[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 856 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                 S. 856

To amend the National Foundation on the Arts and the Humanities Act of 
1965, the Museum Services Act, and the Acts and Artifacts Indemnity Act 
        to improve and extend the Acts, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                 May 25 (legislative day, May 15), 1995

 Mr. Jeffords (for himself, Mrs. Kassebaum, Mr. Kennedy, Mr. Pell, Mr. 
 Simpson, and Mr. Dodd) introduced the following bill; which was read 
    twice and referred to the Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL


 
To amend the National Foundation on the Arts and the Humanities Act of 
1965, the Museum Services Act, and the Acts and Artifacts Indemnity Act 
        to improve and extend the Acts, 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 ``Arts, Humanities, and Museums 
Amendments of 1995''.

TITLE I--NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES ACT OF 1965

SEC. 101. NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES.

    The National Foundation on the Arts and the Humanities Act of 1965 
(20 U.S.C. 951 et seq.) is amended to read as follows:
``SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    ``(a) Short Title.--This Act may be cited as the `National 
Foundation on the Arts and the Humanities Act of 1965'.
    ``(b) Table of Contents.--The table of contents is as follows:

        ``Sec. 1. Short title; table of contents.
        ``Sec. 2. Purposes.
        ``Sec. 3. Definitions.
     ``TITLE I--NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES

        ``Sec. 101. Establishment of the National Foundation on the 
                            Arts and the Humanities.
        ``Sec. 102. General limitations on grants.
        ``Sec. 103. Joint administration.
        ``Sec. 104. Authorization of appropriations.
              ``TITLE II--NATIONAL ENDOWMENT FOR THE ARTS

        ``Sec. 201. Definitions.
        ``Sec. 202. Establishment of the National Endowment for the 
                            Arts.
        ``Sec. 203. Application procedures.
        ``Sec. 204. Advisory panels.
        ``Sec. 205. National Council on the Arts.
        ``Sec. 206. Limitations on grants.
        ``Sec. 207. Administrative provisions.
        ``Sec. 208. Reports.
        ``Sec. 209. Sanctions and payments.
        ``Sec. 210. Awards.
           ``TITLE III--NATIONAL ENDOWMENT FOR THE HUMANITIES

        ``Sec. 301. Definitions.
        ``Sec. 302. Establishment of the National Endowment for the 
                            Humanities.
        ``Sec. 303. Application procedures.
        ``Sec. 304. Review panels.
        ``Sec. 305. National Council on the Humanities.
        ``Sec. 306. Limitations on grants.
        ``Sec. 307. Administrative provisions.
        ``Sec. 308. Reports.
        ``Sec. 309. Sanctions and payments.
        ``Sec. 310. Awards.
``SEC. 2. PURPOSES.

    ``The purposes of this Act are--
            ``(1)(A) to ensure that the arts and the humanities belong 
        to all the people of the United States; and
            ``(B) to support the arts and the humanities that are 
        essential to social, cultural, and economic progress;
            ``(2) to encourage and support national progress and 
        scholarship in the arts and the humanities, because such 
        encouragement and support, while primarily matters for private 
        and local initiative, are also appropriate matters of concern 
        for the Federal Government;
            ``(3) to ensure that the United States, as an advanced 
        civilization, does not limit its efforts to science and 
        technology alone but gives full value and support to the other 
        great branches of scholarly and cultural activity in order to 
        achieve a better understanding of the past, a better analysis 
        of the present, and a better view of the future;
            ``(4) to further the advancement of the arts and the 
        humanities and the access of all citizens of the United States 
        to the arts and the humanities, in partnership with local, 
        State, regional, and private agencies, organizations, and 
        individuals;
            ``(5) in furthering the advancement and access described in 
        paragraph (4), to be sensitive to the nature of public support 
        and the need to use public funding in a manner that recognizes 
        the responsibility of the Federal Government to the public 
        good;
            ``(6) to ensure that public funds provided by the Federal 
        Government ultimately serve the public purposes the Congress 
        defines and are subject to the conditions that traditionally 
        govern the use of public money;
            ``(7) to ensure that--
                    ``(A) Federal support of the arts and the 
                humanities reflects the high place accorded by the 
                people of the United States to the Nation's rich 
                cultural heritage; and
                    ``(B) public funding of the arts and the humanities 
                contributes to public support for and confidence in the 
                use of taxpayer funds;
            ``(8)(A) to support the practice of art and the study of 
        the humanities, which require constant dedication and devotion; 
        and
            ``(B) while recognizing that no government can create a 
        great artist or scholar, to help create and sustain not only a 
        climate encouraging freedom of thought, imagination, and 
        inquiry, but also the material conditions facilitating the 
        release of creative talent;
            ``(9)(A) to ensure that United States students receive in 
        school, background and preparation in the arts and the 
        humanities to enable the students to recognize and appreciate 
        the aesthetic dimensions of their lives, the cultural heritage 
        of the United States, and the full potential of artistic and 
        scholarly expression; and
            ``(B) to increase access to the arts and the humanities for 
        all persons in the United States, including diverse cultures 
        and urban and rural populations, by--
                    ``(i) encouraging and developing quality education 
                in the arts and the humanities at all levels, in 
                conjunction with programs of lifelong learning in the 
                arts and the humanities for all age groups and with 
                formal systems of elementary, secondary, and 
                postsecondary education; and
                    ``(ii) encouraging and facilitating the work of 
                scholars, artists, arts institutions, and Federal, 
                State, regional, and local agencies in the area of 
                education in the arts and the humanities.

``SEC. 3. DEFINITIONS.

    ``As used in this Act:
            ``(1) Arts.--The term `arts' includes--
                    ``(A) dance, design, literature, media, music, 
                opera, theater, and visual arts;
                    ``(B) folk and traditional arts practiced by the 
                diverse peoples of the United States; and
                    ``(C) the presentation, performance, execution, 
                exhibition, and study of the arts described in 
                subparagraph (A) or (B), including study of the arts 
                through apprenticeships, internships, and other career 
                oriented work-study experiences for artists and art 
                teachers, and residencies for artists at all 
                educational levels.
            ``(2) Grant.--The term `grant' includes a loan, a contract, 
        and a cooperative agreement.
            ``(3) Group.--The term `group' includes any State or other 
        public agency, and any nonprofit organization in the United 
        States, whether or not incorporated.
            ``(4) Humanities.--The term `humanities' includes--
                    ``(A) the study and interpretation of--
                            ``(i) language, both modern and classical, 
                        linguistics, literature, history, 
                        jurisprudence, philosophy, archaeology, 
                        comparative religion, and ethics;
                            ``(ii) the history, criticism, and theory 
                        of the arts;
                            ``(iii) folklore and folklife; and
                            ``(iv) the aspects of the social sciences 
                        that have humanistic content and employ 
                        humanistic methods; and
                    ``(B) the study and application of the humanities 
                described in subparagraph (A) to the human environment 
                with particular attention to--
                            ``(i) reflecting the heritage, traditions, 
                        and history of the United States; and
                            ``(ii) the relevance of the humanities 
                        described in subparagraph (A) to the conditions 
                        of national life.
            ``(5) Program income.--
                    ``(A) In general.--The term `program income' means 
                any money that is earned or received, by a recipient of 
                a grant made under title II or III, from an activity 
                supported by the funds made available through the grant 
                or from a product resulting from or related to an 
                activity carried out under the grant.
                    ``(B) Types of income.--The term includes--
                            ``(i) income from a fee for service 
                        performed, or from the sale of an item created, 
                        under the grant;
                            ``(ii) income from a licensing fee on a 
                        product related to an activity carried out 
                        under the grant;
                            ``(iii) a usage or rental fee for equipment 
                        or property acquired under the grant;
                            ``(iv) an admission fee for an activity 
                        carried out under the grant;
                            ``(v) income from a broadcast or 
                        distribution right for such an activity; and
                            ``(vi) a royalty on a patent or copyright 
                        for such an activity.
            ``(6) Regional group.--The term `regional group' means any 
        multistate group, whether or not representative of contiguous 
        States.
            ``(7) State.--The term `State' includes, in addition to the 
        several States of the United States, the Commonwealth of Puerto 
        Rico, the District of Columbia, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and the Virgin 
        Islands.

     ``TITLE I--NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES

``SEC. 101. ESTABLISHMENT OF THE NATIONAL FOUNDATION ON THE ARTS AND 
              THE HUMANITIES.

    ``(a) Establishment.--There is established a National Foundation on 
the Arts and the Humanities (referred to in this Act as the 
`Foundation'), which shall be composed of a National Endowment for the 
Arts, a National Endowment for the Humanities (each of which may be 
referred to in this section as an `Endowment'), and an Institute of 
Museum and Library Services.
    ``(b) Purpose.--The purpose of the Foundation shall be to develop 
and promote a national policy of support for the arts and the 
humanities in the United States.
    ``(c) Limitation.--In the administration of this Act no department, 
agency, officer, or employee of the United States shall exercise any 
direction, supervision, or control over the policy determination, 
personnel, or curriculum, or the administration or operation of any 
school or other non-Federal agency, institution, organization, or 
association.
    ``(d) Donations, Bequests, and Devises.--
            ``(1) In general.--In any case in which any money or other 
        property is donated, bequeathed, or devised to the Foundation 
        without designation of the Endowment for the benefit of which 
        the money or property is intended, each Chairperson of an 
        Endowment shall have authority to receive such money or 
        property.
            ``(2) Unrestricted donations, bequests, and devises.--
        Except as provided in paragraph (3), unless the Chairpersons of 
        the Endowments agree otherwise, the money or property shall be 
        deemed to have been donated, bequeathed, or devised in equal 
        shares to each Endowment.
            ``(3) Restricted donations, bequests, and devises.--In any 
        case in which any money or property is donated, bequeathed, or 
        devised to the Foundation with a condition or restriction, such 
        money or property shall be deemed to have been donated, 
        bequeathed, or devised to the Endowment whose function it is to 
        carry out the purposes of the condition or restriction.
    ``(e) Tax Laws.--For the purposes of the income tax, gift tax, and 
estate tax laws of the United States, any money or other property 
donated, bequeathed, or devised to the Foundation or one of the 
Endowments and received by the Chairperson of an Endowment pursuant to 
this section, section 207, or section 307 shall be deemed to have been 
donated, bequeathed, or devised to or for the use of the United States.

``SEC. 102. GENERAL LIMITATIONS ON GRANTS.

    ``None of the grants awarded under this Act shall be used for the 
purposes of lobbying or for providing general membership services for 
groups.

``SEC. 103. JOINT ADMINISTRATION.

    ``(a) Inspector General.--There shall be in the Foundation a single 
Office of the Inspector General for the National Endowment for the Arts 
and the National Endowment for the Humanities. The Office shall be 
headed by 1 Inspector General appointed in accordance with the 
Inspector General Act of 1978 (5 U.S.C. App.). The Inspector General 
shall carry out the duties prescribed in such Act, including conducting 
appropriate reviews to ensure that recipients of grants under titles II 
and III comply with the applicable regulations and procedures 
established under this Act, including regulations relating to 
accounting and financial matters.
    ``(b) Reporting.--The Inspector General for the National Endowment 
for the Arts and the National Endowment for the Humanities shall 
report--
            ``(1) to the Chairperson of the National Endowment for the 
        Arts with respect to matters relating to the National Endowment 
        for the Arts; and
            ``(2) to the Chairperson of the National Endowment for the 
        Humanities with respect to matters relating to the Chairperson 
        of the National Endowment for the Humanities.
    ``(c) Other Functions.--The Chairperson of the National Endowment 
for the Arts and Chairperson of the National Endowment for the 
Humanities shall ensure nonduplication of administrative functions, 
such as provision of facilities and space, records management, 
contracting, procurement, printing, and provision of mail and library 
services. The Chairpersons shall enter into an interagency agreement to 
jointly carry out the functions with the minimum necessary expense.
    ``(d) Report.--Not later than 60 days after the date of enactment 
of the Arts, Humanities, and Museums Amendments of 1995, the 
Chairperson of the National Endowment for the Arts and the Chairperson 
of the National Endowment for the Humanities shall jointly prepare and 
submit to the appropriate committees of Congress a report containing a 
plan that describes the manner in which the Chairpersons will jointly 
carry out the functions described in subsection (c). Not later than 180 
days after such date of enactment, the Chairpersons shall implement the 
plan.

``SEC. 104. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) National Endowment for the Arts.--
            ``(1) In general.--
                    ``(A) Grant programs.--For the purpose of making 
                grants under subsections (c), (d), and (e) of section 
                202, there are authorized to be appropriated to the 
                National Endowment for the Arts $139,710,000 for fiscal 
                year 1996, $136,910,000 for fiscal year 1997, 
                $134,270,000 for fiscal year 1998, $131,500,000 for 
                fiscal year 1999, and $128,870,000 for fiscal year 
                2000.
                    ``(B) Reservation for partnership grants.--40 
                percent of the amount appropriated for a fiscal year 
                under subparagraph (A) shall be reserved for making 
                grants under section 202(c).
                    ``(C) Reservation for national significance 
                grants.--40 percent of the amount appropriated for a 
                fiscal year under subparagraph (A) shall be reserved 
                for making grants under section 202(d).
                    ``(D) Reservation for direct grants.--20 percent of 
                the amount appropriated for a fiscal year under 
                subparagraph (A) shall be reserved for making grants 
                under section 202(e).
            ``(2) Appropriations based on donations.--There are 
        authorized to be appropriated to the National Endowment for the 
        Arts for each of fiscal years 1996 through 2000, an additional 
        amount, equal to the sum of--
                    ``(A) the total amounts received by the National 
                Endowment for the Arts under section 207(a)(2), 
                including the value of property donated, bequeathed, or 
                devised to the National Endowment for the Arts, and any 
                interest earned on the amounts, for use in carrying out 
                projects and other activities under title II; and
                    ``(B) the total amounts received by the grant 
                recipients under title II from non-Federal sources, 
                including the value of property donated, bequeathed, or 
                devised to such recipients, for use in making grants to 
                carry out projects and other activities under title II;
        except that the amounts so appropriated to the National 
        Endowment for the Arts shall not exceed $10,000,000 for fiscal 
        year 1996 and such sums as may be necessary for each of fiscal 
        years 1997 through 2000.
            ``(3) Guidelines.--The Chairperson shall issue guidelines 
        to implement the provisions of paragraph (2). Such guidelines 
        shall be consistent with the requirements of title II, 
        regarding the Federal share of the cost of activities carried 
        out under title II.
            ``(4) Sums remaining available.--Sums appropriated pursuant 
        to paragraph (1) or (2) for any fiscal year shall remain 
        available for obligation until expended.
            ``(5) Total authorization.--There are authorized to be 
        appropriated to carry out the activities of the National 
        Endowment for the Arts under this Act, including amounts 
        described in paragraph (1) or (2), or in subsection (c)(1), 
        $158,760,000 for fiscal year 1996, $155,580,000 for fiscal year 
        1997, $152,470,000 for fiscal year 1998, $149,430,000 for 
        fiscal year 1999, and $146,440,000 for fiscal year 2000.
    ``(b) National Endowment for the Humanities.--
            ``(1) In general.--
                    ``(A) Grant programs.--For the purpose of making 
                grants under subsections (c), (d), and (e) of section 
                302, there are authorized to be appropriated to the 
                National Endowment for the Humanities, $148,330,000 for 
                fiscal year 1996, $145,370,000 for fiscal year 1997, 
                $142,470,000 for fiscal year 1998, $139,620,000 for 
                fiscal year 1999, and $136,820,000 for fiscal year 
                2000.
                    ``(B) Reservation for partnership grants.--25 
                percent of the amount appropriated for a fiscal year 
                under subparagraph (A) shall be reserved for making 
                grants under section 302(c).
                    ``(C) Reservation for national grants.--37.5 
                percent of the amount appropriated for a fiscal year 
                under subparagraph (A) shall be reserved for making 
                grants under section 302(d).
                    ``(D) Reservation for research and scholarship 
                grants.--37.5 percent of the amount appropriated for a 
                fiscal year under subparagraph (A) shall be reserved 
                for making grants under section 302(e).
            ``(2) Appropriations based on donations.--There are 
        authorized to be appropriated to the National Endowment for the 
        Humanities for each of fiscal years 1996 through 2000, an 
        additional amount equal to the sum of--
                    ``(A) the total amounts received by the National 
                Endowment for the Humanities under section 307(a)(2), 
                including the value of property donated, bequeathed, or 
                devised to the National Endowment for the Humanities, 
                and any interest earned on the amounts, for use in 
                carrying out activities under title III; and
                    ``(B) the total amounts received by the grant 
                recipients under title III from non-Federal sources, 
                including the value of property donated, bequeathed, or 
                devised to such recipients, for use in carrying out 
                activities under title III;
        except that the amounts so appropriated to the National 
        Endowment for the Humanities shall not exceed $10,000,000 for 
        fiscal year 1996 and such sums as may be necessary for each of 
        fiscal years 1997 through 2000.
            ``(3) Guidelines.--The Chairperson shall issue guidelines 
        to implement the provisions of paragraph (2). Such guidelines 
        shall be consistent with the requirements of title III, 
        regarding the Federal share of the cost of activities carried 
        out under title III.
            ``(4) Sums remaining available.--Sums appropriated pursuant 
        to paragraph (1) or (2) for any fiscal year shall remain 
        available for obligation until expended.
            ``(5) Total authorization.--There are authorized to be 
        appropriated to carry out the activities of the National 
        Endowment for the Humanities under this Act, including amounts 
        described in paragraph (1) or (2), or in subsection (c)(2), 
        $168,560,000 for fiscal year 1996, $165,190,000 for fiscal year 
        1997, $161,890,000 for fiscal year 1998, $158,660,000 for 
        fiscal year 1999, and $155,490,000 for fiscal year 2000.
    ``(c) Administration.--
            ``(1) National endowment for the arts.--Not more than 12 
        percent of the amount appropriated for a fiscal year under 
        subsection (a)(5) may be made available for the costs of 
        administering title II, or any other program for which the 
        Chairperson of the National Endowment for the Arts is 
        responsible, of which--
                    ``(A) not more than $100,000 shall be made 
                available for the President's Committee on the Arts and 
                the Humanities, none of which may be used to reimburse 
                members of the Committee for travel and related 
                expenses; and
                    ``(B) not to exceed $100,000 shall be made 
                available for fiscal year 1996 from amounts received 
                under section 207(a)(2) for official reception and 
                representation expenses and not to exceed $50,000 shall 
                be made available for each subsequent fiscal year from 
                such amounts for such expenses.
            ``(2) National endowment for the humanities.--Not more than 
        12 percent of the amount appropriated for a fiscal year under 
        subsection (b)(5) may be made available for the costs of 
        administering title III, or any other program for which the 
        Chairperson of the National Endowment for the Humanities is 
        responsible, of which--
                    ``(A) not more than $100,000 shall be made 
                available for the President's Committee on the Arts and 
                the Humanities, none of which may be used to reimburse 
                members of the Committee for travel and related 
                expenses; and
                    ``(B) not to exceed $100,000 shall be made 
                available for fiscal year 1996 from amounts received 
                under section 307(a)(2) for official reception and 
                representation expenses and not to exceed $50,000 shall 
                be made available for each subsequent fiscal year from 
                such amounts for such expenses.

              ``TITLE II--NATIONAL ENDOWMENT FOR THE ARTS

``SEC. 201. DEFINITIONS.

    ``As used in this title:
            ``(1) Developing arts organization.--The term `developing 
        arts organization' means a local arts organization of high 
        artistic promise that--
                    ``(A) serves as an important source of local arts 
                programming in a community; and
                    ``(B) has the potential to broaden public access to 
                the arts in rural and inner city areas and other 
                artistically underserved areas.
            ``(2) Final judgment.--The term `final judgment' means a 
        judgment that is either--
                    ``(A) not reviewed by any other court that has 
                authority to review such judgment; or
                    ``(B) is not reviewable by any other court.
            ``(3) Local arts agency.--The term `local arts agency' 
        means a community organization, or an agency of local 
        government, that primarily provides financial support, 
        services, or other programs for artists and arts organizations, 
        for the benefit of the community as a whole.
            ``(4) Obscene; determined to be obscene.--
                    ``(A) Obscene.--The term `obscene' means, with 
                respect to a project, production, or workshop that--
                            ``(i) the average person, applying 
                        contemporary community standards, would find 
                        that such project, production, or workshop, 
                        when taken as a whole, appeals to the prurient 
                        interest;
                            ``(ii) such project, production, or 
                        workshop depicts or describes sexual conduct in 
                        a patently offensive way; and
                            ``(iii) such project, production, or 
                        workshop, when taken as a whole, lacks serious 
                        literary, artistic, political or scientific 
                        value.
                    ``(B) Determined to be obscene.--The term 
                `determined to be obscene' means determined, in a final 
                judgment of a court of record and of competent 
                jurisdiction in the United States, to be obscene.
            ``(5) Production.--The term `production' means any activity 
        involving the execution or rendition of the arts and meeting 
        such standards as may be approved by the Chairperson of the 
        Endowment.
            ``(6) Project.--
                    ``(A) In general.--The term `project' means a 
                program organized to carry out the objectives of this 
                Act, including a program to foster United States 
                artistic creativity, to commission a work of art, or to 
                develop and enhance the widest public access, 
                knowledge, and understanding of the arts, and includes, 
                where appropriate, rental or purchase of a facility, 
                rental or purchase of land, and acquisition of 
                equipment.
                    ``(B) Renovation or construction.--Such term also 
                includes--
                            ``(i) the renovation of a facility if--
                                    ``(I) the amount of the expenditure 
                                of Federal funds for such purpose in 
                                the case of any facility does not 
                                exceed $250,000; and
                                    ``(II) two-thirds of the members of 
                                the National Council on the Arts (who 
                                are present and voting) recommend a 
                                grant involving an expenditure for such 
                                purpose; and
                            ``(ii) with respect to a grant under 
                        section 202(d), the construction of a facility, 
                        if--
                                    ``(I) such construction is for 
                                demonstration purposes or under unusual 
                                circumstances in which there is no 
                                other manner by which to accomplish an 
                                artistic purpose; and
                                    ``(II) two-thirds of the members of 
                                the National Council on the Arts (who 
                                are present and voting) recommend a 
                                grant involving an expenditure for such 
                                purpose.
            ``(7) Workshop.--The term `workshop' means a program the 
        primary purpose of which is to encourage the artistic 
        development or enjoyment of amateur, student, or other 
        participants.

