[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4241 Reported in House (RH)]
Union Calendar No. 151
109th CONGRESS
1st Session
H. R. 4241
[Report No. 109-276]
To provide for reconciliation pursuant to section 201(a) of the
concurrent resolution on the budget for fiscal year 2006.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 7, 2005
Mr. Nussle, from the Committee on the Budget, reported the following
bill; which was committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______________________________________________________________________
A BILL
To provide for reconciliation pursuant to section 201(a) of the
concurrent resolution on the budget for fiscal year 2006.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Deficit Reduction Act of 2005''.
SEC. 2. TABLE OF TITLES.
The table of titles is as follows:
TITLE I--COMMITTEE ON AGRICULTURE
TITLE II--COMMITTEE ON EDUCATION AND THE WORKFORCE
TITLE III--COMMITTEE ON ENERGY AND COMMERCE
TITLE IV--COMMITTEE ON FINANCIAL SERVICES
TITLE V--COMMITTEE ON THE JUDICIARY
TITLE VI--COMMITTEE ON RESOURCES
TITLE VII--COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
TITLE VIII--COMMITTEE ON WAYS AND MEANS
TITLE I--COMMITTEE ON AGRICULTURE
SECTION 1001. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the ``Agricultural
Reconciliation Act of 2005''.
(b) Table of Contents.--The table of contents of this title is as
follows:
Sec. 1001. Short title; table of contents.
Subtitle A--Commodity Programs
Sec. 1101. Percentage reduction in amount of direct payments for
covered commodities and peanuts.
Sec. 1102. Reduction in percentage of direct payment amount authorized
to be paid in advance.
Sec. 1103. Cotton competitiveness provisions.
Subtitle B--Conservation
Sec. 1201. Limitations on use of Commodity Credit Corporation funds to
carry out watershed rehabilitation program.
Sec. 1202. Conservation security program.
Sec. 1203. Limitations on use of Commodity Credit Corporation funds to
carry out agricultural management
assistance program.
Subtitle C--Energy
Sec. 1301. Termination of use of Commodity Credit Corporation funds to
carry out renewable energy systems and
energy efficiency improvements program.
Subtitle D--Rural Development
Sec. 1401. Enhanced access to broadband telecommunications services in
rural areas.
Sec. 1402. Value-added agricultural product market development grants.
Sec. 1403. Rural business investment program.
Sec. 1404. Rural business strategic investment grants.
Sec. 1405. Rural firefighters and emergency personnel grants.
Subtitle E--Research
Sec. 1501. Initiative for Future Food and Agriculture Systems.
Subtitle F--Nutrition
Sec. 1601. Eligible households.
Sec. 1602. Availability of commodities for the emergency food
assistance program.
Sec. 1603. Residency requirement.
Sec. 1604. Disaster food stamp program.
Subtitle A--Commodity Programs
SEC. 1101. PERCENTAGE REDUCTION IN AMOUNT OF DIRECT PAYMENTS FOR
COVERED COMMODITIES AND PEANUTS.
(a) Covered Commodities.--Section 1103 of the Farm Security and
Rural Investment Act of 2002 (7 U.S.C. 7913) is amended--
(1) in subsection (c), by striking ``The amount'' and
inserting ``Except as provided in subsection (e), the amount'';
and
(2) by adding at the end the following new subsection:
``(e) Direct Payment Amount Reduction.--Notwithstanding subsection
(c), for the 2006 and 2007 crop years (and the 2008 and 2009 crop years
if direct payments are provided under this section for those crop
years), the Secretary shall reduce the total amount of the direct
payment to be paid to the producers on a farm for a covered commodity
for the crop year concerned by an amount equal to 1 percent of the
direct payment amount otherwise determined for that farm for that
covered commodity for that crop year. No reduction shall be made under
the authority of this subsection if direct payments are made for the
2010 or any subsequent crop year of a covered commodity.''.
(b) Peanuts.--Section 1303 of such Act (7 U.S.C. 7953) is amended--
(1) in subsection (d), by striking ``The amount'' and
inserting ``Except as provided in subsection (f), the amount'';
and
(2) by adding at the end the following new subsection:
``(f) Direct Payment Amount Reduction.--Notwithstanding subsection
(d), for the 2006 and 2007 crops of peanuts (and the 2008 and 2009
crops of peanuts if direct payments are provided under this section for
those crops), the Secretary shall reduce the total amount of the direct
payment to be paid to the producers on a farm for that crop of peanuts
by an amount equal to 1 percent of the direct payment amount otherwise
determined for that farm for that crop of peanuts. No reduction shall
be made under the authority of this subsection if direct payments are
made for the 2010 or any subsequent crop of peanuts.''.
SEC. 1102. REDUCTION IN PERCENTAGE OF DIRECT PAYMENT AMOUNT AUTHORIZED
TO BE PAID IN ADVANCE.
(a) Covered Commodities.--Section 1103(d)(2) of the Farm Security
and Rural Investment Act of 2002 (7 U.S.C. 7913(d)(2)) is amended in
the first sentence by striking ``2007 crop years'' and inserting ``2005
crop years and up to 40 percent of the direct payment for a covered
commodity for each of the 2006 and 2007 crop years''.
(b) Peanuts.--Section 1303(e)(2) of such Act (7 U.S.C. 7953(e)(2))
is amended in the first sentence by striking ``2007 crop years'' and
inserting ``2005 crop years and up to 40 percent of the direct payment
for each of the 2006 and 2007 crop years''.
SEC. 1103. COTTON COMPETITIVENESS PROVISIONS.
(a) Repeal of Authority to Issue Cotton User Marketing
Certificates.--Section 1207 of the Farm Security and Rural Investment
Act of 2002 (7 U.S.C. 7937) is amended--
(1) by striking the section heading and inserting the
following: ``upland cotton import quotas.'';
(2) by striking subsection (a);
(3) by redesignating subsections (b) and (c) as subsections
(a) and (b), respectively;
(4) in subsection (a), as so redesignated--
(A) in paragraph (1)--
(i) in subparagraph (B), by striking ``,
adjusted for the value of any certificate
issued under subsection (a),''; and
(ii) in subparagraph (C), by striking ``,
for the value of any certificates issued under
subsection (a)''; and
(B) in paragraph (4), by striking ``subsection
(c)'' and inserting ``subsection (b)''; and
(5) in subsection (b)(2), as so redesignated, by striking
``subsection (b)'' and inserting ``subsection (a)''.
(b) Conforming Amendment.--Section 136 of the Federal Agriculture
Improvement and Reform Act of 1996 (7 U.S.C. 7236) is repealed.
(c) Effective Date.--The amendments made by this section take
effect on August 1, 2006.
Subtitle B--Conservation
SEC. 1201. LIMITATIONS ON USE OF COMMODITY CREDIT CORPORATION FUNDS TO
CARRY OUT WATERSHED REHABILITATION PROGRAM.
(a) Fiscal Year 2007 Funding.--Subparagraph (E) of section 14(h)(1)
of the Watershed Protection and Flood Prevention Act (16 U.S.C.
1012(h)(1)) is amended by striking ``$65,000,000'' and inserting
``$50,000,000''.
(b) Termination of Multi-Year Availability of Funds.--Such section
is further amended by striking ``, to remain available until expended''
in the matter preceding subparagraph (A).
(c) Rescission of Unobligated Prior-Year Funds.--Funds previously
made available under such section for a fiscal year and unobligated as
of September 30, 2006, are hereby rescinded effective on that date.
SEC. 1202. CONSERVATION SECURITY PROGRAM.
(a) Funding.--Section 1241(a) of the Food Security Act of 1985 (16
U.S.C. 3841(a)) is amended--
(1) in the matter before paragraph (1), by striking ``For''
and inserting ``Except as otherwise provided in this
subsection, for''; and
(2) in paragraph (3), by striking ``not more than
$6,037,000,000'' and all that follows through ``2014.'' and
inserting the following:
``not more than--
``(A) $2,213,000,000 for the period of fiscal years
2006 through 2010; and
``(B) $5,729,000,000 for the period of fiscal years
2006 through 2015.''.
(b) Duration.--Section 1238A(a) of such Act (16 U.S.C. 3838a(a)) is
amended by striking ``2007'' and inserting ``2011''.
SEC. 1203. LIMITATIONS ON USE OF COMMODITY CREDIT CORPORATION FUNDS TO
CARRY OUT AGRICULTURAL MANAGEMENT ASSISTANCE PROGRAM.
Section 524(b)(4)(B) of the Federal Crop Insurance Act (7 U.S.C.
1524(b)(4)(B)) is amended--
(1) in clause (i), by inserting before the period at the
end the following: ``, except fiscal years 2007 through 2010'';
and
(2) in clauses (ii) and (iii), by striking ``2007'' both
places it appears and inserting ``2006''.
Subtitle C--Energy
SEC. 1301. TERMINATION OF USE OF COMMODITY CREDIT CORPORATION FUNDS TO
CARRY OUT RENEWABLE ENERGY SYSTEMS AND ENERGY EFFICIENCY
IMPROVEMENTS PROGRAM.
Section 9006(f) of the Farm Security and Rural Investment Act of
2002 (7 U.S.C. 8106(f)) is amended by striking ``2007'' and inserting
``2006''.
Subtitle D--Rural Development
SEC. 1401. ENHANCED ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN
RURAL AREAS.
(a) Termination of Fiscal Year 2007 Funding.--Subparagraph (B) of
section 601(j)(1) of the Rural Electrification Act of 1936 (7 U.S.C.
950bb(j)(1)) is amended by striking ``for each of fiscal years 2006 and
2007'' and inserting ``for fiscal year 2006''.
(b) Termination of Multi-Year Availability of Funds.--Such section
is further amended by striking ``, to remain available until expended''
both places it appears.
(c) Rescission of Unobligated Prior-Year Funds.--Funds previously
made available under such section for a fiscal year and unobligated as
of September 30, 2006, are hereby rescinded effective on that date.
SEC. 1402. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS.
(a) Termination of Fiscal Year 2007 Funding.--Section 231(b)(4) of
the Agricultural Risk Protection Act of 2000 (Public Law 106-224; 7
U.S.C. 1621 note) is amended by striking ``October 1, 2006'' and
inserting ``October 1, 2005''.
(b) Termination of Multi-Year Availability of Funds.--Such section
is further amended by striking ``, to remain available until
expended''.
(c) Rescission of Unobligated Prior-Year Funds.--Funds previously
made available under such section for a fiscal year and unobligated as
of September 30, 2006, are hereby rescinded effective on that date.
SEC. 1403. RURAL BUSINESS INVESTMENT PROGRAM.
(a) Termination of Fiscal Year 2007 and Subsequent Funding.--
Subsection (a)(1) of section 384S of the Consolidated Farm and Rural
Development Act (7 U.S.C. 2009cc-18) is amended by inserting after
``necessary'' the following: ``through fiscal year 2006''.
(b) Termination of Multi-Year Availability of Funds.--Such section
is further amended--
(1) by striking ``(a) In General.--''; and
(2) by striking subsection (b).
(c) Rescission of Unobligated Prior-Year Funds.--Funds previously
made available under such section and unobligated as of September 30,
2006, are hereby rescinded effective on that date.
SEC. 1404. RURAL BUSINESS STRATEGIC INVESTMENT GRANTS.
(a) Termination of Multi-Year Availability of Funds.--Subsection
(a) of section 385E of the Consolidated Farm and Rural Development Act
(7 U.S.C. 2009dd-4) is amended by striking ``, to remain available
until expended,''.
(b) Rescission of Unobligated Prior-Year Funds.--Funds previously
made available under such section and unobligated as of September 30,
2006, are hereby rescinded effective on that date.
SEC. 1405. RURAL FIREFIGHTERS AND EMERGENCY PERSONNEL GRANTS.
(a) Termination of Fiscal Year 2007 Funding.--Section 6405(c) of
the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 2655(c))
is amended by striking ``2007'' and inserting ``2006''.
(b) Termination of Multi-Year Availability of Funds.--Such section
is further amended by striking ``, to remain available until
expended''.
(c) Rescission of Unobligated Prior-Year Funds.--Funds previously
made available under such section for a fiscal year and unobligated as
of September 30, 2006, are hereby rescinded effective on that date.
Subtitle E--Research
SEC. 1501. INITIATIVE FOR FUTURE FOOD AND AGRICULTURE SYSTEMS.
(a) Termination of Fiscal Year 2007, 2008, and 2009 Transfers.--
Subsection (b)(3)(D) of section 401 of the Agricultural Research,
Extension, and Education Reform Act of 1998 (7 U.S.C. 7621) is amended
by striking ``2006'' and inserting ``2009''.
(b) Termination of Multi-Year Availability of Fiscal Year 2006
Funds.--Paragraph (6) of subsection (f) of such section is amended to
read as follows:
``(6) Availability of funds.--
``(A) Two-year availability.--Except as provided in
subparagraph (B), funds for grants under this section
shall be available to the Secretary for obligation for
a 2-year period beginning on the date of the transfer
of the funds under subsection (b).
``(B) Exception for fiscal year 2006 transfer.--In
the case of the funds required to be transferred by
subsection (b)(3)(C), the funds shall be available to
the Secretary for obligation for the 1-year period
beginning on October 1, 2005.''.
Subtitle F--Nutrition
SEC. 1601. ELIGIBLE HOUSEHOLDS.
(a) Eligible Households.--Section 5 of the Food Stamp Act of 1977
(7 U.S.C. 2014) is amended--
(1) in the 2d sentence of subsection (a); and
(2) in subsection (j);
by striking ``receives benefits'' each place it appears and inserting
``in fiscal years 2006 through 2010 receives cash assistance, and in
any other fiscal year receives benefits,''.
(b) Extensions.--The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.)
is amended in--
(1) section 11(t)(1);
(2) section 16--
(A) in subparagraphs (A)(vii) and (E)(i) of
subsection (h)(1); and
(B) in subparagraphs (A) and (B)(ii) of subsection
(k)(3);
(3) section 17(b)(1)(B)(vi);
(4) section 18(a); and
(5) section 19(a)(2)(A)(ii);
by striking ``2007'' each place it appears and inserting ``2011''.
SEC. 1602. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD
ASSISTANCE PROGRAM.
Section 27(a) of the Food Stamp Act of 1977 (7 U.S.C. 2036(a)) is
amended--
(1) by striking ``2007,'' and inserting ``2005 and for each
of the fiscal years 2007 through 2011'';
(2) by inserting ``, and for fiscal year 2006 the Secretary
shall purchase $152,000,000,'' before ``of a variety''; and
(3) by adding at the end the following:
``Of the funds used to purchase commodities in accordance with this
subsection for fiscal year 2006, $12,000,000 shall be used to purchase
commodities for distribution to States that received a Presidential
designation of a major disaster under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5121-5206) as a result
of Hurricane Katrina or Hurricane Rita and States contiguous to those
States.''.
SEC. 1603. RESIDENCY REQUIREMENT.
Section 402(a)(2)(L) of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(L)) is
amended by striking ``5 years or more'' and inserting ``7 years or more
effective until September 30, 2010, and for a period of 5 years or more
effective beginning on October 1, 2010,''.
SEC. 1604. DISASTER FOOD STAMP PROGRAM.
Notwithstanding section 16(a) of the Food Stamp Act of 1977 (7
U.S.C. 2025(a)), the Secretary of Agriculture is authorized, at the
discretion of the Secretary, to pay to State agencies 100 percent of
the administrative costs incurred in the certification of, and issuance
of benefits to, applicant households that become eligible to receive
food stamp benefits under the disaster food stamp program eligibility
standards in effect during the Presidentially declared emergency in
response to Hurricane Katrina or Hurricane Rita.
TITLE II--COMMITTEE ON EDUCATION AND THE WORKFORCE
SECTION 2000. TABLE OF CONTENTS.
The table of contents of this title is as follows:
TITLE II--COMMITTEE ON EDUCATION AND THE WORKFORCE
Sec. 2000. Table of contents.
Subtitle A--Welfare Reform
Part 1--Short title; references
Sec. 2001. Short title.
Sec. 2002. References.
Part 2--TANF
Sec. 2011. Universal engagement and family self-sufficiency plan
requirements.
Sec. 2012. Work participation requirements.
Sec. 2013. Work-related performance improvement.
Sec. 2014. Report on coordination.
Sec. 2015. Fatherhood program.
Sec. 2016. State option to make TANF programs mandatory partners with
one-stop employment training centers.
Sec. 2017. Sense of the Congress.
Sec. 2018. Prohibition on offshoring.
Part 3--Child Care
Sec. 2021. Short title.
Sec. 2022. Goals.
Sec. 2023. Authorization of appropriations.
Sec. 2024. Application and plan.
Sec. 2025. Activities to improve the quality of child care.
Sec. 2026. Reports and audits.
Sec. 2027. Report by Secretary.
Sec. 2028. Definitions.
Sec. 2029. Waiver authority to expand the availability of services
under Child Care and Development Block
Grant Act of 1990.
Part 4--State and Local Flexibility
Sec. 2041. Program coordination demonstration projects.
Part 5--Effective Date
Sec. 2051. Effective date.
Subtitle B--Higher Education
Sec. 2101. Short title.
Part 1--Amendments to the Higher Education Act of 1965
Sec. 2111. References; effective date.
Sec. 2112. Modification of 50/50 Rule.
Sec. 2113. Reauthorization of Federal Family Education Loan Program.
Sec. 2114. Loan limits.
Sec. 2115. Interest rates and special allowances.
Sec. 2116. Additional loan terms and conditions.
Sec. 2117. Consolidation loan changes.
Sec. 2118. Deferment of student loans for military service.
Sec. 2119. Loan forgiveness for service in areas of national need.
Sec. 2120. Unsubsidized Stafford loans.
Sec. 2121. Elimination of termination dates from Taxpayer-Teacher
Protection Act of 2004.
Sec. 2122. Loan fees from lenders.
Sec. 2123. Additional administrative provisions.
Sec. 2124. Funds for administrative expenses.
Sec. 2125. Significantly simplifying the student aid application
process.
Sec. 2126. Additional need analysis amendments.
Sec. 2127. Definition of eligible program.
Sec. 2128. Distance education.
Sec. 2129. Student eligibility.
Sec. 2130. Institutional refunds.
Sec. 2131. College access initiative.
Sec. 2132. Cancellation of Student Loan Indebtedness For Survivors of
Victims of the September 11, 2001, Attacks.
Sec. 2133. Independent evaluation of distance education programs.
Sec. 2134. Disbursement of student loans.
Part 2--Higher education relief
Sec. 2141. References.
Sec. 2142. Waivers and modifications.
Sec. 2143. Cancellation of institutional repayment by colleges and
universities affected by a Gulf hurricane
disaster.
Sec. 2144. Cancellation of student loans for cancelled enrollment
periods.
Sec. 2145. Temporary deferment of student loan repayment.
Sec. 2146. No affect on grant and loan limits.
Sec. 2147. Teacher loan relief.
Sec. 2148. Expanding information dissemination regarding eligibility
for Pell Grants.
Sec. 2149. Procedures.
Sec. 2150. Termination of authority.
Sec. 2151. Definitions.
Subtitle C--Pensions
Sec. 2201. Increases in PBGC premiums.
Subtitle A--Welfare Reform
PART 1--SHORT TITLE; REFERENCES
SEC. 2001. SHORT TITLE.
This subtitle may be cited as the ``Personal Responsibility, Work,
and Family Promotion Act of 2005''.
SEC. 2002. REFERENCES.
Except as otherwise expressly provided, wherever in this subtitle
an amendment or repeal is expressed in terms of an amendment to, or
repeal of, a section or other provision, the amendment or repeal shall
be considered to be made to a section or other provision of the Social
Security Act.
PART 2--TANF
SEC. 2011. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY PLAN
REQUIREMENTS.
(a) Modification of State Plan Requirements.--Section 402(a)(1)(A)
(42 U.S.C. 602(a)(1)(A)) is amended by striking clauses (ii) and (iii)
and inserting the following:
``(ii) Require a parent or caretaker
receiving assistance under the program to
engage in work or alternative self-sufficiency
activities (as defined by the State),
consistent with section 407(e)(2).
``(iii) Require families receiving
assistance under the program to engage in
activities in accordance with family self-
sufficiency plans developed pursuant to section
408(b).''.
(b) Establishment of Family Self-Sufficiency Plans.--
(1) In general.--Section 408(b) (42 U.S.C. 608(b)) is
amended to read as follows:
``(b) Family Self-Sufficiency Plans.--
``(1) In general.--A State to which a grant is made under
section 403 shall--
``(A) assess, in the manner deemed appropriate by
the State, the skills, prior work experience, and
employability of each work-eligible individual (as
defined in section 407(b)(2)(C)) receiving assistance
under the State program funded under this part;
``(B) establish for each family that includes such
an individual, in consultation as the State deems
appropriate with the individual, a self-sufficiency
plan that specifies appropriate activities described in
the State plan submitted pursuant to section 402,
including direct work activities as appropriate
designed to assist the family in achieving their
maximum degree of self-sufficiency, and that provides
for the ongoing participation of the individual in the
activities;
``(C) require, at a minimum, each such individual
to participate in activities in accordance with the
self-sufficiency plan;
``(D) monitor the participation of each such
individual in the activities specified in the self-
sufficiency plan, and regularly review the progress of
the family toward self-sufficiency;
``(E) upon such a review, revise the self-
sufficiency plan and activities as the State deems
appropriate.
``(2) Timing.--The State shall comply with paragraph (1)
with respect to a family--
``(A) in the case of a family that, as of October
1, 2005, is not receiving assistance from the State
program funded under this part, not later than 60 days
after the family first receives assistance on the basis
of the most recent application for the assistance; or
``(B) in the case of a family that, as of such
date, is receiving the assistance, not later than 12
months after the date of enactment of this subsection.
``(3) State discretion.--A State shall have sole
discretion, consistent with section 407, to define and design
activities for families for purposes of this subsection, to
develop methods for monitoring and reviewing progress pursuant
to this subsection, and to make modifications to the plan as
the State deems appropriate to assist the individual in
increasing their degree of self-sufficiency.
``(4) Rule of interpretation.--Nothing in this part shall
preclude a State from--
``(A) requiring participation in work and any other
activities the State deems appropriate for helping
families achieve self-sufficiency and improving child
well-being; or
``(B) using job search or other appropriate job
readiness or work activities to assess the
employability of individuals and to determine
appropriate future engagement activities.''.
(2) Penalty for failure to establish family self-
sufficiency plan.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is
amended--
(A) in the paragraph heading, by inserting ``or
establish family self-sufficiency plan'' after
``Rates''; and
(B) in subparagraph (A), by inserting ``or 408(b)''
after ``407(a)''.
SEC. 2012. WORK PARTICIPATION REQUIREMENTS.
(a) Elimination of Separate Participation Rate Requirements for 2-
Parent Families.--
(1) Section 407 (42 U.S.C. 607) is amended in each of
subsections (a) and (b) by striking paragraph (2).
(2) Section 407(b)(4) (42 U.S.C. 607(b)(4)) is amended by
striking ``paragraphs (1)(B) and (2)(B)'' and inserting
``paragraph (1)(B)''.
(3) Section 407(c)(1) (42 U.S.C. 607(c)(1)) is amended by
striking subparagraph (B).
(4) Section 407(c)(2)(D) (42 U.S.C. 607(c)(2)(D)) is
amended by striking ``paragraphs (1)(B)(i) and (2)(B) of
subsection (b)'' and inserting ``subsection (b)(1)(B)(i)''.
(b) Work Participation Requirements.--Section 407 (42 U.S.C. 607)
is amended by striking all that precedes subsection (b)(3) and
inserting the following:
``SEC. 407. WORK PARTICIPATION REQUIREMENTS.
``(a) Participation Rate Requirements.--A State to which a grant is
made under section 403 for a fiscal year shall achieve a minimum
participation rate equal to not less than--
``(1) 50 percent for fiscal year 2006;
``(2) 55 percent for fiscal year 2007;
``(3) 60 percent for fiscal year 2008;
``(4) 65 percent for fiscal year 2009; and
``(5) 70 percent for fiscal year 2010 and each succeeding
fiscal year.
``(b) Calculation of Participation Rates.--
``(1) Average monthly rate.--For purposes of subsection
(a), the participation rate of a State for a fiscal year is the
average of the participation rates of the State for each month
in the fiscal year.
``(2) Monthly participation rates; incorporation of 40-hour
work week standard.--
``(A) In general.--For purposes of paragraph (1),
the participation rate of a State for a month is--
``(i) the total number of countable hours
(as defined in subsection (c)) with respect to
the counted families for the State for the
month; divided by
``(ii) 160 multiplied by the number of
counted families for the State for the month.
``(B) Counted families defined.--
``(i) In general.--In subparagraph (A), the
term `counted family' means, with respect to a
State and a month, a family that includes a
work-eligible individual and that receives
assistance in the month under the State program
funded under this part, subject to clause (ii).
``(ii) State option to exclude certain
families.--At the option of a State, the term
`counted family' shall not include--
``(I) a family in the first month
for which the family receives
assistance from a State program funded
under this part on the basis of the
most recent application for such
assistance;
``(II) on a case-by-case basis, a
family in which the youngest child has
not attained 12 months of age; or
``(III) a family that is subject to
a sanction under this part or part D,
but that has not been subject to such a
sanction for more than 3 months
(whether or not consecutive) in the
preceding 12-month period.
``(iii) State option to include individuals
receiving assistance under a tribal family
assistance plan or tribal work program.--At the
option of a State, the term `counted family'
may include families in the State that are
receiving assistance under a tribal family
assistance plan approved under section 412 or
under a tribal work program to which funds are
provided under this part.
``(C) Work-eligible individual defined.--In this
section, the term `work-eligible individual' means an
individual--
``(i) who is married or a single head of
household; and
``(ii) whose needs are (or, but for
sanctions under this part or part D, would be)
included in determining the amount of cash
assistance to be provided to the family under
the State program funded under this part.''.
(c) Recalibration of Caseload Reduction Credit.--
(1) In general.--Section 407(b)(3)(A)(ii) (42 U.S.C.
607(b)(3)(A)(ii)) is amended to read as follows:
``(ii) the average monthly number of
families that received assistance under the
State program funded under this part during the
base year.''.
(2) Conforming amendment.--Section 407(b)(3)(B) (42 U.S.C.
607(b)(3)(B)) is amended by striking ``and eligibility
criteria'' and all that follows through the close parenthesis
and inserting ``and the eligibility criteria in effect during
the then applicable base year''.
(3) Base year defined.--Section 407(b)(3) (42 U.S.C.
607(b)(3)) is amended by adding at the end the following:
``(C) Base year defined.--In this paragraph, the
term `base year' means, with respect to a fiscal year--
``(i) if the fiscal year is fiscal year
2006, fiscal year 1996;
``(ii) if the fiscal year is fiscal year
2007, fiscal year 1998;
``(iii) if the fiscal year is fiscal year
2008, fiscal year 2001; or
``(iv) if the fiscal year is fiscal year
2009 or any succeeding fiscal year, the then
4th preceding fiscal year.''.
(d) Superachiever Credit.--Section 407(b) (42 U.S.C. 607(b)) is
amended by striking paragraphs (4) and (5) and inserting the following:
``(4) Superachiever credit.--
``(A) In general.--The participation rate,
determined under paragraphs (1) and (2) of this
subsection, of a superachiever State for a fiscal year
shall be increased by the lesser of--
``(i) the amount (if any) of the
superachiever credit applicable to the State;
or
``(ii) the number of percentage points (if
any) by which the minimum participation rate
required by subsection (a) for the fiscal year
exceeds 50 percent.
``(B) Superachiever state.--For purposes of
subparagraph (A), a State is a superachiever State if
the State caseload for fiscal year 2001 has declined by
at least 60 percent from the State caseload for fiscal
year 1995.
``(C) Amount of credit.--The superachiever credit
applicable to a State is the number of percentage
points (if any) by which the decline referred to in
subparagraph (B) exceeds 60 percent.
``(D) Definitions.--In this paragraph:
``(i) State caseload for fiscal year
2001.--The term `State caseload for fiscal year
2001' means the average monthly number of
families that received assistance during fiscal
year 2001 under the State program funded under
this part.
``(ii) State caseload for fiscal year
1995.--The term `State caseload for fiscal year
1995' means the average monthly number of
families that received aid under the State plan
approved under part A (as in effect on
September 30, 1995) during fiscal year 1995.''.
(e) Countable Hours.--Section 407 (42 U.S.C. 607) is amended by
striking subsections (c) and (d) and inserting the following:
``(c) Countable Hours.--
``(1) Definition.--In subsection (b)(2), the term
`countable hours' means, with respect to a family for a month,
the total number of hours in the month in which any member of
the family who is a work-eligible individual is engaged in a
direct work activity or other activities specified by the State
(excluding an activity that does not address a purpose
specified in section 401(a)), subject to the other provisions
of this subsection.
``(2) Limitations.--Subject to such regulations as the
Secretary may prescribe:
``(A) Minimum weekly average of 24 hours of direct
work activities required.--If the work-eligible
individuals in a family are engaged in a direct work
activity for an average total of fewer than 24 hours
per week in a month, then the number of countable hours
with respect to the family for the month shall be zero.
``(B) Maximum weekly average of 16 hours of other
activities.--An average of not more than 16 hours per
week of activities specified by the State (subject to
the exclusion described in paragraph (1)) may be
considered countable hours in a month with respect to a
family.
``(3) Special rules.--For purposes of paragraph (1):
``(A) Participation in qualified activities.--
``(i) In general.--If, with the approval of
the State, the work-eligible individuals in a
family are engaged in 1 or more qualified
activities for an average total of at least 24
hours per week in a month, then all such
engagement in the month shall be considered
engagement in a direct work activity, subject
to clause (iii).
``(ii) Qualified activity defined.--The
term `qualified activity' means an activity
specified by the State (subject to the
exclusion described in paragraph (1)) that
meets such standards and criteria as the State
may specify, including--
``(I) substance abuse counseling or
treatment;
``(II) rehabilitation treatment and
services;
``(III) work-related education or
training directed at enabling the
family member to work;
``(IV) job search or job readiness
assistance; and
``(V) any other activity that
addresses a purpose specified in
section 401(a).
``(iii) Limitation.--
``(I) In general.--Except as
provided in subclause (II), clause (i)
shall not apply to a family for more
than 3 months in any period of 24
consecutive months.
``(II) Special rule applicable to
education and training.--A State may,
on a case-by-case basis, apply clause
(i) to a work-eligible individual so
that participation by the individual in
education or training, if needed to
permit the individual to complete a
certificate program or other work-
related education or training directed
at enabling the individual to fill a
known job need in a local area, may be
considered countable hours with respect
to the family of the individual for not
more than 4 months in any period of 24
consecutive months.
``(B) School attendance by teen head of
household.--The work-eligible members of a family shall
be considered to be engaged in a direct work activity
for an average of 40 hours per week in a month if the
family includes an individual who is married, or is a
single head of household, who has not attained 20 years
of age, and the individual--
``(i) maintains satisfactory attendance at
secondary school or the equivalent in the
month; or
``(ii) participates in education directly
related to employment for an average of at
least 20 hours per week in the month.
``(C) Parental participation in schools.--Each
work-eligible individual in a family shall make
verified visits at least twice per school year to the
school of each of the individual's minor dependent
children required to attend school under the law of the
State in which the minor children reside, during the
period in which the family receives assistance under
the program funded under this part. Hours spent in such
activity may be specified by the State as countable
hours for purposes of paragraph (2)(B).
``(d) Direct Work Activity.--In this section, the term `direct work
activity' means--
``(1) unsubsidized employment;
``(2) subsidized private sector employment;
``(3) subsidized public sector employment;
``(4) on-the-job training;
``(5) supervised work experience; or
``(6) supervised community service.''.
(f) Penalties Against Individuals.--Section 407(e)(1) (42 U.S.C.
607(e)(1)) is amended to read as follows:
``(1) Reduction or termination of assistance.--
``(A) In general.--Except as provided in paragraph
(2), if an individual in a family receiving assistance
under a State program funded under this part fails to
engage in activities required in accordance with this
section, or other activities required by the State
under the program, and the family does not otherwise
engage in activities in accordance with the self-
sufficiency plan established for the family pursuant to
section 408(b), the State shall--
``(i) if the failure is partial or persists
for not more than 1 month--
``(I) reduce the amount of
assistance otherwise payable to the
family pro rata (or more, at the option
of the State) with respect to any
period during a month in which the
failure occurs; or
``(II) terminate all assistance to
the family, subject to such good cause
exceptions as the State may establish;
or
``(ii) if the failure is total and persists
for at least 2 consecutive months, terminate
all cash payments to the family including
qualified State expenditures (as defined in
section 409(a)(7)(B)(i)) for at least 1 month
and thereafter until the State determines that
the individual has resumed full participation
in the activities, subject to such good cause
exceptions as the State may establish.
``(B) Special rule.--
``(i) In general.--In the event of a
conflict between a requirement of clause
(i)(II) or (ii) of subparagraph (A) and a
requirement of a State constitution, or of a
State statute that, before 1966, obligated
local government to provide assistance to needy
parents and children, the State constitutional
or statutory requirement shall control.
``(ii) Limitation.--Clause (i) of this
subparagraph shall not apply after the 1-year
period that begins with the date of the
enactment of this subparagraph.''.
(g) Conforming Amendments.--
(1) Section 407(f) (42 U.S.C. 607(f)) is amended in each of
paragraphs (1) and (2) by striking ``work activity described in
subsection (d)'' and inserting ``direct work activity''.
(2) The heading of section 409(a)(14) (42 U.S.C.
609(a)(14)) is amended by inserting ``or refusing to engage in
activities under a family self-sufficiency plan'' after
``work''.
SEC. 2013. WORK-RELATED PERFORMANCE IMPROVEMENT.
(a) State Plans.--Section 402(a)(1) (42 U.S.C. 602(a)) is amended--
(1) in subparagraph (A), by adding at the end the
following:
``(vii) The document shall--
``(I) describe how the State will
pursue ending dependence of needy
families on government benefits and
reducing poverty by promoting job
preparation and work;
``(II) include specific, numerical,
and measurable performance objectives
for accomplishing subclause (I); and
``(III) describe the methodology
that the State will use to measure
State performance in relation to each
such objective.
``(viii) Describe any strategies and
programs the State may be undertaking to
address--
``(I) employment retention and
advancement for recipients of
assistance under the program, including
placement into high-demand jobs, and
whether the jobs are identified using
labor market information;
``(II) services for struggling and
noncompliant families, and for clients
with special problems; and
``(III) program integration,
including the extent to which
employment and training services under
the program are provided through the
One-Stop delivery system created under
the Workforce Investment Act of 1998,
and the extent to which former
recipients of such assistance have
access to additional core, intensive,
or training services funded through
such Act.''; and
(2) in subparagraph (B), by striking clause (iv).
(b) Report on Annual Performance Improvement.--Section 411 (42
U.S.C. 611) is amended by adding at the end the following:
``(c) Annual Report on Performance Improvement.--Beginning with
fiscal year 2007, not later than January 1 of each fiscal year, each
eligible State shall submit to the Secretary a report on achievement
and improvement during the preceding fiscal year under the numerical
performance goals and measures under the State program funded under
this part with respect to the matter described in section
402(a)(1)(A)(vii).''.
(c) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C.
613(d)(1)) is amended by striking ``long-term private sector jobs,''
and inserting ``private sector jobs, the success of the recipients in
retaining employment, the ability of the recipients to increase their
wages,''.
(d) Performance Improvement.--Section 413 (42 U.S.C. 613) is
amended by adding at the end the following:
``(k) Performance Improvement.--The Secretary, in consultation with
States, shall develop uniform performance measures designed to assess
the degree of effectiveness, and the degree of improvement, of State
programs funded under this part in accomplishing the work-related
purposes of this part.''.
SEC. 2014. REPORT ON COORDINATION.
Not later than 6 months after the date of the enactment of this
Act, the Secretary of Health and Human Services and the Secretary of
Labor shall jointly submit a report to the Congress describing common
or conflicting data elements, definitions, performance measures, and
reporting requirements in the Workforce Investment Act of 1998 and part
A of title IV of the Social Security Act, and, to the degree each
Secretary deems appropriate, at the discretion of either Secretary, any
other program administered by the respective Secretary, to allow
greater coordination between the welfare and workforce development
systems.
SEC. 2015. FATHERHOOD PROGRAM.
(a) Short Title.--This section may be cited as the ``Promotion and
Support of Responsible Fatherhood and Healthy Marriage Act of 2005''.
(b) Fatherhood Program.--
(1) In general.--Title I of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (Public Law 104-
193) is amended by adding at the end the following:
``SEC. 117. FATHERHOOD PROGRAM.
``(a) In General.--Title IV (42 U.S.C. 601-679b) is amended by
inserting after part B the following:
`PART C--FATHERHOOD PROGRAM
`SEC. 441. FINDINGS AND PURPOSES.
`(a) Findings.--The Congress finds that there is substantial
evidence strongly indicating the urgent need to promote and support
involved, committed, and responsible fatherhood, and to encourage and
support healthy marriages between parents raising children, including
data demonstrating the following:
`(1) In approximately 84 percent of cases where a parent is
absent, that parent is the father.
`(2) If current trends continue, half of all children born
today will live apart from one of their parents, usually their
father, at some point before they turn 18.
`(3) Where families (whether intact or with a parent
absent) are living in poverty, a significant factor is the
father's lack of job skills.
`(4) Committed and responsible fathering during infancy and
early childhood contributes to the development of emotional
security, curiosity, and math and verbal skills.
`(5) An estimated 19,400,000 children (27 percent) live
apart from their biological father.
`(6) Forty percent of children under age 18 not living with
their biological father had not seen their father even once in
the last 12 months, according to national survey data.
`(b) Purposes.--The purposes of this part are:
`(1) To provide for projects and activities by public
entities and by nonprofit community entities, including
religious organizations, designed to test promising approaches
to accomplishing the following objectives:
`(A) Promoting responsible, caring, and effective
parenting through counseling, mentoring, and parenting
education, dissemination of educational materials and
information on parenting skills, encouragement of
positive father involvement, including the positive
involvement of nonresident fathers, and other methods.
`(B) Enhancing the abilities and commitment of
unemployed or low-income fathers to provide material
support for their families and to avoid or leave
welfare programs by assisting them to take full
advantage of education, job training, and job search
programs, to improve work habits and work skills, to
secure career advancement by activities such as
outreach and information dissemination, coordination,
as appropriate, with employment services and job
training programs, including the One-Stop delivery
system established under title I of the Workforce
Investment Act of 1998, encouragement and support of
timely payment of current child support and regular
payment toward past due child support obligations in
appropriate cases, and other methods.
`(C) Improving fathers' ability to effectively
manage family business affairs by means such as
education, counseling, and mentoring in matters
including household management, budgeting, banking, and
handling of financial transactions, time management,
and home maintenance.
`(D) Encouraging and supporting healthy marriages
and married fatherhood through such activities as
premarital education, including the use of premarital
inventories, marriage preparation programs, skills-
based marriage education programs, marital therapy,
couples counseling, divorce education and reduction
programs, divorce mediation and counseling,
relationship skills enhancement programs, including
those designed to reduce child abuse and domestic
violence, and dissemination of information about the
benefits of marriage for both parents and children.
`(2) Through the projects and activities described in
paragraph (1), to improve outcomes for children with respect to
measures such as increased family income and economic security,
improved school performance, better health, improved emotional
and behavioral stability and social adjustment, and reduced
risk of delinquency, crime, substance abuse, child abuse and
neglect, teen sexual activity, and teen suicide.
`(3) To evaluate the effectiveness of various approaches
and to disseminate findings concerning outcomes and other
information in order to encourage and facilitate the
replication of effective approaches to accomplishing these
objectives.
`SEC. 442. DEFINITIONS.
`In this part, the terms ``Indian tribe'' and ``tribal
organization'' have the meanings given them in subsections (e) and (l),
respectively, of section 4 of the Indian Self-Determination and
Education Assistance Act.
`SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.
`(a) In General.--The Secretary may make grants for fiscal years
2006 through 2010 to public and nonprofit community entities, including
religious organizations, and to Indian tribes and tribal organizations,
for demonstration service projects and activities designed to test the
effectiveness of various approaches to accomplish the objectives
specified in section 441(b)(1).
`(b) Eligibility Criteria for Full Service Grants.--In order to be
eligible for a grant under this section, except as specified in
subsection (c), an entity shall submit an application to the Secretary
containing the following:
`(1) Project description.--A statement including--
`(A) a description of the project and how it will
be carried out, including the geographical area to be
covered and the number and characteristics of clients
to be served, and how it will address each of the 4
objectives specified in section 441(b)(1); and
`(B) a description of the methods to be used by the
entity or its contractor to assess the extent to which
the project was successful in accomplishing its
specific objectives and the general objectives
specified in section 441(b)(1).
`(2) Experience and qualifications.--A demonstration of
ability to carry out the project, by means such as
demonstration of experience in successfully carrying out
projects of similar design and scope, and such other
information as the Secretary may find necessary to demonstrate
the entity's capacity to carry out the project, including the
entity's ability to provide the non-Federal share of project
resources.
`(3) Addressing child abuse and neglect and domestic
violence.--A description of how the entity will assess for the
presence of, and intervene to resolve, domestic violence and
child abuse and neglect, including how the entity will
coordinate with State and local child protective service and
domestic violence programs.
`(4) Addressing concerns relating to substance abuse and
sexual activity.--A commitment to make available to each
individual participating in the project education about
alcohol, tobacco, and other drugs, and about the health risks
associated with abusing such substances, and information about
diseases and conditions transmitted through substance abuse and
sexual contact, including HIV/AIDS, and to coordinate with
providers of services addressing such problems, as appropriate.
`(5) Coordination with specified programs.--An undertaking
to coordinate, as appropriate, with State and local entities
responsible for the programs under parts A, B, and D of this
title, including programs under title I of the Workforce
Investment Act of 1998 (including the One-Stop delivery
system), and such other programs as the Secretary may require.
`(6) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits as the Secretary may find necessary for
purposes of oversight of project activities and expenditures.
`(7) Self-initiated evaluation.--If the entity elects to
contract for independent evaluation of the project (part or all
of the cost of which may be paid for using grant funds), a
commitment to submit to the Secretary a copy of the evaluation
report within 30 days after completion of the report and not
more than 1 year after completion of the project.
`(8) Cooperation with secretary's oversight and
evaluation.--An agreement to cooperate with the Secretary's
evaluation of projects assisted under this section, by means
including random assignment of clients to service recipient and
control groups, if determined by the Secretary to be
appropriate, and affording the Secretary access to the project
and to project-related records and documents, staff, and
clients.
`(c) Eligibility Criteria for Limited Purpose Grants.--In order to
be eligible for a grant under this section in an amount under $25,000
per fiscal year, an entity shall submit an application to the Secretary
containing the following:
`(1) Project description.--A description of the project and
how it will be carried out, including the number and
characteristics of clients to be served, the proposed duration
of the project, and how it will address at least 1 of the 4
objectives specified in section 441(b)(1).
`(2) Qualifications.--Such information as the Secretary may
require as to the capacity of the entity to carry out the
project, including any previous experience with similar
activities.
`(3) Coordination with related programs.--As required by
the Secretary in appropriate cases, an undertaking to
coordinate and cooperate with State and local entities
responsible for specific programs relating to the objectives of
the project including, as appropriate, jobs programs and
programs serving children and families.
`(4) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits as the Secretary may find necessary for
purposes of oversight of project activities and expenditures.
`(5) Cooperation with secretary's oversight and
evaluation.--An agreement to cooperate with the Secretary's
evaluation of projects assisted under this section, by means
including affording the Secretary access to the project and to
project-related records and documents, staff, and clients.
`(d) Considerations in Awarding Grants.--
`(1) Diversity of projects.--In awarding grants under this
section, the Secretary shall seek to achieve a balance among
entities of differing sizes, entities in differing geographic
areas, entities in urban and in rural areas, and entities
employing differing methods of achieving the purposes of this
section, including working with the State agency responsible
for the administration of part D to help fathers satisfy child
support arrearage obligations.
`(2) Preference for projects serving low-income fathers.--
In awarding grants under this section, the Secretary may give
preference to applications for projects in which a majority of
the clients to be served are low-income fathers.
`(e) Federal Share.--
`(1) In general.--Grants for a project under this section
for a fiscal year shall be available for a share of the cost of
such project in such fiscal year equal to--
`(A) up to 80 percent (or up to 90 percent, if the
entity demonstrates to the Secretary's satisfaction
circumstances limiting the entity's ability to secure
non-Federal resources) in the case of a project under
subsection (b); and
`(B) up to 100 percent, in the case of a project
under subsection (c).
`(2) Non-federal share.--The non-Federal share may be in
cash or in kind. In determining the amount of the non-Federal
share, the Secretary may attribute fair market value to goods,
services, and facilities contributed from non-Federal sources.
`SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.
`(a) In General.--The Secretary may make grants under this section
for fiscal years 2006 through 2010 to eligible entities (as specified
in subsection (b)) for 2 multicity, multistate projects demonstrating
approaches to achieving the objectives specified in section 441(b)(1).
One of the projects shall test the use of married couples to deliver
program services.
`(b) Eligible Entities.--An entity eligible for a grant under this
section must be a national nonprofit fatherhood promotion organization
that meets the following requirements:
`(1) Experience with fatherhood programs.--The organization
must have substantial experience in designing and successfully
conducting programs that meet the purposes described in section
441.
`(2) Experience with multicity, multistate programs and
government coordination.--The organization must have experience
in simultaneously conducting such programs in more than 1 major
metropolitan area in more than 1 State and in coordinating such
programs, where appropriate, with State and local government
agencies and private, nonprofit agencies (including community-
based and religious organizations), including State or local
agencies responsible for child support enforcement and
workforce development.
`(c) Application Requirements.--In order to be eligible for a grant
under this section, an entity must submit to the Secretary an
application that includes the following:
`(1) Qualifications.--
`(A) Eligible entity.--A demonstration that the
entity meets the requirements of subsection (b).
`(B) Other.--Such other information as the
Secretary may find necessary to demonstrate the
entity's capacity to carry out the project, including
the entity's ability to provide the non-Federal share
of project resources.
`(2) Project description.--A description of and commitments
concerning the project design, including the following:
`(A) In general.--A detailed description of the
proposed project design and how it will be carried out,
which shall--
`(i) provide for the project to be
conducted in at least 3 major metropolitan
areas;
`(ii) state how it will address each of the
4 objectives specified in section 441(b)(1);
`(iii) demonstrate that there is a
sufficient number of potential clients to allow
for the random selection of individuals to
participate in the project and for comparisons
with appropriate control groups composed of
individuals who have not participated in such
projects; and
`(iv) demonstrate that the project is
designed to direct a majority of project
resources to activities serving low-income
fathers (but the project need not make services
available on a means-tested basis).
`(B) Oversight, evaluation, and adjustment
component.--An agreement that the entity--
`(i) in consultation with the evaluator
selected pursuant to section 446, and as
required by the Secretary, will modify the
project design, initially and (if necessary)
subsequently throughout the duration of the
project, in order to facilitate ongoing and
final oversight and evaluation of project
operation and outcomes (by means including, to
the maximum extent feasible, random assignment
of clients to service recipient and control
groups), and to provide for mid-course
adjustments in project design indicated by
interim evaluations;
`(ii) will submit to the Secretary revised
descriptions of the project design as modified
in accordance with clause (i); and
`(iii) will cooperate fully with the
Secretary's ongoing oversight and ongoing and
final evaluation of the project, by means
including affording the Secretary access to the
project and to project-related records and
documents, staff, and clients.
`(3) Addressing child abuse and neglect and domestic
violence.--A description of how the entity will assess for the
presence of, and intervene to resolve, domestic violence and
child abuse and neglect, including how the entity will
coordinate with State and local child protective service and
domestic violence programs.
`(4) Addressing concerns relating to substance abuse and
sexual activity.--A commitment to make available to each
individual participating in the project education about
alcohol, tobacco, and other drugs, and about the health risks
associated with abusing such substances, and information about
diseases and conditions transmitted through substance abuse and
sexual contact, including HIV/AIDS, and to coordinate with
providers of services addressing such problems, as appropriate.
`(5) Coordination with specified programs.--An undertaking
to coordinate, as appropriate, with State and local entities
responsible for the programs funded under parts A, B, and D of
this title, programs under title I of the Workforce Investment
Act of 1998 (including the One-Stop delivery system), and such
other programs as the Secretary may require.
`(6) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits (in addition to those required under the
preceding provisions of paragraph (2)) as the Secretary may
find necessary for purposes of oversight of project activities
and expenditures.
`(d) Federal Share.--
`(1) In general.--Grants for a project under this section
for a fiscal year shall be available for up to 80 percent of
the cost of such project in such fiscal year.
`(2) Non-federal share.--The non-Federal share may be in
cash or in kind. In determining the amount of the non-Federal
share, the Secretary may attribute fair market value to goods,
services, and facilities contributed from non-Federal sources.
`SEC. 445. ECONOMIC INCENTIVE DEMONSTRATION PROJECTS.
`(a) In General.--The Secretary may make grants under this section
for fiscal years 2006 through 2010 to eligible entities (as specified
in subsection (b)) for two to five projects demonstrating approaches to
achieving the objectives specified in section 441(b)(1). Drawing on the
success of economic-incentive programs in demonstrating strong
employment effects for low-income mothers, projects shall test the use
of economic incentives combined with a comprehensive approach to
addressing employment barriers to encourage non-custodial parents to
enter the workforce and to contribute financially and emotionally to
their children. The Secretary may make grants based on the level of
innovation, comprehensiveness, and likelihood to achieve the goal of
increased employment by the applicant.
`(b) Eligible Entities.--An entity eligible for a grant under this
section must be a national nonprofit fatherhood promotion organization
that meets the following requirements:
`(1) Experience with fatherhood programs.--The organization
must have substantial experience in designing and successfully
conducting programs that meet the purposes described in section
441.
`(2) Experience addressing multiple barriers to
employment.--The organization must have experience in
conducting such programs and in coordinating such programs,
where appropriate, with State and local government agencies and
private, nonprofit agencies (including community-based and
religious organizations), including State or local agencies
responsible for child support enforcement and workforce
development.
`(3) Negotiated agreements with state and local agencies
for appropriate policy changes to address barriers to
employment.--The organization must have agreements in place
with State and local government agencies, including State or
local agencies responsible for child support enforcement and
workforce development, to incorporate appropriate policy
changes proposed to address barriers to employment.
`(c) Application Requirements.--In order to be eligible for a grant
under this section, an entity must submit to the Secretary an
application that includes the following:
`(1) Qualifications.--
`(A) Eligible entity.--A demonstration that the
entity meets the requirements of subsection (b).
`(B) Other.--Such other information as the
Secretary may find necessary to demonstrate the
entity's capacity to carry out the project, including
the entity's ability to provide the non-Federal share
of project resources.
`(2) Project description.--A description of and commitments
concerning the project design, including the following:
`(A) In general.--A detailed description of the
proposed project design and how the project will be
carried out, which shall--
`(i) state how the project will address
each of the 4 objectives specified in section
441(b)(1);
`(ii) state how the project will address
employment barriers across programs (such as
child support, criminal justice, and workforce
development programs) using both sanctions and
compliance along with monetary incentives for
obtaining employment, with earning subsidies
contingent upon work and child support payment;
`(iii) demonstrate that there is a
sufficient number of potential clients to allow
for the random selection of individuals to
participate in the project and for comparisons
with appropriate control groups composed of
individuals who have not participated in such
projects; and
`(iv) demonstrate that the project is
designed to direct a majority of project
resources to activities serving low-income
fathers (but the project need not make services
available on a means-tested basis).
`(B) Oversight, evaluation, and adjustment
component.--An agreement that the entity--
`(i) in consultation with the evaluator
selected pursuant to section 446, and as
required by the Secretary, will modify the
project design, initially and (if necessary)
subsequently throughout the duration of the
project, in order to facilitate ongoing and
final oversight and evaluation of project
operation and outcomes (by means including, to
the maximum extent feasible, random assignment
of clients to service recipient and control
groups), and to provide for mid-course
adjustments in project design indicated by
interim evaluations;
`(ii) will submit to the Secretary revised
descriptions of the project design as modified
in accordance with clause (i); and
`(iii) will cooperate fully with the
Secretary's ongoing oversight and ongoing and
final evaluation of the project, by means
including affording the Secretary access to the
project and to project-related records and
documents, staff, and clients.
`(3) Addressing child abuse and neglect and domestic
violence.--A description of how the entity will assess for the
presence of, and intervene to resolve, domestic violence and
child abuse and neglect, including how the entity will
coordinate with State and local child protective service and
domestic violence programs.
`(4) Addressing concerns relating to substance abuse and
sexual activity.--A commitment to make available to each
individual participating in the project education about
alcohol, tobacco, and other drugs, and about the health risks
associated with abusing such substances, and information about
diseases and conditions transmitted through substance abuse and
sexual contact, including HIV/AIDS, and to coordinate with
providers of services addressing such problems, as appropriate.
`(5) Coordination with specified programs.--An undertaking
to coordinate, as appropriate, with State and local entities
responsible for the programs funded under parts A, B, and D of
this title, programs under title I of the Workforce Investment
Act of 1998 (including the One-Stop delivery system), and such
other programs as the Secretary may require.
`(6) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits (in addition to those required under the
preceding provisions of paragraph (2)) as the Secretary may
find necessary for purposes of oversight of project activities
and expenditures.
`(d) Federal Share.--
`(1) In general.--Grants for a project under this section
for a fiscal year shall be available for up to 80 percent of
the cost of such project in such fiscal year.
`(2) Non-federal share.--The non-Federal share may be in
cash or in kind. In determining the amount of the non-Federal
share, the Secretary may attribute fair market value to goods,
services, and facilities contributed from non-Federal sources.
`SEC. 446. EVALUATION.
`(a) In General.--The Secretary, directly or by contract or
cooperative agreement, shall evaluate the effectiveness of service
projects funded under sections 443 and 444 from the standpoint of the
purposes specified in section 441(b)(1).
`(b) Evaluation Methodology.--Evaluations under this section
shall--
`(1) include, to the maximum extent feasible, random
assignment of clients to service delivery and control groups
and other appropriate comparisons of groups of individuals
receiving and not receiving services;
`(2) describe and measure the effectiveness of the projects
in achieving their specific project goals; and
`(3) describe and assess, as appropriate, the impact of
such projects on marriage, parenting, domestic violence, child
abuse and neglect, money management, employment and earnings,
payment of child support, and child well-being, health, and
education.
`(c) Evaluation Reports.--The Secretary shall publish the following
reports on the results of the evaluation:
`(1) An implementation evaluation report covering the first
24 months of the activities under this part to be completed by
36 months after initiation of such activities.
`(2) A final report on the evaluation to be completed by
September 30, 2013.
`SEC. 447. PROJECTS OF NATIONAL SIGNIFICANCE.
`The Secretary is authorized, by grant, contract, or cooperative
agreement, to carry out projects and activities of national
significance relating to fatherhood promotion, including--
`(1) Collection and dissemination of information.--
Assisting States, communities, and private entities, including
religious organizations, in efforts to promote and support
marriage and responsible fatherhood by collecting, evaluating,
developing, and making available (through the Internet and by
other means) to all interested parties information regarding
approaches to accomplishing the objectives specified in section
441(b)(1).
`(2) Media campaign.--Developing, promoting, and
distributing to interested States, local governments, public
agencies, and private nonprofit organizations, including
charitable and religious organizations, a media campaign that
promotes and encourages involved, committed, and responsible
fatherhood and married fatherhood.
`(3) Technical assistance.--Providing technical assistance,
including consultation and training, to public and private
entities, including community organizations and faith-based
organizations, in the implementation of local fatherhood
promotion programs.
`(4) Research.--Conducting research related to the purposes
of this part.
`SEC. 448. NONDISCRIMINATION.
`The projects and activities assisted under this part shall be
available on the same basis to all fathers and expectant fathers able
to benefit from such projects and activities, including married and
unmarried fathers and custodial and noncustodial fathers, with
particular attention to low-income fathers, and to mothers and
expectant mothers on the same basis as to fathers.
`SEC. 449. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR CERTAIN
PURPOSE.
`(a) Authorization.--There are authorized to be appropriated
$20,000,000 for each of fiscal years 2006 through 2010 to carry out the
provisions of this part.
`(b) Reservation.--Of the amount appropriated under this section
for each fiscal year, not more than 35 percent shall be available for
the costs of the multicity, multicounty, multistate demonstration
projects under section 444, the economic incentives demonstration
projects under section 445, evaluations under section 446, and projects
of national significance under section 447, with not less than
$5,000,000 allocated to the economic incentives demonstration project
under section 445.'.
``(b) Inapplicability of Effective Date Provisions.--Section 116
shall not apply to the amendment made by subsection (a) of this
section.''.
(2) Clerical amendment.--Section 2 of such Act is amended
in the table of contents by inserting after the item relating
to section 116 the following new item:
``Sec. 117. Fatherhood program.''.
SEC. 2016. STATE OPTION TO MAKE TANF PROGRAMS MANDATORY PARTNERS WITH
ONE-STOP EMPLOYMENT TRAINING CENTERS.
Section 408 (42 U.S.C. 608) is amended by adding at the end the
following:
``(h) State Option to Make Tanf Programs Mandatory Partners With
One-Stop Employment Training Centers.--For purposes of section 121(b)
of the Workforce Investment Act of 1998, a State program funded under
part A of title IV of the Social Security Act shall be considered a
program referred to in paragraph (1)(B) of such section, unless, after
the date of the enactment of this subsection, the Governor of the State
notifies the Secretaries of Health and Human Services and Labor in
writing of the decision of the Governor not to make the State program a
mandatory partner.''.
SEC. 2017. SENSE OF THE CONGRESS.
It is the sense of the Congress that a State welfare-to-work
program should include a mentoring program.
SEC. 2018. PROHIBITION ON OFFSHORING.
Section 408(a) (42 U.S.C. 608(a)) is amended by adding at the end
the following:
``(12) Prohibition on offshoring.--A State to which a grant
is made under section 403 shall not use any part of the grant--
``(A) to enter into a contract with an entity that,
directly or through a subcontractor, provides any
service, activity or function described under this part
at a location outside the United States; or
``(B) to reduce employment in the United States
through use of 1 or more employees outside the United
States.''.
PART 3--CHILD CARE
SEC. 2021. SHORT TITLE.
This part may be cited as the ``Caring for Children Act of 2005''.
SEC. 2022. GOALS.
(a) Goals.--Section 658A(b) of the Child Care and Development Block
Grant Act of 1990 (42 U.S.C. 9801 note) is amended--
(1) in paragraph (3) by striking ``encourage'' and
inserting ``assist'',
(2) by amending paragraph (4) to read as follows:
``(4) to assist States to provide child care to low-income
parents;'',
(3) by redesignating paragraph (5) as paragraph (7), and
(4) by inserting after paragraph (4) the following:
``(5) to encourage States to improve the quality of child
care available to families;
``(6) to promote school readiness by encouraging the
exposure of young children in child care to nurturing
environments and developmentally-appropriate activities,
including activities to foster early cognitive and literacy
development; and''.
(b) Conforming Amendment.--Section 658E(c)(3)(B) of the Child Care
and Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)(3)(B)) is
amended by striking ``through (5)'' and inserting ``through (7)''.
SEC. 2023. AUTHORIZATION OF APPROPRIATIONS.
Section 658B of the Child Care and Development Block Grant Act of
1990 (42 U.S.C. 9858) is amended--
(1) by striking ``is'' and inserting ``are'', and
(2) by striking ``$1,000,000,000 for each of the fiscal
years 1996 through 2002'' and inserting ``$2,300,000,000 for
fiscal year 2006, $2,500,000,000 for fiscal year 2007,
$2,700,000,000 for fiscal year 2008, $2,900,000,000 for fiscal
year 2009, and $3,100,000,000 for fiscal year 2010''.
SEC. 2024. APPLICATION AND PLAN.
Section 658E(c)(2) of the Child Care and Development Block Grant
Act of 1990 (42 U.S.C. 9858C(c)(2)) is amended--
(1) by amending subparagraph (D) to read as follows:
``(D) Consumer and child care provider education
information.--
``(i) Certification.--Certify that the
State will collect and disseminate, through
resource and referral services and other means
as determined by the State, to parents of
eligible children, child care providers, and
the general public, information regarding--
``(I) the promotion of informed
child care choices, including
information about the quality and
availability of child care services;
``(II) research and best practices
on children's development, including
early cognitive development;
``(III) the availability of
assistance to obtain child care
services; and
``(IV) other programs for which
families that receive child care
services for which financial assistance
is provided under this subchapter may
be eligible, including the food stamp
program, the WIC program under section
17 of the Child Nutrition Act of 1966,
the child and adult care food program
under section 17 of the Richard B.
Russell National School Lunch Act, Head
Start programs, Early Head Start
programs, services and activities under
section 619 and part C of the
Individuals with Disabilities Education
Act, and the medicaid and SCHIP
programs under titles XIX and XXI of
the Social Security Act.
``(ii) Information.--Information provided
to parents shall be in plain language and, to
the extent practicable, be in a language that
such parents can understand.'', and
(2) by inserting after subparagraph (H) the following:
``(I) Coordination with other early child care
services and early childhood education programs.--
Demonstrate how the State is coordinating child care
services provided under this subchapter with Head Start
programs, Early Head Start programs, Early Reading
First, Even Start, Ready-To-Learn Television, services
and activities under section 619 and part C of the
Individuals with Disabilities Education Act, State pre-
kindergarten programs, and other early childhood
education programs to expand accessibility to and
continuity of care and early education consistent with
the goals of this Act, without displacing services
provided by the current early care and education
delivery system.
``(J) Public-private partnerships.--Demonstrate how
the State encourages partnerships with private and
other public entities to leverage existing service
delivery systems of early childhood education and
increase the supply and quality of child care services.
``(K) Child care service quality.--
``(i) Certification.--For each fiscal year
after fiscal year 2006, certify that during the
then preceding fiscal year the State was in
compliance with section 658G and describe how
funds were used to comply with such section
during such preceding fiscal year.
``(ii) Strategy.--For each fiscal year
after fiscal year 2006, contain an outline of
the strategy the State will implement during
such fiscal year for which the State plan is
submitted, to address the quality of child care
services in the State available from eligible
child care providers, and include in such
strategy--
``(I) a statement specifying how
the State will address the activities
described in paragraphs (1), (2), and
(3) of section 658G;
``(II) a description of measures
for evaluating the quality improvements
generated by the activities listed in
each of such paragraphs that the State
will use to evaluate its progress in
improving the quality of such child
care services;
``(III) a list of State-developed
child care service quality targets for
such fiscal year quantified on the
basis of such measures; and
``(IV) for each fiscal year after
fiscal year 2006, a report on the
progress made to achieve such targets
during the then preceding fiscal year.
``(iii) Rule of construction.--Nothing in
this subparagraph shall be construed to require
that the State apply measures for evaluating
quality to specific types of child care
providers.
``(L) Access to care for certain populations.--
Demonstrate how the State is addressing the child care
needs of parents eligible for child care services for
which financial assistance is provided under this
subchapter who have children with special needs, are
limited English proficient, work nontraditional hours,
or require child care services for infants or
toddlers.''.
SEC. 2025. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.
Section 658G of the Child Care and Development Block Grant Act of
1990 (42 U.S.C. 9858e) is amended to read as follows:
``SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE SERVICES.
``A State that receives funds to carry out this subchapter for a
fiscal year, shall use not less than 6 percent of the amount of such
funds for activities provided through resource and referral services
and other means, that are designed to improve the quality of child care
services in the State available from eligible child care providers.
Such activities include--
``(1) programs that provide training, education, and other
professional development activities to enhance the skills of
the child care workforce, including training opportunities for
caregivers in informal care settings;
``(2) activities within child care settings to enhance
early learning for young children, to promote early literacy,
and to foster school readiness;
``(3) initiatives to increase the retention and
compensation of child care providers, including tiered
reimbursement rates for providers that meet quality standards
as defined by the State; or
``(4) other activities deemed by the State to improve the
quality of child care services provided in such State.''.
SEC. 2026. REPORTS AND AUDITS.
Section 658K(a)(1)(B)(iii) of the Child Care and Development Block
Grant Act of 1990 (42 U.S.C. 9858i(a)(1)(B)(iii)) is amended by
inserting ``ethnicity, primary language,'' after ``race,''.
SEC. 2027. REPORT BY SECRETARY.
Section 658L of the Child Care and Development Block Grant Act of
1990 (42 U.S.C. 9858j) is amended to read as follows:
``SEC. 658L. REPORT BY SECRETARY.
``(a) Report Required.--Not later than October 1, 2007, and
biennially thereafter, the Secretary shall prepare and submit to the
Committee on Education and the Workforce of the House of
Representatives and the Committee on Health, Education, Labor and
Pensions of the Senate a report that contains the following:
``(1) A summary and analysis of the data and information
provided to the Secretary in the State reports submitted under
section 658K.
``(2) Aggregated statistics on the supply of, demand for,
and quality of child care, early education, and non-school-
hours programs.
``(3) An assessment, and where appropriate, recommendations
for the Congress concerning efforts that should be undertaken
to improve the access of the public to quality and affordable
child care in the United States.
``(b) Collection of Information.--The Secretary may utilize the
national child care data system available through resource and referral
organizations at the local, State, and national level to collect the
information required by subsection (a)(2).''.
SEC. 2028. DEFINITIONS.
(a) Eligible Children.--Section 658P(4)(B) of the Child Care and
Development Block Grant Act of 1990 (42 U.S.C. 9858N(4)(B)) is amended
by striking ``85 percent of the State median income'' and inserting
``income levels as established by the State, prioritized by need,''.
(b) Limited English Proficient.--Section 658P of the Child Care and
Development Block Grant Act of 1990 (42 U.S.C. 9858n) is amended--
(1) by redesignating paragraph (9) as paragraph (10); and
(2) by inserting after paragraph (8) the following:
``(9) Limited english proficient.--The term `limited
English proficient' means with respect to an individual, that
such individual--
``(A)(i) was not born in the United States or has a
native language that is not English;
``(ii)(I) is a Native American, an Alaska Native,
or a native resident of a territory or possession of
the United States; and
``(II) comes from an environment in which a
language that is not English has had a significant
impact on such individual's level of English language
proficiency; or
``(iii) is migratory, has a native language that is
not English, and comes from an environment in which a
language that is not English is dominant; and
``(B) has difficultly in speaking or understanding
the English language to an extent that may be
sufficient to deny such individual--
``(i) the ability to successfully achieve
in classrooms in which the language of
instruction is English; or
``(ii) the opportunity to fully participate
in society.''.
SEC. 2029. WAIVER AUTHORITY TO EXPAND THE AVAILABILITY OF SERVICES
UNDER CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT OF 1990.
(a) Waiver Authority.--For such period up to June 30, 2006, and to
such extent as the Secretary considers to be appropriate, the Secretary
of Health and Human Service may waive or modify, for any affected
State, and any State serving significant numbers of individuals
adversely affected by a Gulf hurricane disaster, provisions of the
Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et
seq.)--
(1) relating to Federal income limitations on eligibility
to receive child care services for which assistance is provided
under such Act,
(2) relating to work requirements applicable to eligibility
to receive child care services for which assistance is provided
under such Act,
(3) relating to limitations on the use of funds under
section 658G of the Child Care and Development Block Grant Act
of 1990, and
(4) preventing children designated as evacuees from
receiving priority for child care services provided under such
Act, except that children residing in a State and currently
receiving services should not lose such services in order to
accommodate evacuee children,
for purposes of easing State fiscal burdens and providing child care
services to children orphaned, or of families displaced, as a result of
a Gulf hurricane disaster.
(b) Definitions.--For purposes of this section:
(1) Affected state.--The term ``affected State'' means the
State of Alabama, Florida, Louisiana, Mississippi, or Texas.
(2) Gulf hurricane disaster.--The term ``Gulf hurricane
disaster'' means a major disaster that the President declared
to exist, in accordance with section 401 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act, and that
was caused by Hurricane Katrina or Hurricane Rita.
(3) Individual adversely affected by a gulf hurricane
disaster.--The term ``individual adversely affected by a Gulf
hurricane disaster'' means an individual who, on August 29,
2005, was living, working, or attending school in an area in
which the President has declared to exist a Gulf hurricane
disaster.
PART 4--STATE AND LOCAL FLEXIBILITY
SEC. 2041. PROGRAM COORDINATION DEMONSTRATION PROJECTS.
(a) Purpose.--The purpose of this section is to establish a program
of demonstration projects in a State or portion of a State to
coordinate multiple public assistance, workforce development, and other
programs, for the purpose of supporting working individuals and
families, helping families escape welfare dependency, promoting child
well-being, or helping build stronger families, using innovative
approaches to strengthen service systems and provide more coordinated
and effective service delivery.
(b) Definitions.--In this section:
(1) Administering secretary.--The term ``administering
Secretary'' means, with respect to a qualified program, the
head of the Federal agency responsible for administering the
program.
(2) Qualified program.--The term ``qualified program''
means--
(A) activities funded under title I of the
Workforce Investment Act of 1998, except subtitle C of
such title;
(B) a demonstration project authorized under
section 505 of the Family Support Act of 1988;
(C) activities funded under the Wagner-Peyser Act;
(D) activities funded under the Adult Education and
Family Literacy Act; or
(E) activities funded under the Child Care and
Development Block Grant Act of 1990;
(c) Application Requirements.--The head of a State entity or of a
sub-State entity administering 2 or more qualified programs proposed to
be included in a demonstration project under this section shall (or, if
the project is proposed to include qualified programs administered by 2
or more such entities, the heads of the administering entities (each of
whom shall be considered an applicant for purposes of this section)
shall jointly) submit to the administering Secretary of each such
program an application that contains the following:
(1) Programs included.--A statement identifying each
qualified program to be included in the project, and describing
how the purposes of each such program will be achieved by the
project.
(2) Population served.--A statement identifying the
population to be served by the project and specifying the
eligibility criteria to be used.
(3) Description and justification.--A detailed description
of the project, including--
(A) a description of how the project is expected to
improve or enhance achievement of the purposes of the
programs to be included in the project, from the
standpoint of quality, of cost-effectiveness, or of
both; and
(B) a description of the performance objectives for
the project, including any proposed modifications to
the performance measures and reporting requirements
used in the programs.
(4) Waivers requested.--A description of the statutory and
regulatory requirements with respect to which a waiver is
requested in order to carry out the project, and a
justification of the need for each such waiver.
(5) Cost neutrality.--Such information and assurances as
necessary to establish to the satisfaction of the administering
Secretary, in consultation with the Director of the Office of
Management and Budget, that the proposed project is reasonably
expected to meet the applicable cost neutrality requirements of
subsection (d)(4).
(6) Evaluation and reports.--An assurance that the
applicant will conduct ongoing and final evaluations of the
project, and make interim and final reports to the
administering Secretary, at such times and in such manner as
the administering Secretary may require.
(7) Other information and assurances.--Such other
information and assurances as the administering Secretary may
require.
(d) Approval of Applications.--
(1) In general.--The administering Secretary with respect
to a qualified program that is identified in an application
submitted pursuant to subsection (c) may approve the
application and, except as provided in paragraph (2), waive any
requirement applicable to the program, to the extent consistent
with this section and necessary and appropriate for the conduct
of the demonstration project proposed in the application, if
the administering Secretary determines that the project--
(A) has a reasonable likelihood of achieving the
objectives of the programs to be included in the
project;
(B) may reasonably be expected to meet the
applicable cost neutrality requirements of paragraph
(4), as determined by the Director of the Office of
Management and Budget; and
(C) includes the coordination of 2 or more
qualified programs.
(2) Provisions excluded from waiver authority.--A waiver
shall not be granted under paragraph (1)--
(A) with respect to any provision of law relating
to--
(i) civil rights or prohibition of
discrimination;
(ii) purposes or goals of any program;
(iii) maintenance of effort requirements;
(iv) health or safety;
(v) labor standards under the Fair Labor
Standards Act of 1938; or
(vi) environmental protection;
(B) with respect to section 241(a) of the Adult
Education and Family Literacy Act;
(C) in the case of a program under the Workforce
Investment Act, with respect to any requirement the
waiver of which would violate section 189(i)(4)(A)(i)
of such Act;
(D) with respect to any requirement that a State
pass through to a sub-State entity part or all of an
amount paid to the State;
(E) if the waiver would waive any funding
restriction or limitation provided in an appropriations
Act, or would have the effect of transferring
appropriated funds from 1 appropriations account to
another; or
(F) except as otherwise provided by statute, if the
waiver would waive any funding restriction applicable
to a program authorized under an Act which is not an
appropriations Act (but not including program
requirements such as application procedures,
performance standards, reporting requirements, or
eligibility standards), or would have the effect of
transferring funds from a program for which there is
direct spending (as defined in section 250(c)(8) of the
Balanced Budget and Emergency Deficit Control Act of
1985) to another program.
(3) Agreement of each administering secretary required.--
(A) In general.--An applicant may not conduct a
demonstration project under this section unless each
administering Secretary with respect to any program
proposed to be included in the project has approved the
application to conduct the project.
(B) Agreement with respect to funding and
implementation.--Before approving an application to
conduct a demonstration project under this section, an
administering Secretary shall have in place an
agreement with the applicant with respect to the
payment of funds and responsibilities required of the
administering Secretary with respect to the project.
(4) Cost-neutrality requirement.--
(A) General rule.--Notwithstanding any other
provision of law (except subparagraph (B)), the total
of the amounts that may be paid by the Federal
Government for a fiscal year with respect to the
programs in the State in which an entity conducting a
demonstration project under this section is located
that are affected by the project shall not exceed the
estimated total amount that the Federal Government
would have paid for the fiscal year with respect to the
programs if the project had not been conducted, as
determined by the Director of the Office of Management
and Budget.
(B) Special rule.--If an applicant submits to the
Director of the Office of Management and Budget a
request to apply the rules of this subparagraph to the
programs in the State in which the applicant is located
that are affected by a demonstration project proposed
in an application submitted by the applicant pursuant
to this section, during such period of not more than 5
consecutive fiscal years in which the project is in
effect, and the Director determines, on the basis of
supporting information provided by the applicant, to
grant the request, then, notwithstanding any other
provision of law, the total of the amounts that may be
paid by the Federal Government for the period with
respect to the programs shall not exceed the estimated
total amount that the Federal Government would have
paid for the period with respect to the programs if the
project had not been conducted.
(5) 90-day approval deadline.--
(A) In general.--If an administering Secretary
receives an application to conduct a demonstration
project under this section and does not disapprove the
application within 90 days after the receipt, then--
(i) the administering Secretary is deemed
to have approved the application for such
period as is requested in the application,
except to the extent inconsistent with
subsection (e); and
(ii) any waiver requested in the
application which applies to a qualified
program that is identified in the application
and is administered by the administering
Secretary is deemed to be granted, except to
the extent inconsistent with paragraph (2) or
(4) of this subsection.
(B) Deadline extended if additional information is
sought.--The 90-day period referred to in subparagraph
(A) shall not include any period that begins with the
date the Secretary requests the applicant to provide
additional information with respect to the application
and ends with the date the additional information is
provided.
(e) Duration of Projects.--A demonstration project under this
section may be approved for a term of not more than 5 years.
(f) Reports to Congress.--
(1) Report on disposition of applications.--Within 90 days
after an administering Secretary receives an application
submitted pursuant to this section, the administering Secretary
shall submit to each Committee of the Congress which has
jurisdiction over a qualified program identified in the
application notice of the receipt, a description of the
decision of the administering Secretary with respect to the
application, and the reasons for approving or disapproving the
application.
(2) Reports on projects.--Each administering Secretary
shall provide annually to the Congress a report concerning
demonstration projects approved under this section, including--
(A) the projects approved for each applicant;
(B) the number of waivers granted under this
section, and the specific statutory provisions waived;
(C) how well each project for which a waiver is
granted is improving or enhancing program achievement
from the standpoint of quality, cost-effectiveness, or
both;
(D) how well each project for which a waiver is
granted is meeting the performance objectives specified
in subsection (c)(3)(B);
(E) how each project for which a waiver is granted
is conforming with the cost-neutrality requirements of
subsection (d)(4); and
(F) to the extent the administering Secretary deems
appropriate, recommendations for modification of
programs based on outcomes of the projects.
PART 5--EFFECTIVE DATE
SEC. 2051. EFFECTIVE DATE.
(a) In General.--Except as otherwise provided in this subtitle,
this subtitle and the amendments made by this subtitle shall take
effect on the date of the enactment of this Act.
(b) Exception.--In the case of a State plan under part A of title
IV of the Social Security Act which the Secretary determines requires
State legislation in order for the plan to meet the additional
requirements imposed by the amendments made by this subtitle, the
effective date of the amendments imposing the additional requirements
shall be 3 months after the first day of the first calendar quarter
beginning after the close of the first regular session of the State
legislature that begins after the date of the enactment of this Act.
For purposes of the preceding sentence, in the case of a State that has
a 2-year legislative session, each year of the session shall be
considered to be a separate regular session of the State legislature.
Subtitle B--Higher Education
SEC. 2101. SHORT TITLE.
This subtitle may be cited as the ``Higher Education Budget
Reconciliation Act of 2005''.
PART 1--AMENDMENTS TO THE HIGHER EDUCATION ACT OF 1965
SEC. 2111. REFERENCES; EFFECTIVE DATE.
(a) References.--Except as otherwise expressly provided, whenever
in this part an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provision of the
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
(b) Effective Date.--Except as otherwise provided in this part, the
amendments made by this part shall be effective on the date of
enactment of this Act.
SEC. 2112. MODIFICATION OF 50/50 RULE.
Section 102(a)(3) (20 U.S.C. 1002(a)(3)) is amended--
(1) in subparagraph (A), by inserting ``(excluding courses
offered by telecommunications as defined in section
484(l)(4))'' after ``courses by correspondence''; and
(2) in subparagraph (B), by inserting ``(excluding courses
offered by telecommunications as defined in section
484(l)(4))'' after ``correspondence courses''.
SEC. 2113. REAUTHORIZATION OF FEDERAL FAMILY EDUCATION LOAN PROGRAM.
(a) Authorization of Appropriations.--Section 421(b)(5) (20 U.S.C.
1071(b)(5)) is amended by striking ``an administrative cost allowance''
and inserting ``a loan processing and issuance fee''.
(b) Extension of Authority.--
(1) Federal insurance limitations.--Section 424(a) (20
U.S.C. 1074(a)) is amended--
(A) by striking ``2004'' and inserting ``2012'';
and
(B) by striking ``2008'' and inserting ``2016''.
(2) Guaranteed loans.--Section 428(a)(5) (20 U.S.C.
1078(a)(5)) is amended--
(A) by striking ``2004'' and inserting ``2012'';
and
(B) by striking ``2008'' and inserting ``2016''.
(3) Consolidation loans.--Section 428C(e) (20 U.S.C. 1078-
3(e)) is amended by striking ``2004'' and inserting ``2012''.
SEC. 2114. LOAN LIMITS.
(a) Federal Insurance Limits.--Section 425(a)(1)(A) (20 U.S.C.
1075(a)(1)(A)) is amended--
(1) in clause (i)(I), by striking ``$2,625'' and inserting
``$3,500''; and
(2) in clause (ii)(I), by striking ``$3,500'' and inserting
``$4,500''.
(b) Guarantee Limits.--Section 428(b)(1)(A) (20 U.S.C.
1078(b)(1)(A)) is amended--
(1) in clause (i)(I), by striking ``$2,625'' and inserting
``$3,500''; and
(2) in clause (ii)(I), by striking ``$3,500'' and inserting
``$4,500''.
(c) Counting of Consolidation Loans Against Limits.--Section
428C(a)(3)(B) (20 U.S.C. 1078-3(a)(3)(B)) is amended by adding at the
end the following new clause:
``(ii) Loans made under this section shall, to the extent
used to pay off the outstanding principal balance on loans made
under this title, excluding capitalized interest, be counted
against the applicable limitations on aggregate indebtedness
contained in sections 425(a)(2), 428(b)(1)(B), 428H(d), 455,
and 464(a)(2)(B).''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to any loan made, insured, or guaranteed under part
B or part D of title IV of the Higher Education Act of 1965 for which
the first disbursement of principal is made on or after July 1, 2007.
SEC. 2115. INTEREST RATES AND SPECIAL ALLOWANCES.
(a) FFEL Interest Rates.--Section 427A (20 U.S.C. 1077a(k)) is
amended--
(1) in subsection (k)--
(A) by striking ``, and Before July 1, 2006'' in
the heading of such subsection; and
(B) by striking ``, and before July 1, 2006,'' each
place it appears in paragraphs (1), (2), and (3);
(2) by striking subsection (l); and
(3) by redesignating subsections (m) and (n) as subsections
(l) and (m), respectively.
(b) Direct Loan Interest Rates.--Section 455(b) (20 U.S.C.
1087e(b)) is amended--
(1) in paragraph (6)--
(A) by striking ``, and before july 1, 2006'' in
the heading of such paragraph; and
(B) by striking ``, and before July 1, 2006,'' each
place it appears in subparagraphs (A), (B), and (C);
(2) by striking paragraph (7); and
(3) by redesignating paragraphs (8) and (9) as paragraphs
(7) and (8), respectively.
(c) Consolidation Loan Interest Rates.--
(1) FFEL loans.--Section 427A(k) (20 U.S.C. 1077a(k)) is
further amended--
(A) in the heading of paragraph (4), by inserting
``before july 1, 2006'' after ``loans'';
(B) by redesignating paragraph (5) as paragraph
(6); and
(C) by inserting after paragraph (4) the following:
``(5) Consolidation loans on or after july 1, 2006.--
``(A) Borrower election.--With respect to any
consolidation loan under section 428C for which the
application is received by an eligible lender on or
after July 1, 2006, the applicable rate of interest
shall, at the election of the borrower at the time of
application for the loan, be either at the rate
determined under subparagraph (B) or the rate
determined under subparagraph (C).
``(B) Variable rate.--Except as provided in
subparagraph (D), the rate determined under this
subparagraph shall, during any 12-month period
beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and, for such 12-
month period, not be more than--
``(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
held prior to such June 1; plus
``(ii) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
``(C) Fixed rate.--Except as provided in
subparagraph (D), the rate determined under this
subparagraph shall be determined for the duration of
the term of the loan on the July 1 that is or precedes
the date on which the application is received by an
eligible lender, and shall be, for such duration, not
more than--
``(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
held prior to the June 1 immediately preceding
such July 1; plus
``(ii) 3.3 percent,
except that such rate shall not exceed 8.25 percent.
``(D) Consolidation of plus loans.--In the case of
any such consolidation loan that is used to repay loans
each of which was made under section 428B or was a
Federal Direct PLUS Loan (or both), the rates
determined under clauses (B) and (C) shall be
determined--
``(i) by substituting `3.1 percent' for
`2.3 percent';
``(ii) by substituting `4.1 percent' for
`3.3 percent'; and
``(iii) by substituting `9.0 percent' for
`8.25 percent'.''.
(2) Direct loans.--Section 455(b)(6) (20 U.S.C.
1087e(b)(6)) is further amended--
(A) in the heading of subparagraph (D), by
inserting ``before july 1, 2006'' after ``loans''
(B) by redesignating subparagraph (E) as
subparagraph (F); and
(C) by inserting after subparagraph (D) the
following:
``(E) Consolidation loans on or after july 1,
2006.--
``(i) Borrower election.--Notwithstanding
the preceding paragraphs of this subsection,
with respect to any Federal Direct
Consolidation Loan for which the application is
received by the Secretary on or after July 1,
2006, the applicable rate of interest shall, at
the election of the borrower at the time of
application for the loan, be either at the rate
determined under clause (ii) or the rate
determined under clause (iii).
``(ii) Variable rate.--Except as provided
in clause (iv), the rate determined under this
clause shall, during any 12-month period
beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and, for
such 12-month period, be equal to--
``(I) the bond equivalent rate of
91-day Treasury bills auctioned at the
final auction held prior to such June
1; plus
``(II) 2.3 percent,
except that such rate shall not exceed 8.25
percent.
``(iii) Fixed rate.--Except as provided in
clause (iv), the rate determined under this
clause shall be determined for the duration of
the term of the loan on the July 1 that is or
precedes the date on which the application is
received by the Secretary, and shall be, for
such duration, equal to--
``(I) the bond equivalent rate of
91-day Treasury bills auctioned at the
final auction held prior to the June 1
immediately preceding such July 1; plus
``(II) 3.3 percent,
except that such rate shall not exceed 8.25
percent.
``(iv) Consolidation of plus loans.--In the
case of any such Federal Direct Consolidation
Loan that is used to repay loans each of which
was made under section 428B or was a Federal
Direct PLUS Loan (or both), the rates
determined under clauses (ii) and (iii) shall
be determined--
``(I) by substituting `3.1 percent'
for `2.3 percent';
``(II) by substituting `4.1
percent' for `3.3 percent'; and
``(III) by substituting `9.0
percent' for `8.25 percent'.''.
(d) Consolidation Loan Conforming Amendment.--Section
428C(c)(1)(A)(ii) (20 U.S.C. 1078-3(c)(1)(A)(ii)) is amended by
striking ``section 427A(l)(3)'' and inserting ``section 427A(k)(5)''.
(e) Conforming Amendments for Special Allowances.--
(1) Amendment.--Subparagraph (I) of section 438(b)(2) (20
U.S.C. 1087-1(b)(2)) is amended--
(A) by striking clause (ii) and inserting the
following:
``(ii) In school and grace period.--In the
case of any loan for which the first
disbursement is made on or after January 1,
2000, and for which the applicable interest
rate is described in section 427A(k)(2), clause
(i)(III) of this subparagraph shall be applied
by substituting `1.74 percent' for `2.34
percent'.'';
(B) in clause (iii),
(i) by striking ``or (l)(2)''; and
(ii) by striking ``, subject to clause (v)
of this subparagraph'';
(C) in clause (iv)--
(i) by striking ``or (l)(3)'' and inserting
``or (k)(5)''; and
(ii) by striking ``, subject to clause (vi)
of this subparagraph''; and
(D) by striking clauses (v), (vi), and (vii) and
inserting the following:
``(v) Recapture of excess interest.--
``(I) Excess credited.--With
respect to a loan on which the
applicable interest rate is determined
under section 427A(k) and for which the
first disbursement of principal is made
on or after July 1, 2006, if the
applicable interest rate for any 3-
month period exceeds the special
allowance support level applicable to
such loan under this subparagraph for
such period, then an adjustment shall
be made by calculating the excess
interest in the amount computed under
subclause (II) of this clause, and by
crediting the excess interest to the
Government not less often than
annually.
``(II) Calculation of excess.--The
amount of any adjustment of interest on
a loan to be made under this subsection
for any quarter shall be equal to--
``(aa) the applicable
interest rate minus the special
allowance support level
determined under this
subparagraph; multiplied by
``(bb) the average daily
principal balance of the loan
(not including unearned
interest added to principal)
during such calendar quarter;
divided by
``(cc) four.
``(III) Special allowance support
level.--For purposes of this clause,
the term `special allowance support
level' means, for any loan, a number
expressed as a percentage equal to the
sum of the rates determined under
subclauses (I) and (III) of clause (i),
and applying any substitution rules
applicable to such loan under clauses
(ii), (iii), and (iv) in determining
such sum.''.
(2) Effective date.--The amendments made by this subsection
shall not apply with respect to any special allowance payment
made under section 438 of the Higher Education Act of 1965 (20
U.S.C 1087-1) before July 1, 2006.
SEC. 2116. ADDITIONAL LOAN TERMS AND CONDITIONS.
(a) Federal Default Fees.--
(1) In general.--Subparagraph (H) of section 428(b)(1) (20
U.S.C. 1078(b)(1)(H)) is amended to read as follows:
``(H) provides--
``(i) for loans for which the first
disbursement of principal is made before July,
1, 2006, for the collection of a single
insurance premium equal to not more than 1.0
percent of the principal amount of the loan, by
deduction proportionately from each installment
payment of the proceeds of the loan to the
borrower, and ensures that the proceeds of the
premium will not be used for incentive payments
to lenders; or
``(ii) for loans for which the first
disbursement of principal is made on or after
July 1, 2006, for the collection and deposit
into the Federal Student Loan Reserve Fund
under section 422A of a Federal default fee of
1.0 percent of the principal amount of such
loan, which shall be deducted proportionately
from each installment payment of the proceeds
of the loan to the borrower prior to payment to
the borrower, and ensures that the proceeds of
the Federal default fee will not be used for
incentive payments to lenders;''.
(2) Unsubsidized loans.--Section 428H(h) (20 U.S.C. 1078-
8(h)) is amended by adding at the end the following new
sentence: ``Effective for loans for which the first
disbursement of principal is made on or after July 1, 2006, in
lieu of the insurance premium authorized under the preceding
sentence, each State or nonprofit private institution or
organization having an agreement with the Secretary under
section 428(b)(1) shall collect and deposit into the Federal
Student Loan Reserve Fund under section 422A a Federal default
fee of 1.0 percent of the principal amount of the loan,
obtained by deduction proportionately from each installment
payment of the proceeds of the loan to the borrower. The
Federal default fee shall not be used for incentive payments to
lenders.''.
(3) Voluntary flexible agreements.--Section 428A(a)(1) (20
U.S.C. 1078-1(a)(1)) is amended--
(A) by striking ``or'' at the end of subparagraph
(A);
(B) by striking the period at the end of
subparagraph (B) and inserting ``; or''; and
(C) by adding at the end the following new
subparagraph:
``(C) the Federal default fee required by section
428(b)(1)(H) and the second sentence of section
428H(h).''.
(b) Disbursement.--Section 428(b)(1)(N) (20 U.S.C. 1078(b)(1)(N))
is amended--
(1) in clause (i), by inserting ``(including an eligible
foreign institution, except as provided in clause (ii))'' after
``institution''; and
(2) in clause (ii), by striking ``or at an eligible foreign
institution''.
(c) Repayment Plans.--
(1) FFEL loans.--Section 428(b)(9)(A) (20 U.S.C.
1078(b)(9)(A)) is amended--
(A) by inserting before the semicolon at the end of
clause (ii) the following: ``, and the Secretary may
not restrict the proportions or ratios by which such
payments may be graduated with the informed agreement
of the borrower'';
(B) by striking ``and'' at the end of clause (iii);
(C) by redesignating clause (iv) as clause (v); and
(D) by inserting after clause (iii) the following
new clause:
``(iv) a delayed repayment plan under which
the borrower makes scheduled payments for not
more than 2 years that are annually not less
than the amount of interest due or $600,
whichever is greater, and then makes payments
in accordance with clause (i), (ii), or (iii);
and''.
(2) Direct loans.--Section 455(d)(1) (20 U.S.C.
1087e(d)(1)) is amended--
(A) by redesignating subparagraph (D) as
subparagraph (E); and
(B) by striking subparagraphs (A), (B), and (C) and
inserting the following:
``(A) a standard repayment plan, consistent with
subsection (a)(1) of this section and with section
428(b)(9)(A)(i);
``(B) a graduated repayment plan, consistent with
section 428(b)(9)(A)(ii);
``(C) an extended repayment plan, consistent with
section 428(b)(9)(A)(v), except that the borrower shall
annually repay a minimum amount determined by the
Secretary in accordance with section 428(b)(1)(L);
``(D) a delayed repayment plan under which the
borrower makes scheduled payments for not more than 2
years that are annually not less than the amount of
interest due or $600, whichever is greater, and then
makes payments in accordance with subparagraph (A),
(B), or (C); and''.
(d) Origination Fees.--
(1) FFEL program.--Paragraph (2) of section 438(c) (20
U.S.C. 1087-1(c)) is amended--
(A) by striking the designation and heading of such
paragraph and inserting the following:
``(2) Amount of origination fees.--
``(A) In general.--''; and
(B) by adding at the end the following new
subparagraph:
``(B) Subsequent reductions.--Subparagraph (A)
shall be applied to loans made under this part (other
than loans made under sections 428C and 439(o))--
``(i) by substituting `2.0 percent' for
`3.0 percent' with respect to loans for which
the first disbursement of principal is made on
or after July 1, 2006, and before July 1, 2007;
``(ii) by substituting `1.5 percent' for
`3.0 percent' with respect to loans for which
the first disbursement of principal is made on
or after July 1, 2007, and before July 1, 2008;
``(iii) by substituting `1.0 percent' for
`3.0 percent' with respect to loans for which
the first disbursement of principal is made on
or after July 1, 2008, and before July 1, 2009;
``(iv) by substituting `0.5 percent' for
`3.0 percent' with respect to loans for which
the first disbursement of principal is made on
or after July 1, 2009, and before July 1, 2010;
and
``(v) by substituting `0.0 percent' for
`3.0 percent' with respect to loans for which
the first disbursement of principal is made on
or after July 1, 2010.''.
