Moving Americans into the 21st Century
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TEA-21 - Transportation Equity Act for the
21st Century Moving Americans into the 21st Century |
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TITLE VIII--TRANSPORTATION DISCRETIONARY SPENDING GUARANTEE AND BUDGET
OFFSETS
Subtitle A--Transportation Discretionary Spending Guarantee
SEC. 8101. DISCRETIONARY SPENDING CATEGORIES.
(a) Establishment of Separate Categories.--Section 251(c) of the
Balanced Budget and Emergency Deficit Control Act of 1985 is
amended <<NOTE: 2 USC 901.>> as follows:
(1) FY1999.--In paragraph (3), strike ``and'' at the end of
subparagraph (B) and after subparagraph (C) add the following
new subparagraphs:
``(D) for the highway category: $21,885,000,000 in
outlays; and
``(E) for the mass transit category: $4,401,000,000
in outlays;''.
(2) FY2000.--In paragraph (4), strike ``and'' at the end of
subparagraph (A) and at the end add the following new
subparagraphs:
``(C) for the highway category: $24,436,000,000 in
outlays; and
``(D) for the mass transit category: $4,761,000,000
in outlays;''.
(3) FY2001.--In paragraph (5), strike the comma and insert
``--'' after ``2001'', insert ``(A)'' before ``for'' and indent
the new subparagraph and move it 2 ems to the right, strike
``and'' at the end of such subparagraph, and at the end add the
following new subparagraphs:
``(B) for the highway category: $26,204,000,000 in
outlays; and
``(C) for the mass transit category: $5,190,000,000
in outlays;''.
(4) FY2002.--In paragraph (6), strike the comma and insert
``--'' after ``2002'', insert ``(A)'' before ``for'', indent the
new subparagraph and move it 2 ems to the right, and add at the
end the following new subparagraphs:
``(B) for the highway category: $26,977,000,000 in
outlays; and
``(C) for the mass transit category: $5,709,000,000
in outlays; and''.
(5) FY2003.--After paragraph (6), add the following new
paragraph:
``(7) with respect to fiscal year 2003--
``(A) for the highway category: $27,728,000,000 in
outlays; and
``(B) for the mass transit category: $6,256,000,000
in outlays.''.
(b) <<NOTE: 2 USC 901 note.>> Offsetting Adjustment in
Discretionary Spending Limits.--
(1) Adjustment of nondefense category for fy1999.--The
discretionary spending limit set forth in section 251(c)(3)(B)
of the Balanced Budget and Emergency Deficit Control Act of
1985, as adjusted in conformance with section 251(b) of that
Act, is reduced by $859,000,000 in new budget authority and
$25,173,000,000 in outlays.
(2) Adjustment of discretionary category for fy2000.--The
discretionary spending limit set forth in section 251(c)(4)(A)
of the Balanced Budget and Emergency Deficit Control Act of
1985, as adjusted in conformance with section 251(b) of that
Act, is reduced by $859,000,000 in new budget authority and
$26,045,000,000 in outlays.
(3) Adjustment of discretionary spending limit for fy2001.--
The discretionary spending limit set forth in section
251(c)(5)(A) of the Balanced Budget and Emergency Deficit
Control Act of 1985, as adjusted in conformance with section
251(b) of that Act, is reduced by $859,000,000 in new budget
authority and $26,329,000,000 in outlays.
(4) Adjustment of discretionary spending limit for fy2002.--
The discretionary spending limit set forth in section
251(c)(6)(A) of the Balanced Budget and Emergency Deficit
Control Act of 1985, as adjusted in conformance with section
251(b) of that Act, is reduced by $859,000,000 in new budget
authority and $26,675,000,000 in outlays.
(c) Definitions of Highway Category and Mass Transit Category.--
Section 250(c)(4) of the Balanced Budget and Emergency Deficit Control
Act of 1985 is amended <<NOTE: 2 USC 900.>> by inserting ``(A)'' after
``(4)'' and by adding at the end the following new subparagraphs:
``(B) The term `highway category' refers to the following
budget accounts or portions thereof that are subject to the
obligation limitations on contract authority set forth in the
Transportation Equity Act for the 21st Century:
``(i) 69-8083-0-7-401 (Federal-Aid Highways).
