[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1385 Enrolled Bill (ENR)]

        H.R.1385

                       One Hundred Fifth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
the twenty-seventh day of January, one thousand nine hundred and ninety-
                                  eight


                                 An Act


 
To consolidate, coordinate, and improve employment, training, literacy, 
  and vocational rehabilitation programs in the United States, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Workforce 
Investment Act of 1998''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:
Sec. 1. Short title; table of contents.

                  TITLE I--WORKFORCE INVESTMENT SYSTEMS

              Subtitle A--Workforce Investment Definitions

Sec. 101. Definitions.

      Subtitle B--Statewide and Local Workforce Investment Systems

Sec. 106. Purpose.

                       Chapter 1--State Provisions

Sec. 111. State workforce investment boards.
Sec. 112. State plan.

                       Chapter 2--Local Provisions

Sec. 116. Local workforce investment areas.
Sec. 117. Local workforce investment boards.
Sec. 118. Local plan.

          Chapter 3--Workforce Investment Activities Providers

Sec. 121. Establishment of one-stop delivery systems.
Sec. 122. Identification of eligible providers of training services.
Sec. 123. Identification of eligible providers of youth activities.

                       Chapter 4--Youth Activities

Sec. 126. General authorization.
Sec. 127. State allotments.
Sec. 128. Within State allocations.
Sec. 129. Use of funds for youth activities.

     Chapter 5--Adult and Dislocated Worker Employment and Training 
                               Activities

Sec. 131. General authorization.
Sec. 132. State allotments.
Sec. 133. Within State allocations.
Sec. 134. Use of funds for employment and training activities.

                      Chapter 6--General Provisions

Sec. 136. Performance accountability system.
Sec. 137. Authorization of appropriations.

                          Subtitle C--Job Corps

Sec. 141. Purposes.
Sec. 142. Definitions.
Sec. 143. Establishment.
Sec. 144. Individuals eligible for the Job Corps.
Sec. 145. Recruitment, screening, selection, and assignment of 
          enrollees.
Sec. 146. Enrollment.
Sec. 147. Job Corps centers.
Sec. 148. Program activities.
Sec. 149. Counseling and job placement.
Sec. 150. Support.
Sec. 151. Operating plan.
Sec. 152. Standards of conduct.
Sec. 153. Community participation.
Sec. 154. Industry councils.
Sec. 155. Advisory committees.
Sec. 156. Experimental, research, and demonstration projects.
Sec. 157. Application of provisions of Federal law.
Sec. 158. Special provisions.
Sec. 159. Management information.
Sec. 160. General provisions.
Sec. 161. Authorization of appropriations.

                      Subtitle D--National Programs

Sec. 166. Native American programs.
Sec. 167. Migrant and seasonal farmworker programs.
Sec. 168. Veterans' workforce investment programs.
Sec. 169. Youth opportunity grants.
Sec. 170. Technical assistance.
Sec. 171. Demonstration, pilot, multiservice, research, and multistate 
          projects.
Sec. 172. Evaluations.
Sec. 173. National emergency grants.
Sec. 174. Authorization of appropriations.

                       Subtitle E--Administration

Sec. 181. Requirements and restrictions.
Sec. 182. Prompt allocation of funds.
Sec. 183. Monitoring.
Sec. 184. Fiscal controls; sanctions.
Sec. 185. Reports; recordkeeping; investigations.
Sec. 186. Administrative adjudication.
Sec. 187. Judicial review.
Sec. 188. Nondiscrimination.
Sec. 189. Administrative provisions.
Sec. 190. Reference.
Sec. 191. State legislative authority.
Sec. 192. Workforce flexibility plans.
Sec. 193. Use of certain real property.
Sec. 194. Continuation of State activities and policies.
Sec. 195. General program requirements.

              Subtitle F--Repeals and Conforming Amendments

Sec. 199. Repeals.
Sec. 199A. Conforming amendments.

                 TITLE II--ADULT EDUCATION AND LITERACY

Sec. 201. Short title.
Sec. 202. Purpose.
Sec. 203. Definitions.
Sec. 204. Home schools.
Sec. 205. Authorization of appropriations.

            Subtitle A--Adult Education and Literacy Programs

                      Chapter 1--Federal Provisions

Sec. 211. Reservation; grants to eligible agencies; allotments.
Sec. 212. Performance accountability system.

                       Chapter 2--State Provisions

Sec. 221. State administration.
Sec. 222. State distribution of funds; matching requirement.
Sec. 223. State leadership activities.
Sec. 224. State plan.
Sec. 225. Programs for corrections education and other institutionalized 
          individuals.

