Health Care and Education Reconciliation Act Title 2

H.R. 4872 – TITLE II

SEC. 2001. SHORT TITLE; REFERENCES.

(a) Short Title- This subtitle may be cited as the SAFRA Act.

(b) References- Except as otherwise expressly provided, whenever in this subtitle an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

PART I–INVESTING IN STUDENTS AND FAMILIES

SEC. 2101. FEDERAL PELL GRANTS.

(a) Amount of Grants- Section 401(b) (20 U.S.C. 1070a(b)) is amended–

(1) by amending paragraph (2)(A) to read as follows:

(A) The amount of the Federal Pell Grant for a student eligible under this part shall be–

(i) the maximum Federal Pell Grant, as specified in the last enacted appropriation Act applicable to that award year, plus

(ii) the amount of the increase calculated under paragraph (8)(B) for that year, less

(iii) an amount equal to the amount determined to be the expected family contribution with respect to that student for that year.; and

(2) in paragraph (8)–

(A) in subparagraph (A)–

(i) in the matter preceding clause (i), by striking , to carry out subparagraph (B) of this paragraph; and

(ii) by striking clauses (iii) through (x) and inserting the following:

(iii) to carry out subparagraph (B) of this paragraph, such sums as may be necessary for fiscal year 2010 and each subsequent fiscal year to provide the amount of increase of the maximum Federal Pell Grant required by clauses (ii) and (iii) of subparagraph (B); and

(iv) to carry out this section, $13,500,000,000 for fiscal year 2011.;

(B) in subparagraph (B)–

(i) in the matter preceding clause (i), by striking subparagraph (A) and inserting clauses (i) through (iii) of subparagraph (A);

(ii) in clause (ii), by striking and 2011-2012 and inserting , 2011-2012, and 2012-2013; and

(iii) by striking clause (iii) and inserting the following:

(iii) the amount determined under subparagraph (C) for each succeeding award year.; and

(i) AWARD YEAR 2013-2014- For award year 2013-2014, the amount determined under this subparagraph for purposes of subparagraph (B)(iii) shall be equal to–

(I) $5,550 or the total maximum Federal Pell Grant for the preceding award year (as determined under clause (v)(II)), whichever is greater, increased by a percentage equal to the annual adjustment percentage for award year 2013-2014, reduced by

(II) $4,860 or the maximum Federal Pell Grant for which a student was eligible for the preceding award year, as specified in the last enacted appropriation Act applicable to that year, whichever is greater; and

(III) rounded to the nearest $5.

(ii) AWARD YEARS 2014-2015 THROUGH 2017-2018- For each of the award years 2014-2015 through 2017-2018, the amount determined under this subparagraph for purposes of subparagraph (B)(iii) shall be equal to–

(I) the total maximum Federal Pell Grant for the preceding award year (as determined under clause (v)(II)), increased by a percentage equal to the annual adjustment percentage for the award year for which the amount under this subparagraph is being determined, reduced by

(III) rounded to the nearest $5.

(iii) SUBSEQUENT AWARD YEARS- For award year 2018-2019 and each subsequent award year, the amount determined under this subparagraph for purposes of subparagraph (B)(iii) shall be equal to the amount determined under clause (ii) for award year 2017-2018.

(iv) DEFINITIONS- For purposes of this subparagraph–

(I) the term annual adjustment percentage as applied to an award year, is equal to the estimated percentage change in the Consumer Price Index (as determined by the Secretary, using the definition in section 478(f)) for the most recent calendar year ending prior to the beginning of that award year; and

(II) the term total maximum Federal Pell Grant as applied to a preceding award year, is equal to the sum of–

(aa) the maximum Federal Pell Grant for which a student is eligible during an award year, as specified in the last enacted appropriation Act applicable to that preceding award year; and

(bb) the amount of the increase in the maximum Federal Pell Grant required by this paragraph for that preceding award year.

