[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2332 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 2332

To consolidate and reform workforce development and literacy programs, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 14, 1995

  Mr. McKeon introduced the following bill; which was referred to the 
          Committee on Economic and Educational Opportunities

_______________________________________________________________________

                                 A BILL


 
To consolidate and reform workforce development and literacy programs, 
                        and for other purposes.
    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--
            (1) ``Consolidated and Reformed Education, Employment, and 
        Rehabilitation Systems Act''; or
            (2) ``CAREERS 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. Purpose.
Sec. 4. Authorization of appropriations.
Sec. 5. Definitions.
Sec. 6. Transition.
             TITLE I--WORKFORCE DEVELOPMENT INFRASTRUCTURE

Sec. 101. Purpose of title.
              Subtitle A--State and Local Responsibilities

Sec. 102. State requirements.
Sec. 103. Collaborative process regarding State system.
Sec. 104. Consolidated State workforce development and literacy plan.
Sec. 105. Establishment of workforce development areas.
Sec. 106. Provisions regarding local workforce development boards.
Sec. 107. Establishment of integrated career center systems.
Sec. 108. Identification of eligible Education, training, and 
                            vocational rehabilitation service 
                            providers.
Sec. 109. Management information systems.
Sec. 110. Performance accountability system.
Sec. 111. Limitation on Federal regulation.
Sec. 112. General provision.
Sec. 113. Liability.
              Subtitle B--Amendments to Wagner-Peyser Act

Sec. 131. General program requirements.
Sec. 132. Labor market information.
                       Subtitle C--Worker Rights

Sec. 141. Requirements.
 TITLE II--YOUTH DEVELOPMENT AND CAREER PREPARATION CONSOLIDATION GRANT

Sec. 201. Purposes.
Sec. 202. Definitions.
                       Subtitle A--State Funding

Sec. 211. National and State funding.
Sec. 212. Within State allocation.
       Subtitle B--State Organizational, Planning, and Reporting 
                            Responsibilities

Sec. 221. State plan.
Sec. 222. State programs and State activities.
Sec. 223. Incentive awards.
Sec. 224. Core standards, performance goals, and measures.
         Subtitle C--Subgrants for In-School and At-Risk Youth

Sec. 231. Partnership agreements.
Sec. 232. Distribution of funds.
                       Chapter 1--In-School Youth
Sec. 241. Uses of funds for in-school youth.
                        Chapter 2--At-Risk Youth

Sec. 245. Uses of funds for at-risk youth.
Sec. 246. At-risk youth providers.
                     Subtitle D--National Programs

Sec. 251. Research activities.
Sec. 252. Assessment and data collection of youth development and 
                            career preparation programs.
Sec. 253. National center or centers for research.
      TITLE III--ADULT EMPLOYMENT AND TRAINING CONSOLIDATION GRANT

Sec. 301. Purpose.
     Subtitle A--Adult Employment and Training Consolidation Grant

Sec. 311. Authorization.
Sec. 312. Allotment among States.
Sec. 313. Allocation within States.
Sec. 314. Additional State plan requirements.
Sec. 315. Use of amounts.
Sec. 316. Core standards, performance goals, and measures.
                      Subtitle B--Federal Programs

Sec. 321. National discretionary grants.
Sec. 322. Disaster relief employment assistance.
Sec. 323. Research, demonstration, evaluation, and capacity building.
Sec. 324. Workforce skills and development loans.
Sec. 325. Employment, training, and education assistance for Native 
                            Americans.
Sec. 326. Employment, training, and education assistance for migrant 
                            and seasonal farmworkers.
 TITLE IV--ADULT EDUCATION AND FAMILY LITERACY CONSOLIDATION GRANT AND 
          LIBRARY SERVICES AND TECHNOLOGY CONSOLIDATION GRANT

Sec. 401. Findings.
Sec. 402. Definitions.
  Subtitle A--Adult Education and Family Literacy Consolidation Grant

Sec. 411. Purposes.
                           Chapter 1--Funding

Sec. 421. Reservations from amounts appropriated.
Sec. 422. Allotment.
                      Chapter 2--Grants to States

Sec. 431. Requirement to make grants.
Sec. 432. Uses of funds.
Sec. 433. Additional grant requirements.
Sec. 434. Performance measures.
                      Chapter 3--National Programs

Sec. 441. National Institute for Literacy.
Sec. 442. National leadership activities.
    Subtitle B--Library Services and Technology Consolidation Grant

Sec. 451. Purposes.
Sec. 452. Authorization of appropriations.
Sec. 453. Allotments.
Sec. 454. Grants to States.
Sec. 455. Uses of funds.
Sec. 456. Annual applications.
           TITLE V--AMENDMENTS TO REHABILITATION ACT OF 1973

       Subtitle A--Vocational Rehabilitation Consolidation Grant

                      Chapter 1--Transition Period

Sec. 501. Transition.
      Chapter 2--Revision Of Title I of Rehabilitation Act of 1973

Sec. 511. Revision of title I.
       Subtitle B--Other Amendments to Rehabilitation Act of 1973

Sec. 521. Training and demonstration projects.
Sec. 522. Employment opportunities for individuals with disabilities.
Sec. 523. Certain amounts.
                TITLE VI--HIGHER EDUCATION PRIVATIZATION

Sec. 601. Reorganization of the Student Loan Marketing Association 
                            through the formation of a holding company.
Sec. 602. Privatization of College Construction Loan Insurance 
                            Association.
               TITLE VII--REPEALERS AND OTHER AMENDMENTS

Sec. 701. Higher education provisions.
Sec. 702. Amendment to Higher Education Act.
Sec. 703. Carl D. Perkins Vocational and Applied Technology Education 
                            Act. 
Sec. 704. Smith-Hughes Act.
Sec. 705. School-to-Work Opportunities Act of 1994.
Sec. 706. School Dropout Assistance Act.
Sec. 707. Adult Education Act.
Sec. 708. National Literacy Act.
Sec. 709. Library Services and Construction Act.
Sec. 710. Technology for Education Act of 1994.
Sec. 711. Job Training Partnership Act.
Sec. 712. Stewart B. Mckinney Homeless Assistance Act.
Sec. 713. Effective date.
SEC. 3. PURPOSE.

    The purpose of this Act is to transform the vast array of Federal 
workforce development and literacy programs from a collection of 
fragmented and duplicative categorical programs into a streamlined, 
comprehensive, coherent, high-quality, cost-effective, market-based, 
and accountable workforce development and literacy system that is 
designed to meet the education, economic, employment, and training 
needs of the workforce and the competitiveness needs of employers of 
the United States, both today and in the future.

SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated--
            (1) for title II, $2,324,600,000 for fiscal year 1997 and 
        such sums as may be necessary for each of the fiscal years 1998 
        through 2002 to carry out the programs under such title;
            (2) for title III, $2,183,000,000 for fiscal year 1997 and 
        such sums as may be necessary for each of the fiscal years 1998 
        through 2002 to carry out the programs under such title; and
            (3) for subtitle A of title IV, $280,000,000 for fiscal 
        year 1997 and such sums as may be necessary for each of the 
        fiscal years 1998 through 2002 to carry out the programs under 
        such subtitle.
    (b) Program Year.--
            (1) In general.--Beginning in fiscal year 1997, and each 
        year thereafter, appropriations for any fiscal year for 
        programs and activities under titles II, III, and IV of this 
        Act shall be available for obligation only on the basis of a 
        program year. The program year shall begin on July 1 in the 
        fiscal year for which the appropriation is made.
            (2) Obligation.--Funds obligated for any program year under 
        titles II, III, and IV, may be expended by each recipient 
        during that program year and the two succeeding program years, 
        except that the Secretary shall, in accordance with paragraph 
        (3), reallot to eligible States the funds allotted to States 
        from funds appropriated for reallotments.
            (3) Amounts available for reallotment.--The amount 
        available for reallotment is equal to--
                    (A) the amount by which the unobligated balance of 
                the State allotment at the end of the program year 
                prior to the program year for which the determination 
                under this section is made exceeds 20 percent of such 
                allotment for the prior program year; plus
                    (B) the unexpended balance of the State allotment 
                from any program year prior to the program year in 
                which there is such excess.

SEC. 5. DEFINITIONS.

    For purposes of this Act, except as otherwise provided:
            (1) Adult.--The term ``adult'' means an individual who is 
        16 years of age, or beyond the age of compulsory school 
        attendance under State law (whichever age is higher), and who 
        is not enrolled or required to be enrolled in secondary school.
            (2) Adult education.--The term ``adult education'' means 
        services or instruction below the postsecondary level for 
        adults--
                    (A) who are not enrolled in secondary school;
                    (B) who lack sufficient mastery of basic 
                educational skills to enable them to function 
                effectively in society or who do not have a certificate 
                of graduation from a school providing secondary 
                education and who have not achieved an equivalent level 
                of education;
                    (C) who are not currently required to be enrolled 
                in school; and
                    (D) whose lack of mastery of basic skills results 
                in an inability to speak, read, or write the English 
                language which constitutes a substantial impairment of 
                their ability to get or retain employment commensurate 
                with their real ability, and thus are in need of 
                programs to help eliminate such inability and raise the 
                level of education of such individuals with a view to 
                making them less likely to become dependent on others.
            (3) Area vocational education school.--The term ``area 
        vocational education school'' means--
                    (A) a specialized high school used exclusively or 
                principally for the provision of vocational education 
                to individuals who are available for study in 
                preparation for entering the labor market;
                    (B) the department of a high school exclusively or 
                principally used for providing vocational education in 
                not less than 5 different occupational fields to 
                individuals who are available for study in preparation 
                for entering the labor market;
                    (C) a technical institute or vocational school used 
                exclusively or principally for the provision of 
                vocational education to individuals who have completed 
                or left high school and who are available for study in 
                preparation for entering the labor market; or
                    (D) the department or division of a junior college, 
                community college or university operating under the 
                policies of the State board and which provides 
                vocational education in not less than 5 different 
                occupational fields leading to immediate employment but 
                not necessarily leading to a baccalaureate degree, if, 
                in the case of a school, department, or division 
                described in subparagraph (C) or this subparagraph, it 
                admits as regular students both individuals who have 
                completed high school and individuals who have left 
                high school.
            (4) At-risk youth.--The term ``at-risk youth'' means--
                    (A) an out-of-school, at-risk youth who is an 
                individual age 24 or younger and who is not enrolled in 
                a secondary or postsecondary education program, has not 
                received a high school diploma or its equivalent and 
                must overcome barriers to employment such as lack of 
                sufficient education or vocational skills, economic 
                disadvantages, disability, or limited English 
                proficiency; or
                    (B) an in-school, at-risk youth who is an 
                individual age 24 or younger who is enrolled in an 
                accredited secondary or postsecondary education program 
                but is at risk of dropping out of school or must 
                overcome barriers to complete an education program, 
                such as economic disadvantages, disability, or limited 
                English proficiency.
            (5) Comprehensive career guidance and counseling.--The term 
        ``comprehensive career guidance and counseling'' means a 
        program--
                    (A) which pertains to the body of subject matter 
                and related techniques and methods organized for the 
                development in individuals of career awareness, career 
                planning, career decisionmaking, placement skills, and 
                knowledge and understanding of local, State, and 
                national occupational, educational, and labor market 
                needs, trends, and opportunities;
                    (B) which assists such individuals in making and 
                implementing informed educational and occupational 
                choices; and
                    (C) which is comprehensive in nature.
            (6) Career grant.--The term ``career grant'' means a 
        voucher or a credit issued to a participant under title III of 
        this Act, or title I of the Rehabilitation Act of 1973, for the 
        purchase of education or training services from certified 
        providers of such services, in accordance with the provisions 
        of this Act, and with guidelines issued by the State.
            (7) Case management.--The term ``case management'' means 
        the provision of a client-centered approach in the delivery of 
        services designed to--
                    (A) empower individuals to make informed career 
                choices;
                    (B) prepare and coordinate comprehensive employment 
                plans, based upon such individual choices, such as 
                service strategies for participants, to ensure access 
                to necessary training and supportive services, using, 
                where feasible, computer-based technologies; and
                    (C) provide job and career counseling during 
                program participation and after job placement.
            (8) Chief elected official.--The term ``chief elected 
        official'' means the chief elected executive officer of a unit 
        of general local government in a workforce development area.
            (9) Community-based organization.--The term ``community-
        based organization'' means a private nonprofit organization 
        that is representative of a community or significant segments 
        of a community that provides or facilitates education, 
        vocational rehabilitation, job training, supportive services, 
        or internship services and programs.
            (10) Demographic characteristics.--The term ``demographic 
        characteristics'' means information on population, especially 
        with reference to size, density, distribution, and vital 
        statistics including, age, race, sex, ethnic origin, and income 
        status.
            (11) Dislocated worker.--The term ``dislocated worker'' 
        means an individual who--
                    (A) has been terminated or laid off or who has 
                received a notice of termination or layoff from 
                employment, is eligible for or has exhausted 
                entitlement to unemployment compensation, and is 
                unlikely to return to a previous industry or 
                occupation;
                    (B) has been terminated, or has received a notice 
                of termination of employment, as a result of any 
                permanent closure of, or any substantial layoff at, a 
                plant, facility, or enterprise;
                    (C) has been unemployed long-term and has limited 
                opportunities for employment or reemployment in the 
                same or a similar occupation in the area in which such 
                individual resides, including an older individual who 
                may have substantial barriers to employment by reason 
                of age; or
                    (D) was self-employed (including farmers and 
                ranchers) but is unemployed as a result of general 
                economic conditions in the community in which they 
                reside or because of natural disasters.
            (12) Displaced homemaker.--The term ``displaced homemaker'' 
        means an individual who--
                    (A) is an adult; and
                    (B)(i) has worked as an adult primarily without 
                remuneration to care for the home and family, and for 
                that reason has diminished marketable skills;
                    (ii) has been dependent on public assistance or on 
                the income of a relative but is no longer supported by 
                such income; or
                    (iii) is a parent whose youngest dependent child 
                will become ineligible to receive assistance under the 
                program for aid to families with dependent children 
                under part A of title IV of the Social Security Act 
                within 2 years of the parent's application for 
                assistance under title II of this Act.
            (13) Earnings.--The term ``earnings'' means gross hourly 
        wages before any deduction, plus the estimated hourly value of 
        bonuses, tips, gratuities, commissions, and overtime pay either 
        expected or received. In the case of individuals in subsidized 
        employment, total hourly earnings include any wage subsidy paid 
        to the individual.
            (14) Economic development agencies.--The term ``economic 
        development agencies'' means State and local planning and 
        zoning commissions or boards, community development agencies, 
        and other State and local agencies and institutions responsible 
        for regulating, promoting, or assisting in State and local 
        economic development.
            (15) Economically disadvantaged.--The term ``economically 
        disadvantaged'' means an individual who--
                    (A) receives, or is a member of a family which 
                receives, cash welfare payments under a Federal, State, 
                or local welfare program;
                    (B) has, or is a member of a family which has, 
                received a total family income for the 6-month period 
                prior to application for the program involved 
                (exclusive of unemployment compensation, child support 
                payments, and welfare payments) which, in relation to 
                family size, was not in excess of the higher of--
                            (i) the official poverty line (as defined 
                        by the Office of Management and Budget, and 
                        revised annually in accordance with section 
                        673(2) of the Omnibus Budget Reconciliation Act 
                        of 1981 (42 U.S.C. 9902(2)), or
                            (ii) 70 percent of the lower living 
                        standard income level;
                    (C) is receiving (or has been determined within the 
                6-month period prior to the application for the program 
                involved to be eligible to receive) food stamps 
                pursuant to the Food Stamp Act of 1977;
                    (D) qualifies as a homeless individual under 
                subsections (a) and (c) of section 103 of the Stewart 
                B. McKinney Homeless Assistance Act;
                    (E) is a foster child on behalf of whom State or 
                local government payments are made;
                    (F) in cases permitted by regulations of the 
                Secretary, is an individual with a disability whose own 
                income meets the requirements of subparagraph (A) or 
                (B), but who is a member of a family whose income does 
                not meet such requirements; or
                    (G) is an individual meeting appropriate criteria 
                approved by a State.
            (16) Educational service agency.--The term ``educational 
        service agency'' means a regional public multiservice agency 
        authorized by State statute to develop, manage, and provide 
        services or programs to local educational agencies, and is 
        recognized as an administrative agency for such State's 
        vocational or technical education schools or for vocational 
        programs within its public elementary or secondary schools. 
        Such term includes any other public institution or agency 
        having administrative control and direction over a public 
        elementary or secondary school.
            (17) Employed.--The term ``employed'' means an individual 
        who is currently--
                    (A) a paid employee;
                    (B) works in his or her own business, profession, 
                or farm;
                    (C) works 15 hours or more per week as an unpaid 
                worker in an enterprise operated by a family member or 
                is one who is not working, but has a job or business 
                from which he or she is temporarily absent due to 
                illness, bad weather, vacation, labor-management 
                dispute, or personal reasons; or
                    (D) on active military duty.
            (18) English literacy program.--The term ``English literacy 
        program'' means a program of instruction designed to help 
        limited English proficient adults, out-of-school youths, or 
        both, achieve full competence in the English language.
            (19) Excess number.--The term ``excess number'' means, with 
        respect to the excess number of unemployed individuals within a 
        State, the number that represents the number of unemployed 
        individuals in excess of 4.5 percent of the civilian labor 
        force in the State, or the number that represents the number of 
        unemployed individuals in excess of 4.5 percent of the civilian 
        labor force in areas of substantial unemployment in such State.
            (20) Family and consumer sciences.--The term ``family and 
        consumer sciences'' means instructional programs, services, and 
        activities which prepare students for personal, family, 
        community, and career roles.
            (21) Governor.--The term ``Governor'' means the chief 
        executive of a State.
            (22) Individual of limited english proficiency.--The term 
        ``individual of limited English proficiency'' means an adult or 
        out-of-school youth who has limited ability in speaking, 
        reading, writing, or understanding the English language and--
                    (A) whose native language is a language other than 
                English; or
                    (B) who lives in a family or community environment 
                where a language other than English is the dominant 
                language.
            (23) Individuals with disabilities.--The term ``individuals 
        with disabilities'' has the meaning given such term in the 
        Rehabilitation Act of 1973.
            (24) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given such 
        term in section 481 of the Higher Education Act of 1965.
            (25) Job search assistance.--The term ``job search 
        assistance'' means a service that helps a job-ready individual 
        seek, locate, apply for, and obtain employment. Such services 
        may include, job-finding skills, orientation to the labor 
        market, resume preparation assistance, job finding clubs, job 
        search workshops, vocational exploration, and other 
        employability services.
            (26) Labor market area.--The term ``labor market area'' 
        means an economically integrated geographic area within which 
        individuals can reside and find employment within a reasonable 
        distance or can readily change employment without changing 
        their place of residence. Such areas shall be identified in 
        accordance with criteria used by the Bureau of Labor Statistics 
        of the Department of Labor in defining such areas or similar 
        criteria established by a Governor.
            (27) Library.--The term ``library'' includes--
                    (A) a public library;
                    (B) a public elementary or secondary school 
                library;
                    (C) an academic library;
                    (D) a research library; and
                    (E) a private library, but only if the State in 
                which such private library is located determines that 
                the library should be considered a library for purposes 
                of this Act.
            (28) Literacy.--The term ``literacy'' means an individual's 
        ability to read, write, and speak in English, and compute and 
        solve problems, at levels of proficiency necessary--
                    (A) to function on the job, in the individual's 
                family and in society;
                    (B) to achieve the individual's goals; and
                    (C) to develop the individual's knowledge 
                potential.
            (29) Local educational agency.--The term ``local 
        educational agency'' has the same meaning given such term in 
        section 14101 of the Elementary and Secondary Education Act of 
        1965.
            (30) Migrant farmworker.--The term ``migrant farmworker'' 
        means a seasonal farmworker whose farm work requires travel 
        such that the worker is unable to return to a permanent place 
        of residence within the same day.
            (31) Native american.--The term ``native American'' means 
        Indians, Alaskan natives, and Hawaiian natives.
            (32) Nontraditional employment.--The term ``nontraditional 
        employment'' as applied to women refers to occupations or 
        fields of work where women comprise less than 25 percent of the 
        individuals employed in such occupation or field of work.
            (33) On-the-job training.--The term ``on-the-job training'' 
        means training in the public or private sector that is provided 
        to a paid employee while engaged in productive work that--
                    (A) provides knowledge or skills essential to the 
                full and adequate performance of the job;
                    (B) provides reimbursement to employers, up to 50 
                percent of the participant's wage rate, for the 
                extraordinary costs of providing training and 
                additional supervision; and
                    (C) is based on the Occupational Employment 
                Statistics Program Dictionary.
            (34) Postsecondary educational institution.--The term 
        ``postsecondary educational institution'' means an institution 
        of higher education (as such term is defined in section 481 of 
        the Higher Education Act of 1965) which continues to meet the 
        eligibility and certification requirements under title IV of 
        such Act (20 U.S.C. 1070 et seq.).
            (35) Preemployment skills training; job readiness skills 
        training.--The terms ``preemployment skills training'' and 
        ``job readiness skills training'' mean training that builds on 
        family efforts to help prepare individuals for work by assuring 
        that they are familiar with general workplace expectations and 
        exhibit work behavior and attitudes necessary to compete 
        successfully in the job market.
            (36) Public assistance.--The term ``public assistance'' 
        means Federal, State, or local government cash payments for 
        which eligibility is determined by a needs or income test.
            (37) Rapid response.--The term ``rapid response'' means 
        assistance that is directly provided by the State, or by local 
        grantees with funds provided by the State, in the case of mass 
        layoffs or plant closures, and that establishes on-site contact 
        with employer and employee representatives within a short 
        period of time (preferably 48 hours or less) after becoming 
        aware of a current or projected permanent closure or 
        substantial layoff in order to--
                    (A) provide information on, and facilitate access 
                to, available public programs and services for workers 
                losing jobs as a result of such layoff or closure;
                    (B) provide emergency assistance adapted to the 
                particular closure or layoff;
                    (C) promote the formation of labor-management 
                committees, where appropriate;
                    (D) collect information related to economic 
                dislocation and available resources within the State 
                for dislocated workers;
                    (E) provide or obtain appropriate financial and 
                technical advice and liaison with economic development 
                agencies and other organizations to assist in efforts 
                to avert worker dislocation; and
                    (F) assist the local community in developing its 
                own coordinated response and in obtaining access to 
                State economic development assistance.
            (38) Registered apprenticeship.--The term ``registered 
        apprenticeship'' means a program registered by the Bureau of 
        Apprenticeship and Training in the United States Department of 
        Labor, or a State Apprenticeship Agency recognized and approved 
        by the Bureau of Apprenticeship and Training as the appropriate 
        body for State registration or approval of local apprenticeship 
        programs and agreements.
            (39) School dropout.--The term ``school dropout'' means a 
        youth who is no longer attending any school and who has not 
        received a secondary school diploma or a certificate from a 
        program of equivalency for such a diploma.
            (40) Seasonal farmworker.--The term ``seasonal farmworker'' 
        means a person who during the eligibility determination period 
        (12 consecutive months out of 24 months prior to application) 
        has been primarily employed in farm work that is characterized 
        by chronic unemployment or under employment.
            (41) Skill certificate.--The term ``skill certificate'' 
        means a portable, industry-recognized credential achieved 
        through programs authorized under this Act, that certifies that 
        an individual has mastered occupational skills at levels that 
        are at least as challenging as skill standards endorsed by the 
        National Skill Standards Board, except that until such skill 
        standards are developed, the term ``skill certificate'' means a 
        credential issued under a process endorsed by the State, based 
        upon established industry standards and benchmarks.
            (42) 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.
            (43) State educational agency.--The term ``State 
        educational agency'' has the meaning given such term in section 
        14101 of the Elementary and Secondary Education Act of 1965.
            (44) State library administrative agency.--The term ``State 
        library administrative agency'' means the official agency of a 
        State charged by the law of the State with the extension and 
        development of public library services throughout the State.
            (45) Supportive services.--The term ``supportive services'' 
        means services which are necessary to enable an individual 
        eligible for training under this Act, but who cannot afford to 
        pay for such services, to participate in a training or 
        vocational rehabilitation program or job search activities 
        funded under this Act. Such supportive services may include 
        transportation, individual and family counseling, child care 
        and dependent care, meals, temporary shelter, financial 
        counseling, needs-based payments, and other reasonable expenses 
        required for participation in a training, job preparation, or 
        job placement program. Such services may be provided in-kind or 
        through cash assistance, except that such services will be 
        provided with funds provided under this Act only after 
        alternative funding sources specifically designated for such 
        services have been exhausted.
            (46) Unemployed.--The term ``unemployed'' refers to an 
        individual who is not employed, who is available for work, and 
        who has made specific efforts to find a job within the prior 4 
        weeks. Included as unemployed are individuals who are not 
        working, are available for work, and are waiting to be called 
        back to a job from which they have been laid off.
            (47) Unit of general local government.--The term ``unit of 
        general local government'' means any general purpose political 
        subdivision of a State which has the power to levy taxes and 
        spend funds, as well as general corporate and police powers.
            (48) Veteran.--The term ``veteran'' has the meaning given 
        such term in section 101(2) of title 38, United States Code.
            (49) Work experience.--The term ``work experience'' means a 
        time-limited work activity that provides an individual with the 
        opportunity to acquire the general skills and knowledge 
        necessary to obtain employment.
            (50) Workplace mentor.--The term ``workplace mentor'' means 
        an employee or other individual, approved by the employer at a 
        workplace, who possesses the skills and knowledge to be 
        mastered by a student or program participant, and who 
        instructs, critiques the performance, and challenges the 
        student or program participant to perform well, and works in 
        consultation with classroom teachers, training providers, 
        parents, and the employer of the student or program 
        participant.
            (51) Youth.--The term ``youth'' means an individual under 
        the age of 24.

SEC. 6. TRANSITION.

    The Secretary of Education and the Secretary of Labor shall take 
such steps as they determine to be appropriate to provide for the 
orderly transition from any authority under provisions of statutes 
amended or repealed by this Act or any related authority under 
provisions of this Act.

             TITLE I--WORKFORCE DEVELOPMENT INFRASTRUCTURE

SEC. 101. PURPOSE OF TITLE.

    The purpose of this title is to provide for the establishment of an 
infrastructure within States on which to build a comprehensive system 
of workforce development and literacy.

              Subtitle A--State and Local Responsibilities

SEC. 102. STATE REQUIREMENTS.

    (a) In General.--For fiscal year 1997 and subsequent fiscal years, 
a State that desires to receive a grant under one or more of the 
programs specified in subsection (b) shall--
            (1) establish a collaborative process, pursuant to section 
        103;
            (2) develop a State workforce development and literacy 
        plan, pursuant to section 104; and
            (3) otherwise comply with the requirements of this Act.
    (b) Workforce Development and Literacy Programs.--
            (1) In general.--The programs referred to in subsection (a) 
        are the following:
                    (A) The program under title II, the Youth 
                Development and Career Preparation Consolidation Grant.
                    (B) The program under title III, the Adult 
                Employment and Training Consolidation Grant.
                    (C) The program under subtitle A of title IV, the 
                Adult Education and Family Literacy Consolidation 
                Grant.
                    (D) The program amended by subtitle A of title V 
                (relating to title I of the Rehabilitation Act of 
                1973).
            (2) Definition.--For purposes of this Act, the term 
        ``Workforce Development and Literacy programs'' means the 
        programs specified in paragraph (1).

SEC. 103. COLLABORATIVE PROCESS REGARDING STATE SYSTEM.

    (a) In General.--The Governor of a State that desires to receive a 
grant under one or more of the programs specified in section 102(b) 
shall certify to the Secretary of Education and the Secretary of Labor 
that a collaborative process, as described in subsection (b) or (c), 
has been used in complying with the applicable provisions of this Act.
    (b) Collaborative Process.--The collaborative process referred to 
in subsection (a) is a process for making decisions which includes as 
participants, at a minimum, the Governor and--
            (1) representatives of (which representatives are appointed 
        by the Governor)--
                    (A) business and industry;
                    (B) local chief elected officials (representing 
                both cities and counties);
                    (C) local educational agencies (including 
                vocational educators);
                    (D) postsecondary institutions (including community 
                and technical colleges);
                    (E) the State rehabilitation advisory council;
                    (F) organizations representing individuals served 
                by programs established under this Act (including 
                community-based organizations);
                    (G) employees;
                    (H) parents or organizations representing parents; 
                and
                    (I) providers of workforce development services 
                (including private-for-profit sector providers); and
            (2) the lead State agency official or officials for--
                    (A) the State educational agency or agencies 
                (including the lead official or officials for 
                vocational education, adult education and literacy, and 
                libraries);
                    (B) the State agency responsible for economic 
                development;
                    (C) the State agency or agencies responsible for 
                employment security and for job training;
                    (D) the State agency responsible for postsecondary 
                education;
                    (E) the State agency responsible for vocational 
                rehabilitation, and where applicable, the State agency 
                providing vocational rehabilitation services for the 
                blind;
                    (F) the State agency responsible for administering 
                welfare benefits; and
                    (G) the representative of the Veterans' Service 
                assigned to the State under section 4103 of title 38, 
                United States Code.
    (c) Rule of Construction.--With respect to compliance with 
subsection (b)--
            (1) a State may use any existing State process (including 
        any council or similar entity) that substantially meets the 
        purposes of such subsection; or
            (2) if prior to the date of enactment of this Act, a State 
        has developed a one-stop career center system or a school-to-
        work system through a collaborative process substantially 
        similar to the process described in subsection (b), the State 
        may use such process.
    (d) Authority of Governor.--
            (1) Final authority.--If, after a reasonable effort, a 
        Governor is unable to obtain agreement through the 
        collaborative process described in subsection (b) or (c), the 
        Governor shall have final authority to make decisions and to 
        submit the State plan as described under section 104.
            (2) Exception.--Nothing in this Act shall be construed to 
        negate or supersede the legal authority, under State law of any 
        State agency, State entity, or State public official over 
        programs that are under the jurisdiction of the agency, entity, 
        or official. Nothing in this Act shall be construed to 
        interfere with the authority of such agency, entity, or 
        official to enter into a contract under any provision of law.

SEC. 104. CONSOLIDATED STATE WORKFORCE DEVELOPMENT AND LITERACY PLAN.

