[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3268 Reported in House (RH)]





                                                 Union Calendar No. 304

104th CONGRESS

  2d Session

                               H. R. 3268

                          [Report No. 104-614]

_______________________________________________________________________

                                 A BILL

     To amend the Individuals with Disabilities Education Act, to 
 reauthorize and make improvements to that Act, and for other purposes.

_______________________________________________________________________

                             June 10, 1996

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed





                                                 Union Calendar No. 304
104th CONGRESS
  2d Session
                                H. R. 3268

                          [Report No. 104-614]

     To amend the Individuals with Disabilities Education Act, to 
 reauthorize and make improvements to that Act, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 18, 1996

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

                             June 10, 1996

   Additional sponsors: Mr. Gunderson, Mr. Sam Johnson of Texas, Mr. 
Riggs, Mr. Souder, Mr. Weldon of Florida, Mr. Greenwood, Mr. Barrett of 
  Nebraska, Mr. Ballenger, Mrs. Meyers of Kansas, Mr. Graham, and Mr. 
                              Knollenberg

                             June 10, 1996

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on April 
                               18, 1996]

_______________________________________________________________________

                                 A BILL


 
     To amend the Individuals with Disabilities Education Act, to 
 reauthorize and make improvements to that Act, 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 ``IDEA Improvement Act of 1996''.

 TITLE I--AMENDMENTS TO THE INDIVIDUALS WITH DISABILITIES EDUCATION ACT

SEC. 101. AMENDMENTS TO THE INDIVIDUALS WITH DISABILITIES EDUCATION 
              ACT.

    Parts A through D of the Individuals with Disabilities Education 
Act (20 U.S.C. 1400 et seq.) are amended to read as follows:

                      ``PART A--GENERAL PROVISIONS

``SEC. 601. SHORT TITLE; TABLE OF CONTENTS; FINDINGS; PURPOSES.

    ``(a) Short Title.--This title may be cited as the `Individuals 
with Disabilities Education Act'.
    ``(b) Table of Contents.--The table of contents for this title is 
as follows:

                      ``Part A--General Provisions

        ``Sec. 601. Short title; table of contents; findings; purposes.
        ``Sec. 602. Definitions.
        ``Sec. 603. Office of Special Education Programs.
        ``Sec. 604. Abrogation of State sovereign immunity.
        ``Sec. 605. Requirements for prescribing regulations.
        ``Sec. 606. Employment of individuals with disabilities.

  ``Part B--Assistance for Education of All Children With Disabilities

        ``Sec. 611. Authorization; allotment; use of funds; 
                            authorization of appropriations.
        ``Sec. 612. State requirements.
        ``Sec. 613. Local educational agency requirements.
        ``Sec. 614. Evaluations, reevaluations, individualized 
                            education programs, and educational 
                            placements.
        ``Sec. 615. Procedural safeguards.
        ``Sec. 616. Withholding and judicial review.
        ``Sec. 617. Administration.
        ``Sec. 618. Program information.
        ``Sec. 619. Preschool grants.

            ``Part C--Infants and Toddlers With Disabilities

        ``Sec. 631. Findings and policy.
        ``Sec. 632. Definitions.
        ``Sec. 633. General authority.
        ``Sec. 634. Eligibility.
        ``Sec. 635. Requirements for Statewide system.
        ``Sec. 636. Individualized family service plan.
        ``Sec. 637. State application and assurances.
        ``Sec. 638. Uses of funds.
        ``Sec. 639. Procedural safeguards.
        ``Sec. 640. Payor of last resort.
        ``Sec. 641. State interagency coordinating council.
        ``Sec. 642. Federal administration.
        ``Sec. 643. Allocation of funds.
        ``Sec. 644. Authorization of appropriations.

  ``Part D--National Activities to Improve Education of Children With 
                              Disabilities

        ``Sec. 651. Purpose of part.
 ``subpart 1--general provisions and national research and improvement 
                               activities
        ``Sec. 661. Comprehensive plan.
        ``Sec. 662. Priorities.
        ``Sec. 663. Peer review.
        ``Sec. 664. Eligible applicants.
        ``Sec. 665. Applicant and recipient responsibilities.
        ``Sec. 666. Indirect costs.
        ``Sec. 667. Program evaluation.
        ``Sec. 668. National assessment.
        ``Sec. 66``subpart 2--professional development
        ``Sec. 671. Purpose.
        ``Sec. 672. Finding.
        ``Sec. 673. National activities.
        ``Sec. 674. Professional development for personnel serving low-
                            incidence populations.
        ``Sec. 675. Leadership personnel.
        ``Sec. 676. Service obligation.
    ``subpart 3--state program improvement grants for children with 
                              disabilities
        ``Sec. 681. Purpose.
        ``Sec. 682. Eligibility and collaborative process.
        ``Sec. 683. State improvement plans.
        ``Sec. 684. Use of funds.
        ``Sec. 685. Minimum State allotments.
        ``Sec. 686. Au``subpart 4--parent trainings.
        ``Sec. 691. Grants for parent training and information centers.
        ``Sec. 692. Technical assistance for parent training and 
                            information centers.
        ``Sec. 693. Authorization of appropriations.
    ``(c) Findings.--The Congress finds the following:
            ``(1) Disability is a natural part of the human experience 
        and in no way diminishes the right of individuals to 
        participate in or contribute to society. Improving educational 
        results for children with disabilities is an essential element 
        of our national policy of ensuring equality of opportunity, 
        full participation, independent living, and economic self-
        sufficiency for individuals with disabilities.
            ``(2) Before the date of the enactment of the Education for 
        All Handicapped Children Act of 1975 (Public Law 94-142)--
                    ``(A) the special educational needs of children 
                with disabilities were not being fully met;
                    ``(B) more than one-half of the children with 
                disabilities in the United States did not receive 
                appropriate educational services that would enable such 
                children to have full equality of opportunity;
                    ``(C) 1,000,000 of the children with disabilities 
                in the United States were excluded entirely from the 
                public school system and did not go through the 
                educational process with their peers;
                    ``(D) there were many children with disabilities 
                throughout the United States participating in regular 
                school programs whose disabilities prevented such 
                children from having a successful educational 
                experience because their disabilities were undetected; 
                and
                    ``(E) because of the lack of adequate services 
                within the public school system, families were often 
                forced to find services outside the public school 
                system, often at great distance from their residence 
                and at their own expense.
            ``(3) Since the enactment and implementation of the 
        Education for All Handicapped Children Act of 1975, this Act 
        has been successful in ensuring children with disabilities and 
        the families of such children access to a free appropriate 
        public education and in improving educational results for 
        children with disabilities.
            ``(4) However, the implementation of this Act has been 
        impeded by low expectations, and an insufficient focus on 
        applying replicable research on proven methods of teaching and 
        learning for children with disabilities.
            ``(5) 20 years of research and experience has demonstrated 
        that the education of children with disabilities can be made 
        more effective by--
                    ``(A) having high expectations for such children 
                and ensuring their access in the general curriculum to 
                the maximum extent possible;
                    ``(B) ensuring that families of such children have 
                meaningful opportunities to participate in the 
                education of their children at school and at home;
                    ``(C) coordinating this Act with other local, 
                State, and Federal school improvement efforts in order 
                to ensure that such children benefit from such efforts 
                and that special education can become a service for 
                such children rather than a place where they are sent;
                    ``(D) providing appropriate special education and 
                related services and aids and supports in the regular 
                classroom to such children, whenever appropriate;
                    ``(E) supporting high-quality, intensive 
                professional development for all personnel who work 
                with such children in order to ensure that they have 
                the skills and knowledge necessary to enable them--
                            ``(i) to meet developmental goals and, to 
                        the maximum extent possible, those challenging 
                        expectations that have been established for all 
                        children; and
                            ``(ii) to be prepared to lead productive, 
                        independent, adult lives, to the maximum extent 
                        possible;
                    ``(F) providing incentives for whole-school 
                approaches and early intervention to reduce the need to 
                label children as disabled in order to address their 
                learning needs; and
                    ``(G) focusing resources on teaching and learning 
                while reducing paperwork and requirements that do not 
                assist in improving educational results.
            ``(6) While States and local educational agencies are 
        responsible for providing an education for all children with 
        disabilities, it is in the national interest that the Federal 
        Government have a role in assisting State and local efforts to 
        educate children with disabilities in order to improve results 
        for such children and to ensure equal protection of the law.
            ``(7)(A) The Federal Government must be responsive to the 
        growing needs of an increasingly more diverse society. A more 
        equitable allocation of resources is essential for the Federal 
        Government to meet its responsibility to provide an equal 
        educational opportunity for all individuals.
            ``(B) America's racial profile is rapidly changing. While 
        the rate of increase for white Americans is 3.2 percent, the 
        rate of increase for racial and ethnic minorities is much 
        higher: 38.6 percent for Hispanics, 14.6 percent for African-
        Americans, and 40.1 percent for Asians and other ethnic groups.
            ``(C) By the year 2000, this Nation will have 260,000,000 
        people, one of every three of whom will be either African-
        American, Hispanic, or Asian-American.
            ``(D) Taken together as a group, it is a more frequent 
        phenomenon for minorities to comprise the majority of public 
        school students. Large city school populations are 
        overwhelmingly minority, e.g., Miami, 71 percent; Philadelphia, 
        73 percent; Baltimore, 80 percent.
            ``(E) Recruitment efforts within special education at the 
        level of preservice, continuing education, and practice must 
        focus on bringing larger numbers of minorities into the 
        profession in order to provide appropriate practitioner 
        knowledge, role models, and sufficient manpower to address the 
        clearly changing demography of special education.
            ``(F) The limited English proficient population is the 
        fastest growing in our Nation, and the growth is occurring in 
        many parts of our Nation. In the Nation's 2 largest school 
        districts, limited English students make up almost half of all 
        students initially entering school at the kindergarten level. 
        Studies have documented apparent discrepancies in the levels of 
        referral and placement of limited English proficient children 
        in special education. The Department of Education has found 
        that services provided to limited English proficient students 
        often do not respond primarily to the pupil's academic needs. 
        These trends pose special challenges for special education in 
        the referral, assessment, and services for our Nation's 
        students from non-English language backgrounds.
            ``(8)(A) Greater efforts are needed to prevent the 
        intensification of problems connected with mislabeling and high 
        dropout rates among minority children with disabilities.
            ``(B) More minority children continue to be served in 
        special education than would be expected from the percentage of 
        minority students in the general school population.
            ``(C) Poor African-American children are 3.5 times more 
        likely to be identified by their teacher as mentally retarded 
        than their white counterpart.
            ``(D) Although African-Americans represent 12 percent of 
        elementary and secondary enrollments, they constitute 28 
        percent of total enrollments in special education.
            ``(E) The drop out rate is 68 percent higher for minorities 
        than for whites.
            ``(F) More than 50 percent of minority students in large 
        cities drop out of school.
            ``(9)(A) The opportunity for full participation in awards 
        for grants and contracts; boards of organizations receiving 
        funds under this Act; and peer review panels; and training of 
        professionals in the area of special education by minority 
        individuals, organizations, and historically Black colleges and 
        universities is essential if we are to obtain greater success 
        in the education of minority children with disabilities.
            ``(B) In 1989, of the 661,000 college and university 
        professors, 4.6 percent were African-American and 3.1 percent 
        were Hispanic. Of the 3,600,000 teachers, prekindergarten 
        through high school, 9.4 percent were African-American and 3.9 
        percent were Hispanic.
            ``(C) Students from minority groups comprise more than 50 
        percent of K-12 public school enrollment in seven States yet 
        minority enrollment in teacher training programs is less than 
        15 percent in all but six States.
            ``(D) As the number of African-American and Hispanic 
        students in special education increases, the number of minority 
        teachers and related service personnel produced in our colleges 
        and universities continues to decrease.
            ``(E) Ten years ago, 12.5 percent of the United States 
        teaching force in public elementary and secondary schools were 
        members of a minority group. Minorities comprised 21.3 percent 
        of the national population at that time and were clearly 
        underrepresented then among employed teachers. Today, the 
        elementary and secondary teaching force is 3 to 5 percent 
        minority, while one-third of the students in public schools are 
        minority children.
            ``(F) As recently as 1984-85, Historically Black Colleges 
        and Universities supplied nearly half of the African-American 
        teachers in the Nation. However, in 1988, Historically Black 
        Colleges and Universities received only 2 percent of the 
        discretionary funds for special education and related services 
        personnel training.
            ``(G) While African-American students constitute 28 percent 
        of total enrollment in special education, only 11.2 percent of 
        individuals enrolled in preservice training programs for 
        special education are African-American.
            ``(H) In 1986-87, of the degrees conferred in education at 
        the B.A., M.A., and Ph.D levels, only 6, 8, and 8 percent, 
        respectively, were awarded to African-American or Hispanic 
        students.
            ``(10) Minorities and underserved persons are socially 
        disadvantaged because of the lack of opportunities in training 
        and educational programs, undergirded by the practices in the 
        private sector that impede their full participation in the 
        mainstream of society.
    ``(d) Purposes.--The purposes of this title are--
            ``(1) to ensure that all children with disabilities have 
        available to them a free appropriate public education that 
        emphasizes special education and related services designed to 
        meet their unique needs and prepare them for employment and 
        independent living;
            ``(2) to ensure that the rights of children with 
        disabilities and parents of such children are protected;
            ``(3) to assist States, localities, and Federal agencies to 
        provide for the education of all children with disabilities; 
        and
            ``(4) to assess, and ensure the effectiveness of, efforts 
        to educate children with disabilities.

``SEC. 602. DEFINITIONS.

    ``As used in this title:
            ``(1) Assistive technology device.--The term `assistive 
        technology device' means any item, piece of equipment, or 
        product system, whether acquired commercially off the shelf, 
        modified, or customized, that is used to increase, maintain, or 
        improve functional capabilities of a child with a disability.
            ``(2) Assistive technology service.--The term `assistive 
        technology service' means any service that directly assists a 
        child with a disability in the selection, acquisition, or use 
        of an assistive technology device. Such term includes--
                    ``(A) the evaluation of the needs of such child, 
                including a functional evaluation of the child in the 
                child's customary environment;
                    ``(B) purchasing, leasing, or otherwise providing 
                for the acquisition of assistive technology devices by 
                such child;
                    ``(C) selecting, designing, fitting, customizing, 
                adapting, applying, maintaining, repairing, or 
                replacing of assistive technology devices;
                    ``(D) coordinating and using other therapies, 
                interventions, or services with assistive technology 
                devices, such as those associated with existing 
                education and rehabilitation plans and programs;
                    ``(E) training or technical assistance for such 
                child, or, where appropriate, the family of such child; 
                and
                    ``(F) training or technical assistance for 
                professionals (including individuals providing 
                education and rehabilitation services), employers, or 
                other individuals who provide services to, employ, or 
                are otherwise substantially involved in the major life 
                functions of such child.
            ``(3) Child with a disability.--
                    ``(A) In general.--The term `child with a 
                disability' means a child--
                            ``(i) with mental retardation, hearing 
                        impairments (including deafness), speech or 
                        language impairments, visual impairments 
                        (including blindness), serious emotional 
                        disturbance, orthopedic impairments, autism, 
                        traumatic brain injury, other health 
                        impairments, or specific learning disabilities; 
                        and
                            ``(ii) who, by reason thereof, needs 
                        special education and related services.
                    ``(B) Child aged 3 to 9.--The term `child with a 
                disability' for a child aged 3 to 9, inclusive, may, at 
                the discretion of the State and the local educational 
                agency, include a child--
                            ``(i) experiencing developmental delays, as 
                        defined by the State and as measured by 
                        appropriate diagnostic instruments and 
                        procedures, in one or more of the following 
                        areas: physical development, cognitive 
                        development, communication development, social 
                        or emotional development, or adaptive 
                        development; and
                            ``(ii) who, by reason thereof, needs 
                        special education and related services.
            ``(4) Educational service agency.--The term `educational 
        service agency'--
                    ``(A) means a regional public multiservice agency--
                            ``(i) authorized by State law to develop, 
                        manage, and provide services or programs to 
                        local educational agencies; and
                            ``(ii) recognized as an administrative 
                        agency for purposes of the provision of special 
                        education and related services provided within 
                        public elementary and secondary schools of the 
                        State; and
                    ``(B) includes any other public institution or 
                agency having administrative control and direction over 
                a public elementary or secondary school.
            ``(5) Elementary school.--The term `elementary school' 
        means a day or residential school which provides elementary 
        education, as determined under State law, policy, or procedure.
            ``(6) Equipment.--The term `equipment' includes--
                    ``(A) machinery, utilities, and built-in equipment 
                and any necessary enclosures or structures to house 
                such machinery, utilities, or equipment; and
                    ``(B) all other items necessary for the functioning 
                of a particular facility as a facility for the 
                provision of educational services, including items such 
                as instructional equipment and necessary furniture, 
                printed, published, and audio-visual instructional 
                materials, telecommunications, sensory, and other 
                technological aids and devices, and books, periodicals, 
                documents, and other related materials.
            ``(7) Excess costs.--The term `excess costs' means those 
        costs which are in excess of the average annual per student 
        expenditure in a local educational agency during the preceding 
        school year for an elementary or secondary school student, as 
        may be appropriate, and which shall be computed after 
        deducting--
                    ``(A) amounts received--
                            ``(i) under part B of this title;
                            ``(ii) under part A of title I of the 
                        Elementary and Secondary Education Act of 1965; 
                        or
                            ``(iii) under part A of title VII of such 
                        Act; and
                    ``(B) any State or local funds expended for 
                programs that would qualify for assistance under any 
                such part.
            ``(8) Free appropriate public education.--The term `free 
        appropriate public education' means special education and 
        related services that--
                    ``(A) have been provided at public expense, under 
                public supervision and direction, and without charge;
                    ``(B) meet the standards of the State educational 
                agency;
                    ``(C) include an appropriate preschool, elementary, 
                or secondary school education in the State involved; 
                and
                    ``(D) are provided in conformity with the 
                individualized education program required under section 
                614(d).
            ``(9) Indian.--The term `Indian' means an individual who is 
        a member of an Indian tribe.
            ``(10) Indian tribe.--The term `Indian tribe' means any 
        Federal or State Indian tribe, band, rancheria, pueblo, colony, 
        or community, including any Alaskan native village or regional 
        village corporation (as defined in or established under the 
        Alaska Native Claims Settlement Act).
            ``(11) Individualized education program.--The term 
        `individualized education program' or `IEP' means a written 
        statement for each child with a disability that is developed, 
        reviewed, and revised in accordance with section 614(d) and 
        that includes--
                    ``(A) a statement of the child's present levels of 
                educational performance, including--
                            ``(i) how the child's disability affects 
                        the child's involvement and progress in the 
                        general curriculum; or
                            ``(ii) for preschool children, as 
                        appropriate, how the disability affects the 
                        child's participation in appropriate 
                        activities;
                    ``(B) a statement of measurable annual goals, 
                including benchmarks or short-term objectives, related 
                to--
                            ``(i) meeting the child's needs that result 
                        from the child's disability to enable the child 
                        to be involved in and progress in the general 
                        curriculum; and
                            ``(ii) meeting each of the child's other 
                        educational needs that result from the child's 
                        disability;
                    ``(C) a statement of how the classroom was adapted 
                before the student was referred for identification as a 
                child with a disability;
                    ``(D) a justification of the extent, if any, to 
                which the child will not be educated with nondisabled 
                children;
                    ``(E) a statement of the special education and 
                related services and supplementary aids and services to 
                be provided to the child, or on behalf of the child, 
                and any program modifications or support for school 
                personnel necessary for the child--
                            ``(i) to progress toward the attainment of 
                        the annual goals described in subparagraph (B); 
                        and
                            ``(ii) to be involved and progress in the 
                        general curriculum in accordance with 
                        subparagraph (A) and to participate in 
                        extracurricular and other nonacademic 
                        activities;
                    ``(F)(i) a statement of any individual 
                modifications in the administration of State or 
                districtwide assessments of student achievement that 
                are needed in order for the child to participate in 
                such assessment; and
                    ``(ii) if the individualized education program team 
                determines that the child will not participate in a 
                particular State or districtwide assessment of student 
                achievement (or part of such an assessment), a 
                statement of--
                            ``(I) why that assessment is not 
                        appropriate for the child; and
                            ``(II) how the child will be assessed;
                    ``(G) the projected date for the beginning of the 
                services and modifications described in subparagraph 
                (E), and the anticipated frequency, location, and 
                duration of those services and modifications;
                    ``(H)(i) beginning at age 14, and updated annually, 
                a statement of the transition service needs of the 
                child under the applicable components of the child's 
                IEP that focuses on the child's courses of study (such 
                as participation in advanced-placement courses or a 
                vocational education or school-to-work program);
                    ``(ii) beginning at age 16 (or younger, if 
                determined appropriate by the IEP Team), a statement of 
                needed transition services for the child, including, 
                when appropriate, a statement of the interagency 
                responsibilities or any needed linkages; and
                    ``(iii) beginning at least one year before the 
                child reaches the age of majority under State law, a 
                statement that the child has been informed of his or 
                her rights under this title, if any, that will transfer 
                to the child on reaching the age of majority under 
                section 615(m); and
                    ``(I) a statement of--
                            ``(i) how the child's progress toward the 
                        annual goals described in subparagraph (B) will 
                        be measured; and
                            ``(ii) how the child's parents will be 
                        regularly informed (by such means as periodic 
                        report cards), at least as often as parents are 
                        informed of their nondisabled children's 
                        progress, of--
                                    ``(I) their child's progress toward 
                                the annual goals described in 
                                subparagraph (B); and
                                    ``(II) the extent to which that 
                                progress is sufficient to enable the 
                                child to achieve the objectives by the 
                                end of the year.
            ``(12) Individualized education program team.--The term 
        `individualized education program team' or `IEP Team' means a 
        group of individuals composed of--
                    ``(A) the parents of a child with a disability;
                    ``(B) at least one regular education teacher of 
                such child (if the child is, or may be, participating 
                in the regular education environment);
                    ``(C) at least one special education teacher, or 
                where appropriate, at least one special education 
                provider of such child;
                    ``(D) a representative of the local educational 
                agency who--
                            ``(i) is qualified to provide, or supervise 
                        the provision of, specially designed 
                        instruction to meet the unique needs of 
                        children with disabilities;
                            ``(ii) is knowledgeable about the general 
                        curriculum; and
                            ``(iii) is knowledgeable about the 
                        availability of resources of the local 
                        educational agency;
                    ``(E) whenever appropriate, the child with a 
                disability; and
                    ``(F) at the discretion of the parent or the 
                agency, other individuals who have special expertise or 
                knowledge regarding the abilities and disability or 
                disabilities of the child, including, as appropriate, 
                related services personnel who are or who will be 
                working with the child.
            ``(13) Institution of higher education.--The term 
        `institution of higher education'--
                    ``(A) has the meaning given that term in section 
                1201(a) of the Higher Education Act of 1965; and
                    ``(B) also includes any community college receiving 
                funding from the Secretary of the Interior under the 
                Tribally Controlled Community College Assistance Act of 
                1978.
            ``(14) Local educational agency.--The term `local 
        educational agency' means--
                    ``(A) a public board of education or other public 
                authority legally constituted within a State for either 
                administrative control or direction of, or to perform a 
                service function for, public elementary or secondary 
                schools in a city, county, township, school district, 
                or other political subdivision of a State, or for a 
                combination of school districts or counties as are 
                recognized in a State as an administrative agency for 
                its public elementary or secondary schools;
                    ``(B) any other public institution or agency having 
                administrative control and direction of a public 
                elementary or secondary school; or
                    ``(C) an educational service agency.
            ``(15) Native language.--The term `native language', when 
        used with reference to an individual of limited English 
        proficiency, means the language normally used by the 
        individual, or in the case of a child, the language normally 
        used by the parents of the child, and includes American Sign 
        Language.
            ``(16) Nonprofit.--The term `nonprofit' as applied to a 
        school, agency, organization, or institution means a school, 
        agency, organization, or institution owned and operated by one 
        or more nonprofit corporations or associations no part of the 
        net earnings of which inures, or may lawfully inure, to the 
        benefit of any private shareholder or individual.
            ``(17) Parent.--The term `parent' includes a legal guardian 
        or surrogate parent.
            ``(18) Parent organization.--The term `parent organization' 
        means a private nonprofit organization (but not including an 
        institution of higher education) that--
                    ``(A) has a board of directors--
                            ``(i) the majority of whom are parents of 
                        children with disabilities;
                            ``(ii) that includes--
                                    ``(I) individuals working in the 
                                fields of special education, related 
                                services, and early intervention; and
                                    ``(II) individuals with 
                                disabilities; and
                            ``(iii) the parent and professional members 
                        of which are broadly representative of the 
                        population to be served; or
                    ``(B)(i) represents the interests of individuals 
                with disabilities and has established a special 
                governing committee which meets the requirements of 
                subparagraph (A); and
                    ``(ii) has a memorandum of understanding between 
                the special governing committee and the board of 
                directors of the organization which clearly outlines 
                the relationship between the board and the committee 
                and the decisionmaking responsibilities and authority 
                of each.
            ``(19) Parent training and information center.--The term 
        `parent training and information center' means a center that--
                    ``(A) provides training and information that meets 
                the training and information needs of parents of 
                children with disabilities living in the area served by 
                the center; and
                    ``(B) assists parents--
                            ``(i) to better understand the nature of 
                        their children's disabilities and their 
                        educational and developmental needs;
                            ``(ii) to communicate effectively with 
                        personnel responsible for providing special 
                        education, early intervention, and related 
                        services;
                            ``(iii) to participate in decisionmaking 
                        processes and the development of the IEP;
                            ``(iv) to obtain appropriate information 
                        about the range of options, programs, services, 
                        and resources available to assist children with 
                        disabilities and their families;
                            ``(v) to understand the programs under this 
                        title for the education of, and the provision 
                        of early intervention services to, children 
                        with disabilities; and
                            ``(vi) to participate in school reform 
                        activities.
            ``(20) Related services.--The term `related services' means 
        transportation, and such developmental, corrective, and other 
        supportive services (including speech-language pathology and 
        audiology services, psychological services, physical and 
        occupational therapy, recreation, including therapeutic 
        recreation, social work services, counseling services, 
        including rehabilitation counseling, orientation and mobility 
        services, and medical services, except that such medical 
        services shall be for diagnostic and evaluation purposes only) 
        as may be required to assist a child with a disability to 
        benefit from special education, and includes the early 
        identification and assessment of disabling conditions in 
        children.
            ``(21) Secondary school.--The term `secondary school' means 
        a day or residential school which provides secondary education, 
        as determined under State law, policy, or procedure, except 
        that it does not include any education provided beyond grade 
        12.
            ``(22) Secretary.--The term `Secretary' means the Secretary 
        of Education.
            ``(23) Special education.--The term `special education' 
        means specially designed instruction, at no cost to parents, to 
        meet the unique needs of a child with a disability, including--
                    ``(A) instruction conducted in the classroom, in 
                the home, in hospitals and institutions, and in other 
                settings; and
                    ``(B) instruction in physical education.
            ``(24) Specific learning disability.--
                    ``(A) In general.--The term `specific learning 
                disability' means a disorder in one or more of the 
                basic psychological processes involved in understanding 
                or in using language, spoken or written, which disorder 
                may manifest itself in imperfect ability to listen, 
                think, speak, read, write, spell, or do mathematical 
                calculations.
                    ``(B) Disorders included.--Such term includes such 
                conditions as perceptual disabilities, brain injury, 
                minimal brain dysfunction, dyslexia, and developmental 
                aphasia.
                    ``(C) Disorders not included.--Such term does not 
                include a learning problem that is primarily the result 
                of visual, hearing, or motor disabilities, of mental 
                retardation, of emotional disturbance, or of 
                environmental, cultural, or economic disadvantage.
            ``(25) State.--The term `State' means each of the 50 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, and each of the territories.
            ``(26) State educational agency.--The term `State 
        educational agency' means the State board of education or other 
        agency or officer primarily responsible for the State 
        supervision of public elementary and secondary schools, or, if 
        there is no such officer or agency, an officer or agency 
        designated by the Governor or by State law.
            ``(27) Supplementary aids and services.--The term 
        `supplementary aids and services' means, aids, services, and 
        other supports that are provided in regular education classes 
        or other education-related settings to enable children with 
        disabilities to be educated with nondisabled children to the 
        maximum extent appropriate in accordance with section 
        612(a)(4).
            ``(28) Territory.--The term `territory' means American 
        Samoa, the Commonwealth of the Northern Mariana Islands, Guam, 
        and the Virgin Islands.
            ``(29) Transition services.--The term `transition services' 
        means a coordinated set of activities for a child with a 
        disability that--
                    ``(A) are designed within an outcome-oriented 
                process, which promotes movement from school to post-
                school activities, including post-secondary education, 
                vocational training, integrated employment (including 
                supported employment), continuing and adult education, 
                adult services, independent living, or community 
                participation;
                    ``(B) are based upon the individual child's needs, 
                taking into account the child's preferences and 
                interests; and
                    ``(C) include instruction, related services, 
                community experiences, the development of employment 
                and other post-school adult living objectives, and, 
                when appropriate, acquisition of daily living skills 
                and functional vocational evaluation.

