[House Report 119-106]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-106
_______________________________________________________________________
ONE BIG BEAUTIFUL BILL
ACT
----------
R E P O R T
of the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
[to accompany H.R. 1]
together with
MINORITY VIEWS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Book 1 of 2
May 20, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-106
_______________________________________________________________________
ONE BIG BEAUTIFUL BILL
ACT
__________
R E P O R T
of the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
[to accompany H.R. 1]
together with
MINORITY VIEWS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Book 1 of 2
May 20, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
U.S. GOVERNMENT PUBLISHING OFFICE
60-415 WASHINGTON : 2025
COMMITTEE ON THE BUDGET
JODEY C. ARRINGTON, Texas, Chairman
RALPH NORMAN, South Carolina BRENDAN F. BOYLE, Pennsylvania,
TOM McCLINTOCK, California Ranking Member
GLENN GROTHMAN, Wisconsin LLOYD DOGGETT, Texas
LLOYD SMUCKER, Pennsylvania ROBERT C. ``BOBBY'' SCOTT,
EARL L. ``BUDDY'' CARTER, Georgia Virginia
BEN CLINE, Virginia SCOTT H. PETERS, California
JACK BERGMAN, Michigan JIMMY PANETTA, California
CHIP ROY, Texas BONNIE WATSON COLEMAN, New Jersey
MARLIN A. STUTZMAN, Indiana STACEY E. PLASKETT, Virgin Islands
BLAKE D. MOORE, Utah VERONICA ESCOBAR, Texas
RON ESTES, Kansas ILHAN OMAR, Minnesota
JOSH BRECHEEN, Oklahoma BECCA BALINT, Vermont
JAY OBERNOLTE, California MARCY KAPTUR, Ohio
MIKE CAREY, Ohio PRAMILA JAYAPAL, Washington
CHUCK EDWARDS, North Carolina JUDY CHU, California
ANDREW S. CLYDE, Georgia PAUL TONKO, New York
ERIN HOUCHIN, Indiana MORGAN McGARVEY, Kentucky
ADDISON P. McDOWELL, North Carolina GABE AMO, Rhode Island
BRANDON GILL, Texas
TIM MOORE, North Carolina
Professional Staff
GARY ANDRES, Staff Director
GREG WARING, Minority Staff Director
C O N T E N T S
Page
Introduction by the Committee on the Budget...................... 3
Title I--Committee on Agriculture................................ 11
Title II--Committee on Armed Services............................ 105
Title III--Committee on Education and Workforce.................. 165
Title IV--Committee on Energy and Commerce....................... 473
Title V--Committee on Financial Services......................... 641
Title VI--Committee on Homeland Security......................... 735
Title VII--Committee on the Judiciary............................ 805
Title VIII--Committee on Natural Resources....................... 929
Title IX--Committee on Oversight and Government Reform........... 1089
Title X--Committee on Transportation and Infrastructure.......... 1153
Title XI--Committee on Ways and Means............................ 1309
Committee on the Budget:
Votes of the Committee on the Budget......................... 1943
Other House Report Requirements.............................. 1953
Views of Committee Members................................... 2063
One Big Beautiful Bill Act (legislative text).................... 2067
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-106
======================================================================
ONE BIG BEAUTIFUL BILL ACT
_______
May 20, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Arrington, from the Committee on Budget,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1]
The Committee on the Budget, to whom reconciliation
recommendations were submitted pursuant to title II of H. Con.
Res. 14, the concurrent resolution on the budget for fiscal
year 2025, having considered the same, report favorably thereon
without amendment and recommend that the bill do pass.
Introduction by the Committee on the Budget
This legislation is the principal vehicle to advance
President Trump's America First agenda. It delivers tax relief
for Americans, reforms entitlement programs to ensure they are
serving the most vulnerable, keeps our nation safe, and rolls
back burdensome, expansive government regulations.
The gross federal debt is currently $36.2 trillion--121
percent of GDP. According to the nonpartisan Congressional
Budget Office (CBO), it is projected to increase to $59.2
trillion in 2035--134.8 percent of GDP. The fiscal year 2025
deficit is projected to be $1.9 trillion and CBO projects that
by 2035 the annual deficit will have grown to $2.5 trillion.
As the Nation's debt and deficits have grown so has
interest spending. Interest spending this year is estimated to
be $952 billion or 3.2 percent of GDP and exceeds what we spend
each year on our military. CBO estimates that over the decade
interest spending will total $13.8 trillion and consume up to
forty percent of all individual income taxes. These interest
payments provide no benefits and finance no government service
or operations. Instead, they divert resources from true needs.
Spending is also estimated to explode, from $7 trillion
annually in 2025 to $10.6 trillion in 2035. As a share of the
economy, future spending is estimated to average 24.9 percent
over the next thirty years, well above the historic average of
21.1 percent. Revenues, in contrast, increase as a percentage
of GDP, growing from the historical average of 17.3 percent to
an average of 18.6 percent over the next three decades.
Excessive spending, not insufficient revenue, explains the
surge in annual deficits.
The Concurrent Resolution on the Budget for Fiscal Year
2025, H. Con. Res. 14, provided the framework to implement
President Trump's America First agenda and reduce spending by
at least $1.5 trillion over fiscal years 2025 through 2034.
Pursuant to section 310 of the Congressional Budget Act of
1974, the Committee on the Budget binds together the
submissions from the 11 instructed authorizing committees,
without substantive revision, and reports the reconciliation
bill to the House of Representatives.
This reconciliation bill contains the legislative
recommendations marked up by the 11 authorizing committees of
the House of Representatives pursuant to the reconciliation
instructions included in H. Con. Res. 14, the Concurrent
Resolution on the Budget for Fiscal Year 2025. These
legislative recommendations were transmitted to the Committee
on the Budget. CBO has confirmed that ten of the eleven
submissions satisfied the instructions for the House
authorizing committees instructed in H. Con. Res. 14. Although
the House Committee on Armed Services exceeded its instruction,
the legislative recommendations transmitted by the House
Committee on Armed Services comply with the instruction given
to the Senate Committee on Armed Services in H. Con. Res. 14.
This reconciliation bill addresses unchecked, automatic
mandatory spending and tackles the fraud, waste, and
unnecessary spending that will saddle our children with a debt
they never voted for. This bill encompasses the single largest
package of mandatory savings ever advanced by Congress. The
policies in the One Big Beautiful Bill Act accomplish these
reforms in a fiscally responsible package that will make our
country stronger, safer, and more solvent.
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 15, 2025.
Re: Information About Reconciliation Legislation Passed by Several
Committees of the House of Representatives
Hon. Jodey Arrington,
Chairman, Committee on the Budget,
U.S. House of Representatives,
Washington, DC.
Dear Mr. Chairman: Title II of H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025,
included reconciliation instructions directing the Committees
of the House of Representatives to propose legislation that
would produce specified budgetary results.
This letter summarizes information that CBO and the staff
of the Joint Committee on Taxation have provided about the
budgetary effects of reconciliation recommendations by the
various House Committees. The table shows estimates of the
budgetary effects over the 2025-2034 period for each Committee.
Depending on the time available to complete the estimate,
CBO has provided either a point estimate or information about
whether the Committee has complied with the reconciliation
instructions.
RECONCILIATION INSTRUCTIONS TO HOUSE COMMITTEES AND CBO'S ESTIMATES OF PRECOMMENDATIONS FOR H. CON. RES. 14, THE
CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2025
----------------------------------------------------------------------------------------------------------------
Reconciliation Estimated Effects 2025-
House Committee Instructions 2025-2034 2034 Published Estimate
----------------------------------------------------------------------------------------------------------------
Agriculture.......................... Reduce the deficit by Reduce deficits by more www.cbo.gov/publication/
not less than $230 than $230 billion. 61405
billion.
Armed Services....................... Increase the deficit by Increase deficits by www.cbo.gov/publication/
not more than $100 $144 billion. 61372
billion.
Education and Workforce.............. Reduce the deficit by Reduce deficits by not www.cbo.gov/publication/
not less than $330 less than $330 billion. 61401
billion.
Energy and Commerce.................. Reduce the deficit by Reduce deficits by more www.cbo.gov/publication/
not less than $880 than $880 billion. 61392
billion.
Financial Services................... Reduce the deficit by Reduce deficits by $5 www.cbo.gov/publication/
not less than $1 billion. 61379
billion.
Homeland Security.................... Increase the deficit by Increase deficits by www.cbo.gov/publication/
not more than $90 $67 billion. 61384
billion.
Judiciary............................ Increase the deficit by Increase deficits by www.cbo.gov/publication/
not more than $110 less than $110 billion. 61368
billion.
Natural Resources.................... Reduce the deficit by Reduce deficits by more www.cbo.gov/publication/
not less than $1 than $1 billion. 61403
billion.
Oversight and Government Reform...... Reduce the deficit by Reduce deficits by $51 www.cbo.gov/publication/
not less than $50 billion. 61381
billion.
Transportation and Infrastructure.... Reduce the deficit by Reduce deficits by $37 www.cbo.gov/publication/
not less than $10 billion. 61400
billion.
Ways and Means....................... Increase the deficit by Increase deficits by www.jct.gov/
not more than $4.5 less than $4.5 publications/2025/jcx-
trillion. trillion. 22-25r
----------------------------------------------------------------------------------------------------------------
I hope this information is useful to you. Please contact me
if you have further questions.
Sincerely,
Phillip L. Swagel,
Director.
U.S. House of Representatives,
Committee on Agriculture,
Washington, DC, May 14, 2025.
Hon. Jodey C. Arrington,
Chairman, Committee on the Budget,
House of Representatives, Washington, DC.
Dear Chairman Arrington: Pursuant to section 2001 of the
Concurrent Resolution on the Budget for Fiscal Year 2025, I
hereby transmit these recommendations which have been approved
by vote of the Committee on Agriculture to the House Committee
on the Budget. This submission is in order to comply with
reconciliation directives included in H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025, and
is consistent with section 310 of the Congressional Budget Act
of 1974.
Sincerely,
Glenn ``GT'' Thompson,
Chairman.
TITLE I--COMMITTEE ON AGRICULTURE
CONTENTS
Page
Title I--Committee on Agriculture................................ 11
Subtitle A--Nutrition........................................ 11
Subtitle B--Investment in Rural America...................... 16
Brief Explanation................................................ 47
Purpose And Need................................................. 47
Section-By-Section Description................................... 49
Committee Consideration.......................................... 61
Committee Votes.................................................. 67
Committee Oversight Findings..................................... 96
New Budget Authority, Entitlement Authority, and Tax Expenditures 96
Congressional Budget Office Estimates............................ 96
Earmark Statement................................................ 96
Performance Goals and Objectives................................. 96
Advisory Committee Statement..................................... 96
Applicability to the Legislative Branch.......................... 96
Federal Mandates Statement....................................... 96
Duplication of Federal Programs.................................. 97
Changes in Existing Law.......................................... 97
Dissenting Views................................................. 98
Amendment in the Nature of a Substitute
to Committee Print
Offered by Mr. Thompson of Pennsylvania
[(Providing for reconciliation pursuant to H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025)]
Strike ``TITLE __--COMMITTEE ON AGRICULTURE'' and all that
follows and insert the following:
TITLE I--COMMITTEE ON AGRICULTURE
Subtitle A--Nutrition
SEC. 10001. THRIFTY FOOD PLAN.
Section 3(u) of the Food and Nutrition Act of 2008 (7 U.S.C.
2012(u)) is amended to read as follows:
``(u)(1) `Thrifty food plan' means the diet required to feed
a family of 4 persons consisting of a man and a woman 20
through 50, a child 6 through 8, and a child 9 through 11 years
of age, based on relevant market baskets that shall only be
changed pursuant to paragraph (3). The cost of such diet shall
be the basis for uniform allotments for all households
regardless of their actual composition. The Secretary shall
only adjust the cost of the diet as specified in paragraphs (2)
and (4).
``(2) Household Adjustments.--The Secretary shall make
household-size adjustments based on the following ratios of
household size as a percentage of the maximum 4-person
allotment:
``(A) For a 1-person household, 30 percent.
``(B) For a 2-person household, 55 percent.
``(C) For a 3-person household, 79 percent.
``(D) For a 4-person household, 100 percent.
``(E) For a 5-person household, 119 percent.
``(F) For a 6-person household, 143 percent.
``(G) For a 7-person household, 158 percent.
``(H) For an 8-person household, 180 percent.
``(I) For a 9-person household, 203 percent.
``(J) For a 10-person household, 224 percent.
``(K) For households with more than 10 persons, such
adjustment for each additional person shall be 224
percent plus the product of 21 percent and the
difference in the number of persons in the household
and 10.
``(3) Reevaluation of market baskets.--
``(A) Evaluation.--Not earlier than October
1, 2028, and at not more frequently than 5-year
intervals thereafter, the Secretary may
reevaluate the market baskets of the thrifty
food plan taking into consideration current
food prices, food composition data, consumption
patterns, and dietary guidance.
``(B) Notice.--Prior to any update of the
market baskets of the thrifty food plan based
on a reevaluation pursuant to subparagraph (A),
the methodology and results of any such
revelation shall be published in the Federal
Register with an opportunity for comment of not
less than 60 days.
``(C) Cost neutrality.--The Secretary shall
not increase the cost of the thrifty food plan
based on a reevaluation or update under this
paragraph.
``(4) Allowable cost adjustments.--On October 1
immediately following the effective date of this
paragraph and on each October 1 thereafter, the
Secretary shall--
``(A) adjust the cost of the thrifty food
plan to reflect changes in the Consumer Price
Index for All Urban Consumers, published by the
Bureau of Labor Statistics of the Department of
Labor, for the most recent 12-month period
ending in June;
``(B) make cost adjustments in the thrifty
food plan for urban and rural parts of Hawaii
and urban and rural parts of Alaska to reflect
the cost of food in urban and rural Hawaii and
urban and rural Alaska provided such cost
adjustment shall not exceed the rate of
increase described in the Consumer Price Index
for All Urban Consumers, published by the
Bureau of Labor Statistics of the Department of
Labor, for the most recent 12-month period
ending in June; and
``(C) make cost adjustments in the separate
thrifty food plans for Guam and the Virgin
Islands of the United States to reflect the
cost of food in those States, but not to exceed
the cost of food in the 50 States and the
District of Columbia, provided that such cost
adjustment shall not exceed the rate of
increase described in the Consumer Price Index
for All Urban Consumers, published by the
Bureau of Labor Statistics of the Department of
Labor, for the most recent 12-month period
ending in June.''.
SEC. 10002. ABLE BODIED ADULTS WITHOUT DEPENDENTS WORK REQUIREMENTS.
(a) Section 6(o)(3) of the Food and Nutrition Act of 2008 is
amended to read as follows:
``(3) Exception.--Paragraph (2) shall not apply to an
individual if the individual is--
``(A) under 18 or over 65 years of age;
``(B) medically certified as physically or
mentally unfit for employment;
``(C) a parent or other member of a household
with responsibility for a dependent child under
7 years of age;
``(D) otherwise exempt under subsection
(d)(2);
``(E) a pregnant woman;
``(F) currently homeless;
``(G) a veteran;
``(H) 24 years of age or younger and was in
foster care under the responsibility of a State
on the date of attaining 18 years of age or
such higher age as the State has elected under
section 475(8)(B)(iii) of the Social Security
Act (42 U.S.C. 675(8)(B)(iii)); or
``(I) responsible for a dependent child 7
years of age or older and is married to, and
resides with, an individual who is in
compliance with the requirements of paragraph
(2).''.
(b) Sunset Provision.--The exceptions in subparagraphs (F)
through (H) shall cease to have effect on October 1, 2030.
SEC. 10003. ABLE BODIED ADULTS WITHOUT DEPENDENTS WAIVERS.
Section 6(o) of the Food and Nutrition Act of 2008 (7 U.S.C.
2015(o)) is amended--
(1) by amending paragraph (4)(A) to read as follows:
``(A) In general.--On the request of a State
agency and with the support of the chief
executive officer of the State, the Secretary
may waive the applicability of paragraph (2)
for not more than 12 consecutive months to any
group of individuals in the State if the
Secretary makes a determination that the
county, or county-equivalent (as recognized by
the Census Bureau) in which the individuals
reside has an unemployment rate of over 10
percent.''; and
(2) in paragraph (6)(F) by striking ``8 percent'' and
inserting ``1 percent''.
SEC. 10004. AVAILABILITY OF STANDARD UTILITY ALLOWANCES BASED ON
RECEIPT OF ENERGY ASSISTANCE.
(a) Allowance to Recipients of Energy Assistance.--
(1) Standard utility allowance.--Section
5(e)(6)(C)(iv)(I) of the of the Food and Nutrition Act
of 2008 (7 U.S.C. 2014(e)(6)(C)(iv)(I)) is amended by
inserting ``with an elderly or disabled member'' after
``households''.
(2) Conforming amendments.--Section 2605(f)(2)(A) of
the Low-Income Home Energy Assistance Act is amended by
inserting ``received by a household with an elderly or
disabled member'' before ``, consistent with section
5(e)(6)(C)(iv)(I)''.
(b) Third-party Energy Assistance Payments.--Section 5(k)(4)
of the Food and Nutrition Act of 2008 (7 U.S.C. 2014(k)(4)) is
amended--
(1) in subparagraph (A) by inserting ``without an
elderly or disabled member'' after ``household'' the
1st place it appears; and
(2) in subparagraph (B) by inserting ``with an
elderly or disabled member'' after ``household'' the
1st place it appears.
SEC. 10005. RESTRICTIONS ON INTERNET EXPENSES.
Section 5(e)(6) of the Food and Nutrition Act of 2008 (7
U.S.C. 2014(e)(6)) is amended by adding at the end the
following:
``(E) Restrictions on internet expenses.--
Service fees associated with internet
connection, including, but not limited to,
monthly subscriber fees (i.e., the base rate
paid by the household each month in order to
receive service, which may include high-speed
internet), taxes and fees charged to the
household by the provider that recur on regular
bills, the cost of modem rentals, and fees
charged by the provider for initial
installation, shall not be used in computing
the excess shelter expense deduction.''.
SEC. 10006. MATCHING FUNDS REQUIREMENTS.
(a) In General.--Section 4(a) of the Food and Nutrition Act
of 2008 (7 U.S.C. 2013(a)) is amended--
(1) by striking ``(a) Subject to'' and inserting the
following:
``(a) Program.--
``(1) Establishment.--Subject to''; and
(2) by adding at the end the following:
``(2) Matching Funds Requirements.--
``(A) In general.--
``(i) Federal share.--Subject to subparagraph
(B), the Federal share of the cost of
allotments described in paragraph (1) in a
fiscal year shall be--
``(I) for each of fiscal years 2026
and 2027, 100 percent; and
``(II) for fiscal year 2028 and each
fiscal year thereafter, 95 percent.
``(ii) State share.--Subject to subparagraph
(B), the State share of the cost of allotments
described in paragraph (1) in a fiscal year
shall be--
``(I) for each of fiscal years 2026
and 2027, 0 percent; and
``(II) for fiscal year 2028 and each
fiscal year thereafter, 5 percent.
``(B) State quality control incentive.--Beginning in
fiscal year 2028, any State that has a payment error
rate, as defined in section 16, for the most recent
complete fiscal year for which data is available, of--
``(i) equal to or greater than 6 percent but
less than 8 percent, shall have its Federal
share of the cost of allotments described in
paragraph (1) for the current fiscal year equal
85 percent, and its State share equal 15
percent;
``(ii) equal to or greater than 8 percent but
less than 10 percent, shall have its Federal
share of the cost of allotments described in
paragraph (1) for the current fiscal year equal
80 percent, and its State share equal 20
percent; and
``(iii) equal to or greater than 10 percent,
shall have its Federal share of the cost of
allotments described in paragraph (1) for the
current fiscal year equal 75 percent, and its
State share equal 25 percent.''.
(b) Rule of Construction.--The Secretary of Agriculture may
not pay towards the cost of allotments described in paragraph
(1) of section 4(a) of the Food and Nutrition Act of 2008 (7
U.S.C. 2013(a)), as designated by subsection (a), an amount
greater than the applicable Federal share described in
paragraph (2) of such section 4(a), as added by subsection (a).
SEC. 10007. ADMINISTRATIVE COST SHARING.
Section 16(a) of the Food and Nutrition Act of 2008 (7 U.S.C.
2025(a)) is amended by striking ``50 per centum'' and inserting
``25 percent''.
SEC. 10008. GENERAL WORK REQUIREMENT AGE.
Section 6(d) of the Food and Nutrition Act of 2008 (7 U.S.C.
2015(d)) is amended--
(1) in paragraph (1)(A), in the matter preceding
clause (i), by striking ``over the age of 15 and under
the age of 60'' and inserting ``over the age of 17 and
under the age of 65''; and
(2) in paragraph (2)--
(A) by striking ``child under age six'' and
inserting ``child under age seven''; and
(B) by striking ``between 1 and 6 years of
age'' and inserting ``between 1 and 7 years of
age''.
SEC. 10009. NATIONAL ACCURACY CLEARINGHOUSE.
Section 11(x)(2) of the Food and Nutrition Act of 2008 (7
U.S.C. 2020(x)(2)) is amended by adding at the end the
following:
``(D) Data sharing to prevent other multiple
issuances.--A State agency shall use each
indication of multiple issuance, or each
indication that an individual receiving
supplemental nutrition assistance program
benefits in 1 State has applied to receive
supplemental nutrition assistance program
benefits in another State, to prevent multiple
issuances of other Federal and State assistance
program benefits that a State agency
administers through the integrated eligibility
system that the State uses to administer the
supplemental nutrition assistance program in
the State.''.
SEC. 10010. QUALITY CONTROL ZERO TOLERANCE.
Section 16(c)(1)(A)(ii) of the Food and Nutrition Act of 2008
(7 U.S.C. 2025(c)(1)(A)(ii)) is amended--
(1) in subclause (I), by striking ``and'' at the end;
(2) in subclause (II)--
(A) by striking ``fiscal year thereafter''
and inserting ``of fiscal years 2015 through
2025''; and
(B) by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(III) for each fiscal year
thereafter, $0.''.
SEC. 10011. NATIONAL EDUCATION AND OBESITY PREVENTION GRANT PROGRAM
REPEALER.
The Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.) is
amended by striking section 28 (7 U.S.C. 2036a).
SEC. 10012. ALIEN SNAP ELIGIBILITY.
Section 6(f) of the Food and Nutrition Act of 2008 (7 U.S.C.
2015(f)) is amended--
(1) in the 1st sentence--
(A) by striking ``No'' and inserting ``In
addition to the limitations on eligibility in
the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996, no'';
and
(B) by striking ``; or (C) an alien who
entered the United States prior to June 30,
1948, or such subsequent date as is enacted by
law, has continuously maintained his or her
residence in the United States since then, and
is not ineligible for citizenship, but who is
deemed to be lawfully admitted for permanent
residence as a result of an exercise of
discretion by the Attorney General pursuant to
section 249 of the Immigration and Nationality
Act (8 U.S.C. 1259); or (D) an alien who has
qualified for conditional entry pursuant to
sections 207 and 208 of the Immigration and
Nationality Act (8 U.S.C. 1157 and 1158); or
(E) an alien who is lawfully present in the
United States as a result of an exercise of
discretion by the Attorney General for emergent
reasons or reasons deemed strictly in the
public interest pursuant to section 212(d)(5)
of the Immigration and Nationality Act (8
U.S.C. 1182(d)(5)); or (F) an alien within the
United States as to whom the Attorney General
has withheld deportation pursuant to section
243 of the Immigration and Nationality Act (8
U.S.C. 1253(h))''; and
(2) in the 2d sentence by striking ``clauses (B)
through (F)'' and inserting ``paragraph (2)(B)''.
SEC. 10012. EMERGENCY FOOD ASSISTANCE.
Section 203D(d)(5) of the Emergency Food Assistance Act of
1983 (7 U.S.C. 7507(d)(5)) is amended by striking ``2024'' and
inserting ``2031''.
Subtitle B--Investment in Rural America
SEC. 10101. SAFETY NET.
(a) Reference Price.--Section 1111(19) of the Agricultural
Act of 2014 (7 U.S.C. 9011(19)) is amended to read as follows:
``(19) Reference price.--
``(A) In general.--Subject to subparagraphs
(B) and (C), the term `reference price', with
respect to a covered commodity for a crop year,
means the following:
``(i) For wheat, $6.35 per bushel.
``(ii) For corn, $4.10 per bushel.
``(iii) For grain sorghum, $4.40 per
bushel.
``(iv) For barley, $5.45 per bushel.
``(v) For oats, $2.65 per bushel.
``(vi) For long grain rice, $16.90
per hundredweight.
``(vii) For medium grain rice, $16.90
per hundredweight.
``(viii) For soybeans, $10.00 per
bushel.
``(ix) For other oilseeds, $23.75 per
hundredweight.
``(x) For peanuts, $630.00 per ton.
``(xi) For dry peas, $13.10 per
hundredweight.
``(xii) For lentils, $23.75 per
hundredweight.
``(xiii) For small chickpeas, $22.65
per hundredweight.
``(xiv) For large chickpeas, $25.65
per hundredweight.
``(xv) For seed cotton, $0.42 per
pound.
``(B) Effectiveness.--Effective beginning
with the 2031 crop year, the reference prices
defined in subparagraph (A) with respect to a
covered commodity shall equal the reference
price in the previous crop year multiplied by
1.005.
``(C) Limitation.--In no case shall a
reference price for a covered commodity exceed
115 percent of the reference price for such
covered commodity listed in subparagraph
(A).''.
(b) Base Acres.--Section 1112 of the Agricultural Act of 2014
(7 U.S.C. 9012) is amended--
(1) in subsection (d)(3)(A), by striking ``2023'' and
inserting ``2031''; and
(2) by adding at the end the following:
``(e) Additional Base Acres.--
``(1) In general.--As soon as practicable after the
date of enactment of this subsection, and
notwithstanding subsection (a), the Secretary shall
provide notice to owners of eligible farms pursuant to
paragraph (4) and allocate to those eligible farms a
total of not more than an additional 30,000,000 base
acres in the manner provided in this subsection.
``(2) Content of notice.--The notice under paragraph
(1) shall include the following:
``(A) Information that the allocation is
occurring.
``(B) Information regarding the eligibility
of the farm for an allocation of base acres
under paragraph (4).
``(C) Information regarding how an owner may
appeal a determination of ineligibility for an
allocation of base acres under paragraph (4)
through an appeals process established by the
Secretary.
``(3) Opt-out.--An owner of a farm that is eligible
to receive an allocation of base acres may elect to not
receive that allocation by notifying the Secretary.
``(4) Eligibility.--
``(A) In general.--Subject to subparagraph
(D), effective beginning with the 2026 crop
year, a farm is eligible to receive an
allocation of base acres if, with respect to
the farm, the amount described in subparagraph
(B) exceeds the amount described in
subparagraph (C).
``(B) 5-year average sum.--The amount
described in this subparagraph, with respect to
a farm, is the sum of--
``(i) the 5-year average of--
``(I) the acreage planted on
the farm to all covered
commodities for harvest,
grazing, haying, silage or
other similar purposes for the
2019 through 2023 crop years;
and
``(II) any acreage on the
farm that the producers were
prevented from planting during
the 2019 through 2023 crop
years to covered commodities
because of drought, flood, or
other natural disaster, or
other condition beyond the
control of the producers, as
determined by the Secretary;
plus
``(ii) the lesser of--
``(I) 15 percent of the total
acres on the farm; and
``(II) the 5-year average
of--
``(aa) the acreage
planted on the farm to
eligible noncovered
commodities for
harvest, grazing,
haying, silage, or
other similar purposes
for the 2019 through
2023 crop years; and
``(bb) any acreage on
the farm that the
producers were
prevented from planting
during the 2019 through
2023 crop years to
eligible noncovered
commodities because of
drought, flood, or
other natural disaster,
or other condition
beyond the control of
the producers, as
determined by the
Secretary.
``(C) Total number of base acres for covered
commodities.--The amount described in this
subparagraph, with respect to a farm, is the
total number of base acres for covered
commodities on the farm (excluding unassigned
crop base), as in effect on September 30, 2024.
``(D) Effect of no recent plantings of
covered commodities.--In the case of a farm for
which the amount determined under clause (i) of
subparagraph (B) is equal to zero, that farm
shall be ineligible to receive an allocation of
base acres under this subsection.
``(E) Acreage planted on the farm to eligible
noncovered commodities defined.--In this
paragraph, the term `acreage planted on the
farm to eligible noncovered commodities' means
acreage planted on a farm to commodities other
than covered commodities, trees, bushes, vines,
grass, or pasture (including cropland that was
idle or fallow), as determined by the
Secretary.
``(5) Number of base acres.--Subject to paragraphs
(4) and (7), the number of base acres allocated to an
eligible farm shall--
``(A) be equal to the difference obtained by
subtracting the amount determined under
subparagraph (C) of paragraph (4) from the
amount determined under subparagraph (B) of
that paragraph; and
``(B) include unassigned crop base.
``(6) Allocation of acres.--
``(A) Allocation.--The Secretary shall
allocate the number of base acres under
paragraph (5) among those covered commodities
planted on the farm at any time during the 2019
through 2023 crop years.
``(B) Allocation formula.--The allocation of
additional base acres for covered commodities
shall be in proportion to the ratio of--
``(i) the 5-year average of--
``(I) the acreage planted on
the farm to each covered
commodity for harvest, grazing,
haying, silage, or other
similar purposes for the 2019
through 2023 crop years; and
``(II) any acreage on the
farm that the producers were
prevented from planting during
the 2019 through 2023 crop
years to that covered commodity
because of drought, flood, or
other natural disaster, or
other condition beyond the
control of the producers, as
determined by the Secretary; to
``(ii) the 5-year average determined
under paragraph (4)(B)(i).
``(C) Inclusion of all 5 years in average.--
For the purpose of determining a 5-year acreage
average under subparagraph (B) for a farm, the
Secretary shall not exclude any crop year in
which a covered commodity was not planted.
``(D) Treatment of multiple planting or
prevented planting.--For the purpose of
determining under subparagraph (B) the acreage
on a farm that producers planted or were
prevented from planting during the 2019 through
2023 crop years to covered commodities, if the
acreage that was planted or prevented from
being planted was devoted to another covered
commodity in the same crop year (other than a
covered commodity produced under an established
practice of double cropping), the owner may
elect the covered commodity to be used for that
crop year in determining the 5-year average,
but may not include both the initial covered
commodity and the subsequent covered commodity.
``(E) Limitation.--The allocation of
additional base acres among covered commodities
on a farm under this paragraph may not result
in a total number of base acres for the farm in
excess of the total number of acres on the
farm.
``(7) Reduction by the secretary.--In carrying out
this subsection, if the total number of eligible acres
allocated to base acres across all farms in the United
States under this subsection would exceed 30,000,000
acres, the Secretary shall apply an across-the-board,
pro-rata reduction to the number of eligible acres to
ensure the number of allocated base acres under this
subsection is equal to 30,000,000 acres.
``(8) Payment yield.--Beginning with crop year 2026,
for the purpose of making price loss coverage payments
under section 1116, the Secretary shall establish
payment yields to base acres allocated under this
subsection equal to--
``(A) the payment yield established on the
farm for the applicable covered commodity; and
``(B) if no such payment yield for the
applicable covered commodity exists, a payment
yield--
``(i) equal to the average payment
yield for the covered commodity for the
county in which the farm is situated;
or
``(ii) determined pursuant to section
1113(c).
``(9) Treatment of new owners.--In the case of a farm
for which the owner on the date of enactment of this
subsection was not the owner for the 2019 through 2023
crop years, the Secretary shall use the planting
history of the prior owner or owners of that farm for
purposes of determining--
``(A) eligibility under paragraph (4);
``(B) eligible acres under paragraph (5); and
``(C) the allocation of acres under paragraph
(6).''.
(c) Producer Election.--Section 1115 of the Agricultural Act
of 2014 (7 U.S.C. 9015) is amended--
(1) in subsection (a), in the matter preceding
paragraph (1) by striking ``2023'' and inserting
``2031''; and
(2) in subsection (c)--
(A) in the matter preceding paragraph (1), by
striking ``2014 crop year or the 2019 crop
year, as applicable'' and inserting ``2014 crop
year, 2019 crop year, or 2026 crop year, as
applicable'';
(B) in paragraph (1), by striking ``2014 crop
year or the 2019 crop year, as applicable,''
and inserting ``2014 crop year, 2019 crop year,
or 2026 crop year, as applicable,''; and
(C) in paragraph (2)--
(i) in subparagraph (A), by striking
``and'' at the end;
(ii) in subparagraph (B), by striking
the period at the end and inserting ``;
and''; and
(iii) by adding at the end the
following:
``(C) the same coverage for each covered
commodity on the farm for the 2026 through 2031
crop years as was applicable for the 2024 crop
year.''.
(d) Price Loss Coverage.--Section 1116 of the Agricultural
Act of 2014 (7 U.S.C. 9016) is amended--
(1) in subsection (a)(2), in the matter preceding
subparagraph (A), by striking ``2023'' and inserting
``2031'';
(2) in subsection (c)(1)(B)--
(A) in the subparagraph heading, by striking
``2023'' and inserting ``2031''; and
(B) in the matter preceding clause (i), by
striking ``2023'' and inserting ``2031'';
(3) in subsection (d), by striking ``2025'' and
inserting ``2031''; and
(4) in subsection (g), by striking ``2012 through
2016'' each place it appears and inserting ``2017
through 2021''.
(e) Agriculture Risk Coverage.--Section 1117 of the
Agricultural Act of 2014 (7 U.S.C. 9017) is amended--
(1) in subsection (a), in the matter preceding
paragraph (1), by striking ``2023'' and inserting
``2031'';
(2) in subsection (c)--
(A) in paragraph (1), by inserting ``for each
of the 2014 through 2024 crop years and 90
percent of the benchmark revenue for each of
the 2025 through 2031 crop years'' before the
period at the end;
(B) by striking ``2023'' each place it
appears and inserting ``2031''; and
(C) in paragraph (4)(B), in the subparagraph
heading, by striking ``2023'' and inserting
``2031'';
(3) by amending subsection (d)(1)(B) to read as
follows:
``(B)(i) for each of the crop years 2014
through 2024, 10 percent of the benchmark
revenue for the crop year applicable under
subsection (c); and
``(ii) for each of the crop years 2025
through 2031, 12.5 percent of the benchmark
revenue for the crop year applicable under
subsection (c).''; and
(4) in subsections (e), (g)(5), and (i)(5), by
striking ``2023'' each place it appears and inserting
``2031''.
(f) Equitable Treatment of Certain Entities.--
(1) In general.--Section 1001 of the Food Security
Act of 1985 (7 U.S.C. 1308) is amended--
(A) in subsection (a)--
(i) by redesignating paragraph (5) as
paragraph (6); and
(ii) by inserting after paragraph (4)
the following:
``(5) Qualified pass-through entity.--The term
`qualified pass-through entity' means--
``(A) a partnership (within the meaning of
subchapter K of chapter 1 of the Internal
Revenue Code of 1986);
``(B) an S corporation (as defined in section
1361 of that Code);
``(C) a limited liability company that does
not affirmatively elect to be treated as a
corporation; and
``(D) a joint venture or general
partnership.'';
(B) in subsections (b) and (c), by striking
``except a joint venture or general
partnership'' each place it appears and
inserting ``except a qualified pass-through
entity''; and
(C) in subsection (d), by striking ``subtitle
B'' and all that follows through the end and
inserting ``title I of the Agricultural Act of
2014.''.
(2) Attribution of payments.--Section
1001(e)(3)(B)(ii) of the Food Security Act of 1985 (7
U.S.C. 1308(e)(3)(B)(ii)) is amended--
(A) in the clause heading, by striking
``joint ventures and general partnerships'' and
inserting ``qualified pass-through entities'';
(B) by striking ``a joint venture or a
general partnership'' and inserting ``a
qualified pass-through entity'';
(C) by striking ``joint ventures and general
partnerships'' and inserting ``qualified pass-
through entities''; and
(D) by striking ``the joint venture or
general partnership'' and inserting ``the
qualified pass-through entity''.
(3) Persons actively engaged in farming.--Section
1001A(b)(2) of the Food Security Act of 1985 (7 U.S.C.
1308-1(b)(2)) is amended--
(A) subparagraphs (A) and (B), by striking
``in a general partnership, a participant in a
joint venture'' each place it appears and
inserting ``a qualified pass-through entity'';
and
(B) in subparagraph (C), by striking ``a
general partnership, joint venture, or similar
entity'' and inserting ``a qualified pass-
through entity or a similar entity''.
(4) Joint and several liability.--Section 1001B(d) of
the Food Security Act of 1985 (7 U.S.C. 1308-2(d)) is
amended by striking ``partnerships and joint ventures''
and inserting ``qualified pass-through entities''.
(5) Exclusion from agi calculation.--Section 1001D(d)
of the Food Security Act of 1985 (7 U.S.C. 1308-3a(d))
is amended by striking ``, general partnership, or
joint venture'' each place it appears.
(g) Payment Limitations.--Section 1001 of the Food Security
Act of 1985 (7 U.S.C. 1308) is amended--
(1) in subsection (b)--
(A) by striking ``The'' and inserting
``Subject to subsection (i), the''; and
(B) by striking ``$125,000'' and inserting
``$155,000'';
(2) in subsection (c)--
(A) by striking ``The'' and inserting
``Subject to subsection (i), the''; and
(B) by striking ``$125,000'' and inserting
``$155,000''; and
(3) by adding at the end the following:
``(i) Adjustment.--For the 2025 crop year and each crop year
thereafter, the Secretary shall annually adjust the amounts
described in subsections (b) and (c) for inflation based on the
Consumer Price Index for All Urban Consumers published by the
Bureau of Labor Statistics of the Department of Labor.''.
(h) Adjusted Gross Income Limitation.--Section 1001D(b) of
the Food Security Act of 1985 (7 U.S.C. 1308-3a(b)) is
amended--
(1) in paragraph (1), by striking ``paragraph (3)''
and inserting ``paragraphs (3) and (4)''; and
(2) by adding at the end the following:
``(4) Exception for certain operations.--
``(A) Definitions.--In this paragraph:
``(i) Excepted payment or benefit.--
The term `excepted payment or benefit'
means--
``(I) a payment or benefit
under subtitle E of title I of
the Agricultural Act of 2014 (7
U.S.C. 9081 et seq.);
``(II) a payment or benefit
under section 196 of the
Federal Agriculture Improvement
and Reform Act of 1996 (7
U.S.C. 7333); and
``(III) a payment or benefit
described in paragraph (2)(C)
received on or after October 1,
2024.
``(ii) Farming, ranching, or
silviculture activities.--The term
`farming, ranching, or silviculture
activities' includes agritourism,
direct-to-consumer marketing of
agricultural products, the sale of
agricultural equipment by a person or
legal entity that owns such equipment,
and other agriculture-related
activities, as determined by the
Secretary.
``(B) Exception.--In the case of an excepted
payment or benefit, the limitation established
by paragraph (1) shall not apply to a person or
legal entity during a crop, fiscal, or program
year, as appropriate, if greater than or equal
to 75 percent of the average gross income of
the person or legal entity derives from
farming, ranching, or silviculture
activities.''.
(i) Marketing Loans.--
(1) Availability of nonrecourse marketing assistance
loans for loan commodities.--Section 1201(b)(1) of the
Agricultural Act of 2014 (7 U.S.C. 9031(b)(1)) is
amended by striking ``2023'' and inserting ``2031''.
(2) Loan rates for nonrecourse marketing assistance
loans.--Section 1202 of the Agricultural Act of 2014 (7
U.S.C. 9032) is amended--
(A) in subsection (b)--
(i) in the subsection heading, by
striking ``2023'' and inserting
``2025''; and
(ii) in the matter preceding
paragraph (1), by striking ``2023'' and
inserting ``2025'';
(B) by redesignating subsection (c) and (d)
as subsections (d) and (e), respectively;
(C) by inserting after subsection (b) the
following:
``(c) 2026 Through 2031 Crop Years.--For purposes of each of
the 2026 through 2031 crop years, the loan rate for a marketing
assistance loan under section 1201 for a loan commodity shall
be equal to the following:
``(1) In the case of wheat, $3.72 per bushel.
``(2) In the case of corn, $2.42 per bushel.
``(3) In the case of grain sorghum, $2.42 per bushel.
``(4) In the case of barley, $2.75 per bushel.
``(5) In the case of oats, $2.20 per bushel.
``(6) In the case of upland cotton, $0.55 per pound.
``(7) In the case of extra long staple cotton, $1.00
per pound.
``(8) In the case of long grain rice, $7.70 per
hundredweight.
``(9) In the case of medium grain rice, $7.70 per
hundredweight.
``(10) In the case of soybeans, $6.82 per bushel.
``(11) In the case of other oilseeds, $11.10 per
hundredweight for each of the following kinds of
oilseeds:
``(A) Sunflower seed.
``(B) Rapeseed.
``(C) Canola.
``(D) Safflower.
``(E) Flaxseed.
``(F) Mustard seed.
``(G) Crambe.
``(H) Sesame seed.
``(I) Other oilseeds designated by the
Secretary.
``(12) In the case of dry peas, $6.87 per
hundredweight.
``(13) In the case of lentils, $14.30 per
hundredweight.
``(14) In the case of small chickpeas, $11.00 per
hundredweight.
``(15) In the case of large chickpeas, $15.40 per
hundredweight.
``(16) In the case of graded wool, $1.60 per pound.
``(17) In the case of nongraded wool, $0.55 per
pound.
``(18) In the case of mohair, $5.00 per pound.
``(19) In the case of honey, $1.50 per pound.
``(20) In the case of peanuts, $390 per ton.'';
(D) in subsection (d) (as so redesignated),
by striking ``(a)(11) and (b)(11)'' and
inserting ``(a)(11), (b)(11), and (c)(11)'';
and
(E) by amending subsection (e) (as so
redesignated) to read as follows:
``(e) Special Rule for Seed Cotton and Corn.--
``(1) In general.--For purposes of section 1116(b)(2)
and paragraphs (1)(B)(ii) and (2)(A)(ii)(II) of section
1117(b), the loan rate shall be deemed to equal--
``(A) for seed cotton, $0.30 per pound; and
``(B) for corn, $3.30 per bushel.
``(2) Effect.--Nothing in this subsection authorizes
any nonrecourse marketing assistance loan under this
subtitle for seed cotton.''.
(3) Payment of cotton storage costs.--Section 1204(g)
of the Agricultural Act of 2014 (7 U.S.C. 9034(g)) is
amended--
(A) by striking ``Effective'' and inserting
the following:
``(1) Crop years 2014 through 2025.--Effective'';
(B) in paragraph (1) (as so designated), by
striking ``2023'' and inserting ``2025''; and
(C) by adding at the end the following:
``(2) Payment of cotton storage costs.--Effective for
each of the 2026 through 2031 crop years, the Secretary
shall make cotton storage payments for upland cotton
and extra long staple cotton available in the same
manner as the Secretary provided storage payments for
the 2006 crop of upland cotton, except that the payment
rate shall be equal to the lesser of--
``(A) the submitted tariff rate for the
current marketing year; and
``(B) in the case of storage in--
``(i) California or Arizona, a
payment rate of $4.90; and
``(ii) any other State, a payment
rate of $3.00.''.
(4) Loan deficiency payments.--
(A) Continuation.--Section 1205(a)(2)(B) of
the Agricultural Act of 2014 (7 U.S.C.
9035(a)(2)(B)) is amended by striking ``2023''
and inserting ``2031''.
(B) Payments in lieu of ldps.--Section 1206
of the Agricultural Act of 2014 (7 U.S.C. 9036)
is amended, in subsections (a) and (d), by
striking ``2023'' each place it appears and
inserting ``2031''.
(5) Special competitive provisions for extra long
staple cotton.--Section 1208(a) of the Agricultural Act
of 2014 (7 U.S.C. 9038(a)) is amended, in the matter
preceding paragraph (1), by striking ``2026'' and
inserting ``2032''.
(6) Availability of recourse loans.--Section 1209 of
the Agricultural Act of 2014 (7 U.S.C. 9039) is
amended, in subsections (a)(2), (b), and (c), by
striking ``2023'' each place it appears and inserting
``2031''.
(j) Repayment of Marketing Loans.--Section 1204 of the
Agricultural Act of 2014 (7 U.S.C. 9034) is amended--
(1) in subsection (b)--
(A) by redesignating paragraph (1) as
subparagraph (A) and indenting appropriately;
(B) in the matter preceding subparagraph (A)
(as so redesignated), by striking ``The
Secretary'' and inserting the following:
``(1) In general.--The Secretary''; and
(C) by striking paragraph (2) and inserting
the following:
``(B)(i) in the case of long grain rice and
medium grain rice, the prevailing world market
price for the commodity, as determined and
adjusted by the Secretary in accordance with
this section; or
``(ii) in the case of upland cotton, the
lowest prevailing world market price for the
commodity, as determined and adjusted by the
Secretary in accordance with this section,
during the 30-day period following the day on
which the producer repays the marketing
assistance loan.
``(2) Refund for upland cotton.--In the case of a
repayment for a marketing assistance loan for upland
cotton at a rate described in paragraph (1)(B)(ii), the
Secretary shall provide to the producer a refund (if
any) in an amount equal to the difference between the
lowest prevailing world market price described in that
paragraph and the repayment amount.'';
(2) in subsection (c)--
(A) by striking the period at the end and
inserting ``; and'';
(B) by striking ``at the loan rate'' and
inserting the following: ``at a rate that is
the lesser of--
``(1) the loan rate''; and
(C) by adding at the end the following:
``(2) the prevailing world market price for the
commodity, as determined and adjusted by the Secretary
in accordance with this section.'';
(3) in subsection (d)--
(A) in paragraph (1), by striking ``and
medium grain rice'' and inserting ``medium
grain rice, and extra long staple cotton'';
(B) by redesignating paragraphs (1) and (2)
as subparagraphs (A) and (B), respectively, and
indenting appropriately;
(C) in the matter preceding subparagraph (A)
(as so redesignated), by striking ``For
purposes'' and inserting the following:
``(1) In general.--For purposes''; and
(D) by adding at the end the following:
``(2) Upland cotton.--In the case of upland cotton,
for any period when price quotations for Middling (M)
1\3/32\-inch cotton are available, the formula under
paragraph (1)(A) shall be based on the average of the 3
lowest-priced growths that are quoted.''; and
(4) in subsection (e)--
(A) in the subsection heading, by inserting
``Extra Long Staple Cotton,'' after ``Upland
Cotton,'';
(B) in paragraph (2)--
(i) in the paragraph heading, by
inserting ``Upland'' before ``Cotton'';
and
(ii) in subparagraph (B), in the
matter preceding clause (i), by
striking ``2024'' and inserting
``2032'';
(C) by redesignating paragraph (3) as
paragraph (4); and
(D) by inserting after paragraph (2) the
following:
``(3) Extra long staple cotton.--The prevailing world
market price for extra long staple cotton determined
under subsection (d)--
``(A) shall be adjusted to United States
quality and location, with the adjustment to
include the average costs to market the
commodity, including average transportation
costs, as determined by the Secretary; and
``(B) may be further adjusted, during the
period beginning on the date of enactment of
this paragraph and ending on July 31, 2032, if
the Secretary determines the adjustment is
necessary--
``(i) to minimize potential loan
forfeitures;
``(ii) to minimize the accumulation
of stocks of extra long staple cotton
by the Federal Government;
``(iii) to ensure that extra long
staple cotton produced in the United
States can be marketed freely and
competitively, both domestically and
internationally; and
``(iv) to ensure an appropriate
transition between current-crop and
forward-crop price quotations, except
that the Secretary may use forward-crop
price quotations prior to July 31 of a
marketing year only if--
``(I) there are insufficient
current-crop price quotations;
and
``(II) the forward-crop price
quotation is the lowest such
quotation available.''.
(k) Economic Adjustment Assistance for Textile Mills.--
Section 1207(c) of the Agricultural Act of 2014 (7 U.S.C.
9037(c)) is amended by striking paragraph (2) and inserting the
following:
``(2) Value of assistance.--The value of the
assistance provided under paragraph (1) shall be--
``(A) for the period beginning on August 1,
2013, and ending on July 31, 2025, 3 cents per
pound; and
``(B) beginning on August 1, 2025, 5 cents
per pound.''.
(l) Sugar Program Updates.--
(1) Loan rate modifications.--Section 156 of the
Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7272) is amended--
(A) in subsection (a)--
(i) in paragraph (4), by striking
``and'' at the end;
(ii) in paragraph (5), by striking
``2023 crop years.'' and inserting
``2024 crop years; and''; and
(iii) by adding at the end the
following:
``(6) 24.00 cents per pound for raw cane sugar for
each of the 2025 through 2031 crop years.'';
(B) in subsection (b)--
(i) in paragraph (1), by striking
``and'' at the end;
(ii) in paragraph (2), by striking
``2023 crop years.'' and inserting
``2024 crop years; and''; and
(iii) by adding at the end the
following:
``(3) a rate that is equal to 136.55 percent of the
loan rate per pound of raw cane sugar under subsection
(a)(6) for each of the 2025 through 2031 crop years.'';
and
(C) in subsection (i), by striking ``2023''
and inserting ``2031''.
(2) Adjustments to commodity credit corporation
storage rates.--Section 167 of the Federal Agriculture
Improvement and Reform Act of 1996 (7 U.S.C. 7287) is
amended--
(A) by striking subsection (a) and inserting
the following:
``(a) In General.--Notwithstanding any other provision of
law, for the 2025 crop year and each subsequent crop year, the
Commodity Credit Corporation shall establish rates for the
storage of forfeited sugar in an amount that is not less than--
``(1) in the case of refined sugar, 34 cents per
hundredweight per month; and
``(2) in the case of raw cane sugar, 27 cents per
hundredweight per month.''; and
(B) in subsection (b)--
(i) in the subsection heading, by
striking ``Subsequent'' and inserting
``Prior''; and
(ii) by striking ``and subsequent''
and inserting ``through 2024''.
(3) Modernizing beet sugar allotments.--
(A) Sugar estimates.--Section 359b(a)(1) of
the Agricultural Adjustment Act of 1938 (7
U.S.C. 1359bb(a)(1)) is amended by striking
``2023'' and inserting ``2031''.
(B) Allocation to processors.--Section
359c(g)(2) of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1359cc(g)(2)) is amended--
(i) by striking ``In the case'' and
inserting the following:
``(A) In general.--Except as provided in
subparagraph (B), in the case''; and
(ii) by adding at the end the
following:
``(B) Exception.--If the Secretary makes an
upward adjustment under paragraph (1)(A), in
adjusting allocations among beet sugar
processors, the Secretary shall give priority
to beet sugar processors with available
sugar.''.
(C) Timing of reassignment.--Section
359e(b)(2) of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1359ee(b)(2)) is amended--
(i) by redesignating subparagraphs
(A) through (C) as clauses (i) through
(iii), respectively, and indenting
appropriately;
(ii) in the matter preceding clause
(i) (as so redesignated), by striking
``If the Secretary determines that a
sugar beet processor who has been
allocated a share of the beet sugar
allotment will be unable to market that
allocation'' and inserting the
following:
``(A) In general.--If the Secretary
determines that a sugar beet processor who has
been allocated a share of the beet sugar
allotment for the crop year will be unable to
market that allocation''; and
(iii) by adding at the end the
following:
``(B) Timing.--In carrying out subparagraph
(A), the Secretary shall--
``(i) make an initial determination
following the publication of the World
Agricultural Supply and Demand
Estimates (in this subparagraph
referred to as `WASDE') approved by the
World Agricultural Outlook Board for
the month of January that is applicable
to the crop year for which a
determination under subparagraph (A) is
made; and
``(ii) provide for an initial
reassignment under subparagraph (A)(i)
not later than 30 days after the date
of the announcement of such WASDE.''.
(4) Reallocations of tariff-rate quota shortfall.--
Section 359k of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1359kk) is amended by adding at the end the
following:
``(c) Reallocation.--
``(1) Initial reallocation.--Subject to paragraph
(3), following the establishment of the tariff-rate
quotas under subsection (a) for a quota year, the
United States Trade Representative, in consultation
with the Secretary, shall--
``(A) determine which countries do not intend
to fulfill their allocation for the quota year;
and
``(B) reallocate any forecasted shortfall in
the fulfillment of the tariff-rate quotas as
soon as practicable.
``(2) Subsequent reallocation.--Subject to paragraph
(3), not later than March 1 of a quota year, the United
States Trade Representative, in consultation with the
Secretary, shall reallocate any additional forecasted
shortfall in the fulfillment of the tariff-rate quotas
for raw cane sugar established under subsection (a)(1)
for that quota year.
``(3) Cessation of effectiveness.--Paragraphs (1) and
(2) shall cease to be in effect if--
``(A) the Agreement Suspending the
Countervailing Duty Investigation on Sugar from
Mexico, signed December 19, 2014, is
terminated; and
``(B) no countervailing duty order under
subtitle A of title VII of the Tariff Act of
1930 (19 U.S.C. 1671 et seq.) is in effect with
respect to sugar from Mexico.
``(d) Refined Sugar.--
``(1) Definition of domestic sugar industry.--In this
subsection, the term `domestic sugar industry' means
domestic--
``(A) sugar beet producers and processors;
``(B) producers and processors of sugar cane;
and
``(C) refiners of raw cane sugar.
``(2) Study required.--
``(A) In general.--Not later than 180 days
after the date of enactment of this subsection,
the Secretary shall conduct a study on whether
the establishment of additional terms and
conditions with respect to refined sugar
imports is necessary and appropriate.
``(B) Elements.--In conducting the study
under subparagraph (A), the Secretary shall
examine the following:
``(i) The need for--
``(I) defining `refined
sugar' as having a minimum
polarization of 99.8 degrees or
higher;
``(II) establishing a
standard for color- or
reflectance-based units for
refined sugar such as those
utilized by the International
Commission of Uniform Methods
of Sugar Analysis;
``(III) prescribing
specifications for packaging
type for refined sugar;
``(IV) prescribing
specifications for
transportation modes for
refined sugar;
``(V) requiring affidavits or
other evidence that sugar
imported as refined sugar will
not undergo further refining in
the United States;
``(VI) prescribing
appropriate terms and
conditions to avoid the
circumvention of Federal laws
relating to any sugar imports;
and
``(VII) establishing other
definitions, terms and
conditions, or other
requirements.
``(ii) The potential impact of
modifications described in each of
subclauses (I) through (VII) of clause
(i) on the domestic sugar industry.
``(iii) Whether, based on the needs
described in clause (i) and the impact
described in clause (ii), the
establishment of additional terms and
conditions is appropriate.
``(C) Consultation.--In conducting the study
under subparagraph (A), the Secretary shall
consult with representatives of the domestic
sugar industry, users of refined sugar, and
relevant State and Federal agencies.
``(D) Report.--Not later than 1 year after
the date of enactment of this subsection, the
Secretary shall submit to the Committee on
Agriculture of the House of Representatives and
the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report that describes
the findings of the study conducted under
subparagraph (A).
``(3) Establishment of additional terms and
conditions permitted.--
``(A) In general.--Based on the findings in
the report submitted under paragraph (2)(D),
and after providing notice to the Committee on
Agriculture of the House of Representatives and
the Committee on Agriculture, Nutrition, and
Forestry of the Senate, the Secretary may issue
regulations in accordance with subparagraph (B)
to establish additional terms and conditions
with respect to refined sugar imports that are
necessary and appropriate.
``(B) Promulgation of regulations.--The
Secretary may issue regulations under
subparagraph (A) if the regulations--
``(i) do not have an adverse impact
on the domestic sugar industry; and
``(ii) are consistent with the
requirements of this part, section 156
of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7272),
and obligations under international
trade agreements that have been
approved by Congress.''.
(5) Clarification of tariff-rate quota adjustments.--
Section 359k(b)(1) of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1359kk(b)(1)) is amended, in the
matter preceding subparagraph (A)--
(A) by striking ``Before'' and inserting
``Notwithstanding any other provision of law,
before''; and
(B) by striking ``if there is an'' and
inserting ``for the sole purpose of responding
directly to an''.
(6) Period of effectiveness.--Section 359l(a) of the
Agricultural Adjustment Act of 1938 (7 U.S.C.
1359ll(a)) is amended by striking ``2023'' and
inserting ``2031''.
(m) Dairy Policy Updates.--
(1) Dairy margin coverage production history.--
(A) Definition.--Section 1401(8) of the
Agricultural Act of 2014 (7 U.S.C. 9051(8)) is
amended by striking ``when the participating
dairy operation first registers to participate
in dairy margin coverage''.
(B) Production history of participating dairy
operations.--Section 1405 of the Agricultural
Act of 2014 (7 U.S.C. 9055) is amended--
(i) by amending subsection (a) to
read as follows:
``(a) Production History.--Except as provided in subsection
(b), the production history of a dairy operation for dairy
margin coverage is equal to the highest annual milk marketings
of the participating dairy operation during any one of the
2021, 2022, or 2023 calendar years.''; and
(ii) by amending subsection (b) to
read as follows:
``(b) Election by New Dairy Operations.--In the case of a
participating dairy operation that has been in operation for
less than a year, the participating dairy operation shall elect
1 of the following methods for the Secretary to determine the
production history of the participating dairy operation:
``(1) The volume of the actual milk marketings for
the months the participating dairy operation has been
in operation extrapolated to a yearly amount.
``(2) An estimate of the actual milk marketings of
the participating dairy operation based on the herd
size of the participating dairy operation relative to
the national rolling herd average data published by the
Secretary.''.
(2) Dairy margin coverage payments.--Section
1406(a)(1)(C) of the Agricultural Act of 2014 (7 U.S.C.
9056(a)(1)(C)) is amended by striking ``5,000,000'' and
inserting ``6,000,000'' each place it appears.
(3) Premiums for dairy margins.--
(A) Tier i.--Section 1407(b) of the
Agricultural Act of 2014 (7 U.S.C. 9057(b)) is
amended--
(i) in the heading, by striking
``5,000,000'' and inserting
``6,000,000''; and
(ii) in paragraph (1), by striking
``5,000,000'' and inserting
``6,000,000''.
(B) Tier ii.--Section 1407(c) of the
Agricultural Act of 2014 (7 U.S.C. 9057(c)) is
amended--
(i) in the heading, by striking
``5,000,000'' and inserting
``6,000,000''; and
(ii) in paragraph (1), by striking
``5,000,000'' and inserting
``6,000,000''.
(C) Premium discounts.--Section 1407(g) of
the Agricultural Act of 2014 (7 U.S.C. 9057(g))
is amended--
(i) in paragraph (1)--
(I) by striking ``2019
through 2023'' and inserting
``2026 through 2031''; and
(II) by striking ``January
2019'' and inserting ``January
2026''; and
(ii) in paragraph (2), by striking
``2023'' each place it appears and
inserting ``2031''.
(4) Duration.--Section 1409 of the Agricultural Act
of 2014 (7 U.S.C. 9059) is amended by striking ``2025''
and inserting ``2031''.
(n) Suspension of Permanent Price Support Authority.--Section
1602 of the Agricultural Act of 2014 (7 U.S.C. 9092) is amended
by striking ``2023'' each place it appears and inserting
``2031''.
(o) Implementation.--Section 1614(c) of the Agricultural Act
of 2014 (7 U.S.C. 9097(c)) is amended by adding at the end the
following:
``(5) Fiscal year 2025 reconciliation.--The Secretary
shall make available to the Farm Service Agency to
carry out section 10101 of the Act titled `An Act to
provide for reconciliation pursuant to title II of H.
Con. Res. 14', and the amendments made by that section,
$50,000,000, to remain available until expended, of
which--
``(A) not less than $5,000,000 shall be used
to carry out paragraphs (3) and (4) of
subsection (b);
``(B) $3,000,000 shall be used for activities
described in paragraph (3)(A) of this
subsection;
``(C) $3,000,000 shall be used for activities
described in paragraph (3)(B) of this
subsection; and
``(D) $10,000,000 shall be used to--
``(i) carry out mandatory surveys of
dairy production cost and product yield
information to be reported by
manufacturers required to report under
section 273 of the Agricultural
Marketing Act of 1946 (7 U.S.C. 1637b),
for all products processed in the same
facility or facilities; and
``(ii) publish the results of such
surveys biennially.''.
(p) Livestock Safety Net Updates.--
(1) In general.--Section 1501(b) of the Agricultural
Act of 2014 (7 U.S.C. 9081(b)) is amended--
(A) by amending paragraph (2) to read as
follows:
``(2) Payment rates.--
``(A) Losses due to predation.--Indemnity
payments to an eligible producer on a farm
under paragraph (1)(A) shall be made at a rate
of 100 percent of the market value of the
affected livestock on the applicable date, as
determined by the Secretary.
``(B) Losses due to adverse weather or
disease.--Indemnity payments to an eligible
producer on a farm under subparagraph (B) or
(C) of paragraph (1) shall be made at a rate of
75 percent of the market value of the affected
livestock on the applicable date, as determined
by the Secretary.
``(C) Determination of market value.--In
determining the market value described in
subparagraphs (A) and (B), the Secretary may
consider the ability of eligible producers to
document regional price premiums for affected
livestock that exceed the national average
market price for those livestock.
``(D) Applicable date defined.--In this
paragraph, the term `applicable date' means,
with respect to livestock, as applicable--
``(i) the day before the date of
death of the livestock; or
``(ii) the day before the date of the
event that caused the harm to the
livestock that resulted in a reduced
sale price.''; and
(B) by adding at the end the following:
``(5) Additional payment for unborn livestock.--
``(A) In general.--In the case of unborn
livestock death losses incurred on or after
January 1, 2024, the Secretary shall make an
additional payment to eligible producers on
farms that have incurred such losses in excess
of the normal mortality due to a condition
specified in paragraph (1).
``(B) Payment rate.--Additional payments
under subparagraph (A) shall be made at a
rate--
``(i) determined by the Secretary;
and
``(ii) less than or equal to 85
percent of the payment rate established
with respect to the lowest weight class
of the livestock, as determined by the
Secretary, acting through the
Administrator of the Farm Service
Agency.
``(C) Payment amount.--The amount of a
payment to an eligible producer that has
incurred unborn livestock death losses shall be
equal to the payment rate determined under
subparagraph (B) multiplied, in the case of
livestock described in--
``(i) subparagraph (A), (B), or (F)
of subsection (a)(4), by 1;
``(ii) subparagraph (D) of such
subsection, by 2;
``(iii) subparagraph (E) of such
subsection, by 12; and
``(iv) subparagraph (G) of such
subsection, by the average number of
birthed animals (for one gestation
cycle) for the species of each such
livestock, as determined by the
Secretary.
``(D) Unborn livestock death losses
defined.--In this paragraph, the term `unborn
livestock death losses' means losses of any
livestock described in subparagraph (A), (B),
(D), (E), (F), or (G) of subsection (a)(4) that
was gestating on the date of the death of the
livestock.''.
(2) Livestock forage disaster program.--Section
1501(c)(3)(D)(ii)(I) of the Agricultural Act of 2014 (7
U.S.C. 9081(c)(3)(D)(ii)(I)) is amended--
(A) by striking ``1 monthly payment'' and
inserting ``2 monthly payments''; and
(B) by striking ``county for at least 8
consecutive'' and inserting the following:
``county for not less than--
``(aa) 4 consecutive
weeks during the normal
grazing period for the
county, as determined
by the Secretary, shall
be eligible to receive
assistance under this
paragraph in an amount
equal to 1 monthly
payment using the
monthly payment rate
determined under
subparagraph (B); or
``(bb) any of the 7
of the previous 8
consecutive''.
(3) Emergency assistance for livestock, honey bees,
and farm-raised fish.--Section 1501(d) of the
Agricultural Act of 2014 (7 U.S.C. 9081(d)) is amended
by adding at the end the following:
``(5) Assistance for losses due to bird
depredation.--
``(A) Payments.--Eligible producers on a farm
of farm-raised fish, including fish grown as
food for human consumption, shall be eligible
to receive payments under this subsection to
aid in the reduction of losses due to
piscivorous birds.
``(B) Payment rate.--
``(i) In general.--The payment rate
for payments under subparagraph (B)
shall be determined by the Secretary,
taking into account--
``(I) costs associated with
the deterrence of piscivorous
birds;
``(II) the value of lost fish
and revenue due to bird
depredation; and
``(III) costs associated with
disease loss from bird
depredation.
``(ii) Minimum rate.--The payment
rate for payments under subparagraph
(B) shall be not less than $600 per
acre of farm-raised fish.
``(C) Payment amount.--The amount of a
payment under subparagraph (B) shall be the
product obtained by multiplying--
``(i) the applicable payment rate
under subparagraph (C); and
``(ii) 85 percent of the total number
of acres of farm-raised fish farms that
the eligible producer has in production
for the calendar year.''.
(4) Tree assistance program.--Section 1501(e) of the
Agricultural Act of 2014 (7 U.S.C. 9081(e)) is
amended--
(A) in paragraph (2)(B), by striking ``15
percent (adjusted for normal mortality)'' and
inserting ``normal mortality''; and
(B) in paragraph (3)--
(i) in subparagraph (A)(i), by
striking ``15 percent mortality
(adjusted for normal mortality)'' and
inserting ``normal mortality''; and
(ii) in subparagraph (B)--
(I) by striking ``50'' and
inserting ``65''; and
(II) by striking ``15 percent
damage or mortality (adjusted
for normal tree damage and
mortality)'' and inserting
``normal tree damage or
mortality''.
(q) Emergency Assistance for Honeybees.--In determining
honeybee colony losses eligible for assistance under section
1501(d) of the Agricultural Act of 2014 (7 U.S.C. 9081(d)), the
Secretary shall utilize a normal mortality rate of 15 percent.
(r) Beginning and Veteran Farmer and Rancher Benefit.--
(1) Definitions.--
(A) In general.--Section 502(b) of the
Federal Crop Insurance Act (7 U.S.C. 1502(b))
is amended--
(i) in paragraph (3), by striking
``5'' and inserting ``10''; and
(ii) in paragraph (14)(B)--
(I) in clause (i), by adding
``or'' at the end after the
semicolon;
(II) in clause (ii), by
striking ``5 years; or'' and
inserting ``10 years.''; and
(III) in clause (iii), by
striking ``5-year'' and
inserting ``10-year''.
(B) Conforming amendment.--Section 522(c)(7)
of the Federal Crop Insurance Act (7 U.S.C.
1522(c)(7)) is amended by striking subparagraph
(F).
(2) Increase in assistance.--Section 508(e)(8) of the
Federal Crop Insurance Act (7 U.S.C. 1508(e)(8)) is
amended--
(A) by striking ``Notwithstanding'' and
inserting the following:
``(A) In general.--Notwithstanding'';
(B) in subparagraph (A) (as so designated),
by striking ``is 10 percentage points greater
than'' and inserting ``is the number of
percentage points specified in subparagraph (B)
greater than''; and
(C) by adding at the end the following:
``(B) Percentage points adjustments.--The
percentage points referred to in subparagraph
(A) are the following:
``(i) For each of the first and
second reinsurance years that a
beginning farmer or rancher or veteran
farmer or rancher participates as a
beginning farmer or rancher or veteran
farmer or rancher, respectively, in the
applicable policy or plan of insurance,
15 percentage points.
``(ii) For the third reinsurance year
that a beginning farmer or rancher or
veteran farmer or rancher participates
as a beginning farmer or rancher or
veteran farmer or rancher,
respectively, in the applicable policy
or plan of insurance, 13 percentage
points.
``(iii) For the fourth reinsurance
year that a beginning farmer or rancher
or veteran farmer or rancher
participates as a beginning farmer or
rancher or veteran farmer or rancher,
respectively, in the applicable policy
or plan of insurance, 11 percentage
points.
``(iv) For each of the fifth through
tenth reinsurance years that a
beginning farmer or rancher or veteran
farmer or rancher participates as a
beginning farmer or rancher or veteran
farmer or rancher, respectively, in the
applicable policy or plan of insurance,
10 percentage points.''.
(s) Area-based Crop Insurance Coverage and Affordability.--
(1) Coverage level.--Section 508(c)(4) of the Federal
Crop Insurance Act (7 U.S.C. 1508(c)(4)) is amended--
(A) by amending subparagraph (A)(ii) to read
as follows:
``(ii) may be purchased at any level
not to exceed--
``(I) in the case of the
individual yield or revenue
coverage, 85 percent;
``(II) in the case of
individual yield or revenue
coverage aggregated across
multiple commodities, 90
percent; and
``(III) in the case of area
yield or revenue coverage (as
determined by the Corporation),
95 percent.''; and
(B) in subparagraph (C)--
(i) in clause (ii), by striking
``14'' and inserting ``10''; and
(ii) in clause (iii)(I), by striking
``86'' and inserting ``90''.
(2) Premium cost share.--Section 508(e)(2)(H)(i) of
the Federal Crop Insurance Act (7 U.S.C.
1508(e)(2)(H)(i)) is amended by striking ``65'' and
inserting ``80''.
(t) Premium Support.--Section 508(e)(2) of the Federal Crop
Insurance Act (7 U.S.C. 1508(e)(2)) is amended--
(1) in subparagraph (C)(i), by striking ``64'' and
inserting ``69'';
(2) in subparagraph (D)(i), by striking ``59'' and
inserting ``64'';
(3) in subparagraph (E)(i), by striking ``55'' and
inserting ``60'';
(4) in subparagraph (F)(i), by striking ``48'' and
inserting ``51''; and
(5) in subparagraph (G)(i), by striking ``38'' and
inserting ``41''.
(u) Administrative and Operating Expense Adjustments.--
Section 508(k) of the Federal Crop Insurance Act (7 U.S.C.
1508(k)) is amended by adding at the end the following:
``(10) Additional expenses.--
``(A) In general.--Beginning with the 2026
reinsurance year and for each reinsurance year
thereafter, in addition to the terms and
conditions of the Standard Reinsurance
Agreement, to cover additional expenses for
loss adjustment procedures, the Corporation
shall pay an additional administrative and
operating expense subsidy to approved insurance
providers for eligible contracts.
``(B) Payment amount.--In the case of an
eligible contract, the payment to an approved
insurance provider required under subparagraph
(A) shall be the amount equal to 6 percent of
the net book premium.
``(C) Definitions.--In this paragraph:
``(i) Eligible state.--The term
`eligible State' means a State--
``(I) identified in State
Group 2 or State Group 3 (as
defined in the Standard
Reinsurance Agreement for
reinsurance year 2026); and
``(II) in which, with respect
to an insurance year, the loss
ratio for eligible contracts is
greater than 120 percent of the
total net book premium written
by all approved insurance
providers.
``(ii) Eligible contracts.--The term
`eligible contract'--
``(I) means a crop insurance
contract entered into by an
approved insurance provider in
an eligible State; and
``(II) does not include a
contract for--
``(aa) catastrophic
risk protection under
subsection (b);
``(bb) an area-based
plan of insurance or
similar plan of
insurance, as
determined by the
Corporation; or
``(cc) a policy under
which an approved
insurance provider does
not incur loss
adjustment expenses, as
determined by the
Corporation.
``(11) Specialty crops.--
``(A) Minimum reimbursement.--Beginning with
the 2026 reinsurance year and for each
reinsurance year thereafter, the rate of
reimbursement to approved insurance providers
and agents for administrative and operating
expenses with respect to crop insurance
contracts covering agricultural commodities
described in section 101 of title I of the
Specialty Crops Competitiveness Act of 2004 (7
U.S.C. 1621 note) shall be equal to or greater
than the percent that is the greater of the
following:
``(i) 17 percent of the premium used
to define loss ratio.
``(ii) The percent of the premium
used to define loss ratio that is
otherwise applicable for the
reinsurance year under the terms of the
Standard Reinsurance Agreement in
effect for the reinsurance year.
``(B) Other contracts.--In carrying out
subparagraph (A), the Corporation shall not
reduce, with respect to any reinsurance year,
the amount or the rate of reimbursement to
approved insurance providers and agents under
the Standard Reinsurance Agreement described in
clause (ii) of such subparagraph for
administrative and operating expenses with
respect to contracts covering agricultural
commodities that are not subject to such
subparagraph.
``(C) Administration.--The requirements of
this paragraph and the adjustments made
pursuant to this paragraph shall not be
considered a renegotiation under paragraph
(8)(A).
``(12) A&O inflation adjustment.--
``(A) In general.--Subject to subparagraph
(B), for the 2026 reinsurance year, and each
reinsurance year thereafter, the Corporation
shall increase the total administrative and
operating expense reimbursements otherwise
required under the Standard Reinsurance
Agreement in effect for the reinsurance year in
order to account for inflation, in a manner
consistent with the increases provided with
respect to the 2011 through 2015 reinsurance
years under the enclosure included in Risk
Management Agency Bulletin numbered MGR-10-007
and dated June 30, 2010.
``(B) Special rule for 2026 reinsurance
year.--The increase under subparagraph (A) for
the 2026 reinsurance year shall not exceed the
percentage change for the preceding reinsurance
year included in the Consumer Price Index for
All Urban Consumers published by the Bureau of
Labor Statistics of the Department of Labor.
``(C) Administration.--An increase under
subparagraph (A)--
``(i) shall apply with respect to all
contracts covering agricultural
commodities that were subject to an
increase during the period of the 2011
through 2015 reinsurance years under
the enclosure referred to in that
subparagraph; and
``(ii) shall not be considered to be
a renegotiation of the Standard
Reinsurance Agreement for purposes of
paragraph (8)(A).''.
(v) Program Compliance and Integrity.--Section 515(l)(2) of
the Federal Crop Insurance Act (7 U.S.C. 1515(l)(2)) is amended
by striking ``than'' and all that follows through the period at
the end and inserting the following: ``than--
``(A) $4,000,000 for each of fiscal years
2009 through 2025; and
``(B) $6,000,000 for fiscal year 2026 and
each subsequent fiscal year.''.
(w) Reviews, Compliance, and Integrity.--Section
516(b)(2)(C)(i) of the Federal Crop Insurance Act (7 U.S.C.
1516(b)(2)(C)(i)) is amended by striking ``each fiscal year''
and inserting ``each of fiscal years 2014 through 2025 and
$10,000,000 for fiscal year 2026 and each fiscal year
thereafter''.
(x) Poultry Insurance Pilot Program.--Section 523 of the
Federal Crop Insurance Act (7 U.S.C. 1523) is amended by adding
at the end the following:
``(j) Poultry Insurance Pilot Program.--
``(1) In general.--Notwithstanding subsection (a)(2),
the Corporation shall establish a pilot program under
which contract poultry growers, including growers of
broilers and laying hens, may elect to receive index-
based insurance from extreme weather-related risk
resulting in increased utility costs (including costs
of natural gas, propane, electricity, water, and other
appropriate costs, as determined by the Corporation)
associated with poultry production.
``(2) Stakeholder engagement.--The Corporation shall
engage with poultry industry stakeholders in
establishing the pilot program under paragraph (1).
``(3) Location.--The pilot program established under
paragraph (1) shall be conducted in a sufficient number
of counties to provide a comprehensive evaluation of
the feasibility, effectiveness, and demand among
producers in the top poultry producing States,
including Alabama, Arkansas, and Mississippi, as
determined by the Corporation.
``(4) Approval of policy or plan.--Notwithstanding
section 508(l), the Board shall approve a policy or
plan of insurance based on the pilot program under
paragraph (1)--
``(A) in accordance with section 508(h); and
``(B) not later than 24 months after the date
of enactment of this subsection.''.
SEC. 10102. CONSERVATION.
(a) Grassroots Source Water Protection Program.--Section
1240O(b) of the Food Security Act of 1985 (16 U.S.C. 3839bb-
2(b)) is amended--
(1) in paragraph (1), by striking ``2023'' and
inserting ``2031''; and
(2) in paragraph (3)--
(A) in subparagraph (A), by striking the
``and'' at the end;
(B) in subparagraph (B), by striking the
period at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(C) $1,000,000 beginning in fiscal year
2026, to remain available until expended.''.
(b) Voluntary Public Access and Habitat Incentive Program.--
Section 1240R(f)(1) of the Food Security Act of 1985 (16 U.S.C.
3839bb-5(f)(1)) is amended--
(1) by striking the ``and'' after ``2023,''; and
(2) by inserting ``, and $10,000,000 for each of
fiscal years 2025 through 2031'' before the period at
the end.
(c) Feral Swine Eradication and Control Pilot Program.--
Section 2408(g)(1) of the Agriculture Improvement Act of 2018
(7 U.S.C. 8351 note; Public Law 115-334) is amended--
(1) by striking ``and'' and inserting a comma; and
(2) by inserting ``, and $15,000,000 for each of
fiscal years 2025 through 2031'' before the period at
the end.
(d) Funding.--
(1) In general.--Section 1241(a) of the Food Security
Act of 1985 (16 U.S.C. 3841(a)) is amended--
(A) in paragraph (2), by striking
subparagraphs (A) through (F) and inserting the
following:
``(A) $625,000,000 for fiscal year 2026;
``(B) $650,000,000 for fiscal year 2027;
``(C) $675,000,000 for fiscal year 2028;
``(D) $700,000,000 for fiscal year 2029;
``(E) $700,000,000 for fiscal year 2030; and
``(F) $700,000,000 for fiscal year 2031.'';
and
(B) in paragraph (3)--
(i) in subparagraph (A), by striking
clauses (i) through (v) and inserting
the following:
``(i) $2,655,000,000 for fiscal year
2026;
``(ii) $2,855,000,000 for fiscal year
2027;
``(iii) $3,255,000,000 for fiscal
year 2028;
``(iv) $3,255,000,000 for fiscal year
2029;
``(v) $3,255,000,000 for fiscal year
2030; and
``(vi) $3,255,000,000 for fiscal year
2031; and''; and
(ii) in subparagraph (B), by striking
clauses (i) through (v) and inserting
the following:
``(i) $1,300,000,000 for fiscal year
2026;
``(ii) $1,325,000,000 for fiscal year
2027;
``(iii) $1,350,000,000 for fiscal
year 2028;
``(iv) $1,375,000,000 for fiscal year
2029;
``(v) $1,375,000,000 for fiscal year
2030; and
``(vi) $1,375,000,000 for fiscal year
2031.''.
(2) Regional conservation partnership program.--
Section 1271D of the Food Security Act of 1985 (16
U.S.C. 3871d) is amended by striking subsection (a) and
inserting the following:
``(a) Availability of Funding.--Of the funds of the Commodity
Credit Corporation, the Secretary shall use to carry out the
program, to the maximum extent practicable--
``(1) $425,000,000 for fiscal year 2026;
``(2) $450,000,000 for fiscal year 2027;
``(3) $450,000,000 for fiscal year 2028;
``(4) $450,000,000 for fiscal year 2029;
``(5) $450,000,000 for fiscal year 2030; and
``(6) $450,000,000 for fiscal year 2031.''.
(3) Watershed protection and flood prevention.--
Section 15 of the Watershed Protection and Flood
Prevention Act (16 U.S.C. 1012a) is amended--
(A) by striking ``$50,000,000 for fiscal year
2019'' and inserting ``$150,000,000 for fiscal
year 2026''; and
(B) by inserting ``, to remain available
until expended'' before the period at the end.
(4) Rescission.--The unobligated balances of amounts
appropriated by section 21001(a) of Public Law 117-169
(136 Stat. 2015) are rescinded.
SEC. 10103. TRADE.
Section 203(f) of the Agricultural Trade Act of 1978 (7
U.S.C. 5623(f)) is amended--
(1) in paragraph (2)--
(A) by striking ``For each of fiscal years''
and inserting ``(A) in general.--For each of
fiscal years''; and
(B) by adding at the end the following new
subparagraph:
``(B) Fiscal years 2026 through 2031.--For
each of fiscal years 2026 through 2031, of the
funds of, or an equal value of commodities
owned by, the Commodity Credit Corporation, the
Secretary shall use to carry out this section
$489,500,000, to remain available until
expended.'';
(2) by redesignating paragraphs (4) and (5) as
paragraphs (5) and (6), respectively;
(3) by inserting after paragraph (3) the following
new paragraph:
``(4) Allocations for fiscal years 2026 through
2031.--
``(A) In general.--For each of fiscal years
2026 through 2031, the Secretary shall allocate
funds to carry out this section in accordance
with the following:
``(i) Market access program.--For
market access activities authorized
under subsection (b), of the funds of,
or an equal value of commodities owned
by, the Commodity Credit Corporation,
not less than $400,000,000 for each
fiscal year.
``(ii) Foreign market development
cooperator program.--To carry out
subsection (c), of the funds of, or an
equal value of commodities owned by,
the Commodity Credit Corporation, not
less than $69,000,000 for each fiscal
year.
``(iii) E (kika) de la garza emerging
markets program.--To provide assistance
under subsection (d), of the funds of,
or an equal value of commodities owned
by, the Commodity Credit Corporation,
not more than $8,000,000 for each
fiscal year.
``(iv) Technical assistance for
specialty crops.--To carry out
subsection (e), of the funds of, or an
equal value of the commodities owned
by, the Commodity Credit Corporation,
$9,000,000 for each fiscal year.
``(v) Priority trade fund.--
``(I) In general.--In
addition to the amounts
allocated under clauses (i)
through (iv), and
notwithstanding any limitations
in those clauses, as determined
by the Secretary, for 1 or more
programs under this section for
authorized activities to
access, develop, maintain, and
expand markets for United
States agricultural
commodities, $3,500,000 for
each fiscal year.
``(II) Considerations.--In
allocating funds made available
under subclause (I), the
Secretary may consider
providing a greater allocation
to 1 or more programs under
this section for which the
amounts requested under
applications exceed available
funding for the 1 or more
programs.
``(B) Reallocation.--Any funds allocated
under clauses (i) through (iv) of subparagraph
(A) that remain unobligated one year after the
end of the fiscal year in which they are first
made available shall be reallocated to the
priority trade fund under subparagraph (A)(v).
To the maximum extent practicable, the
Secretary shall allocate such reallocated funds
to support exports of those types of United
States agricultural commodities eligible for
assistance under the program for which the
funds were originally allocated under
subparagraph (A).''; and
(4) in paragraph (6), as so redesignated, by
inserting ``, paragraph (4)(A)(v),'' after ``paragraph
(3)(A)(v)''.
SEC. 10104. RESEARCH.
(a) Urban, Indoor, and Other Emerging Agricultural Production
Research, Education, and Extension Initiative.--Section
1672E(d)(1)(B) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 5925g(d)(1)(B)) is amended by
striking ``fiscal year 2024, to remain available until
expended'' and inserting ``each of fiscal years 2024 through
2031''.
(b) Foundation for Food and Agriculture Research.--Section
7601(g)(1)(A) of the Agricultural Act of 2014 (7 U.S.C.
5939(g)(1)(A)) is amended adding at the end the following:
``(iv) Further funding.--Of the funds
of the Commodity Credit Corporation,
the Secretary shall transfer to the
Foundation to carry out this section,
to remain available until expended, not
later than 30 days after the date of
enactment of this clause,
$37,000,000.''.
(c) Scholarships for Students at 1890 Institutions.--Section
1446 of the National Agricultural Research, Extension, and
Teaching Policy Act of 1977 (7 U.S.C. 3222a) is amended--
(1) in subsection (a)--
(A) by striking paragraph (3); and
(B) by redesignating paragraph (4) as
paragraph (3); and
(2) in subsection (b), by amending paragraph (1) to
read as follows:
``(1) Mandatory funding.--Of the funds of the
Commodity Credit Corporation, the Secretary shall make
available to carry out this section $60,000,000 for
fiscal year 2026, to remain available until
expended.''.
(d) Assistive Technology Program for Farmers With
Disabilities.--Section 1680(c) of the Food, Agriculture,
Conservation, and Trade Act of 1990 (7 U.S.C. 5933(c)) is
amended--
(1) in the subsection heading, by striking
``Authorization of Appropriations'' and inserting
``Funding'';
(2) by redesignating paragraphs (1) and (2) as
paragraphs (2) and (3), respectively; and
(3) by inserting before paragraph (2), as so
redesignated, the following:
``(1) Mandatory funding.--Of the funds of the
Commodity Credit Corporation, the Secretary shall use
to carry out this section $8,000,000, to remain
available until expended.''; and
(4) in paragraph (2), as so redesignated--
(A) in the paragraph heading, by striking
``In general'' and inserting ``Authorization of
appropriations''; and
(B) by striking ``Subject to paragraph (2)''
and inserting ``Subject to paragraph (3)''.
(e) Specialty Crop Research Initiative.--Section 412(k)(1)(B)
of the Agricultural Research, Extension, and Education Reform
Act of 1998 (7 U.S.C. 7632(k)(1)(B)) is amended by striking
``section $80,000,000 for fiscal year 2014'' and inserting the
following: ``section--
``(i) $80,000,000 for each of fiscal
years 2014 through 2025; and
``(ii) $175,000,000 for fiscal year
2026''.
(f) Research Facilities Act.--Section 6 of the Research
Facilities Act (7 U.S.C. 390d) is amended--
(1) in the section heading by striking
``AUTHORIZATION OF APPROPRIATIONS'' and inserting
``FUNDING''; and
(2) in subsection (a)--
(A) by striking ``(a) In General.--Subject
to'' and inserting the following:
``(a) In General.--
``(1) Authorization of appropriations.--Subject to'';
and
(B) by adding at the end the following:
``(2) Mandatory funding.--Of the funds of the
Commodity Credit Corporation, the Secretary shall make
available to carry out the competitive grant program
under section 4, $125,000,000 for each fiscal year
beginning with fiscal year 2026.''.
SEC. 10105. SECURE RURAL SCHOOLS; FORESTRY.
(a) Extension of Certain Provisions of Secure Rural Schools
and Community Self-Determination Act of 2000.--
(1) Secure payments for states and counties
containing federal land.--
(A) Secure payments.--Section 101 of the
Secure Rural Schools and Community Self-
Determination Act of 2000 (16 U.S.C. 7111) is
amended--
(i) in subsections (a) and (b), by
striking ``2023'' each place it appears
and inserting ``2026''; and
(ii) by adding at the end the
following:
``(e) Special Rule for Fiscal Year 2024 Payments.--
``(1) State payment.--If an eligible county in a
State that will receive a share of the State payment
for fiscal year 2024 has already received, or will
receive, a share of the 25-percent payment for fiscal
year 2024 distributed to the State before the date of
enactment of this subsection--
``(A) if the amount of the State payment
exceeds the amount of the 25-percent payment,
the amount of the State payment shall be
reduced by the amount of the share of the
eligible county of the 25-percent payment; or
``(B) if the amount of the State payment is
less than or equal to the amount of the 25-
percent payment, the eligible county--
``(i) may retain the amount of the
share of the eligible county of the 25-
percent payment; and
``(ii) if so retained, such amount
shall be treated as if it were received
by the county as a State payment for
purposes of this Act.
``(2) County payment.--If an eligible county that
will receive a county payment for fiscal year 2024 has
already received a 50-percent payment for fiscal year
2024--
``(A) if the amount of the county payment
exceeds the amount of the 50-percent payment,
the amount of the county payment shall be
reduced by the amount of the 50-percent
payment; or
``(B) if the amount of the county payment is
less than or equal to the amount of the 50-
percent payment, the eligible county--
``(i) may retain the amount of the
50-percent payment; and
``(ii) if so retained, such amount
shall be treated as if it were received
as a county payment for purposes of
this Act.
``(3) Timely payment.--Not later than 90 days after
the date of enactment of this subsection, the Secretary
of the Treasury shall make all payments under this
title for fiscal year 2024.''.
(B) Distribution of payments to eligible
counties.--Section 103(d)(2) of the Secure
Rural Schools and Community Self-Determination
Act of 2000 (16 U.S.C. 7113(d)(2)) is amended
by striking ``2023'' and inserting ``2026''.
(2) Payments to states and counties.--Section 102 of
the Secure Rural Schools and Community Self-
Determination Act of 2000 (16 U.S.C. 7112) is amended--
(A) in subsection (b)--
(i) in paragraph (1), by adding at
the end the following:
``(E) Payments for each of fiscal years 2024
and 2025.--The election otherwise required by
subparagraph (A) shall not apply for each of
fiscal years 2024 and 2025.''; and
(ii) in paragraph (2), by adding at
the end the following:
``(C) Fiscal years 2024 and 2025.--The
election described in paragraph (1)(A)
applicable to a county in fiscal year 2023
shall be effective for each of fiscal years
2024 and 2025.''; and
(B) in subsection (d)--
(i) in paragraph (1), by adding at
the end the following:
``(G) Payments for each of fiscal years 2024
and 2025.--The election made by an eligible
county under subparagraph (B), (C), or (D) for
fiscal year 2023, or deemed to be made by the
county under paragraph (3)(B) for that fiscal
year, shall be effective for each of fiscal
years 2024 and 2025.''; and
(ii) in paragraph (3), by adding at
the end the following:
``(E) Payments for each of fiscal years 2024
and 2025.--This paragraph does not apply for
each of fiscal years 2024 and 2025.''.
(3) Extension of authority to conduct special
projects on federal land.--
(A) Committee on composition waiver
authority.--Section 205(d)(6)(C) of the Secure
Rural Schools and Community Self-Determination
Act of 2000 (16 U.S.C. 7125(d)(6)(C)) is
amended by striking ``2023'' and inserting
``2026''.
(B) Extension of authority.--Section 208 of
the Secure Rural Schools and Community Self-
Determination Act of 2000 (16 U.S.C. 7128) is
amended--
(i) in subsection (a), by striking
``2025'' and inserting ``2028''; and
(ii) in subsection (b), by striking
``2026'' and inserting ``2029''.
(4) Extension of authority to expend county funds.--
Section 305 of the Secure Rural Schools and Community
Self-Determination Act of 2000 (16 U.S.C. 7144) is
amended--
(A) in subsection (a), by striking ``2025''
and inserting ``2028''; and
(B) in subsection (b), by striking ``2026''
and inserting ``2029''.
(b) Resource Advisory Committee Pilot Program Extension.--
Section 205(g) of the Secure Rural Schools and Community Self-
Determination Act of 2000 (16 U.S.C. 7125(g)) is amended--
(1) in paragraph (5), by striking ``2023'' and
inserting ``2026''; and
(2) by striking paragraph (6).
(c) Technical Corrections.--
(1) Resource advisory committees.--Section 205 of the
Secure Rural Schools and Community Self-Determination
Act of 2000 (16 U.S.C. 7125) is amended--
(A) in subsection (c)--
(i) in paragraph (1), by striking
``concerned,'' and inserting
``concerned''; and
(ii) in paragraph (3), by striking
``the date of the enactment of this
Act'' and inserting ``October 3,
2008''; and
(B) in subsection (d)(4), by striking ``to
extent'' and inserting ``to the extent''.
(2) Use of project funds.--Section 206(b)(2) of the
Secure Rural Schools and Community Self-Determination
Act of 2000 (16 U.S.C. 7126(b)(2)) is amended by
striking ``concerned,'' and inserting ``concerned''.
(d) Rescissions.--
(1) Competitive grants for non-federal forest
landowners.--All of the unobligated balances of the
funds made available under each of paragraphs (1)
through (4) of section 23002(a) of subtitle D of Public
Law 117-169 are rescinded.
(2) State and private forestry conservation
programs.--Of the unobligated balances available under
section 23003(a)(1) of subtitle D of Public Law 117-
169, $100,719,676 are rescinded.
SEC. 10106. ENERGY.
(a) Biobased Markets Program.--Section 9002(k)(1) of the Farm
Security and Rural Investment Act of 2002 (7 U.S.C. 8102(k)(1))
is amended by striking ``2024'' and inserting ``2031''.
(b) Bioenergy Program for Advanced Biofuels.--Section
9005(g)(1)(F) of the Farm Security and Rural Investment Act of
2002 (7 U.S.C. 8105(g)(1)(F)) is amended by striking ``2024''
and inserting ``2031''.
SEC. 10107. HORTICULTURE.
(a) Plant Pest and Disease Management and Disaster
Prevention.--Section 420(f) of the Plant Protection Act (7
U.S.C. 7721) is amended--
(1) in paragraph (5), by striking ``and'' at the end;
(2) by redesignating paragraph (6) as paragraph (7);
(3) by inserting after paragraph (5) the following:
``(6) $75,000,000 for each of fiscal years 2018
through 2025; and''; and
(4) in paragraph (7) (as so redesignated), by
striking ``$75,000,000 for fiscal year 2018'' and
inserting ``$90,000,000 for fiscal year 2026''.
(b) Specialty Crop Block Grants.--Section 101(l)(1) of the
Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621
note; Public Law 108-465) is amended--
(1) in subparagraph (D), by striking ``and'' at the
end;
(2) by redesignating subparagraph (E) as subparagraph
(F);
(3) by inserting after subparagraph (D) the
following:
``(E) $85,000,000 for each of fiscal years
2018 through 2025; and''; and
(4) in subparagraph (F) (as so redesignated), by
striking ``$85,000,000 for fiscal year 2018'' and
inserting ``$100,000,000 for fiscal year 2026''.''.
(c) Organic Production and Market Data Initiative.--Section
7407(d)(1) of the Farm Security and Rural Investment Act of
2002 (7 U.S.C. 5925c(d)(1)) is amended--
(1) in subparagraph (B), by striking ``and'' at the
end;
(2) in subparagraph (C), by striking the period at
the end and inserting ``; and''; and
(3) by adding at the end the following:
``(D) $10,000,000 for the period of fiscal
years 2026 through 2031.''.
(d) Modernization and Improvement of International Trade
Technology Systems and Data Collection Funding.--Section
2123(c)(4) of the Organic Foods Production Act of 1990 (7
U.S.C. 6522(c)(4)) is amended, in the matter preceding
subparagraph (A), by striking ``and $1,000,000 for fiscal year
2024'' and inserting ``, $1,000,000 for fiscal years 2024 and
2025, and $5,000,000 for fiscal year 2026''.
(e) National Organic Certification Cost-share Program.--
Section 10606(d)(1)(C) of the Farm Security and Rural
Investment Act of 2002 (7 U.S.C. 6523(d)(1)(C)) is amended by
striking ``for each of fiscal years 2022 through 2024'' and
inserting ``for each of fiscal years 2022 through 2031''.
(f) Multiple Crop and Pesticide Use Survey.--Section
10109(c)(1) of the Agriculture Improvement Act of 2018 (Public
Law 115-334; 132 Stat. 4906) is amended to read as follows:
``(1) Mandatory funding.--Of the funds of the
Commodity Credit Corporation, the Secretary shall use
to carry out this section--
``(A) $500,000 for fiscal year 2019, to
remain available until expended;
``(B) $100,000 for fiscal year 2024, to
remain available until expended; and
``(C) $5,000,000 for fiscal year 2026, to
remain available until expended.''.
SEC. 10108. MISCELLANEOUS.
(a) Animal Disease Prevention and Management.--Section
10409A(d)(1) of the Animal Health Protection Act (7 U.S.C.
8308a(d)(1)) is amended to read as follows:
``(1) Mandatory funding.--
``(A) Fiscal years 2023 through 2025.--Of the
funds of the Commodity Credit Corporation, the
Secretary shall make available to carry out
this section $30,000,000 for each of fiscal
years 2023 through 2025, of which not less than
$18,000,000 shall be made available for each of
those fiscal years to carry out subsection (b).
``(B) Fiscal years 2026 through 2030.--Of the
funds of the Commodity Credit Corporation, the
Secretary shall make available to carry out
this section $233,000,000 for each of fiscal
years 2026 through 2030, of which--
``(i) not less than $10,000,000 shall
be made available for each such fiscal
year to carry out subsection (a);
``(ii) not less than $70,000,000
shall be made available for each such
fiscal year to carry out subsection
(b); and
``(iii) not less than $153,000,000
shall be made available for each such
fiscal year to carry out subsection
(c).
``(C) Subsequent fiscal years.--Of the funds
of the Commodity Credit Corporation, the
Secretary shall make available to carry out
this section $75,000,000 for fiscal year 2031
and each fiscal year thereafter, of which not
less than $45,000,000 shall be made available
for each of those fiscal years to carry out
subsection (b).''.
(b) Sheep Production and Marketing Grant Program.--Section
209(c) of the Agricultural Marketing Act of 1946 (7 U.S.C.
1627a(c)) is amended--
(1) by striking ``$2,000,000 for fiscal year 2019,
and''; and
(2) by inserting ``and $3,000,000 for fiscal year
2026'' after ``fiscal year 2024''.
(c) Miscellaneous Trust Funds.--
(1) Pima agriculture cotton trust fund.--Section
12314 of the Agricultural Act of 2014 (7 U.S.C. 2101
note; Public Law 113-79) is amended--
(A) in subsection (b), in the matter
preceding paragraph (1), by striking ``2024''
and inserting ``2031''; and
(B) in subsection (h), by striking ``2024''
and inserting ``2031''.
(2) Agriculture wool apparel manufacturers trust
fund.--Section 12315 of the Agricultural Act of 2014 (7
U.S.C. 7101 note; Public Law 113-79) is amended by
striking ``2024'' each place it appears and inserting
``2031''.
(3) Wool research and promotion.--Section 12316(a) of
the Agricultural Act of 2014 (7 U.S.C. 7101 note;
Public Law 113-79) is amended by striking ``2024'' and
inserting ``2031''.
(4) Emergency citrus disease research and development
trust fund.--Section 12605(d) of the Agriculture
Improvement Act of 2018 (7 U.S.C. 7632 note; Public Law
115-334) is amended by striking ``2024'' and inserting
``2031''.
Brief Explanation
The provisions passed by the Committee reduce the deficit
within the jurisdiction of the Committee on Agriculture, as
instructed by H. Con. Res. 14, establishing the congressional
budget for the United States Government for Fiscal Year 2025
and setting forth the appropriate budgetary levels for fiscal
years 2026 through 2034, as passed by the House of
Representatives on February 18, 2025.
Purpose and Need
The House Concurrent Resolution, H. Con. Res. 14, included
budget reconciliation instructions directing the Committee on
Agriculture to report changes in laws within its jurisdiction
that result in decreases to the deficit of not less than
$230,000,000,000 for fiscal years 2025 through 2034. The
Committee on Agriculture reported provisions out of Committee
that meet those instructions by making much needed and overdue
reforms to the Supplemental Nutrition Assistance Program (SNAP)
and providing the resources necessary to shore up the farm
safety net and invest in other critical functions.
Though intended to supplement the food budget for low-
income individuals, due to a lack of effective oversight by
Congress, overreach by the executive branch and States in
administration of the program, and a weakening of statutory
provisions intended to promote work, SNAP has ballooned in cost
and is not effectively serving those who truly need the
benefit. Since 2019, SNAP rolls have increased by 17 percent,
from 36 million in 2019 to 42 million today, meanwhile the
overall cost of the program has grown by 83 percent, ballooning
from $60 billion to $110 billion annually. The Congressional
Budget Office projects Federal outlays on SNAP to exceed $115
billion by 2035. This is an unsustainable trajectory that
threatens the longterm integrity and health of the SNAP
program.
Because the SNAP benefit is 100 percent funded by the
Federal government, there is minimal incentive for States to
control costs, enhance efficiencies, and improve outcomes for
recipients. Instead, we have seen States discourage work and
expand benefits for those the program was not intended to
serve.
Despite a time limit and work requirement enshrined in law
for Able-Bodied Adults Without Dependents (ABAWDs) on SNAP,
only 28 percent of these individuals have earned income from
work. USDA and States have intentionally limited enforcement of
the SNAP work requirement for ABAWDs through waivers, leaving
40 percent of these work-ready individuals today under a waiver
of the ABAWD work requirement, remaining on the SNAP rolls long
after the three-month time limit.
Moreover, the statutory gross monthly income limit is set
at 130 percent of the Federal Poverty Line (FPL) for SNAP
eligibility. The statute also specifies certain asset limits.
Nonetheless, 44 States have opted into some form of Broad-Based
Categorical Eligibility (BBCE), a loophole in the law that the
Obama Administration exploited to allow States to increase SNAP
eligibility up to 200 percent of the FPL and waive asset limits
entirely simply because an individual is receiving a brochure
from another welfare program. This loophole violates the income
and asset limits set in the law by Congress.
Increasing SNAP caseloads have consequences for those this
program was intended to serve. States, who administer the
program, collectively make close to $13 billion per year in
erroneous payments, both overpayments and underpayments, to
participants in the SNAP program. Error rates for individual
States range from over 60 percent to less than 5 percent, with
a national average error rate of 11.68 percent, which has
nearly doubled since 2019. Moreover, the majority of SNAP State
agencies are out of compliance with processing applications on
time. Federal law is clear: States must process SNAP
applications within 30 days for most households, and seven days
for those who are elderly or disabled. This failure by the
States means families in need are waiting too long for
assistance.
The provisions reported out of the Committee on Agriculture
achieve significant savings for taxpayers through common sense
reforms to SNAP including preventing the executive branch from
unilaterally increasing SNAP benefits without Congressional
authority, ensuring that able-bodied adults who can work do
work, limiting the ability of States to take advantage of
loopholes in the law that allow them to inflate SNAP benefits
regardless of true need, and encouraging States to administer
the SNAP program more efficiently and effectively.
Since the enactment of the Agricultural Improvement Act of
2018 (PL 115-334, 2018 Farm Bill) total production costs for
producers have increased by over 30 percent. This, coupled with
steep and rapid declines in commodity prices from recent highs,
has resulted in negative projected returns for all major row
crops. Some commodities are on their third consecutive year of
negative returns, eroding farmers' balance sheets and driving a
55 percent year-over-year increase in Chapter 12 (farm)
bankruptcies. These conditions in the farm economy are what the
Title I commodity policy provisions were intended to help
mitigate. However, due to inflation, the effective support
provided by the current policies is almost negligible. The
combination of worsening economic conditions, concerning
increases in farmer debt, and lack of a sufficient safety net,
compelled Congress in December of 2024 via the American Relief
Act, 2025 (PL 118-158) to provide $10 billion in emergency ad
hoc assistance to row crop producers and over $20 billion to
compensate farmers impacted by natural disasters in 2023 and
2024.
While this assistance was critical for many producers to
service debt and secure operating loans for crop year 2025,
relying on costly and unbudgeted aid is not a sustainable
trajectory for the taxpayer or for producers who need a more
reliable and predictable safety net to make long-term business
decisions.
To mitigate the need for future unbudgeted assistance--
which has grown to $130 billion since 2018--the Committee
included provisions to make targeted and strategic enhancements
to the farm safety net. These improvements focus on Title I
commodity policy, designed to assist farmers during periods of
low prices, as well as crop insurance, where average coverage
levels have stagnated since 2000, when the last significant
reforms were made.
The Committee also sought to address other key priorities
in its jurisdiction such as: increasing investment in trade
promotion activities, which assist the export dependent
agriculture sector with finding foreign markets for U.S. food,
feed, and fuel; enhancing livestock biosecurity programming to
prepare for, prevent, and respond to animal disease outbreaks
which could devastate livestock and poultry industries;
investing in public research infrastructure to spur innovation
and aid the U.S. in regaining global dominance in new
agricultural technologies; and provide a continuation of
funding for other policies that are vital to improving rural
prosperity and economic development.
Section by Section
SUBTITLE A--NUTRITION
Sec. 10001. Thrifty Food Plan.
Section 10001 amends section 3(u) of the Food and Nutrition
Act of 2008 to provide a cost neutrality provision that would
prevent the Secretary from increasing the cost of the thrifty
food plan based on a reevaluation or update of market baskets,
which under this section may not occur more frequently than
every 5 years. This section also requires the Secretary to
publish in the Federal Register with an opportunity for comment
a notice prior to any update of the thrifty food plan market
baskets. Under section 3(u)(4), the Secretary would be required
to adjust the cost of the thrifty food plan to reflect changes
in the Consumer Price Index.
Sec. 10002. Able Bodied Adults Without Dependents Work Requirements.
Subsection (a) of section 10002 amends the exceptions
listed for able bodied adults without dependents (ABAWD) in
Section 6(0)(3) of the Food and Nutrition Act to the SNAP work
requirement. Specifically, this section would increase the age
with which ABAWDs must continue working to qualify for SNAP to
64 (up from 54 currently); it changes the generic, functional
definition of ``dependent child'' for ABAWD purposes from under
18 years of age to under 7; and it carves out an exception to
the work requirements for a person responsible for a child 7
years of age or older who is married and resides with an
individual who complies with the SNAP work requirements.
Subsection (b) of section 10002 keeps in place the October
1, 2030 sunset provision currently in law for the ABAWD
exception for: homeless individuals; veterans; and individuals
who are 24 years of age or younger and who were in foster care
under the responsibility of a State on the date of attaining 18
years of age or such higher age as the State has elected under
section 475(8)(B)(iii) of the Social Security Act.
Sec. 10003. Able Bodied Adults Without Dependents Waivers.
Paragraph (1) of section 10003 amends Section 6(o)(4)(A) of
the Food and Nutrition Act--which addresses State waiver
requests to the work requirement for ABAWDs--by requiring
county or county-equivalents to have unemployment rates of over
10% to be eligible for waivers, such waivers being valid for
not more than 12 consecutive months. Currently, the Secretary
has wide discretion to issue such waivers indefinitely across
entire States if the Secretary determines the area does not
have a sufficient number of jobs.
Paragraph (2) of section 10003 amends Section 6(o)(6)(F) to
lower the maximum number of exempt ABAWDs not living in a
waived county or county-equivalent from the SNAP work
requirement from 8 percent of such individuals in the State to
1 percent.
Sec. 10004. Availability of Standard Utility Allowances Based on
Receipt of Energy Assistance.
Subsection (a) of section 10004 amends Section
5(e)(6)(C)(iv)(I) of the Food and Nutrition Act to limit the
use of payments of $20 or more from the Low-Income Home Energy
Assistance Act of 1981 (or similar energy assistance program)
to automatically qualify for the standard utility allowance in
determining SNAP allotments to only households with elderly or
disabled members. Currently, all households qualify.
Subsection (b)(l) of section 10004 amends Section 5(k)(4)
of the Food and Nutrition Act to limit the exclusion from
income for the purposes of determining SNAP allotments,
payments made pursuant to State law to provide energy
assistance to a household to only households with an elderly or
disabled member. Subsection (b)(2) amends Section 5(k)(4) of
the Food and Nutrition Act to limit the inclusion of expenses
paid on behalf of a household under a State law to provide
energy assistance as ``out-of-pocket'' expenses to be
considered in the excess shelter deduction for purposes of
determining SNAP allotments to only households with an elderly
or disabled member. Currently, all households enjoy those
benefits.
Sec. 10005. Restrictions on Internet Expenses.
Section 10005 amends Section 5(e)(6) of the Food and
Nutrition Act by adding at the end a new subparagraph (E) that
explicitly forbids the use of household internet costs from
being used in computing the excess shelter expense deduction in
determining the size of household SNAP allotments.
Sec. 10006. Matching Funds Requirement.
Subsection (a) of section 10006 amends Section 4(a) of the
Food and Nutrition Act by adding a new paragraph (2). Paragraph
(2)(A) would require all States to contribute 5 percent of the
cost of SNAP allotments beginning in fiscal year 2028.
Paragraph (2)(8) increases the percentage that States must
contribute based on each respective State's SNAP error rate.
States with error rates of between 6 and 8 percent must
contribute 15 percent; States with error rates of between 8 and
10 percent must contribute 20 percent; and States with error
rates equal to or greater than 10 percent must contribute 25
percent.
Subsection (b) of section 10006 is a rule of construction
meant to add further clarity that in no event may the federal
government pay towards SNAP allotments an amount greater than
the ``Federal Share'' (100 percent minus the State Share
described in subsection (a)).
Sec. 10007. Administrative Cost Sharing.
Section 10007 amends Section 16(a) of the Food and
Nutrition Act by reducing the federal share of the cost of
administering SNAP from 50 percent to 25 percent, thereby
increasing the State share of administrative costs from 50
percent to 75 percent.
Sec. 10008. General Work Requirement Age.
Paragraph (I) of section 10008 amends Section 6(d)(1) of
the Food and Nutrition Act by changing the general SNAP work
requirement age from over 15 and under 60, to over 17 and under
65. Paragraph (2) amends Section 6(d)(2) by increasing the age
of a child for which a parent will be exempted from the general
SNAP work requirements from under the age of 6 to under the age
of 7.
Sec. 10009. National Accuracy Clearinghouse.
Section 10009 amends Section 11(x)(2) of the Food and
Nutrition Act by adding at the end a new subparagraph (D) that
would require state agencies to use indications of multiple
issuances of SNAP benefits to prevent multiple issuances of
other federal and State assistance program benefits.
Sec. 10010. Quality Control Zero Tolerance.
Section 10010 amends Section 16(c)(l)(A)(ii) of the Food
and Nutrition Act by reducing the tolerance level for errors in
SNAP from $37 in 2014 dollars (adjusted annually to account for
inflation) to $0.
Sec. 10011. National Education and Obesity Prevention Grant Program
Repealer.
Section 10011 repeals Section 28 of the Food and Nutrition
Act: The National Education and Obesity Prevention Grant
Program.
Sec. 10012. Alien SNAP Eligibility.
Section 10012 amends Section 6(f) of the Food and Nutrition
Act to limit SNAP benefits to only individuals who reside in
the United States and are citizens or lawful permanent
residents of the United States.
Sec. 10013. Emergency Food Assistance.
Section 10013 amends Section 203D(d)(5) of the Emergency
Food Assistance Act of 1983 to extend mandatory funding for
each fiscal year through 2031 to carry out federal projects
aimed at reducing food waste, providing food to individuals in
need, and building relationships between agricultural
production, processing, and distribution.
SUBTITLE B--INVESTMENT IN RURAL AMERICA
Sec. 10101. Safety Net.
Section 10101(a) amends section 1111 of the Agricultural
Act of 2014 to include a 10% to 20% increase to the statutory
reference price for all covered commodities. Effective
beginning in the 2031 crop year, the reference price for all
covered commodities above shall equal the reference price in
the previous crop year multiplied by 1.005 and cannot exceed
115 percent of the reference price for such covered commodity.
Section 10101(b) amends section 1112 of the Agricultural
Act of 2014 to maintain all current base acres while providing
a 1-time allocation of new base for not more than an additional
30,000,000 base acres for producers who currently do not have
base or whose average planted and prevented plant acres exceed
the current base acres on the farm. Additionally, section
10101(b) requires a pro-rated reduction by the Secretary if the
total number of eligible acres allocated to base acres across
all farms in the U.S. would exceed 30,000,000 acres beginning
in crop year 2026.
Section 10101(c) amends section 1115 of the Agricultural
Act of 2014. The subsection requires producers to make an
election to obtain PLC or ARC coverage on a covered-commodity-
by-covered-commodity basis through crop year 2031.
Section 10101(d) amends section 1116 of the Agricultural
Act of 2014 to extend PLC through crop year 2031.
Section 10101(e) amends section 1117 of the Agricultural
Act of 2014 to extend ARC through crop year 2031. The
subsection also increases the agricultural risk coverage
guarantee to 90 percent of the benchmark revenue for crop years
2025 through 2031. It further increases the payment rate
calculation to include 12.5 percent of the benchmark revenue in
crop years 2025 through 2031.
Section 10101(f) amends section 1001 of the Food Security
Act of 1985 to define the term ``qualified pass through
entity'' to include partnerships, S-Corps, LLCs, joint
ventures, and general partnerships. The subsection requires the
Secretary to treat such entities in the same manner as current
law treats general partnerships and joint ventures for the
purposes of applying payment limitations.
Section 10101(g) amends section 1001 of the Food Security
Act of 1985 to increase the payment limitation for Title I
payments from $125,000 to $155,000, adjusted annually to
account for inflation based on the Consumer Price Index for All
Urban Consumers published by the Bureau of Labor Statistics of
the Department of Labor.
Section 10101(h) amends section 1001D(b) of the Food
Security Act of 1985 to provide an exception to the AGI means
test for purposes of determining eligibility for disaster and
conservation programs if the person or entity derives more than
75 percent of their average gross income from farming,
ranching, and silviculture activities. Farming, ranching, and
silviculture activities include agri-tourism, direct-to-
consumer marketing of agricultural products, the sale of
agricultural equipment owned by an operation.
Section 10101(i) amends section 1202 of the Agricultural
Act of 2014 to include, for crop years 2026 through 2031,
modest increases in loan rates for most loan commodities, while
providing for a more substantial increase in loan rates for
commodities that did not receive an increase in the
Agricultural Improvement Act of 2018. Section 10101(i) also
establishes a special rule for the effective price for PLC
where the loan rate shall be equal to $0.30 per pound for seed
cotton and $3.30 per bushel for corn.
Section 10101(i) further amends section 1204(g) of the
Agricultural Act of 2014 to require the Secretary to make
cotton storage payments for upland cotton and extra-long staple
cotton in the same manner as provided in 2006 for upland
cotton. The payment rate shall be equal to the lesser of the
submitted tariff rate for the current marketing year and the
maximum storage payment rate of $4.90 for California and
Arizona and $3.00 in all other states. The subsection also
enhances flexibility for loan redemption of upland cotton and
modernizes loan provisions for extra-long staple cotton.
Section 10101(j) amends section 1204 of the Agricultural
Act of 2014 by establishing the repayment rate of a marketing
assistance loan for upland cotton to be the lowest prevailing
world market price during the 30-day period beginning on the
date on which such loan was repaid was used. Section 10101(j)
also provides for a refund of a marketing loan for upland
cotton that is repaid by a producer. Section 10101(j) further
updates the formula for the prevailing world market price for
upland cotton to provide that, for any period which price
quotations for Middling (M) one and three-thirty-second inch
cotton are available, is based on the average of the 3 lowest-
priced growths that are quoted. Lastly, section 10101(j)
establishes the repayment rate of a marketing assistance loan
for extra long staple cotton to be the lesser of the loan rate
established for the commodity or the prevailing world market
price. The prevailing world market price for extra long staple
cotton shall be adjusted to U.S. quality and location, as well
as include the average costs to market the commodity taking
into account transportation costs on the date the loan was
repaid.
Section 10101(k) amends section 1207(c) of the Agricultural
Act of 2014. The subsection increases the Economic Adjustment
Assistance for Textile Mills payment rate from $0.03/lb. to
$0.05/lb. of upland cotton used by the mill, beginning August
1, 2025.
Section 10101(l) provides various sugar program updates.
Subsection (1)(1) amends section 156 of the Federal Agriculture
Improvement and Reform Act of 1996 to increase, for crop years
2025 through 2031, the loan rate for sugarcane to $0.24 per
pound. The subsection further increases the loan rate for sugar
beets to 136.55 percent of the loan rate for raw sugar.
Subsection (1)(2) amends section 167 of the Federal
Agriculture Improvement and Reform Act of 1996 to increase for
the 2025 crop year and each subsequent crop year the storage
payments to $0.34 per hundredweight per month for refined sugar
and $0.27 per hundredweight per month for raw cane sugar.
Subsection (1)(3) amends Section 359b(a)(1) of the
Agricultural Adjustment Act of 1938 to require the Secretary to
provide sugar estimates for flexible marketing allotments for
sugar through crop year 2031. The subsection also amends
Section 359c(g)(2) of the Agricultural Adjustment Act of 1938
to require the Secretary to give priority to sugar beet
processors that have sugar available, if the Secretary makes an
upward adjustment in an allotment.
Subsection (1)(4) amends section 359k of Agricultural
Adjustment Act of 1938. The subsection requires USTR, in
consultation with the Secretary, to provide an upfront
reallocation l(O of the TRQ shortfall at the beginning of the
quota year and then a subsequent reallocation of any remaining
shortfall to quota holding countries by March 1st of each year.
Subsection (1)(5) amends section 359k(b)(1) of the
Agricultural Adjustment Act of 1938 to clarify that the
Secretary has the authority to take action to increase the
supply of sugar before April 1st only if it is for the sole
purpose of responding directly to an emergency shortage of
sugar in the United States market that is caused by a war,
flood, hurricane, or other natural disaster, or other similar
event.
Subsection (1)(6) amends Section 359l(a) of the
Agricultural Adjustment Act of 1938 to extend the period of
effectiveness for flexible marketing allotments for sugar
through the 2031 crop year.
Section 10101(m) provides various dairy policy updates.
Section (m)(l) amends section 1401 of the Agricultural Act of
2014 to update the definition of ``production history'' and
amends section 1405 of the Agricultural Act of 2014 to update
the production history for dairy operations participating in
the program to the highest annual milk marketings of such dairy
during any one of the 2021, 2022, or 2023 calendar years.
Subsections (m)(2) and (m)(3) amend sections 1406 and 1407
of the Agricultural Act of 2014 to increase the tier I and tier
II coverage limit under the DMC program from the first 5
million pounds of milk to the first 6 million pounds of milk.
Subsection (m)(3) also provides an option for producers to
receive a 25 percent discount on their DMC premiums if they
lock in coverage from calendar years 2026 through 2031.
Subsection (m)(4) amends section 1409 of the Agricultural
Act of 2014 to extend dairy margin coverage through calendar
year 2031.
Subsection (n) amends Section 1602 of the Agricultural Act
of2014 to suspend permanent price support authority through
calendar year 2031.
Subsection (o) amends section 1614(c) of the Agricultural
Act of 2014 to provide for the implementation authority and
funding for Title I of this Act. The subsection further
provides CCC funds to implement Title I programs and
authorities, including to carry out dairy mandatory cost
surveys and for USDA to update and modernize their technology.
Subsection (p) amends section 1501 of the Agricultural Act
of 2014 to provide various livestock safety net updates.
Subsection (p)(1) establishes a payment rate for predation
losses at 100 percent of the market value of the animal for
losses caused by a federally protected species.
Subsection (p)(1) also establishes a payment rate for
losses due to adverse weather or disease at 75 percent of the
market value of the animal. The market value for both payment
rates is determined by the Secretary, who may consider the
ability of eligible producers to document regional price
premiums for affected livestock that exceed the national
average market price for those livestock. The paragraph further
establishes a supplemental payment for the loss of unborn
livestock incurred since January 1, 2024.
Subsection (p)(2) provides that an eligible livestock
producer that owns or leases grazing land or pastureland that
is physically located in a county that is rated by the U.S.
Drought Monitor as having a D2 (severe drought) intensity in
any area of the county for at least 4 consecutive weeks during
the normal grazing period for the county, as determined by the
Secretary, shall be eligible to receive assistance in an amount
equal to 1 monthly payment using the monthly payment rate
determined under the livestock forage disaster program; or 2
monthly payments if for any of the 7 of the 8 consecutive weeks
during the normal grazing period for the county.
Subsection (p)(3) establishes that eligible producers on a
farm of farm-raised fish, including fish grown as food for
human consumption, shall be eligible to receive payments to aid
in the reduction of losses due to piscivorous birds. The
payment rate for payments shall be not less than $600 per acre
of farm-raised fish.
Subsection (p)(4) decreases the threshold for producers to
qualify for the program to a tree mortality rate that exceeds
normal mortality. Additionally, the reimbursement rate
increases from 50 percent to 65 percent of the cost of pruning,
removal, and other costs incurred by an eligible orchardist or
nursery tree grower to salvage existing trees or, in the case
of tree mortality, to prepare the land to replant trees.
Subsection (q) provides that in determining honeybee colony
losses eligible for emergency assistance for livestock, honey
bees, and farm-raised fish under section 1501(d) of the
Agricultural Act of 2014, the Secretary shall utilize a normal
mortality rate of 15 percent. Subsection (r) amends section
502(b) of the Federal Crop Insurance Act to establish, among
other criteria, that a beginning farmer or rancher, and a
veteran farmer or rancher, are farmers or ranchers that have
operated a farm or ranch for not more than 10 years.
Additionally, subsection (r) amends 508(e)(8) of the
Federal Crop Insurance Act to increase the crop insurance
policy premium to varying percentage points greater than
premium assistance otherwise available, depending on the
reinsurance year that a beginning farmer or rancher is in for
an applicable policy or plan of insurance.
Subsection (r)(2) amends Section 508(e)(2)(H)(i) of the
Federal Crop Insurance Act to provide that in the case of
supplemental coverage options, the amount shall be equal to the
sum of 80 percent of the additional premium associated with the
coverage and the premium calculated for the coverage to cover
operating and administrative expenses.
Subsection (s) amends section 508(c)(4) of the Federal Crop
Insurance Act to enhance the coverage level for Whole Farm
Revenue Protection and certain area wide coverage options, as
well as increases the premium cost share the Corporation pays
for the supplemental coverage option.
Subsection (t) amends Section 508(e)(2) of the Federal Crop
Insurance Act to provide additional premium support in the
catastrophic risk protection provided by the Corporation, with
varying degrees of support depending on the level of additional
coverage of the recorded or appraised average yield indemnified
at not greater than 100 percent of the expected market price,
or a comparable coverage for a policy or plan of insurance that
is not based on individual yield.
Subsection (u) amends Section 508(k) of the Federal Crop
Insurance Act to provide that beginning with the 2026
reinsurance year and for each reinsurance year thereafter, in
addition to the terms and conditions of the Standard
Reinsurance Agreement, to cover additional expenses for loss
adjustment procedures, the Corporation shall pay an additional
administrative and operating expense subsidy to approved
insurance providers for eligible contracts, with the payment to
an approved insurance provider to 6 percent of the net book
premium.
Subsection (u) also establishes a reimbursement level for
administrative and operating expenses with respect to specialty
crop contacts to be equal to or greater than the percent that
is the greater of 17 percent of the premium used to define loss
ratio and the percent of the premium used to define loss ratio
that is otherwise applicable for the reinsurance year under the
terms of the Standard Reinsurance Agreement in effect for the
reinsurance year.
Subsection (u) further requires the Corporation, beginning
with the 2026 reinsurance year and for each reinsurance year
thereafter, to increase the total administrative and operating
expense reimbursements otherwise required under the Standard
Reinsurance Agreement in effect for the reinsurance year in
order to account for inflation in a manner that is consistent
with the increases provided with respect to the 2011 through
2015 reinsurance years.
Subsection (v) amends section 515(1)(2) of the Federal Crop
Insurance Act to provide that the Corporation may use, from
amounts made available from the insurance fund established
under section 516(c) of the Federal Crop Insurance Act, not
more than $6,000,000 for fiscal year 2026 and each subsequent
fiscal year.
Subsection (w) amends section 516(b)(2)(C)(i) of the
Federal Crop Insurance Act to provide that for each of the 2014
and subsequent reinsurance years, the Corporation may use the
insurance fund established under section 516, but not to exceed
$7,000,000 for each of fiscal years 2014 through 2025 and
$10,000,000 for fiscal year 2026 and each fiscal year
thereafter, to pay costs to reimburse expenses incurred for the
operations and review of policies, plans of insurance, and
related materials (including actuarial and related
information); and to assist the Corporation in maintaining
program actuarial soundness and financial integrity.
Subsection (x) amends Section 523 of the Federal Crop
Insurance Act to establish a Poultry Insurance Pilot Program.
Under the pilot program, contract poultry growers, including
growers of broilers and laying hens, may elect to receive
index-based insurance from extreme weather-related risks
resulting in increased utility costs (including costs of
natural gas, propane, electricity, water, and other appropriate
costs, as determined by the Corporation) associated with
poultry production.
Sec. 10102. Conservation.
Subsection (a) of section 10102 amends section 1240O(b) of
the Food Security Act of 1985 to provide $1,000,000 in
mandatory funding, beginning in fiscal year 2026 and available
until expended, from the Commodity Credit Corporation to carry
out the Grassroots Source Water Protection Program. Subsection
(a) also extends the authorized appropriations of $20,000,000
for the Grassroots Source Water Protection Program for each
fiscal year through fiscal year 2031.
Subsection (b) of section 10102 amends section 1240R(f)(l)
of the Food Security Act of 1985 to provide $10,000,000 in
mandatory funding, provided by the Commodity Credit
Corporation, for each fiscal year through fiscal year 2031 to
carry out the Voluntary Public Access and Habitat Incentive
Program.
Subsection (c) of section 10102 amends section 2408(g)(1)
of the Agriculture Improvement Act of 2018 to provide
$15,000,000 in mandatory funding, provided by the Commodity
Credit Corporation, for each fiscal year through fiscal year
2031 to carry out the Federal Swine Eradication and Control
Pilot Program.
Subsection (d) if section 10102 extends and amends section
1241(a) of the Food Security Act of 1985 to increase mandatory
funding, provided by the Commodity Credit Corporation at the
following levels:
The Agriculture Conservation Easement Program, under
subchapter VII, is funded at:
$625,000,0000 for fiscal year 2026;
$650,000,000 for fiscal year 2027;
$675,000,000 for fiscal year 2028;
$700,000,000 for fiscal year 2029;
$700,000,000 for fiscal year 2030; and $700,000,000
for fiscal year 2031.
The Environmental Quality Incentives Program, under subpart
A of part IV of subchapter IV, is funded at:
$2,655,000,000 for fiscal year 2026;
$2,855,000,000 for fiscal year 2027;
$3,255,000,000 for fiscal year 2028;
$3,255,000,000 for fiscal year 2029;
$3,255,000,000 for fiscal year 2030; and
$3,255,000,000 for fiscal year 2031.
The Conservation Stewardship Program, under subpart B of
part IV or subchapter IV, is funded at:
$1,300,000,000 for fiscal year 2026;
$1,325,000,000 for fiscal year 2027;
$1,350,000,000 for fiscal year 2028;
$1,375,000,000 for fiscal year 2029;
$1,375,000,000 for fiscal year 2030; and
$1,375,000,000 for fiscal year 2031.
Subsection (d) amends section 1271D(a) of the Food Security
Act of 1985 to provide $425,000,000 in mandatory funding for
fiscal year 2026 and $450,000,000 for each of fiscal years 2027
through 2031, from the Commodity Credit Corporation, to carry
out the Regional Conservation Partnership Program.
Additionally, subsection (d) amends and extends section 15
of the Watershed Protection and Flood Prevention Act to provide
$150,000,000 in mandatory funding, to remain available until
expended, for fiscal year 2026 from the Commodity Credit
Corporation to carry out watershed protection and flood
prevention. This subsection also rescinds conservation funding
from the Inflation Reduction Act.
Sec. 10103. Trade.
Section 10103 amends section 203(f) of the Agricultural
Trade Act of 1978 to provide mandatory funding of $489,500,000
for each of fiscal years 2026 through 2031, to remain available
until expended, to fund agricultural trade promotion and
facilitation. Of the $489,500,000 provided for each of fiscal
years 2026 through 2031, $400,000,000 is allocated to the
Market Access Program, $69,000,000 is allocated to the Foreign
Market Development Cooperator Program, $8,000,000 is allocated
to the E (Kika) de la Garza Emerging Marketing Program,
$9,000,000 is allocated to the Technical Assistance for
Specialty Crops Program, and $3,500,000 is allocated to the
Priority Trade Fund. Additionally, this section establishes
that any of the funds listed above that remain unobligated one
year after the end of the fiscal year in which the funds were
first made available are to be reallocated to the priority
trade fund.
Sec. 10104. Research.
Subsection (a) of section 10104 amends section 1672E(d)(l)
of the Food, Agriculture, Conservation, and Trade Act of 1990
by extending mandatory funding for each fiscal year through
2031 from the Commodity Credit Corporation to carry out the
Urban, Indoor, and Other Emerging Agriculture Production,
Research, Education, arid Extension Initiative.
Subsection (b) of section 10104 amends section
7601(g)(l)(A) of the Agricultural Act of 2014 to provide
$37,000,000 in mandatory funding, to remain available until
expended, from the Commodity Credit Corporation to carry out
the Foundation for Food and Agriculture Research. The Secretary
shall transfer these funds to the Foundation no later than 30
days after the date of the enactment of this Act.
Subsection (c) of section 10104 amends section 1446 of the
National Agricultural Research, Extension, and Teaching Policy
Act of 1977 to provide $60,000,000 in mandatory funding from
the Commodity Credit Corporation, to remain available until
expended, for fiscal year 2026 to carry out the Scholarships
for Students at 1890 Institutions..
Subsection (d) of section 10104 amends section 1680(c) of
the Food, Agriculture, Conservation, and Trade Act of 1990 to
provide $8,000,000 in mandatory funding, available until
expended, from the Commodity Credit Corporation to carry out
the Assistive Technology Program for Farmers with Disabilities
Program.
Subsection (e) of section 10104 amends section 412(k)(1)(8)
of the Agricultural Research, Extension, and Education Reform
Act of 1998 to provide $80,000,000 in mandatory funding through
fiscal year 2025 and $175,000,000 through fiscal year 2026 from
the Commodity Credit Corporation to carry out the Specialty
Crop Research Initiative.
Subsection (f) of section 10104 amends section 6 of the
Research Facilities Act to provide $125,000,000 in mandatory
funding for each year beginning with fiscal year 2026 from the
Commodity Credit Corporation to carry out the study, plan,
design, structure, and related costs of the Agriculture
Research Facilities under this subchapter.
Sec. 10105. Secure Rural Schools; Forestry.
Subsection (a)(l) amends Section 101 of the Secure Rural
Schools and Community Self-Determination Act to extend the
authority for the Secretaries to calculate eligible State and
county payments under the Act through fiscal year 2026. It also
creates a special rule for fiscal year 2024 payments which may
have already been received by eligible States and counties.
Subsection (a)(2) amends Sections 208 and 305 of the Secure
Rural Schools and Community Self-Determination Act to extend
the authorities to initiate projects to expend funds under the
Act through fiscal year 2028, and requiring project funds not
obligated by September 30, 2029 to be deposited in the Treasury
of the United States.
Subsection (b) amends Section 205(g) of the Secure Rural
Schools and Community Self-Determination Act to extend the
authorities under that section through October 1, 2026. It also
strikes Section 205(g)(6), which required a report to Congress.
Subsection (c) makes technical corrections to sections 205
and 206 of the Secure Rural Schools and Community Self-
Determination Act.
Subsection (d)(1) rescinds all of the unobligated balances
of the funds made available under paragraphs 1 through 4 of
section 23002(a) of subtitle D of Public Law 117-169.
Subsection (d)(2) rescinds $100,719,676 of the unobligated
balances available under section 23003(a)(1) of subtitle D of
Public Law 117-169.
Sec. 10106. Energy.
Subsection (a) of section 10106 amends and extends section
90002(k)(1) of the Farm Security and Rural Investment Act of
2002 by extending mandatory funding provided by the Commodity
Credit Corporation through fiscal year 2031.
Subsection (b) of section 10106 amends section
9005(g)(1)(F) of the Farm Security and Rural Investment Act of
2002 by extending mandatory funding for each fiscal year
through 2031, provided by the Commodity Credit Corporation, to
carry out the Bioenergy Program for Advanced Biofuels.
Sec. 10107. Horticulture.
Subsection (a) of section 10107 amends section 420(f) of
the Plant Protection Act to provide $75,000,000 in mandatory
funding through fiscal year 2025 and increase funding to
$90,000,000 for fiscal year 2026 and each fiscal year
thereafter. Funding is made available through the Commodity
Credit Corporation to carry out plant pest and disease
management and disaster prevention.
Subsection (b) of section 10107 amends section 101(1)(1) of
the Specialty Crops Competitiveness Act of 2004 to extend the
Secretary's authority to make grants through fiscal year 2025.
Also, subsection (b) raises the mandatory funding authorization
to $100,000,000 for fiscal year 2026, from the Commodity Credit
Corporation, to carry out state assistance for specialty crops.
Subsection (c) of section 10107 amends section 7407(d)(1)
of the Farm Security and Rural Investment Act of 2002 to
authorize $10,000,000 in mandatory funding for fiscal years
2026 through 2031 to carry out organic production and market
data initiatives.
Subsection (d) of section 10107 amends section 2123(c)(4)
of the Organic Foods Production Act of 1990 to provide
$1,000,000 in mandatory funding through fiscal years 2024 and
2025 and $5,000,000 for fiscal year 2026, provided by the
Commodity Credit Corporation, to carry out the modernization
and improvement of international trade technology systems and
data collection funding.
Subsection (e) of section 10107 amends section
10606(d)(1)(C) of the Farm Security and Rural Investment Act of
2002 by extending mandatory funding from the Commodity Credit
Corporation through fiscal year 2031 to carry out the National
Organic Certification Cost-Share Program.
Subsection (f) of section 10107 amends section 10109(c)(1)
of the Agriculture Improvement Act of 2018 to provide mandatory
funding from the Commodity Credit Corporation for the Multiple
Crop and Pesticide Use Survey to be funded at--
$500,000 for fiscal year 2019, to remain available
until expended;
$100,000 for fiscal year 2024, to remain available
until expended; and
$5,000,000 for fiscal year 2026, to remain available
until expended.
Sec. 10108. Miscellaneous.
Subsection (a) of section 10108 amends and extends section
10409A(d)(1) of the Animal Health Protection Act to provide
$30,000,000 in mandatory funding for each of the fiscal years
2023 through 2025, from the Commodity Credit Corporation, to
carry out animal disease prevention and management. Of the
$30,000,000 provided in funding, no less than $18,000,000
should be made available for each fiscal year to carry out the
National Animal Disease Preparedness and Response Program.
Additionally, subsection (a) provides $233,000,000 in
mandatory funding from the Commodity Credit Corporation for
each of the fiscal years 2026 through 2030, of which
$10,000,000 is allocated to National Animal Health Laboratory
Network, $70,000,000 is allocated to the National Animal
Disease Preparedness and Response Program, and $153,000,000 is
allocated to the National Animal Vaccine and Veterinary
Countermeasure Bank.
Subsection (a) also provides $75,000,000 in mandatory
funding from the Commodity Credit Corporation for fiscal year
2031 and each fiscal year thereafter to carry out these
programs, of which $45,000,000 is allocated to the National
Animal Disease Preparedness and Response Program.
Subsection (b) of section 10108 amends and extends section
209(c) of the Agriculture Marketing Act of 1946 to provide
$3,000,000 in mandatory funding, available until expended, for
fiscal year 2025 from the Commodity Credit Corporation to carry
out the Sheep Production and Marketing Grant Program.
Subsection (c) of section 10108 amends and extends section
12314 of the Agricultural Act of 2014 by directing the
Secretary to make annual payments through fiscal year 2031 from
the Pima Agriculture Cotton Trust Fund. Subsection (c) also
amends section 12315 of the Agriculture Act of 2014 by
extending all activities under this subsection to fiscal year
2031 to carry out wool research and promotion.
Additionally, subsection (c) of section 10108 amends
section 12605(d) of the Agriculture Improvement Act of 2018 to
extend mandatory funding, to remain available until expended
for each fiscal year to 2031, from the Commodity Credit
Corporation to carry out the Emergency Citrus Disease Research
and Development Trust Fund.
Committee Consideration
The Committee on Agriculture met, pursuant to notice, with
a quorum present on Tuesday, May 13, 2025, to consider the
Committee on Agriculture Committee Print pursuant to the budget
reconciliation instructions provided in the fiscal year 2025
budget resolution, H. Con. Res. 14 Section 2001(b)(1).
Chairman Glenn `GT' Thompson offered an opening statement
as did Ranking Member Craig. Without objection the Committee on
Agriculture Committee Print was placed before the Committee for
consideration and the first reading of the measure was waived.
Chairman Thompson informed members that pursuant to committee
rule III(i)(2) and House Rule XI, Clause 2, the chair may
postpone further proceedings on the question of approving any
measure, matter, or adoption of an amendment on which a
recorded vote is ordered. Without objection the Committee
agreed to vote on amendments using an electronic voting system.
Chairman Thompson offered an amendment in the nature of a
substitute and without objection the first reading was waived,
and it was considered as original text of the measure for the
purpose of amendment. After general debate, the measure was
open for amendment on a section-by-section basis and
subsequently for amendment at any point.
Thirty-Four amendments were offered, all by the Minority.
Mrs. Hayes offered an amendment which would prohibit the
implementation of the SNAP subtitle until certified by USDA and
all states that it will not result in a reduction in SNAP
benefits or participation. Mrs. Hayes called for a recorded
vote and pursuant to Committee rule III(i)(2) further
proceedings on the amendment were postponed.
The Committee then recessed subject to the call of the
chair until 10:00 a.m. on Wednesday, May 14.
The Committee resumed consideration of amendments on
Wednesday, May 14, with a quorum present.
Mr. David Scott offered an amendment which would strike the
entirety of Subtitle A--Nutrition to prevent changes to USDA
nutrition programs. Mr. David Scott called for a recorded vote
and pursuant to Committee rule III(i)(2) further proceedings on
the amendment were postponed.
Mr. Thanedar offered an amendment which would strike
section 10003. Mr. Thanedar's amendment was not agreed to by a
voice vote.
Ms. Brown offered an amendment which would strike
subparagraphs C and I of section 1002(a) that defines that a
dependent child is under 7 years of age and creates an
exemption only for the parents/caretakers of children 7 and
older if that caretaker is married to and lives with someone
who meets the ABAWD work requirements. Ms. Brown called for a
recorded vote and pursuant to Committee rule III(i)(2) further
proceedings on the amendment were postponed.
Mr. Jonathan Jackson offered an amendment which would
strike the section which expands work requirements to seniors
ages 55-64. Mr. Jonathan Jackson called for a recorded vote and
pursuant to Committee rule III(i)(2) further proceedings on the
amendment were postponed.
Ms. Craig made a motion to adjourn, and Mrs. Hayes seconded
the motion. Ms. Craig requested a recorded vote and the motion
failed by a vote of 23 yeas and 29 nays.
Mrs. Hayes offered an amendment which would strike Subtitle
A, and replace it with the text of the SNAP Administrator
Retention Act, which increases the federal share of
administrative costs to 100% and requires states to use federal
funds to supplement, not supplant their spending on the
administration of SNAP. Mrs. Hayes called for a recorded vote
and pursuant to Committee rule III(i)(2) further proceedings on
the amendment were postponed.
Mr. Thanedar offered an amendment which would eliminate
Section 28 of the Food and Nutrition Act. Mrs. McClain Delaney
requested a recorded vote and pursuant to Committee rule
III(i)(2) further proceedings on the amendment were postponed.
The Committee recessed subject to the call of the chair.
The Committee resumed consideration of amendments with a
quorum present.
Ms. Adams offered an amendment which would modify the
formula used to calculate Supplemental Nutrition Assistance
Program benefits so that it is based on the Low-Cost Food Plan
instead of the Thrifty Food Plan. Ms. Adams withdrew her
amendment.
Ms. Adams offered an amendment which would standardize and
increase the medical expense deduction used when determining
SNAP benefits based on income. Ms. Adams withdrew her
amendment.
Ms. Tokuda offered an amendment which would prohibit the
Act from taking effect until the Secretary of Agriculture, the
Administrator of the Food and Nutrition Service, the
Administrator of the Economic Research Service, and relevant
State agencies issue reports evaluating and certifying that
changes to nutrition assistance programs will rtot result in a
decrease in benefits to eligible individuals or reductions in
participation due to changes to eligibility for individuals in
rural areas. Ms. Tokuda requested a recorded vote and pursuant
to Committee rule III(i)(2) further proceedings on the
amendment were postponed.
Mr. David Scott offered an amendment which would prevent
implementation of Subtitle A if any section of the bill reduces
SNAP participation for veterans or surviving families of
servicemembers or veterans who passed away from a service-
related disability. Mr. David Scott called for a recorded vote
and pursuant to Committee rule III(i)(2) further proceedings on
the amendment were postponed.
Mrs. McClain Delaney offered an amendment which would
prohibit the implementation of any of the SNAP provisions in
the bill unless the U.S. Department of Agriculture and all
states evaluate and confirm that there will be no benefit or
eligibility changes that impact households with children. Mrs.
McClain Delaney called for a recorded vote and pursuant to
Committee rule III(i)(2) further proceedings on the amendment
were postponed.
Mrs. McClain Delaney offered an amendment which would
prohibit the implementation of the state cost shift
provision(s) unless the Food and Nutrition Service or the
Economic Research Service and every state agency issues a
report evaluating and certifying that the provisions would NOT
result in cuts to SNAP benefits, changes to SNAP eligibility
that would reduce participation, or a reduction in other
services to low-income families as a result of the new shift of
costs for benefits to states. Mrs. McClain Delaney called for a
recorded vote and pursuant to Committee rule III(i)(2) further
proceedings on the amendment were postponed.
Ms. Pingree offered an amendment which would require the
Secretary of Agriculture to reinstate the Local Food Purchase
Assistance Cooperative Agreement (LFPA) Program and the Local
Food for Schools Cooperative Agreement Program. Ms. Pingree
called for a recorded vote and pursuant to Committee rule
III(i)(2) further proceedings on the amendment were postponed.
Mr. Figures offered an amendment which would prohibit
implementation of the SNAP benefit cost shift provision until
USDA/states certify that there will be no cuts to benefits and
eligibility in rural communities. Mr. Figures called for a
recorded vote and pursuant to Committee rule III(i)(2) further
proceedings on the amendment were postponed.
Mr. Riley offered an amendment which would require congress
to reinstate the Local Food Purchase Assistance Cooperative
Agreement Program. Mr. Riley withdrew his amendment.
Ms. McDonald Rivet offered an amendment which would
reinstate $660,100,000 for fiscal year 2025 for the Local Food
for Schools Program. Ms. McDonald Rivet called for a recorded
vote and pursuant to Committee rule III(i)(2) further
proceedings on the amendment were postponed.
The Committee recessed subject to the call of the chair.
The Committee resumed consideration of amendments with a
quorum present.
Mr. Vindman offered an amendment which would require USDA
to reinstate the Local Food Purchase Assistance Cooperative
Agreement Program (LFPA) and fund the Emergency Food Assistance
Program (TEFAP) at $500,000,000 annually beginning in FY2026.
Mr. Vindman withdrew his amendment.
Mr. Carbajal offered an amendment which would strike
``subtitles A'' and double the mandatory spending on the
Emergency Food Assistance Program (TEFAP). Mr. Carbajal called
for a recorded vote and pursuant to Committee rule III(i)(2)
further proceedings on the amendment were postponed.
Mr. Costa offered an amendment which would strike section
10004. The amendment was not agreed to by a voice vote.
Ms. Davids of Kansas offered an amendment which would
prohibit reductions in force at the National Bio and Agro-
Defense Facility. Ms. Davids called for a recorded vote and
pursuant to Committee rule III(i)(2) further proceedings on the
amendment were postponed.
Ms. Salinas offered an amendment which would prohibit any
funds made available by this act form being used until all the
U.S. Forest Service re-hires all qualified personnel that were
terminated as part of a mass termination during the period
between January 20, 2025, and the enactment of this Act. In the
case a qualified terminated employee does not accept
reinstatement, USFS shall have direct hiring authority to hire
a replacement for such employee. Ms. Salinas called for a
recorded vote and pursuant to Committee rule III(i)(2) further
proceedings on the amendment were postponed.
Ms. Budzinski offered an amendment which would require a
mandatory base acre update. Ms. Budzinski withdrew her
amendment.
Mr. Sorensen offered an amendment which would direct the
Secretary of Agriculture to provide assistance via the
Commodity Credit Corporation to agriculture equipment
manufacturers headquartered in the US that are negatively
impacted by tariff policies enacted on ``Liberation Day'' and
any retaliatory tariffs in response. Mr. Sorensen withdrew his
amendment.
Mr. Gray offered an amendment which would require the
President to provide Congress and the public with certain
information at least 30 days before issuing an executive order
related to agriculture, food, and the livelihood of farmers,
ranchers, and producers in the United States. Mr. Gray called
for a recorded vote and further proceedings on the amendment
were postponed.
Mr. Gray offered an amendment which would require the
Secretary of Agriculture to submit a report on a monthly basis
that includes five bullet points explaining the actions the
Secretary has taken in the preceding week to improve market
access for American Farmers. Mr. Gray called for a recorded
vote and pursuant to Committee rule III(i)(2) further
proceedings on the amendrpent were postponed.
Mr. Mannion offered an amendment which would strike
Subtitle A and increase the Tier I production cap under the
Dairy Margin Coverage (DMC) program from 6 million to 8 million
pounds. Mr. Mannion withdrew his amendment.
Mr. Vindman offered an amendment which would reauthorize
AGARDA as a regular, as opposed to pilot, program and authorize
$150,000,000 for FY26-30 to carry out its mission. Mr. Vindman
called for a recorded vote and pursuant to Committee rule
III(i)(2) further proceedings on the amendment were postponed.
Mr. Vasquez offered an amendment which would require USDA
to honor and fund all existing contracts and reopen all closed
field offices. Mr. Vasquez called for a recorded vote and
pursuant to Committee rule III(i)(2) further proceedings on the
amendment were postponed.
Ms. McDonald Rivet offered an amendment which would provide
funding for research facilities maintenance, including $11.5
billion to cover deferred maintenance at Land Grant
Universities. Ms. McDonald Rivet called for a recorded vote and
pursuant to Committee rule III(i)(2) further proceedings on the
amendment were postponed.
Mr. Riley offered an amendment which would appropriate
$35,000,000 to complete development of an online filing portal
for reports filed under the Agricultural Foreign Investment
Disclosure Act. Mr. Riley called for a recorded vote and
pursuant to Committee rule III(i)(2) further proceedings on the
amendment were postponed.
Mr. Mannion offered an amendment which would increase
funding for the Specialty Crop Research Initiative to $300
million annually beginning in FY2026. Mr. Mannion called for a
recorded vote and pursuant to Committee rule III(i)(2) further
proceedings on the amendment were postponed.
Ms. Salinas offered an amendment which would require all
revenue generated by timber sales to be utilized for hiring and
paying wildland firefighters and forest management personnel.
Ms. Salinas called for a recorded vote and pursuant to
Committee rule III(i)(2) further proceedings on the amendment
were postponed.
Ms. Budzinski offered an amendment which would make
investments into ARS, ERS, NIFA, and NASS activities. Ms.
Budzinski called for a recorded vote and pursuant to Committee
rule III(i)(2) further proceedings on the amendment were
postponed.
The Committee considered the proceedings of the amendments
that were postponed, and Members recorded their votes by
electronic device.
Amendment #13, offered by Mrs. Hayes, was not agreed to by
a vote of 25 yeas and 29 nays.
Amendment #18, offered by Mr. David Scott, was not agreed
to by a vote of 25 yeas and 29 nays.
Amendment #11, offered by Ms. Brown, was not agreed to by a
vote of 25 yeas and 29 nays.
Amendment #16, offered by Mr. Jackson of Illinois, was not
agreed to by a vote of 25 yeas and 29 nays.
Amendment #12, offered by Mrs. Hayes, was not agreed to by
a vote of 25 yeas and 29 nays.
Amendment #21, offered by Mr. Thanedar, was not agreed to
by a vote of 25 yeas and 29 nays.
Amendment #9, offered by Ms. Tokuda, was not agreed to by a
vote of 25 yeas and 29 nays.
Amendment #17, offered by Mr. David Scott, was not agreed
to by a vote of 25 yeas and 29 nays.
Amendment #22, offered by Mrs. McClain Delaney, was not
agreed to by a vote of 25 yeas and 29 nays.
Amendment #23, offered by Mrs. McClain Delaney, was not
agreed to by a vote of 25 yeas and 29 nays.
Amendment #7, offered by Ms. Pingree, was not agreed to by
a vote of 25 yeas and 29 nays.
Amendment #8, offered by Mr. Figures, was not agreed to by
a vote of 25 yeas and 29 nays.
Amendment #15, offered by Ms. McDonald Rivet, was not
agreed to by a vote of 25 yeas and 29 nays.
Amendment #19, offered by Mr. Carbajal, was not agreed to
by a vote of 25 yeas and 29 nays.
Amendment #32, offered by Ms. Davids, was not agreed to by
a vote of 25 yeas and 29 nays.
Amendment #37, offered by Ms. Salinas, was not agreed to by
a vote of 25 yeas and 29 nays.
Amendment #60, offered by Mr. Gray, was not agreed to by a
vote of 25 yeas and 29 nays.
Amendment #63, offered by Mr. Gray, was not agreed to by a
vote of 25 yeas and 29 nays.
Amendment #5, offered by Mr. Vindman, was not agreed to by
a vote of 25 yeas and 29 nays.
Amendment #53, offered by Mr. Vasquez, was not agreed to by
a vote of 25 yeas and 29 nays.
Amendment #35, offered by Ms. McDonald Rivet, was not
agreed to by a vote of 25 yeas and 29 nays.
Amendment #24, offered by Mr. Riley, was not agreed to by a
vote of 25 yeas and 29 nays.
Amendment #55, offered by Mr. Mannion, was not agreed to by
a vote of 25 yeas and 29 nays.
Amendment #36, offered by Ms. Salinas, was not agreed to by
a vote of 25 yeas and 29 nays.
Amendment #45, offered by Ms. Budzinski, was not agreed to
by a vote of 25 yeas and 29 nays.
Mr. Austin Scott made a motion to move the previous
question on the amendment in the nature of a substitute to the
Committee Print. A recorded vote was requested, and the motion
was agreed to by a vote of 29 yeas and 25 nays.
The Committee voted on the adoption of the amendment in the
nature of a substitute offered by Chairman Thompson. A recorded
vote was requested and the amendment in the nature of a
substitute was adopted by a vote of 29 yeas and 25 nays.
Mr. Johnson moved that the Committee transmit the
recommendation of this committee and all appropriate
accompanying material, including minority, additional,
supplemental, or dissenting views, to the House Committee on
the Budget in order to comply with the reconciliation directive
included in section 2001 of the concurrent resolution on the
budget for fiscal year 2025, H. Con. Res. 14, and consistent
with Section 310 of the Congressional Budget and Impoundment
Act of 1974. A recorded vote was requested, and the motion was
agreed to by a vote of 29 yeas and 25 nays.
Chairman Thompson advised Members that, consistent with
Committee and House rules, Members would have until the end of
the on Friday, May 16, 2025, to file such views with the
Committee. Without objection, staff were given the authority to
make any necessary clerical, technical, or conforming changes
to the Committee Report to reflect the intent of the Committee.
Chairman Thompson thanked the Members and the Committee meeting
was adjourned.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee on Agriculture's
oversight findings and recommendations are reflected in the
body of this report.
New Budget Authority, Entitlement Authority,
and Tax Expenditures
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives.
Congressional Budget Office Estimates
With respect to the requirements of clause 3(c)(3) of rule
XIII of the Rules of the House of Representatives and sections
402 and 423 of the Congressional Budget Act of 1974, the
Committee has requested but not received a cost estimate for
this bill from the Director of Congressional Budget Office. The
Chairman of the Committee shall cause such estimate and
statement to be printed in the Congressional Record upon its
receipt by the Committee.
Earmark Statement
This measure does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(e), 9(f), or 9(g) of rule XXI of the Rules of the
House Representatives.
Performance Goals and Objectives
With respect to the requirements of clause 3(c)(4) of rule
XIII, the performance goals and objectives of this measure are
deficit reduction through changes in the laws within the
jurisdiction of the Committee on Agriculture as required by H.
Con. Res 14, the fiscal year 2026 budget resolution.
Advisory Committee Statement
No advisory committee within the meaning of section 5(b) of
the Federal Advisory Committee Act was created by this measure.
Applicability to the Legislative Branch
The Committee finds that the measure does not relate to the
terms and conditions of employment or access to public services
or accommodations within the meaning of section 102(b)(3) of
the Congressional Accountability Act (Public Law 104-1).
Federal Mandates Statement
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
Duplication of Federal Programs
This measure does not establish or reauthorize a program of
the Federal Government known to be duplicative of another
Federal program, a program that was included in any report from
the Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139, or a program related to a
program identified in the most recent Catalog of Federal
Domestic Assistance.
Changes in Existing Law
At the time of transmission to the Committee on Budget, a
comparative print (Ramseyer) showing changes in existing law
was not available to the Committee.
DISSENTING VIEWS
May 16, 2025
We write to express our dismay over the partisan
reconciliation bill that was advanced out of the House
Agriculture Committee on a party-line vote the evening of May
14, 2025. The policies included in the bill are backward and
put our country on the wrong track. Taking food assistance away
from millions of American children, seniors, veterans and
people with disabilities to fund tax breaks for the wealthy and
large corporations will have long-term costs on the country,
both in terms of increasing the deficit and with regard to
diminishing opportunities for our nation's children.
Furthermore, picking apart the farm bill--including some
farm policy in reconciliation while leaving the majority of the
farm bill behind--jeopardizes this year's and future farm
bills. The risk to farm country cannot be overstated:
successful farm bills rely on the farm bill coalition to pass
the House, the Senate and be signed into law. This coalition is
as broad and diverse as the farm bill itself and splintering it
without any consideration for future generations of farmers
does a great disservice to the farm families we represent as
members of the Agriculture Committee.
Dismantling Title IV of the farm bill with a $300 billion
cut to the Supplemental Nutrition Assistance Program (SNAP)
hurts everyone, particularly at a time when the cost of living
is squeezing every American and too many are just one paycheck
away from disaster. Seniors living on fixed incomes, parents
struggling to afford groceries for their children, people with
disabilities and their caretakers will all suffer when their
food is taken away. We should work together to make basic needs
programs like SNAP work better, not worse, for all Americans so
they remain available when people fall on hard times. These
historic cuts to food assistance will also hurt the farm and
food economy, because when the people our farmers feed cannot
afford food, the farmers that grow our food sell less. As
currently written, these cuts will extract at least $30 billion
from the farm economy.
This negative chain reaction will hurt hardworking people
beyond farmers' fields as well. Grocers, truckers, packaging
and production plant workers will lose income and jobs due to a
drop in food demand. As many as 27,000 retailers, largely in
rural counties, are at the highest risk of shutting their doors
due to the economic impact of these cuts to critical food
assistance for vulnerable Americans.\1\
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\1\https://www.americanprogress.org/article/snap-cuts-are-likely-
to-harm-more-than-27000-
retailers-nationwide/.
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Hunger is a human condition, and cutting anti-hunger, basic
needs programs comes with a human cost. The specific policies
used to effectuate these cuts are so far-reaching and extreme
that no family currently receiving food assistance will be
spared. Take, for example, the estimated $155 billion cost
shift to states proposed in this bill.
Increasing the current administrative cost-shift for states
to 75 percent and creating an unfunded mandate that attempts to
force states to pay for SNAP benefits will create a death
spiral for federal food assistance in America. These new
burdens will amount to hundreds of millions--or billions--in
demands on state budgets that they will be simply unable to
meet. State governments, particularly those with high poverty
rates or smaller tax bases, which are often more rural states,
will have limited options to cover these federally-mandated
budget shortfalls: take food assistance away from residents,
raise taxes or slash other programs and services, like funding
for their departments of agriculture, veterans services,
programs for treating addiction, and even public schools or
libraries. The bill also alters how SNAP payment error rates
are calculated, which will cause state error rates to balloon,
and their required cost-shift to increase significantly as a
result, exacerbating an already impossible scenario. The
Majority's bill creates systemic rot within food assistance
programs by defunding them, rather than making them work
better.
Furthermore, the bill adds more burdensome paperwork
requirements that will take away food assistance from seniors
and families with children. Expanding these requirements to
adults up to age 64 means more seniors struggling to find work
after losing their jobs will not only lose work, but also their
food assistance. They arbitrarily reclassify which children are
deemed ``dependents'' for the purposes of determining who
receives SNAP benefits, resulting in families with children
losing their ability to purchase healthy food. Current law uses
standards that are instinctively reasonable for most Americans.
People under the age of 18 are considered dependent on their
parents. Yet this bill decides that children older than six are
not dependent on their parents for food. This does not reduce
waste, fraud and abuse or improve program efficiency--but it
does take food away from an estimated 3 million people to fund
tax breaks for large corporations.
Of the many harmful policies included in this bill, another
targets the Thrifty Food Plan. Essentially, the Majority
requires that food assistance only be adjusted for inflation,
ignoring changing dietary guidelines, nutrition
recommendations, causing benefits to deteriorate over time. As
time passes, SNAP benefits would become impotent and
ineffectual. The 2021 Thrifty Food Plan update, the first of
its kind in nearly 50 years, lifted 2.9 million people out of
poverty and had even stronger impacts in many rural states like
Alabama, Oklahoma, and West Virginia, due to the insufficiency
of benefits after waiting nearly five decades to do a true
update.\2\ This policy wages a war of attrition against SNAP,
whittling away at its purchasing power until whatever food
assistance our nation's hungry children and seniors receive is
too meager to fulfill the program's core function: helping
vulnerable Americans meet their basic need for food.
---------------------------------------------------------------------------
\2\https://www.urban.org/sites/default/files/2025-04/
SNAP_Increase_Kept_2.9_Million_People_Out_of_Poverty_after_Thrifty_Food_
Plan_Update.pdf.
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The Nutrition Title of the farm bill should be debated and
improved as part of the farm bill--a piece of legislation that
failed to reach the House floor for a vote last Congress due to
a lack of support for a $30 billion cut to SNAP. This all-out
assault on the title's food assistance programs in a partisan
reconciliation process is a flashing red light indicating that
present and future farm bills are in danger.
This bill leaves the majority of the farm bill behind. The
last farm bill marked up in the House Agriculture Committee was
800 pages long. This reconciliation bill is 97 pages short. It
decimates Title IV and, while it breaks off bits and pieces of
other farm bill titles, it falls woefully short of meeting the
standard of being a serious piece of legislation that would
uplift rural communities and provide America's farmers,
ranchers, foresters and producers with the long-term stability
and regulatory certainty they need.
This bill includes nothing for rural development or the
farm credit system. It does nothing to provide U.S.-grown food
commodities with market opportunities through U.S. food aid
programs. Nothing in this bill helps address the wildfire
crisis or improve forest health; in fact, this bill takes us
backward by including harmful rescissions to popular forest
conservation programs. There is nothing in this bill to help
our energy independence by fostering renewable fuels markets
for farmers. Instead, the Majority cuts a full, five-year farm
bill off at the knees, extracting over $300 billion from farm
bill programs to fund tax breaks for the already rich.
This bill could have helped family farmers, the families
they feed and rural communities. The Majority had other
priorities in mind.
The Majority's reconciliation bill pits certain commodities
against others, and anti-hunger groups against farm groups. The
Majority could have brought everyone together--instead, they
chose to advance a bill that further divides our country by
favoring the ``haves'' at the expense of the ``have-nots.''
Bringing everyone back to the table and rebuilding trust will
take time. Rushing reckless cuts to food assistance programs
and busting up the farm bill coalition demonstrates that the
Majority prefers to spend its time on other things. Rural
communities and family farms will perish as a result.
This is not the first time Democrats have warned our
Republican colleagues that the long-term consequences of these
policies would hurt struggling farmers, hardworking parents and
children. We have said it publicly and privately, numerous
times. The Majority has not listened. Instead, they chose to
advance their partisan reconciliation bill on May 14, 2025.
Democrats voted against the reconciliation bill in
Committee. We will vote against the larger bill, which, in
addition to taking food away from children and seniors, takes
health care away from people through $625 billion in Medicaid
cuts, when it comes to the House floor for a vote. We hope that
between our markup and the floor vote, a handful of brave
Republicans will stand up and say, ``Enough is enough,'' and
decide to work with Democrats to improve basic needs programs
instead of destroying them and, ultimately, work with us in a
bipartisan fashion on a full, five-year farm bill. That is the
only way that farmers and the rural communities in which they
live, Americans working throughout the food supply chain and
our hungry neighbors will be empowered to thrive, together.
Sincerely,
Angie Craig,
Ranking Member.
Jonathan L. Jackson,
Jahana Hayes,
David Scott,
James P. McGovern,
Andrea Salinas,
Salud Carbajal,
Jim Costa,
John W. Mannion,
Nikki Budzinski,
Alma S. Adams, Ph.D.,
Shri Thanedar,
Shontel M. Brown,
Vice Ranking Member.
Gabe Vasquez,
April McClain Delaney,
Eugene Simon Vindman,
Kristen McDonald Rivet,
Sharice L. Davids,
Adam Gray,
Josh Riley,
Eric Sorensen,
Shomari Figures,
Jill Tokuda,
Chellie Pingree,
Members of Congress.
Committee on Armed Services,
House of Representatives,
Washington, DC, May 5, 2025.
Hon. Jodey C. Arrington,
Chairman, Committee on the Budget,
House of Representatives, Washington, DC.
Dear Chairman Arrington: Pursuant to the Concurrent
Resolution on the Budget for Fiscal Year 2025, I hereby
transmit these recommendations which have been approved by vote
of the Committee on Armed Services, and the appropriate
accompanying material including dissenting views, to the House
Committee on the Budget. This submission is in order to comply
with reconciliation directives included in H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025, and
is consistent with section 310 of the Congressional Budget and
Impoundment Control Act of 1974.
Sincerely,
Mike Rogers,
Chairman.
Committee Print, as Reported by the Committee on Armed Services
_______________________________________________________________________
(Providing for reconciliation pursuant to H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025)
_______________________________________________________________________
TITLE II--COMMITTEE ON ARMED SERVICES
SEC. 20001. ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
IMPROVING THE QUALITY OF LIFE FOR MILITARY
PERSONNEL.
(a) Appropriations.--In addition to amounts otherwise
available, there are appropriated to the Secretary of Defense
for fiscal year 2025, out of any money in the Treasury not
otherwise appropriated, to remain available until September 30,
2029--
(1) $230,480,000 for restoration and modernization
costs under the Marine Corps Barracks 2030 initiative;
(2) $119,000,000 for base operating support costs
under the Marine Corps Barracks 2030 initiative;
(3) $1,000,000,000 for Army, Navy, Air Force, and
Space Force sustainment, restoration, and
modernizations of military unaccompanied housing;
(4) $2,000,000,000 for the Defense Health Program;
(5) $2,900,000,000 to supplement the basic allowance
for housing payable to members of the Armed Forces,
notwithstanding section 403 of title 37, United States
Code;
(6) $50,000,000 for bonuses, special pays, and
incentive pays for members of the Armed Forces pursuant
to titles 10 and 37, United States Code;
(7) $10,000,000 for the Defense Activity for Non-
Traditional Education Support's Online Academic Skills
Course program for members of the Armed Forces;
(8) $100,000,000 for tuition assistance for members
of the Armed Forces pursuant to title 10, United States
Code;
(9) $100,000,000 for child care fee assistance for
members of the Armed Forces under part II of chapter 88
of title 10, United States Code;
(10) $590,000,000 to increase the Temporary Lodging
Expense Allowance under chapter 8 of title 37, United
States Code, to 21 days;
(11) $100,000,000 for Department of Defense Impact
Aid payments to local educational agencies under
section 2008 of title 10, United States Code;
(12) $10,000,000 for military spouse professional
licensure under section 1784 of title 10, United States
Code;
(13) $6,000,000 for Armed Forces Retirement Home
facilities; and
(14) $100,000,000 for the Defense Community
Infrastructure Program.
(b) Temporary Increase in Percentage of Value of Authorized
Investment in Certain Privatized Military Housing Projects.--
(1) In general.--During the period beginning on the
date of the enactment of this section and ending on
September 30, 2029, the Secretary concerned shall
apply--
(A) paragraph (1) of subsection (c) of
section 2875 of title 10, United States Code,
by substituting ``60 percent'' for ``33\ 1/3\
percent''; and
(B) paragraph (2) of such subsection by
substituting ``60 percent'' for ``45 percent''.
(2) Secretary concerned defined.--In this subsection,
the term ``Secretary concerned'' has the meaning given
such term in section 101 of title 10, United States
Code.
(c) Temporary Authority for Acquisition or Construction of
Privatized Military Unaccompanied Housing.--Section 2881a of
title 10, United States Code, is amended--
(1) by striking the heading and inserting ``Temporary
authority for acquisition or construction of privatized
military unaccompanied housing'';
(2) by striking ``Secretary of the Navy'' each place
it appears and inserting ``Secretary concerned'';
(3) by striking ``under the pilot projects'' each
place it appears and inserting ``pursuant to this
section'';
(4) in subsection (a)--
(A) by striking the heading and inserting
``In General''; and
(B) by striking ``carry out not more than
three pilot projects under the authority of
this section or another provision of this
subchapter to use the private sector'' and
inserting ``use the authority under this
subchapter to enter into contracts with
appropriate private sector entities'';
(5) in subsection (c), by striking ``privatized
housing'' and inserting ``privatized housing units'';
(6) by redesignating subsection (f) as subsection
(e); and
(7) in subsection (e) (as so redesignated)--
(A) by striking ``under the pilot programs''
and inserting ``under this section''; and
(B) by striking ``September 30, 2009'' and
inserting ``September 30, 2029''.
SEC. 20002. ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
SHIPBUILDING.
In addition to amounts otherwise available, there are
appropriated to the Secretary of Defense for fiscal year 2025,
out of any money in the Treasury not otherwise appropriated, to
remain available until September 30, 2029--
(1) $250,000,000 for the expansion of accelerated
Training in Defense Manufacturing program;
(2) $250,000,000 for United States production of
turbine generators for shipbuilding industrial base;
(3) $450,000,000 for United States additive
manufacturing for wire production and machining
capacity for shipbuilding industrial base;
(4) $492,000,000 for next-generation shipbuilding
techniques;
(5) $85,000,000 for United States-made steel plate
for shipbuilding industrial base;
(6) $50,000,000 for machining capacity for naval
propellers for shipbuilding industrial base;
(7) $110,000,000 for rolled steel and fabrication
facility for shipbuilding industrial base;
(8) $400,000,000 for expansion of collaborative
campus for naval shipbuilding;
(9) $450,000,000 for application of autonomy and
artificial intelligence to naval shipbuilding;
(10) $500,000,000 for the adoption of advanced
manufacturing techniques in the maritime industrial
base;
(11) $500,000,000 for additional dry-dock capability;
(12) $50,000,000 for the expansion of cold spray
repair technologies;
(13) $450,000,000 for additional maritime industrial
workforce development programs;
(14) $750,000,000 for additional supplier development
across the naval shipbuilding industrial base;
(15) $250,000,000 for additional advanced
manufacturing processes across the naval shipbuilding
industrial base;
(16) $4,600,000,000 for a second Virginia-class
submarine in fiscal year 2027;
(17) $5,400,000,000 for two additional Guided Missile
Destroyer (DDG) ships;
(18) $160,000,000 for advanced procurement for
Landing Ship Medium;
(19) $1,803,941,000 for procurement of Landing Ship
Medium;
(20) $295,000,000 for development of a second Landing
Craft Utility shipyard and production of additional
Landing Craft Utility;
(21) $100,000,000 for the procurement of commercial
logistics ships;
(22) $600,000,000 for the lease or purchase of new
ships through the National Defense Sealift Fund;
(23) $2,725,000,000 for the procurement of T-AO
oilers;
(24) $500,000,000 for cost-to-complete for rescue and
salvage ships;
(25) $300,000,000 for production of ship-to-shore
connectors;
(26) $695,000,000 for the implementation of a multi-
ship amphibious warship contract;
(27) $80,000,000 for accelerated development of
vertical launch system reloading at sea;
(28) $250,000,000 for expansion of Navy corrosion
control programs;
(29) $159,000,000 for leasing of ships for Marine
Corps operations;
(30) $1,534,000,000 for expansion of small unmanned
surface vessel production;
(31) $1,800,000,000 for expansion of medium unmanned
surface vessel production;
(32) $1,300,000,000 for expansion of unmanned
underwater vehicle production;
(33) $188,360,000 for the development and testing of
maritime robotic autonomous systems and enabling
technologies;
(34) $174,000,000 for the development of a Test
Resource Management Center robotic autonomous systems
proving ground;
(35) $250,000,000 for the development, production,
and integration of wave-powered unmanned underwater
vehicles;
(36) $2,100,000,000 for San Antonio-class Amphibious
Transport Dock (LPD); and
(37) $3,700,000,000 for America-class Amphibious
Assault Ship (LHA).
SEC. 20003. ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
INTEGRATED AIR AND MISSILE DEFENSE.
(a) Next Generation Missile Defense Technologies.--In
addition to amounts otherwise available, there are appropriated
to the Secretary of Defense for fiscal year 2025, out of any
money in the Treasury not otherwise appropriated, to remain
available until September 30, 2029--
(1) $183,000,000 for Missile Defense Agency special
programs;
(2) $250,000,000 for development and testing of
directed energy capabilities by the Under Secretary for
Research and Engineering;
(3) $300,000,000 for classified military space
superiority programs run by the Strategic Capabilities
Office;
(4) $500,000,000 for national security space launch
infrastructure;
(5) $2,000,000,000 for air moving target indicator
military satellites;
(6) $400,000,000 for expansion of Multi-Service
Advanced Capability Hypersonic Test Bed program;
(7) $5,600,000,000 for development of space-based and
boost phase intercept capabilities;
(8) $2,400,000,000 for the development of military
non-kinetic missile defense effects; and
(9) $7,200,000,000 for the development, procurement,
and integration of military space-based sensors.
(b) Layered Homeland Defense.--In addition to amounts
otherwise available, there are appropriated to the Secretary of
Defense for fiscal year 2025, out of any money in the Treasury
not otherwise appropriated, to remain available until September
30, 2029--
(1) $2,200,000,000 for acceleration of hypersonic
defense systems;
(2) $800,000,000 for accelerated development and
deployment of next-generation intercontinental
ballistic missile defense systems;
(3) $408,000,000 for Army space and strategic missile
test range infrastructure restoration and modernization
in the United States Indo-Pacific Command area of
operations west of the international dateline;
(4) $1,975,000,000 for improved ground-based missile
defense radars; and
(5) $530,000,000 for the design and construction of
Missile Defense Agency missile instrumentation range
safety ship.
SEC. 20004. ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
MUNITIONS AND DEFENSE SUPPLY CHAIN RESILIENCY.
(a) Appropriations.--In addition to amounts otherwise
available, there are appropriated to the Secretary of Defense
for fiscal year 2025, out of any money in the Treasury not
otherwise appropriated, to remain available until September 30,
2029--
(1) $400,000,000 for the development, production, and
integration of Navy and Air Force long-range anti-ship
missiles;
(2) $380,000,000 for production capacity expansion
for Navy and Air Force long-range anti-ship missiles;
(3) $490,000,000 for the development, production, and
integration of Navy and Air Force long-range air-to-
surface missiles;
(4) $94,000,000 for the development, production, and
integration of alternative Navy and Air Force long-
range air-to-surface missiles;
(5) $630,000,000 for the development, production, and
integration of long-range Navy air defense and anti-
ship missiles;
(6) $688,000,000 for the development, production, and
integration of long-range multi-service cruise
missiles;
(7) $250,000,000 for production capacity expansion
and supplier base strengthening of long-range multi-
service cruise missiles;
(8) $70,000,000 for the development, production, and
integration of short-range Navy and Marine Corps anti-
ship missiles;
(9) $100,000,000 for the development of an anti-ship
seeker for short-range Army ballistic missiles;
(10) $175,000,000 for production capacity expansion
for next-generation Army medium-range ballistic
missiles;
(11) $50,000,000 for the mitigation of diminishing
manufacturing sources for medium-range air-to-air
missiles;
(12) $250,000,000 for the procurement of medium-range
air-to-air missiles;
(13) $225,000,000 for the expansion of production
capacity for medium-range air-to-air missiles;
(14) $50,000,000 for the development of second
sources for components of short-range air-to-air
missiles;
(15) $325,000,000 for production capacity
improvements for air-launched anti-radiation missiles;
(16) $50,000,000 for the accelerated development of
Army next-generation medium-range anti-ship ballistic
missiles;
(17) $114,000,000 for the production of Army next-
generation medium-range ballistic missiles;
(18) $300,000,000 for the production of Army medium-
range ballistic missiles;
(19) $85,000,000 for the accelerated development of
Army long-range ballistic missiles;
(20) $400,000,000 for the production of heavyweight
torpedoes;
(21) $200,000,000 for the development, procurement,
and integration of commercial heavyweight torpedoes;
(22) $70,000,000 for the improvement of heavyweight
torpedo maintenance activities;
(23) $200,000,000 for the production of lightweight
torpedoes;
(24) $500,000,000 for the development, procurement,
and integration of maritime mines;
(25) $50,000,000 for the development, procurement,
and integration of new underwater explosives;
(26) $55,000,000 for the development, procurement,
and integration of lightweight multi-mission torpedoes;
(27) $80,000,000 for the production of sonobuoys;
(28) $150,000,000 for the development, procurement,
and integration of air-delivered long-range maritime
mines;
(29) $61,000,000 for the acceleration of Navy
expeditionary loitering munitions deployment;
(30) $50,000,000 for the acceleration of one-way
attack unmanned aerial systems with advanced autonomy;
(31) $1,000,000,000 for the expansion of the one-way
attack unmanned aerial systems industrial base;
(32) $3,500,000,000 for grants made pursuant to the
Industrial Base Fund established under section 4817 of
title 10, United States Code;
(33) $1,000,000,000 for grants and purchase
commitments made pursuant to the Industrial Base Fund
established under section 4817 of title 10, United
States Code;
(34) $200,000,000 for investments in solid rocket
motor industrial base through the Industrial Base Fund
established under section 4817 of title 10, United
States Code;
(35) $400,000,000 for investments in the emerging
solid rocket motor industrial base through the
Industrial Base Fund established under section 4817 of
title 10, United States Code;
(36) $42,000,000 for investments in second sources
for large-diameter solid rocket motors for hypersonic
missiles;
(37) $1,000,000,000 for the creation of next-
generation automated munitions production factories;
(38) $170,000,000 for the development of advanced
radar depot for repair, testing, and production of
radar and electronic warfare systems;
(39) $25,000,000 for the expansion of the Department
of Defense industrial base policy analysis workforce;
(40) $30,300,000 for the repair of Army missiles;
(41) $100,000,000 for the production of small and
medium ammunition;
(42) $2,500,000,000 for additional activities to
improve the United States production of critical
minerals through the National Defense Stockpile,
authorized by subchapter III of chapter 5 of title 50,
United States Code;
(43) $10,000,000 for the expansion of the Department
of Defense armaments cooperation workforce;
(44) $250,000,000 for the expansion of the Defense
Exportability Features program;
(45) $250,000,000 for the development of new
armaments cooperation programs;
(46) $350,000,000 for production of Navy long-range
air and missile defense interceptors;
(47) $93,000,000 for replacement of Navy long-range
air and missile defense interceptors;
(48) $100,000,000 for development of a second solid
rocket motor source for Navy air defense and anti ship
missiles;
(49) $65,000,000 for expansion of production capacity
of Missile Defense Agency long-range anti-ballistic
missiles;
(50) $225,000,000 for expansion of production
capacity for Navy air defense and anti-ship missiles;
(51) $103,300,000 for expansion of depot level
maintenance facility for Navy long-range air and
missile defense interceptors;
(52) $18,000,000 for creation of domestic source for
guidance section of Navy short-range air defense
missiles;
(53) $65,000,000 for integration of Army medium-range
air and missile defense interceptor with Navy ships;
(54) $176,100,000 for production of Army long-range
movable missile defense radar;
(55) $100,000,000 for accelerated fielding of Army
short-range gun-based air and missile defense system;
(56) $40,000,000 for development of low-cost
alternatives to air and missile defense interceptors;
(57) $50,000,000 for acceleration of Army next-
generation shoulder-fired air defense system;
(58) $91,000,000 for production of Army next-
generation shoulder-fired air defense system;
(59) $500,000,000 for development, production, and
integration of counter-unmanned aerial systems
programs;
(60) $350,000,000 for development, production, and
integration of non-kinetic counter-unmanned aerial
systems programs;
(61) $250,000,000 for development, production, and
integration of land-based counter-unmanned aerial
systems programs;
(62) $200,000,000 for development, production, and
integration of ship-based counter-unmanned aerial
systems programs; and
(63) $400,000,000 for acceleration of hypersonic
strike programs.