``(ii) 69-8020-0-7-401 (Highway Traffic Safety
Grants).
``(iii) 69-8048-0-7-401 (National Motor Carrier
Safety Program).
``(iv) 69-8016-0-7-401 (Operations and Research
NHTSA).
``(C) The term `mass transit category' refers to the
following budget accounts or portions thereof that are subject
to the obligation limitations on contract authority provided in
the Transportation Equity Act for the 21st Century and for which
appropriations are provided pursuant to authorizations contained
in that Act (except that appropriations provided pursuant to
section 5338(h) of title 49, United States Code, as amended by
this section, shall not be included in this category):
``(i) 69-8191-0-7-401 (Mass Transit Capital Fund).
``(ii) 69-8350-0-7-401 (Trust Fund Share of
Expenses).
``(iii) 69-1129-0-1-401 (Formula Grants).
``(iv) 69-1120-0-1-401 (Administrative Expenses).
``(v) 69-1136-0-1-401 (University Transportation
Centers).
``(vi) 69-1137-0-1-401 (Transit Planning and
Research).
``(D) Special rule.--(i) Any outlays in excess of the
discretionary spending limit set forth in section 251(c) for the
highway or mass transit category, as adjusted, for the budget
year shall be considered nondefense category outlays or
discretionary category outlays.
``(ii) If the obligation limitations for accounts in the
highway or mass transit category provided in an appropriation
Act for a fiscal year exceed the obligation limitations set
forth in section 8103 of the Transportation Equity Act for the
21st Century for that year, as adjusted, the estimated outlays
flowing for each outyear from such excess obligations calculated
pursuant to clause (iii) shall be attributed to the
discretionary category in that outyear.
``(iii) For purposes of clause (ii), outlays from excess
obligations shall be determined using the average of the
spendout rates for that category in the baseline.''.
(d) Adjustment to Highway and Mass Transit Categories.--Section
251(b)(1) of the Balanced Budget and Emergency Deficit Control Act of
1985 is amended <<NOTE: 2 USC 901.>> by--
(1) striking ``When'' and inserting:
``(A) Concepts and definitions.--When''; and
(2) adding at the end the following:
``(B) Adjustment to align highway spending with
revenues.--(i) When the President submits the budget
under section 1105 of title 31, United States Code, OMB
shall calculate and the budget shall include adjustments
to the highway category for the budget year and each
outyear as provided in clause (ii)(I)(cc).
``(ii)(I)(aa) OMB shall take the actual level of
highway receipts for the year before the current year
and subtract the sum of the estimated level of highway
receipts in subclause (II) plus any amount previously
calculated under item (bb) for that year.
``(bb) OMB shall take the current estimate of
highway receipts for the budget year and subtract the
estimated level of receipts for that year.
``(cc) OMB shall take the sum of the amounts
calculated under items (aa) and (bb), add that sum to
the amount of obligations set forth in section 8103 of
the Transportation Equity Act for the 21st Century for
the highway category for the budget year, and calculate
the outlay change resulting from that change in
obligations relative to that amount for the budget year
and each outyear using current estimates. After making
the calculation under the preceding sentence, OMB shall
adjust the amount of obligations set forth in that
section for the budget year by adding the sum of the
amounts calculated under items (aa) and (bb).
``(II) The estimated level of highway receipts for
the purposes of this clause are--
``(aa) for fiscal year 1998, $22,164,000,000;
``(bb) for fiscal year 1999, $32,619,000,000;
``(cc) for fiscal year 2000, $28,066,000,000;
``(dd) for fiscal year 2001, $28,506,000,000;
``(ee) for fiscal year 2002, $28,972,000,000;
and
``(ff) for fiscal year 2003, $29,471,000,000.
``(III) In this clause, the term `highway receipts'
means the governmental receipts credited to the highway
account of the Highway Trust Fund.