``SEC. 603. OFFICE OF SPECIAL EDUCATION PROGRAMS.

    ``(a) Establishment.--There shall be, within the Office of Special 
Education and Rehabilitative Services in the Department of Education, 
an Office of Special Education Programs which shall be the principal 
agency in such Department for administering and carrying out this title 
and other programs and activities concerning the education and training 
of children with disabilities.
    ``(b) Director.--The Office established under subsection (a) shall 
be headed by a Director who shall be selected by the Secretary and 
shall report directly to the Assistant Secretary for Special Education 
and Rehabilitative Services.
    ``(c) Voluntary and Uncompensated Services.--Notwithstanding 
section 1342 of title 31, United States Code, the Secretary is 
authorized to accept voluntary and uncompensated services in 
furtherance of the purposes of this title.

``SEC. 604. ABROGATION OF STATE SOVEREIGN IMMUNITY.

    ``(a) In General.--A State shall not be immune under the eleventh 
amendment to the Constitution of the United States from suit in Federal 
court for a violation of this title.
    ``(b) Remedies.--In a suit against a State for a violation of this 
title, remedies (including remedies both at law and in equity) are 
available for such a violation to the same extent as such remedies are 
available for such a violation in the suit against any public entity 
other than a State.
    ``(c) Effective Date.--The provisions of subsections (a) and (b) 
apply with respect to violations that occur in whole or part after the 
date of the enactment of the Education of the Handicapped Act 
Amendments of 1990.

``SEC. 605. REQUIREMENTS FOR PRESCRIBING REGULATIONS.

    ``(a) Public-Comment Period.--The Secretary shall provide a public-
comment period of at least 90 days on any regulation proposed under 
part B or part C of this title on which an opportunity for public 
comment is otherwise required by law.
    ``(b) Protections Provided to Children.--The Secretary may not 
implement, or publish in final form, any regulation prescribed pursuant 
to this title which would procedurally or substantively lessen the 
protections provided to children with disabilities under this title, as 
embodied in regulations in effect on July 20, 1983 (particularly as 
such protections relate to parental consent to initial evaluation or 
initial placement in special education, least restrictive environment, 
related services, timeliness, attendance of evaluation personnel at 
individualized education program meetings, or qualifications of 
personnel), except to the extent that such regulation reflects the 
clear and unequivocal intent of the Congress in legislation.
    ``(c) Correspondence From Department of Education Describing 
Interpretations of This Part.--
            ``(1) In general.--The Secretary shall, on a quarterly 
        basis, publish in the Federal Register, and widely disseminate 
        to interested entities through various additional forms of 
        communication, a list of correspondence from the Department of 
        Education received by individuals during the previous quarter 
        that describes the interpretations of the Department of 
        Education of this Act or the regulations implemented pursuant 
        to this Act.
            ``(2) Additional information.--For each item of 
        correspondence published in a list under paragraph (1), the 
        Secretary shall identify the topic addressed by the 
        correspondence and shall include such other summary information 
        as the Secretary determines to be appropriate.
            ``(3) Restrictions on use of correspondence.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an item of correspondence published 
                and disseminated under paragraph (1) may not be used in 
                the following:
                            ``(i) An administrative or due process 
                        action commenced under section 615.
                            ``(ii) A compliance review or other action 
                        relating to a State educational agency 
                        conducted by the Department of Education.
                            ``(iii) A compliance review or other action 
                        relating to a local educational agency or other 
                        agency conducted by a State educational agency.
                    ``(B) Exceptions.--A restriction on the use of an 
                item of correspondence under subparagraph (A) shall not 
                apply if the item of correspondence--
                            ``(i) is directly related to the particular 
                        fact situation, practice, or policy at issue 
                        under clause (i) or (iii) of subparagraph (A);
                            ``(ii)(I) was originally directed to one of 
                        the parties to the action under subparagraph 
                        (A)(i); or
                            ``(II) was originally directed to the 
                        particular local educational agency or other 
                        agency under subparagraph (A)(iii); or
                            ``(iii) was originally directed to the 
                        particular State educational agency under 
                        subparagraph (A)(ii).

``SEC. 606. EMPLOYMENT OF INDIVIDUALS WITH DISABILITIES.

    ``The Secretary shall assure that each recipient of assistance 
under this Act shall make positive efforts to employ and advance in 
employment qualified individuals with disabilities in programs assisted 
under this Act.

  ``PART B--ASSISTANCE FOR EDUCATION OF ALL CHILDREN WITH DISABILITIES

``SEC. 611. AUTHORIZATION; ALLOTMENT; USE OF FUNDS; AUTHORIZATION OF 
              APPROPRIATIONS.

    ``(a) Authorization.--The Secretary of Education shall provide 
grants to States and provide amounts to the Secretary of the Interior 
for the purpose of providing special education and related services to 
children with disabilities in accordance with this part.
    ``(b) Allotment Among States.--
            ``(1) Reservation for the territories.--
                    ``(A) In general.--Of the amount appropriated 
                pursuant to subsection (e) to carry out this part for a 
                fiscal year, the Secretary shall allot not more than 
                one percent among the territories in accordance with 
                this paragraph.
                    ``(B) Basis for allotment.--The Secretary shall 
                allot to each territory an amount that bears the same 
                proportion to the amount appropriated pursuant to 
                subsection (e) for a fiscal year as the number of 
                individuals aged 3 to 21, inclusive, residing in such 
                territory bears to the aggregate number of such 
                individuals residing in all such territories.
                    ``(C) Prohibition on consolidation of grants.--The 
                provisions of section 501 of Public Law 95-134 (48 
                U.S.C. 1469a; relating to the consolidation of one or 
                more grants provided to certain territories) shall not 
                apply with respect to amounts provided to a territory 
                under a grant under this part.
            ``(2) Secretary of the interior.--Of the amount 
        appropriated pursuant to subsection (e) to carry out this part 
        for a fiscal year, the Secretary shall provide to the Secretary 
        of the Interior an amount equal to 1.226 percent to carry out 
        subsection (d) (relating to special education and related 
        services for Indian children with disabilities).
            ``(3) States.--
                    ``(A) In general.--After determining the amount to 
                be allotted to the territories under paragraph (1) and 
                the amount to be provided to the Secretary of the 
                Interior under paragraph (2) for a fiscal year, the 
                Secretary shall allot the remaining amount to the 
                remaining States in accordance with this paragraph.
                    ``(B) Basis for allotment.--Except as provided in 
                subparagraph (D), the Secretary shall allot to each 
                State an amount equal to the sum of the following 
                amounts:
                            ``(i) The amount equal to--
                                    ``(I) 85 percent of the remaining 
                                amount described in subparagraph (A); 
                                multiplied by
                                    ``(II) the child population 
                                percentage of the State (as determined 
                                under subparagraph (C)(i)).
                            ``(ii) The amount equal to--
                                    ``(I) 15 percent of the remaining 
                                amount described in subparagraph (A); 
                                multiplied by
                                    ``(II) the child poverty percentage 
                                of the State (as determined under 
                                subparagraph (C)(ii)).
                    ``(C) Determination of child population percentage 
                and child poverty percentage.--
                            ``(i) Child population percentage.--The 
                        child population percentage shall be determined 
                        by comparing--
                                    ``(I) the number of children aged 3 
                                to 21, inclusive, in the State who are 
                                of the same age as children with 
                                disabilities for whom the State ensures 
                                the availability of a free appropriate 
                                public education; to
                                    ``(II) the number of such children 
                                in all States.
                            ``(ii) Child poverty percentage.--The child 
                        poverty percentage shall be determined by 
                        comparing--
                                    ``(I) the number of children aged 3 
                                to 21, inclusive, in the State living 
                                in poverty who are of the same age as 
                                children with disabilities for whom the 
                                State ensures the availability of a 
                                free appropriate public education; to
                                    ``(II) the number of such children 
                                in all States.
                    ``(D) Transition formula.--For each of the fiscal 
                years 1997 through 2005, the Secretary shall allot the 
                remaining amount to the remaining States in accordance 
                with the following:
                            ``(i) Fiscal year 1997.--For fiscal year 
                        1997, the Secretary shall allot to each 
                        remaining State the sum of--
                                    ``(I) 10 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (B); and
                                    ``(II) 90 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (E).
                            ``(ii) Fiscal year 1998.--For fiscal year 
                        1998, the Secretary shall allot to each 
                        remaining State the sum of--
                                    ``(I) 20 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (B); and
                                    ``(II) 80 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (E).
                            ``(iii) Fiscal year 1999.--For fiscal year 
                        1999, the Secretary shall allot to each 
                        remaining State the sum of--
                                    ``(I) 30 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (B); and
                                    ``(II) 70 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (E).
                            ``(iv) Fiscal year 2000.--For fiscal year 
                        2000, the Secretary shall allot to each 
                        remaining State the sum of--
                                    ``(I) 40 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (B); and
                                    ``(II) 60 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (E).
                            ``(v) Fiscal year 2001.--For fiscal year 
                        2001, the Secretary shall allot to each 
                        remaining State the sum of--
                                    ``(I) 50 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (B); and
                                    ``(II) 50 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (E).
                            ``(vi) Fiscal year 2002.--For fiscal year 
                        2002, the Secretary shall allot to each 
                        remaining State the sum of--
                                    ``(I) 60 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (B); and
                                    ``(II) 40 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (E).
                            ``(vii) Fiscal year 2003.--For fiscal year 
                        2003, the Secretary shall allot to each 
                        remaining State the sum of--
                                    ``(I) 70 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (B); and
                                    ``(II) 30 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (E).
                            ``(viii) Fiscal year 2004.--For fiscal year 
                        2004, the Secretary shall allot to each 
                        remaining State the sum of--
                                    ``(I) 80 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (B); and
                                    ``(II) 20 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (E).
                            ``(ix) Fiscal year 2005.--For fiscal year 
                        2005, the Secretary shall allot to each 
                        remaining State the sum of--
                                    ``(I) 90 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (B); and
                                    ``(II) 10 percent multiplied by the 
                                amount determined for such State under 
                                subparagraph (E).
                    ``(E) Base amount for 1996.--
                            ``(i) In general.--Subject to clause (ii), 
                        the amount determined under this subparagraph 
                        for a State is the amount that bears the same 
                        proportion to the remaining amount (described 
                        in subparagraph (A)) for the fiscal year under 
                        subparagraph (D) as the amount received by the 
                        State under this section for fiscal year 1996 
                        bears to the aggregate of the amounts received 
                        by the remaining States (described in 
                        subparagraph (A)) under this section for fiscal 
                        year 1996.
                            ``(ii) Reduction in amount.--If the State 
                        received an amount under this section for 
                        fiscal year 1996 on the basis of children aged 
                        3 to 5, inclusive, in such State, but the State 
                        does not make a free appropriate public 
                        education available to all children with 
                        disabilities aged 3 to 5, inclusive, in the 
                        State at the time a determination is made under 
                        subparagraph (C), the Secretary shall reduce, 
                        on a proportional basis, the amount under 
                        clause (i) for purposes of allotting amounts 
                        under such subparagraph.
                    ``(F) Minimum allotment.--For fiscal year 1997 and 
                each subsequent fiscal year, the amount allotted to 
                each remaining State (described in subparagraph (A)) 
                shall not be less than an amount equal to one-third of 
                one percent of the remaining amount (described in 
                subparagraph (A)) for the fiscal year.
                    ``(G) Maximum allotment.--
                            ``(i) In general.--For fiscal year 1997 and 
                        each subsequent fiscal year, the amount 
                        allotted to each remaining State (described in 
                        subparagraph (A)) under this paragraph shall 
                        not be more than an amount equal to
                                    ``(I) the sum of--
                                            ``(aa) the number of 
                                        children with disabilities in 
                                        the State, aged 6 through 21, 
                                        who are receiving special 
                                        education and related services, 
                                        as determined under clause 
                                        (ii); and
                                            ``(bb) if the State is 
                                        eligible for a grant under 
                                        section 619, the number of such 
                                        children in the State, aged 3 
                                        through 5; multiplied by
                                    ``(II) 40 percent of the average 
                                per-pupil expenditure in public 
                                elementary and secondary schools in the 
                                United States.
                            ``(ii) Determination of number of 
                        children.--The number of children with 
                        disabilities receiving special education and 
                        related services in any fiscal year shall be 
                        equal to the number of such children receiving 
                        special education and related services on 
                        December 1 of the fiscal year preceding the 
                        fiscal year for which the determination is 
                        made.
                            ``(iii) Average per pupil expenditure.--For 
                        purposes of clause (i)(II), the term `average 
                        per pupil expenditure', in the United States, 
                        means the aggregate current expenditures, 
                        during the second fiscal year preceding the 
                        fiscal year for which the computation is made 
                        (or, if satisfactory data for such year are not 
                        available at the time of computation, then 
                        during the most recent preceding fiscal year 
for which satisfactory data are available) of all local educational 
agencies in the United States (which, for purposes of this 
subparagraph, means the fifty States and the District of Columbia), as 
the case may be, plus any direct expenditures by the State for 
operation of such agencies (without regard to the source of funds from 
which either of such expenditures are made), divided by the aggregate 
number of children in average daily attendance to whom such agencies 
provided free public education during such preceding year.
            ``(4) Special rule with respect to puerto rico.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection, the amount allotted to 
                Puerto Rico for a fiscal year shall bear the same or 
                lower proportion to the remaining amount (described in 
                paragraph (3)(A)) as the amount received by Puerto Rico 
                under this section for fiscal year 1996 bears to the 
                aggregate of the amounts received by the remaining 
                States (as described in paragraph (3)(A)) under this 
                section for fiscal year 1996.
                    ``(B) Adjustment in amounts to remaining states.--
                If the amount allotted to Puerto Rico for a fiscal year 
                is determined under subparagraph (A), the Secretary 
                shall reallot to the remaining States (as described in 
                paragraph (3)(A)), on a proportional basis, any amount 
                not otherwise allotted to Puerto Rico.
            ``(5) Use of most recent population data.--For the purpose 
        of providing grants under this part, the Secretary shall use 
        the most recent population data and data on children aged 3 to 
        21, inclusive, living in poverty that are available and 
        satisfactory to the Secretary.
    ``(c) Use of Funds by State.--
            ``(1) Reservation for state activities.--
                    ``(A) In general.--Subject to subparagraph (D), a 
                State may reserve not more than 25 percent of the 
                amount allotted to the State under paragraph (1) or (3) 
                of subsection (b) for a fiscal year for administration 
                and other State-level activities in accordance with 
                subparagraphs (B) and (C).
                    ``(B) State administration.--
                            ``(i) In general.--For the purpose of 
                        administering programs under this part, 
                        including the coordination of activities under 
                        this part with, and providing technical 
                        assistance to, other programs that provide 
                        services to children with disabilities--
                                    ``(I) each territory may use up to 
                                3 percent of the amount allotted to the 
                                territory for a fiscal year, or 
                                $35,000, whichever is greater; and
                                    ``(II) each remaining State may use 
                                up to 3 percent of the amount allotted 
                                to the State for a fiscal year, or 
                                $450,000, whichever is greater.
                            ``(ii) Use of amounts for administration of 
                        part c.--If the State educational agency is the 
                        lead agency for the State under part C, amounts 
                        described in clause (i) may also be used for 
                        the administration of part C.
                    ``(C) Other state-level activities.--A State shall 
                use any amounts reserved under subparagraph (A) for a 
                fiscal year that are not used for administration under 
                subparagraph (B) for such fiscal year--
                            ``(i) for support and direct services, 
                        including technical assistance and personnel 
                        development and training;
                            ``(ii) for administrative costs of 
                        monitoring and complaint investigation, but 
                        only to the extent that such costs exceed the 
                        costs incurred for those activities during 
                        fiscal year 1985;
                            ``(iii) to establish and implement the 
                        mediation process required by section 615(d), 
                        including providing for the costs of mediators 
                        and support personnel;
                            ``(iv) to assist local educational agencies 
                        in meeting personnel shortages;
                            ``(v) to develop a State improvement plan 
                        under part D;
                            ``(vi) for activities at the State and 
                        local levels to meet the performance goals 
                        established by the State under section 
                        612(a)(14) and to support implementation of the 
                        State improvement plan under part D if the 
                        State receives funds under that part; or
                            ``(vii) to supplement other amounts used to 
                        develop and implement a Statewide coordinated 
                        services system designed to improve results for 
                        children and families, including children with 
                        disabilities and their families, but not to 
                        exceed one percent of the amount received by 
                        the State under this section (such system shall 
                        be coordinated with and, to the extent 
                        appropriate, build on the system of coordinated 
                        services developed by the State under part C).
                    ``(D) Report on use of amounts.--The State shall, 
                as part of the information required to be submitted 
                under section 612, submit a description of--
                            ``(i) how amounts reserved under 
                        subparagraph (A) will be used to meet the 
                        requirements of this part;
                            ``(ii) how such amounts will be allocated 
                        among the activities described in subparagraphs 
                        (B) and (C) to meet State priorities based on 
                        input from local educational agencies; and
                            ``(iii) what percentage of such amounts, if 
                        any, will be distributed to local educational 
                        agencies by formula.
            ``(2) Subgrants to local educational agencies and certain 
        state agencies.--
                    ``(A) In general.--The State shall provide at least 
                75 percent of the amount received under a grant for a 
                fiscal year to local educational agencies in the State 
                that have established their eligibility under section 
                613, and to State agencies that received funds under 
                section 614A(a) (as such section was in effect on the 
                day before the date of the enactment of the IDEA 
                Improvement Act of 1996) for fiscal year 1996 and have 
                established their eligibility under section 613, for 
                use in accordance with this part.
                    ``(B) Methods of distribution.--A State may provide 
                amounts under subparagraph (A) to local educational 
                agencies and State agencies described under such 
                subparagraph on the basis of--
                            ``(i) school-age population;
                            ``(ii) school enrollment;
                            ``(iii) numbers of children with 
                        disabilities receiving a free appropriate 
                        public education;
                            ``(iv) allocations for previous fiscal 
                        years;
                            ``(v) any two or more of the factors 
                        described in clauses (i) through (iv); or
                            ``(vi) poverty, in combination with one or 
                        more of the factors described in clauses (i) 
                        through (iv).
                    ``(C) Former chapter 1 state agencies.--
                            ``(i) In general.--To the extent necessary 
                        for each of the fiscal years 1997, 1998, and 
                        1999, the State shall use amounts that are 
                        available under paragraph (1)(A) to ensure that 
                        each State agency that received amounts in 
                        fiscal year 1994 under subpart 2 of part D of 
                        chapter 1 of title I of the Elementary and 
                        Secondary Education Act of 1965 (as such 
                        subpart was in effect on the day before the 
                        date of the enactment of the Improving 
                        America's Schools Act of 1994) receives, from 
                        the combination of funds under paragraph (1)(A) 
                        and funds provided under subparagraph (A), an 
                        amount equal to--
                                    ``(I) the number of children with 
                                disabilities, aged 6 to 21, inclusive, 
                                to whom the agency was providing 
                                special education and related services 
                                on December 1 of the fiscal year for 
                                which the funds were appropriated, 
                                subject to the methods of distribution 
                                under subparagraph (B); multiplied by
                                    ``(II) the per-child amount 
                                provided under such subpart for fiscal 
                                year 1994.
                            ``(ii) Additional use of amounts.--The 
                        State may use amounts described in clause (i) 
                        to ensure that each local educational agency 
                        that received fiscal year 1994 funds under that 
                        subpart for children who had transferred from a 
                        State-operated or State-supported school or 
                        program assisted under that subpart receives, 
                        from the combination of funds available under 
                        paragraph (1)(A) and funds provided under 
                        subparagraph (A), an amount for each such 
                        child, aged 3 to 21, inclusive, to whom the 
                        agency was providing special education and 
                        related services on December 1 of the fiscal 
                        year for which the funds were appropriated, 
                        equal to the per-child amount the agency 
                        received under that subpart for fiscal year 
                        1994.
                            ``(iii) Determination of number of 
                        children.--The number of children counted under 
                        clause (i)(I) shall not exceed the number of 
                        children aged 3 to 21, inclusive, for whom the 
                        agency received amounts in fiscal year 1994 
                        under subpart 2 of part D of chapter 1 of title 
                        I of the Elementary and Secondary Education Act 
                        of 1965 (as such subpart was in effect on the 
                        day before the date of the enactment of the 
                        Improving America's Schools Act of 1994).
                    ``(D) Reallocation of amounts.--If a State 
                educational agency determines that a local educational 
                agency is adequately providing a free appropriate 
                public education to all children with disabilities 
                residing in the area served by that agency with State 
                and local funds, the State educational agency may 
                reallocate any portion of amounts received under a 
                grant under this part that are not needed by that local 
                agency to other local educational agencies in the State 
                that are not adequately providing special education and 
related services to all children with disabilities residing in the 
areas they serve.
    ``(d) Use of Amounts by Secretary of the Interior.--
            ``(1) Provision of amounts for assistance.--
                    ``(A) In general.--The Secretary of Education shall 
                provide amounts to the Secretary of the Interior to 
                meet the need for assistance for the education of 
                children with disabilities on reservations aged 5 to 
                21, inclusive, enrolled in elementary and secondary 
                schools for Indian children operated or funded by the 
                Secretary of the Interior. The amount of such payment 
                for any fiscal year shall be equal to 80 percent of the 
                amount allotted under subsection (b)(2) for that fiscal 
                year.
                    ``(B) Calculation of number of children.--In the 
                case of Indian students ages 3 to 5, inclusive, who are 
                enrolled in programs affiliated with Bureau of Indian 
                Affairs (hereafter in this subsection referred to as 
                `BIA') schools and that are required by the States in 
                which such schools are located to attain or maintain 
                State accreditation, and which schools have such 
                accreditation prior to the date of enactment of the 
                Individuals with Disabilities Education Act Amendments 
                of 1991, the school shall be allowed to count those 
                children for the purpose of distribution of the funds 
                provided under this paragraph to the Secretary of the 
                Interior. The Secretary of the Interior shall be 
                responsible for meeting all of the requirements of this 
                part for these children, in accordance with paragraph 
                (2).
                    ``(C) Additional requirement.--With respect to all 
                other children aged 3 to 21, inclusive, on 
                reservations, the State educational agency shall be 
                responsible for ensuring that all of the requirements 
                of this part are implemented.
            ``(2) Submission of information.--The Secretary of 
        Education may provide the Secretary of the Interior amounts 
        under paragraph (1) for a fiscal year only if the Secretary of 
        the Interior submits to the Secretary of Education information 
        that--
                    ``(A) demonstrates that the Department of the 
                Interior meets the appropriate requirements, as 
                determined by the Secretary of Education, of sections 
                612 (including monitoring and evaluation activities) 
                and 613;
                    ``(B) includes a description of how the Secretary 
                of the Interior will coordinate the provision of 
                services under this part with local educational 
                agencies, tribes and tribal organizations, and other 
                private and Federal service providers;
                    ``(C) includes an assurance that there are public 
                hearings, adequate notice of such hearings, and an 
                opportunity for comment afforded to members of tribes, 
                tribal governing bodies, and affected local school 
                boards before the adoption of the policies, programs, 
                and procedures described in subparagraph (A);
                    ``(D) includes an assurance that the Secretary of 
                the Interior will provide such information as the 
                Secretary of Education may require to comply with 
                section 618;
                    ``(E) includes an assurance that the Secretary of 
                the Interior and the Secretary of Health and Human 
                Services have entered into a memorandum of agreement, 
                to be provided to the Secretary of Education, for the 
                coordination of services, resources, and personnel 
                between their respective Federal, State, and local 
                offices and with State and local educational agencies 
                and other entities to facilitate the provision of 
services to Indian children with disabilities residing on or near 
reservations (such agreement shall provide for the apportionment of 
responsibilities and costs including, but not limited to, child find, 
evaluation, diagnosis, remediation or therapeutic measures, and (where 
appropriate) equipment and medical or personal supplies as needed for a 
child to remain in school or a program); and
                    ``(F) includes an assurance that the Department of 
                the Interior will cooperate with the Department of 
                Education in its exercise of monitoring and oversight 
                of this application, and any agreements entered into 
                between the Secretary of the Interior and other 
                entities under this part, and will fulfill its duties 
                under this part.
        Section 616(a) shall apply to the information described in this 
        paragraph.
            ``(3) Payments for education and services for indian 
        children with disabilities aged 3 to 5.--
                    ``(A) In general.--With funds appropriated under 
                subsection (e), the Secretary of Education shall make 
                payments to the Secretary of the Interior to be 
                distributed to tribes or tribal organizations (as 
                defined under section 4 of the Indian Self-
                Determination and Education Assistance Act) or 
                consortia of the above to provide for the coordination 
                of assistance for special education and related 
                services for children with disabilities aged 3 to 5, 
                inclusive, on reservations served by elementary and 
                secondary schools for Indian children operated or 
                funded by the Department of the Interior. The amount of 
                such payments under subparagraph (B) for any fiscal 
                year shall be equal to 20 percent of the amount 
                allotted under subsection (b)(2).
                    ``(B) Distribution of funds.--The Secretary of the 
                Interior shall distribute the total amount of the 
                payment under subparagraph (A) by allocating to each 
                tribe or tribal organization an amount based on the 
                number of children with disabilities, ages 3 to 5, 
                inclusive, residing on reservations as reported 
                annually divided by the total of such children served 
                by all tribes or tribal organizations.
                    ``(C) Submission of information.--To receive a 
                payment under this paragraph, the tribe or tribal 
                organization shall submit such figures to the Secretary 
                of the Interior as required to determine the amounts to 
                be allocated under subparagraph (B). This information 
                shall be compiled and submitted to the Secretary of 
                Education.
                    ``(D) Use of funds.--The funds received by a tribe 
                or tribal organization shall be used to assist in child 
                find, screening, and other procedures for the early 
                identification of children aged 3 to 5, inclusive, 
                parent training, and the provision of direct services. 
                These activities may be carried out directly or through 
                contracts or cooperative agreements with the BIA, local 
                educational agencies, and other public or private 
                nonprofit organizations. The tribe or tribal 
                organization is encouraged to involve Indian parents in 
                the development and implementation of these activities. 
                The above entities shall, as appropriate, make 
                referrals to local, State, or Federal entities for the 
                provision of services or further diagnosis.
                    ``(E) Biennial report.--To be eligible to receive a 
                grant pursuant to subparagraph (A), the tribe or tribal 
                organization shall provide to the Secretary of the 
                Interior a biennial report of activities undertaken 
under this paragraph, including the number of contracts and cooperative 
agreements entered into, the number of children contacted and receiving 
services for each year and the estimated number of children needing 
services during the 2 years following the one in which the report is 
made. The Secretary of the Interior shall include a summary of this 
information on a biennial basis in the report to the Secretary of 
Education required under this subsection. The Secretary of Education 
may require any additional information from the Secretary of the 
Interior.
                    ``(F) Prohibitions.--None of the funds allocated 
                under this paragraph may be used by the Secretary of 
                the Interior for administrative purposes, including 
                child count and the provision of technical assistance.
            ``(4) Plan for coordination of services.--The Secretary of 
        the Interior shall develop and implement a plan for the 
        coordination of services for all Indian children with 
        disabilities residing on reservations covered under this Act. 
        Such plan shall provide for the coordination of services 
        benefiting these children from whatever source, including 
        tribes, the Indian Health Service, other BIA divisions, and 
        other Federal agencies. In developing such a plan, the 
        Secretary of the Interior shall consult with all interested and 
        involved parties. It shall be based upon the needs of the 
        children and the system best suited for meeting those needs, 
        and may involve the establishment of cooperative agreements 
        between the BIA, other Federal agencies, and other entities. 
        Such plan shall also be distributed upon request to States, 
        State and local educational agencies, and other agencies 
        providing services to infants, toddlers, children, and youth 
        with disabilities, to tribes, and to other interested parties.
            ``(5) Establishment of advisory board.--To meet the 
        requirements of section 612(a)(18), the Secretary of the 
        Interior shall establish, not later than 6 months after the 
        date of the enactment of the IDEA Improvement Act of 1996, 
        under the Bureau of Indian Affairs (BIA), an advisory board 
        composed of individuals involved in or concerned with the 
        education and provision of services to Indian infants, 
        toddlers, children, and youth with disabilities, including 
        Indians with disabilities, Indian parents or guardians of such 
        children, teachers, service providers, State and local 
        educational officials, representatives of tribes or tribal 
        organizations, representatives from State Interagency 
        Coordinating Councils in States having reservations, and other 
        members representing the various divisions and entities of the 
        BIA. The chairperson shall be selected by the Secretary of the 
        Interior. The advisory board shall--
                    ``(A) assist in the coordination of services within 
                BIA and with other local, State, and Federal agencies 
                in the provision of education for infants, toddlers, 
                children, and youth with disabilities;
                    ``(B) advise and assist the Secretary of the 
                Interior in the performance of the Secretary's 
                responsibilities described in this subsection;
                    ``(C) develop and recommend policies concerning 
                effective inter- and intra-agency collaboration, 
                including modifications to regulations, and the 
                elimination of barriers to inter- and intra-agency 
                programs and activities;
                    ``(D) provide assistance and disseminate 
                information on best practices, effective program 
                coordination strategies, and recommendations for 
                improved educational programming for Indian infants, 
                toddlers, children, and youth with disabilities; and
                    ``(E) provide assistance in the preparation of 
                information required under paragraph (2)(D).
            ``(6) Annual reports.--
                    ``(A) In general.--The advisory board established 
                under paragraph (5) shall prepare and submit to the 
                Secretary of the Interior and to the Congress an annual 
                report containing a description of the activities of 
                the advisory board for the preceding year.
                    ``(B) Availability.--The Secretary of the Interior 
                shall make available to the Secretary of Education the 
                report described in subparagraph (A).
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this part (except for section 619; relating to preschool grants), 
there are authorized to be appropriated to the Secretary such sums as 
may be necessary.