``SEC. 202. ESTABLISHMENT OF THE NATIONAL ENDOWMENT FOR THE ARTS.

    ``(a) Establishment.--There is established within the Foundation a 
National Endowment for the Arts (referred to in this title as the 
`Endowment').
    ``(b) Chairperson.--
            ``(1) Appointment.--The Endowment shall be headed by a 
        chairperson, to be known as the Chairperson of the Endowment 
        (referred to in this title as the `Chairperson'), who shall be 
        appointed by the President, by and with the advice and consent 
        of the Senate.
            ``(2) Term.--
                    ``(A) In general.--The term of office of the 
                Chairperson shall be 4 years, except that any 
                Chairperson appointed to fill a vacancy shall serve for 
                the remainder of the term for which the predecessor of 
                the Chairperson was appointed. Notwithstanding any 
                other provision of this subparagraph, on the expiration 
                of the term of office of the Chairperson, the 
                Chairperson shall serve until the successor to the 
                Chairperson is appointed and has qualified.
                    ``(B) Reappointment.--The Chairperson shall be 
                eligible for reappointment.
    ``(c) Partnership Grants.--
            ``(1) Purposes.--The purpose of this subsection is to make 
        grants to States and local and regional groups to establish 
        local arts activities, with particular emphasis on arts 
        education and projects that reach rural and urban underserved 
        communities.
            ``(2) Grants to states.--
                    ``(A) Authority.--Using 70 percent of the funds 
                reserved under section 104(a)(1)(B) and such portion of 
                any funds made available under section 104(a)(2) as may 
                be appropriate, the Chairperson, acting on the 
                recommendation of the National Council on the Arts, 
                shall establish and carry out a program of basic State 
                grants to assist States--
                            ``(i)(I) in supporting projects, 
                        productions, or workshops that meet the 
                        standard of artistic excellence and artistic 
                        merit and that fulfill the purposes of this 
                        Act; and
                            ``(II) in developing projects, productions, 
                        or workshops that will furnish programs, 
                        facilities, and services in the arts to people 
                        and communities in each of the States; and
                            ``(ii) in carrying out activities that--
                                    ``(I) stimulate artistic activity 
                                and awareness, and broadening public 
                                access to the arts, in rural, inner-
                                city, and other areas that are 
                                underserved artistically;
                                    ``(II) enhance the artistic 
                                capabilities of developing arts 
                                organizations through artistic, 
                                programmatic, and staff development; or
                                    ``(III) provide technical 
                                assistance to developing arts 
                                organizations to improve managerial and 
                                organizational skills, financial 
                                systems management, and long-range 
                                fiscal planning.
                    ``(B) Application.--In order to receive a grant 
                under this paragraph for any fiscal year, a State shall 
                submit an application described in section 203 for such 
                grant at such time and in
                 such manner as shall be specified by the Chairperson 
and accompany such application with a State plan that the Chairperson 
finds--
                            ``(i) designates or provides for the 
                        establishment of a State agency (referred to in 
                        this section as the `State agency') as the sole 
                        agency for the administration of the State 
                        plan;
                            ``(ii) provides that funds paid to the 
                        State under this paragraph will be expended 
                        solely on projects, productions, or workshops 
                        described in subparagraph (A) and approved by 
                        the State agency;
                            ``(iii) provides that the State agency will 
                        make such reports, in such manner and 
                        containing such information, as the Chairperson 
                        may from time to time require, including a 
                        description of the progress made toward 
                        achieving the objectives of the State plan;
                            ``(iv) provides--
                                    ``(I) an assurance that the State 
                                agency has held, after reasonable 
                                notice, public meetings in the State to 
                                allow groups of artists, interested 
                                organizations, and the public to 
                                present views and make recommendations 
                                regarding the State plan; and
                                    ``(II) a summary of such 
                                recommendations and the response of the 
                                State agency to such recommendations; 
                                and
                            ``(v) contains--
                                    ``(I) for the most recent preceding 
                                year for which information is 
                                available, a description of the level 
                                of participation by artists, artists' 
                                organizations, and arts organizations 
                                in projects, productions, or workshops 
                                supported by funding from the State 
                                agency under this paragraph, and a 
                                description of the extent to which 
                                projects, productions, or workshops 
                                supported by funding from the State 
                                agency under this paragraph were 
                                available to all people and communities 
                                in the State; and
                                    ``(II) a description of projects, 
                                productions, or workshops supported by 
                                funding from the State agency under 
                                this paragraph that exist or are being 
                                developed to secure wider participation 
                                of artists, artists' organizations, and 
                                arts organizations described in 
                                subclause (I) or that address the 
                                availability of the arts to all people 
                                or communities described in subclause 
                                (I).
                    ``(C) Approval.--The Chairperson may not approve an 
                application described in subparagraph (B) unless the 
                accompanying State plan satisfies the requirements 
                specified in subparagraph (B).
                    ``(D) Allotments.--
                            ``(i) In general.--Of the sums available to 
                        carry out this paragraph for any fiscal year, 
                        each State that has an application approved by 
                        the Chairperson shall be allotted at least 
                        $200,000.
                            ``(ii) Insufficient funds.--If the sums 
                        available to carry out this paragraph for any 
                        fiscal year are insufficient to make the 
                        allotments under clause (i) in full, such sums 
                        shall be allotted so that each such State 
                        receives an equal amount.
                            ``(iii) Excess funds.--In any case in which 
                        the sums available to carry out this paragraph 
                        for any fiscal year are in excess of the amount 
                        required to make the allotments under clause 
                        (i)--
                                    ``(I) the amount of such excess 
                                that is not greater than 25 percent of 
                                the sums available to carry out this 
                                paragraph for such fiscal year shall be 
                                available to the Chairperson for making 
                                grants under this paragraph to States 
                                and, in accordance with subparagraph 
                                (H), regional groups; and
                                    ``(II) the amount of such excess 
                                for such fiscal year, if any, that 
                                remains after reserving in full for the 
                                Chairperson the amount required under 
                                subclause (I) shall be allotted so that 
                                each State that has an application 
                                approved by the Chair receives an in 
                                equal amount;
                        but in no event shall any State be allotted 
                        less than $200,000 under this paragraph.
                    ``(E) Federal share.--
                            ``(i) In general.--Funding provided through 
                        a grant made under this paragraph to a State 
                        for any fiscal year shall be available to each 
                        State that has an application approved by the 
                        Chairperson, and has the State plan 
                        accompanying the application in effect on the 
                        first day of such fiscal year, to pay not more 
                        than 50 percent of the total cost of carrying 
                        out any activity described in subparagraph (A).
                            ``(ii) Excess portion.--Except as provided 
                        in clause (iii), the portion of the funding 
                        provided through any grant made under 
                        subparagraph (D)(i) to a State for any fiscal 
                        year that exceeds $125,000 shall be available, 
                        at the discretion of the Chairperson, to pay 
                        not more than 100 percent of such cost of 
                        carrying out an activity under this paragraph 
                        if such activity would be unavailable to the 
                        residents of the State without such portion.
                            ``(iii) Percentage of grant funds.--The 
                        portion of the funding described in clause (ii) 
                        for any fiscal year that is available to pay 
                        not more than 100 percent of such cost, as 
                        described in clause (ii), shall not exceed 20 
                        percent of the total funding provided through 
                        such grant for such fiscal year.
                    ``(F) Prohibition on supplanting non-federal 
                funds.--Funds made available under this paragraph shall 
                be used to supplement, and shall not supplant, non-
                Federal funds expended for supporting activities 
                described in subparagraph (A).
                    ``(G) Unobligated funds.--Any amount allotted to a 
                State under subparagraph (D)(i) for any fiscal year 
                that is not obligated by the State earlier than 60 days 
                prior to the end of the fiscal year for which the 
                amount is appropriated shall be available for making 
                grants to regional groups.
                    ``(H) Special rule.--The provisions of this 
                paragraph (other than subparagraph (D)) shall apply to 
                regional groups receiving grants under this paragraph 
                in such manner, and to such extent, as the Chairperson 
                shall by regulation prescribe.
                    ``(I) Definition.--As used in subparagraph 
                (D)(iii)(II) and notwithstanding section 3(7), the term 
                `State' includes, in addition to the several States of 
                the United States, only the jurisdictions specified in 
                such section that have a population of 200,000 or more, 
                according to the latest decennial census.
            ``(3) Grants to promote access to the arts through support 
        of education, and expansion and advancement of the arts.--
                    ``(A) In general.--Using 30 percent of the funds 
                reserved under section 104(a)(1)(B) and such portion of 
                any funds made available under section 104(a)(2) as may 
                be appropriate, the Chairperson, acting on the 
                recommendation of the National Council on the Arts, may 
                establish and carry out a program of grants to States, 
                arts agencies, or other local or regional groups, in 
                order to foster and encourage exceptional talent, 
                public knowledge, understanding, and appreciation of 
                the arts, and to support the education, training, and 
                development of the artists of the United States, by 
                paying for the Federal share of the cost of carrying 
                out projects, productions, and workshops that will--
                            ``(i) promote and improve the availability 
                        of arts instruction, and improve the quality of 
                        arts education, through support of lifelong 
                        learning in the arts;
                            ``(ii) enhance the quality of arts 
                        instruction in programs of teacher education;
                            ``(iii) develop arts faculty resources and 
                        talents;
                            ``(iv) support and encourage the 
                        development of improved curriculum materials in 
                        the arts;
                            ``(v) improve evaluation and assessment of 
                        education in the arts programs and instruction;
                            ``(vi) foster cooperative programs with the 
                        Department of Education and other Federal 
                        agencies and encourage partnerships among arts 
                        and education agencies and organizations at 
                        State and local levels as well as among arts 
                        organizations, businesses, and educational and 
                        cultural institutions;
                            ``(vii) support apprenticeships, 
                        internships, and other career oriented work-
                        study experiences for artists and arts 
                        teachers, and encourage residencies of artists 
                        at all educational levels;
                            ``(viii) support the use of technology and 
                        improved facilities and resources in education 
                        in the arts programs at all levels;
                            ``(ix) foster the development of 
                        demonstration projects, demonstration 
                        productions, demonstration workshops, and 
                        demonstration programs in arts education and 
                        collect, and make available to the public, 
                        information on their implementation and 
                        effectiveness; and
                            ``(x) promote or advance arts at the local 
                        level.
                    ``(B) Application.--In order to receive a grant 
                under this paragraph for any fiscal year, a State, 
                agency, or group shall submit an application described 
                in section 203 for such grant at such time, in such 
                manner, and accompanies by such information, as shall 
                be specified by the Chairperson.
                    ``(C) Federal share.--Grants made under this 
                paragraph shall be subject to the requirements of 
                paragraph (2)(E), in the same manner and to the same 
                extent as grants made under paragraph (2)(D).
    ``(d) National Significance Grants.--
            ``(1) Purpose.--The purpose of this subsection is to make 
        grants to groups, including regional groups, of demonstrated 
        and substantial artistic and cultural importance, for projects, 
        productions, and workshops that will increase the access of all 
        the people of the United States to the best of the arts and 
        culture of the United States.
            ``(2) In general.--Using funds reserved under section 
        104(a)(1)(C) and such portion of any funds made available under 
        section 104(a)(2) as may be appropriate, the Chairperson, 
        acting on the recommendation of the National Council on the 
        Arts, may establish and carry out a program of grants to groups 
        who meet the standard of artistic excellence and artistic merit 
        and who are engaged in or concerned with the arts, for the 
        purpose of paying for the Federal share of the cost of--
                    ``(A) enabling the groups to provide or support 
                projects, productions, or workshops described in 
                paragraph (3) that will have a national, regional, or 
                otherwise substantial artistic or cultural impact; or
                    ``(B) providing administrative and management 
                improvements for the groups, particularly in the field 
                of long-range financial planning, including increasing 
                levels of community support and the range of 
                contributors to the programs of such groups.
            ``(3) Projects, productions, and workshops.--
                    ``(A) Required elements.--Each such project, 
                production, or workshop shall--
                            ``(i) have substantial national or regional 
                        cultural significance, and encourage 
                        professional excellence; or
                            ``(ii)(I) have significant merit; and
                            ``(II) be a project, production, or 
                        workshop that, if such a group did not receive 
                        a grant, might otherwise be unavailable to 
                        citizens for geographic or economic reasons.
                    ``(B) Permissible elements.--Each such project, 
                production, or workshop may--
                            ``(i) encourage access to, education in, 
                        and knowledge, understanding, enjoyment, and 
                        appreciation of, the arts by the public;
                            ``(ii) enhance managerial and 
                        organizational skills and capabilities;
                            ``(iii) use technology to broaden public 
                        access to the arts;
                            ``(iv) expand access to the arts for 
                        individuals with disabilities; or
                            ``(v) promote access to the arts for 
                        minority or underserved populations.
            ``(4) Federal share requirement.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), in the case of any grant 
                made under this subsection, the Federal share described 
                in paragraph (2) shall be 25 percent.
                    ``(B) Certain groups.--In the case of any grant 
                made under this subsection to a group with an annual 
                budget in excess of $3,000,000, the Federal share 
                described in paragraph (2) shall be 16.67 percent.
                    ``(C) Adjustments.--The Chairperson may increase 
                the Federal share applicable under this subsection for 
                a designated grant recipient, with review by the 
                National Council on the Arts. The Chairperson shall not 
                increase the Federal share above 50 percent for the 
                recipient. Not more than 10 percent of the funds made 
                available by the Endowment for grants under this 
                subsection for any fiscal year may be available for 
                grants for the fiscal year for which the Chairperson 
                increases the applicable Federal share.
            ``(5) Priority.--In awarding grants under this subsection, 
        the Chairperson shall give priority to projects, productions, 
        and workshops that increase the access of the public of the 
        United States to culture and the arts, including access by 
        touring, by regional or national dissemination, or by 
        geographic dispersion.
    ``(e) Direct Grants.--
            ``(1) Purpose.--The purpose of this subsection is to make 
        grants to groups, and individuals, that are broadly 
        representative of the cultural heritage of the United States 
        and broadly geographically representative, for projects, 
        productions, and workshops of the highest artistic excellence 
        and artistic merit.
            ``(2) In general.--Using funds reserved under section 
        104(a)(1)(D) and such portion of any funds made available under 
        section 104(a)(2) as may be appropriate, the Chairperson, 
        acting on the recommendation of the National Council on the 
        Arts, may establish and carry out a program of grants to 
        groups, or individuals who meet the standard of artistic 
        excellence and artistic merit and who are engaged in or 
        concerned with the arts, to pay for the Federal share of the 
        cost of projects, productions, or workshops that meet the 
        standard of artistic excellence and artistic merit and that 
        fulfill the purposes of this Act.
            ``(3) Federal share requirement.--The Federal share 
        described in paragraph (2) shall be 50 percent.
            ``(4) Priority.--In awarding grants under this subsection, 
        the Chairperson shall give priority to projects, productions, 
        and workshops that will be disseminated widely after 
        completion.
            ``(5) Adjustments.--The Chairperson may increase the 
        Federal share applicable under this subsection for a designated 
        grant recipient, with review by the National Council on the 
        Arts. Not more than 20 percent of the funds made available by 
        the Endowment for grants under this subsection for any fiscal 
        year may be available for grants for the fiscal year for which 
        the Chairperson increases the applicable Federal share.

``SEC. 203. APPLICATION PROCEDURES.

    ``(a) Application Requirement.--No grant shall be made under this 
title to any person unless the person submits an application to the 
Chairperson in accordance with regulations and procedures established 
by the Chairperson.
    ``(b) Procedures.--
            ``(1) In general.--
                    ``(A) Considerations.--In establishing such 
                regulations and procedures for applications, the 
                Chairperson shall ensure that--
                            ``(i) artistic excellence and artistic 
                        merit of the projects, productions, and 
                        workshops described in the application are the 
                        criteria by which the applications are judged 
                        by advisory panels described in section 204, 
                        taking into consideration general standards of 
                        decency and respect for the diverse beliefs and 
                        values of the public of the United States;
                            ``(ii) in selecting groups as recipients of 
                        grants under section 202(d), the Chairperson 
                        shall give particular regard to artistically 
                        underserved areas and artists and artistic 
                        groups that have traditionally been 
                        underrepresented; and
                            ``(iii) the projects, productions, and 
                        workshops described in the applications, and 
                        awards of grants under this title, are 
                        consistent with the objectives of section 202 
                        and this section.
                    ``(B) Obscenity provisions.--Such regulations and 
                procedures shall clearly indicate that obscenity is 
                without artistic merit, is not protected speech, and 
                shall not be funded under this title. Projects, 
                productions, and workshops that are determined to be 
                obscene shall be prohibited from receiving grants under 
                this title from the Endowment.
            ``(2) Considerations for the chairperson.--In considering 
        an application for a grant under this title, the Chairperson 
        shall consider the extent to which the projects, productions, 
        and workshops described in the application fulfill the purposes 
        of this Act, as well as their artistic excellence and artistic 
        merit, as determined by the Chairperson.
            ``(3) Construction.--The disapproval or approval by the 
        Chairperson of an application for a grant under this title 
        shall not be construed to mean, and shall not be considered to 
        be evidence that, the project, production, or workshop, for 
        which the applicant requested a grant, is or is not obscene.

``SEC. 204. ADVISORY PANELS.

    ``(a) In General.--The Chairperson shall utilize review by advisory 
panels--
            ``(1) as the first step in the review of applications 
        submitted under this Act; and
            ``(2) to make recommendations to the National Council on 
        the Arts in all cases involving requests for grants authorized 
        under this title, except cases in which the Chairperson 
        exercises authority delegated under section 205(f)(2).
    ``(b) Procedures.--
            ``(1) Criteria.--In reviewing the applications, such panels 
        shall recommend applications for projects, productions, and 
        workshops on the basis of artistic excellence and artistic 
        merit, consistent with section 203(b)(1)(A)(i).
            ``(2) Amounts.--The panels may recommend only general 
        ranges of funding to be provided through the grants and may not 
        recommend specific amounts of such funding.
            ``(3) Regulations and procedures.--The Chairperson shall 
        issue regulations and establish procedures to--
                    ``(A) ensure that all the panels are composed, to 
                the extent practicable, of individuals providing a wide 
                geographic, ethnic, and minority representation as well 
                as individuals reflecting diverse artistic and cultural 
                points of view;
                    ``(B) ensure that all the panels include at least 2 
                members representing lay individuals who are--
                            ``(i) knowledgeable about the arts;
                            ``(ii) not engaged in the arts as a 
                        profession; and
                            ``(iii) not employees of either artists' 
                        organizations or arts organizations;
                    ``(C) ensure that, when feasible, the procedures 
                used by the panels to carry out their responsibilities 
                are standardized;
                    ``(D) require each such panel--
                            ``(i) to create written records 
                        summarizing--
                                    ``(I) all meetings and discussions 
                                of such panel; and
                                    ``(II) the recommendations made by 
                                such panel to the Council; and
                            ``(ii) to make such records available to 
                        the public in a manner that protects the 
                        privacy of individual applicants and panel 
                        members;
                    ``(E) permit, when necessary and feasible, a site 
                visit to view the work of an applicant and deliver a 
                written report on the work being reviewed, in order to 
                assist panelists in making their recommendations;
                    ``(F)(i) require that the membership of each such 
                panel change substantially from year to year; and
                    ``(ii) provide that no individual be eligible to 
                serve on such a panel for more than 5 years, no 2 of 
                which may be consecutive; and
                    ``(G) ensure that the panels recommend more 
                applicants for grants than are anticipated can be 
                provided funding through the grants with available 
                funds.
            ``(4) Prohibition on conflicts of interest.--
                    ``(A) In general.--In making appointments to the 
                panels, the Chairperson shall ensure that an individual 
                who has a pending application for a grant authorized 
                under this title, or who is an employee or agent of an 
                organization with such a pending application, or who 
                has a direct or indirect financial interest in any 
                application under consideration by such a panel, does 
                not serve as a member of any panel before which such 
                application is pending.
                    ``(B) Duration.--The prohibition described in 
                subparagraph (A) shall commence with respect to such 
                individual beginning on the date such application is 
                submitted, and shall continue until a final decision on 
                the application has been reached by the Chairperson.

``SEC. 205. NATIONAL COUNCIL ON THE ARTS.

