.2 billion in mandatory spending to administer the
student loan program. But these costs have to be paid. Guess where? Out
of discretinary funds for education.
In short, there are many reasons that this bill does not live up to
its title. It makes deep and painful cuts all right, but it paves the
way for new and additional tax cuts, despite an enormous deficit, and
the end result is a larger deficit. In this respect, today's
legislation is like the budget resolution that set it in motion. This
is one in a series of fiscal actions that will cause the debt ceiling
of the United States to be raised by $3 trillion between 2002 and 2006.
So, not only is this bill a shame, it is also a sham.
When the Bush Administration took office in 2001, it inherited a
surplus and blithely predicted that the surplus would endure, even if
its trillion dollar tax cuts were adopted. The Bush budget was adopted,
and in fiscal 2005, the bottom line was not a surplus of $269 billion
as it once projected, but a deficit of $319 billion. Realistic
estimates show that these deficits are structural and will get worse,
not better, over the next ten years, and that when the Bush
Administration's full agenda is factored in, deficits will climb to
$640 billion by 2015; the national debt will double; and debt service
will more than double. This legislation will make deep and painful
cuts, but it will not avoid that budget outcome or lead to balance in
any time frame.
So, we oppose this bill because it's not only a shame, but also a
sham.
Mr. Speaker, I ask unanimous consent to yield 12 minutes of my time
to the gentleman from New York (Mr. Rangel) for the purposes of
control.
The SPEAKER pro tempore (Mr. Thornberry). Is there objection to the
request of the gentleman from South Carolina?
There was no objection.
Mr. NUSSLE. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from
Texas (Mr. Hensarling), a member of the committee.
Mr. HENSARLING. Mr. Speaker, I thank the gentleman for yielding me
time. I certainly thank him for his leadership on this vital issue.
Mr. Speaker, everybody is aware of the classic ``A Christmas Carol''
by Charles Dickens. In it we are all familiar with the Ghost of
Christmas Yet to Come.
Mr. Speaker, let me tell you a little bit about the Ghost of
Christmas Yet to Come for America if we follow the Democrats' plan and
ignore the opportunity to reform government spending and achieve
savings for the American family.
Chairman Alan Greenspan has said, As a Nation we may have already
made promises to coming generations of retirees that we will be unable
to fulfill.
The Brookings Institution, not exactly a bastion of conservative
thought, has said, Expected growth and mandatory programs, along with
projected increases in interest on the debt and defense, will absorb
all of the government's currently projected revenue within eight years,
leaving nothing for any other program.
The Government Accountability Office has said that in order to
balance the Federal budget in just one generation, total Federal
spending would have to be cut in half or Federal taxes doubled. Federal
taxes doubled.
[[Page H10620]]
Now, we have heard our friends from the other side of the aisle say,
well, your tax relief plan was all wrong. It is the source of all of
our fiscal woes.
Mr. Speaker, what does that mean? That means they want to bring back
the death tax so that somebody has to visit the undertaker and the IRS
on the same day. It means they want to cut the child tax credit as
families are struggling to put food on the table, to put gas in the
car. They want to bring back the marriage penalty and punish people who
fall in love. They want to raise taxes 50 percent for low income
families, take away the 10 percent bracket. And according to the
Heritage Foundation, their program of tax increases will cost over
400,000 jobs, turning paychecks into welfare checks.
Ultimately, Mr. Speaker, this is what the future looks like. Doubling
taxes on the American people as time goes by.
What does that mean for a family of four? It means their
transportation program is cut $1,300. A year's supply of gas they are
taking away from the American family. Family housing will be cut
$2,700; a choice between owning a home or renting a home. Food, $1,300
will be cut from American families with their double the tax plan, 3
months of groceries. Recreation budget cut, $900. There went the family
vacation. They talk about compassion. There is no compassion there, Mr.
Speaker.
Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I want everyone to remember this date, November 17,
because in the final analysis the debate that is taking place obviously
between Democrats and Republicans will be decided not due to the
eloquence of the gentleman from Iowa (Mr. Nussle) who obviously is
leaving the House, but will be decided by the American people.
There is an old western song, ``You Picked a Fine Time to Leave Me
Lucille.'' To be the chairman of the Budget Committee and to try to
find just what tax breaks can we give to the richest people that we
have, and then to try to find out how you can really help the deficit
by taking the two or $300 billion that we are paying for the war in
Iraq and not even include that, and then to really try to look for the
programs that deal with the most vulnerable people that we have, the
gentleman from Iowa (Mr. Nussle) is leaving the floor.
I can understand that. But he does not have to leave the Congress.
When the people start looking and seeing what happens, they will be
looking for the chairman that drafted this, and you will not be in
Washington.
And the reason I want people to remember November 17 is because
November 17 is going to be an historic day. Oh, true, the gentleman
from Iowa (Mr. Nussle) did not see reporters up there, but it is going
to be reported tomorrow who voted on which side. So we ought to say it
with a great bit of pride that old civil rights song, Which Side Are
You on? And I tell you, we are so proud on this side that when the
final vote is counted, those kids that are in foster homes that just
have a little hope that maybe their lives could be better, the people
on SSI that are disabled and everyone has left them, the kids who are
trying to get a decent education and we are hitting them too, have we
no shame on the other side as to what do we have to do in order to
maintain the tax cuts?
I would like to believe that this was something that could have been
worked out. I would like to believe that Democrats and Republicans
should not have to vote party line. But it is shameful when you look at
the deficit, you look at the war, you look at the tax cuts and then you
decide that you are going to reform this system.
You try to reform Social Security and we looked at your cards and we
found out that you are really trying to privatize it. Now every program
that deals with the poor, every program that deals with those people
that the Congress should be helping you want to reform.
Well, let me say to the other side, I think when the votes are taken
tonight people would know who have the compassion, who has the plan,
and who has hopes for the future. And you are making it abundantly
clear as you leave this body to do whatever you want to do, that you
have given us a chance, I say to the gentleman from Iowa (Mr. Nussle),
to present to the American people which side are they on? I personally
would like to thank you for it, because it could not be made more clear
as to the difference between our parties.
No matter what religion you are, each one of them has some kind of
verse that says as human beings, we have an obligation to help those
people who are the lesser of our brothers and sisters. There is not a
church and not a synagogue that has not looked on your reforms and they
believe that you have forgotten the lesser of our brothers and sisters.
I am not a very religious man, but I do believe that we will have a
religious moments when it comes to the next election, and wherever you
go, my prayers will be with you, I say to the gentleman from Iowa (Mr.
Nussle).
Mr. Speaker, I reserve the balance of my time.
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