``SEC. 612. STATE REQUIREMENTS.

    ``(a) In General.--A State shall be eligible to receive a grant 
under this part for a fiscal year if, except as provided in subsection 
(c), the State submits to the Secretary information that demonstrates 
to the satisfaction of the Secretary that the State has in effect 
policies and procedures to ensure that it meets each of the following 
requirements:
            ``(1) Free appropriate public education.--
                    ``(A) In general.--A free appropriate public 
                education is available to all children with 
                disabilities residing in the State between the ages of 
                3 and 21, inclusive.
                    ``(B) Limitation.--Subparagraph (A) shall not apply 
                with respect to children with disabilities aged 3 to 5 
                and children with disabilities aged 18 to 21 to the 
                extent that such application to those children would be 
                inconsistent with State law or practice, or the order 
                of any court, relating to the provision of public 
                education to children in such age ranges.
            ``(2) Child find.--All children with disabilities residing 
        in the State, including children with disabilities attending 
        private schools, regardless of the severity of such 
        disabilities, and who are in need of special education and 
        related services, are identified, located, and evaluated and 
        that a practical method is developed and implemented to 
        determine which children with disabilities are currently 
        receiving needed special education and related services.
            ``(3) Individualized education program.--An individualized 
        education program, or an individualized family service plan 
        that meets the requirements of section 636(d), is developed, 
        reviewed, and revised for each child with a disability in 
        accordance with section 614(d).
            ``(4) Least restrictive environment.--
                    ``(A) In general.--To the maximum extent 
                appropriate--
                            ``(i) children with disabilities, including 
                        children in public or private institutions or 
                        other care facilities, are educated with 
                        children who are not disabled; and
                            ``(ii) special classes, separate schooling, 
                        or other removal of children with disabilities 
                        from the regular educational environment occurs 
                        only when the nature or severity of the 
                        disability of a child means that education in 
                        regular classes with the use of supplementary 
                        aids and services cannot be achieved 
                        satisfactorily.
                    ``(B) Additional requirement.--
                            ``(i) In general.--The State's method of 
                        distributing funds shall not result in 
                        placements that violate the requirements of 
                        subparagraph (A).
                            ``(ii) Exception.--If the State does not 
                        have policies and procedures to ensure 
                        compliance with clause (i), the State shall 
                        provide the Secretary an assurance that it will 
                        revise the funding mechanism as soon as 
                        feasible to ensure that such mechanism does not 
                        result in such placements.
            ``(5) Procedural safeguards.--
                    ``(A) In general.--Children with disabilities and 
                their parents are afforded the procedural safeguards 
                required by section 615.
                    ``(B) Additional procedural safeguards.--Procedures 
                to assure that testing and evaluation materials and 
                procedures utilized for the purposes of evaluation and 
                placement of children with disabilities will be 
                selected and administered so as not to be racially or 
                culturally discriminatory. Such materials or procedures 
                shall be provided and administered in the child's 
                native language or mode of communication, unless it 
                clearly is not feasible to do so, and no single 
                procedure shall be the sole criterion for determining 
                an appropriate educational program for a child.
            ``(6) Evaluation.--Children with disabilities are evaluated 
        in accordance with subsections (a) through (c) of section 614.
            ``(7) Confidentiality.--Agencies in the State comply with 
        section 617(c) (relating to the confidentiality of records and 
        information).
            ``(8) Transition from part c to preschool programs.--
        Children participating in early-intervention programs assisted 
        under part C, and who will participate in preschool programs 
        assisted under this part, experience a smooth transition to 
        those preschool programs in a manner consistent with section 
        637(a)(7). By the third birthday of such a child, an 
        individualized education program or, if consistent with 
        sections 614(d)(1)(B) and 636(d), an individualized family 
        service plan, has been developed and is being implemented for 
        the child. The local educational agency will participate in 
        transition planning conferences by the designated lead agency 
        under section 637(a)(7).
            ``(9) Children in private schools.--
                    ``(A) In general.--To the extent consistent with 
                the number and location of children with disabilities 
                in the State who are enrolled in private elementary and 
                secondary schools, provision is made for the 
                participation of such children in the program assisted 
                or carried out under this part by providing for such 
                children special education and related services, except 
                if the Secretary has arranged for services to such 
                children under subsection (f).
                    ``(B) Children placed in, or referred to, private 
                schools by public agencies.--
                            ``(i) In general.--Children with 
                        disabilities in private schools and facilities 
                        are provided special education and related 
                        services, in accordance with an individualized 
                        education program, at no cost to their parents, 
                        if they are placed in, or referred to, such 
                        schools or facilities by the State or a local 
                        educational agency in order to comply with this 
                        part or with any other provision of law 
                        requiring the provision of special education 
                        and related services to all children with 
                        disabilities in the State.
                            ``(ii) Additional requirements.--In all 
                        cases described in clause (i)--
                                    ``(I) children with disabilities 
                                are placed in, or referred to, only 
                                those private schools and facilities 
                                that the State educational agency 
                                determines meet standards that apply to 
                                State and local educational agencies; 
                                and
                                    ``(II) children served in such 
                                private schools or facilities retain 
                                access to a free appropriate public 
                                education in accordance with this part.
                    ``(C) Payment for education of children placed in 
                private schools without consent of or referral by the 
                public agency.--
                            ``(i) In general.--If the parents of a 
                        child with a disability that had previously 
                        received special education and related services 
                        under the authority of a public agency have 
                        enrolled their child in a private elementary or 
                        secondary school without the consent of or 
                        referral by the public agency, as a result of 
                        mediation described in section 615(d), or as a 
                        result of a decision rendered under the 
                        procedural safeguards of section 615, the 
                        public agency may be required to reimburse the 
                        parents for the cost of the enrollment, except 
                        that the cost of the reimbursement may be 
                        reduced or denied--
                                    ``(I) if, at least 10 school days 
                                prior to the removal of the child from 
                                the public school, the parents did not 
                                give a written statement of their 
                                concerns to the public agency and 
                                notice that they intend to place their 
                                child in a private school at public 
                                expense;
                                    ``(II) if, prior to the removal of 
                                the child from the public school, the 
                                parents did not make the child 
                                available for an initial assessment and 
                                evaluation by the local educational 
                                agency prior to enrollment in the 
                                private school; or
                                    ``(III) at the discretion of the 
                                judge.
                            ``(ii) Exception.--Notwithstanding the 
                        notice requirement in clause (i)(I), the cost 
                        of the reimbursement may not be reduced or 
                        denied for failure to provide such notice if--
                                    ``(I) the parent is illiterate or 
                                cannot write in English;
                                    ``(II) compliance with clause 
                                (i)(I) would likely result in physical 
                                or serious emotional harm to the child;
                                    ``(III) the school prevented the 
                                parent from providing such notice; or
                                    ``(IV) the parent had not received 
                                notice, pursuant to section 615(d), of 
                                the notice requirement in clause 
                                (i)(I).
            ``(10) State educational agency responsible for general 
        supervision.--
                    ``(A) In general.--The State educational agency is 
                responsible for ensuring that--
                            ``(i) the requirements of this part are 
                        met; and
                            ``(ii) all educational programs for 
                        children with disabilities in the State, 
                        including all such programs administered by any 
                        other State or local agency--
                                    ``(I) are under the general 
                                supervision of individuals in the State 
                                who are responsible for educational 
                                programs for children with 
                                disabilities; and
                                    ``(II) meet the educational 
                                standards of the State educational 
                                agency.
                    ``(B) Limitation.--Subparagraph (A) shall not limit 
                the responsibility of agencies in the State other than 
                the State educational agency to provide, or pay for 
                some or all of the costs of, a free appropriate public 
                education for any child with a disability in the State.
            ``(11) Obligations related to and methods of ensuring 
        services.--
                    ``(A) Establishing responsibility for services.--
                The Chief Executive Officer or designee of the officer 
                shall ensure that an interagency agreement or other 
                mechanism for interagency coordination is in effect 
                between each public agency described in subparagraph 
                (B) and the appropriate educational agency within the 
                State, in order to ensure that all services described 
                in subparagraph (B)(i) that are needed to ensure a free 
                appropriate public education are provided, including 
                the provision of such services during the pendency of 
                any dispute under clause (iii). Such agreement or 
                mechanism shall include the following:
                            ``(i) Agency financial responsibility.--An 
                        identification of, or a method for defining, 
                        the financial responsibility of each agency for 
                        providing services described in subparagraph 
                        (B)(i) to ensure a free appropriate public 
                        education to children with disabilities 
                        provided that the financial responsibility of 
                        each public agency described in subparagraph 
                        (B), including the State Medicaid agency and 
                        other public insurers of children with 
                        disabilities, shall precede the financial 
                        responsibility of the local education agency 
                        (or the State agency responsible for developing 
                        the child's IEP).
                            ``(ii) Conditions and terms of 
                        reimbursement.--The conditions, terms, and 
                        procedures under which a local educational 
                        agency shall be reimbursed by other agencies.
                            ``(iii) Interagency disputes.--Procedures 
                        for resolving interagency disputes (including 
                        procedures under which local education agencies 
                        may initiate proceedings) under the agreement 
                        or other mechanism to secure reimbursement from 
                        other agencies or otherwise implement the 
                        provisions of the agreement or mechanism.
                            ``(iv) Coordination of services 
                        procedures.--Policies and procedures for 
                        agencies to determine and identify the 
                        interagency coordination responsibilities of 
                        each agency to promote the coordination and 
                        timely and appropriate delivery of services 
                        described in subparagraph (B)(i).
                    ``(B) Obligation of public agency.--
                            ``(i) In general.--If any public agency 
                        other than an educational agency is otherwise 
                        obligated under Federal or State law, or 
                        assigned responsibility under State policy or 
                        pursuant to subparagraph (A), to provide or pay 
                        for any services that are considered special 
                        education or related services (such as, but not 
                        limited to, services described in sections 
                        602(1) relating to assistive technology 
                        devices, 602(2) relating to assistive 
                        technology services, 602(20) relating to 
                        related services, 602(27) related to 
                        supplementary aids and services, and 602(29) 
                        relating to transition services) that are 
                        necessary for ensuring a free appropriate 
                        public education to children with disabilities 
                        within the State, such public agency shall 
                        fulfill that obligation or responsibility, 
                        either directly or through contract or other 
                        arrangement.
                            ``(ii) Reimbursement for services by public 
                        agency.--If a public agency other than an 
                        educational agency fails to provide or pay for 
                        the special education and related services 
                        described in clause (i), the local educational 
                        agency (or State agency responsibility for 
                        developing the child's IEP) shall provide or 
                        pay for such services to the child. Such local 
                        education agency or State agency may then claim 
                        reimbursement for the services from the public 
                        agency that failed to provide or pay for such 
                        services and such public agency shall reimburse 
                        the local education agency or State agency 
                        pursuant to the terms of the interagency 
                        agreement described in subparagraph (A)(i) 
                        according to the procedures established in such 
                        agreement pursuant to subparagraph (A)(ii).
                    ``(C) Special rule.--The requirements of 
                subparagraph (A) may be met through--
                            ``(i) State statute or regulation;
                            ``(ii) signed agreements between respective 
                        agency officials that clearly identify the 
                        responsibilities of each agency relating to the 
                        provision of services; or
                            ``(iii) other appropriate methods as 
                        determined by the Chief Executive Officer or 
                        designee of the officer.
            ``(12) Procedural requirements relating to local 
        educational agency eligibility.--The State educational agency 
        will not make a final determination that a local educational 
        agency is not eligible for assistance under this part without 
        first affording that agency reasonable notice and an 
        opportunity for a hearing.
            ``(13) Comprehensive system of personnel development.--The 
        State has established and implemented, consistent with the 
        purposes of this title and section 635(a)(7), a comprehensive 
        system of personnel development that is designed to ensure an 
        adequate supply of qualified special education and related 
        services personnel necessary to carry out this part, 
        including--
                    ``(A) a statewide, coordinated personnel-
                development plan that meets the personnel development 
                requirements of a State improvement plan under section 
                683; or
                    ``(B) a personnel-development plan, developed in 
                consultation with parents of children with 
                disabilities, State and local educational agencies, 
                institutions of higher education, and professional 
                associations that--
                            ``(i) addresses current and projected needs 
                        for special education and related services 
                        personnel throughout the State;
                            ``(ii) addresses the need for the pre-
                        service and in-service preparation of personnel 
                        throughout the State, including regular 
                        education personnel, to provide educational 
                        services to children with disabilities;
                            ``(iii) includes a system or procedures for 
                        recruiting, preparing, and retaining qualified 
                        personnel, including personnel with 
                        disabilities and personnel from groups that are 
                        underrepresented in the field of special 
                        education and related services; and
                            ``(iv) is integrated, to the maximum extent 
                        possible, with other professional development 
                        plans and activities.
            ``(14) Personnel standards.--
                    ``(A) In general.--The State educational agency has 
                established and maintains standards to ensure that 
                personnel necessary to carry out this part are 
                appropriately and adequately prepared and trained.
                    ``(B) Standards described.--Such standards shall--
                            ``(i) be consistent with any State-approved 
                        or State-recognized certification, licensing, 
                        registration, or other comparable requirements 
                        that apply to the professional discipline in 
                        which those personnel are providing special 
                        education or related services;
                            ``(ii) to the extent the standards 
                        described in subparagraph (A) are not based on 
                        the highest requirements in the State 
                        applicable to a specific profession or 
                        discipline, the State is taking steps to 
                        require retraining or hiring of personnel that 
                        meet appropriate professional requirements in 
                        the State; and
                            ``(iii) allow paraprofessionals and 
                        assistants who are appropriately trained and 
                        supervised, in accordance with State law, 
                        regulations, or written policy, in meeting the 
                        requirements of this part to be used to assist 
                        in the provision of special education and 
                        related services to children with disabilities 
                        under this part.
                    ``(C) Exception.--If the State determines that, 
                within a geographic area of the State there is a 
                shortage of an appropriate number and type of personnel 
                to provide the special education and related services 
                to children with disabilities within such area, and the 
                appropriate public agency has taken steps to recruit 
                and hire such personnel, the State may, subject to 
                public comment and review, temporarily suspend the 
                standards of subparagraph (B)--
                            ``(i) consistent with State law, for the 
                        purpose of recruiting and hiring for such 
                        shortage areas the most qualified available 
                        individuals who are making progress in 
                        applicable coursework; and
                            ``(ii) for a period not to exceed 3 years.
            ``(15) Performance goals and indicators.--The State--
                    ``(A) has established goals for the performance of 
                children with disabilities in the State that--
                            ``(i) will promote the purposes of this 
                        title, as stated in section 601(d); and
                            ``(ii) are consistent, to the maximum 
                        extent appropriate, with other goals and 
                        standards established by the State;
                    ``(B) has established performance indicators the 
                State will use to assess progress toward achieving 
                those goals that, at a minimum, address the performance 
                of children with disabilities on assessments, drop-out 
                rates, and graduation rates;
                    ``(C) will, every two years, report to the 
                Secretary and the public on the progress of the State, 
                and of children with disabilities in the State, toward 
                meeting the goals established under subparagraph (A); 
                and
                    ``(D) based on its assessment of that progress, 
                will revise its State improvement plan under part D as 
                may be needed to improve its performance, if the State 
                receives assistance under such part.
            ``(16) Participation in assessments.--
                    ``(A) In general.--Children with disabilities are 
                included in general State and district-wide assessment 
                programs, with appropriate accommodations, where 
                necessary. As appropriate, the State or local 
                educational agency--
                            ``(i) develops guidelines for the 
                        participation of children with disabilities in 
                        alternate assessments for those children who 
                        cannot participate in State and district-wide 
                        assessment programs; and
                            ``(ii) develops and, beginning not later 
                        than July 1, 1999, conducts those alternate 
                        assessments.
                    ``(B) Reports.--The State educational agency makes 
                available to the public, and reports to the public with 
                the same frequency and in the same detail as it reports 
                on the assessment of nondisabled children, the 
                following:
                            ``(i) The number of children with 
                        disabilities participating in regular 
                        assessments.
                            ``(ii) The number of those children 
                        participating in alternate assessments.
                            ``(iii) The performance of those children 
                        on regular assessments (beginning not later 
                        than July 1, 1997) and on alternate assessments 
                        (not later than July 1, 1999), if doing so 
                        would be statistically sound and would not 
                        result in the disclosure of performance results 
                        identifiable to individual children.
            ``(17) Supplementation of state, local, and other federal 
        funds.--
                    ``(A) In general.--The State ensures that amounts 
                provided under a grant to the State under this part, 
                except as provided in subparagraph (B), will be used to 
                supplement State, local, and other Federal funds 
                (including funds not under the direct control of State 
                or local educational agencies) expended for special 
                education and related services, and not to supplant 
                those funds.
                    ``(B) Waiver.--The Secretary may waive, in whole or 
                in part, the requirements of subparagraph (A) if the 
                Secretary determines that the State has provided clear 
                evidence that all children with disabilities in the 
                State have available a free appropriate public 
                education or that, such a waiver would allow the State 
                to improve the delivery of special education and 
                related services to children with disabilities in the 
                State.
            ``(18) Public participation.--Prior to the adoption of any 
        policies and procedures needed to comply with this section 
        (including any amendments to such policies and procedures), the 
        State ensures that there are public hearings, adequate notice 
        of the hearings, and an opportunity for comment available to 
        the general public, including individuals with disabilities and 
        parents of children with disabilities.
            ``(19) State advisory panel.--
                    ``(A) In general.--The State has established and 
                maintains an advisory panel for the purpose of 
                providing policy guidance with respect to special 
                education and related services for children with 
                disabilities in the State.
                    ``(B) Membership.--Such advisory panel shall 
                consist of members appointed by the Governor, or any 
                other official authorized under State law to make such 
                appointments, that is representative of the State 
                population and that is composed of individuals involved 
                in, or concerned with, the education of children with 
                disabilities, including--
                            ``(i) parents of children with 
                        disabilities;
                            ``(ii) individuals with disabilities;
                            ``(iii) teachers;
                            ``(iv) representatives of institutions of 
                        higher education that prepare special education 
                        and related services personnel;
                            ``(v) State and local education officials;
                            ``(vi) administrators of programs for 
                        children with disabilities;
                            ``(vii) representatives of other State 
                        agencies involved in the financing or delivery 
                        of related services to children with 
                        disabilities;
                            ``(viii) at least one representative of a 
                        vocational, community, or business organization 
                        concerned with the provision of transition 
                        services to children with disabilities; and
                            ``(ix) representatives from the State 
                        juvenile and adult corrections agencies.
                    ``(C) Special rule.--A majority of the members of 
                the panel shall be individuals with disabilities or 
                parents of children with disabilities.
                    ``(D) Duties.--The advisory panel shall--
                            ``(i) advise the State educational agency 
                        of unmet needs within the State in the 
                        education of children with disabilities;
                            ``(ii) comment publicly on any rules or 
                        regulations proposed by the State regarding--
                                    ``(I) the education of children 
                                with disabilities; and
                                    ``(II) the procedures for 
                                distribution of amounts received by the 
                                State under a grant under this part;
                            ``(iii) advise the State educational agency 
                        in developing evaluations and reporting on data 
                        to the Secretary under section 618;
                            ``(iv) advise the State educational agency 
                        in developing corrective action plans to 
                        address findings identified in Federal 
                        monitoring reports under this part; and
                            ``(v) advise the State educational agency 
                        in developing and implementing policies 
                        relating to the coordination of services for 
                        children with disabilities.
    ``(b) State Educational Agency as Provider of Free Appropriate 
Public Education or Direct Services.--If the State educational agency 
provides free appropriate public education to children with 
disabilities, or provides direct services to such children, such 
agency--
            ``(1) shall comply with any additional requirements of 
        section 613(a), as if such agency were a local educational 
        agency; and
            ``(2) may use amounts that are otherwise available to such 
        agency under this part to serve those children without regard 
        to section 613(a)(2)(A)(i) (relating to excess costs).
    ``(c) Exception for Prior State Plans.--
            ``(1) In general.--If a State has on file with the 
        Secretary policies and procedures that demonstrate that such 
        State meets any requirement of subsection (a), including any 
        policies and procedures filed under this part as in effect 
        before the date of the enactment of the IDEA Improvement Act of 
        1996, the Secretary shall consider such State to have met such 
        requirement for purposes of receiving a grant under this part.
            ``(2) Modifications made by state.--Subject to paragraph 
        (3), an application submitted by a State in accordance with 
        this section shall remain in effect until the State submits to 
        the Secretary such modifications as the State deems necessary. 
        This section shall apply to a modification to an application to 
        the same extent and in the same manner as this section applies 
        to the original plan.
            ``(3) Modifications required by the secretary.--The 
        Secretary may require a State to amend its application at any 
        time as a result of the Secretary's compliance reviews under 
        parts B and C. The Secretary shall reduce or shall not provide 
        any further payments to the State educational agency until the 
        Secretary is satisfied that the State educational agency is 
        complying with that requirement.
    ``(d) Approval by the Secretary.--
            ``(1) In general.--If the Secretary determines that a State 
        is eligible to receive a grant under this part, the Secretary 
        shall notify the State of that determination.
            ``(2) Notice and hearing.--The Secretary shall not make a 
        final determination that a State is not eligible to receive a 
        grant under this part until after providing the State--
                    ``(A) with reasonable notice; and
                    ``(B) with an opportunity for a hearing.
    ``(e) Assistance Under Other Federal Programs.--Nothing in this 
title permits a State to reduce medical and other assistance available, 
or to alter eligibility, under titles V and XIX of the Social Security 
Act with respect to the provision of a free appropriate public 
education for children with disabilities within the State.
    ``(f) By-Pass for Children in Private Schools.--
            ``(1) In general.--If, on the date of enactment of the 
        Education of the Handicapped Act Amendments of 1983, a State 
        educational agency is prohibited by law from providing for the 
        participation in special programs of children with disabilities 
        enrolled in private elementary and secondary schools as 
        required by subsection (a)(9), the Secretary shall, 
        notwithstanding such provision of law, arrange for the 
        provision of services to such children through arrangements 
        which shall be subject to the requirements of such subsection.
            ``(2) Payments.--
                    ``(A) Determination of amounts.--If the Secretary 
                arranges for services pursuant to this subsection, the 
                Secretary, after consultation with the appropriate 
                public and private school officials, shall pay to the 
                provider of such services for a fiscal year an amount 
                per child that does not exceed the amount determined by 
                dividing--
                            ``(i) the total amount received by the 
                        State under this part for such fiscal year; by
                            ``(ii) the number of children with 
                        disabilities served in the prior year, as 
                        reported to the Secretary by the State under 
                        section 618.
                    ``(B) Withholding of certain amounts.--Pending 
                final resolution of any investigation or complaint that 
                could result in a determination under this subsection, 
                the Secretary may withhold from the allocation of the 
                affected State educational agency the amount the 
                Secretary estimates would be necessary to pay the cost 
                of services described in subparagraph (A).
                    ``(C) Period of payments.--The period under which 
                payments are made under subparagraph (A) shall continue 
                until the Secretary determines that there will no 
                longer be any failure or inability on the part of the 
                State educational agency to meet the requirements of 
                subsection (a)(9).
            ``(3) Notice and hearing.--
                    ``(A) In general.--The Secretary shall not take any 
                final action under this subsection until the State 
                educational agency affected by such action has had an 
                opportunity, for at least 45 days after receiving 
                written notice thereof, to submit written objections 
                and to appear before the Secretary or the Secretary's 
                designee to show cause why such action should not be 
                taken.
                    ``(B) Review of action.--If a State educational 
                agency is dissatisfied with the Secretary's final 
                action after a proceeding under subparagraph (A), such 
                agency may, not later than 60 days after notice of such 
                action, file with the United States court of appeals 
                for the circuit in which such State is located a 
                petition for review of that action. A copy of the 
                petition shall be forthwith transmitted by the clerk of 
                the court to the Secretary. The Secretary thereupon 
                shall file in the court the record of the proceedings 
                on which the Secretary based the Secretary's action, as 
                provided in section 2112 of title 28, United States 
                Code.
                    ``(C) Review of findings of fact.--The findings of 
                fact by the Secretary, if supported by substantial 
                evidence, shall be conclusive, but the court, for good 
                cause shown, may remand the case to the Secretary to 
                take further evidence, and the Secretary may thereupon 
                make new or modified findings of fact and may modify 
                the Secretary's previous action, and shall file in the 
                court the record of the further proceedings. Such new 
                or modified findings of fact shall likewise be 
                conclusive if supported by substantial evidence.
                    ``(D) Jurisdiction of court of appeals; review by 
                united states supreme court.--Upon the filing of a 
                petition under subparagraph (B), the United States 
                court of appeals shall have jurisdiction to affirm the 
                action of the Secretary or to set it aside, in whole or 
                in part. The judgment of the court shall be subject to 
                review by the Supreme Court of the United States upon 
                certiorari or certification as provided in section 1254 
                of title 28, United States Code.