    ``(a) Establishment.--There is established within the Endowment a 
National Council on the Arts (referred to in this section as the 
`Council').
    ``(b) Composition.--
            ``(1) In general.--The Council shall be composed of the 
        Chairperson of the Endowment, who shall be the Chairperson of 
        the Council, and 20 other members appointed by the President, 
        by and with the advice and consent of the Senate, who shall be 
        selected--
                    ``(A) from among private citizens of the United 
                States who--
                            ``(i) are widely recognized for their broad 
                        knowledge of, or expertise in, the arts; and
                            ``(ii) have established records of 
                        distinguished service, or achieved eminence, in 
                        the arts;
                    ``(B) so as to include practicing artists, civic 
                cultural leaders, members of cultural professions, and 
                others who are professionally engaged in the arts; and
                    ``(C) so as collectively to provide an appropriate 
                distribution of members among the major art fields.
            ``(2) Qualifications.--The President may, in making such 
        appointments, give consideration to such recommendations as 
        may, from time to time, be submitted to the President by 
        leading national organizations in the major art fields. In 
        making such appointments, the President shall give due regard 
        to equitable representation of women, racially and ethnically 
        diverse individuals, and individuals with disabilities, who are 
        involved in the arts. Members of the Council shall be appointed 
        so as to represent equitably geographical areas in the United 
        States.
    ``(c) Terms.--
            ``(1) In general.--
                    ``(A) Staggered terms.--Each member of the Council 
                shall serve for a term of 6 years, and the terms shall 
                be staggered.
                    ``(B) Expiration.--Except as provided in paragraph 
                (2), the terms of all Council members shall expire on 
                the third day of September in the year of expiration.
                    ``(C) Reappointment after partial term.--Each 
                member who has served on the Council for 1 term of less 
                than 3 years shall be eligible for reappointment for 1 
                term of 6 years.
                    ``(D) Vacancy appointments.--Any member appointed 
                to fill a vacancy shall serve for the remainder of the 
                term for which the predecessor of the member was 
                appointed.
                    ``(E) Holdover service.--Notwithstanding any other 
                provision of this subsection, a member of the Council 
                shall serve after the expiration of the term of the 
                member until the successor to the member takes office.
            ``(2) Adjustment to reduce council.--
                    ``(A) Expiration of terms.--The terms of 10 members 
                of the Council whose terms would otherwise expire on 
                September 3, 1996 shall be deemed to expire on January 
                1, 1996.
                    ``(B) Terms.--The President shall appoint 4 members 
                of the Council to succeed members whose terms are 
                deemed to expire as described in subparagraph (A). The 
                terms of the successors shall expire on September 3, 
                2002.
    ``(d) Compensation.--Members of the Council shall receive 
compensation at a rate to be fixed by the Chairperson but not to exceed 
the daily equivalent of the maximum rate authorized for a position 
above grade GS-15 of the General Schedule under section 5108 of title 
5, United States Code, and be allowed travel expenses including per 
diem in lieu of subsistence, in the same amounts and to the same 
extent, as authorized under section 5703 of title 5, United States 
Code, for persons employed intermittently in Federal Government 
service.
    ``(e) Meetings and Duties.--
            ``(1) Meetings.--The Council shall meet at the call of the 
        Chairperson but not less often than twice during each calendar 
        year. Eleven members of the Council shall constitute a quorum. 
        All policy meetings of the Council shall be open to the public.
            ``(2) Duties.--The Council shall--
                    ``(A) advise the Chairperson with respect to 
                policies, programs, and procedures for carrying out the 
                functions of the Chairperson under this title;
                    ``(B) review applications for grants authorized 
                under this title and make recommendations to the 
                Chairperson with respect to--
                            ``(i) whether to approve particular 
                        applications for grants authorized under this 
                        title that have been determined by advisory 
                        panels to have artistic excellence and artistic 
                        merit; and
                            ``(ii) the amount of funding that the 
                        Chairperson should provide through such a grant 
                        with respect to each such application the 
                        Council recommends for approval;
                    ``(C) use as criteria for the recommendations of 
                the Council--
                            ``(i) the extent to which the works 
                        described in the applications fulfill the 
                        purposes of this Act; and
                            ``(ii) the artistic excellence and artistic 
                        merit of the works described in the 
                        applications,
                as determined by each Council member;
                    ``(D) recommend more applications for funding 
                through grants than are anticipated can be provided 
                funding through the grants with available funds;
                    ``(E) create written records summarizing--
                            ``(i) all meetings and discussions of the 
                        Council; and
                            ``(ii) recommendations made by the Council 
                        to the Chairperson; and
                    ``(F) make such records available to the public in 
                a manner that protects the privacy of individual 
                applicants for grants authorized under this title, 
                advisory panel members, and Council members.
    ``(f) Actions by Chairperson.--
            ``(1) In general.--The Chairperson shall not approve or 
        disapprove any application for a grant authorized under this 
        title until the Chairperson has received the recommendation of 
        the Council on such application. The Chairperson shall have 
        final authority to approve each such application, and shall 
        determine the final amount of funding through any grant 
        awarded. The Chairperson may not approve an application with 
        respect to which the Council makes a negative recommendation.
            ``(2) Delegations.--In the case of an application, or 
        amendment of an application, submitted under this title and 
        involving $35,000 or less, or a request for change in a grant 
        amount of 20 percent or less, the Chairperson may approve or 
        disapprove such application, amendment, or request, if such 
        action is taken pursuant to the terms of an express and direct 
        delegation of authority from the Council to the Chairperson, 
        and if each such action by the Chairperson is reported to the 
        Council at the next regularly scheduled meeting of the Council. 
        Such action by the Chairperson shall be used with discretion 
        and shall not become a normal practice of providing funding 
        through a grant authorized under this title. The terms of any 
        such delegation of authority shall not permit obligations for 
        expenditure of funds under such delegation for any fiscal year 
        that exceed an amount equal to 2 percent of the sums 
        appropriated for the fiscal year pursuant to section 104(a)(1).

``SEC. 206. LIMITATIONS ON GRANTS.

    ``(a) Prohibition on Subgrants.--The Chairperson shall establish 
procedures to ensure that no funding provided through a grant under 
this title, except a grant made to a State or regional group, may be 
used to make a grant to any other organization or individual to conduct 
activity independent of the direct grant recipient. Nothing in this 
subsection shall prohibit payments made in exchange for goods or 
services rendered.
    ``(b) Prohibition on Seasonal Support.--No grant awarded under this 
title may be used for seasonal support of a project, production, or 
workshop.
    ``(c) Use of Funds for Projects, Productions, and Workshops in 
Specified Disciplines.--Each project, production, or workshop funded 
under this title shall relate to arts, as defined in section 3.
    ``(d) Labor Standards.--
            ``(1) In general.--It shall be a condition of the receipt 
        of any grant under this title that the grant recipient furnish 
        adequate assurances to the Secretary of Labor that--
                    ``(A) all professional performers and related or 
                supporting professional personnel employed on projects 
                or productions, or in workshops, that are financed in 
                whole or in part under this title will be paid, without 
                subsequent deduction or rebate on any account, not less 
                than the minimum compensation as determined by the 
                Secretary of Labor to be the prevailing minimum 
                compensation for persons employed in similar 
                activities; and
                    ``(B) no part of any project, production, or 
                workshop that is financed in whole or in part under 
                this title will be performed or engaged in under 
                working conditions that are unsanitary or hazardous or 
                dangerous to the health and safety of the employees 
                engaged in such project, production, or workshop.
            ``(2) Evidence.--Compliance with the safety and sanitary 
        laws of the State in which the project, production, or workshop 
        described in paragraph (1)(B) is to take place shall be prima 
        facie evidence of compliance with the assurance described in 
        paragraph (1)(B).
            ``(3) Standards, regulations, and procedures.--The 
        Secretary of Labor shall have the authority to prescribe such 
        standards, regulations, and procedures as the Secretary of 
        Labor may determine to be necessary or appropriate to carry out 
        this subsection.
    ``(e) Limitation on Grant Award.--
            ``(1) Individuals.--No individual may receive more than 2 
        grant awards under this title.
            ``(2) Agencies and organizations.--No agency or 
        organization, other than a State council, may receive more than 
        3 grant awards in a year under this title.
    ``(f) Requirements for Groups.--A group shall be eligible for a 
grant under this title if--
            ``(1) no part of the net earnings of the group inures to 
        the benefit of any private stockholder, or individual; and
            ``(2) a donation to such group is allowable as a charitable 
        contribution under section 170(c) of the Internal Revenue Code 
        of 1986.
    ``(g) Citizenship Requirements for Individuals.--An individual 
shall be eligible to receive a direct grant under this title if at the 
time such grant is received such individual--
            ``(1) is a citizen or other national of the United States; 
        or
            ``(2) is an alien lawfully admitted to the United States 
        for permanent residence who--
                    ``(A) has filed an application for naturalization 
                in the manner prescribed by section 334 of the 
                Immigration and Nationality Act (8 U.S.C. 1445); and
                    ``(B) is not permanently ineligible to become a 
                citizen of the United States.
    ``(h) Installments.--The Chairperson shall establish procedures to 
provide for the distribution of funding provided through grants made 
under this title to recipients in installments except in exceptional 
cases in which the Chairperson determines that installments are not 
practicable. In providing any such installments to a recipient of a 
grant under this title, the Chairperson shall ensure that--
            ``(1) not more than two-thirds of such funding may be 
        provided at the time the application for the grant is approved; 
        and
            ``(2) the remainder of such funding may not be provided 
        until the Chairperson finds that the recipient of such grant is 
        complying substantially with this Act and with the conditions 
        under which such funding is provided to such recipient.
    ``(i) Loans.--Any loan made by the Chairperson under this title 
shall be made in accordance with terms and conditions approved by the 
Secretary of the Treasury.

``SEC. 207. ADMINISTRATIVE PROVISIONS.

    ``(a) Authorities of Chairperson.--In addition to any authorities 
vested in the Chairperson by other provisions of this Act, the 
Chairperson, in carrying out the functions of the Chairperson, shall 
have authority--
            ``(1) to prescribe such regulations and procedures as the 
        Chairperson determines to be necessary governing the manner in 
        which the functions of the Chairperson shall be carried out;
            ``(2)(A) to solicit, accept, receive, invest, and use money 
        and other property donated, bequeathed, or devised to the 
        Endowment, either absolutely or in trust, with or without a 
        condition or restriction, including a condition that the 
        Chairperson use other funds of the Endowment for the purposes 
        of the donation, bequest, or devise; and
            ``(B) to add such property to the appropriations for the 
        Endowment as provided in section 104(a)(2), and to use, sell, 
        or otherwise dispose of such property, for purposes of carrying 
        out the activities of the Endowment under this title;
            ``(3) to appoint and determine the compensation of such 
        employees, subject to title 5, United States Code, as may be 
        necessary to carry out the functions of the Chairperson, define 
        their duties, and supervise and direct their activities;
            ``(4) to procure the temporary and intermittent services of 
        experts and consultants, including panels of experts, and 
        compensate the experts and consultants in accordance with 
        section 3109 of title 5, United States Code;
            ``(5) to accept and utilize the voluntary services of 
        individuals and reimburse the individuals for travel expenses, 
        including per diem in lieu of subsistence, in the same amounts 
        and to the same extent as authorized under section 5703 of 
        title 5, United States Code, for persons employed 
        intermittently in Federal Government service;
            ``(6) to make advance, progress, and other payments without 
        regard to section 3324 of title 331, United States Code;
            ``(7) to rent office space in the District of Columbia; and
            ``(8) to make other necessary expenditures.
    ``(b) Publications.--Official publications of the Endowment under 
this title may be supported without regard to the provisions of section 
501 of title 44, United States Code, if the Chairperson consults with 
the Joint Committee on Printing of the Congress.
    ``(c) Coordination.--The Chairperson shall coordinate the programs 
of the Endowment, insofar as practicable, with other Federal programs 
and programs undertaken by other public agencies or private groups, and 
shall develop the programs of the Endowment with due regard to the 
contribution to the objectives of this title that can be made by other 
Federal agencies under the existing programs. The Chairperson may enter 
into interagency agreements to promote or assist with the arts-related 
activities of other Federal agencies, on a reimbursable or 
nonreimbursable basis, and may use funds authorized to be appropriated 
to carry out this title to pay for the costs of such promotion or 
assistance.

``SEC. 208. REPORTS.

    ``(a) Annual Report of Chairperson.--The Chairperson shall submit 
an annual report to the President for submission to the appropriate 
committees of Congress on or before the 15th day of April of each year. 
The report shall summarize the activities of the Endowment for the 
preceding year, and shall include such recommendations as the 
Chairperson determines to be appropriate.
    ``(b) State of the Arts Report.--
            ``(1) In general.--The Chairperson shall use data submitted 
        with State plans under section 202(c), and the information 
        contained in reports submitted by States under section 202(c) 
        or this section, to prepare a report on the state of the arts 
        in the United States.
            ``(2) Contents.--The state of the arts report shall include 
        a description of--
                    ``(A) the availability of the programs of the 
                Endowment to emerging, rural, and culturally diverse 
                artists, arts organizations, and communities; and
                    ``(B) the participation by such artists, 
                organizations, and communities in such programs.
            ``(3) Submission.--The state of the arts report shall be 
        submitted to the President and Congress, and provided to the 
        States, not later than October 1, 1996, and quadrennially 
        thereafter.
    ``(c) Financial Reports and Compliance.--
            ``(1) In general.--It shall be a condition of the receipt 
        of a grant made under this title by the Chairperson that--
                    ``(A) each applicant for such grant include in the 
                application described in section 203--
                            ``(i) a detailed description of the 
                        proposed project, production, or workshop for 
                        which the grant is requested;
                            ``(ii) a timetable for the completion of 
                        such proposed project, production, or workshop; 
                        and
                            ``(iii) an assurance that the applicant 
                        will meet the standards of artistic excellence 
                        and artistic merit;
                    ``(B)(i) each grant recipient under this title 
                carry out the proposal consistent with the description 
                contained in the application, as approved by the 
                Chairperson for funding through the grant; and
                    ``(ii) each such grant recipient seeking to change 
                the activities carried out under the grant justify the 
                requested change by a written request subject to 
                approval by the Chairperson; and
                    ``(C) each such grant recipient agree to and comply 
                with requirements to submit to the Chairperson--
                            ``(i) interim reports, including an annual 
                        report for each project, production, or 
                        workshop carried out under the grant during a 
                        period exceeding 1 year, describing the 
                        progress of the grant recipient in carrying out 
                        such project, production, or workshop and 
                        compliance by the grant recipient with the 
                        conditions of receipt of such grant;
                            ``(ii) financial reports containing such 
                        information as the Chairperson determines to be 
                        necessary to ensure that the funding made 
                        available through the grant is expended in 
                        accordance with the terms and conditions under 
                        which the grant is made;
                            ``(iii) a final report describing the 
                        project, production, or workshop carried out 
                        with the funding provided through the grant and 
                        the compliance by the grant recipient with the 
                        conditions of receipt of such grant, including 
                        the condition that the work assisted meet the 
                        standards of artistic excellence and artistic 
                        merit; and
                            ``(iv) in the case of a project or 
                        production, and if practicable, as determined 
                        by the Chairperson, a copy of such project or 
                        production.
            ``(2) Report requirements.--The Chairperson shall determine 
        the appropriate form and timing of interim reporting described 
        in paragraph (1)(C)(i) for a grant recipient under this title. 
        The reports and copy described in clauses (ii), (iii), and (iv) 
        of paragraph (1)(C) shall be due not later than 90 days after 
        the end of the period for which such grant recipient receives 
        funding through the grant or 90 days after the completion of 
        the project, production, or workshop, whichever occurs earlier. 
        The Chairperson may extend the 90-day period if the recipient 
        shows good cause why such an extension should be granted.
    ``(d) Evaluation.--The Chairperson shall conduct a post-award 
evaluation of activities for which grants are made by the Chairperson 
under this title. Such evaluation may include an audit to determine the 
accuracy of the reports required to be submitted by grant recipients 
under subsection (c).
    ``(e) Reports.--The Chairperson shall establish procedures to 
require that no additional funding shall be provided to a recipient of 
a grant authorized under this title unless such recipient has submitted 
to the Chairperson all required interim, financial, and final reports 
under subsection (c).

``SEC. 209. SANCTIONS AND PAYMENTS.

    ``(a) Failure To Satisfy Purposes.--If any recipient of a grant 
made under this title, or an indirect recipient of funding provided 
through the grant, substantially fails to satisfy the purposes for 
which such grant is made, as determined by the Chairperson, the 
Chairperson may--
            ``(1) for purposes of determining whether to make any 
        subsequent funding to the direct or indirect recipient under 
        this title, take into consideration the results of the post-
        award evaluation conducted under section 208(d);
            ``(2) prohibit the direct and indirect recipients from 
        using the name of, or in any way associating the project, 
        production, or workshop for which the grant was received with, 
        the Endowment; and
            ``(3) if such project, production, or workshop is 
        published, require that the publication contain the following 
        statement: `The opinions, findings, conclusions, and 
        recommendations expressed in this publication do not reflect 
        the views of the National Endowment for the Arts.'.
    ``(b) Noncompliance.--
            ``(1) In general.--The Chairperson shall take the actions 
        described in paragraph (2) whenever the Chairperson, after 
        providing reasonable notice and an opportunity for hearing, 
        finds that--
                    ``(A) a direct recipient of a grant under this 
                title, or an indirect recipient of funding provided 
                through the grant, is not complying substantially with 
                the provisions of this title;
                    ``(B) a State agency or regional group that 
                received a grant under this title, or an indirect 
                recipient of funding provided through the grant, is not 
                complying substantially with terms and conditions of 
                the State plan accompanying the application approved 
                for the grant under this title; or
                    ``(C) any funding provided under this title to a 
                recipient, State agency, or regional group described in 
                subparagraph (A) or (B) has been diverted from the 
                purposes for which such funding was provided.
            ``(2) Actions.--On making the finding described in 
        paragraph (1), the Chairperson shall immediately notify the 
        direct recipient, State agency, or regional group that received 
        the funding at issue that--
                    ``(A) no further funding will be provided under 
                this title to such recipient, agency, or group until 
                there is no longer any default or failure to comply or 
                the diversion is corrected; or
                    ``(B) if compliance or correction is impossible, 
                until such recipient, agency, or group repays or 
                arranges the repayment of the Federal funds that were 
                improperly diverted or expended.
    ``(c) Obscene Works.--
            ``(1) Determination.--If, after providing reasonable notice 
        and opportunity for a hearing on the record, the Chairperson 
        determines that a direct recipient of a grant under this title, 
        or an indirect recipient of funding provided through the grant, 
        used the funding for a project, production, or workshop that is 
        determined to be obscene, the Chairperson shall require that 
        until the direct recipient repays such funding (in such amount, 
        and under such terms and conditions, as the Chairperson 
        determines to be appropriate) to the Endowment, no subsequent 
        funding shall be provided under this title to such recipient.
            ``(2) Crediting.--Funds repaid under this subsection to the 
        Endowment shall be deposited in the Treasury of the United 
        States and credited as miscellaneous receipts.
            ``(3) Application.--
                    ``(A) Timing.--This subsection shall not apply with 
                respect to grants made before October 1, 1990.
                    ``(B) Duration.--This subsection shall not apply 
                with respect to a project, production, or workshop 
                after the expiration of the 7-year period beginning on 
                the latest date on which a grant is made under this 
                title for such project, production, or workshop.
    ``(d) Program Income.--
            ``(1) In general.--A recipient of funding under this title 
        shall pay the amount described in paragraph (2) to the 
        Endowment if the Chairperson finds that the recipient has 
        derived program income from the project, production, or 
        workshop funded that exceeds the lesser of--
                    ``(A) $50,000; or
                    ``(B) twice the amount of the funding.
            ``(2) Amount.--The amount referred to in paragraph (1) is 
        \1/3\ of the amount of the revenue, but not more than the 
        amount of the funding.
    ``(e) Account.--Except as otherwise provided in this Act, the 
Treasurer of the United States shall deposit funds paid under 
subsection (d), or repaid under this Act, in a special interest bearing 
account to the credit of the Endowment.

``SEC. 210. AWARDS.

    ``(a) National Medal of Arts.--
            ``(1) Establishment.--There is established a National Medal 
        of Arts, which shall be a medal of such design as is determined 
        to be appropriate by the President, on the basis of 
        recommendations submitted by the National Council on the Arts, 
        and which shall be awarded as provided in this subsection.
            ``(2) Awards.--The President shall from time to time award 
        the National Medal of Arts, on the basis of recommendations 
        from the National Council on the Arts, to individuals or groups 
        who in the judgment of the President are deserving of special 
        recognition by reason of their outstanding contributions to the 
        excellence, growth, support, and availability of the arts in 
        the United States.
            ``(3) Number of medals.--Not more than 12 of such medals 
        may be awarded in any calendar year.
            ``(4) Qualifications.--An individual may be awarded the 
        National Medal of Arts if at the time such award is made such 
        individual meets the requirements of section 206(g).
            ``(5) Groups.--A group may be awarded the National Medal of 
        Arts if such group is organized or incorporated in the United 
        States.
            ``(6) Ceremonies.--The presentation of the National Medal 
        of Arts shall be made by the President with such ceremonies as 
        the President may determine to be appropriate, including 
        attendance by appropriate Members of Congress.
    ``(b) Award for Distinguished Lifetime Service for the Arts.--
            ``(1) Establishment.--There is established an Award for 
        Distinguished Lifetime Service for the Arts.
            ``(2) Ceremonies.--The Chairperson shall present the award 
        described in paragraph (1) to each of the former Chairpersons 
        of the Endowment in conjunction with such ceremonies as the 
        Director may determine to be appropriate to celebrate the 30th 
        anniversary of the establishment of the Endowment.
            ``(3) Effective date.--Paragraphs (1) and (2) shall be 
        effective during the period beginning on the date of enactment 
        of this section and ending on March 31, 1996.
    ``(c) Funds.--The Chairperson shall use amounts received by the 
National Endowment for the Arts under section 207(a)(2) to carry out 
this section.