    (a) In General.--The Governor of a State that desires to receive a 
grant under one or more of the programs specified in section 102(b) 
shall submit a strategic State workforce development and literacy plan 
that provides policy guidance with respect to workforce development 
programs operated in the State, and that meets the requirements of this 
section to the Secretary of Education and the Secretary of Labor.
    (b) Contents.--A State workforce development and literacy plan 
shall include the following:
            (1) A description of the collaborative process under 
        section 103 used in developing the plan.
            (2) A statement of the goals of the State workforce 
        development and literacy system, that includes--
                    (A) a description of how the State will progress 
                toward achieving the goals and purpose of this Act as 
                established in sections 3(a)(5) and 3(b);
                    (B) an assessment of the needs of the State with 
                regard to current and projected demands for workers by 
                occupation, the skills and education levels of the 
                workforce, the vocational rehabilitation needs of 
                individuals with severe disabilities residing in the 
                State, the skill and economic development needs of the 
                State, and an assessment of the type and availability 
                of youth development and career preparation, workforce 
                development, adult education, vocational 
                rehabilitation, and literacy programs and services in 
                the State; and
                    (C) the identification of progress indicators, 
                based on the core indicators of performance described 
                in section 110(f), built upon a model of continuous 
                improvement, that the State will use to measure 
                progress made by the State, local workforce development 
                boards, and other applicable local entities who are 
                recipients of financial assistance under this Act in 
                meeting such goals;
            (3) A description of how the State has complied, or will 
        comply, with the provisions of sections 105 through 108.
            (4) A description of how a State will participate in the 
        national labor market information system under title II of the 
        Wagner-Peyser Act, as added by section 132 of this Act.
            (5) Any information required to be included in the plan 
        under any of titles II through IV, and title I of the 
        Rehabilitation Act of 1973 (in the case of a State that desires 
        to receive a grant under any such title).
            (6) A description of the measures that will be taken by the 
        State to ensure coordination and consistency and avoid 
        duplication among programs receiving assistance under this Act, 
        including a description of common data collection and reporting 
        processes.
            (7) A description of the process used by the State to 
        provide an opportunity for public comment, and input into the 
        development of the plan, prior to submission of the plan.
            (8) A description of the process used by the State to 
        consult with representatives of business and industry with 
        respect to the requirements of subparagraphs (A), (B), and (C) 
        of paragraph (2) of this subsection.
            (9) Assurances that the State will provide for fiscal 
        control and fund accounting procedures that may be necessary to 
        ensure the proper disbursement of, and accounting for, funds 
        paid to the State under this Act.
            (10) A description of the sanctions which the State may 
        impose (including restrictions from future participation or 
        consideration for funding) in instances where recipients of 
        funds under this Act fail to achieve agreed upon expected 
        performance levels, fail to adhere to State mandated fiscal 
        control and funds accounting procedures, or take or fail to 
        take other actions required under the State plan, contracts, or 
        other agreements.
    (c) Disagreement.--The Governor shall accept and include with the 
plan submitted under subsection (a) any disagreeing views submitted by 
a participant of the collaborative process if such views represent 
disagreement in the area in which such participant was selected for 
representation.
    (d) Modifications to Plan.--A plan submitted by a State in 
accordance with this section remains in effect until the State submits 
to the Secretary such modifications as the State determines necessary. 
This section applies to the modifications to the same extent and in the 
same manner as this section applies to the original plan.

SEC. 105. ESTABLISHMENT OF WORKFORCE DEVELOPMENT AREAS.

    The Governor of a State that desires to receive a grant under one 
or more of the programs specified in section 102(b) shall, through the 
collaborative process established under section 103 and after 
consultation with local
 chief elected officials, and after consideration of comments received 
through the public participation process as described in the State 
plan, designate local workforce development areas within the State 
taking into consideration the following:
            (1) Existing labor market areas.
            (2) Units of general local government.
            (3) Geographic areas served by local educational agencies 
        and intermediate educational agencies.
            (4) Geographic areas served by postsecondary institutions 
        and area vocational education schools.
            (5) Service delivery areas established under section 101 of 
        the Job Training Partnership Act (29 U.S.C. 1511) (as such Act 
        was in effect on the day before the date of the enactment of 
        this Act).
            (6) The distance that individuals will need to travel to 
        receive services from integrated career centers.

SEC. 106. PROVISIONS REGARDING LOCAL WORKFORCE DEVELOPMENT BOARDS.

    (a) In General.--The Governor of a State that desires to receive a 
grant under one or more of the programs specified in section 102(b) 
shall ensure the establishment of a local workforce development board 
in each local workforce development area within the State.
    (b) State Criteria.--The Governor, through the collaborative 
process described under section 103, is authorized to establish 
criteria for use by local chief elected officials in the workforce 
development area, in the selection of members of local workforce 
development boards, in accordance with requirements prescribed under 
subsections (c) and (d).
    (c) Representation Requirement.--Such criteria shall require, at a 
minimum, that a local workforce development board consist of--
            (1) a majority of members who are representatives of 
        business and industry, including individuals who are owners of 
        businesses, chief executives or chief operating officers of 
        private business, and other business executives with optimum 
        policymaking authority in local businesses, selected from among 
        nominees submitted by local business organizations and trade 
        associations;
            (2) an individual or individuals with disabilities, who 
        have special knowledge or expertise in the area of vocational 
        rehabilitation;
            (3) representatives of education and training, including 
        local educational agencies, postsecondary education 
        institutions, and providers of job training and workforce 
        development services, selected from among individuals nominated 
        by regional or local educational agencies, vocational education 
        institutions, institutions of postsecondary education 
        (including community colleges), providers of job training and 
        workforce development services (including private-for-profit 
        providers), within the workforce development area; and
            (4) representatives of community-based organizations, 
        employees, and veterans as nominated or recommended to the 
        board through a process established by the Governors through 
        the collaborative process.
    (d) Establishment of Board.--
            (1) Selection of board members.--
                    (A) Single unit of local government in area.--In 
                the case of a workforce development area that is 
                comprised of only one unit of general local government, 
                the chief elected official of such unit is authorized 
                to select the members of the local workforce 
                development board for such area, in accordance with the 
                State criteria developed pursuant to subsection (b).
                    (B) Multiple units in area.--In the case of a 
                workforce development area that is comprised of more 
                than one unit of general local government, the chief 
                elected officials of such units are authorized to 
                select the members of the local workforce development 
                board from the individuals so nominated or recommended 
                for such area in accordance with an agreement entered 
                into by such officials and with the State criteria 
                developed under subsection (b). In the absence of such 
                an agreement, the appointments are authorized to be 
                made by the Governor, through the collaborative 
                process, from the individuals so nominated or 
                recommended.
            (2) Certification.--The Governor is authorized to 
        biennially certify one local workforce development board for 
        each workforce development area.
            (3) Exception.--In any case in which a local workforce 
        development area is a State, the individuals comprising the 
        Governor's collaborative process as described in section 103, 
        may be reconstituted to meet the requirements of this section.
    (e) Duties of Local Workforce Development Board.--
            (1) Local workforce development plan.--Each local workforce 
        development board shall develop a biennial strategic plan and 
        provide policy guidance with respect to workforce development 
        programs operated within their respective workforce development 
        areas. Such strategic plan shall be consistent with the State's 
        collaborative workforce development and literacy plan, be 
        approved by the appropriate chief elected official or 
        officials, and be submitted to the Governor for approval. If 
        after a reasonable effort, a local workforce development board 
        is unable to obtain the approval of the chief elected official 
        or officials, the Board has the authority to forward the plan, 
        with the comments of the chief elected official or officials, 
        to the Governor for final approval or disapproval. Such local 
        plan shall include the following:
                    (A) Both short-term and long-term goals, and 
                related strategies, to ensure that workforce 
                preparation and development programs, including 
                programs established pursuant to this Act, title I of 
                the Rehabilitation Act of 1973, and the Wagner-Peyser 
                Act, contribute to a coherent workforce development 
                system in the workforce development area.
                    (B) A description of the performance measures to be 
                used by the local workforce development board for 
                measuring the performance of local service providers 
                under chapter 2 of title II, title III, and title I of 
                the Rehabilitation Act of 1973, and the performance of 
                integrated career center system operators, with whom 
                the Board contracts.
                    (C) A description of the local integrated career 
                center system to be established in the workforce 
                development area, including--
                            (i) a description of the process the local 
                        workforce development board will use to 
                        designate or establish a career center system 
                        which ensures that the most effective and 
                        efficient service providers are chosen;
                            (ii) an identification of the roles of 
                        individual workforce development programs and 
                        programs authorized by the Wagner-Peyser Act; 
                        and
                            (iii) a description of the funding sources 
                        to be used in the operation of the career 
                        center system.
                    (D) A description of strategies the local workforce 
                development board will undertake to fully involve local 
                employers, local educational agencies, postsecondary 
                education institutions, adult education and literacy 
                providers, local service providers, parents and other 
                consumers, including individuals with disabilities, and 
                older workers in the development of the workforce 
                development system.
                    (E) Such other information as requested by the 
                State.
            (2) Identification of occupations in demand and training 
        needs.--The local workforce development board shall use 
        available labor market information and other appropriate 
        methods in order to identify and assess the needs of the 
        workforce development area.
            (3) Budget and program oversight.--
                    (A) Budgeting.--
                            (i) The local workforce development board, 
                        working through the State administrative agent, 
                        shall develop a budget for the purpose of 
                        carrying out local programs established under 
                        chapter 2 of title II, title III, and title I 
                        of the Rehabilitation Act of 1973, and for 
                        integrated career center systems established or 
                        designated under section 107 with the exception 
                        of funds made available under the Wagner-Peyser 
                        Act.
                            (ii) Such budget shall be subject to the 
                        approval of the appropriate chief elected 
                        official or officials in the workforce 
                        development area.
                    (B) Program oversight.--The local workforce 
                development board, in partnership with the chief 
                elected official or officials in the workforce 
                development area, shall conduct oversight of the 
                workforce development programs listed in subparagraph 
                (A), and of the integrated career center system 
                established under this title.
            (4) Administration.--
                    (A) Fiscal agent.--
                            (i) The local workforce development board 
                        may receive and disburse funds made available 
                        for carrying out programs authorized under 
                        chapter 2 of title II, title III, and title I 
                        of the Rehabilitation Act of 1973 of this Act, 
                        or the local workforce development board may 
                        designate a fiscal agent (which may include the 
                        State through a mutual agreement between the 
                        local board and the State), for the purpose of 
                        disbursement of funds to career centers and 
                        other service providers, as designated by the 
                        local workforce development board.
                            (ii) The Board may employ its own staff, 
                        independent of local programs and service 
                        providers, and may solicit or accept grants and 
                        contributions from sources other than from this 
                        Act.
                    (B) Limitation.--The workforce development board, 
                or employees of such board, may not operate programs 
                established under this Act. The Governor is authorized 
                to prohibit the employees of agencies providing staff 
                support to such local workforce development boards from 
                providing workforce development services to individuals 
                served through the use of funds authorized under this 
                Act, and under title I of the Rehabilitation Act of 
                1973.
                    (C) Conflict of interest.--A member of a workforce 
                development board may not--
                            (i) discuss or participate in board 
                        consideration; or
                            (ii) cast a vote;
                regarding the provision of services by such member (or 
                by an organization that such member represents) or 
                regarding any matter that would provide direct 
                financial benefit to such member. The Governor may 
                enforce more rigorous conflict of interest standards, 
                as determined appropriate.
                    (D) Independent authority.--
                            (i) The Board shall elect its own 
                        chairperson from among the members of the 
                        board.
                            (ii) The board may adopt bylaws and other 
                        operating procedures as consistent with the 
                        purposes of this Act, and with the policies 
                        established in the State workforce development 
                        and literacy plan.
            (5) Other.--The Governor may require local workforce 
        development boards to carry out such other duties as determined 
        to be appropriate by the Governor and the individuals and 
        entities described in section 103, through the collaborative 
        process described in the State plan.

SEC. 107. ESTABLISHMENT OF INTEGRATED CAREER CENTER SYSTEMS.

    (a) In General.--The Governor of a State that desires to receive a 
grant under one or more of the programs specified in section 102(b) 
shall ensure that each local workforce development board establish or 
designate an integrated career center system in the workforce 
development area of such board, consistent with criteria established 
under subsection (b).
    (b) State Criteria.--The Governor, through the collaborative 
process described under section 103, is authorized to establish 
statewide criteria for use by local workforce development boards in the 
designation or establishment of integrated career center systems to 
ensure that the most effective and efficient service providers are 
chosen, consistent with the requirements prescribed under subsection 
(c).
    (c) Integrated Career Center System Requirements.--At a minimum, 
integrated career center systems shall include--
            (1) common intake;
            (2) preliminary assessment;
            (3) integrated job search assistance;
            (4) to the extent practicable, as determined by the 
        Governor, unified and linked computer systems, including the 
        availability of labor market information as described under 
        title II of the Wagner-Peyser Act, as added by section 132 of 
        this Act, and linkages through uniform management information 
        systems; and
            (5) to the extent practicable, as determined by the 
        Governor, at least one physical, co-located site which provides 
        comprehensive and fully integrated workforce development 
        services to any individual seeking such services.
Local workforce development areas are encouraged to establish a network 
of comprehensive and fully-integrated co-located career centers to 
provide the services described in subsection (f), supplemented with 
multiple affiliated sites or satellites that provide one or more of 
such services and are linked through electronic and technological 
access points. Such affiliated sites may include entities designated as 
having a specialization in addressing special needs, such as the needs 
of individuals with disabilities.
    (d) Common Access.--Information pertaining to the labor market 
which is compiled pursuant to title II of the Wagner-Peyser Act, as 
added by section 132 of this Act, shall be available, to the extent 
practicable, through integrated electronic networks, at all integrated 
career centers and affiliated sites.
    (e) Eligibility for Designation.--Any entity or consortium of 
entities located in the workforce development area may be designated by 
the local workforce development board to operate an integrated career 
center or to participate in an integrated career center system. Such 
entities may include the following:
            (1) Institutions of higher education.
            (2) Area vocational education schools.
            (3) Local employment service offices, established under the 
        Wagner-Peyser Act.
            (4) Private nonprofit organizations, (including community-
        based organizations).
            (5) Private for-profit entities.
            (6) Agencies of local governments.
            (7) Other interested organizations and entities of 
        demonstrated effectiveness, including local chambers of 
        commerce and other business organizations, consistent with 
        State criteria established pursuant to subsection (b).
    (f) Duties.--Each integrated career center system shall, to the 
extent practicable as determined by the Governor, carry out the 
following duties:
            (1) Provision of core services.--An integrated career 
        center system shall make available the following information 
        and core services to individuals on a universal and 
        nondiscriminatory basis, with reasonable accommodations to 
        address the needs of individuals with disabilities, in the 
        workforce development area in which such center is located:
                    (A) Outreach and intake for services provided under 
                chapter 2 of title II, title III, subtitle A of title 
                IV, and title I of the Rehabilitation Act of 1973.
                    (B) A preliminary assessment of the skill levels 
                and the need for services of the individual for 
                programs under chapter 2 of title II, title III, 
                subtitle A of title IV, and title I of the 
                Rehabilitation Act of 1973 of individuals, which may 
                include such factors as basic skills, occupational 
                skills, career development skills, prior work 
                experience, employability, interests, aptitudes, 
                vocational rehabilitation needs, and supportive service 
                needs.
                    (C) Labor market information relating to local and 
                State, and if appropriate, to regional or national, 
                occupations in demand and skill requirements for such 
                occupations, including job listings for the local labor 
                market.
                    (D) Information relating to youth services, 
                including information on at-risk youth development and 
                career preparation programs authorized under title II, 
                on vocational education and school-to-work 
                opportunities, and on youth apprenticeship 
                opportunities.
                    (E) Career counseling and career planning based on 
                a preliminary assessment of the individual.
                    (F) Job search assistance.
                    (G) Information related to vocational 
                rehabilitation services, as provided for in title I of 
                the Rehabilitation Act of 1973.
                    (H) Information relating to federally funded 
                education and job training programs (including 
                registered apprenticeships), and student aid programs, 
                including the eligibility requirements of and services 
                provided by such programs.
                    (I) Information on, and assistance in accessing 
                referral to additional services through programs 
                providing adult education and literacy services, 
                vocational rehabilitation, youth and adult workforce 
                preparation and development, and supportive services, 
                including those programs authorized in titles II 
                through IV, title I of the Rehabilitation Act of 1973, 
                available in the workforce development area.
                    (J) Information on the extent to which the services 
                provided under titles II and III, subtitle A of title 
                IV, and title I of the Rehabilitation Act of 1973, meet 
                or exceed the expected levels of performance described 
                in the State and local plans, and the performance-based 
                information provided by the State to local workforce 
                development boards on certified providers of education 
                and training, as required under section 108(d)(3).
                    (K) Acceptance of applications for unemployment 
                compensation.
                    (L) Other appropriate activities to assist 
                individuals into employment.
            (2) Distribution of career grants.--A center or an 
        affiliated site may serve as the point of
         distribution of career grants for education, training, and 
vocational rehabilitation services to eligible individuals in 
accordance with section 108.
            (3) Special arrangements.--For the purpose of providing 
        core services to individuals with severe disabilities in the 
        most effective and efficient manner possible, the integrated 
        career center system may arrange to have such core services 
        provided to an individual by a certified provider or the State 
        either on a contract basis or through the use of career grants.
    (g) Additional Services.--Integrated career center systems, may 
provide customized workforce development services to employers on a 
fee-for-service basis, as determined by the local workforce development 
board.
    (h) Alternative State Strategy.--Through the collaborative process 
described in section 103, the Governor has the authority to develop 
alternative strategies to the integrated career center system, which 
are designed to accomplish the full integration of workforce 
development programs. These alternative strategies shall be described 
in a proposal to the Secretaries of Education and Labor for joint 
review and approval or disapproval not later than 60 days after the 
date of receipt of such proposal.

SEC. 108. IDENTIFICATION OF ELIGIBLE EDUCATION, TRAINING, AND 
              VOCATIONAL REHABILITATION SERVICE PROVIDERS.

    (a) Eligibility Requirements.--A program offered by a provider of 
education and training services shall be eligible to receive funds 
under title III, and title I of the Rehabilitation Act of 1973 through 
the receipt of career grants, or through contract, if such program and 
provider--
            (1) is either--
                    (A) eligible to participate in title IV of the 
                Higher Education Act of 1965, or
                    (B) determined to be eligible under the procedures 
                described in subsection (b); and
            (2) provides the performance-based information required 
        pursuant to subsection (c), except that providers eligible 
        under subparagraph (A) only have to provide information for 
        programs other than programs leading to a degree.
    (b) Alternative Eligibility Procedure.--
            (1) In general.--The Governor shall establish an 
        alternative eligibility procedure for providers of education, 
        training, and vocational rehabilitation services (which may 
        include private sector, for profit and nonprofit providers of 
        such services) in any State desiring to receive funds under 
        title III of this Act and title I of the Rehabilitation Act of 
        1973, but that are not eligible to participate in title IV of 
        the Higher Education Act of 1965. Such procedure shall 
        establish minimum acceptable levels of performance for such 
        providers, and be based on guidelines developed by the 
        Secretaries of Labor and Education. The Governor may utilize 
        such criteria to certify service providers as having the 
        ability to meet occupational skill standards promoted by the 
        National Skill Standards Board, or to meet, high, industry-
        recognized standards that result in a portable skill 
        certificate in the subject, occupation, or industry for which 
        training is provided, except where such standards are not 
        appropriate for the services rendered. The Governor shall 
        utilize the local workforce development boards, for the 
        identification of eligible qualified providers of education, 
        training, and vocational rehabilitation services. During a 
        transition period, not to exceed 2 years, identification of 
        eligible programs and providers under this subsection may be 
        based on the performance of such programs and providers under 
        the Job Training Partnership Act, the Rehabilitation Act of 
        1973, or other objective measures of previous performance, such 
        as employer evaluations.
            (2) Notwithstanding paragraph (1), if the participation of 
        an institution of higher education in any of the programs under 
        such title of such Act is terminated, such institution shall 
        not be eligible to receive funds under this Act for a period of 
        not less than two years.
    (c) Performance-Based Information.--The State shall identify 
performance-based information that is to be submitted by providers of 
services for programs to be eligible under this section. Such 
information may include information, relating to--
            (1) the percentage of students completing the programs 
        conducted by the provider;
            (2) the rates of licensure of graduates of the programs 
        conducted by the provider;
            (3) the percentage of graduates of the programs meeting 
        industry-recognized skill standards and certification 
        requirements that are at least as challenging as skill 
        standards endorsed by the National Skill Standards Board, once 
        such standards are available.
            (4) measures of program effectiveness such as the rates of 
        placement and retention in employment, and the earnings of 
        graduates of programs conducted by the provider, employer 
        evaluations of provider services, and adherence to accepted 
        industry quality standards (where available) by such providers;
            (5) the percentage of students who obtained employment in 
        an occupation related to the program conducted by the provider;
            (6) the warranties or guarantees provided by such provider 
        relating to the skill levels or employment to be attained by 
        students;
            (7) other information for providers of services under title 
        I of the Rehabilitation Act of 1973 that reflects the priority 
        of serving individuals with severe disabilities; and
            (8) the percentage of students who, as a result of 
        participation in the program demonstrate significant gains in 
        literacy and basic skills.
    (d) Administration.--
            (1) State agency.--The Governor is authorized to designate 
        a State agency to collect, verify, and disseminate the 
        performance-based information submitted pursuant to subsection 
        (c).
            (2) Application.--A provider of education and training 
        services that desires to be eligible to receive funds under 
        this title shall submit the information required under 
        subsection (c) to the State agency designated under paragraph 
        (1) of this subsection at such time and in such form as such 
        State agency may require.
            (3) List of eligible providers.--The State agency shall 
        compile a list of eligible programs and providers, accompanied 
        by the performance-based information submitted, and disseminate 
        such list and information to the local workforce development 
        boards and integrated career center systems within the State.
            (4) Accuracy of information.--
                    (A) In general.--If the State agency determines 
                that information concerning a provider is inaccurate, 
                such provider shall be disqualified from receiving 
                funds under this title for a period of not less than 
                two years, unless such provider can demonstrate to the 
                satisfaction of the Governor or his or her designee, 
                that the information was provided in good faith.
                    (B) Appeal.--The Governor shall establish a 
                procedure for a service provider to appeal a 
                determination by a State agency that results in a 
                disqualification under subparagraph (A). Such procedure 
                shall provide an opportunity for a hearing and 
                prescribe appropriate time limits to ensure prompt 
                resolution of the appeal.
            (5) Assistance in developing information.--The State agency 
        established pursuant to paragraph (1) may provide technical 
        assistance to education, training, and vocational 
        rehabilitation providers in developing the information required 
        under subsection (b). Such assistance may include facilitating 
        the utilization of State administrative records, such as 
        unemployment compensation wage records, and other appropriate 
        coordination activities.
    (e) On-The-Job Training Exception.--
            (1) In general.--Providers of on-the-job training are not 
        subject to the requirements of subsections (a), (b), (c), and 
        (d).
            (2) Collection and dissemination of information.--The 
        Workforce Development Board shall collect such performance-
        based information from on-the-job training providers as the 
        Governor may require, and disseminate such information to the 
        local integrated career center systems.
    (f) Rule of Construction Regarding State as Provider of Services.--
This section does not prohibit a State from being a provider of 
education and training services under title III, or under title I of 
the Rehabilitation Act of 1973, subject to the State meeting the 
requirements of this section for serving as such a provider.

SEC. 109. MANAGEMENT INFORMATION SYSTEMS.

    (a) In General.--Each State is authorized to use a portion of the 
funds it receives under this Act to design a unified management 
information system that is in accordance with guidelines established 
jointly by the Secretaries in consultation with the Governors.
    (b) Requirements.--Each unified management information system 
shall, to the extent practicable as determined by the Governor--
            (1) be utilized for federally required fiscal reporting and 
        monitoring for each of the programs authorized under this Act;
            (2) be used by all agencies involved in workforce 
        development activities, including integrated career center 
        systems which shall have the capability to track the overall 
        public investments within the State and workforce development 
        areas, and to inform policymakers as to the results being 
        achieved and the demographic characteristics of the individuals 
        served through that investment;
            (3) contain a common structure of financial reporting 
        requirements, fiscal systems and monitoring for all workforce 
        development expenditures included in the workforce development 
        system that shall utilize common data elements and the 
        definitions included in section 5;
            (4) support local efforts to establish workforce 
        development systems, including intake and eligibility 
        determination for all services; and
            (5) contain data on the demographic characteristics on the 
        participants served by programs authorized under this Act, 
        which shall be collected, produced, and published by the 
        Secretaries.
    (c) Privacy.--Nothing in this Act shall violate the provisions of 
the Family Education Rights and Privacy Act under section 444 of the 
General Education Provisions Act and the privacy and confidentiality 
provisions under section 22(b) of title II of the Wagner Peyser Act as 
amended by this Act.

SEC. 110. PERFORMANCE ACCOUNTABILITY SYSTEM.

    (a) In General.--In order to promote high levels of performance and 
to ensure an appropriate return on the Nation's investment in the 
workforce development and literacy system, each State receiving funds 
under this Act shall develop, or have developed, a statewide 
performance accountability system in accordance with the provisions of 
this section.
    (b) Indicators of Performance.--
            (1) In general.--Each State receiving funds under this Act 
        shall identify indicators of performance for each of the 
        programs established under titles II through IV of this Act and 
        title I of the Rehabilitation Act of 1973, consistent with 
        State goals as described in the State plan in accordance with 
        section 104. Such indicators shall, at a minimum, include the 
        core indicators described in subsection (f), and be expressed 
        in an objective, quantifiable, and measurable form. Such 
        indicators may also include post-program surveys measuring 
        customer satisfaction of both employers and program 
        participants.
            (2) Technical definitions of core indicators.--In order to 
        ensure nationwide comparability of performance data, the 
        Secretary of Labor and the Secretary of Education, in 
        collaboration with the States and with representatives of 
        business and industry, employees, educational agencies, service 
        providers, participants, parents and other interested parties, 
        shall promulgate technical definitions of each of the core 
        indicators described in subsection (f), to be used under this 
        Act in measuring performance.
    (c) Expected Levels of Performance.--
            (1) In general.--(A) Each State shall identify the level of 
        performance, consistent with State goals described under 
        section 104, that is expected for local workforce development 
        areas and other applicable local administrative entities under 
        this Act. In determining such levels, the State shall take into 
        account the challenging levels identified under paragraph (2), 
        and initially develop baseline levels of performance upon which 
        the State will measure continuous improvement.
            (B) The Governor, through the collaborative process, may 
        adjust the expected level of performance with respect to each 
        local area taking into account specific economic, demographic, 
        and geographic factors, and the characteristics of the 
        population to be served.
            (2) Challenging levels of performance.--In order to 
        encourage high levels of performance and advance the Nation's 
        competitiveness in the global economy, the Secretary of Labor 
        and the Secretary of Education, in collaboration with the 
        States and with representatives of business and industry, 
        employees, educational agencies, service providers, 
        participants, parents and other interested parties, shall 
        identify challenging levels of performance with respect to 
        appropriate core indicators selected from among the core 
        indicators described in subsection (f). Where applicable, such 
        challenging levels of performance shall reflect industry-
        recognized skill standards.
    (d) Report on Performance.--
            (1) In general.--The State shall report to the Secretary of 
        Labor and the Secretary of Education, the levels of performance 
        achieved by local workforce development areas and other 
        applicable local administrative entities with respect to the 
        indicators identified pursuant to subsection (b)(1) for each 
        program year. The Secretaries shall make such information 
        available to the general public through publication and other 
        appropriate methods, and shall disseminate State-by-State 
        comparisons, and comparisons with other industrialized nations 
        (where appropriate).
            (2) Reporting options.--In the collection and reporting of 
        such data, States are encouraged to utilize administrative 
        reporting data on quarterly earnings, establishment and 
        industry affiliation, and geographic location of employment, 
        such as unemployment insurance wage-data records.
    (e) Consequences for Poor Performance.--
            (1) Criteria.--The Governor, through the collaborative 
        process, is authorized to establish criteria for determining 
        whether local workforce development areas and other applicable 
        local administrative entities have failed to meet expected 
        levels of performance with respect to programs under this Act.
            (2) Consequences for poor performance.--
                    (A) State consequences.--If a State fails to meet 
                expected levels of performance for a program for any 
                program year as established pursuant to subsection (a), 
                the Secretary of Education or the Secretary of Labor, 
                as appropriate to the particular program, may provide 
                technical assistance, including assistance in the 
                development of a performance improvement plan. If such 
                failure continues for a second consecutive year, the 
                appropriate Secretary may reduce by not more than 5 
                percent, the amount of the grant that would (in the 
                absence of this paragraph) be payable to the State 
                under such program for the immediately succeeding 
                program year. Such penalty shall be based on the degree 
                of failure to meet expected levels of performance.
                    (B) Local consequences.--(i) If a local workforce 
                development area, or other applicable local 
                administrative entity, fails to meet expected levels of 
                performance for a program for any program year under 
                the criteria established in paragraph (1), the 
                Governor, through the collaborative process, may 
                provide technical assistance, including the development 
                of a performance improvement plan.
                    (ii) If such failure continues for a second 
                consecutive year, the Governor may take corrective 
                actions, such as the withholding of funds, the 
                redesignation of a local administrative entity, or such 
                other actions as the Governor, through the 
                collaborative process, determines are appropriate, 
                consistent with State law, section 104(c)(3) of this 
                Act, and the requirements of this Act.
    (f) Core Indicators of Performance.--
            (1) Common core indicators for adults.--In addition to the 
        core indicators of performance described in paragraph (2), 
        common core indicators of performance for programs conducted 
        under titles III and IV of this Act, and under title I of the 
        Vocational Rehabilitation Act of 1973 shall be weighted and 
        applied to each of the individual programs, according to the 
        purposes of such titles, and include measures of--
                    (A) placement in unsubsidized employment;
                    (B) retention in unsubsidized employment for not 
                less than 6 months and for not less than 12 months, 
                respectively;
                    (C) increases in earnings, or in earnings in 
                combination with employer-assisted benefits;
                    (D) attainment of industry-recognized occupational 
                skills, including basic workplace competencies and 
                industry-recognized skill standards, which may include 
                the acquisition of a skill certificate in the 
                occupation for which the individual has been prepared;
                    (E) attainment of a high school diploma, a general 
                equivalency diploma, or a certificate of completion of 
                a program authorized under the Rehabilitation Act of 
                1973; and
                    (F) such other measures of performance that the 
                State may wish to collect.
            (2) Additional core indicators for adults.--
                    (A) Adult employment and training programs.--In 
                addition to the common core indicators described in 
                paragraph (1), the core indicators of performance for 
                programs conducted under title III shall include 
                measures of the success of individuals with barriers to 
                employment, including dislocated workers, economically 
                disadvantaged individuals, older workers, individuals 
                with disabilities, displaced homemakers, veterans, and 
                individuals who are basic skills deficient, in 
                achieving performance goals established pursuant to 
                this Act.
                    (B) Adult education and family literacy programs.--
                In addition to the common core indicators described in 
                paragraph (1), the core indicators of performance for 
                programs conducted under title IV shall include 
                measures of--
                            (i) the number of individuals who, as a 
                        result of participation in programs funded 
                        under this Act, demonstrate significant gains 
                        in literacy skills; and
                            (ii) such other measures of performance 
                        that the State may wish to collect, including 
                        measures of the success of family literacy 
                        programs, increased English language skills, 
                        and increased community involvement.
                    (C) Programs established under title i of the 
                rehabilitation act of 1973.--In addition to the common 
                core indicators described in paragraph (1), the core 
                indicators of performance for programs conducted under 
                title I of the Rehabilitation Act of 1973 shall include 
                measures of the success of individuals with severe 
                disabilities, including those individuals determined to 
                have a disability under title II or title XVI of the 
                Social Security Act, in achieving performance goals 
                established pursuant to this Act.
            (3) Core indicators for youth development and career 
        preparation programs.--The core indicators of performance for 
        programs conducted under title II shall include measures of--
                    (A) attainment of challenging State academic 
                standards;
                    (B) attainment of a high school diploma or a 
                general equivalency diploma;
                    (C) attainment of industry-recognized occupational 
                skills, including basic workplace competencies and 
                industry-recognized skill standards, which may include 
                the acquisition of a skill certificate in the 
                occupation for which the individual has been prepared; 
                if such skill certificate is acquired in addition to or 
                in combination with a high school diploma or general 
                equivalency diploma;
                    (D) reduction in school dropout rates;
                    (E) positive results such as placement in 
                postsecondary education or advanced training, military 
                service, employment, or registered apprenticeships;
                    (F) the success of individuals described under 
                section 201(12) in achieving performance goals 
                established pursuant to this Act, including placement 
                in nontraditional training and employment; and
                    (G) such other measures of performance that the 
                State may wish to collect.

SEC. 111. LIMITATION ON FEDERAL REGULATIONS.

    The Secretary of the Department of Labor and the Secretary of the 
Department of Education shall issue regulations under this Act only to 
the extent that such regulations are necessary to ensure that there is 
compliance with the specific requirements of this Act.

SEC. 112. GENERAL PROVISION.

    Nothing in this Act shall mandate that any individual, particularly 
youth served under title II of this Act, be required to choose a 
specific career path or major.
SEC. 113. LIABILITY.