(b) Appropriations.--In addition to amounts otherwise
available, there is appropriated to the Secretary of Defense,
out of any money in the Treasury not otherwise appropriated, to
remain available until September 30, 2029, $500,000,000 to the
``Department of Defense Credit Program Account'' to carry out
the capital assistance program, including loans, loan
guarantees, and technical assistance, established under section
149(e) of title 10, United States Code, for the development of
reliable sources of critical minerals: Provided, That--
(1) such amounts are available to subsidize gross
obligations for the principal amount of direct loans,
and total loan principal, any part of which is to be
guaranteed, not to exceed $100,000,000,000; and
(2) such amounts are available to cover all costs and
expenditures as provided under section 149(e)(5)(B) of
title 10, United States Code.
SEC. 20005. ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR SCALING
LOW-COST WEAPONS INTO PRODUCTION.
(a) Appropriations.--In addition to amounts otherwise
available, there are appropriated to the Secretary of Defense
for fiscal year 2025, out of any money in the Treasury not
otherwise appropriated, to remain available until September 30,
2029--
(1) $25,000,000 for the Office of Strategic Capital
Global Technology Scout program;
(2) $1,100,000,000 for the expansion of the small
unmanned aerial system industrial base;
(3) $400,000,000 for the development and deployment
of the Joint Fires Network and associated joint battle
management capabilities;
(4) $400,000,000 for the expansion of advanced
command-and-control tools to combatant commands and
military departments;
(5) $100,000,000 for the development of shared secure
facilities for the defense industrial base;
(6) $50,000,000 for the creation of additional
Defense Innovation Unit OnRamp Hubs;
(7) $250,000,000 for the acceleration of Strategic
Capabilities Office programs;
(8) $650,000,000 for the expansion of Mission
Capabilities office joint prototyping and
experimentation activities for military innovation;
(9) $500,000,000 for the accelerated development and
integration of advanced 5G/6G technologies for military
use;
(10) $25,000,000 for testing of simultaneous transmit
and receive technology for military spectrum agility;
(11) $50,000,000 for the development, procurement,
and integration of high-altitude stratospheric balloons
for military use;
(12) $120,000,000 for the development, procurement,
and integration of long-endurance unmanned aerial
systems for surveillance;
(13) $40,000,000 for the development, procurement,
and integration of alternative positioning and
navigation technology to enable military operations in
contested electromagnetic environments;
(14) $750,000,000 for the acceleration of innovative
military logistics and energy capability development
and deployment;
(15) $120,000,000 for the acceleration of development
of small modular nuclear reactors for military use;
(16) $1,000,000,000 for the expansion of programs to
accelerate the procurement and fielding of innovative
technologies;
(17) $90,000,000 for the development of reusable
hypersonic technology for military strikes and
intelligence;
(18) $2,000,000,000 for the expansion of Defense
Innovation Unit scaling of commercial technology for
military use;
(19) $500,000,000 to prevent delays in delivery of
attritable autonomous military capabilities;
(20) $1,000,000,000 for the development, procurement,
and integration of low-cost cruise missiles;
(21) $500,000,000 for the development, procurement,
and integration of exportable low-cost cruise missiles;
(22) $124,000,000 for improvements to Test Resource
Management Center artificial intelligence capabilities;
(23) $145,000,000 for the development of artificial
intelligence to enable one-way attack unmanned aerial
systems and naval systems;
(24) $250,000,000 for the development of the Test
Resource Management Center digital test environment;
(25) $250,000,000 for the advancement of the
artificial intelligence ecosystem;
(26) $250,000,000 for the expansion of Cyber Command
artificial intelligence lines of effort;
(27) $250,000,000 for the acceleration of the Quantum
Benchmarking Initiative;
(28) $500,000,000 for the expansion and acceleration
of qualification activities and technical data
management to enhance competition in defense industrial
base;
(29) $400,000,000 for the expansion of the defense
manufacturing technology program; and
(30) $685,000,000 for military cryptographic
modernization activities.
(b) Appropriations.--In addition to amounts otherwise
available, there are appropriated to the Secretary of Defense,
out of any money in the Treasury not otherwise appropriated, to
remain available until September 30, 2029, $1,000,000,000 to
the ``Department of Defense Credit Program Account'' to carry
out the capital assistance program, including loans, loan
guarantees, and technical assistance, established under section
149(e) of title 10, United States Code: Provided, That--
(1) such amounts are available to subsidize gross
obligations for the principal amount of direct loans,
and total loan principal, any part of which is to be
guaranteed, not to exceed $100,000,000,000; and
(2) such amounts are available to cover all costs and
expenditures as provided under section 149(e)(5)(B) of
title 10, United States Code.
SEC. 20006. ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
IMPROVING THE EFFICIENCY AND CYBERSECURITY OF THE
DEPARTMENT OF DEFENSE.
In addition to amounts otherwise available, there are
appropriated to the Secretary of Defense for fiscal year 2025,
out of any money in the Treasury not otherwise appropriated, to
remain available until September 30, 2029--
(1) $150,000,000 for business systems replacement to
accelerate the audits of the financial statements of
the Department of Defense pursuant to chapter 9A and
section 2222 of title 10, United States Code;
(2) $200,000,000 for the deployment of automation and
artificial intelligence to accelerate the audits of the
financial statements of the Department of Defense
pursuant to chapter 9A and section 2222 of title 10,
United States Code;
(3) $10,000,000 for the improvement of the budgetary
and programmatic infrastructure of the Office of the
Secretary of Defense; and
(4) $20,000,000 for defense cybersecurity programs of
the Defense Advanced Research Projects Agency.
SEC. 20007. ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR AIR
SUPERIORITY.
In addition to amounts otherwise available, there are
appropriated to the Secretary of Defense for fiscal year 2025,
out of any money in the Treasury not otherwise appropriated, to
remain available until September 30, 2029--
(1) $3,150,000,000 to increase F-15EX aircraft
production;
(2) $361,220,000 to prevent the retirement of F-22
aircraft;
(3) $127,460,000 to prevent the retirement of F-15E
aircraft;
(4) $50,000,000 to accelerate installation of F-16
electronic warfare capability;
(5) $116,000,000 for C-17A Mobility Aircraft
Connectivity;
(6) $84,000,000 for KC-135 Mobility Aircraft
Connectivity;
(7) $440,000,000 to increase C-130J production;
(8) $474,000,000 to increase EA-37B production;
(9) $300,000,000 for Air Force classified programs;
(10) $678,000,000 to accelerate the Collaborative
Combat Aircraft program;
(11) $400,000,000 to accelerate production of the F-
47 aircraft;
(12) $230,000,000 for Navy classified programs;
(13) $500,000,000 accelerate the FA/XX aircraft;
(14) $100,000,000 for production of Advanced Aerial
Sensors;
(15) $160,000,000 to accelerate V-22 nacelle
improvement; and
(16) $100,000,000 to accelerate production of MQ-25
aircraft.
SEC. 20008. ENHANCEMENT OF RESOURCES FOR NUCLEAR FORCES.
(a) DOD Appropriations.--In addition to amounts otherwise
available, there are appropriated to the Secretary of Defense
for fiscal year 2025, out of any money in the Treasury not
otherwise appropriated, to remain available until September 30,
2029--
(1) $1,500,000,000 for risk reduction activities for
the Sentinel intercontinental ballistic missile
program;
(2) $4,500,000,000 for acceleration of the B-21 long-
range bomber aircraft;
(3) $500,000,000 for improvements to the Minuteman
III intercontinental ballistic missile system;
(4) $100,000,000 for capability enhancements to
intercontinental ballistic missile reentry vehicles;
(5) $148,000,000 for the expansion of D5 missile
motor production;
(6) $400,000,000 to accelerate the development of
Trident D5LE2 submarine-launched ballistic missiles;
(7) $2,000,000,000 to accelerate the development,
procurement, and integration of the nuclear-armed sea-
launched cruise missile;
(8) $62,000,000 to convert Ohio-class submarine tubes
to accept additional missiles;
(9) $22,000,000 to enhance nuclear deterrence through
classified programs;
(10) $168,000,000 to accelerate the production of the
Survivable Airborne Operations Center program;
(11) $65,000,000 to accelerate the modernization of
nuclear command, control, and communications; and
(12) $210,300,000 for the increased production of MH-
139 helicopters.
(b) NNSA Appropriations.--In addition to amounts otherwise
available, there are appropriated to the Administrator of the
National Nuclear Security Administration for fiscal year 2025,
out of any money in the Treasury not otherwise appropriated, to
remain available until September 30, 2029--
(1) $200,000,000 to perform National Nuclear Security
Administration Phase 1 studies pursuant to section 3211
of the National Nuclear Security Administration Act (50
U.S.C. 2401);
(2) $540,000,000 to address deferred maintenance and
repair needs of the National Nuclear Security
Administration pursuant to section 3211 of the National
Nuclear Security Administration Act (50 U.S.C. 2401);
(3) $1,000,000,000 to accelerate the construction of
National Nuclear Security Administration facilities
pursuant to section 3211 of the National Nuclear
Security Administration Act (50 U.S.C. 2401);
(4) $400,000,000 to accelerate the development,
procurement, and integration of the warhead for the
nuclear-armed sea-launched cruise missile pursuant to
section 3211 of the National Nuclear Security
Administration Act (50 U.S.C. 2401);
(5) $500,000,000 to accelerate primary capability
modernization pursuant to section 3211 of the National
Nuclear Security Administration Act (50 U.S.C. 2401);
(6) $500,000,000 to accelerate secondary capability
modernization pursuant to section 3211 of the National
Nuclear Security Administration Act (50 U.S.C. 2401);
and
(7) $100,000,000 to accelerate domestic uranium
enrichment centrifuge deployment for defense purposes
pursuant to section 3211 of the National Nuclear
Security Administration Act (50 U.S.C. 2401).
SEC. 20009. ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES TO IMPROVE
CAPABILITIES OF UNITED STATES INDO-PACIFIC COMMAND.
In addition to amounts otherwise available, there are
appropriated to the Secretary of Defense for fiscal year 2025,
out of any money in the Treasury not otherwise appropriated, to
remain available until September 30, 2029--
(1) $365,000,000 for Army exercises and operations in
the Western Pacific area of operations;
(2) $53,000,000 for Special Operations Command
exercises and operations in the Western Pacific area of
operations;
(3) $47,000,000 for Marine Corps exercises and
operations in Western Pacific area of operations;
(4) $90,000,000 for Air Force exercises and
operations in Western Pacific area of operations;
(5) $532,600,000 for the Pacific Air Force biennial
large-scale exercise;
(6) $19,000,000 for the development of naval small
craft capabilities;
(7) $35,000,000 for military additive manufacturing
capabilities in the United States Indo-Pacific Command
area of operations west of the international dateline;
(8) $450,000,000 for the development of airfields
within the area of operations of United States Indo-
Pacific Command;
(9) $1,100,000,000 for development of infrastructure
within the area of operations of United States Indo-
Pacific Command;
(10) $124,000,000 for mission networks for United
States Indo-Pacific Command;
(11) $100,000,000 for Air Force regionally based
cluster pre-position base kits;
(12) $25,000,000 to explore the revitalization of
existing Arctic naval infrastructure;
(13) $90,000,000 for the accelerated development of
non-kinetic capabilities;
(14) $20,000,000 for military exercises with Taiwan;
(15) $23,000,000 for anti-submarine sonar arrays;
(16) $30,000,000 for intelligence, surveillance, and
reconnaissance capabilities for United States Africa
Command;
(17) $30,000,000 for intelligence, surveillance, and
reconnaissance capabilities for United States Indo-
Pacific Command;
(18) $400,000,000 for the development, coordination,
and deployment of economic competition effects within
the Department of Defense;
(19) $10,000,000 for the expansion of Department of
Defense workforce for economic competition;
(20) $1,000,000,000 for offensive cyber operations;
(21) $500,000,000 for the Joint Training Team;
(22) $300,000,000 for the procurement of mesh network
communications capabilities for Special Operations
Command Pacific;
(23) $850,000,000 for activities to protect United
States interests and deter Chinese Communist Party
aggression through provision of military support and
assistance to the military, central government security
forces, and central government security agencies of
Taiwan;
(24) $200,000,000 for acceleration of Guam Defense
System program;
(25) $4,029,000,000 for classified military space
superiority programs;
(26) $68,000,000 for Space Force facilities
improvements;
(27) $100,000,000 for ground moving target indicator
military satellites; and
(28) $528,000,000 for DARC and SILENTBARKER military
space situational awareness programs.
SEC. 20010. ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
IMPROVING THE READINESS OF THE ARMED FORCES.
In addition to amounts otherwise available, there are
appropriated to the Secretary of Defense for fiscal year 2025,
out of any money in the Treasury not otherwise appropriated, to
remain available until September 30, 2029--
(1) $1,400,000,000 for a pilot program on OPN-8
maritime spares and repair rotable pool;
(2) $700,000,000 for a pilot program on OPN-8
maritime spares and repair rotable pool for amphibious
ships;
(3) $2,118,000,000 for readiness packages to keep Air
Force aircraft mission capable;
(4) $1,500,000,000 for Army depot modernization and
capacity enhancement;
(5) $2,000,000,000 for Navy depot and shipyard
modernization and capacity enhancement;
(6) $250,000,000 for Air Force depot modernization
and capacity enhancement;
(7) $1,391,000,000 for the enhancement of Special
Operations Command equipment and readiness;
(8) $500,000,000 for National Guard unit readiness;
(9) $400,000,000 for Marine Corps readiness and
capabilities;
(10) $20,000,000 for upgrades to Marine Corps utility
helicopters;
(11) $310,000,000 for next-generation vertical lift,
assault, and intra-theater aeromedical evacuation
aircraft;
(12) $75,000,000 for the procurement of anti-lock
braking systems for Army wheeled transport vehicles;
(13) $230,000,000 for the procurement of Army wheeled
combat vehicles;
(14) $63,000,000 for the development of advanced
rotary-wing engines;
(15) $241,000,000 for the development, procurement,
and integration of Marine Corps amphibious vehicles;
(16) $250,000,000 for the procurement of Army tracked
combat transport vehicles; and
(17) $98,000,000 for the enhancement of Army light
rotary-wing capabilities.
SEC. 20011. IMPROVING DEPARTMENT OF DEFENSE BORDER SUPPORT AND COUNTER-
DRUG MISSIONS.
In addition to amounts otherwise available, there are
appropriated to the Secretary of Defense for fiscal year 2025,
out of any money in the Treasury not otherwise appropriated, to
remain available until September 30, 2029, $5,000,000,000 for
activities in support of border operations, including
deployment of military personnel, operations and maintenance,
counter-narcotics and counter-transnational criminal
organization mission support, the operation of and construction
in national defense areas, the temporary detention of migrants
on Department of Defense installations, and the repatriation of
persons in support of law enforcement activities, pursuant to
sections 272, 277, 284, and 2672 of title 10, United States
Code.
SEC. 20012. ENHANCEMENT OF MILITARY INTELLIGENCE PROGRAMS.
In addition to amounts otherwise available, there are
appropriated to the Secretary of Defense for fiscal year 2025,
out of any money in the Treasury not otherwise appropriated, to
remain available until September 30, 2029, $2,000,000,000 for
the enhancement of military intelligence programs.
SEC. 20013. DEPARTMENT OF DEFENSE OVERSIGHT.
(a) Office of the Secretary of Defense.--In addition to
amounts otherwise available, there is appropriated to the
Inspector General of the Department of Defense for fiscal year
2025, out of any money in the Treasury not otherwise
appropriated, $10,000,000, to remain available through
September 30, 2029, to carry out this section.
(b) Oversight of Programs.--The Inspector General shall
monitor Department of Defense activities for which funding is
appropriated in this title, including--
(1) programs with mutual technological dependencies;
(2) programs with related data management and data
ownership considerations;
(3) programs particularly vulnerable to supply chain
disruptions and long lead time components; and
(4) programs involving classified matters.
(c) Classified Matters.--Not later than 30 days after the
date of the enactment of this title, the Chairs of the
Committees on Armed Services of the Senate and House of
Representatives shall jointly transmit to the Department of
Defense a classified memorandum regarding amounts made
available in this title related to classified matters.
SEC. 20014. MILITARY CONSTRUCTION PROJECTS AUTHORIZED.
(a) Authorization of Appropriations.--Funds are hereby
authorized to be appropriated for military construction, land
acquisition, and military family housing functions of each
military department (as defined in section 101(a) of title 10,
United States Code) as specified in this title.
(b) Spending Plan.--Not later than 30 days after the date of
the enactment of this title, the Secretary of each military
department shall submit to the congressional defense committees
(as defined in section 101(a) of title 10, United States Code)
a detailed spending plan by project for all funds made
available by this title to be expended on military construction
projects.
SEC. 20015. PLAN REQUIRED.
(a) In General.--Not later than 45 days after the date of the
enactment of this title, the Secretary of Defense shall submit
to the Committees on Armed Services of the Senate and the House
of Representatives a spending, expenditure, or operating plan
for amounts made available pursuant to this title. Such plan
shall include the same level of detail as required for the
report submitted under section 8007 of division A of the
Further Consolidated Appropriations Act, 2024 (Public Law 118-
47; 138 Stat. 482).
(b) Expenditure Report.--Not later than one year after the
date of enactment of this title, and annually thereafter, the
Secretary shall submit to the Committees on Armed Services of
the Senate and the House of Representative a report that
includes a description of any expenditures made pursuant to the
plan required under subsection (a).
SEC. 20016. LIMITATION ON AVAILABILITY OF FUNDS.
The funds made available under this title may not be used to
enter into any agreement under which any payment of such funds
could be outlaid or disbursed after September 30, 2034.
CONTENTS
Page
EXPLANATION OF PROVISIONS........................................ 122
TITLE II--COMMITTEE ON ARMED SERVICES............................ 122
Sec. 20001--Enhancement of Department of Defense Resources
for Improving the Quality of Life for Military Personnel... 122
Sec. 20002--Enhancement of Department of Defense Resources
for Shipbuilding........................................... 122
Sec. 20003--Enhancement of Department of Defense Resources
for Integrated Air and Missile Defense..................... 122
Sec. 20004--Enhancement of Department of Defense Resources
for Munitions and Supply Chain Resiliency.................. 122
Sec. 20005--Enhancement of Department of Defense Resources
for Scaling Low-Cost Weapons into Production............... 123
Sec. 20006--Enhancement of Department of Defense Resources
for Improving the Efficiency and Cybersecurity of the
Department of Defense...................................... 123
Sec. 20007--Enhancement of Department of Defense Resources
for Air Superiority........................................ 123
Sec. 20008--Enhancement of Resources for Nuclear Forces...... 123
Sec. 20009--Enhancement of Department of Defense Resources to
Improve Capabilities of United States Indo-Pacific Command. 123
Sec. 20010--Enhancement of Department of Defense Resources
for Improving the Readiness of the Armed Forces............ 124
Sec. 20011--Improving Department of Defense Border Support
and Counterdrug Missions................................... 124
Sec. 20012--Enhancement of Military Intelligence Programs.... 124
Sec. 20013--Department of Defense Oversight.................. 124
Sec. 20014--Military Construction Projects Authorized........ 124
Sec. 20015--Plan Required.................................... 124
Sec. 20016--Limitation on Availability of Funds.............. 124
COMMITTEE CONSIDERATION.......................................... 124
VOTES OF THE COMMITTEE........................................... 125
OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE....... 149
Committee Oversight Findings and Recommendations............. 149
Statement of General Performance Goals and Objectives........ 149
Duplication of Federal Programs.............................. 149
Congressional Earmarks, Limited Tax Benefits, and Limited
Tariff Benefits............................................ 149
Federal Mandates Statement................................... 149
Federal Advisory Committee Statement......................... 149
Applicability to the Legislative Branch...................... 149
New Budget Authority, Entitlement Authority, and Tax
Expenditures............................................... 149
Committee Cost Estimate...................................... 150
Congressional Budget Office Estimate......................... 150
CHANGES IN EXISTING LAW MADE BY THE COMMITTEE'S RECOMMENDATIONS,
AS TRANSMITTED................................................. 158
DISSENTING VIEWS................................................. 159
EXPLANATION OF PROVISIONS
Title II--Committee on Armed Services
SEC. 20001--ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
IMPROVING THE QUALITY OF LIFE FOR MILITARY PERSONNEL
This section provides over $7.3 billion in mandatory
funding and $1.24 billion in direct spending for the following
purposes: to renovate military barracks and unaccompanied
housing; to prevent shortages in the provision of healthcare
services under the Defense Health Program; to provide
supplemental payments of Basic Allowance Housing to military
personnel; to extend eligibility for Temporary Lodging Expense
Allowance from 14 to 21 days to cover out-of-pocket expenses
for servicemembers undergoing permanent change of station; to
expand educational opportunities and childcare fee assistance
for servicemembers; to expand professional licensure assistance
programs for military spouses; and to carry out additional
activities under the Defense Community Infrastructure Program.
This section also provides temporary authority for the military
services to enter into public-private partnerships for the
renovation of existing and construction of new unaccompanied
housing. CBO estimates this authority will increase direct
spending by $1.24 billion.
SEC. 20002--ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
SHIPBUILDING
This section provides $33.7 billion in mandatory funding
for the following purposes: to improve infrastructure and
expand capacity at private shipyards and throughout the
maritime industrial base supply chain; to construct new battle
force ships; and to develop and procure autonomous unmanned
surface and subsurface vessels.
SEC. 20003--ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
INTEGRATED AIR AND MISSILE DEFENSE
This section provides $24.7 billion in mandatory funding
for the following purposes: to develop and deploy new space and
terrestrial based capabilities to detect and interdict
missiles, including hypersonic missiles bound for the homeland
with kinetic and non-kinetic means; to accelerate the
deployment of ongoing missile defense systems, and to improve
all related infrastructure.
SEC. 20004--ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
MUNITIONS AND SUPPLY CHAIN RESILIENCY
This section provides $20.4 billion in mandatory funding
for the following purposes: to develop and acquire additional
stocks of hypersonic, air-to-air, cruise, anti-ship, ballistic,
and anti-radiation missiles; to develop and acquire additional
stocks of torpedoes, mines, and underwater explosives; to
develop and acquire additional stocks of munitions, ammunition,
and one way attack autonomous systems; to improve
infrastructure and expand capacity in the munitions industrial
base; to expand domestic capacity to mine and refine rare earth
elements and critical minerals; and to develop and acquire
additional missile defense interceptors, counter UAS systems,
and other air defense systems. This section also provides
mandatory funds for loan and loan guarantees to develop
reliable sources of critical minerals.
SEC. 20005--ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR SCALING
LOW-COST WEAPONS INTO PRODUCTION
This section provides $13.5 billion in mandatory funding
for the following purposes: to expand the capacity of the small
UAS industrial base; to develop and deploy joint command and
control technologies; to attract commercial innovation for
defense capabilities; to expand joint prototyping and
experimentation; to accelerate integrations of commercial
innovation to support defense logistics; to expand programs to
scale commercial technologies for defense purposes; to scale
the development of low cost, attritable weapons systems; to
improve the test, AI, and autonomy ecosystem; to expand quantum
computing research; and to improve qualification activities and
technical data management to enhance competition in the defense
industrial base. This section also provides mandatory funds for
Office of Strategic Capital loans and loan guarantees.
SEC. 20006--ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
IMPROVING THE EFFICIENCY AND CYBERSECURITY OF THE DEPARTMENT OF DEFENSE
This section provides $380 million in mandatory funding for
the following purposes: to replace antiquated business systems
and deploy automation and artificial intelligence systems to
accelerate the audit of Department financial statements; and to
improve the cybersecurity of Department information technology
systems.
SEC. 20007--ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR AIR
SUPERIORITY
This section provides $7.2 billion in mandatory funding for
the following purposes: to acquire additional and modernize
existing fighter, cargo, tanker and special purpose aircraft;
to prevent the retirement of certain fighter aircraft; and to
acquire next generation manned and unmanned aircraft.
SEC. 20008--ENHANCEMENT OF RESOURCES FOR NUCLEAR FORCES
This section provides $12.9 billion in mandatory funding
for the following purposes: to accelerate the modernization of
the nuclear deterrent; to improve the readiness of existing
nuclear forces; and to improve the infrastructure and expand
the scientific and production capacity of the nuclear
enterprise.
SEC. 20009--ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES TO IMPROVE
CAPABILITIES OF UNITED STATES INDO-PACIFIC COMMAND
This section provides $11.1 billion in mandatory funding
for the following purposes: to improve military readiness
through additional campaigning and exercises; to improve
existing and build new infrastructure to support military
operations; to improve kinetic, non-kinetic, and ISR
capabilities; to expand offensive cyber operations; to resource
economic security operations; to enhance space superiority; and
to expand joint military training and provide additional
military support to the government of Taiwan.
SEC. 20010--ENHANCEMENT OF DEPARTMENT OF DEFENSE RESOURCES FOR
IMPROVING THE READINESS OF THE ARMED FORCES
This section provides $11.5 billion in mandatory funding
for the following purposes: to acquire spare parts to keep
ships, aircraft, and land systems mission capable; to modernize
and improve the infrastructure of military depots and
shipyards; to acquire additional capabilities for Special
Operation Forces; to improve readiness of Marine Corps and
National Guard units; and to acquire additional capabilities
for Army and Marine Corps forces.
SEC. 20011--IMPROVING DEPARTMENT OF DEFENSE BORDER SUPPORT AND
COUNTERDRUG MISSIONS
This section provides $5 billion in mandatory funding for
the deployment and operation of military personnel and assets
in support of Department of Homeland Security activities to
secure the borders of the United States.
SEC. 20012--ENHANCEMENT OF MILITARY INTELLIGENCE PROGRAMS
This section provides $2 billion in mandatory funding to
improve certain military intelligence programs.
SEC. 20013--DEPARTMENT OF DEFENSE OVERSIGHT
This section provides $10 million in mandatory funding to
the Department of Defense Inspector General to audit funds
provided under this title. It also provides for the
transmission to the Department of a classified memorandum
regarding funds made available under this title for classified
programs.
SEC. 20014--MILITARY CONSTRUCTION PROJECTS AUTHORIZED
This section provides authorization to use military
construction funds provided under this title and requires the
military departments to submit an expenditure plan to Congress
for military construction projects funded under this title.
SEC. 20015--PLAN REQUIRED
This section requires the Secretary of Defense to submit an
expenditure plan to Congress for funding provided under this
title. It also requires annual reports to Congress on the
expenditure of funds made available under this title.
SEC. 20016--LIMITATION ON AVAILABILITY OF FUNDS
This section prohibits the outlay of funds provided under
this title beyond September 30, 2034.
COMMITTEE CONSIDERATION
On April 29, 2025, the Committee on Armed Services met in
open session to consider the Committee Print providing for
reconciliation pursuant to H. Con. Res. 14, the Concurrent
Resolution on the Budget for Fiscal Year 2025. The committee
agreed to an amendment in the nature of a substitute offered by
Chairman Rogers by recorded vote, 35-21. The committee voted to
transmit the recommendations of the committee by recorded vote,
35-21, a quorum being present.
VOTES OF THE COMMITTEE
In accordance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, recorded votes were taken with
respect to the committee's consideration of the Committee Print
providing for reconciliation pursuant to H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025. The
record of these votes is contained in the following pages.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
Committee Oversight Findings and Recommendations
Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the House of Representatives, the committee's
oversight findings and recommendations are reflected in the
descriptive portions of this report.
Statement of General Performance Goals and Objectives
Pursuant to clause (3)(c)(4) of rule XIII of the House of
Representatives, the performance goals and objectives of this
title are to increase spending through changes in laws within
the jurisdiction of the Committee on Armed Services as required
by H. Con. Res. 14, the Concurrent Resolution on the Budget for
Fiscal Year 2025.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the House of
Representatives, no provision of this title is known to be
duplicative of another Federal program, including any program
that was included in a report to Congress pursuant to section
21 of Public Law 111-139 or the most recent Catalog of Federal
Domestic Assistance.
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI of the
House of Representatives, the committee finds that this title
contains no earmarks, limited tax benefits, or limited tariff
benefits.
Federal Mandates Statement
The committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Federal Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
title.
Applicability to the Legislative Branch
The committee finds that this title does not relate to the
terms and conditions of employment or access to public services
or accommodations within the meaning of section 102(b)(3) of
the Congressional Accountability Act.
New Budget Authority, Entitlement Authority, and Tax Expenditures
Pursuant to clause 3(c)(2) of rule XIII, the Congressional
Budget Office estimate included in this report satisfies the
requirement for the committee to include an estimate of new or
increased budget authority, entitlement authority, or tax
expenditures or revenues.
Committee Cost Estimate
Pursuant to clause 3(d)(1) of rule XIII of the House of
Representatives, the committee adopts as its own the cost
estimate prepared by the Director of the Congressional Budget
Office pursuant to section 402 of the Congressional Budget Act
of 1974.
Congressional Budget Office Estimate
In compliance with clause 3(c)(3) of rule XIII of the House
of Representatives, the cost estimate prepared by the
Congressional Budget Office and submitted pursuant to section
402 of the Congressional Budget Act of 1974 is as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The legislation would:
Appropriate $150 billion, primarily for
military activities of the Department of Defense (DoD)
Modify authorities for privatizing military
housing
Estimated budgetary effects would mainly stem from:
Expending funds appropriated for DoD's
military activities
Areas of significant uncertainty include:
Anticipating the rate at which DoD and other
agencies can obligate the provided funds, which would
affect the rate of outlays and amounts that could
eventually be sequestered
Estimating the number of new agreements for
housing privatization
Legislation summary: H. Con. Res. 14, the Concurrent
Resolution on the Budget for Fiscal Year 2025, instructed the
House Committee on Armed Services to recommend legislative
changes that would increase deficits up to a specified amount
over the 2025-2034 period. As part of the reconciliation
process, the House Committee on Armed Services approved
legislation on April 29, 2025, that would increase deficits.
Estimated Federal cost: In CBO's estimation, the
reconciliation recommendations of the House Committee on Armed
Services would increase deficits by $144.0 billion over the
2025-2034 period. The estimated budgetary effects of the
legislation are shown in Table 1. The costs of the legislation
fall within budget functions 050 (national defense) and 700
(veterans benefits and services).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF RECONCILIATION RECOMMENDATIONS TITLE II, HOUSE COMMITTEE ON ARMED SERVICES, AS ORDERED REPORTED ON APRIL 29,
2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-------------------------------------------------------------------------------------------------------------------
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2025-2029 2025-2034
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING
Budget Authority.................. 150,273 125 -2,290 -708 180 0 0 0 0 0 147,580 147,580
Estimated Outlays................. 1,957 40,299 42,019 23,548 16,779 9,367 4,878 2,889 1,514 742 124,602 143,992
--------------------------------------------------------------------------------------------------------------------------------------------------------
Budget authority includes specified and estimated amounts.
Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted in summer 2025. CBO's estimates are
relative to its January 2025 baseline and cover the period from
2025 through 2034. Outlays of appropriated amounts were
estimated using historical obligation and spending rates for
similar programs.
Direct spending: Enacting this legislation would increase
direct spending by $144.0 billion over the 2025-2034 period.
(see Table 2). Almost all of that amount would result from
specified direct appropriations for defense activities ($142.8
billion in outlays), with additional estimated amounts related
to changes to military housing privatization authorities ($1.2
billion in outlays).
Appropriated amounts: The legislation would appropriate
$150.3 billion for 2025. Of that amount, almost all would be
for the Department of Defense (DoD), with the remainder for
nuclear weapons activities of the Department of Energy ($3.2
billion) and the Armed Forces Retirement Home ($6 million). CBO
expects that amounts appropriated by this legislation would be
subject to sequestration under the Balanced Budget and
Emergency Deficit Control Act of 1985. CBO estimates that a
portion of any unobligated balances from those appropriations
would be canceled in 2027, 2028, and 2029, which would reduce
the budget authority provided by this legislation. After
adjusting for the effects of sequestration, CBO estimates that,
on net, specified budget authority would total about $146.3
billion and outlays from that budget authority would total
$142.8 billion over the 2025-2034 period. The following
sections would appropriate specific amounts for the following
purposes:
Section 20002 would appropriate $33.8 billion for
shipbuilding programs, increasing outlays by $31.8 billion;
Section 20003 would appropriate $24.7 billion for
air and missile defense activities, increasing outlays by $23.5
billion;
Section 20004 would provide $20.7 billion for the
acquisition of munitions and sustainment of the defense
industrial base, increasing outlays by $19.5 billion;
Section 20005 would appropriate $13.5 billion to
expedite the delivery of low-cost weapons and capabilities,
increasing outlays by $13.0 billion;
Section 20006 would appropriate $0.4 billion to
improve the audit readiness of DoD's financial statements and
for cybersecurity programs, increasing outlays by $0.4 billion;
Section 20007 would provide $7.3 billion for air
superiority programs, increasing outlays by $6.8 billion;
Section 20008 would provide $12.9 billion for
improvements to nuclear forces (of which $3.2 billion would be
for the Department of Energy), increasing outlays by $12.6
billion;
Section 20009 would appropriate $11.1 billion to
improve the capabilities of the U.S. Indo-Pacific Command,
increasing outlays by $10.5 billion;
Section 20010 would appropriate $11.5 billion to
improve military readiness, increasing outlays by $10.9
billion;
Section 20011 would appropriate $5.0 billion for
border security activities, increasing outlays by $4.9 billion;
Section 20012 would appropriate $2.0 billion for
military intelligence programs, increasing outlays by $1.9
billion;
Section 20013 would appropriate $10 million for
oversight activities by the DoD Inspector General, increasing
outlays by $9 million; and
Section 20001 would increase budget authority by
$8.5 billion. Of that amount, $7.3 billion would be
specifically appropriated for efforts to improve the quality of
life for members of the armed forces, increasing outlays by
$6.9 billion.\1\ The remaining budget authority and outlays in
section 20001 would arise from changes to housing privatization
authorities, described in the next section.
---------------------------------------------------------------------------
\1\The amounts appropriated by section 20001 include $6 million for
the Armed Forces Retirement Home, which falls under budget function 700
(veterans benefits and services).
---------------------------------------------------------------------------
Estimated Amounts: Section 20001 would modify authorities
related to the privatization of military housing that CBO
estimates would increase direct spending by $1.2 billion over
the 2025-2034 period.
To finance housing privatization projects, DoD typically
enters into long-term contracts with private-sector developers
to renovate, construct, operate, and maintain military housing.
Those developers leverage DoD contributions, along with
expected future Basic Allowance for Housing (BAH) payments for
military personnel, to borrow additional capital to complete
the projects.
CBO considers acquiring housing for military personnel in
that manner to be a governmental activity, and that amounts
expended by such public-private ventures should be recorded in
the federal budget as outlays at the time they occur. When
proposed legislation would affect transactions involving third-
party financing of governmental activities, CBO's cost estimate
for the legislation shows budget authority for the full cost of
the project at the time the project is initiated. Outlays are
shown over the construction period for each project. In cost
estimates, CBO classifies those cash flows as direct spending.
Subsection 20001(b) would increase, through 2029, the limit
on the amount of funding that DoD can contribute to
privatization projects. Measured by the total capital costs of
a project, the section would raise DoD's authorized
contribution threshold from 33.3 percent to 60 percent. CBO
expects that providing additional funding would facilitate DoD
privatization projects that are not financially viable under
current law.
CBO estimates that extra funding would allow DoD to
initiate one additional privatized housing project by 2029.
Based on the cost of previous projects, CBO estimates that the
new project would cost $500 million. To account for the
uncertainty regarding the timing of that project, CBO evenly
distributed the estimated budget authority over the 2026-2029
period. Thus, after accounting for the time needed to complete
the construction of the project, CBO estimates that increasing
the funding limit would increase direct spending by $450
million over the 2025-2034 period.
Subsection 20001(c) would authorize DoD to pay higher rates
of BAH through 2029 to unaccompanied service members living in
military housing (such as barracks) provided under the Military
Housing Privatization Initiative. CBO expects that the
increased payments would facilitate DoD privatization projects
that are not financially viable under the current amounts for
that allowance.
CBO estimates that in each year from 2027 through 2029, DoD
would initiate one project for unaccompanied housing as a
result of the higher rates. Based on the cost of previous
projects and adjusting for inflation, CBO estimates that, on
average, projects would cost $270 million each. Accounting for
the time necessary to complete each project, CBO estimates that
enacting the higher BAH would increase direct spending by $780
million over the 2025-2034 period.
Uncertainty: Unobligated balances of appropriations
provided by this legislation would be subject to sequestration
procedures. The amount sequestered would depend on how quickly
the agencies can obligate the provided amounts. If obligation
rates differ from CBO's estimates, the amount of balances
canceled through sequestration could be greater or less than
estimated here.
In addition, the cost and number of the military housing
privatization projects arising from the temporary authorities
in section 20001 could differ from CBO's estimates.
Pay-As-You-Go Considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in Table 1.
Increase in Long-Term Net Direct Spending and Deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2035.
Mandates: The legislation contains no intergovernmental or
private-sector mandates as defined in the Unfunded Mandates
Reform Act.
Estimate Prepared By: Federal Costs: Caroline Dorminey (for
Procurement); William Ma (for Operation and Maintenance,
Defense Outlays); Christopher Mann (for Military Construction,
Family Housing); Aldo Prosperi (for National Defense Stockpile,
Research and Development); David Rafferty (for Military
Retirement); Dawn Sauter Regan (for Military and Civilian
Personnel); Matt Schmit (for Military Health System). Mandates:
Brandon Lever.
Estimate Reviewed By: David Newman, Chief, Defense,
International Affairs, and Veterans' Affairs Cost Estimates
Unit; Kathleen FitzGerald, Chief, Public and Private Mandates
Unit; Christina Hawley Anthony, Deputy Director of Budget
Analysis; H. Samuel Papenfuss, Deputy Director of Budget
Analysis; Chad Chirico, Director of Budget Analysis.
Estimate Approved By: Phillip L. Swagel, Director,
Congressional Budget Office.
TABLE 2.--ESTIMATED CHANGES IN DIRECT SPENDING UNDER RECONCILIATION RECOMMENDATIONS TITLE II, HOUSE COMMITTEE ON ARMED SERVICES, AS ORDERED REPORTED ON
APRIL 29, 2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-----------------------------------------------------------------------------------------------------------------------
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2025-2029 2025-2034
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING
Sec. 20002, Shipbuilding:
Budget Authority.............. 33,751 0 -765 -321 -44 0 0 0 0 0 32,621 32,621
Estimated Outlays............. 155 3,716 6,961 6,169 5,439 3,684 2,260 1,670 1,670 672 22,440 31,833
Sec. 20003, Air and Missile
Defense:
Budget Authority.............. 24,746 0 -460 -202 -46 0 0 0 0 0 24,038 24,038
Estimated Outlays............. 212 5,259 8,383 4,191 3,140 1,397 602 215 90 19 21,185 23,508
Sec. 20004, Munitions and
Industrial Base:
Budget Authority.............. 20,696 0 -401 -203 -43 0 0 0 0 0 20,049 20,049
Estimated Outlays............. 126 3,189 5,177 4,537 3,300 1,889 764 437 71 0 16,329 19,490
Sec. 20005, Low-Cost Weapons:
Budget Authority.............. 13,524 0 -172 -56 -11 0 0 0 0 0 13,285 13,285
Estimated Outlays............. 242 5,721 5,381 1,269 264 140 10 3 2 0 12,877 13,032
Sec. 20006, Audits and
Cybersecurity:
Budget Authority.............. 380 0 -2 -1 -1 0 0 0 0 0 376 376
Estimated Outlays............. 10 233 109 10 1 1 0 0 0 0 363 364
Sec. 20007, Air Superiority:
Budget Authority.............. 7,271 0 -140 -75 -17 0 0 0 0 0 7,039 7,039
Estimated Outlays............. 46 1,149 1,845 1,715 1,175 508 237 98 65 0 5,930 6,838
Sec. 20008, Nuclear Forces:
Budget Authority.............. 12,915 0 -154 -45 -11 0 0 0 0 0 12,705 12,705
Estimated Outlays............. 254 6,084 4,296 1,363 349 126 84 20 10 0 12,346 12,586
Sec. 20009, Indo-Pacific
Command:
Budget Authority.............. 11,119 0 -181 -81 -20 0 0 0 0 0 10,837 10,837
Estimated Outlays............. 145 3,443 3,068 1,525 1,290 623 305 98 38 6 9,471 10,541
Sec. 20010, Military Readiness:
Budget Authority.............. 11,546 0 -223 -85 -20 0 0 0 0 0 11,218 11,218
Estimated Outlays............. 111 2,710 3,257 2,218 1,388 598 317 180 59 15 9,684 10,853
Sec. 20011, Border Security:
Budget Authority.............. 5,000 0 -21 -12 -4 0 0 0 0 0 4,963 4,963
Estimated Outlays............. 151 3,569 958 113 41 19 10 0 0 0 4,832 4,861
Sec. 20012, Intelligence
Programs:
Budget Authority.............. 2,000 0 -13 -8 -3 0 0 0 0 0 1,976 1,976
Estimated Outlays............. 42 1,006 573 178 81 32 14 4 2 0 1,880 1,880
Sec. 20013, Inspector General:
Budget Authority.............. 10 0 -1 0 0 0 0 0 0 0 9 9
Estimated Outlays............. 0 2 1 3 3 0 0 0 0 0 9 9
Sec. 20001, Quality of Life:a
Budget Authority.............. 7,315 125 243 381 400 0 0 0 0 0 8,464 8,464
Estimated Outlays............. 463 4,218 2,010 257 308 350 275 164 70 30 7,256 8,145
Total Changes:
Budget Authority.............. 150,273 125 -2,290 -708 180 0 0 0 0 0 147,580 147,580
Estimated Outlays............. 1,957 40,299 42,019 23,548 16,779 9,367 4,878 2,889 1,514 742 124,602 143,992
Memorandums:
Military Housing Privatizationa
Estimated Budget Authority.... 0 125 395 395 405 0 0 0 0 0 1,320 1,230
Estimated Outlays............. 0 0 30 130 240 310 260 160 70 30 400 1230
Sequestrationb
Estimated Budget Authority.... 0 0 -2,685 -1,103 -225 0 0 0 0 0 -4,013 -4,013
Estimated Outlays............. 0 0 -2,685 -1,103 -225 0 0 0 0 0 -4,013 -4,013
--------------------------------------------------------------------------------------------------------------------------------------------------------
Budget authority includes estimated and specified amounts.
aIn addition to the amounts specifically appropriated, section 20001 would modify military housing privatization authorities, which CBO estimates would
increase direct spending by $1.2 billion over the 2025-2034 period. Those amounts are included in the $8.5 billion in budget authority and $8.1
billion in outlays for section 20001. The amounts shown here are included in the estimate for section 20001.
bIn total, this legislation would specifically appropriate $150.3 billion. Unobligated balances from those amounts would be subject to sequestration
under the Balanced Budget and Emergency Deficit Control Act of 1985. CBO estimates that a portion of any unobligated balances from those
appropriations would be canceled in 2027, 2028, and 2029, which could reduce the budget authority provided in this legislation. The estimated
reductions in budget authority and outlays from the sequestration of unobligated balances are included in each section for which CBO estimates there
would be unobligated balances and in the Total Changes above.
Changes in Existing Law Made by the Committee's Recommendations, as
Transmitted
Pursuant to clause 3(e) of rule XIII of the Rules of the
House of Representatives, a comparative print of changes in
existing law made by the Committee Print has been requested but
not received prior to transmission to the Committee on the
Budget.
DISSENTING VIEWS
There is clear bipartisan support among the members of this
committee for defense investments that support modernization,
readiness, innovation, and the quality of life of our service
members and their families. The ideal process for considering
these investments is the normal authorization and
appropriations process. For over six decades, this committee
has worked within this process and proven again and again its
ability to tackle the hardest and most controversial issues of
the day--and illustrated the value of working across the aisle
to solve the national security problems that matter to the
American people. Unfortunately, by rubber stamping this
proposed legislation and endorsing this folly, the committee
has roundly rejected its normal tradition of forceful and
bipartisan oversight.
There's no question that the Department of Defense has
requirements and that we as a country face threats and
challenges from around the world. We clearly need to meet those
threats and challenges, and we need to do so in ways that
promote efficiency and effectiveness and allow for greater
innovation. Unfortunately, it is equally true that gifting the
Pentagon an additional $150 billion with few to no guardrails,
on top of the nearly $900 billion in defense authorizations and
appropriations already passed, and without receiving the
President's Budget for Fiscal Year 2026 or even the execution
instructions for the Fiscal Year 2025 Continuing Resolution,
defies basic common sense. Paying for it with a combination of
debt borne by future generations and devastating cuts that can
only come from critical programs like Medicaid, the
Supplemental Nutrition Assistance Program, and student loan and
grant programs at the Department of Education is unacceptable.
Turning around and giving this giant blank check to a Pentagon
reeling from the chaos inflicted by Secretary of Defense
Hegseth, the irrational and destructive actions of Elon Musk
and his so-called Department of Government Efficiency, and a
President consumed only with loyalty, is beyond foolish.
This committee has yet to receive even the most basic
transparency information from the Pentagon and the Trump
Administration about important matters within its jurisdiction,
including leaks of classified information and the chaos
inflicted on the Department of Defense and its employees by
DOGE's opaque and misguided efforts. Rather than use this
opportunity to fulfill our responsibilities, most of our
Republican colleagues didn't show up during consideration of
this legislation. None--except for the Chairman--spoke or
engaged in the process in any meaningful way.
This legislation represents a failure of our responsibility
as Members of the committee entrusted with the immense
responsibility of careful and considered oversight of the
Department of Defense. I remain committed to working across the
aisle to pass a responsible budget and defense authorization
that meet our national security requirements, but we can and
must do this without exploding the deficit and debt while
giving trillions in tax cuts to the wealthy and willfully
turning a blind eye to Pentagon leaders more consumed with
vanity and culture wars than with actual management and
leadership.
Sincerely,
Adam Smith,
Ranking Member.
DISSENTING VIEWS
This reconciliation bill allocates an additional $150
billion to the Department of Defense, supplementing the $849.9
billion already authorized under the Fiscal Year 2025 National
Defense Authorization Act (NDAA). While I strongly support
investing in our military and national security, that
investment must not come at the expense of hardworking American
families. While there are portions of this bill that I would
support as submitted through the normal process, I cannot
support providing reconciliation funds by taking food from
school-aged children. Because of this, I am strongly opposed to
the passage of the proposed reconciliation package.
Cutting essential programs like Medicare, SNAP, and Head
Start--which millions rely on--to fund wasteful defense
initiatives is reckless and short-sighted. These cuts will have
devastating consequences for our most vulnerable communities,
undermining the very foundations of economic security and
opportunity that Americans depend on. We must pursue a balanced
approach to national defense--one that strengthens our military
while protecting critical social safety nets.
In addition to the fundamental flaws, this legislation
funds a litany of wasteful programs, further exacerbating
fiscal irresponsibility in defense spending. The Sentinel
program has spiraled into an 81% cost overrun, reaching $140.9
billion, with no clear strategic necessity. Meanwhile, Congress
is allocating $2 billion for the Nuclear-Armed Sea-Launched
Cruise Missile (SLCM-N)--a system that is redundant to existing
capabilities and, when combined with Sentinel, heightens the
risk of nuclear escalation with our adversaries.
The excessive funding for the Golden Dome proposal is
equally troubling, raising serious concerns about
effectiveness, cost, and oversight. Despite the Department of
Defense's failure to provide Congress with a plan or cost
estimate, my Republican colleagues are pushing for a $25
billion investment in a program with highly questionable
technical feasibility. Deploying space-based interceptors under
this initiative will fuel global instability, increasing
tensions with rival nations and further militarizing the space
domain. Rather than racing toward failure, we should be
carefully evaluating the strategic value, and risk, of these
programs.
President Trump's use of military aircraft for immigration
enforcement is deeply alarming, potentially unconstitutional,
and a wasteful misuse of our military resources. Despite my
formal requests for the Department of Defense to halt these
unjustified operations, the responses I have received have been
insufficient in addressing my concerns. These military
deportation flights transport fewer migrants yet cost three
times more than ICE's civilian aircraft. Allocating an
additional $5 billion to the Department of Defense for
``repatriation'' efforts, as this legislation does, is
unnecessary and fiscally irresponsible.
Legislation involving such massive expenditures must go
through Congress's normal authorization and appropriations
process. This is especially critical when funding decisions
threaten essential programs like healthcare and food
assistance. The American people deserve rigorous debate to
ensure Congress responsibly balances national security
priorities with the needs of our citizens. Instead, not only
was this bill rushed through without debate, but many of my
Republican colleagues failed to show up.
We cannot continue to waste billions on ineffective
programs and political legacy projects while ignoring the real
needs of the American people.
Sincerely,
John Garamendi,
Member of Congress.
House of Representatives,
Committee on Education and Workforce,
Washington, DC, May 8, 2025.
Hon. Jodey C. Arrington,
Chairman, Committee on the Budget,
House of Representatives, Washington, DC.
Dear Chairman Arrington: Pursuant to section 2001 of the
Concurrent Resolution on the Budget for Fiscal Year 2025, I
hereby transmit these recommendations which have been approved
by vote of the Committee on Education and Workforce and the
appropriate accompanying material including supplemental,
minority, additional, or dissenting views, to the House
Committee on the Budget. This submission is in order to comply
with reconciliation directives included in H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025, and
is consistent with section 310 of the Congressional Budget Act
of 1974.
Sincerely,
Tim Walberg,
Chairman.
Committee Print, as Reported by the Committee on Education and
Workforce
_______________________________________________________________________
(Providing for reconciliation pursuant to H.Con.Res. 14, the Concurrent
Resolution on the Budget for Fiscal Year 2025)
_______________________________________________________________________
TITLE III--COMMITTEE ON EDUCATION AND WORKFORCE
Subtitle A--Student Eligibility
SEC. 30001. STUDENT ELIGIBILITY.
(a) In General.--Section 484(a)(5) of the Higher Education
Act of 1965 (20 U.S.C. 1091(a)(5)) is amended to read as
follows:
``(5) be--
``(A) a citizen or national of the United
States;
``(B) an alien who is lawfully admitted for
permanent residence under the Immigration and
Nationality Act (8 U.S.C. 1101 et seq.);
``(C) an alien who--
``(i) is a citizen or national of the
Republic of Cuba;
``(ii) is the beneficiary of an
approved petition under section 203(a)
of the Immigration and Nationality Act
(8 U.S.C. 1153(a));
``(iii) meets all eligibility
requirements for an immigrant visa but
for whom such a visa is not immediately
available;
``(iv) is not otherwise inadmissible
under section 212(a) of such Act (8
U.S.C. 8 U.S.C. 1182(a)); and
``(v) is physically present in the
United States pursuant to a grant of
parole in furtherance of the commitment
of the United States to the minimum
level of annual legal migration of
Cuban nationals to the United States
specified in the U.S.-Cuba Joint
Communique on Migration, done at New
York September 9, 1994, and reaffirmed
in the Cuba-United States: Joint
Statement on Normalization of
Migration, Building on the Agreement of
September 9, 1994, done at New York May
2, 1995;
``(D) an alien described in section 401(a) of
the Additional Ukraine Supplemental
Appropriations Act, 2022 (Public Law 117-128; 8
U.S.C. 1101 note);
``(E) an alien described in section 2502(a)
of the Afghanistan Supplemental Appropriations
Act, 2022 (division C of Public Law 117-43; 8
U.S.C. 1101 note); or
``(F) an individual who lawfully resides in
the United States in accordance with a Compact
of Free Association referred to in section
402(b)(2)(G) of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8
U.S.C. 1612(b)(2)(G)); and''.
(b) Effective Date and Application.--The amendment made by
subsection (a) shall take effect on July 1, 2025, and shall
apply with respect to award year 2025-2026 and each subsequent
award year, as determined under the Higher Education Act of
1965.
SEC. 30002. AMOUNT OF NEED; COST OF ATTENDANCE; MEDIAN COST OF COLLEGE.
(a) Amount of Need.--Section 471 of the Higher Education Act
of 1965 (20 U.S.C. 1087kk) is amended by amending paragraph (1)
to read as follows:
``(1)(A) for award year 2025-2026, the cost of
attendance of such student; or
``(B) for award year 2026-2027, and each subsequent
award year, the median cost of college of the program
of study of such student, minus''.
(b) Cost of Attendance of a Program of Study.--
(1) Determination of cost of attendance of a program
of study.--
(A) In general.--Section 472(a) of the Higher
Education Act of 1965 (20 U.S.C. 1087ll(a)) is
amended--
(i) in paragraph (1), by striking
``carrying the same academic workload''
and inserting ``enrolled in the same
program of study'';
(ii) in paragraph (2), by striking
``same course of study'' and inserting
``same program of study''; and
(iii) in paragraph (14), by striking
``program'' and inserting ``program of
study''.
(B) Effective date.--The amendments made by
subparagraph (A) shall take effect on July 1,
2026, and shall apply with respect to award
year 2026-2027 and each subsequent award year,
as determined under the Higher Education Act of
1965.
(2) Disclosure.--Section 472(c) of the Higher
Education Act of 1965 (20 U.S.C. 1087ll(c)) is
amended--
(A) by inserting ``of each program of study
at the institution'' after ``cost of
attendance''; and
(B) by striking ``of the institution'' and
inserting ``of such programs of study at the
institution''.
(c) Determination of Median Cost of College.--Part F of title
IV of the Higher Education Act of 1965 (20 U.S.C. 1087kk) is
amended by inserting after section 472 (as so amended), the
following:
``SEC. 472A. DETERMINATION OF MEDIAN COST OF COLLEGE.
``(a) In General.--For the purpose of this title, the term
`median cost of college', when used with respect to a program
of study, offered by one or more institutions of higher
education for an award year, means the median of the cost of
attendance of the program of study (as determined under section
472) across all institutions of higher education offering such
a program of study for the preceding award year.
``(b) Program of Study Defined.--In this section and section
472, and part D:
``(1) In general.--The term `program of study'--
``(A) means an eligible program at an
institution of higher education that is
classified by a combination of--
``(i) one or more CIP codes; and
``(ii) one credential level,
determined by the credential awarded
upon completion of the program; and
``(B) does not include a program of study
abroad.
``(2) CIP code.--The term `CIP code' means the six-
digit taxonomic identification code assigned by an
institution of higher education to a specific program
of study at the institution, determined by the
institution of higher education in accordance with the
Classification of Instructional Programs published by
the National Center for Education Statistics.
``(3) Credential level.--
``(A) In general.--The term `credential
level' means the level of the degree or other
credential awarded by an institution of higher
education to students who complete a program of
study of the institution. Each degree or other
credential awarded by an institution shall be
categorized by the institution as either
undergraduate credential level or graduate
credential level.
``(B) Undergraduate credential.--When used
with respect to a credential or credential
level, the term `undergraduate credential'
includes credentials such as an undergraduate
certificate, an associate degree, a bachelor's
degree, and a post-baccalaureate certificate
(including the coursework specified in
paragraphs (3)(B) and (4)(B) of section
484(b)).
``(C) Graduate credential.--When used with
respect to a credential or credential level,
the term `graduate credential' includes
credentials such as a master's degree, a
doctoral degree, a professional degree, and a
postgraduate certificate.''.
(d) Exemption of Certain Assets.--
(1) In general.--Section 480(f)(2) of the Higher
Education Act of 1965 (20 U.S.C. 1087vv(f)(2)) is
amended--
(A) by striking ``net value of the'' and
inserting the following: ``net value of--
``(A) the'';
(B) by striking the period at the end and
inserting a semicolon; and
(C) by adding at the end the following:
``(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.''.
(2) Effective date.--The amendments made by paragraph
(1) shall take effect on July 1, 2026, and shall apply
with respect to award year 2026-2027 and each
subsequent award year, as determined under the Higher
Education Act of 1965.
Subtitle B--Loan Limits
SEC. 30011. LOAN LIMITS.
(a) Terminations of and Restrictions on Loan Authority.--
(1) Termination of authority to make subsidized loans
to undergraduate students.--Section 455(a)(3) of the
Higher Education Act of 1965 (20 U.S.C. 1087e(a)(3)) is
amended by adding at the end the following:
``(C) Termination of authority to make
subsidized loans to undergraduate students.--
Notwithstanding any provision of this part or
part B, except as provided in paragraph (4),
for any period of instruction beginning on or
after July 1, 2026--
``(i) an undergraduate student shall
not be eligible to receive a Federal
Direct Stafford loan under this part;
and
``(ii) the maximum annual amount of
Federal Direct Unsubsidized Stafford
loans such a student may borrow in any
academic year (as defined in section
481(a)(2)) or its equivalent shall be
the maximum annual amount for such
student determined under paragraph
(5)).''.
(2) Termination of authority to make federal direct
plus loans to any student borrower.--Section 455(a)(3)
of the Higher Education Act of 1965 (20 U.S.C.
1087e(a)(3)) is further amended by adding at the end
the following:
``(D) Termination of authority to make
federal direct plus loans to any student
borrower.--Notwithstanding any provision of
this part or part B, except as provided in
paragraph (4), for any period of instruction
beginning on or after July 1, 2026, a graduate
student or professional student shall not be
eligible to receive a Federal Direct PLUS Loan
under this part.''.
(3) Restriction on authority to make federal direct
plus loans to any parent borrower.--Section 455(a)(3)
of the Higher Education Act of 1965 (20 U.S.C.
1087e(a)(3)) is further amended by adding at the end
the following:
``(E) Restriction on authority to make
federal direct plus loans to any parent
borrower.--
``(i) In general.--Notwithstanding
any provision of this part or part B,
except as provided in clause (ii) and
paragraph (4), for any period of
instruction beginning on or after July
1, 2026, a parent, on behalf of a
dependent student, shall not be
eligible to receive a Federal Direct
PLUS Loan under this part.
``(ii) Exception.--A parent may
receive a Federal Direct PLUS Loan
under this part, on behalf of a
dependent student, in any academic year
(as defined in section 481(a)(2)) or
its equivalent if--
``(I) such student borrows
the maximum annual amount of
Federal Direct Unsubsidized
Stafford loans such student may
borrow in such academic year;
and
``(II) such maximum annual
amount is less than the cost of
attendance of the program of
study of such student.''.
(4) Conforming amendments.--Section 455(a)(3) of the
Higher Education Act of 1965 (20 U.S.C. 1087e(a)(3)) is
further amended--
(A) in the paragraph heading, by striking
``Termination of authority to make interest
subsidized loans to graduate and professional
students'' and inserting ``Terminations of and
restrictions on loan authority'';
(B) in subparagraph (A)--
(i) in the heading, by striking ``In
general'' and inserting ``Termination
of authority to make subsidized loans
to graduate and professional
students'';
(ii) in the matter preceding clause
(i), by striking ``beginning on or
after July 1, 2012'';
(iii) in clause (i), by striking ``a
graduate'' and inserting ``beginning on
or after July 1, 2012, a graduate'';
and
(iv) in clause (ii), by striking
``the maximum annual amount of
Federal'' and inserting ``beginning on
or after July 1, 2012, and ending June
30, 2026, the maximum annual amount of
Federal''; and
(C) in subparagraph (B)--
(i) in the heading, by striking
``Exception'' and inserting ``Exception
for subsidized loans to individuals
enrolled in certain course work''.
(ii) by striking ``Subparagraph (A)''
and inserting ``For any period of
instruction beginning on or after July
1, 2012, and ending June 30, 2026,
subparagraph (A)''.
(b) Interim Rules for Enrolled Borrowers.--Section 455(a) of
the Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is
amended by adding at the end the following:
``(4) Interim exception for certain students.--
``(A) Application of prior limits.--
Subparagraphs (C), (D), and (E) of paragraph
(3), and paragraphs (5) and (6), shall not
apply, during the expected time to credential
described in subparagraph (B), with respect to
an individual who, as of June 30, 2026--
``(i) is enrolled in a program of
study at an institution of higher
education; and
``(ii) has received a loan (or on
whose behalf a loan was made) under
this part for such program of study.
``(B) Expected time to credential.--For
purposes of this paragraph, the expected time
to credential of an individual shall be equal
to the lesser of--
``(i) three academic years; or
``(ii) the period determined by
calculating the difference between--
``(I) the program length (as
defined in section 420W) for
the program of study in which
the individual is enrolled; and
``(II) the period of such
program of study that such
individual has completed as of
the date of the determination
under this subparagraph.''.
(c) Loan Limits for Unsubsidized Loans and Certain Federal
Direct PLUS Loans.--
(1) Annual and aggregate unsubsidized loan limits.--
Section 455(a) of the Higher Education Act of 1965 (20
U.S.C. 1087e(a)) is further amended by adding at the
end the following:
``(5) Annual and aggregate unsubsidized loan
limits.--
``(A) Undergraduate students.--
``(i) Annual loan limits.--
Notwithstanding any provision of this
part or part B, subject to subparagraph
(C) and except as provided in paragraph
(4), beginning on July 1, 2026, the
maximum annual amount of Federal Direct
Unsubsidized Stafford loans that an
undergraduate student may borrow in any
academic year (as defined in section
481(a)(2)) or its equivalent shall be
the difference between--
``(I) the amount of the
median cost of college of the
program of study in which the
student is enrolled; and
``(II) the amount of the
Federal Pell Grant under
section 401 awarded to the
student for such academic year.
``(ii) Aggregate limits.--
Notwithstanding any provision of this
part or part B, except as provided in
paragraph (4), beginning on July 1,
2026, the maximum aggregate amount of
Federal Direct Unsubsidized Stafford
loans that a student may borrow for
programs of study that award an
undergraduate credential upon
completion of such a program shall be
$50,000.
``(B) Graduate and professional students.--
``(i) Annual limits.--Notwithstanding
any provision of this part or part B,
subject to subparagraph (C) and except
as provided in paragraph (4), beginning
on July 1, 2026, the maximum annual
amount of Federal Direct Unsubsidized
Stafford loans that a graduate student
or professional student may borrow in
any academic year (as defined in
section 481(a)(2)) or its equivalent
shall be the amount of the median cost
of college of the program of study in
which the student is enrolled.
``(ii) Aggregate limits.--
Notwithstanding any provision of this
part or part B, except as provided in
paragraph (4), beginning on July 1,
2026, the maximum aggregate amount of
Federal Direct Unsubsidized Stafford
loans that, in addition to the maximum
aggregate amount described in
subparagraph (A)(ii)--
``(I) a graduate student--
``(aa) who is not
(and has not been) a
professional student,
may borrow for programs
of study described in
subparagraph (D)(i)
shall be $100,000; or
``(bb) who is (or has
been) a professional
student, may borrow for
programs of study
described in
subparagraph (D)(i)
shall be an amount
equal to--
``(AA)
$150,000, minus
``(BB) the
amount such
student
borrowed for
programs of
study described
in subclauses
(I) and (II) of
subparagraph
(D)(ii); and
``(II) a professional
student--
``(aa) who is not
(and has not been) a
graduate student, may
borrow for programs of
study described in
subclauses (I) and (II)
of subparagraph (D)(ii)
shall be $150,000; or
``(bb) who is (or has
been) a graduate
student, may borrow for
programs of study
described in subclauses
(I) and (II) of
subparagraph (D)(ii)
shall be an amount
equal to--
``(AA)
$150,000, minus
``(BB) the
amount such
student
borrowed for
programs of
study described
in subparagraph
(D)(i).
``(C) Less than full-time enrollment.--In any
case where a student is enrolled in an program
of study of an institution of higher education
on less than a full-time basis during any
academic year, the amount of a loan that
student may borrow for an academic year (as
defined in section 481(a)(2)) or its equivalent
shall be reduced in direct proportion to the
degree to which that student is not so enrolled
on a full-time basis, rounded to the nearest
whole percentage point, as provided in a
schedule of reductions published by the
Secretary computed for purposes of this
paragraph.
``(D) Definition.--For purposes of this
subsection:
``(i) Graduate student.--The term
`graduate student' means a student
enrolled in a program of study that
awards a graduate credential (other
than a professional degree) upon
completion of the program.
``(ii) Professional student.--The
term `professional student' means a
student enrolled in a program of study
that--
``(I) awards a professional
degree upon completion of the
program; or
``(II) provides the training
described in part 141 of title
14, Code of Federal Regulations
(or any successor regulations).
``(iii) Undergraduate student.--The
term `undergraduate student' means a
student enrolled in a program of study
that awards an undergraduate credential
upon completion of the program.''.
(2) Annual and aggregate federal direct plus loans
limits for parent borrowers.--Section 455(a) of the
Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is
further amended by adding at the end the following:
``(6) Annual and aggregate federal direct plus loans
limits for parent borrowers.--
``(A) Annual limits.--Notwithstanding any
provision of this part or part B, subject to
paragraph (3)(E) and except as provided in
paragraph (4), beginning on July 1, 2026, the
maximum annual amount of Federal Direct PLUS
loans that a parent may borrow, on behalf of a
dependent student, in any academic year (as
defined in section 481(a)(2)) or its equivalent
shall be the amount equal to--
``(i) the cost of attendance of the
program of study of such student; minus
``(ii) the maximum annual amount of
Federal Direct Unsubsidized Stafford
loans such student may borrow in such
academic year.
``(B) Aggregate limits.--Notwithstanding any
provision of this part or part B, subject to
paragraph (3)(E) and except as provided in
paragraph (4), beginning on July 1, 2026, the
maximum aggregate amount of Federal Direct PLUS
loans that a parent may borrow shall be
$50,000, without regard to the number of
dependent students on behalf of whom such
parent borrows such a loan.''.
(3) Lifetime maximum aggregate amount for all
students.--Section 455(a) of the Higher Education Act
of 1965 (20 U.S.C. 1087e(a)) is further amended by
adding at the end the following:
``(7) Lifetime maximum aggregate amount for all
students.--Notwithstanding any provision of this part
or part B, except as provided in paragraph (4),
beginning on July 1, 2026, the maximum aggregate amount
of loans made, insured, or guaranteed under this title
that a student may borrow, and that a parent may borrow
on behalf of such student, shall be $200,000, without
regard to any amounts repaid, forgiven, canceled, or
otherwise discharged on any such loan.''.
(4) Institutionally determined limits.--Section
455(a) of the Higher Education Act of 1965 (20 U.S.C.
1087e(a)) is further amended by adding at the end the
following:
``(8) Institutionally determined limits.--
Notwithstanding the annual loan limits described in
subparagraphs (A)(i) and (B)(i) of paragraph (5) and
subparagraph (A) of paragraph (6), beginning on July 1,
2026, an institution of higher education (at the
discretion of a financial aid administrator at the
institution) may limit the total amount of loans made
under this part for a program of study for an academic
year (as defined in section 481(a)(2)) that a student
may borrow, and that a parent may borrow on behalf of
such student, as long as any such limit is applied
consistently to all students enrolled in such program
of study.''.
Subtitle C--Loan Repayment
SEC. 30021. LOAN REPAYMENT.
(a) Transition to Income-based Repayment Plans.--
(1) Authority to transition to income-based repayment
plans.--
(A) Authority to carry out transition.--
Beginning on the date of enactment of this
title, the Secretary of Education shall take
such steps as may be necessary to apply the
repayment plan under section 493C of the Higher
Education Act of 1965 (as amended by this
title) to the loans of each borrower who, on
the day before such date of enactment, is in a
repayment status in accordance with, or an
administrative forbearance associated with, an
income-contingent repayment plan authorized
under section 455(e) of the Higher Education
Act of 1965 (as in effect on the day before the
date of enactment of this title).
(B) Deadline for transition.--The Secretary
shall complete the application of the repayment
plan under section 493C to the loans described
in paragraph (1) as soon as practicable, but
not later than 9 months after the date of
enactment of this title.
(2) Limitation of regulatory authority.--The
Secretary may not establish, promulgate, issue, or
modify any regulations or guidance with respect to any
income-based repayment plan under the Higher Education
Act of 1965, except that the Secretary may--
(A) during the 270-day period after the date
of enactment of this title, issue an interim
final rule as necessary for the application of
the repayment plan under section 493C of such
Act of 1965 in accordance with paragraph (1);
(B) during the 270-day period after the date
of enactment of this title, issue an interim
final rule as necessary to implement the
amendments to such section 493C made by
subsection (f) of this title; and
(C) during the 18-month period after the date
of enactment of this title, issue an interim
final rule as necessary to implement the
income-based Repayment Assistance Program under
section 455(q) of such Act of 1965 (as added by
this title).
(3) Waiver of negotiated rulemaking.--Any guidance or
regulations issued or modified in accordance with
subparagraph (A) or (B) of paragraph (2) shall not be
subject to negotiated rulemaking requirements under
section 492 of the Higher Education Act of 1965 (20
U.S.C. 1098a).
(b) Repayment Plans.--Section 455(d) of the Higher Education
Act of 1965 (20 U.S.C. 1087e(d)) is amended--
(1) in paragraph (1)--
(A) in the matter preceding subparagraph (A),
by inserting ``before July 1, 2026, who has not
received a loan made under this part on or
after July 1, 2026,'' after ``made under this
part'';
(B) by amending subparagraph (D) to read as
follows:
``(D) beginning on July 1, 2026, the income-
based Repayment Assistance Plan under
subsection (q), provided that--
``(i) the borrower is required to pay
each outstanding loan of the borrower
made under this part under such
Repayment Assistance Plan;
``(ii) such Plan shall not be
available to borrowers with an excepted
loan (as defined in paragraph (7)); and
``(iii) the borrower may not change
the borrower's selection of the
Repayment Assistance Plan except in
accordance with paragraph (7)(C).'';
and
(C) in subparagraph (E)--
(i) by striking ``that enables
borrowers who have a partial financial
hardship to make a lower monthly
payment''; and
(ii) by striking ``a Federal Direct
Consolidation Loan, if the proceeds of
such loan were used to discharge the
liability on such Federal Direct PLUS
Loan or a loan under section 428B made
on behalf of a dependent student'' and
inserting ``an excepted Consolidation
Loan (as defined in section
493C(a)(2))'';
(2) in paragraph (5), by amending subparagraph (B) to
read as follows:
``(B) repay the loan pursuant to an income-
based repayment plan under subsection (q) or
section 493C, as applicable.''; and
(3) by adding at the end the following:
``(6) Termination and limitation of repayment
authority.--
``(A) Sunset of repayment plans available
before july 1, 2026.--Paragraphs (1) through
(4) of this subsection shall only apply to
loans made under this part before July 1, 2026.
``(B) Prohibitions.--The Secretary may not,
for any loan made under this part on or after
July 1, 2026--
``(i) authorize a borrower of such a
loan to repay such loan pursuant to a
repayment plan that is not described in
paragraph (7)(A); or
``(ii) carry out or modify a
repayment plan that is not described in
such paragraph.
``(7) Repayment plans for loans made on or after july
1, 2026.--
``(A) Design and selection.--Beginning on
July 1, 2026, the Secretary shall offer a
borrower of a loan made under this part on or
after such date (including such a borrower who
also has a loan made under this part before
such date) two plans for repayment of the
borrower's loans under this part, including
principal and interest on such loans. The
borrower shall be entitled to accelerate,
without penalty, repayment on such loans. The
borrower may choose--
``(i) a standard repayment plan--
``(I) with a fixed monthly
repayment amount paid over a
fixed period of time equal to
the applicable period
determined under subclause
(II); and
``(II) with the applicable
period of time for repayment
determined based on the total
outstanding principal of all
loans of the borrower made
under this part before, on, or
after July 1, 2026, at the time
the borrower is entering
repayment under such plan, as
follows--
``(aa) for a borrower
with total outstanding
principal of less than
$25,000, a period of 10
years;
``(bb) for a borrower
with total outstanding
principal of not less
than $25,000 and less
than $50,000, a period
of 15 years;
``(cc) for a borrower
with total outstanding
principal of not less
than $50,000 and less
than $100,000, a period
of 20 years; and
``(dd) for a borrower
with total outstanding
principal of $100,000
or more, a period of 25
years; or
``(ii) the income-based Repayment
Assistance Plan under subsection (q).
``(B) Selection by secretary.--If a borrower
of a loan made under this part on or after July
1, 2026, does not select a repayment plan
described in subparagraph (A), the Secretary
shall provide the borrower with the standard
repayment plan described in subparagraph
(A)(i).
``(C) Selection available for each new loan;
selection applies to all outstanding loans.--
Each time a borrower receives a loan made under
this part on or after July 1, 2026, the
borrower may select either the standard
repayment plan under subparagraph (A)(i) or the
Repayment Assistance Plan under subparagraph
(A)(ii), provided that the borrower is required
to pay each outstanding loan of the borrower
made under this part under such selected
repayment plan.
``(D) Permissible changes of repayment
plan.--
``(i) Changing from standard
repayment plan.--A borrower may change
the borrower's selection of the
standard repayment plan under
subparagraph (A)(i), or the Secretary's
selection of such plan for the borrower
under subparagraph (C), as the case may
be, to the Repayment Assistance Plan
under subparagraph (A)(ii) at any time.
``(ii) Limited change from repayment
assistance plan.--A borrower may not
change the borrower's selection of the
Repayment Assistance Plan under
subparagraph (A)(ii), except in
accordance with subparagraph (C).
``(E) Special rule for excepted loan
borrowers with loans made on or after july 1,
2026.--
``(i) Standard repayment plan
required.--Notwithstanding
subparagraphs (A) through (D),
beginning on July 1, 2026, the
Secretary shall require a borrower who
has an excepted loan and who has
received a loan made under this part on
or after such date to repay each
outstanding loan of the borrower made
under this part, including principal
and interest on such loans, under the
standard repayment plan under
subparagraph (A)(i). The borrower shall
be entitled to accelerate, without
penalty, repayment on such loans.
``(ii) Excepted loan defined.--For
the purposes of this paragraph, the
term `excepted loan' means a loan with
an outstanding balance that is--
``(I) a Federal Direct PLUS
Loan that is made on behalf of
a dependent student; or
``(II) a Federal Direct
Consolidation Loan, if the
proceeds of such loan were used
to the discharge the liability
on--
``(aa) an excepted
PLUS loan, as defined
in section 493C(a)(1);
or
``(bb) an excepted
consolidation loan (as
such term is defined in
section 493C(a)(2)(A),
notwithstanding
subparagraph (B) of
such section).
``(F) Treatment of borrowers without loans
made on or after july 1, 2026.--A borrower who
has an outstanding loan (including an excepted
loan) made under this part before July 1, 2026,
and who has not received a loan made under this
part on or after July 1, 2026, shall not be
eligible to change the borrower's selection of
a repayment plan to the standard repayment plan
under subparagraph (A)(i).''.
(c) Elimination of Authority to Provide Income Contingent
Repayment Plans.--
(1) Repeal.--Subsection (e) of section 455 the Higher
Education Act of 1965 (20 U.S.C. 1087e(e)) is repealed.
(2) Further amendments to eliminate income contingent
repayment.--
(A) Section 428 of the Higher Education Act
of 1965 (20 U.S.C. 1078) is amended--
(i) in subsection (b)(1)(D), by
striking ``be subject to income
contingent repayment in accordance with
subsection (m)'' and inserting ``be
subject to income-based repayment in
accordance with subsection (m)''; and
(ii) in subsection (m)--
(I) in the subsection
heading, by striking ``Income
Contingent and'';
(II) by amending paragraph
(1) to read as follows:
``(1) Authority of secretary to require.--The
Secretary may require borrowers who have defaulted on
loans made under this part that are assigned to the
Secretary under subsection (c)(8) to repay those loans
pursuant to an income-based repayment plan under
section 455(q) or section 493C, as applicable.''; and
(III) in the heading of
paragraph (2), by striking
``income contingent or''.
(B) Section 428C of the Higher Education Act
of 1965 (20 U.S.C. 1078-3) is amended--
(i) in subsection
(a)(3)(B)(i)(V)(aa), by striking ``for
the purposes of obtaining income
contingent repayment or income-based
repayment'' and inserting ``for the
purposes of qualifying for an income-
based repayment plan under section
455(q) or section 493C, as
applicable'';
(ii) in subsection (b)(5), by
striking ``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'' and
inserting ``be repaid pursuant to an
income-based repayment plan under
section 493C or any other repayment
provision under this section''; and
(iii) in subsection (c)--
(I) in paragraph (2)(A), by
striking ``or by the terms of
repayment pursuant to income
contingent repayment offered by
the Secretary under subsection
(b)(5)'' and inserting ``or by
the terms of repayment pursuant
to an income-based repayment
plan under section 493C''; and
(II) in paragraph (3)(B), by
striking ``except as required
by the terms of repayment
pursuant to income contingent
repayment offered by the
Secretary under subsection
(b)(5)'' and inserting ``except
as required by the terms of
repayment pursuant to an
income-based repayment plan
under section 493C''.
(C) Section 485(d)(1) of the Higher Education
Act of 1965 (20 U.S.C. 1092(d)(1)) is amended
by striking ``income-contingent and''.
(D) Section 494(a)(2) of the Higher Education
Act of 1965 (20 U.S.C. 1098h(a)(2)) is
amended--
(i) in the paragraph heading, by
striking ``Income-contingent and
income-based'' and inserting ``Income-
based'';
(ii) in subparagraph (A)--
(I) in the matter preceding
clause (i), by striking
``income-contingent or''; and
(II) in clause (ii)(I), by
inserting ``(as in effect on
the day before the date of
repeal of subsection (e) of
section 455)'' after ``section
455(e)(8)''.
(d) Repayment Assistance Plan.--Section 455 of the Higher
Education Act of 1965 (20 U.S.C. 1087e) is amended by adding at
the end the following new subsection:
``(q) Repayment Assistance Plan.--
``(1) In general.--Notwithstanding any other
provision of this Act, beginning on July 1, 2026, the
Secretary shall carry out an income-based repayment
plan (to be known as the `Repayment Assistance Plan'),
that shall have the following terms and conditions:
``(A) The total monthly repayment amount owed
by a borrower for all of the loans of the
borrower that are repaid pursuant to the
Repayment Assistance Plan shall be equal to the
applicable monthly payment of a borrower
calculated under paragraph (3)(B), except that
the borrower may not be precluded from repaying
an amount that exceeds such amount for any
month.
``(B) The Secretary shall apply the
borrower's applicable monthly payment under
this paragraph first toward interest due on
each such loan, next toward any fees due on
each loan, and then toward the principal of
each loan.
``(C) Any principal due and not paid under
subparagraph (B) or paragraph (2)(B) shall be
deferred.
``(D) A borrower who is not in a period of
deferment or forbearance shall make an
applicable monthly payment for each month until
the earlier of--
``(i) the date on which the
outstanding balance of principal and
interest due on all of the loans of the
borrower that are repaid pursuant to
the Repayment Assistance Plan is $0; or
``(ii) the date on which the borrower
has made 360 qualifying monthly
payments.
``(E) The Secretary shall repay or cancel any
outstanding balance of principal and interest
due on a loan made under this part to a
borrower--
``(i) who, for any period of time,
participated in the Repayment
Assistance Plan under this subsection;
``(ii) whose most recent payment for
such loan prior to the loan
cancellation under this subparagraph
was made under such Repayment
Assistance Plan; and
``(iii) who has made 360 qualifying
monthly payments on such loan.
``(F) For the purposes of this subsection,
the term `qualifying monthly payment' means any
of the following:
``(i) An on-time applicable monthly
payment under this subsection.
``(ii) An on-time monthly payment
under the standard repayment plan under
subsection (d)(7)(A)(i) of not less
than the monthly payment required under
such plan.
``(iii) A monthly payment under any
repayment plan of not less than the
monthly payment that would be required
under a standard repayment plan under
section 455(d)(1)(A) with a repayment
period of 10 years.
``(iv) A monthly payment under
section 493C of not less than the
monthly payment required under such
section, including a monthly payment
equal to the minimum payment amount
permitted under such section.
``(v) A monthly payment made before
the date of enactment of this
subsection under an income-contingent
repayment plan carried out under
section 455(d)(1)(D) (or under an
alternative repayment plan in lieu of
repayment under such an income-
contingent repayment plan, if placed in
such an alternative repayment plan by
the Secretary) of not less than the
monthly payment required under such a
plan, including a monthly payment equal
to the minimum payment amount permitted
under such a plan.
``(vi) A month when the borrower did
not make a payment because the borrower
was in deferment due to an economic
hardship described in section 435(o).
``(vii) A month that ended before the
date of enactment of this subsection
when the borrower did not make a
payment because the borrower was in a
period deferment or forbearance
described in section 685.209(k)(4)(iv)
of title 34, Code of Federal
Regulations (as in effect on the date
of enactment of this subsection).
``(G) With respect to carrying out section
494(a)(2) for the Repayment Assistance Plan, an
individual may elect to opt out of the
disclosures required under section
494(a)(2)(A)(ii) in accordance with the
procedures established under section
493C(c)(2)(B).
``(2) Balance assistance for distressed borrowers.--
``(A) Interest subsidy.--With respect to a
borrower of a loan made under this part, for
each month for which such a borrower makes an
on-time applicable monthly payment required
under paragraph (1)(A) and such monthly payment
is insufficient to pay the total amount of
interest that accrues for the month on all
loans of the borrower repaid pursuant to the
Repayment Assistance Plan under this
subsection, the amount of interest accrued and
not paid for the month shall not be charged to
the borrower.
``(B) Matching principal payment.--With
respect to a borrower of a loan made under this
part and not in a period of deferment or
forbearance, for each month for which a
borrower makes an on-time applicable monthly
payment required under paragraph (1)(A) and
such monthly payment reduces the total
outstanding principal balance of all loans of
the borrower repaid pursuant to the Repayment
Assistance Plan under this subsection by less
than $50, the Secretary shall reduce such total
outstanding principal balance of the borrower
by an amount that is equal to--
``(i) the amount that is the lesser
of--
``(I) $50; or
``(II) the total amount paid
by the borrower for such month
pursuant to paragraph (1)(A),
minus
``(ii) the total amount paid by the
borrower for such month pursuant to
paragraph (1)(A) that is applied to
such total outstanding principal
balance.
``(3) Definitions.--In this paragraph:
``(A) Adjusted gross income.--The term
`adjusted gross income', when used with respect
to a borrower, means the adjusted gross income
(as such term is defined in section 62 of the
Internal Revenue Code of 1986) of the borrower
(and the borrower's spouse, as applicable) for
the most recent taxable year, except that, in
the case of a married borrower who files a
separate Federal income tax return, the term
does not include the adjusted gross income of
the borrower's spouse.
``(B) Applicable monthly payment.--
``(i) In general.--Except as provided
in clause (ii) or (iii), the term
`applicable monthly payment' means,
when used with respect to a borrower,
the amount equal to--
``(I) the applicable base
payment of the borrower,
divided by 12; minus
``(II) $50 for each dependent
child of the borrower.
``(ii) Minimum amount.--In the case
of a borrower with an applicable
monthly payment amount calculated under
clause (i) that is less than $10, the
applicable monthly payment of the
borrower shall be $10.
``(iii) Final payment.--In the case
of a borrower whose total outstanding
balance of principal and interest on
all of the loans of the borrower that
are repaid pursuant to the Repayment
Assistance Plan is less than the
applicable monthly payment calculated
pursuant to clause (i) or (ii), as
applicable, then the applicable monthly
payment of the borrower shall be the
total outstanding balance of principal
and interest on all such loans.
``(iv) Base payment.--The amount of
the applicable base payment for a
borrower with an adjusted gross income
of--
``(I) not more than $10,000,
is $120;
``(II) more than $10,000 and
not more than $20,000, is 1
percent of such adjusted gross
income;
``(III) more than $20,000 and
not more than $30,000, is 2
percent of such adjusted gross
income;
``(IV) more than $30,000 and
not more than $40,000, is 3
percent of such adjusted gross
income;
``(V) more than $40,000 and
not more than $50,000, is 4
percent of such adjusted gross
income;
``(VI) more than $50,000 and
not more than $60,000, is 5
percent of such adjusted gross
income;
``(VII) more than $60,000 and
not more than $70,000, is 6
percent of such adjusted gross
income;
``(VIII) more than $70,000
and not more than $80,000, is 7
percent of such adjusted gross
income;
``(IX) more than $80,000 and
not more than $90,000, is 8
percent of such adjusted gross
income;
``(X) more than $90,000 and
not more than $100,000, is 9
percent of such adjusted gross
income; and
``(XI) more than $100,000, is
10 percent of such adjusted
gross income.
``(v) Dependent child of the
borrower.--For the purposes of this
paragraph, the term `dependent child of
the borrower' means an individual who--
``(I) is under 17 years of
age; and
``(II) is the borrower's
dependent child or another
person who lives with and
receives more than one-half of
their support from the
borrower.''.
(e) Federal Consolidation Loans.--Section 455(g) of the
Higher Education Act of 1965 (20 U.S.C. 1087e(g)) is amended by
adding at the end the following new paragraph:
``(3) Consolidation loans made on or after july 1,
2026.--Notwithstanding subsections (b)(5), (c)(2), and
(c)(3)(A) and (B) of section 428C, a Federal Direct
Consolidation Loan offered to a borrower under this
part on or after July 1, 2026, may only be repaid
pursuant to a repayment plan described in subsection
(d)(7)(A)(i) or (ii) of this section, as applicable,
and the repayment schedule of such a Consolidation Loan
shall be determined in accordance with such repayment
plan.''.
(f) Income-based Repayment.--
(1) Amendments.--
(A) Excepted consolidation loan defined.--
Section 493C(a)(2) of the Higher Education Act
of 1965 (20 U.S.C. 1098e(a)(2)) is amended to
read as follows:
``(2) Excepted consolidation loan.--
``(A) In general.--The term `excepted
consolidation loan' means--
``(i) a consolidation loan under
section 428C, or a Federal Direct
Consolidation Loan, if the proceeds of
such loan were used to the discharge
the liability on an excepted PLUS loan;
or
``(ii) a consolidation loan under
section 428C, or a Federal Direct
Consolidation Loan, if the proceeds of
such loan were used to discharge the
liability on a consolidation loan under
section 428C or a Federal Direct
Consolidation Loan described in clause
(i).
``(B) Exclusion.--The term `excepted
consolidation loan' does not include a Federal
Direct Consolidation Loan described in
subparagraph (A) that (on the day before the
date of enactment of this subparagraph) was
being repaid pursuant to the Income-Contingent
Repayment (ICR) plan in accordance with section
685.209(a) of title 34, Code of Federal
Regulations (as in effect on June 30, 2023).''.
(B) Terms of income-based repayment.--Section
493C(b) of the Higher Education Act of 1965 (20
U.S.C. 1098e(b)) is amended--
(i) by amending paragraph (1) to read
as follows:
``(1) a borrower of any loan made, insured, or
guaranteed under part B or D (other than an excepted
PLUS loan or excepted consolidation loan), may elect to
have the borrower's aggregate monthly payment for all
such loans not exceed the result described in
subsection (a)(3)(B) divided by 12;'';
(ii) in paragraph (3)--
(I) in subparagraph (B)--
(aa) in clause (i)--
(AA) by
striking
subclause (II);
and
(BB) by
striking ``the
borrower'' and
all the follows
through
``ends'' and
inserting ``the
borrower
ends''; and
(bb) in clause (ii)--
(AA) by
striking
subclause (II);
(BB) by
striking ``the
borrower'' and
all the follows
through
``ends'' and
inserting ``the
borrower
ends''; and
(CC) by
striking ``or''
at the end;
(iii) by repealing paragraph (6);
(iv) in paragraph (7)(B)--
(I) in the matter preceding
clause (i), by striking ``for a
period of time prescribed by
the Secretary, not to exceed 25
years'' and inserting the
following: ``for 25 years (in
the case of a borrower who is
repaying at least one loan for
a program of study for which a
graduate credential (as defined
in section 472A)) is awarded,
or, for 20 years (in the case
of a borrower who is not
repaying at least one such
loan)'';
(II) in clause (i), by
inserting ``(as such paragraph
was in effect on the day before
the date of the repeal of
paragraph (6))'' after
``paragraph (6)''; and
(III) in clause (iv), by
inserting ``(as such section
was in effect on the day before
the date of the repeal of
paragraph (6))'' after
``section 455(d)(1)(D)''; and
(v) in paragraph (8), by striking
``standard repayment plan'' and
inserting ``standard repayment plan
under section 428(b)(9)(A)(i) or
455(d)(1)(A), or the Repayment
Assistance Program under section
455(q)''.
(C) Eligibility determinations.--Section
493C(c)(2) of the Higher Education Act of 1965
(20 U.S.C. 1098e(c)(2)) is further amended--
(i) in subparagraph (A), by inserting
``(as in effect on the day before the
date of repeal of subsection (e) of
section 455)'' after ``section
455(e)(1)''; and
(ii) in subparagraph (B), by
inserting ``(as in effect on the day
before the date of repeal of subsection
(e) of section 455)'' after ``section
455(e)(8)''.
(D) Termination of special terms for new
borrowers on and after july 1, 2014.--Section
493C of the Higher Education Act of 1965 (20
U.S.C. 1098e(e)) is further amended by striking
subsection (e).
(2) Effective date and application.--The amendments
made by this subsection shall take effect on the date
of enactment of this title, and shall apply with
respect to any borrower who is in repayment before, on,
or after the date of enactment of this title.
SEC. 30022. DEFERMENT; FORBEARANCE.
(a) Heading Amendment.--Section 455(f) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(f)) is amended by
striking the subsection heading and inserting the following:
``Deferment; Forbearance''.
(b) Sunset of Economic Hardship and Unemployment
Deferments.--Section 455(f) of the Higher Education Act of 1965
(20 U.S.C.1087e(f)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (B), by striking ``not
in'' and inserting ``subject to paragraph (7),
not in''; and
(B) in subparagraph (D), by striking ``not
in'' and inserting ``subject to paragraph (7),
not in''; and
(2) by adding at the end the following:
``(7) Sunset of unemployment and economic hardship
deferments.--A borrower who receives a loan made under
this part on or after July 1, 2025, shall not be
eligible to defer such loan under subparagraph (B) or
(D) of paragraph (2).''.
(c) Forbearance on Loans Made Under This Part on or After
July 1, 2025.--Section 455(f) of the Higher Education Act of
1965 (20 U.S.C. 1087e(f)) is amended by adding at the end the
following:
``(8) Forbearance on loans made under this part on or
after july 1, 2025.--A borrower who receives a loan
made under this part on or after July 1, 2025--
``(A) may only be eligible for a forbearance
on such loan pursuant to section 428(c)(3)(B)
that does not exceed 9 months during any 24-
month period; and
``(B) in the case of a borrower who is
serving in a medical or dental internship or
residency program (as such program is described
in section 428(c)(3)(A)(i)(I)), may be eligible
for a forbearance on such loan pursuant to
428(c)(3)(A)(i)(I), during which--
``(i) for the first 4 12-month
intervals, interest shall not accrue;
and
``(ii) for any subsequent 12-month
interval, interest shall accrue.''.
SEC. 30023. LOAN REHABILITATION.
(a) Updating Loan Rehabilitation Limits.--
(1) FFEL and direct loans.--Section 428F(a)(5) of the
Higher Education Act of 1965 (20 U.S.C. 1078-6(a)(5))
is amended by striking ``one time'' and inserting ``two
times''.
(2) Perkins loans.--Section 464(h)(1)(D) of the
Higher Education Act of 1965 (20 U.S.C.
1087dd(h)(1)(D)) is amended by striking ``once'' and
inserting ``twice''.
(3) Effective date.--The amendments made by this
subsection shall take effect on the date of enactment
of this Act, and shall apply with respect to any loan
made, insured, or guaranteed under title IV of the
Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).
(b) Minimum Monthly Payment Amount.--Section 428F(a)(1)(B) of
the Higher Education Act of 1965 (20 U.S.C. 1078-6(a)(1)(B)) is
amended by adding at the end the following: ``With respect a
loan made under part D on or after July 1, 2025, a monthly
payment amount described in subparagraph (A) may not be less
than $10.''.
SEC. 30024. PUBLIC SERVICE LOAN FORGIVENESS.
(a) Repayment Assistance Plan.--Section 455(m)(1)(A) of the
Higher Education Act of 1965 (20 U.S.C. 1087e(m)(1)(A)) is
amended--
(1) in clause (iii), by striking ``; or'' and
inserting a semicolon;
(2) in clause (iv), by striking ``; and'' and
inserting ``(as in effect on the day before the date of
the repeal of subsection (e) of this section); or'';
and
(3) by adding at the end the following new clause:
``(v) on-time payments under the
Repayment Assistance Plan under section
455(q); and''.
(b) Public Service Job.--Section 455(m)(3)(B) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(m)(3)(B)) is amended--
(1) by redesignating clauses (i) and (ii) as
subclauses (I) and (II), respectively, and adjusting
the margins accordingly;
(2) by striking ``The term'' and inserting the
following:
``(i) In general.--The term''; and
(3) by adding at the end the following:
``(ii) Exclusion.--The term `public
service job' does not include time
served in a medical or dental
internship or residency program (as
such program is described in section
428(c)(3)(A)(i)(I)) by an individual
who, as of June 30, 2025, has not
borrowed a Federal Direct PLUS Loan or
a Federal Direct Unsubsidized Stafford
Loan for a program of study that awards
a graduate credential upon completion
of such program.''.
SEC. 30025. STUDENT LOAN SERVICING.
Paragraph (1) of section 458(a) of the Higher Education Act
of 1965 (20 U.S.C. 1087h(a)(1)) is amended to read as follows:
``(1) Additional mandatory funds for fiscal years
2025 and 2026.--For each of the fiscal years 2025 and
2026 there shall be available to the Secretary (in
addition to any other amounts appropriated under any
appropriations Act for administrative costs under this
part and part B and out of any money in the Treasury
not otherwise appropriated) funds to be obligated for
administrative costs under this part and part B,
including the costs of the direct student loan programs
under this part, not to exceed $500,000,000 in each
such fiscal year.''.
Subtitle D--Pell Grants
SEC. 30031. ELIGIBILITY.
(a) Foreign Income and Federal Pell Grant Eligibility.--
(1) Adjusted gross income defined.--Section
401(a)(2)(A) of the Higher Education Act of 1965 (20
U.S.C. 1070a(a)(2)(A)) is amended to read as follows:
``(A) the term `adjusted gross income'
means--
``(i) in the case of a dependent
student, for the second tax year
preceding the academic year--
``(I) the adjusted gross
income (as defined in section
62 of the Internal Revenue Code
of 1986) of the student's
parents; plus
``(II) the foreign income (as
described in section 480(b)(5))
of the student's parents; and
``(ii) in the case of an independent
student, for the second tax year
preceding the academic year--
``(I) the adjusted gross
income (as defined in section
62 of the Internal Revenue Code
of 1986) of the student (and
the student's spouse, if
applicable); plus
``(II) the foreign income (as
described in section 480(b)(5))
of the student (and the
student's spouse, if
applicable);''.
(2) Sunset.--Section 401(b)(1)(D) of the Higher
Education Act of 1965 (20 U.S.C. 1070a(b)(1)(D)) is
amended by striking ``A student'' and inserting ``For
each academic year beginning before July 1, 2025, a
student''.
(3) Conforming amendment.--Section 479A(b)(1)(B) of
the Higher Education Act of 1965 (20 U.S.C.
1087tt(b)(1)(B)) is amended--
(A) by striking clause (v); and
(B) by redesignating clauses (vi) and (vii)
as clauses (v) and (vi), respectively.
(b) Definition of Full Time Enrollment for Federal Pell Grant
Eligibility.--Section 401(a)(2) of the Higher Education Act of
1965 (20 U.S.C. 1070a(a)(2)) is further amended--
(1) in subparagraph (E), by striking ``and'' after
the semicolon;
(2) in subparagraph (F), by striking the period and
inserting ``; and''; and
(3) by adding at the end the following new
subparagraph:
``(G) notwithstanding section
481(a)(2)(A)(iii), the terms `full time' and
`full-time' (except with respect to subsection
(d)(4) when used as part of the term `normal
full-time workload') mean, with respect to a
student enrolled in an undergraduate course of
study, the student is expected to complete at
least 30 semester or trimester hours or 45
quarter credit hours (or the clock hour
equivalent) in each academic year a student is
enrolled in the course of study.''.
(c) Federal Pell Grant Ineligibility Due to a High Student
Aid Index.--Section 401(b)(1) of the Higher Education Act of
1965 (20 U.S.C. 1070a-1(b)(1)) is amended by adding at the end
the following:
``(F) Ineligibility of students with a high
student aid index.--Notwithstanding
subparagraphs (A) through (E), a student shall
not be eligible for a Federal Pell Grant under
this subsection for an academic year in which
the student has a student aid index that equals
or exceeds twice the amount of the total
maximum Federal Pell Grant for such academic
year.''.
(d) No Federal Pell Grant Eligibility for Students Enrolled
Less Than Half Time.--Section 401 of the Higher Education Act
of 1965 (20 U.S.C. 1070a) is further amended--
(1) in subsection (b)--
(A) by striking ``(2) Less'' and inserting
``(2)(A) Less''; and
(B) by inserting after subparagraph (A) (as
so designated by subparagraph (A) of this
subsection) the following new subparagraph:
``(B) Less than half-time enrollment.--
Notwithstanding subparagraph (A), a student who first
receives a Federal Pell Grant on or after July 1, 2025,
shall not be eligible for an award under this
subsection for any academic year beginning after such
date in which the student is enrolled in an eligible
program of an institution of higher education on less
than a half-time basis. The Secretary shall update the
schedule of reductions described in subparagraph (A) in
accordance with this subparagraph, including for
students receiving the minimum Federal Pell Grant.'';
(2) in subsection (c)(6)(A), by inserting ``, and the
eligibility requirement of enrollment on at least a
half-time basis under subsection (b)(2),'' after
``(b)(1)''; and
(3) in subsection (d)(5)(A), by inserting ``(and at
least half time, in the case of a student who first
receives a Federal Pell Grant under subsection (b) on
or after July 1, 2025)'' after ``full time''.
(e) Effective Date and Application.--The amendments made by
this section shall take effect on July 1, 2025, and shall apply
with respect to award year 2025-2026 and each subsequent award
year.
SEC. 30032. WORKFORCE PELL GRANTS.
(a) In General.--Section 401 of the Higher Education Act of
1965 (20 U.S.C. 1070a) is amended by adding at the end the
following:--
``(k) Workforce Pell Grant Program.--
``(1) In general.--For the award year beginning on
July 1, 2026, and each subsequent award year, the
Secretary shall award grants (to be known as `Workforce
Pell Grants') to eligible students under paragraph (2)
in accordance with this subsection.
``(2) Eligible students.--To be eligible to receive a
Workforce Pell Grant under this subsection for any
period of enrollment, a student shall meet the
eligibility requirements for a Federal Pell Grant under
this section, except that the student--
``(A) shall be enrolled, or accepted for
enrollment, in an eligible program under
section 481(b)(3) (hereinafter referred to as
an `eligible workforce program'); and
``(B) may not--
``(i) be enrolled, or accepted for
enrollment, in a program of study that
leads to a graduate credential; or
``(ii) have attained such a
credential.
``(3) Terms and conditions of awards.--The Secretary
shall award Workforce Pell Grants under this subsection
in the same manner and with the same terms and
conditions as the Secretary awards Federal Pell Grants
under this section, except that--
``(A) each use of the term `eligible program'
(except in subsections (b)(9)(A) and (d)(2))
shall be substituted by `eligible workforce
program under section 481(b)(3)'; and
``(B) a student who is eligible for a grant
equal to less than the amount of the minimum
Federal Pell Grant because the eligible
workforce program in which the student is
enrolled or accepted for enrollment is less
than an academic year (in hours of instruction
or weeks of duration) may still be eligible for
a Workforce Pell Grant in an amount that is
prorated based on the length of the program.
``(4) Prevention of double benefits.--No eligible
student described in paragraph (2) may concurrently
receive a grant under both this subsection and--
``(A) subsection (b); or
``(B) subsection (c).
``(5) Duration limit.--Any period of study covered by
a Workforce Pell Grant awarded under this subsection
shall be included in determining a student's duration
limit under subsection (d)(5).''.
(b) Program Eligibility for Workforce Pell Grants.--Section
481(b) of the Higher Education Act of 1965 (20 U.S.C. 1088(b))
is amended--
(1) by redesignating paragraphs (3) and (4) as
paragraphs (4) and (5), respectively; and
(2) by inserting after paragraph (2) the following:
``(3)(A) A program is an eligible program for purposes of the
Workforce Pell Grant program under section 401(k) only if--
``(i) it is a program of at least 150 clock hours of
instruction, but less than 600 clock hours of
instruction, or an equivalent number of credit hours,
offered by an eligible institution during a minimum of
8 weeks, but less than 15 weeks;
``(ii) it is not offered as a correspondence course,
as defined in 600.2 of title 34, Code of Federal
Regulations (as in effect on September 20, 2020);
``(iii) the Governor of a State, after consultation
with the State board, determines that the program--
``(I) provides an education aligned with the
requirements of high-skill, high-wage (as
identified by the State pursuant to section 122
of the Carl D. Perkins Career and Technical
Education Act (20 U.S.C. 2342)), or in-demand
industry sectors or occupations;
``(II) meets the hiring requirements of
potential employers in the sectors or
occupations described in subclause (I);
``(III) either--
``(aa) leads to a recognized
postsecondary credential that is
stackable and portable across more than
one employer; or
``(bb) with respect to students
enrolled in the program--
``(AA) prepares such students
for employment in an occupation
for which there is only one
recognized postsecondary
credential; and
``(BB) provides such students
with such a credential upon
completion of such program; and
``(IV) prepares students to pursue 1 or more
certificate or degree programs at 1 or more
institutions of higher education (which may
include the eligible institution providing the
program), including by ensuring--
``(aa) that a student, upon
completion of the program and
enrollment in such a related
certificate or degree program, will
receive academic credit for the
Workforce Pell program that will be
accepted toward meeting such
certificate or degree program
requirements; and
``(bb) the acceptability of such
credit toward meeting such certificate
or degree program requirements; and
``(iv) after the Governor of such State makes the
determination that the program meets the requirements
under clause (iii), the Secretary determines that--
``(I) the program has been offered by the
eligible institution for not less than 1 year
prior to the date on which the Secretary makes
a determination under this clause;
``(II) for each award year, the program has a
verified completion rate of at least 70
percent, within 150 percent of the normal time
for completion;
``(III) for each award year, the program has
a verified job placement rate of at least 70
percent, measured 180 days after completion;
and
``(IV) for each award year, the median value-
added earnings (as defined in section 420W) of
students who completed such program for the
most recent year for which data is available
exceeds the median total price (as defined in
section 454(d)(3)(D)) charged to students in
such award year.
``(B) In this paragraph:
``(i) The term `eligible institution' means
an institution of higher education (as defined
in section 102), or any other entity that has
entered into a program participation agreement
with the Secretary under section 487(a)
(without regard to whether that entity is
accredited by a national recognized accrediting
agency or association), which has not been
subject, during any of the preceding 3 years,
to--
``(I) any suspension, emergency
action, or termination under this
title;
``(II) in the case of an institution
of higher education, any adverse action
by the institution's accrediting agency
or association that revokes or denies
accreditation for the institution; or
``(III) any final action by the State
in which the institution or other
entity holds its legal domicile,
authorization, or accreditation that
revokes the institution's or entity's
license or other authority to operate
in such State.
``(ii) The term `Governor' means the chief
executive of a State.
``(iii) The terms `industry or sector
partnership', `in-demand industry sector or
occupation', `recognized postsecondary
credential', and `State board' have the
meanings given such terms in section 3 of the
Workforce Innovation and Opportunity Act.''.
(c) Student Eligibility.--Section 484(a)(1) of the Higher
Education Act of 1965 (20 U.S.C. 1091(a)(1)) is amended by
inserting ``or, for purposes of section 401(k), at an entity
(other than an institution of higher education) that meets the
requirements of section 481(b)(3)(B)(i)'' after ``section
487''.
(d) Effective Date; Applicability.--The amendments made by
this section shall take effect on July 1, 2026, and shall apply
with respect to award year 2026-2027 and each succeeding award
year.
SEC. 30033. PELL SHORTFALL.
Section 401(b)(7)(A) of the Higher Education Act of 1965 (20
U.S.C. 1070a(b)(7)(A)) is amended--
(1) in clause (iii)--
(A) by striking ``$2,170,000,000'' and
inserting ``$5,351,000,000''; and
(B) by striking ``and'' at the end;
(2) in clause (iv)--
(A) by striking ``$1,236,000,000'' and
inserting ``$6,058,000,000''; and
(B) by striking `` and each succeeding fiscal
year.'' and inserting a semicolon; and
(3) by adding at the end the following:
``(v) $3,743,000,000 for fiscal year
2028; and
``(vi) $1,236,000,000 for each
succeeding fiscal year.''.
Subtitle E--Accountability
SEC. 30041. AGREEMENTS WITH INSTITUTIONS.
Section 454 of the Higher Education Act of 1965 (20 U.S.C.
1087d) is amended--
(1) in subsection (a)--
(A) in paragraph (5), by striking ``and''
after the semicolon;
(B) by redesignating paragraph (6) as
paragraph (7); and
(C) by inserting after paragraph (5) the
following new paragraph:
``(6) provide annual reimbursements to the Secretary
in accordance with the requirements under subsection
(d); and''; and
(2) by adding at the end the following new
subsection:
``(d) Reimbursement Requirements.--
``(1) Annual reimbursements required.--Beginning in
award year 2028-2029, each institution of higher
education participating in the direct student loan
program under this part shall, for qualifying student
loans, remit to the Secretary, at such time as the
Secretary may specify, an annual reimbursement for each
student cohort of the institution, based on the non-
repayment balance of such cohort and calculated in
accordance with paragraph (3).
``(2) Student cohorts.--
``(A) Cohorts established.--For each
institution of higher education participating
in the direct student loan program under this
part, the Secretary shall establish student
cohorts, beginning with award year 2027-2028,
as follows:
``(i) Completing student cohort.--For
each program of study at such
institution, a student cohort comprised
of all students who received Federal
financial assistance under this title
and who completed such program during
such award year.
``(ii) Undergraduate non-completing
student cohort.--For such institution,
a student cohort comprised of all
students who received Federal financial
assistance under this title, who were
enrolled in the institution during the
previous award year in a program of
study leading to an undergraduate
credential, and who at the time the
cohort is established--
``(I) have not completed such
program of study; and
``(II) are not enrolled at
the institution in any program
of study leading to an
undergraduate credential.
``(iii) Graduate non-completing
student cohort.--For each program of
study leading to a graduate credential
at such institution, a student cohort
comprised of all students who received
Federal financial assistance under this
title, who were enrolled in such
program during the previous award year,
and who at the time the cohort is
established--
``(I) have not completed such
program of study; and
``(II) are not enrolled in
such program.
``(B) Qualifying student loan.--For the
purposes of this subsection, the term
`qualifying student loan' means a loan made
under this part on or after July 1, 2027,
that--
``(i) was made to a student included
in a student cohort of an institution
or to a parent on behalf of such a
student;
``(ii) except in the case of a loan
described in clause (i) or (ii) of
subparagraph (C), is not included in
any other student cohort of any
institution of higher education;
``(iii) is not in--
``(I) a medical or dental
internship or residency
forbearance described in
section 428(c)(3)(A)(i)(I),
section 428B(a)(2), section
428H(a), or section
685.205(a)(3) of title 34, Code
of Federal Regulations;
``(II) a graduate fellowship
deferment described in section
455(f)(2)(A)(ii);
``(III) rehabilitation
training program deferment
described under section
455(f)(2)(A)(ii);
``(IV) an in-school deferment
described under section
455(f)(2)(A)(i);
``(V) a cancer deferment
described under section
455(f)(3);
``(VI) a military service
deferment described under
section 455(f)(2)(C); or
``(VII) a post-active duty
student deferment described
under section 493D; and
``(iv) is not in default.
``(C) Special circumstances.--
``(i) Multiple credentials.--In the
case of a student who completes two or
more programs of study during the same
award year, each qualifying student
loan of the student shall be included
in the student cohort for each of such
program of study for such award year.
``(ii) Treatment of certain
consolidation loans.--A Federal Direct
Consolidation loan made under this
title shall not be considered a
qualifying student loan for a student
cohort for an award year if all of the
loans included in such consolidation
loan are attributable to another
student cohort.
``(iii) Consolidation after inclusion
in a student cohort.--If a qualifying
student loan is consolidated into a
consolidation loan under this title
after such qualifying student loan has
been included in a student cohort, the
percentage of the consolidation loan
that was attributable to such student
cohort at the time of consolidation
shall remain attributable to the
student cohort for the life of the
consolidation loan.
``(3) Calculation of reimbursement.--
``(A) Reimbursement payment formula.--For
each student cohort of an institution of higher
education established under this subsection,
the annual reimbursement for such cohort shall
be equal to--
``(i) the reimbursement percentage
for the cohort, determined in
accordance with subparagraph (B);
multiplied by
``(ii) the non-repayment balance for
the cohort for the award year,
determined in accordance with
subparagraph (C).
``(B) Reimbursement percentage.--The
reimbursement percentage of a student cohort of
an institution shall be determined by the
Secretary when the cohort is established, shall
remain constant for the life of the student
cohort, and shall be determined as follows:
``(i) Completing student cohorts.--
The reimbursement percentage of a
completing student cohort shall be
equal to the percentage determined by--
``(I) subtracting from one
the quotient of--
``(aa) the median
value-added earnings of
students who completed
such program of study
in the most recent
award year for which
such earnings data is
available; divided by
``(bb) the median
total price charged to
students included in
such cohort; and
``(II) multiplying the
difference determined under
subclause (I) by 100.
``(ii) Special circumstances for
completing student cohorts.--
``(I) High-risk cohorts.--
Notwithstanding clause (i), if
the median value-added earnings
of a completing student cohort
under clause (i)(I)(aa) is
negative, the reimbursement
percentage of the student
cohort shall be 100 percent.
``(II) Low-risk cohorts.--
Notwithstanding clause (i), if
the median value-added earnings
of a completing student cohort
under clause (i)(I)(aa) exceeds
the median total price of such
cohort under clause (i)(I)(bb),
the reimbursement percentage of
the student cohort shall be 0
percent.
``(iii) Non-completing student
cohorts.--The reimbursement percentage
of a non-completing student cohort
shall be determined based on the most
recent data available in the award year
in which the cohort is established,
and--
``(I) for an undergraduate
non-completing student cohort,
shall be equal to the
percentage of undergraduate
students who received Federal
financial assistance under this
title at such institution who--
``(aa) did not
complete an
undergraduate program
of study at the
institution within 150
percent of the program
length of such program;
or
``(bb) only in the
case of a two-year
institution, did not,
within 6 years after
first enrolling at the
two-year institution,
complete a program of
study at a four-year
institution for which a
bachelor's degree (or
substantially similar
credential) is awarded;
and
``(II) for a graduate non-
completing student cohort,
shall be equal to the
percentage of students who
received Federal financial
assistance under this title at
the institution for the
applicable graduate program of
study and who did not complete
such program of study within
150 percent of the program
length.
``(C) Non-repayment loan balance.--
``(i) In general.--For each award
year, the Secretary shall determine the
non-repayment loan balance for such
award year for each student cohort of
an institution of higher education by
calculating the sum of--
``(I) for loans in such
cohort, the difference between
the total amount of payments
due from all borrowers on such
loans during such year and the
total amount of payments made
by all such borrowers on such
loans during such year; plus
``(II) the total amount of
interest waived, paid, or
otherwise not charged by the
Secretary during such year
under the income-based
repayment plan described in
section 455(q); plus
``(III) the total amount of
principal and interest
forgiven, cancelled, waived,
discharged, repaid, or
otherwise reduced by the
Secretary under any act during
such year that is not included
in subclause (II) and was not
discharged or forgiven under
section 437(a), 428J, or
section 455(m).
``(ii) Special circumstances.--For
the purpose of calculating the non-
repayment loan balance of student
cohorts under this paragraph, the
Secretary shall--
``(I) for each qualifying
student loan in a student
cohort that is included in
another student cohort because
the student who borrowed such
loan completed two or more
programs of study during the
same award year, the sum of the
amounts described in subclauses
(I) through (III) of clause (i)
for such qualifying student
loan shall be divided equally
among each of the student
cohorts in which such loan is
included; and
``(II) for each consolidation
loan in a student cohort--
``(aa) determine the
percentage of the
outstanding principal
balance of the
consolidation loan
attributable to such
student cohort--
``(AA) at the
time of that
loan was
included in
such cohort, in
the case of a
loan
consolidated
before
inclusion in
such cohort; or
``(BB) at the
time of
consolidation,
in the case of
a loan
consolidated
after inclusion
in such cohort;
and
``(bb) include in the
calculations under
clause (i) for such
student cohort only the
percentage of the sum
of the amounts
described in subclauses
(I) through (III) of
clause (i) for the
consolidation loan for
such year that is equal
to the percentage of
the consolidation loan
determined under item
(aa).
``(D) Total price.--With respect to a student
who received Federal financial assistance under
this title and who completes a program of
study, the term `total price' means the total
amount, before Federal financial assistance
under this title was applied, a student was
required to pay to complete the program of
study. A student's total price shall be
calculated by the Secretary as the difference
between--
``(i) the total amount of tuition and
fees that were charged to such student
before the application of any Federal
financial assistance provided under
this title; minus
``(ii) the total amount of grants and
scholarships described in section
480(i) awarded to such student from
non-Federal sources for such program of
study.
``(4) Notification and remittance.--Beginning with
the first award year for which reimbursements are
required under this subsection, and for each succeeding
award year, the Secretary shall--
``(A) notify each institution of higher
education of the amounts and due dates of each
annual reimbursement calculated under paragraph
(3) for each student cohort of the institution
within 30 days of calculating such amounts; and
``(B) require the institution to remit such
payments within 90 days of such notification.
``(5) Penalty for late payments.--
``(A) Three-month delinquency.--If an
institution fails to remit to the Secretary a
reimbursement for a student cohort as required
under this subsection within 90 days of
receiving notification from the Secretary in
accordance with paragraph (4), the institution
shall pay to the Secretary, in addition to such
reimbursement, interest on such reimbursement
payment, at a rate that is the average rate
applicable to the loans in such student cohort.
``(B) Twelve-month delinquency.--If an
institution fails to remit to the Secretary a
reimbursement for a student cohort as required
under this subsection, plus interest owed in
under subparagraph (A), within 12 months of
receiving notification from the Secretary in
accordance with paragraph (4), the institution
shall be ineligible to make direct loans to any
student enrolled in the program of study for
which the institution has failed to make the
reimbursement payments until such payment is
made.
``(C) Eighteen-month delinquency.--If an
institution fails to remit to the Secretary a
reimbursement for a student cohort as required
under this subsection, plus interest owed under
subparagraph (A), within 18 months of receiving
notification from the Secretary in accordance
with paragraph (4), the institution shall be
ineligible to make direct loans or award
Federal Pell Grants under section 401 to any
student enrolled in the institution until such
payment is made.
``(D) Two-year delinquency.--If an
institution fails to remit to the Secretary a
reimbursement for a student cohort as required
under this subsection, plus interest owed under
subparagraph (A), within 2 years of receiving
notification from the Secretary in accordance
with paragraph (4), the institution shall be
ineligible to participate in any program under
this title for a period of not less than 10
years.
``(6) Relief for voluntary cessation of federal
direct loans for a program of study.--The Secretary
shall, upon the request of an institution that
voluntarily ceases to make Federal Direct loans to
students enrolled in a specific program of study,
reduce the amount of the annual reimbursement owed by
the institution for each student cohort associated with
such program by 50 percent if the institution assures
the Secretary that the institution will not make
Federal Direct loans to any student enrolled in such
program of study (or any substantially similar program
of study, as determined by the Secretary) for a period
of not less than 10 award years, beginning with the
first award year that begins after the date on which
the Secretary reduces such reimbursement.
``(7) Reservation of funds for promise grants.--
Notwithstanding any other provision of law, the
Secretary shall reserve the funds remitted to the
Secretary as reimbursements in accordance with this
subsection, and such funds shall be made available to
the Secretary only for the purpose of awarding PROMISE
grants in accordance with subpart 11 of part A of this
title.''.
SEC. 30042. CAMPUS-BASED AID PROGRAMS.
(a) Promise Grants.--Part A of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1070c et seq.) is amended by
adding at the end the following:
``Subpart 11--Promoting Real Opportunities to Maximize Investments and
Savings in Education
``SEC. 420S. PROMISE GRANTS.
``For award year 2028-2029 and each succeeding award year,
from reserved funds remitted to the Secretary in accordance
with section 454(d) and additional funds made available under
section 420V, as necessary, the Secretary shall award PROMISE
grants to eligible institutions to carry out the activities
described in section 420U(c). PROMISE grants awarded under this
subpart shall be awarded on a noncompetitive basis to each
eligible institution that submits a satisfactory application
under section 420T for a 6-year period in an amount that is
determined in accordance with section 420U.
``SEC. 420T. ELIGIBLE INSTITUTIONS; APPLICATION.
``(a) Eligible Institution.--To be eligible for a PROMISE
grant under this subpart, an institution shall--
``(1) be an institution of higher education under
section 102, except that an institution described in
section 102(a)(1)(C) shall not be an eligible
institution under this subpart; and
``(2) meet the maximum total price guarantee
requirements under subsection (c).
``(b) Application.--An eligible institution seeking a PROMISE
grant under this subpart (including a renewal of such a grant)
shall submit to the Secretary an application, at such time as
the Secretary may require, containing the information required
under this subsection. Such application shall--
``(1) demonstrate that the institution--
``(A) meets the maximum total price guarantee
requirements under subsection (c); and
``(B) will continue to meet the maximum total
price guarantee requirements for each award
year during the grant period with respect to
students first enrolling at the institution for
each such award year;
``(2) describe how grant funds awarded under this
subpart will be used by the institution to carry out
activities related to--
``(A) increasing postsecondary affordability,
including--
``(i) the expansion and continuation
of the maximum total price guarantee
requirements under subsection (c); and
``(ii) any other activities to be
carried out by the institution to
increase postsecondary affordability
and minimize the maximum total price
for completion paid by students
receiving need-based student aid;
``(B) increasing postsecondary access, which
may include--
``(i) the activities described in
section 485E of this Act; and
``(ii) any other activities to be
carried out by the institution to
increase postsecondary access and
expand opportunities for low- and
middle-income students; and
``(C) increasing postsecondary student
success, which may include--
``(i) activities to improve
completion rates and reduce time to
credential;
``(ii) activities to align programs
of study with the needs of employers,
including with respect to in-demand
industry sectors or occupations (as
defined in section 3 of the Workforce
Innovation and Opportunity Act (29
U.S.C. 3102)); and
``(iii) any other activities to be
carried out by the institution to
increase value-added earnings and
postsecondary student success;
``(3) describe--
``(A) how the institution will evaluate the
effectiveness of the institution's use of grant
funds awarded under this subpart; and
``(B) how the institution will collect and
disseminate information on promising practices
developed with the use of such grant funds; and
``(4) in the case of an institution that has
previously received a grant under this subpart, contain
the evaluation required under paragraph (3) for each
previous grant.
``(c) Maximum Total Price Guarantee Requirements.--As a
condition of eligibility for a PROMISE grant under this
subpart, an institution shall--
``(1) for each award year beginning after the date of
enactment of this subpart, not later than 1 year before
the start of each such award year (except that, for the
first award year beginning after such date of
enactment, the institution shall meet these
requirements as soon as practicable after such date of
enactment), determine the maximum total price for
completion, in accordance with subsection (e), for each
program of study at the institution applicable to
students in each income category and student aid index
category (as determined by the Secretary) and publish
such information on the institution's website and in
the institution's catalog, marketing materials, or
other official publications;
``(2) for the award year for which the institution is
applying for a PROMISE grant, and at least 1 award year
preceding such award year, provide to each student who
first enrolls, or plans to enroll, in the institution
during the award year and who receives Federal
financial aid under this title a maximum total price
guarantee, in accordance with this section, for the
minimum guarantee period applicable to the student; and
``(3) provide to the Secretary an assurance that the
institution will continue to meet each of the maximum
total price guarantee requirements under this
subsection for students who first enroll, or plan to
enroll, in the institution during each award year
included in the grant period.
``(d) Duration of Minimum Guarantee Period.--
``(1) In general.--The minimum period during which a
student shall be provided a guarantee under subsection
(c) with respect to the maximum total price for
completion of a program of study at an institution
shall be the average, for the 3 most recent award years
for which data are available, of the median time to
credential of students who completed any undergraduate
program of study at the institution during each such
award year, except that such minimum guarantee period
shall not be less than the program length of the
program of study in which the student is enrolled.
``(2) Limitation.--An institution shall not be
required to provide a maximum total price guarantee
under subsection (c) to a student after the conclusion
of the 6-year period beginning on the first day on
which the student enrolled at such institution.
``(e) Determination of Maximum Total Price for Completion.--
``(1) In general.--For the purposes of subsection
(c), an institution shall determine, prior to the first
award year in which a student enrolls at the
institution, the maximum total price that may be
charged to the student for completion of a program of
study at the institution for the minimum guarantee
period applicable to a student, before application of
any Federal Pell Grants or other Federal financial aid
under this title. Such a maximum total price for
completion shall be determined for students in each
income category and student aid index category (as
determined by the Secretary). In determining the
maximum total price for completion to be charged to
each such category of students, the institution may
consider the ability of a category of students to pay
tuition and fees, but may not include in such
consideration any Federal Pell Grants or other Federal
financial aid awards that may be available to such
category of students under this title.
``(2) Multiple maximum total price guarantees.--In
the event that a student receives more than 1 maximum
total price guarantee because the student is included
in more than 1 category of students for which the
institution determines a maximum total price guarantee
amount for the purposes of subsection (c), the maximum
total price guarantee applicable to such student for
the purposes of this section shall be equal to the
lowest such guarantee amount.
``SEC. 420U. GRANT AMOUNTS; FLEXIBLE USE OF FUNDS.
``(a) Grant Amount Formula.--
``(1) Formula.--Subject to subsection (b) and section
420V(b), the amount of a PROMISE grant for an eligible
institution for each year of the grant period shall be
calculated by the Secretary annually and shall be equal
to the amount determined by multiplying--
``(A) the lesser of--
``(i) the difference determined by
subtracting one from the quotient of--
``(I) the average, for the 3
most recent award years for
which data are available, of
the median value-added earnings
for each such award year of
students who completed any
program of study of the
institution; divided by
``(II) the average, for the 3
most recent award years for
which data are available, of
the maximum total price for
completion determined under
section 420T(e) applicable for
each such award year to
students enrolled in the
institution in any program of
study who received financial
aid under this title; or
``(ii) the number two;
``(B) the average, for the 3 most recent
award years for which data are available, of
the total dollar amount of Federal Pell Grants
awarded to students enrolled in the institution
in each such award year; and
``(C) the average, for the 3 most recent
award years for which data are available, of
the percentage of low-income students who
received Federal financial assistance under
this title who were enrolled in the institution
in each such award year who--
``(i) completed a program of study at
the institution within 100 percent of
the program length of such program; or
``(ii) only in the case of a two-year
institution or a less than two-year
institution--
``(I) transfer to a four-year
institution; and
``(II) within 4 years after
first enrolling at the two-year
or less than two-year
institution, complete a program
of study at the four-year
institution for which a
bachelor's degree (or
substantially similar
credential) is awarded.
``(2) Definition of low-income.--In this section, the
term `low-income', when used with respect to a student,
means that the student's family income does not exceed
the maximum income in the lowest income category (as
determined by the Secretary).
``(b) Maximum Grant Amount.--Notwithstanding subsection (a),
the maximum amount an eligible institution may receive annually
for a grant under this subpart shall be the amount equal to--
``(1) the average, for the 3 most recent award years,
of the number of students enrolled in the institution
in an award year who receive Federal financial aid
under this title; multiplied by
``(2) $5,000.
``(c) Flexible Use of Funds.--A PROMISE grant awarded under
this subpart shall be used by an eligible institution to--
``(1) carry out activities included in the
institution's application for such grant related to
postsecondary affordability, access, and student
success;
``(2) evaluate the effectiveness of the activities
carried out with such grant in accordance with section
420T(b)(3)(A); and
``(3) collect and disseminate promising practices
related to the activities carried out with such grant,
in accordance with section 420T(b)(3)(B).
``SEC. 420V. AVAILABILITY OF FUNDS.
``(a) Used of Reserved Funds.--
``(1) Primary funds.--To carry out this subpart,
there shall be available to the Secretary any funds
remitted to the Secretary as reimbursements in
accordance with section 454(d) for any award year.
``(2) Secondary funds.--Beginning award year 2028-
2029, if the amounts made available to the Secretary
under paragraph (1) to carry out this subpart in any
award year are insufficient to fully fund the PROMISE
grants awarded under this subpart in such award year,
there shall be available to the Secretary, in addition
to such amounts, any funds returned to the Secretary
under section 484B in the previous award year.
``(b) Reduction of Grant Amount in Case of Insufficient
Funds.--
``(1) In general.--If the amounts made available to
the Secretary under subsection (a) to carry out this
subpart for an award year are not sufficient to provide
grants to each eligible institution in the amount
determined under section 420U for such award year, the
Secretary shall reduce each such grant amount by the
applicable percentage described in paragraph (2).
``(2) Applicable percentage.--The applicable
percentage described in this paragraph is the
percentage determined by dividing--
``(A) the amounts made available under
subsection (a) for the award year described in
paragraph (1); by
``(B) the total amount that would be
necessary to provide grants to all eligible
institutions in the amounts determined under
section 420U for such award year.
``SEC. 420W. DEFINITIONS.
``In this title:
``(1) Value-added earnings.--
``(A) In general.--With respect to a student
who received Federal financial aid under this
title and who completed a program of study
offered by an institution of higher education,
the term `value-added earnings' means--
``(i) the annual earnings of such
student measured during the applicable
earnings measurement period for such
program (as determined under
subparagraph (C)); minus
``(ii) in the case of a student who
completed a program of study that
awards--
``(I) an undergraduate
credential, 150 percent of the
poverty line applicable to a
single individual as determined
under section 673(2) of the
Community Services Block Grant
Act (42 U.S.C. 9902(2)) for
such year; or
``(II) a graduate credential,
300 percent of the poverty line
applicable to a single
individual as determined under
section 673(2) of the Community
Services Block Grant Act (42
U.S.C. 9902(2)) for such year.
``(B) Geographic adjustment.--
``(i) In general.--Except as provided
in clause (ii), the Secretary shall use
the geographic location of the
institution at which a student
completed a program of study to adjust
the value-added earnings of the student
calculated under subparagraph (A) by
dividing--
``(I) the difference between
clauses (i) and (ii) of such
subparagraph; by
``(II) the most recent
regional price parity index of
the Bureau of Economics
Analysis for the State or, as
applicable, metropolitan area
in which such institution is
located.
``(ii) Exception.--The value-added
earnings of a student calculated under
subparagraph (A) shall not be adjusted
based on geographic location in
accordance with clause (i) if such
student attended principally through
distance education.
``(C) Earnings measurement period.--
``(i) In general.--For the purpose of
calculating the value-added earnings of
a student, except as provided in clause
(ii), the annual earnings of a student
shall be measured--
``(I) in the case of a
program of study that awards an
undergraduate certificate, post
baccalaureate certificate, or
graduate certificate, 1 year
after the student completes
such program;
``(II) in the case of a
program of study that awards an
associate's degree or master's
degree, 2 years after the
student completes such program;
and
``(III) in the case of a
program of study that awards a
bachelor's degree, doctoral
degree, or professional degree,
4 years after the student
completes such program.
``(ii) Exception.--The Secretary may,
as the Secretary determines appropriate
based on the characteristics of a
program of study, extend an earnings
measurement period described in clause
(i) for a program of study that--
``(I) requires completion of
an additional educational
program after completion of the
program of study in order to
obtain a licensure associated
with the credential awarded for
such program of study; and
``(II) when combined with the
program length of such
additional educational program
for licensure, has a total
program length that exceeds the
relevant earnings measurement
period prescribed for such
program of study under clause
(i),
except that in no case shall the annual
earnings of a student be measured more
than 1 year after the student completes
such additional educational program.
``(2) Program length.--The term `program length'
means the minimum amount of time in weeks, months, or
years that is specified in the catalog, marketing
materials, or other official publications of an
institution of higher education for a full-time student
to complete the requirements for a specific program of
study.''.
(b) Institutional Refunds.--Section 484B of the Higher
Education Act of 1965 (20 U.S.C. 1091b) is amended by adding at
the end the following:
``(f) Reservation of Funds for PROMISE Grants.--
Notwithstanding any other provision of law, the Secretary shall
reserve the funds returned to the Secretary under this section
for 1 year after the return of such funds for the purpose of
awarding PROMISE grants in accordance with subpart 4 of part A
of this title.''.
Subtitle F--Regulatory Relief
SEC. 30051. REGULATORY RELIEF.
(a) 90/10 Rule.--Section 487 of the Higher Education Act of
1965 (20 U.S.C. 1094) is amended--
(1) in subsection (a), by repealing paragraph (24);
(2) by striking subsection (d); and
(3) by redesignating subsections (e) through (j) as
subsections (d) through (i), respectively.
(b) Gainful Employment.--The Higher Education Act of 1965 (20
U.S.C. 1001 et seq.) is amended--
(1) in section 101(b)(1), by striking ``gainful
employment in'';
(2) in section 102--
(A) in subsection (b)(1)(A)(i), by striking
``gainful employment in''; and
(B) in subsection (c)(1)(A), by striking
``gainful employment in''; and
(3) in section 481(b)(1)(A)(i), by striking ``gainful
employment in''.
(c) Other Repeals.--The following regulations (including any
supplement or revision to such regulations) are repealed and
shall have no legal effect:
(1) Closed school discharges.--Sections 674.33(g),
682.402(d), and 685.214 of title 34, Code of Federal
Regulations (relating to closed school discharges), as
added or amended by the final regulations published by
the Department of Education in the Federal Register on
November 1, 2022 (87 Fed. Reg. 65904 et seq.).
(2) Borrower defense to repayment.--Subpart D of part
685 of title 34, Code of Federal Regulations (relating
to borrower defense to repayment), as added or amended
by the final regulations published by the Department of
Education in the Federal Register on November 1, 2022
(87 Fed. Reg. 65904 et seq.).
(d) Effect of Repeal.--Any regulations repealed by subsection
(c) that were in effect on June 30, 2023, are restored and
revived as if the repeal of such regulations under such
subsection had not taken effect.
(e) Prohibition.--The Secretary of Education may not
implement any rule, regulation, policy, or executive action
specified in this section (or a substantially similar rule,
regulation, policy, or executive action) unless authority for
such implementation is explicitly provided in an Act of
Congress.
Subtitle G--Limitation on Authority
SEC. 30061. LIMITATION ON AUTHORITY OF THE SECRETARY TO PROPOSE OR
ISSUE REGULATIONS AND EXECUTIVE ACTIONS.
Part G of title IV of the Higher Education Act of 1965 (20
U.S.C. 1088 et seq.) is amended by inserting after section 492
the following:
``SEC. 492A. LIMITATION ON AUTHORITY OF THE SECRETARY TO PROPOSE OR
ISSUE REGULATIONS AND EXECUTIVE ACTIONS.
``(a) Draft Regulations.--Beginning on the date of enactment
of this section, a draft regulation implementing this title (as
described in section 492(b)(1)) that is determined by the
Secretary to be economically significant shall be subject to
the following requirements (regardless of whether negotiated
rulemaking occurs):
``(1) The Secretary shall determine whether the draft
regulation, if implemented, would result in an increase
in a subsidy cost.
``(2) If the Secretary determines under paragraph (1)
that the draft regulation would result in an increase
in a subsidy cost, then the Secretary may not take any
further action with respect to such regulation.
``(b) Proposed or Final Regulations and Executive Actions.--
Beginning on the date of enactment of this section, the
Secretary may not issue a proposed rule, final regulation, or
executive action implementing this title if the Secretary
determines that the rule, regulation, or executive action--
``(1) is economically significant; and
``(2) would result in an increase in a subsidy cost.
``(c) Relationship to Other Requirements.--The analyses
required under subsections (a) and (b) shall be in addition to
any other cost analysis required under law for a regulation
implementing this title, including any cost analysis that may
be required pursuant to Executive Order 12866 (58 Fed. Reg.
51735; relating to regulatory planning and review), Executive
Order 13563 (76 Fed. Reg. 3821; relating to improving
regulation and regulatory review), or any related or successor
orders.
``(d) Definition.--In this section, the term `economically
significant', when used with respect to a draft, proposed, or
final regulation or executive action, means that the regulation
or executive action is likely, as determined by the Secretary--
``(1) to have an annual effect on the economy of
$100,000,000 or more; or
``(2) to adversely affect in a material way the
economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or
safety, or State, local, or tribal governments or
communities.''.
Purpose
The purpose of the Committee Print is to lower the cost of
postsecondary education for taxpayers, students, and families.
Committee Action
119TH CONGRESS
First Session--Legislative Action
On April 29, 2025, the Committee considered the Committee
Print and voted to transmit the Committee Print, as amended, to
the Committee on the Budget by a vote of 21 ayes and 14 nays.
The Committee considered and adopted the following
amendments to the Committee Print:
Rep. Tim Walberg (R-MI-05) offered an
Amendment in the Nature of a Substitute (ANS) that made
a technical edit to the Committee Print. The amendment
was adopted by voice vote.
The Committee also considered the following amendments:
Rep. Alma S. Adams (D-NC-12) offered an
amendment to prohibit implementation of risk-sharing
until the Secretary can certify that Historically Black
Colleges and Universities (HBCUs) are not
disproportionately harmed. The amendment was defeated
by a recorded vote of 14 ayes and 21 nays.
Rep. Alma S. Adams (D-NC-12) offered an
amendment to prohibit implementation of the Committee
Print until the Secretary of Education can certify that
the Committee Print will not increase net costs for
low-income students. The amendment was defeated by a
recorded vote of 14 ayes and 21 nays.
Rep. Alma S. Adams (D-NC-12) offered an
amendment to strike the provision that caps the total
amount a borrower can receive to the median cost of
college. The amendment was defeated by a recorded vote
of 14 ayes and 21 nays.
Rep. Lucy McBath (D-GA-06) offered an
amendment to strike the repeal of the Biden-Harris
closed school discharge petition. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. Lucy McBath (D-GA-06) offered an
amendment to permit medical residents or interns to
allow their time in residency to count towards the 10
years of Public Service Loan Forgiveness if they are
serving in a rural area. The amendment was defeated by
a recorded vote of 14 ayes and 21 nays.
Rep. Jahana Hayes (D-CT-05) offered an
amendment to say nothing in the Committee Print will
result in a reduction in participation in SNAP. The
amendment was defeated by a recorded vote of 14 ayes
and 21 nays.
Rep. Jahana Hayes (D-CT-05) offered an
amendment to strike the prevention of double benefits
for teacher loan forgiveness. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. Suzanne Bonamici (D-OR-01) offered an
amendment to say nothing in the Committee Print will
result in a reduction of participation in WIC. The
amendment was defeated by a recorded vote of 14 ayes
and 21 nays.
Rep. Suzanne Bonamici (D-OR-01) offered an
amendment to strike the prohibition on the Secretary
from implementing costly regulations. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. Suzanne Bonamici (D-OR-01) offered an
amendment to prohibit implementation of the Committee
Print until the Department of Education's Inspector
General certifies that borrowers won't have increased
student loan payments. The amendment was defeated by a
recorded vote of 14 ayes and 21 nays.
Rep. Joe Courtney (D-CT-02) offered an
amendment to expand the benefits provided under Public
Service Loan Forgiveness. The amendment was defeated by
a recorded vote of 14 ayes and 21 nays.
Rep. John Mannion (D-NY-22) offered an
amendment to require a U.S. Government Accountability
Office (GAO) report on the impact of the DOGE changes
at the Department of Education. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. John Mannion (D-NY-22) offered an
amendment to say that nothing in the Committee Print
impacts access to Medicaid for students enrolled in
colleges. The amendment was defeated by a recorded vote
of 14 ayes and 21 nays.
Rep. Mark Takano (D-CA-39) offered an
amendment to strike the repeal of the Biden-Harris
borrower defense regulation. The amendment was defeated
by a recorded vote of 14 ayes and 21 nays.
Rep. Lucy McBath (D-GA-06) offered an
amendment to prevent Workforce Pell from taking effect
until the Secretary can demonstrate that the other Pell
changes won't cause a decrease in the average Pell
Grant award. The amendment was defeated by a recorded
vote of 14 ayes and 21 nays.
Ranking Member Robert C. ``Bobby'' Scott (D-
VA-03) offered an amendment to strike all the Pell
Grant changes to the Committee Print. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. Ilhan Omar (D-MN-05) offered an
amendment to strike several Pell Grant eligibility
changes. The amendment was defeated by a recorded vote
of 14 ayes and 21 nays.
Rep. Ilhan Omar (D-MN-05) offered an
amendment to restore the duplicative and unnecessary
hardship and unemployment deferments. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. Ilhan Omar (D-MN-05) offered an
amendment to prohibit the use of wage garnishment
provisions under the Higher Education Act to collect on
defaulted student loans. The amendment was defeated by
a recorded vote of 14 ayes and 21 nays.
Rep. Ilhan Omar (D-MN-05) offered an
amendment to require that nothing in the Committee
Print should impact eligibility for Medicaid. The
amendment was defeated by a recorded vote of 14 ayes
and 21 nays.
Rep. Ilhan Omar (D-MN-05) offered an
amendment to require the Secretary of Education to
forgive the outstanding balance of interest and
principle due on certain loans made, insured, or
guaranteed under the Higher Education Act. The
amendment was withdrawn.
Rep. Mark DeSaulnier (D-CA-10) offered an
amendment to prohibit implementation of the Committee
Print until the Secretary of Education certifies that
the Department is in compliance with all existing court
orders and will comply with future court orders. The
amendment was defeated by a recorded vote of 14 ayes
and 21 nays.
Ranking Member Robert C. ``Bobby'' Scott (D-
VA-03) offered an amendment to codify the Biden-Harris
administration's SAVE Repayment plan. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. Mark Takano (D-CA-39) offered an
amendment to strike the repeal of the 90/10 rule. The
amendment was defeated by a recorded vote of 14 ayes
and 21 nays.
Rep. Mark Takano (D-CA-39) offered an
amendment to prohibit implementation of the Committee
Print until the Secretary of Education certifies that
nothing in the Committee Print will increase fraud and
abuse against veteran students. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. Summer L. Lee (D-PA-12) offered an
amendment to add that nothing in the Committee Print
should prevent students from access to reproductive
health care, including abortions. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. Summer L. Lee (D-PA-12) offered an
amendment to prohibit the Department of Education from
sharing health information with the Department of
Government Efficiency. The amendment was defeated by a
recorded vote of 14 ayes and 21 nays.
Rep. Summer L. Lee (D-PA-12) offered an
amendment to strike all the loan limit changes in the
Committee Print. The amendment was defeated by a
recorded vote of 14 ayes and 21 nays.
Rep. Summer L. Lee (D-PA-12) offered an
amendment to turn Pell Grants into a full mandatory
program that is permanently funded. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. Summer L. Lee (D-PA-12) offered an
amendment to prohibit colleges and universities from
providing preferential treatment for admissions to
alumni or donors of the university. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Rep. Summer L. Lee (D-PA-12) offered an
amendment to exempt institutions where more than 20
percent of the enrolled students are eligible for Pell
Grants rom risk sharing. The amendment was defeated by
a recorded vote of 14 ayes and 21 nays.
Rep. Greg Casar (D-TX-35) offered an
amendment to prevent the Department of Education from
sharing any federal student aid or institutional data
with an outside person. The amendment was defeated by a
recorded vote of 14 ayes and 21 nays.
Rep. Greg Casar (D-TX-35) offered an
amendment to prohibit implementation of the Committee
Print until Elon Musk is terminated. The amendment was
defeated by a recorded vote of 14 ayes and 21 nays.
Ranking Member Robert C. ``Bobby'' Scott (D-
VA-03) offered an amendment to prevent the Committee
Print from taking effect until it can be demonstrated
that the Committee Print will not harm Medicaid or
eligibility for child nutrition programs. The amendment
was defeated by a recorded vote of 14 ayes and 21 nays.
Committee Views
INTRODUCTION
Between federal, state, and local government support,
taxpayers are spending over a quarter of a trillion dollars
annually on postsecondary education. The Department of
Education (ED or Department) alone disburses roughly $100
billion in federal student aid annually, essentially making it
the largest consumer bank in the United States. Investments of
this magnitude should result in positive returns for students
and taxpayers, yet that's not the case. For example, half of
the $300 billion in Pell Grants ED will disburse over the next
decade will be to students who never graduate.\1\ Over half of
recent college graduates work in jobs that only require a high
school diploma.\2\ Unsurprisingly, students, families, and
taxpayers are questioning whether postsecondary education is
worth the cost.\3\
---------------------------------------------------------------------------
\1\https://www.brookings.edu/articles/a-look-at-pell-grant-
recipients-graduation-rates/.
\2\https://www.insidehighered.com/news/students/academics/2024/02/
22/more-half-recent-four-year-college-grads-underemployed.
\3\https://www.wsj.com/articles/americans-are-losing-faith-in-
college-education-wsj-norc-poll-finds-3a836ce1.
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Rising Costs
In the two decades prior to the COVID-19 pandemic,
published tuition and fees increased an astounding 164 percent,
nearly three times faster than the rate of inflation. Such
increases far outpace the costs of medical services, child
care, housing, and nearly every other good or service in the
economy.\4\ Since there has been no commensurate increases in
household income, paying for college has become an increasingly
difficult endeavor, with the share of Americans' expenditures
put towards postsecondary education nearly doubling between
1989 and 2019.\5\ Even after accounting for grants and
scholarships, the typical low-income family is still expected
to pay roughly a third of its household income for the annual
cost of an in-state public education.\6\
---------------------------------------------------------------------------
\4\https://www.aei.org/carpe-diem/chart-of-the-day-or-century-2/.
\5\https://freopp.org/whitepapers/why-college-is-too-expensive-and-
how-competition-can-fix-it/.
\6\https://nces.ed.gov/programs/coe/indicator/cua.
---------------------------------------------------------------------------
Rising costs are not to the result of inadequate government
support, as taxpayer funding for postsecondary education is
higher today than at any point in the nation's history. In
fact, if tuition revenue per student had simply risen at the
rate of inflation over the last two decades, expansions in
financial aid would have reduced the average in-state public
college student's tuition bill to zero.\7\ Rather, the
overwhelming evidence suggests that colleges have exploited the
availability of generous government support to charge
outrageous prices for low-value degrees and fund wasteful
spending on campus. For example, a 2017 study by the New York
Federal Reserve found that colleges raise tuition by 60 cents
for each $1 increase in federal loan subsidies.\8\ Other
studies have found that the PLUS loan program, which provides
effectively unlimited federal loans to parents of undergraduate
and graduate students, has inflationary impacts on tuition as
well; according to a 2023 study, the PLUS loans to graduate
students increase costs dollar for dollar.\9\ Simply put,
colleges ``capture'' financial aid in the form of higher
prices, and those higher prices result in more taxpayer
spending on financial aid to try to fill the gap, only for that
financial aid to be captured, and so on and so forth.
---------------------------------------------------------------------------
\7\https://freopp.org/whitepapers/why-college-is-too-expensive-and-
how-competition-can-fix-it/.
\8\https://www.newyorkfed.org/medialibrary/media/research/
staff_reports/sr733.pdf.
\9\https://lesleyjturner.com/GradPLUS_Feb2023.pdf.
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Declining Returns
Rising costs would not be a problem if the benefits of
postsecondary education rose at the same rate. However, both
graduation rates and the college wage premium have been
stagnant for two decades.\10\ As a result of rising costs and
stagnant outcomes, the return on investment for postsecondary
education has inevitably declined. Research shows that a
quarter of bachelor's degree programs and 40 percent of
master's degree programs leave students worse off than if they
had not enrolled in college in the first place.\11\ Moreover,
far too many students do not graduate at all; according to data
from the Department, 40 percent of students never complete
their degree.\12\
---------------------------------------------------------------------------
\10\https://www.texaspolicy.com/andrew-gillens-statement-before-
the-u-s-house-committee-on-education-and-the-workforce/.
\11\https://freopp.org/whitepapers/does-college-pay-off-a-
comprehensive-return-on-investment-analysis/.
\12\https://nces.ed.gov/programs/digest/d21/tables/dt21_326.10.asp.
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Importantly, students aren't the only party that suffers
when enrolling in postsecondary education that doesn't pay off;
taxpayers suffer as well. Students face higher unemployment
rates, rely on government safety net programs, and ultimately
fail to repay their loans--all of which impacts taxpayers.
Despite ``oversight'' of postsecondary education from states,
accreditors, and ED, hundreds of thousands of students will
borrow for programs that leave them worse off than if they had
never enrolled in school in the first place. Currently, federal
student loans have essentially zero underwriting when it comes
to the cost and quality of the education students are pursuing,
and colleges, which receive all these dollars up-front, have no
incentive to change it. In turn, taxpayers are expected to
recoup just 80 cents for every dollar lent to students and
parents, resulting in over a quarter-trillion dollars in losses
over the next decade alone.\13\
---------------------------------------------------------------------------
\13\https://www.cbo.gov/system/files/2024-06/51310-2024-06-
studentloan.pdf.
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A Broken System
The repeated patching of this broken system has built up a
horrific Frankenstein that is increasingly problematic,
politically contentious, and difficult to fix. In the absence
of congressional action, the Biden-Harris administration
attempted to spend $1 trillion in taxpayer money on student
loan bailouts while doing nothing to address the underlying
issues of student debt and college costs.\14\ As a result,
students are expected to borrow more and default at greater
rates than those taking out loans during the height of the
COVID-19 pandemic.\15\ Just one third of borrowers are actually
making payments on their loans as required, with the tens of
millions of others being either delinquent, in default, or in
limbo as a result of this Democrat-created crisis.\16\
---------------------------------------------------------------------------
\14\https://www.crfb.org/blogs/total-cost-student-debt-
cancellation.
\15\https://www.cbo.gov/system/files/2024-06/51310-2024-06-
studentloan.pdf.
https://www2.ed.gov/about/overview/budget/budget25/justifications/t-
sloverview.pdf.
\16\https://prestoncooper93.substack.com/p/the-return-to-student-
loan-repayment.
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Student Success and Taxpayer Savings
Through budget reconciliation, Republicans have an
opportunity to provide real, lasting solutions to the issues
plaguing postsecondary education while saving taxpayers
hundreds of billions of dollars in the process through policies
focused on streamlining loan repayment, simplifying student
loan options, and strengthening accountability to ensure that
students and taxpayers get a return on their investment in
postsecondary education.
Streamlining Student Loan Repayment
Under current law, there are over 50 ways for borrowers to
meet their repayment obligations. This tangled web of repayment
options makes it difficult for schools and loan servicers to
communicate options to borrowers, including those who stand to
benefit the most from certain borrower safety net options like
income-driven repayment (IDR) plans but often never enroll in
such plans because they are unable to navigate them
effectively.\17\ Moreover, struggling borrowers also are
deterred from making payments under IDR in many cases because
their payments too often fail to cover their interest, let
alone reduce their balance by a meaningful amount, leaving
taxpayers to foot the bill when the borrower ultimately
defaults. To reduce complexity and protect borrowers and
taxpayers from unaffordable debt, House Republicans are
proposing to pare back the maze of options and curb excess loan
forgiveness windfalls provided to those who don't need them.
---------------------------------------------------------------------------
\17\https://www.pewtrusts.org/en/research-and-analysis/reports/
2020/05/borrowers-discuss-the-challenges-of-student-loan-repayment.
---------------------------------------------------------------------------
Repayment Plans
There are currently several different repayment plan
options; however, the most utilized plans fall into two
categories: (1) fixed repayment plans; and (2) IDR plans, which
allow borrowers to make payments based on their income rather
than their debt and provide forgiveness typically after 20 to
25 years even for payments of $0. In 2023, the Biden
administration created a new IDR plan--dubbed the SAVE plan--
that dramatically lowered monthly payments for all borrowers
and decreased time to forgiveness for all borrowers to as
little as 10 years. Simply put, the SAVE repayment plan
effectively turned the student loan program into a backdoor
mechanism for providing ``free'' college. Importantly, several
states filed lawsuits seeking to block its implementation.
Federal courts have signaled that they not only see the
``SAVE'' plan as illegal but also that other existing plans
created by ED using the same statutory authority are illegal as
well, threatening to throw the entire student loan repayment
system into chaos and leaving the current administration with
few options.
In order to prevent this Democrat-created crisis from
occurring today or recurring in the future, the House
reconciliation proposal streamlines repayment options for
current and new borrowers. Borrowers enrolled in the IDR plans
that are subject to the injunction currently in place by the
courts will be moved into the existing income-based repayment
plan that is authorized in the Higher Education Act and will
also have available to them all fixed repayment options
authorized in law as well as the new repayment assistance plan
described below. These reforms will ensure that current
borrowers maintain access to safety net programs in light of
the pending court decision and will prevent any further
disruptions for borrowers going forward. For new borrowers, the
proposal pairs down repayment options to just two: a fixed
``mortgage'' style plan and a ``repayment assistance plan''
that provides targeted relief to borrowers in need by
preventing ballooning balances, reducing payments for those
with children, and eliminating marriage penalties that exist
under current plans. Taken together, the repayment reforms will
vastly simplify student loan repayment to benefit both
borrowers and taxpayers.
Simplifying Student Loan Options
Overwhelming evidence suggests that colleges have exploited
the availability of generous taxpayer-backed loans to raise
prices rather than improve access and affordability.
Recognizing this, House Republicans are proposing reforms to
streamline loan options to increase simplicity and
affordability for students and families, as well as curtail the
extent to which schools force students to borrow excessive
amounts of debt that they will never be able to repay. These
reforms include sunsetting Grad PLUS Loans--which allow
graduate students to effectively borrow unlimited sums--as well
as subsidized loans provided to undergraduates. In doing so,
the proposal also replaces the outdated and arbitrary annual
loan limits currently in place under the Stafford program with
flexible annual loan limits that vary by students' program of
study, while also adding reasonable aggregate limits. The House
proposal also reins in the predatory Parent PLUS program which,
like Grad PLUS, has no borrowing limits, by requiring that
students maximize their borrowing first before PLUS loans are
made available to their parents, as well as by placing a
reasonable $50,000 aggregate cap on borrowing per parent.
Accountability for Students and Taxpayers
While the reforms to loan limits and student loan repayment
will go a long way towards curtailing excessive government
spending, those reforms alone will not address the fact that
hundreds of billions of taxpayer dollars flow to low-value
institutions and programs each year, leaving both students and
taxpayers worse for investing in them. Under the current
system, thousands of students enroll in programs that leave
them financially worse off than if they had never gone to
college in the first place. The existence of schools and
programs like this, which give students a negative return on
their investment, is the consequence of a lack of
accountability for college costs and student outcomes.\18\ The
House proposal will ensure accountability for students,
institutions, and ED when it comes to the hundreds of billions
of taxpayer dollars all three parties benefit from.
---------------------------------------------------------------------------
\18\https://freopp.org/whitepapers/does-college-pay-off-a-
comprehensive-return-on-investment-analysis/.
---------------------------------------------------------------------------
Skin in the Game
The centerpiece of the House Republican proposal to lower
the cost of postsecondary education for students, families, and
taxpayers is the bipartisan notion that all institutions should
have a stake in their students' success. To address the absence
in underwriting and accountability for taxpayer dollars, House
Republicans are proposing to hold colleges accountable for the
outcomes of their graduates, including through charging them a
fee for the taxpayer losses on the loans they disburse to
students, as well as rewarding schools for enrolling and
graduating low-income students in high-value programs with
flexible block grant funding. Importantly, this proposed new
system will be phased in over the next decade, with the first
risk-sharing payments occurring no earlier than three years
after enactment. Further, with a sector neutral accountability
system in place, the proposal peels back outdated and flawed
metrics like the 90/10 rule that artificially increase tuition
and punish institutions for enrolling low-income students in
high-quality programs, as well as other rules that are
selectively applied based on the tax status of the college.
Taken together, the Committee Print's institutional
accountability provisions will change the incentives for
institutions, lower college costs, and yield financial returns
for students, schools, and taxpayers alike.
Other Reforms
The House proposal also improves accountability for
taxpayer dollars with respect to students and the Department.
To the former, recognizing that half of Pell Grant recipients
fail to graduate, the proposal changes the definition of full-
time student with respect to the Pell Grant, requiring that
students take the appropriate number of courses to allow them
to graduate on-time in order to receive their full award. The
proposal also aligns Pell Grant eligibility with the federal
student loan program, requiring that students must be enrolled
at least half time (though calculated over the entire year
rather than semester) in order to receive their Pell Grant.
Importantly, the proposal uses the savings recovered from these
Pell eligibility changes to help shore up Pell Grant funding
over the next decade, which has an expected shortfall of $87
billion by the end of fiscal year 2034. These reforms, along
with the supplemental funding, close nearly 80 percent of the
shortfall through 2034, and fully funds the Pell Grant program
into Fiscal Year 2027. Lastly, the Committee Print aligns
postsecondary education and the workforce by opening up Pell
Grant eligibility to high-quality, short-term credential
programs, including non-traditional providers that operate
outside of the accreditation system but demonstrate strong
outcomes.
With respect to the Department, the proposal repeals
regulations providing backdoor loan forgiveness put forth under
President Biden and ensures that no future Secretary has the
opportunity to transfer trillions of dollars of debt from those
who borrowed to hardworking taxpayers who did not.
COMMITTEE PRINT SUMMARY
There is bipartisan agreement that student loan debt is too
high, completion rates are too low, and far too many students
are left worse off after paying for postsecondary education
than if they had never enrolled in the first place. For too
long, policymakers have relied on patchwork ``solutions'' that
exacerbate these problems without addressing their root cause:
the inflated cost of obtaining a college degree. Fortunately,
Committee Republicans are stepping up to fix the underlying
problem permanently through the Committee Print, which provides
a comprehensive solution that will lower college costs for
students and families in the following ways:
Strengthening accountability for students
and taxpayers. It is time to ensure accountability for
the hundreds of billions of taxpayer funds that flow to
postsecondary education. Colleges should have a stake
in their students' success and be responsible for
reimbursing taxpayers for a portion of their losses if
students don't see financial value from enrolling in an
institution and can't repay.
Students, families, and the
federal government pay tens, sometimes
hundreds, of thousands of dollars in tuition
while many degrees offer students no additional
value but leave graduates with debt. Too many
are left worse off than if they never enrolled
in the first place.
The Committee Print requires
colleges to have skin in the game by paying a
portion of their students' unpaid loans based
on how much of a return on investment the
degree provided. Institutions that continue to
saddle their students with debt eventually face
increasing penalties and risk loss of access to
federal student aid.
The Committee Print reins in
executive overreach by preventing any future
attempts at loan ``forgiveness'' and repeals a
range of burdensome and costly Biden-era
regulations.
Additionally, Pell Grant reforms
ensure Pell funds go towards families and
students in need while promoting completion.
Students must be enrolled at least half-time to
receive Pell. The Committee Print also closes
loopholes that allowed wealthy families with
foreign income or large amounts of assets to
still receive Pell Grants. The Committee Print
reinvests budgetary savings back into Pell to
keep the program sustainable.
Streamlining student loan options. The
reforms included in the Committee Print protect
taxpayers and increase simplicity and affordability so
students don't borrow excessive debt they can never
repay. It is time to reform the loan program so that
students, institutions, and taxpayers can all benefit.
For undergraduate students, the
Committee Print has a maximum cap of $50,000.
For graduate students, it sunsets the harmful
GradPLUS loans that allowed for uncapped
lending for programs that had little to no
return on investment. For the loans remaining
for graduate students, the Committee Print now
implements maximum aggregate student loan caps
of $100,000 for graduate students and $150,000
for professional students.
The Committee Print sets annual
limits of both undergraduate and graduate loans
to the median cost of the program of study
across the nation. This will put downward
pressure on program costs. Thus, the lifetime
aggregate limit for every student is $200,000.
The Committee Print also puts a
total cap of $50,000 on the predatory Parent
PLUS loans and requires students to borrow the
maximum amount they can before their parent
takes out a loan on their behalf.
Simplifying the student loan repayment. The
student loan repayment process has become bloated and
too complex. The Committee Print simplifies the loan
repayment system to help troubled borrowers repay loans
without saddling taxpayers with the burden of paying
back the loans of wealthy borrowers.
The Committee Print repeals
President Biden's improperly named ``SAVE''
repayment plan that would have cost taxpayers
$220 billion because it enabled little to no
actual repayment of loans.
The Committee Print then
streamlines the litany of other repayment plans
into two plans: a fixed repayment plan (like a
house mortgage) and an income-driven repayment
(IDR) plan to help lower-income borrowers in
need.
The Committee Print's new IDR
plan scales payments up with income, includes a
minimum monthly payment, and prevents balances
from always ballooning. This ensures that all
borrowers, even those struggling, can make
payments.
Current borrowers in limbo will
be given clarity and placed into one of the
existing statutory income-based repayment
plans. They then have the option to switch into
the new plan if they choose.
Section by Section
Providing for reconciliation pursuant to H. Con. Res. 14,
the Concurrent Resolution on the Budget for Fiscal Year 2025
Subtitle A--Student Eligibility
Sec. 30001 Eligibility
Student Eligibility. Streamlines the categories of
non-citizens that would be eligible to receive a grant, loan,
or work assistance under the Higher Education Act (HEA) to
include lawful permanent residents (LPR), certain nationals of
Cuba, certain nationals of Ukraine or Afghanistan, and
individuals that are part of a Compact of Free Association.
Sec. 30002 Amount of Need; Cost of Attendance; Median Cost of College
Amount of Need; Cost of Attendance; Median Cost of
College. Caps the total amount of federal student aid a student
can receive annually at the ``median cost of college,'' defined
as the median cost of attendance for students enrolled in the
same program of study nationally and calculated by the
Secretary using data from the previous award year.
Exemption of Certain Assets. Restores exemptions
of certain assets under the Free Application for Federal
Student Aid.
Subtitle B--Loan Limits
Sec. 30011 Loan Limits
Termination of Authority to Make Certain Loans.
Terminates authority to make Grad PLUS loans and subsidized
loans for undergraduate students on or after July 1, 2026;
includes a three-year exception for students who were enrolled
in a program of study as of June 30, 2026, and had received
such loans for such program.
Unsubsidized Loans: Amends the maximum annual loan
limit for unsubsidized loans disbursed on or after July 1,
2026, to the median cost of students' program of study; amends
aggregate limits for such loans disbursed to students for an
undergraduate program ($50,000), graduate program ($100,000),
and professional program ($150,000).
Parent PLUS Loans: Requires undergraduate students
to exhaust their unsubsidized loans before parents can utilize
Parent PLUS to cover their remaining cost of attendance;
establishes an aggregate limit for Parent PLUS loans of $50,000
for parents on behalf of their dependent child; includes a
three-year exception for students who were enrolled in a
program of study as of June 30, 2026, and had received such
loans for such program.
Additional Reforms. Allows financial aid
administrators to reduce annual borrowing limits below the
statutory maximum as long as such limits are applied equally to
all students; requires federal student loans to be pro-rated
for students who are enrolled less than full-time.
Subtitle C--Loan Repayment
Sec. 30021 Loan Repayment
Income-Contingent Repayment; Transition Authority;
Limitation of Regulatory Authority. Terminates all repayment
plans authorized under income-contingent repayment (ICR);
requires the Secretary to transfer borrowers enrolled in an ICR
plan or an administrative forbearance associated with such
plans into the statutorily authorized income-based repayment
(IBR) plan; prohibits the Secretary from issuing or modifying
regulations with respect to IBR and the Repayment Assistance
Plan with the exception of interim final rules with respect to
transitioning borrowers to IBR, modifying IBR terms consistent
with the Amendments made under this section, and implementing
the Repayment Assistance Plan established under this section;
waives negotiated rulemaking with respect to transitioning
borrowers to IBR and modifying the terms of such plan.
Repayment Plans for Loans Before July 1, 2026.
Maintains all current repayment options for borrowers with
existing loans disbursed prior to July 1, 2026, with the
exception of ICR; amends the terms of IBR to require borrowers
to pay 15 percent of discretionary income, eliminates the
standard repayment cap and partial financial hardship
requirement, and requires borrowers to pay a maximum of 240 or
300 qualifying payments for undergraduate and graduate
borrowers, respectively; allows borrowers with excepted PLUS
loans who were enrolled in ICR to access IBR.
Repayment Plans for Loans After July 1, 2026.
Repeals all plans authorized under ICR for current and new
borrowers. Terminates existing repayment plans for loans
disbursed on or after July 1, 2026, and establishes the
following new standard repayment plan and Repayment Assistance
Plan for borrowers with such loans:
Standard Repayment Plan.
Establishes a standard repayment plan with
fixed monthly payments and repayment terms that
range from 10 to 25 years based on the amount
borrowed.
Repayment Assistance Plan.
Establishes a new Repayment Assistance Plan
with payments calculated based on borrowers'
total adjusted gross income (AGI), ranging from
1 to 10 percent depending on a borrower's
income; includes a minimum monthly payment of
$10; offers balance assistance to borrowers
making their required on-time payments by
waiving unpaid interest and providing a
matching payment-to-principal of up to $50;
allows borrowers currently in repayment to
enroll in such plan; includes a maximum
repayment term equal to 360 qualifying
payments, which may include previous payments
made under ICR, IBR, and other qualifying
existing plans.
Sec. 30022 Deferment; Forbearance
Economic Hardship and Unemployment Deferments.
Terminates economic hardship and unemployment deferments for
loans disbursed on or after July 1, 2025.
Discretionary Forbearances. Amends the terms of
discretionary forbearances for loans disbursed on or after July
1, 2025, to prohibit use of such forbearances for more than
nine months during a 24-month period.
Medical and Dental Residency Deferment. Amends the
terms of medical and dental residency deferments for loans
disbursed on or after July 1, 2025, to allow for zero interest
accrual for up to four years.
Sec. 30023 Loan Rehabilitation
Loan Rehabilitation. Allows borrowers with
existing and new defaulted loans to rehabilitate their loans
twice instead of once allowing these borrowers a smoother
transition out of default and into repayment; requires payments
for rehabilitation to be no less than $10 for loans disbursed
on or after July 1, 2025.
Sec. 30024 Public Service Loan Forgiveness
Repayment Assistance Plan. Allows payments made
under the Repayment Assistance Plan to count as a qualifying
payment for purposes of Public Service Loan Forgiveness (PSLF).
Qualifying Jobs. Clarifies that payments made by
new borrowers on or after July 1, 2025, who are serving in a
medical or dental residency do not count as a qualifying
payment for purposes of PSLF.
Sec. 30025 Student Loan Servicing
Additional Mandatory Funds. Provides $500 million
in each of the fiscal years 2025 and 2026 to the Secretary for
costs associated with returning borrowers back into repayment
on their loans and to help with the costs of building the new
repayment plan.
Subtitle D--Pell Grants
Sec. 30031 Eligibility
Foreign Income. Requires foreign income exempt
from taxation or foreign income for which an individual
receives a foreign tax credit to be included in the AGI
calculation for purposes of calculating Pell Grant eligibility.
Ineligibility Due to High Student Aid Index.
Students with a student aid index that equals or exceeds twice
the amount of the maximum Pell Grant amount are rendered
ineligible for Pell, regardless of their AGI.
Definition of Full Time Enrollment. Defines full
time for purposes of the Pell Grant as expected to complete at
least 30 semester or trimester hours, or 45 quarter credit
hours (or the clock hour equivalent) in each academic year.
Ineligibility for Less Than Half Time Enrollment.
Requires students to be enrolled on at least a half-time basis
(expected to complete at least 15 semester or trimester hours)
in each academic year to be eligible to receive a Pell Grant.
Sec. 30032 Workforce Pell Grants
Workforce Pell Grant Program. Expands eligibility
for Pell Grants on or after July 1, 2026, to students enrolled
in short-term, high-quality, workforce aligned programs that
meet the requirements of this section; includes guardrails for
student outcomes including value-added earnings, completion
rates, and job placement rates; allows students enrolled in
programs operating outside of the accreditation system to be
eligible for such grants.
Sec. 30033 Pell Shortfall
Additional Funds. Provides $10.5 billion for
fiscal years 2026, 2027, and 2028 to reduce the funding
shortfall for the Pell Grant program.
Subtitle E--Accountability
Sec. 30041 Agreements with Institutions
Agreements with Institutions. Creates skin-in-the-
game accountability for colleges and universities by amending
the terms of the Direct Loan program participation agreement to
require institutions to reimburse the Secretary for a
percentage of the non-repayment balance associated with loans
disbursed on or after July 1, 2027; calculates the
reimbursement percentage based on the total price the
institution charges students for a program of study and the
value-added earnings of students after they graduate or, in the
case of students who do not graduate, the completion rate of
the institution or program.
Penalties for Late or Missed Payments:
Establishes escalating penalties for late payments,
starting with requiring institutions to pay interest on
late payments and scaling up to loss of Title IV
eligibility.
Relief for Voluntary Program Closure:
Waives 50 percent of payments due for a given program
if an IHE voluntarily agrees to cease disbursement of
federal student loans for the program (or a
substantially similar program) for 10 years.
Reservation of Funds. Requires the Secretary to
reserve all reimbursements received from institutions
for the purpose of awarding PROMISE Grants.
Sec. 30042 Campus-Based Aid Programs
PROMISE Grants. Establishes a ``PROMISE'' program
to provide performance-based grants to institutions.
Funding Formula. Provides funds to
institutions based on a formula that rewards colleges
for strong earnings outcomes, low tuition, and
enrolling and graduating low-income students; sets the
maximum amount an institution can receive annually at
$5,000 per federal student aid recipient.
Use of Funds. Provides flexibility to
use funds to meet the maximum price guarantee required
under the program, as well as other initiatives to
improve college affordability, college access, and
student successes in ways that best suit the needs of
the institution and its students; requires institutions
to report and evaluate how funds are used and
disseminate best practices based on those evaluations.
Maximum Price Guarantee. Requires that,
as a condition of receiving PROMISE grants,
institutions must provide prospective students a
guaranteed maximum total price for a given program of
study based on income and financial need categories
established by the Secretary; requires such guarantee
to be for a minimum period of enrollment (up to six
years or the institution's median time to completion,
whichever is less).
Subtitle F--Regulatory Relief
Sec. 30051 Regulatory Relief
90/10 Rule. Permanently repeals the 90/10 rule
which targeted one sector of higher education in favor of
creating a sector-neutral accountability plan.
Gainful Employment. Permanently repeals the
Gainful Employment rule which unfairly targeted one sector of
higher education.
Other Repeals. Repeals the Biden-Harris
administration's regulations pertaining to borrower defense to
repayment and closed school discharges.
Subtitle G--Limitation on Authority
Sec. 30061 Limitation on Authority of the Secretary
Limits on Authority. Requires the Secretary to
confirm that any new regulations or executive actions issued
related to the student loan program will not increase costs to
the federal government. Prohibits any regulations from being
issued that cannot meet that threshold.
Explanation of Amendment
The amendment, the amendment in the nature of a substitute,
is explained in the body of this report.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this Committee Print to the
legislative branch. The Committee Print provides for
reconciliation pursuant to H. Con. Res. 14, the Concurrent
Resolution on the Budget for the Fiscal Year 2025. The
Committee Print does not apply to the Legislative Branch.
Unfunded Mandate Statement
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended
by Section 101(a)(2) of the Unfunded Mandates Reform Act of
1995, Pub. L. No. 104-4), the Committee traditionally adopts as
its own the cost estimate prepared by the Director of the
Congressional Budget Office (CBO) pursuant to section 402 of
the Congressional Budget and Impoundment Control Act of 1974.
However, a cost estimate was not made available to the
Committee in time for the filing of this report.
Earmark Statement
The Committee Print does not contain any congressional
earmarks, limited tax benefits, or limited tariff benefits as
defined in clause 9 of House rule XXI.
Roll Call Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Statement of General Performance Goals and Objectives
In accordance with clause (3)(c) of House rule XIII, the
goal of the Committee Print is to provide for reconciliation
pursuant to H. Con. Res. 14, the Concurrent Resolution on the
Budget for Fiscal Year 2025.
Duplication of Federal Programs
No provision of this Committee Print establishes or
reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
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.
New Budget Authority and CBO Cost Estimate
The Committee has not received a cost estimate for the
Committee Print from the Director of the Congressional Budget
Office.
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 italics, and 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. 101. GENERAL DEFINITION OF INSTITUTION OF HIGHER EDUCATION.
(a) Institution of Higher Education.--For purposes of this
Act, other than title IV, the term ``institution of higher
education'' means an educational institution in any State
that--
(1) admits as regular students only persons having a
certificate of graduation from a school providing
secondary education, or the recognized equivalent of
such a certificate, or persons who meet the
requirements of section 484(d);
(2) is legally authorized within such State to
provide a program of education beyond secondary
education;
(3) provides an educational program for which the
institution awards a bachelor's degree or provides not
less than a 2-year program that is acceptable for full
credit toward such a degree, or awards a degree that is
acceptable for admission to a graduate or professional
degree program, subject to review and approval by the
Secretary;
(4) is a public or other nonprofit institution; and
(5) is accredited by a nationally recognized
accrediting agency or association, or if not so
accredited, is an institution that has been granted
preaccreditation status by such an agency or
association that has been recognized by the Secretary
for the granting of preaccreditation status, and the
Secretary has determined that there is satisfactory
assurance that the institution will meet the
accreditation standards of such an agency or
association within a reasonable time.
(b) Additional Institutions Included.--For purposes of this
Act, other than title IV, the term ``institution of higher
education'' also includes--
(1) any school that provides not less than a 1-year
program of training to prepare students for [gainful
employment in] a recognized occupation and that meets
the provision of paragraphs (1), (2), (4), and (5) of
subsection (a); and
(2) a public or nonprofit private educational
institution in any State that, in lieu of the
requirement in subsection (a)(1), admits as regular
students individuals--
(A) who are beyond the age of compulsory
school attendance in the State in which the
institution is located; or
(B) who will be dually or concurrently
enrolled in the institution and a secondary
school.
(c) List of Accrediting Agencies.--For purposes of this
section and section 102, the Secretary shall publish a list of
nationally recognized accrediting agencies or associations that
the Secretary determines, pursuant to subpart 2 of part H of
title IV, to be reliable authority as to the quality of the
education or training offered.
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) a proprietary institution of higher
education (as defined in subsection (b) of this
section);
(B) a postsecondary vocational institution
(as defined in subsection (c) of this section);
and
(C) only for the purposes of 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 D of title IV, consistent with
the requirements of section 452(d).
(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
under 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 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 D of title IV;
or
(II) the institution--
(aa) has or had a
clinical training
program that was
approved by a State as
of January 1, 1992; and
(bb) continues to
operate a clinical
training program in at
least one State that is
approved by that State;
(ii) in the case of a veterinary
school located outside the United
States that does not meet the
requirements of section 101(a)(4), the
institution's students complete their
clinical training at an approved
veterinary school located in the United
States; or
(iii) in the case of a nursing school
located outside of the United States--
(I) the nursing school has an
agreement with a hospital, or
accredited school of nursing
(as such terms are defined in
section 801 of the Public
Health Service Act (42 U.S.C.
296)), located in the United
States that requires the
students of the nursing school
to complete the students'
clinical training at such
hospital or accredited school
of nursing;
(II) the nursing school has
an agreement with an accredited
school of nursing located in
the United States providing
that the students graduating
from the nursing school located
outside of the United States
also receive a degree from the
accredited school of nursing
located in the United States;
(III) the nursing school
certifies 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;
(IV) the nursing school
reimburses the Secretary for
the cost of any loan defaults
for current and former students
included in the calculation of
the institution's cohort
default rate during the
previous fiscal year; and
(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 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) In general.--For the purpose of
qualifying as an institution under
paragraph (1)(C) of this subsection,
the Secretary shall establish an
advisory panel of medical experts that
shall--
(I) evaluate the standards of
accreditation applied to
applicant foreign medical
schools; and
(II) determine the
comparability of those
standards to standards for
accreditation applied to United
States medical schools.
(ii) Special rule.--If the
accreditation standards described in
clause (i) are determined not to be
comparable, the foreign medical school
shall be required to meet the
requirements of section 101.
(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 D
of title IV for graduate
medical schools that--
(aa) are located
outside of the United
States;
(bb) do not meet the
requirements of
subparagraph (A)(i);
and
(cc) have a clinical
training program
approved by a State
prior to January 1,
2008.
(II) Recommendations.--In the
report described in subclause
(I), the advisory panel's
eligibility criteria shall
include recommendations
regarding the appropriate
levels of performance for
graduate medical schools
described in such subclause in
the following areas:
(aa) Entrance
requirements.
(bb) Retention and
graduation rates.
(cc) Successful
placement of students
in United States
medical residency
programs.