(2) Direct loan program.--Subsection (c) of section 455 (20
U.S.C. 1087e(c)) is amended to read as follows:
``(c) Loan Fee.--
``(1) In general.--The Secretary shall charge the borrower
of a loan made under this part an origination fee of 4.0
percent of the principal amount of loan.
``(2) Subsequent reduction.--Paragraph (1) shall be applied
to loans made under this part, other than Federal Direct
Consolidation loans and Federal Direct PLUS loans--
``(A) by substituting `not more or less than 3.0
percent' for `4.0 percent' with respect to loans for
which the first disbursement of principal is made on or
after July 1, 2006, and before July 1, 2007;
``(B) by substituting `not more or less than 2.5
percent' for `4.0 percent' with respect to loans for
which the first disbursement of principal is made on or
after July 1, 2007, and before July 1, 2008;
``(C) by substituting `not more or less than 2.0
percent' for `4.0 percent' with respect to loans for
which the first disbursement of principal is made on or
after July 1, 2008, and before July 1, 2009;
``(D) by substituting `not more or less than 1.5
percent' for `4.0 percent' with respect to loans for
which the first disbursement of principal is made on or
after July 1, 2009, and before July 1, 2010; and
``(E) by substituting `not more or less than 1.0
percent' for `4.0 percent' with respect to loans for
which the first disbursement of principal is made on or
after July 1, 2010.
``(3) Waivers and repayment incentives prohibited.--
Beginning with loans made on or after July 1, 2006, the
Secretary is prohibited--
``(A) from waiving any amount of the loan fee
prescribed under this section as part of a repayment
incentive in section 455(b)(7); and
``(B) from providing any repayment incentive before
the borrower enters repayment.''.
(e) Consolidation Loan Offset Charge.--
(1) FFEL consolidation loans.--Section 438(c) (20 U.S.C.
1087-1(c)) is further amended--
(A) in paragraph (1)(A), by inserting after
``paragraph (2) of this subsection'' the following:
``and the amount the lender is authorized to collect as
a consolidation loan offset charge in accordance with
paragraph (9) of this subsection'';
(B) in paragraph (1)(B)--
(i) by inserting ``and the consolidation
loan offset charge'' after ``origination fee'';
and
(ii) by inserting ``and consolidation loan
offset charges'' after ``origination fees'';
(C) in paragraphs (3) and (4), by inserting ``and
consolidation loan offset charge'' after ``origination
fee'' each place it appears;
(D) in paragraph (5)--
(i) by inserting ``or consolidation loan
offset charge'' after ``origination fee''; and
(ii) by inserting ``or consolidation loan
offset charges'' after ``origination fees'';
(E) in paragraph (7)--
(i) by inserting ``and consolidation loan
offset charges'' after ``origination fees'';
and
(ii) by striking ``428A or''; and
(F) by adding at the end the following new
paragraph:
``(9) Consolidation loan offset charge.--For any loan under
section 428C, the lender is authorized to collect a
consolidation loan offset charge in an amount not to exceed 1.0
percent of the principal amount of the loan. Such amount may be
added to the principal amount of the loan for repayment by the
borrower.''.
(2) Direct loans.--Section 455(c) (20 U.S.C. 1087e(c)), as
amended by subsection (d)(2) of this section, is further
amended by adding at the end the following new paragraph:
``(4) Consolidation loan offset charges.--For any Federal
Direct Consolidation Loan, the Secretary shall collect a
consolidation loan offset charge in an amount not more or less
than 1.0 percent of the principal amount of the loan. Such
amount may be added to the principal amount of the loan for
repayment by the borrower. Such amount is not subject to the
requirements of paragraph (3) of this subsection.''.
SEC. 2117. CONSOLIDATION LOAN CHANGES.
(a) Cross-Consolidation Between Programs.--Section 428C (20 U.S.C.
1078-3) is amended--
(1) in subsection (a)(3)(B)(i)--
(A) by inserting ``or under section 455(g)'' after
``under this section'' both places it appears;
(B) by inserting ``under both sections'' after
``terminates''
(C) by striking ``and'' at the end of subclause
(III);
(D) by striking the period at the end of subclause
(IV) and inserting ``; and''; and
(E) by adding at the end the following new
subclause:
``(V) an individual may obtain a subsequent
consolidation loan under section 455(g) only for the
purposes of obtaining an income contingent repayment
plan, and only if the loan has been submitted to the
guaranty agency for default aversion.''; and
(2) in subsection (b)(5), by striking the first sentence
and inserting the following: ``In the event that a lender with
an agreement under subsection (a)(1) of this section denies a
consolidation loan application submitted to it by an eligible
borrower under this section, or denies an application submitted
to it by such a borrower for a consolidation loan with income-
sensitive repayment terms, the Secretary shall offer any such
borrower who applies for it, a Federal Direct Consolidation
loan. The Secretary shall offer such a loan to a borrower who
has defaulted, for the purpose of resolving the default.''.
(b) Repeal of in-School Consolidation.--
(1) Definition of repayment period.--Section 428(b)(7)(A)
(20 U.S.C. 1078(b)(7)(A)) is amended by striking ``shall
begin--'' and all that follows through ``earlier date.'' and
inserting the following: ``shall begin the day after 6 months
after the date the student ceases to carry at least one-half
the normal full-time academic workload (as determined by the
institution).''.
(2) Conforming change to eligible borrower definition.--
Section 428C(a)(3)(A)(ii)(I) (20 U.S.C. 1078-3(a)(3)(A)(ii)(I))
is amended by inserting ``as determined under section
428(b)(7)(A)'' after ``repayment status''.
(c) Interest Payment Rebate Fee.--Section 428C(f)(2) (20 U.S.C.
1078-2(f)(2)) is amended--
(1) by striking ``Special rule.--'' and inserting ``Special
rules.--(A)''; and
(2) by adding at the end the following new subparagraph:
``(B) For consolidation loans based on applications
received on or after July 1, 2006, if 90 percent or more of the
total principal and accrued unpaid interest outstanding on the
loans held, directly or indirectly, by any holder is comprised
of principal and accrued unpaid interest owed on consolidation
loans, the rebate described in paragraph (1) for such holder
shall be equal to 1.30 percent of the principal plus accrued
unpaid interest on such loans.''.
(d) Additional Amendments.--Section 428C (20 U.S.C. 1078-3) is
amended--
(1) in subsection (a)(3), by striking subparagraph (C); and
(2) in subsection (b)(1)--
(A) by striking everything after ``under this
section'' the first place it appears in subparagraph
(A) and inserting the following: ``and that, if all the
borrower's loans under this part are held by a single
holder, the borrower has notified such holder that the
borrower is seeking to obtain a consolidation loan
under this section;'';
(B) by striking ``(i) which'' and all that follows
through ``and (ii)'' in subparagraph (C);
(C) by striking ``and'' at the end of subparagraph
(E);
(D) by redesignating subparagraph (F) as
subparagraph (G); and
(E) by inserting after subparagraph (E) the
following new subparagraph:
``(F) that the lender of the consolidation loan
shall, upon application for such loan, provide the
borrower with a clear and conspicuous notice of at
least the following information:
``(i) the effects of consolidation on total
interest to be paid, fees to be paid, and
length of repayment;
``(ii) the effects of consolidation on a
borrower's underlying loan benefits, including
loan forgiveness, cancellation, deferment, and
reduced interest rates on those underlying
loans;
``(iii) the ability of the borrower to
prepay the loan, pay on a shorter schedule, and
to change repayment plans;
``(iv) that borrower benefit programs may
vary among different loan holders, and a
description of how the borrower benefits may
vary among different loan holders;
``(v) the tax benefits for which borrowers
may be eligible;
``(vi) the consequences of default; and
``(vii) that by making the application the
applicant is not obligated to agree to take the
consolidation loan; and''.
(e) Effective Date for Single Holder Amendment.--The amendment made
by subsection (d)(2)(A) shall apply with respect to any loan made under
section 428C of the Higher Education Act of 1965 (20 U.S.C. 1078-3) for
which the application is received by an eligible lender on or after
July 1, 2006.
(f) Conforming Amendments to Direct Loan Program.--Section 455 (20
U.S.C. 1087e) is amended
(1) in subsection (a)(1) by inserting ``428C,'' after
``428B,'';
(2) in subsection (a)(2)--
(A) by striking ``and'' at the end of subparagraph
(B);
(B) by redesignating subparagraph (C) as
subparagraph (D); and
(C) by inserting after subparagraph (B) the
following:
``(C) section 428C shall be known as `Federal
Direct Consolidation Loans'; and ''; and
(3) in subsection (g)--
(A) by striking the second sentence; and
(B) by adding at the end the following new
sentences: ``To be eligible for a consolidation loan
under this part, a borrower must meet the eligibility
criteria set forth in section 428C(a)(3). The
Secretary, upon application for such a loan, shall
comply with the requirements applicable to a lender
under section 428C(b)(1)(F).''.
SEC. 2118. DEFERMENT OF STUDENT LOANS FOR MILITARY SERVICE.
(a) Federal Family Education Loans.--Section 428(b)(1)(M) (20
U.S.C. 1078(b)(1)(M)) is amended--
(1) by striking ``or'' at the end of clause (ii);
(2) by redesignating clause (iii) as clause (iv); and
(3) by inserting after clause (ii) the following new
clause:
``(iii) not in excess of 3 years during
which the borrower--
``(I) is serving on active duty
during a war or other military
operation or national emergency; or
``(II) is performing qualifying
National Guard duty during a war or
other military operation or national
emergency; or''.
(b) Direct Loans.--Section 455(f)(2) (20 U.S.C. 1087e(f)(2)) is
amended--
(1) by redesignating subparagraph (C) as subparagraph (D);
and
(2) by inserting after subparagraph (B) the following new
subparagraph:
``(C) not in excess of 3 years during which the
borrower--
``(i) is serving on active duty during a
war or other military operation or national
emergency; or
``(ii) is performing qualifying National
Guard duty during a war or other military
operation or national emergency; or''.
(c) Perkins Loans.--Section 464(c)(2)(A) (20 U.S.C.
1087dd(c)(2)(A)) is amended--
(1) by redesignating clauses (iii) and (iv) as clauses (iv)
and (v), respectively; and
(2) by inserting after clause (ii) the following new
clause:
``(iii) not in excess of 3 years during which the
borrower--
``(I) is serving on active duty during a war or
other military operation or national emergency; or
``(II) is performing qualifying National Guard duty
during a war or other military operation or national
emergency;''.
(d) Definitions.--Section 481 (20 U.S.C. 1088) is amended by adding
at the end the following new subsection:
``(d) Definitions for Military Deferments.--For purposes of parts
B, D, and E of this title:
``(1) Active duty.--The term `active duty' has the meaning
given such term in section 101(d)(1) of title 10, United States
Code, except that such term does not include active duty for
training or attendance at a service school.
``(2) Military operation.--The term `military operation'
means a contingency operation as such term is defined in
section 101(a)(13) of title 10, United States Code.
``(3) National emergency.--The term `national emergency'
means the national emergency by reason of certain terrorist
attacks declared by the President on September 14, 2001, or
subsequent national emergencies declared by the President by
reason of terrorist attacks.
``(4) Serving on active duty.--The term `serving on active
duty during a war or other military operation or national
emergency' means service by an individual who is--
``(A) a Reserve of an Armed Force ordered to active
duty under section 12301(a), 12301(g), 12302, 12304, or
12306 of title 10, United States Code, or any retired
member of an Armed Force ordered to active duty under
section 688 of such title, for service in connection
with a war or other military operation or national
emergency, regardless of the location at which such
active duty service is performed; and
``(B) any other member of an Armed Force on active
duty in connection with such emergency or subsequent
actions or conditions who has been assigned to a duty
station at a location other than the location at which
such member is normally assigned.
``(5) Qualifying national guard duty.--The term `qualifying
National Guard duty during a war or other military operation or
national emergency' means service as a member of the National
Guard on full-time National Guard duty (as defined in section
101(d)(5) of title 10, United States Code) under a call to
active service authorized by the President or the Secretary of
Defense for a period of more than 30 consecutive days under
section 502(f) of title 32, United States Code, in connection
with a war, other military operation, or a national emergency
declared by the President and supported by Federal funds.''.
(e) Rule of Construction.--Nothing in the amendments made by this
section shall be construed to authorize any refunding of any repayment
of a loan.
(f) Effective Date.--The amendments made by this section shall
apply with respect to loans for which the first disbursement is made on
or after July 1, 1993, to an individual who is a new borrower (within
the meaning of section 103 of the Higher Education Act of 1965 (20
U.S.C. 1003)) on or after such date.
SEC. 2119. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL NEED.
Section 428K (20 U.S.C. 1078-11) is amended to read as follows:
``SEC. 428K. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL NEED.
``(a) Purposes.--The purposes of this section are--
``(1) to encourage highly trained individuals to enter and
continue in service in areas of national need; and
``(2) to reduce the burden of student debt for Americans
who dedicate their careers to service in areas of national
need.
``(b) Program Authorized.--
``(1) In general.--The Secretary is authorized to carry out
a program of assuming the obligation to repay, pursuant to
subsections (c)(2) and (d), a qualified loan amount for a loan
made, insured, or guaranteed under this part or part D (other
than loans made under section 428B and 428C and comparable
loans made under part D), for any new borrower after the date
of enactment of the Higher Education Budget Reconciliation Act
of 2005, who--
``(A) has been employed full-time for at least 5
consecutive complete school, academic, or calendar
years, as appropriate, in an area of national need
described in subsection (c); and
``(B) is not in default on a loan for which the
borrower seeks forgiveness.
``(2) Award basis.--Loan repayment under this section shall
be on a first-come, first-served basis pursuant to the
designation under subsection (c) and subject to the
availability of appropriations.
``(3) Regulations.--The Secretary is authorized to issue
such regulations as may be necessary to carry out the
provisions of this section.
``(c) Areas of National Need.--
``(1) Statutory categories.--For purposes of this section,
an individual shall be treated as employed in an area of
national need if the individual is employed full-time and is
any of the following:
``(A) Early childhood educators.--An individual who
is employed as an early childhood educator in an
eligible preschool program or child care facility in a
low-income community, and who is involved directly in
the care, development and education of infants,
toddlers, or young children through age five.
``(B) Nurses.--An individual who is employed--
``(i) as a nurse in a clinical setting; or
``(ii) as a member of the nursing faculty
at an accredited school of nursing (as those
terms are defined in section 801 of the Public
Health Service Act (42 U.S.C. 296)).
``(C) Foreign language specialists.--An individual
who has obtained a baccalaureate degree in a critical
foreign language and is employed--
``(i) in an elementary or secondary school
as a teacher of a critical foreign language; or
``(ii) in an agency of the United States
Government in a position that regularly
requires the use of such critical foreign
language.
``(D) Librarians.--An individual who is employed as
a librarian in--
``(i) a public library that serves a
geographic area within which the public schools
have a combined average of 30 percent or more
of their total student enrollments composed of
children counted under section 1113(a)(5) of
the Elementary and Secondary Education Act of
1965; or
``(ii) an elementary or secondary school
which is in the school district of a local
educational agency which is eligible in such
year for assistance pursuant to title I of the
Elementary and Secondary Education Act of 1965,
and which for the purpose of this paragraph and
for that year has been determined by the
Secretary (pursuant to regulations and after
consultation with the State educational agency
of the State in which the school is located) to
be a school in which the enrollment of children
counted under section 1113(a)(5) of the
Elementary and Secondary Education Act of 1965
exceeds 30 percent of the total enrollment of
that school.
``(E) Highly qualified teachers: bilingual
education and low-income communities.--An individual
who--
``(i) is highly qualified as such term is
defined in section 9101 of the Elementary and
Secondary Education Act of 1965; and
``(ii)(I) is employed as a teacher of
bilingual education; or
``(II) is employed as a teacher for service
in a public or nonprofit private elementary or
secondary school which is in the school
district of a local educational agency which is
eligible in such year for assistance pursuant
to title I of the Elementary and Secondary
Education Act of 1965, and which for the
purpose of this paragraph and for that year has
been determined by the Secretary (pursuant to
regulations and after consultation with the
State educational agency of the State in which
the school is located) to be a school in which
the enrollment of children counted under
section 1113(a)(5) of the Elementary and
Secondary Education Act of 1965 exceeds 40
percent of the total enrollment of that school.
``(F) First responders in low-income communities.--
An individual who--
``(i) is employed as a firefighter, police
officer, or emergency medical technician; and
``(ii) serves as such in a low-income
community.
``(G) Child welfare workers.--An individual who--
``(i) has obtained a degree in social work
or a related field with a focus on serving
children and families; and
``(ii) is employed in public or private
child welfare services.
``(H) Speech-language pathologists.--An individual
who is a speech-language pathologist, who is employed
in an eligible preschool program or an elementary or
secondary school, and who has, at a minimum, a graduate
degree in speech-language pathology, or communication
sciences and disorders.
``(I) Additional areas of national need.--An
individual who is employed in an area designated by the
Secretary under paragraph (2) and has completed a
baccalaureate or advanced degree related to such area.
``(2) Designation of additional areas of national need.--
After consultation with appropriate Federal, State, and
community-based agencies and organizations, the Secretary shall
designate additional areas of national need in which an
individual may be employed full-time to be eligible for loan
repayment under this section. In making such designations, the
Secretary shall take into account the extent to which--
``(A) the national interest in the area is
compelling;
``(B) the area suffers from a critical lack of
qualified personnel; and
``(C) other Federal programs support the area
concerned.
``(d) Qualified Loan Amount.--Subject to the availability of
appropriations, the Secretary shall repay not more than $5,000 in the
aggregate of the loan obligation on a loan made under section 428 or
428H that is outstanding after the completion of the fifth consecutive
school, academic, or calendar year, as appropriate, described in
subsection (b)(1).
``(e) Construction.--Nothing in this section shall be construed to
authorize the refunding of any repayment of a loan made under section
428 or 428H.
``(f) Ineligibility of National Service Award Recipients.--No
student borrower may, for the same service, receive a benefit under
both this section and subtitle D of title I of the National and
Community Service Act of 1990 (42 U.S.C. 12601 et seq.).
``(g) Ineligibility for Double Benefits.--No borrower may receive a
reduction of loan obligations under both this section and section 428J
or 460.
``(h) Definitions.--In this section
``(1) Child care facility.--The term `child care facility'
means a facility, including a home, that--
``(A) provides for the education and care of
children from birth through age 5; and
``(B) meets any applicable State or local
government licensing, certification, approval, or
registration requirements.
``(2) Critical foreign language.--The term `critical
foreign language' includes the languages of Arabic, Korean,
Japanese, Chinese, Pashto, Persian-Farsi, Serbian-Croatian,
Russian, Portuguese, and any other language identified by the
Secretary of Education, in consultation with the Defense
Language Institute, the Foreign Service Institute, and the
National Security Education Program, as a critical foreign
language need.
``(3) Early childhood educator.--The term `early childhood
educator' means an early childhood educator employed in an
eligible preschool program who has completed a baccalaureate or
advanced degree in early childhood development, early childhood
education, or in a field related to early childhood education.
``(4) Eligible preschool program.--The term `eligible
preschool program' means a program that provides for the care,
development, and education of infants, toddlers, or young
children through age 5, meets any applicable State or local
government licensing, certification, approval, and registration
requirements, and is operated by--
``(A) a public or private school that may be
supported, sponsored, supervised, or administered by a
local educational agency;
``(B) a Head Start agency serving as a grantee
designated under the Head Start Act (42 U.S.C. 9831 et
seq.);
``(C) a nonprofit or community based organization;
or
``(D) a child care program, including a home.
``(5) Low-income community.--In this subsection, the term
`low-income community' means a community in which 70 percent of
households earn less than 85 percent of the State median
household income.
``(6) Nurse.--The term `nurse' means a nurse who meets all
of the following:
``(A) The nurse graduated from--
``(i) an accredited school of nursing (as
those terms are defined in section 801 of the
Public Health Service Act (42 U.S.C. 296));
``(ii) a nursing center; or
``(iii) an academic health center that
provides nurse training.
``(B) The nurse holds a valid and unrestricted
license to practice nursing in the State in which the
nurse practices in a clinical setting.
``(C) The nurse holds one or more of the following:
``(i) A graduate degree in nursing, or an
equivalent degree.
``(ii) A nursing degree from a collegiate
school of nursing (as defined in section 801 of
the Public Health Service Act (42 U.S.C. 296)).
``(iii) A nursing degree from an associate
degree school of nursing (as defined in section
801 of the Public Health Service Act (42 U.S.C.
296)).
``(iv) A nursing degree from a diploma
school of nursing (as defined in section 801 of
the Public Health Service Act (42 U.S.C. 296)).
``(7) Speech-language pathologist.--The term `speech-
language pathologist' means a speech-language pathologist who
meets all of the following:
``(A) the speech-language pathologist has received,
at a minimum, a graduate degree in speech-language
pathology or communication sciences and disorders from
an institution of higher education accredited by an
agency or association recognized by the Secretary
pursuant to section 496(a) of this Act; and
``(B) the speech-language pathologist meets or
exceeds the qualifications described in section
1861(ll)(3) of the Social Security Act (42 U.S.C.
1395x(3)).
``(i) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as may be necessary
for fiscal year 2006 and such sums as may be necessary for each of the
5 succeeding fiscal years.''.
SEC. 2120. UNSUBSIDIZED STAFFORD LOANS.
(a) Amendment.--Section 428H(d)(2)(C) (20 U.S.C. 1078-8(d)(2)(C))
is amended by striking ``$10,000'' and inserting ``$12,000''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to loans for which the first disbursement of principal is made on
or after July 1, 2007.
SEC. 2121. ELIMINATION OF TERMINATION DATES FROM TAXPAYER-TEACHER
PROTECTION ACT OF 2004.
(a) Extension of Limitations on Special Allowance for Loans From
the Proceeds of Tax Exempt Issues.--Section 438(b)(2)(B) (20 U.S.C.
1087-1(b)(2)(B)) is amended--
(1) in clause (iv), by striking ``and before January 1,
2006,''; and
(2) in clause (v)(II)--
(A) by striking ``and before January 1, 2006,''
each place it appears in divisions (aa) and (bb); and
(B) by striking ``, and before January 1, 2006'' in
division (cc).
(b) Additional Limitation on Special Allowance for Loans From the
Proceeds of Tax Exempt Issues.--Section 438(b)(2)(B) (20 U.S.C 1087-
1(b)(2)(B)) is further amended by adding at the end thereof the
following new clause:
``(vi) Notwithstanding clauses (i), (ii), and (v), the
quarterly rate of the special allowance shall be the rate
determined under subparagraph (A), (E), (F), (G), (H), or (I)
of this paragraph, as the case may be, for a holder of loans--
``(I) that were made or purchased on or after
October 1, 2005; or
``(II) that were not earning a quarterly rate of
special allowance determined under clauses (i) or (ii)
of subparagraph (B) of this paragraph (20 U.S.C. 1087-
1(b)(2)(b)) as of October 1, 2005.''.
(c) Elimination of Effective Date Limitation on Higher Teacher Loan
Forgiveness Benefits.--Paragraph (3) of section 3(b) of the Taxpayer-
Teacher Protection Act of 2004 (20 U.S.C. 1078-10 note) is amended by
striking ``, and before October 1, 2005''.
(d) Additional Changes to Teacher Loan Forgiveness Provisions.--
(1) FFEL provisions.--Section 428J (20 U.S.C. 1078-10) is
amended--
(A) in subsection (b)(1)(B), by inserting after
``1965'' the following: ``, or meets the requirements
of subsection (g)(3)'';
(B) in subsection (c)(3)--
(i) by striking ``and'' at the end of
subparagraph (A);
(ii) by striking the period at the end of
subparagraph (B) and inserting ``; and''; and
(iii) by inserting after subparagraph (B)
the following new subparagraph:
``(C) an elementary or secondary school teacher who
primarily teaches reading--
``(i) who meets the requirements of
subsection (b);
``(ii) who has obtained a separate reading
instruction credential from the State in which
the teacher is employed; and
``(iii) who is certified by the chief
administrative officer of the public or
nonprofit private elementary or secondary
school in which the borrower is employed to
teach reading--
``(I) as being proficient in
teaching the essential components of
reading instruction as defined in
section 1208 of the Elementary and
Secondary Education Act of 1965; and
``(II) as having such
credential.''; and
(C) in subsection (g), by adding at the end the
following new paragraph:
``(3) Private school teachers.--An individual who is
employed as a teacher in a private school and is exempt from
State certification requirements (unless otherwise applicable
under State law), may, in lieu of the requirement of subsection
(a)(1)(B), have such employment treated as qualifying
employment under this section if such individual is permitted
to and does satisfy rigorous subject knowledge and skills tests
by taking competency tests in the applicable grade levels and
subject areas. For such purposes, the competency tests taken by
such a private school teacher must be recognized by 5 or more
States for the purpose of fulfilling the highly qualified
teacher requirements under section 9101 of the Elementary and
Secondary Education Act of 1965, and the score achieved by such
teacher on each test must equal or exceed the average passing
score of those 5 States.''.
(2) Direct loan provisions.--Section 460 (20 U.S.C. 1087j)
is amended--
(A) in subsection (b)(1)(A)(ii), by inserting after
``1965'' the following: ``, or meets the requirements
of subsection (g)(3)'';
(B) in subsection (c)(3)--
(i) by striking ``and'' at the end of
subparagraph (A);
(ii) by striking the period at the end of
subparagraph (B) and inserting ``; and''; and
(iii) by inserting after subparagraph (B)
the following new subparagraph:
``(C) an elementary or secondary school teacher who
primarily teaches reading--
``(i) who meets the requirements of
subsection (b);
``(ii) who has obtained a separate reading
instruction credential from the State in which
the teacher is employed; and
``(iii) who is certified by the chief
administrative officer of the public or
nonprofit private elementary or secondary
school in which the borrower is employed to
teach reading--
``(I) as being proficient in
teaching the essential components of
reading instruction as defined in
section 1208 of the Elementary and
Secondary Education Act of 1965; and
``(II) as having such
credential.''; and
(C) in subsection (g), by adding at the end the
following new paragraph:
``(3) Private school teachers.--An individual who is
employed as a teacher in a private school and is exempt from
State certification requirements (unless otherwise applicable
under State law), may, in lieu of the requirement of subsection
(a)(1)(A)(ii), have such employment treated as qualifying
employment under this section if such individual is permitted
to and does satisfy rigorous subject knowledge and skills tests
by taking competency tests in the applicable grade levels and
subject areas. For such purposes, the competency tests taken by
such a private school teacher must be recognized by 5 or more
States for the purpose of fulfilling the highly qualified
teacher requirements under section 9101 of the Elementary and
Secondary Education Act of 1965, and the score achieved by such
teacher on each test must equal or exceed the average passing
score of those 5 States.''.
SEC. 2122. LOAN FEES FROM LENDERS.
Section 438(d)(2) (20 U.S.C. 1087-1(d)(2)) is amended to read as
follows:
``(2) Amount of loan fees.--The amount of the loan fee
which shall be deducted under paragraph (1) shall be equal to--
``(A) 0.50 percent of the principal amount of the
loan with respect to any loan under this part for which
the first disbursement was made on or after October 1,
1993, and before July 1, 2006; and
``(B) 1.0 percent of the principal amount of the
loan with respect to any loan under this part for which
the first disbursement was made on or after July 1,
2006.''.
SEC. 2123. ADDITIONAL ADMINISTRATIVE PROVISIONS.
(a) Treatment of Exempt Claims.--
(1) Insurance coverage.--Section 428(b)(1)(G) (20 U.S.C.
1078(b)(1)(G)) is amended by inserting before the semicolon at
the end the following: ``and 100 percent of the unpaid
principal amount of exempt claims as defined in subsection
(c)(1)(G)''.
(2) Treatment.--Section 428(c)(1) (20 U.S.C. 1078(c)(1)) is
amended--
(A) by redesignating subparagraph (G) as
subparagraph (H), and moving such subparagraph 2 em
spaces to the left; and
(B) by inserting after subparagraph (F) the
following new subparagraph:
``(G)(i) Notwithstanding any other provisions of this
section, in the case of exempt claims, the Secretary shall
apply the provisions of--
``(I) the fourth sentence of subparagraph (A) by
substituting `100 percent' for `95 percent';
``(II) subparagraph (B)(i) by substituting `100
percent' for `85 percent'; and
``(III) subparagraph (B)(ii) by substituting `100
percent' for `75 percent'.
``(ii) For purposes of clause (i) of this subparagraph, the
term `exempt claims' means claims with respect to loans for
which it is determined that the borrower (or the student on
whose behalf a parent has borrowed), without the lender's or
the institution's knowledge at the time the loan was made,
provided false or erroneous information or took actions that
caused the borrower or the student to be ineligible for all or
a portion of the loan or for interest benefits thereon.''.
(b) Reduction of Insurance Percentage.--
(1) Insurance percentage reduction.--Section 428(b)(1)(G)
as amended by subsection (a)(1) is further amended by inserting
after the matter inserted by such subsection the following: ``,
except, for any loan for which the first disbursement of
principal is made on or after July 1, 2006, the preceding
provisions of this subparagraph shall be applied by
substituting `96 percent' for `98 percent'''.
(2) Increase insurance for exceptional performance.--
Section 428I (20 U.S.C. 1078-9) is amended to read as follows:
``SEC. 428I. SPECIAL INSURANCE AND REINSURANCE RULES FOR EXCEPTIONAL
PERFORMANCE.
``(a) Designation of Lenders and Servicers.--
``(1) In general.--Whenever the Secretary determines that
an eligible lender or servicer meets the performance measures
required by paragraph (2), the Secretary shall designate that
eligible lender or servicer, as the case may be, for
exceptional performance. The Secretary shall notify each
appropriate guaranty agency of the eligible lenders and
servicers designated under this section.
``(2) Performance measures.--
``(A) In determining whether to award a lender or
servicer the exceptional performance designation, the
Secretary shall require that the lender or servicer be
performing at or above the 95 percentile of the
industry, and demonstrate improved performance against
the lender's or servicer's average of the last 3 years
on the factors described in subparagraph (B).
``(B) The factors on which the Secretary shall
require improvement shall include--
``(i) delinquency rates;
``(ii) the rate at which delinquent
accounts are restored to good standing;
``(iii) default rates;
``(iv) the rate of rejected claims; and
``(v) any other such measures as determined
by the Secretary.
``(C) In addition, the Secretary shall not make any
award of such a designation unless the consequence of
the designation is cost-neutral to the Federal
Government.
``(3) Additional information on lenders and servicers.--
Each appropriate guaranty agency shall provide the Secretary
with such other information in its possession regarding an
eligible lender or servicer desiring designation as may relate
to the Secretary's determination under paragraph (1), including
but not limited to any information suggesting that the
application of a lender or servicer for designation should not
be approved.
``(4) Determinations by the secretary.--
``(A) The Secretary shall designate an eligible
lender or servicer for exceptional performance if the
eligible lender or servicer meets the performance
measures required by paragraph (2).
``(B) The Secretary shall make the determination
under paragraph (1) based upon the documentation
submitted by the eligible lender or servicer as
specified in regulation, such other information as
provided by any guaranty agency under paragraph (3),
and any information in the possession of the Secretary
or submitted by any other agency or office of the
Federal Government.
``(C) The Secretary shall inform the eligible
lender or servicer and the appropriate guaranty agency
that its application for designation as an exceptional
performance lender or servicer has been approved or
disapproved.
``(5) Transition.--
``(A) Any eligible lender or servicer designated
for exceptional performance as of the day before the
date of enactment of the Higher Education Budget
Reconciliation Act of 2005 shall continue to be so
designated, and subject to the requirements of this
section as in effect on that day (including
revocation), until the performance standards described
in paragraph (2) are established.
``(B) The Secretary shall not designate any
additional eligible lenders or servicers for
exceptional performance until those performance
standards are established.
``(b) Payment to Lenders and Servicers.--A guaranty agency shall
pay, to each eligible lender or servicer (as agent for an eligible
lender) designated under subsection (a), 98 percent of the unpaid
principal and interest of all loans for which claims are submitted for
payment by that eligible lender or servicer for the one-year period
following the receipt by the guaranty agency of the notification of
designation under this section, or until the guaranty agency receives
notice from the Secretary that the designation of the lender or
servicer under subsection (a)(2) has been revoked.
``(c) Revocation Authority.--
``(1) The Secretary shall revoke the designation of a
lender or a servicer under subsection (a) if the Secretary
determines that the lender or servicer has failed to meet the
performance standards required by subsection (a)(2).
``(2) Notwithstanding any other provision of this section,
a designation under subsection (a) may be revoked at any time
by the Secretary, in the Secretary's discretion, if the
Secretary determines that the eligible lender or servicer has
failed to meet the criteria and performance standards
established by the Secretary in regulation, or if the Secretary
believes the lender or servicer may have engaged in fraud in
securing designation under subsection (a), or is failing to
service loans in accordance with program regulations.
``(d) Documentation.--Nothing in this section shall restrict or
limit the authority of guaranty agencies to require the submission of
claims documentation evidencing servicing performed on loans, except
that the guaranty agency may not require greater documentation than
that required for lenders and servicers not designated under subsection
(a).
``(e) Special Rule.--Reimbursements made by the Secretary on loans
submitted for claim by an eligible lender or loan servicer designated
for exceptional performance under this section shall not be subject to
additional review by the Secretary or repurchase by the guaranty agency
for any reason other than a determination by the Secretary that the
eligible lender or loan servicer engaged in fraud or other purposeful
misconduct in obtaining designation for exceptional performance.
``(f) Limitation.--Nothing in this section shall be construed to
affect the processing of claims on student loans of eligible lenders
not subject to this section.
``(g) Claims.--A lender or servicer designated under subsection (a)
failing to service loans or otherwise comply with applicable program
regulations shall be considered in violation of section 3729 of title
31, United States Code.
``(h) Termination.--The Secretary may terminate the designation of
lenders and servicers under this section if he determines that
termination would be in the fiscal interest of the United States.
``(i) Definitions.--As used in this section--
``(1) the term `eligible loan' means a loan made, insured,
or guaranteed under this part; and
``(2) the term `servicer' means an entity servicing and
collecting student loans that--
``(A) has substantial experience in servicing and
collecting consumer loans or student loans;
``(B) has an independent financial audit annually
which is furnished to the Secretary and any other
parties designated by the Secretary;
``(C) has business systems which are capable of
meeting the requirements of this part;
``(D) has adequate personnel who are knowledgeable
about the student loan programs authorized by this
part; and
``(E) does not have any owner, majority
shareholder, director, or officer of the entity who has
been convicted of a felony.''.
(3) Effective date of amendments.--The amendments made by
this subsection shall apply with respect to loans for which the
first disbursement of principal is made on or after July 1,
2006.
(c) Documentation of Forbearance Agreements.--Section 428(c) (20
U.S.C. 1078(c)) is further amended--
(1) in paragraph (3)(A)(i)--
(A) by striking ``in writing''; and
(B) by inserting ``and documented in accordance
with paragraph (10)'' after ``approval of the
insurer''; and
(2) by adding at the end the following new paragraph:
``(10) Documentation of forbearance agreements.--For the
purposes of paragraph (3), the terms of forbearance agreed to
by the parties shall be documented by confirming the agreement
of the borrower by notice to the borrower from the lender, and
by recording the terms in the borrower's file.''.
(d) Consolidation of Defaulted Loans.--Section 428(c) (20 U.S.C.
1078(c)) is further amended--
(1) in paragraph (2)(A)--
(A) by inserting ``(i)'' after ``including''; and
(B) by inserting before the semicolon at the end
the following: ``and (ii) requirements establishing
procedures to preclude consolidation lending from being
an excessive proportion of guaranty agency recoveries
on defaulted loans under this part'';
(2) in paragraph (2)(D), by striking ``paragraph (6)'' and
inserting ``paragraph (6)(A)''; and
(3) in paragraph (6)--
(A) by inserting ``(A)'' before ``For the purpose
of paragraph (2)(D),'';
(B) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii), respectively; and
(C) by adding at the end the following new
subparagraphs:
``(B) A guaranty agency shall--
``(i) on or after October 1, 2006--
``(I) not charge the borrower collection
costs in an amount in excess of 18.5 percent of
the outstanding principal and interest of a
defaulted loan that is paid off through
consolidation by the borrower under this title;
and
``(II) remit to the Secretary a portion of
the collection charge under subclause (I) equal
to 8.5 percent of the outstanding principal and
interest of such defaulted loan; and
``(ii) on and after October 1, 2009, remit to the
Secretary the entire amount charged under clause (i)(I)
with respect to each defaulted loan that is paid off
with excess consolidation proceeds.
``(C) For purposes of subparagraph (B), the term `excess
consolidation proceeds' means, with respect to any guaranty
agency for any Federal fiscal year beginning on or after
October 1, 2009, the proceeds of consolidation of defaulted
loans under this title that exceed 45 percent of the agency's
total collections on defaulted loans in such Federal fiscal
year.''.
(e) Collection Retention Percentages.--Clause (ii) of section
428(c)(6)(B) (20 U.S.C. 1078(c)(6)(B)), as redesignated by subsection
(d)(3) of this section, is amended to read as follows:
``(ii) an amount equal to 24 percent of such
payments for use in accordance with section 422B,
except that--
``(I) beginning on October 1, 2003, and
ending on October 1, 2006, this clause shall be
applied by substituting `23 percent' for `24
percent'; and
``(II) beginning on October 1, 2006, this
clause shall be applied by substituting `20
percent' for `24 percent'.''.
(f) Voluntary Flexible Agreements.--Section 428A (20 U.S.C. 1078-1)
is amended--
(1) in subsection (a)(1)(B), by striking ``unless the
Secretary'' and all that follows through ``designated
guarantor'';
(2) by striking paragraph (2) of subsection (a);
(3) in paragraph (4)(B) of subsection (a), by striking
``and any waivers provided to other guaranty agencies under
paragraph (2)'';
(4) by redesignating paragraphs (3) and (4) of subsection
(a) as paragraphs (2) and (3), respectively; and
(5) by striking paragraph (3) of subsection (c) and
inserting the following:
``(3) Notice to interested parties.--Once the Secretary
reaches a tentative agreement in principle under this section,
the Secretary shall publish in the Federal Register a notice
that invites interested parties to comment on the proposed
agreement. The notice shall state how to obtain a copy of the
tentative agreement in principle and shall give interested
parties no less than 30 days to provide comments. The Secretary
may consider such comments prior to providing the notices
pursuant to paragraph (2).''.
(g) Fraud: Repayment Required.--Section 428B(a)(1) (20 U.S.C. 1078-
2(a)(1)) is amended--
(1) by striking ``and'' at the end of subparagraph (A);
(2) by redesignating subparagraph (B) as subparagraph (C);
and
(3) by inserting after subparagraph (A) the following new
subparagraph:
``(B) in the case of a parent who has been
convicted of, or has pled nolo contendere or guilty to,
a crime involving fraud in obtaining funds under this
title, such parent has completed the repayment of such
funds to the Secretary, or to the holder in the case of
a loan under this title obtained by fraud; and''.
(h) Default Reduction Program.--Section 428F(a)(1) (20 U.S.C. 1078-
6(a)(1)) is amended--
(1) in subparagraph (A), by striking ``consecutive payments
for 12 months'' and inserting ``9 payments made within 20 days
of the due date during 10 consecutive months'';
(2) by redesignating subparagraph (C) as subparagraph (D);
and
(3) by inserting after subparagraph (B) the following new
subparagraph:
``(C) A guaranty agency may charge the borrower and
retain collection costs in an amount not to exceed 18.5
percent of the outstanding principal and interest at
the time of sale of a loan rehabilitated under
subparagraph (A).''.
(i) Financial and Economic Literacy.--
(1) Default reduction program.--Section 428F is further
amended by adding at the end the following:
``(c) Financial and Economic Literacy.--Where appropriate, each
program described under subsection (b) shall include making financial
and economic education materials available to the borrower.''.
(2) Program assistance for borrowers.--Section 432(k)(1)
(20 U.S.C. 1082(k)(1)) is amended by striking ``and offering''
and all that follows through the period and inserting ``,
offering loan repayment matching provisions as part of employee
benefit packages, and providing employees with financial and
economic education and counseling.''.
(j) Credit Bureau Organization Agreements.--Section 430A(a) (20
U.S.C. 1080a(a)) is amended by striking ``agreements with credit bureau
organizations'' and inserting ``an agreement with each national credit
bureau organization (as described in section 603(p) of the Fair Credit
Reporting Act)''.
(k) Uniform Administrative and Claims Procedure.--Section
432(l)(1)(H) (20 U.S.C. 1082(l)(1)(H)) is amended by inserting ``and
anticipated graduation date'' after ``status change''.
(l) Default Reduction Management.--Section 432 is further amended--
(1) by striking subsection (n); and
(2) by redesignating subsections (o) and (p) as subsections
(n) and (o), respectively.
(m) Schools as Lenders.--Paragraph (2) of section 435(d) (20 U.S.C.
1085(d)(2)) is amended to read as follows:
``(2) Requirements for eligible institutions.--
``(A) In general.--To be an eligible lender under
this part, an eligible institution--
``(i) shall employ at least one person
whose full-time responsibilities are limited to
the administration of programs of financial aid
for students attending such institution;
``(ii) shall not be a home study school;
``(iii) shall not--
``(I) make a loan to any
undergraduate student;
``(II) make a loan other than a
loan under section 428 or 428H to a
graduate or professional student; or
``(III) make a loan to a borrower
who is not enrolled at that
institution;
``(iv) shall award any contract for
financing, servicing, or administration of
loans under this title on a competitive basis;
``(v) shall offer loans that carry an
origination fee or an interest rate, or both,
that are less than such fee or rate authorized
under the provisions of this title;
``(vi) shall not have a cohort default rate
(as defined in section 435(m)) greater than 10
percent;
``(vii) shall, for any year for which the
institution engages in activities as an
eligible lender, provide for a compliance audit
conducted in accordance with section
428(b)(1)(U)(iii)(I), and the regulations
thereunder, and submit the results of such
audit to the Secretary; and
``(viii) shall use any proceeds from
special allowance payments and interest
payments from borrowers, interest subsidies
received from the Department of Education, and
any proceeds from the sale or other disposition
of loans, for need-based grant programs.
``(B) Administrative expenses.--An eligible lender
under subparagraph (A) shall be permitted to use a
portion of the proceeds described in subparagraph
(A)(viii) for reasonable and direct administrative
expenses.
``(C) Supplement, not supplant.--An eligible lender
under subparagraph (A) shall ensure that the proceeds
described in subparagraph (A)(viii) are used to
supplement, and not to supplant, non-Federal funds that
would otherwise be used for need-based grant
programs.''.
(n) Disability Determinations.--Section 437(a) (20 U.S.C. 1087(a))
is amended by adding at the end the following new sentence: ``In making
such determination of permanent and total disability, the Secretary
shall not require a borrower who has been certified as permanently and
totally disabled by the Department of Veterans Affairs or the Social
Security Administration to present further documentation of disability
for purposes of this title.''.
(o) Treatment of Falsely Certified Borrowers.--Section 437(c)(1)
(20 U.S.C. 1087(c)(1)) is amended by inserting ``or parent's
eligibility'' after ``such student's eligibility''.
(p) Perfection of Security Interests.--Section 439(d) (20 U.S.C.
1087-2(d)) is amended--
(1) by striking paragraph (3); and
(2) by redesignating paragraphs (4) and (5) as paragraphs
(3) and (4), respectively.
(q) Additional Technical Amendments.--
(1) Section 428(a)(2)(A) (20 U.S.C. 1078(a)(2)(A)) is
amended--
(A) by striking ``and'' at the end of subclause
(II) of clause (i); and
(B) by moving the margin of clause (iii) two ems to
the left.
(2) Section 428(a)(3)(A)(v) (20 U.S.C. 1078(a)(3)(A)(v)) is
amended--
(A) by striking ``or'' at the end of subclause (I);
(B) by striking the period at the end of subclause
(II) and inserting ``; or''; and
(C) by adding after subclause (II) the following
new subclause:
``(III) in the case of a loan disbursed through an
escrow agent, 3 days before the first disbursement of
the loan.''.
(3) Section 428(c)(1)(A) (20 U.S.C. 1078(c)(1)(A)) is
amended by striking ``45 days'' in the last sentence and
inserting ``30 days''.
(4) Section 428(i)(1) (20 U.S.C. 1078(i)(1)) is amended by
striking ``21 days'' in the third sentence and inserting ``10
days''.
(5) Section 428G(e) (20 U.S.C. 1078-7(e)) is amended by
striking ``, made to a student to cover the cost of attendance
at an eligible institution outside the United States,''.
(6) Section 428H(e) (20 U.S.C. 1078-8(e)) is amended by
striking paragraph (6) and inserting the following:
``(6) Time limits on billing interest.--A lender may not
receive interest on a loan under this section from a borrower
for any period that precedes the dates described in section
428(a)(3)(A)(v).''.
(7) Section 432(m)(1)(B) (20 U.S.C. 1082(m)(1)(B)) is
amended--
(A) in clause (i), by inserting ``and'' after the
semicolon at the end; and
(B) in clause (ii), by striking ``; and'' and
inserting a period.
(8) Section 438(b)(4)(B) (20 U.S.C. 1087-1(b)(4)(B)) is
amended by striking ``shall be computed'' and all that follows
through ``to the loan'' and inserting ``described in
subparagraph (A) shall be computed using the interest rate
described in section 3902(a) of title 31, United States
Code,''.
SEC. 2124. FUNDS FOR ADMINISTRATIVE EXPENSES.
Section 458 is amended to read as follows:
``SEC. 458. FUNDS FOR ADMINISTRATIVE EXPENSES.
``(a) Administrative Expenses.--
``(1) Mandatory funds for fiscal year 2006.--For fiscal
year 2006, there shall be available to the Secretary, from
funds not otherwise appropriated, funds to be obligated for--
``(A) administrative costs under this part and part
B, including the costs of the direct student loan
programs under this part; and
``(B) account maintenance fees payable to guaranty
agencies under part B and calculated in accordance with
subsections (b) and (c),
not to exceed (from such funds not otherwise appropriated)
$820,000,000 in fiscal year 2006.
``(2) Authorization for administrative costs beginning in
fiscal year 2007.--For each of the fiscal years 2007 through
2011, there are authorized to be appropriated such sums as may
be necessary for administrative costs under this part and part
B, including the costs of the direct student loan programs
under this part.
``(3) Continuing mandatory funds for account maintenance
fees.--For each of the fiscal years 2007 through 2011, there
shall be available to the Secretary, from funds not otherwise
appropriated, funds to be obligated for account maintenance
fees payable to guaranty agencies under part B and calculated
in accordance with subsection (b).
``(4) Account mainenance fees.--Account maintenance fees
under paragraph (3) shall be paid quarterly and deposited in
the Agency Operating Fund established under section 422B.
``(5) Carryover.--The Secretary may carry over funds made
available under this section to a subsequent fiscal year.
``(b) Calculation Basis.--Account maintenance fees payable to
guaranty agencies under subsection (a)(3) shall not exceed the basis of
0.10 percent of the original principal amount of outstanding loans on
which insurance was issued under part B.
``(c) Budget Justification.--No funds may be expended under this
section unless the Secretary includes in the Department of Education's
annual budget justification to Congress a detailed description of the
specific activities for which the funds made available by this section
have been used in the prior and current years (if applicable), the
activities and costs planned for the budget year, and the projection of
activities and costs for each remaining year for which administrative
expenses under this section are made available.''.
SEC. 2125. SIGNIFICANTLY SIMPLIFYING THE STUDENT AID APPLICATION
PROCESS.
(a) Expanding the Auto-Zero and Further Simplifying the Simplified
Needs Test.--
(1) Simplified needs test.--Section 479 (20 U.S.C. 1087ss)
is amended--
(A) in subsection (b)--
(i) in paragraph (1)--
(I) by striking clause (i) of
subparagraph (A) and inserting the
following:
``(i) the student's parents file, or are
eligible to file, a form described in paragraph
(3) or certify that they are not required to
file an income tax return, and the student
files, or is eligible to file, such a form or
certifies that the student is not required to
file an income tax return, or the student's
parents, or the student, received benefits at
some time during the previous 12-month period
under a means-tested Federal benefit program as
defined under subsection (d); and''; and
(II) by striking clause (i) of
subparagraph (B) and inserting the
following:
``(i) the student (and the student's
spouse, if any) files, or is eligible to file,
a form described in paragraph (3) or certifies
that the student (and the student's spouse, if
any) is not required to file an income tax
return, or the student (and the student's
spouse, if any) received benefits at some time
during the previous 12-month period under a
means-tested Federal benefit program as defined
under subsection (d); and''; and
(ii) in paragraph (3), by striking ``A
student or family files a form described in
this subsection, or subsection (c), as the case
may be, if the student or family, respectively,
files'' and inserting ``In the case of an
independent student, the student, or in the
case of a dependent student, the parent, files
a form described in this subsection, or
subsection (c), as the case may be, if the
student or parent, as appropriate, files'';
(B) in subsection (c)--
(i) in paragraph (1), by striking
subparagraph (A) and inserting the following:
``(A) the student's parents file, or are eligible
to file, a form described in subsection (b)(3) or
certify that they are not required to file an income
tax return, and the student files, or is eligible to
file, such a form or certifies that the student is not
required to file an income tax return, or the student's
parents, or the student, received benefits at some time
during the previous 12-month period under a means-
tested Federal benefit program as defined in subsection
(d); and''; and
(ii) in paragraph (2), by striking
subparagraph (A) and inserting the following:
``(A) the student (and the student's spouse, if
any) files, or is eligible to file, a form described in
subsection (b)(3) or certifies that the student (and
the student's spouse, if any) is not required to file
an income tax return, or the student (and the student's
spouse, if any) received benefits at some time during
the previous 12-month period under a means-tested
Federal benefit program as defined in subsection (d);
and''; and
(C) by adding at the end the following new
subsections:
``(d) Definition of Means-Tested Federal Benefit Program.--For the
purposes of this section, the term `means-tested Federal benefit
program' means a mandatory spending program of the Federal Government,
other than a program under this title, in which eligibility for the
program's benefits, or the amount of such benefits, or both, are
determined on the basis of income or resources of the individual or
family seeking the benefit, and may include such programs as the
supplemental security income program under title XVI of the Social
Security Act, the food stamp program under the Food Stamp Act of 1977,
the free and reduced price school lunch program established under the
Richard B. Russell National School Lunch Act, the temporary assistance
to needy families program established under part A of title IV of the
Social Security Act, and the women, infants and children program
established under Section 17 of the Child Nutrition Act of 1966, and
other programs identified by the Secretary.
``(e) Reporting Requirements.--The Secretary shall regularly
evaluate the impact of the eligibility guidelines in subsections
(b)(1)(A)(i), (b)(1)(B)(i), (c)(1)(A) and (c)(2)(A) of this section. In
particular, the Secretary shall evaluate whether using receipt of
benefits under a means-tested Federal benefit program (as defined in
subsection (d)) for eligibility continues to target the Simplified
Needs Test, to the greatest extent possible, for use by low- and
moderate-income students and their families.''.
(b) Improvements to Paper and Electronic Forms.--
(1) Common financial aid form development and processing.--
Section 483(a) (20 U.S.C. 1090(a)) is amended--
(A) by striking paragraphs (1), (2), and (5);
(B) by redesignating paragraphs (3), (4), (6), and
(7), as paragraphs (9), (10), (11), and (12),
respectively;
(C) by inserting before paragraph (9), as
redesignated by subparagraph (B), the following:
``(1) In general.--The Secretary, in cooperation with
representatives of agencies and organizations involved in
student financial assistance, shall produce, distribute, and
process free of charge common financial reporting forms as
described in this subsection to be used for application and
reapplication to determine the need and eligibility of a
student for financial assistance under parts A through E (other
than subpart 4 of part A). These forms shall be made available
to applicants in both paper and electronic formats and shall be
referred to as the `Free Application for Federal Student Aid'
or the `FAFSA' .
``(2) Early estimates.--
``(A) In general.--The Secretary shall permit
applicants to complete such forms as described in this
subsection in the 4 years prior to enrollment in order
to obtain a non-binding estimate of the family
contribution, as defined in section 473. The estimate
shall clearly and conspicuously indicate that it is
only an estimate of family contribution, and may not
reflect the actual family contribution of the applicant
that shall be used to determine the grant, loan, or
work assistance that the applicant may receive under
this title when enrolled in a program of postsecondary
education. Such applicants shall be permitted to update
information submitted on forms described in this
subsection using the process required under paragraph
(5)(A).
``(B) Evaluation.--Two years after the early
estimates are implemented under this paragraph and from
data gathered from the early estimates, the Secretary
shall evaluate the differences between initial, non-
binding early estimates and the final financial aid
award made available under this title.
``(C) Report.--The Secretary shall provide a report
to the authorizing committees on the results of the
evaluation.
``(3) Paper format.--
``(A) In general.--The Secretary shall produce,
distribute, and process common forms in paper format to
meet the requirements of paragraph (1). The Secretary
shall develop a common paper form for applicants who do
not meet the requirements of subparagraph (B).
``(B) EZ fafsa.--
``(i) In general.--The Secretary shall
develop and use a simplified paper application
form, to be known as the `EZ FAFSA', to be used
for applicants meeting the requirements of
section 479(c).
``(ii) Reduced data requirements.--The form
under this subparagraph shall permit an
applicant to submit, for financial assistance
purposes, only the data elements required to
make a determination of whether the applicant
meets the requirements under section 479(c).
``(iii) State data.--The Secretary shall
include on the form under this subparagraph
such data items as may be necessary to award
State financial assistance, as provided under
paragraph (6), except that the Secretary shall
not include a State's data if that State does
not permit its applicants for State assistance
to use the form under this subparagraph.
``(iv) Free availability and processing.--
The provisions of paragraph (7) shall apply to
the form under this subparagraph, and the data
collected by means of the form under this
subparagraph shall be available to institutions
of higher education, guaranty agencies, and
States in accordance with paragraph (9).
``(v) Testing.--The Secretary shall conduct
appropriate field testing on the form under
this subparagraph.
``(C) Promoting the use of electronic fafsa.--
``(i) In general.--The Secretary shall--
``(I) develop a form that uses skip
logic to simplify the application
process for applicants; and
``(II) make all efforts to
encourage applicants to utilize the
electronic forms described in paragraph
(4).
``(ii) Maintenance of the fafsa in a
printable electronic file.--The Secretary shall
maintain a version of the paper forms described
in subparagraphs (A) and (B) in a printable
electronic file that is easily portable. The
printable electronic file will be made easily
accessible and downloadable to students on the
same website used to provide students with the
electronic application forms described in
paragraph (4) of this subsection. The Secretary
shall enable students to submit a form created
under this subparagraph that is downloaded and
printed from an electronic file format in order
to meet the filing requirements of this section
and in order to receive aid from programs under
this title.
``(iii) Reporting requirement.--The
Secretary shall report annually to Congress on
the impact of the digital divide on students
completing applications for title IV aid
described under this paragraph and paragraph
(4). The Secretary will also report on the
steps taken to eliminate the digital divide and
phase out the paper form described in
subparagraph (A) of this paragraph. The
Secretary's report will specifically address
the impact of the digital divide on the
following student populations: dependent
students, independent students without
dependents, and independent students with
dependents other than a spouse.
``(4) Electronic format.--
``(A) In general.--The Secretary shall produce,
distribute, and process common forms in electronic
format to meet the requirements of paragraph (1). The
Secretary shall develop common electronic forms for
applicants who do not meet the requirements of
subparagraph (C) of this paragraph.
``(B) State data.--The Secretary shall include on
the common electronic forms space for information that
needs to be submitted from the applicant to be eligible
for State financial assistance, as provided under
paragraph (6), except the Secretary shall not require
applicants to complete data required by any State other
than the applicant's State of residence.
``(C) Simplified applications: fafsa on the web.--
``(i) In general.--The Secretary shall
develop and use a simplified electronic
application form to be used by applicants
meeting the requirements under subsection (c)
of section 479 and an additional, separate
simplified electronic application form to be
used by applicants meeting the requirements
under subsection (b) of section 479.
``(ii) Reduced data requirements.--The
simplified electronic application forms shall
permit an applicant to submit for financial
assistance purposes only the data elements
required to make a determination of whether the
applicant meets the requirements under
subsection (b) or (c) of section 479.
``(iii) State data.--The Secretary shall
include on the simplified electronic
application forms such data items as may be
necessary to award state financial assistance,
as provided under paragraph (6), except that
the Secretary shall not require applicants to
complete data required by any State other than
the applicant's State of residence.
``(iv) Availability and processing.--The
data collected by means of the simplified
electronic application forms shall be available
to institutions of higher education, guaranty
agencies, and States in accordance with
paragraph (9).
``(v) Testing.--The Secretary shall conduct
appropriate field testing on the forms
developed under this subparagraph.
``(D) Use of forms.--Nothing in this subsection
shall be construed to prohibit the use of the forms
developed by the Secretary pursuant to this paragraph
by an eligible institution, eligible lender, guaranty
agency, State grant agency, private computer software
provider, a consortium thereof, or such other entities
as the Secretary may designate.
``(E) Privacy.--The Secretary shall ensure that
data collection under this paragraph complies with
section 552a of title 5, United States Code, and that
any entity using the electronic version of the forms
developed by the Secretary pursuant to this paragraph
shall maintain reasonable and appropriate
administrative, technical, and physical safeguards to
ensure the integrity and confidentiality of the
information, and to protect against security threats,
or unauthorized uses or disclosures of the information
provided on the electronic version of the forms. Data
collected by such electronic version of the forms shall
be used only for the application, award, and
administration of aid awarded under this title, State
aid, or aid awarded by eligible institutions or such
entities as the Secretary may designate. No data
collected by such electronic version of the forms shall
be used for making final aid awards under this title
until such data have been processed by the Secretary or
a contractor or designee of the Secretary, and an
expected family contribution has been calculated by the
Secretary, except as may be permitted under this title.
``(F) Signature.--Notwithstanding any other
provision of this Act, the Secretary may permit an
electronic form under this paragraph to be submitted
with an electronic signature.
``(5) Streamlining.--
``(A) Streamlined reapplication process.--
``(i) In general.--The Secretary shall
develop streamlined reapplication forms and
processes, including both paper and electronic
reapplication processes, consistent with the
requirements of this subsection, for an
applicant who applies for financial assistance
under this title--
``(I) in the academic year
succeeding the year in which such
applicant first applied for financial
assistance under this title; or
``(II) in any succeeding academic
years.
``(ii) Mechanisms for reapplication.--The
Secretary shall develop appropriate mechanisms
to support reapplication.
``(iii) Identification of updated data.--
The Secretary shall determine, in cooperation
with States, institutions of higher education,
agencies, and organizations involved in student
financial assistance, the data elements that
can be updated from the previous academic
year's application.
``(iv) Reduced data authorized.--Nothing in
this title shall be construed as limiting the
authority of the Secretary to reduce the number
of data elements required of reapplicants.
``(v) Zero family contribution.--Applicants
determined to have a zero family contribution
pursuant to section 479(c) shall not be
required to provide any financial data in a
reapplication form, except that which is
necessary to determine eligibility under such
section.
``(B) Reduction of data elements.--
``(i) Reduction encouraged.--Of the number
of data elements on the FAFSA on the date of
enactment of the Higher Education Budget
Reconciliation Act of 2005 (including questions
on the FAFSA for the purposes described in
paragraph (6)), the Secretary, in cooperation
with representatives of agencies and
organizations involved in student financial
assistance, shall continue to reduce the number
of such data elements following the date of
enactment. Reductions of data elements under
paragraph (3)(B), (4)(C), or (5)(A)(iv) shall
not be counted towards the reduction referred
to in this paragraph unless those data elements
are reduced for all applicants.
``(ii) Report.--The Secretary shall
annually report to the House of Representatives
and the Senate on the progress made of reducing
data elements.
``(6) State requirements.--
``(A) In general.--The Secretary shall include on
the forms developed under this subsection, such State-
specific data items as the Secretary determines are
necessary to meet State requirements for State need-
based financial aid under section 415C, except as
provided in paragraphs (3)(B)(iii) and (4)(C)(iii) of
this subsection. Such items shall be selected in
consultation with State agencies in order to assist in
the awarding of State financial assistance in
accordance with the terms of this subsection, except as
provided in paragraphs (3)(B)(iii) and (4)(C)(iii) of
this subsection. The number of such data items shall
not be less than the number included on the form on
October 7, 1998, unless a State notifies the Secretary
that the State no longer requires those data items for
the distribution of State need-based financial aid.
``(B) Annual review.--The Secretary shall conduct
an annual review process to determine which forms and
data items the States require to award State need-based
financial aid and other application requirements that
the States may impose.
``(C) State use of simplified forms.--The Secretary
shall encourage States to take such steps as necessary
to encourage the use of simplified application forms,
including those described in paragraphs (3)(B) and
(4)(C), to meet the requirements under subsection (b)
or (c) of section 479.
``(D) Federal register notice.--The Secretary shall
publish on an annual basis a notice in the Federal
Register requiring State agencies to inform the
Secretary--
``(i) if the State agency is unable to
permit applicants to utilize the simplified
application forms described in paragraphs
(3)(B) and (4)(C); and
``(ii) of the State-specific data that the
State agency requires for delivery of State
need-based financial aid.
``(E) State notification to the secretary.--
``(i) In general.--Each State agency shall
notify the Secretary--
``(I) whether the State permits an
applicant to file a form described in
paragraph (3)(B) or paragraph (4)(C) of
this subsection for purposes of
determining eligibility for State need-
based financial aid; and
``(II) the State-specific data that
the State agency requires for delivery
of State need-based financial aid.
``(ii) Acceptance of forms.--In the event
that a State does not permit an applicant to
file a form described in paragraph (3)(B) or
paragraph (4)(C) of this subsection for
purposes of determining eligibility for State
need-based financial aid--
``(I) the State shall notify the
Secretary if the State is not permitted
to do so because of either State law or
because of agency policy; and
``(II) the notification under
subclause (I) shall include an estimate
of the program cost to permit
applicants to complete simplified
application forms under paragraphs
(3)(B) and paragraph (4)(C) of this
subsection.
``(iii) Lack of notification by the
state.--If a State does not notify the
Secretary pursuant to clause (i), the Secretary
shall--
``(I) permit residents of that
State to complete simplified
application forms under paragraphs
(3)(B) and paragraph (4)(C) of this
subsection; and
``(II) not require any resident of
that State to complete any data
previously required by that State under
this section.
``(7) Charges to students and parents for use of forms
prohibited.--
``(A) Fees prohibited.--The FAFSA, in whatever form
(including the EZ-FAFSA, paper, electronic, simplified,
or reapplication), shall be produced, distributed, and
processed by the Secretary and no parent or student
shall be charged a fee by any entity for the
collection, processing, or delivery of financial aid
through the use of the FAFSA. The need and eligibility
of a student for financial assistance under parts A
through E of this title (other than under subpart 4 of
part A) may only be determined by using the FAFSA
developed by the Secretary pursuant to this subsection.
No student may receive assistance under parts A through
E of this title (other than under subpart 4 of part A),
except by use of the FAFSA developed by the Secretary
pursuant to this subsection. No data collected on a
form, worksheet, or other document for which a fee is
charged shall be used to complete the FAFSA.
``(B) Notice.--Any entity that provides to students
or parents, or charges students or parents for, any
value-added services with respect to or in connection
with the FAFSA, such as completion of the FAFSA,
submission of the FAFSA, or tracking of the FAFSA for a
student, shall provide to students and parents clear
and conspicuous notice that--
``(i) the FAFSA is a free Federal student
aid application;
``(ii) the FAFSA can be completed without
professional assistance; and
``(iii) includes the current Internet
address for the FAFSA on the Department's web
site.
``(8) Application processing cycle.--The Secretary shall
enable students to submit a form created under this subsection
in order to meet the filing requirements of this section and in
order to receive aid from programs under this title and shall
initiate the processing of applications under this subsection
as early as practicable prior to January 1 of the student's
planned year of enrollment.''.
(2) Master calendar.--Section 482(a)(1)(B) (20 U.S.C. 1089)
is amended to read as follows:
``(B) by March 1: proposed modifications, updates,
and notices pursuant to sections 478, 479(c)(2)(C), and
483(a)(6) published in the Federal Register;''.
(c) Increasing Access to Technology.--Section 483 (20 U.S.C. 1090)
is further amended by adding at the end the following:
``(f) Addressing the Digital Divide.--The Secretary shall utilize
savings accrued by moving more applicants to the electronic forms
described in subsection (a)(4) to improve access to the electronic
forms described in subsection (a)(4) for applicants meeting the
requirements of section 479(c).''.
(d) Expanding the Definition of an Independent Student.--Section
480(d) (20 U.S.C.1087vv(d)) is amended by striking paragraph (2) and
inserting the following:
``(2) is an orphan, in foster care, or a ward of the court,
or was in foster care or a ward of the court until the
individual reached the age of 18;''.
SEC. 2126. ADDITIONAL NEED ANALYSIS AMENDMENTS.
(a) Income Protection Allowance for Dependent Students.----
(1) Amendment.--Section 475(g)(2)(D) (20 U.S.C.
1087oo(g)(2)(D)) is amended by striking ``$2,200'' and
inserting ``$3,000''.
(2) Conforming amendment.--Section 478(b) (20 U.S.C.
1087rr(b)) is amended by adding at the end the following new
paragraph:
``(3) Revised amounts after increase.--Notwithstanding
paragraph (2), for each academic year after academic year 2006-
2007, the Secretary shall publish in the Federal Register a
revised income protection allowance for the purpose of section
475(g)(2)(D). Such revised allowance shall be developed by
increasing the dollar amount contained in such section by a
percentage equal to the estimated percentage increase in the
Consumer Price Index (as determined by the Secretary) between
December 2005 and the December next preceding the beginning of
such academic year, and rounding the result to the nearest
$10.''.
(3) Effective date.--The amendments made by this subsection
shall apply with respect to determinations of need for periods
of enrollment beginning on or after July 1, 2006.
(b) Employment Expense Allowance.--Section 478(h) (20 U.S.C.
1087rr(h)) is amended--
(1) by striking ``476(b)(4)(B),''; and
(2) by striking ``meals away from home, apparel and upkeep,
transportation, and housekeeping services'' and inserting
``food away from home, apparel, transportation, and household
furnishings and operations''.
(c) Discretion of Student Financial Aid Administrators.--Section
479A(a) (20 U.S.C. 1087tt(a)) is amended--
(1) by striking ``(a) In general.--'' and inserting the
following:
``(a) Authority to Make Adjustments.--
``(1) Adjustments for special circumstances.--'';
(2) by inserting before ``Special circumstances may'' the
following:
``(2) Special circumstances defined.--'';
(3) by inserting ``a student's status as a ward of the
court at any time prior to attaining 18 years of age, a
student's status as an individual who was adopted at or after
age 13, a student's status as a homeless or unaccompanied youth
(as defined in section 725 of the McKinney-Vento Homeless
Assistance Act),'' after ``487,'';
(4) by inserting before ``Adequate documentation'' the
following:
``(3) Documentation and use of supplementary information.--
''; and
(5) by inserting before ``No student'' the following:
``(4) Fees for supplementary information prohibited.--''.
(d) Treating Active Duty Members of the Armed Forces as Independent
Students.--Section 480(d)(3) (20 U.S.C. 1087vv(d)(3)) is amended by
inserting before the semicolon at the end the following: ``or is
currently serving on active duty in the Armed Forces for other than
training purposes''.
(e) Excludable Income.--Section 480(e) (20 U.S.C. 1087vv(e)) is
amended--
(1) by striking ``and'' at the end of paragraph (3);
(2) by striking the period at the end of paragraph (4) and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(5) any part of any distribution from a qualified tuition
program established under section 529 of the Internal Revenue
Code of 1986 that is not includable in gross income under such
section 529.''.
(f) Treatment of Savings Plans.--
(1) Amendment.--Section 480(f) (20 U.S.C. 1087vv(f)) is
amended--
(A) in paragraph (1), by inserting ``qualified
tuition programs established under section 529 of the
Internal Revenue Code of 1986 (26 U.S.C. 529), except
as provided in paragraph (2),'' after ``tax
shelters,'';
(B) by redesignating paragraph (2) as paragraph
(3); and
(C) by inserting after paragraph (1) the following
new paragraph:
``(2) A qualified tuition program shall not be considered an asset
of a dependent student under section 475 of this part. The value of a
qualified tuition program for purposes of determining the assets of
parents or independent students shall be--
``(A) the refund value of any tuition credits or
certificates purchased under section 529 of the Internal
Revenue Code of 1986 (26 U.S.C. 529) on behalf of a
beneficiary; or
``(B) the current balance of any account which is
established under such section for the purpose of meeting the
qualified higher education expenses of the designated
beneficiary of the account.''.
(2) Conforming amendment.--Section 480(j) (20 U.S.C.
1087vv(j)) is amended--
(A) by striking ``; Tuition Prepayment Plans'' in
the heading of such subsection;
(B) by striking paragraph (2);
(C) in paragraph (3), by inserting ``, or a
distribution that is not includable in gross income
under section 529 of such Code,'' after ``1986''; and
(D) by redesignating paragraph (3) as paragraph
(2).
(g) Treatment of Family Ownership of Small Businesses.--Section
480(f)(3) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(f)(3)),
as redesignated by subsection (f) of this section, is amended--
(1) in subparagraph (A), by striking ``or'';
(2) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(C) a small business with not more than 100 full-time or
full-time equivalent employees (or any part of such a small
business) that is owned and controlled by the family.''.
(h) Designated Assistance.--Section 480(j) (20 U.S.C. 1087vv(j)) is
amended by adding after paragraph (2) (as redesignated by subsection
(f)(2)(D) of this section) the following new paragraph:
``(3) Notwithstanding paragraph (1) and section 472, assistance not
received under this title may be excluded from both estimated financial
assistance and cost of attendance, if that assistance is provided by a
State and is designated by such State to offset a specific component of
the cost of attendance. If that assistance is excluded from either
estimated financial assistance or cost of attendance, it shall be
excluded from both.''.
SEC. 2127. DEFINITION OF ELIGIBLE PROGRAM.
Section 481(b) (20 U.S.C. 1088(b)) is amended by adding at the end
the following new paragraph:
``(3) For purposes of this title, an eligible program includes an
instructional program that utilizes direct assessment of student
learning, or recognizes the direct assessment of student learning, in
lieu of credit hours or clock hours as the measure of student learning.
In the case of a program being determined eligible for the first time
under this paragraph, such determination shall be made by the Secretary
before such program is considered to be eligible. The Secretary shall
provide an annual report to Congress identifying the programs made
eligible under this paragraph.''.
SEC. 2128. DISTANCE EDUCATION.
(a) Distance Education: Eligible Program.--Section 481(b) (20
U.S.C. 1088(b)) is amended by adding after paragraph (3) (as added by
section 2127 of this Act) the following new paragraph:
``(4) An otherwise eligible program that is offered in whole or in
part through telecommunications is eligible for the purposes of this
title if the program is offered by an institution, other than a foreign
institution, that has been evaluated and determined (before or after
the date of enactment of this paragraph) to have the capability to
effectively deliver distance education programs by an accrediting
agency or association that--
``(A) is recognized by the Secretary under subpart 2 of
Part H; and
``(B) has evaluation of distance education programs within
the scope of its recognition, as described in section
496(n)(3).''.
(b) Correspondence Courses.--Section 484(l)(1) (20 U.S.C.
1091(l)(1)) is amended--
(1) in subparagraph (A)--
(A) by striking ``for a program of study of 1 year
or longer''; and
(B) by striking ``unless the total'' and all that
follows through ``courses at the institution''; and
(2) by amending subparagraph (B) to read as follows:
``(B) Exception.--Subparagraph (A) does not apply
to an institution or school described in section
3(3)(C) of the Carl D. Perkins Vocational and Technical
Education Act of 1998.''.
SEC. 2129. STUDENT ELIGIBILITY.
(a) Fraud: Repayment Required.--Section 484(a) (20 U.S.C. 1091(a))
is amended--
(1) by striking the period at the end of paragraph (5) and
inserting ``; and''; and
(2) by adding at the end the following new paragraph:
``(6) if the student has been convicted of, or has pled
nolo contendere or guilty to, a crime involving fraud in
obtaining funds under this title, have completed the repayment
of such funds to the Secretary, or to the holder in the case of
a loan under this title obtained by fraud.''.
(b) Technical Amendment.--Section 484(b)(5) (20 U.S.C. 1091(b)(5))
is amended by inserting ``or parent (on behalf of a student)'' after
``student''.
(c) Loan Ineligibility Based on Involuntary Civil Commitment for
Sexual Offenses.--Section 484(b)(5) (20 U.S.C. 1091(b)(5)) is further
amended by inserting before the period the following: ``, and no
student who is subject to an involuntary civil commitment upon
completion of a period of incarceration for a sexual offense (as
determined under regulations of the Secretary) is eligible to receive a
loan under this title''.
(d) Freely Associated States.--Section 484(j) (20 U.S.C. 1091(j))
is amended by inserting ``and shall be eligible only for assistance
under subpart 1 of part A thereafter,'' after ``part C,''.
(e) Verification of Income Date.--Paragraph (1) of section 484(q)
(20 U.S.C. 1091(q)) is amended to read as follows:
``(1) Confirmation with irs.--The Secretary of Education,
in cooperation with the Secretary of the Treasury, is
authorized to confirm with the Internal Revenue Service the
information specified in section 6103(l)(13) of the Internal
Revenue Code of 1986 reported by applicants (including parents)
under this title on their Federal income tax returns for the
purpose of verifying the information reported by applicants on
student financial aid applications.''.
(f) Suspension of Eligibility for Drug Offenses.--Section 484(r)(1)
(20 U.S.C. 1091(r)(1)) is amended by striking everything preceding the
table and inserting the following:
``(1) In general.--A student who is convicted of any
offense under any Federal or State law involving the possession
or sale of a controlled substance for conduct that occurred
during a period of enrollment for which the student was
receiving any grant, loan, or work assistance under this title
shall not be eligible to receive any grant, loan, or work
assistance under this title from the date of that conviction
for the period of time specified in the following table:''.
SEC. 2130. INSTITUTIONAL REFUNDS.
Section 484B (20 U.S.C. 1091b) is amended--
(1) in subsection (a)(1), by inserting ``subpart 4 of part
A or'' after ``received under'';
(2) in subsection (a)(2), by striking ``takes a leave'' and
by inserting ``takes one or more leaves'';
(3) in subsection (a)(3)(B)(ii), by inserting ``(as
determined in accordance with subsection (d))'' after ``student
has completed'';
(4) in subsection (a)(4), by amending subparagraph (A) to
read as follows:
``(A) In general.--After determining the
eligibility of the student for a late disbursement or
post-withdrawal disbursement (as required in
regulations prescribed by the Secretary), the
institution of higher education shall contact the
borrower and obtain confirmation that the loan funds
are still required by the borrower. In making such
contact, the institution shall explain to the borrower
the borrower's obligation to repay the funds following
any such disbursement. The institution shall document
in the borrower's file the result of such contact and
the final determination made concerning such
disbursement.'';
(5) in subsection (b)(1), by inserting ``no later than 45
days from the determination of withdrawal'' after ``return'';
(6) in subsection (b)(2), by amending subparagraph (C) to
read as follows:
``(C) Grant overpayment requirements.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), a student shall only
be required to return grant assistance in the
amount (if any) by which--
``(I) the amount to be returned by
the student (as determined under
subparagraphs (A) and (B)), exceeds
``(II) 50 percent of the total
grant assistance received by the
student under this title for the
payment period or period of enrollment.
``(ii) Minimum.--A student shall not be
required to return amounts of $50 or less.'';
and
(7) in subsection (d), by striking ``(a)(3)(B)(i)'' and
inserting ``(a)(3)(B)''.
SEC. 2131. COLLEGE ACCESS INITIATIVE.
Part G is further amended by inserting after section 485C (20
U.S.C. 1092c) the following new section:
``SEC. 485D. COLLEGE ACCESS INITIATIVE.
``(a) State-by-State Information.--The Secretary shall direct each
guaranty agency with which the Secretary has an agreement under section
428(c) to provide to the Secretary the information necessary for the
development of web links and access for students and families to a
comprehensive listing of the postsecondary education opportunities,
programs, publications, Internet Web sites, and other services
available in the States for which such agency serves as the designated
guarantor.
``(b) Guaranty Agency Activities.--
``(1) Plan and activity required.--Each guaranty agency
with which the Secretary has an agreement under section 428(c)
shall develop a plan and undertake the activity necessary to
gather the information required under subsection (a) and to
make such information available to the public and to the
Secretary in a form and manner as prescribed by the Secretary.
``(2) Activities.--Each guaranty agency shall undertake
such activities as are necessary to promote access to
postsecondary education for students through providing
information on college planning, career preparation, and paying
for college. The guaranty agency shall publicize such
information and coordinate such activities with other entities
that either provide or distribute such information in the
States for which such guaranty agency serves as the designated
guarantor.
``(3) Funding.--The activities required by this section may
be funded from the guaranty agency's operating account
established pursuant to section 422B and, to the extent funds
remain, from earnings on the restricted account established
pursuant to section 422(h)(4).
``(c) Access to Information.--
``(1) Secretary's responsibility.--The Secretary shall
ensure the availability of the information provided by the
guaranty agencies in accordance with this section to students,
parents, and other interested individuals, through web links or
other methods prescribed by the Secretary.
``(2) Guaranty agency responsibility.--The guaranty
agencies shall ensure that the information required by this
section is available without charge in printed format for
students and parents requesting such information.
``(3) Publicity.--Within 270 days after the date of
enactment of the Higher Education Budget Reconciliation Act of
2005, the Secretary and guaranty agencies shall publicize the
availability of the information required by this section, with
special emphasis on ensuring that populations that are
traditionally underrepresented in postsecondary education are
made aware of the availability of such information.''.
SEC. 2132. CANCELLATION OF STUDENT LOAN INDEBTEDNESS FOR SURVIVORS OF
VICTIMS OF THE SEPTEMBER 11, 2001, ATTACKS.
(a) Definitions.--For purposes of this section:
(1) Eligible public servant.--The term ``eligible public
servant'' means an individual who, as determined in accordance
with regulations of the Secretary--
(A) served as a police officer, firefighter, other
safety or rescue personnel, or as a member of the Armed
Forces; and
(B) died (or dies) or became (or becomes)
permanently and totally disabled due to injuries
suffered in the terrorist attacks on September 11,
2001.
(2) Eligible victim.--The term ``eligible victim'' means an
individual who, as determined in accordance with regulations of
the Secretary, died (or dies) or became (or becomes)
permanently and totally disabled due to injuries suffered in
the terrorist attacks on September 11, 2001.
(3) Eligible parent.--The term ``eligible parent'' means
the parent of an eligible victim if--
(A) the parent owes a Federal student loan that is
a consolidation loan that was used to repay a PLUS loan
incurred on behalf of such eligible victim; or
(B) the parent owes a Federal student loan that is
a PLUS loan incurred on behalf of an eligible victim.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Education.
(5) Federal student loan.--The term ``Federal student
loan'' means any loan made, insured, or guaranteed under part
B, D, or E of title IV of the Higher Education Act of 1965.
(b) Relief From Indebtedness.--
(1) In general.--The Secretary shall provide for the
discharge or cancellation of--
(A) the Federal student loan indebtedness of the
spouse of an eligible public servant, as determined in
accordance with regulations of the Secretary, including
any consolidation loan that was used jointly by the
eligible public servant and his or her spouse to repay
the Federal student loans of the spouse and the
eligible public servant;
(B) the portion incurred on behalf of the eligible
victim (other than an eligible public servant), of a
Federal student loan that is a consolidation loan that
was used jointly by the eligible victim and his or her
spouse, as determined in accordance with regulations of
the Secretary, to repay the Federal student loans of
the eligible victim and his or her spouse;
(C) the portion of the consolidation loan
indebtedness of an eligible parent that was incurred on
behalf of an eligible victim; and
(D) the PLUS loan indebtedness of an eligible
parent that was incurred on behalf of an eligible
victim.
(2) Method of discharge or cancellation.--A loan required
to be discharged or canceled under paragraph (1) shall be
discharged or canceled by the method used under section 437(a),
455(a)(1), or 464(c)(1)(F) of the Higher Education Act of 1965
(20 U.S.C. 1087(a), 1087e(a)(1), 1087dd(c)(1)(F)), whichever is
applicable to such loan.
(c) Facilitation of Claims.--The Secretary shall--
(1) establish procedures for the filing of applications for
discharge or cancellation under this section by regulations
that shall be prescribed and published within 90 days after the
date of enactment of this Act and without regard to the
requirements of section 553 of title 5, United States Code; and
(2) take such actions as may be necessary to publicize the
availability of discharge or cancellation of Federal student
loan indebtedness under this section.
(d) Availability of Funds for Payments.--Funds available for the
purposes of making payments to lenders in accordance with section
437(a) for the discharge of indebtedness of deceased or disabled
individuals shall be available for making payments under section 437(a)
to lenders of loans as required by this section.
(e) Applicable to Outstanding Debt.--The provisions of this section
shall be applied to discharge or cancel only Federal student loans
(including consolidation loans) on which amounts were owed on September
11, 2001. Nothing in this section shall be construed to authorize any
refunding of any repayment of a loan.
SEC. 2133. INDEPENDENT EVALUATION OF DISTANCE EDUCATION PROGRAMS.
(a) Independent Evaluation.--The Secretary of Education shall enter
into an agreement with the National Academy of Sciences to conduct a
scientifically correct and statistically valid evaluation of the
quality of distance education programs, as compared to campus-based
education programs, at institutions of higher education. Such
evaluation shall include--
(1) identification of the elements by which the quality of
distance education, as compared to campus-based education, can
be assessed, including elements such as subject matter,
interactivity, and student outcomes;
(2) identification of distance and campus-based education
program success, with respect to student achievement, in
relation to the mission of the institution of higher education;
and
(3) identification of the types of students (including
classification of types of students based on student age) who
most benefit from distance education programs, the types of
students who most benefit from campus-based education programs,
and the types of students who do not benefit from distance
education programs, by assessing elements including access to
higher education, job placement rates, undergraduate graduation
rates, and graduate and professional degree attainment rates.
(b) Scope.--The National Academy of Sciences shall select for
participation in the evaluation under subsection (a) a diverse group of
institutions of higher education with respect to size, mission, and
geographic distribution.
(c) Interim and Final Reports.--The agreement under subsection (a)
shall require that the National Academy of Sciences submit to the
Secretary of Education, the Committee on Health, Education, Labor and
Pensions of the Senate, and the Committee on Education and the
Workforce of the House of Representatives--
(1) an interim report regarding the evaluation under
subsection (a) not later than December 31, 2007; and
(2) a final report regarding such evaluation not later than
December 31, 2009.
SEC. 2134. DISBURSEMENT OF STUDENT LOANS.
Section 422(d) of the Higher Education Amendments of 1998 (Public
Law 105-244; 112 Stat. 1696) is amended by adding at the end the
following new sentence: ``Such amendments shall also be effective on
and after July 1, 2006.''.
PART 2--HIGHER EDUCATION RELIEF
SEC. 2141. REFERENCES.
References in this part to ``the Act'' are references to the Higher
Education Act of 1965 (20 U.S.C. 1001 et seq.).
SEC. 2142. WAIVERS AND MODIFICATIONS.
Notwithstanding any other provision of law, unless enacted with
specific reference to this section, the Secretary of Education is
authorized to waive or modify any statutory or regulatory provision
applicable to the student financial assistance programs under title IV
of the Act, or any student or institutional eligibility provisions in
the Act, as the Secretary of Education deems necessary in connection
with a Gulf hurricane disaster to ensure that--
(1) the calculation of expected family contribution under
section 474 of the Act used in the determination of need for
student financial assistance under title IV of the Act for any
affected student (and the determination of such need for his or
her family, if applicable), is modified to reflect any changes
in the financial condition of such affected student and his or
her family resulting from a Gulf hurricane disaster; and
(2) institutions of higher education, systems of
institutions, or consortia of institutions that are located in
an area affected by a Gulf hurricane disaster, or that are
serving affected students, are eligible, notwithstanding
section 486(d) of the Act, to apply for participation in the
distance education demonstration program under section 486 of
the Act, except that the Secretary of Education shall include
in reports under section 486(f) of the Act an identification of
those institutions, systems, and consortia that were granted
participation in the demonstration program due to a Gulf
hurricane disaster.
SEC. 2143. CANCELLATION OF INSTITUTIONAL REPAYMENT BY COLLEGES AND
UNIVERSITIES AFFECTED BY A GULF HURRICANE DISASTER.
Notwithstanding any provision of title IV of the Act or any
regulation issued thereunder, the Secretary of Education shall cancel
any obligation of an affected institution to return or repay any funds
the institution received before the date of enactment of this Act for,
or on behalf of, its students under subpart 1 or 3 of part A or parts
B, C, D, or E of title IV of the Act for any cancelled enrollment
period.
SEC. 2144. CANCELLATION OF STUDENT LOANS FOR CANCELLED ENROLLMENT
PERIODS.
(a) Loan Forgiveness Authorized.--Notwithstanding any provision of
title IV of the Act, the Secretary shall discharge all loan amounts
under parts B and D of title IV of the Act, and cancel any loan made
under part E of such title, disbursed to, or on behalf of, an affected
student for a cancelled enrollment period.
(b) Reimbursement.--The Secretary of Education shall--
(1) reimburse each affected institution for any amounts
discharged under subsection (a) with respect to a loan under
part E of title IV of the Act in the same manner as is required
by section 465(b) of the Act with respect to a loan cancelled
under section 465(a) of the Act; and
(2) reimburse lenders for the purpose of discharging any
loan amounts disbursed to, or on behalf of, an affected student
under part B of title IV of the Act for a cancelled enrollment
period.
(c) Limitation on Consolidation Loans.--A loan amount for a loan
made under section 428C of the Act or a Federal Direct Consolidation
Loan may be eligible for discharge under this section only to the
extent that such loan amount was used to repay a loan to an affected
student for a cancelled enrollment period.
(d) Construction.--Nothing in this section shall be construed to
authorize any refunding of any repayment of a loan.
SEC. 2145. TEMPORARY DEFERMENT OF STUDENT LOAN REPAYMENT.
An affected individual who is a borrower of a qualified student
loan or a qualified parent loan shall be granted a deferment, not in
excess of 6 months, during which periodic installments of principal
need not be paid, and interest--
(1) shall accrue and be paid by the Secretary, in the case
of a loan made under section 428, 428B, 428C, or 428H of the
Act;
(2) shall accrue and be paid by the Secretary to the
Perkins loan fund held by the institution of higher education
that made the loan, in the case of a loan made under part E of
title IV of the Act; and
(3) shall not accrue, in the case of a Federal Direct Loan
made under part D of such title.
SEC. 2146. NO AFFECT ON GRANT AND LOAN LIMITS.
Notwithstanding any provision of title IV of the Act or any
regulation issued thereunder, no grant or loan funds received by an
affected student under title IV of the Act for a cancelled enrollment
period shall be counted against such affected student's annual or
aggregate grant or loan limits for the receipt of grants or loans under
that title.
SEC. 2147. TEACHER LOAN RELIEF.
The Secretary of Education may waive the requirement of sections
428J(b)(1) and 460(b)(1)(A) of the Higher Education Act of 1965 that
the 5 years of qualifying service be consecutive academic years for any
teacher whose employment was interrupted if--
(1) the teacher was employed in qualifying service, at the
time of a Gulf hurricane disaster, in a school located in an
area affected by a Gulf hurricane disaster; and
(2) the teacher resumes qualifying service not later than
the beginning of academic year 2006-2007 in that school or any
other school in which employment is qualifying service under
such section.
SEC. 2148. EXPANDING INFORMATION DISSEMINATION REGARDING ELIGIBILITY
FOR PELL GRANTS.
(a) In General.--The Secretary of Education shall make special
efforts, in conjunction with State efforts, to notify affected students
and if applicable, their parents, who qualify for means-tested Federal
benefit programs, of their potential eligibility for a maximum Pell
Grant, and shall disseminate such informational materials as the
Secretary of Education deems appropriate.
(b) Means-Tested Federal Benefit Program.--For the purpose of this
section, the term ``means-tested Federal benefit program'' means a
mandatory spending program of the Federal Government, other than a
program under the Act, in which eligibility for the program's benefits,
or the amount of such benefits, or both, are determined on the basis of
income or resources of the individual or family seeking the benefit,
and may include such programs as the supplemental security income
program under title XVI of the Social Security Act, the food stamp
program under the Food Stamp Act of 1977, the free and reduced price
school lunch program established under the Richard B. Russell National
School Lunch Act, the temporary assistance to needy families program
established under part A of title IV of the Social Security Act, and
the women, infants, and children program established under section 17
of the Child Nutrition Act of 1966, and other programs identified by
the Secretary of Education.
SEC. 2149. PROCEDURES.
(a) Deadlines and Procedures.--Sections 482(c) and 492 of the Act
(20 U.S.C. 1089(c), 1098a) shall not apply to any waivers,
modifications, or actions initiated by the Secretary of Education under
this part.
(b) Case-by-Case Basis.--The Secretary of Education is not required
to exercise any waiver or modification authority under this part on a
case-by-case basis.
SEC. 2150. TERMINATION OF AUTHORITY.
The authority of the Secretary of Education to issue waivers or
modifications under this part shall expire at the conclusion of the
2005-2006 academic year, but the expiration of such authority shall not
affect the continuing validity of any such waivers or modifications
after such academic year.
SEC. 2151. DEFINITIONS.
For the purposes of this part, the following terms have the
following meanings:
(1) Affected individual.--The term ``affected individual''
means an individual who has applied for or received student
financial assistance under title IV of the Higher Education Act
of 1965, and--
(A) who is an affected student; or
(B) whose primary place of employment or residency
was, as of August 29, 2005, in an area affected by a
Gulf hurricane disaster.
(2) Affected institution.--The term ``affected
institution'' means an institution of higher education that--
(A) is located in an area affected by a Gulf
hurricane disaster; and
(B) has temporarily ceased operations as a
consequence of a Gulf hurricane disaster, as determined
by the Secretary of Education.
(3) Affected state.--The term ``affected State'' means the
State of Alabama, Florida, Louisiana, Mississippi, or Texas.
(4) Affected student.--The term ``affected student'' means
an individual who has applied for or received student financial
assistance under title IV of the Higher Education Act of 1965,
and who--
(A) was enrolled or accepted for enrollment, as of
August 29, 2005, at an institution of higher education
in an area affected by a Gulf hurricane disaster;
(B) was a dependent student enrolled or accepted
for enrollment at an institution of higher education
that is not in an area affected by a Gulf hurricane
disaster, but whose parents resided or were employed,
as of August 29, 2005, in an area affected by a Gulf
hurricane disaster; or
(C) was enrolled or accepted for enrollment at an
institution of higher education, as of August 29, 2005,
and whose attendance was interrupted because of a Gulf
hurricane disaster.
(5) Area affected by a gulf hurricane disaster.--The term
``area affected by a Gulf hurricane disaster'' means a county
or parish, in an affected State, that has been designated by
the Federal Emergency Management Agency for disaster assistance
for individuals and households as a result of Hurricane Katrina
or Hurricane Rita.
(6) Cancelled enrollment period.--The term ``cancelled
enrollment period'' means any period of enrollment at an
affected institution during the academic year 2005.
(7) Gulf hurricane disaster.--The term ``Gulf hurricane
disaster'' means a major disaster that the President declared
to exist, in accordance with section 401 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act, and that
was caused by Hurricane Katrina or Hurricane Rita.
(8) Institution of higher education.--The term
``institution of higher education'' has the meaning given such
term in section 102 of the Higher Education Act of 1965, except
that the term does not include institutions under subsection
(a)(1)(C) of that section.
(9) Qualified student loan.--The term ``qualified student
loan'' means any loan made, insured, or guaranteed under part
B, D, or E of title IV of the Higher Education Act of 1965,
other than a loan under section 428B of such title or a Federal
Direct Plus loan.
(10) Qualified parent loan.--The term ``qualified parent
loan'' means a loan made under section 428B of title IV of the
Higher Education Act of 1965 or a Federal Direct Plus loan.
Subtitle C--Pensions
SEC. 2201. INCREASES IN PBGC PREMIUMS.
(a) Flat-Rate Premiums.--Clause (i) of section 4006(a)(3)(A) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1306(a)(3)(A)) is amended by striking ``$19'' and inserting ``$30''.