    Expenditures that are disallowed (except in the case of fraud, 
embezzlement, or other criminal activities) under this Act or under 
title I of the Rehabilitation Act of 1973, may be repaid from funds 
allocated under the title for which such disallowance occurs, in 
subsequent program years or fiscal years, as appropriate, after the 
year in which such disallowance occurred. The amount of funds repaid 
should be equal to the amount of funds disallowed.

              Subtitle B--Amendments to Wagner-Peyser Act

SEC. 131. GENERAL PROGRAM REQUIREMENTS.

    (a) Definitions.--Section 2 of the Act of June 6, 1933 (commonly 
known as the ``Wagner-Peyser Act'') (29 U.S.C. 49a) is amended--
            (1) in paragraph (1), by striking ``Job Training 
        Partnership Act'' and inserting ``Consolidated and Reformed 
        Education, Employment, and Rehabilitation Systems Act'';
            (2) in paragraph (2) to read as follows:
            ``(2) the term `local workforce development board' means a 
        local workforce development board established under title I of 
        the Consolidated and Reformed Education, Employment, and 
        Rehabilitation Systems Act;'';
            (3) in paragraph (4) to read as follows:
            ``(4) the term `local workforce development area' means a 
        local workforce development area established under title I of 
        the Consolidated and Reformed Education, Employment, and 
        Rehabilitation Systems Act;'';
            (4) in paragraph (5), by striking the period at the end and 
        inserting a semicolon; and
            (5) by adding at the end the following new paragraphs:
            ``(6) the term `public employment office' means an office 
        which provides employment services to the general public as 
        part of an integrated career center system; and
            ``(7) the term `integrated career center system' means an 
        integrated career center system established under title I of 
        the Consolidated and Reformed Education, Employment, and 
        Rehabilitation Systems Act.''.
    (b) Duties.--Section 3(a) of such Act (29 U.S.C. 49b(a)) is amended 
to read as follows:
    ``(a) The Secretary of Labor shall, pursuant to title II of this 
Act--
            ``(1) assist in the coordination and development of a 
        nationwide system of labor exchange services for the general 
        public;
            ``(2) assist in the development of performance standards, 
        benchmarks, and continuous improvement models for such 
        nationwide system which ensures private sector satisfaction and 
        meets the demands of jobseekers; and
            ``(3) ensure the continued services for individuals 
        receiving unemployment compensation.''.
    (c) Requirements for Receipt of Funds.--Section 4 of such Act (29 
U.S.C. 49c) is amended by striking ``a State shall, through its 
legislature'' and inserting ``the Governor of a State shall, through 
the collaborative process described in title I of the Consolidated and 
Reformed Education, Employment, and Rehabilitation Systems Act''.
    (d) Authorization of Appropriations.--Section 5 of such Act (29 
U.S.C. 49d) is amended by inserting before the period at the end the 
following: ``, of which not less than 25 percent shall be for carrying 
out both section 14 and title II of this Act''.
    (e) Use of Funds Under This Act.--Section 7(c)(2) of such Act (29 
U.S.C. 49f(c)(2)) is amended by striking ``any of the following 
provisions of law'' and all that follows and inserting ``the 
Consolidated and Reformed Education, Employment, and Rehabilitation 
Systems Act.''.
    (f) State Plan.--Section 8 of such Act (29 U.S.C. 49g) is amended--
            (1) in subsection (a) to read as follows:
    ``(a) Any State desiring to receive assistance under this Act shall 
submit to the Secretary, as part of the State workforce development and 
literacy plan authorized under title I of the Consolidated and Reformed 
Education, Employment, and Rehabilitation Systems Act, detailed plans 
for carrying out the provisions of this Act within such State.'';
            (2) by striking subsections (b), (c), and (e); and
            (3) by redesignating subsection (d) as subsection (b).
    (g) Elimination of Federal Advisory Council.--Section 11 of such 
Act (29 U.S.C. 49j) is hereby repealed.
    (h) Conforming Amendments.--
            (1) Such Act is amended by inserting after section 2 the 
        following new heading:

               ``TITLE I--GENERAL PROGRAM REQUIREMENTS''.

            (2) Section 4 of such Act is amended by striking ``United 
        States Employment Service'' and inserting ``Secretary of 
        Labor''.
            (3) Section 7(b)(2) of such Act is amended by striking 
        ``private industry council'' and inserting ``local workforce 
        development board''.
            (4) Section 7(d) of such Act is amended--
                    (A) by striking ``United States Employment 
                Service'' and inserting ``Secretary of Labor''; and
                    (B) by striking ``Job Training Partnership Act'' 
                and inserting ``Consolidated and Reformed Education, 
                Employment, and Rehabilitation Systems Act''.
            (5) Section 12 of such Act is amended by striking ``The 
        Director, with the approval of the Secretary of Labor,'' and 
        inserting ``The Secretary of Labor''.

SEC. 132. LABOR MARKET INFORMATION.

    The Act of June 6, 1933 (commonly known as the ``Wagner-Peyser 
Act''; 29 U.S.C. 49), as amended by section 131, is further amended by 
adding at the end the following new title:

                  ``TITLE II--LABOR MARKET INFORMATION

``SEC. 21. PURPOSE.

    ``The purpose of this title is to ensure a comprehensive and 
coordinated system of labor market information which will provide 
locally based, accurate, up-to-date, easily accessible, and user 
friendly labor market information through a cooperative Federal, State, 
and local governance structure which includes partnerships with the 
private sector at all levels.

``SEC. 22. SYSTEM CONTENT.

    ``(a) In General.--The Secretary of Labor, in accordance with the 
provisions of this title, shall oversee the development, maintenance, 
and continuous improvement of a nationwide system of labor market 
information using statistically valid data, which include--
            ``(1) statistical data from survey and projection programs 
        and data from administrative reporting systems, which, taken 
        together, enumerate, estimate, and project the supply and 
        demand for labor at Federal, State, and local levels in a 
        timely manner, including data on--
                    ``(A) the demographic characteristics, as defined 
                in section 5 of the Consolidated and Reformed 
                Education, Employment, and Rehabilitation Systems Act, 
                socioeconomic characteristics, and current employment 
                status of the population, including self-employed, 
                part-time, and seasonal workers, and individuals with 
                severe disabilities, as such data are available from 
                the Bureau of Census and other sources;
                    ``(B) job vacancies, education and training 
                requirements, skills, wages, benefits, working 
                conditions, and industrial distribution of occupations, 
                as well as current and projected employment 
                opportunities and trends by industry and occupation;
                    ``(C) the educational attainment, training, skills, 
                skill levels, and occupations of the population 
                aggregates, as such data area are available from the 
                Bureau of Census and other sources;
                    ``(D) information (such as unemployment insurance 
                wage data records) maintained in a longitudinal manner 
                on the quarterly earnings, establishment and industry 
                affiliation, and geographic location of employment; and
                    ``(E) the incidence, industrial and geographical 
                location, and number of workers displaced by permanent 
                layoffs and plant closings;
            ``(2) State and local employment and consumer information 
        on--
                    ``(A) job openings, locations, hiring requirements, 
                and application procedures, as well as profiles of 
                employers in the local labor market describing the 
                nature of work performed, employment requirements, 
                wages, benefits, and hiring patterns as such 
                information is volunteered by employers;
                    ``(B) aggregate data on job seekers, including 
                their education and training, skills, skill levels, 
                employment experience, and employment goals; and
                    ``(C) education courses, training programs, job 
                placement programs, and vocational rehabilitation 
                programs (where appropriate), including--
                            ``(i) program performance information as 
                        required by this Act, such as summary data on 
                        program completion, acquisition of industry-
                        recognized skill standards, job placement, 
                        earnings, and the level of satisfaction of the 
                        participants and their employers; and
                            ``(ii) descriptive information on programs, 
                        such as eligibility requirements, costs, 
                        financial support, or other supportive 
                        services, and other appropriate information 
                        which may be available with these courses and 
                        programs;
            ``(3) technical standards for data and information that 
        will--
                    ``(A) as a minimum guarantor of data usefulness and 
                quality, ensure compatibility and additivity of data 
                and information to enable comparisons among localities 
                and States;
                    ``(B) support standardization and aggregation of 
                data and information from the administrative reporting 
                systems of employment-related programs; and
                    ``(C) include--
                            ``(i) classification and coding systems for 
                        industries, occupations, skills, programs, and 
                        courses;
                            ``(ii) nationally standardized definitions 
                        of terms;
                            ``(iii) a common system for designating 
                        geographic areas;
                            ``(iv) quality control mechanisms for data 
                        collection and analysis; and
                            ``(v) common schedules for data collection 
                        and dissemination;
            ``(4) analysis of data and information for uses including--
                    ``(A) Federal, State, and local economic 
                policymaking;
                    ``(B) the implementation of Federal policies, 
                including the allocation of Federal funds to States and 
                localities and the facilitation of job search and 
                hiring in local labor markets;
                    ``(C) Federal, State, and local program planning 
                and evaluation; and
                    ``(D) research on labor market dynamics;
            ``(5) dissemination mechanisms for data and analysis, 
        including mechanisms which may be standardized among the States 
        and technical standards in the design of automated databases, 
        and the design of user interfaces and communications protocols;
            ``(6) programs of technical assistance for States and 
        localities in the development, maintenance, and utilization of 
        data, analysis, and dissemination mechanisms, including 
        assistance in adopting and utilizing automated systems and 
        improving the access, through electronic and other means, of 
        youth, adults, and employers to labor market information for 
        localities, States, and the Nation;
            ``(7) programs of research and demonstration, which may be 
        carried out by States and other public or private entities, on 
        ways to improve the products and processes authorized in this 
        title; and
            ``(8) objective performance measures, which will allow for 
        the continuous monitoring of the progress of the labor market 
        information system at national, State, and local levels.
    ``(b) Information To Be Confidential.--
            ``(1) In general.--No officer or employee of the Federal 
        Government or agent of the Federal Government may--
                    ``(A) use the information furnished under the 
                provisions of this title for any purpose other than the 
                statistical purposes for which it is supplied;
                    ``(B) make any publication whereby the data 
                furnished by any particular establishment or individual 
                under this title can be individually identified; or
                    ``(C) permit anyone other than the sworn officers 
                and employees of any Federal department or agency to 
                examine the individual reports.
            ``(2) Immunity from legal process.--Any information which 
        is collected and retained under this title shall be immune from 
        the legal process and shall not, without the consent of the 
        individual or establishment concerned, be admitted as evidence 
        or used for any purpose in any action, suit, or other judicial 
        or administrative proceeding.

``SEC. 23. FEDERAL RESPONSIBILITIES.

    ``(a) In General.--The Nation's labor market information system 
shall be planned, administered, overseen, and evaluated by a 
cooperative governance structure involving the Federal Government, 
States, and local entities.
    ``(b) Duties.--The Secretary, with respect to data collection, 
analysis, and dissemination of labor market information, shall carry 
out the following duties:
            ``(1) Ensure that all statistical and administrative data 
        collection activities within the Department of Labor, including 
        the Employment and Training Administration, Veterans' 
        Employment and Training Service, Employment Standards 
        Administration, and the Occupational Health and Safety 
        Administration, are consistent with those of the Bureau of 
        Labor Statistics.
            ``(2) Assign responsibilities, as appropriate, to agencies 
        such as the Employment and Training Administration to work with 
        the Bureau of Labor Statistics in the collection, analysis and, 
        particularly, in the dissemination of labor market information, 
        and in the provision of training and technical assistance to 
        users of information, including the States, employers, youth, 
        and adults.
            ``(3) In cooperation with other Federal agencies, including 
        the Department of Commerce, Department of Defense, Department 
        of the Treasury, Department of Education, Department of Health 
        and Human Services, Department of Agriculture, Department of 
        Veterans' Affairs, and the Office of Management and Budget, 
        establish and maintain mechanisms for ensuring complementarity 
        and nonduplication in the development and operation of 
        statistical and administrative data collection activities, in 
        order to ensure a comprehensive labor market information 
        system.
            ``(4) Actively seek the participation of other Federal 
        agencies, particularly the National Center for Education 
        Statistics and the Division of Adult and Vocational Education, 
        and the Rehabilitation Services Administration of the 
        Department of Education, the Veterans' Employment and Training 
        Service of the Department of Labor and the Department of 
        Veterans' Affairs with respect to vocational rehabilitation 
        programs in the design and provision of standardized 
        information to the States to support section 22(2), and in the 
        dissemination of labor market information.
            ``(5) Establish confidentiality standards for the labor 
        market information system at Federal, State, and local levels, 
        including such provisions as may be necessary, to be taken in 
        coordination with the States, to ensure that privacy and 
        confidentiality protections are guaranteed with respect to 
        individuals and firm data.
    ``(c) Additional Duties.--The Secretary, in collaboration with the 
Bureau of Labor Statistics, with the assistance of other agencies of 
the Department where appropriate, shall--
            ``(1) establish and maintain, with the cooperation of the 
        States, elements of the system described in sections 22(a)(1) 
        and 22(a)(3);
            ``(2) develop and promulgate standards, definitions, 
        formats, collection methodologies, and other necessary system 
        elements for the use of the States in their assembling and 
        presentation of the employment information specified in section 
        22(a)(2);
            ``(3) eliminate gaps and duplication in statistical 
        undertakings, with the systemization of wage surveys as an 
        early priority;
            ``(4) recommend any needed improvements in administrative 
        reporting systems to support the development of labor market 
        information from their data; and
            ``(5) ensure that--
                    ``(A) data are sufficiently timely relevant to 
                employers and other users, and locally detailed for 
                uses including those specified in section 22(a)(4);
                    ``(B) administrative records are standardized to 
                facilitate the aggregation of data from local to State 
                and national levels and to support the creation of new 
                statistical series from program records; and
                    ``(C) paperwork and reporting requirements on 
                employers and individuals are reduced.

``SEC. 24. ANNUAL PLAN.

    ``(a) In General.--The Secretary of Labor, in collaboration with 
the Bureau of Labor Statistics, and with assistance of other 
appropriate Federal agencies, shall prepare an annual plan to be the 
operational mechanism for achieving a cooperative Federal/State 
governance structure for labor market information and provide the 
written justification for the Department of Labor's budget request to 
Congress by describing the activities and priorities of the Bureau of 
Labor Statistics, other offices within the Department of Labor, and 
other Federal agencies with regard to data collection, analysis, and 
dissemination of labor market information for fiscal years succeeding 
the fiscal year in which the plan is developed and shall include--
            ``(1) the results of a periodic review of users' needs and 
        priorities, including the identification of new employment 
        issues and the attendant emergence of new needs, on the part of 
        Congress, the States, employers, youth, and adults, for data, 
        analysis, and dissemination;
            ``(2) an evaluation, including the results of objective 
        measures, of the performance of the labor market information 
        system in meeting these needs and the steps to be taken to 
        overcome deficiencies;
            ``(3) a summary of ongoing data programs and activities 
        under section 22 and a description of the development of new 
        data programs, analytical techniques, definitions and 
        standards, dissemination mechanisms, training and technical 
        assistance, governance mechanisms, and funding processes to 
        meet new needs; and
            ``(4) the results of an annual review of the costs to the 
        States of meeting contract requirements for data production 
        under this title, including a description of how the 
        Secretary's requested budget will cover these costs.
    ``(b) Cooperation With the States.--The Secretary and the Bureau of 
Labor Statistics, in cooperation with the States, shall develop the 
plan by--
            ``(1) establishing procedures and mechanisms for holding 
        formal and periodic consultations on products and 
        administration of the system, at least once each quarter, with 
        representatives of employers as well as with representatives of 
        the States from each of the 10 Federal regions of the 
        Department of Labor, elected by and from among the State 
        directors of labor market information, according to a process 
        set forth by the Secretary; and
            ``(2) incorporating in the annual plan, for its submission 
        to Congress, the results of these consultations, including any 
        supplementary or dissenting views from representatives of the 
        States.
    ``(c) Representatives of States Deemed To Be Federal Employees.--
For purposes of the development of the annual plan and to meet the 
provisions of Office of Management and Budget Circular A-11, the 
representatives of the States, elected in accordance with subsection 
(b)(1), shall be considered to be employees of the Department of Labor.

``SEC. 25. GOVERNOR'S RESPONSIBILITIES.

    ``(a) Designation of State Agency.--The Governor of each State 
shall designate a single State agency to be the agency responsible for 
the management and oversight of a statewide comprehensive labor market 
information system and for the State's participation in the cooperative 
Federal/State governance structure for the nationwide labor market 
information system.
    ``(b) Duties.--In order to receive Federal financial assistance 
under this Act, the State agency shall--
            ``(1) develop, maintain, and continuously improve a 
        comprehensive labor market information system, which shall--
                    ``(A) include all the elements specified in section 
                22; and
                    ``(B) be responsive to the needs of the State and 
                its localities for planning and evaluative data, 
                including employment and economic analyses and 
                projections, as required by this Act, the Consolidated 
                and Reformed Education, Employment, and Rehabilitation 
                Systems Act, the Social Security Act, and other 
                provisions of
                 law which require the use of labor market information;
            ``(2) ensure the performance of contract and grant 
        responsibilities for data collection, analysis, and 
        dissemination;
            ``(3) conduct such other data collection, analysis, and 
        dissemination activities as will ensure comprehensive State and 
        local labor market information;
            ``(4) actively seek the participation of other State and 
        local agencies, with particular attention to State education, 
        economic development, human services, and welfare agencies, in 
        data collection, analysis, and dissemination activities in 
        order to ensure complementarity and compatibility among data; 
        and
            ``(5) participate in the development of the national annual 
        plan.''.

                     Subtitle C--General Provision

SEC. 141. WORKER RIGHTS.

    The following requirements shall apply to programs under titles II 
and III of this Act:
            (1) Prohibition on displacement.--A participant in a 
        program under titles II or III shall not displace any currently 
        employed worker (including a partial displacement, such as a 
        reduction in the hours of non-overtime work, wages, or 
        employment benefits).
            (2) Prohibition on impairment of contracts.--A program 
        under title II or III shall not impair existing contracts for 
        services or collective bargaining agreements, and no such 
        program that would be inconsistent with the terms of a 
        collective bargaining agreement shall be undertaken without the 
        written concurrence of the labor organization and employer 
        concerned.
            (3) Prohibition on replacement.--A participant in a program 
        under title II or III shall not be employed--
                    (A) when any other individual is on temporary 
                layoff, with the clear possibility of recall, from the 
                same or any substantially equivalent job with the 
                participating employer; or
                    (B) when the employer has terminated the employment 
                of any regular employee or otherwise reduced the 
                workforce of the employer with the intention of filling 
                the vacancy so created with the student.
            (4) Workplaces.--A participant in a program under title II 
        or III shall be provided with adequate and safe equipment and 
        safe and healthful workplaces in conformity with all health and 
        safety requirements of Federal, State, and local law.
            (5) Effect on other laws.--Nothing in this Act shall be 
        construed to modify or affect any Federal or State law 
        prohibiting discrimination on the basis of race, religion, 
        color, ethnicity, national origin, gender, age, or disability, 
        or to modify or affect any right to enforcement of this Act 
        that may exist under other Federal laws, except as expressly 
        provided by this Act.

SEC. 142. TRANSFERABILITY.

    The Governor, through the collaborative process, has the authority 
to transfer not more than 10 percent of the total allotment to a State 
under title II or title III of this Act, between such titles. Funds 
transferred under this authority must be distributed to local providers 
in accordance with the provisions of title II and III of this Act.

 TITLE II--YOUTH DEVELOPMENT AND CAREER PREPARATION CONSOLIDATION GRANT

SEC. 201. PURPOSES.

    It is the purpose of this title to provide States and local 
communities maximum flexibility in designing youth development and 
career preparation programs that--
            (1) help youth attain the academic skills and occupational 
        skills needed to be successful in a global economy and for 
        lifelong learning;
            (2) best suit the needs of in-school and at-risk youth in 
        their communities;
            (3) promote strong connections between in-school and at-
        risk programs, to ensure that youth are prepared for further 
        education opportunities and good jobs, and promote youth 
        development and career preparation programs that provide 
        opportunities for youth to receive postsecondary education and 
        occupational training;
            (4) promote the formation of education and business 
        partnerships that are dedicated to linking the worlds of school 
        and work; and
            (5) promote high academic and occupational standards and 
        quality vocational-technical education, including improved 
        secondary and postsecondary programs, by focusing resources on 
        program improvement initiatives that help prepare youth for 
        further education, training, and high-wage jobs in high-
        performance workplaces.

SEC. 202. DEFINITIONS.

    For purposes of this title:
            (1) The term ``administration'' means activities of a State 
        necessary for the proper and efficient performance of its 
        duties under this title, including supervision, but does not 
        include curriculum development activities, personnel 
        development, or research activities.
            (2) The term ``all aspects of the industry'' means strong 
        experience in, and understanding of, all aspects of the 
        industry that youth are preparing to enter, including planning, 
        management, finances, technical and production skills, 
        underlying principles of technology, labor issues, and health 
        and safety.
            (3) The term ``articulation agreement'' means a commitment 
        to a program designed to provide students with a nonduplicative 
        sequence of progressive coursework in secondary and 
        postsecondary education.
            (4) The term ``cooperative education'' means a method of 
        instruction of education for youth who, through written 
        cooperative arrangements between the school and employers, 
        receive instruction, including required academic courses and 
        related instruction by alternation of study in school with a 
        job in any occupational field. Such alternation shall be 
        planned and supervised by the school and employers so that each 
        contributes to the youth's education and employability. Work 
        periods and school attendance may be on alternate half days, 
        full days, weeks, or other periods of time in fulfilling the 
        cooperative program.
            (5) The term ``corrections vocational education'' means 
        programs administered by the State to assist juvenile and adult 
        criminal offenders in correctional institutions in the State, 
        including correctional institutions operated by local 
        authorities.
            (6) The term ``curricula'' means instructional and related 
        or supportive material, including materials using advanced 
        learning technology, in any occupational field which is 
        designed to strengthen the academic foundation and prepare 
        youth for employment at the entry level or to upgrade 
        occupational competencies of those previously or presently 
        employed in any occupational field, and appropriate counseling 
        and guidance material.
            (7) Except as otherwise provided, the term ``eligible 
        institution'' means a local educational agency, an area 
        vocational education school, an intermediate educational 
        agency, an institution of higher education (as such term is 
        defined in section 1201(a) of the Higher Education Act of 
        1965), a State corrections educational agency, or consortia of 
        such entities.
            (8) The term ``partnership'' means a local entity that is 
        responsible for local youth development and career preparation 
        programs and may consist of parents, employers, representatives 
        of local educational agencies and local postsecondary 
        educational institutions (including representatives of area 
        vocational education schools, where applicable), local 
        educators (such as teachers, counselors, or administrators), 
        representative employee organizations, students, and may 
        include other entities.
            (9) The term ``Secretary'' means the Secretary of 
        Education.
            (10) The term ``sequential course of study'' means an 
        integrated series of courses which are directly related to the 
        educational and occupational skill preparation of youth for 
        jobs, or preparation for postsecondary education.
            (11) The term ``single parent'' means an individual who--
                    (A) is unmarried or legally separated from a 
                spouse; and
                    (B)(i) has a minor child or children for whom the 
                parent has either custody or joint custody; or
                    (ii) is pregnant.
            (12) The term ``special populations'' includes individuals 
        with disabilities, economically disadvantaged individuals, 
        individuals of limited English proficiency, and individuals who 
        are eligible for nontraditional training and employment.
            (13) The term ``tech-prep education program'' means a 
        program of study which--
                    (A) combines at least 2 years of secondary and 2 
                years of postsecondary education in a nonduplicative 
                sequential course of study;
                    (B) integrates academic and vocational instruction;
                    (C) provides technical preparation in at least 1 
                field of engineering technology, applied science, 
                mechanical, industrial, or practical arts or trade, or 
                agriculture, health occupations, or business;
                    (D) builds student competence in mathematics, 
                science, communications, and workplace skills, through 
                applied academics and integrated instruction in a 
                coherent sequence of courses;
                    (E) leads to an associate degree or certificate in 
                a specific career field;
                    (F) leads to placement in appropriate employment or 
                further education; and
                    (G) enables a student to fulfill a career relating 
                to labor market needs.
            (14) The term ``vocational education'' means organized 
        educational programs offering a sequence of courses which are 
        directly related to the preparation of youth in paid or unpaid 
        employment in current or emerging occupations, including 
        nonbaccalaureate certificate and degree programs and 
        baccalaureate vocational degree programs. Such programs include 
        competency-based applied learning which contributes to a 
        youth's academic knowledge, higher-order reasoning, and 
        problem-solving skills, work attitudes, general employability 
        skills, and the occupational-specific skills necessary for 
        economic independence as a productive and contributing member 
        of society. Such term also includes applied technology 
        education.
            (15) The term ``vocational student organizations'' means 
        those organizations for individuals enrolled in vocational 
        education programs which engage in activities as an integral 
        part of the instructional program. Such organizations may have 
        State and national units which aggregate the work and purposes 
        of instruction in vocational education at the local level.

                       Subtitle A--State Funding

SEC. 211. NATIONAL AND STATE FUNDING.

    (a) National Programs.--In each fiscal year, of the amounts made 
available under section 4, the Secretary is authorized to reserve 20 
percent or $25,000,000, whichever is less, to carry out the provisions 
of subtitle D.
    (b) State Allotment.--
            (1) In general.--Of the funds remaining after the 
        reservation under subsection (a), the Secretary shall allot to 
        each State for each fiscal year an amount based on that State's 
        allotment percentage.
            (2) Allotment percentage.--(A) Except as provided in 
        subparagraph (B), the allotment percentage of a State for a 
        fiscal year shall be the same percentage of funds allotted to 
        the State under this section in the preceding fiscal year.
            (B) The allotment percentage of a State for fiscal year 
        1996 shall be the percentage of funds allotted to the State in 
        fiscal year 1995 under--
                    (i) section 101 or 101A of the Carl D. Perkins 
                Vocational and Applied Technology Education Act as such 
                Act was in effect on the day before the date of the 
                enactment of this Act; and
                    (ii) the funding allotted in fiscal year 1995 under 
                section 252 and 262 of the Job Training Partnership Act 
                as such Act was in effect on the day before the date of 
                the enactment of this Act.
            (3) State minimum.--Notwithstanding any other provision of 
        law and subject to paragraph (1), any fiscal year for which the 
        amounts appropriated for programs authorized by this title 
        exceed the amounts available under subparagraph (B) for fiscal 
        year 1995, a State shall receive not less than one-quarter of 
        one percent of the amount available for each such program for 
        that fiscal year under this subsection. Amounts necessary for 
        increasing such payments to States to comply with the preceding 
        sentence shall be obtained by ratably reducing the amounts to 
        be paid to other States.
            (4) Definition.--For the purposes of this subsection the 
        term ``State'' means, in addition to the several States, the 
        District of Columbia, the Commonwealth of Puerto Rico, the 
        Virgin Islands, Guam, American Samoa, and the Northern Mariana 
        Islands.
    (c) Funding for State Programs.--Of the funds allotted to a State 
under subsection (b) for each fiscal year, the Governor, through the 
collaborative process, shall--
            (1) make available not less than 90 percent to local 
        providers;
            (2) make available not more than 8 percent for State 
        programs described in section 222; and
            (3) make available not more than 2 percent for 
        administrative purposes at the State level.
    (d) Proviso.--None of the funds made available under this title 
shall be used to compel any youth to pursue a specific career. Youth 
participating in programs under this title shall be eligible to change 
their course of study and training.

SEC. 212. WITHIN STATE ALLOCATION.

    (a) In General.--
            (1) Allocation of funds.--From the amounts made available 
        pursuant to section 211(c)(1), the Governor, through the 
        collaborative process, shall--
                    (A) allocate to eligible institutions an amount 
                equal to not less than 40 percent of
                 such amount for in-school youth programs described in 
section 241;
                    (B) allocate to local workforce development boards 
                an amount equal to not less than 40 percent of such 
                amount for at-risk youth programs described in section 
                245.
            (2) Discretionary funds.--From the amounts made available 
        pursuant to section 211(c)(1), the Governor, through the 
        collaborative process, is authorized to provide 10 percent of 
        such amounts for discretionary purposes, as determined by the 
        Governor, to eligible institutions or local workforce 
        development boards for in-school and at-risk youth.
            (3) Remainder of funds.--From the remainder of amounts made 
        available pursuant to section 211(c)(1) and distributed 
        pursuant to paragraphs (1) and (2) of this subsection, the 
        Governor, through the collaborative process, shall allocate the 
        remainder of any such amounts to carry out the purposes of 
        subparagraphs (A) or (B) of paragraph (1).
    (b) Within State Formula.--
            (1) Establishment.--The Governor, through the collaborative 
        process, and after consultation with local chief elected 
        officials in the local workforce development area and, where 
        appropriate, local educators in such area, shall develop a 
        formula for the allocation of funds in accordance with 
        paragraph (1) of subsection (a). Such formula shall take into 
        account--
                    (A) poverty rates within each local community, as 
                determined by the State;
                    (B) the proportion of the State's youth population 
                residing within each local community; and
                    (C) such other factors as considered appropriate.
            (2) Additional factors.--In establishing such formula, the 
        Governor shall ensure that funds are distributed equitably 
        throughout the State, and that the factors described in 
        paragraph (1) do not receive disproportionate weighting.
    (c) Minimum Grant Amounts.--
            (1) Local educational agencies.--A local educational agency 
        or consortium of such agencies that receives a subgrant from a 
        State under paragraph (1) of subsection (a) for any fiscal year 
        shall receive not less than $15,000.
            (2) Postsecondary institutions.--A postsecondary 
        institution or consortium of such institutions that receives a 
        subgrant from a State under paragraph (1) of subsection (a) for 
        any fiscal year shall receive not less than $50,000.
            (3) Local development board.--A local development board 
        that receives a subgrant from a State under paragraph (1) of 
        subsection (a) for any fiscal year shall receive not less than 
        $15,000.
            (4) Secondary-postsecondary consortia.--One or more local 
        educational agencies and one or more eligible institutions may 
        enter into a consortium agreement. A consortium formed pursuant 
        to this paragraph that receives a subgrant from a State under 
        this subtitle shall receive not less than $50,000 in any fiscal 
        year.
    (d) Funds to Consortium.--Funds allocated to a consortium formed to 
meet the requirements of subsection (c) shall be used only for purposes 
and activities that are mutually beneficial to all members of the 
consortium. Such funds may not be reallocated to individual members of 
the consortium for purposes or activities benefiting only one member of 
the consortium.
    (e) Waiver.--The State may waive the application of subsection (c) 
in any case in which a grant recipient--
            (1) is located in a rural, sparsely-populated area; and
            (2) demonstrates an inability to enter into a consortium 
        for purposes of providing services under this title.

       Subtitle B--State Organizational, Planning, and Reporting 
                            Responsibilities

SEC. 221. STATE PLAN.

    In addition to the requirements described in title I, a State that 
desires to receive funds for any fiscal year under this title shall, as 
part of the State Workforce Development and Literacy Plan under title 
I, submit to the Secretary of Education information that includes--
            (1) a description of the State's plan to develop the 
        academic and occupational skills of youth and provide the 
        attainment of challenging vocational-technical education 
        standards, including industry-approved skill standards and 
        workplace competencies;
            (2) a description of how the State will improve 
        comprehensive career guidance and counseling which may include 
        linkages to career exploration and guidance counseling outside 
        of the school system and shall describe how the State will 
        effectively demonstrate the system of career preparation for 
        youth, which includes elements such as professional 
        development, and secondary-postsecondary collaborations;
            (3) a description of the strategy of the State for 
        integrating academic, vocational, and work-based learning, 
        including a description of how the State will promote 
        collaboration between secondary and postsecondary occupational 
        and academic programs and institutions and incorporating 
        learning in all aspects of the industry; and
            (4) a description of how the State will promote the active 
        involvement of parents and business (including small- and 
        medium-sized businesses) in the planning, development, and 
        implementation of youth development and career preparation 
        programs authorized under this title.