``SEC. 613. LOCAL EDUCATIONAL AGENCY REQUIREMENTS.

    ``(a) In General.--A local educational agency shall be eligible for 
assistance under this part for any fiscal year if, except as provided 
in subsection (b), such agency submits to the State educational agency 
information that demonstrates to the satisfaction of the State 
educational agency the following:
            ``(1) Consistency with state policies.--The local 
        educational agency, in providing for the education of children 
        with disabilities within its jurisdiction, has in effect 
        policies, procedures, and programs that are consistent with the 
        State policies and procedures established under section 612.
            ``(2) Use of amounts.--
                    ``(A) In general.--Amounts provided to the local 
                educational agency under this part--
                            ``(i) shall be used only to pay the excess 
                        costs of providing special education and 
                        related services to children with disabilities;
                            ``(ii) shall be used to supplement State, 
                        local, and other Federal funds and not to 
                        supplant such funds;
                            ``(iii) except as provided in subparagraph 
                        (B), may not be used to reduce the level of 
                        expenditures for the education of children with 
                        disabilities made by the local educational 
                        agency from State or local funds below the 
                        level of those expenditures for the preceding 
                        fiscal year;
                            ``(iv) may be used, notwithstanding clause 
                        (i) or any other provision of this part, for 
                        the costs of special education and related 
                        services provided in a regular class or other 
                        education related setting to a child with a 
                        disability in accordance with the child's 
                        individualized education program, even if one 
                        or more nondisabled children benefit from those 
                        services; and
                            ``(v) may be used, in accordance with 
                        subsection (f) and notwithstanding clause (i) 
                        or any other provision of this part, to develop 
                        and implement a coordinated services system.
                    ``(B) Exception.--Notwithstanding the restriction 
                in subparagraph (A)(iii), a local education agency may 
                reduce the level of expenditures where such reduction 
                is attributable to--
                            ``(i) the departure, by retirement or 
                        otherwise, of special education personnel;
                            ``(ii) a decrease in the enrollment of 
                        children with disabilities;
                            ``(iii) the termination of the obligation 
                        of the agency, consistent with this part, to 
                        provide a program of special education to a 
                        particular child with a disability that is an 
                        exceptionally costly program, as determined by 
                        the State educational agency, because the 
                        child--
                                    ``(I) has left the jurisdiction of 
                                the agency;
                                    ``(II) has reached the age at which 
                                the obligation of the agency to provide 
                                a free appropriate public education to 
                                the child has terminated; or
                                    ``(III) no longer needs such 
                                program of special education; or
                            ``(iv) the termination of costly 
                        expenditures for long-term purchases, such as 
                        the acquisition of equipment or the 
                        construction of school facilities.
            ``(3) Information for state educational agency.--The local 
        educational agency shall provide the State educational agency 
        with information necessary to enable the State educational 
        agency to carry out its duties under this part, including, with 
        respect to paragraphs (14) and (15) of section 612(a), 
        information relating to the performance of children with 
        disabilities participating in programs carried out under this 
        part.
            ``(4) Public information.--The local educational agency 
        shall make available to parents of children with disabilities 
        and to the general public all documents relating to the 
        eligibility of such agency under this part.
    ``(b) Exception for Prior Local Plans.--
            ``(1) In general.--If a local educational agency or State 
        agency has on file with the State educational agency policies 
and procedures that demonstrate that such local educational agency, or 
such State agency, as the case may be, meets any requirement of 
subsection (a), including any policies and procedures filed under this 
part as in effect before the date of the enactment of IDEA Improvement 
Act of 1996, the State educational agency shall consider such local 
educational agency or State agency, as the case may be, to have met 
such requirement for purposes of receiving assistance under this part.
            ``(2) Modification made by local educational agency.--
        Subject to paragraph (3), an application submitted by a local 
        educational agency in accordance with this section shall remain 
        in effect until the such agency submits to the State 
        educational agency such modifications as the local educational 
        agency deems necessary.
            ``(3) Modifications required by state educational agency.--
        The State educational agency may require a local educational 
        agency to amend its application at anytime as a result of the 
        compliance reviews of the State educational agency under parts 
        B and C. This paragraph shall apply to a modification to an 
        application to the same extent and in the same manner as this 
        section applies to the original plan.
    ``(c) Notification of Local Educational Agency or State Agency in 
Case of Ineligibility.--If the State educational agency determines that 
a local educational agency or State agency is not eligible under this 
section, the State educational agency shall notify such local 
educational agency or State agency, as the case may be, of that 
determination and shall provide such local educational agency or State 
agency with reasonable notice and an opportunity for a hearing.
    ``(d) Local Educational Agency Compliance.--
            ``(1) In general.--If the State educational agency, after 
        reasonable notice and an opportunity for a hearing, finds that 
        a local educational agency or State agency that has been 
        determined to be eligible under this section is failing to 
        comply with any requirement described in subsection (a), the 
        State educational agency shall reduce or shall not provide any 
        further payments to the local educational agency or State 
        agency until the State educational agency is satisfied that the 
        local educational agency or State agency, as the case may be, 
        is complying with that requirement.
            ``(2) Additional requirement.--Any State educational 
        agency, State agency, or local educational agency in receipt of 
        a notice pursuant to the notice described in paragraph (1) 
        shall, by means of public notice, take such measures as may be 
        necessary to bring the pendency of an action pursuant to this 
        subsection to the attention of the public within the 
        jurisdiction of such agency.
            ``(3) Consideration.--In carrying out its responsibilities 
        under paragraph (1), the State educational agency shall 
        consider any decision made in a hearing held under section 615 
        that is adverse to the local educational agency or State agency 
        involved in that decision.
    ``(e) Joint Establishment of Eligibility.--
            ``(1) In general.--A State educational agency may require a 
        local educational agency to establish its eligibility jointly 
        with another local educational agency if the State educational 
        agency determines that the local educational agency would be 
        ineligible under this section because the local educational 
        agency would not be able to establish and maintain programs of 
        sufficient size and scope to effectively meet the needs of 
        children with disabilities.
            ``(2) Amount of payments.--If a State educational agency 
        requires the joint establishment of eligibility under paragraph 
        (1), the total amount of funds made available to the affected 
        local educational agencies shall be equal to the sum of the 
        payments that each such local educational agency would have 
        received under section 611(c) if such agencies were eligible 
        for such payments.
            ``(3) Requirements.--Local educational agencies that 
        establish joint eligibility under this subsection shall--
                    ``(A) adopt policies and procedures that are 
                consistent with the State's policies and procedures 
                under section 612(a); and
                    ``(B) be jointly responsible for implementing 
                programs that receive assistance under this part.
            ``(4) Requirements for educational service agencies.--
                    ``(A) In general.--If an educational service agency 
                is required by State law to carry out programs under 
                this part, the joint responsibilities given to local 
                educational agencies under this subsection shall--
                            ``(i) not apply to the administration and 
                        disbursement of any payments received by that 
                        educational service agency; and
                            ``(ii) be carried out only by that 
                        educational service agency.
                    ``(B) Additional requirement.--Notwithstanding any 
                other provision of this subsection, an educational 
                service agency shall provide for the education of 
                children with disabilities in the least restrictive 
                environment, as required by section 612(a)(4).
    ``(f) Coordinated Services System.--
            ``(1) In general.--A local educational agency may not use 
        more than 5 percent of the amount such agency receives under 
        this part for any fiscal year, in combination with other 
        amounts (which shall include amounts other than education 
        funds), to develop and implement a coordinated services system 
        designed to improve results for children and families, 
        including children with disabilities and their families.
            ``(2) Activities.--In implementing a coordinated services 
        system under this subsection, a local educational agency may 
        carry out activities which include--
                    ``(A) improving the effectiveness and efficiency of 
                service delivery, including developing strategies that 
                promote accountability for results;
                    ``(B) service coordination and case management that 
                facilitates the linkage of individualized education 
                programs under this part and individualized family 
                service plans under part C with individualized service 
                plans under multiple Federal and State programs, such 
                as title I of the Rehabilitation Act of 1973 
                (vocational rehabilitation), title XIX of the Social 
                Security Act (Medicaid), and title XVI of the Social 
                Security Act (supplemental security income);
                    ``(C) developing and implementing interagency 
                financing strategies for the provision of education, 
                health, mental health, and social services, including 
                transition services and related services under this 
                title; and
                    ``(D) interagency personnel development for 
                individuals working on coordinated services.
            ``(3) Coordination with certain projects under elementary 
        and secondary education act of 1965.--If a local educational 
        agency is carrying out a coordinated services project under 
        title XI of the Elementary and Secondary Education Act of 1965 
        and a coordinated services project under this part in the same 
        schools, such agency shall use amounts under this subsection in 
        accordance with the requirements of that title.
    ``(g) Direct Services by the State Educational Agency.--
            ``(1) In general.--A State educational agency shall use the 
        payments that would otherwise have been available to a local 
        educational agency or to a State agency to provide special 
        education and related services directly to children with 
        disabilities residing in the area served by that local agency, 
        or for whom that State agency is responsible, if the State 
        educational agency determines that the local education agency 
        or State agency, as the case may be--
                    ``(A) has not provided the information needed to 
                establish the eligibility of such agency under this 
                section;
                    ``(B) is unable to establish and maintain programs 
                of free appropriate public education that meet the 
                requirements of subsection (a);
                    ``(C) is unable or unwilling to be consolidated 
                with one or more local educational agencies in order to 
                establish and maintain such programs; or
                    ``(D) has one or more children with disabilities 
                who can best be served by a regional or State program 
                or service delivery system designed to meet the needs 
                of such children.
            ``(2) Manner and location of education and services.--The 
        State educational agency may provide special education and 
        related services under paragraph (1) in such manner and at such 
        locations (including regional or State centers) as the State 
        agency considers appropriate. Such education and services shall 
        be provided in accordance with this part.
    ``(h) State Agency Eligibility.--Any State agency that desires to 
receive a subgrant for any fiscal year under section 611(c) shall 
demonstrate to the satisfaction of the State educational agency that--
            ``(1) all children with disabilities who are participating 
        in programs and projects funded under this part receive a free 
        appropriate public education, and that those children and their 
        parents are provided all the rights and procedural safeguards 
        described in this part; and
            ``(2) the agency meets such other conditions of this 
        section as the Secretary determines to be appropriate.

``SEC. 614. EVALUATIONS, REEVALUATIONS, INDIVIDUALIZED EDUCATION 
              PROGRAMS, AND EDUCATIONAL PLACEMENTS.

    ``(a) Evaluations and Reevaluations.--
            ``(1) Initial evaluations.--
                    ``(A) In general.--A State educational agency, 
                other State agency, or local educational agency shall 
                conduct an initial evaluation, in accordance with this 
                paragraph and subsection (b), before the initial 
                provision of special education and related services to 
                a child with a disability under this part.
                    ``(B) Procedures.--Such initial evaluation shall 
                consist of procedures--
                            ``(i) to determine whether a child is a 
                        child with a disability (as defined in section 
                        602(3)); and
                            ``(ii) to determine the educational needs 
                        of such child.
                    ``(C) Parental consent.--
                            ``(i) In general.--The agency proposing to 
                        conduct an initial evaluation to determine if 
                        the child qualifies as a child with a 
                        disability as defined in section 602(3)(A) or 
                        602(3)(B) shall obtain an informed consent from 
                        the parent of such child before the evaluation 
                        is conducted. Parental consent for evaluation 
                        shall not be construed as consent for placement 
                        for receipt of special education and related 
                        services.
                            ``(ii) Refusal.--If the parents of such 
                        child refuse consent for the evaluation, the 
                        agency may continue to pursue an evaluation by 
                        utilizing the mediation and due process 
                        procedures under section 615(e).
            ``(2) Reevaluations.--A local educational agency shall 
        ensure that a reevaluation of each child with a disability is 
        conducted--
                    ``(A) if conditions warrant a reevaluation or if 
                the child's parent or teacher requests a reevaluation, 
                but at least once every 3 years; and
                    ``(B) in accordance with subsections (b) and (c).
    ``(b) Evaluation Procedures.--
            ``(1) Notice.--The local educational agency shall provide 
        notice to the parents of a child with a disability, in 
        accordance with subsections (b)(3), (b)(4), and (c) of section 
        615, that describes any evaluation procedures such agency 
        proposes to conduct.
            ``(2) Conduct of evaluation.--In conducting the evaluation, 
        the local educational agency shall--
                    ``(A) use a variety of assessment tools and 
                strategies to gather relevant functional and 
                developmental information, including information 
                provided by the parent, that may assist in determining 
                whether the child is a child with a disability and the 
                content of the child's individualized education 
                program, including information related to enabling the 
                child to be involved in and progress in the general 
                curriculum or, for preschool children, to participate 
                in appropriate activities;
                    ``(B) not use any single procedure as the sole 
                criterion for determining whether a child is a child 
                with a disability or determining an appropriate 
                educational program for the child; and
                    ``(C) use technically sound instruments that may 
                assess the relative contribution of cognitive and 
                behavioral factors, in addition to physical or 
                developmental factors.
            ``(3) Additional requirements.--Each local educational 
        agency shall ensure that--
                    ``(A) tests and other evaluation materials used to 
                assess a child under this section--
                            ``(i) are selected and administered so as 
                        not to be discriminatory on a racial or 
                        cultural basis; and
                            ``(ii) are provided and administered in the 
                        child's native language or other mode of 
                        communication, unless it is clearly not 
                        feasible to do so; and
                    ``(B) any standardized tests that are given to the 
                child--
                            ``(i) have been validated for the specific 
                        purpose for which they are used;
                            ``(ii) are administered by qualified 
                        personnel; and
                            ``(iii) are administered in accordance with 
                        any instructions provided by the producer of 
                        such tests; and
                    ``(C) the child is assessed in all areas of 
                suspected disability.
            ``(4) Determination of eligibility.--Upon completion of 
        administration of tests and other evaluation materials--
                    ``(A) the determination of whether the child is a 
                child with a disability as defined in section 602(3) or 
                section 602(3)(B) will be made by a team of qualified 
                professionals and the parent of the child in accordance 
                with paragraph (5); and
                    ``(B) a copy of the evaluation report and the 
                documentation of determination of eligibility will be 
                given to the parent.
            ``(5) Special rule for eligibility determination.--In 
        making a determination of eligibility under paragraph (4)(A), a 
        child shall not be determined to be a child with a disability 
        based on any of the following:
                    ``(A) Lack of instruction, including instruction in 
                reading or math.
                    ``(B) Limited English proficiency.
                    ``(C) Cultural or environmental factors.
                    ``(D) Economic disadvantage.
    ``(c) Reevaluation Procedures.--
            ``(1) In general.--As part of any reevaluation to assess a 
        child under this section, the individualized education program 
        team and other qualified professionals, as appropriate, shall--
                    ``(A) review existing evaluation data on the child, 
                including current classroom-based assessments and 
                teacher and related services providers observation; and
                    ``(B) on the basis of that review and input from 
                the child's parents, identify what additional data, if 
                any, are needed to determine--
                            ``(i) whether the child continues to have a 
                        disability, as described in section 
                        602(3)(A)(i) or section 602(3)(B);
                            ``(ii) the child's present levels of 
                        performance and educational needs; and
                            ``(iii)(I) whether the child continues to 
                        need special education and related services; 
                        and
                            ``(II) if so, any additions or 
                        modifications to the special education and 
                        related services to enable the child to meet 
                        the objectives set out in the individualized 
                        education program of the child and to 
                        participate, as appropriate, in the general 
                        curriculum.
            ``(2) Tests and other evaluation materials.--The local 
        educational agency shall administer such tests and other 
        evaluation materials as may be needed to produce the data 
        identified by the IEP Team under paragraph (1)(B).
            ``(3) Requirements if additional data not needed.--If the 
        IEP Team and other qualified professionals, as appropriate, 
        determines that no additional data are needed to determine 
        whether the child continues to be a child with a disability, 
        the local educational agency--
                    ``(A) shall notify the child's parents of--
                            ``(i) that determination and the reasons 
                        for it; and
                            ``(ii) the right of such parents to request 
                        an assessment to determine whether the child 
                        continues to be a child with a disability; and
                    ``(B) shall not be required to conduct such an 
                assessment unless requested to by the child's parents.
    ``(d) Individualized Education Programs.--
            ``(1) Requirement that program be in effect.--
                    ``(A) In general.--At the beginning of each school 
                year, each local educational agency, or State 
                educational agency, as the case may be, shall have in 
                effect, for each child with a disability in its 
                jurisdiction, an individualized education program, as 
                defined in section 602(11).
                    ``(B) Program for child aged 3 to 5.--In the case 
                of a child with a disability aged 3 to 5, inclusive, an 
                individualized family service plan that contains the 
material described in section 636, and that is developed in accordance 
with this section, may serve as the IEP of the child if using that plan 
as the IEP is--
                            ``(i) consistent with State policy; and
                            ``(ii) agreed to by the agency and the 
                        child's parents.
            ``(2) Development of iep.--
                    ``(A) In general.--An individualized education 
                program team shall develop the IEP described in 
                paragraph (1). In developing such IEP, the IEP Team, 
                subject to subparagraph (B), shall--
                            ``(i) consider the child's strengths and 
                        the parents' concerns for enhancing their 
                        child's education;
                            ``(ii) consider the results of the initial 
                        evaluation or most recent reevaluation;
                            ``(iii) in the case of a child whose 
                        behavior impedes his or her learning or that of 
                        others, consider, when appropriate, strategies, 
                        including positive behavior management 
                        interventions and strategies to help the child 
                        behave in an appropriate and responsible manner 
                        conducive to learning;
                            ``(iv) in the case of a child with limited 
                        English proficiency, consider the language 
                        needs of the child as such needs relate to the 
                        child's IEP;
                            ``(v) in the case of a child who is blind 
                        or visually impaired, provide for instruction 
                        in braille and the use of braille unless all 
                        members of the IEP Team concur that, after an 
                        evaluation of the child's reading and writing 
                        skills, needs, and appropriate reading and 
                        writing media (including an evaluation of the 
                        child's future needs for instruction in braille 
                        or the use of braille), instruction in braille 
                        or the use of braille is not appropriate for 
                        the child;
                            ``(vi) consider the communication needs of 
                        the child, and in the case of a child who is 
                        deaf, hard-of-hearing, blind, or 
                        communicatively disabled, consider the language 
                        and communication needs of the child; and
                            ``(vii) consider whether the child requires 
                        assistive technology services or devices.
                    ``(B) Requirement with respect to regular education 
                teacher.--The regular education teacher of the child, 
                as a member of the IEP Team, shall, to the extent 
                appropriate, participate in the development of the IEP 
                of the child, including the determination of 
                appropriate behavior-management techniques consistent 
                with subparagraph (A)(iii) of this paragraph, and the 
                determination of supplementary aids and services, 
                program modifications, and support for school personnel 
                consistent with section 602(11)(E).
            ``(3) Review and revision of iep.--
                    ``(A) In general.--The local educational agency 
                shall ensure that, subject to subparagraphs (B) and 
                (C), the IEP Team--
                            ``(i) reviews each IEP at least once a year 
                        to determine whether the annual objectives for 
                        the child are being achieved; and
                            ``(ii) revises the IEP to address--
                                    ``(I) any lack of expected progress 
                                toward the annual objectives and in the 
                                general curriculum, where appropriate;
                                    ``(II) the results of any 
                                reevaluation conducted under this 
                                section;
                                    ``(III) information about the child 
                                provided to, or by, the parents, as 
                                described in section 602(11)(F)(ii); or
                                    ``(IV) the child's anticipated 
                                needs as otherwise appropriate.
                    ``(B) Certain children with disabilities.--
                            ``(i) In general.--In the case of a child 
                        with a disability who has demonstrated a 
                        pattern of behavior that significantly impairs 
                        the education of the child, or the education of 
                        the classmates of the child, and the ability of 
                        the teacher of the child to teach, if such 
                        teacher initiates or requests an IEP meeting, 
                        then the appropriate authority shall convene an 
                        IEP meeting to review the child's educational 
                        program, related services, supplementary aids 
                        and services, and placement.
                            ``(ii) Review of iep.--In carrying out a 
                        review of the IEP of the child, the IEP Team 
                        shall determine--
                                    ``(I) the appropriateness of the 
                                current IEP of the child;
                                    ``(II) whether or not special 
                                education and related services have 
                                been appropriately provided to the 
                                child;
                                    ``(III) whether or not other 
                                supplementary aids or services, 
                                including teacher training, are needed 
                                to address the behavior of the child; 
                                and
                                    ``(IV) subject to clauses (iii) and 
                                (iv), whether or not the placement of 
                                the child should be changed.
                            ``(iii) Determination of change in 
                        placement.--Prior to proposing a change in the 
                        placement of the child, the IEP Team shall 
                        first consider and then document the following:
                                    ``(I) The cumulative record over a 
                                reasonable period of time describing 
                                the frequent behaviors exhibited by the 
                                child that significantly impairs the 
                                education of the child, the education 
                                of the classmates of the child, and the 
                                ability of the teacher of the child to 
                                teach.
                                    ``(II) Documentation of the efforts 
                                made to address the behavior of the 
                                child, the use of supplementary 
                                services or strategies (including the 
                                use of behavior management plans) that 
                                have been implemented over a reasonable 
                                period of time and have failed to 
                                address the behavior of the child in a 
                                manner that would enable the child to 
                                remain in the current educational 
                                placement of the child without 
                                significantly impairing the education 
                                of the child, the education of the 
                                classmates of the child, and the 
                                ability of the teacher of the child to 
                                teach.
                                    ``(III) The training made available 
                                to the teacher or teachers of the 
                                child.
                            ``(iv) Expedited due process hearing.--If 
                        the IEP Team determines that a change in 
                        placement of the child is appropriate, and the 
                        parents of the child disagree with such 
                        determination, then either party may request an 
                        expedited due process hearing in accordance 
                        with section 615(f)(2).
                    ``(C) Requirement with respect to regular education 
                teacher.--The regular education teacher of the child, 
                as a member of the IEP Team, shall, to the extent 
                appropriate, participate in the review and revision of 
                the IEP of the child.
            ``(4) Failure to meet transition objectives.--If a 
        participating agency, other than the local educational agency, 
        fails to provide the transition services described in the IEP 
        in accordance with section 602(11)(F)(ii), the local 
        educational agency shall reconvene the IEP Team to identify 
        alternative strategies to meet the transition objectives for 
        the child set out in that program.
            ``(5) Rule of construction.--Nothing in this subsection 
        shall be construed--
                    ``(A) to decrease the amount of information that a 
                parent receives concerning the progress of the child of 
                such parent; or
                    ``(B) to increase the amount of paperwork for the 
                teachers, related services personnel, and 
                administrators of such child.
    ``(e) Educational Placements.--Each local educational agency or 
State educational agency shall ensure that the parents of each child 
with a disability are members of any group that makes decisions on the 
educational placement of their child.