(b) Conforming Amendments- Title IV (20 U.S.C. 1070 et seq.) is further amended–

(1) in section 401(b) (20 U.S.C. 1070a(b))–

(A) in paragraph (4)–

(i) by striking maximum basic grant level specified in the appropriate appropriation Act and inserting maximum amount of a Federal Pell Grant award determined under paragraph (2)(A); and

(ii) by striking such level each place it appears and inserting such Federal Pell Grant amount in each such place; and

(B) in paragraph (6), by striking the grant level specified in the appropriate Appropriation Act for this subpart for such year and inserting the maximum amount of a Federal Pell Grant award determined under paragraph (2)(A), for which a student is eligible during such award year;

(2) in section 402D(d)(1) (20 U.S.C. 1070a-14(d)(1)), by striking exceed the maximum and all that follows through Grant, for and inserting exceed the Federal Pell Grant amount, determined under section 401(b)(2)(A), for which a student is eligible, or be less than the minimum Federal Pell Grant amount described in section 401(b)(4), for;

(3) in section 435(a)(5)(A)(i)(I) (20 U.S.C. 1085(a)(5)(A)(i)(I)), by striking one-half the maximum Federal Pell Grant award for which a student would be eligible and inserting one-half the Federal Pell Grant amount, determined under section 401(b)(2)(A), for which a student would be eligible;

(4) in section 483(e)(3)(A)(ii) (20 U.S.C. 1090(e)(3)(A)(ii)), by striking based on the maximum Federal Pell Grant award at the time of application and inserting based on the Federal Pell Grant amount, determined under section 401(b)(2)(A), for which a student is eligible at the time of application;

(5) in section 485E(b)(1)(A) (20 U.S.C. 1092f(b)(1)(A)), by striking of such students potential eligibility for a maximum Federal Pell Grant under subpart 1 of part A and inserting of such students potential eligibility for the Federal Pell Grant amount, determined under section 401(b)(2)(A), for which the student would be eligible; and

(6) in section 894(f)(2)(C)(ii)(I) (20 U.S.C. 1161y(f)(2)(C)(ii)(I)), by striking the maximum Federal Pell Grant for each award year and inserting the Federal Pell Grant amount, determined under section 401(b)(2)(A), for which a student may be eligible for each award year.

SEC. 2102. COLLEGE ACCESS CHALLENGE GRANT PROGRAM.

Section 781 (20 U.S.C. 1141) is amended–

(1) in the first sentence of subsection (a), by striking $66,000,000 and all that follows through the period and inserting $150,000,000 for each of the fiscal years 2010 through 2014. The authority to award grants under this section shall expire at the end of fiscal year 2014.; and

(2) in subsection (c)(2), by striking 0.5 percent and inserting 1.0 percent.

SEC. 2103. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES AND MINORITY-SERVING INSTITUTIONS.

Section 371(b)(1)(A) (20 U.S.C. 1067q(b)(1)(A)) is amended by striking and 2009. and all that follows and inserting through 2019. The authority to award grants under this section shall expire at the end of fiscal year 2019.

PART II–STUDENT LOAN REFORM

SEC. 2201. TERMINATION OF FEDERAL FAMILY EDUCATION LOAN APPROPRIATIONS.

Section 421 (20 U.S.C. 1071) is amended–

(1) in subsection (b), in the first sentence of the matter following paragraph (6), by inserting , except that no sums may be expended after June 30, 2010, with respect to loans under this part for which the first disbursement is after such date after expended; and

(2) by adding at the end the following new subsection:

(d) Termination of Authority to Make or Insure New Loans- Notwithstanding paragraphs (1) through (6) of subsection (b) or any other provision of law–

(1) no new loans (including consolidation loans) may be made or insured under this part after June 30, 2010; and

(2) no funds are authorized to be appropriated, or may be expended, under this Act or any other Act to make or insure loans under this part (including consolidation loans) for which the first disbursement is after June 30, 2010,

except as expressly authorized by an Act of Congress enacted after the date of enactment of the SAFRA Act.

SEC. 2202. TERMINATION OF FEDERAL LOAN INSURANCE PROGRAM.

Section 424(a) (20 U.S.C. 1074(a)) is amended by striking September 30, 1976, and all that follows and inserting September 30, 1976, for each of the succeeding fiscal years ending prior to October 1, 2009, and for the period from October 1, 2009, to June 30, 2010, for loans first disbursed on or before June 30, 2010.