SEC. 222. STATE PROGRAMS AND STATE ACTIVITIES.

    (a) General Authority.--From amounts made available to a State 
under section 211(c)(2), each State shall conduct State programs and 
activities.
    (b) Uses of Funds.--The programs and activities described in 
subsection (a) may include--
            (1) an assessment of programs conducted with assistance 
        under this title, including the development of--
                    (A) performance indicators and measures for such 
                programs; and
                    (B) program improvement and accountability with 
                respect to such programs;
            (2) the support for tech-prep education;
            (3) support for workforce preparation programs for single 
        parents, displaced homemakers, and single pregnant women;
            (4) support for corrections vocational education;
            (5) professional development activities for vocational 
        teachers, academic teachers, school administrators, counselors, 
        workplace mentors, and local providers regarding integration of 
        vocational, academic, and work-based curricula, including--
                    (A) inservice and preservice training of teachers 
                and faculty in state-of-the-art programs and techniques 
                and nontraditional training and employment; and
                    (B) support of public teacher-education programs to 
                ensure vocational teachers stay current with the needs, 
                expectations, and methods of industry to meet employer 
                standards;
            (6) development, dissemination, and field testing of 
        curricula, especially--
                    (A) curricula that integrate vocational, academic, 
                and work-based methodologies;
                    (B) curricula that provide a coherent sequence of 
                courses through which academic and occupational skills 
                may be measured; and
                    (C) curricula for work-based learning;
            (7) leadership and instructional programs in technology 
        education;
            (8) support for cooperative education;
            (9) support for family and consumer science programs;
            (10) creative use of technologies, including professional 
        development in the use of such technologies for instructional 
        purposes and to increase counselor's and youth's knowledge of, 
        and use of, additional information resources;
            (11) support for vocational student organizations; and
            (12) improving comprehensive career guidance and 
        counseling.

SEC. 223. INCENTIVE AWARDS.

    The State, may, from the amount made available under section 
211(c)(2) for any fiscal year make performance awards to 1 or more 
eligible institutions or local providers that have--
            (1) exceeded in the performance goals described in section 
        110(f)(3);
            (2) implemented exemplary youth development and career 
        preparation programs at the local level in accordance with the 
        purposes described in section 201; or
            (3) provided exemplary education services and activities 
        for at-risk youth.

         Subtitle C--Subgrants for In-School and At-Risk Youth

SEC. 231. PARTNERSHIP AGREEMENTS.

    (a) Partnership.--A local workforce development board and eligible 
institutions that desire to receive a subgrant from a State under this 
subtitle in any fiscal year shall form a partnership for the purposes 
of collaborative planning, coordination of in-school and at-risk 
programs, and effective public participation.
    (b) Plan.--
            (1) In general.--The partnership referred to in subsection 
        (a) shall, in collaboration, develop and submit for approval to 
        the Governor through the State collaborative process a 
        comprehensive youth development and career preparation plan for 
        in-school and at-risk youth. Such plan shall describe how the 
        youth development and career preparation system meets the 
        requirements of sections 241 and 245 and shall address comments 
        received through the collaborative process.
            (2) Collaborative process.--The partnership shall assure 
        the involvement of parents, teachers, and the community in the 
        collaborative planning process which involves design of the 
        indicators, strategies, articulation, and cooperative 
        agreements, assessments, and evaluation of program activities.
            (3) Disputes.--In the event a partnership cannot come to 
        agreement on the content of local plans, the Governor, through 
        the collaborative process, is authorized to develop procedures 
        for the resolution of issues in dispute.

SEC. 232. DISTRIBUTION OF FUNDS.

    (a) In-School Programs.--Based upon an application submitted by the 
partnership to the Governor through the State collaborative process, a 
State shall distribute funds made available in a fiscal year as 
provided in section 212(a)(1)(A) to eligible institutions to carry out 
in-school youth programs described in section 241.
    (b) At-Risk Youth Programs.--A State shall distribute funds made 
available in any fiscal year as provided in section 212(a)(1)(B) to 
local workforce development boards to carry out at-risk youth programs 
described in section 245.

                       CHAPTER 1--IN-SCHOOL YOUTH

SEC. 241. USES OF FUNDS FOR IN-SCHOOL YOUTH.

    (a) General Authority.--Each eligible institution that receives a 
subgrant under this chapter shall use funds provided under such grant 
to improve youth development and career preparation programs.
    (b) Requirements for Uses of Funds.--Funds provided by a State 
pursuant to section 212(a)(1)(A) shall be used to provide in-school 
youth development and career preparation programs that--
            (1) are of such size, scope, and quality as to be 
        effective;
            (2) integrate academic, vocational, and work-based 
        learning, stressing applied and contextual learning, through a 
        coherent sequence of courses so that youth achieve both 
        academic and occupational competencies and have strong 
        experience in, and understanding of, all aspects of the 
        industry;
            (3) involve employers in the design and implementation of 
        programs;
            (4) establish effective linkages with at-risk youth 
        programs, secondary and postsecondary education;
            (5) provide work-based learning experiences with adult 
        mentoring where appropriate; and
            (6) provide comprehensive career guidance and counseling, 
        including exploration in the practical arts or trade.
    (c) Additional Uses of Funds.--In carrying out the provisions of 
subsection (b), funds may be used by an eligible institution for in-
school youth activities such as--
            (1) purchasing, leasing, or upgrading of equipment, 
        including instructional aids and material;
            (2) inservice training of vocational instructors, academic 
        instructors, employers, and workplace mentors, to integrate 
        academic and vocational education, and provide high-quality 
        school-based and work-based learning experiences;
            (3) tech-prep education programs;
            (4) supplementary services designed to meet the needs of 
        special populations;
            (5) adaptation of equipment;
            (6) apprenticeship programs;
            (7) comprehensive mentoring programs in institutions of 
        higher education offering comprehensive programs in teacher 
        preparation which seek to fully use the skills and work 
        experiences of individuals currently or formerly employed in 
        business and industry, who are interested in becoming classroom 
        instructors, and to meet the need of vocational educators who 
        wish to upgrade their teaching competencies;
            (8) local education and business partnerships for 
        developing and implementing school-based youth development and 
        career preparation systems;
            (9) support for vocational student organizations;
            (10) establishing effective activities and procedures to 
        enable program participants and their parents to participate 
        directly in decisions that influence the character of programs, 
        including providing information and assistance needed for 
        informed and effective participation; and
            (11) support for programs which prepare youth with skills 
        for personal and family life management, work, and leadership 
        in the community and the Nation.

                        CHAPTER 2--AT-RISK YOUTH

SEC. 245. USES OF FUNDS FOR AT-RISK YOUTH.

    (a) General Authority.--Each local workforce development board that 
receives a subgrant under this chapter shall use funds provided under 
such grant to improve youth development and career preparation 
programs.
    (b) Requirements for Uses of Funds.--Funds provided by a State 
pursuant to section 212(1)(B) shall be used to provide youth 
development and career preparation programs for at-risk youth that--
            (1) are of such size, scope, and quality as to be 
        effective;
            (2) integrate academic, vocational, and work-based 
        learning, stressing applied and contextual learning, through a 
        coherent sequence of courses so that in-school and at-risk 
        youth achieve both academic and occupational competencies;
            (3) involve employers in the design and implementation of 
        programs;
            (4) establish effective linkages with in-school youth 
        programs, and secondary and postsecondary education;
            (5) provide work-based learning experiences, including 
        experiences in the practical arts or trade, if applicable;
            (6) provide adult mentoring as a core component of the 
        program;
            (7) provide an objective assessment of the academic level, 
        skill level, and service needs of each participant; and
            (8) provide comprehensive career guidance and counseling.
    (c) Additional Uses of Funds.--In carrying out the provisions of 
subsection (b), providers of at-risk youth programs, as selected by the 
local workforce development board, may provide activities such as--
            (1) tutoring, study skills training and instruction leading 
        to completion of high school;
            (2) alternative high school services;
            (3) training or education that is combined with community 
        service, and service learning opportunities;
            (4) paid and unpaid work experience, including limited 
        internships, entry-employment experience programs, and summer 
        employment opportunities, that are integrated with year-round, 
        school-based, or alternative school-based programs;
            (5) dropout prevention strategies, strategies to encourage 
        at-risk youth to reenter high school or alternative high school 
        programs, and programs that encourage pregnant and parenting 
        youth to stay in school;
            (6) preemployment and work maturity skills training;
            (7) peer-centered activities encouraging responsibility and 
        other positive social behaviors during non-school hours; and
            (8) training-related supportive services.
    (d) Limitations on Use of Funds.--Not more than 10 percent of the 
funds provided under this chapter to a local workforce development 
board may be used for administrative purposes.

SEC. 246. AT-RISK YOUTH PROVIDERS.

    (a) Role of Local Workforce Development Board.--A local workforce 
development board that receives funds under this chapter shall not 
operate programs, but shall contract with eligible providers of 
demonstrated effectiveness, or with eligible providers utilizing 
service methodologies with demonstrated effectiveness in serving the 
youth development and career preparation needs of at-risk youth, for 
the purpose of providing services under this chapter.
    (b) Eligible Providers.--For purposes of this chapter, eligible 
providers may include--
            (1) an ``eligible institution'' as defined under section 
        202(7);
            (2) a unit of local government;
            (3) a private, nonprofit organization (including community-
        based organizations);
            (4) a private, for profit entity; or
            (5) other organizations or entities of demonstrated 
        effectiveness and approved by the local workforce development 
        board.

                     Subtitle D--National Programs

SEC. 251. RESEARCH ACTIVITIES.

    (a) General Authority.--
            (1) In general.--In order to carry out the purpose of this 
        title, the Secretary may, directly or through grants, 
        contracts, or cooperative agreements, carry out research, 
        development, dissemination, replication of model programs, 
        demonstration programs, evaluation, capacity-building, and 
        technical assistance activities with regard to the services and 
        activities carried out under this title.
            (2) Information systems.--Activities carried out under this 
        section may include support for occupational and career 
        information systems.
    (b) Dissemination.--The Secretary shall establish a system for 
disseminating information resulting from research and development 
activities carried out under this title.

SEC. 252. ASSESSMENT AND DATA COLLECTION OF YOUTH DEVELOPMENT AND 
              CAREER PREPARATION PROGRAMS.

    (a) In General.--The Secretary, through the Office of Educational 
Research and Improvement, shall conduct a biennial assessment of 
services and activities assisted under this title, through studies and 
analyses conducted independently through competitive awards.
    (b) Contents.--The assessment required under subsection (a) shall 
examine the extent to which services and activities assisted under this 
title have achieved their intended purposes and results, including the 
extent to which--
            (1) State and local services and activities have developed, 
        implemented, or improved youth development and career 
        preparation systems established under this title;
            (2) services and activities assisted under this title 
        succeed in preparing youth, including youth who are members of 
        special populations, for postsecondary education, further 
        learning, or entry into high-skill, high-wage careers;
            (3) youth who participate in services and activities 
        supported under this title succeed in meeting challenging State 
        academic and industry-based skill standards; and
            (4) the system improvement, participation, local and State 
        assessment, and accountability provisions of this title, 
        including the performance goals and indicators established 
        under section 110(f)(3), are effective.

SEC. 253. NATIONAL CENTER OR CENTERS FOR RESEARCH.

    (a) General Authority.--
            (1) National center.--The Secretary may, through a grant or 
        contract, establish one or more national centers for conducting 
        applied research, development, dissemination, and technical 
        assistance activities which would focus on improving the 
        development and career preparation of youth. The Secretary 
        shall consult with States prior to establishing one or more 
        such centers.
            (2) Eligibility.--Entities eligible to receive funds under 
        this section are institutions of higher education, other public 
        or private nonprofit organizations or agencies, and consortia 
        of such institutions, organizations, or agencies.
            (3) Previous center.--The national center in existence on 
        the day before the date of the enactment of the this Act shall 
        continue to receive assistance under this section in accordance 
        with the terms of its current award.
    (b) Activities.--
            (1) In general.--The applied research, development, 
        dissemination, and technical assistance activities carried out 
        by the national center or centers shall include--
                    (A) activities that assist recipients of funds 
                under this title to meet the requirements of section 
                110(f)(3);
                    (B) research and development of activities that 
                combine academic, vocational-technical education, and 
                work-based learning;
                    (C) developing new models for remediation of basic 
                academic skills which incorporate appropriate 
                instructional methods;
                    (D) identifying ways to establish effective 
                linkages among educational and job training activities 
                at the State and local levels;
                    (E) new models for comprehensive career guidance 
                and counseling;
                    (F) studies providing longitudinal information or 
                formative evaluation on programs funded under this 
                title, including an analysis of the effectiveness of 
                youth development and career preparation programs in 
                serving at-risk youth; and
                    (G) such other activities as the Secretary 
                determines to be appropriate to achieve the purposes of 
                this Act.
            (2) Duties.--The center or centers shall--
                    (A) provide assistance to States and local 
                recipients in developing and using systems of 
                performance measures and indicators for improvement of 
                youth development and career preparation programs and 
                services; and
                    (B) provide technical assistance and outreach.
            (3) Summary.--The center or centers conducting the 
        activities described in paragraph (1) shall annually prepare a 
        summary of key research findings of such center or centers and 
        shall submit copies of the summary to the Secretaries of 
        Education and Labor. The Secretary shall submit that summary to 
        the Committee on Labor and Human Resources of the Senate, and 
        the Committee on Economic and Educational Opportunities of the 
        House of Representatives.
    (c) Clearinghouse.--The center or centers shall maintain a 
clearinghouse that will provide data and information to Federal, State, 
and local organizations and agencies about the condition of youth 
development and career preparation systems and programs funded under 
this title.

      TITLE III--ADULT EMPLOYMENT AND TRAINING CONSOLIDATION GRANT

SEC. 301. PURPOSE.

    The purpose of this title is to establish an efficient, high-
quality, and equitable system of employment, job training, and related 
assistance designed to facilitate the transition of adults into 
productive, high skills, private sector employment.

     Subtitle A--Adult Employment and Training Consolidation Grant

SEC. 311. AUTHORIZATION.

    (a) In General.--In the case of each State that in accordance with 
the requirements of section 102 submits to the Secretary of Labor 
(hereinafter in this title referred to as the ``Secretary'') a State 
workforce development and literacy plan under section 104, the 
Secretary shall provide a grant to the State for the purpose of 
providing employment, job training, and related assistance for adults 
in the State.
    (b) Amount.--The grant shall consist of the allotment determined 
for the State under section 312.

SEC. 312. ALLOTMENT AMONG STATES.

    (a) In General.--Of the amount appropriated pursuant to section 
4(a)(2) to carry out this title for a fiscal year, the Secretary 
shall--
            (1) allot 85 percent of such amounts in accordance with 
        subsection (b); and
            (2) reserve 15 percent for use under subtitle B.
    (b) Allotment Among States.--
            (1) Reservation for the territories.--Of the amount 
        allotted under subsection (a)(1), the Secretary shall allot not 
        more than one quarter of one percent among the Commonwealth of 
        the Northern Mariana Islands, American Samoa, Guam, and the 
        Virgin Islands.
            (2) States.--After determining the amount to be allotted 
        under paragraph (1), the Secretary shall allot the remaining 
        amount to the remaining States so that each State receives an 
        amount that bears the same proportion to such remaining amount 
        as--
                    (A) the amount allotted to each such State from 
                allotments under sections 202 and 302 of the Job 
                Training Partnership Act (29 U.S.C. 1602 and 1652) (as 
                in effect before the date of the enactment of this Act) 
                for fiscal year 1995; bears to
                    (B) the aggregate of the amounts allotted to all 
                such States from allotments under such sections for 
                such fiscal year.
    (c) Minimum Allotment.--No State shall receive less than one-
quarter of one percent of the amount available under this title for a 
fiscal year. Amounts necessary for increasing such payments to States 
to comply with the preceding sentence shall be obtained by ratably 
reducing the amounts to be paid to other States.

SEC. 313. ALLOCATION WITHIN STATES.

    (a) Reservations for State Activities.--
            (1) In general.--The Governor of the State shall reserve 
        not more than 20 percent of the amount allotted to the State 
        under section 312(b) for a fiscal year for statewide activities 
        for employment, job training, and related assistance for 
        adults.
            (2) Mandatory activities.--Such activities shall include--
                    (A) rapid response activities; and
                    (B) additional assistance to areas that experience 
                disasters, mass layoffs or plant closings, or other 
                events which precipitate substantial increases in the 
                number of unemployed workers, to be expended in 
                accordance with the local plan of the relevant 
                workforce development area.
            (3) Discretionary activities.--
                    (A) In general.--Such activities may include--
                            (i) subject to subparagraph (B), 
                        administration by the State of programs under 
                        this subtitle;
                            (ii) capacity building and technical 
                        assistance to local workforce development 
                        areas, integrated career center systems, and 
                        service providers, including the development 
                        and training of staff and the development of 
                        exemplary program activities;
                            (iii) incentives for program coordination, 
                        performance awards, and research and 
                        demonstrations;
                            (iv) implementation of innovative incumbent 
                        worker training programs, which may include the 
                        establishment and implementation of an employer 
                        loan program to assist in skills upgrading (in 
                        accordance with the requirements of section 
                        324);
                            (v) implementation of experimentation, 
                        model activities, pilot projects, and 
                        demonstration projects which further the goals 
                        and purposes of this Act;
                            (vi) additional assistance for the 
                        development and implementation of the 
                        integrated career center system of the State 
                        established in accordance with title I; and
                            (vii) support for a common management 
                        information system as described in section 109.
                    (B) Limitation.--Not more than 25 percent of the 
                amount reserved by the Governor under paragraph (1) may 
                be used for administration by the State of programs 
                under this subtitle.
    (b) Within State Allocation.--
            (1) In general.--The Governor of the State shall allocate 
        the remainder of the amount allotted to the State under section 
        312(b) to workforce development areas designated under title I 
        of this Act, in accordance with paragraphs (1) and (2) of such 
        section, for the purpose of providing employment, job training, 
        and related services for adults in accordance with section 315.
            (2) Within state formula.--
                    (A) Establishment.--The Governor, through the 
                collaborative process under section 103 of this Act, 
                and after consultation with local chief elected 
                officials in the local workforce development area, 
                shall develop a formula for the allocation of 90 
                percent of the remainder of funds described in 
                paragraph (1), to workforce development areas, taking 
                into account--
                            (i) poverty rates within each local 
                        workforce development area, as determined by 
                        the State;
                            (ii) unemployment rates within each local 
                        workforce development area;
                            (iii) the proportion of the State's adult 
                        population residing within each local workforce 
                        development area; and
                            (iv) such other factors as considered 
                        appropriate.
                    (B) Additional factors.--In establishing such 
                formula, the Governor shall ensure that funds are 
                distributed equitably throughout the State, and that 
                the factors described in subparagraph (A) do not 
                receive disproportionate weighting.
            (3) Within state discretionary allocation.--In addition, 
        the Governor is authorized to allocate 10 percent of the 
        remainder of funds described in paragraph (1) to workforce 
        development areas designated under title I of this Act. Amounts 
        may be allocated to such areas as determined by the Governor.

SEC. 314. ADDITIONAL STATE PLAN REQUIREMENTS.

    The State shall, as part of the State workforce development and 
literacy plan under title I of this Act, submit to the Secretary the 
following additional information:
            (1) A description of how the State will serve the 
        employment and training needs of dislocated workers, 
        economically disadvantaged individuals, older workers, 
        individuals with disabilities, displaced homemakers, veterans, 
        and individuals with multiple barriers to employment (as 
        determined by the State), including individuals who are basic 
        skills deficient.
            (2) A description of how the State will provide rapid 
        response assistance to workers experiencing dislocation as a 
        result of mass layoffs and plant closings, either through the 
        direct provision of services or through the transfer of funds 
        to local workforce development areas for the provision of such 
        services.

SEC. 315. USE OF AMOUNTS.

    (a) Core Services.--Amounts allocated under section 313(b) shall be 
used to provide core services to adults through integrated career 
center systems in accordance with title I of this Act.
    (b) Intensive Services.--
            (1) In general.--Amounts allocated under section 313(b) 
        shall be used to provide intensive services to adults--
                    (A) who are unable to obtain employment through 
                core services under subsection (a); and
                    (B) who have been determined to be in need of more 
                intensive services in order to gain employment.
            (2) Delivery of services.--Such intensive services shall be 
        provided--
                    (A) directly through integrated career center 
                systems in accordance with title I of this Act; or
                    (B) through contracts through such systems with 
                service providers approved by the local workforce 
                development board, which may include private, for-
                profit providers.
            (3) Types of services.--Such intensive services may include 
        the following:
                    (A) Comprehensive and specialized assessments of 
                the skill levels and service needs of adults, which may 
                include--
                            (i) diagnostic testing and other assessment 
                        tools; and
                            (ii) in-depth interviewing and evaluation 
                        to identify employment barriers and appropriate 
                        employment goals.
                    (B) Development of an individual employment plan, 
                to identify the employment goals, appropriate 
                achievement objectives, and the appropriate combination 
                of services for the adult to achieve the employment 
                goal.
                    (C) Group counseling.
                    (D) Individual counseling and career planning.
                    (E) Case management for adults receiving education 
                and training services under subsection (c) or 
                supportive services under subsection (d).
                    (F) Follow-up counseling for adults placed in 
                training or employment, for up to 1 year.
    (c) Education and Training Services.--
            (1) In general.--Amounts allocated under section 313(b) 
        shall be used to provide education and training services to 
        adults--
                    (A) who are unable to obtain employment through 
                core services under subsection (a);
                    (B) who are in need of education and training 
                services in order to gain employment as a result of 
                determinations made through--
                            (i) preliminary assessments under section 
                        107(f)(1)(B) of this Act; or
                            (ii) comprehensive and specialized 
                        assessments under subsection (b)(3)(A); and
                    (C) who are unable to obtain other grant assistance 
                for such services, such as through Federal Pell Grants 
                established under title IV of the Higher Education Act 
                of 1965.
            (2) Delivery of services.--Such education and training 
        services shall be provided through education and training 
        providers certified in accordance with title I of this Act.
            (3) Types of services.--Such education and training 
        services may include the following:
                    (A) Basic skills training, including remedial 
                education, literacy training, and English literacy 
                program instruction.
                    (B) Occupational skills training, including 
                training for nontraditional employment.
                    (C) On-the-job training.
                    (D) Programs that combine workplace training with 
                related instruction.
                    (E) Training programs operated by the private 
                sector.
                    (F) Skill upgrading and retraining.
                    (G) Entrepreneurial training.
                    (H) Employability training to enhance basic 
                workplace competencies.
                    (I) Customized training conducted with a commitment 
                by an employer or group of employers to employ an 
                individual upon successful completion of the training.
            (4) Additional requirements.--
                    (A) Use of career grants.--
                            (i) In general.--Except as provided in 
                        clause (ii) and clause (iii), education and 
                        training services under this section shall be 
                        provided through the use of career grants in 
                        accordance with this subsection, and shall be 
                        distributed to eligible individuals through 
                        integrated career centers or affiliated sites 
                        as described in section 107, and in accordance 
                        with section 108 regarding the identification 
                        of eligible education and training providers.
                            (ii) Exceptions.--Education and training 
                        services authorized under this title may be 
                        provided pursuant to a contract for services in 
                        lieu of a career grant if--
                                    (I) such services are on-the-job 
                                training provided by an employer;
                                    (II) the local workforce 
                                development board determines there are 
                                an insufficient number of certified 
                                providers of education and training 
                                services in the workforce development 
                                area to accomplish the purposes of a 
                                career grant system;
                                    (III) the local workforce 
                                development board determines that the 
                                certified providers of education and 
                                training in the workforce development 
                                area are unable to provide effective 
                                services to special participant 
                                populations; or
                                    (IV) the local workforce 
                                development board decides to enter into 
                                a direct training contract with a 
                                community based organization serving 
                                special participant populations.
                            (iii) Transition.--States may have up to 
                        three years from the date of enactment of this 
                        Act to fully implement the requirements of 
                        clause (i), but nothing shall prohibit states 
                        from beginning such implementation at an 
                        earlier date.
                    (B) Linkage to occupations in demand.--Education 
                and training services under this subsection shall be 
                directly linked to occupations for which there is a 
                demand in the local workforce development area, or in 
                another area to which an adult receiving such services 
                is willing to relocate.
    (d) Additional Services.--
            (1) Supportive services.--Supportive services may be 
        provided for individuals--
                    (A) who are receiving assistance under any of 
                subsections (a) through (c); and
                    (B) who are unable to receive such services through 
                other programs providing such services.
            (2) Needs-related payments.--
                    (A) In general.--Amounts allocated under section 
                313(b) may be used to provide needs-related payments to 
                adults who are unemployed and do not qualify for (or 
                have ceased to qualify for) unemployment compensation 
                for the purpose of enabling such adults to participate 
                in education and training programs under subsection 
                (c).
                    (B) Additional eligibility requirements.--In 
                addition to the requirements contained in subparagraph 
                (A), a dislocated worker who has exhausted unemployment 
                insurance benefits may be eligible to receive needs-
                related payments under this paragraph only if such 
                worker was enrolled in education or training by the end 
                of the 8th week of the worker's initial unemployment 
                compensation benefit period, or, if later, by the end 
                of the 8th week after the worker is informed that a 
                short-term layoff will in fact exceed 6 months.
    (e) Priority.--Local workforce development boards shall establish a 
process through which priority is given to dislocated workers and 
economically disadvantaged individuals, for receipt of services 
provided under subsections (b) and (c), in the event that funds are 
limited within the workforce development area.
    (f) Prohibition on Private Right of Action.--Nothing in this 
section may be construed to establish a right for a participant to 
bring an action to obtain services under a program established under 
this section.
    (g) Limitations on Use of Funds.--Not more than 10 percent of the 
funds provided under this title to a local workforce development board 
may be used for administrative purposes.

                      Subtitle B--Federal Programs

SEC. 321. NATIONAL DISCRETIONARY GRANTS.

    (a) Grants for Dislocated Workers.--
            (1) In general.--From amounts reserved under section 
        312(a)(2) for any fiscal year, the Secretary is authorized to 
        award national discretionary grants to address major economic 
        dislocations that result from plant closures, base closures, or 
        mass layoffs.
            (2) Application.--To receive a grant under this section, an 
        eligible entity shall submit an application to the Secretary at 
        such time, in such manner, and accompanied by such information 
        as the Secretary determines is appropriate.
            (3) Eligible entities.--Grants under this section may be 
        awarded to--
                    (A) the State;
                    (B) a local workforce development board 
                administering assistance under this Act;
                    (C) employers and employer associations;
                    (D) worker-management transition assistance 
                committees and other employer-employee entities;
                    (E) representatives of employees;
                    (F) community development corporations and 
                community-based organizations; and
                    (G) industry consortia.
    (b) Incentive Grants.--From amounts reserved under section 
312(a)(2) for any fiscal year, the Secretary may provide awards to 
States--
            (1) to assist in the implementation of exemplary statewide 
        workforce development system designs; and
            (2) for the achievement of exceptional performance in the 
        statewide workforce development system.

SEC. 322. DISASTER RELIEF EMPLOYMENT ASSISTANCE.

    (a) In General.--From amounts reserved under section 312(a)(2) for 
any fiscal year, the Secretary may provide assistance to the Governor 
of any State within
 which is located an area that has suffered an emergency or a major 
disaster as defined in paragraphs (1) and (2), respectively, of section 
102 of the Robert T. Stafford Disaster Relief and Emergency Assistance 
Act (referred to in this section as the ``disaster area'').
    (b) Use of Funds.--
            (1) Projects restricted to disaster areas.--Funds made 
        available under this section--
                    (A) shall be used exclusively to provide employment 
                on projects to provide food, clothing, shelter, and 
                other humanitarian assistance for disaster victims and 
                on projects regarding demolition, cleanup, repair, 
                renovation, and reconstruction of damaged and destroyed 
                structures, facilities, and lands located within the 
                disaster area; and
                    (B) may be expended through public and private 
                agencies and organizations engaged in such projects.
            (2) Eligibility requirements.--An individual shall be 
        eligible to be offered disaster employment under this section 
        if such individual is a dislocated worker or is temporarily or 
        permanently laid off as a consequence of the disaster.
            (3) Limitations on disaster relief employment.--No 
        individual shall be employed under this part for more than 6 
        months for work related to recovery from a single natural 
        disaster.

SEC. 323. RESEARCH, DEMONSTRATION, EVALUATION, AND CAPACITY BUILDING.

    (a) In General.--From amounts reserved under section 312(a)(2) for 
any fiscal year, the Secretary is authorized to establish and carry out 
research, demonstration, and capacity building activities in accordance 
with this section.
    (b) Activities.--The Secretary is authorized to carry out the 
following activities under this section:
            (1) Research.--The Secretary is authorized to conduct 
        continuing research, which may include studies and other 
        methods and techniques, that will aid in the solution of the 
        employment and training problems of the United States. Such 
        studies may include the extent to which individuals who 
        participate in programs established under this title achieve 
        self-sufficiency as a result of such participation, including 
        the identification by State and locality, to the extent 
        practicable, of indicators measuring such self-sufficiency.
            (2) Demonstrations.--The Secretary is authorized to conduct 
        pilot and demonstration projects for the purpose of developing 
        and improving methods and techniques for addressing employment 
        and training needs which may include--
                    (A) projects conducted jointly with the Department 
                of Defense to develop training programs utilizing 
                computer-based and other innovative learning 
                technologies. The Secretary may award grants and enter 
                into contracts with appropriate entities to carry out 
                such projects; and
                    (B) Projects which promote the use of distance 
                learning, enabling students to take courses through the 
                use of technology such as videos teleconferencing, 
                computers, and the internet.
            (3) Evaluation.--
                    (A) Activities.--
                            (i) Job training activities.--The Secretary 
                        shall provide for the continuing evaluation of 
                        activities conducted under this Act, including 
                        the use of controlled experiments using 
                        experimental and control groups chosen by 
                        scientific random assignment, and at a minimum, 
                        determine whether job training and job 
                        placement programs effectively raise the hourly 
                        wage rates of individuals receiving training 
                        through such programs.
                            (ii) Other programs.--The Secretary may 
                        conduct evaluations of other federally funded 
                        employment-related activities including 
                        programs administered under--
                                    (I) the Wagner-Peyser Act (29 
                                U.S.C. 49 et seq.);
                                    (II) the National Apprenticeship 
                                Act (29 U.S.C. 50 et seq.);
                                    (III) the Older Americans Act of 
                                1965 (42 U.S.C. 3001 et seq.); and
                                    (IV) the Federal unemployment 
                                insurance program under titles III, IX, 
                                and XII of the Social Security Act (42 
                                U.S.C. 501 et seq., 1101 et seq., and 
                                1321 et seq.).
                    (B) Effectiveness.--The Secretary shall evaluate 
                the effectiveness of programs authorized under this Act 
                with respect to--
                            (i) the statutory goals;
                            (ii) the performance standards established 
                        by the Secretary; and
                            (iii) the extent to which such programs 
                        enhance the employment and earnings of 
                        participants, reduce income support costs, 
                        improve the employment competencies of 
                        participants in comparison to comparable 
                        persons who did not participate in such 
                        programs, and to the extent feasible, increase 
                        the level of total employment over the level 
                        that would have existed in the absence of such 
                        programs.
            (4) National partnership and special training.--The 
        Secretary may award special grants to eligible entities to 
        carry out activities that are most appropriately administered 
        at the national level. Such activities may include--
                    (A) partnerships with national organizations with 
                special expertise in developing, organizing, and 
                administering employment and training services at the 
                national, State, and local levels, such as industry and 
                labor associations, public interests groups, community-
                based organizations representative of groups that 
                encounter special difficulties in the labor market, in 
                education and training; and
                    (B) activities that--
                            (i) address industry-wide skill shortages;
                            (ii) meet training needs that are best 
                        addressed on a multistate basis;
                            (iii) further the goals of increasing the 
                        competitiveness of the United States labor 
                        force;
                            (iv) require technical expertise available 
                        at the national level to serve the needs of 
                        particular client groups that encounter 
                        significant barriers to employment and who the 
                        Secretary determines require special 
                        assistance; and
                            (v) promote and experiment with model 
                        activities, pilot projects, and demonstration 
                        projects which further the goals and purposes 
                        of this Act.
            (5) Capacity building and technical assistance.--
                    (A) In general.--The Secretary shall provide, 
                through grants, contracts, or other arrangements, staff 
                training and technical assistance to States, local 
                workforce development boards, career centers, 
                communities, business and labor organizations, service 
                providers, industry consortia, and other entities, to 
                enhance their capacity to develop and deliver effective 
                employment and training services.
                    (B) Activities.--The staff training and technical 
                assistance authorized under subparagraph (A) may 
                include--
                            (i) development of management information 
                        systems;
                            (ii) development and maintenance of a 
                        national capacity building, information and 
                        dissemination network; and
                            (iii) grants for the replication of 
                        successful employment and training models and 
                        activities.