                       Chapter 3--Local Provisions

Sec. 231. Grants and contracts for eligible providers.
Sec. 232. Local application.
Sec. 233. Local administrative cost limits.

                      Chapter 4--General Provisions

Sec. 241. Administrative provisions.
Sec. 242. National Institute for Literacy.
Sec. 243. National leadership activities.

                           Subtitle B--Repeals

Sec. 251. Repeals.

           TITLE III--WORKFORCE INVESTMENT-RELATED ACTIVITIES

                      Subtitle A--Wagner-Peyser Act

Sec. 301. Definitions.
Sec. 302. Functions.
Sec. 303. Designation of State agencies.
Sec. 304. Appropriations.
Sec. 305. Disposition of allotted funds.
Sec. 306. State plans.
Sec. 307. Repeal of Federal advisory council.
Sec. 308. Regulations.
Sec. 309. Employment statistics.
Sec. 310. Technical amendments.
Sec. 311. Effective date.

                Subtitle B--Linkages With Other Programs

Sec. 321. Trade Act of 1974.
Sec. 322. Veterans' employment programs.
Sec. 323. Older Americans Act of 1965.

          Subtitle C--Twenty-First Century Workforce Commission

Sec. 331. Short title.
Sec. 332. Findings.
Sec. 333. Definitions.
Sec. 334. Establishment of Twenty-First Century Workforce Commission.
Sec. 335. Duties of the Commission.
Sec. 336. Powers of the Commission.
Sec. 337. Commission personnel matters.
Sec. 338. Termination of the Commission.
Sec. 339. Authorization of appropriations.

Subtitle D--Application of Civil Rights and Labor-Management Laws to the 
                         Smithsonian Institution

Sec. 341. Application of civil rights and labor-management laws to the 
          Smithsonian Institution.

             TITLE IV--REHABILITATION ACT AMENDMENTS OF 1998

Sec. 401. Short title.
Sec. 402. Title.
Sec. 403. General provisions.
Sec. 404. Vocational rehabilitation services.
Sec. 405. Research and training.
Sec. 406. Professional development and special projects and 
          demonstrations.
Sec. 407. National Council on Disability.
Sec. 408. Rights and advocacy.
Sec. 409. Employment opportunities for individuals with disabilities.
Sec. 410. Independent living services and centers for independent 
          living.
Sec. 411. Repeal.
Sec. 412. Helen Keller National Center Act.
Sec. 413. President's Committee on Employment of People With 
          Disabilities.
Sec. 414. Conforming amendments.

                       TITLE V--GENERAL PROVISIONS

Sec. 501. State unified plan.
Sec. 502. Definitions for indicators of performance.
Sec. 503. Incentive grants.
Sec. 504. Privacy.
Sec. 505. Buy-American requirements.
Sec. 506. Transition provisions.
Sec. 507. Effective date.

                 TITLE I--WORKFORCE INVESTMENT SYSTEMS
              Subtitle A--Workforce Investment Definitions

SEC. 101. DEFINITIONS.

