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20 USC 1080.

20 USC 1078-2. 20 USC 1077a. 20 USC 1087-1.

State and local governments.

PUBLIC LAW 99-272—APR. 7, 1986

unable to secure employment by reason of the care required by a spouse who is so disabled; or "(iv) which is a single period, not in excess of 12 months, at the request of the borrower, during which the borrower is seeking and unable to find full-time employment; and that any such period shall not be included in determining the repayment period provided pursuant to subsection (c)(2) of this section; "(D) entitles the borrower to accelerate without penalty repayment of the whole or any part of the loan; and "(E)(i) contains a notice of the system of disclosure concerning such loan to credit bureau organizations under section 430(b)(2), and (ii) provides that the lender on request of the borrower will provide information on the repayment status of the note to such organizations. "(c)(1) Consolidation loans made under this section shall bear interest at the rate of 10 per centum per annum on the unpaid principal balance of the loan, except that, if the consolidation loan is used for the purpose of discharging liability on a loan made pursuant to section 428B, the consolidation loan shall bear interest at a rate per annum on such unpaid balance which is equal to the highest applicable interest rate under section 427A on any loan which is selected for consolidation by the borrower. For the purposes of payment of special allowances under section 438(b)(2), the interest rate required by this subsection is the applicable interest rate with respect to a consolidation loan. "(2) Notwithstanding any other provision of this part, to the extent authorized by its certificate of insurance under subsection (b)(2)(F) and approved by the issuer of such certificate, the lender of a consolidation loan, with the agreement of the borrower, may establish such repayment terms as will promote the objectives of this section, including the establishment of graduated and income sensitive repayment schedules. In each case a consolidation loan shall be repaid as follows: "(A) in the case of a consolidation loan the original amount of which is less than $7,500, such loan shall be repaid in not more than 10 years; "(B) in the case of a consolidation loan the original amount of which equals or exceeds $7,500 but is less than $11,000, such loan shall be repaid in not more than 13 years; or "(C) in the case of a consolidation loan the original amount of which equals or exceeds $11,000, such loan shall be repaid in not more than 15 years. "(3) Repayment of a consolidation loan shall commence within 60 days after all holders have, pursuant to subsection (b)(l)(D), discharged the liability of the borrower on the loans selected for consolidation. "(4) No origination fee or insurance premium shall be charged to the borrower on any consolidation loan, and no insurance premium shall be payable by the lender to the issuer of the certificate of insurance with respect to any such loan. "(d)(1) If, within 18 months after the effective date of this section, an eligible lender described in subsection (a)(1)(B) for a State has not entered into an agreement with the Secretary or a guaranty agency for purposes of making consolidation loans under this section, the Secretary may, after a hearing and upon a determination of need therefor, enter into an agreement for the purposes of making

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consolidation loans to eligible borrowers in such State with an eligible lender described in clause (B) or (C) of subsection (a)(1) from another State. "(2) Notice of the hearing required by paragraph (1) of this subsection shall be sent to the Governor of the affected State and the eligible lenders described in subsection (a)(1)(B) for that State. At any such hearing representatives of such Governor and lenders may present evidence and testimony and examine witnesses, and full consideration shall be given to the views of such Governor and lenders with respect to the interests of the eligible borrowers in that State and with respect to the impact on programs of such lenders of allowing a lender described in clause (B) or (C) of subsection (a)(1) from another State to make consolidation loans pursuant to an agreement under this subsection in such State. "(3) An agreement under this subsection may contain such terms and conditions as the Secretary may specifically require of the lender to carry out this section. "(4) The requirements of paragraphs (1) and (2) of this subsection shall not apply if, in any State, an eligible lender described in subsection (a)(1)(B) from another State is functioning as a secondary market described in subparagraph (D) or (F) of section 435(g)(1) prior to the date of enactment of the Student Financial Assistance Amendments of 1985 and such lender agrees to make consolidation loans to eligible borrowers in such State. "(e) The authority to make loans under this section expires at the close of September 30, 1991. Nothing in this section shall be construed to authorize the Secretary to promulgate rules or regulations governing the terms or conditions of the agreements and certificates under subsection (b). Loans made under this section shall not be considered to be new loans made to students for purposes of section 424(a).".

State and local governments,

State and local governments. 20 USC 1085. Ante, p. 339. Termination date.

20 USC 1074. (b) CONFORMING AMENDMENTS.—(1) Section 427(a) of the Act is 20 USC 1077.

amended by striking out "A loan" and inserting in lieu thereof "Except as provided in section 428C, a loan". (2) Section 435(g)(1) of the Act is amended— (A) by striking out "section 439(o) and (q)" in subparagraph (G) and inserting in lieu thereof "sections 428C and 439(q)"; and (B) by striking out "section 428(j)" in subparagraph (H) and inserting in lieu thereof "sections 428(h) and 428C". (3) Section 438 of the Act is amended— (A) in subsection (b)(5)(A)(ii), by inserting ", 428C," after "428B"; and (B) in subsection (c)(2), by striking out "section 428B and section 439(o)" and inserting in lieu thereof "sections 428B and 428C". (4) Section 439(d)(1)(C) of the Act is amended by striking out "428(A), and except with respect to loans under section 439(o),' and inserting in lieu thereof "428A, and except with respect to loans under section 428C,". (c) SPECIAL ALLOWANCE.—(1) Section 438(b)(2)(A) of the Act is amended by striking out "subparagraph (B)" and inserting in lieu thereof "subparagraphs (B) and (C)". (2) The first sentence of section 438(b)(2)(B)(i) of the Act is amended— (A) by inserting "appropriate" before "quarterly rate" the second time it appears; and (B) by inserting "or subparagraph (C)" before the period.

Ante, p. 343.

20 USC 1087-1.

20 USC 1078-2. 20 USC 1087-2.

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PUBLIC LAW 99-272—APR. 7, 1986

(3) Section 438(b)(2) of the Act is amended by adding at the end thereof the following new subparagraph: "(C) In the case of loans made in accordance with section 428C, the applicable per centum to be added under clause (iii) of subparagraph (A) shall be 3 per centum.". (d) COST EVALUATION REPORT.—The Secretary of Education shall evaluate the cost, efficiency, and impact of the consolidation loan program established by the amendments made by this section and shall report to the Congress not later than June 30, 1988, on the findings and recommendations required by this subsection. SEC. 16018. EXTENSION OF PROGRAM.

20 USC 1074.

20 USC 1078.

20 USC 1087-2.

(a) EXTENSION OF AUTHORITY.—Part B of title IV of the Act is amended— (1) in section 424(a)— (A) by striking out "1986" and inserting in lieu thereof "1988"; (B) by striking out "1990" and inserting in lieu thereof "1992"; (2) in section 428(a)(5)— (A) by striking out "1986" and inserting in lieu thereof "1988"; (B) by striking out "1990" and inserting in lieu thereof "1992"; and (3) in section 439(1), by striking out "1988" and inserting in lieu thereof "1990". (b) EXTENSION OF FAMILY CONTRIBUTION SCHEDULES.—Section 9 of

20 USC 1078 ^'^^-

Banks and banking.

the Student Financial Assistance Technical Amendments Act of 1982 is amended— (1) in subsection (a), by striking out "and from July x, 1986, through June 30, 1987," and inserting in lieu thereof "from July 1, 1986, through June 30, 1987, from July 1, 1987, through June 30, 1988, from July 1, 1988, through June 30, 1989, and from July 1, 1989, through June 30, 1990,"; and (2) in subsection (c)— (A) by striking out "and" at the end of paragraph (3); (B) by striking out the comma at the end of paragraph (4) and inserting in lieu thereof a semicolon; and (C) by inserting after such paragraph the following new paragraphs: "(5) April 1, 1987, for the period of instruction from July 1, 1987, through June 30, 1988; "(6) April 1, 1988, for the period of instruction from July 1, 1988, through June 30, 1989; and "(7) April 1, 1989, for the period of instruction from July 1, 1989, through June 30, 1990,". SEC. 16019. SAVINGS FROM OPERATIONS OF THE STUDENT LOAN MARKETING ASSOCIATION. (a) GENERAL RuLE.—In order to Contribute to carrying out the directions in the first concurrent resolution on the budget for the fiscal year 1986 (S. Con. Res. 32, 99th Congress, agreed to August 1, 1985) designed to reduce the Federal budget deficit, the Student Loan Marketing Association shall, during the fiscal year 1986, reduce the level of obligations owed to the Federal Financing Bank by $30,000,000 which, but for this section, will be paid to the Federal Financing Bank after October 1, 1986,

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(b) SPECIAL RULE.—The amount described in subsection (a) may not be credited by the Student Loan Marketing Association to reduce the obligation to repay the Federal Financing Bank amounts which the Student Loan Marketing Association owes to the Federal Financing Bank in each of the fiscal years 1987 and 1988. (c) SAVINGS PROVISION.—Nothing in this section shall be construed Contracts. to authorize or require the Student Loan Marketing Association or the Federal Financing Bank to renegotiate the contract or other agreement under which the Student Loan Marketing Association agreed to pay amounts made available by the Federal Financing Bank to carry out section 439 of the Higher Education Act of 1965. 20 USC 1087-2. SEC. 16020. DEFINITION. Section 435 of the Act is amended by adding at the end thereof the 20 USC 1085. following new subsection: "(k) The term 'guaranty agency' means a State or nonprofit private institution or organization with which the Secretary has an agreement pursuant to section 428(b).". 20 USC 1078.

Subtitle B—Savings From Improved Student Loan Collection SEC. 16021. AGREEMENT FOR AUDITS. 20 USC 1078. Section 428(b)(2) of the Act is amended— (1) by striking out "and" at the end of subparagraph (B); (2) by striking out the period at the end of subparagraph (C) and inserting in lieu thereof "; and"; and (3) by inserting after such subparagraph the following: "(D) provide for— "(i) conducting, except as provided in clause (ii), financial and compliance audits of the guaranty agency at least once every two years and covering the period since the most recent audit, conducted by a qualified, independent organization or person in accordance with standards established by the Comptroller General for the audit of governmental organizations, programs, and functions, and as prescribed in regulations of the Secretary, the results of which shall be submitted to the Secretary; or "(ii) with regard to a guaranty program of a State which is audited under chapter 75 of title 31, United States Code, 31 USC 7501 et deeming such audit to satisfy the requirements of clause (i) seq. for the period of time covered by such audit.". SEC. 16022. RECOVERY COSTS.

