[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1883 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 1883

 To strengthen parental, local, and State control of education in the 
United States by eliminating the Department of Education and redefining 
                     the Federal role in education.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 16, 1995

 Mr. Scarborough (for himself, Mr. Boehner, Mr. Chabot, Mr. Brownback, 
 Mr. Armey, Mr. DeLay, Mr. Cox of California, Ms. Molinari, Mr. Paxon, 
 Mr. Barr, Mr. Bono, Mr. Christensen, Mr. Forbes, Mr. Funderburk, Mr. 
Graham, Mr. Hastings of Washington, Mr. Hostettler, Mr. Hutchinson, Mr. 
Istook, Mr. Sam Johnson of Texas, Mr. Jones, Mr. Metcalf, Mr. Miller of 
Florida, Mr. Nethercutt, Mr. Riggs, Mr. Salmon, Mr. Souder, Mr. Talent, 
  Mr. Bachus, Mr. Baker of California, Mr. Bartlett of Maryland, Mr. 
   Barton of Texas, Mr. Bass, Mr. Bryant of Tennessee, Mr. Burr, Mr. 
    Burton of Indiana, Mr. Camp, Mr. Callahan, Mr. Chambliss, Mrs. 
Chenoweth, Mr. Canady of Florida, Mr. Crapo, Mr. Chrysler, Mr. Coburn, 
  Mr. Condit, Mr. Cooley, Mr. Crane, Mrs. Cubin, Mr. Cunningham, Mr. 
Dreier, Mr. Doolittle, Mr. Dornan, Mr. Emerson, Mr. Ensign, Mr. Foley, 
  Mr. Ganske, Mr. Goss, Mr. Gutknecht, Mr. Hancock, Mr. Hastert, Mr. 
Hayworth, Mr. Hefley, Mr. Heineman, Mr. Herger, Mr. Hilleary, Mr. Hoke, 
  Mr. Hunter, Mr. Inglis of South Carolina, Mr. Kasich, Mr. King, Mr. 
LaHood, Mr. Largent, Mr. Latham, Mr. Lewis of Kentucky, Mr. Linder, Mr. 
Livingston, Mr. Manzullo, Mr. McCollum, Mr. McIntosh, Mr. McCrery, Mr. 
Mica, Mrs. Myrick, Mr. Neumann, Mr. Norwood, Mr. Parker, Mr. Pombo, Mr. 
 Radanovich, Mr. Regula, Mr. Rohrabacher, Mr. Sanford, Mrs. Seastrand, 
   Mr. Shadegg, Mrs. Smith of Washington, Mr. Smith of Michigan, Mr. 
    Solomon, Mr. Stockman, Mr. Stump, Mr. Tate, Mr. Taylor of North 
Carolina, Mr. Thornberry, Mr. Tiahrt, Mr. Watts of Oklahoma, Mr. Weldon 
 of Pennsylvania, Mr. Weldon of Florida, Mr. White, Mr. Whitfield, and 
 Mr. Wicker) introduced the following bill; which was referred to the 
Committee on Economic and Educational Opportunities, and in addition to 
the Committees on the Budget and Government Reform and Oversight, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
 To strengthen parental, local, and State control of education in the 
United States by eliminating the Department of Education and redefining 
                     the Federal role in education.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Back to Basics Education Reform 
Act''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Findings.
Sec. 4. Purposes.
             TITLE I--ABOLITION OF DEPARTMENT OF EDUCATION

Sec. 101. Abolition of Department.
Sec. 102. Establishment and sunset of Office of Economic Opportunities 
                            in the Department of Health and Human 
                            Services, and transfer of functions.
Sec. 103. Principal officers.
Sec. 104. Continuation of service of Department officer.
Sec. 105. Reorganization.
Sec. 106. Plan for winding up affairs.
Sec. 107. GAO report.
Sec. 108. Conforming amendments.
Sec. 109. Effective date.
Sec. 110. Limitation on expenditures.
                      TITLE II--EDUCATION PROGRAMS

             Subtitle A--Elementary and Secondary Education

       Chapter 1--Elementary And Secondary Education Block Grant

Sec. 201. Goals of elementary and secondary education block grant 
                            program.
Sec. 202. Program authorized.
Sec. 203. State eligibility.
Sec. 204. General State requirements.
Sec. 205. Amount of State allotment.
Sec. 206. Local fiscal accountability.
Sec. 207. Participation of children enrolled in private schools.
Sec. 208. Definitions.
Sec. 209. Authorization of appropriations.
      Chapter 2--Other Elementary and Secondary Education Programs

Sec. 210. Amendments and repeals of certain education provisions.
Subtitle B--Conforming Amendments to the Individuals with Disabilities 
                             Education Act

Sec. 211. Amendments to provisions referencing secretary of education 
                            and department of education.
Sec. 212. Amendments to definitions.
Sec. 213. Transfer of administering authority to Office of Economic 
                            Opportunities.
Sec. 214. Outreach services for certain institutions of higher 
                            education.
                 Subtitle C--Higher Education Programs

            Chapter 1--Elimination And Reduction of Programs

Sec. 221. Repeal of higher education laws.
Sec. 222. Amendment to the Federal Credit Reform Act.
Sec. 223. Sale of FDSL loan portfolios.
Sec. 224. Student loan program; statement of policy.
Sec. 225. Elimination of in-school interest subsidies.
                Chapter 2--Higher Education Block Grant