(b) Adjustment for Inflation.--Paragraph (3) of section 4006(a) of
such Act (29 U.S.C. 1306(a)) is amended by adding at the end the
following new subparagraph:
``(F) For each plan year beginning after 2006, there shall be
substituted for the $30 dollar amount in subparagraph (A)(i) the amount
equal to the product derived by multiplying the premium rate, as in
effect under this paragraph immediately prior to such plan year for
basic benefits guaranteed by the corporation under section 4022 for
single-employer plans, by the ratio of--
``(i) the national average wage index (as defined in
section 209(k)(1) of the Social Security Act) for the first of
the 2 calendar years preceding the calendar year in which such
plan year begins, to
``(ii) the national average wage index (as so defined) for
the first of the 3 calendar years preceding the calendar year
in which the plan year begins,
with such product, if not a multiple of $1, being rounded to the next
higher multiple of $1 where such product is a multiple of $0.50 but not
of $1, and to the nearest multiple of $1 in any other case.''.
(c) Additional Discretionary Increase.--Paragraph (3) of section
4006(a) of such Act (as amended by subsection (b) of this section) is
further amended by adding at the end the following new subparagraph:
``(G)(i) The corporation may increase under this subparagraph,
effective for plan years commencing with or during any calendar year
after 2006, the premium rate otherwise in effect under this section for
basic benefits guaranteed by it under section 4022 for single-employer
plans if the corporation determines that such increase is necessary to
achieve actuarial soundness in the plan termination insurance program
under this title.
``(ii) The amount of any premium rate described in clause (i), as
increased under this subparagraph for plan years commencing with or
during any calendar year, may not exceed by more than 20 percent the
amount of the premium rate, in effect under this paragraph for plan
years commencing with or during such calendar year for basic benefits
guaranteed by the corporation under section 4022 for single-employer
plans, as determined for plan years commencing with or during such
calendar year without regard to this subparagraph.
``(iii) The preceding provisions of this subparagraph shall apply
in connection with plan years commencing with or during any calendar
year only if--
``(I) the corporation transmits to each House of the
Congress and to the Comptroller General its proposal for the
increase in the premium rate for plan years commencing with or
during such calendar year, subject to Congressional review
under chapter 8 of title 5 of the United States Code (relating
to Congressional review of agency rulemaking) not later than
120 calendar days after the beginning of the preceding calendar
year, and
``(II) a joint resolution disapproving such increase has
not been enacted as provided in section 802 of such title,
within the 60-day period described in section 802(a) of such
title.
The proposal transmitted by the corporation shall include a description
of the methodologies and assumptions used in formulating its proposal.
At the time of the transmittal of any such proposal to each House of
the Congress pursuant to subclause (I), the corporation shall transmit
a copy of such proposal to the Committee on Education and the Workforce
and the Committee on Ways and Means of the House of Representatives and
the Committee on Health, Education, Labor, and Pensions and the
Committee on Finance of the Senate. Any such proposal shall, for
purposes of chapter 8 of such title 5, be treated as a rule which is a
major rule.''.
(d) Premium Rate for Certain Terminated Single-Employer Plans.--
Subsection (a) of section 4006 of such Act (29 U.S.C. 1306) is amended
by adding at the end the following:
``(7) Premium Rate for Certain Terminated Single-Employer Plans.--
``(A) In general.--If there is a termination of a single-
employer plan under clause (ii) or (iii) of section
4041(c)(2)(B) or section 4042, there shall be payable to the
corporation, with respect to each applicable 12-month period, a
premium at a rate equal to $1,250 multiplied by the number of
individuals who were participants in the plan immediately
before the termination date. Such premium shall be in addition
to any other premium under this section.
``(B) Special rule for plans terminated in bankruptcy
reorganization.--If the plan is terminated under
4041(c)(2)(B)(ii) or under section 4042 and, as of the
termination date, a person who is (as of such date) a
contributing sponsor of the plan or a member of such sponsor's
controlled group has filed or has had filed against such person
a petition seeking reorganization in a case under title 11 of
the United States Code, or under any similar law of a State or
a political subdivision of a State (or a case described in
section 4041(c)(2)(B)(i) filed by or against such person has
been converted, as of such date, to such a case in which
reorganization is sought), subparagraph (A) shall not apply to
such plan until the date of the discharge of such person in
such case.
``(C) Applicable 12-month period.--For purposes of
subparagraph (A)--
``(i) In general.--The term `applicable 12-month
period' means--
``(I) the 12-month period beginning with
the first month following the month in which
the termination date occurs, and
``(II) each of the first two 12-month
periods immediately following the period
described in subclause (I).
``(ii) Plans terminated in bankruptcy
reorganization.--In any case in which the requirements
of subparagraph (B) are met in connection with the
termination of the plan with respect to 1 or more
persons described in such subparagraph, the 12-month
period described in clause (i)(I) shall be the 12-month
period beginning with the first month following the
month which includes the earliest date as of which each
such person is discharged in the case described in such
clause in connection with such person.
``(D) Coordination with section 4007.--
``(i) Notwithstanding section 4007--
``(I) premiums under this paragraph shall
be due within 30 days after the beginning of
any applicable 12-month period, and
``(II) the designated payor shall be the
person who is the contributing sponsor as of
immediately before the termination date.
``(ii) The fifth sentence of section 4007(a) shall
not apply in connection with premiums determined under
this paragraph.''.
(e) Conforming Amendments.--
(1) Section 4006(a)(2) of such Act (29 U.S.C. 1306(a)(2))
is amended, in the matter following subparagraph (E), by
inserting ``paragraph (3)(G) of this subsection or'' after
``Except as provided in''.
(2) Section 4006(b)(1) of such Act (29 U.S.C. 1306(b)(1))
is amended by inserting ``or a proposal for a premium rate
increase under subsection (a)(3)(G)'' after ``or (E)''.
(f) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
plan years beginning after December 31, 2005.
(2) Premium rate for certain terminated single-employer
plans.--
(A) In general.--Except as provided in subparagraph
(B), the amendment made by subsection (d) shall apply
with respect to terminations for which the termination
date occurs on or after the date of the enactment of
this Act.
(B) Treatment of cases in bankruptcy.--In any case
in which the requirements of subparagraph (B) of
section 4007(a)(7) of the Employee Retirement Income
Security Act of 1974 (as added by subsection (d)) are
met in connection with the termination of the plan with
respect to 1 or more persons described in such
subparagraph, the amendment made by subsection (d)
shall apply with respect to any such termination
described in such subparagraph (B), notwithstanding
subparagraph (A) of this paragraph, if the case under
title 11, United States Code, or under any similar law
of a State or political subdivision of a State
(referred to in such subparagraph (B)) commenced after
October 26, 2005.
(3) Special rule if subsequent savings enacted.--The
amendments made by this section shall not take effect if, after
the date of enactment of this Act and before January 1, 2006, a
Federal law is enacted which--
(A) provides for decreases in Federal outlays which
in the aggregate are less than the decreases in Federal
outlays by reason of the amendments made by this
section; and
(B) specifically provides that such decreases are
to be in lieu of the decreases in Federal outlays by
reason of the amendments made by this section.
TITLE III--COMMITTEE ON ENERGY AND COMMERCE
Subtitle A--Medicaid
Sec. 3100. Short title of subtitle; rule of construction with regard to
Katrina evacuees.
Chapter 1--Payment for Prescription Drugs
Sec. 3101. Federal upper limit (FUL).
Sec. 3102. Collection and submission of utilization data for certain
physician administered drugs.
Sec. 3103. Improved regulation of drugs sold under a new drug
application approved under section 505(c)
of the Federal Food, Drug, and Cosmetic
Act.
Sec. 3104. Children's hospital participation in section 340B drug
discount program.
Sec. 3105. Improving patient outcomes through greater reliance on
science and best practices.
Chapter 2--Reform of Asset Transfer Rules
Sec. 3111. Lengthening look-back period; change in beginning date for
period of ineligibility.
Sec. 3112. Disclosure and treatment of annuities and of large
transactions.
Sec. 3113. Application of ``income-first'' rule in applying community
spouse's income before assets in providing
support of community spouse.
Sec. 3114. Disqualification for long-term care assistance for
individuals with substantial home equity.
Sec. 3115. Enforceability of continuing care retirement communities
(CCRC) and life care community admission
contracts.
Chapter 3--Flexibility in Cost Sharing and Benefits
Sec. 3121. State option for alternative medicaid premiums and cost
sharing.
Sec. 3122. Special rules for cost sharing for prescription drugs.
Sec. 3123. Emergency room copayments for non-emergency care.
Sec. 3124. Use of benchmark benefit packages.
Sec. 3125. State option to establish non-emergency medical
transportation program.
Sec. 3126. Exempting women covered under breast or cervical cancer
program.
Chapter 4--Expanded Access to Certain Benefits
Sec. 3131. Expanded access to home and community-based services for the
elderly and disabled.
Sec. 3132. Optional choice of self-directed personal assistance
services (cash and counseling).
Sec. 3133. Expansion of State long-term care partnership program.
Sec. 3134. Health opportunity accounts.
Chapter 5--Other Provisions
Sec. 3141. Increase in medicaid payments to insular areas.
Sec. 3142. Managed care organization provider tax reform.
Sec. 3143. Medicaid transformation grants.
Sec. 3144. Enhancing third party identification and payment.
Sec. 3145. Improved enforcement of documentation requirements.
Sec. 3146. Reforms of targeted case management.
Sec. 3147. Emergency services furnished by non-contract providers for
medicaid managed care enrollees.
Sec. 3148. Adjustment in computation of medicaid FMAP to disregard an
extraordinary employer pension
contribution.
Subtitle B--Katrina Health Care Relief
Sec. 3201. Targeted medicaid relief for States affected by Hurricane
Katrina.
Sec. 3202. State high risk health insurance pool funding.
Sec. 3203. Recomputation of HPSA, MUA, and MUP designations within
Hurricane Katrina affected areas.
Sec. 3204. Waiver of certain requirements applicable to the provision
of health care in areas impacted by
Hurricane Katrina.
Sec. 3205. FMAP hold harmless for Katrina impact.
Subtitle C--Katrina and Rita Energy Relief
Sec. 3301. Hurricanes Katrina and Rita energy relief.
Subtitle D--Digital Television Transition
Sec. 3401. Short title.
Sec. 3402. Findings.
Sec. 3403. Analog spectrum recovery: hard deadline.
Sec. 3404. Auction of recovered spectrum.
Sec. 3405. Digital Television Conversion Fund.
Sec. 3406. Public Safety Interoperable Communications Fund.
Sec. 3407. NYC 9/11 Digital Transition Fund.
Sec. 3408. Low-power television transition provisions.
Sec. 3409. Consumer education regarding analog televisions.
Sec. 3410. Additional provisions.
Sec. 3411. Deployment of broadband wireless technologies.
Sec. 3412. Sense of Congress.
Sec. 3413. Band plan revision required.
Subtitle A--Medicaid
SEC. 3100. SHORT TITLE OF SUBTITLE; RULE OF CONSTRUCTION WITH REGARD TO
KATRINA EVACUEES.
(a) Short Title.--This subtitle may be cited as the ``Medicaid
Reconciliation Act of 2005''.
(b) Rule of Construction With Regard to Katrina Evacuees.--None of
the provisions of the following chapters of this subtitle shall apply
during the 11-month period beginning September 1, 2005, to individuals
entitled to medical assistance under title XIX of the Social Security
Act by reason of their residence in a parish in the State of Louisiana,
or a county in the State of Mississippi or Alabama, for which a major
disaster has been declared in accordance with section 401 of the Robert
T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
5170) as a result of Hurricane Katrina and which the President has
determined, before September 14, 2005, warrants individual and public
assistance from the Federal Government under such Act.
CHAPTER 1--PAYMENT FOR PRESCRIPTION DRUGS
SEC. 3101. FEDERAL UPPER LIMIT (FUL).
(a) In General.--Subsection (e) of section 1927 of the Social
Security Act (42 U.S.C. 1396r-8) is amended to read as follows:
``(e) Pharmacy Reimbursement Limits.--
``(1) Federal upper limit for ingredient cost of covered
outpatient drugs.--
``(A) In general.--Subject to subparagraph (B), no
Federal financial participation shall be available for
payment for the ingredient cost of a covered outpatient
drug in excess of the Federal upper limit for that drug
established under paragraph (2).
``(B) Optional carve out.--A State may elect not to
apply subparagraph (A) to payment for either or both of
the following:
``(i) Drugs dispensed by specialty
pharmacies (such as those dispensing only
immunosuppressive drugs), as defined by the
Secretary.
``(ii) Drugs administered by a physician in
a physician's office.
``(2) Federal upper limit.--
``(A) In general.--Except as provided in
subparagraph (D) and subject to paragraph (5), the
Federal upper limit established under this paragraph
for the ingredient cost of a--
``(i) single source drug, is 106 percent of
the RAMP (as defined in subparagraph (B)(i))
for that drug; and
``(ii) multiple source drug, is 120 percent
of the volume weighted average RAMP (as
determined under subparagraph (C)) for that
drug.
A drug product that is a single source drug and that
becomes a multiple source drug shall continue to be
treated under this subsection as a single source drug
until the Secretary determines that there are
sufficient data to compile the volume weighted average
RAMP for that drug.
``(B) RAMP and related provisions.--For purposes of
this subsection:
``(i) RAMP defined.--The term `RAMP' means,
with respect to a covered outpatient drug by a
manufacturer for a calendar quarter and subject
to clauses (ii) and (iii), the average price
paid to a manufacturer for the drug in the
United States in the quarter by wholesalers for
drugs distributed to retail pharmacies,
excluding service fees that are paid by the
manufacturer to an entity and that represent
fair market value for a bona-fide service
provided by the entity.
``(ii) Sales exempted from computation.--
The RAMP under clause (i) shall exclude any of
the following:
``(I) Sales exempt from inclusion
in the determination of best price
under subsection (c)(1)(C)(i).
``(II) Such other sales as the
Secretary identifies as sales to an
entity that are merely nominal in
amount under subsection
(c)(1)(C)(ii)(III).
``(iii) Sale price net of discounts.--In
calculating the RAMP under clause (i), such
RAMP shall include any of the following:
``(I) Cash discounts and volume
discounts.
``(II) Free goods that are
contingent upon any purchase
requirement.
``(III) Sales at a nominal price
that are contingent upon any purchase
requirement or agreement.
``(IV) Chargebacks, rebates (not
including rebates provided under an
agreement under this section), or any
other direct or indirect discounts.
``(V) Any other price concessions,
which may be based on recommendations
of the Inspector General of the
Department of Health and Human
Services, that would result in a
reduction of the cost to the purchaser.
``(iv) Retail pharmacy.--For purposes of
this subsection, the term `retail pharmacy'
does not include mail-order only pharmacies or
any pharmacy at a nursing facility or home.
``(C) Volume weighted average ramp defined.--For
purposes of this subsection, for all drug products
included within the same multiple source drug billing
and payment code (or such other methodology as may be
specified by the Secretary), the volume weighted
average RAMP is the volume weighted average of the
RAMPs reported under subsection (b)(3)(A)(iv)
determined by--
``(i) computing the sum of the products
(for each National Drug Code assigned to such
drug products) of--
``(I) the manufacturer's RAMP (as
defined in subparagraph (B)); and
``(II) the total number of units
specified under section 1847A(b)(2)
sold; and
``(ii) dividing the sum determined under
clause (i) by the sum of the total number of
units under clause (i)(II) for all National
Drug Codes assigned to such drug products.
``(D) Exception for initial sales periods.--
``(i) In general.--In the case of a single
source drug during an initial sales period (not
to exceed 2 calendar quarters) in which data on
sales for the drug are not sufficiently
available from the manufacturer to compute the
RAMP or the volume weighted average RAMP under
subparagraph (C), the Federal upper limit for
the ingredient cost of such drug during such
period shall be the wholesale acquisition cost
(as defined in clause (ii)) for the drug.
``(ii) Wholesale acquisition cost.--For
purposes of clause (i), the term `wholesale
acquisition cost' means, with respect to a
single source drug, the manufacturer's list
price for the drug to wholesalers or direct
purchasers in the United States, not including
prompt pay or other discounts, rebates or
reductions in price, for the most recent month
for which the information is available, as
reported in wholesale price guides or other
publications of drug or biological pricing
data.
``(E) Updates; data collection.--
``(i) Frequency of determination.--The
Secretary shall update the Federal upper limits
applicable under this paragraph on at least a
quarterly basis, taking into account the most
recent data collected for purposes of
determining such limits and the Food and Drug
Administration's most recent publication of
`Approved Drug Products with Therapeutic
Equivalence Evaluations'.
``(ii) Collection of data.--Data on RAMP is
collected under subsection (b)(3)(A)(iv).
``(F) Authority to enter contracts.--The Secretary
may enter into contracts with appropriate entities to
determine RAMPs and other data necessary to calculate
the Federal upper limit for a covered outpatient drug
established under this subsection and to calculate that
payment limit.
``(3) Dispensing fees.--
``(A) In general.--A State which provides medical
assistance for covered outpatient drugs shall pay a
dispensing fee for each covered outpatient drug in
accordance with this paragraph. A State may vary the
amount of such dispensing fees, including taking into
account the special circumstances of pharmacies that
are serving rural or underserved areas or that are sole
community pharmacies, so long as such variation is
consistent with subparagraph (B).
``(B) Dispensing fee payment for multiple source
drugs.--A State shall establish a dispensing fee under
this title for a covered outpatient drug that is
treated as a multiple source drug under paragraph
(2)(A) (whether or not it may be an innovator multiple
source drug) in an amount that is not less than $8 per
prescription unit. The Secretary shall define what
constitutes a prescription unit for purposes of the
previous sentence.
``(4) Effect on state maximum allowable cost limitations.--
This section shall not supersede or affect provisions in effect
prior to January 1, 1991, or after December 31, 1994, relating
to any maximum allowable cost limitation established by a State
for payment by the State for covered outpatient drugs, and
rebates shall be made under this section without regard to
whether or not payment by the State for such drugs is subject
to such a limitation or the amount of such a limitation.
``(5) Evaluation of use of retail survey price
methodology.--
``(A) In general.--The Secretary may develop a
methodology to set the Federal upper limit based on the
reported retail survey price, as most recently reported
under subparagraph (C), instead of a percentage of RAMP
or volume weighted average RAMP as described in
paragraph (2).
``(B) Initial application.--For 2007, the Secretary
may use this methodology for a limited number of
covered outpatient drugs, including both single source
and multiple source drugs, selected by the Secretary in
a manner so as to be representative of the classes of
drugs dispensed under this title.
``(C) Determination of retail survey price for
covered outpatient drugs.--
``(i) Use of vendor.--The Secretary may
contract services for the determination of
retail survey prices for covered outpatient
drugs that represent a nationwide average of
pharmacy sales costs for such drugs, net of all
discounts and rebates. Such a contract shall be
awarded for a term of 2 years.
``(ii) Use of competitive bidding.--In
contracting for such services, the Secretary
shall competitively bid for an outside vendor
that has a demonstrated history in--
``(I) surveying and determining, on
a representative nationwide basis,
retail prices for ingredient costs of
prescription drugs;
``(II) working with retail
pharmacies, commercial payers, and
States in obtaining and disseminating
such price information; and
``(III) collecting and reporting
such price information on at least a
monthly basis.
``(iii) Additional provisions.--A contract
with a vendor under this subparagraph shall
include such terms and conditions as the
Secretary shall specify, including the
following:
``(I) The vendor must monitor the
marketplace and report to the Secretary
each time there is a new covered
outpatient drug available nationwide.
``(II) The vendor must update the
Secretary no less often than monthly on
the retail survey prices for multiple
source drugs.
``(III) The vendor must apply
methods for independently confirming
retail survey prices.
``(iv) Availability of information to
states.--Information on retail survey prices
obtained under this subparagraph, including
applicable information on single source drugs,
shall be provided to States on an ongoing,
timely basis.
``(D) State use of retail survey price data.--
``(i) Distribution of price data.--The
Secretary shall devise and implement a means
for electronic distribution to each State
agency designated under section 1902(a)(5) with
responsibility for the administration or
supervision of the administration of the State
plan under this title of the retail survey
price determined under this paragraph.
``(ii) Authority to establish payment rates
based on data.--A State may use the price data
received in accordance with clause (i) in
establishing payment rates for the ingredient
costs and dispensing fees for covered
outpatient drugs dispensed to individuals
eligible for medical assistance under this
title.
``(6) Limitation on judicial review.--There shall be no
administrative or judicial review of--
``(A) the Secretary's determinations of Federal
upper limits, RAMPs, and volume weighted average RAMPs
under this subsection, including the assignment of
National Drug Codes to billing and payment classes;
``(B) the Secretary's disclosure to States of the
average manufacturer prices, RAMPs, volume weighted
average RAMPs, and retail survey prices;
``(C) determinations under this subsection by the
Secretary of covered outpatient drugs which are
dispensed by a specialty pharmacy or administered by a
physician in a physician's office;
``(D) the contracting and calculations process
under this subsection; and
``(E) the method to allocate rebates, chargebacks,
and other price concessions to a quarter if specified
by the Secretary.''.
(b) Conforming Amendments.--
(1) Reporting ramp-related information.--Subsection
(b)(3)(A) of such section is amended--
(A) by striking ``and'' at the end of clause (ii);
(B) by striking the period at the end of clause
(iii) and inserting ``; and''; and
(C) by inserting after clause (iii) the following
new clause:
``(iv) for calendar quarters beginning on or after
July 1, 2006, in conjunction with reporting required
under clause (i) and by National Drug Code (including
package size)--
``(I) the manufacturer's RAMP (as defined
in subsection (e)(2)(B)(i)) and the total
number of units required to compute the volume
weighted average RAMP under subsection
(e)(2)(C);
``(II) if required to make payment under
subsection (e)(2)(D), the manufacturer's
wholesale acquisition cost, as defined in
clause (ii) of such subsection; and
``(III) information on those sales that
were made at a nominal price or otherwise
described in subsection (e)(2)(B)(ii)(II);
for all covered outpatient drugs.''.
(2) Disclosure to states.--Subsection (b)(3)(D) of such
section is amended--
(A) by striking ``and'' at the end of clause (ii);
(B) by striking the period at the end of clause
(iii) and inserting ``, and''; and
(C) by inserting after clause (iii) the following
new clause:
``(iv) to States to carry out this
title.''.
(3) Limitations on federal financial participation.--
Section 1903(i) of such Act (42 U.S.C. 1396b(i)) is amended--
(A) in paragraph (10)(A), by striking ``and'' at
the end;
(B) in paragraph (10)(B), by striking ``or'' at the
end and inserting ``and'';
(C) by adding at the end of paragraph (10) the
following:
``(C) with respect to any amount expended for the
ingredient cost of a covered outpatient drug that exceeds the
Federal upper limit for that drug established and applied under
section 1927(e); or''; and
(D) in paragraph (21), as inserted by section
104(b) of Public Law 109-91, by inserting before the
period at the end the following: ``or described in
subparagraph (B) or (C) of section 1927(d)(2)''.
(c) Effective Date.--Except as otherwise provided, the amendments
made by this section take effect with respect to a State on the later
of--
(1) January 1, 2007; or
(2) the date that is 6 months after the close of the first
regular session of the State legislature that begins after the
date of the enactment of this Act.
(d) GAO Study on Dispensing Fees.--The Comptroller General of the
United States shall conduct a study on the appropriateness in payment
levels to pharmacies for dispensing fees under the medicaid program,
including payment to specialty pharmacies. Not later than 9 months
after the date of the enactment of this Act, the Comptroller General
shall submit to Congress a report on such study.
(e) IG Report on Use of RAMP and Retail Survey Prices.--Not later
than 2 years after the date of the enactment of this Act, the Inspector
General of the Department of Health and Human Services shall submit to
Congress a report on the appropriateness of using RAMPs and retail
survey prices, rather than the average manufacturer prices or other
price measures, as the basis for establishing a Federal upper limit for
reimbursement for covered outpatient drugs under the medicaid program.
SEC. 3102. COLLECTION AND SUBMISSION OF UTILIZATION DATA FOR CERTAIN
PHYSICIAN ADMINISTERED DRUGS.
(a) In General.--Section 1927(a) of the Social Security Act (42
U.S.C. 1396r-8(a)) is amended by adding at the end the following new
paragraph:
``(7) Requirement for submission of utilization data for
certain physician administered drugs.--
``(A) Single source drugs.--In order for payment to
be available under section 1903(a) for a covered
outpatient drug that is a single source drug that is
physician administered (as determined by the
Secretary), and that is administered on or after
January 1, 2006, the State shall provide for the
submission of such utilization data and coding (such as
J-codes and National Drug Code numbers) for each such
drug as the Secretary may specify as necessary to
identify the manufacturer of the drug in order to
secure rebates under this section for drugs
administered for which payment is made under this
title.
``(B) Multiple source drugs.--
``(i) In general.--Not later than January
1, 2007, the information shall be submitted
under subparagraph (A) using National Drug Code
codes unless the Secretary specifies that an
alternative coding system should be used.
``(ii) Identification of most frequently
physician administered multiple source drugs.--
Not later than January 1, 2007, the Secretary
shall publish a list of the 20 physician
administered multiple source drugs that the
Secretary determines have the highest dollar
volume of physician administered drugs
dispensed under this title. The Secretary may
modify such list from year to year to reflect
changes in such volume.
``(iii) Requirement.--In order for payment
to be available under section 1903(a) for a
covered outpatient drug that is a multiple
source drug that is physician administered (as
determined by the Secretary), that is on the
list published under clause (ii), and that is
administered on or after January 1, 2008, the
State shall provide for the submission of such
utilization data and coding (such as J-codes
and National Drug Code numbers) for each such
drug as the Secretary may specify as necessary
to identify the manufacturer of the drug in
order to secure rebates under this section.
``(C) Hardship waiver.--The Secretary may delay the
application of subparagraph (A) or (B), or both, in the case of
a State to prevent hardship to States which require additional
time to implement the reporting system required under the
respective subparagraph.''.
(b) Limitation on Payment.--Section 1903(i)(10) of such Act (42
U.S.C. 1396b(i)(10)), as amended by section 3101(b)(3), is amended--
(1) by striking ``and'' at the end of subparagraph (B);
(2) by striking ``or'' at the end of subparagraph (C) and
inserting ``and''; and
(3) by adding at the end the following new subparagraph:
``(D) with respect to covered outpatient drugs described in
section 1927(a)(7), unless information respecting utilization
data and coding on such drugs that is required to be submitted
under such section is submitted in accordance with such
section; or''.
SEC. 3103. IMPROVED REGULATION OF DRUGS SOLD UNDER A NEW DRUG
APPLICATION APPROVED UNDER SECTION 505(C) OF THE FEDERAL
FOOD, DRUG, AND COSMETIC ACT.
(a) Inclusion With Other Reported Average Manufacturer and Best
Prices.--Section 1927(b)(3)(A) of the Social Security Act (42 U.S.C.
1396r-8(b)(3)(A)) is amended--
(1) by striking clause (i) and inserting the following:
``(i) not later than 30 days after the last
day of each rebate period under the agreement--
``(I) on the average manufacturer
price (as defined in subsection (k)(1))
for covered outpatient drugs for the
rebate period under the agreement
(including for all such drugs that are
sold under a new drug application
approved under section 505(c) of the
Federal Food, Drug, and Cosmetic Act);
and
``(II) for single source drugs and
innovator multiple source drugs
(including all such drugs that are sold
under a new drug application approved
under section 505(c) of the Federal
Food, Drug, and Cosmetic Act), on the
manufacturer's best price (as defined
in subsection (c)(1)(C)) for such drugs
for the rebate period under the
agreement;''; and
(2) in clause (ii), by inserting ``(including for such
drugs that are sold under a new drug application approved under
section 505(c) of the Federal Food, Drug, and Cosmetic Act)''
after ``drugs''.
(b) Conforming Amendments.--Section 1927 of such Act (42 U.S.C.
1396r-8) is amended--
(1) in subsection (c)(1)(C)--
(A) in clause (i), in the matter preceding
subclause (I), by inserting after ``or innovator
multiple source drug of a manufacturer'' the following:
``(including any other such drug of a manufacturer that
is sold under a new drug application approved under
section 505(c) of the Federal Food, Drug, and Cosmetic
Act)''; and
(B) in clause (ii)--
(i) in subclause (II), by striking ``and''
at the end;
(ii) in subclause (III), by striking the
period at the end and inserting ``; and''; and
(iii) by adding at the end the following:
``(IV) in the case of a
manufacturer that approves, allows, or
otherwise permits any other drug of the
manufacturer to be sold under a new
drug application approved under section
505(c) of the Federal Food, Drug, and
Cosmetic Act, shall be inclusive of the
lowest price for such authorized drug
available from the manufacturer during
the rebate period to any wholesaler,
retailer, provider, health maintenance
organization, nonprofit entity, or
governmental entity within the United
States, excluding those prices
described in subclauses (I) through
(IV) of clause (i).''; and
(2) in subsection (k)--
(A) in paragraph (1)--
(i) by striking ``The term'' and inserting
the following:
``(A) In general.--The term''; and
(ii) by adding at the end the following:
``(B) Inclusion of section 505(c) drugs.--In the
case of a manufacturer that approves, allows, or
otherwise permits any drug of the manufacturer to be
sold under a new drug application approved under
section 505(c) of the Federal Food, Drug, and Cosmetic
Act, such term shall be inclusive of the average price
paid for such authorized drug by wholesalers for drugs
distributed to the retail pharmacy class of trade,
after deducting customary prompt pay discounts.''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 3104. CHILDREN'S HOSPITAL PARTICIPATION IN SECTION 340B DRUG
DISCOUNT PROGRAM.
(a) In General.--Section 1927(a)(5)(B) of the Social Security Act
(42 U.S.C. 1396r-8(a)(5)(B)) is amended by inserting before the period
at the end the following: ``and a children's hospital described in
section 1886(d)(1)(B)(iii) which meets the requirements of clauses (i)
and (iii) of section 340B(b)(4)(L) of the Public Health Service Act and
which would meet the requirements of clause (ii) of such section if
that clause were applied by taking into account the percentage of care
provided by the hospital to patients eligible for medical assistance
under a State plan under this title''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to drugs purchased on or after the date of the enactment of this
Act.
SEC. 3105. IMPROVING PATIENT OUTCOMES THROUGH GREATER RELIANCE ON
SCIENCE AND BEST PRACTICES.
(a) In General.--Section 1927 of Social Security Act (42 U.S.C.
1396r-8) is amended--
(1) in subsection (d)(5)--
(A) in the matter before subparagraph (A), by
striking ``providing for such approval--'' and
inserting ``providing for such approval meets the
following requirements:'';
(B) in subparagraph (A)--
(i) by inserting ``The system'' before
``provides''; and
(ii) by striking ``; and'' and inserting a
period;
(C) in subparagraph (B)--
(i) by striking ``except'' and inserting
``Except''; and
(ii) by inserting ``the system'' before
``provides''; and
(D) by adding at the end the following new
subparagraphs:
``(C) The system provides that an atypical
antipsychotic or antidepressant single source drug may
be placed on a list of drugs subject to prior
authorization only where a drug use review board has
determined, based on the strength of the scientific
evidence and standards of practice, including assessing
peer-reviewed medical literature, pharmacoeconomic
studies, outcomes research data and such other
information as the board determines to be appropriate,
that placing the drug on prior approval or otherwise
imposing restrictions on its use is not likely to harm
patients or increase overall medical costs.
``(D) The system provides that where a response is
not received to a request for authorization of an
atypical antipsychotic or antidepressant drug
prescribed within 24 hours after the prescription is
transmitted, payment is made for a 30 day supply of a
medication that the prescriber certifies is medically
necessary.''; and
(2) in subsection (g)(3)(C), by inserting after clause
(iii) the following new clause:
``(iv) The development and oversight of
prior authorization programs described in
subsection (d)(5).''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect on January 1, 2007.
CHAPTER 2--REFORM OF ASSET TRANSFER RULES
SEC. 3111. LENGTHENING LOOK-BACK PERIOD; CHANGE IN BEGINNING DATE FOR
PERIOD OF INELIGIBILITY.
(a) Lengthening Look-Back Period for All Disposals to 5 Years.--
Section 1917(c)(1)(B)(i) of the Social Security Act (42 U.S.C.
1396p(c)(1)(B)(i)) is amended by inserting ``or in the case of any
other disposal of assets made on or after the date of the enactment of
the Medicaid Reconciliation Act of 2005'' before ``, 60 months''.
(b) Change in Beginning Date for Period of Ineligibility.--Section
1917(c)(1)(D) of such Act (42 U.S.C. 1396p(c)(1)(D)) is amended--
(1) by striking ``(D) The date'' and inserting ``(D)(i) In
the case of a transfer of asset made before the date of the
enactment of the Medicaid Reconciliation Act of 2005, the
date''; and
(2) by adding at the end the following new clause:
``(ii) In the case of a transfer of asset made on or after the date
of the enactment of the Medicaid Reconciliation Act of 2005, the date
specified in this subparagraph is the first day of a month during or
after which assets have been transferred for less than fair market
value, or the date on which the individual is eligible for medical
assistance under the State plan and is receiving services described in
subparagraph (C) but for the application of the penalty period,
whichever is later, and which does not occur during any other period of
ineligibility under this subsection.''.
(c) Effective Date.--The amendments made by this section shall
apply to transfers made on or after the date of the enactment of this
Act.
(d) Availability of Hardship Waivers.--Each State shall provide for
a hardship waiver process in accordance with section 1917(c)(2)(D) of
the Social Security Act (42 U.S.C. 1396p(c)(2)(D))--
(1) under which an undue hardship exists when application
of the transfer of assets provision would deprive the
individual--
(A) of medical care such that the individual's
health or life would be endangered; or
(B) of food, clothing, shelter, or other
necessities of life; and
(2) which provides for--
(A) notice to recipients that an undue hardship
exception exists;
(B) a timely process for determining whether an
undue hardship waiver will be granted; and
(C) a process under which an adverse determination
can be appealed.
(e) Additional Provisions on Hardship Waivers.--
(1) Application by facility.--Section 1917(c)(2) of the
Social Security Act (42 U.S.C. 1396p(c)(2)) is amended--
(A) by striking the semicolon at the end of
subparagraph (D) and inserting a period; and
(B) by adding after and below such subparagraph the
following:
``The procedures established under subparagraph (D) shall
permit the facility in which the institutionalized individual
is residing to file an undue hardship waiver application on
behalf of the individual with the consent of the individual or
the legal guardian of the individual.''.
(2) Authority to Make Bed Hold Payments for Hardship Applicants.--
Such section is further amended by adding at the end the following:
``While an application for an undue hardship waiver is pending under
subparagraph (D) in the case of an individual who is a resident of a
nursing facility, if the application meets such criteria as the
Secretary specifies, the State may provide for payments for nursing
facility services in order to hold the bed for the individual at the
facility, but not in excess of payments for 30 days.''.
SEC. 3112. DISCLOSURE AND TREATMENT OF ANNUITIES AND OF LARGE
TRANSACTIONS.
(a) In General.--Section 1917 of the Social Security Act (42 U.S.C.
1396p) is amended by redesignating subsection (e) as subsection (f) and
by inserting after subsection (d) the following new subsection:
``(e)(1) In order to meet the requirements of this section for
purposes of section 1902(a)(18), a State shall require, as a condition
for the provision of medical assistance for services described in
subsection (c)(1)(C)(i) (relating to long-term care services) for an
individual, the application of the individual for such assistance
(including any recertification of eligibility for such assistance)
shall disclose the following:
``(A) A description of any interest the individual or
community spouse has in an annuity (or similar financial
instrument which provides for the conversion of a countable
asset to a noncountable asset, as may be specified by the
Secretary), regardless of whether the annuity is irrevocable or
is treated as an asset.
``(B) Full information (as specified by the Secretary)
concerning any transaction involving the transfer or disposal
of assets during the previous period of 60 months, if the
transaction exceeded $100,000, without regard to whether the
transfer or disposal was for fair market value. For purposes of
applying the previous sentence under this subsection, all
transactions of $5,000 or more occurring within a 12-month
period shall be treated as a single transaction. The dollar
amounts specified in the first and second sentences of this
subparagraph shall be increased, beginning with 2007, from year
to year based on the percentage increase in the consumer price
index for all urban consumers (all items; United States city
average), rounded to the nearest $1,000 in the case of the
first sentence and $100 in the case of the second sentence.
Such application or recertification form shall include a statement that
under paragraph (2) the State becomes a remainder beneficiary under
such an annuity or similar financial instrument by virtue of the
provision of such medical assistance.
``(2)(A) In the case of any annuity in which an institutionalized
individual or community spouse has an interest, if medical assistance
is furnished to the individual for services described in subsection
(c)(1)(C)(i), by virtue of the provision of such assistance the State
becomes the remainder beneficiary in the first position for the total
amount of such medical assistance paid on behalf of the individual
under this title (or, where there is a community spouse or minor or
disabled child in such first position, in the position immediately
succeeding the position of such spouse or child or both).
``(B) In the case of disclosure concerning an annuity under
paragraph (1)(A), the State shall notify the issuer of the annuity of
the right of the State under subparagraph (A) as a preferred remainder
beneficiary in the annuity for medical assistance furnished to the
individual. Nothing in this paragraph shall be construed as preventing
such an issuer from notifying persons with any other remainder interest
of the State's remainder interest under subparagraph (A).
``(C) In the case of such an issuer receiving notice under
subparagraph (B), the State may require the issuer to notify the State
when there is a change in the amount of income or principal being
withdrawn from the amount that was being withdrawn at the time of the
most recent disclosure described in paragraph (1)(A). A State shall
take such information into account in determining the amount of the
State's obligations for medical assistance or in the individual's
eligibility for such assistance.
``(3)(A) For purposes of subsection (c)(1), a transaction described
in paragraph (1)(B) shall be deemed as the transfer of an asset for
less than fair market value unless the individual demonstrates to the
satisfaction of the State that the transfer of the asset was for fair
market value.
``(B) The Secretary may provide guidance to States on categories of
arms length transactions (such as the purchase of a commercial annuity)
that could be generally treated as a transfer of asset for fair market
value.
``(4) Nothing in this subsection shall be construed as preventing a
State from denying eligibility for medical assistance for an individual
based on the income or resources derived from an annuity described in
paragraph (1)(A).''.
(b) Effective Date.--The amendments made by this section shall
apply to transactions (including the purchase of an annuity) occurring
on or after the date of the enactment of this Act.
SEC. 3113. APPLICATION OF ``INCOME-FIRST'' RULE IN APPLYING COMMUNITY
SPOUSE'S INCOME BEFORE ASSETS IN PROVIDING SUPPORT OF
COMMUNITY SPOUSE.
(a) In General.--Section 1924(d) of the Social Security Act (42
U.S.C. 1396r-5(d)) is amended by adding at the end the following new
paragraph:
``(6) Application of `income first' rule for funding
community spouse monthly income allowance.--For purposes of
this subsection and subsection (e), any transfer or allocation
made from an institutionalized spouse to meet the need of a
community spouse for a community spouse monthly income
allowance under paragraph (1)(B) shall be first made from
income of the institutionalized spouse and then only when the
income is not available from the resources of such
institutionalized spouse.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to transfers and allocations made on or after the date of the
enactment of this Act by individuals who become institutionalized
spouses on or after such date.
SEC. 3114. DISQUALIFICATION FOR LONG-TERM CARE ASSISTANCE FOR
INDIVIDUALS WITH SUBSTANTIAL HOME EQUITY.
(a) In General.--Section 1917 of the Social Security Act, as
amended by section 3112, is further amended by redesignating subsection
(f) as subsection (g) and by inserting after subsection (e) the
following new subsection:
``(f)(1) Notwithstanding any other provision of this title, subject
to paragraph (2), in determining eligibility of an individual for
medical assistance with respect to nursing facility services or other
long-term care services, the individual shall not be eligible for such
assistance if the individual's equity interest in the individual's home
exceeds $500,000. The dollar amount specified in the preceding sentence
shall be increased, beginning with 2011, from year to year based on the
percentage increase in the consumer price index for all urban consumers
(all items; United States city average), rounded to the nearest $1,000.
``(2) Paragraph (1) shall not apply with respect to an individual
if--
``(A) the spouse of such individual, or
``(B) such individual's child who is under age 21, or (with
respect to States eligible to participate in the State program
established under title XVI) is blind or permanently and
totally disabled, or (with respect to States which are not
eligible to participate in such program) is blind or disabled
as defined in section 1614,
is lawfully residing in the individual's home.
``(3) Nothing in this subsection shall be construed as preventing
an individual from using a reverse mortgage or home equity loan to
reduce the individual's total equity interest in the home.
``(4) The Secretary shall establish a process whereby paragraph (1)
is waived in the case of a demonstrated hardship.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to individuals who are determined eligible for medical assistance
with respect to nursing facility services or other long-term care
services based on an application filed on or after January 1, 2006.
SEC. 3115. ENFORCEABILITY OF CONTINUING CARE RETIREMENT COMMUNITIES
(CCRC) AND LIFE CARE COMMUNITY ADMISSION CONTRACTS.
(a) Admission Policies of Nursing Facilities.--Section 1919(c)(5)
of the Social Security Act (42 U.S.C. 1396r(c)(5)) is amended--
(1) in subparagraph (A)(i)(II), by inserting ``subject to
clause (v),'' after ``(II)''; and
(2) by adding at the end of subparagraph (B) the following
new clause:
``(v) Treatment of continuing care
retirement communities admission contracts.--
Notwithstanding subclause (II) of subparagraph
(A)(i), subject to subsections (c) and (d) of
section 1924, contracts for admission to a
State licensed, registered, certified, or
equivalent continuing care retirement community
or life care community, including services in a
nursing facility that is part of such
community, may require residents to spend on
their care resources declared for the purposes
of admission before applying for medical
assistance.''.
(b) Treatment of Entrance Fees.--Section 1917 of such Act (42
U.S.C. 1396p), as amended by sections 3112(a) and 3114(a), is amended
by redesignating subsection (g) as subsection (h) and by inserting
after subsection (f) the following new subsection:
``(g) Treatment of Entrance Fees of Individuals Residing in
Continuing Care Retirement Communities.--
``(1) In general.--For purposes of determining an
individual's eligibility for, or amount of, benefits under a
State plan under this title, the rules specified in paragraph
(2) shall apply to individuals residing in continuing care
retirement communities or life care communities that collect an
entrance fee on admission from such individuals.
``(2) Treatment of entrance fee.--For purposes of this
subsection, an individual's entrance fee in a continuing care
retirement community or life care community shall be considered
a resource available to the individual to the extent that--
``(A) the individual has the ability to use the
entrance fee, or the contract provides that the
entrance fee may be used, to pay for care should other
resources or income of the individual be insufficient
to pay for such care;
``(B) the individual is eligible for a refund of
any remaining entrance fee when the individual dies or
terminates the continuing care retirement community or
life care community contract and leaves the community;
and
``(C) the entrance fee does not confer an ownership
interest in the continuing care retirement community or
life care community.
``(3) Treatment in relation to spousal share.--To the
extent that an entrance fee is determined to be an available
resource to an individual applying for medical assistance and
the individual has a community spouse as defined in section
1924(h), the entrance fee shall be considered in the
computation of spousal share pursuant to section 1924(c).''.
CHAPTER 3--FLEXIBILITY IN COST SHARING AND BENEFITS
SEC. 3121. STATE OPTION FOR ALTERNATIVE MEDICAID PREMIUMS AND COST
SHARING.
(a) In General.--Title XIX of the Social Security Act is amended by
inserting after section 1916 the following new section:
``state option for alternative premiums and cost sharing
``Sec. 1916A. (a) State Flexibility.--
``(1) In general.--Notwithstanding sections 1916 and
1902(a)(10)(B), a State, at its option and through a State plan
amendment, may impose premiums and cost sharing for any group
of individuals (as specified by the State) and for any type of
services (and may vary such premiums and cost sharing among
such groups or types, including through the use of tiered cost
sharing for prescription drugs) consistent with the limitations
established under this section. Nothing in this section shall
be construed as superseding (or preventing the application of)
section 1916(g).
``(2) Definitions.--In this section:
``(A) Premium.--The term `premium' includes any
enrollment fee or similar charge.
``(B) Cost sharing.--The term `cost sharing'
includes any deduction, deductible, copayment, or
similar charge.
``(b) Limitations on Exercise of Authority.--
``(1) Individuals with family income below 100 percent of
poverty level.--In the case of an individual whose family
income does not exceed 100 percent of the Federal poverty level
applicable to a family of the size involved, subject to
subsections (c)(2) and (e)(2)(A), the limitations otherwise
provided under subsections (a) and (b) of section 1916 shall
continue to apply and no premium will be imposed under the
plan, except that the total annual aggregate amount of cost
sharing imposed (including any increased cost sharing imposed
under subsection (c) or (e)) for all individuals in the family
may not exceed 5 percent of the family income of the family
involved for the year involved.
``(2) Individuals with family income above 100 percent of
poverty level.--In the case of an individual whose family
income exceeds 100 percent of the Federal poverty level
applicable to a family of the size involved, the total annual
aggregate amount of premiums and cost sharing imposed
(including any increase and cost sharing imposed under
subsection (c) or (e)) for all individuals in the family may
not exceed 5 percent of the family income of the family
involved for the year involved.
``(3) Additional limitations.--
``(A) Premiums.--No premiums shall be imposed under
this section with respect to the following:
``(i) Individuals under 18 years of age
that are required to be provided medical
assistance under section 1902(a)(10)(A)(i), and
including individuals with respect to whom
adoption or foster care assistance is made
available under part E of title IV without
regard to age.
``(ii) Pregnant women.
``(iii) Any terminally ill individual who
is receiving hospice care (as defined in
section 1905(o)).
``(iv) Any individual who is an inpatient
in a hospital, nursing facility, intermediate
care facility for the mentally retarded, or
other medical institution, if such individual
is required, as a condition of receiving
services in such institution under the State
plan, to spend for costs of medical care all
but a minimal amount of the individual's income
required for personal needs.
``(B) Cost sharing.--Subject to the succeeding
provisions of this section, no cost sharing shall be
imposed under this section with respect to the
following:
``(i) Services furnished to individuals
under 18 years of age that are required to be
provided medical assistance under section
1902(a)(10)(A)(i), and including services
furnished to individuals with respect to whom
adoption or foster care assistance is made
available under part E of title IV without
regard to age.
``(ii) Preventive services (such as well
baby and well child care and immunizations)
provided to children under 18 years of age
regardless of family income.
``(iii) Services furnished to pregnant
women, if such services relate to the pregnancy
or to any other medical condition which may
complicate the pregnancy.
``(iv) Services furnished to a terminally
ill individual who is receiving hospice care
(as defined in section 1905(o)).
``(v) Services furnished to any individual
who is an inpatient in a hospital, nursing
facility, intermediate care facility for the
mentally retarded, or other medical
institution, if such individual is required, as
a condition of receiving services in such
institution under the State plan, to spend for
costs of medical care all but a minimal amount
of the individual's income required for
personal needs.
``(vi) Emergency services (as defined by
the Secretary for purposes of section
1916(a)(2)(D)).
``(vii) Family planning services and
supplies described in section 1905(a)(4)(C).
``(C) Construction.--Nothing in this paragraph
shall be construed as preventing a State from exempting
additional classes of individuals from premiums under
this section or from exempting additional individuals
or services from cost sharing under this section.
``(4) Indexing nominal amounts.--In applying section 1916
under paragraph (1) with respect to cost sharing that is
`nominal' in amount--
``(A) the Secretary shall phase-in an increase in
such amount over a 3 year period (beginning January 1,
2006) so that--
``(i) a $3 nominal amount in 2005 would be
increased to be a $5 nominal amount in 2008;
and
``(ii) other nominal amounts would be
increased by a proportional amount (with
appropriate rounding) during such period; and
``(B) the Secretary shall increase such `nominal'
amounts for each subsequent year (beginning with 2009)
by the annual percentage increase in the medical care
component of the consumer price index for all urban
consumers (U.S. city average) as rounded up in an
appropriate manner.
``(5) Determinations of family income.--In applying this
subsection, family income shall be determined in a manner
specified by the State for purposes of this subsection,
including the use of such disregards as the State may provide.
Family income shall be determined for such period and at such
periodicity as the State may provide under this title.
``(6) Poverty line defined.--For purposes of this section,
the term `poverty line' has the meaning given such term in
section 673(2) of the Community Services Block Grant Act (42
U.S.C. 9902(2)), including any revision required by such
section.
``(7) Construction.--Nothing in this section shall be
construed--
``(A) as preventing a State from further limiting
the premiums and cost sharing imposed under this
section beyond the limitations provided under this
subsection;
``(B) as affecting the authority of the Secretary
through waiver to modify limitations on premiums and
cost sharing under this subsection; or
``(C) as affecting any such waiver of requirements
in effect under this title before the date of the
enactment of this section with regard to the imposition
of premiums and cost sharing.
``(d) Enforceability of Premiums and Other Cost Sharing.--
``(1) Premiums.--Notwithstanding section 1916(c)(3) and
section 1902(a)(10)(B), a State may, at its option, condition
the provision of medical assistance for an individual upon
prepayment of a premium authorized to be imposed under this
section, or may terminate eligibility for such medical
assistance on the basis of failure to pay such a premium but
shall not terminate eligibility of an individual for medical
assistance under this title on the basis of failure to pay any
such premium until such failure continues for a period of not
less than 60 days. A State may apply the previous sentence for
some or all groups of beneficiaries as specified by the State
and may waive payment of any such premium in any case where the
State determines that requiring such payment would create an
undue hardship.
``(2) Cost sharing.--Notwithstanding section 1916(e) or any
other provision of law, a State may permit a provider
participating under the State plan to require, as a condition
for the provision of care, items, or services to an individual
entitled to medical assistance under this title for such care,
items, or services, the payment of any cost sharing authorized
to be imposed under this section with respect to such care,
items, or services. Nothing in this paragraph shall be
construed as preventing a provider from reducing or waiving the
application of such cost sharing.''.
(b) Conforming Amendment.--Section 1916(f) of such Act (42 U.S.C.
1396o(f)) is amended by inserting ``and section 1916A'' after
``(b)(3)''.
(c) GAO Study of Impact of Premiums and Cost Sharing.--The
Comptroller General of the United States shall conduct a study on the
impact of premiums and cost sharing under the medicaid program on
access to, and utilization of, services. Not later than January 1,
2008, the Comptroller General shall submit to Congress a report on such
study.
(d) Effective Date.--The amendments made by this section shall
apply to cost sharing imposed for items and services furnished on or
after January 1, 2006.
SEC. 3122. SPECIAL RULES FOR COST SHARING FOR PRESCRIPTION DRUGS.
(a) In General.--Section 1916A of the Social Security Act, as
inserted by section 3121, is amended by inserting after subsection (b)
the following new subsection:
``(c) Special Rules for Cost Sharing for Prescription Drugs.--
``(1) In general.--In order to encourage beneficiaries to
use drugs (in this subsection referred to as `preferred drugs')
identified by the State as the least (or less) costly effective
prescription drugs within a class of drugs (as defined by the
State), with respect to one or more groups of beneficiaries
specified by the State, subject to paragraphs (2) and (5), the
State may--
``(A) provide an increase in cost sharing (above
the nominal level otherwise permitted under section
1916 or subsection (b), but subject to paragraphs (2)
and (3)) with respect to drugs that are not preferred
drugs within a class; and
``(B) waive or reduce the cost sharing otherwise
applicable for preferred drugs within such class and
shall not apply any such cost sharing for such
preferred drugs for individuals for whom cost sharing
may not otherwise be imposed under subsection
(b)(3)(B).
``(2) Limitations.--
``(A) By income group as a multiple of nominal
amounts.--In no case may the increase in cost sharing
under paragraph (1)(A) with respect to a non-preferred
drug exceed, in the case of an individual whose family
income is--
``(i) below 100 percent of the poverty line
applicable to a family of the size involved,
the amount of nominal cost sharing (as
otherwise determined under subsection (b));
``(ii) at least 100 percent, but below 150
percent, of the poverty line applicable to a
family of the size involved, two times the
amount of nominal cost sharing (as otherwise
determined under subsection (b)); or
``(iii) at least 150 percent of the poverty
line applicable to a family of the size
involved, three times the amount of nominal
cost sharing (as otherwise determined under
subsection (b)).
``(B) Limitation to nominal for exempt
populations.--In the case of an individual who is
otherwise not subject to cost sharing due to the
application of subsection (b)(3), any increase in cost
sharing under paragraph (1)(A) with respect to a non-
preferred drug may not exceed a nominal amount (as
otherwise determined under subsection (b)).
``(C) Continued application of aggregate cap.--In
addition to the limitations imposed under subparagraphs
(A) and (B), any increase in cost sharing under
paragraph (1)(A) continues to be subject to the
aggregate cap on cost sharing applied under paragraph
(1) or (2) of subsection (b), as the case may be.
``(D) TRICARE pharmacy benefit program
limitations.--In no case may a State--
``(i) treat as a non-preferred drug under
this subsection a drug that is treated as a
preferred drug under the TRICARE pharmacy
benefit program established under section 1074g
of title 10, United States Code, as such
program is in effect on the date of the
enactment of this section; or
``(ii) impose cost sharing under this
subsection that exceeds the cost sharing
imposed under the standards under such pharmacy
benefit program, as such program is in effect
as of the date of the enactment of this
section.
``(3) Waiver.--In carrying out paragraph (1), a State shall
provide for the application of cost sharing levels applicable
to a preferred drug in the case of a drug that is not a
preferred drug if the prescribing physician determines that the
preferred drug for treatment of the same condition either would
not be as effective for the individual or would have adverse
effects for the individual or both.
``(4) Exclusion authority.--Nothing in this subsection
shall be construed as preventing a State from excluding from
paragraph (1) specified drugs or classes of drugs.
``(5) Prior authorization and appeals process.--A State may
not provide for increased cost sharing under this subsection
unless the State has implemented for outpatient prescription
drugs a system for prior authorization and an appeals process
for determinations relating to prior authorization.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to cost sharing imposed for items and services furnished on or
after October 1, 2006.
SEC. 3123. EMERGENCY ROOM COPAYMENTS FOR NON-EMERGENCY CARE.
(a) In General.--Section 1916A of the Social Security Act, as
inserted by section 3121 and as amended by section 3122, is further
amended by adding at the end the following new subsection:
``(e) State Option for Imposing Cost Sharing for Non-Emergency Care
Furnished in an Hospital Emergency Room.--
``(1) In general.--Notwithstanding section 1916 or the
previous provisions of this section, but subject to the
limitations of paragraph (2), a State may, by amendment to its
State plan under this title, impose cost sharing for non-
emergency services furnished to an individual (within one or
more groups of individuals specified by the State) in a
hospital emergency department under this subsection if the
following conditions are met:
``(A) Access to non-emergency room provider.--The
individual has actually available and accessible (as
such terms are applied by the Secretary under section
1916(b)(3)) an alternate non-emergency services
provider with respect to such services.
``(B) Notice.--The physician or hospital must
inform the beneficiary after the appropriate screening
assessment, but before providing the non-emergency
services, of the following:
``(i) The hospital may require the payment
of the State specified cost sharing before the
service can be provided.
``(ii) The name and location of an
alternate non-emergency services provider
(described in subparagraph (A)) that is
actually available and accessible (as described
in such subparagraph).
``(iii) The fact that such alternate
provider can provide the services without the
imposition of the increase in cost sharing
described in clause (i).
``(iv) The hospital provides a referral to
coordinate scheduling of this treatment.
Nothing in this subsection shall be construed as
preventing a State from applying (or waiving) cost
sharing otherwise permissible under this section to
services described in clause (iii).
``(2) Limitations.--
``(A) For poorest beneficiaries.--In the case of an
individual described in subsection (b)(1), the cost
sharing imposed under this subsection may not exceed
twice the amount determined to be nominal under this
section, subject to the percent of income limitation
otherwise applicable under subsection (b)(1).
``(B) Application to exempt populations.--In the
case of an individual who is otherwise not subject to
cost sharing under subsection (b)(3), a State may
impose cost sharing under paragraph (1) for care in an
amount that does not exceed a nominal amount (as
otherwise determined under subsection (b)) so long as
no cost sharing is imposed to receive such care through
an outpatient department or other alternative health
care provider in the geographic area of the hospital
emergency department involved.
``(C) Continued application of aggregate cap.--In
addition to the limitations imposed under subparagraphs
(A) and (B), any increase in cost sharing under
paragraph (1) continues to be subject to the aggregate
cap on cost sharing applied under paragraph (1) or (2)
of subsection (b), as the case may be.
``(3) Construction.--Nothing in this section shall be
construed--
``(A) to limit a hospital's obligations with
respect to screening and stabilizing treatment of an
emergency medical condition under section 1867; or
``(B) to modify any obligations under either State
or Federal standards relating to the application of a
prudent-layperson standard with respect to payment or
coverage of emergency services by any managed care
organization.
``(4) Determination standard.--No hospital or physician
that makes a determination with respect to the imposition of
cost sharing under this subsection shall be liable in any civil
action or proceeding for such determination absent a finding by
clear and convincing evidence of gross negligence by the
hospital or physician. The previous sentence shall not affect
any liability under section 1867 or otherwise applicable under
State law based upon the provision (or failure to provide)
care.
``(5) Definitions.--For purposes of this subsection:
``(A) Non-emergency services.--The term `non-
emergency services' means any care or services
furnished in a emergency department of a hospital that
the physician determines do not constitute an
appropriate medical screening examination or
stabilizing examination and treatment screening
required to be provided by the hospital under section
1867.
``(B) Alternate non-emergency services provider.--
The term `alternative non-emergency services provider'
means, with respect to non-emergency services for the
diagnosis or treatment of a condition, a health care
provider, such as a physician's office, health care
clinic, community health center, hospital outpatient
department, or similar health care provider, that
provides clinically appropriate services for such
diagnosis or treatment of the condition within a
clinically appropriate time of the provision of such
non-emergency services and that is participating in the
program under this title.''.
(b) Grant Funds for Establishment of Alternate Non-Emergency
Services Providers.--Section 1903 of the Social Security Act (42 U.S.C.
1396b) is amended by adding at the end the following new subsection:
``(x) Payments for Establishment of Alternate Non-Emergency
Services Providers.--
``(1) Payments.--In addition to the payments otherwise
provided under subsection (a), subject to paragraph (2), the
Secretary shall provide for payments to States under such
subsection for the establishment of alternate non-emergency
service providers (as defined in section 1916A(f)(5)(B)), or
networks of such providers.
``(2) Limitation.--The total amount of payments under this
subsection shall be equal to, and shall not exceed,
$100,000,000 during the four-year period beginning with 2006.
This subsection constitutes budget authority in advance of
appropriations Acts and represents the obligation of the
Secretary to provide for the payment of amounts provided under
this subsection.
``(3) Preference.--In providing for payments to States
under this subsection, the Secretary shall provide preference
to States that establish, or provide for, alternate non-
emergency services providers or networks of such providers
that--
``(A) serve rural or underserved areas where
beneficiaries under this title may not have regular
access to providers of primary care services; or
``(B) are in partnership with local community
hospitals.
``(4) Form and manner of payment.--Payment to a State under
this subsection shall be made only upon the filing of such
application in such form and in such manner as the Secretary
shall specify. Payment to a State under this subsection shall
be made in the same manner as other payments under section
1903(a).''.
(c) Effective Date.--The amendments made by this section shall
apply to non-emergency services furnished on or after the date of the
enactment of this Act.
SEC. 3124. USE OF BENCHMARK BENEFIT PACKAGES.
Title XIX of the Social Security Act is amended by redesignating
section 1936 as section 1937 and by inserting after section 1935 the
following new section:
``state flexibility in benefit packages
``Sec. 1936. (a) State Option of Providing Benchmark Benefits.--
``(1) Authority.--
``(A) In general.--Notwithstanding any other
provision of this title, a State, at its option as a
State plan amendment, may provide for medical
assistance under this title to individuals within one
or more groups of individuals specified by the State
through enrollment in coverage that provides--
``(i) benchmark coverage described in
subsection (b)(1) and, for a qualifying child,
benchmark dental coverage as defined in
subparagraph (F); or
``(ii) benchmark equivalent coverage
described in subsection (b)(2)and, for a
qualifying child, benchmark dental coverage as
defined in subparagraph (F).
``(B) Limitation.--The State may only exercise the
option under subparagraph (A) for eligibility
categories that had been established before the date of
the enactment of this section.
``(C) Option of wrap-around benefits.--In the case
of coverage described in subparagraph (A), a State, at
its option, may provide such wrap-around or additional
benefits as the State may specify.
``(D) Treatment as medical assistance.--Payment of
premiums for such coverage under this subsection shall
be treated as payment of other insurance premiums
described in the third sentence of section 1905(a).
``(E) Qualifying child defined.--For purposes of
subparagraph (A), the term `qualifying child' means a
child under 18 years of age with a family income below
133 percent of the poverty line applicable to a family
of the size involved.
``(F) Benchmark dental coverage.--For purposes of
subparagraph (A), the term `benchmark dental coverage'
means, with respect to a State, dental benefits
coverage that is equivalent to or better than the
dental coverage offered under the dental benefit plan
that covers the greatest number of individuals in the
State who are not entitled to medical assistance under
this title.
``(2) Application.--
``(A) In general.--Except as provided in
subparagraph (B), a State may require that a full-
benefit eligible individual (as defined in subparagraph
(C)) within a group obtain benefits under this title
through enrollment in coverage described in paragraph
(1)(A). A State may apply the previous sentence to
individuals within one or more groups of such
individuals.
``(B) Limitation on application.--A State may not
require under subparagraph (A) an individual to obtain
benefits through enrollment described in paragraph
(1)(A) if the individual is within one of the following
categories of individuals:
``(i) Mandatory pregnant women and
children.--The individual is a pregnant woman
or child under 18 years of age who is required
to be covered under the State plan under
section 1902(a)(10)(A)(i).
``(ii) Dual eligibles.--The individual is
entitled to benefits under any part of title
XVIII.
``(iii) Terminally ill hospice patients.--
The individual is terminally ill and is
receiving benefits for hospice care under this
title.
``(iv) Eligible on basis of
institutionalization.--The individual is an
inpatient in a hospital, nursing facility,
intermediate care facility for the mentally
retarded, or other medical institution, and is
required, as a condition of receiving services
in such institution under the State plan, to
spend for costs of medical care all but a
minimal amount of the individual's income
required for personal needs.
``(v) Medically frail and special medical
needs individuals.--The individual is medically
frail or otherwise an individual with special
medical needs (as identified in accordance with
regulations of the Secretary).
``(vi) Beneficiaries qualifying for long-
term care services.--The individual qualifies
based on medical condition for medical
assistance for long-term care services
described in section 1917(c)(1)(C).
``(C) Full-benefit eligible individuals.--
``(i) In general.--For purposes of this
paragraph, subject to clause (ii), the term
`full-benefit eligible individual' means for a
State for a month an individual who is
determined eligible by the State for medical
assistance for all services defined in section
1905(a) which are covered under the State plan
under this title for such month under section
1902(a)(10)(A) or under any other category of
eligibility for medical assistance for all such
services under this title, as determined by the
Secretary.
``(ii) Exclusion of medically needy and
spend-down populations.--Such term shall not
include an individual determined to be eligible
by the State for medical assistance under
section 1902(a)(10)(C) or by reason of section
1902(f) or otherwise eligible based on a
reduction of income based on costs incurred for
medical or other remedial care.
``(b) Benchmark Benefit Packages.--
``(1) In general.--For purposes of subsection (a)(1), each
of the following coverage shall be considered to be benchmark
coverage:
``(A) FEHBP-equivalent health insurance coverage.--
The standard Blue Cross/Blue Shield preferred provider
option service benefit plan, described in and offered
under section 8903(1) of title 5, United States Code.
``(B) State employee coverage.--A health benefits
coverage plan that is offered and generally available
to State employees in the State involved.
``(C) Coverage offered through hmo.--The health
insurance coverage plan that--
``(i) is offered by a health maintenance
organization (as defined in section 2791(b)(3)
of the Public Health Service Act), and
``(ii) has the largest insured commercial,
non-medicaid enrollment of covered lives of
such coverage plans offered by such a health
maintenance organization in the State involved.
``(2) Benchmark-equivalent coverage.--For purposes of
subsection (a)(1), coverage that meets the following
requirement shall be considered to be benchmark-equivalent
coverage:
``(A) Inclusion of basic services.--The coverage
includes benefits for items and services within each of
the following categories of basic services:
``(i) Inpatient and outpatient hospital
services.
``(ii) Physicians' surgical and medical
services.
``(iii) Laboratory and x-ray services.
``(iv) Well-baby and well-child care,
including age-appropriate immunizations.
``(v) Other appropriate preventive
services, as designated by the Secretary.
``(B) Aggregate actuarial value equivalent to
benchmark package.--The coverage has an aggregate
actuarial value that is at least actuarially equivalent
to one of the benchmark benefit packages described in
paragraph (1).
``(C) Substantial actuarial value for additional
services included in benchmark package.--With respect
to each of the following categories of additional
services for which coverage is provided under the
benchmark benefit package used under subparagraph (B),
the coverage has an actuarial value that is equal to at
least 75 percent of the actuarial value of the coverage
of that category of services in such package:
``(i) Coverage of prescription drugs.
``(ii) Mental health services.
``(iii) Vision services.
``(iv) Hearing services.
``(3) Determination of actuarial value.--The actuarial
value of coverage of benchmark benefit packages shall be set
forth in an actuarial opinion in an actuarial report that has
been prepared--
``(A) by an individual who is a member of the
American Academy of Actuaries;
``(B) using generally accepted actuarial principles
and methodologies;
``(C) using a standardized set of utilization and
price factors;
``(D) using a standardized population that is
representative of the population involved;
``(E) applying the same principles and factors in
comparing the value of different coverage (or
categories of services);
``(F) without taking into account any differences
in coverage based on the method of delivery or means of
cost control or utilization used; and
``(G) taking into account the ability of a State to
reduce benefits by taking into account the increase in
actuarial value of benefits coverage offered under this
title that results from the limitations on cost sharing
under such coverage.
The actuary preparing the opinion shall select and specify in
the memorandum the standardized set and population to be used
under subparagraphs (C) and (D).
``(4) Coverage of rural health clinic and fqhc services.--
Notwithstanding the previous provisions of this section, a
State may not provide for medical assistance through enrollment
of an individual with benchmark coverage or benchmark
equivalent coverage under this section unless--
``(A) the individual has access, through such
coverage or otherwise, to services described in
subparagraphs (B) and (C) of section 1905(a)(2); and
``(B) payment for such services is made in
accordance with the requirements of section
1902(bb).''.
SEC. 3125. STATE OPTION TO ESTABLISH NON-EMERGENCY MEDICAL
TRANSPORTATION PROGRAM.
(a) In General.--Section 1902(a) of the Social Security Act (42
U.S.C. 1396a(a)) is amended--
(1) in paragraph (66), by striking ``and'' at the end;
(2) in paragraph (67) by striking the period at the end and
inserting ``; and''; and
(3) by inserting after paragraph (67) the following:
``(68) at the option of the State and notwithstanding
paragraph (10)(B) or (23), provide for the establishment of a
non-emergency medical transportation brokerage program in order
to more cost-effectively provide transportation for individuals
eligible for medical assistance under the State plan who need
access to medical care or services and have no other means of
transportation which--
``(A) may include a wheelchair van, taxi, stretcher
car, bus passes and tickets, secured transportation,
and such other transportation as the Secretary
determines appropriate; and
``(B) may be conducted under contract with a broker
who--
``(i) is selected through a competitive
bidding process based on the State's evaluation
of the broker's experience, performance,
references, resources, qualifications, and
costs;
``(ii) has oversight procedures to monitor
beneficiary access and complaints and ensure
that transport personnel are licensed,
qualified, competent, and courteous;
``(iii) is subject to regular auditing and
oversight by the State in order to ensure the
quality of the transportation services provided
and the adequacy of beneficiary access to
medical care and services; and
``(iv) complies with such requirements
related to prohibitions on referrals and
conflict of interest as the Secretary shall
establish (based on the prohibitions on
physician referrals under section 1877 and such
other prohibitions and requirements as the
Secretary determines to be appropriate).''.
(b) Effective Date.--The amendments made by subsection (a) take
effect on the date of the enactment of this Act.
(c) IG Report on Utilization.--Not later than January 1, 2007, the
Inspector General of the Department of Health and Human Services shall
submit to Congress a report that examines the non-emergency medical
transportation brokerage programs implemented under section 1902(a)(68)
of the Social Security Act, as inserted by subsection (a). The report
shall include findings regarding conflicts of interest and improper
utilization of transportation services under such programs, as well as
recommendations for improvements in such programs.
SEC. 3126. EXEMPTING WOMEN COVERED UNDER BREAST OR CERVICAL CANCER
PROGRAM.
Notwithstanding any other provision of law, none of provisions of
the previous sections of this chapter, or amendments made by such
sections, shall apply to women who are receiving medical assistance by
virtue of the application of sections 1902(a)(10)(A)(ii)(XVIII) and
1902(aa) of the Social Security Act (42 U.S.C.
1396a(a)(10)(A)(ii)(XVIII), 1396a(aa)).
CHAPTER 4--EXPANDED ACCESS TO CERTAIN BENEFITS
SEC. 3131. EXPANDED ACCESS TO HOME AND COMMUNITY-BASED SERVICES FOR THE
ELDERLY AND DISABLED.
(a) In General.--Section 1905(a) of the Social Security Act (42
U.S.C. 1396d(a)) is amended--
(1) in paragraph (27), by striking ``and'' at the end;
(2) by redesignating paragraph (28) as paragraph (29); and
(3) by inserting after paragraph (27) the following new
paragraph:
``(28) subject to section 1902(cc), home and community-
based services (within the scope of services described in
paragraph (4)(B) of section 1915(c) for which the Secretary has
the authority to approve a waiver and not including room and
board) provided pursuant to a written plan of care for
individuals--
``(A) who are 65 years of age or older, who are
disabled (as defined under the State plan), who are
persons with developmental disabilities or mental
retardation or persons with related conditions, or who
are within a subgroup thereof under the State plan;
``(B) with respect to whom there has been a
determination, in the manner described in paragraph (1)
of such section, that but for the provision of such
services the individuals would require the level of
care provided in a hospital, a nursing facility, or an
intermediate care facility for the mentally retarded
the cost of which could be reimbursed under the State
plan; and
``(C) who qualify for medical assistance under the
eligibility standards in effect in the State (which may
include standards in effect under an approved waiver)
as of the date of the enactment of this paragraph;
and''.
(b) Conditions.--Section 1902 of such Act (42 U.S.C. 1396a) is
amended by adding at the end the following new subsection:
``(cc) Provision of Home and Community-Based Services Under State
Plan.--
``(1) Conditions.--A State may provide home and community-
based services under section 1905(a)(28), other than through a
waiver or demonstration project under section 1915 or 1115,
only if the following conditions are met:
``(A) Expiration of previous waiver.--Any State
waiver or demonstration project under either such
section with respect to services for individuals
described in such section has expired.
``(B) Information.--The State must monitor and
report to the Secretary, in a form and manner specified
by the Secretary and on a quarterly basis, enrollment
and expenditures for provision of such services under
such section.
``(2) Options.--Notwithstanding any other provision of this
title, in a State's provision of services under section
1905(a)(28)--
``(A) a State is not required to comply with the
requirements of section 1902(a)(1) (relating to
statewideness), section 1902(a)(10)(B) (relating to
comparability), and section 1902(a)(10)(C)(i)(III)
(relating to income and resource rules applicable in
the community);
``(B) a State may limit the number of individuals
who are eligible for such services and may establish
waiting lists for the receipt of such services; and
``(C) a State may limit the amount, duration, and
scope of such services.
Nothing in this section shall be construed as applying the
previous sentence to any items or services other than home and
community-based services provided under section 1905(a)(28).
``(3) Use of electronic data.--The State shall permit
health care providers to comply with documentation and data
requirements imposed with respect to home and community-based
services through the maintenance of data in electronic form
rather than in paper form.''.
(c) Effective Date.--The amendments made by this section shall
apply to home and community-based services furnished on or after
October 1, 2006.
SEC. 3132. OPTIONAL CHOICE OF SELF-DIRECTED PERSONAL ASSISTANCE
SERVICES (CASH AND COUNSELING).
(a) Exemption From Certain Requirements.--Section 1915 of the
Social Security Act (42 U.S.C. 1396n) is amended by adding at the end
the following new subsection:
``(i)(1) A State may provide, as `medical assistance', payment for
part or all of the cost of self-directed personal assistance services
(other than room and board) under the plan which are provided pursuant
to a written plan of care to individuals with respect to whom there has
been a determination that, but for the provision of such services, the
individuals would require and receive personal care services under the
plan, or home and community-based services provided pursuant to a
waiver under subsection (c). Self-directed personal assistance services
may not be provided under this subsection to individuals who reside in
a home or property that is owned, operated, or controlled by a provider
of services, not related by blood or marriage.
``(2) The Secretary shall not grant approval for a State self-
directed personal assistance services program under this section unless
the State provides assurances satisfactory to the Secretary of the
following:
``(A) Necessary safeguards have been taken to protect the
health and welfare of individuals provided services under the
program, and to assure financial accountability for funds
expended with respect to such services.
``(B) The State will provide, with respect to individuals
who--
``(i) are entitled to medical assistance for
personal care services under the plan, or receive home
and community-based services under a waiver granted
under subsection (c);
``(ii) may require self-directed personal
assistance services; and
``(iii) may be eligible for self-directed personal
assistance services,
an evaluation of the need for personal care under the plan, or
personal services under a waiver granted under subsection (c).
``(C) Such individuals who are determined to be likely to
require personal care under the plan, or home and community-
based services under a waiver granted under subsection (c) are
informed of the feasible alternatives, if available under the
State's self-directed personal assistance services program, at
the choice of such individuals, to the provision of personal
care services under the plan, or personal assistance services
under a waiver granted under subsection (c).
``(D) The State will provide for a support system that
ensures participants in the self-directed personal assistance
services program are appropriately assessed and counseled prior
to enrollment and are able to manage their budgets. Additional
counseling and management support may be provided at the
request of the participant.
``(E) The State will provide to the Secretary an annual
report on the number of individuals served and total
expenditures on their behalf in the aggregate. The State shall
also provide an evaluation of overall impact on the health and
welfare of participating individuals compared to non-
participants every three years.
``(3) A State may provide self-directed personal assistance
services under the State plan without regard to the requirements of
section 1902(a)(1) and may limit the population eligible to receive
these services and limit the number of persons served without regard to
section 1902(a)(10)(B).
``(4)(A) For purposes of this subsection, the term `self-directed
personal assistance services' means personal care and related services,
or home and community-based services otherwise available under the plan
under this title or subsection (c), that are provided to an eligible
participant under a self-directed personal assistance services program
under this section, under which individuals, within an approved self-
directed services plan and budget, purchase personal assistance and
related services, and permits participants to hire, fire, supervise,
and manage the individuals providing such services.
``(B) At the election of the State--
``(i) a participant may choose to use any individual
capable of providing the assigned tasks including legally
liable relatives as paid providers of the services; and
``(ii) the individual may use the individual's budget to
acquire items that increase independence or substitute (such as
a microwave oven or an accessibility ramp) for human
assistance, to the extent that expenditures would otherwise be
made for the human assistance.
``(5) For purpose of this section, the term `approved self-directed
services plan and budget' means, with respect to a participant, the
establishment of a plan and budget for the provision of self-directed
personal assistance services, consistent with the following
requirements:
``(A) Self-direction.--The participant (or in the case of a
participant who is a minor child, the participant's parent or
guardian, or in the case of an incapacitated adult, another
individual recognized by State law to act on behalf of the
participant) exercises choice and control over the budget,
planning, and purchase of self-directed personal assistance
services, including the amount, duration, scope, provider, and
location of service provision.
``(B) Assessment of needs.--There is an assessment of the
needs, strengths, and preferences of the participants for such
services.
``(C) Service plan.--A plan for such services (and supports
for such services) for the participant has been developed and
approved by the State based on such assessment through a
person-centered process that--
``(i) builds upon the participant's capacity to
engage in activities that promote community life and
that respects the participant's preferences, choices,
and abilities; and
``(ii) involves families, friends, and
professionals in the planning or delivery of services
or supports as desired or required by the participant.
``(D) Service budget.--A budget for such services and
supports for the participant has been developed and approved by
the State based on such assessment and plan and on a
methodology that uses valid, reliable cost data, is open to
public inspection, and includes a calculation of the expected
cost of such services if those services were not self-directed.
The budget may not restrict access to other medically necessary
care and services furnished under the plan and approved by the
State but not included in the budget.
``(E) Application of quality assurance and risk
management.--There are appropriate quality assurance and risk
management techniques used in establishing and implementing
such plan and budget that recognize the roles and
responsibilities in obtaining services in a self-directed
manner and assure the appropriateness of such plan and budget
based upon the participant's resources and capabilities.
``(6) A State may employ a financial management entity to make
payments to providers, track costs, and make reports under the program.
Payment for the activities of the financial management entity shall be
at the administrative rate established in section 1903(a).''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to services furnished on or after January 1, 2006.
SEC. 3133. EXPANSION OF STATE LONG-TERM CARE PARTNERSHIP PROGRAM.
(a) In General.--Section 1917(b)(1)(C) of the Social Security Act
(42 U.S.C. 1396p(b)(1)(C)) is amended--
(1) in clause (ii), by inserting ``or which has a State
plan amendment that provides for a qualified State long-term
care insurance partnership (as defined in clause (iii))'' after
``1993,''; and
(2) by adding at the end the following new clauses:
``(iii) For purposes of this paragraph, the term `qualified
State long-term care insurance partnership' means an approved
State plan amendment under this title that provides for the
disregard of any assets or resources in an amount equal to the
insurance benefit payments that are made to or on behalf of an
individual who is a beneficiary under a long-term care
insurance policy (including a certificate issued under a group
insurance contract), if the following requirements are met:
``(I) The policy covers an insured who was a
resident of such State when coverage first became
effective under the policy.
``(II) The policy is a qualified long-term care
insurance policy (as defined in section 7702B(b) of the
Internal Revenue Code of 1986) issued on or after the
first day of the first calendar quarter in which the
plan amendment was submitted to the Secretary.
``(III) If the policy does not provide some level
of inflation protection, the insured was offered,
before the policy was sold, a long-term care insurance
policy that provides some level of inflation
protection.
``(IV) The State Medicaid agency under section
1902(a)(5) provides information and technical
assistance to the State insurance department on the
insurance department's role of assuring that any
individual who sells a long-term care insurance policy
under the partnership receives training or demonstrates
evidence of an understanding of such policies and how
they relate to other public and private coverage of
long-term care.
``(V) The issuer of the policy provides regular
reports to the Secretary that include, in accordance
with regulations of the Secretary (promulgated after
consultation with the States), notification regarding
when all benefits provided under the policy have been
paid and the amount of such benefits paid, when the
policy otherwise terminates, and such other information
as the Secretary determines may be appropriate to the
administration of such partnerships.
``(VI) The State does not impose any requirement
affecting the terms or benefits of such a policy unless
the State imposes such requirement on long-term care
insurance policies without regard to whether the policy
is covered under the partnership or is offered in
connection with such a partnership.
In the case of a long-term care insurance policy which is
exchanged for another such policy, subclause (I) shall be
applied based on the coverage of the first such policy that was
exchanged.
``(iv) The Secretary--
``(I) as appropriate, shall provide copies of the
reports described in clause (iii)(V) to the State
involved; and
``(II) shall promote the education of consumers
regarding qualified State long-term care insurance
partnerships.
``(v) The Secretary, in consultation with other appropriate
Federal agencies, issuers of long-term care insurance, the
National Association of Insurance Commissioners, and State
insurance commissioners, shall develop recommendations for
Congress to authorize and fund a uniform minimum data set to be
reported electronically by all issuers of long-term care
insurance policies under qualified State long-term care
insurance partnerships to a secure, centralized electronic
query and report-generating mechanism that the State, the
Secretary, and other Federal agencies can access.''.
(b) Construction.--Nothing in the amendments made by subsection (a)
shall be construed as affecting the treatment of long-term care
insurance policies that will be, are, or were provided under a State
plan amendment described in section 1917(b)(1)(C)(ii) of the Social
Security Act that was approved as of May 14, 1993.
(c) Effective Date.--A State plan amendment that provides for a
qualified State long-term care insurance partnership under the
amendments made by subsection (a) may provide that such amendment is
effective for long-term care insurance policies issued on or after a
date, specified in the amendment, that is not earlier than the first
day of the first calendar quarter in which the plan amendment was
submitted to the Secretary of Health and Human Services.
(d) Standards for Reciprocal Recognition Among Partnership
States.--In order to permit portability in long-term care insurance
policies purchased under State long-term care insurance partnerships,
the Secretary of Health and Human Services may develop, in consultation
with the States and the National Association of Insurance
Commissioners, uniform standards for reciprocal recognition of such
policies among States with qualified State long-term care insurance
partnerships.
SEC. 3134. HEALTH OPPORTUNITY ACCOUNTS.
Title XIX of the Social Security Act, as amended by section 3124,
is amended--
(1) by redesignating section 1937 as section 1938; and
(2) by inserting after section 1936 the following new
section:
``health opportunity accounts
``Sec. 1937. (a) Authority.--
``(1) In general.--Notwithstanding any other provision of
this title, the Secretary shall establish a demonstration
program under which States may provide under their State plans
under this title (including such a plan operating under a
statewide waiver under section 1115) in accordance with this
section for the provision of alternative benefits consistent
with subsection (c) for eligible population groups in one or
more geographic areas of the State specified by the State. An
amendment under the previous sentence is referred to in this
section as a `State demonstration program'.
``(2) Initial demonstration.--The demonstration program
under this section shall begin on January 1, 2006. During the
first 5 years of such program, the Secretary shall not approve
more than 10 State demonstration programs, with each State
demonstration program covering one or more geographic areas
specified by the State. After such 5-year period--
``(A) unless the Secretary finds, taking into
account cost-effectiveness, quality of care, and other
criteria that the Secretary specifies, that a State
demonstration program previously implemented has been
unsuccessful, such a demonstration program may be
extended or made permanent in the State; and
``(B) unless the Secretary finds, taking into
account cost-effectiveness, quality of care, and other
criteria that the Secretary specifies, that all State
demonstration programs previously implemented were
unsuccessful, other States may implement State
demonstration programs.
``(3) Approval.--The Secretary shall not approve a State
demonstration program under paragraph (1) unless the program
includes the following:
``(A) Creating patient awareness of the high cost
of medical care.
``(B) Providing incentives to patients to seek
preventive care services.
``(C) Reducing inappropriate use of health care
services.
``(D) Enabling patients to take responsibility for
health outcomes.
``(E) Providing enrollment counselors and ongoing
education activities.
``(F) Providing transactions involving health
opportunity accounts to be conducted electronically and
without cash.
``(G) Providing access to negotiated provider
payment rates consistent with this section.
Nothing in this section shall be construed as preventing a
State demonstration program from providing incentives for
patients obtaining appropriate preventive care (as defined for
purposes of section 223(c)(2)(C) of the Internal Revenue Code
of 1986), such as additional account contributions for an
individual demonstrating healthy prevention practices.
``(4) No requirement for statewideness.--Nothing in this
section or any other provision of law shall be construed to
require that a State must provide for the implementation of a
State demonstration program on a Statewide basis.
``(5) Reports.--The Secretary shall periodically submit to
Congress reports regarding the success of State demonstration
programs.
``(b) Eligible Population Groups.--
``(1) In general.--A State demonstration program under this
section shall specify the eligible population groups consistent
with paragraphs (2) and (3).
``(2) Eligibility limitations during initial demonstration
period.--During the initial 5 years of the demonstration
program under this section, a State demonstration program shall
not apply to any of the following individuals:
``(A) Individuals who are 65 years of age or older.
``(B) Individuals who are disabled, regardless of
whether or not their eligibility for medical assistance
under this title is based on such disability.
``(C) Individuals who are eligible for medical
assistance under this title only because they are (or
were within the previous 60 days) pregnant.
``(D) Individuals who have been eligible for
medical assistance for a continuous period of less than
3 months.
``(3) Additional limitations.--A State demonstration
program shall not apply to any individual within a category of
individuals described in section 1936(a)(2)(B).
``(4) Limitations.--
``(A) State option.--This subsection shall not be
construed as preventing a State from further limiting
eligibility.
``(B) On enrollees in medicaid managed care
organizations.--Insofar as the State provides for
eligibility of individuals who are enrolled in medicaid
managed care organizations, such individuals may
participate in the State demonstration program only if
the State provides assurances satisfactory to the
Secretary that the following conditions are met with
respect to any such organization:
``(i) In no case may the number of such
individuals enrolled in the organization who
participate in the program exceed 5 percent of
the total number of individuals enrolled in
such organization.
``(ii) The proportion of enrollees in the
organization who so participate is not
significantly disproportionate to the
proportion of such enrollees in other such
organizations who participate.
``(iii) The State has provided for an
appropriate adjustment in the per capita
payments to the organization to account for
such participation, taking into account
differences in the likely use of health
services between enrollees who so participate
and enrollees who do not so participate.
``(5) Voluntary participation.--An eligible individual
shall be enrolled in a State demonstration program only if the
individual voluntarily enrolls. Except in such hardship cases
as the Secretary shall specify, such an enrollment shall be
effective for a period of 12 months, but may be extended for
additional periods of 12 months each with the consent of the
individual.
``(c) Alternative Benefits.--
``(1) In general.--The alternative benefits provided under
this section shall consist, consistent with this subsection, of
at least--
``(A) coverage for medical expenses in a year for
items and services for which benefits are otherwise
provided under this title after an annual deductible
described in paragraph (2) has been met; and
``(B) contribution into a health opportunity
account.
Nothing in subparagraph (A) shall be construed as preventing a
State from providing for coverage of preventive care (referred
to in subsection (a)(3)) within the alternative benefits
without regard to the annual deductible.
``(2) Annual deductible.--The amount of the annual
deductible described in paragraph (1)(A) shall be at least 100
percent, but no more than 110 percent, of the annualized amount
of contributions to the health opportunity account under
subsection (d)(2)(A)(i), determined without regard to any
limitation described in subsection (d)(2)(C)(i)(II).
``(3) Access to negotiated provider payment rates.--
``(A) Fee-for-service enrollees.--In the case of an
individual who is participating in a State
demonstration program and who is not enrolled with a
medicaid managed care organization, the State shall
provide that the individual may obtain demonstration
program medicaid services from--
``(i) any participating provider under this
title at the same payment rates that would be
applicable to such services if the deductible
described in paragraph (1)(A) was not
applicable; or
``(ii) any provider at payment rates that
do not exceed 125 percent of the payment rate
that would be applicable to such services
furnished by a participating provider under
this title if the deductible described in
paragraph (1)(A) was not applicable.
``(B) Treatment under medicaid managed care
plans.--In the case of an individual who is
participating in a State demonstration program and is
enrolled with a medicaid managed care organization, the
State shall enter into an arrangement with the
organization under which the individual may obtain
demonstration program medicaid services from any
provider under such organization at payment rates that
do not exceed the payment rate that would be applicable
to such services if the deductible described in
paragraph (1)(A) was not applicable.
``(C) Computation.--The payment rates described in
subparagraphs (A) and (B) shall be computed without
regard to any cost sharing that would be otherwise
applicable under sections 1916 and 1916A.
``(D) Definitions.--For purposes of this paragraph:
``(i) The term `demonstration program
medicaid services' means, with respect to an
individual participating in a State
demonstration program, services for which the
individual would be provided medical assistance
under this title but for the application of the
deductible described in paragraph (1)(A).
``(ii) The term `participating provider'
means--
``(I) with respect to an individual
described in subparagraph (A), a health
care provider that has entered into a
participation agreement with the State
for the provision of services to
individuals entitled to benefits under
the State plan; or
``(II) with respect to an
individual described in subparagraph
(B) who is enrolled in a medicaid
managed care organization, a health
care provider that has entered into an
arrangement for the provision of
services to enrollees of the
organization under this title.
``(4) No effect on subsequent benefits.--Except as provided
under paragraphs (1) and (2), alternative benefits for an
eligible individual shall consist of the benefits otherwise
provided to the individual, including cost sharing relating to
such benefits.
``(5) Overriding cost sharing and comparability
requirements for alternative benefits.--The provisions of this
title relating to cost sharing for benefits (including sections
1916 and 1916A) shall not apply with respect to benefits to
which the annual deductible under paragraph (1)(A) applies. The
provisions of section 1902(a)(10)(B) (relating to
comparability) shall not apply with respect to the provision of
alternative benefits (as described in this subsection).
``(6) Treatment as medical assistance.--Subject to
subparagraphs (D) and (E) of subsection (d)(2), payments for
alternative benefits under this section (including
contributions into a health opportunity account) shall be
treated as medical assistance for purposes of section 1903(a).
``(7) Use of tiered deductible and cost sharing.--
``(A) In general.--A State--
``(i) may vary the amount of the annual
deductible applied under paragraph (1)(A) based
on the income of the family involved so long as
it does not favor families with higher income
over those with lower income; and
``(ii) may vary the amount of the maximum
out-of-pocket cost sharing (as defined in
subparagraph (B)) based on the income of the
family involved so long as it does not favor
families with higher income over those with
lower income.
``(B) Maximum out-of-pocket cost sharing.--For
purposes of subparagraph (A)(ii), the term `maximum
out-of-pocket cost sharing' means, for an individual or
family, the amount by which the annual deductible level
applied under paragraph (1)(A) to the individual or
family exceeds the balance in the health opportunity
account for the individual or family.
``(8) Contributions by employers.--Nothing in this section
shall be construed as preventing an employer from providing
health benefits coverage consisting of the coverage described
in paragraph (1)(A) to individuals who are provided alternative
benefits under this section.
``(d) Health Opportunity Account.--
``(1) In general.--For purposes of this section, the term
`health opportunity account' means an account that meets the
requirements of this subsection.
``(2) Contributions.--
``(A) In general.--No contribution may be made into
a health opportunity account except--
``(i) contributions by the State under this
title; and
``(ii) contributions by other persons and
entities, such as charitable organizations.
``(B) State contribution.--A State shall specify
the contribution amount that shall be deposited under
subparagraph (A)(i) into a health opportunity account.
``(C) Limitation on annual state contribution
provided and permitting imposition of maximum account
balance.--
``(i) In general.--A State--
``(I) may impose limitations on the
maximum contributions that may be
deposited under subparagraph (A)(i)
into a health opportunity account in a
year;
``(II) may limit contributions into
such an account once the balance in the
account reaches a level specified by
the State; and
``(III) subject to clauses (ii) and
(iii) and subparagraph (D)(i), may not
provide contributions described in
subparagraph (A)(i) to a health
opportunity account on behalf of an
individual or family to the extent the
amount of such contributions (including
both State and Federal shares) exceeds,
on an annual basis, $2,500 for each
individual (or family member) who is an
adult and $1,000 for each individual
(or family member) who is a child.
``(ii) Indexing of dollar limitations.--For
each year after 2006, the dollar amounts
specified in clause (i)(III) shall be annually
increased by the Secretary by a percentage that
reflects the annual percentage increase in the
medical care component of the consumer price
index for all urban consumers.
``(iii) Budget neutral adjustment.--A State
may provide for dollar limitations in excess of
those specified in clause (i)(III) (as
increased under clause (ii)) for specified
individuals if the State provides assurances
satisfactory to the Secretary that
contributions otherwise made to other
individuals will be reduced in a manner so as
to provide for aggregate contributions that do
not exceed the aggregate contributions that
would otherwise be permitted under this
subparagraph.
``(D) Limitations on federal matching.--
``(i) State contribution.--A State may
contribute under subparagraph (A)(i) amounts to
a health opportunity account in excess of the
limitations provided under subparagraph
(C)(i)(III), but no Federal financial
participation shall be provided under section
1903(a) with respect to contributions in excess
of such limitations.
``(ii) No ffp for private contributions.--
No Federal financial participation shall be
provided under section 1903(a) with respect to
any contributions described in subparagraph
(A)(ii) to a health opportunity account.
``(E) Application of different matching rates.--The
Secretary shall provide a method under which, for
expenditures made from a health opportunity account for
medical care for which the Federal matching rate under
section 1903(a) exceeds the Federal medical assistance
percentage, a State may obtain payment under such
section at such higher matching rate for such
expenditures.
``(3) Use.--
``(A) General uses.--
``(i) In general.--Subject to the
succeeding provisions of this paragraph,
amounts in a health opportunity account may be
used for payment of such health care
expenditures as the State specifies.
``(ii) General limitation.--In no case
shall such account be used for payment for
health care expenditures that are not payment
of medical care (as defined by section 213(d)
of the Internal Revenue Code of 1986).