``SEC. 615. PROCEDURAL SAFEGUARDS.

    ``(a) Establishment of Procedures.--Any State educational agency or 
local educational agency that receives assistance under this part shall 
establish and maintain procedures in accordance with this section to 
assure that children with disabilities and their parents are guaranteed 
procedural safeguards with respect to the provision of free appropriate 
public education by such agencies.
    ``(b) Types of Procedures.--The procedures required by this section 
shall include--
            ``(1) an opportunity for the parents of a child with a 
        disability to examine all records relating to such child and to 
        participate in meetings with respect to the identification, 
        evaluation, and educational placement of the child, and the 
        provision of a free appropriate public education to such child, 
        and to obtain an independent educational evaluation of the 
        child;
            ``(2) procedures to protect the rights of the child 
        whenever the parents of the child are not known, the agency 
        cannot, after reasonable efforts, locate the parents, or the 
        child is a ward of the State, including the assignment of an 
        individual (who shall not be an employee of the State 
        educational agency, the local educational agency, or any other 
        agency that is involved in the education or care of the child) 
        to act as a surrogate for the parents;
            ``(3) written prior notice to the parents of the child 
        whenever such agency--
                    ``(A) proposes to initiate or change; or
                    ``(B) refuses to initiate or change;
        the identification, evaluation, or educational placement of the 
        child, in accordance with subsection (c), or the provision of a 
        free appropriate public education to the child;
            ``(4) procedures designed to assure that the notice 
        required by paragraph (3) is in the native language of the 
        parents, unless it clearly is not feasible to do so;
            ``(5) an opportunity for mediation in accordance with 
        subsection (e);
            ``(6) an opportunity to present complaints with respect to 
        any matter relating to the identification, evaluation, or 
        educational placement of the child, or the provision of a free 
        appropriate public education to such child;
            ``(7) procedures that require the parent of a child with a 
        disability, or the attorney representing the child, to provide 
        notice (which shall remain confidential)--
                    ``(A) to the State educational agency or local 
                educational agency, as the case may be, in the 
                complaint filed under paragraph (6); and
                    ``(B) that shall include--
                            ``(i) the name of the child, the address of 
                        the residence of the child, and the name of the 
                        school at which the child is attending;
                            ``(ii) a description of the nature of the 
                        problem of the child relating to such proposed 
                        initiation or change, including facts relating 
                        to such problem; and
                            ``(iii) the proposed resolution of the 
                        problem; and
            ``(8) procedures that require the State educational agency 
        to develop a model form to assist parents in filing a complaint 
        in accordance with paragraph (7).
    ``(c) Content of Prior Written Notice.--The notice required by 
subsection (b)(3) shall include--
            ``(1) a description of the action proposed or refused by 
        the agency;
            ``(2) an explanation of why the agency proposes or refuses 
        to take the action;
            ``(3) a description of any other options that the agency 
        considered and the reasons why those options were rejected;
            ``(4) a description of each evaluation procedure, test, 
        record, or report the agency used as a basis for the proposed 
        or refused action;
            ``(5) a description of any other factors that are relevant 
        to the agency's proposal or refusal; and
            ``(6) a statement that the parents of a child with a 
        disability have protection under the procedural safeguards of 
        this title and, if this notice is not an initial referral for 
        evaluation, the means by which a copy of a description of the 
        procedural safeguards can be obtained.
    ``(d) Procedural Safeguards Notice.--
            ``(1) In general.--A copy of the procedural safeguards 
        available to the parents of a child with a disability shall be 
        given to the parents, at a minimum--
                    ``(A) upon initial referral for evaluation;
                    ``(B) upon each notification of an individualized 
                education program meeting and upon reevaluation of the 
                child; and
                    ``(C) upon registration of a complaint under 
                subsection (b)(6).
            ``(2) Contents.--The procedural safeguards notice shall 
        include a full explanation of the procedural safeguards written 
        in the native language of the parents, unless not feasible to 
        do so, and written in an easily understandable manner, 
        available under this section and under regulations promulgated 
        by the Secretary relating to--
                    ``(A) independent educational evaluation;
                    ``(B) prior written notice;
                    ``(C) parental consent;
                    ``(D) access to educational records;
                    ``(E) opportunity to present complaints;
                    ``(F) the child's placement during pendency of due 
                process proceedings;
                    ``(G) procedures for students who are subject to 
                placement in an interim alternative educational 
                setting;
                    ``(H) requirements for unilateral placement by 
                parents of children in private schools at public 
                expense;
                    ``(I) mediation;
                    ``(J) due process hearings, including requirements 
                for disclosure of evaluation results and 
                recommendations;
                    ``(K) State-level appeals (if applicable in that 
                State);
                    ``(L) civil actions; and
                    ``(M) attorney's fees.
    ``(e) Mediation.--
            ``(1) In general.--Any State educational agency or local 
        educational agency that receives assistance under this part 
        shall ensure that procedures are established and implemented to 
        allow parties to disputes involving the provision of free 
        appropriate public education to children with disabilities by 
        any such State educational agency or local educational agency 
        to resolve such disputes through a mediation process.
            ``(2) Requirements.--Such procedures shall meet the 
        following requirements:
                    ``(A) The procedures shall ensure that the 
                mediation process--
                            ``(i) is voluntary on the part of the 
                        parents and may be terminated by either party 
                        after a good faith effort has been made by the 
                        party terminating the mediation process; and
                            ``(ii) is conducted by a qualified and 
                        impartial mediator who is trained in effective 
                        mediation techniques.
                    ``(B) The State shall maintain a list of 
                individuals who are qualified mediators and 
                knowledgeable in laws and regulations relating to the 
                provision of special education and related services.
                    ``(C) The State shall bear the cost of the 
                mediation process.
                    ``(D) Each session in the mediation process shall 
                be scheduled in a timely manner and shall be held in a 
                location that is convenient to the parties to the 
                dispute.
                    ``(E) An agreement reached by the parties to the 
                dispute in the mediation process shall be set forth in 
                a written mediation agreement.
                    ``(F) Discussions that occur during the mediation 
                process shall be confidential and may not be used as 
                evidence in any subsequent due process hearings or 
                civil proceedings, and the parties to the mediation 
                process may be required to sign a confidentiality 
                pledge prior to the commencement of such process.
                    ``(G) The State shall determine whether or not 
                attorneys may attend or otherwise participate in the 
                mediation process after offering the opportunity for 
                parents and representatives of school districts to 
                participate in the mediation process prior to any due 
                process filing without attorneys present.
    ``(f) Impartial Due Process Hearing.--
            ``(1) In general.--Whenever a complaint has been received 
        under section 614(d)(3)(B), or subsection (b)(6) or (k) of this 
        section, the parents involved in such complaint shall have an 
        opportunity for an impartial due process hearing which shall be 
        conducted by the State educational agency or by the local 
        educational agency, as determined by State law or by the State 
        educational agency.
            ``(2) Disclosure of evaluations and recommendations.--
                    ``(A) In general.--At least 10 school days prior to 
                a hearing conducted pursuant to paragraph (1), each 
                party shall disclose to all other parties all 
                evaluations and recommendations based on the offering 
                party's evaluations which the party intends to use at 
                the hearing.
                    ``(B) Prohibition.--Any party which fails to meet 
                the requirement of subparagraph (A) shall be barred 
                from introducing such evaluations and recommendations 
                at such hearing.
            ``(3) Limitation on conduct of hearing.--A hearing 
        conducted pursuant to paragraph (1) may not be conducted by an 
        employee of the State educational agency or the local 
        educational agency involved in the education or care of the 
        child.
            ``(4) Additional requirements with respect to hearings for 
        certain children with disabilities.--A hearing conducted 
        pursuant to paragraph (1) that is based upon a complaint 
        received under section 614(d)(3)(B) shall, in addition to the 
        requirements contained in this subsection, comply with the 
        following additional requirements:
                    ``(A) In determining whether or not the decision by 
                the IEP Team to change the placement of the child is 
                justified and appropriate, the hearing officer shall, 
                at a minimum, review the information under clause (iii) 
                of such section.
                    ``(B) The child shall remain in the current 
                educational placement of the child until the hearing 
                officer reaches a final decision under this subsection.
                    ``(C) The hearing officer shall make a 
                determination of findings and reach a final decision 
                not later than 20 days after the first day of the 
                hearing, or, at the discretion of the hearing officer, 
                not later than 30 days after such first day of the 
                hearing.
                    ``(D) The placement of the child, including the 
                placement of the child during any due process or 
                judicial proceeding, shall be determined in accordance 
                with the final decision of the hearing officer under 
                this subsection, unless the parents and the State or 
                local educational agency agree otherwise.
    ``(g) Appeal.--If the hearing required by subsection (f) is 
conducted by a local educational agency, any party aggrieved by the 
findings and decision rendered in such a hearing may appeal such 
findings and decision to the State educational agency. Such agency 
shall conduct an impartial review of such decision. The officer 
conducting such review shall make an independent decision upon 
completion of such review.
    ``(h) Safeguards.--Any party to a hearing conducted pursuant to 
subsection (f), or an appeal conducted pursuant to subsection (g), 
shall be accorded--
            ``(1) the right to be accompanied and advised by counsel 
        and by individuals with special knowledge or training with 
        respect to the problems of children with disabilities;
            ``(2) the right to present evidence and confront, cross-
        examine, and compel the attendance of witnesses;
            ``(3) the right to a written, or, at the option of the 
        parents, electronic verbatim record of such hearing; and
            ``(4) the right to written, or, at the option of the 
        parents, electronic findings of fact and decisions (which 
        findings and decisions shall be made available to the public 
        consistent with the requirements of section 617(c) (relating to 
        the confidentiality of data, information, and records) and 
        shall also be transmitted to the advisory panel established 
        pursuant to section 612(a)(18)).
    ``(i) Administrative Procedures.--
            ``(1) In general.--A decision made in a hearing conducted 
        pursuant to subsection (f) shall be final, except that any 
        party involved in such hearing may appeal such decision under 
        the provisions of subsection (g) and paragraph (2) of this 
        subsection.
            ``(2) Right to bring civil action.--
                    ``(A) In general.--Any party aggrieved by the 
                findings and decision made under subsection (f) who 
                does not have the right to an appeal under subsection 
                (g), and any party aggrieved by the findings and 
decision under this subsection, shall have the right to bring a civil 
action with respect to the complaint presented pursuant to this 
section, which action may be brought in any State court of competent 
jurisdiction or in a district court of the United States without regard 
to the amount in controversy.
                    ``(B) Additional requirements.--In any action 
                brought under this paragraph the court--
                            ``(i) shall receive the records of the 
                        administrative proceedings;
                            ``(ii) may hear additional evidence at the 
                        request of a party; and
                            ``(iii) basing its decision on the 
                        preponderance of the evidence, shall grant such 
                        relief as the court determines is appropriate.
            ``(3) Jurisdiction of district courts; attorneys' fees.--
                    ``(A) In general.--The district courts of the 
                United States shall have jurisdiction of actions 
                brought under this section without regard to the amount 
                in controversy.
                    ``(B) Award of attorneys' fees.--In any action or 
                proceeding brought under this section, the court, in 
                its discretion, may award reasonable attorneys' fees as 
                part of the costs to the parents of a child or youth 
                with a disability who is the prevailing party.
                    ``(C) Determination of amount of attorneys' fees.--
                Fees awarded under this paragraph shall be based on 
                rates prevailing in the community in which the action 
                or proceeding arose for the kind and quality of 
                services furnished. No bonus or multiplier may be used 
                in calculating the fees awarded under this subsection.
                    ``(D) Prohibition of attorneys' fees and related 
                costs for certain services.--(i) Attorneys' fees may 
                not be awarded and related costs may not be reimbursed 
                in any action or proceeding under this subsection for 
                services performed subsequent to the time of a written 
                offer of settlement to a parent if--
                            ``(I) the offer is made within the time 
                        prescribed by Rule 68 of the Federal Rules of 
                        Civil Procedure or, in the case of an 
                        administrative proceeding, at any time more 
                        than ten days before the proceeding begins;
                            ``(II) the offer is not accepted within 10 
                        days; and
                            ``(III) the court or administrative officer 
                        finds that the relief finally obtained by the 
                        parents is not more favorable to the parents 
                        than the offer of settlement.
                    ``(ii) Attorneys' fees may not be awarded relating 
                to any meeting of the IEP Team unless such meeting is 
                convened as a result of a judicial action or 
                proceeding.
                    ``(E) Exception to prohibition on attorneys' fees 
                and related costs.--Notwithstanding subparagraph (D), 
                an award of attorneys' fees and related costs may be 
                made to a parent who is the prevailing party and who 
                was substantially justified in rejecting the settlement 
                offer.
                    ``(F) Reduction in amount of attorneys' fees.--
                Except as provided in subparagraph (G), whenever the 
                court finds that--
                            ``(i) the parent, during the course of the 
                        action or proceeding, unreasonably protracted 
                        the final resolution of the controversy;
                            ``(ii) the amount of the attorneys' fees 
                        otherwise authorized to be awarded unreasonably 
                        exceeds the hourly rate prevailing in the 
                        community for similar services by attorneys of 
                        reasonably comparable skill and experience;
                            ``(iii) the time spent and legal services 
                        furnished were excessive considering the nature 
                        of the action or proceeding;
                            ``(iv) the attorney representing the parent 
                        did not provide to the school district the 
                        appropriate information in the due process 
                        complaint in accordance with subsection (b)(7); 
                        or
                            ``(v) the amount of attorneys' fees 
                        requested is not consistent with the extent of 
                        the success of the parents;
                the court shall reduce, accordingly, the amount of the 
                attorneys' fees awarded under this subsection.
                    ``(G) Exception to reduction in amount of 
                attorneys' fees.--The provisions of subparagraph (F) 
                shall not apply in any action or proceeding if the 
                court finds that the State or local educational agency 
                unreasonably protracted the final resolution of the 
action or proceeding or there was a violation of this section.
    ``(j) Maintenance of Current Educational Placement.--Except as 
provided in subsection (k), during the pendency of any proceedings 
conducted pursuant to this section, unless the State or local 
educational agency and the parents otherwise agree, the child shall 
remain in the then current educational placement of such child, or, if 
applying for initial admission to a public school, shall, with the 
consent of the parents, be placed in the public school program until 
all such proceedings have been completed.
    ``(k) Placement in Alternative Educational Setting.--
            ``(1) Authority of school personnel.--School personnel 
        under this section may, to the same extent as a court, order a 
        change in the placement of a child with a disability--
                    ``(A) to an appropriate interim alternative 
                educational setting, another setting, or suspension, 
                for not more than 10 school days (to the extent such 
                alternatives would be applied to children without 
                disabilities); and
                    ``(B) to an appropriate interim alternative 
                educational setting for the same amount of time that a 
                child without a disability would be subject to 
                discipline, but for not more than an additional 45 
                school days if--
                            ``(i) the child carries a weapon to school 
                        or to a school function under the jurisdiction 
                        of a State or a local educational agency;
                            ``(ii) the child possesses or uses illegal 
                        drugs or sells or solicits the sale of 
                        medications or illegal drugs while at school or 
                        a school function under the jurisdiction of a 
                        State or local educational agency; or
                            ``(iii) the child causes serious injury 
                        while at school or at a school function under 
                        the jurisdiction of a State or a local 
                        educational agency.
            ``(2) Authority of hearing officer.--A hearing officer 
        under this section may, to the same extent as a court, order a 
        change in the placement of a child with a disability to an 
        appropriate interim alternative educational setting for not 
        more than 45 school days if--
                    ``(A) the maintenance of the current placement of 
                such child is substantially likely to result in injury 
                to the child or to others; and
                    ``(B) the hearing officer--
                            ``(i) determines that the public agency has 
                        demonstrated by substantial evidence that the 
                        requirement of subparagraph (A) has been met;
                            ``(ii) considers the appropriateness of the 
                        child's current placement; and
                            ``(iii) considers whether the public agency 
                        has made reasonable efforts to minimize the 
                        risk of harm including the use of supplementary 
                        aids and services.
            ``(3) Determination of setting.--The alternative 
        educational setting described in paragraph (1) or paragraph (2) 
        shall be determined by the individualized education program 
        team.
            ``(4) Manifestation determination review.--
                    ``(A) In general.--If a change in placement or 
                disciplinary proceeding, including expulsion, is 
                contemplated as a result of an action described in 
                paragraph (1) or paragraph (2)--
                            ``(i) not later than 3 school days after 
                        the date on which such action has been taken 
                        the parents shall be notified of such action; 
                        and
                            ``(ii) not later than 15 school days after 
                        the date on which such action has been taken a 
                        review shall be conducted of the relationship 
                        between the child's disability and the behavior 
                        described in paragraph (1).
                    ``(B) Individuals to carry out review.--A review 
                described in subparagraph (A) shall be conducted by the 
                IEP Team and other qualified personnel.
                    ``(C) Conduct of review.--In carrying out a review 
                described in subparagraph (A), the individuals 
                described in subparagraph (B) shall consider 
                appropriate factors, including--
                            ``(i) the appropriateness of the child's 
                        placement;
                            ``(ii) the consistency of the 
                        implementation of the child's entire IEP, 
                        including the technical soundness of the 
                        behavior strategies used;
                            ``(iii) evaluation and diagnostic results, 
                        which may include any such results supplied by 
                        the parents or guardian of the child; and
                            ``(iv) observations of the child.
            ``(5) Determination that behavior was manifestation of 
        disability.--If the result of the review described in paragraph 
        (4) is a determination that the behavior of the child with a 
        disability was a manifestation of such child's disability and 
        the parents of such child agree with such determination, the 
        educational placement of such child may be changed. If the 
        parents do not agree with such determination or with such 
        changed educational placement, an immediate appeal may be made 
        to a hearing officer to determine whether the child's placement 
        should be changed. Any party aggrieved by the determination of 
        the hearing officer may initiate a due process hearing as 
        described in subsection (f).
            ``(6) Determination that behavior was not manifestation of 
        disability.--
                    ``(A) In general.--
                            ``(i) Initial determination requirement.--
                        The IEP Team may determine that the behavior of 
                        the child was not a manifestation of such 
                        child's disability only if the IEP Team first 
                        determines that the disability--
                                    ``(I) did not impair the ability of 
                                the child to understand the impact and 
                                consequences of the behavior; and
                                    ``(II) did not impair the ability 
                                of the child to control the behavior.
                            ``(ii) Other requirements.--If the result 
                        of the review described in paragraph (4) is a 
                        determination that the behavior of the child 
                        with a disability was not a manifestation of 
                        such child's disability, the relevant 
                        disciplinary procedures applicable to children 
                        without disabilities may be applied in the same 
                        manner in which they would be applied to 
                        children without disabilities. If the parents 
                        do not agree with such application, a due 
                        process hearing, as described in subsection 
                        (f), may be initiated. Any determination under 
                        paragraph (4) that a child's behavior was not a 
                        manifestation of a disability shall be reviewed 
                        by a hearing officer under subsection (f), 
                        whether or not the child's parents request a 
                        hearing, before educational services to the 
                        child may be terminated under this paragraph. 
                        During the pendency of such due process 
                        procedures, the child shall continue to receive 
                        educational services in the alternative 
                        educational setting.
                    ``(B) Special rule.--Where application of the 
                relevant disciplinary procedures in subparagraph (A) 
                would result in the expulsion of the child without the 
                receipt of educational services, the child may be 
                expelled only if--
                            ``(i) the child carries a weapon to school 
                        or to a school function under the jurisdiction 
                        of a State or local educational agency; or
                            ``(ii) the child possesses or uses illegal 
                        drugs or sells or solicits the sale of 
                        medications or illegal drugs while at school or 
                        a school function under the jurisdiction of a 
                        State or local educational agency.
            ``(7) Expedited hearing.--The State or local educational 
        agency shall arrange for an expedited hearing in any case 
        described in this subsection when requested by the parent.
            ``(8) Additional requirements.--
                    ``(A) Maintenance of alternative educational 
                setting.-- If the parent of a child described in this 
                section requests a hearing pursuant to subsection (f), 
                the child shall remain in the alternative educational 
                setting in which such child was placed during the 
                pendency of any proceedings under this section, unless 
                the parents and the State or local educational agency 
                agree otherwise.
                    ``(B) Protections for children not yet eligible for 
                special education and related services.--
                            ``(i) In general.--A child who has not been 
                        determined to be eligible for special education 
                        and related services under this part and who 
                        has engaged in behavior that violated any rule 
                        or code of conduct of the local educational 
                        agency, including any behavior described in 
                        paragraph (1), may assert any of the 
                        protections provided for in this part if the 
                        local educational agency had knowledge (as 
                        determined in accordance with this 
                        subparagraph) that the child was a child with a 
                        disability before the behavior that 
                        precipitated the disciplinary action occurred.
                            ``(ii) Basis of knowledge.--A local 
                        educational agency shall be deemed to 
have knowledge that a child is a child with a disability if--
                                    ``(I) the parent of the child has 
                                expressed concern in writing (unless 
                                the parent is illiterate or has a 
                                disability that prevents compliance 
                                with the requirements contained in this 
                                subclause) to personnel of the 
                                appropriate educational agency that the 
                                child is in need of special education 
                                and related services;
                                    ``(II) the behavior of the child 
                                demonstrates the need for such 
                                services;
                                    ``(III) the parent of the child has 
                                requested an evaluation of the child 
                                pursuant to section 614; or
                                    ``(IV) the teacher of the child, or 
                                other personnel of the local 
                                educational agency, has expressed 
                                concern about the behavior of the child 
                                to the director of special education of 
                                such agency or to other personnel of 
                                the agency.
                            ``(iii) Conditions that apply if no basis 
                        of knowledge.--
                                    ``(I) In general.--If a local 
                                educational agency does not have 
                                knowledge that a child is a child with 
                                a disability (in accordance with clause 
                                (ii)) prior to taking disciplinary 
                                measures against the child, the child 
                                may be subjected to the same 
                                disciplinary measures as measures 
                                applied to children without 
                                disabilities, who engaged in comparable 
                                behaviors consistent with paragraph 
                                (2).
                                    ``(II) Limitations.--If a request 
                                is made for an evaluation of a child 
                                during the time period in which the 
                                child is subjected to disciplinary 
                                measures under paragraph (1), the 
                                evaluation shall be conducted in an 
                                expedited manner. If the child is 
                                determined to be a child with a 
                                disability, taking into consideration 
                                information from the evaluation 
                                conducted by the agency and information 
                                provided by the parents, the agency 
                                shall provide special education and 
                                related services in accordance with the 
                                provisions of this part, except that, 
                                pending the results of the evaluation, 
                                the child shall remain in the 
                                educational placement determined by 
                                school authorities.
                    ``(C) Referral to and action by law enforcement and 
                judicial authorities.--Nothing in this part shall be 
                construed to prohibit an agency from reporting a crime 
                committed by a child with a disability to appropriate 
                authorities or to prevent State law enforcement and 
                judicial authorities from exercising their 
                responsibilities with regard to the application of 
                Federal and State law to crimes committed by a child 
                with a disability.
            ``(9) Definitions.--For purposes of this subsection, the 
        following definitions apply:
                    ``(A) Illegal drug.--The term `illegal drug'--
                            ``(i) means a controlled substance within 
                        the meaning of any of paragraphs (1) through 
                        (5) of section 202 of the Controlled Substances 
                        Act (21 U.S.C 812); but
                            ``(ii) does not include a controlled 
                        substance within the meaning of paragraphs (1) 
                        through (5) of section 202 of such Act if--
                                    ``(I) such controlled substance is 
                                legally possessed or used under the 
                                supervision of a licensed health care 
                                professional; or
                                    ``(II) such controlled substance is 
                                legally possessed or used under any 
                                other authority under such Act or under 
                                any other provision of Federal law.
                    ``(B) Serious injury.--The term `serious injury' 
                means an injury that involves substantial risk of 
                death, extreme physical pain, obvious or protracted 
                disfigurement, loss of the use of bodily members or 
                organs, broken bones, or significant endangerment to an 
                individual's emotional health or safety that is the 
                result of a physical or verbal assault.
                    ``(C) Weapon.--The term `weapon' has the meaning 
                given the term `dangerous weapon' under paragraph (2) 
                of the first subsection (g) of section 930 of title 18, 
                United States Code.
    ``(l) Rule of Construction.--Nothing in this part shall be 
construed to restrict or limit the rights, procedures, and remedies 
available under the Constitution, the Americans with Disabilities Act, 
title V of the Rehabilitation Act of 1973, or other Federal laws 
protecting the rights of children with disabilities, except that before 
the filing of a civil action under such laws seeking relief that is 
also available under this part, the procedures under subsections (f) 
and (g) shall be exhausted to the same extent as would be required had 
the action been brought under this part.
    ``(m) Transfer of Parental Rights at Age of Majority.--
            ``(1) In general.--A State that receives amounts from a 
        grant under this part may provide that, when a child with a 
        disability reaches the age of majority under State law (except 
        for a child with a disability who has been determined to be 
        incompetent under State law)--
                    ``(A) the public agency shall provide any notice 
                required by this section to both the individual and the 
                parents;
                    ``(B) all other rights accorded to parents under 
                this part transfer to the child;
                    ``(C) the agency shall notify the individual and 
                the parents of the transfer of rights; and
                    ``(D) all rights accorded to parents under this 
                part transfer to children who are incarcerated in an 
                adult or juvenile Federal, State, or local correctional 
                institution.
            ``(2) Special rule.--If, under State law, a child with a 
        disability who has reached the age of majority under State law 
        is determined not to have the ability to provide informed 
        consent with respect to the educational program of the child, 
        the State shall establish procedures for appointing the parent 
        of the child, or another appropriate individual, to represent 
        the educational interests of the child throughout the period of 
        eligibility of the child under this part.

``SEC. 616. WITHHOLDING AND JUDICIAL REVIEW.