           ``TITLE III--NATIONAL ENDOWMENT FOR THE HUMANITIES

``SEC. 301. DEFINITIONS.

    ``As used in this title:
            ``(1) Project.--
                    ``(A) In general.--The term `project' means an 
                activity organized to carry out the objectives of this 
                title.
                    ``(B) Renovation or construction.--Such term also 
                includes--
                            ``(i) the renovation of a facility if--
                                    ``(I) the amount of the expenditure 
                                of Federal funds for such purpose in 
                                the case of any facility does not 
                                exceed $250,000; and
                                    ``(II) two-thirds of the members of 
                                the National Council on the Humanities 
                                (who are present and voting) approve of 
                                a grant or contract involving an 
                                expenditure for such purpose; and
                            ``(ii) for purposes of section 302(d), the 
                        construction of a facility if--
                                    ``(I) such construction is for 
                                demonstration purposes or under unusual 
                                circumstances in which there is no 
                                other manner by which to accomplish a 
                                humanistic purpose; and
                                    ``(II) two-thirds of the members of 
                                the National Council on the Humanities 
                                (who are present and voting) approve of 
                                a grant or contract involving an 
                                expenditure for such purpose.
            ``(2) Workshop.--The term `workshop' means an activity the 
        primary purpose of which is to promote scholarship and teaching 
        among the participants.

``SEC. 302. ESTABLISHMENT OF THE NATIONAL ENDOWMENT FOR THE HUMANITIES.

    ``(a) Establishment.--There is established within the Foundation a 
National Endowment for the Humanities (referred to in this title as the 
`Endowment').
    ``(b) Chairperson.--
            ``(1) Appointment.--The Endowment shall be headed by a 
        chairperson, to be known as the Chairperson of the Endowment 
        (referred to in this title as the `Chairperson'), who shall be 
        appointed by the President, by and with the advice and consent 
        of the Senate.
            ``(2) Term.--
                    ``(A) In general.--The term of office of the 
                Chairperson shall be 4 years, except that any 
                Chairperson appointed to fill a vacancy shall serve for 
                the remainder of the term for which the predecessor of 
                the Chairperson was appointed. Notwithstanding any 
                other provision of this subparagraph, on the expiration 
                of the term of office of the Chairperson, the 
                Chairperson shall serve until the successor to the 
                Chairperson is appointed and has qualified.
                    ``(B) Reappointment.--The Chairperson shall be 
                eligible for reappointment.
    ``(c) Partnership Grants.--
            ``(1) Purpose.--The purpose of this subsection is to 
        support programs of humanities councils at the State and local 
        levels.
            ``(2) Definition.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), as used in this subsection, the term 
                `State entity' means--
                            ``(i) a State that obtains approval of an 
                        application submitted under paragraph (4); or
                            ``(ii) in a case in which a State fails to 
                        submit an application under paragraph (4), an 
                        appropriate entity that obtains approval of an 
                        application submitted under paragraph (5).
                    ``(B) Jurisdiction.--
                            ``(i) State entity.--As used in paragraph 
                        (6)(C)(ii), the term `State entity' means a 
                        State entity, as defined in subparagraph (A), 
                        for a State.
                            ``(ii) State.--As used in clause (i), and 
                        notwithstanding section 3(7), the term `State', 
                        includes, in addition to the several States of 
                        the United States, only the jurisdictions 
                        specified in such section that have a 
                        population of 200,000 or more, according to the 
                        latest decennial census.
            ``(3) General authority.--Using funds reserved under 
        section 104(b)(1)(B) and such portion of any funds made 
        available under section 104(b)(2) as may be appropriate, the 
        Chairperson, acting on the recommendation of the National 
        Council on the Humanities, may, in accordance with the 
        provisions of this subsection, establish and carry out a 
        program of grants to assist State entities--
                    ``(A) in paying for not more than 50 percent of the 
                cost (except as otherwise provided in this subsection) 
                of supporting activities that achieve the objectives 
                described in subparagraphs (A) through (F) of 
                subsection (d)(2) and in subparagraphs (A) and (B) of 
                subsection (e)(2); or
                    ``(B) in matching contributions from non-Federal 
                sources made to a trust fund the purpose of which is to 
                provide long-term financial support for such 
                activities.
            ``(4) Grants through state agencies.--
                    ``(A) Designation.--In order to receive a grant 
                under this subsection for any fiscal year, if a State 
                desires to designate or to provide for the 
                establishment of a State agency (referred to in this 
                section as a `State agency') as the sole agency for the 
                administration of the State plan referred to in 
                subparagraph (B) relating to the grant, such State 
                shall designate as the State agency the humanities 
                council or shall provide for the establishment of such 
                a council.
                    ``(B) Application and state plan.--In any State 
                that designates or provides for the establishment of a 
                State agency as described in subparagraph (A), the 
                chief executive officer of the State shall submit, 
                before the beginning of each fiscal year, an 
                application for a grant and accompany such application 
                with a State plan that the Chairperson finds--
                            ``(i) designates or provides for the 
                        establishment of a State agency;
                            ``(ii) provides that the chief executive 
                        officer of the State will appoint new members 
                        to the State humanities council designated or 
                        established under subparagraph (A), as 
                        vacancies occur as a result of the expiration 
                        of the terms of members of such council, until 
                        the chief executive officer has appointed all 
                        of the members of such council;
                            ``(iii) provides for the expenditure, from 
                        State funds, of an amount equal to 50 percent 
                        of the portion of the funding received by such 
                        State through a grant made under paragraph 
                        (6)(A) (relating to the minimum State 
                        allotment), or 25 percent of the total amount 
                        of funding received by such State through 
                        grants made under this subsection, whichever is 
                        greater, for the fiscal year involved (except 
                        as otherwise provided in paragraph (7));
                            ``(iv) provides that funds paid to the 
                        State under this subsection will be expended 
                        solely on activities, approved by the State 
                        agency, that--
                                    ``(I) achieve the objectives 
                                described in subparagraphs (A) through 
                                (F) of subsection (d)(2) and 
                                subparagraphs (A) and (B) of subsection 
                                (e)(2); and
                                    ``(II) are designed to bring the 
                                humanities to the public;
                            ``(v) provides assurances that State funds 
                        will be made available for the purpose of 
                        meeting the requirements of this subparagraph;
                            ``(vi) provides that the State agency will 
                        make such reports, in such manner and 
                        containing such information, as the Chairperson 
                        may from time to time require, including a 
                        description of the progress made toward 
                        achieving the objectives of the State plan;
                            ``(vii) provides--
                                    ``(I) an assurance that the State 
                                agency has held, after reasonable 
                                notice, public meetings in the State to 
                                allow scholars, interested 
                                organizations, and the public to 
                                present views and make recommendations 
                                regarding the State plan; and
                                    ``(II) a summary of such 
                                recommendations and of the response of 
                                the State agency to such 
                                recommendations; and
                            ``(viii) contains--
                                    ``(I) for the most recent preceding 
                                year for which information is 
                                available, a description of the level 
                                of participation by scholars and 
                                scholarly organizations in activities 
                                supported by funding from the State 
                                agency under this subsection and a 
                                description of the extent to which the 
                                activities supported by funding from 
                                the State agency under this subsection 
                                were available to all people and 
                                communities in the State; and
                                    ``(II) a description of activities 
                                supported by funding from the State 
                                agency under this subsection that exist 
                                or are being developed to secure wider 
                                participation of scholars and scholarly 
                                organizations described in subclause 
                                (I) or that address the availability of 
                                the humanities to all people or 
                                communities described in subclause (I).
                    ``(C) Approval.--The Chairperson may not approve an 
                application described in subparagraph (B) unless the 
                accompanying State plan satisfies the requirements 
                specified in subparagraph (B).
            ``(5) Grants to appropriate entities.--
                    ``(A) Designation.--In any State in which the chief 
                executive officer of the State fails to submit an 
                application under paragraph (4)(B) for a fiscal year, 
                the Chairperson may make grants under paragraph (3) to 
                an appropriate entity in the State, and each such 
                entity shall establish a procedure that ensures that 8 
                members of the governing body of such entity shall be 
                appointed by an appropriate officer or agency of such 
                State, except that in no event may the number of such 
                members exceed \1/3\ of the total membership of such 
                governing body. The officer or agency shall select the 
                members from among individuals who have knowledge of or 
                experience in the humanities.
                    ``(B) Application and plan.--If a State fails to 
                submit an application under paragraph (4)(B) for a 
                fiscal year, any appropriate entity in the State 
                desiring to receive a grant under this subsection for 
                the fiscal year shall submit an application for such 
                grant at such time and in such manner as shall be 
                specified by the Chairperson, and accompany such 
                application with a State plan that the Chairperson 
                finds--
                            ``(i) provides assurances that such entity 
                        will comply with the requirements of 
                        subparagraph (A);
                            ``(ii) provides that funds paid to such 
                        entity under this paragraph will be expended 
                        solely on activities that--
                                    ``(I) achieve the objectives 
                                described in subparagraphs (A) through 
                                (F) of subsection (d)(2) and 
                                subparagraphs (A) and (B) of subsection 
                                (e)(2); and
                                    ``(II) are designed to bring the 
                                humanities to the public;
                            ``(iii) establishes a membership policy 
                        that is designed to ensure broad public 
                        representation with respect to activities 
                        administered by such entity;
                            ``(iv) provides for a nomination process 
                        that ensures opportunities for nomination to 
                        membership in the governing body from various 
                        groups in such State and from a variety of 
                        segments of the population of such State, 
                        including individuals who by reason of their 
                        achievement, scholarship, or creativity in the 
                        humanities, are especially qualified to serve 
                        as members of the body;
                            ``(v) provides for a membership rotation 
                        process that ensures the regular rotation of 
                        the membership and officers of such entity;
                            ``(vi) establishes reporting procedures 
                        that are designed to inform the chief executive 
                        officer of such State, and other appropriate 
                        officers and agencies, of the activities of 
                        such entity;
                            ``(vii) establishes procedures to ensure 
                        public access to information relating to such 
                        activities;
                            ``(viii) provides that such entity will 
                        make such reports, at such times, in such 
                        manner, and containing such information, as the 
                        Chairperson may require, including a 
                        description of the progress made toward 
                        achieving the objectives of the State plan;
                            ``(ix) provides--
                                    ``(I) an assurance that the entity 
                                has held, after reasonable notice, 
                                public meetings in the State to allow 
                                scholars, interested organizations, and 
                                the public to present views and make 
                                recommendations regarding the State 
                                plan; and
                                    ``(II) a summary of such 
                                recommendations and of the response of 
                                the entity to such recommendations; and
                            ``(x) contains--
                                    ``(I) for the most recent preceding 
                                year for which information is 
                                available, a description of the level 
                                of participation by scholars and 
                                scholarly organizations in activities 
                                supported by funding from the entity 
                                under this subsection, and a 
                                description of the extent to which 
                                activities supported by funding from 
                                the entity under this subsection were 
                                available to all people and communities 
                                in the State; and
                                    ``(II) a description of activities 
                                supported by funding from the entity 
                                under this subsection that exist or are 
                                being developed to secure wider 
                                participation of scholars and scholarly 
                                organizations described in subclause 
                                (I) or that address the availability of 
                                the humanities to all people or 
                                communities described in subclause (I).
                    ``(C) Approval.--The Chairperson may not approve an 
                application described in subparagraph (B) unless the 
                accompanying plan satisfies the requirements specified 
                in subparagraph (B).
            ``(6) Allotments.--
                    ``(A) In general.--Of the sums available to carry 
                out this subsection for any fiscal year, each State 
                entity shall be allotted at least $200,000.
                    ``(B) Insufficient sums.--If the sums available to 
                carry out this subsection for any fiscal year are 
                insufficient to make the allotments under subparagraph 
                (A) in full, such sums shall be allotted so that each 
                State entity receives an equal amount.
                    ``(C) Excess funds.--In any case in which the sums 
                available to carry out this subsection for any fiscal 
                year are in excess of the amount required to make the 
                allotments under subparagraph (A)--
                            ``(i) 34 percent of the amount of such 
                        excess for such fiscal year shall be available 
                        to the Chairperson for making grants under this 
                        subsection to State entities;
                            ``(ii) 44 percent of the amount of such 
                        excess for such fiscal year shall be allotted 
                        so that each State entity receives an equal 
                        amount; and
                            ``(iii) the remainder of the amount of such 
                        excess for such fiscal year shall be allotted 
                        so that each State entity receives an amount 
                        that bears the same ratio to such
                         remainder as the population of the State for 
which the application is approved bears to the population of all the 
States.
            ``(7) Limitations.--
                    ``(A) Federal share.--
                            ``(i) In general.--Funding provided through 
                        a grant made under this subsection to a State 
                        entity for any fiscal year shall be available 
                        to each State entity that has an application 
                        approved by the Chairperson, and has the State 
                        plan accompanying the application in effect on 
                        the first day of such fiscal year, to pay not 
                        more than 50 percent of the total cost of 
                        carrying out any activity described in 
                        paragraph (3).
                            ``(ii) Excess portion.--Except as provided 
                        in clause (iii), the portion of the funding 
                        provided through any grant made under paragraph 
                        (6)(A) to a State entity for any fiscal year 
                        that exceeds $125,000 shall be available, at 
                        the discretion of the Chairperson, to pay not 
                        more than 100 percent of such cost of carrying 
                        out an activity under this subsection if such 
                        activity would be unavailable to the residents 
                        of the State without such portion.
                            ``(iii) Percentage of grant funds.--The 
                        portion of the funding described in clause (ii) 
                        for any fiscal year that is available to pay 
                        not more than 100 percent of such cost, as 
                        described in clause (ii), shall not exceed 20 
                        percent of the total of the funding provided 
                        through such grant for such fiscal year.
                    ``(B) Prohibition on supplanting non-federal 
                funds.--Funds made available under this subsection 
                shall be used to supplement, and shall not supplant, 
                non-Federal funds expended for supporting activities 
                described in paragraph (3).
            ``(8) Unobligated funds.--Any amount allotted to a State 
        entity under paragraph (6) for any fiscal year that is not 
        obligated by the State entity earlier than 60 days prior to the 
        end of the fiscal year for which the amount is appropriated 
        shall be available for making grants under subsection (d).
            ``(9) Limitation on multiple entities.--The Chairperson may 
        not make grants under this subsection to more than 1 entity in 
        any State.
    ``(d) National Grants.--
            ``(1) Purpose.--The purpose of this subsection is to 
        provide support for grants to groups, individuals, and State 
        agencies or entities to carry out activities relating to 
        education and the public humanities that have a national 
        audience and are of national significance, such as activities 
        relating to elementary, secondary, and postsecondary education 
        in the humanities, media projects, projects in museums and by 
        historical organizations, projects in libraries and archives, 
        public humanities projects, endowment building, and technology 
        activities.
            ``(2) General authority.--Using funds reserved under 
        section 104(b)(1)(C) and such portion of any funds made 
        available under section 104(b)(2) as may be appropriate, the 
        Chairperson, acting on the recommendation of the National 
        Council on the Humanities, may establish and carry out a 
        program of grants to groups or, in appropriate cases, 
        individuals who meet the standard of excellence in the 
        humanities and significance in the humanities, or State 
        agencies or entities to pay for the Federal share of the cost 
        of activities to--
                    ``(A) develop and encourage the pursuit of a 
                national policy to further the public good through 
                public funding of the humanities;
                    ``(B) initiate and support research and programs to 
                strengthen the research and teaching potential of the 
                United States in the humanities;
                    ``(C) foster the exchange of information in the 
                humanities;
                    ``(D) foster education in, and public understanding 
                and appreciation of, the humanities;
                    ``(E) support projects that foster or promote 
                literacy;
                    ``(F) ensure that the benefit of the programs of 
                the Endowment will also be available to the citizens of 
                the United States where such programs would otherwise 
                be unavailable due to geographic or economic reasons;
                    ``(G) enable cultural organizations and 
                institutions to increase the levels of continuing 
                support and to increase the range of contributors to 
                the program of such organizations or institutions;
                    ``(H) provide administrative and management 
                improvements for cultural organizations and 
                institutions, particularly in the field of long-range 
                financial planning;
                    ``(I) enable cultural organizations and 
                institutions to increase audience participation in, and 
                appreciation of, programs sponsored by such 
                organizations and institutions;
                    ``(J) develop new sources of long-term support for 
                educational, scholarly, and public programs in the 
                humanities, including renovating or constructing 
                facilities, augmenting or establishing endowment funds, 
                and purchasing capital equipment to ensure financial 
                stability;
                    ``(K) stimulate greater cooperation among cultural 
                organizations and institutions especially designed to 
                serve better the communities in which such 
                organizations or institutions are located; and
                    ``(L) foster greater citizen involvement in 
                planning the cultural development of a community.
            ``(3) Federal share requirement.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Federal share described in 
                paragraph (2) shall be 50 percent.
                    ``(B) Adjustment.--The Federal share of the cost of 
                activities described in paragraph (2)(J) shall be 25 
                percent.
    ``(e) Research and Scholarship Grants.--
            ``(1) Purpose.--The purpose of this subsection is to 
        encourage the development and dissemination of significant 
        scholarship in the humanities by groups, individuals, and State 
        agencies or entities such as fellowships for college and 
        university faculty and independent scholars, dissertation 
        grants, summer stipends, and funds for scholarly publications, 
        reference materials, basic research, institutional programs, 
        and preservation.
            ``(2) General authority.--Using funds reserved under 
        section 104(b)(1)(D) and such portion of any funds made 
        available under section 104(b)(2) as may be appropriate, the 
        Chairperson, acting on the recommendation of the National 
        Council on the Humanities, may establish and carry out a 
        program of grants to groups, individuals, State agencies, and 
        State entities for the purpose of paying for the Federal share 
        of the cost of--
                    ``(A) initiating and supporting (including 
                supporting through fellowships) training, workshops, 
                programs, research, and publications, in the 
                humanities, that have substantial scholarly and 
                cultural significance and that reach or reflect the 
                cultural heritage of the United States;
                    ``(B) fostering projects that provide access to, 
                and preserving materials important to research, 
                education, and public understanding regarding, the 
                humanities;
                    ``(C) enabling cultural organizations and 
                institutions to increase the levels of continuing 
                support and to increase the range of contributors to 
                the program of such organizations or institutions; and
                    ``(D) providing administrative and management 
                improvements for cultural organizations and 
                institutions, particularly in the field of long-range 
                financial planning.
            ``(3) Training; workshops; research.--A fellowship awarded 
        to an individual under paragraph (2)(A) may be used for the 
        purpose of supporting study or research at an appropriate 
        nonprofit institution selected by the individual, for a stated 
        period of time. The total amount of any grant under paragraph 
        (2)(A) to any group engaging in workshop activities for which 
        an admission or other charge is made to the general public 
        shall not exceed 30 percent of the total cost of such 
        activities.
            ``(4) Considerations.--In selecting a group or individual 
        as a recipient of a grant to be made under this subsection, the 
        Chairperson shall give particular regard to scholars, and 
        educational and cultural institutions, that traditionally have 
        been underrepresented.
            ``(5) Federal share.--The Federal share described in 
        paragraph (2) shall be 50 percent.

``SEC. 303. APPLICATION PROCEDURES.

    ``To be eligible to receive a grant under this title, a State, 
group, individual, agency, or organization shall submit an application 
to the Chairperson at such time, in such manner, and containing such 
information as the Chairperson may prescribe.

``SEC. 304. REVIEW PANELS.

    ``The Chairperson may select panels of experts under section 
307(a)(4) to review and make recommendations with respect to the 
approval of applications for grants authorized under this title. In 
selecting the panels, the Chairperson shall appoint individuals who 
have exhibited expertise and leadership in the field under review, who 
broadly represent diverse humanistic perspectives and geographic 
factors, and who broadly represent cultural diversity.

``SEC. 305. NATIONAL COUNCIL ON THE HUMANITIES.