``(C)(i) In addition to the adjustment required by
subparagraph (B), when the President submits the budget under
section 1105 of title 31, United States Code, for fiscal years
2000, 2001, 2002, or 2003, OMB shall calculate and the budget
shall include for the budget year and each outyear an adjustment
to the limits on outlays for the highway category and the mass
transit category equal to--
``(I) the outlays for the applicable category
calculated assuming obligation levels consistent with
the estimates prepared pursuant to subparagraph (D), as
adjusted, using current technical assumptions; minus
``(II) the outlays for the applicable category set
forth in the subparagraph (D) estimates, as adjusted.
``(ii) The adjustment made pursuant to clause (i) in the
fiscal years 2002 and 2003 budget submissions of the President
under section 1105(a) of title 31, United States Code, shall not
exceed 4 percent plus cumulative carryovers. In this clause, the
term `cumulative carryovers' means the total of each amount by
which outlays for the highway and mass transit category for any
fiscal year are less than the outlay limit for that category, as
adjusted, for that year less any amount of carryover used in the
previous year.
``(D)(i) When OMB and CBO submit their final sequester
report for fiscal year 1999, that report shall include an
estimate of the outlays for each of the categories that would
result in fiscal years 2000 through 2003 from obligations at the
levels specified in section 8103 of the Transportation Equity
Act for the 21st Century using current assumptions.
``(ii) When the President submits the budget under section
1105 of title 31, United States Code, for fiscal years 2000,
2001, 2002, or 2003, OMB shall adjust the estimates made in
clause (i) by the adjustments by subparagraphs (B) and (C).
``(E) OMB shall consult with the Committees on the Budget
and include a report on adjustments under subparagraphs (B) and
(C) in the preview report.''.
(e) Enforcement of Guarantee.--Rule XXI of the Rules of the House of
Representatives is amended by adding at the end the following new
clause:
``9. It shall not be in order to consider any bill or joint
resolution, or any amendment thereto or conference report thereon, that
would cause obligation limitations to be below the level for any fiscal
year set forth in section 8103 of the Transportation Equity Act for the
21st Century, as adjusted, for the highway category or the mass transit
category, as applicable.''.
SEC. <<NOTE: 2 USC 902 note.>> 8102. CONFORMING THE PAYGO SCORECARD
WITH THIS ACT.
Upon the enactment of this Act, the Director of the Office of
Management and Budget shall not make any estimates under section 252(d)
of the Balanced Budget and Emergency Deficit Control Act of 1985 of
changes in direct spending outlays and receipts for any fiscal year
resulting from this title.
SEC. <<NOTE: 2 USC 901 note.>> 8103. LEVEL OF OBLIGATION LIMITATIONS.
(a) Highway Category.--For the purposes of section 251(b) of the
Balanced Budget and Emergency Deficit Control Act of 1985, the level of
obligation limitations for the highway category is--
(1) for fiscal year 1999, $25,883,000,000;
(2) for fiscal year 2000, $26,629,000,000;
(3) for fiscal year 2001, $27,158,000,000;
(4) for fiscal year 2002, $27,767,000,000; and
(5) for fiscal year 2003, $28,233,000,000.
(b) Mass Transit Category.--For the purposes of section 251(b) of
the Balanced Budget and Emergency Deficit Control Act of 1985, the level
of obligation limitations for the mass transit category is--
(1) for fiscal year 1999, $5,365,000,000;
(2) for fiscal year 2000, $5,797,000,000;
(3) for fiscal year 2001, $6,271,000,000;
(4) for fiscal year 2002, $6,747,000,000; and
(5) for fiscal year 2003, $7,226,000,000.
For purposes of this subsection, the term ``obligation limitations''
means the sum of budget authority and obligation limitations.
<<NOTE: Veterans Benefits Act of 1998.>> Subtitle B--Veterans' Benefits
SEC. <<NOTE: 38 USC 101 note.>> 8201. SHORT TITLE.
This subtitle may be cited as the ``Veterans Benefits Act of 1998''.
SEC. 8202. PROHIBITION ON ESTABLISHMENT OF SERVICE-CONNECTION FOR
DISABILITIES RELATING TO USE OF TOBACCO PRODUCTS.
(a) Wartime Disability Compensation.--Section 1110 of title 38,
United States Code, is amended by striking ``or abuse of alcohol or
drugs'' and inserting ``, abuse of alcohol or drugs, or use of tobacco
products''.
