[House Report 111-443]
[From the U.S. Government Publishing Office]
111th Congress
2d Session HOUSE OF REPRESENTATIVES Report
111-443
_______________________________________________________________________
THE RECONCILIATION ACT OF 2010
----------
R E P O R T
of the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
to accompany
H.R. 4872
A BILL TO PROVIDE FOR RECONCILIATION PURSUANT TO SECTION 202 OF THE
CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2010
together with
MINORITY VIEWS
Volume II
Division II-III
March 17, 2010.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
THE RECONCILIATION ACT OF 2010--VOLUME II
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111th Congress
2d Session HOUSE OF REPRESENTATIVES Report
111-443
_______________________________________________________________________
THE RECONCILIATION ACT OF 2010
__________
R E P O R T
of the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
to accompany
H.R. 4872
A BILL TO PROVIDE FOR RECONCILIATION PURSUANT TO SECTION 202 OF THE
CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2010
together with
MINORITY VIEWS
Volume II
Division II-III
March 17, 2010.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
COMMITTEE ON THE BUDGET
JOHN M. SPRATT, Jr., South Carolina, Chairman
ALLYSON Y. SCHWARTZ, Pennsylvania PAUL RYAN, Wisconsin,
MARCY KAPTUR, Ohio Ranking Minority Member
XAVIER BECERRA, California JEB HENSARLING, Texas
LLOYD DOGGETT, Texas SCOTT GARRETT, New Jersey
EARL BLUMENAUER, Oregon MARIO DIAZ-BALART, Florida
MARION BERRY, Arkansas MICHAEL K. SIMPSON, Idaho
ALLEN BOYD, Florida PATRICK T. McHENRY, North Carolina
JAMES P. McGOVERN, Massachusetts CONNIE MACK, Florida
NIKI TSONGAS, Massachusetts JOHN CAMPBELL, California
BOB ETHERIDGE, North Carolina JIM JORDAN, Ohio
BETTY McCOLLUM, Minnesota CYNTHIA M. LUMMIS, Wyoming
JOHN A. YARMUTH, Kentucky STEVE AUSTRIA, Ohio
ROBERT E. ANDREWS, New Jersey ROBERT B. ADERHOLT, Alabama
ROSA L. DeLAURO, Connecticut, DEVIN NUNES, California
CHET EDWARDS, Texas GREGG HARPER, Mississippi
ROBERT C. ``BOBBY'' SCOTT, Virginia ROBERT E. LATTA, Ohio
JAMES R. LANGEVIN, Rhode Island
RICK LARSEN, Washington
TIMOTHY H. BISHOP, New York
GWEN MOORE, Wisconsin
GERALD E. CONNOLLY, Virginia
KURT SCHRADER, Oregon
DENNIS MOORE, Kansas
Professional Staff
Thomas S. Kahn, Staff Director and Chief Counsel
Austin Smythe, Minority Staff Director
C O N T E N T S
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Volume II
Page
Division II--Committee on Education and Labor: Health Care Reform 897
Division III--Committee on Eduacation and Labor: Investing in
Education...................................................... 1089
Miscellaneous House Report Requirements.......................... 1299
DIVISION II
LETTER OF TRANSMITTAL
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House of Representatives,
Committee on Education and Labor,
Washington, DC, October 13, 2009.
Hon. John M. Spratt, Jr.,
Chairman, Committee on the Budget, Cannon House Office Building,
Washington, DC.
Dear Chairman Spratt, With this correspondence and its
attachment, I am transmitting the Health Care Reform portion of
the recommendations of the Committee on Education and Labor to
your Committee pursuant to Section 202 of S. Con. Res. 13, the
Concurrent Resolution on the Budget for Fiscal Year 2010.
Pursuant to Section 202(a)(3) of S. Con. Res. 13, on July
17, 2009, the Committee on Education and Labor voted 26-22 to,
inter alia, authorize the Chairman to transmit H.R. 3200,
America's Affordable Health Choices Act, with an amendment in
the nature of a substitute, to the Committee on Budget in
compliance with Section 310 of the Congressional Budget Act of
1974, as its recommendations related to the Health Care Reform
portion of its instructions.
Accordingly, attached please find the Committee's report,
containing the reported bill and other materials, for your use
in preparing a reconciliation bill to be reported to the House
pursuant to S. Con. Res. 13.
If you have any questions, please contact my Committee
staff. Thank you for your attention.
Sincerely,
George Miller,
Chairman.2
111th Congress Rept. 111-299
HOUSE OF REPRESENTATIVES
1st Session Part 3
======================================================================
AMERICA'S AFFORDABLE HEALTH CHOICES ACT OF 2009
_______
October 14, 2009.--Committed to the Committee of the Whole House on the
State of the Union, and ordered to be printed.
_______
Mr. George Miller of California, from the Committee on Education and
Labor, submitted the following
R E P O R T
together with
MINORITY AND SUPPLEMENTAL VIEWS
[To accompany H.R. 3200]
The Committee on Education and Labor, to whom was referred
the bill (H.R. 3200) to provide affordable, quality health care
for all Americans and reduce the growth in health care
spending, and for other purposes, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause (other than sections 161
through 163, 322, and 323 and title IV of division A, division
B, section 2002 and titles I through IV of division C, and
subtitles A, B, C, and E of title V of division C) and insert
the following:
SECTION 1. SHORT TITLE; TABLE OF DIVISIONS, TITLES, AND SUBTITLES.
(a) Table of Divisions, Titles, and Subtitles.--This Act is divided
into divisions, titles, and subtitles as follows:
DIVISION A--AFFORDABLE HEALTH CARE CHOICES
TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS
Subtitle A--General Standards
Subtitle B--Standards Guaranteeing Access to Affordable Coverage
Subtitle C--Standards Guaranteeing Access to Essential Benefits
Subtitle D--Additional Consumer Protections
Subtitle E--Governance
Subtitle F--Relation to other requirements; Miscellaneous
Subtitle G--Early Investments
TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
Subtitle A--Health Insurance Exchange
Subtitle B--Public health insurance option
Subtitle C--Individual Affordability Credits
Subtitle D--State innovation
TITLE III--SHARED RESPONSIBILITY
Subtitle A--Individual responsibility
Subtitle B--Employer Responsibility
[For division B--See text of introduced bill]
DIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT
[For titles I through IV of division C, see text of introduced bill.]
TITLE V--OTHER PROVISIONS
[For subtitles A , B, and C of title V, see text of introduced bill.]
Subtitle D--Grants for comprehensive programs to provide education to
nurses and create a pipeline to nursing
[For subtitle E of title V, see text of introduced bill.]
Subtitle F--Standards for accessibility to medical equipment for
individuals with disabilities.
Subtitle G--Other grant programs
Subtitle H--Long-term care and family caregiver support
Subtitle I--Online resources
(b) Short Title.--This Act may be cited as the ``America's Affordable
Health Choices Act of 2009''.
DIVISION A--AFFORDABLE HEALTH CARE CHOICES
SEC. 100. PURPOSE; TABLE OF CONTENTS OF DIVISION; GENERAL DEFINITIONS.
(a) Purpose.--
(1) In general.--The purpose of this division is to provide
affordable, quality health care for all Americans and reduce
the growth in health care spending.
(2) Building on current system.--This division achieves this
purpose by building on what works in today's health care
system, while repairing the aspects that are broken.
(3) Insurance reforms.--This division--
(A) enacts strong insurance market reforms;
(B) creates a new Health Insurance Exchange, with a
public health insurance option alongside private plans;
(C) includes sliding scale affordability credits; and
(D) initiates shared responsibility among workers,
employers, and the government;
so that all Americans have coverage of essential health
benefits.
(4) Health delivery reform.--This division institutes health
delivery system reforms both to increase quality and to reduce
growth in health spending so that health care becomes more
affordable for businesses, families, and government.
(b) Table of Contents of Division.--The table of contents of this
division is as follows:
Sec. 100. Purpose; table of contents of division; general definitions.
TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS
Subtitle A--General Standards
Sec. 101. Requirements reforming health insurance marketplace.
Sec. 102. Protecting the choice to keep current coverage.
Subtitle B--Standards Guaranteeing Access to Affordable Coverage
Sec. 111. Prohibiting pre-existing condition exclusions.
Sec. 112. Guaranteed issue and renewal for insured plans.
Sec. 113. Insurance rating rules.
Sec. 114. Nondiscrimination in benefits; parity in mental health and
substance abuse disorder benefits.
Sec. 115. Ensuring adequacy of provider networks.
Sec. 116. Ensuring value and lower premiums.
Sec. 117. Consistency of costs and coverage under qualified health
benefits plans during plan year.
Subtitle C--Standards Guaranteeing Access to Essential Benefits
Sec. 121. Coverage of essential benefits package.
Sec. 122. Essential benefits package defined.
Sec. 123. Health Benefits Advisory Committee.
Sec. 124. Process for adoption of recommendations; adoption of benefit
standards.
Sec. 125. Prohibition of discrimination in health care services based
on religious or spiritual content.
Subtitle D--Additional Consumer Protections
Sec. 131. Requiring fair marketing practices by health insurers.
Sec. 132. Requiring fair grievance and appeals mechanisms.
Sec. 133. Requiring information transparency and plan disclosure.
Sec. 134. Application to qualified health benefits plans not offered
through the Health Insurance Exchange.
Sec. 135. Timely payment of claims.
Sec. 136. Standardized rules for coordination and subrogation of
benefits.
Sec. 137. Application of administrative simplification.
Sec. 138. Records relative to prescription information.
Subtitle E--Governance
Sec. 141. Health Choices Administration; Health Choices Commissioner.
Sec. 142. Duties and authority of Commissioner.
Sec. 143. Consultation and coordination.
Sec. 144. Health Insurance Ombudsman.
Subtitle F--Relation to Other Requirements; Miscellaneous
Sec. 151. Relation to other requirements.
Sec. 152. Prohibiting discrimination in health care.
Sec. 153. Whistleblower protection.
Sec. 154. Construction regarding collective bargaining.
Sec. 155. Severability.
Sec. 156. Rule of construction regarding Hawaii Prepaid Health Care
Act.
Sec. 157. Increasing meaningful use of electronic health records.
Sec. 158. Private right of contract with health care providers.
Subtitle G--Early Investments
[For sections 161-163. See text of introduced bill.]
Sec. 164. Reinsurance program for retirees.
Sec. 165. Prohibition against post-retirement reductions of retiree
health benefits by group health plans.
Sec. 166. Limitations on preexisting condition exclusions in group
health plans in advance of applicability of new prohibition of
preexisting condition exclusions.
Sec. 167. Extension of COBRA continuation coverage.
TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
Subtitle A--Health Insurance Exchange
Sec. 201. Establishment of Health Insurance Exchange; outline of
duties; definitions.
Sec. 202. Exchange-eligible individuals and employers.
Sec. 203. Benefits package levels.
Sec. 204. Contracts for the offering of Exchange-participating health
benefits plans.
Sec. 205. Outreach and enrollment of Exchange-eligible individuals and
employers in Exchange-participating health benefits plan.
Sec. 206. Other functions.
Sec. 207. Health Insurance Exchange Trust Fund.
Sec. 208. Optional operation of State-based health insurance exchanges.
Sec. 209. Participation of small employer benefit arrangements.
Subtitle B--Public Health Insurance Option
Sec. 221. Establishment and administration of a public health insurance
option as an Exchange-qualified health benefits plan.
Sec. 222. Premiums and financing.
Sec. 223. Payment rates for items and services.
Sec. 224. Modernized payment initiatives and delivery system reform.
Sec. 225. Provider participation.
Sec. 226. Application of fraud and abuse provisions.
Sec. 227. Sense of the House regarding enrollment of Members in the
public option.
Subtitle C--Individual Affordability Credits
Sec. 241. Availability through Health Insurance Exchange.
Sec. 242. Affordable credit eligible individual.
Sec. 243. Affordable premium credit.
Sec. 244. Affordability cost-sharing credit.
Sec. 245. Income determinations.
Sec. 246. No Federal payment for undocumented aliens.
Subtitle D--State Innovation
Sec. 251. Waiver of ERISA limitation; application instead of state
single payer system.
Sec. 252. Requirements.
Sec. 253. Definitions.
TITLE III--SHARED RESPONSIBILITY
Subtitle A--Individual Responsibility
Sec. 301. Individual responsibility.
Subtitle B--Employer Responsibility
Part 1--Health Coverage Participation Requirements
Sec. 311. Health coverage participation requirements.
Sec. 312. Employer responsibility to contribute towards employee and
dependent coverage.
Sec. 313. Employer contributions in lieu of coverage.
Sec. 314. Authority related to improper steering.
Part 2--Satisfaction of Health Coverage Participation Requirements
Sec. 321. Satisfaction of health coverage participation requirements
under the Employee Retirement Income Security Act of 1974.
Sec. 324. Additional rules relating to health coverage participation
requirements.
[FOR TITLE IV, SEE TEXT OF INTRODUCED BILL.]
(c) General Definitions.--Except as otherwise provided, in this
division:
(1) Acceptable coverage.--The term ``acceptable coverage''
has the meaning given such term in section 202(d)(2).
(2) Basic plan.--The term ``basic plan'' has the meaning
given such term in section 203(c).
(3) Commissioner.--The term ``Commissioner'' means the Health
Choices Commissioner established under section 141.
(4) Cost-sharing.--The term ``cost-sharing'' includes
deductibles, coinsurance, copayments, and similar charges but
does not include premiums or any network payment differential
for covered services or spending for non-covered services.
(5) Dependent.--The term ``dependent'' has the meaning given
such term by the Commissioner and includes a spouse.
(6) Employment-based health plan.--The term ``employment-
based health plan''--
(A) means a group health plan (as defined in section
733(a)(1) of the Employee Retirement Income Security
Act of 1974);
(B) includes such a plan that is the following:
(i) Federal, state, and tribal governmental
plans.--A governmental plan (as defined in
section 3(32) of the Employee Retirement Income
Security Act of 1974), including a health
benefits plan offered under chapter 89 of title
5, United States Code; or
(ii) Church plans.--A church plan (as defined
in section 3(33) of the Employee Retirement
Income Security Act of 1974); and
(C) excludes coverage described in section
202(d)(2)(E) (relating to TRICARE).
(7) Enhanced plan.--The term ``enhanced plan'' has the
meaning given such term in section 203(c).
(8) Essential benefits package.--The term ``essential
benefits package'' is defined in section 122(a).
(9) Family.--The term ``family'' means an individual and
includes the individual's dependents.
(10) Federal poverty level; fpl.--The terms ``Federal poverty
level'' and ``FPL'' have the meaning given the term ``poverty
line'' in section 673(2) of the Community Services Block Grant
Act (42 U.S.C. 9902(2)), including any revision required by
such section.
(11) Health benefits plan.--The terms ``health benefits
plan'' means health insurance coverage and an employment-based
health plan and includes the public health insurance option.
(12) Health insurance coverage; health insurance issuer.--The
terms ``health insurance coverage'' and ``health insurance
issuer'' have the meanings given such terms in section 2791 of
the Public Health Service Act.
(13) Health insurance exchange.--The term ``Health Insurance
Exchange'' means the Health Insurance Exchange established
under section 201.
(14) Medicaid.--The term ``Medicaid'' means a State plan
under title XIX of the Social Security Act (whether or not the
plan is operating under a waiver under section 1115 of such
Act).
(15) Medicare.--The term ``Medicare'' means the health
insurance programs under title XVIII of the Social Security
Act.
(16) Plan sponsor.--The term ``plan sponsor'' has the meaning
given such term in section 3(16)(B) of the Employee Retirement
Income Security Act of 1974.
(17) Plan year.--The term ``plan year'' means--
(A) with respect to an employment-based health plan,
a plan year as specified under such plan; or
(B) with respect to a health benefits plan other than
an employment-based health plan, a 12-month period as
specified by the Commissioner.
(18) Premium plan; premium-plus plan.--The terms ``premium
plan'' and ``premium-plus plan'' have the meanings given such
terms in section 203(c).
(19) QHBP offering entity.--The terms ``QHBP offering
entity'' means, with respect to a health benefits plan that
is--
(A) a group health plan (as defined, subject to
subsection (d), in section 733(a)(1) of the Employee
Retirement Income Security Act of 1974), the plan
sponsor in relation to such group health plan, except
that, in the case of a plan maintained jointly by 1 or
more employers and 1 or more employee organizations and
with respect to which an employer is the primary source
of financing, such term means such employer;
(B) health insurance coverage, the health insurance
issuer offering the coverage;
(C) the public health insurance option, the Secretary
of Health and Human Services;
(D) a non-Federal governmental plan (as defined in
section 2791(d) of the Public Health Service Act), the
State or political subdivision of a State (or agency or
instrumentality of such State or subdivision) which
establishes or maintains such plan; or
(E) a Federal governmental plan (as defined in
section 2791(d) of the Public Health Service Act), the
appropriate Federal official.
(20) Qualified health benefits plan.--The term ``qualified
health benefits plan'' means a health benefits plan that meets
the requirements for such a plan under title I and includes the
public health insurance option.
(21) Public health insurance option.--The term ``public
health insurance option'' means the public health insurance
option as provided under subtitle B of title II.
(22) Service area; premium rating area.--The terms ``service
area'' and ``premium rating area'' mean with respect to health
insurance coverage--
(A) offered other than through the Health Insurance
Exchange, such an area as established by the QHBP
offering entity of such coverage in accordance with
applicable State law; and
(B) offered through the Health Insurance Exchange,
such an area as established by such entity in
accordance with applicable State law and applicable
rules of the Commissioner for Exchange-participating
health benefits plans.
(23) State.--The term ``State'' means the 50 States and the
District of Columbia.
(24) State medicaid agency.--The term ``State Medicaid
agency'' means, with respect to a Medicaid plan, the single
State agency responsible for administering such plan under
title XIX of the Social Security Act.
(25) Y1, y2, etc..--The terms ``Y1'' , ``Y2'', ``Y3'',
``Y4'', ``Y5'', and similar subsequently numbered terms, mean
2013 and subsequent years, respectively.
(26) Employee premium.--The term ``employee premium'' does
not include a collectively bargained premium in the case of a
group health plan (as defined in section 733(a)(1) of the
Employee Retirement Income Security Act of 1974) that is a
multiemployer plan (as defined in section 3(37) of such Act).
TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS
Subtitle A--General Standards
SEC. 101. REQUIREMENTS REFORMING HEALTH INSURANCE MARKETPLACE.
(a) Purpose.--The purpose of this title is to establish standards to
ensure that new health insurance coverage and employment-based health
plans that are offered meet standards guaranteeing access to affordable
coverage, essential benefits, and other consumer protections.
(b) Requirements for Qualified Health Benefits Plans.--On or after
the first day of Y1, a health benefits plan shall not be a qualified
health benefits plan under this division unless the plan meets the
applicable requirements of the following subtitles for the type of plan
and plan year involved:
(1) Subtitle B (relating to affordable coverage).
(2) Subtitle C (relating to essential benefits).
(3) Subtitle D (relating to consumer protection).
(c) Terminology.--In this division:
(1) Enrollment in employment-based health plans.--An
individual shall be treated as being ``enrolled'' in an
employment-based health plan if the individual is a participant
or beneficiary (as such terms are defined in section 3(7) and
3(8), respectively, of the Employee Retirement Income Security
Act of 1974) in such plan.
(2) Individual and group health insurance coverage.--The
terms ``individual health insurance coverage'' and ``group
health insurance coverage'' mean health insurance coverage
offered in the individual market or large or small group
market, respectively, as defined in section 2791 of the Public
Health Service Act.
(d) Sense of Congress on Health Care Needs of United States
Territories.--It is the sense of the Congress that the reforms made by
H.R. 3200, as introduced, must be strengthened to meaningfully address
the health care needs of residents of American Samoa, the Commonwealth
of the Northern Mariana Islands, Guam, Puerto Rico, and the United
States Virgin Islands and Congress is committed to working with the
representatives of these territories to ensure that residents of these
territories have access to high-quality and affordable health care in
such a way that best serves their unique needs.
SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.
(a) Grandfathered Health Insurance Coverage Defined.--Subject to the
succeeding provisions of this section, for purposes of establishing
acceptable coverage under this division, the term ``grandfathered
health insurance coverage'' means individual health insurance coverage
that is offered and in force and effect before the first day of Y1 if
the following conditions are met:
(1) Limitation on new enrollment.--
(A) In general.--Except as provided in this
paragraph, the individual health insurance issuer
offering such coverage does not enroll any individual
in such coverage if the first effective date of
coverage is on or after the first day of Y1.
(B) Dependent coverage permitted.--Subparagraph (A)
shall not affect the subsequent enrollment of a
dependent of an individual who is covered as of such
first day.
(2) Limitation on changes in terms or conditions.--Subject to
paragraph (3) and except as required by law, the issuer does
not change any of its terms or conditions, including benefits
and cost-sharing, from those in effect as of the day before the
first day of Y1.
(3) Restrictions on premium increases.--The issuer cannot
vary the percentage increase in the premium for a risk group of
enrollees in specific grandfathered health insurance coverage
without changing the premium for all enrollees in the same risk
group at the same rate, as specified by the Commissioner.
(b) Grace Period for Current Employment-based Health Plans.--
(1) Grace period.--
(A) In general.--The Commissioner shall establish a
grace period whereby, for plan years beginning after
the end of the 5-year period beginning with Y1, an
employment-based health plan in operation as of the day
before the first day of Y1 must meet the same
requirements as apply to a qualified health benefits
plan under section 101, including the essential benefit
package requirement under section 121.
(B) Exception for limited benefits plans.--
Subparagraph (A) shall not apply to an employment-based
health plan in which the coverage consists only of one
or more of the following:
(i) Any coverage described in section
3001(a)(1)(B)(ii)(IV) of division B of the
American Recovery and Reinvestment Act of 2009
(PL 111-5).
(ii) Excepted benefits (as defined in section
733(c) of the Employee Retirement Income
Security Act of 1974), including coverage under
a specified disease or illness policy described
in paragraph (3)(A) of such section.
(iii) Such other limited benefits as the
Commissioner may specify.
In no case shall an employment-based health plan in
which the coverage consists only of one or more of the
coverage or benefits described in clauses (i) through
(iii) be treated as acceptable coverage under this
division
(2) Transitional treatment as acceptable coverage.--During
the grace period specified in paragraph (1)(A), an employment-
based health plan that is described in such paragraph shall be
treated as acceptable coverage under this division.
(3) Exception for consumer-directed health plans and
arrangements.--In the case of a group health plan which
consists of a consumer-directed health plan or arrangement
(including a high deductible health plan, within the meaning of
section 223(c)(2) of the Internal Revenue Code of 1986), such
group health plan shall be treated as acceptable coverage under
a current group health plan for purposes of this division.
(c) Limitation on Individual Health Insurance Coverage.--
(1) In general.--Individual health insurance coverage that is
not grandfathered health insurance coverage under subsection
(a) may only be offered on or after the first day of Y1 as an
Exchange-participating health benefits plan.
(2) Separate, excepted coverage permitted.--Excepted benefits
(as defined in section 2791(c) of the Public Health Service
Act) are not included within the definition of health insurance
coverage. Nothing in paragraph (1) shall prevent the offering,
other than through the Health Insurance Exchange, of excepted
benefits so long as it is offered and priced separately from
health insurance coverage.
Subtitle B--Standards Guaranteeing Access to Affordable Coverage
SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLUSIONS.
A qualified health benefits plan may not impose any pre-existing
condition exclusion (as defined in section 2701(b)(1)(A) of the Public
Health Service Act) or otherwise impose any limit or condition on the
coverage under the plan with respect to an individual or dependent
based on any health status-related factors (as defined in section
2791(d)(9) of the Public Health Service Act) in relation to the
individual or dependent.
SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS.
The requirements of sections 2711 (other than subsections (c) and
(e)) and 2712 (other than paragraphs (3), and (6) of subsection (b) and
subsection (e)) of the Public Health Service Act, relating to
guaranteed availability and renewability of health insurance coverage,
shall apply to individuals and employers in all individual and group
health insurance coverage, whether offered to individuals or employers
through the Health Insurance Exchange, through any employment-based
health plan, or otherwise, in the same manner as such sections apply to
employers and health insurance coverage offered in the small group
market, except that such section 2712(b)(1) shall apply only if, before
nonrenewal or discontinuation of coverage, the issuer has provided the
enrollee with notice of non-payment of premiums and there is a grace
period during which the enrollees has an opportunity to correct such
nonpayment. Rescissions of such coverage shall be prohibited except in
cases of fraud as defined in sections 2712(b)(2) of such Act.
SEC. 113. INSURANCE RATING RULES.
(a) In General.--The premium rate charged for an insured qualified
health benefits plan may not vary except as follows:
(1) Limited age variation permitted.--By age (within such age
categories as the Commissioner shall specify) so long as the
ratio of the highest such premium to the lowest such premium
does not exceed the ratio of 2 to 1.
(2) By area.--By premium rating area (as permitted by State
insurance regulators or, in the case of Exchange-participating
health benefits plans, as specified by the Commissioner in
consultation with such regulators).
(3) By family enrollment.--By family enrollment (such as
variations within categories and compositions of families) so
long as the ratio of the premium for family enrollment (or
enrollments) to the premium for individual enrollment is
uniform, as specified under State law and consistent with rules
of the Commissioner.
(b) Study and Reports.--
(1) Study.--The Commissioner, in coordination with the
Secretary of Health and Human Services and the Secretary of
Labor, shall conduct a study of the large group insured and
self-insured employer health care markets. Such study shall
examine the following:
(A) The types of employers by key characteristics,
including size, that purchase insured products versus
those that self-insure.
(B) The similarities and differences between typical
insured and self-insured health plans.
(C) The financial solvency and capital reserve levels
of employers that self-insure by employer size.
(D) The risk of self-insured employers not being able
to pay obligations or otherwise becoming financially
insolvent.
(E) The extent to which rating rules are likely to
cause adverse selection in the large group market or to
encourage small and mid size employers to self-insure
(2) Reports.--Not later than 18 months after the date of the
enactment of this Act, the Commissioner shall submit to
Congress and the applicable agencies a report on the study
conducted under paragraph (1). Such report shall include any
recommendations the Commissioner deems appropriate to ensure
that the law does not provide incentives for small and mid-size
employers to self-insure or create adverse selection in the
risk pools of large group insurers and self-insured employers.
Not later than 18 months after the first day of Y1, the
Commissioner shall submit to Congress and the applicable
agencies an updated report on such study, including updates on
such recommendations.
SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN MENTAL HEALTH AND
SUBSTANCE ABUSE DISORDER BENEFITS.
(a) Nondiscrimination in Benefits.--A qualified health benefits plan
shall comply with standards established by the Commissioner to prohibit
discrimination in health benefits or benefit structures for qualified
health benefits plans, building from sections 702 of Employee
Retirement Income Security Act of 1974, 2702 of the Public Health
Service Act, and section 9802 of the Internal Revenue Code of 1986.
(b) Parity in Mental Health and Substance Abuse Disorder Benefits.--
To the extent such provisions are not superceded by or inconsistent
with subtitle C, the provisions of section 2705 (other than subsections
(a)(1), (a)(2), and (c)) of section 2705 of the Public Health Service
Act shall apply to a qualified health benefits plan, regardless of
whether it is offered in the individual or group market, in the same
manner as such provisions apply to health insurance coverage offered in
the large group market.
SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS.
(a) In General.--A qualified health benefits plan that uses a
provider network for items and services shall meet such standards
respecting provider networks as the Commissioner may establish to
assure the adequacy of such networks in ensuring enrollee access to
such items and services and transparency in the cost-sharing
differentials between in-network coverage and out-of-network coverage.
(b) Internet Access to Information.--A qualified health benefits plan
that uses a provider network shall provide a current listing of all
providers in its network on its website and such data shall be
available on the Health Insurance Exchange website as a `click through'
from the basic information on that plan. The Commissioner shall also
establish an on-line system whereby an individual may select by name
any medical provider (as defined by the Commissioner) and be informed
of the plan or plans with which that provider is contracting.
(c) Provider Network Defined.--In this division, the term ``provider
network'' means the providers with respect to which covered benefits,
treatments, and services are available under a health benefits plan.
SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.
The QHBP offering entity shall provide that for any plan year in
which a qualified health benefits plan that the entity offers has a
medical loss ratio (expressed as a percentage) that is less than a
percentage (not less than 85 percent) specified by the Commissioner,
the QHBP offering entity offering such plan shall provide for rebates
to enrollees of payment sufficient to meet such loss ratio. The
Commissioner shall establish a uniform definition of medical loss ratio
and methodology for determining how to calculate the medical loss
ratio. Such methodology shall be designed to take into account the
special circumstances of smaller and newer plans.
SEC. 117. CONSISTENCY OF COSTS AND COVERAGE UNDER QUALIFIED HEALTH
BENEFITS PLANS DURING PLAN YEAR.
In the case of health insurance coverage offered under a qualified
health benefits plan, the coverage and cost of coverage may not be
changed during the course of a plan year except to increase coverage to
the enrollee or to lower costs to the enrollee.
Subtitle C--Standards Guaranteeing Access to Essential Benefits
SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.
(a) In General.--A qualified health benefits plan shall provide
coverage that at least meets the benefit standards adopted under
section 124 for the essential benefits package described in section 122
for the plan year involved.
(b) Choice of Coverage.--
(1) Non-exchange-participating health benefits plans.--In the
case of a qualified health benefits plan that is not an
Exchange-participating health benefits plan, such plan may
offer such coverage in addition to the essential benefits
package as the QHBP offering entity may specify.
(2) Exchange-participating health benefits plans.--In the
case of an Exchange-participating health benefits plan, such
plan is required under section 203 to provide specified levels
of benefits and, in the case of a plan offering a premium-plus
level of benefits, provide additional benefits.
(3) Continuation of offering of separate excepted benefits
coverage.--Nothing in this division shall be construed as
affecting the offering of health benefits in the form of
excepted benefits (described in section 102(b)(1)(B)(ii)) if
such benefits are offered under a separate policy, contract, or
certificate of insurance.
(c) No Restrictions on Coverage Unrelated to Clinical
Appropriateness.--A qualified health benefits plan may not impose any
restriction (other than cost-sharing) unrelated to clinical
appropriateness on the coverage of the health care items and services.
SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED.
(a) In General.--In this division, the term ``essential benefits
package'' means health benefits coverage, consistent with standards
adopted under section 124 to ensure the provision of quality health
care and financial security, that--
(1) provides payment for the items and services described in
subsection (b) in accordance with generally accepted standards
of medical or other appropriate clinical or professional
practice;
(2) limits cost-sharing for such covered health care items
and services in accordance with such benefit standards,
consistent with subsection (c);
(3) does not impose any annual or lifetime limit on the
coverage of covered health care items and services;
(4) complies with section 115(a) (relating to network
adequacy); and
(5) is equivalent, as certified by Office of the Actuary of
the Centers for Medicare & Medicaid Services, to the average
prevailing employer-sponsored coverage.
(b) Minimum Services to Be Covered.--The items and services described
in this subsection are the following:
(1) Hospitalization.
(2) Outpatient hospital and outpatient clinic services,
including emergency department services.
(3) Professional services of physicians and other health
professionals.
(4) Such services, equipment, and supplies incident to the
services of a physician's or a health professional's delivery
of care in institutional settings, physician offices, patients'
homes or place of residence, or other settings, as appropriate.
(5) Prescription drugs.
(6) Rehabilitative and habilitative services.
(7) Mental health and substance use disorder services.
(8) Preventive services, including those services recommended
with a grade of A or B by the Task Force on Clinical Preventive
Services and including mental health and substance abuse
services recommended by the Task Force on Clinical Preventive
Services and those mental health and substance abuse services
with compelling research or evidence, including Screening,
Brief Intervention and Referral to Treatment (SBIRT), and those
vaccines recommended for use by the Director of the Centers for
Disease Control and Prevention.
(9) Maternity care.
(10) Well baby and well child care and early and periodic
screening, diagnostic, and treatment services (as defined in
section 1905(r) of the Social Security Act) at least for
children under 21 years of age.
(11) Durable medical equipment, prosthetics, orthotics and
related supplies.
(c) Requirements Relating to Cost-sharing and Minimum Actuarial
Value.--
(1) No cost-sharing for preventive services.--There shall be
no cost-sharing under the essential benefits package for
preventive items and services (as specified under the benefit
standards), including well baby and well child care.
(2) Annual limitation.--
(A) Annual limitation.--The cost-sharing incurred
under the essential benefits package with respect to an
individual (or family) for a year does not exceed the
applicable level specified in subparagraph (B).
(B) Applicable level.--The applicable level specified
in this subparagraph for Y1 is $5,000 for an individual
and $10,000 for a family. Such levels shall be
increased (rounded to the nearest $100) for each
subsequent year by the annual percentage increase in
the Consumer Price Index (United States city average)
applicable to such year.
(C) Use of copayments.--In establishing cost-sharing
levels for basic, enhanced, and premium plans under
this subsection, the Secretary shall, to the maximum
extent possible, use only copayments and not
coinsurance.
(3) Minimum actuarial value.--
(A) In general.--The cost-sharing under the essential
benefits package shall be designed to provide a level
of coverage that is designed to provide benefits that
are actuarially equivalent to approximately 70 percent
of the full actuarial value of the benefits provided
under the reference benefits package described in
subparagraph (B).
(B) Reference benefits package described.--The
reference benefits package described in this
subparagraph is the essential benefits package if there
were no cost-sharing imposed.
SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.
(a) Establishment.--
(1) In general.--There is established a private-public
advisory committee which shall be a panel of medical and other
experts to be known as the Health Benefits Advisory Committee
to recommend covered benefits and essential, enhanced, and
premium plans.
(2) Chair.--The Surgeon General shall be a member and the
chair of the Health Benefits Advisory Committee.
(3) Membership.--The Health Benefits Advisory Committee shall
be composed of the following members, in addition to the
Surgeon General:
(A) 9 members who are not Federal employees or
officers and who are appointed by the President.
(B) 9 members who are not Federal employees or
officers and who are appointed by the Comptroller
General of the United States in a manner similar to the
manner in which the Comptroller General appoints
members to the Medicare Payment Advisory Commission
under section 1805(c) of the Social Security Act.
(C) Such even number of members (not to exceed 8) who
are Federal employees and officers, as the President
may appoint.
The membership of the Committee shall include one or more
experts in scientific evidence and clinical practice of
integrative health care services. Such initial appointments
shall be made not later than 60 days after the date of the
enactment of this Act.
(4) Terms.--Each member of the Health Benefits Advisory
Committee shall serve a 3-year term on the Committee, except
that the terms of the initial members shall be adjusted in
order to provide for a staggered term of appointment for all
such members.
(5) Participation.--The membership of the Health Benefits
Advisory Committee shall at least reflect providers, employers,
labor, health insurance issuers, experts in health care
financing and delivery, experts in racial and ethnic
disparities, experts in care for those with disabilities,
representatives of relevant governmental agencies. and at least
one practicing physician or other health professional and an
expert on children's health and shall represent a balance among
various sectors of the health care system so that no single
sector unduly influences the recommendations of such Committee.
The membership of the Committee shall also include educated
patients, consumer advocates, or both, who shall include
persons who represent individuals affected by a specific
disease or medical condition, are knowledgeable about the
health care system, and have received training regarding
health, medical, and scientific matters.
(b) Duties.--
(1) Recommendations on benefit standards.--The Health
Benefits Advisory Committee shall recommend to the Secretary of
Health and Human Services (in this subtitle referred to as the
``Secretary'') benefit standards (as defined in paragraph (4)),
and periodic updates to such standards. In developing such
recommendations, the Committee shall--
(A) take into account innovation in health care,
(B) consider how such standards could reduce health
disparities,
(C) take into account integrative health care
services, and
(D) take into account typical multiemployer plan
benefit structures and the impact of the essential
benefit package on such plans.
(2) Deadline.--The Health Benefits Advisory Committee shall
recommend initial benefit standards to the Secretary not later
than 1 year after the date of the enactment of this Act.
(3) State input.--The Health Benefits Advisory Committee
shall examine the health coverage laws and benefits of each
State in developing recommendations under this subsection and
may incorporate such coverage and benefits as the Committee
determines to be appropriate and consistent with this Act. The
Health Benefits Advisory Committee shall also seek input from
the States and consider recommendations on how to ensure that
the quality of health coverage does not decline in any State.
(4) Public input.--The Health Benefits Advisory Committee
shall allow for public input as a part of developing
recommendations under this subsection.
(5) Benefit standards defined.--In this subtitle, the term
``benefit standards'' means standards respecting--
(A) the essential benefits package described in
section 122, including categories of covered
treatments, items and services within benefit classes,
and cost-sharing; and
(B) the cost-sharing levels for enhanced plans and
premium plans (as provided under section 203(c))
consistent with paragraph (5).
(6) Levels of cost-sharing for enhanced and premium plans.--
(A) Enhanced plan.--The level of cost-sharing for
enhanced plans shall be designed so that such plans
have benefits that are actuarially equivalent to
approximately 85 percent of the actuarial value of the
benefits provided under the reference benefits package
described in section 122(c)(3)(B).
(B) Premium plan.--The level of cost-sharing for
premium plans shall be designed so that such plans have
benefits that are actuarially equivalent to
approximately 95 percent of the actuarial value of the
benefits provided under the reference benefits package
described in section 122(c)(3)(B).
(7) Recommendations of integrative health care services task
force.--
(A) Inclusion in committee's recommendations.--The
Health Benefits Advisory Committee shall include in its
recommendations under paragraph (1) the recommendations
made by the Integrative Health Care Services Task Force
established under subparagraph (B).
(B) Establishment of task force.--The Health Benefits
Advisory Committee shall establish an Integrative
Health Care Services Task Force. Such Task Force shall
consist of 5 experts with expertise in research in, and
practice of, integrative health care. Such experts
shall be appointed by the Committee from among experts
nominated by the Secretary, in consultation with the
National Center for Complementary and Alternative
Medicine at the National Institutes of Health. The duty
of the Task Force shall be to make recommendations to
the Committee on evidence-based, clinically effective,
and safe integrative care services.
(c) Operations.--
(1) Per diem pay.--Each member of the Health Benefits
Advisory Committee shall receive travel expenses, including per
diem in accordance with applicable provisions under subchapter
I of chapter 57 of title 5, United States Code, and shall
otherwise serve without additional pay.
(2) Members not treated as federal employees.--Members of the
Health Benefits Advisory Committee shall not be considered
employees of the Federal government solely by reason of any
service on the Committee.
(3) Application of faca.--The Federal Advisory Committee Act
(5 U.S.C. App.), other than section 14, shall apply to the
Health Benefits Advisory Committee.
(d) Publication.--The Secretary shall provide for publication in the
Federal Register and the posting on the Internet website of the
Department of Health and Human Services of all recommendations made by
the Health Benefits Advisory Committee under this section.
SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDATIONS; ADOPTION OF BENEFIT
STANDARDS.
(a) Process for Adoption of Recommendations.--
(1) Review of recommended standards.--Not later than 45 days
after the date of receipt of benefit standards recommended
under section 123 (including such standards as modified under
paragraph (2)(B)), the Secretary shall review such standards
and shall determine whether to propose adoption of such
standards as a package.
(2) Determination to adopt standards.--If the Secretary
determines--
(A) to propose adoption of benefit standards so
recommended as a package, the Secretary shall, by
regulation under section 553 of title 5, United States
Code, propose adoption such standards; or
(B) not to propose adoption of such standards as a
package, the Secretary shall notify the Health Benefits
Advisory Committee in writing of such determination and
the reasons for not proposing the adoption of such
recommendation and provide the Committee with a further
opportunity to modify its previous recommendations and
submit new recommendations to the Secretary on a timely
basis.
(3) Contingency.--If, because of the application of paragraph
(2)(B), the Secretary would otherwise be unable to propose
initial adoption of such recommended standards by the deadline
specified in subsection (b)(1), the Secretary shall, by
regulation under section 553 of title 5, United States Code,
propose adoption of initial benefit standards by such deadline.
(4) Publication.--The Secretary shall provide for publication
in the Federal Register of all determinations made by the
Secretary under this subsection.
(b) Adoption of Standards.--
(1) Initial standards.--Not later than 18 months after the
date of the enactment of this Act, the Secretary shall, through
the rulemaking process consistent with subsection (a), adopt an
initial set of benefit standards.
(2) Periodic updating standards.--Under subsection (a), the
Secretary shall provide for the periodic updating of the
benefit standards previously adopted under this section.
(3) Requirement.--The Secretary may not adopt any benefit
standards for an essential benefits package or for level of
cost-sharing that are inconsistent with the requirements for
such a package or level under sections 122 and 123(b)(5).
SEC. 125 PROHIBITION OF DISCRIMINATION IN HEALTH CARE SERVICES BASED ON
RELIGIOUS OR SPIRITUAL CONTENT.
Neither the Commissioner nor any health insurance issuer offering
health insurance coverage through the Exchange shall discriminate in
approving or covering a health care service on the basis of its
religious or spiritual content if expenditures for such a health care
service are allowable as a deduction under 213(d) of the Internal
Revenue Code of 1986, as in effect on January 1, 2009.
Subtitle D--Additional Consumer Protections
SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY HEALTH INSURERS.
The Commissioner shall establish uniform marketing standards that all
insured QHBP offering entities shall meet.
SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS.
(a) In General.--A QHBP offering entity shall provide for timely
grievance and appeals mechanisms that the Commissioner shall establish.
(b) Internal Claims and Appeals Process.--Under a qualified health
benefits plan the QHBP offering entity shall provide an internal claims
and appeals process that initially incorporates the claims and appeals
procedures (including urgent claims) set forth at section 2560.503-1 of
title 29, Code of Federal Regulations, as published on November 21,
2000 (65 Fed. Reg. 70246) and shall update such process in accordance
with any standards that the Commissioner may establish.
(c) External Review Process.--
(1) In general.--The Commissioner shall establish an external
review process (including procedures for expedited reviews of
urgent claims) that provides for an impartial, independent, and
de novo review of denied claims under this division.
(2) Requiring fair grievance and appeals mechanisms.--A
determination made, with respect to a qualified health benefits
plan offered by a QHBP offering entity, under the external
review process established under this subsection shall be
binding on the plan and the entity.
(d) Construction.--Nothing in this section shall be construed as
affecting the availability of judicial review under State law for
adverse decisions under subsection (b) or (c), subject to section 151.
SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND PLAN DISCLOSURE.
(a) Accurate and Timely Disclosure.--
(1) In general.--A qualified health benefits plan shall
comply with standards established by the Commissioner for the
accurate and timely disclosure of plan documents, plan terms
and conditions, claims payment policies and practices, periodic
financial disclosure, data on enrollment, data on
disenrollment, data on the number of claims denials, data on
rating practices, information on cost-sharing and payments with
respect to any out-of-network coverage, and other information
as determined appropriate by the Commissioner. The Commissioner
shall require that such disclosure be provided in plain
language.
(2) Plain language.--In this subsection, the term ``plain
language'' means language that the intended audience, including
individuals with limited English proficiency, can readily
understand and use because that language is clean, concise,
well-organized, and follows other best practices of plain
language writing.
(3) Guidance.--The Commissioner shall develop and issue
guidance on best practices of plain language writing.
(b) Contracting Reimbursement.--A qualified health benefits plan
shall comply with standards established by the Commissioner to ensure
transparency to each health care provider relating to reimbursement
arrangements between such plan and such provider.
(c) Advance Notice of Plan Changes.--A change in a qualified health
benefits plan shall not be made without such reasonable and timely
advance notice to enrollees of such change.
(d) Identification of Providers Trained and Accredited in Integrative
Medicine.--A qualified health benefit plan shall include in the
disclosure required under subsection (a) identification to enrollees of
any providers of services under the plan that are trained and
accredited in integrative health medicine.
SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS PLANS NOT OFFERED
THROUGH THE HEALTH INSURANCE EXCHANGE.
The requirements of the previous provisions of this subtitle shall
apply to qualified health benefits plans that are not being offered
through the Health Insurance Exchange only to the extent specified by
the Commissioner.
SEC. 135. TIMELY PAYMENT OF CLAIMS.
A QHBP offering entity shall comply with the requirements of section
1857(f) of the Social Security Act with respect to a qualified health
benefits plan it offers in the same manner an Medicare Advantage
organization is required to comply with such requirements with respect
to a Medicare Advantage plan it offers under part C of Medicare.
SEC. 136. STANDARDIZED RULES FOR COORDINATION AND SUBROGATION OF
BENEFITS.
The Commissioner shall establish standards for the coordination and
subrogation of benefits and reimbursement of payments in cases
involving individuals and multiple plan coverage.
SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICATION.
A QHBP offering entity is required to comply with standards for
electronic financial and administrative transactions under section
1173A of the Social Security Act, added by section 163(a).
SEC. 138. RECORDS RELATIVE TO PRESCRIPTION INFORMATION.
(a) In General.--A qualified health benefits plan shall ensure that
its records relative to prescription information containing patient
identifiable and prescriber-identifiable data are maintained in
accordance with this section.''
(b) Requirements.--
(1) In general.--Records described in subsection (a) may not
be licensed, transferred, used, or sold by any pharmacy
benefits manager, insurance company, electronic transmission
intermediary, retail, mail order, or Internet pharmacy or other
similar entity, for any commercial purpose, except for the
limited purposes of--
(A) pharmacy reimbursement;
(B) formulary compliance;
(C) care management;
(D) utilization review by a health care provider, the
patient's insurance provider or the agent of either;
(E) health care research; or
(F) as otherwise provided by law.
(2) Commercial purpose.--For purposes of paragraph (1), the
term ``commercial purpose'' includes, but is not limited to,
advertising, marketing, promotion, or any activity that could
be used to influence sales or market share of a pharmaceutical
product, influence or evaluate the prescribing behavior of an
individual health care professional, or evaluate the
effectiveness of a professional pharmaceutical detailing sales
force.
(c) Construction.--
(1) Permitted practices.--Nothing in this section shall
prohibit--
(A) the dispensing of prescription medications to a
patient or to the patient's authorized representative;
(B) the transmission of prescription information
between an authorized prescriber and a licensed
pharmacy;
(C) the transfer of prescription information between
licensed pharmacies;
(D) the transfer of prescription records that may
occur in the event a pharmacy ownership is changed or
transferred;
(E) care management educational communications
provided to a patient about the patient's health
condition, adherence to a prescribed course of therapy,
or other information about the drug being dispensed,
treatment options, or clinical trials.
(2) De-identified data.--Nothing in this section shall
prohibit the collection, use, transfer, or sale of patient and
prescriber de-identified data by zip code, geographic region,
or medical specialty for commercial purposes.
Subtitle E--Governance
SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH CHOICES COMMISSIONER.
(a) In General.--There is hereby established, as an independent
agency in the executive branch of the Government, a Health Choices
Administration (in this division referred to as the
``Administration'').
(b) Commissioner.--
(1) In general.--The Administration shall be headed by a
Health Choices Commissioner (in this division referred to as
the ``Commissioner'') who shall be appointed by the President,
by and with the advice and consent of the Senate.
(2) Compensation; etc.--The provisions of paragraphs (2), (5)
and (7) of subsection (a) (relating to compensation, terms,
general powers, rulemaking, and delegation) of section 702 of
the Social Security Act (42 U.S.C. 902) shall apply to the
Commissioner and the Administration in the same manner as such
provisions apply to the Commissioner of Social Security and the
Social Security Administration.
SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER.
(a) Duties.--The Commissioner is responsible for carrying out the
following functions under this division:
(1) Qualified plan standards.--The establishment of qualified
health benefits plan standards under this title, including the
enforcement of such standards in coordination with State
insurance regulators and the Secretaries of Labor and the
Treasury.
(2) Health insurance exchange.--The establishment and
operation of a Health Insurance Exchange under subtitle A of
title II.
(3) Individual affordability credits.--The administration of
individual affordability credits under subtitle C of title II,
including determination of eligibility for such credits.
(4) Additional functions.--Such additional functions as may
be specified in this division.
(b) Promoting Accountability.--
(1) In general.--The Commissioner shall undertake activities
in accordance with this subtitle to promote accountability of
QHBP offering entities in meeting Federal health insurance
requirements, regardless of whether such accountability is with
respect to qualified health benefits plans offered through the
Health Insurance Exchange or outside of such Exchange.
(2) Compliance examination and audits.--
(A) In general.--The commissioner shall, in
coordination with States, conduct audits of qualified
health benefits plan compliance with Federal
requirements. Such audits may include random
compliance audits and targeted audits in response to
complaints or other suspected non-compliance.
(B) Recoupment of costs in connection with
examination and audits.--The Commissioner is authorized
to recoup from qualified health benefits plans
reimbursement for the costs of such examinations and
audit of such QHBP offering entities.
(c) Data Collection.--The Commissioner shall collect data for
purposes of carrying out the Commissioner's duties, including for
purposes of promoting quality and value, protecting consumers, and
addressing disparities in health and health care and may share such
data with the Secretary of Health and Human Services.
(d) Sanctions Authority.--
(1) In general.--In the case that the Commissioner determines
that a QHBP offering entity violates a requirement of this
title, the Commissioner may, in coordination with State
insurance regulators and the Secretary of Labor, provide, in
addition to any other remedies authorized by law, for any of
the remedies described in paragraph (2).
(2) Remedies.--The remedies described in this paragraph, with
respect to a qualified health benefits plan offered by a QHBP
offering entity, are--
(A) civil money penalties of not more than the amount
that would be applicable under similar circumstances
for similar violations under section 1857(g) of the
Social Security Act;
(B) suspension of enrollment of individuals under
such plan after the date the Commissioner notifies the
entity of a determination under paragraph (1) and until
the Commissioner is satisfied that the basis for such
determination has been corrected and is not likely to
recur;
(C) in the case of an Exchange-participating health
benefits plan, suspension of payment to the entity
under the Health Insurance Exchange for individuals
enrolled in such plan after the date the Commissioner
notifies the entity of a determination under paragraph
(1) and until the Secretary is satisfied that the basis
for such determination has been corrected and is not
likely to recur; or
(D) working with State insurance regulators to
terminate plans for repeated failure by the offering
entity to meet the requirements of this title.
(e) Standard Definitions of Insurance and Medical Terms.--The
Commissioner shall provide for the development of standards for the
definitions of terms used in health insurance coverage, including
insurance-related terms.
(f) Efficiency in Administration.--The Commissioner shall issue
regulations for the effective and efficient administration of the
Health Insurance Exchange and affordability credits under subtitle C,
including, with respect to the determination of eligibility for
affordability credits, the use of personnel who are employed in
accordance with the requirements of title 5, United States Code, to
carry out the duties of the Commissioner or, in the case of sections
208 and 241(b)(2), the use of State personnel who are employed in
accordance with standards prescribed by the Office of Personnel
Management pursuant to section 208 of the Intergovernmental Personnel
Act of 1970 (42 U.S.C. 4728).
SEC. 143. CONSULTATION AND COORDINATION.
(a) Consultation.--In carrying out the Commissioner's duties under
this division, the Commissioner, as appropriate, shall consult with at
least with the following:
(1) The National Association of Insurance Commissioners,
State attorneys general, and State insurance regulators,
including concerning the standards for insured qualified health
benefits plans under this title and enforcement of such
standards.
(2) Appropriate State agencies, specifically concerning the
administration of individual affordability credits under
subtitle C of title II and the offering of Exchange-
participating health benefits plans, to Medicaid eligible
individuals under subtitle A of such title.
(3) Other appropriate Federal agencies.
(4) Indian tribes and tribal organizations.
(5) The National Association of Insurance Commissioners for
purposes of using model guidelines established by such
association for purposes of subtitles B and D.
(b) Coordination.--
(1) In general.--In carrying out the functions of the
Commissioner, including with respect to the enforcement of the
provisions of this division, the Commissioner shall work in
coordination with existing Federal and State entities to the
maximum extent feasible consistent with this division and in a
manner that prevents conflicts of interest in duties and
ensures effective enforcement.
(2) Uniform standards.--The Commissioner, in coordination
with such entities, shall seek to achieve uniform standards
that adequately protect consumers in a manner that does not
unreasonably affect employers and insurers.
SEC. 144. HEALTH INSURANCE OMBUDSMAN.
(a) In General.--The Commissioner shall appoint within the Health
Choices Administration a Qualified Health Benefits Plan Ombudsman who
shall have expertise and experience in the fields of health care and
education of (and assistance to) individuals.
(b) Duties.--The Qualified Health Benefits Plan Ombudsman shall, in a
linguistically appropriate manner--
(1) receive complaints, grievances, and requests for
information submitted by individuals;
(2) provide assistance with respect to complaints,
grievances, and requests referred to in paragraph (1),
including--
(A) helping individuals determine the relevant
information needed to seek an appeal of a decision or
determination;
(B) assistance to such individuals with any problems
arising from disenrollment from such a plan;
(C) assistance to such individuals in choosing a
qualified health benefits plan in which to enroll; and
(D) assistance to such individuals in presenting
information under subtitle C (relating to affordability
credits);
(3) consult with educated patients and consumer advocates
(described in section 123(a)(5)); and
(4) submit annual reports to Congress and the Commissioner
that describe the activities of the Ombudsman and that include
such recommendations for improvement in the administration of
this division as the Ombudsman determines appropriate. The
Ombudsman shall not serve as an advocate for any increases in
payments or new coverage of services, but may identify issues
and problems in payment or coverage policies.
Subtitle F--Relation to Other Requirements; Miscellaneous
SEC. 151. RELATION TO OTHER REQUIREMENTS.
(a) Coverage Not Offered Through Exchange.--
(1) In general.--In the case of health insurance coverage not
offered through the Health Insurance Exchange (whether or not
offered in connection with an employment-based health plan),
and in the case of employment-based health plans, the
requirements of this title do not supercede any requirements
applicable under titles XXII and XXVII of the Public Health
Service Act, parts 6 and 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974, or State law,
except insofar as such requirements prevent the application of
a requirement of this division, as determined by the
Commissioner.
(2) Construction.--Nothing in paragraph (1) shall be
construed as affecting the application of section 514 of the
Employee Retirement Income Security Act of 1974.
(b) Coverage Offered Through Exchange.--
(1) In general.--In the case of health insurance coverage
offered through the Health Insurance Exchange--
(A) the requirements of this title do not supercede
any requirements (including requirements relating to
genetic information nondiscrimination and mental
health) applicable under title XXVII of the Public
Health Service Act or under State law, except insofar
as such requirements prevent the application of a
requirement of this division, as determined by the
Commissioner; and
(B) individual rights and remedies under State laws
shall apply.
(2) Construction.--In the case of coverage described in
paragraph (1), nothing in such paragraph shall be construed as
preventing the application of rights and remedies under State
laws with respect to any requirement referred to in paragraph
(1)(A).
SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE.
(a) In General.--Except as otherwise explicitly permitted by this Act
and by subsequent regulations consistent with this Act, all health care
and related services (including insurance coverage and public health
activities) covered by this Act shall be provided without regard to
personal characteristics extraneous to the provision of high quality
health care or related services.
(b) Implementation.--To implement the requirement set forth in
subsection (a), the Secretary of Health and Human Services shall, not
later than 18 months after the date of the enactment of this Act,
promulgate such regulations as are necessary or appropriate to insure
that all health care and related services (including insurance coverage
and public health activities) covered by this Act are provided (whether
directly or through contractual, licensing, or other arrangements)
without regard to personal characteristics extraneous to the provision
of high quality health care or related services.
SEC. 153. WHISTLEBLOWER PROTECTION.
(a) Retaliation Prohibited.--No employer may discharge any employee
or otherwise discriminate against any employee with respect to his
compensation, terms, conditions, or other privileges of employment
because the employee (or any person acting pursuant to a request of the
employee)--
(1) provided, caused to be provided, or is about to provide
or cause to be provided to the employer, the Federal
Government, or the attorney general of a State information
relating to any violation of, or any act or omission the
employee reasonably believes to be a violation of any provision
of this Act or any order, rule, or regulation promulgated under
this Act;
(2) testified or is about to testify in a proceeding
concerning such violation;
(3) assisted or participated or is about to assist or
participate in such a proceeding; or
(4) objected to, or refused to participate in, any activity,
policy, practice, or assigned task that the employee (or other
such person) reasonably believed to be in violation of any
provision of this Act or any order, rule, or regulation
promulgated under this Act.
(b) Enforcement Action.--An employee covered by this section who
alleges discrimination by an employer in violation of subsection (a)
may bring an action governed by the rules, procedures, legal burdens of
proof, and remedies set forth in section 40(b) of the Consumer Product
Safety Act (15 U.S.C. 2087(b)).
(c) Employer Defined.--As used in this section, the term ``employer''
means any person (including one or more individuals, partnerships,
associations, corporations, trusts, professional membership
organization including a certification, disciplinary, or other
professional body, unincorporated organizations, nongovernmental
organizations, or trustees) engaged in profit or nonprofit business or
industry whose activities are governed by this Act, and any agent,
contractor, subcontractor, grantee, or consultant of such person.
(d) Rule of Construction.--The rule of construction set forth in
section 20109(h) of title 49, United States Code, shall also apply to
this section.
SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.
Nothing in this division shall be construed to alter or supercede any
statutory or other obligation to engage in collective bargaining over
the terms and conditions of employment related to health care.
SEC. 155. SEVERABILITY.
If any provision of this Act, or any application of such provision to
any person or circumstance, is held to be unconstitutional, the
remainder of the provisions of this Act and the application of the
provision to any other person or circumstance shall not be affected.
SEC. 156. RULE OF CONSTRUCTION REGARDING HAWAII PREPAID HEALTH CARE
ACT.
(a) In General.--Subject to this section--
(1) nothing in this division (or an amendment made by this
division) shall be construed to modify or limit the application
of the exemption for the Hawaii Prepaid Health Care Act (Haw.
Rev. Stat. Sec. Sec. 393-1 et seq.) as provided for under
section 514(b)(5) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1144(b)(5)), and such exemption shall
also apply with respect to the provisions of this division, and
(2) for purposes of this division (and the amendments made by
this division), coverage provided pursuant to the Hawaii
Prepaid Health Care Act shall be treated as a qualified health
benefits plan providing acceptable coverage so long as the
Secretary of Labor determines that such coverage for employees
(taking into account the benefits and the cost to employees for
such benefits) is substantially equivalent to or greater than
the coverage provided for employees pursuant to the essential
benefits package.
(b) Coordination With State Law of Hawaii.--The Commissioner shall,
based on ongoing consultation with the appropriate officials of the
State of Hawaii, make adjustments to rules and regulations of the
Commissioner under this division as may be necessary, as determined by
the Commissioner, to most effectively coordinate the provisions of this
division with the provisions of the Hawaii Prepaid Health Care Act,
taking into account any changes made from time to time to the Hawaii
Prepaid Health Care Act and related laws of such State.
SEC. 157. INCREASING MEANINGFUL USE OF ELECTRONIC HEALTH RECORDS.
(a) Study.--The Commissioner shall conduct a study on methods that
QHBP offering entities can use to encourage increased meaningful use of
electronic health records by health care providers, including--
(1) qualified health benefits plans offering higher
reimbursement rates for such meaningful use; and
(2) promoting the use by health care providers of low-cost
available electronic health record software packages, such as
software made available to health care providers by the
Veterans Administration.
(b) Report.--Not later than 2 years after the date of the enactment
of this Act, the Commissioner shall submit to the Congress a report
containing--
(1) the results of the study under subsection (a); and
(2) recommendations concerning whether qualified health
benefits plans should increase reimbursement rates to health
care providers to increase meaningful use of electronic health
records by such providers.
(c) Requirements.--
(1) In general.--Not later than one year after the date the
report is submitted to the Congress under subsection (b), if,
under subsection (b)(2), the Commissioner recommends increased
reimbursement rates, the Commissioner shall require that
qualified health benefits plans increase reimbursement rates
for health care providers that show meaningful use of
electronic health records.
(2) Cost limitation.--An increase in rates under paragraph
(1) shall not result in any increase in affordability premium
or cost-sharing credits under subtitle C of title II of this
division.
SEC. 158. PRIVATE RIGHT OF CONTRACT WITH HEALTH CARE PROVIDERS.
Nothing in this Act shall be construed to preclude any participant or
beneficiary in a group health plan from entering into any contract or
arrangement for health care with any health care provider.
Subtitle G--Early Investments
SEC. 161-163. [FOR SECTIONS 161 THROUGH 163, SEE THE TEXT OF H.R.3200,
AS INTRODUCED.]
SEC. 164. REINSURANCE PROGRAM FOR RETIREES.
(a) Establishment.--
(1) In general.--Not later than 90 days after the date of the
enactment of this Act, the Secretary of Health and Human
Services shall establish a temporary reinsurance program (in
this section referred to as the ``reinsurance program'') to
provide reimbursement to assist participating employment-based
plans with the cost of providing health benefits to retirees
and to eligible spouses, surviving spouses and dependents of
such retirees.
(2) Definitions.--For purposes of this section:
(A) The term ``eligible employment-based plan'' means
a group health benefits plan that--
(i) is maintained by one or more employers,
former employers or employee associations, or a
voluntary employees' beneficiary association,
or a committee or board of individuals
appointed to administer such plan, and
(ii) provides health benefits to retirees.
(B) The term ``health benefits'' means medical,
surgical, hospital, prescription drug, and such other
benefits as shall be determined by the Secretary,
whether self-funded or delivered through the purchase
of insurance or otherwise.
(C) The term ``participating employment-based plan''
means an eligible employment-based plan that is
participating in the reinsurance program.
(D) The term ``retiree'' means, with respect to a
participating employment-benefit plan, an individual
who--
(i) is 55 years of age or older;
(ii) is not eligible for coverage under title
XVIII of the Social Security Act; and
(iii) is not an active employee of an
employer maintaining the plan or of any
employer that makes or has made substantial
contributions to fund such plan.
(E) The term ``Secretary'' means Secretary of Health
and Human Services.
(b) Participation.--To be eligible to participate in the reinsurance
program, an eligible employment-based plan shall submit to the
Secretary an application for participation in the program, at such
time, in such manner, and containing such information as the Secretary
shall require.
(c) Payment.--
(1) Submission of claims.--
(A) In general.--Under the reinsurance program, a
participating employment-based plan shall submit claims
for reimbursement to the Secretary which shall contain
documentation of the actual costs of the items and
services for which each claim is being submitted.
(B) Basis for claims.--Each claim submitted under
subparagraph (A) shall be based on the actual amount
expended by the participating employment-based plan
involved within the plan year for the appropriate
employment based health benefits provided to a retiree
or to the spouse, surviving spouse, or dependent of a
retiree. In determining the amount of any claim for
purposes of this subsection, the participating
employment-based plan shall take into account any
negotiated price concessions (such as discounts, direct
or indirect subsidies, rebates, and direct or indirect
remunerations) obtained by such plan with respect to
such health benefits. For purposes of calculating the
amount of any claim, the costs paid by the retiree or
by the spouse, surviving spouse, or dependent of the
retiree in the form of deductibles, co-payments, and
co-insurance shall be included along with the amounts
paid by the participating employment-based plan.
(2) Program payments and limit.--If the Secretary determines
that a participating employment-based plan has submitted a
valid claim under paragraph (1), the Secretary shall reimburse
such plan for 80 percent of that portion of the costs
attributable to such claim that exceeds $15,000, but is less
than $90,000. Such amounts shall be adjusted each year based on
the percentage increase in the medical care component of the
Consumer Price Index (rounded to the nearest multiple of
$1,000) for the year involved.
(3) Use of payments.--Amounts paid to a participating
employment-based plan under this subsection shall be used to
lower the costs borne directly by the participants and
beneficiaries for health benefits provided under such plan in
the form of premiums, co-payments, deductibles, co-insurance,
or other out-of-pocket costs. Such payments shall not be used
to reduce the costs of an employer maintaining the
participating employment-based plan. The Secretary shall
develop a mechanism to monitor the appropriate use of such
payments by such plans.
(4) Appeals and program protections.--The Secretary shall
establish--
(A) an appeals process to permit participating
employment-based plans to appeal a determination of the
Secretary with respect to claims submitted under this
section; and
(B) procedures to protect against fraud, waste, and
abuse under the program.
(5) Audits.--The Secretary shall conduct annual audits of
claims data submitted by participating employment-based plans
under this section to ensure that they are in compliance with
the requirements of this section.
(d) Retiree Reserve Trust Fund.--
(1) Establishment.--
(A) In general.--There is established in the Treasury
of the United States a trust fund to be known as the
``Retiree Reserve Trust Fund'' (referred to in this
section as the ``Trust Fund''), that shall consist of
such amounts as may be appropriated or credited to the
Trust Fund as provided for in this subsection to enable
the Secretary to carry out the reinsurance program.
Such amounts shall remain available until expended.
(B) Funding.--There are hereby appropriated to the
Trust Fund, out of any moneys in the Treasury not
otherwise appropriated, an amount requested by the
Secretary as necessary to carry out this section,
except that the total of all such amounts requested
shall not exceed $10,000,000,000.
(C) Appropriations from the trust fund.--
(i) In general.--Amounts in the Trust Fund
are appropriated to provide funding to carry
out the reinsurance program and shall be used
to carry out such program.
(ii) Budgetary implications.--Amounts
appropriated under clause (i), and outlays
flowing from such appropriations, shall not be
taken into account for purposes of any budget
enforcement procedures including allocations
under section 302(a) and (b) of the Balanced
Budget and Emergency Deficit Control Act and
budget resolutions for fiscal years during
which appropriations are made from the Trust
Fund.
(iii) Limitation to available funds.--The
Secretary has the authority to stop taking
applications for participation in the program
or take such other steps in reducing
expenditures under the reinsurance program in
order to ensure that expenditures under the
reinsurance program do not exceed the funds
available under this subsection.
SEC. 165. PROHIBITION AGAINST POST-RETIREMENT REDUCTIONS OF RETIREE
HEALTH BENEFITS BY GROUP HEALTH PLANS.
(a) In General.--Part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by inserting after
section 714 the following new section:
``SEC. 715. PROTECTION AGAINST POST-RETIREMENT REDUCTION OF RETIREE
HEALTH BENEFITS.
``(a) In General.--Every group health plan shall contain a provision
which expressly bars the plan, or any fiduciary of the plan, from
reducing the benefits provided under the plan to a retired participant,
or beneficiary of such participant, if such reduction affects the
benefits provided to the participant or beneficiary as of the date the
participant retired for purposes of the plan and such reduction occurs
after the participant's retirement unless such reduction is also made
with respect to active participants.
``(b) No Reduction.--Notwithstanding that a group health plan
described in subsection (a) may contain a provision reserving the
general power to amend or terminate the plan or a provision
specifically authorizing the plan to make post-retirement reductions in
retiree health benefits, it shall be prohibited for any group health
plan, whether through amendment or otherwise, to reduce the benefits
provided to a retired participant or his or her beneficiary under the
terms of the plan if such reduction of benefits occurs after the date
the participant retired for purposes of the plan and reduces benefits
that were provided to the participant, or his or her beneficiary, as of
the date the participant retired unless such reduction is also made
with respect to active participants.''.
(b) Conforming Amendment.--The table of contents in section 1 of such
Act is amended by inserting after the item relating to section 714 the
following new item:
``Sec. 715. Protection against post-retirement reduction of retiree
health benefits.''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 166. LIMITATIONS ON PREEXISTING CONDITION EXCLUSIONS IN GROUP
HEALTH PLANS IN ADVANCE OF APPLICABILITY OF NEW
PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS.
(a) Amendments to the Employee Retirement Income Security Act of
1974.--
(1) Reduction in look-back period.--Section 701(a)(1) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1181(a)(1)) is amended by striking ``6-month period'' and
inserting ``30-day period''.
(2) Reduction in permitted preexisting condition limitation
period.--Section 701(a)(2) of such Act (29 U.S.C. 1181(a)(2))
is amended by striking ``12 months'' and inserting ``3
months'', and by striking ``18 months'' and inserting ``9
months''.
(3) Inapplicability of interim limitations upon applicability
of total prohibition of exclusion.--Section 701 of such Act
shall cease to be effective in the case of any group health
plan as of the date on which such plan becomes subject to the
requirements of section 111 of this Act (relating to
prohibiting preexisting condition exclusions).
(b) Effective Date.--
(1) In general.--Except as provided in subparagraph (B), the
amendments made by paragraphs (1) and (2) of subsection (a)
shall apply with respect to group health plans for plan years
beginning after the end of the 6th calendar month following the
date of the enactment of this Act.
(2) Special rule for collective bargaining agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by
paragraphs (1) and (2) of subsection (a) shall not apply to
plan years beginning before the earlier of--
(A) the date on which the last of the collective
bargaining agreements relating to the plan terminates
(determined without regard to any extension thereof
agreed to after the date of the enactment of this Act),
or
(B) 3 years after the date of the enactment of this
Act.
For purposes of subparagraph (A), any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any requirement
added by the amendments made by paragraphs (1) and (2) of
subsection (a) shall not be treated as a termination of such
collective bargaining agreement.
SEC. 167. EXTENSION OF COBRA CONTINUATION COVERAGE.
(a) Extension of Current Periods of Continuation Coverage.--
(1) In general.--In the case of any individual who is, under
a COBRA continuation coverage provision, covered under COBRA
continuation coverage on or after the date of the enactment of
this Act, the required period of any such coverage which has
not subsequently terminated under the terms of such provision
for any reason other than the expiration of a period of a
specified number of months shall, notwithstanding such
provision and subject to subsection (b), extend to the earlier
of the date on which such individual becomes eligible for
coverage under an employment-based health plan or the date on
which such individual becomes eligible for health insurance
coverage through the Health Insurance Exchange (or a State-
based Health Insurance Exchange operating in a State or group
of States).
(2) Notice.--As soon as practicable after the date of the
enactment of this Act, the Secretary of Labor, in consultation
with the Secretary of the Treasury and the Secretary of Health
and Human Services, shall, in consultation with administrators
of the group health plans (or other entities) that provide or
administer the COBRA continuation coverage involved, provide
rules setting forth the form and manner in which prompt notice
to individuals of the continued availability of COBRA
continuation coverage to such individuals under paragraph (1).
(b) Continued Effect of Other Terminating Events.--Notwithstanding
subsection (a), any required period of COBRA continuation coverage
which is extended under such subsection shall terminate upon the
occurrence, prior to the date of termination otherwise provided in such
subsection, of any terminating event specified in the applicable
continuation coverage provision other than the expiration of a period
of a specified number of months.
(c) Access to State Health Benefits Risk Pools.--This section shall
supersede any provision of the law of a State or political subdivision
thereof to the extent that such provision has the effect of limiting or
precluding access by a qualified beneficiary whose COBRA continuation
coverage has been extended under this section to a State health
benefits risk pool recognized by the Commissioner for purposes of this
section solely by reason of the extension of such coverage beyond the
date on which such coverage otherwise would have expired.
(d) Definitions.--For purposes of this section--
(1) COBRA continuation coverage.--The term ``COBRA
continuation coverage'' means continuation coverage provided
pursuant to part 6 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (other than under
section 609), title XXII of the Public Health Service Act,
section 4980B of the Internal Revenue Code of 1986 (other than
subsection (f)(1) of such section insofar as it relates to
pediatric vaccines), or section 905a of title 5, United States
Code, or under a State program that provides comparable
continuation coverage. Such term does not include coverage
under a health flexible spending arrangement under a cafeteria
plan within the meaning of section 125 of the Internal Revenue
Code of 1986.
(2) COBRA continuation provision.--The term ``COBRA
continuation provision'' means the provisions of law described
in paragraph (1).
TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
Subtitle A--Health Insurance Exchange
SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EXCHANGE; OUTLINE OF
DUTIES; DEFINITIONS.
(a) Establishment.--There is established within the Health Choices
Administration and under the direction of the Commissioner a Health
Insurance Exchange in order to facilitate access of individuals and
employers, through a transparent process, to a variety of choices of
affordable, quality health insurance coverage, including a public
health insurance option.
(b) Outline of Duties of Commissioner.--In accordance with this
subtitle and in coordination with appropriate Federal and State
officials as provided under section 143(b), the Commissioner shall--
(1) under section 204 establish standards for, accept bids
from, and negotiate and enter into contracts with, QHBP
offering entities for the offering of health benefits plans
through the Health Insurance Exchange, with different levels of
benefits required under section 203, and including with respect
to oversight and enforcement;
(2) under section 205 facilitate outreach and enrollment in
such plans of Exchange-eligible individuals and employers
described in section 202; and
(3) conduct such activities related to the Health Insurance
Exchange as required, including establishment of a risk pooling
mechanism under section 206 and consumer protections under
subtitle D of title I.
(c) Exchange-participating Health Benefits Plan Defined.--In this
division, the term ``Exchange-participating health benefits plan''
means a qualified health benefits plan that is offered through the
Health Insurance Exchange.
SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.
(a) Access to Coverage.--In accordance with this section, all
individuals are eligible to obtain coverage through enrollment in an
Exchange-participating health benefits plan offered through the Health
Insurance Exchange unless such individuals are enrolled in another
qualified health benefits plan or other acceptable coverage.
(b) Definitions.--In this division:
(1) Exchange-eligible individual.--The term ``Exchange-
eligible individual'' means an individual who is eligible under
this section to be enrolled through the Health Insurance
Exchange in an Exchange-participating health benefits plan and,
with respect to family coverage, includes dependents of such
individual.
(2) Exchange-eligible employer.--The term ``Exchange-eligible
employer'' means an employer that is eligible under this
section to enroll through the Health Insurance Exchange
employees of the employer (and their dependents) in Exchange-
eligible health benefits plans.
(3) Employment-related definitions.--The terms ``employer'',
``employee'', ``full-time employee'', and ``part-time
employee'' have the meanings given such terms by the
Commissioner for purposes of this division.
(c) Transition.--Individuals and employers shall only be eligible to
enroll or participate in the Health Insurance Exchange in accordance
with the following transition schedule:
(1) First year.--In Y1 (as defined in section 100(c))--
(A) individuals described in subsection (d)(1),
including individuals described in paragraphs (3), (4),
and (5) of subsection (d); and
(B) smallest employers described in subsection
(e)(1).
(2) Second year.--In Y2--
(A) individuals and employers described in paragraph
(1); and
(B) smaller employers described in subsection (e)(2).
(3) Third year.--In Y3--
(A) individuals and employers described in paragraph
(2);
(B) larger employers described in subsection (e)(3);
and
(C) largest employers as permitted by the
Commissioner under subsection (e)(4).
(4) Fourth and subsequent years.--In Y4 and subsequent
years--
(A) individuals and employers described in paragraph
(3); and
(B) largest employers as permitted by the
Commissioner under subsection (e)(4).
(d) Individuals.--
(1) Individual described.--Subject to the succeeding
provisions of this subsection, an individual described in this
paragraph is an individual who--
(A) is not enrolled in coverage described in
subparagraphs (C) through (F) of paragraph (2); and
(B) is not enrolled in coverage as a full-time
employee (or as a dependent of such an employee) under
a group health plan if the coverage and an employer
contribution under the plan meet the requirements of
section 312.
For purposes of subparagraph (B), in the case of an individual
who is self-employed, who has at least 1 employee, and who
meets the requirements of section 312, such individual shall be
deemed a full-time employee described in such subparagraph.
(2) Acceptable coverage.--For purposes of this division, the
term ``acceptable coverage'' means any of the following:
(A) Qualified health benefits plan coverage.--
Coverage under a qualified health benefits plan.
(B) Grandfathered health insurance coverage; coverage
under current group health plan.--Coverage under a
grandfathered health insurance coverage (as defined in
subsection (a) of section 102) or under a current group
health plan (described in subsection (b) of such
section).
(C) Medicare.--Coverage under part A of title XVIII
of the Social Security Act.
(D) Medicaid.--Coverage for medical assistance under
title XIX of the Social Security Act, excluding such
coverage that is only available because of the
application of subsection (u), (z), or (aa) of section
1902 of such Act
(E) Members of the armed forces and dependents
(including tricare).--Coverage under chapter 55 of
title 10, United States Code, including similar
coverage furnished under section 1781 of title 38 of
such Code.
(F) VA.--Coverage under the veteran's health care
program under chapter 17 of title 38, United States
Code, but only if the coverage for the individual
involved is determined by the Commissioner in
coordination with the Secretary of Treasury to be not
less than a level specified by the Commissioner and
Secretary of Veteran's Affairs, in coordination with
the Secretary of Treasury, based on the individual's
priority for services as provided under section 1705(a)
of such title.
(G) Other coverage.--Such other health benefits
coverage, such as a State health benefits risk pool, as
the Commissioner, in coordination with the Secretary of
the Treasury, recognizes for purposes of this
paragraph.
The Commissioner shall make determinations under this paragraph
in coordination with the Secretary of the Treasury.
(3) Treatment of certain non-traditional medicaid eligible
individuals.--An individual who is a non-traditional Medicaid
eligible individual (as defined in section 205(e)(4)(C)) in a
State may be an Exchange-eligible individual if the individual
was enrolled in a qualified health benefits plan, grandfathered
health insurance coverage, or current group health plan during
the 6 months before the individual became a non-traditional
Medicaid eligible individual. During the period in which such
an individual has chosen to enroll in an Exchange-participating
health benefits plan, the individual is not also eligible for
medical assistance under Medicaid.
(4) Continuing eligibility permitted.--
(A) In general.--Except as provided in subparagraph
(B), once an individual qualifies as an Exchange-
eligible individual under this subsection (including as
an employee or dependent of an employee of an Exchange-
eligible employer) and enrolls under an Exchange-
participating health benefits plan through the Health
Insurance Exchange, the individual shall continue to be
treated as an Exchange-eligible individual until the
individual is no longer enrolled with an Exchange-
participating health benefits plan.
(B) Exceptions.--
(i) In general.--Subparagraph (A) shall not
apply to an individual once the individual
becomes eligible for coverage--
(I) under part A of the Medicare
program;
(II) under the Medicaid program as a
Medicaid eligible individual, except as
permitted under paragraph (3) or clause
(ii); or
(III) in such other circumstances as
the Commissioner may provide.
(ii) Transition period.--In the case
described in clause (i)(II), the Commissioner
shall permit the individual to continue
treatment under subparagraph (A) until such
limited time as the Commissioner determines it
is administratively feasible, consistent with
minimizing disruption in the individual's
access to health care.
(5) Adversely affected retiree health benefits group
participants and beneficiaries.--
(A) In general.--Beginning in Y1, an individual who
is a participant or beneficiary in an adversely
affected retiree health benefits group who does not
have coverage described in paragraph (2)(C) is an
Exchange eligible individual, whether or not such an
individual has other acceptable coverage.
(B) Adverage affected retiree health benefit group
defined.--In this paragraph, the term ``adversely
affected retiree health benefits group'' means the
retired participants and their beneficiaries of a group
health plan that cancelled or substantially reduced the
amount, type, level, or form of health benefit or
option provided prior January 1, 2008.
(e) Employers.--
(1) Smallest employers.--Subject to paragraph (5), smallest
employers described in this paragraph are employers with 15 or
fewer employees.
(2) Smaller employers.--Subject to paragraph (5), smaller
employers described in this paragraph are employers that are
not smallest employers described in paragraph (1) and that have
25 or fewer employees.
(3) Larger employers.--Subject to paragraph (5), larger
employers described in this paragraph are employers that are
not smallest employers described in paragraph (1) or smaller
employers described in paragraph (2) and that have 50 or fewer
employees.
(4) Largest employers.--
(A) In general.--Beginning with Y3, the Commissioner
may permit employers not described in paragraphs (1)
(2), or (3) to be Exchange-eligible employers.
(B) Phase-in.--In applying subparagraph (A), the
Commissioner may phase-in the application of such
subparagraph based on the number of full-time employees
of an employer and such other considerations as the
Commissioner deems appropriate.
(5) Continuing eligibility.--Once an employer is permitted to
be an Exchange-eligible employer under this subsection and
enrolls employees through the Health Insurance Exchange, the
employer shall continue to be treated as an Exchange-eligible
employer for each subsequent plan year regardless of the number
of employees involved unless and until the employer meets the
requirement of section 311(a) through paragraph (1) of such
section by offering a group health plan and not through
offering Exchange-participating health benefits plan.
(6) Employer participation and contributions.--
(A) Satisfaction of employer responsibility.--For any
year in which an employer is an Exchange-eligible
employer, such employer may meet the requirements of
section 312 with respect to employees of such employer
by offering such employees the option of enrolling with
Exchange-participating health benefits plans through
the Health Insurance Exchange consistent with the
provisions of subtitle B of title III.
(B) Employee choice.--Any employee offered Exchange-
participating health benefits plans by the employer of
such employee under subparagraph (A) may choose
coverage under any such plan. That choice includes,
with respect to family coverage, coverage of the
dependents of such employee.
(7) Affiliated groups.--Any employer which is part of a group
of employers who are treated as a single employer under
subsection (b), (c), (m), or (o) of section 414 of the Internal
Revenue Code of 1986 shall be treated, for purposes of this
subtitle, as a single employer.
(8) Other counting rules.--The Commissioner shall establish
rules relating to how employees are counted for purposes of
carrying out this subsection.
(9) Treatment of multiemployer plans.--The plan sponsor of a
group health plan (as defined in section 733(a) of the Employee
Retirement Income Security Act of 1974) that is multiemployer
plan (as defined in section 3(37) of such Act) may obtain
health insurance coverage with respect to participants in the
plan through the Exchange to the same extent as an employer not
described in paragraph (1) or (2) is permitted by the
Commissioner to obtain health insurance coverage through the
Exchange as an Exchange-eligible employer
(f) Special Situation Authority.--The Commissioner shall have the
authority to establish such rules as may be necessary to deal with
special situations with regard to uninsured individuals and employers
participating as Exchange-eligible individuals and employers, such as
transition periods for individuals and employers who gain, or lose,
Exchange-eligible participation status, and to establish grace periods
for premium payment.
(g) Surveys of Individuals and Employers.--The Commissioner shall
provide for periodic surveys of Exchange-eligible individuals and
employers concerning satisfaction of such individuals and employers
with the Health Insurance Exchange and Exchange-participating health
benefits plans.
(h) Exchange Access Study.--
(1) In general.--The Commissioner shall conduct a study of
access to the Health Insurance Exchange for individuals and for
employers, including individuals and employers who are not
eligible and enrolled in Exchange-participating health benefits
plans. The goal of the study is to determine if there are
significant groups and types of individuals and employers who
are not Exchange eligible individuals or employers, but who
would have improved benefits and affordability if made eligible
for coverage in the Exchange.
(2) Items included in study.--Such study also shall examine--
(A) the terms, conditions, and affordability of group
health coverage offered by employers and QHBP offering
entities outside of the Exchange compared to Exchange-
participating health benefits plans; and
(B) the affordability-test standard for access of
certain employed individuals to coverage in the Health
Insurance Exchange.
(3) Report.--Not later than January 1 of Y3, in Y6, and
thereafter, the Commissioner shall submit to Congress on the
study conducted under this subsection and shall include in such
report recommendations regarding changes in standards for
Exchange eligibility for for individuals and employers.
SEC. 203. BENEFITS PACKAGE LEVELS.
(a) In General.--The Commissioner shall specify the benefits to be
made available under Exchange-participating health benefits plans
during each plan year, consistent with subtitle C of title I and this
section.
(b) Limitation on Health Benefits Plans Offered by Offering
Entities.--The Commissioner may not enter into a contract with a QHBP
offering entity under section 204(c) for the offering of an Exchange-
participating health benefits plan in a service area unless the
following requirements are met:
(1) Required offering of basic plan.--The entity offers only
one basic plan for such service area.
(2) Optional offering of enhanced plan.--If and only if the
entity offers a basic plan for such service area, the entity
may offer one enhanced plan for such area.
(3) Optional offering of premium plan.--If and only if the
entity offers an enhanced plan for such service area, the
entity may offer one premium plan for such area.
(4) Optional offering of premium-plus plans.--If and only if
the entity offers a premium plan for such service area, the
entity may offer one or more premium-plus plans for such area.
All such plans may be offered under a single contract with the
Commissioner.
(c) Specification of Benefit Levels for Plans.--
(1) In general.--The Commissioner shall establish the
following standards consistent with this subsection and title
I:
(A) Basic, enhanced, and premium plans.--Standards
for 3 levels of Exchange-participating health benefits
plans: basic, enhanced, and premium (in this division
referred to as a ``basic plan'', ``enhanced plan'', and
``premium plan'', respectively).
(B) Premium-plus plan benefits.--Standards for
additional benefits that may be offered, consistent
with this subsection and subtitle C of title I, under a
premium plan (such a plan with additional benefits
referred to in this division as a ``premium-plus
plan'') .
(2) Basic plan.--
(A) In general.--A basic plan shall offer the
essential benefits package required under title I for a
qualified health benefits plan.
(B) Tiered cost-sharing for affordable credit
eligible individuals.--In the case of an affordable
credit eligible individual (as defined in section
242(a)(1)) enrolled in an Exchange-participating health
benefits plan, the benefits under a basic plan are
modified to provide for the reduced cost-sharing for
the income tier applicable to the individual under
section 244(c).
(3) Enhanced plan.--A enhanced plan shall offer, in addition
to the level of benefits under the basic plan, a lower level of
cost-sharing as provided under title I consistent with section
123(b)(5)(A).
(4) Premium plan.--A premium plan shall offer, in addition to
the level of benefits under the basic plan, a lower level of
cost-sharing as provided under title I consistent with section
123(b)(5)(B).
(5) Premium-plus plan.--A premium-plus plan is a premium plan
that also provides additional benefits, such as adult oral
health and vision care, approved by the Commissioner. The
portion of the premium that is attributable to such additional
benefits shall be separately specified.
(6) Range of permissible variation in cost-sharing.--The
Commissioner shall establish a permissible range of variation
of cost-sharing for each basic, enhanced, and premium plan,
except with respect to any benefit for which there is no cost-
sharing permitted under the essential benefits package. Such
variation shall permit a variation of not more than plus (or
minus) 10 percent in cost-sharing with respect to each benefit
category specified under section 122.
(d) Treatment of State Benefit Mandates.--Insofar as a State requires
a health insurance issuer offering health insurance coverage to include
benefits beyond the essential benefits package, such requirement shall
continue to apply to an Exchange-participating health benefits plan, if
the State has entered into an arrangement satisfactory to the
Commissioner to reimburse the Commissioner for the amount of any net
increase in affordability premium credits under subtitle C as a result
of an increase in premium in basic plans as a result of application of
such requirement.
SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE-PARTICIPATING HEALTH
BENEFITS PLANS.
(a) Contracting Duties.--In carrying out section 201(b)(1) and
consistent with this subtitle:
(1) Offering entity and plan standards.--The Commissioner
shall--
(A) establish standards necessary to implement the
requirements of this title and title I for--
(i) QHBP offering entities for the offering
of an Exchange-participating health benefits
plan; and
(ii) for Exchange-participating health
benefits plans; and
(B) certify QHBP offering entities and qualified
health benefits plans as meeting such standards and
requirements of this title and title I for purposes of
this subtitle.
(2) Soliciting and negotiating bids; contracts.--The
Commissioner shall--
(A) solicit bids from QHBP offering entities for the
offering of Exchange-participating health benefits
plans;
(B) based upon a review of such bids, negotiate with
such entities for the offering of such plans; and
(C) enter into contracts with such entities for the
offering of such plans through the Health Insurance
Exchange under terms (consistent with this title)
negotiated between the Commissioner and such entities.
(3) FAR not applicable.--The provisions of the Federal
Acquisition Regulation shall not apply to contracts between the
Commissioner and QHBP offering entities for the offering of
Exchange-participating health benefits plans under this title.
(b) Standards for QHBP Offering Entities to Offer Exchange-
participating Health Benefits Plans.--The standards established under
subsection (a)(1)(A) shall require that, in order for a QHBP offering
entity to offer an Exchange-participating health benefits plan, the
entity must meet the following requirements:
(1) Licensed.--The entity shall be licensed to offer health
insurance coverage under State law for each State in which it
is offering such coverage.
(2) Data reporting.--The entity shall provide for the
reporting of such information as the Commissioner may specify,
including information necessary to administer the risk pooling
mechanism described in section 206(b) and information to
address disparities in health and health care.
(3) Implementing affordability credits.--The entity shall
provide for implementation of the affordability credits
provided for enrollees under subtitle C, including the
reduction in cost-sharing under section 244(c).
(4) Enrollment.--The entity shall accept all enrollments
under this subtitle, subject to such exceptions (such as
capacity limitations) in accordance with the requirements under
title I for a qualified health benefits plan. The entity shall
notify the Commissioner if the entity projects or anticipates
reaching such a capacity limitation that would result in a
limitation in enrollment.
(5) Risk pooling participation.--The entity shall participate
in such risk pooling mechanism as the Commissioner establishes
under section 206(b).
(6) Essential community providers.--With respect to the basic
plan offered by the entity, the entity shall contract for
outpatient services with covered entities (as defined in
section 340B(a)(4) of the Public Health Service Act, as in
effect as of July 1, 2009). The Commissioner shall specify the
extent to which and manner in which the previous sentence shall
apply in the case of a basic plan with respect to which the
Commissioner determines provides substantially all benefits
through a health maintenance organization, as defined in
section 2791(b)(3) of the Public Health Service Act.
(7) Culturally and linguistically appropriate services and
communications.--The entity shall provide for culturally and
linguistically appropriate communication and health services.
(8) Additional requirements.--The entity shall comply with
other applicable requirements of this title, as specified by
the Commissioner, which shall include standards regarding
billing and collection practices for premiums and related grace
periods and which may include standards to ensure that the
entity does not use coercive practices to force providers not
to contract with other entities offering coverage through the
Health Insurance Exchange.
(c) Contracts.--
(1) Bid application.--To be eligible to enter into a contract
under this section, a QHBP offering entity shall submit to the
Commissioner a bid at such time, in such manner, and containing
such information as the Commissioner may require.
(2) Term.--Each contract with a QHBP offering entity under
this section shall be for a term of not less than one year, but
may be made automatically renewable from term to term in the
absence of notice of termination by either party.
(3) Enforcement of network adequacy.--In the case of a health
benefits plan of a QHBP offering entity that uses a provider
network, the contract under this section with the entity shall
provide that if--
(A) the Commissioner determines that such provider
network does not meet such standards as the
Commissioner shall establish under section 115; and
(B) an individual enrolled in such plan receives an
item or service from a provider that is not within such
network;
then any cost-sharing for such item or service shall be equal
to the amount of such cost-sharing that would be imposed if
such item or service was furnished by a provider within such
network.
(4) Oversight and enforcement responsibilities.--The
Commissioner shall establish processes, in coordination with
State insurance regulators, to oversee, monitor, and enforce
applicable requirements of this title with respect to QHBP
offering entities offering Exchange-participating health
benefits plans and such plans, including the marketing of such
plans. Such processes shall include the following:
(A) Grievance and complaint mechanisms.--The
Commissioner shall establish, in coordination with
State insurance regulators, a process under which
Exchange-eligible individuals and employers may file
complaints concerning violations of such standards.
(B) Enforcement.--In carrying out authorities under
this division relating to the Health Insurance
Exchange, the Commissioner may impose one or more of
the intermediate sanctions described in section 142(c).
(C) Termination.--
(i) In general.--The Commissioner may
terminate a contract with a QHBP offering
entity under this section for the offering of
an Exchange-participating health benefits plan
if such entity fails to comply with the
applicable requirements of this title. Any
determination by the Commissioner to terminate
a contract shall be made in accordance with
formal investigation and compliance procedures
established by the Commissioner under which--
(I) the Commissioner provides the
entity with the reasonable opportunity
to develop and implement a corrective
action plan to correct the deficiencies
that were the basis of the
Commissioner's determination; and
(II) the Commissioner provides the
entity with reasonable notice and
opportunity for hearing (including the
right to appeal an initial decision)
before terminating the contract.
(ii) Exception for imminent and serious risk
to health.--Clause (i) shall not apply if the
Commissioner determines that a delay in
termination, resulting from compliance with the
procedures specified in such clause prior to
termination, would pose an imminent and serious
risk to the health of individuals enrolled
under the qualified health benefits plan of the
QHBP offering entity.
(D) Construction.--Nothing in this subsection shall
be construed as preventing the application of other
sanctions under subtitle E of title I with respect to
an entity for a violation of such a requirement.
SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-ELIGIBLE INDIVIDUALS AND
EMPLOYERS IN EXCHANGE-PARTICIPATING HEALTH BENEFITS
PLAN.
(a) In General.--
(1) Outreach.--The Commissioner shall conduct outreach
activities consistent with subsection (c), including through
use of appropriate entities as described in paragraph (4) of
such subsection, to inform and educate individuals and
employers about the Health Insurance Exchange and Exchange-
participating health benefits plan options. Such outreach shall
include outreach specific to vulnerable populations, such as
children, individuals with disabilities, individuals with
mental illness, and individuals with other cognitive
impairments.
(2) Eligibility.--The Commissioner shall make timely
determinations of whether individuals and employers are
Exchange-eligible individuals and employers (as defined in
section 202).
(3) Enrollment.--The Commissioner shall establish and carry
out an enrollment process for Exchange-eligible individuals and
employers, including at community locations, in accordance with
subsection (b).
(b) Enrollment Process.--
(1) In general.--The Commissioner shall establish a process
consistent with this title for enrollments in Exchange-
participating health benefits plans. Such process shall provide
for enrollment through means such as the mail, by telephone,
electronically, and in person.
(2) Enrollment periods.--
(A) Open enrollment period.--The Commissioner shall
establish an annual open enrollment period during which
an Exchange-eligible individual or employer may elect
to enroll in an Exchange-participating health benefits
plan for the following plan year and an enrollment
period for affordability credits under subtitle C. Such
periods shall be during September through November of
each year, or such other time that would maximize
timeliness of income verification for purposes of such
subtitle. The open enrollment period shall not be less
than 30 days.
(B) Special enrollment.--The Commissioner shall also
provide for special enrollment periods to take into
account special circumstances of individuals and
employers, such as an individual who--
(i) loses acceptable coverage;
(ii) experiences a change in marital or other
dependent status;
(iii) moves outside the service area of the
Exchange-participating health benefits plan in
which the individual is enrolled; or
(iv) experiences a significant change in
income.
(C) Enrollment information.--The Commissioner shall
provide for the broad dissemination of information to
prospective enrollees on the enrollment process,
including before each open enrollment period. In
carrying out the previous sentence, the Commissioner
may work with other appropriate entities to facilitate
such provision of information.
(3) Automatic enrollment for non-medicaid eligible
individuals.--
(A) In general.--The Commissioner shall provide for a
process under which individuals who are Exchange-
eligible individuals described in subparagraph (B) are
automatically enrolled under an appropriate Exchange-
participating health benefits plan. Such process may
involve a random assignment or some other form of
assignment that takes into account the health care
providers used by the individual involved or such other
relevant factors as the Commissioner may specify.
(B) Subsidized individuals described.--An individual
described in this subparagraph is an Exchange-eligible
individual who is either of the following:
(i) Affordability credit eligible
individuals.--The individual--
(I) has applied for, and been
determined eligible for, affordability
credits under subtitle C;
(II) has not opted out from receiving
such affordability credit; and
(III) does not otherwise enroll in
another Exchange-participating health
benefits plan.
(ii) Individuals enrolled in a terminated
plan.--The individual is enrolled in an
Exchange-participating health benefits plan
that is terminated (during or at the end of a
plan year) and who does not otherwise enroll in
another Exchange-participating health benefits
plan.
(4) Direct payment of premiums to plans.--Under the
enrollment process, individuals enrolled in an Exchange-
partcipating health benefits plan shall pay such plans
directly, and not through the Commissioner or the Health
Insurance Exchange.
(c) Coverage Information and Assistance.--
(1) Coverage information.--The Commissioner shall provide for
the broad dissemination of information on Exchange-
participating health benefits plans offered under this title.
Such information shall be provided in a comparative manner, and
shall include information on benefits, premiums, cost-sharing,
quality, provider networks, and consumer satisfaction.
(2) Consumer assistance with choice.--To provide assistance
to Exchange-eligible individuals and employers, the
Commissioner shall--
(A) provide for the operation of a toll-free
telephone hotline to respond to requests for assistance
and maintain an Internet website through which
individuals may obtain information on coverage under
Exchange-participating health benefits plans and file
complaints;
(B) develop and disseminate information to Exchange-
eligible enrollees on their rights and
responsibilities;
(C) assist Exchange-eligible individuals in selecting
Exchange-participating health benefits plans and
obtaining benefits through such plans; and
(D) ensure that the Internet website described in
subparagraph (A) and the information described in
subparagraph (B) is developed using plain language (as
defined in section 133(a)(2)).
(3) Use of other entities.--In carrying out this subsection,
the Commissioner may work with other appropriate entities to
facilitate the dissemination of information under this
subsection and to provide assistance as described in paragraph
(2).
(d) Special Duties Related to Medicaid and CHIP.--
(1) Coverage for certain newborns.--
(A) In general.--In the case of a child born in the
United States who at the time of birth is not otherwise
covered under acceptable coverage, for the period of
time beginning on the date of birth and ending on the
date the child otherwise is covered under acceptable
coverage (or, if earlier, the end of the month in which
the 60-day period, beginning on the date of birth,
ends), the child shall be deemed--
(i) to be a non-traditional Medicaid eligible
individual (as defined in subsection (e)(5))
for purposes of this division and Medicaid; and
(ii) to have elected to enroll in Medicaid
through the application of paragraph (3).
(B) Extended treatment as traditional medicaid
eligible individual.--In the case of a child described
in subparagraph (A) who at the end of the period
referred to in such subparagraph is not otherwise
covered under acceptable coverage, the child shall be
deemed (until such time as the child obtains such
coverage or the State otherwise makes a determination
of the child's eligibility for medical assistance under
its Medicaid plan pursuant to section 1943(c)(1) of the
Social Security Act) to be a traditional Medicaid
eligible individual described in section 1902(l)(1)(B)
of such Act.
(2) CHIP transition.--A child who, as of the day before the
first day of Y1, is eligible for child health assistance under
title XXI of the Social Security Act (including a child
receiving coverage under an arrangement described in section
2101(a)(2) of such Act) is deemed as of such first day to be an
Exchange-eligible individual unless the individual is a
traditional Medicaid eligible individual as of such day.
(3) Automatic enrollment of medicaid eligible individuals
into medicaid.--The Commissioner shall provide for a process
under which an individual who is described in section 202(d)(3)
and has not elected to enroll in an Exchange-participating
health benefits plan is automatically enrolled under Medicaid.
(4) Notifications.--The Commissioner shall notify each State
in Y1 and for purposes of section 1902(gg)(1) of the Social
Security Act (as added by section 1703(a)) whether the Health
Insurance Exchange can support enrollment of children described
in paragraph (2) in such State in such year.
(e) Medicaid Coverage for Medicaid Eligible Individuals.--
(1) In general.--
(A) Choice for limited exchange-eligible
individuals.--As part of the enrollment process under
subsection (b), the Commissioner shall provide the
option, in the case of an Exchange-eligible individual
described in section 202(d)(3), for the individual to
elect to enroll under Medicaid instead of under an
Exchange-participating health benefits plan. Such an
individual may change such election during an
enrollment period under subsection (b)(2).
(B) Medicaid enrollment obligation.--An Exchange
eligible individual may apply, in the manner described
in section 241(b)(1), for a determination of whether
the individual is a Medicaid-eligible individual. If
the individual is determined to be so eligible, the
Commissioner, through the Medicaid memorandum of
understanding, shall provide for the enrollment of the
individual under the State Medicaid plan in accordance
with the Medicaid memorandum of understanding under
paragraph (4). In the case of such an enrollment, the
State shall provide for the same periodic
redetermination of eligibility under Medicaid as would
otherwise apply if the individual had directly applied
for medical assistance to the State Medicaid agency.
(2) Non-traditional medicaid eligible individuals.--In the
case of a non-traditional Medicaid eligible individual
described in section 202(d)(3) who elects to enroll under
Medicaid under paragraph (1)(A), the Commissioner shall provide
for the enrollment of the individual under the State Medicaid
plan in accordance with the Medicaid memorandum of
understanding under paragraph (4).
(3) Coordinated enrollment with state through memorandum of
understanding.--The Commissioner, in consultation with the
Secretary of Health and Human Services, shall enter into a
memorandum of understanding with each State (each in this
division referred to as a ``Medicaid memorandum of
understanding'') with respect to coordinating enrollment of
individuals in Exchange-participating health benefits plans and
under the State's Medicaid program consistent with this section
and to otherwise coordinate the implementation of the
provisions of this division with respect to the Medicaid
program. Such memorandum shall permit the exchange of
information consistent with the limitations described in
section 1902(a)(7) of the Social Security Act. Nothing in this
section shall be construed as permitting such memorandum to
modify or vitiate any requirement of a State Medicaid plan.
(4) Medicaid eligible individuals.--For purposes of this
division:
(A) Medicaid eligible individual.--The term
``Medicaid eligible individual'' means an individual
who is eligible for medical assistance under Medicaid.
(B) Traditional medicaid eligible individual.--The
term ``traditional Medicaid eligible individual'' means
a Medicaid eligible individual other than an individual
who is--
(i) a Medicaid eligible individual by reason
of the application of subclause (VIII) of
section 1902(a)(10)(A)(i) of the Social
Security Act; or
(ii) a childless adult not described in
section 1902(a)(10)(A) or (C) of such Act (as
in effect as of the day before the date of the
enactment of this Act).
(C) Non-traditional medicaid eligible individual.--
The term ``non-traditional Medicaid eligible
individual'' means a Medicaid eligible individual who
is not a traditional Medicaid eligible individual.
(f) Effective Culturally and Linguistically Appropriate
Communication.--In carrying out this section, the Commissioner shall
establish effective methods for communicating in plain language and a
culturally and linguistically appropriate manner.
SEC. 206. OTHER FUNCTIONS.
(a) Coordination of Affordability Credits.--The Commissioner shall
coordinate the distribution of affordability premium and cost-sharing
credits under subtitle C to QHBP offering entities offering Exchange-
participating health benefits plans.
(b) Coordination of Risk Pooling.--The Commissioner shall establish a
mechanism whereby there is an adjustment made of the premium amounts
payable among QHBP offering entities offering Exchange-participating
health benefits plans of premiums collected for such plans that takes
into account (in a manner specified by the Commissioner) the
differences in the risk characteristics of individuals and employers
enrolled under the different Exchange-participating health benefits
plans offered by such entities so as to minimize the impact of adverse
selection of enrollees among the plans offered by such entities.
(c) Special Inspector General for the Health Insurance Exchange.--
(1) Establishment; appointment.--There is hereby established
the Office of the Special Inspector General for the Health
Insurance Exchange, to be headed by a Special Inspector General
for the Health Insurance Exchange (in this subsection referred
to as the ``Special Inspector General'') to be appointed by the
President, by and with the advice and consent of the Senate.
The nomination of an individual as Special Inspector General
shall be made as soon as practicable after the establishment of
the program under this subtitle.
(2) Duties.--The Special Inspector General shall--
(A) conduct, supervise, and coordinate audits,
evaluations and investigations of the Health Insurance
Exchange to protect the integrity of the Health
Insurance Exchange, as well as the health and welfare
of participants in the Exchange;
(B) report both to the Commissioner and to the
Congress regarding program and management problems and
recommendations to correct them;
(C) have other duties (described in paragraphs (2)
and (3) of section 121 of division A of Public Law 110-
343) in relation to the duties described in the
previous subparagraphs; and
(D) have the authorities provided in section 6 of the
Inspector General Act of 1978 in carrying out duties
under this paragraph.
(3) Application of other special inspector general
provisions.--The provisions of subsections (b) (other than
paragraphs (1) and (3)), (d) (other than paragraph (1)), and
(e) of section 121 of division A of the Emergency Economic
Stabilization Act of 2009 (Public Law 110-343) shall apply to
the Special Inspector General under this subsection in the same
manner as such provisions apply to the Special Inspector
General under such section.
(4) Reports.--Not later than one year after the confirmation
of the Special Inspector General, and annually thereafter, the
Special Inspector General shall submit to the appropriate
committees of Congress a report summarizing the activities of
the Special Inspector General during the one year period ending
on the date such report is submitted.
(5) Termination.--The Office of the Special Inspector General
shall terminate five years after the date of the enactment of
this Act.
(d) Assistance for Small Employers.--
(1) In general.--The Commissioner, in consultation with the
Small Business Administration, shall establish and carry out a
program to provide to small employers counseling and technical
assistance with respect to the provision of health insurance to
employees of such employers through the Health Insurance
Exchange.
(2) Duties.--The program established under paragraph (1)
shall include the following services:
(A) Educational activities to increase awareness of
the Health Insurance Exchange and available small
employer health plan options.
(B) Distribution of information to small employers
with respect to the enrollment and selection process
for health plans available under the Health Insurance
Exchange, including standardized comparative
information on the health plans available under the
Health Insurance Exchange.
(C) Distribution of information to small employers
with respect to available affordability credits or
other financial assistance.
(D) Referrals to appropriate entities of complaints
and questions relating to the Health Insurance
Exchange.
(E) Enrollment and plan selection assistance for
employers with respect to the Health Insurance
Exchange.
(F) Responses to questions relating to the Health
Insurance Exchange and the program established under
paragraph (1).
(3) Authority to provide services directly or by contract.--
The Commissioner may provide services under paragraph (2)
directly or by contract with nonprofit entities that the
Commissioner determines capable of carrying out such services.
(4) Small employer defined.--In this subsection, the term
``small employer'' means an employer with less than 100
employees.
SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND.
(a) Establishment of Health Insurance Exchange Trust Fund.--There is
created within the Treasury of the United States a trust fund to be
known as the ``Health Insurance Exchange Trust Fund'' (in this section
referred to as the ``Trust Fund''), consisting of such amounts as may
be appropriated or credited to the Trust Fund under this section or any
other provision of law.
(b) Payments From Trust Fund.--The Commissioner shall pay from time
to time from the Trust Fund such amounts as the Commissioner determines
are necessary to make payments to operate the Health Insurance
Exchange, including payments under subtitle C (relating to
affordability credits).
(c) Transfers to Trust Fund.--
(1) Dedicated payments.--There is hereby appropriated to the
Trust Fund amounts equivalent to the following:
(A) Taxes on individuals not obtaining acceptable
coverage.--The amounts received in the Treasury under
section 59B of the Internal Revenue Code of 1986
(relating to requirement of health insurance coverage
for individuals).
(B) Employment taxes on employers not providing
acceptable coverage.--The amounts received in the
Treasury under section 3111(c) of the Internal Revenue
Code of 1986 (relating to employers electing to not
provide health benefits).
(C) Excise tax on failures to meet certain health
coverage requirements.--The amounts received in the
Treasury under section 4980H(b) (relating to excise tax
with respect to failure to meet health coverage
participation requirements).
(2) Appropriations to cover government contributions.--There
are hereby appropriated, out of any moneys in the Treasury not
otherwise appropriated, to the Trust Fund, an amount equivalent
to the amount of payments made from the Trust Fund under
subsection (b) plus such amounts as are necessary reduced by
the amounts deposited under paragraph (1).
(d) Application of Certain Rules.--Rules similar to the rules of
subchapter B of chapter 98 of the Internal Revenue Code of 1986 shall
apply with respect to the Trust Fund.
SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH INSURANCE EXCHANGES.
(a) In General.--If--
(1) a State (or group of States, subject to the approval of
the Commissioner) applies to the Commissioner for approval of a
State-based Health Insurance Exchange to operate in the State
(or group of States); and
(2) the Commissioner approves such State-based Health
Insurance Exchange,
then, subject to subsections (c) and (d), the State-based Health
Insurance Exchange shall operate, instead of the Health Insurance
Exchange, with respect to such State (or group of States). The
Commissioner shall approve a State-based Health Insurance Exchange if
it meets the requirements for approval under subsection (b).
(b) Requirements for Approval.--The Commissioner may not approve a
State-based Health Insurance Exchange under this section unless the
following requirements are met:
(1) The State-based Health Insurance Exchange must
demonstrate the capacity to and provide assurances satisfactory
to the Commissioner that the State-based Health Insurance
Exchange will carry out the functions specified for the Health
Insurance Exchange in the State (or States) involved,
including--
(A) negotiating and contracting with QHBP offering
entities for the offering of Exchange-participating
health benefits plan, which satisfy the standards and
requirements of this title and title I;
(B) enrolling Exchange-eligible individuals and
employers in such State in such plans;
(C) the establishment of sufficient local offices to
meet the needs of Exchange-eligible individuals and
employers;
(D) administering affordability credits under
subtitle B using the same methodologies (and at least
the same income verification methods) as would
otherwise apply under such subtitle and at a cost to
the Federal Government which does exceed the cost to
the Federal Government if this section did not apply;
and
(E) enforcement activities consistent with federal
requirements.
(2) There is no more than one Health Insurance Exchange
operating with respect to any one State.
(3) The State provides assurances satisfactory to the
Commissioner that approval of such an Exchange will not result
in any net increase in expenditures to the Federal Government.
(4) The State provides for reporting of such information as
the Commissioner determines and assurances satisfactory to the
Commissioner that it will vigorously enforce violations of
applicable requirements.
(5) Such other requirements as the Commissioner may specify.
(c) Ceasing Operation.--
(1) In general.--A State-based Health Insurance Exchange may,
at the option of each State involved, and only after providing
timely and reasonable notice to the Commissioner, cease
operation as such an Exchange, in which case the Health
Insurance Exchange shall operate, instead of such State-based
Health Insurance Exchange, with respect to such State (or
States).
(2) Termination; health insurance exchange resumption of
functions.--The Commissioner may terminate the approval (for
some or all functions) of a State-based Health Insurance
Exchange under this section if the Commissioner determines that
such Exchange no longer meets the requirements of subsection
(b) or is no longer capable of carrying out such functions in
accordance with the requirements of this subtitle. In lieu of
terminating such approval, the Commissioner may temporarily
assume some or all functions of the State-based Health
Insurance Exchange until such time as the Commissioner
determines the State-based Health Insurance Exchange meets such
requirements of subsection (b) and is capable of carrying out
such functions in accordance with the requirements of this
subtitle.
(3) Effectiveness.--The ceasing or termination of a State-
based Health Insurance Exchange under this subsection shall be
effective in such time and manner as the Commissioner shall
specify.
(d) Retention of Authority.--
(1) Authority retained.--Enforcement authorities of the
Commissioner shall be retained by the Commissioner.
(2) Discretion to retain additional authority.--The
Commissioner may specify functions of the Health Insurance
Exchange that--
(A) may not be performed by a State-based Health
Insurance Exchange under this section; or
(B) may be performed by the Commissioner and by such
a State-based Health Insurance Exchange.
(e) References.--In the case of a State-based Health Insurance
Exchange, except as the Commissioner may otherwise specify under
subsection (d), any references in this subtitle to the Health Insurance
Exchange or to the Commissioner in the area in which the State-based
Health Insurance Exchange operates shall be deemed a reference to the
State-based Health Insurance Exchange and the head of such Exchange,
respectively.
(f) Funding.--In the case of a State-based Health Insurance Exchange,
there shall be assistance provided for the operation of such Exchange
in the form of a matching grant with a State share of expenditures
required.
SEC. 209. PARTICIPATION OF SMALL EMPLOYER BENEFIT ARRANGEMENTS.
(a) In General.--The Commissioner may enter into contracts with small
employer benefit arrangements to provide consumer information,
outreach, and assistance in the enrollment of small employers (and
their employees) who are members of such an arrangement under Exchange
participating health benefits plans.
(b) Small Employer Benefit Arrangement Defined.--In this section, the
term ``small employer benefit arrangement'' means a not-for-profit
agricultural or other cooperative that--
(1) consists solely of its members and is operated for the
primary purpose of providing affordable employee benefits to
its members;
(2) only has as members small employers in the same industry
or line of business;
(3) has no member that has more than a 5 percent voting
interest in the cooperative; and
(4) is governed by a board of directors elected by its
members.
Subtitle B--Public Health Insurance Option
SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A PUBLIC HEALTH INSURANCE
OPTION AS AN EXCHANGE-QUALIFIED HEALTH BENEFITS
PLAN.
(a) Establishment.--For years beginning with Y1, the Secretary of
Health and Human Services (in this subtitle referred to as the
``Secretary'') shall provide for the offering of an Exchange-
participating health benefits plan (in this division referred to as the
``public health insurance option'') that ensures choice, competition,
and stability of affordable, high quality coverage throughout the
United States in accordance with this subtitle. In designing the
option, the Secretary's primary responsibility is to create a low-cost
plan without comprimising quality or access to care.
(b) Offering as an Exchange-participating Health Benefits Plan.--
(1) Exclusive to the exchange.--The public health insurance
option shall only be made available through the Health
Insurance Exchange.
(2) Ensuring a level playing field.--Consistent with this
subtitle, the public health insurance option shall comply with
requirements that are applicable under this title to an
Exchange-participating health benefits plan, including
requirements related to benefits, benefit levels, provider
networks, notices, consumer protections, and cost sharing.
(3) Provision of benefit levels.--The public health insurance
option--
(A) shall offer basic, enhanced, and premium plans;
and
(B) may offer premium-plus plans.
(c) Administrative Contracting.--The Secretary may enter into
contracts for the purpose of performing administrative functions
(including functions described in subsection (a)(4) of section 1874A of
the Social Security Act) with respect to the public health insurance
option in the same manner as the Secretary may enter into contracts
under subsection (a)(1) of such section. The Secretary has the same
authority with respect to the public health insurance option as the
Secretary has under subsections (a)(1) and (b) of section 1874A of the
Social Security Act with respect to title XVIII of such Act. Contracts
under this subsection shall not involve the transfer of insurance risk
to such entity.
(d) Ombudsman.--The Secretary shall establish an office of the
ombudsman for the public health insurance option which shall have
duties with respect to the public health insurance option similar to
the duties of the Medicare Beneficiary Ombudsman under section
1808(c)(2) of the Social Security Act.
(e) Data Collection.--The Secretary shall collect such data as may be
required to establish premiums and payment rates for the public health
insurance option and for other purposes under this subtitle, including
to improve quality and to reduce disparities in health and health care
based on race, ethnicity, primary language, sex, sexual orientation,
gender identity, disability, socioeconomic status, rural, urban, or
other geographic setting, and any other population or subpopulation as
determined appropriate by the Secretary, but only if the data
collection is conducted on a voluntary basis and consistent with the
standards, including privacy protections, established pursuant to
section 1709 of the Public Health Service Act.
(f) Treatment of Public Health Insurance Option.--With respect to the
public health insurance option, the Secretary shall be treated as a
QHBP offering entity offering an Exchange-participating health benefits
plan.
(g) Access to Federal Courts.--The provisions of Medicare (and
related provisions of title II of the Social Security Act) relating to
access of Medicare beneficiaries to Federal courts for the enforcement
of rights under Medicare, including with respect to amounts in
controversy, shall apply to the public health insurance option and
individuals enrolled under such option under this title in the same
manner as such provisions apply to Medicare and Medicare beneficiaries.
SEC. 222. PREMIUMS AND FINANCING.
(a) Establishment of Premiums.--
(1) In general.--The Secretary shall establish
geographically-adjusted premium rates for the public health
insurance option in a manner--
(A) that complies with the premium rules established
by the Commissioner under section 113 for Exchange-
participating health benefit plans; and
(B) at a level sufficient to fully finance the costs
of--
(i) health benefits provided by the public
health insurance option; and
(ii) administrative costs related to
operating the public health insurance option.
(2) Contingency margin.--In establishing premium rates under
paragraph (1), the Secretary shall include an appropriate
amount for a contingency margin.
(b) Account.--
(1) Establishment.--There is established in the Treasury of
the United States an Account for the receipts and disbursements
attributable to the operation of the public health insurance
option, including the start-up funding under paragraph (2).
Section 1854(g) of the Social Security Act shall apply to
receipts described in the previous sentence in the same manner
as such section applies to payments or premiums described in
such section.
(2) Start-up funding.--
(A) In general.--In order to provide for the
establishment of the public health insurance option
there is hereby appropriated to the Secretary, out of
any funds in the Treasury not otherwise appropriated,
$2,000,000,000. In order to provide for initial claims
reserves before the collection of premiums, there is
hereby appropriated to the Secretary, out of any funds
in the Treasury not otherwise appropriated, such sums
as necessary to cover 90 days worth of claims reserves
based on projected enrollment.
(B) Amortization of start-up funding.--The Secretary
shall provide for the repayment of the startup funding
provided under subparagraph (A) to the Treasury in an
amortized manner over the 10-year period beginning with
Y1.
(C) Limitation on funding.--Nothing in this section
shall be construed as authorizing any additional
appropriations to the Account, other than such amounts
as are otherwise provided with respect to other
Exchange-participating health benefits plans.
SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.
(a) Rates Established by Secretary.--
(1) In general.--The Secretary shall establish payment rates
for the public health insurance option for services and health
care providers consistent with this section and may change such
payment rates in accordance with section 224.
(2) Initial payment rules.--
(A) In general.--Except as provided in subparagraph
(B) and subsection (b)(1), during Y1, Y2, and Y3, the
Secretary shall base the payment rates under this
section for services and providers described in
paragraph (1) on the payment rates for similar services
and providers under parts A and B of Medicare.
(B) Exceptions.--
(i) Practitioners' services.--Payment rates
for practitioners' services otherwise
established under the fee schedule under
section 1848 of the Social Security Act shall
be applied without regard to the provisions
under subsection (f) of such section and the
update under subsection (d)(4) under such
section for a year as applied under this
paragraph shall be not less than 1 percent.
(ii) Adjustments.--The Secretary may
determine the extent to which Medicare
adjustments applicable to base payment rates
under parts A and B of Medicare shall apply
under this subtitle.
(3) For new services.--The Secretary shall modify payment
rates described in paragraph (2) in order to accommodate
payments for services, such as well-child visits, that are not
otherwise covered under Medicare.
(4) Prescription drugs.--Payment rates under this section for
prescription drugs that are not paid for under part A or part B
of Medicare shall be at rates negotiated by the Secretary.
(b) Incentives for Participating Providers.--
(1) Initial incentive period.--
(A) In general.--The Secretary shall provide, in the
case of services described in subparagraph (B)
furnished during Y1, Y2, and Y3, for payment rates that
are 5 percent greater than the rates established under
subsection (a).
(B) Services described.--The services described in
this subparagraph are items and professional services,
under the public health insurance option by a physician
or other health care practitioner who participates in
both Medicare and the public health insurance option.
(C) Special rules.--A pediatrician and any other
health care practitioner who is a type of practitioner
that does not typically participate in Medicare (as
determined by the Secretary) shall also be eligible for
the increased payment rates under subparagraph (A).
(2) Subsequent periods.-- Beginning with Y4 and for
subsequent years, the Secretary shall continue to use an
administrative process to set such rates in order to promote
payment accuracy, to ensure adequate beneficiary access to
providers, and to promote affordablility and the efficient
delivery of medical care consistent with section 221(a). Such
rates shall not be set at levels expected to increase overall
medical costs under the option beyond what would be expected if
the process under subsection (a)(2) and paragraph (1) of this
subsection were continued.
(3) Establishment of a provider network.--Health care
providers participating under Medicare are participating
providers in the public health insurance option unless they opt
out in a process established by the Secretary.
(c) Administrative Process for Setting Rates.--Chapter 5 of title 5,
United States Code shall apply to the process for the initial
establishment of payment rates under this section but not to the
specific methodology for establishing such rates or the calculation of
such rates.
(d) Construction.--Nothing in this subtitle shall be construed as
limiting the Secretary's authority to correct for payments that are
excessive or deficient, taking into account the provisions of section
221(a) and the amounts paid for similar health care providers and
services under other Exchange-participating health benefits plans.
(e) Construction.--Nothing in this subtitle shall be construed as
affecting the authority of the Secretary to establish payment rates,
including payments to provide for the more efficient delivery of
services, such as the initiatives provided for under section 224.
(f) Limitations on Review.--There shall be no administrative or
judicial review of a payment rate or methodology established under this
section or under section 224.
SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIVERY SYSTEM REFORM.
(a) In General.--For plan years beginning with Y1, the Secretary may
utilize innovative payment mechanisms and policies to determine
payments for items and services under the public health insurance
option. The payment mechanisms and policies under this section may
include patient-centered medical home and other care management
payments, accountable care organizations, value-based purchasing,
bundling of services, differential payment rates, performance or
utilization based payments, partial capitation, and direct contracting
with providers.
(b) Requirements for Innovative Payments.--The Secretary shall design
and implement the payment mechanisms and policies under this section in
a manner that--
(1) seeks to--
(A) improve health outcomes;
(B) reduce health disparities (including racial,
ethnic, and other disparities);
(C) provide efficent and affordable care;
(D) address geographic variation in the provision of
health services; or
(E) prevent or manage chronic illness; and
(2) promotes care that is integrated, patient-centered,
quality, and efficient.
(c) Encouraging the Use of High Value Services.--To the extent
allowed by the benefit standards applied to all Exchange-participating
health benefits plans, the public health insurance option may modify
cost sharing and payment rates to encourage the use of services that
promote health and value.
(d) Non-uniformity Permitted.--Nothing in this subtitle shall prevent
the Secretary from varying payments based on different payment
structure models (such as accountable care organizations and medical
homes) under the public health insurance option for different
geographic areas.
SEC. 225. PROVIDER PARTICIPATION.