    ``(a) Withholding of Payments.--
            ``(1) In general.--Whenever the Secretary, after reasonable 
        notice and opportunity for hearing to the State educational 
        agency involved (and to any local educational agency or State 
        agency affected by any failure described in subparagraph (B)), 
        finds--
                    ``(A) that there has been a failure by the State to 
                comply substantially with any provision of this part; 
                or
                    ``(B) that there is a failure to comply with any 
                condition of a local educational agency's or State 
                agency's eligibility under this part;
        the Secretary shall, after notifying the State educational 
        agency, withhold any further payments to the State under this 
        part.
            ``(2) Nature of withholding.--If the Secretary withholds 
        further payments under paragraph (1), the Secretary may 
        determine that such withholding will be limited to programs or 
        projects, or portions thereof, affected by the failure, or that 
        the State educational agency shall not make further payments 
        under this part to specified local educational agencies or 
        State agencies affected by the failure. Until the Secretary is 
        satisfied that there is no longer any failure to comply with 
        the provisions of this part, as specified in subparagraph (A) 
        or (B) of paragraph (1), no further payments shall be made to 
        the State under this part, or payments by the State educational 
        agency under this part shall be limited to local educational 
        agencies and State agencies whose actions did not cause or were 
        not involved in the failure, as the case may be. Any State 
        educational agency, State agency, or local educational agency 
        that has received notice under paragraph (1) shall, by means of 
        a public notice, take such measures as may be necessary to 
        bring the pendency of an action pursuant to this subsection to 
        the attention of the public within the jurisdiction of such 
        agency.
    ``(b) Judicial Review.--
            ``(1) In general.--If any State is dissatisfied with the 
        Secretary's final action with respect to the eligibility of the 
        State under section 612, such State may, not later than 60 days 
        after notice of such action, file with the United States court 
        of appeals for the circuit in which such State is located a 
        petition for review of that action. A copy of the petition 
        shall be forthwith transmitted by the clerk of the court to the 
        Secretary. The Secretary thereupon shall file in the court the 
        record of the proceedings upon which the Secretary's action was 
        based, as provided in section 2112 of title 28, United States 
        Code.
            ``(2) Jurisdiction; review by united states supreme 
        court.--Upon the filing of such petition, the court shall have 
        jurisdiction to affirm the action of the Secretary or to set it 
        aside, in whole or in part. The judgment of the court shall be 
        subject to review by the Supreme Court of the United States 
        upon certiorari or certification as provided in section 1254 of 
        title 28, United States Code.
            ``(3) Standard of review.--The findings of fact by the 
        Secretary, if supported by substantial evidence, shall be 
        conclusive, but the court, for good cause shown, may remand the 
        case to the Secretary to take further evidence, and the 
        Secretary may thereupon make new or modified findings of fact 
        and may modify the Secretary's previous action, and shall file 
        in the court the record of the further proceedings. Such new or 
        modified findings of fact shall likewise be conclusive if 
        supported by substantial evidence.

``SEC. 617. ADMINISTRATION.

    ``(a) Responsibilities of Secretary.--In carrying out this part, 
the Secretary shall--
            ``(1) cooperate with, and (directly or by grant or 
        contract) furnish technical assistance necessary to, the State 
        in matters relating to--
                    ``(A) the education of children with disabilities; 
                and
                    ``(B) carrying out this part; and
            ``(2) provide short-term training programs and institutes.
    ``(b) Rules and Regulations.--In carrying out the provisions of 
this part, the Secretary 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.
    ``(c) Confidentiality.--The Secretary shall take appropriate 
action, in accordance with the provisions of section 444 of the General 
Education Provisions Act (20 U.S.C. 1232g), to assure the protection of 
the confidentiality of any personally identifiable data, information, 
and records collected or maintained by the Secretary and by State and 
local educational agencies pursuant to the provisions of this part.
    ``(d) Personnel.--The Secretary is authorized to hire qualified 
personnel necessary to conduct data collection and evaluation 
activities authorized by subsection (a) and section 618 without regard 
to the provisions of title 5, United States Code, relating to 
appointments in the competitive service and without regard to chapter 
51 and subchapter III of chapter 53 of such title relating to 
classification and general schedule pay rates, except that no more than 
twenty such personnel shall be employed at any time.

``SEC. 618. PROGRAM INFORMATION.

    ``(a) In General.--Each State that receives assistance under this 
part, and the Secretary of the Interior, shall provide data, which may 
be based on a sampling of data, each year to the Secretary on--
            ``(1) the number of children, categorized by race, 
        ethnicity, gender, and disability, who are receiving--
                    ``(A) a free appropriate public education; or
                    ``(B) early intervention services because--
                            ``(i) such children have developmental 
                        delays; or
                            ``(ii) such children have a diagnosed 
                        physical or mental condition that has a high 
                        probability of resulting in developmental 
                        delay;
            ``(2) the progress of the State, and of the children with 
        disabilities in the State, toward meeting the goals established 
        under section 612(14);
            ``(3) the types of early intervention services provided to 
        such children;
            ``(4) the number of children with disabilities, categorized 
        by race, ethnicity, gender, and disability--
                    ``(A) participating in regular education programs;
                    ``(B) in separate classes, separate schools or 
                facilities, or public or private residential 
                facilities;
                    ``(C) who have been otherwise removed from the 
                regular education environment; and
                    ``(D) in various early intervention settings;
            ``(5) for each year of age from age 14 to 21, the number of 
        children with disabilities, categorized by race, ethnicity, 
        gender, and disability, who, because of program completion or 
        for other reasons, stopped receiving special education, and the 
        reasons why such children stopped receiving such special 
        education;
            ``(6)(A) the number of children with disabilities, 
        categorized by race, ethnicity, gender, and disability, who, 
        under section 615(k), are removed to an interim alternative 
        educational setting;
            ``(B) the acts or items precipitating such removals; and
            ``(C) the number of children with disabilities who are 
        expelled from school without receiving services; and
            ``(7) any other information required by the Secretary.
    ``(b) Disproportionality.--
            ``(1) In general.--Each State that receives assistance 
        under this part, and the Secretary of the Interior, shall 
        provide for the collection and examination of data to determine 
        if significant disproportionality based on race is occurring in 
        the State with respect to--
                    ``(A) the identification of children as children 
                with disabilities, including the identification of 
                children as children with disabilities in accordance 
                with a particular impairment described in section 
                602(3); and
                    ``(B) the placement in particular educational 
                settings of such children.
            ``(2) Review and revision of policies, practices, and 
        procedures.--In the case of a determination of significant 
        disproportionality with respect to the identification of 
        children as children with disabilities, or the placement in 
        particular educational settings of such children, in accordance 
        with paragraph (1), the State or the Secretary of the Interior, 
        as the case may be, shall provide for the review and, if 
        appropriate, revision of the policies, procedures, and 
        practices used in such identification or placement to ensure 
        that such policies, procedures, and practices comply with the 
        requirements of this Act.

``SEC. 619. PRESCHOOL GRANTS.

    ``(a) In General.--The Secretary shall provide grants under this 
section to assist States to provide special education and related 
services, in accordance with this part--
            ``(1) to children with disabilities aged 3 to 5, inclusive; 
        and
            ``(2) at the State's discretion, to 2-year-old children 
        with disabilities who will turn 3 during the school year.
    ``(b) Eligibility.--A State shall be eligible for a grant under 
this section if such State--
            ``(1) is eligible under section 612 to receive a grant 
        under this part; and
            ``(2) makes a free appropriate public education available 
        to all children with disabilities, aged 3 to 5, inclusive, 
        residing in the State.
    ``(c) Amount.--
            ``(1) In general.--From the amount appropriated for any 
        fiscal year pursuant to the authorization of appropriations 
        under subsection (m), the Secretary shall allot to each 
        eligible State the amount it received for fiscal year 1996 
        under this section (as this section was in effect on the day 
        before the date of the enactment of the IDEA Improvement Act of 
        1996).
            ``(2) Insufficient funds.--
                    ``(A) In general.--If the amount appropriated under 
                subsection (m) for a fiscal year is insufficient to 
                make the full allotments described in paragraph (1), 
                the Secretary shall--
                            ``(i) first, reduce the allocation to any 
                        State whose number of children aged 3 to 5, 
                        inclusive, is less than the number of such 
                        children in such State in fiscal year 1995 by 
                        the same percentage by which such number of 
                        children declined from the number of children 
                        in fiscal year 1995; and
                            ``(ii) second, if necessary, ratably reduce 
                        the allocations of all States, including those 
                        allocations reduced under clause (i).
                    ``(B) Availability of additional funds.--If 
                additional funds become available to make allocations 
                under this section, the allocations that were reduced 
                under subparagraph (A) shall be increased on the same 
                basis as such allocations were reduced.
    ``(d) Allotment of Remaining Funds.--After making allotments under 
subsection (c), the Secretary shall allot any remaining funds to 
eligible States on the basis of their relative population of children 
aged 3 to 5, inclusive.
    ``(e) Special Rule With Respect to Puerto Rico.--Notwithstanding 
any other provision of this subsection, the amount allotted to Puerto 
Rico for a fiscal year shall bear the same or lower proportion to the 
amount appropriated pursuant to subsection (m) as the amount received 
by Puerto Rico under this section for fiscal year 1996 bears to the 
aggregate of the amounts received by all States under this section for 
fiscal year 1996.
    ``(f) Determination of Population Figures.--For the purpose of 
providing grants under this section, the Secretary shall use the most 
recent population data that are available and satisfactory to the 
Secretary.
    ``(g) Reservation for State Activities.--A State may reserve not 
more than 25 percent of the amount allotted to the State under this 
section for a fiscal year for administration and other State-level 
activities in accordance with subsections (h) and (i).
    ``(h) State Administration.--
            ``(1) In general.--A State may use up to 3 percent of the 
        amount allotted to the State under this section for a fiscal 
        year for the purpose of administering this section, including 
        the coordination of activities under this part with, and 
        providing technical assistance to, other programs that provide 
        services to children with disabilities.
            ``(2) Use of amounts for administration of part c.--If the 
        State educational agency is the lead agency for the State under 
        part C, amounts described in paragraph (1) may also be used for 
        the administration of such part C.
    ``(i) Other State-Level Activities.--Each State shall use any funds 
it retains under subsection (g) and does not use for administration 
under subsection (h)--
            ``(1) for support services (including establishing and 
        implementing the mediation process required by section 615(d)), 
        which may benefit children with disabilities younger than 3 or 
        older than 5 as long as those services also benefit children 
        with disabilities aged 3 to 5, inclusive;
            ``(2) for direct services for children eligible for 
        services under this section;
            ``(3) to develop a State improvement plan under part D;
            ``(4) for activities at the State and local levels to meet 
        the performance goals established by the State under section 
        612(a)(14) and to support implementation of the State 
        improvement plan under part D if the State receives funds under 
        that part; or
            ``(5) to supplement other funds used to develop and 
        implement a Statewide coordinated services system designed to 
        improve results for children and families, including children 
        with disabilities and their families, but not to exceed one 
        percent of the amount received by the State under this section 
        for a fiscal year.
    ``(j) Subgrants to Local Educational Agencies.--
            ``(1) Requirement to make subgrants.--Each State that 
        receives a grant under this section for any fiscal year shall 
        distribute at least 75 percent of the grant funds to local 
        educational agencies in the State, and to State agencies that 
        received funds under section 614A(a) (as such section was in 
        effect on the day before the date of the enactment of the IDEA 
        Improvement Act of 1996) for fiscal year 1996, that have 
        established their eligibility under section 613.
            ``(2) Methods of distribution.--A State may distribute 
        funds under paragraph (1) on the basis of--
                    ``(A) total school age population;
                    ``(B) school enrollment;
                    ``(C) numbers of children with disabilities aged 3 
                to 5, inclusive, receiving a free appropriate public 
                education;
                    ``(D) allocations for previous fiscal years;
                    ``(E) any two or more of the factors described in 
                subparagraphs (A) through (D); or
                    ``(F) poverty, in combination with one or more of 
                the factors described in subparagraphs (A) through (D).
    ``(k) Part C Inapplicable.--Part C of this Act does not apply to 
any child with a disability receiving a free appropriate public 
education, in accordance with this part, with funds received under this 
section.
    ``(l) Prohibition on Consolidation of Grants for Territories.--The 
provisions of section 501 of Public Law 95-134 (48 U.S.C. 1469a; 
relating to the consolidation of one or more grants provided to certain 
territories) shall not apply with respect to amounts provided to a 
territory under a grant under this section.
    ``(m) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated to the 
Secretary such sums as may be necessary.

            ``PART C--INFANTS AND TODDLERS WITH DISABILITIES

``SEC. 631. FINDINGS AND POLICY.

    ``(a) Findings.--The Congress finds that there is an urgent and 
substantial need--
            ``(1) to enhance the development of infants and toddlers 
        with disabilities and to minimize their potential for 
        developmental delay;
            ``(2) to reduce the educational costs to our society, 
        including our Nation's schools, by minimizing the need for 
        special education and related services after infants and 
        toddlers with disabilities reach school age;
            ``(3) to minimize the likelihood of institutionalization of 
        individuals with disabilities and maximize the potential for 
        their independently living in society;
            ``(4) to enhance the capacity of families to meet the 
        special needs of their infants and toddlers with disabilities; 
        and
            ``(5) to enhance the capacity of State and local agencies 
        and service providers to identify, evaluate, and meet the needs 
        of historically underrepresented populations, particularly 
        minority, low-income, inner-city, and rural populations.
    ``(b) Policy.--It is therefore the policy of the United States to 
provide financial assistance to States--
            ``(1) to develop and implement a statewide, comprehensive, 
        coordinated, multidisciplinary, interagency system of early 
        intervention services for infants and toddlers with 
        disabilities and their families;
            ``(2) to facilitate the coordination of payment for early 
        intervention services from Federal, State, local, and private 
        sources (including public and private insurance coverage); and
            ``(3) to enhance their capacity to provide quality early 
        intervention services and expand and improve existing early 
        intervention services being provided to infants and toddlers 
        with disabilities and their families.

``SEC. 632. DEFINITIONS.

    ``As used in this part:
            ``(1) At-risk infant or toddler.--The term `at-risk infant 
        or toddler' means an individual under 3 years of age who would 
        be at risk of experiencing a substantial developmental delay if 
        early intervention services were not provided to the 
        individual.
            ``(2) Council.--The term `council' means a State 
        interagency coordinating council established under section 641.
            ``(3) Developmental delay.--The term `developmental delay', 
        when used with respect to an individual residing in a State, 
        has the meaning given such term by the State under section 
        635(a)(1).
            ``(4) Early intervention services.--The term `early 
        intervention services' means developmental services which--
                    ``(A) are provided under public supervision;
                    ``(B) are provided at no cost except where Federal 
                or State law provides for a system of payments by 
                families, including a schedule of sliding fees;
                    ``(C) are designed to meet the developmental needs 
                of an infant or toddler with a disability in any one or 
                more of the following areas--
                            ``(i) physical development;
                            ``(ii) cognitive development;
                            ``(iii) communication development;
                            ``(iv) social or emotional development; or
                            ``(v) adaptive development;
                    ``(D) meet the standards of the State in which they 
                are provided, including the requirements of this part;
                    ``(E) include--
                            ``(i) family training, counseling, and home 
                        visits;
                            ``(ii) special instruction;
                            ``(iii) speech-language pathology and 
                        audiology services;
                            ``(iv) occupational therapy;
                            ``(v) physical therapy;
                            ``(vi) psychological services;
                            ``(vii) service coordination services;
                            ``(viii) medical services only for 
                        diagnostic or evaluation purposes;
                            ``(ix) early identification, screening, and 
                        assessment services;
                            ``(x) health services necessary to enable 
                        the infant or toddler to benefit from the other 
                        early intervention services;
                            ``(xi) social work services;
                            ``(xii) vision services;
                            ``(xiii) assistive technology devices and 
                        assistive technology services; and
                            ``(xiv) transportation and related costs 
                        that are necessary to enable an infant or 
                        toddler and the infant's or toddler's family to 
                        receive another service described in this 
                        paragraph;
                    ``(F) are provided by qualified personnel, 
                including--
                            ``(i) special educators;
                            ``(ii) speech-language pathologists and 
                        audiologists;
                            ``(iii) occupational therapists;
                            ``(iv) physical therapists;
                            ``(v) psychologists;
                            ``(vi) social workers;
                            ``(vii) nurses;
                            ``(viii) nutritionists;
                            ``(ix) family therapists;
                            ``(x) orientation and mobility specialists; 
                        and
                            ``(xi) pediatricians and other physicians;
                    ``(G) to the maximum extent appropriate, are 
                provided in natural environments, including the home, 
                and community settings in which children without 
                disabilities participate; and
                    ``(H) are provided in conformity with an 
                individualized family service plan adopted in 
                accordance with section 636.
            ``(5) Infant or toddler with a disability.--The term 
        `infant or toddler with a disability'--
                    ``(A) means an individual under 3 years of age who 
                needs early intervention services because the 
                individual--
                            ``(i) is experiencing developmental delays, 
                        as measured by appropriate diagnostic 
                        instruments and procedures in one or more of 
                        the areas of cognitive development, physical 
                        development, communication development, social 
                        or emotional development, and adaptive 
                        development; or
                            ``(ii) has a diagnosed physical or mental 
                        condition which has a high probability of 
                        resulting in developmental delay; and
                    ``(B) may also include, at a State's discretion, 
                at-risk infants and toddlers.

``SEC. 633. GENERAL AUTHORITY.

    ``The Secretary shall, in accordance with this part, make grants to 
States (from their allocations under section 643) to assist each State 
to maintain and implement a statewide, comprehensive, coordinated, 
multidisciplinary, interagency system to provide early intervention 
services for infants and toddlers with disabilities and their families.

``SEC. 634. ELIGIBILITY.

    ``In order to be eligible for a grant under section 633, a State 
shall demonstrate to the Secretary that the State--
            ``(1) has adopted a policy that appropriate early 
        intervention services are available to all infants and toddlers 
        with disabilities in the State and their families, including 
        Indian infants and toddlers with disabilities and their 
        families residing on a reservation geographically located in 
        the State; and
            ``(2) has in effect a statewide system that meets the 
        requirements of section 635.

``SEC. 635. REQUIREMENTS FOR STATEWIDE SYSTEM.

    ``(a) In General.--A statewide system described in section 633 
shall include, at a minimum, the following components:
            ``(1) A definition of the term `developmental delay' that 
        will be used by the State in carrying out programs under this 
        part.
            ``(2) A timely, comprehensive, multidisciplinary evaluation 
        of the functioning of each infant or toddler with a disability 
        in the State, and a family- directed identification of the 
        needs of each family of such an infant or toddler, to 
        appropriately assist in the development of the infant or 
        toddler.
            ``(3) For each infant or toddler with a disability in the 
        State, an individualized family service plan in accordance with 
        section 636, including service coordination services in 
        accordance with such service plan.
            ``(4) A comprehensive child find system, consistent with 
        part B, including a system for making referrals to service 
        providers that includes timelines and provides for 
        participation by primary referral sources.
            ``(5) A public awareness program focusing on early 
        identification of infants and toddlers with disabilities, 
        including the preparation and dissemination by the lead agency 
        designated or established under paragraph (8) to all primary 
        referral sources, especially hospitals and physicians, of 
        information for parents on the availability of early 
        intervention services, and procedures for determining the 
        extent to which such sources disseminate such information to 
        parents of infants and toddlers.
            ``(6) A central directory which includes information on 
        early intervention services, resources, and experts available 
        in the State and research and demonstration projects being 
        conducted in the State.
            ``(7) A comprehensive system of personnel development, 
        including the training of paraprofessionals and the training of 
        primary referral sources respecting the basic components of 
        early intervention services available in the State, that is 
        consistent with the comprehensive system of personnel 
        development described in section 612(a)(13) (or with the 
        personnel development requirements for State improvement plans 
        under section 683) and may include--
                    ``(A) implementing innovative strategies and 
                activities for the recruitment and retention of early 
                education service providers;
                    ``(B) promoting the preparation of early 
                intervention providers who are fully and appropriately 
                qualified to provide early intervention services under 
                this part;
                    ``(C) training personnel to work in rural and inner 
                city areas; and
                    ``(D) training personnel to coordinate transition 
                services for infants and toddlers served under this 
                part from an early intervention program under this part 
                to preschool or other appropriate services.
            ``(8) Policies and procedures relating to the establishment 
        and maintenance of standards to ensure that personnel necessary 
        to carry out this part are appropriately and adequately 
        prepared and trained, including--
                    ``(A) the establishment and maintenance of 
                standards which are consistent with any State approved 
                or recognized certification, licensing, registration, 
                or other comparable requirements which apply to the 
                area in which such personnel are providing early 
                intervention services; and
                    ``(B) subject to subsection (b), to the extent such 
                standards are not based on the highest requirements in 
                the State applicable to a specific profession or 
                discipline, the steps the State is taking to require 
                the retraining or hiring of personnel that meet 
                appropriate professional requirements in the State;
        except that nothing in this part, including this paragraph, 
        prohibits the use of paraprofessionals and assistants who are 
        appropriately trained and supervised, in accordance with State 
        law, regulations, or written policy, to assist in the provision 
        of early intervention services to infants and toddlers with 
        disabilities under this part.
            ``(9) A single line of responsibility in a lead agency 
        designated or established by the Governor for carrying out--
                    ``(A) the general administration and supervision of 
                programs and activities receiving assistance under 
                section 633, and the monitoring of programs and 
                activities used by the State to carry out this part, 
                whether or not such programs or activities are 
                receiving assistance made available under section 633, 
                to ensure that the State complies with this part;
                    ``(B) the identification and coordination of all 
                available resources within the State from Federal, 
                State, local and private sources;
                    ``(C) the assignment of financial responsibility in 
                accordance with section 637(a)(1) to the appropriate 
                agencies;
                    ``(D) the development of procedures to ensure that 
                services are provided to infants and toddlers and their 
                families under this part in a timely manner pending the 
                resolution of any disputes among public agencies or 
                service providers;
                    ``(E) the resolution of intra- and interagency 
                disputes; and
                    ``(F) the entry into formal interagency agreements 
                that define the financial responsibility of each agency 
                for paying for early intervention services (consistent 
                with State law) and procedures for resolving disputes 
                and that include all additional components necessary to 
                ensure meaningful cooperation and coordination.
            ``(10) A policy pertaining to the contracting or making of 
        other arrangements with service providers to provide early 
        intervention services in the State, consistent with the 
        provisions of this part, including the contents of the 
        application used and the conditions of the contract or other 
        arrangements.
            ``(11) A procedure for securing timely reimbursement of 
        funds used under this part in accordance with section 640(a).
            ``(12) Procedural safeguards with respect to programs under 
        this part, as required by section 639.
            ``(13) A system for compiling data requested by the 
        Secretary under section 618 that relates to this part.
            ``(14) A State interagency coordinating council that meets 
        the requirements of section 641.
    ``(b) Modification of Personnel Requirement.--If a State determines 
that the requirement of subsection (a)(7)(B) would significantly 
inhibit the ability of the State to contract with, or employ, an 
appropriate number and types of personnel to provide early intervention 
services to infants and toddlers with disabilities in a geographic 
region, the State may, subject to public notice and comment, 
temporarily suspend the requirement for the region, in a manner 
consistent with State law and for a period not exceeding 3 years, with 
respect to the most qualified available individuals in shortage areas 
who are making annual progress in applicable coursework.

``SEC. 636. INDIVIDUALIZED FAMILY SERVICE PLAN.

    ``(a) Assessment and Program Development.--A statewide system 
described in section 633 shall provide, at a minimum, for each infant 
or toddler with a disability, and the infant's or toddler's family, to 
receive--
            ``(1) a multidisciplinary assessment of the unique 
        strengths and needs of the infant or toddler and the 
        identification of services appropriate to meet such needs;
            ``(2) a family-directed assessment of the resources, 
        priorities, and concerns of the family and the identification 
        of the supports and services necessary to enhance the family's 
        capacity to meet the developmental needs of the infant or 
        toddler; and
            ``(3) a written individualized family service plan 
        developed by a multidisciplinary team, including the parents, 
        as required by subsection (e).
    ``(b) Periodic Review.--The individualized family service plan 
shall be evaluated once a year and the family shall be provided a 
review of the plan at 6-month intervals (or more often where 
appropriate based on infant or toddler and family needs).
    ``(c) Promptness After Assessment.--The individualized family 
service plan shall be developed within a reasonable time after the 
assessment required by subsection (a)(1) is completed. With the 
parents' consent, early intervention services may commence prior to the 
completion of such assessment.
    ``(d) Content of Plan.--The individualized family service plan 
shall be in writing and contain--
            ``(1) a statement of the infant's or toddler's present 
        levels of physical development, cognitive development, 
        communication development, social or emotional development, and 
        adaptive development, based on objective criteria;
            ``(2) a statement of the family's resources, priorities, 
        and concerns relating to enhancing the development of the 
        family's infant or toddler with a disability;
            ``(3) a statement of the major outcomes expected to be 
        achieved for the infant or toddler and the family, and the 
        criteria, procedures, and timelines used to determine the 
        degree to which progress toward achieving the outcomes is being 
        made and whether modifications or revisions of the outcomes or 
        services are necessary;
            ``(4) a statement of specific early intervention services 
        necessary to meet the unique needs of the infant or toddler and 
        the family, including the frequency, intensity, and method of 
        delivering services;
            ``(5) a statement of the natural environments in which 
        early intervention services shall appropriately be provided;
            ``(6) the projected dates for initiation of services and 
        the anticipated duration of such services;
            ``(7) the identification of the service coordinator from 
        the profession most immediately relevant to the infant's or 
        toddler's or family's needs (or who is otherwise qualified to 
        carry out all applicable responsibilities under this part) who 
        will be responsible for the implementation of the plan and 
        coordination with other agencies and persons; and
            ``(8) the steps to be taken to support the transition of 
        the toddler with a disability to preschool or other appropriate 
        services.
    ``(e) Parental Consent.--The contents of the individualized family 
service plan shall be fully explained to the parents and informed 
written consent from such parents shall be obtained prior to the 
provision of early intervention services described in such plan. If 
such parents do not provide such consent with respect to a particular 
early intervention service, then the early intervention services to 
which such consent is obtained shall be provided.

``SEC. 637. STATE APPLICATION AND ASSURANCES.