(b) Peacetime Disability Compensation.--Section 1131 of such title
is amended by striking ``or abuse of alcohol or drugs''
and inserting ``, abuse of alcohol or drugs, or use of tobacco
products''.
(c) Applicability.--(1) Except as provided in paragraph (2), the
amendments made by this section shall apply to any claims for
compensation received by the Secretary of Veterans Affairs before, on,
or after the date of enactment of this Act.
(2) The amendments made by this section shall not apply in the case
of any such claims adjudicated by the Secretary before such date of
enactment for which a service-connection was established for a
disability on the basis of the use of tobacco products.
SEC. 8203. TWENTY PERCENT INCREASE IN RATES OF BASIC EDUCATIONAL
ASSISTANCE UNDER MONTGOMERY GI BILL.
(a) Active Duty Educational Assistance.--
(1) Increase in rates.--Section 3015 of title 38, United
States Code, is amended--
(A) in subsection (a)(1), by striking ``$400'' and
inserting ``$528 (as increased from time to time under
subsection (g))''; and
(B) in subsection (b)(1), by striking ``$325'' and
inserting ``$429 (as increased from time to time under
subsection (g))''.
(2) CPI adjustment.--Subsection (g) of such section is
amended by striking ``beginning on or after October 1, 1994''
and all that follows through ``such rates'' and inserting ``,
the Secretary shall provide a percentage increase (rounded to
the nearest dollar) in the rates payable under subsections
(a)(1) and (b)(1)''.
(3) Technical amendments.--Such section is further amended--
(A) in subsection (a), by striking ``subsections
(b), (c), (d), (e), (f), and (g) of'' in the matter
preceding paragraph (1); and
(B) in subsection (b)--
(i) by striking ``Except as provided in
subsections (c), (d), (e), (f), and (g), in'' and
inserting ``In''; and
(ii) by inserting ``(except as provided in the
succeeding subsections of this section)'' after
``under this chapter shall''.
(4) <<NOTE: 38 USC 3015 note.>> Effective date.--The
amendments made by this subsection shall take effect on October
1, 1998, and shall apply with respect to educational assistance
allowances paid for months after September 1998. However, no
adjustment in rates of educational assistance shall be made
under subsection (g) of section 3015 of title 38, United States
Code, as amended by paragraph (2), for fiscal year 1999.
(b) Selected Reserve Educational Assistance.--
(1) Increase in rates.--Paragraph (1) of section 16131(b) of
title 10, United States Code, is amended--
(A) in subparagraph (A), by striking ``$190'' and
inserting ``$251 (as increased from time to time under
paragraph (2))'';
(B) in subparagraph (B), by striking ``$143'' and
inserting ``$188 (as increased from time to time under
paragraph (2))''; and
(C) in subparagraph (C), by striking ``$95'' and
inserting ``$125 (as increased from time to time under
paragraph (2))''.
(2) CPI adjustment.--Paragraph (2) of such section is
amended by striking ``beginning on or after October 1, 1994''
and all that follows through ``such rates'' and inserting ``,
the Secretary shall provide a percentage increase (rounded to
the nearest dollar) in the rates payable under subparagraphs
(A), (B), and (C) of paragraph (1)''.
(3) Technical amendment.--Paragraph (1) of such section is
further amended by striking ``in paragraph (2) and''.
(4) <<NOTE: 10 USC 16131 note.>> Effective date.--The
amendments made by this subsection shall take effect on October
1, 1998, and shall apply with respect to educational assistance
allowances paid for months after September 1998. However, no
adjustment in rates of educational assistance shall be made
under paragraph (2) of section 16131(b) of title 10, United
States Code, as amended by paragraph (2), for fiscal year 1999.
SEC. 8204. INCREASE IN ASSISTANCE AMOUNT FOR SPECIALLY ADAPTED HOUSING.
(a) In General.--Section 2102 of title 38, United States Code, is
amended--
(1) in the matter preceding paragraph (1) of subsection (a),
by striking ``$38,000'' and inserting ``$43,000''; and
(2) in subsection (b)(2), by striking ``$6,500'' and
inserting ``$8,250''.