``(iii) State restrictions.--In applying
clause (i), a State may restrict payment for--
``(I) providers of items and
services to providers that are licensed
or otherwise authorized under State law
to provide the item or service and may
deny payment for such a provider on the
basis that the provider has been found,
whether with respect to this title or
any other health benefit program, to
have failed to meet quality standards
or to have committed one or more acts
of fraud or abuse; and
``(II) items and services insofar
as the State finds they are not
medically appropriate or necessary.
``(iv) Electronic withdrawals.--The State
demonstration program shall provide for a
method whereby withdrawals may be made from the
account for such purposes using an electronic
system and shall not permit withdrawals from
the account in cash.
``(B) Maintenance of health opportunity account
after becoming ineligible for public benefit.--
``(i) In general.--Notwithstanding any
other provision of law, if an account holder of
a health opportunity account becomes ineligible
for benefits under this title because of an
increase in income or assets--
``(I) no additional contribution
shall be made into the account under
paragraph (2)(A)(i);
``(II) subject to clause (iii), the
balance in the account shall be reduced
by 25 percent; and
``(III) subject to the succeeding
provisions of this subparagraph, the
account shall remain available to the
account holder for withdrawals under
the same terms and conditions as if the
account holder remained eligible for
such benefits.
``(ii) Special rules.--Withdrawals under
this subparagraph from an account--
``(I) shall be available for the
purchase of health insurance coverage;
and
``(II) may, subject to clause (iv),
be made available (at the option of the
State) for such additional expenditures
(such as job training and tuition
expenses) specified by the State (and
approved by the Secretary) as the State
may specify.
``(iii) Exception from 25 percent savings
to government for private contributions.--
Clause (i)(II) shall not apply to the portion
of the account that is attributable to
contributions described in paragraph
(2)(A)(ii). For purposes of accounting for such
contributions, withdrawals from a health
opportunity account shall first be attributed
to contributions described in paragraph
(2)(A)(i).
``(iv) Condition for non-health
withdrawals.--No withdrawal may be made from an
account under clause (ii)(II) unless the
accountholder has participated in the program
under this section for at least 1 year.
``(v) No requirement for continuation of
coverage.--An account holder of a health
opportunity account, after becoming ineligible
for medical assistance under this title, is not
required to purchase high-deductible or other
insurance as a condition of maintaining or
using the account.
``(4) Administration.--A State may coordinate
administration of health opportunity accounts through the use
of a third party administrator and reasonable expenditures for
the use of such administrator shall be reimbursable to the
State in the same manner as other administrative expenditures
under section 1903(a)(7).
``(5) Treatment.--Amounts in, or contributed to, a health
opportunity account shall not be counted as income or assets
for purposes of determining eligibility for benefits under this
title.
``(6) Unauthorized withdrawals.--A State may establish
procedures--
``(A) to penalize or remove an individual from the
health opportunity account based on nonqualified
withdrawals by the individual from such an account; and
``(B) to recoup costs that derive from such
nonqualified withdrawals.''.
CHAPTER 5--OTHER PROVISIONS
SEC. 3141. INCREASE IN MEDICAID PAYMENTS TO INSULAR AREAS.
Section 1108(g) of the Social Security Act (42 U.S.C. 1308(g)) is
amended--
(1) in paragraph (2), by inserting ``and subject to
paragraph (3)'' after ``subsection (f)''; and
(2) by adding at the end the following new paragraph:
``(3) Fiscal years 2006 and 2007 for certain insular
areas.--The amounts otherwise determined under this subsection
for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana
Islands, and American Samoa for fiscal year 2006 and fiscal
year 2007 shall be increased by the following amounts:
``(A) For Puerto Rico, $12,000,000 for fiscal year
2006 and $12,000,000 for fiscal year 2007.
``(B) For the Virgin Islands, $2,500,000 for fiscal
year 2006 and $5,000,000 for fiscal year 2007.
``(C) For Guam, $2,500,000 for fiscal year 2006 and
$5,000,000 for fiscal year 2007.
``(D) For the Northern Mariana Islands, $1,000,000
for fiscal year 2006 and $2,000,000 for fiscal year
2007.
``(E) For American Samoa, $2,000,000 for fiscal
year 2006 and $4,000,000 for fiscal year 2007.
Such amounts shall not be taken into account in applying
paragraph (2) for fiscal year 2007 but shall be taken into
account in applying such paragraph for fiscal year 2008 and
subsequent fiscal years.''.
SEC. 3142. MANAGED CARE ORGANIZATION PROVIDER TAX REFORM.
(a) In General.--Section 1903(w)(7)(A)(viii) of the Social Security
Act (42 U.S.C. 1396b(w)(7)(A)(viii)) is amended to read as follows:
``(viii) Services of managed care organizations
(including health maintenance organizations, preferred
provider organizations, and such other similar
organizations as the Secretary may specify by
regulation).''.
(b) Effective Date.--
(1) In general.--Subject to paragraph (2), the amendment
made by subsection (a) shall be effective as of the date of the
enactment of this Act.
(2) Grandfather.--
(A) In general.--Subject to subparagraph (B), in
the case of a State that has had approved as of the
date of the enactment of this Act a provider tax on
services described in section 1903(w)(7)(A)(viii) of
the Social Security Act, as amended by subsection (a),
such amendment shall be effective as of October 1,
2008.
(B) Transition rule for fiscal year 2009.--In the
case of a State described in subparagraph (A), the
amount of any reduction in payment under subsection
(a)(1) of section 1903 of the Social Security Act (42
U.S.C. 1396b) that would otherwise be required under
subsection (w) of such section for calendar quarters in
fiscal year 2009 because of the amendment made by
section (a) shall be reduced by one-half.
SEC. 3143. MEDICAID TRANSFORMATION GRANTS.
(a) In General.--Section 1903 of the Social Security Act (42 U.S.C.
1396b), as amended by section 3123, is amended by adding at the end the
following new subsection:
``(y) Medicaid Transformation Payments.--
``(1) In general.--In addition to the payments provided
under subsection (a), subject to paragraph (4), the Secretary
shall provide for payments to States for the adoption of
innovative methods to improve the effectiveness and efficiency
in providing medical assistance under this title.
``(2) Permissible uses of funds.--The following are
examples of innovative methods for which funds provided under
this subsection may be used:
``(A) Methods for reducing patient error rates
through the implementation and use of electronic health
records, electronic clinical decision support tools, or
e-prescribing programs.
``(B) Methods for improving rates of collection
from estates of amounts owed under this title.
``(C) Methods for reducing waste, fraud, and abuse
under the program under this title, such as reducing
improper payment rates as measured by annual payment
error rate measurement (PERM) project rates.
``(D) Implementation of a medication risk
management program as part of a drug use review program
under section 1927(g).
``(3) Application; terms and conditions.--
``(A) In general.--No payments shall be made to a
State under this subsection unless the State applies to
the Secretary for such payments in a form, manner, and
time specified by the Secretary.
``(B) Terms and conditions.--Such payments are made
under such terms and conditions consistent with this
subsection as the Secretary prescribes.
``(C) Annual report.--Payment to a State under this
subsection is conditioned on the State submitting to
the Secretary an annual report on the programs
supported by such payment. Such report shall include
information on--
``(A) the specific uses of such payment;
``(B) an assessment of quality improvements and
clinical outcomes under such programs; and
``(C) estimates of cost savings resulting from such
programs.
``(4) Funding.--
``(A) Limitation on funds.--The total amount of
payments under this subsection shall be equal to, and
shall not exceed--
``(i) $50,000,000 for fiscal year 2007; and
``(ii) $50,000,000 for fiscal year 2008.
This subsection constitutes budget authority in advance
of appropriations Acts and represents the obligation of
the Secretary to provide for the payment of amounts
provided under this subsection.
``(B) Allocation of funds.--The Secretary shall
specify a method for allocating the funds made
available under this subsection among States. Such
method shall provide preference for States that design
programs that target health providers that treat
significant numbers of medicaid beneficiaries.
``(C) Form and manner of payment.--Payment to a
State under this subsection shall be made in the same
manner as other payments under section 1903(a). There
is no requirement for State matching funds to receive
payments under this subsection.
``(5) Medication risk management program.--
``(A) In general.--For purposes of this subsection,
the term `medication risk management program' means a
program for targeted beneficiaries that ensures that
covered outpatient drugs are appropriately used to
optimize therapeutic outcomes through improved
medication use and to reduce the risk of adverse
events.
``(B) Elements.--Such program may include the
following elements:
``(i) The use of established principles and
standards for drug utilization review and best
practices to analyze prescription drug claims
of targeted beneficiaries and identify outlier
physicians.
``(ii) On an ongoing basis provide outlier
physicians--
``(I) a comprehensive pharmacy
claims history for each targeted
beneficiary under their care;
``(II) information regarding the
frequency and cost of relapses and
hospitalizations of targeted
beneficiaries under the physician's
care; and
``(III) applicable best practice
guidelines and empirical references.
``(iii) Monitor outlier physician's
prescribing, such as failure to refill, dosage
strengths, and provide incentives and
information to encourage the adoption of best
clinical practices.
``(C) Targeted beneficiaries.--For purposes of this
paragraph, the term `targeted beneficiaries' means
medicaid eligible beneficiaries who are identified as
having high prescription drug costs and medical costs,
such as individuals with behavioral disorders or
multiple chronic diseases who are taking multiple
medications.''.
SEC. 3144. ENHANCING THIRD PARTY IDENTIFICATION AND PAYMENT.
(a) Clarification of Third Parties Legally Responsible for Payment
of a Claim for a Health Care Item or Service.--Section 1902(a)(25) of
the Social Security Act (42 U.S.C. 1396a(a)(25)) is amended--
(1) in subparagraph (A), in the matter preceding clause
(i)--
(A) by inserting ``, including self-insured plans''
after ``health insurers''; and
(B) by striking ``and health maintenance
organizations'' and inserting ``health maintenance
organizations, pharmacy benefit managers, or other
parties that are, by statute, contract, or agreement,
legally responsible for payment of a claim for a health
care item or service''; and
(2) in subparagraph (G)--
(A) by inserting ``a self-insured plan,'' after
``1974,''; and
(B) by striking ``and a health maintenance
organization'' and inserting ``a health maintenance
organization, a pharmacy benefit manager, or other
party that is, by statute, contract, or agreement,
legally responsible for payment of a claim for a health
care item or service''.
(b) Requirement for Third Parties to Provide the State With
Coverage Eligibility and Claims Data.--Section 1902(a)(25) of such Act
(42 U.S.C. 1396a(a)(25)) is amended--
(1) in subparagraph (G), by striking ``and'' at the end;
(2) in subparagraph (H), by adding ``and'' after the
semicolon at the end; and
(3) by inserting after subparagraph (H), the following:
``(I) that the State shall provide assurances
satisfactory to the Secretary that the State has in
effect laws requiring health insurers, including self-
insured plans, group health plans (as defined in
section 607(1) of the Employee Retirement Income
Security Act of 1974), service benefit plans, health
maintenance organizations, pharmacy benefit managers,
or other parties that are, by statute, contract, or
agreement, legally responsible for payment of a claim
for a health care item or service, as a condition of
doing business in the State, to--
``(i) provide eligibility and claims
payment data with respect to an individual who
is eligible for, or is provided, medical
assistance under the State plan, upon the
request of the State;
``(ii) accept the subrogation of the State
to any right of an individual or other entity
to payment from the party for an item or
service for which payment has been made under
the State plan;
``(iii) respond to any inquiry by the State
regarding a claim for payment for any health
care item or service submitted not later than 3
years after the date of the provision of such
health care item or service; and
``(iv) agree not to deny a claim submitted
by the State solely on the basis of the date of
submission of the claim;''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section take effect on January 1, 2006.
(2) Delayed effective date.--In the case of a State plan
under title XIX of the Social Security Act which the Secretary
determines requires State legislation in order for the plan to
meet the additional requirements imposed by the amendments made
by this section, the State plan shall not be regarded as
failing to comply with the requirements of such Act solely on
the basis of its failure to meet these additional requirements
before the first day of the first calendar quarter beginning
after the close of the first regular session of the State
legislature that begins after the date of enactment of this
Act. For purposes of the previous sentence, in the case of a
State that has a 2-year legislative session, each year of the
session shall be considered to be a separate regular session of
the State legislature.
SEC. 3145. IMPROVED ENFORCEMENT OF DOCUMENTATION REQUIREMENTS.
(a) In General.--Section 1903 of the Social Security Act (42 U.S.C.
1396b) is amended--
(1) in subsection (i), as amended by section 104 of Public
Law 109-91--
(A) by striking the period at the end of paragraph
(21) and inserting ``; or''; and
(B) by inserting after paragraph (21) the following
new paragraph:
``(22) with respect to amounts expended for medical
assistance for an individual who declares under section
1137(d)(1)(A) to be a citizen or national of the United States
for purposes of establishing eligibility for benefits under
this title, unless the requirement of subsection (z) is met.'';
and
(2) by adding at the end, as amended by sections 3123 and
3143, the following new subsection:
``(z)(1) For purposes of subsection (i)(22), the requirement of
this subsection is, with respect to an individual declaring to be a
citizen or national of the United States, that, subject to paragraph
(2), there is presented satisfactory documentary evidence of
citizenship or nationality (as defined in paragraph (3)) of the
individual.
``(2) The requirement of paragraph (1) shall not apply to an alien
who is eligible for medical assistance under this title--
``(A) and is entitled to or enrolled for benefits under any
part of title XVIII;
``(B) on the basis of receiving supplemental security
income benefits under title XVI; or
``(C) on such other basis as the Secretary may specify
under which satisfactory documentary evidence of citizenship or
nationality had been previously presented.
``(3)(A) For purposes of this subsection, the term `satisfactory
documentary evidence of citizenship or nationality' means--
``(i) any document described in subparagraph (B); or
``(ii) a document described in subparagraph (C) and a
document described in subparagraph (D).
``(B) The following are documents described in this subparagraph:
``(i) A United State passport.
``(ii) Form N-550 or N-570 (Certificate of Naturalization).
``(iii) Form N-560 or N-561 (Certificate of United States
Citizenship).
``(iv) Such other document as the Secretary may specify, by
regulation, that provides proof of United States citizenship or
nationality and that provides a reliable means of documentation
of personal identity.
``(C) The following are documents described in this subparagraph:
``(i) A certificate of birth in the United States.
``(ii) Form FS-545 or Form DS-1350 (Certification of Birth
Abroad).
``(iii) Form I-97 (United States Citizen Identification
Card).
``(iv) Form FS-240 (Report of Birth Abroad of a Citizen of
the United States).
``(v) Such other document (not described in subparagraph
(B)(iv)) as the Secretary may specify that provides proof of
United States citizenship or nationality.
``(D) The following are documents described in this subparagraph:
``(i) Any identity document described in section
274A(b)(1)(D) of the Immigration and Nationality Act.
``(ii) Any other documentation of personal identity of such
other type as the Secretary finds, by regulation, provides a
reliable means of identification.
``(E) A reference in this paragraph to a form includes a reference
to any successor form.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to determinations of initial eligibility for medical assistance
made on or after July 1, 2006, and to redeterminations of eligibility
made on or after such date in the case of individuals for whom the
requirement of section 1903(z) of the Social Security Act, as added by
such amendments, was not previously met.
SEC. 3146. REFORMS OF TARGETED CASE MANAGEMENT.
(a) In General.--Section 1915(g) of the Social Security Act (42
U.S.C. 1396n(g)) is amended by striking paragraph (2) and inserting the
following:
``(2) For purposes of this subsection:
``(A)(i) The term `case management services' means services
which will assist individuals eligible under the plan in
gaining access to needed medical, social, educational, and
other services.
``(ii) Such term includes the following:
``(I) Assessment of an eligible individual to
determine service needs, including activities that
focus on needs identification, to determine the need
for any medical, educational, social, or other
services. Such assessment activities include the
following:
``(aa) Taking client history.
``(bb) Identifying the needs of the
individual, and completing related
documentation.
``(cc) Gathering information from other
sources such as family members, medical
providers, social workers, and educators, if
necessary, to form a complete assessment of the
eligible individual.
``(II) Development of a specific care plan based on
the information collected through an assessment, that
specifies the goals and actions to address the medical,
social, educational, and other services needed by the
eligible individual, including activities such as
ensuring the active participation of the eligible
individual and working with the individual (or the
individual's authorized health care decision maker) and
others to develop such goals and identify a course of
action to respond to the assessed needs of the eligible
individual.
``(III) Referral and related activities to help an
individual obtain needed services, including activities
that help link eligible individuals with medical,
social, educational providers or other programs and
services that are capable of providing needed services,
such as making referrals to providers for needed
services and scheduling appointments for the
individual.
``(IV) Monitoring and follow-up activities,
including activities and contacts that are necessary to
ensure the care plan is effectively implemented and
adequately addressing the needs of the eligible
individual, and which may be with the individual,
family members, providers, or other entities and
conducted as frequently as necessary to help determine
such matters as--
``(aa) whether services are being furnished
in accordance with an individual's care plan;
``(bb) whether the services in the care
plan are adequate; and
``(cc) whether there are changes in the
needs or status of the eligible individual, and
if so, making necessary adjustments in the care
plan and service arrangements with providers.
``(iii) Such term does not include the direct delivery of
an underlying medical, educational, social, or other service to
which an eligible individual has been referred, including, with
respect to the direct delivery of foster care services,
services such as (but not limited to) the following:
``(I) Research gathering and completion of
documentation required by the foster care program.
``(II) Assessing adoption placements.
``(III) Recruiting or interviewing potential foster
care parents.
``(IV) Serving legal papers.
``(V) Home investigations.
``(VI) Providing transportation.
``(VII) Administering foster care subsidies.
``(VIII) Making placement arrangements.
``(B) The term `targeted case management services' means
case management services that are furnished without regard to
the requirements of section 1902(a)(1) and section
1902(a)(10)(B) to specific classes of individuals or to
individuals who reside in specified areas.
``(3) With respect to contacts with individuals who are not
eligible for medical assistance under the State plan or, in the case of
targeted case management services, individuals who are eligible for
such assistance but are not part of the target population specified in
the State plan, such contacts--
``(A) are considered an allowable case management activity,
when the purpose of the contact is directly related to the
management of the eligible individual's care; and
``(B) are not considered an allowable case management
activity if such contacts relate directly to the identification
and management of the noneligible or nontargeted individual's
needs and care.
``(4)(A) In accordance with section 1902(a)(25), Federal financial
participation only is available under this title for case management
services or targeted case management services if there are no other
third parties liable to pay for such services, including as
reimbursement under a medical, social, educational, or other program.
``(B) A State shall allocate the costs of any part of such services
which are reimbursable under another federally funded program in
accordance with OMB Circular A-87 (or any related or successor guidance
or regulations regarding allocation of costs among federally funded
programs) under an approved cost allocation program.''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on January 1, 2006.
SEC. 3147. EMERGENCY SERVICES FURNISHED BY NON-CONTRACT PROVIDERS FOR
MEDICAID MANAGED CARE ENROLLEES.
(a) In General.--Section 1932(b)(2) of the Social Security Act (42
U.S.C. 1396u-2(b)(2)) is amended by adding at the end the following new
subparagraph:
``(D) Emergency services furnished by non-contract
providers.--Any provider of emergency services that
does not have in effect a contract with a medicaid
managed care entity that establishes payment amounts
for services furnished to a beneficiary enrolled in the
entity's medicaid managed care plan must accept as
payment in full the amounts (less any payments for
indirect costs of medical education and direct costs of
graduate medical education) that it could collect if
the beneficiary received medical assistance under this
title other than through enrollment in such an
entity.''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on January 1, 2007.
SEC. 3148. ADJUSTMENT IN COMPUTATION OF MEDICAID FMAP TO DISREGARD AN
EXTRAORDINARY EMPLOYER PENSION CONTRIBUTION.
(a) In General.--Only for purposes of computing the Federal medical
assistance percentage under section 1905(b) of the Social Security Act
(42 U.S.C. 1396d(b)) for a State for a fiscal year (beginning with
fiscal year 2006), any significantly disproportionate employer pension
contribution described in subsection (b) shall be disregarded in
computing the per capita income of such State, but shall not be
disregarded in computing the per capita income for the continental
United States (and Alaska) and Hawaii.
(b) Significantly Disproportionate Employer Pension Contribution.--
For purposes of subsection (a), a significantly disproportionate
employer pension contribution described in this subsection with respect
to a State for a fiscal year is an employer contribution towards
pensions that is allocated to such State for a period if the aggregate
amount so allocated exceeds 50 percent of the total increase in
personal income in that State for the period involved.
Subtitle B--Katrina Health Care Relief
SEC. 3201. TARGETED MEDICAID RELIEF FOR STATES AFFECTED BY HURRICANE
KATRINA.
(a) 100 Percent Federal Matching Payments for Medical Assistance
Provided in Katrina Impacted Areas.--
(1) In general.--Notwithstanding section 1905(b) of the
Social Security Act (42 U.S.C. 1396d(b)), for items and
services furnished during the period that begins on August 28,
2005, and ends on May 15, 2006, the Federal matching rate for
providing medical assistance for such items and services under
a State Medicaid plan to any individual residing in a Katrina
impacted parish or county (as defined in subsection (c)(1)) or
to a Katrina Survivor (as defined in subsection (b)), and for
costs directly attributable to all administrative activities
that relate to the provision of such medical assistance, shall
be 100 percent.
(2) Application to child health assistance.--
Notwithstanding section 2105(b) of the Social Security Act (42
U.S.C. 1397ee(b)), for items and services furnished during the
period described in paragraph (1), the Federal matching rate
for providing child health assistance for such items and
services under a State child health plan under title XXI of
such Act in a Katrina impacted parish or county or to a Katrina
Survivor, and for costs directly attributable to all
administrative activities that relate to the provision of such
child health assistance, shall be 100 percent.
(b) Katrina Survivor.--For purposes of subsection (a), the term
``Katrina Survivor'' means an individual who, on any day during the
week preceding August 28, 2005, had a primary residence in a major
disaster parish or county (as defined in subsection (c)).
(c) Definitions.--For purposes of this section:
(1) Katrina impacted parish or county.--The term ``Katrina
impacted parish or county'' means any parish in the State of
Louisiana, any county in the State of Mississippi, and any
major disaster parish or county in the State of Alabama.
(2) Major disaster parish or county.--A major disaster
parish or county is a parish of the State of Louisiana or a
county of the State of Mississippi or Alabama for which a major
disaster has been declared in accordance with section 401 of
the Robert T. Stafford Disaster Relief and Emergency Assistance
Act (42 U.S.C. 5170) as a result of Hurricane Katrina and which
the President has determined, as of September 14, 2005,
warrants individual assistance from the Federal Government
under such Act.
SEC. 3202. STATE HIGH RISK HEALTH INSURANCE POOL FUNDING.
There are hereby authorized and appropriated $90,000,000 for fiscal
year 2006 for grants under subsection (b)(1) of section 2745 of the
Public Health Service Act (42 U.S.C. 300gg-45). The amount so
appropriated shall be treated as if it had been appropriated under
subsection (c)(2) of such section.
SEC. 3203. RECOMPUTATION OF HPSA, MUA, AND MUP DESIGNATIONS WITHIN
HURRICANE KATRINA AFFECTED AREAS.
(a) In General.--For purposes of the Public Health Service Act (42
U.S.C. 201 et seq.), the Secretary of Health and Human Services shall
conduct a review of all Hurricane Katrina disaster areas and, as
appropriate taking into account the lack of availability of health care
providers and services due to Hurricane Katrina--
(1) shall designate such areas as health professional
shortage areas or medically underserved areas; and
(2) shall designate one of more populations of each such
area as a medically underserved population.
(b) Hurricane Katrina Disaster Area Defined.--For purposes of this
section, the term ``Hurricane Katrina disaster area'' means an area for
which a major disaster has been declared in accordance with section 401
of the Robert T. Stafford Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5170) as a result of Hurricane Katrina and which the
President has determined, before September 14, 2005, warrants
individual and public assistance from the Federal Government under such
Act.
SEC. 3204. WAIVER OF CERTAIN REQUIREMENTS APPLICABLE TO THE PROVISION
OF HEALTH CARE IN AREAS IMPACTED BY HURRICANE KATRINA.
(a) Eligible Area.--
(1) Definition.--In this section, the term ``eligible
area'' means an area identified by the Secretary of Health and
Human Services pursuant to paragraph (2).
(2) Identification.--Not later than 30 days after the date
of the enactment of this Act, the Secretary of Health and Human
Services shall identify areas that--
(A) have been directly impacted by Hurricane
Katrina; or
(B) are located in a State which has absorbed a
significant number of Hurricane Katrina evacuees.
(b) Health Centers.--For the purpose of determining whether an
entity located in an eligible area qualifies as a health center under
section 330 of the Public Health Service Act (42 U.S.C. 254b):
(1) Board composition.--
(A) Waiver.--The Secretary of Health and Human
Services shall waive any requirement that a majority of
the governing board of the entity be consumers of the
entity's health care services.
(B) Rule of construction.--This paragraph shall not
be construed as requiring the Secretary of Health and
Human Services to waive a requirement that the
governing board of the entity include representation of
the consumers of the entity's health care services.
(2) Medically underserved population.--
(A) Determination.--At the request of the entity,
the Secretary of Health and Human Services shall
determine whether, taking into consideration any change
in population associated with Hurricane Katrina, the
entity serves a medically underserved population (as
that term is defined in section 330(b)(3) of the Public
Health Service Act (42 U.S.C. 254b(b)(3))).
(B) Deadline.--The Secretary of Health and Human
Services shall make a determination under subparagraph
(A) not later than 60 days after the date on which the
Secretary receives the request for the determination.
(C) Restriction.--The Secretary of Health and Human
Services shall not make any determination under this
paragraph on whether a population has ceased to qualify
as a medically underserved population under section 330
of the Public Health Service Act (42 U.S.C. 254b).
(3) Required primary health services.--The Secretary of
Health and Human Services shall waive any requirement for the
entity to provide primary health services described in clause
(iii), (iv), or (v) of section 330(b)(1) of the Public Health
Service Act (42 U.S.C. 254b(b)(1)).
(c) National Health Service Corps.--Notwithstanding the provisions
of subpart II of part D of title III of the Public Health Service Act
(42 U.S.C. 254d et seq.) requiring that members of the National Health
Service Corps be assigned to health professional shortage areas, the
Secretary of Health and Human Services may assign members of the
National Health Service Corps to any eligible area.
(d) Termination of Authority.--The authority vested by this section
in the Secretary of Health and Human Services and the Secretary of
Homeland Security shall terminate on the date that is 2 years after
enactment of this Act. The Secretary of Health and Human Services may
not grant any waiver under subsection (b)(1) or (b)(3) and may not make
any assignment of personnel under subsection (c), and the Secretary of
Homeland Security may not allow any agreement under subsection (d), for
a period extending beyond such date.
SEC. 3205. FMAP HOLD HARMLESS FOR KATRINA IMPACT.
Notwithstanding any other provision of law, for purposes of titles
XIX and XXI of the Social Security Act, the Secretary of Health and
Human Services in computing the Federal medical assistance percentage
under section 1905(b) of such (42 U.S.C. 1396d(b)) for any year after
2006 for a State that the Secretary determines has a significant number
of evacuees who were evacuated to, and live in, the State as a result
of Hurricane Katrina as of October 1, 2005, the Secretary shall
disregard such evacuees (and income attributable to such evacuees).
Subtitle C--Katrina and Rita Energy Relief
SEC. 3301. HURRICANES KATRINA AND RITA ENERGY RELIEF.
(a) Findings.--The Congress finds the following:
(1) Hurricanes Katrina and Rita severely disrupted crude
oil and natural gas production in the Gulf of Mexico. The
Energy Information Administration estimates that as a result of
these two hurricanes, the amount of shut in crude oil
production nearly doubled to almost 1,600,000 barrels per day,
and the amount of natural gas production shut in also doubled
to about 8,000,000,000 cubic feet per day. The hurricanes also
initially shut down most of the crude oil refinery capacity in
the Gulf of Mexico region. These disruptions led to
significantly higher prices for crude oil, refined oil
products, and natural gas.
(2) These production and supply disruptions are expected to
lead to significantly higher heating costs for consumers this
winter. The Energy Information Administration projects an
increase in residential natural gas heating expenditures of 32
percent to 61 percent over last winter, with the Midwest seeing
the largest increase. Winter heating oil expenditures are
projected to increase by 30 percent to 41 percent over last
winter, again with the Midwest seeing the largest increase.
Propane expenditures for home heating are projected to increase
20 percent to 36 percent over last winter, with the Midwest
seeing the largest projected increase. Expenditures for home
heating using electricity are expected to increase by 2 percent
to 9 percent over last winter, with the South seeing the
largest increase. Overall, average home heating expenditures
this winter are projected to increase about 33 percent,
assuming a normal winter. These significant increases in home
heating costs this winter will particularly harm low-income
consumers. The Low-Income Home Energy Assistance Program is
designed to assist these low income consumers in this
situation. Accordingly, Congress seeks a one-time only
supplement to the Low-Income Home Energy Assistance Program
fund to assist low income consumers with the additional home
heating expenditures that they will face this winter as a
result of Hurricanes Katrina and Rita.
(b) Relief.--In addition to amounts otherwise made available, there
shall be directly available to the Secretary of Health and Human
Services for a 1-time only obligation and expenditure $1,000,000,000
for fiscal year 2006 for allocation under section 2604(a) through (d)
of the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8623(a)
through (d)), for the sole purpose of providing assistance to offset
the anticipated higher energy costs caused by Hurricane Katrina and
Hurricane Rita.
(c) Sunset.--The provisions of this section shall terminate, be
null and void, and have no force and effect whatsoever after September
30, 2006. No monies provided for under this section shall be available
after such date.
Subtitle D--Digital Television Transition
SEC. 3401. SHORT TITLE.
This subtitle may be cited as the ``Digital Television Transition
Act of 2005''.
SEC. 3402. FINDINGS.
The Congress finds the following:
(1) A loophole in current law is stalling the digital
television (DTV) transition and preventing the return of
spectrum for critical public safety and wireless broadband
uses.
(A) In 1996, to facilitate the DTV transition,
Congress gave each full-power television broadcaster an
extra channel of spectrum to broadcast in digital
format while continuing to broadcast in analog format
on its original channel. Each broadcaster was supposed
to eventually return either the original or additional
channel and broadcast exclusively in digital format on
the remaining channel.
(B) In 1997, Congress earmarked for public safety
use some of the spectrum the broadcasters are supposed
to return. Congress designated the rest of the spectrum
to be auctioned for advanced commercial applications,
such as wireless broadband services. Congress set
December 31, 2006, as the deadline for broadcasters to
return the spectrum for public safety and wireless use.
(C) A loophole, however, allows broadcasters in a
market to delay the return of the spectrum until more
than 85 percent of television households in that market
have at least one television with access to digital
broadcast channels using a digital television receiver,
a digital-to-analog converter box, or cable or
satellite service. Experts forecast it will take many
more years to meet the 85-percent test nationwide.
(2) Eliminating the 85-percent test and setting a ``hard
deadline'' will close the loophole, making possible the
nationwide clearing necessary to complete the DTV transition
and free the spectrum for public safety use.
(A) Some police officers, firefighters, and rescue
personnel already have equipment to communicate over
the spectrum the broadcasters are supposed to return,
and are just awaiting the turnover. Many more public
safety officials cannot purchase equipment or begin
planning without a date certain for the availability of
the spectrum.
(B) Five years to the day before September 11,
2001, an advisory committee report to the Federal
Communications Commission (FCC) noted that public
safety officials desperately needed more spectrum to
better communicate with each other in times of
emergency. The 9/11 Commission has specifically
recognized the importance of clearing for public safety
use the spectrum at issue here, especially following
the terrorist attacks on the Pentagon and the World
Trade Center. The spectrum is also important for
communications during natural disasters.
(3) The certainty of a nationwide hard deadline will enable
consumers, industry, and government to take the necessary steps
to make the transition as smooth as possible.
(A) Under existing law, once a market meets the 85-
percent penetration test, the remaining 15 percent of
households in the market would lose access to broadcast
programming unless they obtain a digital television
receiver, a digital-to-analog converter box, or cable
or satellite service.
(B) Determining when the 85-percent test in current
law has been met in a particular market would be
extremely difficult for the FCC to accomplish.
Moreover, because no one can predict precisely when any
market will meet the 85-percent test, and because
different markets will meet the test at different
times, consumers, industry, and government cannot
adequately plan on a either a local or nationwide
basis.
(C) With a hard deadline, government, industry, and
consumer groups can develop concrete plans for consumer
education. Manufacturers can build large quantities of
low-cost digital-to-analog converter boxes for
consumers who wish to continue using their analog
televisions. Clearing the spectrum on a unified,
nationwide basis will also enable the government to
maximize the revenue from the auction. Some of that
revenue can be used to help make the converter boxes
available.
(D) The deadline will have little impact on most
television households. The vast majority of households
already subscribe to cable or satellite services.
Allowing cable and satellite operators to convert
digital broadcasts into an analog-viewable format will
enable their subscribers that wish to continue using
analog televisions to do so.
(4) Setting a hard deadline will bring consumers and the
economy the benefits of the DTV transition faster.
(A) DTV offers sharper and wider pictures, and CD-
quality sound. Even consumers with analog televisions
connected to a converter box or cable or satellite
service will receive better service than they did
before the transition.
(B) Once the transition is complete, broadcasters
can redirect the resources they currently expend
running both analog and digital stations and focus on
programming that capitalizes on the advanced features
of digital transmissions. Manufacturers can also
increase the production of televisions and other
consumer electronics equipment that takes advantage of
these features, which will also drive down prices.
(C) The cleared spectrum can be used to bring
cutting-edge wireless services to public safety
officials and consumers. This spectrum travels greater
distances at lower costs, and more easily penetrates
buildings and foliage. Consequently, it is ideal to
bring mobile broadband services not only to urban
areas, but to rural areas as well, which currently have
very few cost-effective broadband options.
(D) The increase in DTV programming, services, and
equipment, and the provision of products and services
that use the cleared spectrum, will improve America's
global competitiveness and result in significant
investment and innovation, boosting our economy and
fostering new jobs.
SEC. 3403. ANALOG SPECTRUM RECOVERY: HARD DEADLINE.
(a) Amendments.--Section 309(j)(14) of the Communications Act of
1934 (47 U.S.C. 309(j)(14)) is amended--
(1) in subparagraph (A), by striking ``December 31, 2006''
and inserting ``December 31, 2008'';
(2) by striking subparagraph (B);
(3) in subparagraph (C)(i)(I), by striking ``or (B)'';
(4) in subparagraph (D), by striking ``subparagraph
(C)(i)'' and inserting ``subparagraph (B)(i)''; and
(5) by redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C), respectively.
(b) Implementation.--
(1) DTV allotment table of in-core channels for full-power
stations.--The Federal Communications Commission shall--
(A) release by December 31, 2006, a report and
order in MB Docket No. 03-15 assigning all full-power
broadcast television stations authorized in the digital
television service a channel between channels 2 and 36,
inclusive, or 38 and 51, inclusive (between frequencies
54 and 698 megahertz, inclusive);
(B) release by July 31, 2007, any reconsideration
of such report and order; and
(C) not adopt any further changes between July 31,
2007, and January 1, 2009, to the channels assigned to
full-power broadcast television stations for the
provision of digital television service unless doing so
is necessary for reasons of public safety or necessary
to prevent a delay in the end of broadcasting by full-
power stations in the analog television service.
(2) Status reports.--Beginning with a report on January 31,
2006, and ending with a report on July 31, 2007, the Commission
shall submit reports to the Committee on Energy and Commerce of
the House of Representatives and the Committee on Commerce,
Science, and Transportation of the Senate every six months on
the status of international coordination with Canada and Mexico
of the digital television service table of allotments.
(3) Terminations of analog licenses and broadcasting.--The
Federal Communications Commission shall take such actions as
are necessary to terminate all licenses for full-power
television stations in the analog television service and to
require the cessation of broadcasting by full-power stations in
the analog television service by January 1, 2009.
(4) Additional unlicensed spectrum for wireless
broadband.--The Commission shall, within one year after the
date of enactment of this Act, issue a final order in the
matter of Unlicensed Operation in the TV Broadcast Bands (ET
Docket No. 04-186).
(c) Technical Amendment.--Paragraph (15) of section 309(j) of the
Communications Act of 1934 (47 U.S.C. 309(j)), as added by section
203(b) of the Commercial Spectrum Enhancement Act (P.L. 108-494; 118
Stat. 3993), is redesignated as paragraph (16) of such section.
SEC. 3404. AUCTION OF RECOVERED SPECTRUM.
(a) Deadline for Auction.--Section 309(j)(15)(C) of the
Communications Act of 1934 (47 U.S.C. 309(j)(15)(C)) is amended by
adding at the end the following new clauses:
``(v) Additional deadlines for recovered
analog spectrum.--Notwithstanding subparagraph
(B), the Commission shall conduct the auction
of the licenses for recovered analog spectrum
by commencing the bidding not later than
January 7, 2008, and shall deposit the proceeds
of such auction in accordance with paragraph
(8)(E)(i) not later than June 30, 2008.
``(vi) Recovered analog spectrum.--For
purposes of clause (v), the term `recovered
analog spectrum' means the spectrum between
channels 52 and 69, inclusive (between
frequencies 698 and 806 megahertz, inclusive)
reclaimed from analog television service
broadcasting under paragraph (14), other than--
``(I) the spectrum required by
section 337 to be made available for
public safety services; and
``(II) the spectrum auctioned prior
to the date of enactment of the Digital
Television Transition Act of 2005.''.
(b) Extension of Auction Authority.--Paragraph (11) of section
309(j) of such Act is repealed.
(c) Study of Auction Authority.--
(1) Inquiry and study required.--Within 120 days after the
date of enactment of this Act, the Federal Communications
Commission shall initiate an ongoing inquiry and study--
(A) to evaluate the participation of women,
minorities, and small businesses in the auction
process, including the percentage of winning bidders
that are women, minorities, and small businesses; and
(B) to assess the efforts made by the Commission to
ensure that women, minorities, and small businesses are
able to successfully participate in the auction
process.
(2) Report.--The Commission shall submit a report to the
Congress on the results of the inquiry and study required by
paragraph (1) at least biennially beginning not later than one
year after the date of enactment of this Act.
SEC. 3405. DIGITAL TELEVISION CONVERSION FUND.
(a) Reservation of Auction Proceeds to Assist Conversion.--Section
309(j)(8) of the Communications Act of 1934 (47 U.S.C. 309(j)(8)) is
amended--
(1) in subparagraph (A), by striking ``subparagraph (B) or
subparagraph (D)'' and inserting ``subparagraphs (B), (D), and
(E)'';
(2) in subparagraph (C)(i), by inserting before the
semicolon at the end the following: ``, except as otherwise
provided in subparagraph (E)(i)''; and
(3) by adding at the end the following new subparagraph:
``(E) Transfer of revenues for digital television
conversion.--
``(i) Proceeds for dtv conversion fund.--
Notwithstanding subparagraph (A), of the
proceeds (including deposits and upfront
payments from successful bidders) from the use
of a competitive bidding system under this
subsection with respect to recovered analog
spectrum--
``(I) $990,000,000 shall be
deposited in a separate fund in the
Treasury to be known as the `Digital
Television Conversion Fund', and be
available exclusively to carry out
section 159 of the National
Telecommunications and Information
Administration Organization Act;
``(II) $500,000,000 shall be
deposited in a separate fund in the
Treasury to be known as the `Public
Safety Interoperable Communications
Fund', and be available exclusively to
carry out section 160 of such Act;
``(III) $30,000,000 shall be
deposited in a separate fund in the
Treasury to be known as the `NYC 9/11
Digital Transition Fund', and be
available exclusively to carry out
section 161 of such Act;
``(IV) $3,000,000 shall be
deposited in a separate fund in the
Treasury to be known as the `Low-Power
Digital-to-Analog Conversion Fund', and
be available exclusively to carry out
section 162 of such Act; and
``(V) the remainder of such
proceeds shall be deposited in the
Treasury in accordance with chapter 33
of title 31, United States Code.
``(ii) Recovered analog spectrum.--For
purposes of clause (i), the term `recovered
analog spectrum' has the meaning provided in
paragraph (15)(C)(vi).''.
(b) Converter Box Program.--Part C of the National
Telecommunications and Information Administration Organization Act is
amended by adding at the end the following new section:
``SEC. 159. DIGITAL-TO-ANALOG CONVERTER BOX PROGRAM.
``(a) Creation of Program.--The Assistant Secretary--
``(1) shall use the funds available under subsection (d) of
this section to implement and administer a program through
which households in the United States may obtain, upon request,
up to two coupons that can be applied toward the purchase of
digital-to-analog converter boxes, subject to the restrictions
in this section and the regulations created thereunder; and
``(2) may award one or more contracts (including a contract
with another Federal agency) for the administration of some or
all of the program.
``(b) Program Specifications.--
``(1) Form of coupon request.--The regulations under this
section shall prescribe the contents of the coupon request form
and the information any household seeking a coupon shall
provide on the form. The coupon request form shall be required
to include instructions for its use and also describe, at a
minimum, the requirements and limitations of the program, the
ways in which the form and the information the household
provides will be used, and to whom the form and the information
will be disclosed.
``(2) Distribution of coupon request forms.--
``(A) Paper and electronic forms.--The Assistant
Secretary shall provide for the distribution of paper
coupon request forms at Government buildings, including
post offices. The Assistant Secretary shall provide for
the availability to households of electronic coupon
request forms, and may permit such forms to be
submitted electronically.
``(B) Additional distribution.--If the Assistant
Secretary determines that doing so would make the
program more successful and easier for consumers to
participate in, paper and electronic coupon request
forms shall also be distributed by such private
entities as the Assistant Secretary shall specify (such
as retailers, manufacturers, broadcasters, religious
organizations, and consumer groups) and shall be
distributed in the manner specified by the Assistant
Secretary.
``(3) Limitations.--
``(A) Two-per-household maximum.--A household may
obtain coupons only by making a request as required by
the regulations under this section. Any request must be
made between January 1, 2008, and January 31, 2009,
inclusive. The Assistant Secretary shall ensure that
each requesting household receives no more than two
coupons.
``(B) No combinations of coupons.--Two coupons may
not be used in combination toward the purchase of a
single digital-to-analog converter box.
``(C) Duration.--All coupons shall expire 3 months
after issuance.
``(4) Distribution of coupons.--
``(A) Coupons shall be distributed to requesting
households by mail and each coupon shall be issued in
the name of a member of the requesting household, and
shall include a unique identification number as well as
any other measures the Assistant Secretary deems
necessary to minimize fraud, counterfeiting,
duplication, and other unauthorized use.
``(B) Included on or provided with each coupon
shall be, at a minimum, instructions for the coupon's
use and a description of the coupon's limitations.
``(C) The Assistant Secretary shall expend not more
than $160,000,000 on administrative expenses and shall
ensure that the sum of all administrative expenses for
the program and the total maximum value of all the
coupons redeemed, and issued but not expired, does not
exceed $990,000,000.
``(D) The Assistant Secretary may expend up to
$5,000,000 of the administrative expenses on the public
outreach program required by section 330(d)(4) of the
Communications Act of 1934 (47 U.S.C. 330(d)(4)). Such
funds may be used for grants to the Association of
Public Television Stations, in partnership with
noncommercial educational television broadcast stations
(as defined section 397(6) of the Communications Act of
1934 (47 U.S.C. 397(6))) to carry out such public
outreach.
``(5) Qualifying purchases.--
``(A) Qualifying box.--The regulations shall
specify methods for determining and identifying the
converter boxes that meet the definition in subsection
(g).
``(B) Coupon value.--The value of each coupon shall
be $40.
``(6) Redemption of coupons.--No coupon shall be redeemed
except upon submission of reasonable proof that the individual
redeeming the coupon is the individual named on the coupon, and
such additional information as is required by the regulations
under this section. In the case of retail distribution of
digital-to-analog converter boxes over the Internet or by
telephone, submission of a valid credit card number issued in
the name of the household member, the unique identification
number on the coupon, the address of the household, and such
other information as is required by the regulations under this
section shall be reasonable proof of identity, except that the
redemption of coupons over the Internet or by telephone shall
be prohibited if the Assistant Secretary determines that such
redemption would be unreasonably susceptible to fraud or other
abuse.
``(7) Retailer certification.--
``(A) Any retailer desiring to qualify for coupon
reimbursement under this section shall, in accordance
with the regulations under this section, be required to
undergo a certification process to qualify for
participation in the program.
``(B) As part of the certification process,
retailers shall be informed of the program's details
and their rights and obligations, including their
obligations to honor all valid coupons that are
tendered in the authorized manner, and to keep a
reasonable number of eligible converter boxes in stock.
``(8) Coupon reimbursement and retailer auditing.--
``(A) Reimbursement.--The regulations under this
section shall establish the process by which retailers
may seek and obtain reimbursement for the coupons, and
shall include the option for retailers to seek and
obtain reimbursement electronically.
``(B) Audits.--Such regulations shall establish
procedures for the auditing of retailer reimbursements.
``(9) Appeals.--The regulations under this section shall
establish an appeals process for the review and resolution of
complaints--
``(A) by a household alleging that--
``(i) the household was improperly denied a
coupon;
``(ii) a valid coupon properly tendered was
not honored; or
``(iii) the household was otherwise harmed
by another violation of this section or such
regulations; or
``(B) by a retailer of digital-to-analog converter
boxes alleging that the retailer was improperly denied
reimbursement for a valid coupon properly tendered and
accepted under this section or such regulations.
All such complaints shall be resolved within 30 days after
receipt of the complaint.
``(10) Enforcement.--The regulations under this section
shall provide for the termination of eligibility to participate
in the program for retailers or households that engage in
fraud, misrepresentation, or other misconduct in connection
with the program, or that otherwise violate this section or
such regulations.
``(11) Progress report.--Beginning with a report on March
31, 2008, and ending with a report on June 30, 2009, the
Assistant Secretary shall submit reports to the Committee on
Energy and Commerce of the House of Representatives and the
Committee on Commerce, Science, and Transportation of the
Senate, every three months summarizing the progress of coupon
distribution and redemption, including how many coupons are
being distributed and redeemed, and how quickly.
``(c) Privacy.--The program under this section shall ensure that
personally identifiable information collected in connection with the
program under this section is not used or shared for any other purpose
than as described in this section, except as otherwise required or
authorized by law. For purposes of this subsection, the term
`personally identifiable information' shall have the same meaning as
provided in section 338(i)(2).
``(d) Availability of Funds.--
``(1) In general.--From the Digital Television Conversion
Fund established by section 309(j)(8)(E)(i)(I) of the
Communications Act of 1934, there shall be available to carry
out this section such sums as may be necessary for fiscal years
2008 and 2009. Any sums that remain unexpended in the Fund at
the end of fiscal year 2009 shall revert to and be deposited in
the general fund of the Treasury.
``(2) Credit.--The Assistant Secretary may borrow from the
Treasury such sums as may be necessary not to exceed
$990,000,000 to implement and administer the program in
accordance with this section. The Assistant Secretary shall
reimburse the Treasury, without interest, as funds are
deposited into the Digital Television Conversion Fund under
section 309(j)(8)(E) of such Act.
``(e) Energy Standards Required.--
``(1) Standard.--The maximum energy consumption for the
passive standby mode of a digital-to-analog converter box shall
be no more than 9 watts.
``(2) Enforcement.--The Secretary of Energy shall enforce
the requirements of paragraph (1). Any converter box that the
Secretary of Energy determines is not in compliance with the
requirements of paragraph (1) shall not be eligible for
purchase with assistance made available under this section.
``(3) Preemption.--No State or any political subdivision
thereof may establish or enforce any law, rule, regulation, or
other provision having the force of law that regulates the
energy output, usage, or consumption standards for a digital-
to-analog converter box.
``(f) Implementation.--The Secretary of Commerce shall promulgate,
within 9 months after the date of enactment of the Digital Television
Transition Act of 2005, such regulations as are necessary to carry out
this section.
``(g) Definition.--For purposes of this section:
``(1) Digital-to-analog converter box.--The term `digital-
to-analog converter box' means a stand-alone device that does
not contain features or functions except those necessary to
enable a consumer to convert any channel broadcast in the
digital television service into a format that the consumer can
display on television receivers designed to receive and display
signals only in the analog television service.
``(2) Household.--The term `household' means the residents
at a residential street or rural route address, and shall not
include a post office box.
``(3) Standby passive mode.--The term `standby passive
mode' means a low power state the digital-to-analog converter
device enters while connected to a power source which fulfills
not the main function but can be switched into another mode by
means of an internal or external signal.''.
SEC. 3406. PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS FUND.
Part C of the National Telecommunications and Information
Administration Organization Act is amended by adding after section 159
(as added by section 3405(b) of this Act) the following new section:
``SEC. 160. PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS FUND.
``(a) Program Authorized.--From the funds available under
subsection (f), the Assistant Secretary shall carry out a grant program
to assist public safety agencies in the acquisition of, deployment of,
or training for the use of interoperable communications systems that
utilize, or enable interoperability with communications systems that
can utilize, reallocated public safety spectrum for radio
communications.
``(b) Terms and Conditions of Grants.--In order to obtain a grant
under this section, a public safety agency shall--
``(1) submit an application to the Assistant Secretary at
such time, in such form, and containing or accompanied by such
information and assurances as the Assistant Secretary shall
require;
``(2) agree that, if awarded a grant, the public safety
agency will submit annual reports to the Assistant Secretary
for the duration of the grant award period with respect to--
``(A) the expenditure of grant funds; and
``(B) progress toward acquiring and deploying
interoperable communications systems funded by the
grant;
``(3) agree to provide, from non-Federal sources, not less
than 20 percent of the costs of acquiring and deploying the
interoperable communications systems acquired and deployed with
funds provided under this section; and
``(4) agree to remit to the Assistant Secretary any grant
funds that remain unexpended at the end of the 3-year period of
the grant.
``(c) Duration of Grant; Recovery of Unused Funds.--Grants under
this section shall be awarded in the form of a single grant for a
period of not more that 3 years. At the end of 3 years, any grant funds
that remain unexpended shall be remitted by the grantee to the
Assistant Secretary, and, subject to subsection (f)(2), may be awarded
to other eligible grant recipients. At the end of fiscal year 2010, any
such reawarded grant funds that remain unexpended shall be remitted by
the grantee to the Assistant Secretary and may not be reawarded to
other grantees.
``(d) Oversight of Expenditures.--The Assistant Secretary shall
submit to the Committee on Commerce, Science, and Transportation of the
Senate and the Committee on Energy and Commerce, not later than 6
months after the first award of a grant under this section and every 6
months thereafter until October 1, 2010, a report--
``(1) identifying, on a State-by-State basis, using the
information submitted under subsection (b)(2), the results of
the program, including an identification, on a State-by-State
basis, of--
``(A) the public safety agencies awarded a grant;
``(B) the amount of the grant;
``(C) the specified use for the grant; and
``(D) how each such grant was spent; and
``(2) stating the cumulative total of the amount of grants
awarded, and the balance, if any, remaining in the Public
Safety Interoperable Communications Fund; and
``(3) in the final such report, stating the amount in the
Fund that reverted to the general fund of the Treasury.
``(e) Regulations.--The Secretary is authorized to prescribe such
regulations as are necessary to carry out this section.
``(f) Availability of Funds.--
``(1) Availability.--From the Public Safety Interoperable
Communications Fund established by section 309(j)(8)(E)(i)(II)
of the Communications Act of 1934, there shall be available to
carry out this section such sums as may be necessary for fiscal
years 2008, 2009, and 2010.
``(2) Reversion.--Any sums that remain unexpended in the
Fund at the end of fiscal year 2010 shall revert to and be
deposited in the general fund of the Treasury.
``(g) Definitions.--For purposes of this section:
``(1) Public safety agency.--The term `public safety
agency' means any State or local government entity, or
nongovernmental organization authorized by such entity, whose
sole or principal purpose is to protect the safety of life,
health, or property.
``(2) Interoperable communications systems.--The term
`interoperable communications systems' means communications
systems which enable public safety agencies to share
information amongst local, State, and Federal public safety
agencies in the same area via voice or data signals.
``(3) Reallocated public safety spectrum.--The term
`reallocated public safety spectrum' means the bands of
spectrum located at 764 -776 megahertz and 794-806 megahertz,
inclusive.''.
SEC. 3407. NYC 9/11 DIGITAL TRANSITION FUND.
Part C of the National Telecommunications and Information
Administration Organization Act is amended by adding after section 160
(as added by section 3406 of this Act) the following new section:
``SEC. 161. NYC 9/11 DIGITAL TRANSITION FUND.
``(a) Funds Available.--From the NYC 9/11 Digital Transition Fund
established by section 309(j)(8)(E)(i)(III) of the Communications Act
of 1934, there shall be available to carry out this section such sums
as may be necessary for fiscal years 2006 through 2008. Any sums that
remain unexpended in the Fund at the end of fiscal year 2008 shall
revert to and be deposited in the general fund of the Treasury. The
Assistant Secretary may borrow from the Treasury such sums as may be
necessary not to exceed $30,000,000 to implement and administer the
program in accordance with this section. The Assistant Secretary shall
reimburse the Treasury, without interest, as funds are deposited into
the NYC 9/11 Digital Transition Fund under section 309(j)(8)(E) of such
Act.
``(b) Use of Funds.--The sums available under subsection (a) shall
be made available by the Assistant Secretary by grant to be used to
reimburse the Metropolitan Television Alliance for costs incurred in
the design and deployment of a temporary digital television broadcast
system to ensure that, until a permanent facility atop the Freedom
Tower is constructed, the members of the Metropolitan Television
Alliance can provide the New York City area with an adequate digital
television signal as determined by the Federal Communications
Commission.
``(c) Rule of Construction.--Nothing in this section shall be
construed to alter or otherwise affect the Federal Communications
Commission's authority with respect to licensing and interference
regulation.
``(d) Definitions.--For purposes of this section:
``(1) The term `Metropolitan Television Alliance' means the
organization formed by New York City television broadcast
station licensees to locate new shared facilities as a result
of the attacks on September 11, 2001 and the loss of use of
shared facilities that housed broadcast equipment.
``(2) The term `New York City area' means the five counties
comprising New York City and counties of northern New Jersey in
immediate proximity to New York City (Bergen, Essex, Union and
Hudson Counties) .''.
SEC. 3408. LOW-POWER TELEVISION TRANSITION PROVISIONS.
(a) Removal and Relocation.--Section 337(e) of the Communications
Act of 1934 (47 U.S.C. 337(e)) is amended--
(1) in paragraph (1), by striking ``person who'' and
inserting ``full-power television station licensee that'';
(2) in paragraph (2), by striking ``746 megahertz'' and
inserting ``698 megahertz''; and
(3) by adding at the end the following new paragraph:
``(3) Continuation of low-power broadcasting.--Subject to
section 336(f) of the Communications Act (47 U.S.C. 336(f)), a
low-power television station, television translator station, or
television booster station (as defined by Commission
regulations) may operate above 698 megahertz on a secondary
basis in accordance with Commission rules, including rules
governing completion of the digital television service
transition for low-power broadcasters.''.
(b) Exemption From Deadline.--Section 309(j)(14)(A) of such Act (47
U.S.C. 309(j)(14)(A)) is amended by by inserting ``full-power'' before
``television broadcast license''.
(c) Advanced Television Services.--Section 336(f)(4) of such Act
(47 U.S.C. 336(f)(4)) is amended by inserting ``or other low-power
station'' after ``television translator station'' in the first
sentence.
(d) Low-Power Television Digital-to-Analog Conversion.--Part C of
the National Telecommunications and Information Administration
Organization Act is amended by adding after section 161 (as added by
section 3407 of this Act) the following new section:
``SEC. 162. LOW-POWER TELEVISION DIGITAL-TO-ANALOG CONVERSION.
``(a) Creation of Program.--The Assistant Secretary shall use the
funds available under subsection (d) from the Low-Power Digital-to-
Analog Conversion Fund to implement and administer a program through
which each eligible low-power television station may receive
compensation toward the cost of the purchase of a digital-to-analog
conversion device that enables it to convert the incoming digital
signal of its corresponding full-power television station to analog
format for transmission on the low-power television station's analog
channel. An eligible low-power television station may receive such
compensation only if it submits a request for such compensation on or
before December 31, 2008.
``(b) Eligible Stations.--For purposes of this section, an eligible
low-power television station shall be a low-power television broadcast
station, Class A television station, television translator station, or
television booster station--
``(1) that is itself broadcasting exclusively in analog
format; and
``(2) that has not purchased a digital-to-analog conversion
device prior to enactment of this section.
``(c) Qualifying Devices and Amounts.--The Assistant Secretary--
``(1) may determine the types of digital-to-analog
conversion devices for which an eligible low-power broadcast
television station may receive compensation under this section;
and
``(2) shall determine the maximum amount of compensation
such a low-power television broadcast station may receive based
on the average cost of such digital-to-analog conversion
devices during the time period such low-power broadcast
television station purchased the digital-to-analog conversion
device, but in no case shall such compensation exceed $400.
``(d) Funds Available.--From the Low-Power Digital-to-Analog
Conversion Fund established by section 309(j)(8)(E)(i)(IV) of the
Communications Act of 1934, there shall be available to carry out this
section such sums as may be necessary for fiscal years 2008 and 2009.
Any sums that remain unexpended in such Fund at the end of fiscal year
2009 shall revert to and be deposited in the general fund of the
Treasury.''.
(e) Report and Order Required.--The Federal Communications
Commission shall, not later than December 31, 2008, issue a report and
order specifying the methods and schedule by which the Commission will
complete the digital television service transition for low-power
broadcasters.
SEC. 3409. CONSUMER EDUCATION REGARDING ANALOG TELEVISIONS.
(a) Commission Authority.--Section 303 of the Communications Act of
1934 (47 U.S.C. 303) is amended by adding at the end the following new
subsection:
``(z) Require the consumer education measures specified in section
330(d) in the case of apparatus designed to receive television signals
that--
``(1) are shipped in interstate commerce or manufactured in
the United States;
``(2) have an integrated display screen or are sold in a
bundle with a display screen; and
``(3) are not capable of receiving broadcast signals in the
digital television service.''.
(b) Consumer Education Requirements.--Section 330 of the
Communications Act of 1934 (47 U.S.C. 330) is amended--
(1) in subsection (d), by striking ``sections 303(s),
303(u), and 303(x)'' and inserting ``subsections (s), (u), (x),
and (z) of section 303'';
(2) by redesignating subsection (d) as subsection (e); and
(3) by inserting after subsection (c) the following new
subsection:
``(d) Consumer Education Regarding Analog Television Receivers.--
``(1) Requirements for manufacturers.--Any manufacturer of
any apparatus described in section 303(z) shall--
``(A) place in a conspicuous place on any such
apparatus that such manufacturer ships in interstate
commerce or manufactures in the United States after 180
days after the date of enactment of the Digital
Television Transition Act of 2005, a label containing,
in clear and conspicuous print, the warning language
required by paragraph (3); and
``(B) also include after 180 days after the date of
enactment of the Digital Television Transition Act of
2005, such warning language on the outside of the
retail packaging of such apparatus, in a conspicuous
place and in clear and conspicuous print, in a manner
that cannot be removed.
``(2) Requirements for retail distributors.--Any retail
distributor shall place conspicuously in the vicinity of each
apparatus described in section 303(z) that such distributor
displays for sale or rent after 45 days after the date of
enactment of the Digital Television Transition Act of 2005, a
sign containing, in clear and conspicuous print, the warning
language required by paragraph (3). In the case of a retail
distributor vending such apparatus via direct mail, catalog, or
electronic means, such as displays on the Internet, the warning
language required by such paragraph shall be prominently
displayed, in clear and conspicuous print, in the vicinity of
any language describing the product.
``(3) Warning language.--The warning language required by
this paragraph shall read as follows: `This television has only
an analog broadcast tuner. After December 31, 2008, television
broadcasters will broadcast only in digital format. You will
then need to connect this television to a digital-to-analog
converter box or cable or satellite service if you wish to
receive broadcast programming. The device, if any, that a cable
or satellite subscriber will need to connect to an analog
television will depend on the cable or satellite service
provider. The television should continue to work as before,
however, with devices such as VCRs, digital video recorders,
DVD players, and video game systems. For more information, call
the Federal Communications Commission at 1-888-225-5322 (TTY:
1-888-835-5322) or visit the Commission's website at:
www.fcc.gov.'.
``(4) Commission and ntia outreach.--Beginning within one
month after the date of enactment of the Digital Television
Transition Act of 2005, the Commission and the National
Telecommunications and Information Administration shall engage,
either jointly or separately, in a public outreach program,
including the distribution of materials on their web sites and
in Government buildings, such as post offices, to educate
consumers regarding the digital television transition. The
Commission and the National Telecommunications and Information
Administration may seek public comment in crafting their public
outreach program, and may seek the assistance of private
entities, such as broadcasters, manufacturers, retailers, cable
and satellite operators, and consumer groups in administering
the public outreach program. The program shall educate
consumers about--
``(A) the deadline for termination of analog
television broadcasting;
``(B) the options consumers have after such
termination to continue to receive broadcast
programming; and
``(C) the converter box program under section 159
of the National Telecommunications and Information
Administration Organization Act.
``(5) Additional disclosures.--
``(A) Announcements and notices required.--From
January 1, 2008, through December 31, 2008--
``(i) each television broadcaster shall
air, at a minimum, two 60-second public service
announcements per day, one during the 8 to 9
a.m. hour and one during the 8 to 9 p.m. hour;
and
``(ii) each multichannel video program
distributor (as such term is defined in section
602 of this Act) shall include a notice in any
periodic bill.
``(B) Contents of announcements and notices.--The
announcements and notices required by subparagraphs
(A)(i) and (A)(ii), respectively, shall state, at a
minimum, that: `After December 31, 2008, television
broadcasters will broadcast only in digital format. You
will then no longer be able to receive broadcast
programming on analog-only televisions unless those
televisions are connected to a digital-to-analog
converter box or a cable or satellite service. The
device, if any, that a cable or satellite subscriber
will need to connect to an analog television will
depend on the cable or satellite service provider.
Analog-only televisions should continue to work as
before, however, with devices such as VCRs, digital
video recorders, DVD players, and video game systems.
You may be eligible for up to two coupons toward the
purchase of up to two converter-boxes. For more
information, call the Federal Communications Commission
at 1-888-225-5322 (TTY: 1-888-835-5322) or visit the
Commission's website at: www.fcc.gov.'.
``(6) Report required.--Beginning January 31, 2006, and
ending July 31, 2008, the Commission and the National
Telecommunications and Information Administration, either
jointly or separately, shall submit reports every six months to
the Committee on Energy and Commerce of the House of
Representatives and the Committee on Commerce, Science, and
Transportation of the Senate, on the Commission's and such
Administration's consumer education efforts, as well as the
consumer education efforts of broadcasters, cable and satellite
operators, consumer electronics manufacturers, retailers, and
consumer groups. The Commission and such Administration may
solicit public comment in preparing their reports.''.
(c) Preserving and Expediting Tuner Mandates.--The Federal
Communications Commission--
(1) shall, within 30 days after the date of enactment of
this Act revise the digital television reception capability
implementation schedule under section 15.117(i) of its
regulations (47 CFR 15.117(i)) to require, in the case of
television reception devices that have, or are sold in a bundle
with, display screens sized 13 to 24 inches, inclusive, that
100 percent of all such units must include digital television
tuners effective March 1, 2007; and
(2) shall not make any other changes that extend or
otherwise delay the digital television reception capability
implementation schedule for television reception devices that
have, or are sold in a bundle with, display screens.
SEC. 3410. ADDITIONAL PROVISIONS.
(a) Digital-to-Analog Conversion.--Section 614(b) of the
Communications Act of 1934 (47 U.S.C. 534(b)) is amended by adding at
the end the following new paragraphs:
``(11) Carriage of digital formats.--
``(A) Primary video stream.--With respect to any
television station that is transmitting broadcast
programming exclusively in the digital television
service in a local market, a cable operator of a cable
system in that market shall carry the station's primary
video stream and program-related material in the
digital format transmitted by that station, without
material degradation, if the licensee for that
station--
``(i) relies on this section or section 615
to obtain carriage of the primary video stream
and program-related material on that cable
system in that market; and
``(ii) permits the cable system to carry
without compensation any other programming
broadcast by that station that is carried on
that system.
``(B) Multiple formats permitted.--A cable operator
of a cable system may offer the primary video stream
and program-related material of a local television
station described in subparagraph (A) in any analog or
digital format or formats, whether or not doing so
requires conversion from the format transmitted by the
local television station, so long as--
``(i) the cable operator offers the primary
video stream and program-related material in
the converted analog or digital format or
formats without material degradation; and
``(ii) also offers the primary video stream
and program-related material in the manner or
manners required by this paragraph.
``(C) Transitional conversions.--Notwithstanding
the requirement in subparagraph (A) to carry the
primary video stream and program-related material in
the digital format transmitted by the local television
station, but subject to the prohibition on material
degradation, until January 1, 2014--
``(i) a cable operator--
``(I) shall offer the primary video
stream and program-related material in
the format or formats necessary for
such stream and material to be viewable
on analog and digital televisions; and
``(II) may convert the primary
video stream and program-related
material to standard-definition digital
format in lieu of offering it in the
digital format transmitted by the local
television station;
``(ii) notwithstanding clause (i), a cable
operator of a cable system with an activated
capacity of 550 megahertz or less--
``(I) shall offer the primary video
stream and program-related material of
the local television station described
in subparagraph (A), converted to an
analog format; and
``(II) may, but shall not be
required to, offer the primary video
stream and program-related material in
any digital format or formats.
``(D) Location and method of conversion.--
``(i) A cable operator of a cable system
may perform any conversion permitted or
required by this paragraph at any location,
from the cable head-end to the customer
premises, inclusive.
``(ii) Notwithstanding any other provision
of this Act other than the prohibition on
material degradation, a cable operator may use
switched digital video technology to accomplish
any conversion or transmission permitted or
required by this paragraph.
``(E) Conversions not treated as degradation.--Any
conversion permitted or required by this paragraph
shall not, by itself, be treated as a material
degradation.
``(F) Carriage of program-related material.--The
obligation to carry program-related material under this
paragraph is effective only to the extent technically
feasible.
``(G) Definition of standard-definition format.--
For purposes of this paragraph, a stream shall be in
standard definition digital format if such stream meets
the criteria for such format as specified in the
standard recognized by the Commission in section 73.682
of its rules (47 CFR 73.682) or a successor
regulation.''.
(b) Tiering.--Clause (iii) of section 623(b)(7)(A) of such Act (47
U.S.C. 543(b)(7)(A)(iii)) is amended to read as follows:
``(iii) Both of the following signals:
``(I) the primary video stream and
program-related material of any
television broadcast station that is
provided by the cable operator to any
subscriber in an analog format, and
``(II) the primary video stream and
program-related material--
``(aa) of any television
broadcast station that is
transmitting exclusively in
digital format, and
``(bb) that is provided by
the cable operator to any
subscriber in a digital format,
but excluding a signal that is secondarily
transmitted by a satellite carrier beyond the
local service area of such station.''.
(c) Comparable Treatment of Satellite Carriers.--Section 338 of the
Communications Act of 1934 (47 U.S.C. 338) is amended--
(1) by adding at the end the following new subsection:
``(l) Specific Carriage Obligations After Digital Transition.--
``(1) Carriage of digital formats.--With respect to any
television station that requests carriage under this section
and that is transmitting broadcast programming exclusively in
the digital television service in a local market in the
contiguous United States (hereafter in this paragraph referred
to as an eligible requesting station), a satellite carrier
carrying the digital signal of any other local television
station in that local market shall carry the eligible
requesting station's primary video stream and program-related
material, without material degradation, if the licensee for
that eligible requesting station--
``(A) relies on this section to obtain carriage of
the primary video stream and program-related material
by that satellite carrier in that market; and
``(B) permits the satellite carrier to carry
without compensation any other programming broadcast by
that local station that is carried on that system.
``(2) Formatting of primary video stream.--A satellite
carrier must offer the primary video stream and program-related
material of an eligible requesting station in the digital
format transmitted by the station if the satellite carrier
carries the primary video stream of any other local television
station in that local market in the same digital format.
``(3) Multiple formats permitted.--A satellite carrier may
offer the primary video stream and program-related material of
an eligible requesting station in any analog or digital format
or formats, whether or not doing so requires conversion from
the format transmitted by that eligible requesting station, so
long as--
``(A) the satellite carrier offers the primary
video stream and program-related material in the
converted analog or digital format or formats without
material degradation; and
``(B) also offers the primary video stream and
program-related material in the manner or manners
required by this subsection.
``(4) Transitional conversions.--Notwithstanding any
requirement in paragraphs (1) and (2) to carry the primary
video stream and program-related material in the digital format
transmitted by the local television station, but subject to the
prohibition on material degradation, until January 1, 2014, a
satellite carrier--
``(A) shall offer the primary video stream and
program-related material of any local television
broadcast station required to be carried under
paragraph (1) in the format necessary for such stream
to be viewable on analog and digital televisions; and
``(B) may convert the primary video stream and
program-related material to standard-definition format
in lieu of offering it in the digital format
transmitted by the local television station.
``(5) Location and method of conversion.--A satellite
carrier may perform any conversion permitted or required by
this subsection at any location, from the local receive
facility to the customer premises, inclusive.
``(6) Conversions not treated as degradation.--Any
conversion permitted or required by this subsection shall not,
by itself, be treated as a material degradation.
``(7) Carriage of program-related material.--The obligation
to carry program-related material under this subsection is
effective only to the extent technically feasible.
``(8) Definition of standard-definition format.--For
purposes of this subsection, a stream shall be in standard
definition digital format if such stream meets the criteria for
such format as specified in the standard recognized by the
Commission in section 73.682 of its rules (47 CFR 73.682) or a
successor regulation.'';
(2) in subsection (b)(1), by striking ``subsection (a)''
and inserting ``subsection (a) or (l)'';
(3) in subsection (c)(1), by striking ``subsection (a)(1)''
and inserting ``subsections (a)(1) and (l)''; and
(4) in subsection (c)(2), by striking ``subsection (a)''
and inserting ``subsections (a) and (l)''.
(d) Deadline.--The Federal Communications Commission shall revise
its regulations to implement the amendments made by this section within
one year after the date of enactment of this Act.
SEC. 3411. DEPLOYMENT OF BROADBAND WIRELESS TECHNOLOGIES.
Not later than 45 days after the effective date of this Act, the
Commission shall initiate a rulemaking to assess the necessity of
rechannelizing the spectrum located between 767-773 megahertz and 797-
803 megahertz to accommodate broadband applications. Such rulemaking
shall be completed within 180 days.
SEC. 3412. SENSE OF CONGRESS.
(a) Findings.--The Congress finds the following:
(1) The wireless communications industry in the United
States is becoming increasingly concentrated: there are
currently no ownership limitations on wireless companies, and
the five largest wireless carriers in the United States control
nearly 90 percent of United States wireless subscribership.
(2) Over 90 percent of households receive their broadband
services through either cable or digital subscriber line (DSL)
service, and most cable and DSL providers are heavily
concentrated within their geographic markets.
(3) Under the Omnibus Budget and Reconciliation Act of
1993, Congress tasked the Federal Communications Commission to
promote economic opportunity by disseminating wireless
communications licenses among a wide variety of applicants,
including small businesses and rural telephone companies.
(4) Upcoming auctions for the returned analog broadcast
spectrum in the 700 megahertz band that will be cleared
following the transition from analog to digital broadcast
television and Advanced Wireless Services (AWS) in the 1710-
1755 megahertz and 2110-2155 megahertz bands will likely be the
last reallocation opportunities for commercial wireless
communications services and wireless broadband services in the
foreseeable future.
(5) In the near term, wireless broadband presents the most
promising opportunity to provide a third option (other than
cable modem or DSL service) for broadband Internet access for
most consumers, and the spectrum in the 700 megahertz band is
considered ``beachfront'' property by telecommunications
carriers because wireless signals at this frequency range pass
easily through buildings, trees, and other interference.
(6) The 700 megahertz band offers a historic opportunity to
provide the equivalent of a ``third wire'' into the home - an
alternative to telephone or cable broadband access that will
create new competition and incentives for new entrants,
innovation, and broader service offerings.
(b) Sense of the Congress.--It is the sense of the Congress that
the Federal Communications Commission should disseminate wireless
communications licenses consistent with the findings in subsection (a)
and do so utilizing its existing authority under section 309(j) of the
Communications Act of 1934, which requires the Commission to promote
the following objectives:
(1) the development and rapid deployment of new
technologies, products, and services for the benefit of the
public, including those residing in rural areas, without
administrative or judicial delays;
(2) promoting economic opportunity and competition and
ensuring that new and innovative technologies are readily
accessible to the American people by avoiding excessive
concentration of licenses and by disseminating licenses among a
wide variety of applicants, including small businesses and
rural telephone companies;
(3) recovery for the public of a portion of the value of
the public spectrum resource made available for commercial use
and avoidance of unjust enrichment through the methods employed
to award uses of that resource; and
(4) efficient and intensive use of the electromagnetic
spectrum.
SEC. 3413. BAND PLAN REVISION REQUIRED.
(a) Proceeding Required.--The Federal Communications Commission
shall commence a proceeding no later than June 1, 2006, to reevaluate
the band plan for the auction of the unauctioned portions of the lower
700 megahertz band (currently designated as Blocks A, B, and E).
(b) Reconfiguration Required.--The Federal Communications
Commission shall reconfigure the band plan to license spectrum for
Block B of such portion according to Cellular Market Areas (i.e.,
Metropolitan Statistical Areas (``MSAs'') and Rural Service Areas
(``RSAs'')) to facilitate the offering of competitive wireless services
by regional and smaller wireless carriers.
TITLE IV--COMMITTEE ON FINANCIAL SERVICES
SECTION 4000. TABLE OF CONTENTS.
The table of contents for this title is as follows:
Sec. 4000. Table of contents.
Subtitle A--Deposit Insurance Reform
Sec. 4001. Short title.
Sec. 4002. Merging the BIF and SAIF.
Sec. 4003. Increase in deposit insurance coverage.
Sec. 4004. Setting assessments and repeal of special rules relating to
minimum assessments and free deposit
insurance.
Sec. 4005. Replacement of fixed designated reserve ratio with reserve
range.
Sec. 4006. Requirements applicable to the risk-based assessment system.
Sec. 4007. Refunds, dividends, and credits from Deposit Insurance Fund.
Sec. 4008. Deposit Insurance Fund restoration plans.
Sec. 4009. Regulations required.
Sec. 4010. Studies of FDIC structure and expenses and certain
activities and further possible changes to
deposit insurance system.
Sec. 4011. Bi-annual FDIC survey and report on increasing the deposit
base by encouraging use of depository
institutions by the unbanked.
Sec. 4012. Technical and conforming amendments to the Federal Deposit
Insurance Act relating to the merger of the
BIF and SAIF.
Sec. 4013. Other technical and conforming amendments relating to the
merger of the BIF and SAIF.
Subtitle B--FHA Asset Disposition
Sec. 4101. Short title.
Sec. 4102. Definitions.
Sec. 4103. Appropriated funds requirement for below market sales.
Sec. 4104. Up-front grants.
Subtitle A--Deposit Insurance Reform
SEC. 4001. SHORT TITLE.
This subtitle may be cited as the ``Federal Deposit Insurance
Reform Act of 2005''.
SEC. 4002. MERGING THE BIF AND SAIF.
(a) In General.--
(1) Merger.--The Bank Insurance Fund and the Savings
Association Insurance Fund shall be merged into the Deposit
Insurance Fund.
(2) Disposition of assets and liabilities.--All assets and
liabilities of the Bank Insurance Fund and the Savings
Association Insurance Fund shall be transferred to the Deposit
Insurance Fund.
(3) No separate existence.--The separate existence of the
Bank Insurance Fund and the Savings Association Insurance Fund
shall cease on the effective date of the merger thereof under
this section.
(b) Repeal of Outdated Merger Provision.--Section 2704 of the
Deposit Insurance Funds Act of 1996 (12 U.S.C. 1821 note) is repealed.
(c) Effective Date.--This section shall take effect on the first
day of the first calendar quarter that begins after the end of the 90-
day period beginning on the date of the enactment of this Act.
SEC. 4003. INCREASE IN DEPOSIT INSURANCE COVERAGE.
(a) In General.--Section 11(a)(1) of the Federal Deposit Insurance
Act (12 U.S.C. 1821(a)(1)) is amended--
(1) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) Net amount of insured deposit.--The net
amount due to any depositor at an insured depository
institution shall not exceed the standard maximum
deposit insurance amount as determined in accordance
with subparagraphs (C), (D), (E) and (F) and paragraph
(3).''; and
(2) by adding at the end the following new subparagraphs:
``(E) Standard maximum deposit insurance amount
defined.--For purposes of this Act, the term `standard
maximum deposit insurance amount' means--
``(i) until the effective date of final
regulations prescribed pursuant to section
4009(a)(2) of the Federal Deposit Insurance
Reform Act of 2005, $100,000; and
``(ii) on and after such effective date,
$130,000, adjusted as provided under
subparagraph (F).
``(F) Inflation adjustment.--
``(i) In general.--By April 1 of 2007, and
the 1st day of each subsequent 5-year period,
the Board of Directors and the National Credit
Union Administration Board shall jointly
prescribe the amount by which the standard
maximum deposit insurance amount and the
standard maximum share insurance amount (as
defined in section 207(k) of the Federal Credit
Union Act) applicable to any depositor at an
insured depository institution shall be
increased by calculating the product of--
``(I) $130,000; and
``(II) the ratio of the value of
the Personal Consumption Expenditures
Chain-Type Index (or any successor
index thereto), published by the
Department of Commerce, as of December
31 of the year preceding the year in
which the adjustment is calculated
under this clause, to the value of such
index as of the date this subparagraph
takes effect.
``(ii) Rounding.--If the amount determined
under clause (ii) for any period is not a
multiple of $10,000, the amount so determined
shall be rounded to the nearest $10,000.
``(iii) Publication and report to the
congress.--Not later than April 5 of any
calendar year in which an adjustment is
required to be calculated under clause (i) to
the standard maximum deposit insurance amount
and the standard maximum share insurance amount
under such clause, the Board of Directors and
the National Credit Union Administration Board
shall--
``(I) publish in the Federal
Register the standard maximum deposit
insurance amount, the standard maximum
share insurance amount, and the amount
of coverage under paragraph (3)(A) and
section 207(k)(3) of the Federal Credit
Union Act, as so calculated; and
``(II) jointly submit a report to
the Congress containing the amounts
described in subclause (I).
``(iv) 6-month implementation period.--
Unless an Act of Congress enacted before July 1
of the calendar year in which an adjustment is
required to be calculated under clause (i)
provides otherwise, the increase in the
standard maximum deposit insurance amount and
the standard maximum share insurance amount
shall take effect on January 1 of the year
immediately succeeding such calendar year.''.
(b) Coverage for Certain Employee Benefit Plan Deposits.--Section
11(a)(1)(D) of the Federal Deposit Insurance Act (12 U.S.C.
1821(a)(1)(D)) is amended to read as follows:
``(D) Coverage for certain employee benefit plan
deposits.--
``(i) Pass-through insurance.--The
Corporation shall provide pass-through deposit
insurance for the deposits of any employee
benefit plan.
``(ii) Prohibition on acceptance of benefit
plan deposits.--An insured depository
institution that is not well capitalized or
adequately capitalized may not accept employee
benefit plan deposits.
``(iii) Definitions.--For purposes of this
subparagraph, the following definitions shall
apply:
``(I) Capital standards.--The terms
`well capitalized' and `adequately
capitalized' have the same meanings as
in section 38.
``(II) Employee benefit plan.--The
term `employee benefit plan' has the
same meaning as in paragraph
(8)(B)(ii), and includes any eligible
deferred compensation plan described in
section 457 of the Internal Revenue
Code of 1986.
``(III) Pass-through deposit
insurance.--The term `pass-through
deposit insurance' means, with respect
to an employee benefit plan, deposit
insurance coverage provided on a pro
rata basis to the participants in the
plan, in accordance with the interest
of each participant.''.
(c) Doubling of Deposit Insurance for Certain Retirement
Accounts.--Section 11(a)(3)(A) of the Federal Deposit Insurance Act (12
U.S.C. 1821(a)(3)(A)) is amended by striking ``$100,000'' and inserting
``2 times the standard maximum deposit insurance amount (as determined
under paragraph (1))''.
(d) Increased Insurance Coverage for Municipal Deposits.--Section
11(a)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(2)) is
amended--
(1) in subparagraph (A)--
(A) by moving the margins of clauses (i) through
(v) 4 ems to the right;
(B) by striking, in the matter following clause
(v), ``such depositor shall'' and all that follows
through the period; and
(C) by striking the semicolon at the end of clause
(v) and inserting a period;
(2) by striking ``(2)(A) Notwithstanding'' and all that
follows through ``a depositor who is--'' and inserting the
following:
``(2) Municipal depositors.--
``(A) In general.--Notwithstanding any limitation
in this Act or in any other provision of law relating
to the amount of deposit insurance available to any 1
depositor--
``(i) a municipal depositor shall, for the
purpose of determining the amount of insured
deposits under this subsection, be deemed to be
a depositor separate and distinct from any
other officer, employee, or agent of the United
States or any public unit referred to in
subparagraph (E); and
``(ii) except as provided in subparagraph
(B), the deposits of a municipal depositor
shall be insured in an amount equal to the
standard maximum deposit insurance amount (as
determined under paragraph (1)).
``(B) In-state municipal depositors.--In the case
of the deposits of an in-State municipal depositor
described in clause (ii), (iii), (iv), or (v) of
subparagraph (E) at an insured depository institution,
such deposits shall be insured in an amount not to
exceed the lesser of--
``(i) $2,000,000; or
``(ii) the sum of the standard maximum
deposit insurance amount and 80 percent of the
amount of any deposits in excess of the
standard maximum deposit insurance amount.
``(C) Municipal deposit parity.--No State may deny
to insured depository institutions within its
jurisdiction the authority to accept deposits insured
under this paragraph, or prohibit the making of such
deposits in such institutions by any in-State municipal
depositor.
``(D) In-state municipal depositor defined.--For
purposes of this paragraph, the term `in-State
municipal depositor' means a municipal depositor that
is located in the same State as the office or branch of
the insured depository institution at which the
deposits of that depositor are held.
``(E) Municipal depositor.--In this paragraph, the
term `municipal depositor' means a depositor that is--
'';
(3) by striking ``(B) The'' and inserting the following:
``(F) Authority to limit deposits.--The''; and
(4) by striking ``depositor referred to in subparagraph (A)
of this paragraph'' each place such term appears and inserting
``municipal depositor''.
(e) Technical and Conforming Amendment Relating to Insurance of
Trust Funds.--Paragraphs (1) and (3) of section 7(i) of the Federal
Deposit Insurance Act (12 U.S.C. 1817(i)) are each amended by striking
``$100,000'' and inserting ``the standard maximum deposit insurance
amount (as determined under section 11(a)(1))''.
(f) Other Technical and Conforming Amendments.--
(1) Section 11(m)(6) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(m)(6)) is amended by striking ``$100,000'' and
inserting ``an amount equal to the standard maximum deposit
insurance amount''.
(2) Subsection (a) of section 18 of the Federal Deposit
Insurance Act (12 U.S.C. 1828(a)) is amended to read as
follows:
``(a) Insurance Logo.--
``(1) Insured depository institutions.--
``(A) In general.--Each insured depository
institution shall display at each place of business
maintained by that institution a sign or signs relating
to the insurance of the deposits of the institution, in
accordance with regulations to be prescribed by the
Corporation.
``(B) Statement to be included.--Each sign required
under subparagraph (A) shall include a statement that
insured deposits are backed by the full faith and
credit of the United States Government.
``(2) Regulations.--The Corporation shall prescribe
regulations to carry out this subsection, including regulations
governing the substance of signs required by paragraph (1) and
the manner of display or use of such signs.
``(3) Penalties.--For each day that an insured depository
institution continues to violate this subsection or any
regulation issued under this subsection, it shall be subject to
a penalty of not more than $100, which the Corporation may
recover for its use.''.
(3) Section 43(d) of the Federal Deposit Insurance Act (12
U.S.C. 1831t(d)) is amended by striking ``$100,000'' and
inserting ``an amount equal to the standard maximum deposit
insurance amount''.
(4) Section 6 of the International Banking Act of 1978 (12
U.S.C. 3104) is amended--
(A) by striking ``$100,000'' each place such term
appears and inserting ``an amount equal to the standard
maximum deposit insurance amount''; and
(B) by adding at the end the following new
subsection:
``(e) Standard Maximum Deposit Insurance Amount Defined.--For
purposes of this section, the term `standard maximum deposit insurance
amount' means the amount of the maximum amount of deposit insurance as
determined under section 11(a)(1) of the Federal Deposit Insurance
Act.''.
(g) Conforming Change to Credit Union Share Insurance Fund.--
(1) In general.--Section 207(k) of the Federal Credit Union
Act (12 U.S.C. 1787(k)) is amended--
(A) by striking ``(k)(1)'' and all that follows
through the end of paragraph (1) and inserting the
following:
``(k) Insured Amounts Payable.--
``(1) Net insured amount.--
``(A) In general.--Subject to the provisions of
paragraph (2), the net amount of share insurance
payable to any member at an insured credit union shall
not exceed the total amount of the shares or deposits
in the name of the member (after deducting offsets),
less any part thereof which is in excess of the
standard maximum share insurance amount, as determined
in accordance with this paragraph and paragraphs (5)
and (6), and consistently with actions taken by the
Federal Deposit Insurance Corporation under section
11(a) of the Federal Deposit Insurance Act.
``(B) Aggregation.--Determination of the net amount
of share insurance under subparagraph (A), shall be in
accordance with such regulations as the Board may
prescribe, and, in determining the amount payable to
any member, there shall be added together all accounts
in the credit union maintained by that member for that
member's own benefit, either in the member's own name
or in the names of others.
``(C) Authority to define the extent of coverage.--
The Board may define, with such classifications and
exceptions as it may prescribe, the extent of the share
insurance coverage provided for member accounts,
including member accounts in the name of a minor, in
trust, or in joint tenancy.'';
(B) in paragraph (2)--
(i) in subparagraph (A)--
(I) in clauses (i) through (v), by
moving the margins 4 ems to the right;
(II) in the matter following clause
(v), by striking ``his account'' and
all that follows through the period;
and
(III) by striking the semicolon at
the end of clause (v) and inserting a
period;
(ii) by striking ``(2)(A) Notwithstanding''
and all that follows through ``a depositor or
member who is--'' and inserting the following:
``(2) Municipal depositors or members.--
``(A) In general.--Notwithstanding any limitation
in this Act or in any other provision of law relating
to the amount of insurance available to any 1 depositor
or member, deposits or shares of a municipal depositor
or member shall be insured in an amount equal to the
standard maximum share insurance amount (as determined
under paragraph (5)), except as provided in
subparagraph (B).
``(B) In-state municipal depositors.--In the case
of the deposits of an in-State municipal depositor
described in clause (ii), (iii), (iv), or (v) of
subparagraph (E) at an insured credit union, such
deposits shall be insured in an amount equal to the
lesser of--
``(i) $2,000,000; or
``(ii) the sum of the standard maximum
deposit insurance amount and 80 percent of the
amount of any deposits in excess of the
standard maximum deposit insurance amount.
``(C) Rule of construction.--No provision of this
paragraph shall be construed as authorizing an insured
credit union to accept the deposits of a municipal
depositor in an amount greater than such credit union
is authorized to accept under any other provision of
Federal or State law.
``(D) In-state municipal depositor defined.--For
purposes of this paragraph, the term `in-State
municipal depositor' means a municipal depositor that
is located in the same State as the office or branch of
the insured credit union at which the deposits of that
depositor are held.
``(E) Municipal depositor.--In this paragraph, the
term `municipal depositor' means a depositor that is--
'';
(iii) by striking ``(B) The'' and inserting
the following:
``(F) Authority to limit deposits.--The''; and
(iv) by striking ``depositor or member
referred to in subparagraph (A)'' and inserting
``municipal depositor or member''; and
(C) by adding at the end the following new
paragraphs:
``(4) Coverage for certain employee benefit plan
deposits.--
``(A) Pass-through insurance.--The Administration
shall provide pass-through share insurance for the
deposits or shares of any employee benefit plan.
``(B) Prohibition on acceptance of deposits.--An
insured credit union that is not well capitalized or
adequately capitalized may not accept employee benefit
plan deposits.
``(C) Definitions.--For purposes of this paragraph,
the following definitions shall apply:
``(i) Capital standards.--The terms `well
capitalized' and `adequately capitalized' have
the same meanings as in section 216(c).
``(ii) Employee benefit plan.--The term
`employee benefit plan'--
``(I) has the meaning given to such
term in section 3(3) of the Employee
Retirement Income Security Act of 1974;
``(II) includes any plan described
in section 401(d) of the Internal
Revenue Code of 1986; and
``(III) includes any eligible
deferred compensation plan described in
section 457 of the Internal Revenue
Code of 1986.
``(iii) Pass-through share insurance.--The
term `pass-through share insurance' means, with
respect to an employee benefit plan, insurance
coverage provided on a pro rata basis to the
participants in the plan, in accordance with
the interest of each participant.
``(D) Rule of construction.--No provision of this
paragraph shall be construed as authorizing an insured
credit union to accept the deposits of an employee
benefit plan in an amount greater than such credit
union is authorized to accept under any other provision
of Federal or State law.
``(5) Standard maximum share insurance amount defined.--For
purposes of this Act, the term `standard maximum share
insurance amount' means--
``(A) until the effective date of final regulations
prescribed pursuant to section 4009(a)(2) of the
Federal Deposit Insurance Reform Act of 2005, $100,000;
and
``(B) on and after such effective date, $130,000,
adjusted as provided under section 11(a)(1)(F) of the
Federal Deposit Insurance Act.''.
(2) Doubling of share insurance for certain retirement
accounts.--Section 207(k)(3) of the Federal Credit Union Act
(12 U.S.C. 1787(k)(3)) is amended by striking ``$100,000'' and
inserting ``2 times the standard maximum share insurance amount
(as determined under paragraph (1))''.
(h) Effective Date.--This section and the amendments made by this
section shall take effect on the date the final regulations required
under section 4009(a)(2) take effect.
SEC. 4004. SETTING ASSESSMENTS AND REPEAL OF SPECIAL RULES RELATING TO
MINIMUM ASSESSMENTS AND FREE DEPOSIT INSURANCE.
(a) Setting Assessments.--Section 7(b)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
(1) by striking subparagraphs (A) and (B) and inserting the
following new subparagraphs:
``(A) In general.--The Board of Directors shall set
assessments for insured depository institutions in such
amounts as the Board of Directors may determine to be
necessary or appropriate, subject to subparagraph (D).
``(B) Factors to be considered.--In setting
assessments under subparagraph (A), the Board of
Directors shall consider the following factors:
``(i) The estimated operating expenses of
the Deposit Insurance Fund.
``(ii) The estimated case resolution
expenses and income of the Deposit Insurance
Fund.
``(iii) The projected effects of the
payment of assessments on the capital and
earnings of insured depository institutions.
``(iv) the risk factors and other factors
taken into account pursuant to paragraph (1)
under the risk-based assessment system,
including the requirement under such paragraph
to maintain a risk-based system.
``(v) Any other factors the Board of
Directors may determine to be appropriate.'';
and
(2) by inserting after subparagraph (C) the following new
subparagraph:
``(D) Base rate for assessments.--
``(i) In general.--In setting assessment
rates pursuant to subparagraph (A), the Board
of Directors shall establish a base rate of not
more than 1 basis point (exclusive of any
credit or dividend) for those insured
depository institutions in the lowest-risk
category under the risk-based assessment system
established pursuant to paragraph (1). No
insured depository institution shall be barred
from the lowest-risk category solely because of
size.
``(ii) Suspension.--Clause (i) shall not
apply during any period in which the reserve
ratio of the Deposit Insurance Fund is less
than the amount which is equal to 1.15 percent
of the aggregate estimated insured deposits.''.
(b) Assessment Recordkeeping Period Shortened.--Paragraph (5) of
section 7(b) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b))
is amended to read as follows:
``(5) Depository institution required to maintain
assessment-related records.--Each insured depository
institution shall maintain all records that the Corporation may
require for verifying the correctness of any assessment on the
insured depository institution under this subsection until the
later of--
``(A) the end of the 3-year period beginning on the
due date of the assessment; or
``(B) in the case of a dispute between the insured
depository institution and the Corporation with respect
to such assessment, the date of a final determination
of any such dispute.''.
(c) Increase in Fees for Late Assessment Payments.--Subsection (h)
of section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828(h))
is amended to read as follows:
``(h) Penalty for Failure to Timely Pay Assessments.--
``(1) In general.--Subject to paragraph (3), any insured
depository institution which fails or refuses to pay any
assessment shall be subject to a penalty in an amount not more
than 1 percent of the amount of the assessment due for each day
that such violation continues.