SEC. 324. WORKFORCE SKILLS AND DEVELOPMENT LOANS.

    (a) Authorization.--
            (1) In general.--From amounts reserved under section 
        312(a)(2) for any fiscal year, the Secretary of Labor may use a 
        portion of such amounts to provide grants to States to provide 
        loans to eligible entities described in paragraph (2) to assist 
        such entities in providing skills upgrading.
            (2) Eligible entities.--An eligible entity described in 
        this paragraph is--
                    (A) an employer;
                    (B) a representative of employees;
                    (C) a business association;
                    (D) a trade organization; or
                    (E) a consortium consisting of--
                            (i) more than 1 of the entities described 
                        in subparagraphs (A) through (D); or
                            (ii) an institution of higher education (as 
                        such term is defined in section 481 of the 
                        Higher Education Act of 1965 (20 U.S.C. 1088) 
                        which continues to meet the eligibility and 
                        certification requirements under section 498 of 
                        such Act) and 1 or more of the entities 
                        described in subparagraphs (A) through (D).
    (b) Application.--The Secretary may provide a grant to a State 
under subsection (a) only if such State submits to the Secretary an 
application which contains such information as the Secretary may 
reasonably require.
    (c) Use of Amounts.--A State shall use amounts received from a 
grant under subsection (a) to establish a loan guarantee program to 
assist eligible entities described in paragraph (2) of such subsection 
to provide skills upgrading. In carrying out such program, the State 
shall meet the following requirements:
            (1) Establishment of reserve fund for loan guarantees.--The 
        State shall establish a reserve fund from amounts received from 
        such grant for the purpose of making commitments to guarantee 
        the payment of principal and interest on loans made by 
        financial institutions to such eligible entities to provide 
        skills upgrading.
            (2) Criteria for loan guarantees.--The State, in 
        conjunction with appropriate financial institutions, shall 
        establish and publish criteria for providing loan guarantees to 
        eligible entities under the program, including criteria that 
        provides for the following:
                    (A) A loan guarantee may be issued under the 
                program only if, at the time such guarantee is issued 
                the eligible entity agrees to pay as an insurance 
                premium an amount equal to 1 percent of the principal 
                received by such entity under the loan to the State's 
                reserve fund.
                    (B)(i) Subject to clause (ii), the eligible entity 
                will use amounts received from the loan to provide 
                skills upgrading for mid- and lower-level employees, 
                which may include--
                            (I) training in total quality management, 
                        statistical process control, production 
                        techniques, office automation, materials 
                        resource planning; and
                            (II) training to improve basic skills, 
                        including reading, writing, and arithmetic.
                    (ii) In providing such skills upgrading, the 
                eligible entity shall give priority to employees who--
                            (I) directly produce or deliver goods or 
                        services; or
                            (II) are in danger of being terminated or 
                        laid off as a result of modernization in the 
                        workplace, corporate downsizing, foreign or 
                        domestic competition, or Federal policies 
                        adversely affecting 1 or more industries.
                    (C) Amounts from a loan shall not be used to pay 
                the wages or other benefits of any employee receiving 
                assistance under the program.
            (3) Payment by state to financial institutions in cases of 
        default.--
                    (A) In general.--In accordance with criteria 
                developed by the Secretary, the State shall make 
                payments from the State's reserve fund to financial 
                institutions that have provided loans to eligible 
                entities that have defaulted on such loans for the 
                purpose of reimbursing such institutions for the amount 
                of principal and interest remaining unpaid to the 
                institutions by reason of such default.
                    (B) No full faith and credit of the united 
                states.--Loans provided by financial institutions to 
                eligible entities under loan guarantee programs under 
                this section shall not be obligations of, or guaranteed 
                in any respect by, the United States.
            (4) Interest from amounts in reserve fund.--Any interest 
        earned from amounts in the State's reserve fund shall be 
        credited to such fund.
    (d) Federal and State Share.--
            (1) Federal share.--The Federal share under this section 
        may not exceed 50 percent of the total cost of the program 
        established under subsection (c) for any fiscal year.
            (2) State share.--The State share shall be provided from 
        non-Federal sources and may be in cash or in-kind, fairly 
        evaluated.

SEC. 325. EMPLOYMENT, TRAINING, AND EDUCATION ASSISTANCE FOR NATIVE 
              AMERICANS.

    (a) Authorization.--From amounts reserved under section 4(a)(2) for 
any fiscal year, there shall be reserved one quarter of one percent, or 
$85,000,000, whichever is less, to provide grants to, or enter into 
contracts or cooperative agreements with, Indian tribes and tribal 
organizations, tribally-controlled colleges, tribally-controlled 
postsecondary vocational institutions, Indian-controlled organizations 
serving off-reservation areas, Alaska Native village and regional 
entities serving areas as described in the Alaska Native Claims 
Settlement Act and Hawaiian Native-controlled organizations to provide 
employment, training, vocational rehabilitation, library services, and 
education assistance for Native Americans.
    (b) Transfer of Authority for Vocational Education Activities.--In 
carrying out subsection (a), the Secretary of Labor may enter into an 
agreement with the Secretary of Education to carry out any portion of 
assistance under such subsection devoted to vocational educational 
activities, including support for the United Tribes Technical College 
and Crownpoint Institute of Technology.
    (c) Consolidation of Funds.--Entities receiving assistance under 
subsection (a) may consolidate such assistance with assistance received 
from related programs in accordance with the provisions of the Indian 
Employment, Training and Related Services Demonstration Act (Public Law 
102-477).
    (d) Regulations.--The Secretary shall consult with Indian, Alaska 
Native and Hawaiian Native groups in establishing regulations to carry 
out this section, including performance standards for entities 
receiving assistance under subsection (a), taking into account the 
economic circumstances of such groups.

SEC. 326. EMPLOYMENT, TRAINING, AND EDUCATION ASSISTANCE FOR MIGRANT 
              AND SEASONAL FARMWORKERS.

    (a) Authorization.--
            (1) In general.--From amounts reserved under section 
        4(a)(2) for any fiscal year, there shall be reserved one 
        quarter of one percent, or $85,000,000, whichever is less, to 
        provide grants to, or enter into contracts or cooperative 
        agreements with, entities described in paragraph (2) to provide 
        employment, training, and education assistance for migrant and 
        seasonal farmworkers.
            (2) Entities described.--An entity described in this 
        paragraph is an entity the Secretary determines to have the 
        capacity to administer effectively a diversified workforce 
        development program for migrant and seasonal farmworkers.
    (b) Use of Amounts.--An entity shall use amounts received under 
subsection (a) to provide employment, training, educational 
development, high school equivalency, postsecondary education 
assistance, vocational rehabilitation, literacy, English as a second 
language, work-based education and development, worker safety training, 
employability enhancements, emergency or other disaster relief, 
housing, technical assistance, outreach, intake, assessment, follow-up, 
stipend support, supportive services, other needs-based assistance, 
self-employment and related business enterprise development education, 
and the management of a database on participating migrant and seasonal 
farmworkers.
    (c) Regulations.--The Secretary shall consult with seasonal and 
migrant farmworker groups in establishing regulations to carry out this 
section, including performance standards for entities receiving 
assistance under subsection (a)(2), taking into account the economic 
circumstances of such groups.

 TITLE IV--ADULT EDUCATION AND FAMILY LITERACY CONSOLIDATION GRANT AND 
          LIBRARY SERVICES AND TECHNOLOGY CONSOLIDATION GRANT

SEC. 401. FINDINGS.

    The Congress finds as follows:
            (1) According to the 1990 census, 21 percent of our 
        Nation's adults (more than 38 million persons) lack a high 
        school credential or are limited English proficient.
            (2) The National Adult Literacy Survey, conducted under the 
        Adult Education Act, found that 20 percent of all adults in the 
        United States, or about 40 million people, have minimal levels 
        of literacy skills and that the lack of such skills is related 
        to unemployment, low wages, and fewer weeks worked.
            (3) The success of State efforts to reform and improve 
        public education are dependent on the ability of the United 
        States to break intergenerational cycles of illiteracy and 
        inadequate education by ensuring that parents possess a strong 
        educational foundation and, as the first and most continuous 
        teachers of their children, model for, and instill in, their 
        children a commitment to family literacy and life-long 
        learning.
            (4) Generations of immigrants have contributed to our 
        communities and our economy, but for them to continue to do so 
        given recent technologies and the competitive global economy, 
        they must master English as rapidly as possible.
            (5) Studies have found that incarcerated adults are twice 
        as likely as nonincarcerated adults to lack a good education 
        and that such lack is a significant statistical indicator of 
        recidivism.
            (6) Certain short-term and long-term goals of the Nation 
        may not be met unless the United States improves its current 
        system of adult education and life-long learning through 
        Federal leadership.

SEC. 402. DEFINITIONS.

    As used in this title:
            (1) Correctional education agency.--The term ``correctional 
        education agency'' means an entity that provides programs for 
        criminal offenders in corrections institutions and for other 
        institutionalized individuals which include academic programs
         for basic education, special education, bilingual or English 
language instruction, vocational training, library development, 
corrections education programs, guidance and counseling, and other 
supportive services for criminal offenders which may emphasize 
coordination of educational services with educational institutions, 
community-based organizations of demonstrative effectiveness, and the 
private sector, designed to provide education and training.
            (2) Educationally disadvantaged adult.--The term 
        ``educationally disadvantaged adult'' means an adult who--
                    (A) demonstrates basic skills equivalent to or 
                below that of students at the fifth grade level; or
                    (B) has been placed in the lowest or beginning 
                level of an adult education program when that program 
                does not use grade level equivalencies as a measure of 
                students' basic skills.
            (3) Family literacy services.--The term ``family literacy 
        services'' means services that are of sufficient intensity in 
        terms of hours, and of sufficient duration, to make sustainable 
        changes in a family and that integrate all of the following 
        activities:
                    (A) Interactive literacy activities between parents 
                and their children.
                    (B) Training for parents on how to be their 
                children's primary teacher and full partners in the 
                education of their children.
                    (C) Parent literacy training.
                    (D) An age-appropriate education program for 
                children.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.

  Subtitle A--Adult Education and Family Literacy Consolidation Grant

SEC. 411. PURPOSES.

    The purposes of this subtitle are to assist States to provide--
            (1) to adults, the basic educational skills necessary for 
        employment and self-sufficiency;
            (2) to adults who are parents, the educational skills 
        necessary to be full partners in the educational development of 
        their children;
            (3) to adults, the basic English language skills necessary 
        to participate in the civic, social, and economic life of the 
        United States; and
            (4) to adults, the opportunity to attain a high school 
        degree or its equivalent in order to permit them to pursue 
        further education and training or improve their family and work 
        situations.

                           CHAPTER 1--FUNDING

SEC. 421. RESERVATIONS FROM AMOUNTS APPROPRIATED.

    (a) National Institute for Literacy.--For any fiscal year, the 
Secretary shall reserve $4,500,000 of the amount appropriated under 
section 4(a)(3) to carry out the activities of the National Institute 
for Literacy described in section 441.
    (b) National Leadership Activities.--For any fiscal year, the 
Secretary shall reserve $4,500,000 of the amount appropriated under 
section 4(a)(3) to establish and carry out the program of national 
leadership and evaluation activities described in section 442.

SEC. 422. ALLOTMENT.

    (a) Initial Allotment.--From the sums available for the purpose of 
making grants under chapter 2 for any fiscal year, the Secretary shall 
allot--
            (1) $100,000 each to Guam, American Samoa, the Commonwealth 
        of the Northern Mariana Islands, and the Virgin Islands; and
            (2) $250,000 to each of the other States.
    (b) Additional Allotment.--
            (1) In general.--From the remainder of the sums described 
        in subsection (a) after the application of the subsection, the 
        Secretary shall allot to each State an amount which bears the 
        same ratio to such remainder as the number of qualifying adults 
        in the State bears to the number of such adults in all States.
            (2) Qualifying adult.--For purposes of this subsection, the 
        term ``qualifying adult'' means an adult who--
                    (A) is at least 16 years of age, but less than 61 
                years of age;
                    (B) is beyond the age of compulsory school 
                attendance under State law;
                    (C) does not have a certificate of graduation from 
                a school providing secondary education (or its 
                equivalent); and
                    (D) is not currently enrolled in elementary or 
                secondary school.

                      CHAPTER 2--GRANTS TO STATES

SEC. 431. REQUIREMENT TO MAKE GRANTS.

    For fiscal year 1997 and subsequent fiscal years, the Secretary 
shall make a grant to a State in an amount equal to the initial and 
additional allotments of the State for the year if the State--
            (1) has satisfied the requirements of title I and section 
        433(a)(1);
            (2) agrees not to expend the grant for any purpose other 
        than in accordance with section 432;
            (3) agrees to satisfy the grant requirements in section 
        433(a)(2) and 433(b); and
            (4) agrees not to expend the grant for the purpose of 
        supporting or providing programs, services, or activities for 
        individuals who are not adults, except if such programs, 
        services, or activities are related to family literacy 
        services.

SEC. 432. USES OF FUNDS.

    (a) State Uses of Funds.--
            (1) Grants to serve target populations.--
                    (A) In general.--Of the funds paid to a State under 
                this title for fiscal year 1998 and subsequent fiscal 
                years, 3 percent shall be distributed as performance 
                grants made by the State on a competitive basis, and 
                consistent with subsection (b) and section 433(b)(2), 
                to local service providers that have provided, during 
                the immediately preceding fiscal year, adult education 
                or family literacy services to the target populations 
                described in subparagraph (C).
                    (B) Local service providers.--The local service 
                providers referred to in subparagraph (A) may include 
                the following:
                            (i) Local educational agencies.
                            (ii) Correctional educational agencies.
                            (iii) Community-based organizations.
                            (iv) Public or private nonprofit agencies.
                            (v) Institutions of higher education.
                            (vi) Libraries.
                            (vii) Other institutions that the State 
                        determines to have the ability to provide 
                        literacy services to adults and families.
                    (C) Target populations.--The target populations 
                referred to in subparagraph (A) are the following:
                            (i) Adults with more than one barrier to 
                        self-sufficiency, such as being unemployed or 
                        an educationally disadvantaged adult.
                            (ii) Families on public assistance (as 
                        determined by the State).
                            (iii) Parents who are educationally 
                        disadvantaged adults and who have a child who 
                        is less than 8 years of age.
                            (iv) Adults who are individuals with 
                        disabilities or who have similar special needs.
            (2) Grants to local service providers.--Of the funds paid 
        to a State under this subtitle for any fiscal year that remain 
        after the application of paragraph (1), at least 85 percent 
        shall be distributed as grants made by the State on a 
        competitive basis, and consistent with subsection (b) and 
        section 433(b)(2), to local service providers to establish, 
        conduct, or expand programs, services, or activities to achieve 
        a purpose of this subtitle. Such local service providers may 
        include the local service providers described in paragraph 
        (1)(B).
            (3) Other state activities.--A State may use not more than 
        12 percent of the funds paid to the State under this subtitle 
        for any fiscal year that remain after the application of 
        paragraph (1) for one or more of the following purposes:
                    (A) The establishment or operation of professional 
                development programs to improve the quality of 
                instruction provided in local adult education and 
                literacy programs, including instruction provided by 
                volunteers.
                    (B) The provision of technical assistance to local 
                service providers.
                    (C) The provision of technology assistance to local 
                service providers to enable them to improve the quality 
                of their programs, services, and activities that 
                achieve a purpose of this subtitle, including--
                            (i) providing hardware and software;
                            (ii) paying for service connection fees 
                        associated with gaining access to computerized 
                        databases; and
                            (iii) upgrading the technological 
                        capabilities of local service providers to 
                        improve the quality of their services and to 
                        assist them in providing services on a flexible 
                        schedule that meets the needs of diverse 
                        populations.
                    (D) The support of State or regional networks of 
                literacy resource centers that--
                            (i) enhance the coordination of literacy 
                        services across public and private programs and 
                        State agencies;
                            (ii) enhance the capacity of the State and 
                        local service providers to provide literacy 
                        services through the diffusion and adoption of 
                        state-of-the-art teaching methods and 
                        technologies;
                            (iii) provide linkages between the National 
                        Institute for Literacy established under 
                        section 441 and local service providers for the 
                        sharing of literacy information, research, and 
                        resources;
                            (iv) encourage government and industry 
                        partnerships; and
                            (v) provide training and technical 
                        assistance to literacy instructors in reading 
                        instruction, the use of state-of-the-art 
                        methodologies, instructional materials, and 
                        technologies, and professional development.
                    (E) Monitoring and evaluating the quality of, and 
                the improvement in, services and activities conducted 
                with Federal financial assistance under this subtitle, 
                including carrying out section 433(a)(2).
                    (F) The support of a common management information 
                system as described in section 109.
                    (G) Carrying out other activities of statewide 
                significance that promote the purposes of this Act.
            (4) Administrative expenses.--For any fiscal year, a State 
        may use not more than 3 percent of the funds paid to the State 
        under this subtitle that remain after the application of 
        paragraph (1) or $50,000, whichever is greater, for--
                    (A) planning, administration, and interagency 
                coordination associated with a grant under this 
                subtitle; and
                    (B) support for integrated career center systems 
                described in section 107.
    (b) Local Uses of Funds.--A State shall require that a local 
service provider that receives a grant from the State under paragraph 
(1) or (2) of subsection (a) use the grant to establish or operate one 
or more programs that provide instruction or services within one or 
more of the following categories:
            (1) Adult basic education that is designed for an adult 
        who--
                    (A) has minimal competence in reading, writing, or 
                computation;
                    (B) is not sufficiently competent in reading, 
                writing, or computation to meet the requirements of 
                adult life in the United States; or
                    (C) is not sufficiently competent in speaking, 
                reading, or writing the English language to
                 obtain employment commensurate with the adult's 
intellectual abilities.
            (2) Adult secondary education that is designed for an adult 
        who is literate and can function in everyday life, but who--
                    (A) has not acquired basic educational skills, 
                including reading, writing, and computation; or
                    (B) does not have a certificate of graduation from 
                a school providing education to students in grade 12, 
                or its equivalent.
            (3) English literacy instruction that is designed for an 
        adult--
                    (A) who--
                            (i) has limited ability in speaking, 
                        reading, writing, or understanding the English 
                        language and whose native language is a 
                        language other than English; or
                            (ii) lives in a family or community 
                        environment where a language other than English 
                        is the dominant language; and
                    (B) who, by reason of a condition described in 
                subparagraph (A), has sufficient difficulty reading, 
                writing, or understanding the English language that the 
                adult is unable--
                            (i) to learn successfully in a classroom 
                        where the language of instruction is English; 
                        or
                            (ii) to participate fully in the society of 
                        the United States.
            (4) Family literacy services.
    (c) Authorization To Receive Payments From Other Programs.--A local 
service provider that receives a grant from a State under paragraph (1) 
or (2) of subsection (a), and that provides adult education and 
literacy services to an adult who was referred to the provider by a 
program supported under title II or III, may receive payment for the 
services from the program, either in the form of a career grant or by 
some other means.

SEC. 433. ADDITIONAL GRANT REQUIREMENTS.

    (a) Goals, Progress Indicators, Performance Measures.--
            (1) Planning requirements.--A State that desires to receive 
        a grant under this subtitle shall accomplish the following:
                    (A) Establish, through the collaborative process 
                described in section 103, measurable goals for 
                improving literacy levels, retention in literacy 
                programs, and long-term learning gains of individuals 
                in the State.
                    (B) Based on such goals and the performance 
                measures described in section 110(f), establish, 
                through such collaborative process, progress indicators 
                to be used to evaluate the performance of local service 
                providers receiving a grant under paragraph (1) or (2) 
                of section 432(a).
                    (C) Describe such goals and progress indicators in 
                the State workforce development and literacy plan 
                submitted to the Secretary under section 104.
            (2) Implementation requirements.--A State that receives a 
        grant under this subtitle shall accomplish the following:
                    (A) With respect to each local service provider 
                receiving a grant under paragraph (1) or (2) of section 
                432(a), based on the goals and progress indicators 
                established under paragraph (1), measure the 
                performance measures described in section 110(f) and 
                use the data produced by such measurement to improve 
                the quality of services provided to program 
                participants or service recipients.
                    (B) Beginning on the date that is 2 years after the 
                first date that a local service provider receives a 
                grant under paragraph (1) or (2) of section 432(a), 
                annually assess the degree to which the provider is 
                meeting or exceeding the progress indicators applicable 
                to the provider.
                    (C) Annually report to the Secretary on the 
                performance measures described in section 434 for each 
                category described in such section.
    (b) Other Requirements.--A State that receives a grant under this 
subtitle shall ensure the following:
            (1) Expenditures of non-federal funds.--For any fiscal year 
        for which a grant is made to the State under this subtitle, the 
        State shall expend, on programs and activities relating to 
        adult education and family literacy services, an amount, 
        derived from sources other than the Federal Government, equal 
        to 25 percent of the State's initial and additional allotments 
        for the year.
            (2) Priority for planning with boards and systems.--In 
        awarding grants to local service providers under paragraph (1) 
        or (2) of section 432(a), the State shall give priority to 
        providers that demonstrate joint planning with local workforce 
        development boards and integrated career center systems.
            (3) Equitable access.--Local educational agencies, public 
        or private nonprofit agencies, community-based organizations, 
        correctional education agencies, institutions of higher 
        education, libraries, and institutions which serve 
        educationally disadvantaged adults shall be provided direct and 
        equitable access to Federal funds provided under this subtitle 
        in accordance with this subtitle.
            (4) Payments by local workforce development boards to local 
        service providers.--A local service provider that receives a 
        grant from a State under paragraph (1) or (2) of section 432(a) 
        may negotiate with a local workforce development board with 
        respect to receipt of payments for adult education and literacy 
        services provided by the provider to adults referred to the 
        provider by a program supported under title II or III.

                      CHAPTER 3--NATIONAL PROGRAMS

SEC. 441. NATIONAL INSTITUTE FOR LITERACY.

    (a) Establishment.--
            (1) In general.--There shall be established a National 
        Institute for Literacy (in this section referred to as the 
        ``Institute''). The Institute shall be administered under the 
        terms of an interagency agreement entered into by the Secretary 
        of Education with the Secretary of Labor and the Secretary of 
        Health and Human Services (in this section referred to as the 
        ``Interagency Group''). The Secretary may include in the 
        Institute any research and development center, institute, or 
        clearinghouse established within the Department of Education 
        whose purpose is determined by the Secretary to be related to 
        the purpose of the Institute.
            (2) Board recommendations.--The Interagency Group shall 
        consider the recommendations of the National Institute for 
        Literacy Advisory Board (in this section referred to as the 
        ``Board'') established under subsection (d) in planning the 
        goals of the Institute and in the implementation of any 
        programs to achieve such goals.
            (3) Daily operations.--The daily operations of the 
        Institute shall be carried out by the Director of the Institute 
        appointed under subsection (g).
    (b) Duties.--
            (1) In general.--The Institute shall--
                    (A) provide national leadership for the improvement 
                and expansion of the system for delivery of literacy 
                services;
                    (B) coordinate the delivery of such services;
                    (C) support the creation of new methods of offering 
                improved services;
                    (D) serve as a national resource for adult 
                education and family literacy services by providing to 
                the public the best and most current information 
                available on the subjects; and
                    (E) assist States in developing levels of 
                performance.
            (2) Authorized activities.--In order to carry out the 
        duties described in paragraph (1), the Institute may--
                    (A) establish a national electronic database of 
                information that includes--
                            (i) information on--
                                    (I) effective practices in the 
                                provision of literacy and basic skills 
                                instruction;
                                    (II) public and private literacy 
                                and basic skills programs and Federal, 
                                State, and local policies affecting the 
                                provision of literacy services at the 
                                national, State, and local levels; and
                                    (III) technical assistance, 
                                meetings, conferences, and other 
                                opportunities that lead to the 
                                improvement of literacy and basic 
                                skills services; and
                            (ii) a communication network for literacy 
                        programs, providers, and students;
                    (B) coordinate support for the provision of 
                literacy and basic skills services across Federal 
                agencies and at the State and local level;
                    (C) coordinate the support of research and 
                development on literacy and basic skills in families 
                and adults across Federal agencies and carry out basic 
                and applied research and development on topics that are 
                not being investigated by other organizations or 
                agencies;
                    (D) collect and disseminate information on methods 
                of advancing literacy that show promise of success; and
                    (E) assist in the development of policy with 
                respect to literacy and basic skills.
            (3) Grants, contracts, and agreements.--The Institute may 
        enter into contracts or cooperative agreements with, or make 
        grants to, individuals, public or private institutions, 
        agencies, organizations, or consortia of such institutions, 
        agencies, or organizations to carry out the activities of the 
        Institute. Such grants, contracts, or agreements shall be 
        subject to the laws and regulations that generally apply to 
        grants, contracts, or agreements entered into by Federal 
        agencies.
    (c) Literacy Leadership.--
            (1) Fellowships.--The Institute, in consultation with the 
        Board, may award fellowships, with such stipends and allowances 
        as the Director considers necessary, to outstanding individuals 
        pursuing careers in adult education or literacy in the areas of 
        instruction, management, research, or innovation.
            (2) Use of fellowships.--Fellowships awarded under this 
        subsection shall be used, under the auspices of the Institute, 
        to engage in research, education, training, technical 
        assistance, or other activities to advance the field of adult 
        education or literacy, including the training of volunteer 
        literacy providers at the national, State, or local level.
            (3) Interns and volunteers.--The Institute, in consultation 
        with the Board, may award paid and unpaid internships to 
        individuals seeking to assist the Institute in carrying out its 
        mission. Notwithstanding section 1342 of title 31, United 
        States Code, the Institute may accept and use voluntary and 
        uncompensated services as the Institute determines necessary.
    (d) National Institute for Literacy Advisory Board.--
            (1) Establishment.--
                    (A) In general.--There shall be a National 
                Institute for Literacy Advisory Board. The Board shall 
                consist of 10 individuals appointed by the President 
                with the advice and consent of the Senate from 
                individuals who--
                            (i) are not otherwise officers or employees 
                        of the Federal Government; and
                            (ii) are representative of entities or 
                        groups described in subparagraph (B).
                    (B) Entities or groups described.--The entities or 
                groups referred to in subparagraph (A) are--
                            (i) literacy organizations and providers of 
                        literacy services, including--
                                    (I) nonprofit providers of literacy 
                                services;
                                    (II) providers of programs and 
                                services involving English language 
                                instruction; and
                                    (III) providers of services 
                                receiving assistance under this 
                                subtitle;
                            (ii) businesses that have demonstrated 
                        interest in literacy programs;
                            (iii) literacy students;
                            (iv) experts in the area of literacy 
                        research;
                            (v) State and local governments; and
                            (vi) representatives of employees.
            (2) Duties.--The Board shall--
                    (A) make recommendations concerning the appointment 
                of the Director and staff of the Institute;
                    (B) provide independent advice on the operation of 
                the Institute; and
                    (C) receive reports from the Interagency Group and 
                the Director.
            (3) Terms.--
                    (A) In general.--Each member of the Board shall be 
                appointed for a term of 3 years, except that the 
                initial terms for members may be 1, 2, or 3 years in 
                order to establish a rotation in which \1/3\ of the 
                members are selected each year.
                    (B) Vacancy appointments.--Any member appointed to 
                fill a vacancy occurring before the expiration of the 
                term for which the member's predecessor was appointed 
                shall be appointed only for the remainder of that term. 
                A member may serve after the expiration of that 
                members' term until a successor has taken office. A 
                vacancy in the Board shall be filled in the manner in 
                which the original appointment was made. A vacancy in 
                the Board shall not affect the powers of the Board.
            (4) Quorum.--A majority of the members of the Board shall 
        constitute a quorum but a lesser number may hold hearings. Any 
        recommendation may be passed only by a majority of its members 
        present.
            (5) Chairperson and vice chairperson.--The chairperson and 
        vice chairperson of the Board shall be elected by the members. 
        The term of office of the chairperson and vice chairperson 
        shall be 1 year.
            (6) Meetings.--The Board shall meet at the call of the 
        chairperson or a majority of its members.
    (e) Gifts, Bequests, and Devises.--The Institute may accept, 
administer, and use gifts or donations of services, money, or property, 
both real and personal.
    (f) Mails.--The Board and the Institute may use the United States 
mails in the same manner and under the same conditions as other 
departments and agencies of the United States.
    (g) Staff.--The Interagency Group, after considering 
recommendations made by the Board, shall appoint and fix the pay of a 
Director.
    (h) Applicability of Certain Civil Service Laws.--The Director and 
staff of the Institute may be appointed without regard to the 
provisions of title 5, United States Code, governing appointments in 
the competitive service, and may be paid without regard to the 
provisions of chapter 51 and subchapter III of chapter 53 of that title 
relating to classification and General Schedule pay rates, except that 
an individual so appointed may not receive pay in excess of the maximum 
rate payable under section 5376 of title 5, United States Code.
    (i) Experts and Consultants.--The Board and the Institute may 
procure temporary and intermittent services under section 3109(b) of 
title 5, United States Code.
    (j) Report.--The Institute shall submit a biennial report to the 
Interagency Group and the Congress.

SEC. 442. NATIONAL LEADERSHIP ACTIVITIES.

    (a) In General.--The Secretary shall establish and carry out a 
program of national leadership and evaluation activities to enhance the 
quality of adult education and family literacy programs nationwide.
    (b) Required Activity.--
            (1) In general.--The program of national leadership and 
        evaluation activities under subsection (a) shall include a 
        national evaluation, conducted by the Secretary, of the 
        programs and activities carried out by States and local service 
        providers with Federal funds received under this subtitle. Such 
        evaluation shall include information on the following:
                    (A) The manner in which States and local service 
                providers use Federal funds, including the manner in 
                which States allocate such funds among such providers.
                    (B) The manner in which States establish goals and 
                performance standards and use such goals and standards 
                to manage and improve programs.
                    (C) The effectiveness of the funds used under 
                subparagraphs (B) and (C) of section 432(a)(3).
                    (D) The manner in which economically disadvantaged 
                individuals and educationally disadvantaged adults are 
                being served by States and local service providers.
                    (E) The coordination between programs and 
                activities carried out with Federal funds received 
                under titles II and III and programs and activities 
                carried out with Federal funds received under this 
                subtitle.
                    (F) The percentage of individuals receiving a 
                service from an integrated career center system who are 
                referred by such system to a local service provider 
                providing adult education or literacy services.
            (2) Report.--Not later than September 30, 2001, the 
        Secretary shall provide to the Congress and publicly publish 
        the results of the evaluation conducted under paragraph (1).
    (c) Authorized Activities.--
            (1) In general.--The program of national leadership and 
        evaluation activities under subsection (a) may include the 
        following:
                    (A) Assisting States in developing levels of 
                performance.
                    (B) Research and development.
                    (C) Demonstration of model and innovative programs.
                    (D) Evaluations, including independent evaluations 
                of adult education and family literacy programs carried 
                out with financial assistance received pursuant to this 
                subtitle.
                    (E) Data collection.
                    (F) Professional development.
                    (G) Technical assistance to States and local 
                service providers receiving Federal financial 
                assistance pursuant to this subtitle.
                    (H) Making grants to State or regional networks of 
                literacy resource centers described in section 
                432(a)(3)(D).
                    (I) Other activities to enhance the quality of 
                adult education and family literacy programs 
                nationwide.
            (2) Grants, contracts, and cooperative agreements.--The 
        Secretary may carry out the activities described in paragraph 
        (1) directly or through grants, contracts, and cooperative 
        agreements.