(b) <<NOTE: 38 USC 2102 note.>> Effective Date.--The amendments
made by subsection (a) shall apply with respect to limitations under
section 2102 of such title on assistance furnished to a veteran under
section 2101 of such title on or after October 1, 1998.
SEC. 8205. INCREASE IN AMOUNT OF ASSISTANCE FOR AUTOMOBILE AND ADAPTIVE
EQUIPMENT FOR CERTAIN DISABLED VETERANS.
(a) In General.--Section 3902(a) of title 38, United States Code, is
amended by striking out ``$5,500'' and inserting in lieu thereof
``$8,000''.
(b) <<NOTE: 38 USC 3902 note.>> Effective Date.--The amendment made
by subsection (a) shall apply with respect to assistance furnished under
section 3902 of such title on or after October 1, 1998.
SEC. <<NOTE: 38 USC 1521 note.>> 8206. INCREASE IN AID AND ATTENDANCE
RATES FOR VETERANS ELIGIBLE FOR PENSION.
Effective October 1, 1998, the maximum annual rates of pension in
effect as of September 30, 1998, under the following provisions of
chapter 15 of title 38, United States Code, are increased by $600:
(1) Subsections (d)(1), (d)(2), (f)(2), and (f)(4) of
section 1521.
(2) Section 1536(d)(2).
SEC. 8207. ELIGIBILITY OF CERTAIN REMARRIED SURVIVING SPOUSES FOR
REINSTATEMENT OF DEPENDENCY AND INDEMNITY COMPENSATION UPON
TERMINATION OF THAT REMARRIAGE.
(a) Restoration of Prior Eligibility.--Section 1311 of title 38,
United States Code, is amended by adding at the end the following new
subsection:
``(e)(1) The remarriage of the surviving spouse of a veteran shall
not bar the furnishing of dependency and indemnity compensation to such
person as the surviving spouse of the veteran if the remarriage is
terminated by death, divorce, or annulment unless the Secretary
determines that the divorce or annulment was secured through fraud or
collusion.
``(2) If the surviving spouse of a veteran ceases living with
another person and holding himself or herself out openly to the public
as that person's spouse, the bar to granting that person dependency and
indemnity compensation as the surviving spouse of the veteran shall not
apply.
``(3) The first month of eligibility for payment of dependency and
indemnity compensation to a surviving spouse by reason of this
subsection shall be the later of the month after--
``(A) the month of the termination of such remarriage, in
the case of a surviving spouse described in paragraph (1); or
``(B) the month of the cessation described in paragraph (2),
in the case of a surviving spouse described in that
paragraph.''.
(b) <<NOTE: 38 USC 1311 note.>> Effective Date.--No payment may be
made by reason of section 1311(e) of title 38, United States Code, as
added by subsection (a), for any month before October 1998.
SEC. <<NOTE: 10 USC 1174 note.>> 8208. EXTENSION OF PRIOR REVISION
TO OFFSET RULE FOR DEPARTMENT OF DEFENSE SPECIAL SEPARATION
BENEFIT PROGRAM.
The amendment made by section 653 of the National Defense
Authorization Act for Fiscal Year 1997 (Public Law 104-201; 110 Stat.
2583) to subsection (h)(2) of section 1174 of title 10, United States
Code, shall apply to any payment of separation pay under the special
separation benefits program under section 1174a of that title that was
made during the period beginning on December 5, 1991, and ending on
September 30, 1996.
SEC. 8209. SENSE OF THE CONGRESS CONCERNING RECOVERY FROM TOBACCO
COMPANIES OF COSTS OF TREATMENT OF VETERANS FOR TOBACCO-
RELATED ILLNESSES.
It is the sense of the Congress--
(1) that the Attorney General or the Secretary of Veterans
Affairs, as appropriate, should take all steps necessary to
recover from tobacco companies amounts corresponding to the
costs which would be incurred by the Department of Veterans
Affairs for treatment of tobacco-related illnesses of veterans,
if such treatment were authorized by law; and
(2) that the Congress should authorize by law the treatment
of tobacco-related illnesses of veterans upon the recovery of
such amounts.