Section 430(b) of the Act is amended— 20 USC 1080. (1) by striking out in paragraph (1) "(including reasonable administrative costs)" and inserting in lieu thereof the following: "(including reasonable administrative and collection costs, to the extent set forth in regulations issued by the Secretary)"; (2) by striking out paragraph (2); and (3) by striking out "(1)". SEC. 16023. CREDIT BUREAU REPORTS. Part B of title IV of the Act is amended by adding immediately 20 USC 1080a. after section 430 the following new section:

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PUBLIC LAW 99-272—APR. 7, 1986 "REPORTS TO CREDIT BUREAUS AND INSTITUTIONS OF HIGHER EDUCATION

20 USC 1078.

15 USC 1681 note-

20 USC 1080.

20 USC 1087.

15 USC 16811.

"SEC. 430A. (a) For the purpose of promoting responsible repayment of loans covered by Federal loan insurance pursuant to this part or covered by a guaranty agreement pursuant to section 428, the Secretary, and each guaranty agency, eligible lender, and subsequent holder shall enter into agreements with credit bureau organizations to exchange information concerning student borrowers, in accordance with the requirements of this section. For the purpose of assisting such organizations in complying with the Fair Credit Reporting Act, such agreements may provide for timely response to the Secretary (concerning loans covered by Federal loan insurance) or by a guaranty agency, eligible lender, or subsequent holder (concerning loans covered by a guaranty agreement) to requests from such organizations for responses to objections raised by such borrowers. Subject to the requirements of subsection (c), such agreements shall require that the Secretary or guaranty agency, eligible lender, or subsequent holder to disclose to such organizations with respect to any loan dispersed to a student— "(1) the date of disbursement and the amount of the loan; "(2) the date of default and information concerning collection of the loan, including information concerning the repayment status of any defaulted loan on which the Secretary has made a payment pursuant to section 430(a) or the guaranty agency has made a payment to the previous holder of the loan; and "(3) the date of cancellation of the note upon completion of repayment by the borrower of the loan or payment by the Secretary pursuant to section 437. "(b) Such agreements may also provide for the disclosure by such organizations to the Secretary, a guaranty agency, eligible lender, or subsequent holder upon receipt of a notice under subsection (a)(2) that such a loan is in default, or information which may assist the Secretary, guaranty agency, eligible lender, or subsequent holder in collecting the loan. "(c) Agreements entered into pursuant to this section shall contain such provisions as may be necessary to ensure that— "(1) no information is disclosed by the Secretary, guaranty agency, eligible lender, or subsequent holder unless its accuracy and completeness have been verified and the Secretary, guaranty agency, eligible lender, or subsequent holder has determined that disclosure would carry out the purpose of this section; "(2) as to any information so disclosed, such organizations will be promptly notified of, and will promptly record, any change submitted by the Secretary, guaranty agency, eligible lender, or subsequent holder with respect to such information, as required by section 611 of the Fair Credit Reporting Act (15 U.S.C. 168i); "(3) no use will be made of any such information which would result in the use of collection practices with respect to such a borrower that are not fair and reasonable or that involve harassment, intimidation, false or misleading representations, or unnecessary communication concerning the existence of such loan or concerning such information; and "(4) with regard to notices of default under subsection (a)(2) of this section, except for disclosures made to obtain the borrower's location, the Secretary, guaranty agency, eligible lender, or

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subsequent holder (A) shall not disclose any such information until the Secretary, guaranty agency, eligible lender, or subsequent holder has notified the borrower that such information will be disclosed to credit bureau organizations unless the borrower enters into repayment of the loan, but (B) shall, if the borrower has not entered into repayment within a reasonable period of time, but not less than thirty days, from the date such notice has been sent to the borrower, disclose the information required by this subsection. "(d) A guaranty agency, eligible lender, subsequent holder, or credit bureau organization which discloses or receives information under this section shall not be considered a Government contractor within the meaning of section 552a of title 5 of the United States Code (the Privacy Act of 1974). "(e) The Secretary and each guaranty agency, eligible lender, and subsequent holder is authorized to disclose information described in subsections (a) and (b) concerning student borrowers to the eligible institutions such borrowers attend or previously attended. "(f) Notwithstanding paragraphs (4) and (6) of subsection (a) of Reports, section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)(4), (a)(6)), a consumer reporting agency may make a report containing information received from the Secretary, or a guaranty agency, eligible lender, or subsequent holder regarding the status of a borrower's account on a loan insured or guaranteed under this part until the later of— "(1) seven years from the date on which the agency paid a claim to the holder on insurance or the guaranty, or "(2) seven years from the date the Secretary, guaranty agency, eligible lender, or subsequent holder first reported the account to a consumer reporting agency.". SEC. 16024. CIVIL PENALTIES.

Section 432 of the Act is further amended by adding at the end 20 USC 1082. thereof the following new subsection: "(f)(1) Upon determination, after reasonable notice and opportunity for a hearing on the record, that a lender or a guaranty agency— "(A) has violated or failed to carry out any provision of this part or any regulation prescribed under this part, or "(B) has engaged in substantial misrepresentation of the nature of its financial charges, the Secretary may impose a civil penalty upon such lender or agency of not to exceed $15,000 for each violation, failure, or misrepresentation. "(2) No civil penalty may be imposed under paragraph (1) of this subsection unless it is determined that— "(A) the violation, failure or substantial misrepresentation referred to in that paragraph resulted from— "(i) a clear and consistent pattern or practice of violations, failures, or substantial misrepresentations in which the lender or guaranty agency did not maintain procedures reasonably adapted to avoid the violation, failure, or substantial representation; "(ii) gross negligence; or "(iii) willful actions on the part of the lender or guaranty agency; and

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"(B) the violation, failure, or substantial misrepresentation is material. "(3) A lender or guaranty agency has no liability under paragraph (1) of this subsection if, prior to the institution of an action under that paragraph, the lender or guaranty agency cures or corrects the violation or failure or notifies the person who received the substantial misrepresentation of the actual nature of the financial charges involved. "(4) For the purposes of paragraph (1) of this subsection, violations, failures, or substantial misrepresentations arising from a specific practice of a lender or guaranty agency shall be deemed to be a single violation, failure, or substantial misrepresentation even if the violation, failure, or substantial misrepresentation affects more than one loan or more than one borrower, or both, and the Secretary may only impose a single civil penalty for each such violation, failure, or substantial misrepresentation. "(5) If a loan affected by a violation, failure, or substantial misrepresentation is assigned to another holder, the lender or guaranty agency responsible for the violation, failure, or substantial misrepresentation shall remain liable for any civil money penalty provided for under paragraph (1) of this subsection, but the assignee shall not be liable for any such civil money penalty. "(6) Until a matter is referred to the Attorney General, any civil penalty under paragraph (1) of this subsection may be compromised by the Secretary. In determining the amount of such penalty, or the amount agreed upon in compromise, the Secretary shall consider the appropriateness of the penalty to the resources of the lender or guaranty agency subject to the determination; the gravity of the violation, failure, or substantial misrepresentation; the frequency and persistence of the violation, failure, or substantial misrepresentation; and the amount of any losses resulting from the violation, failure, or substantial misrepresentation. The amount of such penalty, when finally determined, or the amount agreed upon in compromise, may be deducted from any sums owing by the United States to the lender or agency charged (unless the lender or agency has in the case of a final agency determination commenced proceedings for judicial review within 90 days of the determination, in which case the deduction may not be made during the pendency of the proceeding).".

20 USC 1087CC.

20 USC I087bb.

SEC. 16025. ASSIGNMENT AND REFERRAL OF NDSL LOANS FOR COLLECTION. Section 463(a)(5) of the Act is amended to read as follows: "(5) provide that where a note or written agreement evidencing a loan has been in default despite due diligence on the part of the institution in attempting collection thereon— "(A) if the institution has knowingly failed to maintain an acceptable collection record with respect to such loan, as determined by the Secretary in accordance with criteria established by regulation, the Secretary may— "(i) require the institution to assign such note or agreement to the Secretary, without recompense; and "(ii) apportion any sums collected on such a loan (less an amount not to exceed 30 per centum of any sums collected to cover the Secretary's collection costs) among other institutions in accordance with section 462; or

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"(B) if the institution is not one described in clause (A), the Secretary may— "(i) allow such institution to transfer its interest in such loan to the Secretary, for collection, and the Secretary may use any collections thereon (less an amount not to exceed 30 per centum of any sums collected to cover the Secretary's collection costs) to make allocations to institutions of additional capital contributions in accordance with section 462; or 20 USC I087bb. "(ii) allow such institution to refer such note or agreement to the Secretary, without recompense, except that any sums collected on such a loan (less an amount not to exceed 30 per centum of any sums collected to cover the Secretary's collection costs) shall be repaid to such institution no later than 180 days after collection by the Secretary and treated as an additional capital contribution;". SEC. 16026. REPORTING BY CONSUMER REPORTING AGENCY ON NDSL LOANS. Section 463(c) of the Act is amended by adding at the end the 20 USC 1087cc. following new paragraph: "(3) Notwithstanding paragraphs (4) and (6) of subsection (a) of section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)(4), (a)(6)), a consumer reporting agency may make a report containing information received from the Secretary regarding the status of a borrower's account on a loan made under this part until the later of— "(A) seven years from the date on which the Secretary accepted an assignment or referral of a loan, or "(B) seven years from the date the Secretary first reported the account to a consumer reporting agency, if that account had not been previously reported by any other holder of the note.". SEC. 16027. DEFAULT PENALTY ON NDSL LOANS. Section 463A(a)(7) of the Act is amended by inserting immediately 20 USC I087cc-1. before the semicolon at the end thereof the following: "and a description of any penalty imposed as a consequence of default, such as liability for expenses reasonably incurred in attempts by the Secretary or institutions to collect on a loan". SEC. 16028. NDSL LOAN AGREEMENTS. (a) CHARGES FOR LATE PAYMENTS.—Section 464(c)(l)(H) of the Act 20 USC I087dd. is amended to read as follows: "(H) pursuant to regulations of the Secretary, shall provide for an assessment of a charge with respect to the loan for failure of the borrower to pay all or part of an installment when due, which shall include the expenses reasonably incurred in attempting collection of the loan, to the extent permitted by the Secretary, except that no charge imposed under this clause shall exceed 20 per centum of the amount of the monthly payment of the borrower; and". (b) CONFORMING AMENDMENT.—Section 464(c)(4) of the