(dd) Passage rate of
students on the United
States Medical
Licensing Examination.
(ee) The extent to
which State medical
boards have assessed
the quality of such
school's program of
instruction, including
through on-site
reviews.
(ff) The extent to
which graduates of such
schools would be unable
to practice medicine in
1 or more States, based
on the judgment of a
State medical board.
(gg) Any areas
recommended by the
Comptroller General of
the United States under
section 1101 of the
Higher Education
Opportunity Act.
(hh) Any additional
areas the Secretary may
require.
(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 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 D
of title IV based on
the recommendations of
such report; and
(bb) not earlier than
one year after the
issuance of proposed
regulations under item
(aa), issue final
regulations
establishing such
criteria for
eligibility.
(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 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 D of title IV while attending such
institution for the academic year succeeding
the academic year in which such loss of
eligibility occurred.
(3) Limitations based on course of study or
enrollment.--An institution shall not be considered to
meet the definition of an institution of higher
education in paragraph (1) if such institution--
(A) offers more than 50 percent of such
institution's courses by correspondence
(excluding courses offered by
telecommunications as defined in section
484(l)(4)), unless the institution is an
institution that meets the definition in
section 3(3)(C) of the Carl D. Perkins Career
and Technical Education Act of 2006;
(B) enrolls 50 percent or more of the
institution's students in correspondence
courses (excluding courses offered by
telecommunications as defined in section
484(l)(4)), unless the institution is an
institution that meets the definition in such
section, except that the Secretary, at the
request of such institution, may waive the
applicability of this subparagraph to such
institution for good cause, as determined by
the Secretary in the case of an institution of
higher education that provides a 2- or 4-year
program of instruction (or both) for which the
institution awards an associate or
baccalaureate degree, respectively;
(C) has a student enrollment in which more
than 25 percent of the students are
incarcerated, except that the Secretary may
waive the limitation contained in this
subparagraph for a nonprofit institution that
provides a 2- or 4-year program of instruction
(or both) for which the institution awards a
bachelor's degree, or an associate's degree or
a postsecondary diploma, respectively; or
(D) has a student enrollment in which more
than 50 percent of the students do not have a
secondary school diploma or its recognized
equivalent, and does not provide a 2- or 4-year
program of instruction (or both) for which the
institution awards a bachelor's degree or an
associate's degree, respectively, except that
the Secretary may waive the limitation
contained in this subparagraph if a nonprofit
institution demonstrates to the satisfaction of
the Secretary that the institution exceeds such
limitation because the institution serves,
through contracts with Federal, State, or local
government agencies, significant numbers of
students who do not have a secondary school
diploma or its recognized equivalent.
(4) Limitations based on management.--An institution
shall not be considered to meet the definition of an
institution of higher education in paragraph (1) if--
(A) the institution, or an affiliate of the
institution that has the power, by contract or
ownership interest, to direct or cause the
direction of the management or policies of the
institution, has filed for bankruptcy, except
that this paragraph shall not apply to a
nonprofit institution, the primary function of
which is to provide health care educational
services (or an affiliate of such an
institution that has the power, by contract or
ownership interest, to direct or cause the
direction of the institution's management or
policies) that files for bankruptcy under
chapter 11 of title 11, United States Code,
between July 1, 1998, and December 1, 1998; or
(B) the institution, the institution's owner,
or the institution's chief executive officer
has been convicted of, or has pled nolo
contendere or guilty to, a crime involving the
acquisition, use, or expenditure of funds under
title IV, or has been judicially determined to
have committed fraud involving funds under
title IV.
(5) Certification.--The Secretary shall certify an
institution's qualification as an institution of higher
education in accordance with the requirements of
subpart 3 of part H of title IV.
(6) Loss of eligibility.--An institution of higher
education shall not be considered to meet the
definition of an institution of higher education in
paragraph (1) if such institution is removed from
eligibility for funds under title IV as a result of an
action pursuant to part H of title IV.
(b) Proprietary Institution of Higher Education.--
(1) Principal criteria.--For the purpose of this
section, the term ``proprietary institution of higher
education'' means a school that--
(A)(i) provides an eligible program of
training to prepare students for [gainful
employment in] a recognized occupation; or
(ii)(I) provides a program leading to a
baccalaureate degree in liberal arts, and has
provided such a program since January 1, 2009;
and
(II) is accredited by a recognized regional
accrediting agency or association, and has
continuously held such accreditation since
October 1, 2007, or earlier;
(B) meets the requirements of paragraphs (1)
and (2) of section 101(a);
(C) does not meet the requirement of
paragraph (4) of section 101(a);
(D) is accredited by a nationally recognized
accrediting agency or association recognized by
the Secretary pursuant to part H of title IV;
and
(E) has been in existence for at least 2
years.
(2) Additional institutions.--The term ``proprietary
institution of higher education'' also includes a
proprietary educational institution in any State that,
in lieu of the requirement in section 101(a)(1), admits
as regular students individuals--
(A) who are beyond the age of compulsory
school attendance in the State in which the
institution is located; or
(B) who will be dually or concurrently
enrolled in the institution and a secondary
school.
(c) Postsecondary Vocational Institution.--
(1) Principal criteria.--For the purpose of this
section, the term ``postsecondary vocational
institution'' means a school that--
(A) provides an eligible program of training
to prepare students for [gainful employment in]
a recognized occupation;
(B) meets the requirements of paragraphs (1),
(2), (4), and (5) of section 101(a); and
(C) has been in existence for at least 2
years.
(2) Additional institutions.--The term
``postsecondary vocational institution'' also includes
an educational institution in any State that, in lieu
of the requirement in section 101(a)(1), admits as
regular students individuals--
(A) who are beyond the age of compulsory
school attendance in the State in which the
institution is located; or (B) who will be
dually or concurrently enrolled in the
institution and a secondary school.
* * * * * * *
TITLE IV--STUDENT ASSISTANCE
Part A--Grants to Students in Attendance at Institutions of Higher
Education
* * * * * * *
Subpart 1--Federal Pell Grants
SEC. 401. FEDERAL PELL GRANTS: AMOUNT AND DETERMINATIONS; APPLICATIONS.
(a) Purpose; Definitions.--
(1) Purpose.--The purpose of this subpart is to
provide a Federal Pell Grant to low-income students.
(2) Definitions.--In this section--
[(A) the term ``adjusted gross income''
means--
[(i) in the case of a dependent
student, the adjusted gross income (as
defined in section 62 of the Internal
Revenue Code of 1986) of the student's
parents in the second tax year
preceding the academic year; and
[(ii) in the case of an independent
student, the adjusted gross income (as
defined in section 62 of the Internal
Revenue Code of 1986) of the student
(and the student's spouse, if
applicable) in the second tax year
preceding the academic year;]
(A) the term ``adjusted gross income''
means--
(i) in the case of a dependent
student, for the second tax year
preceding the academic year--
(I) the adjusted gross income
(as defined in section 62 of
the Internal Revenue Code of
1986) of the student's parents;
plus
(II) the foreign income (as
described in section 480(b)(5))
of the student's parents; and
(ii) in the case of an independent
student, for the second tax year
preceding the academic year--
(I) the adjusted gross income
(as defined in section 62 of
the Internal Revenue Code of
1986) of the student (and the
student's spouse, if
applicable); plus
(II) the foreign income (as
described in section 480(b)(5))
of the student (and the
student's spouse, if
applicable);
(B) the term ``family size'' has the meaning
given the term in section 480(k);
(C) the term ``poverty line'' means the
poverty line (as determined under the poverty
guidelines updated periodically in the Federal
Register by the Department of Health and Human
Services under the authority of section 673(2)
of the Community Services Block Grant Act (42
U.S.C. 9902(2))) applicable to the student's
family size and applicable to the second tax
year preceding the academic year;
(D) the term ``single parent'' means--
(i) a parent of a dependent student
who was a head of household (as defined
in section 2(b) of the Internal Revenue
Code of 1986) or a surviving spouse (as
defined in section 2(a) of the Internal
Revenue Code of 1986) or was an
eligible individual for purposes of the
credit under section 32 of such Code,
in the second tax year preceding the
academic year; or
(ii) an independent student who is a
parent and was a head of household (as
defined in section 2(b) of the Internal
Revenue Code of 1986) or a surviving
spouse (as defined in section 2(a) of
the Internal Revenue Code of 1986) or
was an eligible individual for purposes
of the credit under section 32 of such
Code, in the second tax year preceding
the academic year;
(E) the term ``total maximum Federal Pell
Grant'' means the total maximum Federal Pell
Grant award per student for any academic year
described under subsection (b)(5); [and]
(F) the term ``minimum Federal Pell Grant''
means the minimum amount of a Federal Pell
Grant that shall be awarded to a student for
any academic year in which that student is
attending full time, which shall be equal to 10
percent of the total maximum Federal Pell Grant
for such academic year[.]; and
(G) notwithstanding section
481(a)(2)(A)(iii), the terms ``full time'' and
``full-time'' (except with respect to
subsection (d)(4) when used as part of the term
``normal full-time workload'') mean, with
respect to a student enrolled in an
undergraduate course of study, the student is
expected to complete at least 30 semester or
trimester hours or 45 quarter credit hours (or
the clock hour equivalent) in each academic
year a student is enrolled in the course of
study.
(b) Amount and Distribution of Grants.--
(1) Determination of amount of a federal pell
grant.--Subject to paragraphs (2) and (3), the amount
of a Federal Pell Grant for a student shall be
determined in accordance with the following:
(A) A student shall be eligible for a total
maximum Federal Pell Grant for an academic year
in which the student is enrolled in an eligible
program full time--
(i) if the student (and the student's
spouse, if applicable), or, in the case
of a dependent student, the dependent
student's parents (or single parent),
is not required to file a Federal
income tax return in the second year
preceding the academic year;
(ii) if the student or, in the case
of a dependent student, the dependent
student's parent, is a single parent,
and the adjusted gross income is
greater than zero and equal to or less
than 225 percent of the poverty line;
or
(iii) if the student or, in the case
of a dependent student, the dependent
student's parent, is not a single
parent, and the adjusted gross income
is greater than zero and equal to or
less than 175 percent of the poverty
line.
(B) A student who is not eligible for a total
maximum Federal Pell Grant under subparagraph
(A) for an academic year, shall be eligible for
a Federal Pell Grant for an academic year in
which the student is enrolled in an eligible
program full time if such student's student aid
index in such award year is less than the total
maximum Federal Pell Grant for that award year.
The amount of the Federal Pell Grant for a
student eligible under this subparagraph shall
be--
(i) the total maximum Federal Pell
Grant as calculated under paragraph
(5)(A) for that year, less
(ii) an amount equal to the amount
determined to be the student aid index
with respect to that student for that
year, except that a student aid index
of less than zero shall be considered
to be zero for the purposes of this
clause,
rounded to the nearest $5, except that a
student eligible for less than the minimum
Federal Pell Grant as defined in section
(a)(2)(F) shall not be eligible for an award.
(C) A student who is not eligible for a
Federal Pell Grant under subparagraph (A) or
(B) shall be eligible for the minimum Federal
Pell Grant for an academic year in which the
student is enrolled in an eligible program full
time--
(i) in the case of a dependent
student--
(I) if the student's parent
is a single parent, and the
adjusted gross income is equal
to or less than 325 percent of
the poverty line; or
(II) if the student's parent
is not a single parent, and the
adjusted gross income is equal
to or less than 275 percent of
the poverty line; or
(ii) in the case of an independent
student--
(I) if the student is a
single parent, and the adjusted
gross income is equal to or
less than 400 percent of the
poverty line;
(II) if the student is a
parent and is not a single
parent, and the adjusted gross
income is equal to or less than
350 percent of the poverty
line; or
(III) if the student is not a
parent, and the adjusted gross
income is equal to or less than
275 percent of the poverty
line.
(D) [A student] For each academic year
beginning before July 1, 2025, a student
eligible for the total maximum Federal Pell
Grant under subparagraph (A) who has (or whose
spouse or parent, as applicable based on whose
information is used under such subparagraph,
has) foreign income that would, if added to
adjusted gross income, result in the student no
longer being eligible for such total maximum
Federal Pell Grant, shall not be provided a
Federal Pell Grant until the student aid
administrator evaluates the student's FAFSA and
makes a determination regarding whether it is
appropriate to make an adjustment under section
479A(b)(1)(B)(v) to account for such foreign
income when determining the student's
eligibility for such total maximum Federal Pell
Grant.
(E) With respect to a student who is not
eligible for the total maximum Federal Pell
Grant under subparagraph (A) or a minimum
Federal Pell Grant under subparagraph (C), the
Secretary shall subtract from the student or
parents' adjusted gross income, as applicable
based on whose income is used for the Federal
Pell Grant calculation, the sum of the
following for the individual whose income is so
used, and consider such difference the adjusted
gross income for purposes of determining the
student's eligibility for such Federal Pell
Grant award under such subparagraph:
(i) If the applicant, or, if
applicable, the parents or spouse of
the applicant, elects to report
receiving college grant and scholarship
aid included in gross income on a
Federal tax return described in section
480(e)(2), the amount of such aid.
(ii) Income earned from work under
part C of this title.
(F) Ineligibility of students with a high
student aid index.--Notwithstanding
subparagraphs (A) through (E), a student shall
not be eligible for a Federal Pell Grant under
this subsection for an academic year in which
the student has a student aid index that equals
or exceeds twice the amount of the total
maximum Federal Pell Grant for such academic
year.
[(2)] (2)(A) Less than full-time enrollment.--In any
case where a student is enrolled in an eligible program
of an institution of higher education on less than a
full-time basis (including a student who attends an
institution of higher education on less than a half-
time basis) during any academic year, the amount of the
Federal Pell Grant to which that student is entitled
shall be reduced in direct proportion to the degree to
which that student is not so enrolled on a full-time
basis, rounded to the nearest whole percentage point,
as provided in a schedule of reductions published by
the Secretary computed in accordance with this subpart.
Such schedule of reductions shall be published in the
Federal Register in accordance with section 482. Such
reduced Federal Pell Grant for a student enrolled on a
less than full-time basis shall also apply
proportionally to students who are otherwise eligible
to receive the minimum Federal Pell Grant, if enrolled
full-time.
(B) Less than half-time enrollment.--Notwithstanding
subparagraph (A), a student who first receives a
Federal Pell Grant on or after July 1, 2025, shall not
be eligible for an award under this subsection for any
academic year beginning after such date in which the
student is enrolled in an eligible program of an
institution of higher education on less than a half-
time basis. The Secretary shall update the schedule of
reductions described in subparagraph (A) in accordance
with this subparagraph, including for students
receiving the minimum Federal Pell Grant.
(3) Award may not exceed cost of attendance.--No
Federal Pell Grant under this subpart shall exceed the
cost of attendance (as defined in section 472) at the
institution at which that student is in attendance. If,
with respect to any student, it is determined that the
amount of a Federal Pell Grant for that student exceeds
the cost of attendance for that year, the amount of the
Federal Pell Grant shall be reduced until the Federal
Pell Grant does not exceed the cost of attendance at
such institution.
(4) Study abroad.--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 maximum amount of a Federal Pell Grant for
which a student is eligible under paragraph (1) or (2)
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.
(5) Total maximum federal pell grant.--
(A) In general.--For award year 2024-2025,
and each subsequent award year, the total
maximum Federal Pell Grant award per student
shall be equal to the sum of--
(i) $1,060; and
(ii) the amount specified as the
maximum Federal Pell Grant in the last
enacted appropriation Act applicable to
that award year.
(B) Rounding.--The total maximum Federal Pell
Grant for any award year shall be rounded to
the nearest $5.
(6) Funds by fiscal year.--
(A) In general.--To carry out this section--
(i) there are authorized to be
appropriated and are appropriated (in
addition to any other amounts
appropriated to carry out this section
and out of any money in the Treasury
not otherwise appropriated) such sums
as are necessary to carry out paragraph
(5)(A)(i) for fiscal year 2024 and each
subsequent fiscal year; and
(ii) such sums as may be necessary
are authorized to be appropriated to
carry out paragraph (5)(A)(ii) for each
of the fiscal years 2024 through 2034.
(B) 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.
(7) Appropriation.--
(A) In general.--In addition to any funds
appropriated under paragraph (6) and any funds
made available for this section under any
appropriations Act, there are authorized to be
appropriated, and there are appropriated (out
of any money in the Treasury not otherwise
appropriated) to carry out this section--
(i) $1,170,000,000 for fiscal year
2024;
(ii) $3,170,000,000 for fiscal year
2025;
(iii) [$2,170,000,000] $5,351,000,000
for fiscal year 2026; [and]
(iv) [$1,236,000,000] $6,058,000,000
for fiscal year 2027 [and each
succeeding fiscal year.];
(v) $3,743,000,000 for fiscal year
2028; and
(vi) $1,236,000,000 for each
succeeding fiscal year.
(B) No effect on previous appropriations.--
The amendments made to this section by the
FAFSA Simplification Act shall not--
(i) increase or decrease the amounts
that have been appropriated or are
available to carry out this section for
fiscal year 2017, 2018, 2019, 2020,
2021, 2022, 2023, or 2024 as of the day
before the effective date of such Act;
or
(ii) extend the period of
availability for obligation that
applied to any such amount, as of the
day before such effective date.
(C) Availability of funds.--The amounts made
available by this paragraph 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) Method of distribution.--
(A) In general.--For each fiscal year through
fiscal year 2034, the Secretary shall pay to
each eligible institution such sums as may be
necessary to pay each eligible student for each
academic year during which that student is in
attendance at an institution of higher
education as an undergraduate, a Federal Pell
Grant in the amount for which that student is
eligible.
(B) Alternative disbursement.--Nothing in
this section shall be interpreted to prohibit
the Secretary from paying directly to students,
in advance of the beginning of the academic
term, an amount for which they are eligible, in
the cases where an eligible institution does
not participate in the disbursement system
under subparagraph (A).
(9) Additional payment periods in same award year.--
(A) Effective in the 2017-2018 award year and
thereafter, the Secretary shall award an
eligible student not more than one and one-half
Federal Pell Grants during a single award year
to permit such student to work toward
completion of an eligible program if, during
that single award year, the student has
received a Federal Pell Grant for an award year
and is enrolled in an eligible program for one
or more additional payment periods during the
same award year that are not otherwise fully
covered by the student's Federal Pell Grant.
(B) In the case of a student receiving more
than one Federal Pell Grant in a single award
year under subparagraph (A), the total amount
of Federal Pell Grants awarded to such student
for the award year may exceed the total maximum
Federal Pell Grant available for an award year.
(C) Any period of study covered by a Federal
Pell Grant awarded under subparagraph (A) shall
be included in determining a student's duration
limit under subsection (d)(5).
(D) In any case where an eligible student is
receiving a Federal Pell Grant for a payment
period that spans 2 award years, the Secretary
shall allow the eligible institution in which
the student is enrolled to determine the award
year to which the additional period shall be
assigned, as it determines is most beneficial
to students.
(c) Special Rule.--
(1) In general.--A student described in paragraph (2)
shall be eligible for the total maximum Federal Pell
Grant.
(2) Applicability.--Paragraph (1) shall apply to any
dependent or independent student--
(A) whose parent or guardian was--
(i) an individual who, on or after
September 11, 2001, died in the line of
duty while serving on active duty as a
member of the Armed Forces; or
(ii) actively serving as a public
safety officer and died in the line of
duty while performing as a public
safety officer; and
(B) who is less than 33 years of age.
(3) Information.--Notwithstanding any other provision
of law--
(A) the Secretary shall establish the
necessary data-sharing agreements with the
Secretary of Veterans Affairs and the Secretary
of Defense, as applicable, to provide the
information necessary to determine which
students meet the requirements of paragraph
(2)(A)(i); and
(B) the financial aid administrator shall
verify with the student that the student is
eligible for the adjustment and notify the
Secretary of the adjustment of the student's
eligibility.
(4) Treatment of pell amount.--Notwithstanding
section 1212 of the Omnibus Crime Control and Safe
Streets Act of 1968 (34 U.S.C. 10302), in the case of a
student who receives an increased Federal Pell Grant
amount under this section, the total amount of such
Federal Pell Grant, including the increase under this
subsection, shall not be considered in calculating that
student's educational assistance benefits under the
Public Safety Officers' Benefits program under subpart
2 of part L of title I of such Act.
(5) Prevention of double benefits.--No eligible
student described in paragraph (2) may concurrently
receive a grant under both this subsection and
subsection (b).
(6) Terms and conditions.--The Secretary shall award
grants under this subsection in the same manner and
with the same terms and conditions, including the
length of the period of eligibility, as the Secretary
awards Federal Pell Grants under subsection (b), except
that--
(A) the award rules and determination of need
applicable to the calculation of Federal Pell
Grants under subsection (b)(1), and the
eligibility requirement of enrollment on at
least a half-time basis under subsection
(b)(2), shall not apply to grants made under
this subsection; and
(B) the maximum period determined under
subsection (d)(5) shall be determined by
including all grants made under this section
received by the eligible student and all grants
so received under subpart 10 before the
effective date of this subsection.
(7) Definition of public safety officer.--For
purposes of this subsection, the term ``public safety
officer'' means--
(A) a public safety officer, as defined in
section 1204 of title I of the Omnibus Crime
Control and Safe Streets Act of 1968 (34 U.S.C.
10284); or
(B) a fire police officer, defined as an
individual who--
(i) is serving in accordance with
State or local law as an officially
recognized or designated member of a
legally organized public safety agency;
(ii) is not a law enforcement
officer, a firefighter, a chaplain, or
a member of a rescue squad or ambulance
crew; and
(iii) provides scene security or
directs traffic--
(I) in response to any fire
drill, fire call, or other
fire, rescue, or police
emergency; or
(II) at a planned special
event.
(d) Period of Eligibility for Grants.--
(1) In general.--The period during which a student
may receive Federal Pell Grants shall be the period
required for the completion of the first undergraduate
baccalaureate course of study being pursued by that
student at the institution at which the student is in
attendance, except that any period during which the
student is enrolled in a noncredit or remedial course
of study, as described in paragraph (2), shall not be
counted for the purpose of this paragraph.
(2) Noncredit or remedial courses; study abroad.--
Nothing in this section shall exclude from eligibility
courses of study which are noncredit or remedial in
nature (including courses in English language
instruction) which are determined by the institution to
be necessary to help the student be prepared for the
pursuit of a first undergraduate baccalaureate degree
or certificate or, in the case of courses in English
language instruction, to be necessary to enable the
student to use already existing knowledge, training, or
skills. Nothing in this section shall exclude from
eligibility programs of study abroad that are approved
for credit by the home institution at which the student
is enrolled.
(3) No concurrent payments.--No student is entitled
to receive Pell Grant payments concurrently from more
than one institution or from both the Secretary and an
institution.
(4) Postbaccalaureate program.--Notwithstanding
paragraph (1), the Secretary may allow, on a case-by-
case basis, a student to receive a Federal Pell Grant
if the student--
(A) is carrying at least one-half the normal
full-time work load for the course of study the
student is pursuing, as determined by the
institution of higher education; and
(B) is enrolled or accepted for enrollment in
a postbaccalaureate program that does not lead
to a graduate degree, and in courses required
by a State in order for the student to receive
a professional certification or licensing
credential that is required for employment as a
teacher in an elementary school or secondary
school in that State,
except that this paragraph shall not apply to a student
who is enrolled in an institution of higher education
that offers a baccalaureate degree in education.
(5) Maximum period.--
(A) In general.--Except as provided in
subparagraph (B), the period during which a
student may receive Federal Pell Grants shall
not exceed 12 semesters, or the equivalent of
12 semesters, as determined by the Secretary by
regulation. Such regulations shall provide,
with respect to a student who received a
Federal Pell Grant for a term but was enrolled
at a fraction of full time (and at least half
time, in the case of a student who first
receives a Federal Pell Grant under subsection
(b) on or after July 1, 2025), that only that
same fraction of such semester or equivalent
shall count towards such duration limits.
(B) Exception.--
(i) In general.--Any Federal Pell
Grant that a student received during a
period described in subclause (I) or
(II) of clause (ii) shall not count
towards the student's duration limits
under this paragraph.
(ii) Applicable periods.--Clause (i)
shall apply with respect to any Federal
Pell Grant awarded to a student to
enroll in an eligible program at an
institution--
(I) during a period of a
student's attendance at an
institution--
(aa) at which the
student was unable to
complete a course of
study due to the
closing of the
institution; or
(bb) for which the
student was falsely
certified as eligible
for Federal aid under
this title; or
(II) during a period--
(aa) for which the
student received a loan
under this title; and
(bb) for which the
loan described in item
(aa) is discharged
under--
(AA) section
437(c)(1) or
section
464(g)(1);
(BB) section
432(a)(6); or
(CC) section
455(h) due to
the student's
successful
assertion of a
defense to
repayment of
the loan,
including
defenses
provided to any
applicable
groups of
students.
(e) Applications for Grants.--
(1) Deadlines.--The Secretary shall from time to time
set dates by which students shall file the Free
Application for Federal Student Aid under section 483.
(2) Application.--Each student desiring a Federal
Pell Grant for any year shall file the Free Application
for Federal Student Aid containing the information
necessary to enable the Secretary to carry out the
functions and responsibilities of this subpart.
(f) Distribution of Grants to Students.--Payments under this
section shall be made in accordance with regulations
promulgated by the Secretary for such purpose, in such manner
as will best accomplish the purpose of this section. Any
disbursement allowed to be made by crediting the student's
account shall be limited to tuition and fees, and food and
housing if that food and housing is institutionally owned or
operated. The student may elect to have the institution provide
other such goods and services by crediting the student's
account.
(g) Insufficient Appropriations.--If, for any fiscal year,
the funds appropriated for payments under this subpart are
insufficient to satisfy fully all entitlements, as calculated
under subsections (b) and (c) (but at the maximum grant level
specified in such appropriation), the Secretary shall promptly
transmit a notice of such insufficiency to each House of the
Congress, and identify in such notice the additional amount
that would be required to be appropriated to satisfy fully all
entitlements (as so calculated at such maximum grant level).
(h) Use of Excess Funds.--
(1) 15 percent or less.--If, at the end of a fiscal
year, the funds available for making payments under
this subpart exceed the amount necessary to make the
payments required under this subpart to eligible
students by 15 percent or less, then all of the excess
funds shall remain available for making payments under
this subpart during the next succeeding fiscal year.
(2) More than 15 percent.--If, at the end of a fiscal
year, the funds available for making payments under
this subpart exceed the amount necessary to make the
payments required under this subpart to eligible
students by more than 15 percent, then all of such
funds shall remain available for making such payments
but payments may be made under this paragraph only with
respect to entitlements for that fiscal year.
(i) Treatment of Institutions and Students Under Other
Laws.--Any institution of higher education which enters into an
agreement with the Secretary to disburse to students attending
that institution the amounts those students are eligible to
receive under this subpart shall not be deemed, by virtue of
such agreement, a contractor maintaining a system of records to
accomplish a function of the Secretary. Recipients of Pell
Grants shall not be considered to be individual grantees for
purposes of chapter 81 of title 41, United States Code.
(j) Institutional Ineligibility Based on Default Rates.--
(1) In general.--No institution of higher education
shall be an eligible institution for purposes of this
subpart if such institution of higher education is
ineligible to participate in a loan program under part
B or D as a result of a final default rate
determination made by the Secretary under part B or D
after the final publication of cohort default rates for
fiscal year 1996 or a succeeding fiscal year.
(2) Sanctions subject to appeal opportunity.--No
institution may be subject to the terms of this
subsection unless the institution has had the
opportunity to appeal the institution's default rate
determination under regulations issued by the Secretary
for the loan program authorized under part B or D, as
applicable. This subsection shall not apply to an
institution that was not participating in the loan
program authorized under part B or D on October 7,
1998, unless the institution subsequently participates
in the loan programs.
(k) Workforce Pell Grant Program.--
(1) In general.--For the award year beginning on July
1, 2026, and each subsequent award year, the Secretary
shall award grants (to be known as ``Workforce Pell
Grants'') to eligible students under paragraph (2) in
accordance with this subsection.
(2) Eligible students.--To be eligible to receive a
Workforce Pell Grant under this subsection for any
period of enrollment, a student shall meet the
eligibility requirements for a Federal Pell Grant under
this section, except that the student--
(A) shall be enrolled, or accepted for
enrollment, in an eligible program under
section 481(b)(3) (hereinafter referred to as
an ``eligible workforce program''); and
(B) may not--
(i) be enrolled, or accepted for
enrollment, in a program of study that
leads to a graduate credential; or
(ii) have attained such a credential.
(3) Terms and conditions of awards.--The Secretary
shall award Workforce Pell Grants under this subsection
in the same manner and with the same terms and
conditions as the Secretary awards Federal Pell Grants
under this section, except that--
(A) each use of the term ``eligible program''
(except in subsections (b)(9)(A) and (d)(2))
shall be substituted by ``eligible workforce
program under section 481(b)(3)''; and
(B) a student who is eligible for a grant
equal to less than the amount of the minimum
Federal Pell Grant because the eligible
workforce program in which the student is
enrolled or accepted for enrollment is less
than an academic year (in hours of instruction
or weeks of duration) may still be eligible for
a Workforce Pell Grant in an amount that is
prorated based on the length of the program.
(4) Prevention of double benefits.--No eligible
student described in paragraph (2) may concurrently
receive a grant under both this subsection and--
(A) subsection (b); or
(B) subsection (c).
(5) Duration limit.--Any period of study covered by a
Workforce Pell Grant awarded under this subsection
shall be included in determining a student's duration
limit under subsection (d)(5).
* * * * * * *
Subpart 11--Promoting Real Opportunities to Maximize Investments and
Savings in Education
SEC. 420S. PROMISE GRANTS.
For award year 2028-2029 and each succeeding award year, from
reserved funds remitted to the Secretary in accordance with
section 454(d) and additional funds made available under
section 420V, as necessary, the Secretary shall award PROMISE
grants to eligible institutions to carry out the activities
described in section 420U(c). PROMISE grants awarded under this
subpart shall be awarded on a noncompetitive basis to each
eligible institution that submits a satisfactory application
under section 420T for a 6-year period in an amount that is
determined in accordance with section 420U.
SEC. 420T. ELIGIBLE INSTITUTIONS; APPLICATION.
(a) Eligible Institution.--To be eligible for a PROMISE grant
under this subpart, an institution shall--
(1) be an institution of higher education under
section 102, except that an institution described in
section 102(a)(1)(C) shall not be an eligible
institution under this subpart; and
(2) meet the maximum total price guarantee
requirements under subsection (c).
(b) Application.--An eligible institution seeking a PROMISE
grant under this subpart (including a renewal of such a grant)
shall submit to the Secretary an application, at such time as
the Secretary may require, containing the information required
under this subsection. Such application shall--
(1) demonstrate that the institution--
(A) meets the maximum total price guarantee
requirements under subsection (c); and
(B) will continue to meet the maximum total
price guarantee requirements for each award
year during the grant period with respect to
students first enrolling at the institution for
each such award year;
(2) describe how grant funds awarded under this
subpart will be used by the institution to carry out
activities related to--
(A) increasing postsecondary affordability,
including--
(i) the expansion and continuation of
the maximum total price guarantee
requirements under subsection (c); and
(ii) any other activities to be
carried out by the institution to
increase postsecondary affordability
and minimize the maximum total price
for completion paid by students
receiving need-based student aid;
(B) increasing postsecondary access, which
may include--
(i) the activities described in
section 485E of this Act; and
(ii) any other activities to be
carried out by the institution to
increase postsecondary access and
expand opportunities for low- and
middle-income students; and
(C) increasing postsecondary student success,
which may include--
(i) activities to improve completion
rates and reduce time to credential;
(ii) activities to align programs of
study with the needs of employers,
including with respect to in-demand
industry sectors or occupations (as
defined in section 3 of the Workforce
Innovation and Opportunity Act (29
U.S.C. 3102)); and
(iii) any other activities to be
carried out by the institution to
increase value-added earnings and
postsecondary student success;
(3) describe--
(A) how the institution will evaluate the
effectiveness of the institution's use of grant
funds awarded under this subpart; and
(B) how the institution will collect and
disseminate information on promising practices
developed with the use of such grant funds; and
(4) in the case of an institution that has previously
received a grant under this subpart, contain the
evaluation required under paragraph (3) for each
previous grant.
(c) Maximum Total Price Guarantee Requirements.--As a
condition of eligibility for a PROMISE grant under this
subpart, an institution shall--
(1) for each award year beginning after the date of
enactment of this subpart, not later than 1 year before
the start of each such award year (except that, for the
first award year beginning after such date of
enactment, the institution shall meet these
requirements as soon as practicable after such date of
enactment), determine the maximum total price for
completion, in accordance with subsection (e), for each
program of study at the institution applicable to
students in each income category and student aid index
category (as determined by the Secretary) and publish
such information on the institution's website and in
the institution's catalog, marketing materials, or
other official publications;
(2) for the award year for which the institution is
applying for a PROMISE grant, and at least 1 award year
preceding such award year, provide to each student who
first enrolls, or plans to enroll, in the institution
during the award year and who receives Federal
financial aid under this title a maximum total price
guarantee, in accordance with this section, for the
minimum guarantee period applicable to the student; and
(3) provide to the Secretary an assurance that the
institution will continue to meet each of the maximum
total price guarantee requirements under this
subsection for students who first enroll, or plan to
enroll, in the institution during each award year
included in the grant period.
(d) Duration of Minimum Guarantee Period.--
(1) In general.--The minimum period during which a
student shall be provided a guarantee under subsection
(c) with respect to the maximum total price for
completion of a program of study at an institution
shall be the average, for the 3 most recent award years
for which data are available, of the median time to
credential of students who completed any undergraduate
program of study at the institution during each such
award year, except that such minimum guarantee period
shall not be less than the program length of the
program of study in which the student is enrolled.
(2) Limitation.--An institution shall not be required
to provide a maximum total price guarantee under
subsection (c) to a student after the conclusion of the
6-year period beginning on the first day on which the
student enrolled at such institution.
(e) Determination of Maximum Total Price for Completion.--
(1) In general.--For the purposes of subsection (c),
an institution shall determine, prior to the first
award year in which a student enrolls at the
institution, the maximum total price that may be
charged to the student for completion of a program of
study at the institution for the minimum guarantee
period applicable to a student, before application of
any Federal Pell Grants or other Federal financial aid
under this title. Such a maximum total price for
completion shall be determined for students in each
income category and student aid index category (as
determined by the Secretary). In determining the
maximum total price for completion to be charged to
each such category of students, the institution may
consider the ability of a category of students to pay
tuition and fees, but may not include in such
consideration any Federal Pell Grants or other Federal
financial aid awards that may be available to such
category of students under this title.
(2) Multiple maximum total price guarantees.--In the
event that a student receives more than 1 maximum total
price guarantee because the student is included in more
than 1 category of students for which the institution
determines a maximum total price guarantee amount for
the purposes of subsection (c), the maximum total price
guarantee applicable to such student for the purposes
of this section shall be equal to the lowest such
guarantee amount.
SEC. 420U. GRANT AMOUNTS; FLEXIBLE USE OF FUNDS.
(a) Grant Amount Formula.--
(1) Formula.--Subject to subsection (b) and section
420V(b), the amount of a PROMISE grant for an eligible
institution for each year of the grant period shall be
calculated by the Secretary annually and shall be equal
to the amount determined by multiplying--
(A) the lesser of--
(i) the difference determined by
subtracting one from the quotient of--
(I) the average, for the 3
most recent award years for
which data are available, of
the median value-added earnings
for each such award year of
students who completed any
program of study of the
institution; divided by
(II) the average, for the 3
most recent award years for
which data are available, of
the maximum total price for
completion determined under
section 420T(e) applicable for
each such award year to
students enrolled in the
institution in any program of
study who received financial
aid under this title; or
(ii) the number two;
(B) the average, for the 3 most recent award
years for which data are available, of the
total dollar amount of Federal Pell Grants
awarded to students enrolled in the institution
in each such award year; and
(C) the average, for the 3 most recent award
years for which data are available, of the
percentage of low-income students who received
Federal financial assistance under this title
who were enrolled in the institution in each
such award year who--
(i) completed a program of study at
the institution within 100 percent of
the program length of such program; or
(ii) only in the case of a two-year
institution or a less than two-year
institution--
(I) transfer to a four-year
institution; and
(II) within 4 years after
first enrolling at the two-year
or less than two-year
institution, complete a program
of study at the four-year
institution for which a
bachelor's degree (or
substantially similar
credential) is awarded.
(2) Definition of low-income.--In this section, the
term ``low-income'', when used with respect to a
student, means that the student's family income does
not exceed the maximum income in the lowest income
category (as determined by the Secretary).
(b) Maximum Grant Amount.--Notwithstanding subsection (a),
the maximum amount an eligible institution may receive annually
for a grant under this subpart shall be the amount equal to--
(1) the average, for the 3 most recent award years,
of the number of students enrolled in the institution
in an award year who receive Federal financial aid
under this title; multiplied by
(2) $5,000.
(c) Flexible Use of Funds.--A PROMISE grant awarded under
this subpart shall be used by an eligible institution to--
(1) carry out activities included in the
institution's application for such grant related to
postsecondary affordability, access, and student
success;
(2) evaluate the effectiveness of the activities
carried out with such grant in accordance with section
420T(b)(3)(A); and
(3) collect and disseminate promising practices
related to the activities carried out with such grant,
in accordance with section 420T(b)(3)(B).
SEC. 420V. AVAILABILITY OF FUNDS.
(a) Used of Reserved Funds.--
(1) Primary funds.--To carry out this subpart, there
shall be available to the Secretary any funds remitted
to the Secretary as reimbursements in accordance with
section 454(d) for any award year.
(2) Secondary funds.--Beginning award year 2028-2029,
if the amounts made available to the Secretary under
paragraph (1) to carry out this subpart in any award
year are insufficient to fully fund the PROMISE grants
awarded under this subpart in such award year, there
shall be available to the Secretary, in addition to
such amounts, any funds returned to the Secretary under
section 484B in the previous award year.
(b) Reduction of Grant Amount in Case of Insufficient
Funds.--
(1) In general.--If the amounts made available to the
Secretary under subsection (a) to carry out this
subpart for an award year are not sufficient to provide
grants to each eligible institution in the amount
determined under section 420U for such award year, the
Secretary shall reduce each such grant amount by the
applicable percentage described in paragraph (2).
(2) Applicable percentage.--The applicable percentage
described in this paragraph is the percentage
determined by dividing--
(A) the amounts made available under
subsection (a) for the award year described in
paragraph (1); by
(B) the total amount that would be necessary
to provide grants to all eligible institutions
in the amounts determined under section 420U
for such award year.
SEC. 420W. DEFINITIONS.
In this title:
(1) Value-added earnings.--
(A) In general.--With respect to a student
who received Federal financial aid under this
title and who completed a program of study
offered by an institution of higher education,
the term ``value-added earnings'' means--
(i) the annual earnings of such
student measured during the applicable
earnings measurement period for such
program (as determined under
subparagraph (C)); minus
(ii) in the case of a student who
completed a program of study that
awards--
(I) an undergraduate
credential, 150 percent of the
poverty line applicable to a
single individual as determined
under section 673(2) of the
Community Services Block Grant
Act (42 U.S.C. 9902(2)) for
such year; or
(II) a graduate credential,
300 percent of the poverty line
applicable to a single
individual as determined under
section 673(2) of the Community
Services Block Grant Act (42
U.S.C. 9902(2)) for such year.
(B) Geographic adjustment.--
(i) In general.--Except as provided
in clause (ii), the Secretary shall use
the geographic location of the
institution at which a student
completed a program of study to adjust
the value-added earnings of the student
calculated under subparagraph (A) by
dividing--
(I) the difference between
clauses (i) and (ii) of such
subparagraph; by
(II) the most recent regional
price parity index of the
Bureau of Economics Analysis
for the State or, as
applicable, metropolitan area
in which such institution is
located.
(ii) Exception.--The value-added
earnings of a student calculated under
subparagraph (A) shall not be adjusted
based on geographic location in
accordance with clause (i) if such
student attended principally through
distance education.
(C) Earnings measurement period.--
(i) In general.--For the purpose of
calculating the value-added earnings of
a student, except as provided in clause
(ii), the annual earnings of a student
shall be measured--
(I) in the case of a program
of study that awards an
undergraduate certificate, post
baccalaureate certificate, or
graduate certificate, 1 year
after the student completes
such program;
(II) in the case of a program
of study that awards an
associate's degree or master's
degree, 2 years after the
student completes such program;
and
(III) in the case of a
program of study that awards a
bachelor's degree, doctoral
degree, or professional degree,
4 years after the student
completes such program.
(ii) Exception.--The Secretary may,
as the Secretary determines appropriate
based on the characteristics of a
program of study, extend an earnings
measurement period described in clause
(i) for a program of study that--
(I) requires completion of an
additional educational program
after completion of the program
of study in order to obtain a
licensure associated with the
credential awarded for such
program of study; and
(II) when combined with the
program length of such
additional educational program
for licensure, has a total
program length that exceeds the
relevant earnings measurement
period prescribed for such
program of study under clause
(i),
except that in no case shall the annual
earnings of a student be measured more
than 1 year after the student completes
such additional educational program.
(2) Program length.--The term ``program length''
means the minimum amount of time in weeks, months, or
years that is specified in the catalog, marketing
materials, or other official publications of an
institution of higher education for a full-time student
to complete the requirements for a specific program of
study.
Part B--Federal Family Education Loan Program
* * * * * * *
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) which is insured by the Secretary under
this part; or
(B) which is insured under a program of a
State or of a nonprofit private institution or
organization which was contracted for, and paid
to the student, within the period specified in
paragraph (5), and which--
(i) in the case of a loan insured
prior to July 1, 1967, was made by an
eligible lender and is insured under a
program which meets the requirements of
subparagraph (E) of subsection (b)(1)
and provides that repayment of such
loan shall be in installments beginning
not earlier than 60 days after the
student ceases to pursue a course of
study (as described in subparagraph (D)
of subsection (b)(1)) at an eligible
institution, or
(ii) in the case of a loan insured
after June 30, 1967, was made by an
eligible lender and is insured under a
program covered by an agreement made
pursuant to subsection (b),
shall be entitled to have paid on his or her behalf and
for his or her account to the holder of the loan a
portion of the interest on such loan under
circumstances described in paragraph (2).
(2) Additional requirements to receive subsidy.--(A)
Each student qualifying for a portion of an interest
payment under paragraph (1) shall--
(i) have provided to the lender a statement
from the eligible institution, at which the
student has been accepted for enrollment, or at
which the student is in attendance, which--
(I) sets forth the loan amount for
which the student shows financial need;
and
(II) sets forth a schedule for
disbursement of the proceeds of the
loan in installments, consistent with
the requirements of section 428G;
(ii) meet the requirements of subparagraph
(B); and
(iii) have provided to the lender at
the time of application for a loan
made, insured, or guaranteed under this
part, the student's driver's number, if
any.
(B) For the purpose of clause (ii) of subparagraph
(A), a student shall qualify for a portion of an
interest payment under paragraph (1) if the eligible
institution has determined and documented the student's
amount of need for a loan based on the student's
estimated cost of attendance, estimated financial
assistance, and, for the purpose of an interest payment
pursuant to this section, student aid index(as
determined under part F), subject to the provisions of
subparagraph (D).
(C) For the purpose of this paragraph--
(i) a student's cost of attendance shall be
determined under section 472;
(ii) a student's estimated financial
assistance means, for the period for which the
loan is sought--
(I) the amount of assistance such
student will receive under subpart 1 of
part A (as determined in accordance
with section 484(b)), subpart 3 of part
A, and parts C and E; plus
(II) other scholarship, grant, or
loan assistance, but excluding--
(aa) any national service
education award or post-service
benefit under title I of the
National and Community Service
Act of 1990; and
(bb) any veterans' education
benefits as defined in section
480(c); and
(iii) the determination of need and of the
amount of a loan by an eligible institution
under subparagraph (B) with respect to a
student shall be calculated in accordance with
part F.
(D) An eligible institution may not, in carrying out
the provisions of subparagraphs (A) and (B) of this
paragraph, provide a statement which certifies the
eligibility of any student to receive any loan under
this part in excess of the maximum amount applicable to
such loan.
(E) For the purpose of subparagraphs (B) and (C) of
this paragraph, any loan obtained by a student under
section 428A or 428H or a parent under section 428B of
this Act or under any State-sponsored or private loan
program for an academic year for which the
determination is made may be used to offset the student
aid index of the student for that year.
(3) Amount of interest subsidy.--(A)(i) Subject to
section 438(c), the portion of the interest on a loan
which a student is entitled to have paid, on behalf of
and for the account of the student, to the holder of
the loan pursuant to paragraph (1) of this subsection
shall be equal to the total amount of the interest on
the unpaid principal amount of the loan--
(I) which accrues prior to
the date the student ceases to
carry at least one-half the
normal full-time academic
workload (as determined by the
institution), or
(II) which accrues during a period in which
principal need not be paid (whether or not such
principal is in fact paid) by reason of a
provision described in subsection (b)(1)(M) of
this section or in section 427(a)(2)(C).
(ii) Such portion of the interest on a loan shall not
exceed, for any period, the amount of the interest on
that loan which is payable by the student after taking
into consideration the amount of any interest on that
loan which the student is entitled to have paid on his
or her behalf for that period under any State or
private loan insurance program.
(iii) The holder of a loan with respect to which
payments are required to be made under this section
shall be deemed to have a contractual right, as against
the United States, to receive from the Secretary the
portion of interest which has been so determined
without administrative delay after the receipt by the
Secretary of an accurate and complete request for
payment pursuant to paragraph (4).
(iv) The Secretary shall pay this portion of the
interest to the holder of the loan on behalf of and for
the account of the borrower at such times as may be
specified in regulations in force when the applicable
agreement entered into pursuant to subsection (b) was
made, or, if the loan was made by a State or is insured
under a program which is not covered by such an
agreement, at such times as may be specified in
regulations in force at the time the loan was paid to
the student.
(v) A lender may not receive interest on a loan for
any period that precedes the date that is--
(I) in the case of a loan disbursed by check,
10 days before the first disbursement of the
loan;
(II) in the case of a loan disbursed by
electronic funds transfer, 3 days before the
first disbursement of the loan; or
(III) in the case of a loan disbursed through
an escrow agent, 3 days before the first
disbursement of the loan.
(B) If--
(i) a State student loan insurance program is
covered by an agreement under subsection (b),
(ii) a statute of such State limits the
interest rate on loans insured by such program
to a rate which is less than the applicable
interest rate under this part, and
(iii) the Secretary determines that
subsection (d) does not make such statutory
limitation inapplicable and that such statutory
limitation threatens to impede the carrying out
of the purpose of this part,
then the Secretary may pay an administrative cost
allowance to the holder of each loan which is insured
under such program and which is made during the period
beginning on the 60th day after the date of enactment
of the Higher Education Amendments of 1968 and ending
120 days after the adjournment of such State's first
regular legislative session which adjourns after
January 1, 1969. Such administrative cost allowance
shall be paid over the term of the loan in an amount
per year (determined by the Secretary) which shall not
exceed 1 percent of the unpaid principal balance of the
loan.
(4) Submission of statements by holders on amount of
payment.--Each holder of a loan with respect to which
payments of interest are required to be made by the
Secretary shall submit to the Secretary, at such time
or times and in such manner as the Secretary may
prescribe, statements containing such information as
may be required by or pursuant to regulation for the
purpose of enabling the Secretary to determine the
amount of the payment which he must make with respect
to that loan.
(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
June 30, 2010.
(6) Assessment of borrower's financial condition not
prohibited or required.--Nothing in this or any other
Act shall be construed to prohibit or require, unless
otherwise specifically provided by law, a lender to
evaluate the total financial situation of a student
making application for a loan under this part, or to
counsel a student with respect to any such loan, or to
make a decision based on such evaluation and counseling
with respect to the dollar amount of any such loan.
(7) Loans that have not been consummated.--Lenders
may not charge interest or receive interest subsidies
or special allowance payments for loans for which the
disbursement checks have not been cashed or for which
electronic funds transfers have not been completed.
(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) authorizes the insurance in any academic
year, as defined in section 481(a)(2), or its
equivalent (as determined under regulations of
the Secretary) for any student who is carrying
at an eligible institution or in a program of
study abroad approved for credit by the
eligible home institution at which such student
is enrolled at least one-half the normal full-
time academic workload (as determined by the
institution) in any amount up to a maximum of--
(i) in the case of a student at an
eligible institution who has not
successfully completed the first year
of a program of undergraduate
education--
(I) $3,500, if such student
is enrolled in a program whose
length is at least one academic
year in length; and
(II) if such student is
enrolled in a program of
undergraduate education which
is less than 1 academic year,
the maximum annual loan amount
that such student may receive
may not exceed the amount that
bears the same ratio to the
amount specified in subclause
(I) as the length of such
program measured in semester,
trimester, quarter, or clock
hours bears to 1 academic year;
(ii) in the case of a student at an
eligible institution who has
successfully completed such first year
but has not successfully completed the
remainder of a program of undergraduate
education--
(I) $4,500; or
(II) if such student is
enrolled in a program of
undergraduate education, the
remainder of which is less than
one academic year, the maximum
annual loan amount that such
student may receive may not
exceed the amount that bears
the same ratio to the amount
specified in subclause (I) as
such remainder measured in
semester, trimester, quarter,
or clock hours bears to one
academic year;
(iii) in the case of a student at an
eligible institution who has
successfully completed the first and
second years of a program of
undergraduate education but has not
successfully completed the remainder of
such program--
(I) $5,500; or
(II) if such student is
enrolled in a program of
undergraduate education, the
remainder of which is less than
one academic year, the maximum
annual loan amount that such
student may receive may not
exceed the amount that bears
the same ratio to the amount
specified in subclause (I) as
such remainder measured in
semester, trimester, quarter,
or clock hours bears to one
academic year;
(iv) in the case of a student who has
received an associate or baccalaureate
degree and is enrolled in an eligible
program for which the institution
requires such degree for admission, the
number of years that a student has
completed in a program of undergraduate
education shall, for the purposes of
clauses (ii) and (iii), include any
prior enrollment in the eligible
program of undergraduate education for
which the student was awarded such
degree;
(v) in the case of a graduate or
professional student (as defined in
regulations of the Secretary) at an
eligible institution, $8,500; and
(vi) in the case of a student
enrolled in coursework specified in
sections 484(b)(3)(B) and
484(b)(4)(B)--
(I) $2,625 for coursework
necessary for enrollment in an
undergraduate degree or
certificate program, and, in
the case of a student who has
obtained a baccalaureate
degree, $5,500 for coursework
necessary for enrollment in a
graduate or professional degree
or certification program; and
(II) in the case of a student
who has obtained a
baccalaureate degree, $5,500
for coursework necessary for a
professional credential or
certification from a State
required for employment as a
teacher in an elementary school
or secondary school;
except in cases where the Secretary determines,
pursuant to regulations, that a higher amount
is warranted in order to carry out the purpose
of this part with respect to students engaged
in specialized training requiring exceptionally
high costs of education, but the annual
insurable limit per student shall not be deemed
to be exceeded by a line of credit under which
actual payments by the lender to the borrower
will not be made in any years in excess of the
annual limit;
(B) provides that the aggregate insured
unpaid principal amount for all such insured
loans made to any student shall be any amount
up to a maximum of--
(i) $23,000, in the case of any
student who has not successfully
completed a program of undergraduate
education, excluding loans made under
section 428A or 428B; and
(ii) $65,500, in the case of any
graduate or professional student (as
defined by regulations of the
Secretary), and (I) including any loans
which are insured by the Secretary
under this section, or by a guaranty
agency, made to such student before the
student became a graduate or
professional student, but (II)
excluding loans made under section 428A
or 428B,
except that the Secretary may increase the
limit applicable to students who are pursuing
programs which the Secretary determines are
exceptionally expensive;
(C) authorizes the insurance of loans to any
individual student for at least 6 academic
years of study or their equivalent (as
determined under regulations of the Secretary);
(D) provides that (i) the student borrower
shall be entitled to accelerate without penalty
the whole or any part of an insured loan, (ii)
the student borrower may annually change the
selection of a repayment plan under this part,
and (iii) the note, or other written evidence
of any loan, may contain such reasonable
provisions relating to repayment in the event
of default by the borrower as may be authorized
by regulations of the Secretary in effect at
the time such note or written evidence was
executed, and shall contain a notice that
repayment may, following a default by the
borrower, [be subject to income contingent
repayment in accordance with subsection (m)] be
subject to income-based repayment in accordance
with subsection (m);
(E) subject to subparagraphs (D) and (L), and
except as provided by subparagraph (M),
provides that--
(i) not more than 6 months prior to
the date on which the borrower's first
payment is due, the lender shall offer
the borrower of a loan made, insured,
or guaranteed under this section or
section 428H, the option of repaying
the loan in accordance with a standard,
graduated, income-sensitive, or
extended repayment schedule (as
described in paragraph (9)) established
by the lender in accordance with
regulations of the Secretary; and
(ii) repayment of loans shall be in
installments in accordance with the
repayment plan selected under paragraph
(9) and commencing at the beginning of
the repayment period determined under
paragraph (7);
(F) authorizes interest on the unpaid balance
of the loan at a yearly rate not in excess
(exclusive of any premium for insurance which
may be passed on to the borrower) of the rate
required by section 427A;
(G) insures 98 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);
(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
(iii) 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);
(H) provides--
(i) for loans for which the date of
guarantee of principal is before July
1, 2006, for the collection of a single
insurance premium equal to not more
than 1.0 percent of the principal
amount of the loan, by deduction
proportionately from each installment
payment of the proceeds of the loan to
the borrower, and ensures that the
proceeds of the premium will not be
used for incentive payments to lenders;
or
(ii) for loans for which the 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;
(I) provides that the benefits of the loan
insurance program will not be denied any
student who is eligible for interest benefits
under subsection (a) (1) and (2);
(J) provides that a student may obtain
insurance under the program for a loan for any
year of study at an eligible institution;
(K) in the case of a State program, provides
that such State program is administered by a
single State agency, or by one or more
nonprofit private institutions or organizations
under supervision of a single State agency;
(L) provides that the total of the payments
by a borrower--
(i) except as otherwise provided by a
repayment plan selected by the borrower
under clause (ii), (iii), or (v) of
paragraph (9)(A), during any year of
any repayment period with respect to
the aggregate amount of all loans to
that borrower which are insured under
this part shall not, unless the
borrower and the lender otherwise
agree, be less than $600 or the balance
of all such loans (together with
interest thereon), whichever amount is
less (but in no instance less than the
amount of interest due and payable,
notwithstanding any payment plan under
paragraph (9)(A)); and
(ii) for a monthly or other similar
payment period with respect to the
aggregate of all loans held by the
lender may, when the amount of a
monthly or other similar payment is not
a multiple of $5, be rounded to the
next highest whole dollar amount that
is a multiple of $5;
(M) provides that periodic installments of
principal need not be paid, but interest shall
accrue and be paid by the Secretary, during any
period--
(i) during which the borrower--
(I) is pursuing at least a
half-time course of study as
determined by an eligible
institution, except that no
borrower, notwithstanding the
provisions of the promissory
note, shall be required to
borrow an additional loan under
this title in order to be
eligible to receive a deferment
under this clause; or
(II) is pursuing a course of
study pursuant to a graduate
fellowship program approved by
the Secretary, or pursuant to a
rehabilitation training program
for disabled individuals
approved by the Secretary,
except that no borrower shall be
eligible for a deferment under this
clause, or loan made under this part
(other than a loan made under section
428B or 428C), while serving in a
medical internship or residency
program;
(ii) not in excess of 3 years during
which the borrower is seeking and
unable to find full-time employment,
except that no borrower who provides
evidence of eligibility for
unemployment benefits shall be required
to provide additional paperwork for a
deferment under this clause;
(iii) during which the borrower--
(I) is serving on active duty
during a war or other military
operation or national
emergency; or
(II) is performing qualifying
National Guard duty during a
war or other military operation
or national emergency,
and for the 180-day period following
the demobilization date for the service
described in subclause (I) or (II);
(iv) not in excess of 3 years for any
reason which the lender determines, in
accordance with regulations prescribed
by the Secretary under section 435(o),
has caused or will cause the borrower
to have an economic hardship; or
(v) during which the borrower is
receiving treatment for cancer and the
6 months after such period;
(N) provides that funds borrowed by a
student--
(i) are disbursed to the institution
by check or other means that is payable
to, and requires the endorsement or
other certification by, such student;
(ii) in the case of a student who is
studying outside the United States in a
program of study abroad that is
approved for credit by the home
institution at which such student is
enrolled, and only after verification
of the student's enrollment by the
lender or guaranty agency, are, at the
request of the student, disbursed
directly to the student by the means
described in clause (i), unless such
student requests that the check be
endorsed, or the funds transfer be
authorized, pursuant to an authorized
power-of-attorney; or
(iii) in the case of a student who is
studying outside the United States in a
program of study at an eligible foreign
institution, are, at the request of the
foreign institution, disbursed directly
to the student, only after verification
of the student's enrollment by the
lender or guaranty agency by the means
described in clause (i).
(O) provides that the proceeds of the loans
will be disbursed in accordance with the
requirements of section 428G;
(P) requires the borrower to notify the
institution concerning any change in local
address during enrollment and requires the
borrower and the institution at which the
borrower is in attendance promptly to notify
the holder of the loan, directly or through the
guaranty agency, concerning (i) any change of
permanent address, (ii) when the student ceases
to be enrolled on at least a half-time basis,
and (iii) any other change in status, when such
change in status affects the student's
eligibility for the loan;
(Q) provides for the guarantee of loans made
to students and parents under sections 428A and
428B;
(R) with respect to lenders which are
eligible institutions, provides for the
insurance of loans by only such institutions as
are located within the geographic area served
by such guaranty agency;
(S) provides no restrictions with respect to
the insurance of loans for students who are
otherwise eligible for loans under such program
if such a student is accepted for enrollment in
or is attending an eligible institution within
the State, or if such a student is a legal
resident of the State and is accepted for
enrollment in or is attending an eligible
institution outside that State;
(T) authorizes (i) the limitation of the
total number of loans or volume of loans, made
under this part to students attending a
particular eligible institution during any
academic year; and (ii) the emergency action,
limitation, suspension, or termination of the
eligibility of an eligible institution if--
(I) such institution is ineligible
for the emergency action, limitation,
suspension, or termination of eligible
institutions under regulations issued
by the Secretary or is ineligible
pursuant to criteria, rules, or
regulations issued under the student
loan insurance program which are
substantially the same as regulations
with respect to emergency action,
limitation, suspension, or termination
of such eligibility issued by the
Secretary;
(II) there is a State constitutional
prohibition affecting the eligibility
of such an institution;
(III) such institution fails to make
timely refunds to students as required
by regulations issued by the Secretary
or has not satisfied within 30 days of
issuance a final judgment obtained by a
student seeking such a refund;
(IV) such institution or an owner,
director, or officer of such
institution is found guilty in any
criminal, civil, or administrative
proceeding, or such institution or an
owner, director, or officer of such
institution is found liable in any
civil or administrative proceeding,
regarding the obtaining, maintenance,
or disbursement of State or Federal
grant, loan, or work assistance funds;
or
(V) such institution or an owner,
director, or officer of such
institution has unpaid financial
liabilities involving the improper
acquisition, expenditure, or refund of
State or Federal financial assistance
funds;
except that, if a guaranty agency limits,
suspends, or terminates the participation of an
eligible institution, the Secretary shall apply
that limitation, suspension, or termination to
all locations of such institution, unless the
Secretary finds, within 30 days of notification
of the action by the guaranty agency, that the
guaranty agency's action did not comply with
the requirements of this section;
(U) provides (i) for the eligibility of all
lenders described in section 435(d)(1) under
reasonable criteria, unless (I) that lender is
eliminated as a lender under regulations for
the emergency action, limitation, suspension,
or termination of a lender under the Federal
student loan insurance program or is eliminated
as a lender pursuant to criteria issued under
the student loan insurance program which are
substantially the same as regulations with
respect to such eligibility as a lender issued
under the Federal student loan insurance
program, or (II) there is a State
constitutional prohibition affecting the
eligibility of a lender, (ii) assurances that
the guaranty agency will report to the
Secretary concerning changes in such criteria,
including any procedures in effect under such
program to take emergency action, limit,
suspend, or terminate lenders, and (iii) for
(I) a compliance audit of each lender that
originates or holds more than $5,000,000 in
loans made under this title for any lender
fiscal year (except that each lender described
in section 435(d)(1)(A)(ii)(III) shall annually
submit the results of an audit required by this
clause), at least once a year and covering the
period since the most recent audit, conducted
by a qualified, independent organization or
person in accordance with standards established
by the Comptroller General for the audit of
governmental organizations, programs, and
functions, and as prescribed in regulations of
the Secretary, the results of which shall be
submitted to the Secretary, or (II) with regard
to a lender that is audited under chapter 75 of
title 31, United States Code, such audit shall
be deemed to satisfy the requirements of
subclause (I) for the period covered by such
audit, except that the Secretary may waive the
requirements of this clause (iii) if the lender
submits to the Secretary the results of an
audit conducted for other purposes that the
Secretary determines provides the same
information as the audits required by this
clause;
(V) provides authority for the guaranty
agency to require a participation agreement
between the guaranty agency and each eligible
institution within the State in which it is
designated, as a condition for guaranteeing
loans made on behalf of students attending the
institution;
(W) provides assurances that the agency will
implement all requirements of the Secretary for
uniform claims and procedures pursuant to
section 432(l);
(X) provides information to the Secretary in
accordance with section 428(c)(9) and maintains
reserve funds determined by the Secretary to be
sufficient in relation to such agency's
guarantee obligations; and
(Y) provides that--
(i) the lender shall determine the
eligibility of a borrower for a
deferment described in subparagraph
(M)(i) based on--
(I) receipt of a request for
deferment from the borrower and
documentation of the borrower's
eligibility for the deferment;
(II) receipt of a newly
completed loan application that
documents the borrower's
eligibility for a deferment;
(III) receipt of student
status information documenting
that the borrower is enrolled
on at least a half-time basis;
or
(IV) the lender's
confirmation of the borrower's
half-time enrollment status
through use of the National
Student Loan Data System, if
the confirmation is requested
by the institution of higher
education;
(ii) the lender will notify the
borrower of the granting of any
deferment under clause (i)(II) or (III)
of this subparagraph and of the option
to continue paying on the loan; and
(iii) the lender shall, at the time
the lender grants a deferment to a
borrower who received a loan under
section 428H and is eligible for a
deferment under subparagraph (M) of
this paragraph, provide information to
the borrower to assist the borrower in
understanding the impact of the
capitalization of interest on the
borrower's loan principal and on the
total amount of interest to be paid
during the life of the loan.
(2) Contents of insurance program agreement.--Such an
agreement shall--
(A) provide that the holder of any such loan
will be required to submit to the Secretary, at
such time or times and in such manner as the
Secretary may prescribe, statements containing
such information as may be required by or
pursuant to regulation for the purpose of
enabling the Secretary to determine the amount
of the payment which must be made with respect
to that loan;
(B) include such other provisions as may be
necessary to protect the United States from the
risk of unreasonable loss and promote the
purpose of this part, including such provisions
as may be necessary for the purpose of section
437, and as are agreed to by the Secretary and
the guaranty agency, as the case may be;
(C) provide for making such reports, in such
form and containing such information, including
financial information, as the Secretary may
reasonably require to carry out the Secretary's
functions under this part and protect the
financial interest of the United States, and
for keeping such records and for affording such
access thereto as the Secretary may find
necessary to assure the correctness and
verification of such reports;
(D) provide for--
(i) conducting, except as provided in
clause (ii), financial and compliance
audits of the guaranty agency on at
least an annual basis and covering the
period since the most recent audit,
conducted by a qualified, independent
organization or person in accordance
with standards established by the
Comptroller General for the audit of
governmental organizations, programs,
and functions, and as prescribed in
regulations of the Secretary, the
results of which shall be submitted to
the Secretary; or
(ii) with regard to a guaranty
program of a State which is audited
under chapter 75 of title 31, United
States Code, deeming such audit to
satisfy the requirements of clause (i)
for the period of time covered by such
audit;
(E)(i) provide that any guaranty agency may
transfer loans which are insured under this
part to any other guaranty agency with the
approval of the holder of the loan and such
other guaranty agency; and
(ii) provide that the lender (or the holder
of the loan) shall, not later than 120 days
after the borrower has left the eligible
institution, notify the borrower of the date on
which the repayment period begins; and
(F) provide that, if the sale, other
transfer, or assignment of a loan made under
this part to another holder will result in a
change in the identity of the party to whom the
borrower must send subsequent payments or
direct any communications concerning the loans,
then--
(i) the transferor and the transferee
will be required, not later than 45
days from the date the transferee
acquires a legally enforceable right to
receive payment from the borrower on
such loan, either jointly or separately
to provide a notice to the borrower
of--
(I) the sale or other
transfer;
(II) the identity of the
transferee;
(III) the name and address of
the party to whom subsequent
payments or communications must
be sent;
(IV) the telephone numbers of
both the transferor and the
transferee;
(V) the effective date of the
transfer;
(VI) the date on which the
current servicer (as of the
date of the notice) will stop
accepting payments; and
(VII) the date on which the
new servicer will begin
accepting payments; and
(ii) the transferee will be required
to notify the guaranty agency, and,
upon the request of an institution of
higher education, the guaranty agency
shall notify the last such institution
the student attended prior to the
beginning of the repayment period of
any loan made under this part, of--
(I) any sale or other
transfer of the loan; and
(II) the address and
telephone number by which
contact may be made with the
new holder concerning repayment
of the loan,
except that this subparagraph (F) shall only
apply if the borrower is in the grace period
described in section 427(a)(2)(B) or 428(b)(7)
or is in repayment status.
(3) Restrictions on inducements, payments, mailings,
and advertising.--A guaranty agency shall not--
(A) offer, directly or indirectly, premiums,
payments, stock or other securities, prizes,
travel, entertainment expenses, tuition payment
or reimbursement, or other inducements to--
(i) any institution of higher
education, any employee of an
institution of higher education, or any
individual or entity in order to secure
applicants for loans made under this
part; or
(ii) any lender, or any agent,
employee, or independent contractor of
any lender or guaranty agency, in order
to administer or market loans made
under this part (other than a loan made
as part of the guaranty agency's
lender-of-last-resort program pursuant
to section 428(j)), for the purpose of
securing the designation of the
guaranty agency as the insurer of such
loans;
(B) conduct unsolicited mailings, by postal
or electronic means, of student loan
application forms to students enrolled in
secondary schools or postsecondary educational
institutions, or to the families of such
students, except that applications may be
mailed, by postal or electronic means, to
students or borrowers who have previously
received loans guaranteed under this part by
the guaranty agency;
(C) perform, for an institution of higher
education participating in a program under this
title, any function that such institution is
required to perform under this title, except
that the guaranty agency may perform functions
on behalf of such institution in accordance
with section 485(b) or 485(l);
(D) pay, on behalf of an institution of
higher education, another person to perform any
function that such institution is required to
perform under this title, except that the
guaranty agency may perform functions on behalf
of such institution in accordance with section
485(b) or 485(l); or
(E) conduct fraudulent or misleading
advertising concerning loan availability,
terms, or conditions.
It shall not be a violation of this paragraph for a
guaranty agency to provide technical assistance to
institutions of higher education comparable to the
technical assistance provided to institutions of higher
education by the Department.
(4) Special rule.--With respect to the graduate
fellowship program referred to in paragraph
(1)(M)(i)(II), the Secretary shall approve any course
of study at a foreign university that is accepted for
the completion of a recognized international fellowship
program by the administrator of such a program.
Requests for deferment of repayment of loans under this
part by students engaged in graduate or postgraduate
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.
(5) Guaranty agency information transfers.--(A) Until
such time as the Secretary has implemented section 485B
and is able to provide to guaranty agencies the
information required by such section, any guaranty
agency may request information regarding loans made
after January 1, 1987, to students who are residents of
the State for which the agency is the designated
guarantor, from any other guaranty agency insuring
loans to such students.
(B) Upon a request pursuant to subparagraph (A), a
guaranty agency shall provide--
(i) the name and the social security number
of the borrower; and
(ii) the amount borrowed and the cumulative
amount borrowed.
(C) Any costs associated with fulfilling the request
of a guaranty agency for information on students shall
be paid by the guaranty agency requesting the
information.
(6) State guaranty agency information request of
state licensing boards.--Each guaranty agency is
authorized to enter into agreements with each
appropriate State licensing board under which the State
licensing board, upon request, will furnish the
guaranty agency with the address of a student borrower
in any case in which the location of the student
borrower is unknown or unavailable to the guaranty
agency.
(7) Repayment period.--(A) In the case of a loan made
under section 427 or 428, the repayment period shall
exclude any period of authorized deferment or
forbearance and shall begin the day after 6 months
after the date the student ceases to carry at least
one-half the normal full-time academic workload (as
determined by the institution).
(B) In the case of a loan made under section 428H,
the repayment period shall exclude any period of
authorized deferment or forbearance, and shall begin as
described in subparagraph (A), but interest shall begin
to accrue or be paid by the borrower on the day the
loan is disbursed.
(C) In the case of a loan made under section 428B or
428C, the repayment period shall begin on the day the
loan is disbursed, or, if the loan is disbursed in
multiple installments, on the day of the last such
disbursement, and shall exclude any period of
authorized deferment or forbearance.
(D) There shall be excluded from the 6-month period
that begins on the date on which a student ceases to
carry at least one-half the normal full-time academic
workload as described in subparagraph (A) any period
not to exceed 3 years during which a borrower who is a
member of a reserve component of the Armed Forces named
in section 10101 of title 10, United States Code, is
called or ordered to active duty for a period of more
than 30 days (as defined in section 101(d)(2) of such
title). Such period of exclusion shall include the
period necessary to resume enrollment at the borrower's
next available regular enrollment period.
(8) Means of disbursement of loan proceeds.--Nothing
in this title shall be interpreted to prohibit the
disbursement of loan proceeds by means other than by
check or to allow the Secretary to require checks to be
made co-payable to the institution and the borrower.
(9) Repayment plans.--
(A) Design and selection.--In accordance with
regulations promulgated by the Secretary, the
lender shall offer a borrower of a loan made
under this part the plans described in this
subparagraph for repayment of such loan,
including principal and interest thereon. No
plan may require a borrower to repay a loan in
less than 5 years unless the borrower, during
the 6 months immediately preceding the start of
the repayment period, specifically requests
that repayment be made over of a shorter
period. The borrower may choose from--
(i) a standard repayment plan, with a
fixed annual repayment amount paid over
a fixed period of time, not to exceed
10 years;
(ii) a graduated repayment plan paid
over a fixed period of time, not to
exceed 10 years;
(iii) an income-sensitive repayment
plan, with income-sensitive repayment
amounts paid over a fixed period of
time, not to exceed 10 years, except
that the borrower's scheduled payments
shall not be less than the amount of
interest due;
(iv) for new borrowers on or after
the date of enactment of the Higher
Education Amendments of 1998 who
accumulate (after such date)
outstanding loans under this part
totaling more than $30,000, an extended
repayment plan, with a fixed annual or
graduated repayment amount paid over an
extended period of time, not to exceed
25 years, except that the borrower
shall repay annually a minimum amount
determined in accordance with paragraph
(1)(L)(i); and
(v) beginning July 1, 2009, an
income-based repayment plan that
enables a borrower who has a partial
financial hardship to make a lower
monthly payment in accordance with
section 493C, except that the plan
described in this clause shall not be
available to a borrower for a loan
under section 428B made on behalf of a
dependent student or for a
consolidation loan under section 428C,
if the proceeds of such loan were used
to discharge the liability of a loan
under section 428B made on behalf of a
dependent student.
(B) Lender selection of option if borrower
does not select.--If a borrower of a loan made
under this part does not select a repayment
plan described in subparagraph (A), the lender
shall provide the borrower with a repayment
plan described in subparagraph (A)(i).
(c) Guaranty Agreements for Reimbursing Losses.--
(1) Authority to enter into agreements.--(A) The
Secretary may enter into a guaranty agreement with any
guaranty agency, whereby the Secretary shall undertake
to reimburse it, under such terms and conditions as the
Secretary may establish, with respect to losses
(resulting from the default of the student borrower) on
the unpaid balance of the principal and accrued
interest of any insured loan. The guaranty agency
shall, be deemed to have a contractual right against
the United States, during the life of such loan, to
receive reimbursement according to the provisions of
this subsection. Upon receipt of an accurate and
complete request by a guaranty agency for reimbursement
with respect to such losses, the Secretary shall pay
promptly and without administrative delay. Except as
provided in subparagraph (B) of this paragraph and in
paragraph (7), the amount to be paid a guaranty agency
as reimbursement under this subsection shall be equal
to 100 percent of the amount expended by it in
discharge of its insurance obligation incurred under
its loan insurance program. A guaranty agency shall
file a claim for reimbursement with respect to losses
under this subsection within 30 days after the guaranty
agency discharges its insurance obligation on the loan.
(B) Notwithstanding subparagraph (A)--
(i) if, for any fiscal year, the amount of
such reimbursement payments by the Secretary
under this subsection exceeds 5 percent of the
loans which are insured by such guaranty agency
under such program and which were in repayment
at the end of the preceding fiscal year, the
amount to be paid as reimbursement under this
subsection for such excess shall be equal to 85
percent of the amount of such excess; and
(ii) if, for any fiscal year, the amount of
such reimbursement payments exceeds 9 percent
of such loans, the amount to be paid as
reimbursement under this subsection for such
excess shall be equal to 75 percent of the
amount of such excess.
(C) For the purpose of this subsection, the amount of
loans of a guaranty agency which are in repayment shall
be the original principal amount of loans made by a
lender which are insured by such a guaranty agency
reduced by--
(i) the amount the insurer has been required
to pay to discharge its insurance obligations
under this part;
(ii) the original principal amount of loans
insured by it which have been fully repaid; and
(iii) the original principal amount insured
on those loans for which payment of the first
installment of principal has not become due
pursuant to subsection (b)(1)(E) of this
section or such first installment need not be
paid pursuant to subsection (b)(1)(M) of this
section.
(D) Notwithstanding any other provisions of this
section, in the case of a loan made pursuant to a
lender-of-last-resort program, the Secretary shall
apply the provisions of--
(i) the fourth sentence of subparagraph (A)
by substituting ``100 percent'' for ``95
percent'';
(ii) subparagraph (B)(i) by substituting
``100 percent'' for ``85 percent''; and
(iii) subparagraph (B)(ii) by substituting
``100 percent'' for ``75 percent''.
(E) Notwithstanding any other provisions of this
section, in the case of an outstanding loan transferred
to a guaranty agency from another guaranty agency
pursuant to a plan approved by the Secretary in
response to the insolvency of the latter such guarantee
agency, the Secretary shall apply the provision of--
(i) the fourth sentence of subparagraph (A)
by substituting ``100 percent'' for ``95
percent'';
(ii) subparagraph (B)(i) by substituting ``90
percent'' for ``85 percent''; and
(iii) subparagraph (B)(ii) by substituting
``80 percent'' for ``75 percent''.
(F)(i) Notwithstanding any other provisions of this
section, in the case of exempt claims, the Secretary
shall apply the provisions of--
(I) the fourth sentence of subparagraph (A)
by substituting ``100 percent'' for ``95
percent'';
(II) subparagraph (B)(i) by substituting
``100 percent'' for ``85 percent''; and
(III) subparagraph (B)(ii) by substituting
``100 percent'' for ``75 percent''.
(ii) For purposes of clause (i) of this subparagraph,
the term ``exempt claims'' means claims with respect to
loans for which it is determined that the borrower (or
the student on whose behalf a parent has borrowed),
without the lender's or the institution's knowledge at
the time the loan was made, provided false or erroneous
information or took actions that caused the borrower or
the student to be ineligible for all or a portion of
the loan or for interest benefits thereon.
(G) Notwithstanding any other provision of this
section, the Secretary shall exclude a loan made
pursuant to a lender-of-last-resort program when making
reimbursement payment calculations under subparagraphs
(B) and (C).
(2) Contents of guaranty agreements.--The guaranty
agreement--
(A) shall set forth such administrative and
fiscal procedures as may be necessary to
protect the United States from the risk of
unreasonable loss thereunder, to ensure proper
and efficient administration of the loan
insurance program, and to assure that due
diligence will be exercised in the collection
of loans insured under the program, including
(i) a requirement that each beneficiary of
insurance on the loan submit proof that the
institution was contacted and other reasonable
attempts were made to locate the borrower (when
the location of the borrower is unknown) and
proof that contact was made with the borrower
(when the location is known) and (ii)
requirements establishing procedures to
preclude consolidation lending from being an
excessive proportion of guaranty agency
recoveries on defaulted loans under this part;
(B) shall provide for making such reports, in
such form and containing such information, as
the Secretary may reasonably require to carry
out the Secretary's functions under this
subsection, and for keeping such records and
for affording such access thereto as the
Secretary may find necessary to assure the
correctness and verification of such reports;
(C) shall set forth adequate assurances that,
with respect to so much of any loan insured
under the loan insurance program as may be
guaranteed by the Secretary pursuant to this
subsection, the undertaking of the Secretary
under the guaranty agreement is acceptable in
full satisfaction of State law or regulation
requiring the maintenance of a reserve;
(D) shall provide that if, after the
Secretary has made payment under the guaranty
agreement pursuant to paragraph (1) of this
subsection with respect to any loan, any
payments are made in discharge of the
obligation incurred by the borrower with
respect to such loan (including any payments of
interest accruing on such loan after such
payment by the Secretary), there shall be paid
over to the Secretary (for deposit in the fund
established by section 431) such proportion of
the amounts of such payments as is determined
(in accordance with paragraph (6)(A)) to
represent his equitable share thereof, but (i)
shall provide for subrogation of the United
States to the rights of any insurance
beneficiary only to the extent required for the
purpose of paragraph (8); and (ii) except as
the Secretary may otherwise by or pursuant to
regulation provide, amounts so paid by a
borrower on such a loan shall be first applied
in reduction of principal owing on such loan;
(E) shall set forth adequate assurance that
an amount equal to each payment made under
paragraph (1) will be promptly deposited in or
credited to the accounts maintained for the
purpose of section 422(c);
(F) set forth adequate assurances that the
guaranty agency will not engage in any pattern
or practice which results in a denial of a
borrower's access to loans under this part
because of the borrower's race, sex, color,
religion, national origin, age, handicapped
status, income, attendance at a particular
eligible institution within the area served by
the guaranty agency, length of the borrower's
educational program, or the borrower's academic
year in school;
(G) shall prohibit the Secretary from making
any reimbursement under this subsection to a
guaranty agency when a default claim is based
on an inability to locate the borrower, unless
the guaranty agency, at the time of filing for
reimbursement, certifies to the Secretary that
diligent attempts, including contact with the
institution, have been made to locate the
borrower through the use of reasonable skip-
tracing techniques in accordance with
regulations prescribed by the Secretary; and
(H) set forth assurances that--
(i) upon the request of an eligible
institution, the guaranty agency shall,
subject to clauses (ii) and (iii),
furnish to the institution information
with respect to students (including the
names and addresses of such students)
who received loans made, insured, or
guaranteed under this part for
attendance at the eligible institution
and for whom default aversion
assistance activities have been
requested under subsection (l);
(ii) the guaranty agency shall not
require the payment from the
institution of any fee for such
information; and
(iii) the guaranty agency will
require the institution to use such
information only to assist the
institution in reminding students of
their obligation to repay student loans
and shall prohibit the institution from
disseminating the information for any
other purpose.
(I) may include such other provisions as may
be necessary to promote the purpose of this
part.
(3) Forbearance.--A guaranty agreement under this
subsection--
(A) shall contain provisions providing that--
(i) upon request, a lender shall
grant a borrower forbearance, renewable
at 12-month intervals, on terms agreed
to by the parties to the loan with the
approval of the insurer and documented
in accordance with paragraph (10), and
otherwise consistent with the
regulations of the Secretary, if the
borrower--
(I) is serving in a medical
or dental internship or
residency program, the
successful completion of which
is required to begin
professional practice or
service, or is serving in a
medical or dental internship or
residency program leading to a
degree or certificate awarded
by an institution of higher
education, a hospital, or a
health care facility that
offers postgraduate training,
provided that if the borrower
qualifies for a deferment under
section 427(a)(2)(C)(vii) or
subsection (b)(1)(M)(vii) of
this section as in effect prior
to the enactment of the Higher
Education Amendments of 1992,
or section 427(a)(2)(C) or
subsection (b)(1)(M) of this
section as amended by such
amendments, the borrower has
exhausted his or her
eligibility for such deferment;
(II) has a debt burden under
this title that equals or
exceeds 20 percent of income;
(III) is serving in a
national service position for
which the borrower receives a
national service educational
award under the National and
Community Service Trust Act of
1993; or
(IV) is eligible for interest
payments to be made on such
loan for service in the Armed
Forces under section 2174 of
title 10, United States Code,
and, pursuant to that
eligibility, the interest is
being paid on such loan under
subsection (o);
(ii) the length of the forbearance
granted by the lender--
(I) under clause (i)(I) shall
equal the length of time
remaining in the borrower's
medical or dental internship or
residency program, if the
borrower is not eligible to
receive a deferment described
in such clause, or such length
of time remaining in the
program after the borrower has
exhausted the borrower's
eligibility for such deferment;
(II) under clause (i)(II) or
(IV) shall not exceed 3 years;
or
(III) under clause (i)(III)
shall not exceed the period for
which the borrower is serving
in a position described in such
clause; and
(iii) no administrative or other fee
may be charged in connection with the
granting of a forbearance under clause
(i), and no adverse information
regarding a borrower may be reported to
a consumer reporting agency solely
because of the granting of such
forbearance;
(B) may, to the extent provided in
regulations of the Secretary, contain
provisions that permit such forbearance for the
benefit of the student borrower as may be
agreed upon by the parties to an insured loan
and approved by the insurer;
(C) shall contain provisions that specify
that--
(i) the form of forbearance granted
by the lender pursuant to this
paragraph, other than subparagraph
(A)(i)(IV), shall be temporary
cessation of payments, unless the
borrower selects forbearance in the
form of an extension of time for making
payments, or smaller payments than were
previously scheduled;
(ii) the form of forbearance granted
by the lender pursuant to subparagraph
(A)(i)(IV) shall be the temporary
cessation of all payments on the loan
other than payments of interest on the
loan that are made under subsection
(o);
(iii) the lender shall, at the time
of granting a borrower forbearance,
provide information to the borrower to
assist the borrower in understanding
the impact of capitalization of
interest on the borrower's loan
principal and total amount of interest
to be paid during the life of the loan;
and
(iv) the lender shall contact the
borrower not less often than once every
180 days during the period of
forbearance to inform the borrower of--
(I) the amount of unpaid
principal and the amount of
interest that has accrued since
the last statement of such
amounts provided to the
borrower by the lender;
(II) the fact that interest
will accrue on the loan for the
period of forbearance;
(III) the amount of interest
that will be capitalized, and
the date on which
capitalization will occur;
(IV) the option of the
borrower to pay the interest
that has accrued before the
interest is capitalized; and
(V) the borrower's option to
discontinue the forbearance at
any time; and
(D) shall contain provisions that specify
that--
(i) forbearance for a period not to
exceed 60 days may be granted if the
lender reasonably determines that such
a suspension of collection activity is
warranted following a borrower's
request for deferment, forbearance, a
change in repayment plan, or a request
to consolidate loans, in order to
collect or process appropriate
supporting documentation related to the
request, and
(ii) during such period interest
shall accrue but not be capitalized.
Guaranty agencies shall not be precluded from
permitting the parties to such a loan from entering
into a forbearance agreement solely because the loan is
in default. The Secretary shall permit lenders to
exercise administrative forbearances that do not
require the agreement of the borrower, under conditions
authorized by the Secretary. Such forbearances shall
include (i) forbearances for borrowers who are
delinquent at the time of the granting of an authorized
period of deferment under section 428(b)(1)(M) or
427(a)(2)(C), and (ii) if the borrower is less than 60
days delinquent on such loans at the time of sale or
transfer, forbearances for borrowers on loans which are
sold or transferred.
(4) Definitions.--For the purpose of this subsection,
the terms ``insurance beneficiary'' and ``default''
have the meanings assigned to them by section 435.
(5) Applicability to existing loans.--In the case of
any guaranty agreement with a guaranty agency, the
Secretary may, in accordance with the terms of this
subsection, undertake to guarantee loans described in
paragraph (1) which are insured by such guaranty agency
and are outstanding on the date of execution of the
guaranty agreement, but only with respect to defaults
occurring after the execution of such guaranty
agreement or, if later, after its effective date.
(6) Secretary's equitable share.--(A) For the purpose
of paragraph (2)(D), the Secretary's equitable share of
payments made by the borrower shall be that portion of
the payments remaining after the guaranty agency with
which the Secretary has an agreement under this
subsection has deducted from such payments--
(i) a percentage amount equal to the
complement of the reinsurance percentage in
effect when payment under the guaranty
agreement was made with respect to the loan;
and
(ii) an amount equal to 24 percent of
such payments for use in accordance
with section 422B, except that--
(I) beginning October 1, 2003
and ending September 30, 2007,
this clause shall be applied by
substituting ``23 percent'' for
``24 percent''; and
(II) beginning October 1,
2007, this clause shall be
applied by substituting ``16
percent'' for ``24 percent''.
(B) A guaranty agency shall--
(i) on or after October 1, 2006--
(I) not charge the borrower
collection costs in an amount in excess
of 18.5 percent of the outstanding
principal and interest of a defaulted
loan that is paid off through
consolidation by the borrower under
this title; and
(II) remit to the Secretary a portion
of the collection charge under
subclause (I) equal to 8.5 percent of
the outstanding principal and interest
of such defaulted loan; and
(ii) on and after October 1, 2009, remit to
the Secretary the entire amount charged under
clause (i)(I) with respect to each defaulted
loan that is paid off with excess consolidation
proceeds.
(C) For purposes of subparagraph (B), the term
``excess consolidation proceeds'' means, with respect
to any guaranty agency for any Federal fiscal year
beginning on or after October 1, 2009, the proceeds of
consolidation of defaulted loans under this title that
exceed 45 percent of the agency's total collections on
defaulted loans in such Federal fiscal year.
(7) New programs eligible for 100 percent
reinsurance.--(A) Notwithstanding paragraph (1)(C), the
amount to be paid a guaranty agency for any fiscal
year--
(i) which begins on or after October 1, 1977
and ends before October 1, 1991; and
(ii) which is either the fiscal year in which
such guaranty agency begins to actively carry
on a student loan insurance program which is
subject to a guaranty agreement under
subsection (b) of this section, or is one of
the 4 succeeding fiscal years,
shall be 100 percent of the amount expended by such
guaranty agency in discharge of its insurance
obligation insured under such program.
(B) Notwithstanding the provisions of paragraph
(1)(C), the Secretary may pay a guaranty agency 100
percent of the amount expended by such agency in
discharge of such agency's insurance obligation for any
fiscal year which--
(i) begins on or after October 1, 1991; and
(ii) is the fiscal year in which such
guaranty agency begins to actively carry on a
student loan insurance program which is subject
to a guaranty agreement under subsection (b) or
is one of the 4 succeeding fiscal years.
(C) The Secretary shall continuously monitor the
operations of those guaranty agencies to which the
provisions of subparagraph (A) or (B) are applicable
and revoke the application of such subparagraph to any
such guaranty agency which the Secretary determines has
not exercised reasonable prudence in the administration
of such program.
(8) Assignment to protect federal fiscal interest.--
If the Secretary determines that the protection of the
Federal fiscal interest so requires, a guaranty agency
shall assign to the Secretary any loan of which it is
the holder and for which the Secretary has made a
payment pursuant to paragraph (1) of this subsection.
(9) Guaranty agency reserve level.--(A) Each guaranty
agency which has entered into an agreement with the
Secretary pursuant to this subsection shall maintain in
the agency's Federal Student Loan Reserve Fund
established under section 422A a current minimum
reserve level of at least 0.25 percent of the total
attributable amount of all outstanding loans guaranteed
by such agency. For purposes of this paragraph, such
total attributable amount does not include amounts of
outstanding loans transferred to the guaranty agency
from another guaranty agency pursuant to a plan of the
Secretary in response to the insolvency of the latter
such guaranty agency.
(B) The Secretary shall collect, on an annual basis,
information from each guaranty agency having an
agreement under this subsection to enable the Secretary
to evaluate the financial solvency of each such agency.
The information collected shall include the level of
such agency's current reserves, cash disbursements and
accounts receivable.
(C) If (i) any guaranty agency falls below the
required minimum reserve level in any 2 consecutive
years, (ii) any guaranty agency's Federal reimbursement
payments are reduced to 85 percent pursuant to
paragraph (1)(B)(i), or (iii) the Secretary determines
that the administrative or financial condition of a
guaranty agency jeopardizes such agency's continued
ability to perform its responsibilities under its
guaranty agreement, then the Secretary shall require
the guaranty agency to submit and implement a
management plan acceptable to the Secretary within 45
working days of any such event.
(D)(i) If the Secretary is not seeking to terminate
the guaranty agency's agreement under subparagraph (E),
or assuming the guaranty agency's functions under
subparagraph (F), a management plan described in
subparagraph (C) shall include the means by which the
guaranty agency will improve its financial and
administrative condition to the required level within
18 months.
(ii) If the Secretary is seeking to terminate the
guaranty agency's agreement under subparagraph (E), or
assuming the guaranty agency's functions under
subparagraph (F), a management plan described in
subparagraph (C) shall include the means by which the
Secretary and the guaranty agency shall work together
to ensure the orderly termination of the operations,
and liquidation of the assets, of the guaranty agency.
(E) The Secretary may terminate a guaranty agency's
agreement in accordance with subparagraph (F) if--
(i) a guaranty agency required to submit a
management plan under this paragraph fails to
submit a plan that is acceptable to the
Secretary;
(ii) the Secretary determines that a guaranty
agency has failed to improve substantially its
administrative and financial condition;
(iii) the Secretary determines that the
guaranty agency is in danger of financial
collapse;
(iv) the Secretary determines that such
action is necessary to protect the Federal
fiscal interest; or
(v) the Secretary determines that such action
is necessary to ensure the continued
availability of loans to student or parent
borrowers.
(F) If a guaranty agency's agreement under this
subsection is terminated pursuant to subparagraph (E),
then the Secretary shall assume responsibility for all
functions of the guaranty agency under the loan
insurance program of such agency. In performing such
functions the Secretary is authorized to--
(i) permit the transfer of guarantees to
another guaranty agency;
(ii) revoke the reinsurance agreement of the
guaranty agency at a specified date, so as to
require the merger, consolidation, or
termination of the guaranty agency;
(iii) transfer guarantees to the Department
of Education for the purpose of payment of such
claims and process such claims using the claims
standards of the guaranty agency, if such
standards are determined by the Secretary to be
in compliance with this Act;
(iv) design and implement a plan to restore
the guaranty agency's viability;
(v) provide the guaranty agency with
additional advance funds in accordance with
section 422(c)(7), with such restrictions on
the use of such funds as is determined
appropriate by the Secretary, in order to--
(I) meet the immediate cash needs of
the guaranty agency;
(II) ensure the uninterrupted payment
of claims; or
(III) ensure that the guaranty agency
will make loans as the lender-of-last-
resort, in accordance with subsection
(j);
(vi) use all funds and assets of the guaranty
agency to assist in the activities undertaken
in accordance with this subparagraph and take
appropriate action to require the return, to
the guaranty agency or the Secretary, of any
funds or assets provided by the guaranty
agency, under contract or otherwise, to any
person or organization; or
(vii) take any other action the Secretary
determines necessary to ensure the continued
availability of loans made under this part to
residents of the State or States in which the
guaranty agency did business, the full honoring
of all guarantees issued by the guaranty agency
prior to the Secretary's assumption of the
functions of such agency, and the proper
servicing of loans guaranteed by the guaranty
agency prior to the Secretary's assumption of
the functions of such agency, and to avoid
disruption of the student loan program.
(G) Notwithstanding any other provision of Federal or
State law, if the Secretary has terminated or is
seeking to terminate a guaranty agency's agreement
under subparagraph (E), or has assumed a guaranty
agency's functions under subparagraph (F)--
(i) no State court may issue any order
affecting the Secretary's actions with respect
to such guaranty agency;
(ii) any contract with respect to the
administration of a guaranty agency's reserve
funds, or the administration of any assets
purchased or acquired with the reserve funds of
the guaranty agency, that is entered into or
extended by the guaranty agency, or any other
party on behalf of or with the concurrence of
the guaranty agency, after the date of
enactment of this subparagraph shall provide
that the contract is terminable by the
Secretary upon 30 days notice to the
contracting parties if the Secretary determines
that such contract includes an impermissible
transfer of the reserve funds or assets, or is
otherwise inconsistent with the terms or
purposes of this section; and
(iii) no provision of State law shall apply
to the actions of the Secretary in terminating
the operations of a guaranty agency.
(H) Notwithstanding any other provision of law, the
Secretary's liability for any outstanding liabilities
of a guaranty agency (other than outstanding student
loan guarantees under this part), the functions of
which the Secretary has assumed, shall not exceed the
fair market value of the reserves of the guaranty
agency, minus any necessary liquidation or other
administrative costs.
(I) The Secretary shall not take any action under
subparagraph (E) or (F) without giving the guaranty
agency notice and the opportunity for a hearing that,
if commenced after September 24, 1998, shall be on the
record.
(J) Notwithstanding any other provision of law, the
information transmitted to the Secretary pursuant to
this paragraph shall be confidential and exempt from
disclosure under section 552 of title 5, United States
Code, relating to freedom of information, or any other
Federal law.
(K) The Secretary, within 6 months after the end of
each fiscal year, shall submit to the authorizing
committees a report specifying the Secretary's
assessment of the fiscal soundness of the guaranty
agency system.
(10) Documentation of forbearance agreements.--For
the purposes of paragraph (3), the terms of forbearance
agreed to by the parties shall be documented by
confirming the agreement of the borrower by notice to
the borrower from the lender, and by recording the
terms in the borrower's file.
(d) Usury Laws Inapplicable.--No provision of any law of the
United States (other than this Act and section 207 of the
Servicemembers Civil Relief Act (50 U.S.C. App. 527)) or of any
State (other than a statute applicable principally to such
State's student loan insurance program) which limits the rate
or amount of interest payable on loans shall apply to a loan--
(1) which bears interest (exclusive of any premium
for insurance) on the unpaid principal balance at a
rate not in excess of the rate specified in this part;
and
(2) which is insured (i) by the United States under
this part, or (ii) by a guaranty agency under a program
covered by an agreement made pursuant to subsection (b)
of this section.
(f) Payments of Certain Costs.--
(1) Payment for certain activities.--
(A) In general.--The Secretary--
(i) for loans originated during
fiscal years beginning on or after
October 1, 1998, and before October 1,
2003, 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
0.65 percent of the total principal
amount of the loans on which insurance
was issued under this part during such
fiscal year by such agency; and
(ii) for loans originated 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.
(B) Payment.--The payment required by
subparagraph (A) shall be paid on a quarterly
basis. The guaranty agency shall be deemed to
have a contractual right against the United
States to receive payments according to the
provisions of this paragraph. Payments shall be
made promptly and without administrative delay
to any guaranty agency submitting an accurate
and complete application under this
subparagraph.
(C) Requirement for payment.--No payment may
be made under this paragraph for loans for
which the disbursement checks have not been
cashed or for which electronic funds transfers
have not been completed.
(g) Action on Insurance Program and Guaranty Agreements.--If
a nonprofit private institution or organization--
(1) applies to enter into an agreement with the
Secretary under subsections (b) and (c) with respect to
a student loan insurance program to be carried on in a
State with which the Secretary does not have an
agreement under subsection (b), and
(2) as provided in the application, undertakes to
meet the requirements of section 422(c)(6)(B) (i),
(ii), and (iii),
the Secretary shall consider and act upon such application
within 180 days, and shall forthwith notify the authorizing
committees of his actions.
(i) Multiple Disbursement of Loans.--
(1) Escrow accounts administered by escrow agent.--
Any guaranty agency or eligible lender (hereafter in
this subsection referred to as the ``escrow agent'')
may enter into an agreement with any other eligible
lender that is not an eligible institution or an agency
or instrumentality of the State (hereafter in this
subsection referred to as the ``lender'') for the
purpose of authorizing disbursements of the proceeds of
a loan to a student. Such agreement shall provide that
the lender will pay the proceeds of such loans into an
escrow account to be administered by the escrow agent
in accordance with the provisions of paragraph (2) of
this subsection. Such agreement may allow the lender to
make payments into the escrow account in amounts that
do not exceed the sum of the amounts required for
disbursement of initial or subsequent installments to
borrowers and to make such payments not more than 10
days prior to the date of the disbursement of such
installment to such borrowers. Such agreement shall
require the lender to notify promptly the eligible
institution when funds are escrowed under this
subsection for a student at such institution.
(2) Authority of escrow agent.--Each escrow agent
entering into an agreement under paragraph (1) of this
subsection is authorized to--
(A) make the disbursements in accordance with
the note evidencing the loan;
(B) commingle the proceeds of all loans paid
to the escrow agent pursuant to the escrow
agreement entered into under such paragraph
(1);
(C) invest the proceeds of such loans in
obligations of the Federal Government or
obligations which are insured or guaranteed by
the Federal Government;
(D) retain interest or other earnings on such
investment; and
(E) return to the lender undisbursed funds
when the student ceases to carry at an eligible
institution at least one-half of the normal
full-time academic workload as determined by
the institution.
(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.
(2) Rules and operating procedures.--The guaranty
agency shall develop rules and operating procedures for
the lender-of-last-resort program designed to ensure
that--
(A) the program establishes operating hours
and methods of application designed to
facilitate application by students and ensure a
response within 60 days after the student's
original complete application is filed under
this subsection;
(B) consistent with standards established by
the Secretary, students applying for loans
under this subsection shall not be subject to
additional eligibility requirements or requests
for additional information beyond what is
required under this title in order to receive a
loan under this part from an eligible lender,
nor, in the case of students and parents
applying for loans under this subsection
because of an inability to otherwise obtain
loans under this part (except for consolidation
loans under section 428C), be required to
receive more than two rejections from eligible
lenders in order to obtain a loan under this
subsection;
(C) information about the availability of
loans under the program is made available to
institutions of higher education in the State;
and
(D) appropriate steps are taken to ensure
that borrowers receiving loans under the
program are appropriately counseled on their
loan obligation.
(3) Advances to guaranty agencies for lender-of-last-
resort services.--(A) In order to ensure the
availability of loan capital, the Secretary is
authorized to provide a guaranty agency designated for
a State with additional advance funds in accordance
with subparagraph (C) and section 422(c)(7), with such
restrictions on the use of such funds as are determined
appropriate by the Secretary, in order to ensure that
the guaranty agency will make loans as the lender-of-
last-resort. Such agency shall make such loans in
accordance with this subsection and the requirements of
the Secretary.
(B) Notwithstanding any other provision in this part,
a guaranty agency serving as a lender-of-last-resort
under this paragraph shall be paid a fee, established
by the Secretary, for making such loans in lieu of
interest and special allowance subsidies, and shall be
required to assign such loans to the Secretary on
demand. Upon such assignment, the portion of the
advance represented by the loans assigned shall be
considered repaid by such guaranty agency.
(C) The Secretary shall exercise the authority
described in subparagraph (A) only if the Secretary
determines that eligible borrowers are seeking and are
unable to obtain loans under this part or designates an
institution of higher education for participation in
the program under this subsection under paragraph (4),
and that the guaranty agency designated for that State
has the capability to provide lender-of-last-resort
loans in a timely manner, in accordance with the
guaranty agency's obligations under paragraph (1), but
cannot do so without advances provided by the Secretary
under this paragraph. If the Secretary makes the
determinations described in the preceding sentence and
determines that it would be cost-effective to do so,
the Secretary may provide advances under this paragraph
to such guaranty agency. If the Secretary determines
that such guaranty agency does not have such
capability, or will not provide such loans in a timely
fashion, the Secretary may provide such advances to
enable another guaranty agency, that the Secretary
determines to have such capability, to make lender-of-
last-resort loans to eligible borrowers in that State
who are experiencing loan access problems or to
eligible borrowers who attend an institution in the
State that is designated under paragraph (4).
(4) Institution-wide student qualification.--Upon the
request of an institution of higher education and
pursuant to standards developed by the Secretary, the
Secretary shall designate such institution for
participation in the lender-of-last-resort program
under this paragraph. If the Secretary designates an
institution under this paragraph, the guaranty agency
designated for the State in which the institution is
located shall make loans, in the same manner as such
loans are made under paragraph (1), to students and
parent borrowers of the designated institution,
regardless of whether the students or parent borrowers
are otherwise unable to obtain loans under this part
(other than a consolidation loan under section 428C).
(5) Standards developed by the secretary.--In
developing standards with respect to paragraph (4), the
Secretary may require--
(A) an institution of higher education to
demonstrate that, despite due diligence on the
part of the institution, the institution has
been unable to secure the commitment of
eligible lenders willing to make loans under
this part to a significant number of students
attending the institution;
(B) that, prior to making a request under
such paragraph for designation for
participation in the lender-of-last-resort
program, an institution of higher education
shall demonstrate that the institution has met
a minimum threshold, as determined by the
Secretary, for the number or percentage of
students at such institution who have received
rejections from eligible lenders for loans
under this part; and
(C) any other standards and guidelines the
Secretary determines to be appropriate.
(6) Expiration of authority.--The Secretary's
authority under paragraph (4) to designate institutions
of higher education for participation in the program
under this subsection shall expire on June 30, 2010.
(7) Expiration of designation.--The eligibility of an
institution of higher education, or borrowers from such
institution, to participate in the program under this
subsection pursuant to a designation of the institution
by the Secretary under paragraph (4) shall expire on
June 30, 2010. After such date, borrowers from an
institution designated under paragraph (4) shall be
eligible to participate in the program under this
subsection as such program existed on the day before
the date of enactment of the Ensuring Continued Access
to Student Loans Act of 2008.
(8) Prohibition on inducements and marketing.--Each
guaranty agency or eligible lender that serves as a
lender-of-last-resort under this subsection--
(A) shall be subject to the prohibitions on
inducements contained in subsection (b)(3) and
the requirements of section 435(d)(5); and
(B) shall not advertise, market, or otherwise
promote loans under this subsection, except
that nothing in this paragraph shall prohibit a
guaranty agency from fulfilling its
responsibilities under paragraph (2)(C).
(9) Dissemination and reporting.--
(A) In general.--The Secretary shall--
(i) broadly disseminate information
regarding the availability of loans
made under this subsection;
(ii) during the period beginning July
1, 2008 and ending June 30, 2011,
provide to the authorizing committees
and make available to the public--
(I) copies of any new or
revised plans or agreements
made by guaranty agencies or
the Department related to the
authorities under this
subsection;
(II) quarterly reports on--
(aa) the number and
amounts of loans
originated or approved
pursuant to this
subsection by each
guaranty agency and
eligible lender; and
(bb) any related
payments by the
Department, a guaranty
agency, or an eligible
lender; and
(III) a budget estimate of
the costs to the Federal
Government (including subsidy
and administrative costs) for
each 100 dollars loaned, of
loans made pursuant to this
subsection between the date of
enactment of the Ensuring
Continued Access to Student
Loans Act of 2008 and June 30,
2010, disaggregated by type of
loan, compared to such costs to
the Federal Government during
such time period of comparable
loans under this part and part
D, disaggregated by part and by
type of loan; and
(iii) beginning July 1, 2011, provide
to the authorizing committees and make
available to the public--
(I) copies of any new or
revised plans or agreements
made by guaranty agencies or
the Department related to the
authorities under this
subsection; and
(II) annual reports on--
(aa) the number and
amounts of loans
originated or approved
pursuant to this
subsection by each
guaranty agency and
eligible lender; and
(bb) any related
payments by the
Department, a guaranty
agency, or an eligible
lender.
(B) Separate reporting.--The information
required to be reported under subparagraph
(A)(ii)(II) shall be reported separately for
loans originated or approved pursuant to
paragraph (4), or payments related to such
loans, for the time period in which the
Secretary is authorized to make designations
under paragraph (4).
(k) Information on Defaults.--
(1) Provision of information to eligible
institutions.--Notwithstanding any other provision of
law, in order to notify eligible institutions of former
students who are in default of their continuing
obligation to repay student loans, each guaranty agency
shall, upon the request of an eligible institution,
furnish information with respect to students who were
enrolled at the eligible institution and who are in
default on the repayment of any loan made, insured, or
guaranteed under this part. The information authorized
to be furnished under this subsection shall include the
names and addresses of such students.
(2) Public dissemination not authorized.--Nothing in
paragraph (1) of this subsection shall be construed to
authorize public dissemination of the information
described in paragraph (1).
(3) Borrower location information.--Any information
provided by the institution relating to borrower
location shall be used by the guaranty agency in
conducting required skip-tracing activities.
(4) Provision of information to borrowers in
default.--Each guaranty agency that has received a
default claim from a lender regarding a borrower, shall
provide the borrower in default, on not less than two
separate occasions, with a notice, in simple and
understandable terms, of not less than the following
information:
(A) The options available to the borrower to
remove the borrower's loan from default.
(B) The relevant fees and conditions
associated with each option.
(l) Default Aversion Assistance.--
(1) Assistance required.--Upon receipt of a complete
request from a lender received not earlier than the
60th day of delinquency, a guaranty agency having an
agreement with the Secretary under subsection (c) shall
engage in default aversion activities designed to
prevent the default by a borrower on a loan covered by
such agreement.
(2) Reimbursement.--
(A) In general.--A guaranty agency, in
accordance with the provisions of this
paragraph, may transfer from the Federal
Student Loan Reserve Fund under section 422A to
the Agency Operating Fund under section 422B a
default aversion fee. Such fee shall be paid
for any loan on which a claim for default has
not been paid as a result of the loan being
brought into current repayment status by the
guaranty agency on or before the 300th day
after the loan becomes 60 days delinquent.
(B) Amount.--The default aversion fee shall
be equal to 1 percent of the total unpaid
principal and accrued interest on the loan at
the time the request is submitted by the
lender. A guaranty agency may transfer such
fees earned under this subsection not more
frequently than monthly. Such a fee shall not
be paid more than once on any loan for which
the guaranty agency averts the default unless--
(i) at least 18 months has elapsed
between the date the borrower entered
current repayment status and the date
the lender filed a subsequent default
aversion assistance request; and
(ii) during the period between such
dates, the borrower was not more than
30 days past due on any payment of
principal and interest on the loan.
(C) Definition.--For the purpose of earning
the default aversion fee, the term ``current
repayment status'' means that the borrower is
not delinquent in the payment of any principal
or interest on the loan.
(m) [Income Contingent and] Income-Based Repayment.--
[(1) Authority of secretary to require.--The
Secretary may require borrowers who have defaulted on
loans made under this part that are assigned to the
Secretary under subsection (c)(8) to repay those loans
under an income contingent repayment plan or income-
based repayment plan, the terms and conditions of which
shall be established by the Secretary and the same as,
or similar to, an income contingent repayment plan
established for purposes of part D of this title or an
income-based repayment plan under section 493C, as the
case may be.]
(1) Authority of secretary to require.--The Secretary
may require borrowers who have defaulted on loans made
under this part that are assigned to the Secretary
under subsection (c)(8) to repay those loans pursuant
to an income-based repayment plan under section 455(q)
or section 493C, as applicable.
(2) Loans for which [income contingent or] income-
based repayment may be required.--A loan made under
this part may be required to be repaid under this
subsection if the note or other evidence of the loan
has been assigned to the Secretary pursuant to
subsection (c)(8).
(n) Blanket Certificate of Loan Guaranty.--
(1) In general.--Subject to paragraph (3), any
guaranty agency that has entered into or enters into
any insurance program agreement with the Secretary
under this part may--
(A) offer eligible lenders participating in
the agency's guaranty program a blanket
certificate of loan guaranty that permits the
lender to make loans without receiving prior
approval from the guaranty agency of individual
loans for eligible borrowers enrolled in
eligible programs at eligible institutions; and
(B) provide eligible lenders with the ability
to transmit electronically data to the agency
concerning loans the lender has elected to make
under the agency's insurance program via
standard reporting formats, with such reporting
to occur at reasonable and standard intervals.
(2) Limitations on blanket certificate of guaranty.--
(A) An eligible lender may not make a loan to a
borrower under this section after such lender receives
a notification from the guaranty agency that the
borrower is not an eligible borrower.
(B) A guaranty agency may establish limitations or
restrictions on the number or volume of loans issued by
a lender under the blanket certificate of guaranty.
(3) Participation level.--During fiscal years 1999
and 2000, the Secretary may permit, on a pilot basis, a
limited number of guaranty agencies to offer blanket
certificates of guaranty under this subsection.
Beginning in fiscal year 2001, any guaranty agency that
has an insurance program agreement with the Secretary
may offer blanket certificates of guaranty under this
subsection.
(4) Report required.--The Secretary shall, at the
conclusion of the pilot program under paragraph (3),
provide a report to the authorizing committees on the
impact of the blanket certificates of guaranty on
program efficiency and integrity.
(o) Armed Forces and NOAA Commissioned Officer Corps Student
Loan Interest Payment Programs.--
(1) Authority.--Using funds received by transfer to
the Secretary under section 2174 of title 10, United
States Code, or section 268 of the National Oceanic and
Atmospheric Administration Commissioned Officer Corps
Act of 2002 for the payment of interest and any special
allowance on a loan to a member of the Armed Forces or
an officer in the commissioned officer corps of the
National Oceanic and Atmospheric Administration,
respectively, that is made, insured, or guaranteed
under this part, the Secretary shall pay the interest
and special allowance on such loan as due for a period
not in excess of 36 consecutive months. The Secretary
may not pay interest or any special allowance on such a
loan out of any funds other than funds that have been
so transferred.
(2) Forbearance.--During the period in which the
Secretary is making payments on a loan under paragraph
(1), the lender shall grant the borrower forbearance in
accordance with the guaranty agreement under subsection
(c)(3)(A)(i)(IV).
(3) Special allowance defined.--For the purposes of
this subsection, the term ``special allowance'', means
a special allowance that is payable with respect to a
loan under section 438.
* * * * * * *
SEC. 428C. FEDERAL CONSOLIDATION LOANS.
(a) Agreements With Eligible Lenders.--
(1) Agreement required for insurance coverage.--For
the purpose of providing loans to eligible borrowers
for consolidation of their obligations with respect to
eligible student loans, the Secretary or a guaranty
agency shall enter into agreements in accordance with
subsection (b) with the following eligible lenders:
(A) the Student Loan Marketing Association or
the Holding Company of the Student Loan
Marketing Association, including any subsidiary
of the Holding Company, created pursuant to
section 440;
(B) State agencies described in subparagraphs
(D) and (F) of section 435(d)(1); and
(C) other eligible lenders described in
subparagraphs (A), (B), (C), (E), and (J) of
such section.
(2) Insurance coverage of consolidation loans.--
Except as provided in section 429(e), no contract of
insurance under this part shall apply to a
consolidation loan unless such loan is made under an
agreement pursuant to this section and is covered by a
certificate issued in accordance with subsection
(b)(2). Loans covered by such a certificate that is
issued by a guaranty agency shall be considered to be
insured loans for the purposes of reimbursements under
section 428(c), but no payment shall be made with
respect to such loans under section 428(f) to any such
agency.
(3) Definition of eligible borrower.--(A) For the
purpose of this section, the term ``eligible borrower''
means a borrower who--
(i) is not subject to a judgment secured
through litigation with respect to a loan under
this title or to an order for wage garnishment
under section 488A; and
(ii) at the time of application for a
consolidation loan--
(I) is in repayment status as
determined under section 428(b)(7)(A);
(II) is in a grace period preceding
repay-
ment; or
(III) is a defaulted borrower who has
made arrangements to repay the
obligation on the defaulted loans
satisfactory to the holders of the
defaulted loans.
(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) an individual who receives eligible
student loans after the date of receipt of the
consolidation loan may receive a subsequent
consolidation loan;
(II) loans received prior to the date of the
consolidation loan may be added during the 180-
day period following the making of the
consolidation loan;
(III) loans received following the making of
the consolidation loan may be added during the
180-day period following the making of the
consolidation loan;
(IV) loans received prior to the date of the
first consolidation loan may be added to a
subsequent consolidation loan; and
(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] for the purposes of
qualifying for an income-based
repayment plan under section
455(q) or section 493C, as
applicable, 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);
(cc) for the purpose of using the no
accrual of interest for active duty
service members benefit offered under
section 455(o).
(dd) for the purpose of
separating a joint
consolidation loan into 2
separate Federal Direct
Consolidation Loans under
section 455(g)(2).
(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) made under part E of this title;
(C) made under part D of this title;
(D) made under subpart II of part A of title
VII of the Public Health Service Act; or
(E) made under part E of title VIII of the
Public Health Service Act.
(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) that, in the case of all lenders
described in subsection (a)(1), the lender will
make a consolidation loan to an eligible
borrower (on request of that borrower) only if
the borrower certifies that the borrower has no
other application pending for a loan under this
section;
(B) that each consolidation loan made by the
lender will bear interest, and be subject to
repayment, in accordance with subsection (c);
(C) that each consolidation loan will be
made, notwithstanding any other provision of
this part limiting the annual or aggregate
principal amount for all insured loans made to
a borrower, in an amount (i) which is not less
than the minimum amount required for
eligibility of the borrower under subsection
(a)(3), and (ii) which is equal to the sum of
the unpaid principal and accrued unpaid
interest and late charges of all eligible
student loans received by the eligible borrower
which are selected by the borrower for
consolidation;
(D) that the proceeds of each consolidation
loan will be paid by the lender to the holder
or holders of the loans so selected to
discharge the liability on such loans;
(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;
(F) that the lender shall disclose to a
prospective borrower, in simple and
understandable terms, at the time the lender
provides an application for a consolidation
loan--
(i) whether consolidation would
result in a loss of loan benefits under
this part or part D, including loan
forgiveness, cancellation, and
deferment;
(ii) with respect to Federal Perkins
Loans under part E--
(I) that if a borrower
includes a Federal Perkins Loan
under part E in the
consolidation loan, the
borrower will lose all
interest-free periods that
would have been available for
the Federal Perkins Loan, such
as--
(aa) the periods
during which no
interest accrues on
such loan while the
borrower is enrolled in
school at least half-
time;
(bb) the grace period
under section
464(c)(1)(A); and
(cc) the periods
during which the
borrower's student loan
repayments are deferred
under section
464(c)(2);
(II) that if a borrower
includes a Federal Perkins Loan
in the consolidation loan, the
borrower will no longer be
eligible for cancellation of
part or all of the Federal
Perkins Loan under section
465(a); and
(III) the occupations listed
in section 465 that qualify for
Federal Perkins Loan
cancellation under section
465(a);
(iii) the repayment plans that are
available to the borrower;
(iv) the options of the borrower to
prepay the consolidation loan, to pay
such loan on a shorter schedule, and to
change repayment plans;
(v) that borrower benefit programs
for a consolidation loan may vary among
different lenders;
(vi) the consequences of default on
the consolidation loan; and
(vii) that by applying for a
consolidation loan, the borrower is not
obligated to agree to take the
consolidation loan; and
(G) such other terms and conditions as the
Secretary or the guaranty agency may
specifically require of the lender to carry out
this section.
(2) Issuance of certificate of comprehensive
insurance coverage.--The Secretary shall issue a
certificate of comprehensive insurance coverage under
section 429(b) to a lender which has entered into an
agreement with the Secretary under paragraph (1) of
this subsection. The guaranty agency may issue a
certificate of comprehensive insurance coverage to a
lender with which it has an agreement under such
paragraph. The Secretary shall not issue a certificate
to a lender described in subparagraph (B) or (C) of
subsection (a)(1) unless the Secretary determines that
such lender has first applied to, and has been denied a
certificate of insurance by, the guaranty agency which
insures the preponderance of its loans (by value).
(3) Contents of certificate.--A certificate issued
under paragraph (2) shall, at a minimum, provide--
(A) that all consolidation loans made by such
lender in conformity with the requirements of
this section will be insured by the Secretary
or the guaranty agency (whichever is
applicable) against loss of principal and
interest;
(B) that a consolidation loan will not be
insured unless the lender has determined to its
satisfaction, in accordance with reasonable and
prudent business practices, for each loan being
consolidated--
(i) that the loan is a legal, valid,
and binding obligation of the borrower;
(ii) that each such loan was made and
serviced in compliance with applicable
laws and regulations; and
(iii) in the case of loans under this
part, that the insurance on such loan
is in full force and effect;
(C) the effective date and expiration date of
the certificate;
(D) the aggregate amount to which the
certificate applies;
(E) the reporting requirements of the
Secretary on the lender and an identification
of the office of the Department of Education or
of the guaranty agency which will process
claims and perform other related administrative
functions;
(F) the alternative repayment terms which
will be offered to borrowers by the lender;
(G) that, if the lender prior to the
expiration of the certificate no longer
proposes to make consolidation loans, the
lender will so notify the issuer of the
certificate in order that the certificate may
be terminated (without affecting the insurance
on any consolidation loan made prior to such
termination); and
(H) the terms upon which the issuer of the
certificate may limit, suspend, or terminate
the lender's authority to make consolidation
loans under the certificate (without affecting
the insurance on any consolidation loan made
prior to such limitation, suspension, or
termination).
(4) Terms and conditions of loans.--A consolidation
loan made pursuant to this section shall be insurable
by the Secretary or a guaranty agency pursuant to
paragraph (2) only if the loan is made to an eligible
borrower who has agreed to notify the holder of the
loan promptly concerning any change of address and the
loan is evidenced by a note or other written agreement
which--
(A) is made without security and without
endorsement, except that if the borrower is a
minor and such note or other written agreement
executed by him or her would not, under
applicable law, create a binding obligation,
endorsement may be required;
(B) provides for the payment of interest and
the repayment of principal in accordance with
subsection (c) of this section;
(C)(i) provides that periodic installments of
principal need not be paid, but interest shall
accrue and be paid in accordance with clause
(ii), during any period for which the borrower
would be eligible for a deferral under section
428(b)(1)(M), and that any such period shall
not be included in determining the repayment
schedule pursuant to subsection (c)(2) of this
section; and
(ii) provides that interest shall accrue and
be paid during any such period--
(I) by the Secretary, in the case of
a consolidation loan for which the
application is received by an eligible
lender before the date of enactment of
the Emergency Student Loan
Consolidation Act of 1997 that
consolidated only Federal Stafford
Loans for which the student borrower
received an interest subsidy under
section 428;
(II) by the Secretary, in the case of
a consolidation loan for which the
application is received by an eligible
lender on or after the date of
enactment of the Emergency Student Loan
Consolidation Act of 1997 except that
the Secretary shall pay such interest
only on that portion of the loan that
repays Federal Stafford Loans for which
the student borrower received an
interest subsidy under section 428 or
Federal Direct Stafford Loans for which
the borrower received an interest
subsidy under section 455; or
(III) by the borrower, or
capitalized, in the case of a
consolidation loan other than a loan
described in subclause (I) or (II);
(D) entitles the borrower to accelerate
without penalty repayment of the whole or any
part of the loan; and
(E)(i) contains a notice of the system of
disclosure concerning such loan to consumer
reporting agencies under section 430A, and (ii)
provides that the lender on request of the
borrower will provide information on the
repayment status of the note to such consumer
reporting agencies.
(5) Direct loans.--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] be repaid pursuant to an income-based
repayment plan under section 493C or 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.
(6) Nondiscrimination in Loan Consolidation.--An
eligible lender that makes consolidation loans under
this section shall not discriminate against any
borrower seeking such a loan--
(A) based on the number or type of eligible
student loans the borrower seeks to
consolidate, except that a lender is not
required to consolidate loans described in
subparagraph (D) or (E) of subsection (a)(4) or
subsection (d)(1)(C)(ii);
(B) based on the type or category of
institution of higher education that the
borrower attended;
(C) based on the interest rate to be charged
to the borrower with respect to the
consolidation loan; or
(D) with respect to the types of repayment
schedules offered to such borrower.
(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) on or after October 1, 1998, and before
July 1, 2006, the applicable interest rate
shall be determined under section 427A(k)(4);
or
(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).
(B) A consolidation loan made before July 1, 1994,
shall bear interest at an annual rate on the unpaid
principal balance of the loan that is equal to the
greater of--
(i) the weighted average of the interest
rates on the loans consolidated, rounded to the
nearest whole percent; or
(ii) 9 percent.
(C) A consolidation loan made on or after July 1,
1994, and 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.
(D) A consolidation loan for which the application is
received by an eligible lender on or after the date of
enactment of the Emergency Student Loan Consolidation
Act of 1997 and before October 1, 1998, shall bear
interest at an annual rate on the unpaid principal
balance of the loan that is equal to the rate specified
in section 427A(f), except that the eligible lender may
continue to calculate interest on such a loan at the
rate previously in effect and defer, until not later
than April 1, 1998, the recalculation of the interest
on such a loan at the rate required by this
subparagraph if the recalculation is applied
retroactively to the date on which the loan is made.
(2) Repayment schedules.--(A) Notwithstanding any
other provision of this part, to the extent authorized
by its certificate of insurance under subsection (b)(2)
and approved by the issuer of such certificate, the
lender of a consolidation loan shall establish
repayment terms as will promote the objectives of this
section, which shall include the establishment of
graduated, income-sensitive, or income-based repayment
schedules, established by the lender in accordance with
the regulations of the Secretary. Except as required by
such income-sensitive or income-based repayment
schedules, [or by the terms of repayment pursuant to
income contingent repayment offered by the Secretary
under subsection (b)(5)] or by the terms of repayment
pursuant to an income-based repayment plan under
section 493C, such repayment terms shall require that
if the sum of the consolidation loan and the amount
outstanding on other student loans to the individual--
(i) is less than $7,500, then such
consolidation loan shall be repaid in not more
than 10 years;
(ii) is equal to or greater than $7,500 but
less than $10,000, then such consolidation loan
shall be repaid in not more than 12 years;
(iii) is equal to or greater than $10,000 but
less than $20,000, then such consolidation loan
shall be repaid in not more than 15 years;
(iv) is equal to or greater than $20,000 but
less than $40,000, then such consolidation loan
shall be repaid in not more than 20 years;
(v) is equal to or greater than $40,000 but
less than $60,000, then such consolidation loan
shall be repaid in not more than 25 years; or
(vi) is equal to or greater than $60,000,
then such consolidation loan shall be repaid in
not more than 30 years.
(B) The amount outstanding on other student loans
which may be counted for the purpose of subparagraph
(A) may not exceed the amount of the consolidation
loan.
(3) Additional repayment requirements.--
Notwithstanding paragraph (2)--
(A) except in the case of an income-based
repayment schedule under section 493C, a
repayment schedule established with respect to
a consolidation loan shall require that the
minimum installment payment be an amount equal
to not less than the accrued unpaid interest;
(B) [except as required by the terms of
repayment pursuant to income contingent
repayment offered by the Secretary under
subsection (b)(5)] except as required by the
terms of repayment pursuant to an income-based
repayment plan under section 493C, the lender
of a consolidation loan may, with respect to
repayment on the loan, when the amount of a
monthly or other similar payment on the loan is
not a multiple of $5, round the payment to the
next highest whole dollar amount that is a
multiple of $5; and
(C) an income-based repayment schedule under
section 493C shall not be available to a
consolidation loan borrower who used the
proceeds of the loan to discharge the liability
on a loan under section 428B, or a Federal
Direct PLUS loan, made on behalf of a dependent
student.
(4) Commencement of repayment.--Repayment of a
consolidation loan shall commence within 60 days after
all holders have, pursuant to subsection (b)(1)(D),
discharged the liability of the borrower on the loans
selected for consolidation.
(5) Insurance premiums prohibited.--No insurance
premium shall be charged to the borrower on any
consolidation loan, and no insurance premium shall be
payable by the lender to the Secretary with respect to
any such loan, but a fee may be payable by the lender
to the guaranty agency to cover the costs of increased
or extended liability with respect to such loan.
(d) Special Program Authorized.--
(1) General rule and definition of eligible student
loan.--
(A) In general.--Subject to the provisions of
this subsection, the Secretary or a guaranty
agency shall enter into agreements with
eligible lenders described in subparagraphs
(A), (B), and (C) of subsection (a)(1) for the
consolidation of eligible student loans.
(B) Applicability rule.--Unless otherwise
provided in this subsection, the agreements
entered into under subparagraph (A) and the
loans made under such agreements for the
consolidation of eligible student loans under
this subsection shall have the same terms,
conditions, and benefits as all other
agreements and loans made under this section.
(C) Definition.--For the purpose of this
subsection, the term ``eligible student loans''
means loans--
(i) of the type described in
subparagraphs (A), (B), and (C) of
subsection (a)(4); and
(ii) made under subpart I of part A
of title VII of the Public Health
Service Act.
(2) Interest rate rule.--
(A) In general.--The portion of each
consolidated loan that is attributable to an
eligible student loan described in paragraph
(1)(C)(ii) shall bear interest at a rate not to
exceed the rate determined under subparagraph
(B).
(B) Determination of the maximum interest
rate.--For the 12-month period beginning after
July 1, 1992, and for each 12-month period
thereafter, beginning on July 1 and ending on
June 30, the interest rate applicable under
subparagraph (A) shall be equal to the average
of the bond equivalent rates of the 91-day
Treasury bills auctioned for the quarter prior
to July 1, for each 12-month period for which
the determination is made, plus 3 percent.
(C) Publication of maximum interest rate.--
The Secretary shall determine the applicable
rate of interest under subparagraph (B) after
consultation with the Secretary of the Treasury
and shall publish such rate in the Federal
Register as soon as practicable after the date
of such determination.
(3) Special rules.--
(A) No special allowance rule.--No special
allowance under section 438 shall be paid with
respect to the portion of any consolidated loan
under this subsection that is attributable to
any loan described in paragraph (1)(C)(ii).
(B) No interest subsidy rule.--No interest
subsidy under section 428(a) shall be paid on
behalf of any eligible borrower for any portion
of a consolidated loan under this subsection
that is attributable to any loan described in
paragraph (1)(C)(ii).
(C) Additional reserve rule.--Notwithstanding
any other provision of this Act, additional
reserves shall not be required for any guaranty
agency with respect to a loan made under this
subsection.
(D) Insurance rule.--Any insurance premium
paid by the borrower under subpart I of part A
of title VII of the Public Health Service Act
with respect to a loan made under that subpart
and consolidated under this subsection shall be
retained by the student loan insurance account
established under section 710 of the Public
Health Service Act.
(4) Regulations.--The Secretary is authorized to
promulgate such regulations as may be necessary to
facilitate carrying out the provisions of this
subsection.
(e) Termination of Authority.--The authority to make loans
under this section expires at the close of June 30, 2010. No
loan may be made under this section for which the disbursement
is 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).
(f) Interest Payment Rebate Fee.--
(1) In general.--For any month beginning on or after
October 1, 1993, each holder of a consolidation loan
under this section for which the first disbursement was
made on or after October 1, 1993, shall pay to the
Secretary, on a monthly basis and in such manner as the
Secretary shall prescribe, a rebate fee calculated on
an annual basis equal to 1.05 percent of the principal
plus accrued unpaid interest on such loan.
(2) Special rule.--For consolidation loans based on
applications received during the period from October 1,
1998 through January 31, 1999, inclusive, the rebate
described in paragraph (1) shall be equal to 0.62
percent of the principal plus accrued unpaid interest
on such loan.
(3) Deposit.--The Secretary shall deposit all fees
collected pursuant to this subsection into the
insurance fund established in section 431.
* * * * * * *
SEC. 428F. DEFAULT REDUCTION PROGRAM.
(a) Other Repayment Incentives.--
(1) Sale or assignment of loan.--
(A) In general.--Each guaranty agency, upon
securing 9 payments made within 20 days of the
due date during 10 consecutive months of
amounts owed on a loan for which the Secretary
has made a payment under paragraph (1) of
section 428(c), shall--
(i) if practicable, sell the loan to
an eligible lender; or
(ii) beginning July 1, 2014, assign
the loan to the Secretary if the
guaranty agency has been unable to sell
the loan under clause (i).
(B) Monthly payments.--Neither the guaranty
agency nor the Secretary shall demand from a
borrower as monthly payment amounts described
in subparagraph (A) more than is reasonable and
affordable based on the borrower's total
financial circumstances. With respect a loan
made under part D on or after July 1, 2025, a
monthly payment amount described in
subparagraph (A) may not be less than $10.
(C) Consumer reporting agencies.--Upon the
sale or assignment of the loan, the Secretary,
guaranty agency or other holder of the loan
shall request any consumer reporting agency to
which the Secretary, guaranty agency or holder,
as applicable, reported the default of the
loan, to remove the record of the default from
the borrower's credit history.
(D) Duties upon sale.--With respect to a loan
sold under subparagraph (A)(i)--
(i) the guaranty agency--
(I) shall, in the case of a
sale made on or after July 1,
2014, repay the Secretary 100
percent of the amount of the
principal balance outstanding
at the time of such sale,
multiplied by the reinsurance
percentage in effect when
payment under the guaranty
agreement was made with respect
to the loan; and
(II) may, in the case of a
sale made on or after July 1,
2014, in order to defray
collection costs--
(aa) charge to the
borrower an amount not
to exceed 16 percent of
the outstanding
principal and interest
at the time of the loan
sale; and
(bb) retain such
amount from the
proceeds of the loan
sale; and
(ii) the Secretary shall reinstate
the Secretary's obligation to--
(I) reimburse the guaranty
agency for the amount that the
agency may, in the future,
expend to discharge the
guaranty agency's insurance
obligation; and
(II) pay to the holder of
such loan a special allowance
pursuant to section 438.
(E) Duties upon assignment.--With respect to
a loan assigned under subparagraph (A)(ii)--
(i) the guaranty agency shall add to
the principal and interest outstanding
at the time of the assignment of such
loan an amount equal to the amount
described in subparagraph
(D)(i)(II)(aa); and
(ii) the Secretary shall pay the
guaranty agency, for deposit in the
agency's Operating Fund established
pursuant to section 422B, an amount
equal to the amount added to the
principal and interest outstanding at
the time of the assignment in
accordance with clause (i).
(F) Eligible lender limitation.--A loan shall
not be sold to an eligible lender under
subparagraph (A)(i) if such lender has been
found by the guaranty agency or the Secretary
to have substantially failed to exercise the
due diligence required of lenders under this
part.
(G) Default due to error.--A loan that does
not meet the requirements of subparagraph (A)
may also be eligible for sale or assignment
under this paragraph upon a determination that
the loan was in default due to clerical or data
processing error and would not, in the absence
of such error, be in a delinquent status.
(2) Use of proceeds of sales.--Amounts received by
the Secretary pursuant to the sale of such loans by a
guaranty agency under paragraph (1)(A)(i) shall be
deducted from the calculations of the amount of
reimbursement for which the agency is eligible under
paragraph (1)(D)(ii)(I) for the fiscal year in which
the amount was received, notwithstanding the fact that
the default occurred in a prior fiscal year.
(3) Borrower eligibility.--Any borrower whose loan is
sold or assigned under paragraph (1)(A) shall not be
precluded by section 484 from receiving additional
loans or grants under this title (for which he or she
is otherwise eligible) on the basis of defaulting on
the loan prior to such loan sale or assignment.
(4) Applicability of general loan conditions.--A loan
that is sold or assigned under paragraph (1) shall, so
long as the borrower continues to make scheduled
repayments thereon, be subject to the same terms and
conditions and qualify for the same benefits and
privileges as other loans made under this part.
(5) Limitation.--A borrower may obtain the benefits
available under this subsection with respect to
rehabilitating a loan (whether by loan sale or
assignment) only [one time] two times per loan.
(b) Satisfactory Repayment Arrangements To Renew
Eligibility.--Each guaranty agency shall establish a program
which allows a borrower with a defaulted loan or loans to renew
eligibility for all title IV student financial assistance
(regardless of whether the defaulted loan has been sold to an
eligible lender or assigned to the Secretary) upon the
borrower's payment of 6 consecutive monthly payments. The
guaranty agency shall not demand from a borrower as a monthly
payment amount under this subsection more than is reasonable
and affordable based upon the borrower's total financial
circumstances. A borrower may only obtain the benefit of this
subsection with respect to renewed eligibility once.
(c) Financial and Economic Literacy.--Each program described
in subsection (b) shall include making available financial and
economic education materials for a borrower who has
rehabilitated a loan.
* * * * * * *
PART D--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM
* * * * * * *
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) provide for the establishment and maintenance of
a direct student loan program at the institution under
which the institution will--
(A) identify eligible students who seek
student financial assistance at such
institution in accordance with section 484;
(B) estimate the need of each such student as
required by part F of this title for an
academic year, except that, any loan obtained
by a student under this part with the same
terms as loans made under section 428H (except
as otherwise provided in this part), or a loan
obtained by a parent under this part with the
same terms as loans made under section 428B
(except as otherwise provided in this part), or
obtained under any State-sponsored or private
loan program, may be used to offset the student
aid index of the student for that year;
(C) provide a statement that certifies the
eligibility of any student to receive a loan
under this part that is not in excess of the
annual or aggregate limit applicable to such
loan, except that the institution may, in
exceptional circumstances identified by the
Secretary, refuse to certify a statement that
permits a student to receive a loan under this
part, or certify a loan amount that is less
than the student's determination of need (as
determined under part F of this title), if the
reason for such action is documented and
provided in written form to such student;
(D) set forth a schedule for disbursement of
the proceeds of the loan in installments,
consistent with the requirements of section
428G; and
(E) provide timely and accurate information--
(i) concerning the status of student
borrowers (and students on whose behalf
parents borrow under this part) while
such students are in attendance at the
institution and concerning any new
information of which the institution
becomes aware for such students (or
their parents) after such borrowers
leave the institution, to the Secretary
for the servicing and collecting of
loans made under this part; and
(ii) if the institution does not have
an agreement with the Secretary under
subsection (b), concerning student
eligibility and need, as determined
under subparagraphs (A) and (B), to the
Secretary as needed for the alternative
origination of loans to eligible
students and parents in accordance with
this part;
(2) provide assurances that the institution will
comply with requirements established by the Secretary
relating to student loan information with respect to
loans made under this part;
(3) provide that the institution accepts
responsibility and financial liability stemming from
its failure to perform its functions pursuant to the
agreement;
(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;
(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]
(6) provide annual reimbursements to the Secretary in
accordance with the requirements under subsection (d);
and
[(6)] (7) 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) supplement the agreement entered into in
accordance with subsection (a);
(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), and (6) of subsection (a), as modified
to relate to the origination of loans by the
institution or consortium;
(3) provide that the institution or consortium will
originate loans to eligible students and parents in
accordance with this part; and
(4) provide that the note or evidence of obligation
on the loan shall be the property of the Secretary.
(c) Withdrawal and Termination Procedures.--The Secretary
shall establish procedures by which institutions or consortia
may withdraw or be terminated from the program under this part.
(d) Reimbursement Requirements.--
(1) Annual reimbursements required.--Beginning in
award year 2028-2029, each institution of higher
education participating in the direct student loan
program under this part shall, for qualifying student
loans, remit to the Secretary, at such time as the
Secretary may specify, an annual reimbursement for each
student cohort of the institution, based on the non-
repayment balance of such cohort and calculated in
accordance with paragraph (3).
(2) Student cohorts.--
(A) Cohorts established.--For each
institution of higher education participating
in the direct student loan program under this
part, the Secretary shall establish student
cohorts, beginning with award year 2027-2028,
as follows:
(i) Completing student cohort.--For
each program of study at such
institution, a student cohort comprised
of all students who received Federal
financial assistance under this title
and who completed such program during
such award year.
(ii) Undergraduate non-completing
student cohort.--For such institution,
a student cohort comprised of all
students who received Federal financial
assistance under this title, who were
enrolled in the institution during the
previous award year in a program of
study leading to an undergraduate
credential, and who at the time the
cohort is established--
(I) have not completed such
program of study; and
(II) are not enrolled at the
institution in any program of
study leading to an
undergraduate credential.
(iii) Graduate non-completing student
cohort.--For each program of study
leading to a graduate credential at
such institution, a student cohort
comprised of all students who received
Federal financial assistance under this
title, who were enrolled in such
program during the previous award year,
and who at the time the cohort is
established--
(I) have not completed such
program of study; and
(II) are not enrolled in such
program.
(B) Qualifying student loan.--For the
purposes of this subsection, the term
``qualifying student loan'' means a loan made
under this part on or after July 1, 2027,
that--
(i) was made to a student included in
a student cohort of an institution or
to a parent on behalf of such a
student;
(ii) except in the case of a loan
described in clause (i) or (ii) of
subparagraph (C), is not included in
any other student cohort of any
institution of higher education;
(iii) is not in--
(I) a medical or dental
internship or residency
forbearance described in
section 428(c)(3)(A)(i)(I),
section 428B(a)(2), section
428H(a), or section
685.205(a)(3) of title 34, Code
of Federal Regulations;
(II) a graduate fellowship
deferment described in section
455(f)(2)(A)(ii);
(III) rehabilitation training
program deferment described
under section 455(f)(2)(A)(ii);
(IV) an in-school deferment
described under section
455(f)(2)(A)(i);
(V) a cancer deferment
described under section
455(f)(3);
(VI) a military service
deferment described under
section 455(f)(2)(C); or
(VII) a post-active duty
student deferment described
under section 493D; and
(iv) is not in default.
(C) Special circumstances.--
(i) Multiple credentials.--In the
case of a student who completes two or
more programs of study during the same
award year, each qualifying student
loan of the student shall be included
in the student cohort for each of such
program of study for such award year.
(ii) Treatment of certain
consolidation loans.--A Federal Direct
Consolidation loan made under this
title shall not be considered a
qualifying student loan for a student
cohort for an award year if all of the
loans included in such consolidation
loan are attributable to another
student cohort.
(iii) Consolidation after inclusion
in a student cohort.--If a qualifying
student loan is consolidated into a
consolidation loan under this title
after such qualifying student loan has
been included in a student cohort, the
percentage of the consolidation loan
that was attributable to such student
cohort at the time of consolidation
shall remain attributable to the
student cohort for the life of the
consolidation loan.
(3) Calculation of reimbursement.--
(A) Reimbursement payment formula.--For each
student cohort of an institution of higher
education established under this subsection,
the annual reimbursement for such cohort shall
be equal to--
(i) the reimbursement percentage for
the cohort, determined in accordance
with subparagraph (B); multiplied by
(ii) the non-repayment balance for
the cohort for the award year,
determined in accordance with
subparagraph (C).
(B) Reimbursement percentage.--The
reimbursement percentage of a student cohort of
an institution shall be determined by the
Secretary when the cohort is established, shall
remain constant for the life of the student
cohort, and shall be determined as follows:
(i) Completing student cohorts.--The
reimbursement percentage of a
completing student cohort shall be
equal to the percentage determined by--
(I) subtracting from one the
quotient of--
(aa) the median
value-added earnings of
students who completed
such program of study
in the most recent
award year for which
such earnings data is
available; divided by
(bb) the median total
price charged to
students included in
such cohort; and
(II) multiplying the
difference determined under
subclause (I) by 100.
(ii) Special circumstances for
completing student cohorts.--
(I) High-risk cohorts.--
Notwithstanding clause (i), if
the median value-added earnings
of a completing student cohort
under clause (i)(I)(aa) is
negative, the reimbursement
percentage of the student
cohort shall be 100 percent.
(II) Low-risk cohorts.--
Notwithstanding clause (i), if
the median value-added earnings
of a completing student cohort
under clause (i)(I)(aa) exceeds
the median total price of such
cohort under clause (i)(I)(bb),
the reimbursement percentage of
the student cohort shall be 0
percent.
(iii) Non-completing student
cohorts.--The reimbursement percentage
of a non-completing student cohort
shall be determined based on the most
recent data available in the award year
in which the cohort is established,
and--
(I) for an undergraduate non-
completing student cohort,
shall be equal to the
percentage of undergraduate
students who received Federal
financial assistance under this
title at such institution who--
(aa) did not complete
an undergraduate
program of study at the
institution within 150
percent of the program
length of such program;
or
(bb) only in the case
of a two-year
institution, did not,
within 6 years after
first enrolling at the
two-year institution,
complete a program of
study at a four-year
institution for which a
bachelor's degree (or
substantially similar
credential) is awarded;
and
(II) for a graduate non-
completing student cohort,
shall be equal to the
percentage of students who
received Federal financial
assistance under this title at
the institution for the
applicable graduate program of
study and who did not complete
such program of study within
150 percent of the program
length.
(C) Non-repayment loan balance.--
(i) In general.--For each award year,
the Secretary shall determine the non-
repayment loan balance for such award
year for each student cohort of an
institution of higher education by
calculating the sum of--
(I) for loans in such cohort,
the difference between the
total amount of payments due
from all borrowers on such
loans during such year and the
total amount of payments made
by all such borrowers on such
loans during such year; plus
(II) the total amount of
interest waived, paid, or
otherwise not charged by the
Secretary during such year
under the income-based
repayment plan described in
section 455(q); plus
(III) the total amount of
principal and interest
forgiven, cancelled, waived,
discharged, repaid, or
otherwise reduced by the
Secretary under any act during
such year that is not included
in subclause (II) and was not
discharged or forgiven under
section 437(a), 428J, or
section 455(m).
(ii) Special circumstances.--For the
purpose of calculating the non-
repayment loan balance of student
cohorts under this paragraph, the
Secretary shall--
(I) for each qualifying
student loan in a student
cohort that is included in
another student cohort because
the student who borrowed such
loan completed two or more
programs of study during the
same award year, the sum of the
amounts described in subclauses
(I) through (III) of clause (i)
for such qualifying student
loan shall be divided equally
among each of the student
cohorts in which such loan is
included; and
(II) for each consolidation
loan in a student cohort--
(aa) determine the
percentage of the
outstanding principal
balance of the
consolidation loan
attributable to such
student cohort--
(AA) at the
time of that
loan was
included in
such cohort, in
the case of a
loan
consolidated
before
inclusion in
such cohort; or
(BB) at the
time of
consolidation,
in the case of
a loan
consolidated
after inclusion
in such cohort;
and
(bb) include in the
calculations under
clause (i) for such
student cohort only the
percentage of the sum
of the amounts
described in subclauses
(I) through (III) of
clause (i) for the
consolidation loan for
such year that is equal
to the percentage of
the consolidation loan
determined under item
(aa).
(D) Total price.--With respect to a student
who received Federal financial assistance under
this title and who completes a program of
study, the term ``total price'' means the total
amount, before Federal financial assistance
under this title was applied, a student was
required to pay to complete the program of
study. A student's total price shall be
calculated by the Secretary as the difference
between--
(i) the total amount of tuition and
fees that were charged to such student
before the application of any Federal
financial assistance provided under
this title; minus
(ii) the total amount of grants and
scholarships described in section
480(i) awarded to such student from
non-Federal sources for such program of
study.
(4) Notification and remittance.--Beginning with the
first award year for which reimbursements are required
under this subsection, and for each succeeding award
year, the Secretary shall--
(A) notify each institution of higher
education of the amounts and due dates of each
annual reimbursement calculated under paragraph
(3) for each student cohort of the institution
within 30 days of calculating such amounts; and
(B) require the institution to remit such
payments within 90 days of such notification.
(5) Penalty for late payments.--
(A) Three-month delinquency.--If an
institution fails to remit to the Secretary a
reimbursement for a student cohort as required
under this subsection within 90 days of
receiving notification from the Secretary in
accordance with paragraph (4), the institution
shall pay to the Secretary, in addition to such
reimbursement, interest on such reimbursement
payment, at a rate that is the average rate
applicable to the loans in such student cohort.
(B) Twelve-month delinquency.--If an
institution fails to remit to the Secretary a
reimbursement for a student cohort as required
under this subsection, plus interest owed in
under subparagraph (A), within 12 months of
receiving notification from the Secretary in
accordance with paragraph (4), the institution
shall be ineligible to make direct loans to any
student enrolled in the program of study for
which the institution has failed to make the
reimbursement payments until such payment is
made.
(C) Eighteen-month delinquency.--If an
institution fails to remit to the Secretary a
reimbursement for a student cohort as required
under this subsection, plus interest owed under
subparagraph (A), within 18 months of receiving
notification from the Secretary in accordance
with paragraph (4), the institution shall be
ineligible to make direct loans or award
Federal Pell Grants under section 401 to any
student enrolled in the institution until such
payment is made.
(D) Two-year delinquency.--If an institution
fails to remit to the Secretary a reimbursement
for a student cohort as required under this
subsection, plus interest owed under
subparagraph (A), within 2 years of receiving
notification from the Secretary in accordance
with paragraph (4), the institution shall be
ineligible to participate in any program under
this title for a period of not less than 10
years.
(6) Relief for voluntary cessation of federal direct
loans for a program of study.--The Secretary shall,
upon the request of an institution that voluntarily
ceases to make Federal Direct loans to students
enrolled in a specific program of study, reduce the
amount of the annual reimbursement owed by the
institution for each student cohort associated with
such program by 50 percent if the institution assures
the Secretary that the institution will not make
Federal Direct loans to any student enrolled in such
program of study (or any substantially similar program
of study, as determined by the Secretary) for a period
of not less than 10 award years, beginning with the
first award year that begins after the date on which
the Secretary reduces such reimbursement.
(7) Reservation of funds for promise grants.--
Notwithstanding any other provision of law, the
Secretary shall reserve the funds remitted to the
Secretary as reimbursements in accordance with this
subsection, and such funds shall be made available to
the Secretary only for the purpose of awarding PROMISE
grants in accordance with subpart 11 of part A of this
title.
* * * * * * *
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.
(2) Designation of loans.--Loans made to borrowers
under this part that, except as otherwise specified in
this part, have the same terms, conditions, and
benefits as loans made to borrowers under--
(A) section 428 shall be known as ``Federal
Direct Stafford Loans'';
(B) section 428B shall be known as ``Federal
Direct PLUS Loans'';
(C) section 428C shall be known as ``Federal
Direct Consolidation Loans''; and
(D) section 428H shall be known as ``Federal
Direct Unsubsidized Stafford Loans''.
(3) [Termination of authority to make interest
subsidized loans to graduate and professional students]
Terminations of and restrictions on loan authority.--
(A) [In general] Termination of authority to
make subsidized loans to graduate and
professional students.--Subject to subparagraph
(B) and notwithstanding any provision of this
part or part B, for any period of instruction
[beginning on or after July 1, 2012]--
(i) [a graduate] beginning on or
after July 1, 2012, a graduate or
professional student shall not be
eligible to receive a Federal Direct
Stafford loan under this part; and
(ii) [the maximum annual amount of
Federal] beginning on or after July 1,
2012, and ending June 30, 2026, the
maximum annual amount of Federal Direct
Unsubsidized Stafford loans such a
student may borrow in any academic year
(as defined in section 481(a)(2)) or
its equivalent shall be the maximum
annual amount for such student
determined under section 428H, plus an
amount equal to the amount of Federal
Direct Stafford loans the student would
have received in the absence of this
subparagraph.
(B) [Exception] Exception for subsidized
loans to individuals enrolled in certain course
work.--[Subparagraph (A)] For any period of
instruction beginning on or after July 1, 2012,
and ending June 30, 2026, subparagraph (A)
shall not apply to an individual enrolled in
course work specified in paragraph (3)(B) or
(4)(B) of section 484(b).
(C) Termination of authority to make
subsidized loans to undergraduate students.--
Notwithstanding any provision of this part or
part B, except as provided in paragraph (4),
for any period of instruction beginning on or
after July 1, 2026--
(i) an undergraduate student shall
not be eligible to receive a Federal
Direct Stafford loan under this part;
and
(ii) the maximum annual amount of
Federal Direct Unsubsidized Stafford
loans such a student may borrow in any
academic year (as defined in section
481(a)(2)) or its equivalent shall be
the maximum annual amount for such
student determined under paragraph
(5)).
(D) Termination of authority to make federal
direct plus loans to any student borrower.--
Notwithstanding any provision of this part or
part B, except as provided in paragraph (4),
for any period of instruction beginning on or
after July 1, 2026, a graduate student or
professional student shall not be eligible to
receive a Federal Direct PLUS Loan under this
part.
(E) Restriction on authority to make federal
direct plus loans to any parent borrower.--
(i) In general.--Notwithstanding any
provision of this part or part B,
except as provided in clause (ii) and
paragraph (4), for any period of
instruction beginning on or after July
1, 2026, a parent, on behalf of a
dependent student, shall not be
eligible to receive a Federal Direct
PLUS Loan under this part.
(ii) Exception.--A parent may receive
a Federal Direct PLUS Loan under this
part, on behalf of a dependent student,
in any academic year (as defined in
section 481(a)(2)) or its equivalent
if--
(I) such student borrows the
maximum annual amount of
Federal Direct Unsubsidized
Stafford loans such student may
borrow in such academic year;
and
(II) such maximum annual
amount is less than the cost of
attendance of the program of
study of such student.
(4) Interim exception for certain students.--
(A) Application of prior limits.--
Subparagraphs (C), (D), and (E) of paragraph
(3), and paragraphs (5) and (6), shall not
apply, during the expected time to credential
described in subparagraph (B), with respect to
an individual who, as of June 30, 2026--
(i) is enrolled in a program of study
at an institution of higher education;
and
(ii) has received a loan (or on whose
behalf a loan was made) under this part
for such program of study.
(B) Expected time to credential.--For
purposes of this paragraph, the expected time
to credential of an individual shall be equal
to the lesser of--
(i) three academic years; or
(ii) the period determined by
calculating the difference between--
(I) the program length (as
defined in section 420W) for
the program of study in which
the individual is enrolled; and
(II) the period of such
program of study that such
individual has completed as of
the date of the determination
under this subparagraph.
(5) Annual and aggregate unsubsidized loan limits.--
(A) Undergraduate students.--
(i) Annual loan limits.--
Notwithstanding any provision of this
part or part B, subject to subparagraph
(C) and except as provided in paragraph
(4), beginning on July 1, 2026, the
maximum annual amount of Federal Direct
Unsubsidized Stafford loans that an
undergraduate student may borrow in any
academic year (as defined in section
481(a)(2)) or its equivalent shall be
the difference between--
(I) the amount of the median
cost of college of the program
of study in which the student
is enrolled; and
(II) the amount of the
Federal Pell Grant under
section 401 awarded to the
student for such academic year.
(ii) Aggregate limits.--
Notwithstanding any provision of this
part or part B, except as provided in
paragraph (4), beginning on July 1,
2026, the maximum aggregate amount of
Federal Direct Unsubsidized Stafford
loans that a student may borrow for
programs of study that award an
undergraduate credential upon
completion of such a program shall be
$50,000.
(B) Graduate and professional students.--
(i) Annual limits.--Notwithstanding
any provision of this part or part B,
subject to subparagraph (C) and except
as provided in paragraph (4), beginning
on July 1, 2026, the maximum annual
amount of Federal Direct Unsubsidized
Stafford loans that a graduate student
or professional student may borrow in
any academic year (as defined in
section 481(a)(2)) or its equivalent
shall be the amount of the median cost
of college of the program of study in
which the student is enrolled.
(ii) Aggregate limits.--
Notwithstanding any provision of this
part or part B, except as provided in
paragraph (4), beginning on July 1,
2026, the maximum aggregate amount of
Federal Direct Unsubsidized Stafford
loans that, in addition to the maximum
aggregate amount described in
subparagraph (A)(ii)--
(I) a graduate student--
(aa) who is not (and
has not been) a
professional student,
may borrow for programs
of study described in
subparagraph (D)(i)
shall be $100,000; or
(bb) who is (or has
been) a professional
student, may borrow for
programs of study
described in
subparagraph (D)(i)
shall be an amount
equal to--
(AA)
$150,000, minus
(BB) the
amount such
student
borrowed for
programs of
study described
in subclauses
(I) and (II) of
subparagraph
(D)(ii); and
(II) a professional student--
(aa) who is not (and
has not been) a
graduate student, may
borrow for programs of
study described in
subclauses (I) and (II)
of subparagraph (D)(ii)
shall be $150,000; or
(bb) who is (or has
been) a graduate
student, may borrow for
programs of study
described in subclauses
(I) and (II) of
subparagraph (D)(ii)
shall be an amount
equal to--
(AA)
$150,000, minus
(BB) the
amount such
student
borrowed for
programs of
study described
in subparagraph
(D)(i).
(C) Less than full-time enrollment.--In any
case where a student is enrolled in an program
of study of an institution of higher education
on less than a full-time basis during any
academic year, the amount of a loan that
student may borrow for an academic year (as
defined in section 481(a)(2)) or its equivalent
shall be reduced in direct proportion to the
degree to which that student is not so enrolled
on a full-time basis, rounded to the nearest
whole percentage point, as provided in a
schedule of reductions published by the
Secretary computed for purposes of this
paragraph.
(D) Definition.--For purposes of this
subsection:
(i) Graduate student.--The term
``graduate student'' means a student
enrolled in a program of study that
awards a graduate credential (other
than a professional degree) upon
completion of the program.
(ii) Professional student.--The term
``professional student'' means a
student enrolled in a program of study
that--
(I) awards a professional
degree upon completion of the
program; or
(II) provides the training
described in part 141 of title
14, Code of Federal Regulations
(or any successor regulations).
(iii) Undergraduate student.--The
term ``undergraduate student'' means a
student enrolled in a program of study
that awards an undergraduate credential
upon completion of the program.
(6) Annual and aggregate federal direct plus loans
limits for parent borrowers.--
(A) Annual limits.--Notwithstanding any
provision of this part or part B, subject to
paragraph (3)(E) and except as provided in
paragraph (4), beginning on July 1, 2026, the
maximum annual amount of Federal Direct PLUS
loans that a parent may borrow, on behalf of a
dependent student, in any academic year (as
defined in section 481(a)(2)) or its equivalent
shall be the amount equal to--
(i) the cost of attendance of the
program of study of such student; minus
(ii) the maximum annual amount of
Federal Direct Unsubsidized Stafford
loans such student may borrow in such
academic year.
(B) Aggregate limits.--Notwithstanding any
provision of this part or part B, subject to
paragraph (3)(E) and except as provided in
paragraph (4), beginning on July 1, 2026, the
maximum aggregate amount of Federal Direct PLUS
loans that a parent may borrow shall be
$50,000, without regard to the number of
dependent students on behalf of whom such
parent borrows such a loan.
(7) Lifetime maximum aggregate amount for all
students.--Notwithstanding any provision of this part
or part B, except as provided in paragraph (4),
beginning on July 1, 2026, the maximum aggregate amount
of loans made, insured, or guaranteed under this title
that a student may borrow, and that a parent may borrow
on behalf of such student, shall be $200,000, without
regard to any amounts repaid, forgiven, canceled, or
otherwise discharged on any such loan.
(8) Institutionally determined limits.--
Notwithstanding the annual loan limits described in
subparagraphs (A)(i) and (B)(i) of paragraph (5) and
subparagraph (A) of paragraph (6), beginning on July 1,
2026, an institution of higher education (at the
discretion of a financial aid administrator at the
institution) may limit the total amount of loans made
under this part for a program of study for an academic
year (as defined in section 481(a)(2)) that a student
may borrow, and that a parent may borrow on behalf of
such student, as long as any such limit is applied
consistently to all students enrolled in such program
of study.
(b) Interest Rate.--
(1) Rates for fdsl and fdusl.--For Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made on or
after July 1, 1994, 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--
(A) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
held prior to such June 1; plus
(B) 3.1 percent,
except that such rate shall not exceed 8.25 percent.
(2) In school and grace period rules.--(A)
Notwithstanding the provisions of paragraph (1), but
subject to paragraph (3), with respect to any Federal
Direct Stafford Loan or Federal Direct Unsubsidized
Stafford Loan for which the first disbursement is made
on or after July 1, 1995, the applicable rate of
interest for interest which accrues--
(i) prior to the beginning of the repayment
period of the loan; or
(ii) during the period in which principal
need not be paid (whether or not such principal
is in fact paid) by reason of a provision
described in section 428(b)(1)(M) or
427(a)(2)(C),
shall not exceed the rate determined under subparagraph
(B).
(B) For the purpose of subparagraph (A), the rate
determined under this subparagraph shall, during any
12-month period beginning on July 1 and ending on June
30, be determined on the preceding June 1 and be equal
to--
(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
prior to such June 1; plus
(ii) 2.5 percent,
except that such rate shall not exceed 8.25 percent.
(3) Out-year rule.--Notwithstanding paragraphs (1)
and (2), for Federal Direct Stafford Loans and Federal
Direct Unsubsidized Stafford Loans made on or after
July 1, 1998, 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--
(A) the bond equivalent rate of the security
with a comparable maturity as established by
the Secretary; plus
(B) 1.0 percent,
except that such rate shall not exceed 8.25 percent.
(4) Rates for fdplus.--
(A)(i) For Federal Direct PLUS Loans for
which the first disbursement is made on or
after July 1, 1994, the applicable rate of
interest shall, during any 12-month period
beginning on July 1 and ending on or before
June 30, 2001, be determined on the preceding
June 1 and be equal to--
(I) the bond equivalent rate of 52-
week Treasury bills auctioned at final
auction held prior to such June 1; plus
(II) 3.1 percent,
except that such rate shall not exceed 9
percent.
(ii) For any 12-month period beginning on
July 1 of 2001 or any succeeding year, the
applicable rate of interest determined under
this subparagraph shall be determined on the
preceding June 26 and be equal to--
(I) the weekly average 1-year
constant maturity Treasury yield, as
published by the Board of Governors of
the Federal Reserve System, for the
last calendar week ending on or before
such June 26; plus
(II) 3.1 percent,
except that such rate shall not exceed 9
percent.
(B) For Federal Direct PLUS loans made on or after
July 1, 1998, 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 the security
with a comparable maturity as established by
the Secretary; plus
(ii) 2.1 percent,
except that such rate shall not exceed 9 percent.
(5) Temporary interest rate provision.--
(A) Rates for fdsl and fdusl.--
Notwithstanding the preceding paragraphs of
this subsection, for Federal Direct Stafford
Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made
on or after July 1, 1998, and before October 1,
1998, 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) 2.3 percent,
except that such rate shall not exceed 8.25
percent.
(B) In school and grace period rules.--
Notwithstanding the preceding paragraphs of
this subsection, with respect to any Federal
Direct Stafford Loan or Federal Direct
Unsubsidized Stafford Loan for which the first
disbursement is made on or after July 1, 1998,
and before October 1, 1998, the applicable rate
of interest for interest which accrues--
(i) prior to the beginning of the
repayment period of the loan; or
(ii) during the period in which
principal need not be paid (whether or
not such principal is in fact paid) by
reason of a provision described in
section 428(b)(1)(M) or 427(a)(2)(C),
shall be determined under subparagraph (A) by
substituting ``1.7 percent'' for ``2.3
percent''.
(C) PLUS loans.--Notwithstanding the
preceding paragraphs of this subsection, with
respect to Federal Direct PLUS Loan for which
the first disbursement is made on or after July
1, 1998, and before October 1, 1998, the
applicable rate of interest shall be determined
under subparagraph (A)--
(i) by substituting ``3.1 percent''
for ``2.3 percent''; and
(ii) by substituting ``9.0 percent''
for ``8.25 percent''.
(6) Interest rate provision for new loans on or after
october 1, 1998, and before july 1, 2006.--
(A) Rates for fdsl and fdusl.--
Notwithstanding the preceding paragraphs of
this subsection, for Federal Direct Stafford
Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made
on or after October 1, 1998, and before July 1,
2006, 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) 2.3 percent,
except that such rate shall not exceed 8.25
percent.
(B) In school and grace period rules.--
Notwithstanding the preceding paragraphs of
this subsection, with respect to any Federal
Direct Stafford Loan or Federal Direct
Unsubsidized Stafford Loan for which the first
disbursement is made on or after October 1,
1998, and before July 1, 2006, the applicable
rate of interest for interest which accrues--
(i) prior to the beginning of the
repayment period of the loan; or
(ii) during the period in which
principal need not be paid (whether or
not such principal is in fact paid) by
reason of a provision described in
section 428(b)(1)(M) or 427(a)(2)(C),
shall be determined under subparagraph (A) by
substituting ``1.7 percent'' for ``2.3
percent''.
(C) PLUS loans.--Notwithstanding the
preceding paragraphs of this subsection, with
respect to Federal Direct PLUS Loan for which
the first disbursement is made on or after
October 1, 1998, and before July 1, 2006, the
applicable rate of interest shall be determined
under subparagraph (A)--
(i) by substituting ``3.1 percent''
for ``2.3 percent''; and
(ii) by substituting ``9.0 percent''
for ``8.25 percent''.
(D) Consolidation loans.--Notwithstanding the
preceding paragraphs of this subsection, any
Federal Direct Consolidation loan for which the
application is received on or after February 1,
1999, and before July 1, 2006, shall bear
interest at an annual rate on the unpaid
principal balance of the loan that is equal to
the lesser of--
(i) the weighted average of the
interest rates on the loans
consolidated, rounded to the nearest
higher one-eighth of one percent; or
(ii) 8.25 percent.
(E) Temporary rules for consolidation
loans.--Notwithstanding the preceding
paragraphs of this subsection, any Federal
Direct Consolidation loan for which the
application is received on or after October 1,
1998, and before February 1, 1999, shall bear
interest at an annual rate on the unpaid
principal balance of the loan that is equal
to--
(i) the bond equivalent rate of 91-
day Treasury bills auctioned at the
final auction held prior to such June
1; plus
(ii) 2.3 percent,
except that such rate shall not exceed 8.25
percent.
(7) Interest rate provision for new loans on or after
july 1, 2006 and before july 1, 2013.--
(A) Rates for fdsl and fdusl.--
Notwithstanding the preceding paragraphs of
this subsection, for Federal Direct Stafford
Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made
on or after July 1, 2006, and before July 1,
2013, the applicable rate of interest shall be
6.8 percent on the unpaid principal balance of
the loan.
(B) PLUS loans.--Notwithstanding the
preceding paragraphs of this subsection, with
respect to any Federal Direct PLUS loan for
which the first disbursement is made on or
after July 1, 2006, and before July 1, 2013,
the applicable rate of interest shall be 7.9
percent on the unpaid principal balance of the
loan.
(C) Consolidation loans.--Notwithstanding the
preceding paragraphs of this subsection, any
Federal Direct Consolidation loan for which the
application is received on or after July 1,
2006, and before July 1, 2013, shall bear
interest at an annual rate on the unpaid
principal balance of the loan that is equal to
the lesser of--
(i) the weighted average of the
interest rates on the loans
consolidated, rounded to the nearest
higher one-eighth of one percent; or
(ii) 8.25 percent.
(D) Reduced rates for undergraduate fdsl.--
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,
2006, and before July 1, 2013, the applicable
rate of interest shall be as follows:
(i) For a loan for which the first
disbursement is made on or after July
1, 2006, and before July 1, 2008, 6.8
percent on the unpaid principal balance
of the loan.
(ii) For a loan for which the first
disbursement is made on or after July
1, 2008, and before July 1, 2009, 6.0
percent on the unpaid principal balance
of the loan.
(iii) For a loan for which the first
disbursement is made on or after July
1, 2009, and before July 1, 2010, 5.6
percent on the unpaid principal balance
of the loan.
(iv) 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.
(v) For a loan for which the first
disbursement is made on or after July
1, 2011, and before July 1, 2013, 3.4
percent on the unpaid principal balance
of the loan.
(8) Interest rate provisions for new loans on or
after july 1, 2013.--
(A) Rates for undergraduate fdsl and fdusl.--
Notwithstanding the preceding paragraphs of
this subsection, for Federal Direct Stafford
Loans and Federal Direct Unsubsidized Stafford
Loans issued to undergraduate students, for
which the first disbursement is made on or
after July 1, 2013, the applicable rate of
interest shall, for loans disbursed 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 the lesser of--
(i) a rate equal to the high yield of
the 10-year Treasury note auctioned at
the final auction held prior to such
June 1 plus 2.05 percent; or
(ii) 8.25 percent.
(B) Rates for graduate and professional
fdusl.--Notwithstanding the preceding
paragraphs of this subsection, for Federal
Direct Unsubsidized Stafford Loans issued to
graduate or professional students, for which
the first disbursement is made on or after July
1, 2013, the applicable rate of interest shall,
for loans disbursed 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 the lesser of--
(i) a rate equal to the high yield of
the 10-year Treasury note auctioned at
the final auction held prior to such
June 1 plus 3.6 percent; or
(ii) 9.5 percent.
(C) PLUS loans.--Notwithstanding the
preceding paragraphs of this subsection, for
Federal Direct PLUS Loans, for which the first
disbursement is made on or after July 1, 2013,
the applicable rate of interest shall, for
loans disbursed 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 the lesser of--
(i) a rate equal to the high yield of
the 10-year Treasury note auctioned at
the final auction held prior to such
June 1 plus 4.6 percent; or
(ii) 10.5 percent.
(D) Consolidation loans.--Notwithstanding the
preceding paragraphs of this subsection, any
Federal Direct Consolidation Loan for which the
application is received on or after July 1,
2013, 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 to the nearest higher one-eighth of one
percent.
(E) Consultation.--The Secretary shall
determine the applicable rate of interest under
this paragraph after consultation with the
Secretary of the Treasury and shall publish
such rate in the Federal Register as soon as
practicable after the date of determination.
(F) Rate.--The applicable rate of interest
determined under this paragraph for a Federal
Direct Stafford Loan, a Federal Direct
Unsubsidized Stafford Loan, or a Federal Direct
PLUS Loan shall be fixed for the period of the
loan.
(9) Repayment incentives.--
(A)(A) Incentives for loans disbursed before
july 1, 2012.--Notwithstanding any other
provision of this part with respect to loans
for which the first disbursement of principal
is made before July 1, 2012,, the Secretary is
authorized to prescribe by regulation such
reductions in the interest or origination fee
rate paid by a borrower of a loan made under
this part as the Secretary determines
appropriate to encourage on-time repayment of
the loan. Such reductions may be offered only
if the Secretary determines the reductions are
cost neutral and in the best financial interest
of the Federal Government. Any increase in
subsidy costs resulting from such reductions
shall be completely offset by corresponding
savings in funds available for the William D.
Ford Federal Direct Loan Program in that fiscal
year from section 458 and other administrative
accounts.
(B) Accountability.--Prior to publishing
regulations proposing repayment incentives with
respect to loans for which the first
disbursement of principal is made before July
1, 2012, the Secretary shall ensure the cost
neutrality of such reductions. The Secretary
shall not prescribe such regulations in final
form unless an official report from the
Director of the Office of Management and Budget
to the Secretary and a comparable report from
the Director of the Congressional Budget Office
to the Congress each certify that any such
reductions will be completely cost neutral.
Such reports shall be transmitted to the
authorizing committees not less than 60 days
prior to the publication of regulations
proposing such reductions.
(C) No repayment incentives for new loans
disbursed on or after july 1, 2012.--
Notwithstanding any other provision of this
part, the Secretary is prohibited from
authorizing or providing any repayment
incentive not otherwise authorized under this
part to encourage on-time repayment of a loan
under this part for which the first
disbursement of principal is made on or after
July 1, 2012, including any reduction in the
interest or origination fee rate paid by a
borrower of such a loan, except that the
Secretary may provide for an interest rate
reduction for a borrower who agrees to have
payments on such a loan automatically
electronically debited from a bank account.
(10) Publication.--The Secretary shall determine the
applicable rates of interest under this subsection
after consultation with the Secretary of the Treasury
and shall publish such rate in the Federal Register as
soon as practicable after the date of determination.
(c) Loan Fee.--
(1) In general.--The Secretary shall charge the
borrower of a loan made under this part an origination
fee of 4.0 percent of the principal amount of loan.
(2) Subsequent reduction.--Paragraph (1) shall be
applied to loans made under this part, other than
Federal Direct Consolidation loans and Federal Direct
PLUS loans--
(A) by substituting ``3.0 percent'' for ``4.0
percent'' with respect to loans for which the
first disbursement of principal is made on or
after the date of enactment of the Higher
Education Reconciliation Act of 2005, and
before July 1, 2007;
(B) by substituting ``2.5 percent'' for ``4.0
percent'' with respect to loans for which the
first disbursement of principal is made on or
after July 1, 2007, and before July 1, 2008;
(C) by substituting ``2.0 percent'' for ``4.0
percent'' with respect to loans for which the
first disbursement of principal is made on or
after July 1, 2008, and before July 1, 2009;
(D) by substituting ``1.5 percent'' for ``4.0
percent'' with respect to loans for which the
first disbursement of principal is made on or
after July 1, 2009, and before July 1, 2010;
and
(E) by substituting ``1.0 percent'' for ``4.0
percent'' with respect to loans for which the
first disbursement of principal is made on or
after July 1, 2010.
(d) Repayment Plans.--
(1) Design and selection.--Consistent with criteria
established by the Secretary, the Secretary shall offer
a borrower of a loan made under this part before July
1, 2026, who has not received a loan made under this
part on or after July 1, 2026, a variety of plans for
repayment of such loan, including principal and
interest on the loan. The borrower shall be entitled to
accelerate, without penalty, repayment on the
borrower's loans under this part. The borrower may
choose--
(A) a standard repayment plan, consistent
with subsection (a)(1) of this section and with
section 428(b)(9)(A)(i);
(B) a graduated repayment plan, consistent
with section 428(b)(9)(A)(ii);
(C) an extended repayment plan, consistent
with section 428(b)(9)(A)(iv), except that the
borrower shall annually repay a minimum amount
determined by the Secretary in accordance with
section 428(b)(1)(L);
[(D) an income contingent repayment plan,
with varying annual repayment amounts based on
the income of the borrower, paid over an
extended period of time prescribed by the
Secretary, not to exceed 25 years, except that
the plan described in this subparagraph shall
not be available to the borrower of a Federal
Direct PLUS loan made on behalf of a dependent
student; and]
(D) beginning on July 1, 2026, the income-
based Repayment Assistance Plan under
subsection (q), provided that--
(i) the borrower is required to pay
each outstanding loan of the borrower
made under this part under such
Repayment Assistance Plan;
(ii) such Plan shall not be available
to borrowers with an excepted loan (as
defined in paragraph (7)); and
(iii) the borrower may not change the
borrower's selection of the Repayment
Assistance Plan except in accordance
with paragraph (7)(C).
(E) beginning on July 1, 2009, an income-
based repayment plan [that enables borrowers
who have a partial financial hardship to make a
lower monthly payment] in accordance with
section 493C, except that the plan described in
this subparagraph shall not be available to the
borrower of a Federal Direct PLUS Loan made on
behalf of a dependent student or [a Federal
Direct Consolidation Loan, if the proceeds of
such loan were used to discharge the liability
on such Federal Direct PLUS Loan or a loan
under section 428B made on behalf of a
dependent student] an excepted Consolidation
Loan (as defined in section 493C(a)(2)).
(2) Selection by secretary.--If a borrower of a loan
made under this part does not select a repayment plan
described in paragraph (1), the Secretary may provide
the borrower with a repayment plan described in
subparagraph (A), (B), or (C) of paragraph (1).
(3) Changes in selections.--The borrower of a loan
made under this part may change the borrower's
selection of a repayment plan under paragraph (1), or
the Secretary's selection of a plan for the borrower
under paragraph (2), as the case may be, under such
terms and conditions as may be established by the
Secretary.
(4) Alternative repayment plans.--The Secretary may
provide, on a case by case basis, an alternative
repayment plan to a borrower of a loan made under this
part who demonstrates to the satisfaction of the
Secretary that the terms and conditions of the
repayment plans available under paragraph (1) are not
adequate to accommodate the borrower's exceptional
circumstances. In designing such alternative repayment
plans, the Secretary shall ensure that such plans do
not exceed the cost to the Federal Government, as
determined on the basis of the present value of future
payments by such borrowers, of loans made using the
plans available under paragraph (1).
(5) Repayment after default.--The Secretary may
require any borrower who has defaulted on a loan made
under this part to--
(A) pay all reasonable collection costs
associated with such loan; and
[(B) repay the loan pursuant to an income
contingent repayment plan.]
(B) repay the loan pursuant to an income-
based repayment plan under subsection (q) or
section 493C, as applicable.
(6) Termination and limitation of repayment
authority.--
(A) Sunset of repayment plans available
before july 1, 2026.--Paragraphs (1) through
(4) of this subsection shall only apply to
loans made under this part before July 1, 2026.
(B) Prohibitions.--The Secretary may not, for
any loan made under this part on or after July
1, 2026--
(i) authorize a borrower of such a
loan to repay such loan pursuant to a
repayment plan that is not described in
paragraph (7)(A); or
(ii) carry out or modify a repayment
plan that is not described in such
paragraphs.
(7) Repayment plans for loans made on or after july
1, 2026.--
(A) Design and selection.--Beginning on July
1, 2026, the Secretary shall offer a borrower
of a loan made under this part on or after such
date (including such a borrower who also has a
loan made under this part before such date) two
plans for repayment of the borrower's loans
under this part, including principal and
interest on such loans. The borrower shall be
entitled to accelerate, without penalty,
repayment on such loans. The borrower may
choose--
(i) a standard repayment plan--
(I) with a fixed monthly
repayment amount paid over a
fixed period of time equal to
the applicable period
determined under subclause
(II); and
(II) with the applicable
period of time for repayment
determined based on the total
outstanding principal of all
loans of the borrower made
under this part before, on, or
after July 1, 2026, at the time
the borrower is entering
repayment under such plan, as
follows--
(aa) for a borrower
with total outstanding
principal of less than
$25,000, a period of 10
years;
(bb) for a borrower
with total outstanding
principal of not less
than $25,000 and less
than $50,000, a period
of 15 years;
(cc) for a borrower
with total outstanding
principal of not less
than $50,000 and less
than $100,000, a period
of 20 years; and
(dd) for a borrower
with total outstanding
principal of $100,000
or more, a period of 25
years; or
(ii) the income-based Repayment
Assistance Plan under subsection (q).