Sec. 231. Purpose.
Sec. 232. Distribution of funds.
Sec. 233. State assurances.
Sec. 234. Use of funds.
Sec. 235. Public disclosure.
Sec. 236. Authorization of appropriations.
Sec. 237. Definitions.
                  Subtitle D--Miscellaneous Provisions

Sec. 241. Construction.
Sec. 242. Regulations.
Sec. 243. Consolidated application.
Sec. 244. Appropriations.
Sec. 245. Federal civil rights.
                     TITLE III--GENERAL PROVISIONS

Sec. 301. References.
Sec. 302. Exercise of authorities.
Sec. 303. Savings provisions.
Sec. 304. Transfer of assets.
Sec. 305. Delegation and assignment.
Sec. 306. Authority of office of management and budget with respect to 
                            functions transferred.
Sec. 307. Proposed changes in law.
Sec. 308. Definition of transfer.
Sec. 309. Definitions.
                     TITLE IV--STATEMENTS OF POLICY

Sec. 401. Statement of policy regarding Federal education funding.
Sec. 402. Statement of policy regarding job training programs.
Sec. 403. Statement of policy regarding Indian education.
SEC. 3. FINDINGS.

    The Congress finds the following:
            (1) Principles of federalism embodied in the Constitution 
        of the United States entrust authority over issues of 
        educational policy to the States and the people and a Federal 
        Department of Education is inconsistent with such principles.
            (2) Tradition and experience dictate that the governance 
        and management of schools in the United States are best 
        performed by parents, teachers and communities.
            (3) The intrusion by the Department of Education into 
        education policy has not benefited the quality of education in 
        this nation.
            (4) The Department of Education has weakened the ability of 
        parents to make essential decisions about their children's 
        education and has undermined the capacity of communities to 
        govern their schools.
            (5) In the 15 years of its existence, the Department of 
        Education has grown from 130 programs and a budget of $14 
        billion to over 240 separately authorized programs which cost 
        almost $32 billion annually. Meanwhile, education performance 
        has stagnated or deteriorated.
            (6) Since 1980, the year the Federal role in education was 
        elevated to department status, the graduation rate has dropped 
        1.3 percent. Only 71.2 percent of students who enroll in the 
        ninth grade now graduate from high school.
            (7) The Department of Education has fostered over-
        regulation, standardization, bureaucratization, and litigation 
        in United States education.
            (8) The Department of Education expends large amounts of 
        money on its own maintenance and overhead. As an organization, 
        it is inefficient, ill-managed, and wasteful.
            (9) Recent tests reflect poor results in mathematics and 
        reading for American students compared with students from other 
        nations.
            (10) Only through initiatives led by parents and local 
        communities with the power to act can the United States elevate 
        educational performance toward an acceptable level.
            (11) The Department of Education has been hostile to many 
        promising reform ideas.

SEC. 4. PURPOSES.

    The purposes of this Act are--
            (1) to improve the quality of elementary and secondary and 
        higher education programs in the Nation;
            (2) to return the responsibility and authority for 
        education to parents, teachers, communities, students, and 
        States, and provide them greater control over education 
        spending;
            (3) to ensure that the Federal Government does not 
        overregulate and interfere in the decisionmaking of parents, 
        local communities, teachers, and students regarding education; 
        and
            (4) to ensure that Americans are able to compete in the 
        global economy of the 21st century.

             TITLE I--ABOLITION OF DEPARTMENT OF EDUCATION

SEC. 101. ABOLITION OF DEPARTMENT.

    The Department of Education is abolished.

SEC. 102. ESTABLISHMENT AND SUNSET OF OFFICE OF ECONOMIC OPPORTUNITIES 
              IN THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, AND 
              TRANSFER OF FUNCTIONS.

    (a) Establishment of Office.--There is established in the 
Department of Health and Human Services the Office of Economic 
Opportunities.
    (b) Director.--
            (1) In general.--There shall be at the head of the Office a 
        Director for Economic Opportunities, who shall be appointed by 
        the President and confirmed with the advice and consent of the 
        Senate. The Office shall be administered under the supervision 
        and direction of the Assistant Secretary for the Administration 
        for Families and Children. The Director for Economic 
        Opportunities shall receive compensation at the rate prescribed 
        for level V of the Executive Schedule under section 5315 of 
        title 5, United States Code.
            (2) Initial appointment of administrator.--Notwithstanding 
        any other provision of this Act or any other law, the President 
        may, at any time after the date of the enactment of this Act, 
        appoint an individual to serve as Director of Economic 
        Opportunities, as such position is established under paragraph 
        (1). An appointment under this paragraph may not be construed 
        to affect the position of Secretary of Education or the 
        authority of the Secretary before the effective date specified 
        in section 109(a).
    (c) Duties.--The Director shall be responsible for--
            (1) the administration of all functions of the Office 
        pursuant to section 102 and other provisions of law;
            (2) the administration and wind-up of any outstanding 
        obligations of the Federal Government under any programs 
        terminated or repealed by this Act; and
            (3) taking such other actions as may be necessary to wind 
        up any outstanding affairs of the Department of Education and 
        the Office.
    (d) Transfer of Functions.--Except as otherwise provided in this 
Act, the Director shall perform all functions that, immediately before 
the effective date of this section under section 109(a), were functions 
of the Department of Education (or any office of the Department) or 
were performed by the Secretary of Education or any other officer or 
employee of the Department in the capacity as such officer or employee.
    (e) Abolition of Office.--The Office and all of its functions are 
abolished effective upon the expiration of the authorization for the 
programs under its jurisdiction.

SEC. 103. PRINCIPAL OFFICERS.