Act

is

amended to read as follows: "(4) The institution may elect— "(A) to add the amount of any charge imposed under paragraph (IXH) to the principal amount of the loan as of the first

71-1Q4 n - RQ -

14 • OT. -^ Parhl

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day after the day on which the installment was due and to notify the borrower of the assessment of the charge; or "(B) to make the amount of the charge payable to the institution not later than the due date of the next installment.". SEC. 16029. REFERRAL OF NDSL LOANS FOR COLLECTION. Section 467 of the Act is amended to read as follows: "COLLECTION OF DEFAULTED LOANS

20 USC I087gg. 20 USC 1087CC.

"SEC. 467. (a) With respect to any loan— "(1) which was made under this part, and "(2) which is referred, transferred, or assigned to the Secretary by an institution with an agreement under section 463(a), the Secretary is authorized to attempt to collect such loan by any means authorized by law for collecting claims of the United States (including referral to the Attorney General for litigation) and under such terms and conditions as the Secretary may prescribe, including reimbursement for expenses reasonably incurred in attempting such collection. "(b) The Secretary shall continue to attempt to collect any loan referred, transferred, or assigned under paragraph (5)(A), (5)(B)(i), or (6) of section 463(a) until all appropriate collection efforts, as determined by the Secretary, have been expended.".

Subtitle C—Savings Related to General Provisions 20 USC 1089.

20 USC 1091.

SEC. 1603L EXCLUSION OF LIQUIDATION PROCEEDS FROM FAMILY CONTRIBUTION COMPUTATIONS. Section 482 of the Act is amended by adding at the end thereof the following new subsection: "(f) The Secretary shall, within 30 days after the date of enactment of this subsection, promulgate special regulations to permit, in the computation of family contributions for the programs under subpart 1 of part A and part B of this title for any academic year beginning on or after July 1, 1985, the exclusion from family income of any proceeds of a sale of farm or business assets of that family if such sale results from a voluntary or involuntary foreclosure, forfeiture, or bankruptcy.". SEC. 16032. ADDITIONAL ELIGIBILITY REQUIREMENTS FOR STUDENT LOANS. (a) STUDENT IDENTIFICATION.—Section 484(a) of the Act is amended— (1) by striking out the word "such" each place it appears in paragraph (4) and inserting in lieu thereof "any"; and (2) by striking out "(which need not be notarized)" in paragraph (5) and inserting in lieu thereof "(which need not be notarized but which shall include such student's social security number or, if the student does not have a social security number, such student's student identification number)". (b) EuGiBiLiTY DETERMINATIONS.—Section 484

of

the

Act

is

amended by redesignating subsection (b) as subsection (c) and by inserting after subsection (a) the following new subsection:

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"(b) In order to be eligible to receive any loan under this title (other than a loan under section 428B or 428C) for any period of 20 USC 1078-2. enrollment, a student who is not a graduate or professional student ^"^e- P- 343. (as defined in regulations of the Secretary), and who is enrolled in a program at an institution which has a participation agreement with the Secretary to make awards under subpart 1 of part A of this title, shall— "(1) have received a determination of eligibility or ineligibility for a grant under such subpart 1 for such period of enrollment; or "(2) have (A) filed an application with the Pell Grant processor for such institution for such enrollment period; and (B) received from the financial aid administrator of the institution a preliminary determination of the student's eligibility or ineligibility for a grant under such subpart 1.". (c) CONFORMING AMENDMENT.—Section 428(a)(2)(C)(i) of the Act is

20 USC 1078.

amended by striking out "subparts 1 and 2 of part A," and inserting in lieu thereof "subpart 1 of part A (as determined in accordance with section 484(b)), subpart 2 of part A,". SEC. 16033. STATUTE OF LIMITATIONS.

Part F of title IV of the Act is amended by adding immediately after section 484 the following new section: STATUTE OF LIMITATIONS

"SEC. 484A. (a) Notwithstanding any provision of State law that would set an earlier deadline for filing suit— "(1) an institution which receives funds under this title may file suit for collection of a refund due from a student on a grant made or work assistance awarded under this title during a period of time extending at least until a date six years (exclusive of periods during which the State statute of limitations period otherwise applicable to the suit would be tolled under State law) after the date the refund first became due; "(2) a guaranty agency which has an agreement with the Secretary under section 428(c) may file suit for collection of the amount due from a borrower on a loan made under part B of this title during a period of time extending at least until a date six years (exclusive of periods during which the State statute of limitations period otherwise applicable to the suit would be tolled under State law) after the date such guaranty agency reimburses the previous holder of the loan for its loss on account of the default of the borrower; and "(3) an institution which has an agreement with the Secretary pursuant to section 463(a) may file suit for collection of the amount due from a borrower on a loan made under part E of this title during a period of time extending at least until a date six years (exclusive of periods during which the State statute of limitations period otherwise applicable to the suit would be tolled under State law) after the date of the default of the borrower with respect to that amount; and "(4) subject to the provisions of section 2416 of title 28 of the United States Code, the Attorney General may file suit— "(A) for payment of a refund due from a student on a grant made under this title until six years following the date on which the refund first became due;

20 USC 1091a. Grants. Claims.

20 USC 1078. 20 USC 1071.

20 USC 1087CC. 20 USC 1088.

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PUBLIC LAW 99-272—APR. 7, 1986 "(B) for collection of the amount due the Secretary from a borrower pursuant to section 428(c)(2)(D) of this title until six years following the date on which the loan is assigned to the Secretary under part B of this title; and "(C) for collection of the amount due from a borrower on a loan made under this part until six years following the date on which the loan is assigned, transferred, or referred to the Secretary under part E of this title. "(b) Notwithstanding any provision of State law to the contrary— "(1) a borrower who has defaulted on a loan made under this title shall be required to pay, in addition to other charges specified in this title, reasonable collection costs; and "(2) in collecting any obligation arising from a loan made under part B of this title, a guaranty agency or the Secretary shall not be subject to a defense raised by any borrower based on a claim of infancy.".

SEC. 16034. PROGRAM PARTICIPATION AGREEMENTS. (a) U S E OF INTEREST ON FUNDS RECEIVED.—Section 487(a)(1) of the

20 USC 1094.

Act is amended to read as follows: "(1) The institution will use funds received by it for any program under this title and any interest or other earnings thereon solely for the purposes specified in, and in accordance with the provision of, that program.". (b) A U D I T AND RECOVERY OF F U N D S. — S e c t i o n 487(b)(1) of the Act is

31 USC 7501 et seq-

amended by striking o u t subparagraph (A) and inserting in lieu thereof the following: "(A)(i) except a s provided in clause (ii), a financial and complia n c e a u d i t of a n eligible institution, w i t h r e g a r d to any funds obtained by it under t h i s title or obtained from a s t u d e n t or a p a r e n t w h o has a loan insured or g u a r a n t e e d by the Secretary under t h i s title, a t least once every t w o year s and covering the period since the most r e c e n t audit, conducted by a qualified, i n d e p e n d e n t organization o r person i n accordance w i t h standard s established by the Comptroller G e n e r a l for the a u d i t of government a l organization, program s, and functions, and a s prescribed in regulations of the Secretary, the r e s u l t s of which shall be s u b m i t t e d to the Secretary; or "(ii) w i t h r e g a r d to a n eligible institution which is audited under chapter 75 of title 31, United States Code, d e e m i n g such a u d i t to satisfy the requirements of clause (i) for the period covered by such audit;".

Subtitle D—Effective Dates 20 USC 1072

SEC. 16041. EFFECTIVE DATES. (a) GENERAL RULE.—Except as otherwise provided in this section,

the amendments made by this subtitle shall take effect on the date of enactment of this Act. (b) PROSPECTIVE PROVISIONS; LOANS.—(1) The amendments made by sections 16012, 16027, and 16028 shall apply to loans to cover the cost of attendance for any period of enrollment beginning on or after January 1, 1986. (2) The amendments made by section 16013 shall apply to loans made on or after July 1, 1986.

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100 STAT. 357

(c) RETROACTIVE PROVISIONS; LOANS.—(1) The amendment made by section 16015 shall apply to any fiscal year beginning after September 30, 1984. (2) The amendments made by sections 16021 through 16026, 16029, and 16032(b) shall apply to all loans, including loans made before the enactment of this Act, and shall take effect 90 days after the enactment of this Act. (d) PROSPECTIVE PROVISION; ALL ASSISTANCE.—The amendment

made by section 16032(a) shall apply to grants, loans, or work assistance to cover the cost of attendance for any period of enrollment beginning on or after January 1, 1986. (e) RETROACTIVE PROVISION; GRANTS.—The amendment made by section 16033 shall apply to all grants, including grants awarded before the enactment of this Act, and shall take effect 90 days after the enactment of this Act. (f) RETROACTIVE PROVISIONS; ALL ASSISTANCE.—The amendment

made by section 16034 shall apply to all grants, loans, or work assistance, including such assistance awarded before the enactment of this Act, and shall take effect 90 days after the enactment of this Act.

TITLE XVII—GRADUATE MEDICAL EDUCATION COUNCIL AND TECHNICAL AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT SEC. 17001. COUNCIL ON GRADUATE MEDICAL EDUCATION.