``(2) Exception in case of dispute.--Paragraph (1) shall
not apply if--
``(A) the failure to pay an assessment is due to a
dispute between the insured depository institution and
the Corporation over the amount of such assessment; and
``(B) the insured depository institution deposits
security satisfactory to the Corporation for payment
upon final determination of the issue.
``(3) Special rule for small assessment amounts.--If the
amount of the assessment which an insured depository
institution fails or refuses to pay is less than $10,000 at the
time of such failure or refusal, the amount of any penalty to
which such institution is subject under paragraph (1) shall not
exceed $100 for each day that such violation continues.
``(4) Authority to modify or remit penalty.--The
Corporation, in the sole discretion of the Corporation, may
compromise, modify or remit any penalty which the Corporation
may assess or has already assessed under paragraph (1) upon a
finding that good cause prevented the timely payment of an
assessment.''.
(d) Assessments for Lifeline Accounts.--
(1) In general.--Section 232 of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (12 U.S.C. 1834)
is amended by striking subsection (c).
(2) Clarification of rate applicable to deposits
attributable to lifeline accounts.--Section 7(b)(2)(H) of the
Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(H)) is
amended by striking ``at a rate determined in accordance with
such Act'' and inserting ``at \1/2\ the assessment rate
otherwise applicable for such insured depository institution''.
(3) Regulations.--Section 232(a)(1) of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (12 U.S.C.
1834(a)(1)) is amended by striking ``Board of Governors of the
Federal Reserve System, and the''.
(e) Technical and Conforming Amendments.--
(1) Paragraph (3) of section 7(a) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(a)(3)) is amended by striking the
3d sentence and inserting the following: ``Such reports of
condition shall be the basis for the certified statements to be
filed pursuant to subsection (c).''.
(2) Subparagraphs (B)(ii) and (C) of section 7(b)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1817(b)(1)) are each
amended by striking ``semiannual'' where such term appears in
each such subparagraph.
(3) Section 7(b)(2) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(b)(2)) is amended--
(A) by striking subparagraphs (E), (F), and (G);
(B) in subparagraph (C), by striking
``semiannual''; and
(C) by redesignating subparagraph (H) (as amended
by subsection (e)(2) of this section) as subparagraph
(E).
(4) Section 7(b) of the Federal Deposit Insurance Act (12
U.S.C. 1817(b)) is amended by striking paragraph (4) and
redesignating paragraphs (5) (as amended by subsection (b) of
this section), (6), and (7) as paragraphs (4), (5), and (6)
respectively.
(5) Section 7(c) of the Federal Deposit Insurance Act (12
U.S.C. 1817(c)) is amended--
(A) in paragraph (1)(A), by striking
``semiannual'';
(B) in paragraph (2)(A), by striking
``semiannual''; and
(C) in paragraph (3), by striking ``semiannual
period'' and inserting ``initial assessment period''.
(6) Section 8(p) of the Federal Deposit Insurance Act (12
U.S.C. 1818(p)) is amended by striking ``semiannual''.
(7) Section 8(q) of the Federal Deposit Insurance Act (12
U.S.C. 1818(q)) is amended by striking ``semiannual period''
and inserting ``assessment period''.
(8) Section 13(c)(4)(G)(ii)(II) of the Federal Deposit
Insurance Act (12 U.S.C. 1823(c)(4)(G)(ii)(II)) is amended by
striking ``semiannual period'' and inserting ``assessment
period''.
(9) Section 232(a) of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 1834(a)) is
amended--
(A) in the matter preceding subparagraph (A) of
paragraph (2), by striking ``the Board and'';
(B) in subparagraph (J) of paragraph (2), by
striking ``the Board'' and inserting ``the
Corporation'';
(C) by striking subparagraph (A) of paragraph (3)
and inserting the following new subparagraph:
``(A) Corporation.--The term `Corporation' means
the Federal Deposit Insurance Corporation.''; and
(D) in subparagraph (C) of paragraph (3), by
striking ``Board'' and inserting ``Corporation''.
(f) Effective Date.--This section and the amendments made by this
section shall take effect on the date that the final regulations
required under section 4009(a)(5) take effect.
SEC. 4005. REPLACEMENT OF FIXED DESIGNATED RESERVE RATIO WITH RESERVE
RANGE.
(a) In General.--Section 7(b)(3) of the Federal Deposit Insurance
Act (12 U.S.C. 1817(b)(3)) is amended to read as follows:
``(3) Designated reserve ratio.--
``(A) Establishment.--
``(i) In general.--The Board of Directors
shall designate, by regulation after notice and
opportunity for comment, the reserve ratio
applicable with respect to the Deposit
Insurance Fund.
``(ii) Not less than annual
redetermination.--A determination under clause
(i) shall be made by the Board of Directors at
least before the beginning of each calendar
year, for such calendar year, and at such other
times as the Board of Directors may determine
to be appropriate.
``(B) Range.--The reserve ratio designated by the
Board of Directors for any year--
``(i) may not exceed 1.4 percent of
estimated insured deposits; and
``(ii) may not be less than 1.15 percent of
estimated insured deposits.
``(C) Factors.--In designating a reserve ratio for
any year, the Board of Directors shall--
``(i) take into account the risk of losses
to the Deposit Insurance Fund in such year and
future years, including historic experience and
potential and estimated losses from insured
depository institutions;
``(ii) take into account economic
conditions generally affecting insured
depository institutions so as to allow the
designated reserve ratio to increase during
more favorable economic conditions and to
decrease during less favorable economic
conditions, notwithstanding the increased risks
of loss that may exist during such less
favorable conditions, as determined to be
appropriate by the Board of Directors;
``(iii) seek to prevent sharp swings in the
assessment rates for insured depository
institutions; and
``(iv) take into account such other factors
as the Board of Directors may determine to be
appropriate, consistent with the requirements
of this subparagraph.
``(D) Publication of proposed change in ratio.--In
soliciting comment on any proposed change in the
designated reserve ratio in accordance with
subparagraph (A), the Board of Directors shall include
in the published proposal a thorough analysis of the
data and projections on which the proposal is based.''.
(b) Technical and Conforming Amendment.--Section 3(y) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(y)) is amended--
(1) by striking ``(y) The term'' and inserting(y)
Definitions Relating to Deposit Insurance Fund.--
``(1) Deposit insurance fund.--The term''; and
(2) by inserting after paragraph (1) (as so designated by
paragraph (1) of this subsection) the following new paragraph:
``(2) Designated reserve ratio.--The term `designated
reserve ratio' means the reserve ratio designated by the Board
of Directors in accordance with section 7(b)(3).''.
(c) Effective Date.--This section and the amendments made by this
section shall take effect on the date that the final regulations
required under section 4009(a)(1) take effect.
SEC. 4006. REQUIREMENTS APPLICABLE TO THE RISK-BASED ASSESSMENT SYSTEM.
Section 7(b)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1817(b)(1)) is amended by adding at the end the following new
subparagraphs:
``(E) Information concerning risk of loss and
economic conditions.--
``(i) Sources of information.--For purposes
of determining risk of losses at insured
depository institutions and economic conditions
generally affecting depository institutions,
the Corporation shall collect information, as
appropriate, from all sources the Board of
Directors considers appropriate, such as
reports of condition, inspection reports, and
other information from all Federal banking
agencies, any information available from State
bank supervisors, State insurance and
securities regulators, the Securities and
Exchange Commission (including information
described in section 35), the Secretary of the
Treasury, the Commodity Futures Trading
Commission, the Farm Credit Administration, the
Federal Trade Commission, any Federal reserve
bank or Federal home loan bank, and other
regulators of financial institutions, and any
information available from credit rating
entities, and other private economic or
business analysts.
``(ii) Consultation with federal banking
agencies.--
``(I) In general.--Except as
provided in subclause (II), in
assessing the risk of loss to the
Deposit Insurance Fund with respect to
any insured depository institution, the
Corporation shall consult with the
appropriate Federal banking agency of
such institution.
``(II) Treatment on aggregate
basis.--In the case of insured
depository institutions that are well
capitalized (as defined in section 38)
and, in the most recent examination,
were found to be well managed, the
consultation under subclause (I)
concerning the assessment of the risk
of loss posed by such institutions may
be made on an aggregate basis.
``(iii) Rule of construction.--No provision
of this paragraph shall be construed as
providing any new authority for the Corporation
to require submission of information by insured
depository institutions to the Corporation.
``(F) Modifications to the risk-based assessment
system allowed only after notice and comment.--In
revising or modifying the risk-based assessment system
at any time after the date of the enactment of the
Federal Deposit Insurance Reform Act of 2005, the Board
of Directors may implement such revisions or
modification in final form only after notice and
opportunity for comment.''.
SEC. 4007. REFUNDS, DIVIDENDS, AND CREDITS FROM DEPOSIT INSURANCE FUND.
(a) In General.--Subsection (e) of section 7 of the Federal Deposit
Insurance Act (12 U.S.C. 1817(e)) is amended to read as follows:
``(e) Refunds, Dividends, and Credits.--
``(1) Refunds of overpayments.--In the case of any payment
of an assessment by an insured depository institution in excess
of the amount due to the Corporation, the Corporation may--
``(A) refund the amount of the excess payment to
the insured depository institution; or
``(B) credit such excess amount toward the payment
of subsequent assessments until such credit is
exhausted.
``(2) Dividends from excess amounts in deposit insurance
fund.--
``(A) Reserve ratio in excess of 1.4 percent of
estimated insured deposits.--Whenever the reserve ratio
of the Deposit Insurance Fund exceeds 1.4 percent of
estimated insured deposits, the Corporation shall
declare the amount in the Fund in excess of the amount
required to maintain the reserve ratio at 1.4 percent
of estimated insured deposits, as dividends to be paid
to insured depository institutions.
``(B) Reserve ratio equal to or in excess of 1.35
percent of estimated insured deposits and not more than
1.4 percent.--Whenever the reserve ratio of the Deposit
Insurance Fund equals or exceeds 1.35 percent of
estimated insured deposits and is not more than 1.4
percent of such deposits, the Corporation shall declare
the amount in the Fund that is equal to 50 percent of
the amount in excess of the amount required to maintain
the reserve ratio at 1.35 percent of the estimated
insured deposits as dividends to be paid to insured
depository institutions.
``(C) Basis for distribution of dividends.--
``(i) In general.--Solely for the purposes
of dividend distribution under this paragraph
and credit distribution under paragraph (3)(B),
the Corporation shall determine each insured
depository institution's relative contribution
to the Deposit Insurance Fund (or any
predecessor deposit insurance fund) for
calculating such institution's share of any
dividend or credit declared under this
paragraph or paragraph (3)(B), taking into
account the factors described in clause (ii).
``(ii) Factors for distribution.--In
implementing this paragraph and paragraph
(3)(B) in accordance with regulations, the
Corporation shall take into account the
following factors:
``(I) The ratio of the assessment
base of an insured depository
institution (including any predecessor)
on December 31, 1996, to the assessment
base of all eligible insured depository
institutions on that date.
``(II) The total amount of
assessments paid on or after January 1,
1997, by an insured depository
institution (including any predecessor)
to the Deposit Insurance Fund (and any
predecessor deposit insurance fund).
``(III) That portion of assessments
paid by an insured depository
institution (including any predecessor)
that reflects higher levels of risk
assumed by such institution.
``(IV) Such other factors as the
Corporation may determine to be
appropriate.
``(D) Notice and opportunity for comment.--The
Corporation shall prescribe by regulation, after notice
and opportunity for comment, the method for the
calculation, declaration, and payment of dividends
under this paragraph.
``(3) Credit pool.--
``(A) One-time credit based on total assessment
base at year-end 1996.--
``(i) In general.--Before the end of the
270-day period beginning on the date of the
enactment of the Federal Deposit Insurance
Reform Act of 2005, the Board of Directors
shall, by regulation, provide for a credit to
each eligible insured depository institution,
based on the assessment base of the institution
(including any predecessor institution) on
December 31, 1996, as compared to the combined
aggregate assessment base of all eligible
insured depository institutions, taking into
account such factors as the Board of Directors
may determine to be appropriate.
``(ii) Credit limit.--The aggregate amount
of credits available under clause (i) to all
eligible insured depository institutions shall
equal the amount that the Corporation could
collect if the Corporation imposed an
assessment of 12 basis points on the combined
assessment base of the Bank Insurance Fund and
the Savings Association Insurance Fund as of
December 31, 2001.
``(iii) Eligible insured depository
institution defined.--For purposes of this
paragraph, the term `eligible insured
depository institution' means any insured
depository institution that--
``(I) was in existence on December
31, 1996, and paid a deposit insurance
assessment prior to that date; or
``(II) is a successor to any
insured depository institution
described in subclause (I).
``(iv) Application of credits.--
``(I) In general.--The amount of a
credit to any eligible insured
depository institution under this
paragraph shall be applied by the
Corporation, subject to subsection
(b)(3)(E), to the assessments imposed
on such institution under subsection
(b) that become due for assessment
periods beginning after the effective
date of regulations prescribed under
clause (i).
``(II) Regulations.--The
regulations prescribed under clause (i)
shall establish the qualifications and
procedures governing the application of
assessment credits pursuant to
subclause (I).
``(v) Limitation on amount of credit for
certain depository institutions.--In the case
of an insured depository institution that
exhibits financial, operational, or compliance
weaknesses ranging from moderately severe to
unsatisfactory, or is not adequately
capitalized (as defined in section 38) at the
beginning of an assessment period, the amount
of any credit allowed under this paragraph
against the assessment on that depository
institution for such period may not exceed the
amount calculated by applying to that
depository institution the average assessment
rate on all insured depository institutions for
such assessment period.
``(vi) Predecessor defined.--For purposes
of this paragraph, the term `predecessor', when
used with respect to any insured depository
institution, includes any other insured
depository institution acquired by or merged
with such insured depository institution.
``(B) On-going credit pool.--
``(i) In general.--In addition to the
credit provided pursuant to subparagraph (A)
and subject to the limitation contained in
clause (v) of such subparagraph, the
Corporation shall, by regulation, establish an
on-going system of credits to be applied
against future assessments under subsection
(b)(1) on the same basis as the dividends
provided under paragraph (2)(C).
``(ii) Limitation on credits under certain
circumstances.--No credits may be awarded by
the Corporation under this subparagraph during
any period in which--
``(I) the reserve ratio of the
Deposit Insurance Fund is less than the
designated reserve ratio of such Fund;
or
``(II) the reserve ratio of the
Fund is less than 1.25 percent of the
amount of estimated insured deposits.
``(iii) Criteria for determination.--In
determining the amounts of any assessment
credits under this subparagraph, the Board of
Directors shall take into account the factors
for designating the reserve ratio under
subsection (b)(3) and the factors for setting
assessments under subsection (b)(2)(B).
``(4) Administrative review.--
``(A) In general.--The regulations prescribed under
paragraph (2)(D) and subparagraphs (A) and (B) of
paragraph (3) shall include provisions allowing an
insured depository institution a reasonable opportunity
to challenge administratively the amount of the credit
or dividend determined under paragraph (2) or (3) for
such institution.
``(B) Administrative review.--Any review under
subparagraph (A) of any determination of the
Corporation under paragraph (2) or (3) shall be final
and not subject to judicial review.''.
(b) Definition of Reserve Ratio.--Section 3(y) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(y)) (as amended by section
4005(b) of this subtitle) is amended by adding at the end the following
new paragraph:
``(3) Reserve ratio.--The term `reserve ratio', when used
with regard to the Deposit Insurance Fund other than in
connection with a reference to the designated reserve ratio,
means the ratio of the net worth of the Deposit Insurance Fund
to the value of the aggregate estimated insured deposits.''.
SEC. 4008. DEPOSIT INSURANCE FUND RESTORATION PLANS.
Section 7(b)(3) of the Federal Deposit Insurance Act (12 U.S.C.
1817(b)(3)) (as amended by section 4005(a) of this subtitle) is amended
by adding at the end the following new subparagraph:
``(E) Dif restoration plans.--
``(i) In general.--Whenever--
``(I) the Corporation projects that
the reserve ratio of the Deposit
Insurance Fund will, within 6 months of
such determination, fall below the
minimum amount specified in
subparagraph (B)(ii) for the designated
reserve ratio; or
``(II) the reserve ratio of the
Deposit Insurance Fund actually falls
below the minimum amount specified in
subparagraph (B)(ii) for the designated
reserve ratio without any determination
under subclause (I) having been made,
the Corporation shall establish and implement a
Deposit Insurance Fund restoration plan within
90 days that meets the requirements of clause
(ii) and such other conditions as the
Corporation determines to be appropriate.
``(ii) Requirements of restoration plan.--A
Deposit Insurance Fund restoration plan meets
the requirements of this clause if the plan
provides that the reserve ratio of the Fund
will meet or exceed the minimum amount
specified in subparagraph (B)(ii) for the
designated reserve ratio before the end of the
10-year period beginning upon the
implementation of the plan.
``(iii) Restriction on assessment
credits.--As part of any restoration plan under
this subparagraph, the Corporation may elect to
restrict the application of assessment credits
provided under subsection (e)(3) for any period
that the plan is in effect.
``(iv) Limitation on restriction.--
Notwithstanding clause (iii), while any
restoration plan under this subparagraph is in
effect, the Corporation shall apply credits
provided to an insured depository institution
under subsection (e)(3) against any assessment
imposed on the institution for any assessment
period in an amount equal to the lesser of--
``(I) the amount of the assessment;
or
``(II) the amount equal to 3 basis
points of the institution's assessment
base.
``(v) Transparency.--Not more than 30 days
after the Corporation establishes and
implements a restoration plan under clause (i),
the Corporation shall publish in the Federal
Register a detailed analysis of the factors
considered and the basis for the actions taken
with regard to the plan.''.
SEC. 4009. REGULATIONS REQUIRED.
(a) In General.--Not later than 270 days after the date of the
enactment of this Act, the Board of Directors of the Federal Deposit
Insurance Corporation shall prescribe final regulations, after notice
and opportunity for comment--
(1) designating the reserve ratio for the Deposit Insurance
Fund in accordance with section 7(b)(3) of the Federal Deposit
Insurance Act (as amended by section 4005 of this subtitle);
(2) implementing increases in deposit insurance coverage in
accordance with the amendments made by section 4003 of this
subtitle;
(3) implementing the dividend requirement under section
7(e)(2) of the Federal Deposit Insurance Act (as amended by
section 4007 of this subtitle);
(4) implementing the 1-time assessment credit to certain
insured depository institutions in accordance with section
7(e)(3) of the Federal Deposit Insurance Act, as amended by
section 4007 of this subtitle, including the qualifications and
procedures under which the Corporation would apply assessment
credits; and
(5) providing for assessments under section 7(b) of the
Federal Deposit Insurance Act, as amended by this subtitle.
(b) Rule of Construction.--No provision of this subtitle or any
amendment made by this subtitle shall be construed as affecting the
authority of the Corporation to set or collect deposit insurance
assessments before the effective date of the final regulations
prescribed under subsection (a).
SEC. 4010. STUDIES OF FDIC STRUCTURE AND EXPENSES AND CERTAIN
ACTIVITIES AND FURTHER POSSIBLE CHANGES TO DEPOSIT
INSURANCE SYSTEM.
(a) Study by Comptroller General.--
(1) Study required.--The Comptroller General shall conduct
a study of the following issues:
(A) The efficiency and effectiveness of the
administration of the prompt corrective action program
under section 38 of the Federal Deposit Insurance Act
by the Federal banking agencies (as defined in section
3 of such Act), including the degree of effectiveness
of such agencies in identifying troubled depository
institutions and taking effective action with respect
to such institutions, and the degree of accuracy of the
risk assessments made by the Corporation.
(B) The appropriateness of the organizational
structure of the Federal Deposit Insurance Corporation
for the mission of the Corporation taking into
account--
(i) the current size and complexity of the
business of insured depository institutions (as
such term is defined in section 3 of the
Federal Deposit Insurance Act);
(ii) the extent to which the organizational
structure contributes to or reduces operational
inefficiencies that increase operational costs;
and
(iii) the effectiveness of internal
controls.
(2) Report to the congress.--The Comptroller General shall
submit a report to the Congress before the end of the 1-year
period beginning on the date of the enactment of this Act
containing the findings and conclusions of the Comptroller
General with respect to the study required under paragraph (1)
together with such recommendations for legislative or
administrative action as the Comptroller General may determine
to be appropriate.
(b) Study of Further Possible Changes to Deposit Insurance
System.--
(1) Study required.--The Board of Directors of the Federal
Deposit Insurance Corporation and the National Credit Union
Administration Board shall each conduct a study of the
following:
(A) The feasibility of establishing a voluntary
deposit insurance system for deposits in excess of the
maximum amount of deposit insurance for any depositor
and the potential benefits and the potential adverse
consequences that may result from the establishment of
any such system.
(B) The feasibility of privatizing all deposit
insurance at insured depository institutions and
insured credit unions.
(2) Report.--Before the end of the 1-year period beginning
on the date of the enactment of this Act, the Board of
Directors of the Federal Deposit Insurance Corporation and the
National Credit Union Administration Board shall each submit a
report to the Congress on the study required under paragraph
(1) containing the findings and conclusions of the reporting
agency together with such recommendations for legislative or
administrative changes as the agency may determine to be
appropriate.
(c) Study Regarding Appropriate Deposit Base in Designating Reserve
Ratio.--
(1) Study required.--The Federal Deposit Insurance
Corporation shall conduct a study of the feasibility of using
actual domestic deposits rather than estimated insured deposits
in calculating the reserve ratio of the Deposit Insurance Fund
and designating a reserve ratio for such Fund.
(2) Report.--The Federal Deposit Insurance Corporation
shall submit a report to the Congress before the end of the 1-
year period beginning on the date of the enactment of this Act
containing the findings and conclusions of the Corporation with
respect to the study required under paragraph (1) together with
such recommendations for legislative or administrative action
as the Board of Directors of the Corporation may determine to
be appropriate.
(d) Study of Reserve Methodology and Accounting for Loss.--
(1) Study required.--The Federal Deposit Insurance
Corporation shall conduct a study of the reserve methodology
and loss accounting used by the Corporation during the period
beginning on January 1, 1992, and ending December 31, 2004,
with respect to insured depository institutions in a troubled
condition (as defined in the regulations prescribed pursuant to
section 32(f) of the Federal Deposit Insurance Act). The
Corporation shall obtain comments on the design of the study
from the Comptroller General.
(2) Factors to be included.--In conducting the study
pursuant to paragraph (1), the Federal Deposit Insurance
Corporation shall--
(A) consider the overall effectiveness and accuracy
of the methodology used by the Corporation for
establishing and maintaining reserves and estimating
and accounting for losses at insured depository
institutions, during the period described in such
paragraph;
(B) consider the appropriateness and reliability of
information and criteria used by the Corporation in
determining--
(i) whether an insured depository
institution was in a troubled condition; and
(ii) the amount of any loss anticipated at
such institution;
(C) analyze the actual historical loss experience
over the period described in paragraph (1) and the
causes of the exceptionally high rate of losses
experienced by the Corporation in the final 3 years of
that period; and
(D) rate the efforts of the Corporation to reduce
losses in such 3-year period to minimally acceptable
levels and to historical levels.
(3) Report required.--The Board of Directors of the Federal
Deposit Insurance Corporation shall submit a report to the
Congress before the end of the 6-month period beginning on the
date of the enactment of this Act, containing the findings and
conclusions of the Corporation with respect to the study
required under paragraph (1), together with such
recommendations for legislative or administrative action as the
Board of Directors may determine to be appropriate. Before
submitting the report to Congress, the Board of Directors shall
provide a draft of the report to the Comptroller General for
comment.
SEC. 4011. BI-ANNUAL FDIC SURVEY AND REPORT ON INCREASING THE DEPOSIT
BASE BY ENCOURAGING USE OF DEPOSITORY INSTITUTIONS BY THE
UNBANKED.
The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is
amended by adding at the end the following new section:
``SEC. 49. BI-ANNUAL FDIC SURVEY AND REPORT ON ENCOURAGING USE OF
DEPOSITORY INSTITUTIONS BY THE UNBANKED.
``(a) Survey Required.--
``(1) In general.--The Corporation shall conduct a bi-
annual survey on efforts by insured depository institutions to
bring those individuals and families who have rarely, if ever,
held a checking account, a savings account or other type of
transaction or check cashing account at an insured depository
institution (hereafter in this section referred to as the
`unbanked') into the conventional finance system.
``(2) Factors and questions to consider.--In conducting the
survey, the Corporation shall take the following factors and
questions into account:
``(A) To what extent do insured depository
institutions promote financial education and financial
literacy outreach?
``(B) Which financial education efforts appear to
be the most effective in bringing `unbanked'
individuals and families into the conventional finance
system?
``(C) What efforts are insured institutions making
at converting `unbanked' money order, wire transfer,
and international remittance customers into
conventional account holders?
``(D) What cultural, language and identification
issues as well as transaction costs appear to most
prevent `unbanked' individuals from establishing
conventional accounts?
``(E) What is a fair estimate of the size and worth
of the `unbanked' market in the United States?
``(b) Reports.--The Chairperson of the Board of Directors shall
submit a bi-annual report to the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate containing the Corporation's findings and
conclusions with respect to the survey conducted pursuant to subsection
(a), together with such recommendations for legislative or
administrative action as the Chairperson may determine to be
appropriate.''.
SEC. 4012. TECHNICAL AND CONFORMING AMENDMENTS TO THE FEDERAL DEPOSIT
INSURANCE ACT RELATING TO THE MERGER OF THE BIF AND SAIF.
(a) In General.--The Federal Deposit Insurance Act (12 U.S.C. 1811
et seq.) is amended--
(1) in section 3 (12 U.S.C. 1813)--
(A) by striking subparagraph (B) of subsection
(a)(1) and inserting the following new subparagraph:
``(B) includes any former savings association.'';
and
(B) by striking paragraph (1) of subsection (y) (as
so designated by section 4005(b) of this subtitle) and
inserting the following new paragraph:
``(1) Deposit insurance fund.--The term `Deposit Insurance
Fund' means the Deposit Insurance Fund established under
section 11(a)(4).'';
(2) in section 5(b)(5) (12 U.S.C. 1815(b)(5)), by striking
``the Bank Insurance Fund or the Savings Association Insurance
Fund,'' and inserting ``the Deposit Insurance Fund,'';
(3) in section 5(c)(4), by striking ``deposit insurance
fund'' and inserting ``Deposit Insurance Fund'';
(4) in section 5(d) (12 U.S.C. 1815(d)), by striking
paragraphs (2) and (3) (and any funds resulting from the
application of such paragraph (2) prior to its repeal shall be
deposited into the general fund of the Deposit Insurance Fund);
(5) in section 5(d)(1) (12 U.S.C. 1815(d)(1))--
(A) in subparagraph (A), by striking ``reserve
ratios in the Bank Insurance Fund and the Savings
Association Insurance Fund as required by section 7''
and inserting ``the reserve ratio of the Deposit
Insurance Fund'';
(B) by striking subparagraph (B) and inserting the
following:
``(2) Fee credited to the deposit insurance fund.--The fee
paid by the depository institution under paragraph (1) shall be
credited to the Deposit Insurance Fund.'';
(C) by striking ``(1) uninsured institutions.--'';
and
(D) by redesignating subparagraphs (A) and (C) as
paragraphs (1) and (3), respectively, and moving the
left margins 2 ems to the left;
(6) in section 5(e) (12 U.S.C. 1815(e))--
(A) in paragraph (5)(A), by striking ``Bank
Insurance Fund or the Savings Association Insurance
Fund'' and inserting ``Deposit Insurance Fund'';
(B) by striking paragraph (6); and
(C) by redesignating paragraphs (7), (8), and (9)
as paragraphs (6), (7), and (8), respectively;
(7) in section 6(5) (12 U.S.C. 1816(5)), by striking ``Bank
Insurance Fund or the Savings Association Insurance Fund'' and
inserting ``Deposit Insurance Fund'';
(8) in section 7(b) (12 U.S.C. 1817(b))--
(A) in paragraph (1)(C), by striking ``deposit
insurance fund'' each place that term appears and
inserting ``Deposit Insurance Fund'';
(B) in paragraph (1)(D), by striking ``each deposit
insurance fund'' and inserting ``the Deposit Insurance
Fund''; and
(C) in paragraph (5) (as so redesignated by section
4004(e)(4) of this subtitle)--
(i) by striking ``any such assessment'' and
inserting ``any such assessment is necessary'';
(ii) by striking subparagraph (B);
(iii) in subparagraph (A)--
(I) by striking ``(A) is
necessary--'';
(II) by striking ``Bank Insurance
Fund members'' and inserting ``insured
depository institutions''; and
(III) by redesignating clauses (i),
(ii), and (iii) as subparagraphs (A),
(B), and (C), respectively, and moving
the margins 2 ems to the left; and
(iv) in subparagraph (C) (as so
redesignated)--
(I) by inserting ``that'' before
``the Corporation''; and
(II) by striking ``; and'' and
inserting a period;
(9) in section 7(j)(7)(F) (12 U.S.C. 1817(j)(7)(F)), by
striking ``Bank Insurance Fund or the Savings Association
Insurance Fund'' and inserting ``Deposit Insurance Fund'';
(10) in section 8(t)(2)(C) (12 U.S.C. 1818(t)(2)(C)), by
striking ``deposit insurance fund'' and inserting ``Deposit
Insurance Fund'';
(11) in section 11 (12 U.S.C. 1821)--
(A) by striking ``deposit insurance fund'' each
place that term appears and inserting ``Deposit
Insurance Fund'';
(B) by striking paragraph (4) of subsection (a) and
inserting the following new paragraph:
``(4) Deposit insurance fund.--
``(A) Establishment.--There is established the
Deposit Insurance Fund, which the Corporation shall--
``(i) maintain and administer;
``(ii) use to carry out its insurance
purposes, in the manner provided by this
subsection; and
``(iii) invest in accordance with section
13(a).
``(B) Uses.--The Deposit Insurance Fund shall be
available to the Corporation for use with respect to
insured depository institutions the deposits of which
are insured by the Deposit Insurance Fund.
``(C) Limitation on use.--Notwithstanding any
provision of law other than section 13(c)(4)(G), the
Deposit Insurance Fund shall not be used in any manner
to benefit any shareholder or affiliate (other than an
insured depository institution that receives assistance
in accordance with the provisions of this Act) of--
``(i) any insured depository institution
for which the Corporation has been appointed
conservator or receiver, in connection with any
type of resolution by the Corporation;
``(ii) any other insured depository
institution in default or in danger of default,
in connection with any type of resolution by
the Corporation; or
``(iii) any insured depository institution,
in connection with the provision of assistance
under this section or section 13 with respect
to such institution, except that this clause
shall not prohibit any assistance to any
insured depository institution that is not in
default, or that is not in danger of default,
that is acquiring (as defined in section
13(f)(8)(B)) another insured depository
institution.
``(D) Deposits.--All amounts assessed against
insured depository institutions by the Corporation
shall be deposited into the Deposit Insurance Fund.'';
(C) by striking paragraphs (5), (6), and (7) of
subsection (a); and
(D) by redesignating paragraph (8) of subsection
(a) as paragraph (5);
(12) in section 11(f)(1) (12 U.S.C. 1821(f)(1)), by
striking ``, except that--'' and all that follows through the
end of the paragraph and inserting a period;
(13) in section 11(i)(3) (12 U.S.C. 1821(i)(3))--
(A) by striking subparagraph (B);
(B) by redesignating subparagraph (C) as
subparagraph (B); and
(C) in subparagraph (B) (as so redesignated), by
striking ``subparagraphs (A) and (B)'' and inserting
``subparagraph (A)'';
(14) in section 11(p)(2)(B) (12 U.S.C. 1821(p)(2)(B)), by
striking ``institution, any'' and inserting ``institution,
the'';
(15) in section 11A(a) (12 U.S.C. 1821a(a))--
(A) in paragraph (2), by striking ``liabilities.--
'' and all that follows through ``Except'' and
inserting ``liabilities.--Except'';
(B) by striking paragraph (2)(B); and
(C) in paragraph (3), by striking ``the Bank
Insurance Fund, the Savings Association Insurance
Fund,'' and inserting ``the Deposit Insurance Fund'';
(16) in section 11A(b) (12 U.S.C. 1821a(b)), by striking
paragraph (4);
(17) in section 11A(f) (12 U.S.C. 1821a(f)), by striking
``Savings Association Insurance Fund'' and inserting ``Deposit
Insurance Fund'';
(18) in section 12(f)(4)(E)(iv) (12 U.S.C.
1822(f)(4)(E)(iv)), by striking ``Federal deposit insurance
funds'' and inserting ``the Deposit Insurance Fund (or any
predecessor deposit insurance fund)'';
(19) in section 13 (12 U.S.C. 1823)--
(A) by striking ``deposit insurance fund'' each
place that term appears and inserting ``Deposit
Insurance Fund'';
(B) in subsection (a)(1), by striking ``Bank
Insurance Fund, the Savings Association Insurance
Fund,'' and inserting ``Deposit Insurance Fund'';
(C) in subsection (c)(4)(E)--
(i) in the subparagraph heading, by
striking ``funds'' and inserting ``fund''; and
(ii) in clause (i), by striking ``any
insurance fund'' and inserting ``the Deposit
Insurance Fund'';
(D) in subsection (c)(4)(G)(ii)--
(i) by striking ``appropriate insurance
fund'' and inserting ``Deposit Insurance
Fund'';
(ii) by striking ``the members of the
insurance fund (of which such institution is a
member)'' and inserting ``insured depository
institutions'';
(iii) by striking ``each member's'' and
inserting ``each insured depository
institution's''; and
(iv) by striking ``the member's'' each
place that term appears and inserting ``the
institution's'';
(E) in subsection (c), by striking paragraph (11);
(F) in subsection (h), by striking ``Bank Insurance
Fund'' and inserting ``Deposit Insurance Fund'';
(G) in subsection (k)(4)(B)(i), by striking
``Savings Association Insurance Fund member'' and
inserting ``savings association''; and
(H) in subsection (k)(5)(A), by striking ``Savings
Association Insurance Fund members'' and inserting
``savings associations'';
(20) in section 14(a) (12 U.S.C. 1824(a)), in the 5th
sentence--
(A) by striking ``Bank Insurance Fund or the
Savings Association Insurance Fund'' and inserting
``Deposit Insurance Fund''; and
(B) by striking ``each such fund'' and inserting
``the Deposit Insurance Fund'';
(21) in section 14(b) (12 U.S.C. 1824(b)), by striking
``Bank Insurance Fund or Savings Association Insurance Fund''
and inserting ``Deposit Insurance Fund'';
(22) in section 14(c) (12 U.S.C. 1824(c)), by striking
paragraph (3);
(23) in section 14(d) (12 U.S.C. 1824(d))--
(A) by striking ``Bank Insurance Fund member'' each
place that term appears and inserting ``insured
depository institution'';
(B) by striking ``Bank Insurance Fund members''
each place that term appears and inserting ``insured
depository institutions'';
(C) by striking ``Bank Insurance Fund'' each place
that term appears (other than in connection with a
reference to a term amended by subparagraph (A) or (B)
of this paragraph) and inserting ``Deposit Insurance
Fund'';
(D) by striking the subsection heading and
inserting the following:
``(d) Borrowing for the Deposit Insurance Fund From Insured
Depository Institutions.--'';
(E) in paragraph (3), in the paragraph heading, by
striking ``bif'' and inserting ``the deposit insurance
fund''; and
(F) in paragraph (5), in the paragraph heading, by
striking ``bif members'' and inserting ``insured
depository institutions'';
(24) in section 14 (12 U.S.C. 1824), by adding at the end
the following new subsection:
``(e) Borrowing for the Deposit Insurance Fund From Federal Home
Loan Banks.--
``(1) In general.--The Corporation may borrow from the
Federal home loan banks, with the concurrence of the Federal
Housing Finance Board, such funds as the Corporation considers
necessary for the use of the Deposit Insurance Fund.
``(2) Terms and conditions.--Any loan from any Federal home
loan bank under paragraph (1) to the Deposit Insurance Fund
shall--
``(A) bear a rate of interest of not less than the
current marginal cost of funds to that bank, taking
into account the maturities involved;
``(B) be adequately secured, as determined by the
Federal Housing Finance Board;
``(C) be a direct liability of the Deposit
Insurance Fund; and
``(D) be subject to the limitations of section
15(c).'';
(25) in section 15(c)(5) (12 U.S.C. 1825(c)(5))--
(A) by striking ``the Bank Insurance Fund or
Savings Association Insurance Fund, respectively'' each
place that term appears and inserting ``the Deposit
Insurance Fund''; and
(B) in subparagraph (B), by striking ``the Bank
Insurance Fund or the Savings Association Insurance
Fund, respectively'' and inserting ``the Deposit
Insurance Fund'';
(26) in section 17(a) (12 U.S.C. 1827(a))--
(A) in the subsection heading, by striking ``BIF,
SAIF,'' and inserting ``the Deposit Insurance Fund'';
and
(B) in paragraph (1)--
(i) by striking ``the Bank Insurance Fund,
the Savings Association Insurance Fund,'' each
place that term appears and inserting ``the
Deposit Insurance Fund''; and
(ii) in subparagraph (D), by striking
``each insurance fund'' and inserting ``the
Deposit Insurance Fund'';
(27) in section 17(d) (12 U.S.C. 1827(d)), by striking ``,
the Bank Insurance Fund, the Savings Association Insurance
Fund,'' each place that term appears and inserting ``the
Deposit Insurance Fund'';
(28) in section 18(m)(3) (12 U.S.C. 1828(m)(3))--
(A) by striking ``Savings Association Insurance
Fund'' in the 1st sentence of subparagraph (A) and
inserting ``Deposit Insurance Fund'';
(B) by striking ``Savings Association Insurance
Fund member'' in the last sentence of subparagraph (A)
and inserting ``savings association''; and
(C) by striking ``Savings Association Insurance
Fund or the Bank Insurance Fund'' in subparagraph (C)
and inserting ``Deposit Insurance Fund'';
(29) in section 18(o) (12 U.S.C. 1828(o)), by striking
``deposit insurance funds'' and ``deposit insurance fund'' each
place those terms appear and inserting ``Deposit Insurance
Fund'';
(30) in section 18(p) (12 U.S.C. 1828(p)), by striking
``deposit insurance funds'' and inserting ``Deposit Insurance
Fund'';
(31) in section 24 (12 U.S.C. 1831a)--
(A) in subsections (a)(1) and (d)(1)(A), by
striking ``appropriate deposit insurance fund'' each
place that term appears and inserting ``Deposit
Insurance Fund'';
(B) in subsection (e)(2)(A), by striking ``risk
to'' and all that follows through the period and
inserting ``risk to the Deposit Insurance Fund.''; and
(C) in subsections (e)(2)(B)(ii) and (f)(6)(B), by
striking ``the insurance fund of which such bank is a
member'' each place that term appears and inserting
``the Deposit Insurance Fund'';
(32) in section 28 (12 U.S.C. 1831e), by striking
``affected deposit insurance fund'' each place that term
appears and inserting ``Deposit Insurance Fund'';
(33) by striking section 31 (12 U.S.C. 1831h);
(34) in section 36(i)(3) (12 U.S.C. 1831m(i)(3)), by
striking ``affected deposit insurance fund'' and inserting
``Deposit Insurance Fund'';
(35) in section 37(a)(1)(C) (12 U.S.C. 1831n(a)(1)(C)), by
striking ``insurance funds'' and inserting ``Deposit Insurance
Fund'';
(36) in section 38 (12 U.S.C. 1831o), by striking ``the
deposit insurance fund'' each place that term appears and
inserting ``the Deposit Insurance Fund'';
(37) in section 38(a) (12 U.S.C. 1831o(a)), in the
subsection heading, by striking ``Funds'' and inserting
``Fund'';
(38) in section 38(k) (12 U.S.C. 1831o(k))--
(A) in paragraph (1), by striking ``a deposit
insurance fund'' and inserting ``the Deposit Insurance
Fund'';
(B) in paragraph (2), by striking ``A deposit
insurance fund'' and inserting ``The Deposit Insurance
Fund''; and
(C) in paragraphs (2)(A) and (3)(B), by striking
``the deposit insurance fund's outlays'' each place
that term appears and inserting ``the outlays of the
Deposit Insurance Fund''; and
(39) in section 38(o) (12 U.S.C. 1831o(o))--
(A) by striking ``associations.--'' and all that
follows through ``Subsections (e)(2)'' and inserting
``associations.--Subsections (e)(2)'';
(B) by redesignating subparagraphs (A), (B), and
(C) as paragraphs (1), (2), and (3), respectively, and
moving the margins 2 ems to the left; and
(C) in paragraph (1) (as so redesignated), by
redesignating clauses (i) and (ii) as subparagraphs (A)
and (B), respectively, and moving the margins 2 ems to
the left.
(b) Effective Date.--This section and the amendments made by this
section shall take effect on the first day of the first calendar
quarter that begins after the end of the 90-day period beginning on the
date of the enactment of this Act.
SEC. 4013. OTHER TECHNICAL AND CONFORMING AMENDMENTS RELATING TO THE
MERGER OF THE BIF AND SAIF.
(a) Section 5136 of the Revised Statutes.--The paragraph designated
the ``Eleventh'' of section 5136 of the Revised Statutes of the United
States (12 U.S.C. 24) is amended in the 5th sentence, by striking
``affected deposit insurance fund'' and inserting ``Deposit Insurance
Fund''.
(b) Investments Promoting Public Welfare; Limitations on Aggregate
Investments.--The 23d undesignated paragraph of section 9 of the
Federal Reserve Act (12 U.S.C. 338a) is amended in the 4th sentence, by
striking ``affected deposit insurance fund'' and inserting ``Deposit
Insurance Fund''.
(c) Advances to Critically Undercapitalized Depository
Institutions.--Section 10B(b)(3)(A)(ii) of the Federal Reserve Act (12
U.S.C. 347b(b)(3)(A)(ii)) is amended by striking ``any deposit
insurance fund in'' and inserting ``the Deposit Insurance Fund of''.
(d) Amendments to the Balanced Budget and Emergency Deficit Control
Act of 1985.--Section 255(g)(1)(A) of the Balanced Budget and Emergency
Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is amended--
(1) by striking ``Bank Insurance Fund'' and inserting
``Deposit Insurance Fund''; and
(2) by striking ``Federal Deposit Insurance Corporation,
Savings Association Insurance Fund (51-4066-0-3-373);''.
(e) Amendments to the Federal Home Loan Bank Act.--The Federal Home
Loan Bank Act (12 U.S.C. 1421 et seq.) is amended--
(1) in section 11(k) (12 U.S.C. 1431(k))--
(A) in the subsection heading, by striking ``SAIF''
and inserting ``the Deposit Insurance Fund''; and
(B) by striking ``Savings Association Insurance
Fund'' each place such term appears and inserting
``Deposit Insurance Fund'';
(2) in section 21 (12 U.S.C. 1441)--
(A) in subsection (f)(2), by striking ``, except
that'' and all that follows through the end of the
paragraph and inserting a period; and
(B) in subsection (k), by striking paragraph (4);
(3) in section 21A(b)(4)(B) (12 U.S.C. 1441a(b)(4)(B)), by
striking ``affected deposit insurance fund'' and inserting
``Deposit Insurance Fund'';
(4) in section 21A(b)(6)(B) (12 U.S.C. 1441a(b)(6)(B))--
(A) in the subparagraph heading, by striking
``Saif-insured banks'' and inserting ``Charter
conversions''; and
(B) by striking ``Savings Association Insurance
Fund member'' and inserting ``savings association'';
(5) in section 21A(b)(10)(A)(iv)(II) (12 U.S.C.
1441a(b)(10)(A)(iv)(II)), by striking ``Savings Association
Insurance Fund'' and inserting ``Deposit Insurance Fund'';
(6) in section 21A(n)(6)(E)(iv) (12 U.S.C.
1441(n)(6)(E)(iv)), by striking ``Federal deposit insurance
funds'' and inserting ``the Deposit Insurance Fund'';
(7) in section 21B(e) (12 U.S.C. 1441b(e))--
(A) in paragraph (5), by inserting ``as of the date
of funding'' after ``Savings Association Insurance Fund
members'' each place that term appears; and
(B) by striking paragraphs (7) and (8); and
(8) in section 21B(k) (12 U.S.C. 1441b(k))--
(A) by inserting before the colon ``, the following
definitions shall apply'';
(B) by striking paragraph (8); and
(C) by redesignating paragraphs (9) and (10) as
paragraphs (8) and (9), respectively.
(f) Amendments to the Home Owners' Loan Act.--The Home Owners' Loan
Act (12 U.S.C. 1461 et seq.) is amended--
(1) in section 5 (12 U.S.C. 1464)--
(A) in subsection (c)(5)(A), by striking ``that is
a member of the Bank Insurance Fund'';
(B) in subsection (c)(6), by striking ``As used in
this subsection--'' and inserting ``For purposes of
this subsection, the following definitions shall
apply:'';
(C) in subsection (o)(1), by striking ``that is a
Bank Insurance Fund member'';
(D) in subsection (o)(2)(A), by striking ``a Bank
Insurance Fund member until such time as it changes its
status to a Savings Association Insurance Fund member''
and inserting ``insured by the Deposit Insurance
Fund'';
(E) in subsection (t)(5)(D)(iii)(II), by striking
``affected deposit insurance fund'' and inserting
``Deposit Insurance Fund'';
(F) in subsection (t)(7)(C)(i)(I), by striking
``affected deposit insurance fund'' and inserting
``Deposit Insurance Fund''; and
(G) in subsection (v)(2)(A)(i), by striking ``the
Savings Association Insurance Fund'' and inserting ``or
the Deposit Insurance Fund''; and
(2) in section 10 (12 U.S.C. 1467a)--
(A) in subsection (c)(6)(D), by striking ``this
title'' and inserting ``this Act'';
(B) in subsection (e)(1)(B), by striking ``Savings
Association Insurance Fund or Bank Insurance Fund'' and
inserting ``Deposit Insurance Fund'';
(C) in subsection (e)(2), by striking ``Savings
Association Insurance Fund or the Bank Insurance Fund''
and inserting ``Deposit Insurance Fund'';
(D) in subsection (e)(4)(B), by striking
``subsection (1)'' and inserting ``subsection (l)'';
(E) in subsection (g)(3)(A), by striking ``(5) of
this section'' and inserting ``(5) of this
subsection'';
(F) in subsection (i), by redesignating paragraph
(5) as paragraph (4);
(G) in subsection (m)(3), by striking subparagraph
(E) and by redesignating subparagraphs (F), (G), and
(H) as subparagraphs (E), (F), and (G), respectively;
(H) in subsection (m)(7)(A), by striking ``during
period'' and inserting ``during the period''; and
(I) in subsection (o)(3)(D), by striking ``sections
5(s) and (t) of this Act'' and inserting ``subsections
(s) and (t) of section 5''.
(g) Amendments to the National Housing Act.--The National Housing
Act (12 U.S.C. 1701 et seq.) is amended--
(1) in section 317(b)(1)(B) (12 U.S.C. 1723i(b)(1)(B)), by
striking ``Bank Insurance Fund for banks or through the Savings
Association Insurance Fund for savings associations'' and
inserting ``Deposit Insurance Fund''; and
(2) in section 536(b)(1)(B)(ii) (12 U.S.C. 1735f-
14(b)(1)(B)(ii)), by striking ``Bank Insurance Fund for banks
and through the Savings Association Insurance Fund for savings
associations'' and inserting ``Deposit Insurance Fund''.
(h) Amendments to the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.--The Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 1811 note) is amended--
(1) in section 951(b)(3)(B) (12 U.S.C. 1833a(b)(3)(B)), by
inserting ``and after the merger of such funds, the Deposit
Insurance Fund,'' after ``the Savings Association Insurance
Fund,''; and
(2) in section 1112(c)(1)(B) (12 U.S.C. 3341(c)(1)(B)), by
striking ``Bank Insurance Fund, the Savings Association
Insurance Fund,'' and inserting ``Deposit Insurance Fund''.
(i) Amendment to the Bank Holding Company Act of 1956.--The Bank
Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended--
(1) in section 2(j)(2) (12 U.S.C. 1841(j)(2)), by striking
``Savings Association Insurance Fund'' and inserting ``Deposit
Insurance Fund''; and
(2) in section 3(d)(1)(D)(iii) (12 U.S.C.
1842(d)(1)(D)(iii)), by striking ``appropriate deposit
insurance fund'' and inserting ``Deposit Insurance Fund''.
(j) Amendments to the Gramm-Leach-Bliley Act.--Section 114 of the
Gramm-Leach-Bliley Act (12 U.S.C. 1828a) is amended by striking ``any
Federal deposit insurance fund'' in subsection (a)(1)(B), paragraphs
(2)(B) and (4)(B) of subsection (b), and subsection (c)(1)(B), each
place that term appears and inserting ``the Deposit Insurance Fund''.
(k) Effective Date.--This section and the amendments made by this
section shall take effect on the first day of the first calendar
quarter that begins after the end of the 90-day period beginning on the
date of the enactment of this Act.
Subtitle B--FHA Asset Disposition
SEC. 4101. SHORT TITLE.
This subtitle may be cited as the ``FHA Asset Disposition Act of
2005''.
SEC. 4102. DEFINITIONS.
For purposes of this subtitle, the following definitions shall
apply:
(1) The term ``affordability requirements'' means any
requirements or restrictions imposed by the Secretary, at the
time of sale, on a multifamily real property or a multifamily
loan, such as use restrictions, rent restrictions, and
rehabilitation requirements.
(2) The term ``discount sale'' means the sale of a
multifamily real property in a transaction, such as a
negotiated sale, in which the sale price is lower than the
property market value and is set outside of a competitive
bidding process that has no affordability requirements.
(3) The term ``discount loan sale'' means the sale of a
multifamily loan in a transaction, such as a negotiated sale,
in which the sale price is lower than the loan market value and
is set outside of a competitive bidding process that has no
affordability requirements.
(4) The term ``loan market value'' means the value of a
multifamily loan, without taking into account any affordability
requirements.
(5) The term ``multifamily real property'' means any rental
or cooperative housing project of 5 or more units owned by the
Secretary that prior to acquisition by the Secretary was
security for a loan or loans insured under title II of the
National Housing Act.
(6) The term ``multifamily loan'' means a loan held by the
Secretary and secured by a multifamily rental or cooperative
housing project of 5 or more units that was formerly insured
under title II of the National Housing Act.
(7) The term ``property market value'' means the value of a
multifamily real property for its current use, without taking
into account any affordability requirements.
(8) The term ``Secretary'' means the Secretary of Housing
and Urban Development.
SEC. 4103. APPROPRIATED FUNDS REQUIREMENT FOR BELOW MARKET SALES.
(a) Discount Sales.--Notwithstanding any other provision of law,
except for affordability requirements for the elderly and disabled
required by statute, disposition by the Secretary of a multifamily real
property during fiscal years 2006 through 2010 through a discount sale
under sections 207(l) or 246 of the National Housing Act (12 U.S.C.
1713(l), 1715z-11), section 203 of the Housing and Community
Development Amendments of 1978 (12 U.S.C. 1701z-11), or section 204 of
the Departments of Veterans Affairs and Housing and Urban Development,
and Independent Agencies Appropriations Act, 1997 (12 U.S.C. 1715z-
11a), shall be subject to the availability of appropriations to the
extent that the property value exceeds the sale proceeds. If the
multifamily real property is sold, during such fiscal years, for an
amount equal to or greater than the property market value then the
transaction is not subject to the availability of appropriations.
(b) Discount Loan Sales.--Notwithstanding any other provision of
law and in accordance with the Federal Credit Reform Act of 1990 (2
U.S.C. 661 et seq.), a discount loan sale during fiscal years 2006
through 2010 under section 207(k) of the National Housing Act (12
U.S.C. 1713(k)), section 203(k) of the Housing and Community
Development Amendments of 1978 (12 U.S.C. 1701z-11(k)), or section
204(a) of the Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 1997 (12
U.S.C. 1715z-11a(a)), shall be subject to the availability of
appropriations to the extent that the loan value exceeds the sale
proceeds. If the multifamily loan is sold, during such fiscal years,
for an amount equal to or greater than the loan market value then the
transaction is not subject to the availability of appropriations.
(c) Applicability.--This section shall not apply to any transaction
that formally commences within one year prior to the enactment of this
section.
SEC. 4104. UP-FRONT GRANTS.
(a) 1997 Act.--Section 204(a) of the Departments of Veterans
Affairs and Housing And Urban Development, and Independent Agencies
Appropriations Act, 1997 (12 U.S.C. 1715z-11a(a))) is amended by adding
at the end the following new sentence: ``A grant provided under this
subsection during fiscal years 2006 through 2010 shall be available
only to the extent that appropriations are made in advance for such
purposes and shall not be derived from the General Insurance Fund.''.
(b) 1978 Act.--Section 203(f)(4) of the Housing and Community
Development Amendments of 1978 (12 USC 1701z-11(f)(4)) is amended by
adding at the end the following new sentence: ``This paragraph shall be
effective during fiscal years 2006 through 2010 only to the extent that
such budget authority is made available for use under this paragraph in
advance in appropriation Acts.''.
(c) Applicability.--The amendments made by this section shall not
apply to any transaction that formally commences within one year prior
to the enactment of this section.
TITLE V--COMMITTEE ON JUDICIARY
SEC. 5001. TABLE OF CONTENTS.
TITLE V--COMMITTEE ON JUDICIARY
Sec. 5001. Table of contents.
Subtitle A--Visa Fees
Sec. 5101. Fees with respect to immigration services for intracompany
transferees.
Subtitle B--Circuit and District Judgeships
Sec. 5201. Short title.
Sec. 5202. Circuit judges for the circuit courts of appeals.
Sec. 5203. District judges for the district courts.
Sec. 5204. Establishment of Article III court in the Virgin Islands.
Sec. 5205. Effective date.
Subtitle C--Bankruptcy Judgeships
Sec. 5301. Short title.
Sec. 5302. Authorization for additional bankruptcy judgeships.
Sec. 5303. Temporary bankruptcy judgeships.
Sec. 5304. Conversion of existing temporary bankruptcy judgeships.
Sec. 5305. General provisions.
Sec. 5306. Effective date.
Subtitle D--Ninth Circuit Reorganization
Sec. 5401. Short title.
Sec. 5402. Definitions.
Sec. 5403. Number and composition of circuits.
Sec. 5404. Number of circuit judges.
Sec. 5405. Places of circuit court.
Sec. 5406. Assignment of circuit judges.
Sec. 5407. Election of assignment by senior judges.
Sec. 5408. Seniority of judges.
Sec. 5409. Application to cases.
Sec. 5410. Temporary assignment of circuit judges among circuits.
Sec. 5411. Temporary assignment of district judges among circuits.
Sec. 5412. Administration.
Sec. 5413. Effective date.
Subtitle E--Authorization of Appropriations
Sec. 5501. Authorization of appropriations.
Subtitle A--Visa Fees
SEC. 5101. FEES WITH RESPECT TO IMMIGRATION SERVICES FOR INTRACOMPANY
TRANSFEREES.
Section 214(c) of the Immigration and Nationality Act (8 U.S.C.
1184(c)) is amended by adding at the end the following:
``(15)(A) The Secretary of State shall impose a fee on an employer
when an alien files an application abroad for a visa authorizing
initial admission to the United States as a nonimmigrant described in
section 101(a)(15)(L) in order to be employed by the employer, if the
alien is covered under a blanket petition described in paragraph
(2)(A).
``(B) The Secretary of Homeland Security shall impose a fee on an
employer filing a petition under paragraph (1) initially to grant an
alien nonimmigrant status described in section 101(a)(15)(L) or to
extend for the first time the stay of an alien having such status.
``(C) The amount of the fee imposed under subparagraph (A) or (B)
shall be $1,500.
``(D) The fees imposed under subparagraphs (A) and (B) shall only
apply to principal aliens and not to spouses or children who are
accompanying or following to join such principal aliens.
``(E) Fees collected under this paragraph shall be deposited as
offsetting receipts in the Treasury, and shall not be available for
expenditure until appropriated.
``(F)(i) An employer may not require an alien who is the
beneficiary of the visa or petition for which a fee is imposed under
this paragraph to reimburse, or otherwise compensate, the employer for
part or all of the cost of such fee.
``(ii) Section 274A(g)(2) shall apply to a violation of clause (i)
in the same manner as it applies to a violation of section
274A(g)(1).''.
Subtitle B--Circuit and District Judgeships
SEC. 5201. SHORT TITLE.
This subtitle may be cited as the ``Federal Judgeship Act of
2005''.
SEC. 5202. CIRCUIT JUDGES FOR THE CIRCUIT COURTS OF APPEALS.
(a) In General.--The President shall appoint, by and with the
advice and consent of the Senate--
(1) 1 additional circuit judge for the first circuit court
of appeals;
(2) 2 additional circuit judges for the second circuit
court of appeals;
(3) 1 additional circuit judge for the sixth circuit court
of appeals; and
(4) 5 additional circuit judges for the ninth circuit court
of appeals, whose official duty station shall be in California.
(b) Temporary Judgeships.--
(1) In general.--The President shall appoint, by and with
the advice and consent of the Senate--
(A) 1 additional circuit judge for the eighth
circuit court of appeals; and
(B) 2 additional circuit judges for the ninth
circuit court of appeals, whose official duty station
shall be in California.
(2) Vacancies.--
(A) Eighth circuit.--The first vacancy in the
office of circuit judge in the eighth circuit court of
appeals, occurring 10 years or more after the
confirmation date of the judge named to fill the
circuit judgeship created in that circuit by paragraph
(1)(A) shall not be filled.
(B) Ninth circuit.--The first 2 vacancies in the
office of circuit judge in the ninth circuit court of
appeals, occurring 10 years or more after judges are
first confirmed to fill both temporary circuit
judgeships created by paragraph (1)(B) shall not be
filled.
(c) Table of judgeships.--In order that the table contained in
section 44 of title 28, United States Code, will, with respect to each
judicial circuit, reflect the changes in the total number of permanent
circuit judgeships authorized under subsection (a) of this section,
such table is amended to read as follows:
1
Number of
``Circuits
Judges
District of Columbia............................... 12
First.............................................. 7
Second............................................. 15
Third.............................................. 14
Fourth............................................. 15
Fifth.............................................. 17
Sixth.............................................. 17
Seventh............................................ 11
Eighth............................................. 11
Ninth.............................................. 33
Tenth.............................................. 12
Eleventh........................................... 12
Federal............................................ 12.''.
SEC. 5203. DISTRICT JUDGES FOR THE DISTRICT COURTS.
(a) In General.--The President shall appoint, by and with the
advice and consent of the Senate--
(1) 1 additional district judge for the northern district
of Alabama;
(2) 4 additional district judges for the district of
Arizona;
(3) 3 additional district judges for the northern district
of California;
(4) 4 additional district judges for the eastern district
of California;
(5) 4 additional district judges for the central district
of California;
(6) 1 additional district judge for the southern district
of California;
(7) 1 additional district judge for the district of
Colorado;
(8) 4 additional district judges for the middle district of
Florida;
(9) 3 additional district judges for the southern district
of Florida;
(10) 1 additional district judge for the district of Idaho;
(11) 1 additional district judge for the northern district
of Illinois;
(12) 1 additional district judge for the southern district
of Indiana;
(13) 1 additional district judge for the western district
of Missouri;
(14) 1 additional district judge for the district of
Nebraska;
(15) 1 additional district judge for the district of
Nevada;
(16) 1 additional district judge for the district of New
Mexico;
(17) 3 additional district judges for the eastern district
of New York;
(18) 1 additional district judge for the western district
of New York;
(19) 1 additional district judge for the district of
Oregon;
(20) 1 additional district judge for the district of South
Carolina;
(21) 3 additional district judges for the southern district
of Texas;
(22) 2 additional district judges for the eastern district
of Virginia; and
(23) 1 additional district judge for the western district
of Washington.
(b) Temporary Judgeships.--
(1) In general.--The President shall appoint, by and with
the advice and consent of the Senate--
(A) 1 additional district judge for the middle
district of Alabama;
(B) 1 additional district judge for the district of
Arizona;
(C) 1 additional district judge for the northern
district of California;
(D) 1 additional district judge for the district of
Colorado;
(E) 1 additional district judge for the middle
district of Florida;
(F) 1 additional district judge for the northern
district of Iowa;
(G) 1 additional district judge for the district of
Minnesota;
(H) 1 additional district judge for the district of
New Jersey;
(I) 1 additional district judge for the district of
New Mexico;
(J) 1 additional district judge for the southern
district of Ohio;
(K) 1 additional district judge for the district of
Oregon; and
(L) 1 additional district judge for the district of
Utah.
(2) Vacancies not filled.--The first vacancy in the office
of district judge in each of the judicial districts named in
paragraph (1) occurring 10 years or more after the confirmation
date of the judge named to fill the district judgeship created
in that district by paragraph (1) shall not be filled.
(c) Existing Judgeships.--
(1) Permanent judgeships.--The existing judgeships for the
district of Hawaii, the district of Kansas, and the eastern
district of Missouri authorized by section 203(c) of the
Judicial Improvements Act of 1990 (Public Law 101-650; 28
U.S.C. 133 note) shall, as of the effective date of this Act,
be authorized under section 133 of title 28, United States
Code, and the incumbents in those offices shall hold the office
under section 133 of title 28, United States Code, as amended
by this Act.
(2) Extension of temporary judgeship.--Section 203(c) of
the Judicial Improvements Act of 1990 (Public Law 101-650; 28
U.S.C. 133 note) is amended in the fifth sentence (relating to
the northern district of Ohio) by striking ``15 years'' and
inserting ``20 years''.
(d) Table of Judgeships.--In order that the table contained in
section 133(a) of title 28, United States Code, will, with respect to
each judicial district, reflect the changes in the total number of
permanent district judgeships authorized under subsections (a) and (c)
of this section, such table is amended to read as follows:
``Districts
Judges
``Alabama:
``Northern......................................... 8
``Middle........................................... 3
``Southern......................................... 3
``Alaska................................................... 3
``Arizona.................................................. 16
``Arkansas:
``Eastern.......................................... 5
``Western.......................................... 3
``California:
``Northern......................................... 17
``Eastern.......................................... 10
``Central.......................................... 31
``Southern......................................... 14
``Colorado................................................. 8
``Connecticut.............................................. 8
``Delaware................................................. 4
``District of Columbia..................................... 15
``Florida:
``Northern......................................... 4
``Middle........................................... 19
``Southern......................................... 20
``Georgia:
``Northern......................................... 11
``Middle........................................... 4
``Southern......................................... 3
``Hawaii................................................... 4
``Idaho.................................................... 3
``Illinois:
``Northern......................................... 23
``Central.......................................... 4
``Southern......................................... 4
``Indiana:
``Northern......................................... 5
``Southern......................................... 6
``Iowa:
``Northern......................................... 2
``Southern......................................... 3
``Kansas................................................... 6
``Kentucky:
``Eastern.......................................... 5
``Western.......................................... 4
``Eastern and Western.............................. 1
``Louisiana:
``Eastern.......................................... 12
``Middle........................................... 3
``Western.......................................... 7
``Maine.................................................... 3
``Maryland................................................. 10
``Massachusetts............................................ 13
``Michigan:
``Eastern.......................................... 15
``Western.......................................... 4
``Minnesota................................................ 7
``Mississippi:
``Northern......................................... 3
``Southern......................................... 6
``Missouri:
``Eastern.......................................... 7
``Western.......................................... 6
``Eastern and Western.............................. 2
``Montana.................................................. 3
``Nebraska................................................. 4
``Nevada................................................... 8
``New Hampshire............................................ 3
``New Jersey............................................... 17
``New Mexico............................................... 7
``New York:
``Northern......................................... 5
``Southern......................................... 28
``Eastern.......................................... 18
``Western.......................................... 5
``North Carolina:
``Eastern.......................................... 4
``Middle........................................... 4
``Western.......................................... 4
``North Dakota............................................. 2
``Ohio:
``Northern......................................... 11
``Southern......................................... 8
``Oklahoma:
``Northern......................................... 3
``Eastern.......................................... 1
``Western.......................................... 6
``Northern, Eastern, and Western................... 1
``Oregon................................................... 7
``Pennsylvania:
``Eastern.......................................... 22
``Middle........................................... 6
``Western.......................................... 10
``Puerto Rico.............................................. 7
``Rhode Island............................................. 3
``South Carolina........................................... 11
``South Dakota............................................. 3
``Tennessee:
``Eastern.......................................... 5
``Middle........................................... 4
``Western.......................................... 5
``Texas:
``Northern......................................... 12
``Southern......................................... 22
``Eastern.......................................... 7
``Western.......................................... 13
``Utah..................................................... 5
``Vermont.................................................. 2
``Virginia:
``Eastern.......................................... 13
``Western.......................................... 4
``Washington:
``Eastern.......................................... 4
``Western.......................................... 8
``West Virginia:
``Northern......................................... 3
``Southern......................................... 5
``Wisconsin:
``Eastern.......................................... 5
``Western.......................................... 2
``Wyoming.................................................. 3.''.
SEC. 5204. ESTABLISHMENT OF ARTICLE III COURT IN THE VIRGIN ISLANDS.
(a) Establishment of Judicial District.--
(1) Virgin islands.--Chapter 5 of title 28, United States
Code, is amended by inserting after section 126 the following
new section:
``Sec. 126A. Virgin Islands
``The Virgin Islands constitutes 1 judicial district comprising 2
divisions.
``(1) The Saint Croix Division comprises the Island of
Saint Croix and adjacent islands and cays.
``Court for the Saint Croix Division shall be held
at Christiansted.
``(2) The Saint Thomas and Saint John Division comprises
the Islands of Saint Thomas and Saint John and adjacent islands
and cays.
``Court for the Saint Thomas and Saint John
Division shall be held at Charlotte-Amalie.''.
(2) Technical and conforming amendment.--The table of
contents for chapter 5 of title 28, United States Code, is
amended by inserting after the item relating to section 126 the
following:
``126A. Virgin Islands.''.
(b) Number of Judges.--The table contained in section 133(a) of
title 28, United States Code, is amended by inserting after the item
relating to Vermont the following:
``Virgin Islands............................................ 2''.
(c) Bankruptcy Judges.--The table contained in section 152(a)(2) of
title 28, United States Code, is amended by inserting after the item
relating to Vermont the following:
``Virgin Islands............................................ 0''.
(d) Judicial Conferences of Circuits.--Section 333 of title 28,
United States Code, is amended in the third sentence of the first
undesignated paragraph--
(1) by striking ``, the District Court of the Virgin
Islands,''; and
(2) by striking ``to the conferences of their respective
circuits'' and inserting ``to the conference of the ninth
circuit''.
(e) Judges in Territories and Possessions.--Section 373 of title
28, United States Code, is amended--
(1) in subsection (a), by striking ``, the District Court
of the Northern Mariana Islands, or the District Court of the
Virgin Islands'' and inserting ``or the District Court of the
Northern Mariana Islands''; and
(2) in subsection (e), by striking ``, the District Court
of the Northern Mariana Islands, or the District Court of the
Virgin Islands'' and inserting ``or the District Court of the
Northern Mariana Islands''.
(f) Annuities for Survivors of Certain Judicial Officials of the
United States.--Section 376(a) of title 28, United States Code, is
amended--
(1) in paragraph (1)(B), by striking ``, the District Court
of the Northern Mariana Islands, or the District Court of the
Virgin Islands'' and inserting ``or the District Court of the
Northern Mariana Islands''; and
(2) in paragraph (2)(B), by striking ``, the District Court
of the Northern Mariana Islands, or the District Court of the
Virgin Islands'' and inserting ``or the District Court of the
Northern Mariana Islands''.
(g) Authority of Attorney General.--Section 526(a)(2) of title 28,
United States Code, is amended by striking ``and of the district court
of the Virgin Islands''.
(h) Courts Defined.--Section 610 of title 28, United States Code,
is amended--
(1) by striking ``the United States District Court for the
District of the Canal Zone,''; and
(2) by striking ``the District Court of the Virgin
Islands,''.
(i) United States Magistrate Judges.--Section 631(a) of title 28,
United States Code, is amended--
(1) in the first sentence, by striking ``the Virgin
Islands, Guam,'' and inserting ``Guam''; and
(2) in the second sentence, by striking ``the Virgin
Islands, Guam,'' and inserting ``Guam''.
(j) Court Reporters.--Section 753(a) of title 28, United States
Code, is amended by striking ``, the United States District Court for
the District of the Canal Zone, the District Court of Guam, and the
District Court of the Virgin Islands'' and inserting ``and the District
Court of Guam''.
(k) Final Decisions of District Courts.--Section 1291 of title 28,
United States Code, is amended by striking ``, the United States
District Court for the District of the Canal Zone, the District Court
of Guam, and the District Court of the Virgin Islands,'' and inserting
``and the District Court of Guam,''.
(l) Interlocutory Decisions.--Section 1292 of title 28, United
States Code, is amended--
(1) in subsection (a), by striking ``, the United States
District Court for the District of the Canal Zone, the District
Court of Guam, and the District Court of the Virgin Islands,''
and inserting ``and the District Court of Guam,''; and
(2) in subsection (d)(4)(A), by striking ``the District
Court of the Virgin Islands,''.
(m) Jurisdiction of the United States Court of Appeals for the
Federal Circuit.--Section 1295(a) of title 28, United States Code, is
amended in paragraphs (1) and (2)--
(1) by striking ``the United States District Court for the
District of the Canal Zone,''; and
(2) by striking ``the District Court of the Virgin
Islands,''.
(n) United States as Defendant.--Section 1346(b)(1) of title 28,
United States Code, is amended by striking ``, together with the United
States District Court for the District of the Canal Zone and the
District Court of the Virgin Islands,''.
(o) Adequate Representation of Defendants.--Section 3006A(j) of
title 18, United States Code, is amended by striking ``the District
Court of the Virgin Islands,''.
(p) Savings Provisions.--
(1) Tenure of incumbent judges.--A judge of the District
Court of the Virgin Islands in office on the effective date of
this section shall continue in office until the expiration of
the term for which the judge was appointed, or until the judge
dies, resigns, or is removed from office, whichever occurs
first. When a vacancy occurs on the court on or after the
effective date of this section, the President, in accordance
with section 133(a) of title 28, United States Code, shall
appoint, by and with the advice and consent of the Senate, a
district judge for the District of the Virgin Islands.
(2) Retirement rights and benefits.--The amendments made by
this section shall not affect the rights under sections 373 and
376 of title 28, United States Code, of any judge of the
District Court of the Virgin Islands who retires on or before
the effective date of this section or who continues in office
after that date under paragraph (1) of this subsection. Service
as a judge of the District Court of the Virgin Islands
appointed under section 24 of the Revised Organic Act of the
Virgin Islands (48 U.S.C. 1614) shall be included in
calculating service under sections 371 and 372 of title 28,
United States Code, and shall not be counted for purposes of
section 373 of that title, if the judge is reappointed, after
the effective date of this section, under section 133(a) of
title 28, United States Code, as district judge for the
District of the Virgin Islands.
(q) Amendments to Revised Organic Act of the Virgin Islands.--
(1) Repeals.--Sections 24, 25, 26, and 27 of the Revised
Organic Act of the Virgin Islands (48 U.S.C. 1614, 1615, 1616
and 1617) are repealed.
(2) Rights and prohibitions.--Section 3 of the Revised
Organic Act of the Virgin Islands (48 U.S.C. 1561) is amended
in the 23d undesignated paragraph--
(A) by inserting ``article III;'' after ``section
9, clauses 2 and 3;'' and
(B) by striking ``That all offenses against the
laws of the United States'' and all that follows
through ``section 22(b) of this Act or'' and inserting
``That all offenses against the laws of the Virgin
Islands which are prosecuted''.
(3) Jurisdiction.--Section 21 of the Revised Organic Act of
the Virgin Islands (48 U.S.C. 1611) is amended to read as
follows:
``SEC. 21. JURISDICTION OF THE COURTS OF THE VIRGIN ISLANDS.
``(a) Jurisdiction of the Courts of the Virgin Islands.--The
judicial power of the Virgin Islands shall be vested in such trial and
appellate courts as may have been or may hereafter be established by
local law. The local courts of the Virgin Islands shall have
jurisdiction over all causes of action in the Virgin Islands over which
any court established by the Constitution and laws of the United States
does not have exclusive jurisdiction.
``(b) Practice and Procedure.--The rules governing the practice and
procedure of the courts established by local law and those prescribing
the qualifications and duties of the judges and officers thereof, oaths
and bonds, and the times and places of holding court shall be governed
by local law or the rules promulgated by those courts.''.
(4) Income tax matters.--Section 22 of the Revised Organic
Act of the Virgin Islands (48 U.S.C. 1612) is amended to read
as follows:
``SEC. 22. JURISDICTION OVER INCOME TAX MATTERS.
``The United States District Court for the District of the Virgin
Islands shall have exclusive jurisdiction over all criminal and civil
proceedings in the Virgin Islands with respect to the income tax laws
applicable to the Virgin Islands, except the ancillary laws relating to
the income tax enacted by the legislature of the Virgin Islands. Any
act or failure to act with respect to the income tax laws applicable to
the Virgin Islands which would constitute a criminal offense described
in chapter 75 of subtitle F of the Internal Revenue Code of 1986 shall
constitute an offense against the Government of the Virgin Islands and
may be prosecuted in the name of the Government of the Virgin Islands
by the appropriate officers thereof in the United States District Court
for the District of the Virgin Islands without the request or consent
of the United States attorney for the Virgin Islands.''.
(5) Appellate jurisdiction.--Section 23A of the Revised
Organic Act of the Virgin Islands (48 U.S.C. 1613a) is
amended--
(A) by striking ``District Court of the Virgin
Islands'' each place it appears and inserting ``United
States District Court for the District of the Virgin
Islands''; and
(B) in subsection (b), by striking ``pursuant to
section 24(a) of this Act: Provided, That no more than
one of them may be a judge of a court established by
local law.'' and inserting ``pursuant to chapter 13 of
title 28, United States Code, or a recalled senior
judge of the former District Court of the Virgin
Islands. The chief judge of the United States Court of
Appeals for the Third Circuit may assign to the
appellate division a judge of a court of record of the
Virgin Islands, except that no more than 1 of the
judges sitting in the appellate division at any session
may be a judge of a court established by local law.''.
(r) Additional References.--Any reference in any provision of law
to the ``District Court of the Virgin Islands'' shall, on and after the
effective date of this section, be deemed to be a reference to the
United States District Court for the District of the Virgin Islands.
(s) Effective Date.--This section and the amendments made by this
section shall take effect at the end of the 90-day period beginning on
the date of the enactment of this Act. Any complaint or proceeding
pending in the District Court of the Virgin Islands on the effective
date of this section may be pursued to final determination in the
United States District Court for the District of the Virgin Islands,
the United States Court of Appeals for the Third Circuit, the United
States Court of Appeals for the Federal Circuit, and the Supreme Court
of the United States.
SEC. 5205. EFFECTIVE DATE.
Except as provided in section 5204(s), this subtitle and the
amendments made by this subtitle shall take effect on the date of the
enactment of this Act.
Subtitle C--Bankruptcy Judgeships
SEC. 5301. SHORT TITLE.
This subtitle may be cited as the ``Enhanced Bankruptcy Judgeship
Act of 2005''.
SEC. 5302. AUTHORIZATION FOR ADDITIONAL BANKRUPTCY JUDGESHIPS.
The following judgeships shall be filled in the manner prescribed
in section 152(a)(1) of title 28, United States Code, for the
appointment of bankruptcy judges provided for in section 152(a)(2) of
such title:
(1) 1 additional bankruptcy judgeship for the eastern and
western districts of Arkansas.
(2) 1 additional bankruptcy judgeship for the eastern
district of California.
(3) 2 additional bankruptcy judgeships for the middle
district of Florida.
(4) 2 additional bankruptcy judgeships for the northern
district of Georgia.
(5) 1 additional bankruptcy judgeship for the southern
district of Georgia.
(6) 1 additional bankruptcy judgeship for the eastern
district of Kentucky.
(7) 1 additional bankruptcy judgeship for the district of
Maryland.
(8) 3 additional bankruptcy judgeships for the eastern
district of Michigan.
(9) 1 additional bankruptcy judgeship for the southern
district of New York.
(10) 1 additional bankruptcy judgeship for the western
district of Pennsylvania.
(11) 1 additional bankruptcy judgeship for the western
district of Tennessee.
(12) 1 additional bankruptcy judgeship for the eastern
district of Texas.
(13) 1 additional bankruptcy judgeship for the district of
Utah.
SEC. 5303. TEMPORARY BANKRUPTCY JUDGESHIPS.
(a) Authorization for Additional Temporary Bankruptcy Judgeships.--
The following judgeships shall be filled in the manner prescribed in
section 152(a)(1) of title 28, United States Code, for the appointment
of bankruptcy judges provided for in section 152(a)(2) of such title:
(1) 1 additional bankruptcy judgeship for the northern
district of Florida.
(2) 2 additional bankruptcy judgeships for the middle
district of Florida.
(3) 1 additional bankruptcy judgeship for the northern
district of Indiana.
(4) 1 additional bankruptcy judgeship for the northern
district of Mississippi.
(5) 1 additional bankruptcy judgeship for the district of
Nevada.
(6) 1 additional bankruptcy judgeship for the western
district of North Carolina.
(7) 1 additional bankruptcy judgeship for the southern
district of Ohio.
(b) Vacancies.--
(1) Districts with single appointments.--Except as provided
in paragraph (2), the first vacancy occurring in the office of
bankruptcy judge in each of the judicial districts set forth in
subsection (a)--
(A) occurring 5 years or more after the appointment
date of the bankruptcy judge appointed under subsection
(a) to such office, and
(B) resulting from the death, retirement,
resignation, or removal of a bankruptcy judge,
shall not be filled.
(2) Middle district of florida.--The 1st and 2d vacancies
in the office of bankruptcy judge in the middle district of
Florida--
(A) occurring 5 years or more after the respective
1st and 2d appointment dates of the bankruptcy judges
appointed under subsection (a)(2), and
(B) resulting from the death, retirement,
resignation, or removal of a bankruptcy judge,
shall not be filled.
(c) Eligibility for Subsequent Appointments.--A judge holding
office in any of the districts enumerated in subsection (a) shall, at
the expiration of the term of the judge (other than by reason of
paragraph (1)(B) or (2)(B) of subsection (b)), be eligible for
reappointment as a bankruptcy judge in that district.
SEC. 5304. CONVERSION OF EXISTING TEMPORARY BANKRUPTCY JUDGESHIPS.
(a) Judgeships Authorized by Public Law 102-361.--The following
temporary bankruptcy judgeships authorized by the following paragraphs
of section 3(a) of Public Law 102-361, as amended by section 307 of
Public Law 104-317 (28 U.S.C. 152 note), are converted to permanent
bankruptcy judgeships under section 152(a)(2) of title 28, United
States Code:
(1) The temporary bankruptcy judgeship for the district of
Delaware authorized by paragraph (3).
(2) The temporary bankruptcy judgeship for the southern
district of Illinois authorized by paragraph (4).
(3) The temporary bankruptcy judgeship for the district of
Puerto Rico authorized by paragraph (7).
(b) Judgeships Authorized by Public Law 109-8.--The following
temporary bankruptcy judgeships authorized by the following
subparagraphs of section 1223(b)(1) of the Bankruptcy Abuse Prevention
and Consumer Protection Act of 2005 (Public Law 109-8), are converted
to permanent bankruptcy judgeships under section 152(a)(2) of title 28,
United States Code:
(1) The 4 temporary bankruptcy judgeships for the district
of Delaware authorized by subparagraph (C).
(2) The temporary bankruptcy judgeship for the southern
district of Georgia authorized by subparagraph (E).
(3) One of the 3 temporary bankruptcy judgeships for the
district of Maryland authorized by subparagraph (F).
(4) The temporary bankruptcy judgeship for the eastern
district of Michigan authorized by subparagraph (G).
(5) The temporary bankruptcy judgeship for the district of
New Jersey authorized by subparagraph (I).
(6) The temporary bankruptcy judgeship for the northern
district of New York authorized by subparagraph (K).
(7) The temporary bankruptcy judgeship for the southern
district of New York authorized by subparagraph (L).
(8) The temporary bankruptcy judgeship for the eastern
district of North Carolina authorized by subparagraph (M).
(9) The temporary bankruptcy judgeship for the eastern
district of Pennsylvania authorized by subparagraph (N).
(10) The temporary bankruptcy judgeship for the district of
South Carolina authorized by subparagraph (S).
(11) The temporary bankruptcy judgeship for the western
district of Tennessee authorized by subparagraph (Q).
SEC. 5305. GENERAL PROVISIONS.
(a) Table of judgeships.--In order that the table contained in
section 152(a)(2) of title 28, United States Code, will, with respect
to each judicial district, reflect the changes in the total number of
bankruptcy judgeships authorized under sections 5302 and 5304, such
table is amended to read as follows:
``Districts
Judges
``Alabama:
``Northern ........................................ 5
``Middle .......................................... 2
``Southern ........................................ 2
``Alaska .................................................. 2
``Arizona ................................................. 7
``Arkansas:
``Eastern and Western ............................. 4
``California:
``Northern......................................... 9
``Eastern.......................................... 7
``Central ......................................... 21
``Southern ........................................ 4
``Colorado................................................. 5
``Connecticut.............................................. 3
``Delaware................................................. 6
``District of Columbia..................................... 1
``Florida:
``Northern......................................... 1
``Middle........................................... 10
``Southern......................................... 5
``Georgia:
``Northern......................................... 10
``Middle........................................... 3
``Southern ........................................ 4
``Hawaii................................................... 1
``Idaho.................................................... 2
``Illinois:
``Northern......................................... 10
``Central.......................................... 3
``Southern......................................... 2
``Indiana:
``Northern......................................... 3
``Southern......................................... 4
``Iowa:
``Northern......................................... 2
``Southern......................................... 2
``Kansas................................................... 4
``Kentucky:
``Eastern.......................................... 3
``Western.......................................... 3
``Louisiana:
``Eastern.......................................... 2
``Middle........................................... 1
``Western.......................................... 3
``Maine.................................................... 2
``Maryland................................................. 6
``Massachusetts............................................ 5
``Michigan:
``Eastern.......................................... 8
``Western.......................................... 3
``Minnesota................................................ 4
``Mississippi:
``Northern......................................... 1
``Southern......................................... 2
``Missouri:
``Eastern.......................................... 3
``Western.......................................... 3
``Montana.................................................. 1
``Nebraska................................................. 2
``Nevada................................................... 3
``New Hampshire............................................ 1
``New Jersey............................................... 9
``New Mexico............................................... 2
``New York:
``Northern......................................... 3
``Southern......................................... 11
``Eastern.......................................... 6
``Western.......................................... 3
``North Carolina:
``Eastern.......................................... 3
``Middle........................................... 2
``Western.......................................... 2
``North Dakota............................................. 1
``Ohio:
``Northern......................................... 8
``Southern......................................... 7
``Oklahoma:
``Northern......................................... 2
``Eastern.......................................... 1
``Western.......................................... 3
``Oregon................................................... 5
``Pennsylvania:
``Eastern.......................................... 6
``Middle........................................... 2
``Western.......................................... 5
``Puerto Rico.............................................. 3
``Rhode Island............................................. 1
``South Carolina........................................... 3
``South Dakota............................................. 2
``Tennessee:
``Eastern.......................................... 3
``Middle........................................... 3
``Western.......................................... 6
``Texas:
``Northern......................................... 6
``Eastern.......................................... 3
``Southern......................................... 6
``Western.......................................... 4
``Utah..................................................... 4
``Vermont.................................................. 1
``Virgin Islands........................................... 0
``Virginia:
``Eastern.......................................... 5
``Western.......................................... 3
``Washington:
``Eastern.......................................... 2
``Western.......................................... 5
``West Virginia:
``Northern......................................... 1
``Southern......................................... 1
``Wisconsin:
``Eastern.......................................... 4
``Western.......................................... 2
``Wyoming.................................................. 1.''.
(b) Sense of Congress.--It is the sense of the Congress that
bankruptcy judges in the eastern district of California should conduct
bankruptcy proceedings on a daily basis in Bakersfield, California.
SEC. 5306. EFFECTIVE DATE.
This subtitle and the amendments made by this subtitle shall take
effect on the date of the enactment of this Act.
Subtitle D--Ninth Circuit Reorganization
SEC. 5401. SHORT TITLE.
This subtitle may be cited as the ``Judicial Administration and
Improvements Act of 2005''.
SEC. 5402. DEFINITIONS.
In this subtitle:
(1) Former ninth circuit.--The term ``former ninth
circuit'' means the ninth judicial circuit of the United States
as in existence on the day before the effective date of this
subtitle.
(2) New ninth circuit.--The term ``new ninth circuit''
means the ninth judicial circuit of the United States
established by the amendment made by section 5403(2)(A).
(3) Twelfth circuit.--The term ``twelfth circuit'' means
the twelfth judicial circuit of the United States established
by the amendment made by section 5403(2)(B).
SEC. 5403. NUMBER AND COMPOSITION OF CIRCUITS.
Section 41 of title 28, United States Code, is amended--
(1) in the matter preceding the table, by striking
``thirteen'' and inserting ``fourteen''; and
(2) in the table--
(A) by striking the item relating to the ninth
circuit and inserting the following:
``Ninth........................
California, Guam, Hawaii,
Northern Mariana
Islands.'';
and
(B) by inserting after the item relating to the
eleventh circuit the following:
``Twelfth......................
Alaska, Arizona, Idaho,
Montana, Nevada,
Oregon, Washington.''.
SEC. 5404. NUMBER OF CIRCUIT JUDGES.
The table contained in section 44(a) of title 28, United States
Code, as amended by section 5202(c) of this Act, is further amended--
(1) by striking the item relating to the ninth circuit and
inserting the following:
``Ninth..................................................... 19'';
and
(2) by inserting after the item relating to the eleventh
circuit the following:
``Twelfth................................................... 14''.
SEC. 5405. PLACES OF CIRCUIT COURT.
The table contained in section 48(a) of title 28, United States
Code, is amended--
(1) by striking the item relating to the ninth circuit and
inserting the following:
``Ninth........................
Honolulu, Pasadena, San
Francisco.'';
and
(2) by inserting after the item relating to the eleventh
circuit the following:
``Twelfth......................
Las Vegas, Missoula, Phoenix,
Portland, Seattle.''.
SEC. 5406. ASSIGNMENT OF CIRCUIT JUDGES.
Each circuit judge of the former ninth circuit who is in regular
active service and whose official duty station on the day before the
effective date of this subtitle--
(1) is in California, Guam, Hawaii, or the Northern Mariana
Islands shall be a circuit judge of the new ninth circuit as of
such effective date; and
(2) is in Alaska, Arizona, Idaho, Montana, Nevada, Oregon,
or Washington shall be a circuit judge of the twelfth circuit
as of such effective date.
SEC. 5407. ELECTION OF ASSIGNMENT BY SENIOR JUDGES.
Each judge who is a senior circuit judge of the former ninth
circuit on the day before the effective date of this subtitle may elect
to be assigned to the new ninth circuit or the twelfth circuit as of
such effective date and shall notify the Director of the Administrative
Office of the United States Courts of such election.
SEC. 5408. SENIORITY OF JUDGES.
The seniority of each judge--
(1) who is assigned under section 5406, or
(2) who elects to be assigned under section 5407,
shall run from the date of commission of such judge as a judge of the
former ninth circuit.
SEC. 5409. APPLICATION TO CASES.
The following apply to any case in which, on the day before the
effective date of this subtitle, an appeal or other proceeding has been
filed with the former ninth circuit:
(1) Except as provided in paragraph (3), if the matter has
been submitted for decision, further proceedings with respect
to the matter shall be had in the same manner and with the same
effect as if this subtitle had not been enacted.
(2) If the matter has not been submitted for decision, the
appeal or proceeding, together with the original papers,
printed records, and record entries duly certified, shall, by
appropriate orders, be transferred to the court to which the
matter would have been submitted had this subtitle been in full
force and effect at the time such appeal was taken or other
proceeding commenced, and further proceedings with respect to
the case shall be had in the same manner and with the same
effect as if the appeal or other proceeding had been filed in
such court.
(3) If a petition for rehearing en banc is pending on or
after the effective date of this subtitle, the petition shall
be considered by the court of appeals to which it would have
been submitted had this subtitle been in full force and effect
at the time that the appeal or other proceeding was filed with
the court of appeals.
SEC. 5410. TEMPORARY ASSIGNMENT OF CIRCUIT JUDGES AMONG CIRCUITS.
Section 291 of title 28, United States Code, is amended by adding
at the end the following:
``(c) The chief judge of the Ninth Circuit may, in the public
interest and upon request by the chief judge of the Twelfth Circuit,
designate and assign temporarily any circuit judge of the Ninth Circuit
to act as circuit judge in the Twelfth Circuit.
``(d) The chief judge of the Twelfth Circuit may, in the public
interest and upon request by the chief judge of the Ninth Circuit,
designate and assign temporarily any circuit judge of the Twelfth
Circuit to act as circuit judge in the Ninth Circuit.''.
SEC. 5411. TEMPORARY ASSIGNMENT OF DISTRICT JUDGES AMONG CIRCUITS.
Section 292 of title 28, United States Code, is amended by adding
at the end the following:
``(f) The chief judge of the United States Court of Appeals for the
Ninth Circuit may, in the public interest--
``(1) upon request by the chief judge of the Twelfth
Circuit, designate and assign 1 or more district judges within
the Ninth Circuit to sit upon the Court of Appeals of the
Twelfth Circuit, or a division thereof, whenever the business
of that court so requires; and
``(2) designate and assign temporarily any district judge
within the Ninth Circuit to hold a district court in any
district within the Twelfth Circuit.
``(g) The chief judge of the United States Court of Appeals for the
Twelfth Circuit may in the public interest--
``(1) upon request by the chief judge of the Ninth Circuit,
designate and assign 1 or more district judges within the
Twelfth Circuit to sit upon the Court of Appeals of the Ninth
Circuit, or a division thereof, whenever the business of that
court so requires; and
``(2) designate and assign temporarily any district judge
within the Twelfth Circuit to hold a district court in any
district within the Ninth Circuit.
``(h) Any designations or assignments under subsection (f) or (g)
shall be in conformity with the rules or orders of the court of appeals
of, or the district within, as applicable, the circuit to which the
judge is designated or assigned.''.
SEC. 5412. ADMINISTRATION.
The court of appeals for the ninth circuit as constituted on the
day before the effective date of this subtitle may take such
administrative action as may be required to carry out this subtitle and
the amendments made by this subtitle. Such court shall cease to exist
for administrative purposes 2 years after the date of the enactment of
this Act.
SEC. 5413. EFFECTIVE DATE.
This subtitle and the amendments made by this subtitle shall take
effect no later than December 31, 2006.
Subtitle E--Authorization of Appropriations
SEC. 5501. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for each of fiscal years
2006 through 2009 such sums as are necessary to carry out subtitles B,
C, and D of this title, including such sums as may be necessary to
provide appropriate space and facilities for the judicial positions
created by this title. Funds appropriated pursuant to this section in
any fiscal year shall remain available until expended.
TITLE VI--COMMITTEE ON RESOURCES
Subtitle A--Arctic Coastal Plain Domestic Energy
Sec. 6101. Short title.
Sec. 6102. Definitions.
Sec. 6103. Leasing program for lands within the coastal plain.
Sec. 6104. Lease sales.
Sec. 6105. Grant of leases by the Secretary.
Sec. 6106. Lease terms and conditions.
Sec. 6107. Coastal Plain environmental protection.
Sec. 6108. Expedited judicial review.
Sec. 6109. Federal and State distribution of revenues.
Sec. 6110. Rights-of-way across the Coastal Plain.
Sec. 6111. Conveyance.
Sec. 6112. Local government impact aid and community service
assistance.
Subtitle B--Miscellaneous Amendments Relating to Mining
Sec. 6201. Fees for recordation and location of mining claims.
Sec. 6202. Patents for mining or mill site claims.
Sec. 6203. Mineral examinations for mining on certain lands.
Sec. 6204. Mineral development lands available for purchase.
Sec. 6205. National mining and minerals policy to encourage and promote
the productive second use of lands.
Sec. 6206. Regulations.
Sec. 6207. Protection of national parks and wilderness areas.
Subtitle C--Disposal of Public Lands
Chapter 1--Disposal of Certain Public Lands in Nevada
Sec. 6301. Short title.
Sec. 6302. Definitions.
Sec. 6303. Land conveyance.
Sec. 6304. Disposition of proceeds.