SEC. 2203. TERMINATION OF APPLICABLE INTEREST RATES.

Section 427A(l) (20 U.S.C. 1077a(l)) is amended–

(1) in the subsection heading, by inserting and Before July 1, 2010 after 2006;

(2) in paragraph (1), by inserting and before July 1, 2010, after July 1, 2006,;

(3) in paragraph (2), by inserting and before July 1, 2010, after July 1, 2006,;

(4) in paragraph (3), by inserting and that was disbursed before July 1, 2010, after July 1, 2006,; and

(5) in paragraph (4)–

(A) in the matter preceding subparagraph (A), by striking July 1, 2012 and inserting July 1, 2010; and

(B) by repealing subparagraphs (D) and (E).

SEC. 2204. TERMINATION OF FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.

(a) Higher Education Act of 1965- Section 428 (20 U.S.C. 1078) is amended–

(1) in subsection (a)–

(A) in paragraph (1), in the matter preceding subparagraph (A), by inserting for which the first disbursement is made before July 1, 2010, and after eligible institution; and

(B) in paragraph (5), by striking September 30, 2014, and all that follows through the period and inserting June 30, 2010.;

(2) in subsection (b)(1)–

(A) in subparagraph (G)(ii), by inserting and before July 1, 2010, after July 1, 2006,; and

(B) in subparagraph (H)(ii), by inserting and that are first disbursed before July 1, 2010, after July 1, 2006,;

(3) in subsection (f)(1)(A)(ii)–

(A) by striking during fiscal years beginning; and

(B) by inserting and first disbursed before July 1, 2010, after October 1, 2003,; and

(4) in subsection (j)(1), by inserting , before July 1, 2010, after section 435(d)(1)(D) of this Act shall.

(b) College Cost Reduction and Access Act- Section 303 of the College Cost Reduction and Access Act (Public Law 110-84) is repealed.

SEC. 2205. TERMINATION OF FFEL PLUS LOANS.

Section 428B(a)(1) (20 U.S.C. 1078-2(a)(1)) is amended by striking A graduate and inserting Prior to July 1, 2010, a graduate.

SEC. 2206. FEDERAL CONSOLIDATION LOANS.

(a) In General- Section 428C (20 U.S.C. 1078-3) is amended–

(1) in subsection (a)(4)(A), by inserting , and first disbursed before July 1, 2010 after under this part;

(2) in subsection (b)–

(A) in paragraph (1)(E), by inserting before the semicolon , and before July 1, 2010; and

(B) in paragraph (5), by striking In the event that and inserting If, before July 1, 2010,;

(3) in subsection (c)(1)–

(A) in subparagraph (A)(ii), by inserting and that is disbursed before July 1, 2010, after 2006,; and

(B) in subparagraph (C), by inserting and disbursed before July 1, 2010, after 1994,; and

(4) in subsection (e), by striking September 30, 2014. and inserting June 30, 2010. No loan may be made under this section for which the disbursement is on or after July 1, 2010.

(b) Temporary Loan Consolidation Authority- Part D of title IV (20 U.S.C. 1087a et seq.) is amended by inserting after section 459A (20 U.S.C. 1087i) the following:

SEC. 459B. TEMPORARY LOAN CONSOLIDATION AUTHORITY.

(a) Temporary Loan Consolidation Authority-

(1) IN GENERAL- A borrower who has 1 or more loans in 2 or more of the categories described in paragraph (2), and who has not yet entered repayment on 1 or more of those loans in any of the categories, may consolidate all of the loans of the borrower that are described in paragraph (2) into a Federal Direct Consolidation Loan during the period described in paragraph (3).

(2) CATEGORIES OF LOANS THAT MAY BE CONSOLIDATED- The categories of loans that may be consolidated under paragraph (1) are–

(A) loans made under this part;

(B) loans purchased by the Secretary pursuant to section 459A; and

(3) TIME PERIOD IN WHICH LOANS MAY BE CONSOLIDATED- The Secretary may make a Federal Direct Consolidation Loan under this section to a borrower whose application for such Federal Direct Consolidation Loan is received on or after July 1, 2010, and before July 1, 2011.