(B) Selection by secretary.--If a borrower of
a loan made under this part on or after July 1,
2026, does not select a repayment plan
described in subparagraph (A), the Secretary
shall provide the borrower with the standard
repayment plan described in subparagraph
(A)(i).
(C) Selection available for each new loan;
selection applies to all outstanding loans.--
Each time a borrower receives a loan made under
this part on or after July 1, 2026, the
borrower may select either the standard
repayment plan under subparagraph (A)(i) or the
Repayment Assistance Plan under subparagraph
(A)(ii), provided that the borrower is required
to pay each outstanding loan of the borrower
made under this part under such selected
repayment plan.
(D) Permissible changes of repayment plan.--
(i) Changing from standard repayment
plan.--A borrower may change the
borrower's selection of the standard
repayment plan under subparagraph
(A)(i), or the Secretary's selection of
such plan for the borrower under
subparagraph (C), as the case may be,
to the Repayment Assistance Plan under
subparagraph (A)(ii) at any time.
(ii) Limited change from repayment
assistance plan.--A borrower may not
change the borrower's selection of the
Repayment Assistance Plan under
subparagraph (A)(ii), except in
accordance with subparagraph (C).
(E) Special rule for excepted loan borrowers
with loans made on or after july 1, 2026.--
(i) Standard repayment plan
required.--Notwithstanding
subparagraphs (A) through (D),
beginning on July 1, 2026, the
Secretary shall require a borrower who
has an excepted loan and who has
received a loan made under this part on
or after such date to repay each
outstanding loan of the borrower made
under this part, including principal
and interest on such loans, under the
standard repayment plan under
subparagraph (A)(i). The borrower shall
be entitled to accelerate, without
penalty, repayment on such loans.
(ii) Excepted loan defined.--For the
purposes of this paragraph, the term
``excepted loan'' means a loan with an
outstanding balance that is--
(I) a Federal Direct PLUS
Loan that is made on behalf of
a dependent student; or
(II) a Federal Direct
Consolidation Loan, if the
proceeds of such loan were used
to the discharge the liability
on--
(aa) an excepted PLUS
loan, as defined in
section 493C(a)(1); or
(bb) an excepted
consolidation loan (as
such term is defined in
section 493C(a)(2)(A),
notwithstanding
subparagraph (B) of
such section).
(F) Treatment of borrowers without loans made
on or after july 1, 2026.--A borrower who has
an outstanding loan (including an excepted
loan) made under this part before July 1, 2026,
and who has not received a loan made under this
part on or after July 1, 2026, shall not be
eligible to change the borrower's selection of
a repayment plan to the standard repayment plan
under subparagraph (A)(i).
[(e) Income Contingent Repayment.--
[(1) Information and procedures.--The Secretary may
obtain such information as is reasonably necessary
regarding the income of a borrower (and the borrower's
spouse, if applicable) of a loan made under this part
that is, or may be, repaid pursuant to income
contingent repayment, for the purpose of determining
the annual repayment obligation of the borrower.
Returns and return information (as defined in section
6103 of the Internal Revenue Code of 1986) may be
obtained under the preceding sentence only to the
extent authorized by section 6103(l)(13) of such Code.
The Secretary shall establish procedures for
determining the borrower's repayment obligation on that
loan for such year, and such other procedures as are
necessary to implement effectively income contingent
repayment.
[(2) Repayment based on adjusted gross income.--A
repayment schedule for a loan made under this part and
repaid pursuant to income contingent repayment shall be
based on the adjusted gross income (as defined in
section 62 of the Internal Revenue Code of 1986) of the
borrower or, if the borrower is married and files a
Federal income tax return jointly with the borrower's
spouse, on the adjusted gross income of the borrower
and the borrower's spouse.
[(3) Additional documents.--A borrower who chooses,
or is required, to repay a loan made under this part
pursuant to income contingent repayment, and for whom
adjusted gross income is unavailable or does not
reasonably reflect the borrower's current income, shall
provide to the Secretary other documentation of income
satisfactory to the Secretary, which documentation the
Secretary may use to determine an appropriate repayment
schedule.
[(4) Repayment schedules.--Income contingent
repayment schedules shall be established by regulations
promulgated by the Secretary and shall require payments
that vary in relation to the appropriate portion of the
annual income of the borrower (and the borrower's
spouse, if applicable) as determined by the Secretary.
[(5) Calculation of balance due.--The balance due on
a loan made under this part that is repaid pursuant to
income contingent repayment shall equal the unpaid
principal amount of the loan, any accrued interest, and
any fees, such as late charges, assessed on such loan.
The Secretary may promulgate regulations limiting the
amount of interest that may be capitalized on such
loan, and the timing of any such capitalization.
[(6) Notification to borrowers.--The Secretary shall
establish procedures under which a borrower of a loan
made under this part who chooses or is required to
repay such loan pursuant to income contingent repayment
is notified of the terms and conditions of such plan,
considers that special circumstances, such as a loss of
employment by the borrower or the borrower's spouse,
warrant an adjustment in the borrower's loan repayment,
the borrower may contact the Secretary, who shall
determine whether such adjustment is appropriate, in
accordance with criteria established by the Secretary.
[(7) Maximum repayment period.--In calculating the
extended period of time for which an income contingent
repayment plan under this subsection may be in effect
for a borrower, the Secretary shall include all time
periods during which a borrower of loans under part B,
part D, or part E--
[(A) is not in default on any loan that is
included in the income contingent repayment
plan; and
[(B)(i) is in deferment due to an economic
hardship described in section 435(o);
[(ii) makes monthly payments under paragraph
(1) or (6) of section 493C(b);
[(iii) makes monthly payments of not less
than the monthly amount calculated under
section 428(b)(9)(A)(i) or subsection
(d)(1)(A), based on a 10-year repayment period,
when the borrower first made the election
described in section 493C(b)(1);
[(iv) makes payments of not less than the
payments required under a standard repayment
plan under section 428(b)(9)(A)(i) or
subsection (d)(1)(A) with a repayment period of
10 years; or
[(v) makes payments under an income
contingent repayment plan under subsection
(d)(1)(D).
[(8) Automatic recertification.--
[(A) In general.--The Secretary shall
establish and implement, with respect to any
borrower described in subparagraph (B),
procedures to--
[(i) use return information disclosed
under section 6103(l)(13) of the
Internal Revenue Code of 1986, pursuant
to approval provided under section 494,
to determine the repayment obligation
of the borrower without further action
by the borrower;
[(ii) allow the borrower (or the
spouse of the borrower), at any time,
to opt out of disclosure under such
section 6103(l)(13) and instead provide
such information as the Secretary may
require to determine the repayment
obligation of the borrower (or withdraw
from the repayment plan under this
subsection); and
[(iii) provide the borrower with an
opportunity to update the return
information so disclosed before the
determination of the repayment
obligation of the borrower.
[(B) Applicability.--Subparagraph (A) shall
apply to each borrower of a loan made under
this part who, on or after the date on which
the Secretary establishes procedures under such
subparagraph--
[(i) selects, or is required to repay
such loan pursuant to, an income-
contingent repayment plan; or
[(ii) recertifies income or family
size under such plan.]
(f) [Deferment.--] Deferment; Forbearance._
(1) Effect on principal and interest.--A borrower of
a loan made under this part who meets the requirements
described in paragraph (2) shall be eligible for a
deferment, during which periodic installments of
principal need not be paid, and interest--
(A) shall not accrue, in the case of a--
(i) Federal Direct Stafford Loan; or
(ii) a Federal Direct Consolidation
Loan that consolidated only Federal
Direct Stafford Loans, or a combination
of such loans and Federal Stafford
Loans for which the student borrower
received an interest subsidy under
section 428; or
(B) shall accrue and be capitalized or paid
by the borrower, in the case of a Federal
Direct PLUS Loan, a Federal Direct Unsubsidized
Stafford Loan, or a Federal Direct
Consolidation Loan not described in
subparagraph (A)(ii).
(2) Eligibility.--A borrower of a loan made under
this part shall be eligible for a deferment during any
period--
(A) during which the borrower--
(i) is carrying at least one-half the
normal full-time work load for the
course of study that the borrower is
pursuing, as determined by the eligible
institution (as such term is defined in
section 435(a)) the borrower is
attending; or
(ii) is pursuing a course of study
pursuant to a graduate fellowship
program approved by the Secretary, or
pursuant to a rehabilitation training
program for individuals with
disabilities approved by the Secretary,
except that no borrower shall be eligible for a
deferment under this subparagraph, or a loan
made under this part (other than a Federal
Direct PLUS Loan or a Federal Direct
Consolidation Loan), while serving in a medical
internship or residency program;
(B) [not in] subject to paragraph (7), not in
excess of 3 years during which the borrower is
seeking and unable to find full-time
employment;
(C) during which the borrower--
(i) is serving on active duty during
a war or other military operation or
national emergency; or
(ii) is performing qualifying
National Guard duty during a war or
other military operation or national
emergency,
and for the 180-day period following the
demobilization date for the service described
in clause (i) or (ii); or
(D) [not in] subject to paragraph (7), not in
excess of 3 years during which the Secretary
determines, in accordance with regulations
prescribed under section 435(o), that the
borrower has experienced or will experience an
economic hardship.
(3) Deferment for borrowers receiving cancer
treatment.--
(A) Effect on principal and interest.--A
borrower of a loan made under this part who
meets the requirements of subparagraph (B)
shall be eligible for a deferment, during which
periodic installments of principal need not be
paid, and interest shall not accrue.
(B) Eligibility.--A borrower of a loan made
under this part shall be eligible for a
deferment during--
(i) any period in which such borrower
is receiving treatment for cancer; and
(ii) the 6 months after such period.
(C) Applicability.--This paragraph shall
apply with respect to loans--
(i) made on or after the date of the
enactment of this paragraph; or
(ii) in repayment on the date of the
enactment of this paragraph.
(4) Deferment for dislocated military spouses.--
(A) Duration and effect on principal and
interest.--A borrower of a loan made under this
part who meets the requirements of subparagraph
(B) shall be eligible for a deferment for an
aggregate period of 180 days, during which
periodic installments of principal need not be
paid, and interest--
(i) shall not accrue, in the case of
a--
(I) Federal Direct Stafford
Loan; or
(II) a Federal Direct
Consolidation Loan that
consolidated only Federal
Direct Stafford Loans, or a
combination of such loans and
Federal Stafford Loans for
which the student borrower
received an interest subsidy
under section 428; or
(ii) shall accrue and be capitalized
or paid by the borrower, in the case of
a Federal Direct PLUS Loan, a Federal
Direct Unsubsidized Stafford Loan, or a
Federal Direct Consolidation Loan not
described in clause (i)(II).
(B) Eligibility.--A borrower of a loan made
under this part shall be eligible for a
deferment under subparagraph (A) if the
borrower--
(i) is the spouse of a member of the
Armed Forces serving on active duty;
and
(ii) has experienced a loss of
employment as a result of relocation to
accommodate a permanent change in duty
station of such member.
(C) Documentation and approval.--
(i) In general.--A borrower may
establish eligibility for a deferment
under subparagraph (A) by providing to
the Secretary--
(I) the documentation
described in clause (ii); or
(II) such other documentation
as the Secretary determines
appropriate.
(ii) Documentation.--The
documentation described in this clause
is--
(I) evidence that the
borrower is the spouse of a
member of the Armed Forces
serving on active duty;
(II) evidence that a military
permanent change of station
order was issued to such
member; and
(III)(aa) evidence that the
borrower is eligible for
unemployment benefits due to a
loss of employment resulting
from relocation to accommodate
such permanent change in duty
station; or
(bb) a written certification,
or an equivalent as approved by
the Secretary, that the
borrower is registered with a
public or private employment
agency due to a loss of
employment resulting from
relocation to accommodate such
permanent change in duty
station.
(5) Definition of borrower.--For the purpose of this
subsection, the term ``borrower'' means an individual
who is a new borrower on the date such individual
applies for a loan under this part for which the first
disbursement is made on or after July 1, 1993.
(6) Deferments for previous part b loan borrowers.--A
borrower of a loan made under this part, who at the
time such individual applies for such loan, has an
outstanding balance of principal or interest owing on
any loan made, insured, or guaranteed under part B of
title IV prior to July 1, 1993, shall be eligible for a
deferment under section 427(a)(2)(C) or section
428(b)(1)(M) as such sections were in effect on July
22, 1992.
(7) Sunset of unemployment and economic hardship
deferments.--A borrower who receives a loan made under
this part on or after July 1, 2025, shall not be
eligible to defer such loan under subparagraph (B) or
(D) of paragraph (2).
(8) Forbearance on loans made under this part on or
after july 1, 2025.--A borrower who receives a loan
made under this part on or after July 1, 2025--
(A) may only be eligible for a forbearance on
such loan pursuant to section 428(c)(3)(B) that
does not exceed 9 months during any 24-month
period; and
(B) in the case of a borrower who is serving
in a medical or dental internship or residency
program (as such program is described in
section 428(c)(3)(A)(i)(I)), may be eligible
for a forbearance on such loan pursuant to
428(c)(3)(A)(i)(I), during which--
(i) for the first 4 12-month
intervals, interest shall not accrue;
and
(ii) for any subsequent 12-month
interval, interest shall accrue.
(g) Federal Direct Consolidation Loans.--
(1) In general.--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).
(2) Separating joint consolidation loans.--
(A) In general.--
(i) Authorization.--A married couple,
or 2 individuals who were previously a
married couple, and who received a
joint consolidation loan as such
married couple under subparagraph (C)
of section 428C(a)(3) (as such
subparagraph was in effect on June 30,
2006), may apply to the Secretary, in
accordance with subparagraph (C) of
this paragraph, for each individual
borrower in the married couple (or
previously married couple) to receive a
separate Federal Direct Consolidation
Loan under this part.
(ii) Eligibility for borrowers in
default.--Notwithstanding any other
provision of this Act, a married
couple, or 2 individuals who were
previously a married couple, who are in
default on a joint consolidation loan
may be eligible to receive a separate
Federal Direct Consolidation Loan under
this part in accordance with this
paragraph.
(B) Secretarial requirements.--
Notwithstanding section 428C(a)(3)(A) or any
other provision of law, for each individual
borrower who applies under subparagraph (A),
the Secretary shall--
(i) make a separate Federal Direct
Consolidation Loan under this part
that--
(I) shall be for an amount
equal to the product of--
(aa) the unpaid
principal and accrued
unpaid interest of the
joint consolidation
loan (as of the date
that is the day before
such separate
consolidation loan is
made) and any
outstanding charges and
fees with respect to
such loan; and
(bb) the percentage
of the joint
consolidation loan
attributable to the
loans of the individual
borrower for whom such
separate consolidation
loan is being made, as
determined--
(AA) on the
basis of the
loan
obligations of
such borrower
with respect to
such joint
consolidation
loan (as of the
date such joint
consolidation
loan was made);
or
(BB) in the
case in which
both borrowers
request, on the
basis of
proportions
outlined in a
divorce decree,
court order, or
settlement
agreement; and
(II) has the same rate of
interest as the joint
consolidation loan (as of the
date that is the day before
such separate consolidation
loan is made); and
(ii) in a timely manner, notify each
individual borrower that the joint
consolidation loan had been repaid and
of the terms and conditions of their
new loans.
(C) Application for separate direct
consolidation loan.--
(i) Joint application.--Except as
provided in clause (ii), to receive
separate consolidation loans under this
part, both individual borrowers in a
married couple (or previously married
couple) shall jointly apply under
subparagraph (A).
(ii) Separate application.--An
individual borrower in a married couple
(or previously married couple) may
apply for a separate consolidation loan
under subparagraph (A) separately and
without regard to whether or when the
other individual borrower in the
married couple (or previously married
couple) applies under subparagraph (A),
in a case in which--
(I) the individual borrower
certifies to the Secretary that
such borrower--
(aa) has experienced
an act of domestic
violence (as defined in
section 40002 of the
Violence Against Women
Act of 1994 (34 U.S.C.
12291) from the other
individual borrower;
(bb) has experienced
economic abuse (as
defined in section
40002 of the Violence
Against Women Act of
1994 (34 U.S.C. 12291)
from the other
individual borrower; or
(cc) is unable to
reasonably reach or
access the loan
information of the
other individual
borrower; or
(II) the Secretary determines
that authorizing each
individual borrower to apply
separately under subparagraph
(A) would be in the best fiscal
interests of the Federal
Government.
(iii) Remaining obligation from
separate application.--In the case of
an individual borrower who receives a
separate consolidation loan due to the
circumstances described in clause (ii),
the other non-applying individual
borrower shall become solely liable for
the remaining balance of the joint
consolidation loan.
(3) Consolidation loans made on or after july 1,
2026.--Notwithstanding subsections (b)(5), (c)(2), and
(c)(3)(A) and (B) of section 428C, a Federal Direct
Consolidation Loan offered to a borrower under this
part on or after July 1, 2026, may only be repaid
pursuant to a repayment plan described in subsection
(d)(7)(A)(i) or (ii) of this section, as applicable,
and the repayment schedule of such a Consolidation Loan
shall be determined in accordance with such repayment
plan.
(h) Borrower Defenses.--Notwithstanding any other provision
of State or Federal law, the Secretary shall specify in
regulations which acts or omissions of an institution of higher
education a borrower may assert as a defense to repayment of a
loan made under this part, except that in no event may a
borrower recover from the Secretary, in any action arising from
or relating to a loan made under this part, an amount in excess
of the amount such borrower has repaid on such loan.
(i) Loan Application and Promissory Note.--The common
financial reporting form required in section 483(a)(1) shall
constitute the application for loans made under this part
(other than a Federal Direct PLUS loan). The Secretary shall
develop, print, and distribute to participating institutions a
standard promissory note and loan disclosure form.
(j) Loan Disbursement.--
(1) In general.--Proceeds of loans to students under
this part shall be applied to the student's account for
tuition and fees, and, in the case of institutionally
owned housing, to room and board. Loan proceeds that
remain after the application of the previous sentence
shall be delivered to the borrower by check or other
means that is payable to and requires the endorsement
or other certification by such borrower.
(2) Payment periods.--The Secretary shall establish
periods for the payments described in paragraph (1) in
a manner consistent with payment of Federal Pell Grants
under subpart 1 of part A of this title.
(k) Fiscal Control and Fund Accountability.--
(1) In general.--(A) An institution shall maintain
financial records in a manner consistent with records
maintained for other programs under this title.
(B) Except as otherwise required by regulations of
the Secretary an institution may maintain loan funds
under this part in the same account as other Federal
student financial assistance.
(2) Payments and refunds.--Payments and refunds shall
be reconciled in a manner consistent with the manner
set forth for the submission of a payment summary
report required of institutions participating in the
program under subpart 1 of part A, except that nothing
in this paragraph shall prevent such reconciliations on
a monthly basis.
(3) Transaction histories.--All transaction histories
under this part shall be maintained using the same
system designated by the Secretary for the provision of
Federal Pell Grants under subpart 1 of part A of this
title.
(l) Armed Forces and NOAA Commissioned Officer Corps Student
Loan Interest Payment Programs.--
(1) Authority.--Using funds received by transfer to
the Secretary under section 2174 of title 10, United
States Code, or section 268 of the National Oceanic and
Atmospheric Administration Commissioned Officer Corps
Act of 2002 for the payment of interest on a loan made
under this part to a member of the Armed Forces or an
officer in the commissioned officer corps of the
National Oceanic and Atmospheric Administration,
respectively, 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.
(2) Forbearance.--During the period in which the
Secretary is making payments on a loan under paragraph
(1), the Secretary shall grant the borrower
forbearance, in the form of a temporary cessation of
all payments on the loan other than the payments of
interest on the loan that are made under that
paragraph.
(m) Repayment Plan for Public Service Employees.--
(1) In general.--The Secretary shall cancel the
balance of interest and principal due, in accordance
with paragraph (2), on any eligible Federal Direct Loan
not in default for a borrower who--
(A) has made 120 monthly payments on the
eligible Federal Direct Loan after October 1,
2007, pursuant to any one or a combination of
the following--
(i) payments under an income-based
repayment plan under section 493C;
(ii) payments under a standard
repayment plan under subsection
(d)(1)(A), based on a 10-year repayment
period;
(iii) monthly payments under a
repayment plan under subsection (d)(1)
or (g) of not less than the monthly
amount calculated under subsection
(d)(1)(A), based on a 10-year repayment
period[; or];
(iv) payments under an income
contingent repayment plan under
subsection (d)(1)(D)[; and] (as in
effect on the day before the date of
the repeal of subsection (e) of this
section); or
(v) on-time payments under the
Repayment Assistance Plan under section
455(q); and
(B)(i) is employed in a public service job at
the time of such forgiveness; and
(ii) has been employed in a public service
job during the period in which the borrower
makes each of the 120 payments described in
subparagraph (A).
(2) Loan cancellation amount.--After the conclusion
of the employment period described in paragraph (1),
the Secretary shall cancel the obligation to repay the
balance of principal and interest due as of the time of
such cancellation, on the eligible Federal Direct Loans
made to the borrower under this part.
(3) Definitions.--In this subsection:
(A) Eligible federal direct loan.--The term
``eligible Federal Direct Loan'' means a
Federal Direct Stafford Loan, Federal Direct
PLUS Loan, or Federal Direct Unsubsidized
Stafford Loan, or a Federal Direct
Consolidation Loan.
(B) Public service job.--[The term]
(i) In general._The term ``public
service job'' means--
[(i)] (I) a full-time job in
emergency management,
government (excluding time
served as a member of
Congress), military service,
public safety, law enforcement,
public health (including
nurses, nurse practitioners,
nurses in a clinical setting,
and full-time professionals
engaged in health care
practitioner occupations and
health care support
occupations, as such terms are
defined by the Bureau of Labor
Statistics), public education,
social work in a public child
or family service agency,
public interest law services
(including prosecution or
public defense or legal
advocacy on behalf of low-
income communities at a
nonprofit organization), early
childhood education (including
licensed or regulated
childcare, Head Start, and
State funded prekindergarten),
public service for individuals
with disabilities, public
service for the elderly, public
library sciences, school-based
library sciences and other
school-based services, or at an
organization that is described
in section 501(c)(3) of the
Internal Revenue Code of 1986
and exempt from taxation under
section 501(a) of such Code; or
[(ii)] (II) teaching as a
full-time faculty member at a
Tribal College or University as
defined in section 316(b) and
other faculty teaching in high-
needs subject areas or areas of
shortage (including nurse
faculty, foreign language
faculty, and part-time faculty
at community colleges), as
determined by the Secretary.
(ii) Exclusion.--The term ``public
service job'' does not include time
served in a medical or dental
internship or residency program (as
such program is described in section
428(c)(3)(A)(i)(I)) by an individual
who, as of June 30, 2025, has not
borrowed a Federal Direct PLUS Loan or
a Federal Direct Unsubsidized Stafford
Loan for a program of study that awards
a graduate credential upon completion
of such program.
(4) Ineligibility for double benefits.--No borrower
may, for the same service, receive a reduction of loan
obligations under both this subsection and section
428J, 428K, 428L, or 460.
(n) Identity Fraud Protection.--The Secretary shall take such
steps as may be necessary to ensure that monthly Federal Direct
Loan statements and other publications of the Department do not
contain more than four digits of the Social Security number of
any individual.
(o) No Accrual of Interest for Active Duty Service Members.--
(1) In general.--Notwithstanding any other provision
of this part and in accordance with paragraphs (2) and
(4), interest shall not accrue for an eligible military
borrower on a loan made under this part for which the
first disbursement is made on or after October 1, 2008.
(2) Consolidation loans.--In the case of any
consolidation loan made under this part that is
disbursed on or after October 1, 2008, interest shall
not accrue pursuant to this subsection only on such
portion of such loan as was used to repay a loan made
under this part for which the first disbursement is
made on or after October 1, 2008.
(3) Eligible military borrower.--In this subsection,
the term ``eligible military borrower'' means an
individual who--
(A)(i) is serving on active duty during a war
or other military operation or national
emergency; or
(ii) is performing qualifying National Guard
duty during a war or other military operation
or national emergency; and
(B) is serving in an area of hostilities in
which service qualifies for special pay under
section 310, or paragraph (1) or (3) of section
351(a), of title 37, United States Code.
(4) Limitation.--An individual who qualifies as an
eligible military borrower under this subsection may
receive the benefit of this subsection for not more
than 60 months.
(p) Disclosures.--Each institution of higher education with
which the Secretary has an agreement under section 453, and
each contractor with which the Secretary has a contract under
section 456, shall, with respect to loans under this part and
in accordance with such regulations as the Secretary shall
prescribe, comply with each of the requirements under section
433 that apply to a lender with respect to a loan under part B.
(q) Repayment Assistance Plan.--
(1) In general.--Notwithstanding any other provision
of this Act, beginning on July 1, 2026, the Secretary
shall carry out an income-based repayment plan (to be
known as the ``Repayment Assistance Plan''), that shall
have the following terms and conditions:
(A) The total monthly repayment amount owed
by a borrower for all of the loans of the
borrower that are repaid pursuant to the
Repayment Assistance Plan shall be equal to the
applicable monthly payment of a borrower
calculated under paragraph (3)(B), except that
the borrower may not be precluded from repaying
an amount that exceeds such amount for any
month.
(B) The Secretary shall apply the borrower's
applicable monthly payment under this paragraph
first toward interest due on each such loan,
next toward any fees due on each loan, and then
toward the principal of each loan.
(C) Any principal due and not paid under
subparagraph (B) or paragraph (2)(B) shall be
deferred.
(D) A borrower who is not in a period of
deferment or forbearance shall make an
applicable monthly payment for each month until
the earlier of--
(i) the date on which the outstanding
balance of principal and interest due
on all of the loans of the borrower
that are repaid pursuant to the
Repayment Assistance Plan is $0; or
(ii) the date on which the borrower
has made 360 qualifying monthly
payments.
(E) The Secretary shall repay or cancel any
outstanding balance of principal and interest
due on a loan made under this part to a
borrower--
(i) who, for any period of time,
participated in the Repayment
Assistance Plan under this subsection;
(ii) whose most recent payment for
such loan prior to the loan
cancellation under this subparagraph
was made under such Repayment
Assistance Plan; and
(iii) who has made 360 qualifying
monthly payments on such loan.
(F) For the purposes of this subsection, the
term ``qualifying monthly payment'' means any
of the following:
(i) An on-time applicable monthly
payment under this subsection.
(ii) An on-time monthly payment under
the standard repayment plan under
subsection (d)(7)(A)(i) of not less
than the monthly payment required under
such plan.
(iii) A monthly payment under any
repayment plan of not less than the
monthly payment that would be required
under a standard repayment plan under
section 455(d)(1)(A) with a repayment
period of 10 years.
(iv) A monthly payment under section
493C of not less than the monthly
payment required under such section,
including a monthly payment equal to
the minimum payment amount permitted
under such section.
(v) A monthly payment made before the
date of enactment of this subsection
under an income-contingent repayment
plan carried out under section
455(d)(1)(D) (or under an alternative
repayment plan in lieu of repayment
under such an income-contingent
repayment plan, if placed in such an
alternative repayment plan by the
Secretary) of not less than the monthly
payment required under such a plan,
including a monthly payment equal to
the minimum payment amount permitted
under such a plan.
(vi) A month when the borrower did
not make a payment because the borrower
was in deferment due to an economic
hardship described in section 435(o).
(vii) A month that ended before the
date of enactment of this subsection
when the borrower did not make a
payment because the borrower was in a
period deferment or forbearance
described in section 685.209(k)(4)(iv)
of title 34, Code of Federal
Regulations (as in effect on the date
of enactment of this subsection).
(G) With respect to carrying out section
494(a)(2) for the Repayment Assistance Plan, an
individual may elect to opt out of the
disclosures required under section
494(a)(2)(A)(ii) in accordance with the
procedures established under section
493C(c)(2)(B).
(2) Balance assistance for distressed borrowers.--
(A) Interest subsidy.--With respect to a
borrower of a loan made under this part, for
each month for which such a borrower makes an
on-time applicable monthly payment required
under paragraph (1)(A) and such monthly payment
is insufficient to pay the total amount of
interest that accrues for the month on all
loans of the borrower repaid pursuant to the
Repayment Assistance Plan under this
subsection, the amount of interest accrued and
not paid for the month shall not be charged to
the borrower.
(B) Matching principal payment.--With respect
to a borrower of a loan made under this part
and not in a period of deferment or
forbearance, for each month for which a
borrower makes an on-time applicable monthly
payment required under paragraph (1)(A) and
such monthly payment reduces the total
outstanding principal balance of all loans of
the borrower repaid pursuant to the Repayment
Assistance Plan under this subsection by less
than $50, the Secretary shall reduce such total
outstanding principal balance of the borrower
by an amount that is equal to--
(i) the amount that is the lesser
of--
(I) $50; or
(II) the total amount paid by
the borrower for such month
pursuant to paragraph (1)(A),
minus
(ii) the total amount paid by the
borrower for such month pursuant to
paragraph (1)(A) that is applied to
such total outstanding principal
balance.
(3) Definitions.--In this paragraph:
(A) Adjusted gross income.--The term
``adjusted gross income'', when used with
respect to a borrower, means the adjusted gross
income (as such term is defined in section 62
of the Internal Revenue Code of 1986) of the
borrower (and the borrower's spouse, as
applicable) for the most recent taxable year,
except that, in the case of a married borrower
who files a separate Federal income tax return,
the term does not include the adjusted gross
income of the borrower's spouse.
(B) Applicable monthly payment.--
(i) In general.--Except as provided
in clause (ii) or (iii), the term
``applicable monthly payment'' means,
when used with respect to a borrower,
the amount equal to--
(I) the applicable base
payment of the borrower,
divided by 12; minus
(II) $50 for each dependent
child of the borrower.
(ii) Minimum amount.--In the case of
a borrower with an applicable monthly
payment amount calculated under clause
(i) that is less than $10, the
applicable monthly payment of the
borrower shall be $10.
(iii) Final payment.--In the case of
a borrower whose total outstanding
balance of principal and interest on
all of the loans of the borrower that
are repaid pursuant to the Repayment
Assistance Plan is less than the
applicable monthly payment calculated
pursuant to clause (i) or (ii), as
applicable, then the applicable monthly
payment of the borrower shall be the
total outstanding balance of principal
and interest on all such loans.
(iv) Base payment.--The amount of the
applicable base payment for a borrower
with an adjusted gross income of--
(I) not more than $10,000, is
$120;
(II) more than $10,000 and
not more than $20,000, is 1
percent of such adjusted gross
income;
(III) more than $20,000 and
not more than $30,000, is 2
percent of such adjusted gross
income;
(IV) more than $30,000 and
not more than $40,000, is 3
percent of such adjusted gross
income;
(V) more than $40,000 and not
more than $50,000, is 4 percent
of such adjusted gross income;
(VI) more than $50,000 and
not more than $60,000, is 5
percent of such adjusted gross
income;
(VII) more than $60,000 and
not more than $70,000, is 6
percent of such adjusted gross
income;
(VIII) more than $70,000 and
not more than $80,000, is 7
percent of such adjusted gross
income;
(IX) more than $80,000 and
not more than $90,000, is 8
percent of such adjusted gross
income;
(X) more than $90,000 and not
more than $100,000, is 9
percent of such adjusted gross
income; and
(XI) more than $100,000, is
10 percent of such adjusted
gross income.
(v) Dependent child of the
borrower.--For the purposes of this
paragraph, the term ``dependent child
of the borrower'' means an individual
who--
(I) is under 17 years of age;
and
(II) is the borrower's
dependent child or another
person who lives with and
receives more than one-half of
their support from the
borrower.
* * * * * * *
SEC. 458. FUNDS FOR ADMINISTRATIVE EXPENSES.
(a) Administrative Expenses.--
[(1) Mandatory funds for fiscal year 2006.--For
fiscal year 2006, there shall be available to the
Secretary, from funds not otherwise appropriated, funds
to be obligated for--
[(A) administrative costs under this part and
part B, including the costs of the direct
student loan programs under this part; and
[(B) account maintenance fees payable to
guaranty agencies under part B and calculated
in accordance with subsections (b) and (c),
not to exceed (from such funds not otherwise
appropriated) $820,000,000 in fiscal year 2006.]
(1) Additional mandatory funds for fiscal years 2025
and 2026.--For each of the fiscal years 2025 and 2026
there shall be available to the Secretary (in addition
to any other amounts appropriated under any
appropriations Act for administrative costs under this
part and part B and out of any money in the Treasury
not otherwise appropriated) funds to be obligated for
administrative costs under this part and part B,
including the costs of the direct student loan programs
under this part, not to exceed $500,000,000 in each
such fiscal year.
(3) Authorization for administrative costs beginning
in fiscal years 2007 through 2014.--For each of the
fiscal years 2007 through 2014, there are authorized to
be appropriated such sums as may be necessary for
administrative costs under this part and part B,
including the costs of the direct student loan programs
under this part.
(4) Continuing mandatory funds for account
maintenance fees.--For each of the fiscal years 2007
through 2021, there shall be available to the
Secretary, from funds not otherwise appropriated, funds
to be obligated for account maintenance fees payable to
guaranty agencies under part B and calculated in
accordance with subsection (b).
(5) Account maintenance fees.--Account maintenance
fees under paragraph (3) shall be paid quarterly and
deposited in the Agency Operating Fund established
under section 422B.
(6) Technical assistance to institutions of higher
education.--
(A) Provision of assistance.--The Secretary
shall provide institutions of higher education
participating, or seeking to participate, in
the loan programs under this part with
technical assistance in establishing and
administering such programs.
(B) Funds.--There are authorized to be
appropriated, and there are appropriated, to
carry out this paragraph (in addition to any
other amounts appropriated to carry out this
paragraph and out of any money in the Treasury
not otherwise appropriated), $50,000,000 for
fiscal year 2010.
(C) Definition.--In this paragraph, the term
``assistance'' means the provision of technical
support, training, materials, technical
assistance, and financial assistance.
(7) Additional payments.--
(A) Provision of assistance.--The Secretary
shall provide payments to loan servicers for
retaining jobs at locations in the United
States where such servicers were operating
under part B on January 1, 2010.
(B) Funds.--There are authorized to be
appropriated, and there are appropriated, to
carry out this paragraph (in addition to any
other amounts appropriated to carry out this
paragraph and out of any money in the Treasury
not otherwise appropriated), $25,000,000 for
each of the fiscal years 2010 and 2011.
(8) Carryover.--The Secretary may carry over funds
made available under this section to a subsequent
fiscal year.
(b) Calculation Basis.--Account maintenance fees payable to
guaranty agencies under subsection (a)(4) shall be calculated
on the basis of 0.06 percent of the original principal amount
of outstanding loans on which insurance was issued under part
B.
(c) Budget Justification.--No funds may be expended under
this section unless the Secretary includes in the Department of
Education's annual budget justification to Congress a detailed
description of the specific activities for which the funds made
available by this section have been used in the prior and
current years (if applicable), the activities and costs planned
for the budget year, and the projection of activities and costs
for each remaining year for which administrative expenses under
this section are made available.
* * * * * * *
Part E--Federal Perkins Loans
* * * * * * *
SEC. 464. TERMS OF LOANS.
(a) Terms and Conditions.--(1) Loans from any student loan
fund established pursuant to an agreement under section 463 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.
(2)(A) Except as provided in paragraph (4), the total of
loans made to a student in any academic year or its equivalent
by an institution of higher education from a loan fund
established pursuant to an agreement under this part shall not
exceed--
(i) $5,500, in the case of a student who has not
successfully completed a program of undergraduate
education; or
(ii) $8,000, in the case of a graduate or
professional student (as defined in regulations issued
by the Secretary).
(B) Except as provided in paragraph (4), the aggregate unpaid
principal amount for all loans made to a student by
institutions of higher education from loan funds established
pursuant to agreements under this part may not exceed--
(i) $60,000, in the case of any graduate or
professional student (as defined by regulations issued
by the Secretary, and including any loans from such
funds made to such person before such person became a
graduate or professional student);
(ii) $27,500, in the case of a student who has
successfully completed 2 years of a program of
education leading to a bachelor's degree but who has
not completed the work necessary for such a degree
(determined under regulations issued by the Secretary),
and including any loans from such funds made to such
person before such person became such a student; and
(iii) $11,000, in the case of any other student.
(3) Regulations of the Secretary under paragraph (1) shall be
designed to prevent the impairment of the capital student loan
funds to the maximum extent practicable and with a view toward
the objective of enabling the student to complete his course of
study.
(4) In the case of a program of study abroad that is approved
for credit by the home institution at which a student is
enrolled and that has reasonable costs in excess of the home
institution's budget, the annual and aggregate loan limits for
the student may exceed the amounts described in paragraphs
(2)(A) and (2)(B) by 20 percent.
(b) Demonstration of Need and Eligibility Required.--(1) A
loan 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).
(2) If the institution's capital contribution under section
462 is directly or indirectly based in part on the financial
need demonstrated by students who are (A) attending the
institution less than full time, or (B) independent students,
then a reasonable portion of the loans made from the
institution's student loan fund containing the contribution
shall be made available to such students.
(c) Contents of Loan Agreement.--(1) Any agreement between an
institution and a student for a loan from a student loan fund
assisted under this part--
(A) shall be evidenced by note or other written
instrument which, except as provided in paragraph (2),
provides for repayment of the principal amount of the
loan, together with interest thereon, in equal
installments (or, if the borrower so requests, in
graduated periodic installments determined in
accordance with such schedules as may be approved by
the Secretary) payable quarterly, bimonthly, or
monthly, at the option of the institution, over a
period beginning nine months after the date on which
the student ceases to carry, at an institution of
higher education or a comparable institution outside
the United States approved for this purpose by the
Secretary, at least one-half the normal full-time
academic workload, and ending 10 years and 9 months
after such date except that such period may begin
earlier than 9 months after such date upon the request
of the borrower;
(B) shall include provision for acceleration of
repayment of the whole, or any part, of such loan, at
the option of the borrower;
(C)(i) may provide, at the option of the institution,
in accordance with regulations of the Secretary, that
during the repayment period of the loan, payments of
principal and interest by the borrower with respect to
all outstanding loans made to the student from a
student loan fund assisted under this part shall be at
a rate equal to not less than $40 per month, except
that the institution may, subject to such regulations,
permit a borrower to pay less than $40 per month for a
period of not more than one year where necessary to
avoid hardship to the borrower, but without extending
the 10-year maximum repayment period provided for in
subparagraph (A) of this paragraph; and
(ii) may provide that the total payments by a
borrower for a monthly or similar payment period with
respect to the aggregate of all loans held by the
institution may, when the amount of a monthly or other
similar payment is not a multiple of $5, be rounded to
the next highest whole dollar amount that is a multiple
of $5;
(D) shall provide that the loan shall bear interest,
on the unpaid balance of the loan, at the rate of 5
percent per year in the case of any loan made on or
after October 1, 1981, except that no interest shall
accrue (i) prior to the beginning date of repayment
determined under paragraph (2)(A)(i), or (ii) during
any period in which repayment is suspended by reason of
paragraph (2);
(E) shall provide that the loan shall be made without
security and without endorsement;
(F) shall provide that the liability to repay the
loan shall be cancelled--
(i) upon the death of the borrower;
(ii) if the borrower becomes permanently and
totally disabled as determined in accordance
with regulations of the Secretary;
(iii) if the borrower is unable to engage in
any substantial gainful activity by reason of
any medically determinable physical or mental
impairment that can be expected to result in
death, has lasted for a continuous period of
not less than 60 months, or can be expected to
last for a continuous period of not less than
60 months; or
(iv) if the borrower is determined by the
Secretary of Veterans Affairs to be
unemployable due to a service-connected
disability;
(G) shall provide that no note or evidence of
obligation may be assigned by the lender, except upon
the transfer of the borrower to another institution
participating under this part (or, if not so
participating, is eligible to do so and is approved by
the Secretary for such purpose), to such institution,
and except as necessary to carry out section 463(a)(6);
(H) pursuant to regulations of the Secretary, shall
provide for an assessment of a charge with respect to
the loan for failure of the borrower to pay all or part
of an installment when due, which shall include the
expenses reasonably incurred in attempting collection
of the loan, to the extent permitted by the Secretary,
except that no charge imposed under this subparagraph
shall exceed 20 percent of the amount of the monthly
payment of the borrower; and
(I) shall contain a notice of the system of
disclosure of information concerning default on such
loan to consumer reporting agencies under section
463(c).
(2)(A) No repayment of principal of, or interest on, any loan
from a student loan fund assisted under this part shall be
required during any period--
(i) during which the borrower--
(I) is pursuing at least a half-time course
of study as determined by an eligible
institution; or
(II) is pursuing a course of study pursuant
to a graduate fellowship program approved by
the Secretary, or pursuant to a rehabilitation
training program for disabled individuals
approved by the Secretary,
except that no borrower shall be eligible for a
deferment under this clause, or loan made under this
part while serving in a medical internship or residency
program;
(ii) not in excess of 3 years during which the
borrower is seeking and unable to find full-time
employment;
(iii) during which the borrower--
(I) is serving on active duty during a war or
other military operation or national emergency;
or
(II) is performing qualifying National Guard
duty during a war or other military operation
or national emergency,
and for the 180-day period following the demobilization
date for the service described in subclause (I) or
(II);
(iv) not in excess of 3 years for any reason which
the lender determines, in accordance with regulations
prescribed by the Secretary under section 435(o), has
caused or will cause the borrower to have an economic
hardship;
(v) during which the borrower is engaged in service
described in section 465(a)(2); or
(vi) during which the borrower is receiving
treatment for cancer and the 6 months after
such period;
and provides that any such period shall not be included in
determining the 10-year period described in subparagraph (A) of
paragraph (1).
(B) No repayment of principal of, or interest on, any loan
for any period described in subparagraph (A) shall begin until
6 months after the completion of such period.
(C) An individual with an outstanding loan balance who meets
the eligibility criteria for a deferment described in
subparagraph (A) as in effect on the date of enactment of this
subparagraph shall be eligible for deferment under this
paragraph notwithstanding any contrary provision of the
promissory note under which the loan or loans were made, and
notwithstanding any amendment (or effective date provision
relating to any amendment) to this section made prior to the
date of such deferment.
(3)(A) The Secretary is authorized, when good cause is shown,
to extend, in accordance with regulations, the 10-year maximum
repayment period provided for in subparagraph (A) of paragraph
(1) with respect to individual loans.
(B) Pursuant to uniform criteria established by the
Secretary, the repayment period for any student borrower who
during the repayment period 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 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 may elect--
(A) to add the amount of any charge imposed under
paragraph (1)(H) to the principal amount of the loan as
of the first day after the day on which the installment
was due and to notify the borrower of the assessment of
the charge; or
(B) to make the amount of the charge payable to the
institution not later than the due date of the next
installment.
(6) Requests for deferment of repayment of loans 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.
(7) There shall be excluded from the 9-month period that
begins on the date on which a student ceases to carry at least
one-half the normal full-time academic workload (as described
in paragraph (1)(A)) any period not to exceed 3 years during
which a borrower who is a member of a reserve component of the
Armed Forces named in section 10101 of title 10, United States
Code, is called or ordered to active duty for a period of more
than 30 days (as defined in section 101(d)(2) of such title).
Such period of exclusion shall include the period necessary to
resume enrollment at the borrower's next available regular
enrollment period.
(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
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, 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) the borrower's debt burden equals or exceeds 20
percent of such borrower's gross income;
(B) the institution determines that the borrower
should qualify for forbearance for other reasons; or
(C) the borrower is eligible for interest payments to
be made on such loan for service in the Armed Forces
under section 2174 of title 10, United States Code,
and, pursuant to that eligibility, the interest on such
loan is being paid under subsection (j), except that
the form of a forbearance under this paragraph shall be
a temporary cessation of all payments on the loan other
than payments of interest on the loan that are made
under subsection (j).
(2) For the purpose of paragraph (1), the terms of
forbearance agreed to by the parties shall be documented by--
(A) confirming the agreement of the borrower by
notice to the borrower from the institution of higher
education; and
(B) recording the terms in the borrower's file.
(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,
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).
(2) Assignment.--A borrower whose loan has been
discharged pursuant to this subsection shall be deemed
to have assigned to the United States the right to a
loan refund in an amount that does not exceed the
amount discharged against the institution and the
institution's affiliates and principals.
(3) Eligibility for additional assistance.--The
period during which a student was unable to complete a
course of study due to the closing of the institution
shall not be considered for purposes of calculating the
student's period of eligibility for additional
assistance under this title.
(4) Special rule.--A borrower whose loan has been
discharged pursuant to this subsection shall not be
precluded, because of that discharge, from receiving
additional grant, loan, or work assistance under this
title for which the borrower would be otherwise
eligible (but for the default on the discharged loan).
The amount discharged under this subsection shall be
treated as an amount canceled under section 465(a).
(5) Reporting.--The Secretary or institution, as the
case may be, shall report to consumer reporting
agencies with respect to loans that have been
discharged pursuant to this subsection.
(h) Rehabilitation of Loans.--
(1) Rehabilitation.--
(A) In general.--If the borrower of a loan
made under this part 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.
(B) Comparable conditions.--As long as the
borrower continues to make scheduled repayments
on a loan rehabilitated under this paragraph,
the rehabilitated loan shall be subject to the
same terms and conditions, and qualify for the
same benefits and privileges, as other loans
made under this part.
(C) Additional assistance.--The borrower of a
rehabilitated loan shall not be precluded by
section 484 from receiving additional grant,
loan, or work assistance under this title (for
which the borrower is otherwise eligible) on
the basis of defaulting on the loan prior to
such rehabilitation.
(D) Limitations.--A borrower only [once]
twice may obtain the benefit of this paragraph
with respect to rehabilitating a loan under
this part.
(2) Restoration of eligibility.--If the borrower of a
loan made under this part 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.
(i) Incentive Repayment Program.--
(1) In general.--Each institution of higher education
may establish, with the approval of the Secretary, an
incentive repayment program designed to reduce default
and to replenish student loan funds established under
this part. Each such incentive repayment program may--
(A) offer a reduction of the interest rate on
a loan on which the borrower has made 48
consecutive, monthly repayments, but in no
event may the rate be reduced by more than 1
percent;
(B) provide for a discount on the balance
owed on a loan on which the borrower pays the
principal and interest in full prior to the end
of the applicable repayment period, but in no
event may the discount exceed 5 percent of the
unpaid principal balance due on the loan at the
time the early repayment is made; and
(C) include such other incentive repayment
options as the institution determines will
carry out the objectives of this subsection.
(2) Limitation.--No incentive repayment option under
an incentive repayment program authorized by this
subsection may be paid for with Federal funds,
including any Federal funds from the student loan fund,
or with institutional funds from the student loan fund.
(j) Armed Forces and NOAA Commissioned Officer Corps Student
Loan Interest Payment Programs.--
(1) Authority.--Using funds received by transfer to
the Secretary under section 2174 of title 10, United
States Code, or section 268 of the National Oceanic and
Atmospheric Administration Commissioned Officer Corps
Act of 2002 for the payment of interest on a loan made
under this part to a member of the Armed Forces or an
officer in the commissioned officer corps of the
National Oceanic and Atmospheric Administration,
respectively, 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.
(2) Forbearance.--During the period in which the
Secretary is making payments on a loan under paragraph
(1), the institution of higher education shall grant
the borrower forbearance in accordance with subsection
(e)(1)(C).
(k) The Secretary may develop such additional safeguards as
the Secretary determines necessary to prevent fraud and abuse
in the cancellation of liability under subsection (c)(1)(F).
Notwithstanding subsection (c)(1)(F), the Secretary may
promulgate regulations to resume collection on loans cancelled
under subsection (c)(1)(F) in any case in which--
(1) a borrower received a cancellation of liability
under subsection (c)(1)(F) and after the cancellation
the borrower--
(A) receives a loan made, insured, or
guaranteed under this title; or
(B) has earned income in excess of the
poverty line; or
(2) the Secretary determines necessary.
* * * * * * *
PART F--NEED ANALYSIS
SEC. 471. AMOUNT OF NEED.
Except as otherwise provided therein, for award year 2024-
2025 and each subsequent award year, the amount of need of any
student for financial assistance under this title (except
subpart 1 or 2 of part A) is equal to--
[(1) the cost of attendance of such student, minus]
(1)(A) for award year 2025-2026, the cost of
attendance of such student; or
(B) for award year 2026-2027, and each subsequent
award year, the median cost of college of the program
of study of such student, minus
(2) the student aid index (as defined in section 473)
for such student, minus
(3) other financial assistance not received under
this title (as defined in section 480(i)).
SEC. 472. COST OF ATTENDANCE.
(a) In General.--For the purpose of this title, the term
``cost of attendance'' means--
(1) tuition and fees normally assessed a student
[carrying the same academic workload] enrolled in the
same program of study as determined by the institution;
(2) an allowance for books, course materials,
supplies, and equipment, which shall include all such
costs required of all such students in the [same course
of study] same program of study, including a reasonable
allowance for the documented rental or upfront purchase
of a personal computer, as determined by the
institution;
(3) an allowance for transportation, which may
include transportation between campus, residences, and
place of work, as determined by the institution;
(4) an allowance for miscellaneous personal expenses,
for a student attending the institution on at least a
half-time basis, as determined by the institution;
(5) an allowance for living expenses, including food
and housing costs, to be incurred by the student
attending the institution on at least a half-time
basis, as determined by the institution, which shall
include--
(A) for a student electing institutionally
owned or operated food services, such as board
or meal plans, a standard allowance for such
services that provides the equivalent of three
meals each day;
(B) for a student not electing
institutionally owned or operated food
services, such as board or meal plans, a
standard allowance for purchasing food off
campus that provides the equivalent of three
meals each day;
(C) for a student without dependents residing
in institutionally owned or operated housing, a
standard allowance determined by the
institution based on the average or median
amount assessed to such residents for housing
charges, whichever is greater;
(D) for a student with dependents residing in
institutionally owned or operated housing, a
standard allowance determined by the
institution based on the average or median
amount assessed to such residents for housing
charges, whichever is greater;
(E) for a student living off campus, and not
in institutionally owned or operated housing, a
standard allowance for rent or other housing
costs;
(F) for a dependent student residing at home
with parents, a standard allowance that shall
not be zero determined by the institution;
(G) for a student living in housing located
on a military base or for which a basic
allowance is provided under section 403(b) of
title 37, United States Code, a standard
allowance for food based upon such student's
choice of purchasing food on-campus or off-
campus (determined respectively in accordance
with subparagraph (A) or (B)), but not for
housing costs; and
(H) for all other students, an allowance
based on the expenses reasonably incurred by
such students for housing and food;
(6) for a student engaged in a program of study by
correspondence, only tuition and fees and, if required,
books and supplies, travel, and housing and food costs
incurred specifically in fulfilling a required period
of residential training;
(7) for a confined or incarcerated student, only
tuition, fees, books, course materials, supplies,
equipment, and the cost of obtaining a license,
certification, or a first professional credential in
accordance with paragraph (14);
(8) for a student enrolled in an academic program in
a program of study abroad approved for credit by the
student's home institution, reasonable costs associated
with such study (as determined by the institution at
which such student is enrolled);
(9) for a student with one or more dependents, an
allowance based on the estimated actual expenses
incurred for such dependent care, based on the number
and age of such dependents, except that--
(A) such allowance shall not exceed the
reasonable cost in the community in which such
student resides for the kind of care provided;
and
(B) the period for which dependent care is
required includes, but is not limited to,
class-time, study-time, field work,
internships, and commuting time;
(10) for a student with a disability, an allowance
(as determined by the institution) for those expenses
related to the student's disability, including special
services, personal assistance, transportation,
equipment, and supplies that are reasonably incurred
and not provided for by other assisting agencies;
(11) for a student receiving all or part of the
student's instruction by means of telecommunications
technology, no distinction shall be made with respect
to the mode of instruction in determining costs;
(12) for a student engaged in a work experience under
a cooperative education program, an allowance for
reasonable costs associated with such employment (as
determined by the institution);
(13) for a student who receives a Federal student
loan made under this title or any other Federal law, to
cover a student's cost of attendance at the
institution, an allowance for the actual cost of any
loan fee, origination fee, or insurance premium charged
to such student or the parent of such student on such
loan, or the average cost of any such fee or premium,
as applicable; and
(14) for a student in a [program] program of study
requiring professional licensure, certification, or a
first professional credential, the cost of obtaining
the license, certification, or a first professional
credential.
(b) Special Rule for Living Expenses for Less-than-half-time
Students.--For students attending an institution of higher
education less than half-time, an institution of higher
education may include an allowance for living expenses,
including food and housing costs in accordance with subsection
(a)(4) for up to three semesters, or the equivalent, with no
more than two semesters being consecutive.
(c) Disclosure of Cost of Attendance Elements.--Each
institution shall make publicly available on the institution's
website a list of all the elements of cost of attendance of
each program of study at the institution described in
paragraphs (1) through (14) of subsection (a), and shall
disclose such elements on any portion of the website describing
tuition and fees [of the institution] of such programs of study
at the institution.
SEC. 472A. DETERMINATION OF MEDIAN COST OF COLLEGE.
(a) In General.--For the purpose of this title, the term
``median cost of college'', when used with respect to a program
of study, offered by one or more institutions of higher
education for an award year, means the median of the cost of
attendance of the program of study (as determined under section
472) across all institutions of higher education offering such
a program of study for the preceding award year.
(b) Program of Study Defined.--In this section and section
472, and part D:
(1) In general.--The term ``program of study''--
(A) means an eligible program at an
institution of higher education that is
classified by a combination of--
(i) one or more CIP codes; and
(ii) one credential level, determined
by the credential awarded upon
completion of the program; and
(B) does not include a program of study
abroad.
(2) CIP code.--The term ``CIP code'' means the six-
digit taxonomic identification code assigned by an
institution of higher education to a specific program
of study at the institution, determined by the
institution of higher education in accordance with the
Classification of Instructional Programs published by
the National Center for Education Statistics.
(3) Credential level.--
(A) In general.--The term `credential level'
means the level of the degree or other
credential awarded by an institution of higher
education to students who complete a program of
study of the institution. Each degree or other
credential awarded by an institution shall be
categorized by the institution as either
undergraduate credential level or graduate
credential level.
(B) Undergraduate credential.--When used with
respect to a credential or credential level,
the term `undergraduate credential' includes
credentials such as an undergraduate
certificate, an associate degree, a bachelor's
degree, and a post-baccalaureate certificate
(including the coursework specified in
paragraphs (3)(B) and (4)(B) of section
484(b)).
(C) Graduate credential.--When used with
respect to a credential or credential level,
the term `graduate credential' includes
credentials such as a master's degree, a
doctoral degree, a professional degree, and a
postgraduate certificate.
* * * * * * *
SEC. 479A. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.
(a) In General.--
(1) Authority of financial aid administrators.--A
financial aid administrator shall have the authority
to, on the basis of adequate documentation, make
adjustments to any or all of the following on a case-
by-case basis:
(A) For an applicant with special
circumstances under subsection (b) to--
(i) the cost of attendance;
(ii) the values of the data used to
calculate the student aid index; or
(iii) the values of the data used to
calculate the Federal Pell Grant award.
(B) For an applicant with unusual
circumstances under subsection (c), to the
dependency status of such applicant.
(2) Limitations on authority.--
(A) Use of authority.--No institution of
higher education or financial aid administrator
shall maintain a policy of denying all requests
for adjustments under this section.
(B) No additional fee.--No student or parent
shall be charged a fee for a documented
interview of the student by the financial aid
administrator or for the review of a student or
parent's request for adjustments under this
section including the review of any
supplementary information or documentation of a
student or parent's special circumstances or a
student's unusual circumstances.
(C) Rule of construction.--The authority to
make adjustments under paragraph (1)(A) shall
not be construed to permit financial aid
administrators to deviate from the cost of
attendance, the values of data used to
calculate the student aid index or the values
of data used to calculate the Federal Pell
Grant award (or both) for awarding aid under
this title in the absence of special
circumstances.
(3) Adequate documentation.--Adequate documentation
for adjustments under this section must substantiate
the special circumstances or unusual circumstances of
an individual student, and may include, to the extent
relevant and appropriate--
(A) a documented interview between the
student and the financial aid administrator;
(B) for the purposes of determining that a
student qualifies for an adjustment under
paragraph (1)(B)--
(i) submission of a court order or
official Federal or State documentation
that the student or the student's
parents or legal guardians are
incarcerated in any Federal or State
penal institution;
(ii) a documented phone call or a
written statement, which confirms the
specific unusual circumstances with--
(I) a child welfare agency
authorized by a State or
county;
(II) a Tribal welfare
authority or agency;
(III) an independent living
case worker, such as a case
worker who supports current and
former foster youth with the
transition to adulthood; or
(IV) a public or private
agency, facility, or program
servicing the victims of abuse,
neglect, assault, or violence,
which may include domestic
violence;
(iii) a documented phone call or a
written statement from an attorney, a
guardian ad litem, or a court-appointed
special advocate, or a person serving
in a similar capacity which confirms
the specific unusual circumstances and
documents the person's relationship to
the student;
(iv) a documented phone call or
written statement from a representative
under chapter 1 or 2 of subpart 2 of
part A, which confirms the specific
unusual circumstances and documents the
representative's relationship to the
student;
(v) documents, such as utility bills
or health insurance documentation, that
demonstrate a separation from parents
or legal guardians; and
(vi) in the absence of documentation
described in this subparagraph, other
documentation the financial aid
administrator determines is adequate to
confirm the unusual circumstances,
pursuant to section 480(d)(9); and
(C) supplementary information, as necessary,
about the financial status or personal
circumstances of eligible applicants as it
relates to the special circumstances or unusual
circumstances based on which the applicant is
requesting an adjustment.
(4) Special rule.--In making adjustments under
paragraph (1), a financial aid administrator may offer
a dependent student financial assistance under a
Federal Direct Unsubsidized Stafford Loan without
requiring the parents of such student to provide their
parent information on the Free Application for Federal
Student Aid if the student does not qualify for, or
does not choose to use, the unusual circumstance option
described in section 480(d)(9), and the financial aid
administrator determines that the parents of such
student ended financial support of such student or
refuse to file such form.
(5) Public disclosure.--Each institution of higher
education shall make publicly available information
that students applying for aid under this title have
the opportunity to pursue adjustments under this
section.
(b) Adjustments for Students With Special Circumstances.--
(1) Special circumstances for adjustments related to
pell grants.--Special circumstances for adjustments to
calculate a Federal Pell Grant award--
(A) shall be conditions that differentiate an
individual student from a group of students
rather than conditions that exist across a
group of students; and
(B) may include--
(i) recent unemployment of a family
member or student;
(ii) a student or family member who
is a dislocated worker (as defined in
section 3 of the Workforce Innovation
and Opportunity Act);
(iii) a change in housing status that
results in an individual being a
homeless youth;
(iv) an unusual amount of claimed
losses against income on the Federal
tax return that substantially lower
adjusted gross income, such as
business, investment, or real estate
losses;
[(v) receipt of foreign income of
permanent residents or United States
citizens exempt from Federal taxation,
or the foreign income for which a
permanent resident or citizen received
a foreign tax credit;]
[(vi)] (v) in the case of an
applicant who does not qualify for the
exemption from asset reporting under
section 479, assets as defined in
section 480(f); or
[(vii)] (vi) other changes or
adjustments in the income, assets, or
size of a family, or a student's
dependency status.
(2) Special circumstances for adjustments related to
cost of attendance and student aid index.--Special
circumstances for adjustments to the cost of attendance
or the values of the data used to calculate the student
aid index--
(A) shall be conditions that differentiate an
individual student from a group of students
rather than conditions that exist across a
group of students, except as provided in
sections 479B and 479C; and
(B) may include--
(i) tuition expenses at an elementary
school or secondary school;
(ii) medical, dental, or nursing home
expenses not covered by insurance;
(iii) child care or dependent care
costs not covered by the dependent care
cost allowance calculated in accordance
with section 472;
(iv) recent unemployment of a family
member or student;
(v) a student or family member who is
a dislocated worker (as defined in
section 3 of the Workforce Innovation
and Opportunity Act);
(vi) the existence of additional
family members enrolled in a degree,
certificate, or other program leading
to a recognized educational credential
at an institution with a program
participation agreement under section
487;
(vii) a change in housing status that
results in an individual being a
homeless youth;
(viii) a condition of severe
disability of the student, or in the
case of a dependent student, the
dependent student's parent or guardian,
or in the case of an independent
student, the independent student's
dependent or spouse;
(ix) unusual amount of claimed losses
against income on the Federal tax
return that substantially lower
adjusted gross income, such as
business, investment, or real estate
losses; or
(x) other changes or adjustments in
the income, assets, or size of a
family, or a student's dependency
status.
(c) Unusual Circumstances Adjustments.--
(1) In general.--Unusual circumstances for
adjustments to the dependency status of an applicant
shall be--
(A) conditions that differentiate an
individual student from a group of students;
and
(B) based on unusual circumstances, pursuant
to section 480(d)(9).
(2) Provisional independent students.--
(A) Requirements for the secretary.--The
Secretary shall--
(i) enable each student who, based on
an unusual circumstance described in
section 480(d)(9), may qualify for an
adjustment under subsection (a)(1)(B)
that will result in a determination of
independence under this section or
section 479D to complete the Free
Application for Federal Student Aid as
an independent student for the purpose
of a provisional determination of the
student's Federal financial aid award,
with the final determination of the
award subject to the documentation
requirements of subsection (a)(3);
(ii) upon completion of the Free
Application for Federal Student Aid
provide an estimate of the student's
Federal Pell Grant award, and other
information as specified in section
483(a)(3)(A), based on the assumption
that the student is determined to be an
independent student; and
(iii) specify, on the Free
Application for Federal Student Aid,
the consequences under section 490(a)
of knowingly and willfully completing
the Free Application for Federal
Student Aid as an independent student
under clause (i) without meeting the
unusual circumstances to qualify for
such a determination.
(B) Requirements for financial aid
administrators.--With respect to a student
accepted for admission who completes the Free
Application for Federal Student Aid as an
independent student under subparagraph (A), a
financial aid administrator shall--
(i) notify the student of the
institutional process, requirements,
and timeline for an adjustment under
this section and section 480(d)(9) that
will result in a review of the
student's request for an adjustment and
a determination of the student's
dependency status under such sections
within a reasonable time after the
student completes the Free Application
for Federal Student Aid;
(ii) provide the student a final
determination of the student's
dependency status and Federal financial
aid award as soon as practicable after
all requested documentation is
provided;
(iii) retain all documents related to
the adjustment under this section and
section 480(d)(9), including documented
interviews, for at least the duration
of the student's enrollment, and shall
abide by all other record keeping
requirements of this Act; and
(iv) presume that any student who has
obtained an adjustment under this
section and section 480(d)(9) and a
final determination of independence for
any preceding award year at an
institution of higher education to be
independent for each subsequent award
year at the same institution unless--
(I) the student informs the
institution that circumstances
have changed; or
(II) the institution has
specific conflicting
information about the student's
independence.
(C) Eligibility.--If a student pursues
provisional independent student status and is
not determined to be an independent student by
a financial aid administrator, such student
shall only be eligible for a Federal Direct
Unsubsidized Stafford Loan for that award year
unless such student subsequently completes the
Free Application for Federal Student Aid as a
dependent student.
(d) Adjustments to Assets or Income Taken Into Account.--A
financial aid administrator shall be considered to be making a
necessary adjustment in accordance with this section if--
(1) the administrator makes adjustments excluding
from family income or assets any proceeds or losses
from a sale of farm or business assets of a family if
such sale results from a voluntary or involuntary
foreclosure, forfeiture, or bankruptcy or a voluntary
or involuntary liquidation; or
(2) the administrator makes adjustments for a
condition of disability of a student, or in the case of
a dependent student, the dependent student's parent or
guardian, or in the case of an independent student, the
independent student's dependent or spouse, so as to
take into consideration the additional costs incurred
as a result of such disability.
(e) Refusal or Adjustment of Loan Certifications.--On a case-
by-case basis, an eligible institution may refuse to use the
authority provided under this section, certify a statement that
permits a student to receive a loan under part D, certify a
loan amount, or make a loan that is less than the student's
determination of need (as determined under this part), if the
reason for the action is documented and provided in writing to
the student. No eligible institution shall discriminate against
any borrower or applicant in obtaining a loan on the basis of
race, ethnicity, national origin, religion, sex, marital
status, age, or disability status.
(f) Special Rule Regarding Professional Judgment During a
Disaster, Emergency, or Economic Downturn.--
(1) In general.--For the purposes of making a
professional judgment under this section, financial aid
administrators may, during a qualifying emergency--
(A) determine that the income earned from
work for an applicant is zero, if the applicant
can provide paper or electronic documentation
of receipt of unemployment benefits or
confirmation that an application for
unemployment benefits was submitted; and
(B) make additional appropriate adjustments
to the income earned from work for a student,
parent, or spouse, as applicable, based on the
totality of the family's situation, including
consideration of unemployment benefits.
(2) Documentation.--For the purposes of documenting
unemployment under paragraph (1), documentation shall
be accepted if such documentation is submitted not more
than 90 days from the date on which such documentation
was issued, except if a financial aid administrator
knows that the student, parent, or spouse, as
applicable, has already obtained other employment.
(3) Program reviews.--The Secretary shall make
adjustments to the model used to select institutions of
higher education participating under this title for
program reviews in order to account for any rise in the
use of professional judgment under this section during
the award years applicable to the qualifying emergency,
as determined by the Secretary.
(4) Qualifying emergency.--In this subsection, the
term ``qualifying emergency'' means--
(A) an event for which the President declared
a major disaster or an emergency under section
401 or 501, respectively, of the Robert T.
Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5170 and 5191);
(B) a national emergency related to the
coronavirus declared by the President under
section 201 of the National Emergencies Act (50
U.S.C. 1601 et seq.); or
(C) a period of recession or economic
downturn as determined by the Secretary, in
consultation with the Secretary of Labor.
* * * * * * *
SEC. 480. DEFINITIONS.
In this part:
(a) Total Income.--The term ``total income'' means the amount
equal to adjusted gross income for the second preceding tax
year plus untaxed income and benefits for the second preceding
tax year minus excludable income for the second preceding tax
year. The factors used to determine total income shall be
derived from the Federal income tax return, if available,
except for the applicant's ability to indicate a qualified
rollover in the second preceding tax year as outlined in
section 483 or foreign income described in subsection (b)(5).
(b) Untaxed Income and Benefits.--The term ``untaxed income
and benefits'' means--
(1) deductions and payments to self-employed SEP,
SIMPLE, Keogh, and other qualified individual
retirement accounts excluded from income for Federal
tax purposes, except such term shall not include
payments made to tax-deferred pension and retirement
plans, paid directly or withheld from earnings, that
are not delineated on the Federal tax return;
(2) tax-exempt interest income;
(3) untaxed portion of individual retirement account
distributions;
(4) untaxed portion of pensions; and
(5) foreign income of permanent residents of the
United States or United States citizens exempt from
Federal taxation, or the foreign income for which such
a permanent resident or citizen receives a foreign tax
credit.
(c) Veterans and Veterans' Education Benefits.--(1) The term
``veteran'' has the meaning given the term in section 101(2) of
title 38, United States Code, and includes individuals who
served in the United States Armed Forces as described in
sections 101(21), 101(22), and 101(23) of title 38, United
States Code.
(2) The term ``veterans'' education benefits' means veterans'
benefits under the following provisions of law:
(A) Chapter 103 of title 10, United States Code
(Senior Reserve Officers' Training Corps).
(B) Chapter 106A of title 10, United States Code
(Educational Assistance for Persons Enlisting for
Active Duty).
(C) Chapter 1606 of title 10, United States Code
(Selected Reserve Educational Assistance Program).
(D) Chapter 1607 of title 10, United States Code
(Educational Assistance Program for Reserve Component
Members Supporting Contingency Operations and Certain
Other Operations).
(E) Chapter 30 of title 38, United States Code (All-
Volunteer Force Educational Assistance Program, also
known as the ``Montgomery GI Bill--active duty'').
(F) Chapter 31 of title 38, United States Code
(Training and Rehabilitation for Veterans with Service-
Connected Disabilities).
(G) Chapter 32 of title 38, United States Code (Post-
Vietnam Era Veterans' Educational Assistance Program).
(H) Chapter 33 of title 38, United States Code (Post-
9/11 Educational Assistance).
(I) Chapter 35 of title 38, United States Code
(Survivors' and Dependents' Educational Assistance
Program).
(J) Section 903 of the Department of Defense
Authorization Act, 1981 (10 U.S.C. 2141 note)
(Educational Assistance Pilot Program).
(K) Section 156(b) of the ``Joint Resolution making
further continuing appropriations and providing for
productive employment for the fiscal year 1983, and for
other purposes'' (42 U.S.C. 402 note) (Restored
Entitlement Program for Survivors, also known as
``Quayle benefits'').
(L) The provisions of chapter 3 of title 37, United
States Code, related to subsistence allowances for
members of the Reserve Officers Training Corps.
(d) Independent Students and Determinations.--The term
``independent'', when used with respect to a student, means any
individual who--
(1) is 24 years of age or older by December 31 of the
award year;
(2) is, or was at any time when the individual was 13
years of age or older--
(A) an orphan;
(B) a ward of the court; or
(C) in foster care;
(3) is, or was immediately prior to attaining the age
of majority, an emancipated minor or in legal
guardianship as determined by a court of competent
jurisdiction in the individual's State of legal
residence;
(4) is a veteran of the Armed Forces of the United
States (as defined in subsection (c)) or is currently
serving on active duty in the Armed Forces for other
than training purposes;
(5) is a graduate or professional student;
(6) is married and not separated;
(7) has legal dependents other than a spouse;
(8) is an unaccompanied homeless youth or is
unaccompanied, at risk of homelessness, and self-
supporting, without regard to such individual's age;
and
(9) is a student for whom a financial aid
administrator makes a documented determination of
independence by reason of other unusual circumstances
pursuant to section 479A(c) in which the student is
unable to contact a parent or where contact with
parents poses a risk to such student, which includes
circumstances of--
(A) human trafficking, as described in the
Trafficking Victims Protection Act of 2000 (22
U.S.C. 7101 et seq.);
(B) legally granted refugee or asylum status;
(C) parental abandonment or estrangement; or
(D) student or parental incarceration.
(e) Excludable Income.--The term ``excludable income''
means--
(1) an amount equal to the education credits
described in paragraphs (1) and (2) of section 25A(a)
of the Internal Revenue Code of 1986;
(2) if an applicant elects to report it, college
grant and scholarship aid included in gross income on a
Federal tax return, including amounts attributable to
grant and scholarship portions of fellowships and
assistantships and any national service educational
award or post-service benefit received by an individual
under title I of the National and Community Service Act
of 1990 (42 U.S.C. 12511 et seq.), including awards,
living allowances, and interest accrual payments; and
(3) income earned from work under part C of this
title.
(f) Assets.--
(1) In general.--The term ``assets'' means the amount
in checking and savings accounts, time deposits, money
market funds, investments, trusts, stocks, bonds,
derivatives, securities, mutual funds, tax shelters,
qualified education benefits (except as provided in
paragraph (3)), the annual amount of child support
received and the net value of real estate, vacation
homes, income producing property, and business and farm
assets, determined in accordance with section 478(c).
(2) Exclusions.--With respect to determinations of
need under this title, the term ``assets'' shall not
include the [net value of the] net value of--
(A) the family's principal place of
residence[.];
(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.
(3) Consideration of qualified education benefit.--A
qualified education benefit shall be considered an
asset of--
(A) the student if the student is an
independent student; or
(B) the parent if the student is a dependent
student and the account is designated for the
student, regardless of whether the owner of the
account is the student or the parent.
(4) Definition of qualified education benefit.--In
this subsection, the term ``qualified education
benefit'' means--
(A) a qualified tuition program (as defined
in section 529(b)(1)(A) of the Internal Revenue
Code of 1986) or other prepaid tuition plan
offered by a State; and
(B) a Coverdell education savings account (as
defined in section 530(b)(1) of the Internal
Revenue Code of 1986).
(g) Net Value.--The term ``net value'' means the market value
at the time of application of the assets (as defined in
subsection (f)), minus the outstanding liabilities or
indebtedness against the assets.
(h) Treatment of Income Taxes Paid to Other Jurisdictions.--
(1) The tax on income paid to the Governments of the
Commonwealth of Puerto Rico, Guam, American Samoa, the
Virgin Islands, or the Commonwealth of the Northern
Mariana Islands, the Republic of the Marshall Islands,
the Federated States of Micronesia, or Palau under the
laws applicable to those jurisdictions, or the
comparable tax paid to the central government of a
foreign country, shall be treated as Federal income
taxes.
(2) References in this part to the Internal Revenue
Code of 1986, Federal income tax forms, and the
Internal Revenue Service shall, for purposes of the tax
described in paragraph (1), be treated as references to
the corresponding laws, tax forms, and tax collection
agencies of those jurisdictions, respectively, subject
to such adjustments as the Secretary may provide by
regulation.
(i) Other Financial Assistance.--
(1) For purposes of determining a student's
eligibility for funds under this title, other financial
assistance not received under this title shall include
all scholarships, grants, loans, or other assistance
known to the institution at the time the determination
of the student's need is made, including national
service educational awards or post-service benefits
under title I of the National and Community Service Act
of 1990 (42 U.S.C. 12511 et seq.), but excluding
veterans' education benefits.
(2) Notwithstanding paragraph (1), a tax credit taken
under section 25A of the Internal Revenue Code of 1986,
or a distribution that is not includable in gross
income under section 529 of such Code, under another
prepaid tuition plan offered by a State, or under a
Coverdell education savings account under section 530
of such Code, shall not be treated as other financial
assistance for purposes of section 471(a)(3).
(3) Notwithstanding paragraph (1) and section 472,
assistance not received under this title may be
excluded from both other financial assistance and cost
of attendance, if that assistance is provided by a
State and is designated by such State to offset a
specific component of the cost of attendance. If that
assistance is excluded from either other financial
assistance or cost of attendance, it shall be excluded
from both.
(4) Notwithstanding paragraph (1), payments made and
services provided under part E of title IV of the
Social Security Act to or on behalf of any child or
youth over whom the State agency has responsibility for
placement, care, or supervision, including the value of
vouchers for education and training and amounts
expended for room and board for youth who are not in
foster care but are receiving services under section
477 of such Act, shall not be treated as other
financial assistance for purposes of section 471(a)(3).
(5) Notwithstanding paragraph (1), emergency
financial assistance provided to the student for
unexpected expenses that are a component of the
student's cost of attendance, and not otherwise
considered when the determination of the student's need
is made, shall not be treated as other financial
assistance for purposes of section 471(a)(3).
(j) Dependents.--
(1) Except as otherwise provided, the term
``dependent of the parent'' means the student who is
deemed to be a dependent student when applying for aid
under this title, and any other person who lives with
and receives more than one-half of their support from
the parent (or parents) and will continue to receive
more than half of their support from the parent (or
parents) during the award year.
(2) Except as otherwise provided, the term
``dependent of the student'' means the student's
dependent children and other persons (except the
student's spouse) who live with and receive more than
one-half of their support from the student and will
continue to receive more than half of their support
from the student during the award year.
(k) Family Size.--
(1) Dependent student.--Except as provided in
paragraph (3), in determining family size in the case
of a dependent student--
(A) if the parents are not divorced or
separated, family members include the student's
parents, and any dependent (within the meaning
of section 152 of the Internal Revenue Code of
1986 or an eligible individual for purposes of
the credit under section 24 of the Internal
Revenue Code of 1986) of the student's parents
for the taxable year used in determining the
amount of need of the student for financial
assistance under this title;
(B) if the parents are divorced or separated,
family members include the parent whose income
is included in computing available income and
any dependent (within the meaning of section
152 of the Internal Revenue Code of 1986 or an
eligible individual for purposes of the credit
under section 24 of the Internal Revenue Code
of 1986) of that parent for the taxable year
used in determining the amount of need of the
student for financial assistance under this
title;
(C) if the parents are divorced and the
parents whose income is so included are
remarried, or if the parent was a widow or
widower who has remarried, family members also
include, in addition to those individuals
referred to in subparagraph (B), the new spouse
and any dependent (within the meaning of
section 152 of the Internal Revenue Code of
1986 or an eligible individual for purposes of
the credit under section 24 of the Internal
Revenue Code of 1986) of the new spouse for the
taxable year used in determining the amount of
need of the student for financial assistance
under this title, if that spouse's income is
included in determining the parent's adjusted
available income; and
(D) if the student is not considered as a
dependent (within the meaning of section 152 of
the Internal Revenue Code of 1986 or an
eligible individual for purposes of the credit
under section 24 of the Internal Revenue Code
of 1986) of any parent, the parents' family
size shall include the student and the family
members applicable to the parents' situation
under subparagraph (A), (B), or (C).
(2) Independent student.--Except as provided in
paragraph (3), in determining family size in the case
of an independent student--
(A) family members include the student, the
student's spouse, and any dependent (within the
meaning of section 152 of the Internal Revenue
Code of 1986 or an eligible individual for
purposes of the credit under section 24 of the
Internal Revenue Code of 1986) of that student
for the taxable year used in determining the
amount of need of the student for financial
assistance under this title; and
(B) if the student is divorced or separated,
family members do not include the spouse (or
ex-spouse), but do include the student and any
dependent (within the meaning of section 152 of
the Internal Revenue Code of 1986 or an
eligible individual for purposes of the credit
under section 24 of the Internal Revenue Code
of 1986) of that student for the taxable year
used in determining the amount of need of the
student for financial assistance under this
title.
(3) Procedures and modification.--The Secretary shall
provide procedures for determining family size in cases
in which information for the taxable year used in
determining the amount of need of the student for
financial assistance under this title has changed or
does not accurately reflect the applicant's current
household size, including when a divorce settlement
only allows a parent to file for the Earned Income Tax
Credit available under section 32 of the Internal
Revenue Code of 1986.
(l) Business Assets.--The term ``business assets'' means
property that is used in the operation of a trade or business,
including real estate, inventories, buildings, machinery, and
other equipment, patents, franchise rights, and copyrights.
(m) Homeless Youth.--The term ``homeless youth'' has the
meaning given the term ``homeless children and youths'' in
section 725 of the McKinney-Vento Homeless Assistance Act (42
U.S.C. 11434a).
(n) Unaccompanied.--The terms ``unaccompanied'',
``unaccompanied youth'', or ``unaccompanied homeless youth''
have the meaning given the term ``unaccompanied youth'' in
section 725 of the McKinney-Vento Homeless Assistance Act (42
U.S.C. 11434a).
Part G--General Provisions Relating to Student Assistance Programs
SEC. 481. DEFINITIONS.
(a) Academic and Award Year.--(1) For the purpose of any
program under this title, the term ``award year'' shall be
defined as the period beginning July 1 and ending June 30 of
the following year.
(2)(A) For the purpose of any program under this title, the
term ``academic year'' shall--
(i) require a minimum of 30 weeks of instructional
time for a course of study that measures its program
length in credit hours; or
(ii) require a minimum of 26 weeks of instructional
time for a course of study that measures its program
length in clock hours; and
(iii) require an undergraduate course of study to
contain an amount of instructional time whereby a full-
time student is expected to complete at least--
(I) 24 semester or trimester hours or 36
quarter credit hours in a course of study that
measures its program length in credit hours; or
(II) 900 clock hours in a course of study
that measures its program length in clock
hours.
(B) The Secretary may reduce such minimum of 30 weeks to not
less than 26 weeks for good cause, as determined by the
Secretary on a case-by-case basis, in the case of an
institution of higher education that provides a 2-year or 4-
year program of instruction for which the institution awards an
associate or baccalaureate degree and that measures program
length in credit hours or clock hours.
(b) Eligible Program.--(1) For purposes of this title, the
term ``eligible program'' means a program of at least--
(A) 600 clock hours of instruction, 16 semester
hours, or 24 quarter hours, offered during a minimum of
15 weeks, in the case of a program that--
(i) provides a program of training to prepare
students for [gainful employment in] a
recognized profession; and
(ii) admits students who have not completed
the equivalent of an associate degree; or
(B) 300 clock hours of instruction, 8 semester hours,
or 12 hours, offered during a minimum of 10 weeks, in
the case of--
(i) an undergraduate program that requires
the equivalent of an associate degree for
admissions; or
(ii) a graduate or professional program.
(2)(A) A program is an eligible program for purposes of part
B of this title if it is a program of at least 300 clock hours
of instruction, but less than 600 clock hours of instruction,
offered during a minimum of 10 weeks, that--
(i) has a verified completion rate of at least 70
percent, as determined in accordance with the
regulations of the Secretary;
(ii) has a verified placement rate of at least 70
percent, as determined in accordance with the
regulations of the Secretary; and
(iii) satisfies such further criteria as the
Secretary may prescribe by regulation.
(B) In the case of a program being determined eligible for
the first time under this paragraph, such determination shall
be made by the Secretary before such program is considered to
have satisfied the requirements of this paragraph.
(3)(A) A program is an eligible program for purposes of the
Workforce Pell Grant program under section 401(k) only if--
(i) it is a program of at least 150 clock hours of
instruction, but less than 600 clock hours of
instruction, or an equivalent number of credit hours,
offered by an eligible institution during a minimum of
8 weeks, but less than 15 weeks;
(ii) it is not offered as a correspondence course, as
defined in 600.2 of title 34, Code of Federal
Regulations (as in effect on September 20, 2020);
(iii) the Governor of a State, after consultation
with the State board, makes a determination that the
program--
(I) provides an education aligned with the
requirements of high-skill, high-wage (as
identified by the State pursuant to section 122
of the Carl D. Perkins Career and Technical
Education Act (20 U.S.C. 2342)), or in-demand
industry sectors or occupations;
(II) meets the hiring requirements of
potential employers in the sectors or
occupations described in subclause (I);
(III) either--
(aa) leads to a recognized
postsecondary credential that is
stackable and portable across more than
one employer; or
(bb) with respect to students
enrolled in the program--
(AA) prepares such students
for employment in an occupation
for which there is only one
recognized postsecondary
credential; and
(BB) provides such students
with such a credential upon
completion of such program; and
(IV) prepares students to pursue 1 or more
certificate or degree programs at 1 or more
institutions of higher education (which may
include the eligible institution providing the
program), including by ensuring--
(aa) that a student, upon completion
of the program and enrollment in such a
related certificate or degree program,
will receive academic credit for the
program that will be accepted toward
meeting such certificate or degree
program requirements; and
(bb) the acceptability of such credit
toward meeting such certificate or
degree program requirements; and
(iv) after the Governor of such State makes the
determination that the program meets the requirements
under clause (iii), the Secretary determines that--
(I) the program has been offered by the
eligible institution for not less than 1 year
prior to the date on which the Secretary makes
a determination under this clause;
(II) for each award year, the program has a
verified completion rate of at least 70
percent, within 150 percent of the normal time
for completion;
(III) for each award year, the program has a
verified job placement rate of at least 70
percent, measured 180 days after completion;
and
(IV) for each award year, the median value-
added earnings (as defined in section 420W) of
students who completed such program for the
most recent year for which data is available
exceeds the median total price (as defined in
section 454(d)(3)(D)) charged to students in
such award year.
(B) In this paragraph:
(i) The term ``eligible institution'' means an
institution of higher education (as defined in section
102), or any other entity that has entered into a
program participation agreement with the Secretary
under section 487(a) (without regard to whether that
entity is accredited by a national recognized
accrediting agency or association), which has not been
subject, during any of the preceding 3 years, to--
(I) any suspension, emergency action, or
termination under this title;
(II) in the case of an institution of higher
education, any adverse action by the
institution's accrediting agency or association
that revokes or denies accreditation for the
institution of higher education; or
(III) any final action by the State in which
the institution or other entity holds its legal
domicile, authorization, or accreditation that
revokes the institution's or entity's license
or other authority to operate in such State.
(ii) The term ``Governor'' means the chief executive
of a State.
(iii) The terms ``industry or sector partnership'',
``in-demand industry sector or occupation'',
``recognized postsecondary credential'', and ``State
board'' have the meanings given such terms in section 3
of the Workforce Innovation and Opportunity Act.
[(3)] (4) An otherwise eligible program that is offered in
whole or in part through telecommunications is eligible for the
purposes of this title if the program is offered by an
institution, other than a foreign institution, that has been
evaluated and determined (before or after the date of enactment
of the Higher Education Reconciliation Act of 2005) to have the
capability to effectively deliver distance education programs
by an accrediting agency or association that--
(A) is recognized by the Secretary under subpart 2 of
part H; and
(B) has evaluation of distance education programs
within the scope of its recognition, as described in
section 496(n)(3).
[(4)] (5) For purposes of this title, the term ``eligible
program'' includes an instructional program that, in lieu of
credit hours or clock hours as the measure of student learning,
utilizes direct assessment of student learning, or recognizes
the direct assessment of student learning by others, if such
assessment is consistent with the accreditation of the
institution or program utilizing the results of the assessment.
In the case of a program being determined eligible for the
first time under this paragraph, such determination shall be
made by the Secretary before such program is considered to be
an eligible program.
(c) Third Party Servicer.--For purposes of this title, the
term ``third party servicer'' means any individual, any State,
or any private, for-profit or nonprofit organization, which
enters into a contract with--
(1) any eligible institution of higher education to
administer, through either manual or automated
processing, any aspect of such institution's student
assistance programs under this title; or
(2) any guaranty agency, or any eligible lender, to
administer, through either manual or automated
processing, any aspect of such guaranty agency's or
lender's student loan programs under part B of this
title, including originating, guaranteeing, monitoring,
processing, servicing, or collecting loans.
(d) Definitions for Military Deferments.--For purposes of
parts B, D, and E of this title:
(1) Active duty.--The term ``active duty'' has the
meaning given such term in section 101(d)(1) of title
10, United States Code, except that such term does not
include active duty for training or attendance at a
service school.
(2) Military operation.--The term ``military
operation'' means a contingency operation as such term
is defined in section 101(a)(13) of title 10, United
States Code.
(3) National emergency.--The term ``national
emergency'' means the national emergency by reason of
certain terrorist attacks declared by the President on
September 14, 2001, or subsequent national emergencies
declared by the President by reason of terrorist
attacks.
(4) Serving on active duty.--The term ``serving on
active duty during a war or other military operation or
national emergency'' means service by an individual who
is--
(A) a Reserve of an Armed Force ordered to
active duty under section 12301(a), 12301(g),
12302, 12304, or 12306 of title 10, United
States Code, or any retired member of an Armed
Force ordered to active duty under section 688
of such title, for service in connection with a
war or other military operation or national
emergency, regardless of the location at which
such active duty service is performed; and
(B) any other member of an Armed Force on
active duty in connection with such emergency
or subsequent actions or conditions who has
been assigned to a duty station at a location
other than the location at which such member is
normally assigned.
(5) Qualifying national guard duty.--The term
``qualifying National Guard duty during a war or other
military operation or national emergency'' means
service as a member of the National Guard on full-time
National Guard duty (as defined in section 101(d)(5) of
title 10, United States Code) under a call to active
service authorized by the President or the Secretary of
Defense for a period of more than 30 consecutive days
under section 502(f) of title 32, United States Code,
in connection with a war, other military operation, or
a national emergency declared by the President and
supported by Federal funds.
(e) Consumer Reporting Agency.--For purposes of this title,
the term ``consumer reporting agency'' has the meaning given
the term ``consumer reporting agency that compiles and
maintains files on consumers on a nationwide basis'' in Section
603(p) of the Fair Credit Reporting Act (15 U.S.C. 1681a(p)).
(f) Definition of Educational Service Agency.--For purposes
of parts B, D, and E, the term ``educational service agency''
has the meaning given the term in section 8101 of the
Elementary and Secondary Education Act of 1965.
* * * * * * *
SEC. 484. STUDENT ELIGIBILITY.
(a) In General.--In order to receive any grant, loan, or work
assistance under this title, a student must--
(1) be enrolled or accepted for enrollment in a
degree, certificate, or other program (including a
program of study abroad approved for credit by the
eligible institution at which such student is enrolled)
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 or, for purposes of section 401(k), at an
entity (other than an institution of higher education)
that meets the requirements of section 481(b)(3)(B)(i),
except as provided in subsections (b)(3) and (b)(4),
and not be enrolled in an elementary or secondary
school;
(2) if the student is presently enrolled at an
institution, be maintaining satisfactory progress in
the course of study the student is pursuing in
accordance with the provisions of subsection (c);
(3) not owe a refund on grants previously received at
any institution under this title, or be in default on
any loan from a student loan fund at any institution
provided for in part E, or a loan made, insured, or
guaranteed by the Secretary under this title for
attendance at any institution;
(4) file with the Secretary, as part of the original
financial aid application process, a certification,
which need not be notarized, but which shall include--
(A) a statement of educational purpose
stating that the money attributable to such
grant, loan, or loan guarantee will be used
solely for expenses related to attendance or
continued attendance at such institution; and
(B) such student's social security number;
[(5) be a citizen or national of the United States, a
permanent resident of the United States, or able to
provide evidence from the Immigration and
Naturalization Service that he or she is in the United
States for other than a temporary purpose with the
intention of becoming a citizen or permanent resident;
and]
(5) be--
(A) a citizen or national of the United
States;
(B) an alien who is lawfully admitted for
permanent residence under the Immigration and
Nationality Act (8 U.S.C. 1101 et seq.);
(C) an alien who--
(i) is a citizen or national of the
Republic of Cuba;
(ii) is the beneficiary of an
approved petition under section 203(a)
of the Immigration and Nationality Act
(8 U.S.C. 1153(a));
(iii) meets all eligibility
requirements for an immigrant visa but
for whom such a visa is not immediately
available;
(iv) is not otherwise inadmissible
under section 212(a) of such Act (8
U.S.C. 8 U.S.C. 1182(a)); and
(v) is physically present in the
United States pursuant to a grant of
parole in furtherance of the commitment
of the United States to the minimum
level of annual legal migration of
Cuban nationals to the United States
specified in the U.S.-Cuba Joint
Communique on Migration, done at New
York September 9, 1994, and reaffirmed
in the Cuba-United States: Joint
Statement on Normalization of
Migration, Building on the Agreement of
September 9, 1994, done at New York May
2, 1995;
(D) an alien described in section 401(a) of
the Additional Ukraine Supplemental
Appropriations Act, 2022 (Public Law 117-128; 8
U.S.C. 1101 note);
(E) an alien described in section 2502(a) of
the Afghanistan Supplemental Appropriations
Act, 2022 (division C of Public Law 117-43; 8
U.S.C. 1101 note); or
(F) an individual who lawfully resides in the
United States in accordance with a Compact of
Free Association referred to in section
402(b)(2)(G) of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8
U.S.C. 1612(b)(2)(G)); and
(6) if the student has been convicted of, or has pled
nolo contendere or guilty to, a crime involving fraud
in obtaining funds under this title, have completed the
repayment of such funds to the Secretary, or to the
holder in the case of a loan under this title obtained
by fraud.
(b) Eligibility for Student Loans.--(1) In order to be
eligible to receive any loan under this title (other than a
loan under section 428B or 428C, or under section 428H pursuant
to an exercise of discretion under section 479A) for any period
of enrollment, a student who is not a graduate or professional
student (as defined in regulations of the Secretary), and who
is enrolled in a program at an institution which has a
participation agreement with the Secretary to make awards under
subpart 1 of part A of this title, shall--
(A)(i) have received a determination of eligibility
or ineligibility for a Pell Grant under such subpart 1
for such period of enrollment; and (ii) if determined
to be eligible, have filed an application for a Pell
Grant for such enrollment period; or
(B) have (A) filed an application with the Pell Grant
processor for such institution for such enrollment
period, and (B) received from the financial aid
administrator of the institution a preliminary
determination of the student's eligibility or
ineligibility for a grant under such subpart 1.
(2) In order to be eligible to receive any loan under section
428A for any period of enrollment, a student shall--
(A) have received a determination of need for a loan
under section 428(a)(2)(B) of this title;
(B) if determined to have need for a loan under
section 428, have applied for such a loan; and
(C) has applied for a loan under section 428H, if
such student is eligible to apply for such a loan.
(3) A student who--
(A) is carrying at least one-half the normal full-
time work load for the course of study that the student
is pursuing, as determined by an eligible institution,
and
(B) is enrolled in a course of study necessary for
enrollment in a program leading to a degree or
certificate,
shall be, notwithstanding paragraph (1) of subsection (a),
eligible to apply for loans under part B or D of this title.
The eligibility described in this paragraph shall be restricted
to one 12-month period.
(4) A student who--
(A) is carrying at least one-half the normal full-
time work load for the course of study the student is
pursuing, as determined by the institution, and
(B) is enrolled or accepted for enrollment in a
program at an eligible institution necessary for a
professional credential or certification from a State
that is required for employment as a teacher in an
elementary or secondary school in that State,
shall be, notwithstanding paragraph (1) of subsection (a),
eligible to apply for loans under part B, D, or E or work-study
assistance under part C of this title.
(5) Notwithstanding any other provision of this subsection,
no incarcerated student is eligible to receive a loan under
this title.
(c) Satisfactory Progress.--(1) For the purpose of subsection
(a)(2), a student is maintaining satisfactory progress if--
(A) the institution at which the student is in
attendance, reviews the progress of the student at the
end of each academic year, or its equivalent, as
determined by the institution, and
(B) the student has a cumulative C average, or its
equivalent or academic standing consistent with the
requirements for graduation, as determined by the
institution, at the end of the second such academic
year.
(2) Whenever a student fails to meet the eligibility
requirements of subsection (a)(2) as a result of the
application of this subsection and subsequent to that failure
the student has academic standing consistent with the
requirements for graduation, as determined by the institution,
for any grading period, the student may, subject to this
subsection, again be eligible under subsection (a)(2) for a
grant, loan, or work assistance under this title.
(3) Any institution of higher education at which the student
is in attendance may waive the provisions of paragraph (1) or
paragraph (2) of this subsection for undue hardship based on--
(A) the death of a relative of the student,
(B) the personal injury or illness of the student, or
(C) special circumstances as determined by the
institution.
(d) Students Who Are Not High School Graduates.--
(1) Student eligibility.--In order for a student who
does not have a certificate of graduation from a school
providing secondary education, or the recognized
equivalent of such certificate, to be eligible for any
assistance under subparts 1, 3, and 4 of part A and
parts B, C, D, and E of this title, the student shall
meet the requirements of one of the following
subparagraphs:
(A) The student is enrolled in an eligible
career pathway program and meets one of the
following standards:
(i) The student shall take an
independently administered examination
and shall achieve a score, specified by
the Secretary, demonstrating that such
student can benefit from the education
or training being offered. Such
examination shall be approved by the
Secretary on the basis of compliance
with such standards for development,
administration, and scoring as the
Secretary may prescribe in regulations.
(ii) The student shall be determined
as having the ability to benefit from
the education or training in accordance
with such process as the State shall
prescribe. Any such process described
or approved by a State for the purposes
of this section shall be effective 6
months after the date of submission to
the Secretary unless the Secretary
disapproves such process. In
determining whether to approve or
disapprove such process, the Secretary
shall take into account the
effectiveness of such process in
enabling students without secondary
school diplomas or the equivalent
thereof to benefit from the instruction
offered by institutions utilizing such
process, and shall also take into
account the cultural diversity,
economic circumstances, and educational
preparation of the populations served
by the institutions.
(iii) The student shall be determined
by the institution of higher education
as having the ability to benefit from
the education or training offered by
the institution of higher education
upon satisfactory completion of 6
credit hours or the equivalent
coursework that are applicable toward a
degree or certificate offered by the
institution of higher education.
(B) The student has completed a secondary
school education in a home school setting that
is treated as a home school or private school
under State law.
(2) Eligible career pathway program.--In this
subsection, the term ``eligible career pathway
program'' means a program that combines rigorous and
high-quality education, training, and other services
that--
(A) aligns with the skill needs of industries
in the economy of the State or regional economy
involved;
(B) prepares an individual to be successful
in any of a full range of secondary or
postsecondary education options, including
apprenticeships registered under the Act of
August 16, 1937 (commonly known as the
``National Apprenticeship Act''; 50 Stat. 664,
chapter 663; 29 U.S.C. 50 et seq.) (referred to
individually in this Act as an
``apprenticeship'', except in section 171);
(C) includes counseling to support an
individual in achieving the individual's
education and career goals;
(D) includes, as appropriate, education
offered concurrently with and in the same
context as workforce preparation activities and
training for a specific occupation or
occupational cluster;
(E) organizes education, training, and other
services to meet the particular needs of an
individual in a manner that accelerates the
educational and career advancement of the
individual to the extent practicable;
(F) enables an individual to attain a
secondary school diploma or its recognized
equivalent, and at least 1 recognized
postsecondary credential; and
(G) helps an individual enter or advance
within a specific occupation or occupational
cluster.
(e) Certification for GSL Eligibility.--Each eligible
institution may certify student eligibility for a loan by an
eligible lender under part B of this title prior to completing
the review for accuracy of the information submitted by the
applicant required by regulations issued under this title, if--
(1) checks for the loans are mailed to the eligible
institution prior to disbursements;
(2) the disbursement is not made until the review is
complete; and
(3) the eligible institution has no evidence or
documentation on which the institution may base a
determination that the information submitted by the
applicant is incorrect.
(f) Loss of Eligibility for Violation of Loan Limits.--(1) No
student shall be eligible to receive any grant, loan, or work
assistance under this title if the eligible institution
determines that the student fraudulently borrowed in violation
of the annual loan limits under part B, part D, or part E of
this title in the same academic year, or if the student
fraudulently borrowed in excess of the aggregate maximum loan
limits under such part B, part D, or part E.
(2) If the institution determines that the student
inadvertently borrowed amounts in excess of such annual or
aggregate maximum loan limits, such institution shall allow the
student to repay any amount borrowed in excess of such limits
prior to certifying the student's eligibility for further
assistance under this title.
(g) Verification of Immigration Status.--
(1) In general.--The Secretary shall implement a
system under which the statements and supporting
documentation, if required, of an individual declaring
that such individual is in compliance with the
requirements of subsection (a)(5) shall be verified
prior to the individual's receipt of a grant, loan, or
work assistance under this title.
(2) Special rule.--The documents collected and
maintained by an eligible institution in the admission
of a student to the institution may be used by the
student in lieu of the documents used to establish both
employment authorization and identity under section
274A(b)(1)(B) of the Immigration and Nationality Act (8
U.S.C. 1324a) to verify eligibility to participate in
work-study programs under part C of this title.
(3) Verification mechanisms.--The Secretary is
authorized to verify such statements and supporting
documentation through a data match, using an automated
or other system, with other Federal agencies that may
be in possession of information relevant to such
statements and supporting documentation.
(4) Review.--In the case of such an individual who is
not a citizen or national of the United States, if the
statement described in paragraph (1) is submitted but
the documentation required under paragraph (2) is not
presented or if the documentation required under
paragraph (2)(A) is presented but such documentation is
not verified under paragraph (3)--
(A) the institution--
(i) shall provide a reasonable
opportunity to submit to the
institution evidence indicating a
satisfactory immigration status, and
(ii) may not delay, deny, reduce, or
terminate the individual's eligibility
for the grant, loan, or work assistance
on the basis of the individual's
immigration status until such a
reasonable opportunity has been
provided; and
(B) if there are submitted documents which
the institution determines constitute
reasonable evidence indicating such status--
(i) the institution shall transmit to
the Immigration and Naturalization
Service either photostatic or other
similar copies of such documents, or
information from such documents, as
specified by the Immigration and
Naturalization Service, for official
verification,
(ii) pending such verification, the
institution may not delay, deny,
reduce, or terminate the individual's
eligibility for the grant, loan, or
work assistance on the basis of the
individual's immigration status, and
(iii) the institution shall not be
liable for the consequences of any
action, delay, or failure of the
Service to conduct such verification.
(h) Limitations of Enforcement Actions Against
Institutions.--The Secretary shall not take any compliance,
disallowance, penalty, or other regulatory action against an
institution of higher education with respect to any error in
the institution's determination to make a student eligible for
a grant, loan, or work assistance based on citizenship or
immigration status--
(1) if the institution has provided such eligibility
based on a verification of satisfactory immigration
status by the Immigration and Naturalization Service,
(2) because the institution, under subsection
(g)(4)(A)(i), was required to provide a reasonable
opportunity to submit documentation, or
(3) because the institution, under subsection
(g)(4)(B)(i), was required to wait for the response of
the Immigration and Naturalization Service to the
institution's request for official verification of the
immigration status of the student.
(i) Validity of Loan Guarantees for Loan Payments Made Before
Immigration Status Verification Completed.--Notwithstanding
subsection (h), if--
(1) a guaranty is made under this title for a loan
made with respect to an individual,
(2) at the time the guaranty is entered into, the
provisions of subsection (h) had been complied with,
(3) amounts are paid under the loan subject to such
guaranty, and
(4) there is a subsequent determination that, because
of an unsatisfactory immigration status, the individual
is not eligible for the loan,
the official of the institution making the determination shall
notify and instruct the entity making the loan to cease further
payments under the loan, but such guaranty shall not be voided
or otherwise nullified with respect to such payments made
before the date the entity receives the notice.
(k) Special Rule for Correspondence Courses.--A student shall
not be eligible to receive grant, loan, or work assistance
under this title for a correspondence course unless such course
is part of a program leading to an associate, bachelor or
graduate degree.
(l) Courses Offered Through Distance Education.--
(1) Relation to correspondence courses.--
(A) In general.--A student enrolled in a
course of instruction at an institution of
higher education that is offered principally
through distance education and leads to a
recognized certificate, or recognized
associate, recognized baccalaureate, or
recognized graduate degree, conferred by such
institution, shall not be considered to be
enrolled in correspondence courses.
(B) Exception.--An institution of higher
education referred to in subparagraph (A) shall
not include an institution or school described
in section 3(3)(C) of the Carl D. Perkins
Career and Technical Education Act of 2006.
(2) Reductions of financial aid.--A student's
eligibility to receive grants, loans, or work
assistance under this title shall be reduced if a
financial aid officer determines under the
discretionary authority provided in section 479A that
distance education results in a substantially reduced
cost of attendance to such student.
(3) Special rule.--For award years beginning prior to
July 1, 2008, the Secretary shall not take any
compliance, disallowance, penalty, or other action
based on a violation of this subsection against a
student or an eligible institution when such action
arises out of such institution's prior award of student
assistance under this title if the institution
demonstrates to the satisfaction of the Secretary that
its course of instruction would have been in
conformance with the requirements of this subsection.
(m) Students With a First Baccalaureate or Professional
Degree.--A student shall not be ineligible for assistance under
parts B, C, D, and E of this title because such student has
previously received a baccalaureate or professional degree.
(n) Study Abroad.--Nothing in this Act shall be construed to
limit or otherwise prohibit access to study abroad programs
approved by the home institution at which a student is
enrolled. An otherwise eligible student who is engaged in a
program of study abroad approved for academic credit by the
home institution at which the student is enrolled shall be
eligible to receive grant, loan, or work assistance under this
title, without regard to whether such study abroad program is
required as part of the student's degree program.
(o) Verification of Social Security Number.--The Secretary of
Education, in cooperation with the Commissioner of the Social
Security Administration, shall verify any social security
number provided by a student to an eligible institution under
subsection (a)(4) and shall enforce the following conditions:
(1) Except as provided in paragraphs (2) and (3), an
institution shall not deny, reduce, delay, or terminate
a student's eligibility for assistance under this part
because social security number verification is pending.
(2) If there is a determination by the Secretary that
the social security number provided to an eligible
institution by a student is incorrect, the institution
shall deny or terminate the student's eligibility for
any grant, loan, or work assistance under this title
until such time as the student provides documented
evidence of a social security number that is determined
by the institution to be correct.
(3) If there is a determination by the Secretary that
the social security number provided to an eligible
institution by a student is incorrect, and a correct
social security number cannot be provided by such
student, and a loan has been guaranteed for such
student under part B of this title, the institution
shall notify and instruct the lender and guaranty
agency making and guaranteeing the loan, respectively,
to cease further disbursements of the loan, but such
guaranty shall not be voided or otherwise nullified
with respect to such disbursements made before the date
that the lender and the guaranty agency receives such
notice.
(4) Nothing in this subsection shall permit the
Secretary to take any compliance, disallowance,
penalty, or other regulatory action against--
(A) any institution of higher education with
respect to any error in a social security
number, unless such error was a result of fraud
on the part of the institution; or
(B) any student with respect to any error in
a social security number, unless such error was
a result of fraud on the part of the student.
(p) Use of Income Data With IRS.--The Secretary, in
cooperation with the Secretary of the Treasury, shall fulfill
the data transfer requirements under section 6103(l)(13) of the
Internal Revenue Code of 1986 and the procedure and
requirements outlined in section 494.
(q) Students With Intellectual Disabilities.--
(1) Definitions.--In this subsection the terms
``comprehensive transition and postsecondary program
for students with intellectual disabilities'' and
``student with an intellectual disability'' have the
meanings given the terms in section 760.
(2) Requirements.--Notwithstanding subsections (a),
(c), and (d), in order to receive any grant or work
assistance under section 401, subpart 3 of part A, or
part C, a student with an intellectual disability
shall--
(A) be enrolled or accepted for enrollment in
a comprehensive transition and postsecondary
program for students with intellectual
disabilities at an institution of higher
education;
(B) be maintaining satisfactory progress in
the program as determined by the institution,
in accordance with standards established by the
institution; and
(C) meet the requirements of paragraphs (3),
(4), (5), and (6) of subsection (a).
(3) Authority.--Notwithstanding any other provision
of law unless such provision is enacted with specific
reference to this section, the Secretary is authorized
to waive any statutory provision applicable to the
student financial assistance programs under section
401, subpart 3 of part A, or part C (other than a
provision of part F related to such a program), or any
institutional eligibility provisions of this title, as
the Secretary determines necessary to ensure that
programs enrolling students with intellectual
disabilities otherwise determined to be eligible under
this subsection may receive such financial assistance.
(4) Regulations.--Notwithstanding regulations
applicable to grant or work assistance awards made
under section 401, subpart 3 of part A, and part C
(other than a regulation under part F related to such
an award), including with respect to eligible programs,
instructional time, credit status, and enrollment
status as described in section 481, the Secretary shall
promulgate regulations allowing programs enrolling
students with intellectual disabilities otherwise
determined to be eligible under this subsection to
receive such awards.
(r) Data Analysis on Access to Federal Student Aid For
Certain Populations.--
(1) Development of the system.--Within one year of
enactment of the Higher Education Opportunity Act, the
Secretary shall analyze data from the FAFSA containing
information regarding the number, characteristics, and
circumstances of students denied Federal student aid
based on a drug conviction while receiving Federal aid.
(2) Results from analysis.--The results from the
analysis of such information shall be made available on
a continuous basis via the Department website and the
Digest of Education Statistics.
(3) Data updating.--The data analyzed under this
subsection shall be updated at the beginning of each
award year and at least one additional time during such
award year.
(4) Report to congress.--The Secretary shall prepare
and submit to the authorizing committees, in each
fiscal year, a report describing the results obtained
by the establishment and operation of the data system
authorized by this subsection.
(s) Exception to Required Registration With the Selective
Service System.--Notwithstanding section 12(f) of the Military
Selective Service Act (50 U.S.C. 3811(f)), an individual shall
not be ineligible for assistance or a benefit provided under
this title if the individual is required under section 3 of
such Act (50 U.S.C. 3802) to present himself for and submit to
registration under such section and fails to do so in
accordance with any proclamation issued under such section, or
in accordance with any rule or regulation issued under such
section.
(t) Confined or Incarcerated Individuals.--
(1) Definitions.--In this subsection:
(A) Confined or incarcerated individual.--The
term ``confined or incarcerated individual''--
(i) means an individual who is
serving a criminal sentence in a
Federal, State, or local penal
institution, prison, jail, reformatory,
work farm, or other similar
correctional institution; and
(ii) does not include an individual
who is in a halfway house or home
detention or is sentenced to serve only
weekends.
(B) Prison education program.--The term
``prison education program'' means an education
or training program that--
(i) is an eligible program under this
title offered by an institution of
higher education (as defined in section
101 or 102(a)(1)(B));
(ii) is offered by an institution
that has been approved to operate in a
correctional facility by the
appropriate State department of
corrections or other entity that is
responsible for overseeing correctional
facilities, or by the Bureau of
Prisons;
(iii) has been determined by the
appropriate State department of
corrections or other entity that is
responsible for overseeing correctional
facilities, or by the Bureau of
Prisons, to be operating in the best
interest of students, the determination
of which shall be made by the State
department of corrections or other
entity or by the Bureau of Prisons,
respectively, and may be based on--
(I) rates of confined or
incarcerated individuals
continuing their education
post-release;
(II) job placement rates for
such individuals;
(III) earnings for such
individuals;
(IV) rates of recidivism for
such individuals;
(V) the experience,
credentials, and rates of
turnover or departure of
instructors;
(VI) the transferability of
credits for courses available
to confined or incarcerated
individuals and the
applicability of such credits
toward related degree or
certificate programs; or
(VII) offering relevant
academic and career advising
services to participating
confined or incarcerated
individuals while they are
confined or incarcerated, in
advance of reentry, and upon
release;
(iv) offers transferability of
credits to at least 1 institution of
higher education (as defined in section
101 or 102(a)(1)(B)) in the State in
which the correctional facility is
located, or, in the case of a Federal
correctional facility, in the State in
which most of the individuals confined
or incarcerated in such facility will
reside upon release;
(v) is offered by an institution that
has not been subject, during the 5
years preceding the date of the
determination, to--
(I) any suspension, emergency
action, or termination of
programs under this title;
(II) any adverse action by
the institution's accrediting
agency or association; or
(III) any action by the State
to revoke a license or other
authority to operate;
(vi) satisfies any applicable
educational requirements for
professional licensure or
certification, including licensure or
certification examinations needed to
practice or find employment in the
sectors or occupations for which the
program prepares the individual, in the
State in which the correctional
facility is located or, in the case of
a Federal correctional facility, in the
State in which most of the individuals
confined or incarcerated in such
facility will reside upon release; and
(vii) does not offer education that
is designed to lead to licensure or
employment for a specific job or
occupation in the State if such job or
occupation typically involves
prohibitions on the licensure or
employment of formerly incarcerated
individuals in the State in which the
correctional facility is located, or,
in the case of a Federal correctional
facility, in the State in which most of
the individuals confined or
incarcerated in such facility will
reside upon release.
(2) Technical assistance.--The Secretary, in
collaboration with the Attorney General, shall provide
technical assistance and guidance to the Bureau of
Prisons, State departments of corrections, and other
entities that are responsible for overseeing
correctional facilities in making determinations under
paragraph (1)(B)(iii).
(3) Federal pell grant eligibility.--Notwithstanding
subsection (a), in order for a confined or incarcerated
individual who otherwise meets the eligibility
requirements of this title to be eligible to receive a
Federal Pell Grant under section 401, the individual
shall be enrolled or accepted for enrollment in a
prison education program.
(4) Evaluation.--
(A) In general.--Not later than 1 year after
the date of enactment of the FAFSA
Simplification Act, in order to evaluate and
improve the impact of activities supported
under this subsection, the Secretary, in
partnership with the Director of the Institute
of Education Sciences, shall award 1 or more
grants or contracts to, or enter into
cooperative agreements with, experienced public
and private institutions and organizations to
enable the institutions and organizations to
conduct an external evaluation that shall--
(i) assess the ability of confined or
incarcerated individuals to access and
complete the Free Application for
Federal Student Aid;
(ii) examine in-custody outcomes and
post-release outcomes related to
providing Federal Pell Grants to
confined or incarcerated individuals,
including--
(I) attainment of a
postsecondary degree or
credential;
(II) safety in penal
institutions with prison
education programs;
(III) the size of waiting
lists for prison education
programs;
(IV) the extent to which such
individuals continue their
education post-release;
(V) employment and earnings
outcomes for such individuals;
and
(VI) rates of recidivism for
such individuals;
(iii) track individuals who received
Federal Pell Grants under subpart 1 of
part A at 1, 3, and 5 years after the
individuals' release from confinement
or incarceration; and
(iv) examine the extent to which
institutions provide re-entry or
relevant career services to
participating confined or incarcerated
individuals as part of the prison
education program and the efficacy of
such services, if offered.
(B) Report.--Beginning not later than 1 year
after the Secretary awards the grant, contract,
or cooperative agreement described in
subparagraph (A) and annually thereafter, each
institution of higher education operating a
prison education program under this subsection
shall submit a report to the Secretary on
activities assisted and students served under
this subsection, which shall include the
information, as applicable, contained in
clauses (i) through (iv) of subparagraph (A).
(5) Report.--Not later than 1 year after the date of
enactment of the FAFSA Simplification Act and on at
least an annual basis thereafter, the Secretary shall
submit to the authorizing committees, and make publicly
available on the website of the Department, a report on
the--
(A) impact of this subsection which shall
include, at a minimum--
(i) the names and types of
institutions of higher education
offering prison education programs at
which confined or incarcerated
individuals are enrolled and receiving
Federal Pell Grants;
(ii) the number of confined or
incarcerated individuals receiving
Federal Pell Grants through each prison
education program;
(iii) the amount of Federal Pell
Grant expenditures for each prison
education program;
(iv) the average amount of Federal
Pell Grant expenditures per full-time
equivalent students in a prison
education program compared to the
average amount of Federal Pell Grant
expenditures per full-time equivalent
students not in prison education
programs;
(v) the demographics of confined or
incarcerated individuals receiving
Federal Pell Grants;
(vi) the cost of attendance for such
individuals;
(vii) the mode of instruction (such
as distance education, in-person
instruction, or a combination of such
modes) for each prison education
program;
(viii) information on the academic
outcomes of such individuals (such as
credits attempted and earned, and
credential and degree completion) and
any information available from student
satisfaction surveys conducted by the
applicable institution or correctional
facility;
(ix) information on post-release
outcomes of such individuals,
including, to the extent practicable,
continued postsecondary enrollment,
earnings, credit transfer, and job
placement;
(x) rates of recidivism for confined
or incarcerated individuals receiving
Federal Pell Grants;
(xi) information on transfers of
confined or incarcerated individuals
between prison education programs;
(xii) the most common programs and
courses offered in prison education
programs; and
(xiii) rates of instructor turnover
or departure for courses offered in
prison education programs;
(B) results of each prison education program
at each institution of higher education,
including the information described in clauses
(ii) through (xiii) of subparagraph (A); and
(C) findings regarding best practices with
respect to prison education programs.
* * * * * * *
SEC. 484B. INSTITUTIONAL REFUNDS.
(a) Return of Title IV Funds.--
(1) In general.--If a recipient of assistance under
this title withdraws from an institution during a
payment period or period of enrollment in which the
recipient began attendance, the amount of grant or loan
assistance (other than assistance received under part
C) to be returned to the title IV programs is
calculated according to paragraph (3) and returned in
accordance with subsection (b).
(2) Leave of absence.--
(A) Leave not treated as withdrawal.--In the
case of a student who takes 1 or more leaves of
absence from an institution for not more than a
total of 180 days in any 12-month period, the
institution may consider the student as not
having withdrawn from the institution during
the leave of absence, and not calculate the
amount of grant and loan assistance provided
under this title that is to be returned in
accordance with this section if--
(i) the institution has a formal
policy regarding leaves of absence;
(ii) the student followed the
institution's policy in requesting a
leave of absence; and
(iii) the institution approved the
student's request in accordance with
the institution's policy.
(B) Consequences of failure to return.--If a
student does not return to the institution at
the expiration of an approved leave of absence
that meets the requirements of subparagraph
(A), the institution shall calculate the amount
of grant and loan assistance provided under
this title that is to be returned in accordance
with this section based on the day the student
withdrew (as determined under subsection (c)).
(3) Calculation of amount of title iv assistance
earned.--
(A) In general.--The amount of grant or loan
assistance under this title that is earned by
the recipient for purposes of this section is
calculated by--
(i) determining the percentage of
grant and loan assistance under this
title that has been earned by the
student, as described in subparagraph
(B); and
(ii) applying such percentage to the
total amount of such grant and loan
assistance that was disbursed (and that
could have been disbursed) to the
student, or on the student's behalf,
for the payment period or period of
enrollment for which the assistance was
awarded, as of the day the student
withdrew.
(B) Percentage earned.--For purposes of
subparagraph (A)(i), the percentage of grant or
loan assistance under this title that has been
earned by the student is--
(i) equal to the percentage of the
payment period or period of enrollment
for which assistance was awarded that
was completed (as determined in
accordance with subsection (d)) as of
the day the student withdrew, provided
that such date occurs on or before the
completion of 60 percent of the payment
period or period of enrollment; or
(ii) 100 percent, if the day the
student withdrew occurs after the
student has completed (as determined in
accordance with subsection (d)) 60
percent of the payment period or period
of enrollment.
(C) Percentage and amount not earned.--For
purposes of subsection (b), the amount of grant
and loan assistance awarded under this title
that has not been earned by the student shall
be calculated by--
(i) determining the complement of the
percentage of grant assistance under
subparts 1 and 3 of part A, or loan
assistance under parts B, D, and E,
that has been earned by the student
described in subparagraph (B); and
(ii) applying the percentage
determined under clause (i) to the
total amount of such grant and loan
assistance that was disbursed (and that
could have been disbursed) to the
student, or on the student's behalf,
for the payment period or period of
enrollment, as of the day the student
withdrew.
(4) Differences between amounts earned and amounts
received.--
(A) In general.--After determining the
eligibility of the student for a late
disbursement or post-withdrawal disbursement
(as required in regulations prescribed by the
Secretary), the institution of higher education
shall contact the borrower and obtain
confirmation that the loan funds are still
required by the borrower. In making such
contact, the institution shall explain to the
borrower the borrower's obligation to repay the
funds following any such disbursement. The
institution shall document in the borrower's
file the result of such contact and the final
determination made concerning such
disbursement.
(B) Return.--If the student has received more
grant or loan assistance than the amount earned
as calculated under paragraph (3)(A), the
unearned funds shall be returned by the
institution or the student, or both, as may be
required under paragraphs (1) and (2) of
subsection (b), to the programs under this
title in the order specified in subsection
(b)(3).
(b) Return of Title IV Program Funds.--
(1) Responsibility of the institution.--The
institution shall return not later than 45 days from
the determination of withdrawal, in the order specified
in paragraph (3), the lesser of--
(A) the amount of grant and loan assistance
awarded under this title that has not been
earned by the student, as calculated under
subsection (a)(3)(C); or
(B) an amount equal to--
(i) the total institutional charges
incurred by the student for the payment
period or period of enrollment for
which such assistance was awarded;
multiplied by
(ii) the percentage of grant and loan
assistance awarded under this title
that has not been earned by the
student, as described in subsection
(a)(3)(C)(i).
(2) Responsibility of the student.--
(A) In general.--The student shall return
assistance that has not been earned by the
student as described in subsection
(a)(3)(C)(ii) in the order specified in
paragraph (3) minus the amount the institution
is required to return under paragraph (1).
(B) Special rule.--The student (or parent in
the case of funds due to a loan borrowed by a
parent under part B or D) shall return or
repay, as appropriate, the amount determined
under subparagraph (A) to--
(i) a loan program under this title
in accordance with the terms of the
loan; and
(ii) a grant program under this
title, as an overpayment of such grant
and shall be subject to--
(I) repayment arrangements
satisfactory to the
institution; or
(II) overpayment collection
procedures prescribed by the
Secretary.
(C) Grant overpayment requirements.--
(i) In general.--Notwithstanding
subparagraphs (A) and (B), a student
shall only be required to return grant
assistance in the amount (if any) by
which--
(I) the amount to be returned
by the student (as determined
under subparagraphs (A) and
(B)), exceeds
(II) 50 percent of the total
grant assistance received by
the student under this title
for the payment period or
period of enrollment.
(ii) Minimum.--A student shall not be
required to return amounts of $50 or
less.
(D) Waivers of federal pell grant repayment
by students affected by disasters.--The
Secretary may waive the amounts that students
are required to return under this section with
respect to Federal Pell Grants if the
withdrawals on which the returns are based are
withdrawals by students--
(i) who were residing in, employed
in, or attending an institution of
higher education that is located in an
area in which the President has
declared that a major disaster exists,
in accordance with section 401 of the
Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C.
5170);
(ii) whose attendance was interrupted
because of the impact of the disaster
on the student or the institution; and
(iii) whose withdrawal ended within
the academic year during which the
designation occurred or during the next
succeeding academic year.
(E) Waivers of grant assistance repayment by
students affected by disasters.--In addition to
the waivers authorized by subparagraph (D), the
Secretary may waive the amounts that students
are required to return under this section with
respect to any other grant assistance under
this title if the withdrawals on which the
returns are based are withdrawals by students--
(i) who were residing in, employed
in, or attending an institution of
higher education that is located in an
area in which the President has
declared that a major disaster exists,
in accordance with section 401 of the
Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C.
5170);
(ii) whose attendance was interrupted
because of the impact of the disaster
on the student or the institution; and
(iii) whose withdrawal ended within
the academic year during which the
designation occurred or during the next
succeeding academic year.
(3) Order of return of title iv funds.--
(A) In general.--Excess funds returned by the
institution or the student, as appropriate, in
accordance with paragraph (1) or (2),
respectively, shall be credited to outstanding
balances on loans made under this title to the
student or on behalf of the student for the
payment period or period of enrollment for
which a return of funds is required. Such
excess funds shall be credited in the following
order:
(i) To outstanding balances on loans
made under section 428H for the payment
period or period of enrollment for
which a return of funds is required.
(ii) To outstanding balances on loans
made under section 428 for the payment
period or period of enrollment for
which a return of funds is required.
(iii) To outstanding balances on
unsubsidized loans (other than parent
loans) made under part D for the
payment period or period of enrollment
for which a return of funds is
required.
(iv) To outstanding balances on
subsidized loans made under part D for
the payment period or period of
enrollment for which a return of funds
is required.
(v) To outstanding balances on loans
made under part E for the payment
period or period of enrollment for
which a return of funds is required.
(vi) To outstanding balances on loans
made under section 428B for the payment
period or period of enrollment for
which a return of funds is required.
(vii) To outstanding balances on
parent loans made under part D for the
payment period or period of enrollment
for which a return of funds is
required.
(B) Remaining excesses.--If excess funds
remain after repaying all outstanding loan
amounts, the remaining excess shall be credited
in the following order:
(i) To awards under subpart 1 of part
A for the payment period or period of
enrollment for which a return of funds
is required.
(ii) To awards under subpart 3 of
part A for the payment period or period
of enrollment for which a return of
funds is required.
(iii) To other assistance awarded
under this title for which a return of
funds is required.
(c) Withdrawal Date.--
(1) In general.--In this section, the term ``day the
student withdrew''--
(A) is the date that the institution
determines--
(i) the student began the withdrawal
process prescribed by the institution;
(ii) the student otherwise provided
official notification to the
institution of the intent to withdraw;
or
(iii) in the case of a student who
does not begin the withdrawal process
or otherwise notify the institution of
the intent to withdraw, the date that
is the mid-point of the payment period
for which assistance under this title
was disbursed or a later date
documented by the institution; or
(B) for institutions required to take
attendance, is determined by the institution
from such attendance records.
(2) Special rule.--Notwithstanding paragraph (1), if
the institution determines that a student did not begin
the withdrawal process, or otherwise notify the
institution of the intent to withdraw, due to illness,
accident, grievous personal loss, or other such
circumstances beyond the student's control, the
institution may determine the appropriate withdrawal
date.
(d) Percentage of the Payment Period or Period of Enrollment
Completed.--For purposes of subsection (a)(3)(B), the
percentage of the payment period or period of enrollment for
which assistance was awarded that was completed, is
determined--
(1) in the case of a program that is measured in
credit hours, by dividing the total number of calendar
days comprising the payment period or period of
enrollment for which assistance is awarded into the
number of calendar days completed in that period as of
the day the student withdrew; and
(2) in the case of a program that is measured in
clock hours, by dividing the total number of clock
hours comprising the payment period or period of
enrollment for which assistance is awarded into the
number of clock hours scheduled to be completed by the
student in that period as of the day the student
withdrew.
(e) Effective Date.--The provisions of this section shall
take effect 2 years after the date of enactment of the Higher
Education Amendments of 1998. An institution of higher
education may choose to implement such provisions prior to that
date.
(f) Reservation of Funds for PROMISE Grants.--Notwithstanding
any other provision of law, the Secretary shall reserve the
funds returned to the Secretary under this section for 1 year
after the return of such funds for the purpose of awarding
PROMISE grants in accordance with subpart 4 of part A of this
title.
* * * * * * *
SEC. 485. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION FOR
STUDENTS.
(a) Information Dissemination Activities.--(1) Each eligible
institution participating in any program under this title shall
carry out information dissemination activities for prospective
and enrolled students (including those attending or planning to
attend less than full time) regarding the institution and all
financial assistance under this title. The information required
by this section shall be produced and be made readily available
upon request, through appropriate publications, mailings, and
electronic media, to an enrolled student and to any prospective
student. Each eligible institution shall, on an annual basis,
provide to all enrolled students a list of the information that
is required to be provided by institutions to students by this
section and section 444 of the General Education Provisions Act
(commonly known as the ``Family Educational Rights and Privacy
Act of 1974''), together with a statement of the procedures
required to obtain such information. The information required
by this section shall accurately describe--
(A) the student financial assistance programs
available to students who enroll at such institution;
(B) the methods by which such assistance is
distributed among student recipients who enroll at such
institution;
(C) any means, including forms, by which application
for student financial assistance is made and
requirements for accurately preparing such application;
(D) the rights and responsibilities of students
receiving financial assistance under this title;
(E) the cost of attending the institution, including
(i) tuition and fees, (ii) books and supplies, (iii)
estimates of typical student room and board costs or
typical commuting costs, and (iv) any additional cost
of the program in which the student is enrolled or
expresses a specific interest;
(F) a statement of--
(i) the requirements of any refund policy
with which the institution is required to
comply;
(ii) the requirements under section 484B for
the return of grant or loan assistance provided
under this title; and
(iii) the requirements for officially
withdrawing from the institution;
(G) the academic program of the institution,
including (i) the current degree programs and other
educational and training programs, (ii) the
instructional, laboratory, and other physical plant
facilities which relate to the academic program, (iii)
the faculty and other instructional personnel, and (iv)
any plans by the institution for improving the academic
program of the institution;
(H) each person designated under subsection (c) of
this section, and the methods by which and locations in
which any person so designated may be contacted by
students and prospective students who are seeking
information required by this subsection;
(I) special facilities and services available to
students with disabilities;
(J) the names of associations, agencies, or
governmental bodies which accredit, approve, or license
the institution and its programs, and the procedures
under which any current or prospective student may
obtain or review upon request a copy of the documents
describing the institution's accreditation, approval,
or licensing;
(K) the standards which the student must maintain in
order to be considered to be making satisfactory
progress, pursuant to section 484(a)(2);
(L) the completion or graduation rate of certificate-
or degree-seeking, full-time, undergraduate students
entering such institutions;
(M) the terms and conditions of the loans
that students receive under parts B, D, and E;
(N) that enrollment in a program of study abroad
approved for credit by the home institution may be
considered enrollment in the home institution for
purposes of applying for Federal student financial
assistance;
(O) the campus crime report prepared by the
institution pursuant to subsection (f), including all
required reporting categories;
(P) institutional policies and sanctions
related to copyright infringement, including--
(i) an annual disclosure that
explicitly informs students that
unauthorized distribution of
copyrighted material, including
unauthorized peer-to-peer file sharing,
may subject the students to civil and
criminal liabilities;
(ii) a summary of the penalties for
violation of Federal copyright laws;
and
(iii) a description of the
institution's policies with respect to
unauthorized peer-to-peer file sharing,
including disciplinary actions that are
taken against students who engage in
unauthorized distribution of
copyrighted materials using the
institution's information technology
system;
(Q) student body diversity at the
institution, including information on the
percentage of enrolled, full-time students
who--
(i) are male;
(ii) are female;
(iii) receive a Federal Pell Grant;
and
(iv) are a self-identified member of
a major racial or ethnic group;
(R) the placement in employment of, and types
of employment obtained by, graduates of the
institution's degree or certificate programs,
gathered from such sources as alumni surveys,
student satisfaction surveys, the National
Survey of Student Engagement, the Community
College Survey of Student Engagement, State
data systems, or other relevant sources;
(S) the types of graduate and professional
education in which graduates of the
institution's four-year degree programs
enrolled, gathered from such sources as alumni
surveys, student satisfaction surveys, the
National Survey of Student Engagement, State
data systems, or other relevant sources;
(T) the fire safety report prepared by the
institution pursuant to subsection (i);
(U) the retention rate of certificate- or
degree-seeking, first-time, full-time,
undergraduate students entering such
institution; and
(V) institutional policies regarding
vaccinations.
(2) For the purpose of this section, the term ``prospective
student'' means any individual who has contacted an eligible
institution requesting information concerning admission to that
institution.
(3) In calculating the completion or graduation rate under
subparagraph (L) of paragraph (1) of this subsection or under
subsection (e), a student shall be counted as a completion or
graduation if, within 150 percent of the normal time for
completion of or graduation from the program, the student has
completed or graduated from the program, or enrolled in any
program of an eligible institution for which the prior program
provides substantial preparation. The information required to
be disclosed under such subparagraph--
(A) shall be made available by July 1 each year to
enrolled students and prospective students prior to the
students enrolling or entering into any financial
obligation; and
(B) shall cover the one-year period ending on August
31 of the preceding year.
(4) For purposes of this section, institutions may--
(A) exclude from the information disclosed in
accordance with subparagraph (L) of paragraph
(1) the completion or graduation rates of
students who leave school to serve in the Armed
Forces, on official church missions, or with a
recognized foreign aid service of the Federal
Government; or
(B) in cases where the students described in
subparagraph (A) represent 20 percent or more
of the certificate- or degree-seeking, full-
time, undergraduate students at the
institution, recalculate the completion or
graduation rates of such students by excluding
from the calculation described in paragraph (3)
the time period during which such students were
not enrolled due to their service in the Armed
Forces, on official church missions, or with a
recognized foreign aid service of the Federal
Government.
(5) The Secretary shall permit any institution of higher
education that is a member of an athletic association or
athletic conference that has voluntarily published completion
or graduation rate data or has agreed to publish data that, in
the opinion of the Secretary, is substantially comparable to
the information required under this subsection, to use such
data to satisfy the requirements of this subsection; and
(6) Each institution may provide supplemental information to
enrolled and prospective students showing the completion or
graduation rate for students described in paragraph (4) or for
students transferring into the institution or information
showing the rate at which students transfer out of the
institution.
(7)(A)(i) Subject to clause (ii), the information
disseminated under paragraph (1)(L), or reported under
subsection (e), shall be disaggregated by gender, by
each major racial and ethnic subgroup, by recipients of
a Federal Pell Grant, by recipients of a loan made
under part B or D (other than a loan made under section
428H or a Federal Direct Unsubsidized Stafford Loan)
who did not receive a Federal Pell Grant, and by
recipients of neither a Federal Pell Grant nor a loan
made under part B or D (other than a loan made under
section 428H or a Federal Direct Unsubsidized Stafford
Loan), if the number of students in such subgroup or
with such status is sufficient to yield statistically
reliable information and reporting will not reveal
personally identifiable information about an individual
student. If such number is not sufficient for such
purposes, then the institution shall note that the
institution enrolled too few of such students to so
disclose or report with confidence and confidentiality.
(ii) The requirements of clause (i) shall not apply
to two-year, degree-granting institutions of higher
education until academic year 2011-2012.
(B)(i) In order to assist two-year degree-granting
institutions of higher education in meeting the
requirements of paragraph (1)(L) and subsection (e),
the Secretary, in consultation with the Commissioner
for Education Statistics, shall, not later than 90 days
after the date of enactment of the Higher Education
Opportunity Act, convene a group of representatives
from diverse institutions of higher education, experts
in the field of higher education policy, state higher
education officials, students, and other stakeholders
in the higher education community, to develop
recommendations regarding the accurate calculation and
reporting of the information required to be
disseminated or reported under paragraph (1)(L) and
subsection (e) by two-year, degree-granting
institutions of higher education. In developing such
recommendations, the group of representatives shall
consider the mission and role of two-year degree-
granting institutions of higher education, and may
recommend additional or alternative measures of student
success for such institutions in light of the mission
and role of such institutions.
(ii) The Secretary shall widely disseminate the
recommendations required under this subparagraph to
two-year, degree-granting institutions of higher
education, the public, and the authorizing committees
not later than 18 months after the first meeting of the
group of representatives convened under clause (i).
(iii) The Secretary shall use the recommendations
from the group of representatives convened under clause
(i) to provide technical assistance to two-year,
degree-granting institutions of higher education in
meeting the requirements of paragraph (1)(L) and
subsection (e).
(iv) The Secretary may modify the information
required to be disseminated or reported under paragraph
(1)(L) or subsection (e) by a two-year, degree-granting
institution of higher education--
(I) based on the recommendations received
under this subparagraph from the group of
representatives convened under clause (i);
(II) to include additional or alternative
measures of student success if the goals of the
provisions of paragraph (1)(L) and subsection
(e) can be met through additional means or
comparable alternatives; and
(III) during the period beginning on the date
of enactment of the Higher Education
Opportunity Act, and ending on June 30, 2011.
(b) Exit Counseling for Borrowers.--(1)(A) Each eligible
institution shall, through financial aid offices or otherwise,
provide counseling to borrowers of loans that are made,
insured, or guaranteed under part B (other than loans made
pursuant to section 428C or loans under section 428B made on
behalf of a student) or made under part D (other than Federal
Direct Consolidation Loans or Federal Direct PLUS Loans made on
behalf of a student) or made under part E of this title prior
to the completion of the course of study for which the borrower
enrolled at the institution or at the time of departure from
such institution. The counseling required by this subsection
shall include--
(i) information on the repayment plans available,
including a description of the different features of
each plan and sample information showing the average
anticipated monthly payments, and the difference in
interest paid and total payments, under each plan;
(ii) debt management strategies that are designed to
facilitate the repayment of such indebtedness;
(iii) an explanation that the borrower has the
options to prepay each loan, pay each loan on a shorter
schedule, and change repayment plans;
(iv) for any loan forgiveness or cancellation
provision of this title, a general description of the
terms and conditions under which the borrower may
obtain full or partial forgiveness or cancellation of
the principal and interest, and a copy of the
information provided by the Secretary under section
485(d);
(v) for any forbearance provision of this title, a
general description of the terms and conditions under
which the borrower may defer repayment of principal or
interest or be granted forbearance, and a copy of the
information provided by the Secretary under section
485(d);
(vi) the consequences of defaulting on a loan,
including adverse credit reports, delinquent debt
collection procedures under Federal law, and
litigation;
(vii) information on the effects of using a
consolidation loan under section 428C or a Federal
Direct Consolidation Loan to discharge the borrower's
loans under parts B, D, and E, including at a minimum--
(I) the effects of consolidation on total
interest to be paid, fees to be paid, and
length of repayment;
(II) the effects of consolidation on a
borrower's underlying loan benefits, including
grace periods, loan forgiveness, cancellation,
and deferment opportunities;
(III) the option of the borrower to prepay
the loan or to change repayment plans; and
(IV) that borrower benefit programs may vary
among different lenders;
(viii) a general description of the types of tax
benefits that may be available to borrowers;
(ix) a notice to borrowers about the availability of
the National Student Loan Data System and how the
system can be used by a borrower to obtain information
on the status of the borrower's loans; and
(x) an explanation that--
(I) the borrower may be
contacted during the repayment
period by third-party student
debt relief companies;
(II) the borrower should use
caution when dealing with those
companies; and
(III) the services that those
companies typically provide are
already offered to borrowers
free of charge through the
Department or the borrower's
servicer; and
(B) In the case of borrower who leaves an institution without
the prior knowledge of the institution, the institution shall
attempt to provide the information described in subparagraph
(A) to the student in writing.
(2)(A) Each eligible institution shall require that the
borrower of a loan made under part B, D, or E submit to the
institution, during the exit interview required by this
subsection--
(i) the borrower's expected permanent address after
leaving the institution (regardless of the reason for
leaving);
(ii) the name and address of the borrower's expected
employer after leaving the institution;
(iii) the address of the borrower's next of kin; and
(iv) any corrections in the institution's records
relating the borrower's name, address, social security
number, references, and driver's license number.
(B) The institution shall, within 60 days after the
interview, forward any corrected or completed information
received from the borrower to the guaranty agency indicated on
the borrower's student aid records.
(C) Nothing in this subsection shall be construed to prohibit
an institution of higher education from utilizing electronic
means to provide personalized exit counseling.
(c) Financial Assistance Information Personnel.--Each
eligible institution shall designate an employee or group of
employees who shall be available on a full-time basis to assist
students or potential students in obtaining information as
specified in subsection (a). The Secretary may, by regulation,
waive the requirement that an employee or employees be
available on a full-time basis for carrying out
responsibilities required under this section whenever an
institution in which the total enrollment, or the portion of
the enrollment participating in programs under this title at
that institution, is too small to necessitate such employee or
employees being available on a full-time basis. No such waiver
may include permission to exempt any such institution from
designating a specific individual or a group of individuals to
carry out the provisions of this section.
(d) Departmental Publication of Descriptions of Assistance
Programs.--(1) The Secretary shall make available to eligible
institutions, eligible lenders, and secondary schools
descriptions of Federal student assistance programs including
the rights and responsibilities of student and institutional
participants, in order to (A) assist students in gaining
information through institutional sources, and (B) assist
institutions in carrying out the provisions of this section, so
that individual and institutional participants will be fully
aware of their rights and responsibilities under such programs.
In particular, such information shall include information to
enable students and prospective students to assess the debt
burden and monthly and total repayment obligations that will be
incurred as a result of receiving loans of varying amounts
under this title. Such information shall also include
information on the various payment options available for
student loans, including income-sensitive and income-based
repayment plans for loans made, insured, or guaranteed under
part B and [income-contingent and] income-based repayment plans
for loans made under part D. In addition, such information
shall include information to enable borrowers to assess the
practical consequences of loan consolidation, including
differences in deferment eligibility, interest rates, monthly
payments, and finance charges, and samples of loan
consolidation profiles to illustrate such consequences. The
Secretary shall provide information concerning the specific
terms and conditions under which students may obtain partial or
total cancellation or defer repayment of loans for service,
shall indicate (in terms of the Federal minimum wage) the
maximum level of compensation and allowances that a student
borrower may receive from a tax-exempt organization to qualify
for a deferment, and shall explicitly state that students may
qualify for such partial cancellations or deferments when they
serve as a paid employee of a tax-exempt organization. The
Secretary shall also provide information on loan forbearance,
including the increase in debt that results from capitalization
of interest. Such information shall be provided by eligible
institutions and eligible lenders at any time that information
regarding loan availability is provided to any student.
(2) The Secretary, to the extent the information is
available, shall compile information describing State and other
prepaid tuition programs and savings programs and disseminate
such information to States, eligible institutions, students,
and parents in departmental publications.
(3) The Secretary, to the extent practicable, shall update
the Department's Internet site to include direct links to
databases that contain information on public and private
financial assistance programs. The Secretary shall only provide
direct links to databases that can be accessed without charge
and shall make reasonable efforts to verify that the databases
included in a direct link are not providing fraudulent
information. The Secretary shall prominently display adjacent
to any such direct link a disclaimer indicating that a direct
link to a database does not constitute an endorsement or
recommendation of the database, the provider of the database,
or any services or products of such provider. The Secretary
shall provide additional direct links to information resources
from which students may obtain information about fraudulent and
deceptive practices in the provision of services related to
student financial aid.
(4) The Secretary shall widely publicize the location of the
information described in paragraph (1) among the public,
eligible institutions, and eligible lenders, and promote the
use of such information by prospective students, enrolled
students, families of prospective and enrolled students, and
borrowers.
(e) Disclosures Required With Respect to Athletically Related
Student Aid.--(1) Each institution of higher education which
participates in any program under this title and is attended by
students receiving athletically related student aid shall
annually submit a report to the Secretary which contains--
(A) the number of students at the institution of
higher education who received athletically related
student aid broken down by race and sex in the
following sports: basketball, football, baseball, cross
country/track, and all other sports combined;
(B) the number of students at the institution of
higher education, broken down by race and sex;
(C) the completion or graduation rate for students at
the institution of higher education who received
athletically related student aid broken down by race
and sex in the following sports: basketball, football,
baseball, cross country/track and all other sports
combined;
(D) the completion or graduation rate for students at
the institution of higher education, broken down by
race and sex;
(E) the average completion or graduation rate for the
4 most recent completing or graduating classes of
students at the institution of higher education who
received athletically related student aid broken down
by race and sex in the following categories:
basketball, football, baseball, cross country/track,
and all other sports combined; and
(F) the average completion or graduation rate for the
4 most recent completing or graduating classes of
students at the institution of higher education broken
down by race and sex.
(2) When an institution described in paragraph (1) of this
subsection offers a potential student athlete athletically
related student aid, such institution shall provide to the
student and the student's parents, guidance counselor, and
coach the information contained in the report submitted by such
institution pursuant to paragraph (1). If the institution is a
member of a national collegiate athletic association that
compiles graduation rate data on behalf of the association's
member institutions that the Secretary determines is
substantially comparable to the information described in
paragraph (1), the distribution of the compilation of such data
to all secondary schools in the United States shall fulfill the
responsibility of the institution to provide information to a
prospective student athlete's guidance counselor and coach.
(3) For purposes of this subsection, institutions
may--
(A) exclude from the reporting requirements
under paragraphs (1) and (2) the completion or
graduation rates of students and student
athletes who leave school to serve in the Armed
Forces, on official church missions, or with a
recognized foreign aid service of the Federal
Government; or
(B) in cases where the students described in
subparagraph (A) represent 20 percent or more
of the certificate- or degree-seeking, full-
time, undergraduate students at the
institution, calculate the completion or
graduation rates of such students by excluding
from the calculations described in paragraph
(1) the time period during which such students
were not enrolled due to their service in the
Armed Forces, on official church missions, or
with a recognized foreign aid service of the
Federal Government.
(4) Each institution of higher education described in
paragraph (1) may provide supplemental information to students
and the Secretary showing the completion or graduation rate
when such completion or graduation rate includes students
transferring into and out of such institution.
(5) The Secretary, using the reports submitted under this
subsection, shall compile and publish a report containing the
information required under paragraph (1) broken down by--
(A) individual institutions of higher education; and
(B) athletic conferences recognized by the National
Collegiate Athletic Association and the National
Association of Intercollegiate Athletics.
(6) The Secretary shall waive the requirements of this
subsection for any institution of higher education that is a
member of an athletic association or athletic conference that
has voluntarily published completion or graduation rate data or
has agreed to publish data that, in the opinion of the
Secretary, is substantially comparable to the information
required under this subsection.
(7) The Secretary, in conjunction with the National Junior
College Athletic Association, shall develop and obtain data on
completion or graduation rates from two-year colleges that
award athletically related student aid. Such data shall, to the
extent practicable, be consistent with the reporting
requirements set forth in this section.
(8) For purposes of this subsection, the term ``athletically
related student aid'' means any scholarship, grant, or other
form of financial assistance the terms of which require the
recipient to participate in a program of intercollegiate
athletics at an institution of higher education in order to be
eligible to receive such assistance.
(9) The reports required by this subsection shall be due each
July 1 and shall cover the 1-year period ending August 31 of
the preceding year.
(f) Disclosure of Campus Security Policy and Campus Crime
Statistics.--(1) Each eligible institution participating in any
program under this title, other than a foreign institution of
higher education, shall on August 1, 1991, begin to collect the
following information with respect to campus crime statistics
and campus security policies of that institution, and beginning
September 1, 1992, and each year thereafter, prepare, publish,
and distribute, through appropriate publications or mailings,
to all current students and employees, and to any applicant for
enrollment or employment upon request, an annual security
report containing at least the following information with
respect to the campus security policies and campus crime
statistics of that institution:
(A) A statement of current campus policies regarding
procedures and facilities for students and others to
report criminal actions or other emergencies occurring
on campus and policies concerning the institution's
response to such reports.
(B) A statement of current policies concerning
security and access to campus facilities, including
campus residences, and security considerations used in
the maintenance of campus facilities.
(C) A statement of current policies concerning campus
law enforcement, including--
(i) the law enforcement authority of campus
security personnel;
(ii) the working relationship of campus
security personnel with State and local law
enforcement agencies, including whether the
institution has agreements with such agencies,
such as written memoranda of understanding, for
the investigation of alleged criminal offenses;
and
(iii) policies which encourage accurate and
prompt reporting of all crimes to the campus
police and the appropriate law enforcement
agencies, when the victim of such crime elects
or is unable to make such a report.
(D) A description of the type and frequency of
programs designed to inform students and employees
about campus security procedures and practices and to
encourage students and employees to be responsible for
their own security and the security of others.
(E) A description of programs designed to inform
students and employees about the prevention of crimes.
(F) Statistics concerning the occurrence on campus,
in or on noncampus buildings or property, and on public
property during the most recent calendar year, and
during the 2 preceding calendar years for which data
are available--
(i) of the following criminal offenses
reported to campus security authorities or
local police agencies:
(I) murder;
(II) sex offenses, forcible or
nonforcible;
(III) robbery;
(IV) aggravated assault;
(V) burglary;
(VI) motor vehicle theft;
(VII) manslaughter;
(VIII) arson;
(IX) arrests or persons referred for
campus disciplinary action for liquor
law violations, drug-related
violations, and weapons possession; and
(ii) of the crimes described in subclauses
(I) through (VIII) of clause (i), of larceny-
theft, simple assault, intimidation, and
destruction, damage, or vandalism of property,
and of other crimes involving bodily injury to
any person, in which the victim is
intentionally selected because of the actual or
perceived race, gender, religion, national
origin, sexual orientation, gender identity,,
ethnicity, or disability of the victim that are
reported to campus security authorities or
local police agencies, which data shall be
collected and reported according to category of
prejudice; and
(iii) of domestic violence, dating violence,
and stalking incidents that were reported to
campus security authorities or local police
agencies.
(G) A statement of policy concerning the monitoring
and recording through local police agencies of criminal
activity at off-campus student organizations which are
recognized by the institution and that are engaged in
by students attending the institution, including those
student organizations with off-campus housing
facilities.
(H) A statement of policy regarding the possession,
use, and sale of alcoholic beverages and enforcement of
State underage drinking laws and a statement of policy
regarding the possession, use, and sale of illegal
drugs and enforcement of Federal and State drug laws
and a description of any drug or alcohol abuse
education programs as required under section 120 of
this Act.
(I) A statement advising the campus community where
law enforcement agency information provided by a State
under section 170101(j) of the Violent Crime Control
and Law Enforcement Act of 1994 (42 U.S.C. 14071(j)),
concerning registered sex offenders may be obtained,
such as the law enforcement office of the institution,
a local law enforcement agency with jurisdiction for
the campus, or a computer network address.
(J) A statement of current campus policies
regarding immediate emergency response and
evacuation procedures, including the use of
electronic and cellular communication (if
appropriate), which policies shall include
procedures to--
(i) immediately notify the campus
community upon the confirmation of a
significant emergency or dangerous
situation involving an immediate threat
to the health or safety of students or
staff occurring on the campus, as
defined in paragraph (6), unless
issuing a notification will compromise
efforts to contain the emergency;
(ii) publicize emergency response and
evacuation procedures on an annual
basis in a manner designed to reach
students and staff; and
(iii) test emergency response and
evacuation procedures on an annual
basis.
(2) Nothing in this subsection shall be construed to
authorize the Secretary to require particular policies,
procedures, or practices by institutions of higher education
with respect to campus crimes or campus security.
(3) Each institution participating in any program under this
title, other than a foreign institution of higher education,
shall make timely reports to the campus community on crimes
considered to be a threat to other students and employees
described in paragraph (1)(F) that are reported to campus
security or local law police agencies. Such reports shall be
provided to students and employees in a manner that is timely,
that withholds the names of victims as confidential, and that
will aid in the prevention of similar occurrences.
(4)(A) Each institution participating in any program under
this title, other than a foreign institution of higher
education, that maintains a police or security department of
any kind shall make, keep, and maintain a daily log, written in
a form that can be easily understood, recording all crimes
reported to such police or security department, including--
(i) the nature, date, time, and general location of
each crime; and
(ii) the disposition of the complaint, if known.
(B)(i) All entries that are required pursuant to this
paragraph shall, except where disclosure of such information is
prohibited by law or such disclosure would jeopardize the
confidentiality of the victim, be open to public inspection
within two business days of the initial report being made to
the department or a campus security authority.
(ii) If new information about an entry into a log becomes
available to a police or security department, then the new
information shall be recorded in the log not later than two
business days after the information becomes available to the
police or security department.
(iii) If there is clear and convincing evidence that the
release of such information would jeopardize an ongoing
criminal investigation or the safety of an individual, cause a
suspect to flee or evade detection, or result in the
destruction of evidence, such information may be withheld until
that damage is no longer likely to occur from the release of
such information.
(5) On an annual basis, each institution participating in any
program under this title, other than a foreign institution of
higher education, shall submit to the Secretary a copy of the
statistics required to be made available under paragraph
(1)(F). The Secretary shall--
(A) review such statistics and report to the
authorizing committees on campus crime statistics by
September 1, 2000;
(B) make copies of the statistics submitted to the
Secretary available to the public; and
(C) in coordination with representatives of
institutions of higher education, identify exemplary
campus security policies, procedures, and practices and
disseminate information concerning those policies,
procedures, and practices that have proven effective in
the reduction of campus crime.
(6)(A) In this subsection:
(i) The terms ``dating violence'', ``domestic
violence'', and ``stalking'' have the meaning given
such terms in section 40002(a) of the Violence Against
Women Act of 1994 (42 U.S.C. 13925(a)).
(ii) The term ``campus'' means--
(I) any building or property owned or
controlled by an institution of higher
education within the same reasonably contiguous
geographic area of the institution and used by
the institution in direct support of, or in a
manner related to, the institution's
educational purposes, including residence
halls; and
(II) property within the same reasonably
contiguous geographic area of the institution
that is owned by the institution but controlled
by another person, is used by students, and
supports institutional purposes (such as a food
or other retail vendor).
(iii) The term ``noncampus building or property''
means--
(I) any building or property owned or
controlled by a student organization recognized
by the institution; and
(II) any building or property (other than a
branch campus) owned or controlled by an
institution of higher education that is used in
direct support of, or in relation to, the
institution's educational purposes, is used by
students, and is not within the same reasonably
contiguous geographic area of the institution.
(iv) The term ``public property'' means all public
property that is within the same reasonably contiguous
geographic area of the institution, such as a sidewalk,
a street, other thoroughfare, or parking facility, and
is adjacent to a facility owned or controlled by the
institution if the facility is used by the institution
in direct support of, or in a manner related to the
institution's educational purposes.
(v) The term ``sexual assault'' means an offense
classified as a forcible or nonforcible sex offense
under the uniform crime reporting system of the Federal
Bureau of Investigation.
(B) In cases where branch campuses of an institution of
higher education, schools within an institution of higher
education, or administrative divisions within an institution
are not within a reasonably contiguous geographic area, such
entities shall be considered separate campuses for purposes of
the reporting requirements of this section.
(7) The statistics described in clauses (i) and (ii) of
paragraph (1)(F) shall be compiled in accordance with the
definitions used in the uniform crime reporting system of the
Department of Justice, Federal Bureau of Investigation, and the
modifications in such definitions as implemented pursuant to
the Hate Crime Statistics Act. For the offenses of domestic
violence, dating violence, and stalking, such statistics shall
be compiled in accordance with the definitions used in section
40002(a) of the Violence Against Women Act of 1994 (42 U.S.C.
13925(a)). Such statistics shall not identify victims of crimes
or persons accused of crimes.
(8)(A) Each institution of higher education participating in
any program under this title and title IV of the Economic
Opportunity Act of 1964, other than a foreign institution of
higher education, shall develop and distribute as part of the
report described in paragraph (1) a statement of policy
regarding--
(i) such institution's programs to prevent domestic
violence, dating violence, sexual assault, and
stalking; and
(ii) the procedures that such institution will follow
once an incident of domestic violence, dating violence,
sexual assault, or stalking has been reported,
including a statement of the standard of evidence that
will be used during any institutional conduct
proceeding arising from such a report.
(B) The policy described in subparagraph (A) shall address
the following areas:
(i) Education programs to promote the awareness of
rape, acquaintance rape, domestic violence, dating
violence, sexual assault, and stalking, which shall
include--
(I) primary prevention and awareness programs
for all incoming students and new employees,
which shall include--
(aa) a statement that the institution
of higher education prohibits the
offenses of domestic violence, dating
violence, sexual assault, and stalking;
(bb) the definition of domestic
violence, dating violence, sexual
assault, and stalking in the applicable
jurisdiction;
(cc) the definition of consent, in
reference to sexual activity, in the
applicable jurisdiction;
(dd) safe and positive options for
bystander intervention that may be
carried out by an individual to prevent
harm or intervene when there is a risk
of domestic violence, dating violence,
sexual assault, or stalking against a
person other than such individual;
(ee) information on risk reduction to
recognize warning signs of abusive
behavior and how to avoid potential
attacks; and
(ff) the information described in
clauses (ii) through (vii); and
(II) ongoing prevention and awareness
campaigns for students and faculty, including
information described in items (aa) through
(ff) of subclause (I).
(ii) Possible sanctions or protective measures that
such institution may impose following a final
determination of an institutional disciplinary
procedure regarding rape, acquaintance rape, domestic
violence, dating violence, sexual assault, or stalking.
(iii) Procedures victims should follow if a sex
offense, domestic violence, dating violence, sexual
assault, or stalking has occurred, including
information in writing about--
(I) the importance of preserving evidence as
may be necessary to the proof of criminal
domestic violence, dating violence, sexual
assault, or stalking, or in obtaining a
protection order;
(II) to whom the alleged offense should be
reported;
(III) options regarding law enforcement and
campus authorities, including notification of
the victim's option to--
(aa) notify proper law enforcement
authorities, including on-campus and
local police;
(bb) be assisted by campus
authorities in notifying law
enforcement authorities if the victim
so chooses; and
(cc) decline to notify such
authorities; and
(IV) where applicable, the rights of victims
and the institution's responsibilities
regarding orders of protection, no contact
orders, restraining orders, or similar lawful
orders issued by a criminal, civil, or tribal
court.
(iv) Procedures for institutional disciplinary action
in cases of alleged domestic violence, dating violence,
sexual assault, or stalking, which shall include a
clear statement that--
(I) such proceedings shall--
(aa) provide a prompt, fair, and
impartial investigation and resolution;
and
(bb) be conducted by officials who
receive annual training on the issues
related to domestic violence, dating
violence, sexual assault, and stalking
and how to conduct an investigation and
hearing process that protects the
safety of victims and promotes
accountability;
(II) the accuser and the accused are entitled
to the same opportunities to have others
present during an institutional disciplinary
proceeding, including the opportunity to be
accompanied to any related meeting or
proceeding by an advisor of their choice; and
(III) both the accuser and the accused shall
be simultaneously informed, in writing, of--
(aa) the outcome of any institutional
disciplinary proceeding that arises
from an allegation of domestic
violence, dating violence, sexual
assault, or stalking;
(bb) the institution's procedures for
the accused and the victim to appeal
the results of the institutional
disciplinary proceeding;
(cc) of any change to the results
that occurs prior to the time that such
results become final; and
(dd) when such results become final.
(v) Information about how the institution will
protect the confidentiality of victims, including how
publicly-available recordkeeping will be accomplished
without the inclusion of identifying information about
the victim, to the extent permissible by law.
(vi) Written notification of students and employees
about existing counseling, health, mental health,
victim advocacy, legal assistance, and other services
available for victims both on-campus and in the
community.
(vii) Written notification of victims about options
for, and available assistance in, changing academic,
living, transportation, and working situations, if so
requested by the victim and if such accommodations are
reasonably available, regardless of whether the victim
chooses to report the crime to campus police or local
law enforcement.
(C) A student or employee who reports to an institution of
higher education that the student or employee has been a victim
of domestic violence, dating violence, sexual assault, or
stalking, whether the offense occurred on or off campus, shall
be provided with a written explanation of the student or
employee's rights and options, as described in clauses (ii)
through (vii) of subparagraph (B).
(9)(A) Each institution participating in any program under
this title, other than a foreign institution of higher
education, shall develop, in accordance with the institution's
statement of policy relating to hazing under paragraph (1)(K),
a report (which shall be referred to as the ``Campus Hazing
Transparency Report'') summarizing findings concerning any
student organization (except that this shall only apply to
student organizations that are established or recognized by the
institution) found to be in violation of an institution's
standards of conduct relating to hazing, as defined by the
institution, (hereinafter referred to in this paragraph as a
``hazing violation'') that requires the institution to--
(i) beginning July 1, 2025, collect information with
respect to hazing incidents at the institution;
(ii) not later than 12 months after the date of the
enactment of the Stop Campus Hazing Act, make the
Campus Hazing Transparency Report publicly available on
the public website of the institution; and
(iii) not less frequently than 2 times each year,
update the Campus Hazing Transparency Report to
include, for the period beginning on the date on which
the Report was last published and ending on the date on
which such update is submitted, each incident involving
a student organization for which a finding of
responsibility is issued relating to a hazing
violation, including--
(I) the name of such student organization;
(II) a general description of the violation
that resulted in a finding of responsibility,
including whether the violation involved the
abuse or illegal use of alcohol or drugs, the
findings of the institution, and any sanctions
placed on the student organization by the
institution, as applicable; and
(III) the dates on which--
(aa) the incident was alleged to have
occurred;
(bb) the investigation into the
incident was initiated;
(cc) the investigation ended with a
finding that a hazing violation
occurred; and
(dd) the institution provided notice
to the student organization that the
incident resulted in a hazing
violation.
(B) The Campus Hazing Transparency Report may include--
(i) to satisfy the requirements of this paragraph,
information that--
(I) is included as part of a report published
by the institution; and
(II) meets the requirements of the Campus
Hazing Transparency Report; and
(ii) any additional information--
(I) determined by the institution to be
necessary; or
(II) reported as required by State law.
(C) The Campus Hazing Transparency Report shall not include
any personally identifiable information, including any
information that would reveal personally identifiable
information, about any individual student in accordance with
section 444 of the General Education Provisions Act (commonly
known as the ``Family Educational Rights and Privacy Act of
1974'').
(D) The institution shall publish, in a prominent location on
the public website of the institution, the Campus Hazing
Transparency Report, including--
(i) a statement notifying the public of the annual
availability of statistics on hazing pursuant to the
report required under paragraph (1)(F), including a
link to such report;
(ii) information about the institution's policies
relating to hazing under paragraph (1)(K) and
applicable local, State, and Tribal laws on hazing; and
(iii) the information included in each update
required under subparagraph (A)(iii), which shall be
maintained for a period of 5 calendar years from the
date of publication of such update.
(E) The institution may include, as part of the publication
of the Campus Hazing Transparency Report under subparagraph
(D), a description of the purposes of, and differences
between--
(i) the report required under paragraph (1)(F); and
(ii) the Campus Hazing Transparency Report required
under this paragraph.
(F) For purposes of this paragraph, the definition of
``campus'' under paragraph (6)(A)(ii) shall not apply.
(G) An institution described in subparagraph (A) is not
required to--
(i) develop the Campus Hazing Transparency Report
under this subsection until such institution has a
finding of a hazing violation; or
(ii) update the Campus Hazing Transparency Report in
accordance with clause (iii) of subparagraph (A) for a
period described in such clause if such institution
does not have a finding of a hazing violation for such
period.
(10) The Secretary, in consultation with the Attorney General
of the United States, shall provide technical assistance in
complying with the provisions of this section to an institution
of higher education who requests such assistance.
(11) Nothing in this section shall be construed to require
the reporting or disclosure of privileged information.
(12) The Secretary shall report to the appropriate committees
of Congress each institution of higher education that the
Secretary determines is not in compliance with the reporting
requirements of this subsection.
(13) For purposes of reporting the statistics with respect to
crimes described in paragraph (1)(F), an institution of higher
education shall distinguish, by means of separate categories,
any criminal offenses that occur--
(A) on campus;
(B) in or on a noncampus building or property;
(C) on public property; and
(D) in dormitories or other residential facilities
for students on campus.
(14) Upon a determination pursuant to section 487(c)(3)(B)
that an institution of higher education has substantially
misrepresented the number, location, or nature of the crimes
required to be reported under this subsection, the Secretary
shall impose a civil penalty upon the institution in the same
amount and pursuant to the same procedures as a civil penalty
is imposed under section 487(c)(3)(B).
(15)(A) Nothing in this subsection may be construed to--
(i) create a cause of action against any institution
of higher education or any employee of such an
institution for any civil liability; or
(ii) establish any standard of care.
(B) Notwithstanding any other provision of law, evidence
regarding compliance or noncompliance with this subsection
shall not be admissible as evidence in any proceeding of any
court, agency, board, or other entity, except with respect to
an action to enforce this subsection.
(16) The Secretary shall annually report to the
authorizing committees regarding compliance with this
subsection by institutions of higher education,
including an up-to-date report on the Secretary's
monitoring of such compliance.
(17)(A) The Secretary shall seek the advice and counsel of
the Attorney General of the United States concerning the
development, and dissemination to institutions of higher
education, of best practices information about campus safety
and emergencies.
(B) The Secretary shall seek the advice and counsel of the
Attorney General of the United States and the Secretary of
Health and Human Services concerning the development, and
dissemination to institutions of higher education, of best
practices information about preventing and responding to
incidents of domestic violence, dating violence, sexual
assault, and stalking, including elements of institutional
policies that have proven successful based on evidence-based
outcome measurements.
(18) No officer, employee, or agent of an institution
participating in any program under this title shall retaliate,
intimidate, threaten, coerce, or otherwise discriminate against
any individual for exercising their rights or responsibilities
under any provision of this subsection.
(19) This subsection may be cited as the ``Jeanne Clery
Campus Safety Act''.
(g) Data Required.--
(1) In general.--Each coeducational institution of
higher education that participates in any program under
this title, and has an intercollegiate athletic
program, shall annually, for the immediately preceding
academic year, prepare a report that contains the
following information regarding intercollegiate
athletics:
(A) The number of male and female full-time
undergraduates that attended the institution.
(B) A listing of the varsity teams that
competed in intercollegiate athletic
competition and for each such team the
following data:
(i) The total number of participants,
by team, as of the day of the first
scheduled contest for the team.
(ii) Total operating expenses
attributable to such teams, except that
an institution may also report such
expenses on a per capita basis for each
team and expenditures attributable to
closely related teams such as track and
field or swimming and diving, may be
reported together, although such
combinations shall be reported
separately for men's and women's teams.
(iii) Whether the head coach is male
or female and whether the head coach is
assigned to that team on a full-time or
part-time basis. Graduate assistants
and volunteers who serve as head
coaches shall be considered to be head
coaches for the purposes of this
clause.
(iv) The number of assistant coaches
who are male and the number of
assistant coaches who are female for
each team and whether a particular
coach is assigned to that team on a
full-time or part-time basis. Graduate
assistants and volunteers who serve as
assistant coaches shall be considered
to be assistant coaches for the
purposes of this clause.
(C) The total amount of money spent on
athletically related student aid, including the
value of waivers of educational expenses,
separately for men's and women's teams overall.
(D) The ratio of athletically related student
aid awarded male athletes to athletically
related student aid awarded female athletes.
(E) The total amount of expenditures on
recruiting, separately for men's and women's
teams overall.
(F) The total annual revenues generated
across all men's teams and across all women's
teams, except that an institution may also
report such revenues by individual team.
(G) The average annual institutional salary
of the head coaches of men's teams, across all
offered sports, and the average annual
institutional salary of the head coaches of
women's teams, across all offered sports.
(H) The average annual institutional salary
of the assistant coaches of men's teams, across
all offered sports, and the average annual
institutional salary of the assistant coaches
of women's teams, across all offered sports.
(I)(i) The total revenues, and the revenues
from football, men's basketball, women's
basketball, all other men's sports combined and
all other women's sports combined, derived by
the institution from the institution's
intercollegiate athletics activities.
(ii) For the purpose of clause (i), revenues
from intercollegiate athletics activities
allocable to a sport shall include (without
limitation) gate receipts, broadcast revenues,
appearance guarantees and options, concessions,
and advertising, but revenues such as student
activities fees or alumni contributions not so
allocable shall be included in the calculation
of total revenues only.
(J)(i) The total expenses, and the expenses
attributable to football, men's basketball,
women's basketball, all other men's sports
combined, and all other women's sports
combined, made by the institution for the
institution's intercollegiate athletics
activities.
(ii) For the purpose of clause (i), expenses
for intercollegiate athletics activities
allocable to a sport shall include (without
limitation) grants-in-aid, salaries, travel,
equipment, and supplies, but expenses such as
general and administrative overhead not so
allocable shall be included in the calculation
of total expenses only.
(2) Special rule.--For the purposes of paragraph
(1)(G), if a coach has responsibilities for more than
one team and the institution does not allocate such
coach's salary by team, the institution should divide
the salary by the number of teams for which the coach
has responsibility and allocate the salary among the
teams on a basis consistent with the coach's
responsibilities for the different teams.
(3) Disclosure of information to students and
public.--An institution of higher education described
in paragraph (1) shall make available to students and
potential students, upon request, and to the public,
the information contained in the report described in
paragraph (1), except that all students shall be
informed of their right to request such information.
(4) Submission; report; information availability.--
(A) On an annual basis, each institution of higher
education described in paragraph (1) shall provide to
the Secretary, within 15 days of the date that the
institution makes available the report under paragraph
(1), the information contained in the report.
(B) The Secretary shall ensure that the reports
described in subparagraph (A) are made available to the
public within a reasonable period of time.
(C) Not later than 180 days after the date of
enactment of the Higher Education Amendments of 1998,
the Secretary shall notify all secondary schools in all
States regarding the availability of the information
made available under paragraph (1), and how such
information may be accessed.
(5) Definition.--For the purposes of this subsection,
the term ``operating expenses'' means expenditures on
lodging and meals, transportation, officials, uniforms
and equipment.
(h) Transfer of Credit Policies.--
(1) Disclosure.--Each institution of higher education
participating in any program under this title shall
publicly disclose, in a readable and comprehensible
manner, the transfer of credit policies established by
the institution which shall include a statement of the
institution's current transfer of credit policies that
includes, at a minimum--
(A) any established criteria the institution
uses regarding the transfer of credit earned at
another institution of higher education; and
(B) a list of institutions of higher
education with which the institution has
established an articulation agreement.
(2) Rule of construction.--Nothing in this subsection
shall be construed to--
(A) authorize the Secretary or the National
Advisory Committee on Institutional Quality and
Integrity to require particular policies,
procedures, or practices by institutions of
higher education with respect to transfer of
credit;
(B) authorize an officer or employee of the
Department to exercise any direction,
supervision, or control over the curriculum,
program of instruction, administration, or
personnel of any institution of higher
education, or over any accrediting agency or
association;
(C) limit the application of the General
Education Provisions Act; or
(D) create any legally enforceable right on
the part of a student to require an institution
of higher education to accept a transfer of
credit from another institution.
(i) Disclosure of Fire Safety Standards and Measures.--
(1) Annual fire safety reports on student housing
required.--Each eligible institution participating in
any program under this title that maintains on-campus
student housing facilities shall, on an annual basis,
publish a fire safety report, which shall contain
information with respect to the campus fire safety
practices and standards of that institution,
including--
(A) statistics concerning the following in
each on-campus student housing facility during
the most recent calendar years for which data
are available:
(i) the number of fires and the cause
of each fire;
(ii) the number of injuries related
to a fire that result in treatment at a
medical facility;
(iii) the number of deaths related to
a fire; and
(iv) the value of property damage
caused by a fire;
(B) a description of each on-campus student
housing facility fire safety system, including
the fire sprinkler system;
(C) the number of regular mandatory
supervised fire drills;
(D) policies or rules on portable electrical
appliances, smoking, and open flames (such as
candles), procedures for evacuation, and
policies regarding fire safety education and
training programs provided to students,
faculty, and staff; and
(E) plans for future improvements in fire
safety, if determined necessary by such
institution.
(2) Report to the secretary.--Each institution
described in paragraph (1) shall, on an annual basis,
submit to the Secretary a copy of the statistics
required to be made available under paragraph (1)(A).
(3) Current information to campus community.--Each
institution described in paragraph (1) shall--
(A) make, keep, and maintain a log, recording
all fires in on-campus student housing
facilities, including the nature, date, time,
and general location of each fire; and
(B) make annual reports to the campus
community on such fires.
(4) Responsibilities of the secretary.--The Secretary
shall--
(A) make the statistics submitted under
paragraph (1)(A) to the Secretary available to
the public; and
(B) in coordination with nationally
recognized fire organizations and
representatives of institutions of higher
education, representatives of associations of
institutions of higher education, and other
organizations that represent and house a
significant number of students--
(i) identify exemplary fire safety
policies, procedures, programs, and
practices, including the installation,
to the technical standards of the
National Fire Protection Association,
of fire detection, prevention, and
protection technologies in student
housing, dormitories, and other
buildings;
(ii) disseminate the exemplary
policies, procedures, programs and
practices described in clause (i) to
the Administrator of the United States
Fire Administration;
(iii) make available to the public
information concerning those policies,
procedures, programs, and practices
that have proven effective in the
reduction of fires; and
(iv) develop a protocol for
institutions to review the status of
their fire safety systems.
(5) Rules of construction.--Nothing in this
subsection shall be construed to--
(A) authorize the Secretary to require
particular policies, procedures, programs, or
practices by institutions of higher education
with respect to fire safety, other than with
respect to the collection, reporting, and
dissemination of information required by this
subsection;
(B) affect section 444 of the General
Education Provisions Act (commonly known as the
``Family Educational Rights and Privacy Act of
1974'') or the regulations issued under section
264 of the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. 1320d-2
note);
(C) create a cause of action against any
institution of higher education or any employee
of such an institution for any civil liability;
or
(D) establish any standard of care.
(6) Compliance report.--The Secretary shall annually
report to the authorizing committees regarding
compliance with this subsection by institutions of
higher education, including an up-to-date report on the
Secretary's monitoring of such compliance.
(7) Evidence.--Notwithstanding any other provision of
law, evidence regarding compliance or noncompliance
with this subsection shall not be admissible as
evidence in any proceeding of any court, agency, board,
or other entity, except with respect to an action to
enforce this subsection.
(j) Missing Person Procedures.--
(1) Option and procedures.--Each institution of
higher education that provides on-campus housing and
participates in any program under this title shall--
(A) establish a missing student notification
policy for students who reside in on-campus
housing that--
(i) informs each such student that
such student has the option to identify
an individual to be contacted by the
institution not later than 24 hours
after the time that the student is
determined missing in accordance with
official notification procedures
established by the institution under
subparagraph (B);
(ii) provides each such student a
means to register confidential contact
information in the event that the
student is determined to be missing for
a period of more than 24 hours;
(iii) advises each such student who
is under 18 years of age, and not an
emancipated individual, that the
institution is required to notify a
custodial parent or guardian not later
24 hours after the time that the
student is determined to be missing in
accordance with such procedures;
(iv) informs each such residing
student that the institution will
notify the appropriate law enforcement
agency not later than 24 hours after
the time that the student is determined
missing in accordance with such
procedures; and
(v) requires, if the campus security
or law enforcement personnel has been
notified and makes a determination that
a student who is the subject of a
missing person report has been missing
for more than 24 hours and has not
returned to the campus, the institution
to initiate the emergency contact
procedures in accordance with the
student's designation; and
(B) establish official notification
procedures for a missing student who resides in
on-campus housing that--
(i) includes procedures for official
notification of appropriate individuals
at the institution that such student
has been missing for more than 24
hours;
(ii) requires any official missing
person report relating to such student
be referred immediately to the
institution's police or campus security
department; and
(iii) if, on investigation of the
official report, such department
determines that the missing student has
been missing for more than 24 hours,
requires--
(I) such department to
contact the individual
identified by such student
under subparagraph (A)(i);
(II) if such student is under
18 years of age, and not an
emancipated individual, the
institution to immediately
contact the custodial parent or
legal guardian of such student;
and
(III) if subclauses (I) or
(II) do not apply to a student
determined to be a missing
person, inform the appropriate
law enforcement agency.
(2) Rule of construction.--Nothing in this subsection
shall be construed--
(A) to provide a private right of action to
any person to enforce any provision of this
subsection; or
(B) to create a cause of action against any
institution of higher education or any employee
of the institution for any civil liability.
(l) Entrance Counseling for Borrowers.--
(1) Disclosure required prior to disbursement.--
(A) In general.--Each eligible institution
shall, at or prior to the time of a
disbursement to a first-time borrower of a loan
made, insured, or guaranteed under part B
(other than a loan made pursuant to section
428C or a loan made on behalf of a student
pursuant to section 428B) or made under part D
(other than a Federal Direct Consolidation Loan
or a Federal Direct PLUS loan made on behalf of
a student), ensure that the borrower receives
comprehensive information on the terms and
conditions of the loan and of the
responsibilities the borrower has with respect
to such loan in accordance with paragraph (2).
Such information--
(i) shall be provided in a simple and
understandable manner; and
(ii) may be provided--
(I) during an entrance
counseling session conduction
in person;
(II) on a separate written
form provided to the borrower
that the borrower signs and
returns to the institution; or
(III) online, with the
borrower acknowledging receipt
of the information.
(B) Use of interactive programs.--The
Secretary shall encourage institutions to carry
out the requirements of subparagraph (A)
through the use of interactive programs that
test the borrower's understanding of the terms
and conditions of the borrower's loans under
part B or D, using simple and understandable
language and clear formatting.
(2) Information to be provided.--The information to
be provided to the borrower under paragraph (1)(A)
shall include the following:
(A) To the extent practicable, the effect of
accepting the loan to be disbursed on the
eligibility of the borrower for other forms of
student financial assistance.
(B) An explanation of the use of the master
promissory note.
(C) Information on how interest accrues and
is capitalized during periods when the interest
is not paid by either the borrower or the
Secretary.
(D) In the case of a loan made under section
428B or 428H, a Federal Direct PLUS Loan, or a
Federal Direct Unsubsidized Stafford Loan, the
option of the borrower to pay the interest
while the borrower is in school.