    (a) Directors.--There shall be in the Office--
            (1) an Assistant Director of Childhood Schooling; and
            (2) an Assistant Director of Advanced Schooling.
    (b) Appointment.--Each of the Assistant Directors in the Office of 
Economic Opportunities shall be appointed by the Secretary of Health 
and Human Services.
SEC. 104. CONTINUATION OF SERVICE OF DEPARTMENT OFFICER.

    (a) Continuation of Service of Secretary.--The individual serving 
as the Secretary of Education on the effective date of this title may 
serve as Director until the date an individual is appointed under this 
title to the position of Director, or until the end of the 120-day 
period provided for in section 3348 of title 5, United States Code 
(relating to limitations on the period of time a vacancy may be filled 
temporarily), whichever is earlier.
    (b) Compensation for Continued Service.--Any individual who acts as 
the Director under subsection (a) after the effective date of this 
title and before the first appointment of a person to such position 
after such date shall be compensated pursuant to section 102(b)(1) for 
so serving or acting.

SEC. 105. REORGANIZATION.

    The Secretary of Health and Human Services may allocate or 
reallocate any function of the Office pursuant to this Act among the 
officers of the Office, and may, in accordance with the transfer of 
functions by this Act, consolidate, alter, or discontinue in the Office 
any organizational entities that were entities of the Department of 
Education, as the Secretary of Health and Human Services considers 
necessary or appropriate. Notwithstanding any other provision of law, 
the Secretary of Health and Human Services may not transfer any 
function or personnel of the Office to any agency outside of the 
Office.

SEC. 106. PLAN FOR WINDING UP AFFAIRS.

    Not later than 180 days after the date of the enactment of this 
Act, the President shall submit to the Congress a plan for winding up 
the affairs of the Department of Education in accordance with this Act.

SEC. 107. GAO REPORT.

    Not later than 180 days after the date of enactment of this Act, 
the Comptroller General of the United States shall submit to the 
Congress a report which shall include recommendations for the most 
efficient means of achieving, in accordance with this Act--
            (1) the complete abolition of the Department of Education; 
        and
            (2) the termination or transfer or other continuation of 
        functions of the Department of Education.

SEC. 108. CONFORMING AMENDMENTS.

    (a) Presidential Succession.--Section 19(d)(1) of title 3, United 
States Code, is amended by striking ``Secretary of Education,''.
    (b) Executive Departments.--Section 101 of title 5, United States 
Code, is amended by striking the following item:
            ``The Department of Education.''.
    (c) Secretary's Compensation.--Section 5312 of title 5, United 
States Code, is amended by striking the following item:
            ``Secretary of Education.''.
    (d) Compensation for Positions at Level II.--Section 5313 of title 
5, United States Code, is amended by striking the following item:
            ``Deputy Secretary of Education.''.
    (e) Compensation for Positions at Level III.--Section 5314 of title 
5, United States Code, is amended by striking the following item:
            ``Under Secretary of Education.'';
    (f) Compensation for Positions at Level IV.--Section 5315 of title 
5, United States Code, is amended--
            (1) by striking the following items:
            ``Assistant Secretaries of Education (10).
            ``General Counsel, Department of Education.
            ``Inspector General, Department of Education.'';
            (2) by striking the following item:
            ``Chief Financial Officer, Department of Education.''; and
            (3) by striking the following item:
            ``Liaison for Community and Junior Colleges, Department of 
        Education.''.
    (g) Compensation for Positions at Level V.--Section 5316 of title 
5, United States Code, is amended by striking the following item:
            ``Additional officers, Department of Education (4).''.
    (h) Inspector General Act of 1978.--The Inspector General Act of 
1978 (5 U.S.C. App.) is amended--
            (1) in section 9(a)(1), by striking subparagraph (D);
            (2) in section 11(1), by striking ``Education,''; and
            (3) in section 11(2), by striking ``Education,''.

SEC. 109. EFFECTIVE DATE.

    Except as otherwise provided, this title shall take effect on the 
date that is one year after the date of enactment of this Act.

SEC. 110. LIMITATION ON EXPENDITURES.

    The amount expended by the United States each fiscal year for the 
administration of a function transferred by this Act shall not exceed 
70 percent of the total amount expended for the administration of that 
function during fiscal year 1995.
                      TITLE II--EDUCATION PROGRAMS

             Subtitle A--Elementary and Secondary Education

       CHAPTER 1--ELEMENTARY AND SECONDARY EDUCATION BLOCK GRANT

SEC. 201. GOALS OF ELEMENTARY AND SECONDARY EDUCATION BLOCK GRANT 
              PROGRAM.

    The Director of the Office of Economic Opportunities under the 
Administration for Children and Families in the Department of Health 
and Human Services is authorized to provide the Governor of each State 
that complies with the requirements of section 203 a grant in an amount 
determined under section 205.

SEC. 202. PROGRAM AUTHORIZED.

    Each State shall, subject to the requirements of this Act and 
appropriations Acts, receive a grant under this subtitle in each fiscal 
year to carry out the purposes of this subtitle.

SEC. 203. STATE ELIGIBILITY.

    (a) In General.--To be eligible to receive a grant under this 
subtitle, a State shall submit an application to the Director of 
Economic Opportunities which contains the assurances required by this 
title. Such application must be submitted at such time, in such form 
and manner as the Director may reasonably require.
    (b) Assurances.--Such application shall include the following 
assurances:
            (1) Improve education.--The Governor shall use funds 
        received to improve education.
            (2) Distribution.--The Governor shall establish a procedure 
        to distribute funds to local educational entities or to provide 
        services to children attending local educational entities.
            (3) Assurances from local educational entities.--The 
        Governor shall require a local educational entity that seeks 
        funds under this title to provide assurances that--
                    (A) funds will be used to improve education;
                    (B) parents, members of the community, and 
                community leaders will be involved in decisionmaking at 
                the local level; and
                    (C) such entity that receives funds under this 
                title will comply with Federal civil rights laws.