Title VII of the Public Health Service Act is amended by adding at the end thereof the following new part: "PART H—GRADUATE MEDICAL EDUCATION "COUNCIL ON GRADUATE MEDICAL EDUCATION

"SEC. 799. (a) There is established the Council on Graduate Medi- 42 USC 295i. cal Education (hereafter in this section referred to as the 'Council'). The Council shall— "(1) prior to July 1, 1988, and every three years thereafter, provide advice and make recommendations to the Secretary and to the Committees on Labor and Human Resources, and Finance of the Senate and the Committees on Energy and Commerce and Ways and Means of the House of Representatives, with respect to— "(A) the supply and distribution of physicians in the United States; "(B) current and future shortages or excesses of physicians in medical and surgical specialties and subspecialties; "(C) issues relating to foreign medical school graduates; "(D) appropriate Federal policies with respect to the matters specified in subparagraphs (A), (B), and (C), including policies concerning changes in the financing of undergraduate and graduate medical education programs and changes in the types of medical education training in graduate medical education programs;

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 100 STAT. 358

PUBLIC LAW 99-272—APR. 7, 1986

"(E) appropriate efforts to be carried out by hospitals, schools of medicine, schools of osteopathy, and accrediting bodies with respect to the matters specified in subparagraphs (A), (B), and (C), including efforts for changes in undergraduate and graduate medical education programs; and "(F) deficiencies in, and needs for improvements in, existing data bases concerning the supply and distribution of, and post-graduate training programs for, physicians in the United States and steps that should be taken to eliminate those deficiencies; and "(2) encourage entities providing graduate medical education to conduct activities to voluntarily achieve the recommendations of the Council under paragraph (1)(E). "(b) The Council shall be composed of^ "(1) the Assistant Secretary for Health or the designee of the Assistant Secretary; "(2) the Administrator of the Health Care Financing Administration; "(3) the Chief Medical Director of the Veterans' Administration; "(4) 6 members appointed by the Secretary to include representatives of practicing primary care physicians, national and specialty physician organizations, foreign medical graduates, and medical student and house staff associations; "(5) 4 members appointed by the Secretary to include representatives of schools of medicine and osteopathy and public and private teaching hospitals; and "(6) 4 members appointed by the Secretary to include representatives of health insurers, business, and labor. "(c)(1) Members of the Council appointed under paragraphs (4), (5), and (6) of subsection (b) shall be appointed for a term of 4 years, except that the term of office of the members first appointed shall expire, as designated by the Secretary at the time of appointment, 4 at the end of one year, 4 at the end of 2 years, 3 at the end of 3 years, and 3 at the end of 4 years. "(2) The Secretary shall appoint the first members to the Council under paragraphs (4), (5), and (6) of subsection (b) within 60 days after the date of enactment of this section. "(d) The Council shall elect one of its members as Chairman of the Council. "(e) Nine members of the Council shall constitute a quorum, but a lesser number may hold hearings. "(f) Any vacancy in the Council shall not affect its power to function. "(g) Each member of the Council who is not otherwise employed by the United States Government shall receive compensation at a rate equal to the daily rate prescribed for GS-18 under the General Schedule under section 5332 of title 5, United States Code, for each day, including traveltime, such member is engaged in the actual performance of duties as a member of the Council. A member of the Council who is an officer or employee of the United States Government shall serve without additional compensation. All members of the Council shall be reimbursed for travel, subsistence, and other necessary expenses incurred by them in the performance of their duties.

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100 STAT. 359

"(h)(1) In order to carry out the provisions of this section, the Council is authorized to— "(A) collect such information, hold such hearings, and sit and act at such times and places, either as a whole or by subcommittee, and request the attendance and testimony of such witnesses and the production of such books, records, correspondence, memoranda, papers, and documents as the Council or such subcommittee may consider available; and "(B) request the cooperation and assistance of Federal departments, agencies, and instrumentalities, and such departments, agencies, and instrumentalities are authorized to provide such cooperation and assistance. "(2) The Council shall coordinate activities carried out under this section with the activities of the National Advisory Council on Health Professions Education under section 702 and with the activities of the Secretary under section 708. The Secretary shall, in cooperation with the Council and pursuant to the recommendations of the Council, take such steps as are practicable to eliminate deficiencies in the data base established under section 708 and shall make available in its reports such comprehensive data sets as are developed pursuant to this section. "(i) In the reports required under subsection (a), the Council shall specify its activities during the period for which the report is made. "(j) The Council shall terminate on September 30, 1996." SEC. 17002. SPECIAL PAY PROVISIONS. (a)

SERVICE

IN

THE

INDIAN

HEALTH

SERVICE.—(1)

42 USC 292b. 42 USC 292h.

Reports. Termination date.

Section

208(a)(2)(B) of the Public Health Service Act (42 U.S.C. 210(a)(2)(B)) is amended by inserting "(other than an officer serving in the Indian Health Service)" after "Corps". (2) The amendment made by paragraph (1) shall take effect as of 42 USC 210 note. October 7, 1985. (b)

EMPLOYEES AT THE GILLIS W,

LONG

HANSEN'S

DISEASE

CENTER.—Section 208(e) of the Public Health Service Act (42 U.S.C. 210(e)) is amended to read as follows: "(e) Any civilian employee of the Service who is employed at the Gillis W. Long Hansen's Disease Center on the date of the enactment of the Consolidated Omnibus Budget Reconciliation Act of 1985 shall be entitled to receive, in addition to any compensation to Ante, p. 82. which the employee may otherwise be entitled and for so long as the employee remains employed at the Center, an amount equal to onefourth of such compensation.". SEC. 17003. USE OF FISCAL AGENTS BY PUBLIC HEALTH SERVICE.

Title XXI of the Public Health Service Act is amended by adding at the end the following new section: USE OF FISCAL AGENTS

"SEC. 2116. (a) The Secretary may enter into contracts with fiscal Contracts. 42 USC agents— "(1)(A) to determine the amounts payable to persons who, on 300aa-15. behalf of the Indian Health Service, furnish health services to eligible Indians, "(B) to determine the amounts payable to persons who, on behalf of the Public Health Service, furnish health services to individuals pursuant to section 319 or 322, 42 USC 247d, 249.

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Page:United States Statutes at Large Volume 100 Part 1.djvu/396

 100 STAT. 360

42 USC I395u.

25 USC 450 note.

PUBLIC LAW 99-272—APR. 7, 1986

"(2) to receive, disburse, and account for funds in making payments described in paragraph (1), "(3) to make such audits of records as may be necessary to assure that these payments are proper, and "(4) to perform such additional functions as may be necessary to carry out the functions described in paragraphs (1) through (3). "(b)(1) Contracts under subsection (a) may be entered into without regard to section 3709 of the Revised Statutes (41 U.S.C. 5) or any other provision of law requiring competition. "(2) No such contract shall be entered into with an entity unless the Secretary finds that the entity will perform its obligations under the contract efficiently and effectively and will meet such requirements as to financial responsibility, legal authority, and other matters as he finds pertinent. "(c) A contract under subsection (a) may provide for advances of funds to enable entities to make payments under the contract. "(d) Subsections (d) and (e) of section 1842 of the Social Security Act shall apply to contracts with entities under subsection (a) in the same manner as they apply to contracts with carriers under that section. "(e) In this section, the term 'fiscal agent' means a carrier described in section 1842(f)(1) of the Social Security Act and includes, with respect to contracts under subsection (a)(1)(A), an Indian tribe or tribal organization acting under contract with the Secretary under the Indian Self-Determination Act (Public Law 93-638).". SEC. 17004. TECHNICAL REVISIONS RELATING TO EMERGENCY MEDICAL SERVICES FOR CHILDREN.

Grants. State and local governments.

42 USC 292a.

Section 1910 of the Public Health Service Act (42 U.S.C. 300w-9) is amended— (1) by striking out "grant to not more than four States in any fiscal year" in the first sentence of subsection (a) and inserting in lieu thereof "not more than four grants in any fiscal year to States or accredited schools of medicine in States"; (2) by adding at the end of subsection (a) the following new sentence: "Only one grant under this subsection may be made in a State (to a State or to a school of medicine in such State) in any fiscal year."; (3) by striking out "other States" in subsection (b) and inserting in lieu thereof "States in which grants under such subsection have not been made"; (4) by redesignating subsection (c) as subsection (d); and (5) by inserting after subsection (b) the following new subsection: "(c) For purposes of this section— "(1) the term 'school of medicine' has the same meaning as in section 701(4); and "(2) the term 'accredited' has the same meaning as in section 701(5).".

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Page:United States Statutes at Large Volume 100 Part 1.djvu/397

 PUBLIC LAW 99-272—APR. 7, 1986

100 STAT. 361

TITLE XVIII—SMALL BUSINESS PROGRAMS SEC. 18001. SMALL BUSINESS ADMINISTRATION AUTHORIZATION LEVELS.

PROGRAM

AND

Section 20 of the Small Business Act is amended by adding the following new subsections: "(u) The following program levels are authorized for fiscal year 1986— "(1) for the programs authorized by section 7(a) of this Act, the Administration is authorized to make $60,000,000 in direct and immediate participation loans; and of such sum, the Administration is authorized to make $15,000,000 in loans as provided in paragraph (10), $25,000,000 in loans as provided in paragraph (11), and $20,000,000 in loans to disabled veterans and Vietnam era veterans as defined in section 1841, title 38, United States Code, under the general terms and conditions of title III of Public Law 97-72; "(2) for the programs authorized by section 7(a) of this Act and section 503 of the Small Business Investment Act of 1958, the Administration is authorized to make $2,971,000,000 in deferred participation loans and guarantees of debentures; and of such sum, the Administration is authorized to make $5,000,000 in loans as provided in paragraph (10), $60,000,000 in loans as provided in paragraph (11), $15,000,000 in loans as provided in paragraph (12), $400,000,000 in loans as provided in paragraph (13) and guarantees of debentures as provided in section 503; "(3) for the programs authorized by title III of the Small Business Investment Act of 1958, the Administration is authorized to make $41,000,000 in direct purchases of debentures and preferred securities and to make $250,000,000 in guarantees of debentures; "(4) for the programs authorized by part B of title IV of the Small Business Investment Act of 1958, the Administration is authorized to enter into guarantees not to exceed $1,050,000,000; and "(5) for the programs authorized in sections 404 and 405 of the Small Business Investment Act of 1958, the Administration is authorized to enter into guarantees not to exceed $75,000,000. "(v) There are authorized to be appropriated to the Administration for fiscal year 1986, $515,000,000. Of such sum, $295,000,000 shall be available for the purpose of carrying out the programs referred to in paragraphs (1) through (3) of subsection (u); $12,000,000 shall be available for the purposes of carrying out the provisions of section 412 of the Small Business Investment Act of 1958; and $208,000,000 shall be available for salaries and expenses of the Administration. There also are hereby authorized to be appropriated such sums as may be necessary and appropriate to carry out the provisions and purposes, including administrative expenses, of sections 7(b)(l) and 703)(2) of this Act; and there are authorized to be transferred from the disaster loan revolving funds such sums as may be necessary and appropriate for such administrative expenses, "(w) The following program levels are authorized for fiscal year 1987—