Chapter 2--Disposal of Certain Public Lands in Idaho
Sec. 6311. Short title.
Sec. 6312. Definitions.
Sec. 6313. Land conveyance.
Sec. 6314. Disposition of proceeds.
Subtitle D--Oil shale
Sec. 6401. Oil shale and tar sands amendments.
Subtitle E--Ocean Energy Resources
Sec. 6501. Short title.
Sec. 6502. Policy.
Sec. 6503. Definitions under the Outer Continental Shelf Lands Act.
Sec. 6504. Determination of adjacent zones and planning areas.
Sec. 6505. Administration of leasing.
Sec. 6506. Grant of leases by Secretary.
Sec. 6507. Disposition of receipts.
Sec. 6508. Review of outer Continental Shelf exploration plans.
Sec. 6509. Reservation of lands and rights.
Sec. 6510. Outer Continental Shelf leasing program.
Sec. 6511. Coordination with Adjacent States.
Sec. 6512. Environmental studies.
Sec. 6513. Review of outer Continental Shelf development and production
plans.
Sec. 6514. Federal Energy Natural Resources Enhancement Fund Act of
2005.
Sec. 6515. Termination of effect of laws prohibiting the spending of
appropriated funds for certain purposes.
Sec. 6516. Outer Continental Shelf incompatible use.
Sec. 6517. Repurchase of certain leases.
Sec. 6518. Offsite environmental mitigation.
Sec. 6519. Amendments to the Mineral Leasing Act.
Sec. 6520. Minerals Management Service.
Sec. 6521. Authority to use decommissioned offshore oil and gas
platforms and other facilities for
mariculture, artificial reef, scientific
research, or other uses.
Sec. 6522. Repeal of requirement to conduct comprehensive inventory of
OCS oil and natural gas resources.
Sec. 6523. Mining and petroleum schools.
Sec. 6524. Onshore and offshore mineral lease fees.
Sec. 6525. Atlantic and Pacific OCS Region headquarters.
Sec. 6526. National Geologic Data and Mapping Fund Act of 2005.
Sec. 6527. Leases for areas located within 100 miles of California or
Florida.
Subtitle F--Sale and Conveyance of Federal Land
Sec. 6601. Collection of receipts from the sale of Federal lands.
Subtitle A--Arctic Coastal Plain Domestic Energy
SEC. 6101. SHORT TITLE.
This subtitle may be cited as the ``Arctic Coastal Plain Domestic
Energy Security Act of 2005''.
SEC. 6102. DEFINITIONS.
In this subtitle:
(1) Coastal plain.--The term ``Coastal Plain'' means that
area identified as such in the map entitled ``Arctic National
Wildlife Refuge'', dated October 21, 2005, comprising
approximately 1,549,000 acres, and as described in appendix I
to part 37 of title 50, Code of Federal Regulations.
(2) Secretary.--The term ``Secretary'', except as otherwise
provided, means the Secretary of the Interior or the
Secretary's designee.
SEC. 6103. LEASING PROGRAM FOR LANDS WITHIN THE COASTAL PLAIN.
(a) In General.--The Secretary shall take such actions as are
necessary--
(1) to establish and implement, in accordance with this Act
and acting through the Director of the Bureau of Land
Management in consultation with the Director of the United
States Fish and Wildlife Service, a competitive oil and gas
leasing program under the Mineral Leasing Act (30 U.S.C. 181 et
seq.) that will result in an environmentally sound program for
the exploration, development, and production of the oil and gas
resources of the Coastal Plain; and
(2) to administer the provisions of this subtitle through
regulations, lease terms, conditions, restrictions,
prohibitions, stipulations, and other provisions that ensure
the oil and gas exploration, development, and production
activities on the Coastal Plain will result in no significant
adverse effect on fish and wildlife, their habitat, subsistence
resources, and the environment, and including, in furtherance
of this goal, by requiring the application of the best
commercially available technology for oil and gas exploration,
development, and production to all exploration, development,
and production operations under this subtitle in a manner that
ensures the receipt of fair market value by the public for the
mineral resources to be leased.
(b) Repeal.--Section 1003 of the Alaska National Interest Lands
Conservation Act of 1980 (16 U.S.C. 3143) is repealed.
(c) Compliance With Requirements Under Certain Other Laws.--
(1) Compatibility.--For purposes of the National Wildlife
Refuge System Administration Act of 1966, the oil and gas
leasing program and activities authorized by this section in
the Coastal Plain are deemed to be compatible with the purposes
for which the Arctic National Wildlife Refuge was established,
and that no further findings or decisions are required to
implement this determination.
(2) Adequacy of the department of the interior's
legislative environmental impact statement.--The ``Final
Legislative Environmental Impact Statement'' (April 1987) on
the Coastal Plain prepared pursuant to section 1002 of the
Alaska National Interest Lands Conservation Act of 1980 (16
U.S.C. 3142) and section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) is
deemed to satisfy the requirements under the National
Environmental Policy Act of 1969 that apply with respect to
prelease activities, including actions authorized to be taken
by the Secretary to develop and promulgate the regulations for
the establishment of a leasing program authorized by this
subtitle before the conduct of the first lease sale.
(3) Compliance with nepa for other actions.--Before
conducting the first lease sale under this subtitle, the
Secretary shall prepare an environmental impact statement under
the National Environmental Policy Act of 1969 with respect to
the actions authorized by this subtitle that are not referred
to in paragraph (2). Notwithstanding any other law, the
Secretary is not required to identify nonleasing alternative
courses of action or to analyze the environmental effects of
such courses of action. The Secretary shall only identify a
preferred action for such leasing and a single leasing
alternative, and analyze the environmental effects and
potential mitigation measures for those two alternatives. The
identification of the preferred action and related analysis for
the first lease sale under this subtitle shall be completed
within 18 months after the date of enactment of this Act. The
Secretary shall only consider public comments that specifically
address the Secretary's preferred action and that are filed
within 20 days after publication of an environmental analysis.
Notwithstanding any other law, compliance with this paragraph
is deemed to satisfy all requirements for the analysis and
consideration of the environmental effects of proposed leasing
under this subtitle.
(d) Relationship to State and Local Authority.--Nothing in this
subtitle shall be considered to expand or limit State and local
regulatory authority.
(e) Special Areas.--
(1) In general.--The Secretary, after consultation with the
State of Alaska, the city of Kaktovik, and the North Slope
Borough, may designate up to a total of 45,000 acres of the
Coastal Plain as a Special Area if the Secretary determines
that the Special Area is of such unique character and interest
so as to require special management and regulatory protection.
The Secretary shall designate as such a Special Area the
Sadlerochit Spring area, comprising approximately 4,000 acres
as depicted on the map referred to in section 6102(1).
(2) Management.--Each such Special Area shall be managed so
as to protect and preserve the area's unique and diverse
character including its fish, wildlife, and subsistence
resource values.
(3) Exclusion from leasing or surface occupancy.--The
Secretary may exclude any Special Area from leasing. If the
Secretary leases a Special Area, or any part thereof, for
purposes of oil and gas exploration, development, production,
and related activities, there shall be no surface occupancy of
the lands comprising the Special Area.
(4) Directional drilling.--Notwithstanding the other
provisions of this subsection, the Secretary may lease all or a
portion of a Special Area under terms that permit the use of
horizontal drilling technology from sites on leases located
outside the area.
(f) Limitation on Closed Areas.--The Secretary's sole authority to
close lands within the Coastal Plain to oil and gas leasing and to
exploration, development, and production is that set forth in this
subtitle.
(g) Regulations.--
(1) In general.--The Secretary shall prescribe such
regulations as may be necessary to carry out this subtitle,
including rules and regulations relating to protection of the
fish and wildlife, their habitat, subsistence resources, and
environment of the Coastal Plain, by no later than 15 months
after the date of enactment of this Act.
(2) Revision of regulations.--The Secretary shall
periodically review and, if appropriate, revise the rules and
regulations issued under subsection (a) to reflect any
significant biological, environmental, or engineering data that
come to the Secretary's attention.
SEC. 6104. LEASE SALES.
(a) In General.--Lands may be leased pursuant to this subtitle to
any person qualified to obtain a lease for deposits of oil and gas
under the Mineral Leasing Act (30 U.S.C. 181 et seq.).
(b) Procedures.--The Secretary shall, by regulation, establish
procedures for--
(1) receipt and consideration of sealed nominations for any
area in the Coastal Plain for inclusion in, or exclusion (as
provided in subsection (c)) from, a lease sale;
(2) the holding of lease sales after such nomination
process; and
(3) public notice of and comment on designation of areas to
be included in, or excluded from, a lease sale.
(c) Lease Sale Bids.--Bidding for leases under this subtitle shall
be by sealed competitive cash bonus bids.
(d) Acreage Minimum in First Sale.--In the first lease sale under
this subtitle, the Secretary shall offer for lease those tracts the
Secretary considers to have the greatest potential for the discovery of
hydrocarbons, taking into consideration nominations received pursuant
to subsection (b)(1), but in no case less than 200,000 acres.
(e) Timing of Lease Sales.--The Secretary shall--
(1) conduct the first lease sale under this subtitle within
22 months after the date of the enactment of this Act; and
(2) conduct additional sales so long as sufficient interest
in development exists to warrant, in the Secretary's judgment,
the conduct of such sales.
SEC. 6105. GRANT OF LEASES BY THE SECRETARY.
(a) In General.--The Secretary may grant to the highest responsible
qualified bidder in a lease sale conducted pursuant to section 6104 any
lands to be leased on the Coastal Plain upon payment by the lessee of
such bonus as may be accepted by the Secretary.
(b) Subsequent Transfers.--No lease issued under this subtitle may
be sold, exchanged, assigned, sublet, or otherwise transferred except
with the approval of the Secretary. Prior to any such approval the
Secretary shall consult with, and give due consideration to the views
of, the Attorney General.
SEC. 6106. LEASE TERMS AND CONDITIONS.
(a) In General.--An oil or gas lease issued pursuant to this
subtitle shall--
(1) provide for the payment of a royalty of not less than
12\1/2\ percent in amount or value of the production removed or
sold from the lease, as determined by the Secretary under the
regulations applicable to other Federal oil and gas leases;
(2) provide that the Secretary may close, on a seasonal
basis, portions of the Coastal Plain to exploratory drilling
activities as necessary to protect caribou calving areas and
other species of fish and wildlife;
(3) require that the lessee of lands within the Coastal
Plain shall be fully responsible and liable for the reclamation
of lands within the Coastal Plain and any other Federal lands
that are adversely affected in connection with exploration,
development, production, or transportation activities conducted
under the lease and within the Coastal Plain by the lessee or
by any of the subcontractors or agents of the lessee;
(4) provide that the lessee may not delegate or convey, by
contract or otherwise, the reclamation responsibility and
liability to another person without the express written
approval of the Secretary;
(5) provide that the standard of reclamation for lands
required to be reclaimed under this subtitle shall be, as
nearly as practicable, a condition capable of supporting the
uses which the lands were capable of supporting prior to any
exploration, development, or production activities, or upon
application by the lessee, to a higher or better use as
approved by the Secretary;
(6) contain terms and conditions relating to protection of
fish and wildlife, their habitat, and the environment as
required pursuant to section 6103(a)(2);
(7) provide that the lessee, its agents, and its
contractors use best efforts to provide a fair share, as
determined by the level of obligation previously agreed to in
the 1974 agreement implementing section 29 of the Federal
Agreement and Grant of Right of Way for the Operation of the
Trans-Alaska Pipeline, of employment and contracting for Alaska
Natives and Alaska Native Corporations from throughout the
State;
(8) prohibit the export of oil produced under the lease;
and
(9) contain such other provisions as the Secretary
determines necessary to ensure compliance with the provisions
of this subtitle and the regulations issued under this
subtitle.
(b) Project Labor Agreements.--The Secretary, as a term and
condition of each lease under this subtitle and in recognizing the
Government's proprietary interest in labor stability and in the ability
of construction labor and management to meet the particular needs and
conditions of projects to be developed under the leases issued pursuant
to this subtitle and the special concerns of the parties to such
leases, shall require that the lessee and its agents and contractors
negotiate to obtain a project labor agreement for the employment of
laborers and mechanics on production, maintenance, and construction
under the lease.
SEC. 6107. COASTAL PLAIN ENVIRONMENTAL PROTECTION.
(a) No Significant Adverse Effect Standard to Govern Authorized
Coastal Plain Activities.--The Secretary shall, consistent with the
requirements of section 6103, administer the provisions of this
subtitle through regulations, lease terms, conditions, restrictions,
prohibitions, stipulations, and other provisions that--
(1) ensure the oil and gas exploration, development, and
production activities on the Coastal Plain will result in no
significant adverse effect on fish and wildlife, their habitat,
and the environment;
(2) require the application of the best commercially
available technology for oil and gas exploration, development,
and production on all new exploration, development, and
production operations; and
(3) ensure that the maximum amount of surface acreage
covered by production and support facilities, including
airstrips and any areas covered by gravel berms or piers for
support of pipelines, does not exceed 2,000 acres on the
Coastal Plain.
(b) Site-Specific Assessment and Mitigation.--The Secretary shall
also require, with respect to any proposed drilling and related
activities, that--
(1) a site-specific analysis be made of the probable
effects, if any, that the drilling or related activities will
have on fish and wildlife, their habitat, and the environment;
(2) a plan be implemented to avoid, minimize, and mitigate
(in that order and to the extent practicable) any significant
adverse effect identified under paragraph (1); and
(3) the development of the plan shall occur after
consultation with the agency or agencies having jurisdiction
over matters mitigated by the plan.
(c) Regulations to Protect Coastal Plain Fish and Wildlife
Resources, Subsistence Users, and the Environment.--Before implementing
the leasing program authorized by this subtitle, the Secretary shall
prepare and promulgate regulations, lease terms, conditions,
restrictions, prohibitions, stipulations, and other measures designed
to ensure that the activities undertaken on the Coastal Plain under
this subtitle are conducted in a manner consistent with the purposes
and environmental requirements of this subtitle.
(d) Compliance With Federal and State Environmental Laws and Other
Requirements.--The proposed regulations, lease terms, conditions,
restrictions, prohibitions, and stipulations for the leasing program
under this subtitle shall require compliance with all applicable
provisions of Federal and State environmental law and shall also
require the following:
(1) Standards at least as effective as the safety and
environmental mitigation measures set forth in items 1 through
29 at pages 167 through 169 of the ``Final Legislative
Environmental Impact Statement'' (April 1987) on the Coastal
Plain.
(2) Seasonal limitations on exploration, development, and
related activities, where necessary, to avoid significant
adverse effects during periods of concentrated fish and
wildlife breeding, denning, nesting, spawning, and migration.
(3) That exploration activities, except for surface
geological studies, be limited to the period between
approximately November 1 and May 1 each year and that
exploration activities shall be supported, if necessary, by ice
roads, winter trails with adequate snow cover, ice pads, ice
airstrips, and air transport methods, except that such
exploration activities may occur at other times, if the
Secretary finds that such exploration will have no significant
adverse effect on the fish and wildlife, their habitat, and the
environment of the Coastal Plain.
(4) Design safety and construction standards for all
pipelines and any access and service roads, that--
(A) minimize, to the maximum extent possible,
adverse effects upon the passage of migratory species
such as caribou; and
(B) minimize adverse effects upon the flow of
surface water by requiring the use of culverts,
bridges, and other structural devices.
(5) Prohibitions on general public access and use on all
pipeline access and service roads.
(6) Stringent reclamation and rehabilitation requirements,
consistent with the standards set forth in this subtitle,
requiring the removal from the Coastal Plain of all oil and gas
development and production facilities, structures, and
equipment upon completion of oil and gas production operations,
except that the Secretary may exempt from the requirements of
this paragraph those facilities, structures, or equipment that
the Secretary determines would assist in the management of the
Arctic National Wildlife Refuge and that are donated to the
United States for that purpose.
(7) Appropriate prohibitions or restrictions on access by
all modes of transportation.
(8) Appropriate prohibitions or restrictions on sand and
gravel extraction.
(9) Consolidation of facility siting.
(10) Appropriate prohibitions or restrictions on use of
explosives.
(11) Avoidance, to the extent practicable, of springs,
streams, and river system; the protection of natural surface
drainage patterns, wetlands, and riparian habitats; and the
regulation of methods or techniques for developing or
transporting adequate supplies of water for exploratory
drilling.
(12) Avoidance or reduction of air traffic-related
disturbance to fish and wildlife.
(13) Treatment and disposal of hazardous and toxic wastes,
solid wastes, reserve pit fluids, drilling muds and cuttings,
and domestic wastewater, including an annual waste management
report, a hazardous materials tracking system, and a
prohibition on chlorinated solvents, in accordance with
applicable Federal and State environmental law.
(14) Fuel storage and oil spill contingency planning.
(15) Research, monitoring, and reporting requirements.
(16) Field crew environmental briefings.
(17) Avoidance of significant adverse effects upon
subsistence hunting, fishing, and trapping by subsistence
users.
(18) Compliance with applicable air and water quality
standards.
(19) Appropriate seasonal and safety zone designations
around well sites, within which subsistence hunting and
trapping shall be limited.
(20) Reasonable stipulations for protection of cultural and
archeological resources.
(21) All other protective environmental stipulations,
restrictions, terms, and conditions deemed necessary by the
Secretary.
(e) Considerations.--In preparing and promulgating regulations,
lease terms, conditions, restrictions, prohibitions, and stipulations
under this section, the Secretary shall consider the following:
(1) The stipulations and conditions that govern the
National Petroleum Reserve-Alaska leasing program, as set forth
in the 1999 Northeast National Petroleum Reserve-Alaska Final
Integrated Activity Plan/Environmental Impact Statement.
(2) The environmental protection standards that governed
the initial Coastal Plain seismic exploration program under
parts 37.31 to 37.33 of title 50, Code of Federal Regulations.
(3) The land use stipulations for exploratory drilling on
the KIC-ASRC private lands that are set forth in Appendix 2 of
the August 9, 1983, agreement between Arctic Slope Regional
Corporation and the United States.
(f) Facility Consolidation Planning.--
(1) In general.--The Secretary shall, after providing for
public notice and comment, prepare and update periodically a
plan to govern, guide, and direct the siting and construction
of facilities for the exploration, development, production, and
transportation of Coastal Plain oil and gas resources.
(2) Objectives.--The plan shall have the following
objectives:
(A) Avoiding unnecessary duplication of facilities
and activities.
(B) Encouraging consolidation of common facilities
and activities.
(C) Locating or confining facilities and activities
to areas that will minimize impact on fish and
wildlife, their habitat, and the environment.
(D) Utilizing existing facilities wherever
practicable.
(E) Enhancing compatibility between wildlife values
and development activities.
(g) Access to Public Lands.--The Secretary shall--
(1) manage public lands in the Coastal Plain subject to
subsections (a) and (b) of section 811 of the Alaska National
Interest Lands Conservation Act (16 U.S.C. 3121); and
(2) ensure that local residents shall have reasonable
access to public lands in the Coastal Plain for traditional
uses.
SEC. 6108. EXPEDITED JUDICIAL REVIEW.
(a) Filing of Complaint.--
(1) Deadline.--Subject to paragraph (2), any complaint
seeking judicial review of any provision of this subtitle or
any action of the Secretary under this subtitle shall be filed
in any appropriate district court of the United States--
(A) except as provided in subparagraph (B), within
the 90-day period beginning on the date of the action
being challenged; or
(B) in the case of a complaint based solely on
grounds arising after such period, within 90 days after
the complainant knew or reasonably should have known of
the grounds for the complaint.
(2) Venue.--Any complaint seeking judicial review of an
action of the Secretary under this subtitle may be filed only
in the United States Court of Appeals for the District of
Columbia.
(3) Limitation on scope of certain review.--Judicial review
of a Secretarial decision to conduct a lease sale under this
subtitle, including the environmental analysis thereof, shall
be limited to whether the Secretary has complied with the terms
of this subtitle and shall be based upon the administrative
record of that decision. The Secretary's identification of a
preferred course of action to enable leasing to proceed and the
Secretary's analysis of environmental effects under this
subtitle shall be presumed to be correct unless shown otherwise
by clear and convincing evidence to the contrary.
(b) Limitation on Other Review.--Actions of the Secretary with
respect to which review could have been obtained under this section
shall not be subject to judicial review in any civil or criminal
proceeding for enforcement.
SEC. 6109. FEDERAL AND STATE DISTRIBUTION OF REVENUES.
(a) In General.--Notwithstanding any other provision of law, of the
amount of adjusted bonus, rental, and royalty revenues from oil and gas
leasing and operations authorized under this subtitle--
(1) 50 percent shall be paid to the State of Alaska; and
(2) except as provided in section 6112(d) the balance shall
be deposited into the Treasury as miscellaneous receipts.
(b) Payments to Alaska.--Payments to the State of Alaska under this
section shall be made semiannually.
SEC. 6110. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.
(a) Exemption.--Title XI of the Alaska National Interest Lands
Conservation Act of 1980 (16 U.S.C. 3161 et seq.) shall not apply to
the issuance by the Secretary under section 28 of the Mineral Leasing
Act (30 U.S.C. 185) of rights-of-way and easements across the Coastal
Plain for the transportation of oil and gas.
(b) Terms and Conditions.--The Secretary shall include in any
right-of-way or easement referred to in subsection (a) such terms and
conditions as may be necessary to ensure that transportation of oil and
gas does not result in a significant adverse effect on the fish and
wildlife, subsistence resources, their habitat, and the environment of
the Coastal Plain, including requirements that facilities be sited or
designed so as to avoid unnecessary duplication of roads and pipelines.
(c) Regulations.--The Secretary shall include in regulations under
section 6103(g) provisions granting rights-of-way and easements
described in subsection (a) of this section.
SEC. 6111. CONVEYANCE.
In order to maximize Federal revenues by removing clouds on title
to lands and clarifying land ownership patterns within the Coastal
Plain, the Secretary, notwithstanding the provisions of section
1302(h)(2) of the Alaska National Interest Lands Conservation Act (16
U.S.C. 3192(h)(2)), shall convey--
(1) to the Kaktovik Inupiat Corporation the surface estate
of the lands described in paragraph 1 of Public Land Order
6959, to the extent necessary to fulfill the Corporation's
entitlement under section 12 of the Alaska Native Claims
Settlement Act (43 U.S.C. 1611) in accordance with the terms
and conditions of the Agreement between the Department of the
Interior, the United States Fish and Wildlife Service, the
Bureau of Land Management, and the Kaktovik Inupiat Corporation
effective January 22, 1993; and
(2) to the Arctic Slope Regional Corporation the remaining
subsurface estate to which it is entitled pursuant to the
August 9, 1983, agreement between the Arctic Slope Regional
Corporation and the United States of America.
SEC. 6112. LOCAL GOVERNMENT IMPACT AID AND COMMUNITY SERVICE
ASSISTANCE.
(a) Financial Assistance Authorized.--
(1) In general.--The Secretary may use amounts available
from the Coastal Plain Local Government Impact Aid Assistance
Fund established by subsection (d) to provide timely financial
assistance to entities that are eligible under paragraph (2)
and that are directly impacted by the exploration for or
production of oil and gas on the Coastal Plain under this
subtitle.
(2) Eligible entities.--The North Slope Borough, Kaktovik,
and other boroughs, municipal subdivisions, villages, and any
other community organized under Alaska State law shall be
eligible for financial assistance under this section.
(b) Use of Assistance.--Financial assistance under this section may
be used only for--
(1) planning for mitigation of the potential effects of oil
and gas exploration and development on environmental, social,
cultural, recreational and subsistence values;
(2) implementing mitigation plans and maintaining
mitigation projects;
(3) developing, carrying out, and maintaining projects and
programs that provide new or expanded public facilities and
services to address needs and problems associated with such
effects, including firefighting, police, water, waste
treatment, medivac, and medical services; and
(4) establishment of a coordination office, by the North
Slope Borough, in the City of Kaktovik, which shall--
(A) coordinate with and advise developers on local
conditions, impact, and history of the areas utilized
for development; and
(B) provide to the Committee on Resources of the
House of Representatives and the Committee on Energy
and Resources of the Senate an annual report on the
status of coordination between developers and the
communities affected by development.
(c) Application.--
(1) In general.--Any community that is eligible for
assistance under this section may submit an application for
such assistance to the Secretary, in such form and under such
procedures as the Secretary may prescribe by regulation.
(2) North slope borough communities.--A community located
in the North Slope Borough may apply for assistance under this
section either directly to the Secretary or through the North
Slope Borough.
(3) Application assistance.--The Secretary shall work
closely with and assist the North Slope Borough and other
communities eligible for assistance under this section in
developing and submitting applications for assistance under
this section.
(d) Establishment of Fund.--
(1) In general.--There is established in the Treasury the
Coastal Plain Local Government Impact Aid Assistance Fund.
(2) Use.--Amounts in the fund may be used only for
providing financial assistance under this section.
(3) Deposits.--Subject to paragraph (4), there shall be
deposited into the fund amounts received by the United States
as revenues derived from rents, bonuses, and royalties under
leases and lease sales authorized under this subtitle.
(4) Limitation on deposits.--The total amount in the fund
may not exceed $11,000,000.
(5) Investment of balances.--The Secretary of the Treasury
shall invest amounts in the fund in interest bearing government
securities.
(e) Authorization of Appropriations.--To provide financial
assistance under this section there is authorized to be appropriated to
the Secretary from the Coastal Plain Local Government Impact Aid
Assistance Fund $5,000,000 for each fiscal year.
Subtitle B--Miscellaneous Amendments Relating to Mining
SEC. 6201. FEES FOR RECORDATION AND LOCATION OF MINING CLAIMS.
(a) Dimensions of Mining Claims.--Section 2320 of the Revised
Statutes (30 U.S.C. 23) is amended by striking the second and third
sentences and inserting the following: ``A mining claim located after
May 10, 1872, whether located by one or more persons, and including a
claim located before exposure of the vein or lode, may equal, but shall
not exceed, 1,500 feet in length along the vein or lode, and shall
extend no more than 300 feet on each side of the middle of the vein at
the surface, nor shall any claim be limited by any mining regulation to
less than 25 feet on each side of the middle of the vein at the
surface, except where adverse rights existing on May 10, 1872, render
such limitation necessary.''.
(b) Rights Secured by Claim Maintenance Fees.--Section 2322 of the
Revised Statutes (30 U.S.C. 26) is amended by inserting ``(a) Rights of
Locators, Generally.--'' before the first sentence, and by adding at
the end the following:
``(b) Rights Secured by Maintenance Fees.--Prior to issuance of a
patent, timely payment of the claim maintenance fee secures the rights
of the holder of a mining claim, mill site, or tunnel site, both prior
to and after discovery of valuable mineral deposits, to use and occupy
public lands under the provisions of the general mining law of the
United States (as that term is defined in section 2324 of the Revised
Statutes) for mineral prospecting, exploration, development, mining,
milling, and processing of minerals, reclamation of the claimed lands,
and uses reasonably incident thereto. Except for the location fee and
the maintenance fees in section 2324 of the Revised Statutes (30 U.S.C.
28), and the patent prices in sections 2325, 2326, 2333, and 2337 of
the Revised Statutes (30 U.S.C. 29, 30, 37, and 42), no other fees or
fair market value assessments shall be applied to prospecting,
exploration, development, mining, processing, or reclamation, and uses
reasonably incident thereto.''.
(c) Patent Requirements.--Section 2325 of the Revised Statutes (30
U.S.C. 29) is amended--
(1) in the second sentence by striking ``, or at any time''
and inserting ``shall include a processing fee of $2,500 for
the first claim or site, and $50 for each additional claim
contained therein, and at any time''; and
(2) in the fourth sentence by inserting ``and if the
applicant has complied with the law of discovery'' after
``publication''.
(d) Mining District Regulations by Miners.--Section 2324 of the
Revised Statutes (30 U.S.C. 28) is amended to read as follows:
``Sec. 2324. (a) Authority to Make Regulations.--The miners of each
mining district may make regulations not in conflict with the laws of
the United States, or with the laws of the State or Territory in which
the district is situated, governing the location, manner of recording,
amount of work necessary to hold possession of a mining claim, subject
to the following requirements:
``(1) The location must be distinctly marked on the ground
so that its boundaries can be readily traced.
``(2) All records of mining claims made after May 10, 1872,
shall contain the name or names of the locators, the date of
the location, and such a description of the claim or claims
located by reference to some natural object or permanent
monument as will identify the claim.
``(b) Recordation of Mining Claims and Abandonment.--The locator of
an unpatented lode or placer mining claim, mill site, or tunnel site
located after October 21, 1976, pursuant to the general mining law of
the United States shall, within 90 days after the date of location of
such claim, file in the office designated by the Secretary of the
Interior a copy of the official record of the notice of location or
certificate of location, including a description of the location of the
mining claim or mill or tunnel site sufficient to locate the claimed
lands on the ground. The failure to file such instruments as required
by this subsection is deemed conclusively to constitute an abandonment
of the mining claim, mill site, or tunnel site by the owner. Such
recordation by itself shall not render valid any claim that would not
be otherwise valid under applicable law.
``(c) Location Fee.--Notwithstanding any other provision of law,
for every mining claim, mill site, or tunnel site located after the
date of the enactment of this subsection pursuant to the general mining
law of the United States, the locator shall, at the time the location
notice is recorded pursuant to subsection (b), pay a location fee of
$100 per claim. This fee shall be in addition to the first year's claim
maintenance fee required by subsection (d). Payment of the location fee
required by this subsection and the maintenance fee required by
subsection (d) secures to the locator the right to use and occupy the
public lands for purposes of the general mining law of the United
States.
``(d) Schedule of Claim Maintenance Fees.--(1) The holder of each
unpatented mining claim, mill site, or tunnel site located pursuant to
the general mining law of the United States on or after the date of the
enactment of this subsection shall pay to the Secretary of the
Interior, on or before September 1 of each year, a claim maintenance
fee per claim. Except as provided in paragraph (2), such claim
maintenance fee shall be paid in the following amounts:
``(A) $35 per claim for each of the first through fifth
maintenance years, beginning with the year the claim was
recorded.
``(B) $70 per claim for each of the sixth through tenth
maintenance years.
``(C) $125 per claim for each of the eleventh through
fifteenth maintenance years.
``(D) $150 per claim for the sixteenth maintenance year and
each year thereafter.
``(2) Notwithstanding any other provision of law, for each
unpatented mining claim located after the date of enactment of this
subsection pursuant to the general mining law of the United States from
which minerals are produced, and in lieu of the fee otherwise required
by paragraph (1), the holder shall pay to the Secretary of the Interior
an annual maintenance fee of $200 per claim.
``(3) The holder of each unpatented mining claim, mill site, or
tunnel site located pursuant to the general mining law of the United
States before the date of enactment of this subsection shall pay to the
Secretary of the Interior for such claim--
``(A) except as provided in subparagraph (B), the claim
maintenance fee that applied before such date of enactment; or
``(B) the claim maintenance fee that applies under
paragraph (1) or (2), based on the number of years since the
original location of the claim, if before the date the payment
is due the claim holder--
``(i) notifies the Secretary; and
``(ii) pays to the Secretary a transfer fee of
$100.
``(e) Adjustment of Claim Maintenance Fees.--Claim maintenance fees
under subsection (d) shall not be subject to adjustment.
``(f) Work Requirement.--(1) The holder of each unpatented mining
claim, mill site, or tunnel site located pursuant to the general mining
law of the United States after the date of enactment of this
subsection, and any holder of a claim that has transferred such claim
to the claim maintenance fee schedule under subsection (d), shall
conduct physical evaluation and development of the claim or of any
contiguous block of claims of which the claim is a part. Exploration
and mining activities conducted pursuant to a notice, approved plan of
operations, or, in the case of split estate lands, a comparable State
or county notice or approval, demonstrates compliance with this
section.
``(2) If physical evaluation of the claim is not carried out in
accordance with paragraph (1) before the end of the fifth, tenth, or
fifteenth maintenance year (beginning with the maintenance year in
which the claim is filed), respectively, the claim holder shall be
required to pay in the next maintenance year the location fee described
in subsection (c), in addition to the annual claim maintenance fee
required to be paid for the next maintenance year.
``(g) Waiver of Claim Maintenance Fee Adjustments and Work
Requirement.--If a delay in meeting the work requirements under
subsection (f) is the result of pending administrative proceedings,
rights-of-way disputes, or litigation concerning issuance or validity
of any permit or authorization required under Federal, State, or local
law for physical evaluation and development of the claim--
``(1) any increase in the claim maintenance fee that would
otherwise apply under subsection (d) and the work requirements
under subsection (f) shall be suspended for the claim; and
``(2) claim maintenance fees required to be paid each year
for the claim shall be the same as the fee that applied for the
year in which the delay first occurred, and no additional
location fee will be owed.
``(h) Time of Payment.--The claim maintenance fee required under
subsection (d) for any maintenance year shall be paid before the
commencement of the maintenance year, except that, for the maintenance
year in which the location is made the locator shall pay the claim
maintenance fee and the location fee imposed under subsection (c) at
the time the location notice is recorded with the Bureau of Land
Management. The Director of the Bureau of Land Management, after
consultation with the Governor of Alaska and by not later than 1 year
after the date of enactment of this subsection, may establish a claim
maintenance fee filing date for Alaska claim holders that is not later
than 60 days after September 1.
``(i) Small Miner Claim Maintenance Fee.--(1) In the case of a
claim for which the holder certifies in writing to the Secretary that,
on the date the payment of any claim maintenance fee under this section
was due, the claim holder and all related parties held not more than 10
mining claims, mill sites, or tunnel sites, or any combination thereof,
on public lands--
``(A) the claim maintenance fee shall be $25 per
claim per year for the life of the claim or site held
by the claim holder; and
``(B) subsection (f) shall not apply.
``(2) In this subsection:
``(A) With respect to any claim holder, the term `related
party' means--
``(i) the spouse and dependent children (as defined
in section 152 of the Internal Revenue Code of 1986 (26
U.S.C. 152), as in effect on the date of the enactment
of this paragraph of the claim holder; and
``(ii) a person who controls, is controlled by, or
is under common control with the claim holder.
``(B) The terms `control', `controls', and `controlled'
include actual control, legal control, and the power to
exercise control, through or by common directors, officers,
stockholders, a voting trust, or a holding company or
investment company, or any other means.
``(j) Failure to Pay.--(1) Failure to pay a claim maintenance fee
or a location fee for an unpatented mining claim as required by this
section shall subject an unpatented mining claim, mill site, or tunnel
site to forfeiture by the claim holder as provided in this subsection.
``(2) The Secretary of the Interior shall provide the claim holder
with notice of the failure and the opportunity to cure within 45
calendar days after the claim holder's receipt of the notice.
``(3) The claim holder must, within such 45-day period, pay twice
the amount of maintenance fee that would otherwise have been required
to be timely paid. The Secretary of the Interior shall specify the
amount that must be paid in the notice under paragraph (2).
``(4) Failure by the claim holder to make a timely and proper
payment in the amount specified in the notice by the Secretary of the
Interior, within 45 days after the claim holder's receipt of the
notice, shall constitute a forfeiture of the mining claim, mill site,
or tunnel site by the claim holder by operation of law.
``(k) Failure of Co-Owner to Contribute.--Upon the failure of any
one of several co-owners of a claim to contribute the co-owner's
proportion of any claim maintenance fee required by this section, the
co-owners who have paid the claim maintenance fee, at the expiration of
the year in which any unpaid amount was due, may give such delinquent
co-owner personal notice in writing or notice by publication in the
newspaper of record for the county in which the land that is subject to
the claim or mill site is located, at least once a week for 90 days. If
at the expiration of such 90-day period such delinquent co-owner fails
or refuses to contribute the co-owner's proportion of the claim
maintenance fee required by this section, the co-owner's interest in
the claim shall become the property of the other co-owners who have
paid the claim maintenance fee. The co-owners who have assumed the
interest in the claims shall notify the Secretary of the Interior
within 30 days of the assumption.
``(l) Oil Shale Claims Subject to Claim Maintenance Fees Under
Energy Policy Act of 1992.-- This section shall not apply to any oil
shale claim for which a fee is required to be paid under section
2511(e)(2) of the Energy Policy Act of 1992 (30 U.S.C. 242).
``(m) General Mining Law of the United States Defined; Rule of
Construction.--(1) In this section the term `general mining law of the
United States' means the provisions of law codified in chapters 2, 12,
12A, 15, and 16 of title 30, United States Code, and in sections 161
and 162 of such title.
``(2) Subsections (b) and (c) shall be construed in accordance with
judicial decisions under section 314 of the Federal Land Policy and
Management Act of 1976, as in effect before the enactment of those
subsections.''.
(e) Conforming Amendments.--
(1) The Federal Land Policy and Management Act of 1976 is
amended--
(A) by striking section 314 (43 U.S.C. 1744);
(B) in the table of contents preceding title I by
striking the item relating to section 314; and
(C) in section 302(a) by striking ``section 314,
section 603,'' and inserting ``section 603''.
(2) Section 22 of the Alaska Native Claims Settlement Act
is amended by striking ``and section 314 of the Federal Land
Policy and Management Act of 1976 (43 U.S.C. 1744)''.
(3) Section 31(f) of the Mineral Leasing Act (30 U.S.C.
188(f)) is amended by striking ``section 314 of the Federal
Land Policy and Management Act of 1976 (43 U.S.C. 1744)'' and
inserting ``subsections (b) and (c) of section 2320 of the
Revised Statutes (30 U.S.C. 23)''.
(4) Section 2511(e) of the Energy Policy Act of 1992 (30
U.S.C. 242(e)) is amended by striking the last sentence.
SEC. 6202. PATENTS FOR MINING OR MILL SITE CLAIMS.
(a) Repeal of Limitation on Use of Funds for Applications for
Patent.--Section 408(a) of the Department of the Interior, Environment,
and Related Agencies Appropriations Act, 2006 (Public Law 109-54) is
repealed.
(b) Payment Amounts.--The Revised Statutes are amended--
(1) in section 2325 (30 U.S.C. 29) by striking ``five
dollars per acre'' and inserting ``$1,000 per acre or fair
market value, whichever is greater'';
(2) in section 2326 (30 U.S.C. 30) by striking ``five
dollars per acre'' and inserting ``$1,000 per acre or fair
market value, whichever is greater;'';
(3) in section 2333 (30 U.S.C. 37)--
(A) by striking ``five dollars per acre'' and
inserting ``$1,000 per acre or fair market value,
whichever is greater;''; and
(B) by striking ``two dollars and fifty cents per
acre'' and inserting ``$1,000 per acre or fair market
value, whichever is greater'';
(4) in section 2337 (30 U.S.C. 42)--
(A) in subsection (a) by striking ``made at the
same rate'' and all that follows through the end of
that sentence and inserting ``at the rate of $1,000 per
acre or fair market value, whichever is greater.''; and
(B) in subsection (b) by striking ``made at the
rate'' and all that follows through the end of that
sentence and inserting ``at the rate of $1,000 per acre
or fair market value, whichever is greater.''; and
(5) in section 2325 (30 U.S.C. 29) by adding at the end the
following: ``For purposes of this section and sections 2326,
2333, and 2337 of the Revised Statutes, fair market value for
the patenting of mining claims or mill sites shall be
determined by appraisals prepared by an appraiser certified or
qualified under applicable professional criteria or State law,
in accordance with the Uniform Appraisal Standards for Federal
Land Acquisitions and the Uniform Standards of Professional
Appraisal Practice, submitted by the applicant for a patent to
the Secretary of the Interior upon application for patent, that
is completed within 120 days prior to submission of the
application for patent.''.
(c) Mineral Development Work Requirements.--Section 2325 of the
Revised Statutes (30 U.S.C. 29) is amended--
(1) by striking ``five hundred dollars' '' and inserting
``$7,500''; and
(2) by striking ``labor has been expended'' and inserting
``mineral development work has been performed''.
(d) Patent Applicants in Limbo.--If the holder of an unpatented
mining claim or mill site submitted an application for a mineral patent
and paid the patent service charges required by regulation at the time
the application was submitted, and the Secretary of the Interior did
not complete all actions to process the application before April 26,
1996, the holder of such claim may, at the holder's election, have such
application processed under rules that applied before the date of the
enactment of this Act.
(e) Alternative Valuable Mineral Deposit Criteria.--Section 2325 of
the Revised Statutes is further amended by inserting ``(a) Manner for
Obtaining Patent, Generally.--'' before the first sentence, and by
adding at the end the following:
``(b) Alternative Valuable Mineral Deposit Criteria.--
``(1) Claims subject to ongoing activities.--The holder of
an unpatented mining claim or mill site who is conducting
mining activities that meet the definition of a mine under
section 3(h) of the Federal Mine Safety and Health Act of 1972
(30 U.S.C. 802(h)) and whose activities with respect to that
claim or site are described in section 4 of such Act (30 U.S.C.
803) may receive a patent for any unpatented mining claims on
which mining activities are occurring or any mill sites, within
the boundaries of an approved plan of operations or a
comparable State or county approval. Upon confirmation by the
Secretary that minerals being mined are locatable in accordance
with Federal law and that actual sales of minerals have taken
place, all Federal lands within those boundaries are eligible
for patent upon compliance with this section and sections 2327
and 2329 of the Revised Statutes (30 U.S.C. 34, 35).
``(2) Disclosed claims and mill sites.--The holder of an
unpatented mining claim or mill site whose proven and probable
reserves are publicly disclosed in compliance with the
Securities Act of 1933 (15 U.S.C. 77a) or the Securities
Exchange Act of 1934 (15 U.S.C. 78a) may receive a patent for
any such unpatented mining claim containing such reserves or
for any mill site within the boundaries of a plan of operations
or a comparable State or county approval for such reserves. All
Federal lands within those boundaries are eligible for patent
upon compliance with this section and sections 2327 and 2329 of
the Revised Statutes (30 U.S.C. 34, 35).
``(c) Mineral Examinations.--
``(1) In general.--In order to process patent applications
in a timely and responsible manner, upon the request of a
patent applicant, the Secretary of the Interior shall allow the
applicant to fund a qualified third-party examiner from a list
maintained by the Bureau of Land Management to conduct a
mineral examination of the mining claims or mill sites
contained in a patent application as set forth in this section
and sections 2333 and 2337 of the Revised Statutes (30 U.S.C.
37, 42). The Bureau of Land Management shall have the sole
responsibility to maintain the list of qualified third-party
examiners.
``(2) Training.--The Director of the Bureau of Land
Management shall provide training in the conduct of mineral
examinations to qualified individuals. The Director may charge
fees to cover the costs of the training.
``(3) Qualified third-party examiner defined.--In this
subsection the term `qualified third-party examiner' means a
person who is a registered geologist or registered professional
mining engineer licensed to practice within the State in which
the claims are located.
``(d) Disposition of Proceeds.--The gross proceeds of conveyances
of land under this section and sections 2319, 2330, 2332, 2333, and
2337 of the Revised Statutes (30 U.S.C. 22, 36, 37, 38, 42) shall be
used as follows:
``(1) 10 percent shall be deposited into the Federal Energy
and Mineral Resource Professional Development Fund.
``(2) 20 percent shall be available to the Secretary of the
Army for use, through the Corps of Engineers, for the
Restoration of Abandoned Mine Sites Program and section 560 of
the Water Resources Development Act of 1999.
``(3) 70 percent shall be deposited into the General Fund
of the Treasury.
``(e) Issuing Patents.--If no adverse claim has been filed with the
register and the receiver of the proper land office at the expiration
of the 60-day period beginning on the date of publication of the notice
that an application for mineral patent has been filed under section
2325, 2333 and 2337 of the Revised Statutes (30 U.S.C. 29, 37, 42), the
Secretary shall issue the patent not later than 24 months after the
date on which the application for patent was filed.
``(f) Small Miner Patent Adjudication and Mineral Development Work
Requirements.--The holder of 10 claims or less who applies for a
mineral patent under this section or a direct purchase under section
2319 of the Revised Statutes (30 U.S.C. 22) shall pay one-fifth of the
processing fees and perform one-fifth of the mineral development work
required under this section and section 2319 (30 U.S.C. 22).''.
SEC. 6203. MINERAL EXAMINATIONS FOR MINING ON CERTAIN LANDS.
Section 302 of the Federal Land Policy and Management Act of 1976
(43 U.S.C. 1732) is amended by adding at the end the following:
``(e) The Secretary shall not require a mineral examination report,
otherwise required to be prepared under regulations promulgated
pursuant to this Act, to approve a plan of operations under such
regulations for mining claims and mill sites located on withdrawn lands
if such mining claims, mill sites, and blocks of such mining claims and
mill sites are contiguous to patented or unpatented mining claims or
mill sites where mineral development activities, including mining, have
been conducted as authorized by law or regulation.''.
SEC. 6204. MINERAL DEVELOPMENT LANDS AVAILABLE FOR PURCHASE.
Section 2319 of the Revised Statutes (30 U.S.C. 22) is amended--
(1) by inserting ``(a) Lands Open to Purchase by
Citizens.--'' before the first sentence; and
(2) by adding at the end the following:
``(b) Availability for Purchase.--Notwithstanding any other
provision of law and in compliance with subsection (c), the Secretary
of the Interior shall make mineral deposits and the lands that contain
them, including lands in which the valuable mineral deposit has been
depleted, available for purchase to facilitate sustainable economic
development. This subsection shall not apply with respect to any unit
of the National Park System, National Wildlife Refuge System, National
Wild and Scenic Rivers System, or National Trails System, or to any
National Conservation Area, any National Recreation Area, any National
Monument, or any unit of the National Wilderness Preservation System.
``(c) Application.--The holder of mining claims, mill sites, and
blocks of such mining claims and mill sites contiguous to patented or
unpatented mining claims or mill sites where mineral development
activities, including mining, have been conducted as authorized by law
or regulation and on which mineral development work has been performed
may apply to purchase Federal lands that are subject to the claims. The
filing of the proper application shall include such processing fees as
are required by section 2325 of the Revised Statutes (30 U.S.C. 29).
The applicant or applicants, or their predecessors must present
evidence of mineral development work performed on the Federal lands
identified and submitted for purchase. Mineral development work upon
aggregation must average not less than $7,500 per mining claim or mill
site within the Federal lands identified and applied for.
``(d) Land Surveys.--For the purpose of this section, and
notwithstanding section 2334 of the Revised Statutes (30 U.S.C. 39),
land surveys of the Federal lands applied for shall be paid for by the
applicant and shall be completed either by a land surveyor registered
in the State where the land is situated, or by such a surveyor also
designated by the Bureau of Land Management as a mineral surveyor, if
such mineral surveyors are available, willing, and able to complete
such surveys without delay at a cost comparable to the charges of
ordinary registered land surveyors.
``(e) Deadline for Conveyance; Price.--Notwithstanding any other
provision of law, and not later than one year after the date of the
approval of any survey required under subsection (d), the Secretary of
the Interior shall convey to the applicant, in return for a payment of
$1,000 per acre or fair market value, whichever is greater, all right,
title, and interest in and to the Federal land, subject to valid
existing rights and the terms and conditions of the Act of August 30,
1890 (26 Stat. 391). For purposes of this subsection, fair market value
for mineral development lands available for purchase shall be
determined by appraisals prepared by an appraiser certified or
qualified under applicable professional criteria or State law, in
accordance with the Uniform Appraisal Standards for Federal Land
Acquisitions and the Uniform Standards of Professional Appraisal
Practice, submitted by the applicant to the Secretary of the Interior
upon application for purchase, that is completed within 120 days prior
to submission of the application. Fair market value for the interest in
the land owned by the United States shall be exclusive of, and without
regard to, the mineral deposits in the land or the use of such land for
mineral activities.
``(f) Environmental Liability.--Notwithstanding any other Federal,
State or local law, the United States shall not be responsible for--
``(1) investigating or disclosing the condition of any
property to be conveyed under this section; and
``(2) environmental remediation, waste management, or
environmental compliance activities arising from its ownership,
occupancy, or management of land and interests therein conveyed
under this section with respect to conditions existing at or on
the land at the time of the conveyance.
``(g) Mineral Development Work Defined.--In this section the term
`mineral development work' means geologic, geochemical or geophysical
surveys; road building; exploration drilling, trenching, and
exploratory sampling by any other means; construction of underground
workings for the purpose of conducting exploration; mine development
work; mineral production from underground or surface mines;
environmental baseline studies; construction of environmental
protection and monitoring systems; environmental reclamation;
construction of power and water distribution facilities; engineering,
metallurgical, geotechnical, and economic feasibility studies; land
surveys; and any other work reasonably incident to mineral
development.''.
SEC. 6205. NATIONAL MINING AND MINERALS POLICY TO ENCOURAGE AND PROMOTE
THE PRODUCTIVE SECOND USE OF LANDS.
Section 101 of the Mining and Minerals Policy Act of 1970 (30
U.S.C. 21a) is amended--
(1) in the first sentence--
(A) in clause (2) by inserting ``including through
remining where appropriate'' after ``needs,'';
(B) in clause (3) by striking ``and'' after the
comma at the end; and
(C) by striking the period at the end and inserting
the following: ``, and (5) facilitate the productive
second use of lands used for mining and energy
production.'';
(2) in the second sentence by striking ``oil shale and
uranium'' and inserting ``oil shale, and uranium, whether
located onshore or offshore''; and
(3) in the third sentence--
(A) by striking ``the Secretary of the Interior''
and inserting ``the head of each Federal department and
of each independent agency''; and
(B) by striking ``his''.
SEC. 6206. REGULATIONS.
The Secretary of the Interior shall issue final regulations
implementing this subtitle by not later than 180 days after the date of
the enactment of this Act.
SEC. 6207. PROTECTION OF NATIONAL PARKS AND WILDERNESS AREAS.
Subject to valid existing rights, nothing in sections 6202, 6203,
6204, 6205, and 6206 of this subtitle shall be construed as affecting
any lands within the boundary of any unit of the National Park System,
National Wildlife Refuge System, National Wild and Scenic Rivers
System, or National Trails System, or any National Conservation Area,
any National Recreation Area, any National Monument, or any unit of the
National Wilderness Preservation System as of the date of the enactment
of this Act.
Subtitle C--Disposal of Public Lands
CHAPTER 1--DISPOSAL OF CERTAIN PUBLIC LANDS IN NEVADA
SEC. 6301. SHORT TITLE.
This chapter may be cited as the ``Northern Nevada Sustainable
Development in Mining Act''.
SEC. 6302. DEFINITIONS.
In this chapter:
(1) Claimant.--The term ``Claimant'' means Coeur Rochester,
Inc.
(2) County.--The term ``County'' means Pershing County,
Nevada.
(3) General mining law.--The term ``general mining law''
means the provisions of law codified in chapters 2, 12, 12A,
15, and 16 of title 30, United States Code, and in sections 161
and 162 of such title.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 6303. LAND CONVEYANCE.
(a) Conveyance of Land.--Notwithstanding any other provision of
law, and not later than 90 days after the date of the enactment of this
Act, the Secretary shall convey to the Claimant, in return for a
payment of $500 per acre, all right, title, and interest, subject to
the terms and conditions of subsection (c), in the approximately 7,000
acres of Federal lands subject to Claimant's mining claims maintained
under the general mining law and depicted on the Rochester Sustainable
Development Project map on file with the Committee on Resources of the
House of Representatives.
(b) Exemption From Review, Etc.--Any conveyance of land under this
chapter is not subject to review, consultation, or approval under any
other Federal law.
(c) Terms and Conditions of Conveyance.--
(1) No impact on legal obligations.--Conveyance of the
lands pursuant to subsection (a) shall not affect Claimant's
legal obligations to comply with applicable Federal mine
closure or mine land reclamation laws, or with any other
applicable Federal or State requirement relating to closure of
the Rochester Mine and use of the land comprising such mine,
including any requirement to prepare any environmental impact
statement under the National Environmental Policy Act of 1969.
Federal reclamation and closure obligations shall not be
construed to require removal of infrastructure identified by
Claimant as being usable by a post-mining land use.
(2) Title to materials and minerals.--Notwithstanding any
other provision of law, Claimant shall own and have title to
all spent ore, waste rock and tailings, and other materials
located on lands conveyed pursuant to subsection (a).
(3) Valid existing rights.--All lands conveyed pursuant to
subsection (a) shall be subject to valid existing rights
existing as of the date of transfer of title, and Claimant
shall succeed to the rights and obligations of the United
States with respect to any mining claim, mill site claim,
lease, right-of-way, permit, or other valid existing right to
which the property is subject.
(4) Environmental liability.--Notwithstanding any other
Federal, State or local law, the United States shall not be
responsible for--
(A) investigating or disclosing the condition of
any property to be conveyed under this chapter; and
(B) environmental remediation, waste management, or
environmental compliance activities arising from its
ownership, occupancy, or management of land and
interests therein conveyed under this chapter with
respect to conditions existing at or on the land at the
time of the conveyance.
SEC. 6304. DISPOSITION OF PROCEEDS.
The gross proceeds of conveyances of land under this chapter shall
be used as follows:
(1) Such sums as are necessary shall be used to cover 100
percent of the administrative costs, not to exceed $20,000,
incurred by the Nevada State Office and the Winnemucca Field
Office of the Bureau of Land Management in conducting the
conveyance under this chapter.
(2) $500,000 shall be paid directly to the State of Nevada
for use in the State's abandoned mined land program.
(3) $100,000 shall be paid directly to Pershing County,
Nevada.
(4) Proceeds remaining after the payments pursuant to
paragraphs (1) through (3) shall be deposited in the general
fund of the Treasury.
CHAPTER 2--DISPOSAL OF CERTAIN PUBLIC LANDS IN IDAHO
SEC. 6311. SHORT TITLE.
This chapter may be cited as the ``Central Idaho Sustainable
Development in Mining Act''.
SEC. 6312. DEFINITIONS.
In this chapter:
(1) Claimant.--The term ``Claimant'' means TDS LLC, an
affiliated company of L&W Stone Corporation.
(2) County.--The term ``County'' means Custer County,
Idaho.
(3) General mining law.--The term ``general mining law''
means the provisions of law codified in chapters 2, 12A, 15,
and 16 of title 30, United States Code, and in sections 161 and
162 of such title.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 6313. LAND CONVEYANCE.
(a) Conveyance of Land.--Notwithstanding any other provision of
law, and not later than 90 days after the date of the enactment of this
Act, the Secretary shall convey to the Claimant, in return for a
payment of $1,000 per acre, all right, title, and interest, subject to
the terms and conditions of subsection (c), in the approximately 519.7
acres of Federal lands subject to Claimant's mining claims maintained
under the general mining law and depicted as ``proposed land exchange
alignment'' on the Central Idaho Sustainable Development Project map on
file with the Committee on Resources of the House of Representatives.
(b) Exemption From Review, Etc.--Any conveyance of land under this
chapter is not subject to review, consultation, or approval under any
other Federal law.
(c) Terms and Conditions of Conveyance.--
(1) Transfer of fee title in federal lands.--
Notwithstanding any other provision of law, full fee title in
approximately 519.7 acres of Federal lands described in
subsection (a) shall be transferred to Claimant as depicted as
``proposed land exchange alignment'' on the Central Idaho
Sustainable Development Project map.
(2) Valid existing rights.--All lands conveyed pursuant to
subsection (a) shall be subject to valid existing rights
existing as of the date of transfer of title, and Claimant
shall succeed to the rights and obligations of the United
States with respect to any mining claim, mill site claim,
lease, right-of-way, permit, or other valid existing right to
which the property is subject.
(3) Environmental liability.--Notwithstanding any other
Federal, State, or local law, the United States shall not be
responsible for--
(A) investigating or disclosing the condition of
any property to be conveyed under this chapter; and
(B) environmental remediation, waste management, or
environmental compliance activities arising from its
ownership, occupancy, or management of land and
interests therein conveyed under this chapter with
respect to conditions existing at or on the land at the
time of the conveyance.
SEC. 6314. DISPOSITION OF PROCEEDS.
Within one year of the completion of the conveyance under this
chapter, the gross proceeds of the conveyance shall be used as follows:
(1) Such sums as are necessary shall be used to cover 100
percent of the administrative costs, not to exceed $15,000,
incurred by the Idaho State Office and the Challis Field Office
of the Bureau of Land Management in conducting conveyances
under this chapter.
(2) $200,000 shall be paid directly to the State of Idaho
for use in the State Parks program.
(3) $200,000 shall be paid directly to Custer County,
Idaho.
(4) Proceeds remaining after the payments pursuant to
paragraphs (1) through (3) shall be deposited in the general
fund of the Treasury.
Subtitle D--Oil Shale
SEC. 6401. OIL SHALE AND TAR SANDS AMENDMENTS.
(a) Commercial Leasing of Oil Shale and Tar Sands.--Section 369(e)
of the Energy Policy Act of 2005 (Public Law 109-58) is amended to read
as follows:
``(e) Commencement of Commercial Leasing of Oil Shale and Tar
Sand.--Not later than 365 days after publication of the final
regulation required by subsection (d), the Secretary shall hold the
first oil shale and tar sands lease sales under the regulation,
offering for lease a minimum of 35 percent of the Federal lands that
are geologically prospective for oil shale and tar sands within
Colorado, Utah, and Wyoming. The environmental impact statement
developed in support of the commercial leasing program for oil shale
and tar sands as required by subsection (c) is deemed to provide
adequate environmental analysis for all oil shale and tar sands lease
sales conducted within the first 10 years after promulgation of the
regulation, and such sales shall not be subject to further
environmental analysis.''.
(b) Repeal of Requirement to Establish Payments.--Section 369(o) of
the Energy Policy Act of 2005 (Public Law 109-58; 119 Stat. 728; 42
U.S.C. 15927) is repealed.
(c) Treatment of Revenues.--Section 21 of the Mineral Leasing Act
(30 U.S.C. 241) is amended by adding at the end the following:
``(e) Revenues.--
``(1) In general.--Notwithstanding the provisions of
section 35, all revenues received from and under an oil shale
or tar sands lease shall be disposed of as provided in this
subsection.
``(2) Royalty rates for commercial leases.--
``(A) Initial production.--For the first 10 years
after initial production under each oil shale or tar
sands lease issued under the commercial leasing program
established under subsection (d), the Secretary shall
set the royalty rate at not less than 1 percent nor
more than 3 percent of the gross value of production.
However, the initial production period royalty rate set
by the Secretary shall not apply to production
occurring more than 15 years after the date of issuance
of the lease.
``(B) Subsequent periods.--After the periods of
time specified in subparagraph (A), the Secretary shall
set the royalty rate on each oil shale or tar sands
lease issued under the commercial leasing program
established under subsection (d) at not less than 6
percent nor more than 9 percent of the gross value of
production.
``(C) Reduction.--The Secretary shall reduce any
royalty otherwise required to be paid under
subparagraphs (A) and (B) under any oil shale or tar
sands lease on a sliding scale based upon market price,
with a 10 percent reduction if the monthly average
price of NYMEX West Texas Intermediate crude oil at
Cushing, Oklahoma, (WTI) drops below $50 (in 2005
dollars) for the month in which the production is sold,
and an 80 percent reduction if the monthly average
price of WTI drops below $30 (in 2005 dollars) for the
month in which the production is sold.
``(3) Disposition of revenues.--
``(A) Deposit.--The Secretary shall deposit into a
separate account in the Treasury all revenues derived
from any oil shale or tar sands lease.
``(B) Allocations to states and local political
subdivisions.--The Secretary shall allocate 50 percent
of the revenues deposited into the account established
under subparagraph (A) to the State within the
boundaries of which the leased lands are located, with
a portion of that to be paid directly by the Secretary
to the State's local political subdivisions as provided
in this paragraph.
``(C) Transmission of allocations.--
``(i) In general.--Not later than the last
business day of the month after the month in
which the revenues were received, the Secretary
shall transmit--
``(I) to each State two-thirds of
such State's allocations under
subparagraph (B), and in accordance
with clauses (ii) and (iii) to certain
county-equivalent and municipal
political subdivisions of such State a
total of one-third of such State's
allocations under subparagraph (B),
together with all accrued interest
thereon; and
``(II) the remaining balance of
such revenues deposited into the
account that are not allocated under
subparagraph (B), together with
interest thereon, shall be transmitted
to the miscellaneous receipts account
of the Treasury, except that until a
lease has been in production for 10
years 80 percent of such remaining
balance derived from a lease shall be
paid in accordance with subclause (I).
``(ii) Allocations to certain county-
equivalent political subdivisions.--The
Secretary shall under clause (i)(I) make
equitable allocations of the revenues to
county-equivalent political subdivisions that
the Secretary determines are closely associated
with the leasing and production of oil shale
and tar sands, under a formula that the
Secretary shall determine by regulation.
``(iii) Allocations to municipal political
subdivisions.--The initial allocation to each
county-equivalent political subdivision under
clause (ii) shall be further allocated to the
county-equivalent political subdivision and any
municipal political subdivisions located
partially or wholly within the boundaries of
the county-equivalent political subdivision on
an equitable basis under a formula that the
Secretary shall determine by regulation.
``(D) Investment of deposits.--The deposits in the
Treasury account established under this section shall
be invested by the Secretary of the Treasury in
securities backed by the full faith and credit of the
United States having maturities suitable to the needs
of the account and yielding the highest reasonably
available interest rates as determined by the Secretary
of the Treasury.
``(E) Use of funds.--A recipient of funds under
this subsection may use the funds for any lawful
purpose as determined by State law. Funds allocated
under this subsection to States and local political
subdivisions may be used as matching funds for other
Federal programs without limitation. Funds allocated to
local political subdivisions under this subsection may
not be used in calculation of payments to such local
political subdivisions under programs for payments in
lieu of taxes or other similar programs.
``(F) No accounting required.--No recipient of
funds under this subsection shall be required to
account to the Federal Government for the expenditure
of such funds, except as otherwise may be required by
law.
``(4) Definitions.--In this subsection:
``(A) County-equivalent political subdivision.--The
term `county-equivalent political subdivision' means a
political jurisdiction immediately below the level of
State government, including a county, parish, borough
in Alaska, independent municipality not part of a
county, parish, or borough in Alaska, or other
equivalent subdivision of a State.
``(B) Municipal political subdivision.--The term
`municipal political subdivision' means a municipality
located within and part of a county, parish, borough in
Alaska, or other equivalent subdivision of a State.''.
Subtitle E--Ocean Energy Resources
SEC. 6501. SHORT TITLE.
This subtitle may be cited as the ``Ocean State Options Act of
2005''.
SEC. 6502. POLICY.
It is the policy of the United States that--
(1) Adjacent States are required by the circumstances to
commit significant resources in support of exploration,
development, and production activities for mineral resources on
the outer Continental Shelf, and it is fair and proper for a
portion of the receipts from such activities to be shared with
Adjacent States and their local coastal governments;
(2) the existing laws governing the leasing and production
of the mineral resources of the outer Continental Shelf have
reduced the production of mineral resources, have preempted
Adjacent States from being sufficiently involved in the
decisions regarding the allowance of mineral resource
development, and have been harmful to the national interest;
(3) the national interest is served by granting the
Adjacent States more options related to whether or not mineral
leasing should occur in the outer Continental Shelf within
their Adjacent Zones;
(4) it is not reasonably foreseeable that exploration of a
leased tract located more than 25 miles seaward of the
coastline, development and production of a natural gas
discovery located more than 25 miles seaward of the coastline,
or development and production of an oil discovery located more
than 50 miles seaward of the coastline will adversely affect
resources near the coastline;
(5) transportation of oil from a leased tract might
reasonably be foreseen, under limited circumstances, to have
the potential to adversely affect such resources if the oil is
within 50 miles of the coastline, but such potential to
adversely affect such resources is likely no greater, and
probably less, than the potential impacts from tanker
transportation because tanker spills usually involve large
releases of oil over a brief period of time; and
(6) among other bodies of inland waters, the Great Lakes,
Long Island Sound, Delaware Bay, Chesapeake Bay, Albemarle
Sound, San Francisco Bay, and Puget Sound are not part of the
outer Continental Shelf, and are not subject to leasing by the
Federal Government for the exploration, development, and
production of any mineral resources that might lie beneath
them.
SEC. 6503. DEFINITIONS UNDER THE OUTER CONTINENTAL SHELF LANDS ACT.
Section 2 of the Outer Continental Shelf Lands Act (43 U.S.C. 1331)
is amended--
(1) by amending paragraph (f) to read as follows:
``(f) The term `affected State' means the Adjacent State.'';
(2) by striking the semicolon at the end of each of
paragraphs (a) through (o) and inserting a period;
(3) by striking ``; and'' at the end of paragraph (p) and
inserting a period;
(4) by adding at the end the following:
``(r) The term `Adjacent State' means, with respect to any program,
plan, lease sale, leased tract or other activity, proposed, conducted,
or approved pursuant to the provisions of this Act, any State the laws
of which are declared, pursuant to section 4(a)(2), to be the law of
the United States for the portion of the outer Continental Shelf on
which such program, plan, lease sale, leased tract or activity
appertains or is, or is proposed to be, conducted. For purposes of this
paragraph, the term `State' includes Puerto Rico and the other
Territories of the United States.
``(s) The term `Adjacent Zone' means, with respect to any program,
plan, lease sale, leased tract, or other activity, proposed, conducted,
or approved pursuant to the provisions of this Act, the portion of the
outer Continental Shelf for which the laws of a particular Adjacent
State are declared, pursuant to section 4(a)(2), to be the law of the
United States.
``(t) The term `miles' means statute miles.
``(u) The term `coastline' has the same meaning as the term `coast
line' as defined in section 2(c) of the Submerged Lands Act (43 U.S.C.
1301(c)).
``(v) The term `Neighboring State' means a coastal state having a
common boundary at the coastline with the Adjacent State; and''.
(5) in paragraph (a), by inserting after ``control'' the
following: ``or lying within the United States exclusive
economic zone adjacent to the Territories of the United
States''.
SEC. 6504. DETERMINATION OF ADJACENT ZONES AND PLANNING AREAS.
Section 4(a)(2)(A) of the Outer Continental Shelf Lands Act (43
U.S.C. 1333(a)(2)(A)) is amended in the first sentence by striking ``,
and the President'' and all that follows through the end of the
sentence and inserting the following: ``. The lines extending seaward
and defining each State's Adjacent Zone, and each OCS Planning Area,
are as indicated on the maps for each outer Continental Shelf region
entitled `Alaska OCS Region State Adjacent Zone and OCS Planning
Areas', `Pacific OCS Region State Adjacent Zones and OCS Planning
Areas', `Gulf of Mexico OCS Region State Adjacent Zones and OCS
Planning Areas', and `Atlantic OCS Region State Adjacent Zones and OCS
Planning Areas', all of which are dated September 2005 and on file in
the Office of the Director, Minerals Management Service.''.
SEC. 6505. ADMINISTRATION OF LEASING.
Section 5 of the Outer Continental Shelf Lands Act (43 U.S.C. 1334)
is amended by adding at the end the following:
``(k) Voluntary Partial Relinquishment of a Lease.--Any lessee of a
producing lease may relinquish to the Secretary any portion of a lease
that the owner has no interest in producing and that the Secretary
finds is geologically prospective. In return for any such
relinquishment, the Secretary shall provide to the owner a royalty
incentive in accordance with regulations promulgated by the Secretary
to carry out this subsection. The Secretary shall publish final
regulations implementing this subsection within 365 days after the date
of the enactment of the Ocean State Options Act of 2005.
``(l) Natural Gas Lease Regulations.--Not later than October 1,
2006, the Secretary shall publish a final regulation that shall--
``(1) establish procedures for entering into natural gas
leases;
``(2) ensure that natural gas leases are only available for
tracts on the outer Continental Shelf that are wholly within
125 miles of the coastline within an area withdrawn from
disposition by leasing on the day after the date of enactment
of the Ocean State Options Act of 2005;
``(3) provide that natural gas leases shall contain the
same rights and obligations established for oil and gas leases,
except as otherwise provided in the Ocean State Options Act of
2005;
``(4) provide that, in reviewing the adequacy of bids for
natural gas leases, the value of any crude oil estimated to be
contained within any tract shall be excluded;
``(5) provide that any crude oil produced from a well and
reinjected into the leased tract shall not be subject to
payment of royalty, and that the Secretary shall consider, in
setting the royalty rates for a natural gas lease, the
additional cost to the lessee of not producing any crude oil;
and
``(6) provide that any Federal law that applies to an oil
and gas lease on the outer Continental Shelf shall apply to a
natural gas lease unless otherwise clearly inapplicable.''.
SEC. 6506. GRANT OF LEASES BY SECRETARY.
Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337)
is amended--
(1) in subsection (a)(1) by inserting after the first
sentence the following: ``Further, the Secretary may grant
natural gas leases in a manner similar to the granting of oil
and gas leases and under the various bidding systems available
for oil and gas leases.'';
(2) by adding at the end of subsection (b) the following:
``The Secretary may issue more than one lease for a given tract if each
lease applies to a separate and distinct range of vertical depths,
horizontal surface area, or a combination of the two. The Secretary may
issue regulations that the Secretary determines are necessary to manage
such leases consistent with the purposes of this Act.''.
(3) in subsection (p)(2)(B)--
(A) by striking ``27'' and inserting ``50''; and
(B) by striking ``15'' and inserting ``200'';
(4) by adding at the end the following:
``(q) Natural Gas Leases.--
``(1) Right to produce natural gas.--A lessee of a natural
gas lease shall have the right to produce the natural gas from
a natural gas leased tract if the Secretary estimates that the
discovered field has at least 40 percent of the economically
recoverable Btu content of the field contained within natural
gas and such natural gas is economical to produce.
``(2) Right to produce crude oil.--A lessee of a natural
gas lease may produce crude oil from the lease unless the
Governor and the legislature of the Adjacent State object to
such production within 180 days after receipt of written notice
from the lessee of intent to produce crude oil from the lease.
If the leased tract is located within 50 miles of the nearest
point on the coastline of a Neighboring State, the Governor and
legislature of the Neighboring State shall also receive such
notice and have the right to object to such production within
180 days after receipt of such notice.
``(3) Estimates of btu content.--The Secretary shall make
estimates of the natural gas Btu content of discovered fields
on a natural gas lease only after the completion of at least
one exploration well, the data from which has been tied to the
results of a three-dimensional seismic survey of the field. The
Secretary may not require the lessee to further delineate any
discovered field prior to making such estimates.
``(4) Transportation of crude oil.--If an Adjacent State or
any applicable Neighboring State does not object to production
of crude oil from a natural gas lease, the lessee shall be
permitted to transport the crude oil from the leased tract
through Adjacent State waters, and Neighboring State waters if
applicable, to facilities onshore in the Adjacent State, and
Neighboring State if applicable, unless the lessee agreed to
other arrangements with the Adjacent State or Neighboring
State, or both.
``(5) Repurchase of certain natural gas leases.--Upon
request of the lessee and certification by the Secretary of the
Interior that a natural gas lease contains all or part of a
commercial oil and gas discovery that is not allowed to be
produced because it does not meet the standard set in paragraph
(1), the Secretary of the Treasury shall repurchase the lease
by issuance of a check or electronic payment from OCS Receipts
to the lessee in full compensation for the repurchase. The
Secretary shall recoup from the State and local governments any
funds previously shared with them that were derived from the
repurchased lease. Such recoupment shall only be from the State
and local governments' shares of OCS receipts that are payable
after the date of repurchase.
``(6) Amount of compensation.--Repurchase compensation for
each lease repurchased under the authority of this section
shall be in the amount of the lesser of the original bonus bid
paid for the lease or, if the lessee is not the original
lessee, the compensation paid by the current lessee to obtain
its interest in the lease. In addition, the lessee shall be
compensated for any expenses directly attributable to the lease
that the lessee incurs after acquisition of its interest in the
lease to be repurchased, including rentals, seismic acquisition
costs, drilling costs, and other reasonable expenses on the
lease, including expenses incurred in the repurchase process,
to the extent that the lessee has not previously been
compensated by the United States for such expenses. The lessee
shall not be compensated for general overhead expenses or
employee salaries.
``(7) Priority right to obtain future oil and gas lease.--
The lessee, or a designee of the lessee, of a repurchased
natural gas leased tract shall have the right to repurchase
such tract as an oil and gas lease, on a noncompetitive basis,
by repaying the amount received by the lessee if the tract is
made available for lease under an oil and gas lease within 30
years after the repurchase.
``(8) Definition of natural gas.--For purposes of a natural
gas lease, natural gas means natural gas and all substances
produced in association with gas, including, but not limited
to, hydrocarbon liquids (other than crude oil) that are
obtained by the condensation of hydrocarbon vapors and separate
out in liquid form from the produced gas stream.
``(r) Removal of Restrictions on Joint Bidding in Certain Areas of
the Outer Continental Shelf.--Restrictions on joint bidders shall no
longer apply to tracts located in the Alaska OCS Region. Such
restrictions shall not apply to tracts in other OCS regions determined
to be `frontier tracts' or otherwise `high cost tracts' under final
regulations that shall be published by the Secretary by not later than
365 days after the date of the enactment of the Ocean State Options Act
of 2005.'';
(5) by striking subsection (a)(3)(A) and redesignating the
subsequent subparagraphs as subparagraphs (A) and (B),
respectively;
(6) in subsection (a)(3)(A) (as so redesignated) by
striking ``In the Western'' and all that follows through ``the
Secretary'' the first place it appears and inserting ``The
Secretary''; and
(7) effective October 1, 2013, in subsection (g)--
(A) by striking all after ``(g)'', except paragraph
(3);
(B) by striking the last sentence of paragraph (3);
and
(C) by striking ``(3)''.
SEC. 6507. DISPOSITION OF RECEIPTS.
Section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338)
is amended--
(1) by designating the existing text as subsection (a);
(2) in subsection (a) (as so designated) by inserting ``,
if not paid as otherwise provided in this title'' after
``receipts''; and
(3) by adding the following:
``(b) Treatment of OCS Receipts From Tracts Completely Within 125
Miles of the Coastline.--
``(1) Deposit.--The Secretary shall deposit into a separate
account in the Treasury the portion of OCS Receipts for each
fiscal year that will be shared under paragraphs (2) and (3).
``(2) Receipts sharing beginning october 1, 2010.--
``(A) Beginning October 1, 2010, the Secretary
shall share OCS Receipts derived from the following
areas:
``(i) Lease tracts located on portions of
the Gulf of Mexico OCS Region completely within
125 miles of any coastline that are available
for leasing under the 2002-2007 5-Year Oil and
Gas Leasing Program in effect prior to the date
of the enactment of the Ocean State Options Act
of 2005.
``(ii) Lease tracts in production prior to
January 1, 2006, completely within 125 miles of
any coastline located on portions of the OCS
that were not available for leasing under the
2002-2007 5-Year OCS Oil and Gas Leasing
Program in effect prior to the date of the
enactment of the Ocean State Options Act of
2005.
``(iii) Lease tracts for which leases are
issued prior to January 1, 2006, located in the
Alaska OCS Region completely within 125 miles
of the coastline.
``(B) The Secretary shall share the following
percentages of OCS Receipts from the leases described
in subparagraph (A) derived during the fiscal year
indicated:
``(i) For fiscal year 2011, 4.5 percent.
``(ii) For fiscal year 2012, 5.0 percent.
``(iii) For fiscal year 2013, 5.5 percent.
``(iv) For fiscal year 2014, 6.0 percent.
``(v) For fiscal year 2015, 6.5 percent.
``(vi) For fiscal year 2016, 7.5 percent.
``(vii) For fiscal year 2017, 10.0 percent.
``(viii) For fiscal year 2018, 12.5
percent.
``(ix) For fiscal year 2019, 15.0 percent.
``(x) For fiscal year 2020, 17.5 percent.
``(xi) For fiscal year 2021, 20.0 percent.
``(xii) For fiscal year 2022, 22.5 percent.
``(xiii) For fiscal year 2023, 25.0
percent.
``(xiv) For fiscal year 2024, 27.5 percent.
``(xv) For fiscal year 2025, 30.0 percent.
``(xvi) For fiscal year 2026, 32.5 percent.
``(xvii) For fiscal year 2027, 35.0
percent.
``(xviii) For fiscal year 2028, 37.5
percent.
``(xix) For fiscal year 2029 and each
subsequent fiscal year, 40.0 percent.
``(3) Receipts sharing beginning january 1, 2006.--
Beginning January 1, 2006, the Secretary shall share 40 percent
of OCS Receipts derived on and after January 1, 2006, from all
leases located completely within 125 miles of any coastline not
included within the provisions of paragraph (2) or the receipts
sharing provisions of section 8(g).
``(4) Allocations.--The Secretary shall allocate the OCS
Receipts deposited into the separate account established by
paragraph (1) that are shared under paragraphs (2) and (3) as
follows:
``(A) Bonus bids.--Deposits derived from bonus bids
from a leased tract, including interest thereon, shall
be allocated at the end of each fiscal year as follows:
``(i) 87.5 percent to the Adjacent State.
``(ii) 6.25 percent into the Treasury,
which shall be allocated to the account
established by section 6514 of the Ocean State
Options Act of 2005.
``(iii) 5 percent into the account
established by section 6523 of the Ocean State
Options Act of 2005.
``(iv) 1.25 percent into the account
established by section 6526 of the Ocean State
Options Act of 2005.
``(B) Royalties.--Deposits derived from royalties
from a leased tract, including interest thereon, shall
be allocated at the end of each fiscal year as follows:
``(i) 87.5 percent to the Adjacent State
and any other producing State or States with a
leased tract within its Adjacent Zone within
125 miles of its coastline that generated
royalties during the fiscal year, if the other
producing or States have a coastline point
within 300 miles of any portion of the leased
tract, in which case the amount allocated for
the leased tract shall be--
``(I) one-third to the Adjacent
State; and
``(II) two-thirds to each producing
State, including the Adjacent State,
inversely proportional to the distance
between the nearest point on the
coastline of the producing State and
the geographic center of the leased
tract.
``(ii) 6.25 percent into the Treasury,
which shall be allocated to the account
established by section 6514 of the Ocean State
Options Act of 2005.
``(iii) 5 percent into the account
established by section 6523 of the Ocean State
Options Act of 2005.
``(iv) 1.25 percent into the account
established by section 6526 of the Ocean State
Options Act of 2005.
``(c) Treatment of OCS Receipts From Tracts Partially or Completely
Beyond 125 Miles of the Coastline.--
``(1) Deposit.--The Secretary shall deposit into a separate
account in the Treasury the portion of OCS Receipts for each
fiscal year that will be shared under paragraphs (2) and (3).
``(2) Receipts sharing beginning october 1, 2010.--
``(A) Beginning October 1, 2010, the Secretary
shall share OCS Receipts derived from the following
areas:
``(i) Lease tracts located on portions of
the Gulf of Mexico OCS Region partially or
completely beyond 125 miles of any coastline
that are available for leasing under the 2002-
2007 5-Year Oil and Gas Leasing Program in
effect prior to the date of enactment of the
Ocean State Options Act of 2005.
``(ii) Lease tracts in production prior to
January 1, 2006, partially or completely beyond
125 miles of any coastline located on portions
of the OCS that were not available for leasing
under the 2002-2007 5-Year OCS Oil and Gas
Leasing Program in effect prior to the date of
enactment of the Ocean State Options Act of
2005.
``(iii) Lease tracts for which leases are
issued prior to January 1, 2006, located in the
Alaska OCS Region partially or completely
beyond 125 miles of the coastline.
``(B) The Secretary shall share the following
percentages of OCS Receipts from the leases described
in subparagraph (A) derived during the fiscal year
indicated:
``(i) For fiscal year 2011, 4.5 percent.
``(ii) For fiscal year 2012, 5.0 percent.
``(iii) For fiscal year 2013, 5.5 percent.
``(iv) For fiscal year 2014, 6.0 percent.
``(v) For fiscal year 2015, 6.5 percent.
``(vi) For fiscal year 2016, 7.5 percent.
``(vii) For fiscal year 2017, 10.0 percent.
``(viii) For fiscal year 2018, 12.5
percent.
``(ix) For fiscal year 2019, 15.0 percent.
``(x) For fiscal year 2020, 17.5 percent.
``(xi) For fiscal year 2021, 20.0 percent.
``(xii) For fiscal year 2022, 22.5 percent.
``(xiii) For fiscal year 2023, 25.0
percent.
``(xiv) For fiscal year 2024, 27.5 percent.
``(xv) For fiscal year 2025, 30.0 percent.
``(xvi) For fiscal year 2026, 32.5 percent.
``(xvii) For fiscal year 2027, 35.0
percent.
``(xviii) For fiscal year 2028, 37.5
percent.
``(xix) For fiscal year 2029 and each
subsequent fiscal year, 40.0 percent.
``(3) Receipts sharing beginning january 1, 2006.--
Beginning January 1, 2006, the Secretary shall share 40 percent
of OCS Receipts derived on and after January 1, 2006, from all
leases located partially or completely beyond 125 miles of any
coastline not included within the provisions of paragraph (2).
``(4) Allocations.--The Secretary shall allocate the OCS
Receipts deposited into the separate account established by
paragraph (1) that are shared under paragraphs (2) and (3) as
follows:
``(A) Bonus bids.--Deposits derived from bonus bids
from a leased tract, including interest thereon, shall
be allocated at the end of each fiscal year as follows:
``(i) 87.5 percent to the Adjacent State.
``(ii) 6.25 percent into the Treasury,
which shall be allocated to the account
established by section 6514 of the Ocean State
Options Act of 2005.
``(iii) 5 percent into the account
established by section 6523 of the Ocean State
Options Act of 2005.
``(iv) 1.25 percent into the account
established by section 6526 of the Ocean State
Options Act of 2005.
``(B) Royalties.--Deposits derived from royalties
from a leased tract, including interest thereon, shall
be allocated at the end of each fiscal year as follows:
``(i) 87.5 percent to the Adjacent State
and any other producing State or States with a
leased tract within its Adjacent Zone partially
or completely beyond 125 miles of its coastline
that generated royalties during the fiscal
year, if the other producing State or States
have a coastline point within 300 miles of any
portion of the leased tract, in which case the
amount allocated for the leased tract shall
be--
``(I) one-third to the Adjacent
State; and
``(II) two-thirds to each producing
State, including the Adjacent State,
inversely proportional to the distance
between the nearest point on the
coastline of the producing State and
the geographic center of the leased
tract.
``(ii) 6.25 percent into the account
established by section 6514 of the Ocean State
Options Act of 2005.
``(iii) 5 percent into the account
established by section 6523 of the Ocean State
Options Act of 2005.
``(iv) 1.25 percent into the account
established by section 6526 of the Ocean State
Options Act of 2005.
``(d) Special Receipts Sharing.--
``(1) Deposit.--The Secretary shall deposit into a separate
account in the Treasury the portion of OCS Receipts for each
fiscal year that will be shared under paragraphs (2) and (3).
``(2) Excess new program receipts.--
``(A) Requirement.--Beginning January 1, 2006, and
continuing through September 30, 2015, if the total
amount of OCS receipts in a fiscal year derived from
leases included within the sharing provisions of
subsections (b)(3) and (c)(3) exceeds the amount
specified in subparagraph (B), the Secretary shall
share 60 percent of the difference between such total
amount and the amount specified in subparagraph (B).
``(B) Total amount specified.--The amount specified
in this subparagraph is the following:
``(i) For fiscal year 2006, $0.
``(ii) For fiscal year 2007, $498,000,000.
``(iii) For fiscal year 2008, $260,000,000.
``(iv) For fiscal year 2009, $322,000,000.
``(v) For fiscal year 2010, $140,000,000.
``(vi) For fiscal year 2011, $93,000,000.
``(vii) For fiscal year 2012, $25,000,000.
``(viii) For fiscal year 2013,
$540,000,000.
``(ix) For fiscal year 2014, $342,000,000.
``(x) For fiscal year 2015, $481,000,000.
``(3) Extra new program area receipts.--Beginning October
1, 2015, and continuing thereafter through September 30, 2029,
the Secretary shall share an additional 20 percent of OCS
Receipts derived from leases included within the sharing
provisions of subsections (b)(3) and (c)(3) that were not
already shared under those provisions.
``(4) Allocations.--The Secretary shall allocate the OCS
Receipts deposited into the separate account established by
paragraph (1) that are shared under the provisions of
paragraphs (2) and (3) among all producing States, which shall
be allocated to each producing State based on the ratio that--
``(A) OCS Receipts derived from all leased tracts
on the Federal outer Continental Shelf that are
completely within 300 miles of the coastline of the
producing State for the fiscal year, bears to
``(B) OCS Receipts derived from all leased tracts
on the Federal outer Continental Shelf that are
completely within 300 miles of the coastlines of all
producing States for the fiscal year.
``(e) Transmission of Allocations.--
``(1) In general.--Not later than 90 days after the end of
each fiscal year, the Secretary shall transmit--
``(A) to each State two-thirds of such State's
allocations under subsections (b)(4)(A)(i),
(b)(4)(B)(i), (c)(4)(A)(i), (c)(4)(B)(i), and (d)(4)
for the immediate prior fiscal year;
``(B) to coastal county-equivalent and municipal
political subdivisions of such State a total of one-
third of such State's allocations under subsections
(b)(4)(A)(i), (b)(4)(B)(i), (c)(4)(A)(i), (c)(4)(B)(i),
and (d)(4), together with all accrued interest thereon;
and
``(C) the remaining allocations under subsections
(b)(4) and (c)(4), together with all accrued interest
thereon.
``(2) Allocations to coastal county-equivalent political
subdivisions.--The Secretary shall make an initial allocation
of the OCS Receipts to be shared under paragraph (1)(B) as
follows:
``(A) 25 percent shall be allocated based on the
ratio of such coastal county-equivalent political
subdivision's population to the coastal population of
all coastal county-equivalent political subdivisions in
the State.
``(B) 25 percent shall be allocated based on the
ratio of such coastal county-equivalent political
subdivision's coastline miles to the coastline miles of
all coastal county-equivalent political subdivisions in
the State as calculated by the Secretary. In such
calculations, coastal county-equivalent political
subdivisions without a coastline shall be considered to
have 50 percent of the average coastline miles of the
coastal county-equivalent political subdivisions that
do have coastlines.
``(C) 25 percent shall be allocated to all coastal
county-equivalent political subdivisions having a
coastline point within 300 miles of the leased tract
for which OCS Receipts are being shared based on a
formula that allocates the funds based on such coastal
county-equivalent political subdivision's relative
distance from the leased tract.
``(D) 25 percent shall be allocated to all coastal
county-equivalent political subdivisions having a
coastline point within 300 miles of the leased tract
for which OCS Receipts are being shared based on the
relative level of outer Continental Shelf oil and gas
activities in a coastal political subdivision compared
to the level of outer Continental Shelf activities in
all coastal political subdivisions in the State. The
Secretary shall define the term `outer Continental
Shelf oil and gas activities' for purposes of this
subparagraph to include, but not be limited to,
construction of vessels, drillships, and platforms
involved in exploration, production, and development on
the outer Continental Shelf; support and supply bases,
ports, and related activities; offices of geologists,
geophysicists, engineers, and other professionals
involved in support of exploration, production, and
development of oil and gas on the outer Continental
Shelf; pipelines and other means of transporting oil
and gas production from the outer Continental Shelf;
and processing and refining of oil and gas production
from the outer Continental Shelf. For purposes of this
subparagraph, if a coastal county-equivalent political
subdivision does not have a coastline, its coastal
point shall be the point on the coastline closest to
it.
``(3) Allocations to coastal municipal political
subdivisions.--The initial allocation to each coastal county-
equivalent political subdivision under paragraph (2) shall be
further allocated to the coastal county-equivalent political
subdivision and any coastal municipal political subdivisions
located partially or wholly within the boundaries of the
coastal county-equivalent political subdivision as follows:
``(A) One-third shall be allocated to the coastal
county-equivalent political subdivision.
``(B) Two-thirds shall be allocated on a per capita
basis to the municipal political subdivisions and the
county-equivalent political subdivision, with the
allocation to the latter based upon its population not
included within the boundaries of a municipal political
subdivision.
``(f) Investment of Deposits.--Amounts deposited under this section
shall be invested by the Secretary of the Treasury in securities backed
by the full faith and credit of the United States having maturities
suitable to the needs of the account in which they are deposited and
yielding the highest reasonably available interest rates as determined
by the Secretary of the Treasury.
``(g) Use of Funds.--A recipient of funds under this section may
use the funds for one or more of the following:
``(1) To reduce in-State college tuition at public
institutions of higher learning and otherwise support public
education, including career technical education.
``(2) To make transportation infrastructure improvements.
``(3) To reduce taxes.
``(4) To promote and provide for--
``(A) coastal or environmental restoration;
``(B) fish, wildlife, and marine life habitat
enhancement;
``(C) waterways maintenance;
``(D) shore protection; and
``(E) marine and oceanographic education and
research.
``(5) To improve infrastructure associated with energy
production activities conducted on the outer Continental Shelf.
``(6) To fund energy demonstration projects and supporting
infrastructure for energy projects.
``(7) For any other purpose as determined by State law.
``(h) No Accounting Required.--No recipient of funds under this
section shall be required to account to the Federal Government for the
expenditure of such funds, except as otherwise may be required by law.
Further, funds allocated under this section to States and political
subdivisions may be used as matching funds for other Federal programs.
``(i) Effect of Future Laws.--Enactment of any future Federal
statute that has the effect, as determined by the Secretary, of
restricting any Federal agency from spending appropriated funds, or
otherwise preventing it from fulfilling its pre-existing
responsibilities as of the date of enactment of the statute, unless
such responsibilities have been reassigned to another Federal agency by
the statute with no prevention of performance, to issue any permit or
other approval impacting on the OCS oil and gas leasing program, or any
lease issued thereunder, or to implement any provision of this Act
shall automatically prohibit any sharing of OCS Receipts under this
section directly with the States, and their coastal political
subdivisions, for the duration of the restriction. The Secretary shall
make the determination of the existence of such restricting effects
within 30 days of a petition by any outer Continental Shelf lessee or
producing State.
``(j) Definitions.--In this section:
``(1) Coastal county-equivalent political subdivision.--The
term `coastal county-equivalent political subdivision' means a
political jurisdiction immediately below the level of State
government, including a county, parish, borough in Alaska,
independent municipality not part of a county, parish, or
borough in Alaska, or other equivalent subdivision of a coastal
State, that lies within the coastal zone.
``(2) Coastal municipal political subdivision.--The term
`coastal municipal political subdivision' means a municipality
located within and part of a county, parish, borough in Alaska,
or other equivalent subdivision of a State, all or part of
which coastal municipal political subdivision lies within the
coastal zone.
``(3) Coastal population.--The term `coastal population'
means the population of all coastal county-equivalent political
subdivisions, as determined by the most recent official data of
the Census Bureau.
``(4) Coastal zone.--The term `coastal zone' means that
portion of a coastal State, including the entire territory of
any coastal county-equivalent political subdivision at least a
part of which lies, within 75 miles landward from the
coastline.
``(5) Bonus bids.--The term `bonus bids' means all funds
received by the Secretary to issue an outer Continental Shelf
minerals lease.
``(6) Royalties.--The term `royalties' means all funds
received by the Secretary from production of oil or natural
gas, or the sale of production taken in-kind, from an outer
Continental Shelf minerals lease.
``(7) Producing state.--The term `producing State' means an
Adjacent State having an Adjacent Zone containing leased tracts
from which OCS Receipts were derived.
``(8) OCS receipts.--The term `OCS Receipts' means bonus
bids and royalties.''.
SEC. 6508. REVIEW OF OUTER CONTINENTAL SHELF EXPLORATION PLANS.
Subsections (c) and (d) of section 11 of the Outer Continental
Shelf Lands Act (43 U.S.C. 1340) are amended to read as follows:
``(c) Plan Review; Plan Provisions.--
``(1) Except as otherwise provided in this Act, prior to
commencing exploration pursuant to any oil and gas lease issued
or maintained under this Act, the holder thereof shall submit
an exploration plan (hereinafter in this section referred to as
a `plan') to the Secretary for review which shall include all
information and documentation required under paragraphs (2) and
(3). The Secretary shall review the plan for completeness
within 10 days of submission. If the Secretary finds that the
plan is not complete, the Secretary shall notify the lessee
with a detailed explanation and require such modifications of
such plan as are necessary to achieve completeness. The
Secretary shall have 10 days to review a modified plan for
completeness. Such plan may apply to more than one lease held
by a lessee in any one region of the outer Continental Shelf,
or by a group of lessees acting under a unitization, pooling,
or drilling agreement, and the lessee shall certify that such
plan is consistent with the terms of the lease and is
consistent with all statutory and regulatory requirements in
effect on the date of issuance of the lease. The Secretary
shall have 30 days from the date the plan is deemed complete to
conduct a review of the plan. If the Secretary finds the plan
is not consistent with the lease and all such statutory and
regulatory requirements, the Secretary shall notify the lessee
with a detailed explanation of such modifications of such plan
as are necessary to achieve compliance. The Secretary shall
have 30 days to review any modified plan submitted by the
lessee. The lessee shall not take any action under the
exploration plan within the 30-day review period, or thereafter
until the plan has been modified to achieve compliance as so
notified.