SEC. 204. GENERAL STATE REQUIREMENTS.

    (a) Funds for Local Use.--
            (1) In general.--Not less than 98 percent of the amount of 
        funds received by a State under this title shall be made 
        available to local educational entities.
            (2) Local discretion.--A local educational entity that 
        receives funds from a State will have the discretion to spend 
        funds received from the State to develop programs that improve 
        education.
    (b) Administrative Costs.--Not more than 2 percent of funds 
received under this title may be used by a State or a local educational 
entity for administrative purposes.

SEC. 205. AMOUNT OF STATE ALLOTMENT.

    (a) In General.--Except as provided in subsections (b) and (c), 
there shall be allotted to each State, which for purposes of this 
section shall not include the territories, an amount which bears the 
same ratio to the amount of funds appropriated for this title in any 
fiscal year as the population of children, aged 5 through 17 years of 
age, of such State bears to the population of such children of all the 
States.
    (b) State Minimum.--Of the total amount appropriated to carry out 
this subtitle in any fiscal year each State shall receive not less than 
one quarter of one percent of such amounts.
    (c) Set-Aside for Territories.--Of the amount allotted under 
subsection (a), the Director shall allot not more than one quarter of 
one percent among Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, American Samoa, Guam, and the Virgin Islands.

SEC. 206. LOCAL FISCAL ACCOUNTABILITY.

    A local educational entity that receives funds from a State under 
this subtitle in any fiscal year shall be required to make reasonably 
available--
            (1) a proposed budget regarding how such funds shall be 
        used;
            (2) an accounting of the actual use of such funds at the 
        end of such entity's fiscal year.

SEC. 207. PARTICIPATION OF CHILDREN ENROLLED IN PRIVATE SCHOOLS.

    (a) Secular, Neutral, Nonideological.--Any educational services or 
other benefits, including materials and equipment, provided to children 
enrolled in private schools shall be secular, neutral, and 
nonideological.
    (b) Bypass.--
            (1) In general.--If under law a State is prohibited from 
        providing for the participation under this chapter of eligible 
        children enrolled in private elementary and secondary schools, 
        the Office of Economic Opportunities, at the request of the 
        Governor, shall arrange for services for such children to the 
        extent consistent with the number of eligible children 
        identified under section 205 in a local educational agency who 
        are enrolled in private elementary and secondary schools.
            (2) Equitable services.--Services provided under this 
        section shall be equitable in comparison to services and other 
        benefits provided for public school children participating in 
        programs under this chapter.
            (3) Reduction.--The amount of funds appropriated to the 
        State pursuant to section 205 shall be reduced by the amount 
        necessary to carry out this section.

SEC. 208. DEFINITIONS.

    Except as otherwise provided, for the purposes of this subtitle, 
the following terms have the following meanings:
            (1) Director.--The term ``Director'' means the Director of 
        Economic Opportunities under the Administration for Children 
        and Families in the Department of Health and Human Services.
            (2) Local educational entity.--The term ``local educational 
        entity'' means a local educational agency or a public or 
        private elementary or secondary school.
            (3) State.--The term ``State'' means any of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, American Samoa, Guam, and the 
        Commonwealth of the Northern Mariana Islands.

SEC. 209. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated $9,000,000,000 for each of 
the fiscal years 1998 through 2000 to carry out the programs authorized 
under this subtitle.

      CHAPTER 2--OTHER ELEMENTARY AND SECONDARY EDUCATION PROGRAMS

SEC. 210. AMENDMENTS AND REPEALS OF CERTAIN EDUCATION PROVISIONS.

    (a) Elementary and Secondary Education Act of 1965.--
            (1) In general.--Titles I, II, III, IV, V, VI, VII, X, XI, 
        XII, XIII, XIV, and parts B and C of title IX of the Elementary 
        and Secondary Education Act of 1965 are repealed.
            (2) Impact aid.--(A) Section 8003 of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 7703) is amended by 
        striking subsection (e) of such section.
            (B) Except as provided under subparagraph (A), the programs 
        provided under title VIII of the Elementary and Secondary 
        Education Act of 1965 shall be administered by the Department 
        of Defense through the Assistant Secretary for Force Management 
        Policy.
            (3) Indian education.--Part A of title IX of the Elementary 
        and Secondary Education Act of 1965 shall be administered by 
        the Department of the Interior through the Assistant Secretary 
        for Indian Affairs.
    (b) Goals 2000: Educate America Act.--Goals 2000: Educate America 
Act is repealed.
    (c) School-to-Work Opportunities Act.--The School-to-Work 
Opportunities Act is repealed.
    (d) General Education Provisions Act.--Parts D and F, sections 422, 
424, 425, 427, 428, 429, 433, 439, and 443, and paragraph (3) of 
section 431(a) of the General Education Provisions Act are repealed.
    (e) National Education Statistics Act of 1994.--The National 
Education Statistics Act of 1994 is repealed.
    (f) Effective Date.--The repeals and transfers made by subsections 
(a), (b), (c), (d), and (e) shall take effect on the date that is one 
year after the date of enactment of this Act.