(a) In General.--The Secretary shall establish conditions of
participation for health care providers under the public health
insurance option.
(b) Licensure or Certification.--The Secretary shall not allow a
health care provider to participate in the public health insurance
option unless such provider is appropriately licensed, certified, or
otherwise permitted to practice under State law.
(c) Payment Terms for Providers.--
(1) Physicians.--The Secretary shall provide for the annual
participation of physicians under the public health insurance
option, for which payment may be made for services furnished
during the year, in one of 2 classes:
(A) Preferred physicians.--Those physicians who agree
to accept the payment rate established under section
223 (without regard to cost-sharing) as the payment in
full.
(B) Participating, non-preferred physicians.--Those
physicians who agree not to impose charges (in relation
to the payment rate described in section 223 for such
physicians) that exceed the ratio permitted under
section 1848(g)(2)(C) of the Social Security Act.
(2) Other providers.--The Secretary shall provide for the
participation (on an annual or other basis specified by the
Secretary) of health care providers (other than physicians)
under the public health insurance option under which payment
shall only be available if the provider agrees to accept the
payment rate established under section 223 (without regard to
cost-sharing) as the payment in full.
(d) Exclusion of Certain Providers.--The Secretary shall exclude from
participation under the public health insurance option a health care
provider that is excluded from participation in a Federal health care
program (as defined in section 1128B(f) of the Social Security Act).
SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVISIONS.
Provisions of law (other than criminal law provisions) identified by
the Secretary by regulation, in consultation with the Inspector General
of the Department of Health and Human Services, that impose sanctions
with respect to waste, fraud, and abuse under Medicare, such as the
False Claims Act (31 U.S.C. 3729 et seq.), shall also apply to the
public health insurance option.
SEC. 227. SENSE OF THE HOUSE REGARDING ENROLLMENT OF MEMBERS IN THE
PUBLIC OPTION.
It is the sense of the House of Representatives that Members who vote
in favor of the establishment of a public, Federal Government run
health insurance option, and senior members of the President's
administration, are urged to forgo their right to participate in the
Federal Employees Health Benefits Program (FEHBP) and agree to enroll
under that public option.
Subtitle C--Individual Affordability Credits
SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EXCHANGE.
(a) In General.--Subject to the succeeding provisions of this
subtitle, in the case of an affordable credit eligible individual
enrolled in an Exchange-participating health benefits plan--
(1) the individual shall be eligible for, in accordance with
this subtitle, affordability credits consisting of--
(A) an affordability premium credit under section 243
to be applied against the premium for the Exchange-
participating health benefits plan in which the
individual is enrolled; and
(B) an affordability cost-sharing credit under
section 244 to be applied as a reduction of the cost-
sharing otherwise applicable to such plan; and
(2) the Commissioner shall pay the QHBP offering entity that
offers such plan from the Health Insurance Exchange Trust Fund
the aggregate amount of affordability credits for all
affordable credit eligible individuals enrolled in such plan.
(b) Application.--
(1) In general.--An Exchange eligible individual may apply to
the Commissioner through the Health Insurance Exchange or
through another entity under an arrangement made with the
Commissioner, in a form and manner specified by the
Commissioner. The Commissioner through the Health Insurance
Exchange or through another public entity under an arrangement
made with the Commissioner shall make a determination as to
eligibility of an individual for affordability credits under
this subtitle.The Commissioner shall establish a process
whereby, on the basis of information otherwise available,
individuals may be deemed to be affordable credit eligible
individuals. In carrying this subtitle, the Commissioner shall
establish effective methods that ensure that individuals with
limited English proficiency are able to apply for affordability
credits.
(2) Use of state medicaid agencies.--If the Commissioner
determines that a State Medicaid agency has the capacity to
make a determination of eligibility for affordability credits
under this subtitle and under the same standards as used by the
Commissioner, under the Medicaid memorandum of understanding
(as defined in section 205(c)(4))--
(A) the State Medicaid agency is authorized to
conduct such determinations for any Exchange-eligible
individual who requests such a determination; and
(B) the Commissioner shall reimburse the State
Medicaid agency for the costs of conducting such
determinations.
(3) Medicaid screen and enroll obligation.--In the case of an
application made under paragraph (1), there shall be a
determination of whether the individual is a Medicaid-eligible
individual. If the individual is determined to be so eligible,
the Commissioner, through the Medicaid memorandum of
understanding, shall provide for the enrollment of the
individual under the State Medicaid plan in accordance with the
Medicaid memorandum of understanding. In the case of such an
enrollment, the State shall provide for the same periodic
redetermination of eligibility under Medicaid as would
otherwise apply if the individual had directly applied for
medical assistance to the State Medicaid agency.
(c) Use of Affordability Credits.--
(1) In general.--In Y1 and Y2 an affordable credit eligible
individual may use an affordability credit only with respect to
a basic plan.
(2) Flexibility in plan enrollment authorized.--Beginning
with Y3, the Commissioner shall establish a process to allow an
affordability credit to be used for enrollees in enhanced or
premium plans. In the case of an affordable credit eligible
individual who enrolls in an enhanced or premium plan, the
individual shall be responsible for any difference between the
premium for such plan and the affordable credit amount
otherwise applicable if the individual had enrolled in a basic
plan.
(d) Access to Data.--In carrying out this subtitle, the Commissioner
shall request from the Secretary of the Treasury consistent with
section 6103 of the Internal Revenue Code of 1986 such information as
may be required to carry out this subtitle.
(e) No Cash Rebates.--In no case shall an affordable credit eligible
individual receive any cash payment as a result of the application of
this subtitle.
SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.
(a) Definition.--
(1) In general.--For purposes of this division, the term
``affordable credit eligible individual'' means, subject to
subsection (b), an individual who is lawfully present in a
State in the United States (other than as a nonimmigrant
described in a subparagraph (excluding subparagraphs (K), (T),
(U), and (V)) of section 101(a)(15) of the Immigration and
Nationality Act)--
(A) who is enrolled under an Exchange-participating
health benefits plan and is not enrolled under such
plan as an employee (or dependent of an employee)
through an employer qualified health benefits plan that
meets the requirements of section 312;
(B) with family income below 400 percent of the
Federal poverty level for a family of the size
involved; and
(C) who is not a Medicaid eligible individual, other
than an individual described in section 202(d)(3) or an
individual during a transition period under section
202(d)(4)(B)(ii).
(2) Treatment of family.--Except as the Commissioner may
otherwise provide, members of the same family who are
affordable credit eligible individuals shall be treated as a
single affordable credit individual eligible for the applicable
credit for such a family under this subtitle.
(b) Limitations on Employee and Dependent Disqualification.--
(1) In general.--Subject to paragraph (2), the term
``affordable credit eligible individual'' does not include a
full-time employee of an employer if the employer offers the
employee coverage (for the employee and dependents) as a full-
time employee under a group health plan if the coverage and
employer contribution under the plan meet the requirements of
section 312.
(2) Exceptions.--
(A) For certain family circumstances.--The
Commissioner shall establish such exceptions and
special rules in the case described in paragraph (1) as
may be appropriate in the case of a divorced or
separated individual or such a dependent of an employee
who would otherwise be an affordable credit eligible
individual.
(B) For unaffordable employer coverage.--For years
beginning with Y2, in the case of full-time employees
for which the cost of the employee premium (plus, to
the extent specified by the Commissioner, out-of-pocket
cost-sharing for such year or the preceding year) for
coverage under a group health plan would exceed 11
percent of current family income (determined by the
Commissioner on the basis of verifiable documentation
and without regard to section 245), paragraph (1) shall
not apply.
(c) Income Defined.--
(1) In general.--In this title, the term ``income'' means
modified adjusted gross income (as defined in section 59B of
the Internal Revenue Code of 1986).
(2) Study of income disregards.--The Commissioner shall
conduct a study that examines the application of income
disregards for purposes of this subtitle. Not later than the
first day of Y2, the Commissioner shall submit to Congress a
report on such study and shall include such recommendations as
the Commissioner determines appropriate.
(d) Clarification of Treatment of Affordability Credits.--
Affordabilty credits under this subtitle shall not be treated, for
purposes of title IV of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996, to be a benefit provided under
section 403 of such title.
SEC. 243. AFFORDABLE PREMIUM CREDIT.
(a) In General.--The affordability premium credit under this section
for an affordable credit eligible individual enrolled in an Exchange-
participating health benefits plan is in an amount equal to the amount
(if any) by which the premium for the plan (or, if less, the reference
premium amount specified in subsection (c)), exceeds the affordable
premium amount specified in subsection (b) for the individual.
(b) Affordable Premium Amount.--
(1) In general.--The affordable premium amount specified in
this subsection for an individual for monthly premium in a plan
year shall be equal to \1/12\ of the product of--
(A) the premium percentage limit specified in
paragraph (2) for the individual based upon the
individual's family income for the plan year; and
(B) the individual's family income for such plan
year.
(2) Premium percentage limits based on table.--The
Commissioner shall establish premium percentage limits so that
for individuals whose family income is within an income tier
specified in the table in subsection (d) such percentage limits
shall increase, on a sliding scale in a linear manner, from the
initial premium percentage to the final premium percentage
specified in such table for such income tier.
(c) Reference Premium Amount.--The reference premium amount specified
in this subsection for a plan year for an individual in a premium
rating area is equal to the average premium for the 3 basic plans in
the area for the plan year with the lowest premium levels. In computing
such amount the Commissioner may exclude plans with extremely limited
enrollments.
(d) Table of Premium Percentage Limits and Actuarial Value
Percentages Based on Income Tier.--
(1) In general.--For purposes of this subtitle, the table
specified in this subsection is as follows:
In the case of family income
(expressed as a percent of FPL) The initial premium The final premium The actuarial value
within the following income tier: percentage is-- percentage is-- percentage is--
133% through 150% 1.5% 3% 97%
150% through 200% 3% 5% 93%
200% through 250% 5% 7% 85%
250% through 300% 7% 9% 78%
300% through 350% 9% 10% 72%
350% through 400% 10% 11% 70%
(2) Special rules.--For purposes of applying the table under
paragraph (1)--
(A) For lowest level of income.--In the case of an
individual with income that does not exceed 133 percent
of FPL, the individual shall be considered to have
income that is 133% of FPL.
(B) Application of higher actuarial value percentage
at tier transition points.--If two actuarial value
percentages may be determined with respect to an
individual, the actuarial value percentage shall be the
higher of such percentages.
SEC. 244. AFFORDABILITY COST-SHARING CREDIT.
(a) In General.--The affordability cost-sharing credit under this
section for an affordable credit eligible individual enrolled in an
Exchange-participating health benefits plan is in the form of the cost-
sharing reduction described in subsection (b) provided under this
section for the income tier in which the individual is classified based
on the individual's family income.
(b) Cost-sharing Reductions.--The Commissioner shall specify a
reduction in cost-sharing amounts and the annual limitation on cost-
sharing specified in section 122(c)(2)(B) under a basic plan for each
income tier specified in the table under section 243(d), with respect
to a year, in a manner so that, as estimated by the Commissioner, the
actuarial value of the coverage with such reduced cost-sharing amounts
(and the reduced annual cost-sharing limit) is equal to the actuarial
value percentage (specified in the table under section 243(d) for the
income tier involved) of the full actuarial value if there were no
cost-sharing imposed under the plan.
(c) Determination and Payment of Cost-sharing Affordability Credit.--
In the case of an affordable credit eligible individual in a tier
enrolled in an Exchange-participating health benefits plan offered by a
QHBP offering entity, the Commissioner shall provide for payment to the
offering entity of an amount equivalent to the increased actuarial
value of the benefits under the plan provided under section
203(c)(2)(B) resulting from the reduction in cost-sharing described in
subsection (b).
SEC. 245. INCOME DETERMINATIONS.
(a) In General.--In applying this subtitle for an affordability
credit for an individual for a plan year, the individual's income shall
be the income (as defined in section 242(c)) for the individual for the
most recent taxable year (as determined in accordance with rules of the
Commissioner). The Federal poverty level applied shall be such level in
effect as of the date of the application.
(b) Program Integrity; Income Verification Procedures.--
(1) Program integrity.--The Commissioner shall take such
steps as may be appropriate to ensure the accuracy of
determinations and redeterminations under this subtitle.
(2) Income verification.--
(A) In general.--Upon an initial application of an
individual for an affordability credit under this
subtitle (or in applying section 242(b)) or upon an
application for a change in the affordability credit
based upon a significant change in family income
described in subparagraph (A)--
(i) the Commissioner shall request from the
Secretary of the Treasury the disclosure to the
Commissioner of such information as may be
permitted to verify the information contained
in such application; and
(ii) the Commissioner shall use the
information so disclosed to verify such
information.
(B) Alternative procedures.--The Commissioner shall
establish procedures for the verification of income for
purposes of this subtitle if no income tax return is
available for the most recent completed tax year.
(c) Special Rules.--
(1) Changes in income as a percent of fpl.--In the case that
an individual's income (expressed as a percentage of the
Federal poverty level for a family of the size involved) for a
plan year is expected (in a manner specified by the
Commissioner) to be significantly different from the income (as
so expressed) used under subsection (a), the Commissioner shall
establish rules requiring an individual to report, consistent
with the mechanism established under paragraph (2), significant
changes in such income (including a significant change in
family composition) to the Commissioner and requiring the
substitution of such income for the income otherwise
applicable.
(2) Reporting of significant changes in income.--The
Commissioner shall establish rules under which an individual
determined to be an affordable credit eligible individual would
be required to inform the Commissioner when there is a
significant change in the family income of the individual
(expressed as a percentage of the FPL for a family of the size
involved) and of the information regarding such change. Such
mechanism shall provide for guidelines that specify the
circumstances that qualify as a significant change, the
verifiable information required to document such a change, and
the process for submission of such information. If the
Commissioner receives new information from an individual
regarding the family income of the individual,the Commissioner
shall provide for a redetermination of the individual's
eligibility to be an affordable credit eligible individual.
(3) Transition for chip.--In the case of a child described in
section 202(d)(2), the Commissioner shall establish rules under
which the family income of the child is deemed to be no greater
than the family income of the child as most recently determined
before Y1 by the State under title XXI of the Social Security
Act.
(4) Study of geographic variation in application of fpl.--The
Commissioner shall examine the feasibility and implication of
adjusting the application of the Federal poverty level under
this subtitle for different geographic areas so as to reflect
the variations in cost-of-living among different areas within
the United States. If the Commissioner determines that an
adjustment is feasible, the study should include a methodology
to make such an adjustment. Not later than the first day of Y2,
the Commissioner shall submit to Congress a report on such
study and shall include such recommendations as the
Commissioner determines appropriate.
(d) Penalties for Misrepresentation.--In the case of an individual
intentionally misrepresents family income or the individual fails
(without regard to intent) to disclose to the Commissioner a
significant change in family income under subsection (c) in a manner
that results in the individual becoming an affordable credit eligible
individual when the individual is not or in the amount of the
affordability credit exceeding the correct amount--
(1) the individual is liable for repayment of the amount of
the improper affordability credit; ;and
(2) in the case of such an intentional misrepresentation or
other egregious circumstances specified by the Commissioner,
the Commissioner may impose an additional penalty.
SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.
Nothing in this subtitle shall allow Federal payments for
affordability credits on behalf of individuals who are not lawfully
present in the United States.
Subtitle D--State Innovation
SEC. 251. WAIVER OF ERISA LIMITATION; APPLICATION INSTEAD OF STATE
SINGLE PAYER SYSTEM.
(a) In General.--A State may request from the Secretary, and the
Secretary must grant except under extraordinary circumstances, a waiver
of application of section 514 of the Employee Retirement Income
Security Act of 1974 with respect to a state single payer system
enacted into law by such State that would be structured and operate in
a manner consistent with this subtitle. The Secretary shall provide for
the revocation of any waiver granted under this section upon a
determination made by the Secretary that the requirements of the
preceding sentence are no longer being met.
(b) Effect of Waiver.--During any period for which a waiver under
subsection (a) is in effect--
(1) the provisions of section 514 of the Employee Retirement
Income Security Act of 1974 shall not apply with respect to the
State single payer system; and
(2) the State single payer system shall operate in the State
instead of the public health insurance option or the National
Health Exchange.
(c) Construction.--Nothing in this subtitle shall be construed to
limit or otherwise affect the transfer and allocation under this Act of
funds to States with single payer systems.
SEC. 252. REQUIREMENTS.
A State single payer system shall--
(1) ) provide benefits that meet or exceed the standards of
coverage and quality of care set forth in this Act; and
(2) ensure that the cost to the Federal Government resulting
from the waiver granted under section 261 is neither
substantially greater nor substantially less than would have
been the case in the absence of such waiver, except that:
(A) the State may seek and benefit from planning and
start-up funds with respect to the system; and
(B) nothing in this paragraph shall be construed to
preclude allowance for normal variations in population
demographics, health status, and other factors
exogenous to the health care system that may affect
differences in costs.
SEC. 253. DEFINITIONS.
(a) State Single Payer System.--The term ``State single payer
system'' means, in connection with a State, a non-profit program of the
State for providing health care--
(1) in which a single agency of the State is responsible for
financing health care benefits for all residents of the State
and for the administration or supervision of the administration
of the program;
(2) under which private insurance duplicating the benefits
provided in the single payer program is prohibited;
(3) which provides comprehensive health benefits to all
residents of the State, and provides measures to assure free
choice of providers for covered services, to promote quality,
and to help resolve complaints and disputes between consumers
and providers; and
(4) under which participation by health maintenance
organizations is limited to non-profit health maintenance
organizations that own their own delivery facilities and employ
physicians on salary, and funding is limited to services that
the health maintenance organizations actually deliver; and
(5) which may be maintained by such State together one or
more other States in a geographic region.
(b) Secretary.--The term ``Secretary'' means the Secretary of Labor,
acting in consultation with the Secretary of Health and Human Services.
TITLE III--SHARED RESPONSIBILITY
Subtitle A--Individual Responsibility
SEC. 301. INDIVIDUAL RESPONSIBILITY.
For an individual's responsibility to obtain acceptable coverage, see
section 59B of the Internal Revenue Code of 1986 (as added by section
401 of this Act).
Subtitle B--Employer Responsibility
PART 1--HEALTH COVERAGE PARTICIPATION REQUIREMENTS
SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
(a) In General.--An employer meets the requirements of this section
if such employer does all of the following:
(1) Offer of coverage.--The employer offers each employee
individual and family coverage under a qualified health
benefits plan (or under a current employment-based health plan
(within the meaning of section 102(b))) in accordance with
section 312.
(2) Contribution towards coverage.--If an employee accepts
such offer of coverage, the employer makes timely contributions
towards such coverage in accordance with section 312.
(3) Contribution in lieu of coverage.--Beginning with Y2, if
an employee declines such offer but otherwise obtains coverage
in an Exchange-participating health benefits plan (other than
by reason of being covered by family coverage as a spouse or
dependent of the primary insured), the employer shall make a
timely contribution to the Health Insurance Exchange with
respect to each such employee in accordance with section 313.
(b) Hardship Exemption.--Notwithstanding any other provision of this
part, an employer may, in a form and manner which shall be prescribed
by the Secretary, apply to the Secretary for a waiver from the health
coverage participation requirements of this part for any 2-year period.
The Secretary shall grant the waiver within 30 days after submission of
the application if the application reasonably demonstrates to the
Secretary that meeting the requirements of this part would result in
job losses that would negatively impact the employer or the community
in which the employer is located.
SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARDS EMPLOYEE AND
DEPENDENT COVERAGE.
(a) In General.--An employer meets the requirements of this section
with respect to an employee if the following requirements are met:
(1) Offering of coverage.--The employer offers the coverage
described in section 311(1) either through an Exchange-
participating health benefits plan or other than through such a
plan.
(2) Employer required contribution.--The employer timely pays
to the issuer of such coverage an amount not less than the
employer required contribution specified in subsection (b) for
such coverage.
(3) Provision of information.--The employer provides the
Health Choices Commissioner, the Secretary of Labor, the
Secretary of Health and Human Services, and the Secretary of
the Treasury, as applicable, with such information as the
Commissioner may require to ascertain compliance with the
requirements of this section.
(4) Autoenrollment of employees.--The employer provides for
autoenrollment of the employee in accordance with subsection
(c).
(b) Reduction of Employee Premiums Through Minimum Employer
Contribution.--
(1) Full-time employees.--The minimum employer contribution
described in this subsection for coverage of a full-time
employee (and, if any, the employee's spouse and qualifying
children (as defined in section 152(c) of the Internal Revenue
Code of 1986) under a qualified health benefits plan (or
current employment-based health plan) is equal to--
(A) in case of individual coverage, not less than
72.5 percent of the applicable premium (as defined in
section 4980B(f)(4) of such Code, subject to paragraph
(2)) of the lowest cost plan offered by the employer
that is a qualified health benefits plan (or is such
current employment-based health plan); and
(B) in the case of family coverage which includes
coverage of such spouse and children, not less 65
percent of such applicable premium of such lowest cost
plan.
(2) Applicable premium for exchange coverage.--In this
subtitle, the amount of the applicable premium of the lowest
cost plan with respect to coverage of an employee under an
Exchange-participating health benefits plan is the reference
premium amount under section 243(c) for individual coverage
(or, if elected, family coverage) for the premium rating area
in which the individual or family resides.
(3) Minimum employer contribution for employees other than
full-time employees.--In the case of coverage for an employee
who is not a full-time employee, the amount of the minimum
employer contribution under this subsection shall be a
proportion (as determined in accordance with rules of the
Health Choices Commissioner, the Secretary of Labor, the
Secretary of Health and Human Services, and the Secretary of
the Treasury, as applicable) of the minimum employer
contribution under this subsection with respect to a full-time
employee that reflects the proportion of--
(A) the average weekly hours of employment of the
employee by the employer, to
(B) the minimum weekly hours specified by the
Commissioner for an employee to be a full-time
employee.
(4) Salary reductions not treated as employer
contributions.--For purposes of this section, any contribution
on behalf of an employee with respect to which there is a
corresponding reduction in the compensation of the employee
shall not be treated as an amount paid by the employer.
(c) Automatic Enrollment for Employer Sponsored Health Benefits.--
(1) In general.--The requirement of this subsection with
respect to an employer and an employee is that the employer
automatically enroll suchs employee into the employment-based
health benefits plan for individual coverage under the plan
option with the lowest applicable employee premium.
(2) Opt-out.--In no case may an employer automatically enroll
an employee in a plan under paragraph (1) if such employee
makes an affirmative election to opt out of such plan or to
elect coverage under an employment-based health benefits plan
offered by such employer. An employer shall provide an employee
with a 30-day period to make such an affirmative election
before the employer may automatically enroll the employee in
such a plan.
(3) Notice requirements.--
(A) In general.--Each employer described in paragraph
(1) who automatically enrolls an employee into a plan
as described in such paragraph shall provide the
employees, within a reasonable period before the
beginning of each plan year (or, in the case of new
employees, within a reasonable period before the end of
the enrollment period for such a new employee), written
notice of the employees' rights and obligations
relating to the automatic enrollment requirement under
such paragraph. Such notice must be comprehensive and
understood by the average employee to whom the
automatic enrollment requirement applies.
(B) Inclusion of specific information.--The written
notice under subparagraph (A) must explain an
employee's right to opt out of being automatically
enrolled in a plan and in the case that more than one
level of benefits or employee premium level is offered
by the employer involved, the notice must explain which
level of benefits and employee premium level the
employee will be automatically enrolled in the absence
of an affirmative election by the employee.
SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE.
(a) In General.--A contribution is made in accordance with this
section with respect to an employee if such contribution is equal to an
amount equal to 8 percent of the average wages paid by the employer
during the period of enrollment (determined by taking into account all
employees of the employer and in such manner as the Commissioner
provides, including rules providing for the appropriate aggregation of
related employers). Any such contribution--
(1) shall be paid to the Health Choices Commissioner for
deposit into the Health Insurance Exchange Trust Fund, and
(2) shall not be applied against the premium of the employee
under the Exchange-participating health benefits plan in which
the employee is enrolled.
(b) Special Rules for Small Employers.--
(1) In general.--In the case of any employer who is a small
employer for any calendar year, subsection (a) shall be applied
by substituting the applicable percentage determined in
accordance with the following table for ``8 percent'':
If the annual payroll of such employer The applicable percentage is:
for the preceding calendar year:
Does not exceed $250,000............. 0 percent
Exceeds $250,000, but does not exceed 2 percent
$300,000.
Exceeds $300,000, but does not exceed 4 percent
$350,000.
Exceeds $350,000, but does not exceed 6 percent
$400,000.
(2) Small employer.--For purposes of this subsection, the
term ``small employer'' means any employer for any calendar
year if the annual payroll of such employer for the preceding
calendar year does not exceed $400,000.
(3) Annual payroll.--For purposes of this paragraph, the term
``annual payroll'' means, with respect to any employer for any
calendar year, the aggregate wages paid by the employer during
such calendar year.
(4) Aggregation rules.--Related employers and predecessors
shall be treated as a single employer for purposes of this
subsection.
SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING.
The Health Choices Commissioner (in coordination with the Secretary
of Labor, the Secretary of Health and Human Services, and the Secretary
of the Treasury) shall have authority to set standards for determining
whether employers or insurers are undertaking any actions to affect the
risk pool within the Health Insurance Exchange by inducing individuals
to decline coverage under a qualified health benefits plan (or current
employment-based health plan (within the meaning of section 102(b))
offered by the employer and instead to enroll in an Exchange-
participating health benefits plan. An employer violating such
standards shall be treated as not meeting the requirements of this
section.
PART 2--SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
SEC. 321. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974.
(a) In General.--Subtitle B of title I of the Employee Retirement
Income Security Act of 1974 is amended by adding at the end the
following new part:
``PART 8--NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS
``SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH
COVERAGE PARTICIPATION REQUIREMENTS.
``(a) In General.--An employer may make an election with the
Secretary to be subject to the health coverage participation
requirements.
``(b) Time and Manner.--An election under subsection (a) may be made
at such time and in such form and manner as the Secretary may
prescribe.
``SEC. 802. TREATMENT OF COVERAGE RESULTING FROM ELECTION.
``(a) In General.--If an employer makes an election to the Secretary
under section 801--
``(1) such election shall be treated as the establishment and
maintenance of a group health plan (as defined in section
733(a)) for purposes of this title, subject to section 151 of
the America's Affordable Health Choices Act of 2009, and
``(2) the health coverage participation requirements shall be
deemed to be included as terms and conditions of such plan.
``(b) Periodic Investigations to Discover Noncompliance.--The
Secretary shall regularly audit a representative sampling of employers
and group health plans and conduct investigations and other activities
under section 504 with respect to such sampling of plans so as to
discover noncompliance with the health coverage participation
requirements in connection with such plans. The Secretary shall
communicate findings of noncompliance made by the Secretary under this
subsection to the Secretary of the Treasury and the Health Choices
Commissioner. The Secretary shall take such timely enforcement action
as appropriate to achieve compliance.
``(c) Recordkeeping.--To facilitate the audits described in
subsection (b), the Secretary shall promulgate recordkeeping
requirements for employers to account for both employees of the
employer and individuals whom the employer has not treated as employees
of the employer but with whom the employer, in the course of the trade
or business in which the employer is engaged, has engaged for the
performance of labor or services.
``SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
``For purposes of this part, the term `health coverage participation
requirements' means the requirements of part 1 of subtitle B of title
III of division A of America's Affordable Health Choices Act of 2009
(as in effect on the date of the enactment of such Act).
``SEC. 804. RULES FOR APPLYING REQUIREMENTS.
``(a) Affiliated Groups.--In the case of any employer which is part
of a group of employers who are treated as a single employer under
subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue
Code of 1986, the election under section 801 shall be made by such
employer as the Secretary may provide. Any such election, once made,
shall apply to all members of such group.
``(b) Separate Elections.--Under regulations prescribed by the
Secretary, separate elections may be made under section 801 with
respect to--
``(1) separate lines of business, and
``(2) full-time employees and employees who are not full-time
employees.
``SEC. 805. TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL
NONCOMPLIANCE.
``The Secretary may terminate the election of any employer under
section 801 if the Secretary (in coordination with the Health Choices
Commissioner) determines that such employer is in substantial
noncompliance with the health coverage participation requirements and
shall refer any such determination to the Secretary of the Treasury as
appropriate.
``SEC. 806. REGULATIONS.
``The Secretary may promulgate such regulations as may be necessary
or appropriate to carry out the provisions of this part, in accordance
with section 324(a) of the America's Affordable Health Choices Act of
2009. The Secretary may promulgate any interim final rules as the
Secretary determines are appropriate to carry out this part.''.
(b) Enforcement of Health Coverage Participation Requirements.--
Section 502 of such Act (29 U.S.C. 1132) is amended--
(1) in subsection (a)(6), by striking ``paragraph'' and all
that follows through ``subsection (c)'' and inserting
``paragraph (2), (4), (5), (6), (7), (8), (9), (10), or (11) of
subsection (c)''; and
(2) in subsection (c), by redesignating the second paragraph
(10) as paragraph (12) and by inserting after the first
paragraph (10) the following new paragraph:
``(11) Health coverage participation requirements.--
``(A) Civil penalties.--In the case of any employer
who fails (during any period with respect to which an
election under section 801(a) is in effect) to satisfy
the health coverage participation requirements with
respect to any employee, the Secretary may assess a
civil penalty against the employer of $100 for each day
in the period beginning on the date such failure first
occurs and ending on the date such failure is
corrected.
``(B) Health coverage participation requirements.--
For purposes of this paragraph, the term `health
coverage participation requirements' has the meaning
provided in section 803.
``(C) Limitations on amount of penalty.--
``(i) Penalty not to apply where failure not
discovered exercising reasonable diligence.--No
penalty shall be assessed under subparagraph
(A) with respect to any failure during any
period for which it is established to the
satisfaction of the Secretary that the employer
did not know, or exercising reasonable
diligence would not have known, that such
failure existed.
``(ii) Penalty not to apply to failures
corrected within 30 days.--No penalty shall be
assessed under subparagraph (A) with respect to
any failure if--
``(I) such failure was due to
reasonable cause and not to willful
neglect, and
``(II) such failure is corrected
during the 30-day period beginning on
the 1st date that the employer knew, or
exercising reasonable diligence would
have known, that such failure existed.
``(iii) Overall limitation for unintentional
failures.--In the case of failures which are
due to reasonable cause and not to willful
neglect, the penalty assessed under
subparagraph (A) for failures during any 1-year
period shall not exceed the amount equal to the
lesser of--
``(I) 10 percent of the aggregate
amount paid or incurred by the employer
(or predecessor employer) during the
preceding 1-year period for group
health plans, or
``(II) $500,000.
``(D) Advance notification of failure prior to
assessment.--Before a reasonable time prior to the
assessment of any penalty under this paragraph with
respect to any failure by an employer, the Secretary
shall inform the employer in writing of such failure
and shall provide the employer information regarding
efforts and procedures which may be undertaken by the
employer to correct such failure.
``(E) Coordination with excise tax.--Under
regulations prescribed in accordance with section 324
of the America's Affordable Health Choices Act of 2009,
the Secretary and the Secretary of the Treasury shall
coordinate the assessment of penalties under this
section in connection with failures to satisfy health
coverage participation requirements with the imposition
of excise taxes on such failures under section 4980H(b)
of the Internal Revenue Code of 1986 so as to avoid
duplication of penalties with respect to such failures.
``(F) Deposit of penalty collected.--Any amount of
penalty collected under this paragraph shall be
deposited as miscellaneous receipts in the Treasury of
the United States.''.
(c) Clerical Amendments.--The table of contents in section 1 of such
Act is amended by inserting after the item relating to section 734 the
following new items:
``Part 8--National Health Coverage Participation Requirements
``Sec. 801. Election of employer to be subject to national health
coverage participation requirements.
``Sec. 802. Treatment of coverage resulting from election.
``Sec. 803. Health coverage participation requirements.
``Sec. 804. Rules for applying requirements.
``Sec. 805. Termination of election in cases of substantial
noncompliance.
``Sec. 806. Regulations.''.
(d) Effective Date.--The amendments made by this section shall apply
to periods beginning after December 31, 2012.
[For sections 322 and 323, see text of bill as introduced on June 14,
2009.]
SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COVERAGE PARTICIPATION
REQUIREMENTS.
(a) Assuring Coordination.--The officers consisting of the Secretary
of Labor, the Secretary of the Treasury, the Secretary of Health and
Human Services, and the Health Choices Commissioner shall ensure,
through the execution of an interagency memorandum of understanding
among such officers, that--
(1) regulations, rulings, and interpretations issued by such
officers relating to the same matter over which two or more of
such officers have responsibility under subpart B of part 6 of
subtitle B of title I of the Employee Retirement Income
Security Act of 1974, section 4980H of the Internal Revenue
Code of 1986, and section 2793 of the Public Health Service Act
are administered so as to have the same effect at all times;
and
(2) coordination of policies relating to enforcing the same
requirements through such officers in order to have a
coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.
(b) Multiemployer Plans.--In the case of a group health plan that is
a multiemployer plan (as defined in section 3(37) of the Employee
Retirement Income Security Act of 1974), the regulations prescribed in
accordance with subsection (a) by the officers referred to in
subsection (a) shall provide for the application of the health coverage
participation requirements to the plan sponsor and contributing
sponsors of such plan.
DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS
[For division B, see text of bill as introduced on July 14, 2009.]
DIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT
SEC. 2001. TABLE OF CONTENTS; REFERENCES.
(a) Table of Contents.--The table of contents of this division is as
follows:
Sec. 2001. Table of contents; references.
[For section 2002, see text of introduced bill.]
[FOR TEXT OF TITLES I THROUGH IV, SEE TEXT OF INTRODUCED BILL.]
TITLE V--OTHER PROVISIONS
[For Subtitles A, B, and C, See Text of Introduced Bill.]
Subtitle D--Grants for Comprehensive Programs to Provide Education to
Nurses and Create a Pipeline to Nursing
[For Subtitle E, See Text of Introduced Bill.]
Sec. 2531. Establishment of grant program.
Subtitle F--Standards for Accessibility to Medical Equipment for
Individuals With Disabilities.
Sec. 2541. Access for individuals with disabilities.
Subtitle G--Other Grant Programs
Sec. 2551. Reducing student-to-school nurse ratios.
Sec. 2552. Wellness program grants.
Sec. 2553. Health professions training for diversity programs.
Subtitle H--Long-term Care and Family Caregiver Support
Sec. 2561. Long-term care and family caregiver support.
Subtitle I--Online Resources
Sec. 2571. Web site on health care labor market and related educational
and training opportunities.
Sec. 2572. Online health workforce training programs.
(b) References.--Except as otherwise specified, whenever in this
division an amendment is expressed in terms of an amendment to a
section or other provision, the reference shall be considered to be
made to a section or other provision of the Public Health Service Act
(42 U.S.C. 201 et seq.).
[For section 2002 and titles I through IV of division C, see text of
bill as introduced on July 14, 2009.]
TITLE V--OTHER PROVISIONS
[For subtitles A through C of title V of division C, see text of bill
as introduced on July 14, 2009.]
Subtitle D--Grants for Comprehensive Programs to Provide Education to
Nurses and Create a Pipeline to Nursing
SEC. 2531. ESTABLISHMENT OF GRANT PROGRAM.
(a) Purposes.--It is the purpose of this section to authorize grants
to--
(1) address the projected shortage of nurses by funding
comprehensive programs to create a career ladder to nursing
(including Certified Nurse Assistants, Licensed Practical
Nurses, Licensed Vocational Nurses, and Registered Nurses) for
incumbent ancillary health care workers;
(2) increase the capacity for educating nurses by increasing
both nurse faculty and clinical opportunities through
collaborative programs between staff nurse organizations,
health care providers, and accredited schools of nursing; and
(3) provide training programs through education and training
organizations jointly administered by health care providers and
health care labor organizations or other organizations
representing staff nurses and frontline health care workers,
working in collaboration with accredited schools of nursing and
academic institutions.
(b) Grants.--Not later than 6 months after the date of the enactment
of this Act, the Secretary of Labor (referred to in this section as the
``Secretary'') shall establish a partnership grant program to award
grants to eligible entities to carry out comprehensive programs to
provide education to nurses and create a pipeline to nursing for
incumbent ancillary health care workers who wish to advance their
careers, and to otherwise carry out the purposes of this section.
(c) Eligibility.--To be eligible for a grant under this section, an
entity shall be--
(1) a health care entity that is jointly administered by a
health care employer and a labor union representing the health
care employees of the employer and that carries out activities
using labor management training funds as provided for under
section 302(c)(6) of the Labor Management Relations Act, 1947
(29 U.S.C. 186(c)(6));
(2) an entity that operates a training program that is
jointly administered by--
(A) one or more health care providers or facilities,
or a trade association of health care providers; and
(B) one or more organizations which represent the
interests of direct care health care workers or staff
nurses and in which the direct care health care workers
or staff nurses have direct input as to the leadership
of the organization;
(3) a State training partnership program that consists of
nonprofit organizations that include equal participation from
industry, including public or private employers, and labor
organizations including joint labor-management training
programs, and which may include representatives from local
governments, worker investment agency one-stop career centers,
community-based organizations, community colleges, and
accredited schools of nursing; or
(4) a school of nursing (as defined in section 801 of the
Public Health Service Act (42 U.S.C. 296)).
(d) Additional Requirements for Health Care Employer Described in
Subsection (c).--To be eligible for a grant under this section, a
health care employer described in subsection (c) shall demonstrate that
it--
(1) has an established program within their facility to
encourage the retention of existing nurses;
(2) provides wages and benefits to its nurses that are
competitive for its market or that have been collectively
bargained with a labor organization; and
(3) supports programs funded under this section through 1 or
more of the following:
(A) The provision of paid leave time and continued
health coverage to incumbent health care workers to
allow their participation in nursing career ladder
programs, including certified nurse assistants,
licensed practical nurses, licensed vocational nurses,
and registered nurses.
(B) Contributions to a joint labor-management
training fund which administers the program involved.
(C) The provision of paid release time, incentive
compensation, or continued health coverage to staff
nurses who desire to work full- or part-time in a
faculty position.
(D) The provision of paid release time for staff
nurses to enable them to obtain a bachelor of science
in nursing degree, other advanced nursing degrees,
specialty training, or certification program.
(E) The payment of tuition assistance which is
managed by a joint labor-management training fund or
other jointly administered program.
(e) Other Requirements.--
(1) Matching requirement.--
(A) In general.--The Secretary may not make a grant
under this section unless the applicant involved
agrees, with respect to the costs to be incurred by the
applicant in carrying out the program under the grant,
to make available non-Federal contributions (in cash or
in kind under subparagraph (B)) toward such costs in an
amount equal to not less than $1 for each $1 of Federal
funds provided in the grant. Such contributions may be
made directly or through donations from public or
private entities, or may be provided through the cash
equivalent of paid release time provided to incumbent
worker students.
(B) Determination of amount of non-federal
contribution.--Non-Federal contributions required in
subparagraph (A) may be in cash or in kind (including
paid release time), fairly evaluated, including
equipment or services (and excluding indirect or
overhead costs). Amounts provided by the Federal
Government, or services assisted or subsidized to any
significant extent by the Federal Government, may not
be included in determining the amount of such non-
Federal contributions.
(2) Required collaboration.--Entities carrying out or
overseeing programs carried out with assistance provided under
this section shall demonstrate collaboration with accredited
schools of nursing which may include community colleges and
other academic institutions providing associate, bachelor's, or
advanced nursing degree programs or specialty training or
certification programs.
(f) Use of Funds.--Amounts awarded to an entity under a grant under
this section shall be used for the following:
(1) To carry out programs that provide education and training
to establish nursing career ladders to educate incumbent health
care workers to become nurses (including certified nurse
assistants, licensed practical nurses, licensed vocational
nurses, and registered nurses). Such programs shall include one
or more of the following:
(A) Preparing incumbent workers to return to the
classroom through English-as-a-second language
education, GED education, pre-college counseling,
college preparation classes, and support with entry
level college classes that are a prerequisite to
nursing.
(B) Providing tuition assistance with preference for
dedicated cohort classes in community colleges,
universities, accredited schools of nursing with
supportive services including tutoring and counseling.
(C) Providing assistance in preparing for and meeting
all nursing licensure tests and requirements.
(D) Carrying out orientation and mentorship programs
that assist newly graduated nurses in adjusting to
working at the bedside to ensure their retention
postgraduation, and ongoing programs to support nurse
retention.
(E) Providing stipends for release time and continued
health care coverage to enable incumbent health care
workers to participate in these programs.
(2) To carry out programs that assist nurses in obtaining
advanced degrees and completing specialty training or
certification programs and to establish incentives for nurses
to assume nurse faculty positions on a part-time or full-time
basis. Such programs shall include one or more of the
following:
(A) Increasing the pool of nurses with advanced
degrees who are interested in teaching by funding
programs that enable incumbent nurses to return to
school.
(B) Establishing incentives for advanced degree
bedside nurses who wish to teach in nursing programs so
they can obtain a leave from their bedside position to
assume a full- or part-time position as adjunct or
full-time faculty without the loss of salary or
benefits.
(C) Collaboration with accredited schools of nursing
which may include community colleges and other academic
institutions providing associate, bachelor's, or
advanced nursing degree programs, or specialty training
or certification programs, for nurses to carry out
innovative nursing programs which meet the needs of
bedside nursing and health care providers.
(g) Preference.--In awarding grants under this section the Secretary
shall give preference to programs that--
(1) provide for improving nurse retention;
(2) provide for improving the diversity of the new nurse
graduates to reflect changes in the demographics of the patient
population;
(3) provide for improving the quality of nursing education to
improve patient care and safety;
(4) have demonstrated success in upgrading incumbent health
care workers to become nurses or which have established
effective programs or pilots to increase nurse faculty; or
(5) are modeled after or affiliated with such programs
described in paragraph (4).
(h) Evaluation.--
(1) Program evaluations.--An entity that receives a grant
under this section shall annually evaluate, and submit to the
Secretary a report on, the activities carried out under the
grant and the outcomes of such activities. Such outcomes may
include--
(A) an increased number of incumbent workers entering
an accredited school of nursing and in the pipeline for
nursing programs;
(B) an increasing number of graduating nurses and
improved nurse graduation and licensure rates;
(C) improved nurse retention;
(D) an increase in the number of staff nurses at the
health care facility involved;
(E) an increase in the number of nurses with advanced
degrees in nursing;
(F) an increase in the number of nurse faculty;
(G) improved measures of patient quality (which may
include staffing ratios of nurses, patient satisfaction
rates, patient safety measures); and
(H) an increase in the diversity of new nurse
graduates relative to the patient population.
(2) General report.--Not later than 2 years after the date of
the enactment of this Act, and annually thereafter, the
Secretary of Labor shall, using data and information from the
reports received under paragraph (1), submit to the Congress a
report concerning the overall effectiveness of the grant
program carried out under this section.
(i) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as may be necessary.
[For subtitle E of title V of division C, see text of bill as
introduced on July 14, 2009.]
Subtitle F--Standards for Accessibility to Medical Equipment for
Individuals With Disabilities.
SEC. 2541. ACCESS FOR INDIVIDUALS WITH DISABILITIES.
Title V of the Rehabilitation Act of 1973 (29 U.S.C. 791 et seq.) is
amended by adding at the end of the following:
``SEC. 510. STANDARDS FOR ACCESSIBILITY OF MEDICAL DIAGNOSTIC
EQUIPMENT.
``(a) Standards.--Not later than 9 months after the date of enactment
of the America's Affordable Health Choices Act of 2009, the
Architectural and Transportation Barriers Compliance Board shall issue
guidelines setting forth the minimum technical criteria for medical
diagnostic equipment used in (or in conjunction with) physician's
offices, clinics, emergency rooms, hospitals, and other medical
settings. The guidelines shall ensure that such equipment is accessible
to, and usable by, individuals with disabilities, including provisions
to ensure independent entry to, use of, and exit from the equipment by
such individuals to the maximum extent possible.
``(b) Medical Diagnostic Equipment Covered.--The guidelines issued
under subsection (a) for medical diagnostic equipment shall apply to
equipment that includes examination tables, examination chairs
(including chairs used for eye examinations or procedures, and dental
examinations or procedures), weight scales, mammography equipment, x-
ray machines, and other equipment commonly used for diagnostic or
examination purposes by health professionals.
``(c) Interim Standards.--Until the date on which final regulations
are issued under subsection (d), purchases of examination tables,
weight scales, and mammography equipment and used in (or in conjunction
with) medical settings described in subsection (a), shall adhere to the
following interim accessibility requirements:
``(1) Examination tables shall be height-adjustable between a
range of at least 18 inches to 37 inches.
``(2) Weight scales shall be capable of weighing individuals
who remain seated in a wheelchair or other personal mobility
aid.
``(3) Mammography machines and equipment shall be capable of
being used by individuals in a standing, seated, or recumbent
position, including individuals who remain seated in a
wheelchair or other personal mobility aid.
``(d) Regulations.--Not later than 6 months after the date of the
issuance of the guidelines under subsection (a), each appropriate
Federal agency authorized to promulgate regulations under this Act or
under the Americans with Disabilities Act shall--
``(1) prescribe regulations in an accessible format as
necessary to carry out the provisions of such Act and section
504 of this Act that include accessibility standards that are
consistent with the guidelines issued under subsection (a); and
``(2) ensure that health care providers and health care plans
covered by the America's Affordable Health Choices Act of 2009
meet the requirements of the Americans with Disabilities Act
and section 504, including provisions ensuring that individuals
with disabilities receive equal access to all aspects of the
health care delivery system.
``(e) Review and Amend.--The Architectural and Transportation
Barriers Compliance Board shall periodically review and, as
appropriate, amend the guidelines as prescribed under subsection (a).
Not later than 6 months after the date of the issuance of such revised
guidelines, revised regulations consistent with such guidelines shall
be promulgated in an accessible format by the appropriate Federal
agencies described in subsection (d).''.
Subtitle G--Other Grant Programs
SEC. 2551. REDUCING STUDENT-TO-SCHOOL NURSE RATIOS.
(a) Demonstration Grants.--
(1) In general.--The Secretary of Education, in consultation
with the Secretary of Health and Human Services and the
Director of the Centers for Disease Control and Prevention, may
make demonstration grants to eligible local education agencies
for the purpose of reducing the student-to-school nurse ratio
in public elementary and secondary schools.
(2) Special consideration.--In awarding grants under this
section, the Secretary of Education shall give special
consideration to applications submitted by high-need local
educational agencies that demonstrate the greatest need for new
or additional nursing services among children in the public
elementary and secondary schools served by the agency, in part
by providing information on current ratios of students to
school nurses.
(3) Matching funds.--The Secretary of Education may require
recipients of grants under this subsection to provide matching
funds from non-Federal sources, and shall permit the recipients
to match funds in whole or in part with in-kind contributions.
(b) Report.--Not later than 24 months after the date on which
assistance is first made available to local educational agencies under
this section, the Secretary of Education shall submit to the Congress a
report on the results of the demonstration grant program carried out
under this section, including an evaluation of the effectiveness of the
program in improving the student-to-school nurse ratios described in
subsection (a) and an evaluation of the impact of any resulting
enhanced health of students on learning.
(c) Definitions.--For purposes of this section:
(1) The terms ``elementary school'', ``local educational
agency'', and ``secondary school'' have the meanings given to
those terms in section 9101 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7801).
(2) The term ``eligible local educational agency'' means a
local educational agency in which the student-to-school nurse
ratio in the public elementary and secondary schools served by
the agency is 750 or more students to every school nurse.
(3) The term ``high-need local educational agency'' means a
local educational agency--
(A) that serves not fewer than 10,000 children from
families with incomes below the poverty line; or
(B) for which not less than 20 percent of the
children served by the agency are from families with
incomes below the poverty line.
(4) The term ``nurse'' means a licensed nurse, as defined
under State law.
(d) Authorization of Appropriations.--To carry out this section,
there are authorized to be appropriated such sums as may be necessary
for each of the fiscal years 2010 through 2014.
SEC. 2552. WELLNESS PROGRAM GRANTS.
(a) Allowance of Grant.--
(1) In general.--For purposes of this section, the Secretary
of Labor shall award wellness grants as determined under this
section. Wellness program grants shall be awarded to qualified
employers for any plan year in an amount equal to 50 percent of
the costs paid or incurred by the employer in connection with a
qualified wellness program during the plan year. For purposes
of the preceding sentence, in the case of any qualified
wellness program offered as part of an employment-based health
plan, only costs attributable to the qualified wellness program
and not to the health plan, or health insurance coverage
offered in connection with such a plan, may be taken into
account.
(2) Limitation.--The amount of the grant allowed under
paragraph (1) for any plan year shall not exceed the sum of--
(A) the product of $200 and the number of employees
of the employer not in excess of 200 employees; plus
(B) the product of $100 and the number of employees
of the employer in excess of 200 employees.
The wellness grants awarded to an employer under this section
shall be for up to 3 years and shall not exceed $50,000.
(b) Qualified Wellness Program.--For purposes of this section:
(1) Qualified wellness program.--The term ``qualified
wellness program'' means a program that --
(A) includes any 3 wellness components described in
subsection (c); and
(B) is be certified by the Secretary of Labor, in
coordination with the Health Choices Commissioner and
the Director of the Center for Disease Control and
Prevention, as a qualified wellness program under this
section.
(2) Programs must be consistent with research and best
practices.--
(A) In general.--The Secretary of Labor shall not
certify a program as a qualified wellness program
unless the program--
(i) is newly established or in existence on
the date of enactment of this Act but not yet
meeting the requirements of this section;
(ii) is consistent with evidenced-based
researched and best practices, as identified by
persons with expertise in employer health
promotion and wellness programs;
(iii) includes multiple, evidenced-based
strategies which are based on the existing and
emerging research and careful scientific
reviews, including the Guide to Community
Preventative Services, the Guide to Clinical
Preventative Services, and the National
Registry for Effective Programs, and
(iv) includes strategies which focus on
prevention and support for employee populations
at risk of poor health outcomes.
(B) Periodic updating and review.--The Secretary of
Labor, in consultation with other appropriate agencies
shall establish procedures for periodic review,
evaluation, and update of the programs under this
subsection.
(3) Health literacy/accessibility.--The Secretary of Labor
shall, as part of the certification process: --
(A) ensure that employers make the programs
culturally competent. physically and programmatically
accessible (including for individuals with
disabilities), and appropriate to the health literacy
needs of the employees covered by the programs;
(B) require a health literacy component to provide
special assistance and materials to employees with low
literacy skills, limited English and from under-served
populations; and
(C) require the Secretary of Labor, in consultation
with Secretary of Health and Human Services, to compile
and disseminate to employer health plans info on model
health literacy curricula, instructional programs, and
effective intervention strategies.
(c) Wellness Program Components.--For purposes of this section, the
wellness program components described in this subsection are the
following:
(1) Health awareness component.--A health awareness component
which provides for the following:
(A) Health education.--The dissemination of health
information which addresses the specific needs and
health risks of employees.
(B) Health screenings.--The opportunity for periodic
screenings for health problems and referrals for
appropriate follow up measures.
(2) Employee engagement component.--An employee engagement
component which provides for the active engagement of employees
in worksite wellness programs through worksite assessments and
program planning, onsite delivery, evaluation, and improvement
efforts.
(3) Behavioral change component.--A behavioral change
component which provides for altering employee lifestyles to
encourage healthy living through counseling, seminars, on-line
programs, or self-help materials which provide technical
assistance and problem solving skills. such component may
include programs relating to--
(A) tobacco use;
(B) obesity;
(C) stress management;
(D) physical fitness;
(E) nutrition;
(F) substance abuse;
(G) depression; and
(H) mental health promotion (including anxiety).
(4) Supportive environment component.--A supportive
environment component which includes the following:
(A) On-site policies.--Policies and services at the
worksite which promote a healthy lifestyle, including
policies relating to--
(i) tobacco use at the worksite;
(ii) the nutrition of food available at the
worksite through cafeterias and vending
options;
(iii) minimizing stress and promoting
positive mental health in the workplace; and
(iv) the encouragement of physical activity
before, during, and after work hours.
(d) Participation Requirement.--No grant shall be allowed under
subsection (a) unless the Secretary of Labor in consultation with other
appropriate agencies, certifies, as a part of any certification
described in subsection (b), that each wellness program component of
the qualified wellness program--
(1) shall be available to all employees of the employer;
(2) shall not mandate participation by employees; and
(3) shall not require participation by individual employees
as a condition to obtain a premium discount, rebate, deductible
reduction, or other financial reward.
(e) Privacy Protections.--Any employee health information collected
through participation in an employer wellness program shall be
confidential and available only to appropriately trained health
professions as defined by the Secretary of Labor. Employers or
employees of the employer sponsoring a wellness program shall have no
access to employee health data. All entities offering employer-
sponsored wellness programs shall be considered ``business associates''
pursuant to the American Reinvestment and Recovery Act and must comply
with privacy protections restricting the release of personal medical
information.
(f) Definitions and Special Rules.--For purposes of this section:
(1) Qualified employer.--The term ``qualified employer''
means an employer that offers a qualified health benefits plan
to every employee (including each employee required to be
offered coverage under a qualified health benefits plan under
subtitle B of title III of division A), and meets the health
coverage participation requirements as defined in section 312.
(2) Certain costs not included.--Costs paid or incurred by an
employer for food or health insurance shall not be taken into
account under subsection (a).
(g) Outreach.--
(1) In general.--The Secretary of the Labor, in conjunction
with other appropriate agencies and members of the business
community, shall institute an outreach program to inform
businesses about the availability of the wellness program grant
as well as to educate businesses on how to develop programs
according to recognized and promising practices and on how to
measure the success of implemented programs.
(h) Effective Date.--This section shall take effect on January 1,
2013.
(i) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 2553. HEALTH PROFESSIONS TRAINING FOR DIVERSITY PROGRAMS.
Section 171 of the Workforce Investment Act of 1998 (29 U.S.C. 2916)
is amended by adding at the end the following:
``(f) Health Professions Training for Diversity Program.--
``(1) In general.--The Secretary shall make available 20
grants of no more than $1,000,000 annually to nonprofit
organizations for the purposes of providing workforce
development training program for those who are currently
employed in the health care workforce.
``(2) Eligibility.--For the purposes of providing assistance
and services under the program established in this subsection,
grants are to be awarded to Area Health Education Centers or
similar nonprofit organizations involved in the development and
implementation of health care workforce development programs
and that--
``(A) have a formal affiliation with a hospital or
community health center, and institution of higher
education as defined by section 101 of the Higher
Education Act of 1965;
``(B) have a history of providing program services to
minority populations; and
``(C) provide workforce development programs to low-
income persons, veterans, or urban and rural
underserved communities.''.
Subtitle H--Long-term Care and Family Caregiver Support
SEC. 2561. LONG-TERM CARE AND FAMILY CAREGIVER SUPPORT.
(a) Amendments to the Older Americans Act of 1965.--
(1) Promotion of direct care workforce.--Section 202(b)(1) of
the Older Americans Act of 1965 (42 U.S.C. 3012(b)(1)) is
amended by inserting before the semicolon the following: ``,
and, in carrying out the purposes of this paragraph, shall make
recommendations to other Federal entities regarding appropriate
and effective means of identifying, promoting, and implementing
investments in the direct care workforce necessary to meet the
growing demand for long-term health services and supports and
assisting States in developing a comprehensive state workforce
development plans with respect to such workforce including
efforts to systematically assess, track, and report on
workforce adequacy and capacity''.
(2) Personal care attendant workforce advisory panel.--
Section 202 of such Act (42 U.S.C. 3012) is amended by adding
at the end the following new subsection:
``(g)(1) The Assistant Secretary shall establish a Personal Care
Attendant Workforce Advisory Panel and pilot program to improve working
conditions and training for long term care workers, including home
health aides, certified nurse aides, and personal care attendants.
``(2) The Panel shall include representatives from--
``(A) relevant health care agencies and facilities (including
personal or home care agencies, home health care agencies,
nursing homes and residential care facilities);
``(B) the disability community;
``(C) the nursing community;
``(D) direct care workers (which may include unions and
national organizations);
``(E) older individuals and family caregivers;
``(F) State and federal health care entities; and
``(G) experts in workforce development and adult learning.
``(3) Within one year after the establishment of the Panel, the Panel
shall submit a report to the Assistant Secretary articulating core
competencies for eligible personal or home care aides necessary to
successfully provide long-term services and supports to eligible
consumers, as well as recommended training curricula and resources.
``(4) Within 180 days after receipt by the Assistant Secretary of the
report under paragraph (3), the Assistant Secretary shall establish a
3-year demonstration program in 4 states to pilot and evaluate the
effectiveness of the competencies articulated by the Panel and the
training curricula and training methods recommended by the Panel.
``(5) Not later than 1 year after the completion of the demonstration
program under paragraph (4), the Assistant Secretary shall submit to
each House of the Congress a report containing the results of the
evaluations by the Assistant Secretary pursuant to paragraph (4),
together with such recommendations for legislation or administrative
action as the Assistant Secretary determines appropriate.''.
(b) Authorization of Additional Appropriations for the Family
Caregiver Support Program Under the Older Americans Act of 1965.--
Section 303(e)(2) of the Older Americans Act of 1965 (42 U.S.C.
3023(e)(2)) is amended by striking ``$173,000,000'' and all that
follows through ``2011'', and inserting ``and $250,000,000 for each of
the fiscal years 2010, 2011, and 2012''.
(c) Authorization of Additional Appropriations for the National
Clearinghouse for Long-Term Care Information.--There is authorized to
be appropriated $10,000,000 for each of the fiscal years 2010, 2011,
and 2012 for the operation of the National Clearinghouse for Long-Term
Care Information established by the Secretary of Health and Human
Services under section 6021(d) of Public Law 109-171.
Subtitle I--Online Resources
SEC. 2571. WEB SITE ON HEALTH CARE LABOR MARKET AND RELATED EDUCATIONAL
AND TRAINING OPPORTUNITIES.
(a) In General.--The Secretary of Labor, in consultation with the
National Center for Health Workforce Analysis, shall establish and
maintain a Web site to serve as a comprehensive source of information,
searchable by workforce region, on the health care labor market and
related educational and training opportunities.
(b) Contents.--The Web site maintained under this section shall
include the following:
(1) Information on the types of jobs that are currently or
are projected to be in high demand in the health care field,
including--
(A) salary information; and
(B) training requirements, such as requirements for
educational credentials, licensure, or certification.
(2) Information on training and educational opportunities
within each region for the type jobs described in paragraph
(1), including by--
(A) type of provider or program (such as public,
private nonprofit, or private for-profit);
(B) duration;
(C) cost (such as tuition, fees, books, laboratory
expenses, and other mandatory costs);
(D) performance outcomes (such as graduation rates,
job placement, average salary, job retention, and wage
progression);
(E) Federal financial aid participation;
(F) average graduate loan debt;
(G) student loan default rates;
(H) average institutional grant aid provided;
(I) Federal and State accreditation information; and
(J) other information determined by the Secretary.
(3) A mechanism for searching and comparing training and
educational options for specific health care occupations to
facilitate informed career and education choices.
(4) Financial aid information, including with respect to loan
forgiveness, loan cancellation, loan repayment, stipends,
scholarships, and grants or other assistance authorized by this
Act or other Federal or State programs.
(c) Public Accessibility.--The Web site maintained under this section
shall--
(1) be publicly accessible;
(2) be user friendly and convey information in a manner that
is easily understandable; and
(3) be in English and the second most prevalent language
spoken based on the latest Census information.
SEC. 2572. ONLINE HEALTH WORKFORCE TRAINING PROGRAMS.
Section 171 of the Workforce Investment Act of 1998 (29 U.S.C. 2916)
(as amended by section 2553) is further amended by adding at the end
the following:
``(g) Online Health Workforce Training Program.--
``(1) Grant program.--
``(A) In general.--The Secretary shall award National
Health Workforce Online Training Grants on a
competitive basis to eligible entities to enable such
entities to carry out training for individuals to
attain or advance in health care occupations. An entity
may leverage such grant with other Federal, State,
local, and private resources, in order to expand the
participation of businesses, employees, and individuals
in such training programs.
``(B) Eligibility.--In order to receive a grant under
the program established under this paragraph--
``(i) an entity shall be an educational
institution, community-based organization, non-
profit organization, workforce investment
board, or local or county government; and
``(ii) an entity shall provide online
workforce training for individuals seeking to
attain or advance in health care occupations,
including nursing, nursing assistants,
dentistry, pharmacy, health care management and
administration, public health, health
information systems analysis, medical
assistants, and other health care practitioner
and support occupations.
``(C) Priority.--Priority in awarding grants under
this paragraph shall be given to entities that--
``(i) have demonstrated experience in
implementing and operating online worker skills
training and education programs;
``(ii) have demonstrated experience
coordinating activities, where appropriate,
with the workforce investment system; and
``(iii) conduct training for occupations with
national or local shortages.
``(D) Data collection.--Grantees under this paragraph
shall collect and report information on--
``(i) the number of participants;
``(ii) the services received by the
participants;
``(iii) program completion rates;
``(iv) factors determined as significantly
interfering with program participation or
completion;
``(v) the rate of job placement; and
``(vi) other information as determined as
needed by the Secretary.
``(E) Outreach.--Grantees under this paragraph shall
conduct outreach activities to disseminate information
about their program and results to workforce investment
boards, local governments, educational institutions,
and other workforce training organizations.
``(F) Performance levels.--The Secretary shall
establish indicators of performance that will be used
to evaluate the performance of grantees under this
paragraph in carrying out the activities described in
this paragraph. The Secretary shall negotiate and reach
agreement with each grantee regarding the levels of
performance expected to be achieved by the grantee on
the indicators of performance.
``(G) Authorization of appropriations.--There are
authorized to be appropriated to the Secretary to carry
out this subsection $50,000,000 for fiscal years 2011
through 2020.
``(2) Online health professions training program
clearinghouse.--
``(A) Description of grant.--The Secretary shall
award one grant to an eligible postsecondary
educational institution to provide the services
described in this paragraph.
``(B) Eligibility.--To be eligible to receive a grant
under this paragraph, a postsecondary educational
institution shall--
``(i) have demonstrated the ability to
disseminate research on best practices for
implementing workforce investment programs; and
``(ii) be a national leader in producing
cutting-edge research on technology related to
workforce investment systems under subtitle B.
``(C) Services.--The postsecondary educational
institution that receives a grant under this paragraph
shall use such grant--
``(i) to provide technical assistance to
entities that receive grants under paragraph
(1);
``(ii) to collect and nationally disseminate
the data gathered by entities that receive
grants under paragraph (1); and
``(iii) to disseminate the best practices
identified by the National Health Workforce
Online Training Grant Program to other
workforce training organizations.
``(D) Authorization of appropriations.--There are
authorized to be appropriated to the Secretary to carry
out this subsection $1,000,000 for fiscal years 2011
through 2020.''.
I. Purpose
The U.S. health care system is on an unsustainable course.
Between 1999 and 2008, health insurance premiums more than
doubled as wages largely stagnated.\1\ Over the past two
decades, the cost of the average family health insurance policy
has steadily drained larger and larger portions of families'
income. In the United States, at least 47 million individuals
are uninsured and millions more are underinsured.\2\ Even
having insurance does not guarantee health care security, as
families are forced to fight insurance companies that regularly
deny coverage or delay treatment. In more than half of the
medical bankruptcies filed, the household was insured.\3\
Rising health care costs have had a negative impact on
business, especially small employers.\4\ Over just the last 15
years, the percentage of small businesses offering health
insurance dropped from 61 percent to 38 percent.\5\ The number
of uninsured Americans is expected to hit 61 million by
2020.\6\ In no uncertain terms, the U.S. health care system is
in crisis and has been for some time. Reform is needed.
Inaction is not an option.
---------------------------------------------------------------------------
\1\Jacob Hacker, Testimony before the Committee on Education and
Labor Committee, ``The Tri-Committee Draft for Health Care Reform,''
(hereinafter Hacker)(Jun. 23, 2009) at 2.
\2\Alliance for Health Care Reform, ``Health Care Coverage in
America: Understanding the Issues and Proposed Solutions.'' (Mar.
2008).
\3\Id.
\4\U.S. Department of Health and Human Services, ``Helping the
Bottom Line: Health Reform and Small Business,'' Prepared by Meena
Seshamani, Director of Policy Analysis, Office of Health Reform,
available at: http:\\www.healthreform.gov/reports/helpbottomline/
helpbottomline.pdf.
\5\National Small Business Association, ``2008 NSBA Small & Mid-
Sized Business Survey,'' Table at 14, available at:
http:\\www.nsba.biz/docs/2008bizsurvey.pdf.
\6\The Commonwealth Fund Commission on a High Performance Health
System, ``The Path to a High Performance U.S. Health System: A 2020
Vision and the Policies to Pave the Way,'' Exhibit ES-2: Trend in the
Number of Uninsured, 2009-2020 Under Current Law and Path Proposal,
February 2009, available at: http:\\www.commonwealthfund.org//media/
Files/Publications/Fund%20Report/2009/Feb/
The%20Path%20to%20a%20High%20Performance%20US%20Health%20System/
1237_Commission_path_high_perform_US_hlt_sys_WEB_rev_03052009.pdf.
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H.R. 3200, America's Affordable Health Choices Act, adopts
the health care reform principles outlined by President Barack
Obama. Specifically, the bill preserves and strengthens the
employer-based health care system, includes protections for
small businesses, creates a health insurance marketplace where
individuals can choose between private insurance and the public
health insurance option, ensures low and middle income
Americans have access to affordability credits to help offset
the costs of insurance and saves over $500 billion in future
health outlays of Medicare and Medicaid through reforms to the
system.
Together, these critical reforms are fundamental to the
long-term health and security of this country.
II. Committee Action Including Legislative History and Votes in
Committee
LEGISLATIVE HISTORY
For more than 70 years, Congress and Presidents have
attempted to reform the nation's health care system, most
recently under President Clinton in 1993-94. The election of
the Democratic majority in Congress in 2006 and President Obama
in 2008 have led to renewed efforts toward national health care
reform. The legislative history described in this report is
limited to legislative action beginning in the 110th Congress.
110TH CONGRESS (2007-2008)
HEARINGS IN THE HOUSE OF REPRESENTATIVES
Committee on Education and Labor
On March 15, 2007, the Subcommittee on Health, Employment,
Labor and Pensions of the Committee of Education and Labor held
a hearing entitled ``Examining Innovative Approaches to
Covering the Uninsured Through Employer-Provided Health
Benefits.'' The panel included: Joan Alker, Deputy Executive
Director, Center for Children and Families; Brian England,
Owner, British American Auto Repair Columbia; Andrew Webber,
President and Chief Executive Officer, National Business
Coalition on Health; and Linda Blumberg, Ph.D., Economist and
Principal Research Associate, Urban Institute.
On May 22, 2007, the Subcommittee on Health, Employment,
Labor and Pensions of the Committee of Education and Labor held
a hearing entitled ``Health Care Reform: Recommendations to
Improve Coordination of Federal and State Initiatives.'' The
panel included: Congressman John Tierney (D-MA); Congressman
Tom Price (R-GA); Congresswoman Tammy Baldwin (D-WI); Mila
Kofman, J.D., Associate Research Professor, Health Policy
Institute, Georgetown University; John Colmers, Secretary,
State of Maryland Department of Health and Mental Hygiene;
Steven Goldman, Commissioner, New Jersey Department of Banking
and Insurance; John Morrison, Auditor and Commissioner, Montana
Insurance and Securities; Amy Moore, Partner, Covington &
Burling, LLP; and Kevin Covert, Board Member, American Benefits
Council.
On September 25, 2008, the Committee on Education and Labor
held a hearing entitled ``Safeguarding Retiree Health
Benefits.'' The panel included: C. William Jones, Chairman,
ProtectSeniors.org; Bill Kadereit, President, National Retiree
Legislative Network; David Lillie, Retiree, Raytheon Missile
Systems; Scott Macey, Senior Vice President and Director of
Government Affairs, Aon Consulting, Inc; Norman Stein, Douglas
Arant Professor of Law, University of Alabama; and Dale
Yamanoto, President and Founder, Red Quill Consulting.
Committee on Energy & Commerce
On September 18, 2008, the Subcommittee on Health of the
Committee on Energy and Commerce held a hearing entitled
``America's Need for Health Reform.'' The panel included:
Ronald E. Bachman, F.S.A., M.A.A.A., Senior Fellow, Center for
Health Transformation; Governor Jon S. Corzine, State of New
Jersey; Karen Davis, President, The Commonwealth Fund;
Elizabeth Edwards, Senior Fellow, Center for American Progress;
William J. Fox, F.S.A., M.A.A.A., Principal and Consulting
Actuary, Milliman Inc.; E.J. ``Ned'' Holland, Jr., Senior Vice
President, Human Resources and Communication, EMBARQ; Patricia
Owen, President/Founder, FACES DaySpa; Stephen T. Parente,
Ph.D., Director, Medical Industry Leadership Institute, and
Associate Professor of Finance, Carlson School of Management,
University of Minnesota; and Karen Pollitz, M.P.P., Research
Professor, Health Policy Institute, Georgetown University.
Committee on Ways and Means
On November 17, 2007, the Subcommittee on Income Security
and Family Support in the Committee on Ways and Means held a
hearing entitled ``Impact of Gaps in Health Coverage on Income
Security.'' The panel included: Sherena Johnson, former foster
youth, Morrow, GA; Sara R. Collins, Ph.D., Assistant Vice
President, Program on the Future of Health Insurance,
Commonwealth Fund; Ron Pollack, Founding Executive Director,
Families USA; Bruce Lesley, President, First Focus; and Brian
J. Gottlob, Senior Fellow, Milton and Rose D. Friedman
Foundation, Indianapolis, IN.
On April 15, 2008, the Subcommittee on Health in the
Committee on Ways and Means held a two-panel hearing entitled
``Instability of Health Coverage in America.'' The first panel
included former Senator Dave Durenberger (R-MN). The second
panel included: Diane Rowland, Sc.D., Executive Vice President,
Kaiser Family Foundation; John Z. Ayanian, M.D., Professor of
Medicine and Health Care Policy, Harvard Medical School;
Michael O'Grady, Senior Fellow, National Opinion Research
Center, University of Chicago; Stan Brock, Founder and
Volunteer Director of Operations, Remote Area Medical,
Knoxville, TN; and Stephen Finan, Associate Director of Policy,
American Cancer Society.
On May 14, 2008, the Subcommittee on Health in the
Committee on Ways and Means held a hearing entitled ``Health
Savings Accounts and Consumer Driven Health Care: Cost
Containment or Cost-Shift.'' The panel included: John F.
Dicken, Health Care Director, U.S. Government Accountability
Office (GAO); Michael E. Chernew, Ph.D., Professor of Health
Care Policy, Harvard Medical School; Linda J. Blumberg, Ph.D.,
Principal Research Associate, Urban Institute; Judy Waxman,
Vice President and Director of Health and Reproductive Rights,
National Women's Law Center; and Wayne Sensor, CEO, Alegent
Health.
On June 10, 2008, the Subcommittee on Health in the
Committee on Ways and Means held a two-panel hearing entitled
``Addressing Disparities in Health and Healthcare: Issues for
Reform.'' The first panel included: Delegate Donna M.
Christensen (D-USVI); former Congresswoman Hilda L. Solis (D-
CA); Delegate Madeleine Z. Bordallo (D-GU); and Congressman
Jerry Moran (R-KS). The second panel included: Marsha Little-
Blanton, Dr.P.H., Senior Advisor on Race, Ethnicity and
Healthcare, Kaiser Family Foundation; Mohammed Akhter, M.D.,
M.P.H., Executive Director, National Medical Association; Deena
Jang, J.D., Policy Director, Asian and Pacific Islander
American Health Forum; Anthony B. Iton, M.D., J.D., M.P.H.,
Director of Public Health and Health Officer, Alameda County,
CA; Sally Satel, M.D., Resident Scholar, American Enterprise
Institute; and Michael A. Rodriguez, M.D., M.P.H., Associate
Professor and Vice Chair of Research, Department of Family
Medicine, University of California, Los Angeles.
On September 11, 2008, the Subcommittee on Health in the
Committee on Ways and Means held a hearing entitled ``Reforming
Medicare's Physician Payment System.'' The panel included:
Bruce C. Vladeck, Ph.D., Senior Health Policy Advisor and
Executive Director of Health Sciences, Ernst & Young, LLP; Gail
Wilensky, Ph.D., Senior Fellow, Project Hope; Nancy H. Nielsen,
M.D., Ph.D., President, American Medical Association; and
Donald M. Crane, President and Chief Executive Officer,
California Association of Physician Groups.
On September 23, 2008, the Subcommittee on Health in the
Committee on Ways and Means held a hearing entitled the
``Health of the Private Health Insurance Market.'' The panel
included: Karen Davis, President, Commonwealth Fund; Bruce
Bodaken, Chairman and Chief Executive Officer, Blue Shield of
California; Roger Feldman, Ph.D., Blue Cross Professor of
Health Insurance, University of Minnesota; and Mila Kofman,
Superintendent of Insurance, Maine Bureau of Insurance.
HEARINGS IN THE SENATE
Committee on Health, Education, Labor and Pension
On January 10, 2007, the Senate Health, Education, Labor
and Pensions (HELP) Committee held a hearing entitled ``Health
Care Coverage and Access.'' The panel included: Peter Meade,
Executive Vice President, Blue Cross Blue Shield of
Massachusetts; John McDonough, Executive Director, Health Care
for All; Karen Davis, President, Commonwealth Fund; Andy Stern,
President, SEIU; Debra Ness, President, National Partnership
for Women and Families; Larry Burton, Executive Vice President,
Business Roundtable; Peter Harbage, New America Foundation;
Joseph Antos, Wilson H. Taylor Scholar in Health Care and
Retirement Policy, American Enterprise Institute; John Goodman,
President, National Center for Policy Analysis; and Pat
Vredevoogd Combs, National Association of Realtors, and owner,
Coldwell-Banker-AJS Realty.
On February 12, 2008, the Senate HELP Committee held a
hearing entitled ``Addressing Healthcare Workforce Issues for
the Future.'' The panel included: A. Bruce Steinwald, Director,
Healthcare GAO; Kevin Grumbach, M.D., Director, Center for
California Health Workforce Studies, University of California
San Francisco, and Chair, Department of Family and Community
Medicine; Roderick S. Hooker, Ph.D., P.A., Director of
Research, Rheumatology Section, Medical Service Department of
Veterans Affairs, Dallas VA Medical Center; Edward S. Salsberg,
M.P.A., Director, Center for Workforce Studies, Association of
American Medical Colleges; James Q. Swift, D.D.S., Board
President, American Dental Education Association; Bruce
Auerbach, M.D., President Elect, Massachusetts Medical Society,
and Vice President and Chief of Emergency Medicine, Sturdy
Memorial Hospital; Beth Landon, M.H.A., M.B.A., Director,
Alaska Center for Rural Health, University of Alaska; Jennifer
Laurent, M.S., FNP-BC, President, Vermont Nurse Practitioner
Association; and John E. Maupin, Jr., D.D.S., M.B.A.,
President, Morehouse School of Medicine.
Committee on Finance
On March 14, 2007, the Senate Committee on Finance held a
hearing entitled ``Course for Health Care Reform: Moving Toward
Universal Coverage.'' The panel included: James J. Mongan,
M.D., President and Chief Executive Officer, Partners
HealthCare; Stuart H. Altman, Ph.D., Dean, Sol C. Chaikin
Professor of National Health Policy, The Heller School for
Social Policy and Management, Brandeis University; John Sheils,
Vice President, The Lewin Group; and Richard G. Frank, Ph.D.,
Vice Chair, Citizens' Health Care Working Group.
On May 6, 2008, the Senate Committee on Finance held a
hearing entitled ``Seizing the New Opportunity for Health
Reform.'' The panel included the Honorable Tommy Thompson and
the Honorable Donna Shalala, both former Secretaries of Health
and Human Services.
On June 3, 2008, the Senate Committee on Finance held a
hearing entitled ``Rising Costs, Low Quality in Health Care:
The Necessity for Reform.'' The panel included: Paul B.
Ginsburg, Ph.D., President, Center for Studying Health System
Change; Elizabeth McGlynn, Ph.D., Associate Director, RAND
Health, and Distinguished Chair in Health Quality; Arlene Holt
Baker, Executive Vice President, AFL-CIO; and Felicia Fields,
Group Vice President, Human Resources and Corporate Services,
Ford Motor Company.
On June 10, 2008, the Senate Committee on Finance held a
hearing entitled ``47 Million and Counting: Why the Health Care
Marketplace is Broken.'' The panel included: Lisa Kelly, cancer
patient; Raymond Arth, President and CEO, Phoenix Faucets; Ron
Williams, Chairman and Chief Executive Officer, Aetna, Inc.;
and Mark Hall, Professor of Law and Public Health, Wake Forest
University School of Law and School of Medicine.
On September 9, 2008, the Senate Committee on Finance held
a hearing entitled ``Improving Health Care Quality: An Integral
Step Toward Health Reform.'' The panel included: Peter V. Lee,
J.D., Executive Director of National Health Policy, Pacific
Business Group on Health; Samuel Nussbaum, M.D., Executive Vice
President for Clinical Health Policy and Chief Medical Officer,
WellPoint, Inc.; Gregory Schoen, M.D., Regional Medical
Director, Fairview Northland Health Services; Kevin B. Weiss,
M.D., President and CEO, American Board of Medical Specialties;
and William L. Roper, M.D., M.P.H., Dean, School of Medicine,
University of North Carolina (UNC), and Vice Chancellor for
Medical Affairs and CEO, UNC Health Care System.
On September 23, 2008, the Senate Committee on Finance held
a hearing entitled ``Covering the Uninsured: Making Health
Insurance Markets Work.'' The panel included: John Bertko,
F.S.A., M.A.A.A., Adjunct Staff, The RAND Corporation, and
Former Chief Actuary, Humana, Inc., Flagstaff, AZ; Andrew
Dreyfuss, Executive Vice President, Health Care Services, Blue
Cross Blue Shield of Massachusetts; Pam MacEwan, Executive Vice
President, Public Affairs and Governance, Group Health
Cooperative; and Kim Holland, State of Oklahoma Insurance
Commissioner.
On November 19, 2008, the Senate Committee on Finance held
a hearing entitled ``Health Care Reform: An Economic
Perspective.'' The panel included: Ivan G. Seidenberg, Chairman
and Chief Executive Officer, Verizon Communications, Inc.; Andy
Stern, President, SEIU; Uwe E. Reinhardt, Ph.D., James Madison
Professor of Political Economy, Woodrow Wilson School of Public
and International Affairs, Princeton University; and Amitabh
Chandra, Ph.D., Assistant Professor of Public Policy, John F.
Kennedy School of Government, Harvard University.
111TH CONGRESS (2009-2010)
HEARINGS IN THE HOUSE OF REPRESENTATIVES
Committee on Education and Labor
On March 10, 2009, the Subcommittee on Health, Employment,
Labor and Pensions of the Committee of Education and Labor held
a panel entitled ``Strengthening Employer-Based Health Care.''
The panel included: Mark Derbyshire, Small Business Owner;
Bruce Pyenson, Principal and Consulting Actuary, Milliman,
Inc.; John Sheridan, CEO, Cooper University Hospital; Kenneth
Thorpe, Chair of the Health Policy and Management Department,
Emory University; E. Neil Trautwein, Vice President, Employee
Benefits Counsel, National Retail Federation; and Jim Winkler,
Health Management Practice Leader, Hewitt Associates.
On April 23, 2009, the Subcommittee on Health, Employment,
Labor and Pensions of the Committee of Education and Labor held
a panel entitled ``Ways to Reduce the Cost of Health Insurance
for Employers, Employees and their Families.'' The panel
included: Karen Davenport, Director of Health Policy, Center
for American Progress; David Himmelstein, Associate Professor
of Medicine, Harvard University; Michael Langan, Principal,
Towers Perrin; William Oemichan, President and CEO, Cooperative
Network; Ron Pollack, Executive Director, FamiliesUSA; Janet
Trautwein, Executive Vice President and CEO, National
Association of Health Underwriters; and William Vaughn, Senior
Health Policy Analyst, Consumers Union.
On June 10, 2009, the Subcommittee on Health, Employment,
Labor and Pensions of the Committee of Education and Labor held
a hearing entitled ``Examining the Single Payer Health Care
Option.'' The panel included: Congressman John Conyers, Jr. (D-
MI); Marcia Angell, M.D., Senior Lecturer in Social Medicine,
Harvard Medical School; David Gratzer, Senior Fellow, Manhattan
Institute; Geri Jenkins, R.N., Co-President, California Nurses
Association/National Nurses Organizing Committee; and Walter
Tsou M.D., M.P.H., National Board Advisor, Physicians for a
National Health Program.
Committee on Energy & Commerce
On March 10, 2009, the Subcommittee on Health of the
Committee on Energy and Commerce held a hearing entitled
``Making Health Care Work for American Families: Designing a
High Performing Healthcare System.'' The panel included: Doug
Elmendorf, Director, Congressional Budget Office; Glenn
Hackbarth, Chairman, Medicare Payment Advisory Commission; Jack
C. Ebeler, Vice Chair, Committee on Health Insurance Status and
Its Consequences, Institute of Medicine; Alan Levine,
Secretary, Louisiana Department of Health and Hospitals; Atul
Gawande, M.D., Associate Professor of Surgery, Harvard Medical
School, and Associate Professor, Department of Health Policy
and Management, Harvard School of Public Health; and M. Todd
Williamson, M.D., President, Medical Association of Georgia
Policy Studies.
On March 17, 2009, the Subcommittee on Health of the
Committee on Energy and Commerce held a hearing entitled
``Making Health Care Work for American Families: Ensuring
Affordable Coverage.'' The panel included: Uwe E. Reinhardt,
Ph.D., Professor of Political Economy, Economics and Public
Affairs, Princeton University; Sally C. Pipes, B.A., President
and Chief Executive Officer, Pacific Research Institute; Judy
Feder, Ph.D., Senior Fellow, Center for American Progress
Action Fund; Mila Kofman, J.D., Superintendent of Insurance,
State of Maine Bureau of Insurance; Jon Kingsdale, Ph.D.,
Executive Director, Commonwealth Health Insurance Connector
Authority, MA; Karen Pollitz, M.P.P., Research Professor,
Health Policy Institute, Georgetown University; Katherine
Baicker, Ph.D., Professor of Health Economics, Harvard School
of Public Health; and Edmund F. Haislmaier, B.A., Senior
Research Fellow, Center for Health, Heritage Foundation.
On March 24, 2009, the Subcommittee on Health of the
Committee on Energy and Commerce held a hearing entitled
``Making Health Care Work for American Families: Improving
Access to Care.'' The panel included: Brian D. Smedley, Ph.D.,
Vice President and Director, Health Policy Institute, Joint
Center for Political and Economic Studies; Michael John
Kitchell, M.D., President-Elect, Iowa Medical Society,
McFarland Clinic PC; Michael A. Sitorius, M.D., Professor and
Chairman, Department of Family Medicine, University of Nebraska
Medical Center; Risa Lavizzo-Mourey, M.D., M.B.A., President
and CEO, Robert Wood Johnson Foundation; Fitzhugh Mullan, M.D.,
Murdock Head Professor of Medicine and Health Policy, Professor
of Pediatrics, George Washington University; Jeffrey P. Harris,
M.D., F.A.C.P., President, American College of Physicians;
James R. Bean, M.D., President, American Association of
Neurological Surgeons; and Diane Rowland, Sc.D., Executive
Director, Kaiser Commission on Medicaid and the Uninsured.
On March 27, 2009, the Subcommittee on Health of the
Committee on Energy and Commerce held a hearing entitled
``Making Health Care Work for American Families: The Role of
Public Health.'' The panel included: E. Besser, M.D., Acting
Director, CDC, and Acting Administrator, Agency for Toxic
Substances and Disease Registry; Jonathan E. Fielding, M.D.,
M.P.H., Chair, Task Force on Community Preventive Services, and
Director, L.A. County Department of Public Health and County
Health Officer; Heather Howard, J.D., Commissioner, New Jersey
Department of Health and Senior Services; David Satcher, M.D.,
Ph.D., Former U.S. Surgeon General, and Director, Satcher
Health Leadership Institute, Morehouse School of Medicine;
Barbara Spivak, M.D., President, Mt. Auburn Cambridge
Independent Practice Association, Inc.; Devon Herrick, Ph.D.,
Senior Fellow, National Center for Policy Analysis; and Jeffrey
Levi, Ph.D., Executive Director, Trust for Americas Health.
On April 2, 2009, the Subcommittee on Health of the
Committee on Energy and Commerce held a hearing entitled
``Making Health Care Work for American Families: Saving Money,
Saving Lives.'' The panel included: Jonathan Skinner, Ph.D.,
Professor of Economics, Dartmouth Institute for Health Policy
and Clinical Practice; Christine K. Cassel, M.D., President and
CEO, American Board of Internal Medicine and ABIM Foundation;
John Goodman, Ph.D., President and CEO, National Center for
Policy Analysis; Bruce Sigsbee, M.D., M.S., President Elect,
American Academy of Neurology, and Medical Director, Pen Bay
Physicians and Associates; Dennis Smith, M.P.A., Senior
Research Fellow in Health Care Reform, Heritage Foundation;
Jerry Avorn, M.D., Professor of Medicine, Harvard Medical
School; Paul Ginsburg, Ph.D., President, Center for Studying
Health System Change; Regina Herzlinger, Ph.D., Professor of
Business Administration, Harvard Business School; Ronald
Bachman, F.S.A., M.A.A.A., Senior Fellow, Center for Health
Transformation; and Diane Archer, J.D., Director, Health Care
Project, Institute for America's Future.
On June 16, 2009, the Subcommittee on Oversight and
Investigation of the Committee on Energy and Commerce held a
hearing entitled ``Termination of Individual Health Policies by
Insurance Companies.'' The panel included: Don Hamm, CEO,
Assurant Health; Richard Collins, CEO, Golden Rule Insurance
Company, UnitedHealth Group; Brian A. Sassi, President and CEO,
Consumer Business, WellPoint, Inc.; Karen Pollitz, M.P.P.,
Research Professor, Health Policy Institute, Georgetown
University; Robin Beaton, Policyholder; Wittney Horton,
Policyholder; and Peggy Raddatz, Relative of Policyholder.
Committee on Ways & Means
On March 11, 2009, the Committee on Ways and Means held a
hearing entitled ``Expanding Coverage, Improving Quality and
Controlling Costs.'' The panel included: John Z. Ayanian, M.D.,
M.P.P., on behalf of the Institute of Medicine Committee on
Health Insurance Status and Its Consequences; Karen Davis,
President, Commonwealth Fund; and John M. Pickering, Principal,
Consulting Actuary, Milliman, Inc.
On March 17, 2009, the Subcommittee on Health in the
Committee on Ways and Means held a hearing entitled ``MedPAC's
Annual March Report to the Congress on Medicare Payment
Policy.'' The panel featured Glenn M. Hackbarth, Chairman,
Medicare Payment Advisory Commission.
On April 1, 2009, the Committee of Ways and Means held a
hearing entitled ``Reforming the Health Care Delivery System.''
The hearing consisted of two panels. The first panel included:
Glenn M. Hackbarth, Chairman, Medicare Payment Advisory
Commission; Elliot S. Fisher, M.D., M.P.H., Director,
Population Health and Policy, Dartmouth Institute for Health
Policy and Clinical Practice, and Professor of Medicine and
Community and Family Medicine, Dartmouth Medical School; and
Robert A. Berenson, M.D., Senior Fellow, Urban Institute. The
second panel included: Glenn D. Steele, Jr., M.D., Ph.D.,
President and CMO, Geisinger Health System; L. Allen Dobson,
Jr., M.D., F.A.A.F.P., Vice President for Clinical Practice
Development, Carolinas Health System; and Brent C. James, M.D.,
M.Stat., Chief Quality Officer and Chief Medical Officer,
Institute for Health Care Delivery Research, Intermountain
Healthcare.
On April 22, 2009, the Committee on Ways and Means held a
hearing entitled ``Insurance Market Reforms.'' The panel
included: Uwe E. Reinhardt, Ph.D., James Madison Professor of
Political Economy and Professor of Economics and Public
Affairs, Princeton University; William Vaughn, Senior Policy
Analyst, Consumers Union; William D. Hobson, Jr., M.S.,
President and CEO, Watts Healthcare Corporation; David Borris,
Owner, Hel's Kitchen Catering, Northbrook, Ill.; Kenneth L.
Sperling, Global Health Management Leader, Hewitt Associates,
on behalf of National Coalition on Benefits; and Linda
Blumberg, Ph.D., Principal Research Associate, Urban Institute.
On April 29, 2009, the Committee on Ways and Means held a
hearing entitled ``Employer Sponsored Insurance.'' The panel
included: Elise Gould, Ph.D., M.P.Aff., Director of Health
Policy Research, Economic Policy Institute; J. Randal
MacDonald, Senior Vice President for Human Resources, IBM
Corporation; Kelly Conklin, Owner, Foley-Waite Associates;
Denny Dennis, Senior Research Fellow, NFIB Research Foundation;
John Shells, Senior Vice President, Lewin Group; and Gerald
Shea, Special Assistant to the President, AFL-CIO.
On May 6, 2009, the Committee on Ways and Means held a
hearing on ``Health Care Reform'' with Kathleen Sebelius, the
Secretary for Health and Human Services.
HEARINGS IN THE SENATE
Committee on Health, Education, Labor and Pensions
On January 29, 2009, the Senate HELP Committee held a
hearing entitled ``Crossing the Quality Chasm in Health
Reform.'' The panel included: Nancy Davenport-Ennis, CEO,
National Patient Advocate Foundation; Karen Davis, President,
Commonwealth Fund; Rhonda Robinson-Beale, M.D., Chief Medical
Officer, Optum Health Behavioral Solutions, Golden Valley, MN;
Elizabeth Teisberg, Ph.D., Associate Professor, University of
Virginia's Darden School of Business; and Christine K. Cassel,
M.D., President, American Board of Internal Medicine.
On February 23, 2009, the Senate HELP Committee held a
hearing entitled ``Principles of Integrative Health: A Path to
Health Care Reform.'' The panel included: Cathy Baase, M.D.,
Global Director Health Services, Dow Chemical Company; Robert
M. Duggan, M.A., M.Ac., President, Tai Sophia Institute; James
S. Gordon, M.D., Founder and Director, Center for Mind-Body
Medicine; Wayne B. Jonas, M.D., President, Samueli Institute;
Sister Charlotte Rose Kerr, R.S.M., R.N., B.S.N., M.P.H.,
M.Ac., Practitioner and Professor Emeritus, Tai Sophia
Institute; Mary Jo Kreitzer, Ph.D., R.N., Founder and Director,
University of Minnesota Center for Spirituality & Healing;
Herbert Benson, M.D., Director Emeritus, Benson-Henry Institute
for Mind Body Medicine, Massachusetts General Hospital; Brian
M. Berman, M.D., Director, Center for Integrative Medicine,
University of Maryland School of Medicine; Susan Hartnoll
Berman, Executive Director, Institute for Integrative Health;
Ron Z. Goetzel, Ph.D., Research Professor and Director,
Institute for Health and Productivity Studies, Rollins School
of Public Health, Emory University; Kathi J. Kemper, M.D.,
M.P.H., F.A.A.P., Caryl J. Guth Chair for Complementary and
Integrative Medicine, Division of Health Sciences, Wake Forest
University; and Simon Mills, Project Lead, United Kingdom
Department of Health project: Integrated Self Care in Family
Practice.
On February 24, 2009, the Senate HELP Committee held a
hearing entitled ``Addressing Underinsurance in National Health
Reform.'' The panel included: Cathy Schoen, M.S., Senior Vice
President, Commonwealth Fund; Gail Shearer, M.S., Director of
Health Policy Analysis, Consumers Union; Diane Rowland, D.Sc.,
Executive Vice President, Henry J. Kaiser Family Foundation,
and Executive Director, Kaiser Commission on Medicaid and the
Uninsured; and Grace-Marie Turner, President, Galen Institute.
On March 24, 2009, the Senate HELP Committee held a hearing
entitled ``Addressing Insurance Market Reform in National
Health Reform.'' The panel included: Janet Trautwein, Executive
Vice President and CEO, National Association of Health
Underwriters; Ronald A. Williams, M.S., Chairman and Chief
Executive Officer, Aetna, Inc.; Karen Pollitz, M.P.P., Research
Professor, Health Policy Institute, Georgetown University;
Karen Ignagni, M.B.A., President and CEO, America's Health
Insurance Plans; Len Nichols, Ph.D., Director, Health Policy
Program, New America Foundation; Katherine Baicker, Ph.D.,
Professor of Health Economics, Department of Health Policy and
Management, Harvard School of Public Health; and Sandy Praeger,
Health Insurance Commissioner, State of Kansas.
On April 28, 2009, the Senate HELP Committee held a hearing
entitled ``Learning from the States: Individual State
Experiences with Health Care Reform Coverage Initiatives in the
Context of National Reform.'' The panel included: Jon
Kingsdale, Ph.D., Executive Director, Commonwealth Health
Insurance Connector Authority, MA; Susan Besio, Director,
Office of Vermont Health Access, State of Vermont Human
Services Agency; Harry Chen, M.D., Emergency Room Physician and
Board Member, Vermont Program for Quality in Health Care; Brent
James, Executive Director, IHC Institute for Health Care
Delivery Research, Intermountain Health Care, Inc.; Honorable
David Clark (R), Majority Leader, Utah House of
Representatives; Ruth Liu, Senior Director for Health Policy,
Legal and Government Relations, Kaiser Permanente; and Eileen
McAnneny, Senior Vice-President of Government Affairs and
Associate General Counsel, Associated Industries of
Massachusetts.
On April 30, 2009, the Senate HELP Committee held a hearing
entitled ``Primary Health Care Access Reform: Community Health
Centers and the National Health Service Corps.'' The panel
included: Cynthia Bascetta, Director of Health Care, GAO; Dan
Hawkins, Senior Vice President, National Association of
Community Health Centers; Fitzhugh Mullan, M.D., Murdock Head
Professor of Medicine and Health Policy, George Washington
University School of Public Health; Caswell A. Evans, Jr.,
D.D.S, M.P.H., Associate Dean for Prevention and Public Health
Sciences, University of Illinois at Chicago College of
Dentistry; Yvonne Davis, Board Member, Community Health Center;
John Matthew, M.D., Health Center, Plainfield, VT; and Lisa
Nichols, Executive Director, Midtown Community Center, Ogden,
UT.
On June 11, 2009, the Senate HELP Committee held a two-
panel hearing entitled ``Health Care Reform.'' The first panel
included: Margaret Flowers, M.D., Maryland Co-Chair, Physicians
for a National Health Program; Ron Williams, CEO, Aetna, Inc;
Randel Johnson, Vice President for Labor, Immigration, and
Employee Benefits, U.S. Chamber of Commerce; William Dennis,
Senior Research Fellow, National Federation of Independent
Business; Mary Andrus, Co-Chair of the Health Care Taskforce,
Consortium for Citizens with Disabilities; Samantha Rosman,
M.D., Board of Trustees, American Medical Association; Ray
Scheppach, Ph.D., Executive Director, National Governors'
Association; Gerald Shea, Special Assistant to the President,
AFL-CIO; Dennis Rivera, Chair, SEIU Healthcare; Katherine
Baicker, Ph.D., Professor of Health Economics, Harvard School
of Public Health; Jonathan Gruber, Ph.D., Associate Head, MIT
Department of Economics; Janet Trautwein, Executive Vice-
President and CEO, National Association of Health Underwriters;
Sandy Praeger, Kansas Insurance Commissioner; Scott Gottlieb,
M.D., Resident Fellow, American Enterprise Institute; and Steve
Burd, President and CEO, Safeway, Inc. The second panel
included: Gary Raskob, Ph.D., Dean, University of Oklahoma
College of Public Health; Jeffrey Levi, Ph.D., Executive
Director, Trust for America's Health; Fay Raines, Ph.D.,
President, American Association of Colleges of Nursing; Wayne
Jonas, M.D., President and CEO, Samueli Institute; Delos
Cosgrove, M.D., CEO, Cleveland Clinic; Brent James, M.D.,
M.Stat., Executive Director, Institute for Health Care Delivery
Research, Intermountain Health Care, Inc.; Charles Kahn,
M.P.H., President, Federation of American Hospitals; John
Rother, J.D., Executive Vice President for Policy and Strategy,
AARP; and Judith Palfrey, M.D., President-Elect, American
Academy of Pediatric.
Committee on Finance
On February 25, 2009, the Senate Committee on Finance held
a hearing entitled ``Scoring Health Care Reform: CBO's Budget
Options'' with Douglas Elmendorf, Ph.D., Director of the
Congressional Budget Office.
On March 12, 2009, the Senate Committee on Finance held a
hearing entitled ``Workforce Issues in Health Care Reform:
Assessing the Present and Preparing for the Future.'' The panel
included: David C. Goodman, M.D., M.S., Director of the Center
for Health Policy Research, Dartmouth College; Allan H. Goroll,
M.D., M.A.C.P., Professor of Medicine, Harvard Medical School;
Fitzhugh Mullan, M.D., Murdock Head Professor of Medicine and
Health Policy, George Washington University; and Steven A.
Wartman, M.D., Ph.D., M.A.C.P., President and CEO, Association
of Academic Health Centers.
On March 25, 2009, the Senate Committee on Finance held a
hearing entitled ``The Role of Long-Term Care in Health
Reform.'' The panel included: Judy Feder, Ph.D., Senior Fellow,
Center for American Progress Action Fund; Raymond C. Scheppach,
Ph.D., Executive Director, National Governors Association;
Dennis G. Smith, Senior Research Fellow in Health Care Reform,
Heritage Foundation; and Joshua M. Wiener, Ph.D., Senior
Fellow, RTI International.
On April 21, 2009, the Senate Committee on Finance held a
hearing entitled ``Reforming America's Health Care Delivery
System.'' The panel included: Allan M. Korn, M.D., Senior Vice
President, Chief Medical Officer, Office of Clinical Affairs,
Blue Cross Blue Shield Association; Glenn M. Hackbarth, J.D.,
Chairman, Medicare Payment Advisory Commission; Peter V. Lee,
J.D., Executive Director of National Health Policy, Pacific
Business Group on Health; Mark B. McClellan, M.D., Director,
Engelberg Center for Health Care Reform, Brookings Institute;
Lewis Morris, J.D., Chief Counsel to the Inspector General,
Office of Counsel to the Inspector General; Mary D. Naylor,
Ph.D., F.A.A.N., R.N., Marian S. Ware Professor in Gerontology,
University of Pennsylvania School of Nursing; Debra Ness,
President, National Partnership for Women and Families; Frank
G. Opelka, M.D., F.A.C.S., Vice Chancellor for Clinical Affairs
and Professor of Surgery, Office of the Chancellor, Louisiana
State University Health Science Center; Glenn Steele, Jr.,
M.D., Ph.D., President, Geisinger Health System; John Tooker,
M.D., M.B.A., F.A.C.P., Executive Vice President and Chief
Executive Officer, American College of Physicians; Richard J.
Umbdenstock, F.A.C.H.E., President and CEO, American Hospital
Association; Ron Williams, Chairman and CEO, Aetna, Inc.; and
Paul J. Diaz, J.D., President and CEO, Kindred Healthcare, Inc.
On May 5, 2009, the Senate Committee on Finance held a
hearing entitled ``Expanding Health Care Coverage.'' The panel
included: Stuart M. Butler, Ph.D., Vice President, Domestic and
Economic Policy Studies, Heritage Foundation; John Castellani,
President, Business Roundtable; Gary Claxton, Vice President
and Director, Health Care Marketplace Project, Henry J. Kaiser
Family Foundation; Donald A. Danner, President and CEO,
National Federation of Independent Business; Jennie Chin
Hansen, R.N., M.S., F.A.A.N., President, AARP; Karen Ignagni,
President and CEO, America's Health Insurance Plan; R. Bruce
Josten, Executive Vice President, Government Affairs, U.S.
Chamber of Commerce; Len Nichols, Ph.D., Director, Health
Policy Program, New America Foundation; Ron Pollack, J.D.,
Executive Director, Families USA; Sandy Praeger, Chair, Health
Insurance and Managed Care Committee, National Association of
Insurance Commissioners; Sara Rosenbaum, J.D., Chair,
Department of Health Policy, George Washington School of Public
Health and Health Services; Diane Rowland, Sc.D., Executive
Vice President, Henry J. Kaiser Family Foundation; Raymond C.
Scheppach, Ph.D., Executive Director, National Governors
Association; Scott Serota, President and Chief Executive
Officer, Blue Cross and Blue Shield Association; and Andy
Stern, President, SEIU.
On May 12, 2009, the Senate Committee on Finance held a
hearing entitled ``Financing Comprehensive Health Care
Reform.'' The panel included: Stuart H. Altman, Ph.D., Sol C.
Chaikin Professor of National Health Policy, Heller School for
Social Policy and Management, Brandeis University; Joseph R.
Antos, Ph.D., Wilson H. Taylor Scholar in Health Care and
Retirement Policy, American Enterprise Institute; Katherine
Baicker, Ph.D., Professor of Health Economics, Harvard School
of Public Health; Leonard Burman, Ph.D., Director, Tax Policy
Center, Urban Institute; Robert Greenstein, Ph.D., Executive
Director, Center on Budget and Policy Priorities; Jonathan
Gruber, Ph.D., Professor of Economics, Massachusetts Institute
of Technology; Michael F. Jacobson, Ph.D., Executive Director,
Center for Science in the Public Interest; James A. Klein,
President, American Benefits Council; Edward Kleinbard, Chief
of Staff, Joint Committee on Taxation; Gerald M. Shea, Special
Assistant to the President, AFL-CIO; John Sheils, Senior Vice
President, Lewin Group; Gail Wilensky, Ph.D., Senior Fellow,
Project HOPE; and Steven Wojcik, Vice President of Public
Policy, National Business Group on Health.
INTRODUCTION AND CONSIDERATION OF AMERICA'S AFFORDABLE HEALTH CHOICES
ACT, H.R. 3200
On June 19, 2009, Congressman George Miller (D-CA), along
with Congressmen Henry Waxman (D-CA), Charles Rangel (D-NY) and
John Dingell (D-MI) released the Tri-Committee draft proposal
for health care reform.
Committee on Education & Labor Consideration of the Tri-Committee Draft
Proposal for Health Care Reform
On June 23, 2009, the House Education and Labor Committee
held a hearing to discuss the draft proposal for health care
reform that was jointly developed by the House Ways and Means,
Energy and Commerce, and Education and Labor Committees. The
draft was designed to achieve President Obama's goals of
controlling health care cost, preserving health care choices,
and ensuring quality, affordable health care for all Americans.
The hearing entitled ``The Tri-Committee Draft Proposal for
Health Care Reform'' consisted of three panels. The first panel
included: Christina Romer, Ph.D., Chair, Council of Economic
Advisers, Office of the President; Ron Pollack, Founding
Executive Director, Families USA; Gerald Shea, Special
Assistant to the President, AFL-CIO; Paul J. Speranza, Senior
Vice President, General Counsel and Secretary, Wegmans Food
Markets, Inc.; Jacob Hacker, Ph.D., Professor and Co-Director,
Berkeley Center on Health, Economic, and Family Security,
University of California Berkeley; Michael J. Stapley,
President and Chief Executive Officer, Deseret Mutual; John
Arensmeyer, Chief Executive Officer, Small Business Majority;
and Fran Visco, President, National Breast Cancer Coalition.
The second panel included: Karen Pollitz, Research Professor
and Project Director, Health Policy Institute, Georgetown
University; Celia Wcislo, Assistant Division Director, SEIU;
James A. Klein, President, American Benefits Council; William
Vaughan, Senior Health Policy Analyst, Consumers Union; Robert
E. Moffit, Ph.D., Director, Center for Health Policy Studies,
Heritage Foundation; ReShonda Young, Small Business Owner,
Alpha Express, Inc. on behalf of the Main Street Alliance; and
Fitzhugh Mullan, M.D., Murdock Head Professor of Medicine and
Health Policy, George Washington University.
Committee on Energy & Commerce Consideration of the Tri-Committee Draft
Proposal for Health Care Reform
On June 23, 2009, the Subcommittee on Health of the
Committee on Energy and Commerce held a hearing entitled
``Comprehensive Health Reform Discussion, Day 1.'' The panel
included: Richard Kirsch, National Campaign Manager, Health
Care for America Now; Ralph G. Neas, Chief Executive Officer,
National Coalition on Health Care; Stephen T. Parente, Ph.D.,
Director, Medical Industry Leadership Institute; Marian Wright
Edelman, President, Children's Defense Fund; Jennie Chin
Hansen, President, AARP; David L. Shern, Ph.D., President and
Chief Executive Officer, Mental Health America; Erik Novak,
M.D., Orthopedic Surgeon, Patients United Now; Shona Robertson-
Holmes, Patient at Mayo Clinic; Jeffrey Levi, Ph.D., Executive
Director, Trust for America's Health; Brian D. Smedley, Ph.D.,
Vice President and Director, Health Policy Institute, Joint
Center for Political and Economic Studies; and Mark Kestner,
M.D., Chief Medical Officer, Alegent Health.
On June 24, 2009, the Subcommittee on Health of the
Committee on Energy and Commerce held a three-panel hearing
entitled ``Comprehensive Health Reform Discussion, Day 2.'' The
first panel on single-payer health care included: Sidney M.
Wolfe, M.D., Director, Health Research Group at Public Citizen;
Steffie Woolhandler, M.D., Associate Professor of Medicine,
Harvard Medical School, and Co-Founder, Physicians for a
National Health Program; and John C. Goodman, Ph.D., President
and CEO, National Center for Policy Analysis. The second panel
on state, local and tribal views included: the Honorable
Michael O. Leavitt, Former Secretary, U.S. Department of Health
and Human Services; the Honorable Joseph Vitale (D), Chairman,
Committee on Health, Human Services, and Senior Citizens, New
Jersey State Senate; W. Ron Allen, Chairman, Jamestown
S'Klallam Tribe; the Honorable Jay Webber (R), New Jersey State
Assembly; Raymond C. Scheppach, Ph.D., Executive Director,
National Governors Association; Robert S. Freeman, Deputy
Executive Director, CenCal Health, California Association of
Health Insuring Organizations; and Ron Pollack, Executive
Director, Families USA. The third panel on drug and device
manufacturer views included: Thomas Miller, CEO, Workflow and
Solutions Division, Siemens Medical Solutions, USA; Kathleen
Buto, Vice President for Health Policy, Johnson & Johnson;
William Vaughan, Senior Health Policy Analyst, Consumers Union;
Scott Gottlieb, M.D., Resident Fellow, American Enterprise
Institute; and A. Kelly, Senior Vice President, Government
Affairs and Public Policy, National Association of Chain Drug
Stores.
On June 25, 2009, the Subcommittee on Health of the
Committee on Energy and Commerce held a four-panel hearing
entitled ``Comprehensive Health Reform Discussion, Day 3.'' The
first panel on Medicare payment included Glenn M. Hackbarth,
Chair of the Medicare Payment Advisory Commission, and the
Honorable Daniel R. Levinson, Inspector General of the U.S.
Department of Health and Human Services. The second panel on
doctor, nurse, hospital, and other provider views included: Ted
D. Epperly, M.D., President, American Academy of Family
Physicians; M. Todd Williamson, M.D., President, Medical
Association of Georgia; Karl J. Ulrich, M.D., Clinic President
and CEO, Marshfield Clinic; Janet Wright, M.D., Vice President,
Science and Quality, American College of Cardiology; Kathleen
M. White, Ph.D., Chair, Congress on Nursing Practice and
Economics, American Nurses Association; Patricia Gabow, M.D.,
Chief Executive Officer, Denver Health and Hospital Authority,
National Association of Public Hospitals; Dan Hawkins, Senior
Vice President, Public Policy and Research, National
Association of Community Health Centers; Bruce T. Roberts,
R.Ph., Executive Vice President and CEO, National Community
Pharmacists Association; Bruce Yarwood, President and CEO,
American Health Care Association; and Alissa Fox, Senior Vice
President, Office of Policy and Representation, Blue Cross Blue
Shield Association. The third panel on employer and employee
views included: Kelly Conklin, Owner, Foley-Waite Custom
Woodworking, Main Street Alliance; John Arensmeyer, Founder and
CEO, Small Business Majority; Gerald M. Shea, Special Assistant
to the President, AFL-CIO; Dennis Rivera, Health Care Chair,
SEIU; John Castellani, President, Business Roundtable Institute
for Corporate Ethics; John Sheils, Senior Vice President, Lewin
Group; and Martin Reiser, Manager of Government Policy, Xerox
Corporation, National Coalition on Benefits. The fourth panel
on insurers' views included: Howard A. Kahn, Chief Executive
Officer, L.A. Care Health Plan; Karen Pollitz, M.P.P., Research
Professor, Health Policy Institute, Georgetown University;
Karen Ignagni, President and CEO, America's Health Insurance
Plans; and Janet Trautwein, Executive Vice President and CEO,
National Association of Health Underwriters.
Committee on Ways & Means Consideration of the Tri-Committee Draft
Proposal for Health Care Reform
On June 24, 2009, the Committee on Ways and Means had a
hearing entitled ``Health Reform in the 21st Century: Proposals
to Reform the Health System.'' The hearing consisted of three
panels. The first panel included: Karen Pollitz, Policy
Director, Health Policy Institute, Georgetown Public Policy
Institute; John F. Holahan, Ph.D., Director, Health Policy
Research Center, Urban Institute; and David Gratzer, M.D.,
Senior Fellow, Manhattan Institute for Policy Research. The
second panel included: Richard Kirsch, National Campaign
Manager, Health Care for America NOW; Mike Draper, Owner,
SMASH; Peter V. Lee, Executive Director for National Health
Policy, Pacific Business Group on Health; Gerald Shea, Special
Assistant to the President, AFL-CIO; Jennie Chin Hansen,
President, AARP; and Randel K. Johnson, Senior Vice President,
Labor, Immigration and Employee Benefits, U.S. Chamber of
Commerce. The third panel included: Dan Baxter, Medical
Director, William F. Ryan Community Health Network, NY; Ted
Epperly, M.D., President, American Academy of Family
Physicians; Donna Policastro, Executive Director, Rhode Island
State Nurses Association on behalf of the American Nurses
Association; Chip Kahn, President, Federation of American
Hospitals; Larry Minnix, President and CEO, American
Association of Homes and Services for the Aging; Ronald
Williams, Chairman and CEO, Aetna, Inc.; and Richard Warner,
M.D., Member, Kansas Medical Society House of Delegates, AMA
Alternate Delegate, and past President, Kansas Medical Society.
Introduction of America's Affordable Health Choices Act, H.R. 3200
On July 15, 2009, after taking into consideration comments
on the discussion draft from a very wide range of voices,
Chairmen George Miller, Henry Waxman, Charles Rangel, and
Congressman John Dingell introduced America's Affordable Health
Choices Act, H.R. 3200. The bill seeks to control rising health
care costs, strengthen the employer-based health care system,
and ensure that all Americans have access to quality and
affordable health care coverage.
Committee on Education & Labor Mark-up of H.R. 3200
The Full Committee met on July 15-17, 2009 to mark up H.R.
3200. The Committee passed by voice vote an amendment in the
nature of a substitute offered by Chairman George Miller (D-
CA). There were 42 other amendments offered and debated. Of the
amendments offered, 20 passed, 17 failed, 4 were withdrawn, and
one was ruled not germane.
America's Affordable Health Choices Act of 2009
H.R. 3200 was reported favorably to the House with an
amendment in the nature of a substitute. By a vote of 26-22,
the Committee authorized the Chairman to transmit the bill,
with an amendment in the nature of a substitute, to the
Committee on the Budget in compliance with section 310 of the
Congressional Budget Act of 1974 as the first part of the
Committee's recommendations, pursuant to the reconciliation
instruction in S. Con Res. 13.
The Miller amendment in the nature of a substitute contains
the following modifications to H.R. 3200:
Recognizes the unique structures of multi-employer plans
and how they interact with the Health Insurance Exchange (HIE).
In Section 100(26), the health care contributions of
multiemployer plans are to be treated as employer
contributions. Section 123(b)(1)(D) directs the Health Benefits
Advisory Committee to take into consideration the unique nature
of the multiemployer plans in recommending the essential
benefits package. Lastly, Section 202(e)(8) makes clear that
multiemployer plans shall be treated as large employers in
regard to joining the HIE.
The Miller substitute also creates a new subsection (b) in
Section 115 that requires qualified health benefits plans to
make provider information available to consumers by publishing
current listings of all providers within a plan network on
their website. Amends the bill in Section 116 to provide that
the medical loss ratio for qualified health benefits plans must
be at least 85 percent.
Creates Section 117 to prohibit insurance companies from
changing the coverage or costs of a health plan mid-year except
if the costs are lowered and/or the coverage is increased.
Specifically includes in the essential benefits package
``durable medical equipment, prosthetics, orthotics, and
supplies.'' (DMEPOS) The Committee is aware that Section 122
(4) related to coverage of ``services, equipment, and supplies
incident to the services of a physician's or a health
professional's delivery of care in . . . patients' homes or
places of residence'' encompasses coverage of such devices and
related services, but opted to clarify that these are
considered essential benefits. By separately listing the
category of DMEPOS as an essential benefit, the Committee
intends to underscore the importance of coverage for these
devices and related services.
Amends sections 122 and 133 to include three provisions
related to integrative medicine: to require that the membership
of the Health Benefits Advisory Committee include one or more
integrative medicine providers; establish an Integrative Health
Care Service Task Force that is to be comprised of five experts
in integrative health care; and, ensure that HIE enrollees are
provided with information to identify integrative medicine
providers who are trained and accredited.
Establishes Section 138 to ban the sales of physician
prescribing data to the pharmaceutical industry when the
physician serves patients enrolled in a qualified health
benefit plan.
Amends Section 202(d) to include that retirees who are
participants or beneficiaries in an adversely affected health
benefits group and are not enrolled in Medicare, are to be
considered Exchange eligible individuals and may enter into the
HIE in 2013, the first year of operation. Also limits post-
retirement reductions of retiree health benefits by group
health plans in Section 165.
Creates a new provision, Section 209, to allow small
employer benefit arrangements, which are defined as not-for-
profit agricultural or other industry cooperatives, to work
with the Commissioner to assist in the enrollment of small
employers and their employees in the HIE. The small employer
benefit arrangements are to operate for the primary purpose of
providing affordable employee benefits to its members; that
only consists of member employers that are in the same industry
or line of business; ensure that no member has more than five
percent voting interest in the cooperative, and are to be
governed by a board of directors elected by its members.
Adds an additional condition for providers eligible to
participate in the public health insurance option in Section
225(b) by permitting providers, such as Christian Science
practitioners, who are ``otherwise permitted to practice under
state law'' to also participate in the public health insurance
option.
Amends the affordability standard for access to the HIE in
Section 242(b)(2)(B) by giving the Commissioner the authority
to permit individuals and families who have received an
employer offer of health care coverage to qualify for the HIE
in Y2 of operation if their premium and cost sharing is greater
than 11 percent of family income.
Inserts language to protect against the misclassification
of workers for purposes of the provisions within H.R. 3200. The
language requires the Secretary of Labor to promulgate record-
keeping requirements for both employees and certain individuals
performing work for an employer but whom the employer has not
treated as employees. The content and scope of these record-
keeping requirements (both in terms of what data is needed and
what non-employee individuals are covered) should be designed
to assist the Secretary in the audits she performs to determine
noncompliance with the bill's health coverage participation
requirements.
Requires the development of standards for accessible
equipment, and requires relevant agencies to ensure that all
entities covered by the legislation meet the requirements of
the Americans with Disabilities Act and Section 504 of the
Rehabilitation Act. The Committee recognizes that a critical
component of providing health care to many individuals with
disabilities is ensuring that diagnostic and treatment
equipment is accessible to those with impairments which impede
use of standard equipment. Inaccessible medical equipment often
prevents people with disabilities from receiving the basic care
others take for granted, such as getting weighed, preventative
dental care, mammograms, pelvic exams, x-rays, physical
examinations, colonoscopies, and vision screenings.
Subtitle F of Division C adds a new provision to reduce the
student-to-school nurse ratio. Section 2551 makes available
demonstration grants to eligible local education agencies with
the purpose of reducing the student-to-school nurse ratio in
public elementary and secondary schools with special
consideration given to high-need local educational agencies who
demonstrate the greatest need for new or additional nursing
services by providing information on the current ratios of
students to school nurses.
The last modification within the Miller substitute
recognizes the importance of preventive approaches to health
and wellness. Section 2552 authorizes the Secretary of Labor to
offer incentives to employers who establish qualified wellness
programs for their employees. The Committee believes these
small grants will assist in improving the health of our
nation's workforce and will reduce employer healthcare costs.
Participating employers must offer the programs to all
employees and cannot mandate participation nor use
participation as a condition to receive any financial
incentive.
AMENDMENTS CONSIDERED IN COMMITTEE
The amendment offered by Representative Courtney (D-CT)
amends Section 111 of the Miller substitute. The amendment
reduces the pre-existing condition ``look-back'' period from
six months to 30 days and shortens the amount of time during
which a provider can exclude coverage for pre-existing
conditions, during the period prior to the bill's effective
date for the total prohibition on pre-existing condition
exclusions. The amendment was passed by voice vote.
The Representative Kline (R-MN) amendment would have struck
Titles I and II of Division A which would include striking the
protections and standards for qualified health benefits plans
and also the HIE. The Kline amendment would have also struck
Sections 311, 312, 313, 314, 321 and 324 which include striking
employer mandate requirements and requirements for employer
health coverage participation under ERISA. The amendment was
defeated by a roll call vote of 19-29.
The amendment offered by Representative Titus (D-NV) would
increase the size of small businesses that can choose to enter
the HIE. It specifies that in 2013 (Y1), the size of businesses
eligible for the HIE would increase from 10 to 15; in 2014
(Y2), the size of businesses eligible for the HIE would
increase from 20 to 25; and, in 2015 (Y3), the Commissioner
must allow additional small businesses to enter the HIE and
would set the minimum size for an eligible small business as
one with 50 employees or less. The amendment passed by a roll
call vote of 29-19.
The amendment offered by Representative Scott (D-VA) would
add early periodic screening, diagnosis, and treatment (EPSDT)
benefits to children up to age 21 to be included in the
essential benefits package (Section 122(b)(10)). The amendment
passed by a roll call vote of 32-17.
The amendment offered by Representative Thompson (R-PA)
would have struck Subtitle A of Title II of Division A, i.e.,
the HIE. The amendment was defeated by a roll call vote of 19-
29.
The amendment offered by Representative Roe (R-TN) would
have struck Subtitle B of Title II of Division A, i.e., the
public health insurance option. The amendment was defeated by a
roll call vote of 19-29.
The amendment offered by Representative Davis (D-CA) would
instruct the Health Benefits Advisory Committee to examine
current state laws and to seek input from the states as it
forms its recommendations for the federal benefits standards by
inserting the aforementioned after paragraph (2) in Section
123(b). The amendment was passed by voice vote.
The amendment offered by Representative Guthrie (R-KY)
would have struck Sections 311, 312, 313, 314, 321 and 324,
i.e., the employer mandate requirements and requirements for
employer health coverage participation under ERISA. The
amendment was defeated by a roll call vote of 19-28.
The second amendment offered by Representative Davis (D-CA)
would end the current COBRA eligibility limit and allow those
currently enrolled in COBRA to keep their insurance until they
find another job offering coverage or until they become
eligible to participate in the HIE. This amendment would be
inserted after Subtitle G of Title I of Division A. The
amendment was passed by voice vote.
The amendment offered by Representative Biggert (R-IL) and
Representative Price (R-GA) would have struck Section 102(b)
and inserted that any group health plan operating under ERISA
would be treated as already meeting the requirements of a
qualified health benefits plan as listed in Title I. The
amendment was defeated by a roll call vote of 18-29.
The amendment offered by Representative Fudge (D-OH) and
Representative Titus (D-NV) would help small employers select
health plans. The amendment would require the Commissioner, in
consultation with the Small Business Administration, to
establish and carry out a program to provide health insurance
counseling and technical assistance to small employers who
provide their employees health care through the HIE. The
amendment was passed by a roll call vote of 28-18.
The amendment offered by Representative Wilson (R-SC) would
exclude TRICARE from the definition of employment-based health
care. The amendment was passed by voice vote.
The amendment offered by Representative Hare (D-IL) would
make a technical change in the Miller amendment regarding
``small employer benefit associations.'' The amendment would
strike ``association(s)'' and instead insert
``arrangement(s).'' The amendment was passed by voice vote.
The amendment offered by Representative Kline (R-MN) would
have added to the end of Section 311 a provision to exempt
employers from having to offer or maintain qualified health
insurance coverage if an employer-initiated referendum calling
for such an exemption was passed by a majority of employees.
The amendment was defeated by a roll call vote of 18-28.
The amendment offered by Representative Hirono (D-HI) would
maintain Hawaii's Prepaid Health Care Act exemption under
ERISA, including with respect to the provisions of H.R. 3200,
where such state statute ensures health care benefits
equivalent to or greater than those benefits that would be
guaranteed by H.R. 3200. The amendment was passed by voice
vote.