``(2) An exploration plan submitted under this subsection
shall include, in the degree of detail which the Secretary may
by regulation require--
``(A) a schedule of anticipated exploration
activities to be undertaken;
``(B) a description of equipment to be used for
such activities;
``(C) the general location of each well to be
drilled; and
``(D) such other information deemed pertinent by
the Secretary.
``(3) The Secretary may, by regulation, require that such
plan be accompanied by a general statement of development and
production intentions which shall be for planning purposes only
and which shall not be binding on any party.
``(d) Plan Revisions; Conduct of Exploration Activities.--
``(1) If a significant revision of an exploration plan
under this subsection is submitted to the Secretary, the
process to be used for the review of such revision shall be the
same as set forth in subsection (c) of this section.
``(2) All exploration activities pursuant to any lease
shall be conducted in accordance with an exploration plan or a
revised plan which has been submitted to and reviewed by the
Secretary.''.
SEC. 6509. RESERVATION OF LANDS AND RIGHTS.
Section 12 of the Outer Continental Shelf Lands Act (43 U.S.C.
1341) is amended--
(1) in subsection (a) by adding at the end the following:
``The President may partially or completely revise or revoke
any prior withdrawal made by the President under the authority
of this section. The President may not revise or revoke a
withdrawal that was initiated by a petition from a State and
approved by the Secretary of the Interior under subsection (h).
A withdrawal by the President may be for a term not to exceed
10 years. In considering a potential withdrawal under this
subsection, to the maximum extent practicable the President
shall accommodate competing interests and potential uses of the
outer Continental Shelf.'';
(2) by adding at the end the following:
``(g) Option to Petition for Leasing Within Certain Areas of the
Outer Continental Shelf.--
``(1) Prohibition against leasing.--Except as otherwise
provided in this subsection, prior to June 30, 2012, the
Secretary shall not offer for leasing for oil and gas, or for
natural gas, any area withdrawn from disposition by leasing in
the Atlantic OCS Region or the Pacific OCS Region, or the Gulf
of Mexico OCS Region Eastern Planning Area, as depicted on the
map referred to within this paragraph, under the `Memorandum on
Withdrawal of Certain Areas of the United States Outer
Continental Shelf from Leasing Disposition', 34 Weekly Comp.
Pres. Doc. 1111, dated June 12, 1998, or any area not withdrawn
under that Memorandum that is included within the Gulf of
Mexico OCS Region Eastern Planning Area as indicated on the map
entitled `Gulf of Mexico OCS Region State Adjacent Zones and
OCS Planning Areas' or within the Florida Straits Planning Area
as indicated on the map entitled `Atlantic OCS Region State
Adjacent Zones and OCS Planning Areas', both of which are dated
September 2005 and on file in the Office of the Director,
Minerals Management Service.
``(2) Revocation of withdrawal.--The provisions of the
`Memorandum on Withdrawal of Certain Areas of the United States
Outer Continental Shelf from Leasing Disposition', 34 Weekly
Comp. Pres. Doc. 1111, dated June 12, 1998, are hereby revoked
and are no longer in effect regarding any areas included within
the Gulf of Mexico OCS Region Central Planning Area as
indicated on the map entitled `Gulf of Mexico OCS Region State
Adjacent Zones and OCS Planning Areas' dated September 2005 and
on file in the Office of the Director, Minerals Management
Service. The 2002-2007 5-Year Outer Continental Shelf Oil and
Gas Leasing Program is hereby amended to include the areas
added to the Gulf of Mexico OCS Region Central Planning Area by
this Act to the extent that such areas were included within the
original boundaries of proposed Lease Sale 181. The amendment
to such leasing program includes two sales in such additional
areas, one of which shall be held in January 2007 and one of
which shall be held in June 2007. The Final Environmental
Impact Statement prepared for this area for Lease Sale 181
shall be deemed sufficient for all purposes for each lease sale
in which such area is offered for lease during the 2002-2007 5-
Year Outer Continental Shelf Oil and Gas Leasing Program
without need for supplementation. Any tract only partially
added to the Gulf of Mexico OCS Region Central Planning Area by
this Act shall be eligible for leasing of the part of such
tract that is included within the Gulf of Mexico OCS Region
Central Planning Area, and the remainder of such tract that
lies outside of the Gulf of Mexico OCS Region Central Planning
Area may be developed and produced by the lessee of such
partial tract using extended reach or similar drilling from a
location on a leased area.
``(3) Petition for leasing.--
``(A) In general.--The Governor of the State, upon
concurrence of its legislature, may submit to the
Secretary a petition requesting that the Secretary make
available any area that is within the State's Adjacent
Zone, included within the provisions of paragraph (1),
and that (i) is greater than 25 miles from any point on
the coastline of a Neighboring State for the conduct of
offshore leasing, pre-leasing, and related activities
with respect to natural gas leasing; or (ii) is greater
than 50 miles from any point on the coastline of a
Neighboring State for the conduct of offshore leasing,
pre-leasing, and related activities with respect to oil
and gas leasing. The Adjacent State may also petition
for leasing any other area within its Adjacent Zone if
leasing is allowed in the similar area of the Adjacent
Zone of the applicable Neighboring State, or if not
allowed, if the Neighboring State, acting through its
Governor, expresses its concurrence with the petition.
The Secretary shall only consider such a petition upon
making a finding that leasing is allowed in the similar
area of the Adjacent Zone of the applicable Neighboring
State or upon receipt of the concurrence of the
Neighboring State. The date of receipt by the Secretary
of such concurrence by the Neighboring State shall
constitute the date of receipt of the petition for that
area for which the concurrence applies. A petition for
leasing any part of the Alabama Adjacent Zone that is a
part of the Gulf of Mexico Eastern Planning Area, as
indicated on the map entitled `Gulf of Mexico OCS
Region State Adjacent Zones and OCS Planning Areas'
which is dated September 2005 and on file in the Office
of the Director, Minerals Management Service, shall
require the concurrence of both Alabama and Florida.
``(B) Limitations on leasing.--In its petition, a
State with an Adjacent Zone that contains leased tracts
may condition oil and gas, or natural gas, new leasing
for tracts within 25 miles of the coastline by--
``(i) requiring a net reduction in the
number of production platforms;
``(ii) requiring a net increase in the
average distance of production platforms from
the coastline;
``(iii) limiting permanent surface
occupancy on new leases to areas that are more
than 10 miles from the coastline;
``(iv) limiting some tracts to being
produced from shore or from platforms located
on other tracts; or
``(v) other conditions that the Adjacent
State may deem appropriate as long as the
Secretary does not determine that production is
made economically or technically impracticable
or otherwise impossible.
``(C) Action by secretary.--Not later than 90 days
after receipt of a petition under subparagraph (A), the
Secretary shall approve the petition, unless the
Secretary determines that leasing the area would
probably cause serious harm or damage to the marine
resources of the State's Adjacent Zone. Prior to
approving the petition, the Secretary shall complete an
environmental assessment that documents the anticipated
environmental effects of leasing in the area included
within the scope of the petition.
``(D) Failure to act.--If the Secretary fails to
approve or deny a petition in accordance with
subparagraph (C) the petition shall be considered to be
approved 90 days after receipt of the petition.
``(E) Amendment of the 5-year leasing program.--
Notwithstanding section 18, within 180 days of the
approval of a petition under subparagraph (C) or (D),
the Secretary shall amend the current 5-Year Outer
Continental Shelf Oil and Gas Leasing Program to
include a lease sale or sales for the entire area
covered by the approved petition, unless there are,
from the date of approval, fewer than 12 months
remaining in the current 5-Year Leasing Program in
which case the Secretary shall include the areas
covered by the approved petition within lease sales
under the next 5-Year Leasing Program. For purposes of
amending the 5-Year Program in accordance with this
section, further consultations with States shall not be
required. The environmental assessment performed under
the provisions of the National Environmental Policy Act
of 1969 to assess the effects of approving the petition
shall be sufficient to amend the 5-Year Leasing
Program.
``(h) Option to Petition for Extension of Withdrawal From Leasing
Within Certain Areas of the Outer Continental Shelf.--
``(1) In general.--The Governor of the State, upon the
concurrence of its legislature, may submit to the Secretary
petitions requesting that the Secretary extend for a period of
time of up to 5 years for each petition the withdrawal from
leasing for all or part of any area within the State's Adjacent
Zone within 125 miles of the coastline that is subject to
subsection (g)(1). A State may petition multiple times for any
particular area but not more than once per calendar year for
any particular area. A State must submit separate petitions,
with separate votes by its legislature, for areas within 50
miles of the coastline, areas more than 50 miles but not
exceeding 100 miles from the coastline, and areas exceeding 100
miles but not exceeding 125 miles from the coastline. A
petition of a State may apply to either oil and gas leasing or
natural gas leasing, or both, and may request some areas to be
withdrawn from all leasing and some areas to be withdrawn only
from one type of leasing. A petition for extending the
withdrawal from leasing of any part of the Alabama Adjacent
Zone that is a part of the Gulf of Mexico OCS Region Eastern
Planning Area, as indicated on the map entitled `Gulf of Mexico
OCS Region State Adjacent Zones and OCS Planning Areas' which
is dated September 2005 and on file in the Office of the
Director, Minerals Management Service, may be made by either
Alabama or Florida.
``(2) Action by secretary.--The Secretary shall perform an
environmental assessment under the National Environmental
Policy Act of 1969 to assess the effects of approving the
petition under paragraph (1). Not later than 90 days after
receipt of the petition, the Secretary shall approve the
petition, unless the Secretary determines that extending the
withdrawal from leasing would probably cause serious harm or
damage to the marine resources of the State's Adjacent Zone.
The Secretary shall not approve a petition from a State that
extends the remaining period of a withdrawal of an area from
leasing for a total of more than 10 years. However, the
Secretary may approve petitions to extend the withdrawal from
leasing of any area ad infinitum, subject only to the
limitations contained in this subsection.
``(3) Failure to act.--If the Secretary fails to approve or
deny a petition in accordance with paragraph (2) the petition
shall be considered to be approved 90 days after receipt of the
petition.''.
SEC. 6510. OUTER CONTINENTAL SHELF LEASING PROGRAM.
Section 18 of the Outer Continental Shelf Lands Act (43 U.S.C.
1344) is amended--
(1) in subsection (a), by adding at the end of paragraph
(3) the following: ``The Secretary shall, in each 5-year
program, include lease sales that when viewed as a whole
propose to offer for oil and gas or natural gas leasing at
least 75 percent of the available unleased acreage within each
OCS Planning Area. Available unleased acreage is that portion
of the outer Continental Shelf that is not under lease at the
time of the proposed lease sale, and has not otherwise been
made unavailable for leasing by law.'';
(2) in subsection (c), by striking so much as precedes
paragraph (3) and inserting the following:
``(c)(1) During the preparation of any proposed leasing program
under this section, the Secretary shall consider and analyze leasing
throughout the entire Outer Continental Shelf without regard to any
other law affecting such leasing. During this preparation the Secretary
shall invite and consider suggestions from any interested Federal
agency, including the Attorney General, in consultation with the
Federal Trade Commission, and from the Governor of any coastal State.
The Secretary may also invite or consider any suggestions from the
executive of any local government in a coastal State that have been
previously submitted to the Governor of such State, and from any other
person. Further, the Secretary shall consult with the Secretary of
Defense regarding military operational needs in the outer Continental
Shelf. The Secretary shall work with the Secretary of Defense to
resolve any conflicts that might arise regarding offering any area of
the outer Continental Shelf for oil and gas or natural gas leasing. If
the Secretaries are not able to resolve all such conflicts, any
unresolved issues shall be elevated to the President for resolution.
``(2) After the consideration and analysis required by paragraph
(1), including the consideration of the suggestions received from any
interested Federal agency, the Federal Trade Commission, the Governor
of any coastal State, any local government of a coastal State, and any
other person, the Secretary shall publish in the Federal Register a
proposed leasing program accompanied by a draft environmental impact
statement prepared pursuant to the National Environmental Policy Act of
1969. After the publishing of the proposed leasing program and during
the comment period provided for on the draft environmental impact
statement, the Secretary shall submit a copy of the proposed program to
the Governor of each affected State for review and comment. The
Governor may solicit comments from those executives of local
governments in the Governor's State that the Governor, in the
discretion of the Governor, determines will be affected by the proposed
program. If any comment by such Governor is received by the Secretary
at least 15 days prior to submission to the Congress pursuant to
paragraph (3) and includes a request for any modification of such
proposed program, the Secretary shall reply in writing, granting or
denying such request in whole or in part, or granting such request in
such modified form as the Secretary considers appropriate, and stating
the Secretary's reasons therefor. All such correspondence between the
Secretary and the Governor of any affected State, together with any
additional information and data relating thereto, shall accompany such
proposed program when it is submitted to the Congress.''; and
(3) by adding at the end the following:
``(i) Projection of State and Local Government Shares of OCS
Receipts.--Concurrent with the publication of the scoping notice at the
beginning of the development of each 5-year Outer Continental Shelf oil
and gas leasing program, or as soon thereafter as possible, the
Secretary shall provide to each coastal State, and coastal political
subdivisions thereof, a best-efforts projection of the OCS Receipts
that the Secretary expects will be shared with each coastal State, and
its coastal political subdivisions, using the assumption that the
unleased tracts within the State's Adjacent Zone are fully made
available for leasing, including long-term projected OCS Receipts. In
addition, the Secretary shall include a macroeconomic estimate of the
impact of such leasing on the national economy and each State's
economy, including investment, jobs, revenues, personal income, and
other categories.''.
SEC. 6511. COORDINATION WITH ADJACENT STATES.
Section 19 of the Outer Continental Shelf Lands Act (43 U.S.C.
1345) is amended--
(1) in subsection (a) in the first sentence by inserting
``, for any tract located within the Adjacent State's Adjacent
Zone,'' after ``government''; and
(2) by adding the following:
``(f)(1) No Federal agency may permit or otherwise approve, without
the concurrence of the Adjacent State, the construction of a crude oil
or petroleum products (or both) pipeline within the part of the
Adjacent State's Adjacent Zone that is not available by law for oil and
gas or natural gas leasing, except that such a pipeline may be approved
to pass through such Adjacent Zone if at least 50 percent of the
production projected to be carried by the pipeline within its first 10
years of operation is from areas of the Adjacent States Adjacent Zone.
``(2) No State may prohibit the construction within its Adjacent
Zone or its State waters of a natural gas pipeline that will transport
natural gas produced from the outer Continental Shelf. However, an
Adjacent State may prevent a proposed natural gas pipeline landing
location if it proposes two alternate landing locations in the Adjacent
State, acceptable to the Adjacent State, located within 50 miles on
either side of the proposed landing location.''.
SEC. 6512. ENVIRONMENTAL STUDIES.
Section 20(d) of the Outer Continental Shelf Lands Act (43 U.S.C.
1346) is amended--
(1) by inserting ``(1)'' after ``(d)''; and
(2) by adding at the end the following:
``(2) For all programs, lease sales, leases, and actions under this
Act, the following shall apply regarding the application of the
National Environmental Policy Act of 1969:
``(A) Granting or directing lease suspensions and the
conduct of all preliminary activities on outer Continental
Shelf tracts, including seismic activities, are categorically
excluded from the need to prepare either an environmental
assessment or an environmental impact statement, and it shall
not be required to document why no exceptions to the
categorical exclusion apply for activities conducted under the
authority of this Act.
``(B) The environmental impact statement developed in
support of each 5-year oil and gas leasing program provides the
environmental analysis for all lease sales to be conducted
under the program and such sales shall not be subject to
further environmental analysis.
``(C) Exploration plans shall not be subject to any
requirement to prepare an environmental impact statement, and
the Secretary may find that exploration plans are eligible for
categorical exclusion due to the impacts already being
considered within an environmental impact statement or due to
mitigation measures included within the plan.
``(D) Within each OCS Planning Area, after the preparation
of the first development and production plan environmental
impact statement for a leased tract within the Area, future
development and production plans for leased tracts within the
Area shall only require the preparation of an environmental
assessment unless the most recent development and production
plan environmental impact statement within the Area was
finalized more than 10 years prior to the date of the approval
of the plan, in which case an environmental impact statement
shall be required.''.
SEC. 6513. REVIEW OF OUTER CONTINENTAL SHELF DEVELOPMENT AND PRODUCTION
PLANS.
Section 25 of the Outer Continental Shelf Lands Act (43 U.S.C.
1351(a)) is amended to read as follows:
``SEC. 25. REVIEW OF OUTER CONTINENTAL SHELF DEVELOPMENT AND PRODUCTION
PLANS.
``(a) Development and Production Plans; Submission to Secretary;
Statement of Facilities and Operation; Submission to Governors of
Affected States and Local Governments.--
``(1) Prior to development and production pursuant to an
oil and gas lease issued on or after September 18, 1978, for
any area of the outer Continental Shelf, or issued or
maintained prior to September 18, 1978, for any area of the
outer Continental Shelf, with respect to which no oil or gas
has been discovered in paying quantities prior to September 18,
1978, the lessee shall submit a development and production plan
(hereinafter in this section referred to as a `plan') to the
Secretary for review.
``(2) A plan shall be accompanied by a statement describing
all facilities and operations, other than those on the outer
Continental Shelf, proposed by the lessee and known by the
lessee (whether or not owned or operated by such lessee) that
will be constructed or utilized in the development and
production of oil or gas from the lease area, including the
location and site of such facilities and operations, the land,
labor, material, and energy requirements associated with such
facilities and operations, and all environmental and safety
safeguards to be implemented.
``(3) Except for any privileged or proprietary information
(as such term is defined in regulations issued by the
Secretary), the Secretary, within 30 days after receipt of a
plan and statement, shall--
``(A) submit such plan and statement to the
Governor of any affected State, and upon request to the
executive of any affected local government; and
``(B) make such plan and statement available to any
appropriate interstate regional entity and the public.
``(b) Development and Production Activities in Accordance With Plan
as Lease Requirement.--After enactment of the Ocean State Options Act
of 2005, no oil and gas lease may be issued pursuant to this Act in any
region of the outer Continental Shelf, unless such lease requires that
development and production activities be carried out in accordance with
a plan that complies with the requirements of this section. This
section shall also apply to leases that do not have an approved
development and production plan as of the date of enactment of the
Ocean State Options Act of 2005.
``(c) Scope and Contents of Plan.--A plan may apply to more than
one oil and gas lease, and shall set forth, in the degree of detail
established by regulations issued by the Secretary--
``(1) the general work to be performed;
``(2) a description of all facilities and operations
located on the outer Continental Shelf that are proposed by the
lessee or known by the lessee (whether or not owned or operated
by such lessee) to be directly related to the proposed
development, including the location and size of such facilities
and operations, and the land, labor, material, and energy
requirements associated with such facilities and operations;
``(3) the environmental safeguards to be implemented on the
outer Continental Shelf and how such safeguards are to be
implemented;
``(4) all safety standards to be met and how such standards
are to be met;
``(5) an expected rate of development and production and a
time schedule for performance; and
``(6) such other relevant information as the Secretary may
by regulation require.
``(d) Completeness Review of the Plan.--
``(1) Prior to commencing any activity under a development
and production plan pursuant to any oil and gas lease issued or
maintained under this Act, the lessee shall certify that the
plan is consistent with the terms of the lease and that it is
consistent with all statutory and regulatory requirements in
effect on the date of issuance of the lease. The plan shall
include all required information and documentation required
under subsection (c).
``(2) The Secretary shall review the plan for completeness
within 30 days of submission. If the Secretary finds that the
plan is not complete, the Secretary shall notify the lessee
with a detailed explanation of such modifications of such plan
as are necessary to achieve completeness. The Secretary shall
have 30 days to review a modified plan for completeness.
``(e) Review for Consistency of the Plan.--
``(1) After a determination that a plan is complete, the
Secretary shall have 120 days to conduct a review of the plan,
to ensure that it is consistent with the terms of the lease,
and that it is consistent with all such statutory and
regulatory requirements applicable to the lease. If the
Secretary finds that the plan is not consistent, the Secretary
shall notify the lessee with a detailed explanation of such
modifications of such plan as are necessary to achieve
consistency.
``(2) The Secretary shall have 120 days to review a
modified plan.
``(3) The lessee shall not conduct any activities under the
plan during any 120-day review period, or thereafter until the
plan has been modified to achieve compliance as so notified.
``(4) After review by the Secretary provided for by this
section, a lessee may operate pursuant to the plan without
further review or approval by the Secretary.
``(f) Review of Revision of the Approved Plan.--The lessee may
submit to the Secretary any revision of a plan if the lessee determines
that such revision will lead to greater recovery of oil and natural
gas, improve the efficiency, safety, and environmental protection of
the recovery operation, is the only means available to avoid
substantial economic hardship to the lessee, or is otherwise not
inconsistent with the provisions of this Act, to the extent such
revision is consistent with protection of the human, marine, and
coastal environments. The process to be used for the review of any such
revision shall be the same as that set forth in subsections (d) and
(e).
``(g) Cancellation of Lease on Failure to Submit Plan or Comply
With a Plan.--Whenever the owner of any lease fails to submit a plan in
accordance with regulations issued under this section, or fails to
comply with a plan, the lease may be canceled in accordance with
section 5(c) and (d). Termination of a lease because of failure to
comply with a plan, including required modifications or revisions,
shall not entitle a lessee to any compensation.
``(h) Production and Transportation of Natural Gas; Submission of
Plan to Federal Energy Regulatory Commission; Impact Statement.--If any
development and production plan submitted to the Secretary pursuant to
this section provides for the production and transportation of natural
gas, the lessee shall contemporaneously submit to the Federal Energy
Regulatory Commission that portion of such plan that relates to the
facilities for transportation of natural gas. The Secretary and the
Federal Energy Regulatory Commission shall agree as to which of them
shall prepare an environmental impact statement pursuant to the
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.)
applicable to such portion of such plan, or conduct studies as to the
effect on the environment of implementing it. Thereafter, the findings
and recommendations by the agency preparing such environmental impact
statement or conducting such studies pursuant to such agreement shall
be adopted by the other agency, and such other agency shall not
independently prepare another environmental impact statement or
duplicate such studies with respect to such portion of such plan, but
the Federal Energy Regulatory Commission, in connection with its review
of an application for a certificate of public convenience and necessity
applicable to such transportation facilities pursuant to section 7 of
the Natural Gas Act (15 U.S.C. 717f), may prepare such environmental
studies or statement relevant to certification of such transportation
facilities as have not been covered by an environmental impact
statement or studies prepared by the Secretary. The Secretary, in
consultation with the Federal Energy Regulatory Commission, shall
promulgate rules to implement this subsection, but the Federal Energy
Regulatory Commission shall retain sole authority with respect to rules
and procedures applicable to the filing of any application with the
Commission and to all aspects of the Commission's review of, and action
on, any such application.''.
SEC. 6514. FEDERAL ENERGY NATURAL RESOURCES ENHANCEMENT FUND ACT OF
2005.
(a) Short Title.--This section may be cited as the ``Federal Energy
Natural Resources Enhancement Fund Act of 2005''.
(b) Findings.--The Congress finds the following:
(1) Energy and minerals exploration, development, and
production on Federal onshore and offshore lands, including
bio-based fuel, natural gas, minerals, oil, geothermal, and
power from wind, waves, currents, and thermal energy, involves
significant outlays of funds by Federal and State wildlife,
fish, and natural resource management agencies for
environmental studies, planning, development, monitoring, and
management of wildlife, fish, air, water, and other natural
resources.
(2) State wildlife, fish, and natural resource management
agencies are funded primarily through permit and license fees
paid to the States by the general public to hunt and fish, and
through Federal excise taxes on equipment used for these
activities.
(3) Funds generated from consumptive and recreational uses
of wildlife, fish, and other natural resources currently are
inadequate to address the natural resources related to energy
and minerals development on Federal onshore and offshore lands.
(4) Funds available to Federal agencies responsible for
managing Federal onshore and offshore lands and Federal-trust
wildlife and fish species and their habitats are inadequate to
address the natural resources related to energy and minerals
development on Federal onshore and offshore lands.
(5) Receipts derived from sales, bonus bids, and royalties
under the mineral leasing laws of the United States are paid to
the Treasury through the Minerals Management Service of the
Department of the Interior.
(6) None of the receipts derived from sales, bonus bids,
and royalties under the minerals leasing laws of the United
States are paid to the Federal or State agencies to examine,
monitor, and manage wildlife, fish, air, water, and other
natural resources related to natural gas, oil, and mineral
exploration and development.
(c) Purposes.--It is the purpose of this section to--
(1) establish a fund for the monitoring and management of
wildlife and fish, and their habitats, and air, water, and
other natural resources related to energy and minerals
development on Federal onshore and offshore lands;
(2) make available receipts derived from sales, bonus bids,
and royalties from onshore and offshore gas, mineral, oil, and
any additional form of energy exploration and development under
the laws of the United States for the purposes of such fund;
(3) distribute funds from such fund each fiscal year to the
Secretary of the Interior and the States; and
(4) use the distributed funds to secure the necessary
trained workforce or contractual services to conduct
environmental studies, planning, development, monitoring, and
post-development management of wildlife and fish and their
habitats and air, water, and other natural resources that may
be related to bio-based fuel, gas, mineral, oil, wind, or other
energy exploration, development, transportation, transmission,
and associated activities on Federal onshore and offshore
lands, including, but not limited to--
(A) pertinent research, surveys, and environmental
analyses conducted to identify any impacts on wildlife,
fish, air, water, and other natural resources from
energy and mineral exploration, development,
production, and transportation or transmission;
(B) projects to maintain, improve, or enhance
wildlife and fish populations and their habitats or
air, water, or other natural resources, including
activities under the Endangered Species Act of 1973;
(C) research, surveys, environmental analyses, and
projects that assist in managing, including mitigating
either onsite or offsite, or both, the impacts of
energy and mineral activities on wildlife, fish, air,
water, and other natural resources; and
(D) projects to teach young people to live off the
land.
(d) Definitions.--In this section:
(1) Enhancement fund.--The term ``Enhancement Fund'' means
the Federal Energy Natural Resources Enhancement Fund
established by subsection (e).
(2) State.--The term ``State'' means the State government
agency primarily responsible for fish and wildlife trust
resources within a State.
(e) Establishment and Use of Federal Energy Natural Resources
Enhancement Fund.--
(1) Enhancement fund.--There is established in the Treasury
a separate account to be known as the ``Federal Energy Natural
Resources Enhancement Fund''.
(2) Funding.--The Secretary of the Treasury shall deposit
in the Enhancement Fund--
(A) such sums as are provided by sections
9(b)(4)(A)(ii), 9(b)(4)(B)(ii), 9(c)(4)(A)(ii), and
9(c)(4)(B)(ii) of the Outer Continental Shelf Lands
Act, as amended by this Act;
(B)(i) during the period of October 1, 2006,
through September 30, 2015, 0.5 percent of all sums
paid into the Treasury under section 35 of the Mineral
Leasing Act (30 U.S.C. 191), and
(ii) beginning October 1, 2015, and thereafter, 2.5
percent of all sums paid into the Treasury under
section 35 of the Mineral Leasing Act (30 U.S.C. 191);
and
(C)(i) during the period of October 1, 2006,
through September 30, 2015, 0.5 percent of all sums
paid into the Treasury from receipts derived from bonus
bids and royalties from other mineral leasing on public
lands, and
(ii) beginning October 1, 2015, and thereafter, 2.5
percent of all sums paid into the Treasury from
receipts derived from bonus bids and royalties from
other mineral leasing on public lands.
(3) Investments.--The Secretary of the Treasury shall
invest the amounts deposited under paragraph (2) and all
accrued interest on the amounts deposited under paragraph (2)
only in interest bearing obligations of the United States or in
obligations guaranteed as to both principal and interest by the
United States.
(4) Payment to secretary of the interior.--
(A) In general.--Beginning with fiscal year 2007,
and in each fiscal year thereafter, one-third of
amounts deposited into the Enhancement Fund, together
with the interest thereon, shall be available, without
fiscal year limitations, to the Secretary of the
Interior for use for the purposes described in (c)(4).
(B) Withdrawals and transfer of funds.--The
Secretary of the Treasury shall withdraw such amounts
from the Enhancement Fund as the Secretary of the
Interior may request, subject to the limitation in (A),
and transfer such amounts to the Secretary of the
Interior to be used, at the discretion of the Secretary
of the Interior, by the Minerals Management Service,
the Bureau of Land Management, and the United States
Fish and Wildlife Service for use for the purposes
described in subsection (c)(4).
(5) Payment to states.--
(A) In general.--Beginning with fiscal year 2007,
and in each fiscal year thereafter, two-thirds of
amounts deposited into the Enhancement Fund, together
with the interest thereon, shall be available, without
fiscal year limitations, to the States for use for the
purposes described in (c)(4).
(B) Withdrawals and transfer of funds.--Within the
first 90 days of each fiscal year, the Secretary of the
Treasury shall withdraw amounts from the Enhancement
Fund and transfer such amounts to the States based on
the proportion of all receipts that were collected the
previous fiscal year from Federal leases within the
boundaries of each State and each State's outer
Continental Shelf Adjacent Zone as determined in
accordance with section 4(a) of the Outer Continental
Shelf Lands Act (43 U.S.C. 1333(a)), as amended by this
Act.
(C) Use of payments by state.--Each State shall use
the payments made under subparagraph (B) only for
carrying out projects and programs for the purposes
described in (c)(4).
(D) Encourage use of private funds by state.--Each
State shall use the payments made under subparagraph
(B) to leverage private funds for carrying out projects
for the purposes described in (c)(4).
(f) Limitation on Use.--Amounts available under this section may
not be used for the purchase of any interest in land.
(g) Reports to Congress.--
(1) In general.--Beginning in fiscal year 2008 and
continuing for each fiscal year thereafter, the Secretary of
the Interior and each State receiving funds from the
Enhancement Fund shall submit a report to the Committee on
Energy and Natural Resources of the Senate and the Committee on
Resources of the House of Representatives.
(2) Required information.--Reports submitted to the
Congress by the Secretary of the Interior and States under this
subsection shall include the following information regarding
expenditures during the previous fiscal year:
(A) A summary of pertinent scientific research and
surveys conducted to identify impacts on wildlife,
fish, and other natural resources from energy and
mineral developments.
(B) A summary of projects planned and completed to
maintain, improve or enhance wildlife and fish
populations and their habitats or other natural
resources.
(C) A list of additional actions that assist, or
would assist, in managing, including mitigating either
onsite or offsite, or both, the impacts of energy and
mineral development on wildlife, fish, and other
natural resources.
(D) A summary of private (non-Federal) funds used
to plan, conduct, and complete the plans and programs
identified in paragraphs (2)(A) and (2)(B).
SEC. 6515. TERMINATION OF EFFECT OF LAWS PROHIBITING THE SPENDING OF
APPROPRIATED FUNDS FOR CERTAIN PURPOSES.
All provisions of existing Federal law prohibiting the spending of
appropriated funds to conduct oil and natural gas leasing and
preleasing activities for any area of the outer Continental Shelf shall
have no force or effect.
SEC. 6516. OUTER CONTINENTAL SHELF INCOMPATIBLE USE.
(a) In General.--No Federal agency may permit construction or
operation (or both) of any facility, or designate or maintain a
restricted transportation corridor or operating area on the Federal
outer Continental Shelf or in State waters, that will be incompatible
with, as determined by the Secretary of the Interior, oil and gas or
natural gas leasing and substantially full exploration and production
of tracts that are geologically prospective for oil or natural gas (or
both), unless the facility, transportation corridor, or operating area,
respectively, is to be located in an area of the outer Continental
Shelf that is unavailable for oil and gas or natural gas leasing by
operation of law.
(b) Exceptions.--The President may grant an exception to subsection
(a) after a finding that such exception is required in the national
interest.
SEC. 6517. REPURCHASE OF CERTAIN LEASES.
(a) Authority to Repurchase and Cancel Certain Leases.--The
Secretary of the Interior shall repurchase and cancel any Federal oil
and gas, geothermal, coal, oil shale, tar sands, or other mineral
lease, whether onshore or offshore, if the Secretary finds that such
lease qualifies for repurchase and cancellation under the regulations
authorized by this section.
(b) Regulations.--Not later than 365 days after the date of the
enactment of this Act, the Secretary shall publish a final regulation
stating the conditions under which a lease referred to in subsection
(a) would qualify for repurchase and cancellation, and the process to
be followed regarding repurchase and cancellation. Such regulation
shall include, but not be limited to, the following:
(1) The Secretary shall repurchase and cancel a lease after
written request by the lessee upon a finding by the Secretary
that--
(A) a request by the lessee for a required permit
or other approval complied with applicable law, except
the Coastal Zone Management Act of 1972 (16 U.S.C. 1451
et seq.), and terms of the lease and such permit or
other approval was denied;
(B) a Federal agency failed to act on a request by
the lessee for a required permit, other approval, or
administrative appeal within a regulatory or statutory
time-frame associated with the requested action,
whether advisory or mandatory, or if none, within 180
days; or
(C) a Federal agency attached a condition of
approval, without agreement by the lessee, to a
required permit or other approval if such condition of
approval was not mandated by Federal statute or
regulation in effect on the date of lease issuance, or
was not specifically allowed under the terms of the
lease.
(2) A lessee shall not be required to exhaust
administrative remedies regarding a permit request,
administrative appeal, or other required request for approval
for the purposes of this section.
(3) The Secretary shall make a final agency decision on a
request by a lessee under this section within 180 days of
request.
(4) Compensation to a lessee to repurchase and cancel a
lease under this section shall be the amount that a lessee
would receive in a restitution case for a material breach of
contract.
(5) Compensation shall be in the form of a check or
electronic transfer from the Department of the Treasury from
funds deposited into miscellaneous receipts under the authority
of the same Act that authorized the issuance of the lease being
repurchased.
(6) Failure of the Secretary to make a final agency
decision on a request by a lessee under this section within 180
days of request shall result in a 10 percent increase in the
compensation due to the lessee if the lease is ultimately
repurchased.
(c) No Prejudice.--This section shall not be interpreted to
prejudice any other rights that the lessee would have in the absence of
this section.
SEC. 6518. OFFSITE ENVIRONMENTAL MITIGATION.
Notwithstanding any other provision of law, any person conducting
activities under the Mineral Leasing Act (30 U.S.C. 181 et seq.), the
Geothermal Steam Act (30 U.S.C. 1001 et seq.), the Mineral Leasing Act
for Acquired Lands (30 U.S.C. 351 et seq.), the Weeks Act (16 U.S.C.
552 et seq.), the General Mining Act of 1872 (30 U.S.C. 22 et seq.),
the Materials Act of 1947 (30 U.S.C. 601 et seq.), or the Outer
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), may in satisfying
any mitigation requirements associated with such activities propose
mitigation measures on a site away from the area impacted and the
Secretary of the Interior shall accept these proposed measures if the
Secretary finds that they generally achieve the purposes for which
mitigation measures appertained.
SEC. 6519. AMENDMENTS TO THE MINERAL LEASING ACT.
Section 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g)) is
amended to read as follows:
``(g) Regulation of Surface-Disturbing Activities.--
``(1) Regulation of surface-disturbing activities.--The
Secretary of the Interior, or for National Forest lands, the
Secretary of Agriculture, shall regulate all surface-disturbing
activities conducted pursuant to any lease issued under this
Act, and shall determine reclamation and other actions as
required in the interest of conservation of surface resources.
``(2) Submission of exploration plan; completion review;
compliance review.--
``(A) Prior to beginning oil and gas exploration
activities, a lessee shall submit an exploration plan
to the Secretary of the Interior for review.
``(B) The Secretary shall review the plan for
completeness within 10 days of submission.
``(C) In the event the exploration plan is
determined to be incomplete, the Secretary shall notify
the lessee in writing and specify the items or
information needed to complete the exploration plan.
``(D) The Secretary shall have 10 days to review
any modified exploration plan submitted by the lessee.
``(E) To be deemed complete, an exploration plan
shall include, in the degree of detail to be determined
by the Secretary by rule or regulation--
``(i) a drilling plan containing a
description of the drilling program;
``(ii) the surface and projected completion
zone location;
``(iii) pertinent geologic data;
``(iv) expected hazards, and proposed
mitigation measures to address such hazards;
``(v) a schedule of anticipated exploration
activities to be undertaken;
``(vi) a description of equipment to be
used for such activities;
``(vii) a certification from the lessee
stating that the exploration plan complies with
all lease, regulatory and statutory
requirements in effect on the date of the
issuance of the lease;
``(viii) evidence that the lessee has
secured an adequate bond, surety, or other
financial arrangement prior to commencement of
any surface disturbing activity;
``(ix) a plan that details the complete and
timely reclamation of the lease tract; and
``(x) such other relevant information as
the Secretary may by regulation require.
``(F) Upon a determination that the exploration
plan is complete, the Secretary shall have 30 days from
the date the plan is deemed complete to conduct a
review of the plan.
``(G) If the Secretary finds the exploration plan
is not consistent with all statutory and regulatory
requirements in effect on the date of issuance of the
lease, the Secretary shall notify the lessee with a
detailed explanation of such modifications of the
exploration plan as are necessary to achieve
compliance.
``(H) The lessee shall not take any action under
the exploration plan within a 30 day review period, or
thereafter until the plan has been modified to achieve
compliance as so notified.
``(I) After review by the Secretary provided by
this subsection, a lessee may operate pursuant to the
plan without further review or approval by the
Secretary.
``(3) Plan revisions; conduct of exploration activities.--
``(A) If a significant revision of an exploration
plan under this subsection is submitted to the
Secretary, the process to be used for the review of
such revision shall be the same as set forth in
paragraph (1) of this subsection.
``(B) All exploration activities pursuant to any
lease shall be conducted in accordance with an
exploration plan that has been submitted to and
reviewed by the Secretary or a revision of such plan.
``(4) Submission of development and production plan;
completeness review; compliance review.--
``(A) Prior to beginning oil and gas development
and production activities, a lessee shall submit a
development and exploration plan to the Secretary of
the Interior. Upon submission, such plans shall be
subject to a review for completeness.
``(B) The Secretary shall review the plan for
completeness within 30 days of submission.
``(C) In the event a development and production
plan is determined to be incomplete, the Secretary
shall notify the lessee in writing and specify the
items or information needed to complete the plan.
``(D) The Secretary shall have 30 days to review
for completeness any modified development and
production plan submitted by the lessee.
``(E) To be deemed complete, a development and
production plan shall include, in the degree of detail
to be determined by the Secretary by rule or
regulation--
``(i) a drilling plan containing a
description of the drilling program;
``(ii) the surface and projected completion
zone location;
``(iii) pertinent geologic data;
``(iv) expected hazards, and proposed
mitigation measures to address such hazards;
``(v) a statement describing all facilities
and operations proposed by the lessee and known
by the lessee (whether or not owned or operated
by such lessee) that shall be constructed or
utilized in the development and production of
oil or gas from the leases areas, including the
location and site of such facilities and
operations, the land, labor, material, and
energy requirements associated with such
facilities and operations;
``(vi) the general work to be performed;
``(vii) the environmental safeguards to be
implemented in connection with the development
and production and how such safeguards are to
be implemented;
``(viii) all safety standards to be met and
how such standards are to be met;
``(ix) an expected rate of development and
production and a time schedule for performance;
``(x) a certification from the lessee
stating that the development and production
plan complies with all lease, regulatory, and
statutory requirements in effect on the date of
issuance of the lease;
``(xi) evidence that the lessee has secured
an adequate bond, surety, or other financial
arrangement prior to commencement of any
surface disturbing activity;
``(xii) a plan that details the complete
and timely reclamation of the lease tract; and
``(xiii) such other relevant information as
the Secretary may by regulation require.
``(F) Upon a determination that the development and
production plan is complete, the Secretary shall have
120 days from the date the plan is deemed complete to
conduct a review of the plan.
``(G) If the Secretary finds the development and
production plan is not consistent with all statutory
and regulatory requirements in effect on the date of
issuance of the lease, the Secretary shall notify the
lessee with a detailed explanation of such
modifications of the development and production plan as
are necessary to achieve compliance.
``(H) The lessee shall not take any action under
the development and production plan within a 120 day
review period, or thereafter until the plan has been
modified to achieve compliance as so notified.
``(5) Plan revisions; conduct of development and production
activities.--
``(A) If a significant revision of a development
and production plan under this subsection is submitted
to the Secretary, the process to be used for the review
of such revision shall be the same as set forth in
paragraph (4) of this subsection.
``(B) All development and production activities
pursuant to any lease shall be conducted in accordance
with an exploration plan that has been submitted to and
reviewed by the Secretary or a revision of such plan.
``(6) Cancellation of lease on failure to submit plan or
comply with approved plan.--Whenever the owner of any lease
fails to submit a plan in accordance with regulations issued
under this section, or fails to comply with a plan, the lease
may be canceled in accordance with section 31. Termination of a
lease because of failure to comply with a plan, including
required modifications or revisions, shall not entitle a lessee
to any compensation.''.
SEC. 6520. MINERALS MANAGEMENT SERVICE.
The bureau known as the ``Minerals Management Service'' in the
Department of the Interior shall be known as the ``National Ocean
Energy and Royalty Service''. The Director of such shall be assisted by
only one deputy director, who shall be a non-career employee within the
Senior Executive Service.
SEC. 6521. AUTHORITY TO USE DECOMMISSIONED OFFSHORE OIL AND GAS
PLATFORMS AND OTHER FACILITIES FOR MARICULTURE,
ARTIFICIAL REEF, SCIENTIFIC RESEARCH, OR OTHER USES.
(a) Short Title.--This section may be cited as the ``Rigs to Reefs
Act of 2005''.
(b) In General.--The Outer Continental Shelf Lands Act (43 U.S.C.
1301 et seq.) is amended by inserting after section 9 the following:
``SEC. 10. USE OF DECOMMISSIONED OFFSHORE OIL AND GAS PLATFORMS AND
OTHER FACILITIES FOR MARICULTURE, ARTIFICIAL REEF,
SCIENTIFIC RESEARCH, OR OTHER USES.
``(a) In General.--The Secretary shall issue regulations under
which the Secretary may authorize use of an offshore oil and gas
platform or other facility that is decommissioned from service for oil
and gas purposes for culture of marine organisms, an artificial reef,
scientific research, or any other use authorized under section 8(p).
``(b) Transfer Requirements.--The Secretary shall not allow the
transfer of a decommissioned offshore oil and gas platform or other
facility to another person unless the Secretary is satisfied that the
transferee is sufficiently bonded, endowed, or otherwise financially
able to fulfill its obligations, including but not limited to--
``(1) ongoing maintenance of the platform or other
facility;
``(2) any liability obligations that might arise;
``(3) removal of the platform or other facility if
determined necessary by the Secretary; and
``(4) any other requirements and obligations that the
Secretary may deem appropriate by regulation.
``(c) Plugging and Abandonment.--The Secretary shall ensure that
obligations of a lessee regarding the plugging and abandonment of wells
are unaffected by implementation of this section.
``(d) Potential to Petition to Opt-Out of Regulations.--An Adjacent
State acting through a resolution of its legislature, with concurrence
of its Governor, may petition to opt-out of the application of
regulations promulgated under this section to platforms and other
facilities located in the area of its Adjacent Zone within 25 miles of
the coastline. The Secretary is authorized to except such area from the
application of such regulations, and shall approve such petition,
unless the Secretary finds that approving the petition would probably
cause serious harm or damage to the marine resources of the State's
Adjacent Zone. Prior to acting on the petition, the Secretary shall
complete an environmental assessment that documents the anticipated
environmental effects of approving the petition.
``(e) Limitation on Liability.--A person that had used an offshore
oil and gas platform or other facility for oil and gas purposes and
that no longer has any ownership or control of the platform or other
facility shall not be liable under Federal law for any costs or damages
arising from such platform or other facility after the date the
platform or other facility is used for any purpose under subsection
(a), unless such costs or damages arise from--
``(1) use of the platform or other facility by the person
for development or production of oil or gas; or
``(2) another act or omission of the person.
``(f) Other Leasing and Use not Affected.--This section, and the
use of any offshore oil and gas platform or other facility for any
purpose under subsection (a), shall not affect--
``(1) the authority of the Secretary to lease any area
under this Act; or
``(2) any activity otherwise authorized under this Act.''.
(c) Deadline for Regulations.--The Secretary of the Interior shall
issue regulations under subsection (b) by not later than 180 days after
the date of the enactment of this Act.
(d) Study and Report on Effects of Removal of Platforms.--Not later
than one year after the date of enactment of this Act, the Secretary of
the Interior, in consultation with other Federal agencies as the
Secretary deems advisable, shall study and report to the Congress
regarding how the removal of offshore oil and gas platforms and other
facilities from the outer Continental Shelf would affect existing fish
stocks and coral populations.
SEC. 6522. REPEAL OF REQUIREMENT TO CONDUCT COMPREHENSIVE INVENTORY OF
OCS OIL AND NATURAL GAS RESOURCES.
The Energy Policy Act of 2005 (Public Law 109-58) is amended--
(1) by repealing section 357 (119 Stat. 720; 42 U.S.C.
15912); and
(2) in the table of contents in section 1(b), by striking
the item relating to such section 357.
SEC. 6523. MINING AND PETROLEUM SCHOOLS.
(a) Federal Energy and Mineral Resources Professional Development
Fund.--
(1) Professional development fund.--There is established in
the Treasury a separate account to be known as the ``Federal
Energy And Mineral Resources Professional Development Fund''
(in this section referred to as the ``Professional Development
Fund'').
(2) Funding.--The Secretary of the Treasury shall deposit
in the Professional Development Fund--
(A) such sums as are provided by sections
9(b)(4)(A)(iii), 9(b)(4)(B)(iii), 9(c)(4)(A)(iii), and
9(c)(4)(B)(iii) of the Outer Continental Shelf Lands
Act, as amended by this Act;
(B)(i) during the period of October 1, 2006,
through September 30, 2015, 0.4 percent of all sums
paid into the Treasury under section 35 of the Mineral
Leasing Act (30 U.S.C. 191), and
(ii) beginning October 1, 2015, and thereafter, 2.0
percent of all sums paid into the Treasury under
section 35 of the Mineral Leasing Act (30 U.S.C. 191);
(C)(i) during the period of October 1, 2006,
through September 30, 2015, 0.4 percent of all sums
paid into the Treasury from receipts derived from bonus
bids and royalties from other mineral leasing on public
lands, and
(ii) beginning October 1, 2015, and thereafter, 2.0
percent of all sums paid into the Treasury from
receipts derived from bonus bids and royalties from
other mineral leasing on public lands;
(D) donations received under paragraph (4);
(E) amounts referred to in section 2325(d)(1) of
the Revised Statutes, as amended by this Act; and
(F) funds received under section 10 of the Energy
and Mineral Schools Reinvestment Act, as amended by
this Act.
(3) Investments.--The Secretary of the Treasury shall
invest the amounts deposited under paragraph (2) and all
accrued interest on the amounts deposited under paragraph (2)
only in interest bearing obligations of the United States or in
obligations guaranteed as to both principal and interest by the
United States.
(4) Donations.--The Secretary of the Interior may solicit
and accept donations of funds for deposit into the Professional
Development Fund.
(5) Availability to secretary of the interior.--
(A) In general.--Beginning with fiscal year 2007,
and in each fiscal year thereafter, the amounts
deposited into the Professional Development Fund,
together with the interest thereon, shall be available,
without fiscal year limitations, to the Secretary of
the Interior for use to carry out the Energy and
Mineral Schools Reinvestment Act.
(B) Withdrawals and transfer of funds.--The
Secretary of the Treasury shall withdraw such amounts
from the Professional Development Fund as the Secretary
of the Interior may request and transfer such amounts
to the Secretary of the Interior to be used, at the
discretion of the Secretary to carry out the Energy and
Mineral Schools Reinvestment Act.
(b) Maintenance and Restoration of Existing and Historic Petroleum
and Mining Engineering Programs.--Public Law 98-409 (30 U.S.C. 1221 et
seq.) is amended to read as follows:
``SEC. 1. SHORT TITLE.
``This Act may be cited as the `Energy and Mineral Schools
Reinvestment Act'.
``SEC. 2. POLICY.
``It is the policy of the United States to maintain the human
capital needed to preserve and foster the economic, energy, and mineral
resources security of the United States. The petroleum and mining
engineering programs and the applied geology and geophysics programs at
State chartered schools, universities, and institutions that produce
human capital are national assets and should be assisted with Federal
funds to ensure their continued health and existence.
``SEC. 3. MAINTAINING AND RESTORING HISTORIC AND EXISTING PETROLEUM AND
MINING ENGINEERING EDUCATION PROGRAMS.
``(a) Using the funds in the Federal Energy And Mineral Resources
Professional Development Fund, the Secretary of the Interior (in this
Act referred to as the `Secretary') shall provide funds to each
historic and existing State-chartered recognized petroleum or mining
school to assist such schools, universities, and institutions in
maintaining programs in petroleum, mining, and mineral engineering
education and research. All funds shall be directed only to these
programs and shall be subject to the conditions of this section. Such
funds shall not be less than 35 percent of the annual outlay of funds
under this Act.
``(b) In this Act the term `historic and existing State-chartered
recognized petroleum or mining school' means a school, university, or
educational institution with the presence of an engineering program
meeting the specific program criteria, established by the member
societies of ABET, Inc., for petroleum, mining, or mineral engineering
and that is accredited on the date of enactment of the Ocean State
Options Act of 2005 by ABET, Inc.
``(c) It shall be the duty of each school, university, or
institution receiving funds under this section to provide for the
training of undergraduate and graduate petroleum, mining, and mineral
engineers through research, investigations, demonstrations, and
experiments. All such work shall be carried out in a manner that will
enhance undergraduate education.
``(d) Each school, university, or institution receiving funds under
this Act shall maintain the program for which the funds are provided
for 10 years after the date of the first receipt of such funds take
steps agreed to by the Secretary, to increase the number of
undergraduate students enrolled in and completing the programs of study
in petroleum, mining, and mineral engineering.
``(e) The research, investigation, demonstration, experiment, and
training authorized by this section may include development and
production of conventional and non-conventional fuel resources, the
production of metallic and non-metallic mineral resources, and the
production of stone, sand, and gravel. In all cases the work carried
out with funds made available under this Act shall include a
significant opportunity for participation by undergraduate students.
``(f) Research funded by this Act related to energy and mineral
resource development and production may include studies of petroleum,
mining, and mineral extraction and immediately related beneficiation
technology; mineral economics, reclamation technology and practices for
active operations, and the development of re-mining systems and
technologies to facilitate reclamation that fosters the ultimate
recovery of resources at abandoned petroleum, mining, and aggregate
production sites.
``(g) Grants for basic science and engineering studies and research
shall not require additional participation by funding partners. Grants
for studies to demonstrate the proof of concept for science and
engineering or the demonstration of feasibility and implementation
shall include participation by industry and may include funding from
other Federal agencies.
``(h)(1) No funds made available under this section shall be
applied to the acquisition by purchase or lease of any land or
interests therein, or the rental, purchase, construction, preservation,
or repair of any building.
``(2) Funding made available under this section may be used with
the express approval of the Secretary for proposals that will provide
for maintaining or upgrading of existing laboratories and laboratory
equipment. Funding for such maintenance shall not be used for
university overhead expenses.
``(3) Funding made available under this Act may be used for
maintaining and upgrading university-owned mines and oil and gas
drilling rigs used for undergraduate and graduate training and mine
safety training for the industry. All requests for funding such mines
and oil and gas drilling rigs must demonstrate that they have been
owned by the university for 5 years prior to the date of enactment of
the Ocean State Options Act of 2005 and have been actively used for
instructional purposes during that time.
``(4) Any funding made available under this section for research,
investigation, demonstration, experiment, or training shall not be used
for university overhead charges in excess of 10 percent of the amount
authorized by the Secretary.
``SEC. 4. FORMER PETROLEUM AND MINING ENGINEERING PROGRAMS.
``A school, university, or educational institution that formerly
met the requirements of section 3(b) of this Act immediately before the
date of the enactment of the Offshore State Options Act of 2004 shall
be eligible for funding under this Act only if it--
``(1) establishes a petroleum, mining, or mineral
engineering program that meets the specific program criteria
and is accredited as such by ABET, Inc.;
``(2) agrees to the conditions of subsections (c), (d), and
(e) of section 3 and the Secretary, as advised by the Committee
established by section 11, determines that the program will
strengthen and increase the number of nationally available,
well- qualified faculty members in petroleum, mining, and
mineral engineering; and
``(3) agrees to maintain the accredited program for 10
years after the date of the first receipt of funds under this
Act.
``SEC. 5. FUNDING OF CONSORTIA OF HISTORIC AND EXISTING SCHOOLS.
``(a) Where appropriate, the Secretary may make funds available to
consortia of schools, universities, or institutions that include the
historic and existing petroleum and mining schools to meet the
necessary expenses for purposes of--
``(1) specific energy and mineral research projects of
broad application that could not otherwise be undertaken,
including the expenses of planning and coordinating regional
petroleum, mining, and mineral engineering projects by two or
more schools; and
``(2) research into any aspects of petroleum, mining, or
mineral engineering problems that are related to the mission of
the Department of the Interior and that are considered by the
Committee to be desirable.
``(b) Each application for funds under subsection (a) shall state,
among other things, the nature of the project to be undertaken; the
period during which it will be pursued; the qualifications of the
personnel who will direct and conduct it; the estimated costs; the
importance of the project to the Nation, region, or States concerned;
its relation to other known research projects theretofore pursued or
being pursued; the extent to which the proposed project will maximize
the opportunity for the training of undergraduate petroleum, mining,
and mineral engineers; and the extent of participation by
nongovernmental sources in the project.
``(c) No funds shall be made available under this section except
for a project approved by the Secretary. All funds shall be made
available upon the basis of merit of the project, the need for the
knowledge that it is expected to produce when completed, and the
opportunity it provides for the undergraduate training of individuals
as petroleum, mining, and mineral engineers.
``SEC. 6. SUPPORT FOR SCHOOLS WITH ENERGY AND MINERAL RESOURCE PROGRAMS
IN PETROLEUM AND MINERAL EXPLORATION GEOLOGY, PETROLEUM
GEOPHYSICS, OR MINING GEOPHYSICS.
``(a) Up to 20 percent of the annual outlay of funds under this Act
may be granted to schools, universities, and institutions other than
those described in sections 3, 4, and 5.
``(b) The Secretary, as advised by the Committee established by
section 11, shall determine the eligibility of a college or university
to receive funding under this Act using criteria that include--
``(1) the presence of a substantial program of
undergraduate and graduate instruction and research in
petroleum geology, mineral exploration geology, economic
geology, mining geology, petroleum geophysics, mining
geophysics, geological engineering, or geophysical engineering
that has a demonstrated history of achievement;
``(2) evidence of institutional commitment for the purposes
of this Act that includes a significant opportunity for
participation by undergraduate students;
``(3) evidence that such school, university, or institution
has or can obtain significant industrial cooperation in
activities within the scope of this Act;
``(4) agreement by the school, university, or institution
to maintain the programs for which the funding is sought for
the 10-year period beginning on the date the school,
university, or institution first receives such funds; and
``(5) requiring that such funding shall be for the purposes
set forth in subsections (e), (f), and (g) of section 3 and
subject to the conditions set forth in section 3(h).
``SEC. 7. DESIGNATION OF FUNDS FOR SCHOLARSHIPS AND FELLOWSHIPS.
``(a) The Committee shall recommend to the Secretary the
designation and utilization of not more than 30 percent of the annual
outlay of funds under this Act for the purpose of providing
scholarships, graduate fellowships, and postdoctoral fellowships.
``(b) In order to receive a scholarship or a graduate fellowship,
an individual student must be a lawful permanent resident of the United
States or a United States citizen and must agree in writing to complete
a course of studies and receive a degree in petroleum, mining, or
mineral engineering, petroleum geology, mining and economic geology,
petroleum and mining geophysics, or mineral economics.
``(c) The regulations required by section 9 shall require that an
individual, in order to retain a scholarship or graduate fellowship,
must continue in one of the course of studies listed in subsection (b)
of this section, must remain in good academic standing, as determined
by the school, institution, or university and must allow for
reinstatement of the scholarship or graduate fellowship by the
Secretary, upon the recommendation of the school or institution. Such
regulations may also provide for recovery of funds from an individual
who fails to complete any of the courses of study listed in subsection
(b) of this section after notice that such completion is a requirement
of receipt funding under this Act.
``SEC. 8. FUNDING CRITERIA FOR INSTITUTIONS.
``(a) Funds available under this Act shall be paid at such times
and in such amounts during each fiscal year as determined by the
Secretary, and upon vouchers approved by the Secretary. Each school,
university, or institution that receives funds under this Act shall--
``(1) establish its plan to provide for the training of
individuals as petroleum or mineral engineers and scientists
under a curriculum appropriate to the field of mineral
resources and mineral engineering and related fields;
``(2) establish policies and procedures that assure that
Federal funds made available under this Act for any fiscal year
will supplement and, to the extent practicable, increase the
level of funds that would, in the absence of such Federal
funds, be made available for purposes of this Act, and in no
case supplant such funds; and
``(3) have an officer appointed by its governing authority
who shall receive and account for all funds paid under this Act
and shall make an annual report to the Secretary on or before
the first day of September of each year, on work accomplished
and the status of projects underway, together with a detailed
statement of the amounts received under this Act during the
preceding fiscal year, and of its disbursements on schedules
prescribed by the Secretary.
``(b) If any of the funds received by the authorized receiving
officer of any institute under this Act are found by the Secretary to
have been improperly diminished, lost, or misapplied, such funds shall
be recovered by the Secretary.
``(c) Schools, universities, and institutions receiving funds under
this Act are authorized and encouraged to plan and conduct programs
under this Act in cooperation with each other and with such other
agencies, business enterprises and individuals.
``SEC. 9. DUTIES OF SECRETARY.
``(a) The Secretary, acting through the Assistant Secretary for
Land and Minerals Management, shall administer this Act and, after full
consultation with other interested Federal agencies, shall prescribe
such rules and regulations as may be necessary to carry out its
provisions not later than 1 year after the enactment of the Ocean State
Options Act of 2005.
``(b) The Secretary shall furnish such advice and assistance as
will best promote the purposes of this Act, shall participate in
coordinating research initiated under this Act, shall indicate to
schools, universities, and institutions receiving funds under this Act
such lines of inquiry that seem most important, and shall encourage and
assist in the establishment and maintenance of cooperation by and
between such schools, universities, and institutions and between them
and other research organizations, the Department of the Interior, and
other Federal agencies.
``(c) On or before the first day of July of each year beginning
after the date of enactment of this sentence, schools, universities,
and institutions receiving funds under this Act shall certify
compliance with this Act. An individual granted a scholarship or
fellowship with funds provided under this Act, shall through their
respective school, university, or institution, advise the Secretary
upon completion of the course of studies and the awarding of the degree
within 30 days after the award. As needed the Secretary shall ascertain
whether the requirements of this Act have been met by schools,
universities, and institutions and individuals.
``SEC. 10. COORDINATION.
``(a) Nothing in this Act shall be construed to impair or modify
the legal relationship existing between any of the schools,
universities, and institutions under whose direction an institute is
established with funds provided under this Act and the government of
the State in which it is located. Nothing in this Act shall in any way
be construed to authorize Federal control or direction of education at
any school, university, or institution.
``(b) The programs authorized by this Act are intended to enhance
the Nation's petroleum, mining, and mineral engineering education
programs and to enhance educational programs in petroleum and mining
exploration and to increase the number of individuals enrolled in and
completing these programs. To achieve this intent, the Secretary and
the Committee established by section 11 shall receive the continuing
advice and cooperation of all agencies of the Federal Government
concerned with the identification, exploration, and development energy
and mineral resources.
``(c) Nothing in this Act is intended to give or shall be construed
as giving the Secretary any authority over mining and mineral resources
research conducted by any agency of the Federal Government, or as
repealing or diminishing existing authorities or responsibilities of
any agency of the Federal Government to plan and conduct, contract for,
or assist in research in its area of responsibility and concern with
regard to mining and mineral resources.
``(d) The schools, universities, and institutions receiving funding
under this Act shall generally make publicly available the information
and reports on projects completed, in progress, or planned with funds
provided under this Act. This information shall be made available on an
annual basis. All uses, products, processes, patents, and other
developments resulting from any research, demonstration, or experiment
funded in whole or in part under this Act shall be made available
promptly to the general public, subject to exception or limitation, if
any, as the Secretary may find necessary in the public interest or
national security. Schools, universities, and institutions receiving
patents for inventions funded in whole or in part under this Act shall
be governed by the applicable Federal law, except that one percent of
gross revenues derived from such patents shall be paid by the schools
and the institutions to the Federal Energy and Mineral Resources
Professional Development Fund established by section 6523(a) of the
Ocean State Options Act of 2005.
``SEC. 11. COMMITTEE ON PETROLEUM, MINING, AND MINERAL ENGINEERING AND
ENERGY AND MINERAL RESOURCE EDUCATION.
``(a) The Secretary shall appoint a Committee on Petroleum, Mining,
and Mineral Engineering and Energy and Mineral Resource Education
composed of--
``(1) the Assistant Secretary of the Interior responsible
for land and minerals management, or a delegate of such
Assistant Secretary, and not more than 16 other persons who are
knowledgeable in the fields of mining and mineral resources
research, including 2 university administrators one of whom
shall be from historic and existing petroleum and mining
schools; a community, technical, or tribal college
administrator; a career technical education educator; 6
representatives equally distributed from the petroleum, mining,
and aggregate industries; a working miner; a working oilfield
worker; a representative of the Interstate Oil and Gas Compact
Commission; a representative from the Interstate Mining Compact
Commission; a representative from the Western Governors
Association; a representative of the State geologists, and a
representative of a State mining and reclamation agency. In
making these 16 appointments, the Secretary shall consult with
interested groups.
``(2) The Assistant Secretary for Land and Minerals
Management, in the capacity of the Chairman of the Committee,
may have present during meetings of the Committee
representatives of Federal agencies with responsibility for
energy and minerals resources management, energy and mineral
resource investigations, energy and mineral commodity
information, international trade in energy and mineral
commodities, mining regulation and mine safety research, and
research into the development, production, and utilization of
energy and mineral commodities.
``(b) The Committee shall consult with, and make recommendations
to, the Secretary on all matters relating to funding energy and mineral
resources research and the awarding and allocation of funding made
under this Act. The Secretary shall consult with, and consider
recommendations of, such Committee in such matters.
``(c) Committee members, other than officers or employees of
Federal, State, or local governments, shall be, for each day (including
traveltime) during which they are performing Committee business, paid
at a rate fixed by the Secretary but not in excess of the daily
equivalent of the maximum rate of pay for level IV of the Executive
Schedule under section 5136 of title 5, United States Code, and shall
be fully reimbursed for travel, subsistence, and related expenses.
``(d) The Committee shall be chaired by the Assistant Secretary of
the Interior responsible for land and minerals management. There shall
also be elected a Vice Chairman by the Committee from among the members
referred to in this section. The Vice Chairman shall perform such
duties as are determined to be appropriate by the committee, except
that the Chairman of the Committee must personally preside at all
meetings of the full Committee.
``(e) Following completion of the report required by section 385 of
the Energy Policy Act of 2005, the Committee shall consider the
recommendations of the report, ongoing efforts in the schools,
universities, and institutions receiving funding under this Act, the
Federal and State Governments, and the private sector, and shall
formulate and recommend to the Secretary a national plan for a program
utilizing the fiscal resources provided under this Act. The Committee
shall submit such plan to the Secretary for approval. Upon approval,
the plan shall guide the Secretary and the Committee in their actions
under this Act.
``(f) Section 10 of the Federal Advisory Committee Act (5 U.S.C.
App.) shall not apply to the Committee.
``SEC. 12. CAREER TECHNICAL EDUCATION.
``(a) Up to 15 percent of the annual outlay of funds under this Act
may be granted to schools or institutions including, but not limited
to, colleges, universities, community colleges, tribal colleges, and
technical institutes other than those described in sections 3, 4, 5,
and 6.
``(b) The Secretary, as advised by the Committee established under
section 11, shall determine the eligibility of a school or institution
to receive funding under this section using criteria that include--
``(1) the presence of a substantial program of training,
including vocational education for individuals seeking to enter
the oil and gas, coal mining, or mineral mining industries in a
skilled technical trade offered by the schools or institutions
referred to in subsection (a); or
``(2) the presence of a State-approved program of career
technical education at a secondary school, offered
cooperatively with a schools or institutions referred to in
subsection (a) in one of the industrial sectors of--
``(A) agriculture, forestry, or fisheries;
``(B) utilities;
``(C) construction;
``(D) manufacturing; and
``(E) transportation and warehousing.
``(c) Schools or institutions receiving funds under this section
must show evidence of an institutional commitment for the purposes
career technical education and provide evidence that the school or
institution can obtain industrial cooperation in activities within the
scope of this Act.
``(d) Schools or institutions receiving funds under this section
must agree to maintain the programs for which the funding is sought for
a period of 10 years beginning on the date the school or institution
receives such funds, unless the Secretary finds that a shorter period
of time is appropriate for the local labor market or is required by
State authorities.''.
SEC. 6524. ONSHORE AND OFFSHORE MINERAL LEASE FEES.
Notwithstanding any other provision of law, the Department of the
Interior is prohibited from charging fees applicable to actions on
Federal onshore and offshore oil and gas, coal, geothermal, and other
mineral leases, including transportation of any production from such
leases, if such fees were not in existence on January 1, 2005. Fees in
existence on that date may be increased by the amount of the increase
in the Consumer Price Index since the last date that the fees were set,
but such an increase shall only apply to a lease issued after the date
of the increase.
SEC. 6525. ATLANTIC AND PACIFIC OCS REGION HEADQUARTERS.
Not later than January 1, 2008, the Secretary of the Interior shall
establish the headquarters for the Atlantic OCS Region and the
headquarters for the Pacific OCS Region within a State bordering the
Atlantic OCS Region and a State bordering the Pacific OCS Region,
respectively, from among the States bordering those Regions, that
petitions by no later than July 1, 2007, for leasing covering at least
40 percent of the area of its Adjacent Zone within 100 miles of the
coastline. Such headquarters shall be located within 25 miles of the
coastline and shall be the permanent duty station for all Minerals
Management Service personnel that on a daily basis spend on average 60
percent or more of their time in performance of duties in support of
the activities of the respective Region, except that the Minerals
Management Service may house regional inspection staff in other
locations. The Atlantic OCS Region and the Pacific OCS Region shall
each be led by a Regional Director who shall be an employee within the
Senior Executive Service.
SEC. 6526. NATIONAL GEOLOGIC DATA AND MAPPING FUND ACT OF 2005.
(a) Short Title.--This section may be cited as the ``National
Geologic Data and Mapping Fund Act of 2005''.
(b) Purposes.--The purpose of this section is to--
(1) establish a fund to provide funding for geologic
mapping and the preservation and use of geologic data;
(2) make available receipts derived from sales, bonus bids,
and royalties from onshore and offshore gas, minerals, oil, and
any additional form of energy exploration and development under
the laws of the United States for the purposes of the such
fund;
(3) distribute funds from such fund each fiscal year to the
Secretary of the Interior and the States; and
(4) use the distributed funds to secure the necessary
trained workforce, contractual services, and other support,
including maintenance and capital investments, to conduct
geologic mapping and preserve and make geologic data available
for use.
(c) Definitions.--In this section:
(1) Geologic fund.--The term ``Geologic Fund'' means the
National Geologic Data and Mapping Fund established by
subsection (d).
(2) State.--The term ``State'' means the State geological
survey, the agency that acts as the State geological survey, or
any other State government agency primarily responsible for
geologic mapping or geologic data preservation (or both) within
a State.
(d) Establishment and Use of National Geologic Data and Mapping
Fund.--
(1) Geologic fund.--There is established in the Treasury a
separate account to be known as the ``National Geologic Data
and Mapping Fund''.
(2) Funding.--The Secretary of the Treasury shall deposit
in the Enhancement Fund--
(A) such sums as are provided by sections
9(b)(4)(A)(iv), 9(b)(4)(B)(iv), 9(c)(4)(A)(iv), and
9(c)(4)(B)(iv) of the Outer Continental Shelf Lands
Act, as amended by this Act;
(B)(i) during the period of October 1, 2006,
through September 30, 2015, 0.1 percent of all sums
paid into the Treasury under section 35 of the Mineral
Leasing Act (30 U.S.C. 191), and
(ii) beginning October 1, 2015, and thereafter, 0.5
percent of all sums paid into the Treasury under
section 35 of the Mineral Leasing Act (30 U.S.C. 191);
and
(C)(i) during the period of October 1, 2006,
through September 30, 2015, 0.1 percent of all sums
paid into the Treasury from receipts derived from bonus
bids and royalties from other mineral leasing on public
lands, and
(ii) beginning October 1, 2015, and thereafter, 0.5
percent of all sums paid into the Treasury from
receipts derived from bonus bids and royalties from
other mineral leasing on public lands.
(3) Investments.--The Secretary of the Treasury shall
invest the amounts deposited under paragraph (2) and all
accrued interest on the amounts deposited under paragraph (2)
only in interest bearing obligations of the United States or in
obligations guaranteed as to both principal and interest by the
United States.
(4) Availability to secretary of the interior.--
(A) In general.--Beginning with fiscal year 2007,
and in each fiscal year thereafter, one-third of
amounts deposited into the Geologic Fund, together with
the interest thereon, shall be available, without
fiscal year limitations, to the Secretary of the
Interior for use for the purposes described in
subsection (b)(4).
(B) Withdrawals and transfer of funds.--The
Secretary of the Treasury shall withdraw such amounts
from the Geologic Fund as the Secretary of the Interior
may request, subject to the limitation in subparagraph
(A), and transfer such amounts to the Secretary of the
Interior to be used, at the discretion of the Secretary
of the Interior, by the Minerals Management Service,
the Bureau of Land Management, and the United States
Geological Survey for the purposes described in
subsection (b)(4). No funds distributed from the
Geologic Fund may be used to purchase an interest in
land.
(5) Payment to states.--
(A) In general.--Beginning with fiscal year 2007,
and in each fiscal year thereafter, two-thirds of
amounts deposited into the Geologic Fund, together with
the interest thereon, shall be available, without
fiscal year limitations, to the States for use for the
purposes described in subsection (b)(4).
(B) Withdrawals and transfer of funds.--Within the
first 90 days of each fiscal year, the Secretary of the
Treasury shall withdraw amounts from the Geologic Fund
and transfer such amounts to the States based on a
formula devised by the Secretary of the Interior based
on the relative geologic mapping and data preservation
needs of the States.
(C) Use of payments by states.--Each State shall
use the payments made under subparagraph (B) only for
carrying out projects and programs for the purposes
described in subsection (b)(4). No funds distributed
from the Geologic Fund may be used to purchase an
interest in land.
(D) Encouragement of use of private funds by
states.--Each State shall use the payments made under
subparagraph (B) to leverage private funds for carrying
out projects for the purposes described in subsection
(b)(4).
(e) Report to Congress.--Beginning in fiscal year 2008 and
continuing for each fiscal year thereafter, the Secretary of the
Interior and each State receiving funds from the Geologic Fund shall
submit a report to the Committee on Energy and Natural Resources of the
Senate and the Committee on Resources of the House of Representatives.
Reports submitted to the Congress by the Secretary of the Interior and
the States shall include detailed information regarding expenditures
during the previous fiscal year.
SEC. 6527. LEASES FOR AREAS LOCATED WITHIN 100 MILES OF CALIFORNIA OR
FLORIDA.
(a) Authorization to Cancel and Exchange Certain Existing Oil and
Gas Leases; Prohibition on Submittal of Exploration Plans for Certain
Leases Prior to June 30, 2012.--
(1) Authority.--Effective 180 days after the date of
enactment of this subtitle, the lessee of an existing oil and
gas lease for an area located completely within 100 miles of
the coastline within the California or Florida Adjacent Zones
shall have the option, without compensation, of exchanging such
lease for a new oil and gas lease having a primary term of 5
years. For the area subject to the new lease, the lessee may
select any unleased tract at least part of which is located
within the area between 100 and 125 miles from the coastline,
and completely beyond 100 miles from the coastline, within the
same Adjacent State's Adjacent Zone as the lease being
exchanged.
(2) Administrative process.--The Secretary of the Interior
shall establish a reasonable administrative process through
which a lessee may exercise its option to exchange an oil and
gas lease for a new oil and gas lease as provided for in this
section. Such exchanges, including the issuance of new leases,
shall not be considered to be major Federal actions for
purposes of the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.). Further, such exchanges conducted in
accordance with this section are deemed to be in compliance all
provisions of the Outer Continental Shelf Lands Act (43 U.S.C.
1331 et seq.). The Secretary shall issue a new lease in
exchange for the lease being exchanged notwithstanding that the
area that will be subject to the lease may be withdrawn from
leasing under the Outer Continental Shelf Lands Act or
otherwise unavailable for leasing under the provisions of any
other law.
(3) Operating restrictions.--A new lease issued in exchange
for an existing lease under this section shall be subject to
such national defense operating restrictions on the OCS tract
covered by the new lease as may be applicable upon issuance.
(4) Priority.--The Secretary shall give priority in the
lease exchange process based on the amount of the original
bonus bid paid for the issuance of each lease to be exchanged.
The Secretary shall allow leases covering partial tracts to be
exchanged for leases covering full tracts conditioned upon
payment of additional bonus bids on a per-acre basis as
determined by the average per acre of the original bonus bid
per acre for the partial tract being exchanged.
(5) Exploration plans.--Any exploration plan submitted to
the Secretary of the Interior after the date of the enactment
of this Act and before July 1, 2012, for an oil and gas lease
for an area wholly within 100 miles of the coastline within the
California Adjacent Zone or Florida Adjacent Zone shall not be
treated as received by the Secretary until the earlier of July
1, 2012, or the date on which a petition by the Adjacent State
for oil and gas leasing covering the area within which is
located the area subject to the oil and gas lease was approved.
(b) Further Lease Cancellation and Exchange Provisions.--
(1) Cancellation of lease.--As part of the lease exchange
process under this section, the Secretary shall cancel a lease
that is exchanged under this section.
(2) Consent of lessees.--All lessees holding an interest in
a lease must consent to cancellation of their leasehold
interests in order for the lease to be cancelled and exchanged
under this section.
(3) Waiver of rights.--As a prerequisite to the exchange of
a lease under this section, the lessee must waive any rights to
bring any litigation against the United States related to the
transaction.
(4) Plugging and abandonment.--The plugging and abandonment
requirements for any wells located on any lease to be cancelled
and exchanged under this section must be complied with by the
lessees prior to the cancellation and exchange.
(c) Area Partially Within 100 Miles of Florida.--An existing oil
and gas lease for an area located partially within 100 miles of the
coastline within the Florida Adjacent Zone may only be developed and
produced using wells drilled from well-head locations at least 100
miles from the coastline to any bottom-hole location on the area of the
lease.
(d) Existing Oil and Gas Lease Defined.--In this section the term
``existing oil and gas lease'' means an oil and gas lease in effect on
the date of the enactment of this Act.
Subtitle F--Sale and Conveyance of Federal Land
SEC. 6601. COLLECTION OF RECEIPTS FROM THE SALE OF FEDERAL LANDS.
(a) In General.--Notwithstanding any other law, the Secretary shall
make the lands described in subsection (b) available for immediate sale
through a competitive sale process at fair market value. Requirements
under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.) shall not apply to the sale of lands under this section.
(b) Lands Described.--The lands referred to in subsection (a) are
the following:
(1) Poplar Point (Transfer and Conveyance of Properties in
the District of Columbia, Map Number 869/80460, Dated July
2005, p. 28 of 28).
(2) U.S. Reservations 44, 45, 46, 47, 48 and 49 (Map Number
869/80460, Dated July 2005, p. 13 of 28).
(3) U.S. Reservation 251 (Map Number 869/80460, Dated July
2005, p. 14 of 28).
(4) U.S. Reservation 8 (Map Number 869/80460, Dated July
2005, p. 15 of 28).
(5) U.S. Reservation 17A (Map Number 869/80460, Dated July
2005, p. 20 of 28).
(6) U.S. Reservation 484 (Map Number 869/80460, Dated July
2005, p. 21 of 28).
(7) U.S. Reservation 721, 722 and 723 (Map Number 869/
80460, Dated July 2005, p. 25 of 28).
(8) Certain land adjacent to Robert F. Kennedy Stadium
Parking Lot (Transfer and Conveyance of Properties in the
District of Columbia, Map Number 869/80460, Dated July 2005, p.
26 of 28).
(9) United States Reservation 243, 244, 245, and 247
(Transfer and Conveyance of Properties in the District of
Columbia, Map Number 869/80460, Dated July 2005, p. 22 of 28).
The Secretary may retain from sale proceeds and spend without further
appropriation up to $1,000,000 each year to implement land sales under
this subsection, including hiring contractors and appraisers
(c) Poplar Point.--
(1) Retention of funds.--The Secretary may retain
$10,000,000 from funds received from the sale of land under
subsection (b)(1) and spend such funds without further
appropriations for the purposes of complying with subparagraph
(2).
(2) Continuity of operation.--Before the sale and
development of land referred to in subparagraph (b)(1), the
Secretary shall ensure that the existing facilities and related
properties (including necessary easements and utilities related
thereto) occupied or otherwise used by the National Park
Service are either withheld from any sale and remain in
operation at its current location or will be relocated to
suitable replacement facilities along the Anacostia River in
the District of Columbia using funds made available by
subparagraph (c)(1).
(d) Conveyance of Lands to the District of Columbia.--
(1) In general.--Notwithstanding any other law, the
Secretary shall immediately convey all right, title, and
interest of the United States in the lands described in this
subsection to the District of Columbia upon enactment of this
section. Requirements under the National Environmental Policy
Act (42 U.S.C. 4321 et seq.) shall not apply to the conveyance
of lands under this subsection.
(2) Lands described.--The lands referred to in this
subsection are as follows:
(A) United States Reservation 128, 129, 130, 298
and 299 (Transfer and Conveyance of Properties in the
District of Columbia, Map Number 869/80460, Dated July
2005, p. 23 of 28).
(B) United States Reservation 174 (Map Number 869/
80460, Dated July 2005, p. 27 of 28).
(C) United States Reservation 277A and 277C (Map
Number 869/80460, Dated July 2005, p. 16 of 28).
(D) United States Reservation 343D and 343E (Map
Number 869/80460, Dated July 2005, p. 24 or 28).
(E) United States Reservation 404 (Map Number 869/
80460, Dated July 2005, p. 12 of 28).
(F) United States Reservation 451 (Map Number 869/
80460, Dated July 2005, p. 11 of 28).
(G) United States Reservation 470 (Transfer and
Conveyance of Properties in the District of Columbia,
Map Number 869/80460, Dated July 2005, p. 17 of 28).
(e) Transfer of Administrative Jurisdiction Over Certain
Properties.--
(1) In general.--Upon the date of the enactment of this
subsection, administrative jurisdiction over each of the
following properties (owned by the United States and as
depicted on listed maps) is hereby transferred from the
District of Columbia to the United States for administration by
the Secretary of the Interior through the Director of the
National Park Service:
(A) An unimproved portion of Audubon Terrace
Northwest, located east of Linnean Avenue Northwest,
that is within U.S. Reservation 402 (Audubon Terrace,
NW, Transfer and Conveyance of Properties in the
District of Columbia, Map Number 869/80460, Dated July
2005, p. 2 of 28) .
(B) An unimproved portion of Barnaby Street
Northwest, north of Aberfoyle Place Northwest, that
abuts U.S. Reservation 545 (Barnaby Avenue, NW, Map
Number 869/80460, Dated July 2005, p. 3 of 28).
(C) A portion of Canal Street Southwest, and a
portion of V Street Southwest, each which abuts U.S.
Reservation (Canal and V Streets, SW, Map Number 869/
80460, Dated July 2005, p. 3 of 28).
(D) Unimproved streets and alleys at Fort Circle
Park located within the boundaries of U.S. Reservation
497 (Fort Circle Park, Map Number 869/80460, Dated July
2005, p. 5 of 28)''.
(E) An unimproved portion of Western Avenue
Northwest, north of Oregon Avenue Northwest, that abuts
U.S. Reservation 339 (Western Avenue, NW, Map Number
869/80460, Dated July 2005, p. 6 of 28).
(F) An unimproved portion of 17th Street Northwest,
south of Shepard Street Northwest, that abuts U.S.
Reservation 339 (17th Street, NW, Map Number 869/80460,
Dated July 2005, p. 7 of 28).
(G) An unimproved portion of 30th Street Northwest,
north of Broad Branch Road, Northwest, that is within
the boundaries of U.S. Reservation 515 (30th Street,
NW, Map Number 869/80460, Dated July 2005, p. 8 of 28).
(H) Land over I-395 at Washington Avenue, Southwest
(Lands over I-395 at Washington Avenue, SW, Map Number
869/80460, Dated July 2005, p. 9 of 28).
(I) A portion of U.S. Reservation 357 at Whitehaven
Parkway Northwest, previously transferred to the
District of Columbia in conjunction with the former
proposal for a residence for the Mayor of the District
of Columbia (Portion of U.S. Reservation 357, Transfer
and Conveyance of Properties in the District of
Columbia, Map Number 869/80460, Dated July 2005, p. 10
of 28).
(2) Use of certain property for memorial.--In the case of
the property for which administrative jurisdiction is
transferred under paragraph (1)(H), the property shall be used
as the site for the establishment of a memorial to honor
disabled veterans of the United States Armed Forces authorized
to be established by the Disabled Veterans' LIFE Memorial
Foundation by Public Law 106-348 (114 Stat. 1358; 40 U.S.C.
8903 note), except that the District of Columbia shall retain
administrative jurisdiction over the subsurface area beneath
the site for tunnels, walls, footings, and related facilities.
TITLE VII--COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
SEC. 7001. EXTENSION OF VESSEL TONNAGE DUTIES.
(a) Extension of Duties.--Section 36 of the Act entitled ``An Act
to provide revenue, equalize duties and encourage the industries of the
United States, and for other purposes'', approved August 5, 1909 (36
Stat. 111; 46 U.S.C. App. 121), is amended--
(1) by striking ``9 cents per ton'' and all that follows
through ``2002,'' the first place it appears and inserting
``4.5 cents per ton, not to exceed in the aggregate 22.5 cents
per ton in any one year, for fiscal years 2006 through 2010,'';
and
(2) by striking ``27 cents per ton'' and all that follows
through ``2002,'' and inserting ``13.5 cents per ton, not to
exceed 67.5 cents per ton per annum, for fiscal years 2006
through 2010,''.
(b) Conforming Amendment.--The Act entitled ``An Act concerning
tonnage duties on vessels entering otherwise than by sea'', approved
March 8, 1910 (36 Stat. 234; 46 U.S.C. App. 132), is amended by
striking ``9 cents per ton'' and all that follows through ``and 2
cents'' and inserting ``4.5 cents per ton, not to exceed in the
aggregate 22.5 cents per ton in any one year, for fiscal years 2006
through 2010, and 2 cents''.
(c) Offsetting Receipts.--Increased tonnage charges collected as a
result of the amendments made by subsection (a) shall be deposited in
the general fund of the Treasury as offsetting receipts of the
department in which the Coast Guard is operating and ascribed to Coast
Guard activities related to marine safety, search and rescue, and aids
to navigation.
TITLE VIII--COMMITTEE ON WAYS AND MEANS
SEC. 8001. SHORT TITLE.
This title may be cited as the ``Work, Marriage, and Family
Promotion Reconciliation Act of 2005''.
SEC. 8002. TABLE OF CONTENTS.
The table of contents of this title is as follows:
Sec. 8001. Short title.
Sec. 8002. Table of contents.
Sec. 8003. References.
Sec. 8004. Findings.
Subtitle A--TANF
Sec. 8101. Purposes.
Sec. 8102. Family assistance grants.
Sec. 8103. Promotion of family formation and healthy marriage.
Sec. 8104. Supplemental grant for population increases in certain
States.
Sec. 8105. Elimination of high performance bonus.
Sec. 8106. Contingency fund.
Sec. 8107. Use of funds.
Sec. 8108. Repeal of Federal loan for State welfare programs.
Sec. 8109. Universal engagement and family self-sufficiency plan
requirements.
Sec. 8110. Work participation requirements.
Sec. 8111. Maintenance of effort.
Sec. 8112. Performance improvement.
Sec. 8113. Data collection and reporting.
Sec. 8114. Direct funding and administration by Indian tribes.
Sec. 8115. Research, evaluations, and national studies.
Sec. 8116. Study by the Census Bureau.
Sec. 8117. Definition of assistance.
Sec. 8118. Technical corrections.
Sec. 8119. Fatherhood program.
Sec. 8120. State option to make TANF programs mandatory partners with
one-stop employment training centers.
Sec. 8121. Sense of the Congress.
Sec. 8122. Drug testing of applicants for and recipients of assistance.
Subtitle B--Child care
Sec. 8201. Entitlement funding.
Subtitle C--Child support
Sec. 8301. Federal matching funds for limited pass through of child
support payments to families receiving
TANF.
Sec. 8302. State option to pass through all child support payments to
families that formerly received TANF.
Sec. 8303. Mandatory review and adjustment of child support orders for
families receiving TANF.
Sec. 8304. Mandatory fee for successful child support collection for
family that has never received TANF.
Sec. 8305. Report on undistributed child support payments.
Sec. 8306. Decrease in amount of child support arrearage triggering
passport denial.
Sec. 8307. Use of tax refund intercept program to collect past-due
child support on behalf of children who are
not minors.
Sec. 8308. Garnishment of compensation paid to veterans for service-
connected disabilities in order to enforce
child support obligations.
Sec. 8309. Maintenance of technical assistance funding.
Sec. 8310. Maintenance of Federal Parent Locator Service funding.
Sec. 8311. Information comparisons with insurance data.
Sec. 8312. Tribal access to the Federal Parent Locator Service.
Sec. 8313. Reimbursement of Secretary's costs of information
comparisons and disclosure for enforcement
of obligations on Higher Education Act
loans and grants.
Sec. 8314. Technical amendment relating to cooperative agreements
between States and Indian tribes.
Sec. 8315. State option to use statewide automated data processing and
information retrieval system for interstate
cases.
Sec. 8316. Modification of rule requiring assignment of support rights
as a condition of receiving TANF.
Sec. 8317. State option to discontinue certain support assignments.
Sec. 8318. Technical correction.
Sec. 8319. Reduction in rate of reimbursement of child support
administrative expenses.
Sec. 8320. Incentive payments.
Subtitle D--Child welfare
Sec. 8401. Extension of authority to approve demonstration projects.
Sec. 8402. Elimination of limitation on number of waivers.
Sec. 8403. Elimination of limitation on number of States that may be
granted waivers to conduct demonstration
projects on same topic.
Sec. 8404. Elimination of limitation on number of waivers that may be
granted to a single State for demonstration
projects.
Sec. 8405. Streamlined process for consideration of amendments to and
extensions of demonstration projects
requiring waivers.
Sec. 8406. Availability of reports.
Sec. 8407. Clarification of eligibility for foster care maintenance
payments and adoption assistance.
Sec. 8408. Clarification regarding Federal matching of certain
administrative costs under the foster care
maintenance payments program.
Sec. 8409. Technical correction.
Sec. 8410. Technical correction.
Subtitle E--Supplemental security income
Sec. 8501. Review of State agency blindness and disability
determinations.
Sec. 8502. Payment of certain lump sum benefits in installments under
the Supplemental Security Income program.
Subtitle F--State and local flexibility
Sec. 8601. Program coordination demonstration projects.
Subtitle G--Repeal of continued dumping and subsidy offset
Sec. 8701. Repeal of continued dumping and subsidy offset.
Subtitle H--Effective date
Sec. 8801. Effective date.
SEC. 8003. REFERENCES.
Except as otherwise expressly provided, wherever in this title an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the amendment or repeal shall be
considered to be made to a section or other provision of the Social
Security Act.
SEC. 8004. FINDINGS.
The Congress makes the following findings:
(1) The Temporary Assistance for Needy Families (TANF)
Program established by the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (Public Law 104-193) has
succeeded in moving families from welfare to work and reducing
child poverty.
(A) There has been a dramatic increase in the
employment of current and former welfare recipients.
The percentage of working recipients reached an all-
time high in fiscal year 1999 and continued steady in
fiscal years 2000 and 2001. In fiscal year 2003, 31.3
percent of adult recipients were counted as meeting the
work participation requirements. All States but one met
the overall participation rate standard in fiscal year
2003, as did the District of Columbia and Puerto Rico.
(B) Earnings for welfare recipients remaining on
the rolls have also increased significantly, as have
earnings for female-headed households. The increases
have been particularly large for the bottom 2 income
quintiles, that is, those women who are most likely to
be former or present welfare recipients.
(C) Welfare dependency has plummeted. As of June
2004, 1,969,909 families and 4,727,291 individuals were
receiving assistance. Accordingly, the number of
families in the welfare caseload and the number of
individuals receiving cash assistance declined 55
percent and 61 percent, respectively, since the
enactment of TANF.
(D) The child poverty rate continued to decline
between 1996 and 2003, falling 14 percent from 20.5 to
17.6 percent. Child poverty rates for African-American
and Hispanic children have also fallen dramatically
during the past 7 years.
(2) As a Nation, we have made substantial progress in
reducing teen pregnancies and births, slowing increases in
nonmarital childbearing, and improving child support
collections and paternity establishment.
(A) The birth rate to teenagers declined 30 percent
from its high in 1991 to 2002. The 2002 teenage birth
rate of 43.0 per 1,000 women aged 15-19 is the lowest
recorded birth rate for teenagers.
(B) During the period from 1991 through 2001,
teenage birth rates fell in all States and the District
of Columbia, Puerto Rico, Guam, and the Virgin Islands.
Declines also have spanned age, racial, and ethnic
groups. There has been success in lowering the birth
rate for both younger and older teens. The birth rate
for those 15-17 years of age has declined 40 percent
since 1991, and the rate for those 18 and 19 has
declined 23 percent. The rate for African American
teens--until recently the highest--has declined the
most--42 percent from 1991 through 2002.
(C) Since the enactment of the Personal
Responsibility and Work Opportunity Reconciliation Act
of 1996, child support collections within the child
support enforcement system have grown every year,
increasing from $12,000,000,000 in fiscal year 1996 to
over $21,000,000,000 in fiscal year 2003. The number of
paternities established or acknowledged in fiscal year
2003 (over 1,500,000) includes a more than 100 percent
increase through in-hospital acknowledgement programs--
862,043 in 2003 compared to 324,652 in 1996. Child
support collections were made in nearly 8,000,000 cases
in fiscal year 2003, significantly more than the almost
4,000,000 cases having a collection in 1996.
(3) The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 gave States great flexibility in the
use of Federal funds to develop innovative programs to help
families leave welfare and begin employment and to encourage
the formation of 2-parent families.
(A) Total Federal and State TANF expenditures in
fiscal year 2003 were $26,300,000,000, up from
$25,400,000,000 in fiscal year 2002 and $22,600,000,000
in fiscal year 1999. This increased spending is
attributable to significant new investments in
supportive services in the TANF program, such as child
care and activities to support work.
(B) Since the welfare reform effort began there has
been a dramatic increase in work participation
(including employment, community service, and work
experience) among welfare recipients, as well as an
unprecedented reduction in the caseload because
recipients have left welfare for work.
(C) States are making policy choices and investment
decisions best suited to the needs of their citizens.
(i) To expand aid to working families,
almost all States disregard a portion of a
family's earned income when determining benefit
levels.
(ii) Most States increased the limits on
countable assets above the former Aid to
Families with Dependent Children (AFDC)
program. Every State has increased the vehicle
asset level above the prior AFDC limit for a
family's primary automobile.
(iii) States are experimenting with
programs to promote marriage and paternal
involvement. Over half of the States have
eliminated restrictions on 2-parent families.
Many States use TANF, child support, or State
funds to support community-based activities to
help fathers become more involved in their
children's lives or strengthen relationships
between mothers and fathers.
(4) However, despite this success, there is still progress
to be made. Policies that support and promote more work,
strengthen families, and enhance State flexibility are
necessary to continue to build on the success of welfare
reform.
(A) Significant numbers of welfare recipients still
are not engaged in employment-related activities. While
all States have met the overall work participation
rates required by law, in an average month, only 41
percent of all families with an adult participated in
work activities that were countable toward the State's
participation rate. In fiscal year 2003, four
jurisdictions failed to meet the more rigorous 2-parent
work requirements, and 25 jurisdictions (States and
territories) are not subject to the 2-parent
requirements, most because they moved their 2-parent
cases to separate State programs where they are not
subject to a penalty for failing the 2-parent rates.
