DISTRIBUTION OF FUNDS.

SEC. 203. DISTRIBUTION OF FUNDS.(a) Distribution Based on Living Cases of HIV/AIDS.—(1) State distribution factor.—Section 2618(a)(2) of the Public Health Service Act (42 U.S.C. 300ff–28(a)(2)) is amended—(A) in subparagraph (B), by striking “estimated number of living cases of acquired immune deficiency syndrome in the eligible area involved” and inserting “number of living cases of HIV/AIDS in the State involved”; and(B) by amending subparagraph (D) to read as follows:“(D) Living cases of hiv/aids.—“(i) Requirement of names-based reporting.—Except as provided in clause (ii), the number determined under this subparagraph for a State for a fiscal year for purposes of subparagraph (B) is the number of living names-based cases of HIV/AIDS in the State that, as of December 31 of the most recent calendar year for which such data is available, have been reported to and confirmed by the Director of the Centers for Disease Control and Prevention.“(ii) Transition period; exemption regarding non-aids cases.—For each of the fiscal years 2007 through 2009, a State is, subject to clauses (iii) through (v), exempt from the requirement under clause (i) that living non-AIDS names-based cases of HIV be reported unless—“(I) a system was in operation as of December 31, 2005, that provides sufficiently accurate and reliable names-based reporting of such cases throughout the State, subject to clause (vii); or“(II) no later than the beginning of fiscal year 2008 or 2009, the Secretary, after consultation with the chief executive of the State, determines that a system has become operational in the State that provides sufficiently accurate and reliable names-based reporting of such cases throughout the State.“(iii) Requirements for exemption for fiscal year 2007.—For fiscal year 2007, an exemption under clause (ii) for a State applies only if, by October 1, 2006—“(I)(aa) the State had submitted to the Secretary a plan for making the transition to sufficiently accurate and reliable names-based reporting of living non-AIDS cases of HIV; or“(bb) all statutory changes necessary to provide for sufficiently accurate and reliable reporting of such cases had been made; and“(II) the State had agreed that, by April 1, 2008, the State will begin accurate and reliable names-based reporting of such cases, except that such agreement is not required to provide that, as of such date, the system for such reporting 120 STAT. 2790 be fully sufficient with respect to accuracy and reliability throughout the area.“(iv) Requirement for exemption as of fiscal year 2008.—For each of the fiscal years 2008 through 2010, an exemption under clause (ii) for a State applies only if, as of April 1, 2008, the State is substantially in compliance with the agreement under clause (iii)(II).“(v) Progress toward names-based reporting.—For fiscal year 2009, the Secretary may terminate an exemption under clause (ii) for a State if the State submitted a plan under clause (iii)(I)(aa) and the Secretary determines that the State is not substantially following the plan.“(vi) Counting of cases in areas with exemptions.—“(I) In general.—With respect to a State that is under a reporting system for living non-AIDS cases of HIV that is not names-based (referred to in this subparagraph as ‘code-based reporting’), the Secretary shall, for purposes of this subparagraph, modify the number of such cases reported for the State in order to adjust for duplicative reporting in and among systems that use code-based reporting.“(II) Adjustment rate.—The adjustment rate under subclause (I) for a State shall be a reduction of 5 percent in the number of living non-AIDS cases of HIV reported for the State.“(vii) List of states meeting standard regarding december 31, 2005.—“(I) In general.—If a State is specified in subclause (II), the State shall be considered to meet the standard described in clause (ii)(I). No other State may be considered to meet such standard.“(II) Relevant states.—For purposes of subclause (I), the States specified in this subclause are the following: Alaska, Alabama, Arkansas, Arizona, Colorado, Florida, Indiana, Iowa, Idaho, Kansas, Louisiana, Michigan, Minnesota, Missouri, Mississippi, North Carolina, North Dakota, Nebraska, New Jersey, New Mexico, New York, Nevada, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, West Virginia, Wyoming, Guam, and the Virgin Islands.“(viii) Rules of construction regarding acceptance of reports.—“(I) Cases of aids.—With respect to a State that is subject to the requirement under clause (i) and is not in compliance with the requirement for names-based reporting of living non-AIDS cases of HIV, the Secretary shall, notwithstanding such noncompliance, accept reports of living cases of AIDS that are in accordance with such clause.