(E) The definition of half-time enrollment at
the institution, during regular terms and
summer school, if applicable, and the
consequences of not maintaining half-time
enrollment.
(F) An explanation of the importance of
contacting the appropriate offices at the
institution of higher education if the borrower
withdraws prior to completing the borrower's
program of study so that the institution can
provide exit counseling, including information
regarding the borrower's repayment options and
loan consolidation.
(G) Sample monthly repayment amounts based
on--
(i) a range of levels of indebtedness
of--
(I) borrowers of loans under
section 428 or 428H; and
(II) as appropriate, graduate
borrowers of loans under
section 428, 428B, or 428H; or
(ii) the average cumulative
indebtedness of other borrowers in the
same program as the borrower at the
same institution.
(H) The obligation of the borrower to repay
the full amount of the loan, regardless of
whether the borrower completes or does not
complete the program in which the borrower is
enrolled within the regular time for program
completion.
(I) The likely consequences of default on the
loan, including adverse credit reports,
delinquent debt collection procedures under
Federal law, and litigation.
(J) Information on the National Student Loan
Data System and how the borrower can access the
borrower's records.
(K) The name of and contact information for
the individual the borrower may contact if the
borrower has any questions about the borrower's
rights and responsibilities or the terms and
conditions of the loan.
(m) Disclosures of Reimbursements for Service on Advisory
Boards.--
(1) Disclosure.--Each institution of higher education
participating in any program under this title shall
report, on an annual basis, to the Secretary, any
reasonable expenses paid or provided under section
140(d) of the Truth in Lending Act to any employee who
is employed in the financial aid office of the
institution, or who otherwise has responsibilities with
respect to education loans or other financial aid of
the institution. Such reports shall include--
(A) the amount for each specific instance of
reasonable expenses paid or provided;
(B) the name of the financial aid official,
other employee, or agent to whom the expenses
were paid or provided;
(C) the dates of the activity for which the
expenses were paid or provided; and
(D) a brief description of the activity for
which the expenses were paid or provided.
(2) Report to congress.--The Secretary shall
summarize the information received from institutions of
higher education under paragraph (1) in a report and
transmit such report annually to the authorizing
committees.
* * * * * * *
SEC. 487. PROGRAM PARTICIPATION AGREEMENTS.
(a) Required for Programs of Assistance; Contents.--In order
to be an eligible institution for the purposes of any program
authorized under this title, an institution must be an
institution of higher education or an eligible institution (as
that term is defined for the purpose of that program) and
shall, except with respect to a program under subpart 4 of part
A, enter into a program participation agreement with the
Secretary. The agreement shall condition the initial and
continuing eligibility of an institution to participate in a
program upon compliance with the following requirements:
(1) The institution will use funds received by it for
any program under this title and any interest or other
earnings thereon solely for the purpose specified in
and in accordance with the provision of that program.
(2) The institution shall not charge any student a
fee for processing or handling any application, form,
or data required to determine the student's eligibility
for assistance under this title or the amount of such
assistance.
(3) The institution will establish and maintain such
administrative and fiscal procedures and records as may
be necessary to ensure proper and efficient
administration of funds received from the Secretary or
from students under this title, together with
assurances that the institution will provide, upon
request and in a timely fashion, information relating
to the administrative capability and financial
responsibility of the institution to--
(A) the Secretary;
(B) the appropriate guaranty agency; and
(C) the appropriate accrediting agency or
association.
(4) The institution will comply with the provisions
of subsection (c) of this section and the regulations
prescribed under that subsection, relating to fiscal
eligibility.
(5) The institution will submit reports to the
Secretary and, in the case of an institution
participating in a program under part B or part E, to
holders of loans made to the institution's students
under such parts at such times and containing such
information as the Secretary may reasonably require to
carry out the purpose of this title.
(6) The institution will not provide any student with
any statement or certification to any lender under part
B that qualifies the student for a loan or loans in
excess of the amount that student is eligible to borrow
in accordance with sections 425(a), 428(a)(2), and
428(b)(1) (A) and (B).
(7) The institution will comply with the requirements
of section 485.
(8) In the case of an institution that advertises job
placement rates as a means of attracting students to
enroll in the institution, the institution will make
available to prospective students, at or before the
time of application (A) the most recent available data
concerning employment statistics, graduation
statistics, and any other information necessary to
substantiate the truthfulness of the advertisements,
and (B) relevant State licensing requirements of the
State in which such institution is located for any job
for which the course of instruction is designed to
prepare such prospective students.
(9) In the case of an institution participating in a
program under part B or D, the institution will inform
all eligible borrowers enrolled in the institution
about the availability and eligibility of such
borrowers for State grant assistance from the State in
which the institution is located, and will inform such
borrowers from another State of the source for further
information concerning such assistance from that State.
(10) The institution certifies that it has in
operation a drug abuse prevention program that is
determined by the institution to be accessible to any
officer, employee, or student at the institution.
(11) In the case of any institution whose students
receive financial assistance pursuant to section
484(d), the institution will make available to such
students a program proven successful in assisting
students in obtaining a certificate of high school
equivalency.
(12) The institution certifies that--
(A) the institution has established a campus
security policy; and
(B) the institution has complied with the
disclosure requirements of section 485(f).
(13) The institution will not deny any form of
Federal financial aid to any student who meets the
eligibility requirements of this title on the grounds
that the student is participating in a program of study
abroad approved for credit by the institution.
(14)(A) The institution, in order to participate as
an eligible institution under part B or D, will develop
a Default Management Plan for approval by the Secretary
as part of its initial application for certification as
an eligible institution and will implement such Plan
for two years thereafter.
(B) Any institution of higher education which changes
ownership and any eligible institution which changes
its status as a parent or subordinate institution
shall, in order to participate as an eligible
institution under part B or D, develop a Default
Management Plan for approval by the Secretary and
implement such Plan for two years after its change of
ownership or status.
(C) This paragraph shall not apply in the case of an
institution in which (i) neither the parent nor the
subordinate institution has a cohort default rate in
excess of 10 percent, and (ii) the new owner of such
parent or subordinate institution does not, and has
not, owned any other institution with a cohort default
rate in excess of 10 percent.
(15) The institution acknowledges the authority of
the Secretary, guaranty agencies, lenders, accrediting
agencies, the Secretary of Veterans Affairs, and the
State agencies under subpart 1 of part H to share with
each other any information pertaining to the
institution's eligibility to participate in programs
under this title or any information on fraud and abuse.
(16)(A) The institution will not knowingly employ an
individual in a capacity that involves the
administration of programs under this title, or the
receipt of program funds under this title, who has been
convicted of, or has pled nolo contendere or guilty to,
a crime involving the acquisition, use, or expenditure
of funds under this title, or has been judicially
determined to have committed fraud involving funds
under this title or contract with an institution or
third party servicer that has been terminated under
section 432 involving the acquisition, use, or
expenditure of funds under this title, or who has been
judicially determined to have committed fraud involving
funds under this title.
(B) The institution will not knowingly contract with
or employ any individual, agency, or organization that
has been, or whose officers or employees have been--
(i) convicted of, or pled nolo contendere or
guilty to, a crime involving the acquisition,
use, or expenditure of funds under this title;
or
(ii) judicially determined to have committed
fraud involving funds under this title.
(17) The institution will complete surveys conducted
as a part of the Integrated Postsecondary Education
Data System (IPEDS) or any other Federal postsecondary
institution data collection effort, as designated by
the Secretary, in a timely manner and to the
satisfaction of the Secretary.
(18) The institution will meet the requirements
established pursuant to section 485(g).
(19) The institution will not impose any penalty,
including the assessment of late fees, the denial of
access to classes, libraries, or other institutional
facilities, or the requirement that the student borrow
additional funds, on any student because of the
student's inability to meet his or her financial
obligations to the institution as a result of the
delayed disbursement of the proceeds of a loan made
under this title due to compliance with the provisions
of this title, or delays attributable to the
institution.
(20) The institution will not provide any commission,
bonus, or other incentive payment based directly or
indirectly on success in securing enrollments or
financial aid to any persons or entities engaged in any
student recruiting or admission activities or in making
decisions regarding the award of student financial
assistance, except that this paragraph shall not apply
to the recruitment of foreign students residing in
foreign countries who are not eligible to receive
Federal student assistance.
(21) The institution will meet the requirements
established by the Secretary and accrediting agencies
or associations, and will provide evidence to the
Secretary that the institution has the authority to
operate within a State.
(22) The institution will comply with the refund
policy established pursuant to section 484B.
(23)(A) The institution, if located in a State to
which section 4(b) of the National Voter Registration
Act of 1993 (42 U.S.C. 1973gg-2(b)) does not apply,
will make a good faith effort to distribute a mail
voter registration form, requested and received from
the State, to each student enrolled in a degree or
certificate program and physically in attendance at the
institution, and to make such forms widely available to
students at the institution.
(B) The institution shall request the forms from the
State 120 days prior to the deadline for registering to
vote within the State. If an institution has not
received a sufficient quantity of forms to fulfill this
section from the State within 60 days prior to the
deadline for registering to vote in the State, the
institution shall not be held liable for not meeting
the requirements of this section during that election
year.
(C) This paragraph shall apply to general and special
elections for Federal office, as defined in section
301(3) of the Federal Election Campaign Act of 1971 (2
U.S.C. 431(3)), and to the elections for Governor or
other chief executive within such State).
(D) The institution shall be considered in
compliance with the requirements of
subparagraph (A) for each student to whom the
institution electronically transmits a message
containing a voter registration form acceptable
for use in the State in which the institution
is located, or an Internet address where such a
form can be downloaded, if such information is
in an electronic message devoted exclusively to
voter registration.
[(24) In the case of a proprietary institution of
higher education (as defined in section 102(b)), such
institution will derive not less than ten percent of
such institution's revenues from sources other than
Federal funds that are disbursed or delivered to or on
behalf of a student to be used to attend such
institution (referred to in this paragraph and
subsection (d) as ``Federal education assistance
funds''), as calculated in accordance with subsection
(d)(1), or will be subject to the sanctions described
in subsection (d)(2).]
(25) In the case of an institution that participates
in a loan program under this title, the institution
will--
(A) develop a code of conduct with respect to
such loans with which the institution's
officers, employees, and agents shall comply,
that--
(i) prohibits a conflict of interest
with the responsibilities of an
officer, employee, or agent of an
institution with respect to such loans;
and
(ii) at a minimum, includes the
provisions described in subsection (e);
(B) publish such code of conduct prominently
on the institution's website; and
(C) administer and enforce such code by, at a
minimum, requiring that all of the
institution's officers, employees, and agents
with responsibilities with respect to such
loans be annually informed of the provisions of
the code of conduct.
(26) The institution will, upon written request,
disclose to the alleged victim of any crime of violence
(as that term is defined in section 16 of title 18,
United States Code), or a nonforcible sex offense, the
report on the results of any disciplinary proceeding
conducted by such institution against a student who is
the alleged perpetrator of such crime or offense with
respect to such crime or offense. If the alleged victim
of such crime or offense is deceased as a result of
such crime or offense, the next of kin of such victim
shall be treated as the alleged victim for purposes of
this paragraph.
(27) In the case of an institution that has entered
into a preferred lender arrangement, the institution
will at least annually compile, maintain, and make
available for students attending the institution, and
the families of such students, a list, in print or
other medium, of the specific lenders for loans made,
insured, or guaranteed under this title or private
education loans that the institution recommends,
promotes, or endorses in accordance with such preferred
lender arrangement. In making such list, the
institution shall comply with the requirements of
subsection (h).
(28)(A) The institution will, upon the request of an
applicant for a private education loan, provide to the
applicant the form required under section 128(e)(3) of
the Truth in Lending Act (15 U.S.C. 1638(e)(3)), and
the information required to complete such form, to the
extent the institution possesses such information.
(B) For purposes of this paragraph, the term
``private education loan'' has the meaning given such
term in section 140 of the Truth in Lending Act.
(29) The institution certifies that the institution--
(A) has developed plans to effectively combat
the unauthorized distribution of copyrighted
material, including through the use of a
variety of technology-based deterrents; and
(B) will, to the extent practicable, offer
alternatives to illegal downloading or peer-to-
peer distribution of intellectual property, as
determined by the institution in consultation
with the chief technology officer or other
designated officer of the institution.
(b) Hearings.--(1) An institution that has received written
notice of a final audit or program review determination and
that desires to have such determination reviewed by the
Secretary shall submit to the Secretary a written request for
review not later than 45 days after receipt of notification of
the final audit or program review determination.
(2) The Secretary shall, upon receipt of written notice under
paragraph (1), arrange for a hearing and notify the institution
within 30 days of receipt of such notice the date, time, and
place of such hearing. Such hearing shall take place not later
than 120 days from the date upon which the Secretary notifies
the institution.
(c) Audits; Financial Responsibility; Enforcement of
Standards.--(1) Notwithstanding any other provisions of this
title, the Secretary shall prescribe such regulations as may be
necessary to provide for--
(A)(i) except as provided in clauses (ii) and (iii),
a financial audit of an eligible institution with
regard to the financial condition of the institution in
its entirety, and a compliance audit of such
institution with regard to any funds obtained by it
under this title or obtained from a student or a parent
who has a loan insured or guaranteed by the Secretary
under this title, on at least an annual basis and
covering the period since the most recent audit,
conducted by a qualified, independent organization or
person in accordance with standards established by the
Comptroller General for the audit of governmental
organizations, programs, and functions, and as
prescribed in regulations of the Secretary, the results
of which shall be submitted to the Secretary and shall
be available to cognizant guaranty agencies, eligible
lenders, State agencies, and the appropriate State
agency notifying the Secretary under subpart 1 of part
H, except that the Secretary may modify the
requirements of this clause with respect to
institutions of higher education that are foreign
institutions, and may waive such requirements with
respect to a foreign institution whose students receive
less than $500,000 in loans under this title during the
award year preceding the audit period;
(ii) with regard to an eligible institution which is
audited under chapter 75 of title 31, United States
Code, deeming such audit to satisfy the requirements of
clause (i) for the period covered by such audit; or
(iii) at the discretion of the Secretary, with regard
to an eligible institution (other than an eligible
institution described in section 102(a)(1)(C)) that has
obtained less than $200,000 in funds under this title
during each of the 2 award years that precede the audit
period and submits a letter of credit payable to the
Secretary equal to not less than \1/2\ of the annual
potential liabilities of such institution as determined
by the Secretary, deeming an audit conducted every 3
years to satisfy the requirements of clause (i), except
for the award year immediately preceding renewal of the
institution's eligibility under section 498(g);
(B) in matters not governed by specific program
provisions, the establishment of reasonable standards
of financial responsibility and appropriate
institutional capability for the administration by an
eligible institution of a program of student financial
aid under this title, including any matter the
Secretary deems necessary to the sound administration
of the financial aid programs, such as the pertinent
actions of any owner, shareholder, or person exercising
control over an eligible institution;
(C)(i) except as provided in clause (ii), a
compliance audit of a third party servicer (other than
with respect to the servicer's functions as a lender if
such functions are otherwise audited under this part
and such audits meet the requirements of this clause),
with regard to any contract with an eligible
institution, guaranty agency, or lender for
administering or servicing any aspect of the student
assistance programs under this title, at least once
every year and covering the period since the most
recent audit, conducted by a qualified, independent
organization or person in accordance with standards
established by the Comptroller General for the audit of
governmental organizations, programs, and functions,
and as prescribed in regulations of the Secretary, the
results of which shall be submitted to the Secretary;
or
(ii) with regard to a third party servicer that is
audited under chapter 75 of title 31, United States
Code, such audit shall be deemed to satisfy the
requirements of clause (i) for the period covered by
such audit;
(D)(i) a compliance audit of a secondary market with
regard to its transactions involving, and its servicing
and collection of, loans made under this title, at
least once a year and covering the period since the
most recent audit, conducted by a qualified,
independent organization or person in accordance with
standards established by the Comptroller General for
the audit of governmental organizations, programs, and
functions, and as prescribed in regulations of the
Secretary, the results of which shall be submitted to
the Secretary; or
(ii) with regard to a secondary market that is
audited under chapter 75 of title 31, United States
Code, such audit shall be deemed to satisfy the
requirements of clause (i) for the period covered by
the audit;
(E) the establishment, by each eligible institution
under part B responsible for furnishing to the lender
the statement required by section 428(a)(2)(A)(i), of
policies and procedures by which the latest known
address and enrollment status of any student who has
had a loan insured under this part and who has either
formally terminated his enrollment, or failed to re-
enroll on at least a half-time basis, at such
institution, shall be furnished either to the holder
(or if unknown, the insurer) of the note, not later
than 60 days after such termination or failure to re-
enroll;
(F) the limitation, suspension, or termination of the
participation in any program under this title of an
eligible institution, or the imposition of a civil
penalty under paragraph (3)(B) whenever the Secretary
has determined, after reasonable notice and opportunity
for hearing, that such institution has violated or
failed to carry out any provision of this title, any
regulation prescribed under this title, or any
applicable special arrangement, agreement, or
limitation, except that no period of suspension under
this section shall exceed 60 days unless the
institution and the Secretary agree to an extension or
unless limitation or termination proceedings are
initiated by the Secretary within that period of time;
(G) an emergency action against an institution, under
which the Secretary shall, effective on the date on
which a notice and statement of the basis of the action
is mailed to the institution (by registered mail,
return receipt requested), withhold funds from the
institution or its students and withdraw the
institution's authority to obligate funds under any
program under this title, if the Secretary--
(i) receives information, determined by the
Secretary to be reliable, that the institution
is violating any provision of this title, any
regulation prescribed under this title, or any
applicable special arrangement, agreement, or
limitation,
(ii) determines that immediate action is
necessary to prevent misuse of Federal funds,
and
(iii) determines that the likelihood of loss
outweighs the importance of the procedures
prescribed under subparagraph (D) for
limitation, suspension, or termination,
except that an emergency action shall not exceed 30
days unless limitation, suspension, or termination
proceedings are initiated by the Secretary against the
institution within that period of time, and except that
the Secretary shall provide the institution an
opportunity to show cause, if it so requests, that the
emergency action is unwarranted;
(H) the limitation, suspension, or termination of the
eligibility of a third party servicer to contract with
any institution to administer any aspect of an
institution's student assistance program under this
title, or the imposition of a civil penalty under
paragraph (3)(B), whenever the Secretary has
determined, after reasonable notice and opportunity for
a hearing, that such organization, acting on behalf of
an institution, has violated or failed to carry out any
provision of this title, any regulation prescribed
under this title, or any applicable special
arrangement, agreement, or limitation, except that no
period of suspension under this subparagraph shall
exceed 60 days unless the organization and the
Secretary agree to an extension, or unless limitation
or termination proceedings are initiated by the
Secretary against the individual or organization within
that period of time; and
(I) an emergency action against a third party
servicer that has contracted with an institution to
administer any aspect of the institution's student
assistance program under this title, under which the
Secretary shall, effective on the date on which a
notice and statement of the basis of the action is
mailed to such individual or organization (by
registered mail, return receipt requested), withhold
funds from the individual or organization and withdraw
the individual or organization's authority to act on
behalf of an institution under any program under this
title, if the Secretary--
(i) receives information, determined by the
Secretary to be reliable, that the individual
or organization, acting on behalf of an
institution, is violating any provision of this
title, any regulation prescribed under this
title, or any applicable special arrangement,
agreement, or limitation,
(ii) determines that immediate action is
necessary to prevent misuse of Federal funds,
and
(iii) determines that the likelihood of loss
outweighs the importance of the procedures
prescribed under subparagraph (F), for
limitation, suspension, or termination,
except that an emergency action shall not exceed 30
days unless the limitation, suspension, or termination
proceedings are initiated by the Secretary against the
individual or organization within that period of time,
and except that the Secretary shall provide the
individual or organization an opportunity to show
cause, if it so requests, that the emergency action is
unwarranted.
(2) If an individual who, or entity that, exercises
substantial control, as determined by the Secretary in
accordance with the definition of substantial control in
subpart 3 of part H, over one or more institutions
participating in any program under this title, or, for purposes
of paragraphs (1) (H) and (I), over one or more organizations
that contract with an institution to administer any aspect of
the institution's student assistance program under this title,
is determined to have committed one or more violations of the
requirements of any program under this title, or has been
suspended or debarred in accordance with the regulations of the
Secretary, the Secretary may use such determination,
suspension, or debarment as the basis for imposing an emergency
action on, or limiting, suspending, or terminating, in a single
proceeding, the participation of any or all institutions under
the substantial control of that individual or entity.
(3)(A) Upon determination, after reasonable notice and
opportunity for a hearing, that an eligible institution has
engaged in substantial misrepresentation of the nature of its
educational program, its financial charges, or the
employability of its graduates, the Secretary may suspend or
terminate the eligibility status for any or all programs under
this title of any otherwise eligible institution, in accordance
with procedures specified in paragraph (1)(D) of this
subsection, until the Secretary finds that such practices have
been corrected.
(B)(i) Upon determination, after reasonable notice and
opportunity for a hearing, that an eligible institution--
(I) has violated or failed to carry out any provision
of this title or any regulation prescribed under this
title; or
(II) has engaged in substantial misrepresentation of
the nature of its educational program, its financial
charges, and the employability of its graduates,
the Secretary may impose a civil penalty upon such institution
of not to exceed $25,000 for each violation or
misrepresentation.
(ii) Any civil penalty may be compromised by the Secretary.
In determining the amount of such penalty, or the amount agreed
upon in compromise, the appropriateness of the penalty to the
size of the institution of higher education subject to the
determination, and the gravity of the violation, failure, or
misrepresentation shall be considered. The amount of such
penalty, when finally determined, or the amount agreed upon in
compromise, may be deducted from any sums owing by the United
States to the institution charged.
(4) The Secretary shall publish a list of State agencies
which the Secretary determines to be reliable authority as to
the quality of public postsecondary vocational education in
their respective States for the purpose of determining
eligibility for all Federal student assistance programs.
(5) The Secretary shall make readily available to appropriate
guaranty agencies, eligible lenders, State agencies notifying
the Secretary under subpart 1 of part H, and accrediting
agencies or associations the results of the audits of eligible
institutions conducted pursuant to paragraph (1)(A).
(6) The Secretary is authorized to provide any information
collected as a result of audits conducted under this section,
together with audit information collected by guaranty agencies,
to any Federal or State agency having responsibilities with
respect to student financial assistance, including those
referred to in subsection (a)(15) of this section.
(7) Effective with respect to any audit conducted under this
subsection after December 31, 1988, if, in the course of
conducting any such audit, the personnel of the Department of
Education discover, or are informed of, grants or other
assistance provided by an institution in accordance with this
title for which the institution has not received funds
appropriated under this title (in the amount necessary to
provide such assistance), including funds for which
reimbursement was not requested prior to such discovery or
information, such institution shall be permitted to offset that
amount against any sums determined to be owed by the
institution pursuant to such audit, or to receive reimbursement
for that amount (if the institution does not owe any such
sums).
[(d) Implementation of Non-Federal Revenue Requirement.--
[(1) Calculation.--In making calculations under
subsection (a)(24), a proprietary institution of higher
education shall--
[(A) use the cash basis of accounting, except
in the case of loans described in subparagraph
(D)(i) that are made by the proprietary
institution of higher education;
[(B) consider as revenue only those funds
generated by the institution from--
[(i) tuition, fees, and other
institutional charges for students
enrolled in programs eligible for
assistance under this title;
[(ii) activities conducted by the
institution that are necessary for the
education and training of the
institution's students, if such
activities are--
[(I) conducted on campus or
at a facility under the control
of the institution;
[(II) performed under the
supervision of a member of the
institution's faculty; and
[(III) required to be
performed by all students in a
specific educational program at
the institution; and
[(iii) funds paid by a student, or on
behalf of a student by a party other
than the institution, for an education
or training program that is not
eligible for funds under this title, if
the program--
[(I) is approved or licensed
by the appropriate State
agency;
[(II) is accredited by an
accrediting agency recognized
by the Secretary; or
[(III) provides an industry-
recognized credential or
certification;
[(C) presume that any Federal education
assistance funds that are disbursed or
delivered to or on behalf of a student will be
used to pay the student's tuition, fees, or
other institutional charges, regardless of
whether the institution credits those funds to
the student's account or pays those funds
directly to the student, except to the extent
that the student's tuition, fees, or other
institutional charges are satisfied by--
[(i) grant funds provided by non-
Federal public agencies or private
sources independent of the institution;
[(ii) funds provided under a
contractual arrangement with a Federal,
State, or local government agency for
the purpose of providing job training
to low-income individuals who are in
need of that training;
[(iii) funds used by a student from
savings plans for educational expenses
established by or on behalf of the
student and which qualify for special
tax treatment under the Internal
Revenue Code of 1986; or
[(iv) institutional scholarships
described in subparagraph (D)(iii);
[(D) include institutional aid as revenue to
the school only as follows:
[(i) in the case of loans made by a
proprietary institution of higher
education on or after July 1, 2008 and
prior to July 1, 2012, the net present
value of such loans made by the
institution during the applicable
institutional fiscal year accounted for
on an accrual basis and estimated in
accordance with generally accepted
accounting principles and related
standards and guidance, if the loans--
[(I) are bona fide as
evidenced by enforceable
promissory notes;
[(II) are issued at intervals
related to the institution's
enrollment periods; and
[(III) are subject to regular
loan repayments and
collections;
[(ii) in the case of loans made by a
proprietary institution of higher
education on or after July 1, 2012,
only the amount of loan repayments
received during the applicable
institutional fiscal year, excluding
repayments on loans made and accounted
for as specified in clause (i); and
[(iii) in the case of scholarships
provided by a proprietary institution
of higher education, only those
scholarships provided by the
institution in the form of monetary aid
or tuition discounts based upon the
academic achievements or financial need
of students, disbursed during each
fiscal year from an established
restricted account, and only to the
extent that funds in that account
represent designated funds from an
outside source or from income earned on
those funds;
[(E) in the case of each student who receives
a loan on or after July 1, 2008, and prior to
July 1, 2011, 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) the amount of funds the
institution received under part C,
unless the institution used those funds
to pay a student's institutional
charges;
[(ii) the amount of funds the
institution received under subpart 4 of
part A;
[(iii) the amount of funds provided
by the institution as matching funds
for a program under this title;
[(iv) the amount of funds provided by
the institution for a program under
this title that are required to be
refunded or returned; and
[(v) the amount charged for books,
supplies, and equipment, unless the
institution includes that amount as
tuition, fees, or other institutional
charges.
[(2) Sanctions.--
[(A) Ineligibility.--A proprietary
institution of higher education that fails to
meet a requirement of subsection (a)(24) for
two 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, 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 in which the
institution failed to meet the requirement of
subsection (a)(24), except that such
provisional eligibility shall terminate--
[(i) on the expiration date of the
institution's program participation
agreement under this subsection that is
in effect on the date the Secretary
determines that the institution failed
to meet the requirement of subsection
(a)(24); or
[(ii) in the case that the Secretary
determines that the institution failed
to meet a requirement of subsection
(a)(24) for two consecutive
institutional fiscal years, on the date
the institution is determined
ineligible in accordance with
subparagraph (A).
[(3) Publication on college navigator website.--The
Secretary shall publicly disclose on the College
Navigator website--
[(A) the identity of any proprietary
institution of higher education that fails to
meet a requirement of subsection (a)(24); and
[(B) the extent to which the institution
failed to meet such requirement.
[(4) Report to congress.--Not later than July 1,
2009, and July 1 of each succeeding year, the Secretary
shall submit to the authorizing committees a report
that contains, for each proprietary institution of
higher education that receives assistance under this
title, as provided in the audited financial statements
submitted to the Secretary by each institution pursuant
to the requirements of subsection (a)(24)--
[(A) the amount and percentage of such
institution's revenues received from sources
under this title; and
[(B) the amount and percentage of such
institution's revenues received from other
sources.]
[(e)] (d) Code of Conduct Requirements.--An institution of
higher education's code of conduct, as required under
subsection (a)(25), shall include the following requirements:
(1) Ban on revenue-sharing arrangements.--
(A) Prohibition.--The institution shall not
enter into any revenue-sharing arrangement with
any lender.
(B) Definition.--For purposes of this
paragraph, the term ``revenue-sharing
arrangement'' means an arrangement between an
institution and a lender under which--
(i) a lender provides or issues a
loan that is made, insured, or
guaranteed under this title to students
attending the institution or to the
families of such students; and
(ii) the institution recommends the
lender or the loan products of the
lender and in exchange, the lender pays
a fee or provides other material
benefits, including revenue or profit
sharing, to the institution, an officer
or employee of the institution, or an
agent.
(2) Gift ban.--
(A) Prohibition.--No officer or employee of
the institution who is employed in the
financial aid office of the institution or who
otherwise has responsibilities with respect to
education loans, or agent who has
responsibilities with respect to education
loans, shall solicit or accept any gift from a
lender, guarantor, or servicer of education
loans.
(B) Definition of gift.--
(i) In general.--In this paragraph,
the term ``gift'' means any gratuity,
favor, discount, entertainment,
hospitality, loan, or other item having
a monetary value of more than a de
minimus amount. The term includes a
gift of services, transportation,
lodging, or meals, whether provided in
kind, by purchase of a ticket, payment
in advance, or reimbursement after the
expense has been incurred.
(ii) Exceptions.--The term ``gift''
shall not include any of the following:
(I) Standard material,
activities, or programs on
issues related to a loan,
default aversion, default
prevention, or financial
literacy, such as a brochure, a
workshop, or training.
(II) Food, refreshments,
training, or informational
material furnished to an
officer or employee of an
institution, or to an agent, as
an integral part of a training
session that is designed to
improve the service of a
lender, guarantor, or servicer
of education loans to the
institution, if such training
contributes to the professional
development of the officer,
employee, or agent.
(III) Favorable terms,
conditions, and borrower
benefits on an education loan
provided to a student employed
by the institution if such
terms, conditions, or benefits
are comparable to those
provided to all students of the
institution.
(IV) Entrance and exit
counseling services provided to
borrowers to meet the
institution's responsibilities
for entrance and exit
counseling as required by
subsections (b) and (l) of
section 485, as long as--
(aa) the
institution's staff are
in control of the
counseling, (whether in
person or via
electronic
capabilities); and
(bb) such counseling
does not promote the
products or services of
any specific lender.
(V) Philanthropic
contributions to an institution
from a lender, servicer, or
guarantor of education loans
that are unrelated to education
loans or any contribution from
any lender, guarantor, or
servicer that is not made in
exchange for any advantage
related to education loans.
(VI) State education grants,
scholarships, or financial aid
funds administered by or on
behalf of a State.
(iii) Rule for gifts to family
members.--For purposes of this
paragraph, a gift to a family member of
an officer or employee of an
institution, to a family member of an
agent, or to any other individual based
on that individual's relationship with
the officer, employee, or agent, shall
be considered a gift to the officer,
employee, or agent if--
(I) the gift is given with
the knowledge and acquiescence
of the officer, employee, or
agent; and
(II) the officer, employee,
or agent has reason to believe
the gift was given because of
the official position of the
officer, employee, or agent.
(3) Contracting arrangements prohibited.--
(A) Prohibition.--An officer or employee who
is employed in the financial aid office of the
institution or who otherwise has
responsibilities with respect to education
loans, or an agent who has responsibilities
with respect to education loans, shall not
accept from any lender or affiliate of any
lender any fee, payment, or other financial
benefit (including the opportunity to purchase
stock) as compensation for any type of
consulting arrangement or other contract to
provide services to a lender or on behalf of a
lender relating to education loans.
(B) Exceptions.--Nothing in this subsection
shall be construed as prohibiting--
(i) an officer or employee of an
institution who is not employed in the
institution's financial aid office and
who does not otherwise have
responsibilities with respect to
education loans, or an agent who does
not have responsibilities with respect
to education loans, from performing
paid or unpaid service on a board of
directors of a lender, guarantor, or
servicer of education loans;
(ii) an officer or employee of the
institution who is not employed in the
institution's financial aid office but
who has responsibility with respect to
education loans as a result of a
position held at the institution, or an
agent who has responsibility with
respect to education loans, from
performing paid or unpaid service on a
board of directors of a lender,
guarantor, or servicer of education
loans, if the institution has a written
conflict of interest policy that
clearly sets forth that officers,
employees, or agents must recuse
themselves from participating in any
decision of the board regarding
education loans at the institution; or
(iii) an officer, employee, or
contractor of a lender, guarantor, or
servicer of education loans from
serving on a board of directors, or
serving as a trustee, of an
institution, if the institution has a
written conflict of interest policy
that the board member or trustee must
recuse themselves from any decision
regarding education loans at the
institution.
(4) Interaction with borrowers.--The institution
shall not--
(A) for any first-time borrower, assign,
through award packaging or other methods, the
borrower's loan to a particular lender; or
(B) refuse to certify, or delay certification
of, any loan based on the borrower's selection
of a particular lender or guaranty agency.
(5) Prohibition on offers of funds for private
loans.--
(A) Prohibition.--The institution shall not
request or accept from any lender any offer of
funds to be used for private education loans
(as defined in section 140 of the Truth in
Lending Act), including funds for an
opportunity pool loan, to students in exchange
for the institution providing concessions or
promises regarding providing the lender with--
(i) a specified number of loans made,
insured, or guaranteed under this
title;
(ii) a specified loan volume of such
loans; or
(iii) a preferred lender arrangement
for such loans.
(B) Definition of opportunity pool loan.--In
this paragraph, the term ``opportunity pool
loan'' means a private education loan made by a
lender to a student attending the institution
or the family member of such a student that
involves a payment, directly or indirectly, by
such institution of points, premiums,
additional interest, or financial support to
such lender for the purpose of such lender
extending credit to the student or the family.
(6) Ban on staffing assistance.--
(A) Prohibition.--The institution shall not
request or accept from any lender any
assistance with call center staffing or
financial aid office staffing.
(B) Certain assistance permitted.--Nothing in
paragraph (1) shall be construed to prohibit
the institution from requesting or accepting
assistance from a lender related to--
(i) professional development training
for financial aid administrators;
(ii) providing educational counseling
materials, financial literacy
materials, or debt management materials
to borrowers, provided that such
materials disclose to borrowers the
identification of any lender that
assisted in preparing or providing such
materials; or
(iii) staffing services on a short-
term, nonrecurring basis to assist the
institution with financial aid-related
functions during emergencies, including
State-declared or federally declared
natural disasters, federally declared
national disasters, and other localized
disasters and emergencies identified by
the Secretary.
(7) Advisory board compensation.--Any employee who is
employed in the financial aid office of the
institution, or who otherwise has responsibilities with
respect to education loans or other student financial
aid of the institution, and who serves on an advisory
board, commission, or group established by a lender,
guarantor, or group of lenders or guarantors, shall be
prohibited from receiving anything of value from the
lender, guarantor, or group of lenders or guarantors,
except that the employee may be reimbursed for
reasonable expenses incurred in serving on such
advisory board, commission, or group.
[(f)] (e) Institutional Requirements for Teach-Outs.--
(1) In general.--In the event the Secretary initiates
the limitation, suspension, or termination of the
participation of an institution of higher education in
any program under this title under the authority of
subsection (c)(1)(F) or initiates an emergency action
under the authority of subsection (c)(1)(G) and its
prescribed regulations, the Secretary shall require
that institution to prepare a teach-out plan for
submission to the institution's accrediting agency or
association in compliance with section 496(c)(3), the
Secretary's regulations on teach-out plans, and the
standards of the institution's accrediting agency or
association.
(2) Teach-out plan defined.--In this subsection, the
term ``teach-out plan'' means a written plan that
provides for the equitable treatment of students if an
institution of higher education ceases to operate
before all students have completed their program of
study, and may include, if required by the
institution's accrediting agency or association, an
agreement between institutions for such a teach-out
plan.
[(g)] (f) Inspector General Report on Gift Ban Violations.--
The Inspector General of the Department shall--
(1) submit an annual report to the authorizing
committees identifying all violations of an
institution's code of conduct that the Inspector
General has substantiated during the preceding year
relating to the gift ban provisions described in
subsection (e)(2); and
(2) make the report available to the public through
the Department's website.
[(h)] (g) Preferred Lender List Requirements.--
(1) In general.--In compiling, maintaining, and
making available a preferred lender list as required
under subsection (a)(27), the institution will--
(A) clearly and fully disclose on such
preferred lender list--
(i) not less than the information
required to be disclosed under section
153(a)(2)(A);
(ii) why the institution has entered
into a preferred lender arrangement
with each lender on the preferred
lender list, particularly with respect
to terms and conditions or provisions
favorable to the borrower; and
(iii) that the students attending the
institution, or the families of such
students, do not have to borrow from a
lender on the preferred lender list;
(B) ensure, through the use of the list of
lender affiliates provided by the Secretary
under paragraph (2), that--
(i) there are not less than three
lenders of loans made under part B that
are not affiliates of each other
included on the preferred lender list
and, if the institution recommends,
promotes, or endorses private education
loans, there are not less than two
lenders of private education loans that
are not affiliates of each other
included on the preferred lender list;
and
(ii) the preferred lender list under
this paragraph--
(I) specifically indicates,
for each listed lender, whether
the lender is or is not an
affiliate of each other lender
on the preferred lender list;
and
(II) if a lender is an
affiliate of another lender on
the preferred lender list,
describes the details of such
affiliation;
(C) prominently disclose the method and
criteria used by the institution in selecting
lenders with which to enter into preferred
lender arrangements to ensure that such lenders
are selected on the basis of the best interests
of the borrowers, including--
(i) payment of origination or other
fees on behalf of the borrower;
(ii) highly competitive interest
rates, or other terms and conditions or
provisions of loans under this title or
private education loans;
(iii) high-quality servicing for such
loans; or
(iv) additional benefits beyond the
standard terms and conditions or
provisions for such loans;
(D) exercise a duty of care and a duty of
loyalty to compile the preferred lender list
under this paragraph without prejudice and for
the sole benefit of the students attending the
institution, or the families of such students;
(E) not deny or otherwise impede the
borrower's choice of a lender or cause
unnecessary delay in loan certification under
this title for those borrowers who choose a
lender that is not included on the preferred
lender list; and
(F) comply with such other requirements as
the Secretary may prescribe by regulation.
(2) Lender affiliates list.--
(A) In general.--The Secretary shall maintain
and regularly update a list of lender
affiliates of all eligible lenders, and shall
provide such list to institutions for use in
carrying out paragraph (1)(B).
(B) Use of most recent list.--An institution
shall use the most recent list of lender
affiliates provided by the Secretary under
subparagraph (A) in carrying out paragraph
(1)(B).
[(i)] (h) Definitions.--For the purpose of this section:
(1) Agent.--The term ``agent'' has the meaning given
the term in section 151.
(2) Affiliate.--The term ``affiliate'' means a person
that controls, is controlled by, or is under common
control with another person. A person controls, is
controlled by, or is under common control with another
person if--
(A) the person directly or indirectly, or
acting through one or more others, owns,
controls, or has the power to vote five percent
or more of any class of voting securities of
such other person;
(B) the person controls, in any manner, the
election of a majority of the directors or
trustees of such other person; or
(C) the Secretary determines (after notice
and opportunity for a hearing) that the person
directly or indirectly exercises a controlling
interest over the management or policies of
such other person's education loans.
(3) Education loan.--The term ``education loan'' has
the meaning given the term in section 151.
(4) Eligible institution.--The term ``eligible
institution'' means any such institution described in
section 102 of this Act.
(5) Officer.--The term ``officer'' has the meaning
given the term in section 151.
(6) Preferred lender arrangement.--The term
``preferred lender arrangement'' has the meaning given
the term in section 151.
[(j)] (i) Construction.--Nothing in the amendments made by
the Higher Education Amendments of 1992 shall be construed to
prohibit an institution from recording, at the cost of the
institution, a hearing referred to in subsection (b)(2),
subsection (c)(1)(D), or subparagraph (A) or (B)(i) of
subsection (c)(2), of this section to create a record of the
hearing, except the unavailability of a recording shall not
serve to delay the completion of the proceeding. The Secretary
shall allow the institution to use any reasonable means,
including stenographers, of recording the hearing.
* * * * * * *
SEC. 492A. LIMITATION ON AUTHORITY OF THE SECRETARY TO PROPOSE OR ISSUE
REGULATIONS AND EXECUTIVE ACTIONS.
(a) Draft Regulations.--Beginning on the date of enactment of
this section, a draft regulation implementing this title (as
described in section 492(b)(1)) that is determined by the
Secretary to be economically significant shall be subject to
the following requirements (regardless of whether negotiated
rulemaking occurs):
(1) The Secretary shall determine whether the draft
regulation, if implemented, would result in an increase
in a subsidy cost.
(2) If the Secretary determines under paragraph (1)
that the draft regulation would result in an increase
in a subsidy cost, then the Secretary may not take any
further action with respect to such regulation.
(b) Proposed or Final Regulations and Executive Actions.--
Beginning on the date of enactment of this section, the
Secretary may not issue a proposed rule, final regulation, or
executive action implementing this title if the Secretary
determines that the rule, regulation, or executive action--
(1) is economically significant; and
(2) would result in an increase in a subsidy cost.
(c) Relationship to Other Requirements.--The analyses
required under subsections (a) and (b) shall be in addition to
any other cost analysis required under law for a regulation
implementing this title, including any cost analysis that may
be required pursuant to Executive Order 12866 (58 Fed. Reg.
51735; relating to regulatory planning and review), Executive
Order 13563 (76 Fed. Reg. 3821; relating to improving
regulation and regulatory review), or any related or successor
orders.
(d) Definition.--In this section, the term ``economically
significant'', when used with respect to a draft, proposed, or
final regulation or executive action, means that the regulation
or executive action is likely, as determined by the Secretary--
(1) to have an annual effect on the economy of
$100,000,000 or more; or
(2) to adversely affect in a material way the
economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or
safety, or State, local, or tribal governments or
communities.
* * * * * * *
SEC. 493C. INCOME-BASED REPAYMENT.
(a) Definitions.--In this section:
(1) Excepted plus loan.--The term ``excepted PLUS
loan'' means a loan under section 428B, or a Federal
Direct PLUS Loan, that is made, insured, or guaranteed
on behalf of a dependent student.
[(2) Excepted consolidation loan.--The term
``excepted consolidation loan'' means a consolidation
loan under section 428C, or a Federal Direct
Consolidation Loan, if the proceeds of such loan were
used to the discharge the liability on an excepted PLUS
loan.]
(2) Excepted consolidation loan.--
(A) In general.--The term ``excepted
consolidation loan'' means--
(i) a consolidation loan under
section 428C, or a Federal Direct
Consolidation Loan, if the proceeds of
such loan were used to the discharge
the liability on an excepted PLUS loan;
or
(ii) a consolidation loan under
section 428C, or a Federal Direct
Consolidation Loan, if the proceeds of
such loan were used to discharge the
liability on a consolidation loan under
section 428C or a Federal Direct
Consolidation Loan described in clause
(i).
(B) Exclusion.--The term ``excepted
consolidation loan'' does not include a Federal
Direct Consolidation Loan described in
subparagraph (A) that (on the day before the
date of enactment of this subparagraph) was
being repaid pursuant to the Income-Contingent
Repayment (ICR) plan in accordance with section
685.209(a) of title 34, Code of Federal
Regulations (as in effect on June 30, 2023).
(3) Partial financial hardship.--The term ``partial
financial hardship'', when used with respect to a
borrower, means that for such borrower--
(A) the annual amount due on the total amount
of loans made, insured, or guaranteed under
part B or D (other than an excepted PLUS loan
or excepted consolidation loan) to a borrower
as calculated under the standard repayment plan
under section 428(b)(9)(A)(i) or 455(d)(1)(A),
based on a 10-year repayment period; exceeds
(B) 15 percent of the result obtained by
calculating, on at least an annual basis, the
amount by which--
(i) the borrower's, and the
borrower's spouse's (if applicable),
adjusted gross income; exceeds
(ii) 150 percent of the poverty line
applicable to the borrower's family
size as determined under section 673(2)
of the Community Services Block Grant
Act (42 U.S.C. 9902(2)).
(b) Income-Based Repayment Program Authorized.--
Notwithstanding any other provision of this Act, the Secretary
shall carry out a program under which--
[(1) a borrower of any loan made, insured, or
guaranteed under part B or D (other than an excepted
PLUS loan or excepted consolidation loan) who has a
partial financial hardship (whether or not the
borrower's loan has been submitted to a guaranty agency
for default aversion or had been in default) may elect,
during any period the borrower has the partial
financial hardship, to have the borrower's aggregate
monthly payment for all such loans not exceed the
result described in subsection (a)(3)(B) divided by
12;]
(1) a borrower of any loan made, insured, or
guaranteed under part B or D (other than an excepted
PLUS loan or excepted consolidation loan), may elect to
have the borrower's aggregate monthly payment for all
such loans not exceed the result described in
subsection (a)(3)(B) divided by 12;
(2) the holder of such a loan shall apply the
borrower's monthly payment under this subsection first
toward interest due on the loan, next toward any fees
due on the loan, and then toward the principal of the
loan;
(3) any interest due and not paid under paragraph
(2)--
(A) shall, on subsidized loans, be paid by
the Secretary for a period of not more than 3
years after the date of the borrower's election
under paragraph (1), except that such period
shall not include any period during which the
borrower is in deferment due to an economic
hardship described in section 435(o); and
(B) be capitalized--
(i) in the case of a subsidized loan,
subject to subparagraph (A), at the
time [the borrower--]
[(I) ends] the borrower ends
the election to make income-
based repayment under this
subsection; or
[(II) begins making payments
of not less than the amount
specified in paragraph (6)(A);
or]
(ii) in the case of an unsubsidized
loan, at the time [the borrower--]
[(I) ends] the borrower ends
the election to make income-
based repayment under this
subsection; [or]
[(II) begins making payments
of not less than the amount
specified in paragraph (6)(A);]
(4) any principal due and not paid under paragraph
(2) shall be deferred;
(5) the amount of time the borrower makes monthly
payments under paragraph (1) may exceed 10 years;
[(6) if the borrower no longer has a partial
financial hardship or no longer wishes to continue the
election under this subsection, then--
[(A) the maximum monthly payment required to
be paid for all loans made to the borrower
under part B or D (other than an excepted PLUS
loan or excepted consolidation loan) shall not
exceed the monthly amount calculated under
section 428(b)(9)(A)(i) or 455(d)(1)(A), based
on a 10-year repayment period, when the
borrower first made the election described in
this subsection; and
[(B) the amount of time the borrower is
permitted to repay such loans may exceed 10
years;]
(7) the Secretary shall repay or cancel any
outstanding balance of principal and interest due on
all loans made under part B or D (other than a loan
under section 428B or a Federal Direct PLUS Loan) to a
borrower who--
(A) at any time, elected to participate in
income-based repayment under paragraph (1); and
(B) [for a period of time prescribed by the
Secretary, not to exceed 25 years] for 25 years
(in the case of a borrower who is repaying at
least one loan for a program of study for which
a graduate credential (as defined in section
472A)) is awarded, or, for 20 years (in the
case of a borrower who is not repaying at least
one such loan), meets 1 or more of the
following requirements--
(i) has made reduced monthly payments
under paragraph (1) or (as such
paragraph was in effect on the day
before the date of the repeal of
paragraph (6)) paragraph (6);
(ii) has made monthly payments of not
less than the monthly amount calculated
under section 428(b)(9)(A)(i) or
455(d)(1)(A), based on a 10-year
repayment period, when the borrower
first made the election described in
this subsection;
(iii) has made payments of not less
than the payments required under a
standard repayment plan under section
428(b)(9)(A)(i) or 455(d)(1)(A) with a
repayment period of 10 years;
(iv) has made payments under an
income-contingent repayment plan under
(as such section was in effect on the
day before the date of the repeal of
paragraph (6)) section 455(d)(1)(D); or
(v) has been in deferment due to an
economic hardship described in section
435(o);
(8) a borrower who is repaying a loan made under part
B or D pursuant to income-based repayment may elect, at
any time, to terminate repayment pursuant to income-
based repayment and repay such loan under the [standard
repayment plan] standard repayment plan under section
428(b)(9)(A)(i) or 455(d)(1)(A), or the Repayment
Assistance Program under section 455(q); and
(9) the special allowance payment to a lender
calculated under section 438(b)(2)(I), when calculated
for a loan in repayment under this section, shall be
calculated on the principal balance of the loan and on
any accrued interest unpaid by the borrower in
accordance with this section.
(c) Eligibility Determinations.--
(1) In general.--The Secretary shall establish
procedures for annually determining the borrower's
eligibility for income-based repayment, including
verification of a borrower's annual income and the
annual amount due on the total amount of loans made,
insured, or guaranteed under part B or D (other than an
excepted PLUS loan or excepted consolidation loan), and
such other procedures as are necessary to effectively
implement income-based repayment under this section.
(2) Procedures for eligibility.--The Secretary
shall--
(A) consider, but is not limited to, the
procedures established in accordance with
section 455(e)(1) (as in effect on the day
before the date of repeal of subsection (e) of
section 455) or in connection with income
sensitive repayment schedules under section
428(b)(9)(A)(iii) or 428C(b)(1)(E); and
(B) carry out, with respect to borrowers of
any loan made under part D (other than an
excepted PLUS loan or excepted consolidation
loan), procedures for income-based repayment
plans that are equivalent to the procedures
carried out under section 455(e)(8) (as in
effect on the day before the date of repeal of
subsection (e) of section 455) with respect to
income-contingent repayment plans.
(d) Special Rule for Married Borrowers Filing Separately.--In
the case of a married borrower who files a separate Federal
income tax return, the Secretary shall calculate the amount of
the borrower's income-based repayment under this section solely
on the basis of the borrower's student loan debt and adjusted
gross income.
[(e) Special Terms for New Borrowers on and After July 1,
2014.--With respect to any loan made to a new borrower on or
after July 1, 2014--
[(1) subsection (a)(3)(B) shall be applied by
substituting ``10 percent'' for ``15 percent''; and
[(2) subsection (b)(7)(B) shall be applied by
substituting ``20 years'' for ``25 years''.]
* * * * * * *
SEC. 494. PROCEDURE AND REQUIREMENTS FOR REQUESTING TAX RETURN
INFORMATION FROM THE INTERNAL REVENUE SERVICE.
(a) Notification and Approval Requirements.--
(1) Federal student financial aid.--In the case of
any written or electronic application under section 483
by an individual for Federal student financial aid
under a program authorized under subpart 1 of part A,
part C, or part D, the Secretary, with respect to such
individual and any parent or spouse whose financial
information, including return information, is required
to be provided on such application, shall--
(A) notify such individuals that--
(i) if such individuals provide
approval under subparagraph (B)--
(I) the Secretary will have
the authority to request that
the Secretary of the Treasury
disclose return information of
such individuals to authorized
persons (as defined in section
6103(l)(13) of the Internal
Revenue Code of 1986) for the
relevant purposes described in
such section; and
(II) the return information
of such individuals may be
redisclosed pursuant to clauses
(iii), (iv), (v), and (vi) of
section 6103(l)(13)(D) of the
Internal Revenue Code of 1986,
for the relevant purposes
described in such section; and
(ii) the failure to provide such
approval for the disclosures described
in subclauses (I) and (II) of clause
(i) will result in the Secretary being
unable to calculate eligibility for
such aid to such individual;
(B) require, as a condition of eligibility
for such aid, that such individuals
affirmatively approve the disclosures described
in subclauses (I) and (II) of subparagraph
(A)(i); and
(C) if an individual is pursuing provisional
independent student status due to an unusual
circumstance, as described in section 479A and
provided for in section 479D, require such
individual to provide an affirmative approval
under subparagraph (B), but not require a
parent of such individual to provide an
affirmative approval under subparagraph (B).
(2) [Income-contingent and income-based] Income-
based repayment.--
(A) New applicants.--In the case of any
written or electronic application by an
individual for an [income-contingent or]
income-based repayment plan for a loan under
part D, the Secretary, with respect to such
individual and any spouse of such individual,
shall--
(i) provide to such individuals the
notification described in paragraph
(1)(A)(i);
(ii) require, as a condition of
eligibility for such repayment plan,
that such individuals--
(I) affirmatively approve the
disclosures described in
subclauses (I) and (II) of
paragraph (1)(A)(i), to the
extent applicable, and agree
that such approval shall serve
as an ongoing approval of such
disclosures until the date on
which the individual elects to
opt out of such disclosures
under section 455(e)(8) (as in
effect on the day before the
date of repeal of subsection
(e) of section 455) or the
equivalent procedures
established under section
493C(c)(2)(B), as applicable;
or
(II) provide such information
as the Secretary may require to
confirm the eligibility of such
individual for such repayment
plan.
(B) Recertifications.--With respect to the
first written or electronic recertification
(after the date of the enactment of the FUTURE
Act) of an individual's income or family size
for purposes of an income-contingent or income-
based repayment plan (entered into before the
date of the enactment of the FUTURE Act) for a
loan under part D, the Secretary, with respect
to such individual and any spouse of such
individual, shall meet the requirements of
clauses (i) and (ii) of subparagraph (A) with
respect to such recertification.
(3) Total and permanent disability.--In the case of
any written or electronic application by an individual
for a discharge of a loan under this title based on
total and permanent disability (within the meaning of
section 437(a)) that requires income monitoring, the
Secretary shall--
(A) provide to such individual the
notification described in paragraph
(1)(A)(i)(I); and
(B) require, as a condition of eligibility
for such discharge, that such individual--
(i) affirmatively approve the
disclosure described in paragraph
(1)(A)(i)(I) and agree that such
approval shall serve as an ongoing
approval of such disclosure until the
earlier of--
(I) the date on which the
individual elects to opt out of
such disclosure under section
437(a)(3)(A); or
(II) the first day on which
such loan may no longer be
reinstated; or
(ii) provide such information as the
Secretary may require to confirm the
eligibility of such individual for such
discharge.
(b) Limit on Authority.--The Secretary shall only have
authority to request that the Secretary of the Treasury
disclose return information under section 6103(l)(13) of the
Internal Revenue Code of 1986 with respect to an individual if
the Secretary of Education has obtained approval under
subsection (a) for such disclosure.
(c) Access to FAFSA Information.--
(1) Redisclosure of information.--The information in
a complete, unredacted Student Aid Report (including
any return information disclosed under section
6103(l)(13) of the Internal Revenue Code of 1986 (26
U.S.C. 6103(l)(13))) with respect to an application
described in subsection (a)(1) of an applicant for
Federal student financial aid--
(A) upon request for such information by such
applicant, shall be provided to such applicant
by--
(i) the Secretary; or
(ii) in a case in which the Secretary
has requested that institutions of
higher education carry out the
requirements of this subparagraph, an
institution of higher education that
has received such information; and
(B) with the written consent by the applicant
to an institution of higher education, may be
provided by such institution of higher
education as is necessary to a scholarship
granting organization (including a tribal
organization (defined in section 4 of the
Indian Self-Determination and Education
Assistance Act (25 U.S.C. 5304))), or to an
organization assisting the applicant in
applying for and receiving Federal, State,
local, or tribal assistance, that is designated
by the applicant to assist the applicant in
applying for and receiving financial assistance
for any component of the applicant's cost of
attendance (defined in section 472) at that
institution.
(2) Discussion of information.--A discussion of the
information in an application described in subsection
(a)(1) (including any return information disclosed
under section 6103(l)(13) of the Internal Revenue Code
of 1986 (26 U.S.C. 6103(l)(13)) of an applicant between
an institution of higher education and the applicant
may, with the written consent of the applicant, include
an individual selected by the applicant (such as an
advisor) to participate in such discussion.
(3) Restriction on disclosing information.--A person
receiving information under paragraph (1)(B) or (2)
with respect to an applicant shall not use the
information for any purpose other than the express
purpose for which consent was granted by the applicant
and shall not disclose such information to any other
person without the express permission of, or request
by, the applicant.
(4) Definitions.--In this subsection:
(A) Student aid report.--The term ``Student
Aid Report'' has the meaning given the term in
section 668.2 of title 34, Code of Federal
Regulations (or successor regulations).
(B) Written consent.--The term ``written
consent'' means a separate, written document
that is signed and dated (which may include by
electronic format) by an applicant, which--
(i) indicates that the information
being disclosed includes return
information disclosed under section
6103(l)(13) of the Internal Revenue
Code of 1986 (26 U.S.C. 6103(l)(13))
with respect to the applicant;
(ii) states the purpose for which the
information is being disclosed; and
(iii) states that the information may
only be used for the specific purpose
and no other purposes.
(5) Record keeping requirement.--An institution of
higher education shall--
(A) keep a record of each written consent
made under this subsection for a period of at
least 3 years from the date of the student's
last date of attendance at the institution; and
(B) make each such record readily available
for review by the Secretary.
* * * * * * *
MINORITY VIEWS
INTRODUCTION
Committee Democrats firmly believe the Republicans plan in
the Committee Print of H. Con. Res. 14\1\ will lower the
quality of higher education and make higher education more
expensive for students. The Majority's plans will weaken the
Direct Loan program and eliminate the PLUS Loan program, which
will make it harder for some students to afford a college
degree, and impossible for others. It creates new repayment
options that are less generous then current law, at a time that
we know borrowers are struggling to repay their loans. Finally,
the bill dismantles key portions of the higher education
accountability framework to protect students and taxpayers from
waste, fraud, and abuse without proposing a viable alternative
framework. The Committee Print will have a net-negative impact
on both students and institutions of higher education.
---------------------------------------------------------------------------
\1\Through the report, the legislative text marked up by the
Committee will be referred to as the ``Committee Print.'' The
reconciliation process requires all committees to mark-up up distinct
portions of an unintroduced bill and at time of markup, they are
referred to as the ``Committee Print''.
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BACKGROUND ON THE RISING COST OF COLLEGE AND THE FLAWED CONSIDERATION
OF THE COMMITTEE PRINT
The value of a college degree cannot be understated.
Research has consistently found that a college degree confers
significant financial and non-financial returns, particularly
for low-income students and students of color.\2\ Typically,
people with bachelor's degrees make over $1 million more than
high school graduates over their lifetimes.\3\
---------------------------------------------------------------------------
\2\Susan K. Urahn et al., Pursuing the American Dream: Economic
Mobility Across Generations 3, The Pew Charitable Trusts (Jul. 2012),
https://www.pewtrusts.org//media/legacy/uploadedfiles/wwwpewtrustsorg/
reports/economic_mobility/pursuingamericandreampdf.pdf; H. Comm. on
Educ. & Lab., Don't Stop Believin' (In the Value of a College Degree)i,
(2019), https://democrats-edworkforce.house.gov/imo/media/doc/
Updated%20College%20Rerport%20Final.pdf.
\3\H. Comm. on Educ. & Labor, supra note 02 at 1.
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But as the cost of obtaining a degree has risen sharply
over the last three decades, apprehension about the value of
college has risen as well. From 1990 to 2019, the net cost of
attendance has grown 81 percent at public four-year colleges,
33 percent at private nonprofit colleges, and 19 percent at
public two-year colleges.\4\ The cost of college has
significantly outpaced inflation, and many Americans' ability
to afford a college education has declined.\5\ And the Pell
Grant has not grown sufficiently to keep pace with increases in
tuition and fees. The Pell Grant now covers the smallest share
of college costs in four decades.\6\ Further, state investment
in higher education has declined over the decades.\7\ Students
are forced to make up that difference; to cover the remaining
costs of college, low-income students are taking out loans at
higher rates than their high-income peers and graduating with
higher debt loads.
---------------------------------------------------------------------------
\4\Rethinking Higher Education, U.S. Dep't of Education (Dec.
2018), https://files.eric.ed.gov/fulltext/ED591005.pdf.
\5\H. Comm. on Educ. & Labor, supra note 02, at 1.
\6\The Inst. For Coll. Access & Success, A State-by-State Look at
College (Un)Affordability 10, (Apr. 2017), https://ticas.org/files/
pub_files/college_costs_in_context.pdf; see also, #Double Pell, The
Case for Doubling the Pell Grant, (Jun. 2021), https://doublepell.org/
wp-content/uploads/2021/06/Double-Pell-Mini-Policy-Paper.pdf.
\7\See State Higher Educ. Exec. Officers Ass'n., State Higher
Education Finance: FY 2021 70-71, (2022), https://shef.sheeo.org/wp-
content/uploads/2022/06/SHEEO_SHEF_FY21_Report.pdf.
---------------------------------------------------------------------------
In order to support students in achieving their higher
education goals, the federal government has a responsibility to
invest in higher education and help ensure the higher education
system is strong. However, the House Majority, along with the
Trump Administration, are destabilizing the U.S. higher
education system and making more difficult for students to
afford a college education. In its first 100 days, the Trump
administration has abruptly defunded billions of dollars in
university research, snatched funds back from institutions
without official findings of wrongdoing, issued an executive
order designed to give the federal government more control over
what schools teach, and temporarily cut off access to income-
based repayment options for borrowers.\8\ It has done all this
while attempting to dismantle the Department of Education, a
which will cause confusion to students, student loan borrowers,
and colleges.\9\ Meanwhile, House Republicans are seeking to
advance policies via the Budget Reconciliation process that
will make it even harder for institutions to deliver quality
education, for students to afford higher education, and for the
federal government to provide oversight of the federal student
aid program. The over $300 billion in savings achieved in this
bill is not being used to shore up this higher education system
in other ways. It will be used to finance the trillions of
dollars in tax cuts for billionaires.
---------------------------------------------------------------------------
\8\Alan Blinder & Anemona Hartocollis, Trump Pauses Dozens of
Federal Grants to Princeton, N.Y. Times, Apr. 1, 2025, https://
www.nytimes.com/2025/04/01/us/trump-federal-grants-
princeton.html; Antoinette Flores et al, Students Lose as Trump's Order
Turns Accreditation Into a Political Tool, New America, Apr. 28, 2025,
https://www.newamerica.org/education-policy/edcentral/students-lose-as-
trumps-order-turns-accreditation-into-a-political-tool/; Shannon Lurye
& Jocelyn Gecker, How U.S. colleges are navigating cuts to grants for
research after Trump restricts federal funding, PBS News, Mar. 28,
2025, https://www.pbs.org/newshour/education/how-u-s-colleges-are-
navigating-cuts-to-grants-for-research-after-trump-restricts-federal-
funding; Adam S. Minsky, Department of Education Takes Down Key Student
Loan Forgiveness and Repayment Applications, Forbes, Feb. 24, 2025,
https://www.forbes.com/sites/adamminsky/2025/02/24/department-of-
education-takes-down-key-student-loan-forgiveness-and-repayment-
applications/.
\9\Wesley Whistle, The Perils of Handing Off the education
Department's Job to Other Regulators, New America, Feb. 13, 2025,
https://www.newamerica.org/education-policy/edcentral/the-perils-of-
handing-off-the-education-departments-job-to-other-regulators/.
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THE COMMITTEE PRINT DECREASES COLLEGE ACCESS AND MAKES COLLEGE LESS
AFFORDABLE
The Majority proposes a package of damaging policies that
will create a bleak landscape for college access and
affordability. Committee Democrats are deeply concerned the
proposed changes to federal student aid will collectively limit
access to a range of programs of study for low-income students,
steer students into the private loan market, and make it harder
for borrowers to pay off their loans, all in direct opposition
to the goals that drove the creation of the Higher Education
Act.
Capping Aid at the Median Cost of College
The Committee Print caps the total amount of federal
student aid that any student can receive at the median cost of
attendance for a student enrolled in a similar program of
study, based on national data. The stated intent of this policy
is to encourage institutions of higher education to lower their
tuition prices; however, Committee Democrats are not aware of
any research that signals this policy is an appropriate
approach to lower college costs. As a threshold matter, capping
aid at the median cost of attendance would mean 50 percent of
students who rely on federal student aid would not receive
enough federal aid to cover the cost of their program. Higher
education advocates rightfully argue this will create a harmful
funding gap that impacts students' ability to cover the basics
needs components of their cost of attendance, such as housing
and transportation and will be detrimental to students' ability
to obtain their degree.\10\ Further, by using nationwide
averages to cap costs, students attending school in high cost
of living areas will be disproportionately impacted. Although
Committee Republicans believe this aid cap will incentivize
institutions to lower their prices, Committee Democrats believe
this unfounded, one-size-fits-all approach does not take into
consideration variables across the higher education system.
When coupled with provisions limiting the Secretary's ability
to regulate discussed later in these views, this provision
would sew chaos throughout higher education by discouraging
students from entering school to begin with or drive them into
the private loan market.
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\10\Letter from Justin Draeger, President & CEO, Nat'l Ass'n of
Student Fin. Aid Admins., to Reps. Foxx & Scott (Jan. 26, 2024),
available at https://www.nasfaa.org/uploads/documents/
College_Cost_Reduction_Act_Letter.pdf; Letter from Ted Mitchell,
President, Am. Council on Educ., to Reps. Foxx & Scott (Jan. 30, 2024),
available at https://www.aamc.org/media/74636/download.
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Pell Grants
The Majority's proposal would weaken the Pell Grant
program--the cornerstone of federal student aid. Despite the
declining purchasing power of the Pell Grant, it remains a
powerful tool that unlocks significant additional financial
support for low-income students in higher education.\11\
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\11\#DoublePell for College Affordability, NCAN, https://
www.ncan.org/page/Pell (last visited on Feb. 9, 2024).
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In recent years, Congress, led by Committee Democrats, has
secured historic improvements to the Pell Grant, including laws
that resulted in approximately 610,000 more Pell Grant
recipients and nearly 1.5 million students receiving the
maximum Pell Grant in 2024,\12\ the restoration of Pell Grant
eligibility to incarcerated students,\13\ and a $900 total
increase in the maximum Pell Grant in the year-end budget deals
for fiscal years 2022 and 2023.\14\ Based on this track record
of recent successes, the Committee Print would have been the
perfect opportunity to reduce college costs for students by
increasing the value of the Pell Grant for all students.
Instead, the Republicans made two changes to Pell Grant
eligibility that will result in fewer students receiving a Pell
Grant.
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\12\Press Release, U.S. Dep't of Educ., U.S. Department of
Education Announces More Than 3.1 Million FAFSA Forms Successfully
Submitted and an Update to Student Aid Index Calculation (Jan. 30,
2024), https://www.ed.gov/news/press-releases/us-department-education-
announces-more-31-million-fafsa-forms-successfully-submitted-and-
update-student-aid-index-calculation.
\13\Nicholas Turner & Nazish Dholakia, After 29 Years, Incarcerated
Students Are Finally Going Back to School, Vera Institute of Justice
(Jun. 22, 2023), https://www.vera.org/news/after-29-years-incarcerated-
students-are-finally-going-back-toschool#::text=Vera%E2%80%94along%
20with%20other%20organizations,Pell%20Grants%20to%20incarcerated%20stude
nts.
\14\Consolidated Appropriations Act, Pub. L. No. 117-103, 136 Stat.
49 (2022); Consolidated Appropriations Act, Pub. L. No. 117-328, 136
Stat. 4459 (2023).
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First, the Committee Print changes the definition of ``full
time'', for Pell only, from 24 semester hours to 30 semester
hours a year. While Committee Republicans have sought to make
changes to Pell in multiple Congresses to incentivize on-time
completion, those proposals usually took the form of some type
of bonus on top of the maximum Pell Grant to incentivize
students to take a larger courseload. Here, recognizing any
dollars spent to increase the Pell Grant would be dollars that
could not be saved to fund tax cuts for the top 1%, Committee
Republicans abandoned the idea of a bonus to incentivize taking
a larger courseload and instead adopted a policy creating a
penalty for Pell recipients who do not take a larger
courseload. For low-income students who are balancing other
responsibilities such as work and child care alongside their
education, part-time enrollment may be their sole option, and
they should not be penalized for that. Further, research shows
that at 80% of institutions, Pell Grant recipients graduate on-
time at a lower rate than non-Pell recipients.\15\ Creating a
penalty by raising the number of semester hours required to
receive a Pell Grant seems in no way connected to the reasons
why Pell recipients may not complete college on time, and is
not likely to increase completion rates, and instead penalize
students.
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\15\Wesley Whistle & Tamara Hiler, The Pell Divide: How Four-Year
Institutions are Failing to Graduate Low-and Moderate-Income Students,
Third Way (May 1, 2018), https://www.thirdway.org/report/the-pell-
divide-how-four-year-institutions-are-failing-to-graduate-low-and-
moderate-income-students.
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Coupled with the change in the definition of ``full time'',
the Committee Print also eliminates Pell Grant eligibility for
students enrolled less than half time, which would be under 15
semester hours a year. Under current law, eligible Pell Grant
recipients receive a prorated grant award based on the number
of credit hours they take in any semester. While the result may
be that a student taking a smaller courseload may get a smaller
Pell Grant, that smaller grant is still pivotal to funding that
student's education. It's money that can cover tuition, fees,
and living expenses that does not need to be paid back. This is
often the case for adult learners attending school part time
while working part time--they are Pell eligible due to their
need analysis, but don't receive a full amount they are
eligible for. Instead of recognizing this is a fact of life for
many low- income students, the Committee Print will simply
eliminate Pell eligibility for many of these students, forcing
them to either finance their current course load through other
means, or to take more course hours each semester, decreasing
the time they can work. Committee Democrats feel that ending
Pell eligibility for students enrolled less than half time
simply refuses to recognize the realities faced by modern
students. The result will be fewer students pursuing higher
education, the exact opposite goal of the original authors of
the Higher Education Act of 1965.
Committee Democrats were also surprised that the Majority
included Workforce Pell Grants in the Committee Print. Last
Congress, the Democrats and Republicans negotiated and
introduced H.R. 6585, the Bipartisan Workforce Pell Act, a bill
that would allow students to use Pell Grants to enroll in high-
quality, short-term workforce programs. The Bipartisan
Workforce Pell Act was carefully negotiated, and included
language to ensure that unscrupulous programs could not take
students' valuable Pell dollars and leave them without a
worthwhile credential. While the partisan language the
Committee considered does include Workforce Pell Grants with a
structure that is similar to the Bipartisan Workforce Pell Act,
it does not include key consumer protection guardrails to
protect students.
Campus-Based Aid
The Committee Print includes a new grant program, Promoting
Real Opportunities to Maximize Investments in Savings in
Education (PROMISE). As it was originally proposed in the
College Cost Reduction Act PROMISE would be a performance-based
grant to reward institutions for providing strong earnings
outcomes, keeping tuition low, and matriculating low-income
students. To receive a PROMISE grant, an institution must
provide students with a maximum total price guarantee,
establishing the most money an institution could charge the
student to complete their program, based on the student's
family income and financial need.
Though Committee Democrats generally support the creation
of programs that increase postsecondary access opportunities
for low-and middle-income students, we have several concerns
with the PROMISE program. First, PROMISE grants would
essentially function as a block grant to institutions, with few
enumerated requirements in the bill as to their use. There was
not even a provision requiring some minimum percentage of the
grant aid to be directly given to students to offset their
need, so a school could use its grant for various purposes
rather than ``maximizing investments in savings in education''.
Additionally, Committee Democrats worry the maximum total
price guarantee requirement will disincentivize schools from
participating in the PROMISE program. While this attempt to
control college costs is commendable, it is imperative that
proposed policies to keep higher education affordable are
actually viable. In this case, it is unclear whether
institutions would significantly cap tuition costs just to
become eligible to participate in a program with no guarantee
that it will receive funds. Further, public institutions are
particularly at risk of not accessing these funds, since
tuition at most public institutions is determined by state and
local governments.\16\ The volatile and unpredictable nature of
state funding for higher education makes it challenging for
public institutions to guarantee tuition levels for multiple
years at a time, meaning they will likely be ineligible for
PROMISE grants due to factors beyond their control.\17\
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\16\Letter from Mark Becker, President, Ass'n of Pub. and Land-
grant Univ., to Reps. Foxx & Scott (Jan. 29, 2024), available at
https://www.aplu.org/wp-content/uploads/CCRA-Markup-
Letter-Signed.pdf.
\17\Id.
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Additionally, Committee Democrats worry whether the
Committee Print's PROMISE provisions include resources
sufficient enough to make a meaningful difference for students.
Under the proposal the funding to make the grants would come
from the proceeds of the risk sharing scheme proposed in the
Committee Print, and after the first year of implementation
funds returned to title IV under HEA section 484B. Under the
PROMISE proposal from the College Cost Reduction Act, if the
risk sharing scheme did not produce enough funds for eligible
schools to receive PROMISE grants, the bill required
prioritization of institutions with the highest percentages of
low-income students for PROMISE funding.\18\ But since the
Committee Print must follow the stricter rules of Budget
Reconciliation, grant funds are ratably reduced for all
eligible institutions. Funding a proposal in such a manner
without a guarantee that all eligible institutions, and most
importantly students at their institutions, will have the
ability to benefit from the program, is unwise.
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\18\H.R. 6951, Amdt. in the Nature of a Substitute, Sec. 415E(b),
Jan. 31, 2024.
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Finally, it is not lost on Committee Democrats that this is
an attempt to co-opt the ``PROMISE'' branding in higher
education, which has generally come to refer to programs across
the country that provide free (or highly subsidized) semesters
of community college.\19\ Relatedly the America's College
Promise Act (ACP),\20\ a bill first introduced in 2015,
establishes a federal-state partnership to expand access to
higher education by providing two years of tuition-free
community college and creating grants for Historically Black
Colleges and Universities (HBCUs), Tribal Colleges and
Universities\21\ and Minority Serving Institutions (MSIs) to
provide two years of tuition-free education. The Republican's
PROMISE program is fundamentally different from what Committee
Democrats offered in ACP or the Promise programs that the non-
profit College Promise indicates are at ``approximately 104
community college and university programs offered across 45
states.'' The PROMISE program as included in Committee Print
does not offer a real mechanism to solve issues of college
affordability and completion.
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\19\See e.g. Edward Conroy, How Are the More Than 400 College
Promise Programs Helping Students?, Forbes (Jul. 13, 2023), https://
www.forbes.com/sites/edwardconroy/2023/07/13/how-are-the-more-than-400-
college-promise-programs-helping-students/?sh=5df32ad99039; Promise
Programs Database, W.E. Upjohn Institute, https://upjohn.org/promise/
promise
Search.html#scrollSpot (last visited Feb. 12, 2024).
\20\President Obama first unveiled the America's College Promise
proposal in 2015, https://obamawhitehouse.archives.gov/the-press-
office/2015/01/09/fact-sheet-white-house-unveils-america-s-college-
promise-proposal-tuitio. President Biden proposed a similar program in
the FY2024 President's Budget. https://www2.ed.gov/about/overview/
budget/budget24/justifications/t-fcc.pdf. Rep. Scott and Sen. Tammy
Baldwin (D-WI) first introduced the America's College Promise Act in
2015. H.R. 2961, 115th Cong. (2015).
\21\America's College Promise Act, H.R. 5998, 118th Cong. (2023).
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Limiting Access to Federal Student Loans
The Committee Print revises the aggregate and annual Direct
Loan limits for undergraduate and graduate students. The
current aggregate Direct Loan limits are $31,000 for dependent
undergraduate students, $57,500 for independent undergraduate
students, and $138,500 for graduate and professional
students.\22\ The Committee Print changes the aggregate limit
to $50,000 for dependent and independent undergraduate
students, $100,000 for graduate students, and raises the limit
to $150,000 for professional graduate students. Independent
undergraduate students and non-professional graduate students
will face drastic cuts to their total federal student loan
eligibility from these limits. In conjunction with other loan
changes detailed below, most students will be worse off with
this proposal.
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\22\Alexandra Hegji, Cong. Rsch. Serv., R45931, Federal Student
Loans Made Through the William D. Ford Federal Direct Loan Program:
Terms and Conditions for Borrowers, 14-15 (2023).
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The Committee Print also eliminates the subsidization of
undergraduate loans. Under current law, a portion of an
undergraduates Direct Loans would have the interest rate
subsidized so those loans were not accruing interest while the
undergraduate was in school. The rationale is simple: we should
not penalize the student for not paying back their loan while
they are enrolled and studying. This simple change will result
in billions saved that can be spent on tax cuts, but will have
drastic implications on the student loan balances of millions
of undergraduate students.
The Committee Print also allows institutions to cap loans
even further based on program of study. This will create
significant affordability issues for students preparing for
impactful careers in fields with traditionally low earnings,
such as teaching and social work. Several higher education and
consumer protection advocates fear that giving colleges this
authority will ``threaten universal access to student
loans''\23\ and restrict college access for students whose
needs are not otherwise met.\24\
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\23\Ben Barrett, More than Tuition: Experimenting Loan Limits, New
America (May 23, 2016) https://www.newamerica.org/education-policy/
edcentral/tuition-setting-student-loan-limits/.
\24\Letter from Christopher Chapman, Pres. & CEO, Access Lex
Institute, to Reps. Foxx & Scott, Jan. 22, 2024 (on file with author).
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The Committee Print, consistent with H.R. 6951, also
eliminates Parent PLUS and Graduate PLUS loans for all future
borrowers. The PLUS program is not without its faults,\25\ but
taking a hatchet to the program instead of a scalpel will only
drive families and graduate students to the predatory private
loan market\26\ to finance higher education. Advocates across
the political spectrum have emphasized that to successfully
steer students and families away from PLUS loans, robust front-
end student aid and increased institutional aid are
essential.\27\ Eliminating PLUS Loans without providing such
additional front-end aid will likely have a disastrous effect
on the demographic groups that disproportionately relies on
PLUS Loans, low-income and first generation students. The
families of these students tend to take out Parent PLUS loans
at higher rates compared to other student groups due in part to
having less generational wealth and fewer financial resources
generally.\28\
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\25\Victoria Jackson et al., Parent Plus Loans are a Double-Edged
Sword for Black Borrowers 6-7, Educ. Trust (Jun. 2023), https://
edtrust.org/wp-content/uploads/2014/09/ParentPLUS_Brief_V6.pdf.
\26\Ben Kaufman, Private Student Loans: New Report Sheds Light on
the Need for Borrower Protection an Opaque $130 Billion Market, Student
Borrower Protection Ctr. (Apr. 30, 2020), https://protectborrowers.org/
130-billion-psl-market/.
\27\Beth Akers et al., A Framework for Reforming Federal Graduate
Student Aid Policy, The Century Found. (Dec 8, 2023), https://tcf.org/
content/report/a-framework-for-reforming-federal-graduate-student-aid-
policy/.
\28\Jackson et al., supra note 25 at 4.
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Taken together, the Committee Print's ``affordability''
provisions could result in many students being unable to afford
graduate degrees. By eliminating Grad PLUS loans, lowering
Direct Loan limits, and providing no other increases in grant
aid, access to careers that require graduate education will be
severely limited since the cost of attendance for many of these
programs will now exceed many students' total federal student
aid eligibility.\29\ This financing structure will inevitably
harm low-income students and students of color by either
requiring them to take out predatory private loans to finance
their education or forcing them to walk away from higher
education entirely, with a sizable amount of debt but no degree
to help pay it off. Committee Democrats welcome conversations
on ways to address the serious concerns about the PLUS program
but any actions we take must not come at the expense of
compromising access and affordability for students.
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\29\See Akers et al., supra note 27 (``However, such limits may
unintentionally prevent students from attending programs that could
leave them better off, particularly low-income students and students of
color who may lack alternative options to access graduate education
financing.'').
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Loan Repayment Plans
The Committee Print streamlines the repayment options
available to Direct Loan program participants into two plans: a
standard repayment plan and a new repayment assistance plan.
While higher education advocates have long asked Congress to
streamline the loan program,\30\ the model in the Committee
Print is not designed to support borrowers; rather, its
proposed ``assistance'' plan will leave some borrowers paying
until they die and will lead many more to making decades of
unaffordable payments. The bill's repayment assistance plan
(RAP) is tiered by amount borrowed and by the borrower's
Adjusted Gross Income (AGI). Under the RAP plan all borrowers,
even those with no income, would be required to make a monthly
payment of at least $10. Additionally, unlike current income-
based repayment plans, borrowers are not eligible for
forgiveness until they've been in repayment for 30 years, so
many borrowers could end up making payments on their loans for
their entire life without receiving any relief. Higher
education advocates are concerned that this new plan will make
higher education less affordable and drive more borrowers into
delinquency and default.\31\
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\30\Streamlining Student Loan Repayment, NASFAA (2015), https://
www.nasfaa.org/uploads/documents/streamlining_repayment.pdf; Ted
Mitchell, supra note 10.
\31\Letter from Marc Egan, Dir. of Govt. Relations, Nat'l Educ.
Ass'n, to the H. Comm. on Educ. & the Workforce (Jan. 31, 2024),
available at https://www.nea.org/advocating-for-change/action-center/
letters-testimony/nea-urges-house-education-committee-vote-no-college-
cost-reduction-act-hr-6951; Press Release, TICAS, Chairwoman Foxx's
Higher Education Proposal Fall Short on Student Protections, College
Affordability (Jan. 11, 2024), https://ticas.org/media/chairwoman-
foxxs-higher-education-proposal-falls-short-on-student-protections-
college-affordability/.
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This proposal is a stark contrast to the Saving on a
Valuable Education (SAVE) Plan developed by the Biden
Administration.\32\ The SAVE plan was the most generous
repayment plan ever established and was designed to drastically
help low- and middle-income borrowers finance their educations.
Compared to the proposed RAP in the Committee Print, the SAVE
Plan requires borrowers to make payments equal to 5 percent of
their discretionary income (calculated as any income above 225
percent of the federal poverty level). The Department of
Education estimated that once fully implemented, more than one
million low-income borrowers would have qualified for $0 loan
payments per month, allowing families to focus on the basic
needs of food, housing, and transportation.\33\ Under the SAVE
plan ``borrowers will see their total payments per dollar
borrowed fall by 40%. Borrowers with the lowest projected
lifetime earnings will see payments per dollar borrowed fall by
83 percent.''\34\ Based on attacks from Republican State
Attorneys General, the SAVE plan was prevented from ever being
fully implemented, and under the Trump administration it is
officially no longer an option. Committee Democrats will
continue to advocate for the concepts embodied in the SAVE
plan, which we believe will better allow borrowers to manage
their higher education debt and focus on their other financial
needs.
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\32\U.S. Dep't of Educ., The Saving on a Valuable education (SAVE)
Plan Offers Lower Monthly Loan Payments, https://studentaid.gov/
announcements-events/save-plan (last visited on Feb. 9, 2024).
\33\Fact Sheet, The White House, FACT SHEET: The Biden-Harris
Administration Launches the SAVE Plan, the Most Affordable Student Loan
Repayment Plan Ever to Lower Monthly Payments for Millions of Borrowers
(Aug. 22, 2023), https://bidenwhitehouse.archives.gov/briefing-room/
statements-releases/2023/08/22/fact-sheet-the-biden-harris-
administration-launches-the-save-plan-the-most-affordable-student-loan-
repayment-plan-ever-to-lower-monthly-payments-for-millions-of-
borrowers/.
\34\Id.
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The Committee Print also prohibits the Secretary of
Education (Secretary) from developing new repayment plans or
modifying existing repayment plans if those changes would be
considered ``economically significant'' and increase subsidy
costs to the federal government. This is extremely concerning
because, if it became law, no future administration--Democrat
or Republican--would have the authority to make common-sense
changes to loan repayment that support the needs of borrowers.
This prohibition is a direct attack on the Biden
Administration's attempts to improve student loan repayment for
borrowers.\35\ Any disinterested party would realize it is
crucial that the Secretary has the flexibility to respond to
the ever-changing needs of borrowers; the COVID-19 pandemic was
a perfect example of the nimbleness needed to address
borrowers' economic struggles.\36\
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\35\Such direct political attacks on Administration efforts are
infused throughout majority communications; the pop-up window on the
landing web page for the Committee on Education and the Workforce reads
``The Biden administration is pursuing reckless student loan policies
that are UNFAIR and costing taxpayers BILLIONS,''. https://
edworkforce.house.gov/ (last visited Feb. 9, 2024).
\36\U.S. Dep't of Educ., COVID-19 Emergency Relief and Federal
Student Aid, https://studentaid.gov/announcements-events/covid-19 (last
visited on Feb. 9, 2024).
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Public Service Loan Forgiveness
The Committee Print does not make extensive changes to the
Public Service Loan Forgiveness (PSLF) program; however, it
excludes student loan payments made during medical and dental
internships and residencies as qualifying payments towards
PSLF. During the markup Rep. Lucy McBath (GA-06) noted that
residencies and internships reflect a time when doctors and
dentists are working the longest hours of their careers for the
least pay. During this time, under the RAP plan they could be
forced to pay $10 a month while potentially having little to no
actual income. Some of the more complex dental residency
programs last 6 years,\37\ meaning that a borrower could be in
active repayment for 6 years working at the Department of
Veteran's Affairs\38\ and none of those 72 payments would
qualify towards eventual forgiveness. Additionally, according
to the American Dental Association (ADA), many dental students
rely on PSLF as part of their student loan management strategy
to reduce their overall financial burden.\39\ Cutting PSLF for
dental and medical internships and residencies will result in
fewer doctors and dentists in underserved communities,
especially rural communities which are already facing a
healthcare shortage crisis.\40\
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\37\Benevis, How Long Is Dental Residency? (last visited Apr. 30,
2025) https://info.benevis.com/blog/dental-students/how-long-is-dental-
residency.
\38\American Dental Association, Finding A Job in Federal Dentistry
(last visited Apr. 30, 2025) https://www.ada.org/resources/careers/
finding-a-job-in-federal-dentistry#::text=Is%20
working%20as%20a%20federal,Veterans'%20Affairs%20or%20the%20military.
\39\Kaitlin Walsh Epstein and Laurel Road, Student Loan Spotlight:
How Public Service Loan Forgiveness helps dentists support underserved
communities, ADA News, (June 26, 2024) https://adanews.ada.org/new-
dentist/2024/june/student-loan-spotlight-how-public-service-loan-
forgiveness-helps-dentists-support-underserved-communities/.
\40\Rural Health Info, Health Professional Shortage Areas: Mental
Health, by County, (April 2025) https://www.ruralhealthinfo.org/charts/
7.
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Borrower Supports
While H.R. 6951 included some strong bipartisan provisions
to support borrowers in repayment, such provisions cost money,
and as a result had to be modified or eliminated from the
Committee Print. The Committee Print admirably left in place a
provision to allow borrowers to rehabilitate their defaulated
loans twice, rather than the current limit of just once. This
will provide borrowers struggling with default additional
opportunities to improve their financial wellbeing.
Unfortunately the other two consumer protections from H.R. 6951
were either deeply modified or eliminated completely. For
example H.R. 6951 eliminated interest capitalization in all
instances, building off work the Biden Administration undertook
to eliminate interest capitalization in the six places in law
it had the authority to do so.\41\ But the Committee Print only
eliminates capitalization of interest for borrowers enrolled in
the new RAP--leaving other four other instances where borrowers
will see unpaid interest added to their principle.\42\ But the
third and final bipartisan proposal from H.R. 6951, the
elimination of origination fees on all new student loans, was
not included in the Committee Print at all. Origination fees
were originally established to offset costs of the now-defunct
Federal Family Education Loan (FFEL) program.\43\ The current
origination fees of 1 percent for Direct Loans and 4 percent
for PLUS loans significantly contribute to increased loan
balance, especially for graduate borrowers.\44\ Their
elimination has significant bipartisan support in Congress;
they were all included in the Lowering Obstacles to Achieve Now
(LOAN) Act in the 118th Congress.\45\
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\41\Namely: entering repayment status, annually in income-
contingent repayment (ICR) plans and alternative repayment plans, exit
from or failure to recertify income and family size in the PAYE and
REPAYE plans, end of partial financial hardship in PAYE plan, end of
forbearance, and in default. See Hegji, supra note 48, at 26-29; Press
Release, U.S. Dep't of Educ., Education Department Release Final
Regulations to Expand and Improve Targeted Debt Relief Programs (Oct.
31, 2022), https://www.ed.gov/news/press-releases/education-department-
releases-final-regulations-expand-and-improve-targeted-debt-relief-
programs.
\42\The Executive Branch does not have the authority to eliminate
interest in the following situations: exit from or failure to recertify
income and family size in an income-based repayment (IBR) plan, end of
partial financial hardship in IBR plans, end of loan deferment, and
loan consolidation. See Hegji, supra note 22, at 26-29.
\45\Lowering Obstacles to Achievement Now Act, H.R. 1731, 118th
Cong. (2023).
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THE MAJORITY GUTS FEDERAL ACCOUNTABILITY FRAMEWORK, LEAVING STUDENTS
AND TAXPAYERS VULNERABLE
Risk Sharing Agreements
The Majority proposes a risk-sharing agreement in which all
institutions must compensate the federal government for a
portion of the unpaid principal and interest on loans for their
students. The ``risk sharing'' model has long been a Republican
policy goal designed to encourage institutions to ``have skin
in the game'' with respect to student loan repayment rates.\46\
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\46\Kelly Field, A Day in the Life of Virginia Foxx, The Chron. of
Higher Educ. (Dec. 22, 2016), https://www.chronicle.com/article/a-day-
in-the-life-of-virginia-foxx/?sra=true; The College Cost Reduction Act
Fact Sheet, H. Comm. on Educ. & the Workforce (Jan. 11, 2024), https://
edworkforce.house.gov/uploadedfiles/
1.11.24_h.r._6951_the_college_cost_reduction_act_fact_
sheet_digital_final.pdf.
---------------------------------------------------------------------------
Committee Democrats, although not opposed to holding
institutions accountable for student outcomes, have significant
concerns with this risk-sharing proposal. This model will
encourage institutions to judge programs of study solely on
their ability to provide immediate financial benefits to their
graduates. Many essential programs of study such as education
or social work, are obviously necessary but do not always have
simple return on investment equations. Other programs, like
many liberal arts programs, pay off for students, but on a
longer time horizon than contemplated by the Republicans risk
sharing scheme. The policy is also deeply worrying for under-
resourced institutions and institutions that disproportionately
serve low-income students and students of color, such as
community colleges, HBCUs, and MSIs. Many scholars have
expressed concern that without incorporating multiple dynamic
metrics that take into account the demographics of students
that institutions serve, the risk-sharing model will create
perverse incentivizes for institutions to enroll high-income
students who are most well situated to graduate and repay their
student debt.\47\ The bill does not include any mechanisms to
address these concerns, nor does it contain anything requiring
institutions or the federal government to measure potential
effects of the policy. Committee Democrats support
accountability frameworks that will incentivize institutions to
effectively serve high-need students and ensure their degree
completion, not proposals such as the one included in the
Committee Print that has the potential to deny such students
access to high-quality education.
---------------------------------------------------------------------------
\47\Ben Miller & Beth Akers, Designing Higher Education Risk-
Sharing Proposals 19-23, Ctr. for Am. Prog. (May, 2017), (https://
www.americanprogress.org/wp-content/uploads/sites/2/2017/05/
RiskSharingSynthesis-report.pdf.
---------------------------------------------------------------------------
Ultimately, the biggest concern for Committee Democrats is
that Committee Republicans view the risk-sharing model as the
sole accountability tool for institutions. Even if this model
was successful, it does not provide accountability for other
serious financial risks that unscrupulous institutions pose to
students and taxpayers.
Deregulation
By far one of the most egregious components of the
Committee Print is the complete dismantling of the existing
federal accountability framework designed to protect students
and taxpayers from waste, fraud, and abuse in higher education.
The statutory and regulatory oversight mechanisms repealed in
the bill are vital tools the Department of Education
(Department) uses to ensure students get the full benefit of
federal student aid through monitoring institutions that pose
significant risks and penalizing such institutions accordingly.
90/10
Repealed under the Committee print, the 90/10 rule requires
that for-profit institutions receive no greater than 90 percent
of their revenue from federal aid. This provision was first
established by Congress in the 1992 HEA reauthorization to
prohibit for-profit entities from deriving the entirety of
their revenue from the federal government.\48\ Unscrupulous
for-profit colleges have long preyed on vulnerable student
populations to increase their revenue without providing these
students a valuable education.\49\ In recent years, these
institutions have increasingly preyed on veterans, since their
G.I. Benefits did not count under the 90 percent cap.\50\ In
2021, Congress passed the American Rescue Plan Act, which
included a bipartisan provision to close this loophole and
prevent institutions from targeting veterans for their
benefits.\51\
---------------------------------------------------------------------------
\48\The original rule established in the 1992 HEA reauthorization
had an 85/15 revenue split. Id.
\49\Veterans Education Success, Why For-Profit Schools are
Targeting Veterans Education Benefits, Vet. Ed. Success (Jan. 1, 2014),
https://vetsedsuccess.org/why-for-profit-institutions-are-targeting-
veterans-education-benefits/.
\50\Id.
\51\American Rescue Plan Act, Pub. L. No: 117-2, 135 Stat. 4
(2021).
---------------------------------------------------------------------------
Despite strong bipartisan support for closing this
loophole,\52\ Committee Republicans continue to argue that the
90/10 rule is another part of the Democratic ``educational
agenda'' to ``expand federal intervention at the expense of
students and taxpayers.''\53\ And it is worth noting that while
Committee Republicans regularly claim to prioritize taxpayers,
CBO estimated that a previous attempt by Republicans to repeal
the 90/10 rule would have cost taxpayers $2 billion over the
2018-2027 period.\54\
---------------------------------------------------------------------------
\52\Press Release, Sen. Tom Carper, On the Senate Floor, Carper
Offers Bipartisan Amendment to Protect Student Veterans and Finally
Close 90/10 Loophole (Mar. 6, 2021), https://www.carper.senate.gov/
newsroom/press-releases/on-the-senate-floor-carper-offers-bipartisan-
amendment-to-protect-student-veterans-and-finally-close-90-10-loophole/
; American Rescue Plan Act, H.R. 1319, 117 Cong. (2021); Press Release,
Vets. Ed. Success, Veterans Education Success Hails Closure of 90/10
Loophole (Mar. 6, 2021), https://vetsedsuccess.org/veterans-education-
success-hails-closure-of-9010-loophole/.
\53\Press Release, H. Comm. on Educ. & Lab., Foxx: ``Increasing
Educational Opportunities and Supporting Veterans Should Not be a
Partisan Issue'' (Mar. 4, 2021), https://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=407226.
\54\H.R. Rep. No. 115-500, at 308 (2018).
---------------------------------------------------------------------------
Committee Democrats have witnessed the ongoing predatory
behaviors of certain for-profit institutions, particularly with
respect to veterans,\55\ and are appalled by the removal of
this bipartisan accountability framework. Congress has a
responsibility to protect America's veterans from being
manipulated by the for-profit industry.
---------------------------------------------------------------------------
\55\William Hubbard, For-Profit Colleges Prey on Veterans--The
Department of Education Must Say `No More', The Hill (Jan. 1, 2022),
https://thehill.com/opinion/education/589873-for-profit-
colleges-prey-on-veterans-the-department-of-education-must-say/; Arit
John, Veterans Burned by For Profit colleges Fight for Their Lost GI
Bill Benefits, L.A. Times (Apr. 17, 2023), https://www.latimes.com/
politics/story/2023-04-17/veterans-gi-bill-restoration-for-profit-
schools#::text=
For%20years%2C%20for%2
Dprofit%20schools,as%20loans%20or%20Pell%20Grants.
---------------------------------------------------------------------------
Gainful Employment
The gainful employment (GE) rule, also repealed by the
Committee Print, sets a meaningful and necessary framework for
the Department to enforce compliance with the statutory
requirement under the HEA that vocational training programs
prepare students for gainful employment. The GE rule helps
ensure students are attending programs designed to support
their postsecondary needs and prepare them to have good jobs in
the workforce. The rule also saves significant money for
taxpayers; analysis indicates that the previous Trump
Administration's previous recission of the GE rule risked
losing roughly $6.2 billion in taxpayer funds over ten years
through Pell Grants and student loans flowing to low-quality
programs that leave students with high levels of debt and low
earnings.\56\
---------------------------------------------------------------------------
\56\Program Integrity: Gainful Employment, 84 Fed. Reg. 31392,
31447, (Jul. 1, 2019) (codified at 34 C.F.R. 600 and 34 C.F.R. 668).
---------------------------------------------------------------------------
Thankfully, in 2023, the Biden Administration released the
strongest ever GE rule to protect students from low-quality
training programs by establishing metrics related to high
levels of debt and low post-completion earnings.\57\ The
Department estimates that 92 percent of public institutions and
97 percent of private non-profit institutions have no programs
that fail the new GE rule.\58\ Comparatively, despite for-
profit institutions accounting for only 11 percent of GE
programs, 55 percent of these institutions have at least one
program of study that does not pass one of the two GE metrics,
and nearly 90 percent of students in failing GE programs attend
for-profit institutions.\59\ Due to the disproportionate level
of failing programs at for-profit institutions, the Department
estimates that as a consequence of the GE rule, there will be
significant enrollment shifts from low-quality programs to
programs at community colleges and HBCUs.
---------------------------------------------------------------------------
\57\Financial Value Transparency and Gainful Employment, 88 Fed.
Reg. 70004, 70004-70193 (Oct. 10, 2023) (codified at 34 C.F.R. pt. 600
and 34 C.F.R. pt. 668).
\58\U.S. Dep't of Educ., Biden-Harris Administration Announces
Landmark Regulations on Accountability, Transparency & Financial Value
for Postsecondary Students, 4, Dep't. of Educ. (2021), https://
www2.ed.gov/policy/highered/reg/hearulemaking/2021/gainful-employment-
notice-of-final-review-
factsheet.pdf?utm_content=&utm_medium=email&utm_name=&utm_source=
govdelivery&utm_term=.
\59\Id.
---------------------------------------------------------------------------
Committee Republicans have decried this rule as a ``witch
hunt'' against for-profit institutions\60\ and continue to
ignore the what the data clearly shows: low-quality for-profit
programs will continue to bilk students and taxpayers unless
they are held accountable for poor student outcomes.
---------------------------------------------------------------------------
\60\Press Release, H. Comm. on Educ. & the Workforce, New
Regulations Fail to Protect Students and Taxpayers (May 17, 2023),
https://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=409178.
---------------------------------------------------------------------------
Borrowers Defense to Repayment
The Majority eliminates the current borrowers defense to
repayment rule, a powerful legal tool providing loan
forgiveness for borrowers who have been defrauded by colleges
that engaged in certain instances of gross misconduct.\61\ In
2022, the Biden Administration released a new borrowers defense
regulation that establishes the strongest framework yet for
borrowers to raise a defense to repayment if their institution
has misled or harmed them.\62\ Since promulgating this rule,
the Department has discharged more than $14.8 billion in loans
for over one million borrowers through borrowers defense.\63\
---------------------------------------------------------------------------
\61\The six grounds for a borrower defense charge as of 2023 are
substantial misrepresentation, substantial omission of fact, breach of
contract, aggressive and deceptive recruitment, judgement, and prior
secretarial action. See generally U.S. Dep't of Educ., Borrower Defense
Loan Discharge https://studentaid.gov/manage-loans/forgiveness-
cancellation/borrower-defense (providing an overview of Borrower
Defense process).
\62\U.S. Dep't of Education, infra note 63.
\63\Press Release, U.S. Dep't of Educ., Biden-Harris Administration
Approves $72 Million in Borrower Defense Discharges for over 2,300
Borrowers who Attended Ashford University (Aug. 30, 2023), https://
www.ed.gov/news/press-releases/biden-harris-administration-approves-72-
million-borrower-defense-discharges-over-2300-borrowers-who-attended-
ashford-university.
---------------------------------------------------------------------------
While Committee Republicans paint the Department as being
the ``judge, jury, and executioner'' of targeted debt relief
such as borrowers defense,\64\ it must be underscored that
borrowers defense also helps recover significant amounts of
cancelled loan amounts from institutions, which helps ensure
taxpayers are not harmed by the gross misconduct of an
institution.\65\ While repealing this rule will make it
extremely hard for defrauded students to receive loan
discharges to which they are entitled, it will also allow
disreputable schools to get away with their misconduct and
leave taxpayers holding the bag. Committee Democrats remain
committed to supporting students who have been defrauded by
their institutions and, through no fault of their own, have not
reaped the benefits of a higher education.
---------------------------------------------------------------------------
\64\Press Release, H. Comm. on Educ. & Lab., Foxx Reacts to
Democrats' PSLF Scheme (Oct. 6, 2021), https://edworkforce.house.gov/
news/documentsingle.aspx?DocumentID=407766.
\65\The Inst. for Coll. Access & Success, What to Know about the
Borrowed Defense to Repayment Rule, https://ticas.org/files/pub_files/
what_to_know_about_bd_factsheet.pdf (last visited on Feb. 7, 2024).
---------------------------------------------------------------------------
Closed School Discharge
When institutions close precipitously, students are often
left scrambling to try to transfer to another institution, and
many do not ultimately transfer. The closed school discharge
rule helps borrowers get a ``fresh start'' after a school
closure by discharging student loans taken out at the closed
school.\66\ The Biden Administration strengthened the closed
school discharge rule by providing an automatic loan discharge
for all borrowers one year after the closure of their
institution.\67\ This rule is an essential backstop for
students who were promised an education and a credential they
never received through no fault of their own. The Majority will
wrongfully remove this tool from defrauded borrowers, and
Committee Republicans have produced no justification for its
elimination.
---------------------------------------------------------------------------
\66\U.S. Dep't of Educ., Off. of Postsecondary Educ., Issue Paper
#2: Closed School Discharge, (Oct. 2021), https://www2.ed.gov/policy/
highered/reg/hearulemaking/2021/2closedschooldisc.pdf.
\67\U.S. Dep't of Education, supra note 63.
---------------------------------------------------------------------------
Prohibition on Promulgating Regulations
The Committee Print prohibits the Secretary, and all future
Secretaries, from implementing any substantially similar
regulations to the repealed or revised regulations in the bill.
This is another direct attack on the significant progress the
Biden Administration made to strengthen higher education
regulations to protect students and taxpayers.\68\ Throughout
last Congress, Committee Republicans have touted the importance
of accountability in higher education.\69\ Yet, they have
proposed to eliminate these protections and restrict future
federal engagement on them without proposing a robust
alternative accountability framework.
---------------------------------------------------------------------------
\68\Press Release, U.S. Dep't of Educ., Biden-Harris Administration
Releases Final Rules that Strengthen Accountability for Colleges and
Consumer Protection for Students (Oct. 24, 2023), https://www.ed.gov/
news/press-releases/biden-harris-administration-releases-final-rules-
strengthen-accountability-colleges-and-consumer-protection-
students#::text=The%20final%20rules%20
add%20several,requiring%20adequate%20career%20services%3B%20and; Press
Release, U.S. Dep't of Educ., Biden-Harris Administration Announces
Landmark Final Rules to Protect Consumers from Unaffordable Student
Debt and Increase Transparency (Sep. 27, 2023), https://www.ed.gov/
news/press-releases/biden-harris-administration-announces-landmark-
final-rules-protect-consumers-unaffordable-student-debt-and-increase-
transparency; Press Release, U.S. Dep't of Educ., Final Regulations:
Borrower Defense to Repayment, Pre-dispute Arbitration, Interest
Capitalization, Total and Permanent Disability Discharges, Closed
School Discharges, Public Service Loan Forgiveness, and False
Certification Discharges (Nov. 1, 2022), https://fsapartners.ed.gov/
knowledge-center/library/federal-registers/2022-11-01/final-
regulations-
borrower-defense-repayment-pre-dispute-arbitration-interest-
capitalization-total-and-permanent-
disability-discharges-closed-school-discharges-public-service-loan-
forgiveness-and.
\69\Lowering Costs and Increasing Value for Students, Institutions,
and Taxpayers, Hearing Before the Subcomm. on Higher Educ. & Workforce
Development of the H. Comm. on Educ. & the Workforce, 118th Cong.
(2023).
---------------------------------------------------------------------------
It cannot be understated that this extreme deregulation
agenda will erode the integrity of the federal student aid
system and signal that the federal government does not have the
responsibility to protect students and taxpayers from waste,
fraud, and abuse in higher education. Committee Democrats
believe the existing accountability framework--augmented by
improvements by the Biden Administration--is an essential
oversight mechanism for America's students and taxpayers.
DEMOCRATIC AMENDMENTS OFFERED DURING MARKUP OF THE COMMITTEE PRINT
Committee Democrats offered 34 amendments to the Committee
Print, on a range of issues. Every amendment put to a question
of adoption failed on a straight party line votes with all
Members of the Majority voting against them.
----------------------------------------------------------------------------------------------------------------
Amendment Offered By Description Action Taken
----------------------------------------------------------------------------------------------------------------
#1................................... Ms. Adams.............. Prohibits the title Defeated.
from going into effect
until the Secretary
certifies that the
risk sharing model
does not
disproportionately
harm HBCUs.
#2................................... Ms. Adams.............. Prohibits the title Defeated.
from taking effect
until the Secretary
certifies that it will
not increase out of
pocket costs for low-
income students.
#3................................... Ms. Adams.............. Strike capping student Defeated.
aid at median cost.
#4................................... Ms. McBath............. Strike repeal of Closed Defeated.
School Discharge.
#5................................... Ms. McBath............. Changes the public Defeated.
service job to include
medical and dental
residency programs
where the borrower is
completing the program
in a rural area as
defined in section 861
of the HEA.
#6................................... Ms. Hayes.............. Rule of Construction: Defeated.
Nothing in this title
Defeated shall be
construed to permit
any actions that
result in a reduction
in SNAP participation
or access to SNAP
benefits.
#7................................... Ms. Hayes.............. Allows teachers' five Defeated.
years of classroom
service to qualify for
both the Stafford
Student Loan
Forgiveness (SSLF)
program and toward the
ten years of loan
payments required for
Public Service Loan
Forgiveness (PSLF)
program.
#8................................... Ms. Bonamici........... Rule of Construction: Defeated.
Nothing in this title
shall be construed to
permit any actions
that result in a
reduction in WIC
participation.
#9................................... Ms. Bonamici........... Strike limitation on Defeated.
secretarial authority
to regulate on student
loans.
#10.................................. Ms. Bonamici........... Prohibit funding cuts Defeated.
until OIG ensures low-
income borrowers won't
see an increase in
monthly loan payments.
#11.................................. Mr. Courtney........... Strike and replace Defeated.
reforms to streamline
and improve the Public
Service Loan
Forgiveness Program.
#12.................................. Mr. Mannion............ Require GAO to study Defeated.
impact of contracts
related to Defeated
higher education
terminated by the
Department or DOGE.
#13.................................. Mr. Mannion............ Rule of Construction: Defeated.
Nothing in this title
shall be construed to
permit any actions
that could negatively
impact disabled higher
education students'
access to home and
community-based
services through
Medicaid.
#14.................................. Mr. Takano............. Strike repeal of Defeated.
Borrower's Defense.
#15.................................. Ms. McBath............. Prohibit the section Defeated.
from going into effect
until the Secretary of
Education certifies to
Congress that nothing
in this subtitle or
such amendments will
result in a decrease
in the average Pell
Grant award.
#16.................................. Mr. Scott.............. Striking section Defeated.
changing Pell
Eligibility.
#17.................................. Ms. Omar............... Strikes sections Defeated.
excluding part-time
students from Pell
Grant.
#18.................................. Ms. Omar............... Strikes economic Defeated.
hardship and
unemployment deferment
sunset.
#19.................................. Ms. Omar............... Insert prohibition on Defeated.
wage and Social
Security garnishment
for defaulted loans.
#20.................................. Ms. Omar............... Rule of Construction: Defeated.
Nothing in this title
shall be construed to
Defeated permit
construed as limiting
enrolled students'
access to Medicaid.
#21.................................. Ms. Omar............... Strikes text of the Offered and Withdrawn.
bill and replaces with
Student Debt
Cancellation Act.
#22.................................. Mr. DeSaulnier......... Prevents the Committee Defeated.
Print from coming into
effect until the
Secretary certifies
that the Department
will comply with valid
court orders.
#23.................................. Mr. Scott.............. Replace the title's Defeated.
repayment plan with
SAVE.
#24.................................. Mr. Takano............. Strike repeal of 90/10 Defeated.
Rule.
#25.................................. Mr. Takano............. Prohibit the title from Defeated.
taking effect the
Secretary certifies it
wouldn't result in
fraud and abuse of
student veterans.
#26.................................. Ms. Lee................ Rule of Construction: Defeated.
Nothing in this title
shall be construed as
limiting students'
access to reproductive
health care services
to be limited,
including abortion
services.
#27.................................. Ms. Lee................ Rule of Construction: Defeated.
Nothing in this title
shall be construed to
permit DOGE to receive
health information of
college students.
#28.................................. Ms. Lee................ Strikes loan limits.... Defeated.
#29.................................. Ms. Lee................ Eliminates the current Defeated.
and any future Pell
shortfalls by
authorizing such sums
as necessary, making
all Pell funding
mandatory.
#30.................................. Ms. Lee................ Prohibits institutions Defeated.
from providing
preferential treatment
in admissions to
applicants based on
their relationships to
donors or alumni of
the institution.
#31.................................. Ms. Lee................ Creates an exemption to Defeated.
the reimbursement
requirements for
institutions where
more than 20% of
enrolled students are
eligible for a Federal
Pell Grant.
#32.................................. Mr. Casar.............. Restrict access to Defeated.
certain info/data to
exclude ``special
government employees''
and other non-ED staff.
#33.................................. Mr. Casar.............. Prohibits title from Defeated.
going into effect
unless all federal
contracts, grants, and
incentives awarded to
the companies of
special government
employees are
rescinded/cancelled/
terminated.
#34.................................. Mr. Scott.............. Prohibits title from Defeated.
going into effect
unless cuts to
Medicaid and SNAP
would not result in
Defeated fewer
families being
eligible for free
school meals.
----------------------------------------------------------------------------------------------------------------
CONCLUSION
The Committee Print includes harmful policies that will
erode the integrity of the Title IV program and the U.S. higher
education system as a whole. It reduces access to college,
makes college education less affordable, and eliminates
customer protections for borrowers. At a fundamental level it
increases the share of the cost of higher education borne by
students, who will pay more for longer to go to school. And it
does all this simply to provide funding for billionaire tax
cuts. Committee Democrats cannot support legislation that will
leave students and borrowers worse off, especially when done
for this purpose. For this and the reasons stated above,
Committee Democrats unanimously opposed the Committee Print
when the Committee on Education and the Workforce considered it
on April 29, 2025. We strongly urge the House of
Representatives to do the same.
Robert C. ``Bobby'' Scott,
Ranking Member.
Suzanne Bonamici,
Mark Takano,
Mark DeSaulnier,
Donald Norcross,
Lucy McBath,
Jahana Hayes,
Summer Lee,
Members of Congress.
House of Representatives,
Committee on Energy and Commerce,
Washington, DC, May 14, 2025.
Hon. Jodey C. Arrington,
Chairman, Committee on the Budget,
House of Representatives, Washington, DC.
Dear Chairman Arrington: Pursuant to section 2001 of the
Concurrent Resolution on the Budget for Fiscal Year 2025, I
hereby transmit these recommendations of the Committee on
Energy and Commerce which have been approved by a vote of the
Committee on May 14, 2025, to the House Committee on the
Budget. This submission is in order to comply with
reconciliation directives included in H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025, and
is consistent with section 310 of the Congressional Budget Act
of 1974.
Sincerely,
Brett Guthrie,
Chairman.
Committee Print
_______________________________________________________________________
(Providing for reconciliation pursuant to H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025)
_______________________________________________________________________
TITLE IV--ENERGY AND COMMERCE
Subtitle A--Energy
SEC. 41001. RESCISSIONS RELATING TO CERTAIN INFLATION REDUCTION ACT
PROGRAMS.
(a) State-based Home Energy Efficiency Contractor Training
Grants.--The unobligated balance of any amounts made available
under subsection (a) of section 50123 of Public Law 117-169 (42
U.S.C. 18795b) is rescinded.
(b) Funding for Department of Energy Loan Programs Office.--
The unobligated balance of any amounts made available under
subsection (b) of section 50141 of Public Law 117-169 (136
Stat. 2042) is rescinded.
(c) Advanced Technology Vehicle Manufacturing.--The
unobligated balance of any amounts made available under
subsection (a) of section 50142 of Public Law 117-169 (136
Stat. 2044) is rescinded.
(d) Energy Infrastructure Reinvestment Financing.--The
unobligated balance of any amounts made available under
subsection (a) of section 50144 of Public Law 117-169 (136
Stat. 2044) is rescinded.
(e) Tribal Energy Loan Guarantee Program.--The unobligated
balance of any amounts made available under subsection (a) of
section 50145 of Public Law 117-169 (136 Stat. 2045) is
rescinded.
(f) Transmission Facility Financing.--The unobligated balance
of any amounts made available under subsection (a) of section
50151 of Public Law 117-169 (42 U.S.C. 18715) is rescinded.
(g) Grants to Facilitate the Siting of Interstate Electricity
Transmission Lines.--The unobligated balance of any amounts
made available under subsection (a) of section 50152 of Public
Law 117-169 (42 U.S.C. 18715a) is rescinded.
(h) Interregional and Offshore Wind Electricity Transmission
Planning, Modeling, and Analysis.--The unobligated balance of
any amounts made available under subsection (a) of section
50153 of Public Law 117-169 (42 U.S.C. 18715b) is rescinded.
(i) Advanced Industrial Facilities Deployment Program.--The
unobligated balance of any amounts made available under
subsection (a) of section 50161 of Public Law 117-169 (42
U.S.C. 17113a) is rescinded.
SEC. 41002. FERC CERTIFICATES AND FEES FOR CERTAIN ENERGY
INFRASTRUCTURE AT INTERNATIONAL BOUNDARIES OF THE
UNITED STATES.
(a) Definitions.--In this section:
(1) Certificate of crossing.--The term ``certificate
of crossing'' means a permit for the construction,
connection, operation, or maintenance of a cross-border
segment.
(2) Commission.--The term ``Commission'' means the
Federal Energy Regulatory Commission.
(3) Covered facility.--The term ``covered facility''
means--
(A) an oil, natural gas, hydrocarbon liquids,
refined petroleum products, hydrogen, or carbon
dioxide pipeline;
(B) a pipeline for the movement of any other
energy-related product; and
(C) an electric transmission facility.
(4) Cross-border segment.--The term ``cross-border
segment'' means a segment, as determined by the
Commission, of a covered facility that is located at an
international boundary between--
(A) the United States and Canada; or
(B) the United States and Mexico.
(5) Presidential permit.--The term ``Presidential
permit'' means a permit or other approval issued or
required by the President under or pursuant to any
provision of law, including under or pursuant to any
Executive order, with respect to the construction,
connection, operation, or maintenance of a cross-border
segment.
(b) Certificate of Crossing and Fee.--
(1) In general.--The Commission shall, upon payment
of a fee in the amount of $50,000 by a person
requesting a certificate of crossing, issue to such
person such certificate of crossing.
(2) Treatment of fee.--A fee paid under this
subsection shall not be considered a fee assessed under
section 3401 of the Omnibus Budget Reconciliation Act
of 1986 (42 U.S.C. 7178).
(c) Prohibition.--Except as provided in subsection (d), no
person may construct, connect, operate, or maintain a cross-
border segment for the import or export of oil, natural gas,
hydrocarbon liquids, refined petroleum products, hydrogen,
carbon dioxide, or other energy-related products, or for the
transmission of electricity, to or from Canada or Mexico
without obtaining a certificate of crossing from the Commission
under subsection (b) for the applicable construction,
connection, operation, or maintenance.
(d) Previously Authorized Facilities.--Subsection (c) shall
not apply to the construction, connection, operation, or
maintenance of a cross-border segment with respect to which a
Presidential permit that was issued before the date of
enactment of this Act applies and is in effect.
SEC. 41003. NATURAL GAS EXPORTS AND IMPORTS.
Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended
by adding at the end the following:
``(g) Charge for Exportation or Importation of Natural Gas.--
The Secretary of Energy shall, by rule, impose and collect, for
each application to export natural gas from the United States
to a foreign country with which there is not in effect a free
trade agreement requiring national treatment for trade in
natural gas, or to import natural gas from such a foreign
country, a nonrefundable charge of $1,000,000, and, for
purposes of subsection (a), the importation or exportation of
natural gas that is proposed in an application for which such a
nonrefundable charge was imposed and collected shall be deemed
to be in the public interest, and such an application shall be
granted without modification or delay.''.
SEC. 41004. FUNDING FOR DEPARTMENT OF ENERGY LOAN GUARANTEE EXPENSES.
In addition to amounts otherwise available, there is
appropriated to the Secretary of Energy, out of any money in
the Treasury not otherwise appropriated, $5,000,000, to remain
available for a period of five years for administrative
expenses associated with carrying out section 116 of the Alaska
Natural Gas Pipeline Act (15 U.S.C. 720n).
SEC. 41005. EXPEDITED PERMITTING.
The Natural Gas Act is amended by adding after section 15 (15
U.S.C. 717n) the following:
``SEC. 15A. EXPEDITED PERMITTING.
``(a) Definitions.--In this section:
``(1) Covered application.--The term `covered
application' means an application for an authorization
under section 3 or a certificate of public convenience
and necessity under section 7, as applicable, for
activities that include construction.
``(2) Federal authorization.--The term `Federal
authorization' has the meaning given such term in
section 15(a).
``(b) Expedited Review.--
``(1) Notification of election and payment of fee.--
Prior to submitting a covered application, an applicant
may elect to obtain an expedited review of all Federal
authorizations required for the approval of such
covered application by--
``(A) submitting to the Commission a written
notification--
``(i) of the election; and
``(ii) that identifies each Federal
authorization required for the approval
of the covered application and each
Federal, State, interstate, or Tribal
agency that will consider an aspect of
each such Federal authorization; and
``(B) making a payment to the Secretary of
the Treasury in an amount that is the lesser
of--
``(i) one percent of the expected
cost of the applicable construction, as
determined by the applicant; or
``(ii) $10,000,000 (adjusted for
inflation, as the Secretary of the
Treasury determines necessary).
``(2) Submission and review of applications.--
``(A) Application.--Not later than 60 days
after the date on which an applicant elects to
obtain an expedited review under paragraph (1),
the applicant shall submit to the Commission
the covered application for which such election
for an expedited review was made, which shall
include--
``(i) the scope of the applicable
activities, including capital
investment, siting, temporary
construction, and final workforce
numbers;
``(ii) the industrial sector of the
applicant, as classified by the North
American Industry Classification
System; and
``(iii) a list of the statutes and
regulations that are relevant to the
covered application.
``(B) Approval.--
``(i) Standard deadline.--Except as
provided in clause (ii), not later than
one year after the date on which an
applicant submits a covered application
pursuant to subparagraph (A)--
``(I) each Federal, State,
interstate, or Tribal agency
identified under paragraph
(1)(A)(ii) shall--
``(aa) review the
relevant Federal
authorization
identified under such
paragraph; and
``(bb) subject to any
conditions determined
by such agency to be
necessary to comply
with the requirements
of the Federal law
under which such
approval is required,
approve such Federal
authorization; and
``(II) the Commission shall--
``(aa) review the
covered application;
and
``(bb) subject to any
conditions determined
by the Commission to be
necessary to comply
with the requirements
of this Act, approve
the covered
application.
``(ii) Extended deadline.--
``(I) Extension.--With
respect to a covered
application submitted pursuant
to subparagraph (A), the
Commission may approve a
request by an agency identified
under paragraph (1)(A)(ii) for
an extension of the one-year
deadline imposed by clause (i)
of this subparagraph for a
period of 6 months if the
Commission receives consent
from the relevant applicant.
``(II) Applicability.--If the
Commission approves a request
for an extension under
subclause (I), such extension
shall apply to the applicable
covered application and the
Federal authorization for which
the extension was requested.
``(C) Effect of failure to meet deadline.--
``(i) Deemed approval.--Any covered
application submitted pursuant to
subparagraph (A), or Federal
authorization that is required with
respect to such covered application,
that is not approved by the applicable
deadline under subparagraph (B) shall
be deemed approved in perpetuity,
notwithstanding any procedural
requirements relating to such approval
under the Federal law under which such
approval was required (including any
requirements applicable to the
effective period of a Federal
authorization).
``(ii) Compliance.--A person carrying
out activities under a covered
application or Federal authorization
that has been deemed approved under
clause (i) shall comply with the
requirements of the Federal law under
which such approval was required (other
than with respect to any procedural
requirements relating to such approval,
including any requirements relating to
the effective period of the Federal
authorization).
``(c) Judicial Review.--
``(1) Reviewable claims.--
``(A) In general.--Notwithstanding any other
provision of law, no court shall have
jurisdiction to review a claim with respect to
the approval of a covered application or
Federal authorization under subparagraph (B) or
(C)(i) of subsection (b)(2), except for a claim
under chapter 7 of title 5, United States Code,
filed not later than 180 days after the date of
such approval by--
``(i) the applicant; or
``(ii) a person who has suffered, or
likely and imminently will suffer,
direct and irreparable economic harm
from the approval.
``(B) Claims by certain non-applicants.--An
association may only bring a claim on behalf of
one or more of its members pursuant to
subparagraph (A)(ii) if each member of the
association has suffered, or likely and
imminently will suffer, the harm described in
subparagraph (A)(ii).
``(2) Standard of review.--If an applicant or other
person brings a claim described in paragraph (1) with
respect to the approval of a covered application or
Federal authorization under subsection (b)(2)(B), the
court shall hold unlawful and set aside any agency
actions, findings, and conclusions in accordance with
section 706(2) of title 5, United States Code, except
that, for purposes of the application of subparagraph
(E) of such section, the court shall apply such
subparagraph by substituting `clear and convincing
evidence' for `substantial evidence'.
``(3) Exclusive jurisdiction.--Notwithstanding any
other provision of law, the United States Court of
Appeals for the District of Columbia Circuit shall have
original and exclusive jurisdiction over any claim--
``(A) alleging the invalidity of subsection
(b); or
``(B) that an agency action relating to a
covered application or Federal authorization
under subsection (b) is beyond the scope of
authority conferred by the Federal law under
which such agency action is made.''.
SEC. 41006. CARBON DIOXIDE, HYDROGEN, AND PETROLEUM PIPELINE
PERMITTING.
The Natural Gas Act is amended by inserting after section 7
(15 U.S.C. 717f) the following:
``SEC. 7A. CARBON DIOXIDE, HYDROGEN, AND PETROLEUM PIPELINE PERMITTING.
``(a) Covered Pipeline Defined.--In this section, the term
`covered pipeline' means--
``(1) a pipeline or pipeline facility for the
transportation of carbon dioxide that is regulated
under chapter 601 of title 49, United States Code,
pursuant to section 60102(i) of such chapter;
``(2) a gas pipeline facility, as such term is
defined in section 60101 of title 49, United States
Code, for the transportation of hydrogen that is
regulated under chapter 601 of such title; or
``(3) a hazardous liquid pipeline facility, as such
term is defined in section 60101 of title 49, United
States Code, for the transportation of petroleum or a
petroleum product that is regulated under chapter 601
of such title.
``(b) Application and Fee.--Any person may submit to the
Commission--
``(1) an application for a license authorizing the
whole or any part of the operation, sale, service,
construction, extension, or acquisition of a covered
pipeline, which application shall be made in the same
manner as, and in accordance with the requirements for,
an application for a certificate of public convenience
and necessity under section 7(d); and
``(2) a fee in the amount of $10,000,000 for the
consideration of such application.
``(c) Procedure.--
``(1) In general.--With respect to each application
for which a fee is submitted under subsection (b), the
Commission shall--
``(A) consider the application in accordance
with the procedures applicable to an
application for a certificate of public
convenience and necessity under the matter
preceding the proviso in section 7(c)(1)(B),
including the procedure provided in section
7(e); and
``(B) in accordance with section 7(e), issue
the license for which the application was
submitted or deny such application.
``(2) Necessary modifications.--For purposes of this
section, the Commission may modify procedures in place
under section 7 as the Commission determines necessary
to apply such procedures to the consideration,
issuance, or denial of an application under this
section.
``(d) Effect of License.--Notwithstanding any other provision
of law, if the Commission issues a license under subsection
(c)(1) of this section and the licensee is in compliance with
such license, no requirement of State or local law that
requires approval of the location of the covered pipeline with
respect to which the license is issued may be enforced against
the licensee.
``(e) Application to Other Provisions.--
``(1) Extension of facilities; abandonment of
service.--For purposes of section 7--
``(A) subsection (b) of such section shall be
applied with respect to this section by
substituting `licensee under section 7A' for
`natural-gas company';
``(B) subsection (c)(2) of such section shall
be applied with respect to this section--
``(i) by substituting `licensee under
section 7A' for `natural-gas company';
and
``(ii) by substituting `petroleum or
a petroleum product' for `natural gas'
each place it appears;
``(C) subsection (f)(1) shall be applied with
respect to this section--
``(i) by substituting `license under
section 7A' for `authorization under
this section'; and
``(ii) by substituting `licensee
under section 7A' for `natural-gas
company';
``(D) subsection (f)(2) shall be applied with
respect to this section--
``(i) by substituting `transported
liquid or gas is consumed' for `gas is
consumed'; and
``(ii) by substituting `a liquid or
gas to another licensee under section
7A' for `natural gas to another natural
gas company';
``(E) subsection (g) shall be applied with
respect to this section--
``(i) by substituting `licenses under
section 7A' for `certificates of public
convenience and necessity'; and
``(ii) by substituting `licensee
under section 7A' for `natural-gas
company';
``(F) subsection (h) of such section shall be
applied with respect to this section--
``(i) by substituting `licensee under
section 7A' for `holder of a
certificate of public convenience and
necessity'; and
``(ii) by substituting `to carry out
an activity authorized by the license
issued under such section' for `to
construct, operate, and maintain a pipe
line or pipe lines for the
transportation of natural gas, and the
necessary land or other property, in
addition to right-of-way, for the
location of compressor stations,
pressure apparatus, or other stations
or equipment necessary to the proper
operation of such pipe line or pipe
lines'.
``(2) Process coordination; hearings; rules of
procedure.--For purposes of applying section 15 with
respect to this section, each reference to an
application in subsection (a) of such section shall be
considered to be a reference to an application for a
license under this section.
``(3) Rehearing; court review of orders.--For
purposes of section 19--
``(A) subsection (b) of such section shall be
applied with respect to this section by
substituting `person who submitted the relevant
application and paid a fee under section 7A'
for `natural gas company'; and
``(B) subsection (d) of such section shall be
applied with respect to this section by
substituting `covered pipeline with respect to
which an application and fee has been submitted
under section 7A' for `facility subject to
section 3 or section 7' each place it appears.
``(4) Enforcement of act; regulations and orders.--
For purposes of section 20(d), paragraph (1) of such
section shall be applied with respect to this section
by substituting `company that is a licensee under
section 7A' for `natural gas company'.''.
SEC. 41007. DE-RISKING COMPENSATION PROGRAM.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Secretary for fiscal
year 2026, out of any money in the Treasury not otherwise
appropriated, $10,000,000, to remain available through
September 30, 2034, to carry out this section: Provided, That
no disbursements may be made under this section after September
30, 2034.
(b) De-Risking Compensation Program.--
(1) Establishment.--There is established in the
Department of Energy a program, to be known as the De-
Risking Compensation Program, to provide compensation
to sponsors, with respect to covered energy projects,
that suffer unrecoverable losses due to qualifying
Federal actions.
(2) Eligibility.--A sponsor may enroll in the program
with respect to a covered energy project if--
(A) all approvals or permits required or
authorized under Federal law for the covered
energy project have been received, regardless
of whether a court order subsequently remands
or vacates such approvals or permits;
(B) the sponsor commenced construction of the
covered energy project or made capital
expenditures with respect to the covered energy
project in reliance on such approvals or
permits; and
(C) at the time of enrollment, no qualifying
Federal action has been issued or taken that
has an effect described in subsection (g)(4)(B)
on the covered energy project.
(3) Application.--A sponsor may apply to enroll with
respect to a covered energy project in the program by
submitting to the Secretary an application containing
such information as the Secretary may require.
(4) Enrollment.--Not later than 90 days after the
date on which the Secretary receives an application
submitted under paragraph (3), the Secretary shall
enroll the sponsor in the program for the covered
energy project with respect to which the application
was submitted if the Secretary determines that the
sponsor meets the requirements of paragraph (2) with
respect to the covered energy project.
(c) Fees and Premiums.--
(1) Enrollment fee.--Not later than 60 days after the
date on which a sponsor is enrolled in the program
under subsection (b)(4), the sponsor shall pay to the
Secretary a one-time enrollment fee equal to 5 percent
of the sponsor capital contribution for the applicable
covered energy project.
(2) Annual premiums.--
(A) In general.--The Secretary shall
establish and annually collect a premium from
each sponsor enrolled in the program for each
covered energy project with respect to which
the sponsor is enrolled.
(B) Requirements.--A premium established and
collected from a sponsor under subparagraph (A)
shall--
(i) be equal to 1.5 percent of the
sponsor capital contribution for the
applicable covered energy project; and
(ii) be paid beginning with the year
of enrollment and continuing until the
earlier of--
(I) fiscal year 2033; or
(II) the year in which the
sponsor withdraws from the
program with respect to the
applicable covered energy
project.
(C) Adjustment.--The Secretary may adjust the
percentage required by subparagraph (B)(i) once
every two fiscal years to ensure Fund solvency,
except that--
(i) the Secretary may not vary such
percentage between sponsors or
projects; and
(ii) such percentage may not exceed 5
percent.
(D) Publication.--The Secretary shall publish
in the Federal Register not later than 60 days
prior to the start of each fiscal year a list
of each premium to be collected for the fiscal
year.
(d) Compensation.--
(1) In general.--Using amounts available in the Fund,
and subject to paragraph (5), the Secretary shall
provide compensation to a sponsor enrolled in the
program with respect to a covered energy project if--
(A) the sponsor paid the enrollment fee and
the premium for each year the sponsor was
enrolled in the program with respect to the
covered energy project; and
(B) the sponsor demonstrates, in a request
submitted to the Secretary, that a qualifying
Federal action has been issued or taken that
has an effect described in subsection (g)(4)(B)
on the covered energy project.
(2) Request for compensation.--A request under
paragraph (1) shall contain the following:
(A) Information on each Federal approval or
permit relating to the covered energy project,
including the date on which such approval or
permit was issued.
(B) A certified accounting of capital
expenditures made in reliance on each such
Federal approval or permit.
(C) A description of, and, if applicable, a
citation to, the applicable qualifying Federal
action.
(D) A causal statement showing how the
qualifying Federal action directly resulted in
unrecoverable losses or cessation of the
covered energy project and that absent the
qualifying Federal action the project would
have otherwise been viable.
(E) Any supporting economic analysis
demonstrating the financial effects of the
covered energy project being rendered unviable.
(3) Approval.--The Secretary shall approve a request
submitted under paragraph (1) and, subject to paragraph
(5), provide compensation to the applicable sponsor if
the Secretary determines that such request is complete
and in compliance with the requirements of this
section.
(4) Limitations on denials.--The Secretary may not
deny a request submitted under paragraph (1) based on--
(A) the merit of the applicable covered
energy project, as determined by the Secretary;
or
(B) the type of technology used in the
applicable covered energy project.
(5) Limitations on compensation amount.--
(A) Sponsors.--The amount of compensation
provided to a sponsor under this subsection
with respect to a covered energy project shall
not exceed the sponsor capital contribution for
the covered energy project.
(B) Available funds.--In determining the
amount of compensation to be provided to a
sponsor under this subsection--
(i) such amount may be any amount,
including zero, that is less than or
equal to the amount of the sponsor
capital contribution for the covered
energy project, regardless of the
amount of capital expenditures made by
the sponsor (as certified and included
in the request pursuant to paragraph
(2)(B)); and
(ii) the Secretary shall determine
such amount in a manner that ensures no
funds will be obligated or expended in
amounts that exceed the amounts in the
Fund at the time of approval of the
applicable request submitted under
paragraph (1).
(e) De-Risking Compensation Fund.--
(1) Establishment.--There is established a fund, to
be known as the De-Risking Compensation Fund,
consisting of such amounts as are deposited in the Fund
under this subsection or credited to the Fund under
subsection (f).
(2) Use of funds.--Amounts in the Fund--
(A) shall remain available until September
30, 2034; and
(B) may be used, without further
appropriation--
(i) to make compensation payments to
sponsors under this section; and
(ii) to administer the program.
(3) Limitation on administrative expenses.--Not more
than 3 percent of amounts in the Fund may be used to
administer the program.
(4) Deposits.--The Secretary shall deposit the fees
and premiums received under subsection (c) into the
Fund.
(f) Fund Management and Investment.--The Fund shall be
managed and invested as follows:
(1) The Fund shall be maintained and administered by
the Secretary.
(2) Amounts in the Fund shall be invested in
obligations of the United States in accordance with the
requirements of section 9702 of title 31, United States
Code.
(3) The interest on such investments shall be
credited to the Fund.
(g) Definitions.--For purposes of this section:
(1) Covered energy project.--The term ``covered
energy project'' means a project located in the United
States for the development, extraction, processing,
transportation, or use of coal, coal byproducts,
critical minerals, oil, natural gas, or nuclear energy
with a total projected capital expenditure of not less
than $30,000,000, as certified by the Secretary.
(2) Fund.--The term ``Fund'' means the De-Risking
Compensation Fund established in subsection (e)(1).
(3) Program.--The term ``program'' means the De-
Risking Compensation Program established in subsection
(b)(1).
(4) Qualifying federal action.--The term ``qualifying
Federal action'' means a regulation, administrative
decision, or executive action--
(A) issued or taken after a sponsor received
a Federal approval or permit for a covered
energy project; and
(B) that revokes such approval or permit or
cancels, delays, or renders unviable the
covered energy project regardless of whether
the regulation, administrative decision, or
executive action is responsive to a court
order.
(5) Secretary.--The term ``Secretary'' means the
Secretary of Energy.
(6) Sponsor.--The term ``sponsor'' means an entity
incorporated and headquartered in the United States
with an ownership or development interest in a covered
energy project.
(7) Sponsor capital contribution.--The term ``sponsor
capital contribution'' means the projected capital
expenditure of a sponsor for a covered energy project,
as certified by the Secretary at the time of enrollment
in the program, which shall include verifiable
development, construction, permitting, and financing
costs directly related to the covered energy project.
SEC. 41008. STRATEGIC PETROLEUM RESERVE.
(a) Appropriations.--In addition to amounts otherwise
available, there is appropriated to the Department of Energy
for fiscal year 2025, out of any money in the Treasury not
otherwise appropriated, to remain available until September 30,
2029--
(1) $218,000,000 for maintenance of, including
repairs to, storage facilities and related facilities
(as such terms are defined in section 152 of the Energy
Policy and Conservation Act (42 U.S.C. 6232)) of the
Strategic Petroleum Reserve; and
(2) $1,321,000,000 to acquire, by purchase, petroleum
products for storage in the Strategic Petroleum
Reserve.
(b) Repeal of Strategic Petroleum Reserve Drawdown and Sale
Mandate.--Section 20003 of Public Law 115-97 (42 U.S.C. 6241
note) is repealed.
SEC. 41009. RESCISSIONS OF PREVIOUSLY APPROPRIATED UNOBLIGATED FUNDS.
(a) Rescissions.--Except as provided in subsection (b), of
the unobligated balances appropriated and made available to the
Department of Energy--
(1) for the Office of the Inspector General,
$8,052,100 is rescinded;
(2) for the Office of Clean Energy Demonstrations,
$60,152,900 is rescinded;
(3) for the Office for Human Capital, $76,900 is
rescinded;
(4) for Federal Energy Management Programs,
$53,442,200 is rescinded;
(5) for State and Community Energy Programs,
$262,506,100 is rescinded;
(6) for the Office of Minority Economic Impact,
$2,783,100 is rescinded;
(7) for the Office of Energy Efficiency and Renewable
Energy, $401,850,700 is rescinded;
(8) for the Office of General Counsel, $239,400 is
rescinded;
(9) for the Office of Indian Energy Policy and
Programs, $44,701,900 is rescinded;
(10) for the Office of Management, $5,041,100 is
rescinded;
(11) for the Office of the Secretary, $1,019,400 is
rescinded;
(12) for the Office of Public Affairs, $2,594,000 is
rescinded; and
(13) for the Office of Policy, $692,400 is rescinded.
(b) Exclusions.--The unobligated amounts rescinded under
subsection (a) may not include amounts appropriated and made
available to the Department of Energy--
(1) under Public Law 117-169 (commonly referred to as
the Inflation Reduction Act of 2022);
(2) under the Infrastructure Investment and Jobs Act
(Public Law 117-58); or
(3) that were designated by the Congress as an
emergency requirement pursuant to the Balanced Budget
and Emergency Deficit Control Act of 1985 or a
concurrent resolution on the budget, section 4001(a)(1)
of S. Con. Res. 14 (117th Congress), or section 1(e) of
H. Res. 1151 (117th Congress) as engrossed in the House
of Representatives on June 8, 2022.
Committee Print
_______________________________________________________________________
(Providing for reconciliation pursuant to H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025)
_______________________________________________________________________
TITLE IV--ENERGY AND COMMERCE
Subtitle B--Environment
PART 1--REPEALS AND RESCISSIONS
SEC. 42101. REPEAL AND RESCISSION RELATING TO CLEAN HEAVY-DUTY
VEHICLES.
(a) Repeal.--Section 132 of the Clean Air Act (42 U.S.C.
7432) is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 132 of the Clean Air Act (42 U.S.C.
7432) (as in effect on the day before the date of enactment of
this Act) is rescinded.
SEC. 42102. REPEAL AND RESCISSION RELATING TO GRANTS TO REDUCE AIR
POLLUTION AT PORTS.
(a) Repeal.--Section 133 of the Clean Air Act (42 U.S.C.
7433) is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 133 of the Clean Air Act (42 U.S.C.
7433) (as in effect on the day before the date of enactment of
this Act) is rescinded.
SEC. 42103. REPEAL AND RESCISSION RELATING TO GREENHOUSE GAS REDUCTION
FUND.
(a) Repeal.--Section 134 of the Clean Air Act (42 U.S.C.
7434) is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 134 of the Clean Air Act (42 U.S.C.
7434) (as in effect on the day before the date of enactment of
this Act) is rescinded.
SEC. 42104. REPEAL AND RESCISSION RELATING TO DIESEL EMISSIONS
REDUCTIONS.
(a) Repeal.--Section 60104 of Public Law 117-169 is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 60104 of Public Law 117-169 (as in
effect on the day before the date of enactment of this Act) is
rescinded.
SEC. 42105. REPEAL AND RESCISSION RELATING TO FUNDING TO ADDRESS AIR
POLLUTION.
(a) Repeal.--Section 60105 of Public Law 117-169 is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 60105 of Public Law 117-169 (as in
effect on the day before the date of enactment of this Act) is
rescinded.
SEC. 42106. REPEAL AND RESCISSION RELATING TO FUNDING TO ADDRESS AIR
POLLUTION AT SCHOOLS.
(a) Repeal.--Section 60106 of Public Law 117-169 is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 60106 of Public Law 117-169 (as in
effect on the day before the date of enactment of this Act) is
rescinded.
SEC. 42107. REPEAL AND RESCISSION RELATING TO LOW EMISSIONS ELECTRICITY
PROGRAM.
(a) Repeal.--Section 135 of the Clean Air Act (42 U.S.C.
7435) is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 135 of the Clean Air Act (42 U.S.C.
7435) (as in effect on the day before the date of enactment of
this Act) is rescinded.
SEC. 42108. REPEAL AND RESCISSION RELATING TO FUNDING FOR SECTION
211(O) OF THE CLEAN AIR ACT.
(a) Repeal.--Section 60108 of Public Law 117-169 is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 60108 of Public Law 117-169 (as in
effect on the day before the date of enactment of this Act) is
rescinded.
SEC. 42109. REPEAL AND RESCISSION RELATING TO FUNDING FOR
IMPLEMENTATION OF THE AMERICAN INNOVATION AND
MANUFACTURING ACT.
(a) Repeal.--Section 60109 of Public Law 117-169 is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 60109 of Public Law 117-169 (as in
effect on the day before the date of enactment of this Act) is
rescinded.
SEC. 42110. REPEAL AND RESCISSION RELATING TO FUNDING FOR ENFORCEMENT
TECHNOLOGY AND PUBLIC INFORMATION.
(a) Repeal.--Section 60110 of Public Law 117-169 is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 60110 of Public Law 117-169 (as in
effect on the day before the date of enactment of this Act) is
rescinded.
SEC. 42111. REPEAL AND RESCISSION RELATING TO GREENHOUSE GAS CORPORATE
REPORTING.
(a) Repeal.--Section 60111 of Public Law 117-169 is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 60111 of Public Law 117-169 (as in
effect on the day before the date of enactment of this Act) is
rescinded.
SEC. 42112. REPEAL AND RESCISSION RELATING TO ENVIRONMENTAL PRODUCT
DECLARATION ASSISTANCE.
(a) Repeal.--Section 60112 of Public Law 117-169 (42 U.S.C.
4321 note) is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 60112 of Public Law 117-169 (42 U.S.C.
4321 note) (as in effect on the day before the date of
enactment of this Act) is rescinded.
SEC. 42113. REPEAL OF FUNDING FOR METHANE EMISSIONS AND WASTE REDUCTION
INCENTIVE PROGRAM FOR PETROLEUM AND NATURAL GAS
SYSTEMS.
(a) Repeal and Rescission.--Subsections (a) and (b) of
section 136 of the Clean Air Act (42 U.S.C. 7436) are repealed
and the unobligated balances of amounts made available under
those subsections (as in effect on the day before the date of
enactment of this Act) are rescinded.
(b) Conforming Amendments.--Section 136 of the Clean Air Act
(42 U.S.C. 7436) is amended--
(1) by redesignating subsections (c) through (i) as
subsections (a) through (g), respectively;
(2) by striking ``subsection (c)'' each place it
appears and inserting ``subsection (a)'';
(3) by striking ``subsection (d)'' each place it
appears and inserting ``subsection (b)'';
(4) by striking ``subsection (f)'' each place it
appears and inserting ``subsection (d)'';
(5) in subsection (e) (as so redesignated), by
striking ``calendar year 2024'' and inserting
``calendar year 2034''; and
(6) in subsection (f) (as so redesignated)--
(A) by striking ``subsections (e) and (f)''
and inserting ``subsections (c) and (d)''; and
(B) by striking ``including data collected
pursuant to subsection (a)(4),''.
SEC. 42114. REPEAL AND RESCISSION RELATING TO GREENHOUSE GAS AIR
POLLUTION PLANS AND IMPLEMENTATION GRANTS.
(a) Repeal.--Section 137 of the Clean Air Act (42 U.S.C.
7437) is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 137 of the Clean Air Act (42 U.S.C.
7437) (as in effect on the day before the date of enactment of
this Act) is rescinded.
SEC. 42115. REPEAL AND RESCISSION RELATING TO ENVIRONMENTAL PROTECTION
AGENCY EFFICIENT, ACCURATE, AND TIMELY REVIEWS.
(a) Repeal.--Section 60115 of Public Law 117-169 is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 60115 of Public Law 117-169 (as in
effect on the day before the date of enactment of this Act) is
rescinded.
SEC. 42116. REPEAL AND RESCISSION RELATING TO LOW-EMBODIED CARBON
LABELING FOR CONSTRUCTION MATERIALS.
(a) Repeal.--Section 60116 of Public Law 117-169 (42 U.S.C.
4321 note) is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 60116 of Public Law 117-169 (42 U.S.C.
4321 note) (as in effect on the day before the date of
enactment of this Act) is rescinded.
SEC. 42117. REPEAL AND RESCISSION RELATING TO ENVIRONMENTAL AND CLIMATE
JUSTICE BLOCK GRANTS.
(a) Repeal.--Section 138 of the Clean Air Act (42 U.S.C.
7438) is repealed.
(b) Rescission.--The unobligated balance of any amounts made
available under section 138 of the Clean Air Act (42 U.S.C.
7438) (as in effect on the day before the date of enactment of
this Act) is rescinded.
PART 2--REPEAL OF EPA RULE RELATING TO MULTI-POLLUTANT EMISSIONS
STANDARDS
SEC. 42201. REPEAL OF EPA RULE RELATING TO MULTI-POLLUTANT EMISSIONS
STANDARDS FOR LIGHT- AND MEDIUM-DUTY VEHICLES.
The final rule issued by the Environmental Protection Agency
relating to ``Multi-Pollutant Emissions Standards for Model
Years 2027 and Later Light-Duty and Medium-Duty Vehicles'' (89
Fed. Reg. 27842 (April 18, 2024)) shall have no force or
effect.
PART 3--REPEAL OF NHTSA RULE RELATING TO CAFE STANDARDS
SEC. 42301. REPEAL OF NHTSA RULE RELATING TO CAFE STANDARDS FOR
PASSENGER CARS AND LIGHT TRUCKS.
The final rule issued by the National Highway Traffic Safety
Administration relating to ``Corporate Average Fuel Economy
Standards for Passenger Cars and Light Trucks for Model Years
2027 and Beyond and Fuel Efficiency Standards for Heavy-Duty
Pickup Trucks and Vans for Model Years 2030 and Beyond'' (89
Fed. Reg. 52540 (June 24, 2024)) shall have no force or effect.
Committee Print
_______________________________________________________________________
(Providing for reconciliation pursuant to H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025)
_______________________________________________________________________
TITLE IV--ENERGY AND COMMERCE
Subtitle C--Communications
PART 1--SPECTRUM AUCTIONS
SEC. 43101. IDENTIFICATION AND AUCTION OF SPECTRUM.
(a) Identification.--
(1) In general.--Not later than 2 years after the
date of the enactment of this Act, the Assistant
Secretary and the Commission shall identify, from
spectrum in the covered band that is allocated for
Federal use, non-Federal use, or shared Federal and
non-Federal use, a total of not less than 600 megahertz
of spectrum for reallocation for non-Federal use on an
exclusive, licensed basis for mobile broadband
services, fixed broadband services, mobile and fixed
broadband services, or a combination thereof.
(2) Withdrawal or modification of federal government
assignments.--The President, acting through the
Assistant Secretary, shall--
(A) withdraw or modify the assignments to
Federal Government stations of spectrum
identified under paragraph (1) as necessary for
the Commission to comply with subsection (b);
and
(B) not later than 30 days after completing
any necessary withdrawal or modification under
subparagraph (A), notify the Commission that
the withdrawal or modification is complete.
(3) Rule of construction.--Nothing in this subsection
may be construed to change the respective authorities
of the Assistant Secretary and the Commission with
respect to spectrum allocated for Federal use, non-
Federal use, or shared Federal and non-Federal use.
(b) Auction.--
(1) In general.--The Commission shall, through 1 or
more systems of competitive bidding under section
309(j) of the Communications Act of 1934 (47 U.S.C.
309(j)), grant licenses for the use of the spectrum
identified under subsection (a) on an exclusive,
licensed basis for mobile broadband services, fixed
broadband services, mobile and fixed broadband
services, or a combination thereof.
(2) Schedule.--Notwithstanding paragraph (15)(A) of
section 309(j) of the Communications Act of 1934 (47
U.S.C. 309(j)), the Commission shall auction spectrum
under paragraph (1) of this subsection according to the
following schedule:
(A) Not later than 3 years after the date of
the enactment of this Act, the Commission shall
complete 1 or more systems of competitive
bidding for not less than 200 megahertz of such
spectrum.
(B) Not later than 6 years after the date of
the enactment of this Act, the Commission shall
complete 1 or more systems of competitive
bidding for any remaining spectrum required to
be auctioned under paragraph (1) after
compliance with subparagraph (A) of this
paragraph.
(c) Auction Proceeds to Cover 110 Percent of Federal
Relocation or Sharing Costs.--Nothing in this section may be
construed to relieve the Commission from the requirements of
section 309(j)(16)(B) of the Communications Act of 1934 (47
U.S.C. 309(j)(16)(B)).
(d) Auction Authority.--Section 309(j)(11) of the
Communications Act of 1934 (47 U.S.C. 309(j)(11)) is amended by
striking ``grant a license or permit under this subsection
shall expire March 9, 2023'' and all that follows and inserting
``complete a system of competitive bidding under this
subsection shall expire September 30, 2034.''.
(e) Definitions.--In this section:
(1) Assistant secretary.--The term ``Assistant
Secretary'' means the Assistant Secretary of Commerce
for Communications and Information.
(2) Commission.--The term ``Commission'' means the
Federal Communications Commission.
(3) Covered band.--
(A) In general.--The term ``covered band''
means the band of frequencies between 1.3
gigahertz and 10 gigahertz, inclusive.
(B) Exclusion.--The term ``covered band''
does not include the following:
(i) The band of frequencies between
3.1 gigahertz and 3.45 gigahertz,
inclusive.
(ii) The band of frequencies between
5.925 gigahertz and 7.125 gigahertz,
inclusive.
PART 2--ARTIFICIAL INTELLIGENCE AND INFORMATION TECHNOLOGY
MODERNIZATION
SEC. 43201. ARTIFICIAL INTELLIGENCE AND INFORMATION TECHNOLOGY
MODERNIZATION INITIATIVE.
(a) Appropriation of Funds.--There is hereby appropriated to
the Department of Commerce for fiscal year 2025, out of any
funds in the Treasury not otherwise appropriated, $500,000,000,
to remain available until September 30, 2035, to modernize and
secure Federal information technology systems through the
deployment of commercial artificial intelligence, the
deployment of automation technologies, and the replacement of
antiquated business systems in accordance with subsection (b).
(b) Authorized Uses.--The Secretary of Commerce shall use the
funds appropriated under subsection (a) for the following:
(1) To replace or modernize, within the Department of
Commerce, legacy business systems with state-of-the-art
commercial artificial intelligence systems and
automated decision systems.
(2) To facilitate, within the Department of Commerce,
the adoption of artificial intelligence models that
increase operational efficiency and service delivery.
(3) To improve, within the Department of Commerce,
the cybersecurity posture of Federal information
technology systems through modernized architecture,
automated threat detection, and integrated artificial
intelligence solutions.
(c) Moratorium.--
(1) In general.--Except as provided in paragraph (2),
no State or political subdivision thereof may enforce
any law or regulation regulating artificial
intelligence models, artificial intelligence systems,
or automated decision systems during the 10-year period
beginning on the date of the enactment of this Act.
(2) Rule of construction.--Paragraph (1) may not be
construed to prohibit the enforcement of any law or
regulation that--
(A) the primary purpose and effect of which
is to remove legal impediments to, or
facilitate the deployment or operation of, an
artificial intelligence model, artificial
intelligence system, or automated decision
system;
(B) the primary purpose and effect of which
is to streamline licensing, permitting,
routing, zoning, procurement, or reporting
procedures in a manner that facilitates the
adoption of artificial intelligence models,
artificial intelligence systems, or automated
decision systems;
(C) does not impose any substantive design,
performance, data-handling, documentation,
civil liability, taxation, fee, or other
requirement on artificial intelligence models,
artificial intelligence systems, or automated
decision systems unless such requirement--
(i) is imposed under Federal law; or
(ii) in the case of a requirement
imposed under a generally applicable
law, is imposed in the same manner on
models and systems, other than
artificial intelligence models,
artificial intelligence systems, and
automated decision systems, that
provide comparable functions to
artificial intelligence models,
artificial intelligence systems, or
automated decision systems; and
(D) does not impose a fee or bond unless--
(i) such fee or bond is reasonable
and cost-based; and
(ii) under such fee or bond,
artificial intelligence models,
artificial intelligence systems, and
automated decision systems are treated
in the same manner as other models and
systems that perform comparable
functions.
(d) Definitions.--In this section:
(1) Artificial intelligence.--The term ``artificial
intelligence'' has the meaning given such term in
section 5002 of the National Artificial Intelligence
Initiative Act of 2020 (15 U.S.C. 9401).
(2) Artificial intelligence model.--The term
``artificial intelligence model'' means a software
component of an information system that implements
artificial intelligence technology and uses
computational, statistical, or machine-learning
techniques to produce outputs from a defined set of
inputs.
(3) Artificial intelligence system.--The term
``artificial intelligence system'' means any data
system, software, hardware, application, tool, or
utility that operates, in whole or in part, using
artificial intelligence.
(4) Automated decision system.--The term ``automated
decision system'' means any computational process
derived from machine learning, statistical modeling,
data analytics, or artificial intelligence that issues
a simplified output, including a score, classification,
or recommendation, to materially influence or replace
human decision making.
TITLE IV--ENERGY AND COMMERCE
Subtitle D--Health
PART 1--MEDICAID
Subpart A--Reducing Fraud and Improving Enrollment Processes
SEC. 44101. MORATORIUM ON IMPLEMENTATION OF RULE RELATING TO
ELIGIBILITY AND ENROLLMENT IN MEDICARE SAVINGS
PROGRAMS.
The Secretary of Health and Human Services shall not, during
the period beginning on the date of the enactment of this
section and ending January 1, 2035, implement, administer, or
enforce the provisions of the final rule published by the
Centers for Medicare & Medicaid Services on September 21, 2023,
and titled ``Streamlining Medicaid; Medicare Savings Program
Eligibility Determination and Enrollment'' (88 Fed. Reg.
65230).
SEC. 44102. MORATORIUM ON IMPLEMENTATION OF RULE RELATING TO
ELIGIBILITY AND ENROLLMENT FOR MEDICAID, CHIP, AND
THE BASIC HEALTH PROGRAM.
The Secretary of Health and Human Services shall not, during
the period beginning on the date of the enactment of this
section and ending January 1, 2035, implement, administer, or
enforce the provisions of the final rule published by the
Centers for Medicare & Medicaid Services on April 2, 2024, and
titled ``Medicaid Program; Streamlining the Medicaid,
Children's Health Insurance Program, and Basic Health Program
Application, Eligibility Determination, Enrollment, and Renewal
Processes'' (89 Fed. Reg. 22780).
SEC. 44103. ENSURING APPROPRIATE ADDRESS VERIFICATION UNDER THE
MEDICAID AND CHIP PROGRAMS.
(a) Medicaid.--
(1) In general.--Section 1902 of the Social Security
Act (42 U.S.C. 1396a) is amended--
(A) in subsection (a)--
(i) in paragraph (86), by striking
``and'' at the end;
(ii) in paragraph (87), by striking
the period and inserting ``; and''; and
(iii) by inserting after paragraph
(87) the following new paragraph:
``(88) provide--
``(A) beginning not later than January 1,
2027, in the case of 1 of the 50 States and the
District of Columbia, for a process to
regularly obtain address information for
individuals enrolled under such plan (or a
waiver of such plan) in accordance with
subsection (vv); and
``(B) beginning not later than October 1,
2029--
``(i) for the State to submit to the
system established by the Secretary
under subsection (uu), with respect to
an individual enrolled or seeking to
enroll under such plan, not less
frequently than once each month and
during each determination or
redetermination of the eligibility of
such individual for medical assistance
under such plan (or waiver of such
plan)--
``(I) the social security
number of such individual, if
such individual has a social
security number and is required
to provide such number to
enroll under such plan (or
waiver); and
``(II) such other information
with respect to such individual
as determined necessary by the
Secretary for purposes of
preventing individuals from
simultaneously being enrolled
under State plans (or waivers
of such plans) of multiple
States;
``(ii) for the use of such system to
prevent such simultaneous enrollment;
and
``(iii) in the case that such system
indicates that an individual enrolled
or seeking to enroll under such plan
(or wavier of such plan) is enrolled
under a State plan (or waiver of such a
plan) of another State, for the taking
of appropriate action (as determined by
the Secretary) to identify whether such
an individual resides in the State and
disenroll an individual from the State
plan of such State if such individual
does not reside in such State (unless
such individual meets such an exception
as the Secretary may specify).''; and
(B) by adding at the end the following new
subsections:
``(uu) Prevention of Enrollment Under Multiple State Plans.--
``(1) In general.--Not later than October 1, 2029,
the Secretary shall establish a system to be utilized
by the Secretary and States to prevent an individual
from being simultaneously enrolled under the State
plans (or waivers of such plans) of multiple States.
Such system shall--
``(A) provide for the receipt of information
submitted by a State under subsection
(a)(88)(B)(i); and
``(B) not less than once each month, notify
or transmit information to a State (or allow
the Secretary to notify or transmit information
to a State) regarding whether an individual
enrolled or seeking to enroll under the State
plan of such State (or waiver of such plan) is
enrolled under the State plan (or waiver of
such plan) of another State.
``(2) Standards.--The Secretary shall establish such
standards as determined necessary by the Secretary to
limit and protect information submitted under such
system and ensure the privacy of such information,
consistent with subsection (a)(7).
``(3) Implementation funding.--There are appropriated
to the Secretary, out of amounts in the Treasury not
otherwise appropriated, in addition to amounts
otherwise available--
``(A) for fiscal year 2026, $10,000,000 for
purposes of establishing the system required
under this subsection, to remain available
until expended; and
``(B) for fiscal year 2029, $20,000,000 for
purposes of maintaining such system, to remain
available until expended.
``(vv) Process to Obtain Enrollee Address Information.--
``(1) In general.--For purposes of subsection
(a)(88)(A), a process to regularly obtain address
information for individuals enrolled under a State plan
(or a waiver of such plan) shall obtain address
information from reliable data sources described in
paragraph (2) and take such actions as the Secretary
shall specify with respect to any changes to such
address based on such information.
``(2) Reliable data sources described.--For purposes
of paragraph (1), the reliable data sources described
in this paragraph are the following:
``(A) Mail returned to the State by the
United States Postal Service with a forwarding
address.
``(B) The National Change of Address Database
maintained by the United States Postal Service.
``(C) A managed care entity (as defined in
section 1932(a)(1)(B)) or prepaid inpatient
health plan or prepaid ambulatory health plan
(as such terms are defined in section
1903(m)(9)(D)) that has a contract under the
State plan if the address information is
provided to such entity or plan directly from,
or verified by such entity or plan directly
with, such individual.
``(D) Other data sources as identified by the
State and approved by the Secretary.''.
(2) Conforming amendments.--
(A) PARIS.--Section 1903(r)(3) of the Social
Security Act (42 U.S.C. 1396b(r)(3)) is
amended--
(i) by striking ``In order'' and
inserting ``(A) In order'';
(ii) by striking ``through the
Public'' and inserting ``through--
``(i) the Public'';
(iii) by striking the period at the
end and inserting ``; and
``(ii) beginning October 1, 2029, the system
established by the Secretary under section
1902(uu).''; and
(iv) by adding at the end the
following new subparagraph:
``(B) Beginning October 1, 2029, the Secretary may
determine that a State is not required to have in
operation an eligibility determination system which
provides for data matching through the system described
in subparagraph (A)(i) to meet the requirements of this
paragraph.''.
(B) Managed care.--Section 1932 of the Social
Security Act (42 U.S.C. 1396u-2) is amended by
adding at the end the following new subsection:
``(j) Transmission of Address Information.--Beginning January
1, 2027, each contract under a State plan with a managed care
entity (as defined in section 1932(a)(1)(B)) or with a prepaid
inpatient health plan or prepaid ambulatory health plan (as
such terms are defined in section 1903(m)(9)(D)), shall provide
that such entity or plan shall promptly transmit to the State
any address information for an individual enrolled with such
entity or plan that is provided to such entity or plan directly
from, or verified by such entity or plan directly with, such
individual.''.
(b) CHIP.--
(1) In general.--Section 2107(e)(1) of the Social
Security Act (42 U.S.C. 1397gg(e)(1)) is amended--
(A) by redesignating subparagraphs (H)
through (U) as subparagraphs (I) through (V),
respectively; and
(B) by inserting after subparagraph (G) the
following new subparagraph:
``(H) Section 1902(a)(88) (relating to
address information for enrollees and
prevention of simultaneous enrollments).''.
(2) Managed care.--Section 2103(f)(3) of the Social
Security Act (42 U.S.C. 1397cc(f)(3)) is amended by
striking ``and (e)'' and inserting ``(e), and (j)''.
SEC. 44104. MODIFYING CERTAIN STATE REQUIREMENTS FOR ENSURING DECEASED
INDIVIDUALS DO NOT REMAIN ENROLLED.
Section 1902 of the Social Security Act (42 U.S.C. 1396a), as
amended by section 44103, is further amended--
(1) in subsection (a)--
(A) in paragraph (87), by striking ``; and''
and inserting a semicolon;
(B) in paragraph (88), by striking the period
at the end and inserting ``; and''; and
(C) by inserting after paragraph (88) the
following new paragraph:
``(89) provide that the State shall comply with the
eligibility verification requirements under subsection
(ww), except that this paragraph shall apply only in
the case of the 50 States and the District of
Columbia.''; and
(2) by adding at the end the following new
subsection:
``(ww) Verification of Certain Eligibility Criteria.--
``(1) In general.--For purposes of subsection
(a)(89), the eligibility verification requirements,
beginning January 1, 2028, are as follows:
``(A) Quarterly screening to verify enrollee
status.--The State shall, not less frequently
than quarterly, review the Death Master File
(as such term is defined in section 203(d) of
the Bipartisan Budget Act of 2013) to determine
whether any individuals enrolled for medical
assistance under the State plan (or waiver of
such plan) are deceased.
``(B) Disenrollment under state plan.--If the
State determines, based on information obtained
from the Death Master File, that an individual
enrolled for medical assistance under the State
plan (or waiver of such plan) is deceased, the
State shall--
``(i) treat such information as
factual information confirming the
death of a beneficiary for purposes of
section 431.213(a) of title 42, Code of
Federal Regulations (or any successor
regulation);
``(ii) disenroll such individual from
the State plan (or waiver of such
plan); and
``(iii) discontinue any payments for
medical assistance under this title
made on behalf of such individual
(other than payments for any items or
services furnished to such individual
prior to the death of such individual).
``(C) Reinstatement of coverage in the event
of error.--If a State determines that an
individual was misidentified as deceased based
on information obtained from the Death Master
File and was erroneously disenrolled from
medical assistance under the State plan (or
waiver of such plan) based on such
misidentification, the State shall immediately
re-enroll such individual under the State plan
(or waiver of such plan), retroactive to the
date of such disenrollment.
``(2) Rule of construction.--Nothing under this
subsection shall be construed to preclude the ability
of a State to use other electronic data sources to
timely identify potentially deceased beneficiaries, so
long as the State is also in compliance with the
requirements of this subsection (and all other
requirements under this title relating to Medicaid
eligibility determination and redetermination).''.
SEC. 44105. MEDICAID PROVIDER SCREENING REQUIREMENTS.
Section 1902(kk)(1) of the Social Security Act (42 U.S.C.
1396a(kk)(1)) is amended--
(1) by striking ``The State'' and inserting:
``(A) In general.--The State''; and
(2) by adding at the end the following new
subparagraph:
``(B) Additional provider screening.--
Beginning January 1, 2028, as part of the
enrollment (or reenrollment or revalidation of
enrollment) of a provider or supplier under
this title, and not less frequently than
monthly during the period that such provider or
supplier is so enrolled, the State conducts a
check of any database or similar system
developed pursuant to section 6401(b)(2) of the
Patient Protection and Affordable Care Act to
determine whether the Secretary has terminated
the participation of such provider or supplier
under title XVIII, or whether any other State
has terminated the participation of such
provider or supplier under such other State's
State plan under this title (or waiver of the
plan), or such other State's State child health
plan under title XXI (or waiver of the
plan).''.
SEC. 44106. ADDITIONAL MEDICAID PROVIDER SCREENING REQUIREMENTS.
Section 1902(kk)(1) of the Social Security Act (42 U.S.C.
1396a(kk)(1)), as amended by section 44105, is further amended
by adding at the end the following new subparagraph:
``(C) Provider screening against death master
file.--Beginning January 1, 2028, as part of
the enrollment (or reenrollment or revalidation
of enrollment) of a provider or supplier under
this title, and not less frequently than
quarterly during the period that such provider
or supplier is so enrolled, the State conducts
a check of the Death Master File (as such term
is defined in section 203(d) of the Bipartisan
Budget Act of 2013) to determine whether such
provider or supplier is deceased.''.
SEC. 44107. REMOVING GOOD FAITH WAIVER FOR PAYMENT REDUCTION RELATED TO
CERTAIN ERRONEOUS EXCESS PAYMENTS UNDER MEDICAID.
(a) In General.--Section 1903(u)(1) of the Social Security
Act (42 U.S.C. 1396b(u)(1)) is amended--
(1) in subparagraph (B)--
(A) by striking ``The Secretary'' and
inserting ``(i) Subject to clause (ii), the
Secretary''; and
(B) by adding at the end the following new
clause:
``(ii) The amount waived under clause (i) for a
fiscal year may not exceed an amount equal to the
difference between--
``(I) the amount of the reduction required
under subparagraph (A) for such fiscal year
(without application of this subparagraph); and
``(II) the sum of the erroneous excess
payments for medical assistance described in
subclauses (I) and (III) of subparagraph (D)(i)
made for such fiscal year.'';
(2) in subparagraph (C), by striking ``he'' in each
place it appears and inserting ``the Secretary'' in
each such place; and
(3) in subparagraph (D)(i)--
(A) in subclause (I), by striking ``and'' at
the end;
(B) in subclause (II), by striking the period
at the end and inserting ``, and''; and
(C) by adding at the end the following new
subclause:
``(III) payments (other than payments described in
subclause (I)) for items and services furnished to an
eligible individual who is not eligible for medical
assistance under the State plan (or a waiver of such
plan) with respect to such items and services.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply beginning with respect to fiscal year 2030.
SEC. 44108. INCREASING FREQUENCY OF ELIGIBILITY REDETERMINATIONS FOR
CERTAIN INDIVIDUALS.
Section 1902(e)(14) of the Social Security Act (42 U.S.C.
1396a(e)(14)) is amended by adding at the end the following new
subparagraph:
``(L) Frequency of eligibility
redeterminations for certain individuals.--
Beginning on October 1, 2027, in the case of an
individual enrolled under subsection
(a)(10)(A)(i)(VIII), a State shall redetermine
the eligibility of such individual for medical
assistance under the State plan of such State
(or a waiver of such plan) once every 6
months.''.
SEC. 44109. REVISING HOME EQUITY LIMIT FOR DETERMINING ELIGIBILITY FOR
LONG-TERM CARE SERVICES UNDER THE MEDICAID PROGRAM.
(a) Revising Home Equity Limit.--Section 1917(f)(1) of the
Social Security Act (42 U.S.C. 1396p(f)(1)) is amended--
(1) in subparagraph (B)--
(A) by striking ``A State'' and inserting
``(i) A State'';
(B) in clause (i), as inserted by
subparagraph (A)--
(i) by striking ```$500,000''' and
inserting ``the amount specified in
subparagraph (A)''; and
(ii) by inserting ``, in the case of
an individual's home that is located on
a lot that is zoned for agricultural
use,'' after ``apply subparagraph
(A)''; and
(C) by adding at the end the following new
clause:
``(ii) A State may elect, without regard to the
requirements of section 1902(a)(1) (relating to
statewideness) and section 1902(a)(10)(B) (relating to
comparability), to apply subparagraph (A), in the case
of an individual's home that is not described in clause
(i), by substituting for the amount specified in such
subparagraph, an amount that exceeds such amount, but
does not exceed $1,000,000.''; and
(2) in subparagraph (C)--
(A) by inserting ``(other than the amount
specified in subparagraph (B)(ii) (relating to
certain non-agricultural homes))'' after
``specified in this paragraph''; and
(B) by adding at the end the following new
sentence: ``In the case that application of the
preceding sentence would result in a dollar
amount (other than the amount specified in
subparagraph (B)(i) (relating to certain
agricultural homes)) exceeding $1,000,000, such
amount shall be deemed to be equal to
$1,000,000.''.
(b) Clarification.--Section 1902 of the Social Security Act
(42 U.S.C. 1396a) is amended--
(1) in subsection (r)(2), by adding at the end the
following new subparagraph:
``(C) This paragraph shall not be construed as permitting a
State to determine the eligibility of an individual for medical
assistance with respect to nursing facility services or other
long-term care services without application of the limit under
section 1917(f)(1).''; and
(2) in subsection (e)(14)(D)(iv)--
(A) by striking ``Subparagraphs'' and
inserting
``(I) In general.--
Subparagraphs''; and
(B) by adding at the end the following new
subclause:
``(II) Application of home
equity interest limit.--Section
1917(f) shall apply for
purposes of determining the
eligibility of an individual
for medical assistance with
respect to nursing facility
services or other long-term
care services.''.
(c) Effective Date.--The amendments made by subsection (a)
shall apply beginning on January 1, 2028.
SEC. 44110. PROHIBITING FEDERAL FINANCIAL PARTICIPATION UNDER MEDICAID
AND CHIP FOR INDIVIDUALS WITHOUT VERIFIED
CITIZENSHIP, NATIONALITY, OR SATISFACTORY
IMMIGRATION STATUS.
(a) In General.--
(1) Medicaid.--Section 1903(i)(22) of the Social
Security Act (42 U.S.C. 1396b(i)(22)) is amended--
(A) by adding ``and'' at the end;
(B) by striking ``to amounts'' and inserting
``to--
``(A) amounts''; and
(C) by adding at the end the following new
subparagraph:
``(B) in the case that the State elects under
section 1902(a)(46)(C) to provide for making
medical assistance available to an individual
during--
``(i) the period in which the
individual is provided the reasonable
opportunity to present satisfactory
documentary evidence of citizenship or
nationality under section
1902(ee)(2)(C) or subsection (x)(4);
``(ii) the 90-day period described in
section 1902(ee)(1)(B)(ii)(II); or
``(iii) the period in which the
individual is provided the reasonable
opportunity to submit evidence
indicating a satisfactory immigration
status under section 1137(d)(4),
amounts expended for such medical assistance,
unless the citizenship or nationality of such
individual or the satisfactory immigration
status of such individual (as applicable) is
verified by the end of such period;''.
(2) CHIP.--Section 2107(e)(1)(N) of the Social
Security Act (42 U.S.C. 1397gg(e)(1)(N)) is amended by
striking ``and (17)'' and inserting ``(17), and (22)''.
(b) Eliminating State Requirement to Provide Medical
Assistance During Reasonable Opportunity Period.--
(1) Documentary evidence of citizenship or
nationality.--Section 1903(x)(4) of the Social Security
Act (42 U.S.C. 1396b(x)) is amended--
(A) by striking ``under clauses (i) and (ii)
of section 1137(d)(4)(A)'' and inserting
``under section 1137(d)(4)''; and
(B) by inserting ``, except that the State
shall not be required to make medical
assistance available to such individual during
the period in which such individual is provided
such reasonable opportunity if the State has
not elected the option under section
1902(a)(46)(C)'' before the period at the end.
(2) Social security data match.--Section 1902(ee) of
the Social Security Act (42 U.S.C. 1396a(ee)) is
amended--
(A) in paragraph (1)(B)(ii)--
(i) in subclause (II), by striking
``(and continues to provide the
individual with medical assistance
during such 90-day period)'' and
inserting ``and, if the State has
elected the option under subsection
(a)(46)(C), continues to provide the
individual with medical assistance
during such 90-day period''; and
(ii) in subclause (III), by inserting
``, or denies eligibility for medical
assistance under this title for such
individual, as applicable'' after
``under this title''; and
(B) in paragraph (2)(C)--
(i) by striking ``under clauses (i)
and (ii) of section 1137(d)(4)(A)'' and
inserting ``under section 1137(d)(4)'';
and
(ii) by inserting ``, except that the
State shall not be required to make
medical assistance available to such
individual during the period in which
such individual is provided such
reasonable opportunity if the State has
not elected the option under section
1902(a)(46)(C)'' before the period at
the end.
(3) Individuals with satisfactory immigration
status.--Section 1137(d)(4) of the Social Security Act
(42 U.S.C. 1320b-7(d)(4)) is amended--
(A) in subparagraph (A)(ii), by inserting
``(except that such prohibition on delay,
denial, reduction, or termination of
eligibility for benefits under the Medicaid
program under title XIX shall apply only if the
State has elected the option under section
1902(a)(46)(C))'' after ``has been provided'';
and
(B) in subparagraph (B)(ii), by inserting
``(except that such prohibition on delay,
denial, reduction, or termination of
eligibility for benefits under the Medicaid
program under title XIX shall apply only if the
State has elected the option under section
1902(a)(46)(C))'' after ``status''.
(c) Option to Continue Providing Medical Assistance During
Reasonable Opportunity Period.--
(1) Medicaid.--Section 1902(a)(46) of the Social
Security Act (42 U.S.C. 1396a(a)(46)) is amended--
(A) in subparagraph (A), by striking ``and''
at the end;
(B) in subparagraph (B)(ii), by adding
``and'' at the end; and
(C) by inserting after subparagraph (B)(ii)
the following new subparagraph:
``(C) provide, at the option of the State, for making
medical assistance available--
``(i) to an individual described in
subparagraph (B) during the period in which
such individual is provided the reasonable
opportunity to present satisfactory documentary
evidence of citizenship or nationality under
subsection (ee)(2)(C) or section 1903(x)(4), or
during the 90-day period described in
subsection (ee)(1)(B)(ii)(II); or
``(ii) to an individual who is not a citizen
or national of the United States during the
period in which such individual is provided the
reasonable opportunity to submit evidence
indicating a satisfactory immigration status
under section 1137(d)(4);''.
(2) CHIP.--Section 2105(c)(9) of the Social Security
Act (42 U.S.C. 1397ee(c)(9)) is amended by adding at
the end the following new subparagraph:
``(C) Option to continue providing child
health assistance during reasonable opportunity
period.--Section 1902(a)(46)(C) shall apply to
States under this title in the same manner as
it applies to a State under title XIX.''.
(d) Effective Date.--The amendments made by this section
shall apply beginning October 1, 2026.
SEC. 44111. REDUCING EXPANSION FMAP FOR CERTAIN STATES PROVIDING
PAYMENTS FOR HEALTH CARE FURNISHED TO CERTAIN
INDIVIDUALS.