The amendment offered by Representative Hoekstra (R-MI)
would have suspended Sections 311, 312, 313, and 314, which
pertain to H.R. 3200's employer mandate, in the event that the
national unemployment rate as announced monthly by the Bureau
of Labor Statistics at the Department of Labor equals or exceed
eight percent for two consecutive months. The amendment was
defeated by voice vote.
The amendment offered by Representative Kucinich (D-OH)
would create an ERISA waiver to permit States to enact single
payer laws. The Department of Labor would determine whether the
State plan meets certain requirements to obtain the waiver. The
amendment was passed by a roll call vote of 27-19 with one
member passing on the vote.
The amendment offered by Representative Hunter (R-CA) would
create a two-year employer hardship exemption that waives an
employer's obligation to provide coverage or pay a penalty. The
amendment was passed by voice vote.
The second amendment offered by Representative Kucinich (D-
OH) would have limited the total compensation of insurance
company executives to not exceed the compensation of the
President of the United States. The amendment was withdrawn and
no further action was taken on it.
The amendment offered by Mr. McClintock (R-CA) would have
required that 30 days after H.R. 3200's enactment, the Director
of the Office of Management and Budget submit a report to the
House of Representatives determining whether Sections 311, 312,
313, 314, 321, and 324 are deficit neutral for the applicable
period of ten fiscal years. The report would be annually
conducted prior at the end of each fiscal year and if a section
was found to not be deficit neutral, then it would be suspended
for two years following that fiscal year. The amendment was
defeated by a roll call vote of 19-28.
The en bloc amendment offered by Representative Holt (D-
NJ), incorporating proposals by Representatives Loebsack, Wu,
Courtney, Altmire, and Tonko, would add workforce development
provisions for long-term care workers; add training for health
care jobs for vulnerable populations; expand and clarify that
mental health and substance abuse preventative services are
covered in the essential benefits package; and create a health
care labor market website and an online health professional
training grant program. The amendment was passed by voice vote.
The amendment offered by Representative Biggert (R-IL)
would have established an annual report on the average waiting
period for minimum health services and if an increase of five
percent or more was reported, then Sections 311, 312, 313, 314,
321, and 324 would not apply in the following year. The
amendment was withdrawn and no further action was taken on it.
The amendment offered by Representative Polis (D-CO) would
expand the characteristics outlined in Section 221(e) on data
collection to include race, ethnicity, primary language, sex,
sexual orientation, gender identity, disability, socioeconomic
status, rural, urban, or other geographic setting, and any
other population or subpopulation as determined appropriate by
the Secretary. The amendment was passed by voice vote.
The amendment offered by Representative McMorris Rodgers
(R-WA) would have prohibited any tax increases to families with
an income of $250,000 or less. The amendment was ruled not
germane as outside the jurisdiction of the Committee.
The amendment offered by Representative Sablan (NMI),
Representative Pierluisi (PR), and Representative Clarke (D-NY)
would add to H.R. 3200 a Sense of Congress stating that the
final bill must meaningfully address the health care needs of
the territories. The amendment was passed by voice vote.
The second amendment offered by Representative Kline (R-MN)
would have prohibited any provision in H.R. 3200 from the
application of state law remedies in connection to group health
plans, maintaining that section 502 of ERISA will continue to
supersede state law. The amendment was defeated by a roll call
vote of 19-28.
The amendment offered by Representative Sestak (D-PA) would
require the presence of patient representatives on the Health
Benefits Advisory Committee. It is the intent of the Committee
that such educated patients or consumer advocates be free of
conflicts of interest with any provider, insurer, or other
interest in the health sector. The amendment was passed by
voice vote.
The amendment offered by Representative Price (R-GA) would
have created a waiver that would exempt States from enacting
Subtitle B in Title III if a State health plan was enacted into
law by the legislature of that State. The amendment was
defeated by a roll call vote of 19-28.
The amendment offered by Representative Wu (D-OR) and
Representative Altmire (D-PA) would require the Health Choices
Commissioner to study how to increase the meaningful use of
electronic health records and then use the results of that
study to potentially require higher reimbursement rates for
providers that use health information technology. The amendment
was passed by voice vote.
The amendment offered by Representative Souder (R-IN) would
have prohibited any provision in H.R. 3200 from requiring a
group health plan to provide coverage for abortion or access to
an abortion. The amendment was defeated by roll call vote of
19-29.
The second amendment offered by Representative Souder (R-
IN) would require that no funds appropriated under Titles I-III
be used for abortion or to cover any part of the costs of any
health benefits plan that includes coverage of abortion, except
in the case where a woman suffers from a physical disorder,
physical injury, or physical illness. The amendment was
defeated by a roll call vote of 19-29.
The second amendment offered by Representative Biggert (R-
IL) would prohibit the Commissioner or any health insurance
issuer offering health insurance coverage through the HIE from
discriminating against approving or covering health care
services based on religious or spiritual content if
expenditures for such a health care service are allowable under
213(d) of the Internal Revenue Code of 1986. The amendment was
passed by voice vote.
The second amendment offered by Representative Price (R-GA)
would prohibit any provision in H.R. 3200 to be construed to
preclude any participant or beneficiary in a group health plan
from entering into any contract or arrangement for health care
with any health care provider. The amendment was passed by
voice vote.
The second amendment offered by Representative Hoekstra (R-
MI) would have designated a ``health care sharing ministry'' as
an ``employer'' and the members of such a ministry would be
designated as ``employees.'' The amendment was withdrawn and no
further action was taken on it.
The amendment offered by Representative Petri (R-WI) would
permit group consumer directed health plans and arrangements
(including a high deductible health plan with the meaning of
section 223(c)(2) of the IRS Code) to be treated as acceptable
coverage consistent with other employer group health plans
subject to the grace period until Y5. The amendment was amended
by unanimous consent to ensure that this exception was not
permanent and passed by voice vote.
The amendment offered by Representative McKeon (R-CA) would
have created a new title at the end of Division A titled Title
IV--Small Business Health Fairness. This title would include
rules governing association health plans; clarification of
treatment of single employer arrangements; enforcement
provisions related to association health plans; and other
provisions related to association health plans. The amendment
was defeated by a roll call vote of 21-27.
The amendment offered by Representative Castle (R-DE) would
have allowed variation in cost-sharing and premiums charged by
the qualified health benefits plans dependent upon participant
participation in employer prevention and wellness programs. The
amendment was withdrawn and no further action was taken on it.
The second amendment offered by Representative Wilson (R-
SC) would add to H.R. 3200 a Sense of the House of
Representatives that any members who vote in support of the
public health insurance option are urged to forgo their right
to participate in the FEHBP and enroll under the public option.
The amendment was passed by voice vote.
The third amendment offered by Representative Price (R-GA)
would have established provisions for defined contribution
health plans. The amendment was defeated by a roll call vote of
19-29.
The fourth amendment offered by Representative Price (R-GA)
would have struck the physician billing language in Section
225(c). The amendment was defeated by a roll call vote of 19-
29.
The second amendment offered by Representative McMorris
Rodgers (R-WA) would have exempted plans established and
maintained by Indian tribal governments. The amendment was
defeated by voice vote.
Committee on Ways & Means Mark-up of H.R. 3200
On July 16, 2009, the Committee on Ways and Means met to
mark-up H.R. 3200, America's Affordable Health Choices Act and
reported the bill as amended by a vote of 23-18.
Committee on Energy & Commerce Mark-up of H.R. 3200
Beginning on July 16, 2009, the Committee on Energy and
Commerce met to mark-up H.R. 3200, America's Affordable Health
Choices Act. In addition to July 16, 2009, the Committee
considered H.R. 3200 on July 17, 20, 30 and 31. The Committee
reported the bill as amended by a vote of 31-28.
SENATE CONSIDERATION OF THE AFFORDABLE HEALTH CHOICES ACT
Beginning on June 17, 2009 the HELP Committee met to mark-
up the Affordable Health Choices Act. The Committee reported
the bill as amended on July 15, 2009 by a vote of 13-10.
III. Summary of the Bill
America's Affordable Health Choices Act makes critical
reforms to this nation's broken health care system. It will
lower costs, preserve choice, and expand access to quality,
affordable care. To protect families struggling with health
care costs and inadequate coverage, the bill ensures that
health insurance companies can no longer compete based on risk
selection. By prohibiting rate increases based on pre-existing
conditions, gender and occupation, the bill requires that
insurance companies instead compete based on quality and
efficiency. In addition, H.R. 3200 will lower the cost of
health care by eliminating co-pays and deductibles for
preventive care, capping annual out-of-pocket expenses,
prohibiting lifetime limits, and allowing the uninsured, part-
time workers, and employees of some small businesses to obtain
group rates by purchasing health care through the HIE.
H.R. 3200 will expand choice of health insurance,
especially in many parts of the country where families have
very limited choices because of the nature of the insurance
market. The HIE will serve as an organized and transparent
``marketplace for the purchase of health insurance''\7\ where
individuals and employees (phased-in over time) can shop and
compare health insurance options. To participate in the HIE,
insurers will be required to meet the insurance market reforms
and consumer protections and offer the essential benefits
package established by the new independent benefits advisory
committee. Individuals and families under 400 percent of
poverty who qualify for affordability credits will be able to
use that money in the HIE to help offset the costs of their
health care coverage.
---------------------------------------------------------------------------
\7\Linda Blumberg and Karen Pollitz, Health Insurance Exchanges:
Organizing Health Insurance Marketplaces to Promote Health Reform
Goals, the Urban Institute & Robert Wood Johnson Foundation (April
2009).
---------------------------------------------------------------------------
One health insurance choice within the HIE will be the
public health insurance option. The public option will be
required to operate on the same level as private insurance
companies, adhering to the same market reforms and consumer
protections, and it will be required to be financed from its
premiums. Rates will vary geographically just as private
insurers do. The public plan option will be able to utilize
payment rates similar to Medicare with provider rates at
Medicare plus 5 percent. However, beginning in Y4 the Secretary
will have the authority to use an administrative process to set
rates (at levels that do not increase costs) in order to
promote payment accuracy and the delivery of affordable and
efficient care.
The inclusion of a public option in the HIE will help to
rein in the costs of health insurance while preserving access.
At all times, the Secretary retains the authority to utilize
innovative payment mechanisms and policies to improve health
outcomes, reduce health disparities, and promote quality and
integrated care. Furthermore, the public option will represent
choice in many communities where one insurer dominates the
market. Consequently, the public health insurance option has
the ability to increase competition and control costs. However,
no one, including employers who put their employees into the
HIE, can place or force anyone into the public option. The
decision to enroll in a private plan or the public option is
always left to individuals and families to decide for
themselves.
H.R. 3200 is built upon the premise of shared
responsibility among individuals, employers and the government,
so that everyone contributes and has access to affordable,
quality health care. America's Affordable Health Choices Act
gives employers the choice to either offer health insurance or
pay a percentage of payroll for their employees to go into the
HIE.
Beginning in 2013, employers ``playing'' will be required
to offer health coverage to all of their full-time employees
and contribute 72.5 percent of the premium for an individual
and 65 percent for a family premium. For part-time workers,
employers will have the choice to either offer health coverage
on a pro rata basis or pay the required penalty. There will be
no minimum benefit requirement for existing employer-sponsored
health plans until the end of 2018. At that time, employers who
``play'' will be required to offer coverage that is no less
than the minimum benefit level within the Exchange and must
include the insurance market reforms.
Employers may also choose to ``pay'' instead of play. A
``pay'' employer would be required to make a contribution equal
to 8 percent of their payroll to the HIE. However, recognizing
the difficulties small businesses face, the bill includes a
number of provisions to help small employers. For example, H.R.
3200 exempts employers with payrolls of $250,000 or less from
the pay or play requirements. For employers with payroll
between $250,000 and $400,000 the contribution amount phases-up
from 2 to 8 percent so that only employers with payrolls
greater than $400,000 will pay the full 8 percent.
Whether obtaining coverage through an employer, a spouse or
the HIE, H.R. 3200 requires that individuals either enroll in
health care coverage or pay 2.5 percent of their adjusted gross
income capped at the total cost of the average cost premium
offered in the HIE. Recognizing that high health care costs
prevent many Americans from securing health care coverage, H.R.
3200 provides for affordability credits to help eligible low-
and middle-income individuals and families purchase coverage in
the HIE. In addition, for those who can demonstrate that they
are unable to afford health insurance, the Health Choices
Commissioner (Commissioner) retains the authority to develop
and grant hardship waivers.
The affordability credits provided for under the bill will
be available to individuals and families with incomes between
133 to 400 percent of the federal poverty level. Medicaid will
be expanded so that anyone below 133 percent of poverty will be
Medicaid eligible and that expansion will be fully federally
financed. Employees who are offered health insurance through an
employer will be unable to go into the HIE and receive
affordability credits unless that employer coverage is deemed
unaffordable. An unaffordable employer offer is one where the
employees' share of the premium and cost sharing are more than
11 percent of family income.
Finally, as millions of Americans gain coverage,
investments in the health care workforce are critical to
ensuring all Americans have access to needed care. H.R. 3200
includes significant investments to help train more primary
care and public health physicians as well as nurses. It puts
into place incentives to encourage more people to become
doctors and nurses (particularly in rural areas). Some of the
workforce provisions include: (1) increased funding for the
National Health Service Corp.; (2) expanded scholarships and
loans for health professionals who work in shortage professions
and areas; (3) steps to increase physician training outside of
the hospital and redistribute unfilled graduate medical
education residency slots so that more primary care physicians
can be trained; and (4) grants through the Department of Labor
to help train and retain nurses.
IV. Committee Views
The Committee on Education and Labor of the 111th Congress
is committed to containing the cost of health care and ensuring
that every American has access to affordable, quality health
care coverage. H.R. 3200 includes critical reforms to the
health care system that are needed to reduce surging premium
and health care costs that families, businesses and governments
are struggling to afford. The bill cuts over a half trillion
dollars from the health care system, ensures that no one is
ever one illness away from bankruptcy and creates a system
where 97 percent of Americans will have health care coverage by
2015.
Overview
Health care reform is a critical issue in this country.
There are 47 million people in the United States without health
care coverage and almost nine million of them are children.\8\
Meanwhile, health care costs are rising for nearly everyone.
The United States spends over $2.4 trillion--more than 18
percent of GDP--on health care services and products--far more
than other industrialized countries.\9\ In addition, health
care costs continue to grow faster than the economy as a whole,
and individuals and families are burdened by the weight of
these escalating expenses. Yet, for all this spending, the
United States' scores are average or worse on many key
indicators of health care quality. Health care reform is
critical to restoring prosperity for our nation's families and
H.R. 3200 will ensure that coverage is truly affordable and
dependable for hard-working Americans.
---------------------------------------------------------------------------
\8\Supra note 2.
\9\National Coalition on Health Care, ``Facts on the Cost of Health
Insurance and Health Care,'' (2007), available at: http:\\www.nchc.org/
facts/cost.shtml
---------------------------------------------------------------------------
The Uninsured
The number of uninsured persons in the United States
continues to grow, from 44.8 million in 2005 to 47.0 million in
2006. The percentage of uninsured is also rising, from 15.3
percent of the total population in 2005 to 15.8 percent in
2006.\10\
---------------------------------------------------------------------------
\10\U.S. Census Bureau, ``Health Insurance Coverage: 2006--
Highlights.'' (Aug. 27, 2007), available at: http:\\www.census.gov/
hhes/www/hlthins/hlthin06/hlth06asc.html
---------------------------------------------------------------------------
More than two-thirds of the uninsured live in a household
with one full-time worker. These increasing numbers can be
attributed to the rising cost of health care, a decline in
manufacturing jobs and an increase in workers employed in the
service industries and small businesses, which are less likely
to provide insurance.\11\ Roughly two-thirds of Americans
without health insurance have incomes 200 percent below the
federal poverty level--or approximately $44,000 for a family of
four.\12\ Not surprisingly, those in households with annual
incomes below $25,000 are even less likely to be insured. In
2006, twenty-five percent of these Americans were uninsured in
comparison to 16 percent of the total population.\13\
---------------------------------------------------------------------------
\11\Robert Pear. ``Without Health Benefits, a Good Life Turns
Fragile,'' N.Y. Times (Mar. 5, 2007).
\12\Kaiser Family Foundation, ``The Uninsured: A Primer,'' (Oct.
2008). http:\\www.kff.org/uninsured/upload/7451-04.pdf.
\13\Carmen DeNavas-Walt, Bernadette D. Proctor and Jessica Smith,
``Income, Poverty, and Health Insurance Coverage in the United States:
2006'' Current Population Reports (2006) at 60-233. See also, U.S.
Department of Commerce, Economics and Statistics Administration, August
2007.
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Approximately 162 million non-elderly workers and their
dependents received health coverage through their employment-
based health plans.\14\ However, millions of other working
Americans are unable to participate in an employer-sponsored
plan, either because the employer does not offer coverage or
the employee is not eligible under the plan. In 2005, 20
percent of ``wage and salary'' workers had an employer that did
not offer any coverage to their workers. And 18 percent were
not eligible for the health plan that was offered by their
employer.\15\ For example, some firms do not offer coverage to
part-time employees and some do not offer coverage to workers
who have been employed for less than a specific amount of time.
---------------------------------------------------------------------------
\14\Elise Gould, ``The Erosion of Employer-Sponsored Health
Insurance,'' Economic Policy Institute (Oct. 8, 2008).
\15\Supra note 9.
---------------------------------------------------------------------------
While employer-sponsored plans still remain the dominant
source of health coverage for most Americans, the percentage of
people obtaining health coverage through these plans has been
steadily shrinking. For example, 60 percent of employers
offered benefits in 2007, compared with 69 percent in 2000.
Most of this decline can be attributed to the decline in small
businesses (less than 200 workers) offering coverage.\16\ Among
firms with less than 10 workers, the offer rate dropped from 57
percent in 2000 to 45 percent in 2007.\17\ For employers who
have stopped offering coverage, almost three out of four say
that premiums are too expensive.\18\
---------------------------------------------------------------------------
\16\Kaiser Commission on Medicaid and the Uninsured, ``2007
Employer Health Benefits Survey--Summary of Findings,'' (Sept. 2007) at
29, available at: http:\\www.kff.org/insurance/7672/index.cfm
\17\Paul Fronstin. ``Sources of Health Insurance and
Characteristics of the Uninsured: Analysis of the March 2007 Current
Population Survey.'' Employee Benefit Research Institute, October 2007.
\18\Kaiser Family Foundation/HRET, ``Employer Health Benefits 2007
Annual Survey.'' (Sept. 2007).
---------------------------------------------------------------------------
Unaffordable Health Care Coverage
Employers and workers alike are increasingly concerned
about the rising costs of health care and insurance. Premiums
for employer-sponsored health coverage are rising much faster
than workers' earnings and inflation. Between spring 2006 and
spring 2007, premiums for coverage offered by employers across
the United States increased by 6.1 percent--more than twice the
growth in the Consumer Price Index (CPI). The average annual
cost of employer-sponsored health insurance was nearing $13,000
in 2008. In response to these steady premium hikes, many
companies are asking their employees to cover some of the new
costs. For instance, workers taking single coverage through an
employer paid 12 percent more for their coverage in 2007 than
in 2006. Premiums for a family of four paid by workers
increased by 10 percent from 2006 to 2007.\19\
---------------------------------------------------------------------------
\19\Id.
---------------------------------------------------------------------------
These increases are of great concern, and more and more
workers believe that they may not be able to afford their share
of the cost of coverage. In a recent poll by the Pew Research
Center,\20\ forty-four percent of workers surveyed say that
affording health insurance is difficult or very difficult. In
addition, almost three out of four uninsured workers who chose
not to participate in their employer's health plan in 2002 said
the plan was too costly. Workers also know that if they lose
their job, they are likely to lose access to affordable health
care coverage.
---------------------------------------------------------------------------
\20\Pew Research Center for the People and the Press poll,
conducted January 9-13, 2008, available at: http:\\people-press.org/
reports/dispaly.php3?ReportID= 395.
---------------------------------------------------------------------------
In addition, among those employers that offer benefits, a
large percentage of firms report that in the next year not only
are they very or somewhat likely to increase the amount workers
contribute to premiums (45 percent), but they will also
increase deductible amounts (37 percent), office visit cost
sharing (42 percent) or the amount that employees have to pay
for prescription drugs (41 percent).\21\
---------------------------------------------------------------------------
\21\Supra note 16.
---------------------------------------------------------------------------
The problem of being ``underinsured'' has also become
increasingly relevant. One recent study estimated that 29
percent of individuals who have insurance are ``underinsured''
and have coverage that is inadequate to secure them access to
needed care or protect again catastrophic medical bills.\22\
---------------------------------------------------------------------------
\22\Consumer Reports, ``Health Insurance: CR Investigates Health
Care,'' September 2007, available at: http:\\www.consumerreports.org/
cro/health-fitness/health-care/health-insurance-9-07/overview/
0709_2/37/21/17/42/62/3_2/54/6x-02/32/69/4
---------------------------------------------------------------------------
The Commonwealth Fund found that 25 million adults who had
health coverage in 2007 were underinsured\23\--a 60 percent
increase from the 16 million Americans who were underinsured in
2003.\24\ Another study found that while 16 percent of adults
spent more than 10 percent of their family income on health
care service in 1996. By 2003 the proportion of adults bearing
these health-related ``catastrophic financial burdens'' had
increased to 19 percent to about 49 million individuals.\25\
Another study found that financial burdens had increased to the
point that private health insurance coverage no longer provided
adequate financial protection for low-income families.\26\
---------------------------------------------------------------------------
\23\According to the Commonwealth Fund study, families are
identified as underinsured if they had out-of-pocket medical spending
that absorbed at least 10 percent of family income, or for low-income
adults (200 percent below the federal poverty level), medical spending
consumed at least 5 percent of family income.
\24\Cathy Schoen et al, ``How Many are Underinsured? Trends Among
U.S. Adults, 2003 and 2007,'' Health Affairs 27 no. 4 (2008).
\25\J. Banthin and D. Bernard, ``Changes in Financial Burdens for
Health Care: National Estimates for the Population Younger than 65
Years, 1996 to 2003,'' JAMA (2006).
\26\J. Banthin, P. Cunningham and D. Bernard. ``Financial Burdens
of Health Care, 2001-2004,'' Health Affairs 27, no.1 (2008) at 188-195.
---------------------------------------------------------------------------
In addition, many families have little room within their
family budgets for large or unexpected out-of-pocket health
care expenses. In 2003, an estimated 77 million Americans--
nearly two out of five adults--had difficulty paying medical
bills.\27\ Even working age adults who were continually insured
had problems paying their medical bills and carried medical
debt as a result. Nearly half of all bankruptcies in the United
States are related, in part, to health care expenses. And of
those facing medical bankruptcies, roughly three-quarters had
health insurance at the onset of their bankrupting illness.\28\
---------------------------------------------------------------------------
\27\Michelle M. Doty, Jennifer N. Edwards, and Alyssa L. Holmgren,
``Seeing Red: Americans Driven into Debt by Medical Bills,'' The
Commonwealth Fund (Aug. 2005).
\28\David Himmelstein, Elizabeth Warren, D. Thorne, and S.
Woolhandler, ``Illness and Injury as Contributors to Bankruptcy,''
Health Affairs (2005).
---------------------------------------------------------------------------
The risk of being underinsured or experiencing financial
problems due to health spending varies not only by family
income, but also by health status. According to Judy Feder,
Senior Fellow at the Center for American Progress, ``health
care affordability is particularly elusive for individuals with
chronic illness and other conditions that require on-going,
often costly, medical care.''\29\ Individuals who are older and
have chronic conditions such as diabetes, heart disease, or
arthritis, or have experienced a stroke, are more likely to
spend a high proportion of their income on health expenses. If
these individuals do not have an employer-sponsored health
plan, or if they lose this coverage, their ability to purchase
coverage in the non-group market is limited at best. The non-
group market systematically denies coverage, limits benefits,
and charges excessive premiums to individuals with pre-existing
conditions or those who are perceived to be at high-risk.
Ironically, the people who are more likely to become sick--the
very population that insurance is supposed to protect--are also
more likely to be underinsured and face grave financial
problems.
---------------------------------------------------------------------------
\29\Judy Feder, Testimony before the Committee on Energy and
Commerce Committee (hereinafter Feder) (Mar. 17, 2009).
---------------------------------------------------------------------------
The Consequences of being Uninsured or Underinsured
Being uninsured makes it more likely that a person will not
receive adequate medical care. Individuals without insurance
often go without or delay care, and the care they do receive is
likely to be lower quality than the care received by insured
individuals. An estimated 18,000 to 22,000 Americans die each
year because they do not have health coverage.\30\ The length
of time a person goes without health insurance also makes a
difference--people who are uninsured for at least a year report
being in worse health than those uninsured for a shorter period
of time.\31\ Finally, lack of coverage and coverage stability
is particularly burdensome on the seriously and chronically
ill, whose care is often delayed or denied when they cannot
pay.\32\
---------------------------------------------------------------------------
\30\``Insuring America's Health: Principles and Recommendations,''
Institute of Medicine (Jan. 14, 2004).
\31\Id.
\32\Institute of Medicine, ``Care Without Coverage: Too Little, Too
Late'' (May 2002), available at: http:\\www.iom.edu/Object.File/Master/
4/160/Uninsured2FINAL.pdf
---------------------------------------------------------------------------
HEALTH CARE COSTS AND SPENDING: THE COST OF DOING NOTHING
H.R. 3200 ensures quality and affordable health care
choices for all Americans while also controlling costs in a
system in which costs have spiraled out of control. The United
States spends over $2.4 trillion on health care each year.\33\
As noted earlier, health care expenditures in the United States
constitute approximately 18 percent of the current Gross
Domestic Product (GDP).\34\ If health care costs continue to
grow at historical rates, the share of GDP devoted to health
care in the United States is projected to reach 34 percent by
2040.\35\
---------------------------------------------------------------------------
\33\Supra note 9.
\34\Executive Office of the President, Council of Economic
Advisors, ``The Economic Case for Health Care Reform,'' available at
http:\\www.whitehouse.gov/administration/eop/cea/
TheEconomicCaseforHealthCareReform/ (June 2009).
\35\Id.
---------------------------------------------------------------------------
International Comparisons
The United States devotes a far larger share of GDP to
health care spending more than two times per person on health
care than any other OECD (Organization for Economic Co-
operation and Development) country.\36\ While health care
expenditures in the United States are about 18 percent of
GDP\37\ the OECD reports that the next highest country was
Switzerland--with 11.3 percent--and in most other high-income
countries, the share was less than 10 percent.\38\
---------------------------------------------------------------------------
\36\Marcia Angell Testimony before the Committee on Education and
Labor Committee (hereinafter Angell) (Jun. 10, 2009).
\37\Supra note 34.
\38\Id.
---------------------------------------------------------------------------
Despite outpacing other countries with investments in
health care, the U.S. fails to produce better health outcomes
in fundamental ways. OECD data shows that life expectancy in
the United States is lower than in any other high-income
country, as well as in many middle-income countries.\39\
Similarly, the infant mortality rate in the United States is
substantially higher than that of other developed countries.
While many factors other than health care expenditures may
affect life expectancy and infant mortality rates--for example,
demographics, lifestyle behaviors, income inequality, non-
health disparities, and measurement differences across
countries\40\--the Council of Economic Advisors (CEA) has
concluded that ``the fact that the United States lags behind
lower spending countries is strongly suggestive of substantial
inefficiency in our current system.''\41\ Indeed, according to
estimates by the CEA based on the spending and outcomes in
other countries, efficiency improvements in the U.S. health
care system potentially could free up resources equal to 5
percent of U.S. GDP.\42\
---------------------------------------------------------------------------
\39\Id.
\40\Robert Wood Johnson Foundation, Commission to Build a Healthier
America, ``Beyond Health Care: New Directions to a Healthier America''
(Apr. 2009).
\41\Supra note 34.
\42\Id.
---------------------------------------------------------------------------
Analyzing health care spending over time, the CEA also
notes that while health care spending has increased in other
countries as well, the spending by the U.S. has not yielded the
same outcomes as other countries. In 1970, the United States
devoted only a moderately higher fraction of GDP to health care
than other high-income countries, whereas in 2009 the United
States spends dramatically more.\43\ Yet, during that same
period, life expectancy has actually risen less in the United
States than in other countries.\44\ This data suggests that
much of the increased U.S. spending is inefficient.\45\
---------------------------------------------------------------------------
\43\Id.
\44\Garber, Alan M., and J. Skinner, ``Is American Health Care
Uniquely Inefficient?'' Journal of Economic Perspectives (2008) at 27-
50.
\45\Supra note 34.
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Cost of the Uninsured
While the U.S. health care system currently leaves 47
million Americans uninsured\46\ and approximately 25 million
underinsured,\47\ the CEA projects that the number of uninsured
could increase to 72 million by 2040.\48\ Such increases in the
numbers of uninsured people will create additional
uncompensated care costs, which include costs incurred by
hospitals and physicians for the charity care they provide to
the uninsured as well as bad debt such as unpaid bills.\49\
Both the federal government and state governments use tax
revenues to pay health care providers for a portion of these
costs through programs such as Disproportionate Share Hospital
(DSH) payments and grants to Community Health Centers.\50\ In
2008, total government spending to reimburse uncompensated care
costs incurred by medical providers was approximately $42.9
billion.\51\ The CEA projects that if the U.S. does not slow
the real growth rate of health spending and a subsequent rise
in the uninsured, the real annual tax burden of uncompensated
care for an average family of four will rise from $627 in 2008
to $1,652 (in 2008 dollars) by 2030.\52\
---------------------------------------------------------------------------
\46\National Coalition on Health Care, available at: www.nchc.org/
facts/cost.shtml (2009).
\47\``How Many Are Underinsured? Trends Among U.S. Adults, 2003 and
2007,'' Commonwealth Fund (2008)
\48\Supra note 34.
\49\American Hospital Association, ``Uncompensated Hospital Care
Fact Sheet'' (Nov. 2005), available at http:\\www.aha.org/aha/content/
2005/pdf/0511 UncompensatedCareFactSheet.pdf.
\50\Hadley, Jack, J. Holahan, T. Coughlin, and D. Miller.
``Covering the Uninsured in 2008: Current Costs, Sources of Payment,
and Incremental Costs,'' Health Affairs (2008).
\51\Id.
\52\Supra note 34.
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Costs to Individuals and Families
As the cost of health care skyrockets, families and
employers offering health insurance struggle to absorb the
increased costs. In 2008, employer-based premiums increased by
5 percent. That growth was even greater for small firms. On
average, they incurred a premium increase of 5.5 percent, and,
for those with 24 or fewer workers, their respective increase
was 6.8 percent.\53\ Much of the increase in health care costs
has been shifted onto workers. In 2008, the average annual
premium for a family of four was $12,700, and workers
contributed approximately $3,400 of that total which was 12
percent more than the year before. Workers are now paying
$1,600 more for family coverage than they did 10 years ago.\54\
Over the last decade, health care costs have risen on average
four times faster than workers' earnings.\55\
---------------------------------------------------------------------------
\53\The Henry J. Kaiser Family Foundation. Employee Health
Benefits: 2008 Annual Survey, (Sept. 2008).
\54\Angell.
\55\See, National Coalition on Health Care, available at:
www.nchc.org/facts/cost.shtml (2009).
---------------------------------------------------------------------------
These dramatic increases in health care costs have serious
implications for American households. Some economists believe
that, over the long run, workers pay for the rising cost of
health insurance through lower wages.\56\ To illustrate this
relationship, the CEA has analyzed historical and projected
average annual total compensation (measured in 2008 dollars),
which includes wages as well as non-wage benefits such as
health insurance.\57\ Their analysis indicates that health
insurance premiums are growing more rapidly than total
compensation in percentage terms, and as a result, an
increasing share of total compensation that a worker receives
goes to cover health insurance premiums.\58\ Moreover, the CEA
notes that households with employer-sponsored health insurance
could also be affected by rapid cost growth as employers shift
to less generous plans with higher annual deductibles.\59\ It
is important to note, however, that the wage stagnation
experienced by workers over recent decades cannot be attributed
solely to rising health care costs. For example, low-wage
workers have experienced real wage declines in recent years
despite few such workers having access to or participating in
employment-based health insurance coverage.\60\ More economic
dynamics are at work in the wage squeeze on workers, but rising
health costs contribute to the downward pressure.
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\56\Pauly, Mark V., ``Health Benefits at Work: An Economic and
Political Analysis of Employment-Based Health Insurance'' (1998).
\57\Supra note 34 (relying on the 1996 to 2006 Medical Expenditure
Panel Survey-Insurance Component).
\58\Id.
\59\Id.
\60\Economic Policy Institute, ``Increasing Health Costs Can't
Explain Earnings Dip for Low-Wage Workers,'' Economic Snapshot (April
12, 2006).
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H.R. 3200 Will Increase Standards of Living and Create New Jobs
By slowing the growth in health care costs, standards of
living will improve and resources will be freed to improve and
expand the health care system. The CEA projects that slowing
growth by 1.5 percentage points per year will save a family
$2,600 by 2020.\61\ By 2030 that savings would be increased to
nearly $10,000.\62\
---------------------------------------------------------------------------
\61\Supra note 34.
\62\Id.
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Furthermore, the CEA estimates that the coverage expansions
that will result from health reform will produce a net benefit
of approximately $100 billion a year, or about two-thirds of a
percent of GDP.\63\ According to its analysis, health care
reform will lower the unemployment rate in the United States
and could add as many as 500,000 jobs on an annual basis.\64\
By producing a more healthy and productive workforce, health
care reform will improve standards of living and help
strengthen the U.S. economy.
---------------------------------------------------------------------------
\63\Id.
\64\Id.
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Shared Responsibility & Employment-Based Health Care Insurance
In order to control costs and expand access to quality
affordable health care, everyone must be covered and employers,
individuals and the government must share in this
responsibility. Consistent with the minimum wage and overtime
laws, H.R. 3200 creates a fundamental right to a minimum level
of health care contribution and/or coverage through an
employer. As noted earlier, two-thirds of Americans receive
health coverage through an employer, and H.R. 3200 builds upon
the current employer-based system by implementing a `pay or
play' requirement.
The employer responsibility to provide and/or contribute to
the health care of its workers will stabilize the employer-
based health care system. Because the Employee Retirement
Income Security Act of 1974 (ERISA) currently contains no
requirement that an employer offer employee benefits, employers
who do not offer health insurance to their workers gain an
unfair economic advantage relative to those employers who do
provide coverage, and millions of hard-working Americans and
their families are left without health insurance. It is a
vicious cycle because these uninsured workers turn to emergency
rooms for health care which in turn increases costs for
employers and families with health insurance. It is estimated
that in 2008 premiums were about 8 percent or $1,100 higher due
to this hidden cost shift.\65\
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\65\Ben Furnas and Peter Harbage, ``The Cost Shift from the
Uninsured,'' The Center for American Progress (Mar. 2009).
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Strengthening the Employer-Based System
Millions of employers voluntarily decide to offer health
benefits because it is in their economic interest. Employers
are not taxed on their contributions to employees' health care,
and these costs are deductible as a business expense.\66\ In
addition, large employers can offer health care coverage at a
much lower cost because they can negotiate with insurers and
have a larger pool of employees to spread the risk.
Furthermore, employers recognize that investments in health
care can produce gains in employee health which means fewer
missed days, higher productivity and better overall job
satisfaction.
---------------------------------------------------------------------------
\66\Paul Ginsburg, ``Employment-Based Health Benefits Under
Universal Coverage,'' Health Affairs (May/June 2008) at 675.
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Despite the incentives to offer health coverage,
skyrocketing health care costs make it difficult for employers,
particularly small businesses, to offer comprehensive health
insurance. As noted earlier, while approximately 63 percent of
the under-65 population and their dependents have insurance
through employment,\67\ the number of employers offering health
care coverage has been declining over the last decade. The
number of people getting health coverage through an employer
dropped by 3 million between 2000 and 2007,\68\ largely due to
increasing costs. In addition, the Center for American Progress
projects that as a result of layoffs, approximately 14,000
Americans lose their employer-sponsored coverage each day.\69\
Overall, since 1999 premiums have increased 120 percent and at
a rate that is on average four times faster than workers'
earnings.\70\
---------------------------------------------------------------------------
\67\Supra note 10.
\68\Id.
\69\Center for American Progress (Feb. 2009), available at:
http:\\www.americanprogressaction.org/issues/2009/03/health--
losses.html.
\70\National Coalition on Health Care, ``Health Insurance Costs,''
(2009), available at: www.nchc.org/facts/cost.shtml
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However, even without an employer shared responsibility
requirement, 86 percent of employers surveyed report that they
will continue offering health care despite increasing
costs.\71\ Many of these employers are large ones who use
health care benefits as a means to recruit and retain
employees. Health care benefits are ``highly valued by
employees, and risk-averse employers may be reluctant to take
advantage of the option of dropping coverage'' even though they
can currently do so.\72\
---------------------------------------------------------------------------
\71\Supra note 61.
\72\Hacker at 10.
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H.R. 3200 generally will not change what many employers are
already doing. Beginning in 2013, the bill requires employers
already offering health insurance to make an offer to all full-
time employees and contribute 72.5 percent of the cost toward
an individual policy and 65 percent toward a family policy.
Today, employers on average contribute 83 percent toward the
coverage of individual premiums and 71 percent toward the
coverage of family premiums.\73\
---------------------------------------------------------------------------
\73\``Employee Benefits in the United States, March 2008,'' Bureau
of Labor Statistics (Aug. 7, 2008).
---------------------------------------------------------------------------
The second phase of requirements under H.R. 3200 for
existing employer health plans does not take effect until the
end of 2018. At that time, in addition to making the required
contribution amount, every employer-sponsored health plan will
have to, at a minimum meet the essential benefit standards
defined by the benefits committee, as well as satisfy the
insurance reform standards specified in the bill. Employer
health insurance plans will be required to be equivalent to no
less than 70 percent of the actuarial value minus the cost
sharing components of the essential benefit package. The
majority of employers already meet this standard. According to
the Congressional Research Service, the typical employer-
sponsored PPO has an estimated actuarial value between 80-84
percent, while the typical employer-sponsored health savings
account (HSA) and a qualified high deductible health plan
(HDHP) has an estimated actuarial value of 76 percent,
excluding contributions by an employer.\74\
---------------------------------------------------------------------------
\74\Chris Peterson, ``Setting and Valuing Health Insurance
Benefits,'' Congressional Research Service (May 29, 2009) at 3-4.
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While many employer plans already meet the bill's
requirements, there are some notable omissions. For example, 10
percent of employer plans do not offer mental health and
substance use disorder benefits and many include caps on
lifetime limits and out of pocket expenses. In these cases,
employers will have over 8 years to modify their plans and meet
the requirements. Finally, H.R. 3200 extends the same benefit
and insurance reform standards in all new employer and HIE
plans, so that individuals and families have access in either
case to affordable quality health coverage.
Protecting Small Business
For small business, health reform ``is their number one
need.''\75\ Forty-percent report that high costs have a
``negative effect on other parts of their business, such as
high employee turnover or preventing business growth.''\76\
According to the Small Business Majority, a non-profit
independent group representing 27 million small businesses,
small businesses spend 18 percent more than large employers for
health care coverage.\77\ The result is that in 2008, the
percent of firms offering health insurance with three to nine
employees dropped from 57 percent to 49 percent.\78\
---------------------------------------------------------------------------
\75\John Arensmeyer, Testimony before the Committee on Education
and Labor Committee, ``The Tri-Committee Draft for Health Care
Reform,'' (hereinafter Arensmeyer)(Jun. 23, 2009) at 1.
\76\Taking the Pulse on Main Street, ``Small Businesses, Health
Insurance and Priorities for Reform (Jan. 2009).
\77\Arensmeyer at 2.
\78\Id.
---------------------------------------------------------------------------
Small businesses have small purchasing pools and one of the
biggest obstacles they face in securing affordable health
coverage is the lack of bargaining power they have against the
insurance companies. In addition, the administrative costs paid
by small businesses can be up to 27 percent of premiums to pay
for marketing and paperwork costs and underwriting.\79\
---------------------------------------------------------------------------
\79\``The Economic Impact of Healthcare Reform on Small Business,''
Small Business Majority (Jun. 11, 2009) .
---------------------------------------------------------------------------
LaShonda Young, a small business owner, testified to the
Committee about the problems she has had in seeking coverage
for her forty employees. She received eight bids and each was
from the same insurance company. She testified her experience
isn't unique, as there are only one or two health insurers in
her area.\80\ She went on to testify that, ``it's been years
since we've been able to afford group health insurance . . . we
got quotes from a couple of different places, [the] quotes came
in at about 13 percent of payroll. [We're] willing to pay our
fair share but we just couldn't afford 13 percent . . . ''\81\
Even if she was able to afford the coverage, she knew that it
wouldn't cover the pre-existing conditions of her employees for
up to 18 months and there was no guarantee the costs would
remain stable.\82\ As a result, small employers like Young are
looking to other ways to help their employees find coverage on
their own. Young testified that her company offers small
stipends to employees to buy insurance on their own.
---------------------------------------------------------------------------
\80\LaShonda Young, Testimony before the Committee on Education and
Labor Committee, ``The Tri-Committee Draft for Health Care Reform,''
(hereinafter Young)(Jun. 23, 2009) at 2.
\81\Young at 2.
\82\Id.
---------------------------------------------------------------------------
High health care costs also present an enormous obstacle
for those trying to start or maintain a new business. While
small businesses have traditionally played an essential role
during prior economic recoveries, the high cost of health care
is deterring entrepreneurs from starting a business in the
first place. Louise Hardaway started her own business near
Nashville, Tennessee. When attempting to get health care
insurance she was quoted $12,800 a month to cover herself, her
husband, business partner, and her business partner's spouse
and child. Due to her inability to find affordable health care
coverage Ms. Hardaway went out of business and went to work for
another company where she could get health care.\83\
---------------------------------------------------------------------------
\83\Simona Covel, ``Sick and Getting Sicker,'' Wall St. Journal
(Jul. 23, 2009).
---------------------------------------------------------------------------
Recognizing the economic reality for many small businesses,
in addition to driving down health care costs overall, H.R.
3200 contains numerous provisions such as tax credits and
access to the HIE to help these employers provide coverage and
alleviate their costs. In addition, the bill exempts employers
from the pay or play requirement if they have payrolls of
$250,000 or less. For employers with payrolls above $250,000
who choose not to offer coverage and would rather pay a
penalty, that penalty is phased-up so that only employers with
payrolls over $400,000 must pay the 8 percent penalty.
The Small Business Majority reports that small businesses,
workers and the economy stand to save billions of dollars with
the enactment of health care reform.\84\ Absent health care
reform small businesses will spend $2.4 trillion in health care
costs over the next ten years. With health reform, small
businesses will save 36 percent of those costs, as much as $855
billion. Without health reform, small businesses stand to lose
$52.1 billion in profits due to high health care costs over the
next ten years. Health reform will decrease these losses and
save $29.2 billion. Reduced health care costs will allow
employers to reinvest in their business and their workers.
Without health reform, individuals working for small businesses
could lose up to $834 billion in lost wages as employers pass
increased health care costs onto their employees over the next
ten years. Health reform could save workers over $300 billion
over the next ten years.\85\ Reduced health care costs will
allow employers to reinvest in their business and their
workers.
---------------------------------------------------------------------------
\84\Supra note 76.
\85\Id.
---------------------------------------------------------------------------
THE HEALTH INSURANCE EXCHANGE WILL HELP SMALL EMPLOYERS
H.R. 3200 creates a health insurance exchange (HIE) for the
uninsured and employees of small businesses to purchase health
insurance in the initial years after enactment. Due to the
disadvantages small businesses face when trying to purchase
health care coverage on their own, both proponents and
opponents of the bill believe that a health insurance exchange
is essential for small business: ``a broad, well-functioning
marketplace offering consistency, fairness and healthy
competition will vastly improve the availability and
affordability of coverage to small businesses and the self-
employed.''\86\ Furthermore, it ``can be a vehicle that
facilitates and monitors the movement of the system toward
achievements of many national health care reform goals.''
Eighty-percent of small business owners in a recent state
survey stated they favor a health insurance pool that they can
put their employees into to buy coverage.\87\
---------------------------------------------------------------------------
\86\Arensmeyer at 4.
\87\Id.
---------------------------------------------------------------------------
A health insurance exchange is an organized marketplace
where individuals and some employers can go to purchase health
insurance. The HIE is advantageous to those looking to purchase
insurance because it provides transparency when individuals and
families shop for their health insurance. Currently, insurers
are regulated by a patchwork of state laws. Beyond licensing
requirements to sell insurance, private health insurance
companies and health maintenance organizations (HMO) operate
with considerable autonomy. The result is that policies can
vary greatly and many policies leave people underinsured.
The robust HIE will not only organize the marketplace but
also include insurance reforms and consumer protections,
administer affordability credits, and provide people with
choice of plans. The HIE will require that insurers, both
private and public, adhere to the same rules. To help consumers
make educated decisions the Commissioner will conduct outreach
and provide assistance to consumers. The Commissioner will
ensure that information is readily available in plain language
and is provided in a culturally and linguistically appropriate
manner. Furthermore, qualified health benefits plans (QHBP)
including those participating in the HIE will be required to
comply with transparency requirements established by the
Commissioner, including the accurate and timely disclosure of
plan documents, plan terms and conditions, as well as
information on cost-sharing and payments with respect to out-
of-network coverage, claims denials and other information to
help educate consumers.
In addition to monitoring and streamlining the insurance
industry, the HIE will play a significant role in containing
health care costs. Health care costs are comprised of both the
underlying costs of providing health care services as well as
the administrative costs related to the provisions of
coverage.\88\ The HIE will require participating plans to offer
standardized benefit packages which will increase the ability
to compare plans and ``reinforce incentives for insurers to
price premiums as competitively as possible.''\89\ Lower cost
plans in the HIE will help those employers who ``play'' by
putting their employees into HIE because they will be
responsible for a set contribution amount regardless of the
plan an employee choose.\90\ Furthermore, the affordability
credits available to individuals in the HIE who do not enter
the exchange with an employer contribution are tied to the
average of the lowest three plans which will then incentivize
individuals to choose low-cost plans. By the same token,
insurers will be incentivized to offer low-cost plans in order
to get more business.\91\
---------------------------------------------------------------------------
\88\Linda Bloomberg and Karen Pollitz, ``Health Insurance
Exchanges: Organizing Health Insurance Marketplaces to Promote Health
Reform Goals'' (Apr. 2009).
\89\Id.
\90\However, an employer is always permitted to contribute an
amount greater than the minimum should it choose.
\91\Id.
---------------------------------------------------------------------------
Access & Cost Containment Through A Public Health Insurance Option
The inclusion of a strong public health insurance option in
the HIE will save over one hundred billion dollars and provide
choice to millions of consumers who currently have little or no
choice when looking for a health plan. Its inclusion in the HIE
will promote value and innovation in the private health
insurance industry by increasing competition. The result is
that the public option will lower costs for consumers across
the private market.
The public health insurance option will provide access to
meaningful choice, something many Americans have never had when
searching for a health plan. Many areas only have one or two
dominant insurance options that control the market and thus
have no downward pressure on costs.\92\Furthermore, ``it is
often in [these insurers'] interest to pay higher rates to key
doctors and hospitals because they can pass on these costs to
individuals and employers.''\93\ For insurers trying to enter a
market, this practice makes it difficult for them to compete
and reduce costs.
---------------------------------------------------------------------------
\92\Hacker at 5.
\93\Id.
---------------------------------------------------------------------------
While the public option will be subject to the same
standards as private plans, the public option can use
administrative efficiencies to control costs. On average,
private insurance overhead was about 11.7 percent of premiums
which is significantly higher when compared to public insurers
(Medicare is estimated at 3.6 percent and Medicaid at 6.8
percent).\94\ In addition, because the public option is a
health plan available nationwide it will have a broad reach and
be able to obtain larger volume discounts and will not operate
for profit.\95\ Accordingly, the public option in H.R. 3200
will serve as a ``benchmark for private plans, a backup to
allow consumers access to a good plan with broad access to
providers in all parts of the country, and to serve as a cost-
control backstop.''\96\
---------------------------------------------------------------------------
\94\John Holahan and Linda Blumberg, ``Can a Public Insurance Plan
Increase Competition and Lower the Costs of Health Reform,'' Urban
Institute (2009).
\95\Hacker at 7.
\96\Id.
---------------------------------------------------------------------------
Ultimately, it will be up to consumers in the HIE to decide
whether to enroll in the public option or a private plan. H.R.
3200 intends to create a level playing field for both to
compete. Consumers will be able to compare what each plan
offers--private plans or the public option--and decide which
plan serves them and their families best.\97\
---------------------------------------------------------------------------
\97\Id.
---------------------------------------------------------------------------
Ensuring Access to Health Care Through Insurance Market Reforms
Comprehensive insurance reforms are another critical
element of health reform. Guaranteeing access to health care
and protecting against medical debt largely depends on
implementing comprehensive insurance reforms. About ``20
percent of the population accounts for 80 percent of health
spending;'' the ``sickest one-percent accounting for nearly
one-quarter of health expenditures.''\98\ This uneven
distribution of medical care creates incentives for insurance
companies to avoid risk altogether rather than trying to spread
it among the insured population.\99\ As a result, health
insurers--particularly in the individual market--have adopted
discriminatory, but not illegal, practices to cherry-pick
healthy people and to weed out those who are not as
healthy.\100\ These practices include: denying health coverage
based on pre-existing conditions or medical history,\101\ even
minor ones; charging higher, and often unaffordable, rates
based on one's health; excluding pre-existing medical
conditions from coverage; charging different premiums based on
gender;\102\ and rescinding policies after claims are made
based on an assertion that an insured's original application
was incomplete.\103\ In addition, while ``state and federal
laws give individuals the right to renew their health insurance
coverage, guaranteed renewability provides no protection
against rate increases.''\104\
---------------------------------------------------------------------------
\98\Karen Pollitz, testimony before the Committee on Energy and
Commerce, Subcommittee on Health (hereinafter Pollitz) (Mar. 17, 2009).
\99\Linda Blumberg, testimony before the Committee on Ways And
Means (April 22, 2009).
\100\Mila Kofman, testimony before the Committee on Energy and
Commerce, Subcommittee on ealth (hereinafter Koffman)(Mar. 17, 2009);
Blumberg, supra 94.
\101\See Fran Visco, testimony before the Committee on Education
and Labor (June 22, 2009). Ms Visco testifying on behalf of the
National Breast Coalition, stressed how no insurance or inadequate
insurance has had a devastating effect on women diagnosed with breast
cancer.
\102\A 2008 report by the National Women's Law Center examined
individual insurance policies in 47 states and the District of Columbia
and found that most of the states engage in a practice called ``gender
rating'' where insurance companies arbitrarily charge women and men
different rates for individual insurance premiums. Specifically, they
found that women under 55 are charged more for health insurance than
men (at age 25, 4% to 45% more; at age 40, 4 to 48% more). In addition,
the report discovered that the vast majority of individual policies do
not cover maternity leave, and in 9 states and the District of
Columbia, insurers can reject survivors of domestic violence and those
who have had C-sections. See: Nowhere to Turn: How the Individual
Insurance Market Fails Women, National Women's Law Center (2008).
\103\Id, Pollitz, supra 98.
\104\Id.
---------------------------------------------------------------------------
Discrimination based on health, gender and other factors
has severe economic consequences for those who have been unable
to find affordable health coverage and for those who have
coverage, but are under-insured.\105\ As noted earlier, these
practices have resulted in about 57 million Americans having
debt because of medical bills,\106\ and over 42 million of that
number has some sort of medical coverage.\107\ Medical debt is
now the leading cause of personal bankruptcy.\108\
---------------------------------------------------------------------------
\105\Id; Pollitz, supra 98. While 47 million Americans have no
health insurance at all, almost as many are underinsured.
\106\Pollitz, supra 98, testified that ``when out-of-pocket
spending for medical bills (not including premiums) exceeds just 2.5%
of family income, patients become burdened by medical debt, face
barriers to accessing care, and have problems paying other bills.''
\107\Pollitz, supra 98.
\108\David U. Himmelstein, Deborah Thorne, Elizabeth Warren,
Steffie Woolhandler, Medical Bankruptcy in the United States, 2007, The
American Journal of Medicine (2009) at 3, finding that in 2007, 62.1%
of all bankruptcies in the United States were medical, compared with 8
percent in 2001. See also: Pollitz, supra 98; Kofman, supra 100, both
of whom testified that most medical bankruptcies are filed by insured
people.
---------------------------------------------------------------------------
A key element to health reform is to prohibit risk
selection practices and to support those factors based on
quality and efficiency. Where states have prohibited these
discriminatory practices, consumers have benefitted. For
example, since 1993, Maine requires insurers to provide health
insurance to individuals or small businesses on a ``guarantee
issue'' basis. In addition, it also has an ``adjusted community
rating'' so that prices for policies are set based on ``the
collective claims experience of anyone with a policy'' and not
on any one individual's medical history.\109\
---------------------------------------------------------------------------
\109\Kofman, supra 100.
---------------------------------------------------------------------------
H.R. 3200 includes insurance market reforms ending
discriminatory practices conducted by insurance companies.
These reforms will apply both inside and outside the HIE to end
the discriminatory practices currently practiced by insurance
companies. The bill requires that all policies be sold on a
guaranteed issue basis; prohibits insurers from excluding
coverage based on pre-existing conditions; and prohibits
insurers from charging higher rates based on health status,
gender, or other factors. It would allow premiums to vary based
only on age (no more than 2:1),\110\ geography and family size.
In addition, the bill prohibits lifetime and annual limits on
benefits so that families no longer face bankruptcy as a result
of a serious medical illness.
---------------------------------------------------------------------------
\110\Pollitz, supra 98, testified that age is ``a strong proxy for
health status.''
---------------------------------------------------------------------------
STRENGTHENING THE HEALTH CARE WORKFORCE
As millions of new people gain access to health care
coverage, H.R. 3200 recognizes that significant investments in
the health care workforce are needed. There is mounting
evidence that the nationwide healthcare workforce shortage is
accelerating. The Health Resources and Services Administration,
within the Department of Health and Human Services, reported in
January of this year that twenty states were experiencing
scarcities of physicians and nurses.\111\ In particular,
dramatic shortages in the health care workforce are seen in
primary care and nursing.
---------------------------------------------------------------------------
\111\See, http:\\newsroom.hrsa.gov/insidehrsa/jan2009
---------------------------------------------------------------------------
Indeed, demand for primary care physicians outpaces supply
more than in other specialty group.\112\ Specifically, the
Association of American Medical Colleges (AAMC) estimates that
primary care accounts for 37 percent of the total projected
shortage in 2025.\113\ Primary care physicians are leaving the
practice of medicine sooner than other physician specialties at
the same time that fewer medical students and residents are
choosing to make the practice of general internal medicine and
primary care their central career goal.\114\ For many students,
the costs of medical education are so high that they feel
compelled to specialize in more lucrative subspecialties in
order to manage their debt.\115\
---------------------------------------------------------------------------
\112\``The Complexities of Physician Supply and Demand: Projections
Through 2025,'' Association of American Medical Colleges (AAMC) (Nov.
2008).
\113\Id.
\114\Lipner RS, Bylsma WH. Arnold GK, Fortna GS, Tooker J. Cassel
CK. Who is maintaining certification in internal medicine-and why? A
national survey 10 years after initial certification. Ann Intern Med.
(2005)
\115\Pear, Robert. ``Shortage of Doctors an Obstacle to Obama
Goals.'' The NY Times (Apr. 26, 2009).
---------------------------------------------------------------------------
While registered nurses constitute the largest single
healthcare profession in the United States, there is a
worsening nursing shortage.\116\ In 2000, the national supply
of full time registered nurses was estimated at 1.89 million
while the demand was estimated at 2 million, a shortage of
110,000 nurses.\117\ Studies published in both The New England
Journal of Medicine and The Journal of the American Medical
Association confirms that the shortage of registered nurses is
influencing the delivery of health care in the United States
and negatively affecting patient outcomes.\118\
---------------------------------------------------------------------------
\116\See, Henry J. Kaiser Family Foundation, ``Addressing the
Nursing Shortage'' (Jun. 2008).
\117\Id.
\118\Id.
---------------------------------------------------------------------------
The current nursing shortage is a product of several trends
including: a diminishing pipeline of new students to nursing, a
decline in RN earnings relative to other career options, an
aging nursing workforce, low job satisfaction and poor working
conditions that contribute to high attrition rates.\119\
Compounding these problems is the fact that nursing colleges
and universities across the country are struggling to expand
enrollment to meet the rising demand for nursing care.
According to an American Association of Colleges of Nursing
report, nursing schools turned away 49,948 qualified applicants
from baccalaureate and graduate nursing programs in 2008 due to
insufficient number of faculty, clinical sites, classroom
space, clinical preceptors, and budget constraints.\120\
---------------------------------------------------------------------------
\119\Id.
\120\See, American Association of Colleges of Nursing, ``Enrollment
and Graduations in Baccalaureate and Graduate programs in Nursing
(2008-2009), available at: www.acne.nche.edu/IDS.
---------------------------------------------------------------------------
The shortage of health care workers in this country
disproportionately impacts those Americans residing in rural
areas. The National Health Service Corps (NHSC) was established
in the Emergency Health Personnel Act of 1970 (P.L. 91-623) to
improve the distribution of health workers in underserved rural
areas by providing scholarship support to students in qualified
medical professions in exchange for a period of service in a
Health Professional Shortage Area (HPSA).
Administered by the Health Resources and Services
Administration, in 2008, 14,000 students applied to the program
for financial assistance. However, the Agency was only budgeted
to grant one of every seven requests.\121\
---------------------------------------------------------------------------
\121\See, http:\\newsroom.hrsa.gov/insidersa/jan2009.
---------------------------------------------------------------------------
H.R. 3200 includes significant investments in the health
care workforce to directly address the shortages outlined. The
legislation provides resources to help train more primary care
physicians as well as registered nurses. It puts into place
incentives to encourage more people to become doctors and
nurses, particularly in rural areas. Specifically, the bill
increases funding for the National Health Service Corps in
order to expand scholarships and loans for health professionals
that work in shortage professions and areas. In addition, it
creates an advisory committee on health workforce evaluation to
assess the adequacy and appropriateness of the health
workforce, and to make recommendations to the Secretary of
Health and Human Services on federal workforce policies to
ensure the health workforce is meeting the nation's needs.
V. Section-by-Section Summary\122\
---------------------------------------------------------------------------
\122\This section-by-section summary is based in part on a summary
initially prepared by the Congressional Research Service elaborated
upon to reflect the views of the Committee.
---------------------------------------------------------------------------
Division I
Title I--Protections and Standards for Qualified Health Benefits Plans
Subtitle A--General Standards
Sec. 100. Purpose; Table of Contents of Division; General Definitions
Purpose
The purpose of this division is to provide affordable,
quality health care for all Americans and reduce the growth in
health care spending. In addition, this division achieves this
purpose by building on what works in today's health care
system, while repairing the aspects that are broken. Insurance
reforms that this division encompasses are:
Enacting insurance market reforms
Creating a new Health Insurance Exchange,
with a public health insurance option alongside private
plans
Including sliding scale affordability
credits
Initiating shared responsibility among
workers, employers, and the government
This division institutes health delivery system reforms
both to increase quality and to reduce growth in health
spending so that health care becomes more affordable for
businesses, families, and government.
General Definitions (Created within this Act)
Acceptable Coverage--qualified health benefits
plan coverage, coverage under a grandfathered health insurance
coverage or current group health plan, Medicare Part A,
Medicaid, Military Health System, coverage under Veteran's
Health Care Program (VA), and other coverage's the Secretary of
HHS in coordination with the Health Choices Commissioner sees
fit.
Basic Plan--a plan that offers the essential
benefits package's minimum requirements to be a qualified
health benefits plan.
Cost-sharing--includes deductibles, coinsurance,
copayments, and similar charges but does not include premiums
or any network payment differential for covered services or
spending for non-covered services.
Employment-Based Health Plan--the term given to
group health plans (as defined in section 733(a)(1) of ERISA--
(as an employee welfare benefit plan to the extent that plan
provides medical care to employees or their dependents, either
directly, through insurance or otherwise)), and is comprised of
federal and state government plans, tribal plans and church
plans. Following an amendment at Committee, this term was also
defined as excluding TRICARE.
Enhanced Plan--a plan that offers, in addition to
the level of benefits under a basic plan, a lower level of
cost-sharing equivalent to approximately 85 percent of the
actuarial value of the benefits provided.
Essential Benefits Package--health benefits
coverage, consistent with the standards set forth by the
Secretary no later than 18 months after enactment of this bill.
Health Benefits Plan--health insurance coverage
and a group health plan, including the public health insurance
option.
Health Insurance Exchange--created by this bill to
facilitate access of individuals and employers, through a
transparent process, to a variety of choices of affordable,
quality health insurance coverage, including a public health
insurance option.
Premium Plan--a plan that offers, in addition to
the level of benefits under a basic plan, a lower level of
cost-sharing equivalent to approximately 95 percent of the
actuarial value of the benefits provided.
Premium Plus Plan--a premium plan that also offers
additional benefits, such as oral health and vision care, all
of which is approved by the Commissioner.
Qualified Health Benefits Plan (QHBP)--a health
benefits plan that meets the requirements set forth in Title I
(by the Secretary) including the public health insurance
option.
QHBP Offering Entity--an entity can be any of the
following: a health benefits plan (that is a group health plan)
in which the employer is the main source of financing, health
insurance coverage which the insurance issuer is offering the
coverage, the public health insurance option, a non-federal
government plan established by the State or political
subdivision of a State, and a federal government plan.
Public Health Insurance Option--a public plan
(only available through the Health Insurance Exchange) with
payment rates established by the Secretary. The public option
would be required to offer basic, enhanced, and premium plans,
and would be allowed to offer premium-plus plans. Payment rates
for prescription drugs not covered by Medicare part A or B will
be covered by the public option at prices negotiated by the
Secretary.
Service Area, Premium Rating Area--with respect to
health insurance coverage: (1) if not within the Health
Insurance Exchange, an area established by a QHBP offering
entity of such coverage in accordance with applicable state law
or (2) within the Health Insurance Exchange, an area
established by such entity in accordance with state law and
applicable rules set forth by the Commissioner for exchange-
participating health benefits plans.
``State''--given term for purposes of the Medicaid
program, but only includes the 50 states and the District of
Columbia.
Y1, Y2, etc.--2013, 2014, etc.
Sec. 101. Requirements Reforming Health Insurance Marketplace
Current Law
Regulation of the private health insurance market is
primarily done at the state level. State regulatory authority
is broad in scope and includes requirements related to the
issuance and renewal of coverage, benefits, rating, consumer
protections, and other issues. Federal regulation of the
private market is more narrow in scope and applicable mostly to
employer-sponsored health insurance (i.e., through the Employee
Retirement Income Security Act of 1974 (ERISA)).
Proposed Law
This provision would require ``qualified health benefits
plans'' (QHBPs) to meet the new federal health insurance
standards specified in Subtitles B (relating to affordable
coverage), C (relating to essential benefits) and D (relating
to consumer protection) of Title I. The section also provides
terminology for the phrases ``enrollment in employment-based
health plans;'' and ``individual and group health insurance
coverage.''
This provision also includes a Sense of Congress that the
final bill must meaningfully address the health care needs of
the territories.
Sec. 102. Protecting the Choice to Keep Current Coverage
Current Law
See description under Sec. 101.
Proposed Law
``Grandfathered health insurance coverage'' would be
defined as individual health insurance coverage that is in
effect before the first day of 2013, as long as the insurance
carrier does not (1) enroll new individuals on or after the
first day of 2013 (would not affect subsequent enrollment of a
dependent); (2) change any terms or conditions of the
individual coverage, except as required by law; and (3) vary
the percentage increase in premiums for a risk group of
enrollees without changing the premium for all enrollees in the
same risk group at the same rate, as specified by the
Commissioner. The Commissioner would establish a five-year
grace period beginning in 2013 for existing group health plans
to transition to the new federal health insurance standards
applied to QHBPs. The grace period would not apply to limited
benefits plans specified in the provision, such as dental only,
vision only, flexible spending arrangements, and others.
Individual health insurance coverage that is not
grandfathered, may only be offered after the first day of 2013
as an Exchange-plan. Excepted benefits (e.g., accident or
disability insurance) could be offered as long as they are
offered and priced separately from health insurance coverage.
New group health plans would have to comply with this Act on
2013.
For purposes of the individual mandate (established under
title III of Division A), an individual would be required to
have ``acceptable coverage.'' In order for an individual health
insurance policy to be considered acceptable coverage, the
policy would be either grandfathered health insurance coverage
or offered through the HIE (established under title II of
Division A) or otherwise deemed or determined to be acceptable
coverage under the bill. Group health coverage, including group
health coverage consisting of a consumer-directed plan,
provided during the grace period would be considered acceptable
coverage.
Section 102(b)(3), providing an exception for treating
consumer-directed health plans and arrangements as acceptable
coverage, was added by an amendment which originally called for
a ``permanent'' exception. The word ``permanent'' was dropped
from the amendment by unanimous consent, as Members of the
Committee agreed that such exception for treating consumer-
directed health plans as acceptable coverage should only be
effective during the five-year grace period, not permanently.
Subtitle B--Standards Guaranteeing Access to Affordable Coverage
Sec. 111. Prohibiting Pre-Existing Condition Exclusions
Current Law
The Health Insurance Portability and Accountability Act of
1996 (HIPAA), which amended ERISA, limits the duration that
issuers in the group market may exclude coverage for pre-
existing health conditions for ``HIPAA eligible'' individuals,
among other provisions. Group plans may impose pre-existing
condition exclusions for no longer than 12 months (18 months in
the case of a late enrollee), and must decrease that exclusion
period by the number of months an enrollee had prior
``creditable coverage.'' HIPAA outright prohibits issuers in
the individual market from excluding coverage for pre-existing
conditions for HIPAA eligibles.
All states require health issuers to reduce the period of
time when coverage for pre-existing health conditions may be
excluded, in compliance with HIPAA. As of January 2009 in the
small group market, 21 states had pre-existing condition
exclusion rules that provided consumer protection above the
federal standard. And as of December 2008 in the individual
market, 42 states limit the period of time when coverage for
pre-existing health conditions may be excluded for non-HIPAA
eligible enrollees in that market.
Proposed Law
This provision would create a uniform minimum standard
prohibiting a qualified health benefits plan from excluding
coverage for pre-existing health conditions, or otherwise
limiting or conditioning such coverage with respect to an
individual or dependent based on any health status-related
factors. Such factors include health status, medical condition
(including both physical and mental illnesses), claims
experience, receipt of health care, medical history, genetic
information, evidence of insurability (including conditions
arising out of acts of domestic violence) and disability.
Sec. 112. Guaranteed Issue and Renewal for Insured Plans
Current Law
HIPAA requires that coverage sold to small groups (2-50
employees) must be sold on a guaranteed issue basis. That is,
the issuer must accept every small employer that applies for
coverage. (Guaranteed issue rules do not address premiums.)
HIPAA also guarantees that each issuer in the individual market
make at least two policies available (``guaranteed
availability'') to all HIPAA eligible individuals. In addition,
HIPAA guarantees renewal or continuation of group coverage at
the option of the plan sponsor (e.g., employer) and individual
coverage at the option of the individual, with some exceptions.
Insurers may not renew coverage under specified circumstances,
such as nonpayment of premiums or fraud.
All states require issuers to offer policies to firms with
2-50 workers on a guaranteed issue basis, in compliance with
HIPAA. As of January 2009 in the small group market, 13 states
also require issuers to offer policies on a guaranteed issue
basis to self-employed ``groups of one.'' And as of December
2008 in the individual market, 15 states require issuers to
offer some or all of their insurance products on a guaranteed
issue basis to non-HIPAA eligible individuals.
Proposed Law
This provision would require issuers to offer all health
insurance coverage on a guaranteed issue and renewal basis
beginning in 2013, whether offered through the HIE (established
under Subtitle A of Title II), through any employment-based
health plan, or otherwise. Rescissions of coverage would be
prohibited, except in cases of fraud.
Sec. 113. Insurance Rating Rules
Current Law
There are no federal rating rules applicable to the private
health insurance market. Most states currently impose rating
rules on insurance carriers in the small group and individual
markets. Existing state rating rules restrict an insurer's
ability to price insurance policies according to the risk of
the person or group seeking coverage, and vary from state to
state. Such restrictions may specify the case characteristics
(or risk factors) that may or may not be considered when
setting a premium, such as age. The spectrum of existing state
rating limitations ranges from pure community rating, to
adjusted (or modified) community rating, to rate bands, to no
restrictions. Pure community rating means that premiums cannot
vary based on any characteristic related to a person's or
group's risk, including health. Adjusted community rating means
that premiums cannot vary based on health, but may vary based
on other key risk factors, such as gender. Rate bands allow
premium variation based on health, but such variation is
limited according to a range specified by the state. Moreover,
both adjusted community rating and rate bands allow premium
variation based on any other permitted case characteristic,
such as industry. And for each characteristic, the state
typically specifies the amount of allowable variation. As of
January 2009 in the small group market, one state has pure
community rating rules, eleven have adjusted community rating
rules, and 35 have rate bands. As of December 2008 in the
individual market, two states have pure community rating rules,
five have adjusted community rating rules, and eleven have rate
bands.
There are no federally-established rating areas in the
private health insurance market. However, some states have
enacted rating rules in the individual and small group markets
that include geographic location as a factor on which premiums
may vary. In these cases, the state has established rating
areas. Typically, states use counties or zip codes to define
those areas.
Proposed Law
This provision would impose new federal rating rules on
qualified health benefits plans. QHBP premiums would vary only
by age (by no more than a 2:1 ratio within age categories
specified by the Commissioner (established under Sec. 141)),
premium rating area (as permitted by state regulators or, in
the case of an Exchange plan, as specified by the
Commissioner), and family enrollment (as specified under State
law and consistent with Commissioner rules).
The Commissioner, in coordination with the Secretaries of
Health and Human Services (HHS) and Labor, would conduct a
study of the large group market to examine (1) characteristics
of employers who purchase fully-insured health insurance
products and employers who self-fund health benefits, including
characteristics related to bearing risk and solvency, and (2)
the extent to which rating rules cause adverse selection in the
large group market or encourage small and mid-size employers to
self-insure health benefits. The Commissioner would submit this
report to Congress and the applicable agencies no later than 18
months after enactment, and include any recommendations to
ensure that the law does not provide incentives for small and
mid-size employers to self-insure or create adverse selection
in the risk pools of large group insurers and self-insured
employers.
Sec. 114. Nondiscrimination in Benefits
Current Law
HIPAA established federal rules regarding non-
discrimination based on health status-related factors. It
prohibits group issuers from establishing rules for eligibility
and premium contributions based on health status-related
factors. Those factors include health status, medical condition
(including both physical and mental illnesses), claims
experience, receipt of health care, medical history, genetic
information, evidence of insurability (including conditions
arising out of acts of domestic violence) and disability. In
addition, the Genetic Information Nondiscrimination Act of 2008
prohibits issuers in the individual health insurance market
from establishing eligibility rules (including continued
eligibility) based on an individual's genetic information, and
the Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008 establishes that if an employer
provides mental health benefits there must be parity with
physical health benefits.
Proposed Law
This provision would require QHBPs to comply with non-
discrimination standards regarding health benefits or benefit
structures established by the Commissioner, building on
existing federal non-discrimination rules in ERISA, the Public
Health Service Act (PHSA), and the Internal Revenue Code of
1986. Existing mental health parity rules, apply to QHBPs,
regardless of whether coverage is offered in the individual or
group market.
Sec. 115. Ensuring Adequacy of Provider Networks
Current Law
HIPAA established special rules for network plans. It
allows small group issuers to (1) limit the employers that
apply for coverage to those firms with eligible individuals who
live or work in the network service area, and (2) deny coverage
to small employers if the issuer demonstrates (if required) to
the State that it has limited provider capacity due to
obligations to existing enrollees and it is applying this
decision uniformly without regard to claims experience or
health status-related factors. HIPAA also prohibits a small
group issuer that has denied coverage in any service area to
offer small group coverage in that area for 180 days after the
denial.
Proposed Law
This provision would require QHBPs that use provider
networks to meet provider network standards that may be
established by the Commissioner to ensure the adequacy of
networks, and transparency in the cost-sharing differences
between in- and out-of-network coverage. The term ``provider
network'' means the providers with respect to covered benefits,
treatments, and services available under a health benefit plan.
Sec. 116. Ensuring Value and Lower Premiums
Current Law
Medical loss ratio is the share of total premium revenue
spent on medical claims. Medigap insurance policies are private
supplemental health care policies that Medicare beneficiaries
can purchase to help cover some items, services, and cost
sharing not covered under Medicare. Medigap plans are required
to have a minimum medical loss ratio of 65 percent for
individual policies and 75 percent for group policies. In
addition, most states impose medical loss ratios or related
requirements on insurers in the individual and/or small group
health insurance markets.
Proposed Law
This provision would require a QHBP to comply with a
medical loss ratio standard to be determined by the
Commissioner but not less than 85 percent. For any QHBP that
does not meet such a standard, it would be required to provide
rebates to enrollees, in a manner specified by the
Commissioner, in sufficient amounts to meet such a loss ratio.
To establish the medical loss ratio standard, the Commissioner
would build on the definition and methodology, developed by the
HHS Secretary under Section 161, for determining how to
calculate such a ratio. The methodology would set the highest
ratio possible to ensure adequate QHBP participation,
competition both in and out of the HIE, and value for consumers
so that their premium contributions are used for medical
claims.
Sec. 117. Consistency of costs and coverage under qualified health
benefits plans during plan year
This provision would prohibit insurance companies from
changing the coverage or costs of a health plan mid-year except
if the costs are lowered and/or the coverage is increased.
Subtitle C--Standards Guaranteeing Access to Essential Benefits
Sec. 121. Coverage of Essential Benefits Package
Current Law
There are limited federal benefit mandates for health
insurance. These standards were added to the Health Insurance
Portability and Accountability Act of 1996 (HIPAA), and are
described in the discussion of Section 122, below.
Proposed Law
This provision would require a ``qualified health benefits
plans (QHBP)'' to cover at least an ``essential benefit
package.'' QHBPs could be offered in or outside of an Exchange.
QHBPs offered outside of an Exchange would be allowed to offer
additional benefits beyond those specified in the essential
benefits package. For QHBPs offered through the Exchange, a
plan offering a premium-plus level of benefits (established
under Section 203) could provide additional benefits.
The requirements under Division A would not affect the
offering of limited-purpose benefit plans, including policies
covering dental or vision treatment, long-term care, Medicare
supplement policies, workers' compensation, and other similar
benefits, if such benefit plans are offered under a separate
policy, contract, or certificate of insurance.
A QHBP would not be allowed to impose coverage restrictions
(except cost sharing) unrelated to the clinical appropriateness
of the health care items and services.
Sec. 122. Essential Benefit Package Defined
Current Law
Federally mandated benefits. Laws are found in the Employee
Retirement Income Security Act (ERISA--covering employer-
sponsored plans), the Public Health Service Act (PHSA--covering
insurance plans and state and local government plans), and the
Internal Revenue Code (IRC--covers Church plans in certain
circumstances).
Those mandates include:
The Paul Wellstone and Pete Domenici Mental Health
Parity and Addiction Equity Act of 2008 established that
employers who offer mental health and substance use disorder
benefits must offer them in an equal manner as physical health
benefits are offered. The Newborns' and Mothers' Health
Protection Act of 1996 (NMHPA) requires plans that offer
maternity coverage to pay for at least a 48-hour hospital stay
following childbirth (96-hour stay in the case of a cesarean
section).
The Women's Health and Cancer Rights Act of 1998
contains protections for patients who elect breast
reconstruction in connection with a mastectomy. For plan
participants and beneficiaries receiving benefits in connection
with a mastectomy, plans offering coverage for a mastectomy
must also cover reconstructive surgery and other benefits
related to a mastectomy.
The Genetic Information Nondiscrimination Act of
2008 (GINA) prohibits discrimination based on genetic
information by health insurers and employers. GINA strengthens
and clarifies existing HIPAA nondiscrimination and portability
provisions. Broadly, GINA prohibits health insurers from
engaging in three practices: (1) using genetic information
about an individual to adjust a group plan's premiums, or, in
the case of individual plans, to deny coverage, adjust
premiums, or impose a preexisting condition exclusion; (2)
requiring or requesting genetic testing; and (3) requesting,
requiring, or purchasing genetic information for underwriting
purposes.
Michelle's Law ensures that dependent post
secondary education students who take a medically necessary
leave of absence do not lose health insurance coverage. The law
provides that a group health plan may not terminate a college
student's health coverage simply because the student takes a
medically necessary leave of absence from school or changes to
part-time status. The leave of absence must be medically
necessary, begin while the student is suffering from a serious
illness or injury and would otherwise result in a loss of
coverage.
Similarly, the Advisory Committee on Immunization Practices
(ACIP), administered by the Centers for Disease Control and
Prevention (CDC), reviews scientific evidence and makes
recommendations to the Secretary and the CDC Director for the
routine administration of vaccines to children, adolescents,
and adults in the U.S. civilian population. The ACIP is not
explicitly authorized; rather, it is based in general
authorities of the Secretary in Titles II and III of the PHSA.
Proposed Law
This provision would require the essential benefits package
to cover specified items and services, limit cost sharing,
prohibit annual and lifetime limits on covered services, ensure
the adequacy of provider networks, and be equivalent (as
certified by the Office of the Actuary of the Centers for
Medicare and Medicaid Services) to the average prevailing
employer-sponsored coverage.
The essential benefits package would be required to cover
the following items and services:
Hospitalization;
Outpatient hospital and clinic services,
including emergency department services;
Services of physicians and other health
professionals;
Services, equipment, and supplies incident
to the services of a physician or health professional
in appropriate settings;
Prescription drugs;
Rehabilitative and ``habilitative'' services
(i.e., services to maintain the physical, intellectual,
emotional, and social functioning of developmentally
delayed individuals);
Mental health and substance use disorder
services;
Preventive services, include those graded
``A'' or ``B'' by the Task Force on Clinical and
Preventive Services, as well as certain other substance
abuse and mental health services, and those vaccines
recommended by the Director of the CDC;
Maternity care;
Well baby and well child care and oral
health, vision, and hearing services, equipment, and
supplies, as defined under Section 1905(r) of the
Social Security Act, for those under age 21; and
Durable medical equipment, prosthetics,
orthotics and related supplies.
The Committee recognizes that historically, insurers have
not covered medical services addressing a range of women's
health needs, resulting in high out-of-pocket costs for medical
services, such as maternity care and preventive screenings.
Women have a variety of essential health needs throughout their
lifetimes. Therefore, the Committee intends that the bill
require the basic benefits package include the full range of
medical services for women's unique health needs, at all stages
of life, including, but not limited to, maternity care,
preventive screenings such as mammograms, annual gynecological
exams, diagnostic, routine care, and recommended treatments.
The Committee believes that medically necessary evidence-
based behavioral intervention services, including those
provided to individuals with autism, are included within the
ambit of section 122(b) of the bill.
The essential benefits package would be subject to various
requirements concerning cost-sharing. The package would be
required to provide preventive items and services without cost-
sharing. The annual out-of-pocket limit in 2013 would be $5,000
for an individual and $10,000 for a family. These limits would
be annually adjusted for inflation using the Consumer Price
Index (CPI). To the extent possible, the Commissioner would
establish cost-sharing levels using copayments (a flat dollar
fee) and not coinsurance (a percentage fee). Cost-sharing would
result in coverage equal to approximately 70 percent of the
actuarial value of the benefits if there were no cost-sharing
imposed.
Sec. 123. Health Benefits Advisory Committee
Current Law
None.
Proposed Law
A Health Benefits Advisory Committee (HBAC) would be
established to recommend covered benefits and the essential,
enhanced, and premium plans. The HBAC would be chaired by the
Surgeon General. The HBAC membership would be comprised of
Nine members, appointed by the President,
who are neither federal employees nor officers;
Nine members, appointed by the Comptroller
General, who are neither federal employees nor
officers; and
An even number, up to eight members,
appointed by the President, who are federal employees
and officers.
The initial appointments would be made within 60 days of
enactment. Each HBAC member would serve a three-year term,
except the terms of the initial appointments would be adjusted
to provide for staggered years of appointment. The members
would reflect the interests of the many diverse groups of
stakeholders so that no single interest would unduly influence
the HBAC's recommendations. At a minimum, committee membership
would reflect educated patients or consumer advocates,
providers, employers, labor, health insurance issuers, experts
in health care and delivery, experts in health disparities, and
government agencies. In addition, at least one HBAC member
would be a practicing physician or health professional, and
another member would be an expert on children's health. At
least one member must be an expert on the scientific evidence
and clinical practice of integrative medicine.
The HBAC's recommendations to the Secretary on the
essential benefits package (as defined in Section 122), cost-
sharing levels for the enhanced plans and premium plans (as
defined in Section 203), and periodic updates of the package
would be required to incorporate innovation in health care. The
HBAC members would also consider how the package would reduce
health disparities, would take into account integrative
medicine, and would allow for public input as part of
developing its recommendations. The HBAC's initial benefit
recommendations must be made to the Secretary within one year
of enactment.
In developing standards for the enhanced and premium plans,
the HBAC would be required to calculate cost-sharing such that
the enhanced plan would have benefits that are actuarially
equivalent to about 85 percent of the actuarial value of the
benefits provided in the essential benefits package, and the
premium plans would have benefits that are actuarially
equivalent to about 95 percent of the actuarial value of the
benefits provided in the essential benefits package.
The Committee intends that, in developing its
recommendations regarding benefit standards, the Health
Benefits Advisory Committee shall take into account the special
characteristics of group health plans that are multiemployer
plans as defined in section 3(37) of the Employee Retirement
Income Security Act and the impact of the recommendations on
such plans. Among the special characteristics to be considered
is that these plans are funded, and their costs borne, by the
workers who tradeoff wages for employer contributions, that a
plan's income fluctuates with the availability of covered work,
and that workers are equally represented on the plans' boards
of trustees who design the rules and benefit programs.
HBAC members would serve without pay, but would receive
federal travel expenses, including per diem expenses. In
addition, the HBAC would be subject to the Federal Advisory
Committee Act although the members would not become Federal
employees.
The Secretary would be required to publish all
recommendations developed pursuant to this Section in the
Federal Register and on the HHS website.
Following an amendment at Committee, this provision would
also instruct the Health Benefits Advisory Committee to examine
current state laws and to seek input from the states as it
forms its recommendations for the federal benefits standards.
Sec. 124. Process for Adoption of Recommendations; Adoption of Benefit
Standards
Current Law
None.
Proposed Law
This Section proposes a timeline by which the Secretary
must choose whether to adopt the recommendations of the HBAC
established under Section 123 of this bill. Within 45 days of
receiving the HBAC's recommendations regarding the essential
benefits package, the Secretary would be required either to
adopt the benefit standards as written or not adopt the benefit
standards, notify the HBAC of the reasons for this decision,
and provide an opportunity for the HBAC to revise and resubmit
its recommendations.
The Secretary would be required to adopt an initial set of
benefit standards within 18 months of enactment either by
adopting the recommendations (and any revisions) of the HBAC,
or absent that, by proposing an initial set of benefit
standards.
The Secretary would be required to publish all
determinations under this Section in the Federal Register.
The Secretary would be required to periodically update the
benefit standards. However, an essential benefits package that
does not meet the essential benefits requirements specified in
Section 122 could not be adopted.
Sec. 125. Prohibition of Discrimination in Health Care Services Based
on Religious or Spiritual Content
This provision would prohibit the Commissioner or any
health insurance issuer offering health insurance coverage
through the HIE from discriminating against approving or
covering health care services based on religious or spiritual
content if expenditures for such a health care service are
allowable under 213(d) of the Internal Revenue Code of 1986.
Subtitle D--Additional Consumer Protections
Sec. 131. Requiring Fair Marketing Practices by Health Insurers
Current Law
States have established varying marketing standards to
prohibit insurers from marketing their insurance products only
to healthy risks.
Proposed Law
This provision would require the Commissioner to establish
uniform marketing standards for QHBPs.
Sec. 132. Requiring Fair Grievance and Appeals Mechanisms
Current Law
ERISA does mandate compliance to certain standards if an
employer chooses to offer health benefits, such as procedures
for appealing denied benefit claims. The Department of Labor
has issued regulations for plan internal appeal processes but
does not provide for external appeals other than through
judicial review. In addition, as of February 2008, 44 states
and the District of Columbia mandate the independent review of
benefit denials by an entity outside of the health plan
(``external review''). The Supreme Court has upheld the
application of state external review laws to ERISA covered
plans.
Proposed Law
This provision would require QHBPs to provide for a uniform
timely grievance and appeals mechanisms as established by the
Commissioner. QHBPs would provide an internal claims and
appeals process that initially incorporates the claims and
appeals procedures (including urgent claims) promulgated by the
Labor Department and published in the Code of Federal
Regulations on November 21, 2000 (65 Fed. Reg. 70246). Such a
process would be updated in accordance with any relevant
standards that may be established by the Commissioner. The
Commissioner would establish standards for an external review
process (including expedited review of urgent claims), and any
determination made with respect to a QHBP under an external
review process would be binding. Aggrieved individuals would
have state law rights and remedies to appeal adverse QHBP
decisions.
Sec. 133. Requiring Information Transparency and Plan Disclosure
Current Law
ERISA requires applicable health plans (as well as other
``welfare benefit'' plans) to disclose and report certain plan
information to enrollees and regulators. For example, plan
administrators must provide to enrollees a written summary plan
description (SPD) which contains the terms of the plan and the
benefits offered, including any material modifications, and the
SPD must be written in a manner that can be understood by the
average enrollee. Certain plans must file an annual report with
the Department of Labor, containing information about the
operation, funding, assets, and investments of those plans.
Proposed Law
This provision would require QHBPs to comply with
disclosure standards established by the Commissioner concerning
plan terms and conditions, claims payment policies, plan
finances, claims denials, and other information as determined
appropriate by the Commissioner. One specified disclosure
requirement would be a list of health care providers under the
plan trained and accredited in integrative medicine. The
Commissioner would require such disclosure to be provided in
plain language. QHBPs would be required to comply with
standards established by the Commissioner to ensure
transparency regarding reimbursements between the plan and
health care providers. A change in a QHBP could not be made
without reasonable and timely advance notice to enrollees about
the change.
Sec. 134. Application to Qualified Health Benefits Plans Not Offered
Through the Health Insurance Exchange
Current Law
None.
Proposed Law
The Committee intends that the Commissioner may make any or
all of the requirements of Subtitle D applicable to qualified
health benefits plans outside of the HIE if the Commissioner
determines that such an extension is necessary to accomplish
the fundamental purposes of this Act. The Commissioner may make
the requirements applicable to only health insurance issuers,
and not to self-funded plans or to multiemployer plans based
upon the Commissioner's determination that such plans satisfy
the consumer protections provided for in this Act.
Sec. 135. Timely Payment of Claims
Current Law
Under Medicare Advantage (MA), private health plans are
paid a per-person amount to provide all Medicare-covered
benefits (except hospice) to beneficiaries who enroll in their
plan. MA plans include health maintenance organizations and
private fee-for-service (PFFS) plans. MA PFFS plans are
required to pay 95 percent of ``clean claims'' within 30 days
of receipt. The Centers for Medicare and Medicaid Services
(CMS) defines a clean claim as a claim that has no defect or
impropriety, and is submitted with all the required
documentation. The 30-day rule also applies to claims submitted
to any MA organization by a provider who does not have a
written contract with the plan. MA organizations are required
to pay interest on clean claims that are not paid within 30
days. All other claims from non-contracted providers must be
paid within 60 days. MA organizations that do contract with
providers (i.e., HMOs and PPOs) must include a prompt payment
provision in their contracts.
Proposed Law
This provision would require QHBPs to comply with the
prompt pay requirements applicable to Medicare Advantage plans.
Sec. 136. Standardized Rules for Coordination and Subrogation of
Benefits
Current Law
While there are no federal statutes specifying primary and
secondary payment rules for multiple insurers in the private
market, the Medicare statutes can be cited as providing an
example. Section 1862(b) of the Social Security Act authorizes
the Medicare Secondary Payer (MSP) program, which identifies
specific conditions under which another party pays first and
Medicare is only responsible for qualified secondary payments.
The statute authorizes several methods to identify cases when
an insurer other than Medicare is the primary payer and to
facilitate recoveries when incorrect Medicare payments have
been made. Under certain conditions, the law makes Medicare the
secondary payer to insurance plans and programs for
beneficiaries covered through (1) a group health plan based on
either their own or a spouse's current employment; (2) auto and
other liability insurance; (3) no-fault liability insurance;
and (4) workers' compensation situations, including the Black
Lung program. The purpose of the MSP program is to shift costs
from Medicare to private sources of payment, thus reducing
Medicare expenditures. Additionally, the Medicare statutes
exclude Medicare coverage for items and services paid for
directly or indirectly by a government entity, subject to
certain limitations. This includes the Department of Veterans
Affairs, among others.
The states have long established rules on coordination of
benefits and subrogation of claims but in recent years, health
plans have challenged aspects of the traditional rules leading
to confusion and uncertainty in this area.
Proposed Law
The Commissioner would establish standards for the
coordination of benefits and reimbursement of payments in cases
involving individual and multiple plan coverage.
Sec. 137. Application of Administrative Simplification
Current Law
To support the growth of electronic record keeping and
claims processing, HIPAA's Administrative Simplification
provisions instructed the Secretary to adopt electronic format
and data standards for several routine administrative and
financial transactions between health care providers and health
plans/payers. The standards apply to health care providers (who
transmit any health information in electronic form in
connection with a HIPAA-specified transaction), health plans,
and health care clearinghouses. Although providers have made
significant progress in streamlining administrative processes,
much work remains to achieve uniforms claims and billing
processes.
Proposed Law
This provision would require QHBP offering entities (as
defined in the bill) to comply with the new administrative
simplification standards adopted under Sec. 163 (discussed
below).
Sec. 138. Records Relative to Prescription Information
This provision would ban the sales of physician prescribing
habits to the pharmaceutical industry when the physician serves
patients enrolled in a qualified health benefit plan.
Subtitle E--Governance
Sec. 141. Health Choices Administration; Health Choices Commissioner
Current Law
No specific provision in federal law.
Proposed Law
This provision would establish an independent agency in the
Executive Branch of the United States called the Health Choices
Administration, ``Administration.'' The Administration would be
headed by a Health Choices Commissioner, ``Commissioner,'' who
would be appointed by the President, by advice and consent of
the Senate. Section 702 of the Social Security Act (detailing
compensation, terms, general powers, rule-making, and
delegation as applied to the Commissioner of Social Security
and the Social Security Administration) would apply to the
Commissioner.
Sec. 142. Duties and Authority of Commissioner
Current Law
None.
Proposed Law
This provision would make the Commissioner responsible for
carrying out the following functions:
Qualified Plan Standards--Establishing qualified
health benefits plan (``QHBP'') standards, including the
enforcement of such standards in coordination with State
insurance regulators and the Secretaries of Labor and the
Treasury.
Health Insurance Exchange--Establishing and
operating the Health Insurance Exchange.
Individual Affordability Credits--Administering
individual affordability credits, including the determination
of eligibility for such credits.
Promoting Accountability--Undertaking activities
in accordance with this section to promote accountability of
QHBP offering entities in meeting Federal health insurance
requirements, regardless of whether such accountability is with
respect to qualified health benefits plans offered through or
outside the Health Insurance Exchange.
Compliance Examination and Audits--coordinating
with States to conduct audits of qualified health benefits plan
compliance with Federal requirements. These audits would
include random compliance audits and targeted audits in
response to complaints or other suspected non-compliance.
Recoupment of Costs in Connection with Examination
and Audits--authorizing to recoup from qualified health
benefits plans reimbursement for costs of such examinations and
audit of such QHBP offering entities.
Data Collection--Collecting data for the purposes
of carrying out the Commissioner's duties, including promoting
quality, value, protecting consumers and addressing disparities
in health care; the commissioner may share such data with
Secretary of Health and Human Services. The Committee believes
populations who experience disparities in health care include
people with disabilities.
Sanctions Authority--Providing any of the
following remedies (in addition to any other authorized by law)
in coordination with State insurance regulators and the
Secretary of Labor if it is determined that a QHBP offering
entity violates a requirement:
1. Civil money penalties of not more than the amount
applicable under similar circumstances for similar
violations under Medicare;
2. Suspension of plan enrollment of individuals under
such plan after the date the Commissioner notifies the
entity of a decision, until the Commissioner is
satisfied with rectification;
3. In the case of an Exchange-participating health
benefits plan, suspension of payment under the Health
Insurance Exchange for individuals enrolled in the plan
after the date the Commissioner notifies the entity of
such decision and until the Commissioner is satisfied
with corrective action; or
4. Work with State insurance regulators to terminate
plans for repeated failure by the QHBP offering entity
to meet this title's requirements.
Standard Definitions of Insurance and Medical Terms--
providing the development of standards for defining terms used
in health insurance coverage, including insurance-related
terms.
Sec. 143. Consultation and Coordination
Current Law
None.
Proposed Law
The Commissioner, as appropriate, would be required to
consult with, at a minimum, the National Association of
Insurance Commissioners, State attorneys general, and State
insurance regulators concerning the standards and enforcement
for insured qualified health benefits plans described in this
title. Concurrently, the Commissioner would be required to
consult with, at a minimum, Indian tribes and tribal
organizations, appropriate federal agencies, and appropriate
State agencies concerning affordability credits and the
offering of Exchange-participating health benefits plans
(including Medicaid concerning standards for insured qualified
health benefits plans).
Sec. 144. Health Insurance Ombudsman
Current Law
The Department of Health and Human Services receives
various complaint handling and client-assistance ombudsmen
including:
Long-term Care Ombudsman--mandated by Older Americans Act
of 1965, consists of 1,000 paid and 14,000 volunteers who
identify, investigate, and resolve complaints made by, or on
the behalf, of residents. They have a blend of federal and
state oversight.
Medicare Beneficiary Ombudsman--Created by the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003
(P.L. 108-173), it is intended to ensure those eligible for
Medicare have reliable and current information about their
benefits, rights and protections under the Medicare program,
and the procedures for getting problems and disputes resolved.
The Ombudsman is to aid Medicare recipients in filing appeals
if their insurance did not pay proper amounts for their medical
services or those services were denied.
State Health Insurance Ombudsman--Several states (VT, MN,
and IL to name a few) have created State health insurance
ombudsmen, with the core responsibilities of rectifying
concerns encompassing access to care, billing problems, and
access to health insurance. The ombudsman provides information
on state and federal programs that may be available, explains
continuation rights under an existing health plan, provides
help on how to shop for health insurance, and assists in
appealing decisions made by their health insurance.
Proposed Law
The Commissioner would appoint within the Health Choices
Administration a Qualified Health Benefits Ombudsman (with
experience and expertise in the fields of health care and
education). The Ombudsman would be required to perform the
following duties:
Receive and provide assistance with complaints,
grievances, and requests for information submitted by
individuals. The assistance would be provided more specifically
in instances such as helping individuals determine relevant
information for an appeal, assisting with any problems arising
from disenrollment, choosing a qualified health benefits plan
to enroll, and presenting information relevant to affordability
credits.
Submit annual reports to Congress and the
Commissioner describing the activities of the Ombudsman,
including recommendations for improvement in the Administration
of this Division, as determined appropriate. The Ombudsman
would not serve as an advocate for any increases in payments or
new coverage of services, but would identify issues and
problems in payment or coverage policies.
Subtitle F--Relation to Other Requirements; Miscellaneous
Sec. 151. Relation to Other Requirements
Current Law
None.
Proposed Law
Coverage Not Offered Through the Exchange--The
requirements of this provision would not supersede specified
provisions of federal and state laws with respect to the health
insurance coverage not offered through the Health Insurance
Exchange (whether or not offered in connection with an
employment-based health plan).
Coverage Offered Through the Exchange--The
requirements under this title would not supersede any
requirements relating to genetic information non-discrimination
and mental health for such health insurance coverage (as long
as those related do not prevent the application of requirements
detailed in this division; as determined by the Commissioner).
Concurrently, individual rights and remedies under State laws
would apply. Nothing in this paragraph would be construed as
preventing the application of rights and remedies under State
laws.
Sec. 152. Prohibiting Discrimination in Health Care
Current Law
HIPAA established federal rules regarding non-
discrimination based on health status-related factors. It
prohibits group issuers from establishing rules for eligibility
and premium contributions based on health status-related
factors. Those factors include health status, medical condition
(including both physical and mental illnesses), claims
experience, receipt of health care, medical history, genetic
information, evidence of insurability (including conditions
arising out of acts of domestic violence) and disability. In
addition, the Genetic Information Nondiscrimination Act of 2008
(GINA, P.L. 110-233) prohibits issuers in the individual health
insurance market from establishing eligibility rules (including
continued eligibility) based on an individual's genetic
information. The Paul Wellstone and Pete Domenici Mental Health
Parity and Addiction Equity Act of 2008 establishes parity by
requiring an employer offering mental health and substance use
disorder benefits in an equal manner as physical health
benefits are offered.
In addition, Title VI of the Civil Rights Act of 1964
prohibits discrimination by the recipients of federal funds,
which includes many hospitals, clinics and social service
agencies. However, the Civil Rights Act's link to the receipt
of federal funds has insulated many insurance companies from
any obligation to comply with nondiscrimination protections.
Proposed Law
Unless explicitly permitted within this Act and subsequent
related regulations, all health care and related services,
(including insurance coverage and public health activities)
covered by this Act would be provided regardless of personal
characteristics extraneous to the provision of high quality
health care or related services.
Within 18 months of enactment, the Secretary would be
required to ensure that all health care and related services
would be provided without regard for extraneous personal
characteristics.
Sec. 153. Whistleblower Protection
Current Law
None.
Proposed Law
No employer may discharge any employee (or otherwise
discriminate against) with respect to his compensation, terms,
conditions, or other privileges of employment because the
employee (or an individual acting at the request of the
employee):
Provides or causes to provide to the employer,
Federal Government, the attorney general of a relevant State,
information relating to any violation of, or any act or
omission the employee reasonably believes to be a violation of
any provision, order, rule, or regulation promulgated under
this Act.
Testifies or is about to testify in a proceeding
concerning such violation.
Assists, participates or about to assist and
participate in such a proceeding.
Objects to, or refused to participate in any
activity, policy, practice, or assigned task that the employee
reasonably believes to be in violation of any provision, order,
rule and regulation promulgated under this Act.
Enforcement Action--An employee covered by this section who
alleges discrimination by an employer in violation may bring an
action governed by the rules, procedures, legal burden of
proof, and remedies detailed in section 40(b) of the Consumer
Product Safety Act.
Employer Defined--The term employer in this section means
any person (including one or more individuals, partnerships,
associations, corporations, trusts, professional membership
organization including a certification, disciplinary, or other
professional body, unincorporated organizations,
nongovernmental organizations, or trustees) engaged in profit
or nonprofit business or industry whose activities are governed
by this Act, and any agent, contractor, subcontractor, grantee,
or consultant of such person.
Rule of Construction--The rule of construction set forth
concerning employee protections in the United States Code would
apply to this section.
Sec. 154. Construction Regarding Collective Bargaining
Current Law
None.
Proposed Law
Nothing in this division may be construed to alter or
supersede any statutory or other obligation to engage in
collective bargaining over the terms and conditions of
employment related to health care. This rule of construction
clarifies that long-standing principles of law continue to
apply in the context of this health reform legislation. Where a
new law sets mandatory minimum labor standards, the parties in
a collective bargaining relationship must abide by such
standards. Where, however, a new law leaves some discretion to
an employer with regard to how to achieve compliance, which
this bill indeed does on many levels, an employer with
collective bargaining obligations may not make unilateral
changes to the terms and conditions of employment but must
bargain with the employees' bargaining representative over
those matters.\123\
---------------------------------------------------------------------------
\123\See, e.g., Murphy Oil USA, 286 N.L.R.B. 1039, 1042 (1987);
Standard Candy Co., 147 N.L.R.B. 1070, 1073 (1964); Fort Halifax
Packing Co. v. Coyne, 482 U.S. 1, 20 (1987).
---------------------------------------------------------------------------
Sec. 155. Severability
Current Law
None.
Proposed Law
If any provision of this Act, or the application thereof
towards any person or circumstance, is held unconstitutional,
the application of the remaining provisions would not be
affected.
Sec. 156. Rule of Construction Regarding Hawaii Prepaid Health Care Act
Added with an amendment at Committee, this provision would
maintain Hawaii's Prepaid Health Care Act exemption under
ERISA, including with respect to the provisions of H.R. 3200,
where such state statute ensures health care benefits
equivalent to or greater than those benefits that would be
guaranteed by H.R. 3200.
Sec. 157. Increasing Meaningful Use of Electronic Health Records
This provision would require the Health Choices
Commissioner to study how to increase the meaningful use of
electronic health records and then use the results of that
study to potentially require higher reimbursement rates for
providers that use health information technology.
Sec. 158. Private Right of Contract with Health Care Providers
This provision forbids any other provision in this bill
from being construed to preclude any participant or beneficiary
in a group health plan from entering into any contract or
arrangement for health care with any health care provider.
Subtitle G--Early Investments
Sec. 161. Ensuring Value and Lower Premiums
The Committee did not exercise jurisdiction over this
provision.
Sec. 162. Ending Health Insurance Rescission Abuse
The Committee did not exercise jurisdiction over this
provision.
Sec. 163. Administrative Simplification
The Committee did not exercise jurisdiction over this
provision.
Sec. 164. Reinsurance Program for Retirees
Current Law
No current law.
Proposed Law
No later than 90 days after enactment, the Secretary would
establish a temporary reinsurance program, to provide
reimbursement to assist participating private or public sector
employment-based plans with the cost of providing health
benefits to eligible retirees who are 55 and older and their
dependents, including eligible and surviving spouses. Such
plans include voluntary employee benefit associations (VEBAs)
and multi-employer plans covering retirees. Health benefits
would be required to include medical, surgical, hospital,
prescription drug, and other benefits determined by the
Secretary. An eligible employment-based plan would submit an
application to the Secretary, as required. A participating
employment-based program would submit claims for reimbursement
to the Secretary, documenting the actual cost of items and
services for each claim. Each claim would be based on the
actual amount expended by the participant. The participating
employment-based plan would take into account any negotiated
price concessions, such as discounts, subsidies, and rebates.
The cost of deductibles and cost-sharing would be included in
the cost of the claim, along with the amounts paid by the plan.
For any valid claim, the Secretary would reimburse the plan for
80 percent of the portion of costs above $15,000 and below
$90,000. This amount would be adjusted annually based on the
percent increase in the medical care component of the Consumer
Price Index, rounded to the nearest multiple of $1,000. Amounts
paid to a participating employment-based plan would be used to
lower cost directly to participants and beneficiaries in the
form of premiums, co-payments, deductible, co-insurance, or
other out-of-pocket costs, but would not be used to reduce the
costs of an employer maintaining the employment-based plan. The
Secretary would establish an appeals process for denied claims,
procedures to protect against fraud, waste, and abuse, and
would conduct annual audits of claims date.
The Retiree Reserve Trust Fund would be established,
consisting of such amounts as appropriated or credited to the
Fund to enable the Secretary to carry out the reinsurance
program. The Secretary could request such sums as necessary to
carry out this section, not to exceed $10 billion. Amounts
appropriated and outlays from such appropriation would not be
taken into account for purpose of any budget enforcement
procedures, thus exempting the Fund from the framework of the
budget resolution and the points of order which enforce that
framework. The Secretary would have the authority to stop
taking applications or take other steps to reduce expenditures
to ensure that expenditures did not exceed available funds.
Sec. 165. Prohibition Against Post-Retirement Reductions of Retiree
Health Benefits by Group Health Plans
This provision would prohibit group health plans from
reducing retirees' health benefits after those retirees have
retired, unless the reduction is also made to benefits for
active participants.
Sec. 166. Limitations on Preexisting Condition Exclusions in Group
Health Plans in Advance of Applicability of New Prohibition of
Preexisting Condition Exclusions
This provision would require that the limit on pre-existing
conditions exclusions in the insurance market start immediately
at the bill's passage instead of 2013 as the introduced version
of H.R. 3200 instructs. The permitted ``look back'' period is
reduced from six months to 30 days, and the amount of time
during which a provider can exclude coverage for pre-existing
conditions is shortened.
Sec. 167. Extension of COBRA Continuation Coverage
This section was added by amendment at Committee. This
provision would end the current COBRA eligibility limit and
allow those currently enrolled in COBRA to keep their insurance
until they find another job offering coverage or until they
become eligible to participate in the HIE.
Title II--Health Insurance Exchange and Related Provisions
Subtitle A--Health Insurance Exchange
Current Law
No specific provision in federal law.
Proposed Law
Text.
Sec. 201. Establishment of Health Insurance Exchange; Outline of
Duties; Definitions
A Health Insurance Exchange, ``Exchange'' would be
established to facilitate access of individuals and employers
to a variety of choices of affordable, quality health insurance
coverage, including a public health insurance plan option. The
HIE would exist within the Health Choices Administration under
the direction of the Health Choices Commissioner (described
above in Sections 141 and 142). As described in greater detail
in the following sections, regarding the Exchange, the
Commissioner would (1) establish standards for, accept bids
from, and negotiate and enter into contracts with entities
seeking to offer qualified health benefits plans (QHBPs)
through the Exchange, (2) facilitate outreach and enrollment of
Exchange-eligible individuals and employers, and (3) conduct
appropriate activities related to the Exchange, including
establishment of a risk pooling mechanism and consumer
protections.
Sec. 202. Exchange-eligible Individuals and Employers
Beginning in 2013, all individuals generally would be
eligible to obtain coverage through the Exchange, unless they
were enrolled in the following (as determined by the
Commissioner, in coordination with the Treasury Secretary):
a group plan through a full-time employee
(including a self-employed person with at least one
employee) for which the employer makes an adequate
contribution (described below in Section 312),
Medicare,
Medicaid (except in certain cases, discussed
below), or
military and VA coverage.
Except for the Medicaid exception, individuals would lose
eligibility for Exchange coverage once they become eligible for
Medicare Part A, Medicaid (although in this case, the
Commissioner could permit continued Exchange eligibility for
such limited time as the Commissioner determines it is
administratively feasible and consistent with minimizing
disruption in the individual's access to health care), and
other circumstances as the Commissioner provides. Besides those
cases, once individuals enroll in an Exchange plan, they would
continue to be eligible until they are no longer enrolled.
Exchange-eligible employers could meet the requirements of
the employer responsibility (Section 312) by offering and
contributing adequately toward employees' enrollment through
the Exchange. Those employees would be able to choose any of
the available Exchange plans. Once employers are Exchange
eligible and enroll their employees through the Exchange, they
would continue to be Exchange eligible, unless they decided to
then offer their own qualified health benefits plan(s).
In 2013, employers with 15 or fewer employees would be
Exchange-eligible. In 2014, employers with 25 or fewer
employees would be Exchange-eligible. Beginning in 2015,
employers with 50 or fewer employees would be Exchange-
eligible, however the Commissioner could permit employers
larger than 50 to participate in the Exchange. These additional
employers could be phased in or made eligible based on the
number of full-time employees or other considerations the
Commissioner deems appropriate. (``Employer'' and other
employment-related definitions would be defined by the
Commissioner.)
The Committee intends that if and when the Commissioner
permits ``larger employers'' to become Exchange-eligible
employers, the Commissioner will also permit a multiemployer
plan (as defined in section 3(37) of the Employee Retirement
Income Security Act) itself to become an Exchange-eligible
employer on behalf of its contributing employers as if it were
one employer.
The Commissioner would have the authority to establish
rules to deal with special situations with regard to uninsured
individuals participating as Exchange-eligible individuals and
employers, such as transition periods for individuals and
employers who gain, or lose, Exchange-eligible participation
status, and to establish grace periods for premium payment.
The Commissioner would be required to provide for periodic
surveys of Exchange-eligible individuals and employers
concerning their satisfaction with the Exchange and its plans.
The Commissioner would conduct an Exchange Access Study--a
study of access to the Health Insurance Exchange for
individuals and for employers, including individuals and
employers who are not eligible and enrolled in HIE plans. The
goal of the study would be to determine if there are
significant groups and types of individuals and employers who
are not Exchange eligible but who would have improved benefits
and affordability if made eligible. The study also would
examine the terms, conditions, and affordability of group
health coverage offered by employers and QHBP-offering insurers
outside of the Exchange compared to Exchange-participating
health benefits plans, as well as the affordability-test
standard for access of certain employed individuals to coverage
in the Health Insurance Exchange. The Commissioner would submit
the study to Congress by January 1 of 2015, 2018, and
thereafter, and would include in the report recommendations
regarding changes in standards for Exchange eligibility for
individuals and employers.
This provision would also give the Commissioner authority
to define terms such as ``employer'' and ``employee'' for
purposes of this division. The Commissioner should take care
that such definitions minimize incentives to misclassify
workers as non-employees. Moreover, the Commissioner should
take into consideration any special employer or industry
organizational structures such as ``employers of record'' in
the home health industry and hour of service calculations for
airline personnel in the airline industry in light of relevant
federal rules and industry practices when defining these
employment terms.
Sec. 203. Benefits Package Levels
The Commissioner would specify the benefits to be made
available under HIE plans during each plan year, consistent
with this section and Sections 121-134 above. The Commissioner
could not enter into a contract with an entity wanting to offer
coverage through the Exchange in a service area(s), unless the
following requirements are met:
The entity offers only one Basic plan in the
service area.
The entity may offer one Enhanced plan in the
service area.
If the entity offers an Enhanced plan in a service
area, the entity may offer one Premium plan for the area.
If the entity offers a Premium plan for a service
area, the entity may offer one or more Premium-Plus plans for
the area.
All such plans could be offered under a single contract
with the Commissioner.
Consistent with the standards in Sections 101-164 above,
the Commissioner would also establish the following standards
for the three primary levels of Exchange plans--Basic,
Enhanced, and Premium--and for additional benefits that may be
offered in a Premium-Plus plan. Besides offering the essential
benefits package (Section 122 above) for a QHBP, Basic plan
benefit packages would be modified to provide for reduced cost-
sharing for individuals eligible for the ``affordability cost-
sharing credit,'' described below in Section 244. Excluding the
credit, the benefit package of a Basic plan would have an
actuarial value representing payment for approximately 70
percent of all the covered items and services in the essential
benefits package (Section 122 above). Enhanced plans would have
lower cost-sharing than Basic plans, representing approximately
85 percent of the actuarial value of all the covered items and
services in the essential benefits package. Premium plans would
have lower cost-sharing than Enhanced plans, representing
approximately 95 percent of the actuarial value of all the
covered items and services in the essential benefits package.
Premium-Plus plans would be Premium plans that also provide
additional benefits, such as adult oral health and vision care,
approved by the Commissioner. The portion of the premium that
is attributable to such additional benefits would be separately
specified.
The Commissioner would establish a permissible range of
variation of cost-sharing for the Basic, Enhanced and Premium
plans. Such variation would permit variations up to 10 percent
in cost-sharing with respect to several benefit categories
(Section 122).
If a state requires health insurers to offer benefits
beyond the essential benefits package, such requirements would
continue to apply to Exchange plans, but only if the state has
entered into an arrangement satisfactory to the Commissioner to
reimburse the Commissioner for the amount of any resulting net
increase in affordability premium credits (Section 243).
Sec. 204. Contracts for the Offering of Exchange-participating Health
Benefits Plans
The Commissioner would establish standards, described
below, for Exchange-participating entities and their health
benefits plans. The Commissioner would certify entities and
plans if the standards are met. The Commissioner would solicit
and review bids from QHBP-offering entities for offering
Exchange plans, negotiate with the entities, and enter into
contracts with the entities for offering plans through the
Exchange under terms negotiated between the Exchange and the
entities.
The Federal Acquisition Regulation (the principal set of
rules that govern the contracting process for the federal
government) would not apply to contracts between the
Commissioner and QHBP-offering entities for offering Exchange
plans.
The standards for Exchange-participating entities would
consist of the following requirements:
The entity must be licensed or otherwise permitted
to offer health insurance coverage under state law for each
state in which it offers coverage.
The entity must provide for reporting data/
information specified by the Commissioner, including
information necessary to administer the risk pooling mechanism
in Section 206 and information to address disparities in health
and health care.
The entity must provide for implementation of the
affordability credits provided for enrollees (described in
Sections 241-246 below).
The entity must accept all applicable enrollment
via the Exchange, subject to such exceptions (such as capacity
limitations) in accordance with the federal requirements for
QHBPs (discussed under Title I), and would notify the
Commissioner if it projects or anticipates reaching a capacity
that would result in a limitation in enrollment.
The entity must participate in the pooling
mechanism as established by the Commissioner (described in
Section 206 below).
Regarding the Basic plan offered by the entity,
the entity must contract for outpatient services with certain
federally supported health care providers. The Commissioner
would also specify how this requirement would apply to Health
Maintenance Organizations (HMOs).
The entity must provide culturally and
linguistically appropriate communication and health services.
The entity must comply with other applicable
requirements of this title specified by the Commissioner, which
would include standards regarding billing and collection
practices for premiums and grace periods and which may include
standards to ensure that the entity does not use coercive
practices to force providers not to contract with other
entities offering coverage through the Exchange.
For the contracting process, entities' bids would have to
contain the information required by the Commissioner. Contracts
would last at least one year, but could be automatically
renewed in the absence of notice of termination by either
party. The contract would provide that if the Commissioner
determines that a plan's provider network is not adequate, then
the cost-sharing charged to a person who received out-of-
network care would be the same as if the care had been provided
in-network.
In coordination with state insurance regulators, the
Commissioner would establish processes to oversee, monitor, and
enforce applicable requirements on Exchange-participating
entities and QHBPs, including plan marketing. In conjunction
with state insurance regulators, the Commissioner would
establish a process for individuals and employers to file
complaints concerning violations. The Commissioner could
terminate a contract with an entity if it fails to comply with
the requirements of this title; the Commissioner could also
impose one or more intermediate sanctions.
Any determination by the Commissioner to terminate a
contract would be made in accordance with formal investigation
and compliance procedures established by the Commissioner under
which (a) the Commissioner provides the entity with the
reasonable opportunity to develop and implement a corrective
action plan to correct the deficiencies that were the basis of
the Commissioner's determination; and (b) the Commissioner
provides the entity with reasonable notice and opportunity for
hearing (including the right to appeal an initial decision)
before terminating the contract. However, these procedures need
not apply if the Commissioner determined that a delay in
termination would pose an imminent and serious risk to the
health of individuals enrolled under the plan.
Sec. 205. Outreach and Enrollment of Exchange-eligible Individuals and
Employers in Exchange-participating Health Benefits Plan
Outreach. The Commissioner would conduct outreach
activities to inform and educate individuals and employers
about the Exchange and its participating health plans. Such
outreach would include outreach specific to vulnerable
populations, such as children, individuals with disabilities,
individuals with mental illness, and individuals with other
cognitive impairments. The Commissioner's required outreach
activities would include the following:
broadly disseminate information on Exchange-
participating plans, provided in a comparative manner and
including information on benefits, premiums, cost-sharing,
quality, provider networks, and consumer satisfaction;
provide assistance to Exchange-eligible
individuals and employers via a toll-free telephone hotline and
an Internet website;
develop and disseminate information to Exchange-
eligible enrollees on their rights and responsibilities;
assist Exchange-eligible individuals in selecting
plans and obtaining benefits; and
ensure the information is developed using plain
language (described in Section 133 above).
Enrollment. The Commissioner would be required to make
timely determinations of whether individuals and employers are
eligible for Exchange coverage and to establish and carry out
an enrollment process, including at community locations.
Enrollment would be permitted by mail, telephone,
electronically, or in person.
Open enrollment for individuals and employers to enroll in
an Exchange plan and affordability credits (described in
Sections 241-245 below) would be at least 30 days and would be
during September through November of each year before benefits
would begin, or such other time that would maximize the
timeliness of income verification. However, the Commissioner
would also provide for special enrollment periods to take into
account special circumstances of individuals and employers,
such as an individual who loses acceptable coverage,
experiences a change in marital or other dependent status,
moves outside the plan's service area, or experiences a
significant change in income. The Commissioner, potentially
with other appropriate entities, would be required to broadly
disseminate information on the enrollment process, including
before each enrollment period.
The Commissioner would establish a process to automatically
enroll the following individuals into an appropriate Exchange
plan (potentially involving a random assignment or some other
form of assignment that takes into account the health care
providers used by the individual, or such other relevant
factors specified by the Commissioner):
those who have applied for affordability
credits, been determined eligible, have not opted out
from receiving such credit, and do not enroll in
another Exchange plan; and
those enrolled in an Exchange plan that is
terminated (during or at the end of a plan year) who do
not enroll in another Exchange plan.
Under the enrollment process, individuals enrolled in an
Exchange plan would pay such plans directly, not through the
Commissioner or the Exchange.
Special provisions apply to newborns born in the United
States without acceptable coverage at birth. Until other
acceptable coverage begins, the child would be considered a
non-traditional Medicaid-eligible individual (for whom the
state would be paid 100 percent federal reimbursement) and
would be deemed as having elected Medicaid coverage. This
coverage would end no later than the end of the month 60 days
after the child's birth; at the end of that period, if the
child still does not have acceptable coverage, the child is
deemed a traditional Medicaid-eligible individual, for whom the
state receives the regular Medicaid federal matching rate.
As of the day before the first day of 2013, CHIP-eligible
children, including targeted low-income children in a Medicaid-
expansion CHIP program, would be deemed to be Exchange
eligible. The Commissioner would notify each state in 2013
whether the Exchange could support enrollment of these
children.
A ``traditional Medicaid eligible individual'' is a
Medicaid-eligible individual excluding (1) those who are
eligible because of the expansion of Medicaid in Section 1701
of this legislation to individuals up to 133\1/3\ percent FPL
and (2) a childless adult who would not otherwise be classified
as categorically needy (as per current Medicaid statute,
Section 1902(a)(10)(A)) or medically needy (as per current
Medicaid statute, Section 1902(a)(10)(C)) as in effect as of
the day before the date of enactment of this Act. A ``non-
traditional Medicaid-eligible individual'' is a Medicaid-
eligible individual who is not a traditional Medicaid-eligible
individual. Section 202 of the legislation includes provisions
so that a non-traditional Medicaid eligible individual could be
Exchange-eligible if the individual was enrolled in a qualified
health benefits plan, grandfathered health insurance coverage,
or current group health plan during the six months before the
individual became a non-traditional Medicaid eligible
individual. Under this section, the Commissioner would provide
these individuals with the option to enroll in Medicaid rather
than an Exchange plan and to change that election during open
enrollment periods described earlier in this section. The
Commissioner would provide for a process to automatically
enroll these individuals into Medicaid if they have not elected
to enroll in any Exchange plan.
An Exchange-eligible individual could apply for a Medicaid-
eligibility determination. If the individual is determined to
be eligible, the Commissioner would provide for the
individual's enrollment under the state Medicaid plan in
accordance with the Medicaid memorandum of understanding. In
the case of such an enrollment, the state would provide for the
same periodic redetermination of eligibility under Medicaid
that would apply if the individual had directly applied to the
state Medicaid agency. The legislation would require the
Commissioner, in consultation with the HHS Secretary, to enter
into a memorandum of understanding with each state with respect
to coordinating enrollment of individuals in Exchange plans and
under state Medicaid programs, and to otherwise coordinate the
implementation of these provisions with respect to the Medicaid
program. This memorandum would permit the exchange of
information consistent with limitations specified in Medicaid
statute with respect to providing safeguards that restrict the
use or disclosure of information concerning applicants and
recipients to purposes directly connected with the
administration of the state Medicaid plan, and at state option,
the exchange of information necessary to verify eligibility for
other federal programs (e.g., for free and reduced price school
lunches). None of these provisions could be construed as
permitting such memorandum to modify or vitiate any requirement
of a state Medicaid plan.
In carrying out this section, the Commissioner would
establish effective methods for communicating in plain language
and a culturally and linguistically appropriate manner.
Sec. 206. Other Functions
The Commissioner would be required to coordinate the
distribution of affordability premium and cost-sharing credits
(described below in Sections 243-244) to the Exchange plans.
The Commissioner would also be required to establish a risk-
pooling mechanism, to adjust premium payments to Exchange plans
to take into account (in a manner specified by the
Commissioner) the differences in the risk characteristics of
individuals and employers enrolled under the Exchange plans.
An Office of the Special Inspector General for the Exchange
would be established, headed by a Special Inspector General
appointed by the President and confirmed by the Senate. The
Special Inspector General's nomination would be made as soon as
practicable after the establishment of the Exchange.
The duties of the Special Inspector General would consist
of the following:
conduct, supervise, and coordinate audits,
evaluations and investigations of the Health Insurance
Exchange to protect the integrity of the Exchange as
well as the health and welfare of participants in the
Exchange;
report both to the Commissioner and to the
Congress regarding program and management problems and
recommendations to correct them;
related to the duties above, have other
duties described as applying to the Special Inspector
General of the Troubled Asset Relief Program (TARP),
per paragraphs (2) and (3) of Section 121 of P.L. 110-
343; and
in carrying out these duties, have the
authorities of inspectors general in Section 6 of the
Inspector General Act of 1978.