15 USC 631 note.

15 USC 636. Loans. Veterans.

38 USC 101 note. 15 USC 697.

15 USC 681.

15 USC 694a.

15 USC 694-1, 694-2. Loans.

15 USC 694c.

15 USC 636.

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Page:United States Statutes at Large Volume 100 Part 1.djvu/398

 100 STAT. 362

PUBLIC LAW 99-272—APR. 7, 1986

"(1) for the programs authorized by section 7(a) of this Act, the Administration is authorized to make $70,000,000 in direct and immediate participation loans; and of such sum, the Administration is authorized to make $15,000,000 in loans as provided in paragraph (10), $35,000,000 in loans as provided in paragraph (11), and $20,000,000 in loans to disabled veterans and Vietnam era veterans as defined in section 1841, title 38, United States Code, under the general terms and conditions of title III of Public Law 97-72; 38 USC 101 note. "(2) for the programs authorized by section 7(a) of this Act and section 503 of the Small Business Investment Act of 1958, 15 USC 697. the Administration is authorized to make $3,134,000,000 in deferred participation loans and guarantees of debentures; and of such sum, the Administration is authorized to make $5,000,000 in loans as provided in paragraph (10), $63,000,000 in loans as provided in paragraph (11), $16,000,000 in loans as provided in paragraph (12), $450,000,000 in loans as provided in paragraph (13) and guarantees of debentures as provided in section 503; "(3) for the programs authorized by title III of the Small Business Investment Act of 1958, the Administration is au15 USC 681. thorized to make $41,000,000 in direct purchases of debentures and preferred securities and to make $261,000,000 in guarantees of debentures; "(4) for the programs authorized by part B of title IV of the Small Business Investment Act of 1958, the Administration is 15 USC 694a. authorized to enter into guarantees not to exceed $1,096,000,000; and "(5) for the programs authorized in sections 404 and 405 of the 15 USC 694-1, Small Business Investment Act of 1958, the Administration is 694-2. authorized to enter into guarantees not to exceed $75,000,000. "(x) There are authorized to be appropriated to the Administration for fiscal year 1987, $605,000,000. Of such sum, $381,000,000 shall be available to carry out the programs referred to in paragraphs (1) through (3) of subsection (w); $14,000,000 shall be available to carry out the provisions of section 412 of the Small Business Investment Act of 1958; and $210,000,000 shall be available for 15 USC 694c. salaries and expenses of the Administration. There also are hereby authorized to be appropriated such sums as may be necessary and appropriate to carry out the provisions and purposes, including administrative expenses, of sections 7(b)(1) and 7(b)(2) of this Act; 15 USC 636. and there are authorized to be transferred from the disaster loan revolving funds such sums as may be necessary and appropriate for such administrative expenses. Loans. "(y) The following program levels are authorized for fiscal year Veterans. 1988— "(1) for the programs authorized by section 7(a) of this Act, the Administration is authorized to make $75,000,000 in direct and immediate participation loans; and of such sum, the Administration is authorized to make $15,000,000 in loans as provided in paragraph (10), $40,000,000 in loans as provided in paragraph (11), and $20,000,000 in loans to disabled veterans and Vietnam era veterans as defined in section 1841, title 38, United States Code, under the general terms and conditions of title III of Public Law 97-72; "(2) for the programs authorized by section 7(a) of this Act 15 USC 697. and section 503 of the Small Business Investment Act of 1958, Loans. Veterans.

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Page:United States Statutes at Large Volume 100 Part 1.djvu/399

 PUBLIC LAW 99-272—APR. 7, 1986

100 STAT. 363

the Administration is authorized to make $3,245,000,000 in deferred participation loans and guarantees of debentures; and of such sum, the Administration is authorized to make $5,000,000 in loans as provided in paragraph (10), $65,000,000 in loans as provided in paragraph (11), $16,000,000 in loans as provided in paragraph (12), $450,000,000 in loans as provided in paragraph (13) and guarantees of debentures as provided in section 503; "(3) for the programs authorized by title III of the Small Business Investment Act of 1958, the Administration is authorized to make $41,000,000 in direct purchases of debentures and preferred securities and to make $272,000,000 in guarantees of debentures; "(4) for the programs authorized by part B of title IV of the Small Business Investment Act of 1958, the Administration is authorized to enter into guarantees not to exceed $1,142,000,000; and "(5) for the programs authorized in sections 404 and 405 of the Small Business Investment Act of 1958, the Administration is authorized to enter into guarantees not to exceed $75,000,000. "(z) There are authorized to be appropriated to the Administration for fiscal year 1988, $634,000,000. Of such sum, $409,000,000 shall be available to carry out the programs referred to in paragraphs (1) through (3) of subsection (y); $13,000,000 shall be available to carry out the provisions of section 412 of the Small Business Investment Act of 1958; and $212,000,000 shall be available for salaries and expenses of the Administration. There also are hereby authorized to be appropriated such sums as may be necessary and appropriate for the carrying out of the provisions and purposes, including administrative expenses, of sections 7(b)(1) and 7(b)(2) of this Act; and there are authorized to be transferred from the disaster loan revolving funds such sums as may be necessary and appropriate for such administrative expenses..

15 USC 697. 15 USC 681.

15 USC 694a.

15 USC 694-1, 694-2.

15 USC 694c.

15 USC 636.

SEC. 18002. TECHNICAL AND CLERICAL AMENDMENTS.

Section 20 of the Small Business Act is amended— 15 USC 631 note. (1) in subsection (t), as added by section 302 of Public Law 98-270 (A) by inserting "(1)" after "(t)"; (B) by striking out "each of fiscal years 1985 and 1986," and inserting in lieu thereof "fiscal year 1985"; and (C) by striking out "for each of such years"; and (2) in subsection (t), as added by section 3 of Public Law 98395— (A) by redesignating paragraphs (1), (2), and (3) as subparagraphs (A), (B), and (C), respectively; and (B) by redesignating such subsection (t) as paragraph (2). SEC. 18003. DETERMINATION OF LABOR SURPLUS AREAS.

(a) IN GENERAL.—Section 15 of the Small Business Act is amended 15 USC 644. by adding at the end thereof the following new subsection: "(n) For purposes of this section, the determination of labor surplus areas shall be made on the basis of the criteria in effect at the time of the determination, except that any minimum population criteria shall not exceed twenty-five thousand. Such determination, as modified by the preceding sentence, shall be made by the Secretary of Labor.".

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Page:United States Statutes at Large Volume 100 Part 1.djvu/400

 100 STAT. 364 15 USC 644 note.

PUBLIC LAW 99-272—APR. 7, 1986

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall take effect on the ninetieth day after the date of the enactment of this Act. SEC. 18004. FEDERAL FINANCING BANK PURCHASE OF GUARANTEED OBLIGATIONS. (a) IN GENERAL.—Title III of the Small Business Investment Act of 1958 is amended by adding at the end thereof the following new section: "GUARANTEED OBLIGATIONS NOT ELIGIBLE FOR PURCHASE BY FEDERAL FINANCING BANK

15 USC 687k.

"SEC. 320. Nothing in any provision of law shall be construed to authorize the Federal Financing Bank to acquire after September 30, 1985— "(1) any obligation the payment of principal or interest on which has at any time been guaranteed in whole or in part under this title, "(2) any obligation which is an interest in any obligation described in paragraph (1), or "(3) any obligation which is secured by, or substantially all of the value of which is attributable to, any obligation described in paragraph (1) or (2).". (b) CLERICAL AMENDMENT.—The table of sections for title III is amended by adding at the end thereof the following new item: "Sec. 320. Guaranteed obligations not eligible for purchase by Federal Financing Bank.". SEC. 18005. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES.

(a) IN GENERAL.—Title III of the Small Business Investment Act of 1958 is amended by adding at the end thereof the following new section: "ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES

15 USC 687/.

"SEC. 321. (a) The Administration is authorized to issue trust certificates representing ownership of all or a fractional part of debentures issued by small business investment companies and guaranteed by the Administration under this Act: Provided, That such trust certificates shall be based on and backed by a trust or pool approved by the Administration and composed solely of guaranteed debentures. "(b) The Administration is authorized, upon such terms and conditions as are deemed appropriate, to guarantee the timely payment of the principal of and interest on trust certificates issued by the Administration or its agent for purposes of this section. Such guarantee shall be limited to the extent of principal and interest on the guaranteed debentures which compose the trust or pool. In the event that a debenture in such trust or pool is prepaid, either voluntarily or in the event of default, the guarantee of timely payment of principal and interest on the trust certificates shall be reduced in proportion to the amount of principal and interest such prepaid debenture represents in the trust or pool. Interest on prepaid or defaulted debentures shall accrue and be guaranteed by the Administration only through the date of payment on the guarantee. During the term of the trust certificate, it may be called for redemp-

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Page:United States Statutes at Large Volume 100 Part 1.djvu/401

 PUBLIC LAW 99-272—APR. 7, 1986

100 STAT. 365

tion due to prepayment or default of all debentures constituting the pool. "(c) The full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any guarantee of such trust certificates issued by the Administration or its agent pursuant to this section. "(d) The Administration shall not collect any fee for any guarantee under this section: Provided, That nothing herein shall preclude any agent of the Administration from collecting a fee approved by the Administration for the functions described in subsection (f)(2) of this section. "(e)(1) In the event the Administration pays a claim under a guarantee issued under this section, it shall be subrogated fully to the rights satisfied by such payment. "(2) No State or local law, and no Federal law, shall preclude or limit the exercise by the Administration of its ownership rights in the debentures constituting the trust or pool against which the trust certificates are issued. "(f) The Administration shall— "(1) provide for a central registration of all trust certificates sold pursuant to this section; such central registration shall include with respect to each sale, identification of each development company; the interest rate paid by the development company; commissions, fees, or discounts paid to brokers and dealers in trust certificates; identification of each purchaser of the trust certificate; the price paid by the purchaser for the trust certificate; the interest rate paid on the trust certificate; the fees of any agent for carrying out the functions described in paragraph (2); and such other information as the Administration deems appropriate; "(2) contract with an agent to carry out on behalf of the Contracts Administration the central registration functions of this section and the issuance of trust certificates to facilitate poolings; such agent shall provide a fidelity bond or insurance in such amounts as the Administration determines to be necessary to fully protect the interests of the Government; "(3) prior to any sale, require the seller to disclose to a purchaser of a trust certificate issued pursuant to this section, information on the terms, conditions, and yield of such instrument; and "(4) have the authority to regulate brokers and dealers in trust certificates sold pursuant to this section.", (b) RULES AND REGULATIONS; CONSULTATION.—(1) Notwithstanding