Section 1905 of the Social Security Act (42 U.S.C. 1395d) is
amended--
(1) in subsection (y)--
(A) in paragraph (1)(E), by inserting ``(or,
for calendar quarters beginning on or after
October 1, 2027, in the case such State is a
specified State with respect to such calendar
quarter, 80 percent)'' after ``thereafter'';
and
(B) in paragraph (2), by adding at the end
the following new subparagraph:
``(C) Specified state.--The term `specified
State' means, with respect to a quarter, a
State that--
``(i) provides any form of financial
assistance during such quarter, in
whole or in part, whether or not made
under a State plan (or waiver of such
plan) under this title or under another
program established by the State, and
regardless of the source of funding for
such assistance, to or on behalf of an
alien who is not a qualified alien or
otherwise lawfully residing in the
United States for the purchasing of
health insurance coverage (as defined
in section 2791(b)(1) of the Public
Health Service Act) for an alien who is
not a qualified alien or otherwise
lawfully residing in the United States;
or
``(ii) provides any form of
comprehensive health benefits coverage
during such quarter, whether or not
under a State plan (or wavier of such
plan) under this title or under another
program established by the State, and
regardless of the source of funding for
such coverage, to an alien who is not a
qualified alien or otherwise lawfully
residing in the United States.
``(D) Immigration terms.--
``(i) Alien.--The term `alien' has
the meaning given such term in section
101(a) of the Immigration and
Nationality Act.
``(ii) Qualified alien.--The term
`qualified alien' has the meaning given
such term in section 431 of the
Personal Responsibility and Work
Opportunity Reconciliation Act of 1996,
except that--
``(I) the reference to `at
the time the alien applies for,
receives, or attempts to
receive a Federal public
benefit' in subsection (b) of
such section shall be treated
as a reference to `at the time
the alien is provided
comprehensive health benefits
coverage described in clause
(ii) of section 1905(y)(C) of
the Social Security Act or is
provided with financial
assistance described in clause
(i) of such section, as
applicable'; and
``(II) the references to `(in
the opinion of the agency
providing such benefits)' in
subsection (c) of such section
shall be treated as references
to `(in the opinion of the
State in which such
comprehensive health benefits
coverage or such financial
assistance is provided, as
applicable)'.''; and
(2) in subsection (z)(2)--
(A) in subparagraph (A), by striking ``for
such year'' and inserting ``for such quarter'';
and
(B) in subparagraph (B)(i)--
(i) in the matter preceding subclause
(I), by striking ``for a year'' and
inserting ``for a calendar quarter in a
year''; and
(ii) in subclause (II), by striking
``for the year'' and inserting ``for
the quarter for the State''.
Subpart B--Preventing Wasteful Spending
SEC. 44121. MORATORIUM ON IMPLEMENTATION OF RULE RELATING TO STAFFING
STANDARDS FOR LONG-TERM CARE FACILITIES UNDER THE
MEDICARE AND MEDICAID PROGRAMS.
The Secretary of Health and Human Services shall not, during
the period beginning on the date of the enactment of this
section and ending January 1, 2035, implement, administer, or
enforce the provisions of the final rule published by the
Centers for Medicare & Medicaid Services on May 10, 2024, and
titled ``Medicare and Medicaid Programs; Minimum Staffing
Standards for Long-Term Care Facilities and Medicaid
Institutional Payment Transparency Reporting'' (89 Fed. Reg.
40876).
SEC. 44122. MODIFYING RETROACTIVE COVERAGE UNDER THE MEDICAID AND CHIP
PROGRAMS.
(a) In General.--Section 1902(a)(34) of the Social Security
Act (42 U.S.C. 1396a(a)(34)) is amended--
(1) by striking ``him'' and inserting ``the
individual'';
(2) by striking ``the third month'' and inserting
``the month'';
(3) by striking ``he'' and inserting ``the
individual''; and
(4) by striking ``his'' and inserting ``the
individual's''.
(b) Definition of Medical Assistance.--Section 1905(a) of the
Social Security Act (42 U.S.C. 1396d(a)) is amended by striking
``in or after the third month before the month in which the
recipient makes application for assistance'' and inserting ``in
or after the month before the month in which the recipient
makes application for assistance''.
(c) CHIP.--Section 2102(b)(1)(B) of the Social Security Act
(42 U.S.C. 1397bb(b)(1)(B)) is amended--
(1) in clause (iv), by striking ``and'' at the end;
(2) in clause (v), by striking the period and
inserting ``; and''; and
(3) by adding at the end the following new clause:
``(vi) shall, in the case that the
State elects to provide child health or
pregnancy-related assistance to an
individual for any period prior to the
month in which the individual made
application for such assistance (or
application was made on behalf of the
individual), provide that such
assistance is not made available to
such individual for items and services
included under the State child health
plan (or waiver of such plan) that are
furnished before the month preceding
the month in which such individual made
application (or application was made on
behalf of such individual) for such
assistance.''.
(d) Effective Date.--The amendments made by this section
shall apply to medical assistance and child health and
pregnancy-related assistance with respect to individuals whose
eligibility for such medical assistance or child health
assistance is based on an application made on or after October
1, 2026.
SEC. 44123. ENSURING ACCURATE PAYMENTS TO PHARMACIES UNDER MEDICAID.
(a) In General.--Section 1927(f) of the Social Security Act
(42 U.S.C. 1396r-8(f)) is amended--
(1) in paragraph (1)(A)--
(A) by redesignating clause (ii) as clause
(iii); and
(B) by striking ``and'' after the semicolon
at the end of clause (i) and all that precedes
it through ``(1)'' and inserting the following:
``(1) Determining pharmacy actual acquisition
costs.--The Secretary shall conduct a survey of retail
community pharmacy drug prices and applicable non-
retail pharmacy drug prices to determine national
average drug acquisition cost benchmarks (as such term
is defined by the Secretary) as follows:
``(A) Use of vendor.--The Secretary may
contract services for--
``(i) with respect to retail
community pharmacies, the determination
of retail survey prices of the national
average drug acquisition cost for
covered outpatient drugs that represent
a nationwide average of consumer
purchase prices for such drugs, net of
all discounts, rebates, and other price
concessions (to the extent any
information with respect to such
discounts, rebates, and other price
concessions is available) based on a
monthly survey of such pharmacies;
``(ii) with respect to applicable
non-retail pharmacies--
``(I) the determination of
survey prices, separate from
the survey prices described in
clause (i), of the non-retail
national average drug
acquisition cost for covered
outpatient drugs that represent
a nationwide average of
consumer purchase prices for
such drugs, net of all
discounts, rebates, and other
price concessions (to the
extent any information with
respect to such discounts,
rebates, and other price
concessions is available) based
on a monthly survey of such
pharmacies; and
``(II) at the discretion of
the Secretary, for each type of
applicable non-retail pharmacy,
the determination of survey
prices, separate from the
survey prices described in
clause (i) or subclause (I) of
this clause, of the national
average drug acquisition cost
for such type of pharmacy for
covered outpatient drugs that
represent a nationwide average
of consumer purchase prices for
such drugs, net of all
discounts, rebates, and other
price concessions (to the
extent any information with
respect to such discounts,
rebates, and other price
concessions is available) based
on a monthly survey of such
pharmacies; and'';
(2) in subparagraph (B) of paragraph (1), by striking
``subparagraph (A)(ii)'' and inserting ``subparagraph
(A)(iii)'';
(3) in subparagraph (D) of paragraph (1), by striking
clauses (ii) and (iii) and inserting the following:
``(ii) The vendor must update the
Secretary no less often than monthly on
the survey prices for covered
outpatient drugs.
``(iii) The vendor must
differentiate, in collecting and
reporting survey data, for all cost
information collected, whether a
pharmacy is a retail community pharmacy
or an applicable non-retail pharmacy,
including whether such pharmacy is an
affiliate (as defined in subsection
(k)(14)), and, in the case of an
applicable non-retail pharmacy, which
type of applicable non-retail pharmacy
it is using the relevant pharmacy type
indicators included in the guidance
required by subsection (d)(2) of
section 44123 of the Act titled `An Act
to provide for reconciliation pursuant
to title II of H. Con. Res. 14'.'';
(4) by adding at the end of paragraph (1) the
following:
``(F) Survey reporting.--In order to meet the
requirement of section 1902(a)(54), a State
shall require that any retail community
pharmacy or applicable non-retail pharmacy in
the State that receives any payment,
reimbursement, administrative fee, discount,
rebate, or other price concession related to
the dispensing of covered outpatient drugs to
individuals receiving benefits under this
title, regardless of whether such payment,
reimbursement, administrative fee, discount,
rebate, or other price concession is received
from the State or a managed care entity or
other specified entity (as such terms are
defined in section 1903(m)(9)(D)) directly or
from a pharmacy benefit manager or another
entity that has a contract with the State or a
managed care entity or other specified entity
(as so defined), shall respond to surveys
conducted under this paragraph.
``(G) Survey information.--Information on
national drug acquisition prices obtained under
this paragraph shall be made publicly available
in a form and manner to be determined by the
Secretary and shall include at least the
following:
``(i) The monthly response rate to
the survey including a list of
pharmacies not in compliance with
subparagraph (F).
``(ii) The sampling methodology and
number of pharmacies sampled monthly.
``(iii) Information on price
concessions to pharmacies, including
discounts, rebates, and other price
concessions, to the extent that such
information may be publicly released
and has been collected by the Secretary
as part of the survey.
``(H) Penalties.--
``(i) In general.--Subject to clauses
(ii), (iii), and (iv), the Secretary
shall enforce the provisions of this
paragraph with respect to a pharmacy
through the establishment of civil
money penalties applicable to a retail
community pharmacy or an applicable
non-retail pharmacy.
``(ii) Basis for penalties.--The
Secretary shall impose a civil money
penalty established under this
subparagraph on a retail community
pharmacy or applicable non-retail
pharmacy if--
``(I) the retail pharmacy or
applicable non-retail pharmacy
refuses or otherwise fails to
respond to a request for
information about prices in
connection with a survey under
this subsection;
``(II) knowingly provides
false information in response
to such a survey; or
``(III) otherwise fails to
comply with the requirements
established under this
paragraph.
``(iii) Parameters for penalties.--
``(I) In general.--A civil
money penalty established under
this subparagraph may be
assessed with respect to each
violation, and with respect to
each non-compliant retail
community pharmacy (including a
pharmacy that is part of a
chain) or non-compliant
applicable non-retail pharmacy
(including a pharmacy that is
part of a chain), in an amount
not to exceed $100,000 for each
such violation.
``(II) Considerations.--In
determining the amount of a
civil money penalty imposed
under this subparagraph, the
Secretary may consider the
size, business structure, and
type of pharmacy involved, as
well as the type of violation
and other relevant factors, as
determined appropriate by the
Secretary.
``(iv) Rule of application.--The
provisions of section 1128A (other than
subsections (a) and (b)) shall apply to
a civil money penalty under this
subparagraph in the same manner as such
provisions apply to a civil money
penalty or proceeding under section
1128A(a).
``(I) Limitation on use of applicable non-
retail pharmacy pricing information.--No State
shall use pricing information reported by
applicable non-retail pharmacies under
subparagraph (A)(ii) to develop or inform
payment methodologies for retail community
pharmacies.'';
(5) in paragraph (2)--
(A) in subparagraph (A), by inserting ``,
including payment rates and methodologies for
determining ingredient cost reimbursement under
managed care entities or other specified
entities (as such terms are defined in section
1903(m)(9)(D)),'' after ``under this title'';
and
(B) in subparagraph (B), by inserting ``and
the basis for such dispensing fees'' before the
semicolon;
(6) by redesignating paragraph (4) as paragraph (5);
(7) by inserting after paragraph (3) the following
new paragraph:
``(4) Oversight.--
``(A) In general.--The Inspector General of
the Department of Health and Human Services
shall conduct periodic studies of the survey
data reported under this subsection, as
appropriate, including with respect to
substantial variations in acquisition costs or
other applicable costs, as well as with respect
to how internal transfer prices and related
party transactions may influence the costs
reported by pharmacies that are affiliates (as
defined in subsection (k)(13)) or are owned by,
controlled by, or related under a common
ownership structure with a wholesaler,
distributor, or other entity that acquires
covered outpatient drugs relative to costs
reported by pharmacies not affiliated with such
entities. The Inspector General shall provide
periodic updates to Congress on the results of
such studies, as appropriate, in a manner that
does not disclose trade secrets or other
proprietary information.
``(B) Appropriation.--There is appropriated
to the Inspector General of the Department of
Health and Human Services, out of any money in
the Treasury not otherwise appropriated,
$5,000,000 for fiscal year 2026, to remain
available until expended, to carry out this
paragraph.''; and
(8) in paragraph (5), as so redesignated--
(A) by inserting ``, and $8,000,000 for each
of fiscal years 2026 through 2033,'' after
``2010''; and
(B) by inserting ``Funds appropriated under
this paragraph for each of fiscal years 2026
through 2033 shall remain available until
expended.'' after the period.
(b) Definitions.--Section 1927(k) of the Social Security Act
(42 U.S.C. 1396r-8(k)) is amended--
(1) in the matter preceding paragraph (1), by
striking ``In the section'' and inserting ``In this
section''; and
(2) by adding at the end the following new
paragraphs:
``(12) Applicable non-retail pharmacy.--The term
`applicable non-retail pharmacy' means a pharmacy that
is licensed as a pharmacy by the State and that is not
a retail community pharmacy, including a pharmacy that
dispenses prescription medications to patients
primarily through mail and specialty pharmacies. Such
term does not include nursing home pharmacies, long-
term care facility pharmacies, hospital pharmacies,
clinics, charitable or not-for-profit pharmacies,
government pharmacies, or low dispensing pharmacies (as
defined by the Secretary).
``(13) Affiliate.--The term `affiliate' means any
entity that is owned by, controlled by, or related
under a common ownership structure with a pharmacy
benefit manager or a managed care entity or other
specified entity (as such terms are defined in section
1903(m)(9)(D)).''.
(c) Effective Date.--
(1) In general.--Subject to paragraph (2), the
amendments made by this section shall apply beginning
on the first day of the first quarter that begins on or
after the date that is 6 months after the date of
enactment of this section.
(2) Delayed application to applicable non-retail
pharmacies.--The pharmacy survey requirements
established by the amendments to section 1927(f) of the
Social Security Act (42 U.S.C. 1396r-8(f)) made by this
section shall apply to retail community pharmacies
beginning on the effective date described in paragraph
(1), but shall not apply to applicable non-retail
pharmacies until the first day of the first quarter
that begins on or after the date that is 18 months
after the date of enactment of this section.
(d) Identification of Applicable Non-retail Pharmacies.--
(1) In general.--Not later than January 1, 2027, the
Secretary of Health and Human Services shall, in
consultation with stakeholders as appropriate, publish
guidance specifying pharmacies that meet the definition
of applicable non-retail pharmacies (as such term is
defined in subsection (k)(12) of section 1927 of the
Social Security Act (42 U.S.C. 1396r-8), as added by
subsection (b)), and that will be subject to the survey
requirements under subsection (f)(1) of such section,
as amended by subsection (a).
(2) Inclusion of pharmacy type indicators.--The
guidance published under paragraph (1) shall include
pharmacy type indicators to distinguish between
different types of applicable non-retail pharmacies,
such as pharmacies that dispense prescriptions
primarily through the mail and pharmacies that dispense
prescriptions that require special handling or
distribution. An applicable non-retail pharmacy may be
identified through multiple pharmacy type indicators.
(e) Implementation.--
(1) In general.--Notwithstanding any other provision
of law, the Secretary of Health and Human Services may
implement the amendments made by this section by
program instruction or otherwise.
(2) Nonapplication of administrative procedure act.--
Implementation of the amendments made by this section
shall be exempt from the requirements of section 553 of
title 5, United States Code.
(f) Nonapplication of Paperwork Reduction Act.--Chapter 35 of
title 44, United States Code, shall not apply to any data
collection undertaken by the Secretary of Health and Human
Services under section 1927(f) of the Social Security Act (42
U.S.C. 1396r-8(f)), as amended by this section.
SEC. 44124. PREVENTING THE USE OF ABUSIVE SPREAD PRICING IN MEDICAID.
(a) In General.--Section 1927 of the Social Security Act (42
U.S.C. 1396r-8) is amended--
(1) in subsection (e), by adding at the end the
following new paragraph:
``(6) Transparent prescription drug pass-through
pricing required.--
``(A) In general.--A contract between the
State and a pharmacy benefit manager (referred
to in this paragraph as a `PBM'), or a contract
between the State and a managed care entity or
other specified entity (as such terms are
defined in section 1903(m)(9)(D) and
collectively referred to in this paragraph as
the `entity') that includes provisions making
the entity responsible for coverage of covered
outpatient drugs dispensed to individuals
enrolled with the entity, shall require that
payment for such drugs and related
administrative services (as applicable),
including payments made by a PBM on behalf of
the State or entity, is based on a transparent
prescription drug pass-through pricing model
under which--
``(i) any payment made by the entity
or the PBM (as applicable) for such a
drug--
``(I) is limited to--
``(aa) ingredient
cost; and
``(bb) a professional
dispensing fee that is
not less than the
professional dispensing
fee that the State
would pay if the State
were making the payment
directly in accordance
with the State plan;
``(II) is passed through in
its entirety (except as reduced
under Federal or State laws and
regulations in response to
instances of waste, fraud, or
abuse) by the entity or PBM to
the pharmacy or provider that
dispenses the drug; and
``(III) is made in a manner
that is consistent with
sections 447.502, 447.512,
447.514, and 447.518 of title
42, Code of Federal Regulations
(or any successor regulation)
as if such requirements applied
directly to the entity or the
PBM, except that any payment by
the entity or the PBM for the
ingredient cost of such drug
purchased by a covered entity
(as defined in subsection
(a)(5)(B)) may exceed the
actual acquisition cost (as
defined in 447.502 of title 42,
Code of Federal Regulations, or
any successor regulation) for
such drug if--
``(aa) such drug was
subject to an agreement
under section 340B of
the Public Health
Service Act;
``(bb) such payment
for the ingredient cost
of such drug does not
exceed the maximum
payment that would have
been made by the entity
or the PBM for the
ingredient cost of such
drug if such drug had
not been purchased by
such covered entity;
and
``(cc) such covered
entity reports to the
Secretary (in a form
and manner specified by
the Secretary), on an
annual basis and with
respect to payments for
the ingredient costs of
such drugs so purchased
by such covered entity
that are in excess of
the actual acquisition
costs for such drugs,
the aggregate amount of
such excess;
``(ii) payment to the entity or the
PBM (as applicable) for administrative
services performed by the entity or PBM
is limited to an administrative fee
that reflects the fair market value (as
defined by the Secretary) of such
services;
``(iii) the entity or the PBM (as
applicable) makes available to the
State, and the Secretary upon request
in a form and manner specified by the
Secretary, all costs and payments
related to covered outpatient drugs and
accompanying administrative services
(as described in clause (ii)) incurred,
received, or made by the entity or the
PBM, broken down (as specified by the
Secretary), to the extent such costs
and payments are attributable to an
individual covered outpatient drug, by
each such drug, including any
ingredient costs, professional
dispensing fees, administrative fees
(as described in clause (ii)), post-
sale and post-invoice fees, discounts,
or related adjustments such as direct
and indirect remuneration fees, and any
and all other remuneration, as defined
by the Secretary; and
``(iv) any form of spread pricing
whereby any amount charged or claimed
by the entity or the PBM (as
applicable) that exceeds the amount
paid to the pharmacies or providers on
behalf of the State or entity,
including any post-sale or post-invoice
fees, discounts, or related adjustments
such as direct and indirect
remuneration fees or assessments, as
defined by the Secretary, (after
allowing for an administrative fee as
described in clause (ii)) is not
allowable for purposes of claiming
Federal matching payments under this
title.
``(B) Publication of information.--The
Secretary shall publish, not less frequently
than on an annual basis and in a manner that
does not disclose the identity of a particular
covered entity or organization, information
received by the Secretary pursuant to
subparagraph (A)(iii)(III) that is broken out
by State and by each of the following
categories of covered entity within each such
State:
``(i) Covered entities described in
subparagraph (A) of section 340B(a)(4)
of the Public Health Service Act.
``(ii) Covered entities described in
subparagraphs (B) through (K) of such
section.
``(iii) Covered entities described in
subparagraph (L) of such section.
``(iv) Covered entities described in
subparagraph (M) of such section.
``(v) Covered entities described in
subparagraph (N) of such section.
``(vi) Covered entities described in
subparagraph (O) of such section.'';
and
(2) in subsection (k), as previously amended by this
subtitle, by adding at the end the following new
paragraph:
``(14) Pharmacy benefit manager.--The term `pharmacy
benefit manager' means any person or entity that,
either directly or through an intermediary, acts as a
price negotiator or group purchaser on behalf of a
State, managed care entity (as defined in section
1903(m)(9)(D)), or other specified entity (as so
defined), or manages the prescription drug benefits
provided by a State, managed care entity, or other
specified entity, including the processing and payment
of claims for prescription drugs, the performance of
drug utilization review, the processing of drug prior
authorization requests, the managing of appeals or
grievances related to the prescription drug benefits,
contracting with pharmacies, controlling the cost of
covered outpatient drugs, or the provision of services
related thereto. Such term includes any person or
entity that acts as a price negotiator (with regard to
payment amounts to pharmacies and providers for a
covered outpatient drug or the net cost of the drug) or
group purchaser on behalf of a State, managed care
entity, or other specified entity or that carries out 1
or more of the other activities described in the
preceding sentence, irrespective of whether such person
or entity calls itself a pharmacy benefit manager.''.
(b) Conforming Amendments.--Section 1903(m) of such Act (42
U.S.C. 1396b(m)) is amended--
(1) in paragraph (2)(A)(xiii)--
(A) by striking ``and (III)'' and inserting
``(III)'';
(B) by inserting before the period at the end
the following: ``, and (IV) if the contract
includes provisions making the entity
responsible for coverage of covered outpatient
drugs, the entity shall comply with the
requirements of section 1927(e)(6)''; and
(C) by moving the left margin 2 ems to the
left; and
(2) by adding at the end the following new paragraph:
``(10) No payment shall be made under this title to a
State with respect to expenditures incurred by the
State for payment for services provided by an other
specified entity (as defined in paragraph (9)(D)(iii))
unless such services are provided in accordance with a
contract between the State and such entity which
satisfies the requirements of paragraph
(2)(A)(xiii).''.
(c) Effective Date.--The amendments made by this section
shall apply to contracts between States and managed care
entities, other specified entities, or pharmacy benefit
managers that have an effective date beginning on or after the
date that is 18 months after the date of enactment of this
section.
(d) Implementation.--
(1) In general.--Notwithstanding any other provision
of law, the Secretary of Health and Human Services may
implement the amendments made by this section by
program instruction or otherwise.
(2) Nonapplication of administrative procedure act.--
Implementation of the amendments made by this section
shall be exempt from the requirements of section 553 of
title 5, United States Code.
(e) Nonapplication of Paperwork Reduction Act.--Chapter 35 of
title 44, United States Code, shall not apply to any data
collection undertaken by the Secretary of Health and Human
Services under section 1927(e) of the Social Security Act (42
U.S.C. 1396r-8(e)), as amended by this section.
SEC. 44125. PROHIBITING FEDERAL MEDICAID AND CHIP FUNDING FOR GENDER
TRANSITION PROCEDURES FOR MINORS.
(a) Medicaid.--Section 1903(i) of the Social Security Act (42
U.S.C. 1396b(i)) is amended--
(1) in paragraph (26), by striking ``; or'' and
inserting a semicolon;
(2) in paragraph (27), by striking the period at the
end and inserting ``; or'';
(3) by inserting after paragraph (27) the following
new paragraph:
``(28) with respect to any amount expended for
specified gender transition procedures (as defined in
section 1905(kk)) furnished to an individual under 18
years of age enrolled in a State plan (or waiver of
such plan).''; and
(4) in the flush left matter at the end, by striking
``and (18),'' and inserting ``(18), and (28)''.
(b) CHIP.--Section 2107(e)(1)(N) of the Social Security Act
(42 U.S.C. 1397gg(e)(1)(N)) is amended by striking ``and (17)''
and inserting ``(17), and (28)''.
(c) Specified Gender Transition Procedures Defined.--Section
1905 of the Social Security Act (42 U.S.C. 1396d) is amended by
adding at the end the following new subsection:
``(kk) Specified Gender Transition Procedures.--
``(1) In general.--For purposes of section
1903(i)(28), except as provided in paragraph (2), the
term `specified gender transition procedure' means,
with respect to an individual, any of the following
when performed for the purpose of intentionally
changing the body of such individual (including by
disrupting the body's development, inhibiting its
natural functions, or modifying its appearance) to no
longer correspond to the individual's sex:
``(A) Performing any surgery, including--
``(i) castration;
``(ii) sterilization;
``(iii) orchiectomy;
``(iv) scrotoplasty;
``(v) vasectomy;
``(vi) tubal ligation;
``(vii) hysterectomy;
``(viii) oophorectomy;
``(ix) ovariectomy;
``(x) metoidioplasty;
``(xi) clitoroplasty;
``(xii) reconstruction of the fixed
part of the urethra with or without a
metoidioplasty or a phalloplasty;
``(xiii) penectomy;
``(xiv) phalloplasty;
``(xv) vaginoplasty;
``(xvi) vaginectomy;
``(xvii) vulvoplasty;
``(xviii) reduction
thyrochondroplasty;
``(xix) chondrolaryngoplasty;
``(xx) mastectomy; and
``(xxi) any plastic, cosmetic, or
aesthetic surgery that feminizes or
masculinizes the facial or other body
features of an individual.
``(B) Any placement of chest implants to
create feminine breasts or any placement of
erection or testicular prostheses.
``(C) Any placement of fat or artificial
implants in the gluteal region.
``(D) Administering, prescribing, or
dispensing to an individual medications,
including--
``(i) gonadotropin-releasing hormone
(GnRH) analogues or other puberty-
blocking drugs to stop or delay normal
puberty; and
``(ii) testosterone, estrogen, or
other androgens to an individual at
doses that are supraphysiologic than
would normally be produced endogenously
in a healthy individual of the same age
and sex.
``(2) Exception.--Paragraph (1) shall not apply to
the following when furnished to an individual by a
health care provider with the consent of such
individual's parent or legal guardian:
``(A) Puberty suppression or blocking
prescription drugs for the purpose of
normalizing puberty for an individual
experiencing precocious puberty.
``(B) Medically necessary procedures or
treatments to correct for--
``(i) a medically verifiable disorder
of sex development, including--
``(I) 46,XX chromosomes with
virilization;
``(II) 46,XY chromosomes with
undervirilization; and
``(III) both ovarian and
testicular tissue;
``(ii) sex chromosome structure, sex
steroid hormone production, or sex
hormone action, if determined to be
abnormal by a physician through genetic
or biochemical testing;
``(iii) infection, disease, injury,
or disorder caused or exacerbated by a
previous procedure described in
paragraph (1), or a physical disorder,
physical injury, or physical illness
that would, as certified by a
physician, place the individual in
imminent danger of death or impairment
of a major bodily function unless the
procedure is performed, not including
procedures performed for the
alleviation of mental distress; or
``(iv) procedures to restore or
reconstruct the body of the individual
in order to correspond to the
individual's sex after one or more
previous procedures described in
paragraph (1), which may include the
removal of a pseudo phallus or breast
augmentation.
``(3) Sex.--For purposes of paragraph (1), the term
`sex' means either male or female, as biologically
determined and defined in paragraphs (4) and (5),
respectively.
``(4) Female.--For purposes of paragraph (3), the
term `female' means an individual who naturally has,
had, will have, or would have, but for a developmental
or genetic anomaly or historical accident, the
reproductive system that at some point produces,
transports, and utilizes eggs for fertilization.
``(5) Male.--For purposes of paragraph (3), the term
`male' means an individual who naturally has, had, will
have, or would have, but for a developmental or genetic
anomaly or historical accident, the reproductive system
that at some point produces, transports, and utilizes
sperm for fertilization.''.
SEC. 44126. FEDERAL PAYMENTS TO PROHIBITED ENTITIES.
(a) In General.--No Federal funds that are considered direct
spending and provided to carry out a State plan under title XIX
of the Social Security Act or a waiver of such a plan shall be
used to make payments to a prohibited entity for items and
services furnished during the 10-year period beginning on the
date of the enactment of this Act, including any payments made
directly to the prohibited entity or under a contract or other
arrangement between a State and a covered organization.
(b) Definitions.--In this section:
(1) Prohibited entity.--The term ``prohibited
entity'' means an entity, including its affiliates,
subsidiaries, successors, and clinics--
(A) that, as of the date of enactment of this
Act--
(i) is an organization described in
section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from
tax under section 501(a) of such Code;
(ii) is an essential community
provider described in section 156.235
of title 45, Code of Federal
Regulations (as in effect on the date
of enactment of this Act), that is
primarily engaged in family planning
services, reproductive health, and
related medical care; and
(iii) provides for abortions, other
than an abortion--
(I) if the pregnancy is the
result of an act of rape or
incest; or
(II) in the case where a
woman suffers from a physical
disorder, physical injury, or
physical illness, including a
life-endangering physical
condition caused by or arising
from the pregnancy itself, that
would, as certified by a
physician, place the woman in
danger of death unless an
abortion is performed; and
(B) for which the total amount of Federal and
State expenditures under the Medicaid program
under title XIX of the Social Security Act in
fiscal year 2024 made directly, or by a covered
organization, to the entity or to any
affiliates, subsidiaries, successors, or
clinics of the entity, or made to the entity or
to any affiliates, subsidiaries, successors, or
clinics of the entity as part of a nationwide
health care provider network, exceeded
$1,000,000.
(2) Direct spending.--The term ``direct spending''
has the meaning given that term under section 250(c) of
the Balanced Budget and Emergency Deficit Control Act
of 1985 (2 U.S.C. 900(c)).
(3) Covered organization.--The term ``covered
organization'' means a managed care entity (as defined
in section 1932(a)(1)(B) of the Social Security Act (42
U.S.C. 1396u-2(a)(1)(B))) or a prepaid inpatient health
plan or prepaid ambulatory health plan (as such terms
are defined in section 1903(m)(9)(D) of such Act (42
U.S.C. 1396b(m)(9)(D))).
(4) State.--The term ``State'' has the meaning given
such term in section 1101 of the Social Security Act
(42 U.S.C. 1301).
Subpart C--Stopping Abusive Financing Practices
SEC. 44131. SUNSETTING ELIGIBILITY FOR INCREASED FMAP FOR NEW EXPANSION
STATES.
Section 1905(ii)(3) of the Social Security Act (42 U.S.C.
1396d(ii)(3)) is amended--
(1) by striking ``which has not'' and inserting the
following: ``which--
``(A) has not'';
(2) in subparagraph (A), as so inserted, by striking
the period at the end and inserting ``; and''; and
(3) by adding at the end the following new
subparagraph:
``(B) begins to expend amounts for all such
individuals prior to January 1, 2026.''.
SEC. 44132. MORATORIUM ON NEW OR INCREASED PROVIDER TAXES.
Section 1903(w)(1)(A)(iii) of the Social Security Act (42
U.S.C. 1396b(w)(1)(A)(iii)) is amended--
(1) by striking ``or'' at the end;
(2) by striking ``if there'' and inserting ``if--
``(I) there''; and
(3) by adding at the end the following new
subclauses:
``(II) the tax is first imposed by the State
(or by a unit of local government in the State)
on or after the date of the enactment of this
subclause (other than such a tax for which the
legislation or regulations providing for the
imposition of such tax were enacted or adopted
prior to such date of enactment); or
``(III) on or after the date of the enactment
of this subclause, the State (or unit of local
government) increases the amount or rate of tax
imposed with respect to a class of health care
items or services (or with respect to a type of
provider or activity within such a class), or
increases the base of the tax such that the tax
is imposed with respect to a class of items or
services (or with respect to a type of provider
or activity within such a class) to which the
tax did not previously apply, but only to the
extent that such revenues are attributable to
such increase and only if such increase was not
provided for in legislation or regulations
enacted or adopted prior to such date of
enactment; or''.
SEC. 44133. REVISING THE PAYMENT LIMIT FOR CERTAIN STATE DIRECTED
PAYMENTS.
(a) In General.--Subject to subsection (b), the Secretary of
Health and Human Services shall revise section 438.6(c)(2)(iii)
of title 42, Code of Federal Regulations (or a successor
regulation) such that, with respect to a payment described in
such section made for a service furnished during a rating
period beginning on or after the date of the enactment of this
Act, the total payment rate for such service is limited to 100
percent of the specified total published Medicare payment rate.
(b) Grandfathering Certain Payments.--In the case of a
payment described in section 438.6(c)(2)(iii) of title 42, Code
of Federal Regulations (or a successor regulation) for which
written prior approval was made before the date of the
enactment of this Act for the rating period occurring as of
such date of enactment, or a payment so described for such
rating period for which a preprint was submitted to the
Secretary of Health and Human Services prior to such date of
enactment, the revisions described in subsection (a) shall not
apply to such payment for such rating period and for any
subsequent rating period if the amount of such payment does not
exceed the amount of such payment so approved.
(c) Definitions.--In this section:
(1) Rating period.--The term ``rating period'' has
the meaning given such term in section 438.2 of title
42, Code of Federal Regulations (or a successor
regulation).
(2) Total published medicare payment rate.--The term
``total published Medicare payment rate'' means amounts
calculated as payment for specific services that have
been developed under part A or part B of title XVIII of
the Social Security Act (42 U.S.C. 1395 et seq.).
(3) Written prior approval.--The term ``written prior
approval'' has the meaning given such term in section
438.6(c)(2)(i) of title 42, Code of Federal Regulations
(or a successor regulation).
(d) Funding.--There are appropriated out of any monies in the
Treasury not otherwise appropriated $7,000,000 for each of
fiscal years 2026 through 2033 for purposes of carrying out
this section.
SEC. 44134. REQUIREMENTS REGARDING WAIVER OF UNIFORM TAX REQUIREMENT
FOR MEDICAID PROVIDER TAX.
(a) In General.--Section 1903(w) of the Social Security Act
(42 U.S.C. 1396b(w)) is amended--
(1) in paragraph (3)(E), by inserting after clause
(ii)(II) the following new clause:
``(iii) For purposes of clause (ii)(I), a tax is not
considered to be generally redistributive if any of the
following conditions apply:
``(I) Within a permissible class, the tax rate
imposed on any taxpayer or tax rate group (as defined
in paragraph (7)(J)) explicitly defined by its
relatively lower volume or percentage of Medicaid
taxable units (as defined in paragraph (7)(H)) is lower
than the tax rate imposed on any other taxpayer or tax
rate group explicitly defined by its relatively higher
volume or percentage of Medicaid taxable units.
``(II) Within a permissible class, the tax rate
imposed on any taxpayer or tax rate group (as so
defined) based upon its Medicaid taxable units (as so
defined) is higher than the tax rate imposed on any
taxpayer or tax rate group based upon its non-Medicaid
taxable unit (as defined in paragraph (7)(I)).
``(III) The tax excludes or imposes a lower tax rate
on a taxpayer or tax rate group (as so defined) based
on or defined by any description that results in the
same effect as described in subclause (I) or (II) for a
taxpayer or tax rate group. Characteristics that may
indicate such type of exclusion include the use of
terminology to establish a tax rate group--
``(aa) based on payments or expenditures made
under the program under this title without
mentioning the term `Medicaid' (or any similar
term) to accomplish the same effect as
described in subclause (I) or (II); or
``(bb) that closely approximates a taxpayer
or tax rate group under the program under this
title, to the same effect as described in
subclause (I) or (II).''; and
(2) in paragraph (7), by adding at the end the
following new subparagraphs:
``(H) The term `Medicaid taxable unit' means a unit
that is being taxed within a health care related tax
that is applicable to the program under this title.
Such term includes a unit that is used as the basis
for--
``(i) payment under the program under this
title (such as Medicaid bed days);
``(ii) Medicaid revenue;
``(iii) costs associated with the program
under this title (such as Medicaid charges,
claims, or expenditures); and
``(iv) other units associated with the
program under this title, as determined by the
Secretary.
``(I) The term `non-Medicaid taxable unit' means a
unit that is being taxed within a health care related
tax that is not applicable to the program under this
title. Such term includes a unit that is used as the
basis for--
``(i) payment by non-Medicaid payers (such as
non-Medicaid bed days);
``(ii) non-Medicaid revenue;
``(iii) costs that are not associated with
the program under this title (such as non-
Medicaid charges, non-Medicaid claims, or non-
Medicaid expenditures); and
``(iv) other units not associated with the
program under this title, as determined by the
Secretary.
``(J) The term `tax rate group' means a group of
entities contained within a permissible class of a
health care related tax that are taxed at the same
rate.''.
(b) Effective Date.--The amendments made by this section
shall take effect upon the date of enactment of this Act,
subject to any applicable transition period determined
appropriate by the Secretary of Health and Human Services, not
to exceed 3 fiscal years.
SEC. 44135. REQUIRING BUDGET NEUTRALITY FOR MEDICAID DEMONSTRATION
PROJECTS UNDER SECTION 1115.
Section 1115 of the Social Security Act (42 U.S.C. 1315) is
amended by adding at the end the following new subsection:
``(g) Requirement of Budget Neutrality for Medicaid
Demonstration Projects.--
``(1) In general.--Beginning on the date of the
enactment of this subsection, the Secretary may not
approve an application for (or renewal or amendment of)
an experimental, pilot, or demonstration project
undertaken under subsection (a) to promote the
objectives of title XIX in a State (in this subsection
referred to as a `Medicaid demonstration project')
unless the Secretary certifies that such project is not
expected to result in an increase in the amount of
Federal expenditures compared to the amount that such
expenditures would otherwise be in the absence of such
project.
``(2) Treatment of savings.--In the event that
Federal expenditures with respect to a State under a
Medicaid demonstration project are, during an approval
period for such project, less than the amount of such
expenditures that would have otherwise been made in the
absence of such project, the Secretary shall specify
the methodology to be used with respect to any
subsequent approval period for such project for
purposes of taking the difference between such
expenditures into account.''.
Subpart D--Increasing Personal Accountability
SEC. 44141. REQUIREMENT FOR STATES TO ESTABLISH MEDICAID COMMUNITY
ENGAGEMENT REQUIREMENTS FOR CERTAIN INDIVIDUALS.
(a) In General.--Section 1902 of the Social Security Act (42
U.S.C. 1396a), as amended by sections 44103 and 44104, is
further amended by adding at the end the following new
subsection:
``(xx) Community Engagement Requirement for Applicable
Individuals.--
``(1) In general.--Beginning January 1, 2029, subject
to the succeeding provisions of this subsection, a
State shall provide, as a condition of eligibility for
medical assistance for an applicable individual, that
such individual is required to demonstrate community
engagement under paragraph (2)--
``(A) in the case of an applicable individual
who has filed an application for medical
assistance under a State plan (or a waiver of
such plan) under this title, for 1 or more (as
specified by the State) consecutive months
immediately preceding the month during which
such individual applies for such medical
assistance; and
``(B) in the case of an applicable individual
enrolled and receiving medical assistance under
a State plan (or under a waiver of such plan)
under this title, for 1 or more (as specified
by the State) months, whether or not
consecutive--
``(i) during the period between such
individual's most recent determination
(or redetermination, as applicable) of
eligibility and such individual's next
regularly scheduled redetermination of
eligibility (as verified by the State
as part of such regularly scheduled
redetermination of eligibility); or
``(ii) in the case of a State that
has elected under paragraph (4) to
conduct more frequent verifications of
compliance with the requirement to
demonstrate community engagement,
during the period between the most
recent and next such verification with
respect to such individual.
``(2) Community engagement compliance described.--
Subject to paragraph (3), an applicable individual
demonstrates community engagement under this paragraph
for a month if such individual meets 1 or more of the
following conditions with respect to such month, as
determined in accordance with criteria established by
the Secretary through regulation:
``(A) The individual works not less than 80
hours.
``(B) The individual completes not less than
80 hours of community service.
``(C) The individual participates in a work
program for not less than 80 hours.
``(D) The individual is enrolled in an
educational program at least half-time.
``(E) The individual engages in any
combination of the activities described in
subparagraphs (A) through (D), for a total of
not less than 80 hours.
``(F) The individual has a monthly income
that is not less than the applicable minimum
wage requirement under section 6 of the Fair
Labor Standards Act of 1938, multiplied by 80
hours.
``(3) Exceptions.--
``(A) Mandatory exception for certain
individuals.--The State shall deem an
applicable individual to have demonstrated
community engagement under paragraph (2) for a
month if--
``(i) for part or all of such month,
the individual--
``(I) was a specified
excluded individual (as defined
in paragraph (9)(A)(ii)); or
``(II) was--
``(aa) under the age
of 19;
``(bb) pregnant or
entitled to postpartum
medical assistance
under paragraph (5) or
(16) of subsection (e);
``(cc) entitled to,
or enrolled for,
benefits under part A
of title XVIII, or
enrolled for benefits
under part B of title
XVIII; or
``(dd) described in
any of subclauses (I)
through (VII) of
subsection
(a)(10)(A)(i); or
``(ii) at any point during the 3-
month period ending on the first day of
such month, the individual was an
inmate of a public institution.
``(B) Optional exception for short-term
hardship events.--
``(i) In general.--The State plan (or
waiver of such plan) may provide, in
the case of an applicable individual
who experiences a short-term hardship
event during a month, that the State
shall, upon the request of such
individual under procedures established
by the State (in accordance with
standards specified by the Secretary),
deem such individual to have
demonstrated community engagement under
paragraph (2) for such month.
``(ii) Short-term hardship event
defined.--For purposes of this
subparagraph, an applicable individual
experiences a short-term hardship event
during a month if, for part or all of
such month--
``(I) such individual
receives inpatient hospital
services, nursing facility
services, services in an
intermediate care facility for
individuals with intellectual
disabilities, inpatient
psychiatric hospital services,
or such other services as the
Secretary determines
appropriate;
``(II) such individual
resides in a county (or
equivalent unit of local
government)--
``(aa) in which there
exists an emergency or
disaster declared by
the President pursuant
to the National
Emergencies Act or the
Robert T. Stafford
Disaster Relief and
Emergency Assistance
Act; or
``(bb) that, subject
to a request from the
State to the Secretary,
made in such form, at
such time, and
containing such
information as the
Secretary may require,
has an unemployment
rate that is at or
above the lesser of--
``(AA) 8
percent; or
``(BB) 1.5
times the
national
unemployment
rate; or
``(III) such individual
experiences any other short-
term hardship (as defined by
the Secretary).
``(4) Option to conduct more frequent compliance
verifications.--With respect to an applicable
individual enrolled and receiving medical assistance
under a State plan (or a waiver of such plan) under
this title, the State shall verify (in accordance with
procedures specified by the Secretary) that each such
individual has met the requirement to demonstrate
community engagement under paragraph (1) during each
such individual's regularly scheduled redetermination
of eligibility, except that a State may provide for
such verifications more frequently.
``(5) Ex parte verifications.--For purposes of
verifying that an applicable individual has met the
requirement to demonstrate community engagement under
paragraph (1), the State shall, in accordance with
standards established by the Secretary, establish
processes and use reliable information available to the
State (such as payroll data) without requiring, where
possible, the applicable individual to submit
additional information.
``(6) Procedure in the case of noncompliance.--
``(A) In general.--If a State is unable to
verify that an applicable individual has met
the requirement to demonstrate community
engagement under paragraph (1) (including, if
applicable, by verifying that such individual
was deemed to have demonstrated community
engagement under paragraph (3)) the State shall
(in accordance with standards specified by the
Secretary)--
``(i) provide such individual with
the notice of noncompliance described
in subparagraph (B);
``(ii) (I) provide such individual
with a period of 30 calendar days,
beginning on the date on which such
notice of noncompliance is received by
the individual, to--
``(aa) make a satisfactory
showing to the State of
compliance with such
requirement (including, if
applicable, by showing that
such individual was deemed to
have demonstrated community
engagement under paragraph
(3)); or
``(bb) make a satisfactory
showing to the State that such
requirement does not apply to
such individual on the basis
that such individual does not
meet the definition of
applicable individual under
paragraph (9)(A); and
``(II) if such individual is enrolled
under the State plan (or a waiver of
such plan) under this title, continue
to provide such individual with medical
assistance during such 30-calendar-day
period; and
``(iii) if no such satisfactory
showing is made and the individual is
not a specified excluded individual
described in paragraph (9)(A)(ii), deny
such individual's application for
medical assistance under the State plan
(or waiver of such plan) or, as
applicable, disenroll such individual
from the plan (or waiver of such plan)
not later than the end of the month
following the month in which such 30-
calendar-day period ends, provided
that--
``(I) the State first
determines whether, with
respect to the individual,
there is any other basis for
eligibility for medical
assistance under the State plan
(or waiver of such plan) or for
another insurance affordability
program; and
``(II) the individual is
provided written notice and
granted an opportunity for a
fair hearing in accordance with
subsection (a)(3).
``(B) Notice.--The notice of noncompliance
provided to an applicable individual under
subparagraph (A)(i) shall include information
(in accordance with standards specified by the
Secretary) on--
``(i) how such individual may make a
satisfactory showing of compliance with
such requirement (as described in
subparagraph (A)(ii)) or make a
satisfactory showing that such
requirement does not apply to such
individual on the basis that such
individual does not meet the definition
of applicable individual under
paragraph (9)(A); and
``(ii) how such individual may
reapply for medical assistance under
the State plan (or a waiver of such
plan) under this title in the case that
such individuals' application is denied
or, as applicable, in the case that
such individual is disenrolled from the
plan (or waiver).
``(7) Treatment of noncompliant individuals in
relation to certain other provisions.--
``(A) Certain fmap increases.--A State shall
not be treated as not providing medical
assistance to all individuals described in
section 1902(a)(10)(A)(i)(VIII), or as not
expending amounts for all such individuals
under the State plan (or waiver of such plan),
solely because such an individual is determined
ineligible for medical assistance under the
State plan (or waiver) on the basis of a
failure to meet the requirement to demonstrate
community engagement under paragraph (1).
``(B) Other provisions.--For purposes of
section 36B(c)(2)(B) of the Internal Revenue
Code of 1986, an individual shall be deemed to
be eligible for minimum essential coverage
described in section 5000A(f)(1)(A)(ii) of such
Code for a month if such individual would have
been eligible for medical assistance under a
State plan (or a waiver of such plan) under
this title but for a failure to meet the
requirement to demonstrate community engagement
under paragraph (1).
``(8) Outreach.--
``(A) In general.--In accordance with
standards specified by the Secretary, beginning
not later than October 1, 2028 (or, if earlier,
the date that precedes January 1, 2029, by the
number of months specified by the State under
paragraph (1)(A) plus 3 months), and
periodically thereafter, the State shall notify
applicable individuals enrolled under a State
plan (or waiver) under this title of the
requirement to demonstrate community engagement
under this subsection. Such notice shall
include information on--
``(i) how to comply with such
requirement, including an explanation
of the exceptions to such requirement
under paragraph (3) and the definition
of the term `applicable individual'
under paragraph (9)(A);
``(ii) the consequences of
noncompliance with such requirement;
and
``(iii) how to report to the State
any change in the individual's status
that could result in--
``(I) the applicability of an
exception under paragraph (3)
(or the end of the
applicability of such an
exception); or
``(II) the individual
qualifying as a specified
excluded individual under
paragraph (9)(A)(ii).
``(B) Form of outreach notice.--A notice
required under subparagraph (A) shall be
delivered--
``(i) by regular mail (or, if elected
by the individual, in an electronic
format); and
``(ii) in 1 or more additional forms,
which may include telephone, text
message, an internet website, other
commonly available electronic means,
and such other forms as the Secretary
determines appropriate.
``(9) Definitions.--In this subsection:
``(A) Applicable individual.--
``(i) In general.--The term
`applicable individual' means an
individual (other than a specified
excluded individual (as defined in
clause (ii)))--
``(I) who is eligible to
enroll (or is enrolled) under
the State plan under subsection
(a)(10)(A)(i)(VIII); or
``(II) who--
``(aa) is otherwise
eligible to enroll (or
is enrolled) under a
waiver of such plan
that provides coverage
that is equivalent to
minimum essential
coverage (as described
in section
5000A(f)(1)(A) of the
Internal Revenue Code
of 1986 and as
determined in
accordance with
standards prescribed by
the Secretary in
regulations); and
``(bb) has attained
the age of 19 and is
under 65 years of age,
is not pregnant, is not
entitled to, or
enrolled for, benefits
under part A of title
XVIII, or enrolled for
benefits under part B
of title XVIII, and is
not otherwise eligible
to enroll under such
plan.
``(ii) Specified excluded
individual.--For purposes of clause
(i), the term `specified excluded
individual' means an individual, as
determined by the State (in accordance
with standards specified by the
Secretary)--
``(I) who is described in
subsection (a)(10)(A)(i)(IX);
``(II) who--
``(aa) is an Indian
or an Urban Indian (as
such terms are defined
in paragraphs (13) and
(28) of section 4 of
the Indian Health Care
Improvement Act);
``(bb) is a
California Indian
described in section
809(a) of such Act; or
``(cc) has otherwise
been determined
eligible as an Indian
for the Indian Health
Service under
regulations promulgated
by the Secretary;
``(III) who is the parent,
guardian, or caretaker relative
of a disabled individual or a
dependent child;
``(IV) who is a veteran with
a disability rated as total
under section 1155 of title 38,
United States Code;
``(V) who is medically frail
or otherwise has special
medical needs (as defined by
the Secretary), including an
individual--
``(aa) who is blind
or disabled (as defined
in section 1614);
``(bb) with a
substance use disorder;
``(cc) with a
disabling mental
disorder;
``(dd) with a
physical, intellectual
or developmental
disability that
significantly impairs
their ability to
perform 1 or more
activities of daily
living;
``(ee) with a serious
and complex medical
condition; or
``(ff) subject to the
approval of the
Secretary, with any
other medical condition
identified by the State
that is not otherwise
identified under this
clause;
``(VI) who--
``(aa) is in
compliance with any
requirements imposed by
the State pursuant to
section 407; or
``(bb) is a member of
a household that
receives supplemental
nutrition assistance
program benefits under
the Food and Nutrition
Act of 2008 and is not
exempt from a work
requirement under such
Act;
``(VII) who is participating
in a drug addiction or
alcoholic treatment and
rehabilitation program (as
defined in section 3(h) of the
Food and Nutrition Act of
2008);
``(VIII) who is an inmate of
a public institution; or
``(IX) who meets such other
criteria as the Secretary
determines appropriate.
``(B) Educational program.--The term
`educational program' means--
``(i) an institution of higher
education (as defined in section 101 of
the Higher Education Act of 1965);
``(ii) a program of career and
technical education (as defined in
section 3 of the Carl D. Perkins Career
and Technical Education Act of 2006);
or
``(iii) any other educational program
that meets such criteria as the
Secretary determines appropriate.
``(C) State.--The term `State' means 1 of the
50 States or the District of Columbia.
``(D) Work program.--The term `work program'
has the meaning given such term in section
6(o)(1) of the Food and Nutrition Act of 2008.
``(10) Prohibiting waiver of community engagement
requirements.--Notwithstanding section 1115(a), the
provisions of this subsection may not be waived.''.
(b) Conforming Amendment.--Section 1902(a)(10)(A)(i)(VIII) of
the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(i)(VIII)) is
amended by striking ``subject to subsection (k)'' and inserting
``subject to subsections (k) and (xx)''.
(c) Rulemaking.--Not later than July 1, 2027, the Secretary
of Health and Human Services shall promulgate regulations for
purposes of carrying out the amendments made by this section.
(d) Grants to States.--
(1) In general.--The Secretary of Health and Human
Services shall, out of amounts appropriated under
paragraph (3), award to each State a grant equal to the
amount specified in paragraph (2) for such State for
purposes of establishing systems necessary to carry out
the provisions of, and amendments made by, this
section.
(2) Amount specified.--For purposes of paragraph (2),
the amount specified in this paragraph is an amount
that bears the same ratio to the amount appropriated
under paragraph (3) as the number of applicable
individuals (as defined in section 1902(xx) of the
Social Security Act, as added by subsection (a))
residing in such State bears to the total number of
such individuals residing in all States.
(3) Funding.--There are appropriated, out of any
monies in the Treasury not otherwise appropriated,
$100,000,000 for fiscal year 2026 for purposes of
awarding grants under paragraph (1).
(4) Definition.--In this subsection, the term
``State'' means 1 of the 50 States and the District of
Columbia.
(e) Implementation Funding.--For the purposes of carrying out
the provisions of, and the amendments made by, this section,
there are appropriated, out of any monies in the Treasury not
otherwise appropriated, to the Secretary of Health and Human
Services, $50,000,000 for fiscal year 2026, to remain available
until expended.
SEC. 44142. MODIFYING COST SHARING REQUIREMENTS FOR CERTAIN EXPANSION
INDIVIDUALS UNDER THE MEDICAID PROGRAM.
(a) In General.--Section 1916 of the Social Security Act (42
U.S.C. 1396o) is amended--
(1) in subsection (a), in the matter preceding
paragraph (1), by inserting ``(other than, beginning
October 1, 2028, specified individuals (as defined in
subsection (k)(3)))'' after ``individuals''; and
(2) by adding at the end the following new
subsection:
``(k) Special Rules for Certain Expansion Individuals.--
``(1) Premiums.--Beginning October 1, 2028, the State
plan shall provide that in the case of a specified
individual (as defined in paragraph (3)) who is
eligible under the plan, no enrollment fee, premium, or
similar charge will be imposed under the plan.
``(2) Required imposition of cost sharing.--
``(A) In general.--Subject to subparagraph
(B) and subsection (j), in the case of a
specified individual, the State plan shall,
beginning October 1, 2028, provide for the
imposition of such deductions, cost sharing, or
similar charges determined appropriate by the
State (in an amount greater than $0) with
respect to medical assistance furnished to such
an individual.
``(B) Limitations.--
``(i) Exclusion of certain
services.--In no case may a deduction,
cost sharing, or similar charge be
imposed under the State plan with
respect to services described in any of
subparagraphs (B) through (J) of
subsection (a)(2) furnished to a
specified individual.
``(ii) Item and service limitation.--
``(I) In general.--Except as
provided in subclause (II), in
no case may a deduction, cost
sharing, or similar charge
imposed under the State plan
with respect to an item or
service furnished to a
specified individual exceed
$35.
``(II) Special rules for
prescription drugs.--In no case
may a deduction, cost sharing,
or similar charge imposed under
the State plan with respect to
a prescription drug furnished
to a specified individual
exceed the limit that would be
applicable under paragraph
(2)(A)(i) or (2)(B) of section
1916A(c) with respect to such
drug and individual if such
drug so furnished were subject
to cost sharing under such
section.
``(iii) Maximum limit on cost
sharing.--The total aggregate amount of
deductions, cost sharing, or similar
charges imposed under the State plan
for all individuals in the family may
not exceed 5 percent of the family
income of the family involved, as
applied on a quarterly or monthly basis
(as specified by the State).
``(C) Cases of nonpayment.--Notwithstanding
subsection (e) or any other provision of law, a
State may permit a provider participating under
the State plan to require, as a condition for
the provision of care, items, or services to a
specified individual entitled to medical
assistance under this title for such care,
items, or services, the payment of any
deductions, cost sharing, or similar charges
authorized to be imposed with respect to such
care, items, or services. Nothing in this
subparagraph shall be construed as preventing a
provider from reducing or waiving the
application of such deductions, cost sharing,
or similar charges on a case-by-case basis.
``(3) Specified individual defined.--For purposes of
this subsection, the term `specified individual' means
an individual enrolled under section
1902(a)(10)(A)(i)(VIII) who has a family income (as
determined in accordance with section 1902(e)(14)) that
exceeds the poverty line (as defined in section
2110(c)(5)) applicable to a family of the size
involved.''.
(b) Conforming Amendments.--
(1) Required application.--Section 1902(a)(14) of the
Social Security Act (42 U.S.C. 1396a(a)(14)) is amended
by inserting ``and provide for imposition of such
deductions, cost sharing, or similar charges for
medical assistance furnished to specified individuals
(as defined in paragraph (3) of section 1916(k)) in
accordance with paragraph (2) of such section'' after
``section 1916''.
(2) Nonapplicability of alternative cost sharing.--
Section 1916A(a)(1) of the Social Security Act (42
U.S.C. 1396o-1(a)(1)) is amended, in the second
sentence, by striking ``or (j)'' and inserting ``(j),
or (k)''.
PART 2--AFFORDABLE CARE ACT
SEC. 44201. ADDRESSING WASTE, FRAUD, AND ABUSE IN THE ACA EXCHANGES.
(a) Changes to Enrollment Periods for Enrolling in
Exchanges.--Section 1311 of the Patient Protection and
Affordable Care Act (42 U.S.C. 18031) is amended--
(1) in subsection (c)(6)--
(A) by striking subparagraph (A);
(B) by striking ``The Secretary'' and
inserting the following:
``(A) In general.--The Secretary'';
(C) by redesignating subparagraphs (B)
through (D) as clauses (i) through (iii),
respectively, and adjusting the margins
accordingly;
(D) in clause (i), as so redesignated, by
striking ``periods, as determined by the
Secretary for calendar years after the initial
enrollment period;'' and inserting the
following: ``periods for plans offered in the
individual market--
``(I) for enrollment for plan
years beginning before January
1, 2026, as determined by the
Secretary; and
``(II) for enrollment for
plan years beginning on or
after January 1, 2026,
beginning on November 1 and
ending on December 15 of the
preceding calendar year;'';
(E) in clause (ii), as so redesignated, by
inserting ``subject to subparagraph (B),''
before ``special enrollment periods
specified''; and
(F) by adding at the end the following new
subparagraph:
``(B) Prohibited special enrollment period.--
With respect to plan years beginning on or
after January 1, 2026, the Secretary may not
require an Exchange to provide for a special
enrollment period for an individual on the
basis of the relationship of the income of such
individual to the poverty line, other than a
special enrollment period based on a change in
circumstances or the occurrence of a specific
event.''; and
(2) in subsection (d), by adding at the end the
following new paragraphs:
``(8) Prohibited enrollment periods.--An Exchange may
not provide for, with respect to enrollment for plan
years beginning on or after January 1, 2026--
``(A) an annual open enrollment period other
than the period described in subparagraph
(A)(i) of subsection (c)(6); or
``(B) a special enrollment period described
in subparagraph (B) of such subsection.
``(9) Verification of eligibility for special
enrollment periods.--
``(A) In general.--With respect to enrollment
for plan years beginning on or after January 1,
2026, an Exchange shall verify that each
individual seeking to enroll in a qualified
health plan offered by the Exchange during a
special enrollment period selected under
subparagraph (B) is eligible to enroll during
such special enrollment period prior to
enrolling such individual in such plan.
``(B) Selected special enrollment periods.--
For purposes of subparagraph (A), an Exchange
shall select one or more special enrollment
periods for a plan year with respect to which
such Exchange shall conduct the verification
required under subparagraph (A) such that the
Exchange conducts such verification for not
less than 75 percent of all individuals
enrolling in a qualified health plan offered by
the Exchange during any special enrollment
period with respect to such plan year.''.
(b) Verifying Income for Individuals Enrolling in a Qualified
Health Plan Through an Exchange.--
(1) In general.--Section 1411(e)(4) of the Patient
Protection and Affordable Care Act (42 U.S.C.
18081(e)(4)) is amended--
(A) by redesignating subparagraph (C) as
subparagraph (E); and
(B) by inserting after subparagraph (B) the
following new subparagraphs:
``(C) Requiring verification of income and
family size when tax data is unavailable.--For
plan years beginning on or after January 1,
2026, for purposes of subparagraph (A), in the
case that the Exchange requests data from the
Secretary of the Treasury regarding an
individual's household income and the Secretary
of the Treasury does not return such data, such
information may not be verified solely on the
basis of the attestation of such individual
with respect to such household income, and the
Exchange shall take the actions described in
subparagraph (A).
``(D) Requiring verification of income in the
case of certain income discrepancies.--
``(i) In general.--Subject to clause
(iii), for plan years beginning on or
after January 1, 2026, for purposes of
subparagraph (A), in the case that a
specified income discrepancy described
in clause (ii) of this subparagraph
exists with respect to the information
provided by an applicant under
subsection (b)(3), the household income
of such individual shall be treated as
inconsistent with information in the
records maintained by persons under
subsection (c), or as not verified
under subsection (d), and the Exchange
shall take the actions described in
such subparagraph (A).
``(ii) Specified income
discrepancy.--For purposes of clause
(i), a specified income discrepancy
exists with respect to the information
provided by an applicant under
subsection (b)(3) if--
``(I) the applicant attests
to a projected annual household
income that would qualify such
applicant to be an applicable
taxpayer under section
36B(c)(1)(A) of the Internal
Revenue Code of 1986 with
respect to the taxable year
involved;
``(II) the Exchange receives
data from the Secretary of the
Treasury or the Commissioner of
Social Security, or other
reliable, third party data,
that indicates that the
household income of such
applicant is less than the
household income that would
qualify such applicant to be an
applicable taxpayer under such
section 36B(c)(1)(A) with
respect to the taxable year
involved;
``(III) such attested
projected annual household
income exceeds the income
reflected in the data described
in subclause (II) by a
reasonable threshold
established by the Exchange and
approved by the Secretary
(which shall be not less than
10 percent, and may also be a
dollar amount); and
``(IV) the Exchange has not
assessed or determined based on
the data described in subclause
(II) that the household income
of the applicant meets the
applicable income-based
eligibility standard for the
Medicaid program under title
XIX of the Social Security Act
or the State children's health
insurance program under title
XXI of such Act.
``(iii) Exclusion of certain
individuals ineligible for medicaid.--
This subparagraph shall not apply in
the case of an applicant who is an
alien lawfully present in the United
States, who is not eligible for the
Medicaid program under title XIX of the
Social Security Act by reason of such
alien status.''.
(2) Requiring individuals on whose behalf advance
payments of the premium tax credits are made to file
and reconcile on an annual basis.--Section 1412(b) of
the Patient Protection and Affordable Care Act (42
U.S.C. 18082(b)) is amended by adding at the end the
following new paragraph:
``(3) Annual requirement to file and reconcile.--
``(A) In general.--For plan years beginning
on or after January 1, 2026, in the case of an
individual with respect to whom any advance
payment of the premium tax credit allowable
under section 36B of the Internal Revenue Code
of 1986 was made under this section to the
issuer of a qualified health plan for the
relevant prior tax year, an advance
determination of eligibility for such premium
tax credit may not be made under this
subsection with respect to such individual and
such plan year if the Exchange determines,
based on information provided by the Secretary
of the Treasury, that such individual--
``(i) has not filed an income tax
return, as required under sections 6011
and 6012 of such Code (and implementing
regulations), for the relevant prior
tax year; or
``(ii) as necessary, has not
reconciled (in accordance with
subsection (f) of such section 36B) the
advance payment of the premium tax
credit made with respect to such
individual for such relevant prior tax
year.
``(B) Relevant prior tax year.--For purposes
of subparagraph (A), the term `relevant prior
tax year' means, with respect to the advance
determination of eligibility made under this
subsection with respect to an individual, the
taxable year for which tax return data would be
used for purposes of verifying the household
income and family size of such individual (as
described in section 1411(b)(3)(A)).
``(C) Preliminary attestation.--If an
individual subject to subparagraph (A) attests
that such individual has fulfilled the
requirements to file an income tax return for
the relevant prior tax year and, as necessary,
to reconcile the advance payment of the premium
tax credit made with respect to such individual
for such relevant prior tax year (as described
in clauses (i) and (ii) of such subparagraph),
the Secretary may make an initial advance
determination of eligibility with respect to
such individual and may delay for a reasonable
period (as determined by the Secretary) any
determination based on information provided by
the Secretary of the Treasury that such
individual has not fulfilled such requirements.
``(D) Notice.--If the Secretary determines
that an individual did not meet the
requirements described in subparagraph (A) with
respect to the relevant prior tax year and
notifies the Exchange of such determination,
the Exchange shall comply with the notification
requirement described in section
155.305(f)(4)(i) of title 45, Code of Federal
Regulations (as in effect with respect to plan
year 2025).''.
(3) Removing automatic extension of period to resolve
income inconsistencies.--The Secretary of Health and
Human Services shall revise section 155.315(f) of title
45, Code of Federal Regulations (or any successor
regulation), to remove paragraph (7) of such section
such that, with respect to enrollment for plan years
beginning on or after January 1, 2026, in the case that
an Exchange established under subtitle D of title I of
the Patient Protection and Affordable Care Act (42
U.S.C. 18021 et seq.) provides an individual applying
for enrollment in a qualified health plan with a 90-day
period to resolve an inconsistency in the application
of such individual pursuant to section
1411(e)(4)(A)(ii)(II) of such Act, the Exchange may not
provide for an automatic extension to such 90-day
period on the basis that such individual is required to
present satisfactory documentary evidence to verify
household income.
(c) Revising Rules on Allowable Variation in Actuarial Value
of Health Plans.--The Secretary of Health and Human Services
shall--
(1) revise section 156.140(c) of title 45, Code of
Federal Regulations (or a successor regulation), to
provide that, for plan years beginning on or after
January 1, 2026, the allowable variation in the
actuarial value of a health plan applicable under such
section shall be the allowable variation for such plan
applicable under such section for plan year 2022;
(2) revise section 156.200(b)(3) of title 45, Code of
Federal Regulations (or a successor regulation), to
provide that, for plan years beginning on or after
January 1, 2026, the requirement for a qualified health
plan issuer described in such section is that the
issuer ensures that each qualified health plan complies
with benefit design standards, as defined in section
156.20 of such title; and
(3) revise section 156.400 of title 45, Code of
Federal Regulations (or a successor regulation), to
provide that, for plan years beginning on or after
January 1, 2026, the term ``de minimis variation for a
silver plan variation'' means a minus 1 percentage
point and plus 1 percentage point allowable actuarial
value variation.
(d) Updating Premium Adjustment Percentage Methodology.--
Section 1302(c)(4) of the Patient Protection and Affordable
Care Act (42 U.S.C. 18022(c)(4)) is amended--
(1) by striking ``For purposes'' and inserting:
``(A) In general.--For purposes''; and
(2) by adding at the end the following new
subparagraph:
``(B) Update to methodology.--For calendar
years beginning with 2026, the premium
adjustment percentage under this paragraph for
such calendar year shall be determined
consistent with the methodology published in
the Federal Register on April 25, 2019 (84 Fed.
Reg. 17537 through 17541).''.
(e) Eliminating the Fixed-dollar and Gross-percentage
Thresholds Applicable to Exchange Enrollments.--The Secretary
of Health and Human Services shall revise section 155.400(g) of
title 45, Code of Federal Regulations (or a successor
regulation) to eliminate, for plan years beginning on or after
January 1, 2026, the gross premium percentage-based premium
payment threshold policy described in paragraph (2) of such
section and the fixed-dollar premium payment threshold policy
described in paragraph (3) of such section.
(f) Prohibiting Automatic Reenrollment From Bronze to Silver
Level Qualified Health Plans Offered by Exchanges.--The
Secretary of Health and Human Services shall revise section
155.335(j) of title 45, Code of Federal Regulations (or any
successor regulation) to remove paragraph (4) of such section
such that, with respect to reenrollments for plan years
beginning on or after January 1, 2026, an Exchange established
under subtitle D of title I of the Patient Protection and
Affordable Care Act (42 U.S.C. 18021 et seq.) may not reenroll
an individual who was enrolled in a bronze level qualified
health plan in a silver level qualified health plan (as such
terms are defined in section 1301(a) and described in 1302(d)
of such Act) unless otherwise permitted under section
155.335(j) of title 45, Code of Federal Regulations, as in
effect on the day before the date of the enactment of this
section.
(g) Reducing Advance Payments of Premium Tax Credits for
Certain Individuals Reenrolled in Exchanges.--Section 1412 of
the Patient Protection and Affordable Care Act (42 U.S.C.
18082) is amended--
(1) in subsection (a)(3), by inserting ``, subject to
subsection (c)(2)(C),'' after ``qualified health
plans''; and
(2) in subsection (c)(2)--
(A) in subparagraph (A), by striking ``The''
and inserting ``Subject to subparagraph (C),
the''; and
(B) by adding at the end the following new
subparagraph:
``(C) Reduction in advance payment for
specified reenrolled individuals.--
``(i) In general.--The amount of an
advance payment made under subparagraph
(A) to reduce the premium payable for a
qualified health plan that provides
coverage to a specified reenrolled
individual for an applicable month
shall be an amount equal to the amount
that would otherwise be made under such
subparagraph reduced by $5 (or such
higher amount as the Secretary
determines appropriate).
``(ii) Definitions.--In this
subparagraph:
``(I) Applicable month.--The
term `applicable month' means,
with respect to a specified
reenrolled individual, any
month during a plan year
beginning on or after January
1, 2027 (or, in the case of an
individual reenrolled in a
qualified health plan by an
Exchange established pursuant
to section 1321(c), January 1,
2026) if, prior to the first
day of such month, such
individual has failed to
confirm or update such
information as is necessary to
redetermine the eligibility of
such individual for such plan
year pursuant to section
1411(f).
``(II) Specified reenrolled
individual.--The term
`specified reenrolled
individual' means an individual
who is reenrolled in a
qualified health plan and with
respect to whom the advance
payment made under subparagraph
(A) would, without application
of any reduction under this
subparagraph, reduce the
premium payable for a qualified
health plan that provides
coverage to such an individual
to $0.''.
(h) Prohibiting Coverage of Gender Transition Procedures as
an Essential Health Benefit Under Plans Offered by Exchanges.--
(1) In general.--Section 1302(b)(2) of the Patient
Protection and Affordable Care Act (42 U.S.C.
18022(b)(2)) is amended by adding at the end the
following new subparagraph:
``(C) Gender transition procedures.--For plan
years beginning on or after January 1, 2027,
the essential health benefits defined pursuant
to paragraph (1) may not include items and
services furnished for a gender transition
procedure.''.
(2) Gender transition procedure defined.--Section
1304 of the Patient Protection and Affordable Care Act
(42 U.S.C. 18024) is amended by adding at the end the
following new subsection:
``(f) Gender Transition Procedure.--
``(1) In general.--In this title, except as provided
in paragraph (2), the term `gender transition
procedure' means, with respect to an individual, any of
the following when performed for the purpose of
intentionally changing the body of such individual
(including by disrupting the body's development,
inhibiting its natural functions, or modifying its
appearance) to no longer correspond to the individual's
sex:
``(A) Performing any surgery, including--
``(i) castration;
``(ii) sterilization;
``(iii) orchiectomy;
``(iv) scrotoplasty;
``(v) vasectomy;
``(vi) tubal ligation;
``(vii) hysterectomy;
``(viii) oophorectomy;
``(ix) ovariectomy;
``(x) metoidioplasty;
``(xi) clitoroplasty;
``(xii) reconstruction of the fixed
part of the urethra with or without a
metoidioplasty or a phalloplasty;
``(xiii) penectomy;
``(xiv) phalloplasty;
``(xv) vaginoplasty;
``(xvi) vaginectomy;
``(xvii) vulvoplasty;
``(xviii) reduction
thyrochondroplasty;
``(xix) chondrolaryngoplasty;
``(xx) mastectomy; and
``(xxi) any plastic, cosmetic, or
aesthetic surgery that feminizes or
masculinizes the facial or other body
features of an individual.
``(B) Any placement of chest implants to
create feminine breasts or any placement of
erection or testicular prosetheses.
``(C) Any placement of fat or artificial
implants in the gluteal region.
``(D) Administering, prescribing, or
dispensing to an individual medications,
including--
``(i) gonadotropin-releasing hormone
(GnRH) analogues or other puberty-
blocking drugs to stop or delay normal
puberty; and
``(ii) testosterone, estrogen, or
other androgens to an individual at
doses that are supraphysiologic than
would normally be produced endogenously
in a healthy individual of the same age
and sex.
``(2) Exception.--Paragraph (1) shall not apply to
the following:
``(A) Puberty suppression or blocking
prescription drugs for the purpose of
normalizing puberty for an individual
experiencing precocious puberty.
``(B) Medically necessary procedures or
treatments to correct for--
``(i) a medically verifiable disorder
of sex development, including--
``(I) 46,XX chromosomes with
virilization;
``(II) 46,XY chromosomes with
undervirilization; and
``(III) both ovarian and
testicular tissue;
``(ii) sex chromosome structure, sex
steroid hormone production, or sex
hormone action, if determined to be
abnormal by a physician through genetic
or biochemical testing;
``(iii) infection, disease, injury,
or disorder caused or exacerbated by a
previous procedure described in
paragraph (1), or a physical disorder,
physical injury, or physical illness
that would, as certified by a
physician, place the individual in
imminent danger of death or impairment
of a major bodily function unless the
procedure is performed, not including
procedures performed for the
alleviation of mental distress; or
``(iv) procedures to restore or
reconstruct the body of the individual
in order to correspond to the
individual's sex after one or more
previous procedures described in
paragraph (1), which may include the
removal of a pseudo phallus or breast
augmentation.
``(3) Sex.--For purposes of this subsection, the term
`sex' means either male or female, as biologically
determined and defined by subparagraph (A) and
subparagraph (B).
``(A) Female.--The term `female' means an
individual who naturally has, had, will have,
or would have, but for a developmental or
genetic anomaly or historical accident, the
reproductive system that at some point
produces, transports, and utilizes eggs for
fertilization.
``(B) Male.--The term `male' means an
individual who naturally has, had, will have,
or would have, but for a developmental or
genetic anomaly or historical accident, the
reproductive system that at some point
produces, transports, and utilizes sperm for
fertilization.''.
(i) Clarifying Lawful Presence for Purposes of the
Exchanges.--
(1) In general.--Section 1312(f) of the Patient
Protection and Affordable Care Act (42 U.S.C. 18032(f))
is amended by adding at the end the following new
paragraph:
``(4) Clarification of lawful presence.--In this
title, the term `alien lawfully present in the United
States' does not include an alien granted deferred
action under the Deferred Action for Childhood Arrivals
process pursuant to the memorandum of the Department of
Homeland Security entitled `Exercising Prosecutorial
Discretion with Respect to Individuals Who Came to the
United States as Children' issued on June 15, 2012.''.
(2) Cost-sharing reductions.--Section 1402(e)(2) of
the Patient Protection and Affordable Care Act (42
U.S.C. 18071(e)(2)) is amended by adding at the end the
following new sentence: ``For purposes of this section,
an individual shall not be treated as lawfully present
if the individual is an alien granted deferred action
under the Deferred Action for Childhood Arrivals
process pursuant to the memorandum of the Department of
Homeland Security entitled `Exercising Prosecutorial
Discretion with Respect to Individuals Who Came to the
United States as Children' issued on June 15, 2012.''.
(3) Payment prohibition.--Section 1412(d) of the
Patient Protection and Affordable Care Act (42 U.S.C.
18082(d)) is amended by adding at the end the following
new sentence: ``For purposes of the previous sentence,
an individual shall not be treated as lawfully present
if the individual is an alien granted deferred action
under the Deferred Action for Childhood Arrivals
process pursuant to the memorandum of the Department of
Homeland Security entitled `Exercising Prosecutorial
Discretion with Respect to Individuals Who Came to the
United States as Children' issued on June 15, 2012.''.
(4) Effective date.--The amendments made by this
section shall apply with respect to plan years
beginning on or after January 1, 2026.
(j) Ensuring Appropriate Application of Guaranteed Issue
Requirements in Case of Nonpayment of Past Premiums.--
(1) In general.--Section 2702 of the Public Health
Service Act (42 U.S.C. 300gg-1) is amended by adding at
the end the following new subsection:
``(e) Nonpayment of Past Premiums.--
``(1) In general.--A health insurance issuer offering
individual health insurance coverage may, to the extent
allowed under State law, deny such coverage in the case
of an individual who owes any amount for premiums for
individual health insurance coverage offered by such
issuer (or by a health insurance issuer in the same
controlled group (as defined in paragraph (3)) as such
issuer) in which such individual was previously
enrolled.
``(2) Attribution of initial premium payment to owed
amount.--A health insurance issuer offering individual
health insurance coverage may, in the case of an
individual described in paragraph (1) and to the extent
allowed under State law, attribute the initial premium
payment for such coverage applicable to such individual
to the amount owed by such individual for premiums for
individual health insurance coverage offered by such
issuer (or by a health insurance issuer in the same
controlled group as such issuer) in which such
individual was previously enrolled.
``(3) Controlled group defined.--For purposes of this
subsection, the term `controlled group' means a group
of of two or more persons that is treated as a single
employer under section 52(a), 52(b), 414(m), or 414(o)
of the Internal Revenue Code of 1986.''.
(2) Effective date.--The amendment made by paragraph
(1) shall apply with respect to plan years beginning on
or after January 1, 2026.
PART 3--IMPROVING AMERICANS' ACCESS TO CARE
SEC. 44301. EXPANDING AND CLARIFYING THE EXCLUSION FOR ORPHAN DRUGS
UNDER THE DRUG PRICE NEGOTIATION PROGRAM.
(a) In General.--Section 1192(e) of the Social Security Act
(42 U.S.C. 1320f-1(e)) is amended--
(1) in paragraph (1), by adding at the end the
following new subparagraph:
``(C) Treatment of former orphan drugs.--In
calculating the amount of time that has elapsed
with respect to the approval of a drug or
licensure of a biological product under
subparagraph (A)(ii) and subparagraph (B)(ii),
respectively, the Secretary shall not take into
account any period during which such drug or
product was a drug described in paragraph
(3)(A).''; and
(2) in paragraph (3)(A)--
(A) by striking ``only one rare disease or
condition'' and inserting ``one or more rare
diseases or conditions''; and
(B) by striking ``such disease or condition''
and inserting ``one or more rare diseases or
conditions (as such term is defined in section
526(a)(2) of the Federal Food, Drug, and
Cosmetic Act)''.
(b) Application.--The amendments made by subsection (a) shall
apply with respect to initial price applicability years (as
defined in section 1191(b) of the Social Security Act (42
U.S.C. 1320f(b))) beginning on or after January 1, 2028.
SEC. 44302. STREAMLINED ENROLLMENT PROCESS FOR ELIGIBLE OUT-OF-STATE
PROVIDERS UNDER MEDICAID AND CHIP.
(a) In General.--Section 1902(kk) of the Social Security Act
(42 U.S.C. 1396a(kk)) is amended by adding at the end the
following new paragraph:
``(10) Streamlined enrollment process for eligible
out-of-state providers.--
``(A) In general.--The State--
``(i) adopts and implements a process
to allow an eligible out-of-State
provider to enroll under the State plan
(or a waiver of such plan) to furnish
items and services to, or order,
prescribe, refer, or certify
eligibility for items and services for,
qualifying individuals without the
imposition of screening or enrollment
requirements by such State that exceed
the minimum necessary for such State to
provide payment to an eligible out-of-
State provider under such State plan
(or a waiver of such plan), such as the
provider's name and National Provider
Identifier (and such other information
specified by the Secretary); and
``(ii) provides that an eligible out-
of-State provider that enrolls as a
participating provider in the State
plan (or a waiver of such plan) through
such process shall be so enrolled for a
5-year period, unless the provider is
terminated or excluded from
participation during such period.
``(B) Definitions.--In this paragraph:
``(i) Eligible out-of-state
provider.--The term `eligible out-of-
State provider' means, with respect to
a State, a provider--
``(I) that is located in any
other State;
``(II) that--
``(aa) was determined
by the Secretary to
have a limited risk of
fraud, waste, and abuse
for purposes of
determining the level
of screening to be
conducted under section
1866(j)(2), has been so
screened under such
section 1866(j)(2), and
is enrolled in the
Medicare program under
title XVIII; or
``(bb) was determined
by the State agency
administering or
supervising the
administration of the
State plan (or a waiver
of such plan) of such
other State to have a
limited risk of fraud,
waste, and abuse for
purposes of determining
the level of screening
to be conducted under
paragraph (1) of this
subsection, has been so
screened under such
paragraph (1), and is
enrolled under such
State plan (or a waiver
of such plan); and
``(III) that has not been--
``(aa) excluded from
participation in any
Federal health care
program pursuant to
section 1128 or 1128A;
``(bb) excluded from
participation in the
State plan (or a waiver
of such plan) pursuant
to part 1002 of title
42, Code of Federal
Regulations (or any
successor regulation),
or State law; or
``(cc) terminated
from participating in a
Federal health care
program or the State
plan (or a waiver of
such plan) for a reason
described in paragraph
(8)(A).
``(ii) Qualifying individual.--The
term `qualifying individual' means an
individual under 21 years of age who is
enrolled under the State plan (or
waiver of such plan).
``(iii) State.--The term `State'
means 1 of the 50 States or the
District of Columbia.''.
(b) Conforming Amendments.--
(1) Section 1902(a)(77) of the Social Security Act
(42 U.S.C. 1396a(a)(77)) is amended by inserting
``enrollment,'' after ``screening,''.
(2) The subsection heading for section 1902(kk) of
such Act (42 U.S.C. 1396a(kk)) is amended by inserting
``Enrollment,'' after ``Screening,''.
(3) Section 2107(e)(1)(G) of such Act (42 U.S.C.
1397gg(e)(1)(G)) is amended by inserting
``enrollment,'' after ``screening,''.
(c) Effective Date.--The amendments made by this section
shall apply beginning on the date that is 4 years after the
date of enactment of this Act.
SEC. 44303. DELAYING DSH REDUCTIONS.
(a) In General.--Section 1923(f) of the Social Security Act
(42 U.S.C. 1396r-4(f)) is amended--
(1) in paragraph (7)(A)--
(A) in clause (i)--
(i) in the matter preceding subclause
(I), by striking ``2026 through 2028''
and inserting ``2029 through 2031'';
and
(ii) in subclause (II), by striking
``or period''; and
(B) in clause (ii), by striking ``2026
through 2028'' and inserting ``2029 through
2031''; and
(2) in paragraph (8), by striking ``2027'' and
inserting ``2031''.
(b) Tennessee DSH Allotment.--Section 1923(f)(6)(A)(vi) of
the Social Security Act (42 U.S.C. 1396r-4(f)(6)(A)(vi)) is
amended--
(1) in the header, by striking ``2025'' and inserting
``2028''; and
(2) by striking ``fiscal year 2025'' and inserting
``fiscal year 2028''.
SEC. 44304. MODIFYING UPDATE TO THE CONVERSION FACTOR UNDER THE
PHYSICIAN FEE SCHEDULE UNDER THE MEDICARE PROGRAM.
Section 1848(d) of the Social Security Act (42 U.S.C. 1395w-
4(d)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A)--
(i) in the first sentence, by
striking ``and ending with 2025''; and
(ii) by striking the second sentence;
and
(B) in subparagraph (D), by striking ``(or,
beginning with 2026, applicable conversion
factor)''; and
(2) by amending paragraph (20) to read as follows:
``(20) Update for 2026 and subsequent years.--The
update to the single conversion factor established in
paragraph (1)(A)--
``(A) for 2026 is 75 percent of the
Secretary's estimate of the percentage increase
in the MEI (as defined in section 1842(i)(3))
for the year; and
``(B) for 2027 and each subsequent year is 10
percent of the Secretary's estimate of the
percentage increase in the MEI for the year.''.
SEC. 44305. MODERNIZING AND ENSURING PBM ACCOUNTABILITY.
(a) In General.--
(1) Prescription drug plans.--Section 1860D-12 of the
Social Security Act (42 U.S.C. 1395w-112) is amended by
adding at the end the following new subsection:
``(h) Requirements Relating to Pharmacy Benefit Managers.--
For plan years beginning on or after January 1, 2028:
``(1) Agreements with pharmacy benefit managers.--
Each contract entered into with a PDP sponsor under
this part with respect to a prescription drug plan
offered by such sponsor shall provide that any pharmacy
benefit manager acting on behalf of such sponsor has a
written agreement with the PDP sponsor under which the
pharmacy benefit manager, and any affiliates of such
pharmacy benefit manager, as applicable, agree to meet
the following requirements:
``(A) No income other than bona fide service
fees.--
``(i) In general.--The pharmacy
benefit manager and any affiliate of
such pharmacy benefit manager shall not
derive any remuneration with respect to
any services provided on behalf of any
entity or individual, in connection
with the utilization of covered part D
drugs, from any such entity or
individual other than bona fide service
fees, subject to clauses (ii) and
(iii).
``(ii) Incentive payments.--For the
purposes of this subsection, an
incentive payment (as determined by the
Secretary) paid by a PDP sponsor to a
pharmacy benefit manager (or an
affiliate of such pharmacy benefit
manager) that is performing services on
behalf of such sponsor shall be deemed
a `bona fide service fee' (even if such
payment does not otherwise meet the
definition of such term under paragraph
(7)(B)) if such payment is a flat
dollar amount, is consistent with fair
market value (as specified by the
Secretary), is related to services
actually performed by the pharmacy
benefit manager or affiliate of such
pharmacy benefit manager, on behalf of
the PDP sponsor making such payment, in
connection with the utilization of
covered part D drugs, and meets
additional requirements, if any, as
determined appropriate by the
Secretary.
``(iii) Clarification on rebates and
discounts used to lower costs for
covered part d drugs.--Rebates,
discounts, and other price concessions
received by a pharmacy benefit manager
or an affiliate of a pharmacy benefit
manager from manufacturers, even if
such price concessions are calculated
as a percentage of a drug's price,
shall not be considered a violation of
the requirements of clause (i) if they
are fully passed through to a PDP
sponsor and are compliant with all
regulatory and subregulatory
requirements related to direct and
indirect remuneration for manufacturer
rebates under this part, including in
cases where a PDP sponsor is acting as
a pharmacy benefit manager on behalf of
a prescription drug plan offered by
such PDP sponsor.
``(iv) Evaluation of remuneration
arrangements.--Components of subsets of
remuneration arrangements (such as fees
or other forms of compensation paid to
or retained by the pharmacy benefit
manager or affiliate of such pharmacy
benefit manager), as determined
appropriate by the Secretary, between
pharmacy benefit managers or affiliates
of such pharmacy benefit managers, as
applicable, and other entities involved
in the dispensing or utilization of
covered part D drugs (including PDP
sponsors, manufacturers, pharmacies,
and other entities as determined
appropriate by the Secretary) shall be
subject to review by the Secretary, in
consultation with the Office of the
Inspector General of the Department of
Health and Human Services, as
determined appropriate by the
Secretary. The Secretary, in
consultation with the Office of the
Inspector General, shall review whether
remuneration under such arrangements is
consistent with fair market value (as
specified by the Secretary) through
reviews and assessments of such
remuneration, as determined
appropriate.
``(v) Disgorgement.--The pharmacy
benefit manager shall disgorge any
remuneration paid to such pharmacy
benefit manager or an affiliate of such
pharmacy benefit manager in violation
of this subparagraph to the PDP
sponsor.
``(vi) Additional requirements.--The
pharmacy benefit manager shall--
``(I) enter into a written
agreement with any affiliate of
such pharmacy benefit manager,
under which the affiliate shall
identify and disgorge any
remuneration described in
clause (v) to the pharmacy
benefit manager; and
``(II) attest, subject to any
requirements determined
appropriate by the Secretary,
that the pharmacy benefit
manager has entered into a
written agreement described in
subclause (I) with any relevant
affiliate of the pharmacy
benefit manager.
``(B) Transparency regarding guarantees and
cost performance evaluations.--The pharmacy
benefit manager shall--
``(i) define, interpret, and apply,
in a fully transparent and consistent
manner for purposes of calculating or
otherwise evaluating pharmacy benefit
manager performance against pricing
guarantees or similar cost performance
measurements related to rebates,
discounts, price concessions, or net
costs, terms such as--
``(I) `generic drug', in a
manner consistent with the
definition of the term under
section 423.4 of title 42, Code
of Federal Regulations, or a
successor regulation;
``(II) `brand name drug', in
a manner consistent with the
definition of the term under
section 423.4 of title 42, Code
of Federal Regulations, or a
successor regulation;
``(III) `specialty drug';
``(IV) `rebate'; and
``(V) `discount';
``(ii) identify any drugs, claims, or
price concessions excluded from any
pricing guarantee or other cost
performance measure in a clear and
consistent manner; and
``(iii) where a pricing guarantee or
other cost performance measure is based
on a pricing benchmark other than the
wholesale acquisition cost (as defined
in section 1847A(c)(6)(B)) of a drug,
calculate and provide a wholesale
acquisition cost-based equivalent to
the pricing guarantee or other cost
performance measure.
``(C) Provision of information.--
``(i) In general.--Not later than
July 1 of each year, beginning in 2028,
the pharmacy benefit manager shall
submit to the PDP sponsor, and to the
Secretary, a report, in accordance with
this subparagraph, and shall make such
report available to such sponsor at no
cost to such sponsor in a format
specified by the Secretary under
paragraph (5). Each such report shall
include, with respect to such PDP
sponsor and each plan offered by such
sponsor, the following information with
respect to the previous plan year:
``(I) A list of all drugs
covered by the plan that were
dispensed including, with
respect to each such drug--
``(aa) the brand
name, generic or non-
proprietary name, and
National Drug Code;
``(bb) the number of
plan enrollees for whom
the drug was dispensed,
the total number of
prescription claims for
the drug (including
original prescriptions
and refills, counted as
separate claims), and
the total number of
dosage units of the
drug dispensed;
``(cc) the number of
prescription claims
described in item (bb)
by each type of
dispensing channel
through which the drug
was dispensed,
including retail, mail
order, specialty
pharmacy, long term
care pharmacy, home
infusion pharmacy, or
other types of
pharmacies or
providers;
``(dd) the average
wholesale acquisition
cost, listed as cost
per day's supply, cost
per dosage unit, and
cost per typical course
of treatment (as
applicable);
``(ee) the average
wholesale price for the
drug, listed as price
per day's supply, price
per dosage unit, and
price per typical
course of treatment (as
applicable);
``(ff) the total out-
of-pocket spending by
plan enrollees on such
drug after application
of any benefits under
the plan, including
plan enrollee spending
through copayments,
coinsurance, and
deductibles;
``(gg) total rebates
paid by the
manufacturer on the
drug as reported under
the Detailed DIR Report
(or any successor
report) submitted by
such sponsor to the
Centers for Medicare &
Medicaid Services;
``(hh) all other
direct or indirect
remuneration on the
drug as reported under
the Detailed DIR Report
(or any successor
report) submitted by
such sponsor to the
Centers for Medicare &
Medicaid Services;
``(ii) the average
pharmacy reimbursement
amount paid by the plan
for the drug in the
aggregate and
disaggregated by
dispensing channel
identified in item
(cc);
``(jj) the average
National Average Drug
Acquisition Cost
(NADAC); and
``(kk) total
manufacturer-derived
revenue, inclusive of
bona fide service fees,
attributable to the
drug and retained by
the pharmacy benefit
manager and any
affiliate of such
pharmacy benefit
manager.
``(II) In the case of a
pharmacy benefit manager that
has an affiliate that is a
retail, mail order, or
specialty pharmacy, with
respect to drugs covered by
such plan that were dispensed,
the following information:
``(aa) The percentage
of total prescriptions
that were dispensed by
pharmacies that are an
affiliate of the
pharmacy benefit
manager for each drug.
``(bb) The
interquartile range of
the total combined
costs paid by the plan
and plan enrollees, per
dosage unit, per course
of treatment, per 30-
day supply, and per 90-
day supply for each
drug dispensed by
pharmacies that are not
an affiliate of the
pharmacy benefit
manager and that are
included in the
pharmacy network of
such plan.
``(cc) The
interquartile range of
the total combined
costs paid by the plan
and plan enrollees, per
dosage unit, per course
of treatment, per 30-
day supply, and per 90-
day supply for each
drug dispensed by
pharmacies that are an
affiliate of the
pharmacy benefit
manager and that are
included in the
pharmacy network of
such plan.
``(dd) The lowest
total combined cost
paid by the plan and
plan enrollees, per
dosage unit, per course
of treatment, per 30-
day supply, and per 90-
day supply, for each
drug that is available
from any pharmacy
included in the
pharmacy network of
such plan.
``(ee) The difference
between the average
acquisition cost of the
affiliate, such as a
pharmacy or other
entity that acquires
prescription drugs,
that initially acquires
the drug and the amount
reported under
subclause (I)(jj) for
each drug.
``(ff) A list
inclusive of the brand
name, generic or non-
proprietary name, and
National Drug Code of
covered part D drugs
subject to an agreement
with a covered entity
under section 340B of
the Public Health
Service Act for which
the pharmacy benefit
manager or an affiliate
of the pharmacy benefit
manager had a contract
or other arrangement
with such a covered
entity in the service
area of such plan.
``(III) Where a drug approved
under section 505(c) of the
Federal Food, Drug, and
Cosmetic Act (referred to in
this subclause as the `listed
drug') is covered by the plan,
the following information:
``(aa) A list of
currently marketed
generic drugs approved
under section 505(j) of
the Federal Food, Drug,
and Cosmetic Act
pursuant to an
application that
references such listed
drug that are not
covered by the plan,
are covered on the same
formulary tier or a
formulary tier
typically associated
with higher cost-
sharing than the listed
drug, or are subject to
utilization management
that the listed drug is
not subject to.
``(bb) The estimated
average beneficiary
cost-sharing under the
plan for a 30-day
supply of the listed
drug.
``(cc) Where a
generic drug listed
under item (aa) is on a
formulary tier
typically associated
with higher cost-
sharing than the listed
drug, the estimated
average cost-sharing
that a beneficiary
would have paid for a
30-day supply of each
of the generic drugs
described in item (aa),
had the plan provided
coverage for such drugs
on the same formulary
tier as the listed
drug.
``(dd) A written
justification for
providing more
favorable coverage of
the listed drug than
the generic drugs
described in item (aa).
``(ee) The number of
currently marketed
generic drugs approved
under section 505(j) of
the Federal Food, Drug,
and Cosmetic Act
pursuant to an
application that
references such listed
drug.
``(IV) Where a reference
product (as defined in section
351(i) of the Public Health
Service Act) is covered by the
plan, the following
information:
``(aa) A list of
currently marketed
biosimilar biological
products licensed under
section 351(k) of the
Public Health Service
Act pursuant to an
application that refers
to such reference
product that are not
covered by the plan,
are covered on the same
formulary tier or a
formulary tier
typically associated
with higher cost-
sharing than the
reference product, or
are subject to
utilization management
that the reference
product is not subject
to.
``(bb) The estimated
average beneficiary
cost-sharing under the
plan for a 30-day
supply of the reference
product.
``(cc) Where a
biosimilar biological
product listed under
item (aa) is on a
formulary tier
typically associated
with higher cost-
sharing than the
reference product, the
estimated average cost-
sharing that a
beneficiary would have
paid for a 30-day
supply of each of the
biosimilar biological
products described in
item (aa), had the plan
provided coverage for
such products on the
same formulary tier as
the reference product.
``(dd) A written
justification for
providing more
favorable coverage of
the reference product
than the biosimilar
biological product
described in item (aa).
``(ee) The number of
currently marketed
biosimilar biological
products licensed under
section 351(k) of the
Public Health Service
Act, pursuant to an
application that refers
to such reference
product.
``(V) Total gross spending on
covered part D drugs by the
plan, not net of rebates, fees,
discounts, or other direct or
indirect remuneration.
``(VI) The total amount
retained by the pharmacy
benefit manager or an affiliate
of such pharmacy benefit
manager in revenue related to
utilization of covered part D
drugs under that plan,
inclusive of bona fide service
fees.
``(VII) The total spending on
covered part D drugs net of
rebates, fees, discounts, or
other direct and indirect
remuneration by the plan.
``(VIII) An explanation of
any benefit design parameters
under such plan that encourage
plan enrollees to fill
prescriptions at pharmacies
that are an affiliate of such
pharmacy benefit manager, such
as mail and specialty home
delivery programs, and retail
and mail auto-refill programs.
``(IX) The following
information:
``(aa) A list of all
brokers, consultants,
advisors, and auditors
that receive
compensation from the
pharmacy benefit
manager or an affiliate
of such pharmacy
benefit manager for
referrals, consulting,
auditing, or other
services offered to PDP
sponsors related to
pharmacy benefit
management services.
``(bb) The amount of
compensation provided
by such pharmacy
benefit manager or
affiliate to each such
broker, consultant,
advisor, and auditor.
``(cc) The
methodology for
calculating the amount
of compensation
provided by such
pharmacy benefit
manager or affiliate,
for each such broker,
consultant, advisor,
and auditor.
``(X) A list of all
affiliates of the pharmacy
benefit manager.
``(XI) A summary document
submitted in a standardized
template developed by the
Secretary that includes such
information described in
subclauses (I) through (X).
``(ii) Written explanation of
contracts or agreements with drug
manufacturers.--
``(I) In general.--The
pharmacy benefit manager shall,
not later than 30 days after
the finalization of any
contract or agreement between
such pharmacy benefit manager
or an affiliate of such
pharmacy benefit manager and a
drug manufacturer (or
subsidiary, agent, or entity
affiliated with such drug
manufacturer) that makes
rebates, discounts, payments,
or other financial incentives
related to one or more covered
part D drugs or other
prescription drugs, as
applicable, of the manufacturer
directly or indirectly
contingent upon coverage,
formulary placement, or
utilization management
conditions on any other covered
part D drugs or other
prescription drugs, as
applicable, submit to the PDP
sponsor a written explanation
of such contract or agreement.
``(II) Requirements.--A
written explanation under
subclause (I) shall--
``(aa) include the
manufacturer subject to
the contract or
agreement, all covered
part D drugs and other
prescription drugs, as
applicable, subject to
the contract or
agreement and the
manufacturers of such
drugs, and a high-level
description of the
terms of such contract
or agreement and how
such terms apply to
such drugs; and
``(bb) be certified
by the Chief Executive
Officer, Chief
Financial Officer, or
General Counsel of such
pharmacy benefit
manager, or affiliate
of such pharmacy
benefit manager, as
applicable, or an
individual delegated
with the authority to
sign on behalf of one
of these officers, who
reports directly to the
officer.
``(III) Definition of other
prescription drugs.--For
purposes of this clause, the
term `other prescription drugs'
means prescription drugs
covered as supplemental
benefits under this part or
prescription drugs paid outside
of this part.
``(D) Audit rights.--
``(i) In general.--Not less than once
a year, at the request of the PDP
sponsor, the pharmacy benefit manager
shall allow for an audit of the
pharmacy benefit manager to ensure
compliance with all terms and
conditions under the written agreement
described in this paragraph and the
accuracy of information reported under
subparagraph (C).
``(ii) Auditor.--The PDP sponsor
shall have the right to select an
auditor. The pharmacy benefit manager
shall not impose any limitations on the
selection of such auditor.
``(iii) Provision of information.--
The pharmacy benefit manager shall make
available to such auditor all records,
data, contracts, and other information
necessary to confirm the accuracy of
information provided under subparagraph
(C), subject to reasonable restrictions
on how such information must be
reported to prevent redisclosure of
such information.
``(iv) Timing.--The pharmacy benefit
manager must provide information under
clause (iii) and other information,
data, and records relevant to the audit
to such auditor within 6 months of the
initiation of the audit and respond to
requests for additional information
from such auditor within 30 days after
the request for additional information.
``(v) Information from affiliates.--
The pharmacy benefit manager shall be
responsible for providing to such
auditor information required to be
reported under subparagraph (C) or
under clause (iii) of this subparagraph
that is owned or held by an affiliate
of such pharmacy benefit manager.
``(2) Enforcement.--
``(A) In general.--Each PDP sponsor shall--
``(i) disgorge to the Secretary any
amounts disgorged to the PDP sponsor by
a pharmacy benefit manager under
paragraph (1)(A)(v);
``(ii) require, in a written
agreement with any pharmacy benefit
manager acting on behalf of such
sponsor or affiliate of such pharmacy
benefit manager, that such pharmacy
benefit manager or affiliate reimburse
the PDP sponsor for any civil money
penalty imposed on the PDP sponsor as a
result of the failure of the pharmacy
benefit manager or affiliate to meet
the requirements of paragraph (1) that
are applicable to the pharmacy benefit
manager or affiliate under the
agreement; and
``(iii) require, in a written
agreement with any such pharmacy
benefit manager acting on behalf of
such sponsor or affiliate of such
pharmacy benefit manager, that such
pharmacy benefit manager or affiliate
be subject to punitive remedies for
breach of contract for failure to
comply with the requirements applicable
under paragraph (1).
``(B) Reporting of alleged violations.--The
Secretary shall make available and maintain a
mechanism for manufacturers, PDP sponsors,
pharmacies, and other entities that have
contractual relationships with pharmacy benefit
managers or affiliates of such pharmacy benefit
managers to report, on a confidential basis,
alleged violations of paragraph (1)(A) or
subparagraph (C).
``(C) Anti-retaliation and anti-coercion.--
Consistent with applicable Federal or State
law, a PDP sponsor shall not--
``(i) retaliate against an individual
or entity for reporting an alleged
violation under subparagraph (B); or
``(ii) coerce, intimidate, threaten,
or interfere with the ability of an
individual or entity to report any such
alleged violations.
``(3) Certification of compliance.--
``(A) In general.--Each PDP sponsor shall
furnish to the Secretary (at a time and in a
manner specified by the Secretary) an annual
certification of compliance with this
subsection, as well as such information as the
Secretary determines necessary to carry out
this subsection.
``(B) Implementation.--Notwithstanding any
other provision of law, the Secretary may
implement this paragraph by program instruction
or otherwise.
``(4) Rule of construction.--Nothing in this
subsection shall be construed as--
``(A) prohibiting flat dispensing fees or
reimbursement or payment for ingredient costs
(including customary, industry-standard
discounts directly related to drug acquisition
that are retained by pharmacies or wholesalers)
to entities that acquire or dispense
prescription drugs; or
``(B) modifying regulatory requirements or
sub-regulatory program instruction or guidance
related to pharmacy payment, reimbursement, or
dispensing fees.
``(5) Standard formats.--
``(A) In general.--Not later than June 1,
2027, the Secretary shall specify standard,
machine-readable formats for pharmacy benefit
managers to submit annual reports required
under paragraph (1)(C)(i).
``(B) Implementation.--Notwithstanding any
other provision of law, the Secretary may
implement this paragraph by program instruction
or otherwise.
``(6) Confidentiality.--
``(A) In general.--Information disclosed by a
pharmacy benefit manager, an affiliate of a
pharmacy benefit manager, a PDP sponsor, or a
pharmacy under this subsection that is not
otherwise publicly available or available for
purchase shall not be disclosed by the
Secretary or a PDP sponsor receiving the
information, except that the Secretary may
disclose the information for the following
purposes:
``(i) As the Secretary determines
necessary to carry out this part.
``(ii) To permit the Comptroller
General to review the information
provided.
``(iii) To permit the Director of the
Congressional Budget Office to review
the information provided.
``(iv) To permit the Executive
Director of the Medicare Payment
Advisory Commission to review the
information provided.
``(v) To the Attorney General for the
purposes of conducting oversight and
enforcement under this title.
``(vi) To the Inspector General of
the Department of Health and Human
Services in accordance with its
authorities under the Inspector General
Act of 1978 (section 406 of title 5,
United States Code), and other
applicable statutes.
``(B) Restriction on use of information.--The
Secretary, the Comptroller General, the
Director of the Congressional Budget Office,
and the Executive Director of the Medicare
Payment Advisory Commission shall not report on
or disclose information disclosed pursuant to
subparagraph (A) to the public in a manner that
would identify--
``(i) a specific pharmacy benefit
manager, affiliate, pharmacy,
manufacturer, wholesaler, PDP sponsor,
or plan; or
``(ii) contract prices, rebates,
discounts, or other remuneration for
specific drugs in a manner that may
allow the identification of specific
contracting parties or of such specific
drugs.
``(7) Definitions.--For purposes of this subsection:
``(A) Affiliate.--The term `affiliate' means,
with respect to any pharmacy benefit manager or
PDP sponsor, any entity that, directly or
indirectly--
``(i) owns or is owned by, controls
or is controlled by, or is otherwise
related in any ownership structure to
such pharmacy benefit manager or PDP
sponsor; or
``(ii) acts as a contractor,
principal, or agent to such pharmacy
benefit manager or PDP sponsor, insofar
as such contractor, principal, or agent
performs any of the functions described
under subparagraph (C).
``(B) Bona fide service fee.--The term `bona
fide service fee' means a fee that is
reflective of the fair market value (as
specified by the Secretary, through notice and
comment rulemaking) for a bona fide, itemized
service actually performed on behalf of an
entity, that the entity would otherwise perform
(or contract for) in the absence of the service
arrangement and that is not passed on in whole
or in part to a client or customer, whether or
not the entity takes title to the drug. Such
fee must be a flat dollar amount and shall not
be directly or indirectly based on, or
contingent upon--
``(i) drug price, such as wholesale
acquisition cost or drug benchmark
price (such as average wholesale
price);
``(ii) the amount of discounts,
rebates, fees, or other direct or
indirect remuneration with respect to
covered part D drugs dispensed to
enrollees in a prescription drug plan,
except as permitted pursuant to
paragraph (1)(A)(ii);
``(iii) coverage or formulary
placement decisions or the volume or
value of any referrals or business
generated between the parties to the
arrangement; or
``(iv) any other amounts or
methodologies prohibited by the
Secretary.
``(C) Pharmacy benefit manager.--The term
`pharmacy benefit manager' means any person or
entity that, either directly or through an
intermediary, acts as a price negotiator or
group purchaser on behalf of a PDP sponsor or
prescription drug plan, or manages the
prescription drug benefits provided by such
sponsor or plan, including the processing and
payment of claims for prescription drugs, the
performance of drug utilization review, the
processing of drug prior authorization
requests, the adjudication of appeals or
grievances related to the prescription drug
benefit, contracting with network pharmacies,
controlling the cost of covered part D drugs,
or the provision of related services. Such term
includes any person or entity that carries out
one or more of the activities described in the
preceding sentence, irrespective of whether
such person or entity calls itself a `pharmacy
benefit manager'.''.
(2) MA-PD plans.--Section 1857(f)(3) of the Social
Security Act (42 U.S.C. 1395w-27(f)(3)) is amended by
adding at the end the following new subparagraph:
``(F) Requirements relating to pharmacy
benefit managers.--For plan years beginning on
or after January 1, 2028, section 1860D-
12(h).''.
(3) Nonapplication of paperwork reduction act.--
Chapter 35 of title 44, United States Code, shall not
apply to the implementation of this subsection.
(4) Funding.--
(A) Secretary.--In addition to amounts
otherwise available, there is appropriated to
the Centers for Medicare & Medicaid Services
Program Management Account, out of any money in
the Treasury not otherwise appropriated,
$113,000,000 for fiscal year 2025, to remain
available until expended, to carry out this
subsection.
(B) OIG.--In addition to amounts otherwise
available, there is appropriated to the
Inspector General of the Department of Health
and Human Services, out of any money in the
Treasury not otherwise appropriated,
$20,000,000 for fiscal year 2025, to remain
available until expended, to carry out this
subsection.
(b) GAO Study and Report on Price-Related Compensation Across
the Supply Chain.--
(1) Study.--The Comptroller General of the United
States (in this subsection referred to as the
``Comptroller General'') shall conduct a study
describing the use of compensation and payment
structures related to a prescription drug's price
within the retail prescription drug supply chain in
part D of title XVIII of the Social Security Act (42
U.S.C. 1395w-101 et seq.). Such study shall summarize
information from Federal agencies and industry experts,
to the extent available, with respect to the following:
(A) The type, magnitude, other features (such
as the pricing benchmarks used), and prevalence
of compensation and payment structures related
to a prescription drug's price, such as
calculating fee amounts as a percentage of a
prescription drug's price, between
intermediaries in the prescription drug supply
chain, including--
(i) pharmacy benefit managers;
(ii) PDP sponsors offering
prescription drug plans and Medicare
Advantage organizations offering MA-PD
plans;
(iii) drug wholesalers;
(iv) pharmacies;
(v) manufacturers;
(vi) pharmacy services administrative
organizations;
(vii) brokers, auditors, consultants,
and other entities that--
(I) advise PDP sponsors
offering prescription drug
plans and Medicare Advantage
organizations offering MA-PD
plans regarding pharmacy
benefits; or
(II) review PDP sponsor and
Medicare Advantage organization
contracts with pharmacy benefit
managers; and
(viii) other service providers that
contract with any of the entities
described in clauses (i) through (vii)
that may use price-related compensation
and payment structures, such as rebate
aggregators (or other entities that
negotiate or process price concessions
on behalf of pharmacy benefit managers,
plan sponsors, or pharmacies).
(B) The primary business models and
compensation structures for each category of
intermediary described in subparagraph (A).
(C) Variation in price-related compensation
structures between affiliated entities (such as
entities with common ownership, either full or
partial, and subsidiary relationships) and
unaffiliated entities.
(D) Potential conflicts of interest among
contracting entities related to the use of
prescription drug price-related compensation
structures, such as the potential for fees or
other payments set as a percentage of a
prescription drug's price to advantage
formulary selection, distribution, or
purchasing of prescription drugs with higher
prices.
(E) Notable differences, if any, in the use
and level of price-based compensation
structures over time and between different
market segments, such as under part D of title
XVIII of the Social Security Act (42 U.S.C.
1395w-101 et seq.) and the Medicaid program
under title XIX of such Act (42 U.S.C. 1396 et
seq.).
(F) The effects of drug price-related
compensation structures and alternative
compensation structures on Federal health care
programs and program beneficiaries, including
with respect to cost-sharing, premiums, Federal
outlays, biosimilar and generic drug adoption
and utilization, drug shortage risks, and the
potential for fees set as a percentage of a
drug's price to advantage the formulary
selection, distribution, or purchasing of drugs
with higher prices.
(G) Other issues determined to be relevant
and appropriate by the Comptroller General.
(2) Report.--Not later than 2 years after the date of
enactment of this section, the Comptroller General
shall submit to Congress a report containing the
results of the study conducted under paragraph (1),
together with recommendations for such legislation and
administrative action as the Comptroller General
determines appropriate.
(c) MedPAC Reports on Agreements With Pharmacy Benefit
Managers With Respect to Prescription Drug Plans and MA-PD
Plans.--
(1) In general.--The Medicare Payment Advisory
Commission shall submit to Congress the following
reports:
(A) Initial report.--Not later than the first
March 15 occurring after the date that is 2
years after the date on which the Secretary
makes the data available to the Commission, a
report regarding agreements with pharmacy
benefit managers with respect to prescription
drug plans and MA-PD plans. Such report shall
include, to the extent practicable--
(i) a description of trends and
patterns, including relevant averages,
totals, and other figures for the types
of information submitted;
(ii) an analysis of any differences
in agreements and their effects on plan
enrollee out-of-pocket spending and
average pharmacy reimbursement, and
other impacts; and
(iii) any recommendations the
Commission determines appropriate.
(B) Final report.--Not later than 2 years
after the date on which the Commission submits
the initial report under subparagraph (A), a
report describing any changes with respect to
the information described in subparagraph (A)
over time, together with any recommendations
the Commission determines appropriate.
(2) Funding.--In addition to amounts otherwise
available, there is appropriated to the Medicare
Payment Advisory Commission, out of any money in the
Treasury not otherwise appropriated, $1,000,000 for
fiscal year 2026, to remain available until expended,
to carry out this subsection.
Committee Print, Title IV--Committee on Energy and Commerce, Providing
for Reconciliation Pursuant to H. Con. Res. 14
CONTENTS
Page
Purpose and Summary.............................................. 553
Background and Need for Legislation.............................. 553
Committee Action................................................. 564
Committee Votes.................................................. 564
Oversight Findings and Recommendations........................... 604
New Budget Authority, Entitlement Authority, and Tax Expenditures 604
Congressional Budget Office Estimate............................. 604
Federal Mandates Statement....................................... 605
Statement of General Performance Goals and Objectives............ 605
Duplication of Federal Programs.................................. 605
Related Committee and Subcommittee Hearings...................... 606
Committee Cost Estimate.......................................... 608
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 608
Advisory Committee Statement..................................... 608
Applicability to Legislative Branch.............................. 608
Section-by-Section Analysis of the Legislation................... 608
Minority, Additional, or Dissenting Views........................ 622
Purpose and Summary
Federal spending is unsustainably outpacing revenues, and a
revolution of common-sense reform is necessary to strengthen
and preserve our nation's fiscal independence and prosperity.
The purpose of the Committee on Energy and Commerce's budget
reconciliation legislative recommendations is to advance a
combination of common-sense deficit reduction and targeted
offsets that will support U.S. innovation, strengthen and
reform Medicaid, and end Green New Deal-Style waste.
Background and Need For Legislation
On April 10, 2025, the House of Representatives agreed to
the Senate amendment to H. Con. Res. 14, a concurrent
resolution setting forth the congressional budget for the
United States Government for fiscal year (FY) 2025, setting
forth the appropriate budgetary levels for FY 2026 through FY
2034, and providing reconciliation instructions. The resolution
included the following budget reconciliation instructions for
the Committee: The Committee on Energy and Commerce shall
submit changes in laws within its jurisdiction to reduce the
deficit by not less than $880,000,000,000 for the period of
fiscal years 2025 through 2034.
SUBTITLE A--ENERGY
Energy is essential to the nation's economy, its productive
capacity, its security, and the health and welfare of the
public. The United States is blessed with tremendous natural
resources and an economic system that fosters the free flow of
capital to support innovation and technological capabilities.
It also maintains the most sophisticated and efficient system
of energy production and delivery in the world. The vast and
complex electricity systems in this country deliver
uninterrupted power to the public, manufacturers, and industry.
These energy systems serve to provide for the affordable,
reliable energy and electric power necessary to expand
America's security and create the goods and services essential
to a modern economy, along with providing for the public
welfare.
America's shale revolution transformed the nation's energy
posture in the world and underscores the benefits of American
energy expansion. The nation has emerged as the world's number
one producer of oil and natural gas, and the number one
exporter of liquified natural gas (LNG). This status as a
leading world producer and exporter of oil and gas has brought
significant benefits to the domestic economy, U.S. energy
security, and allies overseas.
Since 2016, U.S. LNG is estimated to have contributed $408
billion to our domestic Gross Domestic Product and supports
273,000 direct, indirect, or induced jobs. Expanded U.S. LNG
exports also benefit U.S. energy security and national security
by reducing the influence of Russia and the Organization of
Petroleum Exporting Countries (OPEC) in international markets.
Russia's war on Ukraine exposed the world's vulnerability to
unstable energy suppliers, especially in Europe, emphasizing
the importance of stable, secure, and more affordable American
natural gas supplies. In the wake of Russia's invasion of
Ukraine, U.S. LNG replaced upwards of 50 percent of Russian
natural gas importations into European nations.\1\
---------------------------------------------------------------------------
\1\See, e.g., Daniel Yergin, Ph.D. et al., Major New US Industry at
a Crossroads: A US LNG Impact Study--Phase 1, S&P Global, December 17,
2024, https://www.spglobal.com/en/research-insights/special-reports/
major-new-us-industry-at-a-crossroads-us-lng-impact-study-phase-1.
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Energy exploration and production provide immense economic
benefits to states and local municipalities where royalties and
associated taxes provide funding for public resources such as
schools, firefighters, public safety officials, and other
activities to the benefit of local communities. For example,
the members of the Texas Oil and Natural Gas Association paid
$27.3 billion in state and local taxes and state royalties in
2024.\2\
---------------------------------------------------------------------------
\2\See, e.g., 2024 Annual Energy & Economic Impact Report, Texas
Oil & Gas Association, January 7, 2025, https://www.txoga.org/2024eeir/
#::text=TXOGA%20Annual%20
Energy%20%26%20Economic%20Impact,High%20by%20Almost%20%241%20Billion.
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Oil and natural gas account for about 74 percent of the
primary energy sources consumed in the U.S. every year, with
natural gas accounting for some 43 percent of electric power
generation, according to the U.S. Energy Information
Administration.\3\ Natural gas provides the largest share of
baseload and dispatchable electric power generation. This share
has increased as various state and federal policies have led to
the shut-down of baseload and dispatchable generation over the
past decade, a trend that accelerated in recent years,
particularly for coal-fired generation.\4\
---------------------------------------------------------------------------
\3\See U.S. Energy Facts Explained, U.S. Energy Information
Administration, last updated July 15, 2024, https://www.eia.gov/
energyexplained/us-energy-facts/.
\4\See Electric Power Sector Has Driven Rising Pennsylvania Natural
Gas Consumption Since 2013, U.S. Energy Information Administration,
January 29, 2025, https://www.eia.gov/todayinenergy/
detail.php?id=64424&utm_medium=email.
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Meanwhile, after years of minimal growth, electricity
demand in the United States is projected to grow nationally at
a significant rate through the end of the decade.\5\ Over the
past several decades, the electric grid experienced modest
demand for electric power, averaging about 0.5 percent growth
per year since 2015; however, recent estimates show annual
growth rate ranging between 3.7 percent to 15 percent by
2030.\6\ Much of this growth is expected to come from
industrial facilities and data centers powering the increasing
use of AI. By the end of the decade, data centers that are
driving increases in electricity demand could consume as much
as 9.1 percent of all electricity in the United States.\7\
---------------------------------------------------------------------------
\5\Electricity 2024, International Energy Agency (May 2024),
https://www.iea.org/reports/electricity-2024/executive-summary; John D.
Wilson and Zach Zimmerman, The Era of Flat Power Demand is Over, Grid
Strategies (Dec. 2023), https://gridstrategiesllc.com/wp-content/
uploads/2023/12/National-Load-Growth-Report-2023.pdf; Robert Walton, US
Electricity Load Growth Forecast jumps 81% Led by Data Centers,
Industry: Grid Strategies, Utility Dive (Dec. 13, 2023), https://
www.utilitydive.com/news/electricity-load-growing-twice-as-fast-as-
expected-Grid-Strategies-report/702366/; US Power Use to Reach Record
Highs in 2024 and 2025--EIA, Reuters (Feb. 6, 2024), https://
www.reuters.com/world/us/us-power-use-reach-record-highs-2024-2025-eia-
2024-02-06/.
\6\Electric Power Research Institute (EPRI)., Powering
Intelligence: Analyzing Artificial Intelligence and Data Center Energy
Consumption (May 2024), https://www.epri.com/research/products/
3002028905.
\7\Id.
---------------------------------------------------------------------------
Projections for a surge in demand for reliable power for AI
come at a time when the North American Electric Reliability
Corporation (NERC) has repeatedly raised concerns over the
adequacy and reliability of the grid. These concerns with the
U.S. grid are due to a confluence of factors that have forced
premature retirements of reliable generation without adequate
replacement generation and electric infrastructure. The head of
the NERC stated he believes the United States is headed for a
reliability crisis.\8\
---------------------------------------------------------------------------
\8\The Reliability and Resiliency of Electric Service in the United
States in Light of Recent Reliability Assessments and Alerts: Hearing
Before the Senate Comm. on Energy and Natural Resources, 118th Cong.
(2023) (statement of James B. Robb, President and CEO of the North
American Electric Reliability Corporation).
---------------------------------------------------------------------------
While much of the new generation seeking interconnection to
the bulk power system consists of wind and solar, these
intermittent resources cannot meet the reliability needs of
high-tech manufacturing and data centers on their own as they
are not a one-to-one replacement of existing non-intermittent,
dispatchable resources like coal, natural gas, hydropower or
nuclear.
SUBTITLE B--ENVIRONMENT
Since 2022, the cost, effectiveness, and implementation of
provisions in the Inflation Reduction Act (IRA) have been
called into question. The climate and energy provisions in the
2022 Inflation Reduction Act (IRA) will significantly increase
the deficit, far more than originally anticipated. Updated
projections of the IRA estimate the cost of climate and energy
provisions have ballooned from the projected $384.9 billion to
$1.045 trillion.\9\ The University of Pennsylvania's Wharton
School updated its budget estimate of the IRA's climate and
energy provisions, from $384.9 billion between 2022-2031 to
$1,045 billion for the same period. Goldman Sachs estimated
that the IRA ``will provide an estimated $1.2 trillion of
[climate-related] incentives by 2032.''\10\
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\9\Penn Wharton Business Model, ``Update: Budgetary Cost of Climate
and energy provisions in the Inflation Reduction Act,'' April 27, 2023,
https://budgetmodel.wharton.upenn.edu/estimates/2023/4/27/update-cost-
climate-and-energy-inflation-reduction-act (accessed May 12, 2025).
\10\Goldman Sachs, ``The US Is Poised for an Energy Revolution,''
April 17, 2023. https://www.goldmansachs.com/intelligence/pages/the-us-
is-poised-for-an-energy-revolution.html (accessed May 12, 2025).
---------------------------------------------------------------------------
In recent years, investigations and non-partisan sources
have raised concerns about implementation of the IRA's funding
programs. Offices of the Inspector General (OIG) at several
agencies have warned that the IRA provisions have increased
risks of waste, fraud, and abuse.\11\
---------------------------------------------------------------------------
\11\See, Office of the Inspector Gen., Envt'l Prot. Agency, Report
No. 24N-0008, The EPA's Fiscal Year 2024 Top Management Challenges 27
(2023); E&C O&I Spending Oversight Hearing, supra note 5, at 53
(statement of Teri Donaldson, Inspector Gen., Dep't of Energy).
---------------------------------------------------------------------------
The Committee has monitored EPA's efforts to implement the
IRA's grant programs including through hearings and letters
requesting information from EPA.\12\ At a March 29, 2023,
hearing before the Subcommittee on Oversight and
Investigations, EPA Inspector General Sean O'Donnell provided
testimony regarding risks surrounding EPA's new Office of
Environmental Justice and External Civil Rights administering a
large amount of funding and potentially bypassing important
internal controls.\13\ Additionally, the Subcommittee on
Environment, Manufacturing, and Critical Materials held a
September 19, 2024, hearing at which the Inspector General
provided testimony regarding EPA's challenges managing IRA
grant programs.\14\
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\12\Letter from Cathy McMorris Rodgers, Chair, H Comm. on Energy
and Commerce, et al., to Michael Regan, Adm'r, Envtl. Prot. Agency
(Mar. 28, 2023); Letter from Cathy McMorris Rodgers, Chair, H. Comm. on
Energy and Commerce, and Buddy Carter, Chair, Subcomm. on Env't, Mfg.,
and Critical Materials, to Michael Regan, Adm'r, Envtl. Prot. Agency
(May 8, 2024).
\13\Follow the Money: Oversight of President Biden's Massive
Spending Spree: Hearing Before the Subcomm. on Oversight and
Investigations of the H. Comm. on Energy and Commerce, 118th Cong.
(2023) (statement of Sean O'Donnell, Inspector Gen., Envtl. Prot.
Agency).
\14\Holding the Biden-Harris EPA Accountable for Radical Rush-to-
Green Spending: Hearing Before the Subcomm. on Subcomm. on Envt., Mfg.,
and Critical Materials, 118th Cong. (2024)
---------------------------------------------------------------------------
In November 2024, Committee majority staff released a
report providing examples of EPA using grant programs funded
under this provision to select activist organizations with
clear political leanings and public policy agendas to receive
funding.\15\ Finally, Members of the Committee further
discussed concerns with EPA's IRA grant programs at a February
26, 2025, hearing before the Subcommittee on Oversight and
Investigations.\16\
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\15\Staff Report, H. Comm. on Energy and Commerce, Majority Staff:
Exposing the Green Group Giveaway Behind the Biden-Harris Environmental
Justice Programs.
\16\Examining the Biden Administration's Energy and Environment
Spending Push: Hearing Before the Subcomm. on Oversight and
Investigations of the H. Comm. on Energy and Commerce, 119th Cong.
(2025).
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Subtitle B would decrease the federal deficit by
approximately $104,934 as a result of repealing authorizations
and rescinding unobligated funds that were appropriated to the
U.S. Environmental Protection Agency (EPA) under the Inflation
Reduction Act, Public Law 117-169, and repealing EPA's final
rule relating to ``Multi-Pollutant Emissions Standards for
Model Years 2027 and Later Light-Duty and Medium-Duty
Vehicles,'' (89 Fed. Reg. 27842), and repealing the National
Highway Traffic Safety Administration's final rule relating to
``Corporate Average Fuel Economy Standards for Passenger Cars
and Light Trucks for Model Years 2027 and Beyond and Fuel
Efficiency Standards for Heavy-Duty Pickup Trucks and Vans for
Model Years 2030 and Beyond,'' (89 Fed. Reg. 52540).
The IRA appropriated EPA $41.456 billion--more than four
times the amount that Congress appropriated to EPA in fiscal
year 2021. The IRA funding was allocated across 17 EPA
programs--seven of which were authorized for the first time as
a result of IRA amendments to the Clean Air Act, 42 U.S.C.
7401, et seq. These newly authorized programs included the
establishment of the Clean Heavy-Duty Vehicle grant program,
which was created through a new section 132 of the Clean Air
Act and appropriated $1 billion, 42 U.S.C. 7432; the Greenhouse
Gas Reduction Fund, which was created through a new section 134
of the Clean Air Act and appropriated $27 billion, 42 U.S.C.
7434; the Methane Emissions and Waste Reduction Incentive
Program for Petroleum and Natural Gas Systems, which was
created through a new section 136 of the Clean Air Act and
appropriated $1.55 billion, 42 U.S.C. 7436; and the
Environmental and Climate Justice Block Grant program, which
was established through a new section 138 of the Clean Air Act
and appropriated $3 billion, 42 U.S.C. 7438. Other provisions
of the IRA increased appropriated amounts for existing EPA
programs, including $235.5 million for air pollution reduction
and monitoring activities and $350 million for carbon labeling
and product declaration programs under the Clean Air Act.
On March 30, 2023, the EPA Office of Inspector General
issued a memorandum entitled, ``Management Implication Report:
Mitigation of Grant Fraud Vulnerabilities,'' noting the IRA
created several new programs and that ``Proper oversight of
funding recipients has always been critical to ensure proper
stewardship of taxpayer dollars. The importance of such
oversight has increased in light of the [Infrastructure
Investment and Jobs Act] and the IRA. We are issuing this
report to inform the Agency of certain issues related to the
awarding and disbursement of grants, as well as to provide
considerations for the Agency to strengthen its grant-funding
mechanisms.''
This Subtitle repeals the authorizations and unobligated
balances of funds made available to EPA under the IRA. This
Subtitle does not alter, amend, or rescind EPA's other legal
authorities or appropriated dollars other than those that were
included in the IRA.
In 2024, the Committee for a Responsible Federal Budget
estimated that EPA's proposed vehicle emissions rule would
increase the federal deficit by $280 billion through 2033, if
finalized. This Subtitle also repeals EPA's final rule relating
to ``Multi-Pollutant Emissions Standards for Model Years 2027
and Later Light-Duty and Medium-Duty Vehicles,'' (89 Fed. Reg.
27842), and the companion National Highway Traffic Safety
Administration's final rule relating to ``Corporate Average
Fuel Economy Standards for Passenger Cars and Light Trucks for
Model Years 2027 and Beyond and Fuel Efficiency Standards for
Heavy-Duty Pickup Trucks and Vans for Model Years 2030 and
Beyond,'' (89 Fed. Reg. 52540).
SUBTITLE C--COMMUNICATIONS
Spectrum resources are vital for the United States economy
and have raised over $230 billion since 1993.\17\ The NTIA and
the FCC are the two agencies tasked by Congress to oversee and
manage our nation's spectrum resources--a finite natural
resource.\18\ NTIA manages federal spectrum allocations as many
Federal agencies use spectrum to perform vital operations,
including the Department of Defense, the Department of
Transportation, the National Aeronautics and Space
Administration, and the National Oceanic and Atmospheric
Administration.\19\ The FCC is responsible for overseeing the
non-Federal use of spectrum, including commercial usage.\20\
---------------------------------------------------------------------------
\17\Patricia Moloney Figliola, Cong. Rsch. Serv., R45699, The
Federal Communications Commission: Structure, Operations, and Budget at
6 (2025), https://crs.gov/reports/pdf/R45699/R45699.pdf.
\18\National Telecommunications and Information Administration
Organization Act, 47 U.S.C. Sec. 901 et seq.; Communications Act of
1934, 47 U.S.C. Sec. 151 et seq.
\19\Office of Spectrum Management, NTIA, https://www.ntia.gov/
programs-and-initiatives/spectrum-management.
\20\47 U.S.C. Sec. 301.
---------------------------------------------------------------------------
The FCC, in collaboration with NTIA on federal spectrum
bands, has made spectrum frequencies available for next-
generation wireless technology use. For the United States to
stay a global leader in the deployment of future wireless
technologies, the FCC will need to make additional spectrum
available, particularly mid-band spectrum, for commercial use.
On November 13, 2023, the White House released a National
Spectrum Strategy and on March 12, 2024, NTIA released the
National Spectrum Strategy Implementation Plan.\21\ Through
this strategy, the U.S. government began the process of
studying federal spectrum bands that could be made available
for commercial use, and those processes are ongoing. NTIA is
working with federal licensees through the interagency process
to solicit their feedback on those bands.
---------------------------------------------------------------------------
\21\Office of Spectrum Management, NTIA, https://www.ntia.gov/
sites/default/files/publications/national-spectrum-strategy-
implementation-plan.pdf.
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The FCC has had the authority to auction licenses for
spectrum use since Congress passed the Omnibus Budget
Reconciliation Act in 1993 and has been conducting spectrum
auctions since 1994. However, this authority expired for the
first time on March 9, 2023, limiting the ability of the FCC to
conduct spectrum auctions and raise revenue for the U.S.
Treasury. This legislation would reauthorize the FCC's
authority to conduct auctions through September 30, 2034, and
the auctions conducted during that timeframe are expected to
raise $88 billion in revenue for the Treasury through spectrum
auction proceeds.
Subtitle C, Part 1 would generate approximately $88 billion
in revenue to the United States Treasury in spectrum auction
proceeds through reauthorizing the Federal Communications
Commission's (FCC) spectrum auction authority through September
30, 2034 and directing at least 600 megahertz (MHz) of spectrum
to be identified and auctioned. The FCC and the National
Telecommunications and Information Administration (NTIA) would
be required to identify at least 600 MHz of federal and
commercial spectrum to be identified for auction. Of the 600
MHz identified, at least 200 megahertz would be required to be
auctioned within three years of enactment, and the remaining
identified spectrum would be required to be auctioned within
six years of enactment. Finally, the bill excludes the 3.1-3.45
GHz and 5.925-7.125 GHz frequencies from being identified as
part of the 600 MHz target.
This legislation requires at least 600 megahertz of
spectrum to be identified and auctioned before September 30,
2034. While the legislation excludes certain frequencies, the
Committee also directs that the frequencies between 7.25 GHz-
8.4 GHz to be excluded from the 600 megahertz requirement. The
Committee expects that in identifying the 600 megahertz for
auction, the FCC and NTIA will work through the current
processes for identifying and reallocating spectrum as required
by current law.
As artificial intelligence (AI) rapidly evolves, it
presents significant opportunities for the United States,
including for government efficiency. This legislation proposes
a $500 million investment in modernizing the Department of
Commerce's information technology systems with commercial AI
and automation technologies. The federal government's
information technology systems are severely outdated, operating
several generations behind state-of-the-art commercial
systems.\22\ This technological gap has hindered the
effectiveness of government operations, service delivery, and
cybersecurity, leaving federal departments, such as the
Department of Commerce, ill-equipped to compete in a rapidly
advancing technological landscape. As the U.S. faces increasing
global competition, particularly from China in the realm of AI,
the need for modernization is urgent.\23\
---------------------------------------------------------------------------
\22\https://www.gao.gov/blog/federal-efforts-update-old-it-are-
years-behind-schedule-we-looked-impacts-delays.
\23\https://www.wilsoncenter.org/article/americas-ai-strategy-
playing-defense-while-china-plays-win.
---------------------------------------------------------------------------
This legislation also institutes a 10-year moratorium on
state-level AI regulations to ensure the Department of Commerce
can continue to access AI technologies moving forward.
Premature or overly restrictive laws could stifle technological
progress, particularly for startups and small businesses that
are essential to driving growth and innovation in this
space.\24\ A patchwork of state-by-state AI regulations is
emerging, with over 1,000 AI-related bills introduced in 2025
alone, creating barriers to entry and creating compliance
burdens for incumbents.\25\ The result of this patchwork may be
fewer technological innovations and higher costs for federal
agencies seeking to acquire AI. By pausing state-specific AI
laws, Congress can ensure that the Department of Commerce, as
well as other federal agencies, will have access to commercial
AI systems moving forward.\26\
---------------------------------------------------------------------------
\24\https://datainnovation.org/2025/05/congress-should-preempt-
onslaught-of-state-ai-laws/.
\25\https://www.lawfaremedia.org/article/1-000-ai-bills--time-for-
congress-to-get-serious-about-preemption.
\26\https://www.rstreet.org/outreach/comments-of-r-street-
institute-on-a-learning-period-moratorium-for-ai-regulation-in-
response-to-request-for-information-rfi-exploring-a-data-privacy-and-
security-framework/.
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Subtitle C, Part 2 establishes the Artificial Intelligence
and Information Technology Modernization Initiative within the
Department of Commerce. The bill appropriates $500 million for
fiscal year 2025, to remain available through September 30,
2035, to support the replacement of legacy IT systems, the
deployment of commercial artificial intelligence and automation
technologies, and the enhancement of federal cybersecurity
infrastructure. In addition, the legislation imposes a 10-year
moratorium on most state and local regulations affecting
artificial intelligence and automated decision systems, with
limited exceptions, to ensure regulatory consistency and
promote innovation during the modernization process.
SUBTITLE D--HEALTH
According to National Health Expenditure (NHE) projections,
American health care expenditures grew 7.5 percent to $4.9
trillion in 2023, comprising 17.6 percent of U.S. Gross
Domestic Product (GDP). The health care system's unsustainable
growth is projected to continue--NHE projections estimated that
over the course of 2023 to 2032, average NHE growth will
outpace average GDP growth.\27\ Past policies have failed to
lower health care costs, jeopardizing safety net programs on
which millions of Americans rely.
---------------------------------------------------------------------------
\27\Centers for Medicare and Medicaid Services (CMS), NHE Fact
Sheet, (Jan. 18, 2024), https://www.cms.gov/data-research/statistics-
trends-and-reports/national-health-expenditure-data/nhe-fact-sheet.
---------------------------------------------------------------------------
The Medicaid program is jointly financed and administered
by the federal government and state programs. According to the
Congressional Budget Office (CBO), in fiscal year 2024, federal
outlays for the Medicaid program were $618 billion. CBO
projects that federal spending on Medicaid will exceed a
staggering $1 trillion by 2035, reaching parity with CBO's
projection of what the Federal government will spend on
national defense.\28\
---------------------------------------------------------------------------
\28\CBO, The Budget and Economic Outlook: 2025 to 2035, (Jan.
2025), https://www.cbo.gov/system/files/2025-01/60870-Outlook-2025.pdf.
---------------------------------------------------------------------------
The Affordable Care Act (ACA) established federal and state
individual and small business health exchanges. Health plans
offering coverage on ACA exchanges receive federal subsidies,
largely in the form of advance premium tax credits. According
to CBO and Joint Committee on Taxation (JCT) joint projections,
ACA marketplace and Basic Health Program subsidies are
projected to expand to $1.1 trillion over the 2024 to 2033
budgetary window.\29\
---------------------------------------------------------------------------
\29\CBO, Federal Subsidies for Health Insurance: 2023 to 2033,
(Sept. 28, 2023), https://www.cbo.gov/publication/59273.
---------------------------------------------------------------------------
CBO's January 2025 baseline update illustrated the burden
the Medicaid program is under. Technical changes increased
CBO's 2025 estimate of Medicaid spending by $57 billion, or 10
percent, and their estimate of the program's spending over the
budget window by $817 billion, or 12 percent.\30\ This is
further reflected by analysis from the National Association of
State Budget Officers (NASBO), who found that state Medicaid
spending is estimated to have grown 5.3 percent in fiscal year
2024, representing the ``largest category of total state
expenditures'' at 29.8 percent.\31\
---------------------------------------------------------------------------
\30\Id.
\31\NASBO, 2024 State Expenditure Report, Executive Summary,
https://higherlogicdownload.s3.amazonaws.com/NASBO/9d2d2db1-c943-4f1b-
b750-0fca152d64c2/UploadedImages/SER%20Archive/2024_SER/
Executive_Summary-2024_State_Expenditure.pdf.
---------------------------------------------------------------------------
Ultimately, individuals' access to care in Medicaid is
inextricably linked to the costs of the program for the Federal
government and States. The growth in total Medicaid spending
and enrollment is a growing concern as it impedes the program's
ability to provide care for those vulnerable populations who
rely most on Medicaid. These challenges are exacerbated by
waste, fraud, and abuse in state Medicaid programs. The
Government Accountability Office's (GAO) 2025 High-Risk List
again identified Medicaid program integrity as an area in which
the ``Centers for Medicare & Medicaid Services (CMS) needs to
reduce billions in Medicaid improper payments, ensure the
appropriate use of program dollars, and improve the quality of
program data to better manage quality of care and efficiency of
payments for services.''\32\
---------------------------------------------------------------------------
\32\GAO, High-Risk Series: Heightened Attention Could Save Billions
More and Improve Government Efficiency and Effectiveness, GAO-25-107743
(Feb. 2025), https://www.gao.gov/assets/gao-25-107743.pdf.
---------------------------------------------------------------------------
For state Medicaid programs to run as efficiently and
effectively as possible, the integrity of federal-state
Medicaid financing must be maintained. To do so, Congress must
first address deficiencies in enrollment processes that
encourage fraud and ineligible individuals to enroll in the
program. For example, Congress must roll back rules promulgated
by the Biden Administration that will tie states' hands from
effectively managing their Medicaid programs. Moreover,
Congress must take steps to reduce spending on ineligible
enrollees--this includes taking action to prevent beneficiaries
from being enrolled in multiple State programs, remove deceased
beneficiaries from Medicaid, and ensure that Federal Medicaid
dollars only fund enrollees whose citizenship, nationality, or
immigration status has been verified.
Next, Congress must address excess waste in the program.
The Biden Administration finalized an untenable nursing home
staffing mandate for Medicare and Medicaid that will do little
to improve quality for beneficiaries. Congress must address
Medicaid waste by also holding pharmacy benefit managers (PBM)
accountable and modernizing retroactive coverage standards to
prevent adverse selection and reduce unexpected costs for the
federal government and state programs.
Additionally, Congress must tackle abusive financing
practices and misaligned incentives like provider taxes that
allow states to shift back to the federal government the cost
of financing their share of Medicaid spending. While current
law requires that these taxes be broad-based, uniform, and
redistributive, hold harmless arrangements are used to allow
states to draw down federal dollars without ever contributing
additional funding. According to GAO, ``states' reliance on
provider tax and local government funds, decreased states'
share of new Medicaid payments . . . and effectively increased
the federal share of net Medicaid payments by 5 percentage
points in state fiscal year 2018.''\33\
---------------------------------------------------------------------------
\33\GAO, Medicaid: CMS Needs More Information on States' Financing
and Payment Arrangements to Improve Oversight, GAO-21-98 (Dec. 2020),
https://www.gao.gov/assets/gao-21-98.pdf.
---------------------------------------------------------------------------
Moreover, states are increasingly utilizing these provider
taxes to fund expansions of state-directed payments (SDP).
SDPs, a form of supplemental payments created by CMS in 2016,
arose as more enrollees shifted into managed care organization
(MCO) arrangements. Spending on these payments continues to
grow, and regulatory changes during President Biden's
administration permitted directed payments to reach as high as
the average commercial rate.\34\ The Medicaid and CHIP Payment
and Access Commission (MACPAC) estimated that directed payments
would exceed $69 billion in 2023, while CMS projects that
directed payments will exceed $125 billion in 2033.\35\
---------------------------------------------------------------------------
\34\7 C.F.R. Sec. 438.6(c)(2)(iii), (2024), https://www.ecfr.gov/
current/title-42/chapter-IV/subchapter-C/part-438/subpart-A/section-
438.6.
\35\MACPAC, Directed Payments in Medicaid Managed Care, Issue Brief
(Oct. 2024), https://www.macpac.gov/wp-content/uploads/2024/10/
Directed-Payments-in-Medicaid-Managed-Care.pdf; GAO, Medicaid Managed
Care: Rapid Spending Growth in State Directed Payments Needs Enhanced
Oversight and Transparency, GAO-24-106202 (Dec. 2023), https://
www.gao.gov/assets/gao-24-106202.pdf.
---------------------------------------------------------------------------
Finally, Congress must increase personal accountability for
the Medicaid Expansion population. Health care and work are
linked in this country--roughly half of all Americans receive
employer-sponsored insurance through their job; eligibility for
the ACA's marketplaces is contingent on having an income;
Medicare beneficiaries are only eligible for the program
because they worked and paid into the system; and service
members and veterans get their health care because of their
work in service to our country. By establishing community
engagement requirements for able-bodied adults, Congress will
promote the dignity of work and recognize the value of
beneficiaries' engagement with their communities.
Congress must also provide the same attention to waste,
fraud, and abuse in the marketplaces established by the ACA.
According to NHE data, coverage in the marketplaces reached
16.2 million in 2023 with expenditures totaling $115
billion.\36\ Regulatory actions pursued by the Biden
Administration weakened commonsense enrollment and eligibility
safeguards in the marketplaces, which has led to program
integrity concerns, market distortions, and billions of dollars
in additional costs to federal taxpayers.
---------------------------------------------------------------------------
\36\CMS, supra note 1.
---------------------------------------------------------------------------
These program integrity issues have a direct effect on
consumers seeking or maintaining coverage. Between January and
August 2024, CMS received over 183,000 complaints that
consumers were enrolled in coverage through an exchange on the
federal platform without their consent (also known as
unauthorized enrollment).\37\ From June 2024 to October 2024,
CMS also suspended 850 agents and brokers' ACA Marketplace
Agreements for reasonable suspicion of fraudulent or abusive
conduct related to unauthorized enrollments or unauthorized
plan switches. These bad actor brokers would allegedly enroll
people without their consent to collect commission payments;
switch people to different plans or agents without notifying
the enrollee; or split households into multiple plans to
inflate commissions.\38\ These are just a few examples
demonstrating the strain the marketplaces are under and the
need to restore programmatic guardrails to protect consumers
and federal taxpayers.
---------------------------------------------------------------------------
\37\CMS, CMS Update on Actions to Prevent Unauthorized Agent and
Broker Marketplace Activity, Press Release (Oct. 17, 2024), https://
www.cms.gov/newsroom/press-releases/cms-update-actions-prevent-
unauthorized-agent-and-broker-marketplace-activity.
\38\Department of Health and Human Services, Patient Protection and
Affordable Care Act; Marketplace Integrity and Affordability, 90 Fed.
Reg. 12942 (proposed Mar. 19, 2025), https://www.federalregister.gov/d/
2025-04083/p-383.
---------------------------------------------------------------------------
The growing aging population and growing Medicare
expenditures also necessitate action to protect the long-term
fiscal health of the program and promote access to high-
quality, affordable health care for seniors. Seniors are
consistently seeing their drug costs rise, which is evidenced
by recent data published by the nonpartisan Government
Accountability Office, which examines the correlation between
rebates and beneficiary drug spending in Medicare. This data
showed how rebates affect formulary design and patients' costs
for medicines. Specifically, a 2023 report by GAO analyzing a
sample of highly rebated drugs in Medicare Part D found that
``drugs with higher gross costs generally result in higher
beneficiary payments relative to payments for competing drugs
with lower gross costs.'' Of the 100 highest rebated drugs in
Part D in 2021, beneficiaries paid more than the plan sponsor
for 79 of those medicines once rebates were factored in.
Patients spent over $20 billion for these drugs, while plan
sponsors spent just over $5 billion.\39\ More independent
analysis underscores these findings, showing that for every $1
increase in rebates, list prices on prescription medications
increased by $1.17.\40\
---------------------------------------------------------------------------
\39\GAO, Medicare Part D: CMS Should Monitor Effects of Rebates on
Drug Coverage and Spending, GAO-23-107056 (Sept. 19, 2023), https://
www.gao.gov/assets/gao-23-107056.pdf.
\40\Neeraj Sood, PhD, et al., The Association Between Drug Rebates
and List Prices, USC Schaeffer (Feb. 11, 2020), https://
schaeffer.usc.edu/research/the-association-between-drug-rebates-and-
list-prices/.
---------------------------------------------------------------------------
Seniors are also losing access to more cost-effective
generic medications that are equally as effective clinically as
their reference product. More data shows how generic
medications have been increasingly placed on non-preferred drug
formularies in Medicare Part D, leading to higher out-of-pocket
spending for cheaper medications. In 2022, almost 60 percent of
generic drugs were placed on non-generic drug tiers by Part D
plan sponsors.\41\
---------------------------------------------------------------------------
\41\Avalere Health Advisory, 57% of Generic Drugs Are Not on 2022
Part D Generic Tiers, (Jan. 24, 2022), https://
advisory.avalerehealth.com/insights/57-of-generic-drugs-are-not-on-
2022-part-d-generic-tiers.
---------------------------------------------------------------------------
The policy in the underlying bill would address the rising
costs of prescription medications for seniors in Medicare
through pharmacy benefit manager reforms. Specifically, these
reforms prohibit PBM compensation from being based on list
price or other factors relating to formulary placement. The
policy also imposes new transparency requirements for PBMs in
Medicare Part D by requiring these entities to submit to the
Centers for Medicare and Medicaid Services as well as Part D
plan sponsors information relating to formulary placement
decisions, drug dispensing data, and relationships with
affiliated pharmacies.
The Medicare Payment Advisory Commission (MedPAC) has also
recently studied the rates at which physicians in Medicare are
reimbursed for services provided to beneficiaries. The
nonpartisan commission specifically expressed concern relating
to physician reimbursements in Medicare failing to keep pace
with the rising costs of providing care to beneficiaries and
the concomitant impacts these lagging reimbursement rates may
have on seniors' ability to access care.\42\
---------------------------------------------------------------------------
\42\MedPAC, Medicare and the Health Care Delivery System, Report to
the Congress (June 2024), https://www.medpac.gov/wp-content/uploads/
2024/06/Jun24_MedPAC_Report_To_
Congress_SEC.pdf.
---------------------------------------------------------------------------
The Committee shares these concerns and is furthermore
concerned with the increased consolidation in the health care
system, part of which is driven by physician burnout and
reimbursement rates that have failed to keep pace with
inflation. More consolidation in health care will lead to
higher federal spending and more out-of-pocket spending for
seniors. As such, the policy in the underlying bill seeks to
address unstable physician reimbursement rates in Medicare to
create more predictability for providers, preserve patient
choice in how they get their care, and reduce health care
costs.
The Committee remains committed to ensuring seniors can
maintain access to health care services that promote long-term
health and reduce spending. However, since the passage of the
Inflation Reduction Act (P.L. 117-169), Medicare Part D
insurance premiums have increased while plan offerings have
substantially decreased.\43\ The law also made significant
changes that will lead to less treatment options for seniors
and other vulnerable populations, which research suggests may
yield less generic drug entrants that will offset any savings
from the price controls established in the law for
pharmaceuticals. The Committee remains concerned by the
disincentives to develop cutting-edge medications in the
Inflation Reduction Act. As a result, the Committee is
advancing policy that will make technical corrections to the
Inflation Reduction Act and further incentivize the development
of orphan drugs.
---------------------------------------------------------------------------
\43\Sally Pipes, Biden's Inflation Reduction Act Unravels Medicare
Part D, Forbes (May 31, 2024), https://www.forbes.com/sites/sallypipes/
2024/05/31/bidens-inflation-reduction-act-unravels-medicare-part-d/.
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Committee Action
On May 13, 2025, the full Committee on Energy and Commerce
met in open markup session and ordered the Committee Print,
Title IV--Committee on Energy and Commerce, including Subtitles
A--Energy, B--Environment, C--Communications, and D--Health as
amended, budget reconciliation legislative recommendations,
favorably reported to the House Budget Committee by a record
vote of 30 yeas and 24 nays.
Committee Votes
Clause 3(b) of rule XIII requires the Committee to list the
record votes on the motion to report legislation and amendments
thereto. The following reflects the record votes taken during
the Committee consideration:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Oversight Findings and Recommendations
Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII, the Committee has held such hearings on this
legislation.
New Budget Authority, Entitlement Authority, and Tax Expenditures
Pursuant to clause 3(c)(2) of rule XIII, the Committee
finds that Committee Print, Title IV--Committee on Energy and
Commerce would result in no new or increased budget authority,
entitlement authority, or tax expenditures or revenues.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII, at the time this
report was filed, the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974 was not available. However,
the Director preliminarily estimates that this legislation
would provide deficit reduction of more than $880,000,000,000.
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 12, 2025.
Re CBO's Review of the Reconciliation Recommendations of the House
Committee on Energy and Commerce.
Hon. Brett Guthrie,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: You have asked the Congressional Budget
Office to review the reconciliation recommendations posted on
the website of the House Committee on Energy and Commerce on
May 11, 2025, to assess compliance with the instructions
included in H. Con. Res. 14.\1\
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\1\See House Committee Energy and Commerce, ``Markup of Markup of
Four Committee Prints,'' (May 11, 2025), https://tinyurl.com/3uzx7vbt.
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That resolution instructed the Committee to submit changes
in laws within its jurisdiction that reduce the deficit by not
less than $880 billion for the period of fiscal years 2025
through 2034.
CBO estimates that the Committee's reconciliation
recommendations would reduce deficits by more than $880 billion
over the 2025-2034 period and would not increase on-budget
deficits in any year after 2034.
I hope this information is useful to you. Please contact me
if you have further questions.
Sincerely,
Phillip L. Swagel,
Director.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to reduce
the Federal deficit by at least $880,000,000,000.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII, no provision of
Committee Print, Title IV--Committee on Energy and Commerce is
known to be duplicative of another Federal program, including
any program that was included in a report to Congress pursuant
to section 21 of Public Law 111-139 or the most recent Catalog
of Federal Domestic Assistance.
Related Committee and Subcommittee Hearings
Pursuant to clause 3(c)(6) of rule XIII, the following
related hearings were used to develop or consider Committee
Print, Title IV--Committee on Energy and Commerce:
On March 25, 2025, the Subcommittee on
Energy held a hearing entitled, ``Keeping the Lights
On: Examining the State of Regional Grid Reliability.''
The Subcommittee received testimony from:
Manu Asthana, President and
Chief Executive Officer, PJM Interconnection;
Jennifer Curran, Senior Vice
President for Planning and Operations,
Midcontinent Independent System Operator
(MISO);
Richard J. Dewey, President and
Chief Executive Officer, New York Independent
System Operator (NYISO);
Elliot Mainzer, President and
Chief Executive Officer, California Independent
System Operator (CAISO);
Lanny Nickell, Chief Operating
Officer, Southwest Power Pool (SPP);
Gordon Van Welie, President and
Chief Executive Officer, ISO New England (ISO-
NE); and
Pablo Vegas, President and Chief
Executive Officer, Electric Reliability Council
of Texas (ERCOT), Inc.
On April 5, 2025, the Subcommittee on Energy
held a hearing entitled, ``Scaling for Growth: Meeting
the Demand for Reliable, Affordable Electricity.'' The
Subcommittee received testimony from:
Noel W. Black, Senior Vice
President of Regulatory Affairs, Southern
Company;
Todd Brickhouse, Chief Executive
Officer and General Manager, Basin Electric
Power Cooperative;
Asim Haque, Senior Vice
President for Governmental and Member Services,
PJM Interconnection, LLC; and
Tyler H. Norris, James B. Duke
Fellow, Duke University.
On February 5, 2025, the Subcommittee on
Energy held a hearing entitled, ``Powering America's
Future: Unleashing American Energy.'' The Subcommittee
received testimony from:
Gary Arnold, Business Manager,
Denver Pipefitters Local 208;
Amanda Eversole, Executive Vice
President and Chief Advocacy Officer, American
Petroleum Institute;
Brigham McCown, Senior Fellow
and Director, Initiative on American Energy
Security, Hudson Institute; and
Mr. Tyler O'Connor Partner,
Crowell & Moring LLP.
On February 26, 2025, the Subcommittee on
Oversight & Investigations held a hearing entitled,
``Examining the Biden Administration's Energy and
Environment Spending Push.'' The Subcommittee received
testimony from:
Jonathan Black, Chief Advisor
for Strategic Planning and Program Oversight,
Office of Inspector General, U.S. Department of
Energy;
J. Alfredo Gomez, Director,
Natural Resources and Environment team, U.S.
Government Accountability Office;
Nicole Murley, Acting Inspector
General, Office of Inspector General, U.S.
Environmental Protection Agency; and
Frank Rusco, Director, Natural
Resources and Environment team, U.S. Government
Accountability Office.
On January 23, 2025, the Subcommittee on
Communications and Technology held a hearing entitled,
``Strengthening American Leadership in Wireless
Technology.'' The Subcommittee received testimony from:
Michael K. Powell, President &
Chief Executive Officer, NCTA--The Internet &
Television Association;
Brad Gillen, Executive Vice
President, CTIA--The Wireless Association;
Diane Rinaldo, Executive
Director, Open RAN Policy Coalition; and
Chris Lewis, President & Chief
Executive Officer, Public Knowledge.
On February 12, 2025, the Subcommittee on
Commerce, Manufacturing, and Trade held a hearing
entitled, ``AI in Manufacturing: Securing American
Leadership in Manufacturing and the Next Generation of
Technologies'' The Subcommittee received testimony
from:
Barbara Humpton, President and
Chief Executive Officer, Siemens Corporation;
Jason Oxman, President and Chief
Executive Officer, Information Technology
Industry Council (ITI);
Jeff Kinder, Executive Vice
President, Product Development and
Manufacturing Solutions, Autodesk; and
Dr. Elisabeth B. Reynolds,
Professor of Practice, Massachusetts Institute
of Technology.
On April 9, 2025, the Full Committee on
Energy and Commerce held a hearing entitled, ``The
Future of AI Technology, Human Discovery, and American
Global Competitiveness.'' The Committee received
testimony from:
Dr. Eric Schmidt, Chair, Special
Competitive Studies Project;
Manish Bhatia, Executive Vice
President of Global Operations, Micron
Technology;
Alexandr Wang, Founder and Chief
Executive Officer, Scale AI; and
David Turk, Distinguished
Visiting Fellow, Center on Global Energy
Policy, Columbia University.
On February 26, 2025, the Subcommittee on
Health held a hearing entitled, ``An Examination of How
Reining in PBMs Will Drive Competition and Lower Costs
for Patients.'' The Subcommittee received testimony
from:
Hugh Chancy, RPh, Pharmacist and
Owner, Chancy Drugs;
Shawn Gremminger, MPH, President
and Chief Executive Officer, National Alliance
of Healthcare Purchaser Coalitions;
Anthony Wright, Executive
Director, Families USA; and
Dr. Matthew Fiedler, PhD, Joseph
A. Pechman Senior Fellow, Center on Health
Policy, Brookings Institution.
Committee Cost Estimate
Pursuant to clause 3(d)(1) of rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974. At the time this report was
filed, the estimate was not available.
Earmark, Limited Tax Benefits, and Limited Tariff Benefits
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that Committee Print, Title IV--Committee on
Energy and Commerce, contains no earmarks, limited tax
benefits, or limited tariff benefits.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
SUBTITLE A--ENERGY
Section 41001. Rescissions relating to certain Inflation Reduction Act
programs
Section 41001 rescinds the unobligated balance of any
amounts made under the following sections of the Inflation
Reduction Act: State-Based Energy Efficiency Training Grants,
Funding for Department of Energy Loan Program Office, Advanced
Technology Vehicle Manufacturing, Energy Infrastructure
Reinvestment Financing, Tribal Energy Loan Guarantee Program,
Transmission Facility Financing, Grants to Facilitate the
Siting of Interstate Electricity Transmission Lines,
Interregional and Offshore Wind Electricity Transmission
Planning, Modeling, and Analysis, and Advanced Industrial
Facilities Deployment Program.
Section 41002. FERC certificates and fees for certain energy
infrastructure at international boundaries of the United States
Notwithstanding any requirements or statutory obligations
under federal and state law, including siting, environmental
and safety reviews, and permitting, Section 41002 requires an
application for a certificate of crossing for cross-border
energy infrastructure to include a $50,000 payment, and directs
the Federal Electricity Regulatory Commission to issue the
certificate. No person may construct, connect, operate, or
maintain a cross-border segment for the import or export of
designated energy products, or the transmission of electricity,
without first obtaining the certificate of crossing. This fee
structure does not apply to cross-border segments that were
previously approved by a Presidential permit.
Section 41003. Natural gas exports and imports
Under Section 41003, applications to the Secretary of
Energy to export natural gas from the United States to a non-
free trade agreement country shall include a $1,000,000 user
fee paid by the applicant. Upon receipt of the application and
collection of the fee, the Secretary of Energy shall deem the
application in the public interest. This Section does not alter
or impact the applicant's existing obligations and requirements
under the Natural Gas Act or the Federal Energy Regulatory
Commission's authorities.
Section 41004. Funding for Department of Energy loan guarantee expenses
Section 41004 appropriates $5,000,000 to the Department of
Energy to remain available for 5 years to carry out section 116
of the Alaska Natural Gas Pipeline Act (15 U.S.C. 720n).
Section 41005. Natural Gas Act expedited permitting
Section 41005 allows applicants for an authorization under
Section 3, or a certificate of public convenience and necessity
under section 7 of the Natural Gas Act, to participate
voluntarily in an expedited permitting process upon the payment
of $10,000,000 or one percent of the project's projected
capital cost.
Within one year of payment of the fee, each Federal, State,
interstate, or Tribal agency with relevant authorities shall
review and approve Federal authorizations, subject to any
conditions determined necessary to comply with the underlying
statute by the agency. For States, this includes their
authorities to impose conditions for any certifying authorities
delegated to States by federal law. Following such approval,
the Federal Electricity Regulatory Commission (FERC) shall
review the application and approve the application subject to
any conditions determined necessary by FERC.
The Commission may extend this timeline by a period of 6
months if granted consent by the applicant. Should the
authorization not be approved under the applicable deadline, it
shall be deemed approved, notwithstanding any procedural
requirements of the underlying law.
No court shall have jurisdiction to review a claim under
this section except for a claim brought by the applicant or a
person who has suffered, or likely and imminently will suffer,
direct and irreparable economic harm from the approval. An
organization may only bring a claim on behalf of one or more of
its members if each member of the organization or association
has suffered, or likely and imminently will suffer, harm.
Courts shall apply clear and convincing evidence as the
standard of review for such claims. The United States Court of
Appeals for the D.C. Circuit shall have original and exclusive
jurisdiction over any claim alleging the invalidity of the
process or that the federal authorization is beyond the scope
of authority granted by the federal law to such agency.
Section 41006. Carbon dioxide, oil, and hydrogen pipeline permitting
Pursuant to Section 41006, applicants for carbon dioxide,
oil, or hydrogen pipeline projects, as defined by section
60102(i) of title 49 of the U.S. Code, may apply for a license
authorizing the project to be considered in the same manner,
and in accordance with the requirements of, an application for
a certificate of public convenience and necessity under section
7 of the Natural Gas Act, including a fee of $10,000,000.
Section 41007. De-Risking Compensation Program for qualified energy
projects
Section 41007 appropriates $10 million, to remain available
through September 30, 2034, for administrative costs for the
Secretary of Energy to establish a De-Risking Compensation
Program at the Department of Energy. The program would provide
compensation to sponsors of federally permitted energy projects
that enroll in the program for unrecoverable capital losses
caused by subsequent federal actions that revoke permits or
approvals, or cancel, delay, or render the project unviable.
The program would be available to applicants who invest in
energy projects relating to coal, critical minerals, oil,
natural gas, or nuclear energy and are valued at no less than
$30 million. The sponsors would pay 5 percent of their
projected share of capital contribution to the project and an
annual premium into a Treasury Department fund. Upon
demonstration of unrecoverable losses due to subsequent federal
actions that caused the losses, the Secretary of Energy would
compensate the project sponsor for up to the full amount of the
loss from the available funds.
Section 41008. Strategic Petroleum Reserve
Section 41008 appropriates $2,000,000,000 to the Department
of Energy for fiscal year 2025 for activities related to the
Strategic Petroleum Reserve. Of this amount, $218,000,000 is
appropriated for repairs to the caverns, and $1,321,000,000 is
appropriated for the acquisition of petroleum products for
storage in the Strategic Petroleum Reserves. The remaining
funding is appropriated to the Department of Energy to buy back
the sales mandates by Section 20003 of Public Law 115-97.
Section 41009. Rescissions of previously appropriated unobligated funds
Section 41009 rescinds the previously appropriated
unobligated balances from the base appropriations for the
following programs; Office of Inspector General, Office of
Clean Energy Demonstrations, Office for Human Capital, Federal
Energy Management Programs, State and Community Energy
Programs, Office of Minority Economic Impact, Office of Energy
Efficiency and Renewable Energy, Office of General Counsel,
Office of Indian Energy Policy and Programs, Office of
Management, Office of the Secretary, Office of Public Affairs,
and the Office of Policy at the Department of Energy. These
rescissions do not include funds appropriated under the
Inflation Reduction Act, Infrastructure Investment and Jobs
Act, and any funds from emergency appropriations. Amounts
rescinded in this section do not include current, FY 2025, base
year appropriations.
SUBTITLE B--ENVIRONMENT
PART 1--REPEALS AND RECISSIONS
Section 42101. Repeal and recission relating to clean heavy-duty
vehicles
This section repeals section 132 of the Clean Air Act and
rescinds any unobligated balance made available under section
132. This portion of the IRA established a program to grant
awards for purchasing heavy-duty zero-emission vehicles,
charging infrastructure, workplace training, and planning
support.
Section 42102. Repeal and recission relating to grants to reduce air
pollution at ports
This section repeals section 133 of the Clean Air Act and
rescinds any unobligated balance made available under that
section. This section of the IRA created a grant and rebate
program for the purchase of zero-emission port equipment or
technology.
Section 42103. Repeal and recission relating to grants to the
Greenhouse Gas Reduction Fund
This section repeals section 134 of the Clean Air Act and
rescinds any unobligated balance made available under that
section. This section of the IRA appropriated funds to the
Environmental Protection Agency to establish programs commonly
referred to as ``Green Banks'' to provide grants, loans, and
other financial assistance to deploy or benefit from zero
emission technologies, and for other purposes.
Section 42104. Repeal and recission relating to diesel emissions
reductions
This section repeals section 60104 of Public Law 117-169
and rescinds any unobligated balance made available under that
section. This portion of the IRA appropriated additional funds
to the Diesel Emissions Reduction Act for use only in certain
communities.
Section 42105. Repeal and recission relating to funding to address air
pollution
This section repeals section 60105 of Public Law 117-169
and rescinds any unobligated balance made available under that
section. This provision appropriated additional funds for air
monitoring, developing zero-emission standards for mobile
sources, and implementing other air pollution programs under
existing EPA authorities.
Section 42106. Repeal and recission relating to funding to address air
pollution at schools
This section repeals section 60106 of Public Law 117-169
and rescinds any unobligated balance made available under that
section. This section of the IRA appropriated additional funds
for monitoring and reducing air pollution in schools, including
developing school environmental quality plans that include
building standards for school building, design, construction,
and renovation.
Section 42107. Repeal and recission relating to low emissions
electricity program
This section repeals section 135 of the Clean Air Act and
rescinds any unobligated balance made available under that
section. This portion of the IRA established a new EPA program
and appropriated funds for consumer related education, industry
related outreach, and intergovernmental outreach related to
changing sources of electrical generation.
Section 42108. Repeal and recission relating to funding for Section
211(o) of the Clean Air Act
This section repeals section 60108 of Public Law 117-169
and rescinds any unobligated balance made available under that
section. This provision of the IRA provided additional funding
to EPA, in addition to existing appropriations to EPA and other
departments and agencies, for data collection of greenhouse gas
emissions and testing the environmental impact of biofuels.
Section 42109. Repeal and recission relating to funding for
implementation of the American Innovation and Manufacturing Act
This section repeals section 60109 of Public Law 117-169
and rescinds any unobligated balance made available under that
section. This section of the IRA provided additional funding to
EPA for implementation of the American Innovation and
Manufacturing (AIM) Act, 42 U.S.C. 7675, and does not alter the
underlying authority.
Section 42110. repeal and recission relating to funding for enforcement
technology and public information
This section repeals section 60110 of Public Law 117-169
and rescinds any unobligated balance made available under that
section. This provision of the IRA provides funding to update
software used by EPA and states to track environmental
compliance actions.
Section 42111. Repeal and recission relating to greenhouse gas
corporate reporting
This section repeals section 60111 of Public Law 117-169
and rescinds any unobligated balance made available under that
section. This provision of the IRA provided funding for
enhanced standardization and transparency for corporate climate
action commitments.
Section 42112. Repeal and recission relating to environmental product
declaration assistance
This section repeals section 60112 of Public Law 117-169
and rescinds any unobligated balance made available under that
section. This section of the IRA provided funding to create
environmental product declarations advertising the
environmental impact of products.
Section 42113. Repeal of funding for Methane Emissions and Waste
Reduction Incentive Program for petroleum and natural gas
systems
This section repeals subsections (a) and (b) of section 136
of the Clean Air Act and rescinds any unobligated balance made
available under that section. These repeals and amendments
extend by 10 years the date by which the charge associated with
the Methane Emissions Reduction Program shall begin to be
imposed and collected.
Section 42114. Repeal and recission relating to greenhouse gas air
pollution plans and implementation grants
This section repeals section 137 of the Clean Air Act and
rescinds any unobligated balance made available under that
section. This section of the IRA establishes a new program to
provide funding for states, local governments and Tribes to use
for ``Climate Change Action Plans'' and implementation
initiatives.
Section 42115. Repeal and recission relating to Environmental
Protection Agency efficient, accurate, and timely reviews
This section repeals section 60115 of Public Law 117-169
and rescinds any unobligated balance made available under that
section. This section of the IRA funds hiring, training,
information systems, and community engagement activities
related to environmental reviews and permitting.
Section 42116. Repeal and recission relating to low-embodied carbon
labeling for construction materials
This section repeals section 60116 of Public Law 117-169
and rescinds any unobligated balance made available under that
section. This provision of the IRA provided funding to
administer a program that would identify and label construction
materials and products with low greenhouse gas emissions life
cycles.
Section 42117. Repeal and recission relating to environmental and
climate justice block grants
This section repeals section 138 of the Clean Air Act and
rescinds any unobligated balance made available under that
section $333 million. This section of the IRA established a new
EPA program and appropriated funds for environmental
monitoring, technology acquisition, workforce development, and
pollution reduction programs.
PART 2--REPEAL OF EPA RULE RELATING TO MULTI-POLLUTANT EMISSION
STANDARDS
Section 42201. Repeal of EPA rule relating to multi-pollutant emissions
standards
This section repeals the final rule issued by the
Environmental Protection Agency relating to ``Multi-Pollutant
Emissions Standards for Model Years 2027 and Later Light-Duty
and Medium-Duty Vehicles'' (89 Fed. Reg. 27842 (April 18,
2024)).
PART 3--REPEAL OF NHTSA RULE RELATING TO CAFE STANDARDS
Section 42301. Repeal of NHTSA rule relating to CAFE standards for
passenger cars and light trucks
This section repeals the final rule issued by the National
Highway Traffic Safety Administration relating to ``Corporate
Average Fuel Economy Standards for Passenger Cars and Light
Trucks for Model Years 2027 and Beyond and Fuel Efficiency
Standards for Heavy-Duty Pickup Trucks and Vans for Model Years
2030 and Beyond,'' 89 Fed. Reg. 27842 (April 18, 2024)).
SUBTITLE C--COMMUNICATIONS
Section 43001. Identification and Auction of Spectrum
Subsection (a) would require the National
Telecommunications and Information Administration (NTIA) and
the Federal Communications Commission (FCC), not later than 2
years after enactment of this Act, to identify at least 600 MHz
of commercial or federal spectrum in the covered band to be
auctioned by 2034. It would also require the President, acting
through the Assistant Secretary for Communications and
Information, to withdraw or modify the assignments to Federal
Government stations of spectrum identified, and notify the
Commission not later than 30 days after completing any
necessary withdrawals or modifications. It includes a rule of
construction to ensure that nothing in this section changes the
respective authorities of NTIA or the FCC with respect to
spectrum allocated for Federal use, non-Federal use, or shared
Federal and non-Federal use.
Subsection (b) would require the FCC to auction the
spectrum identified in subsection (a) on an exclusive, licensed
basis for mobile broadband services, fixed broadband services,
mobile and fixed broadband services, or a combination thereof.
Specifically, not later than 3 years after the data of
enactment, the FCC would be required to auction at least 200
MHz of the identified spectrum under subsection (a), and not
later than 6 years after the date of enactment, auction the
remaining spectrum identified under subsection (a).
Subsection (c) would require auction proceeds to cover 110
percent of federal relocation or sharing costs as required
under section 309(j)(16)(B) of the Communications Act of 1934.
Subsection (d) would reauthorize the FCC's spectrum auction
authority through September 30, 2034.
Subsection (e) defines key terms. Specifically, it defines
the ``covered band'' as the band of frequencies between 1.3
gigahertz (GHz) and 10 GHz, inclusive, excluding the band of
frequencies between 3.1 gigahertz (GHz) and 3.45 GHz and the
band of frequencies between 5.925 GHz and 7.125 GHz.
Section 43201. Artificial Intelligence and Information Technology
Modernization Initiative
Subsection (a) would appropriate $500,000,000 to the
Department of Commerce for fiscal year 2025, to remain
available through September 30, 2035, for the purpose of
modernizing and securing federal information technology systems
through the deployment of commercial artificial intelligence,
automation technologies, and the replacement of antiquated
business systems.
Subsection (b) states that the Secretary of Commerce shall
use these funds to support the replacement and modernization of
legacy business systems with state-of-the-art commercial
artificial intelligence systems and automated decision systems,
the adoption of artificial intelligence models that increase
operational efficiency and service delivery, and improve the
cybersecurity posture of Federal information technology systems
through modernized architecture, automated threat detection,
and integrated artificial intelligence solutions.
Subsection (c)(1) states that no state or political
subdivision may enforce any law or regulation regulating
artificial intelligence models, artificial intelligence
systems, or automated decision systems during the 10-year
period beginning on the date of the enactment of this Act.
Subsection (c)(2) states that subsection (c)(1) may not be
construed to prohibit the enforcement of any law or regulation
where: the primary purpose and effect is to remove legal
impediments to or facilitate the deployment or operation of an
artificial intelligence model, artificial intelligence system,
or automated decision system; the primary purpose and effect is
to streamline licensing, permitting, and other procedures that
facilitate the adoption of artificial intelligence models,
artificial intelligence systems, and automated decision
systems; there are no substantive design, data-handling,
documentation, or other requirements on artificial intelligence
models, artificial intelligence systems, or automated decision
systems, subject to enumerated exceptions; and does not impose
a fee or bond, subject to enumerated exceptions.
Subsection (d) provides definitions for key terms used in
the Act, including ``artificial intelligence'', ``artificial
intelligence model'', ``artificial intelligence system'', and
``automated decision system''.
SUBTITLE D--HEALTH
PART 1--MEDICAID
Subpart A--Reducing Fraud and Improving Enrollment Processes
Section 44101. Moratorium on implementation of rule relating to
eligibility and enrollment in Medicare Savings Programs
This section requires the Department of Health and Human
Services (HHS) to delay implementation, administration, or
enforcement of the final rule titled ``Streamlining Medicaid;
Medicare Savings Program Eligibility Determination and
Enrollment'' until January 1, 2035.
Section 44102. Moratorium on implementation of rule relating to
eligibility and enrollment for Medicaid, CHIP, and the Basic
Health Program
This section requires HHS to delay implementation,
administration, or enforcement of the final rule titled
``Medicaid Program; Streamlining the Medicaid, Children's
Health Insurance Program, and Basic Health Program Application,
Eligibility Determination, Enrollment, and Renewal Processes''
until January 1, 2035.
Section 44103. Ensuring appropriate address verification under the
Medicaid and CHIP programs
This section requires states to establish processes to
regularly obtain beneficiary address information from reliable
data sources, including by requiring state Medicaid programs to
collect address information provided by beneficiaries to
managed care entities (where applicable). In addition, this
section requires HHS to establish a system to prevent
individuals from being simultaneously enrolled in multiple
State Medicaid programs by no later than October 1, 2029.
States would be required to submit to the system the Social
Security Number of the individual enrolled under the State plan
to identify when Social Security Numbers for individuals
enrolled in Medicaid are identified concurrently in two or more
States at the same time.
Section 44104. Modifying certain state requirements for ensuring
deceased individuals do not remain enrolled
This section requires state Medicaid programs to check the
Social Security Administration's Death Master File on at least
a quarterly basis to determine whether Medicaid enrollees are
deceased and to disenroll individuals who are determined to be
deceased from Medicaid coverage.
Section 44105. Medicaid provider screening requirements
This section requires states to conduct monthly checks of
databases or similar systems to determine whether HHS or
another state has already terminated a provider or supplier
from participating in Medicaid and to also disenroll them from
the state's Medicaid program.
Section 44106. Additional Medicaid provider screening requirements
This section codifies the requirement that state Medicaid
programs check, as part of the provider enrollment and re-
enrollment process and on a quarterly basis thereafter, the
Social Security Administration's Death Master File to determine
whether providers are deceased and enrolled in the state's
Medicaid program.
Section 44107. Removing good faith waiver for payment reduction related
to certain erroneous excess payments under Medicaid
This section requires HHS to reduce federal financial
participation (FFP) to States for errors identified through the
ratio of a State's erroneous excess payments for medical
assistance, by the Office of the Inspector General, or by the
Secretary are directly attributable to payments to ineligible
individuals or for ineligible services.
Section 44108. Increasing frequency of eligibility redeterminations for
certain individuals
This section requires States to conduct eligibility
determinations for Expansion population adults every six
months. Current law currently requires such determinations to
occur on every twelve months.
Section 44109. Revising home equity limit for determining eligibility
for long-term care services under the Medicaid program
This section establishes a ceiling of $1,000,000 for
permissible home equity values for individuals when determining
allowable assets for Medicaid beneficiaries that are eligible
for long-term care services. This section also prohibits the
use of asset disregards from being applied to waive home equity
limits.