Subtitle C--Temporary Student Loan Provision.
SEC. 8301. TEMPORARY STUDENT LOAN PROVISION.
(a) FFEL Interest Rates.--
(1) Amendment.--Section 427A of the Higher Education Act of
1965 (20 U.S.C. 1077a) is amended--
(A) by redesignating subsections (j) and (k) as
subsections (k) and (l), respectively; and
(B) by inserting after subsection (i) the following
new subsection:
``(j) Interest Rates for New Loans Between July 1, 1998 and October
1, 1998.--
``(1) In general.--Notwithstanding subsection (h), but
subject to paragraph (2), with respect to any loan made,
insured, or guaranteed under this part (other than a loan made
pursuant to section 428B or 428C) for which the first
disbursement is made on or after July 1, 1998, and before
October 1, 1998, the applicable rate of interest shall, during
any 12-month period beginning on July 1 and ending on June 30,
be determined on the preceding June 1 and be equal to--
``(A) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1; plus
``(B) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
``(2) In school and grace period rules.--Notwithstanding
subsection (h), with respect to any loan under this part (other
than a loan made pursuant to section 428B or 428C) for which the
first disbursement is made on or after July 1, 1998, and before
October 1, 1998, the applicable rate of interest for interest
which accrues--
``(A) prior to the beginning of the repayment period
of the loan; or
``(B) during the period in which principal need not
be paid (whether or not such principal is in fact paid)
by reason of a provision described in section
428(b)(1)(M) or 427(a)(2)(C),
shall be determined under paragraph (1) by substituting `1.7
percent' for `2.3 percent'.
``(3) PLUS loans.--Notwithstanding subsection (h), with
respect to any loan under section 428B for which the first
disbursement is made on or after July 1, 1998, and before
October 1, 1998, the applicable rate of interest shall, during
any 12-month period beginning on July 1 and ending on June 30,
be determined on the preceding June 1 and be equal to the lesser
of--
``(A)(i) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1; plus
``(ii) 3.1 percent; or
``(B) 9.0 percent.
``(4) <<NOTE: Federal Register, publication.>>
Consultation.--The Secretary shall determine the applicable rate
of interest under this subsection after consultation with the
Secretary of the Treasury and shall publish such
rate in the Federal Register as soon as practicable after the
date of determination.''.
(2) Conforming amendment.--Section 428B(d)(4) (20 U.S.C.
1078-2(d)(4)) is amended by striking ``section 427A(c)'' and
inserting ``section 427A for loans made under this section''.
(b) Special Allowances.--
(1) Amendment.--Section 438(b)(2) of the Higher Education
Act of 1965 (20 U.S.C. 1087-1(b)(2)) is amended by adding at the
end the following new subparagraph:
``(G) Loans disbursed between july 1, 1998, and october 1,
1998.--
``(i) In general.--Subject to paragraph (4) and
clauses (ii), (iii), and (iv) of this subparagraph, and
except as provided in subparagraph (B), the special
allowance paid pursuant to this subsection on loans for
which the first disbursement is made on or after July 1,
1998, and before October 1, 1998, shall be computed--
``(I) by determining the average of the bond
equivalent rates of 91-day Treasury bills
auctioned for such 3-month period;
``(II) by subtracting the applicable interest
rates on such loans from such average bond
equivalent rate;
``(III) by adding 2.8 percent to the resultant
percent; and
``(IV) by dividing the resultant percent by 4.
``(ii) In school and grace period.--In the case of
any loan for which the first disbursement is made on or
after July 1, 1998, and before October 1, 1998, and for
which the applicable rate of interest is described in
section 427A(j)(2), clause (i)(III) of this subparagraph
shall be applied by substituting `2.2 percent' for `2.8
percent'.
``(iii) PLUS loans.--In the case of any loan for
which the first disbursement is made on or after July 1,
1998, and before October 1, 1998, and for which the
applicable rate of interest is described in section
427A(j)(3), clause (i)(III) of this subparagraph shall
be applied by substituting `3.1 percent' for `2.8
percent', subject to clause (v) of this subparagraph.
``(iv) Consolidation loans.--This subparagraph shall
not apply in the case of any consolidation loan.