15 USC 687Z note.

any law, rule, or regulation, within 60 days after the date of the enactment of this Act, the Small Business Administration shall develop and promulgate final rules and regulations to implement the central registration provisions provided for in section 321(f)(1) of the Small Business Investment Act, and shall contract with an Ante, p. 364. agent for an initial period of not to exceed two years to carry out the functions provided for in sections 321(f)(2) and 321(f)(3) of such Act. (2) Notwithstanding any law, rule, or regulation, within 60 days 15 USC 697b after the date of the enactment of this Act, the Small Business note. Administration also shall consult with representatives of appropriate Federal and State agencies and officials, the securities industry, financial institutions and lenders, and small business persons, and shall develop and promulgate final rules and regulations to

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Page:United States Statutes at Large Volume 100 Part 1.djvu/402

 100 STAT. 366 Infra; post, P- 367.

PUBLIC LAW 99-272—APR. 7, 1986 implement sections 504 and 505 of the Small Business Investment

Act.

(c) CLERICAL AMENDMENT.—The table of sections for title III of such Act is amended by adding at the end thereof the following new item: "Sec. 321. Issuance and guarantee of trust certificates.". SEC. 18006. TERMINATION OF AUTHORITY TO MAKE CERTAIN DISASTER ASSISTANCE LOANS.

(a) IN GENERAL.—The Small Business Act is amended— 15 USC 636. (1) in section (7)(b)— (A) by striking out "The" after "(b)" and inserting in lieu Agriculture and thereof "Except as to agricultural enterprises as defined in agricultural section 18(b)(1) of this Act, the,"; commodities. (gj ^^ Striking out the semicolon at the end of paragraph (2) and inserting in lieu thereof a period; and (C) by striking out paragraphs (3) and (4); (2) in section 7(c)(4) by striking out the last, undesignated paragraph; and 15 USC 647. (3) in section 18(a) by striking out all that follows "Federal Government," through "Consolidated Farm and Rural Development Act". 15 USC 636 note. O> PIPELINE LoANS OR PREVIOUS DISASTERS.—Notwithstanding the t) amendments made by this section, sections 18002 and 18016, or any other provision of law, the Small Business Administration shall continue to accept, process, and approve loan applications under paragraphs (1) through (4) of subsection 7(b) of the Small Business Act and shall obligate and disburse loan funds on account of disasters declared before October 1, 1985, even if any such application is filed after the date of the enactment of this Act. 15 USC 636.

15 USC 697a.

15 USC 697.

SEC. 18007. GUARANTEE FEE. Section 7(a) of the Small Business Act is amended by adding at the end thereof the following new sentence: "(16) The Administration shall collect a guarantee fee equal to two percent of the amount of the deferred participation share of any loan under this subsection other than a loan repayable in one year or less or a loan under paragraph (13). The fee shall be payable by the participating lending institution and may be charged to the borrower.". SEC. 18008. PILOT PROGRAM INVOLVING SALE OF DEVELOPMENT COMPANY DEBENTURES. (a) PILOT PROGRAM.—Title V of the Small Business Investment Act of 1958 is amended by adding the following new section: "SEC. 504. (a) Notwithstanding any other law, rule, or regulation, the Administration shall conduct a pilot program involving the sale to investors, either publicly or by private placement, of debentures guaranteed pursuant to section 503 of the Small Business Investment Act of 1958 as follows— "(1) of the program levels otherwise authorized by law for fiscal year 1986, an amount not to exceed $200,000,000; and "(2) of the program levels otherwise authorized by law for fiscal year 1987, an amount not to exceed $295,000,000. "(b) Nothing in any provision of law shall be construed to authorize the Federal Financing Bank to acquire—

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Page:United States Statutes at Large Volume 100 Part 1.djvu/403

 PUBLIC LAW 99-272—APR. 7, 1986

100 STAT. 367

"(1) any obligation the payment of principal or interest on which at any time has been guaranteed in whole or in part under section 503 of the Small Business Investment Act of 1958 and which is being sold pursuant to the provisions of the pilot program authorized in this section, "(2) any obligation which is an interest in any obligation described in paragraph (1), or "(3) any obligation which is secured by, or substantially all of the value of which is attributable to, any obligation described in paragraph (1) or (2).". 0)) REPORT ON PILOT PROGRAMS.—The Administration shall report to the President and the Congress on the conduct of the pilot program established under subsection (a) not later than 90 days after the date on which the last sale is made pursuant to such subsection in each fiscal year, and unless a report has been made not later than October 1 of 1986 and 1987, the Administration shall make an interim report by such dates. (c) AUTHORITY FOR ISSUANCE OF TRUST CERTIFICATES.—Such title is further amended by adding at the end thereof the following new section: "SEC. 505. (a) The Administration is authorized to issue trust certificates representing ownership of all of a fractional part of debentures issued by State or local development companies and guaranteed by the Administration under this Act: Provided, That such trust certificates shall be based on and backed by a trust or pool approved by the Administration and composed solely of guaranteed debentures. "(h) The Administration is authorized, upon such terms and conditions as are deemed appropriate, to guarantee the timely payment of the principal of and interest on trust certificates issued by the Administration or its agent for purposes of this section. Such guarantee shall be limited to the extent of principal and interest on the guaranteed debentures which compose the trust or pool. In the event that a debenture in such trust or pool is prepaid, either voluntarily or in the event of default, the guarantee of timely payment of principal and interest on the trust certificates shall be reduced in proportion to the amount of principal and interest such prepaid debenture represents in the trust or pool. Interest on prepaid or defaulted debentures shall accrue and be guaranteed by the Administration only through the date of payment on the guarantee. During the term of the trust certificate, it may be called for redemption due to prepayment or default of all debentures constituting the pool. "(c) The full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any guarantee of such trust certificates issued by the Administration or its agent pursuant to this section. "(d) The Administration shall not collect any fee for any guarantee under this section: Provided, That nothing herein shall preclude any agent of the Administration from collecting a fee approved by the Administration for the functions described in subsection (f)(2) of this section. "(e)(1) In the event the Administration pays a claim under a guarantee issued under this section, it shall be subrogated fully to the rights satisfied by such payment. "(2) No State or local law, and no Federal law, shall preclude or limit the exercise by the Administration of its ownership rights in

15 USC 697.

15 USC 697a note.

15 USC 697b.

State and local governments.

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Page:United States Statutes at Large Volume 100 Part 1.djvu/404

 100 STAT. 368

Contracts. Insurance.

15 USC 697b note.

Ante, p. 367.

Ante, p. 366.

PUBLIC LAW 99-272—APR. 7, 1986

the debentures constituting the trust or pool against which the trust certificates are issued. "(f) The Administration shall— "(1) provide for a central registration of all trust certificates sold pursuant to this section; such central registration shall include with respect to each sale, identification of each development company; the interest rate paid by the development company; commissions, fees, or discounts paid to brokers and dealers in trust certificates; identification of each purchaser of the trust certificate; the price paid by the purchaser for the trust certificate; the interest rate paid on the trust certificate; the fees of any agent for carrying out the functions described in paragraph (2); and such other information as the Administration deems appropriate; "(2) contract with an agent to carry out on behalf of the Administration the central registration functions of this section and the issuance of trust certificates to facilitate poolings; such agent shall provide a fidelity bond or insurance in such amounts as the Administration determines to be necessary to fully protect the interests of the Government; "(3) prior to any sale, require the seller to disclose to a purchaser of a trust certificate issued pursuant to this section, information on the terms, conditions, and yield of such instrument; and "(4) have the authority to regulate brokers and dealers in trust certificates sold pursuant to this section.", (d) RULES AND REGULATIONS.—(1) Notwithstanding any law, rule,

or regulation, within 60 days after the date of enactment of this Act, the Small Business Administration shall develop and promulgate final rules and regulations to implement the central registration provisions provided for in section 505(fKl) of the Small Business Investment Act, and shall contract with an agent for an initial period of not to exceed two years to carry out the functions provided for in section 505(f)(2) of such Act. (2) Notwithstanding any law, rule or regulation, within 60 days after the date of enactment of this Act, the Small Business Administration also shall consult with representatives of appropriate Federal and State agencies and officials, the securities industry, financial institutions and lenders, and small business persons, and shall develop and promulgate final rules and regulations to implement sections 504 and 505 of the Small Business Investment Act. SEC. 18009. MISREPRESENTATION AS A SMALL BUSINESS OR MINORITY CONCERN.

Section 16 of the Small Business Act is amended by adding to the end thereof the following new subsections: Contracts. "(d) Whoever misrepresents the status of any concern or person as Law a 'small business concern' or 'small business concern owned and enforcement controlled by socially and economically disadvantaged individuals', and crime. in order to obtain for oneself or another any— 15 USC 638, 644. "(1) prime contract to be awarded pursuant to section 9 or 15; "(2) subcontract to be awarded pursuant to section 8(a); 15 USC 637. "(3) subcontract that is to be included as part or all of a goal contained in a subcontracting plan required pursuant to section 8(d); or "(4) prime or subcontract to be awarded as a result, or in furtherance, of any other provision of Federal law that specif!15 USC 645.