    ``(a) Application.--A State desiring to receive a grant under 
section 633 shall submit an application to the Secretary at such time 
and in such manner as the Secretary may reasonably require. Such 
application shall contain--
            ``(1) a designation of the lead agency in the State that 
        will be responsible for the administration of funds provided 
        under section 633;
            ``(2) a designation of a person responsible for assigning 
        financial responsibility among appropriate agencies;
            ``(3) information demonstrating eligibility of the State 
        under section 634, including--
                    ``(A) information demonstrating to the Secretary's 
                satisfaction that the State has in effect the statewide 
                system required by section 633; and
                    ``(B) a description of services to be provided to 
                infants and toddlers with disabilities and their 
                families through the system;
            ``(4) a description of the uses for which funds will be 
        expended in accordance with this part;
            ``(5) a description of the procedure used to ensure that 
        resources are made available under this part for all geographic 
        areas within the State;
            ``(6) a description of State policies and procedures that 
        ensure that, prior to the adoption by the State of any other 
        policy or procedure necessary to meet the requirements of this 
        part, there are public hearings, adequate notice of the 
        hearings, and an opportunity for comment available to the 
        general public, including individuals with disabilities and 
        parents of infants and toddlers with disabilities;
            ``(7) a description of the policies and procedures to be 
        used--
                    ``(A) to ensure a smooth transition for toddlers 
                receiving early intervention services under this part 
                to preschool or other appropriate services, including a 
                description of how--
                            ``(i) the families of such toddlers will be 
                        included in the transition plans required by 
                        subparagraph (C); and
                            ``(ii) the lead agency designated or 
                        established under section 635(a) will--
                                    ``(I) notify the local educational 
                                agency for the area in which such a 
                                child resides that the child will 
                                shortly reach the age of eligibility 
                                for preschool services under part B, as 
                                determined in accordance with State 
                                law;
                                    ``(II) in the case of such a child 
                                who may be eligible for such preschool 
                                services, with the approval of the 
                                family of the child, convene a 
                                conference among the lead agency, the 
                                family, and the local educational 
                                agency at least 90 days (and at the 
                                discretion of all such parties, up to 6 
                                months) before the child is eligible 
                                for the preschool services, to discuss 
                                any such services that the child may 
                                receive; and
                                    ``(III) in the case of such a child 
                                who may not be eligible for such 
                                preschool services, with the approval 
                                of the family, make reasonable efforts 
                                to convene a conference among the lead 
                                agency, the family, and providers of 
                                other appropriate services for children 
                                who are not eligible for preschool 
                                services under part B, to discuss the 
                                appropriate services that the child may 
                                receive;
                    ``(B) to review the child's program options for the 
                period from the child's third birthday through the 
                remainder of the school year; and
                    ``(C) to establish a transition plan; and
            ``(8) such other information and assurances as the 
        Secretary may reasonably require.
    ``(b) Assurances.--The application described in subsection (a) 
shall contain the following:
            ``(1) A satisfactory assurance that the State will--
                    ``(A) make such reports in such form and containing 
                such information as the Secretary may require to carry 
                out the Secretary's functions under this part; and
                    ``(B) keep such records and afford such access 
                thereto as the Secretary may find necessary to assure 
                the correctness and verification of such reports and 
                proper disbursement of Federal funds under this part.
            ``(2) A satisfactory assurance that Federal funds made 
        available under section 633 will be used to supplement and 
        increase the level of State and local funds expended for 
        infants and toddlers with disabilities and their families under 
        this part and in no case to supplant such State and local 
        funds.
            ``(3) Such other information and assurances as the 
        Secretary may reasonably require by regulation.
    ``(c) Standard for Disapproval of Application.--The Secretary may 
not disapprove such an application unless the Secretary determines, 
after notice and opportunity for a hearing, that the application fails 
to comply with the requirements of this section.
    ``(d) Subsequent State Application.--If a State has on file with 
the Secretary a policy, procedure, or assurance that demonstrates that 
the State meets a requirement of this section, including any policy or 
procedure filed under part H (as in effect before the date of the 
enactment of the IDEA Improvement Act of 1996), the Secretary shall 
consider the State to have met the requirement for purposes of 
receiving a grant under this part.
    ``(e) Modification of Application.--An application submitted by a 
State in accordance with this section shall remain in effect until the 
State submits to the Secretary such modifications as the State 
determines necessary. This section shall apply to a modification of an 
application to the same extent and in the same manner as this section 
applies to the original application.

``SEC. 638. USES OF FUNDS.

    ``In addition to using funds provided under section 633 to maintain 
and implement the statewide system required by such section, a State 
may use such funds--
            ``(1) for direct early intervention services for infants 
        and toddlers with disabilities, and their families, under this 
        part that are not otherwise funded through other public or 
        private sources;
            ``(2) to expand and improve on services for infants and 
        toddlers and their families under this part that are otherwise 
        available; and
            ``(3) to provide a free appropriate public education, in 
        accordance with part B, to children with disabilities from 
        their third birthday to the beginning of the following school 
        year.

``SEC. 639. PROCEDURAL SAFEGUARDS.

    ``(a) Minimum Procedures.--The procedural safeguards required to be 
included in a statewide system under section 635(a)(10) shall provide, 
at a minimum, the following:
            ``(1) The timely administrative resolution of complaints by 
        parents. Any party aggrieved by the findings and decision 
        regarding an administrative complaint shall have the right to 
        bring a civil action with respect to the complaint in any State 
        court of competent jurisdiction or in a district court of the 
        United States without regard to the amount in controversy. In 
        any action brought under this paragraph, the court shall 
        receive the records of the administrative proceedings, shall 
        hear additional evidence at the request of a party, and, basing 
        its decision on the preponderance of the evidence, shall grant 
        such relief as the court determines is appropriate.
            ``(2) The right to confidentiality of personally 
        identifiable information, including the right of parents to 
        written notice of and written consent to the exchange of such 
        information among agencies consistent with Federal and State 
        law.
            ``(3) The right of the parents to determine whether they, 
        their infant or toddler, or other family members will accept or 
        decline any early intervention service under this part in 
        accordance with State law without jeopardizing other early 
        intervention services under this part.
            ``(4) The opportunity for parents to examine records 
        relating to assessment, screening, eligibility determinations, 
        and the development and implementation of the individualized 
        family service plan.
            ``(5) Procedures to protect the rights of the infant or 
        toddler whenever the parents of the child are not known or 
        cannot be found or the child is a ward of the State, including 
        the assignment of an individual (who shall not be an employee 
        of the State or any person, or any employee of a person, 
        providing early intervention services to the infant or toddler 
        or any family member of the infant or toddler) to act as a 
        surrogate for the parents.
            ``(6) Written prior notice to the parents of the infant or 
        toddler with a disability whenever the State agency or service 
        provider proposes to initiate or change or refuses to initiate 
        or change the identification, evaluation, placement, or the 
        provision of appropriate early intervention services to the 
        infant or toddler with a disability.
            ``(7) Procedures designed to assure that the notice 
        required by paragraph (6) fully informs the parents, in the 
        parents' native language, unless it clearly is not feasible to 
        do so, of all procedures available pursuant to this section.
            ``(8) The right of parents to use mediation in accordance 
        with section 615(e), except that--
                    ``(A) any reference in such section to a State 
                educational agency shall be considered to be a 
                reference to a State's lead agency established or 
                designated under section 635(a)(8);
                    ``(B) any reference in such section to a local 
                educational agency shall be considered to be a 
                reference to a local service provider or the State's 
                lead agency under this part, as the case may be; and
                    ``(C) any reference in such section to the 
                provision of free appropriate public education to 
                children with disabilities shall be considered to be a 
                reference to the provision of appropriate early 
                intervention services to infants and toddlers with 
                disabilities.
    ``(b) Services During Pendency of Proceedings.--During the pendency 
of any proceeding or action involving a complaint by the parents of an 
infant or toddler with a disability, unless the State agency and the 
parents otherwise agree, the infant or toddler shall continue to 
receive the appropriate early intervention services currently being 
provided or, if applying for initial services, shall receive the 
services not in dispute.

``SEC. 640. PAYOR OF LAST RESORT.

    ``(a) Nonsubstitution.--Funds provided under section 643 may not be 
used to satisfy a financial commitment for services which would have 
been paid for from another public or private source but for the 
enactment of this part, except that whenever considered necessary to 
prevent a delay in the receipt of appropriate early intervention 
services by an infant, toddler, or family in a timely fashion, funds 
provided under section 643 may be used to pay the provider of services 
pending reimbursement from the agency which has ultimate responsibility 
for the payment.
    ``(b) Reduction of Other Benefits.--Nothing in this part shall be 
construed to permit the State to reduce medical or other assistance 
available or to alter eligibility under title V of the Social Security 
Act (relating to maternal and child health) or title XIX of the Social 
Security Act (relating to medicaid for infants or toddlers with 
disabilities) within the State.

``SEC. 641. STATE INTERAGENCY COORDINATING COUNCIL.

    ``(a) Establishment.--
            ``(1) In general.--A State that desires to receive 
        financial assistance under this part shall establish a State 
        interagency coordinating council.
            ``(2) Appointment.--The council shall be appointed by the 
        Governor. In making appointments to the council, the Governor 
        shall ensure that the membership of the council reasonably 
        represents the population of the State.
            ``(3) Chairperson.--The Governor shall designate a member 
        of the council to serve as the chairperson of the Council, or 
        shall require the council to so designate such a member. Any 
        member of the council who is a representative of the lead 
        agency designated under section 635(b)(8) may not serve as the 
        chairperson of the council.
    ``(b) Composition.--
            ``(1) In general.--The council shall be composed as 
        follows:
                    ``(A) Parents.--At least 20 percent of the members 
                shall be parents of infants or toddlers with 
                disabilities or children with disabilities aged 12 or 
                younger, with knowledge of, or experience with, 
                programs for infants and toddlers with disabilities. At 
                least one such member shall be a parent of an infant or 
                toddler with a disability or a child with a disability 
                aged 6 or younger.
                    ``(B) Service providers.--At least 20 percent of 
                the members shall be public or private providers of 
                early intervention services.
                    ``(C) State legislature.--At least one member shall 
                be from the State legislature.
                    ``(D) Personnel preparation.--At least one member 
                shall be involved in personnel preparation.
                    ``(E) Agency for early intervention services.--At 
                least one member shall be from each of the State 
                agencies involved in the provision of, or payment for, 
                early intervention services to infants and toddlers 
                with disabilities and their families and shall have 
                sufficient authority to engage in policy planning and 
                implementation on behalf of such agencies.
                    ``(F) Agency for preschool services.--At least one 
                member shall be from the State educational agency 
                responsible for preschool services to children with 
                disabilities and shall have sufficient authority to 
                engage in policy planning and implementation on behalf 
                of such agency.
                    ``(G) Agency for insurance.--At least one member 
                shall be from the agency responsible for the State 
                governance of insurance, especially in the area of 
                health insurance.
                    ``(H) Head start agency.--A representative from a 
                Head Start agency or program in the State.
                    ``(I) A representative from a State agency 
                responsible for child care.
            ``(2) Other members.--The council may include other members 
        selected by the Governor, including a representative from the 
        Bureau of Indian Affairs, or where there is no BIA operated or 
        funded school, from the Indian Health Service or the tribe/
        tribal council.
    ``(c) Meetings.--The council shall meet at least quarterly and in 
such places as it deems necessary. The meetings shall be publicly 
announced, and, to the extent appropriate, open and accessible to the 
general public.
    ``(d) Management Authority.--Subject to the approval of the 
Governor, the council may prepare and approve a budget using funds 
under this part to conduct hearings and forums, to reimburse members of 
the council for reasonable and necessary expenses for attending council 
meetings and performing council duties (including child care for parent 
representatives), to pay compensation to a member of the council if 
such member is not employed or must forfeit wages from other employment 
when performing official council business, to hire staff, and to obtain 
the services of such professional, technical, and clerical personnel as 
may be necessary to carry out its functions under this part.
    ``(e) Functions of Council.--
            ``(1) Duties.--The council shall--
                    ``(A) advise and assist the lead agency designated 
                or established under section 635(b)(8) in the 
                performance of the responsibilities set out in such 
                section, particularly the identification of the sources 
                of fiscal and other support for services for early 
                intervention programs, assignment of financial 
                responsibility to the appropriate agency, and the 
                promotion of the interagency agreements;
                    ``(B) advise and assist the lead agency in the 
                preparation of applications and amendments thereto;
                    ``(C) advise and assist the State educational 
                agency regarding the transition of toddlers with 
                disabilities to preschool and other appropriate 
                services; and
                    ``(D) prepare and submit an annual report to the 
                Governor and to the Secretary on the status of early 
                intervention programs for infants and toddlers with 
                disabilities and their families operated within the 
                State.
            ``(2) Authorized activity.--The council may advise and 
        assist the lead agency and the State educational agency 
        regarding the provision of appropriate services for children 
        aged birth to 5, inclusive.
    ``(f) Conflict of Interest.--No member of the council shall cast a 
vote on any matter which would provide direct financial benefit to that 
member or otherwise give the appearance of a conflict of interest under 
State law.

``SEC. 642. FEDERAL ADMINISTRATION.

    ``Sections 616, 617, 618, and 620 shall, to the extent not 
inconsistent with this part, apply to the program authorized by this 
part, except that--
            ``(1) any reference in such sections to a State educational 
        agency shall be considered to be a reference to a State's lead 
        agency established or designated under section 635(a)(8);
            ``(2) any reference in such sections to a local educational 
        agency, educational service agency, or a State agency shall be 
        considered to be a reference to an early intervention service 
        provider under this part; and
            ``(3) any reference to the education of children with 
        disabilities or the education of all children with disabilities 
        shall be considered to be a reference to the provision of 
        appropriate early intervention services to infants and toddlers 
        with disabilities.

``SEC. 643. ALLOCATION OF FUNDS.

    ``(a) Reservation of Funds for Territories.--
            ``(1) In general.--From the sums appropriated to carry out 
        this part for any fiscal year, the Secretary may reserve up to 
        one percent for payments to Guam, American Samoa, the Virgin 
        Islands, and the Commonwealth of the Northern Mariana Islands 
        in accordance with their respective needs.
            ``(2) Consolidation of funds.--The provisions of Public Law 
        95-134, permitting the consolidation of grants to the 
        territories, shall not apply to funds those areas receive under 
        this part.
    ``(b) Payments to Indians.--
            ``(1) In general.--The Secretary shall, subject to this 
        subsection, make payments to the Secretary of the Interior to 
        be distributed to tribes, tribal organizations (as defined 
        under section 4 of the Indian Self-Determination and Education 
        Assistance Act), or consortia of the above entities for the 
        coordination of assistance in the provision of early 
        intervention services by the States to infants and toddlers 
        with disabilities and their families on reservations served by 
        elementary and secondary schools for Indian children operated 
        or funded by the Department of the Interior. The amount of such 
        payment for any fiscal year shall be 1.25 percent of the 
        aggregate of the amount available to all States under this part 
        for such fiscal year.
            ``(2) Allocation.--For each fiscal year, the Secretary of 
        the Interior shall distribute the entire payment received under 
        paragraph (1) by providing to each tribe, tribal organization, 
        or consortium an amount based on the number of infants and 
        toddlers residing on the reservation as determined annually 
        divided by the total of such children served by all tribes, 
        tribal organizations, or consortia.
            ``(3) Information.--To receive a payment under this 
        paragraph, the tribe, tribal organization, or consortia shall 
        submit such information to the Secretary of the Interior as is 
        needed to determine the amounts to be allocated under paragraph 
        (2).
            ``(4) Use of funds.--The funds received by a tribe, tribal 
        organization, or consortia shall be used to assist States in 
        child find, screening, and other procedures for the early 
        identification of Indian children under 3 years of age and for 
        parent training. Such funds may also be used to provide early 
        intervention services in accordance with this part. Such 
        activities may be carried out directly or through contracts or 
        cooperative agreements with the BIA, local educational 
        agencies, and other public or private nonprofit organizations. 
        The tribe, tribal organization, or consortia is encouraged to 
        involve Indian parents in the development and implementation of 
these activities. The above entities shall, as appropriate, make 
referrals to local, State, or Federal entities for the provision of 
services or further diagnosis.
            ``(5) Reports.--To be eligible to receive a grant under 
        paragraph (2), a tribe, tribal organization, or consortia shall 
        make a biennial report to the Secretary of the Interior of 
        activities undertaken under this subsection, including the 
number of contracts and cooperative agreements entered into, the number 
of children contacted and receiving services for each year, and the 
estimated number of children needing services during the 2 years 
following the year in which the report is made. The Secretary of the 
Interior shall include a summary of this information on a biennial 
basis to the Secretary of Education along with such other information 
as required under section 611(f)(3)(D). The Secretary of Education may 
require any additional information from the Secretary of the Interior.
            ``(6) Prohibited uses of funds.--None of the funds under 
        this subsection may be used by the Secretary of the Interior 
        for administrative purposes, including child count, and the 
        provision of technical assistance.
    ``(c) State Allotments.--
            ``(1) In general.--Except as provided in paragraphs (2), 
        (3), and (4), from the funds remaining for each fiscal year 
        after the reservation and payments under subsections (a) and 
        (b), the Secretary shall first allot to each State an amount 
        that bears the same ratio to the amount of such remainder as 
        the number of infants and toddlers in the State bears to the 
        number of infants and toddlers in all States.
            ``(2) Minimum allotments.--Except as provided in paragraphs 
        (3) and (4), no State shall receive an amount under this 
        section for any fiscal year that is less than the greatest of--
                    ``(A) one-half of one percent of the remaining 
                amount described in paragraph (1); or
                    ``(B) $500,000.
            ``(3) Special rule for 1997 through 1999.--
                    ``(A) In general.--Except as provided in paragraph 
                (4), no State may receive an amount under this section 
                for any of the fiscal years 1997 through 1999 that is 
                less than the sum of the amount such State received for 
                fiscal year 1994 under--
                            ``(i) part H (as in effect on the day 
                        before the date of the enactment of the IDEA 
                        Improvement Act of 1996); and
                            ``(ii) subpart 2 of part D of chapter 1 of 
                        title I of the Elementary and Secondary 
                        Education Act of 1965 (as in effect on the day 
                        before the date of the enactment of the 
                        Improving America's Schools Act of 1994) for 
                        children with disabilities under 3 years of 
                        age.
                    ``(B) Exception.--If, for fiscal year 1998 or 1999, 
                the number of infants and toddlers in a State, as 
                determined under paragraph (1), is less than the number 
                of infants and toddlers so determined for fiscal year 
                1994, the amount determined under subparagraph (A) for 
                the State shall be reduced by the same percentage by 
                which the number of such infants and toddlers so 
                declined.
            ``(4) Ratable reduction.--
                    ``(A) In general.--If the sums made available under 
                this part for any fiscal year are insufficient to pay 
                the full amounts that all States are eligible to 
                receive under this subsection for such year, the 
                Secretary shall ratably reduce the allocations to such 
                States for such year.
                    ``(B) Additional funds.--If additional funds become 
                available for making payments under this subsection for 
                a fiscal year, allocations that were reduced under 
                subparagraph (A) shall be increased on the same basis 
                as such allocations were reduced.
            ``(5) Definitions.--For the purpose of this subsection--
                    ``(A) the terms `infants' and `toddlers' mean 
                children under 3 years of age; and
                    ``(B) the term `State' means each of the 50 States, 
                the District of Columbia, and the Commonwealth of 
                Puerto Rico.
    ``(d) Reallotment of Funds.--If a State elects not to receive its 
allotment under subsection (c), the Secretary shall reallot, among the 
remaining States, amounts from such State in accordance with such 
subsection.

``SEC. 644. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there are authorized 
to be appropriated such sums as may be necessary for each of the fiscal 
years 1997 through 2001.

  ``PART D--NATIONAL ACTIVITIES TO IMPROVE EDUCATION OF CHILDREN WITH 
                              DISABILITIES

``SEC. 651. PURPOSE OF PART.

    ``The purpose of this part is to support national, State, and local 
activities aimed at improving educational, early intervention, and 
transitional services and opportunities for children with disabilities.

``SEC. 652. ELIGIBILITY FOR FINANCIAL ASSISTANCE.

    ``No State, State educational agency, local educational agency, 
educational service agency, or other public institution or agency may 
receive a grant, contract, or cooperative agreement under this part 
which relates exclusively to programs, projects, and activities for 
children aged 3 to 5, inclusive, unless the State, or, in the case of 
an agency or institution, the State in which the agency or institution 
is located, is eligible to receive a grant under section 619.

 ``Subpart 1--General Provisions and National Research and Improvement 
                               Activities

``SEC. 661. COMPREHENSIVE PLAN.

    ``(a) In General.--The Secretary shall develop and implement a 
comprehensive plan for ongoing activities conducted by the Secretary 
under this part.
    ``(b) Use of Knowledge in Developing Plan.--To the maximum extent 
appropriate, the Secretary shall ensure that the plan is based upon the 
knowledge gained from research on practices that have been proven 
effective in improving the achievement of children with disabilities.
    ``(c) Consultation.--In developing the plan, the Secretary shall 
consult the following persons:
            ``(1) Individuals with disabilities.
            ``(2) Parents of children with disabilities.
            ``(3) Representatives of State and local educational 
        agencies and educational service agencies.
            ``(4) Private schools.
            ``(5) Institutions of higher education.
            ``(6) Other Federal agencies.
            ``(7) The National Council on Disability.
            ``(8) National organizations with an interest in, and 
        expertise in, providing services to children with disabilities 
        and their families.
            ``(9) Any other professionals determined appropriate by the 
        Secretary.
    ``(d) Deadline.--The plan shall be developed not later than the 
date that is 12 months after the date of the enactment of the IDEA 
Improvement Act of 1996.

``SEC. 662. PRIORITIES.

    ``(a) In General.--In making awards under this part, the Secretary 
may, without regard to the rule making procedures under section 553 of 
title 5, United States Code, limit such awards to, or otherwise give 
priority to--
            ``(1) projects that address the improvement of the academic 
        performance of children with disabilities;
            ``(2) projects that address one or more--
                    ``(A) age ranges;
                    ``(B) disabilities;
                    ``(C) grades in school;
                    ``(D) types of educational placements or early 
                intervention environments;
                    ``(E) types of services; or
                    ``(F) content areas such as reading;
            ``(3) projects that address the needs of children based on 
        the severity of their disability;
            ``(4) projects that address the needs of--
                    ``(A) low-achieving students;
                    ``(B) underserved populations;
                    ``(C) children from low-income families;
                    ``(D) children with limited English proficiency;
                    ``(E) unserved and underserved areas;
                    ``(F) particular types of geographic areas, such as 
                inner-city or rural areas; or
                    ``(G) institutionalized children in juvenile and 
                adult correctional institutions;
            ``(5) any activity that is expressly authorized in this 
        title;
            ``(6) a large-scale longitudinal study designed to provide 
        information on the long-term impact of education agency 
        disciplinary procedures on children with disabilities;
            ``(7) research and development projects including--
                    ``(A) projects that advance knowledge about--
                            ``(i) teaching and learning practices, and 
                        assessment techniques, instruments, and 
                        strategies, including behavioral strategies, 
                        that lead to improved results for children with 
                        disabilities;
                            ``(ii) the developmental and learning 
                        characteristics of children with disabilities 
                        in a manner that will improve the design and 
                        effectiveness of interventions and instruction; 
                        or
                            ``(iii) the coordination of education with 
                        health and social services;
                    ``(B) large-scale longitudinal studies designed to 
                produce information on the long-term impact of early 
                intervention and education on results for individuals 
                with disabilities;
                    ``(C) model demonstration projects to apply and 
                test research findings in typical service settings to 
                determine the usability, effectiveness, and general 
                applicability of such research findings in such areas 
                as improving instructional methods, curricula, and 
                tools such as textbooks, media, and other materials; 
                and
                    ``(D) projects which apply research and other 
                knowledge to improve educational results for children 
                with disabilities by--
                            ``(i) synthesizing useful research and 
                        educational products;
                            ``(ii) ensuring that such research and 
                        products are in appropriate formats for 
                        distribution to administrators, teachers, 
                        parents, and individuals with disabilities; or
                            ``(iii) making such research and products 
                        available through libraries, electronic 
                        networks, parent training projects, and other 
                        information sources, including the National 
                        Information Dissemination System under part D 
                        of title IX of Public Law 103-227;
            ``(8) projects which provide technical assistance to--
                    ``(A) States--
                            ``(i) to link States to other technical 
                        assistance resources, including special and 
                        general education resources; or
                            ``(ii) in gaining access to information, 
                        including information on research and best 
                        practices; or
                    ``(B) State educational agencies, State lead 
                agencies serving infants and toddlers with disabilities 
                under part C, and other organizations and agencies that 
                play a critical role in providing for the participation 
                of children with disabilities in State and local 
                assessments;
            ``(9) activities to produce, and promote the use of, 
        knowledge to address the special needs of children who have a 
        high likelihood of needing special education and related 
        services in order to reduce, through early intervention, the 
        need for special education services later in life;
            ``(10) educational media activities including--
                    ``(A) through September 30, 1998, video 
                description, open captioning, or closed captioning;
                    ``(B) video description, open captioning, or closed 
                captioning of educational, news, and informational 
                materials;
                    ``(C) through September 30, 1998, distribution of 
                captioned and described materials and videos;
                    ``(D) distribution of captioned and described 
                educational, news, and informational materials and 
                videos; and
                    ``(E) recording free educational materials, 
                including textbooks, for visually impaired and print-
                disabled students in elementary, secondary, post-
                secondary, and graduate schools; and
            ``(11) projects to assist institutions of higher education 
        in appropriately serving students with disabilities, including 
        deaf students.
    ``(b) Definition.--As used in this section, the term `low-incidence 
disability' means--
            ``(1) a visual impairment, a hearing impairment, or 
        simultaneous visual and hearing impairments;
            ``(2) a significant cognitive impairment; or
            ``(3) any impairment for which a small number of personnel, 
        with highly specialized skills and knowledge, are needed 
        nationwide in order for all children with disabilities who have 
        the impairment to receive early intervention services or a free 
        appropriate public education.
    ``(c) Report.--If the Secretary awards a grant, contract, or 
cooperative agreement under this part prior to February 1, 1998 with 
respect to an educational media activity described in subparagraph (A) 
or (C) of subsection (a)(10), the Secretary, after consulting with the 
chairman of the Federal Communications Commission, shall submit to the 
Committee on Economic and Educational Opportunities of the House of 
Representatives and the Committee on Labor and Human Resources of the 
Senate, not later than April 15, 1998, a report on the progress that 
the Federal Communications Commission is making towards meeting the 
requirements imposed on the Commission under section 713 of the 
Communications Act of 1934 (47 U.S.C. 613).

``SEC. 663. PEER REVIEW.

    ``(a) In General.--The Secretary shall use a panel of experts who 
are competent, by virtue of their training, expertise, or experience, 
to evaluate an application under this part that requests more than 
$75,000 in Federal financial assistance.
    ``(b) Composition of Panel.--A majority of a panel described in 
subsection (a) shall be composed of individuals who are not employees 
of the Federal Government.
    ``(c) Payment of Fees and Expenses of Certain Members.--The 
Secretary may use available funds appropriated to carry out this part 
to pay the expenses and fees of panel members who are not employees of 
the Federal Government.