Other provisions of the TARP Special Inspector General
would also be applied, regarding the basis of the Special
Inspector General's appointment, how s/he might be removed,
his/her salary, and available personnel, facilities and other
resources.
Not later than one year after the confirmation of the
Special Inspector General, and annually thereafter, the Special
Inspector General would submit to the appropriate committees of
Congress a report summarizing the activities of the Special
Inspector General during the one year period ending on the date
the report is submitted.
The Office of the Special Inspector General would terminate
five years after the date of the enactment of this Act.
Following an amendment at Committee, this provision would
also require the Commissioner, in consultation with the Small
Business Administration, to establish and carry out a program
to provide health insurance counseling and technical assistance
to small employers who provide their employees health care
through the HIE.
Sec. 207. Health Insurance Exchange Trust Fund
A ``Health Insurance Exchange Trust Fund'' would be created
within the U.S. Treasury, consisting of such amounts as may be
appropriated or credited to the fund. The Commissioner would
pay from the Trust Fund amounts as determined necessary to make
payments to operate the Exchange, including affordability
credits.
Dedicated payments to the Trust Fund would include the
following:
tax on individuals not obtaining acceptable
coverage (Section 401);
tax on employers electing to not provide
health benefits (Section 412); and
tax on employers who fail to satisfy health
coverage participation requirements (Section 411).
Such additional sums as necessary would be appropriated.
General provisions in the Internal Revenue Code regarding
federal government trust funds would apply.
Sec. 208. Optional Operation of State-based Health Insurance Exchanges
If a state (or group of states, subject to the
Commissioner's approval) applied to the Commissioner for
approval of a state-based Health Insurance Exchange, and if the
Commissioner approves such state-based Exchange, then the
state-based Exchange would operate instead of the federal
Exchange in that state(s).
The Commissioner could not approve a state-based Exchange
unless the following requirements were met (and would be
required to approve it if the conditions were met):
The state-based Exchange must demonstrate the
capacity to and provide assurances satisfactory to the
Commissioner that it could carry out the functions specified
for the federal Exchange in the state(s) including:
negotiating and contracting with qualified
plans;
enrolling Exchange-eligible individuals and
employers in plans;
establishing sufficient local offices to
meet the needs of Exchange-eligible individuals and
employers;
administering premium and cost-sharing
credits (described below in Sections 241-246) using the
same methodologies, and at least the same income
verification methods, as would otherwise apply and at a
cost to the federal government that is not greater than
what would otherwise apply; and
enforcement activities consistent with
federal requirements.
There is no more than one Exchange in operation in
any one state.
The state provides assurances satisfactory to the
Commissioner that approval of such an Exchange would not result
in any net increase in expenditures to the federal government.
The State provides for reporting of such
information as the Commissioner determines and assurances
satisfactory to the Commissioner that it will vigorously
enforce violations of applicable requirements.
Such other requirements as the Commissioner may
specify.
A state-based Exchange could, at the option of the state,
and only after providing timely and reasonable notice to the
Commissioner, cease operation. In this case, the federal
Exchange would be operational in the state(s).
The Commissioner could terminate the approval (for some or
all functions) of a state-based Exchange if the Commissioner
determined that it no longer met the requirements listed above
or was no longer capable of carrying out such functions. In
lieu of terminating the state-based Exchange's approval, the
Commissioner could temporarily assume some or all functions of
the state-based Exchange until the Commissioner determined that
it met the applicable requirements and was capable of carrying
out those functions. The ceasing or termination of a state-
based Exchange would be effective in such time and manner as
the Commissioner would specify.
Enforcement authorities of the Commissioner would be
retained by the Commissioner. The Commissioner could specify
functions of the federal Exchange that may not be performed by
a state-based Exchange or that could be performed by both the
Commissioner and the state-based Exchange.
In the case of a state-based Exchange, except as the
Commissioner may otherwise specify, any references to the
``Exchange'' or to the ``Commissioner'' in the area in which
the state-based Exchange operates would be deemed a reference
to the state-based Exchange and the head of that Exchange.
In the case of a state-based Exchange, funding assistance
would be provided for its operation in the form of a matching
grant, with a state share of expenditures required.
Sec. 209. Participation of Small Employer Benefit Arrangements
This provision would allow the Commissioner to enter into
contracts with small business co-ops operating a small business
benefit arrangement to facilitate their participation in the
HIE.
Subtitle B--Public Health Insurance Option
Sec. 221. Establishment and Administration of a Public Health Insurance
Option As An Exchange-Qualified Health Benefits Plan
Current Law
Medicare is an example of a federal public health insurance
program for the aged and disabled. Under Medicare, Congress and
the Department of Health and Human Services (HHS), Centers for
Medicare and Medicaid Services (CMS) determine many parameters
of the program including eligibility rules, financing
(including determination of payroll taxes, and premiums),
required benefits, payments to health care providers, and cost
sharing amounts.
Proposed Law
The provision would require the Secretary of Health and
Human Services (Secretary) to provide for the offering of a
public health insurance option through the Exchange starting
2013. The Secretary would be required to ensure that the public
option provided choice, competition and stability of
affordable, high quality coverage throughout the United States.
The Secretary's primary responsibility would be to create a
low-cost plan without compromising quality or access to care.
The public option would only be available through the
Health Insurance Exchange. The public option would be required
to comply with requirements applicable to Exchange-
participating health benefit plans, including requirements
related to benefits, benefit levels, provider networks,
notices, consumer protections, and cost sharing. The public
option would be required to offer basic, enhanced, and premium
plans, and would be allowed to offer premium-plus plans.
The Secretary would be allowed to enter into contracts for
the administration of the public option in the same manner as
the Secretary is allowed to enter into contracts for the
administration of the Medicare program. These administrative
functions include, subject to restrictions, determination of
payment amounts, making payments, beneficiary education and
assistance, provider consultative services, communication with
providers, and provider education and technical assistance. The
Secretary would have the same authority to enter into contracts
for the public option, as the Secretary has with respect to the
Medicare program. The provision would prohibit contracts that
involve the transfer of insurance risk.
The Secretary would be required to establish an office of
the ombudsman for the public health insurance option which
would have duties similar to those of the Medicare Beneficiary
Ombudsman.
The Secretary would be required to collect data necessary
to establish premiums and payment rates and for other purposes,
including improving quality and reducing disparities in health
care based on race, ethnicity, primary language, sex, sexual
orientation, gender identity, disability, socioeconomic status,
rural, urban, or other geographic setting, and any other
population or subpopulation as determined appropriate by the
Secretary. Such data collection would be on a voluntary basis
and consistent with certain privacy standards.
With respect to the public health insurance option, the
Secretary would be treated as an entity offering a Quality
Health Benefit Plan through the Exchange.
The provisions relating to access to Federal courts for
enforcement of rights under Medicare would apply to the public
option and individuals enrolled under the public option in the
same manner that they apply to Medicare and Medicare
beneficiaries.
Sec. 222. Premiums and Financing
Current Law
No current law.
Proposed Law
The Secretary would be required to establish
geographically-adjusted premiums for the public option in a
manner that complies with the premium rules established by the
Commissioner for Exchange-participating health benefit plans
and at a level sufficient to fully finance the cost of health
benefits and administration for the public option. Premiums
would be required to include an appropriate amount for a
contingency margin.
The provision would establish an account in the Treasury
for receipts and disbursements attributable to the public
option, including start-up funding. The start-up funding would
be equal to the sum of $2 billion for the establishment of the
public option, and such sums as may be necessary to cover 90
days worth of reserves based on projected enrollment. These
amounts would be authorized to be appropriated to the Secretary
out of any funds in the Treasury not otherwise appropriated.
The Secretary would be required to provide for repayment of the
start-up funding in an amortized manner over a 10 year period
starting in 2013. The provision specifies that nothing in this
section could be construed as authorizing any additional
appropriations to the account, other than amounts otherwise
provided with respect to other Exchange-participating plans. As
under the Medicare Advantage program, states would be
prohibited from imposing a premium tax or similar tax with
respect to the public option.
Sec. 223. Payment Rates for Items and Services
Current Law
No current law.
Proposed Law
The Secretary would be required to establish payment rates
for services and health care providers under the public option.
In general, during the first three years of the public
option, the Secretary would be required to base payment rates
on the rates for similar services and providers under Medicare.
For services furnished in 2013, 2014 and 2015, physicians and
other health care practitioners who participate in both
Medicare and the public option would receive payment rates 5%
greater than rates otherwise established by the Secretary for
items and professional services. Pediatricians and other
practitioners who do not typically participate in Medicare--as
determined by the Secretary--would also be eligible for the
increased payment rates. Beginning in 2016, the Secretary would
be required to continue to use an administrative process to set
payment rates to promote payment accuracy, to ensure adequate
beneficiary access to providers, and to promote affordability
and the efficient delivery of health care. The Secretary would
be prohibited from setting rates at levels expected to increase
overall medical costs for the public option beyond what would
be expected if Medicare rates (plus the 5% addition) were to
continue.
The provision specifies that nothing would prevent the use
of innovative payment methodologies such as those described in
Section 224 in connection with the negotiation of payment
rates. As introduced and reported, H.R. 3200 would allow the
Secretary discretion to establish a prescription drug
formulary, and use other methods, including those used by
private sector pharmacy benefit managers, to reduce
prescription drug costs under the public health insurance
option, and the Committee expects that the Secretary would
implement such a formulary.
Health care providers participating in Medicare would be
participating providers in the public health insurance option
unless they opted out in a process established by the
Secretary.
The provision would prohibit administrative or judicial
review of a payment rate or methodology established under this
section, or Section 224.
Sec. 224. Modernized Payment Initiatives and Delivery System Reform
Current Law
No current law.
Proposed Law
Beginning in the first year of the public option, the
Secretary would be given the authority to use innovative
payment mechanisms and policies to determine payments for items
and services under the public option. The payment mechanisms
and policies may include the following: patient-centered
medical home, other care management payments, accountable care
organizations, value-based purchasing, bundling of services,
differential payment rates, performance or utilization based
payments, partial capitation, and direct contracting with
providers. The Secretary would be required to design and
implement the payment mechanisms and policies in a way that
promotes care that is integrated, patient-centered, efficient
and of quality, and that seeks to either (a) improve health
outcomes, (b) reduce health disparities, (c) address geographic
variation in the provision of health services, (d) prevent or
manage chronic illness, or (e) provide efficient and affordable
care. To the extent allowed under the rules for Exchange-
participating plans, the provision would allow cost sharing and
payment rates under the public option to be modified to
encourage the use of services that promote health and value.
The provision specifies that nothing in the subtitle would
prevent the Secretary from varying payments based on different
payment structure models for different geographic areas.
Sec. 225. Provider Participation
Current Law
No current law
Proposed Law
The Secretary would be required to establish conditions of
participation for health care providers under the public
option. The Secretary would be prohibited from allowing a
health care provider to participate unless appropriately
licensed or certified under State law. A health care provider
that was excluded from participation in a Federal health care
program (as defined in Section 1128(f) of the Social Security
Act), would be prohibited from participating under the public
option.
Annually, the Secretary would be required to provide for
physicians to participate in the public plan in one of two
classes: (a) preferred physician, or (b) participating, non-
preferred physician. A preferred physician would be one who
agreed to accept the established rate as payment in full. A
participating non-preferred physician would be one who could
balance bill-impose charges that exceed the charges that may be
imposed for such items and services (in relation to the payment
rate for such items and services under Medicare). The
participating non-preferred physician would agree not to impose
charges that exceed 115 percent of the amount established under
Sec. 223 (consisting of the Medicare rate and the 5 percent
addition). The Secretary would be required to provide for the
participation of non-physician providers. Non-physician
providers would only be allowed to participate if they accepted
the established rates as payment in full.
Sec. 226. Application of Fraud and Abuse Provisions
Current Law
Title XVIII of the SSA, the Medicare statutes, requires
activities that prevent, detect, investigate and prosecute
health care fraud and abuse. In general, initiatives designed
to fight fraud, waste, and abuse are considered program
integrity activities. Program integrity is considered a
component of the effective and efficient administration of
government programs, which are entrusted with ensuring that
taxpayer dollars are spent wisely. Efforts to ensure Medicare
program integrity encompass a wide range of activities and
require coordination among multiple private and public
entities. This includes processes directed at reducing payment
errors to Medicare providers, as well as activities to prevent,
detect, investigate, and ultimately prosecute health care fraud
and abuse.
Proposed Law
The provisions of law (other than criminal law) identified
by the Secretary by regulation, in consultation with the
Inspector General, that impose sanctions with respect to waste,
fraud, and abuse under Medicare would also apply to the public
health insurance option.
Sec. 227. Sense of the House Regarding Enrollment of Members in the
Public Option
This provision would create a Sense of the House of
Representatives that any members who vote in support of the
public health insurance option are urged to forgo their right
to participate in the FEHBP and enroll under the public option.
Subtitle C--Individual Affordability Credits
Sec. 241. Availability Through Health Insurance Exchange
Current Law
None.
Proposed Law
This provision would provide premium and cost-sharing
credits to ``affordable credit eligible individuals'' (defined
in Section 242) for certain individuals enrolled in coverage
through the Exchange. The Commissioner would pay each QHBP
participating in the Exchange the aggregate amount of credits
for all eligible individuals enrolled in that plan.
An Exchange-eligible individual could apply to the
Commissioner, through the Exchange or another entity under an
arrangement made with the Commissioner, in a form and manner
specified by the Commissioner. The Commissioner, through the
Health Insurance Exchange or through another public entity
under an arrangement made with the Commissioner, would make a
determination as to eligibility of an individual for
affordability credits. The Commissioner would establish a
process whereby, on the basis of information otherwise
available, individuals may be deemed eligible for credits. The
Commissioner would also establish effective methods that ensure
that individuals with limited English proficiency are able to
apply for affordability credits.
If the Commissioner determines that a state Medicaid agency
has the capacity to make a determination of eligibility for
affordability credits under the same standards as used by the
Commissioner, under the Medicaid memorandum of understanding
(described above in Section 205), the state Medicaid agency is
authorized to conduct such determinations for any Exchange-
eligible individual who requests such a determination, and the
Commissioner would reimburse the state Medicaid agency for the
costs of conducting such determinations.
In addition, there would be a Medicaid screen-and-enroll
obligation, that when individuals apply for affordability
credits, a determination would be made as to whether they are
eligible for Medicaid. If they are determined eligible for
Medicaid, the Commissioner, through the Medicaid memorandum of
understanding, would provide for their enrollment under the
state Medicaid plan, and the state would provide for the same
periodic redetermination of eligibility under Medicaid as would
otherwise apply.
During the first two years of implementation, credits would
be allowed for coverage under a Basic plan only. Beginning in
the third year, credits would be allowed for coverage under
Enhanced or Premium plans by a process established by the
Commissioner. The individual would be responsible for any
difference between the premium for an Enhanced or Premium plan
and the credit amount based on a Basic plan applicable to that
enrollee.
The Commissioner would be authorized to request from the
Treasury Secretary information that may be required to carry
out this subtitle (regarding individual affordability credits),
consistent with existing rules regarding confidentiality and
disclosure of tax return information. Individuals who are
eligible to receive credits would not receive them in the form
of cash payments.
Sec. 242. Affordable Credit Eligible Individual
Current Law
None.
Proposed Law
This provision would define an ``affordable credit eligible
individual'' as an individual who (1) is lawfully present in a
state in the United States (other than those lawfully present
as non-immigrants, with some exceptions), (2) is enrolled in an
Exchange plan and is not enrolled through an employer plan that
meets the employer responsibility to contribute toward employee
and dependent coverage (described below in Section 312), (3)
has family income below 400 percent FPL, and (4) who is not a
Medicaid-eligible individual (other than some exceptions
described above in Section 202). Family members who are
eligible for credits will be treated as a single affordable
credit eligible individual.
Credits would not be available to full-time employees of an
employer offering coverage consistent with the employer
contribution rules described in Section 312. The Commissioner
would make exceptions to this rule for divorced or separated
individuals, or dependents of employees who would otherwise be
eligible for credits. Exceptions would also be made, beginning
in 2014, for full-time employees whose premium and cost sharing
costs under a group health plan exceed 11 percent of family
income.
Income would be defined as ``modified adjusted gross
income'' (MAGI), per the new 59B of the Internal Revenue Code,
added in Sec. 401. The Commissioner would conduct a study to
examine the application of income disregards for the purposes
of the affordability credits. The Commissioner would submit a
report to Congress of such a study, including recommendations
as the Commissioner determines appropriate. Affordability
credits would not be treated as a federal means-tested public
benefit for eligibility purposes for qualified aliens under the
Personal Responsibility and Work Opportunity Reconciliation Act
of 1996.
Sec. 243. Affordable Premium Credit
Current Law
None.
Proposed Law
This section would establish the rules for determining the
amount of the premium credit provided to eligible individuals
enrolled in an Exchange plan. The ``affordability premium
credit'' would be an amount equal to the lesser of (1) the
amount by which the enrollee's premium exceeds a specified
level that is considered affordable (``affordable premium
amount''), or (2) the amount by which the ``reference premium''
(the average premium of the three least expensive Basic plans
in the individual's premium rating area) exceeds the
``affordable premium amount.'' In calculating the reference
premium, the Commissioner may exclude plans with extremely
limited enrollments.
The affordable premium credit amount would be calculated on
a monthly basis, based on the following table, to limit
individuals' premium payments to a percentage of family income
(MAGI) relative to the poverty level, as specified in the table
below.
------------------------------------------------------------------------
Premium payment
Federal poverty level (FPL) limit, as a
percent of income
------------------------------------------------------------------------
133% or less......................................... 1.5%
150%................................................. 3%
200%................................................. 5%
250%................................................. 7%
300%................................................. 9%
350%................................................. 10%
400%................................................. 11%
------------------------------------------------------------------------
The Commissioner would establish premium percentage limits
so that for individuals whose family income is between the
income tiers specified in the table, the percentage limits
would increase on a linear sliding scale.
Sec. 244. Affordability Cost-Sharing Credit
Current Law
None.
Proposed Law
The affordability cost-sharing credit under this section
would be available to those enrolled in an Exchange plan whose
income is less than 400 percent FPL. The Commissioner would
specify reductions in cost-sharing amounts and the annual
limitation (out-of-pocket maximum) on cost-sharing under a
Basic plan so that the average percentage of covered benefits
paid by the plan (as estimated by the Commissioner) is equal to
the percentages (actuarial values) in the table for each income
tier.
------------------------------------------------------------------------
Actuarial value
Federal poverty level (FPL) percentage
------------------------------------------------------------------------
150% or less......................................... 97%
200%................................................. 93%
250%................................................. 85%
300%................................................. 78%
350%................................................. 72%
400%................................................. 70%
------------------------------------------------------------------------
The Commissioner would provide payments to QHBP-offering
entities in an amount equivalent to the increased actuarial
value of benefits resulting from the cost-sharing reductions.
Sec. 245. Income Determinations
Current Law
None.
Proposed Law
This provision would use an individual's adjusted gross
income in the most recent taxable year for determination of a
credit under this Subtitle. The Commissioner would take steps
as may be appropriate to ensure the accuracy of determinations
and redeterminations under this subtitle. The Commissioner
would request information from the Treasury Secretary as may be
permitted to verify income information submitted in
applications for credits. The Commissioner would establish
procedures for verification of income if no tax return is
available for the most recent completed tax year. The
Commissioner would establish special rules for cases when an
individual's income is expected (in a manner specified by the
Commissioner) to be significantly different from the income
submitted for application for and determination of a credit.
The Commissioner would establish rules under which an
individual would be required to inform the Commissioner when
there is a significant change in income. Such mechanism would
provide for guidelines that specify the circumstances that
qualify as a significant change, the verifiable information
required to document such a change, and the process for
submission of such information. If the Commissioner receives
new information from an individual regarding the family income
of the individual, the Commissioner would provide for a
redetermination of the individual's eligibility to be an
affordable credit eligible individual.
For a CHIP-eligible child deemed to be eligible for
coverage through the Exchange, during the first year of
implementation the Commissioner would establish rules under
which family income of the child is deemed to be no greater
than the family income of that child as most recently
determined by the State under CHIP. The Commissioner would
examine the feasibility and implication of adjusting the
application of the federal poverty level in this Subtitle to
take into account geographic differences, in order to reflect
cost-of-living variations across the country. The Commissioner
would submit a report to Congress, no later than the first day
of the second year of implementation, on such a study and make
recommendations as appropriate. An individual who intentionally
misrepresents family income or fails to disclose to the
Commissioner a significant change in family income would be
liable for repayment of any improperly received credit and, in
the case of intentional misrepresentation, may be required to
pay an additional penalty as imposed by the Commissioner.
Sec. 246. No Federal Payment for Undocumented Aliens
Current Law
None
Proposed Law
No credits would be given to individuals who are not
lawfully present in the country.
Subtitle D--State Innovation
Sec. 251. Waiver of ERISA Limitation; Application Instead of State
Single Payer System
Added by an amendment at Committee, this provision would
create an ERISA waiver to permit States to enact single payer
laws. The Department of Labor would determine whether the State
plan meets certain requirements to obtain the waiver. With such
a waiver, a state single payer system would operate in lieu of
the HIE in such state.
Title III--Shared Responsibility
Subtitle A--Individual Responsibility
Sec. 301. Individual Responsibility
The Committee did not exercise jurisdiction over this
section.
Subtitle B--Employer Responsibility
Sec. 311. Health Coverage Participation Requirements,
Sec. 312. Employer Responsibility to Contribute Towards Employee and
Dependent Coverage,
Sec. 313. Employer Contributions in Lieu of Coverage,
Sec. 314. Authority Related to Improper Steering,
Sec. 321. Satisfaction of Health Coverage Participation Requirements
under the Employee Retirement Income Security Act of 1974,
Sec. 322. Satisfaction of Health Coverage Participation Requirements
under the Internal Revenue Code of 1986,
Sec. 323. Satisfaction of Health Coverage Participation Requirements
under the Public Health Service Act, and
Sec. 324. Additional rules relating to health coverage participation
requirements
Current Law
There is no federal requirement that employers offer health
insurance coverage to employees or their families. As with
other compensation, the cost of employer-provided health
coverage is a deductible business expense under section 162 of
the Code. In addition, employer-provided health insurance
coverage is generally not included in an employee's gross
income.
ERISA\124\ preempts state law relating to certain employer-
sponsored health plans. While ERISA specifically provides that
its preemption rule does not exempt or relieve any person from
any State law which regulates insurance, ERISA also provides
that an employee benefit plan is not deemed to be engaged in
the business of insurance for purposes of any State law
regulating insurance companies or insurance contracts. As a
result of this ERISA preemption, the courts have held that
self-insured employer-sponsored health plans cannot be
regulated under State insurance law.
---------------------------------------------------------------------------
\124\Pub. L. No. 93-406
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While ERISA does not require an employer to offer health
benefits, it does require compliance with a few limited
standards if an employer chooses to offer health benefits,
mainly compliance with plan fiduciary standards, reporting and
disclosure requirements, and procedures for appealing denied
benefit claims. ERISA was amended (as well as the Public Health
Service Act and the Internal Revenue Code) in the Consolidated
Omnibus Budget Reconciliation Act of 1985 (COBRA)\125\ and the
Health Insurance Portability and Accountability Act of 1996
(``HIPAA'')\126\, adding other Federal requirements for health
plans, including rules for health care continuation coverage,
limitations on exclusions from coverage based on preexisting
conditions, and a few benefit requirements such as minimum
hospital stay requirements for mothers following the birth of a
child.
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\125\Pub. L. No. 99-272.
\126\Pub. L. No. 104-191.
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Proposed Law
Section 311. Health Coverage Participation Requirements
Section 311 of the bill sets forth the basic requirement
for an employer to offer individual and family health care
coverage, to make timely contributions to such coverage when
accepted by the employee, and to make contributions to the HIE
in lieu of such coverage when the employee declines the
coverage but obtains coverage from an HIE plan.
Additionally, employers that meet certain economic hardship
qualifications could apply for a two-year employer hardship
exemption that waives an employer's obligation to provide
coverage required by this bill. The Secretary shall develop
rules on the form and manner of such exemption applications and
should take a robust approach to collecting information from an
employer applicant and determining how significant and
unavoidable such claimed hardship is. For example, employers
should not be allowed to game or abuse this exemption through
timed outlays, like executive bonuses, in order to create a
balance sheet designed to demonstrate hardship when it comes to
complying with health coverage requirements. The Committee
expects the Secretary to require adequate documentation of the
employer's financial circumstances to demonstrate whether it
qualifies for this exemption.
Section 312. Employer Responsibility to Contribute towards Employee and
Dependent Coverage
Section 312 specifies the minimum contribution amounts an
employer must make to satisfy the coverage requirements for
full-time and non-full-time employees. An employer may not
satisfy the minimum contribution requirement through a salary
reduction arrangement with the employee. This section also
provides rules for the automatic enrollment of employees into
employer plans and how employees may opt out of such automatic
enrollment.
Employers offering health benefit plans would be required
to offer individual and family coverage under a qualified
health benefits plan (or certain grandfathered health insurance
plans)\127\ and to make contributions to help discharge the
coverage costs of employees enrolled in the employer-provided
plan. For full time employees, the employer would be required
to contribute at least 72.5 percent of the lowest cost plan
offered by the employer which meets the requirements of the
essential benefits package\128\ (65 percent for eligible
employees electing family coverage). For part time employees,
the contribution amount from the employer would be a fraction
of the minimum contributions made for full time employees, with
such fraction being equal to a ratio of the average weekly
hours worked by the employee compared to the minimum weekly
hours specified by the Health Choices Commissioner. Employers
would be required to provide information to the Secretaries of
Labor, Health and Human Services, and the Treasury, to assist
the Secretaries with ascertaining compliance with the
proposal's requirements.
---------------------------------------------------------------------------
\127\For a plan to be a ``qualified health benefits plan'' it would
need to meet certain minimum coverage requirements, but it need not be
offered through the Exchange.
\128\The essential benefits package would include certain specified
limits on required cost sharing, would ban annual or lifetime limit on
covered health care items or services and certain specified minimum
services, and would impose certain requirements as to network adequacy
as determined by the Health Choices Commissioner.
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Sec. 313. Employer Contributions in Lieu of Coverage
Employers that elect not to provide eligible health benefit
plans to their employees would be subject to a contribution to
the Health Insurance Exchange Trust Fund equal to 8 percent of
wages (as defined in section 3121 for purposes of FICA). There
is a special rule for an employer who is considered a small
employer, defined as any employer with an annual payroll for
the preceding calendar year which does not exceed $400,000.
Employers with payrolls that do not exceed $250,000 would
be exempt. Employers with payrolls that exceed $250,000 but do
not exceed $300,000 would be subject to a contribution equal to
2 percent of wages; employers with payrolls that exceed
$300,000 but do not exceed $350,000 would be subject to a
contribution of 4 percent of wages; and employers with an
annual payroll that exceeds $350,000 but do not exceed $400,000
would be subject to a contribution of 6 percent of wages.
Related employers and predecessors would be treated as a
single employer for purposes of determining whether an employer
qualifies for the special rule for small employers.
Section 314. Authority related to improper steering
The Health Choices Commissioner (in coordination with the
Secretaries of Labor, Health and Human Services, and the
Treasury) would have the authority to set standards for
determining whether employers were undertaking any actions to
affect the risk pool within the Health Insurance exchange by
inducing employees to enroll in Exchange-participating health
plans rather than in employer-provided plans. An employer found
to be violating these standards would be treated as not meeting
the coverage requirements.
Section 321. Satisfaction of Health Coverage Participation Requirements
under the Employee Retirement Income Security Act of 1974
Section 321 amends ERISA and sets forth the requirements
for an employer to satisfy the health coverage participation
requirements under the bill.
Elections
Under the proposal, employers would be required to make an
affirmative election regarding whether to offer health benefit
plans to employees. Those employers electing to offer health
benefit plans would be required to have their plans meet
certain minimum coverage requirements. Employers choosing not
to offer health benefit plans, or that offered plans that did
not meet the proposal's qualification requirements, would be
subject to additional taxes or penalties. Employers with
payrolls of $250,000 or less would be exempt from the pay or
play requirements.
The Secretaries of Labor, Health and Human Services, and
the Treasury, would prescribe coordinated rules for employer
elections regarding coverage, including rules for the time,
manner and form of elections, and the treatment of affiliated
groups of employers, separate lines of business, and full
versus part time employees.\129\ Subject to Section 151,
employers electing to offer health benefit plans would be
treated as having established and maintained a group health
plan for purposes of ERISA and the Public Health Service Act
(``PHSA''),\130\ and the proposal's health coverage
participation requirements would be deemed to be part of the
terms and conditions of the employer-provided plan.
---------------------------------------------------------------------------
\129\The Commissioner and Secretaries would also be required to
issue regulations applying the proposal's requirements to multiemployer
plans (as defined in section 3(37) of ERISA).
\130\42. U.S.C. 6A.
---------------------------------------------------------------------------
Employers would be required to provide verification of
their compliance with the proposal's health coverage
participation requirement to the Health Choices Commissioner
and to the Secretaries of Labor, Health and Human Services, and
the Treasury.
Aggregation Rules
For affiliated groups of employers, the identity of the
employer would generally be determined by applying the employer
aggregation rules in section 414(b), (c), (m), and (o).\131\
The same election would apply to all employers in the
aggregated group. Employers would be able to make separate
elections for employees in separate lines of business, or for
full time employees and part time employees.
---------------------------------------------------------------------------
\131\Section 414(b) provides that, for specified employee benefit
purposes, all employees of all corporations which are members of a
controlled group of corporations are treated as employed by a single
employer. There is a similar rule in section 414(c) under which all
employees of trades or businesses (whether or not incorporated) which
are under common control are treated under regulations as employed by a
single employer, and, in section 414(m), under which employees of an
affiliated service group (as defined in that section) are treated as
employed by a single employer. Section 414(o) authorizes the Treasury
to issue regulations to prevent avoidance of the certain requirements
under section 414(m).
---------------------------------------------------------------------------
Noncompliance with Coverage Requirements
Employers who elected to provide coverage but whose health
benefit plans failed to meet the proposal's minimum health
coverage participation requirements would be subject to
penalties of $100 per day for each employee to whom the failure
applied.\132\ The penalties would not apply to (1) periods
during which an employer used reasonable diligence but did not
discover any failures, and (2) failures that were corrected
within 30 days of discovery (but only if such failures were due
to reasonable cause and not willful neglect). Penalties imposed
on employers for unintentional failures (i.e., due to
reasonable cause and not to willful neglect) would be limited
to the lesser of: 10 percent of the aggregate amount paid or
incurred by the employer during the preceding taxable year for
group health plans, or $500,000.
---------------------------------------------------------------------------
\132\The proposal would permit the penalties to be assessed through
an excise tax or a civil penalty under ERISA or PHSA. Penalties for any
particular failure would not be duplicated, however. The Secretary of
Labor or Health and Human Services, as appropriate, would be required
to give advance written notification of failure to employers prior to
the assessment of a penalty. The Secretary of Health and Human Services
would be able to bring civil actions in Federal court to collect civil
penalties assessed under PHSA.
---------------------------------------------------------------------------
The Secretaries would also be able to terminate an
employer's election (and thus subject them to the required
contribution imposed on employers that do not offer coverage)
if it was determined that the employer was substantially
noncompliant with health coverage participation requirements.
The Secretary of Labor would be required to conduct
periodic audits of employers in order to discover noncompliance
with health coverage participation requirements. The Secretary
of the Treasury and the Health Choices Commissioner would be
informed of audit results.
To facilitate such audits, especially with respect to the
problem of employers misclassifying employees as independent
contractors, the Secretary of Labor would be authorized to
issue regulations that would require employers to keep records
on both employees and certain claimed independent contractors.
The Secretary should craft such recordkeeping requirements to
assist in uncovering and remedying any misclassification of
workers.
Sec. 322 Satisfaction of Health Coverage Participation Requirements
under the Internal Revenue Code
The Committee did not exercise jurisdiction over this
section.
Sec. 323. Satisfaction of Health Coverage Participation Requirements
under the Public Health Service Act
The Committee did not exercise jurisdiction over this
section.
Sec. 324. Additional Rules Relating to Health Coverage Participation
Requirements
The Health Choices Commissioner and the Secretaries of
Labor, Health and Human Services, and the Treasury would be
required to execute an interagency memorandum of understanding
to ensure coordination with respect to regulations, rulings,
interpretations, and enforcement of the proposal.
TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986
The Committee does not have jurisdiction over Title IV of
Division A.
Division B--Medicare and Medicaid Improvements
The Committee does not have jurisdiction over Division B.
Division C--Public Health and Workforce Development
The Committee has jurisdiction over certain provisions in
Division C, summarized below.
Sec. 2502. Establishment of Grant Program
Current Law
PHSA Section 831 establishes a Nurse Education, Practice,
and Retention Grants program. Under this program, the Secretary
may award grants or enter into contracts with a school of
nursing, health care facility, or a partnership of the two, to
respond to the nursing shortage and increase the number of
registered nurses in specific priority areas, as described.
Funds may be used to promote career advancement for nurses.
Appropriations authority for this grant program expired at the
end of FY2007.
Proposed Law
This provision would establish a new partnership grant
program, administered by the Secretary of Labor, to provide
matching grants for nursing training programs that aim to
increase the number and skill levels of nurses, and expand
nurse training capacity, in order to address projected nursing
shortages. The Secretary of Labor would be required to
establish this partnership grant program within six months of
enactment.
Eligible entities would be: (1) a health care entity that
is jointly administered by a health care employer and a labor
union representing that organization's health care employees,
and that carries out activities using training funds as
provided under Section 302(c)(6) of the Labor Management
Relations Act (relating to funds paid by an employer to a trust
fund established by a union to provide specified benefits or
defray the costs of apprenticeship or training programs); (2)
an entity that operates a training program jointly administered
by one or more health care providers, facilities, or a trade
association of health care providers; and by organizations that
represent the interests of direct care health care workers or
staff nurses, and include their leadership input; or (3) a
State training partnership program that consists of non-profit
organizations that have equal participation from industry
(including both public and private employers) and labor
organizations (including joint labor-management training
programs), which may include representatives from local
governments, worker investment agency one-stop career centers,
community-based organizations, community colleges, and
accredited schools of nursing. Eligible entities would be
required to submit an appropriate application to the Secretary
of Labor.
An eligible entity that is a health care employer would
also be required to demonstrate that it: (1) has an established
nursing retention program; (2) provides nursing wages and
benefits that are competitive for its market or that have been
collectively bargained with a labor organization; and (3)
provides support for employees participating in the training
program through one or more specified means, including paid
leave time, or contributions to a training fund, among others.
The Secretary of Labor would be prohibited from awarding
grants unless the applicant agrees to provide non-Federal
matching funds that are equal to or no less than one dollar for
each Federal dollar received. Matching funds could be secured
from donations or provided through the cash equivalent of paid
release time provided to incumbent worker students
participating in educational programs. In addition, eligible
entities would be required to demonstrate collaboration with
accredited schools of nursing.
Awardees would be required to use funds to create training
programs to allow incumbent health care workers to become
nurses, to provide for the advanced training of nurses, or
both. In each case, a number of specified program components
would be required.
In making awards, the Secretary of Labor would be required
to give preference to programs that improve nurse retention;
that improve the diversity of nursing graduates; that improve
the quality of nursing education; that have demonstrated
success for transitioning health care workers into nursing or
have established pilot programs to increase nurse faculty; or
that are modeled after or affiliated with established
transitioning and pilot programs mentioned above.
Awardees would be required annually to submit an evaluation
to the Secretary of Labor, which must include a description of
the grantee's activities and an evaluation of program outcomes.
Several outcomes that may be reported are specified.
The Secretary of Labor would be required, within two years
of enactment and annually thereafter, to report to Congress on
the overall effectiveness of the grant programs carried out
under this provision. This provision would authorize to be
appropriated such sums as may be necessary to carry out the
partnership grant program.
Subtitle F--Standards for Accessibility to Medical Equipment for
Individuals with Disabilities
Sec. 2541. Access for Individuals with Disabilities
This provision would require the development of standards
for accessible equipment, and require relevant agencies to
ensure that all entities covered by the legislation meet the
requirements of the Americans with Disabilities Act and Section
504 of the Rehabilitation Act.
Subtitle G--Other Grant Programs
Sec. 2551. Reducing Student-to-School Nurse Ratios
This provision would make available demonstration grants to
eligible local education agencies with the purpose to reduce
the student-to-school nurse ratio in public elementary and
secondary schools with special consideration given to high-need
local educational agencies who demonstrate the greatest need
for new or additional nursing services by providing information
on the current ratios of students to school nurses.
Sec. 2552. Wellness Program Grants
This provision would authorize the Secretary of Labor to
offer incentives to employers who establish qualified wellness
programs for their employees. Participating employers must
offer the programs to all employees and cannot mandate
participation nor use participation as a condition to receive
any financial incentive. The Committee recognizes the success
of workplace wellness programs in promoting health and well-
being and in reducing medical expenditures. The Committee urges
the Secretary to promote both public and private workplace
wellness programs.
Sec. 2553. Health Professions Training for Diversity Programs
This provision would authorize the Secretary of Labor to
make grants to certain health care workforce development
programs, particularly those focused on low-income persons,
veterans, or rural or urban underserved populations.
Subtitle H--Long-Term Care and Family Caregiver Support
Sec. 2561. Long-Term Care and Family Caregiver Support
This provision would establish an advisory panel and a
pilot program focused on improving the working conditions and
training for the long-term care workforce.
Subtitle I--Online Resources
Sec. 2571. Web Site on Health Care Labor Market and Related Educational
and Training Opportunities
This provision would require the Secretary of Labor to
establish a web site that would serve as a clearinghouse of
information on the health care labor market, including
educational and training opportunities and financial aid
information.
Sec. 2572. Online Health Workforce Training Programs
This provision would establish a grant program with the
Secretary of Labor to award grants to qualifying entities
providing health care workers with online training.
VI. Explanation of Amendments
The Amendment in the Nature of a Substitute and amendments
thereof are explained in the body of this report.
VII. Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1, the Congressional
Accountability Act, requires a description of the application
of this bill to the legislative branch. The Committee has
determined that the bill would apply to the legislative branch
and its employees in the same way it would apply to employers
and employees in the private sector.
VIII. Regulatory Impact Statement
The Committee has determined that H.R. 3200 provides for a
new Health Insurance Exchange, in which participation is
voluntary, and that such Exchange will be governed by a new
Health Choices Administration which will establish, among other
things, standards for what constitutes a qualified health
benefit plan. With several exceptions for other acceptable
coverage, employers and individuals will be required to
maintain coverage via a qualified health benefit plan or pay a
fee for not doing so. This new health care policy
infrastructure will have the impact of ensuring that 97% of
Americans have meaningful health insurance coverage and reduce
the cost of providing such coverage for both employers and
individuals.
IX. Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement of
whether the provisions of the reported bill include unfunded
mandates. The Committee anticipates that this issue will be
addressed in a CBO cost estimate letter for the bill when it
proceeds to consideration on the House floor, following the
merger of the three versions of the bill reported by the three
committees of jurisdiction.
X. Earmark Statement
H.R. 3200 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(d), 9(e) or 9(f) of rule XXI.
XI. Roll Call
XII. Statement of Oversight Findings and Recommendations of the
Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the body of this report.
XIII. New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the House of Representatives and section 308(a) of the
Congressional Budget Act of 1974 and with respect to
requirements of 3(c)(3) of rule XIII of the House of
Representatives and section 402 of the Congressional Budget Act
of 1974, the Committee anticipates that a CBO cost estimate
letter on H.R. 3200 will address these issues when the bill
proceeds to consideration on the House floor. CBO is unable to
provide a cost estimate prior to the reconciliation of the
versions of the bill as amended and reported by the three
committees of jurisdiction.
XIV. Statement of General Performance Goals and Objectives
In accordance with clause 3(c) of House rule XIII, the goal
of H.R. 3200 is to increase access to affordable quality health
coverage and contain costs.
XV. Constitutional Authority Statement
Under clause 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee must include a statement
citing the specific powers granted to Congress in the
Constitution to enact the law proposed by H.R. 3200. The
amendments and new law made by this bill are within Congress'
authority under Article I, Section 8, Clauses 1, 3, and 18 of
the Constitution.
XVI. Committee Estimate
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 3200.
The Committee anticipates that, as noted earlier, a CBO
cost estimate will address these issues when the bill proceeds
to consideration on the House floor.
XVII. Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
SHORT TITLE AND TABLE OF CONTENTS
Section 1. This Act may be cited as the ``Employee Retirement
Income Security Act of 1974''.
TABLE OF CONTENTS
* * * * * * *
TITLE I--PROTECTION OF EMPLOYEE BENEFIT RIGHTS
* * * * * * *
Subtitle B--Regulatory Provisions
* * * * * * *
Part 7--Group Health Plan Requirements
* * * * * * *
Subpart B--Other Requirements
* * * * * * *
Sec. 715. Protection against post-retirement reduction of retiree health
benefits.
* * * * * * *
Part 8--National Health Coverage Participation Requirements
Sec. 801. Election of employer to be subject to national health coverage
participation requirements.
Sec. 802. Treatment of coverage resulting from election.
Sec. 803. Health coverage participation requirements.
Sec. 804. Rules for applying requirements.
Sec. 805. Termination of election in cases of substantial noncompliance.
Sec. 806. Regulations.
* * * * * * *
TITLE I--PROTECTION OF EMPLOYEE BENEFIT RIGHTS
* * * * * * *
Subtitle B--Regulatory Provisions
* * * * * * *
Part 5--Administration and Enforcement
* * * * * * *
CIVIL ENFORCEMENT
Sec. 502. (a) A civil action may be brought--
(1) * * *
* * * * * * *
(6) by the Secretary to collect any civil penalty
under [paragraph (2), (4), (5), (6), (7), (8), or (9)
of subsection (c)] paragraph (2), (4), (5), (6), (7),
(8), (9), (10), or (11) of subsection (c) or under
subsection (i) or (l);
* * * * * * *
(c)(1) * * *
* * * * * * *
(11) Health coverage participation requirements.--
(A) Civil penalties.--In the case of any employer who
fails (during any period with respect to which an
election under section 801(a) is in effect) to satisfy
the health coverage participation requirements with
respect to any employee, the Secretary may assess a
civil penalty against the employer of $100 for each day
in the period beginning on the date such failure first
occurs and ending on the date such failure is
corrected.
(B) Health coverage participation requirements.--For
purposes of this paragraph, the term ``health coverage
participation requirements'' has the meaning provided
in section 803.
(C) Limitations on amount of penalty.--
(i) Penalty not to apply where failure not
discovered exercising reasonable diligence.--No
penalty shall be assessed under subparagraph
(A) with respect to any failure during any
period for which it is established to the
satisfaction of the Secretary that the employer
did not know, or exercising reasonable
diligence would not have known, that such
failure existed.
(ii) Penalty not to apply to failures
corrected within 30 days.--No penalty shall be
assessed under subparagraph (A) with respect to
any failure if--
(I) such failure was due to
reasonable cause and not to willful
neglect, and
(II) such failure is corrected during
the 30-day period beginning on the 1st
date that the employer knew, or
exercising reasonable diligence would
have known, that such failure existed.
(iii) Overall limitation for unintentional
failures.--In the case of failures which are
due to reasonable cause and not to willful
neglect, the penalty assessed under
subparagraph (A) for failures during any 1-year
period shall not exceed the amount equal to the
lesser of--
(I) 10 percent of the aggregate
amount paid or incurred by the employer
(or predecessor employer) during the
preceding 1-year period for group
health plans, or
(II) $500,000.
(D) Advance notification of failure prior to
assessment.--Before a reasonable time prior to the
assessment of any penalty under this paragraph with
respect to any failure by an employer, the Secretary
shall inform the employer in writing of such failure
and shall provide the employer information regarding
efforts and procedures which may be undertaken by the
employer to correct such failure.
(E) Coordination with excise tax.--Under regulations
prescribed in accordance with section 324 of the
America's Affordable Health Choices Act of 2009, the
Secretary and the Secretary of the Treasury shall
coordinate the assessment of penalties under this
section in connection with failures to satisfy health
coverage participation requirements with the imposition
of excise taxes on such failures under section 4980H(b)
of the Internal Revenue Code of 1986 so as to avoid
duplication of penalties with respect to such failures.
(F) Deposit of penalty collected.--Any amount of
penalty collected under this paragraph shall be
deposited as miscellaneous receipts in the Treasury of
the United States.
[(10)] (12) The Secretary and the Secretary of Health and
Human Services shall maintain such ongoing consultation as may
be necessary and appropriate to coordinate enforcement under
this subsection with enforcement under section 1144(c)(8) of
the Social Security Act.
* * * * * * *
Part 7--Group Health Plan Requirements
Subpart A--Requirements Relating to Portability, Access, and
Renewability
SEC. 701. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING
CONDITION EXCLUSIONS.
(a) Limitation on Preexisting Condition Exclusion Period;
Crediting for Periods of Previous Coverage.--Subject to
subsection (d), a group health plan, and a health insurance
issuer offering group health insurance coverage, may, with
respect to a participant or beneficiary, impose a preexisting
condition exclusion only if--
(1) such exclusion relates to a condition (whether
physical or mental), regardless of the cause of the
condition, for which medical advice, diagnosis, care,
or treatment was recommended or received within the [6-
month period] 30-day period ending on the enrollment
date;
(2) such exclusion extends for a period of not more
than [12 months] 3 months (or [18 months] 9 months in
the case of a late enrollee) after the enrollment date;
and
* * * * * * *
Subpart B--Other Requirements
* * * * * * *
SEC. 715. PROTECTION AGAINST POST-RETIREMENT REDUCTION OF RETIREE
HEALTH BENEFITS.
(a) In General.--Every group health plan shall contain a
provision which expressly bars the plan, or any fiduciary of
the plan, from reducing the benefits provided under the plan to
a retired participant, or beneficiary of such participant, if
such reduction affects the benefits provided to the participant
or beneficiary as of the date the participant retired for
purposes of the plan and such reduction occurs after the
participant's retirement unless such reduction is also made
with respect to active participants.
(b) No Reduction.--Notwithstanding that a group health plan
described in subsection (a) may contain a provision reserving
the general power to amend or terminate the plan or a provision
specifically authorizing the plan to make post-retirement
reductions in retiree health benefits, it shall be prohibited
for any group health plan, whether through amendment or
otherwise, to reduce the benefits provided to a retired
participant or his or her beneficiary under the terms of the
plan if such reduction of benefits occurs after the date the
participant retired for purposes of the plan and reduces
benefits that were provided to the participant, or his or her
beneficiary, as of the date the participant retired unless such
reduction is also made with respect to active participants.
* * * * * * *
PART 8--NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS
SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH
COVERAGE PARTICIPATION REQUIREMENTS.
(a) In General.--An employer may make an election with the
Secretary to be subject to the health coverage participation
requirements.
(b) Time and Manner.--An election under subsection (a) may be
made at such time and in such form and manner as the Secretary
may prescribe.
SEC. 802. TREATMENT OF COVERAGE RESULTING FROM ELECTION.
(a) In General.--If an employer makes an election to the
Secretary under section 801--
(1) such election shall be treated as the
establishment and maintenance of a group health plan
(as defined in section 733(a)) for purposes of this
title, subject to section 151 of the America's
Affordable Health Choices Act of 2009, and
(2) the health coverage participation requirements
shall be deemed to be included as terms and conditions
of such plan.
(b) Periodic Investigations to Discover Noncompliance.--The
Secretary shall regularly audit a representative sampling of
employers and group health plans and conduct investigations and
other activities under section 504 with respect to such
sampling of plans so as to discover noncompliance with the
health coverage participation requirements in connection with
such plans. The Secretary shall communicate findings of
noncompliance made by the Secretary under this subsection to
the Secretary of the Treasury and the Health Choices
Commissioner. The Secretary shall take such timely enforcement
action as appropriate to achieve compliance.
(c) Recordkeeping.--To facilitate the audits described in
subsection (b), the Secretary shall promulgate recordkeeping
requirements for employers to account for both employees of the
employer and individuals whom the employer has not treated as
employees of the employer but with whom the employer, in the
course of the trade or business in which the employer is
engaged, has engaged for the performance of labor or services.
SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
For purposes of this part, the term ``health coverage
participation requirements'' means the requirements of part 1
of subtitle B of title III of division A of America's
Affordable Health Choices Act of 2009 (as in effect on the date
of the enactment of such Act).
SEC. 804. RULES FOR APPLYING REQUIREMENTS.
(a) Affiliated Groups.--In the case of any employer which is
part of a group of employers who are treated as a single
employer under subsection (b), (c), (m), or (o) of section 414
of the Internal Revenue Code of 1986, the election under
section 801 shall be made by such employer as the Secretary may
provide. Any such election, once made, shall apply to all
members of such group.
(b) Separate Elections.--Under regulations prescribed by the
Secretary, separate elections may be made under section 801
with respect to--
(1) separate lines of business, and
(2) full-time employees and employees who are not
full-time employees.
SEC. 805. TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL
NONCOMPLIANCE.
The Secretary may terminate the election of any employer
under section 801 if the Secretary (in coordination with the
Health Choices Commissioner) determines that such employer is
in substantial noncompliance with the health coverage
participation requirements and shall refer any such
determination to the Secretary of the Treasury as appropriate.
SEC. 806. REGULATIONS.
The Secretary may promulgate such regulations as may be
necessary or appropriate to carry out the provisions of this
part, in accordance with section 324(a) of the America's
Affordable Health Choices Act of 2009. The Secretary may
promulgate any interim final rules as the Secretary determines
are appropriate to carry out this part.
* * * * * * *
----------
REHABILITATION ACT OF 1973
* * * * * * *
TITLE V--RIGHTS AND ADVOCACY
* * * * * * *
SEC. 510. STANDARDS FOR ACCESSIBILITY OF MEDICAL DIAGNOSTIC EQUIPMENT.
(a) Standards.--Not later than 9 months after the date of
enactment of the America's Affordable Health Choices Act of
2009, the Architectural and Transportation Barriers Compliance
Board shall issue guidelines setting forth the minimum
technical criteria for medical diagnostic equipment used in (or
in conjunction with) physician's offices, clinics, emergency
rooms, hospitals, and other medical settings. The guidelines
shall ensure that such equipment is accessible to, and usable
by, individuals with disabilities, including provisions to
ensure independent entry to, use of, and exit from the
equipment by such individuals to the maximum extent possible.
(b) Medical Diagnostic Equipment Covered.--The guidelines
issued under subsection (a) for medical diagnostic equipment
shall apply to equipment that includes examination tables,
examination chairs (including chairs used for eye examinations
or procedures, and dental examinations or procedures), weight
scales, mammography equipment, x-ray machines, and other
equipment commonly used for diagnostic or examination purposes
by health professionals.
(c) Interim Standards.--Until the date on which final
regulations are issued under subsection (d), purchases of
examination tables, weight scales, and mammography equipment
and used in (or in conjunction with) medical settings described
in subsection (a), shall adhere to the following interim
accessibility requirements:
(1) Examination tables shall be height-adjustable
between a range of at least 18 inches to 37 inches.
(2) Weight scales shall be capable of weighing
individuals who remain seated in a wheelchair or other
personal mobility aid.
(3) Mammography machines and equipment shall be
capable of being used by individuals in a standing,
seated, or recumbent position, including individuals
who remain seated in a wheelchair or other personal
mobility aid.
(d) Regulations.--Not later than 6 months after the date of
the issuance of the guidelines under subsection (a), each
appropriate Federal agency authorized to promulgate regulations
under this Act or under the Americans with Disabilities Act
shall--
(1) prescribe regulations in an accessible format as
necessary to carry out the provisions of such Act and
section 504 of this Act that include accessibility
standards that are consistent with the guidelines
issued under subsection (a); and
(2) ensure that health care providers and health care
plans covered by the America's Affordable Health
Choices Act of 2009 meet the requirements of the
Americans with Disabilities Act and section 504,
including provisions ensuring that individuals with
disabilities receive equal access to all aspects of the
health care delivery system.
(e) Review and Amend.--The Architectural and Transportation
Barriers Compliance Board shall periodically review and, as
appropriate, amend the guidelines as prescribed under
subsection (a). Not later than 6 months after the date of the
issuance of such revised guidelines, revised regulations
consistent with such guidelines shall be promulgated in an
accessible format by the appropriate Federal agencies described
in subsection (d).
* * * * * * *
----------
WORKFORCE INVESTMENT ACT OF 1998
* * * * * * *
TITLE I--WORKFORCE INVESTMENT SYSTEMS
* * * * * * *
Subtitle D--National Programs
* * * * * * *
SEC. 171. DEMONSTRATION, PILOT, MULTISERVICE, RESEARCH, AND MULTISTATE
PROJECTS.
(a) * * *
* * * * * * *
(f) Health Professions Training for Diversity Program.--
(1) In general.--The Secretary shall make available
20 grants of no more than $1,000,000 annually to
nonprofit organizations for the purposes of providing
workforce development training program for those who
are currently employed in the health care workforce.
(2) Eligibility.--For the purposes of providing
assistance and services under the program established
in this subsection, grants are to be awarded to Area
Health Education Centers or similar nonprofit
organizations involved in the development and
implementation of health care workforce development
programs and that--
(A) have a formal affiliation with a hospital
or community health center, and institution of
higher education as defined by section 101 of
the Higher Education Act of 1965;
(B) have a history of providing program
services to minority populations; and
(C) provide workforce development programs to
low-income persons, veterans, or urban and
rural underserved communities.
(g) Online Health Workforce Training Program.--
(1) Grant program.--
(A) In general.--The Secretary shall award
National Health Workforce Online Training
Grants on a competitive basis to eligible
entities to enable such entities to carry out
training for individuals to attain or advance
in health care occupations. An entity may
leverage such grant with other Federal, State,
local, and private resources, in order to
expand the participation of businesses,
employees, and individuals in such training
programs.
(B) Eligibility.--In order to receive a grant
under the program established under this
paragraph--
(i) an entity shall be an educational
institution, community-based
organization, non-profit organization,
workforce investment board, or local or
county government; and
(ii) an entity shall provide online
workforce training for individuals
seeking to attain or advance in health
care occupations, including nursing,
nursing assistants, dentistry,
pharmacy, health care management and
administration, public health, health
information systems analysis, medical
assistants, and other health care
practitioner and support occupations.
(C) Priority.--Priority in awarding grants
under this paragraph shall be given to entities
that--
(i) have demonstrated experience in
implementing and operating online
worker skills training and education
programs;
(ii) have demonstrated experience
coordinating activities, where
appropriate, with the workforce
investment system; and
(iii) conduct training for
occupations with national or local
shortages.
(D) Data collection.--Grantees under this
paragraph shall collect and report information
on--
(i) the number of participants;
(ii) the services received by the
participants;
(iii) program completion rates;
(iv) factors determined as
significantly interfering with program
participation or completion;
(v) the rate of job placement; and
(vi) other information as determined
as needed by the Secretary.
(E) Outreach.--Grantees under this paragraph
shall conduct outreach activities to
disseminate information about their program and
results to workforce investment boards, local
governments, educational institutions, and
other workforce training organizations.
(F) Performance levels.--The Secretary shall
establish indicators of performance that will
be used to evaluate the performance of grantees
under this paragraph in carrying out the
activities described in this paragraph. The
Secretary shall negotiate and reach agreement
with each grantee regarding the levels of
performance expected to be achieved by the
grantee on the indicators of performance.
(G) Authorization of appropriations.--There
are authorized to be appropriated to the
Secretary to carry out this subsection
$50,000,000 for fiscal years 2011 through 2020.
(2) Online health professions training program
clearinghouse.--
(A) Description of grant.--The Secretary
shall award one grant to an eligible
postsecondary educational institution to
provide the services described in this
paragraph.
(B) Eligibility.--To be eligible to receive a
grant under this paragraph, a postsecondary
educational institution shall--
(i) have demonstrated the ability to
disseminate research on best practices
for implementing workforce investment
programs; and
(ii) be a national leader in
producing cutting-edge research on
technology related to workforce
investment systems under subtitle B.
(C) Services.--The postsecondary educational
institution that receives a grant under this
paragraph shall use such grant--
(i) to provide technical assistance
to entities that receive grants under
paragraph (1);
(ii) to collect and nationally
disseminate the data gathered by
entities that receive grants under
paragraph (1); and
(iii) to disseminate the best
practices identified by the National
Health Workforce Online Training Grant
Program to other workforce training
organizations.
(D) Authorization of appropriations.--There
are authorized to be appropriated to the
Secretary to carry out this subsection
$1,000,000 for fiscal years 2011 through 2020.
* * * * * * *
----------
OLDER AMERICANS ACT OF 1965
* * * * * * *
TITLE II--ADMINISTRATION ON AGING
* * * * * * *
FUNCTIONS OF ASSISTANT SECRETARY
Sec. 202. (a) * * *
(b) To promote the development and implementation of
comprehensive, coordinated systems at Federal, State, and local
levels that enable older individuals to receive long-term care
in home and community-based settings, in a manner responsive to
the needs and preferences of older individuals and their family
caregivers, the Assistant Secretary shall, consistent with the
applicable provisions of this title--
(1) collaborate, coordinate, and consult with other
Federal entities responsible for formulating and
implementing programs, benefits, and services related
to providing long-term care, and may make grants,
contracts, and cooperative agreements with funds
received from other Federal entities, and, in carrying
out the purposes of this paragraph, shall make
recommendations to other Federal entities regarding
appropriate and effective means of identifying,
promoting, and implementing investments in the direct
care workforce necessary to meet the growing demand for
long-term health services and supports and assisting
States in developing a comprehensive state workforce
development plans with respect to such workforce
including efforts to systematically assess, track, and
report on workforce adequacy and capacity;
* * * * * * *
(g)(1) The Assistant Secretary shall establish a Personal
Care Attendant Workforce Advisory Panel and pilot program to
improve working conditions and training for long term care
workers, including home health aides, certified nurse aides,
and personal care attendants.
(2) The Panel shall include representatives from--
(A) relevant health care agencies and facilities
(including personal or home care agencies, home health
care agencies, nursing homes and residential care
facilities);
(B) the disability community;
(C) the nursing community;
(D) direct care workers (which may include unions and
national organizations);
(E) older individuals and family caregivers;
(F) State and federal health care entities; and
(G) experts in workforce development and adult
learning.
(3) Within one year after the establishment of the Panel, the
Panel shall submit a report to the Assistant Secretary
articulating core competencies for eligible personal or home
care aides necessary to successfully provide long-term services
and supports to eligible consumers, as well as recommended
training curricula and resources.
(4) Within 180 days after receipt by the Assistant Secretary
of the report under paragraph (3), the Assistant Secretary
shall establish a 3-year demonstration program in 4 states to
pilot and evaluate the effectiveness of the competencies
articulated by the Panel and the training curricula and
training methods recommended by the Panel.
(5) Not later than 1 year after the completion of the
demonstration program under paragraph (4), the Assistant
Secretary shall submit to each House of the Congress a report
containing the results of the evaluations by the Assistant
Secretary pursuant to paragraph (4), together with such
recommendations for legislation or administrative action as the
Assistant Secretary determines appropriate.
* * * * * * *
TITLE III--GRANTS FOR STATE AND COMMUNITY PROGRAMS ON AGING
Part A--General Provisions
* * * * * * *
AUTHORIZATION OF APPROPRIATIONS; USES OF FUNDS
Sec. 303. (a) * * *
* * * * * * *
(e)(1) * * *
(2) There are authorized to be appropriated to carry out part
E (relating to family caregiver support) $166,500,000 for
fiscal year 2008, [$173,000,000 for fiscal year 2009,
$180,000,000 for fiscal year 2010, and $187,000,000 for fiscal
year 2011] and $250,000,000 for each of the fiscal years 2010,
2011, and 2012.
* * * * * * *
XVIII. Committee Correspondence
None.
XIX. Minority Views
------
MINORITY VIEWS
Introduction
Committee Republicans agree that health care reform
legislation should make health care more affordable, improve
quality, and reduce the number of uninsured Americans. As
policymakers, we should be doing all that we can to make
positive reforms to the health care system that would use
private markets to lower the cost of health care insurance;
improve affordability and accessibility for both employers and
employees; give employers and employees the tools they need to
encourage healthier behavior; change health care provider
reimbursement structures to reward high-quality results; and
address the long-term solvency of existing entitlement
programs, like Medicare and Medicaid.
Considering that the majority of Americans obtain health
insurance coverage through their employers, the employment-
based system plays a central role in the delivery of health
care. Recognizing the importance of employment-based health
coverage, Committee Republicans have led efforts in recent
years to lower the cost and increase the affordability of
employment-based health coverage. Committee Republicans
continue to support efforts to assist employers and employees
in obtaining cost-effective, high quality coverage.
In assessing health care reform legislation, Committee
Republicans bear in mind a number of important principles.
Foremost, reform efforts should allow individuals who are
satisfied with their current coverage to keep it, and give
Americans the freedom to choose the health plans and medical
providers that best fit their needs. Second, reforms should
make quality health care coverage affordable and accessible for
every American, regardless of pre-existing health conditions.
Third, we must guard against a new government-run health care
plan that would eliminate the health coverage that more than
100 million Americans currently receive through their job, or
limit their choice of doctors and medical treatment options.
Fourth, reform efforts must ensure that medical decisions are
made by patients and doctors, not government bureaucrats.
Finally, reforms must improve Americans' lives through
effective prevention, wellness, and disease management
programs, while developing new treatments and cures for life-
threatening diseases.
Measured against these principles, H.R. 3200, as reported
from the Committee on Education and Labor, wholly fails to meet
the mark. For these reasons, and as set forth more fully below,
Committee Republicans oppose the bill.
H.R. 3200, Procedural History
On the afternoon of Friday, June 19, 2009, House Democrats
circulated the ``TriCommittee Draft Proposal for Health Care
Reform,'' an 852-page health care plan crafted behind closed
doors by the Democrat Chairmen of three House committees with
jurisdiction over health care issues. The draft proposal was
not formally introduced or assigned a legislative bill number.
There were vast shortcomings and gaps in the draft proposal,
including the lack of a cost estimate and the absence of
several key provisions, including specific financing
mechanisms. House Republicans were denied the opportunity to
provide meaningful input on the ``draft proposal,'' and met for
the first time with Committee Democrats only two days before
the proposal was publicly circulated.
On Tuesday, June 23, 2009, the Committee on Education and
Labor held a hearing on the draft proposal. Although Committee
Republicans and invited witnesses provided valuable commentary,
the short time frame for review and the significant gaps in the
draft proposal hindered the ability to comprehensively analyze
the Democrat health care reform plan prior to the hearing on
June 23.
Thereafter, on July 14, 2009, House Democrat Leaders
formally introduced their health care reform bill, H.R. 3200,
the ``America's Affordable Health Choices Act of 2009.'' The
introduced bill totaled 1,017 pages (an increase of 165 pages)
and contained numerous technical and substantive changes. No
formal estimate of the cost of H.R. 3200 has been provided;
rather, prior to the Committee's consideration of the bill a
``preliminary,'' incomplete score of H.R. 3200 prepared by the
Congressional Budget Office (CBO) was provided. This
``preliminary'' analysis was not based on H.R. 3200, but rather
on ``technical specifications'' of the June 19 TriCommittee
draft proposal that were provided to CBO by House Democrats.
On the afternoon of July 15, 2009, the full Committee on
Education and Labor commenced its markup of H.R. 3200 with
Member opening statements. Late on that same afternoon,
Committee Republicans were provided with the Chairman's
Amendment in the Nature of a Substitute, which totaled 1,040
pages (adding another 23 pages) and contained further
substantive changes to H.R. 3200. Not one hearing was held on
the Democrat-generated health care reform provisions of H.R.
3200, or on the Chairman's Amendment in the Nature of a
Substitute. On the morning of July 17, 2009, after
consideration of 42 amendments, the Committee completed its
consideration of H.R. 3200, and the bill was ordered favorably
reported to the House of Representatives by a vote of 26-22.
Three Democrats joined with all Committee Republicans in
opposing the bill.
General Concerns Regarding H.R. 3200
Committee Republicans are concerned about the inexplicable
rush to legislate on this important issue. The changes
contemplated by H.R. 3200 will significantly impact more than
one-sixth of the American economy, yet House Democrats drafted
the partisan bill behind closed doors and without any
meaningful participation by Republicans and even many
Democrats. Committee Republicans have not been provided with an
adequate amount of time to fully analyze the complex provisions
of H.R. 3200. Further, we expect that the bill will change yet
again following consideration by the three House Committees of
jurisdiction, and prior to consideration by the full House, if
it should occur. However, our review to date reveals numerous
and significant policy concerns.
In general, Committee Republicans are concerned that H.R.
3200 fails to address the problems in the U.S. health care
system, and in fact will only serve to exacerbate these
problems through the adoption of misguided and historically
ineffective policies. Moreover, the bill's true cost is
unknown, but will likely be excessive. The cost will likely
exceed $1.3 trillion over ten years, and the latest CBO
estimate indicates that the bill will add more than $239
billion to the federal deficit over a ten-year period. More
troubling is the fact that under H.R. 3200, the federal
government starts collecting new taxes and revenues within a
year or two of enactment, but implementation of many of the
programs (i.e., the creation of a new federal bureaucracy and
insurance coverage subsidies) is delayed, which artificially
lowers the ``cost'' of the legislation under consideration by
CBO. Further, in the later years of the CBO ten-year estimate,
the costs of the program significantly outstrip new revenues,
meaning the true costs of the Democrat legislation are much
higher over the long term (i.e., beyond CBO's limited ten-year
period). This is a cost the country cannot afford to bear.
The specific problems of the bill are numerous. For
instance, Democrats attempt to pay for some of the cost through
significantly higher taxes on individuals and businesses, with
small business owners (those who create the majority of
American jobs) appearing to shoulder a disproportionate share
of the burden. It creates a massive new federal bureaucracy
with unprecedented powers to determine ``acceptable'' health
care coverage, and tax those who fail to comply with the bill's
numerous legal mandates. The bill essentially eliminates
current state-based private markets for health insurance. H.R.
3200 creates a ``public health insurance option'' (i.e.,
government-run health insurance plan) controlled by the new
federal bureaucracy that is based on the flawed Medicare
payment structure, and will undermine the private health
insurance coverage currently enjoyed by millions of Americans.
H.R. 3200 does little, if anything, to change the flawed health
care delivery and payment structure, which is critical to
control health care costs, increase affordability, and make
coverage more accessible to Americans. The goal of H.R. 3200
appears to be nothing less than centralization of the country's
health care sector in the federal government. It should be
rejected.
Concerns Relating to ERISA Group Health Plans
The 1,040-page bill is divided into three separate
Divisions: Division A, entitled ``Affordable Health Care
Choices''; Division B, ``Medicare and Medicaid Improvements'';
and Division C, ``Public Health and Workforce Development''.
The Committee on Education and Labor maintains jurisdiction
over much of Division A, and a portion of Division C.
Considering this Committee's jurisdiction over the Employee
Retirement Income and Security Act of 1974 (ERISA) and the
provision of employer-sponsored group health coverage, this
Committee's consideration of H.R. 3200 focused primarily on
Division A.
Division A of H.R. 3200 contains several controversial
Democrat proposals, including the establishment of a new
federal bureaucracy which would be charged with defining
``acceptable'' health benefits, creating and regulating a new
national health insurance exchange, distributing massive new
federal subsidies for low and middle-income individuals to
purchase ``acceptable'' health insurance through the exchange,
and regulating the provision of insurance nationally. Also,
Division A contains a provision creating a new government-run
health insurance plan option, which would be a federally-
created and administered government-run insurance plan based on
Medicare, allegedly designed to ``compete'' with private
insurance plans.
Democrats attempt to pay for this new bureaucracy through a
number of new tax provisions that affect all Americans. For
instance, H.R. 3200 institutes a new mandate on every
individual to obtain ``acceptable'' coverage or pay a 2.5
percent tax. It creates a ``pay or play'' mandate on virtually
all employers to provide ``acceptable'' insurance coverage or
pay a new 8 percent payroll tax to the federal government. The
introduced bill also provides some details left out of the June
19 Tri-Committee draft proposal, such as a provision exempting
only the very smallest businesses, and new tax increases that
are intended to pay for this massive new federal entitlement
program. Many of the new taxes set forth in H.R. 3200
disproportionately impact small businesses and small business
owners. Even so, Democrats' attempt to pay for the cost of this
legislation falls far short as the bill's costs increase
substantially over time and will likely result in at least a
$239 billion increase in the federal deficit.\1\ The
overwhelming cost of the Democrat bill, and its bevy of new
taxes, has raised significant concerns among many Americans.
Committee Republicans believe that the bill creates a massive
new federal bureaucracy and places significant new liabilities
and tax burdens on all Americans and virtually all American
employers, even those that are not profitable, which will
likely have a negative impact on future economic growth.
---------------------------------------------------------------------------
\1\See, letter from Douglas W. Elmendorf, Director, Congressional
Budget Office, to the Honorable George Miller, Chairman, Committee on
Education and Labor, dated July 17, 2009. The letter provides a
preliminary analysis by the CBO and the Joint Committee on Taxation of
H.R. 3200, as introduced on July 14, 2009, and does not reflect any
modifications or amendments made after that date.
---------------------------------------------------------------------------
Employer ``Pay or Play'' Mandate
Over 160 million people, or about 62 percent of the
population under age 65, obtain health care insurance from
their employers. Despite rising costs, this number has remained
relatively consistent over the past decade, and most employees
are happy with the coverage they receive from their employers.
One of the primary reasons for the success of the employer-
sponsored system is the ERISA-based regulatory structure that
generally allows multi-state employers to voluntarily offer
uniform health benefits to their employees, irrespective of
location, by freeing the employer-sponsored plan from
regulation by the states. Under the current ERISA structure,
many employers gain administrative efficiencies and voluntarily
design health plans tailored to the needs of their employees
and families. This has permitted the private sector to develop
innovative benefit designs and payment policies to control
health care costs and improve quality.
As reported, H.R. 3200 imposes an unprecedented new tax on
virtually all employers. Specifically, Title III, Subtitle B,
``Employer Responsibility,'' mandates that all employers offer
``acceptable'' coverage under a ``qualified health benefits
plan'' to each of their employees, or pay an 8 percent payroll
tax to the federal government.\2\ The ``acceptable'' coverage
will be designed and determined by the new Health Benefits
Advisory Committee and the Health Choices Commissioner. Section
312 provides that for full-time employees, employers have to
contribute at least 72.5 percent of the applicable premium of
the lowest cost plan for individuals, and 65 percent of the
applicable premium of the lowest cost plan for family coverage.
The mandate is also extended to part-time employees, but the
bill fails to specify who is a part-time employee and leaves it
to the federal government to define this term and create new
employer contribution rules for such employees. In a provision
only trial lawyers could like, the bill subjects ERISA group
health plans to state court lawsuits. Finally, under Section
321, employers will be subjected to fines of up to $500,000 in
the event they are found to be in noncompliance with the Act's
onerous new mandates.
---------------------------------------------------------------------------
\2\The only exception to the mandate considered by the Committee
was a sliding scale wage tax in Section 313, exempting only the very
smallest employers with annual payrolls of less than $250,000, and
limiting the payroll tax for companies with payroll of less than
$400,000 annually. Under Section 313, employers with a payroll of less
than $250,000 are not subject to any payroll tax. Companies with
payrolls of $250,000 to less than $300,000 are subject to a 2 percent
payroll tax; $300,000 to under $350,000 at 4 percent; and employers
with payroll of $350,000 to less than $400,000 are taxed at 6 percent.
Companies with payroll of more than $400,000 are taxed the full eight
percent.
---------------------------------------------------------------------------
The new taxes on employers pose multiple problems, and have
been the subject of much commentary from the representatives of
those employers who will be directly impacted by the Democrats'
new tax plan. For example, in a letter dated July 9, 2009 to
Chairman Miller and Ranking Member Kline, Steve Pfister, the
Senior Vice President of the National Retail Federation stated:
Employer mandates of any kind amount to a tax on
jobs. We can think of few more dangerous steps to take
in the middle of a recession. We need to add new jobs,
not exacerbate the near double-digit unemployment
numbers. We cannot afford to have new and existing jobs
priced out of our collective reach because of mandated
health coverage.
In a July 15, 2009 general letter, Susan Eckerly, Senior
Vice President of Public Policy for the National Federation of
Independent Business (NFIB), stated that the NFIB, the nation's
leading small business advocacy organization, opposed H.R. 3200
because of the inclusion of an employer mandate. Ms. Eckerly
stated, in part:
Research shows an employer mandate could cost 1.6
million jobs with more than 1 million of those jobs
lost in the small business sector. The approach fails
to increase affordability and, instead, devastates the
economy--with the greatest impact being levied on the
low-income community who will pay through depressed
wages and lost jobs. . . . As if the mandate alone
isn't destructive enough, the legislation uses perhaps
the most egregious penalty of all--a payroll tax--as
the penalty for those who cannot meet the obligations
laid out in the bill. A payroll tax is particularly
regressive because employers pay it regardless of
whether or not their business is profitable. . . . The
legislation even punishes employers who are currently
providing insurance to their employees, but don't meet
the premium contribution requirements in the bill
(72.5% for individuals and 65% for family plans).
In a letter dated July 15, 2009 to Chairman Miller and
Ranking Member Kline, R. Bruce Josten, Executive Vice
President, Government Affairs for the United States Chamber of
Commerce, expressed opposition to the employer mandate. Mr.
Josten stated:
the bill contains a job-killing employer mandate and
accompanying 8 percent payroll tax. Attempts to carve
out some small businesses will not prevent the adverse
economic consequences of this provision.
The Majority claims that H.R. 3200 will save money and
create new jobs. These assertions ignore the analysis of CBO
which indicates that the pending legislation adds at least $239
billion to the federal deficit over ten years, with that number
likely to grow substantially in the following decade. Further,
CBO has not found that H.R. 3200 controls or reduces underlying
systemic health care costs, which is essential to making care
and coverage more affordable. Finally, as reflected in the
comments above, the new taxes on all employers will slow
economic growth and stunt new job creation, particularly among
those employers who struggle to reach or maintain
profitability.
Finally, some Committee and House Democrats have expressed
serious reservations regarding the onerous requirements on
employers. For example, in a letter dated July 9, 2009 from the
fiscally conservative Blue Dog Coalition to Speaker Nancy
Pelosi and Majority Leader Steny Hoyer, forty ``Blue Dog''
Democrats stated that ``any additional requirements for
employers must be carefully considered and done so within the
context of what is currently offered. Small business owners and
their employees lack coverage because of high and unstable
costs--not because of an unwillingness to provide or purchase
it. We cannot support a bill that further exacerbates the
challenges faced by small businesses.''\3\
---------------------------------------------------------------------------
\3\See, letter from ``Democratic Blue Dog Coalition'' to The
Honorable Nancy Pelosi, Speaker, and The Honorable Steny Hoyer,
Majority Leader, dated July 9, 2009. The letter, signed by forty
Democrat Members of Congress, stated their belief that the tri-
committee health care reform proposal ``lacks a number of elements
essential to preserving what works and fixing what is broken'' in the
health care system, and that legislation must include provisions to
ensure deficit neutrality, delivery system reform, small business
protections, rural health equity, and bipartisanship.
---------------------------------------------------------------------------
Committee Republicans believe that the employer ``pay or
play'' mandate is simply flawed policy that will destroy the
voluntary, employer-sponsored ERISA health benefits structure,
limit future flexibility to design affordable health plans,
increase costs and cause significant job losses, and depress
wage growth, especially for low-income Americans. This mandate
would be especially hard on smaller or mid-sized firms that may
not be eligible for an exemption, and who may struggle to reach
and maintain profitability. Further, the proposed tax penalty
percentage (eight percent for most employers) could increase in
the future at the whim of Congress, especially if the federal
government needs additional revenues to cover shortfalls in
this massive new entitlement program, potentially increasing
the burdens on employers.
In addition, numerous structural components of the proposed
mandate are problematic for employers and the current ERISA
structure. In the fifth year of the exchange, employers whose
workers choose coverage through an exchange will be forced to
pay the eight percent tax to finance their workers' exchange
policy, even if they provide coverage to their employees. This
will certainly place increasing pressure on employer group
health plans in the form of adverse risk selection, since
employees could leave the group health plan for the exchange
and shrink the size of the group plan's pool of participants.
Many employers may simply choose to drop coverage and pay the
tax, rather than administer and pay for an increasingly
inefficient group health plan.
Further, under the Democrat bill, there is no way of
knowing whether the coverage currently enjoyed by tens of
millions of employees and their families, including health
savings accounts used in conjunction with high deductible
health plans (HSA/HDHP), will meet the future ``acceptable''
benefit and employer contribution requirements. For example, an
HSA/HDHP individual plan with an actuarial value of 69 percent
will not meet the requirements of this bill. Employers would
have to change this benefit to comply with the new mandates, or
the individual employee could face the individual tax for non-
compliance.\4\ Also, employers who contribute less than the
statutory amounts (72.5 percent and 65 percent for individual
and family coverage, respectively) will have to change or be
subjected to a new tax. This could cause some employers to drop
coverage altogether.
---------------------------------------------------------------------------
\4\See, H.R. 3200, Sections 301, 401, July 14, 2009, regarding the
new tax on individuals who fail to obtain acceptable insurance
coverage.
---------------------------------------------------------------------------
Clearly, the employer ``pay or play'' provisions are
designed to make it more difficult for employers to offer
ERISA-based group health plan coverage, and direct more
employees and their families to the new federal health
insurance exchange and its government plan, Medicare-based,
option. Contrary to Democrat political rhetoric, there is a
substantial likelihood that employees who like their current
coverage will not be able to keep it.
For these reasons, Committee Republicans object to the
employer ``pay or play'' mandate in H.R. 3200.
Impact on ERISA Preemption and Remedies
Under current law, the ERISA regulatory structure preempts
employers and group health plans from liability under state
law. This has resulted in significant administrative savings
and contributes to the ability of employers and group health
plans to offer high quality, affordable health insurance
coverage to more than 130 million Americans.
The Tri-Committee bill raises serious questions and
concerns regarding the continued viability of the current ERISA
regulatory structure, and whether H.R. 3200 exposes employers
and group health plans to new liabilities for claim decisions.
Under current law, group health plans are required to comply
with the requirements of ERISA, and any disputes are governed
and resolved under its provisions. This ensures that employers,
who may provide health insurance coverage for workers in all 50
states, must comply with the federal law only, which permits
the delivery of uniform benefits and saves administrative
costs. They cannot be sued in state courts, under different
laws.
The bill appears to change this by creating two different
penalty regimes inside the new insurance exchanges; for group
health plans and their beneficiaries, there would be varied and
unlimited penalties set forth under 50 different state laws. To
the extent that group health plans are permitted to purchase
through the insurance exchanges, they will be subjected to
potentially expansive new state court liabilities.
At the same time that they are subjecting private plans to
a patchwork of state laws, Democrats chose to apply a uniform
federal scheme similar to Medicare to the government-run health
insurance plan. This would provide an unfair financial
advantage to the government-run health plan since, unlike ERISA
group health plans, the government-run plan would not have to
face lawsuits and comply with up to 50 different sets of state
laws.
Two groups appear to benefit from this proposed structure:
trial lawyers and the government bureaucrats running the
government-run health plan. Further, ERISA group health plans
would face significant new liabilities and costs which would
likely cause them to drop coverage altogether, accelerating the
movement from private, employer-sponsored health insurance to a
government-run plan.
For these reasons, Committee Republicans object to new
liabilities imposed on ERISA employers and group health plans
in H.R. 3200.
The New Federal Bureaucracy and the Government-Run Health
Plan
Committee Republicans are concerned that H.R. 3200 creates
a massive new federal health insurance bureaucracy, the
``Health Choices Administration,'' that would create a ``one-
size-fits-all'' standard for health coverage and vest
unprecedented control with one individual, the new ``Health
Choices Commissioner.'' This new Commissioner would be charged
with governing the national exchange, enforcing insurance plan
standards, distributing taxpayer subsidies, and fining non-
compliant individuals, plans and employers. This structure
would restrict the sale of insurance outside of the exchange,
and ultimately would eviscerate private insurance markets over
time.
Under H.R. 3200, the Department of Health and Human
Services (HHS) will be charged with creating a public health
insurance option that would only be available in a national
health insurance exchange. Although the plan would have to
comply with requirements on private, exchange-available plans,
the exchange would have no power under the bill to reject,
sanction or terminate the government option run by HHS.
Further, the government plan would be subject to lawsuit only
in federal courts; this differs substantially from private
plans, including employer-sponsored group health plans
currently regulated under the federal ERISA law, which would be
subject to state court lawsuits (raising the costs for private
plans).
With respect to government-plan funding, ``start-up'' funds
in the amount of $2 billion in taxpayer money would be provided
from the Treasury. Although the plan's premium rates would be
required to cover the cost of the benefits and administration,
going forward there is no requirement that the government plan
maintain a certain ``reserve'' level, similar to those required
of state-based private insurance companies. This could give the
government plan a potentially significant competitive advantage
over private insurers.
Importantly, the government plan would be based on the
failed Medicare payment structure. Specifically, the plan would
pay Medicare rates for at least the first three years, with
Medicare-participating physicians getting a five percent bonus
for the first three years. The problems with this structure are
numerous. First, Medicare pays on a fee-for-service basis,
which rewards those providers that increase the volume of
medical services, as opposed to those providers that limit
utilization and provide high quality care. The Medicare
reimbursement structure is historically inflexible when it
comes to designing and implementing more innovative policies
and reimbursement structures. Private innovations, like paying
for health care provider performance, and the adoption of
prevention and wellness programs, are exceedingly difficult to
duplicate in the Medicare structure given that it is a
government-administered program which is highly resistant to
change.
Second, government health entitlement programs, like
Medicare and Medicaid, routinely underpay health care
providers, resulting in a cost-shift to private plans and
private payers. This was confirmed in the testimony of a New
Jersey hospital executive at a hearing before the Subcommittee
on Health, Education, Labor and Pensions in March 2009.
Reliance on existing Medicare payment rates, with minor
adjustments, will, according to an estimate by The Lewin Group,
an independent consulting company, significantly underpay
health care providers, compensating them at rates 20-30 percent
below what private plans pay for the same services. Even if
adjustments are made to lower the underpayment rates, by
design, the government-run plan will underpay providers to
reduce premium costs, in order to increase enrollment and
crowd-out private insurers. This inherent cost advantage built
into the government plan created by H.R. 3200 will result in a
government plan with artificially low premiums, which will
likely have a negative impact on health care quality.
These concerns were expressed in a letter from 13 health
care providers and associations, including the Mayo Clinic, in
a letter dated July 16, 2009 to Representative Ron Kind (D-WI).
Specifically, these groups expressed concern that:
. . . a public plan option with rates based on
Medicare rates will have a severe negative impact on
our facilities. Today, many providers suffer great
financial losses associated with treating Medicare
patients. For example, several of the systems that have
signed onto this letter lost hundreds of millions of
dollars under Medicare last year. These rates are
making it increasingly difficult for us to continue to
treat Medicare patients. The implementation of a public
plan with similar rates will create a financial result
that will be unsustainable for even the nation's most
efficient, high quality providers, eventually driving
them out of the market. In addition, should a public
plan with inadequate rates be enacted, we will be
forced to shift additional costs to private payers,
which will ultimately lead to increased costs for
employers who maintain insurance for their employees.
We believe all Americans must have guaranteed portable
health insurance, but it is critical that we not lose
sight of the need to ensure adequate and equitable
reimbursement.
The results of a government-run health insurance plan are
undeniable. Although Democrats argue the purpose of the
government plan is to increase competition, it will have the
exact opposite effect. Considering that the government plan
will possess certain advantages (discussed above) it will not,
by design, compete fairly with private insurance and group
health plans. Studies of the effect of a government plan option
indicate that there will be movement from private insurance
coverage to a government-run plan which would concentrate
control of health care with the government, which already
controls almost half of the country's health care spending. For
example, CBO analyses provided to the Committee on July 14 and
July 17 indicate movement of individuals from private coverage
to the government plan. In a June 2009 study, The Lewin Group
found that a government plan open to all, and based on
Medicare-level reimbursement rates, would result in almost 114
million Americans losing their current private insurance
coverage because of movement toward an artificially cheaper,
benefit-rich government plan.\5\ Simply put, the availability
of a government plan will create a cycle of increasing costs
for those with private plans, forcing employers to drop
coverage and pushing more workers into the government plan.
---------------------------------------------------------------------------
\5\See, The Impact of the House Health Reform Legislation on
Coverage and Provider Incomes, Testimony of John Sheils, Vice
President, The Lewin Group, before the Energy and Commerce Committee,
U.S. House of Representatives, June 25, 2009. http://www.lewin.com/
content/publications/June25TestimonyUpdateJul09.pdf.
---------------------------------------------------------------------------
The new federal health care bureaucracy, with its myriad
rules for private plans and government-run insurance option,
will ultimately decrease the competitiveness of private
insurance and group health plans, essentially resulting in a
government takeover of the health care system. The government's
track record on health care is not one to be duplicated; the
Medicaid program does not pay for the full cost of medical
care, is routinely underfunded, and places a substantial burden
on states. The Democrat answer in H.R. 3200 is to increase
Medicaid eligibility to 133 percent of the federal poverty
level, which would exacerbate health care provider
underpayments, create a new entitlement mentality, and
substantially increase the federal government's Medicaid
payments in perpetuity. Medicare underpays health care
providers, is an outdated and inflexible benefit design, and
has unfunded obligations totaling $37.8 trillion. The House
Democrat answer is not to first fix Medicare but to create a
new federal entitlement program for those under 65 based on
Medicare, spend more than $1.3 trillion, and raise taxes on
Americans. These policies do nothing to control existing health
care costs, and only serve to worsen the nation's long-term
fiscal outlook while removing decisions from the hands of
doctors and patients and placing them in the hands of
Washington bureaucrats.
Clearly, if Americans like their current coverage and the
quality of their health care, it will be in jeopardy under the
Democrats' plan as set forth in H.R. 3200.
Republican Alternative
Committee Republicans agree that the health care system is
in dire need of reform and stand ready to work with Committee
Democrats to forge a truly bipartisan compromise. However,
Committee Republicans believe the policies contained in H.R.
3200, which seek to expand health care insurance coverage at
great cost without first addressing and controlling underlying
health care costs and provider shortages, are doomed to fail.
Republicans agree with Democrats that the problem of the
uninsured must be addressed. The Majority notes that 47 million
individuals are uninsured; however, this population is not
homogenous. According to a report released by the Congressional
Research Service on September 14, 2009, approximately 20
percent of the uninsured are non-citizens. Further,
approximately 10 million more individuals may already be
eligible for existing government insurance programs, but are
not enrolled, and many millions more are young or voluntarily
choose to go without coverage. Rather than creating a massive
new federal entitlement program, Republicans believe underlying
costs must be addressed in order to make coverage more
affordable and accessible, with implementation of targeted
approaches to address the specific characteristics of the
uninsured population.
The first step to lower health care costs is to address
overspending in the current system.\6\ To lower costs,
Committee Republicans would consider: changes to the tax code
to permit individuals to share some of the same advantages as
those with employer-sponsored coverage; promote incentives to
save for future health care costs; promote meaningful medical
liability reforms to reduce costly and unnecessary defensive
medicine practices; provide existing government programs with
additional authority and resources to stop fraud and abuse; and
permit small business to band together to offer health
insurance at lower costs.
---------------------------------------------------------------------------
\6\In testimony before the Senate Health, Education, Labor and
Pensions Committee on July 16, 2009, 030 Director Douglas Elmendorf
stated that all of the Democrat proposals reviewed to date, including
H.R. 3200, do little, if anything, to control health care costs.
---------------------------------------------------------------------------
Republicans and Democrats agree that small businesses face
unique and difficult challenges in securing affordable health
insurance coverage. Yet the Democrat response to this challenge
is to construct an elaborate new federal bureaucracy and
entitlement program, with the imposition of massive new taxes,
administrative requirements and penalties on all but the very
smallest employers, Republicans have tirelessly advocated for
targeted, less costly measures to address the specific problems
confronting small businesses--small business, or association,
health plans constitutes one such measure that can be enacted
immediately and would permit small businesses to band together
to pool their purchasing power and enjoy the same benefits as
larger employers.
Additionally, Committee Republicans support policies that
would provide employers with greater flexibility to promote
prevention and wellness programs, and financially reward
employees who seek to achieve or maintain a healthy weight,
quit smoking, and better manage chronic diseases like diabetes.
Changing payment structures to reward high quality care, rather
than volume of medical services, and increasing care
coordination, can also help control health care costs. Further,
before creating another federal entitlement program and adding
to the federal deficit, Committee Republicans believe it is
necessary to address the long-term fiscal solvency of existing
federal entitlement programs.
Committee Republicans would also seek to expand access by
strengthening employer-sponsored coverage to millions of people
who are already eligible, encourage states to create or modify
programs to guarantee all Americans have access to affordable
coverage regardless of pre-existing medical conditions, promote
policies to increase portability of coverage regardless of
employment status, and help employers offer coverage by
reducing administrative costs through a small business tax
credit.
In short, Committee Republicans support policies that
promote individual behavior and responsibility for health care
and coverage decisions, and maintain the doctor-patient
relationship, while keeping the federal government out of the
business of dictating health care coverage requirements or
favoring a government-insurance model over private coverage.
Committee Republicans remain willing to work with Democrats in
developing a compromise bipartisan health care reform bill.
Republican Amendments
Committee Republicans offered twenty-six amendments during
the Committee's consideration of H.R. 3200 on July 16 and 17.
Republican amendments attempted to highlight significant
concerns with H.R. 3200 and improve some of the more troubling
provisions of the bill. In general, Committee Republicans
offered solutions to the health care crisis, and expressed
significant concerns regarding: the significant cost of H.R.
3200; the adverse impact on the economy, workers, families and
small businesses; the government takeover of the health care
system; the fact that under H.R. 3200 those who like their
coverage won't be able to keep it; preservation of the doctor-
patient relationship; and opposition to likely rationing of
medical care under the Democrat proposal.
Specifically, Committee Republicans offered amendments
intended to:
Strike provisions creating the new ``Health
Choices Administration;''
Strike provisions creating the national
health insurance exchange;
Strike the employer ``pay or play'' mandate;
Strike the government-run insurance plan;
Ensure that the coverage provided by ERISA
group health plans, now and in the future, would be
preserved under the plan;
Ensure deficit neutrality;
Suspend the bill where the national
unemployment rate exceeded 8% in two consecutive
months;
Preserve the protective remedies of ERISA
for ERISA-governed plans;
Prevent mandated coverage of abortion
services;
Prohibit federal funding for abortion
services under the bill;
Prohibit any tax increase on American
families with annual incomes under $250,000;
Provide employers and employees with greater
flexibility to promote prevention and wellness
programs, which are proven to increase personal
responsibility and lower health care costs;\7\
---------------------------------------------------------------------------
\7\Specifically, Republicans offered an amendment to permit
employers to vary employees' health insurance premiums by up to 50
percent to encourage participation in health promotion and disease
prevention programs. Current law already permits variations up to 20
percent. Employer-based prevention and wellness programs have a proven-
track record of improving employee health and lowering health care
expenses and insurance coverage premiums. See, Paul Speranza, Jr.,
Testimony before the Committee on Education and Labor, ``The Tri-
Committee Draft for Health Care Reform'' (June 23, 2009) at 3-4. This
amendment was voluntarily withdrawn in the hope that the Majority would
work with Republicans to adopt this common-sense provision; Republicans
continue to urge that this provision be included in any reform
legislation.
---------------------------------------------------------------------------
Permit consumer-directed health plans to
remain viable options;\8\ and
---------------------------------------------------------------------------
\8\During this Committee's consideration of H.R. 3200, Republicans
introduced an amendment to permanently grandfather consumer-directed
health plans and arrangements, so that millions of individuals could
continue to save for future health care needs and benefit from this
coverage. The Majority rejected this amendment, which highlights the
fact that if you like your current coverage, you will not be able to
keep it under H.R. 3200.
---------------------------------------------------------------------------
Permit small businesses to pool together to
purchase health insurance through Association Health
Plans.
Each of these amendments was rejected, by and large on a
party-line basis.
Although some amendments were adopted in an attempt to
improve the legislation,\9\ many attempts to amend and improve
a flawed bill were rejected. Committee Republicans are
concerned that the bill remains fundamentally flawed;
nevertheless, Committee Republicans continue to stand ready to
work with Committee Democrats to draft and enact bipartisan
health care reform legislation.
---------------------------------------------------------------------------
\9\A limited number of amendments were adopted. For example, the
Committee accepted language to exclude TRICARE (the Department of
Defense's civilian healthcare program for active and retired military
personnel) from the provisions of the bill; to express the sense of
Congress that Members who vote for the bill enroll in the new
government-run plan; to ensure non-discrimination for spiritual care;
and to maintain the private right to contract for medical services.
---------------------------------------------------------------------------
Conclusion
Committee Republicans support the voluntary, private health
care system and meaningful reforms to that structure, while
opposing measures that would serve to increase federal
government control over the health care system. Committee
Republicans are also committed to ensuring that the costs of
health care reform efforts do not add to the federal deficit or
result in higher taxes, which will have the effect of
restricting American economic growth. The goal of controlling
health care spending is not accomplished by adding more than
$1.3 trillion in new spending to America's health care bill.
While perhaps well-intentioned, H.R. 3200 is not an acceptable
health care reform bill. For all of the foregoing reasons, we
respectfully oppose enactment of H.R. 3200 as reported from the
Committee on Education and Labor.
John Kline.
Cathy McMorris Rodgers.
Thomas E. Petri.
Tom Price.
Howard P. ``Buck'' McKeon.
Rob Bishop (UT).
Peter Hoekstra.
Brett Guthrie.
Michael N. Castle.
Bill Cassidy.
Mark E. Souder.
Tom McClintock.
Vernon J. Ehlers.
Duncan D. Hunter.
Judy Biggert.
David P. Roe.
Todd Russell Platts.
Glenn Thompson.
Joe Wilson.
SUPPLEMENTAL VIEWS OF THE HONORABLE TOM PRICE
Over the course of nearly a quarter century as a physician,
I cared for thousands of patients. And caring for each and
every one of them was a privilege. So when I left the practice
of medicine to shape public policy and the health care delivery
system of this nation, I did so clinging to a steadfast
aspiration to achieve full access to affordable, quality health
care for all Americans, while preserving the patient-doctor
relationship without governmental interference.
Relying on my experiences as a physician, I can attest to
how current federal laws and incentives retard access to health
care and often put a bureaucrat in between a patient, his
family, and their doctor. The tax code institutes a third-party
health care model making it difficult for those to gain
coverage outside of an employer or government entity. And the
federal health care programs that do exist dictate to patients
which doctors they may see and how frequently, and which
procedures or tests doctors may or may not order or provide.
H.R. 3200, America's Affordable Health Choices Act of 2009,
marks the latest attempt to fundamentally alter our health care
financing and delivery structure. This measure, however, is a
transformational piece of legislation intended to erode
personal and private decision-making while further
institutionalizing the very errors of current federal health
care laws and programs. The end result will be a system built
on penalties, mandates, rationing, and bureaucracy--all of
which are fundamental threats to quality care. For example:
Sec. 102 of H.R. 3200 grandfathers out health
insurance coverage on the individual market. Issuers of
existing coverage may not enroll new individuals, alter
benefits and cost-sharing, and increase premiums. These plans
will no longer be available.
Sec. 123 of H.R. 3200 creates the Health Benefits
Advisory Committee, a new panel to recommend covered benefit
standards, including treatments, items and services, and cost-
sharing. The Committee is comprised primarily of either
political appointees or federal bureaucrats, and these are the
folks who will be making these critical decisions.
Sec. 141 of H.R. 3200 creates the Health Choices
Administration, a new federal agency charged with establishing
the Health Insurance Exchange. The Administration is the final
arbitrator of what is a qualified health benefits plan (i.e.
``acceptable'') under the exchange and is charged with
enforcement.
Sec. 301 and Sec. 401 of H.R. 3200 impose a
``personal responsibility'' on every American to obtain
``acceptable'' health insurance coverage or face a tax of 2.5
percent on gross income.
Sec. 313 and Sec. 412 of H.R. 3200 impose a tax of
eight percent of average wages paid on employers. Providing
health care to employees is no longer a voluntary benefit and
only the smallest businesses are exempt.
Sec. 221 of H.R. 3200 creates a public health
insurance option, available through the Health Insurance
Exchange, to ``compete'' against privately run health insurance
coverage. Independent analysis by both the Congressional Budget
Office and the Lewin Group has concluded that millions of
Americans would lose their existing coverage as a result of
this government-run plan.
Certainly, the status quo is unacceptable. Yet, a true
health care reform package empowers patients first; it builds
on what is working and fixes what is flawed without disrupting
or destroying quality care; it does not ingrain what is broken
and scraps what works.
Before consideration of H.R. 3200, a bipartisan,
fundamental rethinking of this nation's health care delivery
system could have been possible if reform focused on a patient-
centered approach and championed personal ownership and
coverage over government control. Further, any effort needed to
embrace the same health care principles most Americans embrace:
accessibility, affordability, choices, innovation, quality and
responsiveness.
As the leader of a group of conservative Republicans in the
House of Representatives faithfully committed to these
principles and the implementation of reform, I introduced H.R.
3400, the Empowering Patients First Act. It represents the
possibility of a new patient-centered era in American health
care without putting the government in charge.
For starters, the measure ensures all Americans have access
to affordable coverage through a series of tax credits,
deductions, and tax equity. It makes it feasible for
individuals to pick any health care plan, not just what is
offered by the government or at work, meaning that no matter
who is paying the bill, patients own and control their own
health plan. This puts Americans in a position whereby
insurance companies are responsive to them rather than a third-
party.
There is portability to maintain coverage if someone
changes jobs or moves across state lines. To establish a viable
marketplace, barriers are knocked down so coverage can be
purchased across state lines.
And since one cannot be serious about reform without
addressing the medical liability crisis, the Empowering
Patients First Act provides for the creation of specialized
health care courts relying on the expertise of medical
specialty societies to relieve upward pressure on medical
costs.
This same commitment to principles and reform by dedicated
Republicans inspired my personal efforts during the mark up of
the America's Affordable Health Choices Act of 2009 before the
Committee on Education and Labor. Yet every attempt to offer
common sense amendments was defeated by Committee Democrats on
near party line votes. For example:
An amendment to ensure current coverage
provided by employer-sponsored group plans would be
considered a qualified health benefits plan. Rejecting
the amendment flies in the face of ``If you like what
you have, you can keep it,'' and restricts access to
existing, affordable plans. (Amendment #11, defeated
18-29).
An amendment to permit states a waiver out
of Division A of the Act, which contains the new health
care bureaucracies, the individual and employer
mandates, and the public health insurance option.
Various states have already taken innovative steps to
adopt comprehensive health care reform. (Amendment #29,
defeated 19-28)
An amendment to enable employers to
contribute to a worker's account and permit that worker
to purchase insurance coverage of his choice.
(Amendment #40, defeated 19-29)
An amendment to eliminate the ``tiered''
payment structure for ``preferred'' and ``non-
preferred'' physicians who participate in the public
health insurance option. Without it, the existing
provision forces health care providers to accept
payments mandated by the federal government which are
well below the actual cost and would likely result in
the deterioration of quality care. (Amendment #41,
defeated 19-29)
In the end, the America's Affordable Health Choices Act of
2009 rejects the health care principles most Americans embrace
and embodies the go-it-alone attitude that House Democrats
embarked on from the beginning. House Republicans were never
consulted or brought into the process. In fact, more than 70
percent of amendments offered by Republicans for final
consideration in the mark up of the Committee on Education and
Labor were defeated on near party line votes.
It is why the end product is so terribly flawed and, if
adopted, Congress will end up revisiting soon thereafter to
correct many of its faults. It is with the sentiments outlined
here that I oppose this legislation, and ask all House
Republicans to do the same.
Tom Price.
DIVISION III
LETTER OF TRANSMITTAL
----------
House of Representatives,
Committee on Education and Labor,
Washington, DC, October 7, 2009.
Hon. John M. Spratt, Jr.,
Chairman, Committee on the Budget, Cannon House Office Building,
Washington, DC.
Dear Chairman Spratt, With this correspondence and its
attachment, I am transmitting the Investing in Education
portion of the recommendations of the Committee on Education
and Labor to your Committee pursuant to Section 202 of S. Con.
Res. 13, the Concurrent Resolution on the Budget for Fiscal
Year 2010.
Pursuant to Section 202 (b) of S. Con. Res. 13, on July 21,
2009, the Committee on Education and Labor voted 30-17 to,
inter alia, authorize the Chairman to transmit H.R. 3221,
Student Aid and Fiscal Responsibility Act of 2009, with an
amendment in the nature of a substitute, to the Committee on
Budget in compliance with Section 310 of the Congressional
Budget Act of 1974, as its recommendations related to the
Investing in Education portion of its instructions.
Accordingly, attached please find the Committee's report,
containing the reported bill and other materials, for your use
in preparing a reconciliation bill to be reported to the House
pursuant to S. Con. Res. 13.
If you have any questions, please contact my Committee
staff. Thank you for your attention.
Sincerely,
George Miller,
Chairman.2
111th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 111-232
======================================================================
STUDENT AID AND FISCAL RESPONSIBILITY ACT OF 2009
_______
July 27, 2009.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. George Miller of California, from the Committee on Education and
Labor, submitted the following
R E P O R T
together with
SUPPLEMENTAL AND MINORITY VIEWS
[To accompany H.R. 3221]
[Including cost estimate of the Congressional Budget Office]
The Committee on Education and Labor, to whom was referred
the bill (H.R. 3221) to amend the Higher Education Act of 1965,
and for other purposes, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Student Aid and Fiscal Responsibility
Act of 2009''.
SEC. 2. TABLE OF CONTENTS.
The table of contents is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
TITLE I--INVESTING IN STUDENTS AND FAMILIES
Subtitle A--Increasing College Access and Completion
Sec. 101. Federal Pell Grants.
Sec. 102. College Access and Completion Innovation Fund.
Sec. 103. Investment in historically Black colleges and universities
and other minority-serving institutions.
Sec. 104. Investment in cooperative education.
Sec. 105. Loan forgiveness for servicemembers activated for duty.
Sec. 106. Veterans Educational Equity Supplemental Grant Program.
Subtitle B--Student Financial Aid Form Simplification
Sec. 121. General effective date.
Sec. 122. Treatment of assets in need analysis.
Sec. 123. Changes to total income; aid eligibility.
TITLE II--STUDENT LOAN REFORM
Subtitle A--Stafford Loan Reform
Sec. 201. Federal Family Education Loan appropriations.
Sec. 202. Scope and duration of Federal loan insurance program.
Sec. 203. Applicable interest rates.
Sec. 204. Federal payments to reduce student interest costs.
Sec. 205. Federal PLUS Loans.
Sec. 206. Federal Consolidation Loan.
Sec. 207. Unsubsidized Stafford loans for middle-income borrowers.
Sec. 208. Loan repayment for civil legal assistance attorneys.
Sec. 209. Special allowances.
Sec. 210. Revised special allowance calculation.
Sec. 211. Origination of Direct Loans at institutions located outside
the United States.
Sec. 212. Agreements with institutions.
Sec. 213. Terms and conditions of loans.
Sec. 214. Contracts.
Sec. 215. Interest rates.
Subtitle B--Perkins Loan Reform
Sec. 221. Federal Direct Perkins Loans terms and conditions.
Sec. 222. Authorization of appropriations.
Sec. 223. Allocation of funds.
Sec. 224. Federal Direct Perkins Loan allocation.
Sec. 225. Agreements with institutions of higher education.
Sec. 226. Student loan information by eligible institutions.
Sec. 227. Terms of loans.
Sec. 228. Distribution of assets from student loan funds.
Sec. 229. Implementation of non-title IV revenue requirement.
Sec. 230. Administrative expenses.
TITLE III--MODERNIZATION, RENOVATION, AND REPAIR
Subtitle A--Elementary and Secondary Education
Sec. 301. Definitions.
Chapter 1--Grants for Modernization, Renovation, or Repair of Public
School Facilities
Sec. 311. Purpose.
Sec. 312. Allocation of funds.
Sec. 313. Allowable uses of funds.
Sec. 314. Priority projects.
Chapter 2--Supplemental Grants for Louisiana, Mississippi, and Alabama
Sec. 321. Purpose.
Sec. 322. Allocation to local educational agencies.
Sec. 323. Allowable uses of funds.
Chapter 3--General Provisions
Sec. 331. Impermissible uses of funds.
Sec. 332. Supplement, not supplant.
Sec. 333. Prohibition regarding State aid.
Sec. 334. Maintenance of effort.
Sec. 335. Special rule on contracting.
Sec. 336. Use of American iron, steel, and manufactured goods.
Sec. 337. Labor standards.
Sec. 338. Charter schools.
Sec. 339. Green schools.
Sec. 340. Reporting.
Sec. 341. Special rules.
Sec. 342. Promotion of employment experiences.
Sec. 343. Advisory Council on Green, High-Performing Public School
Facilities.
Sec. 344. Education regarding projects.
Sec. 345. Availability of funds.
Subtitle B--Higher Education
Sec. 351. Federal assistance for community college modernization and
construction.
TITLE IV--EARLY LEARNING CHALLENGE FUND
Sec. 401. Purpose.
Sec. 402. Programs authorized.
Sec. 403. Quality pathways grants.
Sec. 404. Development grants.
Sec. 405. Research and evaluation.
Sec. 406. Reporting requirements.
Sec. 407. Construction.
Sec. 408. Definitions.
Sec. 409. Availability of funds.
TITLE V--AMERICAN GRADUATION INITIATIVE
Sec. 501. Authorization and appropriation.
Sec. 502. Definitions; grant priority.
Sec. 503. Grants to eligible entities for community college reform.
Sec. 504. Grants to eligible States for community college programs.
Sec. 505. National activities.
SEC. 3. REFERENCES.
Except as otherwise expressly provided, whenever in this Act an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Higher Education Act of
1965 (20 U.S.C. 1001 et seq.).
TITLE I--INVESTING IN STUDENTS AND FAMILIES
Subtitle A--Increasing College Access and Completion
SEC. 101. FEDERAL PELL GRANTS.
(a) Amount of Grants.--Section 401(b) (20 U.S.C. 1070a(b)) is
amended--
(1) by amending paragraph (2)(A) to read as follows:
``(A) The amount of the Federal Pell Grant for a
student eligible under this part shall be--
``(i) the maximum Federal Pell Grant, as
specified in the last enacted appropriation Act
applicable to that award year, plus
``(ii) the amount of the increase calculated
under paragraph (8)(B) for that year, less
``(iii) an amount equal to the amount
determined to be the expected family
contribution with respect to that student for
that year.''; and
(2) by amending paragraph (8), as amended by the Higher
Education Opportunity Act (Public Law 110-315), to read as
follows:
``(8) Additional funds.--
``(A) In general.--There are authorized to be
appropriated, and there are appropriated, to carry out
subparagraph (B) of this paragraph (in addition to any
other amounts appropriated to carry out this section
and out of any money in the Treasury not otherwise
appropriated) the following amounts--
``(i) $2,030,000,000 for fiscal year 2008;
``(ii) $2,733,000,000 for fiscal year 2009;
and
``(iii) such sums as may be necessary for
fiscal year 2010 and each subsequent fiscal
year to provide the amount of increase of the
maximum Federal Pell Grant required by clauses
(ii) and (iii) of subparagraph (B).
``(B) Increase in federal pell grants.--The amounts
made available pursuant to subparagraph (A) shall be
used to increase the amount of the maximum Federal Pell
Grant for which a student shall be eligible during an
award year, as specified in the last enacted
appropriation Act applicable to that award year, by--
``(i) $490 for each of the award years 2008-
2009 and 2009-2010;
``(ii) $690 for the award year 2010-2011; and
``(iii) the amount determined under
subparagraph (C) for each succeeding award
year.
``(C) Inflation-adjusted amounts.--
``(i) Award year 2011-2012.--For award year
2011-2012, the amount determined under this
subparagraph for purposes of subparagraph
(B)(iii) shall be equal to--
``(I) $5,550 or the total maximum
Federal Pell Grant for the preceding
award year (as determined under clause
(iv)(II)), whichever is greater,
increased by a percentage equal to the
annual adjustment percentage for award
year 2011-2012; reduced by
``(II) $4,860 or the maximum Federal
Pell Grant for which a student was
eligible for the preceding award year,
as specified in the last enacted
appropriation Act applicable to that
year, whichever is greater; and
``(III) rounded to the nearest $5.
``(ii) Subsequent award years.--For award
year 2012-2013 and each of the subsequent award
years, the amount determined under this
subparagraph for purposes of subparagraph
(B)(iii) shall be equal to--
``(I) the total maximum Federal Pell
Grant for the preceding award year (as
determined under clause (iv)(II)),
increased by a percentage equal to the
annual adjustment percentage for the
award year for which the amount under
this subparagraph is being determined;
reduced by
``(II) $4,860 or the maximum Federal
Pell Grant for which a student was
eligible for the preceding award year,
as specified in the last enacted
appropriation Act applicable to that
year, whichever is greater; and
``(III) rounded to the nearest $5.
``(iii) Limitation on decreases.--
Notwithstanding clauses (i) and (ii), if the
amount determined under clause (i) or (ii) for
an award year is less than the amount
determined under this paragraph for the
preceding award year, the amount determined
under such clause for such award year shall be
the amount determined under this paragraph for
the preceding award year.
``(iv) Definitions.--For purposes of this
subparagraph--
``(I) the term `annual adjustment
percentage' as it applies to an award
year is equal to the sum of--
``(aa) the estimated
percentage change in the
Consumer Price Index (as
determined by the Secretary,
using the definition in section
478(f)) for the most recent
calendar year ending prior to
the beginning of that award
year; and
``(bb) one percentage point;
and
``(II) the term `total maximum
Federal Pell Grant' as it applies to a
preceding award year is equal to the
sum of--
``(aa) the maximum Federal
Pell Grant for which a student
is eligible during an award
year, as specified in the last
enacted appropriation Act
applicable to that preceding
award year; and
``(bb) the amount of the
increase in the maximum Federal
Pell Grant required by this
paragraph for that preceding
award year.
``(D) Program requirements and operations otherwise
unaffected.--Except as provided in subparagraphs (B)
and (C), nothing in this paragraph shall be construed
to alter the requirements and operations of the Federal
Pell Grant Program as authorized under this section, or
to authorize the imposition of additional requirements
or operations for the determination and allocation of
Federal Pell Grants under this section.
``(E) Availability of funds.--The amounts made
available by subparagraph (A) for any fiscal year shall
be available beginning on October 1 of that fiscal
year, and shall remain available through September 30
of the succeeding fiscal year.''.
(b) Conforming Amendments.--Title IV (20 U.S.C. 1070 et seq.) is
further amended--
(1) in section 401(b)(6), as amended by the Higher Education
Opportunity Act (Public Law 110-315), by striking ``the grant
level specified in the appropriate Appropriation Act for this
subpart for such year'' and inserting ``the Federal Pell Grant
amount, determined under paragraph (2)(A), for which a student
is eligible during such award year'';
(2) in section 402D(d)(1), by striking ``exceed the maximum
appropriated Pell Grant'' and inserting ``exceed the Federal
Pell Grant amount, determined under section 401(b)(2)(A), for
which a student is eligible'';
(3) in section 435(a)(5)(A)(i)(I), by striking ``one-half the
maximum Federal Pell Grant award for which a student would be
eligible'' and inserting ``one-half the Federal Pell Grant
amount, determined under section 401(b)(2)(A), for which a
student would be eligible'';
(4) in section 483(e)(3)(ii), by striking ``based on the
maximum Federal Pell Grant award at the time of application''
and inserting ``based on the Federal Pell Grant amount,
determined under section 401(b)(2)(A), for which a student is
eligible at the time of application'';
(5) in section 485E(b)(1)(A), by striking ``of such students'
potential eligibility for a maximum Federal Pell Grant under
subpart 1 of part A'' and inserting ``of such students'
potential eligibility for the Federal Pell Grant amount,
determined under section 401(b)(2)(A), for which the student
would be eligible''; and
(6) in section 894(f)(2)(C)(ii)(I), by striking ``the maximum
Federal Pell Grant for each award year'' and inserting ``the
Federal Pell Grant amount, determined under section
401(b)(2)(A), for which a student may be eligible for each
award year''.
(c) Effective Date.--The amendments made by subsections (a) and (b)
of this section shall take effect on July 1, 2010.
SEC. 102. COLLEGE ACCESS AND COMPLETION INNOVATION FUND.
(a) Header.--Part E of title VII (20 U.S.C. 1141 et seq.) is amended
by striking the header of such part and inserting the following:
``PART E--COLLEGE ACCESS AND COMPLETION INNOVATION FUND''.
(b) Purpose.--Part E of title VII (20 U.S.C. 1141 et seq.) is further
amended by inserting before section 781 the following:
``SEC. 780. PURPOSES.
``The purposes of this part are--
``(1) to promote innovation in postsecondary education
practices and policies by institutions of higher education,
States, and nonprofit organizations to improve student success,
completion, and post-completion employment, particularly for
students from groups that are underrepresented in postsecondary
education; and
``(2) to assist States in developing longitudinal data
systems, common metrics, and reporting systems to enhance the
quality and availability of information about student success,
completion, and post-completion employment.''.
(c) Authorization and Appropriation.--Section 781(a) (20 U.S.C.
1141(a)) is amended to read as follows:
``(a) Authorization and Appropriation.--
``(1) In general.--There are authorized to be appropriated,
and there are appropriated, to carry out this part (in addition
to any other amounts appropriated to carry out this part and
out of any money in the Treasury not otherwise appropriated),
$600,000,000 for each of the fiscal years 2010 through 2014.
``(2) Allocations.--Of the amount appropriated for any fiscal
year under paragraph (1)--
``(A) 25 percent shall be made available to carry out
section 781;
``(B) 50 percent shall be made available to carry out
section 782;
``(C) 23 percent shall be made available to carry out
section 783; and
``(D) 2 percent shall be made available to carry out
section 784.''.
(d) State Grants and Grants to Eligible Entities.--Part E of title
VII (20 U.S.C. 1141 et seq.) is further amended by adding at the end
the following:
``SEC. 782. STATE INNOVATION COMPLETION GRANTS.
``(a) Program Authorization.--From the amount appropriated under
section 781(a)(2)(B) to carry out this section, the Secretary shall
award grants to States on a competitive basis to promote student
persistence in, and completion of, postsecondary education.
``(b) Federal Share; Non-Federal Share.--
``(1) Federal share.--The amount of the Federal share under
this section for a fiscal year shall be equal to \2/3\ of the
costs of the activities and services described in subsection
(d)(1) that are carried out under the grant.
``(2) Non-federal share.--The amount of the non-Federal share
under this section shall be equal to \1/3\ of the costs of the
activities and services described in subsection (d)(1). The
non-Federal share may be in cash or in kind, and may be
provided from State resources, contributions from private
organizations, or both.
``(3) Supplement, not supplant.--The Federal and non-Federal
shares required by this paragraph shall be used to supplement,
and not supplant, State and private resources that would
otherwise be expended to carry out activities and services to
promote student persistence in and completion of postsecondary
education.
``(c) Application and Selection.--
``(1) Application requirements.--For each fiscal year for
which a State desires to receive a grant under this section,
the State agency with jurisdiction over higher education, or
another agency designated by the Governor or chief executive of
the State to administer the grant program under this section,
shall submit an application to the Secretary at such time, in
such manner, and containing such information as the Secretary
may require. Such application shall include--
``(A) a description of the State's capacity to
administer the grant under this section;
``(B) a description of the State's plans for using
the grant funds for activities described in subsection
(d)(1), including plans for how the State will make
special efforts to provide benefits to students in the
State who are from groups that are underrepresented in
postsecondary education;
``(C) a description of how the State will provide for
the non-Federal share from State resources, private
contributions, or both;
``(D) a description of--
``(i) the administrative system that the
State has in place to administer the activities
and services described in subsection (d)(1); or
``(ii) the plan to develop such
administrative system;
``(E) a description of the data system the State has
or will have in place to measure the performance and
progress toward the State's goals included in the
Access and Completion Plan submitted, or that will be
submitted, under paragraph (2)(A); and
``(F) the assurances under paragraph (2).
``(2) State assurances.--The assurances required in paragraph
(1)(F) shall include an assurance of each of the following:
``(A) That the State will submit, not later than July
1, 2011, an Access and Completion Plan to increase the
State's rate of persistence in and completion of
postsecondary education. Such plan shall include--
``(i) the State's annual and long-term
quantifiable goals with respect to--
``(I) the rates of postsecondary
enrollment, persistence, and
completion, disaggregated by income,
race, ethnicity, sex, disability, and
age of students;
``(II) closing gaps in enrollment,
persistence, and completion rates for
students from groups that are
underrepresented in postsecondary
education;
``(III) targeting education and
training programs to address labor
market needs in the State, as such
needs are determined by the State, or
the State in coordination with the
State public employment service, the
State workforce investment board, or
industry or sector partnerships in the
State; and
``(IV) improving coordination between
two-year and four-year institutions of
higher education in the State,
including supporting comprehensive
articulation agreements between such
institutions; and
``(ii) the State's plan to develop an
interoperable statewide longitudinal data
system that--
``(I) can be linked to other data
systems, as applicable, including
elementary and secondary education and
workforce data systems;
``(II) will collect, maintain,
disaggregate (by institution, income,
race, ethnicity, sex, disability, and
age of students), and analyze
postsecondary education and workforce
information, including--
``(aa) postsecondary
education enrollment,
persistence, and completion
information;
``(bb) post-completion
employment outcomes of students
who enrolled in postsecondary
programs and training programs
offered by eligible training
providers under the Workforce
Investment Act of 1998 (29
U.S.C. 2801 et seq.);
``(cc) postsecondary
education and employment
outcomes of students who move
out of the State; and
``(dd) postsecondary
instructional workforce
information; and
``(III) makes the information
described in subclause (I) available to
the general public in a manner that is
transparent and user-friendly.
``(B) That the State has a comprehensive planning or
policy formulation process with respect to increasing
postsecondary enrollment, persistence, and completion
that--
``(i) encourages coordination between the
State administration of grants under this
section and similar State programs;
``(ii) encourages State policies that are
designed to improve rates of enrollment and
persistence in, and completion of,
postsecondary education for all categories of
institutions of higher education described in
section 132(d) in the State;
``(iii) considers the postsecondary education
needs of students from groups that are
underrepresented in postsecondary education;
``(iv) considers the resources of public and
private institutions of higher education,
organizations, and agencies within the State
that are capable of providing access to
postsecondary education opportunities within
the State; and
``(v) provides for direct, equitable, and
active participation in the comprehensive
planning or policy formulation process or
processes, through membership on State planning
commissions, State advisory councils, or other
State entities established by the State and
consistent with State law, by representatives
of--
``(I) institutions of higher
education, including at least one
member from a junior or community
college (as defined in section 312(f));
``(II) students;
``(III) other providers of
postsecondary education services
(including organizations providing
access to such services);
``(IV) the general public in the
State; and
``(V) postsecondary education faculty
members, including at least one faculty
member whose primary responsibilities
are teaching and scholarship.
``(C) That the State will incorporate policies and
practices that, through the activities funded under
this section, are determined to be effective in
improving rates of postsecondary education enrollment,
persistence, and completion into the future
postsecondary education policies and practices of the
State to ensure that the benefits achieved through the
activities funded under this section continue beyond
the period of the grant.
``(D) That the State will participate in the
evaluation required under section 784.
``(3) Subgrants to nonprofit organizations.--A State
receiving a payment under this section may elect to make a
subgrant to one or more nonprofit organizations in the State,
including agencies with agreements with the Secretary under
subsections (b) and (c) of section 428 on the date of the
enactment of the Student Aid and Fiscal Responsibility Act of
2009, or a partnership of such organizations, to carry out
activities and services described in subsection (d)(1), if the
nonprofit organization or partnership--
``(A) was in existence on the day before the date of
the enactment of the Student Aid and Fiscal
Responsibility Act of 2009; and
``(B) as of such day, was participating in activities
and services related to promoting persistence in, and
completion of, postsecondary education, such as the
activities and services described in subsection (d)(1).
``(4) Priority.--In awarding grants under this section, the
Secretary shall give priority to States that enter into a
partnership with one of the following entities to carry out the
activities and services described in subsection (d)(1):
``(A) A philanthropic organization, as such term is
defined in section 781(i)(1).
``(B) An agency with an agreement with the Secretary
under subsections (b) and (c) of section 428 on the
date of the enactment of Student Aid and Fiscal
Responsibility Act of 2009.
``(d) Uses of Funds.--
``(1) Authorized uses.--A State receiving a grant under this
section shall use the grant funds to--
``(A) provide programs in such State that increase
persistence in, and completion of, postsecondary
education, which may include--
``(i) assisting institutions of higher
education in providing financial literacy,
education, and counseling to enrolled students;
``(ii) assisting students enrolled in an
institution of higher education to reduce the
amount of loan debt incurred by such students;
``(iii) providing grants to students
described in section 415A(a)(1), in accordance
with the terms of that section; and
``(iv) carrying out the activities described
in section 415E(a); and
``(B) support the development and implementation of a
statewide longitudinal data system, as described in
subsection (c)(2)(A)(ii).