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Page:United States Statutes at Large Volume 100 Part 1.djvu/405

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100 STAT. 369

cally references section 8(d) for a definition of program 15 USC 637. eligibility, shall be punished by a fine of not more than $50,000 or by imprisonment for not more than five years, or both. "(e) Any representation of the status of any concern or person as a 'small business concern' or 'small business concern owned and controlled by socially and economically disadvantaged individuals' in order to obtain any prime contract or subcontract enumerated in subsection (d) of this section shall be in writing.". SEC. 18010. REPORT CONCERNING ALTERNATIVE SOURCES FOR LOAN GUARANTEES. Not later than June 30, 1986, the Administrator of the Small Business Administration shall submit to the Committees on Small Business of the Senate and the House of Representatives an internal report concerning— (1) the options available to provide a guarantee on loans under section 7(a) of the Small Business Act from sources 15 USC 636. outside the Federal Government, together with such recommendations as the Administrator may have with respect to such options, including an evaluation of the feasibility of establishing a corporation owned by the Federal Government to make such guarantees; and (2) the imposition, on each participating lender in the guaranteed loan program under section 7(a) of the Small Business Act, of an annual fee of between one-quarter of one percent and one percent of the value of the unpaid balance of any loan made under such program, particularly on the revenues that could be expected and whether such revenues could be used for a loss reserve fund or to defray the cost of administration of the program. SEC. 18011. USER FEES. (a) REPORT ON USER FEES.—Not later than September 30, 1986, the Small Business Administration shall submit to the Committees on Small Business of the Senate and the House of Representatives a report on user fees. The report shall specify for each fee which is currently being imposed or which is under consideration— (1) the type of service provided by the Administration for which the fee is or may be charged; (2) the amount of fee imposed or being considered; (3) the formula for setting the fee; and (4) the statutory or regulatory authority for the fee. Ob) REVIEW OF APPROPRIATENESS OF FEES.—The Administration shall review all other services provided by the Administration for which no fee is currently being imposed and include in the report its findings and recommendations as to— (1) whether or not a fee should be imposed for each service; and (2) whether statutory authority is needed to impose the fee. SEC. 18012. UTILIZATION OF PROGRAM AUTHORITY.

Section 20(a) of the Small Business Act is amended— 15 USC 631 note. (1) by inserting "(1)" after "SEC. 20. (a)"; and (2) by adding at the end thereof the following: "(2) Notwithstanding any other provision of law, the Adminis- Loans. tration shall enter into commitments for direct loans and to

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text: Index:United States Statutes at Large Volume 101 Part 2.djvu


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Page:United States Statutes at Large Volume 100 Part 1.djvu/406

 100 STAT. 370

15 USC 661 note.

PUBLIC LAW 99-272—APR. 7, 1986 guarantee loans, debentures, payment of rentals, or other amounts due under qualified contracts and other types of financial assistance and enter into commitments to purchase debentures and preferred securities and to guarantee sureties against loss pursuant to programs under this Act and the Small Business Investment Act of 1958, in the full amounts provided by law subject only to (A) the availability of qualified applications, and (B) limitations contained in appropriations Acts. Nothing in this paragraph authorizes the Administration to reduce or limit its authority to enter into such commitments.".

SEC. 18013. BUSINESS LENDING REFORMS.

15 USC 636.

Section 7(a)(2) of the Small Business Act is amended— (1) by striking out "$100,000" both places it appears and inserting in lieu thereof "$155,000"; (2) by striking out "90" in subparagraph (B) and inserting in lieu thereof "85^'; (3) by striking out "90" in the proviso and inserting in lieu thereof "85"; and (4) by inserting before the period the following: ": Provided, further. That the Administration may reduce its participation below the per centums stated in this paragraph if the lender requests the reduction under the preferred lenders program or any successor thereto. As used in this sentence the term 'preferred lenders program' means a program under which, pursuant to a written agreement between the lender and the Administration, the lender has been delegated (1) complete authority to make and close loans with a guarantee from the Administration without obtaining the prior specific approval of the Administration, and (2) authority to service and liquidate such loans". SEC. 18014. SURETY GUARANTEES.

15 USC 694b.

Section 411 of the Small Business Investment Act of 1958 is amended— (1) in subsection (a) by striking out "$1,000,000" and inserting in lieu thereof "$1,250,000"; and (2) in subsection (e)(2) by striking out "$1,000,000" and inserting in lieu thereof "$1,250,000". SEC. 18015. ELIGIBILITY OF SMALL BUSINESS OWNED BY INDIAN TRIBES.

(a) CONSIDERATION OF INDIAN TRIBES.—Section 2(e)(1)(C) of the Small Business Act (15 U.S.C. 631(e)(2)(C)) is amended by inserting "Indian tribes," after "Native Americans,". (b) CLARIFICATION OF DEFINITION OF "SOCIALLY AND ECONOMICALLY DISADVANTAGED SMALL BUSINESS CONCERN".—Paragraph (4) of sec-

tion 8(a) of such Act (15 U.S.C. 637(a)(4)) is amended to read as follows: "(4)(A) For purposes of this section, the term 'socially and economically disadvantaged small business concern' means any small business concern which meets the requirements of subparagraph (B) and— ^ "(i) which is at least 51 per centum owned by— "(I) one or more socially and economically disadvantaged individjuals, or "(II) an economically disadvantaged Indian tribe, or

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Page:United States Statutes at Large Volume 100 Part 1.djvu/407

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100 STAT. 371

"(ii) in the case of any publicly owned business, at least 51 per centum of the stock of which is owned by— "(I) one or more socially and economically disadvantaged individuals, or "(II) an economically disadvantaged Indian tribe. "(B) A small business concern meets the requirements of this subparagraph if the management and daily business operations of such small business concern are controlled by one or more— "(i) socially and economically disadvantaged individuals described in subparagraph (A)(i)(1) or subparagraph (A)(ii)(I), or "(ii) members of an economically disadvantaged Indian tribe described in subparagraph (A)(i)(II) or subparagraph (A)(iiXII).". (c) DETERMINATION OF ECONOMIC DISADVANTAGE OF AN INDIAN

TRIBE.—Paragraph (6) of such Act (15 U.S.C. 637(a)(6)) is amended by adding at the end thereof the following new sentence: "In determining the economic disadvantage of an Indian tribe, the Administration shall consider, where available, information such as the following: the per capita income of members of the tribe excluding judgment awards, the percentage of the local Indian population below the poverty level, and the tribe's access to capital markets.". (d) DEFINITION OF "INDIAN TRIBE".—Section 8(a) of such Act (15 U.S.C. 637(a)) is amended by adding at the end thereof the following new paragraph: "(13) For purposes of this subsection, the term 'Indian tribe' means any Indian tribe, band, nation, or other organized group or community of Indians, including any Alaska Native village or regional or village corporation (within the meaning of the Alaska Native Claims Settlement Act) which— 43 USC 1601 "(A) is recognized as eligible for the special programs and i^ote. services provided by the United States to Indians because of their status as Indians, or "(B) is recognized as such by the State in which such tribe, band, nation, group, or community resides.". SEC. 18016. SIZE STANDARD FOR AGRICULTURAL ENTERPRISES. Section 3(a) of the Small Business Act is amended by inserting the 15 USC 632. following before the period at the end of the first sentence: ": Provided, That notwithstanding any other provision of law, an agricultural enterprise shall be deemed to be a small business concern if it (including its affiliates) has annual receipts not in excess of $500,000". SEC.

18017. ENCOURAGEMENT OF VETERANS BUSINESS RESOURCE COUNCILS.

(a) FINDINGS.—The Congress finds that— State listing. (1) Veterans Business Resource Councils have been established in the following ten States: California, Ohio, Texas, New York, Massachusetts, Indiana, Louisiana, Maryland, Minnesota, and Missouri; (2) the concept of Veterans Business Resource Councils to establish networks of veterans with business experience assisting fellow veterans seeking to establish small businesses merits serious consideration; and (3) the majority of our Nation's Vietnam era veterans fall within the thirty-five to forty-five-year old age range, in which most people decide to enter into small business ownership.

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Page:United States Statutes at Large Volume 100 Part 1.djvu/408

 100 STAT. 372

PUBLIC LAW 99-272—APR. 7, 1986

(b) RECOMMENDATIONS.—The Congress urges the Small Business Administration— (1) to evaluate the effectiveness of the Veterans Business Resource Councils which are currently operating and to recommend improvements in their operations; (2) to develop guidelines to assist in the establishment of Veterans Business Resource Councils; and (3) to work with the remaining States and any interested organizations to encourage the establishment of Veterans Business Resource Councils in those States.

Veterans Health-Care Amendments of 1986. 38 USC 101 note.

TITLE XIX—VETERANS' PROGRAMS SEC. 19001. SHORT TITLE; REFERENCES TO TITLE 38, UNITED STATES CODE.

(a) SHORT TITLE.—This title may be cited as the "Veterans' Health-Care Amendments of 1986". (b) REFERENCES.—Except as otherwise expressly provided, whenever in this title 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 title 38, United States Code.

Subtitle A—Health Care SEC. 19011. ELIGIBILITY FOR HEALTH CARE OF VETERANS WITH NONSERVICE-CONNECTED DISABILITIES.

38 USC 610.

(a) HOSPITAL CARE AND NURSING HOME CARE.—(1) Subsection (a) of section 610 is amended to read as follows: "(a)(1) The Administrator shall furnish hospital care, and may furnish nursing home care, which the Administrator determines is needed— "(A) to any veteran for a service-connected disability; "(B) to a veteran whose discharge or release from the active military, naval, or air service was for a disability incurred or aggravated in line of duty, for any disability; "(C) to a veteran who, but for a suspension pursuant to section 351 of this title (or both such a suspension and the receipt of retired pay), would be entitled to disability compensation, but only to the extent that such veteran's continuing eligibility for such care is provided for in the judgment or settlement described in such section, for any disability; "(D) to a veteran who has a service-connected disability rated at 50 percent or more, for any disability; "(E) to any other veteran who has a service-connected disability, for any disability; "(F) to a veteran who is a former prisoner of war, for any disability; "(G) to a veteran exposed to a toxic substance or radiation, as provided in subsection (e) of this section; "(H) to a veteran of the Spanish-American War, the Mexican border period, or World War I, for any disability; and "(I) to a veteran for a non-service-connected disability, if the veteran is unable to defray the expenses of necessary care as determined under section 622(a)(1) of this title.