Subtitle B--Conforming Amendments to the Individuals with Disabilities 
                             Education Act

SEC. 211. AMENDMENTS TO PROVISIONS REFERENCING SECRETARY OF EDUCATION 
              AND DEPARTMENT OF EDUCATION.

    (a) Transfer of Authority From Secretary of Education to Secretary 
of Health and Human Services.--The Individuals with Disabilities 
Education Act (20 U.S.C. 1400 et seq.) is amended in sections 
602(a)(14), 611(f), and 684(b)(5) by striking ``Secretary of 
Education'' each place such term appears and inserting ``Secretary of 
Health and Human Services''.
    (b) Transfer of Authority From Department of Education to 
Department of Health and Human Services.--The Individuals with 
Disabilities Education Act (20 U.S.C. 1400 et seq.) is amended in 
sections 610 and 621(a)(3) by striking ``Department of Education'' each 
place such term appears and inserting ``Department of Health and Human 
Services''.

SEC. 212. AMENDMENTS TO DEFINITIONS.

    (a) Definition of Excess Costs.--Subparagraph (A) of section 
602(a)(21) of the Individuals with Disabilities Education Act (20 
U.S.C. 1401(a)(21)(A)) is amended to read as follows:
                    ``(A) amounts received--
                            ``(i) under this part, or
                            ``(ii) under subtitle A of title II of the 
                        Back to Basics Education Act, and''.
    (b) Definition of Native Language.--Paragraph (22) of section 
602(a) of the Individuals with Disabilities Education Act (20 U.S.C. 
1401(a)(22)) is amended to read as follows:
            ``(22) The term `native language', when used with reference 
        to an individual of limited-English proficiency, means the 
        language normally used by the individual, or in the case of an 
        individual aged 3 through 21, the language normally used by the 
        parents of the individual.''.

SEC. 213. TRANSFER OF ADMINISTERING AUTHORITY TO OFFICE OF ECONOMIC 
              OPPORTUNITIES.

    The Individuals with Disabilities Education Act (20 U.S.C. 1400 et 
seq.) is amended--
            (1) by striking section 603 and inserting the following:

                   ``office of economic opportunities

    ``Sec. 603. The Secretary of Health and Human Services, acting 
through the Director for Economic Opportunities, shall administer and 
carry out this Act. The Office of Economic Opportunities shall be the 
principal agency in the Department of Health and Human Services for 
administering and carrying out programs and activities concerning the 
education and training of individuals with disabilities.'';
            (2) in section 621(f)(1), by striking ``Office of Special 
        Education Programs'' and inserting ``Office of Economic 
        Opportunities''; and
            (3) in section 685(b)(1), by striking ``Office of Special 
        Education Programs;'' and inserting ``Office of Economic 
        Opportunities;''.

SEC. 214. OUTREACH SERVICES FOR CERTAIN INSTITUTIONS OF HIGHER 
              EDUCATION.

    Subclause (II) of section 610(j)(2)(C)(ii) of the Individuals with 
Disabilities Education Act (20 U.S.C. 1409(j)(2)(C)(ii)(II)) is amended 
to read as follows:
                    ``(II) institutions of higher education which have 
                an enrollment which includes a substantial percentage 
                of needy students (as determined by the Director) and 
                the average educational and general expenditures of 
                which are low, per full-time equivalent undergraduate 
                student, in comparison with the average educational and 
                general expenditures per full-time equivalent 
                undergraduate student of institutions that offer 
                similar instruction;''.

                 Subtitle C--Higher Education Programs

            CHAPTER 1--ELIMINATION AND REDUCTION OF PROGRAMS

SEC. 221. REPEAL OF HIGHER EDUCATION LAWS.

    (a) In General.--Except as provided in subsection (b) and (c), the 
Higher Education Act of 1965 (20 U.S.C. 1001) is repealed effective one 
year after the date of the enactment of this Act.
    (b) Exceptions.--Subsection (a) shall not apply to the following:
            (1) The first section, containing the short title of such 
        Act.
            (2) Subpart 1 of part A of title IV, relating to Pell 
        Grants.
            (3) Part B of such title, relating to the Federal Family 
        Education Loan Program.
            (4) Part E of such title, relating to Perkins Loans.
            (5) Parts F, G, and H of such title, relating to needs 
        analysis, general provisions, and the program integrity triad.
            (6) Section 1201, relating to definitions.
    (c) Continuing Authority To Collect Loans.--Subsection (a) shall 
not affect the authority of the United States to collect any loan made 
under any provision repealed by such subsection.
    (d) Perkins Loans.--Section 461(b) of the Higher Education Act of 
1965 is amended to read as follows:
    ``(b) Contributions Discontinued.--No funds are authorized to be 
appropriated for fiscal year 1997 or any succeeding year for the 
purpose of making contributions to student loan funds established under 
this part.''.
    (e) Limitation on Funds for Howard University.--Section 8 of the 
Act of March 2, 1867 is amended--
            (1) by inserting ``(a)'' after ``Sec. 8.''; and
            (2) by adding at the end the following new subsection:
    ``(b) Notwithstanding subsection (a) and any provision of the 
Howard University Endowment Act, the total amount that is authorized to 
be appropriated pursuant to this section and such Endowment Act shall 
not exceed the total amount appropriated pursuant to this section and 
such Endowment Act for fiscal year 1995, and of such total amount--
            ``(1) not less than 30 percent of the amount appropriated 
        for fiscal year 1998 shall be appropriated for purposes of such 
        Endowment Act;
            ``(2) not less than 60 percent of the amount appropriated 
        for fiscal year 1999 shall be appropriated for purposes of such 
        Endowment Act; and
            ``(3) not less than 100 percent of the amount appropriated 
        for fiscal year 2000 shall be appropriated for purposes of such 
        Endowment Act.
Notwithstanding subsection (a) and any provision of the Howard 
University Endowment Act, no funds are authorized to be appropriated 
pursuant to this section or such Endowment Act for fiscal year 2001 or 
any succeeding fiscal year.''.