``(2) Prohibited uses.--Funds made available under this
section shall not be used to promote any lender's loans.
``(3) Restrictions on use of funds.--A State--
``(A) shall use not less than \1/3\ of the sum of the
Federal and non-Federal share used for paragraph (1)(A)
on activities that benefit students enrolled in junior
or community colleges (as defined in section 312(f)),
two-year public institutions, or two-year programs of
instruction at four-year public institutions;
``(B) may use not more than 10 percent of the sum of
the Federal and non-Federal share under this section
for activities described in paragraph (1)(B); and
``(C) may use not more than 6 percent of the sum of
the Federal and non-Federal share under this section
for administrative purposes relating to the grant under
this section.
``(e) Annual Report.--Each State receiving a grant under this section
shall submit to the Secretary an annual report on--
``(1) the activities and services described in subsection
(d)(1) that are carried out with such grant;
``(2) the effectiveness of such activities and services in
increasing postsecondary persistence and completion, as
determined by measurable progress in achieving the State's
goals for persistence and completion described in the Access
and Completion Plan submitted by the State under subsection
(c)(2)(A), if such plan has been submitted; and
``(3) any other information or assessments the Secretary may
require.
``(f) Definitions.--In this section:
``(1) Industry or sector partnership.--The term `industry or
sector partnership' means a workforce collaborative that
organizes key stakeholders in a targeted industry cluster into
a working group that focuses on the human capital needs of a
targeted industry cluster and that includes, at the appropriate
stage of development of the partnership--
``(A) representatives of multiple firms or employers
(including workers) in a targeted industry cluster,
including small- and medium-sized employers when
practicable;
``(B) 1 or more representatives of State labor
organizations, central labor coalitions, or other labor
organizations;
``(C) 1 or more representatives of local workforce
investment boards;
``(D) 1 or more representatives of postsecondary
educational institutions or other training providers;
and
``(E) 1 or more representatives of State workforce
agencies or other entities providing employment
services.
``(2) State public employment service.--The term `State
public employment service' has the meaning given such term in
section 502(a)(9) of the Student Aid and Fiscal Responsibility
Act of 2009.
``(3) State workforce investment board; local workforce
investment board.--The terms `State workforce investment board'
and `local workforce investment board' have the meanings given
such terms in section 502(a)(10) of the Student Aid and Fiscal
Responsibility Act of 2009.
``SEC. 783. INNOVATION IN COLLEGE ACCESS AND COMPLETION NATIONAL
ACTIVITIES.
``(a) Programs Authorized.--From the amount appropriated under
section 781(a)(2)(C) to carry out this section, the Secretary shall
award grants, on a competitive basis, to eligible entities in
accordance with this section to conduct innovative programs that
advance knowledge about, and adoption of, policies and practices that
increase the number of individuals with postsecondary degrees or
certificates.
``(b) Eligible Entities.--The Secretary is authorized to award grants
under subsection (a) to--
``(1) institutions of higher education;
``(2) States;
``(3) nonprofit organizations with demonstrated experience in
the operation of programs to increase postsecondary completion;
``(4) philanthropic organizations (as such term is defined in
section 781(i)(1));
``(5) entities receiving a grant under chapter 1 of subpart 2
of part A of title IV; and
``(6) consortia of any of the entities described in
paragraphs (1) through (5).
``(c) Innovation Grants.--
``(1) Minimum award.--A grant awarded under subsection (a)
shall be not less than $1,000,000.
``(2) Grants uses.--The Secretary's authority to award grants
under subsection (a) includes--
``(A) the authority to award to an eligible entity a
grant in an amount equal to all or part of the amount
of funds received by such entity from philanthropic
organizations (as such term is defined in section
781(i)(1)) to conduct innovative programs that advance
knowledge about, and adoption of, policies and
practices that increase the number of individuals with
postsecondary degrees or certificates; and
``(B) the authority to award an eligible entity a
grant to develop 2-year programs that provide
supplemental grant or loan benefits to students that--
``(i) are designed to improve student
outcomes, including degree completion,
graduation without student loan debt, and post-
completion employment;
``(ii) are in addition to the student
financial aid available under title IV of this
Act; and
``(iii) do not result in the reduction of the
amount of that aid or any other student
financial aid for which a student is otherwise
eligible under Federal law.
``(3) Application.--To be eligible to receive a grant under
subsection (a), an eligible entity shall submit an application
at such time, in such manner, and containing such information
as the Secretary shall require.
``(4) Priorities.--In awarding grants under subsection (a),
the Secretary shall give priority to applications that--
``(A) are from an eligible entity with demonstrated
experience in serving students from groups that are
underrepresented in postsecondary education, including
institutions of higher education that are eligible for
assistance under title III or V, or are from a
consortium that includes an eligible entity with such
experience;
``(B) are from an eligible entity that is a public
institution of higher education that does not
predominantly provide an educational program for which
it awards a bachelor's degree (or an equivalent
degree), or from a consortium that includes at least
one such institution;
``(C) include activities to increase degree or
certificate completion in the fields of science,
technology, engineering, and mathematics, including
preparation for, or entry into, postbaccaluareate
study, especially for women and other groups of
students who are underrepresented in such fields;
``(D) are from an eligible entity that is a
philanthropic organization with the primary purpose of
providing scholarships and support services to students
from groups that are underrepresented in postsecondary
education, or are from a consortium that includes such
an organization; or
``(E) are from an eligible entity that encourages
partnerships between institutions of higher education
with high degree-completion rates and institutions of
higher education with low degree-completion rates from
the same category of institutions described in section
132(d) to facilitate the sharing of information
relating to, and the implementation of, best practices
for increasing postsecondary completion.
``(5) Technical assistance.--The Secretary may reserve up to
$5,000,000 per year to award grants and contracts to provide
technical assistance to eligible entities receiving a grant
under subsection (a), including technical assistance on the
evaluation conducted in accordance with section 784 and
establishing networks of eligible entities receiving grants
under such subsection.
``(d) Reports.--
``(1) Annual reports by entities.--Each eligible entity
receiving a grant under subsection (a) shall submit to the
Secretary an annual report on--
``(A) the effectiveness of the program carried out
with such grant in increasing postsecondary completion,
as determined by measurable progress in achieving the
goals of the program, as described in the application
for such grant; and
``(B) any other information or assessments the
Secretary may require.
``(2) Annual report to congress.--The Secretary shall submit
to the authorizing committees an annual report on grants
awarded under subsection (a), including--
``(A) the amount awarded to each eligible entity
receiving a grant under such subsection; and
``(B) a description of the activities conducted by
each such eligible entity.
``SEC. 784. EVALUATION.
``From the amount appropriated under section 781(a)(2)(D), the
Director of the Institute of Education Sciences shall evaluate the
programs funded under this part. Not later than January 30, 2016, the
Director shall issue a final report on such evaluation to the
authorizing committees and the Secretary, and shall make such report
available to the public.
``SEC. 785. VETERANS RESOURCE OFFICER GRANTS.
``(a) Program Authorized.--The Secretary shall award grants, on a
competitive basis, to eligible institutions of higher education to hire
a Veterans Resource Officer to increase the college completion rates
for veterans enrolled at such institutions.
``(b) Definitions.--In this section:
``(1) Eligible institution of higher education.--The term
`eligible institution of higher education' means an institution
of higher education that has an enrollment of at least 100
full-time equivalent students who are veterans.
``(2) Full-time equivalent students.--The term `full-time
equivalent students' has the meaning given such term in section
312(e).
``(3) Veteran.--The term `veteran' has the meaning give such
term in section 480(c).
``(c) Application.--To be eligible to receive a grant under this
section, an eligible institution of higher education shall submit an
application at such time, in such manner, and containing such
information as the Secretary shall require.
``(d) Uses of Funds.--
``(1) In general.--An eligible institution of higher
education receiving a grant under this section shall use such
grant to hire 1 or 2 Veterans Resource Officers (in the case of
an institution that has an enrollment of at least 200 full-time
equivalent students who are veterans) to serve in the office of
campus programs, or a similar office, at such institution and
carry out the activities described in paragraph (2).
``(2) Activities.--A Veterans Resource Officer shall carry
out activities at an eligible institution of higher education
to help increase the completion rates for veterans enrolled at
such institution, which shall include the following activities:
``(A) Serving as a link between student veterans and
the staff of the institution.
``(B) Serving as a link between student veterans and
local facilities of the Department of Veterans Affairs.
``(C) Organizing and advising student veterans
organization.
``(D) Organizing veterans oriented group functions
and events.
``(E) Maintaining newsletters and listserves to
distribute news and information to all student
veterans.
``(F) Organizing new student veterans campus
orientation.
``(G) Ensuring that the Department of Veterans
Affairs certifying official at such institution is
properly trained.
``(3) Priority.--To the extent practicable, each institution
described in paragraph (1) shall give priority to hiring a
veteran to serve as a Veterans Resource Officer.
``(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as may be necessary
for fiscal year 2010 and each succeeding fiscal year.''.
SEC. 103. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES
AND OTHER MINORITY-SERVING INSTITUTIONS.
Section 371 (20 U.S.C. 1067q) is amended--
(1) in subsection (a)--
(A) in paragraph (2), by striking ``section 502'' and
inserting ``section 502(a)'';;
(B) in paragraph (3), by striking ``section 316'' and
inserting ``section 316(b)'';
(C) in paragraph (5), by striking ``in subsection
(c)'' and inserting ``in section 318(b)'';
(D) in paragraph (6), by striking ``in subsection
(c)'' and inserting ``in section 320(b)''; and
(E) in paragraph (7), by striking ``in subsection
(c)'' and inserting ``in section 319(b)'';
(2) in subsection (b)--
(A) in paragraph (1)(A), by striking ``$255,000,000''
and all that follows and inserting ``$255,000,000 for
each of the fiscal years 2008 through 2019.''; and
(B) by amending paragraph (2)(B) to read as follows:
``(B) Stem and articulation programs.--From the
amount made available for allocation under this
subparagraph by subparagraph (A)(i) for any fiscal
year--
``(i) 90 percent shall be available for
Hispanic-serving institutions for activities
described in sections 503 and 513, with a
priority given to applications that propose--
``(I) to increase the number of
Hispanic and other low-income students
attaining degrees in the fields of
science, technology, engineering, or
mathematics; and
``(II) to develop model transfer and
articulation agreements between 2-year
Hispanic-serving institutions and 4-
year institutions in such fields; and
``(ii) 10 percent shall be available for
grants under section 355.'';
(C) in paragraph (2)(C)(ii), by striking ``and shall
be available for a competitive'' and all that follows
and inserting ``and shall be made available as grants
under section 318 and allotted among such institutions
under section 318(e), treating such amount, plus the
amount appropriated for such fiscal year in a regular
or supplemental appropriation Act to carry out section
318, as the amount appropriated to carry out section
318 for purposes of allotments under section 318(e)'';
and
(D) in paragraph (2)(D)--
(i) in clause (iii), by striking ``for
activities described in section 311(c)'' and
inserting ``and shall be made available as
grants under section 320, treating such
$5,000,000 as part of the amount appropriated
for such fiscal year in a regular or
supplemental appropriation Act to carry out
such section and using such $5,000,000 for
purposes described in subsection (c) of such
section''; and
(ii) in clause (iv), by striking ``described
in subsection (a)(7)--'' and all that follows
and inserting ``and shall be made available as
grants under section 319, treating such
$5,000,000 as part of the amount appropriated
for such fiscal year in a regular or
supplemental appropriation Act to carry out
such section and using such $5,000,000 for
purposes described in subsection (c) of such
section''; and
(3) by striking subsection (c).
SEC. 104. INVESTMENT IN COOPERATIVE EDUCATION.
There are authorized to be appropriated, and there are appropriated,
to carry out part N of title VIII of the Higher Education Act of 1965
(20 U.S.C. 1161n) (in addition to any other amounts appropriated to
carry out such part and out of any money in the Treasury not otherwise
appropriated), $10,000,000 for fiscal year 2010.
SEC. 105. LOAN FORGIVENESS FOR SERVICEMEMBERS ACTIVATED FOR DUTY.
(a) In General.--Section 484B(b)(2) (20 U.S.C. 1091b(b)(2)) is
amended by adding at the end the following:
``(F) Tuition relief for students called to military
service.--
``(i) Waiver of repayment by students called
to military service.--In addition to the
waivers authorized by subparagraphs (D) and
(E), the Secretary shall waive the amounts that
students are required to return under this
section if the withdrawals on which the returns
are based are withdrawals necessitated by
reason of service in the uniformed services.
``(ii) Loan forgiveness authorized.--Whenever
a student's withdrawal from an institution of
higher education is necessitated by reason of
service in the uniformed services, the
Secretary shall, with respect to the payment
period or period of enrollment for which such
student did not receive academic credit as a
result of such withdrawal, carry out a
program--
``(I) through the holder of the loan,
to assume the obligation to repay--
``(aa) the outstanding
principle and accrued interest
on any loan assistance awarded
to the student under part B
(including to a parent on
behalf of the student under
section 428B) for such payment
period or period of enrollment;
minus
``(bb) any amount of such
loan assistance returned by the
institution in accordance with
paragraph (1) of this
subsection for such payment
period or period of enrollment;
and
``(II) to cancel--
``(aa) the outstanding
principle and accrued interest
on the loan assistance awarded
to the student under part D or
E (including a Federal Direct
PLUS loan awarded to a parent
on behalf of the student) for
such payment period or period
of enrollment; minus
``(bb) any amount of such
loan assistance returned by the
institution in accordance with
paragraph (1) of this
subsection for such payment
period or period of enrollment.
``(iii) Reimbursement for cancellation of
perkins loans.--The Secretary shall pay to each
institution for each fiscal year an amount
equal to the aggregate of the amounts of
Federal Perkins loans in such institutions's
student loan fund which are cancelled pursuant
to clause (iii)(II) for such fiscal year, minus
an amount equal to the aggregate of the amounts
of any such loans so canceled which were made
from Federal capital contributions to its
student loan fund provided by the Secretary
under section 468. None of the funds
appropriated pursuant to section 461(b) shall
be available for payments pursuant to this
paragraph. To the extent feasible, the
Secretary shall pay the amounts for which any
institution qualifies under this paragraph not
later than 3 months after the institution files
an institutional application for campus-based
funds.
``(iv) Loan eligibility and limits for
students.--Any amounts that are returned by an
institution in accordance with paragraph (1),
or forgiven or waived by the Secretary under
this subparagraph, with respect to a payment
period or period of enrollment for which a
student did not receive academic credit as a
result of withdrawal necessitated by reason of
service in the uniformed services, shall not be
included in the calculation of the student's
annual or aggregate loan limits for assistance
under this title, or otherwise affect the
student's eligibility for grants or loans under
this title.
``(v) Definition.--In this subparagraph, the
term `service in the uniformed services' has
the meaning given such term in section
484C(a).''.
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
take effect for periods of service in the uniformed services
beginning after the date of the enactment of this Act.
(2) Definition.--In this paragraph, the term ``period of
service in the uniformed services'' means the period beginning
30 days prior to the date a student is required to report to
service in the uniformed services (as defined in section
484C(a) of the Higher Education Act of 1965 (20 U.S.C.
1091c(a)) and ending when such student returns from such
service.
SEC. 106. VETERANS EDUCATIONAL EQUITY SUPPLEMENTAL GRANT PROGRAM.
(a) Veterans Educational Equity Supplemental Grant Program.--Subpart
1 of part A of title IV (20 U.S.C. 1070a et seq.) is amended by adding
at the end the following:
``SEC. 401B. VETERANS EDUCATIONAL EQUITY SUPPLEMENTAL GRANT PROGRAM.
``(a) Veterans Educational Equity Supplemental Grants Authorized.--
The Secretary shall award a grant to each eligible student, in an
amount determined in accordance with subsection (c), to assist such
student with paying the cost of tuition incurred by the student for a
program of education at an institution of higher education.
``(b) Definitions.--In this section--
``(1) Eligible student.--The term `eligible student' means a
student who--
``(A) is a covered individual, as such term is
defined in section 3311(b) of title 38, United States
Code;
``(B) is enrolled at an institution of higher
education that--
``(i) is not a public institution of higher
education; and
``(ii) is located in a State with a zero, or
very low, maximum tuition charge per credit
hour compared to the maximum tuition charge per
credit hour in all other States, as determined
by the Secretary of Veterans Affairs (based on
the determinations of maximum tuition charged
per credit hour in each State for the purposes
of chapter 33 of title 38, United States Code);
and
``(C) is eligible for educational assistance for an
academic year, and will receive an amount of such
assistance for such year for fees charged the
individual that is less than the maximum amount of such
assistance available for fees charged for such year in
such State.
``(2) Educational assistance.--The term `educational
assistance' means the amount of educational assistance from the
Secretary of Veterans Affairs an eligible student receives or
will receive under section 3313(c)(1)(A) of title 38, United
States Code, or a similar amount of such assistance under
paragraphs (2) through (7) of such section 3313(c).
``(c) Grant Amount.--A grant to an eligible student under this
section be equal to an amount that is--
``(1) the maximum amount of educational assistance for fees
charged that the eligible student would receive, in accordance
with section 3313(c) of title 38, United States Code, if such
student attended the public institution of higher education in
the State in which the eligible student is enrolled that has
the highest fees charged to an individual for a year in such
State (as determined by the Secretary of Veterans Affairs for
the purposes of chapter 33 of such title 38), less
``(2) the educational assistance the eligible student will
receive, in accordance with such section, for fees charged to
the student for such year at the institution of higher
education at which the student is enrolled.
``(d) Uses of Funds.--An eligible student who receives a grant under
this section shall use such grant to pay tuition incurred by the
student for a program of education at an institution of higher
education.
``(e) Notification.--The Secretary, in coordination with Secretary of
Veterans Affairs, shall establish a system of notification to ensure
the timely delivery to each eligible student of--
``(1) educational assistance received by the student; and
``(2) grants awarded to the student under this section.
``(f) Authorization and Appropriation.--There are authorized to be
appropriated, and there are appropriated, such sums as may be necessary
to carry out this section (in addition to any other amounts
appropriated to carry out this section and out of any money in the
Treasury not otherwise appropriated).''.
(b) Conforming Amendment.--The header for subpart 1 of part A of
title IV (20 U.S.C. 1070a et seq.) is amended by inserting ``; Veterans
Educational Equity Supplemental Grants'' after ``Pell Grants''.
Subtitle B--Student Financial Aid Form Simplification
SEC. 121. GENERAL EFFECTIVE DATE.
Except as otherwise provided in this subtitle, amendments made by
this subtitle shall be effective with respect to determinations of need
for assistance under title IV of the Higher Education Act of 1965 (20
U.S.C. 1070 et seq.) for award years beginning on or after July 1,
2011.
SEC. 122. TREATMENT OF ASSETS IN NEED ANALYSIS.
(a) Amount of Need.--Section 471 (20 U.S.C. 1087kk) is amended--
(1) by striking ``Except'' and inserting the following:
``(a) In General.--Except'';
(2) by inserting ``and subject to subsection (b)'' after
``therein''; and
(3) by adding at the end the following:
``(b) Asset Cap for Need-based Aid.--Notwithstanding any other
provision of this title, a student shall not be eligible to receive a
Federal Pell Grant, a Federal Direct Stafford Loan, or work assistance
under this title if--
``(1) in the case of a dependent student, the combined net
assets of the student and the student's parents are equal to an
amount greater than $150,000 (or a successor amount prescribed
by the Secretary under section 478(c)); or
``(2) in the case of an independent student, the net assets
of the student (and the student's spouse, if applicable) are
equal to an amount greater than $150,000 (or a successor amount
prescribed by the Secretary under section 478(c)).''.
(b) Data Elements.--Section 474(b) (20 U.S.C. 1087nn(b)) is amended--
(1) by striking paragraph (4); and
(2) by redesignating paragraphs (5), (6), and (7) as
paragraphs (4), (5), and (6), respectively.
(c) Dependent Students.--Section 475 (20 U.S.C. 1087oo) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``adjusted''; and
(ii) by inserting ``and'' after the
semicolon;
(B) in paragraph (2), by striking ``; and'' and
inserting a period; and
(C) by striking paragraph (3);
(2) in subsection (b)--
(A) in the header, by striking ``Adjusted'';
(B) in the matter preceding paragraph (1), by
striking ``adjusted'';
(C) by striking paragraph (1);
(D) by redesignating paragraphs (2) and (3) as
paragraphs (1) and (2), respectively;
(E) in paragraph (1) (as redesignated by subparagraph
(D) of this paragraph), by striking ``adjusted''; and
(F) in paragraph (2) (as redesignated by subparagraph
(D) of this paragraph), by striking ``paragraph (2)''
and inserting ``paragraph (1)'';
(3) by repealing subsection (d);
(4) in subsection (e)--
(A) by striking ``The adjusted available'' and
inserting ``The available'';
(B) by striking ``to as `AAI')'' and inserting ``to
as `AI')'';
(C) by striking ``From Adjusted Available Income
(AAI)'' and inserting ``From Available Income (AI)'';
and
(D) in the table--
(i) by striking ``If AAI'' and inserting ``If
AI''; and
(ii) by striking ``of AAI'' each place it
appears and inserting ``of AI'';
(5) in subsection (f)--
(A) by striking ``and assets'' each place it appears;
(B) in paragraph (2)(B), by striking ``or assets'';
and
(C) in paragraph (3)--
(i) by striking ``are taken into'' and
inserting ``is taken into''; and
(ii) by striking ``adjusted'';
(6) in subsection (g)(6), by striking ``exceeds the sum of''
and all that follows and inserting ``exceeds the parents' total
income (as defined in section 480)'';
(7) by repealing subsection (h); and
(8) in subsection (i), by striking ``adjusted'' each place it
appears.
(d) Family Contribution for Independent Students Without Dependents
Other Than a Spouse.--Section 476 (20 U.S.C. 1087pp) is amended--
(1) in subsection (a)--
(A) by striking paragraph (1);
(B) by redesignating paragraphs (2) and (3) as
paragraphs (1) and (2), respectively;
(C) in paragraph (1) (as redesignated by subparagraph
(B)), by striking ``the sum resulting under paragraph
(1)'' and inserting ``the family's contribution from
available income (determined in accordance with
subsection (b))''; and
(D) in paragraph (2)(A) (as redesignated by
subparagraph (B)), by striking ``paragraph (2)'' and
inserting ``paragraph (1)'';
(2) by repealing subsection (c); and
(3) in subsection (d)--
(A) by striking ``and assets''; and
(B) by striking ``or assets''.
(e) Family Contribution for Independent Students With Dependents
Other Than a Spouse.--Section 477 (20 U.S.C. 1087qq) is amended--
(1) in subsection (a)--
(A) by striking paragraph (1);
(B) by redesignating paragraphs (2), (3), and (4) as
paragraphs (1), (2), and (3), respectively;
(C) in paragraph (1) (as redesignated by subparagraph
(B)), by striking ``such adjusted available income''
and inserting ``the family's available income
(determined in accordance with subsection (b))'';
(D) in paragraph (2) (as redesignated by subparagraph
(B)), by striking ``paragraph (2)'' and inserting
``paragraph (1)''; and
(E) in paragraph (3)(A) (as redesignated by
subparagraph (B)), by striking ``paragraph (3)'' and
inserting ``paragraph (2)'';
(2) by repealing subsection (c); and
(3) in subsection (d)--
(A) by striking ``The adjusted available'' and
inserting ``The available'';
(B) by striking ``to as `AAI')'' and inserting ``to
as `AI')'';
(C) by striking ``From Adjusted Available Income
(AAI)'' and inserting ``From Available Income (AI)'';
and
(D) in the table--
(i) by striking ``If AAI'' and inserting ``If
AI''; and
(ii) by striking ``of AAI'' each place it
appears and inserting ``of AI''; and
(E) in subsection (e)--
(i) by striking ``and assets''; and
(ii) by striking ``or assets''.
(f) Regulations; Updated Tables.--Section 478 (20 U.S.C. 1087rr) is
amended--
(1) in subsection (a), by inserting ``or amounts, as the case
may be,'' after ``tables'' each place the term appears;
(2) by amending subsection (c) to read as follows:
``(c) Asset Cap for Need-based Aid.--For each award year after award
year 2011-2012, the Secretary shall publish in the Federal Register a
revised net asset cap for the purposes of section 471(b). Such revised
cap shall be determined by increasing the dollar amount in such section
by a percentage equal to the estimated percentage change in the
Consumer Price Index (as determined by the Secretary) between December
2010 and the December preceding the beginning of such award year, and
rounding the result to the nearest $5.'';
(3) by repealing subsection (d); and
(4) in subsection (e), by striking ``adjusted'' both places
it appears.
SEC. 123. CHANGES TO TOTAL INCOME; AID ELIGIBILITY.
(a) Definition of Untaxed Income and Benefits.--Section 480(b)(1) (20
U.S.C. 1087vv(b)(1)), as amended by the Higher Education Opportunity
Act (Public Law 110-315), is amended--
(1) by striking subparagraphs (A), (B), (C), (E), (F), and
(I);
(2) by redesignating subparagraphs (D), (G), and (H) as
subparagraphs (A), (B), and (C), respectively;
(3) in subparagraph (B) (as redesignated by paragraph (2)),
by inserting ``and'' after the semicolon; and
(4) in subparagraph (C) (as redesignated by paragraph (2)),
by striking ``; and'' and inserting a period.
(b) Definition of Assets.--Section 480(f)(2) (20 U.S.C. 1087vv(f)(2))
is amended--
(1) by striking ``or'' at the end of subparagraph (B);
(2) by striking the period at the end of subparagraph (C) and
inserting ``; or''; and
(3) by adding at the end the following:
``(D) an employee pension benefit plan (as defined in
section 3(2) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002(2))).''.
(c) Financial Administrator Discretion.--Section 479A(b) (20 U.S.C.
1087tt) is amended in the subsection heading, by striking ``to
Assets''.
(d) Suspension of Eligibility for Drug-related Offenses.--Section
484(r)(1) (20 U.S.C. 1091(r)(1)) is amended to read as follows:
``(1) In general.--A student who is convicted of any offense
under any Federal or State law involving the 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 subparagraphs:
``(A) For a first offense, the period of
ineligibility shall be 2 years.
``(B) For a second offense, the period of
ineligibility shall be indefinite.''.
TITLE II--STUDENT LOAN REFORM
Subtitle A--Stafford Loan Reform
SEC. 201. FEDERAL FAMILY EDUCATION LOAN APPROPRIATIONS.
Section 421 (20 U.S.C. 1071) is amended--
(1) in subsection (b), in the matter following paragraph (6),
by inserting ``, except that no sums may be expended after June
30, 2010, with respect to loans under this part for which the
first disbursement would be made after such date'' after
``expended''; and
(2) by adding at the end the following new subsection:
``(d) Termination of Authority To Make or Insure New Loans.--
Notwithstanding paragraphs (1) through (6) of subsection (b) or any
other provision of law--
``(1) no new loans (including consolidation loans) may be
made or insured under this part after June 30, 2010; and
``(2) no funds are authorized to be appropriated, or may be
expended, under this Act or any other Act to make or insure
loans under this part (including consolidation loans) for which
the first disbursement would be made after June 30, 2010,
except as expressly authorized by an Act of Congress enacted after the
date of enactment of Student Aid and Fiscal Responsibility Act of
2009.''.
SEC. 202. SCOPE AND DURATION OF FEDERAL LOAN INSURANCE PROGRAM.
Section 424(a) (20 U.S.C. 1074(a)) is amended by striking ``September
30, 1976,'' and all that follows and inserting ``September 30, 1976,
for each of the succeeding fiscal years ending prior to October 1,
2009, and for the period from October 1, 2009, to June 30, 2010, for
loans first disbursed on or before June 30, 2010.''.
SEC. 203. APPLICABLE INTEREST RATES.
Section 427A(l) (20 U.S.C. 1077a(l)) is amended--
(1) in paragraph (1), by inserting ``and before July 1,
2010,'' after ``July 1, 2006,'';
(2) in paragraph (2), by inserting ``and before July 1,
2010,'' after ``July 1, 2006,'';
(3) in paragraph (3), by inserting ``and that was disbursed
before July 1, 2010,'' after ``July 1, 2006,''; and
(4) in paragraph (4)--
(A) in the matter preceding subparagraph (A), by
striking ``July 1, 2012'' and inserting ``July 1,
2010''; and
(B) by repealing subparagraphs (D) and (E).
SEC. 204. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.
(a) Higher Education Act of 1965.--Section 428 (20 U.S.C. 1078) is
amended--
(1) in subsection (a)--
(A) in paragraph (1), in the matter preceding
subparagraph (A), by inserting ``for which the first
disbursement is made before July 1, 2010, and'' after
``eligible institution''; and
(B) in paragraph (5), by striking ``September 30,
2014,'' and all that follows through the period and
inserting ``June 30, 2010.'';
(2) in subsection (b)(1)--
(A) in subparagraph (G)(ii), by inserting ``and
before July 1, 2010,'' after ``July 1, 2006,''; and
(B) in subparagraph (H)(ii), by inserting ``and that
are first disbursed before July 1, 2010,'' after ``July
1, 2006,'';
(3) in subsection (f)(1)(A)(ii)--
(A) by striking ``during fiscal years beginning'';
and
(B) by inserting ``and first disbursed before July 1,
2010,'' after ``October 1, 2003,''; and
(4) in subsection (j)(1), by inserting ``, before July 1,
2010,'' after ``section 435(d)(1)(D) of this Act shall''.
(b) College Cost Reduction and Access Act.--Section 303 of the
College Cost Reduction and Access Act (Public Law 110-84) is repealed.
SEC. 205. FEDERAL PLUS LOANS.
Section 428B(a)(1) (20 U.S.C. 1078-2(a)(1)) is amended by striking
``A graduate'' and inserting ``Prior to July 1, 2010, a graduate''.
SEC. 206. FEDERAL CONSOLIDATION LOAN.
(a) Amendments.--Section 428C (20 U.S.C. 1078-3) is amended--
(1) in subsection (a)--
(A) by amending paragraph (3)(B)(i)(V) to read as
follows:
``(V) an individual who has a consolidation
loan under this section and does not have a
consolidation loan under section 455(g) may
obtain a subsequent consolidation loan under
section 455(g).''; and
(B) in paragraph (4)(A), by inserting ``, and first
disbursed before July 1, 2010'' after ``under this
part'';
(2) in subsection (b)--
(A) in paragraph (1)(E), by inserting before the
semicolon ``, and before July 1, 2010'' and
(B) in paragraph (5), by striking ``In the event
that'' and inserting ``If, before July 1, 2010,'';
(3) in subsection (c)(1)--
(A) in subparagraph (A)(ii), by inserting ``and that
is disbursed before July 1, 2010,'' after ``2006,'';
and
(B) in subparagraph (C), by inserting ``and first
disbursed before July 1, 2010,'' after ``1994,''; and
(4) in subsection (e), by striking ``September 30, 2014.''
and inserting ``June 30, 2010. No loan may be made under this
section for which the first disbursement would be on or after
July 1, 2010.''.
(b) Effective Date.--The amendments made by subsection (a)(1)(A)
shall be effective at the close of June 30, 2010.
SEC. 207. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE-INCOME BORROWERS.
Section 428H (20 U.S.C. 1078-8) is amended--
(1) in subsection (a), by inserting ``that are first
disbursed before July 1, 2010,'' after ``under this part'';
(2) in subsection (b)--
(A) by striking ``Any student'' and inserting ``Prior
to July 1, 2010, any student''; and
(B) by inserting ``for which the first disbursement
is made before such date'' after ``unsubsidized Federal
Stafford Loan''; and
(3) in subsection (h), by inserting ``and that are first
disbursed before July 1, 2010,'' after ``July 1, 2006,''.
SEC. 208. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE ATTORNEYS.
Section 428L(b)(2)(A) (20 U.S.C. 1078-12(b)(2)(A)) is amended--
(1) by amending clause (i) to read as follows:
``(i) subject to clause (ii)--
``(I) a loan made, insured, or
guaranteed under this part, and that is
first disbursed before July 1, 2010; or
``(II) a loan made under part D or
part E; and''; and
(2) in clause (ii)--
(A) by striking ``428C or 455(g)'' and inserting
``428C, that is disbursed before July 1, 2010, or
section 455(g)''; and
(B) in subclause (II), by inserting ``for which the
first disbursement is made before July 1, 2010,'' after
``or 428H''.
SEC. 209. SPECIAL ALLOWANCES.
Section 438 (20 U.S.C. 1087-1) is amended--
(1) in subsection (b)(2)(I)--
(A) in the header, by inserting ``, and before july
1, 2010'' after ``2000'';
(B) in clause (i), by inserting ``and before July 1,
2010,'' after ``2000,'';
(C) in clause (ii)(II), by inserting ``and before
July 1, 2010,'' after ``2006,'';
(D) in clause (iii), by inserting ``and before July
1, 2010,'' after ``2000,'';
(E) in clause (iv), by inserting ``and that is
disbursed before July 1, 2010,'' after ``2000,'';
(F) in clause (v)(I), by inserting ``and before July
1, 2010,'' after ``2006,''; and
(G) in clause (vi)--
(i) in the header, by inserting ``, and
before july 1, 2010'' after ``2007''; and
(ii) in the matter preceding subclause (I),
by inserting ``and before July 1, 2010,'' after
``2007,'';
(2) in subsection (c)--
(A) in paragraph (2)(B)--
(i) in clause (iii), by inserting ``and''
after the semicolon;
(ii) in clause (iv), by striking ``; and''
and inserting a period; and
(iii) by striking clause (v); and
(B) in paragraph (6), by inserting ``and first
disbursed before July 1, 2010,'' after ``1992,''; and
(3) in subsection (d)(2)(B), by inserting ``, and before July
1, 2010'' after ``2007''.
SEC. 210. REVISED SPECIAL ALLOWANCE CALCULATION.
(a) Revised Calculation Rule.--Section 438(b)(2)(I) of the Higher
Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(I)) is amended by adding
at the end the following new clause:
``(vii) Revised calculation rule to reflect
financial market conditions.--
``(I) Calculation based on libor.--
For the calendar quarter beginning on
October 1, 2009, and each subsequent
calendar quarter, in computing the
special allowance paid pursuant to this
subsection with respect to loans
described in subclause (II), clause
(i)(I) of this subparagraph shall be
applied by substituting `of the 1-month
London Inter Bank Offered Rate (LIBOR)
for United States dollars in effect for
each of the days in such quarter as
compiled and released by the British
Bankers Association' for `of the quotes
of the 3-month commercial paper
(financial) rates in effect for each of
the days in such quarter as reported by
the Federal Reserve in Publication H-15
(or its successor) for such 3-month
period'.
``(II) Loans eligible for libor-based
calculation.--The special allowance
paid pursuant to this subsection shall
be calculated as described in subclause
(I) with respect to special allowance
payments for the 3-month period ending
December 31, 2009, and each succeeding
3-month period, on loans for which the
first disbursement is made--
``(aa) on or after the date
of enactment of the Student Aid
and Fiscal Responsibility Act
of 2009, and before July 1,
2010; and
``(bb) on or after January 1,
2000, and before the date of
enactment of the Student Aid
and Fiscal Responsibility Act
of 2009, if, not later than the
last day of the second full
fiscal quarter after the date
of enactment of such Act, the
holder of the loan
affirmatively and permanently
waives all contractual,
statutory or other legal rights
to a special allowance paid
pursuant to this subsection
that is calculated using the
formula in effect at the time
the loans were first disbursed.
``(III) Terms of waiver.--A waiver
pursuant to subclause (II)(bb) shall--
``(aa) be applicable to all
loans described in such
subclause that are held under
any lender identification
number associated with the
holder (pursuant to section
487B); and
``(bb) apply with respect to
all future calculations of the
special allowance on loans
described in such subclause
that are held on the date of
such waiver or that are
acquired by the holder after
such date.
``(IV) Participant's yield.--For the
calendar quarter beginning on October
1, 2009, and each subsequent calendar
quarter, the Secretary's participant
yield in any loan for which the first
disbursement is made on or after
January 1, 2000, and before October 1,
2009, and that is held by a lender that
has sold any participation interest in
such loan to the Secretary shall be
determined by using the LIBOR-based
rate described in subclause (I) as the
substitute rate (for the commercial
paper rate) referred to in the
participation agreement between the
Secretary and such lender.'';
(b) Conforming Amendment.--Section 438(b)(2)(I) (20 U.S.C. 1087-
1(b)(2)(I)) is further amended--
(1) in clause (i)(II), by striking ``such average bond
equivalent rate'' and inserting ``the rate determined under
subclause (I)''; and
(2) in clause (v)(III) by striking ``(iv), and (vi)'' and
inserting ``(iv), (vi), and (vii)''.
SEC. 211. ORIGINATION OF DIRECT LOANS AT INSTITUTIONS LOCATED OUTSIDE
THE UNITED STATES.
(a) Loans for Students Attending Institutions Located Outside the
United States.--Section 452 (20 U.S.C. 1087b) is amended by adding at
the end the following:
``(d) Institutions Located Outside the United States.--Loan funds for
students (and parents of students) attending institutions located
outside the United States shall be disbursed through a financial
institution located in the United States and designated by the
Secretary to serve as the agent of such institutions with respect to
the receipt of the disbursements of such loan funds and the transfer of
such funds to such institutions. To be eligible to receive funds under
this part, an otherwise eligible institution located outside the United
States shall make arrangements, subject to regulations by the
Secretary, with the agent designated by the Secretary under this
subsection to receive funds under this part.''.
(b) Conforming Amendments.--
(1) Amendments.--Section 102 (20 U.S.C. 1002), as amended by
section 102 of the Higher Education Opportunity Act (Public Law
110-315) and section 101 of Public Law 111-39, is amended--
(A) by striking ``part B'' each place it appears and
inserting ``part D'';
(B) in subsection (a)(1)(C), by inserting ``,
consistent with the requirements of section 452(d)''
before the period at the end; and
(C) in subsection (a)(2)(A)--
(i) in the matter preceding clause (i), by
striking ``made, insured, or guaranteed'' and
inserting ``made''; and
(ii) in clause (iii)--
(I) in subclause (III), by striking
``only Federal Stafford'' and all that
follows through ``section 428B'' and
inserting ``only Federal Direct
Stafford Loans under section
455(a)(2)(A), Federal Direct
Unsubsidized Stafford Loans under
section 455(a)(2)(D), or Federal Direct
PLUS Loans under section
455(a)(2)(B)''; and
(II) in subclause (V), by striking
``a Federal Stafford'' and all that
follows through ``section 428B'' and
inserting ``a Federal Direct Stafford
Loan under section 455(a)(2)(A), a
Federal Direct Unsubsidized Stafford
Loan under section 455(a)(2)(D), or a
Federal Direct PLUS Loan under section
455(a)(2)(B)''.
(2) Effective date.--The amendments made by subparagraph (C)
of paragraph (1) shall be effective on July 1, 2010, as if
enacted as part of section 102(a)(1) of the Higher Education
Opportunity Act (Public Law 110-315).
SEC. 212. AGREEMENTS WITH INSTITUTIONS.
Section 454 (20 U.S.C. 1087d) is amended--
(1) in subsection (a), by striking paragraph (4) and
redesignating the succeeding paragraphs accordingly; and
(2) in subsection (b)(2), by striking ``(5), (6), and (7)''
and inserting ``(5), and (6)''.
SEC. 213. TERMS AND CONDITIONS OF LOANS.
(a) Amendments.--Section 455 (20 U.S.C. 1087e) is amended--
(1) in subsection (a)(1), by inserting ``, and first
disbursed on June 30, 2010,'' before ``under sections 428'';
and
(2) in subsection (g)--
(A) by inserting ``, including any loan made under
part B and first disbursed before July 1, 2010'' after
``section 428C(a)(4)''; and
(B) by striking the third sentence.
(b) Effective Date.--The amendment made by subsection (a)(1) shall
apply with respect to loans first disbursed under part D of title IV of
the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) on or after
July 1, 2010.
SEC. 214. CONTRACTS.
Section 456 (20 U.S.C. 1087f) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) in the header, by striking ``In general''
and inserting ``Awarding of contracts'';
(ii) by striking ``The Secretary'' and
inserting the following:
``(A) In general.--The Secretary''; and
(iii) by adding at the end the following:
``(B) Awarding contracts for servicing loans.--The
Secretary shall, if practicable, award multiple
contracts, through a competitive bidding process, to
entities, including eligible not-for-profit servicers,
to service loans originated under this part. The
competitive bidding process shall take into account
price, servicing capacity, and capability, and may take
into account the capacity and capability to provide
default aversion activities and outreach services.
``(C) Job retention incentive payment.--(i) In a
contract with an entity under subparagraph (B) for the
servicing of loans, the Secretary shall provide a job
retention incentive payment, in an amount and manner
determined by the Secretary, if such entity agrees to
give priority for hiring for positions created as a
result of such a contract to those geographical
locations at which the entity performed student loan
origination or servicing activities under the Federal
Family Education Loan Program as of the date of
enactment of the Student Aid and Fiscal Responsibility
Act of 2009.
``(ii) In determining the allocation of loans to be
serviced by an entity awarded such a contract, the
Secretary shall consider the retention of highly
qualified employees of such entity a positive factor in
determining such allocation.'';
(B) in paragraph (2)--
(i) in the first sentence, by inserting ``,
including eligible not-for-profit servicers,''
after ``The entities'';
(ii) by amending the third sentence to read
as follows: ``The entities with which the
Secretary may enter into such contracts shall
include, where practicable, agencies with
agreements with the Secretary under sections
428(b) and (c) on the date of the enactment of
the Student Aid and Fiscal Responsibility Act
of 2009, and eligible not-for-profit servicers,
if such agencies or servicers meet the
qualifications as determined by the Secretary
under this subsection and if those agencies or
servicers have such experience and demonstrated
effectiveness.''; and
(iii) by striking the last sentence and
inserting the following: ``In awarding
contracts to such State agencies, and such
eligible not-for-profit servicers, the
Secretary shall, to the extent practicable and
consistent with the purposes of this part, give
special consideration to State agencies and
such servicers with a history of high quality
performance and demonstrated integrity in
conducting operations with institutions of
higher education and the Secretary.'';
(C) by redesignating paragraph (3) as paragraph (4),
and by inserting in such paragraph ``, or of any
eligible not-for-profit servicer to enter into an
agreement for the purposes of this section as a member
of a consortium of such entities'' before the period at
the end; and
(D) by inserting after paragraph (2) the following
new paragraph:
``(3) Servicing by eligible not-for-profit servicers.--
``(A) In general.--Notwithstanding any other
provision of this section, in each State where one or
more eligible not-for-profit servicer has its principal
place of business, the Secretary shall contract with
each such servicer to service loans originated under
this part on behalf of borrowers attending institutions
located within such State, provided that the servicer
demonstrates that it meets the standards for servicing
Federal assets and providing quality service and agrees
to service the loans at a competitive market rate, as
determined by the Secretary. In determining such a
competitive market rate, the Secretary may take into
account the volume of loans serviced by the servicer.
Contracts awarded under this paragraph shall be subject
to the same requirements for quality, performance, and
accountability as contracts awarded under paragraph (2)
for similar activities.
``(B) Allocations.--(i) One servicer.--In the case of
a State with only one eligible not-for-profit servicer
with a contract described in subparagraph (A), the
Secretary shall, at a minimum, allocate to such
servicer, on an annual basis and subject to such
contract, the servicing rights for the lesser of--
``(I) the loans of 100,000 borrowers
(including borrowers who borrowed loans in a
prior year that were serviced by the servicer)
attending institutions located within the
State; or
``(II) the loans of all the borrowers
attending institutions located within the
State.
``(ii) Multiple servicers.--In the case of a State
with more than one eligible not-for-profit servicer
with a contract described in subparagraph (A), the
Secretary shall, at a minimum, allocate to each such
servicer, on an annual basis and subject to such
contract, the servicing rights for the lesser of--
``(I) the loans of 100,000 borrowers
(including borrowers who borrowed loans in a
prior year that were serviced by the servicer)
attending institutions located within the
State; or
``(II) an equal share of the loans of all
borrowers attending institutions located within
the State, except the Secretary shall adjust
such shares as necessary to ensure that the
loans of any single borrower remain with a
single servicer.
``(iii) Additional allocation.--The Secretary may
allocate additional servicing rights to an eligible
not-for-profit servicer based on the performance of
such servicer, as determined by the Secretary,
including performance in the areas of customer service
and default aversion.
``(C) Multiple loans.--Notwithstanding the
allocations required by subparagraph (B), the Secretary
may transfer loans among servicers who are awarded
contracts to service loans pursuant to this section to
ensure that the loans of any single borrower remain
with a single servicer.''; and
(2) by adding at the end the following:
``(c) Report to Congress.--Not later than 3 years after the date of
the enactment of the Student Aid and Fiscal Responsibility Act of 2009,
the Secretary shall prepare and submit to the authorizing committees, a
report evaluating the performance of all eligible not-for-profit
servicers awarded a contract under this section to service loans
originated under this part. Such report shall give consideration to--
``(1) customer satisfaction of borrowers and institutions
with respect to the loan servicing provided by the servicers;
``(2) compliance with applicable regulations by the
servicers; and
``(3) the effectiveness of default aversion activities, and
outreach services (if any), provided by the servicers.
``(d) Definitions.--In this section:
``(1) Default aversion activities.--The term `default
aversion activities' means activities that are directly related
to providing collection assistance to the Secretary on a
delinquent loan, prior to the loan being legally in a default
status, including due diligence activities required pursuant to
regulations.
``(2) Eligible not-for-profit servicer.--
``(A) In general.--The term `eligible not-for-profit
servicer' means an entity that, on the date of
enactment of the Student Aid and Fiscal Responsibility
Act of 2009--
``(i) meets the definition of an eligible
not-for-profit holder under section 435(p),
except that such term does not include eligible
lenders described in paragraph (1)(D) of such
section;
``(ii) notwithstanding clause (i), is the
sole beneficial owner of a loan for which the
special allowance rate is calculated under
section 438(b)(2)(I)(vi)(II) because the loan
is held by an eligible lender trustee that is
an eligible not-for-profit holder as defined
under section 435(p)(1)(D); or
``(iii) is an affiliated entity of an
eligible not-for-profit servicer described in
clause (i) or (ii) that--
``(I) directly employs, or will
directly employ (on or before the date
the entity begins servicing loans under
a contract awarded by the Secretary
pursuant to subsection (a)(3)(A)), the
majority of individuals who perform
student loan servicing functions; and
``(II) on such date of enactment, was
performing, or had entered into a
contract with a third party servicer
(as such term is defined in section
481(c)) who was performing, student
loan servicing functions for loans made
under part B of this title.
``(B) Affiliated entity.--For the purposes of
subparagraph (A), the term `affiliated entity' means an
entity contracted to perform services for an eligible
not-for-profit servicer that--
``(i) is a nonprofit entity or is wholly
owned by a nonprofit entity; and
``(ii) is not owned or controlled, in whole
or in part, by--
``(I) a for-profit entity; or
``(II) an entity having its principal
place of business in another State.
``(3) Outreach services.--The term `outreach services' means
programs offered to students and families, including programs
delivered in coordination with institutions of higher education
that--
``(A) encourage--
``(i) students to attend and complete a
degree or certification program at an
institution of higher education; and
``(ii) students and families to obtain
financial aid, but minimize the borrowing of
education loans; and
``(B) deliver financial literacy and counseling
tools.''.
SEC. 215. INTEREST RATES.
Section 455(b)(7) (20 U.S.C. 1087e(b)(7)) is amended by adding at the
end the following new subparagraph:
``(E) Reduced rates for undergraduate fdsl on and
after july 1, 2012.--Notwithstanding the preceding
paragraphs of this subsection and subparagraph (A) of
this paragraph, for Federal Direct Stafford Loans made
to undergraduate students for which the first
disbursement is made on or after July 1, 2012, the
applicable rate of interest shall, during any 12-month
period beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and 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) 2.5 percent,
except that such rate shall not exceed 6.8 percent.''.
Subtitle B--Perkins Loan Reform
SEC. 221. FEDERAL DIRECT PERKINS LOANS TERMS AND CONDITIONS.
Part D of title IV (20 U.S.C. 1087a et seq.) is amended by inserting
after section 455 the following new section:
``SEC. 455A. FEDERAL DIRECT PERKINS LOANS.
``(a) Designation of Loans.--Loans made to borrowers under this
section shall be known as `Federal Direct Perkins Loans'.
``(b) In General.--It is the purpose of this section to authorize
loans to be awarded by institutions of higher education through
agreements established under section 463(f). Unless otherwise specified
in this section, all terms and conditions and other requirements
applicable to Federal Direct Unsubsidized Stafford loans established
under section 455(a)(2)(D) shall apply to loans made pursuant to this
section.
``(c) Eligible Borrowers.--Any student meeting the requirements for
student eligibility under section 464(b) (including graduate and
professional students as defined in regulations promulgated by the
Secretary) shall be eligible to borrow a Federal Direct Perkins Loan,
provided the student attends an eligible institution with an agreement
with the Secretary under section 463(f), and the institution uses its
authority under that agreement to award the student a loan.
``(d) Loan Limits.--The annual and aggregate limits for loans under
this section shall be the same as those established under section 464,
and aggregate limits shall include loans made by institutions under
agreements under section 463(a).
``(e) Applicable Rates of Interest.--Loans made pursuant to this
section shall bear interest, on the unpaid balance of the loan, at the
rate of 5 percent per year.''.
SEC. 222. AUTHORIZATION OF APPROPRIATIONS.
Section 461 (20 U.S.C. 1087aa) is amended--
(1) in subsection (a), by inserting ``, before July 1,
2010,'' after ``The Secretary shall'';
(2) in subsection (b)--
(A) in paragraph (1)--
(i) by striking ``(1) For the purpose'' and
inserting ``For the purpose''; and
(ii) by striking ``and for each of the five
succeeding fiscal years''; and
(B) by striking paragraph (2); and
(3) by striking subsection (c).
SEC. 223. ALLOCATION OF FUNDS.
Section 462 (20 U.S.C. 1087bb) is amended--
(1) in subsection (a)(1), by striking ``From'' and inserting
``For any fiscal year before fiscal year 2010, from''; and
(2) in subsection (i)(1), by striking ``for any fiscal
year,'' and inserting ``for any fiscal year before fiscal year
2010,''.
SEC. 224. FEDERAL DIRECT PERKINS LOAN ALLOCATION.
Part E of title IV is further amended by inserting after section 462
(20 U.S.C. 1087bb) the following:
``SEC. 462A. FEDERAL DIRECT PERKINS LOAN ALLOCATION.
``(a) Purposes.--The purposes of this section are--
``(1) to allocate, among eligible and participating
institutions (as such terms are defined in this section), the
authority to make Federal Direct Perkins Loans under section
455A with a portion of the annual loan authority described in
subsection (b); and
``(2) to make funds available, in accordance with section
452, to each participating institution from a portion of the
annual loan authority described in subsection (b), in an amount
not to exceed the sum of an institution's allocation of funds
under subparagraphs (A), (B), and (C) of subsection (b)(1) to
enable each such institution to make Federal Direct Perkins
Loans to eligible students at the institution.
``(b) Available Direct Perkins Annual Loan Authority.--
``(1) Availability and allocations.--There are hereby made
available, from funds made available for loans made under part
D, not to exceed $6,000,000,000 of annual loan authority for
award year 2010-2011 and each succeeding award year, to be
allocated as follows:
``(A) The Secretary shall allocate not more than \1/
2\ of such funds for each award year by allocating to
each participating institution an amount equal to the
adjusted self-help need amount of the institution, as
determined in accordance with subsection (c) for such
award year.
``(B) The Secretary shall allocate not more than \1/
4\ of such funds for each award year by allocating to
each participating institution an amount equal to the
low tuition incentive amount of the institution, as
determined in accordance with subsection (d).
``(C) The Secretary shall allocate not more than \1/
4\ of such funds for each award year by allocating to
each participating institution an amount which bears
the same ratio to the funds allocated under this
subparagraph as the ratio determined in accordance with
subsection (e) for the calculation of the Federal Pell
Grant and degree recipient amount of the institution.
``(2) No funds to non-participating institutions.--The
Secretary shall not make funds available under this subsection
to any eligible institution that is not a participating
institution. The adjusted self-help need amount (determined in
accordance with subsection (c)) of an eligible institution that
is not a participating institution shall not be made available
to any other institution.
``(c) Adjusted Self-help Need Amount.--For the purposes of subsection
(b)(1)(A), the Secretary shall calculate the adjusted self-help need
amount of each eligible institution for an award year as follows:
``(1) Use of base self-help need amounts.--
``(A) In general.--Except as provided in paragraphs
(2), (3), and (4), the adjusted self-help need amount
of each eligible institution shall be the institution's
base self-help need amount, which is the sum of--
``(i) the self-help need of the institution's
eligible undergraduate students for such award
year; and
``(ii) the self-help need of the
institution's eligible graduate and
professional students for such award year.
``(B) Undergraduate student self-help need.--To
determine the self-help need of an institution's
eligible undergraduate students, the Secretary shall
determine the sum of each eligible undergraduate
student's average cost of attendance for the second
preceding award year less each such student's expected
family contribution (computed in accordance with part
F) for the second preceding award year, except that,
for each such eligible undergraduate student, the
amount computed by such subtraction shall not be less
than zero or more than the lesser of--
``(i) 25 percent of the average cost of
attendance with respect to such eligible
student; or
``(ii) $5,500.
``(C) Graduate and professional student self-help
need.--To determine the self-help need of an
institution's eligible graduate and professional
students, the Secretary shall determine the sum of each
eligible graduate and professional student's average
cost of attendance for the second preceding award year
less each such student's expected family contribution
(computed in accordance with part F) for such second
preceding award year, except that, for each such
eligible graduate and professional student, the amount
computed by such subtraction shall not be less than
zero or more than $8,000.
``(2) Ratable reduction adjustments.--If the sum of the base
self-help need amounts of all eligible institutions for an
award year as determined under paragraph (1) exceeds \1/2\ of
the annual loan authority under subsection (b) for such award
year, the Secretary shall ratably reduce the base self-help
need amounts of all eligible institutions until the sum of such
amounts is equal to the amount that is \1/2\ of the annual loan
authority under subsection (b).
``(3) Required minimum amount.--Notwithstanding paragraph
(2), the adjusted self-help need amount of each eligible
institution shall not be less than the average of the
institution's total principal amount of loans made under this
part for each of the 5 most recent award years.
``(4) Additional adjustments.--If the Secretary determines
that a ratable reduction under paragraph (2) results in the
adjusted self-help need amount of any eligible institution
being reduced below the minimum amount required under paragraph
(3), the Secretary shall--
``(A) for each institution for which the minimum
amount under paragraph (3) is not satisfied, increase
the adjusted self-help need amount to the amount of the
required minimum under such subparagraph; and
``(B) ratably reduce the adjusted self-help need
amounts of all eligible institutions not described in
subparagraph (A) until the sum of the adjusted self-
help need amounts of all eligible institutions is equal
to the amount that is \1/2\ of the annual loan
authority under subsection (b).
``(d) Low Tuition Incentive Amount.--
``(1) In general.--For purposes of subsection (b)(1)(B), the
Secretary shall determine the low tuition incentive amount for
each participating institution for each award year, by
calculating for each such institution the sum of--
``(A) the total amount, if any (but not less than
zero), by which--
``(i) the average tuition and required fees
for the institution's sector for the second
preceding award year; exceeds
``(ii) the tuition and required fees for the
second preceding award year for each
undergraduate and graduate student attending
the institution who had financial need (as
determined under part F); plus
``(B) the total amount, if any (but not less than
zero), by which--
``(i) the total amount for the second
preceding award year of non-Federal grant aid
provided to meet the financial need of all
undergraduate students attending the
institution (as determined without regard to
financial aid not received under this title);
exceeds
``(ii) the total amount for the second
preceding award year, if any, by which--
``(I) the tuition and required fees
of each such student with such
financial need; exceeds
``(II) the average tuition and
required fees for the institution's
sector.
``(2) Ratable reduction.--If the sum of the low tuition
incentive amounts of all participating institutions for an
award year as determined under paragraph (1) exceeds \1/4\ of
the annual loan authority under subsection (b) for such award
year, the Secretary shall ratably reduce the low tuition
incentive amounts of all participating institutions until the
sum of such amounts is equal to the amount that is \1/4\ of the
annual loan authority under subsection (b).
``(e) Federal Pell Grant and Degree Recipient Amount.--For purposes
of subsection (b)(1)(C), the Secretary shall determine the Federal Pell
Grant and degree recipient amount for each participating institution
for each award year, by calculating for each such institution the ratio
of--
``(1) the number of students who, during the most recent year
for which data are available, obtained an associate's degree or
other postsecondary degree from such participating institution
and, prior to obtaining such degree, received a Federal Pell
Grant for attendance at any institution of higher education; to
``(2) the sum of the number of students who, during the most
recent year for which data are available, obtained an
associate's degree or other postsecondary degree from each
participating institution and, prior to obtaining such degree,
received a Federal Pell Grant for attendance at any institution
of higher education.
``(f) Definitions.--As used in this section:
``(1) Annual loan authority.--The term `annual loan
authority' means the total original principal amount of loans
that may be allocated and made available for an award year to
make Federal Direct Perkins Loans under section 455A.
``(2) Average cost of attendance.--
``(A) In general.--The term `average cost of
attendance' means the average of the attendance costs
for undergraduate students and for graduate and
professional students, respectively, for the second
preceding award year which shall include--
``(i) tuition and required fees determined in
accordance with subparagraph (B);
``(ii) standard living expenses determined in
accordance with subparagraph (C); and
``(iii) books and supplies determined in
accordance with subparagraph (D).
``(B) Tuition and required fees.--The average
undergraduate and graduate and professional tuition and
required fees described in subparagraph (A)(i) shall be
computed on the basis of information reported by the
institution to the Secretary, which shall include--
``(i) total revenue received by the
institution from undergraduate and graduate and
professional students, respectively, for
tuition and required fees for the second
preceding award year; and
``(ii) the institution's full-time equivalent
enrollment of undergraduate and graduate and
professional students, respectively, for such
second preceding award year.
``(C) Standard living expenses.--The standard living
expense described in subparagraph (A)(ii) is equal to
the allowance, determined by an institution, for room
and board costs incurred by a student, as computed in
accordance with part F for the second preceding award
year.
``(D) Books and supplies.--The allowance for books
and supplies described in subparagraph (A)(iii) is
equal to the allowance, determined by an institution,
for books, supplies, transportation, and miscellaneous
personal expenses, including a reasonable allowance for
the documented rental or purchase of a personal
computer, as computed in accordance with part F for the
second preceding award year.
``(3) Average tuition and required fees for the institution's
sector.--The term `average tuition and required fees for the
institution's sector' shall be determined by the Secretary for
each of the categories described in section 132(d).
``(4) Eligible institution.--The term `eligible institution'
means an institution of higher education that participates in
the Federal Direct Stafford Loan Program.
``(5) Participating institution.--The term `participating
institution' means an institution of higher education that has
an agreement under section 463(f).
``(6) Sector.--The term `sector' means each of the categories
described in section 132(d).''.
SEC. 225. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.
(a) Amendments.--Section 463 (20 U.S.C. 1087cc) is amended--
(1) in subsection (a)--
(A) in the heading, by inserting ``for Loans Made
Before July 1, 2010'' after ``Agreements'';
(B) in paragraph (3)(A), by inserting ``before July
1, 2010'' after ``students'';
(C) in paragraph (4), by striking ``thereon--'' and
all that follows and inserting ``thereon, if the
institution has failed to maintain an acceptable
collection record with respect to such loan, as
determined by the Secretary in accordance with criteria
established by regulation, the Secretary may require
the institution to assign such note or agreement to the
Secretary, without recompense;''; and
(D) in paragraph (5), by striking ``and the Secretary
shall apportion'' and all that follows through ``in
accordance with section 462'' and inserting ``and the
Secretary shall return a portion of funds from loan
repayments to the institution as specified in section
466(b)'';
(2) by amending subsection (b) to read as follows:
``(b) Administrative Expenses.--An institution that has entered into
an agreement under subsection (a) shall be entitled, for each fiscal
year during which it services student loans from a student loan fund
established under such agreement, to a payment in lieu of reimbursement
for its expenses in servicing student loans made before July 1, 2010.
Such payment shall be equal to 0.50 percent of the outstanding
principal and interest balance of such loans being serviced by the
institution as of September 30 of each fiscal year.''; and
(3) by adding at the end the following:
``(f) Contents of Agreements for Loans Made on or After July 1,
2010.--An agreement with any institution of higher education that
elects to participate in the Federal Direct Perkins Loan program under
section 455A shall provide--
``(1) for the establishment and maintenance of a Direct
Perkins Loan program at the institution under which the
institution shall use loan authority allocated under section
462A to make loans to eligible students attending the
institution;
``(2) that the institution, unless otherwise specified in
this subsection, shall operate the program consistent with the
requirements of agreements established under section 454;
``(3) that the institution will pay matching funds,
quarterly, in an amount agreed to by the institution and the
Secretary, to an escrow account approved by the Secretary, for
the purpose of providing loan benefits to borrowers;
``(4) that if the institution fails to meet the requirements
of paragraph (3), the Secretary shall suspend or terminate the
institution's eligibility to make Federal Direct Perkins Loans
under section 455A until such time as the Secretary determines,
in accordance with section 498, that the institution has met
the requirements of such paragraph; and
``(5) that if the institution ceases to be an eligible
institution within the meaning of section 435(a) by reason of
having a cohort default rate that exceeds the threshold
percentage specified paragraph (2) of such section, the
Secretary shall suspend or terminate the institution's
eligibility to make Federal Direct Perkins Loans under section
455A unless and until the institution would qualify for a
resumption of eligible institution status under such
section.''.
(b) Effective Date.--The amendments made by paragraph (2) of
subsection (a) shall take effect on October 1, 2010.
SEC. 226. STUDENT LOAN INFORMATION BY ELIGIBLE INSTITUTIONS.
Section 463A (20 U.S.C. 1087cc-1) is amended--
(1) in subsection (a), by striking ``Each institution'' and
inserting ``For loans made before July 1, 2010, each
institution''; and
(2) in subsection (b), by striking ``Each institution'' and
inserting ``For loans made before July 1, 2010, each
institution''.
SEC. 227. TERMS OF LOANS.
(a) Section 464 (20 U.S.C. 1087dd) is amended--
(1) in subsection (a)(1), by striking ``section 463'' and
inserting ``section 463(a)'';
(2) in subsection (b)(1), by inserting ``made before July 1,
2010,'' after ``A loan'';
(3) in subsection (c)--
(A) in paragraph (1), by inserting ``made before July
1, 2010,'' after ``a loan'';
(B) in paragraph (2)--
(i) in subparagraph (A), by inserting ``made
before July 1, 2010,'' after ``any loan''; and
(ii) in subparagraph (B), by inserting ``made
before July 1, 2010,'' after ``any loan'';
(C) in paragraph (3)(B), by inserting ``for a loan
made before July 1, 2010,'' after ``during the
repayment period'';
(D) in paragraph (4), by inserting ``before July 1,
2010,'' after ``for a loan made'';
(E) in paragraph (5), by striking ``The institution''
and inserting ``For loans made before July 1, 2010, the
institution''; and
(F) in paragraph (6), by inserting ``made before July
1, 2010,'' after ``of loans'';
(4) in subsection (d), by inserting ``made before July 1,
2010,'' before ``from the student loan fund'';
(5) in subsection (e), by inserting ``with respect to loans
made before July 1, 2010, and'' before ``as documented in
accordance with paragraph (2),'';
(6) by repealing subsection (f);
(7) in subsection (g)(1), by inserting ``and before July 1,
2010,'' after ``January 1, 1986,'';
(8) in subsection (h)--
(A) in paragraph (1)(A) by inserting ``before July 1,
2010,'' after ``made under this part''; and
(B) in paragraph (2), by inserting ``before July 1,
2010,'' after ``under this part''; and
(9) in subsection (j)(1), by inserting ``before July 1,
2010,'' after ``under this part''.
SEC. 228. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.
(a) Section 465 (20 U.S.C. 1087ee) is amended--
(1) in subsection (a), by inserting ``and before July 1,
2010,'' after ``June 30, 1972,''; and
(2) by amending subsection (b) to read as follows:
``(b) Reimbursement for Cancellations.--
``(1) Assigned loans.--In the case of loans made under this
part before July 1, 2010, and that are assigned to the
Secretary, the Secretary shall, from amounts repaid each
quarter on assigned Perkins Loans made before July 1, 2010, pay
to each institution for each quarter an amount equal to--
``(A) the aggregate of the amounts of loans from its
student loan fund that are canceled pursuant to this
section for such quarter, minus
``(B) an amount equal to the aggregate of the amounts
of any such loans so canceled that were made from
Federal capital contributions to its student loan fund.
``(2) Retained loans.--In the case of loans made under this
part before July 1, 2010, and that are retained by the
institution for servicing, the institution shall deduct from
loan repayments owed to the Secretary under section 466, an
amount equal to--
``(A) the aggregate of the amounts of loans from its
student loan fund that are canceled pursuant to this
section for such quarter, minus
``(B) an amount equal to the aggregate of the amounts
of any such loans so canceled that were made from
Federal capital contributions to its student loan
fund.''.
(b) Section 466 (20 U.S.C. 1087ff) is amended to read as follows:
``SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.
``(a) Capital Distribution.--Beginning July 1, 2010, there shall be a
capital distribution of the balance of the student loan fund
established under this part by each institution of higher education as
follows:
``(1) For the quarter beginning July 1, 2010, the Secretary
shall first be paid, no later than September 30, 2010, an
amount that bears the same ratio to the cash balance in such
fund at the close of June 30, 2010, as the total amount of the
Federal capital contributions to such fund by the Secretary
under this part bears to--
``(A) the sum of such Federal contributions and the
institution's capital contributions to such fund, less
``(B) an amount equal to--
``(i) the institution's outstanding
administrative costs as calculated under
section 463(b),
``(ii) outstanding charges assessed under
section 464(c)(1)(H), and
``(iii) outstanding loan cancellation costs
incurred under section 465.
``(2) At the end of each quarter subsequent to the quarter
ending September 30, 2010, the Secretary shall first be paid an
amount that bears the same ratio to the cash balance in such
fund at the close of the preceding quarter, as the total amount
of the Federal capital contributions to such fund by the
Secretary under this part bears to--
``(A) the sum of such Federal contributions and the
institution's capital contributions to such fund, less
``(B) an amount equal to--
``(i) the institution's administrative costs
incurred for that quarter as calculated under
section 463(b),
``(ii) charges assessed for that quarter
under section 464(c)(1)(H), and
``(iii) loan cancellation costs incurred for
that quarter under section 465.
``(3)(A) The Secretary shall calculate the amounts due to the
Secretary under paragraph (1) (adjusted in accordance with
subparagraph (B), as appropriate) and paragraph (2) and shall
promptly inform the institution of such calculated amounts.
``(B) In the event that, prior to the date of enactment of
the Student Aid and Fiscal Responsibility Act of 2009, an
institution made a short-term, interest-free loan to the
institution's student loan fund established under this part in
anticipation of collections or receipt of Federal capital
contributions, and the institution demonstrates to the
Secretary, on or before June 30, 2010, that such loan will
still be outstanding after June 30, 2010, the Secretary shall
subtract the amount of such outstanding loan from the cash
balance of the institution's student loan fund that is used to
calculate the amount due to the Secretary under paragraph (1).
An adjustment of an amount due to the Secretary under this
subparagraph shall be made by the Secretary on a case-by-case
basis.
``(4) Any remaining balance at the end of a quarter after a
payment under paragraph (1) or (2) shall be retained by the
institution for use at its discretion. Any balance so retained
shall be withdrawn from the student loan fund and shall not be
counted in calculating amounts owed to the Secretary for
subsequent quarters.
``(5) Each institution shall make the quarterly payments to
the Secretary described in paragraph (2) until all outstanding
Federal Perkins Loans at that institution have been assigned to
the Secretary and there are no funds remaining in the
institution's student loan fund.
``(6) In the event that the institution's administrative
costs, charges, and cancellation costs described in paragraph
(2) for a quarter exceed the amount owed to the Secretary under
paragraphs (1) and (2) for that quarter, no payment shall be
due to the Secretary from the institution for that quarter and
the Secretary shall pay the institution, from funds realized
from the collection of assigned Federal Perkins Loans made
before July 1, 2010, an amount that, when combined with the
amount retained by the institution under paragraphs (1) and
(2), equals the full amount of such administrative costs,
charges, and cancellation costs.
``(b) Assignment of Outstanding Loans.--Beginning July 1, 2010, an
institution of higher education may assign all outstanding loans made
under this part before July 1, 2010, to the Secretary, consistent with
the requirements of section 463(a)(5). In collecting loans so assigned,
the Secretary shall pay an institution an amount that constitutes the
same fraction of such collections as the fraction of the cash balance
that the institution retains under subsection (a)(2), but determining
such fraction without regard to subparagraph (B)(i) of such
subsection.''.
SEC. 229. IMPLEMENTATION OF NON-TITLE IV REVENUE REQUIREMENT.
(a) Amendments.--Section 487(d) (20 U.S.C. 1094(d)) is amended--
(1) in paragraph (1)(E), by striking ``July 1, 2011'' and
inserting ``July 1, 2012'';
(2) in paragraph (1)(F)--
(A) by redesignating clauses (iii), (iv), and (v) as
clauses (iv), (v), and (vi), respectively; and
(B) by inserting after clause (ii) the following new
clause:
``(iii) for the period beginning July 1,
2010, and ending July 1, 2012, the amount of
funds the institution received from loans
disbursed under section 455A;'';.
(3) in paragraph (2)(A), by striking ``two consecutive'' and
inserting ``three consecutive''; and
(4) in paragraph (2)(B)--
(A) by striking ``any institutional fiscal year'' and
inserting ``two consecutive institutional fiscal
years'';
(B) by striking ``the two institutional fiscal years
after the institutional fiscal year'' and inserting
``the institutional fiscal year after the second
consecutive institutional fiscal year''; and
(C) by striking ``two consecutive'' in clause (ii) of
such paragraph and inserting ``three consecutive''.
(b) Temporary Effect.--The amendments made by paragraphs (3) and (4)
of subsection (a)--
(1) shall take effect on the date of enactment of this Act;
and
(2) shall cease to be effective on July 1, 2012.
SEC. 230. ADMINISTRATIVE EXPENSES.
Section 489(a) (20 U.S.C. 1096(a)) is amended--
(1) in the second sentence, by striking ``or under part E of
this title''; and
(2) in the third sentence--
(A) by inserting ``and'' after ``subpart 3 of part
A,''; and
(B) by striking ``compensation of students,'' and all
that follows through the period and inserting
``compensation of students.''.
TITLE III--MODERNIZATION, RENOVATION, AND REPAIR
Subtitle A--Elementary and Secondary Education
SEC. 301. DEFINITIONS.
In this subtitle:
(1) The term ``Bureau-funded school'' has the meaning given
such term in section 1141 of the Education Amendments of 1978
(25 U.S.C. 2021).
(2) The term ``charter school'' has the meaning given such
term in section 5210 of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 7221i).
(3) The term ``CHPS Criteria'' means the green building
rating program developed by the Collaborative for High
Performance Schools.
(4) The term ``Energy Star'' means the Energy Star program of
the United States Department of Energy and the United States
Environmental Protection Agency.
(5) The term ``Green Globes'' means the Green Building
Initiative environmental design and rating system referred to
as Green Globes.
(6) The term ``LEED Green Building Rating System'' means the
United States Green Building Council Leadership in Energy and
Environmental Design green building rating standard referred to
as LEED Green Building Rating System.
(7) The term ``local educational agency''--
(A) has the meaning given such term in section 9101
of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 7801);
(B) includes any public charter school that
constitutes a local educational agency under State law;
and
(C) includes the Recovery School District of
Louisiana.
(8) The term ``outlying area''--
(A) means the United States Virgin Islands, Guam,
American Samoa, and the Commonwealth of the Northern
Mariana Islands; and
(B) includes the Republic of Palau.
(9) The term ``public school facilities'' means existing
public elementary or secondary school facilities, including
public charter school facilities and other existing facilities
planned for adaptive reuse as public charter school facilities.
(10) The term ``Secretary'' means the Secretary of Education.
(11) The term ``State'' means each of the 50 States, the
District of Columbia, and the Commonwealth of Puerto Rico.
CHAPTER 1--GRANTS FOR MODERNIZATION, RENOVATION, OR REPAIR OF PUBLIC
SCHOOL FACILITIES
SEC. 311. PURPOSE.
Grants under this chapter shall be for the purpose of modernizing,
renovating, or repairing public school facilities (including early
learning facilities, as appropriate), based on the need of the
facilities for such improvements, to ensure that public school
facilities are safe, healthy, high-performing, and technologically up-
to-date.
SEC. 312. ALLOCATION OF FUNDS.
(a) Reservation.--
(1) In general.--From the amount appropriated to carry out
this chapter for each fiscal year pursuant to section 345(a),
the Secretary shall reserve 2 percent of such amount,
consistent with the purpose described in section 311--
(A) to provide assistance to the outlying areas; and
(B) for payments to the Secretary of the Interior to
provide assistance to Bureau-funded schools.
(2) Use of reserved funds.--In each fiscal year, the amount
reserved under paragraph (1) shall be divided between the uses
described in subparagraphs (A) and (B) of such paragraph in the
same proportion as the amount reserved under section 1121(a) of
the Elementary and Secondary Education Act of 1965 (20 U.S.C.
6331(a)) is divided between the uses described in paragraphs
(1) and (2) of such section 1121(a) in such fiscal year.
(3) Distressed areas and natural disasters.--From the amount
appropriated to carry out this chapter for each fiscal year
pursuant to section 345(a), the Secretary shall reserve 5
percent of such amount for grants to--
(A) local educational agencies serving geographic
areas with significant economic distress, to be used
consistent with the purpose described in section 311
and the allowable uses of funds described in section
313; and
(B) local educational agencies serving geographic
areas recovering from a natural disaster, to be used
consistent with the purpose described in section 321
and the allowable uses of funds described in section
323.
(b) Allocation to States.--
(1) State-by-state allocation.--Of the amount appropriated to
carry out this chapter for each fiscal year pursuant to section
345(a), and not reserved under subsection (a), each State shall
be allocated an amount in proportion to the amount received by
all local educational agencies in the State under part A of
title I of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 6311 et seq.) for the previous fiscal year relative
to the total amount received by all local educational agencies
in every State under such part for such fiscal year.
(2) State administration.--A State may reserve up to 1
percent of its allocation under paragraph (1) to carry out its
responsibilities under this chapter, which include--
(A) providing technical assistance to local
educational agencies;
(B) developing an online, publicly searchable
database that includes an inventory of public school
facilities in the State, including for each such
facility, its design, condition, modernization,
renovation and repair needs, utilization, energy use,
and carbon footprint; and
(C) creating voluntary guidelines for high-performing
school buildings, including guidelines concerning the
following:
(i) Site location, storm water management,
outdoor surfaces, outdoor lighting, and
transportation, including public transit and
pedestrian and bicycle accessability.
(ii) Outdoor water systems, landscaping to
minimize water use, including elimination of
irrigation systems for landscaping, and indoor
water use reduction.
(iii) Energy efficiency (including minimum
and superior standards, such as for heating,
ventilation, and air conditioning systems), use
of alternative energy sources, commissioning,
and training.
(iv) Use of durable, sustainable materials
and waste reduction.
(v) Indoor environmental quality, such as day
lighting in classrooms, lighting quality,
indoor air quality (including with reference to
reducing the incidence and effects of asthma
and other respiratory illnesses), acoustics,
and thermal comfort.
(vi) Operations and management, such as use
of energy-efficient equipment, indoor
environmental management plan, maintenance
plan, and pest management.
(3) Grants to local educational agencies.--From the amount
allocated to a State under paragraph (1), each eligible local
educational agency in the State shall receive an amount in
proportion to the amount received by such local educational
agency under part A of title I of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6311 et seq.) for the previous
fiscal year relative to the total amount received by all local
educational agencies in the State under such part for such
fiscal year, except that no local educational agency that
received funds under such part for such fiscal year shall
receive a grant of less than $5,000 in any fiscal year under
this chapter.
(4) Special rule.--Section 1122(c)(3) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6332(c)(3)) shall
not apply to paragraph (1) or (3).
(c) Special Rules.--
(1) Distributions by secretary.--The Secretary shall make and
distribute the reservations and allocations described in
subsections (a) and (b) not later than 120 days after an
appropriation of funds for this chapter is made.
(2) Distributions by states.--A State shall make and
distribute the allocations described in subsection (b)(3)
within 90 days of receiving such funds from the Secretary.
SEC. 313. ALLOWABLE USES OF FUNDS.
A local educational agency receiving a grant under this chapter shall
use the grant for modernization, renovation, or repair of public school
facilities (including early learning facilities, as appropriate),
including--
(1) repair, replacement, or installation of roofs, including
extensive, intensive or semi-intensive green roofs, electrical
wiring, water supply and plumbing systems, sewage systems,
storm water runoff systems, lighting systems, building
envelope, windows, ceilings, flooring, or doors, including
security doors;
(2) repair, replacement, or installation of heating,
ventilation, or air conditioning systems, including insulation,
and conducting indoor air quality assessments;
(3) compliance with fire, health, seismic, and safety codes,
including professional installation of fire and life safety
alarms, and modernizations, renovations, and repairs that
ensure that schools are prepared for emergencies, such as
improving building infrastructure to accommodate security
measures and installing or upgrading technology to ensure that
schools are able to respond to emergencies such as acts of
terrorism, campus violence, and natural disasters;
(4) retrofitting necessary to increase the energy efficiency
and water efficiency of public school facilities;
(5) modifications necessary to make facilities accessible in
compliance with the Americans with Disabilities Act of 1990 (42
U.S.C. 12101 et seq.) and section 504 of the Rehabilitation Act
of 1973 (29 U.S.C. 794);
(6) abatement, removal, or interim controls of asbestos,
polychlorinated biphenyls, mold, mildew, lead-based hazards,
including lead-based paint hazards, or a proven carcinogen;
(7) measures designed to reduce or eliminate human exposure
to classroom noise and environmental noise pollution;
(8) modernization, renovation, or repair necessary to reduce
the consumption of coal, electricity, land, natural gas, oil,
or water;
(9) installation or upgrading of educational technology
infrastructure;
(10) modernization, renovation, or repair of science and
engineering laboratories, libraries, and career and technical
education facilities, and improvements to building
infrastructure to accommodate bicycle and pedestrian access;
(11) installation or upgrading of renewable energy generation
and heating systems, including solar, photovoltaic, wind,
biomass (including wood pellet and woody biomass), waste-to-
energy, and solar-thermal and geothermal systems, and for
energy audits;
(12) measures designed to reduce or eliminate human exposure
to airborne particles such as dust, sand, and pollens;
(13) creating greenhouses, gardens (including trees), and
other facilities for environmental, scientific, or other
educational purposes, or to produce energy savings;
(14) modernizing, renovating, or repairing physical education
facilities for students, including upgrading or installing
recreational structures made from post-consumer recovered
materials in accordance with the comprehensive procurement
guidelines prepared by the Administrator of the Environmental
Protection Agency under section 6002(e) of the Solid Waste
Disposal Act (42 U.S.C. 6962(e));
(15) other modernization, renovation, or repair of public
school facilities to--
(A) improve teachers' ability to teach and students'
ability to learn;
(B) ensure the health and safety of students and
staff;
(C) make them more energy efficient; or
(D) reduce class size; and
(16) required environmental remediation related to
modernization, renovation, or repair described in paragraphs
(1) through (15).
SEC. 314. PRIORITY PROJECTS.
In selecting a project under section 313, a local educational agency
may give priority to projects involving the abatement, removal, or
interim controls of asbestos, polychlorinated biphenyls, mold, mildew,
lead-based hazards, including lead-based paint hazards, or a proven
carcinogen.
CHAPTER 2--SUPPLEMENTAL GRANTS FOR LOUISIANA, MISSISSIPPI, AND ALABAMA
SEC. 321. PURPOSE.
Grants under this chapter shall be for the purpose of modernizing,
renovating, repairing, or constructing public school facilities,
including, where applicable, early learning facilities, based on the
need for such improvements or construction, to ensure that public
school facilities are safe, healthy, high-performing, and
technologically up-to-date.
SEC. 322. ALLOCATION TO LOCAL EDUCATIONAL AGENCIES.
(a) In General.--Of the amount appropriated to carry out this chapter
for each fiscal year pursuant to section 345(b), the Secretary shall
allocate to local educational agencies in Louisiana, Mississippi, and
Alabama an amount equal to the infrastructure damage inflicted on
public school facilities in each such district by Hurricane Katrina or
Hurricane Rita in 2005 relative to the total of such infrastructure
damage so inflicted in all such districts, combined.
(b) Distribution by Secretary.--The Secretary shall determine and
distribute the allocations described in subsection (a) not later than
120 days after an appropriation of funds for this chapter is made.
SEC. 323. ALLOWABLE USES OF FUNDS.
A local educational agency receiving a grant under this chapter shall
use the grant for one or more of the activities described in section
313, except that an agency receiving a grant under this chapter also
may use the grant for the construction of new public school facilities.
CHAPTER 3--GENERAL PROVISIONS
SEC. 331. IMPERMISSIBLE USES OF FUNDS.
No funds received under this subtitle may be used for--
(1) payment of maintenance costs, including routine repairs
classified as current expenditures under State or local law;
(2) stadiums or other facilities primarily used for athletic
contests or exhibitions or other events for which admission is
charged to the general public;
(3) improvement or construction of facilities the purpose of
which is not the education of children, including central
office administration or operations or logistical support
facilities; or
(4) purchasing carbon offsets.
SEC. 332. SUPPLEMENT, NOT SUPPLANT.
A local educational agency receiving a grant under this subtitle
shall use such Federal funds only to supplement and not supplant the
amount of funds that would, in the absence of such Federal funds, be
available for modernization, renovation, repair, and construction of
public school facilities.
SEC. 333. PROHIBITION REGARDING STATE AID.
A State shall not take into consideration payments under this
subtitle in determining the eligibility of any local educational agency
in that State for State aid, or the amount of State aid, with respect
to free public education of children.
SEC. 334. MAINTENANCE OF EFFORT.
(a) In General.--A local educational agency may receive a grant under
this subtitle for any fiscal year only if either the combined fiscal
effort per student or the aggregate expenditures of the agency and the
State involved with respect to the provision of free public education
by the agency for the preceding fiscal year was not less than 90
percent of the combined fiscal effort or aggregate expenditures for the
second preceding fiscal year.
(b) Reduction in Case of Failure To Meet Maintenance of Effort
Requirement.--
(1) In general.--The State educational agency shall reduce
the amount of a local educational agency's grant in any fiscal
year in the exact proportion by which a local educational
agency fails to meet the requirement of subsection (a) by
falling below 90 percent of both the combined fiscal effort per
student and aggregate expenditures (using the measure most
favorable to the local agency).
(2) Special rule.--No such lesser amount shall be used for
computing the effort required under subsection (a) for
subsequent years.
(c) Waiver.--The Secretary shall waive the requirements of this
section if the Secretary determines that a waiver would be equitable
due to--
(1) exceptional or uncontrollable circumstances, such as a
natural disaster; or
(2) a precipitous decline in the financial resources of the
local educational agency.
SEC. 335. SPECIAL RULE ON CONTRACTING.
Each local educational agency receiving a grant under this subtitle
shall ensure that, if the agency carries out modernization, renovation,
repair, or construction through a contract, the process for any such
contract ensures the maximum number of qualified bidders, including
local, small, minority, and women- and veteran-owned businesses,
through full and open competition.
SEC. 336. USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS.
(a) In General.--None of the funds appropriated or otherwise made
available by this subtitle may be used for a project for the
modernization, renovation, repair, or construction of a public school
facility unless all of the iron, steel, and manufactured goods used in
the project are produced in the United States.
(b) Exceptions.--Subsection (a) shall not apply in any case or
category of cases in which the Secretary finds that--
(1) applying subsection (a) would be inconsistent with the
public interest;
(2) iron, steel, and the relevant manufactured goods are not
produced in the United States in sufficient and reasonably
available quantities and of a satisfactory quality; or
(3) inclusion of iron, steel, and manufactured goods produced
in the United States will increase the cost of the overall
project by more than 25 percent.
(c) Publication of Justification.--If the Secretary determines that
it is necessary to waive the application of subsection (a) based on a
finding under subsection (b), the Secretary shall publish in the
Federal Register a detailed written justification of the determination.
(d) Construction.--This section shall be applied in a manner
consistent with United States obligations under international
agreements.
SEC. 337. LABOR STANDARDS.
The grant programs under this subtitle are applicable programs (as
that term is defined in section 400 of the General Education Provisions
Act (20 U.S.C. 1221)) subject to section 439 of such Act (20 U.S.C.
1232b).
SEC. 338. CHARTER SCHOOLS.
(a) In General.--A local educational agency receiving an allocation
under this subtitle shall reserve an amount of that allocation for
charter schools within its jurisdiction for modernization, renovation,
repair, and construction of charter school facilities.
(b) Determination of Reserved Amount.--The amount to be reserved by a
local educational agency under subsection (a) shall be determined based
on the combined percentage of students counted under section 1113(a)(5)
of the Elementary and Secondary Education Act of 1965 (20 U.S.C.
6313(a)(5)) in the schools of the agency who--
(1) are enrolled in charter schools; and
(2) the local educational agency, in consultation with the
authorized public chartering agency, expects to be enrolled,
during the year with respect to which the reservation is made,
in charter schools that are scheduled to commence operation
during such year.
(c) School Share.--Individual charter schools shall receive a share
of the amount reserved under subsection (a) based on the need of each
school for modernization, renovation, repair, or construction, as
determined by the local educational agency in consultation with charter
school administrators.
(d) Excess Funds.--After the consultation described in subsection
(c), if the local educational agency determines that the amount of
funds reserved under subsection (a) exceeds the modernization,
renovation, repair, and construction needs of charter schools within
the local educational agency's jurisdiction, the agency may use the
excess funds for other public school facility modernization,
renovation, repair, or construction consistent with this subtitle and
is not required to carry over such funds to the following fiscal year
for use for charter schools.
SEC. 339. GREEN SCHOOLS.
(a) In General.--Of the funds appropriated for a given fiscal year
and made available to a local educational agency to carry out this
subtitle, the local educational agency shall use not less than the
applicable percentage (described in subsection (b)) of such funds for
public school modernization, renovation, repair, or construction that
are certified, verified, or consistent with any applicable provisions
of--
(1) the LEED Green Building Rating System;
(2) Energy Star;
(3) the CHPS Criteria;
(4) Green Globes; or
(5) an equivalent program adopted by the State, or another
jurisdiction with authority over the local educational agency,
that includes a verifiable method to demonstrate compliance
with such program.
(b) Applicable Percentages.--The applicable percentage described in
subsection (a) is--
(1) for funds appropriated in fiscal year 2010, 50 percent;
and
(2) for funds appropriated in fiscal year 2011, 75 percent.
(c) Rule of Construction.--Nothing in this section shall be construed
to prohibit a local educational agency from using sustainable, domestic
hardwood lumber as ascertained through the forest inventory and
analysis program of the Forest Service of the Department of Agriculture
under the Forest and Rangeland Renewable Resources Research Act of 1978
(16 U.S.C. 1641 et seq.) for public school modernization, renovation,
repairs, or construction.
(d) Technical Assistance.--The Secretary, in consultation with the
Secretary of Energy and the Administrator of the Environmental
Protection Agency, shall provide outreach and technical assistance to
States and local educational agencies concerning the best practices in
school modernization, renovation, repair, and construction, including
those related to student academic achievement, student and staff
health, energy efficiency, and environmental protection.
SEC. 340. REPORTING.
(a) Reports by Local Educational Agencies.--Local educational
agencies receiving a grant under this subtitle shall annually compile a
report describing the projects for which such funds were used,
including--
(1) the number and identity of public schools in the agency,
including the number of charter schools, and for each school,
the total number of students, and the number of students
counted under section 1113(a)(5) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6313(a)(5));
(2) the total amount of funds received by the local
educational agency under this subtitle, and for each public
school in the agency, including each charter school, the amount
of such funds expended, and the types of modernization,
renovation, repair, or construction projects for which such
funds were used;
(3) the number of students impacted by such projects,
including the number of students so impacted who are counted
under section 1113(a)(5) of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6313(a)(5));
(4) the number of public schools in the agency with a metro-
centric locale code of 41, 42, or 43 as determined by the
National Center for Education Statistics and the percentage of
funds received by the agency under chapter 1 or chapter 2 of
this subtitle that were used for projects at such schools;
(5) the number of public schools in the agency that are
eligible for schoolwide programs under section 1114 of the
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6314)
and the percentage of funds received by the agency under
chapter 1 or chapter 2 of this subtitle that were used for
projects at such schools;
(6) for each project--
(A) the cost;
(B) the standard described in section 339(a) with
which the use of the funds complied or, if the use of
funds did not comply with a standard described in
section 339(a), the reason such funds were not able to
be used in compliance with such standards and the
agency's efforts to use such funds in an
environmentally sound manner; and
(C) any demonstrable or expected benefits as a result
of the project (such as energy savings, improved indoor
environmental quality, student and staff health,
including the reduction of the incidence and effects of
asthma and other respiratory illnesses, and improved
climate for teaching and learning); and
(7) the total number and amount of contracts awarded, and the
number and amount of contracts awarded to local, small,
minority, women, and veteran-owned businesses.
(b) Availability of Reports.--A local educational agency shall--
(1) submit the report described in subsection (a) to the
State educational agency, which shall compile such information
and report it annually to the Secretary; and
(2) make the report described in subsection (a) publicly
available, including on the agency's website.
(c) Reports by Secretary.--Not later than March 31 of each fiscal
year, the Secretary shall submit to the Committee on Education and
Labor of the House of Representatives and the Committee on Health,
Education, Labor and Pensions of the Senate, and make available on the
Department of Education's website, a report on grants made under this
subtitle, including the information from the reports described in
subsection (b)(1).
SEC. 341. SPECIAL RULES.
Notwithstanding any other provision of this subtitle, none of the
funds authorized by this subtitle may be--
(1) used to employ workers in violation of section 274A of
the Immigration and Nationality Act (8 U.S.C. 1324a); or
(2) distributed to a local educational agency that does not
have a policy that requires a criminal background check on all
employees of the agency.
SEC. 342. PROMOTION OF EMPLOYMENT EXPERIENCES.
The Secretary of Education, in consultation with the Secretary of
Labor, shall work with recipients of funds under this subtitle to
promote appropriate opportunities to gain employment experience working
on modernization, renovation, repair, and construction projects funded
under this subtitle for--
(1) participants in a YouthBuild program (as defined in
section 173A of the Workforce Investment Act of 1998 (29 U.S.C.
2918a));
(2) individuals enrolled in the Job Corps program carried out
under subtitle C of title I of the Workforce Investment Act of
1998 (29 U.S.C. 2881 et seq.);
(3) individuals enrolled in a junior or community college (as
defined in section 312(f) of the Higher Education Act of 1965
(20 U.S.C. 1088(f))) certificate or degree program relating to
projects described in section 339(a); and
(4) participants in preapprenticeship programs that have
direct linkages with apprenticeship programs that are
registered with the Department of Labor or a State
Apprenticeship Agency under the National Apprenticeship Act of
1937 (29 U.S.C. 50 et seq.).
SEC. 343. ADVISORY COUNCIL ON GREEN, HIGH-PERFORMING PUBLIC SCHOOL
FACILITIES.
(a) Establishment of Advisory Council.--The Secretary shall establish
an advisory council to be known as the ``Advisory Council on Green,
High-Performing Public School Facilities'' (in this section referred to
as the ``Advisory Council'') which shall be composed of--
(1) appropriate officials from the Department of Education;
(2) representatives of the academic, architectural, business,
education, engineering, environmental, labor, and scientific
communities; and
(3) such other representatives as the Secretary deems
appropriate.
(b) Duties of Advisory Council.--
(1) Advisory duties.--The Advisory Council shall advise the
Secretary on the impact of green, high-performing schools, on--
(A) teaching and learning;
(B) health;
(C) energy costs;
(D) environmental impact; and
(E) other areas that the Secretary and the Advisory
Council deem appropriate.
(2) Other duties.--The Advisory Council shall assist the
Secretary in--
(A) making recommendations on Federal policies to
increase the number of green, high-performing schools;
(B) identifying Federal policies that are barriers to
helping States and local educational agencies make
green, high-performing schools;
(C) providing technical assistance and outreach to
States and local educational agencies under section
339(d); and
(D) providing the Secretary such other assistance as
the Secretary deems appropriate.
(c) Consultation.--In carrying out its duties under subsection (b),
the Advisory Council shall consult with the Chair of the Council on
Environmental Quality and the heads of appropriate Federal agencies,
including the Secretary of Commerce, the Secretary of Energy, the
Secretary of Health and Human Services, the Secretary of Labor, the
Administrator of the Environmental Protection Agency, and the
Administrator of the General Services Administration (through the
Office of Federal High-Performance Green Buildings).
SEC. 344. EDUCATION REGARDING PROJECTS.
A local educational agency receiving funds under this subtitle may
encourage schools at which projects are undertaken with such funds to
educate students about the project, including, as appropriate, the
functioning of the project and its environmental, energy,
sustainability, and other benefits.
SEC. 345. AVAILABILITY OF FUNDS.
(a) Chapter 1.--There are authorized to be appropriated, and there
are appropriated, to carry out chapter 1 of this subtitle (in addition
to any other amounts appropriated to carry out such chapter and out of
any money in the Treasury not otherwise appropriated), $2,020,000,000
for each of fiscal years 2010 and 2011.
(b) Chapter 2.--There are authorized to be appropriated, and there
are appropriated, to carry out chapter 2 of this subtitle (in addition
to any other amounts appropriated to carry out such chapter and out of
any money in the Treasury not otherwise appropriated), $30,000,000 for
each of fiscal years 2010 and 2011.
(c) Prohibition on Earmarks.--None of the funds appropriated under
this section may be used for a Congressional earmark as defined in
clause 9(d) of rule XXI of the Rules of the House of Representatives.
Subtitle B--Higher Education
SEC. 351. FEDERAL ASSISTANCE FOR COMMUNITY COLLEGE MODERNIZATION AND
CONSTRUCTION.
(a) In General.--
(1) Grant program.--From the amounts made available under
subsection (i), the Secretary shall award grants to States for
the purposes of constructing new community college facilities
and modernizing, renovating, and repairing existing community
college facilities. Grants awarded under this section shall be
used by a State for one or more of the following:
(A) To reduce financing costs of loans for new
construction, modernization, renovation, or repair
projects at community colleges (such as paying interest
or points on such loans).
(B) To provide matching funds for a community college
capital campaign to attract private donations of funds
for new construction, modernization, renovation, or
repair projects at the community college.
(C) To capitalize a revolving loan fund to finance
new construction, modernization, renovation, and repair
projects at community colleges.
(2) Allocation.--
(A) Determination of available amount.--The Secretary
shall determine the amount available for allocation to
each State by determining the amount equal to the total
number of students in the State who are enrolled in
community colleges and who are pursuing a degree or
certificate that is not a bachelor's, master's,
professional, or other advanced degree, relative to the
total number of such students in all States, combined.
(B) Allocation.--The Secretary shall allocate to each
State selected by the Secretary to receive a grant
under this section an amount equal to the amount
determined to be available for allocation to such State
under subparagraph (A), less any portion of that amount
that is subject to a limitation under paragraph (3).
(C) Reallocation.--Amounts not allocated under this
section to a State because--
(i) the State did not submit an application
under subsection (b);
(ii) the State submitted an application that
the Secretary determined did not meet the
requirements of such subsection; or
(iii) the State is subject to a limitation
under paragraph (3) that prevents the State
from using a portion of the allocation,
shall be proportionately reallocated under this
paragraph to the States that are not described in
clause (i), (ii), or (iii) of this subparagraph.
(3) Grant amount limitations.--A grant awarded to a State
under this section--
(A) to reduce financing costs of loans for new
construction, modernization, renovation, or repair
projects at community colleges under paragraph (1)(A)
shall be for an amount that is not more than 25 percent
of the total principal amount of the loans for which
financing costs are being reduced; and
(B) to provide matching funds for a community college
capital campaign under paragraph (1)(B) shall be for an
amount that is not more than 25 percent of the total
amount of the private donations of funds raised through
such campaign over the duration of such campaign, as
such duration is determined by the State in the
application submitted under subsection (b).
(4) Supplement, not supplant.--Funds made available under
this section shall be used to supplement, and not supplant,
other Federal, State, and local funds that would otherwise be
expended to construct new community college facilities or
modernize, renovate, or repair existing community college
facilities.
(b) Application.--A State that desires to receive a grant under this
section shall submit an application to the Secretary at such time, in
such manner, and containing such information and assurances as the
Secretary may require. Such application shall include a certification
by the State that the funds provided under this section for the
construction of new community college facilities and the modernization,
renovation, and repair of existing community college facilities will
improve instruction at such colleges and will improve the ability of
such colleges to educate and train students to meet the workforce needs
of employers in the State.
(c) Use of Funds by Community Colleges.--
(1) Permissible uses of funds.--Funds made available to
community colleges through a loan described in subsection
(a)(1)(A), a capital campaign described in subsection
(a)(1)(B), or a loan from a revolving loan fund described in
subsection (a)(1)(C) shall be used only for the construction,
modernization, renovation, or repair of community college
facilities that are primarily used for instruction, research,
or student housing, which may include any of the following:
(A) Repair, replacement, or installation of roofs,
including extensive, intensive, or semi-intensive green
roofs, electrical wiring, water supply and plumbing
systems, sewage systems, storm water runoff systems,
lighting systems, building envelope, windows, ceilings,
flooring, or doors, including security doors.
(B) Repair, replacement, or installation of heating,
ventilation, or air conditioning systems, including
insulation, and conducting indoor air quality
assessments.
(C) Compliance with fire, health, seismic, and safety
codes, including professional installation of fire and
life safety alarms, and modernizations, renovations,
and repairs that ensure that the community college's
facilities are prepared for emergencies, such as
improving building infrastructure to accommodate
security measures and installing or upgrading
technology to ensure that the community college is able
to respond to emergencies such as acts of terrorism,
campus violence, and natural disasters.
(D) Retrofitting necessary to increase the energy
efficiency of the community college's facilities.
(E) Modifications necessary to make facilities
accessible in compliance with the Americans with
Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) and
section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794).
(F) Abatement, removal, or interim controls of
asbestos, polychlorinated biphenyls, mold, mildew, or
lead-based hazards, including lead-based paint hazards
from the community college's facilities.
(G) Modernization, renovation, or repair necessary to
reduce the consumption of coal, electricity, land,
natural gas, oil, or water.
(H) Modernization, renovation, and repair relating to
improving science and engineering laboratories,
libraries, or instructional facilities.
(I) Installation or upgrading of educational
technology infrastructure.
(J) Installation or upgrading of renewable energy
generation and heating systems, including solar,
photovoltaic, wind, biomass (including wood pellet and
woody biomass), waste-to-energy, solar-thermal and
geothermal systems, and energy audits.
(K) Other modernization, renovation, or repair
projects that are primarily for instruction, research,
or student housing.
(L) Required environmental remediation related to
modernization, renovation, or repair described in
subparagraphs (A) through (K).
(2) Green school requirement.--A community college receiving
assistance through a loan described in subsection (a)(1)(A), a
capital campaign described in subsection (a)(1)(B), or a loan
from a revolving loan fund described in subsection (a)(1)(C)
shall use not less than 50 percent of such assistance to carry
out projects for construction, modernization, renovation, or
repair that are certified, verified, or consistent with the
applicable provisions of--
(A) the LEED Green Building Rating System;
(B) Energy Star;
(C) the CHPS Criteria, as applicable;
(D) Green Globes; or
(E) an equivalent program adopted by the State or the
State higher education agency that includes a
verifiable method to demonstrate compliance with such
program.
(3) Prohibited uses of funds.--
(A) In general.--No funds awarded under this section
may be used for--
(i) payment of maintenance costs;
(ii) construction, modernization, renovation,
or repair of stadiums or other facilities
primarily used for athletic contests or
exhibitions or other events for which admission
is charged to the general public; or
(iii) construction, modernization,
renovation, or repair of facilities--
(I) used for sectarian instruction,
religious worship, or a school or
department of divinity; or
(II) in which a substantial portion
of the functions of the facilities are
subsumed in a religious mission.
(B) Four-year institutions.--No funds awarded to a
four-year public institution of higher education under
this section may be used for any facility, service, or
program of the institution that is not available to
students who are pursuing a degree or certificate that
is not a bachelor's, master's, professional, or other
advanced degree.
(d) Application of GEPA.--The grant program authorized in this
section is an applicable program (as that term is defined in section
400 of the General Education Provisions Act (20 U.S.C. 1221)) subject
to section 439 of such Act (20 U.S.C. 1232b). The Secretary shall,
notwithstanding section 437 of such Act (20 U.S.C. 1232) and section
553 of title 5, United States Code, establish such program rules as may
be necessary to implement such grant program by notice in the Federal
Register.
(e) Concurrent Funding.--Funds made available under this section
shall not be used to assist any community college that receives funding
for the construction, modernization, renovation, and repair of
facilities under any other program under this Act, the Higher Education
Act of 1965, or the American Recovery and Reinvestment Act of 2009.
(f) Reports by the States.--Each State that receives a grant under
this section shall, not later than September 30, 2012, and annually
thereafter for each fiscal year in which the State expends funds
received under this section, submit to the Secretary a report that
includes--
(1) a description the projects for which the grant funding
was, or will be, used;
(2) a list of the community colleges that have received, or
will receive, assistance from the grant through a loan
described in subsection (a)(1)(A), a capital campaign described
in subsection (a)(1)(B), or a loan from a revolving loan fund
described in subsection (a)(1)(C); and
(3) a description of the amount and nature of the assistance
provided to each such college.
(g) Report by the Secretary.--The Secretary shall submit to the
authorizing committees (as defined in section 103 of the Higher
Education Act of 1965) an annual report on the grants made under this
section, including the information described in subsection (f).
(h) Definitions.--
(1) Community college.--As used in this section, the term
``community college'' means--
(A) a junior or community college, as such term is
defined in section 312(f) of the Higher Education Act
of 1965 (20 U.S.C. 1085(f)); or
(B) a four-year public institution of higher
education (as defined in section 101 of the Higher
Education Act of 1965) that awards a significant number
of degrees and certificates that are not--
(i) bachelor's degrees (or an equivalent); or
(ii) master's, professional, or other
advanced degrees.
(2) CHPS criteria.--The term ``CHPS Criteria'' means the
green building rating program developed by the Collaborative
for High Performance Schools.
(3) Energy star.--The term ``Energy Star'' means the Energy
Star program of the United States Department of Energy and the
United States Environmental Protection Agency.
(4) Green globes.--The term ``Green Globes'' means the Green
Building Initiative environmental design and rating system
referred to as Green Globes.
(5) Leed green building rating system.--The term ``LEED Green
Building Rating System'' means the United States Green Building
Council Leadership in Energy and Environmental Design green
building rating standard referred to as the LEED Green Building
Rating System.
(6) Secretary.--The term ``Secretary'' means the Secretary of
Education.
(7) State.--The term ``State'' has the meaning given such
term in section 103 of the Higher Education Act of 1965 (20
U.S.C. 1003).
(i) Availability of Funds.--There are authorized to be appropriated,
and there are appropriated, to carry out this section (in addition to
any other amounts appropriated to carry out this section and out of any
money in the Treasury not otherwise appropriated), $2,500,000,000 for
fiscal year 2011, which shall remain available until expended.
TITLE IV--EARLY LEARNING CHALLENGE FUND
SEC. 401. PURPOSE.
The purpose of this title is to provide grants on a competitive basis
to States for the following:
(1) To promote standards reform of State early learning
programs serving children from birth through age 5 in order to
support the healthy development and improve the school
readiness outcomes of young children.
(2) To establish a high standard of quality in early learning
programs that integrates appropriate early learning and
development standards across early learning settings.
(3) To fund and implement quality initiatives that improve
the skills and effectiveness of early learning providers, and
improve the quality of existing early learning programs, in
order to increase the number of disadvantaged children who
participate in comprehensive and high-quality early learning
programs.
(4) To ensure that a greater number of disadvantaged children
enter kindergarten with the cognitive, social, emotional, and
physical skills and abilities needed to be successful in
school.
(5) To increase parents' abilities to access comprehensive
and high quality early learning programs across settings for
their children.
SEC. 402. PROGRAMS AUTHORIZED.
(a) Quality Pathways Grants.--The Secretary shall use funds made
available to carry out this title for a fiscal year to award grants on
a competitive basis to States in accordance with section 403.
(b) Development Grants.--The Secretary shall use funds made available
to carry out this title for a fiscal year to award grants in accordance
with section 404 on a competitive basis to States that demonstrate a
commitment to establishing a system of early learning that will include
the components described in section 403(c)(3) but are not--
(1) eligible to be awarded a grant under subsection (a); or
(2) are not awarded such a grant after application.
(c) Reservations of Federal Funds.--
(1) Research, evaluation, and administration.--From the
amount made available to carry out this title for a fiscal
year, the Secretary--
(A) shall reserve up to 2 percent jointly to
administer this title with the Secretary of Health and
Human Services; and
(B) shall reserve up to 3 percent to carry out
activities under section 405.
(2) Tribal school readiness planning demonstration.--After
making the reservations under paragraph (1), the Secretary
shall reserve 0.25 percent for a competitive grant program for
Indian tribes to develop and implement school readiness plans
that--
(A) are coordinated with local educational agencies
serving children who are members of the tribe; and
(B) include American Indian and Alaska Native Head
Start and Early Head Start programs, tribal child care
programs, Indian Health Service programs, and other
tribal programs serving children.
(3) Quality pathways grants.--
(A) In general.--From the amount made available to
carry out this title for a fiscal year and not reserved
under paragraph (1) or (2), the Secretary shall reserve
a percent (which shall be not greater than 65 percent
for fiscal years 2010 through 2012 and not greater than
85 percent for fiscal year 2013 and each succeeding
fiscal year) determined under subparagraph (B) to carry
out subsection (a).
(B) Determination of amount.--In determining the
amount to reserve under subparagraph (A), the
Secretary, consistent with section 403(e), shall take
into account the following:
(i) The total number of States determined by
the Secretary to qualify for receipt of a grant
under this title for the year.
(ii) The number of children under age 5 from
low-income families in each State with an
approved application under section 403 for the
year.
(C) Reallocation.--For fiscal year 2013 and
subsequent fiscal years, the Secretary may reallocate
funds allocated for development grants under subsection
(b) for the purpose of providing additional grants
under subsection (a), if the Secretary determines that
there is an insufficient number of applications that
meet the requirements for a grant under subsection (b).
(d) State Applications.--In applying for a grant under this title, a
State--
(1) shall designate a State-level entity for administration
of the grant;
(2) shall coordinate proposed activities with the State
Advisory Council on Early Childhood Education and Care
(established pursuant to section 642B(b)(1)(A) of the Head
Start Act (42 U.S.C. 9837b(b)(1)(A))) and shall incorporate
plans and recommendations from such Council in the application,
where applicable; and
(3) otherwise shall submit the application to the Secretary
at such time, in such manner, and containing such information
as the Secretary may reasonably require.
(e) Priority in Awarding Grants.--In awarding grants under this
title, the Secretary shall give priority to States--
(1) whose applications contain assurances that the State will
use, in part, funds reserved under section 658G of the Child
Care and Development Block Grant Act of 1990 (42 U.S.C. 9858e)
for activities described in section 403(f);
(2) that will commit to dedicating a significant increase, in
comparison to recent fiscal years, in State expenditures on
early learning programs and services; and
(3) that demonstrate efforts to build public-private
partnerships designed to accomplish the purposes of this title.
(f) Maintenance of Effort.--
(1) In general.--With respect to each period for which a
State is awarded a grant under this title, the aggregate
expenditures by the State and its political subdivisions on
early learning programs and services shall be not less than the
level of the expenditures for such programs and services by the
State and its political subdivisions for fiscal year 2006.
(2) State expenditures.--For purposes of paragraph (1),
expenditures by the State on early learning programs and
services shall include, at a minimum, the following:
(A) State matching and maintenance of effort funds
for the Child Care and Development Block Grant Act of
1990 (42 U.S.C. 9858 et seq.).
(B) State matching funds for the State Advisory
Council on Early Childhood Education and Care
(established pursuant to section 642B(b)(1)(A) of the
Head Start Act (42 U.S.C. 9837b(b)(1)(A))).
(C) State expenditures on public pre-kindergarten,
Head Start (including Early Head Start), and other
State early learning programs and services dedicated to
children (including State expenditures under part C of
the Individuals with Disabilities Education Act (20
U.S.C. 1431 et seq.)).
(g) Prohibitions on Use of Funds.--Funds under this title may not be
used for any of the following:
(1) Assessments that provide rewards or sanctions for
individual children or teachers.
(2) A single assessment used as the primary or sole method
for assessing program effectiveness.
(3) Evaluating children other than for--
(A) improving instruction or classroom environment;
(B) targeting professional development;
(C) determining the need for health, mental health,
disability, or family support services;
(D) informing the quality improvement process at the
State level;
(E) program evaluation for the purposes of program
improvement and parent information; or
(F) research conducted as part of the national
evaluation required by section 405(2).
(h) Federal Administration.--
(1) In general.--With respect to this title, the Secretary
shall bear responsibility for obligating and disbursing funds
and ensuring compliance with applicable laws and administrative
requirements, subject to paragraph (2).
(2) Interagency agreement.--The Secretary of Education and
the Secretary of Health and Human Services shall jointly
administer this title on such terms as such secretaries shall
set forth in an interagency agreement.
SEC. 403. QUALITY PATHWAYS GRANTS.
(a) Grant Period.--Grants under section 402(a)--
(1) may be awarded for a period not to exceed 5 years; and
(2) may be renewed, subject to approval by the Secretary, and
based on the State's progress in--
(A) increasing the percentage of disadvantaged
children in each age group (infants, toddlers, and
preschoolers) who participate in high-quality early
learning programs;
(B) increasing the number of high-quality early
learning programs in low-income communities;
(C) implementing an early learning system that
includes the components described in subsection (c)(3);
and
(D) incorporating the findings and recommendations
reported by the commission established under section
405(1) into the State system of early learning.
(b) Matching Requirement.--
(1) In general.--Subject to subsection (g), to be eligible to
receive a grant under section 402(a), a State shall contribute
to the activities assisted under the grant non-Federal matching
funds in an amount equal to not less than the applicable
percent of the amount of the grant.
(2) Applicable percent.--For purposes of paragraph (1), the
applicable percent means--
(A) 10 percent in the first fiscal year of the grant;
(B) 10 percent in the second fiscal year of the
grant;
(C) 15 percent in the third fiscal year of the grant;
and
(D) 20 percent in the fourth fiscal year of the grant
and subsequent fiscal years.
(3) Non-federal funds.--A State may use the following to
satisfy the requirement of paragraph (1):
(A) Cash.
(B) In-kind contributions for the acquisition,
construction, or improvement of early learning program
facilities serving disadvantaged children.
(C) Technical assistance related to subparagraph (B).
(4) Private contributions.--Private contributions made as
part of public-private partnerships to increase the number of
low-income children in high-quality early learning programs in
a State may be used by the State to satisfy the requirement of
paragraph (1).
(5) Financial hardship waiver.--The Secretary may waive or
reduce the non-Federal share of a State that has submitted an
application for a grant under section 402(a) if the State
demonstrates a need for such waiver or reduction due to extreme
financial hardship, as defined by the Secretary by regulation.
(c) State Applications.--In order to be considered for a grant under
section 402(a), a State's application under section 402(d) shall
include the following:
(1) A description of how the State will use the grant to
implement quality initiatives to improve early learning
programs serving disadvantaged children from birth to age 5 to
lead to a greater percentage of such children participating in
higher quality early learning programs.
(2) A description of the goals and benchmarks the State will
establish to lead to a greater percentage of disadvantaged
children participating in higher quality early learning
programs to improve school readiness outcomes, including an
established baseline of the number of disadvantaged children in
high-quality early learning programs.
(3) A description of how the State will implement a
governance structure and a system of early learning programs
and services that includes the following components:
(A) Not later than 12 months after receiving notice
of an award of the grant, complete State early learning
and development standards that include social and
emotional, cognitive, and physical development domains,
and approaches to learning that are developmentally
appropriate (including culturally and linguistically
appropriate) for all children.
(B) A process to ensure that State early learning and
development standards are integrated into the
instructional and programmatic practices of early
learning programs and services, including services
provided to children under section 619 and part C of
the Individuals with Disabilities Education Act (20
U.S.C. 1419, 1431 et seq.).
(C) A program rating system that builds on licensing
requirements, as appropriate, and other State
regulatory standards and that--
(i) is designed to improve quality and
effectiveness across different types of early
learning settings;
(ii) integrates evidence-based program
quality standards that reflect standard levels
of quality and has progressively higher levels
of program quality;
(iii) integrates the State's early learning
and development standards for the purpose of
improving instructional and programmatic
practices;
(iv) addresses quality and effective
inclusion of children with disabilities or
developmental delays across different types of
early learning settings;
(v) addresses staff qualifications and
professional development;
(vi) provides financial incentives and other
supports to help programs meet and sustain
higher levels of quality;
(vii) includes mechanisms for evaluating how
programs are meeting those standards and
progressively higher levels of quality; and
(viii) includes a mechanism for public
awareness and understanding of the program
rating system, including rating levels of
individual programs.
(D) A system of program review and monitoring that is
designed to rate providers using the system described
in subparagraph (C) and to assess and improve
programmatic practices, instructional practices, and
classroom environment.
(E) A process to support early learning programs
integrating instructional and programmatic practices
that--
(i) include developmentally appropriate
(including culturally and linguistically
appropriate), ongoing, classroom-based
instructional assessments for each domain of
child development and learning (including
social and emotional, cognitive, and physical
development domains and approaches to learning)
to guide and improve instructional practice,
professional development of staff, and
services; and
(ii) are aligned with the curricula used in
the early learning program and with the State
early learning and development standards or the
Head Start Child Outcomes Framework (as
described in the Head Start Act), as
applicable.
(F) Minimum preservice early childhood development
and education training requirements for providers in
early learning programs.
(G) A comprehensive plan for supporting the
professional preparation and the ongoing professional
development of an effective, well-compensated early
learning workforce, which plan includes training and
education that is sustained, intensive, and classroom-
focused and leads toward a credential or degree and is
tied to improved compensation.
(H) An outreach strategy to promote understanding by
parents and families of--
(i) how to support their child's early
development and learning;
(ii) the State's program rating system, as
described in subparagraph (C); and
(iii) the rating of the program in which
their child is enrolled.
(I) A coordinated system to facilitate screening,
referral, and provision of services related to health,
mental health, disability, and family support for
children participating in early learning programs.
(J) A process for evaluating school readiness in
children that reflects all of the major domains of
development, and that is used to guide practice and
improve early learning programs.
(K) A coordinated data infrastructure that
facilitates--
(i) uniform data collection about the quality
of early learning programs, essential
information about the children and families
that participate in such programs, and the
qualifications and compensation of the early
learning workforce in such programs; and
(ii) alignment and interoperability between
the data system for early learning programs for
children and data systems for elementary and
secondary education.
(4) A description of how the funds provided under the grant
will be targeted to prioritize increasing the number and
percentage of low-income children in high-quality early
learning programs, including children--
(A) in each age group (infants, toddlers, and
preschoolers);
(B) with developmental delays and disabilities;
(C) with limited English proficiency; and
(D) living in rural areas.
(5) An assurance that the grant will be used to improve the
quality of early learning programs across a range of types of
settings and providers of such programs.
(6) A description of the steps the State will take to make
progress toward including all center-based child care programs,
family child care programs, State-funded prekindergarten, Head
Start programs, and other early learning programs, such as
those funded under title I of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6301 et seq.) or receiving
funds under section 619 or part C of the Individuals with
Disabilities Education Act (20 U.S.C. 1419, 1431 et seq.) in
the State program rating system described in paragraph (3)(C).
(7) An assurance that the State, not later than 18 months
after receiving notice of an award of the grant, will conduct
an analysis of the alignment of the State's early learning and
development standards with--
(A) appropriate academic content standards for grades
kindergarten through 3; and
(B) elements of program quality standards for early
learning programs.
(8) An assurance that the grant will be used only to
supplement, and not to supplant, Federal, State, and local
funds otherwise available to support existing early learning
programs and services.
(9) A description of any disparity by age group (infants,
toddlers, and preschoolers) of available high-quality early
learning programs in low-income communities and the steps the
State will take to decrease such disparity, if applicable.
(10) A description of how the State early learning and
development standards will address the needs of children with
limited English proficiency, including by incorporating
benchmarks related to English language development.
(11) A description of how the State's professional
development plan will prepare the early learning workforce to
support the early learning needs of children with limited
English proficiency.
(12) A description of how the State will improve interagency
collaboration and coordinate the purposes of this title with
the activities funded under--
(A) section 658G of the Child Care and Development
Block Grant Act of 1990 (42 U.S.C. 9858e);
(B) section 619 and part C of the Individuals with
Disabilities Education Act (20 U.S.C. 1419, 1431 et
seq.);
(C) title I of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 6301 et seq.);
(D) State-funded pre-kindergarten programs (where
applicable);
(E) Head Start programs; and
(F) other early childhood programs and services.
(13) A description of how the State's early learning
policies, including child care policies, facilitate access to
high-quality early learning programs for children from low-
income families.
(14) An assurance that the State will continue to participate
in part C of the Individuals with Disabilities Education Act
(20 U.S.C. 1431 et seq.) for the duration of the grant.
(d) Criteria Used in Awarding Grants.--In awarding grants under
section 402(a), the Secretary shall evaluate the applications, and
award grants under such section on a competitive basis, based on--
(1) the quality of the application submitted pursuant to
section 402(d);
(2) the priority factors described in section 402(e);
(3) evidence of significant progress in establishing a system
of early learning for children that includes the components
described in subsection (c)(3); and
(4) the State's capacity to fully complete implementation of
such a system.
(e) Criterion Used in Determining Amount of Award.--In determining
the amount to award a State under section 402(a), the Secretary shall
take into account--
(1) the proportion of children under age 5 from low-income
families in the State relative to such proportion in other
States; and
(2) the State plan and capacity to implement the criteria
described in paragraphs (3) and (4) of subsection (d).
(f) State Uses of Funds.--
(1) In general.--A State receiving a grant under section
402(a) shall use the grant as follows:
(A) Not less than 65 percent of the grant amount
shall be used for two or more of the following
activities to improve the quality of early learning
programs serving disadvantaged children:
(i) Initiatives that improve the credentials
of early learning providers and are tied to
increased compensation.
(ii) Initiatives that help early learning
programs meet and sustain higher program
quality standards, such as--
(I) improving the ratio of early
learning provider to children in early
learning settings;
(II) reducing group size;
(III) improving the qualifications of
early learning providers; and
(IV) supporting effective education
and training for early learning
providers.
(iii) Implementing classroom observation
assessments and data-driven decisions (which
may include implementation of a research-based
prevention and intervention framework designed
to build social competence and prevent
challenging behaviors) tied to activities that
improve instructional practices, programmatic
practices, or classroom environment and promote
school readiness.
(iv) Providing financial incentives to early
learning programs--
(I) for undertaking quality
improvements that promote healthy
development and school readiness; and
(II) maintaining quality improvements
that promote healthy development and
school readiness.
(v) Integrating State early learning and
development standards into instructional and
programmatic practices in early learning
programs.
(vi) Providing high-quality, sustained,
intensive, and classroom-focused professional
development that improves the knowledge and
skills of early learning providers, including
professional development related to meeting the
needs of diverse populations.
(vii) Building the capacity of early learning
programs and communities to promote the
understanding of parents and families of the
State's early learning system and the rating of
the program in which their child is enrolled
and to encourage the active involvement and
engagement of parents and families in the
learning and development of their children.
(viii) Building the capacity of early
learning programs and communities to facilitate
screening, referral, and provision of services
related to health, mental health, disability,
and family support for children participating
in early learning programs.
(ix) Other innovative activities, proposed by
the State and approved in advance by the
Secretary that are--
(I) based on successful practices;
(II) designed to improve the quality
of early learning programs and
services; and
(III) advance the system components
described in subsection (c)(3).
(B) The remainder of the grant amount may be used for
one or more of the following:
(i) Implementation or enhancement of the
State's data system described in subsection
(c)(3)(K), including interoperability across
agencies serving children, and unique child and
program identifiers.
(ii) Enhancement of the State's oversight
system for early learning programs, including
the implementation of a program rating system.
(iii) The development and implementation of
measures of school readiness of children that
reflect all of the major domains of child
development and that inform the quality
improvement process.
(2) Priority.--A State receiving a grant under section 402(a)
shall use the grant so as to prioritize improving the quality
of early learning programs serving children from low-income
families.