    Subtitle B--Library Services and Technology Consolidation Grant

SEC. 451. PURPOSES.

    The purposes of this subtitle are--
            (1) to consolidate Federal library service programs;
            (2) to improve public access to information through 
        electronic networks; and
            (3) to provide linkages among and between libraries and 
        integrated career center systems.

SEC. 452. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated to carry 
out this subtitle $110,000,000 for each of the fiscal years 1997 
through 2002.
    (b) Advance Notice of Funding.--For the purpose of affording 
adequate notice of funding available under this subtitle, an 
appropriation to carry out this subtitle is authorized to be included 
in an appropriation Act for the fiscal year preceding the fiscal year 
for which such appropriation is first available for obligation.

SEC. 453. ALLOTMENTS.

    (a) Initial Allotments.--
            (1) In general.--From the sums appropriated under section 
        452 for any fiscal year, the Secretary shall allot--
                    (A) $40,000 each to Guam, American Samoa, the 
                Commonwealth of the Northern Mariana Islands, and the 
                Virgin Islands; and
                    (B) $200,000 to each of the other States.
            (2) Ratable reduction.--If the sums appropriated under 
        section 452 for any fiscal year are insufficient to pay all of 
        the allotments under paragraph (1), each such allotment shall 
        be ratably reduced.
    (b) Additional Allotments.--
            (1) In general.--From the remainder of the sums 
        appropriated under section 452 for any fiscal year after the 
        application of subsection (a), the Secretary shall allot to 
        each State an amount which bears the same ratio to such 
        remainder as the population of the State bears to the 
        population of all States.
            (2) Determination of population of states.--For the purpose 
        of this subsection, the population of each State, and the total 
        population of all States, shall be determined by the Secretary 
        on the basis of the most recent census data available to the 
        Secretary, and the Secretary shall use for such purpose, if 
        available, the annual interim current census data produced by 
        the Secretary of Commerce pursuant to section 181 of title 13, 
        United States Code.

SEC. 454. GRANTS TO STATES.

    (a) In General.--The Secretary shall make a grant for a fiscal year 
to a State if the State--
            (1) has submitted to the Secretary for the year an annual 
        application that has been approved by the Secretary under 
        section 456; and
            (2) has entered into a written agreement with the Secretary 
        that--
                    (A) the State will provide 100 percent of the funds 
                paid to the State under this subtitle for the year to 
                the State library administrative agency for the State;
                    (B) such agency will be required to use such funds 
                to carry out activities that--
                            (i) are described in such annual 
                        application;
                            (ii) achieve the purposes of this subtitle; 
                        and
                            (iii) satisfy the requirements of section 
                        455;
                    (C) there will be available from State and local 
                sources for expenditure by such agency to carry out 
                such activities an amount that equals or exceeds 25 
                percent of the total cost (as determined by the 
                Secretary) of carrying out such activities for the 
                year; and
                    (D) such agency has the fiscal and legal authority 
                and capability to administer all aspects of such 
                activities.
    (b) Amount of Grants.--The amount of a grant to a State under 
subsection (a) for a fiscal year shall equal the lesser of the 
following:
            (1) The sum of the initial and additional allotments of the 
        State for the year.
            (2) 75 percent of the total cost (as determined by the 
        Secretary) of carrying out the activities described in 
        subsection (a)(2)(B) for the year.

SEC. 455. USES OF FUNDS.

    (a) In General.--Of the funds provided to a State library 
administrative agency under section 454(a)(2)(A), the agency shall 
expend (either directly or through subgrants or cooperative agreements) 
at least 97 percent for one or more of the following purposes:
            (1) Electronically connecting libraries with integrated 
        career center systems designated or established under section 
        107 and local service providers receiving grants under 
        paragraph (1) or (2) of section 432(a).
            (2) Establishing or enhancing linkages among libraries.
            (3) Assisting libraries in accessing information through 
        electronic networks.
            (4) Encouraging libraries in different Federal, State, and 
        local jurisdictions, and different types of libraries, to 
        establish consortia and share resources.
            (5) Paying costs for libraries to acquire or share computer 
        systems and telecommunications technologies.
            (6) Improving library and information services for 
        individuals who have difficulty using a library or who need 
        special library materials or services, including individuals 
        under the age of 18.
    (b) Administrative Expenses.--In any fiscal year, a State library 
administrative agency may use not more than 3 percent of the funds 
provided to the agency under section 454(a)(2)(A) for planning, 
administration, evaluations, and interagency coordination associated 
with a grant under this subtitle.

SEC. 456. ANNUAL APPLICATIONS.

    (a) Submission.--A State that desires to receive a grant under this 
subtitle for a fiscal year shall submit to the Secretary, in such form 
and manner and before such deadline as the Secretary shall specify in 
regulations, an application for such year. Such application shall--
            (1) establish goals, and specify priorities, for the State 
        consistent with the purposes of this subtitle;
            (2) describe activities that are consistent with such goals 
        and priorities, the purposes of this subtitle, and the 
        requirements of section 455 that the State library 
        administrative agency will carry out during such year using 
        such grant;
            (3) describe the procedures that such agency will use to 
        carry out such activities;
            (4) describe the methodology that such agency will use to 
        evaluate the success of such activities in achieving such goals 
        and meeting such priorities;
            (5) describe procedures that such agency will use to 
        involve libraries and library users throughout the State in 
        policy decisions regarding implementation of this subtitle; and
            (6) provide assurances satisfactory to the Secretary that 
        such agency will make such reports, in such form and containing 
        such information, as the Secretary may reasonably require to 
        carry out this subtitle and to determine the extent to which 
        funds provided under this subtitle have been effective in 
        carrying out its purposes.
    (b) Approval.--
            (1) In general.--The Secretary shall approve each 
        application submitted under subsection (a) that satisfies the 
        requirements of the subsection.
            (2) Rights of states upon disapproval.--If the Secretary 
        determines that an application submitted by a State under 
        subsection (a) does not satisfy the requirements of such 
        subsection, the Secretary shall--
                    (A) immediately notify the State of such 
                determination and the reasons for such determination; 
                and
                    (B) offer the State an opportunity to revise its 
                application to correct any deficiencies.

           TITLE V--AMENDMENTS TO REHABILITATION ACT OF 1973

       Subtitle A--Vocational Rehabilitation Consolidation Grant

                      CHAPTER 1--TRANSITION PERIOD

SEC. 501. TRANSITION.

    With respect to the amendment made by section 511(a)(4) to title I 
of the Rehabilitation Act of 1973, the Secretary of Education, acting 
through the Commissioner of the Rehabilitation Services Administration, 
shall administer the amendment in accordance with the following:
            (1) During fiscal year 1996, the Secretary shall develop 
        administrative policies for implementing the amendment.
            (2) During the fiscal years 1997 and 1998, the Secretary 
        shall begin implementing the amendment in accordance with 
        paragraph (4).
            (3) The Secretary shall ensure that, by the first day of 
        fiscal year 1999, the amendment is fully implemented.
            (4) For purposes of paragraph (2), the Secretary shall 
        ensure that, before the first day of fiscal year 1999, the 
        following requirements, administered as conditions on the 
        receipt of grants under such title, have been met:
                    (A) The States have complied with section 103(b)(4) 
                of such title (as amended by section 511) regarding the 
                participation of certain providers.
                    (B) The States have established policies and made 
                arrangements for the operation of the system of career 
                grants described in section 103(c) of such title, 
                including with respect to the reimbursement of 
                providers.
                    (C) The States have established policies and made 
                arrangements under section 103(b)(12) of such title 
                regarding the training of the management and staff of 
                integrated career center systems with respect to 
                individuals with disabilities.
                    (D) The States have established policies and made 
                arrangements under section 104 of such title regarding 
                the establishment of such centers, including providing 
                for the significant participation of community-based 
                providers in the program carried out by the State 
                pursuant to such title.
                    (E) Such other requirements under the amendment as 
                the Secretary determines to be appropriate.
            (5)(A) Notwithstanding the amendment, during the fiscal 
        years 1996 through 1998, the provisions of title I of the 
        Rehabilitation Act of 1973 that were in effect on the day 
        before the date of the enactment of this Act continue to be in 
        effect, subject to paragraphs (1) through (4). In implementing 
        the amendment, the Secretary shall seek to avoid unnecessarily 
        disrupting the provision of services under such title to 
        individuals who, as of the date of the enactment of this Act, 
        were receiving services pursuant to an individualized plan 
        under such title.
            (B) On and after the first day of fiscal year 1999, the 
        provisions referred to in the first sentence of subparagraph 
        (A) do not have any legal effect.

      CHAPTER 2--REVISION OF TITLE I OF REHABILITATION ACT OF 1973

SEC. 511. REVISION OF TITLE I.

    (a) In General.--Effective October 1, 1995, the Rehabilitation Act 
of 1973 (29 U.S.C. 701 et seq.) is amended--
            (1) by transferring section 112 from the current placement 
        of the section;
            (2) by redesignating such section as section 510;
            (3) by adding such section at the end of title V; and
            (4) by amending title I to read as follows:

             ``TITLE I--VOCATIONAL REHABILITATION SERVICES

``SEC. 100. PURPOSE.

    ``The purpose of this title is to assist States in making available 
to individuals with disabilities a program of employment, training, and 
rehabilitation services that is consistent with their strengths, 
resources, priorities, concerns, abilities, and capabilities; that 
maximizes individuals' control over their vocational and career 
choices; and that is in accordance with the goal of assuring equality 
of opportunity, full participation, independent living, and economic 
self-sufficiency for such individuals.

``SEC. 101. FORMULA GRANTS.

    ``(a) In General.--
            ``(1) Formula grants.--In the case of each State that 
        submits to the Secretary a workforce development and literacy 
        plan for fiscal year 1999 or any subsequent fiscal year that 
        meets the requirement of section 104 of the Consolidated and 
        Reformed Education, Employment, and Rehabilitation Systems Act, 
        the Secretary shall make a grant for the year to the State as 
        the Federal share of carrying out the purposes specified in 
        this title. The grant shall consist of the allotment determined 
        for the State under section 107.
            ``(2) Conditions for grant.--A State may receive a grant 
        under paragraph (1) for a fiscal year only if the State meets 
        the conditions described in this title for the State for the 
        fiscal year.
    ``(b) Administrator of Federal Program.--The Secretary shall carry 
out this title acting through the Commissioner of the Rehabilitation 
Services Administration, except as indicated otherwise.
    ``(c) Rule of Construction.--The purpose specified in section 100 
shall be carried out only in accordance with the other provisions of 
this title.
    ``(d) Funding.--
            ``(1) Authorization of appropriations.--For the purpose of 
        carrying out this title, there are authorized to be 
        appropriated such sums as may be necessary for each of the 
        fiscal years 1999 through 2002, except that the amount to be 
        appropriated for a fiscal year shall not be less than the 
        amount of the appropriation under this subsection for the 
        immediately preceding fiscal year, plus the amount of the 
        Consumer Price Index addition determined under paragraph (2) 
        for the immediately preceding fiscal year.
            ``(2) Adjustments pursuant to consumer price index.--
                    ``(A) Not later than November 15 of each fiscal 
                year, the Secretary of Labor shall publish in the 
                Federal Register the percentage change in the Consumer 
                Price Index published for October of the preceding 
                fiscal year and October of the fiscal year in which 
                such publication is made.
                    ``(B) If in any fiscal year the percentage change 
                published under subparagraph (A) indicates an increase 
                in the Consumer Price Index, then the amount to be 
                appropriated under paragraph (1) for the subsequent 
                fiscal year shall be at least the amount appropriated 
                for the fiscal year in which the publication is made 
                under subparagraph (A) increased by such percentage 
                change.
                    ``(C) If in any fiscal year the percentage change 
                published under subparagraph (A) does not indicate an 
                increase in the Consumer Price Index, then the amount 
                to be appropriated under paragraph (1) for the 
                subsequent fiscal year shall be at least the amount 
                appropriated for the fiscal year in which the 
                publication is made under subparagraph (A).
                    ``(D) For purposes of this paragraph, the term 
                `Consumer Price Index' means the Consumer Price Index 
                for All Urban Consumers, published monthly by the 
                Bureau of Labor Statistics.
            ``(3) Automatic extension of authorization.--
                    ``(A) Unless, in the regular session that ends 
                prior to the beginning of the last fiscal year for 
                which an authorization of appropriations is provided in 
                paragraph (1), legislation has been enacted that has 
                the effect of extending such authorization, such 
                authorization is automatically extended for one 
                additional year.
                    ``(B) The amount authorized to be appropriated for 
                the additional fiscal year described in subparagraph 
                (A) shall be an amount equal to the amount appropriated 
                for such program for fiscal year 2002, plus the amount 
                of the Consumer Price Index addition determined under 
                paragraph (2) for the immediately preceding fiscal 
                year.
                    ``(C) In any case where the Commissioner is 
                required under an applicable statute to carry out 
                certain acts or make certain determinations that are 
                necessary for the continuation of the program 
                authorized by this title, and such acts or 
                determinations are required during the last fiscal year 
                for which an authorization of appropriations is 
                provided in paragraph (1), such acts and determinations 
                shall be required during any fiscal year for which 
                subparagraph (A) is in operation.

``SEC. 102. ALLOCATION WITHIN STATE OF ADMINISTRATIVE RESPONSIBILITIES.

    ``(a) In General.--For purposes of section 101(a), a State will--
            ``(1) subject to subsection (b), reserve not more than 20 
        percent of the grant under such section for the fiscal year 
        involved for carrying out the responsibilities of a State 
        administrative agent under section 103; and
            ``(2) reserve not less than 80 percent of the grant for 
        carrying out the responsibilities under section 104 of local 
        workforce development boards and integrated career center 
        systems with respect to workforce development areas.
    ``(b) Additional State Responsibilities.--Amounts reserved by a 
State under subsection (a)(1) may be expended by the State 
administrative agent to carry out responsibilities that otherwise would 
be carried out under section 104 by local workforce development boards 
or integrated career center systems, if the State determines that such 
expenditures are justified to make available goods and services that 
could not otherwise be obtained within a local workforce development 
area, to provide services to individuals unable to utilize the 
integrated career center systems, or to otherwise ensure the efficient 
and equitable provision in the State of services under this title, 
including the provision of services for individuals in rural areas.
    ``(c) Certain Definitions.--For purposes of this Act, the terms 
`State administrative agent', `local workforce development area', 
`local workforce development board', and `integrated career center' 
have the meanings given such terms in sections 105 through 108, 
respectively, of the Consolidated and Reformed Education, Employment, 
and Rehabilitation Systems Act.

``SEC. 103. RESPONSIBILITIES OF STATE ADMINISTRATIVE AGENT.

    ``(a) State Administrative Agent.--In carrying out the requirements 
of the Consolidated and Reformed Education, Employment, and 
Rehabilitation Systems Act, a Governor may designate--
            ``(1) one State administrative agent to be responsible for 
        carrying out this title for individuals who are blind; and
            ``(2) a different State administrative agent to carry out 
        the remaining responsibilities in this title.
    ``(b) Responsibilities.--For purposes of section 101(a) and the 
operation in a State of the program under this title:
            ``(1) This subsection, and the subsequent provisions of 
        this section, will be carried out by State administrative 
        agents designated by the Governor in accordance with subsection 
        (a), through the collaborative process established under 
        section 103 of the Consolidated and Reformed Education, 
        Employment, and Rehabilitation Systems Act.
            ``(2)(A) The State will provide to the public an 
        explanation of the methods by which the State will provide 
        vocational rehabilitation services (as defined in section 
        104(b))--
                    ``(i) to all eligible individuals (as defined in 
                section 105(d)); and
                    ``(ii) within all local workforce delivery areas in 
                the State.
            ``(B) In the event that such services cannot be provided to 
        all eligible individuals who apply for the services, the State 
        will show and provide the justification for the order to be 
        followed in selecting individuals to whom the services will be 
        provided.
            ``(C) The order of selection under subparagraph (B) will be 
        determined on the basis of serving first those individuals with 
        the most severe disabilities, in accordance with criteria 
        established by the State.
            ``(3) The State will establish guidelines providing that, 
        in the case of an individual to whom the State will provide a 
        service (in accordance with the order of selection under 
        paragraph (2) and the assessment of needs under section 
        104(c)(1)), the individual will have the option of receiving 
        the service from a provider designated by the center or from a 
        provider selected by the individual pursuant to career grants 
        under subsection (c).
            ``(4) Pursuant to section 109 of the Consolidated and 
        Reformed Education, Employment, and Rehabilitation Systems Act, 
        the State will make significant efforts to encourage the 
        participation in the State program of community-based private 
        providers, with special consideration given to providers who 
        have received funds under this Act regarding projects with 
        industry or supported employment services, or under the Act 
        commonly known as the Javits-Wagner-O'Day Act (41 U.S.C. 46 et 
        seq.) for employment and training services.
            ``(5) The State will establish provisions to govern 
        determinations under section 105 (relating to the eligibility 
        of individuals).
            ``(6) The State will establish standards to govern the 
        conduct under section 104(c)(1) of assessments of need, 
        including the development of a methodology that will be applied 
        in a reasonably uniform manner to all individuals for whom such 
        assessments are conducted, and that (subject to the order of 
        selection under paragraph (2)) will be designed to prevent 
        substantial disparities, among individuals with comparable 
        circumstances, in the monetary value of the services to be 
        provided pursuant to the assessments.
            ``(7)(A) The State will establish procedures through which 
        an individual may request and obtain an impartial review, 
        utilizing an impartial hearing officer, of whether standards 
        for determinations of eligibility for services, assessments of 
        vocational rehabilitation needs, and development of 
        individualized rehabilitation and employment plans under this 
        title were correctly applied to the individual by the 
        integrated career center system involved.
            ``(B) The State will designate a number of days (applied 
        uniformly to all individuals) within which review under 
        subparagraph (A) will be conducted once a request for such 
        review is made by an individual, subject to subparagraph (C).
            ``(C)(i) The State will provide that there may be an 
        informal hearing, mediation, or alternatives to such review, if 
        agreed upon by the individual and the integrated career center 
        system involved.
            ``(ii) The State will provide that if, in a process 
        utilized under clause (i) by an individual, there is not a 
        final disposition of the matter involved, review under 
        subparagraph (A) will remain available to the individual.
            ``(8) The State will ensure that vocational rehabilitation 
        services under this title, and related core services, are 
        provided by personnel who are qualified to provide the services 
        involved. For purposes of the preceding sentence, the term 
        `core services' has the meaning indicated for such term under 
        title I of the Consolidated and Reformed Education, Employment, 
        and Rehabilitation Systems Act.
            ``(9) The State will establish plans, policies, and 
        procedures to be followed in carrying out the program under 
        this title in the State (including entering into a formal 
        interagency cooperative agreement with education officials 
        responsible for the provision of a free appropriate public 
        education to students who are individuals with disabilities). 
        The State will ensure that such plans, policies, and procedures 
        are designed in accordance with the following:
                    ``(A)(i) To facilitate the development and 
                accomplishment of the goals and objectives described in 
                clause (ii) (including the specification of plans for 
                coordination with the educational agencies in the 
                provision of transition services), to the extent that 
                the goals and objectives are included in an 
                individualized education program of a student.
                    ``(ii) The goals and objectives referred to in 
                clause (i) are long-term rehabilitation goals; 
                intermediate rehabilitation objectives; and goals and 
                objectives related to enabling a student to live 
                independently before the student leaves a school 
                setting.
                    ``(B) To facilitate the transition from the 
                provision of a free appropriate public education under 
                the responsibility of an educational agency to the 
                provision of vocational rehabilitation services under 
                this title, including the specification of plans for 
                coordination with educational agencies in the provision 
                of transition services to an individual.
                    ``(C) To provide for--
                            ``(i) provisions for determining State lead 
                        agencies and qualified personnel responsible 
                        for transition services;
                            ``(ii) procedures for outreach to and 
                        identification of youth in need of such 
                        services; and
                            ``(iii) a timeframe for evaluation and 
                        follow-up of youth who have received such 
                        services.
            ``(10) The State will provide for coordination and working 
        relationships with the Statewide Independent Living Council 
        established under section 705 and independent living centers 
        within the State.
            ``(11) The State will provide for interagency cooperation 
        with, and the utilization of the services and facilities of, 
        the State agencies administering the State's public assistance 
        programs, and other programs for individuals with disabilities.
            ``(12) With respect to the integrated career center system 
        operated pursuant to section 104, the State will provide for 
        the appropriate training of the management and staff of the 
        centers regarding the effective provision of services to 
        individuals with disabilities.
            ``(13) The State will provide technical assistance to local 
        boards, integrated career center systems, and providers 
        relating to the effective provision of vocational 
        rehabilitation services under this title, including the 
        effective development of individualized rehabilitation and 
        employment plans, and will ensure that such technical 
        assistance is provided through appropriate means.
    ``(c) Availability of Career Grants System Regarding Services.--For 
purposes of section 101(a) and the operation in a State of the program 
under this title:
            ``(1) The State will provide for the establishment of a 
        system to carry out this subsection.
            ``(2) In the case of an eligible individual who (in 
        accordance with the order of selection under subsection (b)(2) 
        and the assessment of needs under section 105(b)(2)(A)) will 
        receive vocational rehabilitation services under this title, 
        the integrated career center involved will, upon request of the 
        individual, provide to the individual career grants in 
        accordance with this subsection.
            ``(3) Career grants under this subsection will enable such 
        individual to obtain the vocational rehabilitation services 
        involved from providers selected by the individual from among a 
        list of providers approved by the State for such purpose in 
        accordance with section 109 of the Consolidated and Reformed 
        Education, Employment, and Rehabilitation Systems Act.
            ``(4) The monetary value of a career grant provided to the 
        individual for a particular type of service will be calculated 
        at a fair market value.
            ``(5) To the extent practicable, the list of providers 
        under paragraph (3) will provide for the availability within 
        each local workforce development area of a broad range of 
        services.
            ``(6) The aggregate value of the career grants available to 
        the individual will be established in proportion to the degree 
        of the individual's need for rehabilitation (as determined 
        under section 104(c)(1)). Such value regarding the individuals 
        may be adjusted to address emerging needs that arise during the 
        course of the individual's rehabilitation and employment 
        program.
    ``(d) State Options.--With respect to compliance with this section, 
a State may, in the discretion of the State, expend a grant under 
section 101 for the following:
            ``(1) To disseminate findings from research regarding 
        vocational rehabilitation services, after consideration of 
        requests from local workforce development boards and integrated 
        career center systems regarding the types of information needed 
        by such boards and centers.
            ``(2) To conduct demonstration projects regarding 
        improvements with respect to vocational rehabilitation 
        services, subject to providing the results of such projects to 
        the Commissioner and as appropriate disseminating the results 
        within the State.

``SEC. 104. RESPONSIBILITIES FOR LOCAL BOARDS AND SERVICE CENTERS.

    ``(a) Provision of Vocational Rehabilitation Services.--For 
purposes of section 101(a) and the operation in a State of the program 
under this title:
            ``(1) This section will be carried out by the integrated 
        career center system in the State, with each such center acting 
        under the guidance of the local workforce development board for 
        the local workforce area within which the integrated career 
        center system operates. Such centers will provide services 
        under this section directly or through contract.
            ``(2) In accordance with the order of selection under 
        section 103(b)(2), an integrated career center system will, in 
        expending amounts provided to the center from a grant under 
        section 101, carry out the following:
                    ``(A) Make determinations under section 105 of the 
                eligibility of individuals for vocational 
                rehabilitation services (as defined in subsection (b)).
                    ``(B) Provide for vocational rehabilitation 
                services for eligible individuals.
                    ``(C) In the case of individuals with severe 
                disabilities, conduct outreach and intake activities 
                for such individuals who are not able to directly 
                access the integrated career center system because of 
                the nature of their disabilities.
            ``(3) An integrated career center system will, in expending 
        amounts provided to the center from a grant under section 101, 
        make vocational rehabilitation services available at a variety 
        of locations and, as appropriate for particular populations, in 
        a variety of environments.
    ``(b) Definition.--For purposes of this title, the term `vocational 
rehabilitation services' means such goods or services for eligible 
individuals as are--
            ``(1) necessary to render the individuals employable and 
        achieve an employment outcome; and
            ``(2) provided in response to needs that arise, to a 
        significant extent, from the disability involved and do not 
        duplicate, to any significant extent, the core services 
        available under title I of the Consolidated and Reformed 
        Education, Employment, and Rehabilitation Systems Act.
    ``(c) Certain Services.--For purposes of section 101(a), the 
vocational rehabilitation services available through integrated career 
center systems will include the following:
            ``(1) An assessment of the needs of eligible individuals 
        for such services.
            ``(2) Development, in accordance with section 105(b)(2), of 
        an individualized rehabilitation and employment plan for the 
        purpose of identifying employment goals, appropriate 
        intermediate rehabilitation objectives, and an appropriate 
        combination of goods and services for the individual to achieve 
        the employment goals.
            ``(3) Counseling, guidance, and work-related placement 
        services for individuals with disabilities, including job 
        search assistance, placement assistance, job retention 
        services, personal assistance services, and follow-up, follow-
        along, and specific postemployment services necessary to assist 
        such individuals to maintain, regain, or advance in employment.
            ``(4) Vocational and other training services for 
        individuals with disabilities, including personal and 
        vocational adjustment, books, or other training materials, and 
        such services to the families of such individuals as are 
        necessary to the adjustment or rehabilitation of such 
        individuals.
            ``(5) Rehabilitation technology services.
            ``(6) Supported employment services.
            ``(7) Physical and mental restoration services.
            ``(8) Interpreter services for individuals who are deaf, 
        and reader services for individuals who are blind.
            ``(9) Rehabilitation teaching services and orientation and 
        mobility services for individuals who are blind.
            ``(10) Referral and other services designed to assist 
        individuals with disabilities in securing needed services from 
        other agencies through agreements developed under section 
        103(b)(10), if such services are not available under this Act.
            ``(11) Transportation in connection with the rendering of 
        any vocational rehabilitation service.
            ``(12) Telecommunications, sensory, and other technological 
        aids and devices.
            ``(13) On-the-job, or other related personal-assistance 
        services, provided while eligible individuals are receiving 
        other vocational rehabilitation services under this title.
    ``(d) Certain Arrangements.--For purposes of section 101(a), an 
integrated career center system will, with respect to the provision of 
vocational rehabilitation services to individuals with the most severe 
disabilities, provide for necessary arrangements with community-based 
providers, including arrangements regarding supported employment 
services and extended services, periodic reviews of individuals placed 
in extended employment, and services to promote movement from extended 
employment to integrated employment.
    ``(e) Optional Provision of Other Services.--For purposes of this 
title, an integrated career center system may provide such vocational 
rehabilitation services in addition to the services specified in 
subsection (c) as the center determines to be appropriate.
    ``(f) Allocation for Core Services.--For purposes of section 
101(a):
            ``(1) With respect to a fiscal year, a local workforce 
        development board receiving amounts from a grant under section 
        101 will reserve an amount for the provision of core services 
        under title I of the Consolidated and Reformed Education, 
        Employment, and Rehabilitation Systems Act.
            ``(2) The amount so reserved will be based on the number of 
        eligible individuals with disabilities in the local workforce 
        development area and the costs of training employees of the 
        integrated career center system to provide high-quality 
        services to individuals with disabilities.
    ``(g) Performance Payments Regarding Career Grants.--For purposes 
of section 101(a):
            ``(1) The local workforce development board involved will 
        ensure that, in providing for the payment of services provided 
        pursuant to career grants, a portion of the total payment is 
        withheld from the provider until the delivery of the services 
        involved is completed in reasonable accordance with the outcome 
        designated for the service pursuant to a prior understanding 
        with the provider.
            ``(2) In the case of education, training, and placement 
        services that are designed to lead to an employment outcome, a 
        portion of the total payment will be withheld from the provider 
        until--
                    ``(A) the participant has successfully completed 
                the training; and
                    ``(B) the participant has been employed, and has 
                retained employment for a period of not less than 90 
                days.
    ``(h) Payor of Last Resort Regarding Medical Services and 
Educational Assistance.--For purposes of section 101(a), a State will 
not expend a grant under section 101 to pay for training services in 
institutions of higher education, or to pay for medical services, 
unless significant efforts have been made to secure payments, in whole 
or in part, from other sources, except that such efforts are not 
required if making the efforts would delay the provision of such 
services to any eligible individual who is at extreme medical risk, or 
if making the efforts would result in the loss of a job placement that 
(but for the efforts) would be immediately available to an eligible 
individual.

``SEC. 105. ELIGIBLE INDIVIDUAL.

    ``(a) In General.--For purposes of section 101:
            ``(1) An individual will not receive vocational 
        rehabilitation services under this title unless the 
        individual--
                    ``(A) is an individual with a disability under 
                section 7(8)(A); and
                    ``(B) requires vocational rehabilitation services 
                to prepare for, enter, engage in, or retain gainful 
                employment.
            ``(2) If the individual has a disability or is blind as 
        determined pursuant to title II or title XVI of the Social 
        Security Act, the individual will be considered to have--
                    ``(A) a physical or mental impairment which for 
                such individual constitutes or results in a substantial 
                impediment to employment under section 7(8)(A)(i); and
                    ``(B) a severe physical or mental impairment which 
                seriously limits one or more functional capacities in 
                terms of an employment outcome under section 
                7(15)(A)(i).
            ``(3) It will be presumed that an individual can benefit in 
        terms of an employment outcome from vocational rehabilitation 
        services for purposes of section 7(8)(A)(ii), unless the 
        integrated career center
         system involved can demonstrate by clear and convincing 
evidence that such individual is incapable of benefiting from 
vocational rehabilitation services in terms of an employment outcome.
    ``(b) Process.--For purposes of section 101(a), a State will ensure 
that, subject to the order of selection under section 102(b)(2), the 
following applies to an individual:
            ``(1) Once the individual makes a request in person for a 
        determination of eligibility:
                    ``(A) A qualified rehabilitation adviser will be 
                made available to the individual regarding the process 
                of obtaining services under this title.
                    ``(B) An initial interview will be conducted, 
                followed by an initial assessment.
                    ``(C) A final determination will be made not later 
                than 30 days after the request (subject to the 
                cooperation of the individual in the process of 
                determination).
                    ``(D) The determination of eligibility will be 
                based on the review of existing data described in 
                clause (i) of section 7(22)(A), and, to the extent 
                necessary, the preliminary assessment described in 
                clause (ii) of such section.
                    ``(E) If it is determined that the individual is 
                not an eligible individual, the individual will be 
                provided a written statement explaining the following:
                            ``(i) The basis of the determination.
                            ``(ii) The availability of impartial review 
                        under section 103(b)(7).
                            ``(iii) The availability of services under 
                        the client assistance program under section 
                        510.
            ``(2)(A) If it is determined that the individual is an 
        eligible individual--
                    ``(i) the needs of the individual for vocational 
                rehabilitation services will be assessed; and
                    ``(ii) subject to subparagraph (D), an 
                individualized rehabilitation and employment plan will 
                be developed for the individual regarding the provision 
                of services pursuant to clause (i).
            ``(B) The plan under subparagraph (A) will be developed and 
        mutually agreed upon by the individual and an appropriate staff 
        member of the integrated career center system involved.
            ``(C) A plan under subparagraph (A) is individualized if 
        the plan is consistent with the unique strengths, resources, 
        priorities, concerns, abilities, and capabilities of the 
        individual for whom the plan is developed.
            ``(D) A plan under subparagraph (A) is not required for an 
        individual if the individual signs a waiver stating that such a 
        plan is not necessary for the individual.
    ``(c) Rule of Construction.--This title may not be construed as 
establishing an entitlement in any individual.
    ``(d) Definition.--For purposes of this title, the term `eligible 
individual' means an individual described in subsection (a)(1).