    ``(a) Establishment.--There is established within the Endowment a 
National Council on the Humanities (referred to in this section as the 
`Council').
    ``(b) Composition.--
            ``(1) In general.--The Council shall be composed of the 
        Chairperson of the Endowment, who shall be the Chairperson of 
        the Council, and 20 other members appointed by the President, 
        by and with the advice and consent of the Senate, who shall be 
        selected--
                    ``(A) from among private citizens of the United 
                States who--
                            ``(i) are recognized for their broad 
                        knowledge of, or expertise in, the humanities; 
                        and
                            ``(ii) have established records of 
                        distinguished service, or achieved eminence, in 
                        the humanities;
                    ``(B) so as to include scholars and others who are 
                professionally engaged in the humanities; and
                    ``(C) so as collectively to provide an appropriate 
                distribution of members among the major humanities 
                fields.
            ``(2) Qualifications.--The President may, in making such 
        appointments, give consideration to such recommendations as 
        may, from time to time, be submitted to the President by 
        leading national organizations in the major humanities fields. 
        In making such appointments, the President shall give due 
        regard to equitable representation of women, racially and 
        ethnically diverse individuals, and individuals with 
        disabilities, who are involved in the humanities. Members of 
        the Council shall be appointed so as to represent equitably 
        geographical areas in the United States.
    ``(c) Terms.--
            ``(1) In general.--
                    ``(A) Staggered terms.--Each member of the Council 
                shall serve for a term of 6 years, and the terms shall 
                be staggered.
                    ``(B) Expiration.--Except as provided in paragraph 
                (2), the terms of all Council members shall expire on 
                the third day of September in the year of expiration.
                    ``(C) Reappointment after partial term.--Each 
                member who has served on the Council for 1 term of less 
                than 3 years shall be eligible for reappointment for 1 
                term of 6 years.
                    ``(D) Vacancy appointments.--Any member appointed 
                to fill a vacancy shall serve for the remainder of the 
                term for which the predecessor of the member was 
                appointed.
                    ``(E) Holdover service.--Notwithstanding any other 
                provision of this subsection, a member of the Council 
                shall serve after the expiration of the term of the 
                member until the successor to the member takes office.
            ``(2) Adjustment to reduce council.--
                    ``(A) Expiration of terms.--The terms of--
                            ``(i) 8 members of the Council whose terms 
                        would otherwise expire on September 3, 1996; 
                        and
                            ``(ii) 1 member of the Council whose term 
                        expired on September 3, 1995;
                shall be deemed to expire on January 1, 1996.
                    ``(B) Terms.--The President shall appoint 3 members 
                of the Council to succeed members whose terms are 
                deemed to expire as described in subparagraph (A). The 
                terms of the successors shall expire on September 3, 
                2002.
    ``(d) Compensation.--Members of the Council shall receive 
compensation at a rate to be fixed by the Chairperson but not to exceed 
the daily equivalent of the maximum rate authorized for a position 
above grade GS-15 of the General Schedule under section 5108 of title 
5, United States Code, and be allowed travel expenses including per 
diem in lieu of subsistence, as authorized under section 5703 of title 
5, United States Code, for persons employed intermittently in Federal 
Government service.
    ``(e) Meetings and Duties.--
            ``(1) Meetings.--The Council shall meet at the call of the 
        Chairperson but not less often than twice during each calendar 
        year. Eleven members of the Council shall constitute a quorum.
            ``(2) Duties.--The Council shall--
                    ``(A) advise the Chairperson with respect to 
                policies, programs, and procedures for carrying out the 
                functions of the Chairperson under this title; and
                    ``(B) review applications for grants authorized 
                under this title and make recommendations to the 
                Chairperson with respect to the approval of each 
                application.
    ``(f) Actions by Chairperson.--
            ``(1) In general.--The Chairperson shall not approve or 
        disapprove any application for a grant authorized under this 
        title until the Chairperson has received the recommendation of 
        the Council on such application, unless the Council fails to 
        make a recommendation on the application within a reasonable 
        time.
            ``(2) Delegations.--In the case of an application submitted 
        under this title and involving $30,000 or less, the Chairperson 
        may approve or disapprove such application if such action is 
        taken pursuant to the terms of an express and direct delegation 
        of authority from the Council to the Chairperson, and if each 
        such action by the Chairperson is reviewed by the Council. The 
        terms of any such delegation of authority shall not permit 
        obligations for expenditure of funds under such delegation for 
        any fiscal year that exceed an amount equal to 3 percent of the 
        sums appropriated for the fiscal year pursuant to section 
        104(b)(1).

``SEC. 306. LIMITATIONS ON GRANTS.

    ``(a) Criteria for Eligibility for Grants.--
            ``(1) Definitions.--As used in this subsection:
                    ``(A) Production entity.--The term `production 
                entity' means any partnership, corporation, business 
                enterprise, or other organization engaged in the 
                production of a film or publication.
                    ``(B) Group.--The term `group' includes any State 
                or local government, State or local public agency, 
                Indian tribe, or nonprofit association, organization, 
                or society.
                    ``(C) National of the united states.--The term 
                `national of the United States' means a citizen of the 
                United States or a person who owes permanent allegiance 
                to the United States.
            ``(2) Criteria.--The Chairperson, with the advice of the 
        National Council on the Humanities, shall establish criteria 
        for eligibility for grants made under this title. The criteria 
        shall provide the following:
                    ``(A) Group.--A group shall be eligible to receive 
                a grant under this title if--
                            ``(i) no part of the net earnings of the 
                        group inures to the benefit of any private 
                        stockholder, or individual; and
                            ``(ii) a donation to such group is 
                        allowable as a charitable contribution under 
                        section 170(c) of the Internal Revenue Code of 
                        1986.
                    ``(B) Production entity.--A production entity shall 
                be eligible to receive a grant under this title if the 
                Chairperson, with the advice of the National Council on 
                the Humanities, determines that providing such a grant 
                will significantly advance the knowledge or 
                understanding of the humanities in the United States.
                    ``(C) Individual.--An individual shall be eligible 
                to receive a grant under this title if--
                            ``(i) the individual is a citizen or 
                        national of the United States; and
                            ``(ii) the Chairperson, with the advice of 
                        the National Council on the Humanities, 
                        determines that providing the grant will 
                        significantly advance the knowledge or 
                        understanding of the humanities in the United 
                        States.
    ``(b) Admission Charges.--No grant shall be made under this title 
to an activity (other than an activity conducted by a school, college, 
or university) for which a direct or an indirect admission charge is 
requested if the proceeds, after deducting reasonable costs, are used 
for purposes other than assisting the grant recipient to develop high 
standards of scholarly excellence or encourage greater appreciation of 
the humanities by the citizens of the United States.
    ``(c) Labor Standards.--The provisions of section 206(d) shall 
apply to activities financed under this title in the same manner and to 
the same extent as the provisions apply to activities financed under 
title II.

``SEC. 307. ADMINISTRATIVE PROVISIONS.

    ``(a) Authorities of Chairperson.--In addition to any authorities 
vested in the Chairperson by other provisions of this Act, the 
Chairperson, in carrying out the functions of the Chairperson, shall 
have authority--
            ``(1) to prescribe such regulations and procedures as the 
        Chairperson determines to be necessary governing the manner in 
        which the functions of the Chairperson shall be carried out;
            ``(2)(A) to solicit, accept, receive, invest, and use money 
        and other property donated, bequeathed, or devised to the 
        Endowment, either absolutely or in trust, with or without a 
        condition or restriction, including a condition that the 
        Chairperson use other funds of the Endowment for the purposes 
        of the donation, bequest, or devise; and
            ``(B) to add such property to the appropriations for the 
        Endowment as provided in section 104(b)(2), and to use, sell, 
        or otherwise dispose of such property, for purposes of carrying 
        out the activities of the Endowment under this title;
            ``(3) to appoint and determine the compensation of such 
        employees, subject to title 5, United States Code, as may be 
        necessary to carry out the functions of the Chairperson, define 
        their duties, and supervise and direct their activities;
            ``(4) to procure the temporary and intermittent services of 
        experts and consultants, including panels of experts, and 
        compensate the experts and consultants in accordance with 
        section 3109 of title 5, United States Code;
            ``(5) to accept and utilize the voluntary services of 
        individuals and reimburse the individuals for travel expenses, 
        including per diem in lieu of subsistence, in the same amounts 
        and to the same extent as authorized under section 5703 of 
        title 5, United States Code, for persons employed 
        intermittently in Federal Government service;
            ``(6) to make advance, progress, and other payments without 
        regard to section 3324 of title 331, United States Code;
            ``(7) to rent office space in the District of Columbia; and
            ``(8) to make other necessary expenditures.
    ``(b) Publications.--Official publications of the Endowment under 
this title may be supported without regard to the provisions of section 
501 of title 44, United States Code, if the Chairperson consults with 
the Joint Committee on Printing of the Congress.
    ``(c) Coordination.--The Chairperson shall coordinate the programs 
of the Endowment, insofar as practicable, with other Federal programs, 
programs of designated State humanities agencies, and programs 
undertaken by other public agencies or private groups, and shall 
develop the programs of the Endowment with due regard to the 
contribution to the objectives of this title that can be made by other 
Federal agencies under the existing programs. The Chairperson may enter 
into interagency agreements to promote or assist with the humanities-
related activities of other Federal agencies, on a reimbursable or 
nonreimbursable basis, and may use funds authorized to be appropriated 
to carry out this title to pay for the costs of such promotion or 
assistance.

``SEC. 308. REPORTS.

    ``(a) Annual Report of Chairperson.--The Chairperson shall submit 
an annual report to the President for submission to the appropriate 
committees of Congress on or before the 15th day of April of each year. 
The report shall summarize the activities of the Endowment for the 
preceding year, and may include such evaluations and other reports as 
the Chairperson determines to be appropriate.
    ``(b) State of the Humanities Report.--
            ``(1) In general.--The Chairperson shall use data submitted 
        with State plans under section 302(c), and the information 
        contained in reports submitted by States under section 302(c) 
        or this section, to prepare a report on the state of the 
        humanities in the United States.
            ``(2) Contents.--The state of the humanities report shall 
        include a description of--
                    ``(A) the availability of the programs of the 
                Endowment to emerging, rural, and culturally diverse 
                scholars, cultural and educational organizations, and 
                communities; and
                    ``(B) the participation by such scholars, 
                organizations, and communities in such programs.
            ``(3) Submission.--The state of the humanities report shall 
        be submitted to the President and Congress, and provided to the 
        States, not later than October 1, 1996, and quadrennially 
        thereafter.
    ``(c) Financial Reports and Compliance.--
            ``(1) In general.--It shall be a condition of the receipt 
        of a grant made under this title by the Chairperson that each 
        such grant recipient agree to
         and comply with requirements to submit to the Chairperson--
                    ``(A) financial reports containing such information 
                as the Chairperson determines to be necessary to ensure 
                that the funding provided through the grant is expended 
                in accordance with the terms and conditions under which 
                the grant is made;
                    ``(B) a report describing the activity carried out 
                with the funding provided through the grant and the 
                compliance by the grant recipient with the conditions 
                of receipt of such grant, including the condition that 
                the work assisted meet the standards of excellence in 
                humanities and significance in the humanities; and
                    ``(C) if practicable, as determined by the 
                Chairperson, a copy of the work resulting from the 
                activity.
            ``(2) Reports.--The reports and copy described in paragraph 
        (1) shall be due not later than 90 days after the end of the 
        period for which such grant recipient receives funding through 
        the grant or 90 days after the completion of the work, 
        whichever occurs earlier. The Chairperson may extend the 90-day 
        period if the recipient shows good cause why such an extension 
        should be granted.
    ``(d) Evaluation.--The Chairperson shall conduct a post-award 
evaluation of activities for which grants are made by the Chairperson 
under this title. Such evaluation may include an audit to determine the 
accuracy of the reports required to be submitted by grant recipients 
under subsection (c).
    ``(e) Annual Report of National Council on the Humanities.--
            ``(1) In general.--The National Council on the Humanities 
        shall submit an annual report to the President for submission 
        to the appropriate committees of Congress on or before the 15th 
        day of April of each year.
            ``(2) Contents.--The report shall include written records 
        summarizing--
                    ``(A) all meetings and discussions of the Council; 
                and
                    ``(B) recommendations made by the Council to the 
                Chairperson.
            ``(3) Privacy.--The Council shall ensure that the 
        information contained in the report will be presented in a 
        manner that protects the privacy of individual applicants for 
        grants authorized under this title and Council members.

``SEC. 309. SANCTIONS AND PAYMENTS.

    ``(a) Failure To Satisfy Purposes.--If any recipient of a grant 
made under this title, or an indirect recipient of funding provided 
through the grant, substantially fails to satisfy the purposes for 
which such grant is made, as determined by the Chairperson, the 
Chairperson may--
            ``(1) for purposes of determining whether to make any 
        subsequent funding to the direct or indirect recipient under 
        this title, take into consideration the results of the post-
        award evaluation conducted under section 308(d);
            ``(2) prohibit the direct and indirect recipients from 
        using the name of, or in any way associating the project, 
        production, or workshop for which the grant was received with, 
        the Endowment; and
            ``(3) if such project, production, or workshop is 
        published, require that the publication contain the following 
        statement: `The opinions, findings, conclusions, and 
        recommendations expressed in this publication do not reflect 
        the views of the National Endowment for the Humanities.'.
    ``(b) Noncompliance.--
            ``(1) In general.--The Chairperson shall take the actions 
        described in paragraph (2) whenever the Chairperson, after 
        providing reasonable notice and an opportunity for hearing, 
        finds that--
                    ``(A) a direct recipient of a grant under this 
                title, or an indirect recipient of funding provided 
                through the grant, is not complying substantially with 
                the provisions of this title;
                    ``(B) a State agency that received a grant under 
                this title, or an indirect recipient of funding 
                provided through the grant, is not complying 
                substantially with terms and conditions of the State 
                plan accompanying the application approved for the 
                grant under this title; or
                    ``(C) any funding provided under this title to a 
                recipient or State agency described in subparagraph (A) 
                or (B) has been diverted from the purposes for which 
                such funding was provided.
            ``(2) Actions.--On making the finding described in 
        paragraph (1), the Chairperson shall immediately notify the 
        direct recipient or State agency that received the funding at 
        issue that--
                    ``(A) no further funding will be provided under 
                this title to such recipient or agency until there is 
                no longer any default or failure to comply or the 
                diversion is corrected; or
                    ``(B) if compliance or correction is impossible, 
                until such recipient or agency repays or arranges the 
                repayment of the Federal funds that were improperly 
                diverted or expended.
    ``(c) Program Income.--
            ``(1) In general.--A recipient of funding under this title 
        shall pay the amount described in paragraph (2) to the 
        Endowment if the Chairperson finds that the recipient has 
        derived program income from the activities funded that exceeds 
        the lesser of--
                    ``(A) $50,000; or
                    ``(B) twice the amount of the funding.
            ``(2) Amount.--The amount referred to in paragraph (1) is 
        \1/3\ of the amount of the revenue, but not more than the 
        amount of the funding.
    ``(d) Account.--Except as otherwise provided in this Act, the 
Treasurer of the United States shall deposit funds paid under 
subsection (c), or repaid under this Act, in a special interest bearing 
account to the credit of the Endowment.

``SEC. 310. AWARDS.

    ``The Chairperson, with the advice of the National Council on the 
Humanities, may make the following annual awards:
            ``(1) Jefferson lecture in the humanities award.--The 
        Chairperson may award annually the Jefferson Lecture in the 
        Humanities Award to 1 individual for distinguished intellectual 
        achievement in the humanities. Each such award shall not exceed 
        $10,000.
            ``(2) Charles frankel prize.--The Chairperson may award 
        annually the Charles Frankel Prize to honor individuals who 
        have made outstanding contributions to the public understanding 
        of the humanities. Not more than 5 individuals may receive such 
        prize each year. Each such prize shall not exceed $5,000.''.

SEC. 102. CONFORMING AMENDMENTS.

    Section 8G of the Inspector General Act of 1978 (5 U.S.C. App.) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``the National 
                Endowment for the Arts, the National Endowment for the 
                Humanities,'' and inserting ``the portion of the 
                National Foundation on the Arts and the Humanities 
                consisting of the National Endowment for the Arts and 
                the National Endowment for the Humanities,''; and
                    (B) in paragraph (4), by striking ``except that'' 
                and all that follows and inserting the following: 
                ``except that--
                    ``(A) with respect to the National Science 
                Foundation, such term means the National Science Board; 
                and
                    ``(B) with respect to the National Endowment for 
                the Arts and the National Endowment for the Humanities, 
                the term means the Chairperson of the National 
                Endowment for the Arts with respect to matters relating 
                to the National Endowment for the Arts and the 
                Chairperson of the National Endowment for the 
                Humanities with respect to matters relating to the 
                Chairperson of the National Endowment for the 
                Humanities;'';
            (2) in subsection (c), by inserting before the period the 
        following: ``, except that the Inspector General for the 
        National Endowment for the Arts and the National Endowment for 
        the Humanities shall be jointly appointed by the Chairperson of 
        the National Endowment for the Arts and the Chairperson of the 
        National Endowment for the Humanities''; and
            (3) in the first sentence of subsection (d), by inserting 
        before the period the following: ``, except as provided in 
        section 103 of the National Foundation on the Arts and the 
        Humanities Act of 1965''.
               TITLE II--MUSEUM AND LIBRARY SERVICES ACT

SEC. 201. MUSEUM AND LIBRARY SERVICES.

    The Museum Services Act (20 U.S.C. 961 et seq.) is amended to read 
as follows:

                ``TITLE II--MUSEUM AND LIBRARY SERVICES

                    ``Subtitle A--General Provisions

``SEC. 201. SHORT TITLE.

    ``This title may be cited as the `Museum and Library Services Act'.

``SEC. 202. GENERAL DEFINITIONS.

    ``As used in this title:
            ``(1) Commission.--The term `Commission' means the National 
        Commission on Libraries and Information Science established 
        under section 3 of the National Commission on Libraries and 
        Information Science Act (20 U.S.C. 1502).
            ``(2) Director.--The term `Director' means the Director of 
        the Institute appointed under section 204.
            ``(3) Foundation.--The term `Foundation' means the National 
        Foundation on the Arts and the Humanities.
            ``(4) Institute.--The term `Institute' means the Institute 
        of Museum and Library Services established under section 203.
            ``(5) Museum board.--The term `Museum Board' means the 
        National Museum Services Board established under section 276.

``SEC. 203. INSTITUTE OF MUSEUM AND LIBRARY SERVICES.

    ``(a) Establishment.--There is established within the Foundation an 
Institute of Museum and Library Services.
    ``(b) Offices.--The Institute shall consist of an Office of Museum 
Services and an Office of Library Services. There shall be a National 
Museum Services Board in the Office of Museum Services.

``SEC. 204. DIRECTOR OF THE INSTITUTE.

    ``(a) Appointment.--
            ``(1) In general.--The Institute shall be headed by a 
        Director, appointed by the President, by and with the advice 
        and consent of the Senate.
            ``(2) Term.--The Director shall serve for a term of 4 
        years.
            ``(3) Qualifications.--Beginning with the first individual 
        appointed to the position of Director after the date of 
        enactment of the Arts, Humanities, and Museum Amendments of 
        1995, every second individual so appointed shall be appointed 
        from among individuals who have special competence with regard 
        to library and information services. Beginning with the second 
        individual appointed to the position of Director after the date 
        of enactment of the Arts, Humanities, and Museum Amendments of 
        1995, every second individual so appointed shall be appointed 
        from among individuals who have special competence with regard 
        to museum services.
    ``(b) Compensation.--The Director shall be compensated at the rate 
provided for level III of the Executive Schedule under section 5314 of 
title 5, United States Code.
    ``(c) Duties and Powers.--The Director shall perform such duties 
and exercise such powers as may be prescribed by law, including--
            ``(1) awarding financial assistance for activities 
        described in this title; and
            ``(2) using not less than 5 percent and not more than 7 
        percent of the funds made available under this title for each 
        fiscal year to award financial assistance for projects that 
        involve both--
                    ``(A) activities relating to library services, as 
                described in subtitle B, carried out in accordance with 
                such subtitle; and
                    ``(B) activities relating to museum services, as 
                described in subtitle C, carried out in accordance with 
                such subtitle.
    ``(d) Nondelegation.--The Director shall not delegate any of the 
functions of the Director to any person who is not directly responsible 
to the Director.
    ``(e) Coordination.--The Director shall ensure coordination of the 
policies and activities of the Institute with the policies and 
activities of other agencies and offices of the Federal Government 
having interest in and responsibilities for the improvement of museums 
and libraries. Such agencies and offices shall include the National 
Endowment for the Arts, the National Endowment for the Humanities, the 
National Science Foundation, appropriate units in the Department of 
Education, the Library of Congress, the Smithsonian Institution, and 
related agencies and offices.

``SEC. 205. DEPUTY DIRECTORS.

    ``(a) Appointment.--The Office of Library Services shall be headed 
by a Deputy Director, who shall be appointed by the Director. The 
Office of Museum Services shall be headed by a Deputy Director, who 
shall be appointed by the Director.
    ``(b) Compensation.--Each such position of Deputy Director shall be 
a Senior Executive Service position, which shall be paid at a rate of 
pay for a position at ES-1 of the Senior Executive Service schedule.

``SEC. 206. PERSONNEL.

    ``(a) In General.--The Director may, in accordance with applicable 
provisions of title 5, United States Code, appoint and determine the 
compensation of such employees as the Director determines to be 
necessary to carry out the duties of the Institute.
    ``(b) Voluntary Services.--The Director may accept and utilize the 
voluntary services of individuals and reimburse the individuals for 
travel expenses, including per diem in lieu of subsistence, in the same 
amounts and to the same extent as authorized under section 5703 of 
title 5, United States Code, for persons employed intermittently in 
Federal Government service.

``SEC. 207. CONTRIBUTIONS.

    ``The Institute shall have authority to solicit, accept, receive, 
and invest in the name of the United States, gifts, bequests, or 
devises of money and other property or services and to use such 
property or services in furtherance of the functions of the Institute. 
Any proceeds from such gifts, bequests, or devises, after acceptance by 
the Institute, shall be paid by the donor or the representative of the 
donor to the Director. The Director shall enter the proceeds in a 
special interest bearing account to the credit of the Institute for the 
purposes in each case specified.
             ``Subtitle B--Library Services and Technology

``SEC. 211. SHORT TITLE.

    ``This subtitle may be cited as the `Library Services and 
Technology Act'.

``SEC. 212. STATEMENT OF PURPOSE; RECOGNITION OF NEED.