SEC. 222. AMENDMENT TO THE FEDERAL CREDIT REFORM ACT.

    (a) Amendment.--Section 502(5)(B) of the Congressional Budget Act 
is amended to read as follows:
                    ``(B) The cost of a direct loan shall be the net 
                present value, at the time when the direct loan is 
                disbursed, of the following cash flows for the 
                estimated life of the loan--
                            ``(i) loan disbursements;
                            ``(ii) repayments of principal;
                            ``(iii) payments of interest and other 
                        payments by or to the Government over the life 
                        of the loan after adjusting for estimated 
                        defaults, prepayments, fees, penalties and 
                        other recoveries; and
                            ``(iv) in the case of a direct loan made 
                        pursuant to a program for which the Office of 
                        Management and Budget estimates that for the 
                        coming fiscal year (or for any prior fiscal 
                        year) loan commitments will equal or exceed 
                        $5,000,000,000, direct expenses, including but 
                        not limited to the following: expenses arising 
                        from activities related to credit extension; 
                        loan origination; loan servicing; technical 
                        assistance; training; program promotion; 
                        payments to contractors, other government 
                        entities, and program participants; collection 
                        of delinquent loans; and write-off and close-
                        out of loans.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to all fiscal years beginning on or after October 1, 1995, and to 
statutory changes made on or after the date of enactment of this Act.

SEC. 223. SALE OF FDSL LOAN PORTFOLIOS.

    The Higher Education Act of 1965 Act (20 U.S.C. 1087h) is amended 
by inserting after section 458 the following new section:

``SEC. 459. SALE OF FEDERAL DIRECT STUDENT LOAN PORTFOLIOS.

    ``(a) Auction Sales of Loan Portfolios.--The Secretary shall 
conduct auctions to sell the outstanding portfolio of loans made 
pursuant to this part. Such auctions shall consist of sales of 
portfolios representative of the overall characteristics of the direct 
loans held by the Secretary. Auctions shall be held for portfolios of 
not less than $40,000,000 of loans per sale. The first sale of loans 
shall take place not later than 120 days after the date of enactment of 
this section, and shall not include Federal guarantees or reinsurance 
against the contingency of borrower default, death, or disability.
    ``(b) Loan Terms Subject to Promissory Note.--Such loans shall be 
subject to the terms and conditions as specified in the borrower 
promissory note, and shall not be subject to further Federal 
regulations pursuant to this Act.
    ``(c) Disposition of Proceeds.--All proceeds received as a result 
of the auctions conducted pursuant to this part shall be returned to 
the United States Department of the Treasury after deduction of 
expenses incurred
 by the Department of Education in connection with the auctions 
required pursuant to this section.''.

SEC. 224. STUDENT LOAN PROGRAM; STATEMENT OF POLICY.

    The Congress finds that the Federal student loan programs should be 
reviewed to evaluate whether reforms need to be made to the programs 
based on the principles of risk sharing, market-based orientation, 
privatization, and deregulation.

SEC. 225. ELIMINATION OF IN-SCHOOL INTEREST SUBSIDIES.

    (a) Guaranteed Loans.--Section 428(a) of the Higher Education Act 
of 1965 (20 U.S.C. 1078(a)) is amended by adding at the end the 
following new paragraph:
            ``(8) Termination of interest subsidies.--Notwithstanding 
        paragraph (3), no portion of the interest shall be paid by the 
        Secretary under this subsection on any loan made on or after 
        October 1, 1995. Interest on the unpaid principal amount of any 
        such loan--
                    ``(A) which accrues prior to the beginning of the 
                repayment period of the loan, or
                    ``(B) which accrues during a period in which 
                principal need not be paid (whether or not such 
                principal is in fact paid) by reason of a provision 
                described in subsection (b)(1)(M) of this section or in 
                section 427(a)(2)(C),
        shall, at the option of the borrower--
                    ``(i) be paid monthly or quarterly, or
                    ``(ii) be added by the lender to the principal 
                amount of the loan at the commencement of the repayment 
                period.''.

                CHAPTER 2--HIGHER EDUCATION BLOCK GRANT

SEC. 231. PURPOSE.

    It is the purpose of this part to authorize block grants to States 
to assist institutions of higher education in order to improve access 
to higher education and to improve the quality of educational programs.

SEC. 232. DISTRIBUTION OF FUNDS.

    (a) In General.--From the funds appropriated under section 236, the 
Director shall allocate to the Governor of each State that has 
submitted the assurances required by section 233 an amount that bears 
the same ratio to the amount so appropriated as the number of students 
enrolled in institutions of higher education in such State bears to the 
total number of students so enrolled in all the States.
    (b) Exception for Small States.--Notwithstanding subsection (a), no 
State shall be allocated less than 0.25 percent of the funds 
appropriated under section 236.
    (c) Determination of Number of Students.--The Director shall 
determine the number of students in each State on the basis of a 
certification from the Governor of each State.

SEC. 233. STATE ASSURANCES.