(b) Terms of Loans- A Federal Direct Consolidation Loan made under this section shall have the same terms and conditions as a Federal Direct Consolidation Loan made under section 455(g), except that–

(1) in determining the applicable rate of interest on the Federal Direct Consolidation Loan made under this section (other than on a Federal Direct Consolidation Loan described in paragraph (2)), section 427A(l)(3) shall be applied without rounding the weighted average of the interest rate on the loans consolidated to the nearest higher one-eighth of 1 percent as described in subparagraph (A) of section 427A(l)(3); and

(2) if a Federal Direct Consolidation Loan made under this section that repays a loan which is subject to an interest rate determined under section 427A(g)(2), (j)(2), or (k)(2), then the interest rate for such Federal Direct Consolidation Loan shall be calculated–

(A) by using the applicable rate of interest described in section 427A(g)(2), (j)(2), or (k)(2), respectively; and

(B) in accordance with section 427A(l)(3).

SEC. 2207. TERMINATION OF UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE-INCOME BORROWERS.

Section 428H (20 U.S.C. 1078-8) is amended–

(1) in subsection (a), by inserting that are first disbursed before July 1, 2010, after under this part;

(2) in subsection (b)–

(A) by striking Any student and inserting Prior to July 1, 2010, any student; and

(B) by inserting for which the first disbursement is made before such date after unsubsidized Federal Stafford Loan; and

(3) in subsection (h), by inserting and that are first disbursed before July 1, 2010, after July 1, 2006,.

SEC. 2208. TERMINATION OF SPECIAL ALLOWANCES.

Section 438 (20 U.S.C. 1087-1) is amended–

(1) in subsection (b)(2)(I)–

(A) in the subclause heading, by inserting , AND BEFORE JULY 1, 2010 after 2000;

(B) in clause (i), by inserting and before July 1, 2010, after 2000,;

(D) in clause (iii), by inserting and before July 1, 2010, after 2000,;

(E) in clause (iv), by inserting and that is disbursed before July 1, 2010, after 2000,;

(F) in clause (v)(I), by inserting and before July 1, 2010, after 2006,; and

(G) in clause (vi)–

(i) in the clause heading, by inserting , AND BEFORE JULY 1, 2010 after 2007; and

(ii) in the matter preceding subclause (I), by inserting and before July 1, 2010, after 2007,;

(2) in subsection (c)–

(A) in paragraph (2)(B)–

(i) in clause (iii), by inserting and after the semicolon;

(ii) in clause (iv), by striking ; and and inserting a period; and

(iii) by striking clause (v); and

(B) in paragraph (6), by inserting and first disbursed before July 1, 2010, after 1992,; and

(3) in subsection (d)(2)(B), by inserting , and before July 1, 2010 after 2007.

Sec. 2209. ORIGINATION OF DIRECT LOANS AT INSTITUTIONS OUTSIDE THE UNITED STATES.

(a) Loans for Students Attending Institutions Outside the United States- Section 452 (20 U.S.C. 1087b) is amended by adding at the end the following:

(d) Institutions Outside the United States- Loan funds for students (and parents of students) attending institutions outside the United States shall be disbursed through a financial institution located or operating in the United States and designated by the Secretary to serve as the agent of such institutions with respect to the receipt of the disbursements of such loan funds and the transfer of such funds to such institutions. To be eligible to receive funds under this part, an institution outside the United States shall make arrangements with the agent designated by the Secretary under this subsection to receive funds under this part.

(b) Conforming Amendments-

(1) AMENDMENTS- Section 102 (20 U.S.C. 1002), as amended by section 102 of the Higher Education Opportunity Act (Public Law 110-315) and section 101 of Public Law 111-39, is amended–

(A) by striking part B each place the term appears and inserting part D;

(B) in subsection (a)(1)(C), by inserting , consistent with the requirements of section 452(d) before the period at the end; and

(i) in the second sentence of the matter preceding clause (i), by striking made, insured, or guaranteed and inserting made; and

(ii) in clause (iii)–

(I) in subclause (III), by striking only Federal Stafford and all that follows through section 428B and inserting only Federal Direct Stafford Loans under section 455(a)(2)(A), Federal Direct Unsubsidized Stafford Loans under section 455(a)(2)(D), or Federal Direct PLUS Loans under section 455(a)(2)(B); and

(II) in subclause (V), by striking a Federal Stafford and all that follows through section 428B and inserting a Federal Direct Stafford Loan under section 455(a)(2)(A), a Federal Direct Unsubsidized Stafford Loan under section 455(a)(2)(D), or a Federal Direct PLUS Loan under section 455(a)(2)(B).

