PUBLIC LAW 105-392—NOV. 13, 1998 112 STAT. 3579 after the first day of the third month that begins after the date of the enactment of this Act. (b) REPORT REQUIREMENT. — Section 709(b) of the Public Health Service Act (42 U.S.C. 292h(b)) is amended— (1) in paragraph (4)(B), by adding "and" after the semicolon; (2) in paragraph (5), by striking "; and" and inserting a period; and (3) by striking paragraph (6). (c) PROGRAM ELIGIBILITY. — (1) LIMITATIONS ON LOANS.— Section 703(a) of the Public Health Service Act (42 U.S.C. 292b(a)) is amended by striking "or clinical psychology" and inserting "or behavioral and mental health practice, including clinical psychology". (2) DEFINITION OF ELIGIBLE INSTITUTION.—Section 719(1) of the Public Health Service Act (42 U.S.C. 292o(l)) is amended by striking "or clinical psychology" and inserting "or behavioral and mental health practice, including clinical psychology". SEC. 142. HEAL LENDER AND HOLDER PERFORMANCE STANDARDS. (a) GENERAL AMENDMENTS.— Section 707(a) of the Public Health Service Act (42 U.S.C. 292f) is amended— (1) by striking the last sentence; (2) by striking "determined." and inserting "determined, except that, if the insurance beneficiary including any servicer of the loan is not designated for 'exceptional performance', as set forth in paragraph (2), the Secretary shall pay to the beneficiary a sum equal to 98 percent of the amount of the loss sustained by the insured upon that loan."; (3) by striking "Upon" and inserting: "(1) IN GENERAL.— Upon"; and (4) by adding at the end the following new paragraph: " (2) EXCEPTIONAL PERFORMANCE. — "(A) AUTHORITY. —Where the Secretary determines that an eligible lender, holder, or servicer has a compliance performance rating that equals or exceeds 97 percent, the Secretary shall designate that eligible lender, holder, or servicer, as the case may be, for exceptional performance. "(B) COMPLIANCE PERFORMANCE RATING.— For purposes of subparagraph (A), a compliance performance rating is determined with respect to compliance with due diligence in the disbursement, servicing, and collection of loans under this subpart for each year for which the determination is made. Such rating shall be equal to the percentage of all due diligence requirements applicable to each loan, on average, as established by the Secretary, with respect to loans serviced during the period by the eligible lender, holder, or servicer. "(C) ANNUAL AUDITS FOR LENDERS, HOLDERS, AND SERVICERS.— Each eligible lender, holder, or servicer desiring a designation under subparagraph (A) shall have an annual financial and compliance audit conducted with respect to the loan portfolio of such eligible lender, holder, or servicer, by a qualified independent organization from a list of qualified organizations identified by the Secretary and in accordance with standards established by the Secretary. The standards shall measure the lender's, holder's, or servicer's compliance with due diligence standards and
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