    Any State seeking to obtain an allocation under section 232 shall 
submit to the Director an application that contains the following 
assurances:
            (1) The Governor of such State will establish a procedure 
        for the distribution of funds to participating institutions of 
        higher education.
            (2) The Governor will use the funds obtained under this 
        part only for the improvement of higher education.
            (3) The Governor will require each participating 
        institution to submit assurances to the State that they will 
        use funds obtained under this part only for the improvement of 
        higher education.
            (4) The Governor will require each participating 
        institution to submit assurances that the institution will 
        comply with Federal civil rights laws.

SEC. 234. USE OF FUNDS.

    (a) In General.--Any funds obtained by a participating institution 
under this part may, subject to the provisions of this part, be used 
for any existing or new program.
    (b) Limitation on Administrative Costs.--Not more than 2 percent of 
the funds allocated to any State or institution under this chapter may 
be used for administrative costs.

SEC. 235. PUBLIC DISCLOSURE.

    Institutions receiving funding under this chapter shall make 
reasonably available to the community, parents, and students a listing 
of the uses of such funds.

SEC. 236. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this subtitle 
$2,000,000,000 for each of fiscal years 1998 through 2000.

SEC. 237. DEFINITIONS.

    As used in this subtitle--
            (1) unless otherwise provided, the terms used in this part 
        that are defined in section 1201 of the Higher Education Act of 
        1965 have the meanings provided in such section;
            (2) the term ``State'' means the several States and the 
        District of Columbia; and
            (3) the term ``Director'' means the Director of Economic 
        Opportunities in the Department of Health and Human Services.

                  Subtitle D--Miscellaneous Provisions

SEC. 241. CONSTRUCTION.

    Notwithstanding the provisions of this Act, nothing in this Act 
shall be construed to affect continued funding for Galludet University, 
the American Printing House for the Blind, or the National Institute 
for the Deaf at fiscal year 1995 levels through fiscal year 2000.

SEC. 242. REGULATIONS.

    For purposes of this title, the Secretary of Health and Human 
Services shall consult with Congress before issuing regulations 
regarding the grants provided under chapter 1 of subtitle A and chapter 
2 of subtitle C of this title and shall only issue regulations that are 
necessary for the timely distribution of funds to the States.

SEC. 243. CONSOLIDATED APPLICATION.

    The Secretary of Health and Human Services shall provide for a 
consolidated application for grants provided under chapter 1 of 
subtitle A and chapter 2 of subtitle C of this title. Consolidated 
applications also shall be permitted at the local level.

SEC. 244. APPROPRIATIONS.

    The amount that is authorized to be appropriated for programs under 
chapter 2 of subtitle A, subtitle B, and chapter 1 of subtitle C shall 
not exceed the amount appropriated for such programs for fiscal year 
1995. Such programs shall be authorized through fiscal year 2000.

SEC. 245. FEDERAL CIVIL RIGHTS.

    (a) In General.--
            (1) Applicability.--Nothing in this title shall be 
        construed to affect the applicability of civil rights laws 
        relating to any program established, transferred, or 
        consolidated under this Act.
            (2) Duties.--The Secretary of Health and Human Services 
        shall be responsible for carrying out any other civil rights 
        functions performed by the Secretary of Education as such 
        functions were performed on the day before the date of the 
        enactment of this Act.
    (b) Health and Human Services.--The Director of the Office of Civil 
Rights of the Department of Health and Human Services shall submit a 
report annually to the Secretary of Health and Human Services, the 
President, and the appropriate committees of Congress summarizing the 
compliance and enforcement activities of the Office of Civil Rights as 
such activities pertain to the Office of Economic Opportunities. The 
report shall identify significant civil rights or compliance problems 
for which the Office of Civil Rights has made a recommendation for 
corrective action and which, in the judgment of the Director of the 
Office of Civil Rights, adequate progress is not being made.
    (c) Department of Justice.--The Assistant Attorney General in 
charge of the Civil Rights Division of the Department of Justice shall 
submit annually a report to the Attorney General, the President, and 
the appropriate committees of Congress summarizing the activities of 
the Civil Rights Division as such activities pertain to the grantees of 
programs authorized by this Act.

                     TITLE III--GENERAL PROVISIONS

SEC. 301. REFERENCES.

    Any reference in any other Federal law, Executive order, rule, 
regulation, or delegation of authority, or any document of or 
pertaining to an office from which a function is transferred by this 
Act--
            (1) to the Secretary of Education or an officer of the 
        Department of Education, is deemed to refer to the head of the 
        department or office to which such function is transferred; or
            (2) to the Department of Education is deemed to refer to 
        the department or office to which such function is transferred.

SEC. 302. EXERCISE OF AUTHORITIES.

    Except as otherwise provided by law, a Federal official to whom a 
function is transferred by this Act may, for purposes of performing the 
function, exercise all authorities under any other provision of law 
that were available with respect to the performance of that function to 
the official responsible for the performance of the function 
immediately before the transfer of the function under this Act.

SEC. 303. SAVINGS PROVISIONS.