(g) Special Rule.--
(1) In general.--Beginning with the second fiscal year of a
grant under section 402(a), a State with respect to which the
Secretary certifies that the State has made sufficient progress
in implementing the requirements of the grant may apply to the
Secretary to reserve up to 25 percent of the amount of the
grant to expand access for children from low-income families to
the highest quality early learning programs that offer full-day
services, except that the State must agree to contribute for
such purpose non-Federal matching funds in an amount equal to
not less than 20 percent of the amount reserved under this
subsection. One-half of such non-Federal matching funds may be
provided by a private entity.
(2) Non-federal funds.--A State may use the following to
satisfy the matching requirement of paragraph (1):
(A) Cash.
(B) In-kind contributions for the acquisition,
construction, or improvement of early learning program
facilities serving disadvantaged children.
(C) Technical assistance related to subparagraph (B).
(3) Financial hardship waiver.--The Secretary may waive or
reduce the non-Federal share of a State under paragraph (1) if
the State demonstrates a need for such waiver or reduction due
to extreme financial hardship, as defined by the Secretary by
regulation.
(h) Improvement Plan.--If the Secretary determines that a State
receiving a grant under section 402(a) is encountering barriers to
reaching goals described in subsection (c)(2), the State shall develop
a plan for improvement in consultation with, and subject to approval
by, the Secretary.
SEC. 404. DEVELOPMENT GRANTS.
(a) Grant Period.--Grants under section 402(b) may be awarded for a
period not to exceed 3 years, and may not be renewed.
(b) State Uses of Funds.--
(1) In general.--A State receiving a grant under section
402(b) shall use the grant to undertake activities to develop
the early learning system components described in section
403(c)(3) and that will allow a State to become eligible and
competitive for a grant described in section 402(a).
(2) Priority.--A State receiving a grant under section 402(b)
shall use the grant so as to prioritize improving the quality
of early learning programs serving low-income children.
(c) Matching Requirement.--
(1) In general.--To be eligible to receive a grant under
section 402(b), a State shall contribute to the activities
assisted under the grant non-Federal matching funds in an
amount equal to not less than the applicable percent of the
amount of the grant.
(2) Applicable percent.--For purposes of paragraph (1), the
applicable percent means--
(A) 20 percent in the first fiscal year of the grant;
(B) 25 percent in the second fiscal year of the
grant; and
(C) 30 percent in the third fiscal year of the grant.
(3) Non-federal funds.--A State may use the following to
satisfy the requirement of paragraph (1):
(A) Cash.
(B) In-kind contributions for the acquisition,
construction, or improvement of early learning program
facilities serving disadvantaged children.
(C) Technical assistance related to subparagraph (B).
(4) Private contributions.--Private contributions made as
part of public-private partnerships to increase the number of
low-income children in high-quality early learning programs in
a State may be used by the State to satisfy the requirement of
paragraph (1).
(5) Financial hardship waiver.--The Secretary may waive or
reduce the non-Federal share of a State that has submitted an
application for a grant under section 402(b) if the State
demonstrates a need for such waiver or reduction due to extreme
financial hardship, as defined by the Secretary by regulation.
SEC. 405. RESEARCH AND EVALUATION.
From funds reserved under section 402(c)(1), the Secretary of
Education and the Secretary of Health and Human Services, acting
jointly, shall carry out the following activities:
(1) Establishing a national commission whose duties shall
include--
(A) reviewing the status of State and Federal early
learning program quality standards and early learning
and development standards;
(B) recommending benchmarks for program quality
standards and early learning and development standards,
including taking into consideration the school
readiness needs of children with limited English
proficiency; and
(C) reporting to the Secretaries of Education and
Health and Human Services not later than 2 years after
the date of the enactment of this Act on the
commission's findings and recommendations.
(2) Conducting a national evaluation of the grants made under
this title through the Institute of Education Science in
collaboration with the appropriate research divisions within
the Department of Health and Human Services.
(3) Supporting a research collaborative among the Institute
of Education Sciences, the National Institute of Child Health
and Human Development, the Office of Planning, Research, and
Evaluation within the Administration for Children and Families
in the Department of Health and Human Services, and, as
appropriate, other Federal entities to support research on
early learning that can inform improved State and other
standards and licensing requirements and improved child
outcomes, which collaborative shall--
(A) biennially prepare and publish for public comment
a detailed research plan;
(B) support early learning research activities that
could include determining--
(i) the characteristics of early learning
programs that produce positive developmental
outcomes for children;
(ii) the effects of program quality standards
on child outcomes;
(iii) the relationships between specific
interventions and types of child and family
outcomes;
(iv) the effectiveness of early learning
provider training in raising program quality
and improving child outcomes;
(v) the effectiveness of professional
development strategies in raising program
quality and improving child outcomes; and
(vi) how to improve the school readiness
outcomes of children with limited English
proficiency, special needs, and homeless
children, including evaluation of professional
development programs for working with such
children; and
(C) disseminate relevant research findings and best
practices.
(4) Evaluating barriers to improving the quality of early
learning programs serving low-income children, including
evaluating barriers to successful interagency collaboration and
coordination, by conducting a review of the statewide strategic
reports developed by the State Advisory Councils on Early Care
and Education and other relevant reports, reporting the
findings of such review to Congress, and disseminating relevant
research findings and best practices.
SEC. 406. REPORTING REQUIREMENTS.
(a) Reports to Congress.--For each year in which funding is provided
under this title, the Secretary shall submit an annual report to the
Committee on Education and Labor of the House of Representatives and
the Committee on Health, Education, Labor and Pensions of the Senate on
the activities carried out under this title, including, at a minimum,
information on the following:
(1) The activities undertaken by States to increase the
availability of high-quality early learning programs.
(2) The number of children in high-quality early learning
programs, and the change from the prior year, disaggregated by
State, age, and race.
(3) The number of early learning providers enrolled, with
assistance from funds under this title, in a program to obtain
a credential or degree in early childhood education and the
settings in which such providers work.
(4) A summary of State progress in implementing a system of
early learning with the components described in section
403(c)(3).
(5) A summary of the research activities being conducted
under section 405 and the findings of such research.
(b) Reports to Secretary.--Each State that receives a grant under
this title shall submit to the Secretary an annual report that
includes, at a minimum, information on the activities carried out by
the State under this title, including the following:
(1) The progress on fully implementing and integrating into a
system of early learning each of the components described in
section 403(c)(3).
(2) The State's progress in meeting its goals for increasing
the number of disadvantaged children participating in high-
quality early learning programs, disaggregated by child age.
(3) The number and percentage of disadvantaged children
participating in early learning programs at each level of
quality, disaggregated by race, family income, child age,
disability, and limited English proficiency status.
(4) The number of providers participating in the State
quality rating system, disaggregated by setting, rating, and
the number of high-quality providers available in low-income
communities.
(5) Information on how the funds provided under this title
were used to increase the availability of high-quality early
learning programs for each age group, disaggregated by race and
limited English proficient status, to the maximum extent
practicable.
(6) Information on professional development and training
expenditures, including--
(A) the number of early learning providers engaged in
such activities; and
(B) the number of early learning providers enrolled
in programs to obtain a credential or degree in early
childhood education, disaggregated by the type of
credential and degree.
(7) The change in the number and percentage of early learning
providers with appropriate credentials or degrees in early
childhood education, including the change in compensation given
to such providers, in comparison to the prior fiscal year,
disaggregated by early learning setting and the type of
credential or degree.
(8) In the case of a State receiving a grant under section
402(a), the percentage of children receiving assistance under
the Child Care and Development Block Grant Act of 1990 (42
U.S.C. 9858 et seq.) who participate in the highest quality
early learning programs, disaggregated by program setting and
child age.
(9) Barriers to expanding access to high-quality early
learning programs for disadvantaged children.
SEC. 407. CONSTRUCTION.
Nothing in this title--
(1) shall be construed to require a child to participate in
an early learning program; or
(2) shall be used to deny entry to kindergarten for any
individual if the individual is legally eligible, as defined by
State or local law.
SEC. 408. DEFINITIONS.
For purposes of this title:
(1) Child.--The term ``child'' refers to an individual from
birth through the day the individual enters kindergarten.
(2) Disadvantaged.--The term ``disadvantaged'', when used
with respect to a child, means a child whose family income is
described in section 658P(4)(B) of the Child Care and
Development Block Grant Act of 1990 (42 U.S.C. 9858n(4)(B)).
(3) Indian tribe.--The term ``Indian tribe'' has the meaning
given such term in section 637 of the Head Start Act (42 U.S.C.
9832).
(4) Limited english proficient.--The term ``limited English
proficient'' has the meaning given such term in section 637 of
the Head Start Act (42 U.S.C. 9832).
(5) Secretary.--The term ``Secretary'' means the Secretary of
Education.
(6) State.--The term ``State'' has the meaning given such
term in section 9101 of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 7801).
SEC. 409. AVAILABILITY OF FUNDS.
There are authorized to be appropriated, and there are appropriated,
to carry out this title (in addition to any other amounts appropriated
to carry out this title and out of any money in the Treasury not
otherwise appropriated) $1,000,000,000 for each of fiscal years 2010
through 2017.
TITLE V--AMERICAN GRADUATION INITIATIVE
SEC. 501. AUTHORIZATION AND APPROPRIATION.
(a) Authorization and Appropriation.--There are authorized to be
appropriated, and there are appropriated, to carry out this title (in
addition to any other amounts appropriated to carry out this title and
out of any money in the Treasury not otherwise appropriated),
$730,000,000 for each of the fiscal years 2010 through 2013, and
$680,000,000 for each of the fiscal years 2014 through 2019.
(b) Allocations.--Of the amount appropriated under subsection (a)--
(1) $630,000,000 shall be made available for each of the
fiscal years 2010 through 2013 to carry out section 503;
(2) $630,000,000 shall be made available for each of the
fiscal years 2014 through 2019 to carry out section 504;
(3) $50,000,000 shall be made available for each of the
fiscal years 2010 through 2019 to carry out subsection (a) of
section 505; and
(4) $50,000,000 shall be made available for each of the
fiscal years 2010 through 2013 to carry out subsections (b) and
(c) of section 505.
(c) Responsibility.--
(1) In general.--With respect to sections 503 and 504, the
Secretary of Education shall bear the responsibility for
obligating and disbursing funds under such sections and
ensuring compliance with applicable law and administrative
requirements, subject to paragraph (2).
(2) Interagency agreement.--The Secretary of Education and
the Secretary of Labor shall jointly administer sections 503
and 504 on such terms as such Secretaries shall set forth in an
interagency agreement.
SEC. 502. DEFINITIONS; GRANT PRIORITY.
(a) Definitions.--In this title:
(1) Area career and technical education school.--The term
``area career and technical education school'' has the meaning
given such term in section 3 of the Carl D. Perkins Career and
Technical Education Act of 2006 (20 U.S.C. 2302).
(2) Community college.--The term ``community college'' means
a public institution of higher education at which the highest
degree that is predominantly awarded to students is an
associate's degree.
(3) Eligible entity.--The term ``eligible entity'' means--
(A) a community college or community college
district;
(B) an area career and technical education school;
(C) a public four-year institution of higher
education that--
(i) offers two-year degrees;
(ii) will use funds provided under this
section for activities at the certificate and
associate degree levels; and
(iii) is not reasonably close, as determined
by the Secretary, to a community college;
(D) a public four-year institution of higher
education that is in partnership with an eligible
entity described in subparagraph (A), (B), or (C);
(E) a State that--
(i) is in compliance with section 137 of the
Higher Education Act of 1965 (20 U.S.C. 1015f);
(ii) has an articulation agreement pursuant
to section 486A of such Act (20 U.S.C. 1093a);
and
(iii) is in partnership with an eligible
entity described in subparagraph (A), (B), (C),
or (D); or
(F) a consortium of at least 2 entities described in
subparagraphs (A) through (E).
(4) Industry or sector partnership.--The term ``industry or
sector partnership'' has the meaning given such term in section
782(f) of the Higher Education Act of 1965.
(5) Institution of higher education.--The term ``institution
of higher education'' has the meaning given such term in
section 101 of the Higher Education Act of 1965 (20 U.S.C.
1001).
(6) Philanthropic organization.--The term ``philanthropic
organization'' has the meaning given such term in section
781(i) of the Higher Education Act of 1965 (20 U.S.C. 1141(i)).
(7) Secretary.--The term ``Secretary'' means the Secretary of
Education.
(8) State.--The term ``State'' has the meaning given such
term in section 103 of the Higher Education Act of 1965 (20
U.S.C. 1003).
(9) State public employment service.--The term ``State public
employment service'' refers to a State public employment
service established under the Wagner-Peyser Act (29 U.S.C. 49
et seq.).
(10) State workforce investment board; local workforce
investment board.--The terms ``State workforce investment
board'' and ``local workforce investment board'' refer to a
State workforce investment board established under section 111
of the Workforce Investment Act (29 U.S.C. 2821) and a local
workforce investment board established under section 117 of
such Act (29 U.S.C. 2832), respectively.
(11) Supportive services.--The term ``supportive services''
has the meaning given such term in section 101(46) of the
Workforce Investment Act of 1998 (29 U.S.C. 2801(46)).
(b) Grant Priority.--In addition to any grant priorities established
under any other provision of this title, the Secretary, in awarding
grants under this title, shall give priority to applications focused on
serving low-income, nontraditional students who do not have a
bachelor's degree, and who have one or more of the following
characteristics:
(1) Are the first generation in their family to attend
college.
(2) Have delayed enrollment in college.
(3) Have dependents.
(4) Are independent students.
(5) Work at least 25 hours per week.
(6) Are out-of-school youth without a high school diploma.
SEC. 503. GRANTS TO ELIGIBLE ENTITIES FOR COMMUNITY COLLEGE REFORM.
(a) Program Authorization.--
(1) Grants authorized.--
(A) In general.--Subject to paragraph (2), from the
amount appropriated to carry out this section, the
Secretary, in coordination with the Secretary of Labor,
shall award grants to eligible entities, on a
competitive basis, to establish and support programs
described in subparagraph (B) at eligible entities
described in subparagraphs (A) through (D) of section
502(a)(3).
(B) Programs.--The programs to be established and
supported with grants under subparagraph (A) (and
carried out through activities described in subsection
(f)) shall be programs--
(i) that are--
(I) innovative programs; or
(II) programs of demonstrated
effectiveness, based on the evaluations
of similar programs funded by the
Department of Education or the
Department of Labor, or other research
of similar programs; and
(ii) that lead to the completion of a
postsecondary degree, certificate, or industry-
recognized credential leading to a skilled
occupation in a high-demand industry.
(2) Limitation.--For each fiscal year for which funds are
appropriated to carry out this section, the aggregate amount of
the grants awarded to eligible entities that are States, or
consortia that include a State, shall be not more than 50
percent of the total amount appropriated under section
501(b)(1) for such fiscal year.
(3) Prohibition.--The Secretary shall not award a grant to an
eligible entity for the same activities that are being
supported by other Federal funds.
(b) Grant Duration and Amount.--
(1) Duration.--A grant under this section shall be awarded to
an eligible entity for a 4-year period, except that if the
Secretary determines that the eligible entity has not made
demonstrable progress in achieving the benchmarks developed
pursuant to subsection (g) by the end of the third year of such
grant period, no further grant funds shall be made available to
the entity after the date of such determination.
(2) Amount.--The minimum amount of a total grant award under
this section over the 4-year period of the award shall be
$750,000.
(c) Priority.--In awarding grants under this section, the Secretary
shall give priority to eligible entities that--
(1) enter into partnerships with--
(A) philanthropic or research organizations with
expertise in meeting the goals of this section;
(B) businesses or industry or sector partnerships
that--
(i) design and implement programs described
in subsection (a)(1)(B);
(ii) pay a portion of the costs of such
programs; and
(iii) agree to collaborate with one or more
eligible entities to hire individuals who have
completed a particular postsecondary degree,
certificate, or credential program; or
(C) labor organizations that provide technical
expertise for occupationally specific education
necessary for an industry-recognized credential leading
to a skilled occupation in a high-demand industry; or
(2) are institutions of higher education eligible for
assistance under title III or V of the Higher Education Act of
1965, or consortia that include such an institution.
(d) Federal and Non-Federal Share; Supplement, Not Supplant.--
(1) Federal share.--The amount of the Federal share under
this section for a fiscal year shall be not greater than \1/2\
of the costs of the programs, services, and policies described
in subsection (f) that are carried out under the grant.
(2) Non-federal share.--
(A) In general.--The amount of the non-Federal share
under this section for a fiscal year shall be not less
than \1/2\ of the costs of the programs, services, and
policies described in subsection (f) that are carried
out under the grant. The non-Federal share may be in
cash or in kind, and may be provided from State
resources, local resources, contributions from private
organizations, or a combination thereof.
(B) Financial hardship waiver.--The Secretary may
waive or reduce the non-Federal share of an eligible
entity that has submitted an application under this
section if the entity demonstrates a need for such
waiver or reduction due to extreme financial hardship,
as defined by the Secretary by regulation.
(3) Supplement, not supplant.--The Federal and non-Federal
shares required by this section shall be used to supplement,
and not supplant, State and private resources that would
otherwise be expended to establish and support programs
described in subsection (a)(1)(B) at eligible entities.
(e) Application.--An eligible entity seeking to receive a grant under
this section shall submit to the Secretary an application at such time,
in such manner, and containing such information as the Secretary may
require. Such application shall describe the programs under subsection
(a)(1)(B) that the eligible entity will carry out using the grant
funds, (including the programs, services, and policies under subsection
(f)), including--
(1) the goals of such programs, services, and policies;
(2) how the eligible entity will allocate grant funds for
such programs, services, and policies;
(3) how such programs, services, and policies, and the
resources of the eligible entity, will enable the eligible
entity to meet the benchmarks developed pursuant to subsection
(g), and how the eligible entity will track and report the
entity's progress in reaching such benchmarks;
(4) how the eligible entity will use such programs, services,
and policies to establish quantifiable targets for improving
graduation rates and employment-related outcomes;
(5) how the eligible entity will serve high-need populations
through such programs, services, and policies;
(6) how the eligible entity will partner with industry or
sector partnerships in the State, the State public employment
service, and State or local workforce investment boards in
carrying out such programs, services, and policies;
(7) an assurance that the eligible entity will share
information with the Learning and Earning Research Center
established under section 505(b), once such Center is
established;
(8) an assurance that the eligible entity will participate in
the evaluation of such programs, services, and policies under
subsection (i); and
(9) the potential for such programs, services, and policies
to be replicated at other institutions of higher education.
(f) Uses of Funds.--An eligible entity receiving a grant under this
section shall use the grant funds to carry out the programs described
in subsection (a)(1)(B), which shall include at least 2 of the
following activities:
(1) Developing and implementing policies and programs to
expand opportunities for students at eligible entities
described in subparagraphs (A) through (D) of section 502(a)(3)
to earn bachelor's degrees by--
(A) facilitating the transfer of academic credits
between institutions of higher education, including the
transfer of academic credits for courses in the same
field of study; and
(B) expanding articulation agreements and guaranteed
transfer agreements between such institutions,
including through common course numbering and general
core curriculum.
(2) Expanding, enhancing, or creating academic programs or
training programs, which shall be carried out with industry or
sector partnerships or in partnership with employers and may
include other relevant partners, that provide relevant job-
skill training (including apprenticeships and worksite learning
and training opportunities) for skilled occupations in high-
demand industries.
(3) Providing student support services, including--
(A) intensive career and academic advising;
(B) labor market information and job counseling; and
(C) transitional job support, supportive services, or
assistance in connecting students with community
resources.
(4) Creating workforce programs that provide a sequence of
education and occupational training that leads to industry-
recognized credentials, including programs that--
(A) blend basic skills and occupational training that
lead to industry-recognized credentials;
(B) integrate developmental education curricula and
instruction with for-credit coursework toward degree or
certificate pathways; or
(C) advance individuals on a career path toward high-
wage occupations in high-demand industries.
(5) Building or enhancing linkages, including the development
of dual enrollment programs and early college high schools,
between--
(A) secondary education or adult education programs
(including programs established under the Carl D.
Perkins Career and Technical Education Act of 2006 and
title II of the Workforce Investment Act of 1998 (29
U.S.C. 9201 et seq.)); and
(B) eligible entities described in subparagraphs (A)
through (D) of section 502(a)(3).
(6) Implementing other innovative programs, services, and
policies designed to--
(A) increase postsecondary degree, certificate, and
industry-recognized credential completion rates,
particularly with respect to groups underrepresented in
higher education, at eligible entities described in
subparagraphs (A) through (D) of section 502(a)(3); and
(B) increase the provision of training for students
to enter skilled occupations in high-demand industries.
(7) Improving the timeliness of the process for creating
degree, certificate, and industry-recognized credential
programs at eligible entities described in subparagraphs (A)
through (D) of section 502(a)(3) that--
(A) reflect and respond to regional labor market
developments and trends;
(B) effectively address the workforce needs of
employers in the State; and
(C) are designed in consultation with such employers.
(g) Benchmarks.--
(1) In general.--Each eligible entity receiving a grant under
this section shall develop quantifiable benchmarks on the
following indicators (where applicable), to be approved by the
Secretary:
(A) Closing gaps in enrollment and completion rates
for--
(i) groups underrepresented in higher
education; and
(ii) groups of students enrolled at the
eligible entity (or at an institution of higher
education under the jurisdiction of the
eligible entity, in the case of an entity that
is not an institution) who have the lowest
enrollment and completion rates.
(B) Addressing local and regional workforce needs.
(C) Establishing articulation agreements between two-
year and four-year public institutions of higher
education within a State.
(D) Improving comprehensive employment and
educational outcomes for postsecondary education and
training programs, including--
(i) student persistence from one academic
year to the following academic year;
(ii) the number of credits students earn
toward a certificate or an associate's degree;
(iii) the number of students in developmental
education courses who subsequently enroll in
credit bearing coursework;
(iv) transfer of general education credits
between institutions of higher education, as
applicable;
(v) completion of industry-recognized
credentials or associate's degrees to work in
skilled occupations in high-demand industries;
(vi) transfers to four-year institutions of
higher education; and
(vii) job placement related to skills
training or associate's degree completion.
(2) Report.--The eligible entity receiving such a grant shall
annually measure and report to the Secretary the progress of
the entity in achieving the benchmarks developed pursuant to
paragraph (1).
(h) Provision of Transfer of Credit Information in Community College
Course Schedules.--To the maximum extent practicable, each community
college receiving a grant under this section shall include in each
electronic and printed publication of the college's course schedule, in
a manner of the college's choosing, for each course listed in the
college's course schedule, whether such course is transferable for
credit toward the completion of a 4-year baccalaureate degree at a
public institution of higher education in the State in which the
college is located.
(i) Evaluation.--The Secretary shall allocate not more than two
percent of the funds appropriated under section 501(b)(1) to the
Institute of Education Sciences to conduct evaluations, ending not
later than January 30, 2014, that--
(1) assess the effectiveness of the grant programs carried
out by each eligible entity receiving such a grant in--
(A) improving postsecondary education completion
rates (disaggregated by age, race, ethnicity, sex,
income, and disability);
(B) improving employment-related outcomes for
students served by such programs;
(C) serving high-need populations; and
(D) building or enhancing working partnerships with
the State public employment service or State or local
workforce investment boards; and
(2) include any other information or assessments the
Secretary may require.
(j) Report.--The Secretary shall submit to the Committee on Health,
Education, Labor, and Pensions of the Senate and the Committee on
Education and Labor of the House of Representatives an annual report on
grants awarded under this section, including--
(1) the amount awarded to each eligible entity under this
section;
(2) a description of the activities conducted by each
eligible entity receiving a grant under this section; and
(3) a summary of the results of the evaluations submitted to
the Secretary under subsection (i) and the progress each
eligible entity made toward achieving the benchmarks developed
under subsection (g).
SEC. 504. GRANTS TO ELIGIBLE STATES FOR COMMUNITY COLLEGE PROGRAMS.
(a) Program Authorization.--From the amount appropriated to carry out
this section, the Secretary, in coordination with the Secretary of
Labor, shall award grants to eligible States, on a competitive basis,
to implement the systematic reform of community colleges located in the
State by carrying out programs, services, and policies that
demonstrated effectiveness under the evaluation described in section
503(i).
(b) Eligible State.--In this section, the term ``eligible State''
means a State that demonstrates to the Secretary in the application
submitted pursuant to subsection (e) that the State--
(1) has a plan under section 782 of the Higher Education Act
of 1965 to increase the State's rate of persistence in and
completion of postsecondary education that takes into
consideration and involves community colleges located in such
State;
(2) has a statewide longitudinal data system that includes
data with respect to community colleges;
(3) has an articulation agreement pursuant to section 486A of
the Higher Education Act of 1965 (20 U.S.C. 1093a);
(4) is in compliance with section 137 of such Act (20 U.S.C.
1015f); and
(5) meets any other requirements the Secretary may require.
(c) Grant Duration; Renewal.--A grant awarded under this section
shall be awarded to an eligible State for a 6-year period, except that
if the Secretary determines that the eligible State has not made
demonstrable progress in achieving the benchmarks developed pursuant to
subsection (g) by the end of the third year of the grant period, no
further grant funds shall be made available to the entity after the
date of such determination.
(d) Federal and Non-Federal Share; Supplement, Not Supplant.--
(1) Federal share.--The amount of the Federal share under
this section for a fiscal year shall be not greater than \1/2\
of the costs of the reform described in subsection (f) that is
carried out with the grant.
(2) Non-federal share.--
(A) In general.--The amount of the Non-Federal share
under this section for a fiscal year shall be not less
than \1/2\ of the costs of the reform described in
subsection (f) that is carried out with the grant. The
non-Federal share may be in cash or in kind, and may be
provided from State resources, local resources,
contributions from private organizations, or a
combination thereof.
(B) Financial hardship waiver.--The Secretary may
waive or reduce the non-Federal share of an eligible
State that has submitted an application under this
section if the State demonstrates a need for such
waiver or reduction due to extreme financial hardship,
as defined by the Secretary by regulation.
(3) Supplement, not supplant.--The Federal and non-Federal
share required by this section shall be used to supplement, and
not supplant, State and private resources that would otherwise
be expended to carry out the systematic reform of community
colleges in a State.
(e) Application.--An eligible State desiring to receive a grant under
this section shall submit to the Secretary an application at such time,
in such manner, and containing such information as the Secretary may
require. Such application shall describe the programs, service, and
policies to be used by the State to achieve the systematic reform
described in subsection (f), including--
(1) the goals of such programs, services, and policies;
(2) how the State will allocate grant funds to carry out such
programs, services, and policies, including identifying any
State or private entity that will administer such programs,
services, and policies;
(3) how such programs, services, and policies will enable the
State to--
(A) meet the benchmarks developed pursuant to
subsection (g), and how the State will track and report
the State's progress in reaching such benchmarks; and
(B) benefit students attending all community colleges
within the State;
(4) how the State will use such programs, services, and
policies to establish quantifiable targets for improving
graduation rates and employment-related outcomes;
(5) how the State will serve high-need populations through
such programs, services, and policies;
(6) how the State will partner with the State public
employment service and State or local workforce investment
boards in carrying out such programs, services, and policies;
(7) how the State will evaluate such programs, services, and
policies, which may include participation in national
evaluations; and
(8) how the State will involve community colleges and
community college faculty in the planning, implementation, and
evaluation of such programs, services, and policies.
(f) Uses of Funds.--An eligible State receiving a grant under this
section shall use the grant funds to implement the systematic reform of
community colleges located in the State by carrying out programs,
services, and policies that the Secretary has determined to have
demonstrated effectiveness based on the results of the evaluation
described in section 503(i). States shall allocate not less than 90
percent of such grant funds to community colleges within the State.
(g) Benchmarks.--
(1) In general.--Each eligible State receiving a grant under
this section shall, in consultation with the Secretary, develop
quantifiable benchmarks on the indicators identified in section
503(f)(1).
(2) Progress.--An eligible State receiving such a grant shall
annually measure and report to the Secretary progress in
achieving the benchmarks developed pursuant to paragraph (1).
(h) Report.--
(1) Reports to the secretary.--Each eligible State receiving
a grant under this section shall annually submit to the
Secretary and the Secretary of Labor a report on such grant,
including--
(A) a description of the systematic reform carried
out by the State using such grant; and
(B) the outcome of such reform, including the State's
progress in achieving the benchmarks developed under
subsection (g).
(2) Reports to congress.--Not later than 6 months after the
end of the grant period, the Secretary shall submit to the
Committee on Health, Education, Labor, and Pensions of the
Senate and the Committee on Education and Labor of the House of
Representatives a summary of the reports submitted under
paragraph (1) with respect to such grant period.
(i) Sense of Congress.--It is the sense of Congress that--
(1) community colleges play an important role in preparing
and training students seeking to enter the workforce;
(2) it is vital that all States have access to the resources
and assistance needed to compete for grants authorized under
this section; and
(3) in executing the grant program authorized under this
section, the Secretary will make available any and all
assistance, guidance, and support to States seeking to compete
for grants authorized under this section and will work to
ensure that such grants are distributed in a fair and equitable
manner.
SEC. 505. NATIONAL ACTIVITIES.
(a) Open Online Education.--From the amount appropriated to carry out
this section, the Secretary is authorized to make competitive grants
to, or enter into contracts with, institutions of higher education,
philanthropic organizations, and other appropriate entities to develop,
evaluate, and disseminate freely-available high-quality online
training, high school courses, and postsecondary education courses.
Entities receiving funds under this subsection shall ensure that
electronic and information technology activities meet the access
standards established under section 508 of the Rehabilitation Act of
1973 (29 U.S.C. 794d).
(b) Learning and Earning Research Center.--
(1) In general.--From the amount appropriated to carry out
this section, the Director of the Institute of Education
Sciences is authorized to award a grant to, or enter into a
contract with, an organization with demonstrated expertise in
the research and evaluation of community colleges to establish
and operate the Learning and Earning Research Center (in this
section referred to as the ``Center'').
(2) Grant term.--The grant or contract awarded under this
section shall be awarded for a period of not more than 4 years.
(3) Board.--The Center shall have an independent advisory
board of 9 individuals who--
(A) are appointed by the Secretary, based on
recommendations from the organization receiving the
grant or contract under this section; and
(B) who have demonstrated expertise in--
(i) data collection;
(ii) data analysis; and
(iii) econometrics, postsecondary education,
and workforce development research.
(4) Center activities.--The Center shall--
(A) develop--
(i) peer-reviewed metrics to help consumers
make sound education and training choices, and
to help students, workers, schools, businesses,
researchers, and policymakers assess the
effectiveness of community colleges, and
courses of study at such colleges, in meeting
education and employment objectives and serving
groups that are underrepresented in
postsecondary education;
(ii) common metrics and data elements to
measure the education and employment outcomes
of students attending community colleges;
(B) coordinate with the Institute of Education
Sciences and States receiving a grant under subsection
(c) to develop--
(i) standardized data elements, definitions,
and data-sharing protocols to make it possible
for data systems related to postsecondary
education to be linked and interoperable, and
for best practices to be shared among States;
(ii) standards and processes for facilitating
sharing of data in a manner that safeguards
student privacy; and
(C) develop and make widely available materials
analyzing best practices and research on successful
postsecondary education and training efforts;
(D) make the data and metrics developed pursuant to
subparagraph (A) available to the public in a
transparent, user-friendly format that is accessible to
individuals with disabilities; and
(E) consult with representatives from States with
respect to the activities of the Center.
(c) State Systems.--
(1) In general.--From the amount appropriated to carry out
this section, the Secretary is authorized to award grants to
States or consortia of States to establish cooperative
agreements to develop, implement, and expand interoperable
statewide longitudinal data systems that--
(A) collect, maintain, disaggregate (by institution,
income, race, ethnicity, sex, disability, and age), and
analyze student data from community colleges, including
data on the programs of study and education and
employment outcomes for particular students, tracked
over time; and
(B) can be linked to other data systems, as
applicable, including elementary and secondary
education and workforce data systems.
(2) Supplement, not supplant.--Funds appropriated to carry
out this subsection shall be used to supplement, and not
supplant, other Federal and State resources that would
otherwise be expended to carry out statewide longitudinal data
systems, including funding appropriated for State Longitudinal
Data Systems in the American Recovery and Reinvestment Act of
2009 (Public Law 111-5; 123 Stat. 115).
(3) Privacy and access to data.--
(A) In general.--Each State or consortia that
receives a grant under this subsection or any other
provision of this Act shall implement measures to--
(i) ensure that the statewide longitudinal
data system under this subsection and any other
data system the State or consortia is operating
for the purposes of this Act meet the
requirements of section 444 of the General
Education Provisions Act (20 U.S.C. 1232g)
(commonly known as the ``Family Educational
Rights and Privacy Act of 1974'');
(ii) limit the use of information in any such
data system by governmental agencies in the
State, including State agencies, State
educational authorities, local educational
agencies, community colleges, and institutions
of higher education, to education and workforce
related activities under this Act or education
and workforce related activities otherwise
permitted by Federal or State law;
(iii) prohibit the disclosure of personally
identifiable information except as permitted
under section 444 of the General Education
Provisions Act and any additional limitations
set forth in State law;
(iv) keep an accurate accounting of the date,
nature, and purpose of each disclosure of
personally identifiable information in any such
data system, a description of the information
disclosed, and the name and address of the
person, agency, institution, or entity to whom
the disclosure is made, which accounting shall
be made available on request to parents of any
student whose information has been disclosed;
(v) notwithstanding section 444 of the
General Education Provisions Act, require any
non-governmental party obtaining personally
identifiable information to sign a data use
agreement prior to disclosure that--
(I) prohibits the party from further
disclosing the information;
(II) prohibits the party from using
the information for any purpose other
than the purpose specified in the
agreement; and
(III) requires the party to destroy
the information when the purpose for
which the disclosure was made is
accomplished;
(vi) maintain adequate security measures to
ensure the confidentiality and integrity of any
such data system, such as protecting a student
record from identification by a unique
identifier;
(vii) where rights are provided to parents
under this clause, provide those rights to the
student instead of the parent if the student
has reached the age of 18 or is enrolled in a
postsecondary educational institution; and
(viii) ensure adequate enforcement of the
requirements of this paragraph.
(B) Use of unique identifiers.--It shall be unlawful
for any Federal, State, or local governmental agency
to--
(i) use the unique identifiers employed in
such data systems for any purpose other than as
authorized by Federal or State law; or
(ii) deny any individual any right, benefit,
or privilege provided by law because of such
individual's refusal to disclose the
individual's unique identifier.
(d) Report.--The Secretary shall submit to the Committee on Health,
Education, Labor, and Pensions of the Senate and the Committee on
Education and Labor of the House of Representatives an annual report on
the amounts awarded to entities receiving grants or contracts under
this section, and the activities carried out by such entities under
such grants and contracts.
I. Purpose
The purpose of H.R. 3221, the Student Aid and Fiscal
Responsibility Act of 2009 is to reform the federal student
loan program, provide for modernization, renovation and repair
of public school facilities, enhance early learning, and
strengthen community colleges.
II. Committee Action
110TH CONGRESS
Committee on Education and Labor Hearing: ``Investing in Early
Education: Paths To Improving Children's Success''
On January 23, 2008, the Committee on Education and Labor
held a hearing in Washington, D.C., entitled ``Investing in
Early Education: Paths to Improving Children's Success.'' The
hearing examined the need for expanding access to affordable
high-quality early education opportunities through federal
investments as part of improving student success in elementary
school and beyond. Panelists testified to the science of early
brain development and the experiences in the first five years
of life that foster healthy development and academic success,
the research on high quality pre-kindergarten, the state and
local challenges to building a high quality early learning
system, and the business community's interest in investing in
early childhood education. The following witnesses testified
before the Committee: Deborah Phillips, Ph.D., Professor of
Psychology Georgetown University, Washington, D.C.; Kathleen
Priestley, Early Education Coordinator for the City of Orange
School District, Orange, NJ; Elisabeth Chun, Executive
Director, Good Beginnings Alliance, Honolulu, Hawaii; Charles
Kolb, President, Committee on Economic Development, Washington,
D.C., Eric Karolak, Ph.D., Executive Director, Early Care and
Education Consortium, Washington, D.C.; Ron Haskins, Ph.D.,
Senior Fellow, Economic Studies, Brookings Institution,
Washington, D.C.
Full Committee hearing on ``Modern Public School Facilities: Investing
in the Future''
On Wednesday, February 13, 2008, the Committee on Education
and Labor held a hearing in Washington, D.C., on ``Modern
Public School Facilities: Investing in the Future.'' The
purpose of the hearing was to highlight the poor quality of
public school buildings frequently found throughout the United
States, particularly in low-income areas, and the importance of
federal investment in public school buildings.
Introduction of the ``21st Century High-Performing Public School
Facilities Act''
On Thursday, July 12, 2007, Representatives Ben Chandler
(D-KY), George Miller (D-CA), and Dale Kildee (D-MI) introduced
H.R. 3021, the 21st Century High-Performing Public School
Facilities Act, a bill to direct the Secretary of Education to
make grants and low-interest loans to local educational
agencies for the construction, modernization, or repair of
public kindergarten, elementary, and secondary educational
facilities, and for other purposes. The House of
Representatives passed H.R. 3021 by a vote of 250-164 with all
Democrats present and 27 Republicans voting in favor. The bill
was referred to the Senate Committee on Health, Education,
Labor and Pensions.
Related legislative action
On September 26, 2008, the House passed H.R. 7110, the Job
Creation and Unemployment Relief Act of 2008, introduced by
Representative David Obey (D-WI), Chairman of the
Appropriations Committee. H.R. 7110 appropriated $3 billion for
public school modernization, renovation and repair, essentially
as described in Title I of H.R. 3021.
On January 28, 2009, at the beginning of the 111th
Congress, the House passed H.R. 1, the American Recovery and
Reinvestment Act, also introduced by Chairman Obey. H.R. 1
appropriated $14 billion for public school modernization,
renovation and repair, again, essentially as described in Title
I of H.R. 3021. On February 12, 2009, the House passed the
Conference Report on H.R. 1, which did not include dedicated
funds for public school modernization, renovation and repair.
However, Title XIV of the Conference Report, the State Fiscal
Stabilization Fund, included $48.6 billion for states and local
educational agencies, of which public school modernization,
renovation and repair (including modernization, renovation and
repair that complies with a recognized green building
standards) is an authorized use.
111TH CONGRESS
Committee on Education and Labor Hearing: ``The Importance of Early
Childhood Development.''
On March 17, 2009, the Committee on Education and Labor
held a hearing in Washington, D.C., entitled ``The Importance
of Early Childhood Development.'' The hearing examined the
well-being of young children, the needs of children and
families, and state efforts to undertake comprehensive birth to
age five approaches to support early learning and development.
Panelists testified regarding the high-cost of quality early
education and that often the children who would benefit from
these high-quality early childhood opportunities are the least
likely to access such services. Panelists underscored state and
local resources challenges to building high quality early
learning systems, emphasizing the proven success seen in some
localities when such infrastructures have been established and
the important role private organizations and community
interests play in the continued struggle to provide high-
quality early childhood opportunities. The following witnesses
testified before the Committee: Harriet Meyer, President, Ounce
of Prevention Fund, Chicago, IL; Jessie Rasmussen, Vice
President, Buffett Early Childhood Fund, Omaha, NE; James
Redmon, Executive Director, Kansas Children's Cabinet and Trust
Fund, Topeka, KS; Holly Robinson, Ph.D, Commissioner, Georgia
Department of Early Care and Learning, Atlanta, GA; Don Soifer,
Executive Vice President, Lexington Institute, Arlington, VA;
Helene Stebbins, Project Coordinator, National Center on
Children in Poverty, New York, NY.
Subcommittee on Early Childhood, Elementary, and Secondary Education
hearing: ``Improving Early Childhood Development Policies and
Practices''
On March 19, 2009, the Subcommittee on Early Childhood,
Elementary and Secondary Education held a hearing in
Washington, D.C. entitled, ``Improving Early Childhood
Development Policies and Practices.'' The hearing discussed
barriers families face in accessing quality early education and
development programs, and state and other efforts to address
such issues. The panelists discussed state and local efforts to
improve birth to age five learning opportunities, such as state
efforts to maintain quality control standards, efforts to reach
the most at risk families and children, as well as programs to
provide scholarship supports and wage supplements to improve
the workforce of educators. Witnesses underscored the barriers
states, local communities, and disadvantaged children and
families face in developing and accessing such programs. The
following witnesses testified before the Subcommittee: Harriet
Dichter, Deputy Secretary, Office of Child Development and
Early Learning, Harrisburg, PA; Sue Russell, President, Child
Care Services Association, Chapel Hill, NC; Gina Adams, Senior
Fellow, Urban Institute, Center on Labor, Human Services and
Population, Washington, D.C.; Lillian Lowery, Ph.D., Secretary,
Delaware Department of Education, Dover, DE.
The ``21st Century Green High-Performing Public School Facilities Act''
On Thursday, April 30, 2009, Representatives Ben Chandler
(D-KY), George Miller (D-CA), Dale Kildee (D-MI), and Dave
Loebsack (D-IA) introduced H.R. 2187, the 21st Century Green
High-Performing Public School Facilities Act. This bill, which
is very similar to H.R. 3021, directs the Secretary of
Education to make grants to local educational agencies for the
modernization, renovation, or repair of public early learning,
kindergarten, elementary, and secondary educational facilities,
and for other purposes.\1\ On Wednesday, May 6, 2009, the
Committee considered H.R. 2187 in legislative session, and
reported the bill favorably, as amended, to the House of
Representatives by a vote of 31-14. The House of
Representatives passed H.R. 2187 by a vote of 275-155 with 24
Republicans voting in favor. The bill was referred to the
Senate Committee on Health, Education, Labor and Pensions.
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\1\Other original cosponsors of the bill include: Representatives
Robert E. Andrews, Joe Courtney, Raul M. Grijalva, Phil Hare, Mazie K.
Hirono, Rush Holt, Pedro R. Pierluisi, Jared Polis, Gregorio Sablan,
John F. Tierney, Paul D. Tonko, Lynn C. Woolsey, and David Wu.
---------------------------------------------------------------------------
Full committee hearing on ``The Obama Administration's Education
Agenda''
On Wednesday, May 20, 2009, the Committee on Education and
Labor held a hearing in Washington, D.C. on the Obama
Administration's Education Agenda. Education Secretary, Arne
Duncan, testified before the House Education and Labor
Committee about President Obama's agenda for transforming
American education. The purpose of the hearing was to highlight
the President's budget proposal for early education, K-12
education, and higher education.
Full committee hearing on ``Increasing Student Aid through Loan
Reform''
On Thursday, May 21, 2009, the Committee on Education and
Labor held a hearing entitled ``Increasing Student Aid through
Loan Reform.'' The purpose of the hearing was to discuss
proposals to reform the student aid system to ensure that
Federal student aid is efficient, reliable, and meaningful for
our nation's students and families and to identify ways to use
reform efforts to increase benefits to students, especially
through increased grant aid. The following witnesses testified
before the Committee: Robert Shireman, Deputy Under Secretary,
U.S. Department of Education; Anna M. Griswold, Assistant Vice
President for Undergraduate Education and Executive Director
for Student Aid, The Pennsylvania State University; John (Jack)
F. Remondi, Vice Chairman and Chief Financial Officer, Sallie
Mae; Dr. Charles Reed, Chancellor, The California State
University; and Rene Drouin, President and CEO, New Hampshire
Higher Education Assistance Foundation (NHHEAF); Dr. Richard
Vetter, Professor of Economics, Ohio University; and
Christopher Chapman, President and Chief Executive Officer,
Access Group.
Introduction of the Student Aid and Fiscal Responsibility Act
On Wednesday, July 15, 2009, Chairman George Miller, along
with Representatives Robert E. Andrews (D-NJ), Bishop (D-NY),
Courtney (D-CT), Davis (D-CA), Eshoo (D-CA), Fudge (D-OH),
Grijalva (D-AZ), Hare (D-IL), Hinojosa (D-TX), Hirono (D-HI),
Holt (D-NJ), Kildee (D-MI), Kucinich (D-OH), Loebsack (D-IA),
Payne (D-NJ), Sablan (D-MP), Scott (D-VA), Sestak (D-PA), Shea-
Porter (D-NH), Tierney (D-MA), Woolsey (D-CA), Wu (D-OR)
introduced H.R. 3221, the Student Aid and Fiscal Responsibility
Act of 2009, a bill to amend the Higher Education Act of 1965,
and for other purposes.
Full committee markup of H.R. 3221
On Tuesday, July 21, 2009, the Committee on Education and
Labor considered H.R. 3221 in legislative session, and reported
the bill favorably, as amended, to the House of
Representatives, by a vote of 30-17. Chairman Miller offered an
amendment in the nature of a substitute.
The amendment in the nature of a substitute contained minor
technical changes and the following changes to H.R. 3221:
Strikes language in section 215, from the
introduced bill that would have eliminated graduate
student eligibility for the Subsidized Stafford loan
program;
Strikes section 123, which amended the
Social Security Allowances in the federal needs
analysis formula;
Reduces funding for K-12 modernization,
renovation, and repair from $5 billion over two years
to $4.1 billion over two years (for chapter 1 of
subtitle III there are authorized $2,020,000,000 for
each of fiscal years 2010 and 2011 and for chapter 2 of
subtitle III $30,000,000 for each of fiscal years 2010
and 2011);
Changes the variable rate for Subsidized
Stafford loans from the introduced bill level of the
91-day T-bill +2.3 percent to the 91-day T-bill plus
2.5 percent;
Encourages the Secretary of Education, in
consultation with the Secretary of Labor to work with
recipients of K-12 modernization, renovation, and
repair funds to promote appropriate pre-apprenticeship
opportunities;
In Title IV (Early Learning Challenge Fund)
Changes funding from $1 billion
per year for 10 years to $1 billion per year
for 8 years.
Changes the 2% set-aside for
Federal administration to a cap.
Changes the 3% set-aside for
Federal research activities to a cap.
Changes Maintenance of Effort
requirements from FY 2009 to FY 2006.
Changes state match related to
expanding access from 50% to 20%.
Includes provisions to ensure
state plans adequately address the needs of
children with limited English proficiency.
Allows in-kind contributions for
facilities development, including technical
assistance, to be counted toward state match.
In Title V (American Graduation Initiative):
Directs the Secretary of
Education, in consultation with the Secretary
of Labor, to promote opportunities for
participants in pre-apprenticeship programs to
gain employment experience
Modifies the definition of
eligible institutions to only include 4-year
public institutions that offer two-year
degrees, use funds for associate degree and
certificate level activities, and that are not
located near a community college, allowing for
the participation of all public 4-year
institutions to participate in partnership with
community colleges;
Allows in-kind contributions for
facilities development (including technical
assistance) to be counted toward state match;
and
Adds a privacy provision that covers the
bill, limiting the use of information in the state-wide
data systems to use by governmental agencies in the
state and for those education and workforce activities
authorized by the bill, or otherwise permitted by
federal or state law.
III. Summary of the Bill
PURPOSE
The purpose of H.R. 3221, the Student Aid and Fiscal
Responsibility Act of 2009, is to provide for reconciliation
pursuant to S. Con. Res. 13, the concurrent resolution on the
budget for fiscal year 2010, to invest in students and
families; increase college access and completion rates; invest
in elementary and secondary school and community college
modernization, renovation and repair projects; and invest early
learning.
Increased funding for Pell grant scholarships
The Student Aid and Fiscal Responsibility Act of 2009 will
provide mandatory funds to reach the President's goal of a
maximum Pell Grant award of $5,550 in 2010. In future years,
the maximum award would automatically increase by an amount
equivalent to the Consumer Price Index (CPI) plus 1%. At this
rate, the Pell maximum is estimated to increase to $6,900 by
2019. This legislation will build on the mandatory investment
in Pell enacted as in the College Cost Reduction and Access Act
of 2007 and set the maximum awards on an increasing trajectory.
Increasing College Access and Completion
In addition to increasing funding for Pell Grant
scholarships, this legislation establishes the College Access &
Completion Innovation Fund. The purpose of this fund is to: (a)
continue college access activities that are currently funded
through College Access Challenge Grant (or Section 781 of the
Higher Education Act of 1965) and from student loan proceeds to
state agencies and nonprofit organizations; (b) promote state
higher education planning, innovation, and systems of data and
accountability; (c) support innovation through national
activities to expand college access and increase degrees and
certificate completion rates; and (d) conduct rigorous
evaluation of the funded programs.
Additionally, the Fund will provide competitive grants to
States to establish programs that increase financial literacy
and encourage college completion. Funding under this program
can be used to develop state-wide access and completion plans
and statewide data systems. Priority will be given to States
partnering with philanthropic organizations or state and non-
profit guaranty agencies to carry out grant activities.
Additionally, 1/3 of the state funds must be used for
activities that benefit students enrolled at junior or
community colleges, two-year public institutions, or two-year
programs of instruction at four-year public institutions.
The Access and Completion Innovation Fund would also
provide funding directly from the Secretary to institutions and
organizations working toward closing gaps in attainment and
completion, as well as provide the opportunity to develop two-
year programs providing supplemental financial aid in a way
that would improve student outcomes while not reducing other
available aid. Priorities for these grants will go towards
entities or consortia with proven experience in serving
populations traditionally underrepresented in higher education
or those that have this goal as a primary purpose, to those
public institutions that do not predominantly award bachelor's
degrees, and to those that include activities aimed at
increasing STEM degree or certificate production. Also, the
Secretary shall give priority to partnerships between
institutions with high-degree production rates and those with
low-degree production rates, in order to facilitate the
transfer of best practices for increasing completion.
Each entity receiving a grant under this section will be
required to provide an annual report assessing their measurable
progress in reaching the completion goals outlined in their
initial grant plan submitted to the Secretary. The Secretary
may also require additional evaluation standards as he
determines are necessary. Furthermore, the Director of the
Institute for Education Sciences will conduct a rigorous
evaluation of all projects funded under this section in order
to learn from these innovation projects in a tangible way that
is useful for all entities engaged in this work.
Investing in Historically Black Colleges and Universities and Minority-
Serving Institutions
H.R. 3221 invests in Historically Black Colleges and
Universities (HBCUs), Hispanic Serving Institutions (HSIs),
Predominately Black Institutions (PBIs), Tribal Colleges and
Universities (TCUs), Alaska Native and Native Hawaiian
Institutions, institutions serving Asian American and Pacific
Islanders and Native American non tribal serving institutions
to ensure that students attending these institutions will not
only enter college, but remain and graduate.
Student financial aid form simplification
This legislation further simplifies the Free Application
for Federal Student Aid (FAFSA) by reducing the number of
questions that a family must answer to determine a student's
financial aid eligibility. H.R. 3221 builds on the important
work of the Congress in the Higher Education Opportunity Act,
Pub.L. No. 110-315, by taking FAFSA simplification to the next
important step: eliminating from the needs analysis the
financial data not available from the applicant's tax form. The
goal of FAFSA simplification is to make it possible to complete
the financial aid application with nothing more than a copy of
IRS Form 1040 or through importing data from the IRS. Under
this legislation, the only applicants who would need to provide
additional financial information are those who choose to do so
to reduce their reported income in certain circumstances.
H.R. 3221 would allow the Department to replace the six
current asset questions with a single ``yes/no'' question that
most applicants will be able to answer easily. Additionally,
H.R. 3221 eliminates several items that applicants are asked to
add to their income, such as child support payments received,
military and clergy living allowances, and untaxed disability
support. The only items remaining that are not on the tax form
are items that applicants are allowed to subtract from their
incomes. These include combat pay, child support payments made,
and scholarship aid that had been included as income on the tax
form.
Stafford loan reform
This legislation will move all institutions of higher
education in the country to the Direct Lending program by 2010,
saving the federal government and taxpayers $87 billion dollars
over the next 10 years. These savings will be used to reinvest
in expanding educational opportunities for students and
families and paying down the federal deficit. While the
legislation directs the government to originate all student
loans, it also ensures that there is a role for private
industry in providing loan servicing. Moreover, it will ensure
that State and local non-profit agencies, that meet quality and
pricing standards, will participate in servicing through a
minimum volume allocation of the loans of 100,000 borrowers.
These reforms mean that student borrowers will have a reliable
stream of funding to finance their college education, and can
rely on quality loan servicing during repayment.
Student loan interest rates
This legislation will make interest rates on subsidized
student loans for undergraduate borrowers variable with a cap
of 6.8 percent, beginning in 2012. The variable interest rate
will be based on the 91-day T-bill plus 2.5 percent. This
change will continue Congress's investment in keeping interest
rates low for needy students and families by ensuring that
students and families benefit from low market interest rates
and protecting them during periods of high market interest
rates. At current CBO estimates for interest rates on the 91-
day T-bill, the interest rate for federal subsidized Stafford
loans would be 6.3 percent through 2015.
Revised special allowance calculation on existing federal loans
Under current law, the government pays private sector
lenders a subsidy known as the Special Allowance Payment (SAP),
which is calculated based on a lender's cost of borrowing
money. The index used as a proxy for the lender's cost of money
is the 90-Day Commercial Paper rate (CP), which Congress
intended to serve as a market-based measure. Credit market
dislocations and the Federal Reserve's intervention in the
capital markets has had a significant and unintended effect on
CP rates. This title provides lenders the option of having
their SAP payments calculated based on the 1-Month LIBOR rate,
rather than the 90-Day Commercial Paper rate. Such a change
will provide lenders with greater predictability in the
underlying index, as well as ensure that the index reflects a
market-based rate as Congress had intended.
Perkins reform
H.R. 3221 reforms the Perkins loan program by providing
participating schools an allotment of lending authority to make
Perkins loans to students on their campuses. The funding for
loans will be provided through the Direct Loan program, rather
than through revolving loan funds at each school. This
legislation maintains key features of the current Perkins
program, including the discretion afforded financial aid
officers in targeting Perkins loans to financially-needy
students. It will greatly increase the number of campuses
participating in the program and ensure that students' loans
will retain the current interest rate of 5 percent. Six billion
dollars in lending authority will be allocated to schools that
wish to participate in the new Perkins Program: half of the
funds will be allocated to institutions based on the unmet
financial need among an institution's students, while the other
half will be allocated to institutions based on the extent to
which institutions provide low tuition or high levels of non-
Federal aid, as well as on the number of Pell grant recipients
that graduate from the institution. As current Perkins Loan
borrowers repay their loans, schools would remit the Federal
share of those payments to the Department of Education. Schools
would retain their own share of the revolving funds, as well as
amounts sufficient to cover the costs of the various Perkins
Loan forgiveness provisions.
Modernization, renovation, and repair of elementary and secondary
education public school facilities
This legislation provides $4.1 billion to elementary and
secondary schools over the next two fiscal years for
modernization, renovation, and repair projects that create
healthier, safer, and more energy-efficient teaching and
learning climates. Title III, chapter 1 of H.R. 3221
appropriates $2.02 billion for fiscal years 2010 and 2011 for
school facilities. The bill ensures that school districts
around the country will receive funds for much needed public
school modernization, renovation, and repair projects to
improve the teaching and learning climate, student and staff
health, and safety, energy efficiency, and the environment. The
bill directs the Secretary to reserve two percent of funds
appropriated for chapter 1 for each fiscal year for assistance
to the outlying areas and for payments to the Secretary of the
Interior for assistance to Bureau-funded schools. The bill
further directs the Secretary to reserve five percent of funds
appropriated for chapter 1 for each fiscal year for assistance
to local educational agencies serving geographic areas with
significant economic distress and those recovering from a
natural disaster.
H.R. 3221 allocates to each State the same percentage of
funds that the State receives under Title I, Part A of the
Elementary and Secondary Education Act and allocates within
States the same percentage to each school district that the
school district receives under such part (except that no such
school district will receive less than $5,000).
The bill allows States to reserve one percent of their
chapter 1 allocation for technical assistance and to develop a
plan to create an online, publicly searchable statewide
database of public school facility design, condition,
modernization, renovation and repair needs, usage, utilization,
energy use, and carbon footprint, and create voluntary
guidelines for high-performing public school buildings.
Funds under chapter 1 may be used for public school
modernization, renovation, and repair, including repair to
roofs, electrical, plumbing, sewage, stormwater runoff and
lighting systems, heating, ventilation, and air-conditioning
systems, windows, floors, ceilings, doors, including insulation
and indoor air quality assessments. Funds may also be used to
bring schools into compliance with fire, health, seismic and
safety codes, including modernizations, renovations, and
repairs that ensure that schools are prepared for emergencies.
Funds may be used to comply with the Americans with
Disabilities Act of 1990 and section 504 of the Rehabilitation
Act of 1973. Additional uses include abatement, removal, or
interim controls of asbestos, polychlorinated biphenyls, mold,
or mildew; reduction of human exposure to lead-based hazards;
reduction of classroom noise and environmental noise pollution;
modernization, renovation, or repair to reduce the consumption
of coal, electricity, land, natural gas, oil, or water;
upgrading or installing educational technology infrastructure;
modernization, renovation, or repairs of laboratory facilities,
libraries, and career and technical education facilities;
renewable energy generation and energy audits; other
modernizations, renovations, or repairs that improve the
teaching and learning climate, ensure the health and safety of
students and staff, or make schools more energy efficient; or
reduce class size; and required environmental remediation
related to modernizations, renovations, or repairs described
above.
H.R. 3221 requires that funds be used for projects that
meet one of four widely recognized green standards (Leadership
in Energy and Environmental Design (LEED) Green Building Rating
System, Energy Star, Collaborative for High Performance
Schools, or Green Globes) or an equivalent State or local
standard, which must include a verifiable method to demonstrate
compliance. School districts must use the green requirement for
a percentage of the funds (fifty percent in 2010 and seventy-
five percent in 2011) for projects that meet one of the green
standards described above.
In chapter 2, the bill provides $30 million for each of
fiscal years 2010 and 2011 for public schools in the Gulf
region in response to damages from Hurricane Katrina or
Hurricane Rita. These funds are to be used for the same
purposes as chapter 1 funds, but also may be used for new
construction.
The bill includes provisions to require local educational
agencies to ensure that the bid process for any projects
carried out through a contract ensures the maximum number of
qualified bidders, including local, small, minority, women- and
veteran-owned businesses, through full and open competition.
Also, Davis-Bacon labor law protections apply to all funds
received under this subtitle.
The bill requires school districts to report publicly on
educational, energy, and environmental benefits of projects,
compliance with the green requirement, and the percentage of
funds used for projects at low-income, charter and rural
schools. States must compile these reports and submit them to
the Secretary who shall, in turn, report to the House Committee
on Education and Labor and the Senate Committee on Health,
Education, Labor, and Pensions.
The legislation requires the Secretary of Education, in
consultation with the Secretary of Energy and Administrator of
the Environmental Protection Agency, to disseminate best
practices in school modernization, renovation, repair and
construction of school facilities and to provide technical
assistance to States and school districts concerning such best
practices.
The bill encourages the Secretary of Education, in
consultation with the Secretary of Labor, to promote
appropriate opportunities for participants in YouthBuild, Job
Corps, junior or community college degree, or pre-
apprenticeship programs.
H.R. 3221 establishes the Advisory Council on Green, High-
Performing Public School Facilities to advise the Secretary on
the impact of green, high-performing schools on teaching and
learning, health, energy costs, environmental impact, and other
areas. Finally, the bill allows local educational agencies to
encourage schools where modernization, renovation, or repair
projects are undertaken to educate students about the project,
including, as appropriate, the functioning of the project and
its environmental, energy, sustainability, and other benefits.
Community college modernization and construction
This legislation will authorize the Secretary to award
grants to States to leverage and provide funds for the
construction of new community college facilities, and the
modernization, renovation, and repair of existing community
college facilities necessary to improve instruction and better
meet employer needs. Federal funds may be used to reduce the
financing costs of construction projects (such as through the
purchase of bond insurance or buying down interest rates on
loans), providing matching funds to attract private donations
of funds as part of a capital fundraising campaign, or
capitalizing a revolving loan fund that a state could use, in
turn, to make loans to community colleges to finance new
construction or modernization projects. The legislation ensures
that funding is used for facilities that are primarily used for
instruction, research, or student housing and requires half of
the funds be used for projects that meet green building
standards.
Early Learning Challenge Fund
The purpose of Title IV of H.R. 3221 is to fund competitive
grants to states that will leverage standards reform and fund
quality initiatives that will increase the number of
disadvantaged children in high quality early learning programs
and ensure more children reach kindergarten with the skills
they need to succeed in school and in life.
Funds are reserved for the joint administration of this
title by the Secretary of Education and the Secretary of Health
and Human Services. The Secretary of Education shall bear
responsibility for obligating and disbursing funds and ensuring
compliance with applicable law and administrative requirements,
subject to an interagency agreement set forth by the
secretaries that shall make clear the specific nature of this
joint administration.
This legislation provides $1 billion in each fiscal year
from 2010 through 2017 for the Early Learning Challenge Fund.
Up to 2 percent is reserved for Federal administration of the
Fund and up to 3 percent is reserved for the national research
activities described in section 405. One-quarter of one percent
is reserved for a competitive grant program for Indian tribes
to develop and implement school readiness plans. Of the
remainder, the Secretary shall reserve up to 65% for Quality
Pathway Grants in fiscal years 2010 through 2012, and the
Secretary shall reserve up to 85 percent for Quality Pathway
Grants in subsequent fiscal years. The remainder shall be
allocated for Development Grants. For fiscal year 2013 and
subsequent fiscal years, the Secretary has discretion to
reallocate funds allocated for Development Grants to Quality
Pathway Grants if needed based on the number and quality of
applicants. Aggregate expenditures by the State and its
political subdivisions on early learning programs and services
may not be less than the level of expenditures for such
programs and services for fiscal year 2006.
Quality Pathways Grants
In awarding grants, the Secretary shall give priority to
States that will use some or all of the funds allocated to them
under the quality set-aside of the Child Care and Development
Block Grant for the activities described in this Title.
Priority is also provided for States that will commit to
dedicating significant increases in coming years in State
expenditures on early learning programs and services and to
states that demonstrate efforts to build public-private
partnerships that are designed to accomplish the purposes of
this title.
To be considered for a Quality Pathways Grant a State must
submit an application to the Secretary that includes specific
criteria. Among these criteria includes a description of the
goals and benchmarks, including a baseline, the State will
establish to lead to a greater percentage of disadvantaged
children participating in higher quality early learning
programs. In addition, States must include a description of how
their system of early learning programs and services will
include the following key components: not later than 12 months
after receiving notice of an award of a grant, early learning
and development standards that are developmentally appropriate
for children birth through age 5, and include social,
emotional, cognitive, and psychical development, and approaches
to learning; a process to ensure State early learning and
development standards are integrated into the instructional and
programmatic practices of early learning programs and services;
a program rating system; an oversight system for the program
rating system; a process to support early learning programs
integrating instructional and programmatic practices that
include ongoing classroom based instructional assessments and
are aligned with the curricula and early learning and
development standards; a comprehensive plan for professional
development of an effective and well-compensated early learning
workforce; outreach strategy to parents and families; a
coordinated system to facilitate screening, referral, and
provision of services related to health, mental health,
disability, and family support; a process for evaluating school
readiness in children used to guide practice and improve
programs, and a coordinated data infrastructure.
The Secretary shall evaluate applications for Quality
Pathways Grants based on the quality of the application, the
priority factors, evidence of significant progress in
establishing a system of early learning that includes the
described key components, and the State's capacity to fully
implement such a system.
States awarded a Quality Pathways Grant must use at least
65 percent of the grant for two or more of the following
activities in order to improve the quality of early learning
programs serving disadvantaged children: initiatives that
improve the credentials and compensation of early learning
providers; initiatives that help early learning programs meet
and sustain higher program quality standards; implementing
classroom observation assessments and data-driven decisions
tied to activities that improve programmatic practices;
financial incentives to early learning programs for undertaking
and maintaining quality improvements; integrating State early
learning and development standards into instructional and
programmatic practices; providing high quality, sustained,
intensive, and classroom-focused professional development;
building the capacity of early learning programs and
communities to promote the understanding by parents and
families of their children's learning and development and of
the State's early learning system; building the capacity of
early learning programs and communities to facilitate
screening, referral, and provision of services related to
health, mental health, disability, and family support; and
other innovative activities approved in advance by the
Secretary. The remainder of the grant may be used for one or
more of the following: implementation or enhancement of the
state's data system; enhancement of the state's oversight
system; and development and implementation of measures of
school readiness that inform the quality improvement process.
States must use the grant such that they prioritize improving
the quality of early learning programs serving children from
low-income families.
A State awarded a Quality Pathways Grants that has made
sufficient progress implementing the requirements of the grant,
may apply to the Secretary to reserve up to 25 percent of the
grant to directly expand access for children from low-income
families to the highest quality early learning programs that
offer full-day services. States must contribute a 20 percent
match for these funds, one half of which may be provided by a
private entity. The Secretary may waive or reduce the State
match if the State demonstrates a need due to extreme financial
hardship.
States awarded a Quality Pathways Grant must contribute
matching funds in the amount of 10 percent in each of the first
two fiscal years, 15 percent in the third fiscal year, and 20
percent in subsequent fiscal years. Private contributions made
as part of a public-private partnership designed to increase
the number of low-income children in high-quality programs may
be considered in meeting the state match. In addition, in-kind
contributions for the acquisition, construction, or improvement
of early learning program facilities serving disadvantaged
children may be used to satisfy the State match. The Secretary
may waive or reduce the State match if the State demonstrates a
need due to extreme financial hardship.
Development Grants
To be considered for a Development Grant, a State must
submit an application that designates a State-level entity for
administration of the grant, coordinate proposed activities
with the State Advisory Council on Early Childhood Education
and Care (created under the Head Start Act), and provide other
information as required by the Secretary. Grants shall be
awarded on a competitive basis to States that demonstrate a
commitment to establishing a system of early learning that will
include the key component described in the legislation. A State
may receive a Development Grant for 3 years but the grant is
not renewable.
The Secretary shall give priority to States who will use
some or all of the funds allocated to them under the quality
set-aside of the Child Care and Development Block Grant for the
activities described in this Title. Priority is also given to
states that will commit to dedicating significant increases in
coming years in State expenditures on early learning programs
and services and to states that demonstrate efforts to build
public-private partnerships that are designed to accomplish the
purposes of this title. States receiving a Development Grant
shall use the award to undertake activities to develop the
early learning system components described in the legislation
and that will allow a State to become eligible and competitive
for a Quality Pathways Grant. States must use the grant such
that they prioritize improving the quality of early learning
programs serving children from low-income families.
States awarded a Development Grant must contribute matching
funds in the amount of 20 percent in the first fiscal year, 25
percent in the second fiscal year, and 30 percent in the third.
Private contributions made as part of a public-private
partnership designed to increase the number of low-income
children in high-quality programs may be considered in meeting
the state match. In addition, in-kind contributions for the
acquisition, construction, or improvement of early learning
program facilities serving disadvantaged children may be used
to satisfy the State match. The Secretary may waive or reduce
the State match if the State demonstrates a need due to extreme
financial hardship.
Research and evaluation
The Secretary of Education and the Secretary of Health and
Human Services are required to carry out four research and
evaluation activities: (1) establish a national commission to
review early learning program quality standards and early
learning and development standards and recommend benchmarks
within 2 years; (2) conduct a national evaluation of the grants
made under this title; (3) support a research collaborative
that supports research on early learning and informs improved
child outcomes; and (4) review the strategic reports of the
State Advisory Councils on Early Care and Education and report
and disseminate on barriers to improving access to high quality
early learning programs.
Reporting requirements
The legislation requires the Secretary to provide annual
reports to the Committee on Education and Labor of the U.S.
House of Representatives and the Health, Education, Labor, and
Pensions Committee of the Senate regarding the activities
carried out under this title. The legislation also requires
States receiving grants under this Title to submit annual
reports to the Secretary on the activities carried out by the
State and includes a list of information that must be included
in the reports.
Prohibitions and special rules
This legislation clarifies that all references to early
learning programs in the Title reflect voluntary participation
by a child in an early learning program. No provision may be
construed to be requiring mandatory participation by a child in
an early learning program. It additionally clarifies that no
provision in this Title should be construed to deny entry to
kindergarten for a child who is legally eligible as defined by
State or local law. The legislation also includes rules
regarding how funds provided under this Title may be used for
assessment and evaluation.
Leading the world in graduation by 2020 through investing in community
college education and workforce training
This legislation establishes the Community College
Challenge Grant Program, which was recently proposed by
President Obama. The legislation authorizes grants to support
innovative pilot programs and policies that will increase the
number of associate degree, certificate, and industry-
recognized credentials, including activities that promote the
transfer of credits from 2-year to 4-year institutions.
The first phase of the program will provide competitive
grants to institutions and states proposing to implement
comprehensive reforms within the community college system to
promote job readiness, academic success and degree completion,
and strengthen ties to employers. This will facilitate access
to and enable success in community colleges, especially for
adult learners seeking to build the skills needed to secure a
good job in a high-growth sector of the economy.
The second phase of the program will look to states to draw
on lessons learned from the first phase and to systematize and
sustain the reforms in the community colleges in their states.
In order to compete for these reform dollars, states must have
an education plan to increase persistence and completion of
postsecondary education as well as a statewide longitudinal
data system that includes all segments of education, including
community colleges.
Online courses provide flexibility important to students
and workers who may juggle multiple commitments, including
family and work or those who live in rural areas without access
to traditional systems of higher education. This legislation
provides competitive grants to develop high quality, rigorously
evaluated, open web-based high school and college-level
courses, which would be available for free, on an open-source
basis, to students, teachers, schools, and companies to help
students gain knowledge, skills, and credentials.
H.R. 3221 provides grants to States for the development of
common data systems to help students, institutions, and states
make well-informed decisions to achieve their educational and
employment goals.
Privacy provision
This legislation includes a privacy provision that limits
the use of information in the statewide data systems to use by
governmental agencies in the state and for those education and
workforce activities authorized by this bill or otherwise
permitted by federal or state law.
IV. Committee Views
The Committee believes that H.R. 3221, The Student Aid and
Fiscal Responsibility Act represents a historic investment in
higher education and expands high-quality educational
opportunities to all Americans. This legislation will give the
Congress the opportunity to create the kind of country and the
kind of future that we all envision for our children.
In his first address to Congress on February 24, 2009,
President Obama set a laudable goal for this nation, by saying:
. . . And so tonight, I ask every American to commit
to at least one year or more of higher education or
career training. This can be community college or a
four-year school; vocational training or an
apprenticeship. But whatever the training may be, every
American will need to get more than a high school
diploma. And dropping out of high school is no longer
an option. It's not just quitting on yourself, it's
quitting on your country--and this country needs and
values the talents of every American. That is why we
will provide the support necessary for you to complete
college and meet a new goal: by 2020, America will once
again have the highest proportion of college graduates
in the world.\2\
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\2\http://www.whitehouse.gov/the_press_office/remarks-of-president-
barack-obama-address-to-joint-session-of-congress/
The Committee agrees, and H.R. 3221 will help us reach this
goal by making college more affordable and accessible.
The Committee believes that this legislation makes critical
investments in our nation's postsecondary education students.
It will invest in the Pell Grant scholarship award, simplify
the FAFSA form to make it easier to apply for federal student
aid, and build on the Congress' efforts to make interest rates
on loans affordable. Further, the legislation will provide more
students with access to low-cost Perkins loans by expanding the
program to many more campuses and strengthen minority-serving
institutions and programs that will help retain and graduate
students.
Further, the legislation makes an unprecedented $10 billion
investment in our community colleges. The Committee believes
that our nation's community colleges are essential to driving
economic recovery and that they provide an important low-cost
option for postsecondary education for many individuals. This
legislation will address our nation's economic crisis by
ensuring that there is adequate support and training to build a
21st century workforce by strengthening partnerships among
community colleges, businesses and job training programs that
will align community college curricula with the needs of high-
wage, high-demand industries.
H.R. 3221 will also ensure that every student can learn in
a safe, energy-efficient and modern environment by renovating
and repairing our nation's schools--a measure that this
Committee and the House have already supported.
The legislation provides important investments in our
children by providing $1 billion per year to help ensure that
the next generation of children can enter kindergarten with the
skills they need to succeed in school. It will transform early
learning programs and improve the school readiness outcomes of
children by insisting upon real change in state standards and
practices. And, it will support states that are ready to expect
more from their early learning programs than just basic health
and safety and are looking to undertake major reform and demand
results. It will build an effective and well-compensated early
childhood workforce, integrate key quality standards, improve
instructional practices, and better support parents in the
early education of their children.
The Committee believes that these important reforms should
be paid for without increasing our nation's deficit. This
legislation is completely paid for by making necessary changes
to the federal student loan programs. The Committee strongly
believes that the reforms in this legislation will result in a
stronger, more reliable, and more efficient student loan
system. H.R. 3221 proposes to convert all new federal student
loans to the Direct Loan program starting in July 2010.
Students will have access to the low-cost loans they need, in
any economy. H.R. 3221 will also upgrade the customer service
borrowers receive when repaying their loans. Rather than force
private industry out of the system, the legislation will
maintain jobs and a role for lenders and non-profits by
allowing them to compete for contracts to service these loans.
This simple change will save $87 billion over the next ten
years.
Finally, as part of the Committee's efforts to secure a
stronger future for our children and the country they will
inherit, this legislation will direct $10 billion of these
savings to pay down the country's deficit.
INVESTING IN STUDENTS AND FAMILIES
Significantly increasing the pell grant award
The Committee believes boosting the nation's investment in
the Pell Grant program is essential to ensuring access and
making college more affordable for students and families. Since
its inception in 1972, the Pell Grant scholarship has opened
the door to postsecondary education for millions of low- and
moderate-income students. However, over the last several years,
the purchasing power of the Pell Grant has declined. Today, the
maximum Pell Grant covers only one third of the average price
of attendance at a public four-year institution compared to
more than two-thirds in 1980.
In the last three years, the Congress has renewed its
commitment to the purchasing power of the Pell Grant award.
Both this Committee and the Committee on Appropriations have
made significant investments in increasing the maximum award;
increasing the award by 32 percent since 2006.
The Committee believes that a continued investment in the
Pell program is paramount to ensuring that all students who
choose to attend postsecondary education, regardless of income,
are able to pursue their academic goals. This legislation
builds on the recent investments by ensuring that the maximum
Pell grant award continues to increase with the cost of living
and setting increases in the maximum award to the Consumer
Price Index plus 1 percentage point. Under this bill, the
maximum award is estimated to rise from $5,350 in the 2010-2011
academic year to $6,900 in the 2019-2020 academic year.
This change will not only dramatically increase the maximum
Pell award, but will put the Pell grant on a trajectory that
students and families can count on. The Committee believes that
Federal programs should ensure that students and families can
begin to plan for college, including how to pay for college
costs, years before entering into college. By indexing the
maximum award to the cost of living, students and families will
be able to project an estimated Pell grant award years prior to
entering college- and important planning tool.
Finally, this investment will not only ensure that eligible
students receive a higher grant award, but that more students
will be eligible for the grant. Coupled with recent changes in
the needs analysis formula passed by the Congress in the
College Cost Reduction and Access Act and the Higher Education
Opportunity Act, the increased award provided for in this
legislation will ensure that more students will have access to
postsecondary education.
Increasing postsecondary access and completion
The United States has long been a global leader in
postsecondary education, but recently our advantage has
slipped. According to the OECD, while the U.S. ranks 7th in
terms of the percentage of 18-24 year olds enrolled in college,
we rank 15th in terms of the number of certificates and degrees
awarded. Further, only about half of all college students
graduate within six years; for low-income students, the
completion rate is closer to 25 percent. These facts are
especially troubling considering the economic returns of having
a college education have increased dramatically over the last
30 years. In 1973, a college graduate with no further schooling
earned 46 percent more per hour than a high school graduate. In
2007, the differential was 77 percent. According to a recent
report by the Council of Economic Advisors, the jobs of
tomorrow will require at least some postsecondary training. The
Committee believes that there is a great need to prepare,
encourage, and support our nation's students in their pursuit
of a higher education to ensure that they not only have the
access to postsecondary education, but that they enroll in and
complete their programs of study.
The Committee believes that states, institutions of higher
education, non-profit philanthropic organizations, and other
organizations with experience in college access and completion
are critical partners in ensuring that students have access to
high-quality and affordable higher education and that they
succeed and complete their education. This legislation actively
engages these partners by encouraging innovative efforts at the
state and local levels to ensure that President Obama's goal of
greatly increasing our nation's college graduates is realized.
This legislation seeks to increase postsecondary access and
success for all students, but especially for underserved
populations. The Committee encourages States to focus efforts
on students from groups that are underrepresented in higher
education to address the inequities between groups of students
and ensure that all Americans, regardless of race or income,
have the opportunity to succeed. References in the legislation
to ``students from groups that are under-represented in
postsecondary education'' and ``high-need populations''
includes, but is not limited to, nontraditional students (as
defined in the Higher Education Opportunity Act of 2008),
students from groups defined as special populations under the
Carl D. Perkins Career and Technical Education Act of 2006, and
groups underrepresented both in postsecondary education overall
and in certain degree, certificate or credential programs. All
outcome reporting should be disaggregated by gender, race,
ethnicity, age and special population category.
It is the intent of the Committee that the states receiving
grants under the State Innovation and Completion Fund may
distribute those funds to entities that work with borrowers to
avoid delinquency and default, provide assistance with entrance
and exit student loan counseling to borrowers and assistance to
borrowers in selecting a loan repayment plan and in applying
for any loan cancellation, forgiveness, deferment or
forbearance to which the borrower may be eligible.
A number of states have already begun initiatives to
implement new practices aimed at increasing degree and
certificate production; this funding would further support such
innovation, allowing states to capitalize on other funding in
collaboration with federal funds. It is the intent of the
Committee that states may not, however, use this funding to
decrease or otherwise supplant other funding dedicated to
postsecondary education.
The Committee encourages the Secretary of Education to
prioritize under the Innovation in College Access and
Completion National Activities program, program approaches that
advance knowledge about, and adoption of, policies and
practices that increase the number of students prepared to
successfully pursue, enter and successfully complete
postsecondary degrees or certificates as described in sections
801 and 403 of the Higher Education Act.
Continuing historic investments in Historically Black Colleges and
Universities, and Hispanic-Serving Institutions, Tribal
Colleges, Alaska Native and Native-Hawaiian serving
institutions, Predominately Black Institutions, and Asian
American and Pacific Islander serving intuitions, and Native
American serving institutions
Historically Black Colleges and Universities, Hispanic-
Serving Institutions, Tribal Colleges, Alaska and Hawaiian
Native, Predominately Black Institutions, institutions serving
Asian American and Pacific Islanders, and institutions serving
Native Americans are critical to the nation's economic and
social well-being. As the growth in the nation's population
increasingly reflects the diversity of the students at these
institutions, the Committee believes that this mandatory
funding is an investment in our future. By educating the
nation's emerging majority populations, these institutions
represent the vanguard of the country's potential and promise
and should be appropriately supported.
This Committee first recognized the need for significant
investment in these institutions with the passage of the
College Cost Reduction and Access Act two years ago. This
legislation continues this important investment for the next
ten years; recognizing the continued critical role that these
institutions have to serve.
The importance of these unique institutions is underscored
by the fact that they provide postsecondary educational
opportunities specifically tailored to students who
traditionally have been denied access to adequately funded
elementary and secondary schools, especially low-income,
educationally disadvantaged students. Additionally, a high
proportion of students attending these institutions are the
first in their family to attend college.
FAFSA simplification
The Committee believes the current application for federal
student aid is complicated and burdensome, asking students and
their families to answer as many as 153 questions, many of
which have little or no impact on the amount of financial aid
that students receive. The length and difficulty of the
application process can undermine efforts to increase college
enrollment with student aid. The implications of this lengthy
and difficult application process on current and potential
students can be profound. One analysis by the American Council
on Education found that there are 1.5 million enrolled students
who are likely eligible for Pell grants (and other federal
student aid) but fail to apply, due in part to the complicated
aid application.
The Committee recognizes recent work by the Department of
Education, the Internal Revenue Service, and others in the
Administration. With the authority provided by Congress in the
Higher Education and Opportunity Act, the Secretary Duncan has
already announced some significant steps to improve the web-
based application process for many students through improved
use of skip-logic. In addition, the Education and Treasury
Departments have announced that they will give those who apply
during the relevant academic year to import data from their
income tax filings from the IRS, further simplifying the
process.
With these changes, every applicant will find the process
substantially easier to navigate and complete, a small number
will find their financial aid awards increased, and no one will
see aid reductions The Committee encourages the Department of
Education to make use of its authority to start the FAFSA
process earlier, so that students can apply at the beginning of
their senior year in high school. Having early, real
information about financial aid can affect low income students'
college plans. As it stands, students receive financial aid
information after they apply to and are accepted to college,
too late for many students and families to make changes to
their enrollment plans. Earlier, more accurate information will
help students and families plan for affordable college options,
helping to reduce student debt in the long term. This strategy
is only effective if it starts no later than the fall of the
senior year of high school.
STUDENT LOAN REFORM
Students and families have become increasingly reliant on
the federal student loan programs to help finance their
postsecondary education. As a result, the Committee is
committed to ensuring that every eligible student and family
can access these loans so critical toward helping pay today's
college costs. The turmoil in the U.S. credit markets has
shown, however, that the federally guaranteed student loan
program is an unreliable source of funds for students and
families. Over the past year, this program has become dependent
not only on the Federal guarantee of borrower repayment and
taxpayer subsidies paid to financial institutions, but also
dependent on the Federal Government for the very loan capital
provided to borrowers. On the other hand, despite the stresses
in the credit markets, students and families continued to
access Federal student loans under the Direct Loan Program with
no interruptions. Moreover, costs to the taxpayers of the
Direct Loan Program are significantly less than those of the
federally guaranteed program. The Committee believes that
prudence dictates the time has come to end the entitlements for
financial institutions that lend to students and instead take
full advantage of the Direct Loan Program's low-cost and stable
source of capital so students are ensured access to loans. By
relying on competitive, private-sector entities to service
loans, students and families can be provided with high-quality
services. This new approach, consistent with the President's
vision, will save $87 billion over the next 10 years. In
addition to this reform, the Committee believes it is also time
to modernize and expand the Perkins Loan Program so that more
colleges can participate and more students can receive access
to greater aid.
Instability of the Federal Family Education Loan Program
The federally guaranteed loan program, known as the Federal
Family Education Loan Program (FFELP), has become unstable and
unreliable and can no longer be depended upon to ensure
students' and families' access to Federal student loans. Over
the past year, turmoil in the U.S. credit markets has made it
impossible for many lenders, and difficult for others, to
secure private capital with which to make student loans. As a
result, many lenders that once participated in the FFELP have
pulled out of the program and are no longer making loans.
In April 2008, the Committee passed the Ensuring Continued
Access to Student Loans Act of 2008, which was enacted into law
the following month (Public Law No: 110-227). The Act provided
the Secretary of Education with the authority to help fund the
Federal student loans made by financial institutions to
students and families, or to buy Federal student loans from
financial institutions, upon a determination that there was an
inadequate availability of loan capital to meet the demand for
loans. The Act further required that any purchase by the
Secretary be revenue-neutral or beneficial to the Federal
Government.
Throughout 2008 and 2009, the Department of Education
established several support programs to provide FFELP lenders
with capital, who in turn used the capital to make loans to
students and families. The reliance by FFELP lenders on the
Department's support programs has been startling. As of July
22, 2009, the Department has purchased over $14.6 billion in
Federal student loans put up for sale by FFELP lenders.
Moreover, the Department has funded an additional $31.2 billion
of the loans made by FFELP lenders during the 2008-2009 school
year.
Clearly, the FFELP has become dependent on taxpayer funds
to make loans to students and families. Overall, the Department
of Education has financed over 60 percent of the 2008-2009
FFELP loan volume to date. When combined with Direct Loans,
Education has financed over 70 percent of all Federal student
loans made during the 2008-2009 school year.
William D. Ford Direct Loan Program
Established in 1993, the Direct Loan Program provides loans
directly to students, through the student's school, with loan
capital secured from the U.S. Treasury. As a result, the Direct
Loan Program has been insulated from the turmoil in the credit
markets, and loans to students and families have flowed without
interruptions or the need for any back-stop measures similar to
what was required for the FFELP.
Over the course of the last year, the growth in the Direct
Loan Program has increased significantly. The number of schools
that have moved to the Direct Loan Program has increased by
over 45 percent, from 1,186 in school year 2007-2008 to over
1,700 in 2008-2009. Over the same time period, the number of
loans disbursed under the Direct Loan Program increased by 66
percent, from 3.2 million to 5.3 million; and the overall
amount of loans made under the program increased by 60 percent,
from $13.8 billion to over $22 billion.
To participate in the Direct Loan Program, all schools must
first be eligible and certified by the Department of Education.
Once eligible and certified for the Direct Loan Program, the
school must send an e-mail request to the Department to
actively participate in the Direct Loan Program. Once approved
and in order to begin processing Direct Loans and transmit and
receive Direct Loan data electronically, the school must set up
an electronic email account to exchange information with the
Department as well as a bank account with the Department to
receive the federal funding that is used to provide Direct Loan
proceeds to borrowers. To a large degree, many schools, in
particular those that disburse Pell Grants to students, are
already familiar with the Department's information technology
systems that are used to provide Direct Loans to students. The
Department's ``Common Origination and Disbursement (COD)''
system is used to deliver both Pell Grant funds and Direct Loan
funds to schools.
Schools that have recently transitioned to the Direct Loan
Program have reported high levels of satisfaction with the
program. In a June 2009 survey of schools that recently
transitioned, the National Association of Student Financial Aid
Administrators found that 80 percent of the schools surveyed
found making the switch to the Direct Loan Program was easy. In
addition, 84 percent of the schools reported that the
Department of Education was helpful in providing assistance for
the conversion. Moreover, 80 percent of the schools reported
that they were able to convert to the Direct Loan Program
within four months.
Providing for a stable, reliable, and efficient student loan program
Now more than ever, Americans need affordable, quality
education opportunities to help make our economy strong and
competitive again. The Committee believes this can be
accomplished, in part, by implementing the President's proposal
to move all schools in the country to the Direct Loan program
by 2010, thereby saving the federal government and taxpayers
$87 billion dollars over the next 10 years. While the
legislation directs the Government to originate all student
loans, it also ensures that there is a role for private
industry in providing loan servicing. Moreover, it will ensure
that state and local non-profit agencies, that meet quality and
pricing standards, will participate in servicing student loans
through a minimum volume allocation of the loans of 100,000
borrowers. These reforms mean that student borrowers will have
a reliable stream of funding to finance their college
education, and can rely on quality loan servicing during
repayment. The legislation does not force private industry out
of the system. Rather, the legislation will maintain the jobs
of, and a role for, lenders and nonprofits by allowing them to
compete for contracts that service student loans on an expanded
basis. For example, the Department of Education has already let
major contracts to four large FFELP industry participants to
help service those loans that FFELP lenders found necessary to
sell to the government as a result of the problems in the
credit markets.
Reforming and reinvigorating the Perkins Loan Program
The Committee believes the Perkins Loan Program should be
reformed so that more loans can be made available to students
on more campuses across the country. Currently, Perkins loans
are awarded to students by schools from institutional revolving
funds, which are comprised of Federal capital contributions,
institutional matching funds, and student repayments on
outstanding loans. However, no new Federal capital
contributions have been appropriated since 2004, leaving many
schools and their students without access to low-interest
loans. The legislation will modernize and expand the Perkins
Loan program so more colleges can participate and more students
can receive access to low-cost loans to help pay postsecondary
expenses.
MODERNIZATION, RENOVATION, AND REPAIR
The Committee believes that Title III of H.R. 3221
addresses a number of important issues--the quality of our
nation's public school facilities, student achievement, the
state of the economy, and the state of the environment. The
Committee believes that these issues are interrelated and that
each represents a critical national concern.
President Obama and Congress have already endorsed these
principles by making green school modernization, renovation and
repair part of an allowable use of funds under the state fiscal
stabilization fund in H.R. 1, the American Recovery and
Reinvestment Act. The Committee believes H.R. 3221 is a
critical next step in this effort because it is important to
provide funds specifically dedicated to this purpose. Prior to
ARRA, and with the exception of funding through the Impact Aid
program and through the Department of the Interior for Indian
schools, direct federal support for school construction has
been virtually non-existent since fiscal year 2001 when
Congress appropriated $1.2 billion primarily for emergency
school repair and renovation.
The demand for new and renovated public school facilities
is unprecedented in our nation's history.\3\ A briefing paper
delivered at an Economic Policy Institute forum, Investing in
U.S. Infrastructure, in April 2009, called for $140 billion in
federal funds for capital outlays for low-income school
districts and an ongoing federal role in such funding
comparable to the current federal share of education operations
funding (approximately 10 percent) in order to bring these
districts up to parity with the highest income districts. The
paper argued that such funding is necessary to ensure that
``the nation's public schools are healthy, safe,
environmentally sound, and built . . . to support a high-
quality education.''\4\
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\3\Testimony of Kathleen J. Moore, Director, School Facilities
Planning Division, California Department of Education, Hearing, U.S.
House of Representatives, Committee on Education and Labor, Modern
Public School Facilities: Investing in the Future, February 13, 2008
(http://edlabor.house.gov/testimony/2008-02-13-KathleenMoore.pdf).
\4\Good Buildings, Better Schools, Filardo, M., Economic Policy
Institute Briefing Paper, April 29, 2008.
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Need and disparity
The most recent comprehensive estimates of the national
need for school construction and renovation were made in 1995
($112 billion, U.S. General Accounting Office\5\ (GAO)\6\),
2000 ($127 billion, National Center for Education Statistics\7\
(NCES)), 2001 ($322 billion, National Education Association\8\
(NEA)), and 2008 ($254.6 billion, American Federation of
Teachers (AFT))\9\.
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\5\Condition of America's Schools, Government Accounting Office,
1995 (GAO/HEHS-95-61).
\6\In 2004, the General Accounting Office was renamed the
Government Accountability Office. The Committee will use ``GAO'' to
refer to both.
\7\Condition of America's Public School Facilities: 1999, National
Center for Education Statistics.
\8\Modernizing Our Schools: What Will It Cost?, National Education
Association, 2000.
\9\Building Minds, Minding Buildings: School Infrastructure Funding
Need, A state-by-state assessment and an analysis of recent court
cases: 2008, American Federation of Teachers.
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Several studies highlight the inadequacy of school
facilities. In 2009, the American Society of Civil Engineers,
on its national infrastructure report card, gave America's
public schools a D.\10\ A 2005 survey of school principals by
NCES found that fifty-two percent of schools had no science
laboratories, thirty percent had no art rooms, nineteen percent
had no music rooms, and seventeen percent had no gymnasium.\11\
A 2004 NCES report found that one school in three had temporary
buildings as the primary learning space for at least 160
students, and that in one in five schools, teachers routinely
had to use a building's common areas for instructional
purposes.\12\
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\10\http://www.infrastructurereportcard.org/fact-sheet/schools.
\11\Public School Principals Report on Their School Facilities:
Fall 2005, Institute of Education Sciences, National Center for
Education Statistics.
\12\Characteristics of Schools, Districts, Teachers, Principals,
and School Libraries in the United States 2003-2004, Schools and
Staffing Survey, National Center for Education Statistics.
---------------------------------------------------------------------------
Disparities in the condition of our schools are also well-
documented. In 1996, GAO reported, in a follow-up to an earlier
study, that on every measure--inadequate buildings or building
features, unsatisfactory environmental conditions, etc.--the
same subgroups--schools in central cities, western states, and
schools serving higher percentages of minority or low-income
students--reported having more significant problems.\13\
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\13\America's Schools Report Differing Conditions, Government
Accounting Office, 1996 (GAO/HEHS-96-103).
---------------------------------------------------------------------------
In 2006, a report by Building Educational Success Together
(BEST) concluded that the GAO and NEA estimates ``grossly
underestimated'' the need for school improvements, and
concurred with the 1996 GAO finding that facilities in low-
income and minority-serving areas tended to be in significantly
worse condition. The report also concluded that despite
significant State and local expenditures on school construction
and renovation from 1996-2004, ``there continue to be millions
of students in substandard and crowded school conditions.''\14\
---------------------------------------------------------------------------
\14\Growth and Disparity: A Decade of U.S. Public School
Construction, Building Educational Success Together, 2006.
---------------------------------------------------------------------------
It is the Committee's intent that funds authorized by this
bill be used to ensure that all children have access to a high-
quality public school facility. The Committee recognizes that
facility quality disparity is most likely to occur in low-
income areas. Accordingly, the Committee encourages local
educational agencies to take care to ensure that the needs of
low-income and rural schools are addressed by giving priority
to schools where modernization, renovation, and repair will
most benefit students, teachers, and other staff and ensuring
that the schools are safe, healthy, conducive to teaching and
learning, energy efficient, and environmentally sound.
Green Schools
A 2006 report concludes that a green school (1) uses one-
third percent less energy than a conventional school; (2)
reduces harmful carbon dioxide emissions by forty percent,
which helps reduce global climate change; (3) uses thirty
percent less water; (4) has better lighting and temperature
controls, which promotes higher student achievement; and (5)
has a more comfortable indoor environment, improved ventilation
and indoor air quality, which result in short-term ($96,760 per
year) and long-term savings as a result of green building.\15\
The average national school construction cost is $150 per
square foot; building green adds only $3 per square foot.
According to the study, the long-term savings from green
buildings are $70 per square foot.\16\
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\15\Greening America's Schools, Kats, G., 2006
\16\Ibid.
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The Committee believes that green building can serve a
number of purposes. Such building will directly benefit both
the larger environment and the indoor environment. The
Committee further believes that green building will improve the
ability of teachers to teach and students to learn as well as
the health of students, teachers, and other school staff.
The Committee believes that a critical component of the
success of this bill will be local educational agencies'
knowledge of best practices in school construction,
modernization, renovation, and repair as they relate to green
building.
The bill directs States to develop state-level voluntary
guidelines for high-performing school buildings. The Committee
encourages States, in developing the energy efficiency
components of such guidelines, to look for direction to the
definition of such plans in H.R. 579, the School Building
Enhancement Act, introduced by Representative Rush Holt. That
bill defines such plans as including standards for school
building design, construction, and renovation; and proposals
for the systematic improvement (including benchmarks and
timelines) of environmental conditions in and around schools
throughout the State. H.R. 579 also encourages purchasing
environmentally preferable products for instruction and
maintenance, increasing the use of alternative energy fuels in
school buses, and maximizing transportation choices for
students, staff, and other members of the community.
In addition to the voluntary state guidelines for high-
performing school buildings required in the bill, the Committee
encourages states to establish voluntary guidelines concerning
performance monitoring, use of Energy Star equipment,
alternative fuels buses, anti-idling measures, and other
measures the state believes will contribute to high-performing
schools.
The Committee encourages the Secretary, in carrying out the
Department's technical assistance responsibilities under H.R.
3221, as amended, to examine the Illinois Resource Guide for
Healthy, High-Performing School Buildings. The recommendations
and information in the guide are intended to provide school
administrators, school boards and other community members with
guidance to make informed decisions about health and energy
efficiency issues important to schools. The guide's objective
is to promote long-term thinking and to ensure that school
buildings are compatible with the goals of improving learning
environments, reducing operating costs, supporting health and
safety, and protecting our natural environment.\17\
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\17\For a discussion of a case study in building a modern, green
school, see, Testimony of Mary Cullinane, Director, Innovation and
Business Development Team, Microsoft Corporation, Hearing, U.S. House
of Representatives, Committee on Education and Labor, Modern Public
School Facilities: Investing in the Future, February 13, 2008 (http://
edlabor.house.gov/testimony/2008-02-13-MaryCullinane.pdf).
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Impact on teaching and learning
The Committee believes that while equity alone justifies
federal support for local educational agencies to ensure that
every child has access to a high-quality public school
facility, such support also is essential to closing the
achievement gap. The Committee believes that the relationship
between the quality of school facilities and student
achievement and teacher performance and retention are
positively intertwined.\18\ Research demonstrates that better
school facilities result in improved student achievement and
teacher recruitment and retention. The physical condition of
schools also affects student and teacher health.
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\18\See, e.g., Testimony of Judi Caddick, Teacher, Memorial Junior
High School, Illinois Education Association, Lansing, Illinois,
Hearing, U.S. House of Representatives, Committee on Education and
Labor, Modern Public School Facilities: Investing in the Future,
February 13, 2008 (http://edlabor.house.gov/testimony/2008-02-13-
JudiCaddick.pdf).
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According to a 2004 report by the 21st Century School Fund,
inadequate school facilities can result in alienated students,
low staff morale, high teacher attrition, the inability to
provide specialized curricula, reduced learning time,
distractions from learning, reduced ability to meet special
needs, lack of technological proficiency, health problems for
students and staff, safety hazards, and less supervision of
student behavior.\19\
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\19\For Generations to Come, 21st Century School Fund, 2004.
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It is the Committee's intent that local educational
agencies use funds provided under this subtitle for the
installation or upgrading of educational technology
infrastructure such as wiring and other projects, including
energy efficient improvements, to bring school facilities
technologically up-to-date.
In its 2005 survey, NCES noted that a key reason for school
construction and renovation is student and teacher safety, but
that building quality also affects the context for learning,
such that lighting, noise reduction, air quality and other
factors can affect student achievement and behavior. NCES
further noted that building quality affects teacher retention--
forty percent of teachers who transferred schools and thirty-
nine percent who left teaching cited the need for significant
school repairs as a source of their dissatisfaction.\20\ NCES
found that one-third of school principals cited at least one
environmental factor\21\ as interfering with their ability to
deliver instruction.
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\20\Another study finding a relationship between facility quality
and teacher retention is The Effects of School Facility Quality on
Teacher Retention in Urban School Districts, Buckley, J., Schneider,
M., and Shang, Y., 2004.
\21\Those factors include: air conditioning, size/configuration of
rooms, acoustics or noise control, ventilation, heating, physical
condition, indoor air quality, natural lighting, artificial lighting.
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The Committee encourages school districts that undertake
projects to reduce or eliminate human exposure to classroom
noise and environmental noise pollution, and the Secretary, in
providing technical assistance concerning reducing background
noise and reverberation in classrooms, to consider the American
National Standards Institute (ANSI) approved Standard S12.60-
2002, [Acoustical Performance Criteria, Design Requirements,
and Guidelines for School].
Impact on health
A 2004 study mandated by the Elementary and Secondary
Education Act of 1965, as amended by the No Child Left Behind
Act, and funded by the Department of Education found that
``overall evidence suggests that poor environments in schools,
due primarily to the effects of indoor pollutants, adversely
affect the health, performance, and attendance of students.''
Specifically, the study found that indoor environmental quality
can influence health outcomes, which may, in turn, influence
student and teacher performance directly and indirectly.\22\
The study cites the 1995 GAO finding that thirty percent of
schools reported unsatisfactory ventilation.
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\22\A Summary of Scientific Findings on Adverse Effects of Indoor
Environments on Students' Health, Academic Performance and Attendance,
U.S. Department of Education, Policy and Program Studies Service, 2004.
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The Centers for Disease Control advises that asthma
accounts for more than fourteen million missed school days per
year.\23\ A 2006 report by the American Federation of Teachers
concludes that ``[p]oor air quality in schools contributes to
students' asthma, absences due to illness, difficulty
concentrating, and lower achievement.''\24\
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\23\http://www.cdc.gov/asthma/children.htm.
\24\Building Minds, Minding Buildings, American Federation of
Teachers, 2006.
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The Committee further recognizes that although lead solder
with more than 0.2 percent lead and plumbing fixtures with more
than eight percent lead were banned in 1987, such products
remain in schools across the country. The Environmental
Protection Agency and the Centers for Disease Control both have
concluded that there is no safe level of exposure to lead.
Exposure to lead early in life has been linked to cognitive
deficits, attention deficits, and extremely aggressive
behavior.
Impact on community
According to the 2006 BEST study, the difference between
good and poor quality facilities also affects the communities
in which they are located. School quality has a direct,
positive impact on residential property values and can improve
a community's ability to attract businesses and workers.\25\
This point also is supported by Representative Bob Etheridge's
testimony at the February 13, 2008, Committee hearing on this
issue.\26\
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\25\Growth and Disparity: A Decade of U.S. Public School
Construction, Building Educational Success Together, 2006.
\26\Testimony of Representative Bob Etheridge, Hearing, U.S. House
of Representatives, Committee on Education and Labor, Modern Public
School Facilities: Investing in the Future, February 13, 2008 (http://
edlabor.house.gov/testimony/2008-02-13-BobEtheridge.pdf.
---------------------------------------------------------------------------
The BEST study also concluded that investments in school
facilities bring money into local economies through job
creation and supply purchases and can help revitalize
distressed neighborhoods. The Committee is persuaded by these
findings and expects that this bill will produce positive
results in our communities.
Impact on economy
Direct federal investment in school construction and
renovation could provide an immediate boost to our economy and
generate jobs. Federal funding for the modernization,
renovation, or repair of school facilities could be spent
quickly and efficiently to address the loss of 1.3 million jobs
in the construction industry over the last year and a half.\27\
---------------------------------------------------------------------------
\27\See http://www.bls.gov/news.release/empsit.nr0.htm.
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Hurricanes Katrina and Rita
H.R. 3221 provides additional support for Gulf Coast
schools still recovering from damage caused by Hurricanes
Katrina and Rita. The Gulf region, primarily New Orleans, has
hundreds of millions of dollars in unmet school modernization,
renovation, repair and construction need, including as a result
of Hurricanes Katrina and Rita. Prior to Hurricanes Katrina and
Rita, the Recovery School District of Louisiana (RSD) already
had a deferred maintenance infrastructure deficit of
approximately $1 billion. The hurricanes caused an additional
$800 million in damage to the district's schools. The funding
from this bill will help the district, and others in the Gulf
region, meet these important and timely needs as they continue
to recover from the hurricanes.\28\
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\28\See also Testimony of Paul Vallas, Superintendent, Louisiana
Recovery School District, Hearing, U.S. House of Representatives,
Committee on Education and Labor, Modern Public School Facilities:
Investing in the Future, February 13, 2008 (http://edlabor.house.gov/
testimony/2008-02-13-PaulVallas.pdf).
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Davis-Bacon
Under the bill, the construction, modernization, repair,
and renovation projects paid for, in whole or in part, with the
grants made available by this legislation are subject to Davis-
Bacon prevailing wage requirements. Davis-Bacon prevailing wage
rules ensure that taxpayer dollars are not used to undercut
local wage rates. These rules require contractors to pay the
local prevailing wage to their employees.
Davis-Bacon requirements will help control costs, ensure
higher quality work, and improve safety. Studies have shown
that, where prevailing wages are not required, contractors
compete on the basis of labor costs, frequently resulting in
poor construction quality as well as substantial cost and time
overruns due to cheaper workers' lower levels of skill,
productivity, and training.\29\ Where prevailing wages are
paid, higher rates of productivity, safety, and building
quality more than offset the cost of higher wages. For example,
one study by the Mechanical Electrical Sheet Metal Alliance,
focusing on highway and bridge construction, found that workers
who were paid more than double the wage of low-wage workers
were able to build 74.4 more miles of highway and 32.8 more
miles of bridges for $557 million less.
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\29\See generally, Peter Philips, ``Square Foot Construction Costs
for Newly Constructed State and Local Schools, Offices and Warehouses
in Nine Southwestern and Intermountain States 1992-1994'' Prepared for
the Legislative Education Study Committee of the New Mexico State
Legislature, September 6, 1996.
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Davis-Bacon requirements help save federal, State, and
local revenue. By creating family supporting jobs in local
communities that do not drive workers' wages down, these
requirements ease the burden on public programs and provide
support for more economic activity. Studies have found that
repeal of local prevailing wage laws results in lower incomes,
loss of sales tax revenues, and a general loss of economic
activity.\30\ These are precisely the types of effects the
Committee intends to avoid by providing federal assistance to
local communities consistent with Davis-Bacon.
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\30\Michael P. Kelsay et al., ``The Adverse Economic Impact from
Repeal of the Prevailing Wage Law in Missouri,'' Council for Promoting
American Business, January 2004.
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For the reasons stated above, the Committee believes
passage of this bill will provide significant educational
benefits for our nation's students, health benefits for
students, teachers, and others who work in our schools,
financial benefits for schools resulting from energy savings,
economic benefits for hundreds of thousands of American workers
and their families, and environmental benefits.
EARLY LEARNING CHALLENGE FUND (TITLE IV)
Over the past several decades, research on the brain and on
child development has established that learning begins at birth
and that the first five years of life have a lasting effect on
children's learning, health, and behavior. During the first
three years of life alone, the brain goes through its most
dramatic development: children learn to walk, speak, reason,
talk, learn, trust, and to interact with others.\31\ This
developmental period is enormously consequential, laying the
foundation for a child's cognitive, social, emotional, and
physical development.\32\ It can be a time when a child
experiences supportive and consistent relationships with
parents and other caregivers that fosters healthy development
and teaches children to trust others and their own abilities,
or it can be a time when children fail to receive the
supportive relationships and early learning opportunities their
growing brains need, setting a course that can take years to
remediate.
---------------------------------------------------------------------------
\31\Submitted Testimony, Matthew Melmed, Submitted to the Committee
on Education and Labor, U.S. House of Representatives Hearing
``Investing in Early Education: Paths to Improving Children's
Success,'' January 23, 2008.
\32\National Research Council and Institute of Medicine (2000).
From Neurons to Neighborhoods: The Science of Early Child Development.
Jack P. Shonkoff and Deborah A. Phillips, Eds. Washington, D.C.:
National Academy Press.
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As a result, the early years present an important
opportunity for policymakers. By investing in programs that
support families in their efforts to get their children off to
a good start, we can prevent problems from developing that are
more difficult and costly to address later in life. The
Committee strongly believes that improving access to high-
quality early learning programs is an integral component of
comprehensive school reform and is essential to ensuring
America can compete in the global economy in the decades to
come. The Early Learning Challenge Fund capitalizes on the
importance of these early years by creating an investment that
will leverage standards reform and fund initiatives that
together will increase the availability of high-quality early
learning programs for disadvantaged children from birth through
age 5 so that all children can fulfill their potential. The
Committee appreciates President Obama's recognition of the
importance of early childhood to lifelong success and looks
forward to working with the President to ensure that all
children receive the early learning opportunities they need to
thrive.
Nearly 12 million children under age 5, including 6 million
children under age 3 are regularly cared for by someone other
than their parents.\33\ Child care is usually a family's
highest or second highest budget item. Many families struggle
to find and afford high quality early learning programs for
young children. Unfortunately, the quality of early learning
settings varies greatly, and despite some progress, early
learning programs are held to inconsistent standards among and
within states. Large national evaluations of child care find
the average quality to be mediocre.\34\ and child care costs
are frequently a family's highest expense or second highest
family expense after housing.\35\ Center-based child care for
one child costs between $3,000 and $13,000 per year, putting it
out of reach for many working families.\36\ Therefore, it can
be very difficult for families to find the kind of high quality
early learning programs that appropriately support their
child's development or that have the standards needed to help
close the achievement gap.\37\ The Committee believes that
without significant new public investment in the quality of
early learning programs, many children will be unable to attain
the benefit from early learning programs that would otherwise
help them arrive at kindergarten ready to succeed.
---------------------------------------------------------------------------
\33\Iruka, I. U., and Carver, P. R. (2006). Initial Results From
the 2005 NHES Early Childhood Program Participation Survey (NCES 2006-
075). U.S. Department of Education. Washington, DC: National Center for
Education Statistics.
\34\Cost, Quality, and Outcomes Study Team. (1995). Cost, quality,
and child outcomes in child care centers: Key findings and
recommendations. Young Children, 50, 40-44; Peisner-Feinberg, E. S.,
Burchinal, M. R., Clifford, R. M., Culkin, M.L., Howes, C., Kagan, S.
L., Yazejian, N., Byler, P., Rustici, J., & Zelazo, J. (1999). The
children of the cost, quality, and outcomes study go to school:
Executive summary. Chapel Hill: University of North Carolina at Chapel
Hill, Frank Porter Graham Child Development Center.
\35\Parents and the High Price of Care (2009). National Association
of Child Care Resource and Referral Agencies. http://www.naccrra.org/
docs/reports/price_report/Price_Report_2009_execsumm.pdf.
\36\Ibid.
\37\Cost, Quality, and Outcomes Study Team. (1995). Cost, quality,
and child outcomes in child care centers: Key findings and
recommendations. Young Children, 50, 40-44; Peisner-Feinberg, E. S.,
Burchinal, M. R., Clifford, R. M., Culkin, M.L., Howes, C., Kagan, S.
L., Yazejian, N., Byler, P., Rustici, J., & Zelazo, J. (1999). The
children of the cost, quality, and outcomes study go to school:
Executive summary. Chapel Hill: University of North Carolina at Chapel
Hill, Frank Porter Graham Child Development Center.
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The long-lasting benefits of high quality early learning
programs are well documented, and these programs are of
particular benefit to disadvantaged children. High quality
programs improve academic achievement, reduce the need for
special education, increase employment and earnings, lower
rates of teen pregnancy, reduce crime and delinquency, and
ultimately increase our global competitiveness.\38\ Yet despite
our understanding of the importance of quality early learning
environments and the benefits that accrue when we provide
children with high quality early learning opportunities, far
too many of our children spend their time in settings that do
not adequately support their development. The early childhood
system has inconsistent standards among and within States,
which often lack adequate resources to ensure that programs are
of high quality and that children enter kindergarten ready to
succeed. Fewer than half of States require centers to encourage
parent involvement and thirteen State pre-kindergarten programs
do not require any site visits to monitor compliance with
standards. Additionally, twenty States do not require child
care providers to have even a high school degree. Currently, no
single State implements all the quality components of a model
early learning system, though States and programs have made
significant progress over the last twenty years in improving
their early childhood systems.
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\38\E.g., Currie, J., & Thomas, D. (1995). Does Head Start Make a
Difference? The American Economic Review, Vol. 85(3), 341-364. U.S.
Department of Health & Human Services, Administration for Children &
Families (2001). Head Start FACES: Longitudinal Findings on Program
Performance, Third Progress Report. Washington, D.C.
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The Committee contends that given the importance of the
first five years of life, substantially more investment in
early childhood is necessary for all of America's children to
have the opportunity to succeed and if America is to compete in
the global economy. The graph below reflects the striking
mismatch between the importance of investing early and the
level of public investment in early childhood.\39\
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\39\Bruner, C., Goldberg, J., & Kot, V. (1999). The ABC's of early
childhood: Trends, information, and evidence for use in developing an
early childhood system of care and education.
The Early Learning Challenge Fund is a bold and wise
investment that recognizes the importance of quality and will
support and advance State reforms that improve the quality of
early learning programs across all settings for all children
from birth through age 5, and particularly for low-income
children. This landmark initiative will challenge States to
develop effective, innovative models that promote high
standards of quality. The Fund will also increase the
transparency of what early learning programs are providing and
how children are doing so that parents can hold states
accountable for their choices and so parents can expect more
for their children. High quality comprehensive early learning
systems, starting at birth, will go a long way toward
eliminating achievement gaps and providing children with the
resources, skills, and tools they need to arrive at school
ready for success. The years prior to kindergarten are about
the most significant in shaping a child's foundation for
learning and school success--and the Early Learning Challenge
Fund will ensure that our investments reflect the importance of
those early years.
The achievement gap
The achievement gap that exists in elementary school and
beyond begins before children enter kindergarten.\40\\41\ For
example, the Early Childhood Longitudinal Study (ECLS)
conducted by the National Center for Education Statistics found
4 year olds from families living below the poverty line are
already 18 months behind their peers.\42\ Moreover, of 4 year
old children from families in the lowest 20 percent of
socioeconomic status, 40.1 percent were proficient in numbers
and shapes, of children from families in the middle 60 percent
of socioeconomic status, 65.3 percent were proficient in
numbers and shapes, and of children from families in the
highest 20 percent socioeconomic status group, 87.1 percent
were proficient in numbers and shapes.\43\ The achievement gap
at kindergarten entry between students from more affluent
families and those from middle and lower income families is
also abundantly clear in this graph using additional data from
the ECLS study.\44\
\40\Lee, J., Grigg, W., and Dion, G. (2007). The Nation's Report
Card: Mathematics 2007. National Assessment for Educational Progress.
Can be accessed at: http:
//nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2007494; Lee, J., Grigg, W.,
and Donahue, P. (2007). The Nation's Report Card: Reading 2007.
National Assessment for Educational Progress. Can be accessed at:
http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2007496
\41\Lee, V.E., and Burkam, D.T. (2002). Inequality at the Starting
Gate: Social Background Differences in Achievement as Children Begin
School. Economic Policy Institute: Washington DC.
\42\Klein, L.G., & Knitzer, J. (2007). Promoting Effective Early
Learning: What Every Policymaker and Educator Should Know. National
Center on Children and Poverty. Columbia University.
\43\Jacobson Chernoff, J., Flanagan, K. D., McPhee, C., and Park,
J. (2007). Preschool: First Findings From the Preschool Follow-up of
the Early Childhood Longitudinal Study, Birth Cohort (ECLS-B) (NCES
2008-025). National Center for Education Statistics, Institute of
Education Sciences, U.S. Department of Education. Washington, DC.
\44\Source: U.S. Department of Education, National Center for
Education Statistics, Early Childhood Longitudinal Study, Kindergarten
Class of 1998-99, Fall 1998.
Unfortunately, children who enter kindergarten behind their
peers have a difficult time catching up.\45\ The Committee
strongly believes that effective investments to minimize the
achievement gap prior to school entry benefits children,
schools, and our nation, and that high quality state-funded
preschool has significant potential to help accomplish this
goal.
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\45\Entwisle, D. R. (1995). The role of schools in sustaining
benefits of early childhood programs. The Future of Children, 5, 133-
144.
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Cost effectiveness of high quality early learning programs
The Committee believes that the cost-benefits of Title IV
of H.R. 3221 make it a sound public investment. Acclaimed
economists like Art Rolnick of the Minneapolis Federal Reserve
and Nobel Laureate and University of Chicago professor James
Heckman, conclude that early childhood interventions are among
the best investments we can make for ensuring that all children
become productive citizens and securing our long-term economic
prosperity. ``Ability gaps between disadvantaged and other
children open up early and children who start ahead keep
accelerating past their peers, widening the gap,'' wrote James
Heckman and Dimitriy Masterov in The Productivity Argument for
Investing in Young Children. ``[Early learning] programs are
likely to generate substantial savings to society and to
promote higher economic growth by improving the skills of the
workforce.'' Nobel Laureate James Heckman points out that
``skill begets skill'' and concludes the longer we wait to
intervene in a child's life, the more difficult it is to be
effective and the more costly it is for society.\46\ By
reducing the need for grade retention, reducing the need for
special education services, increasing academic success,
reducing juvenile crime, and creating a more qualified and
competitive workforce, high quality early learning programs
will ultimately save more in public funding than they cost to
support.
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\46\Heckman, J. (May 2006). Keynote speech at the National Summit
on America's Children. U.S. House of Representatives, Washington, DC.
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The Early Learning Challenge Fund
The Early Learning Challenge Funds challenges Governors to
develop new approaches to raising the bar across State early
learning settings. It will promote standards reform of State
early learning programs serving children from birth through age
5 in order to support healthy development and improve the
school readiness outcomes of young children. By leveraging
standards reform and funding quality initiatives, it will
ensure more disadvantaged children participate in high-quality
early learning programs that meet their developmental needs and
help them arrive at kindergarten ready to succeed.
The Early Learning Challenge Fund creates an incentive for
States to develop an early learning system that integrate 8 key
components:
Early Learning and Development Standards that lead
to school readiness and are integrated with programmatic and
instructional practices.
Quality Rating System that is evidence-based and
structured with progressive levels of quality that target funds
and provide transparent goals for program improvement.
Program review and oversight that is applied
across all programs and settings and is focused on components
of quality related to school readiness.
Comprehensive professional development system that
can prepare an effective and well-qualified workforce of early
educators, including supporting appropriate levels of training,
education, credentials, and compensation.
Support to parents and families so they are
engaged and supported in their child's early learning.
Coordinated systems to facilitate screening and
referrals for health, mental health, disability and family
support.
A coordinated data infrastructure to collect
essential information on where young children spend their time
and the quality of the programs that serve them.
An age- and developmentally-appropriate curriculum
and assessment system for early learning programs that is used
to support best practices, improve school readiness.
Quality Pathways grants will be awarded to high-capacity
States pursuing models of reform and excellence in early
learning settings for children from birth through age 5.
Innovative plans that already reflect significant progress
toward establishing the core eight elements needed to improve
quality and learning outcomes for children will be rewarded.
States must develop data systems that will provide transparency
on the number of children in high quality settings and require
States to make progress increasing the number of children, in
each age group, in The Committee emphasizes that state
applications must demonstrate that improvements to the early
learning system must address settings for infants, toddlers,
and preschoolers. A state whose primary or sole focus is on
improving the quality of early learning settings for 4-year-
olds would not be meeting the expectations of this grant.
Moreover, in reviewing applications, the Committee intends the
Secretary to recognize that states need to strive to support
high quality full-day early learning programs because of their
importance in meeting the needs of working families as well as
meeting the needs of children. In addition, though the
allowable use of funds in the legislation
Development grants will be awarded to States that show
promise for strengthening and expanding their early learning
system but who need additional assistance to launch a
comprehensive standards-based system. Development grants are
not renewable because the Committee believes that if States
implement them effectively, States will have positioned
themselves to be competitive for a Quality Pathways Grant after
three years.
The Committee believes the Early Learning Challenge Grants
will transform early learning programs and practices and become
an integral part of a larger effort to reform education in this
country.
Early Learning and Development Standards
The Committee believes Early Learning and Development
Standards reform is essential to the effort to improve early
learning program quality and child outcomes. Accordingly,
States receiving a Quality Pathway grant have 12 months to
complete early learning and development standards that are
developmentally, culturally, and linguistically appropriate for
all children from until kindergarten entry. To adequately
support child development and school readiness, these standards
must address all domains of children's development and
learning, including social, emotional, cognitive, and physical
development and approaches to learning. States with standards
that do not cover all these domains appropriate for infants,
toddlers, and preschoolers must revise their standards
accordingly. In addition, States receiving Quality Pathways
grants have 18 months to conduct an analysis of alignment
between their early learning and development standards with
their program quality standards and with their kindergarten-
grade 3 academic content standards. It is critical that this
alignment reflect the development progression of how children
learn and develop the requisite skills as they move forward
through the early grades. It is important this analysis ensure
the breadth (language, literacy, math, social, emotional,
approaches to learning, science, creative arts, and physical
development) and depth (emphasis within each standard). The
Committee believes it is then critical for states to support
the integration of these standards into early learning program
practices.
Children with disabilities
Over the past decade, the number of identified children
with disabilities and developmental delays under the age of
five has grown substantially, represented by a 70 percent
increase in infants and toddlers with disabilities and a 45
percent increase in preschool children with disabilities. Under
the Individuals with Disabilities Education Act, young children
with disabilities are to be supported in natural settings (the
least restrictive environment), including provision of
specialized services in childcare programs, Head Start Centers,
preschools, pre-K classrooms and other early learning settings.
The Department of Education reports that a majority of states
are making progress in serving children with disabilities in
inclusive programs, with 36 states and territories serving 50
percent or more of their preschoolers with disabilities in
these general early learning programs.
The Early Learning Challenge Fund requires states to
address the needs of young children with disabilities as part
of their broader early learning system and quality improvement
activities. The Committee intends for States to develop early
learning and development standards appropriate for all
children, including children with disabilities. The Committee
encourages states to consider the principles of Universal
Design for Learning in developing such standards in order to
meet this requirement. States should also address, as part of
their plans to improve the capacity of the early learning
workforce, how professional development activities will prepare
all teachers to work with young children with disabilities. The
Committee notes the legislation intends to hold states
accountable for including the needs of young children with
disabilities in their comprehensive plans as well as in
improving the school readiness outcomes of these children.
Children with limited English proficiency
Children with limited English proficiency account for a
growing and significant share of children enrolled in schools
and early learning programs. In some parts of the county, more
than 50 percent of the preschool population comes from non-
English speaking homes.\47\ As a group, these students lag
behind their peers in educational attainment and achievement.
It is estimated that children with limited English proficiency
entering kindergarten know 5,000 fewer words than their English
speaking peers.\48\ As these students progress through the
elementary grades, challenges with English proficiency and
these vocabulary gaps will impact their ability to master
higher order literacy skills, such as reading comprehension and
writing, and challenging academic content. Therefore, there is
an urgent need to design and implement early learning programs
that provide these children with experiences that prepare them
to achieve at high levels and become fluent in English. The
Committee contends these efforts must be driven by empirical
findings rather than ideology and language politics. In the
last decade, advances in research regarding how young children
with limited English proficiency acquire a second language
provide useful guidance for policy development and the
implementation of effective classroom practices for these
children.\49\
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\47\Espinsoa, Linda, ``Challenging Common Myths About Young English
Language Learners,'' Foundation for Child Development, January 2008.
\48\Betty Hart and Todd R. Risley, Meaningful Differences in the
Everyday Experience of Young American Children (Baltimore: Paul H.
Brookes Co., Inc., 1995).
\49\``Challenging Common Myths About Young English Language
Learners,'' Foundation for Child Development, op.cit.