Section 44110. Prohibiting federal financial participation under
Medicaid and CHIP for individuals without verified citizenship,
nationality, or satisfactory immigration status
This section prohibits FFP in Medicaid for individuals
whose citizenship, nationality, or immigration status has not
been verified, including during reasonable opportunity periods
when an individual has not yet verified citizenship,
nationality, or immigration status. Current law permits states
to enroll individuals in coverage immediately and then provide
90-day reasonable opportunities that allow individuals to
immediately begin receiving coverage and then wait up to 90
days before verifying citizenship or immigration status, all
while receiving FFP during this period. This policy permits
states, at the state's option, to provide coverage during a
reasonable opportunity period in which an individual may not
yet have provided evidence of citizenship, nationality, or
immigration status, so long as the state does not request FFP
until citizenship, nationality, or immigration status have been
verified.
Section 44111. Reducing expansion FMAP for certain states providing
payments for health care furnished to certain individuals
This section reduces by ten percent the Federal Medical
Assistance Percentage (FMAP) for Medicaid Expansion States who
use their Medicaid infrastructure to provide health care
coverage for illegal immigrants under Medicaid or another
state-based program.
Subpart B--Preventing Wasteful Spending
Section 44121. Moratorium on implementation of rule relating to
staffing standards for long-term care facilities under the
Medicare and Medicaid programs
This section requires HHS to delay implementation,
administration, or enforcement of the final rule titled
``Medicare and Medicaid Programs; Minimum Staffing Standards
for Long-Term Care Facilities and Medicaid Institutional
Payment Transparency Reporting'' until January 1, 2035.
Section 44122. Modifying retroactive coverage under the Medicaid and
CHIP programs
This section limits retroactive coverage in Medicaid to one
month prior to an individual's application date. Current law
provides retroactive coverage for up to three months before an
individual's application date.
Section 44123. Ensuring accurate payments to pharmacies under Medicaid
This section requires participation by retail and
applicable non-retail pharmacies in the National Average Drug
Acquisition Cost (NADAC) survey. The NADAC survey measures
pharmacy acquisition costs and is often used in the Medicaid
program to inform reimbursement to pharmacies.
Section 44124. Preventing the use of abusive spread pricing in Medicaid
This section bans ``spread pricing'' in the Medicaid
program, which occurs when pharmacy benefit managers retain a
portion of the amount paid to them (a ``spread'') for
prescription drugs.
Section 44125. Prohibiting federal Medicaid and CHIP funding for gender
transition procedures for minors
This section prohibits FFP for specified gender transition
procedures to individuals under the age of 18.
Section 44126. Federal payments to prohibited entities
This section prohibits Medicaid funds to be paid to
providers that are nonprofit organizations, that are essential
community providers that are primarily engaged in family
planning services or reproductive services, provide for
abortions other than for Hyde Amendment exceptions, and which
received $1,000,000 or more (to either the provider or the
provider's affiliates) in payments from Medicaid payments in
2024.
Subpart C--Stopping Abusive Financing Practices
Section 44131. Sunsetting eligibility for increased FMAP for new
expansion states
This section sunsets the temporary five percent enhanced
FMAP afforded to states under the American Rescue Plan Act that
opt to expand Medicaid. This provision would apply
prospectively, not affecting states currently receiving an
enhanced federal match under this authority.
Section 44132. Moratorium on new or increased provider taxes
This section freezes, at current rates, states' provider
taxes in effect as of the date of enactment of this legislation
and prohibits states from establishing new provider taxes.
Section 44133. Revising the payment limit for certain state directed
payments
This section directs HHS to revise current regulations to
limit state directed payments for services furnished on or
after the enactment of this legislation from exceeding the
total published Medicare payment rate. This section would not
affect total payment rates for state directed payments approved
prior to this legislation's enactment.
Section 44134. Requirements regarding waiver of uniform tax requirement
for Medicaid provider tax
This section modifies the criteria HHS must consider when
determining whether certain health care-related taxes are
generally redistributive. Under this section, a tax would not
be considered generally redistributive if, within a permissible
class, the tax rate imposed on the taxpayer or tax rate group
explicitly defined by its relatively lower volume or percentage
of Medicaid taxable units is lower than the tax rate imposed on
any other taxpayer or tax rate group explicitly defined by its
relatively higher volume or percentage of Medicaid taxable
units. The tax would also not be considered generally
redistributive if, within a permissible class, the tax rate
imposed on any taxpayer or tax rate group based upon its
Medicaid taxable units is higher than the tax rate imposed on
any taxpayer or tax rate group based upon its non-Medicaid
taxable unit.
If a State has a health care-related tax waiver that meets
at least one of these criteria as of the date of enactment of
this legislation, the waiver must be modified to comply with
these requirements. This section provides a transition period
for non-compliant programs, after which a State whose health
care-related taxes do not adhere to all federal requirements
would be penalized by the sum of those revenues received by
State.
Section 44135. Requiring budget neutrality for Medicaid demonstration
projects under section 1115
This section provides budget neutrality requirements for
demonstration projects under section 1115 of the Social
Security Act. HHS would be required to certify that the total
expenditures for FFP do not exceed what would otherwise have
been spent under Title XIX absent the demonstration project.
HHS must also develop methodologies for applying savings
generated under a project as allowable costs to be spent in a
project's extension.
Subpart D--Increasing Personal Accountability
Section 44141. Requirement for states to establish Medicaid community
engagement requirements for certain individuals
This section requires states to establish community
engagement requirements for able-bodied adults without
dependents. An individual can meet the community engagement
requirements during a month by working at least 80 hours,
completing at least 80 hours of community service,
participating in a work program for at least 80 hours,
enrolling in an educational program for at least 80 hours, or a
combination of these activities for at least 80 hours.
The requirements of this section would not apply to the
following individuals: pregnant women, individuals under the
age of 19 or over the age of 64, foster youth and former foster
youth under the age of 26, members of a Tribes, individuals who
are considered medically frail (which includes, but is not
limited to, individuals who are blind or disabled, who have a
chronic substance use disorder, who have a serious and complex
medical condition, or who have a condition, as defined by the
State and approved by the Secretary, as meeting the definition
of medically frail), individuals who are already in compliance
with the work requirements under the Temporary Assistance for
Needy Families (TANF) program or Supplemental Nutrition
Assistance Program (SNAP), individuals who are a parent or
caregiver of a dependent child or an individual with a
disability, or are incarcerated or recently released from
incarceration within the past 90 days. This section also
provides short-term hardship waivers for natural disasters and
for counties where the unemployment rate is greater than eight
percent or greater than 150 percent of the national average.
Compliance with community engagement requirements would be
verified by states no less frequently than for the month
preceding an individual's enrollment in Medicaid and in a month
preceding the individual's eligibility redetermination and
verified as part of an individual's overall eligibility
determination or redetermination. States would be required to
provide regular, advanced notice and outreach to make
individuals aware of the requirements, would be required to
streamline and simplify processes to verify compliance to
reduce burdens on individuals, and to establish due process
procedures for individuals before denying coverage or removing
individuals from coverage.
Section 44142. Modifying cost sharing requirements for certain
expansion individuals under the Medicaid program
This section requires states to impose cost sharing on
Medicaid Expansion adults with incomes over 100 percent of the
federal poverty level (FPL). This cost-sharing may not exceed
$35 per service. Cost sharing may not exceed five percent of
the individual's income, which is the current out-of-pocket
limit for Medicaid beneficiaries. This section would not permit
cost-sharing on prenatal care, pediatric care, or emergency
room care (except for non-emergency care provided in an
emergency room).
PART 2--AFFORDABLE CARE ACT
Section 44201. Addressing waste, fraud, and abuse in the ACA exchanges
This section would institute eligibility and income
verification processes for Patient Protection and Affordable
Care Act (ACA) enrollees. In addition, it would roll back
income-based special enrollment periods in the federally-
facilitated and state ACA exchanges. This section would also
make technical changes to health plans offered via the ACA
exchanges. It would institute ACA reenrollment guardrails for
enrollees in zero-dollar premium health plans. Additionally,
this section would prohibit gender transition procedures from
being included as an essential health benefit (EHB), and it
would amend the definition of ``lawfully present'' for the
purposes of qualified health plan enrollment. This section
would also permit issuers to require enrollees to satisfy debt
for past-due premiums as a prerequisite for effectuating new
health coverage. The provisions within this section would take
effect for plan years beginning on or after January 1, 2026.
PART 3--IMPROVING AMERICANS' ACCESS TO CARE
Section 44301. Expanding and clarifying the exclusion for orphan drugs
under the drug price negotiation program
This section makes technical corrections to current law by
permitting product sponsors to have one or more orphan drug
indication in order to be exempt from the Drug Price
Negotiation Program in statute. Current law limits exemptions
from the Drug Price Negotiation Program to one rare disease
indication. This section also revises the start of the timeline
in which a manufacturer would be eligible for negotiation until
an orphan drug receives its first non-orphan indication.
Section 44302. Streamlined enrollment process for eligible out-of-state
providers under Medicaid and CHIP
For purposes of improving access to necessary out-of-state
care for children enrolled in Medicaid and the Children's
Health Insurance Program (CHIP), this section requires states
to establish a process through which qualifying pediatric out-
of-state providers may enroll as participating providers
without undergoing additional screening requirements.
Section 44303. Delaying DSH reductions
This section delays the Medicaid Disproportionate Share
Hospital (DSH) reductions, currently $8 billion reductions per
year that are set to take effect for fiscal years 2026 through
2028, to instead take effect for fiscal years 2029 through
2031. This section also extends funding for Tennessee's DSH
program, which is set to expire at the end of this fiscal year,
through fiscal year 2028.
Section 44304. Modifying update to the conversion factor under the
physician fee schedule under the Medicare program
This section amends current law by replacing the split
physician fee schedule conversion factor set to take effect on
January 1, 2026, with a new single conversion factor based on a
percentage of medical inflation, or the Medicare Economic Index
(MEI).
Section 44305. Modernizing and ensuring PBM accountability
This section requires Pharmacy Benefit Managers (PBMs) in
Medicare Part D to transparently share information relating to
business practices with Medicare Part D Prescription Drug Plan
Sponsors, including information relating to formulary decisions
and prescription drug coverage that benefits affiliated
pharmacies. The policy also prohibits PBM compensation based on
a drug's list price, limiting compensation to fair market bona-
fide service fees.
Minority, Additional, or Dissenting Views
MINORITY VIEWS
The House Republican budget is an extreme bill--Republicans
are intentionally and cruelly taking health care away from at
least 13.7 million Americans and raising health care costs for
millions more so they can give giant tax breaks to the ultra-
rich that don't need them.
President Trump and Republicans promised to lower everyday
costs for Americans, but prices have gone up because of Trump's
reckless tariffs. And this Republican bill does not reduce
everyday prices for hardworking Americans--in fact, it drives
prices up.
The only winners in the Republican budget scheme are
billionaire donors like Elon Musk who will receive huge tax
breaks. Everyday Americans cannot afford the Republican budget.
Subtitle A--Energy, Providing for Reconciliation Pursuant to H. Con.
Res. 14
Subtitle A contains billions of dollars of cuts to
Inflation Reduction Act programs designed to enhance American
energy security and reduce costs. It also contains overhauls to
permitting policies at the Federal Energy Regulatory Commission
(FERC) and Department of Energy (DOE) and grants FERC brand-new
powers to grant crude oil, petroleum product, hydrogen, and
carbon dioxide pipeline developers eminent domain authority. It
creates a de-risking program designed specifically to cost
taxpayers hundreds of millions by picking winners and losers
and making it harder for clean sources of energy to compete.
Finally, it rescinds hundreds of millions of dollars from base
annual discretionary funding for DOE offices, making it harder
for them to administer a variety of programs and incentives,
specifically clean energy and energy efficiency programs.
Section 41001 of Subtitle A, titled ``Rescissions Relating
to Certain Inflation Reduction Act Programs,'' rescinds
unobligated funds from the State-Based Home Energy Efficiency
Contractor Training Grants; the Loan Programs Office; Advanced
Technology Vehicle Manufacturing; Energy Infrastructure
Reinvestment Financing; the Tribal Energy Loan Guarantee
Program; Transmission Facility Financing; Grants to Facilitate
the Siting of Interstate Electricity Transmission Lines,
Interregional and Offshore Wind Electricity Transmission
Planning, Modeling, and Analysis; and the Advanced Industrial
Facilities Deployment Program. Notably, many of the targeted
offices and programs support the financing and development of
energy efficiency, decarbonization, clean energy, and electric
vehicle projects.
Rescinding funding from these offices and programs
threatens ongoing applications, project financing, and project
development. The programs targeted by Section 41001,
specifically those in the Loan Programs Office, are designed to
support emerging technologies, support domestic manufacturing,
and address rapid demand growth.\1\ Rescissions can produce
chilling effects on industries that are in early stages of
development and growth, such as many clean energy or critical
minerals industries. These actions harm the American
manufacturing workforce, and hamper America's ability to
compete globally.
---------------------------------------------------------------------------
\1\Department of Energy, LPO Year in Review (Jan. 17, 2025) (press
release).
---------------------------------------------------------------------------
The cuts to the Loan Programs Office will be particularly
devastating to nuclear energy. As South Carolina Governor Henry
McMaster noted in a letter to his state's congressional
delegation, ``. . . without the existing federal tax credits
and loan programs for nuclear power that make financing new
nuclear power generation possible, our efforts [to finish a
nuclear plant] . . . are dead.''\2\ Combined with the proposed
phase-out of the 45U tax credit in the Ways and Means
Committee, Republicans are poised to completely extinguish any
hopes of building new nuclear energy in the United States.\3\
No nuclear reactor this century has been built without federal
support, and Republicans are preparing to pull the rug out from
an entire industry.
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\2\Letter from Henry Dargan McMaster, Governor, State of South
Carolina to South Carolina Congressional Delegation (May 9, 2025).
\3\House Republicans Are About to Wreck Trump's Nuclear-Powered
Dream, The Washington Post (May 15, 2025).
---------------------------------------------------------------------------
In addition to rescissions targeting Inflation Reduction
Act programs, Section 41009 of Subtitle A, ``Rescissions of
Previously Appropriated Unobligated Funds,'' rescinds funding
from a range of DOE offices, including but not limited to, the
Office of the Inspector General, the Office of Clean Energy
Demonstrations, the Federal Energy Management Programs, State
and Community Energy Programs, the Office of Minority Economic
Impact, the Office of Energy Efficiency and Renewable Energy,
the Office of General Counsel, and the Office of Indian Energy
Policy and Programs. The targeting of funding for the Office of
the Inspector General shows a blatant disregard for good
governance. And the targeting of clean energy and energy
efficiency offices again demonstrates a commitment to gutting
domestic clean energy development and access to affordable
energy.
For legislation ostensibly focused on the budget, Subtitle
A also contains a number of provisions making vast policy
changes to the way pipeline permits are handled, granting FERC
sweeping new powers to compel landowners to sell their land to
developers of certain types of pipelines. Taken as a whole,
these provisions do not represent a mere expediting of energy
infrastructure, but rather an attempt to get rid of permitting
processes altogether. As Rep. Joyce admitted answering a
question from Rep. Landsman during the markup of this
subtitle--these provisions represent questions of policy, not
revenue.
Section 41002 closely resembles H.R. 3062. By granting FERC
the authority to issue ``certificates of crossing,'' the bill
transfers to FERC authority currently vested in the President
(for crude oil, hydrocarbon liquid, refined petroleum product,
hydrogen, carbon dioxide, or other energy pipelines)\4\ and DOE
(for electricity transmission lines).\5\}\6\ It also
completely removes any consideration of foreign policy
interests of the United States, which the State Department is
currently obligated to consider when advising the President on
Presidential permits for non-natural gas pipelines, and would
remove the requirement that FERC and DOE obtain concurrence
from the State Department and Department of Defense for natural
gas and electricity transmission lines.\7\}\8\
Instead, all consideration of foreign policy, the national
defense, or the public interest would be prohibited from being
considered, and FERC would be required to issue a certificate.
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\4\Exec. Order No. 13867, 84 Fed. Reg. 15491 (Apr. 15, 2019).
\5\Exec. Order No. 10485, 18 Fed. Reg. 5397 (Sep. 3, 1953).
\6\Exec. Order No. 12038, 43 Fed. Reg. 4957 (Feb. 7, 1978).
\7\See note 4.
\8\See note 5.
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Section 41003 similarly transforms the authorization
process to export natural gas to countries the United States
lacks a free trade agreement with. Under section 3(a) of the
Natural Gas Act (NGA), DOE is required to determine whether a
proposed export of natural gas to a non-free trade agreement
nation would be inconsistent with the public interest.\9\
Section 41003 strips DOE of that requirement, and merely
declares that any would-be exporter that pays DOE $1 million
would have its proposed export application automatically found
in the public interest. Given that DOE recently found that
unfettered exports of liquified natural gas (LNG) ``. . . would
increase costs for the average American household by well over
$100 more per year . . .'' keeping the public interest
determination is vital.\10\
---------------------------------------------------------------------------
\9\15 U.S.C. 717b(a).
\10\Department of Energy, Remarks as Prepared for Delivery by
Secretary Jennifer M. Granholm on Updated Finaly Analysis (Dec. 2024).
---------------------------------------------------------------------------
Contrary to what Committee counsel suggested during the
markup of this subtitle, there are presently zero legal hurdles
in the law barring LNG exports from going to China--in 2024
alone, the United States exported 213 billion cubic feet of LNG
to China. Requiring any exporter to pay one million dollars and
automatically deeming their LNG exports--regardless of whether
they are to China or other geopolitical rivals--in the public
interest is a threat to our national security.
Section 41005 goes even further by upending not only FERC's
permitting process for LNG export facilities and natural gas
pipelines, but every federal, state, or Tribal agency's
permitting policies. Again, similarly to sections 41002 and
41003, every applicant would be guaranteed its permit would be
approved by every relevant agency.
This would particularly upend decades of precedent under
the Clean Water Act (CWA) allowing states to make their own
determinations under section 401 of the CWA. The CWA allows
states to determine if a proposed action complies with certain
sections of the CWA.\11\ The case of the Northeast Supply
Enhancement Project--a proposed pipeline project in New Jersey,
New York, and Pennsylvania--is a perfect example. New York's
Department of Environmental Conservation thrice denied the
project a water quality certification pursuant to section 401
because it failed to meet New York's standards for mercury and
copper.\12\ If Subtitle A had been in effect at the time, New
York would have had no choice but to issue a permit for the
project, destroying New York's right to protect its citizens
from pollution in its waterways.
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\11\Congressional Research Service, Clean Water Act Section 401:
Overview and Recent Developments (Feb. 7, 2025) (CRS R46615).
\12\Letter from Daniel Whitehead, Director, Division of
Environmental Permits, New York State Department of Environmental
Conservation, to Joseph Dean, Manager, Environmental Health and Safety,
Transcontinental Gas Pipe Line Company, LLC (May 15, 2020).
---------------------------------------------------------------------------
The provision goes further by restricting lawsuits against
natural gas pipelines permitted under section 41005. The
section would bar organizations from suing for relief if even
one member of the organization hadn't suffered ``direct and
irreparable economic harm'' from a pipeline permit, and it ups
the standard required to set aside a permit from
``substantial'' to ``clear and convincing'' evidence. This will
make it harder for Americans to compel pipeline companies and
every level of government to follow the law.
Finally, section 41007 would grant carbon dioxide,
hydrogen, crude oil, and refined petroleum products eminent
domain authority identical to that granted to natural gas
pipelines under section 7(h) of the NGA and allow developers to
ignore state and local laws in constructing and operating such
pipelines. This comes without any Committee hearing, debate, or
activity on the issue, which is especially egregious given that
Midwestern states are currently debating or have enacted
legislation that would prohibit the usage of eminent domain
authority at the state level for carbon dioxide
pipelines.\13\}\14\
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\13\Senate Passes Bill Restricting Eminent Domain for Carbon
Pipelines, Iowa Capital Dispatch (May 13, 2025).
\14\South Dakota Bans Use of Eminent Domain for Carbon Dioxide
Pipelines, Reuters (Mar. 6, 2025).
---------------------------------------------------------------------------
Furthermore, the section would regulate the siting of
carbon dioxide and hydrogen pipelines similar to the siting of
natural gas pipelines by FERC, but leave the economic
regulation of carbon dioxide and hydrogen pipelines to the
Surface Transportation Board, unlike natural gas under the
NGA.\15\ Without the economic and market regulatory experience,
FERC would be hard-pressed to make the requisite determination
that a proposed hydrogen or carbon dioxide pipeline ``is or
will be required by the present or future public convenience
and necessity.''\16\ The result, at best, would be mass
regulatory confusion, and at worst, would see landowners across
America have their property seized and spend years in
litigation as FERC lacks the expertise to make the required
legal determinations.
---------------------------------------------------------------------------
\15\Senate Committee on Energy and Natural Resources, Hearing to
Examine Federal Regulatory Authorities Governing the Development of
Interstate Hydrogen Pipelines, Storage, Import, and Export Facilities,
117th Cong. (Jul. 19, 2022) (S. Hrg. 117-470).
\16\15 U.S.C. Sec. 717f(e).
---------------------------------------------------------------------------
Sections 41002, 41003, 41005, and 41006 fundamentally
dismantle the permitting process for pipelines and LNG
exports--the fees the sections impose are merely incidental to
that objective. They do not represent serious attempts at
permitting reform--paying someone $10 million to receive a
guaranteed permit with limited ability for anyone to challenge
it is not permitting reform.
Subtitle A shows a serious disregard for the domestic clean
energy economy and for household energy consumers. The policies
contained in this subtitle are clearly designed to benefit Big
Oil and Gas, over all else. We believe the policies reflected
in this subtitle drag America backwards.
For the reasons stated above, we oppose Subtitle A.
Subtitle B--Environment, Providing for Reconciliation Pursuant to H.
Con. Res. 14
Subtitle B is a radical proposal that would gut critical
environmental protections and programs, harming the health and
welfare of all Americans. This subtitle seeks to both repeal
and rescind unobligated funds for every single Environmental
Protection Agency (EPA) program included in the Inflation
Reduction Act (IRA).\17\ The bill continues the Republican
majority's political obsession with dismantling the IRA. Since
the law was enacted, they have targeted these climate, clean
energy, and public health programs with countless sham hearings
and so-called oversight activities. The Republican majority's
own report highlights those efforts in detail. Republicans have
also tried to repeal, reprogram and claw back these funds in
multiple bills that have previously passed the House.\18\
Republicans have demonstrated a clear pattern of opposition to
these policies. This is just the latest example.
---------------------------------------------------------------------------
\17\Inflation Reduction Act, Public Law 117-169.
\18\H.R. 1, H.R. 1023, H.R. 2811, H.R. 8998, H.R. 4821.
---------------------------------------------------------------------------
What's striking is that most, if not all, of the IRA funds
have already been invested in communities across the country.
The savings achieved by repealing and rescinding the IRA
environmental programs is comically small--roughly 3.5 percent
of the funds originally authorized for these programs,
according to the Congressional Budget Office (CBO). For
example:
Section 42102, to repeal and rescind grants to reduce air
pollution at ports would yield $0 in savings. The IRA invested
$3 billion to reduce air pollution at ports and in the
communities that surround them by financing the purchase of
zero-emission port equipment and technology and assisting U.S.
ports in developing and implementing climate action plans.
Repealing the Clean Ports Program would mean more pollution,
more harm to public health--especially in frontline
communities, and job losses from cutting these important
projects already underway.
Section 42108, to repeal and rescind grants for advanced
biofuels under the Renewable Fuel Program at EPA. Of the $15
million appropriated under the IRA, repeal of this program
would yield just $1 million in savings.
Section 42109, to repeal and rescind funds to implement the
American Innovation and Manufacturing (AIM) Act--a bipartisan
law to phase down hydrofluorocarbons (HFCs) that was supported
by industry and signed by President Trump himself. The IRA
appropriated over $38 million to EPA for AIM implementation,
and the repeal of this section would yield only $3 million in
savings, making the budgetary impact merely incidental.
Section 42113, to repeal subsections (a) and (b) of Section
134 of the Clean Air Act and rescind funds for the Methane
Emission and Waste Reduction Incentive Program. The IRA
established the Methane Emissions Reduction Program to control
excess methane pollution from the oil and gas industry. It
recognizes the cleanest performers, holds individual companies
responsible for their own leaks and wasted methane pollution,
drives innovation in the sector, creates good-paying jobs, and
supports projects to protect American communities from the
effects of climate change. The program provided $1.55 billion
in grants to assist industry with reducing current and legacy
methane emissions--a far cry from the $150 million on savings
CBO estimates will result from its repeal. Furthermore,
Republicans have made the Methane Emissions Reduction Program a
frequent target of their legislative ire, trying to repeal the
program or rescind its funds multiple times in the last few
years.\19\
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\19\118th Congress: H.R. 1, H.R. 1023, H.R. 2811, H.R. 8998. Rep.
Pfluger also introduced H.R. 313 in the 119th Congress.
---------------------------------------------------------------------------
Section 42114 would repeal and rescind funds for Climate
Pollution Reduction Grants (CPRG), which provides grants to
states, municipalities, and Indian Tribes to develop and
implement plans to reduce climate pollution and support jobs in
communities. The program has been tremendously popular, with
grants supporting state, local, and Tribal governments in
nearly all 50 states. All told, this section is anticipated to
yield only $70 million in savings, out of the $5 billion
authorized for the program.
Other political targets of Subtitle B include:
Section 42101, to repeal and rescind grants for clean
heavy-duty vehicles would yield $382 in cost savings, compared
to the $1 billion provided in the IRA for replacing heavy-duty
vehicles--like refuse trucks and school buses--with zero
emission vehicles. As outlined in the Republican majority
report, programs to support clean vehicle deployment are a
consistent focus of their political oversight activities.
Section 42103, to repeal section 134 of the Clean Air Act
and rescind unobligated funds for the Greenhouse Gas Reduction
Fund (GGRF). The Republican majority has a longstanding
political vendetta against GGRF, having attempted to repeal it
three times--even before the program was established and money
awarded. Republicans have also held multiple hearings and sent
several oversight letters to the agency, demonizing the
program.\20\ The budgetary significance of this provision is
questionable as only $19 million is available out of the entire
$27 billion appropriated. This remaining money is allocated for
administrative purposes. Recission of such funds will impact
EPA's ability to conduct oversight. During Committee
consideration, Democratic Members offered an amendment to
ensure that this section would not adversely affect American
families by increasing costs. GGRF is projected to have
significant economic benefits, including consumer energy cost
savings of $52 billion over the next 20 years.\21\ Every
---------------------------------------------------------------------------
\20\House Committee on Energy & Commerce, Chairmen Guthrie, Palmer,
and Griffith Investigate Greenhouse Gas Reduction Fund Grant Recipients
(April 11, 2025) (press release), House Committee on Energy & Commerce,
E&C Republicans Expand Oversight of EPA's $27 Billion Green Bank (Aug.
19, 2024) (press release), House Committee on Energy & Commerce, Chair
Rodgers Opening Remarks at Hearing to Hold the Radical Biden-Harris EPA
Accountable (Sept. 19, 2024) (press release), House Committee on Energy
& Commerce, Eliminating the Slush Fund for Biden's Radical Rush-to-
Green Agenda (March 20, 2024) (press release), House Committee on
Energy and Commerce, Holding the Biden-Harris EPA Accountable for
Radical Rush-to-Green Spending, 118th Cong. (Sept. 19, 2024).
Republican Committee member voted against the amendment and therefore
voted against affordable energy, economic development, and a cleaner
future.
\21\Energy Innovation, Clean Energy As Economic Development: An
Analysis Of The Greenhouse Gas Reduction Fund (May 12, 2025) (https://
energyinnovation.org/report/clean-energy-as-economic-development-an-
analysis-of-the-greenhouse-gas-reduction-fund/).
---------------------------------------------------------------------------
Section 42106, to repeal and rescind grants to reduce air
pollution in schools would yield only $12 million in savings.
The IRA funded air monitoring and programs to reduce air
pollution at schools in low-income and disadvantaged
communities. Over 100 million Americans live in counties with
unhealthy levels of air pollution, with children, the elderly,
low-income communities, and communities of color being
disproportionately at risk.\22\ Children are more susceptible
to air pollution and poor air quality is proven to affect
children's learning and performance at school.\23\ During the
markup, Democrats offered an amendment to strike this section,
yet Republicans rejected it, disagreeing with the policy intent
of the program and claiming that the funding does not help
reduce exposure. However, Republicans cannot rewrite facts. EPA
has received more applications to address indoor air quality in
schools than they can award, showing significant interest in
improving school air quality and significant need for resources
across the country.\24\ While Republicans may consider air
pollution monitoring and pollution control an extreme policy,
recission of such funds only hurts American children.
---------------------------------------------------------------------------
\22\Almost Half of Americans Breathe Unhealthy Air, Report Finds,
The New York Times (April 23, 2025).
\23\Pawel Wargocki, Jose Ali Porras-Salazar, Sergio Contrera, The
Relationships Between Classroom Air Quality and Children's Performance
in School, Science Direct (April 15, 2020).
\24\Environmental Protection Agency, Grant Funding to Address
Indoor Air Pollution at Schools (April 1, 2025) (https://www.epa.gov/
iaq-schools/grant-funding-address-indoor-air-pollution-schools).
---------------------------------------------------------------------------
Section 42117, to repeal and rescind funds for the
Environmental and Climate Justice Block Grants. The IRA
invested $3 billion for community-led projects that address
environmental and public health harms related to pollution and
climate change. Without this program, projects in Republican
and Democratic districts like resiliency hubs for natural
disaster centers, renewable energy investments in low-income
communities to lower energy costs, water contamination testing,
and air pollution reduction measures, would not have been
possible. During the markup, Democrats offered an amendment to
prevent the recission of funds for projects that improve health
outcomes in low-income communities. In arguing against this
commonsense amendment, Republicans members opined on the value
and purpose of environmental justice policies, demonstrating
the clear non-budgetary intention of this section.
Subtitle B also repeals and rescinds a number of smaller
IRA funded programs that help cut pollution, address climate
change, and protect public health, specifically: Section 42104
which seeks to repeal and rescind funds for DERA grants to cut
dirty diesel pollution from goods movement operations; Section
42105 which would repeal funds for various air pollution
monitoring activities under Sections 103 and 105 of the Clean
Air Act; Section 42107 which seeks to repeal and rescind Clean
Air Act section 135 the Low Emissions Electricity Program;
Section 42110 which seeks to repeal and rescind funds for
enforcement technology upgrades at EPA; Section 42111 which
repeals and rescinds funds meant to enhance the standardization
and transparency of corporate climate commitments; Sections
42112 and 42116, which repeal and rescind funds for
Environmental Product Declaration assistance and low embodied
carbon labeling for construction materials, to enhance the
standardization and transparency and increase competitiveness
of domestic manufacturing; and Section 42115, to repeal and
rescind funds to enhance the efficiency, accuracy, and
timeliness of environmental reviews, permitting, and project
approvals.
Beyond the IRA, Sections 42201 and 42301 propose to repeal
clean vehicle standards finalized by EPA and the National
Highway Traffic Safety Administration (NHTSA), jeopardizing air
quality and domestic manufacturing, giving a leg up to the
fossil fuel industry.\25\ In terms of cost savings, these two
provisions are redundant, and both double count savings
associated with repealing the IRA's EV tax credits.
---------------------------------------------------------------------------
\25\89 Fed. Reg. 27842, 89 Fed. Reg. 52540.
---------------------------------------------------------------------------
The Republican majority's ham-handed attempt to use the
budget reconciliation process to repeal policies they disagree
with is abundantly clear. When Congress passed the IRA, we made
a critical and historic down payment toward a stable climate
and shared economic opportunity powered by American-made clean
energy, to create a clean future for all. But this bill
proposes to throw that all away by eliminating the
environmental protections that keep families and communities
safe while doing nothing to lower energy costs. All in the
service of providing tax breaks for billionaires.
For the reasons stated above, we oppose Subtitle B.
Subtitle C--Communications, Providing for Reconciliation Pursuant to H.
Con. Res. 14
PART 1--SPECTRUM AUCTIONS
Spectrum is a valuable natural resource because it is an
essential building block for connecting family and friends as
well as delivering critical services such as education and
health care to people across the country. It is also critical
to everyday safety for first responders. Without spectrum, this
country would not have radio stations, smartphones, the app
economy, or drones. Many of these technological advancements
were developed by American innovators, pushing the limits on
the ways spectrum could be used in new and exciting ways. But
past performance does not guarantee future results. As such,
Congressional Democrats remain committed to ensuring that
America remain a leader in spectrum policy.
To that end, for more than three decades, Congress has
granted the Federal Communications Commission (FCC) the
authority to make spectrum available using competitive bidding,
or auctions. Granting the FCC this authority has served both
the public and the nation well. Today, the United States is a
global leader in delivering 5G, advanced Wi-Fi, Bluetooth, and
other next-generation wireless technologies to consumers across
the country. At the same time, spectrum auctions, which have
raised over $230 billion for the federal government, have
helped fund important public communications priorities,
including the Rip and Replace reimbursement program, the
construction of FirstNet, and broadband infrastructure grants.
This is why spectrum policy has long been an area of bipartisan
agreement. In fact, Congressional Democrats have worked closely
with Congressional Republicans for the past three years to pass
bills through this Committee to extend the FCC's auction
authority and use spectrum proceeds to pay for bipartisan
spending priorities that will benefit the public good.
One of the most recent areas of bipartisan agreement was
the need to fund Next Generation 9-1-1. This funding would
modernize the country's 9-1-1 networks to allow the public to
use modern day communications tools like sending texts, images,
and videos to first responders and emergency personnel. This
technology will reduce response times and equip first
responders with life-saving information before they arrive at
the scene, which will better assist people in their critical
time of need. Unfortunately, with Subtitle C, Part 1,
Congressional Republicans are now abandoning this bipartisan
work and marching ahead to use spectrum auction proceeds to
help fund tax breaks for the wealthy. Congressional Democrats
do not believe this is how spectrum auction proceeds should be
used.
Ultimately, while Congressional Democrats agree that
failure to make additional spectrum available for commercial
wireless use risks our nation falling behind our global
counterparts, particularly China, Congressional Democrats
object to using spectrum auction proceeds to fund tax cuts that
only benefit a few instead of investing in all Americans
regardless of their income or zip code.
PART 2--ARTIFICIAL INTELLIGENCE AND INFORMATION TECHNOLOGY
MODERNIZATION
Subsection (a) of Section 43201 of the bill, appropriates
$500 million to the Department of Commerce to modernize and
secure federal information technology (IT) systems. Subsection
(b) authorizes the funds to be spent to replace and modernize
the Department of Commerce's legacy business systems with
commercial artificial intelligence (AI) and automated decision
systems, to facilitate the development of AI models that
increase operational efficiency and service delivery, and to
improve the cyber security of IT systems within the Department
of Commerce. Modernizing the Department of Commerce's IT
systems, incorporating AI into those systems, and improving the
agency's cybersecurity protections are worthwhile goals, but
the Committee has had no hearings to explore IT modernization,
AI adoption, or cybersecurity needs of the Department of
Commerce's IT system, and it is therefore impossible to assess
whether the amount of money appropriated or the scope of the
authorization are appropriate or whether these provisions are
unnecessarily throwing $500 million at unexplored issues;
thereby inviting waste, fraud and abuse from the Big Technology
companies likely to bid on the projects.
Subsection (c) of Section 43201 is wholly unrelated to IT
modernization, AI adoption, and cybersecurity protections of
the IT systems at the Department of Commerce provided for in
subsections (a) and (b). Subsection (c) imposes an
extraordinary 10-year moratorium on state and local enforcement
of their own laws regulating AI models, AI systems, or
automated decision-making systems. The Department of Commerce's
IT modernization efforts are not subject to state and local
laws in any way and therefore would not be impeded by
enforcement of the state and local laws this moratorium would
suspend. This provision is a gift to Big Tech and
extraordinarily harmful to all Americans. It would prevent
enforcement of state laws that protect consumers' privacy,
prohibit the use of AI to commit financial fraud and to steal
elections, prohibit algorithmic bias in housing and credit,
prohibit harmful uses of facial recognition technology, and
protect consumers from AI systems that put their mental health
and physical safety at risk. It would favor companies that use
AI and automated decision making to exploit consumers for
profit over honest small businesses using AI for legitimate
purposes. It would also prevent enforcement of state laws and
regulations governing the use of AI by local and state
governments for all sorts of beneficial purposes including
rules governing local school districts and their procurement of
education technology powered by automated decision making
systems; use and evaluation of AI systems by state and local
police departments; and even use of AI and automated decision
making systems that assist in identifying attempts to defraud
programs funded by state and local governments. This state
enforcement ban would occur at a time when Congress has passed
a very limited set of law to address potential risks to
consumers.
The Committee has heard testimony that AI and automated
decision-making systems and tools can have enormous benefits,
and that they carry enormous risks. There are countless
examples of AI systems that provide false information, erode
consumers' privacy, unjustifiably discriminate against people
in employment, housing, credit, and countless other situations.
There are regular reports of AI systems used to further
financial scams and election fraud, and of online algorithms
that put consumers', including children's and teens', mental
and physical safety at risk. At a minimum, in the absence of
robust federal action to prevent the harmful effects of AI,
Congress should be learning from the work done by states on AI
and automated decision-making systems. We should be working to
enact federal laws that protect consumers from the negative
consequences of poorly understood AI models and badly designed
automated decision-making systems. And we should allow states
and localities to decide how to regulate their own use of AI
and automated decision-making systems. Instead, this
enforcement ban would leave American consumers and especially
our children at the mercy of Big Tech and their powerful and
invasive algorithms by preventing enforcement of existing state
laws and providing nothing in their place.
For the reasons stated above, we oppose Subtitle C.
Subtitle D--Health, providing for reconciliation pursuant to
H. Con. Res. 14
Subtitle D raises deep concerns about the effects that it
would have on health coverage for the nearly 80 million people
who rely on Medicaid and the Children's Health Insurance
Program, and the more than 24 million people who rely on
Affordable Care Act (ACA) Marketplace.\26\ Further, Subtitle D
would have devastating effects the on the entire nation's
health care safety net--leading to hospital, nursing home,
home- and community-based provider, and outpatient clinic
closures, as well as reductions in services, impacting all
Americans' access to care. Taken together, Subtitle D
eviscerates health coverage, state budget flexibility, and
provider payments, and will have a catastrophic effect on our
economy, jobs, and Americans' health and well-being as the
nation heads toward an increasingly likely Trump recession.\27\
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\26\Centers for Medicare & Medicaid Services, October 2024:
Medicaid and CHIP Eligibility Operations and Enrollment Snapshot (Jan.
15, 2025).
\27\Economists Tell Us Their Forecasts for Recession Risk, Growth
and Inflation, The Wall Street Journal (Apr. 17, 2025).
---------------------------------------------------------------------------
Subtitle D would itself leave 8.6 million Americans who
rely on Medicaid and the ACA Marketplace for their health care
entirely uninsured. When coupled with Subtitle D's omission of
an extension to current-law enhanced Advance Premium Tax
Credits (APTCs) that enable low- and middle-income Americans to
access affordable health coverage on the ACA Marketplaces, 13.7
million Americans would be left uninsured. Coverage losses for
the 7.6 million people expected to lose Medicaid coverage stem
in large part from provisions that add myriad administrative
complexities to the already-burdensome process that low-income
Americans must comply with to access health coverage through
Medicaid.
Section 44141 mandates that all states establish work
reporting requirements as a condition of Medicaid eligibility--
terminating health coverage for those who are currently
enrolled in Medicaid and do not manage to comply with the
reporting requirements and preventing those who cannot meet the
requirements from ever enrolling. The design of these
burdensome red tape requirements is much like the design of
Georgia's program, through which a meager 7,000 people have
managed to enroll in the nearly two years it has been in effect
out of hundreds of thousands of eligible to enroll in the
program.\28\\29\ CBO estimates that these paperwork
requirements alone would eliminate health coverage for nearly 5
million low-income Americans subjected to them--leaving them
uninsured. The reporting requirements apply to the more than 20
million Americans enrolled in Medicaid through the ACA Medicaid
expansion eligibility group, encompassing adults ages 19-65 who
qualify for Medicaid based on their low (https://gbpi.org/
georgias-pathways-to-coverage-program-the-first-year-in-review/
). income (up to 138 percent of the federal poverty level, or,
in the case of a one-person household, making less than $1,760
per month).\30\\31\
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\28\Georgia Pathways, Data Tracker (https://
www.georgiapathways.org/data-tracker) (accessed May 16, 2025).
\29\GBPI, Georgia's Pathways to Coverage Program: The First Year in
Review (Oct. 29, 2024) (https://gbpi.org/georgias-pathways-to-coverage-
program-the-first-year-in-review/).
\30\KFF, Medicaid Expansion Enrollment (June 2024) (https://
www.kff.org/affordable-care-act/state-indicator/medicaid-expansion-
enrollment/?currentTimeframe=0&sortModel=%7B%22
colId%22:%22Location%22,%22sort%22:%22asc%22%7D).
\31\U.S. Department of Health and Human Services, 2025 Poverty
Guidelines: 48 Contiguous States (all states except Alaska and Hawaii)
(accessed May 16, 2025).
---------------------------------------------------------------------------
The low-income Americans to whom these reporting
requirements would apply include pregnant women,\32\\33\ low-
income parents,\34\\35\ people with disabilities,\36\
veterans,\37\\38\ low-income workers without access to
affordable employer-sponsored insurance,\39\ and people with
complex medical conditions and health needs, including those
with mental health and substance use disorder treatment
needs.\40\ While the text includes exceptions for some (but not
all) of these groups of people from the requirements to
participate in qualifying activities like working 80 hours per
month, to receive such an exception, most individuals would be
required to demonstrate that they qualify for the exceptions.
From experience in every state that has implemented or began to
implement a work reporting requirement at the state level,
these exceptions have not worked.\41\\42\\43\
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\32\KFF, How Does the ACA Expansion Affect Medicaid Coverage Before
and During Pregnancy? (Oct. 26, 2022) (https://www.kff.org/medicaid/
issue-brief/how-does-the-aca-expansion-affect-medicaid-coverage-before-
and-during-pregnancy/).
\33\Jiajia Chen, Association of Medicaid Expansion Under the
Affordable Care Act With Medicaid Coverage in the Prepregnancy,
Prenatal, and Postpartum Periods, Science Direct (Nov. 2023).
\34\Urban Institute, 2.4 Million Parents Would Lose Medicaid If
States Eliminate the ACA Expansion (May 9, 2025) (https://
www.urban.org/research/publication/24-million-parents-would-lose-
medicaid-if-states-eliminate-aca-expansion).
\35\KFF, 5 Key Facts About Medicaid Expansion (Apr. 25, 2025)
(https://www.kff.org/medicaid/issue-brief/5-key-facts-about-medicaid-
expansion/).
\36\KFF, People with Disabilities Are At Risk of Losing Medicaid
Coverage Without the ACA Expansion (Nov. 2, 2020) (https://www.kff.org/
affordable-care-act/issue-brief/people-with-disabilities-are-at-risk-
of-losing-medicaid-coverage-without-the-aca-expansion/).
\37\KFF, Medicaid's Role in Covering Veterans (Jun. 2017) (https://
files.kff.org/attachment/Infographic-Medicaids-Role-in-Covering-
Veterans).
\38\National Health Law Program, Five Key Facts: Veterans and
Medicaid Expansion (Jul. 23, 2013) (https://healthlaw.org/resource/
five-key-facts-veterans-and-medicaid-expansion/?issue_area=defending-
medicaid).
\39\University of New Hampshire, Full-Time Employment Not Always a
Ticket to Health Insurance (Mar. 20, 2018) (https://carsey.unh.edu/
publication/full-time-employment-not-always-ticket-health-insurance).
\40\KFF, A Look at Substance Use Disorders (SUD) Among Medicaid
Enrollees (Feb. 17, 2023) (https://www.kff.org/mental-health/issue-
brief/a-look-at-substance-use-disorders-sud-among-medicaid-enrollees/).
\41\Center on Budget and Policy Priorities, Pain But No Gain:
Arkansas' Failed Medicaid Work-Reporting Requirements Should Not Be a
Model (Aug. 8, 2023) (https://www.cbpp.org/research/health/pain-but-no-
gain-arkansas-failed-medicaid-work-reporting-requirements-should-not-
be).
\42\National Health Law Program, ``Unfit'' to Work? How Medicaid
Work Requirements Hurt People with Disabilities (Dec. 2024) (https://
healthlaw.org/wp-content/uploads/2024/12/
Machledt_NHeLP_WorkRequirementsandPeoplewithDisabilities_12162024_FINAL.
pdf).
\43\KFF, Disability and Technical Issues Were Key Barriers to
Meeting Arkansas' Medicaid Work and Reporting Requirements in 2018
(Jun. 11, 2019) (https://www.kff.org/medicaid/issue-brief/disability-
and-technical-issues-were-key-barriers-to-meeting-arkansas-medicaid-
work-and-reporting-requirements-in-2018/).
---------------------------------------------------------------------------
Making matters even more devastating for the low-income
Americans who would lose their Medicaid coverage due to these
paperwork requirements, Section 44141 further punishes them by
barring them from subsidies on the ACA Marketplace--leaving
those who could otherwise purchase subsidized health care
coverage with no other affordable health coverage option at
all. In this report, Republicans attempt to justify these work
reporting requirements by indicating that ``Medicare
beneficiaries are only eligible for the program because they
worked and paid into the system,'' yet no such work reporting
requirement applies to Medicare eligibility.\44\
---------------------------------------------------------------------------
\44\U.S. Social Security Administration, Medicare (https://
www.ssa.gov/pubs/EN-05-10043.pdf) (accessed May 16, 2025).
---------------------------------------------------------------------------
Among the other provisions that subject low-income
Americans to additional processes and hurdles to retaining
their health coverage is Section 44108, which requires
individuals eligible for Medicaid via the ACA Medicaid
expansion to complete eligibility redeterminations every six
months--on top of up-to-monthly reporting of compliance with
Medicaid work reporting requirements. Increasing the frequency
of eligibility verifications would decimate health coverage
gains and increase enrollment churn and undermine recent
initiatives to provide longer enrollment periods for eligible
Americans in recognition of the coverage and cost impacts of
frequent, ineffective verifications of eligibility.\45\\46\
---------------------------------------------------------------------------
\45\Center on Budget and Policy Priorities, Continuous Eligibility
Keeps People Insured and Reduces Costs (May 4, 2021) (https://
www.cbpp.org/research/health/continuous-eligibility-keeps-people-
insured-and-reduces-costs).
\46\The Commonwealth Fund, Ensuring Continuous Eligibility for
Medicaid and CHIP: Coverage and Cost Impacts for Adults (Sep. 26, 2023)
(https://www.commonwealthfund.org/publications/issue-briefs/2023/sep/
ensuring-continuous-eligibility-medicaid-impacts-adults).
---------------------------------------------------------------------------
In the same vein, sections 44101 and 44102 would prevent
implementation or enforcement until 2035 of two rules finalized
by the Biden Administration to simplify eligibility and
enrollment processes for the lowest-income Medicare
beneficiaries who also rely on Medicaid for coverage, people
with disabilities, and children eligible for the Children's
Health Insurance Program (CHIP)--cutting 2.3 million of them
off of Medicaid coverage they rely on to help pay for their
prescriptions and go to the doctor, and leaving 600,000 of them
entirely uninsured.\47\ Elimination of these rules also subject
children eligible for CHIP to months-long waiting periods,
arbitrary caps on covered benefits (based on lifetime and
annual dollar limits), and allow children to be locked out of
their health coverage after a period of non-payment of
premiums.\48\
---------------------------------------------------------------------------
\47\Justice in Aging, Final Rule to Streamline Access to Medicaid
(Jun. 27, 2024) (https://justiceinaging.org/final-rule-to-streamline-
access-to-medicaid/), National Health Law Program, New Medicaid & CHIP
Eligibility and Enrollment Rule: What Advocates Need to Know (Apr. 17,
2024) (https://healthlaw.org/wp-content/uploads/2024/04/Eligibility-
Enrollment-Rule-Guide-4-22-24-Update.pdf), Georgetown University,
Frequently Asked Questions about the Medicaid & CHIP Eligibility and
Enrollment Rule (Feb. 6, 2025) (https://ccf.georgetown.edu/2025/02/06/
medicaid-chip-eligibility-and-enrollment-rule/), Letter from Phillip L.
Swagel, Director, Congressional Budget Office, to Sen. Ron Wyden,
Ranking Member, Senate Committee on Finance; Rep. Frank Pallone, Jr.,
Ranking Member, House Committee on Energy and Commerce (May 7, 2025).
\48\Georgetown University, Medicaid Eligibility and Enrollment Rule
Explainer (Apr. 11, 2024) (https://ccf.georgetown.edu/2024/04/11/
medicaid-eligibility-and-enrollment-rule-explainer/).
---------------------------------------------------------------------------
In this report, Republicans attempt to justify their cuts
by falsely claiming that ``the growth in total Medicaid
spending and enrollment is a growing concern as it impedes the
program's ability to provide care for those vulnerable
populations who rely most on Medicaid,'' suggesting that
terminating coverage for people eligible thanks to the ACA
Medicaid expansion would somehow increase funds to provide
coverage to individuals who are eligible through other
pathways. In reality, not one provision of Subtitle D would
make Medicaid eligibility or benefits more generous for any
person. Further, research has consistently and clearly
demonstrated that eligibility for children, pregnant women, and
parents is higher in expansion states compared to non-expansion
states and that Medicaid spending per-enrollee is higher in
expansion states than non-expansion states.\49\ Further, state
spending on Medicaid expansion is, on average, less than three
percent of all state spending on Medicaid, despite Medicaid
expansion representing 23 percent of all Medicaid beneficiaries
nationally.\50\\51\ In many cases, Medicaid expansion generates
enough savings and/or new revenue to more than offset a state's
share of the cost, and states have even used the budget savings
generated by expansion to further improve access to services
for people with disabilities, including long-term care
services.\52\\53\
---------------------------------------------------------------------------
\49\See note 10.
\50\KFF, Medicaid Expansion Spending (https://www.kff.org/medicaid/
state-indicator/medicaid-
expansion-spending/?dataView=
1¤tTimeframe=0&sortModel=%7B%22colId%22:%22
Expansion%20Group%20%20State%20Spending%22,%22sort%22:%22desc%22%7D)
(accessed May 16, 2025).
\51\KFF, Medicaid Enrollees by Enrollment Group (https://
www.kff.org/medicaid/state-indicator/distribution-of-medicaid-
enrollees-by-enrollment-group/?dataView=1¤tTimeframe=
0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D)
(accessed May 16, 2025).
\52\Center on Budget and Policy Priorities, Medicaid Expansion:
Frequently Asked Questions (Jun. 14, 2024) (https://www.cbpp.org/
research/health/medicaid-expansion-frequently-asked-questions-0).
\53\The Commonwealth Fund, The Impact of Medicaid Expansion on
States' Budgets (May 5, 2020) (https://www.commonwealthfund.org/
publications/issue-briefs/2020/may/impact-medicaid-expansion-states-
budgets).
---------------------------------------------------------------------------
In addition to terminating health coverage for 8.6 million
Americans, Subtitle D includes several provisions that would
increase out-of-pocket costs and medical debt and devastate
access to care for low-income American families and seniors.
For example, Section 44122 reduces the period of time for which
all Medicaid beneficiaries can receive retroactive coverage
from three months prior to application to just one. As an
example, this provision harms elderly Americans whose health
declines rapidly and unexpectedly need to apply for Medicaid to
receive coverage for long-term care (which Medicare does not
provide). Iowa previously waived retroactive eligibility and
nursing homes refused to take new residents while their
Medicaid applications were still pending and, in Indiana,
retroactive coverage protected low-income parents from incurred
costs averaging $1,561 per person.\54\
---------------------------------------------------------------------------
\54\Letter from Cynthia Pederson, Interim Iowa State Long-Term Care
Ombudsman, to Seema Verma, Administrator, Centers for Medicare &
Medicaid Services (Sep. 5, 2017), Letter from Vikki Wachino, Director,
Centers for Medicare & Medicaid Services, to Tyler Ann McGuffee,
Insurance and Healthcare Policy Director, Office of Gov. Michael R.
Pence (Jul. 29, 2016).
---------------------------------------------------------------------------
Subtitle D also would prohibit federal Medicaid funding for
Planned Parenthood and its affiliates across the country.
Section 44126 creates a specific and narrow definition intended
to target certain providers in the Medicaid program that
separately, and without federal Medicaid funding, provide
abortion services. As a result, these providers would no longer
be able to serve Medicaid beneficiaries or provide routine
preventive and reproductive health care services in the
Medicaid program, including contraception counseling and birth
control, breast and cervical cancer screenings and pap smears,
sexually transmitted infection (STI) screenings, and
preconception counseling. Even in the nearly two-dozen states
that have outlawed or severely restricted abortion care,
Medicaid beneficiaries would be unable to seek care at Planned
Parenthood as a result of this provision. Millions of Medicaid
beneficiaries would be left without the ability to seek care
from their provider of choice solely because of the
Republicans' hostility towards Planned Parenthood and the
ability for women to seek comprehensive reproductive health
care.
As these and similar provisions dramatically heighten rates
of uninsurance and uncompensated care for providers, Subtitle D
cripples states' ability to finance their Medicaid programs or
adequately increase payment rates to already-struggling
providers.\55\ Section 44132 establishes a moratorium on new or
increased provider taxes, which states use along with general
funds to finance their Medicaid programs. Without the ability
to generate new provider taxes, states would reduce payment
rates to providers (which will already have higher
uncompensated care), cut back on the benefits they provide (for
the people who remain enrolled in the program), and further
reduce coverage.\56\ As acknowledged by Republican majority
counsel during the Committee's markup of Subtitle D, this
moratorium on new and increased provider taxes would apply
regardless of the state's circumstances or the purpose of the
provider tax. For example, a state could not increase or
establish new provider taxes to generate revenue to support the
Medicaid program if uncompensated care costs increase given the
13.7 million people expected to become uninsured; if there is
an economic downturn, when Medicaid spending tends to grow and
state general fund revenues decrease; if a natural disaster
like a hurricane hits, or if the state would like to improve
access for home- and community-based services that elderly
Americans and people with disabilities, including children,
rely on to live in their homes and communities (and for which
such people are currently subjected to years-long and even
decades-long waiting lists).\57\ Section 44133 would further
devastate states' ability to shore up providers that will see a
dramatic increase in uncompensated care due to this
reconciliation bill, by preventing states from directing
managed care plans to make payments to providers at the same
levels they are permitted to make them today.
---------------------------------------------------------------------------
\55\Fierce Healthcare, Nearly half of rural hospitals in the red,
432 vulnerable to closure, report finds (Feb. 13, 2025) (https://
www.fiercehealthcare.com/providers/46-rural-hospitals-red-432-
vulnerable-closure-report-finds).
\56\See note 25.
\57\MACPAC, Considerations for Countercyclical Financing
Adjustments in Medicaid (June 2020) (https://www.macpac.gov/
publication/considerations-for-countercyclical-financing-adjustments-
in-medicaid/), U.S. Government Accountability Office, Medicaid in Times
of Crisis (GAO-21-343SP) (Feb. 2021), Florida Senate, Bill Analysis and
Fiscal Impact Statement: CS/SB 1758 (Jan. 29, 2024), Click2Houston,
Family fights for change after special needs daughter placed on service
waitlist for over 16 years (Sep. 2, 2024) (https://
www.click2houston.com/news/local/2024/09/02/family-fights-for-change-
after-special-needs-daughter-placed-on-service-waitlist-for-over-16-
years/), KFF, A Look at Waiting Lists for Medicaid Home- and Community-
Based Services from 2016 to 2024 (Oct. 31, 2024) (https://www.kff.org/
medicaid/issue-brief/a-look-at-waiting-lists-for-medicaid-home-and-
community-based-services-from-2016-to-2024/), Wave Louisville, Waiver
wait list growing, swallowing hope for parents of special needs kids
(Aug. 5, 2024) (https://www.wave3.com/2024/08/05/waiver-wait-list-
growing-swallowing-hope-parents-special-needs-kids/).
---------------------------------------------------------------------------
Section 44201 will make it more difficult for individuals
to enroll in coverage in the ACA Marketplace, will take away
coverage from eligible individuals, and will increase
consumers' health care costs. Provisions in Section 44201 will
result in at least 1.8 million individuals losing their health
insurance. The section codifies harmful policies included in
the 2025 Marketplace Integrity and Affordability Proposed Rule
released by the Trump Administration on March 10, 2025.\58\
According to the Trump Administration's own analysis of the
policies in the proposed rule, two million Americans will lose
coverage, and consumers will experience $3 billion increase in
their premiums over four years.\59\ The provisions in Section
44201 will impose new restrictions on the lowest income
individuals accessing coverage, new bureaucratic paperwork
requirements, and increased out-of-pocket costs for consumers.
---------------------------------------------------------------------------
\58\Department of Health and Human Services, Center for Medicare
and Medicaid Services, Patient Protection and Affordable Care Act;
Marketplace Integrity and Affordability, 90 Fed. Reg. 12942 (Mar. 19,
2025) (proposed rule).
\59\Department of Health and Human Services, Center for Medicare
and Medicaid Services, Patient Protection and Affordable Care Act;
Marketplace Integrity and Affordability, 90 Fed. Reg. 12942 (Mar. 19,
2025) (proposed rule).
---------------------------------------------------------------------------
Section 44201 will shorten the open enrollment period to
just six weeks and will eliminate special enrollment periods
for low-income Americans. Both policies will depress ACA
Marketplace enrollment, raise health care costs for millions of
consumers, and make it harder for the lowest-income families to
enroll in coverage who experience job changes or income
fluctuations. The section also includes several policies
related to enrollment verification, which the Trump
Administration concedes will establish enrollment barriers and
deter Marketplace enrollment. Multiple polices in this section
related to income verification will create barriers to coverage
and increase consumer burden by increasing the amount of time
it takes people to get enrolled in coverage. These policies
will mostly harm low-income families and individuals with
variable or unpredictable incomes, such as small business
owners and self-employed individuals. As a result of the
substantial increase in burden, fewer healthy people would
enroll, worsening the risk pool, and raising premiums for
everyone.
Multiple policies in Section 44201 will raise costs for
consumers by increasing premiums and cost-sharing and reducing
the tax credit that helps make coverage affordable. A provision
in Section 44201 will require individuals who are automatically
reenrolled in zero-dollar premium plans to pay nuisance fees.
Both auto-enrollment and zero-premium plans are meant to
support lower income workers and their families. Even a nominal
fee applied to this will make it difficult for these
individuals to continue to afford health coverage. The section
would also prohibit individuals who qualify for more generous
coverage from being automatically re-enrolled into a higher
quality plan, and only harms consumers by preventing them from
accessing better coverage at a lower cost. Finally, the section
makes changes to the methodology for determining the premium
adjustment percentage and includes changes to the allowable
variation in actuarial value (AV). This will result in higher
out-of-pocket costs for commercially insured Americans--
including those with employer-sponsored insurance--and lower
tax credits for individuals purchasing coverage on their own.
Additionally, it will allow insurers to offer weaker coverage
which reduces affordability and raises out-of-pocket costs for
American families. In summary, policies in Section 44201 will
result in more Americans uninsured, worsen coverage for
individuals purchasing coverage on their own, and will raise
health care costs for millions of individuals.
Lastly, assertions that enrollees in Marketplace coverage
engaged in fraud are factually inaccurate. Any fraudulent
activity in the Marketplace was perpetrated by rogue insurance
agents and other bad actors--not individual health coverage
enrollees. The Biden Administration quickly clamped down on the
problem, and in fact, the Biden Administration blocked two bad
acting brokers from accessing consumer information as it was
found that they were involved in `anomalous activity.' Instead
of going after the true fraud, the Trump Administration fired
80 workers from the Centers for Medicare & Medicaid Services
(CMS) group that oversees implementation of these Marketplaces,
effectively gutting resources from the people tasked with
cracking down on true fraud in the first place. More
importantly none of the policies in Section 44201 address fraud
by agents and brokers, and instead only seek to punish
individuals who need health insurance by heaping bureaucracy
and red tape on them.
While the Republican majority claims Subtitle D will
``address the rising costs of prescription medications for
seniors in Medicare . . .,'' in reality, it directly raises
costs. In addition to the detrimental cuts to the Medicaid
program and the ACA, Subtitle D also undermines the Medicare
Drug Price Negotiation Program that was established in the
Inflation Reduction Act and, for the first time, provided the
Secretary of the Department of Health and Human Services (HHS)
with the authority and mandate to negotiate with pharmaceutical
manufacturers to lower the price of prescription drugs in the
Medicare program. This provision would expand the drugs
eligible for exclusion from the Negotiation Program under
1192(e) of the Social Security Act by permitting drugs with
multiple rare disease indications to be exempt from selection
as a negotiation-eligible drug. This was not the intent of the
provision when the Inflation Reduction was enacted and will
only serve to prevent more beneficiaries, particularly those
with rare diseases, from obtaining lower drug prices in the
Medicare program.
Additionally, the provision permits pharmaceutical
manufacturers to potentially have years or even decades longer
on the market before being selected for negotiation by changing
the calculation for the amount of time elapsed prior to
negotiation. Should a drug product or biological product's
first indication on the market be for a rare disease, that time
will not be taken into account for the purposes of calculating
the 9- or 13-year delay, respectively, required under law
before a Maximum Fair Price can go into effect. As a result,
manufacturers will be able to game this provision to maximize
the amount of time on the market prior to their drug being
potentially negotiation-eligible. This provision costs
taxpayers nearly $5 billion and costs many Medicare
beneficiaries years of higher prescription drug prices. Section
44301 is a giant gift for the pharmaceutical industry,
resulting in continued higher prescription drug costs for the
American people.
For the reasons stated above, we oppose Section D and this
entire bill.
Frank Pallone, Jr.,
Ranking Member.
CONTENTS
Page
Legislative Language............................................. 641
Transmittal Letter............................................... 645
Purpose and Summary.............................................. 646
Section-by-Section Analysis of the Legislation................... 646
Committee Cost Estimate.......................................... 647
New Budget Authority and CBO Cost Estimate....................... 647
Committee Oversight Findings..................................... 654
Committee Votes.................................................. 654
Earmark Statement................................................ 697
Unfunded Mandates Statement...................................... 697
Applicability to the Legislative Branch.......................... 697
Changes in Existing Law Made by the Bill, as Reported............ 697
Duplication of Federal Programs.................................. 706
Committee Views.................................................. 706
Minority Views or Supplemental Views, Additional Views, or
Dissenting Views............................................... 709
Legislative Language
(SEE ARTIFACT NEXT PAGE)
Committee Print, as Reported by the Committee on Financial Services
TITLE V--COMMITTEE ON FINANCIAL SERVICES
SEC. 50001. GREEN AND RESILIENT RETROFIT PROGRAM FOR MULTIFAMILY FAMILY
HOUSING.
The unobligated balance of amounts made available under
section 30002(a) of Public Law 117-169 (commonly referred to as
the ``Inflation Reduction Act''; 136 Stat. 2027) are rescinded.
SEC. 50002. PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD.
(a) During the period beginning on the date of enactment of
this Act and ending on the transfer date--
(1) all intellectual property retained by the Public
Company Accounting Oversight Board (``Board'') in
support of its programs for registration, standard-
setting, and inspection shall be shared with the
Securities and Exchange Commission (``Commission'');
and
(2) pending enforcement and disciplinary actions of
the Board shall be referred to the Commission or other
regulators in accordance with section 105 of the
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215).
(b) Effective on the transfer date--
(1) all unobligated fees collected under section
109(d) of the Sarbanes-Oxley Act of 2002 shall be
transferred to the general fund of the Treasury, and
the Commission may not collect fees under such section
109(d);
(2) the duties and powers of the Board in effect as
of the day before the transfer date, other than those
described in section 107 of the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7217), shall be transferred to the
Commission;
(3) the Commission may not use funds to carry out
section 107 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7217) for activities related to overseeing the
Board;
(4) the Board shall transfer all intellectual
property described in subsection (a)(1) to the
Commission;
(5) existing processes and regulations of the Board,
including existing Board auditing standards, shall
continue in effect unless modified through rule making
by the Commission; and
(6) any reference to the Board in any law,
regulation, document, record, map, or other paper of
the United States shall be deemed a reference to the
Commission.
(c) Any employee of the Board as of the date of enactment of
this Act may--
(1) be offered equivalent positions on the Commission
staff, as determined by the Commission, and submit to
the Commission's standard employment policies; and
(2) receive pay that is not higher than the highest
paid employee of similarly situated employees of the
Commission.
(d) In this section, the term ``transfer date'' means the
date established by the Commission for purposes of this
section, except that such date may not be later than the date
that is 1 year after the date of enactment of this Act.
SEC. 50003. BUREAU OF CONSUMER FINANCIAL PROTECTION.
Section 1017(a)(2) of the Consumer Financial Protection Act
of 2010 (12 U.S.C. 5497(a)(2)) is amended--
(1) in subparagraph (A)(iii)--
(A) by striking ``12 percent'' and inserting
``5 percent''; and
(B) by striking ``2013'' and inserting
``2025''; and
(2) by striking subparagraph (C) and inserting the
following:
``(C) Limitation on unobligated balances.--
With respect to a fiscal year, the amount of
unobligated balances of the Bureau may not
exceed 5 percent of the dollar amount referred
to in subparagraph (A)(iii), as adjusted under
subparagraph (B). The Director shall transfer
any excess amount of such unobligated balances
to the general fund of the Treasury.''.
SEC. 50004. CONSUMER FINANCIAL CIVIL PENALTY FUND.
Section 1017(d) of the Consumer Financial Protection Act of
2010 (12 U.S.C. 5497(d)) is amended--
(1) in paragraph (2)--
(A) in the first sentence, by inserting
``direct'' before ``victims''; and
(B) by striking the second sentence; and
(2) by adding at the end the following:
``(3) Treatment of excess amounts.--With respect to a
civil penalty described under paragraph (1), if the
Bureau makes payments to all of the direct victims of
activities for which that civil penalty was imposed,
the Bureau shall transfer all amounts that remain in
the Civil Penalty Fund with respect to that civil
penalty to the general fund of the Treasury.''.
SEC. 50005. FINANCIAL RESEARCH FUND.
Section 155 of the Financial Stability Act of 2010 (12 U.S.C.
5345) is amended by adding at the end the following:
``(e) Limitation on Assessments and the Financial Research
Fund.--
``(1) Limitation on assessments.--Assessments may not
be collected under subsection (d) if the assessments
would result in--
``(A) the Financial Research Fund exceeding
the average annual budget amount; or
``(B) the total assessments collected during
a single fiscal year exceeding the average
annual budget amount.
``(2) Transfer of excess funds.--Any amounts in the
Financial Research Fund exceeding the average annual
budget amount shall be deposited into the general fund
of the Treasury.
``(3) Average annual budget amount defined.--In this
subsection the term `average annual budget amount'
means the annual average, over the 3 most recently
completed fiscal years, of the expenses of the Council
in carrying out the duties and responsibilities of the
Council that were paid by the Office using amounts
obtained through assessments under subsection (d).''.
Transmittal Letter
House of Representatives,
Committee on Financial Services,
Washington, DC, May 7, 2025.
Hon. Jodey C. Arrington,
Chairman, Committee on the Budget,
House of Representatives, Washington, DC.
Dear Chairman Arrington: Pursuant to section 2001 of the
Concurrent Resolution on the Budget for Fiscal Year 2025, I
hereby transmit these recommendations, which have been approved
by vote of the Committee on Financial Services, and the
appropriate accompanying material including supplemental,
minority, additional, or dissenting views, to the House
Committee on the Budget. This submission is in order to comply
with reconciliation directives included in H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025, and
is consistent with section 310 of the Congressional Budget Act
of 1974.
Sincerely,
French Hill,
Chairman.
Purpose and Summary
H. Con. Res. 14, Concurrent Resolution on the Budget for
Fiscal Year 2025, directs 11 authorizing committees in the
House of Representatives to each submit to the Committee on the
Budget recommendations that either increase the deficit up to a
specified amount or reduce the deficit by at least a specified
amount over the period of fiscal years 2025 through 2034. The
Committee on Ways and Means is also instructed to submit
changes in laws within its jurisdiction to increase the debt
limit.
H. Con. Res. 14 instructs the Financial Services Committee
to submit changes in laws within its jurisdiction to reduce the
deficit by not less than $1,000,000,000 for the period of
fiscal years 2025 through 2034. Accordingly, the Committee
Print being considered at this markup provides on a preliminary
estimate more than $5 billion in savings.
Section-by-Section Analysis of the Legislation
Section 50001. Green and Resilient Retrofit Program for Multifamily
Family Housing
Section 50001 rescinds the unobligated balance of amounts
remaining under section 300002(a) of the Inflation Reduction
Act.
Section 50002. Public Company Accounting Oversight Board
Section 50002 eliminates the Public Company Accounting
Oversight Board's (PCAOB) authority to independently collect
and spend accounting support fees and instead directs that such
fees be remitted to the U.S. Treasury. The Securities and
Exchange Commission (SEC) would continue these responsibilities
and further fee collection would be discontinued.
Section 50003. Bureau of Consumer Financial Protection
Section 50003 modifies the Consumer Financial Protection
Board's authority to draw funds from the Federal Reserve to a
maximum of 5 percent of the Federal Reserve's total operating
expenses for fiscal year 2009 for FY 2025 and adjusting it for
inflation thereafter.
This section also restricts the Consumer Financial
Protection Board from holding an unobligated balance of greater
than 5 percent of the revised transfer amount from the Federal
Reserve and it requires any funds exceeding that percentage be
transferred to the general fund of the U.S. Treasury.
Section 50004. Consumer Financial Civil Penalty Fund
Section 50004 requires the Consumer Financial Protection
Bureau to return to the general fund of the U.S. Treasury any
civil penalties remaining in the Consumer Financial Civil
Penalty Fund after payment to direct victims.
This section also removes the use of the Consumer Financial
Civil Penalty Fund for consumer education and financial
literacy.
Section 50005. Financial Research Fund
Section 50005 caps assessments collected by the Office of
Financial Research, limiting them to the average actual
budgetary expenses of the Financial Stability Oversight Council
over the preceding three fiscal years and requires excess funds
to be transferred to the general fund of the U.S. Treasury.
This section also prohibits the Office of Financial
Research from collecting assessments that would cause the
Financial Research Fund to exceed this cap.
Committee Cost Estimate
The Committee adopts as its own the cost estimate for the
Committee Print prepared by the Director of the Congressional
Budget Office.
New Budget Authority and CBO Cost Estimate
The Committee adopts as its own the above cost estimate for
the bill prepared by the Director of the Congressional Budget
Office.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The legislation would:
Rescind the unobligated balances of the
Green and Resilient Retrofit Program
Transfer the Public Company Accounting
Board's authorities to the Securities and Exchange
Commission (SEC) and eliminate the authority to collect
accounting support fees to fund the board's activities
Reduce the amount the Consumer Financial
Protection Bureau (CFPB) may receive from the Federal
Reserve and spend for administrative activities
Limit the uses of amounts in the Civil
Penalty Fund
Reduce the amount that the Office of
Financial Research may collect and spend in fees
Increase the cost of an existing private-
sector mandate on certain commercial entities if the
SEC increases annual fee collections
Estimated budgetary effects would mainly stem from:
Decreases in direct spending by the CFPB
because of decreased transfer authority
Decreases in direct spending and revenues
from agencies that collect and spend fees
Legislation summary: H. Con. Res. 14, the Concurrent
Resolution on the Budget for Fiscal Year 2025, instructed the
House Committee on Financial Services to recommend legislative
changes that would decrease deficits by at least $1 billion
over the 2025-2034 period. As part of the reconciliation
process, the House Committee on Financial Services approved
legislation on April 30, 2025, that would reduce deficits.
Estimated federal cost: The reconciliation recommendations
of the House Committee on Financial Services would, on net,
decrease deficits by $5.2 billion over the 2025-2034 period.
The estimated budgetary effects of the legislation are shown in
Table 1. The costs of the legislation fall within budget
functions 370 (commerce and housing credit) and 600 (income
security).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF RECONCILIATION RECOMMENDATIONS
[Title V, House Committee on Financial Services, as Ordered Reported on April 30, 2025]
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-------------------------------------------------------------------------------------------------------------------------
2025- 2025-
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2029 2034
--------------------------------------------------------------------------------------------------------------------------------------------------------
DECREASES IN DIRECT SPENDING
Budget Authority.............. -138 -527 -863 -889 -933 -978 -1,026 -1,109 -1,178 -1,219 -3,350 -8,860
Estimated Outlays............. -16 -352 -800 -926 -948 -973 -1,013 -1,090 -1,160 -1,200 -3,042 -8,478
INCREASES OR DECREASES (-) IN REVENUES
Estimated Revenues............ 0 -473 -724 -720 -752 -1,081 -410 -427 -443 -455 -2,669 -3,323
NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
Effect on the Deficit......... -16 121 -76 -206 -196 -2,054 -603 -663 -717 -745 -373 -5,155
--------------------------------------------------------------------------------------------------------------------------------------------------------
All budget authority amounts are estimated.
Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted in summer 2025. CBO's estimates are
relative to its January 2025 baseline and cover the period from
2025 through 2034.
Direct spending and revenues: CBO estimates that enacting
the bill would decrease direct spending by $8.5 billion and
decrease revenues by $3.3 billion; the deficit would decrease
by $5.2 billion over the 2025-2034 period (see Table 2).
Green and Resilient Retrofit Program for Multifamily Family
Housing: Section 50001 would rescind the unobligated balances
of the Department of Housing and Urban Development's Green and
Resilient Retrofit Program. Using information from the
Department of Housing and Urban Development, CBO estimates that
enacting the rescission would decrease direct spending by $138
million over the 2025-2034 period.
Public Company Accounting Oversight Board: Section 50002
would transfer the authorities of the Public Company Accounting
Oversight Board (PCAOB) to the Securities and Exchange
Commission (SEC) no later than one year after enactment. At the
time of that transfer, the SEC would not be permitted to
collect and spend accounting support fees authorized under the
Sarbanes-Oxley Act of 2002 that the PCAOB currently collects.
Those fees, which fund the board's activities, are treated as
revenues and are available to be spent without further
appropriation.
CBO expects that the board's authorities would be
transferred to the SEC around the end of fiscal year 2026 and
that, starting in 2027, accounting support fees would no longer
be collected and spent. CBO estimates that eliminating the
authority to collect the fees would decrease direct spending by
$3.2 billion over the 2027-2034 period.
Eliminating the fee authority also would reduce collections
of fees by $3.3 billion. However, reducing such fees tends to
increase taxable income for workers and businesses, leading to
increased collections of income and payroll taxes. As a result,
CBO expects that the reduction in fee collections would be
partially offset by increases in tax receipts of about 25
percent of the gross fee reduction each year.\1\ CBO estimates
that, on net, revenues would decrease by $2.4 billion over the
2027-2034 period.
---------------------------------------------------------------------------
\1\For more information, see Congressional Budget Office, CBO's Use
of the Income and Payroll Tax Offset in Its Budget Projections and Cost
Estimates (October 2022), www.cbo.gov/publication/58421.
---------------------------------------------------------------------------
Although CBO anticipates that the SEC would collect fees of
similar magnitude to fund those activities, the collection and
spending of fees imposed by the SEC are contingent on annual
appropriations providing that authority to the agency. CBO has
not reviewed this legislation for effects on spending subject
to appropriation, so any costs for the SEC to implement the
legislation are not included in this estimate.
Bureau of Consumer Financial Protection: Section 50003
would decrease the maximum amount that the Consumer Financial
Protection Bureau (CFPB) may request from the Federal Reserve
each year to cover operating expenses. Under current law, the
CFPB may request a transfer of up to 12 percent of the Federal
Reserve's operating expenses from 2009, adjusted for inflation
each year beginning in 2013. The provision would reduce the cap
to 5 percent of the Federal Reserve's operating expenses in
2009, adjusted for inflation each year beginning in 2025.
CBO expects that the new cap would take effect at the
beginning of 2026 and that the CFPB will have already received
its final quarterly funding from the Federal Reserve for 2025.
CBO estimates that enacting the provision would reduce
transfers from the Federal Reserve by about $4.2 billion and
reduce direct spending by $3.9 billion over the 2026-2034
period.
The Federal Reserve System transmits its net income to the
Treasury as remittances, which are recorded as revenues.
Transfers to the CFPB reduce those remittances but are recorded
as other miscellaneous receipts in the budget; those two
revenue streams net to zero over the 2025-2034 period. Changes
in costs for the Federal Reserve banks have historically
resulted in changes to remittances during the same year.
However, since fiscal year 2023, the central bank has recorded
a deferred asset to account for accrued net losses from
expenses in excess of income. As a result, remittances have
been largely suspended. In CBO's projections, remittances from
the Federal Reserve will generally be suspended until 2030, and
most of the changes in costs incurred by the system during that
time will not be recorded as a change in remittances until they
resume.\2\
---------------------------------------------------------------------------
\2\For more information, see Congressional Budget Office, Recent
Changes to CBO's Projections of Remittances From the Federal Reserve
(February 2023), www.cbo.gov/publication/58913.
---------------------------------------------------------------------------
Consumer Financial Civil Penalty Fund: Section 50004 would
prohibit the CFPB from spending amounts in the Civil Penalty
Fund for any purpose other than to pay victims of violations of
consumer financial law for which penalties have been imposed.
Under current law, the CFPB deposits penalties collected from
judicial or administrative actions into the Civil Penalty Fund;
in addition to paying victims of violations, the CFPB uses
those amounts for consumer education and financial literacy
programs.
Under current rules, the CFPB may use amounts associated
with one penalty to pay victims associated with another
penalty. This provision would effectively prohibit that
practice and also would bar the CFPB from spending amounts on
consumer education or financial literacy programs. Based on an
analysis of the amounts returned to the fund in recent years
and using other information from the CFPB, CBO expects that
enacting this provision would reduce direct spending by $9
million over the 2025-2034 period.
Financial Research Fund: Section 50005 would cap
assessments collected by the Office of Financial Research (OFR)
and deposited into the Financial Research Fund at a three-year
moving average of the expenses of the Financial Stability
Oversight Council (FSOC). Under current law, the OFR collects
assessments from large financial institutions to fund its
operations and the operations of the FSOC. Those assessments
are recorded as revenues and are available to be spent without
future appropriation. CBO estimates that enacting the provision
would decrease direct spending on OFR and FSOC activities by
$1.2 billion.
Capping assessments also would reduce revenues by $1.2
billion. However, reducing such fees tends to increase taxable
income for workers and businesses, leading to increased
collections of income and payroll taxes. As a result, CBO
expects that the reduction in fee collections would be
partially offset by increases in tax receipts of about 25
percent of the gross fee reduction each year. On net, CBO
estimates that revenues would decrease by $906 million under
this provision.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that are
subject to those pay-as-you-go procedures are shown in Table 1.
Increase in long-term net direct spending and deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2035.
Mandates: If the SEC increases fees to offset the costs
associated with implementing provisions in section 50002 of the
reconciliation recommendations of the House Financial Services
Committee, the legislation would increase the cost of an
existing mandate on private entities required to pay those
assessments. CBO estimates that the cost of the mandate would
exceed the annual threshold for private-sector mandates
established in the Unfunded Mandates Reform Act (UMRA) ($206
million in 2025, adjusted annually for inflation).
The bill contains no intergovernmental mandates as defined
in UMRA.
Estimate prepared by: Federal Costs: David Hughes (for the
Consumer Financial Protection Bureau, Financial Research Fund,
and the Public Company Accounting Oversight Board); Zunara
Naeem (for the Department of Housing Urban Development).
Revenues: David Hughes (for the Financial Research Fund and the
Public Company Accounting Oversight Board); Nathaniel Frentz
(for the Consumer Financial Protection Bureau). Mandates:
Rachel Austin.
Estimate reviewed by: Justin Humphrey, Chief, Finance,
Housing, and Education Cost Estimates Unit; Joshua Shakin,
Chief, Revenue Estimating Unit; Kathleen FitzGerald, Chief,
Public and Private Mandates Unit; Christina Hawley Anthony,
Deputy Director of Budget Analysis; H. Samuel Papenfuss, Deputy
Director of Budget Analysis; Chad Chirico, Director of Budget
Analysis.
Estimate approved by: Phillip L. Swagel, Director,
Congressional Budget Office.
TABLE 2.--ESTIMATED CHANGES IN DIRECT SPENDING AND REVENUES UNDER RECONCILIATION RECOMMENDATIONS
[Title V, House Committee on Financial Services, as Ordered Reported on April 30, 2025]
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
---------------------------------------------------------------------------------------------------------------------------
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2025-2029 2025-2034
--------------------------------------------------------------------------------------------------------------------------------------------------------
DECREASES IN DIRECT SPENDING
Sec. 50001, Green and
Resilient Retrofit Program
for Multifamily Family
Housing
Budget Authority.......... -138 0 0 0 0 0 0 0 0 0 -138 -138
Estimated Outlays......... -16 -21 -27 -34 -27 -10 -3 0 0 0 -125 -138
Sec. 50002, Public Company
Accounting Oversight Board
Budget Authority.......... 0 0 -342 -374 -387 -401 -415 -442 -457 -461 -1,103 -3,279
Estimated Outlays......... 0 0 -270 -372 -385 -398 -412 -439 -454 -458 -1,027 -3,188
Sec. 50003, Bureau of
Consumer Financial
Protection
Budget Authority.......... 0 -408 -399 -389 -415 -442 -471 -518 -567 -604 -1,611 -4,213
Estimated Outlays......... 0 -235 -381 -394 -405 -430 -458 -503 -552 -587 -1,415 -3,945
Sec. 50004, Consumer
Financial Civil Penalty
Fund
Budget Authority.......... 0 0 0 0 0 0 0 0 0 0 0 0
Estimated Outlays......... 0 -1 -1 -1 -1 -1 -1 -1 -1 -1 -4 -9
Sec. 50005, Financial
Research Fund
Budget Authority.......... 0 -119 -122 -126 -131 -135 -140 -149 -154 -154 -498 -1,230
Estimated Outlays......... 0 -95 -121 -125 -130 -134 -139 -147 -153 -154 -471 -1,198
Total Changes
Budget Authority.......... -138 -527 -863 -89 -933 -978 -1,026 -1,109 -1,178 -1,219 -3,355 -8,865
Estimated Outlays......... -16 -352 -800 -926 -948 -973 -1,013 -1,090 -1,160 -1,200 -3,042 -8,478
INCREASES OR DECREASES (-) IN REVENUES
Sec. 50002, Public Company
Accounting Oversight Board
Estimated Revenues........ 0 0 -266 -275 -286 -296 -307 -317 -329 -341 -827 -2,417
Sec. 50003, Bureau of
Consumer Financial
Protection
Estimated Revenues........ 0 -385 -369 -353 -370 -1,477 0 0 0 0 -1,477 0
Sec. 50005, Financial
Research Fund
Estimated Revenues........ 0 -88 -89 -92 -96 -100 -103 -110 -114 -114 -365 -906
Total Changes
Estimated Revenues........ 0 -473 -724 -720 -752 -1,081 -410 -427 -443 -455 -2,669 -3,323
NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
Effect on the Deficit..... -16 121 -76 -206 -196 -2,054 -603 -663 -717 -745 -373 -5,155
--------------------------------------------------------------------------------------------------------------------------------------------------------
All budget authority amounts are estimated.
Committee Oversight Findings
The findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
Committee Votes
On April 30, 2025, the Committee Print was ordered to be
transmitted to the House Committee on the Budget by a recorded
vote of 30 ayes to 22 nays, a quorum being present. (Record
Vote No. FC-100).
The Committee considered the following amendments to the
Committee Print:
Chairman Hill (R-AR) offered an amendment in
the nature of a substitute, which made minor edits and
technical changes. The amendment was adopted by a voice
vote.--
Representative Maxine Waters (D-CA) offered
an amendment (EHVSAMND) that would strike Sec. 50001
and replace it with an increase in new mandatory
spending in an amount necessary to fund 60,000
emergency housing vouchers under the program created by
Sec. 3202 of Public Law #117-2. The amendment was
defeated in a recorded vote of 21 yeas and 28 nays, a
quorum being present. (Record Vote No. FC-064).
Representative Waters offered an amendment
(HCRA) that would strike the text Sec. 50001 and
replace it with a modified version of the text of H.R.
4233, the Housing Crisis Response Act of 2023, from the
118th Congress. The amendment was defeated in a
recorded vote of 21 yeas and 29 nays, a quorum being
present. (Record Vote No. FC-065).
Representative Nydia Velazquez (D-NY)
offered an amendment (VELAZQ_021) that would strike the
text Sec. 50001 and replace it with an increase of $90
billion in new mandatory spending for the public
housing Capital Fund under section 9(d) of the United
States Housing Act of 1937. The amendment was defeated
in a recorded vote of 21 yeas and 29 nays, a quorum
being present. (Record Vote No. FC-066).
Representative Al Green (D-TX) offered an
amendment (GREETE_029) that would strike the text Sec.
50001 and replace it with a modified version of the
text of H.R. 3702, the Reforming Disaster Recovery Act
of 2019, from the 116th Congress.. The amendment was
defeated in a recorded vote of 21 yeas and 29 nays, a
quorum being present. (Record Vote No. FC-067).
Representative Nikema Williams (D-GA)
offered an amendment (HOMECDBGAMND) that would strike
the text Sec. 50001 and replace it with an increase of
$35 billion in new mandatory spending for the HOME
Investment Partnership Program authorized under Title
II of the Cranston-Gonzalez National Affordable Housing
Act and an increase of $8.5 billion in new mandatory
spending for the Community Development Block Grant
program authorized under Title I of the Housing and
Community Development Act of 1974. The amendment was
defeated in a recorded vote of 21 yeas and 30 nays, a
quorum being present. (Record Vote No. FC-068).
Representative Sam Liccardo (D-CA) offered
an amendment (LICCAR_014) that would make the recission
of unobligated funds required by Sec. 50001 conditional
upon a finding in report to be issued by HUD that such
recission would not reduce funding for projects that
protect against natural disaster damage for housing
accepting federal funding.. The amendment was defeated
in a recorded vote of 21 yeas and 30 nays, a quorum
being present. (Record Vote No. FC-069).
Representative Brittany Pettersen (D-CO)
offered an amendment (PETTER_029) that would amend the
text of Sec. 50004 to add a new paragraph to the end of
Section 1017(d) of the Consumer Financial Protection
Act of 2010 to require any amounts of civil penalties
imposed for violations of section 987 of title 10 of
the U.S. Code not awarded to direct victims to be
transferred from CFPB to HUD for use under its program
authorized by section 8(o)(19) of the United States
Housing Act of 1937. The amendment was defeated in a
recorded vote of 21 yeas and 30 nays, a quorum being
present. (Record Vote No. FC-070).
Representative Liccardo offered an amendment
(LICCAR_018) that would make the recission of
unobligated funds required by Sec. 50001 conditional
upon a finding in a report to be issued by HUD that
such recission would not undermine efforts to reduce
utility bills for tenants and landlords in any housing
accepting federal funding. The amendment was defeated
in a recorded vote of 21 yeas and 30 nays, a quorum
being present. (Record Vote No. FC-071).
Representative Waters offered an amendment
(G02) that would direct the Secretary of the Treasury
to determine and report to Congress on whether sections
50003 and 50004 would lead to increased fraud for
veterans because of the CFPB spending recissions. The
amendment further prevents these sections from going
into effect if the report indicates veterans would be
harmed. The amendment was defeated in a recorded vote
of 21 yeas and 30 nays, a quorum being present. (Record
Vote No. FC-072).
Representative Velazquez offered an
amendment (VELAZQ_024) that would allow the CFPB to
spend amounts transferred in excess of the 5% cap to be
used to enforce any rule issued by the Bureau. The
amendment was defeated in a recorded vote of 21 yeas
and 30 nays, a quorum being present. (Record Vote No.
FC-073).
Representative Stephen Lynch (D-MA) offered
an amendment (G01) that would allow the CFPB to
continue to receive funds in excess of the new 5% cap
that are used to fund the protection of servicemembers.
The amendment was defeated in a recorded vote of 21
yeas and 30 nays, a quorum being present. (Record Vote
No. FC-074).
Representative Bill Foster (D-IL) offered an
amendment (FOSTER_027) that would allow the CFPB to
continue to receive funds in excess of the new 5% cap
that are used to implement and enforce the CFPB's
``Required Rulemaking on Personal Financial Data
Rights.'' The amendment was defeated in a recorded vote
of 21 yeas and 30 nays, a quorum being present. (Record
Vote No. FC-075).
Representative Foster offered an amendment
(FOSTER_028) that would allow the CFPB to continue to
receive funds in excess of the new 5% cap that are used
to monitor and respond to technological innovations..
The amendment was defeated in a recorded vote of 21
yeas and 30 nays, a quorum being present. (Record Vote
No. FC-076).
Representative Foster offered an amendment
(FOSTER_029) that would allow the CFPB to continue to
receive funds in excess of the new 5% cap that are used
to maintain and monitor the consumer complaint
database. The amendment was defeated in a recorded vote
of 21 yeas and 30 nays, a quorum being present. (Record
Vote No. FC-077).
Representative Liccardo offered an amendment
(LICCAR_013) that would require the CFPB Director to
determine and report to Congress whether section 50004
would take away payments to consumers financially
harmed by corporate malfeasance. The amendment would
further prevent section 50004 from taking effect if the
Director determines it would take away these payments.
The amendment was defeated in a recorded vote of 21
yeas and 30 nays, a quorum being present. (Record Vote
No. FC-078).
Representative Jim Himes (D-CT) offered an
amendment (G10) that would allow the CFPB to use
amounts that would otherwise be transferred to the
general fund of the Treasury to make payments to
victims who are servicemembers or veterans. The
amendment was defeated in a recorded vote of 21 yeas
and 30 nays, a quorum being present. (Record Vote No.
FC-079).
Representative Nikema Williams (D-GA)
offered an amendment (G11) that would prevent the
President and the Office of Management and Budget from
reviewing the budget, rules, or guidance of the CFPB.
The amendment was defeated in a recorded vote of 21
yeas and 30 nays, a quorum being present. (Record Vote
No. FC-080).
Representative Janelle Bynum (D-OR) offered
an amendment (G04) that would allow the CFPB to
continue to receive funds in excess of the new 5% cap
that are used to ensure the protection of student
borrowers. The amendment was defeated in a recorded
vote of 21 yeas and 30 nays, a quorum being present.
(Record Vote No. FC-081).
Representative Bynum offered an amendment
(G05) that would direct the CFPB to issue interpretive
guidance on how the Electronic Fund Transfer Act and
related payment protections apply to new and emerging
digital payment mechanisms. The amendment would further
allow the CFPB to continue to receive funds in excess
of the new 5% cap that are used to fund the issuance of
this guidance. The amendment was defeated in a recorded
vote of 21 yeas and 30 nays, a quorum being present.
(Record Vote No. FC-082).
Representative Bynum offered an amendment
(G09) that would direct the Secretary of the Treasury
to issue a report to Congress on whether Section 50003
and Section 50004 would lead to fees and other
financing costs being reduced for every consumer
financial product. The amendment further prevents these
sections from going into effect if the report indicates
fees for every consumer financial product would not be
reduced. The amendment was defeated in a recorded vote
of 21 yeas and 30 nays, a quorum being present. (Record
Vote No. FC-083).
Representative Ayanna Pressley (D-MA)
offered an amendment (G07) that would direct the CFPB
Director to establish and collect risk-based, quarterly
assessments on the largest banks and nonbank financial
companies, including large tech payment providers and
payday lenders, in an amount that, in the aggregate, is
necessary to pay for the reasonable costs to carry out
the authorities of the Bureau. The amendment was
defeated in a recorded vote of 21 yeas and 30 nays, a
quorum being present. (Record Vote No. FC-084).
Representative Pressley offered an amendment
(G08) that would direct the CFPB Director to establish,
and collect, risk-based, quarterly assessments on all
companies that were found to have violated a Federal
consumer financial protection law on or after January
1, 2010, in an amount that, in the aggregate, is
necessary to pay for the reasonable costs to carry out
the authorities of the Bureau. The amendment was
defeated in a recorded vote of 21 yeas and 30 nays, a
quorum being present. (Record Vote No. FC-085).
Representative Sylvia Garcia (D-TX) offered
an amendment (G06) that would require the Secretary of
the Treasury to determine and report to Congress on
whether sections 50003 and 50004 would prevent older
consumers that are victims of financial fraud from
getting prompt remediation and help from the CFPB. If
the Secretary of the Treasury determines it would
prevent this remediation, then section 50003 and 50004
would not go into effect. The amendment was defeated by
voice vote.
Representative Pressley offered an amendment
(G18) that would direct the FSOC, in consultation with
the OFR, to study how cuts by the Department of
Government Efficiency (DOGE) regarding the Federal
oversight of the financial system can undermine
financial stability. The amendment would also say that
the assessment restrictions on OFR in Section 50005
would not apply to funds used to carry out the study
required by this amendment. The amendment was defeated
in a recorded vote of 22 yeas and 30 nays, a quorum
being present. (Record Vote No. FC-086).
Representative Pressley offered an amendment
(G19) that would direct each FSOC member agency to
issue a report to Congress on the types and amounts of
sensitive data to which DOGE has access. The amendment
was defeated in a recorded vote of 22 yeas and 30 nays,
a quorum being present. (Record Vote No. FC-087).
Representative Waters offered an amendment
(L01) that would allow funds in excess of the new
assessment level to be used by FSOC to investigate
covered individuals who are gaining financial benefit
from their promotion of crypto products for conflicts
of interest if such conflicts of interest would cause
potential harm to financial stability. The amendment
was defeated in a recorded vote of 22 yeas and 30 nays,
a quorum being present. (Record Vote No. FC-088).
Representative Waters offered an amendment
(L02) that would allow funds in excess of the new
assessment level to be used by FSOC to assess and
monitor risks arising from the government requiring the
use of particular stablecoins to contract with the
government, the government adopting stablecoins in the
government's internal operations, or deploying
stablecoins externally. The amendment was defeated in a
recorded vote of 22 yeas and 30 nays, a quorum being
present. (Record Vote No. FC-089).
Representative Foster offered an amendment
(FOSTER_030) that would direct the FSOC, in
consultation with the OFR, to study and report on the
approved mechanisms for transmission of material
regulatory or policy decisions that can influence
financial markets, risks to financial stability of
Executive Branch officials release of such information,
and whether the publication of market moving
information on a platform owned by an executive branch
employee may constitute conflicts of interest. The
amendment would prevent the new assessment cap under
section 50005 from applying to assessments necessary to
carry out this study. The amendment was defeated in a
recorded vote of 22 yeas and 30 nays, a quorum being
present. (Record Vote No. FC-090).
Representative Juan Vargas (D-CA) offered an
amendment (G16) that would direct the FSOC, in
consultation with the OFR, to conduct a study and
report on how the President's undermining of the
Chairman and other members of the Board of Governors of
the Federal Reserve System can harm the U.S. economy.
The amendment would prevent the new assessment cap
under section 50005 from applying to assessments
necessary to carry out this study. The amendment was
defeated in a recorded vote of 22 yeas and 30 nays, a
quorum being present. (Record Vote No. FC-091).
Representative Rashida Tlaib (D-MI) offered
an amendment (G13) that would direct the Secretary of
the Treasury to report to Congress whether provisions
of the underlying text would extend or expand tax cuts
for individuals with annual incomes over $400,000, or
corporations with over $25 billion in annual revenues.
If the Secretary determines this would cut taxes for
these individuals and corporations, this title would
not take effect. The amendment was defeated in a
recorded vote of 22 yeas and 30 nays, a quorum being
present. (Record Vote No. FC-092).
Representative Pettersen offered an
amendment (G12) that would direct the Secretary of the
Treasury to report to Congress on whether the Federal
Government has reduced any funding for Medicaid, Social
Security, or the Supplemental Nutrition Assistance
Program since January 20, 2025. If the Secretary
determines this title would reduce funding for
Medicaid, Social Security, or the Supplemental
Nutrition Program this title would not take effect. The
amendment was defeated in a recorded vote of 22 yeas
and 30 nays, a quorum being present. (Record Vote No.
FC-093).
Representative Liccardo offered an amendment
(G15) that would direct the FSOC, in consultation with
the OFR, to conduct a study and report to Congress on
how tariff plans and a global trade war can harm the
U.S. economy and financial system. The amendment would
prevent the new assessment cap under section 50005 from
applying to assessments necessary to carry out this
study. The amendment was defeated in a recorded vote of
22 yeas and 30 nays, a quorum being present. (Record
Vote No. FC-094).
Representative Bynum offered an amendment
(BYNUM_008) that would direct the Federal Reserve to
conduct a study and report on the collective impact
that tariffs issued under both Trump administrations
have had on the cost of goods and services for
consumers and small businesses in the United States.
The amendment was defeated in a recorded vote of 22
yeas and 30 nays, a quorum being present. (Record Vote
No. FC-095).
Representative Bynum offered an amendment
(50002_01) that would ensure that individuals that
contribute to retirement accounts will not be subject
to increased risks relating to any modifications to the
requirements of financial reporting of entities that
administer such accounts as a result of the enactment
of this act. The amendment was defeated in a recorded
vote of 22 yeas and 30 nays, a quorum being present.
(Record Vote No. FC-096).
Representative Lynch offered an amendment
(G17) that would require the Financial Stability
Oversight Council, in consultation with the Office of
Financial Research, to conduct a study on the
President's ownership of a crypto company that is
creating a stablecoin and exchange. The amendments made
by Section 50005 do not apply to the amount of
assessments equal to the amount necessary to carry out
the study. The amendment was defeated in a recorded
vote of 22 yeas and 30 nays, a quorum being present.
(Record Vote No. FC-097).
Representative Waters offered an amendment
(50002_08) that would authorize $3.2 billion to the SEC
to conduct audits of public companies. The amendment
was defeated in a recorded vote of 22 yeas to 30 nays,
a quorum being present. (Record Vote No. FC-098).
Representative Brad Sherman (D-CA) offered
an amendment (SHERMA_041) that would allow the SEC to
continue to collect accounting support fees. The
amendment was defeated in a recorded vote of 22 yeas to
30 nays, a quorum being present. (Record Vote No. FC-
099).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Earmark Statement
The Committee has carefully reviewed the provisions of the
Committee Print and states that none of its provisions contain
any congressional earmarks, limited tax benefits, or limited
tariff benefits within the meaning of clause 9 of rule XXI of
the Rules of the House of Representatives.
Unfunded Mandates Statement
The Committee adopts as its own the unfunded mandates score
prepared by the Director of the Congressional Budget Office
(CBO) as provided above.
Applicability to the Legislative Branch
The Committee finds that the Committee Print does not
relate to the terms and conditions of employment or access to
public services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Changes in Existing Law Made by the Bill, as Reported
Comparative Print: Changes in Existing Law for Bill number:
Notice
This document was computer-generated to show how
legislative text that may be considered by the House proposes
to change existing law. It has not been reviewed for accuracy.
This document does not represent an official expression by the
House and should not be relied on as an authoritative
delineation of the proposed change(s) to existing law.
Omitted text is shown [stricken,] new matter that is
proposed is in underlined italics, and existing text in which
no change is being proposed is shown in regular roman.
Typesetting and stylistic characteristics, particularly in the
headings and indentations, may not conform to how the text, if
adopted, would be illustrated in subsequent versions of
legislation or public law.
Summary
(1) 7 amendments.
(2) 0 automated notifications.
Current Law(s) being amended
1. Consumer Financial Protection Act of 2010
Comparative Print: Changes in Existing Law
1. Consumer Financial Protection Act of 2010
[As Amended Through P.L. 117-286, Enacted December 27, 2022]
* * * * * * *
TITLE I--FINANCIAL STABILITY
Subtitle B-- Office of Financial Research
* * * * * * *
SEC. 155. FUNDING.
(a) Financial Research Fund.--
(1) Fund established.--There is established in the
Treasury of the United States a separate fund to be
known as the ``Financial Research Fund''.
(2) Fund receipts.--All amounts provided to the
Office under subsection (c), and all assessments that
the Office receives under subsection (d) shall be
deposited into the Financial Research Fund.
(3) Investments authorized.--
(A) Amounts in fund may be invested.--The
Director may request the Secretary to invest
the portion of the Financial Research Fund that
is not, in the judgment of the Director,
required to meet the needs of the Office.
(B) Eligible investments.--Investments shall
be made by the Secretary in obligations of the
United States or obligations that are
guaranteed as to principal and interest by the
United States, with maturities suitable to the
needs of the Financial Research Fund, as
determined by the Director.
(4) Interest and proceeds credited.--The interest on,
and the proceeds from the sale or redemption of, any
obligations held in the Financial Research Fund shall
be credited to and form a part of the Financial
Research Fund.
(b) Use of Funds.--
(1) In general.--Funds obtained by, transferred to,
or credited to the Financial Research Fund shall be
immediately available to the Office, and shall remain
available until expended, to pay the expenses of the
Office in carrying out the duties and responsibilities
of the Office.
(2) Fees, assessments, and other funds not government
funds.--Funds obtained by, transferred to, or credited
to the Financial Research Fund shall not be construed
to be Government funds or appropriated moneys.
(3) Amounts not subject to apportionment.--
Notwithstanding any other provision of law, amounts in
the Financial Research Fund shall not be subject to
apportionment for purposes of chapter 15 of title 31,
United States Code, or under any other authority, or
for any other purpose.
(c) Interim Funding.--During the 2-year period following
the date of enactment of this Act, the Board of Governors shall
provide to the Office an amount sufficient to cover the
expenses of the Office.
(d) Permanent Self-Funding.--Beginning 2 years after the
date of enactment of this Act, the Secretary shall establish,
by regulation, and with the approval of the Council, an
assessment schedule, including the assessment base and rates,
applicable to bank holding companies with total consolidated
assets of $250,000,000,000\1\ or greater and nonbank financial
companies supervised by the Board of Governors, that takes into
account differences among such companies, based on the
considerations for establishing the prudential standards under
section 115, to collect assessments equal to the total expenses
of the Office.
---------------------------------------------------------------------------
\1\Effective November 24, 2019, pursuant to section 401(c)(1)(D)
and (d)(1) of Public Law 115-174, section 155(d) is amended by striking
``50,000,000,000'' and inserting ``$250,000,000,000''. Subsection
(d)(2) of such section 401 also states as follows: ``Notwithstanding
paragraph (1), the amendments made by this section shall take effect on
the date of enactment of this Act with respect to any bank holding
company with total consolidated assets of less than $100,000,000,000''.
There is a discrepancy between the Statutes-At-Large and the enrolled
bill versions as it relates to the dollar symbol (see Codification note
@ 12 U.S.C. 5345).
The text of the Statute-At-Large text is incorrect, as the law
signed by the President included a dollar symbol (as so enrolled).
Therefore, the above reflects the execution of the amendment made by
Public Law 115-174 to the enrolled version.
---------------------------------------------------------------------------
(e) Limitation on Assessments and the Financial Research
Fund.--
(1) Limitation on assessments.--Assessments may not
be collected under subsection (d) if the assessments
would result in--
(A) the Financial Research Fund exceeding the
average annual budget amount; or
(B) the total assessments collected during a
single fiscal year exceeding the average annual
budget amount.
(2) Transfer of excess funds.--Any amounts in the
Financial Research Fund exceeding the average annual
budget amount shall be deposited into the general fund
of the Treasury.
(3) Average annual budget amount defined.--In this
subsection the term `average annual budget amount'
means the annual average, over the 3 most recently
completed fiscal years, of the expenses of the Council
in carrying out the duties and responsibilities of the
Council that were paid by the Office using amounts
obtained through assessments under subsection (d).
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
* * * * * * *
Subtitle A--Bureau of Consumer Financial Protection
* * * * * * *
SEC. 1017. FUNDING; PENALTIES AND FINES.
(a) Transfer of Funds From Board of Governors.--
(1) In general.--Each year (or quarter of such year),
beginning on the designated transfer date, and each
quarter thereafter, the Board of Governors shall
transfer to the Bureau from the combined earnings of
the Federal Reserve System, the amount determined by
the Director to be reasonably necessary to carry out
the authorities of the Bureau under Federal consumer
financial law, taking into account such other sums made
available to the Bureau from the preceding year (or
quarter of such year).
(2) Funding cap.--
(A) In general.--Notwithstanding paragraph
(1), and in accordance with this paragraph, the
amount that shall be transferred to the Bureau
in each fiscal year shall not exceed a fixed
percentage of the total operating expenses of
the Federal Reserve System, as reported in the
Annual Report, 2009, of the Board of Governors,
equal to--
(i) 10 percent of such expenses in
fiscal year 2011;
(ii) 11 percent of such expenses in
fiscal year 2012; and
(iii) [12 percent] 5 percent of such
expenses in fiscal year [2013] 2025,
and in each year thereafter.
(B) Adjustment of amount.--The dollar amount
referred to in subparagraph (A)(iii) shall be
adjusted annually, using the percent increase,
if any, in the employment cost index for total
compensation for State and local government
workers published by the Federal Government, or
the successor index thereto, for the 12-month
period ending on September 30 of the year
preceding the transfer.
[(C) Reviewability.--Notwithstanding any
other provision in this title, the funds
derived from the Federal Reserve System
pursuant to this subsection shall not be
subject to review by the Committees on
Appropriations of the House of Representatives
and the Senate.]
(C) Limitation on unobligated balances.--With
respect to a fiscal year, the amount of
unobligated balances of the Bureau may not
exceed 5 percent of the dollar amount referred
to in subparagraph (A)(iii), as adjusted under
subparagraph (B). The Director shall transfer
any excess amount of such unobligated balances
to the general fund of the Treasury.
(3) Transition period.--Beginning on the date of
enactment of this Act and until the designated transfer
date, the Board of Governors shall transfer to the
Bureau the amount estimated by the Secretary needed to
carry out the authorities granted to the Bureau under
Federal consumer financial law, from the date of
enactment of this Act until the designated transfer
date.
(4) Budget and financial management.--
(A) Financial operating plans and
forecasts.--The Director shall provide to the
Director of the Office of Management and Budget
copies of the financial operating plans and
forecasts of the Director, as prepared by the
Director in the ordinary course of the
operations of the Bureau, and copies of the
quarterly reports of the financial condition
and results of operations of the Bureau, as
prepared by the Director in the ordinary course
of the operations of the Bureau.
(B) Financial statements.--The Bureau shall
prepare annually a statement of--
(i) assets and liabilities and
surplus or deficit;
(ii) income and expenses; and
(iii) sources and application of
funds.
(C) Financial management systems.--The Bureau
shall implement and maintain financial
management systems that comply substantially
with Federal financial management systems
requirements and applicable Federal accounting
standards.
(D) Assertion of internal controls.--The
Director shall provide to the Comptroller
General of the United States an assertion as to
the effectiveness of the internal controls that
apply to financial reporting by the Bureau,
using the standards established in section
3512(c) of title 31, United States Code.
(E) Rule of construction.--This subsection
may not be construed as implying any obligation
on the part of the Director to consult with or
obtain the consent or approval of the Director
of the Office of Management and Budget with
respect to any report, plan, forecast, or other
information referred to in subparagraph (A) or
any jurisdiction or oversight over the affairs
or operations of the Bureau.
(F) Financial statements.--The financial
statements of the Bureau shall not be
consolidated with the financial statements of
either the Board of Governors or the Federal
Reserve System.
(5) Audit of the bureau.--
(A) In general.--The Comptroller General
shall annually audit the financial transactions
of the Bureau in accordance with the United
States generally accepted government auditing
standards, as may be prescribed by the
Comptroller General of the United States. The
audit shall be conducted at the place or places
where accounts of the Bureau are normally kept.
The representatives of the Government
Accountability Office shall have access to the
personnel and to all books, accounts,
documents, papers, records (including
electronic records), reports, files, and all
other papers, automated data, things, or
property belonging to or under the control of
or used or employed by the Bureau pertaining to
its financial transactions and necessary to
facilitate the audit, and such representatives
shall be afforded full facilities for verifying
transactions with the balances or securities
held by depositories, fiscal agents, and
custodians. All such books, accounts,
documents, records, reports, files, papers, and
property of the Bureau shall remain in
possession and custody of the Bureau. The
Comptroller General may obtain and duplicate
any such books, accounts, documents, records,
working papers, automated data and files, or
other information relevant to such audit
without cost to the Comptroller General, and
the right of access of the Comptroller General
to such information shall be enforceable
pursuant to section 716(c) of title 31, United
States Code.
(B) Report.--The Comptroller General shall
submit to the Congress a report of each annual
audit conducted under this subsection. The
report to the Congress shall set forth the
scope of the audit and shall include the
statement of assets and liabilities and surplus
or deficit, the statement of income and
expenses, the statement of sources and
application of funds, and such comments and
information as may be deemed necessary to
inform Congress of the financial operations and
condition of the Bureau, together with such
recommendations with respect thereto as the
Comptroller General may deem advisable. A copy
of each report shall be furnished to the
President and to the Bureau at the time
submitted to the Congress.
(C) Assistance and costs.--For the purpose of
conducting an audit under this subsection, the
Comptroller General may, in the discretion of
the Comptroller General, employ by contract,
without regard to section 3709 of the Revised
Statutes of the United States (41 U.S.C. 5),
professional services of firms and
organizations of certified public accountants
for temporary periods or for special purposes.
Upon the request of the Comptroller General,
the Director of the Bureau shall transfer to
the Government Accountability Office from funds
available, the amount requested by the
Comptroller General to cover the full costs of
any audit and report conducted by the
Comptroller General. The Comptroller General
shall credit funds transferred to the account
established for salaries and expenses of the
Government Accountability Office, and such
amount shall be available upon receipt and
without fiscal year limitation to cover the
full costs of the audit and report.
(b) Consumer Financial Protection Fund.--
(1) Separate fund in federal reserve established.--
There is established in the Federal Reserve a separate
fund, to be known as the ``Bureau of Consumer Financial
Protection Fund'' (referred to in this section as the
``Bureau Fund''). The Bureau Fund shall be maintained
and established at a Federal reserve bank, in
accordance with such requirements as the Board of
Governors may impose.
(2) Fund receipts.--All amounts transferred to the
Bureau under subsection (a) shall be deposited into the
Bureau Fund.
(3) Investment authority.--
(A) Amounts in bureau fund may be invested.--
The Bureau may request the Board of Governors
to direct the investment of the portion of the
Bureau Fund that is not, in the judgment of the
Bureau, required to meet the current needs of
the Bureau.
(B) Eligible investments.--Investments
authorized by this paragraph shall be made in
obligations of the United States or obligations
that are guaranteed as to principal and
interest by the United States, with maturities
suitable to the needs of the Bureau Fund, as
determined by the Bureau.
(C) Interest and proceeds credited.--The
interest on, and the proceeds from the sale or
redemption of, any obligations held in the
Bureau Fund shall be credited to the Bureau
Fund.
(c) Use of Funds.--
(1) In general.--Funds obtained by, transferred to, or
credited to the Bureau Fund shall be immediately
available to the Bureau and under the control of the
Director, and shall remain available until expended, to
pay the expenses of the Bureau in carrying out its
duties and responsibilities. The compensation of the
Director and other employees of the Bureau and all
other expenses thereof may be paid from, obtained by,
transferred to, or credited to the Bureau Fund under
this section.
(2) Funds that are not government funds.--Funds
obtained by or transferred to the Bureau Fund shall not
be construed to be Government funds or appropriated
monies.
(3) Amounts not subject to apportionment.--
Notwithstanding any other provision of law, amounts in
the Bureau Fund and in the Civil Penalty Fund
established under subsection (d) shall not be subject
to apportionment for purposes of chapter 15 of title
31, United States Code, or under any other authority.
(d) Penalties and Fines.--
(1) Establishment of victims relief fund.--There is
established in the Federal Reserve a separate fund, to
be known as the ``Consumer Financial Civil Penalty
Fund'' (referred to in this section as the ``Civil
Penalty Fund''). The Civil Penalty Fund shall be
maintained and established at a Federal reserve bank,
in accordance with such requirements as the Board of
Governors may impose. If the Bureau obtains a civil
penalty against any person in any judicial or
administrative action under Federal consumer financial
laws, the Bureau shall deposit into the Civil Penalty
Fund, the amount of the penalty collected.
(2) Payment to victims.--Amounts in the Civil Penalty
Fund shall be available to the Bureau, without fiscal
year limitation, for payments to the direct victims of
activities for which civil penalties have been imposed
under the Federal consumer financial laws. [To the
extent that such victims cannot be located or such
payments are otherwise not practicable, the Bureau may
use such funds for the purpose of consumer education
and financial literacy programs.]
(3) Treatment of excess amounts.--With respect to a
civil penalty described under paragraph (1), if the
Bureau makes payments to all of the direct victims of
activities for which that civil penalty was imposed,
the Bureau shall transfer all amounts that remain in
the Civil Penalty Fund with respect to that civil
penalty to the general fund of the Treasury.
(e) Authorization of Appropriations; Annual Report.--
(1) Determination regarding need for appropriated
funds.--
(A) In general.--The Director is authorized
to determine that sums available to the Bureau
under this section will not be sufficient to
carry out the authorities of the Bureau under
Federal consumer financial law for the upcoming
year.
(B) Report required.--When making a
determination under subparagraph (A), the
Director shall prepare a report regarding the
funding of the Bureau, including the assets and
liabilities of the Bureau, and the extent to
which the funding needs of the Bureau are
anticipated to exceed the level of the amount
set forth in subsection (a)(2). The Director
shall submit the report to the President and to
the Committee on Appropriations of the Senate
and the Committee on Appropriations of the
House of Representatives.
(2) Authorization of appropriations.--If the Director
makes the determination and submits the report pursuant
to paragraph (1), there are hereby authorized to be
appropriated to the Bureau, for the purposes of
carrying out the authorities granted in Federal
consumer financial law, $200,000,000 for each of fiscal
years 2010, 2011, 2012, 2013, and 2014.
(3) Apportionment.--Notwithstanding any other
provision of law, the amounts in paragraph (2) shall be
subject to apportionment under section 1517 of title
31, United States Code, and restrictions that generally
apply to the use of appropriated funds in title 31,
United States Code, and other laws.
(4) Annual report.--The Director shall prepare and
submit a report, on an annual basis, to the Committee
on Appropriations of the Senate and the Committee on
Appropriations of the House of Representatives
regarding the financial operating plans and forecasts
of the Director, the financial condition and results of
operations of the Bureau, and the sources and
application of funds of the Bureau, including any funds
appropriated in accordance with this subsection.
Summary
(1) 7 amendments.
(2) 0 automated notifications.
Duplication of Federal Programs
The Committee states that no provision of the Committee
Print establishes or reauthorizes a program of the Federal
Government known to be duplicative of another Federal program,
including any program that was included in a report to Congress
pursuant to section 21 of the Public Law 111-139 or the most
recent Catalog of Federal Domestic Assistance.
Committee Views
SECTION 50001: HUD'S GREEN AND RESILIENT RETROFIT PROGRAM FUNDING
Section 50001 rescinds any remaining unobligated balances
with the Department of Housing and Urban Development's (HUD)
Green and Resilient Retrofit Program, created under Section
30002 of the Inflation Reduction Act of 2022.
Background
Section 30002 of the Inflation Reduction Act of 2022
appropriated $1 billion in new, mandatory spending to HUD for a
Green and Resilient Retrofit Program (GRRP). The GRRP was
designed to make grants and direct loans to the owners of HUD-
subsidized properties to support energy efficiency and climate
change resilience projects. Projects eligible for GRRP funding
include: improving energy or water efficiency; enhancing indoor
air quality or sustainability; implementing the use of zero-
emission electricity generation, low-emission building
materials or processes, energy storage, or building
electrification strategies; and addressing climate resilience.
The Biden administration executed 12 rounds of obligating
funding under the program, with the final round of funding
coming in November 2024.
SECTION 50002: PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD (PCAOB)
Section 50002 eliminates the PCAOB's authority to
independently collect and spend accounting support fees and
instead directs that all such fees be remitted to the U.S.
Treasury after a transition period. The SEC would continue
these responsibilities using funds appropriated by Congress,
and further fee collection under Section 109 of the Sarbanes-
Oxley Act of 2002 (``Sarbanes-Oxley'') would be discontinued.
Background
The PCAOB is a non-profit corporation Congress established
to oversee the audits of public companies. The PCAOB's
responsibilities include: (1) registering public accounting
firms; (2) establishing auditing, quality control, ethics,
independence, and other standards relating to public company
audits; (3) conducting inspections, investigations, and
disciplinary proceedings of registered accounting firms; and
(4) enforcing compliance with Sarbanes-Oxley.\1\
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\1\See Securities and Exchange Commission, ``Fast Answers: Public
Company Accounting Oversight Board (PCAOB),'' available at https://
www.sec.gov/fast-answers/answerspcaobhtm.html.
---------------------------------------------------------------------------
The PCAOB was established as part of Sarbanes-Oxley in
response to various accounting scandals of the late 1990s
(i.e., Enron, WorldCom, the collapse of Arthur Anderson). Prior
to its creation, the accounting profession was self-regulated.
Sarbanes-Oxley provided the SEC the authority to oversee the
PCAOB's operations, appoint or remove members, approve the
PCAOB's budget and rules, and entertain appeals of any PCAOB
inspection reports or disciplinary actions.\2\ The Dodd-Frank
Wall Street Reform and Consumer Protection Act (``Dodd-Frank'')
established the current funding regime for the PCAOB, which is
done primarily through annual accounting support fees. These
fees are assessed on public companies (based on their relative
average monthly market capitalization) and on broker-dealers
(based on their relative average quarterly tentative net
capital).
---------------------------------------------------------------------------
\2\See Id.
---------------------------------------------------------------------------
SECTION 50003: CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) FUNDING
Section 50003 modifies CFPB's authority to draw funds from
the Federal Reserve to a maximum of 5 percent of the Federal
Reserve's total operating expenses for fiscal year 2009, which
were $4.98 billion,\3\ and adjusting it for inflation
thereafter. This would replace the current cap of 12 percent.
Additionally, the CFPB would be restricted to holding an
unobligated balance no greater than 5 percent of the revised
transfer amount ($12.45 million for 2025) from the Federal
Reserve. Any funds exceeding that percentage would be required
to be transferred to the general fund of the U.S. Treasury.
---------------------------------------------------------------------------
\3\Congressional Research Service, The Consumer Financial
Protection Bureau Budget: Background, Trends, and Policy Options, (Feb.
4, 2025), https://www.congress.gov/crs-product/R48295.
---------------------------------------------------------------------------
Background
The CFPB was established under Title X of Dodd-Frank as a
centralized federal agency to implement and enforce consumer
financial laws.\4\ Prior to the CFPB's creation, these
responsibilities were dispersed across seven federal agencies,
each with a primary statutory mission.\5\ Under section 1017 of
Dodd Frank, the Federal Reserve Board is required to transfer
from the combined earnings\6\ of the Federal Reserve System\7\
to the CFPB an amount ``determined by the Director to be
reasonably necessary to carry out the authorities of the Bureau
under Federal consumer financial law,''\8\ up to a cap of 12
percent of Federal Reserve System's total operating expenses
for 2009, adjusted annually for inflation.\9\
---------------------------------------------------------------------------
\4\12 U.S.C. Sec. Sec. 5491-5603.
\5\Consumer Financial Protection Bureau, Building the CFPB, https:/
/www.consumerfinance.gov/data-research/research-reports/building-the-
cfpb/.
\6\Some, such as Harvard Law School Professor Hal Scott, have
argued that despite the Supreme Court Case upholding the CFPB funding,
the lack of profits in the Federal Reserve System since 2022 means that
transfers since then are improper and should be struck down by the
courts. See Hal S. Scott, Understanding the CFPB's Funding Problem,
Comm. on Cap. Mkt. Regul. (Feb. 14, 2024), https://capmktsreg.org/wp-
content/uploads/2025/02/Hal-Scott-
Understanding-the-CFPBs-Funding-Problem-02.24.25.pdf.
\7\12 U.S.C. Sec. 5497.
\8\Id.
\9\Under Sec. 1017 of Dodd-Frank, after 2012, the CFPB's funding
cap annually adjusts using the percent increase in the employment cost
index for total compensation for State and local government workers.
---------------------------------------------------------------------------
Transfers from the Board were capped at $734.0 million in
FY 2022, at $750.9 million in FY 2023, $785.4 million in FY
2024, and $823.1 million in FY 2025.\10\ Both the Federal
Reserve and the House and Senate Committees on Appropriations
are expressly prohibited from reviewing or scrutinizing the
Bureau's funding requests, and the Fed is legally obligated to
transfer the funds upon request.\11\
---------------------------------------------------------------------------
\10\Cons. Fin. Prot. Bur., Annual Performance Plan and Report, and
Budget Overview, (Feb. 2024), https://files.consumerfinance.gov/f/
documents/cfpb_performance-plan-and-report_fy24.pdf.
\11\12 U.S.C. Sec. 5497(a)(2)(C).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
SECTION 50004: CFPB CIVIL PENALTY FUND (CPF)
Section 50004 requires the CFPB to return to the general
fund of the U.S. Treasury any civil penalties remaining in the
CPF after payment to direct victims.
This section also removes the use of the CPF for consumer
education and financial literacy.
Background
Under current law, when the CFPB obtains a civil penalty
through judicial or administrative action under federal
consumer financial laws, the collected penalties are deposited
into the CPF. These funds are available to the CFPB--without
fiscal year limitation--for payments to victims harmed by the
underlying violations. Significantly, the CFPB may commingle
civil penalties in the CPF and routinely uses penalties from
one company to compensate victims of activities of a different
company. If the CFPB determines it cannot locate the victims or
finds that payments are not practicable, it may use the
remaining funds for consumer education and financial literacy
programs.
SECTION 50005: OFFICE OF FINANCIAL RESEARCH (OFR) FUNDING
Section 50005 caps assessments collected by the OFR,
limiting them to the average actual budgetary expenses of the
Financial Stability Oversight Council (FSOC) over the preceding
three fiscal years. This cap would include reimbursements made
to the Federal Deposit Insurance Corporation (FDIC) under
Section 210(n)(10) of Dodd-Frank. Any excess funds in the
Financial Research Fund above this three-year average would be
required to be transferred to the general fund of the U.S.
Treasury. The OFR would also be prohibited from collecting
assessments that would cause the Fund to exceed this cap.
Background
Title I of Dodd-Frank established the OFR and FSOC to
identify and respond to risks to the stability of the U.S.
financial system. The OFR's core mission is to support FSOC and
promote financial stability by improving the quality,
transparency, and availability of financial data and by
conducting independent research and analysis of risks to the
financial system. Since fiscal year 2012, the OFR relied on
assessments levied on large financial institutions--
specifically, bank holding companies with over $250 billion in
assets and non-bank financial firms designated as Systemically
Important Financial Institutions by FSOC--rather than
Congressional appropriations. These assessments are deposited
in the Financial Research Fund.\12\
---------------------------------------------------------------------------
\12\12 U.S.C. Sec. 5345(a).
---------------------------------------------------------------------------
Minority Views or Supplemental Views, Additional Views, or Dissenting
Views
MINORITY VIEWS
H. Con. Res. 14 instructs the Financial Services Committee
(FSC) to submit changes in laws within its jurisdiction to
reduce the deficit by not less than $1,000,000,000 for the
period of fiscal years 2025 through 2034.\1\ Described further
below, this budget reconciliation bill contains five harmful
sections that significantly undermine consumer protection by
crippling the Consumer Financial Protection Bureau (CFPB);
raise the prospects of more costly financial crises by slashing
funds for the Financial Stability Oversight Council (FSOC) and
Treasury's Office of Financial Research (OFR); eliminate
corporate oversight by shuttering the Public Company Accounting
Oversight Board (PCAOB); and slash funding for building and
maintaining housing, even as an affordable housing crisis rages
across the country.
---------------------------------------------------------------------------
\1\To learn more about budget reconciliation, see Congressional
Research Service (CRS), Reconciliation Instructions in the House and
Senate FY2025 Budget Resolutions: In Brief (Mar. 28, 2025); CRS, The
Reconciliation Process: Frequently Asked Questions (Mar. 6, 2025); and
CRS, The Budget Reconciliation Process: The Senate's ``Byrd Rule''
(Sep. 28, 2022).
---------------------------------------------------------------------------
Section 50001. HUD's Green and Resilient Retrofit Program (GRRP)
This section eliminates the remaining funds for HUD's Green
and Resilient Retrofit Program, funds that were appropriated
through the Inflation Reduction Act, and that have been used to
help finance 37,000 housing units today.
The U.S. is experiencing one of the worst housing and
homelessness crises in its history. There is a growing shortage
of millions of homes for rent and purchase.\2\ Since 2019
alone, median asking rents have increased by nearly 50% as
house prices have reached an all-time high, surging by nearly
60% during that same timeframe.\3\ The ongoing affordable
housing crisis has contributed to more than 771,000 people
experiencing homelessness on any given night,\4\ the highest
rate of renters and homeowners paying over 30% and 50% of their
incomes on housing costs,\5\ over 4.2 million individuals at
risk of eviction or foreclosure,\6\ and millions of mortgage-
ready individuals being locked out of the dream of
homeownership.\7\ Moreover, the climate crisis is compounding
the housing supply and affordability challenges as devastating
storms and fires are destroying entire communities and leaving
residents displaced or homeless.\8\
---------------------------------------------------------------------------
\2\Id.
\3\U.S. Census Bureau, Housing Vacancies and Homeownership (CPS/
HVS) (Accessed Feb. 21, 2025); See also Federal Housing Finance Agency
(FHFA), FHFA House Price Index (Accessed Feb. 21, 2025); See also
National Association of Realtors (NAR), Existing-Home Sales Ascended
2.2% in December (Jan. 24, 2025).
\4\HUD, The 2024 Annual Homelessness Assessment Report (AHAR) to
Congress (Dec. 2024).
\5\Harvard Joint Center for Housing Studies (JCHS), The State of
the Nation's Housing 2024 (2024).
\6\U.S. Census Bureau, Phase 4.2 Cycle 09 Household Pulse Survey:
August 20-September 16 (Oct. 3, 2024).
\7\JCHS, The State of the Nation's Housing 2024 (2024).
\8\The Guardian, Displaced by climate disasters, ageing Americans
struggle to find housing (May 22, 2024); See also National League of
Cities, Why Cities Need to Think More About the Intersection of Housing
and Climate Change (Apr. 28, 2023); See also Center for American
Progress, A Perfect Storm: Extreme Weather as an Affordable Housing
Crisis Multiplier (Aug. 1, 2019).
---------------------------------------------------------------------------
Section 50001 of H. Con. Res. 14 undermines efforts to
address the climate and housing crises by rescinding
unobligated funds from the Department of Housing and Urban
Development's (HUD) Green and Resilient Retrofit Program
(GRRP). GRRP funds energy efficient and climate resilient
upgrades in multifamily housing assisted through HUD's Section
8, 202, and 811 Programs.\9\ Congress authorized $1 billion in
mandatory funding through the Inflation Reduction Act under
President Biden, including to support up to $4 billion in HUD
lending authority. However, upon taking office, the Trump
Administration cancelled GRRP contracts by Executive Order.\10\
On April 15, 2025, the U.S. District Court for the District of
Rhode Island granted a preliminary injunction in
Woonasquatucket River Watershed Council, et al. v. USDA, et
al., requiring HUD to immediately reinstate GRRP contracts
while litigation is pending.\11\ As of November 2024, HUD
reported that it had supported nearly 31,000 homes with 17% of
its funds being awarded in rural communities.\12\
---------------------------------------------------------------------------
\9\Public Law No. 117-169.
\10\The White House, Unleashing American Energy (Jan. 20, 2025);
See also The White House, Memorandum to the Heads Of Departments and
Agencies (Jan. 21, 2025).
\11\HUD, Memo re: Preliminary Injunction Order regarding
Disbursements for GRRP Awards (Apr. 16, 2025); See also LeadingAge New
York, Preliminary Injunction Granted for GRRP Housing Awards Freeze
(Apr. 22, 2025).
\12\HUD, GRRP Funding Overview (Nov. 2024).
---------------------------------------------------------------------------
Sec. 50002. Elimination of the Public Company Accounting Oversight
Board (PCAOB)
This section eliminates the Public Company Accounting
Oversight Board (PCAOB), an agency that oversees the auditors
of U.S. registered public companies, and transfers the
responsibilities to the Securities and Exchange Commission,
without providing any new funding or preserving the authority
to assess fees on the regulated auditors as Sarbanes-Oxley Act
of 2002 (Sarbanes-Oxley) currently provides. Congress
established the PCAOB in response to the Enron and WorldCom
accounting scandals. Enron's collapse alone resulted in the
loss of approximately 25,000 jobs, wiped out $74 billion in
shareholder value, and erased over $2 billion in employee
retirement savings.\13\ The failure of WorldCom cost
shareholders upwards of $180 billion.\14\ At the time of
failure, Enron was the 7th largest U.S. public company; for
comparison, today Berkshire Hathaway and Tesla are the 7th and
8th largest U.S. public companies. These events, coupled with
the subsequent collapse of Arthur Andersen--then one of the
world's largest accounting firms--damaged faith in the
integrity of U.S. financial reporting and the auditing
profession's ability to self-regulate. Some analysts have
estimated this period's broader scandals resulted in
approximately $7 trillion in lost wealth.\15\
---------------------------------------------------------------------------
\13\Portraits in Oversight: Congress and the Enron Scandal,
available https://levin-center.org/what-is-oversight/portraits/
congress-and-the-enron-scandal/.
\14\WorldCom scandal EBSCO Research Starters, available
https://www.ebsco.com/research-starters/business-and-management/
worldcom-scandal.
\15\An Estimate of the Costs of the Crisis in Corporate
Governance--Brookings Institution, available at https://
www.brookings.edu/wp-content/uploads/2016/06/20020722Graham.pdf.
---------------------------------------------------------------------------
In response to this crisis, Congress passed Sarbanes-
Oxley--the centerpiece of which was the creation of PCAOB,
whose primary purpose is to oversee the audits of public
companies and to ensure the accuracy and independence of audit
reports. The House--under the Financial Services Committee's
Republican Chair Mike Oxley--passed Sarbanes-Oxley with a vote
of 423-3, and the bill subsequently passed the Senate by a vote
of 99-0. President George W. Bush described it as ``the most
far-reaching reform of American business practices since the
time of Franklin D. Roosevelt,'' adding, ``the era of low
standards and false profits is over. No boardroom in America is
above or beyond the law.'' He also focused on the importance of
timely and reliable financial information that investors
deserve, saying, ``the only fair risks are based on honest
information. Tricking an investor into taking a risk is theft
by another name.'' Finally, he highlighted the critical need
for an independent regulator for the auditing profession: ``the
accounting profession will be regulated by an independent
board. This board will set clear standards to uphold the
integrity of public audits and have the authority to
investigate abuses and discipline offenders. And auditing firms
will no longer be permitted to provide consulting services that
create conflicts of interest.''\16\ In response to the 2008
Financial Crisis, the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 subsequently expanded the
PCAOB's jurisdiction to oversee auditors of SEC-registered
broker-dealers.\17\
---------------------------------------------------------------------------
\16\President George W. Bush, ``Remarks on Signing the Sarbanes-
Oxley Act of 2002,'' (July 30, 2002), available https://
www.presidency.ucsb.edu/documents/remarks-signing-the-sarbanes-oxley-
act-2002 (Accessed April 28, 2025).
\17\PCAOB: Information for Auditors of Broker-Dealers, available
https://pcaobus.org/resources/information-for-audit-firms/information-
for-auditors-of-broker-dealer#::text=The%20Dodd-
Frank%20Wall%20Street%20Reform%20and%20Consumer%20Protection,registered%
20with
%20the%20U.S. %20Securities%20and%20Exchange%20Commission.
---------------------------------------------------------------------------
Congress established the PCAOB as an independent, non-
profit body, overseen by the SEC, but crucially, made the PCAOB
distinct from it. This independence was deemed essential to
provide focused, specialized, and unbiased oversight of the
audits of public companies and broker-dealers, and ended the
century-long ``voluntary self-regulation of the auditing
profession and the beginning of formal, compulsory
oversight.''\18\
---------------------------------------------------------------------------
\18\See, Daniel Goezler, ``Restoring Public Confidence,'' Sept 15,
2003, available https://pcaobus.org/news-events/speeches/speech-detail/
restoring-public-confidence_145.
---------------------------------------------------------------------------
The PCAOB's mission, mandated by Congress, is explicit:
``to regulate the audits of public companies and SEC-registered
brokers and dealers in order to protect investors and further
the public interest in the preparation of informative,
accurate, and independent audit reports.''\19\ It fulfills this
mission through four primary functions:\20\
---------------------------------------------------------------------------
\19\See, PCAOB https://pcaobus.org/about/mission-vision-values.
\20\Information below is either from PCAOB's Annual Report or PCAOB
has provided these statistics through a briefing to Committee staff.
PCAOB's 2024 Annual Report is available at https://assets.pcaobus.org/
pcaob-dev/docs/default-source/about/administration/documents/
annual_reports/2024-annual-report.pdf?sfvrsn=9cfa1a56_2.
---------------------------------------------------------------------------
1. Registration: Overseeing and maintaining the
registration of all domestic and foreign public
accounting firms that audit U.S. public companies or
SEC-registered broker-dealers. Over 1,519, including
more than 844 international firms in 80 countries, are
currently registered.
2. Inspection: Conducting regular inspections of
registered firms to assess compliance with Sarbanes-
Oxley, Dodd-Frank Act, PCAOB and SEC rules, and
professional auditing standards. Nine of the largest
audit firms, representing 98% of the total U.S. market
capitalization, are audited annually. These inspections
are risk-based, focusing on areas where potential audit
failures pose the greatest threat to investors. Last
year, the PCAOB conducted inspections at 230 audit
firms, including 200 inspections in over 31 countries.
3. Standard-Setting: Establishing and maintaining
high-quality auditing, quality control, ethical, and
independence standards for registered firms to follow.
These standards serve as the benchmark for audit
quality in the U.S. markets.
4. Enforcement: Investigating potential violations
and imposing disciplinary sanctions, including monetary
penalties, and barring firms or individuals from
auditing public companieswhen standards are not met.
Through these integrated functions, the PCAOB plays an
indispensable role in promoting the reliability of the
financial statements upon which investors depend. This PCAOB's
oversight has contributed to the long-term decline in the
frequency of financial restatements from their peak in the mid-
2000s, suggesting an overall improvement in financial reporting
reliability.\21\ The PCAOB's focused efforts on setting and
enforcing what are widely regarded as gold-standard auditing
rules are fundamental to maintaining investor confidence in
U.S. capital markets.\22\
---------------------------------------------------------------------------
\21\Studies cited show a drop of over 50% between 2013 and 2022 150
and an 81% decline from the 2006 peak to 2020, see https://
www.auditanalytics.com/doc/2020_Financial_Restatements_A_Twenty-
Year_Review.pdf https://www.auditanalytics.com/doc/
2020_Financial_Restatements_A_Twenty-Year_Review.pdf.
\22\The Center for Audit Quality, accessed April 28, 2025, https://
www.thecaq.org/stakeholders-investors.
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Effective audit oversight requires deep, specialized
expertise. The PCAOB employs a staff of approximately 800
professionals, many with highly specialized qualifications and
experience in complex audit methodologies, quality control
systems, and forensic accounting techniques necessary to
effectively ``audit the auditors.'' This dedicated workforce
represents a significant concentration of expertise focused
solely on audit quality. The SEC has a much broader mandate,
encompassing market regulation, enforcement across various
sectors, corporate finance disclosure, investment management
oversight, and more. Its staff expertise is necessarily diverse
to cover these wide-ranging responsibilities.
The PCAOB is funded independently through mandatory
accounting support fees levied on the public companies and SEC-
registered broker-dealers it oversees. These fees are set
annually based on the PCAOB's budget, which is approved by the
SEC. The PCAOB draws no funds from the United States Treasury,
and by statute its receipts are not ``public monies of the
United States.''\23\
---------------------------------------------------------------------------
\23\MEMORANDUM OPINION FOR THE GENERAL COUNSEL PUBLIC COMPANY
ACCOUNTING OVERSIGHT BOARD available https://www.justice.gov/olc/file/
1553226/dl.
---------------------------------------------------------------------------
Effect of Eliminating the PCAOB and Transferring
Responsibilities to SEC
No Transition Period. Transferring the PCAOB's highly
specialized function into the larger, multi-mission SEC
structure raises concerns about dilution of focus and
expertise. Audit oversight could become just one of many
competing priorities within the SEC, potentially losing the
singular attention and resource allocation it currently
receives. Furthermore, replicating the PCAOB's specialized
workforce within the SEC would be a formidable challenge. It
could take years, potentially decades, to recruit, train, and
integrate a comparable cadre of audit oversight specialists
within the SEC's structure, assuming the necessary resources
were even allocated. During such a transition, the
effectiveness of audit oversight could diminish, increasing
risks for investors.
No Authorization for SEC Funding. Moreover, nothing in the
section requires Congress to increase the budget of the SEC.
Notably, because the PCAOB offsets its budget with fees paid by
regulated auditors, the SEC would instead have to offset its
budget with fees on securities transactions, which are paid by
registered brokers.
Jeopardizing International Oversight. A component of the
PCAOB's function is its international reach. Sarbanes-Oxley
explicitly grants the PCAOB authority to oversee, inspect, and
investigate non-U.S. audit firms that participate in the audits
of companies listed on U.S. exchanges or SEC-registered broker-
dealers. This authority is vital as investors in U.S. markets
rely on audits conducted across the globe. The PCAOB currently
has authority to conduct inspections in over 80 foreign
jurisdictions, and since 2004, has inspected auditors in over
58 non-U.S. jurisdictions. This is facilitated through
extensive cross-border cooperation, often formalized in
Memoranda of Understanding (MOUs) or Statements of Protocol
(SOPs) with foreign counterpart audit regulators. A recent
significant achievement was the agreement the current PCAOB
Chair Erica Williams reached with the People's Republic of
China (PRC).\24\ Subsequent inspections revealed alarmingly
high rates of deficiencies in the initial audits reviewed.\25\
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\24\FACT SHEET: CHINA AGREEMENT--PCAOB, accessed April 28, 2025,
https://pcaobus.org/news-events/news-releases/news-release-detail/fact-
sheet-china-agreement.
\25\The PCAOB and China: What's Happened Since the HFCAA Became
Law, accessed April 28, 2025, https://www.jgacpa.com/the-pcaob- and-
china-whats-happened-since-the-hfcaa-became-law and 190. 2023
Inspection Deloitte Touche Tohmatsu_PCAOB, accessed April 28, 2025,
https://assets.pcaobus.org/pcaob-dev/docs/default-source/inspections/
reports/documents/104-2024-079-dtt-hong-kong.pdf.
---------------------------------------------------------------------------
Shutting down the PCAOB would place the SOPs at significant
risk. The China SOP, like other international cooperative
agreements, specifically names the PCAOB as the U.S. regulatory
body.\26\ Dissolving the PCAOB as a distinct entity and
transferring its functions to a SEC division would risk
introducing serious uncertainty over the legal standing of
these agreements. Renegotiation may be required not only with
China but potentially with regulators in all 81 jurisdictions
where the PCAOB currently has agreements to operate.
---------------------------------------------------------------------------
\26\PCAOB/CSRC and MOF of PRC Statement of Protocol, on file with
Committee staff.
---------------------------------------------------------------------------
Committee staff requested technical analysis from PCAOB and
the SEC regarding the effects of the bill. In Appendix A,
below, we produce their responses, in relevant parts.
Sec. 50003. Significantly Reduced Funding for Consumer Financial
Protection Bureau (CFPB)
This section would slash the Consumer Financial Protection
Bureau's budget by 70%, undermining the CFPB's ability to
protect consumers. CFPB obtains its funding from the Board of
Governors of the Federal Reserve System (Fed), and the amount
the CFPB can obtain every year is capped at 12% of the Fed's
operating expenses from 2009.\27\ This cap has been adjusted
for inflation since the CFPB's creation, and for the current
fiscal year 2025 (FY25), the CFPB's funding cap is estimated to
be $823.1 million.\28\ This section, however, dispenses with
the past inflation adjustments, and would reduce the CFPB's
funding cap to $249 million for FY25. This represents a
significant 70% cut to their budget. Going forward, the cap's
inflation adjustment would start again in FY26. Furthermore,
this section caps CFPB's unobligated balances to 5% of the
annual funding cap ($12.45 million for FY25), and anything in
excess would be remitted to Treasury's general fund. This
section also cuts a provision that stipulates that funds CFPB
receives from the Fed are not subject to review by the
Appropriations Committees in the House and Senate, so
presumably this may mean they could hold hearings on CFPB's
funding. However, this section does not authorize
appropriations for CFPB.
---------------------------------------------------------------------------
\27\CRS, The Consumer Financial Protection Bureau Budget:
Background, Trends, and Policy Options (Feb. 4, 2025).
\28\CFPB, Annual Performance Plan and Report, and Budget Overview,
FY 2024 (Feb. 2024). Also for more budget-related reports, see CFPB,
Strategy, budget and performance (accessed Apr. 28, 2025).
---------------------------------------------------------------------------
In response to the 2007-2009 global financial crisis,
caused in part by a period of unchecked and rampant predatory
lending and a lax approach to enforcing consumer protections,
Congress passed the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank) in 2010. Dodd-Frank created the
CFPB as an independent Federal agency solely focused on
protecting consumers from getting ripped off in the financial
marketplace.\29\ Since 2011, the CFPB has delivered remediation
and relief to consumers, while imposing fines on companies and
individuals that break the law. The CFPB has provided more than
$21 billion in relief to 205 million harmed consumers in the
form of monetary compensation, principal reductions, and
canceled debts, among other things.\30\ Furthermore, the CFPB
has sent more than 10 million consumer complaints to financial
companies named in those complaints, with 98% of consumers
receiving a timely response.\31\
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\29\See CRS, Introduction to Financial Services: The Consumer
Financial Protection Bureau (Jan. 5, 2023).
\30\CFPB, The CFPB (accessed Mar. 21, 2025).
\31\CFPB, By The Numbers Fact Sheet (Nov. 2024).
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Congress designed the CFPB to be a strong, accountable
consumer watchdog led by a single Director appointed by the
President and confirmed by the Senate with an independent
funding mechanism that functions apart from the annual
appropriations process, similar to most other financial
regulators. The Supreme Court, with a 7-2 vote in an opinion
written by Justice Clarence Thomas, upheld the
constitutionality of CFPB's funding mechanism in the matter of
Consumer Financial Protection Bureau v. Community Financial
Services Association of America.\32\ Additionally, the CFPB
Director is required to report and testify before the Committee
twice a year to discuss the agency's budget and activities,
something that other regulators like the OCC and FDIC are not
required to do. Unlike other financial regulators, the CFPB's
rulemakings are subject to a small business review panel
process, as well as review and potential veto by the Financial
Stability Oversight Council.\33\
---------------------------------------------------------------------------
\32\Supreme Court, Opinion in the matter of CFPB v. CFSA (May 16,
2024).
\33\For more examples, see CFPB, The CFPB's Accountability to
Congress (Mar. 2023); and Constitutional Accountability Center,
Constitutional and Accountable: The Consumer Financial Protection
Bureau (Oct. 2016).
---------------------------------------------------------------------------
The proposed new funding cap of $249 million will not give
the agency sufficient resources to carry out all of its
obligations, including responding to millions of consumer
complaints, issuing regulations, monitoring thousands of bank
and nonbank financial companies that offer consumer financial
products and services, conducting examinations of the largest
consumer financial companies, and enforcing the law. In fact,
this funding level is 60% less than what former Trump
appointees who led the CFPB believed was required as a matter
of law to fulfill the agency's statutory obligations.
After shortly taking over as CFPB Acting Director, Mick
Mulvaney, who was no friend to the agency, requested $0 from
the Fed because the CFPB had sufficient funds to cover the
agency's operating expenses for the second quarter of FY
2018.\34\ In his next quarterly request letter to the Fed,
Acting Director Mulvaney complained about the structure of the
CFPB but wrote, ``However, I am bound to execute the law as
written.''\35\ He also noted that Section 1017 of Dodd-Frank
requires the Fed to transfer to the CFPB a quarterly sum
``determined by the Director to be reasonably necessary to
carry out the authorities of the Bureau under Federal consumer
financial law. . .''\36\ After doing so, he requested the Fed
transfer to the CFPB $98.5 million ($126.2 million adjusted for
inflation) for the third quarter of FY18.\37\
---------------------------------------------------------------------------
\34\ CFPB, CFPB Funding Request Letter to the Fed for FY18 Q2 (Jan.
17, 2018).
\35\CFPB, CFPB Funding Request Letter to the Fed for FY18 Q3 (Mar.
23, 2018).
\36\Id.
\37\Id. For inflation-adjustment calculations in this section,
staff utilized U.S. Bureau of Labor Statistics, CPI Inflation
Calculator (accessed Apr. 27, 2025) for each individual funding
request.
---------------------------------------------------------------------------
In fact, there were three occasions when Acting Director
Mulvaney and Director Kathy Kraninger made a quarterly funding
request near or above the proposed new annual funding cap of
$249 million. To fund the CFPB's operations for the first
quarter of FY19, FY20, and FY20, the CFPB leaders requested
$219 million, $278.1 million, and $249.9 million, respectively,
after adjusting for inflation.\38\ In total, Acting Director
Mulvaney and Director Kraninger made an average quarterly
funding request from the Fed of about $130.1 million (about
$155.3 million inflation-adjusted), which translated to an
average of about $520.5 million annually (about $621.4 million
inflation-adjusted).\39\ Thus, the new funding cap of $249
million would provide only 40% of the amount of funds that
Mulvaney and Kraninger decided were reasonably necessary for
the CFPB to carry out their law, despite being vocal critics of
the CFPB's structure.
---------------------------------------------------------------------------
\38\See CFPB, CFPB Funding Request Letter to the Fed for FY19 Q1
(Sep. 17, 2018)(Note: As he did in the Mar. 23, 2018 letter, Mulvaney
reiterated in this letter, ``However, I am bound to execute the law as
written.''); CFPB, CFPB Funding Request Letter to the Fed for FY20 Q1
(Sep. 24, 2019); and CFPB, CFPB Funding Request Letter to the Fed for
FY21 Q1 (Sep. 23, 2020).
\39\See the 12 quarterly funding request letters from Acting
Director Mulvaney and Director Kraninger between the third quarter of
FY18 and the second quarter of FY21, available at CFPB, CFPB Funds
Transfer Request Letters (accessed Apr. 27, 2025).
---------------------------------------------------------------------------
Sec. 50004. Crippling the CFPB's Civil Penalty Fund
This section would severely limit CFPB's use of the Civil
Penalty Fund (CPF). The section requires all CPF funds to be
remitted to Treasury that are not used to remediate directly
harmed consumers relating to that fine. This essentially
undermines the purpose of the CPF, which previously allowed the
CFPB to use penalties paid by bad actors to compensate harmed
consumers when they may otherwise receive partial or no
compensation because the violator closed or went bankrupt. This
section also strikes a provision that allowed the CFPB to use
any funding from CPF not immediately needed to remediate harmed
consumers to support financial literacy, though it is worth
noting CFPB rarely used such CPF funds for such purpose to
preserve funding for situations where CFPB identified and
wanted to remediate consumers were harmed by financial firms
that had closed or went bankrupt.
Congress created the CPF to hold civil penalties collected
by the CFPB from companies and individuals violating consumer
financial protection laws.\40\ Typically, when a company
violates a consumer financial protection law, the CFPB will
order the company to remediate harmed consumers directly and
pay a fine to the Civil Penalty Fund. The CFPB is used
primarily to compensate harmed consumers who cannot obtain full
compensation from the violator, for example if they
subsequently close or go bankrupt after they committed the
consumer violation. CFPB is currently allowed to use CPF funds
for consumer education and financial literacy programs, though
it rarely has done so, opting to preserve funds to remediate
harmed consumers that would not otherwise receive
compensation.\41\
---------------------------------------------------------------------------
\40\CFPB, Civil Penalty Fund (accessed Apr. 27, 2025); also see
CFPB, Civil Penalty Fund--Frequently Asked Questions (Dec. 20, 2023).
\41\CFPB, Civil Penalty Fund: consumer education and financial
literacy (accessed Apr. 28, 2025).
---------------------------------------------------------------------------
There have been numerous instances where the CPF has been
helpful to compensate harmed consumers that would not otherwise
receive relief, including when servicemembers, older consumers,
and students have been harmed.\42\ For example, in December
2024 and January 2025, the CFPB distributed $1.8 billion in
refund checks using the CPF to more than 4 million consumers
harmed by Lexington Law and CreditRepair.com, which the agency
previously found engaged in bait-and-switch advertising and
illegally collected upfront fees for marketed credit repair
services.\43\ CFPB also distributed $384 million to 191,000
consumers harmed by Think Finance and their illegal lending
practices.\44\ This section would prevent the CFPB from helping
these and similarly situated harmed consumers in the future,
undermining a key consumer protection tool.
---------------------------------------------------------------------------
\42\CFPB, Payments to harmed consumers by case (accessed Apr. 28,
2025); CFPB, The CFPB is protecting the military community and
providing relief (May 23, 2024); see state-by-state map at CFPB, CFPB
to distribute more than $53 million to consumers harmed by BrightSpeed
Solutions (Jul. 23, 2024); see state-by-state map at CFPB, CFPB v. All
American Check Cashing, Inc. and Mid-State Finance, Inc., and sole
owner, Michael Gray (Jul. 30, 2024).
\43\See state-by-state map at CFPB, CreditRepair.com and Lexington
Law refund checks: What you need to know (Dec. 5, 2024).
\44\See state-by-state map at CFPB, CFPB Distributes $384 Million
to 191,000 Victims of Think Finance's Illegal Lending Practices (May
14, 2024).
---------------------------------------------------------------------------
Sec. 50005. Significantly Reduced Funding for Financial Stability
Oversight Council (FSOC) and Office of Financial Research (OFR)
This section would significantly reduce funding for FSOC
and OFR by more than 90% and would even permit future funding
reductions. FSOC and OFR are both funded by the Financial
Research Fund (FRF), which is funded through assessments of the
largest banks and nonbank systemically important financial
institutions (SIFIs) designated by FSOC.\45\ In 2010, Congress,
though the Dodd-Frank Act, created the Financial Stability
Oversight Council (FSOC) and Treasury's Office of Financial
Research (OFR) to close regulatory gaps exposed by the 2007-
2009 global financial crisis and to ensure the U.S. financial
regulatory framework monitored and mitigated threats to U.S.
financial stability. FSOC is comprised of the Federal financial
regulators and the Secretary of the Treasury, who serves as
FSOC's Chairperson.\46\ FSOC ``was tasked with identifying
risks to financial stability, promoting market discipline by
eliminating expectations that the government will prevent firms
from failing, and responding to emerging threats to financial
stability.''\47\ OFR is an office within the Department of the
Treasury that supports the work of FSOC and its member
agencies, typically through research relating to financial
stability.\48\
---------------------------------------------------------------------------
\45\See FSOC budget documents at Treasury, Budget Documents--
Congressional Justification (accessed Apr. 28, 2025).
\46\Voting members include the chair of the FSOC (Treasury
Secretary); the heads of the FDIC, OCC, Federal Reserve, NCUA, SEC,
CFTC, FHFA, and CFPB; and an independent insurance expert appointed by
the President. Nonvoting members include the directors of the OFR and
Federal Insurance Office, as well as state regulatory representatives,
one each for insurance, banking, and securities. See CRS, Introduction
to Financial Services: Systemic Risk (Jan. 5, 2023); CRS, Financial
Regulation: Systemic Risk (Feb. 1, 2022); and CRS, Financial Stability
Oversight Council (FSOC): Structure and Activities (Feb. 12, 2018).
\47\CRS, Introduction to Financial Services: Systemic Risk (Jan. 5,
2023).
\48\Id.
---------------------------------------------------------------------------
This section would effectively limit the FRF to the annual
average of FSOC's expenses from the three most recent fiscal
years that have been completed, and any excess funds would be
remitted to Treasury's general fund. Notably, this formula does
not include OFR's expenses too, which is much larger than
FSOC's. For FY25, FSOC's budget is $19.7 million to support 48
employees, while OFR's budget is $124.6 million with 231
employees. Combined, their FY25 budget is $144.3 million.
Reviewing FSOC's expenses for FY22-FY24,\49\ this section
appears to create an estimated cap of $13.289 million,
representing a 90.8% funding reduction for FSOC and OFR
combined. Furthermore, this section would not prevent FSOC from
spending less than their new funding cap, and if they do, they
effectively will be lowering the cap for FSOC and OFR in future
years since the cap itself is based on FSOC's expenses over a
three-year period.
---------------------------------------------------------------------------
\49\FSOC's actual expenditures were $8.808 million for FY22,
$13.671 million for FY23, and a revised estimate for FY24 expenditures
of $17.388 million. See Treasury, Budget Documents--Congressional
Justification (accessed Apr. 28, 2025).
---------------------------------------------------------------------------
Moreover, this significant funding cut for FSOC and OFR
would also likely curtail the Federal Deposit Insurance
Corporation's (FDIC) implementation of Orderly Liquidation
Authority (OLA) pursuant to Title II of Dodd-Frank. Congress
created OLA after Lehman Brother's disorderly bankruptcy
contributed to the global financial crisis. OLA gives
regulators an alternative to bankruptcy to safely resolve a
large and complex failing financial firm. FSOC is required to
use part of their funds to reimburse FDIC's reasonable expenses
to implement OLA. Between 2010 and 2022, FSOC provided $64
million to FDIC for this purpose.\50\ In 2018, Trump directed
the Treasury Department to study OLA, and the Department
affirmed, ``Since the bankruptcy of a large, complex financial
company may not be feasible in some circumstances, Treasury
also recommends retaining OLA as an emergency tool for use
under extraordinary circumstances.''\51\ In September 2023,
FDIC's Office of Inspector General (OIG) found that FDIC had
made progress in implementing the OLA framework, however the
OIG made 17 recommendations of additional steps needed to
improve the agency's preparedness to utilize OLA to promote
financial stability.\52\ Those efforts could be curtailed by
this section, given the significantly less funding FSOC would
have at its disposal to reimburse the FDIC with.
---------------------------------------------------------------------------
\50\FDIC OIG, The FDIC's Orderly Liquidation Authority (Sep. 2023).
\51\Treasury, Treasury Releases Report To The President On Orderly
Liquidation Authority (Feb. 21, 2018).
\52\Id.
---------------------------------------------------------------------------
It Is worth noting this Is not the first time Republicans
have attempted to rollback FSOC and OFR. During Trump's first
term, the budget and staffing levels for FSOC and OFR were
significantly reduced. One analysis noted FSOC's budget was
reduced by more than 25% and staffing was reduced by almost
60%, and OFR's staffing levels were cut by more than half.\53\
The Biden Administration reversed course to strengthen these
financial stability bodies. For FY25, FSOC planned to increase
staffing to 48 full-time equivalent staff (FTEs) compared to 14
FTEs in FY21. OFR planned to increase its staffing to 231 FTEs,
which compares to when OFR had 111 FTEs in FY21.\54\ However,
this section would impose much more significant budget cuts on
FSOC and OFR than the Trump Administration advanced in his
first term, potentially crippling the work of these offices to
promote financial stability.
---------------------------------------------------------------------------
\53\Gregg Gelzinis, 5 Priorities for the Financial Stability
Oversight Council, Center for American Progress (Mar. 2021).
\54\See FSOC and OFR budget documents at Treasury, Budget
Documents--Congressional Justification (accessed Apr. 28, 2025).
---------------------------------------------------------------------------
Amendments
Committee Democrats offered dozens of amendments to improve
the bill, however Committee Republicans unanimously rejected
each of these.\55\ They include:
---------------------------------------------------------------------------
\55\FSC, BREAKING: Republicans Voted to Give Billionaires $7
Trillion Tax Cut and Drive U.S. Toward 2008-Style Recession (May 2,
2025).
---------------------------------------------------------------------------
Amendment from Rep. Waters. This amendment
would prevent the CFPB rollbacks and funding cuts from
taking effect unless Treasury certifies that the bill
will not lead to increased fraud for veterans or
prevent harmed veterans from getting prompt
remediation.
Amendment from Rep. Velazquez. This
amendment would exempt from the bill's CFPB's funding
cut to ensure the CFPB has resources necessary for CFPB
to fully enforce all regulations it has issued to
protect consumers.
Amendment from Rep. Lynch. This amendment
would provide an exemption to CFPB's funding cut to
ensure they have sufficient funding to protect
servicemembers.
Amendment from Rep. Foster. This amendment
would provide an exemption to CFPB's funding cut to
ensure they have sufficient funding to fully implement
their Sec. 1033 rule to promote open banking and data
privacy.
Amendment from Rep. Foster. This amendment
would ensure CFPB has sufficient funding to ensure
consumers are protected from unfair, deceptive, or
abusive acts or practices (UDAAP) related to Artificial
Intelligence (AI) and other emerging technologies used
in consumer finance.
Amendment from Rep. Foster. This amendment
would ensure CFPB has sufficient funding to operate the
consumer complaint database and ensure financial firms
respond to complaints.
Amendment from Rep. Liccardo. This amendment
would ensure that reforms to undermine CFPB's Civil
Penalty Fund will be blocked if the CFPB certifies that
the changes would prevent consumers harmed by corporate
malfeasance from being remediated.
Amendment from Rep. Himes. This amendment
would ensure harmed servicemembers and veterans would
still be compensated through CFPB's Civil Penalty Fund
if the financial firm has closed, went bankrupt, or is
otherwise unable to remediate such harmed consumers.
Amendment from Rep. Williams (GA). This
amendment would block the White House from undermining
CFPB's independence by prohibiting its ability to
review or modify CFPB's budget or proposed rules and
guidance before it is finalized.
Amendment from Rep. Bynum. This amendment
would ensure CFPB has sufficient funding for the
purpose of ensuring student borrowers are protected.
Amendment from Rep. Bynum. This amendment
ensures that CFPB has sufficient funding for the
purpose of implementing interpretative guidance on how
payment consumer protections apply to emerging digital
payment mechanisms, including those offered through
video gaming platforms.
Amendment from Rep. Bynum. This amendment
would prevent the CFPB rollbacks and funding cuts from
taking effect unless Treasury certifies that fees and
other financing costs will be reduced for every
consumer financial product.
Amendment from Rep. Pressley. This amendment
would maintain CFPB's robust funding and replace their
funding mechanism with industry assessments, including
on megabanks, big tech payment providers, and payday
lenders.
Amendment from Rep. Pressley. This amendment
would maintain CFPB's robust funding and replace their
funding mechanism with assessments on financial firms
that broke consumer financial protection laws.
Amendment from Rep. Bynum. This amendment
would make the effective date of the PCAOB related
section effective only upon certification by the SEC
that retirement savers would not be exposed to greater
risk, given that PCAOB will no longer inspect the
auditors and public company audits.
Amendment from Rep. Lynch. This amendment
allow FSOC to study the effects of Trump's ownership of
a crypto company that is creating a stablecoin and
crypto exchange, and given his government role, whether
such an arrangement could harm competition and
financial stability.
Amendment from Rep. Waters. This amendment
authorizes the SEC $3.2 billion, to be offset by fees
on well-known seasoned issuers (large public
companies), to carry out the duties that PCAOB would
now no longer do, including auditor registration,
inspections, standard setting, etc.
Amendment from Rep. Sherman. Strikes Sec.
50002, to not dismantle the PCAOB.
Amendment from Rep. Pressley. This amendment
would require FSOC and OFR to study DOGE cuts and their
negative effect on consumer harm and financial
stability.
Amendment from Rep. Pressley. This amendment
would require FSOC member agencies to report to
Congress on the types and amounts of sensitive data
that DOGE has had access to, and for FSOC to assess
whether that information sharing has undermined data
privacy, competition, cybersecurity, or other financial
stability concerns.
Amendment from Rep. Waters. This amendment
would allow FSOC to investigate the President and other
government officials who are gaining financial benefit
from their ownership and marketing of crypto products
for conflicts of interest that may harm financial
stability.
Amendment from Rep. Waters. This amendment
would allow FSOC to monitor risks to financial
stability arising from the government potentially
requiring the use of particular stablecoins and other
digital assets to contract with the government.
Amendment from Rep. Foster. This amendment
would require an FSOC and OFR study on the financial
stability impact of the use of social media and other
unofficial channels, including those personally owned
by the President, to convey major policy initiatives,
like on tariffs or attacking the independence of the
Fed.
Amendment from Rep. Vargas. This amendment
would require an FSOC and OFR study on the impact that
the President's attempt to undermine the independence
of the Federal Reserve has on the economy, price
stability, maximum employment, and dollar primacy.
Amendment from Rep. Tlaib. This amendment
would prevent these FSC provisions from taking effect
if the government extends or expands tax cuts for
wealthy individuals or large corporations.
Amendment from Rep. Pettersen. This
amendment would prevent these FSC provisions from
taking effect if the government cuts funding for
Medicaid, Social Security, or Supplemental Nutrition
Assistance Program (SNAP).
Amendment from Rep. Liccardo. This amendment
would require FSOC and OFR to study how chaotic tariff
plans and a global trade war can harm the economy,
financial system and dollar primacy.
Amendment from Rep. Bynum. This amendment
would require the Fed to conduct a study on the impact
tariffs have on the cost of goods and services for
consumers.
Amendment from Rep. Waters. This amendment
would provide over $150 billion in robust new
investment in housing to address the crisis.
Amendment from Rep. Waters. This amendment
would provide full funding for 60,000 Emergency Housing
Vouchers.
Amendment from Rep. Velazquez. This
amendment would strike Section 50001 and replace this
section with funding to address the public housing
capital backlog.
Amendment from Rep. Green. This amendment
would strike Section 50001 and replace this section
with Rep. Green's Reforming Disaster Recovery Act.
Amendment from Rep. Williams. This amendment
would strike Section 5001 and replace it with funding
for the HOME and CDBG programs to build, rehabilitate,
and preserve affordable and resilient housing to bring
down house prices and reduce the cost of post-disaster
recovery efforts.
Amendment from Rep. Pettersen. This
amendment would create an exception to the requirement
of transferring excess funds from the civil penalty
fund to Treasury. Any remaining amounts in the fund
that come from enforcement actions for violations of
the Military Lending Act shall be transferred to the
Department of Housing and Urban Development and the
Department of Veteran Affairs HUD-VASH program.
Amendment from Rep. Liccardo. This amendment
would provide that Section 50001 would not take place
if the HUD Secretary determines that the rescission of
funds would undermine efforts to reduce utility bills
to tenants and landlords in public housing.
Amendment from Rep. Liccardo. This amendment
would provide that Section 50001 would not take place
if the HUD Secretary determines that the rescission of
funds would reduce funding for affordable housing
projects to protect against natural disasters in
disaster-prone areas.
Group Opposition
There are a number of organizations that strongly oppose
this bill. For example, AARP, AFL-CIO, CFA Institute, Council
of Institutional Investors, and Former Regulators and
Accounting Professionals oppose the bill. There are also 349
consumer, civil rights, labor, lender, religious,
servicemember, student, senior, and community organizations
that ``oppose changes to the CFPB's funding, structure or other
changes that would weaken its ability to stand up for
consumers, competition and a fair financial marketplace,''\56\
including 20/20 Vision, Accountable.US, American Association
for Justice, American Association of People with Disabilities,
American Friends Service Committee, American Muslim Health
Professionals, Americans for Financial Reform (AFR), Americans
for Tax Fairness, Association for Financial Counseling &
Planning Education, Autistic Self Advocacy Network, Blue
Future, CAARMA, CAMEO Network, Center for Digital Democracy,
Center for Economic Justice, Center for Justice & Democracy,
Center for Law and Social Policy (CLASP), Center for LGBTQ
Economic Advancement & Research (CLEAR), Center for Responsible
Lending (CRL), Center for Survivor Agency and Justice, Chief
Warrant and Warrant Officers Association of the U.S. Coast
Guard, Coalition on Human Needs, Committee for Better Banks,
Communications Workers of America (CWA), Community Change
Action, Congregation of Our Lady of Charity of the Good
Shepherd, U.S. Provinces, Consumer Action, Consumer Federation
of America, Consumer Reports, Consumer Watchdog, Demand
Progress Education Fund, Demcast National Disability Belongs,
Disability Rights Advocates, Elder Justice Coalition, Equal
Rights Advocates, Faith in Action National Network, Family
Values @ Work, HEAL (Health, Environment, Agriculture, Labor)
Food Alliance, Health Care for America Now (HCAN), Impact Fund,
Indivisible, Institute for Local Self-Reliance, Interfaith
Center on Corporate Responsibility, Japanese American Citizens
League, Just Solutions, Justice in Aging, Local Initiatives
Support Corporation (LISC), MomsRising, National Advocacy
Center of the Sisters of the Good Shepherd, National
Association for Latino Community Asset Builders (NALCAB),
National Association for the Advancement of Colored People
(NAACP), National Association of Consumer Advocates (NACA),
National Association of Consumer Bankruptcy Attorneys (NACBA),
National Association of Social Workers, National Association of
Student Loan Lawyers, National Black Justice Coalition,
National Center for Law and Economic Justice, National
Coalition for Asian Pacific American Community Development
(National CAPACD), National Coalition for the Homeless,
National Community Reinvestment Coalition (NCRC), National
Consumer Law Center (on behalf of its low-income clients)
(NCLC), National Consumers League, National Disability
Institute, National Education Association, National Employment
Law Project, National Fair Housing Alliance (NFHA), National
Health Law Program, National Housing Law Project, National
Immigration Law Center, National LGBTQI+ Cancer Network,
National Low Income Housing Coalition, National Military Family
Association, National Partnership for Women & Families,
National Women's Law Center, NETWORK Lobby for Catholic Social
Justice, P Street, People Power United, Popular Democracy In
Action, Poverty & Race Research Action Council, Private Equity
Stakeholder Project, Project on Predatory Student Lending,
Public Advocacy for Kids (PAK), Public Citizen, Public Good Law
Center, Public Justice, Pulmonary Hypertension Association,
Student Borrower Protection Center, The National Council of
Asian Pacific Americans (NCAPA), Truth in Advertising, Inc.
(TINA.org), U.S. PIRG, United Church of Christ, Woodstock
Institute, and Young Invincibles.
---------------------------------------------------------------------------
\56\NCLC, Letter in Support of the CFPB (Apr. 29, 2025).
---------------------------------------------------------------------------
For these reasons, we oppose the ``Financial Services
Committee Print, Providing for reconciliation pursuant to H.
Con. Res. 14, the Concurrent Resolution on the Budget for
Fiscal Year 2025.''
Sincerely,
Maxine Waters,
Ranking Member.
Nydia M. Velazquez,
David Scott,
Al Green,
Bill Foster,
Brad Sherman,
Stephen F. Lynch,
Emanuel Cleaver, II,
Joyce Beatty,
Juan Vargas,
Ayanna Pressley,
Sylvia R. Garcia,
Brittany Pettersen,
Janelle S. Bynum,
Sean Casten,
Rashida Tlaib,
Nikema Williams,
Cleo Fields,
Members of Congress.
Appendix A
TECHNICAL ANALYSIS FROM PCAOB
PCAOB programs would be impossible to replicate in the legislation's
one year timeframe without significant disruption to audit
oversight
The PCAOB has spent the last 22 years developing
inspection, enforcement, and standard-setting programs that are
based on audit-specific experience and expertise. That
experience and expertise cannot simply be transferred to the
SEC, meaning that there would be significant disruptions in our
programs, putting our investor-protection mandate at serious
risk.
The PCAOB operates three main programs.
First, we inspect over 200 audit firms each
year on a statutorily mandated schedule. We inspect
selected audits and the quality control systems at
these firms and publish our results in inspection
reports. We also provide a remediation process that
allows firms to correct quality control criticisms that
we find during these inspections.
Second, we conduct investigations and bring
enforcement matters where we find serious violations of
audit-related rules and standards.
Finally, we set rules and standards for
audits of publicly-traded companies and broker-dealers.
Re-creating these programs at the SEC would be
extremely difficult for two primary reasons:
First, the PCAOB has spent the last 22 years building our
programs. While our policies and processes are certainly
critical to our programs, it is our people who execute our
investor-protection mission. We have spent more than two
decades hiring experts in the field of auditing and further
developing their expertise to perform inspections,
investigations, and enforcement, and standard setting. It would
be very difficult to re-create the talented expert staff that
the PCAOB has assembled. Because each of our programs requires
expertise to execute, including making complex judgments in
technical areas, having the right staff is critical to our
success as an audit regulator.
Second, we have spent twenty years negotiating agreements
with the governments of foreign countries in which we need to
perform inspections and investigations. Many of the countries
in which we perform our work require by law that these
agreements be in place. They are often difficult to negotiate,
require the consent of multiple government bodies, and have
taken years to put in place. The SEC is not a party to these
agreements, and the agreements do not provide for assigning the
duties and privileges of these agreements to another party,
like the
SEC. As a result, the SEC will not be able to inspect or
investigate in many of these countries, including China, until
new agreements are reached.
As discussed in greater detail below, we estimate that it
will take years to reassemble staff with the experience and
expertise necessary to perform these inspections and to
negotiate agreements with foreign governments required to
perform our work. While those processes are ongoing, audit
firms will know that their regulator is compromised and unable
to adequately inspect and investigate their work. That puts
investors in a dangerous position.
Experience of PCAOB staff
The PCAOB performs a large number of inspections each year.
We have approximately 480 inspectors who conduct inspections,
including selecting engagements for inspection, drafting
inspection reports, and conducting our quality control
remediation process, and many others are essential to
supporting their work. In 2024, our inspectors spent over
750,000 hours inspecting 231 audit firms, including reviewing
portions of over 900 individual audits, and conducting our
quality control remediation process. These inspections were
performed in 36 countries and include more than 20,000 hours
that the PCAOB spent inspecting firms in mainland China and
Hong Kong. In order to maintain that level of inspections work,
the SEC would need to assemble a comparably-sized team of
highly experienced staff willing and able to travel around the
world to perform this work. We additionally have over 70 staff
across our Office of the Chief Auditor and Office of Economic
and Risk Analysis who all have unique experience to consult
with and assist inspectors. These are aside from staff who have
gained specialized experience operationalizing our programs.
our programs.
The experience and expertise of the team are just as
important as its size. Our inspections staff average 22 years
of auditing and inspections experience. On average, half of
that experience (11 years) was obtained working at public
accounting firms and half was obtained working at the PCAOB.
Our inspection leaders average over 31 years of experience, of
which nearly half (14 years) occurred in public accounting
prior to joining the PCAOB.
Our inspections staff have professional expertise in over
30 different industry sectors, including banking, technology,
manufacturing, retail, oil and gas, and broker-dealers. Many of
these sectors require specialized accounting, making this
expertise invaluable. Our inspections staff also have expertise
across 40 different subject matters that involve complex
accounting and auditing, including revenue recognition,
allowance for credit losses, derivatives, business
combinations, and technology. Additionally, our inspection
staff have expertise in over 30 different languages, which is
important to support our work across the globe.
The same is true across our enforcement and standard-
setting groups. Our staff are experts in auditing and are
therefore able to bring complex auditing-related investigations
and enforcement matters and draft standards that address the
audit issues that put investors at risk. On average, our
enforcement staff have over eight years of professional
experience at the PCAOB, and most have a minimum of seven years
of experience addressing complex legal and accounting/auditing
issues before coming to the PCAOB. Our standard-setting staff
have an average of nearly 10 years of standard-setting and
rulemaking experience at the PCAOB, in addition to a minimum of
10 years of experience working in public accounting before
joining the PCAOB.
Because of the experience and expertise required to
successfully execute our programs, it has taken many years to
build them to their current levels. Our inspection program
began in 2003, and it took approximately six years for the
inspection program to develop to the point where all
statutorily required inspections of U.S. firms were performed
at a basic level. More advanced types of inspections and
inspections of certain critical foreign firms came later.
Inspectors' familiarity with the firms and their
methodologies has continuously increased and contributes to the
effectiveness and efficiency of inspections.
Still, even if the SEC assumed the significant cost of
offering positions to all 480 plus PCAOB staff needed to
conduct inspections, it is not guaranteed staff would be
available to fill those roles. There is currently an industry-
wide shortage of accounting and audit talent, and our team
members are some of the most respected and employable members
of the profession. In the last few years, firms have hired many
of our staff members, often at significant salary increases.
Our team members would be highly valued both in companies'
accounting departments and at audit firms.
The SEC would be unable to inspect and investigate in the most critical
foreign jurisdictions for a significant period of time, if at
all
As a threshold matter, without greatly expanding on it in
this letter, there is a risk that the Proposed Bill would be
deemed to have no extraterritorial application--meaning the
Proposed Bill might eliminate inspections and investigations
abroad. In such case, the Proposed Bill will all but nullify
the Holding Foreign Companies Accountable Act, signed into law
by President Donald J. Trump, which gave the PCAOB historic
access to Chinese audit firms.
Potential legal deficiencies aside, the PCAOB regulates
audit firms that audit publicly-traded companies listed on U.S.
stock exchanges (among other issuers), regardless of where
those companies or their auditors are located. This means that
there are many foreign audit firms that fall within the PCAOB's
jurisdiction. In fact, of the 1,519 audit firms registered with
the PCAOB as of April 15, 2025, 844 of them were non-U.S.
firms.
The fact that a majority of registered firms are non-U.S.
firms creates unique challenges. Many jurisdictions--including
China, Hong Kong, and every member state of the European
Economic Area--require that we enter into agreements with their
governments in order to inspect and investigate audit firms in
their countries. These agreements include statements of
protocol with provisions on how inspections will be conducted,
how foreign governments will facilitate (but not interfere
with) our inspections, and how confidential information will be
shared between the PCAOB and the foreign audit regulator, and
they were negotiated over a period of twenty years. More than a
dozen of the agreements are accompanied by separate, detailed
data protection agreements that govern our procedures for
handling protected information, such as personally-identifiable
information, obtained in foreign jurisdictions.