``SEC. 664. ELIGIBLE APPLICANTS.

    ``Except as otherwise provided in this part, the persons who, and 
the agencies that, may apply for receipt of grants, contracts, or 
cooperative agreements under this part are the following:
            ``(1) Institutions of higher education.
            ``(2) State educational agencies.
            ``(3) Local educational agencies.
            ``(4) Educational service agencies.
            ``(5) Other public agencies.
            ``(6) Private nonprofit organizations.
            ``(7) Indian tribes and tribal organizations (as defined 
        under section 4 of the Indian Self-Determination and Education 
        Assistance Act).
            ``(8) For-profit organizations.

``SEC. 665. APPLICANT AND RECIPIENT RESPONSIBILITIES.

    ``(a) General Requirements on Applicants and Recipients.--The 
Secretary may not make a grant to, or enter into a contract or 
cooperative agreement with, a person or agency under this part unless--
            ``(1) the person or agency involves individuals with 
        disabilities, and parents of children with disabilities, in 
        planning, implementing, and evaluating activities conducted 
        under the grant, contract, or agreement;
            ``(2) the person or agency, where appropriate, evaluates 
        the potential for replication and widespread adoption of such 
        activities; and
            ``(3) the person or agency prepares their findings and work 
        product in a format useful for a specific audience specified by 
        the Secretary, such as parents, administrators, teachers, early 
        intervention personnel, related services personnel, or 
        individuals with disabilities.
    ``(b) Additional Requirements Imposed at Discretion of Secretary.--
The Secretary may require that a person who, or agency that, is awarded 
a grant, contract, or cooperative agreement under this part--
            ``(1) assume a portion of the cost of carrying out the 
        grant, contract, or agreement;
            ``(2) disseminate the findings and work product of the 
        person or agency; and
            ``(3) collaborate with other such persons and agencies.

``SEC. 666. INDIRECT COSTS.

    ``The Secretary--
            ``(1) may not permit any recipient of Federal funds under 
        this part to use more than 25 percent of such funds for 
        indirect costs; and
            ``(2) may further limit the extent to which any such 
        recipient may use such funds for such costs.

``SEC. 667. PROGRAM EVALUATION.

    ``The Secretary may use funds appropriated to carry out this part 
to evaluate any activity carried out under this part.

``SEC. 668. NATIONAL ASSESSMENT.

    ``(a) Purpose of Assessment.--The Secretary shall carry out a 
national assessment of activities carried out with Federal funds under 
this title in order--
            ``(1) to determine the effectiveness of the title in 
        achieving the purposes of the title;
            ``(2) to provide information to the President, the 
        Congress, the States, local educational agencies, and the 
        public on how to implement the title more effectively; and
            ``(3) to provide the President and the Congress with 
        information that will be useful in developing legislation to 
        achieve the purposes of this title more effectively.
    ``(b) Consultation.--The Secretary shall plan, review, and conduct 
the national assessment under this section in consultation with 
researchers, State practitioners, local practitioners, parents of 
children with disabilities, individuals with disabilities, and other 
appropriate individuals.
    ``(c) Scope of Assessment.--The national assessment shall examine 
how well schools, local educational agencies, States, other recipients 
of assistance under this title, and the Secretary are achieving the 
purposes of this title, including--
            ``(1) the performance of children with disabilities in 
        general scholastic activities and assessments as compared to 
        nondisabled children;
            ``(2) providing for the participation of children with 
        disabilities in the general education curriculum;
            ``(3) helping children with disabilities make successful 
        transitions from--
                    ``(A) early intervention services to preschool 
                education;
                    ``(B) preschool education to elementary school; and
                    ``(C) secondary school to adult life;
            ``(4) placing and serving children with disabilities, 
        including children from underserved populations, in the least 
        restrictive environment appropriate;
            ``(5) preventing children with disabilities, especially 
        children with emotional disturbances and specific learning 
        disabilities, from dropping out of school;
            ``(6) assessing the use of disciplinary measures, and the 
        effect of such use, with children with disabilities as compared 
        to nondisabled children;
            ``(7) coordinating services provided under this title with 
        each other, with other educational and pupil services 
        (including preschool services), and with health and social 
        services funded from other sources;
            ``(8) addressing the participation of parents of children 
        with disabilities in the education of their children; and
            ``(9) resolving disagreements between education personnel 
        and parents through activities such as mediation.
    ``(d) Interim and Final Reports.--The Secretary shall submit to the 
President and the Congress--
            ``(1) an interim report that summarizes the preliminary 
        findings of the assessment not later than October 1, 1998; and
            ``(2) a final report of the findings of the assessment not 
        later than October 1, 2000.

``SEC. 669. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated to carry 
out this subpart such sums as may be necessary for each of the fiscal 
years 1997 through 2001.
    ``(b) Minimum Amounts.--Subject to subsection (c), the Secretary 
shall ensure that, for each fiscal year, at least the following amounts 
are provided under this part to address the following needs:
            ``(1) $12,832,000 to address the educational, related 
        services, transitional, and early intervention needs of 
        children with deaf-blindness.
            ``(2) $4,000,000 to address the postsecondary, vocational, 
        technical, continuing, and adult education needs of individuals 
        with deafness.
    ``(c) Ratable Reduction.--If the total amount appropriated to carry 
out this part for any fiscal year is less than $135,600,000, the 
amounts listed in subsection (b) shall be ratably reduced.

                 ``Subpart 2--Professional Development

``SEC. 671. PURPOSE.

    ``The purpose of this subpart is to help ensure that--
            ``(1) personnel responsible for serving children with 
        disabilities, including general and special education 
        personnel, related services personnel, and early intervention 
        personnel, have the knowledge and skills necessary to help such 
        children--
                    ``(A) meet developmental goals and, to the maximum 
                extent possible, those challenging expectations that 
                have been established for all children; and
                    ``(B) be prepared to lead productive, independent 
                adult lives to the maximum extent possible;
            ``(2) there are adequate numbers of such personnel to meet 
        the needs of children with disabilities; and
            ``(3) the skills and knowledge of personnel responsible for 
        serving children with disabilities reflect the best practices, 
        as determined through research and experience, particularly 
        with respect to the inclusion of children with disabilities in 
        the regular education environment.

``SEC. 672. FINDING.

    ``The Congress finds that the conditions noted in paragraphs (7) 
through (10) of section 601(c) can be greatly improved by providing 
opportunities for the full participation of minorities through the 
implementation of the following recommendations:
            ``(1) Implementation of a policy to mobilize the Nation's 
        resources to prepare minorities for careers in special 
        education and related services.
            ``(2) Focusing such policy on--
                    ``(A) the recruitment of minorities into teaching; 
                and
                    ``(B) financially assisting Historically Black 
                Colleges and Universities and other institutions of 
                higher education (whose minority student enrollment is 
                at least 25 percent) to prepare students for special 
                education and related service careers.

``SEC. 673. NATIONAL ACTIVITIES.

    ``(a) Program Authorized.--The Secretary may make grants to, and 
enter into contracts and cooperative agreements with, eligible entities 
to support activities of national significance that--
            ``(1) have broad applicability; and
            ``(2) will help ensure that the purpose of this subpart is 
        met.
    ``(b) Authorized Activities.--In carrying out this section, the 
Secretary may support any activity that is consistent with subsection 
(a), including--
            ``(1) the development, evaluation, demonstration, or 
        dissemination of effective personnel preparation practices for 
        personnel to work with children with disabilities;
            ``(2) promoting the transferability of licensure and 
        certification of teachers and administrators among State and 
        local jurisdictions;
            ``(3) developing and disseminating models that prepare 
        teachers with strategies, including behavioral management 
        techniques, for addressing the conduct of children with 
        disabilities that impedes their learning and that of others in 
        the classroom; and
            ``(4) supporting Historically Black Colleges and 
        Universities and institutions of higher education with minority 
        enrollments of at least 25 percent for the purpose of preparing 
        personnel.

``SEC. 674. PROFESSIONAL DEVELOPMENT FOR PERSONNEL SERVING LOW-
              INCIDENCE POPULATIONS.

    ``(a) Program Authorized.--The Secretary may make grants to, and 
enter into contracts and cooperative agreements with, eligible entities 
to meet the purpose of this subpart by supporting preparation for 
personnel who will provide educational and related services to children 
with low-incidence disabilities and personnel who will provide early 
intervention services to infants and toddlers with disabilities.
    ``(b) Authorized Activities.--
            ``(1) In general.--Individuals who may be prepared pursuant 
        to this section include personnel who--
                    ``(A) are currently prepared in the fields of 
                educational, related, or early intervention services; 
                and
                    ``(B) are studying--
                            ``(i) to obtain degrees, certification, 
                        licensure, or endorsements in one or more of 
                        such fields; or
                            ``(ii) to meet competency requirements in 
                        one or more of such fields.
            ``(2) Scholarships.--The Secretary may include funds for 
        scholarships, with necessary stipends and allowances, in awards 
        under this section.
    ``(c) Applications.--Any application for assistance under this 
section shall propose to provide preparation that addresses a 
significant need, as shown by letters from one or more States stating 
that the State--
            ``(1) intends to accept successful completion of the 
        proposed personnel preparation as meeting State personnel 
        standards for serving children with low-incidence disabilities, 
        or for serving infants and toddlers with disabilities; and
            ``(2) needs personnel in the area or areas in which the 
        applicant proposes to provide preparation, as identified in the 
        State's comprehensive system of personnel development under 
        part B or C, or in the State's State improvement plan under 
        subpart 3.
    ``(d) Definition.--For purposes of this section, the term `low-
incidence disability' has the meaning given such term in section 
662(b).

``SEC. 675. LEADERSHIP PERSONNEL.

    ``(a) Program Authorized.--The Secretary may make grants to, and 
enter into contracts and cooperative agreements with, eligible entities 
to meet the purpose of this subpart by preparing educational, related 
service, and early intervention leadership personnel (including 
teacher-preparation faculty, administrators, researchers, supervisors, 
and principals) so that they are prepared to help children with 
disabilities--
            ``(1) meet developmental goals and, to the maximum extent 
        possible, those challenging expectations that have been 
        established for all children; and
            ``(2) be prepared to lead productive, independent adult 
        lives to the maximum extent possible.
    ``(b) Authorized Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary may support any activity that is consistent with 
        subsection (a), including--
                    ``(A) preparation of personnel at the advanced 
                graduate, doctoral, or post-doctoral levels; and
                    ``(B) professional development of leadership 
                personnel.
            ``(2) Scholarships.--The Secretary may include funds for 
        scholarships, with necessary stipends and allowances, in awards 
        under this section.
    ``(c) Preferences.--In making awards under this section, the 
Secretary shall give preference to projects at institutions of higher 
education that have successfully integrated the professional 
development of general and special education personnel.

``SEC. 676. SERVICE OBLIGATION.

    ``Each application for funds under section 674 or 675 shall include 
an assurance that the applicant will ensure that individuals who are 
prepared under the proposed project will subsequently perform work 
related to their preparation or repay all or part of the cost of such 
preparation.

``SEC. 677. OUTREACH.

    ``(a) Plan for Outreach Services.--The Secretary shall develop a 
plan for providing outreach services to the entities and populations 
described in subsection (b) in order to increase the participation of 
such entities and populations in competitions for grants, contracts, 
and cooperative agreements under this subpart.
    ``(b) Entities and Populations Described.--The entities and 
populations referred to in subsection (a) are--
            ``(1) Historically Black Colleges and Universities and 
        other institutions of higher education whose minority student 
        enrollment is at least 25 percent;
            ``(2) eligible institutions, as defined in section 312 of 
        the Higher Education Act of 1965;
            ``(3) nonprofit and for-profit agencies at least 51 percent 
        owned or controlled by one or more minority individuals; and
            ``(4) underrepresented populations.
    ``(c) Funding.--For the purpose of implementing the plan required 
under subsection (a), the Secretary shall, for each of the fiscal years 
1997 through 2002, expend 1 percent of the funds appropriated for the 
fiscal year involved for carrying out this subpart.
    ``(d) Diligence.--The Secretary shall exercise the utmost 
authority, resourcefulness, and diligence of the Secretary to meet the 
requirements of this section.
    ``(e) Report.--Not later than January 31 of each year, beginning 
with fiscal year 1997 and ending with fiscal year 2002, the Secretary 
shall submit to the Congress a final report on the progress toward 
meeting the goals of this section during the preceding fiscal year. The 
report shall include--
            ``(1) a full explanation of any progress toward meeting the 
        goals of this section; and
            ``(2) a plan to meet the goals, if necessary.
    ``(f) Underrepresented Populations Defined.--For purposes of this 
section, the term `underrepresented populations' means populations such 
as minorities, the poor, individuals with limited English proficiency, 
and individuals with disabilities.

    ``Subpart 3--State Program Improvement Grants for Children with 
                              Disabilities

``SEC. 681. PURPOSE.

    ``The purpose of this subpart is to assist States in reforming and 
improving their systems for providing educational and early 
intervention services, particularly their systems for professional 
development, to improve the achievement of children with disabilities.

``SEC. 682. ELIGIBILITY AND COLLABORATIVE PROCESS.

    ``(a) Eligible Applicants.--A State may apply for a grant under 
this subpart for a grant period that is not less than one year, but is 
not greater than 4 years.
    ``(b) Certification That Collaborative Process Has Been Used.--A 
State that desires to receive a grant under this subpart shall certify 
to the Secretary that a collaborative process with persons described in 
subsection (c) has been used in developing the State improvement plan 
described in section 683.
    ``(c) Collaborative Process Participants.--
            ``(1) Required participants.--The collaborative process 
        referred to in subsection (b) is a State process for making 
        decisions which includes as participants, at a minimum, the 
        Governor of the State and representatives, appointed by such 
        Governor, of--
                    ``(A) parents of children with disabilities;
                    ``(B) parents of nondisabled children;
                    ``(C) individuals with disabilities;
                    ``(D) organizations representing individuals with 
                disabilities and their parents;
                    ``(E) community-based and other nonprofit 
                organizations related to the education and employment 
                of individuals with disabilities;
                    ``(F) the lead State agency official or officials 
                for part C;
                    ``(G) local educational agencies;
                    ``(H) general and special education teachers;
                    ``(I) the State educational agency;
                    ``(J) the State advisory panel established under 
                part B; and
                    ``(K) the State interagency coordinating council 
                established under part C.
            ``(2) Optional participants.--The collaborative process may 
        include, at the Governor's discretion, representatives, 
        appointed by the Governor, of--
                    ``(A) individuals knowledgeable about vocational 
                education;
                    ``(B) the State agency for higher education;
                    ``(C) institutions of higher education;
                    ``(D) schools of education;
                    ``(E) the State vocational rehabilitation agency;
                    ``(F) public agencies with jurisdiction in the 
                areas of health, mental health, social services, and 
                juvenile justice; and
                    ``(G) any other individuals designated by the 
                Governor.

``SEC. 683. STATE IMPROVEMENT PLANS.

    ``(a) In General.--A State that desires to receive a grant under 
this subpart shall submit to the Secretary a State improvement plan 
that is integrated, to the maximum extent possible, with State plans 
under the Elementary and Secondary Education Act of 1965 and the 
Rehabilitation Act of 1973, as appropriate.
    ``(b) Determining Child and Program Needs.--
            ``(1) In general.--Each State improvement plan shall 
        identify those critical aspects of early intervention, general 
        education, and special education programs (including 
        professional development, based on an assessment of State and 
        local needs) that must be improved to enable children with 
        disabilities to meet the goals established by the State under 
        section 612(a)(14).
            ``(2) Required analyses.--To meet the requirement of 
        paragraph (1), the State improvement plan shall include at 
        least--
                    ``(A) an analysis of all information, reasonably 
                available to the State, on the performance of children 
                with disabilities in the State, including--
                            ``(i) their performance on State 
                        assessments and other performance indicators 
                        established for all children, including drop-
                        out rates and graduation rates;
                            ``(ii) their participation in postsecondary 
                        education and employment; and
                            ``(iii) how their performance on the 
                        assessments and indicators described in clause 
                        (i) compares to that of non-disabled children;
                    ``(B) an analysis of State and local needs for 
                professional development for personnel to serve 
                children with disabilities that includes, at a minimum, 
                relevant information on current and anticipated 
                personnel shortages, and on the extent of certification 
                or retraining necessary to eliminate such shortages, 
                that is based, to the maximum extent possible, on 
                existing assessments of personnel needs; and
                    ``(C) a summary of the information and analysis 
                provided by the State to the Secretary under parts B 
                and C on the effectiveness of the State's systems of 
                early intervention, special education, and general 
                education in meeting the needs of children with 
                disabilities.
    ``(c) Improvement Strategies.--Each State improvement plan shall--
            ``(1) describe the strategies the State will use to address 
        the needs identified under subsection (b)(1), including--
                    ``(A) how it will hold school districts and schools 
                accountable for educational progress of children with 
                disabilities;
                    ``(B) how it will provide technical assistance to 
                school districts and schools to improve results for 
                children with disabilities;
                    ``(C) how it will address the identified needs for 
                in-service and pre-service preparation to ensure that 
                all personnel who work with children with disabilities 
                (including both professional and paraprofessional 
                personnel who provide early intervention services, 
special education, general education, or related services) have the 
skills and knowledge necessary to meet the needs of children with 
disabilities, including a description of how--
                            ``(i) the State will prepare general 
                        education and special education personnel with 
                        the content knowledge and collaborative skills 
                        needed to meet the needs of children with 
                        disabilities, including how the State will work 
                        with other States on common certification 
                        criteria;
                            ``(ii) the State will prepare professionals 
                        and paraprofessionals in the area of early 
                        intervention with the content knowledge and 
                        collaborative skills needed to meet the needs 
                        of infants and toddlers with disabilities;
                            ``(iii) the State will work with 
                        institutions of higher education and other 
                        entities that prepare (on both a pre-service 
                        and an in-service basis) personnel who work 
                        with children with disabilities to ensure that 
                        such institutions and entities develop the 
                        capacity to support professional development 
                        programs which reflect actual education 
                        practices and techniques;
                            ``(iv) the State's requirements for 
                        licensure of teachers and administrators, 
                        including certification and recertification, 
                        will be modified to support an adequate supply 
                        of personnel with the necessary skills and 
                        knowledge (including, where appropriate, 
                        strategies for developing reciprocal 
                        certification agreements and common 
                        certification requirements with other States); 
                        and
                            ``(v) the State will work to develop 
                        collaborative agreements with other States for 
                        the joint support and development of programs 
                        to prepare personnel for which there is not 
                        sufficient demand within a single State to 
                        justify support or development of such a 
                        program of preparation;
                    ``(D) how it will work in collaboration with other 
                States, particularly neighboring States, to address the 
                lack of uniformity and reciprocity in the credentialing 
                of teachers and other personnel;
                    ``(E) strategies that will address systemic 
                problems identified in Federal compliance reviews, 
                including shortages of qualified personnel; and
                    ``(F) how the State will assess, on a regular 
                basis, the extent to which the strategies implemented 
                under this subpart have been effective; and
            ``(2) describe how the improvement strategies under 
        paragraph (1) will be coordinated with public and private 
        sector resources.
    ``(d) Reporting Procedures.--Each State that receives a grant under 
this subpart shall submit performance reports to the Secretary pursuant 
to a schedule to be determined by the Secretary, but not more 
frequently that annually.
    ``(e) Plan Approval.--The Secretary shall approve a State 
improvement plan under this section if it--
            ``(1) meets the requirements of this part;
            ``(2) has been developed in accordance with the 
        requirements of section 682; and
            ``(3) in the opinion of the Secretary, has a reasonable 
        chance of achieving the purposes of the grant.
    ``(f) Plan Amendments.--
            ``(1) Modifications made by state.--Subject to paragraph 
        (2), a plan submitted by a State in accordance with this 
        section shall remain in effect until the State submits to the 
Secretary such modifications as the State determines necessary. This 
section shall apply to a modification to a plan to the same extent and 
in the same manner as this section applies to the original plan.
            ``(2) Modifications required by secretary.--The Secretary 
        may require a State to amend its State improvement plan at any 
        time as a result of the Secretary's compliance reviews under 
        parts B and C. The Secretary may not provide further funding 
        under this subpart to the State until such amendments are made.

``SEC. 684. USE OF FUNDS.

    ``(a) In General.--A State that receives a grant under this subpart 
may use the grant to carry out any activities that are described in the 
State improvement plan and that are consistent with the purpose of this 
subpart. Such activities may include the awarding of subgrants, but 
only if the subgrants are made to local educational agencies. Any such 
local educational agency may award subgrants to any person. Such 
activities may also include the awarding of contracts to appropriate 
entities.
    ``(b) Use of Funds for Professional Development.--A State that 
receives a grant under this subpart shall use not less than 75 percent 
of the funds it receives under the grant for any fiscal year to ensure 
that there is a sufficient supply of personnel who have the skills and 
knowledge necessary to enable children with disabilities to meet 
developmental goals and to meet the needs of such children, including 
working with other States on common certification criteria.
    ``(c) Grants to Territories.--The provisions of Public Law 95-134, 
permitting the consolidation of grants to the territories, shall not 
apply to funds received under this subpart.

``SEC. 685. MINIMUM STATE ALLOTMENTS.

    ``A State that receives a grant under this subpart shall receive an 
amount that is--
            ``(1) not less than $200,000, in the case of the 50 States, 
        the District of Columbia, and the Commonwealth of Puerto Rico; 
        and
            ``(2) not less than $40,000, in the case of a territory.

``SEC. 686. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this subpart 
such sums as may be necessary for each of the fiscal years 1997 through 
2001.

                      ``Subpart 4--Parent Training

``SEC. 691. GRANTS FOR PARENT TRAINING AND INFORMATION CENTERS.

    ``(a) Program Authorized.--The Secretary may make grants to, and 
enter into contracts and cooperative agreements with, parent 
organizations to support parent training and information centers to 
carry out activities under this subpart.
    ``(b) Required Activities.--A parent training and information 
center that receives assistance under this section shall--
            ``(1) assist parents to understand the availability of, and 
        how effectively to use, procedural safeguards under this title, 
        including the use of alternative methods of dispute resolution, 
        such as mediation;
            ``(2) serve the parents of children with the full range of 
        disabilities; and
            ``(3) annually report to the Secretary on--
                    ``(A) the number of parents to whom it provided 
                information and training in the most recently concluded 
                fiscal year; and
                    ``(B) the effectiveness of strategies used to reach 
                and serve parents of children with disabilities, 
                including underserved parents of children with 
                disabilities.
    ``(c) Optional Activities.--A parent training and information 
center that receives assistance under this section may--
            ``(1) provide information to teachers and other 
        professionals who provide special education and related 
        services to children with disabilities;
            ``(2) assist students with disabilities to understand their 
        rights and responsibilities under section 615(j) on reaching 
        the age of majority; and
            ``(3) establish cooperative partnerships with parent 
        organizations, and other organizations assisting families of 
        children with disabilities, in the community.
    ``(d) Application Requirements.--Each application for assistance 
under this section shall identify with specificity the special efforts 
that the applicant will undertake to--
            ``(1) ensure that the needs for training and information of 
        parents of underserved children with disabilities in the area 
        to be served are effectively met; and
            ``(2) work with community-based organizations.
    ``(e) Distribution of Funds.--
            ``(1) Initial awards.--
                    ``(A) In general.--The Secretary shall make at 
                least one award to a parent organization in each State, 
                unless the Secretary does not receive an application 
                from such an organization in each State of sufficient 
                quality to warrant approval.
                    ``(B) Selection requirement.--The Secretary shall 
                select among applications submitted by parent 
                organizations in a State in a manner that ensures the 
                most effective assistance to parents, including parents 
                in urban and rural areas, in the State.
            ``(2) Additional awards.--
                    ``(A) In general.--The Secretary may make 
                additional awards to community-based parent 
                organizations in each State.
                    ``(B) Selection requirement.--The Secretary may 
                make additional awards in a manner that ensures that 
                parents of children with disabilities in low-income, 
                high-density, and rural areas have access to parent 
                training and information centers that provide 
                appropriate training and information.

``SEC. 692. TECHNICAL ASSISTANCE FOR PARENT TRAINING AND INFORMATION 
              CENTERS.

    ``(a) Program Authorized.--The Secretary may provide technical 
assistance for developing, assisting, and coordinating parent training 
and information programs carried out by parent training and information 
centers receiving assistance under section 691.
    ``(b) Authorized Activities.--The Secretary may provide technical 
assistance to a parent training and information center under this 
section in areas such as--
            ``(1) effective coordination of parent training efforts;
            ``(2) dissemination of information;
            ``(3) evaluation by the center of itself;
            ``(4) promotion of the use of technology, including 
        assistive technology devices and assistive technology services;
            ``(5) reaching underserved populations;
            ``(6) including children with disabilities in general 
        education programs;
            ``(7) facilitation of transitions from--
                    ``(A) early intervention services to preschool;
                    ``(B) preschool to school; and
                    ``(C) secondary school to postsecondary 
                environments; and
            ``(8) promotion of alternative methods of dispute 
        resolution.

``SEC. 693. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this subpart 
such sums as may be necessary for each of the fiscal years 1997 through 
2001.''.

                   TITLE II--MISCELLANEOUS PROVISIONS

SEC. 201. AMENDMENT TO ESEA TO COORDINATE IDEA AND SCHOOLWIDE PROGRAMS.

    Section 1114(a)(4) of the Elementary and Secondary Education Act of 
1965 (20 U.S.C. 6314(a)(4)) is amended--
            (1) in subparagraph (A), by striking ``Secretary (other 
        than formula or discretionary grant programs under the 
        Individuals with Disabilities Education Act),'' and inserting 
        ``Secretary,''; and
            (2) in subparagraph (B), by inserting ``special education 
        and related services under an individualized education program, 
        procedural safeguards,'' after ``civil rights,''.

SEC. 202. EFFECTIVE DATES.

    (a) Parts A, B, and C.--Except as provided in subsection (b), parts 
A, B, and C of the Individuals with Disabilities Education Act, as 
amended by title I, shall take effect on July 1, 1997.
    (b) Section 605.--Section 605 of such Act, as amended by title I, 
shall take effect upon the enactment of this Act.
    (c) Part D.--Part D of such Act, as amended by title I, shall take 
effect on October 1, 1997.

SEC. 203. REPEALERS.

    (a) Part I.--Part I of the Individuals with Disabilities Education 
Act is hereby repealed.
    (b) Part H.--Effective July 1, 1997, part H of such Act is hereby 
repealed.
    (c) Parts E, F, and G.--Effective October 1, 1997, parts E, F, and 
G of such Act are hereby repealed.