“(II) Applicability of exemption requirements.—The provisions of clauses (ii) through (vii) 120 STAT. 2791 may not be construed as having any legal effect for fiscal year 2010 or any subsequent fiscal year, and accordingly, the status of a State for purposes of such clauses may not be considered after fiscal year 2009.“(ix) Program for detecting inaccurate or fraudulent counting.—The Secretary shall carry out a program to monitor the reporting of names-based cases for purposes of this subparagraph and to detect instances of inaccurate reporting, including fraudulent reporting.”.(2) Non-ema distribution factor.—Section 2618(a)(2)(C) of the Public Health Service Act (42 U.S.C. 300ff–28(a)(2)(C)) is amended—(A) in clause (i), by striking “estimated number of living cases of acquired immune deficiency syndrome” each place such term appears and inserting “number of living cases of HIV/AIDS”; and(B) in clause (ii), by amending such clause to read as follows:“(ii) a number equal to the sum of—“(I) the total number of living cases of HIV/AIDS that are within areas in such State that are eligible areas under subpart I of part A for the fiscal year involved, which individual number for an area is the number that applies under section 2601 for the area for such fiscal year; and“(II) the total number of such cases that are within areas in such State that are transitional areas under section 2609 for such fiscal year, which individual number for an area is the number that applies under such section for the fiscal year.”.(b) Formula Amendments Generally.—Section 2618(a)(2) of the Public Health Service Act (42 U.S.C. 300ff–28(a)(2)) is amended—(1) in subparagraph (A)—(A) by striking “The amount referred to” in the matter preceding clause (i) and all that follows through the end of clause (i) and inserting the following: “For purposes of paragraph (1), the amount referred to in this paragraph for a State (including a territory) for a fiscal year is, subject to subparagraphs (E) and (F)—“(i) an amount equal to the amount made available under section 2623 for the fiscal year involved for grants pursuant to paragraph (1), subject to subparagraph (G); and”; and(B) in clause (ii)—(i) in subclause (I)—(I) by striking “.80” and inserting “0.75”; and(II) by striking “and” at the end;(ii) in subclause (II)—(I) by inserting “non-EMA” after “respective”; and(II) by striking the period and inserting “; and”; and(iii) by adding at the end the following:120 STAT. 2792 “(III) if the State does not for such fiscal year contain any area that is an eligible area under subpart I of part A or any area that is a transitional area under section 2609 (referred to in this subclause as a ‘no-EMA State’), the product of 0.05 and the ratio of the number of cases that applies for the State under subparagraph (D) to the sum of the respective numbers of cases that so apply for all no-EMA States.”;(2) by striking subparagraphs (E) through (H);(3) by inserting after subparagraph (D) the following subparagraphs:“(E) Code-based states; limitation on increase in grant.—“(i) In general.—For each of the fiscal years 2007 through 2009, if code-based reporting (within the meaning of subparagraph (D)(vi)) applies in a State as of the beginning of the fiscal year involved, then notwithstanding any other provision of this paragraph, the amount of the grant pursuant to paragraph (1) for the State may not for the fiscal year involved exceed by more than 5 percent the amount of the grant pursuant to this paragraph for the State for the preceding fiscal year, except that the limitation under this clause may not result in a grant pursuant to paragraph (1) for a fiscal year that is less than the minimum amount that applies to the State under such paragraph for such fiscal year.“(ii) Use of amounts involved.—For each of the fiscal years 2007 through 2009, amounts available as a result of the limitation under clause (i) shall be made available by the Secretary as additional amounts for grants pursuant to section 2620, subject to subparagraph (H).”; and(4) by redesignating subparagraph (I) as subparagraph (F).(c) Separate ADAP Grants.—Section 2618(a)(2)(G) of the Public Health Service Act (42 U.S.C. 300ff–28(a)(2)(G)), as redesignated by subsection (b)(4) of this section, is amended—(1) in clause (i)—(A) in the matter preceding subclause (I), by striking “section 2677” and inserting “section 2623”;(B) in subclause (II), by striking the period at the end and inserting a semicolon; and(C) by adding after and below subclause (II) the following:“which product shall then, as applicable, be increased under subparagraph (H).”;(2) in clause (ii)—(A) by striking subclauses (I) through (III) and inserting the following:“(I) In general.