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The Early Learning Challenge Fund requires states to
address the needs of young children with limited English
proficiency as part of their broader quality improvement
activities. States should address, as part of their plans to
improve the capacity of the early learning teacher workforce,
how professional development activities will prepare all
teachers to work with young children with limited English
proficiency. The Committee urges the research activities
carried out under this Title to adequately examine how the
school readiness outcomes of this population can be adequately
addressed and improved. The Committee notes the legislation
intends to hold states accountable for including the needs of
young children with limited English proficiency in their
comprehensive plans as well as in improving the school
readiness outcomes of these children.
Voluntary participation in early learning programs
The Committee notes that nothing in this legislation
requires a child to participate in an early learning program.
Facilities
The Committee notes that the supply of suitable spaces to
house early childhood programs has not kept pace with the
growth of the sector, and the shortage is especially severe in
low-income communities--both urban and rural. For example,
according to a 2007 report by the Advancement Project,
California's Preschool Space Challenge, California currently
lacks preschool-suitable spaces for approximately 117,000 or 21
percent of its four year olds, with most of the deficit
occurring in low-income communities. Because the Committee
acknowledges the need for high-quality early learning program
facilities to support the ultimate goal of preparing children
to be ready to learn when they enter kindergarten. The bill
provides that in-kind contributions for facilities development,
including technical assistance, may be counted toward the State
match. In-kind contributions that could be used for this
purpose include the provision of lien-free land, structures or
leased space, no-interest loans, revolving lines of credit,
construction materials, and labor, in accordance with the
Department of Education regulations at 34 CFR 74.23.
Child care licensing
States cannot improve early childhood education for all
ages without addressing basic health and safety requirements in
child care programs. This should include minimum health and
safety standards, pre-requisite training related to these
health and safety standards and child development, and regular
monitoring and inspections. The Committee expects to address
these and other key licensing issues in the reauthorization of
the Child Care and Development Block Grant so that states will
receive further support and guidance to improve upon these
areas and that children can be safe and healthy when out of
their parents' care.
AMERICAN GRADUATION INITIATIVE
The Committee believes that community colleges are the
backbone of our Nation's educational and workforce systems,
providing post-secondary education and job training to millions
of Americans and serving as the critical pipeline to
postsecondary education, job training, and economic vitality.
Nearly 12 million students are enrolled at the more than
1,000 community colleges across the country. These include
students who are taking for-credit classes as well as those
pursuing apprenticeships, taking developmental courses or
career-prep courses, or taking basic core vocational education
or general education courses necessary to further their
education and achieve their career goals. Community colleges
are essential to strengthening the middle class and providing
the skilled workers necessary to meet our nation's economic and
social challenges. For future workers, community colleges will
be vital--the Bureau of Labor Statistics projects that
occupations requiring an associate's degree or postsecondary
vocational credentials will experience faster growth than those
requiring a bachelor's degree. For dislocated workers,
community colleges are similarly critical--research indicates
that displaced workers who attend a community college
substantially increase their long-term earnings, particularly
if the classes are related to high-growth industries. These
successes are in part due to the flexible nature of community
colleges. They are able to work with employers and the private
sector to address workforce shortages and create tailored
training, partnerships, and apprentice programs for specific
occupations. Community colleges lead the way in preparing
graduates in the fields of green technology, healthcare,
teaching, information technology and clean energy technology--
some of the fastest growing fields in America--and the world.
Yet they are bursting at the seams, heavily under-resourced,
and lack incentives to innovate.
The Committee believes that America's ability to remain
true to our highest ideals--and to maintain our leadership in
the global economy--depends on our ability to transform our
higher education system to provide the relevant knowledge and
skills necessary to compete in a new and changing world.
Economic progress and educational achievement go hand in hand.
And in today's economy, access to higher education institutions
and success in post-secondary education is no longer just a
pathway to opportunity--it is a prerequisite.
To address these and other overarching concerns, H.R. 3221
includes provisions to increase innovation at community
colleges, encourage states to be active participants in
systematic community college reform, develop and make available
free high-quality online education and training courses, and
ensure that educational and employment outcomes are measured
and shared within and among states and with the public.
Further, it is the intent of the Committee that the states
and entities receiving grants under the American Graduation
Initiative should be encouraged to find innovative ways to
address the needs of students and workers. This can include,
but is not limited to the following: adapting college offerings
to the schedules and needs of working students, such as
creating evening, weekend, modular, compressed, or distance
learning formats; augmenting programs and services, including
providing specialized assessments and learning tools,
streamlined registration processes, and specialized job
placement counseling, for vulnerable populations, including
disabled veterans and ex-offenders; enrolling students in
learning communities; and other relevant innovations. The
Committee encourages the design and implementation of
innovative ways to improve retention in and completion of
developmental education courses, including but not limited to
enrolling students in cohorts; accelerating course content;
integrating remediation and college-level curricula and
instruction; dual enrolling students in remediation and
college-level courses; tutoring; providing counseling and other
supportive services; and giving small, material incentives for
attendance and performance.
Use of grants in this section are intended to prepare
students for employment in skilled occupations in high-demand
industries, and the Committee encourages entities to create
programs that aim to close the gaps in enrollment for groups
underrepresented in particular programs and occupations.
In establishing benchmarks and evaluating the use funds,
Congress intends the Secretary to consider the employment of
underrepresented populations in nontraditional occupations for
their gender as defined in the Carl D. Perkins Career and
Technical Education Act of 2006. The evaluation should consider
earnings relative to economic self-sufficiency, a standard of
economic independence calculated or commissioned by the state
which considers the income needs of families by family size,
the number and ages of children in the family and sub-state
geographical considerations.
The Committee intends for entities developing, evaluating
and disseminating high-quality online training, high school
courses, and postsecondary education courses must ensure that
these electronic materials are accessible to individuals with
disabilities by meeting the access standards established by the
U.S. Access Board.
V. Section-by-Section Analysis
Title I--Investing in Students and Families
SUBTITLE A--INCREASING COLLEGE ACCESS AND COMPLETION
Section 101. Federal Pell Grants
The Student Aid and Fiscal Responsibility Act of 2009
amends the Higher Education Act to include mandatory funding
for the Pell Grant. This provides additional mandatory funding
to augment funds appropriated to increase the federal maximum
Pell Grant award by the change in the Consumer Price Index plus
one percent.
The mandatory component of the funding is determined by
inflating the previous year's total and subtracting the maximum
award provided for in the appropriations act for the previous
year or $4860, whichever is greater.
Section 102. College Access and Completion Innovation Fund
This section of the bill amends Part E of Title VII of the
Higher Education Act to include two additional areas of grant
activity for States, institutions of higher education, non-
profit organizations and guaranty agencies designed to improve
post-secondary student success, completion, and post-completion
employment, particularly for students from underrepresented
backgrounds.
The section authorizes and appropriates $600 million
dollars for each fiscal year 2010 through 2014 for the three
types of grants in Part E. Of the funds, 25% will be used for
the College Access Challenge Grants under section 781, 50% will
be used for State Innovation and Completion Grants under
section 782, 23% will be used for Innovation in College Access
and Completion National Activities Grants, and 2% will be used
to evaluate the outcome of grants administered under Part E.
State Innovation and Completion Grants will be awarded
annually on a competitive basis to States meeting the
application requirements set forth in the bill. States are
required to provide assurances that they will develop and
submit a statewide Access and Completion Plan, engaging key
education stakeholders in the state, to increase the State's
rate of persistence in and completion of postsecondary
education. The State is authorized to provide subgrants to non-
profit organizations and guaranty agencies for assistance in
carrying out the State grant. Priority is given to states who
partner with philanthropic organizations or guaranty agencies.
At least one-third of the State program (including both federal
and non-federal shares) must be used for activities benefiting
students at two-year institutions, no more than 10% of funds
shall be used for development and implementation of statewide
longitudinal data systems, and no more than 6% of funds can be
used for administrative purposes relating to the grant.
Under the Innovation in College Access and Completion
National Activities grants, higher education institutions, non-
profit organizations, philanthropic organizations, guaranty
agencies, and States are eligible to apply for grants awarded
on a competitive basis for not less than $1,000,000. Grant
funds may be used for innovative programs, policies, and
services that increase the number of individuals with
postsecondary degrees or certificates.
Section 103. Investment in historically black colleges and universities
and other minority-serving institutions
This section amends section 371(b) of the higher Education
Act by extending funding for programs under this section
created under the College Cost Reduction Act for programs at
historically black colleges and universities and other
minority-serving institutions through 2014, including programs
that help low-income students attain degrees in the fields of
science, technology, engineering or mathematics by the
following annual amounts: $100 million to Hispanic Serving
Institutions including $10 million for community partnerships,
$85 million to Historically Black Colleges and Universities,
$15 million to Predominantly Black Institutions, $30 million to
Tribal Colleges and Universities, $15 million to Alaska,
Hawaiian Native Institutions, $5 million to Asian American and
Pacific Islander Institutions, and $5 million to Native
American non-tribal serving institutions.
Section 104. Investment in cooperative education
This section provides $10 million for fiscal year 2010 for
cooperative education programs pursuant to Part N of Title VIII
of the Higher Education Act.
SUBTITLE B--STUDENT FINANCIAL AID FORM SIMPLIFICATION
Section 121. General effective date
This section specifies that changes to the federal needs
analysis pursuant to this subtitle will take effect of the
award year beginning on or after July 1, 2011.
Section 122. Treatment of assets in need analysis
This section amends section 471 of the Higher Education Act
by excluding the consideration of parental and student assets
in the federal needs analysis formula that determines student
aid eligibility for families with incomes below $150,000.
Creates an asset cap for need-based aid above which a student
is ineligible for need-based grants, loans, or work assistance.
The asset cap is indexed for inflation. The section also makes
conforming changes.
Section 123. Changes to total income; aid eligibility
This section amends the definition of total income to
streamline consideration of untaxed income and benefits to
exclude: child support, workman's compensation, veteran's
benefits, living allowances for military and clergy, non-
parental cash support, and other untaxed income and benefits.
The section also amends the suspension of eligibility for drug-
related offenses related to exclude students convicted of
possession of a controlled substance.
Title II--Student Loan Reform
SUBTITLE A--STAFFORD LOAN REFORM
Section 201. Federal Family Education Loan appropriations
This section terminates the authority to make or insure any
additional loans in the Federal Family Education Loan program
after June 30, 2010.
Section 202. Scope and duration of Federal loan insurance program
This section is a conforming amendment with regard to the
termination of the FFEL program, limiting Federal insurance to
those loans in the Federal Family Education Loan program for
loans first disbursed prior to July 1, 2010.
Section 203. Applicable interest rates
This section makes a conforming amendment with regard to
the termination of the FFEL program limiting interest rate
applicability to Stafford, Consolidation, and PLUS loans to
those loans made before July 1, 2010.
Section 204. Federal payments to reduce student interest costs
This section makes a conforming amendment with regard to
the termination of the FFEL program by limiting subsidy
payments to lenders for those loans for which the first
disbursement is made before July 1, 2010.
Section 205. Federal PLUS loans
This section makes a conforming change with regard to the
termination of the FFEL program for federal PLUS loans by
prohibiting further FFEL origination of loans after July 1,
2010.
Section 206. Federal consolidation loans
This section makes conforming changes with regard to the
termination of FFEL program for federal consolidation loans by
allowing borrowers who have a consolidated FFEL loan to
subsequently consolidate into the Direct Lending program.
Section 207. Unsubsidized Stafford loans for middle-income borrowers
This section makes conforming changes with regard to the
termination of the FFEL program for Unsubsidized Stafford loans
by prohibiting further FFEL origination of loans after July 1,
2010.
Section 208. Loan repayment for civil legal assistance attorneys
This section makes conforming changes with regard to the
termination of the FFEL program for loans eligible for
repayment for civil legal assistance attorneys, to FFEL loans
first disbursed before July 1, 2010 and maintains eligibility
for loan repayment in the Direct Lending program.
Section 209. Special allowances
This section makes conforming changes with regard to the
termination of the FFEL program by limiting special allowance
payments to lenders under the FFEL program to loans first
disbursed before July 1, 2010.
Section 210. Revised special allowance calculation
This section changes the underlying index for the
calculation of special allowance payments to lenders for loans
first disbursed on or after January 1, 2000 and before July 1,
2010 under the FFEL program from commercial paper (CP) to the
1-month London Inter Bank Offered Rate (LIBOR).
Section 211. Origination of Direct Loans at institutions located
outside of the United States
This section provides for the origination of federal Direct
Loans at institutions located outside of the United States,
through a financial institution designated by the Secretary.
Section 212. Agreements with institutions
This section makes conforming technical changes with regard
to the termination of the FFEL program for Department of
Education agreements with Direct Lending institutions.
Section 213. Terms and conditions of loans
This section makes conforming technical changes with regard
to the termination of the FFEL program to clarify the terms and
conditions of Direct Loans.
Section 214. Contracts
This section directs the Secretary to award contracts for
servicing loans through a competitive bidding process to
eligible non-profit servicers for federal Direct Loans. The
section provides for a minimum allocation to eligible servicers
of the lesser of 100,000 borrowers or the loans of all the
borrowers in a State. In the case of multiple servicers, the
Secretary shall allocate each servicer the lesser of the loans
of 100,000 borrowers or equal shares of the loans of all
borrowers in the state. The section also ensures that borrowers
with multiple loans remain with a single servicer. Non-profit
servicers must meet quality and pricing standards set by the
Secretary.
Section 215. Interest rates
This section changes, beginning on July 1, 2012, the
interest rate on Subsidized Stafford loans for undergraduates
from a fixed rate to a variable rate with a cap of 6.8%. The
variable rate is calculated on the basis of the 91-day Treasury
bill plus 2.5%.
SUBTITLE B--PERKINS LOAN REFORM
Section 221. Federal Direct Perkins Loans terms and conditions
This section amends Part D of Title IV, adding in a new
section 455A creating Federal Direct Perkins Loans. The section
authorizes institutions to award Perkins loans to students
pursuant to an agreement with the Secretary. The section aligns
the Perkins loan program with the terms, conditions, and
requirements of the federal Direct Unsubsidized Stafford loan,
with the exception of a lower applicable interest rate of 5%.
Section 222. Authorization of appropriations
This section makes a conforming change to sunset the
discretionary allocation of additional Perkins funds through
the current Perkins loan program to loans made prior to July 1,
2010.
Section 223. Allocation of funds
This section makes a conforming change to the allocation of
funds under section 462 of the current Perkins loan program to
sunset the program by fiscal year 2010.
Section 224. Federal Direct Perkins Loan allocation
This section establishes an annual Direct Perkins loan
authority for the annual issuance of up to $6 billion from
funds under Part D beginning with the 2010-2011 award year. For
each award year, 50% of funds are allocated to institutions on
the basis of the adjusted self-help need amount of the
institution. The adjusted self-help need amount is determined
by each eligible undergraduate student's average cost of
attendance less each undergraduate student's expected family
contribution, plus each eligible graduate or professional
student's average cost of attendance less each graduate or
professional student's expected family contribution. For
undergraduate students the amount of self-help need cannot
exceed 25% of the average cost of attendance or $5,500 and for
graduate and professional students it cannot exceed $8,000.
Of the remaining 50% of funds: 25% of the funds are awarded
on the basis of a low tuition incentive, and 25% of the funds
are allocated to institutions based on the number of students
that graduate who are federal Pell Grant recipients. The
calculation of the low tuition incentive is based on the amount
by which the institution's tuition and fees is below the
average tuition and fees for its sector, plus the amount by
which the non Federal grant aid provided by the institution to
needy students drives them below the average tuition and fees
for the institution's sector. The calculation of the Pell Grant
incentive is determined by the ratio of Pell grant recipients
to Pell grant recipients who complete a postsecondary degree.
If the institution's base self-help need amount exceeds 50%
of the loan authority under this section, the base amounts of
the eligible institutions is ratably reduced. There is also a
corresponding ratable reduction that applies to the low tuition
incentive and the Pell Grant incentive.
Participants of the current Perkins loan program are
guaranteed to receive no less than the average of the
institution's total principal amount of loans for each of the
five most recent award years.
Section 225. Agreements with institutions of higher education
This section describes the nature of the agreement between
the Secretary and the institution with regard to participation
in the Federal Direct Perkins Loan program. Specific
requirements include that the institution will: establish and
maintain the program, operate the program consistent with their
requirements under the Federal Direct Loan program, and pay an
institutional match to be determined by the Secretary.
Section 226. Student loan information by eligible institution
This section makes conforming changes to limit the
disclosure requirements of institutions participating in the
current Perkins loan program to Perkins loans made before July
1, 2010.
Section 227. Terms of loans
This section makes conforming changes to sunset the terms
and conditions of Perkins loans made before July 1, 2010.
Section 228. Distribution of assets from student loan funds
This section recalls the federal capital contribution to
the Perkins loan revolving funds at participating institutions
minus the cost of student loan cancellations pursuant to the
terms of the current program and administrative costs. The
institution's contribution is also paid back to the
institution.
Section 229. Administrative expenses
This section makes conforming changes to sunset the
administrative expense payments by the Secretary under Part E
for the current Perkins loan program.
Title III--Modernization, Renovation, and Repair
SUBTITLE A--ELEMENTARY AND SECONDARY EDUCATION
Section 301. Definitions
Includes definitions of Bureau-funded school, charter
school, CHPS Criteria, Energy Star, Green Globes, LEED Green
Building Rating System, local educational agency, outlying
area, public school facilities, Secretary, and State.
CHAPTER 1--GRANTS FOR MODERNIZATION, RENOVATION, OR REPAIR OF PUBLIC
SCHOOL FACILITIES
Section 311. Purpose
Indicates the purpose of grants under chapter 1 is for
modernizing, renovating, or repairing public school facilities
to ensure that public school facilities are safe, healthy,
high-performing, and technologically up-to-date.
Section 312. Allocation of funds
Directs the Secretary to reserve two percent of funds
appropriated for chapter 1 for each fiscal year for assistance
to the outlying areas and for payments to the Secretary of the
Interior for assistance to Bureau-funded schools and requires
that such funds be distributed between the outlying areas and
the Department of the Interior for schools in outlying areas
and Bureau of Indian Education-funded schools in the same
proportion as the amount reserved under section 1121(a) of the
Elementary and Secondary Education Act. Directs the Secretary
to reserve five percent of funds appropriated for chapter 1 for
each fiscal year for assistance to local educational agencies
serving geographic areas with significant economic distress and
those recovering from a natural disaster. Allows each State to
reserve up to one percent of funds appropriated for chapter 1
for each fiscal year to provide technical assistance, to
develop a plan to create an online, publicly searchable
statewide database of public school facility design, condition,
modernization, renovation and repair needs, usage, utilization,
energy use, and carbon footprint, and create voluntary
guidelines for high-performing public school buildings.
Allocates to each State the same percentage of funds
appropriated under Title I of this Act that the State receives
under Title I, Part A of the Elementary and Secondary Education
Act of 1965. Within each State, allocates to each local
educational agency the same percentage of funds appropriated
under Title I of this Act that the agency receives under Title
I, Part A of the Elementary and Secondary Education Act of
1965.
Requires the Secretary, in determining State and local
allocations, to take into account the hold-harmless provisions
of Title I, Part A of the Elementary and Secondary Education
Act of 1965.
Requires the Secretary to distribute funds to States within
one hundred twenty days of the Department's appropriation and
requires States to distribute funds to local educational
agencies within ninety days of having received them from the
Secretary.
Section 313. Allowable use of funds
Describes the types of public school modernizations,
renovations, and repairs that are allowable uses of funds under
chapter 1, including repair to roofs, electrical, plumbing,
sewage, stormwater runoff, lighting systems, building envelope,
heating, ventilation, and air-conditioning systems, windows,
floors, ceilings, doors, including insulation and indoor air
quality assessments. Funds may also be used to bring schools
into compliance with fire, health, seismic and safety codes,
including modernizations, renovations, and repairs that ensure
that schools are prepared for emergencies. Funds may be used
for retrofitting that will increase the energy efficiency of
public school facilities and for modifications necessary to
comply with the Americans with Disabilities Act of 1990 and
section 504 of the Rehabilitation Act of 1973. Additional uses
contemplated by the bill include, abatement, removal, or
interim controls of asbestos, polychlorinated biphenyls, mold,
or mildew; reduction of human exposure to lead-based hazards or
proven carcinogens; reduction of classroom noise and
environmental noise pollution; modernization, renovation, or
repair to reduce the consumption of coal, electricity, land,
natural gas, oil, or water; upgrading or installing educational
technology infrastructure; modernization, renovation, or
repairs of laboratory facilities, libraries, career and
technical education facilities, and improvements to building
infrastructure to accommodate bicycle and pedestrian access;
renewable energy generation, heating systems and energy audits;
measures designed to reduce or eliminate human exposure to
airborne particles; creating greenhouses, gardens, and other
facilities for environmental scientific, or other educational
purposes, or to produce energy savings; modernizing,
renovating, or repairing physical education facilities and
recreational structures for students, other modernizations,
renovations, or repairs that improve the teaching and learning
climate, ensure the health and safety of students and staff, or
make schools more energy efficient; or reduce class size; and
required environmental remediation related to modernizations,
renovations, or repairs described above.
Section 314. Priority projects
Allows local educational agencies to give priority to
projects involving the abatement, removal, or interim controls
of asbestos, polychlorinated biphenyls, mold, mildew, lead-
based hazards, including lead-based paint hazards, or a proven
carcinogen.
CHAPTER 2--SUPPLEMENTAL GRANTS FOR LOUISIANA, MISSISSIPPI, AND ALABAMA
Section 321. Purpose
Indicates the purpose of grants under chapter 2 is for
modernizing, renovating, repairing, or constructing public
early learning, kindergarten, elementary, and secondary
educational facilities to address needs caused by damage
resulting from Hurricane Katrina or Hurricane Rita.
Section 322. Allocation to local educational agencies
Directs the Secretary to allocate funds to local
educational agencies in Louisiana, Mississippi, and Alabama
based on the infrastructure damage caused as a result of
Hurricane Katrina or Hurricane Rita.
Requires the Secretary to distribute funds to local
educational agencies within one hundred twenty days of an
appropriation of funds.
Section 323. Allowable use of funds
Includes the same list of allowable uses of funds as
section 313, but also allows local educational agencies to use
chapter 2 funds for construction of new facilities.
CHAPTER 3--GENERAL PROVISIONS
Section 331. Impermissible uses of funds
Prohibits funds received under this Act from being used for
payment of maintenance costs and stadiums or similar facilities
whose primary use is for athletic contests or exhibitions for
which admission is charged to the general public. Also
prohibits the improvement or construction of facilities whose
purpose is not the education of students, such as
administrative facilities and the purchase of carbon offsets.
Section 332. Supplement, not supplant
Requires local educational agencies receiving funds under
this Act to use such funds to supplement, and not supplant,
funds that otherwise would be used for the same purposes.
Section 333. Prohibition regarding State aid
Prohibits a State from taking payments under this Act into
consideration when determining the eligibility, or amount of,
State aid for any local educational agencies.
Section 334. Maintenance of effort
Allows only local educational agencies with at least a
ninety percent maintenance of effort with respect to the
provision of a free public education from the previous fiscal
year to receive funds under this Act.
Section 335. Special rule on contracting
Requires a local educational agency that receives funds
under this Act and that carries out projects through a contract
to ensure that the bidding process consist of the maximum
number of qualified bidders, including local, small, minority,
women- and veteran-owned businesses, through full and open
competition.
Section 336. Use of American iron, steel, and manufactured goods
Requires that all of the iron, steel, and manufactured
goods used in projects under this Act are produced in the
United States unless the Secretary finds that the use of these
products is inconsistent with the public interest, the products
are not produced in sufficient quantities or of satisfactory
quality, or the use of such products will increase the overall
cost of the project by more than 25 percent. If the Secretary
waives this provision due to a circumstance described above,
the Secretary must public a detailed written justification of
the determination in the Federal Register. This section must be
applied in a manner that is consistent with international
agreements.
Section 337. Labor standards
States that the Davis-Bacon labor law provisions apply to
any funds received under this Act.
Section 338. Charter schools
Requires that charter schools receive a portion of a local
educational agency's funds under this Act, based on the
percentage of low income students in the local educational
agency served by charter schools and that local educational
agencies consult with charter schools to determine individual
school's needs for renovation, modernization, and repair.
Allows local educational agencies to use excess funds for other
public school facility modernization, renovation, repair, or
construction if, after consulting with charter school
administrators, the local educational agency determines that
the amount reserved exceeds the needs of charter schools within
the agency.
Section 339. Green schools
Requires local educational agencies receiving funds under
this subtitle to use at least half of such funds appropriated
in fiscal year 2010 and seventy five percent of funds
appropriated in fiscal year 2011 for public school
modernizations, renovations, repairs, or construction that meet
specified ``green'' standards, including equivalent standards
adopted by the State or local authority with jurisdiction over
the agency, which must include a verifiable method to
demonstrate compliance.
Clarifies that nothing under Sec. 339 shall be construed to
prohibit a local educational agency from using sustainable,
domestic hardwood lumber for public school modernization,
renovation, repairs, or construction.
Requires the Secretary, in consultation with the Secretary
of Energy and the Administrator of the Environmental Protection
Agency, to provide outreach and technical assistance to States
and local educational agencies concerning best practices in
school modernization, renovation, and repair, including those
related to student academic achievement, student and staff
health, energy efficiency, and environmental protection.
Section 340. Reporting
Describes the reporting requirements applicable to local
educational agencies, States, and the Secretary, and requires
local educational agencies to make their reports publicly
available, including on their website.
Section 341. Special rules
Prohibits funds under this subtitle from being used to
employ workers in violation of section 274A of the Immigration
and Nationality Act and from being distributed to a local
educational agency that does not have a policy that requires a
criminal background check on all employees of the agency.
Section 342. Promotion of employment experiences
Directs the Secretary, in consultation with the Secretary
of Labor, to promote appropriate opportunities for participants
in the Youthbuild program, individuals enrolled in the Job
Corps program, individuals enrolled in a junior or community
college certificate or degree program related to sec 339(a),
and participants in preapprenticeship programs that have direct
linkages with apprenticeship programs that are registered with
the Department of Labor or a State Apprenticeship Agency under
the National Apprenticeship Act of 1937 to gain employment
experience through projects under this subtitle.
Section 343. Advisory Council on Green, High-Performing Public School
Facilities
Establishes the Advisory Council on Green, High-Performing
Public School Facilities to advise the Secretary on the impact
of green, high-performing schools on teaching and learning,
health, energy costs, environmental impact, and other areas.
Section 344. Education regarding projects
Allows local educational agencies to encourage schools
where modernization, renovation, or repair projects are
undertaken to educate students about the project, including, as
appropriate, the functioning of the project and its
environmental, energy, sustainability, and other benefits.
Section 345. Availability of funds
Authorizes to be appropriated and appropriates for chapter
1 $2,020,000,000 for each of fiscal years 2010 and 2011.
Authorizes to be appropriated and appropriates for chapter 2
$30,000,000 for each of fiscal years 2010 and 2011.
SUBTITLE B--HIGHER EDUCATION
Section 351. Federal assistance for community college modernization
This section establishes a federal grant program for
community college modernization, repair, and construction.
Grants are awarded to states for one of the following uses: to
reduce financing costs of loans, to provide matching funds for
capital campaigns, or to provide capital to a revolving loan
fund, for new construction modernization, renovation, or repair
projects at community colleges. Community colleges can use
funds for the construction, modernization, renovation, or
repair of community college facilities that are primarily used
for instruction, research, or student housing including:
heating and air conditioning systems, emergency preparedness,
increasing energy efficiency, expanding accessibility of
facilities for Americans with Disabilities Act compliance,
removal or abatement of asbestos or lead-based paint,
technology upgrades, or renewable energy generation. Requires
local educational agencies receiving funds under this subtitle
to use at least half of such funds appropriated for community
college modernizations, renovations, repairs, or construction
that meet specified ``green'' standards, including equivalent
standards adopted by the State or local authority with
jurisdiction over the agency, which must include a verifiable
method to demonstrate compliance.
Title IV--Early Learning Challenge Fund
Section 401. Purpose
Sets forth five purposes to the title.
Section 402. Programs authorized
Reserves up to 2 percent of funds for joint administration
of the title by the Secretary of Education and up to 3 percent
for research activities described in section 405. Authorizes
.25 percent for a competitive grant program to Indian tribes to
develop and implement school readiness plans. After these
reservations, reserves up to 65 percent for fiscal years 2010
through 2012 and up to 85 percent for subsequent fiscal years
for Quality Pathways Grants. The remainder is reserved for
Development Grants. Lists priority criteria for awarding
competitive grants and state maintenance of effort
requirements. Describes the federal administration of the grant
program and includes a list of a prohibition on the use of
funds.
Section 403. Quality pathways grants
Describes the quality pathways grants, including the grant
period, the Secretary's criteria for awarding grants and
determining amount of the award, as well as criteria for
renewal, and the state matching requirement. Explains the
required contents of State applications and the allowable uses
of funds. Includes special rule allowing 25% of funds from a
Quality Pathways grant to be used to expand access under
certain conditions. Includes an improvement plan for states
encountering barriers to reaching their goals.
Section 404. Development grants
Describes the development grants, including the grant
period, the use of funds, and the matching requirement.
Section 405. Research and evaluation
From funds reserved in section 402, requires the Secretary
of education and the Secretary of Health and Human Services to
act jointly to carry out 4 activities: (1) establish a national
commission to review and provide recommendations regarding
early learning program standards and early learning and
development standards; (2) conduct a national evaluation of the
grants made under the title; (3) support a research
collaborative to support research that can inform improved
child outcomes; (4) review strategic reports by the State
Advisory Councils on Early Care and Education and disseminate
best practices.
Section 406. Reporting requirements
Requires the Secretary of Education to submit an annual
report to the Committee on Education and Labor of the U.S.
House of Representatives and the Health, Education, Labor, and
Pensions Committee of the U.S. Senate and describes the
contents of such report. Requires States receiving grants under
this title to submit annual reports to the Secretary of
Education and describes the contents of such report.
Section 407. Construction
Includes two rules of construction regarding interpretation
of the provisions of the title.
Section 408. Definitions
Includes definitions for the term `child', `disadvantaged',
`Indian tribe', `Limited English Proficient', `Secretary', and
`State'.
Sec. 409. Availability of Funds
Provides $1 billion for each of fiscal years 2010 through
2017.
Title V--American Graduation Initiative
Section 501. Authorization and appropriation
This section authorizes and appropriates $730 million for
each fiscal year 2010 through 2013 and $680 million for each
fiscal year 2014 through 2019 for the American Graduation
Initiative. For fiscal years 2010 through 2013: $630 million is
available for the Community College Challenge grant program,
$50 million is available for open online education, and $50
million is available for the Learning and Earning Research
Center and grants to states for data systems. For fiscal years
2014 through 2019: $630 million is available for grants to
States for community college programs and $50 million is
available for open online education.
Sections 503 and 504 will be jointly administered by the
Secretary of Education and the Secretary of Labor pursuant to
an interagency agreement, with the Secretary of Education
having primary responsibility for obligating and disbursing
funds and ensuring compliance with applicable law and
administrative requirements.
Section 502. Definitions
This section defines eligible entities and the following
terms: area career and technical education school, institution
of higher education, community college, philanthropic
organization, State, State Public Employment Service, State
Workforce Investment Board, Local Workforce Investment Board,
and supportive services. Eligible entities include: community
colleges and community college districts; area and career
technical education schools; public four-year institutions that
offer two-year degrees, use funds for activities at the
associate degree and certificate levels, and is not reasonably
close to a community college; States and higher education
institutions in partnership with one of the above four eligible
entities; and consortia of at least two of the above entities.
Section 503. Grants to eligible entities for community college reform
This section authorizes the Secretary of Education, in
coordination with the Secretary of Labor to award competitive
grants to community colleges, area career and technical
colleges, public four-year institutions offering two-year
degrees, States or public four-year institutions partnering
with community colleges, or consortia of the above entities.
Grants awarded are for innovative programs, or programs of
demonstrated effectiveness, that lead to the completion of a
postsecondary degree, certificate, or industry-recognized
credential leading to a skilled occupation in a high-demand
industry. Grants are awarded for a four-year period. The
Secretary is authorized to terminate a grant in the third year
if the eligible entity has not made demonstrable progress in
achieving agreed upon benchmarks. If such a determination is
made, no further grant funds will be awarded. The minimum grant
award is $750,000. Priority is given to eligible entities
partnering philanthropic organizations, businesses, and labor
organizations for defined purposes. Eligible entities seeking a
grant must submit a detailed application to the Secretary.
Requires a non-federal match for federal dollars to cover
50% of the cost of the programs, services, and policies under
the grant. The non-federal portion of the match can be in cash
or in kind, and can be provided from States, local resources,
and/or private organizations. A hardship waiver may be granted
by the Secretary pursuant to Department regulations.
Eligible entities receiving a grant must use grant funds to
carry out two of the following activities: facilitating
transfer of credit and articulation agreements; expanding,
enhancing, or creating academic or training programs in
partnership with employers; providing student and worker
support services; creating workforce programs leading to
industry-recognized credentials; building or enhancing linkages
including the development of dual enrollment programs and early
college high schools; and other innovative programs to increase
completion and the provision of training for students to enter
skilled occupations.
Requires eligible entities receiving a grant to develop and
annually measure and report quantifiable benchmarks approved by
the Secretary on the following indicators as applicable:
closing gaps in enrollment and completion rates; addressing
local and regional workforce needs; and improving educational
and employment outcomes for education and training programs.
This section also authorizes the Secretary to allocate up
to 2% of funds to direct the Institute of Education Sciences to
conduct evaluations to determine the effectiveness of grant
programs carried out by eligible entities receiving a grant.
Evaluations must conclude prior to January 30, 2014.
The Secretary is required to annually submit a report to
the Committee on Health, Education, Labor, and Pensions of the
Senate and Labor and the Senate and the Committee on Education
and Labor of the House of Representatives.
Section 504. Grants to eligible States for community college programs
This section authorizes the Secretary of Education, in
coordination with the Secretary of Labor to award competitive
grants to States to implement systematic reform of community
colleges located in the State by carrying out programs,
policies, and services that have demonstrated effectiveness
resulting from the evaluation in section 503.
In order to be eligible for a grant under this section a
State must: have an access and completion plan under section
782 of the Higher Education Act of 1965, have an interoperable
statewide longitudinal data system including community college
data, have an articulation agreement pursuant to section 486A
of the Higher Education Act of 1965, and is in compliance with
section 137 of the Higher Education Act of 1965. Eligible
States seeking a grant must submit a detailed application to
the Secretary.
Grants are awarded for a six-year period. The Secretary is
authorized to terminate a grant in the third year if the
eligible entity has not made demonstrable progress in achieving
agreed upon benchmarks. If such a determination is made, no
further grant funds will be awarded.
Requires a non-federal match for federal dollars to cover
50% of the cost of the programs, services, and policies under
the grant. The non-federal portion of the match can be in cash
or in kind, and can be provided from States, local resources,
and/or private organizations. A hardship waiver may be granted
by the Secretary pursuant to Department regulations.
Requires eligible entities receiving a grant to develop and
annually measure and report quantifiable benchmarks approved by
the Secretary on the following indicators as applicable:
closing gapes in enrollment and completion rates; addressing
local and regional workforce needs; and improving educational
and employment outcomes for education and training programs.
States must submit an annual report to the Secretary of
Education and the Secretary of Labor detailing the description
and outcome of the systematic reform carried out under the
grant.
The Secretary is required to submit a report not later than
six months following the end of the grant period.
Section 505. National activities
This section authorizes the Secretary to make competitive
grants or contract with institutions of higher education,
philanthropic organizations, or other appropriate entities to
develop, evaluate, and disseminate freely-available high-
quality online training, high school courses, and postsecondary
education courses.
This section also authorizes the Director of the Institute
of Education Sciences to award a grant or contract with an
organization with demonstrated expertise in research and
evaluation of community colleges to establish and operate a
Learning and Earning Center. The grant or contract is
authorized for four years. Creates an advisory board appointed
by the Secretary. Authorized activities for the center include:
the development of common education and training metrics and
creating standardized data elements and data-sharing protocol.
Authorizes the Secretary to award grant to States and
consortia of States to establish cooperative agreements to
develop, implement, and expand interoperable statewide
longitudinal data systems.
Requires compliance with defined privacy and access to data
provisions made applicable to the entire Act.
The Secretary is required to annually submit a report to
the Committee on Health, Education, Labor, and Pensions of the
Senate and Labor and the Senate and the Committee on Education
and Labor of the House of Representatives detailing the amounts
awarded to entities and activities carried out pursuant to such
grants or contracts.
VI. Explanation of Amendments
The Committee considered and adopted the following
amendments:
Chairman Miller (D-CA) offered an amendment in the
nature of a substitute which is explained in the body of this
report.
Representative Lynn Woolsey (D-CA) offered an
amendment that requires the Secretary to give priority to grant
applications for the Community College Initiative that focus on
serving low-income, non-traditional students. The amendment was
adopted by voice vote.
Representative Susan Davis (D-CA) offered an
amendment to provide loan forgiveness for loans incurred during
the academic term in which a service member is activated. The
amendment was adopted by voice vote.
Representative Howard ``Buck'' McKeon (R-CA)
offered an amendment that requires the Secretary, in
coordination with the Secretary of Veterans Affairs, to provide
supplemental grants to eligible veterans whose educational
costs are not covered by the G.I. bill. The amendment was
adopted by voice vote.
Representative Ruben Hinojosa (D-TX) offered an
amendment to extend mandatory funding to Historically Black
Colleges and Universities (HBCUs) and Minority Serving
Institutions (MSIs) for programs to provide training in the
areas of science, technology, engineering and mathematics
through 2019. The amendment was adopted by voice vote.
Representatives Dennis Kucinich (D-OH) and Phil
Hare (D-IL) offered an amendment that requires States to report
to the Secretary on barriers to expanding access to early
learning programs to disadvantaged children. The amendment was
adopted by voice vote.
Representatives David Loebsack (D-IA) and Marcia
Fudge (D-OH) offered an amendment to encourage greater
connections among States, community colleges, and industry/
sector partnerships to strengthen core industries, create jobs,
and train the workforce to fulfill those jobs. The amendment
was adopted by voice vote.
Representative Mazie Hirono (D-HI) offered an
amendment to require state applications for Quality Pathway
grants to address quality and effective inclusion of children
with disabilities in early learning settings in state program
rating systems. The amendment was adopted by voice vote.
Representative Hare offered an amendment to
clarify that States may use Early Learning Challenge grants to
implement prevention strategies designed to build social
competence and prevent challenging behaviors as an allowable
use of funds. The amendment was adopted by voice vote.
Representative Joe Courtney (D-CT) offered an
amendment that it is a sense of the Congress that State
grantees in the American Graduation Initiative distribute
resources for community colleges across the State. The
amendment was adopted by voice vote.
Representative Jared Polis (D-CO) offered an
amendment to allow eligible community colleges to use American
Graduation Initiative grants to redesign and create new
programs that address emerging needs of the workplace. The
amendment was adopted by voice vote.
Representatives Polis and Paul Tonko (D-NY)
offered an amendment to add grants designed to increase
certificate completion in the STEM fields for women and other
disadvantaged group as a priority for the Secretary in issuing
Innovation Grants. The amendment was adopted by voice vote.
Representatives Polis and Hirono offered an
amendment to require the research collaborative established
under title IV of the bill to evaluate barriers to improving
the quality of early learning programs for disadvantaged
children. The amendment was adopted by voice vote.
Representative Tonko offered two amendments:
The first amendment adds water efficiency as
an allowable use of funds for K-12 modernization,
renovation, and repair, and provides that federal
funding for community college modernization and
construction supplement, and not supplant, other
funding for those purposes.
The second amendment establishes a
competitive grant program for eligible institutions of
higher education to hire a Veterans Resource Officer to
increase college completion rates for veterans.
Both amendments were adopted by voice vote.
Representative Robert Andrews offered an amendment
to amend the 90-10 rule to provide temporary relief to
proprietary institutions by: extending the number of
consecutive years an institution may fail to meet the 90-10
requirement from two to three, before becoming ineligible to
participate in Title IV programs; extending the period of time
during which an institution may count the increase in student
loan limits as non-title IV revenue; and exempting Federal
Direct Perkins Loans made between July 1, 2010 through July 1,
2010 from the 90-10 revenue calculation. The amendment was
adopted by a vote of 42 to 5.
Representatives Pedro Pierluisi (D-PR) and
Gregorio Sablan (D-MP) offered an amendment to ensure that
Puerto Rico, the District of Columbia, Guam, American Samoa,
the United States Virgin Islands, the Commonwealth of the
Northern Mariana, and the Freely Associated States are
eligible, on the same terms as the states, for modernization
and construction grants for community colleges under the
American Graduation Initiative. The amendment was adopted by
voice vote.
VII. Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1, the Congressional
Accountability Act, requires a description of the application
of this bill to the legislative branch. H.R. 3221, as amended,
will reform the federal student loan program, provide for
modernization, renovation and repair of public school
facilities, enhance early learning, and strengthen community
colleges. The bill does not prevent legislative branch
employees' coverage under this legislation.
VIII. Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement of
whether the provisions of the reported bill include unfunded
mandates. H.R. 3221 contains no intergovernmental or private-
sector mandates as defined by the Unfunded Mandates Reform Act
(UMRA).
IX. Earmark Statement
H.R. 3221 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clauses 9(d), 9(e) or 9(f) of rule XXI of the House of
Representatives.
X. Roll Call
XI. Statement of Oversight Findings and Recommendations of the
Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the body of this report.
XII. New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the House of Representatives and section 308(a) of the
Congressional Budget Act of 1974 and with respect to
requirements of 3(c)(3) of rule XIII of the House of
Representatives and section 402 of the Congressional Budget Act
of 1974, the Committee expects to receive an estimate for H.R.
3221 from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office
Washington, DC, January 24, 2009.
Hon. George Miller,
Chairman, Committee on Education and Labor,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3221, the Student
Aid and Fiscal Responsibility Act of 2009.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Deborah
Kalcevic and Justin Humphrey.
Sincerely,
Douglas W. Elmendorf, Director.
Enclosure.
H.R. 3221--Student Aid and Fiscal Responsibility Act of 2009
Summary: H.R. 3221 would amend the Higher Education Act of
1965, which authorizes most federal postsecondary education
programs. It would prohibit new federally guaranteed loans from
being made under the Federal Family Education Loan (FFEL)
Program and would increase direct spending for the Federal Pell
Grant Program and other programs.
The elimination of guaranteed student loans would lead to a
comparable increase in direct lending by the government. The
estimated subsidy cost shown in the budget is lower for the
direct student loan program than for the FFEL program. Thus,
enacting the bill would yield net budgetary savings for
shifting new lending from the guaranteed loan program to the
direct loan program.
On balance, CBO estimates that enacting H.R. 3221 would
reduce direct spending by $13.3 billion over the 2009-2013
period and $7.8 billion over the 2009-2019 period. Assuming
appropriation of the necessary amounts, implementing the bill
would increase discretionary spending by at least $13.5 billion
over the 2009-2019 period. (That estimate reflects the bulk of
the likely discretionary costs under H.R. 3221; but CBO has not
completed a comprehensive estimate of all effects that would be
subject to appropriation action.) Enacting H.R. 3221 would not
affect revenues.
H.R. 3221 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
impact of H.R. 3221 on spending is shown in Table 1. The costs
of this legislation fall within budget functions 500
(education, training, employment, and social services) and 700
(veterans benefits and services).
TABLE 1.--ESTIMATED BUDGETARY IMPACT OF H.R. 3221, THE STUDENT AID AND FISCAL RESPONSIBILITY ACT OF 2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
------------------------------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009-2014 2009-2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Federal Student Loan Programs:a
Estimated Budget Authority. -0.2 -6.1 -14.1 -12.2 -8.7 -8.4 -8.0 -7.9 -7.6 -7.8 -8.1 -49.8 -89.2
Estimated Outlays.......... -0.3 -3.8 -9.6 -11.3 -8.2 -7.5 -7.0 -6.8 -6.7 -6.7 -6.9 -40.7 -74.8
Federal Pell Grant Program:
Estimated Budget Authority. 0 0.1 1.9 0.8 6.7 3.6 4.0 5.2 6.4 8.1 9.9 13.0 46.7
Estimated Outlays.......... 0 * 0.6 1.6 2.4 5.8 3.7 4.3 5.5 6.9 8.6 10.4 39.4
Other Programs:
Estimated Budget Authority. 0 4.7 7.3 2.8 2.8 2.7 2.1 2.1 2.2 1.2 1.2 20.3 29.0
Estimated Outlays.......... 0 0.6 3.7 5.0 4.2 3.4 2.6 2.3 2.2 2.1 1.5 16.9 27.6
Total Changes:
Estimated Budget Authority. -0.2 -1.3 -4.9 -8.7 0.7 -2.2 -1.8 -0.5 1.0 1.5 3.0 -16.5 -13.4
Estimated Outlays.......... -0.3 -3.1 -5.3 -4.6 -1.7 1.6 -0.7 -0.2 1.0 2.3 3.1 -13.3 -7.8
CHANGES IN SPENDING SUBJECT TO APPROPRIATIONb
Estimated Authorization Level.. 0 0.1 0.8 0.9 1.1 1.3 1.5 1.8 2.1 2.4 2.6 4.3 14.8
Estimated Outlays.............. 0 0.1 0.4 0.9 1.0 1.2 1.5 1.7 2.0 2.2 2.5 3.6 13.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
aIncluding the Federal Perkins Loan Program.
bCBO has not completed an estimate of all discretionary spending under H.R. 3221; the estimates shown here represent the bulk of the bill's
discretionary costs.
Notes: Components may not add to totals because of rounding; * = less than S50 million.
Basis of estimate: As required under the Federal Credit
Reform Act of 1990 (FCRA), most of the costs of the federal
student loan programs are estimated on a net-present-value
basis. Under credit reform, the present value of all loan-
related cash flows is calculated by discounting those expected
cash flows to the year of disbursement, using the rates for
comparable maturities on U.S. Treasury borrowing. (For example,
the cash flow for a one-year loan is discounted using the
Treasury rate for a one-year zero-coupon note.) The costs for
the federal administration of student loans are estimated on a
cash basis. For this estimate, CBO assumes the bill will be
enacted by October 1, 2009, and that the necessary funds will
be appropriated for all discretionary programs.
Direct spending
H.R. 3221 would amend the federal student loan programs
(including the Federal Perkins Loan Program) and the Federal
Pell Grant Program and would amend or create several other
programs. Those changes would decrease net direct spending by
$13.3 billion over the 2009-2014 period and $7.8 billion over
the 2009-2019 period.
Federal Student Loan Programs. H.R. 3221 would make several
changes to the federal student loan programs, including the
Federal Perkins Loan Program. As shown in Table 2, CBO
estimates that, on net, those changes would reduce federal
costs by $40.7 billion over five years and $74.8 billion over
10 years. The major changes that affect direct spending
include:
Eliminating new guaranteed student loans
under the FFEL program and thus shifting those loans to
the William D. Ford Federal Direct Student Loan
program--saving an estimated $86.8 billion over the
2010-2019 period;
Reducing interest rates on subsidized
student loans to undergraduate borrowers--at a cost of
$3.2 billion over the 2012-2019 period;
Interactions between the FFEL and direct
loan program and various other program changes--
resulting in a net cost of $7.5 billion over the 2009-
2019 period; and
Speeding up the phase-out of the current
Perkins loan program and establishing a new Perkins
loan program in its place--for a net cost of $1.3
billion over the 2010-2019 period.
TABLE 2.--SUMMARY OF CHANGES IN THE FEDERAL STUDENT LOAN PROGRAMS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
-----------------------------------------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009-2014 2009-2019
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Eliminate new lending in the FFEL Program:
Estimated Budget Authority.............................. 0 -4.8 -13.3 -12.2 -11.2 -10.5 -10.2 -10.2 -10.1 -10.3 -10.7 -52.1 -103.5
Estimated Outlays....................................... 0 -2.6 -8.9 -11.0 -10.0 -9.4 -9.0 -8.9 -8.9 -9.0 -9.3 -41.8 -86.8
Reduce borrower interest rates:
Estimated Budget Authority.............................. 0 0 0 * 0.5 0.5 0.5 0.5 0.6 0.6 0.6 1.1 3.9
Estimated Outlays....................................... 0 0 0 * 0.3 0.5 0.5 0.5 0.5 0.5 0.5 0.8 3.2
Interactions and other changes:
Estimated Budget Authority.............................. -0.2 * * 0.6 1.2 1.2 1.2 1.2 1.3 1.3 1.4 2.7 9.1
Estimated Outlays....................................... -0.3 * * 0.4 0.8 1.0 1.0 1.1 1.1 1.1 1.2 2.0 7.5
Subtotal, FFEL and Direct Loans:
Estimated Budget Authority.............................. -0.2 -4.8 -13.3 -11.6 -9.5 -8.8 -8.5 -8.4 -8.3 -8.4 -8.7 -48.3 -90.6
Estimated Outlays....................................... -0.3 -2.6 -8.9 -10.6 -8.9 -7.9 -7.5 -7.4 -7.3 -7.3 -7.6 -39.0 -76.1
Federal Perkins Loans:
Estimated Budget Authority.............................. 0 -1.3 -0.8 -0.6 0.7 0.4 0.5 0.6 0.6 0.6 0.6 -1.6 1.4
Estimated Outlays....................................... 0 -1.2 -0.8 -0.7 0.7 0.3 0.5 0.5 0.6 0.6 0.6 -1.6 1.3
Total, All Federal Student Loans:
Estimated Budget Authority.............................. -0.2 -6.1 -14.1 -12.2 -8.7 -8.4 -8.0 -7.9 -7.6 -7.8 -8.1 -49.8 -89.2
Estimated Outlays....................................... -0.3 -3.8 -9.6 -11.3 -8.2 -7.5 -7.0 -6.8 -6.7 -6.7 -6.9 -40.7 -74.8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Components may not add to totals because of rounding; * between -$50 million and $50 million.
Eliminate new lending in the FFEL Program. Under current
law, the federal government provides federal loans to borrowers
through two separate programs. In the FFEL Program (guaranteed
loans), private lenders originate loans to postsecondary
students and the federal government makes payments to these
lenders, guarantees them against significant loss in the case
of default, and provides funds to guaranty agencies to help
administer those loans. In the direct loan program, the federal
government serves as the lender.
Beginning in July 2010, the bill would prohibit new
guaranteed loans under the FFEL Program; which under current
law, CBO estimates will account for about $705 billion in
loans--70 percent of all loan volume--over the next 10 years.
Under the prohibition in the bill, CBO expects that volume
would shift to the direct loan program. CBO estimates that the
subsidy rates for direct loans are, on average, about 10 to 20
percentage points lower than for guaranteed loans. (The subsidy
rate reflects the present value cost for each dollar the
government loans or guarantees.) Because of that difference in
subsidy rates, CBO estimates that prohibiting new guaranteed
loans--with the replacement of those loans by direct student
loans--would lower federal budget costs by $41.8 billion over
2010-2014 period and by $86.8 billion over the 2010-2019
period. Consistent with the accounting required under FCRA,
most of those estimated savings represent the changes in
present-value estimates for the switch from guarantees to
direct loans for each year over that period.
About $7 billion of the projected savings over the 2010-
2019 period reflect forgone administrative costs in the FFEL
Program. The increased loan volume in the direct loan program
would require additional funds for administering and servicing
those loans, but those costs are classified as discretionary
spending and discussed below under the heading ``Spending
Subject to Appropriation.''
Reduce Borrower Interest Rates. The bill would change the
interest rate on subsidized loans for undergraduate borrowers
beginning in July 2012. Under current law, the borrower rate on
those student loans is scheduled to increase from 3.4 percent
to 6.8 percent on July 1, 2012. Under the bill, the borrower
rate would switch to a variable-rate formula. The rate charged
would be equal to the 91-day Treasury bill rate (calculated as
if it were equivalent to a bond) plus 2.5 percentage points,
and would be adjusted annually each July. Because the rate
would be capped at 6.8 percent, borrowers would never pay an
interest rate higher than the 6.8 percent they would pay under
current law, but would have some probability of paying a lower
interest rate, depending on future Treasury rates.
Taking into account the one-sided aspect of the new
interest rate calculation and the historical volatility of
rates on short-term Treasury borrowing, CBO estimates that
changing the interest rate to a capped variable rate would cost
$0.8 billion over the 2010-2014 period and $3.2 billion over
the 2010-2019 period.
Interactions and Other Changes. Other changes to the
student loan programs and interactions between different
sections of the bill would reduce net savings by $7.5 billion
over the 2009-2019 period. Those changes are detailed below:
CBO estimated the effects of each section of
the bill independently of all other sections and then
calculated the interaction between provisions for the
bill as a whole. For H.R. 3221, CBO estimates that the
interactive effects would reduce net savings by $7.6
billion over the 2009-2019 period.
Beginning July 1, 2010, borrowers who currently
have a guaranteed consolidation loan but do not also have a
direct consolidation loan would be able to refinance their
guaranteed consolidation loan into a direct loan. Under current
law, consolidation loans are not permitted to be refinanced.
Because of the difference in subsidy rates, CBO estimates this
change would lower direct spending by an estimated $250 million
in 2009.
Beginning in July 2011, the bill would:
1. Exclude the assets and most untaxed income of both
students and parents currently included in calculating
eligibility for need-based aid. CBO estimates this
would cost $120 million over the 2011-2019 period; and
2. Allow student who have been convicted of
possession of illegal drug while receiving financial
aid to receive student aid. CBO estimates this would
cost $24 million over the 2011-2019 period. Both of
these provisions would also affect the Pell grant
program, and those costs are discussed below.
H.R. 3221 would forgive federal loans for members
of the uniformed services who do not receive academic credit
because they must withdraw from school for reasons of military
service. CBO estimates this provision would increase direct
spending by $21 million over the 2010-2019 period.
In October 2009, for loans first originated in
January 2000 and after, the bill would allow lenders to make a
one-time, permanent choice to change the underlying rate on
which the yields are based for both outstanding and new
guaranteed student loans. Under current law, the yield rates
are based on the bond equivalency rate of the three-month
Commercial Paper rate with various add-ons depending on the
type of loan and the loan status. The bill would allow lenders,
within a specified period of time, to change that rate to the
one-month London Interbank Offered Rate (LIBOR), calculated as
if it were equivalent to a bond. CBO estimates that this change
would have a negligible impact on spending.
Perkins Loan Program. H.R. 3221 also would amend the
current Federal Perkins Loan Program, under which some 1,700
colleges and universities use revolving funds to make student
loans. (Schools loan about $1 billion a year to students from
those revolving funds.) Over 80 percent of the capital in those
revolving funds came from the federal government. Under current
law in October 2012, schools must begin returning the
government's share of those funds to the Treasury. Under H.R.
3221, schools would begin the return of federal capital in July
2010. The bill would allow schools to retain amounts for
administrative expenses and other fees, thus slightly reducing
expected receipts.
The bill would establish a new Federal Perkins Loan Program
in July 2010; the interest rate would be 5 percent and students
would face the same terms and conditions as with unsubsidized
direct loans under the direct loan program. (Borrowing limits
would be similar to the existing Perkins Loan Program.) The new
loans would be disbursed through school financial aid offices
to borrowers who met the new financial need requirements. A
maximum of $6 billion in new loans could be made each year.
CBO estimates that, on net, these changes to the Perkins
Loan Program would reduce direct spending by $1.6 billion over
the 2010-2014 and increase direct spending by $1.3 billion over
the 2010-2019 period.
Federal Pell Grant Program. H.R. 3221 also would amend the
current structure of the Federal Pell Grant Program and
formulas for determining eligibility under that program. As
shown in Table 3, CBO estimates these changes would increase
direct spending by $10.4 billion over the 2010-2014 period and
by $39.4 billion over the 2010-2019 period. (Some of these
changes also would affect discretionary spending in the Pell
grant program. Those changes are discussed below under
``Spending Subject to Appropriation.'')
TABLE 3. ESTIMATED MANDATORY SPENDING FOR PELL GRANTS
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
-------------------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009-2014 2009-2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Amend the Current Mandatory Award:
Estimated Budget Authority............ 0 0.1 1.9 0.7 6.7 3.5 3.9 5.1 6.3 7.9 9.7 13.0 45.8
Estimated Outlays..................... 0 * 0.6 1.6 2.4 5.8 3.6 4.2 5.4 6.7 8.4 10.3 38.7
Other Changes:
Estimated Budget Authority............ 0 * * * * * 0.1 0.1 0.2 0.2 0.2 0.1 0.9
Estimated Outlays..................... 0 * * * * * 0.1 0.1 0.1 0.2 0.2 * 0.7
Total Changes:
Estimated Budget Authority............ 0 0.1 1.9 0.8 6.7 3.6 4.0 5.2 6.4 8.1 9.9 13.0 46.7
Estimated Outlays..................... 0 * 0.6 1.6 2.4 5.8 3.7 4.3 5.5 6.9 8.6 10.4 39.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Components may not add to totals because of rounding; * = between -$50 million and $50 million.
Mandatory Spending for Pell grants. Under current law, the
Pell grant program is funded from both discretionary and
mandatory sources. An annual appropriation sets the maximum
award level for which students are eligible and a mandatory
account provides additional funding to students eligible for
the discretionary program. The amount of the additional
mandatory award is determined by the amount of budget authority
directly appropriated in the Higher Education Act. In 2009, CBO
estimates that discretionary costs for the Pell grant program
will be $22.8 billion with additional mandatory spending equal
to $2.7 billion.
H.R. 3221 would permanently amend the calculation of
mandatory funding for Pell grants beginning in fiscal year
2011. For each year, the bill would appropriate such sums as
may be necessary to increase the mandatory award from the
previous year. The increase in the mandatory award would be
determined by inflating the previous year's total award level
by the change in the Consumer Price Index plus one percentage
point and then subtracting out the previous year's
discretionary award level or $4,860 (whichever is greater). The
base level of the award would continue to be set in an annual
appropriations act. For 2010, the mandatory award level is set
at $690.
As shown in Table 4, starting with the most recent
appropriations act (for the 2009-2010 academic year) which
specifies an award level of $4,860, CBO estimates the mandatory
award would grow from $690 in 2010 to $2,040 in 2019. If an
appropriations act were to set the discretionary maximum award
at a level greater than $4,860, it would raise the amount of
the mandatory award in each successive year, and increase
overall costs.
TABLE 4. ESTIMATED MAXIMUM AWARD LEVELS FOR PELL GRANTS UNDER H.R. 3221
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in dollars--
---------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
MAXIMUM AWARD LEVEL
Discretionary award level....................................... 4,860 4,860 4,860 4,860 4,860 4,860 4,860 4,860 4,860 4,860 4,860
Additional mandatory award levela............................... 490 690 825 950 1,065 1,180 1,315 1,475 1,660 1,850 2,040
Total....................................................... 5,350 5,550 5,865 5,810 5,925 6,040 6,175 6,335 6,520 6,710 6,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
aThe mandatory add-on of $690 for fiscal year 2010 is stated in current law.
Other Changes to Pell grants. In addition, CBO estimates
that changes to the eligibility and needs analysis formulas
(described above) and to programs whose funding is tied to Pell
grants would, on net, increase direct spending by $0.7 billion
over the 2010-2019 period.
Other Federal Programs. H.R. 3221 would amend or create
several mandatory grant programs that would provide education-
related funding to a wide variety of entities. As shown in
Table 5, CBO estimates that these programs would increase
direct spending by $16.9 billion over the 2010-2014 period and
by $27.6 billion over the 2010-2019 period. In particular:
H.R. 3221 would appropriate $8.0 billion for the
Early Learning Challenge Fund--$1.0 billion a year for 2010
through 2017. Based on the spending patterns of similar
programs, CBO estimates this provision would increase direct
spending by $7.9 billion over the 2010-2019 period.
For fiscal years 2010 through 2019, H.R. 3221
would appropriate a total of $7.0 billion for grants to states
and institutions of higher education to undertake systemic
reform of community colleges. CBO estimates this provision
would increase direct spending by $6.1 billion over the next 10
years.
The bill would appropriate $2.5 billion in 2011 to
renovate and modernize facilities for community colleges. Based
on the spending patterns of similar programs, CBO estimates
this provision would increase direct spending by $2.5 billion
over the 2011-2019 period.
The bill would appropriate $2.1 billion in 2010
and 2011 to renovate and modernize facilities for elementary
and secondary schools (K-12). Based on the spending patterns of
similar programs, CBO estimates this provision would increase
direct spending by $4.1 billion over the 2101-2019 period.
The bill would appropriate $3.0 billion for the
College Access and Completion Innovation Fund. Based on the
spending patterns of similar programs, CBO estimates these
provisions would increase direct spending by $3.0 billion over
the 2010-2019 period.
H.R. 3221 would extend through 2019 the current
direct appropriation of $255 million per year for grants to
Historically Black Colleges and Universities and Minority
Serving Institutions that expires in 2009 under current law.
CBO estimates this provision would increase direct spending by
$2.2 billion over the next 10 years.
In addition, the bill would amend an existing program for
providing education benefits to veterans (as described below).
TABLE 5. OTHER MANDATORY SPENDING PROGRAMS UNDER H.R. 3221
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
-----------------------------------------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009-2014 2009-2019
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Early Childhood Education:
Budget Authority........................................ 0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 0 0 5.0 8.0
Estimated Outlays....................................... 0 0.1 0.7 0.9 1.0 1.0 1.0 1.0 1.0 1.0 0.3 3.7 7.9
Community College Reform:
Budget Authority........................................ 0 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 3.6 7.0
Estimated Outlays....................................... 0 * 0.5 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.7 2.6 6.1
Community College Grants:
Budget Authority........................................ 0 0 2.5 0 0 0 0 0 0 0 0 2.5 2.5
Estimated Outlays....................................... 0 0 0.6 1.0 0.5 0.4 0 0 0 0 0 2.5 2.5
Modernization and Renovation (K-12):
Budget Authority........................................ 0 2.1 2.1 0 0 0 0 0 0 0 0 4.1 4.1
Estimated Outlays....................................... 0 0.3 1.1 1.5 0.9 0.2 * 0 0 0 0 4.1 4.1
College Access Completion: Innovation Fund
Budget Authority........................................ 0 0.6 0.6 0.6 0.6 0.6 0 0 0 0 0 3.0 3.0
Estimated Outlays....................................... 0 0.1 0.5 0.6 0.6 0.6 0.5 0.1 * * 0 2.4 3.0
HBCU and MSI Funding:
Budget Authority........................................ 0 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 1.3 2.6
Estimated Outlays....................................... 0 * 0.1 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.9 2.2
Supplemental Education Grants for Veteransa:
Estimated Budget Authority.............................. 0 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.8 1.9
Estimated Outlays....................................... 0 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.8 1.9
Cooperative Education:
Estimated Budget Authority.............................. 0 * 0 0 0 0 0 0 0 0 0 * *
Estimated Outlays....................................... 0 * * * * 0 0 0 0 0 0 * *
Total:
Estimated Budget Authority.......................... 0 4.7 7.3 2.8 2.8 2.7 2.1 2.1 2.2 1.2 1.2 20.3 29.0
Estimated Outlays................................... 0 0.6 3.7 5.0 4.2 3.4 2.6 2.3 2.2 2.1 1.5 16.9 27.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
aFunding for Supplemental Education Grants for Veterans affects direct spending at both the Departments of Education and Veterans Affairs. The effects on outlays for each department is as
follows:
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009-2014 2009-2019
Department of Education..................................... 0 0.1 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 1.2 2.9
Department of Veterans Affairs.............................. 0 * -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.4 -1.1
Notes: Components may not add to totals because of rounding; * = less than $50 million; HBCU = Historically Black Colleges and Universities; MSI = Minority Serving Institutions.
Supplemental Education Grants for Veterans. Section 106
would require the Department of Education to create a
supplemental grant program for certain veterans who are
eligible for education benefits under the Post-9/11 GI Bill.
Under the new GI Bill, the highest amount of in-state tuition
charged at a public institution in a given state constitutes
the maximum tuition benefit that the Department of Veterans
Affairs (VA) can pay in that state. In addition, VA will pay
for student fees up to the highest amount charged in that
state. Under the proposed grant program, supplemental funding
would be available to veterans attending private colleges and
universities in states where the benefit amount for tuition is
low compared to other states. The dollar amount of each grant
would equal the difference between the highest fees charged at
a public institution in the state where the individual is
attending school and the fees charged at the private
institution the individual is attending.
Based on information from VA, CBO estimates that
approximately 25,000 veterans would be eligible for those
grants each year and that the average value of the grants would
grow from about $9,000 in 2010 to $14,000 in 2019. Thus, CBO
estimates that the grant program would increase direct spending
by the Department of Education by $2.9 billion over the 2010-
2019 period.
That increase in spending would be partially offset by
reduced spending by VA. Under the Post-9/11 GI Bill, veterans
attending schools participating in the Yellow Ribbon Program
are eligible to receive an additional contribution from VA
(which is matched by the school) to help cover the cost of
tuition and fees at more expensive schools. The grant program
in the bill would cover much of the cost of high tuition and
fees for eligible veterans at private institutions, decreasing
the amount that VA would pay as a matching contribution for the
Yellow Ribbon Program. Under the bill, CBO estimates that
direct spending by VA would decrease by $1.1 billion over the
2010-2019 period. On net, CBO estimates that this proposal
would increase direct spending for veterans education benefits
by $1.9 billion over the 2010-2019 period.
Spending subject to appropriation
H.R. 3221 also would make several changes to discretionary
spending. CBO has not completed an estimate of all the effects
on discretionary spending under the bill, but we have estimated
the bulk of such costs. The biggest increases in discretionary
spending would stem from changes to the direct loan and Pell
grant programs.
Administration of Direct Loans. As mentioned above, most of
the costs for administering loans in the FFEL Program are
mandatory, while administrative costs in the direct loan
program are mostly discretionary. Based on information about
contracts for administering the FFEL program and consistent
with projected loan volume, CBO estimates that eliminating new
lending in the FFEL program and shifting the projected volume
to the direct loan program would increase discretionary
spending for administrative costs by $7.2 billion over the
2010-2019 period.
Federal Pell Grant Program. In 2009, CBO estimates that the
discretionary costs for Pell grants will total about $22.8
billion. CBO estimates that implementing H.R. 3221 would
increase discretionary spending for the Pell grants by $6.3
billion over the 2010-2019 period, subject to appropriation of
the necessary amounts. Those increased costs stem mostly from
changes made to the needs analysis formulas and eligibility
calculations, which are described in greater detail under the
subheading ``Federal Student Loan Programs'' in the ``Direct
Spending'' section.
Intergovernmental and private-sector impact: H.R. 3221
contains no intergovernmental or private-sector mandates as
defined in UMRA. Institutions of higher education and public
school systems would benefit from grants authorized under the
bill. Any costs or requirements associated with those grant
programs would be incurred voluntarily as conditions of federal
assistance.
Estimate prepared by: Federal Costs: Federal Student Loan
and Grant Programs: Deborah Kalcevic and Justin Humphrey;
Veterans Education Programs: Camille Woodland; Impact on State,
Local, and Tribal Governments: Burke Doherty; Impact on the
Private Sector: Nabeel Alsalam.
Estimate approved by: Peter H. Fontaine, Assistant Director
for Budget Analysis.
XIII. Statement of General Performance Goals and Objectives
In accordance with clause 3(c) of rule XIII of the House of
Representatives, the goal of H.R. 3221 is to reform the federal
student loan program, provide for modernization, renovation and
repair of public school facilities, enhance early learning, and
strengthen community colleges. The Committee expects the
Secretary of Education to comply with H.R. 3221 and implement
the changes to the law in accordance with these stated goals.
XIV. Constitutional Authority Statement
Under clause 3(d)(1) of rule XIII of the House of
Representatives, the Committee must include a statement citing
the specific powers granted to Congress in the Constitution to
enact the law proposed by H.R. 3221. The Committee believes
that the amendments made by this bill are within Congress'
authority under Article I, section 8, clause 1 of the U.S.
Constitution.
XV. Committee Estimate
Clause 3(d)(2) of rule XIII of the House of Representatives
requires an estimate and a comparison of the costs that would
be incurred in carrying out H.R. 3221. The Committee expects to
file, in the appropriate place, the cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 402 of the Congressional Budget Act upon receipt.
XVI. Changes in Existing Law Made by the Bill, as Reproted
In compliance with clause 3(e) of rule XIII of the House of
Representatives, changes in existing law made by the bill, as
reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new matter is printed in
italic, existing law in which no change is proposed is shown in
roman):
HIGHER EDUCATION ACT OF 1965
* * * * * * *
TITLE I--GENERAL PROVISIONS
PART A--DEFINITIONS
* * * * * * *
SEC. 102. DEFINITION OF INSTITUTION OF HIGHER EDUCATION FOR PURPOSES OF
TITLE IV PROGRAMS.
(a) Definition of Institution of Higher Education for
Purposes of Title IV Programs.--
(1) Inclusion of additional institutions.--Subject to
paragraphs (2) through (4) of this subsection, the term
``institution of higher education'' for purposes of
title IV includes, in addition to the institutions
covered by the definition in section 101--
(A) * * *
* * * * * * *
(C) only for the purposes of [part B] part D
of title IV, an institution outside the United
States that is comparable to an institution of
higher education as defined in section 101 and
that has been approved by the Secretary for the
purpose of [part B] part D of title IV,
consistent with the requirements of section
452(d).
[Note: Paragraph (2) reflects amendments made by this bill to such
clause as amended by the Higher Education Opportunity Act, effective on
July 1, 2012.]
(2) Institutions outside the united states.--
(A) In general.--For the purpose of
qualifying as an institution under paragraph
(1)(C), the Secretary shall establish criteria
by regulation for the approval of institutions
outside the United States and for the
determination that such institutions are
comparable to an institution of higher
education as defined in section 101 (except
that a graduate medical school, nursing school,
or a veterinary school, located outside the
United States shall not be required to meet the
requirements of section 101(a)(4)). Such
criteria shall include a requirement that a
student attending such school outside the
United States is ineligible for loans [made,
insured, or guaranteed] made under [part B]
part D of title IV unless--
(i) except as provided in
subparagraph (B)(iii)(IV), in the case
of a graduate medical school located
outside the United States--
(I)(aa) at least 60 percent
of those enrolled in, and at
least 60 percent of the
graduates of, the graduate
medical school outside the
United States were not persons
described in section 484(a)(5)
in the year preceding the year
for which a student is seeking
a loan under [part B ] part D
of title IV; and
(bb) at least 75 percent of
the individuals who were
students or graduates of the
graduate medical school outside
the United States or Canada
(both nationals of the United
States and others) taking the
examinations administered by
the Educational Commission for
Foreign Medical Graduates
received a passing score in the
year preceding the year for
which a student is seeking a
loan under [part B] part D of
title IV; or
* * * * * * *
(iii) in the case of a nursing school
located outside of the United States--
(I) * * *
* * * * * * *
(III) the nursing school
certifies [only Federal
Stafford Loans under section
428, unsubsidized Federal
Stafford Loans under section
428H, or Federal PLUS loans
under section 428B] only
Federal Direct Stafford Loans
under section 455(a)(2)(A),
Federal Direct Unsubsidized
Stafford Loans under section
455(a)(2)(D), or Federal Direct
PLUS Loans under section
455(a)(2)(B) for students
attending the institution;
* * * * * * *
(V) not less than 75 percent
of the individuals who were
students or graduates of the
nursing school, and who took
the National Council Licensure
Examination for Registered
Nurses in the year preceding
the year for which the
institution is certifying [a
Federal Stafford Loan under
section 428, an unsubsidized
Federal Stafford Loan under
section 428H, or a Federal PLUS
loan under section 428B] a
Federal Direct Stafford Loan
under section 455(a)(2)(A), a
Federal Direct Unsubsidized
Stafford Loan under section
455(a)(2)(D), or a Federal
Direct PLUS Loan under section
455(a)(2)(B), received a
passing score on such
examination.
(B) Advisory panel.--
(i) * * *
* * * * * * *
(iii) Report.--
(I) In general.--Not later
than 1 year after the date of
enactment of the Higher
Education Opportunity Act, the
advisory panel described in
clause (i) shall submit a
report to the Secretary and to
the authorizing committees
recommending eligibility
criteria for participation in
the loan programs under [part
B] part D of title IV for
graduate medical schools that--
(aa) * * *
* * * * * * *
(III) Minimum eligibility
requirement.--In the
recommendations described in
subclause (II), the criteria
described in subparagraph
(A)(i)(I)(bb), as amended by
section 102(b) of the Higher
Education Opportunity Act,
shall be a minimum eligibility
requirement for a graduate
medical school described in
subclause (I) to participate in
the loan programs under [part
B] part D of title IV.
(IV) Authority.--The
Secretary may--
(aa) not earlier than
180 days after the
submission of the
report described in
subclause (I), issue
proposed regulations
establishing criteria
for the eligibility of
graduate medical
schools described in
such subclause to
participate in the loan
programs under [part B]
part D of title IV
based on the
recommendations of such
report; and
* * * * * * *
(C) Failure to release information.--The
failure of an institution outside the United
States to provide, release, or authorize
release to the Secretary of such information as
may be required by subparagraph (A) shall
render such institution ineligible for the
purpose of [part B] part D of title IV.
(D) Special rule.--If, pursuant to this
paragraph, an institution loses eligibility to
participate in the programs under title IV,
then a student enrolled at such institution
may, notwithstanding such loss of eligibility,
continue to be eligible to receive a loan under
[part B] part D of title IV while attending
such institution for the academic year
succeeding the academic year in which such loss
of eligibility occurred.
* * * * * * *
TITLE III--INSTITUTIONAL AID
* * * * * * *
PART F--STRENGTHENING HISTORICALLY BLACK COLLEGES AND UNIVERSITIES AND
OTHER MINORITY-SERVING INSTITUTIONS
SEC. 371. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES
AND OTHER MINORITY-SERVING INSTITUTIONS.
(a) Eligible Institution.--An institution of higher education
is eligible to receive funds from the amounts made available
under this section if such institution is--
(1) * * *
(2) a Hispanic-serving institution (as defined in
[section 502] section 502(a) (20 U.S.C. 1101a));
(3) a Tribal College or University (as defined in
[section 316] section 316(b) (20 U.S.C. 1059c));
* * * * * * *
(5) a Predominantly Black Institution (as defined [in
subsection (c)] in section 318(b));
(6) an Asian American and Native American Pacific
Islander-serving institution (as defined [in subsection
(c)] in section 320(b)); or
(7) a Native American-serving nontribal institution
(as defined [in subsection (c)] in section 319(b)).
(b) New Investment of Funds.--
(1) In general.--
(A) Provision of funds.--There shall be
available to the Secretary to carry out this
section, from funds in the Treasury not
otherwise appropriated, [$255,000,000 for each
of the fiscal years 2008 and 2009. The
authority to award grants under this section
shall expire at the end of fiscal year 2009.]
$255,000,000 for each of the fiscal years 2008
through 2019.
* * * * * * *
(2) Allocation and allotment.--
(A) * * *
[(B) HSI stem and articulation programs.--The
amount made available for allocation under this
subparagraph by subparagraph (A)(i) for any
fiscal year shall be available for Hispanic-
serving Institutions for activities described
in section 503, with a priority given to
applications that propose--
[(i) to increase the number of
Hispanic and other low income students
attaining degrees in the fields of
science, technology, engineering, or
mathematics; and
[(ii) to develop model transfer and
articulation agreements between 2-year
Hispanic-serving institutions and 4-
year institutions in such fields.]
(B) Stem and articulation programs.--From the
amount made available for allocation under this
subparagraph by subparagraph (A)(i) for any
fiscal year--
(i) 90 percent shall be available for
Hispanic-serving institutions for
activities described in sections 503
and 513, with a priority given to
applications that propose--
(I) to increase the number of
Hispanic and other low-income
students attaining degrees in
the fields of science,
technology, engineering, or
mathematics; and
(II) to develop model
transfer and articulation
agreements between 2-year
Hispanic-serving institutions
and 4-year institutions in such
fields; and
(ii) 10 percent shall be available
for grants under section 355.
(C) Allocation and allotment hbcus and
pbis.--From the amount made available for
allocation under this subparagraph by
subparagraph (A)(ii) for any fiscal year--
(i) * * *
(ii) 15 percent shall be available to
eligible institutions described in
subsection (a)(5) [and shall be
available for a competitive grant
program to award 25 grants of $600,000
annually for programs in any of the
following areas:
[(I) science, technology,
engineering, or mathematics
(STEM);
[(II) health education;
[(III) internationalization
or globalization;
[(IV) teacher preparation; or
[(V) improving educational
outcomes of African American
males.] and shall be made
available as grants under
section 318 and allotted among
such institutions under section
318(e), treating such amount,
plus the amount appropriated
for such fiscal year in a
regular or supplemental
appropriation Act to carry out
section 318, as the amount
appropriated to carry out
section 318 for purposes of
allotments under section 318(e)
(D) Allocation and allotment to other
minority-serving institutions.--From the amount
made available for allocation under this
subparagraph by subparagraph (A)(iii) for any
fiscal year--
(i) * * *
* * * * * * *
(iii) $5,000,000 for such fiscal year
shall be available to eligible
institutions described in subsection
(a)(6) [for activities described in
section 311(c)] and shall be made
available as grants under section 320,
treating such $5,000,000 as part of the
amount appropriated for such fiscal
year in a regular or supplemental
appropriation Act to carry out such
section and using such $5,000,000 for
purposes described in subsection (c) of
such section; and
(iv) $5,000,000 for such fiscal year
shall be available to eligible
institutions [described in subsection
(a)(7)--
[(I) to plan, develop,
undertake, and carry out
activities to improve and
expand such institutions'
capacity to serve Native
Americans, which may include--
[(aa) the purchase,
rental, or lease of
scientific or
laboratory equipment
for educational
purposes, including
instructional and
research purposes;
[(bb) renovation and
improvement in
classroom, library,
laboratory, and other
instructional
facilities;
[(cc) support of
faculty exchanges,
faculty development,
and faculty fellowships
to assist faculty in
attaining advanced
degrees in the
faculty's field of
instruction;
[(dd) curriculum
development and
academic instruction;
[(ee) the purchase of
library books,
periodicals, microfilm,
and other educational
materials;
[(ff) funds and
administrative
management, and
acquisition of
equipment for use in
strengthening funds
management;
[(gg) the joint use
of facilities such as
laboratories and
libraries; and
[(hh) academic
tutoring and counseling
programs and student
support services; and
[(II) to which the Secretary,
to the extent possible and
consistent with a competitive
process under which such grants
are awarded, allocates funds
under this clause to ensure
maximum and equitable
distribution among all such
eligible institutions.] and
shall be made available as
grants under section 319,
treating such $5,000,000 as
part of the amount appropriated
for such fiscal year in a
regular or supplemental
appropriation Act to carry out
such section and using such
$5,000,000 for purposes
described in subsection (c) of
such section
[(c) Definitions.--
[(1) Asian american.--The term ``Asian American'' has
the meaning given the term ``Asian'' in the Office of
Management and Budget's Standards for Maintaining,
Collecting, and Presenting Federal Data on Race and
Ethnicity as published on October 30, 1997 (62 Fed.
Reg. 58789).
[(2) Asian american and native american pacific
islander-serving institution.--The term ``Asian
American and Native American Pacific Islander-serving
institution'' means an institution of higher education
that--
[(A) is an eligible institution under section
312(b); and
[(B) at the time of application, has an
enrollment of undergraduate students that is at
least 10 percent Asian American and Native
American Pacific Islander students.
[(3) Enrollment of needy students.--The term
``enrollment of needy students'' means the enrollment
at an institution of higher education with respect to
which not less than 50 percent of the undergraduate
students enrolled in an academic program leading to a
degree--
[(A) in the second fiscal year preceding the
fiscal year for which the determination is
made, were Federal Pell Grant recipients for
such year;
[(B) come from families that receive benefits
under a means-tested Federal benefit program
(as defined in paragraph (5));
[(C) attended a public or nonprofit private
secondary school--
[(i) that is in the school district
of a local educational agency that was
eligible for assistance under part A of
title I of the Elementary and Secondary
Education Act of 1965 for any year
during which the student attended such
secondary school; and
[(ii) which for the purpose of this
paragraph and for that year was
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 a
measure of poverty described in section
1113(a)(5) of such Act exceeds 30
percent of the total enrollment of such
school; or
[(D) are first-generation college students
(as that term is defined in section 402A(h)),
and a majority of such first-generation college
students are low-income individuals.
[(4) Low-income individual.--The term ``low-income
individual'' has the meaning given such term in section
402A(h).
[(5) Means-tested federal benefit program.--The term
``means-tested Federal benefit program'' means a
program of the Federal Government, other than a program
under title IV, in which eligibility for the programs'
benefits or the amount of such benefits are determined
on the basis of income or resources of the individual
or family seeking the benefit.
[(6) Native american.--The term ``Native American''
means an individual who is of a tribe, people, or
culture that is indigenous to the United States.
[(7) Native american pacific islander.--The term
``Native American Pacific Islander'' means any
descendant of the aboriginal people of any island in
the Pacific Ocean that is a territory or possession of
the United States.
[(8) Native american-serving nontribal institution.--
The term ``Native American-serving nontribal
institution'' means an institution of higher education
that--
[(A) at the time of application--
[(i) has an enrollment of
undergraduate students that is not less
than 10 percent Native American
students; and
[(ii) is not a Tribal College or
University (as defined in section 316);
and
[(B) submits to the Secretary such enrollment
data as may be necessary to demonstrate that
the institution is described in subparagraph
(A), along with such other information and data
as the Secretary may by regulation require.
[(9) Predominantly black institution.--The term
``Predominantly Black institution'' means an
institution of higher education that--
[(A) has an enrollment of needy students as
defined by paragraph (3);
[(B) has an average educational and general
expenditure which is low, per full-time
equivalent undergraduate student in comparison
with the average educational and general
expenditure per full-time equivalent
undergraduate student of institutions of higher
education that offer similar instruction,
except that the Secretary may apply the waiver
requirements described in section 392(b) to
this subparagraph in the same manner as the
Secretary applies the waiver requirements to
section 312(b)(1)(B);
[(C) has an enrollment of undergraduate
students--
[(i) that is at least 40 percent
Black American students;
[(ii) that is at least 1,000
undergraduate students;
[(iii) of which not less than 50
percent of the undergraduate students
enrolled at the institution are low-
income individuals or first-generation
college students (as that term is
defined in section 402A(h)); and
[(iv) of which not less than 50
percent of the undergraduate students
are enrolled in an educational program
leading to a bachelor's or associate's
degree that the institution is licensed
to award by the State in which the
institution is located;
[(D) is legally authorized to provide, and
provides within the State, an educational
program for which the institution of higher
education awards a bachelor's degree, or in the
case of a junior or community college, an
associate's degree;
[(E) is accredited by a nationally recognized
accrediting agency or association determined by
the Secretary to be a reliable authority as to
the quality of training offered, or is,
according to such an agency or association,
making reasonable progress toward
accreditation; and
[(F) is not receiving assistance under--
[(i) part B;
[(ii) part A of title V; or
[(iii) an annual authorization of
appropriations under the Act of March
2, 1867 (14 Stat. 438; 20 U.S.C. 123).]
* * * * * * *
TITLE IV--STUDENT ASSISTANCE
PART A--GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF HIGHER
EDUCATION
* * * * * * *
Subpart 1--Federal Pell Grants; Veterans Educational Equity
Supplemental Grants
SEC. 401. FEDERAL PELL GRANTS: AMOUNT AND DETERMINATIONS; APPLICATIONS.
(a) * * *
(b) Purpose and Amount of Grants.--(1) * * *
(2)[(A) The amount of the Federal Pell Grant for a student
eligible under this part shall be--
[(i) $6,000 for academic year 2009-2010;
[(ii) $6,400 for academic year 2010-2011;
[(iii) $6,800 for academic year 2011-2012;
[(iv) $7,200 for academic year 2012-2013;
[(v) $7,600 for academic year 2013-2014; and
[(vi) $8,000 for academic year 2014-2015,
less an amount equal to the amount determined to be the
expected family contribution with respect to that student for
that year.]
(A) The amount of the Federal Pell Grant for a student
eligible under this part shall be--
(i) the maximum Federal Pell Grant, as
specified in the last enacted appropriation Act
applicable to that award year, plus
(ii) the amount of the increase calculated
under paragraph (8)(B) for that year, less
(iii) an amount equal to the amount
determined to be the expected family
contribution with respect to that student for
that year.
* * * * * * *
(6) Notwithstanding any other provision of this subpart, the
Secretary shall allow the amount of the Federal Pell Grant to
be exceeded for students participating in a program of study
abroad approved for credit by the institution at which the
student is enrolled when the reasonable costs of such program
are greater than the cost of attendance at the student's home
institution, except that the amount of such Federal Pell Grant
in any fiscal year shall not exceed [the grant level specified
in the appropriate Appropriation Act for this subpart for such
year] the Federal Pell Grant amount, determined under paragraph
(2)(A), for which a student is eligible during such award year.
If the preceding sentence applies, the financial aid
administrator at the home institution may use the cost of the
study abroad program, rather than the home institution's cost,
to determine the cost of attendance of the student.
* * * * * * *
[(8) Additional funds.--
[(A) In general.--There are authorized to be
appropriated, and there are appropriated, to carry out
subparagraph (B) of this paragraph (in addition to any
other amounts appropriated to carry out this section
and out of any money in the Treasury not otherwise
appropriated) the following amounts--
[(i) $2,030,000,000 for fiscal year 2008;
[(ii) $2,090,000,000 for fiscal year 2009;
[(iii) $3,030,000,000 for fiscal year 2010;
[(iv) $3,090,000,000 for fiscal year 2011;
[(v) $5,050,000,000 for fiscal year 2012;
[(vi) $105,000,000 for fiscal year 2013;
[(vii) $4,305,000,000 for fiscal year 2014;
[(viii) $4,400,000,000 for fiscal year 2015;
[(ix) $4,600,000,000 for fiscal year 2016;
and
[(x) $4,900,000,000 for fiscal year 2017.
[(B) Increase in federal pell grants.--The amounts
made available pursuant to subparagraph (A) of this
paragraph shall be used to increase the amount of the
maximum Federal Pell Grant for which a student shall be
eligible during an award year, as specified in the last
enacted appropriation Act applicable to that award
year, by--
[(i) $490 for each of the award years 2008-
2009 and 2009-2010;
[(ii) $690 for each of the award years 2010-
2011 and 2011-2012; and
[(iii) $1,090 for award year 2012-2013.
[(C) Eligibility.--The Secretary shall only award an
increased amount of a Federal Pell Grant under this
section for any award year pursuant to the provisions
of this paragraph to students who qualify for a Federal
Pell Grant award under the maximum grant award enacted
in the annual appropriation Act for such award year
without regard to the provisions of this paragraph.
[(D) Program requirements and operations otherwise
unaffected.--Except as provided in subparagraphs (B)
and (C), nothing in this paragraph shall be construed
to alter the requirements and operations of the Federal
Pell Grant Program as authorized under this section, or
authorize the imposition of additional requirements or
operations for the determination and allocation of
Federal Pell Grants under this section.
[(E) Ratable increases and decreases.--The amounts
specified in subparagraph (B) shall be ratably
increased or decreased to the extent that funds
available under subparagraph (A) exceed or are less
than (respectively) the amount required to provide the
amounts specified in subparagraph (B).
[(F) Availability of funds.--The amounts made
available by subparagraph (A) for any fiscal year shall
be available beginning on October 1 of that fiscal
year, and shall remain available through September 30
of the succeeding fiscal year.]
(8) Additional funds.--
(A) In general.--There are authorized to be
appropriated, and there are appropriated, to carry out
subparagraph (B) of this paragraph (in addition to any
other amounts appropriated to carry out this section
and out of any money in the Treasury not otherwise
appropriated) the following amounts--
(i) $2,030,000,000 for fiscal year 2008;
(ii) $2,733,000,000 for fiscal year 2009; and
(iii) such sums as may be necessary for
fiscal year 2010 and each subsequent fiscal
year to provide the amount of increase of the
maximum Federal Pell Grant required by clauses
(ii) and (iii) of subparagraph (B).
(B) Increase in federal pell grants.--The amounts
made available pursuant to subparagraph (A) shall be
used to increase the amount of the maximum Federal Pell
Grant for which a student shall be eligible during an
award year, as specified in the last enacted
appropriation Act applicable to that award year, by--
(i) $490 for each of the award years 2008-
2009 and 2009-2010;
(ii) $690 for the award year 2010-2011; and
(iii) the amount determined under
subparagraph (C) for each succeeding award
year.
(C) Inflation-adjusted amounts.--
(i) Award year 2011-2012.--For award year
2011-2012, the amount determined under this
subparagraph for purposes of subparagraph
(B)(iii) shall be equal to--
(I) $5,550 or the total maximum
Federal Pell Grant for the preceding
award year (as determined under clause
(iv)(II)), whichever is greater,
increased by a percentage equal to the
annual adjustment percentage for award
year 2011-2012; reduced by
(II) $4,860 or the maximum Federal
Pell Grant for which a student was
eligible for the preceding award year,
as specified in the last enacted
appropriation Act applicable to that
year, whichever is greater; and
(III) rounded to the nearest $5.
(ii) Subsequent award years.--For award year
2012-2013 and each of the subsequent award
years, the amount determined under this
subparagraph for purposes of subparagraph
(B)(iii) shall be equal to--
(I) the total maximum Federal Pell
Grant for the preceding award year (as
determined under clause (iv)(II)),
increased by a percentage equal to the
annual adjustment percentage for the
award year for which the amount under
this subparagraph is being determined;
reduced by
(II) $4,860 or the maximum Federal
Pell Grant for which a student was
eligible for the preceding award year,
as specified in the last enacted
appropriation Act applicable to that
year, whichever is greater; and
(III) rounded to the nearest $5.
(iii) Limitation on decreases.--
Notwithstanding clauses (i) and (ii), if the
amount determined under clause (i) or (ii) for
an award year is less than the amount
determined under this paragraph for the
preceding award year, the amount determined
under such clause for such award year shall be
the amount determined under this paragraph for
the preceding award year.
(iv) Definitions.--For purposes of this
subparagraph--
(I) the term ``annual adjustment
percentage'' as it applies to an award
year is equal to the sum of--
(aa) the estimated percentage
change in the Consumer Price
Index (as determined by the
Secretary, using the definition
in section 478(f)) for the most
recent calendar year ending
prior to the beginning of that
award year; and
(bb) one percentage point;
and
(II) the term ``total maximum Federal
Pell Grant'' as it applies to a
preceding award year is equal to the
sum of--
(aa) the maximum Federal Pell
Grant for which a student is
eligible during an award year,
as specified in the last
enacted appropriation Act
applicable to that preceding
award year; and
(bb) the amount of the
increase in the maximum Federal
Pell Grant required by this
paragraph for that preceding
award year.
(D) Program requirements and operations otherwise
unaffected.--Except as provided in subparagraphs (B)
and (C), nothing in this paragraph shall be construed
to alter the requirements and operations of the Federal
Pell Grant Program as authorized under this section, or
to authorize the imposition of additional requirements
or operations for the determination and allocation of
Federal Pell Grants under this section.
(E) Availability of funds.--The amounts made
available by subparagraph (A) for any fiscal year shall
be available beginning on October 1 of that fiscal
year, and shall remain available through September 30
of the succeeding fiscal year.
* * * * * * *
SEC. 401B. VETERANS EDUCATIONAL EQUITY SUPPLEMENTAL GRANT PROGRAM.
(a) Veterans Educational Equity Supplemental Grants
Authorized.--The Secretary shall award a grant to each eligible
student, in an amount determined in accordance with subsection
(c), to assist such student with paying the cost of tuition
incurred by the student for a program of education at an
institution of higher education.
(b) Definitions.--In this section--
(1) Eligible student.--The term ``eligible student''
means a student who--
(A) is a covered individual, as such term is
defined in section 3311(b) of title 38, United
States Code;
(B) is enrolled at an institution of higher
education that--
(i) is not a public institution of
higher education; and
(ii) is located in a State with a
zero, or very low, maximum tuition
charge per credit hour compared to the
maximum tuition charge per credit hour
in all other States, as determined by
the Secretary of Veterans Affairs
(based on the determinations of maximum
tuition charged per credit hour in each
State for the purposes of chapter 33 of
title 38, United States Code); and
(C) is eligible for educational assistance
for an academic year, and will receive an
amount of such assistance for such year for
fees charged the individual that is less than
the maximum amount of such assistance available
for fees charged for such year in such State.
(2) Educational assistance.--The term ``educational
assistance'' means the amount of educational assistance
from the Secretary of Veterans Affairs an eligible
student receives or will receive under section
3313(c)(1)(A) of title 38, United States Code, or a
similar amount of such assistance under paragraphs (2)
through (7) of such section 3313(c).
(c) Grant Amount.--A grant to an eligible student under this
section be equal to an amount that is--
(1) the maximum amount of educational assistance for
fees charged that the eligible student would receive,
in accordance with section 3313(c) of title 38, United
States Code, if such student attended the public
institution of higher education in the State in which
the eligible student is enrolled that has the highest
fees charged to an individual for a year in such State
(as determined by the Secretary of Veterans Affairs for
the purposes of chapter 33 of such title 38), less
(2) the educational assistance the eligible student
will receive, in accordance with such section, for fees
charged to the student for such year at the institution
of higher education at which the student is enrolled.
(d) Uses of Funds.--An eligible student who receives a grant
under this section shall use such grant to pay tuition incurred
by the student for a program of education at an institution of
higher education.
(e) Notification.--The Secretary, in coordination with
Secretary of Veterans Affairs, shall establish a system of
notification to ensure the timely delivery to each eligible
student of--
(1) educational assistance received by the student;
and
(2) grants awarded to the student under this section.
(f) Authorization and Appropriation.--There are authorized to
be appropriated, and there are appropriated, such sums as may
be necessary to carry out this section (in addition to any
other amounts appropriated to carry out this section and out of
any money in the Treasury not otherwise appropriated).
Subpart 2--Federal Early Outreach and Student Services Programs
CHAPTER 1--FEDERAL TRIO PROGRAMS
* * * * * * *
SEC. 402D. STUDENT SUPPORT SERVICES.
(a) * * *
* * * * * * *
(d) Special Rule.--
(1) Use for student aid.--A recipient of a grant that
undertakes any of the permissible services identified
in subsection (c) may, in addition, use such funds to
provide grant aid to students. A grant provided under
this paragraph shall not [exceed the maximum
appropriated Pell Grant] exceed the Federal Pell Grant
amount, determined under section 401(b)(2)(A), for
which a student is eligible or, be less than the
minimum appropriated Pell Grant, for the current
academic year. In making grants to students under this
subsection, an institution shall ensure that adequate
consultation takes place between the student support
service program office and the institution's financial
aid office.
* * * * * * *
PART B--FEDERAL FAMILY EDUCATION LOAN PROGRAM
SEC. 421. STATEMENT OF PURPOSE; NONDISCRIMINATION; AND APPROPRIATIONS
AUTHORIZED.
(a) * * *
(b) Authorization of Appropriations.--For the purpose of
carrying out this part--
(1) * * *
* * * * * * *
Sums appropriated under paragraphs (1), (2), (4), and (5) of
this subsection shall remain available until expended, except
that no sums may be expended after June 30, 2010, with respect
to loans under this part for which the first disbursement would
be made after such date. No additional sums are authorized to
be appropriated under paragraph (3) or (4) of this subsection
by reason of the reenactment of such paragraphs by the Higher
Education Amendments of 1986.
* * * * * * *
(d) Termination of Authority To Make or Insure New Loans.--
Notwithstanding paragraphs (1) through (6) of subsection (b) or
any other provision of law--
(1) no new loans (including consolidation loans) may
be made or insured under this part after June 30, 2010;
and
(2) no funds are authorized to be appropriated, or
may be expended, under this Act or any other Act to
make or insure loans under this part (including
consolidation loans) for which the first disbursement
would be made after June 30, 2010,
except as expressly authorized by an Act of Congress enacted
after the date of enactment of Student Aid and Fiscal
Responsibility Act of 2009.
* * * * * * *
SEC. 424. SCOPE AND DURATION OF FEDERAL LOAN INSURANCE PROGRAM.
(a) Limitations on Amounts of Loans Covered by Federal
Insurance.--The total principal amount of new loans made and
installments paid pursuant to lines of credit (as defined in
section 435) to students covered by Federal loan insurance
under this part shall not exceed $2,000,000,000 for the period
from July 1, 1976, to [September 30, 1976, and for each of the
succeeding fiscal years ending prior to October 1, 2014.
Thereafter, Federal loan insurance pursuant to this part may be
granted only for loans made (or for loan installments paid
pursuant to lines of credit) to enable students, who have
obtained prior loans insured under this part, to continue or
complete their educational program; but no insurance may be
granted for any loan made or installment paid after September
30, 2018.] September 30, 1976, for each of the succeeding
fiscal years ending prior to October 1, 2009, and for the
period from October 1, 2009, to June 30, 2010, for loans first
disbursed on or before June 30, 2010.
* * * * * * *
SEC. 427A. APPLICABLE INTEREST RATES.
(a) * * *
* * * * * * *
(l) Interest Rates for New Loans on or After July 1, 2006.--
(1) In general.--Notwithstanding subsection (h), with
respect to any loan made, insured, or guaranteed under
this part (other than a loan made pursuant to section
428B or 428C) for which the first disbursement is made
on or after July 1, 2006, and before July 1, 2010, the
applicable rate of interest shall be 6.8 percent on the
unpaid principal balance of the loan.
(2) PLUS loans.--Notwithstanding subsection (h), with
respect to any loan under section 428B for which the
first disbursement is made on or after July 1, 2006,
and before July 1, 2010, the applicable rate of
interest shall be 8.5 percent on the unpaid principal
balance of the loan.
(3) Consolidation loans.--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, and that was disbursed before July
1, 2010, the applicable rate of interest shall be at an
annual rate on the unpaid principal balance of the loan
that is equal to the lesser of--
(A) * * *
* * * * * * *
(4) Reduced rates for undergraduate subsidized
loans.--Notwithstanding subsection (h) and paragraph
(1) of this subsection, with respect to any loan to an
undergraduate student made, insured, or guaranteed
under this part (other than a loan made pursuant to
section 428B, 428C, or 428H) for which the first
disbursement is made on or after July 1, 2006, and
before July 1, [2012] 2010, the applicable rate of
interest shall be as follows:
(A) * * *
* * * * * * *
[(D) For a loan for which the first
disbursement is made on or after July 1, 2010,
and before July 1, 2011, 4.5 percent on the
unpaid principal balance of the loan.
[(E) For a loan for which the first
disbursement is made on or after July 1, 2011,
and before July 1, 2012, 3.4 percent on the
unpaid principal balance of the loan.]
* * * * * * *
SEC. 428. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.
(a) Federal Interest Subsidies.--
(1) Types of loans that qualify.--Each student who
has received a loan for study at an eligible
institution for which the first disbursement is made
before July 1, 2010, and--
(A) * * *
* * * * * * *
(5) Duration of authority to make interest subsidized
loans.--The period referred to in subparagraph (B) of
paragraph (1) of this subsection shall begin on the
date of enactment of this Act and end at the close of
[September 30, 2014, except that, in the case of a loan
made or insured under a student loan or loan insurance
program to enable a student who has obtained a prior
loan made or insured under such program to continue his
or her education program, such period shall end at the
close of September 30, 2018.] June 30, 2010.
* * * * * * *
(b) Insurance Program Agreements To Qualify Loans for
Interest Subsidies.--
(1) Requirements of insurance program.--Any State or
any nonprofit private institution or organization may
enter into an agreement with the Secretary for the
purpose of entitling students who receive loans which
are insured under a student loan insurance program of
that State, institution, or organization to have made
on their behalf the payments provided for in subsection
(a) if the Secretary determines that the student loan
insurance program--
(A) * * *
* * * * * * *
(G) insures 98 percent of the unpaid
principal of loans insured under the program,
except that--
(i) * * *
(ii) for any loan for which the first
disbursement of principal is made on or
after July 1, 2006, and before July 1,
2010, the preceding provisions of this
subparagraph shall be applied by
substituting ``97 percent'' for ``98
percent''; and
* * * * * * *
(H) provides--
(i) * * *
(ii) for loans for which the date of
guarantee of principal is on or after
July 1, 2006, and that are first
disbursed before July 1, 2010, for the
collection, and the deposit into the
Federal Student Loan Reserve Fund under
section 422A of a Federal default fee
of an amount equal to 1.0 percent of
the principal amount of the loan, which
fee shall be collected either by
deduction from the proceeds of the loan
or by payment from other non-Federal
sources, and ensures that the proceeds
of the Federal default fee will not be
used for incentive payments to lenders;
* * * * * * *
(f) Payments of Certain Costs.--
(1) Payment for certain activities.--
(A) In general.--The Secretary--
(i) * * *
(ii) for loans originated [during
fiscal years beginning] on or after
October 1, 2003, and first disbursed
before July 1, 2010, and in accordance
with the provisions of this paragraph,
shall, except as provided in
subparagraph (C), pay to each guaranty
agency, a loan processing and issuance
fee equal to 0.40 percent of the total
principal amount of the loans on which
insurance was issued under this part
during such fiscal year by such agency.
* * * * * * *
(j) Lenders-of-last-resort.--
(1) General requirement.--In each State, the guaranty
agency or an eligible lender in the State described in
section 435(d)(1)(D) of this Act shall, before July 1,
2010, make loans directly, or through an agreement with
an eligible lender or lenders, to eligible students and
parents who are otherwise unable to obtain loans under
this part (except for consolidation loans under section
428C) or who attend an institution of higher education
in the State that is designated under paragraph (4).
Loans made under this subsection shall not exceed the
amount of the need of the borrower, as determined under
subsection (a)(2)(B), nor be less than $200. No loan
under section 428, 428B, or 428H that is made pursuant
to this subsection shall be made with interest rates,
origination or default fees, or other terms and
conditions that are more favorable to the borrower than
the maximum interest rates, origination or default
fees, or other terms and conditions applicable to that
type of loan under this part. The guaranty agency shall
consider the request of any eligible lender, as defined
under section 435(d)(1)(A) of this Act, to serve as the
lender-of-last-resort pursuant to this subsection.
* * * * * * *
SEC. 428B. FEDERAL PLUS LOANS.
(a) Authority To Borrow.--
(1) Authority and eligibility.--[A graduate] Prior to
July 1, 2010, a graduate or professional student or the
parents of a dependent student shall be eligible to
borrow funds under this section in amounts specified in
subsection (b), if--
(A) * * *
* * * * * * *
SEC. 428C. FEDERAL CONSOLIDATION LOANS.
(a) Agreements With Eligible Lenders.--
(1) * * *
* * * * * * *
(3) Definition of eligible borrower.--(A) * * *
(B)(i) An individual's status as an eligible borrower
under this section or under section 455(g) terminates
under both sections upon receipt of a consolidation
loan under this section or under section 455(g), except
that--
(I) * * *
* * * * * * *
[(V) an individual may obtain a subsequent
consolidation loan under section 455(g) only--
[(aa) for the purposes of obtaining
income contingent repayment or income-
based repayment, and only if the loan
has been submitted to the guaranty
agency for default aversion or if the
loan is already in default;
[(bb) for the purposes of using the
public service loan forgiveness program
under section 455(m); or
[(cc) for the purpose of using the no
accrual of interest for active duty
service members benefit offered under
section 455(o).]
(V) an individual who has a
consolidation loan under this section
and does not have a consolidation loan
under section 455(g) may obtain a
subsequent consolidation loan under
section 455(g).
(4) Definition of eligible student loans.--For the
purpose of paragraph (1), the term ``eligible student
loans'' means loans--
(A) made, insured, or guaranteed under this
part, and first disbursed before July 1, 2010,
including loans on which the borrower has
defaulted (but has made arrangements to repay
the obligation on the defaulted loans
satisfactory to the Secretary or guaranty
agency, whichever insured the loans);
* * * * * * *
(b) Contents of Agreements, Certificates of Insurance, and
Loan Notes.--
(1) Agreements with lenders.--Any lender described in
subparagraph (A), (B), or (C) of subsection (a)(1) who
wishes to make consolidation loans under this section
shall enter into an agreement with the Secretary or a
guaranty agency which provides--
(A) * * *
* * * * * * *
(E) that the lender shall offer an income-
sensitive repayment schedule, established by
the lender in accordance with the regulations
promulgated by the Secretary, to the borrower
of any consolidation loan made by the lender on
or after July 1, 1994, and before July 1, 2010;
* * * * * * *
(5) Direct loans.--[In the event that] If, before
July 1, 2010, a borrower is unable to obtain a
consolidation loan from a lender with an agreement
under subsection (a)(1), or is unable to obtain a
consolidation loan with income-sensitive repayment
terms or income-based repayment terms acceptable to the
borrower from such a lender, or chooses to obtain a
consolidation loan for the purposes of using the public
service loan forgiveness program offered under section
455(m), the Secretary shall offer any such borrower who
applies for it, a Federal Direct Consolidation loan. In
addition, in the event that a borrower chooses to
obtain a consolidation loan for the purposes of using
the no accrual of interest for active duty service
members program offered under section 455(o), the
Secretary shall offer a Federal Direct Consolidation
loan to any such borrower who applies for participation
in such program. A direct consolidation loan offered
under this paragraph shall, as requested by the
borrower, be repaid either pursuant to income
contingent repayment under part D of this title,
pursuant to income-based repayment under section 493C,
or pursuant to any other repayment provision under this
section, except that if a borrower intends to be
eligible to use the public service loan forgiveness
program under section 455(m), such loan shall be repaid
using one of the repayment options described in section
455(m)(1)(A). The Secretary shall not offer such loans
if, in the Secretary's judgment, the Department of
Education does not have the necessary origination and
servicing arrangements in place for such loans.
* * * * * * *
(c) Payment of Principal and Interest.--
(1) Interest rate.--(A) Notwithstanding subparagraphs
(B) and (C), with respect to any loan made under this
section for which the application is received by an
eligible lender--
(i) * * *
(ii) on or after July 1, 2006, and that is
disbursed before July 1, 2010, the applicable
interest rate shall be determined under section
427A(l)(3).
* * * * * * *
(C) A consolidation loan made on or after July 1,
1994, and first disbursed before July 1, 2010, shall
bear interest at an annual rate on the unpaid principal
balance of the loan that is equal to the weighted
average of the interest rates on the loans
consolidated, rounded upward to the nearest whole
percent.
* * * * * * *
(e) Termination of Authority.--The authority to make loans
under this section expires at the close of [September 30,
2014.] June 30, 2010. No loan may be made under this section
for which the first disbursement would be on or after July 1,
2010. Nothing in this section shall be construed to authorize
the Secretary to promulgate rules or regulations governing the
terms or conditions of the agreements and certificates under
subsection (b). Loans made under this section which are insured
by the Secretary shall be considered to be new loans made to
students for the purpose of section 424(a).
* * * * * * *
SEC. 428H. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE-INCOME BORROWERS.
(a) In General.--It is the purpose of this section to
authorize insured loans under this part that are first
disbursed before July 1, 2010, for borrowers who do not qualify
for Federal interest subsidy payments under section 428 of this
Act. Except as provided in this section, all terms and
conditions for Federal Stafford loans established under section
428 shall apply to loans made pursuant to this section.
(b) Eligible Borrowers.--[Any student] Prior to July 1, 2010,
any student meeting the requirements for student eligibility
under section 484 (including graduate and professional students
as defined in regulations promulgated by the Secretary) shall
be entitled to borrow an unsubsidized Federal Stafford Loan for
which the first disbursement is made before such date if the
eligible institution at which the student has been accepted for
enrollment, or at which the student is in attendance, has--
(1) * * *
* * * * * * *
(h) Insurance Premium.--Each State or nonprofit private
institution or organization having an agreement with the
Secretary under section 428(b)(1) may charge a borrower under
this section an insurance premium equal to not more than 1.0
percent of the principal amount of the loan, if such premium
will not be used for incentive payments to lenders. Effective
for loans for which the date of guarantee of principal is on or
after July 1, 2006, and that are first disbursed before July 1,
2010, 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 an amount equal to 1.0 percent of the principal amount
of the loan, which fee shall be collected either by deduction
from the proceeds of the loan or by payment from other non-
Federal sources. The Federal default fee shall not be used for
incentive payments to lenders.
* * * * * * *
SEC. 428L. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE ATTORNEYS.
(a) * * *
(b) Definitions.--In this section:
(1) * * *
(2) Student loan.--
(A) In general.--Except as provided in
subparagraph (B), the term ``student loan''
means--
[(i) subject to clause (ii), a loan
made, insured, or guaranteed under this
part, part D, or part E; and]
(i) subject to clause (ii)--
(I) a loan made, insured, or
guaranteed under this part, and
that is first disbursed before
July 1, 2010; or
(II) a loan made under part D
or part E; and
(ii) a loan made under section [428C
or 455(g)] 428C, that is disbursed
before July 1, 2010, or section 455(g),
to the extent that such loan was used
to repay--
(I) * * *
(II) a loan made under
section 428, 428B, or 428H for
which the first disbursement is
made before July 1, 2010,; or
* * * * * * *
SEC. 435. DEFINITIONS FOR STUDENT LOAN INSURANCE PROGRAM.
As used in this part:
(a) Eligible Institution.--
(1) * * *
* * * * * * *
(5) Definition of mitigating circumstances.--(A) For
purposes of this subsection, an institution of higher
education shall be treated as having exceptional
mitigating circumstances that make application of
paragraph (2) inequitable, and that provide for
regulatory relief under paragraph (3), if such
institution, in the opinion of an independent auditor,
meets the following criteria:
(i) For a 12-month period that ended during
the 6 months immediately preceding the fiscal
year for which the cohort of borrowers used to
calculate the institution's cohort default rate
is determined, at least two-thirds of the
students enrolled on at least a half-time basis
at the institution--
(I) are eligible to receive a Federal
Pell Grant award that is at least equal
to [one-half the maximum Federal Pell
Grant award for which a student would
be eligible] one-half the Federal Pell
Grant amount, determined under section
401(b)(2)(A), for which a student would
be eligible based on the student's
enrollment status; or
* * * * * * *
SEC. 438. SPECIAL ALLOWANCES.
(a) * * *
(b) Computation and Payment.--
(1) * * *
(2) Rate of special allowance.--(A) * * *
* * * * * * *
(I) Loans disbursed on or after january 1, 2000, and
before july 1, 2010.--
(i) In general.--Notwithstanding
subparagraphs (G) and (H), but subject to
paragraph (4) and the following clauses of this
subparagraph, and except as provided in
subparagraph (B), the special allowance paid
pursuant to this subsection on loans for which
the first disbursement is made on or after
January 1, 2000, and before July 1, 2010, shall
be computed--
(I) * * *
(II) by subtracting the applicable
interest rates on such loans from [such
average bond equivalent rate] the rate
determined under subclause (I);
* * * * * * *
(ii) In school and grace period.--In the case
of any loan--
(I) * * *
(II) for which the first disbursement
is made on or after July 1, 2006, and
before July 1, 2010, and for which the
applicable rate of interest is
described in section section 427A(l)(1)
or (l)(4), but only with respect to
(aa) periods prior to the beginning of
the repayment period of the loan; or
(bb) during the periods in which
principal need not be paid (whether or
not such principal is in fact paid) by
reason of a provision described in
section 427(a)(2)(C) or 428(b)(1)(M);
clause (i)(III) of this subparagraph shall be
applied by substituting ``1.74 percent'' for
``2.34 percent''.
(iii) PLUS loans.--In the case of any loan
for which the first disbursement is made on or
after January 1, 2000, and before July 1, 2010,
and for which the applicable rate of interest
is described in section 427A(k)(3) or (l)(2),
clause (i)(III) of this subparagraph shall be
applied by substituting ``2.64 percent'' for
``2.34 percent''.
(iv) Consolidation loans.--In the case of any
consolidation loan for which the application is
received by an eligible lender on or after
January 1, 2000, and that is disbursed before
July 1, 2010, and for which the applicable
interest rate is determined under section
427A(k)(4) or (l)(3), clause (i)(III) of this
subparagraph shall be applied by substituting
``2.64 percent'' for ``2.34 percent''.
(v) Recapture of excess interest.--
(I) Excess credited.--With respect to
a loan on which the applicable interest
rate is determined under subsection (k)
or (l) of section 427A and for which
the first disbursement of principal is
made on or after April 1, 2006, and
before July 1, 2010, 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.
* * * * * * *
(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), [(iv), and (vi)] (iv),
(vi), and (vii) in determining such
sum.
(vi) Reduction for loans disbursed on or
after october 1, 2007, and before july 1,
2010.--With respect to a loan on which the
applicable interest rate is determined under
section 427A(l) and for which the first
disbursement of principal is made on or after
October 1, 2007, and before July 1, 2010, the
special allowance payment computed pursuant to
this subparagraph shall be computed--
(I) * * *
* * * * * * *
(vii) Revised calculation rule to reflect
financial market conditions.--
(I) Calculation based on libor.--For
the calendar quarter beginning on
October 1, 2009, and each subsequent
calendar quarter, in computing the
special allowance paid pursuant to this
subsection with respect to loans
described in subclause (II), clause
(i)(I) of this subparagraph shall be
applied by substituting ``of the 1-
month London Inter Bank Offered Rate
(LIBOR) for United States dollars in
effect for each of the days in such
quarter as compiled and released by the
British Bankers Association'' for ``of
the quotes of the 3-month commercial
paper (financial) rates in effect for
each of the days in such quarter as
reported by the Federal Reserve in
Publication H-15 (or its successor) for
such 3-month period''.
(II) Loans eligible for libor-based
calculation.--The special allowance
paid pursuant to this subsection shall
be calculated as described in subclause
(I) with respect to special allowance
payments for the 3-month period ending
December 31, 2009, and each succeeding
3-month period, on loans for which the
first disbursement is made--
(aa) on or after the date of
enactment of the Student Aid
and Fiscal Responsibility Act
of 2009, and before July 1,
2010; and
(bb) on or after January 1,
2000, and before the date of
enactment of the Student Aid
and Fiscal Responsibility Act
of 2009, if, not later than the
last day of the second full
fiscal quarter after the date
of enactment of such Act, the
holder of the loan
affirmatively and permanently
waives all contractual,
statutory or other legal rights
to a special allowance paid
pursuant to this subsection
that is calculated using the
formula in effect at the time
the loans were first disbursed.
(III) Terms of waiver.--A waiver
pursuant to subclause (II)(bb) shall--
(aa) be applicable to all
loans described in such
subclause that are held under
any lender identification
number associated with the
holder (pursuant to section
487B); and
(bb) apply with respect to
all future calculations of the
special allowance on loans
described in such subclause
that are held on the date of
such waiver or that are
acquired by the holder after
such date.
(IV) Participant's yield.--For the
calendar quarter beginning on October
1, 2009, and each subsequent calendar
quarter, the Secretary's participant
yield in any loan for which the first
disbursement is made on or after
January 1, 2000, and before October 1,
2009, and that is held by a lender that
has sold any participation interest in
such loan to the Secretary shall be
determined by using the LIBOR-based
rate described in subclause (I) as the
substitute rate (for the commercial
paper rate) referred to in the
participation agreement between the
Secretary and such lender.
* * * * * * *
(c) Origination Fees From Students.--
(1) * * *
(2) Amount of origination fees.--
(A) * * *
(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) * * *
* * * * * * *
(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; and
(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.]
* * * * * * *
(6) SLS And plus loans.--With respect to any loans
made under section 428A or 428B on or after October 1,
1992, and first disbursed before July 1, 2010, each
eligible lender under this part shall charge the
borrower an origination fee of 3.0 percent of the
principal amount of the loan, to be deducted
proportionately from each installment payment of the
proceeds of the loan prior to payments to the borrower.
* * * * * * *
(d) Loan Fees From Lenders.--
(1) * * *
(2) Amount of loan fees.--The amount of the loan fee
which shall be deducted under paragraph (1), but which
may not be collected from the borrower, shall be equal
to--
(A) * * *
(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 October 1, 2007, and before July 1,
2010.
* * * * * * *
PART D--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM
* * * * * * *
SEC. 452. FUNDS FOR ORIGINATION OF DIRECT STUDENT LOANS.
(a) * * *
* * * * * * *
(d) Institutions Located Outside the United States.--Loan
funds for students (and parents of students) attending
institutions located outside the United States shall be
disbursed through a financial institution located in the United
States and designated by the Secretary to serve as the agent of
such institutions with respect to the receipt of the
disbursements of such loan funds and the transfer of such funds
to such institutions. To be eligible to receive funds under
this part, an otherwise eligible institution located outside
the United States shall make arrangements, subject to
regulations by the Secretary, with the agent designated by the
Secretary under this subsection to receive funds under this
part.
* * * * * * *
SEC. 454. AGREEMENTS WITH INSTITUTIONS.
(a) Participation Agreements.--An agreement with any
institution of higher education for participation in the direct
student loan program under this part shall--
(1) * * *
* * * * * * *
[(4) provide that students at the institution and
their parents (with respect to such students) will be
eligible to participate in the programs under part B of
this title at the discretion of the Secretary for the
period during which such institution participates in
the direct student loan program under this part, except
that a student or parent may not receive loans under
both this part and part B for the same period of
enrollment;]
[(5)] (4) provide for the implementation of a quality
assurance system, as established by the Secretary and
developed in consultation with institutions of higher
education, to ensure that the institution is complying
with program requirements and meeting program
objectives;
[(6)] (5) provide that the institution will not
charge any fees of any kind, however described, to
student or parent borrowers for origination activities
or the provision of any information necessary for a
student or parent to receive a loan under this part, or
any benefits associated with such loan; and
[(7)] (6) include such other provisions as the
Secretary determines are necessary to protect the
interests of the United States and to promote the
purposes of this part.
(b) Origination.--An agreement with any institution of higher
education, or consortia thereof, for the origination of loans
under this part shall--
(1) * * *
(2) include provisions established by the Secretary
that are similar to the participation agreement
provisions described in paragraphs (1)(E)(ii), (2),
(3), (4), [(5), (6), and (7)] (5), and (6) of
subsection (a), as modified to relate to the
origination of loans by the institution or consortium;
* * * * * * *
SEC. 455. TERMS AND CONDITIONS OF LOANS.
(a) In General.--
(1) Parallel terms, conditions, benefits, and
amounts.--Unless otherwise specified in this part,
loans made to borrowers under this part shall have the
same terms, conditions, and benefits, and be available
in the same amounts, as loans made to borrowers, and
first disbursed on June 30, 2010, under sections 428,
428B, 428C, and 428H of this title.
* * * * * * *
(b) Interest Rate.--
(1) * * *
* * * * * * *
(7) Interest rate provision for new loans on or after
july 1, 2006.--
(A) * * *
* * * * * * *
(E) Reduced rates for undergraduate fdsl on
and after july 1, 2012.--Notwithstanding the
preceding paragraphs of this subsection and
subparagraph (A) of this paragraph, for Federal
Direct Stafford Loans made to undergraduate
students for which the first disbursement is
made on or after July 1, 2012, the applicable
rate of interest shall, during any 12-month
period beginning on July 1 and ending on June
30, be determined on the preceding June 1 and
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) 2.5 percent,
except that such rate shall not exceed 6.8
percent.
* * * * * * *
(g) Federal Direct Consolidation Loans.--A borrower of a loan
made under this part may consolidate such loan with the loans
described in section 428C(a)(4), including any loan made under
part B and first disbursed before July 1, 2010. To be eligible
for a consolidation loan under this part, a borrower shall 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)(G).]
* * * * * * *
SEC. 455A. FEDERAL DIRECT PERKINS LOANS.
(a) Designation of Loans.--Loans made to borrowers under this
section shall be known as ``Federal Direct Perkins Loans''.
(b) In General.--It is the purpose of this section to
authorize loans to be awarded by institutions of higher
education through agreements established under section 463(f).
Unless otherwise specified in this section, all terms and
conditions and other requirements applicable to Federal Direct
Unsubsidized Stafford loans established under section
455(a)(2)(D) shall apply to loans made pursuant to this
section.
(c) Eligible Borrowers.--Any student meeting the requirements
for student eligibility under section 464(b) (including
graduate and professional students as defined in regulations
promulgated by the Secretary) shall be eligible to borrow a
Federal Direct Perkins Loan, provided the student attends an
eligible institution with an agreement with the Secretary under
section 463(f), and the institution uses its authority under
that agreement to award the student a loan.
(d) Loan Limits.--The annual and aggregate limits for loans
under this section shall be the same as those established under
section 464, and aggregate limits shall include loans made by
institutions under agreements under section 463(a).
(e) Applicable Rates of Interest.--Loans made pursuant to
this section shall bear interest, on the unpaid balance of the
loan, at the rate of 5 percent per year.
SEC. 456. CONTRACTS.
(a) Contracts for Supplies and Services.--
(1) [In general.--The Secretary] Awarding of
contracts.--
(A) In general.--The Secretary shall, to the
extent practicable, award contracts for
origination, servicing, and collection
described in subsection (b). In awarding such
contracts, the Secretary shall ensure that such
services and supplies are provided at
competitive prices.
(B) Awarding contracts for servicing loans.--
The Secretary shall, if practicable, award
multiple contracts, through a competitive
bidding process, to entities, including
eligible not-for-profit servicers, to service
loans originated under this part. The
competitive bidding process shall take into
account price, servicing capacity, and
capability, and may take into account the
capacity and capability to provide default
aversion activities and outreach services.