``(v) Limitation on special allowances for PLUS
loans.--In the case of PLUS loans made under section
428B and disbursed on or after July 1, 1998, and before
October 1, 1998, for which the interest rate is
determined under 427A(j)(3), a special allowance shall
not be paid for such loan for such unless the rate
determined under subparagraph (A) of such section
(without regard to subparagraph (B) of such section)
exceeds 9.0 percent.''.
(2) Conforming amendments.--Section 438(b)(2) of such Act is
further amended--
(A) in subparagraph (A), by striking ``(E), and
(F)'' and inserting ``(E), (F), and (G)'';
(B) in subparagraph (B)(iv), by striking ``(E), or
(F)'' and inserting ``(E), (F), or (G)''; and
(C) in subparagraph (C)(ii), by striking ``In the
case'' and inserting ``Subject to subparagraph (G), in
the case''.
(c) Direct Loan Interest Rates.--Section 455(b) (20 U.S.C. 1087e(b))
is amended--
(1) by redesignating paragraph (5) as paragraph (6); and
(2) by inserting after paragraph (4) the following new
paragraph:
``(5) Temporary interest rate provision.--
``(A) Rates for fdsl and fdusl.--Notwithstanding the
preceding paragraphs of this subsection, for Federal
Direct Stafford Loans and Federal Direct Unsubsidized
Stafford Loans for which the first disbursement is made
on or after July 1, 1998, and before October 1, 1998,
the applicable rate of interest shall, during any 12-
month period beginning on July 1 and ending on June 30,
be determined on the preceding June 1 and be equal to--
``(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction held
prior to such June 1; plus
``(ii) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
``(B) In school and grace period rules.--
Notwithstanding the preceding paragraphs of this
subsection, with respect to any Federal Direct Stafford
Loan or Federal Direct Unsubsidized Stafford Loan for
which the first disbursement is made on or after July 1,
1998, and before October 1, 1998, the applicable rate of
interest for interest which accrues--
``(i) prior to the beginning of the repayment
period of the loan; or
``(ii) during the period in which principal
need not be paid (whether or not such principal is
in fact paid) by reason of a provision described
in section 428(b)(1)(M) or 427(a)(2)(C),
shall be determined under subparagraph (A) by
substituting `1.7 percent' for `2.3 percent'.
``(C) PLUS loans.--Notwithstanding the preceding
paragraphs of this subsection, with respect to Federal
Direct PLUS Loan for which the first disbursement is
made on or after July 1, 1998, and before October 1,
1998, the applicable rate of interest shall be
determined under subparagraph (A)--
``(i) by substituting `3.1 percent' for `2.3
percent'; and
``(ii) by substituting `9.0 percent' for `8.25
percent'.''.
Subtitle D--Block Grants for Social Services
SEC. 8401. BLOCK GRANTS FOR SOCIAL SERVICES.
(a) Reduction of Grants.--Section 2003(c) of the Social Security Act
(42 U.S.C. 1397b(c)) is amended by striking paragraphs (7) and (8) and
inserting the following:
``(7) $2,380,000,000 for the fiscal year 1997;
``(8) $2,380,000,000 for the fiscal year 1998;
``(9) $2,380,000,000 for the fiscal year 1999;
``(10) $2,380,000,000 for the fiscal year 2000; and
``(11) $1,700,000,000 for the fiscal year 2001 and each
fiscal year thereafter.''.
(b) Limitation on Amount of TANF Funds Transferable.--Section
404(d)(2) of the Social Security Act (42 U.S.C. 604(d)(2)) is amended to
read as follows:
``(2) Limitation on amount transferable to title xx
programs.--
``(A) In general.--A State may use not more than the
applicable percent of the amount of any grant made to
the State under section 403(a) for a fiscal year to
carry out State programs pursuant to title XX.
``(B) Applicable percent.--For purposes of
subparagraph (A), the applicable percent is 4.25 percent
in the case of fiscal year 2001 and each succeeding
fiscal year.''.
(c) <<NOTE: 42 USC 604 note.>> Effective Date.--The amendments made
by this section take effect on October 1, 1998.