``SEC. 106. STATE REHABILITATION ADVISORY COUNCIL.

    ``(a) In General.--For purposes of section 101(a):
            ``(1) A State will establish a State Rehabilitation 
        Advisory Council (referred to in this section as the `Council') 
        in accordance with this section.
            ``(2) The Council will be composed of the following:
                    ``(A) Representatives of organizations within the 
                State providing services to individuals with 
                disabilities and their families, including 
                representatives of the client assistance program under 
                section 510.
                    ``(B) Representatives of business, industry, and 
                labor.
                    ``(C) Representatives of disability advocacy groups 
                representing a cross section of--
                            ``(i) individuals with physical, cognitive, 
                        sensory, and mental disabilities; and
                            ``(ii) parents, family members, guardians, 
                        advocates, or authorized representatives, of 
                        individuals with disabilities who have 
                        difficulty in representing themselves or are 
                        unable due to their disabilities to represent 
                        themselves.
            ``(3) The State administrative agent will be an ex officio 
        member of the Council.
            ``(4) Members of the Council will be appointed by the 
        Governor or another entity that has appointment authority under 
        State law.
            ``(5) A majority of Council members will be persons who 
        are--
                    ``(A) individuals with disabilities described in 
                section 7(8)(B); and
                    ``(B) not employed by the designated State 
                administrative agent.
            ``(6)(A) Except as provided in subparagraph (B), the 
        Council will select a chairperson from among the membership of 
        the Council.
            ``(B) In States in which the Governor does not have veto 
        power pursuant to State law, the Governor will designate a 
        member of the Council to serve as the chairperson of the 
        Council or will require the Council to so designate such a 
        member.
            ``(7) Each member of the Council will serve for a term 
        determined by the Governor or another entity that has 
        appointment authority under State law.
            ``(8) Any vacancy occurring in the membership of the 
        Council will be filled in the same manner as the original 
        appointment. The vacancy will not affect the power of the 
        remaining members to execute the duties of the Council.
    ``(b) Functions of Council.--For purposes of section 101(a), the 
Council will carry out the following:
            ``(1) Advise the collaborative process under section 103 of 
        the Consolidated and Reformed Education, Employment, and 
        Rehabilitation Systems Act, and the State administrative agent, 
        in the preparation of the State workforce development and 
        literacy plan and other plans, reports, needs assessments, and 
        evaluations required by this title.
            ``(2) To the extent feasible, conduct a review and analysis 
        of the effectiveness of, and consumer satisfaction with, the 
        delivery of core services and vocational rehabilitation 
        services to individuals with disabilities within the State.
            ``(3) Prepare and submit an annual report to the 
        collaborative process or appropriate State administrative agent 
        and the Commissioner on the status of vocational rehabilitation 
        programs operated within the State, and make the report 
        available to the public.
            ``(4) Coordinate with other councils within the State 
        established to address the needs of individuals with 
        disabilities.
            ``(5) Perform such other functions, consistent with the 
        purpose of this title, as the State Rehabilitation Advisory 
        Council determines to be appropriate, that are comparable to 
        the other functions performed by the Council.
    ``(c) Resources.--
            ``(1) Plan.--For purposes of section 101(a), the Council 
        will prepare, in conjunction with the State administrative 
        agent, a plan for the provision of such resources, including 
        such staff and other personnel, as may be necessary to carry 
        out the functions of the Council under this section. The 
        resource plan shall, to the maximum extent possible, rely on 
        the use of resources in existence during the period of 
        implementation of the plan.
            ``(2) Resolution of disagreements.--For purposes of section 
        101(a), to the extent that there is a disagreement between the 
        Council and the State administrative agent in regard to the 
        resources necessary to carry out the functions of the Council 
        as set forth in this section, the disagreement will be resolved 
        by the Governor or appointing agency identified in subsection 
        (a)(4).
            ``(3) Supervision and evaluation.--For purposes of section 
        101(a), the Council will, consistent with State law, supervise 
        and evaluate such staff and other personnel as may be necessary 
        to carry out its functions under this section.
            ``(4) Personnel conflict of interest.--For purposes of 
        section 101(a), while assisting the Council in carrying out its 
        duties, staff and other personnel will not be assigned duties 
        by the State administrative agent or any other agency or office 
        of the State, that would create a conflict of interest.
    ``(d) Conflict of Interest.--For purposes of section 101(a), no 
member of the Council will cast a vote on any matter that would provide 
direct financial benefit to the member or otherwise give the appearance 
of a conflict of interest under State law.
    ``(e) Meetings.--For purposes of section 101(a), the Council will 
convene meetings and conduct such forums or hearings as the Council 
considers appropriate. The meetings, hearings, and forums will be 
publicly announced. The meetings will be open and accessible to the 
general public unless there is a valid reason for an executive session.
    ``(f) Compensation and Expenses.--For purposes of section 101(a), 
the Council may use funds appropriated under this title to reimburse 
members of the Council for reasonable and necessary expenses of 
attending Council meetings and performing Council duties (including 
child care and personal assistance services), and to pay compensation 
to a member of the Council, if such member is not employed or must 
forfeit wages from other employment, for each day the member is engaged 
in performing the duties of the Council.
    ``(g) Rule of Construction.--Nothing in this section prohibits a 
State from establishing and providing funds to a separate council to 
carry out functions described in subsection (b) with respect to 
vocational rehabilitation services for individuals who are blind.
``SEC. 107. AMOUNT OF ALLOTMENT.

    ``(a)(1) Subject to the provisions of subsection (d), for each 
fiscal year beginning before October 1, 1978, each State shall be 
entitled to an allotment of an amount bearing the same ratio to the 
amount authorized to be appropriated under section 101(d) for allotment 
under this section as the product of (A) the population of the State, 
and (B) the square of its allotment percentage, bears to the sum of the 
corresponding products for all the States.
    ``(2)(A) For each fiscal year beginning on or after October 1, 
1978, each State shall be entitled to an allotment in an amount equal 
to the amount such State received under paragraph (1) for the fiscal 
year ending September 30, 1978, and an additional amount determined 
pursuant to subparagraph (B) of this paragraph.
    ``(B) For each fiscal year beginning on or after October 1, 1978, 
each State shall be entitled to an allotment, from any amount 
authorized to be appropriated for such fiscal year under section 101(d) 
for allotment under this section in excess of the amount appropriated 
under such section for the fiscal year ending September 30, 1978, in an 
amount equal to the sum of--
            ``(i) an amount bearing the same ratio to 50 percent of 
        such excess amount as the product of the population of the 
        State and the square of its allotment percentage bears to the 
        sum of the corresponding products for all the States; and
            ``(ii) an amount bearing the same ratio to 50 percent of 
        such excess amount as the product of the population of the 
        State and its allotment percentage bears to the sum of the 
        corresponding products for all the States.
    ``(3) The sum of the payment to any State (other than Guam, 
American Samoa, the Virgin Islands, and the Northern Mariana Islands) 
under this subsection for any fiscal year which is less than one-third 
of 1 percent of the amount appropriated under section 101(d), or 
$3,000,000, whichever is greater, shall be increased to that amount, 
the total of the increases thereby required being derived by 
proportionately reducing the allotment to each of the remaining such 
States under this subsection, but with such adjustments as may be 
necessary to prevent the sum of the allotments made under this 
subsection to any such remaining State from being thereby reduced to 
less than that amount.
    ``(4) For each fiscal year beginning on or after October 1, 1984, 
for which any amount is appropriated pursuant to section 101(d), each 
State shall receive an allocation (from such appropriated amount) in 
addition to the allotment to which such State is entitled under 
paragraphs (2) and (3) of this subsection. Such additional allocation 
shall be an amount which bears the same ratio to the amount so 
appropriated as that State's allotment under paragraphs (2) and (3) of 
this subsection bears to the sum of such allotments of all the States.
    ``(b)(1) If the payment to a State pursuant to this section for a 
fiscal year is less than the total payments such State received under 
section 2 of the Rehabilitation Act for the fiscal year ending June 30, 
1973, such State shall be entitled to an additional payment (subject to 
the same terms and conditions applicable to other payments under this 
title) equal to the difference between the payment under this section 
and the amount so received by it.
    ``(2) If a State receives as its Federal share pursuant to this 
section for any fiscal year less than the applicable Federal share of 
the expenditure of such State for fiscal year 1972 for vocational 
rehabilitation services under the plan for such State approved under 
section 101 as in effect for such year (including any amount expended 
by such State for the administration of the State plan but excluding 
any amount expended by such State from non-Federal sources for 
construction under such plan), such State shall be entitled to an 
additional payment for such fiscal year, subject to the same terms and 
conditions applicable to other payments under this title, equal to the 
difference between such payment pursuant to this section and an amount 
equal to the applicable Federal share of such expenditure for 
vocational rehabilitation services.
    ``(3) Any payment attributable to the additional payment to a State 
under this subsection shall be made only from appropriations 
specifically made to carry out this subsection, and such additional 
appropriations are hereby authorized.
``SEC. 108. STATE OPTION FOR WAIVERS REGARDING ALTERNATIVE DELIVERY 
              SYSTEMS.

    ``(a) In General.--In the case of the requirements specified in 
subsection (b), the Secretary shall provide to a State a waiver of such 
requirements as the State elects, if (subject to the other provisions 
of this section) the following conditions are met:
            ``(1) The Governor, through the collaborative process under 
        section 103 of the Consolidated and Reformed Education, 
        Employment, and Rehabilitation Systems Act, develops a proposed 
        plan for alternative approaches (to be implemented by the State 
        in lieu of the requirements involved).
            ``(2) The proposal is approved by each local workforce 
        development board in whose local
         workforce development area the proposal (or any component of 
the proposal) is to be effective.
            ``(3) The local workforce development boards involved, and 
        the Governor, determine that the following conditions have been 
        met:
                    ``(A) The proposal will better fulfill the purposes 
                of this title than would compliance with the 
                requirements involved.
                    ``(B) In the development of the alternative 
                approaches, the public was afforded a reasonable 
                opportunity to comment on the proposed alternative 
                approaches.
            ``(4) The Governor submits to the Secretary the following 
        documents:
                    ``(A) A notification that the State is electing to 
                receive a waiver under this section.
                    ``(B) A copy of the plan involved.
                    ``(C) Such documents as the Secretary may require 
                for purposes of verifying that the conditions 
                established in paragraphs (1) through (3) have been 
                met.
    ``(b) Certain Requirements Regarding State Administrative Structure 
for Delivery of Services.--The requirements referred to in subsection 
(a) are as follows:
            ``(1) The allocation under section 102 of amounts between 
        State administrative agents and local workforce development 
        boards.
            ``(2) The allocation under sections 103 and 104 of 
        responsibilities between State administrative agents and local 
        workforce development boards (including the use of integrated 
        career center systems to provide vocational rehabilitation 
        services).
            ``(3) The specification under section 103(a) of the State 
        officials who are to administer the requirements of section 
        103.
    ``(c) Applicability of Waiver; Review and Revision of Plan.--
            ``(1) Applicability.--A waiver under subsection (a) is 
        effective for a fiscal year only if the documents under 
        paragraph (4) of such subsection are submitted to the Secretary 
        not later than 60 days before the beginning of the fiscal year.
            ``(2) Review of plan.--A waiver under subsection (a) is 
        effective for such fiscal years as the State involved elects, 
        except that, not less than once during each period of three 
        fiscal years, the plan under the waiver is required (as a 
        condition of the waiver remaining in effect) to be reviewed, 
        and approved, by the Governor (through the collaborative 
        process referred to in such subsection) and by the local 
        workforce development boards involved.
            ``(3) Revision of plan.--The plan under a waiver under 
        subsection (a) may be revised. Such subsection applies to such 
        a revision to the same extent and in the same manner as the 
        subsection applies to the original plan.
    ``(d) Performance Accountability System.--A waiver under subsection 
(a) for a State does not, with respect to carrying out the program 
under this title in the State, affect the applicability to the State of 
section 110 of the Consolidated and Reformed Education, Employment, and 
Rehabilitation Systems Act.''.
    (b) Certain Funding Provision.--Effective October 1, 1995, the 
Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.) is amended by 
inserting after section 3 the following section:

                        ``availability of funds

    ``Sec. 3A. Notwithstanding any other provision of law, funding to 
carry out titles II through VII for any fiscal year is available only 
to such extent and in such amounts as may be provided in advance in 
appropriations Acts.''.
    (c) Conforming Amendments.--Effective October 1, 1995, the 
Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.) is amended in the 
table of contents in the first section--
            (1) by inserting after the item relating to section 3 the 
        following item:

``Sec. 3A. Availability of funds.'';
            (2) by striking the items relating to sections 100 through 
        109, to sections 110 through 112, to sections 120 through 124, 
        to section 130, and to sections 140 and 141;
            (3) by striking the items relating to the title designation 
        and heading for title I, and to the part designations and 
        headings for parts A, B, C, D, and E of title I;
            (4) by inserting after the item relating to section 21 the 
        following items:

             ``TITLE I--VOCATIONAL REHABILITATION SERVICES

``Sec. 100. Purpose.
``Sec. 101. Formula grants.
``Sec. 102. Allocation within State of administrative responsibilities.
``Sec. 103. Responsibilities of State administrative agent.
``Sec. 104. Responsibilities for local boards and service centers.
``Sec. 105. Eligible individual.
``Sec. 106. State Rehabilitation Advisory Council.
``Sec. 107. Amount of allotment.
``Sec. 108. State option for waivers regarding alternative delivery 
                            systems.'';
        and
            (5) by inserting after the item relating to section 509 the 
        following item:

``Sec. 510. Client assistance program.''.
       Subtitle B--Other Amendments to Rehabilitation Act of 1973

SEC. 521. TRAINING AND DEMONSTRATION PROJECTS.

    (a) In General.--Effective October 1, 1995, the Rehabilitation Act 
of 1973 (29 U.S.C. 701 et seq.) is amended--
            (1) in title III--
                    (A) by striking section 303;
                    (B) by striking section 304;
                    (C) in section 311--
                            (i) by striking subsections (c) and (f); 
                        and
                            (ii) by redesignating subsections (d) and 
                        (e) as subsections (c) and (d), respectively;
                    (D) by striking section 312; and
                    (E) by striking section 316;
            (2)(A) by transferring subsection (a) of section 802 from 
        the current placement of the subsection;
            (B) by redesignating such subsection as subsection (e); and
            (C) by inserting such subsection at the end of section 311 
        (as amended by paragraph (1)(C) of this subsection);
            (3)(A) by transferring subsection (g) of section 802 from 
        the current placement of the subsection;
            (B) by redesignating such subsection as subsection (f); and
            (C) by inserting such subsection at the end of section 311 
        (as amended by paragraph (2)(C) of this subsection);
            (4)(A) by transferring subsection (c) of section 803 from 
        the current placement of the subsection;
            (B) by redesignating such subsection as subsection (g); and
            (C) by inserting such subsection at the end of section 311 
        (as amended by paragraph (3)(C) of this subsection);
            (5)(A) by transferring subsection (b) of section 803 from 
        the current placement of the subsection;
            (B) by redesignating such subsection as subsection (j); and
            (C) by inserting such subsection at the end of section 302; 
        and
            (6) by striking the remaining provisions of title VIII.
    (b) Conforming Amendments.--Effective October 1, 1995, the 
Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.) is amended in the 
table of contents in the first section--
            (1) by striking the items relating to sections 303, 304, 
        312, and 316;
            (2) by striking the items relating to sections 801 through 
        803 of title VIII; and
            (3) by striking the item relating to the title designation 
        and heading for title VIII.

SEC. 522. EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS WITH DISABILITIES.

    (a) In General.--Effective October 1, 1995, title VI of the 
Rehabilitation Act of 1973 (29 U.S.C. 795 et seq.) is amended--
            (1) by striking part A;
            (2) by striking part C;
            (3) by striking part D; and
            (4) in part B, by striking the part designation and 
        heading.
    (b) Projects With Industry.--Effective October 1, 1998, title VI of 
the Rehabilitation Act of 1973, as amended by subsection (a) of this 
section, is repealed.
    (c) Conforming Amendments.--Effective October 1, 1995, the 
Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.) is amended in the 
table of contents in the first section by striking the items relating 
to sections 611 through 617, to sections 631 through 638, and to 
section 641; and by striking the items relating to the part 
designations and headings for parts A, B, C, and D of title VI. 
Effective October 1, 1998, such table of contents is amended by 
striking the items relating to sections 621 through 623; and by 
striking the item relating to the title designation and heading for 
title VI.

SEC. 523. CERTAIN AMOUNTS.

    (a) Amounts Regarding Fiscal Year 1996.--With respect to the 
aggregate amount that was available for fiscal year 1995 as direct 
spending for carrying out the programs under section 311(c), section 
316, and part C of title VI of the Rehabilitation Act of 1973 (as such 
provisions were in effect for such fiscal year), an amount equal to 
such aggregate amount is hereby made available for fiscal year 1996 as 
direct spending for carrying out title I of such Act (in addition to 
the amount of direct spending that otherwise is available for such 
title I for fiscal year 1996).
    (b) Amounts Regarding Fiscal Year 1999.--With respect to the amount 
made available in appropriations Act for fiscal year 1998 for carrying 
out title VI of the Rehabilitation Act of 1973 (as such title was in 
effect for such fiscal year), an amount equal to such amount is hereby 
made available for fiscal year 1999 as direct spending for carrying out 
title I of such Act (in addition to the amount of direct spending that 
otherwise is available for such title I for fiscal year 1999).
                TITLE VI--HIGHER EDUCATION PRIVATIZATION

SEC. 601. REORGANIZATION OF THE STUDENT LOAN MARKETING ASSOCIATION 
              THROUGH THE FORMATION OF A HOLDING COMPANY.

    (a) Amendment.--Part B of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1071 et seq.) is amended by inserting after section 439 
(20 U.S.C. 1087-2) the following new section:

``SEC. 440. REORGANIZATION OF THE STUDENT LOAN MARKETING ASSOCIATION 
              THROUGH THE FORMATION OF A HOLDING COMPANY.

    ``(a) Actions by the Association's Board of Directors.--The Board 
of Directors of the Association shall take or cause to be taken all 
such action as it deems necessary or appropriate to effect, upon the 
shareholder approval described in subsection (b), a restructuring of 
the common stock ownership of the Association, as set forth in a plan 
of reorganization adopted by the Board of Directors (the terms of which 
shall be consistent with this Act) so that all of the outstanding 
common shares shall be directly owned by an ordinary business 
corporation chartered under State or District of Columbia law (the 
`Holding Company'), as the Board of Directors may determine. Such 
actions may include, in the Board's discretion, a merger of a wholly 
owned subsidiary of the Holding Company with and into the Association, 
which would have the effect provided in the plan of reorganization and 
the law of the jurisdiction in which such subsidiary is incorporated. 
As part of the restructuring, the Board of Directors may cause (1) the 
common shares of the Association to be converted, at the reorganization 
effective date, to common shares of the Holding Company on a one for 
one basis, consistent with applicable State or District of Columbia 
law, and (2) Holding Company common shares to be registered with the 
Securities and Exchange Commission.
    ``(b) Shareholder Approval.--The plan of reorganization adopted by 
the Board of Directors pursuant to subsection (a) shall be submitted to 
common stockholders of the Association for their approval. The 
reorganization shall occur at the reorganization effective date, 
provided that the plan of reorganization has been approved by the 
affirmative votes, cast in person or by proxy, of the holders of a 
majority of the issued and outstanding shares of the Association common 
stock.
    ``(c) Transition.--
            ``(1) In general.--Except as specifically provided in this 
        section, until the dissolution date the Association shall 
        continue to have all of the rights, privileges and obligations 
        set forth in, and shall be subject to all of the limitations 
        and restrictions of, section 439 of this Act as in effect on 
        the effective date of this section, and the Association shall 
        continue to carry out the purposes of such section. The Holding 
        Company and its affiliates other than the Association shall not 
        be entitled to any of the rights, privileges and obligations, 
        and shall not be subject to the limitations and restrictions, 
        applicable to the Association under section 439 of this Act as 
        in effect on the effective date of this section, except as 
        specifically provided in this section. The Holding Company and 
        its subsidiaries (other than the Association) shall not 
        purchase loans insured under this Act until such time as the 
        Association ceases acquiring such loans, except that the 
        Association shall continue to acquire loans as a lender of last 
        resort pursuant to section 439(q) of this Act or under an 
        agreement with the Secretary described in section 440(c)(6).
            ``(2) Transfer of certain property.--Except as specifically 
        provided in this section, at the reorganization effective date 
        or as soon as practicable thereafter, the Association shall use 
        its best efforts to transfer to the Holding Company or its 
        subsidiaries (or both), in each case, as directed by the 
        Holding Company, all real and personal property of the 
        Association (both tangible and intangible) other than the 
        remaining property. Without limiting the preceding sentence, 
        such transferred property shall include all right, title and 
        interest in (A) direct or indirect subsidiaries of the 
        Association (excluding any interest in any government sponsored 
        enterprise), (B) contracts, leases, and other agreements, (C) 
        licenses and other intellectual property, and (D) any other 
        property of the Association. Notwithstanding the preceding 
        provisions of this paragraph, nothing in this paragraph shall 
        be construed to prohibit the Association from transferring 
        remaining property from time to time to the Holding Company or 
        its subsidiaries, subject to the provisions of paragraph (4).
            ``(3) Transfer of personnel.--At the reorganization 
        effective date, employees of the Association shall become 
        employees of the Holding Company (or of the subsidiaries), and 
        the Holding Company (or the subsidiaries or both) shall provide 
        all necessary and appropriate management and operational 
        support (including loan servicing) to the Association, as 
        requested by the Association. The Association may, however, 
        obtain such management and operational support from other 
        persons or entities.
            ``(4) Dividends.--The Association may pay dividends in the 
        form of cash or noncash distributions so long as at the time of 
        the declaration of such dividends, after giving effect to the 
        payment of such dividends as of the date of such declaration by 
        the Board of Directors of the Association, the Association's 
        capital would be in compliance with the capital standards set 
        forth in section 439(r) of this Act. If, at any time after the 
        reorganization effective date, the Association fails to comply 
        with such capital standards, the Holding Company shall be 
        obligated to transfer to the Association additional capital in 
        such amounts as are necessary to ensure that the Association 
        again complies with the capital standards.
            ``(5) Valuation of noncash distributions.--After the 
        reorganization effective date, any distribution of noncash 
        assets by the Association to the Holding Company shall be 
        valued at book value on the date the Association's Board of 
        Directors approved such distribution for purposes of 
        calculating compliance with section 439(r) of this Act.
            ``(6) Restrictions on new business activity or acquisition 
        of assets by association.--After the reorganization effective 
        date, the Association shall not engage in any new business 
        activities or acquire any additional program assets described 
        in section 439(d) of the Act other than--
                    ``(A) in connection with (i) student loan purchases 
                through September 30, 2003, and (ii) contractual 
                commitments for future warehousing advances or pursuant 
                to letters of credit or standby bond purchase 
                agreements which are outstanding as of the 
                reorganization effective date;
                    ``(B) in connection with its serving as a lender-
                of-last-resort pursuant to section 439 of this Act; and
                    ``(C) in connection with its purchase of loans 
                insured under this part, if the Secretary, with the 
                approval of the Secretary of the Treasury, enters into 
                an agreement with the Association for the continuation 
                or resumption of its secondary market purchase program 
                because
                 the Secretary determines there is inadequate liquidity 
for loans made under this part.
        The Secretary is authorized to enter into an agreement 
        described in subparagraph (C) with the Association covering 
        such secondary market activities.
        Any agreement entered into under subparagraph (C) shall cover a 
        period of 12 months, but may be renewed if the Secretary 
        determines that liquidity remains inadequate. The fee provided 
        under section 439(h)(7) shall not apply to loans acquired under 
        any such agreement with the Secretary.
            ``(7) Issuance of debt obligations during the transition 
        period; attributes of debt obligations.--After the 
        reorganization effective date, the Association shall not issue 
        debt obligations which mature later than September 30, 2007, 
        except in connection with serving as a lender-of-last-resort 
        pursuant to section 439 of this Act or with purchasing loans 
        under an agreement with the Secretary as described in paragraph 
        (6) of this subsection. Nothing in this subsection shall modify 
        the attributes accorded the debt obligations of the Association 
        by section 439, regardless of whether such debt obligations are 
        incurred prior to, or at any time following, the reorganization 
        effective date or are transferred to a trust in accordance with 
        subsection (d).
            ``(8) Monitoring of safety and soundness.--
                    ``(A) Obligation to obtain, maintain, and report 
                information.--The Association shall obtain such 
                information and make and keep such records as the 
                Secretary of the Treasury may from time to time 
                prescribe concerning (i) the financial risk to the 
                Association resulting from the activities of any of its 
                associated persons, to the extent such activities are 
                reasonably likely to have a material impact on the 
                financial condition of the Association, including its 
                capital ratio, its liquidity, or its ability to conduct 
                and finance its operations, and (ii) the Association's 
                policies, procedures, and systems for monitoring and 
                controlling any such financial risk. The Association's 
                obligations under this subsection with respect to any 
                associated person which is a third party servicer (as 
                defined in 34 C.F.R. 682.200(b)) shall be limited to 
                providing to the Secretary of the Treasury copies of 
                any reports or other information provided to the 
                Secretary of Education pursuant to 34 C.F.R. 682.200 et 
                seq. The Secretary of the Treasury may require summary 
                reports of such information to be filed no more 
                frequently than quarterly. For purposes of this 
                paragraph, the term `associated person' shall mean any 
                person, other than a natural person, directly or 
                indirectly controlling, controlled by, or under common 
                control with the Association.
                    ``(B) Separate operation of corporations.--
                            ``(i) The funds and assets of the 
                        Association shall at all times be maintained 
                        separately from the funds and assets of the 
                        Holding Company or any of its other 
                        subsidiaries and may be used solely by the 
                        Association to carry out its purposes and to 
                        fulfill its obligations.
                            ``(ii) The Association shall maintain books 
                        and records that clearly reflect the assets and 
                        liabilities of the Association, separate from 
                        the assets and liabilities of the Holding 
                        Company or any of its other subsidiaries.
                            ``(iii) The Association shall maintain a 
                        corporate office that is physically separate 
                        from any office of the Holding Company or any 
                        of its subsidiaries.
                            ``(iv) No director of the Association that 
                        is appointed by the President pursuant to 
                        section 439(c)(1)(A) may serve as a director of 
                        the Holding Company.
                            ``(v) At least one officer of the 
                        Association shall remain an officer solely of 
                        the Association.
                            ``(vi) Transactions between the Association 
                        and the Holding Company or its other 
                        subsidiaries, including any loan servicing 
                        arrangements, shall be on terms no less 
                        favorable to the Association than the 
                        Association could obtain from an unrelated 
                        third party offering comparable services.
                            ``(vii) The Association shall not extend 
                        credit to the Holding Company or any of its 
                        affiliates, nor guarantee or provide any credit 
                        enhancement to any debt obligations of the 
                        Holding Company or any of its affiliates.
                            ``(viii) Any amounts collected on behalf of 
                        the Association by the Holding Company or any 
                        of its other subsidiaries with respect to the 
                        assets of the Association, pursuant to a 
                        servicing contract or other arrangement between 
                        the Association and the Holding Company or any 
                        of its other direct or indirect subsidiaries, 
                        shall be collected solely for the benefit of 
                        the Association and shall be immediately 
                        deposited by the Holding Company or such other 
                        subsidiary to an account under the sole control 
                        of the Association.
                    ``(C) Encumbrance of assets.--Notwithstanding any 
                otherwise applicable Federal or State law, rule, or 
                regulation, or legal or equitable principle, doctrine, 
                or theory to the contrary, under no circumstances shall 
                the assets of the Association be available or used to 
                pay claims or debts of or incurred by the Holding 
                Company. Nothing in this subparagraph shall limit the 
                right of the Association to pay dividends not otherwise 
                prohibited hereunder or limit any liability of the 
                Holding Company explicitly provided for in this part.
                    ``(D) Holding company activities.--After the 
                reorganization effective date and prior to the 
                dissolution of the Association in accordance with 
                section 440(d), Holding Company activities shall be 
                limited to ownership of the Association and any other 
                subsidiaries. All business activities shall be 
                conducted through subsidiaries.
            ``(9) Association board of directors.--Notwithstanding any 
        other provision of part B of this title, after the 
        reorganization effective date, the 14 directors of the 
        Association elected by the Association's stockholders (which 
        immediately after the reorganization effective date shall be 
        the Holding Company) shall no longer be required to meet the 
        eligibility requirements set forth in section 439(c).
            ``(10) Issuance of stock warrants.--At the reorganization 
        effective date, the Holding Company shall issue to the 
        Secretary of the Treasury 200,000 stock warrants, each 
        entitling the holder of the stock warrant to purchase from the 
        Holding Company one share of the registered common stock of the 
        Holding Company at any time on or before September 30, 2007. 
        The exercise price for such warrants shall be an amount equal 
        to the average closing price of the common stock of the 
        Association for the 20 business days prior to and including the 
        date of enactment of this section on the exchange or market 
        which is then
         the primary exchange or market for the common stock of the 
Association, subject to any adjustments necessary to reflect the 
conversion of Association common stock into Holding Company common 
stock as part of the plan of reorganization approved by the 
Association's shareholders.
            ``(11) Restrictions on transfer of association shares and 
        bankruptcy of association.--After the reorganization effective 
        date, the Holding Company shall not sell, pledge, or otherwise 
        transfer the outstanding shares of the Association, or agree to 
        or cause the liquidation of the Association or cause the 
        Association to file a petition for bankruptcy under title 11, 
        United States Code, without prior approval of the Secretary of 
        the Treasury and the Secretary of Education.
    ``(d) Termination of the Association.--The Association shall 
dissolve, and its separate existence shall terminate on September 30, 
2007, after discharge of all outstanding debt obligations and 
liquidation pursuant to this subsection. The Association may dissolve 
pursuant to this subsection prior to such date by notifying the 
Secretary of Education and the Secretary of the Treasury of its 
intention to dissolve, unless within 60 days of receipt of such notice 
the Secretary of Education notifies the Association that it continues 
to be needed to serve as a lender of last resort pursuant to section 
439(q) of this Act or continues to be needed to purchase loans under an 
agreement with the Secretary described in subsection (c)(6) of this 
section. On the dissolution date, the Association shall take the 
following actions:
            ``(1) Establishment of a trust.--The Association shall, 
        under the terms of an irrevocable trust agreement in form and 
        substance satisfactory to the Secretary of the Treasury, the 
        Association and the appointed trustee, irrevocably transfer all 
        remaining obligations of the Association to the trust and 
        irrevocably deposit or cause to be deposited into such trust, 
        to be held as trust funds solely for the benefit of holders of 
        the remaining obligations, money or direct noncallable 
        obligations of the United States of America or any agency 
        thereof for which payment the full faith and credit of the 
        United States is pledged, maturing as to principal and interest 
        in such amounts and at such times as are determined by the 
        Secretary of the Treasury to be sufficient, without 
        consideration of any significant reinvestment of such interest, 
        to pay the principal of, and interest on, the remaining 
        obligations in accordance with their terms. To the extent the 
        Association cannot provide money or qualifying obligations in 
        the amount required, the Holding Company shall be required to 
        transfer money or qualifying obligations to the trust in the 
        amount necessary to prevent any deficiency.
            ``(2) Use of trust assets.--All money, obligations, or 
        financial assets deposited into the trust pursuant to this 
        subsection shall be applied by the trustee to the payment of 
        the remaining obligations assumed by the trust. Upon the 
        fulfillment of the trustee's duties under the trust, any 
        remaining assets of the trust shall be transferred to the 
        Holding Company or its subsidiaries, or both, as directed by 
        the Holding Company.
            ``(3) Obligations not transferred to the trust.--The 
        Association shall make proper provision for all other 
        obligations of the Association, including the repurchase or 
        redemption, or the making of proper provision for the 
        repurchase or redemption, of any preferred stock of the 
        Association then outstanding. Any obligations of the 
        Association which cannot be fully satisfied shall become 
        liabilities of the Holding Company as of the date of 
        dissolution.
            ``(4) Transfer of remaining assets.--After compliance with 
        paragraphs (1), and (3), the Association shall transfer to the 
        Holding Company any remaining assets of the Association.
    ``(e) Operation of the Holding Company.--
            ``(1) Holding company board of directors.--The number and 
        composition of the Board of Directors of the Holding Company 
        shall be determined as set forth in the Holding Company's 
        charter or like instrument (as amended from time to time) or 
        bylaws (as amended from time to time) and as permissible under 
        the laws of the jurisdiction of its incorporation.
            ``(2) Holding company name.--The names of the Holding 
        Company and any subsidiary of the Holding Company other than 
        the Association--
                    ``(A) may not contain the name `Student Loan 
                Marketing Association'; and
                    ``(B) may contain, to the extent permitted by 
                applicable State or District of Columbia law, `Sallie 
                Mae', or variations thereof or such other names as the 
                Board of Directors of the Association of the Holding 
                Company shall deem appropriate.
            ``(3) Use of sallie mae name.--Without limiting paragraph 
        (2), the Association may assign to the Holding Company, or any 
        other subsidiary of the Holding Company, the `Sallie Mae' name 
        as a trademark and service mark, except that neither the 
        Holding Company nor any subsidiary of the Holding Company other 
        than the Association or a subsidiary of the Association may use 
        the `Sallie Mae' name on, or to identify the issuer of, any 
        debt obligation or other security offered or sold by the 
        Holding Company or any such subsidiary. The Association shall 
        remit to the Secretary of Treasury $5,000,000 during fiscal 
        year 1996 as compensation for the right to assign such 
        trademark or service mark.
            ``(4) Disclosure required.--Until 3 years after the 
        dissolution date, the Holding Company, and any subsidiary of 
        the Holding Company other than the Association, shall 
        prominently display--
                    ``(A) in any document offering its securities, that 
                the obligations of the Holding Company and any such 
                subsidiary are not guaranteed by the full faith and 
                credit of the United States; and
                    ``(B) in any advertisement or promotional materials 
                which use the `Sallie Mae' name or mark, a statement 
                that neither the Holding Company nor any such 
                subsidiary is a Government-sponsored enterprise or 
                instrumentality of the United States.
    ``(f) Strict Construction.--Except as specifically set forth in 
this section, nothing contained in this section shall be construed to 
limit the authority of the Association as a federally chartered 
corporation, or of the Holding Company as a State or District of 
Columbia chartered corporation.
    ``(g) Right To Enforce.--The Secretary of Education or the 
Secretary of the Treasury, as appropriate, may request the Attorney 
General of the United States to bring an action in the United States 
District Court for the District of Columbia for the enforcement of any 
provisions of this section, or may, under the direction or control of 
the Attorney General, bring such an action. Such court shall have 
jurisdiction and power to order and require compliance with this 
section.
    ``(h) Deadline for Reorganization Effective Date.--This section 
shall be of no further force and effect in the event that the 
reorganization effective date does not occur on or before 18 months 
after the date of enactment of this section.
    ``(i) Definitions.--For purposes of this section:
            ``(1) The term `Association' means the Student Loan 
        Marketing Association.
            ``(2) The term `dissolution date' shall mean September 30, 
        2007, or such earlier date as the Secretary of Education 
        permits the transfer of remaining obligations in accordance 
        with subsection (d) of this section.
            ``(3) The term `reorganization effective date' means the 
        effective date of the reorganization as determined by the Board 
        of Directors of the Association, which shall not be earlier 
        than the date that stockholder approval is obtained pursuant to 
        subsection (b) of this section and shall not be later than the 
        date that is 18 months after the date of enactment of this 
        section.
            ``(4) The term `Holding Company' means the new business 
        corporation formed pursuant to this section by the Association 
        under the laws of any State of the United States or the 
        District of Columbia.
            ``(5) The term `remaining obligations' shall mean the debt 
        obligations of the Association outstanding as of the 
        dissolution date.
            ``(6) The term `remaining property' shall mean the 
        following assets and liabilities of the Association which are 
        outstanding as of the reorganization effective date: (A) debt 
        obligations issued by the Association, (B) contracts relating 
        to interest rate, currency, or commodity positions or 
        protections, (C) investment securities owned by the 
        Association, (D) any instruments, assets, or agreements 
        described in section 439(d) of this Act (including without 
        limitation all student loans, forward purchase and lending 
        commitments, warehousing advances, academic facilities 
        obligations, letters of credit, standby bond purchase 
        agreements, liquidity agreements, and student loan revenue 
        bonds or other loans), and (E) except as specifically 
        prohibited by this Act, any other nonmaterial assets or 
        liabilities of the Association which the Association's Board of 
        Directors determines to be necessary or appropriate to its 
        operations.
            ``(7) The term `reorganization' means the restructuring 
        event or events (including any merger event) giving effect to 
        the holding company structure described in subsection (a) of 
        this section.
            ``(8) The term `subsidiary' or `subsidiaries' shall mean 
        one or more direct or indirect subsidiaries of the Holding 
        Company.''.
    (b) Technical Amendments.--
            (1) Amendments to the higher education act.--Effective on 
        the reorganization effective date (as defined in section 
        440(h)(3) of the Higher Education Act of 1965, as added by 
        subsection (a))--
                    (A) section 435(d)(1)(F) of such Act (20 U.S.C. 
                1085(d)(1)(F)) is amended by inserting after ``Student 
                Loan Marketing Association'' the following: ``or the 
                Holding Company of the Student Loan Marketing 
                Association, including all subsidiaries of such Holding 
                Company, created pursuant to section 440 of this 
                Act,''; and
                    (B) sections 435(d)(1)(G) and 428C(a)(1)(A) of such 
                Act (20 U.S.C. 1085(d)(1)(G); 1078-3(a)(1)(A)) are each 
                amended by inserting after ``Student Loan Marketing 
                Association'' the following: ``or the Holding Company 
                of the Student Loan Marketing Association, including 
                all subsidiaries of such Holding Company, created 
                pursuant to section 440 of this Act''.
            (2) Enforcement of safety and soundness requirements.--
        Section 439(r) of the Higher Education Act of 1965 (20 U.S.C. 
        1087-2(r)) is amended--
                    (A) by redesignating paragraph (13) as paragraph 
                (15); and
                    (B) by inserting after paragraph (12) the following 
                new paragraph:
            ``(13) Enforcement of safety and soundness requirements.--
        The Secretary of Education or the Secretary of the Treasury, as 
        appropriate, may request the Attorney General of the United 
        States to bring an action in the United States District Court 
        for the District of Columbia for the enforcement of any 
        provisions of this subsection, or may, under the direction or 
        control of the Attorney General, bring such an action. Such 
        court shall have jurisdiction and power to order and require 
        compliance with this subsection.''.
            (3) Capital ratio amendments.--Section 439(r) of the Higher 
        Education Act of 1965 is further amended--
                    (A) in paragraph (1)--
                            (i) by striking ``and'' at the end of 
                        subparagraph (A);
                            (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(C) within 45 days of the end of each fiscal 
                quarter, (i) financial statements of the Association, 
                and (ii) a report setting forth the calculation of the 
                capital ratio of the Association.'';
                    (B) in paragraph (11), by striking ``paragraphs (4) 
                and (6)(A)'' and inserting ``paragraphs (4), (6)(A), 
                and (14)''; and
                    (C) by inserting after paragraph (13) (as added by 
                paragraph (2) of this subsection) the following new 
                paragraph:
            ``(14) Actions by secretary.--If the shareholders of the 
        Association shall have approved a reorganization plan in 
        accordance with section 440(b) and, for any fiscal quarter 
        ended after January 1, 2000, the Association shall have a 
        capital ratio of less than 2.25 percent, the Secretary of the 
        Treasury may, until such capital ratio is met, take any one or 
        more of the actions described in paragraph (7), except that--
                    ``(A) the capital ratio to be restored pursuant to 
                paragraph (7)(D) shall be 2.25 percent; and
                    ``(B) if the relevant capital ratio is in excess of 
                or equal to 2 percent for such quarter, the Secretary 
                of the Treasury shall defer taking any of the actions 
                set forth in paragraph (7) until the next succeeding 
                quarter and may then proceed with any such action only 
                if the capital ratio of the Association remains below 
                2.25 percent.
        Upon approval by the shareholders of the Association of a 
        reorganization plan in accordance with section 440(b) for any 
        period after January 1, 2000, the provisions of paragraphs (4), 
        (5), (6), (8), (9), and (10) shall be of no further application 
        to the Association.''.
            (4) Repeal of the association's charter.--Effective on the 
        dissolution date (as defined in section 440(h)(2) of the Higher 
        Education Act of 1965, as added by subsection (a)), section 439 
        of such Act (20 U.S.C. 1087-2) is repealed.