(B) In 2002, 34 percent of all births in the U.S.
were to unmarried women. And, with fewer teens entering
marriage, the proportion of births to unmarried teens
has increased dramatically (80 percent in 2002 versus
30 percent in 1970). The negative consequences of out-
of-wedlock birth on the mother, the child, the family,
and society are well documented. These include
increased likelihood of welfare dependency, increased
risks of low birth weight, poor cognitive development,
child abuse and neglect, and teen parenthood, and
decreased likelihood of having an intact marriage
during adulthood.
(C) There has been a dramatic rise in cohabitation
as marriages have declined. It is estimated that 40
percent of children are expected to live in a
cohabiting-parent family at some point during their
childhood. Children in single-parent households and
cohabiting-parent households are at much higher risk of
child abuse than children in intact married families.
(D) Children who live apart from their biological
fathers, on average, are more likely to be poor,
experience educational, health, emotional, and
psychological problems, be victims of child abuse,
engage in criminal behavior, and become involved with
the juvenile justice system than their peers who live
with their married, biological mother and father. A
child living with a single mother is nearly 5 times as
likely to be poor as a child living in a married-couple
family. In 2003, in married-couple families, the child
poverty rate was 8.6 percent, and in households headed
by a single mother the poverty rate was 41.7 percent.
(5) Therefore, it is the sense of the Congress that
increasing success in moving families from welfare to work, as
well as in promoting healthy marriage and other means of
improving child well-being, are very important Government
interests and the policy contained in part A of title IV of the
Social Security Act (as amended by this title) is intended to
serve those ends.
Subtitle A--TANF
SEC. 8101. PURPOSES.
Section 401(a) (42 U.S.C. 601(a)) is amended--
(1) in the matter preceding paragraph (1), by striking
``increase'' and inserting ``improve child well-being by
increasing'';
(2) in paragraph (1), by inserting ``and services'' after
``assistance'';
(3) in paragraph (2), by striking ``parents on government
benefits'' and inserting ``families on government benefits and
reduce poverty''; and
(4) in paragraph (4), by striking ``two-parent families''
and inserting ``healthy, 2-parent married families, and
encourage responsible fatherhood''.
SEC. 8102. FAMILY ASSISTANCE GRANTS.
(a) Extension of Authority.--Section 403(a)(1)(A) (42 U.S.C.
603(a)(1)(A)) is amended--
(1) by striking ``1996, 1997, 1998, 1999, 2000, 2001, 2002,
and 2003'' and inserting ``2006 through 2010''; and
(2) by inserting ``payable to the State for the fiscal
year'' before the period.
(b) State Family Assistance Grant.--Section 403(a)(1)(C) (42 U.S.C.
603(a)(1)(C)) is amended by striking ``fiscal year 2003'' and inserting
``each of fiscal years 2006 through 2010''.
(c) Matching Grants for the Territories.--Section 1108(b)(2) (42
U.S.C. 1308(b)(2)) is amended by striking ``1997 through 2003'' and
inserting ``2006 through 2010''.
SEC. 8103. PROMOTION OF FAMILY FORMATION AND HEALTHY MARRIAGE.
(a) State Plans.--Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is
amended by adding at the end the following:
``(vii) Encourage equitable treatment of
married, 2-parent families under the program
referred to in clause (i).''.
(b) Healthy Marriage Promotion Grants; Repeal of Bonus for
Reduction of Illegitimacy Ratio.--Section 403(a)(2) (42 U.S.C.
603(a)(2)) is amended to read as follows:
``(2) Healthy marriage promotion grants.--
``(A) Authority.--The Secretary shall award
competitive grants to States, territories, and tribal
organizations for not more than 50 percent of the cost
of developing and implementing innovative programs to
promote and support healthy, married, 2-parent
families.
``(B) Healthy marriage promotion activities.--Funds
provided under subparagraph (A) shall be used to
support any of the following programs or activities:
``(i) Public advertising campaigns on the
value of marriage and the skills needed to
increase marital stability and health.
``(ii) Education in high schools on the
value of marriage, relationship skills, and
budgeting.
``(iii) Marriage education, marriage
skills, and relationship skills programs, that
may include parenting skills, financial
management, conflict resolution, and job and
career advancement, for non-married pregnant
women and non-married expectant fathers.
``(iv) Pre-marital education and marriage
skills training for engaged couples and for
couples or individuals interested in marriage.
``(v) Marriage enhancement and marriage
skills training programs for married couples.
``(vi) Divorce reduction programs that
teach relationship skills.
``(vii) Marriage mentoring programs which
use married couples as role models and mentors
in at-risk communities.
``(viii) Programs to reduce the
disincentives to marriage in means-tested aid
programs, if offered in conjunction with any
activity described in this subparagraph.
``(C) Voluntary participation.--
``(i) In general.--Participation in a
program or activity described in any of clauses
(iii) through (viii) of subparagraph (B) shall
be voluntary.
``(ii) Requirements for receipt of funds.--
The Secretary may not award a grant under this
paragraph to an applicant for the grant,
unless--
``(I) the application for the grant
describes--
``(aa) how the programs or
activities proposed in the
application will address, as
appropriate, issues of domestic
violence; and
``(bb) what the applicant
will do, to the extent
relevant, to ensure that
participation in the programs
or activities is voluntary, and
to inform potential
participants that their
participation is voluntary; and
``(II) the applicant agrees that,
as a condition of receipt of the grant,
the applicant will consult with experts
in domestic violence or relevant
community domestic violence coalitions
in developing the programs and
activities funded with the grant.
``(D) Appropriation.--Out of any money in the
Treasury of the United States not otherwise
appropriated, there are appropriated for each of fiscal
years 2006 through 2010 $100,000,000 for grants under
this paragraph.''.
(c) Counting of Spending on Non-Eligible Families to Prevent and
Reduce Incidence of Out-of-Wedlock Births, Encourage Formation and
Maintenance of Healthy, 2-Parent Married Families, or Encourage
Responsible Fatherhood.--Section 409(a)(7)(B)(i) (42 U.S.C.
609(a)(7)(B)(i)) is amended by adding at the end the following:
``(V) Counting of spending on non-
eligible families to prevent and reduce
incidence of out-of-wedlock births,
encourage formation and maintenance of
healthy, 2-parent married families, or
encourage responsible fatherhood.--The
term `qualified State expenditures'
includes the total expenditures by the
State during the fiscal year under all
State programs for a purpose described
in paragraph (3) or (4) of section
401(a).''.
SEC. 8104. SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN CERTAIN
STATES.
Section 403(a)(3) (42 U.S.C. 603(a)(3)) is amended--
(1) in subparagraph (E)--
(A) by striking ``1998, 1999, 2000, and 2001'' and
inserting ``2006 through 2009''; and
(B) by striking ``, in a total amount not to exceed
$800,000,000'';
(2) in subparagraph (G), by striking ``2001'' and inserting
``2009''; and
(3) by striking subparagraph (H) and inserting the
following:
``(H) Further preservation of grant amounts.--A
State that was a qualifying State under this paragraph
for fiscal year 2004 or any prior fiscal year shall be
entitled to receive from the Secretary for each of
fiscal years 2006 through 2009 a grant in an amount
equal to the amount required to be paid to the State
under this paragraph for the most recent fiscal year
for which the State was a qualifying State.''.
SEC. 8105. ELIMINATION OF HIGH PERFORMANCE BONUS.
Section 403(a) (42 U.S.C. 603(a)) is amended by striking paragraph
(4).
SEC. 8106. CONTINGENCY FUND.
(a) Deposits Into Fund.--Section 403(b)(2) (42 U.S.C. 603(b)(2)) is
amended--
(1) by striking ``1997, 1998, 1999, 2000, 2001, 2002, and
2003'' and inserting ``2006 through 2010''; and
(2) by striking all that follows ``$2,000,000,000'' and
inserting a period.
(b) Grants.--Section 403(b)(3)(C)(ii) (42 U.S.C. 603(b)(3)(C)(ii))
is amended by striking ``fiscal years 1997 through 2006'' and inserting
``fiscal years 2006 through 2010''.
(c) Definition of Needy State.--Clauses (i) and (ii) of section
403(b)(5)(B) (42 U.S.C. 603(b)(5)(B)) are amended by inserting after
``1996'' the following: ``and the Food Stamp Act of 1977 as in effect
during the corresponding 3-month period in the fiscal year preceding
such most recently concluded 3-month period''.
(d) Annual Reconciliation: Federal Matching of State Expenditures
Above ``Maintenance of Effort'' Level.--Section 403(b)(6) (42 U.S.C.
603(b)(6)) is amended--
(1) in subparagraph (A)(ii)--
(A) by adding ``and'' at the end of subclause (I);
(B) by striking ``; and'' at the end of subclause
(II) and inserting a period; and
(C) by striking subclause (III);
(2) in subparagraph (B)(i)(II), by striking all that
follows ``section 409(a)(7)(B)(iii))'' and inserting a period;
(3) by amending subparagraph (B)(ii)(I) to read as follows:
``(I) the qualified State
expenditures (as defined in section
409(a)(7)(B)(i)) for the fiscal year;
plus''; and
(4) by striking subparagraph (C).
(e) Consideration of Certain Child Care Expenditures in Determining
State Compliance With Contingency Fund Maintenance of Effort
Requirement.--Section 409(a)(10) (42 U.S.C. 609(a)(10)) is amended--
(1) by striking ``(other than the expenditures described in
subclause (I)(bb) of that paragraph)) under the State program
funded under this part'' and inserting a close parenthesis; and
(2) by striking ``excluding any amount expended by the
State for child care under subsection (g) or (i) of section 402
(as in effect during fiscal year 1994) for fiscal year 1994,''.
(f) Effective Date.--The amendments made by subsections (c), (d),
and (e) shall take effect on October 1, 2007.
SEC. 8107. USE OF FUNDS.
(a) General Rules.--Section 404(a)(2) (42 U.S.C. 604(a)(2)) is
amended by striking ``in any manner that'' and inserting ``for any
purposes or activities for which''.
(b) Treatment of Interstate Immigrants.--
(1) State plan provision.--Section 402(a)(1)(B) (42 U.S.C.
602(a)(1)(B)) is amended by striking clause (i) and
redesignating clauses (ii) through (iv) as clauses (i) through
(iii), respectively.
(2) Use of funds.--Section 404 (42 U.S.C. 604) is amended
by striking subsection (c).
(c) Increase in Amount Transferable to Child Care.--Section
404(d)(1) (42 U.S.C. 604(d)(1)) is amended by striking ``30'' and
inserting ``50''.
(d) Increase in Amount Transferable to Title XX Programs.--Section
404(d)(2)(B) (42 U.S.C. 604(d)(2)(B)) is amended to read as follows:
``(B) Applicable percent.--For purposes of
subparagraph (A), the applicable percent is 10 percent
for fiscal year 2006 and each succeeding fiscal
year.''.
(e) Clarification of Authority of States to Use TANF Funds Carried
Over From Prior Years to Provide TANF Benefits and Services.--Section
404(e) (42 U.S.C. 604(e)) is amended to read as follows:
``(e) Authority to Carryover or Reserve Certain Amounts for
Benefits or Services or for Future Contingencies.--
``(1) Carryover.--A State or tribe may use a grant made to
the State or tribe under this part for any fiscal year to
provide, without fiscal year limitation, any benefit or service
that may be provided under the State or tribal program funded
under this part.
``(2) Contingency reserve.--A State or tribe may designate
any portion of a grant made to the State or tribe under this
part as a contingency reserve for future needs, and may use any
amount so designated to provide, without fiscal year
limitation, any benefit or service that may be provided under
the State or tribal program funded under this part. If a State
or tribe so designates a portion of such a grant, the State
shall, on an annual basis, include in its report under section
411(a) the amount so designated.''.
SEC. 8108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE PROGRAMS.
(a) Repeal.--Effective as of October 1, 2006, section 406 (42
U.S.C. 606) is repealed.
(b) Conforming Amendments.--
(1) Section 409(a) (42 U.S.C. 609(a)) is amended by
striking paragraph (6).
(2) Section 412 (42 U.S.C. 612) is amended by striking
subsection (f) and redesignating subsections (g) through (i) as
subsections (f) through (h), respectively.
(3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by
striking ``406,''.
SEC. 8109. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY PLAN
REQUIREMENTS.
(a) Modification of State Plan Requirements.--Section 402(a)(1)(A)
(42 U.S.C. 602(a)(1)(A)) is amended by striking clauses (ii) and (iii)
and inserting the following:
``(ii) Require a parent or caretaker
receiving assistance under the program to
engage in work or alternative self-sufficiency
activities (as defined by the State),
consistent with section 407(e)(2).
``(iii) Require families receiving
assistance under the program to engage in
activities in accordance with family self-
sufficiency plans developed pursuant to section
408(b).''.
(b) Establishment of Family Self-Sufficiency Plans.--
(1) In general.--Section 408(b) (42 U.S.C. 608(b)) is
amended to read as follows:
``(b) Family Self-Sufficiency Plans.--
``(1) In general.--A State to which a grant is made under
section 403 shall--
``(A) assess, in the manner deemed appropriate by
the State, the skills, prior work experience, and
employability of each work-eligible individual (as
defined in section 407(b)(2)(C)) receiving assistance
under the State program funded under this part;
``(B) establish for each family that includes such
an individual, in consultation as the State deems
appropriate with the individual, a self-sufficiency
plan that specifies appropriate activities described in
the State plan submitted pursuant to section 402,
including direct work activities as appropriate
designed to assist the family in achieving their
maximum degree of self-sufficiency, and that provides
for the ongoing participation of the individual in the
activities;
``(C) require, at a minimum, each such individual
to participate in activities in accordance with the
self-sufficiency plan;
``(D) monitor the participation of each such
individual in the activities specified in the self-
sufficiency plan, and regularly review the progress of
the family toward self-sufficiency;
``(E) upon such a review, revise the self-
sufficiency plan and activities as the State deems
appropriate.
``(2) Timing.--The State shall comply with paragraph (1)
with respect to a family--
``(A) in the case of a family that, as of October
1, 2005, is not receiving assistance from the State
program funded under this part, not later than 60 days
after the family first receives assistance on the basis
of the most recent application for the assistance; or
``(B) in the case of a family that, as of such
date, is receiving the assistance, not later than 12
months after the date of enactment of this subsection.
``(3) State discretion.--A State shall have sole
discretion, consistent with section 407, to define and design
activities for families for purposes of this subsection, to
develop methods for monitoring and reviewing progress pursuant
to this subsection, and to make modifications to the plan as
the State deems appropriate to assist the individual in
increasing their degree of self-sufficiency.
``(4) Rule of interpretation.--Nothing in this part shall
preclude a State from--
``(A) requiring participation in work and any other
activities the State deems appropriate for helping
families achieve self-sufficiency and improving child
well-being; or
``(B) using job search or other appropriate job
readiness or work activities to assess the
employability of individuals and to determine
appropriate future engagement activities.''.
(2) Penalty for failure to establish family self-
sufficiency plan.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is
amended--
(A) in the paragraph heading, by inserting ``or
establish family self-sufficiency plan'' after
``rates''; and
(B) in subparagraph (A), by inserting ``or 408(b)''
after ``407(a)''.
SEC. 8110. WORK PARTICIPATION REQUIREMENTS.
(a) In General.--Section 407 (42 U.S.C. 607) is amended by striking
all that precedes subsection (b)(3) and inserting the following:
``SEC. 407. WORK PARTICIPATION REQUIREMENTS.
``(a) Participation Rate Requirements.--A State to which a grant is
made under section 403 for a fiscal year shall achieve a minimum
participation rate equal to not less than--
``(1) 50 percent for fiscal year 2006;
``(2) 55 percent for fiscal year 2007;
``(3) 60 percent for fiscal year 2008;
``(4) 65 percent for fiscal year 2009; and
``(5) 70 percent for fiscal year 2010 and each succeeding
fiscal year.
``(b) Calculation of Participation Rates.--
``(1) Average monthly rate.--For purposes of subsection
(a), the participation rate of a State for a fiscal year is the
average of the participation rates of the State for each month
in the fiscal year.
``(2) Monthly participation rates; incorporation of 40-hour
work week standard.--
``(A) In general.--For purposes of paragraph (1),
the participation rate of a State for a month is--
``(i) the total number of countable hours
(as defined in subsection (c)) with respect to
the counted families for the State for the
month; divided by
``(ii) 160 multiplied by the number of
counted families for the State for the month.
``(B) Counted families defined.--
``(i) In general.--In subparagraph (A), the
term `counted family' means, with respect to a
State and a month, a family that includes a
work-eligible individual and that receives
assistance in the month under the State program
funded under this part, subject to clause (ii).
``(ii) State option to exclude certain
families.--At the option of a State, the term
`counted family' shall not include--
``(I) a family in the first month
for which the family receives
assistance from a State program funded
under this part on the basis of the
most recent application for such
assistance;
``(II) on a case-by-case basis, a
family in which the youngest child has
not attained 12 months of age; or
``(III) a family that is subject to
a sanction under this part or part D,
but that has not been subject to such a
sanction for more than 3 months
(whether or not consecutive) in the
preceding 12-month period.
``(iii) State option to include individuals
receiving assistance under a tribal family
assistance plan or tribal work program.--At the
option of a State, the term `counted family'
may include families in the State that are
receiving assistance under a tribal family
assistance plan approved under section 412 or
under a tribal work program to which funds are
provided under this part.
``(C) Work-eligible individual defined.--In this
section, the term `work-eligible individual' means an
individual--
``(i) who is married or a single head of
household; and
``(ii) whose needs are (or, but for
sanctions under this part or part D, would be)
included in determining the amount of cash
assistance to be provided to the family under
the State program funded under this part.''.
(b) Recalibration of Caseload Reduction Credit.--
(1) In general.--Section 407(b)(3)(A)(ii) (42 U.S.C.
607(b)(3)(A)(ii)) is amended to read as follows:
``(ii) the average monthly number of
families that received assistance under the
State program funded under this part during the
base year.''.
(2) Conforming amendment.--Section 407(b)(3)(B) (42 U.S.C.
607(b)(3)(B)) is amended by striking ``and eligibility
criteria'' and all that follows through the close parenthesis
and inserting ``and the eligibility criteria in effect during
the then applicable base year''.
(3) Base year defined.--Section 407(b)(3) (42 U.S.C.
607(b)(3)) is amended by adding at the end the following:
``(C) Base year defined.--In this paragraph, the
term `base year' means, with respect to a fiscal year--
``(i) if the fiscal year is fiscal year
2006, fiscal year 1996;
``(ii) if the fiscal year is fiscal year
2007, fiscal year 1998;
``(iii) if the fiscal year is fiscal year
2008, fiscal year 2001; or
``(iv) if the fiscal year is fiscal year
2009 or any succeeding fiscal year, the then
4th preceding fiscal year.''.
(c) Superachiever Credit.--Section 407(b) (42 U.S.C. 607(b)) is
amended by striking paragraphs (4) and (5) and inserting the following:
``(4) Superachiever credit.--
``(A) In general.--The participation rate,
determined under paragraphs (1) and (2) of this
subsection, of a superachiever State for a fiscal year
shall be increased by the lesser of--
``(i) the amount (if any) of the
superachiever credit applicable to the State;
or
``(ii) the number of percentage points (if
any) by which the minimum participation rate
required by subsection (a) for the fiscal year
exceeds 50 percent.
``(B) Superachiever state.--For purposes of
subparagraph (A), a State is a superachiever State if
the State caseload for fiscal year 2001 has declined by
at least 60 percent from the State caseload for fiscal
year 1995.
``(C) Amount of credit.--The superachiever credit
applicable to a State is the number of percentage
points (if any) by which the decline referred to in
subparagraph (B) exceeds 60 percent.
``(D) Definitions.--In this paragraph:
``(i) State caseload for fiscal year
2001.--The term `State caseload for fiscal year
2001' means the average monthly number of
families that received assistance during fiscal
year 2001 under the State program funded under
this part.
``(ii) State caseload for fiscal year
1995.--The term `State caseload for fiscal year
1995' means the average monthly number of
families that received aid under the State plan
approved under part A (as in effect on
September 30, 1995) during fiscal year 1995.''.
(d) Countable Hours.--Section 407 (42 U.S.C. 607) is amended by
striking subsections (c) and (d) and inserting the following:
``(c) Countable Hours.--
``(1) Definition.--In subsection (b)(2), the term
`countable hours' means, with respect to a family for a month,
the total number of hours in the month in which any member of
the family who is a work-eligible individual is engaged in a
direct work activity or other activities specified by the State
(excluding an activity that does not address a purpose
specified in section 401(a)), subject to the other provisions
of this subsection.
``(2) Limitations.--Subject to such regulations as the
Secretary may prescribe:
``(A) Minimum weekly average of 24 hours of direct
work activities required.--If the work-eligible
individuals in a family are engaged in a direct work
activity for an average total of fewer than 24 hours
per week in a month, then the number of countable hours
with respect to the family for the month shall be zero.
``(B) Maximum weekly average of 16 hours of other
activities.--An average of not more than 16 hours per
week of activities specified by the State (subject to
the exclusion described in paragraph (1)) may be
considered countable hours in a month with respect to a
family.
``(3) Special rules.--For purposes of paragraph (1):
``(A) Participation in qualified activities.--
``(i) In general.--If, with the approval of
the State, the work-eligible individuals in a
family are engaged in 1 or more qualified
activities for an average total of at least 24
hours per week in a month, then all such
engagement in the month shall be considered
engagement in a direct work activity, subject
to clause (iii).
``(ii) Qualified activity defined.--The
term `qualified activity' means an activity
specified by the State (subject to the
exclusion described in paragraph (1)) that
meets such standards and criteria as the State
may specify, including--
``(I) substance abuse counseling or
treatment;
``(II) rehabilitation treatment and
services;
``(III) work-related education or
training directed at enabling the
family member to work;
``(IV) job search or job readiness
assistance; and
``(V) any other activity that
addresses a purpose specified in
section 401(a).
``(iii) Limitation.--
``(I) In general.--Except as
provided in subclause (II), clause (i)
shall not apply to a family for more
than 3 months in any period of 24
consecutive months.
``(II) Special rule applicable to
education and training.--A State may,
on a case-by-case basis, apply clause
(i) to a work-eligible individual so
that participation by the individual in
education or training, if needed to
permit the individual to complete a
certificate program or other work-
related education or training directed
at enabling the individual to fill a
known job need in a local area, may be
considered countable hours with respect
to the family of the individual for not
more than 4 months in any period of 24
consecutive months.
``(B) School attendance by teen head of
household.--The work-eligible members of a family shall
be considered to be engaged in a direct work activity
for an average of 40 hours per week in a month if the
family includes an individual who is married, or is a
single head of household, who has not attained 20 years
of age, and the individual--
``(i) maintains satisfactory attendance at
secondary school or the equivalent in the
month; or
``(ii) participates in education directly
related to employment for an average of at
least 20 hours per week in the month.
``(d) Direct Work Activity.--In this section, the term `direct work
activity' means--
``(1) unsubsidized employment;
``(2) subsidized private sector employment;
``(3) subsidized public sector employment;
``(4) on-the-job training;
``(5) supervised work experience; or
``(6) supervised community service.''.
(e) Penalties Against Individuals.--Section 407(e)(1) (42 U.S.C.
607(e)(1)) is amended to read as follows:
``(1) Reduction or termination of assistance.--
``(A) In general.--Except as provided in paragraph
(2), if an individual in a family receiving assistance
under a State program funded under this part fails to
engage in activities required in accordance with this
section, or other activities required by the State
under the program, and the family does not otherwise
engage in activities in accordance with the self-
sufficiency plan established for the family pursuant to
section 408(b), the State shall--
``(i) if the failure is partial or persists
for not more than 1 month--
``(I) reduce the amount of
assistance otherwise payable to the
family pro rata (or more, at the option
of the State) with respect to any
period during a month in which the
failure occurs; or
``(II) terminate all assistance to
the family, subject to such good cause
exceptions as the State may establish;
or
``(ii) if the failure is total and persists
for at least 2 consecutive months, terminate
all cash payments to the family including
qualified State expenditures (as defined in
section 409(a)(7)(B)(i)) for at least 1 month
and thereafter until the State determines that
the individual has resumed full participation
in the activities, subject to such good cause
exceptions as the State may establish.
``(B) Special rule.--
``(i) In general.--In the event of a
conflict between a requirement of clause
(i)(II) or (ii) of subparagraph (A) and a
requirement of a State constitution, or of a
State statute that, before 1966, obligated
local government to provide assistance to needy
parents and children, the State constitutional
or statutory requirement shall control.
``(ii) Limitation.--Clause (i) of this
subparagraph shall not apply after the 1-year
period that begins with the date of the
enactment of this subparagraph.''.
(f) Conforming Amendments.--
(1) Section 407(f) (42 U.S.C. 607(f)) is amended in each of
paragraphs (1) and (2) by striking ``work activity described in
subsection (d)'' and inserting ``direct work activity''.
(2) The heading of section 409(a)(14) (42 U.S.C.
609(a)(14)) is amended by inserting ``or refusing to engage in
activities under a family self-sufficiency plan'' after
``work''.
SEC. 8111. MAINTENANCE OF EFFORT.
(a) In General.--Section 409(a)(7) (42 U.S.C. 609(a)(7)) is
amended--
(1) in subparagraph (A), by striking ``fiscal year 1998,
1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, or 2007'' and
inserting ``fiscal year 2006, 2007, 2008, 2009, 2010, or
2011''; and
(2) in subparagraph (B)(ii)--
(A) by inserting ``preceding'' before ``fiscal
year''; and
(B) by striking ``for fiscal years 1997 through
2006,''.
(b) State Spending on Promoting Healthy Marriage.--
(1) In general.--Section 404 (42 U.S.C. 604) is amended by
adding at the end the following:
``(l) Marriage Promotion.--A State, territory, or tribal
organization to which a grant is made under section 403(a)(2) may use a
grant made to the State, territory, or tribe under any other provision
of section 403 for marriage promotion activities, and the amount of any
such grant so used shall be considered State funds for purposes of
section 403(a)(2).''.
(2) Federal tanf funds used for marriage promotion
disregarded for purposes of maintenance of effort
requirement.--Section 409(a)(7)(B)(i) (42 U.S.C.
609(a)(7)(B)(i)), as amended by section 8103(c) of this Act, is
amended by adding at the end the following:
``(VI) Exclusion of federal tanf
funds used for marriage promotion
activities.--Such term does not include
the amount of any grant made to the
State under section 403 that is
expended for a marriage promotion
activity.''.
SEC. 8112. PERFORMANCE IMPROVEMENT.
(a) State Plans.--Section 402(a) (42 U.S.C. 602(a)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A)--
(i) by redesignating clause (vi) and clause
(vii) (as added by section 8103(a) of this Act)
as clauses (vii) and (viii), respectively; and
(ii) by striking clause (v) and inserting
the following:
``(v) The document shall--
``(I) describe how the State will
pursue ending dependence of needy
families on government benefits and
reducing poverty by promoting job
preparation and work;
``(II) describe how the State will
encourage the formation and maintenance
of healthy 2-parent married families,
encourage responsible fatherhood, and
prevent and reduce the incidence of
out-of-wedlock pregnancies;
``(III) include specific,
numerical, and measurable performance
objectives for accomplishing subclauses
(I) and (II); and
``(IV) describe the methodology
that the State will use to measure
State performance in relation to each
such objective.
``(vi) Describe any strategies and programs
the State may be undertaking to address--
``(I) employment retention and
advancement for recipients of
assistance under the program, including
placement into high-demand jobs, and
whether the jobs are identified using
labor market information;
``(II) efforts to reduce teen
pregnancy;
``(III) services for struggling and
noncompliant families, and for clients
with special problems; and
``(IV) program integration,
including the extent to which
employment and training services under
the program are provided through the
One-Stop delivery system created under
the Workforce Investment Act of 1998,
and the extent to which former
recipients of such assistance have
access to additional core, intensive,
or training services funded through
such Act.''; and
(B) in subparagraph (B), by striking clause (iii)
(as so redesignated by section 8107(b)(1) of this Act)
and inserting the following:
``(iii) The document shall describe
strategies and programs the State is
undertaking to engage religious organizations
in the provision of services funded under this
part and efforts related to section 104 of the
Personal Responsibility and Work Opportunity
Reconciliation Act of 1996.
``(iv) The document shall describe
strategies to improve program management and
performance.''; and
(2) in paragraph (4), by inserting ``and tribal'' after
``that local''.
(b) Consultation With State Regarding Plan and Design of Tribal
Programs.--Section 412(b)(1) (42 U.S.C. 612(b)(1)) is amended--
(1) by striking ``and'' at the end of subparagraph (E);
(2) by striking the period at the end of subparagraph (F)
and inserting ``; and''; and
(3) by adding at the end the following:
``(G) provides an assurance that the State in which
the tribe is located has been consulted regarding the
plan and its design.''.
(c) Performance Measures.--Section 413 (42 U.S.C. 613) is amended
by adding at the end the following:
``(k) Performance Improvement.--The Secretary, in consultation with
the States, shall develop uniform performance measures designed to
assess the degree of effectiveness, and the degree of improvement, of
State programs funded under this part in accomplishing the purposes of
this part.''.
(d) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C.
613(d)(1)) is amended by striking ``long-term private sector jobs'' and
inserting ``private sector jobs, the success of the recipients in
retaining employment, the ability of the recipients to increase their
wages''.
SEC. 8113. DATA COLLECTION AND REPORTING.
(a) Contents of Report.--Section 411(a)(1)(A) (42 U.S.C.
611(a)(1)(A)) is amended--
(1) in the matter preceding clause (i), by inserting ``and
on families receiving assistance under State programs funded
with other qualified State expenditures (as defined in section
409(a)(7)(B))'' before the colon;
(2) in clause (vii), by inserting ``and minor parent''
after ``of each adult'';
(3) in clause (viii), by striking ``and educational
level'';
(4) in clause (ix), by striking ``, and if the latter 2,
the amount received'';
(5) in clause (x)--
(A) by striking ``each type of''; and
(B) by inserting before the period ``and, if
applicable, the reason for receipt of the assistance
for a total of more than 60 months'';
(6) in clause (xi), by striking the subclauses and
inserting the following:
``(I) Subsidized private sector
employment.
``(II) Unsubsidized employment.
``(III) Public sector employment,
supervised work experience, or
supervised community service.
``(IV) On-the-job training.
``(V) Job search and placement.
``(VI) Training.
``(VII) Education.
``(VIII) Other activities directed
at the purposes of this part, as
specified in the State plan submitted
pursuant to section 402.'';
(7) in clause (xii), by inserting ``and progress toward
universal engagement'' after ``participation rates'';
(8) in clause (xiii), by striking ``type and'';
(9) in clause (xvi), by striking subclause (II) and
redesignating subclauses (III) through (V) as subclauses (II)
through (IV), respectively; and
(10) by adding at the end the following:
``(xviii) The date the family first
received assistance from the State program on
the basis of the most recent application for
such assistance.
``(xix) Whether a self-sufficiency plan is
established for the family in accordance with
section 408(b).
``(xx) With respect to any child in the
family, the marital status of the parents at
the birth of the child, and if the parents were
not then married, whether the paternity of the
child has been established.''.
(b) Use of Samples.--Section 411(a)(1)(B) (42 U.S.C. 611(a)(1)(B))
is amended--
(1) in clause (i)--
(A) by striking ``a sample'' and inserting
``samples''; and
(B) by inserting before the period ``, except that
the Secretary may designate core data elements that
must be reported on all families''; and
(2) in clause (ii), by striking ``funded under this part''
and inserting ``described in subparagraph (A)''.
(c) Report on Families That Become Ineligible to Receive
Assistance.--Section 411(a) (42 U.S.C. 611(a)) is amended--
(1) by striking paragraph (5);
(2) by redesignating paragraph (6) as paragraph (5); and
(3) by inserting after paragraph (5) (as so redesignated)
the following:
``(6) Report on families that become ineligible to receive
assistance.--The report required by paragraph (1) for a fiscal
quarter shall include for each month in the quarter the number
of families and total number of individuals that, during the
month, became ineligible to receive assistance under the State
program funded under this part (broken down by the number of
families that become so ineligible due to earnings, changes in
family composition that result in increased earnings,
sanctions, time limits, or other specified reasons).''.
(d) Regulations.--Section 411(a)(7) (42 U.S.C. 611(a)(7)) is
amended--
(1) by inserting ``and to collect the necessary data''
before ``with respect to which reports'';
(2) by striking ``subsection'' and inserting ``section'';
and
(3) by striking ``in defining the data elements'' and all
that follows and inserting ``, the National Governors'
Association, the American Public Human Services Association,
the National Conference of State Legislatures, and others in
defining the data elements.''.
(e) Additional Reports by States.--Section 411 (42 U.S.C. 611) is
amended--
(1) by redesignating subsection (b) as subsection (e); and
(2) by inserting after subsection (a) the following:
``(b) Annual Reports on Program Characteristics.--Not later than 90
days after the end of fiscal year 2006 and each succeeding fiscal year,
each eligible State shall submit to the Secretary a report on the
characteristics of the State program funded under this part and other
State programs funded with qualified State expenditures (as defined in
section 409(a)(7)(B)(i)). The report shall include, with respect to
each such program, the program name, a description of program
activities, the program purpose, the program eligibility criteria, the
sources of program funding, the number of program beneficiaries,
sanction policies, and any program work requirements.
``(c) Monthly Reports on Caseload.--Not later than 3 months after
the end of a calendar month that begins 1 year or more after the
enactment of this subsection, each eligible State shall submit to the
Secretary a report on the number of families and total number of
individuals receiving assistance in the calendar month under the State
program funded under this part.
``(d) Annual Report on Performance Improvement.--Beginning with
fiscal year 2007, not later than January 1 of each fiscal year, each
eligible State shall submit to the Secretary a report on achievement
and improvement during the preceding fiscal year under the numerical
performance goals and measures under the State program funded under
this part with respect to each of the matters described in section
402(a)(1)(A)(v).''.
(f) Annual Reports to Congress by the Secretary.--Section 411(e),
as so redesignated by subsection (e) of this section, is amended--
(1) in the matter preceding paragraph (1), by striking
``and each fiscal year thereafter'' and inserting ``and by July
1 of each fiscal year thereafter'';
(2) in paragraph (2), by striking ``families applying for
assistance,'' and by striking the last comma; and
(3) in paragraph (3), by inserting ``and other programs
funded with qualified State expenditures (as defined in section
409(a)(7)(B)(i))'' before the semicolon.
(g) Increased Analysis of State Single Audit Reports.--Section 411
(42 U.S.C. 611) is amended by adding at the end the following:
``(f) Increased Analysis of State Single Audit Reports.--
``(1) In general.--Within 3 months after a State submits to
the Secretary a report pursuant to section 7502(a)(1)(A) of
title 31, United States Code, the Secretary shall analyze the
report for the purpose of identifying the extent and nature of
problems related to the oversight by the State of
nongovernmental entities with respect to contracts entered into
by such entities with the State program funded under this part,
and determining what additional actions may be appropriate to
help prevent and correct the problems.
``(2) Inclusion of program oversight section in annual
report to the congress.--The Secretary shall include in each
report under subsection (e) a section on oversight of State
programs funded under this part, including findings on the
extent and nature of the problems referred to in paragraph (1),
actions taken to resolve the problems, and to the extent the
Secretary deems appropriate make recommendations on changes
needed to resolve the problems.''.
SEC. 8114. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.
(a) Tribal Family Assistance Grant.--Section 412(a)(1)(A) (42
U.S.C. 612(a)(1)(A)) is amended by striking ``1997, 1998, 1999, 2000,
2001, 2002, and 2003'' and inserting ``2006 through 2010''.
(b) Grants for Indian Tribes That Received JOBS Funds.--Section
412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)) is amended by striking ``1997,
1998, 1999, 2000, 2001, 2002, and 2003'' and inserting ``2006 through
2010''.
SEC. 8115. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.
(a) Secretary's Fund for Research, Demonstrations, and Technical
Assistance.--Section 413 (42 U.S.C. 613), as amended by section 8112(c)
of this Act, is further amended by adding at the end the following:
``(l) Funding for Research, Demonstrations, and Technical
Assistance.--
``(1) Appropriation.--Out of any money in the Treasury of
the United States not otherwise appropriated, there are
appropriated $102,000,000 for each of fiscal years 2006 through
2010, which shall be available to the Secretary for the purpose
of conducting and supporting research and demonstration
projects by public or private entities, and providing technical
assistance to States, Indian tribal organizations, and such
other entities as the Secretary may specify that are receiving
a grant under this part, which shall be expended primarily on
activities described in section 403(a)(2)(B), and which shall
be in addition to any other funds made available under this
part. The Secretary may not provide an entity with funds made
available under this paragraph unless the entity agrees that,
as a condition of receipt of the funds for a program or
activity described in any of clauses (iii) through (viii) of
section 403(a)(2)(B), the entity will comply with subclauses
(I) and (II) of section 403(a)(2)(C)(ii).
``(2) Set aside for demonstration projects for coordination
of provision of child welfare and tanf services to tribal
families at risk of child abuse or neglect.--
``(A) In general.--Of the amounts made available
under paragraph (1) for a fiscal year, $2,000,000 shall
be awarded on a competitive basis to fund demonstration
projects designed to test the effectiveness of tribal
governments or tribal consortia in coordinating the
provision to tribal families at risk of child abuse or
neglect of child welfare services and services under
tribal programs funded under this part.
``(B) Use of funds.--A grant made to such a project
shall be used--
``(i) to improve case management for
families eligible for assistance from such a
tribal program;
``(ii) for supportive services and
assistance to tribal children in out-of-home
placements and the tribal families caring for
such children, including families who adopt
such children; and
``(iii) for prevention services and
assistance to tribal families at risk of child
abuse and neglect.
``(C) Reports.--The Secretary may require a
recipient of funds awarded under this paragraph to
provide the Secretary with such information as the
Secretary deems relevant to enable the Secretary to
facilitate and oversee the administration of any
project for which funds are provided under this
paragraph.''.
(b) Funding of Studies and Demonstrations.--Section 413(h)(1) (42
U.S.C. 613(h)(1)) is amended in the matter preceding subparagraph (A)
by striking ``1997 through 2002'' and inserting ``2006 through 2010''.
(c) Report on Enforcement of Certain Affidavits of Support and
Sponsor Deeming.--Not later than March 31, 2006, the Secretary of
Health and Human Services, in consultation with the Attorney General,
shall submit to the Congress a report on the enforcement of affidavits
of support and sponsor deeming as required by section 421, 422, and 432
of the Personal Responsibility and Work Opportunity Reconciliation Act
of 1996.
(d) Report on Coordination.--Not later than 6 months after the date
of the enactment of this Act, the Secretary of Health and Human
Services and the Secretary of Labor shall jointly submit a report to
the Congress describing common or conflicting data elements,
definitions, performance measures, and reporting requirements in the
Workforce Investment Act of 1998 and part A of title IV of the Social
Security Act, and, to the degree each Secretary deems appropriate, at
the discretion of either Secretary, any other program administered by
the respective Secretary, to allow greater coordination between the
welfare and workforce development systems.
SEC. 8116. STUDY BY THE CENSUS BUREAU.
(a) In General.--Section 414(a) (42 U.S.C. 614(a)) is amended to
read as follows:
``(a) In General.--The Bureau of the Census shall implement or
enhance a longitudinal survey of program participation, developed in
consultation with the Secretary and made available to interested
parties, to allow for the assessment of the outcomes of continued
welfare reform on the economic and child well-being of low-income
families with children, including those who received assistance or
services from a State program funded under this part, and, to the
extent possible, shall provide State representative samples. The
content of the survey should include such information as may be
necessary to examine the issues of out-of-wedlock childbearing,
marriage, welfare dependency and compliance with work requirements, the
beginning and ending of spells of assistance, work, earnings and
employment stability, and the well-being of children.''.
(b) Appropriation.--Section 414(b) (42 U.S.C. 614(b)) is amended--
(1) by striking ``1996,'' and all that follows through
``2003'' and inserting ``2006 through 2010''; and
(2) by adding at the end the following: ``Funds
appropriated under this subsection shall remain available
through fiscal year 2010 to carry out subsection (a).''.
SEC. 8117. DEFINITION OF ASSISTANCE.
(a) In General.--Section 419 (42 U.S.C. 619) is amended by adding
at the end the following:
``(6) Assistance.--
``(A) In general.--The term `assistance' means
payment, by cash, voucher, or other means, to or for an
individual or family for the purpose of meeting a
subsistence need of the individual or family (including
food, clothing, shelter, and related items, but not
including costs of transportation or child care).
``(B) Exception.--The term `assistance' does not
include a payment described in subparagraph (A) to or
for an individual or family on a short-term,
nonrecurring basis (as defined by the State in
accordance with regulations prescribed by the
Secretary).''.
(b) Conforming Amendments.--
(1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is amended by
striking ``assistance'' and inserting ``aid''.
(2) Section 404(f) (42 U.S.C. 604(f)) is amended by
striking ``assistance'' and inserting ``benefits or services''.
(3) Section 408(a)(5)(B)(i) (42 U.S.C. 608(a)(5)(B)(i)) is
amended in the heading by striking ``assistance'' and inserting
``aid''.
(4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is amended by
striking ``assistance'' and inserting ``aid''.
SEC. 8118. TECHNICAL CORRECTIONS.
(a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended by inserting
a comma after ``appropriate''.
(b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 611(a)(1)(A)(ii)(III))
is amended by striking the last close parenthesis.
(c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is amended by
striking ``section'' and inserting ``sections''.
(d)(1) Section 413 (42 U.S.C. 613) is amended by striking
subsection (g) and redesignating subsections (h) through (j) and
subsections (k) and (l) (as added by sections 8112(c) and 8115(a) of
this Act, respectively) as subsections (g) through (k), respectively.
(2) Each of the following provisions is amended by striking
``413(j)'' and inserting ``413(i)'':
(A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C.
603(a)(5)(A)(ii)(III)).
(B) Section 403(a)(5)(F) (42 U.S.C. 603(a)(5)(F)).
(C) Section 403(a)(5)(G)(ii) (42 U.S.C. 603(a)(5)(G)(ii)).
(D) Section 412(a)(3)(B)(iv) (42 U.S.C. 612(a)(3)(B)(iv)).
SEC. 8119. FATHERHOOD PROGRAM.
(a) Short Title.--This section may be cited as the ``Promotion and
Support of Responsible Fatherhood and Healthy Marriage Act of 2005''.
(b) Fatherhood Program.--
(1) In general.--Title I of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (Public Law 104-
193) is amended by adding at the end the following:
``SEC. 117. FATHERHOOD PROGRAM.
``(a) In General.--Title IV (42 U.S.C. 601-679b) is amended by
inserting after part B the following:
`PART C--FATHERHOOD PROGRAM
`SEC. 441. FINDINGS AND PURPOSES.
`(a) Findings.--The Congress finds that there is substantial
evidence strongly indicating the urgent need to promote and support
involved, committed, and responsible fatherhood, and to encourage and
support healthy marriages between parents raising children, including
data demonstrating the following:
`(1) In approximately 84 percent of cases where a parent is
absent, that parent is the father.
`(2) If current trends continue, half of all children born
today will live apart from one of their parents, usually their
father, at some point before they turn 18.
`(3) Where families (whether intact or with a parent
absent) are living in poverty, a significant factor is the
father's lack of job skills.
`(4) Committed and responsible fathering during infancy and
early childhood contributes to the development of emotional
security, curiosity, and math and verbal skills.
`(5) An estimated 19,400,000 children (27 percent) live
apart from their biological father.
`(6) Forty percent of children under age 18 not living with
their biological father had not seen their father even once in
the last 12 months, according to national survey data.
`(b) Purposes.--The purposes of this part are:
`(1) To provide for projects and activities by public
entities and by nonprofit community entities, including
religious organizations, designed to test promising approaches
to accomplishing the following objectives:
`(A) Promoting responsible, caring, and effective
parenting through counseling, mentoring, and parenting
education, dissemination of educational materials and
information on parenting skills, encouragement of
positive father involvement, including the positive
involvement of nonresident fathers, and other methods.
`(B) Enhancing the abilities and commitment of
unemployed or low-income fathers to provide material
support for their families and to avoid or leave
welfare programs by assisting them to take full
advantage of education, job training, and job search
programs, to improve work habits and work skills, to
secure career advancement by activities such as
outreach and information dissemination, coordination,
as appropriate, with employment services and job
training programs, including the One-Stop delivery
system established under title I of the Workforce
Investment Act of 1998, encouragement and support of
timely payment of current child support and regular
payment toward past due child support obligations in
appropriate cases, and other methods.
`(C) Improving fathers' ability to effectively
manage family business affairs by means such as
education, counseling, and mentoring in matters
including household management, budgeting, banking, and
handling of financial transactions, time management,
and home maintenance.
`(D) Encouraging and supporting healthy marriages
and married fatherhood through such activities as
premarital education, including the use of premarital
inventories, marriage preparation programs, skills-
based marriage education programs, marital therapy,
couples counseling, divorce education and reduction
programs, divorce mediation and counseling,
relationship skills enhancement programs, including
those designed to reduce child abuse and domestic
violence, and dissemination of information about the
benefits of marriage for both parents and children.
`(2) Through the projects and activities described in
paragraph (1), to improve outcomes for children with respect to
measures such as increased family income and economic security,
improved school performance, better health, improved emotional
and behavioral stability and social adjustment, and reduced
risk of delinquency, crime, substance abuse, child abuse and
neglect, teen sexual activity, and teen suicide.
`(3) To evaluate the effectiveness of various approaches
and to disseminate findings concerning outcomes and other
information in order to encourage and facilitate the
replication of effective approaches to accomplishing these
objectives.
`SEC. 442. DEFINITIONS.
`In this part, the terms ``Indian tribe'' and ``tribal
organization'' have the meanings given them in subsections (e) and (l),
respectively, of section 4 of the Indian Self-Determination and
Education Assistance Act.
`SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.
`(a) In General.--The Secretary may make grants for fiscal years
2006 through 2010 to public and nonprofit community entities, including
religious organizations, and to Indian tribes and tribal organizations,
for demonstration service projects and activities designed to test the
effectiveness of various approaches to accomplish the objectives
specified in section 441(b)(1).
`(b) Eligibility Criteria for Full Service Grants.--In order to be
eligible for a grant under this section, except as specified in
subsection (c), an entity shall submit an application to the Secretary
containing the following:
`(1) Project description.--A statement including--
`(A) a description of the project and how it will
be carried out, including the geographical area to be
covered and the number and characteristics of clients
to be served, and how it will address each of the 4
objectives specified in section 441(b)(1); and
`(B) a description of the methods to be used by the
entity or its contractor to assess the extent to which
the project was successful in accomplishing its
specific objectives and the general objectives
specified in section 441(b)(1).
`(2) Experience and qualifications.--A demonstration of
ability to carry out the project, by means such as
demonstration of experience in successfully carrying out
projects of similar design and scope, and such other
information as the Secretary may find necessary to demonstrate
the entity's capacity to carry out the project, including the
entity's ability to provide the non-Federal share of project
resources.
`(3) Addressing child abuse and neglect and domestic
violence.--A description of how the entity will assess for the
presence of, and intervene to resolve, domestic violence and
child abuse and neglect, including how the entity will
coordinate with State and local child protective service and
domestic violence programs.
`(4) Addressing concerns relating to substance abuse and
sexual activity.--A commitment to make available to each
individual participating in the project education about
alcohol, tobacco, and other drugs, and about the health risks
associated with abusing such substances, and information about
diseases and conditions transmitted through substance abuse and
sexual contact, including HIV/AIDS, and to coordinate with
providers of services addressing such problems, as appropriate.
`(5) Coordination with specified programs.--An undertaking
to coordinate, as appropriate, with State and local entities
responsible for the programs under parts A, B, and D of this
title, including programs under title I of the Workforce
Investment Act of 1998 (including the One-Stop delivery
system), and such other programs as the Secretary may require.
`(6) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits as the Secretary may find necessary for
purposes of oversight of project activities and expenditures.
`(7) Self-initiated evaluation.--If the entity elects to
contract for independent evaluation of the project (part or all
of the cost of which may be paid for using grant funds), a
commitment to submit to the Secretary a copy of the evaluation
report within 30 days after completion of the report and not
more than 1 year after completion of the project.
`(8) Cooperation with secretary's oversight and
evaluation.--An agreement to cooperate with the Secretary's
evaluation of projects assisted under this section, by means
including random assignment of clients to service recipient and
control groups, if determined by the Secretary to be
appropriate, and affording the Secretary access to the project
and to project-related records and documents, staff, and
clients.
`(c) Eligibility Criteria for Limited Purpose Grants.--In order to
be eligible for a grant under this section in an amount under $25,000
per fiscal year, an entity shall submit an application to the Secretary
containing the following:
`(1) Project description.--A description of the project and
how it will be carried out, including the number and
characteristics of clients to be served, the proposed duration
of the project, and how it will address at least 1 of the 4
objectives specified in section 441(b)(1).
`(2) Qualifications.--Such information as the Secretary may
require as to the capacity of the entity to carry out the
project, including any previous experience with similar
activities.
`(3) Coordination with related programs.--As required by
the Secretary in appropriate cases, an undertaking to
coordinate and cooperate with State and local entities
responsible for specific programs relating to the objectives of
the project including, as appropriate, jobs programs and
programs serving children and families.
`(4) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits as the Secretary may find necessary for
purposes of oversight of project activities and expenditures.
`(5) Cooperation with secretary's oversight and
evaluation.--An agreement to cooperate with the Secretary's
evaluation of projects assisted under this section, by means
including affording the Secretary access to the project and to
project-related records and documents, staff, and clients.
`(d) Considerations in Awarding Grants.--
`(1) Diversity of projects.--In awarding grants under this
section, the Secretary shall seek to achieve a balance among
entities of differing sizes, entities in differing geographic
areas, entities in urban and in rural areas, and entities
employing differing methods of achieving the purposes of this
section, including working with the State agency responsible
for the administration of part D to help fathers satisfy child
support arrearage obligations.
`(2) Preference for projects serving low-income fathers.--
In awarding grants under this section, the Secretary may give
preference to applications for projects in which a majority of
the clients to be served are low-income fathers.
`(e) Federal Share.--
`(1) In general.--Grants for a project under this section
for a fiscal year shall be available for a share of the cost of
such project in such fiscal year equal to--
`(A) up to 80 percent (or up to 90 percent, if the
entity demonstrates to the Secretary's satisfaction
circumstances limiting the entity's ability to secure
non-Federal resources) in the case of a project under
subsection (b); and
`(B) up to 100 percent, in the case of a project
under subsection (c).
`(2) Non-federal share.--The non-Federal share may be in
cash or in kind. In determining the amount of the non-Federal
share, the Secretary may attribute fair market value to goods,
services, and facilities contributed from non-Federal sources.
`SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.
`(a) In General.--The Secretary may make grants under this section
for fiscal years 2006 through 2010 to eligible entities (as specified
in subsection (b)) for 2 multicity, multistate projects demonstrating
approaches to achieving the objectives specified in section 441(b)(1).
One of the projects shall test the use of married couples to deliver
program services.
`(b) Eligible Entities.--An entity eligible for a grant under this
section must be a national nonprofit fatherhood promotion organization
that meets the following requirements:
`(1) Experience with fatherhood programs.--The organization
must have substantial experience in designing and successfully
conducting programs that meet the purposes described in section
441.
`(2) Experience with multicity, multistate programs and
government coordination.--The organization must have experience
in simultaneously conducting such programs in more than 1 major
metropolitan area in more than 1 State and in coordinating such
programs, where appropriate, with State and local government
agencies and private, nonprofit agencies (including community-
based and religious organizations), including State or local
agencies responsible for child support enforcement and
workforce development.
`(c) Application Requirements.--In order to be eligible for a grant
under this section, an entity must submit to the Secretary an
application that includes the following:
`(1) Qualifications.--
`(A) Eligible entity.--A demonstration that the
entity meets the requirements of subsection (b).
`(B) Other.--Such other information as the
Secretary may find necessary to demonstrate the
entity's capacity to carry out the project, including
the entity's ability to provide the non-Federal share
of project resources.
`(2) Project description.--A description of and commitments
concerning the project design, including the following:
`(A) In general.--A detailed description of the
proposed project design and how it will be carried out,
which shall--
`(i) provide for the project to be
conducted in at least 3 major metropolitan
areas;
`(ii) state how it will address each of the
4 objectives specified in section 441(b)(1);
`(iii) demonstrate that there is a
sufficient number of potential clients to allow
for the random selection of individuals to
participate in the project and for comparisons
with appropriate control groups composed of
individuals who have not participated in such
projects; and
`(iv) demonstrate that the project is
designed to direct a majority of project
resources to activities serving low-income
fathers (but the project need not make services
available on a means-tested basis).
`(B) Oversight, evaluation, and adjustment
component.--An agreement that the entity--
`(i) in consultation with the evaluator
selected pursuant to section 445, and as
required by the Secretary, will modify the
project design, initially and (if necessary)
subsequently throughout the duration of the
project, in order to facilitate ongoing and
final oversight and evaluation of project
operation and outcomes (by means including, to
the maximum extent feasible, random assignment
of clients to service recipient and control
groups), and to provide for mid-course
adjustments in project design indicated by
interim evaluations;
`(ii) will submit to the Secretary revised
descriptions of the project design as modified
in accordance with clause (i); and
`(iii) will cooperate fully with the
Secretary's ongoing oversight and ongoing and
final evaluation of the project, by means
including affording the Secretary access to the
project and to project-related records and
documents, staff, and clients.
`(3) Addressing child abuse and neglect and domestic
violence.--A description of how the entity will assess for the
presence of, and intervene to resolve, domestic violence and
child abuse and neglect, including how the entity will
coordinate with State and local child protective service and
domestic violence programs.
`(4) Addressing concerns relating to substance abuse and
sexual activity.--A commitment to make available to each
individual participating in the project education about
alcohol, tobacco, and other drugs, and about the health risks
associated with abusing such substances, and information about
diseases and conditions transmitted through substance abuse and
sexual contact, including HIV/AIDS, and to coordinate with
providers of services addressing such problems, as appropriate.
`(5) Coordination with specified programs.--An undertaking
to coordinate, as appropriate, with State and local entities
responsible for the programs funded under parts A, B, and D of
this title, programs under title I of the Workforce Investment
Act of 1998 (including the One-Stop delivery system), and such
other programs as the Secretary may require.
`(6) Records, reports, and audits.--An agreement to
maintain such records, make such reports, and cooperate with
such reviews or audits (in addition to those required under the
preceding provisions of paragraph (2)) as the Secretary may
find necessary for purposes of oversight of project activities
and expenditures.
`(d) Federal Share.--
`(1) In general.--Grants for a project under this section
for a fiscal year shall be available for up to 80 percent of
the cost of such project in such fiscal year.
`(2) Non-federal share.--The non-Federal share may be in
cash or in kind. In determining the amount of the non-Federal
share, the Secretary may attribute fair market value to goods,
services, and facilities contributed from non-Federal sources.
`SEC. 445. EVALUATION.
`(a) In General.--The Secretary, directly or by contract or
cooperative agreement, shall evaluate the effectiveness of service
projects funded under sections 443 and 444 from the standpoint of the
purposes specified in section 441(b)(1).
`(b) Evaluation Methodology.--Evaluations under this section
shall--
`(1) include, to the maximum extent feasible, random
assignment of clients to service delivery and control groups
and other appropriate comparisons of groups of individuals
receiving and not receiving services;
`(2) describe and measure the effectiveness of the projects
in achieving their specific project goals; and
`(3) describe and assess, as appropriate, the impact of
such projects on marriage, parenting, domestic violence, child
abuse and neglect, money management, employment and earnings,
payment of child support, and child well-being, health, and
education.
`(c) Evaluation Reports.--The Secretary shall publish the following
reports on the results of the evaluation:
`(1) An implementation evaluation report covering the first
24 months of the activities under this part to be completed by
36 months after initiation of such activities.
`(2) A final report on the evaluation to be completed by
September 30, 2013.
`SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE.
`The Secretary is authorized, by grant, contract, or cooperative
agreement, to carry out projects and activities of national
significance relating to fatherhood promotion, including--
`(1) Collection and dissemination of information.--
Assisting States, communities, and private entities, including
religious organizations, in efforts to promote and support
marriage and responsible fatherhood by collecting, evaluating,
developing, and making available (through the Internet and by
other means) to all interested parties information regarding
approaches to accomplishing the objectives specified in section
441(b)(1).
`(2) Media campaign.--Developing, promoting, and
distributing to interested States, local governments, public
agencies, and private nonprofit organizations, including
charitable and religious organizations, a media campaign that
promotes and encourages involved, committed, and responsible
fatherhood and married fatherhood.
`(3) Technical assistance.--Providing technical assistance,
including consultation and training, to public and private
entities, including community organizations and faith-based
organizations, in the implementation of local fatherhood
promotion programs.
`(4) Research.--Conducting research related to the purposes
of this part.
`SEC. 447. NONDISCRIMINATION.
`The projects and activities assisted under this part shall be
available on the same basis to all fathers and expectant fathers able
to benefit from such projects and activities, including married and
unmarried fathers and custodial and noncustodial fathers, with
particular attention to low-income fathers, and to mothers and
expectant mothers on the same basis as to fathers.
`SEC. 448. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR CERTAIN
PURPOSE.
`(a) Authorization.--There are authorized to be appropriated
$20,000,000 for each of fiscal years 2006 through 2010 to carry out the
provisions of this part.
`(b) Reservation.--Of the amount appropriated under this section
for each fiscal year, not more than 15 percent shall be available for
the costs of the multicity, multicounty, multistate demonstration
projects under section 444, evaluations under section 445, and projects
of national significance under section 446.'.
``(b) Inapplicability of Effective Date Provisions.--Section 116
shall not apply to the amendment made by subsection (a) of this
section.''.
(2) Clerical amendment.--Section 2 of such Act is amended
in the table of contents by inserting after the item relating
to section 116 the following new item:
``Sec. 117. Fatherhood program.''.
SEC. 8120. STATE OPTION TO MAKE TANF PROGRAMS MANDATORY PARTNERS WITH
ONE-STOP EMPLOYMENT TRAINING CENTERS.
Section 408 of the Social Security Act (42 U.S.C. 608) is amended
by adding at the end the following:
``(h) State Option to Make TANF Programs Mandatory Partners With
One-Stop Employment Training Centers.--For purposes of section 121(b)
of the Workforce Investment Act of 1998, a State program funded under
part A of title IV of the Social Security Act shall be considered a
program referred to in paragraph (1)(B) of such section, unless, after
the date of the enactment of this subsection, the Governor of the State
notifies the Secretaries of Health and Human Services and Labor in
writing of the decision of the Governor not to make the State program a
mandatory partner.''.
SEC. 8121. SENSE OF THE CONGRESS.
It is the sense of the Congress that a State welfare-to-work
program should include a mentoring program.
SEC. 8122. DRUG TESTING OF APPLICANTS FOR AND RECIPIENTS OF ASSISTANCE.
(a) Requirement.--Section 408(a) (42 U.S.C. 608(a)) is amended by
adding at the end the following:
``(12) Drug testing requirements.--A State to which a grant
is made under section 403(a) for a fiscal year shall--
``(A) require an individual who has applied for, or
is a recipient of, assistance from the State program
funded under this part to undergo a physical test
designed to detect the use by the individual of any
controlled substance (as defined in section 102(6) of
the Controlled Substances Act) if the State has reason
to believe that the person has unlawfully used such a
substance recently;
``(B) if a test administered pursuant to this
paragraph indicates that an individual has so used such
a substance recently, or if the State otherwise
determines (on the basis of such indicators as the
State may establish) that an individual is likely to
have so used such a substance recently--
``(i) ensure that the self-sufficiency plan
developed under section 408(b) with respect to
the individual addresses the use of the
substance;
``(ii) suspend the provision of cash
assistance under the program to the family of
the individual until a subsequent such test
indicates that the individual has not been
using the substance; and
``(iii) require, as a condition of
providing any benefit under the program to the
family of the individual, that the individual
comply with the self-sufficiency plan,
including the provisions of the plan that
address the use of the substance, and undergo
additional such tests every 30 or 60 days, as
the State deems appropriate; and
``(C) terminate for 3 years the participation in
the program of the family of any individual who tests
positive for such use of such a substance in such
number of consecutive tests administered pursuant to
this paragraph (which shall be not less than 3 and not
more than 6) as the State deems appropriate.''.
(b) Penalty for Noncompliance.--Section 409(a) (42 U.S.C. 609(a))
is amended by adding at the end the following:
``(15) Penalty for failure to comply with drug testing
requirements.--If the Secretary determines that a State has not
complied with section 408(a)(12) during a fiscal year, the
Secretary shall reduce the grant payable to the State under
section 403(a)(1) for the immediately succeeding fiscal year by
an amount equal to not less than 5 percent and not more than 10
percent of the State family assistance grant, as the Secretary
deems appropriate based on the frequency and severity of the
noncompliance.''.
Subtitle B--Child Care
SEC. 8201. ENTITLEMENT FUNDING.
Section 418(a)(3) (42 U.S.C. 618(a)(3)) is amended--
(1) by striking ``and'' at the end of subparagraph (E);
(2) by striking the period at the end of subparagraph (F)
and inserting a semicolon; and
(3) by adding at the end the following:
``(G) $2,717,000,000 for fiscal year 2006;
``(H) $2,767,000,000 for fiscal year 2007;
``(I) $2,817,000,000 for fiscal year 2008;
``(J) $2,867,000,000 for fiscal year 2009; and
``(K) $2,917,000,000 for fiscal year 2010.''.
Subtitle C--Child Support
SEC. 8301. FEDERAL MATCHING FUNDS FOR LIMITED PASS THROUGH OF CHILD
SUPPORT PAYMENTS TO FAMILIES RECEIVING TANF.
(a) In General.--Section 457(a) (42 U.S.C. 657(a)) is amended--
(1) in paragraph (1)(A), by inserting ``subject to
paragraph (7)'' before the semicolon; and
(2) by adding at the end the following:
``(7) Federal matching funds for limited pass through of
child support payments to families receiving tanf.--
Notwithstanding paragraph (1), a State shall not be required to
pay to the Federal Government the Federal share of an amount
collected during a month on behalf of a family that is a
recipient of assistance under the State program funded under
part A, to the extent that--
``(A) the State distributes the amount to the
family;
``(B) the total of the amounts so distributed to
the family during the month--
``(i) exceeds the amount (if any) that, as
of December 31, 2001, was required under State
law to be distributed to a family under
paragraph (1)(B); and
``(ii) does not exceed the greater of--
``(I) $100; or
``(II) $50 plus the amount
described in clause (i); and
``(C) the amount is disregarded in determining the
amount and type of assistance provided to the family
under the State program funded under part A.''.
(b) Applicability.--The amendments made by subsection (a) shall
apply to amounts distributed on or after October 1, 2008.
SEC. 8302. STATE OPTION TO PASS THROUGH ALL CHILD SUPPORT PAYMENTS TO
FAMILIES THAT FORMERLY RECEIVED TANF.
(a) In General.--Section 457(a) (42 U.S.C. 657(a)), as amended by
section 8301(a) of this Act, is amended--
(1) in paragraph (2)(B), in the matter preceding clause
(i), by inserting ``, except as provided in paragraph (8),''
after ``shall''; and
(2) by adding at the end the following:
``(8) State option to pass through all child support
payments to families that formerly received tanf.--In lieu of
applying paragraph (2) to any family described in paragraph
(2), a State may distribute to the family any amount collected
during a month on behalf of the family.''.
(b) Applicability.--The amendments made by subsection (a) shall
apply to amounts distributed on or after October 1, 2008.
SEC. 8303. MANDATORY REVIEW AND ADJUSTMENT OF CHILD SUPPORT ORDERS FOR
FAMILIES RECEIVING TANF.
(a) In General.--Section 466(a)(10)(A)(i) (42 U.S.C.
666(a)(10)(A)(i)) is amended--
(1) by striking ``parent, or,'' and inserting ``parent
or''; and
(2) by striking ``upon the request of the State agency
under the State plan or of either parent,''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect on October 1, 2007.
SEC. 8304. MANDATORY FEE FOR SUCCESSFUL CHILD SUPPORT COLLECTION FOR
FAMILY THAT HAS NEVER RECEIVED TANF.
(a) In General.--Section 454(6)(B) (42 U.S.C. 654(6)(B)) is
amended--
(1) by inserting ``(i)'' after ``(B)'';
(2) by redesignating clauses (i) and (ii) as subclauses (I)
and (II), respectively;
(3) by adding ``and'' after the semicolon; and
(4) by adding after and below the end the following new
clause:
``(ii) in the case of an individual who has never
received assistance under a State program funded under
part A and for whom the State has collected at least
$500 of support, the State shall impose an annual fee
of $25 for each case in which services are furnished,
which shall be retained by the State from support
collected on behalf of the individual (but not from the
1st $500 so collected), paid by the individual applying
for the services, recovered from the absent parent, or
paid by the State out of its own funds (the payment of
which from State funds shall not be considered as an
administrative cost of the State for the operation of
the plan, and such fees shall be considered income to
the program);''.
(b) Conforming Amendment.--Section 457(a)(3) (42 U.S.C. 657(a)(3))
is amended to read as follows:
``(3) Families that never received assistance.--In the case
of any other family, the State shall distribute to the family
the portion of the amount so collected that remains after
withholding any fee pursuant to section 454(6)(B)(ii).''.
(c) Effective Date.--The amendments made by this section shall take
effect on October 1, 2006.
SEC. 8305. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.
Not later than 6 months after the date of the enactment of this
Act, the Secretary of Health and Human Services shall submit to the
Committee on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate a report on the procedures that the
States use generally to locate custodial parents for whom child support
has been collected but not yet distributed. The report shall include an
estimate of the total amount of undistributed child support and the
average length of time it takes undistributed child support to be
distributed. To the extent the Secretary deems appropriate, the
Secretary shall include in the report recommendations as to whether
additional procedures should be established at the State or Federal
level to expedite the payment of undistributed child support.
SEC. 8306. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE TRIGGERING
PASSPORT DENIAL.
(a) In General.--Section 452(k)(1) (42 U.S.C. 652(k)(1)) is amended
by striking ``$5,000'' and inserting ``$2,500''.
(b) Conforming Amendment.--Section 454(31) (42 U.S.C. 654(31)) is
amended by striking ``$5,000'' and inserting ``$2,500''.
(c) Effective Date.--The amendments made by this section shall take
effect on October 1, 2006.
SEC. 8307. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT PAST-DUE
CHILD SUPPORT ON BEHALF OF CHILDREN WHO ARE NOT MINORS.
(a) In General.--Section 464 (42 U.S.C. 664) is amended--
(1) in subsection (a)(2)(A), by striking ``(as that term is
defined for purposes of this paragraph under subsection (c))'';
and
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by striking ``(1) Except as provided in
paragraph (2), as used in'' and inserting
``In''; and
(ii) by inserting ``(whether or not a
minor)'' after ``a child'' each place it
appears; and
(B) by striking paragraphs (2) and (3).
(b) Effective Date.--The amendments made by subsection (a) shall
take effect on October 1, 2007.
SEC. 8308. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR SERVICE-
CONNECTED DISABILITIES IN ORDER TO ENFORCE CHILD SUPPORT
OBLIGATIONS.
(a) In General.--Section 459(h) (42 U.S.C. 659(h)) is amended--
(1) in paragraph (1)(A)(ii)(V), by striking all that
follows ``Armed Forces'' and inserting a semicolon; and
(2) by adding at the end the following:
``(3) Limitations with respect to compensation paid to
veterans for service-connected disabilities.--Notwithstanding
any other provision of this section:
``(A) Compensation described in paragraph
(1)(A)(ii)(V) shall not be subject to withholding
pursuant to this section--
``(i) for payment of alimony; or
``(ii) for payment of child support if the
individual is fewer than 60 days in arrears in
payment of the support.
``(B) Not more than 50 percent of any payment of
compensation described in paragraph (1)(A)(ii)(V) may
be withheld pursuant to this section.''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect on October 1, 2007.
SEC. 8309. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.
Section 452(j) (42 U.S.C. 652(j)) is amended by inserting ``or the
amount appropriated under this paragraph for fiscal year 2002,
whichever is greater,'' before ``which shall be available''.
SEC. 8310. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE FUNDING.
Section 453(o) (42 U.S.C. 653(o)) is amended--
(1) in the 1st sentence, by inserting ``or the amount
appropriated under this paragraph for fiscal year 2002,
whichever is greater,'' before ``which shall be available'';
and
(2) in the 2nd sentence, by striking ``for each of fiscal
years 1997 through 2001''.
SEC. 8311. INFORMATION COMPARISONS WITH INSURANCE DATA.
(a) Duties of the Secretary.--Section 452 (42 U.S.C. 652) is
amended by adding at the end the following:
``(m) Comparisons With Insurance Information.--
``(1) In general.--The Secretary, through the Federal
Parent Locator Service, may--
``(A) compare information concerning individuals
owing past-due support with information maintained by
insurers (or their agents) concerning insurance claims,
settlements, awards, and payments, and
``(B) furnish information resulting from such a
comparison to the State agencies responsible for
collecting child support from such individuals.
``(2) Liability.--An insurer (including any agent of an
insurer) shall not be liable under any Federal or State law to
any person for any disclosure provided for under this
subsection, or for any other action taken in good faith in
accordance with this subsection.''.
(b) State Reimbursement of Federal Costs.--Section 453(k)(3) (42
U.S.C. 653(k)(3)) is amended by inserting ``or section 452(m)'' after
``this section''.
SEC. 8312. TRIBAL ACCESS TO THE FEDERAL PARENT LOCATOR SERVICE.
Section 453(c)(1) (42 U.S.C. 653(c)(1)) is amended by inserting
``or of any Indian tribe or tribal organization'' after ``any agent or
attorney of any State''.
SEC. 8313. REIMBURSEMENT OF SECRETARY'S COSTS OF INFORMATION
COMPARISONS AND DISCLOSURE FOR ENFORCEMENT OF OBLIGATIONS
ON HIGHER EDUCATION ACT LOANS AND GRANTS.
Section 453(j)(6)(F) (42 U.S.C. 653(j)(6)(F)) is amended by
striking ``additional''.
SEC. 8314. TECHNICAL AMENDMENT RELATING TO COOPERATIVE AGREEMENTS
BETWEEN STATES AND INDIAN TRIBES.
Section 454(33) (42 U.S.C. 654(33)) is amended by striking ``that
receives funding pursuant to section 428 and''.
SEC. 8315. STATE OPTION TO USE STATEWIDE AUTOMATED DATA PROCESSING AND
INFORMATION RETRIEVAL SYSTEM FOR INTERSTATE CASES.
Section 466(a)(14)(A)(iii) (42 U.S.C. 666(a)(14)(A)(iii)) is
amended by inserting ``(but the assisting State may establish a
corresponding case based on such other State's request for
assistance)'' before the semicolon.
SEC. 8316. MODIFICATION OF RULE REQUIRING ASSIGNMENT OF SUPPORT RIGHTS
AS A CONDITION OF RECEIVING TANF.
(a) In General.--Section 408(a)(3) (42 U.S.C. 608(a)(3)) is amended
to read as follows:
``(3) No assistance for families not assigning certain
support rights to the state.--
``(A) In general.--Subject to subparagraph (B), a
State to which a grant is made under section 403 shall
require, as a condition of providing assistance to a
family under the State program funded under this part,
that a member of the family assign to the State any
rights the family member may have (on behalf of the
family member or of any other person for whom the
family member has applied for or is receiving such
assistance) to--
``(i) support from any other person which
accrues during the period that the family
receives assistance under the program; and
``(ii) at the option of the State, support
from any other person which has accrued before
such period.
``(B) Limitation.--The total amount of support that
may be required to be provided with respect to rights
assigned to a State by a family member pursuant to
subparagraph (A) shall not exceed the total amount of
assistance provided by the State to the family.''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on October 1, 2008.
SEC. 8317. STATE OPTION TO DISCONTINUE CERTAIN SUPPORT ASSIGNMENTS.
Section 457(b) (42 U.S.C. 657(b)) is amended by striking ``shall''
and inserting ``may''.
SEC. 8318. TECHNICAL CORRECTION.
The second paragraph (7) of section 453(j) (42 U.S.C. 653(j)) is
amended by striking ``(7)'' and inserting ``(9)''.
SEC. 8319. REDUCTION IN RATE OF REIMBURSEMENT OF CHILD SUPPORT
ADMINISTRATIVE EXPENSES.
Section 455(a)(2) (42 U.S.C. 655(a)(2)) is amended--
(1) in subparagraph (B), by striking ``, and'' and
inserting a semicolon;
(2) in subparagraph (C), by striking ``fiscal year 1990 and
each fiscal year thereafter.'' and inserting ``fiscal years
1990 through 2006;''; and
(3) by adding at the end the following:
``(D) 62 percent for fiscal year 2007;
``(E) 58 percent for fiscal year 2008;
``(F) 54 percent for fiscal year 2009; and
``(G) 50 percent for fiscal year 2010 and each fiscal year
thereafter.''.
SEC. 8320. INCENTIVE PAYMENTS.
(a) In General.--Section 455(a)(1) (42 U.S.C. 655(a)(1)) is amended
by inserting ``from amounts paid to the State under section 458 or''
before ``to carry out an agreement''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on October 1, 2007.
Subtitle D--Child Welfare
SEC. 8401. EXTENSION OF AUTHORITY TO APPROVE DEMONSTRATION PROJECTS.
Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by striking
``2003'' and inserting ``2010''.
SEC. 8402. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS.
Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by striking
``not more than 10''.
SEC. 8403. ELIMINATION OF LIMITATION ON NUMBER OF STATES THAT MAY BE
GRANTED WAIVERS TO CONDUCT DEMONSTRATION PROJECTS ON SAME
TOPIC.
Section 1130 (42 U.S.C. 1320a-9) is amended by adding at the end
the following:
``(h) No Limit on Number of States That May Be Granted Waivers to
Conduct Same or Similar Demonstration Projects.--The Secretary shall
not refuse to grant a waiver to a State under this section on the
grounds that a purpose of the waiver or of the demonstration project
for which the waiver is necessary would be the same as or similar to a
purpose of another waiver or project that is or may be conducted under
this section.''.
SEC. 8404. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS THAT MAY BE
GRANTED TO A SINGLE STATE FOR DEMONSTRATION PROJECTS.
Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at
the end the following:
``(i) No Limit on Number of Waivers Granted to, or Demonstration
Projects That May Be Conducted by, a Single State.--The Secretary shall
not impose any limit on the number of waivers that may be granted to a
State, or the number of demonstration projects that a State may be
authorized to conduct, under this section.''.
SEC. 8405. STREAMLINED PROCESS FOR CONSIDERATION OF AMENDMENTS TO AND
EXTENSIONS OF DEMONSTRATION PROJECTS REQUIRING WAIVERS.
Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at
the end the following:
``(j) Streamlined Process for Consideration of Amendments and
Extensions.--The Secretary shall develop a streamlined process for
consideration of amendments and extensions proposed by States to
demonstration projects conducted under this section.''.
SEC. 8406. AVAILABILITY OF REPORTS.
Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at
the end the following:
``(k) Availability of Reports.--The Secretary shall make available
to any State or other interested party any report provided to the
Secretary under subsection (f)(2), and any evaluation or report made by
the Secretary with respect to a demonstration project conducted under
this section, with a focus on information that may promote best
practices and program improvements.''.
SEC. 8407. CLARIFICATION OF ELIGIBILITY FOR FOSTER CARE MAINTENANCE
PAYMENTS AND ADOPTION ASSISTANCE.
(a) Foster Care Maintenance Payments.--Section 472(a) (42 U.S.C.
672(a)) is amended to read as follows:
``(a) In General.--
``(1) Eligibility.--Each State with a plan approved under
this part shall make foster care maintenance payments on behalf
of each child who has been removed from the home of a relative
specified in section 406(a) (as in effect on July 16, 1996)
into foster care if--
``(A) the removal and foster care placement met,
and the placement continues to meet, the requirements
of paragraph (2); and
``(B) the child, while in the home, would have met
the AFDC eligibility requirement of paragraph (3).
``(2) Removal and foster care placement requirements.--The
removal and foster care placement of a child meet the
requirements of this paragraph if--
``(A) the removal and foster care placement are in
accordance with--
``(i) a voluntary placement agreement
entered into by a parent or legal guardian of
the child who is the relative referred to in
paragraph (1); or
``(ii) a judicial determination to the
effect that continuation in the home from which
removed would be contrary to the welfare of the
child and that reasonable efforts of the type
described in section 471(a)(15) for a child
have been made;
``(B) the child's placement and care are the
responsibility of--
``(i) the State agency administering the
State plan approved under section 471; or
``(ii) any other public agency with which
the State agency administering or supervising
the administration of the State plan has made
an agreement which is in effect; and
``(C) the child has been placed in a foster family
home or child-care institution.
``(3) AFDC eligibility requirement.--
``(A) In general.--A child in the home referred to
in paragraph (1) would have met the AFDC eligibility
requirement of this paragraph if the child--
``(i) would have received aid under the
State plan approved under section 402 (as in
effect on July 16, 1996) in the home, in or for
the month in which the agreement was entered
into or court proceedings leading to the
determination referred to in paragraph
(2)(A)(ii) of this subsection were initiated;
or
``(ii)(I) would have received the aid in
the home, in or for the month referred to in
clause (i), if application had been made
therefor; or
``(II) had been living in the home within 6
months before the month in which the agreement
was entered into or the proceedings were
initiated, and would have received the aid in
or for such month, if, in such month, the child
had been living in the home with the relative
referred to in paragraph (1) and application
for the aid had been made.
``(B) Resources determination.--For purposes of
subparagraph (A), in determining whether a child would
have received aid under a State plan approved under
section 402 (as in effect on July 16, 1996), a child
whose resources (determined pursuant to section
402(a)(7)(B), as so in effect) have a combined value of
not more than $10,000 shall be considered a child whose
resources have a combined value of not more than $1,000
(or such lower amount as the State may determine for
purposes of section 402(a)(7)(B)).
``(4) Eligibility of certain alien children.--Subject to
title IV of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, if the child is an alien
disqualified under section 245A(h) or 210(f) of the Immigration
and Nationality Act from receiving aid under the State plan
approved under section 402 in or for the month in which the
agreement described in paragraph (2)(A)(i) was entered into or
court proceedings leading to the determination described in
paragraph (2)(A)(ii) were initiated, the child shall be
considered to satisfy the requirements of paragraph (3), with
respect to the month, if the child would have satisfied the
requirements but for the disqualification.''.
(b) Adoption Assistance.--Section 473(a)(2) (42 U.S.C. 673(a)(2))
is amended to read as follows:
``(2)(A) For purposes of paragraph (1)(B)(ii), a child meets the
requirements of this paragraph if the child--
``(i)(I)(aa) was removed from the home of a relative
specified in section 406(a) (as in effect on July 16, 1996) and
placed in foster care in accordance with a voluntary placement
agreement with respect to which Federal payments are provided
under section 474 (or section 403, as such section was in
effect on July 16, 1996), or in accordance with a judicial
determination to the effect that continuation in the home would
be contrary to the welfare of the child; and
``(bb) met the requirements of section 472(a)(3) with
respect to the home referred to in item (aa) of this subclause;
``(II) meets all of the requirements of title XVI with
respect to eligibility for supplemental security income
benefits; or
``(III) is a child whose costs in a foster family home or
child-care institution are covered by the foster care
maintenance payments being made with respect to the minor
parent of the child as provided in section 475(4)(B); and
``(ii) has been determined by the State, pursuant to
subsection (c) of this section, to be a child with special
needs.
``(B) Section 472(a)(4) shall apply for purposes of subparagraph
(A) of this paragraph, in any case in which the child is an alien
described in such section.
``(C) A child shall be treated as meeting the requirements of this
paragraph for the purpose of paragraph (1)(B)(ii) if the child--
``(i) meets the requirements of subparagraph (A)(ii);
``(ii) was determined eligible for adoption assistance
payments under this part with respect to a prior adoption;
``(iii) is available for adoption because--
``(I) the prior adoption has been dissolved, and
the parental rights of the adoptive parents have been
terminated; or
``(II) the child's adoptive parents have died; and
``(iv) fails to meet the requirements of subparagraph (A)
but would meet such requirements if--
``(I) the child were treated as if the child were
in the same financial and other circumstances the child
was in the last time the child was determined eligible
for adoption assistance payments under this part; and
``(II) the prior adoption were treated as never
having occurred.''.
SEC. 8408. CLARIFICATION REGARDING FEDERAL MATCHING OF CERTAIN
ADMINISTRATIVE COSTS UNDER THE FOSTER CARE MAINTENANCE
PAYMENTS PROGRAM.
(a) Administrative Costs Relating to Unlicensed Care.--Section 472
(42 U.S.C. 672) is amended by inserting after subsection (h) the
following:
``(i) Administrative Costs Associated With Otherwise Eligible
Children not in Licensed Foster Care Settings.--Expenditures by a State
that would be considered administrative expenditures for purposes of
section 474(a)(3) if made with respect to a child who was residing in a
foster family home or child-care institution shall be so considered
with respect to a child not residing in such a home or institution--
``(1) in the case of a child who has been removed in
accordance with subsection (a) of this section from the home of
a relative specified in section 406(a) (as in effect on July
16, 1996), only for expenditures--
``(A) with respect to a period of not more than the
lesser of 12 months or the average length of time it
takes for the State to license or approve a home as a
foster home, in which the child is in the home of a
relative and an application is pending for licensing or
approval of the home as a foster family home; or
``(B) with respect to a period of not more than 1
calendar month when a child moves from a facility not
eligible for payments under this part into a foster
family home or child care institution licensed or
approved by the State; and
``(2) in the case of any other child who is potentially
eligible for benefits under a State plan approved under this
part and at imminent risk of removal from the home, only if--
``(A) reasonable efforts are being made in
accordance with section 471(a)(15) to prevent the need
for, or if necessary to pursue, removal of the child
from the home; and
``(B) the State agency has made, not less often
than every 6 months, a determination (or
redetermination) as to whether the child remains at
imminent risk of removal from the home.''.
(b) Conforming Amendment.--Section 474(a)(3) of such Act (42 U.S.C.
674(a)(3)) is amended by inserting ``subject to section 472(i)'' before
``an amount equal to''.
SEC. 8409. TECHNICAL CORRECTION.
Section 1130(b)(1) (42 U.S.C. 1320a-9(b)(1)) is amended by striking
``422(b)(9)'' and inserting ``422(b)(10)''.
SEC. 8410. TECHNICAL CORRECTION.
Section 470 (42 U.S.C. 670) is amended by striking ``June 1, 1995''
and inserting ``July 16, 1996''.
Subtitle E--Supplemental Security Income
SEC. 8501. REVIEW OF STATE AGENCY BLINDNESS AND DISABILITY
DETERMINATIONS.
Section 1633 (42 U.S.C. 1383b) is amended by adding at the end the
following:
``(e)(1) The Commissioner of Social Security shall review
determinations, made by State agencies pursuant to subsection (a) in
connection with applications for benefits under this title on the basis
of blindness or disability, that individuals who have attained 18 years
of age are blind or disabled as of a specified onset date. The
Commissioner of Social Security shall review such a determination
before any action is taken to implement the determination.
``(2)(A) In carrying out paragraph (1), the Commissioner of Social
Security shall review--
``(i) at least 20 percent of all determinations referred to
in paragraph (1) that are made in fiscal year 2006;
``(ii) at least 40 percent of all such determinations that
are made in fiscal year 2007; and
``(iii) at least 50 percent of all such determinations that
are made in fiscal year 2008 or thereafter.
``(B) In carrying out subparagraph (A), the Commissioner of Social
Security shall, to the extent feasible, select for review the
determinations which the Commissioner of Social Security identifies as
being the most likely to be incorrect.''.
SEC. 8502. PAYMENT OF CERTAIN LUMP SUM BENEFITS IN INSTALLMENTS UNDER
THE SUPPLEMENTAL SECURITY INCOME PROGRAM.
(a) In General.--Section 1631(a)(10)(A)(i) (42 U.S.C.
1383(a)(10)(A)(i)) is amended by striking ``12'' and inserting ``3''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect 3 months after the date of the enactment of this Act.
Subtitle F--State and Local Flexibility
SEC. 8601. PROGRAM COORDINATION DEMONSTRATION PROJECTS.
(a) Purpose.--The purpose of this section is to establish a program
of demonstration projects in a State or portion of a State to
coordinate multiple public assistance, workforce development, and other
programs, for the purpose of supporting working individuals and
families, helping families escape welfare dependency, promoting child
well-being, or helping build stronger families, using innovative
approaches to strengthen service systems and provide more coordinated
and effective service delivery.
(b) Definitions.--In this section:
(1) Administering secretary.--The term ``administering
Secretary'' means, with respect to a qualified program, the
head of the Federal agency responsible for administering the
program.
(2) Qualified program.--The term ``qualified program''
means--
(A) a program under part A of title IV of the
Social Security Act; or
(B) the program under title XX of such Act.
(c) Application Requirements.--The head of a State entity or of a
sub-State entity administering 2 or more qualified programs proposed to
be included in a demonstration project under this section shall (or, if
the project is proposed to include qualified programs administered by 2
or more such entities, the heads of the administering entities (each of
whom shall be considered an applicant for purposes of this section)
shall jointly) submit to the administering Secretary of each such
program an application that contains the following:
(1) Programs included.--A statement identifying each
qualified program to be included in the project, and describing
how the purposes of each such program will be achieved by the
project.
(2) Population served.--A statement identifying the
population to be served by the project and specifying the
eligibility criteria to be used.
(3) Description and justification.--A detailed description
of the project, including--
(A) a description of how the project is expected to
improve or enhance achievement of the purposes of the
programs to be included in the project, from the
standpoint of quality, of cost-effectiveness, or of
both; and
(B) a description of the performance objectives for
the project, including any proposed modifications to
the performance measures and reporting requirements
used in the programs.
(4) Waivers requested.--A description of the statutory and
regulatory requirements with respect to which a waiver is
requested in order to carry out the project, and a
justification of the need for each such waiver.
(5) Cost neutrality.--Such information and assurances as
necessary to establish to the satisfaction of the administering
Secretary, in consultation with the Director of the Office of
Management and Budget, that the proposed project is reasonably
expected to meet the applicable cost neutrality requirements of
subsection (d)(4).
(6) Evaluation and reports.--An assurance that the
applicant will conduct ongoing and final evaluations of the
project, and make interim and final reports to the
administering Secretary, at such times and in such manner as
the administering Secretary may require.
(7) Other information and assurances.--Such other
information and assurances as the administering Secretary may
require.
(d) Approval of Applications.--
(1) In general.--The administering Secretary with respect
to a qualified program that is identified in an application
submitted pursuant to subsection (c) may approve the
application and, except as provided in paragraph (2), waive any
requirement applicable to the program, to the extent consistent
with this section and necessary and appropriate for the conduct
of the demonstration project proposed in the application, if
the administering Secretary determines that the project--
(A) has a reasonable likelihood of achieving the
objectives of the programs to be included in the
project;
(B) may reasonably be expected to meet the
applicable cost neutrality requirements of paragraph
(4), as determined by the Director of the Office of
Management and Budget; and
(C) includes the coordination of 2 or more
qualified programs.
(2) Provisions excluded from waiver authority.--A waiver
shall not be granted under paragraph (1) with respect to any
provision of law relating to--
(A) civil rights or prohibition of discrimination;
(B) purposes or goals of any program;
(C) maintenance of effort requirements;
(D) health or safety;
(E) labor standards under the Fair Labor Standards
Act of 1938; or
(F) environmental protection;
(3) Agreement of each administering secretary required.--
(A) In general.--An applicant may not conduct a
demonstration project under this section unless each
administering Secretary with respect to any program
proposed to be included in the project has approved the
application to conduct the project.
(B) Agreement with respect to funding and
implementation.--Before approving an application to
conduct a demonstration project under this section, an
administering Secretary shall have in place an
agreement with the applicant with respect to the
payment of funds and responsibilities required of the
administering Secretary with respect to the project.
(4) Cost-neutrality requirement.--
(A) General rule.--Notwithstanding any other
provision of law (except subparagraph (B)), the total
of the amounts that may be paid by the Federal
Government for a fiscal year with respect to the
programs in the State in which an entity conducting a
demonstration project under this section is located
that are affected by the project shall not exceed the
estimated total amount that the Federal Government
would have paid for the fiscal year with respect to the
programs if the project had not been conducted, as
determined by the Director of the Office of Management
and Budget.
(B) Special rule.--If an applicant submits to the
Director of the Office of Management and Budget a
request to apply the rules of this subparagraph to the
programs in the State in which the applicant is located
that are affected by a demonstration project proposed
in an application submitted by the applicant pursuant
to this section, during such period of not more than 5
consecutive fiscal years in which the project is in
effect, and the Director determines, on the basis of
supporting information provided by the applicant, to
grant the request, then, notwithstanding any other
provision of law, the total of the amounts that may be
paid by the Federal Government for the period with
respect to the programs shall not exceed the estimated
total amount that the Federal Government would have
paid for the period with respect to the programs if the
project had not been conducted.
(5) 90-day approval deadline.--
(A) In general.--If an administering Secretary
receives an application to conduct a demonstration
project under this section and does not disapprove the
application within 90 days after the receipt, then--
(i) the administering Secretary is deemed
to have approved the application for such
period as is requested in the application,
except to the extent inconsistent with
subsection (e); and
(ii) any waiver requested in the
application which applies to a qualified
program that is identified in the application
and is administered by the administering
Secretary is deemed to be granted, except to
the extent inconsistent with paragraph (2) or
(4) of this subsection.
(B) Deadline extended if additional information is
sought.--The 90-day period referred to in subparagraph
(A) shall not include any period that begins with the
date the Secretary requests the applicant to provide
additional information with respect to the application
and ends with the date the additional information is
provided.
(e) Duration of Projects.--A demonstration project under this
section may be approved for a term of not more than 5 years.
(f) Reports to Congress.--
(1) Report on disposition of applications.--Within 90 days
after an administering Secretary receives an application
submitted pursuant to this section, the administering Secretary
shall submit to each Committee of the Congress which has
jurisdiction over a qualified program identified in the
application notice of the receipt, a description of the
decision of the administering Secretary with respect to the
application, and the reasons for approving or disapproving the
application.
(2) Reports on projects.--Each administering Secretary
shall provide annually to the Congress a report concerning
demonstration projects approved under this section, including--
(A) the projects approved for each applicant;
(B) the number of waivers granted under this
section, and the specific statutory provisions waived;
(C) how well each project for which a waiver is
granted is improving or enhancing program achievement
from the standpoint of quality, cost-effectiveness, or
both;
(D) how well each project for which a waiver is
granted is meeting the performance objectives specified
in subsection (c)(3)(B);
(E) how each project for which a waiver is granted
is conforming with the cost-neutrality requirements of
subsection (d)(4); and
(F) to the extent the administering Secretary deems
appropriate, recommendations for modification of
programs based on outcomes of the projects.
Subtitle G--Repeal of Continued Dumping and Subsidy Offset
SEC. 8701. REPEAL OF CONTINUED DUMPING AND SUBSIDY OFFSET.
(a) Repeal.--Section 754 of the Tariff Act of 1930 (19 U.S.C.
1675c), and the item relating to section 754 in the table of contents
for title VII of that Act, are repealed.
(b) Existing Accounts.--All amounts remaining, upon the enactment
of this title, in any special account established under section
754(e)(1) of the Tariff Act of 1930 (as in effect on the day before the
date of the enactment of this title) shall be deposited in the general
fund of the Treasury.
Subtitle H--Effective Date
SEC. 8801. EFFECTIVE DATE.
(a) In General.--Except as otherwise provided in this title, this
title and the amendments made by this title shall be effective as of
October 1, 2005.
(b) Exception.--In the case of a State plan under title IV of the
Social Security Act which the Secretary determines requires State
legislation in order for the plan to meet the additional requirements
imposed by the amendments made by this title, the effective date of the
amendments imposing the additional requirements shall be 3 months after
the first day of the first calendar quarter beginning after the close
of the first regular session of the State legislature that begins after
the date of the enactment of this Act. For purposes of the preceding
sentence, in the case of a State that has a 2-year legislative session,
each year of the session shall be considered to be a separate regular
session of the State legislature.
Union Calendar No. 151
109th CONGRESS
1st Session
H. R. 4241
[Report No. 109-276]
_______________________________________________________________________
A BILL
To provide for reconciliation pursuant to section 201(a) of the
concurrent resolution on the budget for fiscal year 2006.
_______________________________________________________________________
November 7, 2005
Committed to the Committee of the Whole House on the State of the Union
and ordered to be printed