(2) EFFECTIVE DATE- The amendments made by subparagraph (C) of paragraph (1) shall be effective on July 1, 2010, as if enacted as part of section 102(a)(1) of the Higher Education Opportunity Act (Public Law 110-315) and subject to section 102(e) of such Act as amended by section 101(a)(2) of Public Law 111-39 (20 U.S.C. 1002 note).

SEC. 2210. CONFORMING AMENDMENTS.

(a) Amendments- Section 454 (20 U.S.C. 1087d) is amended–

(1) in subsection (a)–

(A) by striking paragraph (4); and

(B) by redesignating paragraphs (5) through (7) as paragraphs (4) through (6), respectively; and

(2) in subsection (b)(2), by striking (5), (6), and (7) and inserting (5), and (6).

(b) Effective Date- The amendments made by subsection (a) shall take effect on July 1, 2010.

SEC. 2211. TERMS AND CONDITIONS OF LOANS.

(a) In General- Section 455 (20 U.S.C. 1087e) is amended–

(1) in subsection (a)(1), by inserting , and first disbursed on June 30, 2010, before under sections 428; and

(2) in subsection (g)–

(A) by inserting , including any loan made under part B and first disbursed before July 1, 2010 after section 428C(a)(4); and

(B) by striking the third sentence.

(b) Effective Date- The amendment made by subsection (a)(1) shall apply with respect to loans first disbursed under part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) on or after July 1, 2010.

SEC. 2212. CONTRACTS; MANDATORY FUNDS.

(a) Contracts- Section 456 (20 U.S.C. 1087f) is amended–

(1) in subsection (a)–

(A) by inserting after paragraph (3) the following new paragraph:

(4) SERVICING BY ELIGIBLE NOT-FOR-PROFIT SERVICERS-

(A) SERVICING CONTRACTS-

(i) IN GENERAL- The Secretary shall contract with each eligible not-for-profit servicer to service loans originated under this part, if the servicer–

(I) meets the standards for servicing Federal assets that apply to contracts awarded pursuant to paragraph (1); and

(II) has the capacity to service the applicable loan volume allocation described in subparagraph (B).

(ii) COMPETITIVE MARKET RATE DETERMINATION FOR FIRST 100,000 BORROWER ACCOUNTS- The Secretary shall establish a separate pricing tier for each of the first 100,000 borrower loan accounts at a competitive market rate.

(iii) INELIGIBILITY- An eligible not-for-profit servicer shall no longer be eligible for a contract under this paragraph after July 1, 2014, if–

(I) the servicer has not been awarded such a contract before that date; or

(II) the servicers contract was terminated, and the servicer had not reapplied for, and been awarded, a contract under this paragraph.

(B) ALLOCATIONS-

(i) IN GENERAL- The Secretary shall (except as provided in clause (ii)) allocate to an eligible not-for-profit servicer, subject to the contract of such servicer described in subparagraph (A), the servicing rights for the loan accounts of 100,000 borrowers (including borrowers who borrowed loans in a prior year that were serviced by the servicer).