    ``(a) Statement of Purpose.--The purposes of this subtitle are as 
follows:
            ``(1) To stimulate excellence and promote equity and 
        lifelong access to learning and information resources in all 
        types of libraries.
            ``(2) To combine the ability of the Federal Government to 
        stimulate significant improvement and innovation in library 
        services with support at State and local levels, and with 
        cooperative programs with other agencies and with public and 
        private sector partnerships, to achieve national library 
        service goals.
            ``(3) To establish national library service goals for the 
        21st century. Such goals are that every person in America will 
        be served by a library that--
                    ``(A) provides all users access to information 
                through regional, State, national and international 
                electronic networks;
                    ``(B) contributes to a productive workforce, and to 
                economic development, by providing resources and 
                services designed to meet local community needs;
                    ``(C) provides a full range of resources and 
                programs to develop reading and critical thinking 
                skills for children and adults;
                    ``(D) provides targeted services to people of 
                diverse geographic, cultural and socioeconomic 
                backgrounds, to individuals with disabilities, and to 
                people with limited functional literacy or information 
                skills; and
                    ``(E) provides adequate hours of operation, 
                facilities, staff, collections, and electronic access 
                to information.
    ``(b) Recognition of Need.--The Congress recognizes that strong 
library services are essential to empower people to succeed in our 
Nation's increasingly global and technological environment.

``SEC. 213. DEFINITIONS.

    ``As used in this subtitle:
            ``(1) Indian tribe.--The term `Indian tribe' means any 
        tribe, band, nation, or other organized group or community, 
        including any Alaskan native village, regional corporation, or 
        village corporation, as defined in or established pursuant to 
        the Alaskan Native Claims Settlement Act, which is recognized 
        by the Secretary of the Interior as eligible for the special 
        programs and services provided by the United States to Indians 
        because of their status as Indians.
            ``(2) Library consortia.--The term `library consortia' 
        means any local, statewide, regional, interstate, or 
        international cooperative association of library entities which 
        provides for the systematic and effective coordination of the 
        resources of school, public, academic, and special libraries 
        and information centers for improved services for their 
        clientele.
            ``(3) Library entity.--The term `library entity' means a 
        library that performs all activities of a library relating to 
        the collection and organization of library materials and other 
        information and that makes the materials and information 
        publicly available. Such term includes State library 
        administrative agencies and the libraries, library related 
        entities, cooperatives, and consortia through which library 
        services are made publicly available.
            ``(4) Public library.--The term `public library' means a 
        library that serves free of charge all residents of a 
        community, district, or region, and receives its financial 
        support in whole or in part from public funds. Such term also 
        includes a research library, which, for the purposes of this 
        sentence, means a library, which--
                    ``(A) makes its services available to the public 
                free of charge;
                    ``(B) has extensive collections of books, 
                manuscripts, and other materials suitable for scholarly 
                research which are not available to the public through 
                public libraries;
                    ``(C) engages in the dissemination of humanistic 
                knowledge through services to readers, fellowships, 
                educational and cultural programs, publications of 
                significant research, and other activities; and
                    ``(D) is not an integral part of an institution of 
                higher education.
            ``(5) State.--The term `State', unless otherwise specified, 
        includes the several States of the United States, the District 
        of Columbia, the Commonwealth of Puerto Rico, Guam, American 
        Samoa, the Virgin Islands, the Commonwealth of the Northern 
        Mariana Islands, the Republic of the Marshall Islands, the 
        Federated States of Micronesia, and the Republic of Palau.
            ``(6) State advisory council.--The term `State advisory 
        council' means an advisory council established pursuant to 
        section 252.
            ``(7) State library administrative agency.--The term `State 
        library administrative agency' means the official agency of a 
        State charged by law of that State with the extension and 
        development of public library services throughout the State, 
        which has adequate authority under law of the State to 
        administer the State plan in accordance with the provisions of 
        this subtitle.
            ``(8) State plan.--The term `State plan' means the document 
        which gives assurances that the officially designated State 
        library administrative agency has the fiscal and legal 
        authority and capability to administer all aspects of this 
        subtitle, provides assurances for establishing the State's 
        policies, priorities, criteria, and procedures necessary to the 
        implementation of all programs under this subtitle, submits 
        copies for approval as required by regulations promulgated by 
        the Director, and identifies a State's library needs and sets 
        forth the activities to be taken toward meeting the identified 
        needs supported with the assistance of Federal funds made 
        available under this subtitle.

``SEC. 214. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Authority.--
            ``(1) In general.--There are authorized to be appropriated 
        to the Secretary of Education--
                    ``(A) for the purpose of awarding grants under 
                subchapter A of chapter 2 and for related 
                administrative expenses, $75,000,000 for fiscal year 
                1996, and such sums as may be necessary for each of the 
                4 succeeding fiscal years; and
                    ``(B) for the purpose of awarding grants under 
                subchapter B of chapter 2 and for related 
                administrative expenses, $75,000,000 for fiscal year 
                1996, and such sums as may be necessary for each of the 
                4 succeeding fiscal years.
            ``(2) Transfer.--The Secretary of Education shall transfer 
        any funds appropriated under the authority of paragraph (1) to 
        the Director to enable the Director to carry out this subtitle.
    ``(b) Joint Projects.--Not less than 5 percent and not more than 7 
percent of the funds appropriated under this section for a fiscal year 
may be made available for projects described in section 204(c)(2) for 
the fiscal year.
    ``(c) Administration.--Not more than 10 percent of the funds 
appropriated under this section for a fiscal year may be used to pay 
for the administrative costs of carrying out this subtitle.

                ``CHAPTER 1--BASIC PROGRAM REQUIREMENTS

``SEC. 221. RESERVATIONS AND ALLOTMENTS.

    ``(a) Reservations.--From the amount appropriated under the 
authority of section 214(a) for any fiscal year, the Director--
            ``(1) shall reserve 2 percent to award grants in accordance 
        with section 261; and
            ``(2) shall reserve 8 percent to carry out a national 
        leadership program in library science in accordance with 
        section 262.
    ``(b) Allotments.--
            ``(1) In general.--From the sums appropriated under the 
        authority of section 214(a) and not reserved under subsection 
        (a) for any fiscal year, the Director shall allot the minimum 
        allotment, as determined under paragraph (3), to each State. 
        Any sums remaining after minimum allotments have been made for 
        such year shall be allotted in the manner set forth in 
        paragraph (2).
            ``(2) Remainder.--From the remainder of any sums 
        appropriated under the authority of section 214(a) that are not 
        reserved under subsection (a) and not allotted under paragraph 
        (1) for any fiscal year, the Director shall allot to each State 
        an amount that bears the same relation to such remainder as the 
        population of the State bears to the population of all the 
        States.
            ``(3) Minimum allotment.--
                    ``(A) In general.--For the purposes of this 
                subsection, the minimum allotment shall be--
                            ``(i) with respect to appropriations for 
                        the purposes of subchapter A of chapter 2, 
                        $200,000 for each State, except that the 
                        minimum allotment shall be $40,000 in the case 
                        of Guam, American Samoa, the Virgin Islands, 
                        the Commonwealth of the Northern Mariana 
                        Islands, the Republic of the Marshall Islands, 
                        the Federated States of Micronesia, and the 
                        Republic of Palau; and
                            ``(ii) with respect to appropriations for 
                        the purposes of subchapter B of chapter 2, 
                        $200,000 for each State, except that the 
                        minimum allotment shall be $40,000 in the case 
                        of Guam, American Samoa, the Virgin Islands, 
                        the Commonwealth of the Northern Mariana 
                        Islands, the Republic of the Marshall Islands, 
                        the Federated States of Micronesia, and the 
                        Republic of Palau.
                    ``(B) Ratable reductions.--If the sums appropriated 
                under the authority of section 214(a) and not reserved 
                under subsection (a) for any fiscal year are 
                insufficient to fully satisfy the aggregate of the 
                minimum allotments for all States for that purpose for 
                such year, each of such minimum allotments shall be 
                reduced ratably.
            ``(4) Data.--The population of each State and of all the 
        States shall be determined by the Director on the basis of the 
        most recent data available from the Bureau of the Census.

``SEC. 222. ADMINISTRATION AND EVALUATION.

    ``(a) In General.--Not more than 5 percent of the total funds 
received under this subtitle for any fiscal year by a State may be used 
for administration and ongoing State evaluations under section 251.
    ``(b) Construction.--Nothing in this section shall be construed to 
limit spending for evaluation costs under section 251 from sources 
other than this subtitle.

``SEC. 223. PAYMENTS; FEDERAL SHARE; AND MAINTENANCE OF EFFORT 
              REQUIREMENTS.

    ``(a) Payments.--The Director shall pay to each State library 
administrative agency having a State plan approved under section 224 
the Federal share of the cost of the activities described in the State 
plan.
    ``(b) Federal Share.--
            ``(1) In general.--Except as provided in paragraph (3), the 
        Federal share shall be 50 percent.
            ``(2) Non-federal share.--The non-Federal share of payments 
        shall be provided from non-Federal State or local sources.
            ``(3) Special rule.--The Federal share--
                    ``(A) for the Commonwealth of Puerto Rico, Guam, 
                American Samoa, the Virgin Islands, and the 
                Commonwealth of the Northern Mariana Islands, shall be 
                66 percent; and
                    ``(B) for the Republic of the Marshall Islands, the 
                Federated States of Micronesia, and the Republic of 
                Palau, shall be 100 percent.
    ``(c) Maintenance of Effort.--
            ``(1) In general.--The amount otherwise payable to a State 
        for a fiscal year under chapter 2 shall be reduced if the level 
        of State expenditures, as described in paragraph (2), for the 
        previous fiscal year are less than the average of the total of 
        such expenditures for the 3 fiscal years preceding that 
        previous fiscal year. The amount of the reduction in allotment 
        for any fiscal year shall be in exact proportion to the amount 
        which the State fails to meet the requirement of this 
        subsection.
            ``(2) Level of state expenditures.--The level of State 
        expenditures for the purposes of paragraph (1) shall include 
        all State dollars expended by the State library administrative 
        agency for library programs that are consistent with the 
        purposes of this subtitle. All funds included in the 
        maintenance of effort calculation under this subsection shall 
        be expended during the fiscal year for which the determination 
        is made, and shall not include capital expenditures, special 
        one-time project costs, or similar windfalls.
            ``(3) Waiver.--The Director may waive the requirements of 
        paragraph (1) if the Director determines that such a waiver 
        would be equitable due to exceptional or uncontrollable 
        circumstances such as a natural disaster or a precipitous and 
        unforeseen decline in the financial resources of the State.

``SEC. 224. STATE PLANS.

    ``(a) State Plan Required.--
            ``(1) In general.--In order to be eligible to receive a 
        grant under this subtitle, a State library administrative 
        agency shall submit a State plan to the Director not later than 
        April 1, 1996.
            ``(2) Duration.--The State plan shall cover a period of 4 
        fiscal years.
            ``(3) Revisions.--If a State library administrative agency 
        makes a substantive revision to its State plan, then the State 
        library administrative agency shall submit to the Director an 
        amendment to the State plan containing such revision not later 
        than April 1 of the fiscal year preceding the fiscal year for 
        which the amendment will be effective.
    ``(b) Contents.--The State plan shall--
            ``(1) specify priorities for improvement of library 
        services so that all people in the State have convenient and 
        appropriate access to information delivered by libraries 
        through new and emerging technologies assisted under subchapter 
        A of chapter 2;
            ``(2) identify those persons who need special services 
        under subchapter B of chapter 2 and specify priorities for 
        meeting the purpose described in section 241(a);
            ``(3) describe how section 243 will be implemented within 
        the State, specify the accountability and evaluation procedures 
        to be followed by public libraries receiving funds under such 
        section, and specify whether and how funds are to be aggregated 
        under section 243(b)(2) to improve library services provided to 
        children in the State described in section 243(a)(2);
            ``(4) describe the activities and services for which 
        assistance is sought, including--
                    ``(A) priorities for the use of funds under this 
                subtitle; and
                    ``(B) a description of the types of libraries and 
                library entities that will be eligible to receive funds 
                under this subtitle;
            ``(5) provide that any funds paid to the State in 
        accordance with the State plan shall be expended solely for the 
        purposes for which the funds are authorized and appropriated 
        and that such fiscal control and fund accounting procedures 
        have been adopted as may be necessary to assure proper 
        disbursement of, and account for, Federal funds paid to the 
        State (including any such funds paid by the State to any other 
        entity) under this subtitle;
            ``(6) provide procedures to ensure that the State library 
        administrative agency shall involve libraries and users 
        throughout the State in policy decisions regarding 
        implementation of this subtitle, and development of the State 
        plan, including establishing the State advisory council;
            ``(7) provide satisfactory assurance that the State library 
        administrative agency--
                    ``(A) will make such reports, in such form and 
                containing such information, as the Director may 
                require to carry out this subtitle and to determine the 
                extent to which funds provided under this subtitle have 
                been effective in carrying out the purposes of this 
                subtitle, including reports on evaluations under 
                section 251;
                    ``(B) will keep such records and afford such access 
                thereto as the Director may find necessary to assure 
                the correctness and verification of such reports;
                    ``(C) will provide to State advisory council 
                members an orientation regarding the provisions of this 
                subtitle and members' responsibilities, including 
                clear, easily understandable information about the 
                State plan; and
                    ``(D) will report annually at a meeting of the 
                State advisory council on the State library 
                administrative agency's progress toward meeting the 
                goals and objectives of the State plan;
            ``(8) describe the process for assessing the needs for 
        library and information services within the State, and describe 
        the results of the most recent needs assessment;
            ``(9) establish goals and objectives for achieving within 
        the State the purposes of this subtitle, including the purposes 
        in sections 212(a), 231(a), and 241(a); and
            ``(10) describe how the State library administrative 
        agency, in consultation with the State advisory council, will--
                    ``(A) administer this subtitle; and
                    ``(B) conduct evaluations under section 251, 
                including a description of the types of evaluation 
                methodologies to be employed.
    ``(c) Accountability.--Each State plan shall--
            ``(1) establish State-defined performance goals to set 
        forth the level of performance to be achieved by an activity 
        assisted under this subtitle;
            ``(2) express such goals in an objective, quantifiable, and 
        measurable form unless authorized to be in an alternative form 
        in accordance with section 1115(b) of title 31, United States 
        Code;
            ``(3) briefly describe the operational processes, skills 
        and technology, and the human, capital, information, or other 
        resources, required to meet the performance goals;
            ``(4) establish performance indicators in accordance with 
        subsection (d) to be used in measuring or assessing the 
        relevant outputs, service levels, and outcomes, of each 
        activity assisted under this subtitle;
            ``(5) provide a basis for comparing actual program results 
        with the established performance goals; and
            ``(6) describe the means to be used to verify and validate 
        measured values.
    ``(d) Performance Indicators.--Performance indicators described in 
subsection (c)(4) shall include--
            ``(1) evidence of progress toward the national library 
        service goals under section 212(a)(3);
            ``(2) consultation with the State educational agency;
            ``(3) identification of activities suitable for nationwide 
        replication; and
            ``(4) progress in improvement of library services provided 
        to children described in section 243(a)(2).
    ``(e) Approval.--
            ``(1) In general.--The Director shall approve any State 
        plan under this subtitle that meets the requirements of this 
        subtitle and provides satisfactory assurances that the 
        provisions of such plan will be carried out.
            ``(2) Public availability.--Each State library 
        administrative agency receiving a grant under this subtitle 
        shall make the State plan available to the public.
            ``(3) Administration.--If the Director determines that the 
        State plan does not meet the requirements of this section, the 
        Director shall--
                    ``(A) immediately notify the State library 
                administrative agency of such determination and the 
                reasons for such determination;
                    ``(B) offer the State library administrative agency 
                the opportunity to revise its State plan;
                    ``(C) provide technical assistance in order to 
                assist the State library administrative agency to meet 
                the requirements of this section; and
                    ``(D) provide the State library administrative 
                agency the opportunity for a hearing.

                     ``CHAPTER 2--LIBRARY PROGRAMS

         ``Subchapter A--Information Access Through Technology

``SEC. 231. GRANTS TO STATES FOR INFORMATION ACCESS THROUGH TECHNOLOGY.

    ``(a) Purpose.--The purpose of this subchapter is to provide for 
the improvement of library services so that all people have access to 
information delivered by libraries through new and emerging 
technologies, whether the information originates locally, from the 
State, nationally, or globally.
    ``(b) Grants.--
            ``(1) In general.--The Director shall award grants under 
        this subchapter from allotments under section 221(b) to States 
        that have State plans approved under section 224.
            ``(2) Federal share.--Grants awarded under paragraph (1) 
        shall be used to pay the Federal share of the cost of 
        activities under section 232 that are described in a State plan 
        approved under section 224.

``SEC. 232. AUTHORIZED ACTIVITIES.

    ``Each State that receives a grant under section 231(b) may use the 
grant funds to provide statewide services and subgrants to public 
libraries, other types of libraries and library consortia, or library 
linkages with other entities, in accordance with the State plan. Such 
services and subgrants shall involve--
            ``(1) organization, access and delivery of information;
            ``(2) lifelong learning, and workforce and economic 
        development; or
            ``(3) support of technology infrastructure.

    ``Subchapter B--Information Empowerment Through Special Services

``SEC. 241. GRANTS TO STATES FOR INFORMATION EMPOWERMENT THROUGH 
              SPECIAL SERVICES.

    ``(a) Purpose.--The purpose of this subchapter is to provide for 
the improvement of library and information services targeted to persons 
of all ages and cultures who have difficulty using a library and to 
communities which are geographically disadvantaged in access to 
libraries, who or which need special materials or services, or who or 
which will benefit from outreach services for equity of access to 
library services and information technologies, including children (from 
birth through age 17) from families living below the income official 
poverty line (as defined by the Office of Management and Budget, and 
revised annually in accordance with section 673(2) of the Community 
Services Block Grant Act (42 U.S.C. 9902(2)) applicable to a family of 
the size involved).
    ``(b) Grants.--
            ``(1) In general.--The Director shall award grants under 
        this subchapter from allotments under section 221(b) to States 
        that have State plans approved under section 224.
            ``(2) Federal share.--Grants awarded under paragraph (1) 
        shall be used to pay the Federal share of the cost of the 
        activities under section 242 that are described in a State plan 
        approved under section 224.

``SEC. 242. AUTHORIZED ACTIVITIES.

    ``Each State that receives a grant under section 241(b) may use the 
grant funds to provide statewide services and subgrants to public 
libraries, other types of libraries and library consortia, or library 
linkages with other entities, in accordance with the State plan. Such 
services and subgrants shall involve activities that--
            ``(1) increase literacy and lifelong learning;
            ``(2) serve persons in rural, underserved or inner-city 
        areas; or
            ``(3) support the provision of special services.

``SEC. 243. SERVICES FOR CHILDREN IN POVERTY.

    ``(a) State Level Reservation.--
            ``(1) In general.--Except as provided in subsection (c), 
        from the total amount that each State library administrative 
        agency receives under this subchapter for a fiscal year, such 
        agency shall reserve the amount of funds determined under 
        paragraph (2) to provide assistance to public libraries in the 
        State to enable such libraries to enhance the provision of 
        special services to children described in such paragraph who 
        are served by such libraries.
            ``(2) Amount.--The amount of funds a State library 
        administrative agency shall reserve under paragraph (1) shall 
        be equal to the sum of--
                    ``(A) $1.50 for every preschooler (birth through 
                age 5) in the State from a family living below the 
                income official poverty line (as defined by the Office 
                of Management and Budget, and revised annually in 
                accordance with section 673(2) of the Community 
                Services Block Grant Act (42 U.S.C. 9902(2)) applicable 
                to a family of the size involved); and
                    ``(B) $1.00 for every school-age child (ages 6 
                through 17) in the State from such a family.
    ``(b) Within State Distribution.--
            ``(1) In general.--Except as provided in paragraph (2), 
        each public library in a State shall receive under this section 
        for a fiscal year an amount that bears the same relation to the 
        amount the State library administrative agency reserves under 
        subsection (a) for such year as the number of children 
        described in subsection (a)(2) served by such public library 
        for the preceding fiscal year bears to the number of such 
        children served by all public libraries in the State for such 
        preceding fiscal year.
            ``(2) Exception.--
                    ``(A) In general.--If a State library 
                administrative agency determines that the amount 
                available under paragraph (1) for a fiscal year for 2 
                or more public libraries is too small to be effective, 
                then such agency may aggregate such amounts for such 
                year.
                    ``(B) Requirements.--Each State library 
                administrative agency aggregating amounts under 
                subparagraph (A) for a fiscal year--
                            ``(i) shall only aggregate the amount 
                        available under paragraph (1) for a public 
                        library for a fiscal year if the amount so 
                        available for such year is $3,000 or less; and
                            ``(ii) shall use such aggregated amounts to 
                        enhance the library services provided to the 
                        children described in subsection (a)(2) served 
                        by the public libraries for which such agency 
                        aggregated such amounts for such year.
    ``(c) Adjustments.--
            ``(1) Appropriations increase.--For any fiscal year for 
        which the amount appropriated to carry out this subtitle is 
        greater than the amount appropriated to carry out this subtitle 
        for the preceding fiscal year by a percentage that equals or 
        exceeds 10 percent, the amount each State library 
        administrative agency shall reserve under subsection (a)(2) for 
        the fiscal year for which the determination is made shall be 
        increased by the same such percentage.
            ``(2) Appropriations decrease.--For any fiscal year for 
        which the amount appropriated to carry out this subtitle is 
        less than the amount appropriated to carry out this subtitle 
        for the preceding fiscal year by a percentage that equals or 
        exceeds 10 percent, the amount each State library 
        administrative agency shall reserve under subsection (a)(2) for 
        the fiscal year for which the determination is made shall be 
        decreased by the same such percentage.
    ``(d) Plan.--Each public library desiring assistance under this 
section shall submit a plan for the expenditure of funds under this 
section to the State library administrative agency. Such plan shall 
include a description of how the library will--
            ``(1) identify the children described in subsection (a)(2);
            ``(2) collaborate with community representatives to ensure 
        planning and implementation of appropriate, helpful library 
        services; and
            ``(3) establish indicators of success.
    ``(e) Priorities.--Priorities for the use of funds under this 
section may include activities for children described in subsection 
(a)(2) such as--
            ``(1) development of after-school homework support;
            ``(2) development of family literacy programs;
            ``(3) extension of branch hours to provide space and 
        resources for homework;
            ``(4) development of technological resources;
            ``(5) hiring specialized outreach staff; and
            ``(6) development of peer tutoring programs.
                 ``CHAPTER 3--ADMINISTRATIVE PROVISIONS

                   ``Subchapter A--State Requirements

``SEC. 251. STATE EVALUATION.