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Page:United States Statutes at Large Volume 100 Part 1.djvu/409

 PUBLIC LAW 99-272—APR. 7, 1986

100 STAT. 373

"(2)(A) To the extent that resources and facilities are available, the Administrator may furnish hospital care and nursing home care which the Administrator determines is needed to a veteran for a non-service-connected disability if the veteran has an income level described in section 622(a)(2) of this title. 38 USC 622. "(B) In the case of a veteran who is not described in paragraph (1) of this subsection or in subparagraph (A) of this paragraph, the Administrator may furnish hospital care and nursing home care which the Administrator determines is needed to the veteran for a non-service-connected disability— "(i) to the extent that resources and facilities are otherwise available; and "(ii) subject to the provisions of subsection (f) of this section. "(3) In addition to furnishing hospital care and nursing home care described in paragraphs (1) and (2) of this subsection through Veterans' Administration facilities, the Administrator may furnish such hospital care in accordance with section 603 of this title and may furnish such nursing home care as authorized under section 620 of this title.". (2) Such section is further amended by adding at the end the following new subsections: "(f)(1) The Administrator may not furnish hospital care or nursing home care under this section to a veteran who is eligible for such care by reason of subsection (a)(2)(B) of this section unless the veteran agrees to pay to the United States the applicable amount determined under paragraph (2) of this subsection. "(2) A veteran who is furnished hospital care or nursing home care under this section and who is required under paragraph (1) of this subsection to agree to pay an amount to the United States in order to be furnished such care shall be liable to the United States for an amount equal to the lesser of— "(A) the cost of furnishing such care, as determined by the Administrator; and "(B) the amount determined under paragraph (3) of this subsection. "(3)(A) In the case of hospital care furnished during any 365-day Medicare. period, the amount referred to in paragraph (2)(B) of this subsection is— "(i) the amount of the inpatient Medicare deductible, plus "(ii) one-half of such amount for each 90 days of care (or fraction thereof) after the first 90 days of such care during such 365-day period. "(B) In the case of nursing home care furnished during any 365day period, the amount referred to in paragraph (2)(B) of this subsection is the amount of the inpatient Medicare deductible for each 90 days of such care (or fraction thereof) during such 365-day period. "(C)(i) Except as provided in clause (ii) of this subparagraph, in the case of a veteran who is admitted for nursing home care under this section after being furnished, during the preceding 365-day period, hospital care for which the veteran has paid the amount of the inpatient Medicare deductible under this subsection and who has not been furnished 90 days of hospital care in connection with such payment, the veteran shall not incur any liability under paragraph (2) of this subsection with respect to such nursing home care until— "(I) the veteran has been furnished, beginning with the first day of such hospital care furnished in connection with such

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Page:United States Statutes at Large Volume 100 Part 1.djvu/410

 100 STAT. 374

38 USC 612.

State and local governments.

PUBLIC LAW 99-272—APR. 7, 1986

payment, a total of 90 days of hospital care and nursing home care; or "(II) the end of the 365-day period applicable to the hospital care for which payment was made, whichever occurs first. "(ii) In the case of a veteran who is admitted for nursing home care under this section after being furnished, during any 365-day period, hospital care for which the veteran has paid an amount under subparagraph (A)(ii) of this paragraph and who has not been furnished 90 days of hospital care in connection with such payment, the amount of the liability of the veteran under paragraph (2) of this subsection with respect to the number of days of such nursing home care which, when added to the number of days of such hospital care, is 90 or less, is the difference between the inpatient Medicare deductible and the amount paid under such subparagraph until— "(I) the veteran has been furnished, beginning with the first day of such hospital care furnished in connection with such payment, a total of 90 days of hospital care and nursing home care; or "(II) the end of the 365-day period applicable to the hospital care for which payment was made, whichever occurs first. "(D) In the case of a veteran who is admitted for hospital care under this section after having been furnished, during the preceding 365-day period, nursing home care for which the veteran has paid the amount of the inpatient Medicare deductible under this subsection and who has not been furnished 90 days of nursing home care in connection with such payment, the veteran shall not incur any liability under paragraph (2) of this subsection with respect to such hospital care until— "(i) the veteran has been furnished, beginning with the first day of such nursing home care furnished in connection with such payment, a total of 90 days of nursing home care and hospital care; or "(ii) the end of the 365-day period applicable to the nursing home care for which payment was made, whichever occurs first. "(E) A veteran may not be required to make a payment under this subsection for hospital care or nursing home care furnished under this section during any 90-day period in which the veteran is furnished medical services under section 612(f) of this title to the extent that such payment would cause the total amount paid by the veteran under this subsection for hospital care and nursing home care furnished during that period and under section 612(f)(4) of this title for medical services furnished during that period to exceed the amount of the inpatient Medicare deductible in effect on the first day of such period. '(4) Amounts collected or received on behalf of the United States under this subsection shall be deposited in the Treasury as miscellaneous receipts. "(5) For the purposes of this subsection, the term 'inpatient Medicare deductible' means the amount of the inpatient hospital deductible in effect under section 18130t)) of the Social Security Act (42 U.S.C. 1395e(b)) on the first day of the 365-day period applicable under paragraph (3) of this subsection. "(g) Nothing in this section requires the Administrator to furnish care to a veteran to whom another agency of Federal, State, or local

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Page:United States Statutes at Large Volume 100 Part 1.djvu/411

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100 STAT. 375

government has a duty under law to provide care in an institution of such government.". (b) MEDICAL SERVICES FURNISHED ON AN OUTPATIENT OR AMBULA-

TORY BASIS.—(1) Subsection (a) of section 612 is amended— 38 USC 612. (A) by striking out the first sentence and inserting in Heu thereof the following: "(1) Except as provided in subsection (b) of this section, the Administrator may furnish such medical services as the Administrator determines are needed— "(A) to any veteran for a service-connected disability (including a disability that was incurred or aggravated in line of duty and for which the veteran was discharged or released from the active military, naval, or air service); and "(B) for any disability of a veteran who has a service-connected disability rated at 50 percent or more."; (B) by designating the sentence beginning "The Administrator may also" as paragraph (2) and in such sentence striking out "The Administrator may also furnish to any such veteran" and inserting in lieu thereof "As part of medical services furnished to a veteran under paragraph (1) of this subsection, the Administrator may furnish to the veteran"; (C) by striking out the sentence beginning "In the case of; and (D) by adding at the end of such subsection the following: "(3) In addition to furnishing medical services under this subsection through Veterans' Administration facilities, the Administrator may furnish such services in accordance with section 603 of this title.". (2) Subsection (f) of such section is amended— (A) by striking out "The Administrator, within the limits of Veterans' Administration facilities, may" and inserting in lieu thereof "(1) Except as provided in paragraph (4) of this subsection, the Administrator may"; (B) by redesignating clause (1) as clause (A), redesignating subclauses (A) and (B) of such clause as subclauses (i) and (ii), respectively, and inserting "and" at the end of such clause; (C) by striking out clause (2); (D) by redesignating clause (3) as clause (B); (E) by designating the second sentence as paragraph (2) and in such sentence striking out "The Administrator may also furnish to any such veteran" and inserting in lieu thereof "As part of medical services furnished to a veteran under paragraph (1) of this subsection, the Administrator may furnish to the veteran"; (F) by striking out the third sentence; and (G) by adding at the end the following: "(3) In addition to furnishing medical services under this subsection through Veterans' Administration facilities, the Administrator may furnish such services in accordance with section 603 of this title. "(4)(A) The Administrator may not furnish medical services under this subsection (including home health services under paragraph (2) of this subsection) to a veteran who is eligible for hospital care under this chapter by reason of section 610(a)(2)(B) of this title unless the veteran agrees to pay to the United States the amount determined under subparagraph (B) of this paragraph. "(B) A veteran who is furnished medical services under this subsection and who is required under subparagraph (A) of this

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Page:United States Statutes at Large Volume 100 Part 1.djvu/412

 100 STAT. 376

Medicare.

38 USC 610.

PUBLIC LAW 99-272—APR. 7, 1986

paragraph to agree to pay an amount to the United States in order to be furnished such services shall be liable to the United States, in the case of each visit in which such services are furnished to the veteran, for an amount equal to 20 percent of the estimated average cost (during the calendar year in which the services are furnished) of an outpatient visit in a Veterans' Administration facility. Such estimated average cost shall be determined by the Administrator. "(C) A veteran may not be required to make a payment under this paragraph for services furnished under this subsection during any 90-day period to the extent that such payment would cause the total amount paid by the veteran under this paragraph for medical services furnished during that period and under section 610(f) of this title for hospital and nursing home care furnished during that period to exceed the amount of the inpatient Medicare deductible in effect on the first day of such 90-day period. "(D) This subsection does not apply with respect to home health services under this subsection to the extent that such services are for improvements and structural alterations. "(E) For the purposes of this paragraph, the term 'inpatient Medicare deductible' means the amount of the inpatient hospital deductible in effect under section 1813(b) of the Social Security Act (42 U.S.C. 1395e(b)). "(F) Amounts collected or received by the Veterans' Administration under this paragraph shall be deposited in the Treasury as miscellaneous receipts.". (3) Subsection (g) of such section is amended to read as follows: "(g)(1) The Administrator may furnish medical services which the Administrator determines are needed to a veteran— "(A) who is a veteran of the Mexican border period or of World War I; or "(B) who is in receipt of increased pension or additional compensation or allowances based on the need of regular aid and attendance or by reason of being permanently housebound (or who, but for the receipt of retired pay, would be in receipt of such pension, compensation, or allowance). "(2) As part of medical services furnished to a veteran under paragraph (1) of this subsection, the Administrator may furnish to the veteran home health services under the terms and conditions set forth in subsection (f) of this section. "(3) In addition to furnishing medical services under this subsection through Veterans' Administration facilities, the Administrator may furnish such services in accordance with section 603 of this title.". (4) Subsection (i) of such section is amended by adding at the end the following: "(6) To any veteran who is in receipt of pension under section 521 of this title.", (c)

38 USC 622.

INCOME THRESHOLDS FOR CERTAIN

NON-SERVICE-CONNECTED

CARE.—(1) Section 622 is amended to read as follows: "§ 622. Determination of inability to defray necessary expenses; income thresholds "(a)(1) For the purpose^^f section 6i0(a)(l)(l) of this title, a veteran shall be considered to be unable to defray the expenses of necessary care if—

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