(C) Job retention incentive payment.--(i) In
a contract with an entity under subparagraph
(B) for the servicing of loans, the Secretary
shall provide a job retention incentive
payment, in an amount and manner determined by
the Secretary, if such entity agrees to give
priority for hiring for positions created as a
result of such a contract to those geographical
locations at which the entity performed student
loan origination or servicing activities under
the Federal Family Education Loan Program as of
the date of enactment of the Student Aid and
Fiscal Responsibility Act of 2009.
(ii) In determining the allocation of loans
to be serviced by an entity awarded such a
contract, the Secretary shall consider the
retention of highly qualified employees of such
entity a positive factor in determining such
allocation.
(2) Entities.--The entities, including eligible not-
for-profit servicers, with which the Secretary may
enter into contracts shall include only entities which
the Secretary determines are qualified to provide such
services and supplies and will comply with the
procedures applicable to the award of such contracts.
In the case of awarding contracts for the origination,
servicing, and collection of loans under this part, the
Secretary shall enter into contracts only with entities
that have extensive and relevant experience and
demonstrated effectiveness. [The entities with which
the Secretary may enter into such contracts shall
include, where practicable, agencies with agreements
with the Secretary under sections 428(b) and (c), if
such agencies meet the qualifications as determined by
the Secretary under this subsection and if those
agencies have such experience and demonstrated
effectiveness. In awarding contracts to such State
agencies, the Secretary shall, to the extent
practicable and consistent with the purposes of this
part, give special consideration to State agencies with
a history of high quality performance to perform
services for institutions of higher education within
their State.] The entities with which the Secretary may
enter into such contracts shall include, where
practicable, agencies with agreements with the
Secretary under sections 428(b) and (c) on the date of
the enactment of the Student Aid and Fiscal
Responsibility Act of 2009, and eligible not-for-profit
servicers, if such agencies or servicers meet the
qualifications as determined by the Secretary under
this subsection and if those agencies or servicers have
such experience and demonstrated effectiveness. In
awarding contracts to such State agencies, and such
eligible not-for-profit servicers, the Secretary shall,
to the extent practicable and consistent with the
purposes of this part, give special consideration to
State agencies and such servicers with a history of
high quality performance and demonstrated integrity in
conducting operations with institutions of higher
education and the Secretary.
(3) Servicing by eligible not-for-profit servicers.--
(A) In general.--Notwithstanding any other
provision of this section, in each State where
one or more eligible not-for-profit servicer
has its principal place of business, the
Secretary shall contract with each such
servicer to service loans originated under this
part on behalf of borrowers attending
institutions located within such State,
provided that the servicer demonstrates that it
meets the standards for servicing Federal
assets and providing quality service and agrees
to service the loans at a competitive market
rate, as determined by the Secretary. In
determining such a competitive market rate, the
Secretary may take into account the volume of
loans serviced by the servicer. Contracts
awarded under this paragraph shall be subject
to the same requirements for quality,
performance, and accountability as contracts
awarded under paragraph (2) for similar
activities.
(B) Allocations.--(i) One servicer.--In the
case of a State with only one eligible not-for-
profit servicer with a contract described in
subparagraph (A), the Secretary shall, at a
minimum, allocate to such servicer, on an
annual basis and subject to such contract, the
servicing rights for the lesser of--
(I) the loans of 100,000 borrowers
(including borrowers who borrowed loans
in a prior year that were serviced by
the servicer) attending institutions
located within the State; or
(II) the loans of all the borrowers
attending institutions located within
the State.
(ii) Multiple servicers.--In the case of a
State with more than one eligible not-for-
profit servicer with a contract described in
subparagraph (A), the Secretary shall, at a
minimum, allocate to each such servicer, on an
annual basis and subject to such contract, the
servicing rights for the lesser of--
(I) the loans of 100,000 borrowers
(including borrowers who borrowed loans
in a prior year that were serviced by
the servicer) attending institutions
located within the State; or
(II) an equal share of the loans of
all borrowers attending institutions
located within the State, except the
Secretary shall adjust such shares as
necessary to ensure that the loans of
any single borrower remain with a
single servicer.
(iii) Additional allocation.--The Secretary
may allocate additional servicing rights to an
eligible not-for-profit servicer based on the
performance of such servicer, as determined by
the Secretary, including performance in the
areas of customer service and default aversion.
(C) Multiple loans.--Notwithstanding the
allocations required by subparagraph (B), the
Secretary may transfer loans among servicers
who are awarded contracts to service loans
pursuant to this section to ensure that the
loans of any single borrower remain with a
single servicer.
[(3)] (4) Rule of construction.--Nothing in this
section shall be construed as a limitation of the
authority of any State agency to enter into an
agreement for the purposes of this section as a member
of a consortium of State agencies, or of any eligible
not-for-profit servicer to enter into an agreement for
the purposes of this section as a member of a
consortium of such entities.
* * * * * * *
(c) Report to Congress.--Not later than 3 years after the
date of the enactment of the Student Aid and Fiscal
Responsibility Act of 2009, the Secretary shall prepare and
submit to the authorizing committees, a report evaluating the
performance of all eligible not-for-profit servicers awarded a
contract under this section to service loans originated under
this part. Such report shall give consideration to--
(1) customer satisfaction of borrowers and
institutions with respect to the loan servicing
provided by the servicers;
(2) compliance with applicable regulations by the
servicers; and
(3) the effectiveness of default aversion activities,
and outreach services (if any), provided by the
servicers.
(d) Definitions.--In this section:
(1) Default aversion activities.--The term ``default
aversion activities'' means activities that are
directly related to providing collection assistance to
the Secretary on a delinquent loan, prior to the loan
being legally in a default status, including due
diligence activities required pursuant to regulations.
(2) Eligible not-for-profit servicer.--
(A) In general.--The term ``eligible not-for-
profit servicer'' means an entity that, on the
date of enactment of the Student Aid and Fiscal
Responsibility Act of 2009--
(i) meets the definition of an
eligible not-for-profit holder under
section 435(p), except that such term
does not include eligible lenders
described in paragraph (1)(D) of such
section;
(ii) notwithstanding clause (i), is
the sole beneficial owner of a loan for
which the special allowance rate is
calculated under section
438(b)(2)(I)(vi)(II) because the loan
is held by an eligible lender trustee
that is an eligible not-for-profit
holder as defined under section
435(p)(1)(D); or
(iii) is an affiliated entity of an
eligible not-for-profit servicer
described in clause (i) or (ii) that--
(I) directly employs, or will
directly employ (on or before
the date the entity begins
servicing loans under a
contract awarded by the
Secretary pursuant to
subsection (a)(3)(A)), the
majority of individuals who
perform student loan servicing
functions; and
(II) on such date of
enactment, was performing, or
had entered into a contract
with a third party servicer (as
such term is defined in section
481(c)) who was performing,
student loan servicing
functions for loans made under
part B of this title.
(B) Affiliated entity.--For the purposes of
subparagraph (A), the term ``affiliated
entity'' means an entity contracted to perform
services for an eligible not-for-profit
servicer that--
(i) is a nonprofit entity or is
wholly owned by a nonprofit entity; and
(ii) is not owned or controlled, in
whole or in part, by--
(I) a for-profit entity; or
(II) an entity having its
principal place of business in
another State.
(3) Outreach services.--The term ``outreach
services'' means programs offered to students and
families, including programs delivered in coordination
with institutions of higher education that--
(A) encourage--
(i) students to attend and complete a
degree or certification program at an
institution of higher education; and
(ii) students and families to obtain
financial aid, but minimize the
borrowing of education loans; and
(B) deliver financial literacy and counseling
tools.
* * * * * * *
PART E--FEDERAL PERKINS LOANS
SEC. 461. APPROPRIATIONS AUTHORIZED.
(a) Program Authority.--The Secretary shall, before July 1,
2010, carry out a program of stimulating and assisting in the
establishment and maintenance of funds at institutions of
higher education for the making of low-interest loans to
students in need thereof to pursue their courses of study in
such institutions or while engaged in programs of study abroad
approved for credit by such institutions. Loans made under this
part shall be known as ``Federal Perkins Loans''.
(b) Authorization of Appropriations.--[(1) For the purpose]
For the purpose of enabling the Secretary to make contributions
to student loan funds established under this part, there are
authorized to be appropriated $300,000,000 for fiscal year 2009
[and for each of the five succeeding fiscal years].
[(2) In addition to the funds authorized under paragraph (1),
there are hereby authorized to be appropriated such sums for
fiscal year 2015 and each of the 5 succeeding fiscal years as
may be necessary to enable students who have received loans for
academic years ending prior to October 1, 2015, to continue or
complete courses of study.
[(c) Use of Appropriations.--Any sums appropriated pursuant
to subsection (b) for any fiscal year shall be available for
apportionment pursuant to section 462 and for payments of
Federal capital contributions therefrom to institutions of
higher education which have agreements with the Secretary under
section 463. Such Federal capital contributions and all
contributions from such institutions shall be used for the
establishment, expansion, and maintenance of student loan
funds.]
SEC. 462. ALLOCATION OF FUNDS.
(a) Allocation Based on Previous Allocation.--(1) [From] For
any fiscal year before fiscal year 2010, from the amount
appropriated pursuant to section 461(b) for each fiscal year,
the Secretary shall first allocate to each eligible institution
an amount equal to--
(A) * * *
* * * * * * *
(i) Reallocation of Excess Allocations.--
(1) In general.--(A) If an institution of higher
education returns to the Secretary any portion of the
sums allocated to such institution under this section
[for any fiscal year,] for any fiscal year before
fiscal year 2010, the Secretary shall reallocate 80
percent of such returned portions to participating
institutions in an amount not to exceed such
participating institution's excess eligible amounts as
determined under paragraph (2).
* * * * * * *
SEC. 462A. FEDERAL DIRECT PERKINS LOAN ALLOCATION.
(a) Purposes.--The purposes of this section are--
(1) to allocate, among eligible and participating
institutions (as such terms are defined in this
section), the authority to make Federal Direct Perkins
Loans under section 455A with a portion of the annual
loan authority described in subsection (b); and
(2) to make funds available, in accordance with
section 452, to each participating institution from a
portion of the annual loan authority described in
subsection (b), in an amount not to exceed the sum of
an institution's allocation of funds under
subparagraphs (A), (B), and (C) of subsection (b)(1) to
enable each such institution to make Federal Direct
Perkins Loans to eligible students at the institution.
(b) Available Direct Perkins Annual Loan Authority.--
(1) Availability and allocations.--There are hereby
made available, from funds made available for loans
made under part D, not to exceed $6,000,000,000 of
annual loan authority for award year 2010-2011 and each
succeeding award year, to be allocated as follows:
(A) The Secretary shall allocate not more
than \1/2\ of such funds for each award year by
allocating to each participating institution an
amount equal to the adjusted self-help need
amount of the institution, as determined in
accordance with subsection (c) for such award
year.
(B) The Secretary shall allocate not more
than \1/4\ of such funds for each award year by
allocating to each participating institution an
amount equal to the low tuition incentive
amount of the institution, as determined in
accordance with subsection (d).
(C) The Secretary shall allocate not more
than \1/4\ of such funds for each award year by
allocating to each participating institution an
amount which bears the same ratio to the funds
allocated under this subparagraph as the ratio
determined in accordance with subsection (e)
for the calculation of the Federal Pell Grant
and degree recipient amount of the institution.
(2) No funds to non-participating institutions.--The
Secretary shall not make funds available under this
subsection to any eligible institution that is not a
participating institution. The adjusted self-help need
amount (determined in accordance with subsection (c))
of an eligible institution that is not a participating
institution shall not be made available to any other
institution.
(c) Adjusted Self-Help Need Amount.--For the purposes of
subsection (b)(1)(A), the Secretary shall calculate the
adjusted self-help need amount of each eligible institution for
an award year as follows:
(1) Use of base self-help need amounts.--
(A) In general.--Except as provided in
paragraphs (2), (3), and (4), the adjusted
self-help need amount of each eligible
institution shall be the institution's base
self-help need amount, which is the sum of--
(i) the self-help need of the
institution's eligible undergraduate
students for such award year; and
(ii) the self-help need of the
institution's eligible graduate and
professional students for such award
year.
(B) Undergraduate student self-help need.--To
determine the self-help need of an
institution's eligible undergraduate students,
the Secretary shall determine the sum of each
eligible undergraduate student's average cost
of attendance for the second preceding award
year less each such student's expected family
contribution (computed in accordance with part
F) for the second preceding award year, except
that, for each such eligible undergraduate
student, the amount computed by such
subtraction shall not be less than zero or more
than the lesser of--
(i) 25 percent of the average cost of
attendance with respect to such
eligible student; or
(ii) $5,500.
(C) Graduate and professional student self-
help need.--To determine the self-help need of
an institution's eligible graduate and
professional students, the Secretary shall
determine the sum of each eligible graduate and
professional student's average cost of
attendance for the second preceding award year
less each such student's expected family
contribution (computed in accordance with part
F) for such second preceding award year, except
that, for each such eligible graduate and
professional student, the amount computed by
such subtraction shall not be less than zero or
more than $8,000.
(2) Ratable reduction adjustments.--If the sum of the
base self-help need amounts of all eligible
institutions for an award year as determined under
paragraph (1) exceeds \1/2\ of the annual loan
authority under subsection (b) for such award year, the
Secretary shall ratably reduce the base self-help need
amounts of all eligible institutions until the sum of
such amounts is equal to the amount that is \1/2\ of
the annual loan authority under subsection (b).
(3) Required minimum amount.--Notwithstanding
paragraph (2), the adjusted self-help need amount of
each eligible institution shall not be less than the
average of the institution's total principal amount of
loans made under this part for each of the 5 most
recent award years.
(4) Additional adjustments.--If the Secretary
determines that a ratable reduction under paragraph (2)
results in the adjusted self-help need amount of any
eligible institution being reduced below the minimum
amount required under paragraph (3), the Secretary
shall--
(A) for each institution for which the
minimum amount under paragraph (3) is not
satisfied, increase the adjusted self-help need
amount to the amount of the required minimum
under such subparagraph; and
(B) ratably reduce the adjusted self-help
need amounts of all eligible institutions not
described in subparagraph (A) until the sum of
the adjusted self-help need amounts of all
eligible institutions is equal to the amount
that is \1/2\ of the annual loan authority
under subsection (b).
(d) Low Tuition Incentive Amount.--
(1) In general.--For purposes of subsection
(b)(1)(B), the Secretary shall determine the low
tuition incentive amount for each participating
institution for each award year, by calculating for
each such institution the sum of--
(A) the total amount, if any (but not less
than zero), by which--
(i) the average tuition and required
fees for the institution's sector for
the second preceding award year;
exceeds
(ii) the tuition and required fees
for the second preceding award year for
each undergraduate and graduate student
attending the institution who had
financial need (as determined under
part F); plus
(B) the total amount, if any (but not less
than zero), by which--
(i) the total amount for the second
preceding award year of non-Federal
grant aid provided to meet the
financial need of all undergraduate
students attending the institution (as
determined without regard to financial
aid not received under this title);
exceeds
(ii) the total amount for the second
preceding award year, if any, by
which--
(I) the tuition and required
fees of each such student with
such financial need; exceeds
(II) the average tuition and
required fees for the
institution's sector.
(2) Ratable reduction.--If the sum of the low tuition
incentive amounts of all participating institutions for
an award year as determined under paragraph (1) exceeds
\1/4\ of the annual loan authority under subsection (b)
for such award year, the Secretary shall ratably reduce
the low tuition incentive amounts of all participating
institutions until the sum of such amounts is equal to
the amount that is \1/4\ of the annual loan authority
under subsection (b).
(e) Federal Pell Grant and Degree Recipient Amount.--For
purposes of subsection (b)(1)(C), the Secretary shall determine
the Federal Pell Grant and degree recipient amount for each
participating institution for each award year, by calculating
for each such institution the ratio of--
(1) the number of students who, during the most
recent year for which data are available, obtained an
associate's degree or other postsecondary degree from
such participating institution and, prior to obtaining
such degree, received a Federal Pell Grant for
attendance at any institution of higher education; to
(2) the sum of the number of students who, during the
most recent year for which data are available, obtained
an associate's degree or other postsecondary degree
from each participating institution and, prior to
obtaining such degree, received a Federal Pell Grant
for attendance at any institution of higher education.
(f) Definitions.--As used in this section:
(1) Annual loan authority.--The term ``annual loan
authority'' means the total original principal amount
of loans that may be allocated and made available for
an award year to make Federal Direct Perkins Loans
under section 455A.
(2) Average cost of attendance.--
(A) In general.--The term ``average cost of
attendance'' means the average of the
attendance costs for undergraduate students and
for graduate and professional students,
respectively, for the second preceding award
year which shall include--
(i) tuition and required fees
determined in accordance with
subparagraph (B);
(ii) standard living expenses
determined in accordance with
subparagraph (C); and
(iii) books and supplies determined
in accordance with subparagraph (D).
(B) Tuition and required fees.--The average
undergraduate and graduate and professional
tuition and required fees described in
subparagraph (A)(i) shall be computed on the
basis of information reported by the
institution to the Secretary, which shall
include--
(i) total revenue received by the
institution from undergraduate and
graduate and professional students,
respectively, for tuition and required
fees for the second preceding award
year; and
(ii) the institution's full-time
equivalent enrollment of undergraduate
and graduate and professional students,
respectively, for such second preceding
award year.
(C) Standard living expenses.--The standard
living expense described in subparagraph
(A)(ii) is equal to the allowance, determined
by an institution, for room and board costs
incurred by a student, as computed in
accordance with part F for the second preceding
award year.
(D) Books and supplies.--The allowance for
books and supplies described in subparagraph
(A)(iii) is equal to the allowance, determined
by an institution, for books, supplies,
transportation, and miscellaneous personal
expenses, including a reasonable allowance for
the documented rental or purchase of a personal
computer, as computed in accordance with part F
for the second preceding award year.
(3) Average tuition and required fees for the
institution's sector.--The term ``average tuition and
required fees for the institution's sector'' shall be
determined by the Secretary for each of the categories
described in section 132(d).
(4) Eligible institution.--The term ``eligible
institution'' means an institution of higher education
that participates in the Federal Direct Stafford Loan
Program.
(5) Participating institution.--The term
``participating institution'' means an institution of
higher education that has an agreement under section
463(f).
(6) Sector.--The term ``sector'' means each of the
categories described in section 132(d).
SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.
(a) Contents of Agreements for Loans Made Before July 1,
2010.--An agreement with any institution of higher education
for the payment of Federal capital contributions under this
part shall--
(1) * * *
* * * * * * *
(3) provide that such student loan fund shall be used
only for--
(A) loans to students before July 1, 2010, in
accordance with the provisions of this part;
* * * * * * *
(4) provide that where a note or written agreement
evidencing a loan has been in default despite due
diligence on the part of the institution in attempting
collection [thereon--
[(A) if the institution has knowingly failed
to maintain an acceptable collection record
with respect to such loan, as determined by the
Secretary in accordance with criteria
established by regulation, the Secretary may--
[(i) require the institution to
assign such note or agreement to the
Secretary, without recompense; and
[(ii) apportion any sums collected on
such a loan, less an amount not to
exceed 30 percent of any sums collected
to cover the Secretary's collection
costs, among other institutions in
accordance with section 462; or
[(B) if the institution is not one described
in subparagraph (A), the Secretary may allow
such institution to refer such note or
agreement to the Secretary, without recompense,
except that, once every six months, any sums
collected on such a loan (less an amount not to
exceed 30 percent of any such sums collected to
cover the Secretary's collection costs) shall
be repaid to such institution and treated as an
additional capital contribution under section
462;] thereon, if the institution has failed to
maintain an acceptable collection record with
respect to such loan, as determined by the
Secretary in accordance with criteria
established by regulation, the Secretary may
require the institution to assign such note or
agreement to the Secretary, without recompense;
(5) provide that, if an institution of higher
education determines not to service and collect student
loans made available from funds under this part, the
institution will assign, at the beginning of the
repayment period, notes or evidence of obligations of
student loans made from such funds to the Secretary
[and the Secretary shall apportion any sums collected
on such notes or obligations (less an amount not to
exceed 30 percent of any such sums collected to cover
that Secretary's collection costs) among other
institutions in accordance with section 462] and the
Secretary shall return a portion of funds from loan
repayments to the institution as specified in section
466(b);
* * * * * * *
[(b) Administrative Expenses.--An institution which has
entered into an agreement under subsection (a) shall be
entitled, for each fiscal year during which it makes student
loans from a student loan fund established under such
agreement, to a payment in lieu of reimbursement for its
expenses in administering its student loan program under this
part during such year. Such payment shall be made in accordance
with section 489.]
(b) Administrative Expenses.--An institution that has entered
into an agreement under subsection (a) shall be entitled, for
each fiscal year during which it services student loans from a
student loan fund established under such agreement, to a
payment in lieu of reimbursement for its expenses in servicing
student loans made before July 1, 2010. Such payment shall be
equal to 0.50 percent of the outstanding principal and interest
balance of such loans being serviced by the institution as of
September 30 of each fiscal year.
* * * * * * *
(f) Contents of Agreements for Loans Made on or After July 1,
2010.--An agreement with any institution of higher education
that elects to participate in the Federal Direct Perkins Loan
program under section 455A shall provide--
(1) for the establishment and maintenance of a Direct
Perkins Loan program at the institution under which the
institution shall use loan authority allocated under
section 462A to make loans to eligible students
attending the institution;
(2) that the institution, unless otherwise specified
in this subsection, shall operate the program
consistent with the requirements of agreements
established under section 454;
(3) that the institution will pay matching funds,
quarterly, in an amount agreed to by the institution
and the Secretary, to an escrow account approved by the
Secretary, for the purpose of providing loan benefits
to borrowers;
(4) that if the institution fails to meet the
requirements of paragraph (3), the Secretary shall
suspend or terminate the institution's eligibility to
make Federal Direct Perkins Loans under section 455A
until such time as the Secretary determines, in
accordance with section 498, that the institution has
met the requirements of such paragraph; and
(5) that if the institution ceases to be an eligible
institution within the meaning of section 435(a) by
reason of having a cohort default rate that exceeds the
threshold percentage specified paragraph (2) of such
section, the Secretary shall suspend or terminate the
institution's eligibility to make Federal Direct
Perkins Loans under section 455A unless and until the
institution would qualify for a resumption of eligible
institution status under such section.
SEC. 463A. STUDENT LOAN INFORMATION BY ELIGIBLE INSTITUTIONS.
(a) Disclosure Required Prior to Disbursement.--[Each
institution] For loans made before July 1, 2010, each
institution of higher education, in order to carry out the
provisions of section 463(a)(8), shall, at or prior to the time
such institution makes a loan to a student borrower which is
made under this part, provide thorough and adequate loan
information on such loan to the student borrower. Any
disclosure required by this subsection may be made by an
institution of higher education as part of the written
application material provided to the borrower, or as part of
the promissory note evidencing the loan, or on a separate
written form provided to the borrower. The disclosures shall
include--
(1) * * *
* * * * * * *
(b) Disclosure Required Prior to Repayment.--[Each
institution] For loans made before July 1, 2010, each
institution of higher education shall enter into an agreement
with the Secretary under which the institution will, prior to
the start of the repayment period of the student borrower on
loans made under this part, disclose to the student borrower
the information required under this subsection. Any disclosure
required by this subsection may be made by an institution of
higher education either in a promissory note evidencing the
loan or loans or in a written statement provided to the
borrower. The disclosures shall include--
(1) * * *
* * * * * * *
SEC. 464. TERMS OF LOANS.
(a) Terms and Conditions.--(1) Loans from any student loan
fund established pursuant to an agreement under section 463(a)
to any student by any institution shall, subject to such
conditions, limitations, and requirements as the Secretary
shall prescribe by regulation, be made on such terms and
conditions as the institution may determine.
* * * * * * *
(b) Demonstration of Need and Eligibility Required.--(1) A
loan made before July 1, 2010, from a student loan fund
assisted under this part may be made only to a student who
demonstrates financial need in accordance with part F of this
title, who meets the requirements of section 484, and who
provides the institution with the student's drivers license
number, if any, at the time of application for the loan. A
student who is in default on a loan under this part shall not
be eligible for an additional loan under this part unless such
loan meets one of the conditions for exclusion under section
462(g)(1)(E).
* * * * * * *
(c) Contents of Loan Agreement.--(1) Any agreement between an
institution and a student for a loan made before July 1, 2010,
from a student loan fund assisted under this part--
(A) * * *
* * * * * * *
(2)(A) No repayment of principal of, or interest on, any loan
made before July 1, 2010, from a student loan fund assisted
under this part shall be required during any period--
(i) * * *
* * * * * * *
(B) No repayment of principal of, or interest on, any loan
made before July 1, 2010, for any period described in
subparagraph (A) shall begin until 6 months after the
completion of such period.
* * * * * * *
(3)(A) * * *
(B) Pursuant to uniform criteria established by the
Secretary, the repayment period for any student borrower who
during the repayment period for a loan made before July 1,
2010, is a low-income individual may be extended for a period
not to exceed 10 years and the repayment schedule may be
adjusted to reflect the income of that individual.
(4) The repayment period for a loan made before July 1, 2010,
under this part shall begin on the day immediately following
the expiration of the period, specified in paragraph (1)(A),
after the student ceases to carry the required academic
workload, unless the borrower requests and is granted a
repayment schedule that provides for repayment to commence at
an earlier point in time, and shall exclude any period of
authorized deferment, forbearance, or cancellation.
(5) [The institution] For loans made before July 1, 2010, the
institution may elect--
(A) * * *
* * * * * * *
(6) Requests for deferment of repayment of loans made before
July 1, 2010, under this part by students engaged in graduate
or post-graduate fellowship-supported study (such as pursuant
to a Fulbright grant) outside the United States shall be
approved until completion of the period of the fellowship.
* * * * * * *
(d) Availability of Loan Fund to All Eligible Students.--An
agreement under this part for payment of Federal capital
contributions shall include provisions designed to make loans
made before July 1, 2010, from the student loan fund
established pursuant to such agreement reasonably available (to
the extent of the available funds in such fund) to all eligible
students in such institutions in need thereof.
(e) Forbearance.--(1) The Secretary shall ensure that, with
respect to loans made before July 1, 2010, and as documented in
accordance with paragraph (2), an institution of higher
education shall grant a borrower forbearance of principal and
interest or principal only, renewable at 12-month intervals for
a period not to exceed 3 years, on such terms as are otherwise
consistent with the regulations issued by the Secretary and
agreed upon in writing by the parties to the loan, if--
(A) * * *
* * * * * * *
[(f) Special Repayment Rule Authority.--(1) Subject to such
restrictions as the Secretary may prescribe to protect the
interest of the United States, in order to encourage repayment
of loans made under this part which are in default, the
Secretary may, in the agreement entered into under this part,
authorize an institution of higher education to compromise on
the repayment of such defaulted loans in accordance with
paragraph (2). The Federal share of the compromise repayment
shall bear the same relation to the institution's share of such
compromise repayment as the Federal capital contribution to the
institution's loan fund under this part bears to the
institution's capital contribution to such fund.
[(2) No compromise repayment of a defaulted loan as
authorized by paragraph (1) may be made unless the student
borrower pays--
[(A) 90 percent of the loan under this part;
[(B) the interest due on such loan; and
[(C) any collection fees due on such loan;
in a lump sum payment.]
(g) Discharge.--
(1) In general.--If a student borrower who received a
loan made under this part on or after January 1, 1986,
and before July 1, 2010, is unable to complete the
program in which such student is enrolled due to the
closure of the institution, then the Secretary shall
discharge the borrower's liability on the loan
(including the interest and collection fees) and shall
subsequently pursue any claim available to such
borrower against the institution and the institution's
affiliates and principals, or settle the loan
obligation pursuant to the financial responsibility
standards described in section 498(c).
* * * * * * *
(h) Rehabilitation of Loans.--
(1) Rehabilitation.--
(A) In general.--If the borrower of a loan
made under this part before July 1, 2010, who
has defaulted on the loan makes 9 on-time,
consecutive, monthly payments of amounts owed
on the loan, as determined by the institution,
or by the Secretary in the case of a loan held
by the Secretary, the loan shall be considered
rehabilitated, and the institution that made
that loan (or the Secretary, in the case of a
loan held by the Secretary) shall request that
any consumer reporting agency to which the
default was reported remove the default from
the borrower's credit history.
* * * * * * *
(2) Restoration of eligibility.--If the borrower of a
loan made under this part before July 1, 2010, who has
defaulted on that loan makes 6 ontime, consecutive,
monthly payments of amounts owed on such loan, the
borrower's eligibility for grant, loan, or work
assistance under this title shall be restored to the
extent that the borrower is otherwise eligible. A
borrower only once may obtain the benefit of this
paragraph with respect to restored eligibility.
* * * * * * *
(j) Armed Forces Student Loan Interest Payment Program.--
(1) Authority.--Using funds received by transfer to
the Secretary under section 2174 of title 10, United
States Code, for the payment of interest on a loan made
under this part before July 1, 2010, to a member of the
Armed Forces, the Secretary shall pay the interest on
the loan as due for a period not in excess of 36
consecutive months. The Secretary may not pay interest
on such a loan out of any funds other than funds that
have been so transferred.
* * * * * * *
SEC. 465. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE.
(a) Cancellation of Percentage of Debt Based on Years of
Qualifying Service.--(1) The percent specified in paragraph (3)
of this subsection of the total amount of any loan made after
June 30, 1972, and before July 1, 2010, from a student loan
fund assisted under this part shall be canceled for each
complete year of service after such date by the borrower under
circumstances described in paragraph (2).
* * * * * * *
[(b) Reimbursement for Cancellation.--The Secretary shall pay
to each institution for each fiscal year an amount equal to the
aggregate of the amounts of loans from its student loan fund
which are canceled pursuant to this section for such year,
minus an amount equal to the aggregate of the amounts of any
such loans so canceled which were made from Federal capital
contributions to its student loan fund provided by the
Secretary under section 468. None of the funds appropriated
pursuant to section 461(b) shall be available for payments
pursuant to this subsection. To the extent feasible, the
Secretary shall pay the amounts for which any institution
qualifies under this subsection not later than 3 months after
the institution files an institutional application for campus-
based funds.]
(b) Reimbursement for Cancellations.--
(1) Assigned loans.--In the case of loans made under
this part before July 1, 2010, and that are assigned to
the Secretary, the Secretary shall, from amounts repaid
each quarter on assigned Perkins Loans made before July
1, 2010, pay to each institution for each quarter an
amount equal to--
(A) the aggregate of the amounts of loans
from its student loan fund that are canceled
pursuant to this section for such quarter,
minus
(B) an amount equal to the aggregate of the
amounts of any such loans so canceled that were
made from Federal capital contributions to its
student loan fund.
(2) Retained loans.--In the case of loans made under
this part before July 1, 2010, and that are retained by
the institution for servicing, the institution shall
deduct from loan repayments owed to the Secretary under
section 466, an amount equal to--
(A) the aggregate of the amounts of loans
from its student loan fund that are canceled
pursuant to this section for such quarter,
minus
(B) an amount equal to the aggregate of the
amounts of any such loans so canceled that were
made from Federal capital contributions to its
student loan fund.
* * * * * * *
[SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.
[(a) In General.--After September 30, 2003, and not later
than March 31, 2004, there shall be a capital distribution of
the balance of the student loan fund established under this
part by each institution of higher education as follows:
[(1) The Secretary shall first be paid an amount
which bears the same ratio to the balance in such fund
at the close of September 30, 2003, as the total amount
of the Federal capital contributions to such fund by
the Secretary under this part bears to the sum of such
Federal contributions and the institution's capital
contributions to such fund.
[(2) The remainder of such balance shall be paid to
the institution.
[(b) Distribution of Late Collections.--After October 1,
2012, each institution with which the Secretary has made an
agreement under this part, shall pay to the Secretary the same
proportionate share of amounts received by this institution
after September 30, 2003, in payment of principal and interest
on student loans made from the student loan fund established
pursuant to such agreement (which amount shall be determined
after deduction of any costs of litigation incurred in
collection of the principal or interest on loans from the fund
and not already reimbursed from the fund or from such payments
of principal or interest), as was determined for the Secretary
under subsection (a).
[(c) Distribution of Excess Capital.--(1) Upon a finding by
the institution or the Secretary prior to October 1, 2004, that
the liquid assets of a student loan fund established pursuant
to an agreement under this part exceed the amount required for
loans or otherwise in the foreseeable future, and upon notice
to such institution or to the Secretary, as the case may be,
there shall be, subject to such limitations as may be included
in regulations of the Secretary or in such agreement, a capital
distribution from such fund. Such capital distribution shall be
made as follows:
[(A) The Secretary shall first be paid an amount
which bears the same ratio to the total to be
distributed as the Federal capital contributions by the
Secretary to the student loan fund prior to such
distribution bear to the sum of such Federal capital
contributions and the capital contributions to the fund
made by the institution.
[(B) The remainder of the capital distribution shall
be paid to the institution.
[(2) No finding that the liquid assets of a student loan fund
established under this part exceed the amount required under
paragraph (1) may be made prior to a date which is 2 years
after the date on which the institution of higher education
received the funds from such institution's allocation under
section 462.]
SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.
(a) Capital Distribution.--Beginning July 1, 2010, there
shall be a capital distribution of the balance of the student
loan fund established under this part by each institution of
higher education as follows:
(1) For the quarter beginning July 1, 2010, the
Secretary shall first be paid, no later than September
30, 2010, an amount that bears the same ratio to the
cash balance in such fund at the close of June 30,
2010, as the total amount of the Federal capital
contributions to such fund by the Secretary under this
part bears to--
(A) the sum of such Federal contributions and
the institution's capital contributions to such
fund, less
(B) an amount equal to--
(i) the institution's outstanding
administrative costs as calculated
under section 463(b),
(ii) outstanding charges assessed
under section 464(c)(1)(H), and
(iii) outstanding loan cancellation
costs incurred under section 465.
(2) At the end of each quarter subsequent to the
quarter ending September 30, 2010, the Secretary shall
first be paid an amount that bears the same ratio to
the cash balance in such fund at the close of the
preceding quarter, as the total amount of the Federal
capital contributions to such fund by the Secretary
under this part bears to--
(A) the sum of such Federal contributions and
the institution's capital contributions to such
fund, less
(B) an amount equal to--
(i) the institution's administrative
costs incurred for that quarter as
calculated under section 463(b),
(ii) charges assessed for that
quarter under section 464(c)(1)(H), and
(iii) loan cancellation costs
incurred for that quarter under section
465.
(3)(A) The Secretary shall calculate the amounts due
to the Secretary under paragraph (1) (adjusted in
accordance with subparagraph (B), as appropriate) and
paragraph (2) and shall promptly inform the institution
of such calculated amounts.
(B) In the event that, prior to the date of enactment
of the Student Aid and Fiscal Responsibility Act of
2009, an institution made a short-term, interest-free
loan to the institution's student loan fund established
under this part in anticipation of collections or
receipt of Federal capital contributions, and the
institution demonstrates to the Secretary, on or before
June 30, 2010, that such loan will still be outstanding
after June 30, 2010, the Secretary shall subtract the
amount of such outstanding loan from the cash balance
of the institution's student loan fund that is used to
calculate the amount due to the Secretary under
paragraph (1). An adjustment of an amount due to the
Secretary under this subparagraph shall be made by the
Secretary on a case-by-case basis.
(4) Any remaining balance at the end of a quarter
after a payment under paragraph (1) or (2) shall be
retained by the institution for use at its discretion.
Any balance so retained shall be withdrawn from the
student loan fund and shall not be counted in
calculating amounts owed to the Secretary for
subsequent quarters.
(5) Each institution shall make the quarterly
payments to the Secretary described in paragraph (2)
until all outstanding Federal Perkins Loans at that
institution have been assigned to the Secretary and
there are no funds remaining in the institution's
student loan fund.
(6) In the event that the institution's
administrative costs, charges, and cancellation costs
described in paragraph (2) for a quarter exceed the
amount owed to the Secretary under paragraphs (1) and
(2) for that quarter, no payment shall be due to the
Secretary from the institution for that quarter and the
Secretary shall pay the institution, from funds
realized from the collection of assigned Federal
Perkins Loans made before July 1, 2010, an amount that,
when combined with the amount retained by the
institution under paragraphs (1) and (2), equals the
full amount of such administrative costs, charges, and
cancellation costs.
(b) Assignment of Outstanding Loans.--Beginning July 1, 2010,
an institution of higher education may assign all outstanding
loans made under this part before July 1, 2010, to the
Secretary, consistent with the requirements of section
463(a)(5). In collecting loans so assigned, the Secretary shall
pay an institution an amount that constitutes the same fraction
of such collections as the fraction of the cash balance that
the institution retains under subsection (a)(2), but
determining such fraction without regard to subparagraph (B)(i)
of such subsection.
* * * * * * *
PART F--NEED ANALYSIS
SEC. 471. AMOUNT OF NEED.
[Except] (a) In General.--Except as otherwise provided
therein and subject to subsection (b), the amount of need of
any student for financial assistance under this title (except
subparts 1 or 2 of part A) is equal to--
(1) * * *
* * * * * * *
(b) Asset Cap for Need-Based Aid.--Notwithstanding any other
provision of this title, a student shall not be eligible to
receive a Federal Pell Grant, a Federal Direct Stafford Loan,
or work assistance under this title if--
(1) in the case of a dependent student, the combined
net assets of the student and the student's parents are
equal to an amount greater than $150,000 (or a
successor amount prescribed by the Secretary under
section 478(c)); or
(2) in the case of an independent student, the net
assets of the student (and the student's spouse, if
applicable) are equal to an amount greater than
$150,000 (or a successor amount prescribed by the
Secretary under section 478(c)).
* * * * * * *
SEC. 474. DETERMINATION OF EXPECTED FAMILY CONTRIBUTION; DATA ELEMENTS.
(a) * * *
(b) Data Elements.--The following data elements are
considered in determining the expected family contribution:
(1) * * *
* * * * * * *
[(4) the net assets of (A) the student and the
student's spouse, and (B) the student and the student's
parents, in the case of a dependent student;]
[(5)] (4) the marital status of the student;
[(6)] (5) the age of the older parent, in the case of
a dependent student, and the student; and
[(7)] (6) the additional expenses incurred (A) in the
case of a dependent student, when both parents of the
student are employed or when the family is headed by a
single parent who is employed, or (B) in the case of an
independent student, when the student is married and
the student's spouse is employed, or when the employed
student qualifies as a surviving spouse or as a head of
a household under section 2 of the Internal Revenue
Code of 1986.
SEC. 475. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.
(a) Computation of Expected Family Contribution.--For each
dependent student, the expected family contribution is equal to
the sum of--
(1) the parents' contribution from [adjusted]
available income (determined in accordance with
subsection (b)); and
(2) the student contribution from available income
(determined in accordance with subsection (g))[; and].
[(3) the student contribution from assets (determined
in accordance with subsection (h)).]
(b) Parents' Contribution From [Adjusted] Available Income.--
The parents' contribution from [adjusted] available income is
equal to the amount determined by--
[(1) computing adjusted available income by adding--
[(A) the parents' available income
(determined in accordance with subsection (c));
and
[(B) the parents' contribution from assets
(determined in accordance with subsection
(d));]
[(2)] (1) assessing such [adjusted] available income
in accordance with the assessment schedule set forth in
subsection (e); and
[(3)] (2) dividing the assessment resulting under
paragraph [(2] (1)) by the number of the family
members, excluding the student's parents, who are
enrolled or accepted for enrollment, on at least a
half-time basis, in a degree, certificate, or other
program leading to a recognized educational credential
at an institution of higher education that is an
eligible institution in accordance with the provisions
of section 487 during the award period for which
assistance under this title is requested;
* * * * * * *
[(d) Parents' Contribution From Assets.--
[(1) In general.--The parents' contribution from
assets is equal to--
[(A) the parental net worth (determined in
accordance with paragraph (2)); minus
[(B) the education savings and asset
protection allowance (determined in accordance
with paragraph (3)); multiplied by
[(C) the asset conversion rate (determined in
accordance with paragraph (4)), except that the
result shall not be less than zero.
[(2) Parental net worth.--The parental net worth is
calculated by adding--
[(A) the current balance of checking and
savings accounts and cash on hand;
[(B) the net value of investments and real
estate, excluding the net value of the
principal place of residence; and
[(C) the adjusted net worth of a business or
farm, computed on the basis of the net worth of
such business or farm (hereafter in this
subsection referred to as ``NW''), determined
in accordance with the following table (or a
successor table prescribed by the Secretary
under section 478), except as provided under
section 480(f):
[Adjusted Net Worth of a Business or Farm
------------------------------------------------------------------------
If the net worth of a business or farm
is-- Then the adjusted net worth is:
------------------------------------------------------------------------
Less than $1........................... $0
$1-$75,000............................. 40 percent of NW
$75,001-$225,000....................... $30,000 plus 50 percent of NW
over $75,000
$225,001-$375,000...................... $105,000 plus 60 percent of NW
over $225,000
$375,001 or more....................... $195,000 plus 100 percent of NW
over $375,000
------------------------------------------------------------------------
[(3) Education savings and asset protection
allowance.--The education savings and asset protection
allowance is calculated according to the following
table (or a successor table prescribed by the Secretary
under section 478):
[Education Savings and Asset Protection Allowances for Families and
Students
------------------------------------------------------------------------
And there are
If the age of the oldest -----------------------------------------
parent is-- two parents one parent
------------------------------------------------------------------------
then the allowance is--
................... ...................
25 or less.................... $ 0 $0
26............................ 2,200 1,600
27............................ 4,300 3,200
28............................ 6,500 4,700
29............................ 8,600 6,300
30............................ 10,800 7,900
31............................ 13,000 9,500
32............................ 15,100 11,100
33............................ 17,300 12,600
34............................ 19,400 14,200
35............................ 21,600 15,800
36............................ 23,800 17,400
37............................ 25,900 19,000
38............................ 28,100 20,500
39............................ 30,200 22,100
40............................ 32,400 23,700
41............................ 33,300 24,100
42............................ 34,100 24,700
43............................ 35,000 25,200
44............................ 35,700 25,800
45............................ 36,600 26,300
46............................ 37,600 26,900
47............................ 38,800 27,600
48............................ 39,800 28,200
49............................ 40,800 28,800
50............................ 41,800 29,500
51............................ 43,200 30,200
52............................ 44,300 31,100
53............................ 45,700 31,800
54............................ 47,100 32,600
55............................ 48,300 33,400
56............................ 49,800 34,400
57............................ 51,300 35,200
58............................ 52,900 36,200
59............................ 54,800 37,200
60............................ 56,500 38,100
61............................ 58,500 39,200
62............................ 60,300 40,300
63............................ 62,400 41,500
64............................ 64,600 42,800
65 or more.................... 66,800 44,000
------------------------------------------------------------------------
[(4) Asset conversion rate.--The asset conversion
rate is 12 percent.]
(e) Assessment Schedule.--The [adjusted] available income (as
determined under subsection (b)(1) and hereafter in this
subsection referred to as [``AAI''] ``AI'') is assessed
according to the following table (or a successor table
prescribed by the Secretary under section 478):
Parents' Assessment [From Adjusted Available Income (AAI)] From
Available Income (AI)
------------------------------------------------------------------------
If [AAI] AI is-- Then the assessment is--
------------------------------------------------------------------------
Less than -$3,409...................... -$750
-$3,409 to $9,400...................... 22% of [AAI] AI
$9,401 to $11,800...................... $2,068 + 25% of [AAI] AI over
$9,400
$11,801 to $14,200..................... $2,668 + 29% of [AAI] AI over
$11,800
$14,201 to $16,600..................... $3,364 + 34% of [AAI] AI over
$14,200
$16,601 to $19,000..................... $4,180 + 40% of [AAI] AI over
$16,600
$19,001 or more........................ $5,140 + 47% of [AAI] AI over
$19,000
------------------------------------------------------------------------
(f) Computations in Case of Separation, Divorce, Remarriage,
or Death.--
(1) Divorced or separated parents.--Parental income
[and assets] for a student whose parents are divorced
or separated is determined under the following
procedures:
(A) Include only the income [and assets] of
the parent with whom the student resided for
the greater portion of the 12-month period
preceding the date of the application.
(B) If the preceding criterion does not
apply, include only the income [and assets] of
the parent who provided the greater portion of
the student's support for the 12-month period
preceding the date of application.
(C) If neither of the preceding criteria
apply, include only the income [and assets] of
the parent who provided the greater support
during the most recent calendar year for which
parental support was provided.
(2) Death of a parent.--Parental income [and assets]
in the case of the death of any parent is determined as
follows:
(A) If either of the parents has died, the
student shall include only the income [and
assets] of the surviving parent.
(B) If both parents have died, the student
shall not report any parental income [or
assets].
(3) Remarried parents.--If a parent whose income [and
assets are] is taken into account under paragraph (1)
of this subsection, or if a parent who is a widow or
widower and whose income is taken into account under
paragraph (2) of this subsection, has remarried, the
income of that parent's spouse shall be included in
determining the parent's [adjusted] available income
only if--
(A) * * *
* * * * * * *
(g) Student Contribution From Available Income.--
(1) * * *.--
* * * * * * *
(6) Allowance for parents' negative available
income.--The allowance for parents' negative available
income is the amount, if any, by which the sum of the
amounts deducted under subparagraphs (A) through (F) of
subsection (c)(1) [exceeds the sum of the parents'
total income (as defined in section 480) and the
parents' contribution from assets (as determined in
accordance with subsection (d)).] exceeds the parents'
total income (as defined in section 480)
* * * * * * *
[(h) Student Contribution From Assets.--The student
contribution from assets is determined by calculating the net
assets of the student and multiplying such amount by 20
percent, except that the result shall not be less than zero.]
(i) Adjustments to Parents' Contribution for Enrollment
Periods Other Than 9 Months For Purposes Other Than Subpart 2
of Part A of This Title.--For periods of enrollment other than
9 months, the parents' contribution from [adjusted] available
income (as determined under subsection (b)) is determined as
follows for purposes other than subpart 2 of part A of this
title:
(1) For periods of enrollment less than 9 months, the
parents' contribution from [adjusted] available income
is divided by 9 and the result multiplied by the number
of months enrolled.
(2) For periods of enrollment greater than 9 months--
(A) the parents' [adjusted] available income
(determined in accordance with subsection
(b)(1)) is increased by the difference between
the income protection allowance (determined in
accordance with subsection (c)(4)) for a family
of four and a family of five, each with one
child in college;
(B) the resulting revised parents' [adjusted]
available income is assessed according to
subsection (e) and [adjusted] according to
subsection (b)(3) to determine a revised
parents' contribution from [adjusted] available
income;
(C) the original parents' contribution from
[adjusted] available income is subtracted from
the revised parents' contribution from
[adjusted] available income, and the result is
divided by 12 to determine the monthly
adjustment amount; and
(D) the original parents' contribution from
[adjusted] available income is increased by the
product of the monthly adjustment amount
multiplied by the number of months greater than
9 for which the student will be enrolled.
* * * * * * *
SEC. 476. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITHOUT
DEPENDENTS OTHER THAN A SPOUSE.
(a) Computation of Expected Family Contribution.--For each
independent student without dependents other than a spouse, the
expected family contribution is determined by--
[(1) adding--
[(A) the family's contribution from available
income (determined in accordance with
subsection (b)); and
[(B) the family's contribution from assets
(determined in accordance with subsection
(c));]
[(2)] (1) dividing [the sum resulting under paragraph
(1)] the family's contribution from available income
(determined in accordance with subsection (b)) by the
number of students who are enrolled or accepted for
enrollment, on at least a half-time basis, in a degree,
certificate, or other program leading to a recognized
educational credential at an institution of higher
education that is an eligible institution in accordance
with the provisions of section 487 during the award
period for which assistance under this title is
requested; and
[(3)] (2) for periods of enrollment of less than 9
months, for purposes other than subpart 2 of part A--
(A) dividing the quotient resulting under
paragraph [(2)] (1) by 9; and
* * * * * * *
[(c) Family Contribution From Assets.--
[(1) In general.--The family's contribution from
assets is equal to--
[(A) the family's net worth (determined in
accordance with paragraph (2)); minus
[(B) the asset protection allowance
(determined in accordance with paragraph (3));
multiplied by
[(C) the asset conversion rate (determined in
accordance with paragraph (4));
except that the family's contribution from assets shall
not be less than zero.
[(2) Family's net worth.--The family's net worth is
calculated by adding--
[(A) the current balance of checking and
savings accounts and cash on hand;
[(B) the net value of investments and real
estate, excluding the net value in the
principal place of residence; and
[(C) the adjusted net worth of a business or
farm, computed on the basis of the net worth of
such business or farm (hereafter referred to as
``NW''), determined in accordance with the
following table (or a successor table
prescribed by the Secretary under section 478),
except as provided under section 480(f):
[Adjusted Net Worth of a Business or Farm
------------------------------------------------------------------------
If the net worth of a business or farm Then the adjusted net worth is--
is--
------------------------------------------------------------------------
Less than $1........................... $0
$1-$75,000............................. 40 percent of NW
$75,001-$225,000....................... $30,000 plus 50 percent of NW
over $75,000
$225,001-$375,000...................... $105,000 plus 60 percent of NW
over $225,000
$375,001 or more....................... $195,000 plus 100 percent of NW
over $375,000
------------------------------------------------------------------------
[(3) Asset protection allowance.--The asset
protection allowance is calculated according to the
following table (or a successor table prescribed by the
Secretary under section 478):
[Asset Protection Allowances for Families and Students
------------------------------------------------------------------------
And the student is
If the age of the student is-- ---------------------
married single
------------------------------------------------------------------------
then the allowance is--
......... .........
25 or less........................................ $ 0 $0
26................................................ 2,200 1,600
27................................................ 4,300 3,200
28................................................ 6,500 4,700
29................................................ 8,600 6,300
30................................................ 10,800 7,900
31................................................ 13,000 9,500
32................................................ 15,100 11,100
33................................................ 17,300 12,600
34................................................ 19,400 14,200
35................................................ 21,600 15,800
36................................................ 23,800 17,400
37................................................ 25,900 19,000
38................................................ 28,100 20,500
39................................................ 30,200 22,100
40................................................ 32,400 23,700
41................................................ 33,300 24,100
42................................................ 34,100 24,700
43................................................ 35,000 25,200
44................................................ 35,700 25,800
45................................................ 36,600 26,300
46................................................ 37,600 26,900
47................................................ 38,800 27,600
48................................................ 39,800 28,200
49................................................ 40,800 28,800
50................................................ 41,800 29,500
51................................................ 43,200 30,200
52................................................ 44,300 31,100
53................................................ 45,700 31,800
54................................................ 47,100 32,600
55................................................ 48,300 33,400
56................................................ 49,800 34,400
57................................................ 51,300 35,200
58................................................ 52,900 36,200
59................................................ 54,800 37,200
60................................................ 56,500 38,100
61................................................ 58,500 39,200
62................................................ 60,300 40,300
63................................................ 62,400 41,500
64................................................ 64,600 42,800
65 or more........................................ 66,800 44,000
------------------------------------------------------------------------
[(4) Asset conversion rate.--The asset conversion
rate is 20 percent.]
(d) Computations in Case of Separation, Divorce, or Death.--
In the case of a student who is divorced or separated, or whose
spouse has died, the spouse's income [and assets] shall not be
considered in determining the family's contribution from income
[or assets].
SEC. 477. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITH DEPENDENTS
OTHER THAN A SPOUSE.
(a) Computation of Expected Family Contribution.--For each
independent student with dependents other than a spouse, the
expected family contribution is equal to the amount determined
by--
[(1) computing adjusted available income by adding--
[(A) the family's available income
(determined in accordance with subsection (b));
and
[(B) the family's contribution from assets
(determined in accordance with subsection
(c));]
[(2)] (1) assessing [such adjusted available income]
the family's available income (determined in accordance
with subsection (b)) in accordance with an assessment
schedule set forth in subsection (d);
[(3)] (2) dividing the assessment resulting under
paragraph [(2)] (1) by the number of family members who
are enrolled or accepted for enrollment, on at least a
half-time basis, in a degree, certificate, or other
program leading to a recognized educational credential
at an institution of higher education that is an
eligible institution in accordance with the provisions
of section 487 during the award period for which
assistance under this title is requested; and
[(4)] (3) for periods of enrollment of less than 9
months, for purposes other than subpart 2 of part A--
(A) dividing the quotient resulting under
paragraph [(3)] (2) by 9; and
* * * * * * *
[(c) Family's Contribution From Assets.--
[(1) In general.--The family's contribution from
assets is equal to--
[(A) the family net worth (determined in
accordance with paragraph (2)); minus
[(B) the asset protection allowance
(determined in accordance with paragraph (3));
multiplied by
[(C) the asset conversion rate (determined in
accordance with paragraph (4)), except that the
result shall not be less than zero.
[(2) Family net worth.--The family net worth is
calculated by adding--
[(A) the current balance of checking and
savings accounts and cash on hand;
[(B) the net value of investments and real
estate, excluding the net value in the
principal place of residence; and
[(C) the adjusted net worth of a business or
farm, computed on the basis of the net worth of
such business or farm (hereafter referred to as
``NW''), determined in accordance with the
following table (or a successor table
prescribed by the Secretary under section 478),
except as provided under section 480(f):
[Adjusted Net Worth of a Business or Farm
------------------------------------------------------------------------
If the net worth of a business or farm Then the adjusted net worth is--
is--
------------------------------------------------------------------------
Less than $1........................... $0
$1-$75,000............................. 40 percent of NW
$75,001-$225,000....................... $30,000 plus 50 percent of NW
over $75,000
$225,001-$375,000...................... $105,000 plus 60 percent of NW
over $225,000
$375,001 or more....................... $195,000 plus 100 percent of NW
over $375,000
------------------------------------------------------------------------
[(3) Asset protection allowance.--The asset
protection allowance is calculated according to the
following table (or a successor table prescribed by the
Secretary under section 478):
[Asset Protection Allowances for Families and Students
------------------------------------------------------------------------
And the student is
If the age of the student is-- ---------------------
married single
------------------------------------------------------------------------
then the allowance is--
......... .........
25 or less........................................ $ 0 $0
26................................................ 2,200 1,600
27................................................ 4,300 3,200
28................................................ 6,500 4,700
29................................................ 8,600 6,300
30................................................ 10,800 7,900
31................................................ 13,000 9,500
32................................................ 15,100 11,100
33................................................ 17,300 12,600
34................................................ 19,400 14,200
35................................................ 21,600 15,800
36................................................ 23,800 17,400
37................................................ 25,900 19,000
38................................................ 28,100 20,500
39................................................ 30,200 22,100
40................................................ 32,400 23,700
41................................................ 33,300 24,100
42................................................ 34,100 24,700
43................................................ 35,000 25,200
44................................................ 35,700 25,800
45................................................ 36,600 26,300
46................................................ 37,600 26,900
47................................................ 38,800 27,600
48................................................ 39,800 28,200
49................................................ 40,800 28,800
50................................................ 41,800 29,500
51................................................ 43,200 30,200
52................................................ 44,300 31,100
53................................................ 45,700 31,800
54................................................ 47,100 32,600
55................................................ 48,300 33,400
56................................................ 49,800 34,400
57................................................ 51,300 35,200
58................................................ 52,900 36,200
59................................................ 54,800 37,200
60................................................ 56,500 38,100
61................................................ 58,500 39,200
62................................................ 60,300 40,300
63................................................ 62,400 41,500
64................................................ 64,600 42,800
65 or more........................................ 66,800 44,000
------------------------------------------------------------------------
[(4) Asset conversion rate.--The asset conversion
rate is 7 percent.]
(d) Assessment Schedule.--The [adjusted] available income (as
determined under subsection (a)(1) and hereafter referred to as
[``AAI''] ``AI'') is assessed according to the following table
(or a successor table prescribed by the Secretary under section
478):
Assessment [From Adjusted Available Income (AAI)] From Available Income
(AI)
------------------------------------------------------------------------
If [AAI] AI is-- Then the assessment is--
------------------------------------------------------------------------
Less than -$3,409...................... -$750
-$3,409 to $9,400...................... 22% of [AAI] AI
$9,401 to $11,800...................... $2,068 + 25% of [AAI] AI over
$9,400
$11,801 to $14,200..................... $2,668 + 29% of [AAI] AI over
$11,800
$14,201 to $16,600..................... $3,364 + 34% of [AAI] AI over
$14,200
$16,601 to $19,000..................... $4,180 + 40% of [AAI] AI over
$16,600
$19,001 or more........................ $5,140 + 47% of [AAI] AI over
$19,000
------------------------------------------------------------------------
(e) Computations in Case of Separation, Divorce, or Death.--
In the case of a student who is divorced or separated, or whose
spouse has died, the spouse's income [and assets] shall not be
considered in determining the family's available income [or
assets].
SEC. 478. REGULATIONS; UPDATED TABLES.
(a) Authority To Prescribe Regulations Restricted.--(1)
Notwithstanding any other provision of law, the Secretary shall
not have the authority to prescribe regulations to carry out
this part except--
(A) to prescribe updated tables or amounts, as the
case may be, in accordance with subsections (b) through
(h) of this section; or
(B) to propose modifications in the need analysis
methodology required by this part.
(2) Any regulation proposed by the Secretary that (A) updates
tables or amounts, as the case may be, in a manner that does
not comply with subsections (b) through (h) of this section, or
(B) that proposes modifications under paragraph (1)(B) of this
subsection, shall not be effective unless approved by joint
resolution of the Congress by May 1 following the date such
regulations are published in the Federal Register in accordance
with section 482. If the Congress fails to approve such
regulations by such May 1, the Secretary shall publish in the
Federal Register in accordance with section 482 updated tables
or amounts, as the case may be, for the applicable award year
that are prescribed in accordance with subsections (b) through
(h) of this section.
* * * * * * *
[(c) Adjusted Net Worth of a Farm or Business.--For each
award year after award year 1993-1994, the Secretary shall
publish in the Federal Register a revised table of adjusted net
worth of a farm or business for purposes of sections
475(d)(2)(C), 476(c)(2)(C), and 477(c)(2)(C). Such revised
table shall be developed--
[(1) by increasing each dollar amount that refers to
net worth of a farm or business by a percentage equal
to the estimated percentage increase in the Consumer
Price Index (as determined by the Secretary) between
December 1992 and the December next preceding the
beginning of such award year, and rounding the result
to the nearest $5,000; and
[(2) by adjusting the dollar amounts ``$30,000'',
``$105,000'', and ``$195,000'' to reflect the changes
made pursuant to paragraph (1).
[(d) Education Savings and Asset Protection Allowance.--For
each award year after award year 1993-1994, the Secretary shall
publish in the Federal Register a revised table of allowances
for the purpose of sections 475(d)(3), 476(c)(3), and
477(c)(3). Such revised table shall be developed by determining
the present value cost, rounded to the nearest $100, of an
annuity that would provide, for each age cohort of 40 and
above, a supplemental income at age 65 (adjusted for inflation)
equal to the difference between the moderate family income (as
most recently determined by the Bureau of Labor Statistics),
and the current average social security retirement benefits.
For each age cohort below 40, the allowance shall be computed
by decreasing the allowance for age 40, as updated, by one-
fifteenth for each year of age below age 40 and rounding the
result to the nearest $100. In making such determinations--
[(1) inflation shall be presumed to be 6 percent per
year;
[(2) the rate of return of an annuity shall be
presumed to be 8 percent; and
[(3) the sales commission on an annuity shall be
presumed to be 6 percent.]
(c) Asset Cap for Need-Based Aid.--For each award year after
award year 2011-2012, the Secretary shall publish in the
Federal Register a revised net asset cap for the purposes of
section 471(b). Such revised cap shall be determined by
increasing the dollar amount in such section by a percentage
equal to the estimated percentage change in the Consumer Price
Index (as determined by the Secretary) between December 2010
and the December preceding the beginning of such award year,
and rounding the result to the nearest $5.
(e) Assessment Schedules and Rates.--For each award year
after award year 1993-1994, the Secretary shall publish in the
Federal Register a revised table of assessments from [adjusted]
available income for the purpose of sections 475(e) and 477(d).
Such revised table shall be developed--
(1) by increasing each dollar amount that refers to
[adjusted] available income by a percentage equal to
the estimated percentage increase in the Consumer Price
Index (as determined by the Secretary) between December
1992 and the December next preceding the beginning of
such academic year, rounded to the nearest $100; and
(2) by adjusting the other dollar amounts to reflect
the changes made pursuant to paragraph (1).
* * * * * * *
SEC. 479A. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.
(a) * * *
(b) Adjustments [to Assets] Taken Into Account.--A student
financial aid administrator shall be considered to be making a
necessary adjustment in accordance with subsection (a) if--
(1) * * *
* * * * * * *
SEC. 480. DEFINITIONS.
As used in this part:
(a) * * *
[Note: Paragraph (1) of subsection (b) reflects amendments made by this
bill to such paragraph as amended by the Higher Education Opportunity
Act, effective on July 1, 2010.]
(b) Untaxed Income and Benefits.--
(1) The term ``untaxed income and benefits'' means--
[(A) child support received;
[(B) workman's compensation;
[(C) veteran's benefits such as death
pension, dependency, and indemnity
compensation, but excluding veterans' education
benefits as defined in subsection (c);]
[(D)] (A) interest on tax-free bonds;
[(E) housing, food, and other allowances
(excluding rent subsidies for low-income
housing) for military, clergy, and others
(including cash payments and cash value of
benefits), except that the value of on-base
military housing or the value of basic
allowance for housing determined under section
403(b) of title 37, United States Code,
received by the parents, in the case of a
dependent student, or the student or student's
spouse, in the case of an independent student,
shall be excluded;
[(F) cash support or any money paid on the
student`s behalf, except, for dependent
students, funds provided by the student's
parents;]
[(G)] (B) untaxed portion of pensions; and
[(H)] (C) payments to individual retirement
accounts and Keogh accounts excluded from
income for Federal income tax purposes[; and].
[(I) any other untaxed income and benefits,
such as Black Lung Benefits, Refugee
Assistance, or railroad retirement benefits, or
benefits received through participation in
employment and training activities under title
I of the Workforce Investment Act of 1998 (29
U.S.C. 2801 et seq.).]
* * * * * * *
(f) Assets.--(1) * * *
(2) With respect to determinations of need under this title,
other than for subpart 4 of part A, the term ``assets'' shall
not include the net value of--
(A) * * *
(B) a family farm on which the family resides; [or]
(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[.]; or
(D) an employee pension benefit plan (as defined in
section 3(2) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002(2))).
* * * * * * *
PART G--GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE PROGRAMS
SEC. 483. FORMS AND REGULATIONS.
(a) * * *.--
* * * * * * *
(e) Early Application and Estimated Award Demonstration
Program.--
(1) * * *
* * * * * * *
(3) Early application and estimated award.--For all
dependent students selected for participation in the
demonstration program who submit a completed FAFSA, or,
as appropriate, an EZ FAFSA, two years prior to the
year such students plan to enroll in an institution of
higher education, the Secretary shall, not later than
one year prior to the year of such planned enrollment--
(A) provide each student who completes an
early application with an estimated
determination of such student's--
(i) * * *
(ii) Federal Pell Grant award for the
first such year, based on the maximum
Federal Pell Grant award at the time of
application; and
* * * * * * *
SEC. 484. STUDENT ELIGIBILITY. .
(a) * * *
* * * * * * *
(r) Suspension of Eligibility for Drug-Related Offenses.--
[(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:
[If convicted of an offense involving:
The possession of con-..............................................
trolled substance:Ineligibility period is: ...........................
First offense.....1 year .............................................
Second offense....2 years ............................................
Third offense.....Indefinite. ........................................
The sale of a cont olled..............................................
substance:........Ineligibility period is: ...........................
First offense.....2 years ............................................
Second offense....Indefinite.]........................................
(1) In general.--A student who is convicted of any
offense under any Federal or State law involving the
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 subparagraphs:
(A) For a first offense, the period of
ineligibility shall be 2 years.
(B) For a second offense, the period of
ineligibility shall be indefinite.
* * * * * * *
SEC. 484B. INSTITUTIONAL REFUNDS.
(a) * * *
(b) Return of Title IV Program Funds.--
(1) * * *
(2) Responsibility of the student.--
(A) * * *
* * * * * * *
(F) Tuition relief for students called to
military service.--
(i) Waiver of repayment by students
called to military service.--In
addition to the waivers authorized by
subparagraphs (D) and (E), the
Secretary shall waive the amounts that
students are required to return under
this section if the withdrawals on
which the returns are based are
withdrawals necessitated by reason of
service in the uniformed services.
(ii) Loan forgiveness authorized.--
Whenever a student's withdrawal from an
institution of higher education is
necessitated by reason of service in
the uniformed services, the Secretary
shall, with respect to the payment
period or period of enrollment for
which such student did not receive
academic credit as a result of such
withdrawal, carry out a program--
(I) through the holder of the
loan, to assume the obligation
to repay--
(aa) the outstanding
principle and accrued
interest on any loan
assistance awarded to
the student under part
B (including to a
parent on behalf of the
student under section
428B) for such payment
period or period of
enrollment; minus
(bb) any amount of
such loan assistance
returned by the
institution in
accordance with
paragraph (1) of this
subsection for such
payment period or
period of enrollment;
and
(II) to cancel--
(aa) the outstanding
principle and accrued
interest on the loan
assistance awarded to
the student under part
D or E (including a
Federal Direct PLUS
loan awarded to a
parent on behalf of the
student) for such
payment period or
period of enrollment;
minus
(bb) any amount of
such loan assistance
returned by the
institution in
accordance with
paragraph (1) of this
subsection for such
payment period or
period of enrollment.
(iii) Reimbursement for cancellation
of perkins loans.--The Secretary shall
pay to each institution for each fiscal
year an amount equal to the aggregate
of the amounts of Federal Perkins loans
in such institutions's student loan
fund which are cancelled pursuant to
clause (iii)(II) for such fiscal year,
minus an amount equal to the aggregate
of the amounts of any such loans so
canceled which were made from Federal
capital contributions to its student
loan fund provided by the Secretary
under section 468. None of the funds
appropriated pursuant to section 461(b)
shall be available for payments
pursuant to this paragraph. To the
extent feasible, the Secretary shall
pay the amounts for which any
institution qualifies under this
paragraph not later than 3 months after
the institution files an institutional
application for campus-based funds.
(iv) Loan eligibility and limits for
students.--Any amounts that are
returned by an institution in
accordance with paragraph (1), or
forgiven or waived by the Secretary
under this subparagraph, with respect
to a payment period or period of
enrollment for which a student did not
receive academic credit as a result of
withdrawal necessitated by reason of
service in the uniformed services,
shall not be included in the
calculation of the student's annual or
aggregate loan limits for assistance
under this title, or otherwise affect
the student's eligibility for grants or
loans under this title.
(v) Definition.--In this
subparagraph, the term ``service in the
uniformed services'' has the meaning
given such term in section 484C(a).
* * * * * * *
SEC. 485E. EARLY AWARENESS OF FINANCIAL AID ELIGIBILITY.
(a) * * *
(b) Communication of Availability of Aid and Aid
Eligibility.--
(1) Students who receive benefits.--The Secretary
shall--
(A) make special efforts to notify students
who receive or are eligible to receive benefits
under a Federal means-tested benefit program
(including the supplemental nutrition
assistance program under the Food and Nutrition
Act of 2008 (7 U.S.C. 2011 et seq.)), or
another such benefit program as determined by
the Secretary, [of such students' potential
eligibility for a maximum Federal Pell Grant
under subpart 1 of part A] of such students'
potential eligibility for the Federal Pell
Grant amount, determined under section
401(b)(2)(A), for which the student would be
eligible; and
* * * * * * *
SEC. 487. PROGRAM PARTICIPATION AGREEMENTS.
(a) * * *
* * * * * * *
(d) Implementation of Non-Title IV Revenue Requirement.--
(1) Calculation.--In making calculations under
subsection (a)(24), a proprietary institution of higher
education shall--
(A) * * *
* * * * * * *
(E) in the case of each student who receives
a loan on or after July 1, 2008, and prior to
[July 1, 2011] July 1, 2012, that is authorized
under section 428H or that is a Federal Direct
Unsubsidized Stafford Loan, treat as revenue
received by the institution from sources other
than funds received under this title, the
amount by which the disbursement of such loan
received by the institution exceeds the limit
on such loan in effect on the day before the
date of enactment of the Ensuring Continued
Access to Student Loans Act of 2008; and
(F) exclude from revenues--
(i) * * *
* * * * * * *
(iii) for the period beginning July
1, 2010, and ending July 1, 2012, the
amount of funds the institution
received from loans disbursed under
section 455A;
[(iii)] (iv) the amount of funds
provided by the institution as matching
funds for a program under this title;
[(iv)] (v) the amount of funds
provided by the institution for a
program under this title that are
required to be refunded or returned;
and
[(v)] (vi) the amount charged for
books, supplies, and equipment, unless
the institution includes that amount as
tuition, fees, or other institutional
charges.
(2) Sanctions.--
(A) Ineligibility.--A proprietary institution
of higher education that fails to meet a
requirement of subsection (a)(24) for [two
consecutive] three consecutive institutional
fiscal years shall be ineligible to participate
in the programs authorized by this title for a
period of not less than two institutional
fiscal years. To regain eligibility to
participate in the programs authorized by this
title, a proprietary institution of higher
education shall demonstrate compliance with all
eligibility and certification requirements
under section 498 for a minimum of two
institutional fiscal years after the
institutional fiscal year in which the
institution became ineligible.
(B) Additional enforcement.--In addition to
such other means of enforcing the requirements
of this title as may be available to the
Secretary, if a proprietary institution of
higher education fails to meet a requirement of
subsection (a)(24) for [any institutional
fiscal year] two consecutive institutional
fiscal years, then the institution's
eligibility to participate in the programs
authorized by this title becomes provisional
for [the two institutional fiscal years after
the institutional fiscal year] the
institutional fiscal year after the second
consecutive institutional fiscal year in which
the institution failed to meet the requirement
of subsection (a)(24), except that such
provisional eligibility shall terminate--
(i) * * *
(ii) in the case that the Secretary
determines that the institution failed
to meet a requirement of subsection
(a)(24) for [two consecutive] three
consecutive institutional fiscal years,
on the date the institution is
determined ineligible in accordance
with subparagraph (A).
* * * * * * *
SEC. 489. ADMINISTRATIVE EXPENSES.
(a) Amount of Payments.--From the sums appropriated for any
fiscal year for the purpose of the program authorized under
subpart 1 of part A, the Secretary shall reserve such sums as
may be necessary to pay to each institution with which he has
an agreement under section 487, an amount equal to $5 for each
student at that institution who receives assistance under
subpart 1 of part A. In addition, an institution which has
entered into an agreement with the Secretary under subpart 3 of
part A or part C, of this title [or under part E of this title]
shall be entitled for each fiscal year which such institution
disburses funds to eligible students under any such part to a
payment for the purpose set forth in subsection (b). The
payment for a fiscal year shall be payable from each such
allotment by payment in accordance with regulations of the
Secretary and shall be equal to 5 percent of the institution's
first $2,750,000 of expenditures plus 4 percent of the
institution's expenditures greater than $2,750,000 and less
than $5,500,000, plus 3 percent of the institution's
expenditures in excess of $5,500,000 during the fiscal year
from the sum of its grants to students under subpart 3 of part
A, and its expenditures during such fiscal year under part C
for [compensation of students, and the principal amount of
loans made during such fiscal year from its student loan fund
established under part E, excluding the principal amount of any
such loans which the institution has referred under section
463(a)(4)(B).] compensation of students. In addition, the
Secretary shall provide for payment to each institution of
higher education an amount equal to 100 percent of the costs
incurred by the institution in implementing and operating the
immigration status verification system under section 484(g).
* * * * * * *
TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS
* * * * * * *
[PART E--COLLEGE ACCESS CHALLENGE GRANT PROGRAM]
PART E--COLLEGE ACCESS AND COMPLETION INNOVATION FUND
SEC. 780. PURPOSES.
The purposes of this part are--
(1) to promote innovation in postsecondary education
practices and policies by institutions of higher
education, States, and nonprofit organizations to
improve student success, completion, and post-
completion employment, particularly for students from
groups that are underrepresented in postsecondary
education; and
(2) to assist States in developing longitudinal data
systems, common metrics, and reporting systems to
enhance the quality and availability of information
about student success, completion, and post-completion
employment.
SEC. 781. COLLEGE ACCESS CHALLENGE GRANT PROGRAM.
[(a) Authorization and Appropriation.--There are authorized
to be appropriated, and there are appropriated, to carry out
this section $66,000,000 for each of the fiscal years 2008 and
2009. In addition to the amount authorized and appropriated
under the preceding sentence, there are authorized to be
appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding
fiscal years.]
(a) Authorization and Appropriation.--
(1) In general.--There are authorized to be
appropriated, and there are appropriated, to carry out
this part (in addition to any other amounts
appropriated to carry out this part and out of any
money in the Treasury not otherwise appropriated),
$600,000,000 for each of the fiscal years 2010 through
2014.
(2) Allocations.--Of the amount appropriated for any
fiscal year under paragraph (1)--
(A) 25 percent shall be made available to
carry out section 781;
(B) 50 percent shall be made available to
carry out section 782;
(C) 23 percent shall be made available to
carry out section 783; and
(D) 2 percent shall be made available to
carry out section 784.
* * * * * * *
SEC. 782. STATE INNOVATION COMPLETION GRANTS.
(a) Program Authorization.--From the amount appropriated
under section 781(a)(2)(B) to carry out this section, the
Secretary shall award grants to States on a competitive basis
to promote student persistence in, and completion of,
postsecondary education.
(b) Federal Share; Non-Federal Share.--
(1) Federal share.--The amount of the Federal share
under this section for a fiscal year shall be equal to
\2/3\ of the costs of the activities and services
described in subsection (d)(1) that are carried out
under the grant.
(2) Non-federal share.--The amount of the non-Federal
share under this section shall be equal to \1/3\ of the
costs of the activities and services described in
subsection (d)(1). The non-Federal share may be in cash
or in kind, and may be provided from State resources,
contributions from private organizations, or both.
(3) Supplement, not supplant.--The Federal and non-
Federal shares required by this paragraph shall be used
to supplement, and not supplant, State and private
resources that would otherwise be expended to carry out
activities and services to promote student persistence
in and completion of postsecondary education.
(c) Application and Selection.--
(1) Application requirements.--For each fiscal year
for which a State desires to receive a grant under this
section, the State agency with jurisdiction over higher
education, or another agency designated by the Governor
or chief executive of the State to administer the grant
program under this section, shall submit an application
to the Secretary at such time, in such manner, and
containing such information as the Secretary may
require. Such application shall include--
(A) a description of the State's capacity to
administer the grant under this section;
(B) a description of the State's plans for
using the grant funds for activities described
in subsection (d)(1), including plans for how
the State will make special efforts to provide
benefits to students in the State who are from
groups that are underrepresented in
postsecondary education;
(C) a description of how the State will
provide for the non-Federal share from State
resources, private contributions, or both;
(D) a description of--
(i) the administrative system that
the State has in place to administer
the activities and services described
in subsection (d)(1); or
(ii) the plan to develop such
administrative system;
(E) a description of the data system the
State has or will have in place to measure the
performance and progress toward the State's
goals included in the Access and Completion
Plan submitted, or that will be submitted,
under paragraph (2)(A); and
(F) the assurances under paragraph (2).
(2) State assurances.--The assurances required in
paragraph (1)(F) shall include an assurance of each of
the following:
(A) That the State will submit, not later
than July 1, 2011, an Access and Completion
Plan to increase the State's rate of
persistence in and completion of postsecondary
education. Such plan shall include--
(i) the State's annual and long-term
quantifiable goals with respect to--
(I) the rates of
postsecondary enrollment,
persistence, and completion,
disaggregated by income, race,
ethnicity, sex, disability, and
age of students;
(II) closing gaps in
enrollment, persistence, and
completion rates for students
from groups that are
underrepresented in
postsecondary education;
(III) targeting education and
training programs to address
labor market needs in the
State, as such needs are
determined by the State, or the
State in coordination with the
State public employment
service, the State workforce
investment board, or industry
or sector partnerships in the
State; and
(IV) improving coordination
between two-year and four-year
institutions of higher
education in the State,
including supporting
comprehensive articulation
agreements between such
institutions; and
(ii) the State's plan to develop an
interoperable statewide longitudinal
data system that--
(I) can be linked to other
data systems, as applicable,
including elementary and
secondary education and
workforce data systems;
(II) will collect, maintain,
disaggregate (by institution,
income, race, ethnicity, sex,
disability, and age of
students), and analyze
postsecondary education and
workforce information,
including--
(aa) postsecondary
education enrollment,
persistence, and
completion information;
(bb) post-completion
employment outcomes of
students who enrolled
in postsecondary
programs and training
programs offered by
eligible training
providers under the
Workforce Investment
Act of 1998 (29 U.S.C.
2801 et seq.);
(cc) postsecondary
education and
employment outcomes of
students who move out
of the State; and
(dd) postsecondary
instructional workforce
information; and
(III) makes the information
described in subclause (I)
available to the general public
in a manner that is transparent
and user-friendly.
(B) That the State has a comprehensive
planning or policy formulation process with
respect to increasing postsecondary enrollment,
persistence, and completion that--
(i) encourages coordination between
the State administration of grants
under this section and similar State
programs;
(ii) encourages State policies that
are designed to improve rates of
enrollment and persistence in, and
completion of, postsecondary education
for all categories of institutions of
higher education described in section
132(d) in the State;
(iii) considers the postsecondary
education needs of students from groups
that are underrepresented in
postsecondary education;
(iv) considers the resources of
public and private institutions of
higher education, organizations, and
agencies within the State that are
capable of providing access to
postsecondary education opportunities
within the State; and
(v) provides for direct, equitable,
and active participation in the
comprehensive planning or policy
formulation process or processes,
through membership on State planning
commissions, State advisory councils,
or other State entities established by
the State and consistent with State
law, by representatives of--
(I) institutions of higher
education, including at least
one member from a junior or
community college (as defined
in section 312(f));
(II) students;
(III) other providers of
postsecondary education
services (including
organizations providing access
to such services);
(IV) the general public in
the State; and
(V) postsecondary education
faculty members, including at
least one faculty member whose
primary responsibilities are
teaching and scholarship.
(C) That the State will incorporate policies
and practices that, through the activities
funded under this section, are determined to be
effective in improving rates of postsecondary
education enrollment, persistence, and
completion into the future postsecondary
education policies and practices of the State
to ensure that the benefits achieved through
the activities funded under this section
continue beyond the period of the grant.
(D) That the State will participate in the
evaluation required under section 784.
(3) Subgrants to nonprofit organizations.--A State
receiving a payment under this section may elect to
make a subgrant to one or more nonprofit organizations
in the State, including agencies with agreements with
the Secretary under subsections (b) and (c) of section
428 on the date of the enactment of the Student Aid and
Fiscal Responsibility Act of 2009, or a partnership of
such organizations, to carry out activities and
services described in subsection (d)(1), if the
nonprofit organization or partnership--
(A) was in existence on the day before the
date of the enactment of the Student Aid and
Fiscal Responsibility Act of 2009; and
(B) as of such day, was participating in
activities and services related to promoting
persistence in, and completion of,
postsecondary education, such as the activities
and services described in subsection (d)(1).
(4) Priority.--In awarding grants under this section,
the Secretary shall give priority to States that enter
into a partnership with one of the following entities
to carry out the activities and services described in
subsection (d)(1):
(A) A philanthropic organization, as such
term is defined in section 781(i)(1).
(B) An agency with an agreement with the
Secretary under subsections (b) and (c) of
section 428 on the date of the enactment of
Student Aid and Fiscal Responsibility Act of
2009.
(d) Uses of Funds.--
(1) Authorized uses.--A State receiving a grant under
this section shall use the grant funds to--
(A) provide programs in such State that
increase persistence in, and completion of,
postsecondary education, which may include--
(i) assisting institutions of higher
education in providing financial
literacy, education, and counseling to
enrolled students;
(ii) assisting students enrolled in
an institution of higher education to
reduce the amount of loan debt incurred
by such students;
(iii) providing grants to students
described in section 415A(a)(1), in
accordance with the terms of that
section; and
(iv) carrying out the activities
described in section 415E(a); and
(B) support the development and
implementation of a statewide longitudinal data
system, as described in subsection
(c)(2)(A)(ii).
(2) Prohibited uses.--Funds made available under this
section shall not be used to promote any lender's
loans.
(3) Restrictions on use of funds.--A State--
(A) shall use not less than \1/3\ of the sum
of the Federal and non-Federal share used for
paragraph (1)(A) on activities that benefit
students enrolled in junior or community
colleges (as defined in section 312(f)), two-
year public institutions, or two-year programs
of instruction at four-year public
institutions;
(B) may use not more than 10 percent of the
sum of the Federal and non-Federal share under
this section for activities described in
paragraph (1)(B); and
(C) may use not more than 6 percent of the
sum of the Federal and non-Federal share under
this section for administrative purposes
relating to the grant under this section.
(e) Annual Report.--Each State receiving a grant under this
section shall submit to the Secretary an annual report on--
(1) the activities and services described in
subsection (d)(1) that are carried out with such grant;
(2) the effectiveness of such activities and services
in increasing postsecondary persistence and completion,
as determined by measurable progress in achieving the
State's goals for persistence and completion described
in the Access and Completion Plan submitted by the
State under subsection (c)(2)(A), if such plan has been
submitted; and
(3) any other information or assessments the
Secretary may require.
(f) Definitions.--In this section:
(1) Industry or sector partnership.--The term
``industry or sector partnership'' means a workforce
collaborative that organizes key stakeholders in a
targeted industry cluster into a working group that
focuses on the human capital needs of a targeted
industry cluster and that includes, at the appropriate
stage of development of the partnership--
(A) representatives of multiple firms or
employers (including workers) in a targeted
industry cluster, including small- and medium-
sized employers when practicable;
(B) 1 or more representatives of State labor
organizations, central labor coalitions, or
other labor organizations;
(C) 1 or more representatives of local
workforce investment boards;
(D) 1 or more representatives of
postsecondary educational institutions or other
training providers; and
(E) 1 or more representatives of State
workforce agencies or other entities providing
employment services.
(2) State public employment service.--The term
``State public employment service'' has the meaning
given such term in section 502(a)(9) of the Student Aid
and Fiscal Responsibility Act of 2009.
(3) State workforce investment board; local workforce
investment board.--The terms ``State workforce
investment board'' and ``local workforce investment
board'' have the meanings given such terms in section
502(a)(10) of the Student Aid and Fiscal Responsibility
Act of 2009.
SEC. 783. INNOVATION IN COLLEGE ACCESS AND COMPLETION NATIONAL
ACTIVITIES.
(a) Programs Authorized.--From the amount appropriated under
section 781(a)(2)(C) to carry out this section, the Secretary
shall award grants, on a competitive basis, to eligible
entities in accordance with this section to conduct innovative
programs that advance knowledge about, and adoption of,
policies and practices that increase the number of individuals
with postsecondary degrees or certificates.
(b) Eligible Entities.--The Secretary is authorized to award
grants under subsection (a) to--
(1) institutions of higher education;
(2) States;
(3) nonprofit organizations with demonstrated
experience in the operation of programs to increase
postsecondary completion;
(4) philanthropic organizations (as such term is
defined in section 781(i)(1));
(5) entities receiving a grant under chapter 1 of
subpart 2 of part A of title IV; and
(6) consortia of any of the entities described in
paragraphs (1) through (5).
(c) Innovation Grants.--
(1) Minimum award.--A grant awarded under subsection
(a) shall be not less than $1,000,000.
(2) Grants uses.--The Secretary's authority to award
grants under subsection (a) includes--
(A) the authority to award to an eligible
entity a grant in an amount equal to all or
part of the amount of funds received by such
entity from philanthropic organizations (as
such term is defined in section 781(i)(1)) to
conduct innovative programs that advance
knowledge about, and adoption of, policies and
practices that increase the number of
individuals with postsecondary degrees or
certificates; and
(B) the authority to award an eligible entity
a grant to develop 2-year programs that provide
supplemental grant or loan benefits to students
that--
(i) are designed to improve student
outcomes, including degree completion,
graduation without student loan debt,
and post-completion employment;
(ii) are in addition to the student
financial aid available under title IV
of this Act; and
(iii) do not result in the reduction
of the amount of that aid or any other
student financial aid for which a
student is otherwise eligible under
Federal law.
(3) Application.--To be eligible to receive a grant
under subsection (a), an eligible entity shall submit
an application at such time, in such manner, and
containing such information as the Secretary shall
require.
(4) Priorities.--In awarding grants under subsection
(a), the Secretary shall give priority to applications
that--
(A) are from an eligible entity with
demonstrated experience in serving students
from groups that are underrepresented in
postsecondary education, including institutions
of higher education that are eligible for
assistance under title III or V, or are from a
consortium that includes an eligible entity
with such experience;
(B) are from an eligible entity that is a
public institution of higher education that
does not predominantly provide an educational
program for which it awards a bachelor's degree
(or an equivalent degree), or from a consortium
that includes at least one such institution;
(C) include activities to increase degree or
certificate completion in the fields of
science, technology, engineering, and
mathematics, including preparation for, or
entry into, postbaccaluareate study, especially
for women and other groups of students who are
underrepresented in such fields;
(D) are from an eligible entity that is a
philanthropic organization with the primary
purpose of providing scholarships and support
services to students from groups that are
underrepresented in postsecondary education, or
are from a consortium that includes such an
organization; or
(E) are from an eligible entity that
encourages partnerships between institutions of
higher education with high degree-completion
rates and institutions of higher education with
low degree-completion rates from the same
category of institutions described in section
132(d) to facilitate the sharing of information
relating to, and the implementation of, best
practices for increasing postsecondary
completion.
(5) Technical assistance.--The Secretary may reserve
up to $5,000,000 per year to award grants and contracts
to provide technical assistance to eligible entities
receiving a grant under subsection (a), including
technical assistance on the evaluation conducted in
accordance with section 784 and establishing networks
of eligible entities receiving grants under such
subsection.
(d) Reports.--
(1) Annual reports by entities.--Each eligible entity
receiving a grant under subsection (a) shall submit to
the Secretary an annual report on--
(A) the effectiveness of the program carried
out with such grant in increasing postsecondary
completion, as determined by measurable
progress in achieving the goals of the program,
as described in the application for such grant;
and
(B) any other information or assessments the
Secretary may require.
(2) Annual report to congress.--The Secretary shall
submit to the authorizing committees an annual report
on grants awarded under subsection (a), including--
(A) the amount awarded to each eligible
entity receiving a grant under such subsection;
and
(B) a description of the activities conducted
by each such eligible entity.
SEC. 784. EVALUATION.
From the amount appropriated under section 781(a)(2)(D), the
Director of the Institute of Education Sciences shall evaluate
the programs funded under this part. Not later than January 30,
2016, the Director shall issue a final report on such
evaluation to the authorizing committees and the Secretary, and
shall make such report available to the public.
SEC. 785. VETERANS RESOURCE OFFICER GRANTS.
(a) Program Authorized.--The Secretary shall award grants, on
a competitive basis, to eligible institutions of higher
education to hire a Veterans Resource Officer to increase the
college completion rates for veterans enrolled at such
institutions.
(b) Definitions.--In this section:
(1) Eligible institution of higher education.--The
term ``eligible institution of higher education'' means
an institution of higher education that has an
enrollment of at least 100 full-time equivalent
students who are veterans.
(2) Full-time equivalent students.--The term ``full-
time equivalent students'' has the meaning given such
term in section 312(e).
(3) Veteran.--The term ``veteran'' has the meaning
give such term in section 480(c).
(c) Application.--To be eligible to receive a grant under
this section, an eligible institution of higher education shall
submit an application at such time, in such manner, and
containing such information as the Secretary shall require.
(d) Uses of Funds.--
(1) In general.--An eligible institution of higher
education receiving a grant under this section shall
use such grant to hire 1 or 2 Veterans Resource
Officers (in the case of an institution that has an
enrollment of at least 200 full-time equivalent
students who are veterans) to serve in the office of
campus programs, or a similar office, at such
institution and carry out the activities described in
paragraph (2).
(2) Activities.--A Veterans Resource Officer shall
carry out activities at an eligible institution of
higher education to help increase the completion rates
for veterans enrolled at such institution, which shall
include the following activities:
(A) Serving as a link between student
veterans and the staff of the institution.
(B) Serving as a link between student
veterans and local facilities of the Department
of Veterans Affairs.
(C) Organizing and advising student veterans
organization.
(D) Organizing veterans oriented group
functions and events.
(E) Maintaining newsletters and listserves to
distribute news and information to all student
veterans.
(F) Organizing new student veterans campus
orientation.
(G) Ensuring that the Department of Veterans
Affairs certifying official at such institution
is properly trained.
(3) Priority.--To the extent practicable, each
institution described in paragraph (1) shall give
priority to hiring a veteran to serve as a Veterans
Resource Officer.
(e) Authorization of Appropriations.--There are authorized to
be appropriated to carry out this section such sums as may be
necessary for fiscal year 2010 and each succeeding fiscal year.
TITLE VIII--ADDITIONAL PROGRAMS
* * * * * * *
PART Y--EARLY FEDERAL PELL GRANT COMMITMENT DEMONSTRATION PROGRAM
SEC. 894. EARLY FEDERAL PELL GRANT COMMITMENT DEMONSTRATION PROGRAM.
(a) * * *
* * * * * * *
(f) Targeted Information Campaign.--
(1) * * *
(2) Plan.--Each State educational agency receiving a
grant under this section shall include in the
application submitted under subsection (c) a written
plan for the State educational agency proposed targeted
information campaign. The plan shall include the
following:
(A) * * *
* * * * * * *
(C) Information.--The annual provision by the
State educational agency to all students and
families participating in the demonstration
project of information regarding--
(i) * * *
(ii) Federal Pell Grants, including--
(I) [the maximum Federal Pell
Grant for each award year] the
Federal Pell Grant amount,
determined under section
401(b)(2)(A), for which a
student may be eligible for
each award year;
* * * * * * *
----------
COLLEGE COST REDUCTION AND ACCESS ACT
* * * * * * *
TITLE III--FEDERAL FAMILY EDUCATION LOAN PROGRAM
* * * * * * *
[SEC. 303. REDUCTION OF LENDER INSURANCE PERCENTAGE.
[(a) Amendment.--Subparagraph (G) of section 428(b)(1) (20
U.S.C. 1078(b)(1)(G)) is amended to read as follows:
[``(G) insures 95 percent of the unpaid
principal of loans insured under the program,
except that--
[``(i) such program shall insure 100
percent of the unpaid principal of
loans made with funds advanced pursuant
to section 428(j) or 439(q); and
[``(ii) notwithstanding the preceding
provisions of this subparagraph, such
program shall insure 100 percent of the
unpaid principal amount of exempt
claims as defined in subsection
(c)(1)(G);'.
[(b) Effective Date.--The amendment made by subsection (a)
shall be effective on October 1, 2012, and shall apply with
respect to loans made on or after such date.]
* * * * * * *
XVII. Committee Correspondence
None.
XVIII. Minority and Supplemental Views
----------
SUPPLEMENTAL VIEWS OF REPRESENTATIVES PHIL HARE AND DAVID LOEBSACK
We support the majority views. In particular, we agree that
our nation's community colleges are essential to driving
economic recovery. We write separately to ensure this
legislation provides the necessary support to all our nation's
colleges, especially those located in remote areas of the
country, in order to fully address the economic crisis. We
believe the focus of the competitive grant programs authorized
in Title V for community college reform should be to prepare
individuals for skilled occupations that are in high-demand in
their local area or region. Therefore, we would like to clarify
that the Committee intends for ``high-demand industries'' to be
defined and determined in accordance with the workforce needs
of local and regional economies, which may differ within the
state or between states. In order to slow down and eventually
stop the brain drain prevalent in rural America and many other
areas of the country, the objective is to train and educate
individuals for skilled professions of need within their
communities, rather than provide educational opportunities for
individuals to then seek jobs elsewhere.
We also agree that the focus of the grant programs should
be on moving individuals into skilled occupations with family-
supporting wages. However, the definition of ``high-wage'' also
varies between regions and we do not want to inadvertently
restrict the colleges located in areas with low to moderate
industry from accessing this grant funding. With one-quarter of
all Americans living in rural communities, rural America
presents the most promising area of economic growth in the
country.
In addition, we recognize that individuals with lower
skills may need additional time to achieve skilled or ``high-
wage'' jobs. To address this we believe that when considering
high-wage or skilled occupations, the Secretary and the states
must also look at occupations that may be reasonably expected
to lead to such high-wages or skilled occupations.
Finally, in order to better ensure that the community
colleges located in more remote areas of the country have the
same access to federal funds as schools in urban centers, it is
important that we have the data to understand where the money
is being spent. Therefore, it is the Committee's intention for
the Institute of Education Sciences (IES) in its evaluation of
all the grantees who receive monies for community college
reform to indicate whether the grantee is located in either a
rural or urban area. The data collected from this evaluation
would be invaluable to understanding where the grant money is
going, what geographic regions are impacted and how we can
better distribute resources or structure programs in the future
to ensure that all our nation's students have access to the
same educational and workforce opportunities.
Phil Hare.
Dave Loebsack.
MINORITY VIEWS
Committee Republicans are committed to maintaining the
successful and robust public-private partnership that has
provided low-cost and easily accessible college loans to
students well for over 40 years. We have been, and remain,
supportive of efforts to increase the maximum Pell Grant award
and simplify the Free Application for Federal Student Aid
(FAFSA). However, we believe this bill takes the wrong approach
to accomplish these goals. H.R. 3221, the so-called Student Aid
and Fiscal Responsibility Act of 2009, turns sharply in the
wrong direction by eliminating the Federal Family Education
Loan (FFEL) program, spending less than half of the purported
``savings'' on increases to Pell Grants, and raiding student
aid to fund pet projects like school construction, early
childhood programs, and new initiatives for community colleges.
ANOTHER TAKEOVER BY THE FEDERAL GOVERNMENT
Committee Republicans believe H.R. 3221 represents another
attempt by President Obama and Congressional Democrats to
orchestrate a federal government takeover of a private
industry. The federal government has already succeeded in
taking ownership of the automobile industry and controlling the
actions of the financial industry. With this bill, the
Department of Education, an agency intended to ensure that
every child has the opportunity to learn, will now become one
of the country's largest banks--originating more than $100
billion in federal student loans in the next few years.
In justifying this latest government takeover, Democrats
claim the FFEL program is on ``life support'' and therefore
must be eliminated. However, it cannot be ignored that
Democrats have been trying to eliminate this program since
1993, when President Clinton put into place the Direct Loan
program. What Committee Democrats refuse to acknowledge is that
the FFEL program has been a stable source of private capital
for more than 40 years. Private capital has temporarily dried
up in the FFEL program, much like it has in the rest of the
financial services sector. Yet student lending is the only
sector of the financial services industry being targeted for a
permanent government takeover.
Last Congress, the Committee worked in a bipartisan manner
to pass H.R. 5715, the Ensuring Continued Access to Student
Loans Act (ECASLA). This is one of the only economic
stabilization bills that is working and is proven to save the
federal government money. In fact, according to the President's
fiscal year 2010 budget, this program will save the federal
government $6.7 billion in fiscal year 2010 alone. Under
ECASLA, the FFEL program successfully originated approximately
$70 billion in loans and every student who needed a loan
received one during the 2008-2009 academic year. Congress has
passed other bills to provide liquidity to the financial
marketplace or help stimulate the economy. Those bills,
however, are not proving to be as successful as ECASLA and, in
most cases have simply driven the country deeper into debt.
Committee Democrats also fail to mention that the Direct
Loan program was once on ``life support.'' In 1997, the program
collapsed and was unable to make consolidation loans to
borrowers. At that time, Congress did not seek to end the
program. Rather, Committee Republicans led the effort to pass
emergency legislation to bail out the Direct Loan program to
ensure that borrowers could receive consolidation loans.
Committee Democrats also claim the private sector is dying
because most student loans being originated in the FFEL program
today are being made with federal capital using the authority
provided to the Secretary of Education in ECASLA. At the same
time, Committee Democrats claim their plan will maintain the
program's public-private partnership by permitting limited
participation of certain private sector entities. However, both
of these claims are false when the facts are examined. Despite
the global credit crunch, there continues to be robust
participation by the private sector under the FFEL program.
There are still more than 1,500 active lenders willing to make
student loans, including local lenders like the Navy Federal
Credit Union, University Federal Credit Union, and Banc First,
and approximately 40 percent of total FFEL loan volume is still
being made using private capital.
There are also another 50 private and nonprofit loan
servicers and more than 30 guaranty agencies that provide
valuable services in their respective states and employ more
than 30,000 private sector workers. By comparison, the U.S.
Department of Education currently uses one servicer for the
entire nation. While the Department recently announced that it
would expand this contract to four servicers--a 400% increase
from the monopoly that it was employing until recently--this
move is a poor representation of the public-private enterprise
that has been effective for both students and institutions.
Even the few private sector participants that are able to
maintain a limited role in student lending will not be able to
use the creative, personalized approaches available today. They
will simply be administering a one-size-fits-all approach
dictated by the federal government where market competition and
effective customer service is all but eliminated.
FFEL IS BETTER FOR STUDENTS AND INSTITUTIONS
Committee Republicans believe H.R. 3221 ignores the voices
of the federal student loan consumers--the students who use the
loans and the institutions that must administer the programs.
Institutions have made their opinions known. When President
Clinton first created the Direct Loan program in 1993, the
federal government paid institutions a $10 fee for each loan,
something that is classified as an ``illegal inducement'' under
the FFEL program, and regularly pressured college presidents to
join the DL program. Despite all of this pressure, the Direct
Loan program only captured a total of 34 percent of loan volume
at its peak in 1998. Since that time, loan volume has been
around 20 percent. There has been a slight uptick in volume
recently due to the global economic crisis that has affected
every financial industry, including the student loan industry.
However, even with the crisis and increased pressure from the
Administration and Democrats in Congress, 4,400 schools, or 72
percent, remain in the FFEL program.
These schools will be forced out of FFEL under the
Democrats' plan, regardless of their wishes or ability to make
such a conversion. In fact, the Committee heard from
institutions as recently as the day before the mark up when a
group of 15 financial aid advisors released their ideas for an
alternative proposal which focused on institutional choice of
loan delivery system, customized default prevention and
financial literacy programs, and uninterrupted loan access for
students and parents while still avoiding significant
administrative and financial burdens for institutions.\1\ When
it comes to health care, Democrats like to promise that, ``. .
. if you like your plan, you can keep it.'' It's too bad they
don't feel the same way about student loan programs.
---------------------------------------------------------------------------
\1\``Reforming Federal Student Aid Programs: Focused on the
Students We Serve''
---------------------------------------------------------------------------
The demands of students and institutions within the FFEL
program have sparked fierce competition among loan providers
and servicers. The competition has led to lower prices for
students and institutions and innovation in loan delivery,
processing, and servicing. The competition and innovation in
the current FFEL program has also led to repayment incentives,
interest rate reductions, fee reductions, loan forgiveness, and
other financial benefits for students. Loan providers also
offer broader benefits, such as college planning services,
financial literacy education, default aversion, and FAFSA
assistance, among other value-added services. The innovations
generated by competition cannot be overlooked, even by the
Department of Education, which has followed the private
sector's lead and put in place many of these innovations to
improve the Direct Loan program.
Committee Republicans have heard from colleges and
universities that the Direct Loan program puts additional
administrative burdens on schools. Switching from the FFEL
program to the DL program is not as easy as flipping a switch.
Schools must ensure that their basic software can work with the
DL system. Many schools have ``homegrown'' software that has
been specifically developed to run the schools'' programs.
These institutions will have to overhaul their software systems
since that work will not be done by a software vendor.
Institutions will also have to notify parents and students that
they will have to sign new loan agreements and will have to
answer questions about the new loan products. Some
institutions, such as graduate schools, do not have access to
the C.O.D. system that is used for loan origination, so that
system will need to be added and staff will need to be trained.
Finally, websites and all financial aid materials will need to
be updated. This does not even take into account the number of
staff from different departments that may need to stop their
current tasks to help with the implementation or the projects
currently underway at the institution that will have to be
placed on hold to undergo the systems update necessary for the
implementation of the Direct Loan program.
In talking to institutions that have been in and out of the
Direct Loan program, Committee Republicans have heard that it
could take anywhere between four and nine months for a large
institution, with plenty of staff, to be ready to issue its
first loan. In addition, we have heard that the cost to
institutions of switching programs was $240,000 at one
institution and $400,000 at another institution. Dr. Harris
Pastides, the President of University of South Carolina,
provided more specific details in a letter he sent. He stated,
Because of the type of software developed specifically for
our current computer system, our transition process is not
simply a matter of purchasing and rapidly installing an `off
the shelf' program. Transition to direct lending would require
an investment of well over a million dollars and a timeline for
implementation exceeding one year. . . . To add the cost of
converting our system to direct lending without any help would
be tantamount to another budget reduction for us at this time.
Ironically, this would increase costs and negate much of the
positive impact of potential increases to financial aid
generated by proposed policy improvements. (Emphasis added).\2\
---------------------------------------------------------------------------
\2\Letter to The Honorable Joe Wilson, May 26, 2009.
Gaining eligibility for the Direct Loan program and being ready
to operate the program on an institution-wide basis are two
very different issues that have been ignored by Congressional
Democrats in their zeal to nationalize the student loan
industry.
FFEL IS BETTER FOR TAXPAYERS
Not only is the FFEL program the program of choice for
students and institutions, it is good for taxpayers, too.
Industry participants provide the capital up front and then
share some of the risk in case the borrower defaults. Democrats
may scoff that FFEL providers shoulder only three percent of
the risk, but this figure represents billions of dollars that
the taxpayer is not on the hook for this year. It's also a
substantial amount when you realize that, under the Direct Loan
program, the taxpayer is on the hook for the entire amount if a
student does not repay his or her loan. The FFEL program also
leverages about $70 billion in private capital each year when
the financial markets are working properly. Committee Democrats
want to borrow that $70 billion directly from China and our
other creditors. Driving up the national debt has long-term
consequences, whether it is reducing our nation's credit
rating, inadvertently driving up costs, or putting us at the
mercy of emerging super-powers on the other side of the globe.
Committee Democrats claim that the FFEL program simply
provides profits to banks and that the Direct Loan program
saves the government money. However, the facts show that the
federal government has been receiving subsidies from lenders
for the past several years. Since April 2006, lenders have paid
$3.2 billion to the federal government. Additionally, while
there are a number of factors that lead to the scoring
differences between the two federal student loan programs. One
undeniable factor is that a significant percentage of the
``savings'' in the Direct Loan program are due to the
difference between the government's low cost of borrowing funds
and the borrower interest rate. Committee Republicans have
concerns about the federal government serving as a profit-
making bank at the expense of low- and middle-income students.
Committee Democrats also claim they are making good on
their promise to lower interest rates for students in H.R.
3221, but the facts show otherwise. At the beginning of the
110th Congress, Democrats rushed H.R. 5, the College Student
Relief Act, through the House. That legislation would have
reduced interest rates on student loans by half, from 6.8
percent to 3.4 percent, for all students. Immediately after the
bill was introduced, Committee Democrats started to dilute
their promise by scaling back interest rates from 6.8 percent
to 3.4 percent over five years, but then allowing the interest
rate to jump back up to 6.8 percent in 2012. At the time, The
Chronicle of Higher Education reported that Democrats intended
to make the 3.4 percent interest rate permanent in the
future.\3\ Additionally, Inside Higher Ed reported that,
``Democratic staffers explained that budget rules and fiscal
realities required that compromise. They also aid that they
fully expected to find money in the intervening years to make
the cut permanent.''\4\ The bill was never considered in the
Senate.
---------------------------------------------------------------------------
\3\Burd, Stephen. ``Democrats'' Plan to Slash the Interest Rate for
Student Loans Draws Criticism,'' The Chronicle of Higher Education,
January 5, 2007. The article stated, ``House Democrats briefly
considered making the interest-rate cut for only one year. Then they
hoped to make the cut permanent as part of legislation to renew the
Higher Education Act, the law governing most federal student-aid
programs, which they hope to consider later this year.''
\4\Lederman, Doug. ``Political Maneuvering on Student Loans,''
Inside Higher Education, January 17, 2007
---------------------------------------------------------------------------
Through the budget reconciliation process that year,
Democrats were able to pass H.R. 2669, the College Cost
Reduction and Access Act--legislation to, among other things,
reduce student loan interest rates. But it was an even more
diluted version of their original plan and only scaled back
interest rates from 6.8 percent to 3.4 percent over four years
for undergraduate students receiving subsidized loans. The
legislation retained the 2012 cliff, resulting in the overall
bill representing a negligible benefit for most students.
H.R. 3221 officially breaks any promises that Committee
Democrats made to students when they committed to permanently
lower interest rates; moreover, it ensures the federal
government continues to make a profit off of the unnecessarily
high level of interest being paid by students in the Direct
Loan program. The bill changes the interest rate in 2012 to a
variable interest rate, capped at 6.8 percent. Under this
formula, it is projected that students will see an increase in
their interest rates in 2012 (5.21 percent) and 2013 (6.26
percent) and will be right back up at the 6.8 percent cap in
2014.
MASSIVE ENTITLEMENT SPENDING
Committee Democrats are not only forcing students to spend
more under their bill, but the American taxpayers will also
bear the brunt of almost $80 billion in entitlement spending at
a time when the national debt is more than $11 trillion and the
deficit is estimated to reach $1.8 trillion this year alone.
Historically, entitlement programs such as Social Security,
Medicare, Medicaid, or programs under the Child Nutrition Act
were created to provide income benefits to individual citizens.
Instead of recognizing this important policy, this bill spends
billions of dollars in mandatory, entitlement funding on the
Committee Democrats' favored political and policy causes.
While millions of families are struggling to pay their
monthly bills and are thinking about which of their expenses to
trim, Democrats in Congress are on a huge spending spree that
will saddle our children and grandchildren with billions of
debt. This bill, which Committee Democrats have portrayed as
legislation to improve college access, actually contains: $6.6
billion for school construction--both at the elementary and
secondary and higher education levels; $8 billion for an
``early learning'' initiative from birth to age 5; and $7
billion for community colleges, which may undermine our current
job training system. There are major flaws with what the
Democrats are proposing on school construction, early childhood
education, and community colleges, but the larger issue is how
they are pushing these proposals. Committee Democrats are
putting forward a proposal to raid student aid funds and spend
those entitlement dollars to bolster the funding of programs
which should be within the control of the House and Senate
Appropriations Committees in Congress.
CONCLUSION
Committee Republicans are concerned that Democrats are
rushing through a risky scheme to take over the private student
loan industry, regardless of the negative consequences for
students and institutions. We are also very concerned that the
proposed bill takes the ``savings'' that will result from
eliminating the FFEL program and uses those funds to create a
number of new programs that are not targeted toward individuals
but rather toward favored political constituencies and causes.
It is for these many reasons that Committee Republicans
strongly oppose H.R. 3221 and urge Members of Congress to
defeat this bill.
John Kline.
Buck McKeon.
Pete Hoekstra.
Mark Souder.
Joe Wilson.
Cathy McMorris Rodgers.
Rob Bishop.
Brett Guthrie.
Bill Cassidy.
Tom McClintock.
Duncan Hunter.
David P. Roe.
Glenn G.T. Thompson.
MISCELLANEOUS HOUSE REPORT REQUIREMENTS
Statement on Committee Oversight Findings
Clause 3(c)(1) of rule XIII of the Rules of the House of
Representatives requires the report of a committee on a measure
that has been approved by the committee to contain oversight
findings and recommendations required pursuant to clause
(2)(b)(1) of rule X. The Committee on the Budget has examined
its activities over the past year and has determined that there
are no specific oversight findings on the text of the reported
bill.
New Budget Authority and Congressional Budget Office Estimate
Clause 3(c)(2) and (3) of rule XIII of the Rules of the
House of Representatives and sections 308 and 402 of the
Congressional Budget Act require the report of a committee on a
measure approved by the committee to include a timely submitted
cost estimate by the Congressional Budget Office [CBO].
Statements regarding the CBO estimates of the legislative
recommendations submitted by each of the authorizing committees
are included under the appropriate titles.
Statement on General Performance Goals and Objectives
Clause (3)(c)(4)of rule XIII of the Rules of the House of
Representatives requires the report of a committee on a measure
that has been approved by the committee to include a statement
of general performance goals and objectives, including outcome-
related goals and objectives, for which the measure authorizes
funding. This measure is intended to reduce the deficit, and is
reported pursuant to section 202 of S. Con. Res. 13, the
concurrent resolution on the budget for fiscal year 2010.
Constitutional Authority Statement
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires each report of a committee on a public
bill or public joint resolution contain a statement citing the
specific powers granted to Congress in the Constitution to
enact the law proposed by the bill or joint resolution. The
Committee on the Budget states that its action in reporting
this bill is derived from Article I of the Constitution,
Section 5 (`Each House may determine the Rules of its
Proceedings') and Section 8 (`The Congress shall have the power
to make all Laws which shall be necessary and proper * * *').
Changes in Existing Law
Clause 3 of rule XIII of the Rules of the House of
Representatives requires each report of a committee on a public
bill or public joint resolution contain the text of statutes
that are proposed to be repealed and a comparative print of
that part of the bill proposed to be amended whenever the bill
repeals or amends any statute. The required matter is included
in the report language for each title of the legislative
recommendations submitted by the appropriate authorization
committees and reported to the House by the Committee on the
Budget.
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act of 1974 requires a statement of whether the
provisions of the reported bill include unfunded mandates.
Statements regarding unfunded mandates for the legislative
recommendations submitted by each of the authorizing committees
are included under appropriate titles.
Earmark Identification
The Committee on Budget did not receive any requests for
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9 of rule XXI. Statements
regarding earmark requests that may have been submitted to the
authorizing committees that responded to the reconciliation
instructions are included under the appropriate titles of this
report.
Votes of the Committee
House rule XIII, clause 3(b), requires that each committee
report include the total number of votes cast for and against,
and the names of members voting for and against, each recorded
vote on a motion to report a measure or matter of a public
nature and any amendment offered to the measure or matter.
On March 15, 2010, the Committee met in open session with a
quorum present and ordered reported the Reconciliation Act of
2010 without recommendation. Following is a summary of the
meeting and the roll call votes taken by the Committee.
After calling the Committee to order, Chairman Spratt
stated that under section 310 of the Congressional Budget Act
of 1974, and pursuant to section 202 of Senate Concurrent
Resolution 13, the concurrent resolution on the budget for
fiscal year 2010, the Committee would consider reporting the
reconciliation Act of 2010 to the House of Representatives
without substantive revision.
1. Vice Chair Schwartz moved that the Committee order
reported to the House without recommendation the Reconciliation
Act of 2010. The motion was agreed to by a roll call vote of 21
ayes and 16 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
2. A motion was offered by Representative Mack directing
the Chairman to request that the rule for consideration of the
Reconciliation Act of 2010 make in order an amendment to
prohibit the use of comparative effectiveness research or other
measures to restrict medical professionals from providing and/
or prescribing the care they believe to be medically necessary.
The motion was not agreed to by a roll call vote of 14 ayes
and 23 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
3. A motion was offered by Representative Schwartz
directing the Chairman to request that the rule for
consideration of the Reconciliation Act of 2010 make in order
an amendment to ban health insurance discrimination against
Americans with pre-existing conditions.
The motion was agreed to by voice vote.
4. A motion was offered by Representative Campbell
directing the Chairman to request that the rule for
consideration of the Reconciliation Act of 2010 make in order
an amendment to delay the implementation of the health reform
legislation until Congress has enacted legislation to put the
federal budget and United States economy on a sustainable
fiscal path.
The motion was not agreed to by a roll call vote of 14 ayes
and 23 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
5. A motion was offered by Representative Etheridge
directing the Chairman to request that the rule for
consideration of the Reconciliation Act of 2010 make in order
an amendment to close the coverage gap (``doughnut hole '') in
Medicare Part D and ensure expanded access to preventive care
for Medicare beneficiaries.
The motion was agreed to by a roll call vote of 23 ayes and
15 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
6. A motion was offered by Representative Ryan directing
the Chairman to request that the rule for consideration of the
Reconciliation Act of 2010 make in order an amendment to
prevent Medicare cuts from being used to offset or fund a new
entitlement program, reduce new government spending in such
legislation by that amount, and direct all Medicare savings to
the Medicare program to make that program fiscally sustainable.
The motion was not agreed to by a roll call vote of 17 ayes
and 21 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
7. A motion was offered by Representative McCollum
directing the Chairman to request that the rule for
consideration of the Reconciliation Act of 2010 make in order
an amendment to add new health insurance protections
prohibiting annual and lifetime limits on the amount of care
insurance covers.
The motion was agreed to by a roll call vote of 25 ayes and
11 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
8. A motion was offered by Representative Lummis directing
the Chairman to request that the rule for consideration of the
Reconciliation Act of 2010 make in order an amendment to
prohibit the government from controlling health plan choices
and restricting competition among health plans and delete any
provision, including section 124 of H.R. 3590, that gives the
Secretary of the Department of Health and Human Services and a
new Health Benefits Advisory Committee unprecedented power to
create and change requirements for ``acceptable coverage.''
The motion was not agreed to by a roll call vote of 15 ayes
and 20 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE,
DENNIS
(KS)
------------------------------------------------------------------------
9. A motion was offered by Representative DeLauro directing
the Chairman to request that the rule for consideration of the
Reconciliation Act of 2010 make in order an amendment to create
a Health Insurance Rate Authority to provide needed oversight
of health insurance rates.
The motion was agreed to by a roll call vote of 21 ayes and
15 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
10. A motion was offered by Representative Jordan directing
the Chairman to request that the rule for consideration of the
Reconciliation Act of 2010 make in order an amendment to add
the language of the amendment offered by Representative Bart
Stupak on November 11, 2009 and numbered House Amendment 509 to
H. R. 3962, the Affordable Health Care for America Act, to
prohibit federal funding of abortions.
The motion was not agreed to by a roll call vote of 17 ayes
and 19 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT
(OH) (NJ)
------------------------------------------------------------------------
BECERRA DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
11. A motion was offered by Representative Connolly
directing the Chairman to request that the rule for
consideration of the Reconciliation Act of 2010 make in order
an amendment to ensure that comprehensive health reform reduces
the deficit by more than $100 billion in the next ten years and
up to one trillion dollars in the decade after 2019.
The motion was agreed to by a voice vote.
12. A motion was offered by Representative Garrett
directing the Chairman to request that the rule for
consideration of the Reconciliation Act of 2010 make in order
an amendment that protects American jobs and families by
striking tax increases and mandates that would hinder job
creation and reduce workers' and families' income during a
period of high unemployment and economic weakness.
The motion was not agreed to by a roll call vote of 14 ayes
and 21 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
13. A motion was offered by Representative Boyd directing
the Chairman to request that the rule for consideration of the
Reconciliation Act of 2010 make in order an amendment to
replace the relevant sections on student loan reform with the
terms of the Student Loan Community Proposal that would not
require the transfer of the nation's universities to the Direct
Loan program but would continue to permit new loans to be
originated for a fee by designated private lenders thereby
preserving the jobs and infrastructure throughout the country
that are currently involved in this enterprise.
The motion was not agreed to by a roll call vote of 4 ayes
and 32 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
14. A motion was offered by Representative Garrett
directing the Chairman to request that the rule for
consideration of the Reconciliation Act of 2010 make in order
an amendment to make provisions of the health reform
legislation contingent upon the issuance of a report by the
Centers on Medicare and Medicaid Services Office of the Actuary
stating that such legislation will not increase national health
care expenditures or the federal commitment to health care and
will succeed in bending the ``health care cost curve'' downward
by lowering the projection of such expenditures.
The motion was not agreed to by a roll call vote of 13 ayes
and 23 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
15. A motion was offered by Representative Bishop directing
the Chairman to request that the rule for consideration of the
Reconciliation Act of 2010 make in order an amendment to ensure
that vital financial assistance is provided to more than 8
million college students through increases in the maximum Pell
grant without adding to the federal budget deficit.
The motion was agreed to by a roll call vote of 22 ayes and
15 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
16. A motion was offered by Representative Simpson
directing the Chairman to request that the Rules Committee not
make in order the Reconciliation Act of 2010 or H. R. 3590, the
Senate-passed health care bill, until a Congressional Budget
Office estimate of the measures relative to its March 2010
baseline, including estimates of the budget impact of
authorization of appropriations in such measures, and the text
of such reconciliation legislation are made available to
Members and the public at least 72 hours before being
considered on the House floor and that there be separate votes
on each measure.
The motion was not agreed to by a roll call vote of 16 ayes
and 21 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
17. A motion was offered by Representative Moore (WI)
directing the Chairman to request that the rule for
consideration of the Reconciliation Act of 2010 make in order
an amendment to ensure small businesses are provided with tax
credits to support coverage for their workers, increase
affordability tax credits to families, and reduce cost sharing
for families with modest income.
The motion was agreed to by a roll call vote of 21 ayes and
14 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
18. A motion was offered by Representative McHenry
directing the Chairman to request that the rule for
consideration of the Reconciliation Act of 2010 make in order
an amendment to ensure that the federal mandates do not cause
an increase in projected health care insurance premiums.
The motion was not agreed to by a roll call vote of 16 ayes
and 22 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
19. A motion was offered by Representative Tsongas
directing the Chairman to request that the rule for
consideration of the Reconciliation Act of 2010 make in order
an amendment to ensure women are not denied full health
insurance coverage or maternity coverage due to domestic
violence, caesarian section, or pregnancy.
The motion was agreed to by voice vote.
20. A motion was offered by Representative Latta directing
the Chairman to request that the rule for consideration of the
Reconciliation Act of 2010 make in order an amendment to
eliminate the creation or expansion of government bureaucracies
in the health reform legislation.
The motion was not agreed to by a roll call vote of 15 ayes
and 23 nays.
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
SPRATT X RYAN X
(SC) (WI)
(Chair (Ranki
man) ng)
------------------------------------------------------------------------
SCHWART X HENSARL X
Z (PA) ING
(TX)
------------------------------------------------------------------------
KAPTUR X GARRETT X
(OH) (NJ)
------------------------------------------------------------------------
BECERRA X DIAZ-BA X
(CA) LART
(FL)
------------------------------------------------------------------------
DOGGETT X SIMPSON X
(TX) (ID)
------------------------------------------------------------------------
BLUMENA X McHENRY X
UER (NC)
(OR)
------------------------------------------------------------------------
BERRY X MACK X
(AR) (FL)
------------------------------------------------------------------------
BOYD X CAMPBEL X
(FL) L (CA)
------------------------------------------------------------------------
McGOVER X JORDAN X
N (MA) (OH)
------------------------------------------------------------------------
TSONGAS X LUMMIS X
(MA) (WY)
------------------------------------------------------------------------
ETHERID X AUSTRIA X
GE (OH)
(NC)
------------------------------------------------------------------------
McCOLLU X ADERHOL X
M (MN) T (AL)
------------------------------------------------------------------------
YARMUTH X NUNES X
(KY) (CA)
------------------------------------------------------------------------
ANDREWS X HARPER X
(NJ) (MS)
------------------------------------------------------------------------
DeLAURO X LATTA X
(CT) (OH)
------------------------------------------------------------------------
EDWARDS X .......
(TX)
------------------------------------------------------------------------
SCOTT X .......
(VA)
------------------------------------------------------------------------
LANGEVI X .......
N (RI)
------------------------------------------------------------------------
LARSEN X .........
(WA)
------------------------------------------------------------------------
BISHOP X .........
(NY)
------------------------------------------------------------------------
MOORE, X .........
GWEN
(WI)
------------------------------------------------------------------------
CONNOLL X .........
Y (VA)
------------------------------------------------------------------------
SCHRADE .........
R (OR)
------------------------------------------------------------------------
MOORE, X
DENNIS
(KS)
------------------------------------------------------------------------
21. A motion was offered by Representative Scott directing
the Chairman to request that the rule for consideration of the
Reconciliation Act of 2010 make in order an amendment to
prohibit the privatization or conversion into vouchers of
federal benefits provided by Medicare, Medicaid, the Children's
Health Insurance Program, TRICARE, and veterans health care.
The motion was agreed to by voice vote.
Chairman Spratt adjourned the Committee.
Views of the Members of Committees Submitting Reconciliation
Recommendations
Clause 2(c) of rule XIII of the Rules of the House of
Representatives requires each report by a committee on a public
matter to include any additional, minority, supplemental or
dissenting views submitted pursuant to clause 2(l) of rule XI
by one or more members of the committee. In addition, this
report includes such views from members of committees
submitting reconciliation recommendations pursuant to S. Con.
Res. 13.
Paul Ryan, Ranking Member.
Jeb Hensarling, Vice Ranking Member.
Scott Garrett.
Mario Diaz-Balart.
Mike Simpson.
Patrick McHenry.
Connie Mack.
John Campbell.
Jim Jordan.
Cynthia Lummis.
Steve Austria.
Robert B. Aderholt.
Devin Nunes.
Gregg Harper
Bob Latta.