    ``(a) In General.--Each State receiving a grant under this subtitle 
shall annually evaluate, in accordance with subsections (b) and (c), 
the activities assisted under subchapters A and B of chapter 2.
    ``(b) Subchapter A Activities.--Each evaluation of activities 
assisted under subchapter A of chapter 2 shall include a description of 
how effective such activities are in ensuring that--
            ``(1) every American will have affordable access to 
        information resources through electronic networks;
            ``(2) every public library will be connected to national 
        and international electronic networks;
            ``(3) every State library agency will promote planning and 
        provide support for full library participation in electronic 
        networks;
            ``(4) every public librarian will possess the knowledge and 
        skills needed to help people obtain information through 
        electronic sources; and
            ``(5) every public library will be equipped with the 
        technology needed to help people obtain information in an 
        effective and timely manner.
    ``(c) Subchapter B Activities.--
            ``(1) In general.--Each evaluation of activities assisted 
        under subchapter B of chapter 2 shall include--
                    ``(A) with respect to activities to increase 
                literacy and lifelong learning--
                            ``(i) an analysis of the current situation 
                        in the State;
                            ``(ii) how such activities will meet the 
                        needs of the current situation in the State and 
                        the target groups to be served; and
                            ``(iii) a report of the effect of such 
                        activities in relation to the objectives of 
                        such activities;
                    ``(B) with respect to activities to serve people in 
                rural and urban areas--
                            ``(i) procedures used to identify library 
                        users within a community;
                            ``(ii) a description of needs and target 
                        groups to be served;
                            ``(iii) an analysis of the levels of 
                        success to be targeted;
                            ``(iv) a report of the effect of such 
                        activities in relation to the objectives of 
                        such activities; and
                            ``(v) a description of the background of 
                        the current level of library service to people 
                        in rural and urban areas, and how such 
                        activities will extend, improve and further 
                        provide library resources to such people;
                    ``(C) with respect to activities to support the 
                provision of special services--
                            ``(i) an analysis of the current situation 
                        in the State;
                            ``(ii) how such activities will meet the 
                        needs of the current situation in the State; 
                        and
                            ``(iii) a report of the effect of such 
                        activities in relation to the objectives of 
                        such activities; and
                    ``(D) with respect to activities to serve children 
                under section 243--
                            ``(i) an analysis of the current local 
                        situations;
                            ``(ii) a description of such activities, 
                        including objectives and costs of such 
                        activities; and
                            ``(iii) a report of the effect of such 
                        activities in relation to the objectives of 
                        such activities.
            ``(2) Information.--Each public library receiving 
        assistance under section 243 shall submit to the State library 
        administrative agency such information as such agency may 
        require to meet the requirements of paragraph (1)(D).

``SEC. 252. STATE ADVISORY COUNCILS.

    ``(a) Councils Required.--Each State desiring assistance under this 
subtitle shall establish a State advisory council.
    ``(b) Composition.--Each State advisory council shall be broadly 
representative of the library entities in the State, including public, 
school, academic, special, and institutional libraries, and libraries 
serving individuals with disabilities.
    ``(c) Duties.--Each State advisory council shall--
            ``(1) consult with the State library administrative agency 
        regarding the development of the State plan;
            ``(2) advise the State library administrative agency on the 
        development of, and policy matters arising in the 
        administration of, the State plan, including mechanisms for 
        evaluation;
            ``(3) assist the State library administrative agency in--
                    ``(A) the dissemination of information regarding 
                activities assisted under this subtitle; and
                    ``(B) the evaluation of activities assisted under 
                this subtitle; and
            ``(4) establish bylaws to carry out such council's duties 
        under this subsection.

                  ``Subchapter B--Federal Requirements

``SEC. 261. SERVICES FOR INDIAN TRIBES.

    ``(a) Grants Authorized.--From amounts reserved under section 
221(a)(1) for any fiscal year the Director shall award grants to 
organizations primarily serving and representing Indian tribes to 
enable such organizations to carry out the authorized activities 
described in subsection (b).
    ``(b) Authorized Activities.--Grant funds awarded under this 
section may be used for--
            ``(1) inservice or preservice training of Indians as 
        library personnel;
            ``(2) the purchase of library materials;
            ``(3) the conduct of special library programs for Indians;
            ``(4) salaries of library personnel;
            ``(5) transportation to enable Indians to have access to 
        library services;
            ``(6) dissemination of information about library services;
            ``(7) assessment of tribal library needs; and
            ``(8) contracts to provide public library services to 
        Indians living on or near reservations or to accomplish any 
        activities described in paragraphs (1) through (7).
    ``(c) Prohibition.--No funds shall be awarded pursuant to this 
section unless such funds will be administered by a librarian.
    ``(d) Duplication.--In awarding grants under this section, the 
Director shall take such actions as may be necessary to prevent the 
grant funds provided under this section from being received by any 2 or 
more entities to serve the same population.
    ``(e) Maintenance of Effort.--Each organization that receives a 
grant under this section and supports a public library system shall 
continue to expend from Federal, State, and local sources an amount not 
less than the amount expended by such organization from such sources 
for public library services during the second fiscal year preceding the 
fiscal year for which the determination is made.
    ``(f) Construction.--Nothing in this section shall be construed to 
prohibit the dissemination of restricted collections of tribal cultural 
materials with funds made available under this section.
    ``(g) Application.--
            ``(1) In general.--Any organization which desires to 
        receive a grant under this section shall submit an application 
        to the Director that--
                    ``(A) describes the activities and services for 
                which assistance is sought; and
                    ``(B) contains such information as the Director may 
                require by regulation.
            ``(2) Criteria.--The Director shall issue criteria for the 
        approval of applications under this section, but such criteria 
        shall not include--
                    ``(A) an allotment formula; or
                    ``(B) a matching of funds requirement.

``SEC. 262. NATIONAL LEADERSHIP PROGRAM.

    ``(a) In General.--From the amounts reserved under section 
221(a)(2) for any fiscal year the Director shall establish and carry 
out a program of national leadership and evaluation activities to 
enhance the quality of library services nationwide. Such activities may 
include--
            ``(1) education and training of persons in library and 
        information science, particularly in areas of new technology 
        and other critical needs, including graduate fellowships, 
        traineeships, institutes, or other programs;
            ``(2) research and demonstration projects related to the 
        improvement of libraries, education in library and information 
        science, enhancement of library services through effective and 
        efficient use of new technologies, and dissemination of 
        information derived from such projects; and
            ``(3) preservation or digitization of library materials and 
        resources, giving priority to projects emphasizing 
        coordination, avoidance of duplication, and access by 
        researchers beyond the institution or library entity 
        undertaking the project.
    ``(b) Grants or Contracts.--
            ``(1) In general.--The Director may carry out the 
        activities described in subsection (a) by awarding grants to, 
        or entering into contracts with, library entities, agencies, or 
        institutions of higher education.
            ``(2) Competitive basis.--Grants and contracts described in 
        paragraph (1) shall be awarded on a competitive basis.
    ``(c) Special Rule.--The Director shall make every effort to ensure 
that activities assisted under this section are administered by 
appropriate library experts.

``SEC. 263. STATE AND LOCAL INITIATIVES.

    ``Nothing in this subtitle shall be construed to interfere with 
State and local initiative and responsibility in the conduct of library 
services. The administration of libraries, the selection of personnel 
and library books and materials, and insofar as consistent with the 
purposes of this subtitle, the determination of the best uses of the 
funds provided under this subtitle, shall be reserved to the States and 
their local subdivisions.

                     ``Subtitle C--Museum Services

``SEC. 271. PURPOSE.

    ``It is the purpose of this subtitle--
            ``(1) to encourage and assist museums in their educational 
        role, in conjunction with formal systems of elementary, 
        secondary, and postsecondary education and with programs of 
        nonformal education for all age groups;
            ``(2) to assist museums in modernizing their methods and 
        facilities so that the museums may be better able to conserve 
        the cultural, historic, and scientific heritage of the United 
        States; and
            ``(3) to ease the financial burden borne by museums as a 
        result of their increasing use by the public.

``SEC. 272. DEFINITIONS.

    ``As used in this subtitle, the term `museum' means a public or 
private nonprofit agency or institution organized on a permanent basis 
for essentially educational or esthetic purposes, that utilizes a 
professional staff, owns or utilizes tangible objects, cares for the 
tangible objects, and exhibits the tangible objects to the public on a 
regular basis.

``SEC. 273. MUSEUM SERVICES ACTIVITIES.

    ``(a) Grants.--The Director, after receiving the policy advice of 
the Museum Board, may make grants to museums to pay for the Federal 
share of the cost of increasing and improving museum services, through 
such activities as--
            ``(1) programs to enable museums to construct or install 
        displays, interpretations, and exhibitions in order to improve 
        museum services to the public;
            ``(2) assisting museums in developing and maintaining 
        professionally trained or otherwise experienced staff to meet 
        their needs;
            ``(3) assisting museums in meeting their administrative 
        costs in preserving and maintaining their collections, 
        exhibiting the collections to the public, and providing 
        educational programs to the public through the use of the 
        collections;
            ``(4) assisting museums in cooperating with each other in 
        developing traveling exhibitions, meeting transportation costs, 
        and identifying and locating collections available for loan;
            ``(5) assisting museums in conservation of their 
        collections; and
            ``(6) developing and carrying out specialized programs for 
        specific segments of the public, such as programs for urban 
        neighborhoods, rural areas, Indian reservations, and penal and 
        other State institutions.
    ``(b) Contracts and Cooperative Agreements.--
            ``(1) Projects to strengthen museum services.--The 
        Director, after receiving the policy advice of the Museum 
        Board, may enter into contracts and cooperative agreements with 
        appropriate entities to pay for the Federal share of enabling 
        the entities to undertake projects designed to strengthen 
        museum services, except that any contracts or cooperative 
        agreements entered into pursuant to this subsection shall be 
        effective only to such extent or in such amounts as are 
        provided in appropriations Acts.
            ``(2) Limitation on amount.--The aggregate amount of 
        financial assistance made available under this subsection for a 
        fiscal year shall not exceed 15 percent of the amount 
        appropriated under this subtitle for such fiscal year.
    ``(c) Federal Share.--
            ``(1) 50 percent.--Except as provided in paragraph (2), the 
        Federal share described in subsections (a) and (b) shall be not 
        more than 50 percent.
            ``(2) 100 percent.--The Director may use not more than 20 
        percent of the funds made available under this section for a 
        fiscal year to make grants under subsection (a), or enter into 
        contracts or agreements under subsection (b), for which the 
        Federal share may be 100 percent.
    ``(d) Review and Evaluation.--The Director shall establish 
procedures for reviewing and evaluating grants, contracts, and 
cooperative agreements made or entered into under this section. 
Procedures for reviewing grant applications or contracts and 
cooperative agreements for financial assistance under this section 
shall not be subject to any review outside of the Institute.

``SEC. 274. ASSESSMENTS.

    ``(a) In General.--The Director, subject to the policy direction of 
the Museum Board and in consultation with appropriate representatives 
of museums and other types of community institutions, agencies, and 
organizations, shall undertake an assessment of the collaborative 
possibilities museums can engage in to serve the public more broadly 
and effectively.
    ``(b) Contents.--The assessment shall include--
            ``(1) an investigation of opportunities to establish 
        collaborative programs between museums within a community, 
        including an investigation of the role that larger institutions 
        can play as mentors to smaller institutions;
            ``(2) an investigation of opportunities to establish 
        collaborative programs between museums and community 
        organizations;
            ``(3) an investigation of the potential for collaboration 
        between museums on technology issues to reach a broader 
        audience; and
            ``(4) an investigation of opportunities for museums to work 
        with each other and with other community resources to serve the 
        public better and to coordinate professional and financial 
        development activities.
    ``(c) Limitation.--This section shall not apply in any fiscal year 
for which the amount appropriated under section 277(a) is less than 
$28,700,000.

``SEC. 275. AWARD.

    ``The Director, with the advice of the Museum Board, may annually 
award a National Award for Museum Service to outstanding museums that 
have made significant contributions in service to their communities.

``SEC. 276. NATIONAL MUSEUM SERVICES BOARD.

    ``(a) Establishment.--There is established in the Institute a 
National Museum Services Board.
    ``(b) Composition and Qualifications.--
            ``(1) Composition.--The Museum Board shall consist of the 
        Director and 14 members appointed by the President, by and with 
        the advice and consent of the Senate, and the ex officio, 
        nonvoting member described in paragraph (4).
            ``(2) Qualifications.--The appointive members of the Museum 
        Board shall be selected from among citizens of the United 
        States--
                    ``(A) who are members of the general public;
                    ``(B) who are or have been affiliated with--
                            ``(i) resources that, collectively, are 
                        broadly representative of the curatorial, 
                        conservation, educational, and cultural 
                        resources of the United States; or
                            ``(ii) museums that, collectively, are 
                        broadly representative of various types of 
                        museums, including museums relating to science, 
                        history, technology, and art, zoos, and 
                        botanical gardens; and
                    ``(C) who are recognized for their broad knowledge, 
                expertise, or experience in museums or commitment to 
                museums.
            ``(3) Geographic and other representation.--Members of the 
        Museum Board shall be appointed to reflect persons from various 
        geographic regions of the United States. The Museum Board may 
        not include, at any time, more than 3 members from a single 
        State. In making such appointments, the President shall give 
        due regard to equitable representation of women, minorities, 
        and persons with disabilities who are involved with museums.
            ``(4) Ex officio member.--The Deputy Director of the Office 
        of Museum Services shall serve as an ex officio nonvoting 
        member of the Museum Board.
    ``(c) Terms.--
            ``(1) In general.--Each appointive member of the Museum 
        Board shall serve for a term of 5 years, except that--
                    ``(A) of the members first appointed, 3 shall serve 
                for terms of 5 years, 3 shall serve for terms of 4 
                years, 3 shall serve for terms of 3 years, 3 shall 
                serve for terms of 2 years, and 2 shall serve for terms 
                of 1 year, as designated by the President at the time 
                of nomination for appointment; and
                    ``(B) any member appointed to fill a vacancy shall 
                serve for the remainder of the term for which the 
                predecessor of the member was appointed.
            ``(2) Reappointment.--No member of the Museum Board who has 
        been a member for more than 7 consecutive years shall be 
        eligible for reappointment.
            ``(3) Service until successor takes office.--
        Notwithstanding any other provision of this subsection, a 
        member shall serve after the expiration of the term of the 
        member until the successor to the member takes office.
    ``(d) Duties and Powers.--The Museum Board shall have the 
responsibility to advise the Director on general policies with respect 
to the duties and powers vested in the Institute relating to museum 
services, including general policies with respect to--
            ``(1) financial assistance awarded under this title for 
        museum services; and
            ``(2) projects described in section 204(c)(2).
    ``(e) Chairperson.--The President shall designate 1 of the 
appointive members of the Museum Board as Chairperson of the Museum 
Board.
    ``(f) Meetings.--
            ``(1) In general.--The Museum Board shall meet--
                    ``(A) not less than 3 times each year, including--
                            ``(i) not less than 2 times each year 
                        separately; and
                            ``(ii) not less than 1 time each year in a 
                        joint meeting with the Commission, convened for 
                        purposes of making general policies with 
                        respect to financial assistance for projects 
                        described in section 204(c)(2); and
                    ``(B) at the call of the Director.
            ``(2) Vote.--All decisions by the Museum Board with respect 
        to the exercise of the duties and powers of the Museum Board 
        shall be made by a majority vote of the members of the Museum 
        Board who are present. All decisions by the Commission and the 
        Museum Board with respect to the policies described in 
        paragraph (1)(A)(ii) shall be made by a \2/3\ majority vote of 
        the total number of the members of the Commission and the 
        Museum Board who are present.
    ``(g) Quorum.--A majority of the members of the Museum Board shall 
constitute a quorum for the conduct of business at official meetings of 
the Museum Board, but a lesser number of members may hold hearings. A 
majority of the members of the Commission and a majority of the members 
of the Museum Board shall constitute a quorum for the conduct of 
business at official joint meetings of the Commission and the Museum 
Board.
    ``(h) Compensation and Travel Expenses.--
            ``(1) Compensation.--Each member of the Museum Board who is 
        not an officer or employee of the Federal Government shall be 
        compensated at a rate to be fixed by the President, but not to 
        exceed the daily equivalent of the maximum rate authorized
         for a position above grade GS-15 of the General Schedule under 
section 5108 of title 5, United States Code, for each day (including 
travel time) during which such member is engaged in the performance of 
the duties of the Museum Board. All members of the Museum Board who are 
officers or employees of the Federal Government shall serve without 
compensation in addition to compensation received for their services as 
officers or employees of the Federal Government.
            ``(2) Travel expenses.--The members of the Museum Board 
        shall be allowed travel expenses, including per diem in lieu of 
        subsistence, in the same amounts and to the same extent, as 
        authorized under section 5703 of title 5, United States Code, 
        for persons employed intermittently in Federal Government 
        service.
    ``(i) Coordination.--The Museum Board, with the advice of the 
Director, shall take steps to ensure that the policies and activities 
of the Institute are coordinated with other activities of the Federal 
Government.

``SEC. 277. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Grants.--For the purpose of carrying out this subtitle, there 
are authorized to be appropriated to the Director $50,000,000 for each 
of fiscal years 1996 through 2000.
    ``(b) Administration.--Not more than 10 percent of the funds 
appropriated under this section for a fiscal year may be used to pay 
for the administrative costs of carrying out this subtitle.
    ``(c) Joint Projects.--Not less than 5 percent and not more than 7 
percent of the funds appropriated under this section for a fiscal year 
may be made available for projects described in section 204(c)(2) for 
the fiscal year.
    ``(d) Sums Remaining Available.--Sums appropriated pursuant to 
subsection (a) for any fiscal year shall remain available for 
obligation until expended.''.

SEC. 202. NATIONAL COMMISSION ON LIBRARIES AND INFORMATION SCIENCE.

    (a) Functions.--Section 5 of the National Commission on Libraries 
and Information Science Act (20 U.S.C. 1504) is amended--
            (1) by redesignating subsections (b) through (d) as 
        subsections (d) through (f), respectively; and
            (2) by inserting after subsection (a) the following:
    ``(b) The Commission shall have the responsibility to advise the 
Director of the Institute of Museum and Library Services on general 
policies with respect to the duties and powers vested in the Institute 
of Museum and Library Services relating to library services, 
including--
            ``(1) general policies with respect to--
                    ``(A) financial assistance awarded under the Museum 
                and Library Services Act for library services; and
                    ``(B) projects described in section 204(c)(2) of 
                such Act; and
            ``(2) measures to ensure that the policies and activities 
        of the Institute of Museum and Library Services are coordinated 
        with other activities of the Federal Government.
    ``(c)(1) The Commission shall meet not less than 1 time each year 
in a joint meeting with the Museum Board, convened for purposes of 
providing advice on general policy with respect to financial assistance 
for projects described in section 204(c)(2) of such Act.
    ``(2) All decisions by the Commission and the Museum Board with 
respect to the advice on general policy described in paragraph (1) 
shall be made by a \2/3\ majority vote of the total number of the 
members of the Commission and the Museum Board who are present.
    ``(3) A majority of the members of the Commission and a majority of 
the members of the Museum Board shall constitute a quorum for the 
conduct of business at official joint meetings of the Commission and 
the Museum Board.''.
    (b) Membership.--Section 6 of the National Commission on Libraries 
and Information Science Act (20 U.S.C. 1505) is amended--
            (1) in subsection (a)--
                    (A) in the first sentence, by striking ``Librarian 
                of Congress'' and inserting ``Director of the Institute 
                of Museum and Library Services'';
                    (B) in the second sentence--
                            (i) by striking ``Five'' and inserting 
                        ``Six of the appointive'';
                            (ii) by striking ``or interest in''; and
                            (iii) by inserting before the period the 
                        following: ``and at least one other of whom 
                        shall be knowledgeable with respect to the 
                        library and information service and science 
                        needs of the elderly'';
                    (C) in the third sentence, by inserting 
                ``appointive'' before ``members''; and
                    (D) in the last sentence, by striking ``term and at 
                least'' and all that follows and inserting ``term.''; 
                and
            (2) in subsection (b), by striking ``the rate specified'' 
        and all that follows through ``and while'' and
         inserting ``the daily equivalent of the maximum rate 
authorized for a position above grade GS-15 of the General Schedule 
under section 5108 of title 5, United States Code, for each day 
(including traveltime) during which the members are engaged in the 
business of the Commission. While''.

SEC. 203. TRANSFER OF FUNCTIONS FROM INSTITUTE OF MUSEUM SERVICES.