    (a) Legal Documents.--All orders, determinations, rules, 
regulations, permits, grants, loans, contracts, agreements, 
certificates, licenses, and privileges--
            (1) that have been issued, made, granted, or allowed to 
        become effective by the President, the Secretary of Education, 
        any officer or employee of any office transferred by this Act, 
        or any other Government official, or by a court of competent 
        jurisdiction, in the performance of any function that is 
        transferred by this Act, and
            (2) that are in effect on the date of such transfer (or 
        become effective after such date pursuant to their terms as in 
        effect on the date of such transfer),
shall continue in effect according to their terms until modified, 
terminated, superseded, set aside, or revoked in accordance with law by 
the President, any other authorized official, a court of competent 
jurisdiction, or operation of law.
    (b) Proceedings.--This Act shall not affect any proceedings or any 
application for any benefits, service, license, permit, certificate, or 
financial assistance pending on the effective date of this title with 
respect to a function transferred by this Act, but such proceedings and 
applications shall be continued. Orders shall be issued in such 
proceedings, appeals shall be taken therefrom, and payments shall be 
made pursuant to such orders, as if this Act had not been enacted, and 
orders issued in any such proceeding shall continue in effect until 
modified, terminated, superseded, or revoked by a duly authorized 
official, by a court of competent jurisdiction, or by operation of law. 
Nothing in this subsection shall be considered to prohibit the 
discontinuance or modification of any such proceeding under the same 
terms and conditions and to the same extent that such proceeding could 
have been discontinued or modified if this Act had not been enacted.
    (c) Suits.--This Act shall not affect suits commenced before the 
effective date of this title and in all such suits, proceeding shall be 
had, appeals taken, and judgments rendered in the same manner and with 
the same effect as if this Act had not been enacted.
    (d) Nonabatement of Actions.--No suit, action, or other proceeding 
commenced by or against the Department of Education or the Secretary of 
Education, or by or against any individual in the official capacity of 
such individual as an officer or employee of an office transferred by 
this Act, shall abate by reason of the enactment of this Act.
    (e) Continuance of Suits.--If, before the effective date of this 
title, any officer of the Department of Education in the official 
capacity of such officer is party to a suit with respect to a function 
of the officer, and under this Act such function is transferred to any 
other officer or office, then such suit shall be continued with the 
other officer or the head of such other office, as applicable, 
substituted or added as a party.

SEC. 304. TRANSFER OF ASSETS.

    Except as otherwise provided in this Act, so much of the personnel, 
property, records, and unexpended balances of appropriations, 
allocations, and other funds employed, used, held, available, or to be 
made available in connection with a function transferred to an official 
by this Act shall be available to the official at such time or times as 
the President directs for use in connection with the functions 
transferred.

SEC. 305. DELEGATION AND ASSIGNMENT.

    Except as otherwise expressly prohibited by law or otherwise 
provided in this Act, an official to whom functions are transferred 
under this Act (including the head of any office to which functions are 
transferred under this Act) may delegate any of the functions so 
transferred to such officers and employees of the office of the 
official as the official may designate, and may authorize successive 
redelegations of such functions as may be necessary or appropriate. No 
delegation of functions under this section or under any other provision 
of this Act shall relieve the official to whom a function is 
transferred under this Act of responsibility for the administration of 
the function.

SEC. 306. AUTHORITY OF OFFICE OF MANAGEMENT AND BUDGET WITH RESPECT TO 
              FUNCTIONS TRANSFERRED.

    (a) Determinations.--If necessary, the Director of the Office of 
Management and Budget shall make any determination of the functions 
that are transferred under this Act.
    (b) Incidental Transfers.--The Director of the Office of Management 
and Budget, at such time or times as the Director shall provide, may 
make such determinations as may be necessary with regard to the 
functions transferred by this Act, and to make such additional 
incidental dispositions of personnel, assets, liabilities, grants, 
contracts, property, records, and unexpended balances of 
appropriations, authorizations, allocations, and other funds held, 
used, arising from, available to, or to be made available in connection 
with such functions, as may be necessary to carry out the provisions of 
this Act. The Director of the Office of Management and Budget shall 
provide for the termination of the affairs of all entities terminated 
by this Act and for such further measures and dispositions as may be 
necessary to effectuate the purposes of this Act.

SEC. 307. PROPOSED CHANGES IN LAW.

    Not later than 90 days before the effective date specified in 
section 109, the Director of the Office of Management and Budget shall 
submit to the Congress a description of any changes in Federal law 
necessary to reflect abolishments, transfers, terminations, and 
disposals under this Act.

SEC. 308. DEFINITION OF TRANSFER.

    For purposes of this title, the vesting of a function in a 
department or office pursuant to reestablishment of an office shall be 
considered to be the transfer of the function.

SEC. 309. DEFINITIONS.

    For purposes of this title, the following definitions shall apply:
            (1) Director.--The term ``Director'' means the Director for 
        Economic Opportunities in the Administration for Families and 
        Children in the Department of Health and Human Services, 
        established under section 102(a).
            (2) Function.--The term ``function'' includes any duty, 
        obligation, power, authority, responsibility, right, privilege, 
        activity, or program.
            (3) Office.--The term ``Office'' means the Office of 
        Economic Opportunities in the Department of Health and Human 
        Services, established under section 102(a).
                     TITLE IV--STATEMENTS OF POLICY

SEC. 401. STATEMENT OF POLICY REGARDING FEDERAL EDUCATION FUNDING.

    Congress finds that there should be a review and evaluation as to 
the feasibility of further enhancing the ability of States and local 
communities to fund education by reducing the Federal tax burden and 
commensurately eliminating Federal Government involvement in providing 
grants for education programs.

SEC. 402. STATEMENT OF POLICY REGARDING JOB TRAINING PROGRAMS.

    The Congress finds that all job training programs under the 
jurisdiction of the Department of Education--
            (1) should be reviewed and transferred to the Department of 
        Labor; and
            (2) should be consolidated into one or more block grants.

SEC. 403. STATEMENT OF POLICY REGARDING INDIAN EDUCATION.

    Congress finds that any program transferred as a result of this Act 
to the Department of the Interior should be reviewed by Congress to 
ensure that such programs benefit Native American children that live on 
reservations.
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