The PCAOB currently has 27 working arrangements (not
including accompanying data protection agreements) with foreign
authorities, including a statement of protocol signed in 2022
that allows us to inspect and investigate completely in
mainland China and Hong Kong for the first time. These
agreements facilitate cooperation in each of these
jurisdictions, but they are currently required in 20
jurisdictions for us to perform our work, including mainland
China, Hong Kong, countries in the European Union and European
Economic Area (EU/EEA), Switzerland, and the United Kingdom
(with more EU/EEA countries requiring inspections--and
therefore agreements--in the next few years). These are some of
the jurisdictions with the most registered firms and some of
the largest public companies. Together, firms in these 20
jurisdictions audit public companies representing $6.3 trillion
in global market capitalization--roughly half of the $12.3
trillion market capitalization of public companies audited by
all non-U.S. firms inspected by the PCAOB.
None of the agreements contains provisions that would allow
the PCAOB's privileges and responsibilities under the
agreements to be transferred to the SEC. In fact, all of the
agreements are voluntary, and either party can exit the
agreement at any time. This means that the foreign
jurisdictions can simply end the agreements, are not in any way
required to form new agreements with the SEC, and may indeed be
required by their own laws to renegotiate such agreements.
These agreements give the PCAOB access that the SEC does
not otherwise have. Importantly, the PCAOB's newly-obtained
ability to inspect and investigate Chinese firms, made possible
by the Holding Foreign Companies Accountable Act, would not
transfer to the SEC and would be lost unless a new agreement
can be formed and successfully implemented. PCAOB inspections
and enforcement matters have revealed poor audit quality at
several Chinese firms and have allowed us to take steps to
protect investors who invest in Chinese companies traded on
U.S. exchanges. That ability to protect investors in Chinese
companies would, at a minimum, be significantly disrupted.
Even if the SEC were able to negotiate new agreements, it
would take a significant amount of time. Many of these
agreements have taken years to negotiate (and, collectively,
well over a decade), and they often require the approvals of
several government entities within a given jurisdiction. A
transfer of PCAOB inspections functions to the SEC can be
expected to delay, at least, the 2025 and 2026 inspections of
non-U.S. firms as authorities in those jurisdictions assess
whether they can facilitate SEC access to audit work papers in
compliance with local laws under existing arrangements or
whether new agreements and/or regulatory approvals are
required.
For example, the law in the European Union requires an
``Adequacy Decision'' for foreign regulators, like the PCAOB or
SEC, before any audit firm may transfer audit work papers to
that audit regulator for inspections or investigations.
Although the current EU Adequacy Decision recognizes the SEC as
a ``competent authority'' to investigate audit firms in the EU,
the PCAOB is the only U.S. authority to whom firms in the EU
can transfer audit work papers and associated material for
inspections.
The SEC would therefore need European authorities to revise
the current Adequacy Decision to include the SEC as a party to
whom audit work papers may be transferred for the purpose of
inspections, and that statutory legal process alone requires
nine months to a year. The European Commission (EC) initiates
and manages this process, but it requires fact finding and
legal analysis by, consultation with, and an affirmative vote
of, all European Economic Area (EEA) audit regulators (via the
Committee of European Audit Oversight Bodies or CEAOB). The
PCAOB was able to obtain an Adequacy Decision only after an
extensive education campaign about its inspection and
enforcement processes and legal protections under U.S. law for
information provided to the PCAOB by EU auditors, as well as
reaching a nuanced understanding with regard to the reliance
among audit regulators that is required by EU law.
Additionally, EU law and the Adequacy Decision require that
each EEA audit regulator have in place bilateral agreements
with third-country audit regulators, such as the PCAOB or SEC,
that satisfy EU law, before firms can provide audit work papers
to the third-country authorities. These arrangements address
legal requirements on both sides, including the scope of
cooperation, the confidentiality of information provided, the
scope of the use of such information, potential onward transfer
of information to other authorities, and the protection and use
of personal data. Finally, because the U.S. is not deemed
adequate by the EU with respect to the protection of personal
data, an administrative arrangement (bilateral agreement)
addressing the requirements of the EU General Data Protection
Regulation (GDPR) for the transfer of personal data to an audit
regulator in the U.S. is also required. Such agreements must be
approved by a European Data Protection Board (EDPB) opinion
finding that the agreements are compliant with GDPR (as
required by EU law, including the Adequacy Decision). The
PCAOB's negotiation and EDPB approval of a model data
protection agreement took well over two years, and the PCAOB
continues to negotiate additional agreements based on this
model, which takes months, if not longer, given the country-
specific approval processes required in each EU member state.
These are just examples for European Union countries. Other
countries present different challenges, and legal conflicts
must be resolved frequently.
The PCAOB is uniquely positioned to secure and maintain
these critical bilateral agreements. In particular, the PCAOB
staff believe that the PCAOB's status as a non-governmental
entity and the restrictions in SOX related to the PCAOB's use
and onward transfer of information received in connection with
PCAOB inspections and investigations were extremely helpful in
achieving access to jurisdictions around the world. While
challenges reaching new agreements with other countries are
likely not insurmountable, they will take time and skill to
surmount.
We do not anticipate the proposal having the desired cost savings for
the federal government
It is not at all clear that transferring the PCAOB's
responsibilities to the SEC would result in any cost savings
for the federal government. First, it should be noted that
because the PCAOB is a private entity, the majority of whose
funding comes from fees paid by the largest publicly-traded
companies, rather than through taxes, transferring the PCAOB's
responsibilities to the SEC would require an expansion of the
federal budget.
As described above, in order to execute the PCAOB's
responsibilities, the SEC would need to hire hundreds of
highly-skilled staff members. Although publicly-available
information on SEC salary ranges also indicates that the
average salaries of our inspectors are comparable to salaries
of professionals at the SEC, over the last three years our
staff seldom moved from the PCAOB to the SEC. The SEC also
would need to set up and maintain systems that would allow them
to perform inspections, including IT systems to document
inspections work and retain firm work papers that serve as
evidence of the inspection findings. Such systems are expected
to cost tens of millions of dollars to develop and maintain.
Consequently, there likely would be minimal to no savings
in compensation and IT costs related to our inspections program
should it transfer to the SEC. While we have not been contacted
by the Congressional Budget Office seeking our technical
assistance, we stand ready to offer our perspective on the
budgetary implications of the Proposed Bill.
The potential legal ramifications of the Proposed Bill's cut-and-paste
approach
As an initial matter, the ``cut and paste'' approach the
Proposed Bill takes to simply replace all references to the
PCAOB under current law with the SEC may result in significant
unintended consequences. For instance, the Proposed Bill
requires that any reference to the Board in any law,
regulation, document, record, map, or other paper of the United
States be treated as a reference to the ``Commission.'' In so
doing, where Section 101(b) of SOX previously referenced the
PCAOB, it would now read, ``the Commission shall not be an
agency or establishment of the United States Government. . . .
No member or person employed by, or agent for, the Commission
shall be deemed to be an officer or employee of or agent for
the Federal Government by reason of such service.''
This is just one example; there are more. The Proposed Bill
leaves the PCAOB in a state of existential purgatory; transfers
intellectual property retained by the PCAOB, including that
which was developed by or in conjunction with third parties, to
the SEC without consideration of the constitutional or
contractual implications of doing so; makes consequential
changes to the current multi-level review framework for
registration disapproval decisions, inspection findings, and
remediation determinations; and elevates the PCAOB's existing
processes to the functional equivalent of SEC rules. These are
some of the many complex issues that our staff have identified
since we first learned of the language of the Proposed Bill
near midnight last Friday.
The legal complexities and the potential market
implications of disrupting domestic and foreign inspections
(among other consequences) require careful deliberation. PCAOB
staff have had mere days to consider these significant changes.
By comparison, prior to enacting SOX, the Senate Banking
Committee held ten hearings and engaged in a four-months-long
bipartisan deliberation. The House Financial Services Committee
held three hearings and deliberated for five weeks. The legal,
practical, and market impacts of significant changes to the
PCAOB are of such magnitude that significant difficulties may
arise if those changes are made without sufficient time and
deliberation, potentially resulting in harm to investors. The
PCAOB staff will continue to assess the impacts of the Proposed
Bill and stand ready to provide technical assistance.
The Proposed Bill would lead to significant gaps in investor protection
In summary, this proposal would lead to significant gaps in
investor protection. The SEC already has a wide mandate. Adding
to it would take significant time and resources. Adding a
global audit oversight function would stretch the SEC's
resources thin, disrupt ongoing inspections of audit firms, and
nullify carefully negotiated agreements. By contrast, the PCAOB
has focused exclusively on audit quality and resulting investor
protection for over 20 years and has built a successful program
that is a model for audit regulators around the world. Much of
the PCAOB's expertise and experience would be sacrificed by
transferring its functions to the SEC, and we expect that there
would be significant disruptions in audit oversight over the
coming years while the SEC tries to build that experience and
expertise in-house and attempts to secure agreements with
foreign governments.
When similar audit oversight was absent in the early 2000s,
accounting restatements and fraud wiped out hundreds of
billions of dollars in shareholder value. History shows us what
happens when auditor scrutiny faces impediments. These
disruptions invite that risk back into today's far larger and
far more interconnected markets.
Technical Analysis from the SEC regarding the PCAOB section (Section
50002) of the bill produced at the request of the Committee
staff, reproduced here, in relevant parts.
Does the SEC have any indication or engagement to suggest that
jurisdiction that have signed SOPs with PCAOB are willing to
sign similar SOPs with the SEC?
OCA Response: OCA understands that the SEC is not a party
to any of the PCAOB's SOPs. For more than three decades, the
SEC has developed an extensive list of Memorandums of
Understanding with many foreign authorities under Sec. 24 of
the Exchange Act. Additional analysis is required to determine
their breadth, including applicability to audit oversight and
regulation. We feel confident that the SEC could accede to
these relationships.
How many examiners or auditors does the SEC employ who have specialized
experience in inspecting audit firms?
OCA Response: As of April 2025, OCA does not employ any
personnel with experience conducting examinations or
inspections of registered public accounting firms. Certain OCA
staff in the Professional Practice Group, Accounting Group, and
International Group have previous private sector experience
conducting internal inspections of audits. As part of the
Commission's current PCAOB oversight responsibilities, there
are nine professionals in OCA's professional practice group, in
addition to the Acting Chief Accountant, who regularly engage
on issues related to the PCAOB's inspection program (e.g.,
methodology, reporting, interim Commission review of PCAOB
inspection reports pursuant to 17 CFR Sec. 202.140). There are
an additional two personnel in the International Group who
regularly engage on international auditing and oversight
activities that consider audit firm inspection issues.
Additionally, the draft legislation provides that employees of
the Board ``may be offered equivalent positions on Commission
staff.''
How many auditors does the SEC have that have previously inspected
audit firms under SOX?
OCA Response: OCA is not aware of any of its personnel that
have engaged in the examination of an audit firm pursuant to
SOX (presumably as a member of the PCAOB staff). Note--this
does not include SEC personnel's engagement on Interim
Commission review of PCAOB inspection reports pursuant to 17
CFR Sec. 202.140 as responsive. Additionally, the draft
legislation provides that employees of the Board ``may be
offered equivalent positions on Commission staff.''
How many individuals in SEC's Office of Chief Accountant are
professional accounting fellows?
OCA Response: As of April 2025, 10 of OCA's 40 employees
are Professional Accounting Fellows.
For each of the last 5 years, what has been the average salary (whether
paid by the SEC or others) of the professional accounting
fellows?
OCA Response: In each of the past five years, OCA
Professional Accounting Fellows have been full time employees
on the Commission staff on term appointments that typically
last between two and three years and are not to exceed four
years. These positions are at the SK-16 pay grade in
Washington, DC, with ranges over the past five years is as
follows:
------------------------------------------------------------------------
Pay Range--Washington, D.C.
(Locality Adj. 30.48%-33.94%)
Year -------------------------------------
Minimum Maximum
------------------------------------------------------------------------
2020.............................. $148,878 $250,334
2021.............................. 148,878 252,838
2022.............................. 153,377 260,479
2023.............................. 160,831 272,100
2024.............................. 169,368 284,600
2025.............................. 173,127 289,400
------------------------------------------------------------------------
How many of these professional accounting fellows have returned to
accounting firms/audit firms?
OCA Response: OCA does not maintain official records of
former employees' current employer. However, based on
historical experience, a majority of OCA's Professional
Accounting Fellows seek employment at accounting firms at the
end of their fellowship. OCA also notes that OCA Professional
Accounting Fellows have not solely been hired from accounting
firms (e.g., fellows have been accepted into the program from
public companies and standard-setting bodies).
How many of the former professional accounting fellows have appeared or
practiced or engaged before OCA?
OCA Response: OCA does not maintain records of former
employees' appearance and practice before the Commission or
engagement with OCA. However, based on historical experience, a
majority of OCA's Professional Accounting Fellows appear and
practice before the Commission in some capacity (e.g., as an
auditor or preparer of financial statements) following
employment in accordance with the SEC post-employment
restrictions.
Committee on Homeland Security,
House of Representatives,
Washington, DC, May 8, 2025.
Hon. Jodey C. Arrington,
Chairman, Committee on the Budget,
House of Representatives, Washington, DC.
Dear Chairman Arrington: Pursuant to section 2001 of the
Concurrent Resolution on the Budget for Fiscal Year 2025, I
hereby transmit these recommendations which have been approved
by vote of the Committee on Homeland Security, and the
appropriate accompanying material including supplemental,
minority, additional, or dissenting views, to the House
Committee on the Budget. This submission is in order to comply
with reconciliation directives included in H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025, and
is consistent with section 310 of the Congressional Budget Act
of 1974.
Sincerely,
Mark E. Green,
Chairman, Committee on Homeland Security.
[Committee Print, as reported by the Committee on Homeland Security]
_______________________________________________________________________
(Providing for reconciliation pursuant to H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025)
_______________________________________________________________________
TITLE VI--COMMITTEE ON HOMELAND SECURITY
SEC. 60001. BORDER BARRIER SYSTEM CONSTRUCTION, INVASIVE SPECIES, AND
BORDER SECURITY FACILITIES IMPROVEMENTS.
In addition to amounts otherwise available, there is
appropriated to the Commissioner of U.S. Customs and Border
Protection for fiscal year 2025, out of any money in the
Treasury not otherwise appropriated, to remain available until
September 30, 2029, the following:
(1) $46,500,000,000 for necessary expenses relating
to the following:
(A) Construction, installation, or
improvement of primary, waterborne, and
secondary barriers.
(B) Access roads.
(C) Barrier system attributes, including
cameras, lights, sensors, roads, and other
detection technology.
(2) $50,000,000 for necessary expenses relating to
eradication and removal of the carrizo cane plant, salt
cedar, or any other invasive plant species that impedes
border security operations along the Rio Grande River.
(3) $5,000,000,000 for necessary expenses relating to
lease, acquisition, construction, or improvement of
U.S. Customs and Border Protection facilities and
checkpoints in the vicinity of the southwest, northern,
and maritime borders.
SEC. 60002. U.S. CUSTOMS AND BORDER PROTECTION PERSONNEL AND FLEET
VEHICLES.
(a) CBP Personnel.--In addition to amounts otherwise
available, there is appropriated to the Commissioner of U.S.
Customs and Border Protection for fiscal year 2025, out of any
money in the Treasury not otherwise appropriated,
$4,100,000,000, to remain available until September 30, 2029,
to hire and train additional Border Patrol agents, Office of
Field Operations Officers, Air and Marine agents, rehired
annuitants, and U.S. Customs and Border Protection support
personnel.
(b) Restrictions.--None of the funds made available by
subsection (a) may be used to recruit, hire, or train personnel
for the duties of processing coordinators.
(c) CBP Retention and Hiring Bonuses.--In addition to amounts
otherwise available, there is appropriated to the Commissioner
of U.S. Customs and Border Protection for fiscal year 2025, out
of any money in the Treasury not otherwise appropriated,
$2,052,630,000, to remain available until September 30, 2029,
to provide annual retention bonuses or signing bonuses to
eligible Border Patrol agents, Office of Field Operations
Officers, and Air and Marine agents.
(d) CBP Vehicles.--In addition to amounts otherwise
available, there is appropriated to the Commissioner of U.S.
Customs and Border Protection for fiscal year 2025, out of any
money in the Treasury not otherwise appropriated, $813,000,000,
to remain available until September 30, 2029, for the lease or
acquisition of additional marked patrol units.
(e) FLETC.--In addition to amounts otherwise available, there
is appropriated to the Director of the Federal Law Enforcement
Training Center for fiscal year 2025, out of any money in the
Treasury not otherwise appropriated--
(1) $285,000,000, to remain available until September
30, 2029, to support the training of newly hired
Federal law enforcement personnel employed by the
Department of Homeland Security; and
(2) $465,000,000, to remain available until September
30, 2029, for procurement and construction,
improvements, and related expenses of the Federal Law
Enforcement Training Centers facilities.
(f) Border Security Workforce Recruitment and Applicant
Sourcing.--In addition to amounts otherwise available, there is
appropriated to the Commissioner of U.S. Customs and Border
Protection for fiscal year 2025, out of any money in the
Treasury not otherwise appropriated, $600,000,000, to remain
available until September 30, 2029, for marketing, recruiting,
applicant sourcing and vetting, and operational mobility
programs for border security personnel.
SEC. 60003. U.S. CUSTOMS AND BORDER PROTECTION TECHNOLOGY, NATIONAL
VETTING CENTER, AND OTHER EFFORTS TO ENHANCE BORDER
SECURITY.
(a) CBP Technology.--In addition to amounts otherwise
available, there is appropriated to the Commissioner of U.S.
Customs and Border Protection for fiscal year 2025, out of any
money in the Treasury not otherwise appropriated, to remain
available until September 30, 2029, the following:
(1) $1,076,317,000 for necessary expenses relating to
procurement and integration of new non-intrusive
inspection equipment and associated civil works,
artificial intelligence, integration, and machine
learning, as well as other mission support, to combat
the entry of illicit narcotics along the southwest,
northern, and maritime borders.
(2) $2,766,000,000 for necessary expenses relating to
upgrades and procurement of border surveillance
technologies along the southwest, northern, and
maritime borders.
(3) $673,000,000 for necessary expenses, including
the deployment of technology, relating to the biometric
entry and exit system under section 7208 of the
Intelligence Reform and Terrorism Prevention Act of
2004 (8 U.S.C. 1365b).
(b) Restrictions.--None of the funds made available pursuant
to subsection (a)(2) may be used for the procurement or
deployment of surveillance towers that have not been--
(1) tested, and
(2) accepted,
by the Federal Government to deliver autonomous capabilities.
(c) Air and Marine Operations.--In addition to amounts
otherwise available, there is appropriated to the Commissioner
of U.S. Customs and Border Protection for fiscal year 2025, out
of any money in the Treasury not otherwise appropriated,
$1,234,000,000, to remain available until September 30, 2029,
for Air and Marine Operations' upgrading and procurement of new
platforms for rapid air and marine response capabilities.
(d) National Vetting Center.--In addition to amounts
otherwise available, there is appropriated to the Commissioner
of U.S. Customs and Border Protection for fiscal year 2025, out
of any money in the Treasury not otherwise appropriated,
$16,000,000, to remain available until September 30, 2029, for
necessary expenses relating to U.S. Customs and Border
Protection's National Vetting Center to support screening,
vetting activities, and expansion of the criminal history
database of foreign nationals.
(e) Other Efforts to Combat Drug Trafficking to Enhance
Border Security.--In addition to amounts otherwise available,
there is appropriated to the Secretary of Homeland Security for
fiscal year 2025, out of any money in the Treasury not
otherwise appropriated, $500,000,000, to remain available until
September 30, 2029, for enhancing border security and
combatting trafficking, including fentanyl and its precursor
chemicals, at the southwest, northern, and maritime borders.
(f) Commemorations.--In addition to amounts otherwise
available, there is appropriated to the Secretary of Homeland
Security for fiscal year 2025, out of any money in the Treasury
not otherwise appropriated, $1,000,000, to remain available
until September 30, 2029, for commemorating efforts and events
related to border security.
(g) Definition.--In this section, the term ``autonomous''
means integrated software and hardware systems that utilize
sensors, onboard computing, and artificial intelligence to
identify items of interest that would otherwise be manually
identified by U.S. Customs and Border Protection personnel.
SEC. 60004. STATE AND LOCAL LAW ENFORCEMENT PRESIDENTIAL RESIDENCE
PROTECTION.
(a) Presidential Residence Protection.--In addition to
amounts otherwise available, there is appropriated to the
Administrator of the Federal Emergency Management Agency, for
fiscal year 2025, out of any money in the Treasury not
otherwise appropriated, $300,000,000, to remain available until
September 30, 2029, for the reimbursement of extraordinary law
enforcement personnel costs for protection activities directly
and demonstrably associated with any residence of the President
that is designated pursuant to section 3 of the Presidential
Protection Assistance Act of 1976 (Public Law 94-524) to be
secured by the United States Secret Service.
(b) Availability.--Funds under subsection (a) shall be
available only for costs that a State or local agency--
(1) incurred or incurs on or after July 1, 2024;
(2) can demonstrate to the Administrator of the
Federal Emergency Management Agency as being--
(A) in excess of the costs of normal and
typical law enforcement operations;
(B) directly attributable to the provision of
protection described in such subsection; and
(C) associated with a non-governmental
property designated pursuant to section 3 of
the Presidential Protection Assistance Act of
1976 (Public Law 94-524) to be secured by the
United States Secret Service; and
(3) certifies to the Administrator as being for
protection activities requested by the Director of the
United States Secret Service.
SEC. 60005. STATE HOMELAND SECURITY GRANT PROGRAM.
In addition to amounts otherwise available, there is
appropriated to the Administrator of the Federal Emergency
Management Agency, for fiscal year 2025, out of any money in
the Treasury, not otherwise appropriated, to be administered
under the State Homeland Security Grant Program authorized
under section 2004 of the Homeland Security Act of 2002 (6
U.S.C. 605), to enhance State, local, and Tribal security
through grants, contracts, cooperative agreements, and other
activities, of which--
(1) $500,000,000, to remain available until September
30, 2029, for State and local capabilities to detect,
identify, track, or monitor threats from unmanned
aircraft systems (as such term is defined in section
44801 of title 49, United States Code);
(2) $625,000,000, to remain available until September
30, 2029, for security, planning, and other costs
related to the 2026 FIFA World Cup;
(3) $1,000,000,000, to remain available until
September 30, 2029, for security, planning, and other
costs related to the 2028 Olympics; and
(4) $450,000,000, to remain available until September
30, 2029, for the Operation Stonegarden Grant Program.
CONTENTS
Page
Committee Consideration.......................................... 741
Committee Votes.................................................. 742
Committee Oversight Findings..................................... 782
C.B.O. Estimate, New Budget Authority, Entitlement Authority, and
Tax Expenditures............................................... 782
Federal Mandates Statement....................................... 788
Duplicative Federal Programs..................................... 788
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits....................................................... 788
Advisory Committee Statement..................................... 788
Applicability to Legislative Branch.............................. 788
Section-by-Section Analysis of the Legislation................... 788
Minority Views................................................... 794
Committee Consideration
The Committee met on April 29, 2025, a quorum being
present, to consider Committee Print 119-A: Providing for
reconciliation pursuant to H. Con. Res. 14, the Concurrent
Resolution on the Budget for Fiscal Year 2025, and ordered the
recommendations in the measure to be transmitted, as amended,
and all appropriate accompanying material, including
additional, supplemental, or dissenting views, to the House
Committee on the Budget, in order to comply with the
reconciliation directive included in section 2001 of the
Concurrent Resolution on the Budget for Fiscal Year 2025, H.
Con. Res. 14, and consistent with section 210 of the
Congressional Budget and Impoundment Control Act of 1974, by a
recorded vote of 18 yeas and 14 nays (Committee Roll Call No.
39).
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Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII, the
Committee advises that the findings and recommendations of the
Committee, based on oversight activities under clause 2(b)(1)
of rule X, are incorporated in the descriptive portions of this
report.
Congressional Budget Office Estimate, New Budget Authority, Entitlement
Authority, and Tax Expenditures
With respect to the requirements of clause 3(c)(2) of rule
XIII and section 308(a) of the Congressional Budget Act of
1974, and with respect to the requirements of clause 3(c)(3) of
rule XIII and section 402 of the Congressional Budget Act of
1974, the Committee adopts as its own the estimate of any new
budget authority, spending authority, credit authority, or an
increase or decrease in revenues or tax expenditures contained
in the cost estimate prepared by the Director of the
Congressional Budget Office.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The legislation would directly appropriate funds for
Customs and Border Protection (CBP) to
construct, upgrade, and replace barriers on U.S.
borders; procure new vehicles and technology; and
perform other activities related to border security
CBP to hire additional border patrol agents
and other personnel, provide signing and retention
bonuses, and expand marketing and recruitment to
increase the CBP workforce
The Federal Emergency Management Agency
(FEMA) to protect the private residences of the
President
FEMA to reimburse state and local
governments for costs incurred in hosting the 2028
Olympic Games and 2026 FIFA World Cup, to procure
technology for state and local governments to counter
unmanned aircraft systems, and to make grants under the
Operation Stonegarden Program
Estimated budgetary effects would mainly stem from
Expending funds directly appropriated for
CBP's and FEMA's activities
Areas of significant uncertainty include
Projecting CBP's pace of spending and the
amount spent by 2034 on construction of physical
barrier systems
Projecting how quickly CBP could hire
additional border patrol agents and officers
Legislation summary: H. Con. Res. 14, the Concurrent
Resolution on the Budget for Fiscal Year 2025, instructed the
House Committee on Homeland Security to recommend legislative
changes that would increase deficits up to a specified amount
over the 2025-2034 period. As part of the reconciliation
process, the House Committee on Homeland Security approved
legislation on April 29, 2025, that would increase deficits.
Estimated Federal cost: The reconciliation recommendations
of the House Committee on Homeland Security would increase
deficits by $67.1 billion over the 2025-2034 period. The
estimated budgetary effects of the legislation are shown in
Table 1. The costs of the legislation fall within budget
functions 450 (community and regional development) and 750
(administration of justice).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF RECONCILIATION RECOMMENDATIONS
[Title VI, House Committee on Homeland Security, as Ordered Reported on April 29, 2025]
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
------------------------------------------------------------------------------------------------------
2025- 2025-
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2029 2034
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES IN DIRECT SPENDING
Budget Authority................................. 69,007 0 0 0 0 0 0 0 0 0 69,007 69,007
Estimated Outlays................................ * 1,978 4,963 8,683 12,250 13,458 11,145 7,984 4,556 2,130 27,874 67,147
NET INCREASE IN THE DEFICIT FROM CHANGES in DIRECT SPENDING
Effect on the Deficit............................ * 1,978 4,963 8,683 12,250 13,458 11,145 7,984 4,556 2,130 27,874 67,147
--------------------------------------------------------------------------------------------------------------------------------------------------------
Budget authority includes only specified amounts.
* = between zero and $500,000.
Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted in summer 2025. CBO's estimates are
relative to its January 2025 baseline and cover the period from
2025 through 2034. Outlays of appropriated amounts were
estimated using historical obligation and spending rates for
similar programs.
Direct spending: Enacting this legislation would increase
direct spending by $67.1 billion over the 2025-2034 period (see
Table 2). All of that amount would result from specified direct
appropriations for activities performed by Customs and Border
Patrol (CBP) and the Federal Emergency Management Agency
(FEMA).
Border Barrier System Construction, Invasive Species, and
Border Security Facilities Improvements. Section 60001 would
appropriate $51.6 billion for border barrier system
construction and related activities, increasing outlays by
$49.7 billion over the 2025-2034 period, CBO estimates.
Border Barrier System and Technology. The legislation would
appropriate $46.5 billion for CBP to construct, upgrade, and
replace components of the barrier system along the
southwestern, northern, and maritime borders of the United
States.
Based on an analysis of information from CBP and historical
rates of spending on border construction projects, CBO
estimates that enacting the provision would increase outlays by
$44.6 billion over the 2025-2034 period.
CBO expects that all of the funds provided by the
legislation will be obligated before the period of availability
expires at the end of 2029. However, we do not expect that all
funds will be spent during the 2025-2034 period based on the
historical spending patterns for other federal construction
projects and because the pace of spending for construction
projects typically spans more than five years from the time
funds are obligated. (Under the rules that govern the federal
budget, CBP would need to return any unspent funds to the
Treasury on September 30, 2034.)
CBP Facilities and Checkpoints and Invasive Species
Eradication. The legislation also would appropriate $5.0
billion for CBP to lease, acquire, and construct new facilities
and checkpoints, and to upgrade or replace existing facilities
and $50 million to eradicate invasive plant species along the
border, increasing outlays by those amounts over the 2025-2034
period.
U.S. Customs and Border Protection Personnel and Fleet
Vehicles. Section 60002 would appropriate $8.3 billion for CBP
to recruit, hire, and train, personnel and to procure new
vehicles and technology, increasing outlays by $8.3 billion
over the 2025-2034 period.
CBP Personnel and Training. The legislation would
appropriate the following amounts for CBP personnel and
training:
$4.1 billion for CBP to hire, train, and, in
some cases, rehire federal employees as border patrol
agents, field operations officers, air and marine
agents, and support staff; and
$2.1 billion for signing and retention
bonuses.
CBP currently employs about 19,000 border patrol agents,
26,000 officers, and 1,400 air and marine operators. The agency
indicates that the funding provided by the legislation would be
used to hire approximately 8,500 employees, including 5,000
officers and 3,000 border patrol agents. Using information from
the agency, CBO expects that officers and agents would be hired
gradually over the next 10 years, with most additions occurring
in the next five years, and that enacting this provision would
increase outlays by $6.2 billion over the 2025-2034 period.
Training, Recruitment, and Screening and Patrol Vehicle
Procurement. Additionally, the legislation would appropriate
the following amounts, increasing outlays equal to the
appropriated amounts over the 2025-2034 period:
$750 million for CBP to train staff at
Federal Law Enforcement Training Centers and to improve
those facilities;
$600 million for marketing, recruitment,
applicant screening, and programs to facilitate staff
reassignments and relocation; and
$813 million for CBP to lease or purchase
patrol vehicles.
U.S. Customs and Border Protection Technology, National
Vetting Center, and Other Efforts to Enhance Border Security.
Section 60003 would appropriate $6.3 billion for CBP to
procure, upgrade, and integrate new technology into the border
control system, increasing outlays by $6.3 billion over the
2025-2034 period.
The funding would include:
$4.5 billion for surveillance towers, linear
ground detection systems, nonintrusive inspection
systems, and scanners for the agency's biometric entry
and exit program;
$1.2 billion for CBP to acquire or upgrade
various air and marine systems, including aircraft,
watercraft, and unmanned aircraft systems, which CBO
expects would be procured in bulk purchases; and
$517 million for other CBP activities,
including funds to combat drug trafficking, to support
screening of applicants by the National Vetting Center,
and for other activities including commemorations of
events related to border security.
State and Local Law Enforcement Presidential Residence
Protection. Section 60004 would appropriate $300 million for
the Federal Emergency Management Agency (FEMA) to reimburse
state and local law enforcement agencies for costs incurred to
protect the private residences of the President, increasing
outlays by $300 million over the 2025-2034 period. Most of
those amounts would cover overtime pay for officers and other
personnel.
State Homeland Security Grant Program. Section 60005 would
appropriate $2.6 billion for FEMA to support state and local
law enforcement agencies addressing security threats,
increasing outlays by $2.6 billion over the 2025-2034 period.
The funding would include:
$1 billion to reimburse state and local
governments for security, planning, and other costs
related to hosting the 2028 Olympic Games;
$625 million for similar activities for the
2026 FIFA World Cup;
$500 million for FEMA to enhance state and
local governments' detection and monitoring of threats
from unmanned aircraft systems; and
$450 million for the Operation Stonegarden
Grant Program, which covers costs for personnel and
equipment incurred by state and local governments as
part of joint operations to secure U.S. borders.
Uncertainty: Significant uncertainty surrounds CBO's
projections of the pace at which CBP would obligate funds and
the total amount the agency could spend by 2034 to construct
walls, fences, facilities, and checkpoints for the border
barrier system. These amounts significantly exceed amounts
previously provided for similar activities. For example, over
the 2018-2021 period, lawmakers appropriated about $5.5 billion
for physical barriers on the southwestern border of the United
States. By the end of 2024, CBP had spent roughly $2.6
billion--less than half of the amount provided.
How quickly funds provided in this legislation would be
spent will depend on factors that include the availability of
contractors; fluctuations in the cost and availability of
materials; and CBP's ability to acquire private land or obtain
access to state, local, or tribal property.
Based on information from the agency, CBO expects that some
stages of the process could progress more quickly than they
might have in the past--many aspects of planning, land
acquisition, and permitting for certain segments of the border
have been completed or streamlined. However, the pace of
spending on construction funded by the legislation is uncertain
and the total amounts spent over the 2025-2034 period could be
larger or smaller than CBO estimates here.
Considerable uncertainty also surrounds projections of the
pace at which CBP would hire new personnel, particularly border
patrol agents and officers. Although the legislation would
provide funding for signing and retention bonuses and increase
spending on marketing, recruitment, and screening of new
employees, significant uncertainty exists about how responsive
the labor supply might be to fill those positions. In recent
years, because of background checks, training requirements, and
other pre-employment processes, the time to recruit and hire
new officers has ranged from 300 to 600 days. As a result, the
pace of spending on personnel over the 2025-2034 period could
be faster or slower than CBO estimates here.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in Table 1.
Increase in long-term net direct spending and deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2035.
Mandates: The legislation contains no intergovernmental or
private-sector mandates as defined in the Unfunded Mandates
Reform Act.
Estimate prepared by: Federal Costs: Jeremy Crimm (for
Customs and Border Protection); Jon Sperl (for Customs and
Border Protection, and Federal Emergency Management Agency).
Mandates: Rachel Austin.
Estimate reviewed by: Justin Humphrey, Chief, Finance,
Housing, and Education Cost Estimates Unit; Kathleen
FitzGerald, Chief, Public and Private Mandates Unit; Christina
Hawley Anthony, Deputy Director of Budget Analysis; H. Samuel
Papenfuss, Deputy Director of Budget Analysis; Chad Chirico,
Director of Budget Analysis.
Estimate approved by: Phillip L. Swagel, Director,
Congressional Budget Office.
Table 2--Estimated Changes in Direct Spending Under Reconciliation Recommendations
[Title VI, House Committee on Homeland Security, as Ordered Reported on April 29, 2025]
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-----------------------------------------------------------------------------------------------------------------
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2025-2029 2025-2034
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES IN DIRECT SPENDING
Sec. 60001, Border Barrier System
Construction, Invasive Species, and
Border Security Facilities
Improvements:
Budget Authority.................. 51,550 0 0 0 0 0 0 0 0 0 51,550 51,550
Estimated Outlays................. * 934 2,850 5,505 8,208 9,776 9,333 7,031 4,124 1,929 17,497 49,690
Sec. 60002, U.S. Customs and Border
Protection Personnel and Fleet
Vehicles:
Budget Authority.................. 8,316 0 0 0 0 0 0 0 0 0 8,316 8,316
Estimated Outlays................. * 427 842 1,399 1,949 2,093 763 408 257 178 4,617 8,316
Sec. 60003, U.S. Customs and Border
Protection Technology, National
Vetting Center, and Other Efforts to
Enhance Border Security:
Budget Authority.................. 6,266 0 0 0 0 0 0 0 0 0 6,266 6,266
Estimated Outlays................. * 212 577 1,023 1,403 1,330 991 534 173 23 3,215 6,266
Sec. 60004, State and Local Law
Enforcement Presidential Residence
Protection:
Budget Authority.................. 300 0 0 0 0 0 0 0 0 0 300 300
Estimated Outlays................. * 11 74 106 84 21 4 0 0 0 275 300
Sec. 60005, State Homeland Security
Grant Program:
Budget Authority.................. 2,575 0 0 0 0 0 0 0 0 0 2,575 2,575
Estimated Outlays................. * 394 620 650 606 238 54 11 2 0 2,270 2,575
Total Changes
Budget Authority.................. 69,007 0 0 0 0 0 0 0 0 0 69,007 69,007
Estimated Outlays................. * 1,978 4,963 8,683 12,250 13,458 11,145 7,984 4,556 2,130 27,874 67,147
NET INCREASE IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING
Effect on the Deficit................. * 1,978 4,963 8,683 12,250 13,458 11,145 7,984 4,556 2,130 27,874 67,147
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = between zero and $500,000; Budget authority includes specified amounts only.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act of 1995.
Duplicative Federal Programs
Pursuant to clause 3(c) of rule XIII, the Committee finds
that Committee Print 119-A: Providing for reconciliation
pursuant to H. Con. Res. 14, the Concurrent Resolution on the
Budget for Fiscal Year 2025 does not contain any provision that
establishes or reauthorizes a program known to be duplicative
of another Federal program.
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
In compliance with rule XXI, this bill, as reported,
contains no congressional earmarks, limited tax benefits, or
limited tariff benefits as defined in clause 9(d), 9(e), or
9(f) of rule XXI.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that Committee Print 119-A: Providing
for reconciliation pursuant to H. Con. Res. 14, the Concurrent
Resolution on the Budget for Fiscal Year 2025 does not relate
to the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 60001. Border Barrier System Construction, Invasive Species,
and Border Security Facilities Improvements
This section appropriates $46,500,000,000 to the
Commissioner of U.S. Customs and Border Protection (CBP) for
construction, installation, or improvements of primary,
waterborne, and secondary barriers, as well as technology
upgrades such as, but not limited to, lighting, surveillance
systems, smart access roads, and fiber optic cables to support
enhanced communication and situational awareness across the
border.
For nearly three decades, the use of physical barriers has
been a core component of CBP's comprehensive border security
strategy. Since the initial construction of border barriers in
the San Diego Sector in 1991, U.S. Border Patrol agents have
consistently advocated for barrier infrastructure, due to its
proven effectiveness in enhancing domain awareness and agent
safety.
The Committee believes that physical barriers serve as a
critical force-multiplier by delaying illegal entries and
giving frontline agents valuable time to detect, assess, and
respond to migration events.
This section also appropriates $50,000,000 to CBP for the
eradication and removal of carrizo cane and salt cedar plants.
These invasive, dense, and fast-growing plants pose a
significant tactical challenge for Border Patrol agents along
the Rio Grande River as they can create major blind spots,
severely limiting agents' ability to detect and respond to
illegal crossings. The Committee believes that by eradication
of these invasive species along key sections of the Rio Grande
River will help improve and enhance visibility and ensure agent
safety by restoring line-of-sight capabilities and increasing
early detection of illicit activity.
Finally, this section will appropriate $5,000,000,000 for
CBP to lease, acquire, upgrade, and/or expand U.S. Border
Patrol, Air and Marine Operations, and Office of Field
Operations facilities. CBP personnel operate on the front lines
every day, yet many are forced to work out of facilities that
are overcrowded, structurally inadequate, and technologically
outdated. The Committee believes that investing in CBP's
physical infrastructure is not just about modernization, it's
about mission effectiveness and safety.
Section 60002. U.S. Customs and Border Protection Personnel and Fleet
Vehicles
This section appropriates $4,100,000,000 to CBP for the
hiring and training additional Border Patrol agents, Office of
Field Operations officers, Air and Marine agents, rehired
annuitants, and CBP support staff. Under the previous
administration, agents and officers faced extreme operational
pressure, mental health concerns, and an overwhelming sense of
mission fatigue. The Committee believes that increasing the
number of frontline personnel will help to alleviate the burden
on current agents and officers and help restore morale.
This section also appropriates $2,052,630,000 to CBP for
annual retention bonuses or signing bonuses to eligible Border
Patrol agents, Office of Field Operations officers, and Air and
Marine agents. CBP is currently facing a staffing crisis that
threatens the agency's ability to meet its core national
security mission. As the demands on frontline personnel
continue to grow, CBP is struggling to recruit and retain the
skilled workforce necessary to meet these demands. In some of
the most critical geographic areas, persistent staffing
shortages have left agents overextended and vulnerable to
burnout. The Committee believes that the CBP mission depends on
a resilient and dedicated workforce. The Committee strongly
supports investments in annual retention and signing bonuses to
secure the personnel needed to protect our borders, uphold the
rule of law, and safeguard our national security for years to
come.
This section also appropriates $813,000,000 for CBP to
lease or acquire additional patrol units. CBP operates one of
the largest law enforcement vehicle fleets in the federal
government, with thousands of vehicles deployed across some of
the most challenging and remote terrain in the country. These
vehicles are essential tools serving as mobile command centers,
transportation platforms, and first-response units that enable
agents to carry out their mission of securing the border.
Unfortunately, the agency's current fleet is rapidly aging.
Many vehicles in operation have exceeded their recommended
service life, leading to increased maintenance costs, higher
rates of mechanical failure, and reduced reliability in the
field. This not only jeopardizes agent and officer safety but
also hinders mission readiness and response times during
critical operations.
This section also appropriates, to the Director of the
Federal Law Enforcement Training Center, $285,000,000 to
support the training of newly hired federal law enforcement
personnel employed by the Department of Homeland Security, and
$465,000,000 for the procurement, construction, and
improvements to Federal Law Enforcement Training Center (FLETC)
facilities.
FLETC provides training for federal law enforcement
personnel across four campuses located in New Mexico, Georgia,
South Carolina, and Maryland. In addition to serving over 125
federal partner agencies, FLETC also supports state, local,
tribal, and international law enforcement organizations with
specialized training resources. FLETC plays a vital role in
both the initial training and ongoing professional development
of DHS law enforcement personnel. The Committee believes
funding in this section is essential as CBP and U.S.
Immigration and Customs Enforcement seek to recruit, train, and
deploy additional personnel to meet mission demands.
Finally, this section also appropriates $600,000,000 to CBP
for marketing, recruiting, applicant sourcing and vetting, and
operational mobility programs for border security personnel.
The increase in law enforcement personnel is only possible with
investments to increase hiring capabilities. This can include
every step from recruitment to medical and fitness assessments,
entrance exams, and training professionals. In addition to
these efforts to expand CBP's hiring capacity, the funding
supports significant recruitment incentives to increase the
pool of candidates in the application and assessment process.
Section 60003. U.S. Customs and Border Protection Technology, National
Vetting Center, and Other Efforts to Enhance Border Security
This section appropriates $1,076,317,000 to CBP to procure
and integrate new Non-Intrusive Inspection (NII) equipment and
associated civil works, artificial intelligence, integration,
and machine learning, as well as other mission support, to
combat the entry of illicit narcotics along the southwest,
northern, and maritime borders. At our ports of entry, CBP
employs NII technology to detect and interdict illicit drugs,
including fentanyl, as well as concealed currency, contraband,
and individuals being smuggled into the country. While CBP has
made huge strides in interdiction efforts, its current
screening capacity at ports of entry remains alarmingly
limited. The Committee believes that these gaps leave our
southwest, northern, and maritime borders vulnerable to
exploitation by transnational criminal organizations
trafficking fentanyl and other deadly substances into our
communities.
This section also appropriates $2,766,000,000 to CBP to
upgrade and procure border surveillance technologies along the
southwest, northern, and maritime borders. As threats to our
national security grow more complex, CBP must have the tools it
needs to detect, monitor, and respond to illicit activity
across all sectors of the border. The Committee believes
investing in advanced surveillance technology along the
southwest, northern, and maritime borders is essential to
maintaining domain awareness and ensuring the safety of our
frontline personnel. Technology in this section includes, but
is not limited to, ground detection sensors, integrated
surveillance towers, tunnel detection capability, unmanned
aircraft systems (UAS), and enhanced communications equipment.
This section also appropriates $673,000,000 to CBP for
necessary expenses, including the deployment of technology,
relating to the biometric entry and exit system under section
7208 of the Intelligence Reform and Terrorism Prevention Act of
2004 (8 U.S.C. 1365b). Investing in the expansion of CBP's
entry/exit system is a critical step toward strengthening
America's national security, enforcing immigration laws, and
modernizing the travel experience at air, land, and seaports of
entry. As the volume of international travel continues to rise
and global threats evolve, traditional identity verification
methods are no longer sufficient to meet today's operational
demands. Unfortunately, full implementation of the exit system
remains incomplete. Biometric entry and exit expansion will not
only enhance CBP's operational effectiveness and efficiency,
but it will also provide law enforcement and intelligence
partners with timely and accurate information to help identify
fraud and persons who overstay their visas.
This section also appropriates $1,234,000,000 to CBP for
Air and Marine Operations (AMO) upgrades and procurement of new
platforms for rapid air and marine response capabilities.
Through the deployment of advanced aircraft and marine vessels
outfitted with cutting-edge technology, this will enable AMO to
expand their reach allowing for continuous detection,
monitoring, and tracking of potential threats approaching or
operating within U.S. borders.
This section appropriates $16,000,000 to CBP for necessary
expenses related to U.S. Customs and Border Protection's
National Vetting Center (NVC) to support screening, vetting
activities, and expansion of the criminal history database of
foreign nationals. As transnational criminal networks grow more
sophisticated, the Committee believes that CBP must be equipped
with the tools and data necessary to identify threats swiftly
and accurately. Expanding the NVC is essential to enhancing
national security and protecting communities by assisting
frontline agents and officers to make informed, real-time
decisions during border encounters.
This section appropriates $500,000,000 to the Secretary of
Homeland Security (Secretary) for targeted communication
campaigns designed to combat drug trafficking, fentanyl and its
precursor chemicals, and counter adversarial messaging
operations. Cartels increasingly exploit social media platforms
such as TikTok and Snapchat to recruit associates and
facilitate trafficking activities. Given the escalating threats
posed by transnational criminal organizations, targeted
communication plans are crucial in deterring these illicit
activities and mitigating the cartel's media influence. These
information campaigns can play a vital role in protecting
American lives, dismantling criminal networks, and safeguarding
the nation by effectively warning potential drug traffickers of
the severe repercussions they will face.
Finally, this section appropriates $1,000,000 to the
Secretary to support commemorative events honoring meritorious
contributions and achievements related to border security,
including events recognizing victims of crimes. Examples of
such events include Line-of-Duty death memorials, Department or
agency anniversaries, and commendation ceremonies. Funding in
this section can be used for venue and setup, program
materials, commemoratives (e.g., plaques, flags, awards); and
personnel and services (e.g., honor guard, officiants,
security).
Section 60004. State and Local Law Enforcement Presidential Residence
Protection
This section appropriates $300,000,000 to the Administrator
of the Federal Emergency Management Agency (FEMA), for the
reimbursement of law enforcement personnel costs for protection
activities directly and demonstrably associated with any
residence of the President that is designated pursuant to
section 3 of the Presidential Protection Assistance Act of 1976
(Public Law 94-524) to be secured by the United States Secret
Service.
Continued support of the Presidential Residence Protection
Assistance grant is essential for the continued safety of the
President. This grant provides reimbursement to state and local
law enforcement agencies for operational overtime costs
incurred while protecting any non-governmental residence of the
President of the United States as designated or identified to
be secured by the U.S. Secret Service.
With President Trump maintaining regular travel, proper
security measures need to be maintained, particularly following
the two highly publicized assassination attempts in 2024.
Assistance from state and local law enforcement agencies is
oftentimes necessary to ensure protection of the President's
residences given limited U.S Secret Service resources. This
funding would build upon past congressional appropriations and
ensure that the Department of Homeland Security has the
necessary funding to reimburse and utilize state and local law
enforcement.
Section 60005. State Homeland Security Grant Program
This section appropriates funds to FEMA to be administered
under the State Homeland Security Grant Program authorized
under section 2004 of the Homeland Security Act of 2002 (6
U.S.C. 605), to enhance State, local, and Tribal security
through grants, contracts, cooperative agreements, and other
activities. Appropriations in this section include:
$500,000,000 for State and local capabilities to detect,
identify, track, or monitor threats from unmanned aircraft
systems (UAS) (as such term is defined in section 44801 of
title 49, United States Code); $625,000,000 for security,
planning, and other costs related to the 2026 FIFA World Cup;
$1,000,000,000 for security, planning, and other costs related
to the 2028 Olympics and Paralympics; and $450,000,000 for the
Operation Stonegarden Grant Program.
The Committee believes it is essential to continue to
pursue efforts to enhance counter-UAS capabilities and
authorities for federal, State, and local law enforcement. As
the capabilities and availability of commercially available
drone technology have made significant advances in recent
years, the emerging homeland security threat from such
technology in the wrong hands has likewise increased.
Terrorists, criminal organizations, and foreign actors can use
drones to exploit vulnerabilities across a wide range of
environments and targets for espionage or terrorist acts.
Suspicious drone incursions have occurred at military
installations, sporting events, airports, critical energy
facilities, and across the Southwest border at an alarming
rate. This is a critical concern in communities nationwide,
particularly for high-profile public events and critical
infrastructure. $500,000,000 in appropriations for this grant
program will support law enforcement efforts across the United
States in developing their ability to detect, identify, track,
or monitor UAS threats.
In 2026, the FIFA Would Cup will be held in eleven cities
across the United States. FIFA anticipates that at least
5,000,000 fans will travel to the United States for the World
Cup. Attendees will include multiple heads of state and other
foreign dignitaries. The Committee recognizes the national
security implications of hosting an international sporting
event of this size.
On March 7, 2025, President Trump signed an Executive Order
Establishing the White House Task Force on the FIFA World Cup
2026, to facilitate coordination with executive departments and
agencies ``to assist in the planning, organization, and
execution of the events surrounding the 2025 FIFA Club World
Cup and 2026 FIFA World Cup.'' To support President Trump's
priority of the safety and security of events held on American
soil, the Committee believes an appropriation of $625,000,000
for grants related to this event will enhance planning and
security related to the 2026 FIFA World Cup. These funds will
be made available through FEMA's State Homeland Security Grant
Program, which assists State, local, and Tribal efforts to
build, sustain, and deliver the capabilities necessary to
prevent, prepare for, protect against, and respond to acts of
terrorism.
Two years following the FIFA World Cup, the 2028 Summer
Olympics and 2028 Summer Paralympics will be held in the
greater Los Angeles area. The Committee believes an
appropriation of $1,000,000,000 for grants to be made available
for security, planning, and other costs related to the 2028
Olympics and Paralympic Games, made available through FEMA's
State Homeland Security Grant Program, will have a vital impact
on the security of our nation in preparation for and throughout
the Olympic Games and Paralympic Games.
Already in 2024, the Department of Homeland Security
designated the Olympic and Paralympic Games a National Special
Security Event (NSSE), the furthest in advance that a NSSE has
ever been granted. This designation is based in part on the
event's significance, size, and anticipated attendance,
allowing for significant resources from the federal government,
as well as from state and local partners, to be utilized in a
comprehensive security plan. The U.S. Secret Service is
designated as the lead federal agency responsible for
coordinating, planning, exercising, and implementing security
for NSSEs through the Presidential Threat Protection Act of
2000.
Operation Stonegarden is part of FEMA's Homeland Security
Grant Program, which provides funding to state, local, tribal,
and territorial (SLTT) law enforcement agencies that are
located along the borders of the United States to improve
overall border security. Over the last four years, the United
States faced a historic border crisis with communities and
local law enforcement along the Southwest border bearing the
brunt of the hardship due to the chaos brought on by failed
border policies.
Operation Stonegarden is an essential part in the overall
advancement of security along our borders. An addition of
$450,000,000 in funding for this grant program will allow the
Department of Homeland Security to further enhance its
relationship with law enforcement, implementing a layered
approach to secure our land and maritime borders from
traffickers and smugglers. This grant program provides
cooperation and coordination among U.S. Customs and Border
Protection's U.S. Border Patrol and federal, state, local,
tribal, and territorial law enforcement agencies by providing
funding to support joint efforts to secure the United States'
borders, especially in states bordering Mexico and Canada, as
well as in states and territories with international water
borders.
Dissenting Views of Committee on Homeland Security Democrats
During the markup of the House Republican reconciliation
package, Homeland Security Committee Democrats offered 34
amendments that addressed a range of concerns ignored in the
disastrous underlying legislation, which was the Committee's
piece of the larger, extreme Trump agenda, containing $7
trillion in giveaways to billionaires and big corporations and
$880 billion in cuts to Medicaid.
The amendments--which ranged from prohibiting the Trump
administration from illegally deporting U.S. citizens to
upholding the supremacy of the Supreme Court to prohibiting
cuts to the Federal Emergency Management Agency (FEMA), among
many others-addressed the Trump administration's abuse of its
mass deportation agenda that has sent American citizen children
with cancer to South America; its dismantling of the Department
of Homeland Security (DHS); and its blatant mismanagement of
the Department since taking office in January 2025.
Committee Republicans could neither promote nor defend
their legislation or their party's administration. They chose
silence instead.
On Tuesday, April 29, 2025, Committee Democrats fought for
due process for migrants and American citizens alike. We fought
for a strong DHS that did not ignore its responsibilities to
keep Americans safe. We fought against handouts to billionaires
and budget cuts for victims of disasters. We fought for our
communities and the rule of law.
Republicans, meanwhile, leaned back in their chairs for
more than 5 hours and waited in deafening silence to rubber
stamp the worst excesses of a Trump administration that has
proven it cannot be trusted. They waited to approve tens of
billions of funds for a border wall President Trump once
claimed would be paid for by Mexico.
Having rejected all the Democratic amendments during the
Committee's consideration of this fast-tracked legislation, we
implore our colleagues to do a little soul searching before
voting to advance this legislation any further. We continue to
believe that our country is better than what is represented in
a bill that provides tax cuts for billionaires while denying
the most vulnerable basic healthcare.
DEPORTATIONS
Committee Democrats put forward dozens of amendments to
protect the American people as the Trump administration
recklessly and cruelly implements its mass deportation agenda.
Under President Trump and Secretary Kristi Noem, DHS is
detaining and deporting American children with terminal cancer,
punishing students for engaging in protected First Amendment
activity, and denying due process to individuals, including
those in the country legally.
Ranking Member Thompson offered an amendment to prevent
funds in the legislation from being used to remove American
citizens from the United States, except for compliance with
treaty obligations and Federal extradition laws and policies.
Committee Republicans unanimously voted against this amendment.
Committee Republicans similarly rejected Democratic amendments
that would have prohibited DHS from removing U.S. children--
including those with cancer--veterans who served in the U.S.
military and were honorably discharged, the spouses of active
duty servicemembers, and pregnant women.
Committee Republicans also uniformly opposed Rep.
Magaziner's amendment to prohibit deporting Americans to
foreign prisons, including El Salvador's notorious Terrorism
Confinement Center (CECOT). Committee Republicans then rejected
Rep. Ramirez's amendment to prohibit deporting immigrants to
third-country prisons, along with Rep. Garcia's amendment to
prohibit removing immigrants under the Alien Enemies Act
without due process.
Committee Democrats are appalled by the Trump
administration's actions to send individuals to dangerous
foreign prisons where they have no chance at due process or
proving their innocence. Many of these individuals have never
been convicted of a crime or had their day in court, in
contravention of the U.S. Constitution.\1\ President Trump has
threatened to expand these illegal disappearances to U.S.
citizens. In a meeting with President Bukele of El Salvador, he
stated ``The homegrowns are next, the homegrowns.'' Trump then
instructed El Salvador's president to ``build about five more
places,'' to imprison the ``homegrowns.''\2\
---------------------------------------------------------------------------
\1\U.S. Const. amend. V.
\2\Brian Mann, `Homegrowns are next': Trump hopes to deport and
jail U.S. citizens abroad, NPR (Apr. 16. 2025). https://www.npr.org/
2025/04/16/nx-s1=5366178/trump-deport-jail-u-s-
citizens-homegrowns-el-salvador.
---------------------------------------------------------------------------
Committee Democrats are committed to protecting the
American people and the rule of law. By rejecting Democratic
amendments, Committee Republicans made clear that no person is
safe in America under the Trump administration's mass
deportation agenda. Even American children undergoing cancer
treatment are fair targets for Republicans and the Trump
administration.
Rep. Magaziner also offered an amendment to ensure that no
funds would be used to prevent an individual from seeking or
meeting with legal counsel when being questioned or detained by
immigration enforcement authorities. Republicans voted this
down. Rep. Ramirez also offered an amendment prohibiting the
Trump administration from reinstating family separation at the
border. Republicans opposed this amendment.
Rep. Carter offered an amendment to prohibit DHS from
detaining and removing any non-citizen for exercising their
First Amendment right to free speech. If individuals like
Rumeysa Ozturk and Mahmoud Khalil are jailed and deported for
exercising their First Amendment rights, then any person in
this country is under threat for doing the same thing.
Republicans also voted this amendment down.
Rep. McIver and Rep. Johnson offered amendments to protect
international students studying at American universities. Under
the Trump administration, thousands of international students
had their legal status terminated or visas revoked without
transparency or justification, causing fear and chaos across
the country. In some cases, students and their universities
were not even notified of their change in status. These
Democratic amendments would have ensured transparency and due
process for students studying in the United States, yet
Republicans unanimously rejected them.
Rep. Ramirez offered an amendment preventing Customs and
Border Protection (CBP) from facilitating the transfer of
migrants to Guantanamo Bay, a facility that President Trump
promised would hold ``the worst of the worst.'' Instead, the
Trump administration wasted $40 million to temporarily jail
there approximately 400 detainees, most of whom are nonviolent,
low-risk individuals with no serious criminal records.\3\
Committee Republicans, who claim to be against waste and abuse,
voted against this amendment.
---------------------------------------------------------------------------
\3\Carol Rosenberg, U.S. Has Spent $40 Million to Jail about 400
migrants at Guantanamo, N.Y. Times (Mar. 31, 2025). https://
www.nytimes.com/2025/03/31/us/politics/migrants-
guantanamo-costs.html.
---------------------------------------------------------------------------
Rep. Kennedy also offered an amendment aimed at protecting
American consumers and the economic vibrancy of our
communities, which are heavily reliant on trade with Canada.
His amendment would have prevented funds from being used to
enforce tariffs on Canada, which raise the cost of everyday
goods for the American people.
When the Trump administration spends its resources
harassing, rounding up, and deporting American citizens, legal
permanent residents, and international students in the name of
border security, it is ignoring real threats from terrorism,
domestic violent extremism, and gun violence. It is also
putting at risk Americans who rely on government programs, like
Medicaid, Social Security and FEMA's disaster relief programs,
which Republicans would gut to fund the administration's
campaign of terror and intimidation.
Furthermore, taxpayers should not foot the bill for failed
campaign promises. This bill includes an additional $46.5
billion to construct the border wall that President Trump
promised Mexico would pay for.\4\ Republicans propose spending
ten times the amount on Trump's failed border wall as they do
on CBP personnel. Committee Democrats support the use of more
efficient border security technologies to catch and detect
smugglers and interdict drugs. Yet when Rep. Correa offered an
amendment enabling funding in the bill to be used for new,
innovative technologies, Republicans opposed that effort.
---------------------------------------------------------------------------
\4\Perla Trevizo and Jeremy Schwartz. Records Show Trump's Border
Wall ls Costing Taxpayers Billions More Than Initial Contracts,
ProPublica (Oct. 27, 2020), https://www.propublica.org/article/records-
show-trumps-border-wall-is-costing-taxpayers-billions-more-than-
initial-contracts.
---------------------------------------------------------------------------
Health Care in CBP Custody
Democrats support funding for CBP to provide adequate
health care to detainees in its custody, but Republicans
rejected Rep. Thanedar's amendment to provide $1.8 billion over
5 years to do so. In 2018, two young children died in CBP
custody within months of each other,\5\ and a third child died
in CBP custody in 2023.\6\ After the 2023 death, CBP's Office
of Professional Responsibility found numerous breakdowns in the
child's health care.\7\ Rep. Thanedar's amendment would have
provided CBP the funding it needs to ensure adequate health
care for detainees, but Republicans rejected the amendment.
---------------------------------------------------------------------------
\5\Joshua Barajas, A Second Migrant Child Died in U.S. Custody This
Month. Here's What We Know., PBS News (Dec. 28, 2018), https://
www.pbs.org/newshour/nation/a-second-migrant-child-died-in-u-s-custody-
this-month-heres-what-we-know.
\6\Jazmine Ulloa, Family Seeks $15 Million in Death of Migrant Girl
in U.S. Custody, N.Y. Times (May l, 2025), https://www.nytimes.com/
2025/05/01/us/migrant-girl-death-cbp-
damages.html.
\7\June 1, 2023 Update: Death in Custody of 8-Year-Old in
Harlingen, Texas, U.S. Customs and Border Protection (June 1, 2023),
https://www.cbp.gov/newsroom/national-media-
release/june-1-2023-update-death-custody-8-year-old-harlingen-texas.
---------------------------------------------------------------------------
DISMANTLING DHS
Committee Republicans did not just oppose commonsense
amendments to stop cruel deportations. They also rejected
amendments aimed at ending the Trump administration's wholesale
dismantling of the Nation's homeland security and disaster
response and recovery enterprise.
Republicans Wish to Abolish FEMA
The Republican reconciliation package completely neglects
the fact that the Trump administration has started executing a
plan to abolish FEMA. Secretary Noem and other officials in the
Trump administration continue to openly discuss dismantling
FEMA, which is the one agency dedicated to assisting Americans
in the aftermath of disasters.\8\ In a March 2025 televised
Cabinet meeting, Secretary Noem even proudly declared, ``We're
going to eliminate FEMA.''\9\ Secretary Noem's remarks on
eliminating FEMA come at a time when reports say FEMA will be
short staffed by 20 percent at the start of hurricane season,
largely due to Elon Musk's staffing schemes and politically
motivated firings.\10\
---------------------------------------------------------------------------
\8\Thomas Frank, FEMA halts grant program that spent billions on
disaster protection, E&E News (Apr. 4, 2025), https://www.eenews.net/
articles/fema-halts-grant-program-that-spent-billions-on-disaster-
protection/.
\9\Id.
\10\Gabe Cohen, FEMA losing roughly 20% of permanent staff,
including longtime leaders, ahead of hurricane season, CNN (Apr. 23,
2025), https://www.cnn.com/2025/04/23/politics/fema-staff-cuts-
hurricane-season/index.html.
---------------------------------------------------------------------------
In addition to weakening the FEMA workforce, the
administration is unlawfully withholding billions of Federal
disaster response, flood mitigation, and wildfire prevention
grant funding even as court orders have instructed the Agency
to immediately disburse the funding.\11\ Committee Republicans
rejected an amendment offered by Rep. Pou that would have
prohibited implementing a process that delays or withholds the
disbursement of funds made available in the measure. In April,
the Trump administration announced that it was canceling nearly
$4.5 billion in mitigation funding awards to communities across
the country in from the Building Resilient Infrastructure and
Communities (BRIC) program--which is congressionally authorized
and appropriated funding for mitigation projects.\12\
Furthermore, political retribution is reportedly influencing
key FEMA decisions on the allocation of assistance and
determining which communities receive aid. Reportedly, FEMA
employees are now saying that the Agency 1s politicizing
``grant funds and disaster assistance like we've never seen
before.''\13\
---------------------------------------------------------------------------
\11\Zach Schonfeld. Judge finds FEMA withholding grants in
violation of court order, The Hill (Apr. 4. 2025), https://thehill.com/
regulation/court-battles/5232494-judge-fema-grants-trump-blue-states/.
\12\Gabe Cohen & Annie Grayer. When billions in emergency funds
were stalled, the Trump administration sped FEMA money to some GOP-led
states, CNN (Apr. 22, 2025), https://www.cnn.com/2025/04/22/politics/
fema-money-slowed-trump/index.html.
\13\Id.
---------------------------------------------------------------------------
Committee Republicans unanimously rejected all the
amendments offered by Democrats that would have addressed the
Trump administration's planned elimination of FEMA and the
deleterious decisions at the Agency, including an amendment
offered by Resident Commissioner Hernandez that would have
explicitly included the Commonwealth of Puerto Rico, local,
Tribal, and other territorial entities within the title's
Homeland Security Grant Program section. This markup was
another missed opportunity for the Committee to do its part to
address the misguided effort to dismantle FEMA. At a minimum,
Committee Republicans are complicit in the Trump
administration's assault on Federal disaster relief and
emergency support for Americans.
DHS MISMANAGEMENT
The Trump administration has paired dismantling DHS with
mismanaging it. Committee Democrats attempted to draw highlight
Republican failures to uphold the rule of law, strengthen
cybersecurity, protect DHS systems from foreign interference
through the official use of commercial messaging apps like
Signal to share operationally sensitive information, and
protect DHS workers.
Respect for the Rule of Law
Republicans' reconciliation package gives massive amounts
of money to the Trump administration without accountability or
guardrails to protect the Constitution and laws of the United
States. The Trump administration has repeatedly engaged in
activities that conflict with decisions and orders of American
courts, including the Supreme Court of the United States.\14\
For example, the Trump administration wrongfully deported a
Maryland man despite an immigration judge having granted him a
withholding of removal.\15\ The Supreme Court stepped in and
ordered the Trump administration to ``facilitate'' the man's
release from custody in El Salvador and ensure that his case is
handled as it would have been had he not been improperly
deported.\16\ The Trump administration has ignored the Supreme
Court,\17\ and President Trump has said that he does not know
whether he is required to comply with the Constitution.\18\
---------------------------------------------------------------------------
\14\See, e.g., Peter Kafka, Donald Trump is Shrugging Off the
Supreme Court. These Are Uncharted Waters. Business Insider (Apr. 15,
2025), https://www.businessinsider.com/donald-trump-defies-supreme-
court-dangerous-precedent-why-2025-4.
\15\Alan Feuer & Karoun Demirjian, What to Know About the
Deportation of Abrego Garcia to El Salvador, N.Y. Times (Apr. 21,
2025), https://www.nytimes.com/article/abrego-
garcia-trump-deportations-el-salvador.html. 16
\16\Trump v. J.G.G., et al., 604 U.S.--(2025).
\17\Alan Feuer & Aishvarya Kavi. White House Continues Defiant
Stance on Seeking Return of Deported Man, N.Y. Times (Apr. 11, 2025),
https://www.nytimes.com/2025/04/l
l/us/politics/us-maryland-man-deportation-delay.html.
\18\Amanda Terkel & Lawrence Hurley, Trump Asked If He Has to
`Uphold the Constitution,' Says, `I Don't Know', NBC News (May 4,
2025), https://www.nbcnews.com/politics/trump-administration/trump-
asked-uphold-constitution-says-dont-know-rcna204580.
---------------------------------------------------------------------------
There is no doubt that the Trump administration has--and
will continue to-ignore the courts and Constitution. The
reconciliation package essentially funds the Trump
administration's lawlessness, and Republicans rejected Rep.
Thanedar's amendments to prevent DHS funding from being used to
engage in actions that conflict with court opinions or orders.
Republicans are willing to spend taxpayer dollars on the
diminution of the courts, laws, and Constitution of the United
States, despite Democratic and democratic objections.
Ignoring Cybersecurity
On the matter of cybersecurity, once again, Republicans say
one thing a do another. Despite the Chairman's pronouncement
that the 119th Congress would be devoted to improving the
Nation's cybersecurity, there is not one penny in the Homeland
Security Committee's reconciliation title devoted to the issue.
And, although the Committee did not allocate the full $90
billion allotted to it in the budget resolution, Republicans
unanimously rejected an amendment offered by Rep. Magaziner
that would have provided funding to rehire and retain highly
sought-after employees at the Cybersecurity and Infrastructure
Security Agency (CISA) the Trump administration
indiscriminately fired or harassed into quitting in order to
pass off the savings as tax cuts to billionaires. They also
rejected an amendment by Rep. Swalwell that would have barred
the Department from including veterans--among best trained and
most devoted public employees in the Federal Government--from
being included in reductions in force.
If the Chairman is waiting to find his so-called ``cyber
border'' before investing in cybersecurity, he will be waiting
a long time, and Americans will pay the price. This tone-deaf
reconciliation package ignores serious threats facing the
Nation--including cyber threats from Russia, China and its
typhoon campaign, Iran, and cyber criminals-while turning a
blind eye to the administration's reckless dismantling of
America's cybersecurity agency. From election security, to
threat hunting, to security by design, the Trump administration
is gutting the core services CISA offers governments and the
private sector alike, and Committee Republicans do not care.
Failing the Workforce
The Republican reconciliation package provides tens of
billions of dollars to OHS for border security at the same time
as the Trump administration undermines the government workers
who actually protect the homeland. Rep. Correa proposed an
amendment to prohibit OHS from using its funding to harm
homeland security workers by undermining or canceling
collective bargaining agreements, but Republicans rejected that
amendment. Meanwhile, President Trump issued an executive order
undermining collective bargaining at OHS agencies like USCIS
and ICE,\19\ and Secretary Noem announced that OHS would cancel
its collective bargaining agreement with the union representing
TSA Officers.\20\ The Republican reconciliation scam is a
giveaway that will harm workers, and Republicans are complicit.
---------------------------------------------------------------------------
\19\Exclusion from Federal Labor-Management Relations Programs,
Exec. Order No. 14251 (Mar. 27, 2025), https://www.whitehouse.gov/
presidential-actions/2025/03/exclusions-from-
federal-labor-management-relations-programs/.
\20\Justin Doubleday, Homeland Security Secretary Kristi Noem ls
Ending Collective Bargaining at TSA and Seeking to Prevent Future
Administrations from Granting Union Rights to TSOs, Federal News
Network (Mar. 7, 2025), https://federalne,vsnetwork.com/unions/2025/03/
dhs-moves-to
-end-collective-bargaining-for-tsa-officers/.
---------------------------------------------------------------------------
Drug Trafficking
The Republican reconciliation package seeks to combat drug
trafficking across our borders but fails to address the very
things that fuel drug traffickers: guns and bulk cash. Firearms
and bulk amounts of cash are consistently smuggled out of
America and into Mexico. The outbound flow of weapons and cash
to fuel cartel violence is a real threat. Just recently, CBP
officers in Del Rio seized nine weapons, 260 rounds of
ammunition, 24 magazines, and weapons' components hidden in two
vehicles traveling to Mexico.\21\ A few weeks prior, officers
at the same port of entry found 16 firearms, including three
assault rifles, 26 magazines, and 182 rounds of ammunition
hidden in another van.\22\ Moreover, in Texas, CBP officers
recently seized over $270,000 dollars in unreported currency
from a single Toyota headed to Mexico.\23\ The seized weapons
and cash could have easily gone into the hands of cartel
members, furthering drug trafficking and other criminal
operations. Without a mandate and resources for CBP to improve
its outbound inspections program, the administration's
crackdown on the drug trade is mere talk. Securing the southern
border and countering drug trafficking means making sure U.S.
officials are inspecting both what is entering and what is
leaving the country, and the Republican legislation fails to
address the latter.
---------------------------------------------------------------------------
\21\CBP officers seize nine weapons, 260 rounds of ammunition, 24
magazines. and weapon components in less than 72 hours at Del Rio Port
of Entry, U.S. Customs and Border Protection (Apr. 10, 2025), https://
www.cbp.gov/newsroom/local-media-release/cbp-officers-seize-nine-
weapons-260-rounds-ammunition-24-magazines-and.
\22\CBP officers seize 16 weapons, 26 magazines, 182 rounds of
ammunition at Del Rio Port of Entry, U.S. Customs and Border Protection
(Mar. 18, 2025), https://www.cbp.gov/newsroom/local-media-release/cbp-
officers-seize-16-weapons-26-magazines-182-rounds-ammunition-del.
\23\CBP officers seize over $270K in unreported currency at Hidalgo
International Bridge, U.S. Customs and Border Protection (Apr. 8,
2025), https://www.cbp.gov/newsroom/local-media-release/cbp-officers-
seize-over-270k-unreported-currency-hidalgo-international.
---------------------------------------------------------------------------
Signalgate
Foreign intelligence services work around the clock to gain
access to sensitive U.S. homeland and national security
information. The targeting of senior government officials to
elicit such information is one method used by foreign
adversaries to do this. On March 24, our foreign adversaries
learned that they may not have to work so hard to target the
most senior national security officials in the country when it
was revealed that the highest-ranking Trump administration
officials had used the commercial messaging app Signal to
discuss highly sensitive and classified information and
inadvertently added a journalist to the text message chain.
The Trump administration and House Republicans want the
American people to believe that nothing classified was
discussed on these chats, but the American people know better.
It is clear from the lack of investigations and introduced
articles of impeachment related to the egregious national
security breach--and Mike Waltz's recent promotion to nominee
for UN ambassador--that House Republicans and the Trump
administration could not care less about protecting information
that, if disclosed, could damage our national security and harm
our U.S. service men and women. This is also evident from the
fact that the Republican reconciliation package allocated zero
dollars for DHS counterintelligence programs, projects, or
activities to detect, deter, and disrupt foreign intelligence
threats.
CONCLUSION
Committee Republicans chose silence over addressing
pressing concerns regarding unlawful deportations, the
haphazard dismantling of DHS without legislative mandate, and
the amateurish mismanagement of the Department. They have
chosen to spend $69 billion in hard-earned taxpayer money to
make more palatable deep cuts to Medicaid and to cut the taxes
of billionaires.
Regardless of what these funds in the reconciliation
package could potentially do if put in the right hands, the
Trump administration has proven itself incompetent and
unreliable at best and an enemy of the Constitution and
Congress's power of the purse at worst. Trump and Noem are
unconstitutionally dismantling DHS--firing hundreds of civil
servants, freezing grants, eliminating the watchdogs who
protect Americans, and failing to respond to Hurricane Helene's
devastation in North Carolina. There is no guarantee that the
money included this package would be spent the way it is laid
out in the Committee Print--or anywhere else in the Republican
legislative agenda. Moreover, congressional Republicans have
also proven themselves wholly incapable of any oversight of
this administration. Even worse, the Homeland Security
Committee has embarked on this massive spending plan without
having first held a hearing with Secretary Noem and
scrutinizing her priorities and the Department's needs. The
Committee scheduled its first meeting with the Secretary for
more than 2 weeks after marking up this funding package.
The Republican reconciliation measure spends billions of
taxpayer dollars and puts Americans' security at risk--all
while cutting Medicaid to give tax cuts to billionaires and
large corporations. Homeland Security Democrats strongly oppose
this reckless Republican rip-off.
Bennie G. Thompson,
Ranking Member.
Eric Swalwell,
J. Luis Correa,
Shri Thanedar,
Dan Goldman,
Timothy M. Kennedy,
Julie Johnson,
Nellie Pou,
Robert Garcia,
Seth Magaziner,
Delia C. Ramirez,
LaMonica McIver,
Pablo Jose Hernandez,
Troy A. Carter, Sr.,
Members of Congress.
House of Representatives,
Committee on the Judiciary,
Washington, DC, May 6, 2025.
Hon. Jodey C. Arrington,
Chairman, Committee on the Budget
House of Representatives, Washington, DC.
Dear Chairman Arrington: Pursuant to section 2001 of the
Concurrent Resolution on the Budget for Fiscal Year 2025, I
hereby transmit these recommendations that have been approved
by vote of the Committee on the Judiciary, and appropriate
accompanying material including supplemental, minority,
additional, or dissenting views, to the House Committee on the
Budget. This submission is in order to comply with
reconciliation directives included in H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025, and
is consistent with section 310 of the Congressional Budget Act
of 1974. Thank you for your attention to this matter.
Sincerely,
Jim Jordan,
Chairman.
Enclosures.
Committee Print, as Reported by the
Committee on the Judiciary
[Providing for reconciliation pursuant to H. Con. Res. 14, the
Concurrent Resolution on the Budget for Fiscal Year 2025]
TITLE VII--COMMITTEE ON THE JUDICIARY
Subtitle A--Immigration Matters
PART 1--IMMIGRATION FEES
SEC. 70001. APPLICABILITY OF THE IMMIGRATION LAWS.
(a) Applicability.--Notwithstanding any provision of the
immigration laws (as defined under section 101 of the
Immigration and Nationality Act), the fees under this subtitle
shall apply.
(b) Terms.--The terms used under this subtitle shall have the
meanings given such terms in section 101 of the Immigration and
Nationality Act.
(c) References to Immigration and Nationality Act.--Except as
otherwise expressly provided, whenever this subtitle references
a section or other provision, the reference shall be considered
to be to a section or other provision of the Immigration and
Nationality Act.
SEC. 70002. ASYLUM FEE.
(a) In General.--In addition to any other fee authorized by
law, the Secretary of Homeland Security or the Attorney
General, as applicable, shall impose a fee in the amount
specified in this section for a fiscal year on each alien who
files an application for asylum under section 208 of the
Immigration and Nationality Act at the time such application is
filed.
(b) Initial Amount.--The amount specified in this section for
fiscal year 2025 shall be such amount as the Secretary or
Attorney General, as applicable, may by rule provide, but in
any event not less than $1,000.
(c) Subsequent Adjustment.--Beginning in fiscal year 2026 and
each fiscal year thereafter, the amount specified in this
section for a fiscal year shall be equal to the sum of--
(1) the amount imposed under this section for the
prior fiscal year; and
(2) rounded to the next lowest multiple of $10, the
amount referred to in paragraph (1), multiplied by the
percentage (if any) by which the Consumer Price Index
for All Urban Consumers for the month of July preceding
the date on which such adjustment takes effect exceeds
the Consumer Price Index for All Urban Consumers for
the same month of the preceding calendar year.
(d) Crediting Certain Funds.--During any fiscal year, the
total amount of fees received under this section shall be
credited as follows:
(1) 50 percent of fees received from applications
filed with the Attorney General shall be credited to
the Executive Office for Immigration Review to retain
and spend without further appropriation.
(2) 50 percent of fees received from applications
filed with the Secretary of Homeland Security shall be
credited to U.S. Citizenship and Immigration Services
and deposited into the Immigration Examinations Fee
Account established under section 286(m) of the
Immigration and Nationality Act (8 U.S.C. 1356(m)) to
retain and spend without further appropriation.
(3) Any amounts not credited to the Executive Office
for Immigration Review or U.S. Citizenship and
Immigration Services shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(e) No Waiver.--A fee imposed under this section shall not be
waived or reduced.
SEC. 70003. EMPLOYMENT AUTHORIZATION DOCUMENT FEES.
(a) Asylum Applicants.--
(1) In general.--In addition to any other fee
authorized by law, the Secretary of Homeland Security
shall impose on any alien who files an initial
application for employment authorization under section
208(d)(2) of the Immigration and Nationality Act a fee
in the amount specified in this subsection at the time
such initial employment authorization application is
filed. Each initial employment authorization shall be
valid for a period of not more than six months.
(2) Initial amount.-- For purposes of this
subsection, the amount specified in this subsection for
fiscal year 2025 shall be such amount as the Secretary
may by rule provide, but in any event not less than
$550.
(3) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount for a
fiscal year shall be equal to the sum of--
(A) the amount imposed under this section for
the prior fiscal year; and
(B) rounded to the next lowest multiple of
$10, the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(4) Crediting of funds.--25 percent of fees received
under this section shall be credited to U.S.
Citizenship and Immigration Services and deposited into
the Immigration Examinations Fee Account established
under section 286(m) of the Immigration and Nationality
Act (8 U.S.C. 1356(m)) to retain and spend without
further appropriation, of which 50 percent shall be
used by U.S. Citizenship and Immigration Services to
detect and prevent immigration benefit fraud. Any
amounts not credited to U.S. Citizenship and
Immigration Services under this section shall be
credited as offsetting receipts and deposited into the
general fund of the Treasury.
(5) No waiver.--A fee imposed under this subsection
shall not be waived or reduced.
(b) Parole.--
(1) In general.--In addition to any other fee
authorized by law, the Secretary of Homeland Security
shall impose on any alien paroled into the United
States a fee for any initial application for employment
authorization in an amount specified in this subsection
at the time such initial application is filed. Each
initial employment authorization shall be valid for a
period of not more than six months.
(2) Initial amount.--For purposes of this subsection,
the amount specified in this subsection for fiscal year
2025 shall be such amount as the Secretary may by rule
provide, but in any event not less than $550.
(3) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
(A) the amount imposed under this subsection
for the prior fiscal year; and
(B) rounded to the next lowest multiple of
$10, the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(4) Crediting of funds.--The fees received under this
section shall be credited as offsetting receipts and
deposited into the general fund of the Treasury.
(5) No waiver.--A fee imposed under this subsection
shall not be waived or reduced.
(c) Temporary Protected Status.--
(1) In general.--In addition to any other fee
authorized by law, for any alien who files an initial
application for employment authorization under section
244(a)(1)(B) of the Immigration and Nationality Act,
the Secretary of Homeland Security shall impose a fee
in an amount specified in this subsection at the time
such initial application is filed. Each initial
employment authorization shall be valid for a period of
not more than six months.
(2) Initial amount.--For purposes of this subsection,
the amount specified in this subsection for fiscal year
2025 shall be such amount as the Secretary may by rule
provide, but in any event not less than $550.
(3) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
(A) the amount imposed under this subsection
for the prior fiscal year; and
(B) rounded to the next lowest multiple of
$10, the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(4) Crediting of certain funds.--The fees received
under this section shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(5) No waiver.--A fee imposed under this subsection
shall not be waived or reduced.
SEC. 70004. PAROLE FEE.
(a) In General.--In addition to any other fee authorized by
law, the Secretary of Homeland Security shall impose a fee in
an amount specified in this section on each alien who is
paroled into the United States, except if, as established by
the alien, the alien is paroled because--
(1) the alien has a medical emergency, and--
(A) the alien cannot obtain necessary
treatment in the foreign state in which the
alien is residing; or
(B) the medical emergency is life-threatening
and there is insufficient time for the alien to
be admitted to the United States through the
normal visa process;
(2) the alien is the parent or legal guardian of an
alien described in paragraph (1) and the alien
described in paragraph (1) is a minor;
(3) the alien is needed in the United States to
donate an organ or other tissue for transplant and
there is insufficient time for the alien to be admitted
to the United States through the normal visa process;
(4) the alien has a close family member in the United
States whose death is imminent and the alien could not
arrive in the United States in time to see such family
member alive if the alien were to be admitted to the
United States through the normal visa process;
(5) the alien is seeking to attend the funeral of a
close family member and the alien could not arrive in
the United States in time to attend such funeral if the
alien were to be admitted to the United States through
the normal visa process;
(6) the alien is an adopted child with an urgent
medical condition who is in the legal custody of the
petitioner for a final adoption-related visa and whose
medical treatment is required before the expected award
of a final adoption-related visa;
(7) the alien is a lawful applicant for adjustment of
status under section 245 of the Immigration and
Nationality Act and is returning to the United States
after temporary travel abroad;
(8) the alien is returned to a contiguous country
under section 235(b)(2)(C) of the Immigration and
Nationality Act and paroled into the United States to
allow the alien to attend the alien's immigration
hearing;
(9) the alien--
(A) is a national of the Republic of Cuba and
is living in the Republic of Cuba;
(B) is the beneficiary of an approved
petition under section 203(a) of the
Immigration and Nationality Act;
(C) is an alien for whom an immigrant visa is
not immediately available;
(D) meets all eligibility requirements for an
immigrant visa;
(E) is not otherwise inadmissible; and
(F) is receiving a grant of parole in
furtherance of the commitment of the United
States to the minimum level of annual legal
migration of Cuban nationals to the United
States specified in the U.S.-Cuba Joint
Communique on Migration, done at New York
September 9, 1994, and reaffirmed in the Cuba-
United States: Joint Statement on Normalization
of Migration, Building on the Agreement of
September 9, 1994, done at New York May 2,
1995; or
(10) the Secretary of Homeland Security determines
that a significant public benefit has resulted or will
result from the parole of an alien only if--
(A) the alien has assisted or will assist the
United States Government in a law enforcement
matter;
(B) the alien's presence is required by the
Government in furtherance of such law
enforcement matter; and
(C) the alien is inadmissible, does not
satisfy the eligibility requirements for
admission as a nonimmigrant, or there is
insufficient time for the alien to be admitted
to the United States through the normal visa
process.
(b) Initial Amount.--For purposes of this section, the amount
specified in this subsection for fiscal year 2025 shall be such
amount as the Secretary may by rule provide, but in any event
not less than $1,000.
(c) Subsequent Adjustment.--Beginning in fiscal year 2026 and
each fiscal year thereafter, the amount specified in this
section for a fiscal year shall be equal to the sum of--
(1) the amount imposed under this section for the
prior fiscal year; and
(2) rounded to the next lowest multiple of $10, the
amount referred to in paragraph (1), multiplied by the
percentage (if any) by which the Consumer Price Index
for All Urban Consumers for the month of July preceding
the date on which such adjustment takes effect exceeds
the Consumer Price Index for All Urban Consumers for
the same month of the preceding calendar year.
(d) Crediting of Funds.--Fees received under this section
shall be credited as offsetting receipts and deposited in the
general fund of the Treasury.
(e) No Waiver.--A fee imposed under this section shall not be
waived or reduced.
SEC. 70005. SPECIAL IMMIGRANT JUVENILE FEE.
(a) In General.--In addition to any other fee authorized by
law, the Secretary of Homeland Security shall impose a fee in
an amount specified in this section on any alien applying for
special immigrant juvenile status under section 101(a)(27)(J)
of the Immigration and Nationality Act if reunification with 1
parent or legal guardian is viable, notwithstanding abuse,
neglect, abandonment, or a similar basis found under State law
making reunification with the other parent or legal guardian
not viable.
(b) Initial Amount.--For purposes of this subsection, the
amount specified in this section for fiscal year 2025 shall be
such amount as the Secretary may by rule provide, but in any
event not less than $500.
(c) Subsequent Adjustment.--Beginning in fiscal year 2026 and
each fiscal year thereafter, the amount specified in this
section for a fiscal year shall be equal to the sum of--
(1) the amount imposed under this section for the
prior fiscal year; and
(2) rounded to the next lowest multiple of $10, the
amount referred to in paragraph (1), multiplied by the
percentage (if any) by which the Consumer Price Index
for All Urban Consumers for the month of July preceding
the date on which such adjustment takes effect exceeds
the Consumer Price Index for All Urban Consumers for
the same month of the preceding calendar year.
(d) Crediting of Funds.--Fees received under this section
shall be credited as offsetting receipts and deposited in the
general fund of the Treasury.
(e) No Waiver.--A fee imposed under this section shall not be
waived or reduced.
SEC. 70006. TEMPORARY PROTECTED STATUS FEE.
(a) In General.--In addition to any other fee authorized by
law, the Secretary of Homeland Security shall impose a fee in
an amount specified in this section for the consideration of an
application for temporary protected status under section 244 of
the Immigration and Nationality Act on any alien who--
(1) has not been admitted into the United States; or
(2) has been admitted to the United States as a
nonimmigrant but at the time of application for
temporary protected status has failed--
(A) to maintain or extend the nonimmigrant
status in which the alien was admitted or to
which the status was changed under section 248
of the Immigration and Nationality Act,
including complying with the period of stay
authorized by the Secretary of Homeland
Security in connection with such status; or
(B) to comply with the conditions of such
nonimmigrant status.
(b) Initial Amount.--For purposes of this subsection, the
amount specified in this section for fiscal year 2025 shall be
such amount as the Secretary may by rule provide, but in any
event not less than $500.
(c) Subsequent Adjustment.--Beginning in fiscal year 2026 and
each fiscal year thereafter, the amount specified in this
section for a fiscal year shall be equal to the sum of--
(1) the amount imposed under this section for the
prior fiscal year; and
(2) rounded to the next lowest multiple of $10, the
amount referred to in paragraph (1), multiplied by the
percentage (if any) by which the Consumer Price Index
for All Urban Consumers for the month of July preceding
the date on which such adjustment takes effect exceeds
the Consumer Price Index for All Urban Consumers for
the same month of the preceding calendar year.
(d) Crediting of Funds.--Fees received under this section
shall be credited as offsetting receipts and deposited in the
general fund of the Treasury.
(e) No Waiver.--A fee imposed under this section shall not be
waived or reduced.
SEC. 70007. UNACCOMPANIED ALIEN CHILD SPONSOR FEE.
(a) In General.--In addition to any other fee authorized by
law, before placing the child with an individual under section
235(c) of the William Wilberforce Trafficking Victims
Protection Reauthorization Act of 2008, the Secretary of Health
and Human Services shall collect from that individual a fee in
an amount specified in this section as partial reimbursement to
the Federal Government for the period during which the child
was in the custody of the Government, for processing, housing,
feeding, educating, transporting, and otherwise providing for
the care of the child.
(b) Initial Amount.--For purposes of this subsection, the
amount specified in this section for fiscal year 2025 shall be
such amount as the Secretary may by rule provide, but in any
event not less than $3,500.
(c) Subsequent Adjustment.--Beginning in fiscal year 2026 and
each fiscal year thereafter, the amount specified in this
section for a fiscal year shall be equal to the sum of--
(1) the amount imposed under this section for the
prior fiscal year; and
(2) rounded to the next lowest multiple of $10, the
amount referred to in paragraph (1), multiplied by the
percentage (if any) by which the Consumer Price Index
for All Urban Consumers for the month of July preceding
the date on which such adjustment takes effect exceeds
the Consumer Price Index for All Urban Consumers for
the same month of the preceding calendar year.
(d) Crediting of Funds.--During any fiscal year, the total
amount of fees received under this section shall be credited as
follows:
(1) 25 percent of fees received under this section
shall be credited to the Department of Health and Human
Services to retain and spend without further
appropriation and shall be used for the purpose of
conducting background checks of potential sponsors of
unaccompanied alien children and of adults residing in
potential sponsors' households, which shall include, at
a minimum--
(A) the name of the individual and all adult
residents of the individual's household;
(B) the social security number of the
individual and all adult residents of the
individual's household;
(C) the date of birth of the individual and
all adult residents of the individual's
household;
(D) the validated location of the
individual's residence where the child will be
placed;
(E) the immigration status of the individual
and all adult residents of the individual's
household;
(F) contact information for the individual
and all adult residents of the individual's
household; and
(G) the results of all background and
criminal records checks for the individual and
all adult residents of the individual's
household, which shall include at a minimum an
investigation of the public records sex
offender registry, a public records background
check, and a national criminal history check
based on fingerprints.
(2) Any amounts not credited to the Department of
Health and Human Services shall be credited as
offsetting receipts and deposited into the general fund
of the Treasury.
(e) No Waiver.--A fee imposed under this section shall not be
waived or reduced.
SEC. 70008. VISA INTEGRITY FEE.
(a) Visa Integrity Fee.--
(1) In general.--In addition to any other fee
authorized by law, the Secretary of State shall impose
a fee in an amount specified in this subsection on each
alien issued a nonimmigrant visa by the State
Department upon the issuance of such alien's
nonimmigrant visa.
(2) Initial amount.--For purposes of this subsection,
the amount specified in this subsection for fiscal year
2025 shall be such amount as the Secretary may by rule
provide, but in any event not less than $250.
(3) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
(A) the amount imposed under this section for
the prior fiscal year; and
(B) rounded to the next lowest multiple of
$1, the amount referred to in subparagraph (A),
multiplied by the percentage (if any) by which
the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(4) Crediting of funds.--The fees received under this
subsection that are not reimbursed in accordance with
subsection (b) shall be credited as offsetting receipts
and deposited in the general fund of the Treasury.
(5) No waiver.--A fee imposed under this subsection
shall not be waived or reduced.
(b) Fee Reimbursement.--The Secretary of State may reimburse
to an alien a fee imposed under this section on that alien for
the issuance of a nonimmigrant visa after the expiration of
such nonimmigrant visa's period of validity if the alien
demonstrates that--
(1) the alien has not sought admission during such
period of validity;
(2) the alien, after admission to the United States
pursuant to such nonimmigrant visa, complied with all
conditions of such nonimmigrant visa, including the
condition that an alien shall not accept unauthorized
employment, and that the alien departed the United
States not later than 5 days after the date on which
the alien was authorized to remain in the United
States; or
(3) the alien filed to extend, change, or adjust such
status within the nonimmigrant visa's period of
validity.
SEC. 70009. FORM I-94 FEE.
(a) Fee Authorized.--In addition to any other fee authorized
by law, the Secretary of Homeland Security shall impose a fee
in an amount specified in subsection (b) on any alien upon the
alien's application for a Form I-94 Arrival/Departure Record.
(b) Fee Specified.--
(1) Initial amount.--The amount specified in this
subsection for fiscal year 2025 shall be such amount as
the Secretary may by rule provide, but in any event not
less than $24.
(2) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
(A) the amount imposed under this section for
the prior fiscal year; and
(B) the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(c) Crediting of Funds.--During any fiscal year, the total
amount of fees received under this section shall be credited as
follows:
(1) 20 percent of the fee collected under this
section for each application shall be deposited
pursuant to section 286(q)(2) of the Immigration and
Nationality Act (8 U.S.C. 1356(q)(2)) and made
available to U.S. Customs and Border Protection to
retain and spend without further appropriation for the
purpose of processing Form I-94.
(2) Any amounts not credited to U.S. Customs and
Border Protection shall be credited as offsetting
receipts and deposited in the general fund of the
Treasury.
(d) No Waiver.--A fee imposed under this section shall not be
waived or reduced.
SEC. 70010. YEARLY ASYLUM FEE.
(a) Fee Authorized.--In addition to any other fee authorized
by law, for each calendar year that an alien's application for
asylum remains pending, the Secretary of Homeland Security or
the Attorney General, as applicable, shall impose a fee in an
amount specified in subsection (b) on that alien.
(b) Fee Specified.--
(1) Initial amount.--The amount specified in this
subsection for fiscal year 2025 shall be such amount as
the Secretary and the Attorney General may by rule
provide, but in any event not less than $100.
(2) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
(A) the amount imposed under this section for
the prior fiscal year; and
(B) the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(c) Crediting of Funds.--The fees received under this section
shall be credited as offsetting receipts and deposited in the
general fund of the Treasury.
(d) No Waiver.--A fee imposed under this section shall not be
waived or reduced.
SEC. 70011. FEE FOR CONTINUANCES GRANTED IN IMMIGRATION COURT
PROCEEDINGS.
(a) In General.--In addition to any other fee authorized by
law, the Attorney General shall impose a fee in an amount
specified in subsection (b) on any alien who requests and is
granted a continuance by an immigration judge for each such
continuance.
(b) Fee Specified.--
(1) Initial amount.--The amount specified in this
subsection for fiscal year 2025 shall be such amount as
the Attorney General may by rule provide, but in any
event not less than $100.
(2) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
(A) the amount imposed under this section for
the prior fiscal year; and
(B) the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(c) Crediting of Certain Funds.--Amounts received as fees
under this section shall be credited as offsetting receipts and
deposited in the general fund of the Treasury.
(d) No Waiver.--A fee imposed under this section shall not be
waived or reduced, except no fee shall be imposed on any alien
whose request for a continuance is granted based on exceptional
circumstances (as such term is defined in section 240 of the
Immigration and Nationality Act).
SEC. 70012. FEE RELATING TO RENEWAL AND EXTENSION OF EMPLOYMENT
AUTHORIZATION FOR PAROLEES.
(a) Fee Imposed.--In addition to any other fee authorized by
law, for a parolee who seeks a renewal or extension of
employment authorization based on a grant of parole, the
Secretary of Homeland Security shall impose a fee in an amount
specified in subsection (b).
(b) Fee Specified.--
(1) Initial amount.--The amount specified in this
subsection for fiscal year 2025 shall be such amount as
the Secretary may by rule provide, but in any event not
less than $550.
(2) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
(A) the amount imposed under this subsection
for the prior fiscal year; and
(B) rounded to the next lowest multiple of
$10, the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(c) In General.--The employment authorization for any alien
paroled into the United States, or any renewal or extension
thereof, shall be valid for a period of not more than six
months.
(d) Crediting of Funds.--The fees received under this section
shall be credited as offsetting receipts and deposited into the
general fund of the Treasury.
(e) No Waiver.--A fee imposed under this subsection shall not
be waived or reduced.
SEC. 70013. FEE RELATING TO TERMINATION, RENEWAL, AND EXTENSION OF
EMPLOYMENT AUTHORIZATION FOR ASYLUM APPLICANTS.
(a) Fee Imposed.--In addition to any other fee authorized by
law, for any alien who applies for asylum and who seeks a
renewal or extension of employment authorization based on such
application, the Secretary of Homeland Security shall impose a
fee of not less than $550 for each such renewal or extension,
in accordance with subsection (b).
(b) Employment Authorization.--The Secretary of Homeland
Security may provide employment authorization to an applicant
for asylum for a period of not more than six months. Each
renewal or extension thereof shall also be valid for a period
of not more than six months.
(c) Termination.--Each initial employment authorization, or
renewal or extension of such authorization, shall terminate as
follows:
(1) Immediately following the denial of an asylum
application by an asylum officer, unless the case is
referred to an immigration judge.
(2) On the date that is 30 days after the date on
which an immigration judge denies an asylum
application, unless the alien makes a timely appeal to
the Board of Immigration Appeals.
(3) Immediately following the denial by the Board of
Immigration Appeals of an appeal of a denial of an
asylum application.
(d) Prohibition.--The Secretary of Homeland Security shall
not grant, renew, or extend employment authorization to an
alien if the alien was previously granted employment
authorization as an applicant for asylum and the employment
authorization was terminated pursuant to a circumstance
described in subsection (c), unless a Federal Court of Appeals
remands the alien's case to the Board of Immigration Appeals.
(e) Crediting of Funds.--The total amount of fees received
under this section shall be credited as offsetting receipts and
deposited in the general fund of the Treasury.
(f) No Waiver.--A fee imposed under this subsection shall not
be waived or reduced.
SEC. 70014. FEE RELATING TO RENEWAL AND EXTENSION OF EMPLOYMENT
AUTHORIZATION FOR ALIENS GRANTED TEMPORARY
PROTECTED STATUS.
(a) Fee Imposed.--In addition to any other fee authorized by
law, for any alien who seeks a renewal or extension of
employment authorization based on a grant of temporary
protected status, the Secretary of Homeland Security shall
impose a fee in an amount specified in subsection (b) at the
time of each such renewal or extension.
(b) Fee Specified.--
(1) Initial amount.--The amount specified in this
subsection for fiscal year 2025 shall be such amount as
the Secretary may by rule provide, but in any event not
less than $550.
(2) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
(A) the amount imposed under this subsection
for the prior fiscal year; and
(B) rounded to the next lowest multiple of
$10, the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(c) Employment Authorization.--Any employment authorization
for an alien granted temporary protected status, or any renewal
or extension thereof, shall be valid for a period of not more
than six months.
(d) Crediting of Funds.--The fees received under this section
shall be credited as offsetting receipts and deposited into the
general fund of the Treasury.
(e) No Waiver.--A fee imposed under this subsection shall not
be waived or reduced.
SEC. 70015. DIVERSITY IMMIGRANT VISA FEES.
(a) Fee for Filing a Diversity Immigrant Visa Application.--
(1) In general.--In addition to any other fee
authorized by law, the Secretary of State shall impose
on any alien who files an application for a diversity
immigrant visa as described in section 203(c) of the
Immigration and Nationality Act (8 U.S.C. 1153(c)) a
fee in the amount specified in this subsection at the
time such application is filed.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Secretary may by rule
provide, but in any event not less than $400.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(b) Fee for Aliens Who Register for the Diversity Immigrant
Visa Program.--
(1) In general.--In addition to any other fee
authorized by law, the Secretary of State shall impose
on any alien who registers for the diversity immigrant
visa program, as described in section 203(c) of the
Immigration and Nationality Act (8 U.S.C. 1153(c)) a
fee in the amount specified in this subsection at the
time of registration.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Secretary may by rule
provide, but in any event not less than $250.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) the amount referred to in clause
(i), multiplied by the percentage (if
any) by which the Consumer Price Index
for All Urban Consumers for the month
of July preceding the date on which
such adjustment takes effect exceeds
the Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(c) Crediting of Funds.--During any fiscal year, the total
amount of fees received under this section shall be credited as
follows:
(1) 10 percent of fees received shall be credited to
the Department of State to retain and spend without
further appropriation to detect and prevent fraud in
the diversity immigrant visa program and to offset
costs associated with such program.
(2) 10 percent of fees received shall be credited to
U.S. Immigration and Customs Enforcement to retain and
spend without further appropriation for the purpose of
detention and immigration enforcement and removal
operations.
(3) Any amounts not credited under this subsection to
the Department of State or U.S. Immigration and Customs
Enforcement shall be credited as offsetting receipts
and deposited into the general fund of the Treasury.
(d) No Waiver.--A fee imposed under this section shall not be
waived or reduced.
SEC. 70016. EOIR FEES.
(a) Fee for Filing an Application to Adjust Status to That of
a Lawful Permanent Resident.--
(1) In general.--In addition to any other fees
authorized by law, the Attorney General shall impose on
any alien who files with an immigration court an
application to adjust the alien's status to that of a
lawful permanent resident, or whose application to
adjust status to that of a lawful permanent resident is
adjudicated in immigration court, a fee in the amount
specified in this subsection at the time such
application is filed, or, as applicable, prior to the
adjudication of such application in immigration court.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Attorney General may by rule
provide, but in any event not less than $1,500.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(3) Crediting certain funds.--During any fiscal year,
not more than 50 percent of the total amount of fees
received under this section shall be derived by
transfer from the Immigration Examinations Fee Account
under section 286(n) of the Immigration and Nationality
Act and credited to the Executive Office for
Immigration Review to retain and spend without further
appropriation. Any amounts not credited under the
previous sentence shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(b) Fee for Filing an Application for Waiver of Grounds of
Inadmissibility.--
(1) In general.--In addition to any other fees
authorized by law, the Attorney General shall impose on
any alien who files with an immigration court an
application for waiver of grounds of inadmissibility,
or whose application for waiver of grounds of
inadmissibility is adjudicated in immigration court, a
fee in the amount specified in this subsection at the
time such application is filed, or, as applicable,
prior to the adjudication of such application in
immigration court.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Attorney General may by rule
provide, but in any event not less than $1,050.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(3) Crediting certain funds.--During any fiscal year,
not more than 25 percent of the total amount of fees
received under this section shall be derived by
transfer from the Immigration Examinations Fee Account
under section 286(n) of the Immigration and Nationality
Act and credited to the Executive Office for
Immigration Review to retain and spend without further
appropriation. Any amounts not credited under the
previous sentence shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(c) Fee for Filing an Application for Temporary Protected
Status.--
(1) In general.--In addition to any other fees
authorized by law, the Attorney General shall impose on
any alien who files with an immigration court an
application for temporary protected status, or whose
application for temporary protected status is
adjudicated in immigration court, a fee in the amount
specified in this subsection at the time such
application is filed or, as applicable, prior to the
adjudication of such application in immigration court.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Attorney General may by rule
provide, but in any event not less than $500.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(3) Crediting certain funds.--During any fiscal year,
not more than 25 percent of the total amount of fees
received under this section shall be derived by
transfer from the Immigration Examinations Fee Account
under section 286(n) of the Immigration and Nationality
Act and credited to the Executive Office for
Immigration Review to retain and spend without further
appropriation. Any amounts not credited under the
previous sentence shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(d) Fee for Filing an Appeal From a Decision of an
Immigration Judge.--
(1) In general.--In addition to any other fees
authorized by law, the Attorney General shall impose on
any alien who files any appeal from a decision of an
immigration judge a fee in the amount specified in this
subsection at the time such appeal is filed.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Attorney General may by rule
provide, but in any event not less than $900.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(3) Exception.--The fee described in this section
shall not apply to the appeal of a bond decision.
(4) Crediting certain funds.--During any fiscal year,
not more than 25 percent of the total amount of fees
received under this section shall be derived by
transfer from the Immigration Examinations Fee Account
under section 286(n) of the Immigration and Nationality
Act and credited to the Executive Office for
Immigration Review to retain and spend without further
appropriation. Any amounts not credited under the
previous sentence shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(e) Fee for Filing an Appeal From a Decision of an Officer of
the Department of Homeland Security.--
(1) In general.--In addition to any other fees
authorized by law, the Attorney General shall impose on
any alien who files an appeal from a decision of an
officer of the Department of Homeland Security a fee in
the amount specified in this subsection at the time
such appeal is filed.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Attorney General may by rule
provide, but in any event not less than $900.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(3) Crediting certain funds.--During any fiscal year,
not more than 25 percent of the total amount of fees
received under this section shall be derived by
transfer from the Immigration Examinations Fee Account
under section 286(n) of Immigration and Nationality and
credited to the Executive Office for Immigration Review
to retain and spend without further appropriation. Any
amounts not credited under the previous sentence shall
be credited as offsetting receipts and deposited into
the general fund of the Treasury.
(f) Fee for Filing an Appeal From a Decision of an
Adjudicating Official in a Practitioner Disciplinary Case.--
(1) In general.--In addition to any other fees
authorized by law, the Attorney General shall impose on
any practitioner who files an appeal from a decision of
an adjudicating official in a practitioner disciplinary
case a fee in the amount specified in this subsection
at the time such appeal is filed.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Attorney General may by rule
provide, but in any event not less than $1,325.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(3) Crediting certain funds.--During any fiscal year,
not more than 25 percent of the total amount of fees
received under this section shall be derived by
transfer from the Immigration Examinations Fee Account
under section 286(n) of the Immigration and Nationality
Act and credited to the Executive Office for
Immigration Review to retain and spend without further
appropriation. Any amounts not credited under the
previous sentence shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(g) Fee for Filing a Motion to Reopen or a Motion to
Reconsider.--
(1) In general.--In addition to any other fees
authorized by law, the Attorney General shall impose on
any alien who files a motion to reopen or motion to
reconsider a decision of an immigration judge or the
Board of Immigration Appeals a fee in the amount
specified in this subsection at the time such motion is
filed.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Attorney General may by rule
provide, but in any event not less than $900.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(3) Exceptions.--The fee described in this section
shall not apply to any motion that is:
(A) a motion to reopen a removal order
entered in absentia if the motion is filed
under section 240(b)(5)(C)(ii) of the
Immigration and Nationality Act; or
(B) a motion to reopen a deportation order
entered in absentia if the motion is filed
under section 242B(c)(3)(B) of the Immigration
and Nationality Act, as the section existed
prior to April 1, 1997.
(4) Crediting certain funds.--During any fiscal year,
not more than 25 percent of the total amount of fees
received under this section shall be derived by
transfer from the Immigration Examinations Fee Account
under section 286(n) of the Immigration and Nationality
Act and credited to the Executive Office for
Immigration Review to retain and spend without further
appropriation. Any amounts not credited under the
previous sentence shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(h) Fee for Filing an Application for Suspension of
Deportation.--
(1) In general.--In addition to any other fees
authorized by law, the Attorney General shall impose on
any alien who files with an immigration court an
application for suspension of deportation a fee in the
amount specified in this subsection at the time such
application is filed.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Attorney General may by rule
provide, but in any event not less than $600.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(3) Crediting certain funds.--During any fiscal year,
not more than 25 percent of the total amount of fees
received under this section shall be derived by
transfer from the Immigration Examinations Fee Account
under section 286(n) of the Immigration and Nationality
Act and credited to the Executive Office for
Immigration Review to retain and spend without further
appropriation. Any amounts not credited under the
previous sentence shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(i) Fee for Filing an Application for Cancellation of Removal
for Certain Permanent Residents.--
(1) In general.--In addition to any other fees
authorized by law, the Attorney General shall impose on
any alien who files with an immigration court an
application for cancellation of removal for certain
permanent residents a fee in the amount specified in
this subsection at the time such application is filed.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Attorney General may by rule
provide, but in any event not less than $600.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(3) Crediting certain funds.--During any fiscal year,
not more than 25 percent of the total amount of fees
received under this section shall be derived by
transfer from the Immigration Examinations Fee Account
under section 286(n) of the Immigration and Nationality
Act and credited to the Executive Office for
Immigration Review to retain and spend without further
appropriation. Any amounts not credited under the
previous sentence shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(j) Fee for Filing an Application for Cancellation of Removal
and Adjustment of Status for Certain Nonpermanent Residents.--
(1) In general.--In addition to any other fees
authorized by law, the Attorney General shall impose on
any alien who files with an immigration court an
application for cancellation of removal and adjustment
of status for certain nonpermanent residents a fee in
the amount specified in this subsection at the time
such application is filed.
(2) Fee specified.--
(A) Initial amount.--The amount specified in
this subsection for fiscal year 2025 shall be
such amount as the Attorney General may by rule
provide, but in any event not less than $1,500.
(B) Subsequent adjustment.--Beginning in
fiscal year 2026 and each fiscal year
thereafter, the amount specified in this
subsection for a fiscal year shall be equal to
the sum of--
(i) the amount imposed under this
subsection for the prior fiscal year;
and
(ii) rounded to the next lowest
multiple of $10, the amount referred to
in clause (i), multiplied by the
percentage (if any) by which the
Consumer Price Index for All Urban
Consumers for the month of July
preceding the date on which such
adjustment takes effect exceeds the
Consumer Price Index for All Urban
Consumers for the same month of the
preceding calendar year.
(3) Crediting certain funds.--During any fiscal year,
not more than 25 percent of the total amount of fees
received under this section shall be derived by
transfer from the Immigration Examinations Fee Account
under section 286(n) of the Immigration and Nationality
Act and credited to the Executive Office for
Immigration Review to retain and spend without further
appropriation. Any amounts not credited under the
previous sentence shall be credited as offsetting
receipts and deposited into the general fund of the
Treasury.
(k) No Waiver.--Any fee imposed under this section shall not
be waived or reduced.
(l) Condition on Funds.--No fees received under this section
shall be used to fund the Legal Orientation Program or any
successor program.
SEC. 70017. ESTA FEE.
Section 217(h)(3)(B) of the Immigration and Nationality Act
(8 U.S.C. 1187(h)(3)(B)) is amended--
(1) in clause (i)--
(A) in subclause (I), by striking ``and'' at
the end;
(B) in subclause (II)--
(i) by inserting after ``an amount''
the following ``of not less than $10'';
and
(ii) by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following:
``(III) not less than $13.'';
(2) in clause (ii)--
(A) by striking ``Amounts collected under
clause (i)(I)'' and inserting the following:
``(I) In general.--
Notwithstanding any other
provision of law, of the
amounts collected under clause
(i)(I) during a fiscal year,
not more than $20,000,000'';
(B) by inserting before the period at the end
of the first sentence the following: ``, and
the remainder of the amounts collected under
clause (i)(I) shall be credited as offsetting
receipts and deposited in the general fund of
the Treasury''; and
(C) by inserting after ``to pay the costs
incurred to administer the System.'' the
following: ``Amounts collected under clause
(i)(III) shall be credited as offsetting
receipts and deposited in the general fund of
the Treasury.'';
(3) in clause (iii), by striking ``2028'' and
inserting ``2034''; and
(4) by adding at the end the following:
``(iv) Subsequent adjustment.--
Beginning in fiscal year 2026 and each
fiscal year thereafter, the amount
specified in clause (i)(II) for a
fiscal year shall be equal to the sum
of--
``(I) the amount imposed
under this subsection for the
prior fiscal year; and
``(II) the amount referred to
in subclause (I), multiplied by
the percentage (if any) by
which the Consumer Price Index
for All Urban Consumers for the
month of July preceding the
date on which such adjustment
takes effect exceeds the
Consumer Price Index for All
Urban Consumers for the same
month of the preceding calendar
year.''.
SEC. 70018. IMMIGRATION USER FEES.
Section 286 of the Immigration and Nationality Act (8 U.S.C.
1356) is amended--
(1) in subsection (d)--
(A) by striking ``In addition to any other
fee'' and inserting the following:
``(1) In general.--In addition to any other fee'';
(B) by inserting ``and except as provided in
subsection (e),'' before ``the Attorney General
shall charge and collect'';
(C) by striking ``$7'' and inserting ``a fee
in an amount specified in paragraph (2)''; and
(D) by adding at the end the following:
``(2) Initial amount.--For purposes of this section,
the amount specified in this section for fiscal year
2025 shall be not less than $10.
``(3) Subsequent adjustment.--Beginning in fiscal
year 2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
``(A) the amount imposed under this
subsection for the prior fiscal year; and
``(B) rounded to the next lowest multiple of
$0.25, the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
``(4) Crediting of amounts.--Of amounts collected
under this subsection $1 per individual for immigration
inspection or preinspection as described in this
subsection shall be credited as offsetting receipts and
deposited in the general fund of the Treasury.
``(5) No waiver.--A fee imposed under this subsection
shall not be waived or reduced.''; and
(2) in subsection (e)--
(A) by striking paragraph (1);
(B) by redesignating paragraphs (2) and (3)
as paragraphs (1) and (2); and
(C) in paragraph (2) (as redesignated by
subparagraph (B) above), by striking ``The
Attorney General shall charge'' and all that
follows through ``this requirement shall not
apply to'' and inserting the following: ``No
fee shall be charged under subsection (d)
for''.
SEC. 70019. EVUS FEE.
(a) In General.-- In addition to any other fee authorized by
law, the Secretary of Homeland Security shall impose on any
alien subject to the Electronic Visa Update System a fee in the
amount specified in this section at the time of such alien's
enrollment in the Electronic Visa Update System.
(b) Amount.--For purposes of this section, the amount
specified in this section for fiscal year 2025 shall be such
amount as the Secretary may by rule provide, but in any event
not less than $30.
(c) Subsequent Adjustment.--Beginning in fiscal year 2026 and
each fiscal year thereafter, the amount specified in this
section for a fiscal year shall be equal to the sum of--
(1) the amount imposed under this section for the
prior fiscal year; and
(2) rounded to the next lowest multiple of $0.25, the
amount referred to in paragraph (1), multiplied by the
percentage (if any) by which the Consumer Price Index
for All Urban Consumers for the month of July preceding
the date on which such adjustment takes effect exceeds
the Consumer Price Index for All Urban Consumers for
the same month of the preceding calendar year.
(d) Crediting of Funds.--
(1) In general.--The fees received under this section
shall be deposited into the CBP Electronic Visa Update
System Account, less $5 per enrollment which shall be
credited as offsetting receipts and deposited into the
general fund of the Treasury.
(2) Establishment.--Notwithstanding any other
provision of law, there is hereby established in the
Treasury of the United States a separate account which
shall be known as the ``CBP Electronic Visa Update
System Account''.
(3) Appropriation.-- Amounts deposited in the CBP
Electronic Visa Update System Account are hereby
appropriated to make payments and offset program costs
as specified in this section without further
appropriation necessary and shall remain available
until expended for any U.S. Customs and Border
Protection costs associated with administering the
Electronic Visa Update System.
(e) No Waiver.--A fee imposed under this section shall not be
waived or reduced.
SEC. 70020. FEE FOR SPONSOR OF UNACCOMPANIED ALIEN CHILD WHO FAILS TO
APPEAR IN IMMIGRATION COURT.
(a) Fee Imposed.--In addition to any other fee authorized by
law, for the sponsor of an unaccompanied alien child, the
Secretary of Health and Human Services shall impose a fee in an
amount specified in subsection (b) prior to the unaccompanied
alien child's release to such sponsor.
(b) Fee Specified.--
(1) Initial amount.--The amount specified in this
subsection for fiscal year 2025 shall be such amount as
the Secretary may by rule provide, but in any event not
less than $5,000.
(2) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
(A) the amount imposed under this subsection
for the prior fiscal year; and
(B) rounded to the next lowest multiple of
$10, the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(c) Fee Reimbursement.--At the conclusion of an unaccompanied
alien child's immigration court proceedings as an unaccompanied
alien child, or upon the ending of such sponsor's sponsorship
of such unaccompanied alien child, the Secretary of Health and
Human Services may reimburse to a sponsor a fee imposed under
this section if such sponsor demonstrates that the
unaccompanied alien child in the care of such sponsor was not
ordered removed in absentia under section 240(b)(5) of the
Immigration and Nationality Act. In the case of a sponsor of an
unaccompanied alien child who was ordered removed in absentia
and such order was rescinded under section 240(b)(5)(C) of the
Immigration and Nationality Act, the sponsor may seek
reimbursement of the fee under this section.
(d) Crediting of Funds.--The fees received under this section
shall be credited as offsetting receipts and deposited into the
general fund of the Treasury.
(e) No Waiver.--A fee imposed under this subsection shall not
be waived or reduced.
SEC. 70021. FEE FOR ALIENS ORDERED REMOVED IN ABSENTIA.
(a) In General .--As partial reimbursement for the cost of
arresting an alien described in this section, the Secretary of
Homeland Security shall impose a fee in an amount specified in
this section on any alien who--
(1) is ordered removed in absentia under section
240(b)(5) of the Immigration and Nationality Act (8
U.S.C. 1229a(b)(5)); and
(2) is subsequently arrested by U.S. Immigration and
Customs Enforcement.
(b) Initial Amount.--For purposes of this subsection, the
amount specified in this subsection for fiscal year 2025 shall
be such amount as the Secretary may by rule provide, but in any
event not less than $5,000.
(c) Subsequent Adjustment.--Beginning in fiscal year 2026 and
each fiscal year thereafter, the amount for a fiscal year shall
be equal to the sum of--
(1) the amount imposed under this section for the
prior fiscal year; and
(2) rounded to the next lowest multiple of $10, the
amount referred to in paragraph (1), multiplied by the
percentage (if any) by which the Consumer Price Index
for All Urban Consumers for the month of July preceding
the date on which such adjustment takes effect exceeds
the Consumer Price Index for All Urban Consumers for
the same month of the preceding calendar year.
(d) Crediting of Funds.--The fees received under this section
shall be credited as offsetting receipts and deposited into the
general fund of the Treasury.
(e) No Waiver.--A fee imposed under this subsection shall not
be waived or reduced.
(f) Exception.--The fee described in this section shall not
apply to any alien who was ordered removed in absentia if such
order was rescinded under section 240(b)(5)(C) of the
Immigration and Nationality Act.
SEC. 70022. CUSTOMS AND BORDER PROTECTION INADMISSIBLE ALIEN
APPREHENSION FEE.
(a) Fee Imposed.--In addition to any other fee authorized by
law, for any inadmissible alien who is apprehended between
ports of entry by U.S. Customs and Border Protection, the
Secretary of Homeland Security shall impose a fee in an amount
specified in subsection (b) at the time of such apprehension.
(b) Fee Specified.--
(1) Initial amount.--The amount specified in this
subsection for fiscal year 2025 shall be such amount as
the Secretary may by rule provide, but in any event not
less than $5,000.
(2) Subsequent adjustment.--Beginning in fiscal year
2026 and each fiscal year thereafter, the amount
specified in this subsection for a fiscal year shall be
equal to the sum of--
(A) the amount imposed under this subsection
for the prior fiscal year; and
(B) rounded to the next lowest multiple of
$10, the amount referred to in subparagraph
(A), multiplied by the percentage (if any) by
which the Consumer Price Index for All Urban
Consumers for the month of July preceding the
date on which such adjustment takes effect
exceeds the Consumer Price Index for All Urban
Consumers for the same month of the preceding
calendar year.
(c) Crediting of Funds.--The fees received under this section
shall be credited as offsetting receipts and deposited into the
general fund of the Treasury.
(d) No Waiver.--A fee imposed under this section shall not be
waived or reduced.
SEC. 70023. AMENDMENT TO AUTHORITY TO APPLY FOR ASYLUM.
Section 208(d)(3) of the Immigration and Nationality Act (8
U.S.C. 1158(d)(3)) is amended--
(1) in the first sentence, by striking ``may'' and
inserting ``shall'';
(2) by striking ``Such fees shall not exceed'' and
all that follows; and
(3) by inserting after the first sentence ``Nothing
in this paragraph shall be construed to limit the
authority of the Attorney General to set additional
adjudication and naturalization fees in accordance with
section 286(m).''.
PART 2--USE OF FUNDS
SEC. 70100. EXECUTIVE OFFICE FOR IMMIGRATION REVIEW.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Executive Office for
Immigration Review for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $1,250,000,000 to
remain available until September 30, 2029, for the purposes
described in subsection (b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used for purposes of--
(1) hiring the support staff necessary to support
immigration judges;
(2) hiring immigration judges; and
(3) expanding courtroom capacity and infrastructure.
SEC. 70101. ADULT ALIEN DETENTION CAPACITY AND FAMILY RESIDENTIAL
CENTERS.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $45,000,000,000 to
remain available until September 30, 2029, for the purposes
described in subsection (b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used for family residential center capacity
and single adult alien detention capacity.
(c) Duration.--The Department of Homeland Security may detain
family units of aliens at family residential centers, as
described in subsections (b) and (d), pending a decision on
whether the aliens are to be removed from the United States
and, if such aliens are ordered removed from the United States,
until such aliens are removed.
(d) Family Residential Center Defined.--In this section, the
term ``family residential center'' means a facility used by the
Department of Homeland Security to detain family units of
aliens (including alien children who are not unaccompanied
alien children) who are encountered or apprehended by the
Department of Homeland Security, regardless of whether the
facility is licensed by the State or a political subdivision of
the State in which the facility is located.
(e) Detention Standards.--To efficiently utilize the funding
appropriated by this section, the detention standards for the
single adult detention capacity described in subsection (b)
shall be set in the sole discretion of the Secretary of
Homeland Security.
SEC. 70102. RETENTION AND SIGNING BONUSES FOR U.S. IMMIGRATION AND
CUSTOMS ENFORCEMENT PERSONNEL.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $858,000,000 to remain
available until September 30, 2029, for the purposes described
in subsections (b) and (c).
(b) Retention Bonuses.--U.S. Immigration and Customs
Enforcement may provide retention bonuses to any U.S.
Immigration and Customs Enforcement agent, officer, or attorney
who commits to two years of additional service with U.S.
Immigration and Customs Enforcement to carry out immigration
enforcement.
(c) Signing Bonuses.--U.S. Immigration and Customs
Enforcement shall provide a signing bonus to each U.S.
Immigration and Customs Enforcement agent, officer, or attorney
who is hired on or after the date of enactment of this Act and
who commits to five years of service with U.S. Immigration and
Customs Enforcement to carry out immigration enforcement.
(d) Rules for Bonuses.--U.S. Customs and Immigration
Enforcement shall provide qualifying individuals with written
service agreements that include--
(1) the commencement and termination dates of the
required service period (or provisions for the
determination thereof);
(2) the amount of the bonus; and
(3) other terms and conditions under which the bonus
is payable, subject to the requirements of this
subsection, including--
(A) the conditions under which the agreement
may be terminated before the agreed-upon
service period has been completed; and
(B) the effect of a termination described in
subparagraph (A).
SEC. 70103. HIRING OF ADDITIONAL U.S. IMMIGRATION AND CUSTOMS
ENFORCEMENT PERSONNEL.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $8,000,000,000, to
remain available until September 30, 2029, for the purposes
described in subsection (b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used to hire additional personnel of U.S.
Immigration and Customs Enforcement, including officers,
agents, and support staff, to carry out immigration
enforcement, and to prioritize and streamline the hiring of
retired U.S. Immigration and Customs Enforcement personnel.
There shall be a minimum of--
(1) 2,500 individuals hired in fiscal year 2025;
(2) 1,875 individuals hired in 2026;
(3) 1,875 individuals hired in 2027;
(4) 1,875 individuals hired in 2028; and
(5) 1,875 individuals hired in 2029.
SEC. 70104. U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT HIRING CAPABILITY.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $600,000,000, to
remain available until September 30, 2029, for the purpose
described in subsection (b).
(b) Use of Funds.--The funds made available under subsection
(a) shall only be used for the purpose of facilitating the
recruitment, hiring, and onboarding of additional U.S.
Immigration and Customs Enforcement personnel to carry out
immigration enforcement, including by investments in
information technology, recruitment, marketing, and staff
necessary for such activities.
SEC. 70105. TRANSPORTATION AND REMOVAL OPERATIONS.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $14,400,000,000, to
remain available until September 30, 2029, for the purposes
described in subsection (b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used for transportation and removal
operations, including transportation of unaccompanied alien
children, and for ensuring the departure of aliens.
SEC. 70106. INFORMATION TECHNOLOGY INVESTMENTS.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $700,000,000 to remain
available until September 30, 2029, for the purposes described
in subsection (b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used for U.S. Immigration and Customs
Enforcement information technology investments to support
enforcement and removal operations, including to streamline
fine and penalty collections.
SEC. 70107. FACILITIES UPGRADES.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $550,000,000 to remain
available until September 30, 2029, for the purposes described
in subsection (b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used for U.S. Immigration and Customs
Enforcement facility upgrades to support enforcement and
removal operations.
SEC. 70108. FLEET MODERNIZATION.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $250,000,000 to remain
available until September 30, 2029, for the purposes described
in subsection (b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used for U.S. Immigration and Customs
Enforcement fleet modernization to support enforcement and
removal operations.
SEC. 70109. PROMOTING FAMILY UNITY.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $20,000,000 to remain
available until September 30, 2029, for the purposes described
in subsection (b).
(b) Use of Funds.--The funds made available under subsection
(a) shall only be used to--
(1) maintain the care and custody, during the period
in which the charges described in subparagraph (A) are
pending, of an alien who--
(A) is charged only with a misdemeanor
offense under section 275(a) of the Immigration
and Nationality Act (8 U.S.C. 1325(a)); and
(B) entered the United States with the
alien's child who has not attained 18 years of
age; and
(2) detain the alien with the alien's child.
SEC. 70110. FUNDING SECTION 287(G) OF THE IMMIGRATION AND NATIONALITY
ACT.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $650,000,000, to
remain available until September 30, 2029, for the purposes
described in subsection (b).
(b) Use of Funds.--The amounts made available under
subsection (a) shall only be used for purposes of facilitating
and implementing agreements under section 287(g) of the
Immigration and Nationality Act (8 U.S.C. 1357(g)).
SEC. 70111. COMPENSATION FOR INCARCERATION OF CRIMINAL ALIENS.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Department of Justice
for fiscal year 2025, out of any money in the Treasury not
otherwise appropriated, $950,000,000, to remain available until
September 30, 2029, for the purposes described in subsection
(b).
(b) Use of Funds.--The amounts made available under
subsection (a) shall only be used to compensate a State or
political subdivision of a State, as may be appropriate, with
respect to the incarceration of any alien who--
(1) has been convicted of a felony or two or more
misdemeanors; and
(2)(A) entered the United States without inspection
or at any time or place other than as designated by the
Secretary of Homeland Security;
(B) was the subject of removal proceedings at the
time he or she was taken into custody by the State or a
political subdivision of the State; or
(C) was admitted as a nonimmigrant and, at the time
he or she was taken into custody by the State or a
political subdivision of the State, has failed to
maintain the nonimmigrant status in which the alien was
admitted, or to which it was changed, or to comply with
the conditions of any such status.
(c) Limitation.--The amounts made available under subsection
(a) shall not be used to compensate any State or political
subdivision of the State if the State or political subdivision
of the State prohibits or in any way restricts a Federal,
State, or local government entity, official, or other personnel
from any of the following:
(1) Complying with the immigration laws (as defined
in section 101(a)(17) of the Immigration and
Nationality Act (8 U.S.C. 1101(a)(17)).
(2) Assisting or cooperating with Federal law
enforcement entities, officials, or other personnel
regarding the enforcement of the immigration laws.
(3) Undertaking any one of the following law
enforcement activities as they relate to information
regarding the citizenship or immigration status, lawful
or unlawful, the inadmissibility or deportability, and
the custody status, of any individual:
(A) Making inquiries to any individual to
obtain such information regarding such
individual or any other individuals.
(B) Notifying the Federal Government
regarding the presence of individuals who are
encountered by law enforcement officials or
other personnel of a State or political
subdivision of a State.
(C) Complying with requests for such
information from Federal law enforcement
entities, officials, or other personnel.
SEC. 70112. OFFICE OF THE PRINCIPAL LEGAL ADVISOR.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $1,320,000,000 to
remain available until September 30, 2029, for the purposes
described in subsection (b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used for purposes of hiring additional
support staff and attorneys within the Office of the Principal
Legal Advisor to represent the Department of Homeland Security
in removal proceedings.
SEC. 70113. RETURN OF ALIENS ARRIVING FROM CONTIGUOUS TERRITORY.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Department of Homeland
Security for fiscal year 2025, out of any money in the Treasury
not otherwise appropriated, $500,000,000 to remain available
until September 30, 2029, for the purposes described in
subsection (b).
(b) Use of Funds.--The funds made available under subsection
(a) shall only be used for purposes of return of aliens under
section 235(b)(2)(C) of the Immigration and Nationality Act (8
U.S.C. 1225(b)(2)(C)).
SEC. 70114. STATE AND LOCAL PARTICIPATION IN HOMELAND SECURITY EFFORTS.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Immigration and
Customs Enforcement for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $787,000,000, to
remain available until September 30, 2029, for the purpose
described in subsection (b).
(b) Use of Funds.--The funds made available under subsection
(a) shall only be used for the purpose of ending the presence
of criminal gangs and transnational criminal organizations
throughout the United States, combating human smuggling and
trafficking networks, supporting immigration enforcement
activities, and providing reimbursement for State and local
participation in such efforts.
SEC. 70115. UNACCOMPANIED ALIEN CHILDREN CAPACITY.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Office of Refugee
Resettlement for fiscal year 2025, out of any money in the
Treasury not otherwise appropriated, $3,000,000,000 to remain
available until September 30, 2029, for the purposes described
in subsection (b).
(b) Use of Funds.--The funds made available under subsection
(a) shall only be used for the Office of Refugee Resettlement
to house, transport, and supervise unaccompanied alien children
in the custody of the Office of Refugee Resettlement pursuant
to section 235 of the William Wilberforce Trafficking Victims
Protection Reauthorization Act of 2008.
SEC. 70116. DEPARTMENT OF HOMELAND SECURITY CRIMINAL AND GANG CHECKS
FOR UNACCOMPANIED ALIEN CHILDREN.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to U.S. Customs and Border
Protection for fiscal year 2025, out of any money in the
Treasury not otherwise appropriated, $20,000,000, to remain
available until September 30, 2029, for the purposes described
in subsection (b).
(b) Use of Funds.--In the case of an unaccompanied alien
child who has attained 12 years of age and is encountered by
U.S. Customs and Border Protection, the funds made available
under subsection (a) shall only be used to--
(1) contact the consulate or embassy of the country
of nationality or last habitual residence of such
unaccompanied alien child to request such unaccompanied
alien child's criminal record; and
(2) conduct an examination of such unaccompanied
alien child for gang-related tattoos and other gang-
related markings,
(c) Unaccompanied Alien Child Defined.--In this section, the
term ``unaccompanied alien child'' shall have the meaning given
such term in section 462(g) of the Homeland Security Act of
2002.
SEC. 70117. DEPARTMENT OF HEALTH AND HUMAN SERVICES CRIMINAL AND GANG
CHECKS FOR UNACCOMPANIED ALIEN CHILDREN.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Office of Refugee
Resettlement for fiscal year 2025, out of any money in the
Treasury not otherwise appropriated, $20,000,000, to remain
available until September 30, 2029, for the purposes described
in subsection (b).
(b) Use of Funds.--In the case of each unaccompanied alien
child who has attained 12 years of age, the funds made
available under subsection (a) shall only be used for the
purpose of making a determination pursuant to section
235(c)(2)(A) of the William Wilberforce Trafficking Victims
Protection Reauthorization Act of 2008 about whether an
unaccompanied alien child poses a danger to self or others or
has been charged with having committed a criminal offense, to--
(1) contact the consulate or embassy of such
unaccompanied alien child's country of nationality or
last habitual residence to request such unaccompanied
alien child's criminal record; and
(2) conduct an examination of the unaccompanied alien
child for gang-related tattoos and other gang-related
markings.
(c) Unaccompanied Alien Child Defined.--In this section, the
term ``unaccompanied alien child'' shall have the meaning given
such term in section 462(g) of the Homeland Security Act of
2002.
SEC. 70118. INFORMATION ABOUT SPONSORS AND ADULT RESIDENTS OF SPONSOR
HOUSEHOLDS.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Office of Refugee
Resettlement for fiscal year 2025, out of any money in the
Treasury not otherwise appropriated, $50,000,000, to remain
available until September 30, 2029, for the purposes described
in subsection (b).
(b) Information About Individuals With Whom Unaccompanied
Alien Children Are Placed and Reside.--Before placing an
unaccompanied alien child with an individual pursuant to
section 235(c) of the William Wilberforce Trafficking Victims
Protection Reauthorization Act of 2008, the Secretary of Health
and Human Services shall provide to the Secretary of Homeland
Security, regarding the individual with whom the child will be
placed and all adult residents of the individual's household,
information on--
(1) the name of the individual and all adult
residents of the individual's household;
(2) the social security number of the individual and
all adult residents of the individual's household;
(3) the date of birth of the individual and all adult
residents of the individual's household;
(4) the validated location of the individual's
residence where the child will be placed;
(5) the immigration status of the individual and all
adult residents of the individual's household;
(6) contact information for the individual and all
adult residents of the individual's household; and
(7) the results of all background and criminal
records checks for the individual and all adult
residents of the individual's household, which shall
include at a minimum an investigation of the public
records sex offender registry, a public records
background check, and a national criminal history check
based on fingerprints.
(c) Unaccompanied Alien Child Defined.--In this section, the
term ``unaccompanied alien child'' shall have the meaning given
such term in section 462(g) of the Homeland Security Act of
2002.
SEC. 70119. REPATRIATION OF UNACCOMPANIED ALIEN CHILDREN.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Department of Homeland
Security for fiscal year 2025, out of any money in the Treasury
not otherwise appropriated, $100,000,000, to remain available
until September 30, 2029, for the purposes described in
subsection (b).
(b) Use of Funds.--Notwithstanding any other provision of
law, the funds made available under subsection (a) shall only
be used to permit a specified unaccompanied alien child to
withdraw the child's application for admission pursuant to
section 235(a)(4) of the Immigration and Nationality Act and
return such child to the child's country of nationality or
country of last habitual residence.
(c) Definitions.--In this section--
(1) Specified unaccompanied alien child.--The term
``specified unaccompanied alien child'' means an
unaccompanied alien child (as defined in section 462(g)
of the Homeland Security Act of 2002) who the Secretary
of Homeland Security determines on a case-by-case
basis--
(A) has been found by an immigration officer
at a land border or port of entry of the United
States and is inadmissible under the
Immigration and Nationality Act;
(B) has not been a victim of severe forms of
trafficking in persons, and there is no
credible evidence that such child is at risk of
being trafficked upon return to the child's
country of nationality or of last habitual
residence; and
(C) does not have a fear of returning to the
child's country of nationality or of last
habitual residence owing to a credible fear of
persecution.
(2) Severe forms of trafficking in persons.--The term
``severe forms of trafficking in persons'' shall have
the meaning given such term in section 103 of the
Trafficking Victims Protection Act of 2000.
SEC. 70120. UNITED STATES SECRET SERVICE.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Director of the United
States Secret Service for fiscal year 2025, out of any money in
the Treasury not otherwise appropriated, $1,170,000,000 to
remain available until September 30, 2029, for the purposes
described in subsection (b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used for additional United States Secret
Service resources, including personnel, training facilities,
and technology.
SEC. 70121. COMBATING DRUG TRAFFICKING AND ILLEGAL DRUG USE.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Department of Justice
for fiscal year 2025, out of any money in the Treasury not
otherwise appropriated, $500,000,000 to remain available until
September 30, 2029, for the purposes described in subsection
(b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used for efforts to combat drug trafficking,
including of fentanyl and its precursor chemicals, and illegal
drug use.
SEC. 70122. INVESTIGATING AND PROSECUTING IMMIGRATION RELATED MATTERS.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Department of Justice
for fiscal year 2025, out of any money in the Treasury not
otherwise appropriated, $600,000,000, to remain available until
September 30, 2029, for the purposes described in subsection
(b).
(b) Use of Funds.--Amounts made available under subsection
(a) shall only be used to investigate and prosecute immigration
matters, gang-related crimes involving aliens, child
trafficking and smuggling involving aliens, voting by aliens,
violations of the Alien Registration Act, and violations of or
fraud relating to title IV of the Personal Responsibility and
Work Opportunity Act of 1996, including through hiring
Department of Justice personnel to investigate and prosecute
such matters.
SEC. 70123. EXPEDITED REMOVAL FOR CRIMINAL ALIENS.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Department of Homeland
Security for fiscal year 2025, out of any money in the Treasury
not otherwise appropriated, $75,000,000, to remain available
until September 30, 2029, for the purposes described in
subsection (b).
(b) Use of Funds.--The amounts made available in subsection
(a) shall only be used for applying the provisions of section
235(b)(1) of the Immigration and Nationality Act to any alien
who is inadmissible under paragraph (2) or (3) of section
212(a) of the Immigration and Nationality Act, regardless of
the period that such alien has been physically present in the
United States.
SEC. 70124. REMOVAL OF CERTAIN CRIMINAL ALIENS WITHOUT FURTHER HEARING.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Department of Homeland
Security for fiscal year 2025, out of any money in the Treasury
not otherwise appropriated, $25,000,000, to remain available
until September 30, 2029, for the purposes described in
subsection (b).
(b) Use of Funds.--The amounts made available in subsection
(a) shall only be used for applying the provisions of section
235(c) of the Immigration and Nationality Act to any arriving
alien that an immigration officer or an immigration judge
suspects may be inadmissible under paragraph (2) or (3) of
section 212(a) of the Immigration and Nationality Act.
Subtitle B--Regulatory Matters
SEC. 70200. REVIEW OF AGENCY RULEMAKING.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated:
(1) To the Director of the Office of Management and
Budget for fiscal year 2025, out of any money in the
Treasury not otherwise appropriated, $10,000,000, to
remain available through September 30, 2034, to carry
out this section and the amendments made by this
section.
(2) To the Comptroller General of the United States
for fiscal year 2025, out of any money in the Treasury
not otherwise appropriated, $10,000,000, to remain
available through September 30, 2034, to carry out this
section and the amendments made by this section.
(b) Use of Funds.--
(1) Office of management and budget.--The Director of
the Office of Management and Budget shall use amounts
made available under subsection (a)(1) to pay expenses
associated with implementing the requirements of
subsections (c) and (d).
(2) Comptroller general.--The Comptroller General of
the United States shall use amounts made available
under subsection (a)(2) to pay expenses associated with
implementing the requirements of subsection (e).
(c) Congressional Review of Agency Rulemaking.--
(1) Chapter 8 of title 5, United States Code, is
amended by inserting at the end the following:
``Sec. 809. Additional reporting requirements
``(a) Agency Reports.--In the case of any rule for which a
report is submitted under section 801(a)(1)(A) the agency shall
also include in such report--
``(1) an estimate of the budgetary effects associated
with the enactment and enforcement of the rule;
``(2) an analysis of the direct and reasonably
foreseeable indirect costs associated with the rule;
``(3) an analysis of any jobs added or lost within
each affected industry, as identified by North American
Industrial Classification System code, differentiating
between public and private sector jobs, as a direct or
indirect result of the rule;
``(4) a determination, by the Administrator of the
Office of Information and Regulatory Affairs of the
Office of Management and Budget, of whether the rule is
a major or nonmajor rule, including an explanation of
the finding specifically addressing each criteria for a
major rule contained within subparagraphs (A) through
(C) of section 804(2);
``(5) a list of information on which the rule is
based, including data, scientific and economic studies,
and cost-benefit analyses;
``(6) a list of any other related regulatory actions
that implement the same statutory provision or
regulatory objective as well as the estimated economic
effects of those actions;
``(7) an estimate of the effect on inflation of the
rule; and
``(8) a statement of the constitutional authority
authorizing the agency to make the rule.
``(b) Comptroller General Reports.--If requested in writing
by a Member of Congress--
``(1) the Comptroller General of the United States
shall make a determination whether an agency action
qualifies as a rule for purposes of this chapter, and
shall submit to Congress this determination not later
than 60 days after the date of the request; and
``(2) the Comptroller General shall make a
determination whether a rule is considered a major rule
for purposes of this chapter, and shall submit to
Congress this determination not later than 90 days
after the date of the request.
``(c) Determination.--For purposes of this section, a
determination under this subsection (b) shall be deemed to be a
report under section 801(a)(1)(A).
``Sec. 810. Approval of certain major rules
``(a) Approval Required.--Notwithstanding any other provision
of this chapter, a major rule that increases revenues, as
determined in section 809(a), shall not take effect unless
Congress enacts a joint resolution of approval described in
subsection (c).
``(b) Effect.--If a joint resolution of approval relating to
a major rule that increases revenue is not enacted into law by
the end of 60 session days or legislative days, as applicable,
beginning on the date on which the report referred to in
section 801(a)(1)(A) is received by Congress (excluding days
either House of Congress is adjourned for more than 3 days
during a session of Congress), then the rule described in that
resolution shall be deemed not to be approved and such rule
shall not take effect.
``(c) Resolution of Approval.--Section 802 shall apply to a
joint resolution of approval under this section to the same
extent as it does to a joint resolution of disapproval, except
that the matter after the resolving clause of a joint
resolution of approval shall be as follows: `That Congress
approves the rule submitted by the _____ relating to _____.'
(The blank spaces being appropriately filled in).
``(d) Rulemaking Authority.--The enactment of a joint
resolution of approval under this section shall not be
interpreted to serve as a grant or modification of statutory
authority by Congress for the promulgation of a rule, shall not
extinguish or affect any claim, whether substantive or
procedural, against any alleged defect in a rule or the
rulemaking process, and shall not form part of the record
before the court in any judicial proceeding concerning a rule
except for purposes of determining whether or not the rule is
in effect.
``(e) Judicial Review.--Notwithstanding section 805, a court
may determine whether a Federal agency has completed the
necessary requirements under this chapter for a rule to take
effect.
``Sec. 811. Additional review of rules
``(a) Additional Review.--In addition to the opportunity for
review otherwise provided under this chapter, notwithstanding
any other provision under this chapter, in the case of any rule
for which a report is submitted under section 801(a)(1)(A)
which increases revenue as determined under section 809(a) and
which was submitted during the final year of a President's
term, the procedures described in section 802 shall apply to
such rule in the succeeding session of Congress, and a joint
resolution may contain one or more such rules.
``(b) Resolution of Disapproval.--In the case of such a
resolution containing one or more such rules under this
section, the matter after the resolving clause shall be as
follows: `That Congress disapproves the following rules: the
rule submitted by the __ relating to __; and the rule submitted
by the __ relating to __. Such rules shall have no force or
effect.' (The blank spaces being appropriately filled in and
additional clauses describing additional rules to be included
as necessary).
``Sec. 812. Review of rules currently in effect
``(a) Annual Review.--Beginning on the date that is 6 months
after the date of enactment of this section and annually
thereafter for the 4 years following, each agency shall
designate not less than 20 percent of eligible rules made by
that agency for review, and shall submit a report including
each such eligible rule in the same manner as a report under
section 801(a)(1). Sections 801, 802, 809, 810, and 811 shall
apply to each such rule, subject to subsection (c) of this
section. No eligible rule previously designated may be
designated again.
``(b) Sunset for Eligible Rules Not Extended.--Beginning
after the date that is 5 years after the date of enactment of
this section, if Congress has not enacted a joint resolution of
approval for that eligible rule, that eligible rule shall not
continue in effect.
``(c) Approval of Rules.--
``(1) Unless Congress approves all eligible rules
designated by executive agencies for review within 90
days after designation, they shall have no effect and
the Federal agency which originally promulgated such
rules may not enforce such rules.
``(2) A single joint resolution of approval shall
apply to all eligible rules in a report designated for
a year as follows: `That Congress approves the rules
submitted by the___ for the year ___.' (The blank
spaces being appropriately filled in).
``(d) Definition.--In this section the term `eligible rule'
means a rule that is in effect as of the date of enactment of
this section.''.
(2) The table of chapters for chapter 8 of title 5,
United States Code, is amended by inserting after the
item relating to section 808 the following:
``809. Additional reporting requirements.
``810. Approval of certain major rules.
``811. Additional review of rules.
``812. Review of rules currently in effect.''.
(d) Technical and Conforming Amendments.--Chapter 8 of title
5, United States Code, is amended--
(1) in section 801(a)(3)--
(A) in subparagraph (B)(ii), by striking
``or'' at the end;
(B) in subparagraph (C), by striking the
period at the end and inserting ``; or''; and
(C) by inserting at the end the following:
``(D) in the case of a major rule that
increases revenue, such rule shall not take
effect unless Congress passes a joint
resolution of approval described in section
810.''; and
(2) in section 804, by amending paragraph (3) to read
as follows:
``(3) The term `rule' has the meaning given such term
in section 551, except that such term--
``(A) includes interpretative rules, general
statements of policy, and all other agency
guidance documents; and
``(B) does not include--
``(i) any rule of particular
applicability, including a rule that
approves or prescribes for the future
rates, wages, prices, services, or
allowances therefore, corporate or
financial structures, reorganizations,
mergers, or acquisitions thereof, or
accounting practices or disclosures
bearing on any of the foregoing;
``(ii) any rule relating to agency
management or personnel; or
``(iii) any rule of agency
organization, procedure, or practice
that does not substantially affect the
rights or obligations of nonagency
parties.''.
(e) Government Accountability Office Study of Rules.--
(1) In general.--The Comptroller General of the
United States shall conduct a study to determine, as of
the date of the enactment of this section--
(A) how many rules (as such term is defined
in section 804 of title 5, United States Code)
were in effect;
(B) how many major rules (as such term is
defined in section 804 of title 5, United
States Code) were in effect; and
(C) the total estimated economic cost imposed
by all such rules.
(2) Report.--Not later than 1 year after the date of
the enactment of this section, the Comptroller General
of the United States shall submit a report (and publish
the report on the website of the Comptroller General)
to Congress that contains the findings of the study
conducted under subsection (e).
SEC. 70201. CONGRESSIONAL REVIEW ACT COMPLIANCE.
(a) Appropriation.--In addition to amounts otherwise
available, there is appropriated to the Director of the Office
of Management and Budget for fiscal year 2025, out of any money
in the Treasury not otherwise appropriated, $10,000,000, to
remain available through September 30, 2034, to carry out this
section.
(b) Analysis.--The Administrator of the Office of Information
and Regulatory Affairs of the Office of Management and Budget
shall use amounts appropriated under this section to conduct de
novo analysis of the direct and reasonably foreseeable indirect
costs of compliance associated with rules submitted under
section 801(a)(1)(A) of title 5, United States Code. The
Administrator shall use such analysis as the basis for
determining whether a rule is a major rule and publish each
such analysis to the regulatory review database of the Office
of Information and Regulatory Affairs prior to transmission of
such rule to each House of the Congress and the Comptroller
General of the United States. The Administrator shall also
publish an estimate of the budgetary effects associated with
the promulgation and enforcement of such rules prior to
transmission.
Subtitle C--Other Matters
SEC. 70300. LIMITATION ON DONATIONS MADE PURSUANT TO SETTLEMENT
AGREEMENTS TO WHICH THE UNITED STATES IS A PARTY.
(a) Limitation on Required Donations.--An official or agent
of the Government may not enter into or enforce any settlement
agreement on behalf of the United States directing or providing
for a payment to any person or entity other than the United
States, other than a payment that provides restitution for or
otherwise directly remedies actual harm (including to the
environment) directly and proximately caused by the party
making the payment, or constitutes payment for services
rendered in connection with the case.
(b) Penalty.--Any official or agent of the Government who
violates subsection (a) shall be subject to the same penalties
that would apply in the case of a violation of section 3302 of
title 31, United States Code.
(c) Effective Date.--Subsections (a) and (b) apply only in
the case of a settlement agreement entered on or after the date
of enactment of this Act.
(d) Definition.--The term ``settlement agreement'' means a
settlement agreement resolving a civil action or potential
civil action.
(e) Annual Audit Requirement.--
(1) In general.--Not later than at the end of the
first fiscal year that begins after the date of
enactment of this Act, and annually thereafter, the
Inspector General of each Federal agency shall submit,
and make available on a publicly accessible website, a
report on any settlement agreement entered into in
violation of this section by that agency to--
(A) the Committee on the Judiciary of the
Senate; and
(B) the Committee on the Judiciary of the
House of Representatives.
(2) Prohibition on additional funding.--No additional
funds are authorized to be appropriated to carry out
this subsection.
SEC. 70301. SOLICITATION OF ORDERS DEFINED.
Section 101(d) of Public Law 86--272 (73 Stat. 555) is
amended--
(1) in paragraph (1) by striking ``and'' at the end,
(2) in paragraph (2) by striking the period at the
end and inserting ``; and'', and
(3) by adding at the end the following:
``(3) the term `solicitation of orders' means any
business activity that facilitates the solicitation of
orders even if that activity may also serve some
independently valuable business function apart from
solicitation.''.
SEC. 70302. RESTRICTION OF FUNDS.
No court of the United States may use appropriated funds to
enforce a contempt citation for failure to comply with an
injunction or temporary restraining order if no security was
given when the injunction or order was issued pursuant to
Federal Rule of Civil Procedure 65(c), whether issued prior to,
on, or subsequent to the date of enactment of this section.
Purpose and Summary
The Committee on the Judiciary's budget reconciliation
provisions provide funding to effectuate President Trump's
immigration enforcement agenda and creates a series of
immigration-related fees. The Committee's recommendations also
include a series of funds that will allow the Trump
Administration to enact its regulatory reform agenda and make
agencies more efficient and effective.
Background and Need for the Legislation
IMMIGRATION FUNDS
The Committee's budget reconciliation provisions include a
series of funds that provide resources to various agencies.
DEPARTMENT OF HOMELAND SECURITY
U.S. Immigration and Customs Enforcement
In just four years, the Biden-Harris Administration allowed
8 million illegal aliens into the United States, including at
least 6 million illegal aliens who were released into American
communities, while nearly 2 million illegal alien ``gotaways''
evaded Customs and Border Protection (CBP) at the southwest
border.\1\ At the same time, the number of aliens in the U.S.
with final orders of removal grew to nearly 1.5 million.\2\ For
four years, untold scores of otherwise removable aliens were
allowed to remain in the United States because the previous
Administration did not classify them as ``priorities'' for
removal.\3\
---------------------------------------------------------------------------
\1\Info. provided to the H. Comm. on the Judiciary by U.S. Dep't of
Homeland Sec., Table 1: Detention Histories of CBP Encounters, January
20, 2021-March 31, 2024 (Aug. 16, 2024); U.S. Customs and Border Prot.,
Custody and Transfer Statistics, U.S. Dep't of Homeland Sec. (last
accessed Jan. 6, 2025); Camilo Montoya-Galvez, Biden administration has
admitted more than 1 million migrants into U.S. under parole policy
Congress is considering restricting, CBS News (Jan. 22, 2024); Latest
UC Data, Total Monthly Discharges to Individual Sponsors Only, U.S.
Dep't of Health and Human Servs. (last accessed Mar. 22, 2024); Off. of
Refugee Resettlement, Unaccompanied Children Released to Sponsors by
State, U.S. Dep't of Health and Human Servs. (last accessed Jan 15,
2025); U.S. Customs and Border Prot., CBP Releases December 2024
Monthly Update, U.S. Dep't of Homeland Sec. (Jan. 14, 2025); Immigr.
and Customs Enf't, Daily SWB Placemat, U.S. Dep't of Homeland Sec. (May
2024-Jan. 2025) (on file with Comm.); Off. of Homeland Sec. Statistics,
Immigr. Enf't and Legal Processes Monthly Tables--Apr. 2024, U.S. Dep't
of Homeland Sec. (last accessed Aug. 19, 2024); Casey Harper, Border
crisis creates national security threat for U.S., observers say, Wash.
Examiner (Aug. 7, 2023); Bill Melugin (@BillMelugin_), X (June 20,
2024, 10:22 AM).
\2\Info. provide to the H. Comm. on the Judiciary by U.S. Immigr.
and Customs Enf't., Table 1: Noncitizens on the ICE Non-Detained Docket
with Final Orders of Removal by Country of Citizenship (Dec. 10, 2024).
\3\See Memorandum from Alejandro N. Mayorkas, Sec'y, Dep't of
Homeland Sec., to Tae Johnson, Acting Dir., U.S. Immigr. and Customs
Enf't, et al., ``Guidelines for the Enforcement of Civil Immigration
Law'' (Sept. 30, 2021), https://www.ice.gov/doclib/news/guidelines-
civilimmigrationlaw.pdf.
---------------------------------------------------------------------------
The Biden-Harris Administration made it nearly impossible
to remove illegal aliens from the United States. In September
2021, then-Department of Homeland Security (DHS) Secretary
Mayorkas issued a memorandum entitled ``Guidelines for the
Enforcement of Civil Immigration Law'' (``Mayorkas Memo''),
which outlined three enforcement priorities: national security,
public safety, and border security.\4\ The Mayorkas Memo began
with the assumption that ``undocumented noncitizens'' work hard
and contribute to ``our communities'' and that ``bipartisan
groups'' have ``tried to pass legislation that would provide a
path to citizenship or other lawful status for the
approximately 11 million undocumented noncitizens'' in the
country.\5\ From that premise, Secretary Mayorkas articulated a
new policy that the mere fact that aliens are removable
pursuant to U.S. law ``should not alone be the basis of an
enforcement action against them.''\6\ Under the Mayorkas Memo,
for instance, ``[b]efore ICE officers [could] arrest and detain
aliens as a threat to public safety, they [were] now required
to conduct an assessment of the individual and the totality of
facts and circumstances, including various aggravating or
mitigating factors.''\7\ In this assessment, ICE officers were
prohibited from relying solely on the fact of an alien's
conviction, regardless of the seriousness of the underlying
crime.\8\ After listing certain aggravating and mitigating
factors, the Mayorkas Memo stated that the listed factors were
``not exhaustive'' and that ``the overriding question is
whether the noncitizen poses a current threat to public
safety.''\9\ The Mayorkas Memo also did not presumptively
subject aliens with aggravated felony convictions to
enforcement action or detention.\10\
---------------------------------------------------------------------------
\4\See id.
\5\See id. at 2.
\6\Id.
\7\Texas v. United States, 40 F.4th 205, 214 (5th Cir. 2022)
(internal quotation marks omitted).
\8\Id.
\9\See Memorandum from Alejandro N. Mayorkas, supra note 3, at 4
(emphasis added).
\10\See Texas v. United States, 606 F. Supp. 3d 437, 457 (S.D. Tex.
2022).
---------------------------------------------------------------------------
As a result of the Mayorkas Memo and the Biden-Harris
Administration's refusal to enforce immigration laws, ICE
administrative arrests and interior removals dropped off a
cliff. In fiscal year 2018, under the first Trump
Administration, ICE made 158,581 administrative arrests of
aliens in the United States.\11\ Those arrests included 105,140
convicted criminals; 32,977 with pending criminal charges; and
20,464 with other immigration violations.\12\ During the same
time, ICE removed 95,360 aliens from the interior of the United
States.\13\ The Biden-Harris Administration reversed course,
arresting only 36,322 convicted criminals and only 10,074 with
pending criminal charges in fiscal year 2022.\14\ The drop in
removals was even more staggering, with only 28,204 interior
removals in fiscal year 2022.\15\
---------------------------------------------------------------------------
\11\U.S. Immigr. and Customs Enf't, Fiscal Year 2018 ICE Enf't and
Removal Operations Report, at 2, https://www.ice.gov/doclib/about/
offices/ero/pdf/eroFY2018Report.pdf.
\12\Id. at 2-3.
\13\Id. at 7.
\14\U.S. Immigr. and Customs Enf't, ICE Annual Report, Fiscal Year
2022, at 6 (Dec. 30, 2022), https://www.ice.gov/doclib/eoy/
iceAnnualReportFY2022.pdf.
\15\Id. at 21.
---------------------------------------------------------------------------
Although the Biden-Harris Administration boasted that its
``overall removals'' in fiscal year 2024 (271,484) exceeded the
Trump Administration's overall removals in fiscal year 2019
(267,258), this increase is solely because there were more
illegal aliens arriving at the border, being arrested by CBP,
and being immediately removed or allowed to return to
Mexico.\16\ The removal numbers were not indicative of
increased enforcement compared to the first Trump
Administration and were only a fraction of the more than two
million illegal aliens encountered at the southwest border in
fiscal year 2024.\17\ In fact, removals of aliens from the
interior of the U.S. remained significantly lower in fiscal
year 2024 than in the last full, non-COVID year of the first
Trump Administration. In fiscal year 2024, the Biden-Harris
Administration removed from the interior of the country only
47,732 aliens, compared to 85,958 interior removals in fiscal
year 2019.\18\ At the same time, the Biden-Harris
Administration removed far fewer criminal aliens from the
interior of the U.S. compared to the Trump Administration. For
example, in fiscal year 2024, the Biden-Harris Administration
removed only 36,279 convicted criminals from the interior
compared to 64,991 removed in 2019.\19\
---------------------------------------------------------------------------
\16\See U.S. Immigr. and Customs Enf't, ICE Annual Report, Fiscal
Year 2024, U.S. Dep't of Homeland Sec., at 3 (Dec. 19, 2024), https://
www.ice.gov/doclib/eoy/iceAnnualReportFY2024.pdf [hereinafter FY 2024
ICE Annual Rep.]
\17\See U.S. Customs and Border Prot., Sw. Land Border Encounters,
U.S. Dep't of Homeland Sec. (last accessed Apr. 24, 2025), https://
www.cbp.gov/newsroom/stats/southwest-land-border-encounters.
\18\See FY 2024 ICE Annual Report, supra note 16.
\19\Id. at 32.
---------------------------------------------------------------------------
Record border encounters also led to a drop in arrests of
aliens from fiscal year 2023 to fiscal year 2024.\20\ In
highlighting how both at-large arrests--ICE interior arrests
that are made in the community and not in a controlled
environment like a jail--and overall arrests of aliens dropped
from fiscal year 2023 to fiscal year 2024, ICE admitted that a
``focus on border cases impacted routine interior enforcement
operations.''\21\ In other words, because of the Biden-Harris
border crisis, more criminal aliens were allowed to remain in
the United States. In fact, in fiscal year 2024, the Biden-
Harris Administration made fewer at-large arrests of criminal
aliens (14,851) than the Trump Administration in fiscal year
2019 (25,421).\22\ Likewise, overall arrests of criminal aliens
were far lower in fiscal year 2024 (81,312) than in fiscal year
2019 (123,128).\23\ Meanwhile, the number of aliens on ICE's
non-detained docket soared to more than 7.6 million, a 135
percent increase from the end of fiscal year 2020, just before
President Biden and Vice President Harris took office.\24\
---------------------------------------------------------------------------
\20\Id. at 16.
\21\Id.
\22\Id. at 18.
\23\Id. at 17.
\24\Id. at 22.
---------------------------------------------------------------------------
Accordingly, with thousands of criminal and otherwise
removable aliens left roaming the streets due to the Biden-
Harris Administration's policies, the Trump Administration
today has been left with a tall task to enforce the immigration
laws. The Committee's reconciliation package will give ICE the
necessary resources to enforce current immigration law.
Adult alien detention capacity and family residential
centers
Currently, ICE is funded through annual appropriations for
detention beds sufficient to support an average daily
population of 41,500 single adult aliens.\25\ While the Trump
Administration reconfigured resources and currently has
detention space for nearly 50,000 aliens,\26\ and has worked
creatively to increase the amount of detention available to the
agency,\27\ a large increase in the number of detention beds is
necessary to effectuate the President's immigration agenda. The
Trump Administration also seeks to expand family residential
center capacity. The Biden-Harris Administration, in line with
its other policies that completely disregarded the enforcement
of immigration laws, generally released family units into the
United States.\28\ In fact, by December 2021, ``ICE stopped
housing families entirely.''\29\ Although the Biden-Harris
Administration briefly considered resuming family
detention,\30\ the outcry from open-borders activists\31\
scuttled those plans.\32\
---------------------------------------------------------------------------
\25\U.S. Immigr. and Customs Enf't, ICE announces ongoing work to
optimize enforcement resources, U.S. Dep't of Homeland Sec. (June 10,
2024), https://www.ice.gov/news/
releases/ice-announces-ongoing-work-optimize-enforcement-resources.
\26\Didi Martinez, Immigrant detention centers are at capacity,
Trump admin officials say, NBC News (Mar. 12, 2025), https://
www.nbcnews.com/news/latino/immigrant-detention-centers-are-capacity-
trump-admin-officials-say-rcna196085.
\27\Zolan Kanno-Youngs, Hamed Aleaziz, & Eric Schmitt, Trump Plans
to Use Military Sites Across the Country to Detain Undocumented
Immigrants, N.Y. Times (Feb. 21, 2025), https://www.nytimes.com/2025/
02/21/us/politics/migrants-military-sites.html.
\28\Eileen Sullivan & Zolan Kanno-Youngs, U.S. Is Said to Consider
Reinstating Detention of Migrant Families, N.Y. Times (Mar. 6, 2023),
https://www.nytimes.com/2023/03/06/us/politics/biden-immigration-
family-detention.html.
\29\U.S. Immigration and Customs Enforcement, Detention Management
(last accessed Mar. 21, 2023), https://www.ice.gov/detain/detention-
management (last accessed Mar. 17, 2023).
\30\See Eileen Sullivan & Zolan Kanno-Youngs, supra note 28.
\31\Press Release, Immigrants' Rights Organizations Rally in D.C.,
Demand the Biden Administration Not Ban Asylum or Lock Up Families,
ACLU (Mar. 16, 2023, 3:00 PM), https://www.aclu.org/press-releases/
immigrants-rights-organizations-rally-in-d-c-demand-the-biden-
administration-not-ban-asylum-or-lock-up-families.
\32\Ted Hesson, US family immigration detention won't restart `at
this time,' official says, Reuters (Apr. 18, 2023, 5:23 PM), https://
www.reuters.com/world/us/us-family-immigration-
detention-wont-restart-at-this-time-official-says-2023-04-18/.
---------------------------------------------------------------------------
Knowing that the Biden-Harris Administration would give
them a free pass into the United States, family units arrived
at the southwest border in record numbers. During fiscal year
2019, CBP apprehended 473,682 aliens who were part of a family
unit.\33\ In fiscal year 2020, during the COVID-19 pandemic,
CBP encountered 70,994 aliens who were part of a family
unit.\34\ In fiscal year 2021, that number soared to
478,492;\35\ in fiscal year 2022, 560,646; in fiscal year 2023,
821,537; and in fiscal year 2024, CBP encountered 804,456
aliens who were part of a family unit.\36\
---------------------------------------------------------------------------
\33\U.S. Customs and Border Protection, Southwest Border Migration
FY 2019, U.S. Dep't of Homeland Sec., https://www.cbp.gov/newsroom/
stats/sw-border-migration/fy-2019 (last accessed Feb. 28, 2025).
\34\U.S. Customs and Border Protection, Southwest Border Migration
FY 2020, U.S. Dep't of Homeland Sec., https://www.cbp.gov/newsroom/
stats/sw-border-migration-fy2020 (last accessed Feb. 28, 2025).
\35\Off. of Immigr. Statistics, Fiscal Year 2021 Southwest Border
Enforcement Rep., U.S. Dep't of Homeland Sec., at 2 (Aug. 2022),
https://ohss.dhs.gov/sites/default/files/2023-12/
2022_0818_plcy_southwest_border_enforcement_report_fy_2021_0.pdf.
\36\U.S. Customs and Border Protection, Southwest Land Border
Encounters, U.S. Dep't of Homeland Sec., https://www.cbp.gov/newsroom/
stats/southwest-land-border-encounters (last accessed Apr. 24, 2025).
---------------------------------------------------------------------------
For years, cartels have exploited children to attempt entry
into the United States. During the first Trump Administration,
then-Acting CBP Commissioner Mark Morgan described how
``illegal aliens were coached and mentored and given what to
say by the cartels and the human smuggling organizations: You
grab a kid, and that is your U.S. passport.''\37\ After
President Biden took office, cartels took advantage of the
Biden-Harris Administration's policies related to the mass
release of family units. According to a report by the New York
Post, cartels split up minors from their parents and then had
cartel members pose as the minors' relatives to ensure quick
entry into the United States.\38\
---------------------------------------------------------------------------
\37\John Davis, Border Crisis: CBP Fights Child Exploitation, U.S.
Customs and Border Prot., https://www.cbp.gov/frontline/border-crisis-
cbp-fights-child-exploitation.
\38\Gabrielle Fonrouge, Mexican drug cartels using kids as decoys
in to smuggle its members into US: sheriff, N.Y. Post (Mar. 22, 2021,
12:01 P.M.), https://nypost.com/2021/03/22/mexican-drug-cartels-use-
kids-as-decoys-to-smuggle-members-into-us/.
---------------------------------------------------------------------------
The Committee's reconciliation package provides ICE with
funds to increase adult alien detention capacity and family
residential center capacity. The Committee's reconciliation
package also provides funding for short-term detention space
for adult aliens who are charged with illegal entry so that the
aliens can be detained with the alien minors who entered the
United States with them.
Ground and air transportation
To effectuate the President's removal goals, an increase in
ground and air transportation is also needed. The Committee's
reconciliation package provides funds to increase ICE removal
operations, including amounts necessary for ground
transportation, air charters to return aliens to their home
countries, commercial air costs associated with in-country
transfers, transportation of unaccompanied alien children
(UAC), and ensuring other departures of aliens.
ICE personnel
The Committee's reconciliation package provides funds to
hire additional ICE officers, agents, and support personnel to
enforce current immigration law. Personnel to be hired include
new law enforcement officers involved in case management,
detention, investigations, and removals. In addition, the
Committee's proposal funds support-staff positions to allow ICE
to complete its enforcement functions more efficiently.
ICE trial attorneys at the Office of the Principal Legal
Advisor
The process to remove an alien from the United States
usually involves an ICE attorney prosecuting the alien's
removal case before an immigration judge in immigration
court.\39\ ICE attorneys, through the Office of the Principal
Legal Advisor (OPLA), are the ``exclusive representative of DHS
in immigration removal proceedings before [EOIR], litigating
all removal cases.''\40\ OPLA ``is the largest legal program in
DHS, with more than 1,700 attorneys and nearly 300 support
personnel.''\41\
---------------------------------------------------------------------------
\39\U.S. Immigr. and Customs Enf't, Off. of the Principal Legal
Advisor, https://www.ice.gov/about-ice/opla (last accessed May 5,
2025).
\40\Id.
\41\Id.
---------------------------------------------------------------------------
The Biden-Harris Administration upended OPLA's role in
prosecuting immigration cases and directed ICE attorneys to
support the Administration's open-borders agenda. On April 3,
2022, Kerry Doyle, the DHS official who at the time oversaw
OPLA, issued a memorandum (``Doyle Memo'') to ICE attorneys
directing them to promote the closure and dismissal of cases,
particularly given the immigration court backlog.\42\ The Doyle
Memo outlined how ICE attorneys were ``expected to exercise
discretion''--that is, move to dismiss immigration cases--``at
all stages of the enforcement process.''\43\ In other words,
ICE attorneys were expected to ensure that certain aliens'
cases never moved forward in immigration court so the Biden-
Harris Administration could achieve its open-borders agenda.
---------------------------------------------------------------------------
\42\Memorandum from Kerry E. Doyle, Principal Legal Advisor, U.S.
Immigr. and Customs Enf't, to All OPLA Attorneys, ``Guidance to OPLA
Attorneys Regarding the Enforcement of Civil Immigr. Laws and the
Exercise of Prosecutorial Discretion,'' at 9 (Apr. 3, 2022), https://
www.ice.gov/doclib/about/offices/opla/OPLA-immigration-
enforcement_guidanceApr2022.pdf.
\43\Id.
---------------------------------------------------------------------------
Through the Doyle Memo, the Biden-Harris Administration
gave ICE attorneys a playbook for ensuring countless cases
disappeared from the immigration court docket or, as the Doyle
Memo framed it, ``efficiently remov[ing] nonpriority cases from
the docket altogether.''\44\ For cases that were not a
priority--meaning cases that ICE attorneys determined did not
qualify as a threat to national security, public safety, or
border security--the Doyle Memo specified that ICE attorneys
should not file a Notice to Appear in the cases.\45\ If DHS
does not file a Notice to Appear in a case, DHS does not
initiate immigration court removal against those particular
aliens.\46\ In non-priority cases in which immigration court
proceedings have already begun, the Doyle Memo instructed ICE
attorneys to seek to dismiss proceedings or ``consider
alternative forms of prosecutorial discretion, including
administrative closure, stipulations to issues or relief,
continuances, not pursuing an appeal, joining motions to
reopen, and stipulations in bond hearings.''\47\ In both cases,
ICE attorneys' actions ensured that an alien would not be
removed from the United States.
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\44\Id. at 10.
\45\Id.
\46\See Immigr. Court Practice Manual, ch. 4.2, https://
www.justice.gov/eoir/reference-materials/ic/chapter-4/2 (last accessed
Apr. 24, 2025). According to the Immigration Court Practice Manual,
``[o]n occasion, an initial hearing is scheduled before the Department
of Homeland Security (DHS) has been able to file a Notice to Appear
with the immigration court. For example, DHS may serve a Notice to
Appear, which contains a hearing date, on a respondent, but not file
the Notice to Appear with the court until sometime later. Where DHS has
not filed the Notice to Appear with the court by the time of the first
hearing, this is known as a `failure to prosecute.' If there is a
failure to prosecute, the respondent and counsel may be excused until
DHS files the Notice to Appear with the court, at which time a hearing
is scheduled.'' Id.
\47\See Memorandum from Kerry E. Doyle, supra note 42, at 10.
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Because of the Biden-Harris Administration's policies, the
workload for OPLA attorneys is now higher than ever. The
numbers tell the story: During the Biden-Harris Administration,
immigration judges dismissed, terminated, or administratively
closed hundreds of thousands of cases,\48\ most of which will
likely need to be reopened or restarted so OPLA attorneys can
pursue the aliens' removals from the United States. With an
immigration court backlog of more than 4 million cases,\49\
OPLA requires even more manpower to prosecute the millions of
new cases that flooded the system under the Biden-Harris
Administration. Meanwhile, a 2024 DHS report revealed how OPLA
already had to ``implement[] new virtual capabilities to
address attorney shortages relative to the expansion'' of the
number of immigration judges.\50\
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\48\See H. Comm. on the Judiciary, Interim Staff Rep., Quiet
Amnesty: How the Biden-Harris Admin. Uses the Nation's Immigr. Courts
to Advance an Open-Borders Agenda (Oct. 24, 2024), https://
judiciary.house.gov/sites/evo-subsites/republicans-judiciary.house.gov/
files/evo-media-document/2024-10-
24%20Quiet%20Amnesty%20%20How%20the%20Biden-
Harris%20Administration%20Uses%20the%20Nation%27s%20Immigration%20
Courts%20to
%20Advance%20an%20Open-Borders%20Agenda.pdf.
\49\Exec. Off. for Immigr. Rev., Adjudication Statistics: Pending
Cases, New Cases, and Total Completions, U.S. Dep't of Justice, https:/
/www.justice.gov/eoir/media/1344791/dl?inline (last accessed Mar. 4,
2025).
\50\U.S. Dep't of Homeland Sec., Annual Performance Report, FY
2023-2025, at 42 (Mar. 2024), https://www.dhs.gov/sites/default/files/
2024-03/2024_0305_annual_performance_report_
for_fiscal_years_2023_2025.pdf.
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The Committee's reconciliation package provides funding to
the Trump Administration to hire additional OPLA attorneys to
represent DHS in removal proceedings and staff necessary to
support such attorneys.
ICE HIRING AND RETENTION BONUSES
Like many law enforcement agencies, in the wake of anti-
police sentiment fomented by activists on the left, ICE has
faced recruiting and retention challenges. In addition to the
challenge posed by general anti-law enforcement sentiment,
immigration activists frequently vilify ICE for simply doing
their jobs. Recently, in Los Angeles, for example, ICE agents
were doxed by anti-immigration activists.\51\ These kinds of
actions can result in threats against individual officers,
making it difficult not only for ICE to complete its mission
but for the agency to maintain an appropriate level of
staffing. The Committee's reconciliation package provides
funding for $10,000 hiring and retention bonuses for ICE
personnel. The hiring bonuses require newly hired personnel to
commit to at least two years of service with ICE. The retention
bonuses require personnel to commit to five additional years of
service with ICE. This section provides ICE discretion in
awarding retention bonuses due to issues with certain statutory
pay caps. The Committee's proposal further provides that
qualifying individuals will enter into written service
agreements with ICE that include relevant terms and conditions.
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\51\Stepheny Price & Bill Melugin, Anti-ICE activists disrupt LA
operations, post photos, names and phone numbers of agents, Fox News
(Feb. 24, 2025), https://www.foxnews.com/us/anti-ice-activists-disrupt-
la-operations-post-photos-names-phone-numbers-agents.
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287(G) PROGRAM
Current immigration law empowers state and local law
enforcement agencies to partner with ICE to investigate,
apprehend, or detain illegal aliens.\52\ Under section 287(g)
of the Immigration and Nationality Act (INA), the federal
government may enter into written agreements with state and
local agencies, through which law enforcement officers ``may
carry out'' immigration enforcement-related functions ``at the
expense of the [s]tate . . . and to the extent consistent with
[s]tate and local law.''\53\ The program is known as the 287(g)
program.\54\ According to ICE, the 287(g) program gives the
agency the ability ``to enhance collaboration with state and
local law enforcement partners to protect the homeland through
the arrest and removal of aliens who undermine the safety of
our nation's communities and the integrity of U.S. immigration
laws.''\55\ Law enforcement agencies ``interested in
participating in the 287(g) [p]rogram must sign a[] [memorandum
of agreement] with ICE'' and ``nominate officers to participate
in the 287(g) [p]rogram.''\56\
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\52\Abigail F. Kolker, Cong. Res. Serv., The 287(G) Program: State
and Local Immigr. Enf't, IF11898 (Aug. 12, 2021), https://
crsreports.congress.gov/product/pdf/IF/IF11898.
\53\8 U.S.C. Sec. 1357(g).
\54\See Kolker, supra note 52.
\55\Delegation of Immigration Authority Section 287(g) Immigration
and Nationality Act, U.S. Immigr. and Customs Enf't, https://
www.ice.gov/identify-and-arrest/287g (last accessed Mar. 3, 2025).
\56\Id.
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ICE uses three types of 287(g) agreements: the Jail
Enforcement Model (JEM); the Warrant Service Officer Model
(WSO); and the Task Force Model (TFM).\57\ The models include
varying degrees of immigration authority:
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\57\ERO Facts: 287(g) Program, U.S. Immigr. and Customs Enf't (Feb.
2025), https://www.ice.gov/doclib/about/offices/ero/287g/
factsheet287g.pdf (last accessed Mar. 3, 2025).
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The Jail Enforcement Model ``delegates certain
authority to state and local law enforcement agencies to
identify criminal aliens and immigration violators in local
custody and place them into immigration proceedings.''\58\
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\58\Id.
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