    (a) Definitions.--For purposes of this section, unless otherwise 
provided or indicated by the context--
            (1) the term ``Federal agency'' has the meaning given to 
        the term ``agency'' by section 551(1) of title 5, United States 
        Code;
            (2) the term ``function'' means any duty, obligation, 
        power, authority, responsibility, right, privilege, activity, 
        or program; and
            (3) the term ``office'' includes any office, 
        administration, agency, institute, unit, organizational entity, 
        or component thereof.
    (b) Transfer of Functions.--There are transferred to the Institute 
of Museum and Library Services established under section 203 of the 
Museum and Library Services Act all functions that the Director of the 
Institute of Museum Services exercised before the date of enactment of 
this section (including all related functions of any officer or 
employee of the Institute of Museum Services).
    (c) Determinations of Certain Functions by the Office of Management 
and Budget.--If necessary, the Office of Management and Budget shall 
make any determination of the functions that are transferred under 
subsection (b).
    (d) Delegation and Assignment.--Except where otherwise expressly 
prohibited by law or otherwise provided by this section, the Director 
of the Institute of Museum and Library Services may delegate any of the 
functions transferred to the Director of the Institute of Museum and 
Library Services by this section and any function transferred or 
granted to such Director of the Institute of Museum and Library 
Services after the effective date of this section to such officers and 
employees of the Institute of Museum and Library Services as the 
Director of the Institute of Museum and Library Services may designate, 
and may authorize successive redelegations of such functions as may be 
necessary or appropriate. No delegation of functions by the Director of 
the Institute of Museum and Library Services under this section or 
under any other provision of this section shall relieve such Director 
of the Institute of Museum and Library Services of responsibility for 
the administration of such functions.
    (e) Reorganization.--The Director of the Institute of Museum and 
Library Services may allocate or reallocate any function transferred 
under subsection (b) among the officers of the Institute of Museum and 
Library Services, and to establish, consolidate, alter, or discontinue 
such organizational entities in the Institute of Museum and Library 
Services as may be necessary or appropriate.
    (f) Rules.--The Director of the Institute of Museum and Library 
Services may prescribe, in accordance with chapters 5 and 6 of title 5, 
United States Code, such rules and regulations as the Director of the 
Institute of Museum and Library Services determines to be necessary or 
appropriate to administer and manage the functions of the Institute of 
Museum and Library Services.
    (g) Transfer and Allocations of Appropriations and Personnel.--
Except as otherwise provided in this section, the personnel employed in 
connection with, and the assets, liabilities, contracts, property, 
records, and unexpended balances of appropriations, authorizations, 
allocations, and other funds employed, used, held, arising from, 
available to, or to be made available in connection with the functions 
transferred by this section, subject to section 1531 of title 31, 
United States Code, shall be transferred to the Institute of Museum and 
Library Services. Unexpended funds transferred pursuant to this 
subsection shall be used only for the purposes for which the funds were 
originally authorized and appropriated.
    (h) Incidental Transfers.--The Director of the Office of Management 
and Budget, at such time or times as the Director shall provide, may 
make such determinations as may be necessary with regard to the 
functions transferred by this section, and make such additional 
incidental dispositions of personnel, assets, liabilities, grants, 
contracts, property, records, and unexpended balances of 
appropriations, authorizations, allocations, and other funds held, 
used, arising from, available to, or to be made available in connection 
with such functions, as may be necessary to carry out this section. The 
Director of the Office of Management and Budget shall provide for the 
termination of the affairs of all entities terminated by this section 
and for such further measures and dispositions as may be necessary to 
effectuate the purposes of this section.
    (i) Effect on Personnel.--
            (1) In general.--Except as otherwise provided by this 
        section, the transfer pursuant to this section of full-time 
        personnel (except special Government employees) and part-time 
        personnel holding permanent positions shall not cause any such 
        employee to be separated or reduced in grade or compensation 
        for 1 year after the date of transfer of such employee under 
        this section.
            (2) Executive schedule positions.--Except as otherwise 
        provided in this section, any person who, on the day preceding 
        the effective date of this section, held a position compensated 
        in accordance with the Executive Schedule prescribed in chapter 
        53 of title 5, United States Code, and who, without a break in 
        service, is appointed in the Institute of Museum and Library 
        Services to a position having duties comparable to the duties 
        performed immediately preceding such appointment shall continue 
        to be compensated in such new position at not less than the 
        rate provided for such previous position, for the duration of 
        the service of such person in such new position.
    (j) Savings Provisions.--
            (1) Continuing effect of legal documents.--All orders, 
        determinations, rules, regulations, permits, agreements, 
        grants, contracts, certificates, licenses, registrations, 
        privileges, and other administrative actions--
                    (A) that have been issued, made, granted, or 
                allowed to become effective by the President, any 
                Federal agency or official of a Federal
                 agency, or by a court of competent jurisdiction, in 
the performance of functions that are transferred under this section; 
and
                    (B) that were in effect before the effective date 
                of this section, or were final before the effective 
                date of this section and are to become effective on or 
                after the effective date of this section;
        shall continue in effect according to their terms until 
        modified, terminated, superseded, set aside, or revoked in 
        accordance with law by the President, the Director of the 
        Institute of Museum and Library Services or other authorized 
        official, a court of competent jurisdiction, or by operation of 
        law.
            (2) Proceedings not affected.--This section shall not 
        affect any proceedings, including notices of proposed 
        rulemaking, or any application for any license, permit, 
        certificate, or financial assistance pending before the 
        Institute of Museum Services on the effective date of this 
        section, with respect to functions transferred by this section. 
        Such proceedings and applications shall be continued. Orders 
        shall be issued in such proceedings, appeals shall be taken 
        from the orders, and payments shall be made pursuant to the 
        orders, as if this section had not been enacted, and orders 
        issued in any such proceedings shall continue in effect until 
        modified, terminated, superseded, or revoked by a duly 
        authorized official, by a court of competent jurisdiction, or 
        by operation of law. Nothing in this paragraph shall be 
        construed to prohibit the discontinuance or modification of any 
        such proceeding under the same terms and conditions and to the 
        same extent that such proceeding could have been discontinued 
        or modified if this section had not been enacted.
            (3) Suits not affected.--This section shall not affect 
        suits commenced before the effective date of this section, and 
        in all such suits, proceedings shall be had, appeals taken, and 
        judgments rendered in the same manner and with the same effect 
        as if this section had not been enacted.
            (4) Nonabatement of actions.--No suit, action, or other 
        proceeding commenced by or against the Institute of Museum 
        Services, or by or against any individual in the official 
        capacity of such individual as an officer of the Institute of 
        Museum Services, shall abate by reason of the enactment of this 
        section.
            (5) Administrative actions relating to promulgation of 
        regulations.--Any administrative action relating to the 
        preparation or promulgation of a regulation by the Institute of 
        Museum Services relating to a function transferred under this 
        section may be continued by the Institute of Museum and Library 
        Services with the same effect as if this section had not been 
        enacted.
    (k) Transition.--The Director of the Institute of Museum and 
Library Services may utilize--
            (1) the services of such officers, employees, and other 
        personnel of the Institute of Museum Services with respect to 
        functions transferred to the Institute of Museum and Library 
        Services by this section; and
            (2) funds appropriated to such functions for such period of 
        time as may reasonably be needed to facilitate the orderly 
        implementation of this section.
    (l) References.--A reference in any other Federal law, Executive 
order, rule, regulation, or delegation of authority, or any document of 
or relating to--
            (1) the Director of the Institute of Museum Services with 
        regard to functions transferred under subsection (b), shall be 
        deemed to refer to the Director of the Institute of Museum and 
        Library Services; and
            (2) the Institute of Museum Services with regard to 
        functions transferred under subsection (b), shall be deemed to 
        refer to the Institute of Museum and Library Services.
    (m) Additional Conforming Amendments.--
            (1) Recommended legislation.--After consultation with the 
        appropriate committees of Congress and the Director of the 
        Office of Management and Budget, the Director of the Institute 
        of Museum and Library Services shall prepare and submit to 
        Congress recommended legislation containing technical and 
        conforming amendments to reflect the changes made by this 
        section.
            (2) Submission to congress.--Not later than 6 months after 
        the effective date of this section, the Director of the 
        Institute of Museum and Library Services shall submit the 
        recommended legislation referred to under paragraph (1).

SEC. 204. SERVICE OF INDIVIDUALS SERVING ON DATE OF ENACTMENT.

    Notwithstanding section 204 of the Museum and Library Services Act, 
the individual who was appointed to the position of Director of the 
Institute of Museum Services under section 205 of the Museum Services 
Act (as such section was in effect on the day before the date of 
enactment of this Act) and who is serving in such position on the day 
before the date of enactment of this Act shall serve as the first 
Director of the Institute of Museum and Library Services under section 
204 of the Museum and Library Services Act (as added by section 201 of 
this Act), and shall serve at the pleasure of the President.

SEC. 205. CONSIDERATION.

    Consistent with title 5, United States Code, in appointing 
employees of the Office of Library Services, the Director of the 
Institute of Museum and Library Service shall give strong consideration 
to individuals with experience in administering State-based library 
programs.

SEC. 206. REPEALS AND TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Repeals.--
            (1) Library services and construction act.--The Library 
        Services and Construction Act (20 U.S.C. 351 et seq.) is 
        repealed.
            (2) Higher education act of 1965.--Title II of the Higher 
        Education Act of 1965 (20 U.S.C. 1021 et seq.) is repealed.
    (b) References to Library Services and Construction Act.--
            (1) Omnibus education reconciliation act of 1981.--Section 
        528 of the Omnibus Education Reconciliation Act of 1981 (20 
        U.S.C. 3489) is amended--
                    (A) by striking paragraph (12); and
                    (B) by redesignating paragraphs (13) through (15) 
                as paragraphs (12) through (14).
            (2) Elementary and secondary education act of 1965.--
        Section 3113(10) of the Elementary and Secondary Education Act 
        of 1965 (20 U.S.C. 6813(10)) is amended by striking ``section 3 
        of the Library Services and Construction Act'' and inserting 
        ``section 213(7) of the Library Services and Technology Act''.
            (3) Community improvement volunteer act of 1994.--Section 
        7305 of the Community Improvement Volunteer Act of 1994 (40 
        U.S.C. 276d-3) is amended--
                    (A) by striking paragraph (1); and
                    (B) by redesignating paragraphs (2) through (6) as 
                paragraphs (1) through (5), respectively.
            (4) Appalachian regional development act of 1965.--Section 
        214(c) of the Appalachian Regional Development Act of 1965 (40 
        U.S.C. App. 214(c)) is amended by striking ``Library Services 
        and Construction Act;''.
            (5) Demonstration cities and metropolitan development act 
        of 1966.--Section 208(2) of the Demonstration Cities and 
        Metropolitan Development Act of 1966 (42 U.S.C. 3338(2)) is 
        amended by striking ``title II of the Library Services and 
        Construction Act;''.
            (6) Public law 87-688.--Subsection (c) of the first section 
        of the Act entitled ``An Act to extend the application of 
        certain laws to American Samoa'', approved September 25, 1962 
        (48 U.S.C. 1666(c)) is amended by striking ``the Library 
        Services Act (70 Stat. 293; 20 U.S.C. 351 et seq.),''.
    (c) References to Institute of Museum Services.--
            (1) Title 5, united states code.--Section 5315 of title 5, 
        United States Code, is amended by striking the following:
            ``Director of the Institute of Museum Services.'' and 
        inserting the following:
            ``Director of the Institute of Museum and Library 
        Services.''.
            (2) Department of education organization act.--Section 301 
        of the Department of Education Organization Act (20 U.S.C. 
        3441) is amended--
                    (A) in subsection (a)--
                            (i) by striking paragraph (5); and
                            (ii) by redesignating paragraphs (6) and 
                        (7) as paragraphs (5) and (6), respectively; 
                        and
                    (B) in subsection (b)--
                            (i) by striking paragraph (4); and
                            (ii) by redesignating paragraphs (5) 
                        through (7) as paragraphs (4) through (6), 
                        respectively.
            (3) Elementary and secondary education act of 1965.--
                    (A) Sections 2101(b), 2205(c)(1)(D), 
                2208(d)(1)(H)(v), and 2209(b)(1)(C)(vi), and 
                subsections (d)(6) and (e)(2) of section 10401, of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 6621(b), 6645(c)(1)(D), 6648(d)(1)(H)(v), 
                6649(b)(1)(C)(vi), and 8091 (d)(6) and (e)(2)) are 
                amended by striking ``the Institute of Museum 
                Services'' and inserting ``the Institute of Museum and 
                Library Services''.
                    (B) Section 10412(b) of such Act (20 U.S.C. 
                8102(b)) is amended--
                            (i) in paragraph (2), by striking ``the 
                        Chairman of the National Endowment for the 
                        Humanities, the Chairman of the National 
                        Endowment for the Arts, and the Director of the 
                        Institute of Museum Services,'' and inserting 
                        ``the Chairperson of the National Endowment for 
                        the Humanities, the Chairperson of the National 
                        Endowment for the Arts, and the Institute of 
                        Museum and Library Services,''; and
                            (ii) in paragraph (7), by striking ``the 
                        Chairman of the National Endowment for the 
                        Humanities, the Chairman of the National 
                        Endowment for the Arts and the Director of the 
                        Institute of Museum Services,'' and inserting 
                        ``the Chairperson of the National Endowment for 
                        the Humanities, the Chairperson of the National 
                        Endowment for the Arts, and the Institute of 
                        Museum and Library Services,''.
                    (C) Section 10414(a)(2)(B) of such Act (20 U.S.C. 
                8104(a)(2)(B)) is amended by striking clause (iii) and 
                inserting the following new clause:
                            ``(iii) the Institute of Museum and Library 
                        Services.''.
    (d) References to Higher Education Act of 1965.--
            (1) Higher education act of 1965.--Paragraph (2) of section 
        356(b) of the Higher Education Act of 1965 (20 U.S.C. 1069b(b)) 
        is amended by striking ``II,''.
            (2) Higher education amendments of 1986.--Part D of title 
        XIII of the Higher Education Amendments of 1986 (20 U.S.C. 1029 
        note) is repealed.
    (e) References to Office of Libraries and Learning Resources.--
            (1) Education amendments of 1974.--Section 519 of the 
        Education Amendments of 1974 (20 U.S.C. 1221i) is repealed.
            (2) Department of education organization act.--Section 
        413(b)(1) of the Department of Education Organization Act (20 
        U.S.C. 3473(b)(1)) is amended--
                    (A) by striking subparagraph (H); and
                    (B) by redesignating subparagraphs (I) through (M) 
                as subparagraphs (H) through (L), respectively.

              TITLE III--ARTS AND ARTIFACTS INDEMNITY ACT

SEC. 301. ARTS AND ARTIFACTS.

    The Arts and Artifacts Indemnity Act (20 U.S.C. 971 et seq.) is 
amended to read as follows:
``SECTION 1. SHORT TITLE.

    ``This Act may be cited as the `Arts and Artifacts Indemnity Act'.

``SEC. 2. INDEMNITY FOR EXHIBITIONS OF ARTS AND ARTIFACTS.

    ``The Chairperson of the National Endowment for the Arts (referred 
to in this title as the `Chairperson') may enter into agreements to 
indemnify against loss or damage such items as may be eligible for such 
indemnity agreements under section 3--
            ``(1) in accordance with the provisions of this Act; and
            ``(2) on such terms and conditions as the Chairperson shall 
        prescribe, by regulation, in order to achieve the objectives of 
        this Act and, consistent with such objectives, to protect the 
        financial interest of the United States.

``SEC. 3. ELIGIBLE ITEMS.

    ``(a) Types of Items.--The Chairperson may enter into an indemnity 
agreement under section 2 with respect to items--
            ``(1) that are--
                    ``(A) works of art, including tapestries, 
                paintings, sculpture, folk art, and graphics and craft 
                arts;
                    ``(B) manuscripts, rare documents, books, or other 
                printed or published materials;
                    ``(C) other artifacts or objects; or
                    ``(D) photographs, motion pictures, or audio and 
                video tape;
            ``(2) that are of educational, cultural, historical, or 
        scientific value; and
            ``(3) the exhibition of which is certified by the Secretary 
        of State, the designee of the Secretary, or the Director of the 
        Institute for Museum and Library Services, as being in the 
        national interest.
    ``(b) Items on Exhibition.--
            ``(1) Scope.--An indemnity agreement made under this Act 
        shall cover eligible items while on exhibition, generally when 
        the items are part of an exchange of exhibitions. An item 
        described in subsection (a) that is part of an exhibition that 
        originates either in the United States or outside the United 
        States and that is touring the United States shall be 
        considered to be an eligible item.
            ``(2) Definition.--For purposes of this subsection, the 
        term `on exhibition' includes the period of time beginning on 
        the date the eligible items leave the premises of the lender or 
        place designated by the lender and ending on the date such 
        items are returned to the premises of the lender or place 
        designated by the lender.

``SEC. 4. APPLICATIONS.

    ``(a) In General.--Any person, nonprofit agency, institution, or 
government desiring to enter into an indemnity agreement for eligible 
items under this Act shall submit an application to the Chairperson at 
such time, in such manner and in accordance with such procedures, as 
the Chairperson shall, by regulation, prescribe.
    ``(b) Contents.--An application submitted under subsection (a) 
shall--
            ``(1) describe each item to be covered by the agreement 
        (including an estimated value of such item);
            ``(2) show evidence that the item is an item described in 
        section 3(a); and
            ``(3) set forth policies, procedures, techniques, and 
        methods with respect to preparation for, and
         conduct of, exhibition of the item, and any transportation 
related to such item.
    ``(c) Approval.--On receipt of an application under this section, 
the Chairperson shall review the application as described in section 5 
and, if the Chairperson agrees with the estimated value described in 
the application and if such application conforms with the requirements 
of this Act, approve the application and enter into an indemnity 
agreement with the applicant under section 2. On such approval, the 
agreement shall constitute a contract between the Chairperson and the 
applicant pledging the full faith and credit of the United States to 
pay any amount for which the Chairperson becomes liable under such 
agreement. The Chairperson, for such purpose, is authorized to pledge 
the full faith and credit of the United States.

``SEC. 5. INDEMNITY AGREEMENT.

    ``(a) Review.--On receipt of an application meeting the 
requirements of subsections (a) and (b) of section 4, the Chairperson 
shall review the estimated value of the items for which coverage by an 
indemnity agreement is sought.
    ``(b) Aggregate Amount of Loss or Damage.--The aggregate amount of 
loss or damage covered by indemnity agreements made under this Act 
shall not exceed $3,000,000,000, at any one time.
    ``(c) Individual Amount of Loss or Damage.--No indemnity agreement 
for a single exhibition shall cover loss or damage in excess of 
$300,000,000.
    ``(d) Extent of Coverage.--If the estimated value of the items 
covered by an indemnity agreement for a single exhibition is--
            ``(1) $2,000,000 or less, coverage under this Act shall 
        extend only to loss or damage in excess of the first $15,000 of 
        loss or damage to the items covered;
            ``(2) more than $2,000,000 but less than $10,000,000, 
        coverage under this Act shall extend only to loss or damage in 
        excess of the first $25,000 of loss or damage to the items 
        covered;
            ``(3) not less than $10,000,000 but less than $125,000,000, 
        coverage under this Act shall extend to loss or damage in 
        excess of the first $50,000 of loss or damage to the items 
        covered;
            ``(4) not less than $125,000,000 but less than 
        $200,000,000, coverage under this Act shall extend to loss or 
        damage in excess of the first $100,000 of loss or damage to the 
        items covered; or
            ``(5) not less than $200,000,000, coverage under this Act 
        shall extend only to loss or damage in excess of the first 
        $200,000 of loss or damage to the items covered.

``SEC. 6. REGULATIONS AND CERTIFICATION.

    ``(a) Regulations.--The Chairperson shall prescribe regulations 
providing for prompt adjustment of valid claims for loss or damage to 
items that are covered by an agreement entered into pursuant to section 
2, including provision for arbitration of issues relating to the dollar 
value of damages involving less than total loss or destruction of such 
covered items.
    ``(b) Certification.--In the case of a claim of loss or damage with 
respect to an item that is covered by an agreement entered into 
pursuant to section 2, the Chairperson shall certify the validity of 
the claim and the amount of the loss to the Speaker of the House of 
Representatives and the President pro tempore of the Senate.
``SEC. 7. COORDINATION ACTIVITIES.

    ``The Chairperson shall--
            ``(1) advise and consult with the Chairperson of the 
        National Endowment for the Humanities on major problems arising 
        in carrying out the purpose of the Foundation;
            ``(2) advise and consult with the National Museum Services 
        Board and with the Director of the Institute of Museum and 
        Library Services on major problems arising in carrying out the 
        purpose of the Museum Services Act;
            ``(3) coordinate, by advice and consultation, so far as is 
        practicable, the policies and operations of the National 
        Endowment for the Arts, the National Endowment for the 
        Humanities, and the Institute of Museum and Library Services, 
        including joint support of activities, as appropriate;
            ``(4) promote coordination between the programs and 
        activities of the Foundation and related programs and 
        activities of other Federal agencies;
            ``(5) plan and coordinate appropriate participation 
        (including productions and projects) in major and historic 
        national events; and
            ``(6) encourage an ongoing dialogue in support of the arts 
        and the humanities among Federal agencies.

``SEC. 8. REPORT.

    ``The Chairperson shall prepare, and submit at the end of each 
fiscal year to the appropriate committees of Congress, a report 
containing information on--
            ``(1) all claims paid pursuant to this Act during such 
        year;
            ``(2) pending claims against the Chairperson under this Act 
        as of the end of such year; and
            ``(3) the aggregate face value of contracts entered into by 
        the Chairperson that are outstanding at the end of such year.

``SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated such sums as may be 
necessary--
            ``(1) to enable the Chairperson to carry out the functions 
        of the Chairperson under this Act; and
            ``(2) to pay claims certified pursuant to section 6(b).''.
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