(ii) SERVICER ALLOCATION- The Secretary may reallocate, increase, reduce, or terminate an eligible not-for-profit servicers allocation of servicing rights under clause (i) based on the performance of such servicer, on the same terms as loan allocations provided by contracts awarded pursuant to paragraph (1).; and

(2) by adding at the end the following:

(1) IN GENERAL- The term eligible not-for-profit servicer means an entity–

(A) that is not owned or controlled in whole or in part by–

(i) a for-profit entity; or

(ii) a nonprofit entity having its principal place of business in another State; and

(B) that–

(i) as of July 1, 2009–

(I) meets the definition of an eligible not-for-profit holder under section 435(p), except that such term does not include eligible lenders described in paragraph (1)(D) of such section; and

(II) was performing, or had entered into a contract with a third party servicer (as such term is defined in section 481(c)) who was performing, student loan servicing functions for loans made under part B of this title;

(ii) notwithstanding clause (i), as of July 1, 2009–

(I) is the sole beneficial owner of a loan for which the special allowance rate is calculated under section 438(b)(2)(I)(vi)(II) because the loan is held by an eligible lender trustee that is an eligible not-for-profit holder as defined under section 435(p)(1)(D); and

(iii) is an affiliated entity of an eligible not-for-profit servicer described in clause (i) or (ii) that–

(I) directly employs, or will directly employ (on or before the date the entity begins servicing loans under a contract awarded by the Secretary pursuant to subsection (a)(3)(A)), the majority of individuals who perform borrower-specific student loan servicing functions; and

(II) as of July 1, 2009, was performing, or had entered into a contract with a third party servicer (as such term is defined in section 481(c)) who was performing, student loan servicing functions for loans made under part B of this title.

(2) AFFILIATED ENTITY- For the purposes of paragraph (1), the term affiliated entity–

(A) means an entity contracted to perform services for an eligible not-for-profit servicer that–

(i) is a nonprofit entity or is wholly owned by a nonprofit entity; and

(ii) is not owned or controlled, in whole or in part, by–

(I) a for-profit entity; or

(II) an entity having its principal place of business in another State; and

(B) may include an affiliated entity that is established by an eligible not-for-profit servicer after the date of enactment of the SAFRA Act, if such affiliated entity is otherwise described in paragraph (1)(B)(iii)(I) and subparagraph (A) of this paragraph.

(b) Mandatory Funds-

(1) AMENDMENTS- Section 458(a) (20 U.S.C. 1087h(a)) is amended–

(A) by redesignating paragraph (5) as paragraph (8);

(B) by redesignating paragraphs (2) through (4) as paragraphs (3) through (5), respectively;

(2) MANDATORY FUNDS FOR ELIGIBLE NOT-FOR-PROFIT SERVICERS- For fiscal years 2010 through 2019, there shall be available to the Secretary, in addition to any other amounts appropriated to carry out this paragraph and out of any money in the Treasury not otherwise appropriated, funds to be obligated for administrative costs of servicing contracts with eligible not-for-profit servicers as described in section 456.; and

(D) by inserting after paragraph (5), as redesignated by subparagraph (B) of this paragraph, the following:

(6) TECHNICAL ASSISTANCE TO INSTITUTIONS OF HIGHER EDUCATION-

(A) PROVISION OF ASSISTANCE- The Secretary shall provide institutions of higher education participating, or seeking to participate, in the loan programs under this part with technical assistance in establishing and administering such programs.

(B) FUNDS- There are authorized to be appropriated, and there are appropriated, to carry out this paragraph (in addition to any other amounts appropriated to carry out this paragraph and out of any money in the Treasury not otherwise appropriated), $50,000,000 for fiscal year 2010.

(C) DEFINITION- In this paragraph, the term assistance means the provision of technical support, training, materials, technical assistance, and financial assistance.

(7) ADDITIONAL PAYMENTS-

(A) PROVISION OF ASSISTANCE- The Secretary shall provide payments to loan servicers for retaining jobs at locations in the United States where such servicers were operating under part B on January 1, 2010.

(2) CONFORMING AMENDMENT- Section 458 (20 U.S.C. 1087h) is further amended by striking subsection (a)(3) in subsection (b) and inserting subsection (a)(4).

SEC. 2213. INCOME-BASED REPAYMENT.

Section 493C (20 U.S.C. 1098e) is amended by adding at the end the following new subsection:

(e) Special Terms for New Borrowers on and After July 1, 2014- With respect to any loan made to a new borrower on or after July 1, 2014–

(1) subsection (a)(3)(B) shall be applied by substituting 10 percent for 15 percent; and

(2) subsection (b)(7)(B) shall be applied by substituting 20 years for 25 years.