—From amounts made available under subclause (V), the Secretary shall award supplemental grants to States described in subclause (II) to enable such States to purchase and distribute to eligible individuals under section 2616(b) pharmaceutical therapeutics described under subsections (c)(2) and (e) of such section.120 STAT. 2793“(II) Eligible states.—For purposes of subclause (I), a State shall be an eligible State if the State did not have unobligated funds subject to reallocation under section 2618(d) in the previous fiscal year and, in accordance with criteria established by the Secretary, demonstrates a severe need for a grant under this clause. For purposes of determining severe need, the Secretary shall consider eligibility standards, formulary composition, the number of eligible individuals to whom a State is unable to provide therapeutics described in section 2616(a), and an unanticipated increase of eligible individuals with HIV/AIDS.“(III) State requirements.—The Secretary may not make a grant to a State under this clause unless the State agrees that the State will make available (directly or through donations of public or private entities) non-Federal contributions toward the activities to be carried out under the grant in an amount equal to $1 for each $4 of Federal funds provided in the grant, except that the Secretary may waive this subclause if the State has otherwise fully complied with section 2617(d) with respect to the grant year involved. The provisions of this subclause shall apply to States that are not required to comply with such section 2617(d).”.(B) in subclause (IV), by moving the subclause two ems to the left;(C) in subclause (V), by striking “3 percent” and inserting “5 percent”; and(D) by striking subclause (VI); and(3) by adding at the end the following clause:“(iii)Code-based states; limitation on increase in formula grant.—The limitation under subparagraph (E)(i) applies to grants pursuant to clause (i) of this subparagraph to the same extent and in the same manner as such limitation applies to grants pursuant to paragraph (1), except that the reference to minimum grants does not apply for purposes of this clause. Amounts available as a result of the limitation under the preceding sentence shall be made available by the Secretary as additional amounts for grants under clause (ii) of this subparagraph.”.(d) Hold Harmless.—Section 2618(a)(2) of the Public Health Service Act (42 U.S.C. 300ff–28(a)(2)), as amended by subsection (b)(4) of this section, is amended by adding at the end the following subparagraph:“(H) Increase in formula grants.—“(i) Assurance of amount.—“(I) General rule.—For fiscal year 2007, the Secretary shall ensure, subject to clauses (ii) through (iv), that the total for a State of the grant pursuant to paragraph (1) and the grant pursuant to subparagraph (G) is not less than 95 percent of such total for the State for fiscal year 2006.120 STAT. 2794“(II) Rule of construction.—With respect to the application of subclause (I), the 95 percent requirement under such subclause shall apply with respect to each grant awarded under paragraph (1) and with respect to each grant awarded under subparagraph (G).“(ii) Fiscal year 2007.—For purposes of clause (i) as applied for fiscal year 2007, the references in such clause to subparagraph (G) are deemed to be references to subparagraph (I) as such subparagraph was in effect for fiscal year 2006.“(iii) Fiscal years 2008 and 2009.—For each of the fiscal years 2008 and 2009, the Secretary shall ensure that the total for a State of the grant pursuant to paragraph (1) and the grant pursuant to subparagraph (G) is not less than 100 percent of such total for the State for fiscal year 2007.“(iv) Source of funds for increase.—“(I) In general.—From the amount reserved under section 2623(b)(2) for a fiscal year, and from amounts available for such section pursuant to subsection (d) of this section, the Secretary shall make available such amounts as may be necessary to comply with clause (i).“(II) Pro rata reduction.—If the amounts referred to in subclause (I) for a fiscal year are insufficient to fully comply with clause (i) for the year, the Secretary, in order to provide the additional funds necessary for such compliance, shall reduce on a pro rata basis the amount of each grant pursuant to paragraph (1) for the fiscal year, other than grants for States for which increases under clause (i) apply and other than States described in paragraph (1)(A)(i)(I). A reduction under the preceding sentence may not be made in an amount that would result in the State involved becoming eligible for such an increase.