SEC. 602. PRIVATIZATION OF COLLEGE CONSTRUCTION LOAN INSURANCE 
              ASSOCIATION.

    (a) Repeal of Statutory Restrictions.--Part D of title VII of the 
Higher Education Act of 1965 (20 U.S.C. 1132f et seq.) is repealed.
    (b) Status of the Corporation.--
            (1) Status of the corporation.--The Corporation shall not 
        be an agency, instrumentality, or establishment of the United 
        States Government and shall not be a ``Government corporation'' 
        nor a ``Government controlled corporation'' as defined in 
        section 103 of title 5, United States Code. No action under 
        section 1491 of title 28, United States Code (commonly known as 
        the Tucker Act) shall be allowable against the United States 
        based on the actions of the Corporation.
            (2) Corporate powers.--The Corporation shall have the power 
        to engage in any business or other activities for which 
        corporations may be organized under the laws of any State of 
        the United States or the District of Columbia. The Corporation 
        shall have the power to enter into contracts, to execute 
        instruments, to incur liabilities, to provide products and 
        services, and to do all things as are necessary or incidental 
        to the proper management of its affairs and the efficient 
        operation of a private, for-profit business.
    (c) Related Privatization Requirements.--
            (1) Notice requirements.--During the 5-year period 
        following the date of the enactment of this Act, the 
        Corporation shall include in any document offering the 
        Corporation's securities, in any contracts for insurance, 
        guarantee, or reinsurance of obligations, and in any 
        advertisement or promotional material, a statement that--
                    (A) the Corporation is not a Government-sponsored 
                enterprise or instrumentality of the United States; and
                    (B) the Corporation's obligations are not 
                guaranteed by the full faith and credit of the United 
                States.
            (2) Corporate charter.--The Corporation's charter shall be 
        amended as necessary and without delay to conform the 
        requirements of this Act.
            (3) Corporate name.--The name of the Corporation, or of any 
        direct or indirect subsidiary thereof, may not contain the term 
        ``College Construction Loan Insurance Association''.
            (4) Articles of incorporation.--The Corporation shall amend 
        its articles of incorporation without delay to reflect that one 
        of the purposes of the Corporation shall be to guarantee, 
        insure and reinsure bonds, leases, and other evidences of debt 
        of educational institutions, including Historically Black 
        Colleges and Universities and other academic institutions which 
        are ranked in the lower investment grade category using a 
        nationally recognized credit rating system.
            (5) Transition requirements.--
                    (A) Requirements until stock sale.--Notwithstanding 
                subsection (a), the requirements of section 754 of the 
                Higher Education Act of 1965 (20 U.S.C. 1132f-3), as in 
                existence as of the day before enactment of this Act, 
                shall continue to be effective until the day 
                immediately following the date of closing of the 
                purchase of the Secretary's stock (or the date of 
                closing of the final purchase, in the case of multiple 
                transactions) pursuant to subsection (d) of this 
                section.
                    (B) Reports after stock sale.--The Corporation 
                shall, not later than March 30 of the first full 
                calendar year immediately following the sale pursuant 
                to subsection (d), and each of the 2 succeeding years, 
                submit to the Secretary of Education a report 
                describing the Corporation's efforts to assist in the 
                financing of education facilities projects, including 
                projects for elementary, secondary, and postsecondary 
                educational institution infrastructure, and detailing, 
                on a project-by-project basis, the Corporation's 
                business dealings with educational institutions that 
                are rated by a nationally recognized statistical rating 
                organization at or below the organization's third 
                highest ratings.
    (d) Sale of Federally Owned Stock.--
            (1) Sale of stock required.--The Secretary of the Treasury 
        shall, upon the request of the Secretary of Education make 
        every effort to sell, pursuant to section 324 of title 31, 
        United States Code, the voting common stock of the Corporation 
        owned by the Secretary of Education not later than one year 
        after the date of the enactment of this Act.
            (2) Purchase by the corporation.--In the event that the 
        Secretary of the Treasury is unable to sell the voting common 
        stock, or any portion thereof, at a price acceptable to the 
        Secretary of Education and the Secretary of the Treasury within 
        the period specified in paragraph (1), the Corporation shall 
        purchase such stock at a price determined by the Secretary of 
        the Treasury and acceptable to the Corporation based on 
        independent appraisal by one or more nationally recognized 
        financial firms. Such firms shall be selected by the Secretary 
        of the Treasury in consultation with the Secretary of Education 
        and the Corporation.
    (e) Assistance by the Corporation.--The Corporation shall provide 
such assistance as the Secretary of the Treasury and the Secretary of 
Education may require to facilitate the sale of the stock under this 
section.
    (f) Definition.--As used in this section, the term ``Corporation'' 
means the Corporation established pursuant to the provision of law 
repealed by subsection (a).

               TITLE VII--REPEALERS AND OTHER AMENDMENTS

SEC. 701. HIGHER EDUCATION PROVISIONS.

    (a) Higher Education Act of 1965 Provisions.--The following 
provisions of the Higher Education Act of 1965 are repealed:
            (1) Part B of title I (20 U.S.C. 1011 et seq.), relating to 
        articulation agreements.
            (2) Part C of title I (20 U.S.C. 1015 et seq.), relating to 
        access and equity to education for all Americans through 
        telecommunications.
            (3) Title II (20 U.S.C. 1021 et seq.), relating to academic 
        libraries and information services.
            (4) Chapter 2 of subpart 2 of part A of title IV (20 U.S.C. 
        1070a-21 et seq.), relating to national early intervention 
        scholarships.
            (5) Chapter 3 of subpart 2 of part A of title IV (20 U.S.C. 
        1070a-31 et seq.), relating to presidential access 
        scholarships.
            (6) Chapter 4 of subpart 2 of part A of title IV (20 U.S.C. 
        1070a-41 et seq.), relating to model program community 
        partnerships and counseling grants.
            (7) Chapter 5 of subpart 2 of part A of title IV (20 U.S.C. 
        1070a-52 et seq.), relating to an early awareness information 
        program.
            (8) Chapter 8 of subpart 2 of part A of title IV (20 U.S.C. 
        1070a-81), relating to technical assistance for teachers and 
        counselors.
            (9) Subpart 8 of part A of title IV (20 U.S.C. 1070f), 
        relating to special child care services for disadvantaged 
        college students.
            (10) Section 428J (20 U.S.C. 1078-10), relating to loan 
        forgiveness for teachers, individuals performing national 
        community service and nurses.
            (11) Section 486 (20 U.S.C. 1093), relating to training in 
        financial aid services.
            (12) Subpart 1 of part H of title IV (20 U.S.C. 1099a et 
        seq.) relating to State postsecondary review entity programs.
            (13) Part A of title V (20 U.S.C. 1102 et seq.), relating 
        to State and local programs for teacher excellence.
            (14) Part B of title V (20 U.S.C. 1103 et seq.), relating 
        to national teacher academies.
            (15) Subpart 1 of part C of title V (20 U.S.C. 1104 et 
        seq.), relating to Douglas teacher scholarships.
            (16) Subpart 3 of part C of title V (20 U.S.C. 1106 et 
        seq.), relating to the teacher corps.
            (17) Subpart 3 of part D of title V (20 U.S.C. 1109 et 
        seq.), relating to class size demonstration grants.
            (18) Subpart 4 of part D of title V (20 U.S.C. 1110 et 
        seq.), relating to middle school teaching demonstration 
        programs.
            (19) Subpart 1 of part E of title V (20 U.S.C. 1111 et 
        seq.), relating to new teaching careers.
            (20) Subpart 1 of part F of title V (20 U.S.C. 1113 et 
        seq.), relating to the national mini corps programs.
            (21) Section 586 (20 U.S.C. 1114), relating to 
        demonstration grants for critical language and area studies.
            (22) Section 587 (20 U.S.C. 1114a), relating to development 
        of foreign languages and cultures instructional materials.
            (23) Subpart 3 of part F of title V (20 U.S.C. 1115), 
        relating to small State teaching initiatives.
            (24) Subpart 4 of part F of title V (20 U.S.C. 1116), 
        relating to faculty development grants.
            (25) Section 597 and section 599(b) (20 U.S.C. 1117a, 
        1117c(b)), relating to early childhood staff training and 
        professional enhancement.
            (26) Section 605 (20 U.S.C. 1124a), relating to intensive 
        summer language institutes.
            (27) Section 607 (20 U.S.C. 1125a), relating to foreign 
        language periodicals.
            (28) Part A of title VII (20 U.S.C. 11326 et seq.), 
        relating to academic and library facilities.
            (29) Title VIII (20 U.S.C. 1133 et seq.), relating to 
        cooperative education programs.
            (30) Part A of title IX (20 U.S.C. 1134a et seq.), relating 
        to women and minority participation in graduate education.
            (31) Part B of title IX (20 U.S.C. 1134d et seq.), relating 
        to Harris fellowships.
            (32) Part C of title IX (20 U.S.C. 1134h et seq.), relating 
        to Javits fellowships.
            (33) Part E of title IX (20 U.S.C. 1134r et seq.), relating 
        to the faculty development fellowship program.
            (34) Part F of title IX (20 U.S.C. 1134s et seq.), relating 
        to legal training for the disadvantaged.
            (35) Part G of title IX (20 U.S.C. 1134u et seq.), relating 
        to law school clinical programs.
            (36) Section 1011 (20 U.S.C. 1135a-11), relating to special 
        projects in areas of national need.
            (37) Subpart 2 of part B of title X (20 U.S.C. 1135c et 
        seq.), relating to science and engineering access programs.
            (38) Part C of title X (20 U.S.C. 1135e et seq.), relating 
        to women and minorities science and engineering outreach 
        demonstration programs.
            (39) Part D of title X (20 U.S.C. 1135f), relating to 
        Eisenhower leadership programs.
            (40) Title XI (20 U.S.C. 1136 et seq.), relating to 
        community service programs.
    (b) Education Amendments of 1986 Provisions.--The following 
provisions of the Higher Education Amendments of 1986 are repealed:
            (1) Part E of title XIII (20 U.S.C. 1221-1 note), relating 
        to a National Academy of Science study.
            (2) Part B of title XV (20 U.S.C. 4441 et seq.), relating 
        to Native Hawaiian culture and art development.
    (c) Education Amendments of 1992 Provisions.--The following 
provisions of the Higher Education Amendments of 1992 are repealed:
            (1) Part F of title XIII (25 U.S.C. 3351 et seq.), relating 
        to American Indian postsecondary economic development 
        scholarships.
            (2) Part G of title XIII (25 U.S.C. 3371), relating to 
        American Indian teacher training.
            (3) Section 1406 (20 U.S.C. 1221e-1 note), relating to a 
        national survey of factors associated with participation.
            (4) Section 1409 (20 U.S.C. 1132a note), relating to a 
        study of environmental hazards in institutions of higher 
        education.
            (5) Section 1412 (20 U.S.C. 1101 note), relating to a 
        national job bank for teacher recruitment.
            (6) Part B of title XV (20 U.S.C. 1452 note), relating to a 
        national clearinghouse for postsecondary education materials.
            (7) Part C of title XV (20 U.S.C. 1101 note), relating to 
        school-based decisionmakers.
            (8) Part D of title XV (20 U.S.C. 1145h note), relating to 
        grants for sexual offenses education.
            (9) Part E of title XV (20 U.S.C. 1070 note), relating to 
        Olympic scholarships.
            (10) Part G of title XV (20 U.S.C. 1070a-11 note), relating 
        to advanced placement fee payment programs.
    (d) Conforming Amendments.--the Higher Education Act of 1965 is 
amended--
            (1) in section 453(c)(2)--
                    (A) by striking subparagraph (E); and
                    (B) by redesignating subparagraphs (F) through (H) 
                as subparagraphs (E) through (G), respectively;
            (2) in section 487(a)(3), by striking subparagraph (B) and 
        redesignating subparagraphs (C) and (D) as subparagraphs (B) 
        and (C), respectively;
            (3) in section 487(a)(15), by striking ``the Secretary of 
        Veterans Affairs, and State review entities under subpart 1 of 
        part H'' and inserting ``and the Secretary of Veterans 
        Affairs'';
            (4) in section 487(a)(21), by striking ``, State 
        postsecondary review entities,'';
            (5) in section 487(c)(1)(A)(i), by striking ``State 
        agencies, and the State review entities referred to in subpart 
        1 of part H'' and inserting ``and State agencies'';
            (6) in section 487(c)(4), by striking ``, after 
        consultation with each State review entity designated under 
        subpart 1 of part H,'';
            (7) in section 487(c)(5), by striking ``State review 
        entities designated under subpart 1 of part H,'';
            (8) in section 496(a)(7), by striking ``and the appropriate 
        State postsecondary review entity'';
            (9) in section 496(a)(8), by striking ``and the State 
        postsecondary review entity of the State in which the 
        institution of higher education is located'';
            (10) in section 498(g)(2), by striking everything after the 
        first sentence;
            (11) in section 498A(a)(2)(D), by striking ``by the 
        appropriate State postsecondary review entity designated under 
        subpart 1 of this part or'';
            (12) in section 498A(a)(2)--
                    (A) by inserting ``and'' after the semicolon at the 
                end of subparagraph (E);
                    (B) by striking subparagraph (F); and
                    (C) by redesignating subparagraph (G) as 
                subparagraph (F); and
            (13) in section 498A(a)(3)--
                    (A) by inserting ``and'' after the semicolon at the 
                end of subparagraph (C);
                    (B) by striking ``; and'' at the end of 
                subparagraph (D) and inserting a period; and
                    (C) by striking subparagraph (E).
SEC. 702. ELIGIBLE INSTITUTION.

    (a) Amendments.--Section 481(b) of the Higher Education Act of 1965 
(20 U.S.C. 1088(b)) is amended--
            (1) by inserting before the period at the end of the first 
        sentence the following: ``on the basis of a review by the 
        institution's independent auditor using generally accepted 
        accounting principles''; and
            (2) by inserting after the end of such first sentence the 
        following new sentences: ``For the purposes of clause (6), 
        revenues from sources that are not derived from funds provided 
        under this title include revenues from programs of education or 
        training that do not meet the definition of an eligible program 
        in subsection (e), but are provided on a contractual basis 
        under Federal, State, or local training programs, or to 
        business and industry. For the purposes of determining whether 
        an institution meets the requirements of clause (6), the 
        Secretary shall not consider the financial information of any 
        institution for a fiscal year began on or before April 30, 
        1994.''.
    (b) Effective Date.--Notwithstanding section 713 of this Act, the 
amendments made by subsection (a) shall apply to any determination made 
on or after July 1, 1994, by the Secretary of Education pursuant to 
section 481(b)(6) of the Higher Education Act of 1965.

SEC. 703. CARL D. PERKINS VOCATIONAL AND APPLIED TECHNOLOGY EDUCATION 
              ACT.

    The Carl D. Perkins Vocational and Applied Technology Education Act 
(20 U.S.C. 2301 et seq.) is repealed.

SEC. 704. SMITH-HUGHES ACT.

    (a) Repeal.--The Smith-Hughes Act (39 Stat. 929 as amended (20 
U.S.C. 11-15, 16-28)) is repealed.
    (b) Effective Date.--Notwithstanding section 713 of this Act, the 
repeal in subsection (a) of this section shall take effect on October 
1, 1995.

SEC. 705. SCHOOL-TO-WORK OPPORTUNITIES ACT OF 1994.

     The School-to-Work Opportunities Act of 1994 (20 U.S.C. 6101 et 
seq.) is repealed.
SEC. 706. SCHOOL DROPOUT ASSISTANCE ACT.

    The School Dropout Assistance Act, (part C of title V of the 
Elementary and Secondary Education Act (20 U.S.C. 7261)) is repealed.

SEC. 707. ADULT EDUCATION ACT.

    (a) In General.--The Adult Education Act (20 U.S.C. 1201 et seq.) 
is repealed.
    (b) Conforming Amendments.--
            (1) ESEA.--The Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 6301 et seq.) is amended--
                    (A) in section 1202(c)(1), by striking ``the Adult 
                Education Act,'' and inserting ``title IV of the 
                CAREERS Act,'';
                    (B) in section 1205(8)(B), by striking ``the Adult 
                Education Act,'' and inserting ``title IV of the 
                CAREERS Act,'';
                    (C) in section 1206(a)(1)(A), by striking ``the 
                Adult Education Act;'' and inserting ``title IV of the 
                CAREERS Act;''; and
                    (D) in section 9161(2), by striking ``section 
                312(2) of the Adult Education Act.'' and inserting 
                ``section 5 of the CAREERS Act.''.
            (2) Technology for education act.--The Technology for 
        Education Act of 1994 (20 U.S.C. 6801 et seq.) is amended in 
        section 3113(1) by striking ``section 312 of the Adult 
        Education Act;'' and inserting ``section 5 of the CAREERS 
        Act;'';

SEC. 708. NATIONAL LITERACY ACT.

    The National Literacy Act of 1991, except section 101 of such Act, 
is repealed.

SEC. 709. LIBRARY SERVICES AND CONSTRUCTION ACT.

    (a) In General.--The Library Services and Construction Act (20 
U.S.C. 351 et seq.) is repealed.
    (b) Conforming Amendment.--The Technology for Education Act of 1994 
(20 U.S.C. 6801 et seq.) is amended in section 3113(10) by striking 
``section 3 of the Library Services and Construction Act;'' and 
inserting ``section 5 of the CAREERS Act;''.

SEC. 710. TECHNOLOGY FOR EDUCATION ACT OF 1994.

    Part F of the Technology for Education Act of 1994 (contained in 
title III of the Elementary and Secondary Education Act (20 U.S.C. 7001 
et seq.)) is repealed.

SEC. 711. JOB TRAINING PARTNERSHIP ACT.

    (a) In General.--The Job Training Partnership Act (29 U.S.C. 1501 
et seq.), except section 1, sections 421 through 439 (relating to the 
Job Corps), and section 441 of such Act (relating to veterans' 
employment programs), is hereby repealed.
    (b) Conforming Amendments.--
            (1) Short title.--Section 1 of the Job Training Partnership 
        Act (29 U.S.C. 1501, note) is amended--
                    (A) in the heading, by striking ``; table of 
                contents''; and
                    (B) by striking all that follows after ``Job 
                Training Partnership Act''.
            (2) Job corps.--Such Act (29 U.S.C. 1501 et seq.), as 
        amended by this section, is further amended--
                    (A) by redesignating sections 421 through 439 as 
                sections 2 through 21, respectively;
                    (B) in section 2 (as redesignated), by striking 
                ``part'' each place it appears and inserting ``Act'';
                    (C) in section 4(4) (as redesignated), by striking 
                ``sections 424 and 425'' and inserting ``sections 5 and 
                6'';
                    (D) in section 5 (as redesignated)--
                            (i) in subsection (a), by striking 
                        ``entities administering programs under title 
                        II of this Act,''; and
                            (ii) in subsection (b), by striking 
                        ``part'' and inserting ``Act'';
                    (E) in section 7 (as redesignated)--
                            (i) in subsection (a), by striking 
                        ``section 428'' and inserting ``section 9''; 
                        and
                            (ii) by striking subsection (d);
                    (F) in section 8 (as redesignated)--
                            (i) by striking subsection (b); and
                            (ii) by redesignating subsection (c) as 
                        subsection (b);
                    (G) in section 14 (as redesignated)--
                            (i) in subsection (a)(4), by striking 
                        ``part'' and inserting ``Act'';
                            (ii) in subsection (c)(1), by striking 
                        ``and activities authorized under sections 452 
                        and 453''; and
                            (iii) in subsection (e), by striking 
                        ``section 431'' and inserting ``section 12'';
                    (H) in section 15 (as redesignated)--
                            (i) in subsection (a)--
                                    (I) in the matter preceding 
                                paragraph (1), by striking ``section 
                                427'' and inserting ``section 8''; and
                                    (II) in paragraph (4)(A), by 
                                striking ``section 428'' and inserting 
                                ``section 9'';
                            (ii) in subsection (c)(3), by striking 
                        ``section 423'' and inserting ``section 4'';
                            (iii) in subsection (d), by striking 
                        ``sections 424 and 425'' and inserting 
                        ``sections 5 and 6''; and
                            (iv) in subsection (e), by striking ``, 
                        pursuant to section 452(d),'';
                    (I) in section 17 (as redesignated), by striking 
                ``purpose of this part'' each place it appears and 
                inserting ``purpose of this Act'';
                    (J) in section 20 (as redesignated), by striking 
                ``part'' each place it appears and inserting ``Act''; 
                and
                    (K) in section 21 (as redesignated), by striking 
                ``part'' and inserting ``Act''.
            (3) Veterans' employment programs.--Such Act (29 U.S.C. 
        1501 et seq.), as amended by this section, is further amended--
                    (A) by redesignating section 441 as section 22;
                    (B) by striking the heading of such section 22 (as 
                redesignated), and inserting the following:

                 ``veterans' employment programs''; and

                    (C) in such section 22, by striking ``part'' each 
                place it appears and inserting ``section''.
            (4) Authorization of appropriations.--Such Act (29 U.S.C. 
        1501 et seq.), as amended by this section, is further amended 
        by adding at the end the following new section:

                   ``authorization of appropriations

    ``Sec. 23. There are authorized to be appropriated such sums as are 
necessary to carry out this Act.''.

SEC. 712. STEWART B. MCKINNEY HOMELESS ASSISTANCE ACT.

    (a) Adult Education.--
            (1) In general.--Subtitle A of title VII of the Stewart B. 
        McKinney Homeless Assistance Act (42 U.S.C. 11421 et seq.) is 
        repealed.
            (2) Table of contents.--The table of contents of such Act 
        is amended by striking the items relating to subtitle A of 
        title VII of such Act.
    (b) Subtitle C.--
            (1) In general.--Subtitle C of title VII of the Stewart B. 
        McKinney Homeless Assistance Act (42 U.S.C. 11441 et seq.), 
        except section 738, is hereby repealed.
            (2) Table of contents.--The table of contents of such Act 
        is amended--
                    (A) by striking the item relating to subtitle C of 
                title VII of such Act; and
                    (B) by striking the items relating to sections 731 
                through 737 and sections 739 through 741.

SEC. 713. EFFECTIVE DATE.

    The repeals and amendments made by this Act shall take effect on 
July 1, 1997, except for amendments to the Rehabilitation Act of 1973.
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