Subtitle B–Health

SEC. 2301. INSURANCE REFORMS.

(a) Extending Certain Insurance Reforms to Grandfathered Plans- Section 1251(a) of the Patient Protection and Affordable Care Act, as added by section 10103(d) of such Act, is amended by adding at the end the following:

(4) APPLICATION OF CERTAIN PROVISIONS-

(A) IN GENERAL- The following provisions of the Public Health Service Act (as added by this title) shall apply to grandfathered health plans for plan years beginning with the first plan year to which such provisions would otherwise apply:

(i) Section 2708 (relating to excessive waiting periods).

(ii) Those provisions of section 2711 relating to lifetime limits.

(iii) Section 2712 (relating to rescissions).

(iv) Section 2714 (relating to extension of dependent coverage).

(B) PROVISIONS APPLICABLE ONLY TO GROUP HEALTH PLANS-

(i) PROVISIONS DESCRIBED- Those provisions of section 2711 relating to annual limits and the provisions of section 2704 (relating to pre-existing condition exclusions) of the Public Health Service Act (as added by this subtitle) shall apply to grandfathered health plans that are group health plans for plan years beginning with the first plan year to which such provisions otherwise apply.

(ii) ADULT CHILD COVERAGE- For plan years beginning before January 1, 2014, the provisions of section 2714 of the Public Health Service Act (as added by this subtitle) shall apply in the case of an adult child with respect to a grandfathered health plan that is a group health plan only if such adult child is not eligible to enroll in an eligible employer-sponsored health plan (as defined in section 5000A(f)(2) of the Internal Revenue Code of 1986) other than such grandfathered health plan.

(b) Clarification Regarding Dependent Coverage- Section 2714(a) of the Public Health Service Act, as added by section 1001(5) of the Patient Protection and Affordable Care Act, is amended by striking (who is not married).

SEC. 2302. DRUGS PURCHASED BY COVERED ENTITIES.

Section 340B of the Public Health Service Act (42 U.S.C. 256b), as amended by sections 7101 and 7102 of the Patient Protection and Affordable Care Act, is amended–

(1) in subsection (a)–

(A) in paragraphs (1), (2), (5), (7), and (9), by striking the terms covered drug and covered drugs each place either term appears and inserting covered outpatient drug or covered outpatient drugs, respectively;

(B) in paragraph (4)(L)–

(i) in clause (i), by striking and at the end;

(ii) in clause (ii), by striking the period and inserting ; and; and

(iii) by inserting after clause (ii), the following:

(iii) does not obtain covered outpatient drugs through a group purchasing organization or other group purchasing arrangement.; and

(i) by striking subparagraph (C);

(ii) by redesignating subparagraphs (D) and (E) as subparagraphs (C) and (D), respectively; and

(iii) in subparagraph (D), as so redesignated, by striking subparagraph (D) and inserting subparagraph (C);

(2) by striking subsection (c);

(3) in subsection (d)–

(A) by striking covered drugs each place it appears and inserting covered outpatient drugs;

(B) by striking (a)(5)(D) each place it appears and inserting (a)(5)(C); and

(4) by inserting after subsection (d) the following:

(e) Exclusion of Orphan Drugs for Certain Covered Entities- For covered entities described in subparagraph (M), (N), or (O) of subsection (a)(4), the term covered outpatient drug shall not include a drug designated by the Secretary under section 526 of the Federal Food, Drug, and Cosmetic Act for a rare disease or condition.

SEC. 2303. COMMUNITY HEALTH CENTERS.

Section 10503(b)(1) of the Patient Protection and Affordable Care Act is amended–

(1) in subparagraph (A), by striking 700,000,000 and inserting 1,000,000,000;

(2) in subparagraph (B), by striking 800,000,000 and inserting 1,200,000,000;

(3) in subparagraph (C), by striking 1,000,000,000 and inserting 1,500,000,000;

(4) in subparagraph (D), by striking 1,600,000,000 and inserting 2,200,000,000; and

(5) in subparagraph (E), by striking 2,900,000,000 and inserting 3,600,000,000.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.