“(v) Applicability.—This paragraph may not be construed as having any applicability after fiscal year 2009.”.(e) Administrative Expenses; Clinical Quality Management.—Section 2618(b) of the Public Health Service Act (42 U.S.C. 300ff–28(b)) is amended—(1) by redesignating paragraphs (2) through (7) as paragraphs (1) through (6);(2) in paragraph (2) (as so redesignated)—(A) by striking “paragraph (5)” and inserting “paragraph (4)”; and(B) by striking “paragraph (6)” and inserting “paragraph (5)”;(3) in paragraph (3) (as so redesignated)—(A) by amending subparagraph (A) to read as follows:“(A) In general.—Subject to paragraph (4), and except as provided in paragraph (5), a State may not use more than 10 percent of amounts received under a grant awarded under section 2611 for administration.”;120 STAT. 2795(B) by redesignating subparagraphs (B) and (C) as subparagraphs (C) and (D), respectively;(C) by inserting after subparagraph (A) the following:“(B) Allocations.—In the case of entities and subcontractors to which a State allocates amounts received by the State under a grant under section 2611, the State shall ensure that, of the aggregate amount so allocated, the total of the expenditures by such entities for administrative expenses does not exceed 10 percent (without regard to whether particular entities expend more than 10 percent for such expenses).”;(D) in subparagraph (C) (as so redesignated), by inserting before the period the following: “, including a clinical quality management program under subparagraph (E)”; and(E) by adding at the end the following:“(E) Clinical quality management.—“(i) Requirement.—Each State that receives a grant under section 2611 shall provide for the establishment of a clinical quality management program to assess the extent to which HIV health services provided to patients under the grant are consistent with the most recent Public Health Service guidelines for the treatment of HIV/AIDS and related opportunistic infection, and as applicable, to develop strategies for ensuring that such services are consistent with the guidelines for improvement in the access to and quality of HIV health services.“(ii) Use of funds.—“(I) In general.—From amounts received under a grant awarded under section 2611 for a fiscal year, a State may use for activities associated with the clinical quality management program required in clause (i) not to exceed the lesser of—“(aa) 5 percent of amounts received under the grant; or“(bb) $3,000,000.“(II) Relation to limitation on administrative expenses.—The costs of a clinical quality management program under clause (i) may not be considered administrative expenses for purposes of the limitation established in subparagraph (A).”;(4) in paragraph (4) (as so redesignated)—(A) by striking “paragraph (6)” and inserting “paragraph (5)”; and(B) by striking “paragraphs (3) and (4)” and inserting “paragraphs (2) and (3)”; and(5) in paragraph (5) (as so redesignated), by striking “paragraphs (3)” and all that follows through “(5),” and inserting the following: “paragraphs (2) and (3), may, notwithstanding paragraphs (2) through (4),”.(f) Reallocation for Supplemental Grants.—Section 2618(d) of the Public Health Service Act (42 U.S.C. 300ff–28(d)) is amended to read as follows:“(d) Reallocation.—Any portion of a grant made to a State under section 2611 for a fiscal year that has not been obligated 120 STAT. 2796 as described in subsection (c) ceases to be available to the State and shall be made available by the Secretary for grants under section 2620, in addition to amounts made available for such grants under section 2623(b)(2).”.(g) Definitions; Other Technical Amendments.—Section 2618(a) of the Public Health Service Act (42 U.S.C. 300ff–28(a)) is amended—(1) in paragraph (1), in the matter preceding subparagraph (A), by striking “section 2677” and inserting “section 2623”;(2) in paragraph (1)(A)—(A) in the matter preceding clause (i), by striking “each of the several States and the District of Columbia” and inserting “each of the 50 States, the District of Columbia, Guam, and the Virgin Islands (referred to in this paragraph as a ‘covered State’)”; and(B) in clause (i)—(i) in subclause (I), by striking “State or District” and inserting “covered State”; and(ii) in subclause (II)—(I) by striking “State or District” and inserting “covered State”; and(II) by inserting “and” after the semicolon; and(3) in paragraph (1)(B), by striking “each territory of the United States, as defined in paragraph (3),” and inserting “each territory other than Guam and the Virgin Islands”;(4) in paragraph (2)(C)(i), by striking “or territory”; and(5) by striking paragraph (3).