    In this title:
        (1) Adult.--Except in sections 127 and 132, the term ``adult'' 
    means an individual who is age 18 or older.
        (2) Adult education; adult education and literacy activities.--
    The terms ``adult education'' and ``adult education and literacy 
    activities'' have the meanings given the terms in section 203.
        (3) Area vocational education school.--The term ``area 
    vocational education school'' has the meaning given the term in 
    section 521 of the Carl D. Perkins Vocational and Applied 
    Technology Education Act (20 U.S.C. 2471).
        (4) Basic skills deficient.--The term ``basic skills 
    deficient'' means, with respect to an individual, that the 
    individual has English reading, writing, or computing skills at or 
    below the 8th grade level on a generally accepted standardized test 
    or a comparable score on a criterion-referenced test.
        (5) Case management.--The term ``case management'' means the 
    provision of a client-centered approach in the delivery of 
    services, designed--
            (A) to prepare and coordinate comprehensive employment 
        plans, such as service strategies, for participants to ensure 
        access to necessary workforce investment activities and 
        supportive services, using, where feasible, computer-based 
        technologies; and
            (B) to provide job and career counseling during program 
        participation and after job placement.
        (6) Chief elected official.--The term ``chief elected 
    official'' means--
            (A) the chief elected executive officer of a unit of 
        general local government in a local area; and
            (B) in a case in which a local area includes more than one 
        unit of general local government, the individuals designated 
        under the agreement described in section 117(c)(1)(B).
        (7) Community-based organization.--The term ``community-based 
    organization'' means a private nonprofit organization that is 
    representative of a community or a significant segment of a 
    community and that has demonstrated expertise and effectiveness in 
    the field of workforce investment.
        (8) Customized training.--The term ``customized training'' 
    means training--
            (A) that is designed to meet the special requirements of an 
        employer (including a group of employers);
            (B) that is conducted with a commitment by the employer to 
        employ an individual on successful completion of the training; 
        and
            (C) for which the employer pays for not less than 50 
        percent of the cost of the training.
        (9) Dislocated worker.--The term ``dislocated worker'' means an 
    individual who--
            (A)(i) has been terminated or laid off, or who has received 
        a notice of termination or layoff, from employment;
            (ii)(I) is eligible for or has exhausted entitlement to 
        unemployment compensation; or
            (II) has been employed for a duration sufficient to 
        demonstrate, to the appropriate entity at a one-stop center 
        referred to in section 134(c), attachment to the workforce, but 
        is not eligible for unemployment compensation due to 
        insufficient earnings or having performed services for an 
        employer that were not covered under a State unemployment 
        compensation law; and
            (iii) is unlikely to return to a previous industry or 
        occupation;
            (B)(i) has been terminated or laid off, or has received a 
        notice of termination or layoff, from employment as a result of 
        any permanent closure of, or any substantial layoff at, a 
        plant, facility, or enterprise;
            (ii) is employed at a facility at which the employer has 
        made a general announcement that such facility will close 
        within 180 days; or
            (iii) for purposes of eligibility to receive services other 
        than training services described in section 134(d)(4), 
        intensive services described in section 134(d)(3), or 
        supportive services, is employed at a facility at which the 
        employer has made a general announcement that such facility 
        will close;
            (C) was self-employed (including employment as a farmer, a 
        rancher, or a fisherman) but is unemployed as a result of 
        general economic conditions in the community in which the 
        individual resides or because of natural disasters; or
            (D) is a displaced homemaker.
        (10) Displaced homemaker.--The term ``displaced homemaker'' 
    means an individual who has been providing unpaid services to 
    family members in the home and who--
            (A) has been dependent on the income of another family 
        member but is no longer supported by that income; and
            (B) is unemployed or underemployed and is experiencing 
        difficulty in obtaining or upgrading employment.
        (11) Economic development agencies.--The term ``economic 
    development agencies'' includes local planning and zoning 
    commissions or boards, community development agencies, and other 
    local agencies and institutions responsible for regulating, 
    promoting, or assisting in local economic development.
        (12) Eligible provider.--The term ``eligible provider'', used 
    with respect to--
            (A) training services, means a provider who is identified 
        in accordance with section 122(e)(3);
            (B) intensive services, means a provider who is identified 
        or awarded a contract as described in section 134(d)(3)(B);
            (C) youth activities, means a provider who is awarded a 
        grant or contract in accordance with section 123; or
            (D) other workforce investment activities, means a public 
        or private entity selected to be responsible for such 
        activities, such as a one-stop operator designated or certified 
        under section 121(d).
        (13)  Eligible youth.--Except as provided in subtitles C and D, 
    the term ``eligible youth'' means an individual who--
            (A) is not less than age 14 and not more than age 21;
            (B) is a low-income individual; and
            (C) is an individual who is one or more of the following:
                (i) Deficient in basic literacy skills.
                (ii) A school dropout.
                (iii) Homeless, a runaway, or a foster child.
                (iv) Pregnant or a parent.
                (v) An offender.
                (vi) An individual who requires additional assistance 
            to complete an educational program, or to secure and hold 
            employment.
        (14) Employment and training activity.--The term ``employment 
    and training activity'' means an activity described in section 134 
    that is carried out for an adult or dislocated worker.
        (15) Family.--The term ``family'' means two or more persons 
    related by blood, marriage, or decree of court, who are living in a 
    single residence, and are included in one or more of the following 
    categories:
            (A) A husband, wife, and dependent children.
            (B) A parent or guardian and dependent children.
            (C) A husband and wife.
        (16) Governor.--The term ``Governor'' means the chief executive 
    of a State.
        (17) Individual with a disability.--
            (A) In general.--The term ``individual with a disability'' 
        means an individual with any disability (as defined in section 
        3 of the Americans with Disabilities Act of 1990 (42 U.S.C. 
        12102)).
            (B) Individuals with disabilities.--The term ``individuals 
        with disabilities'' means more than one individual with a 
        disability.
        (18) Labor market area.--The term ``labor market area'' means 
    an economically integrated geographic area within which individuals 
    can reside and find employment within a reasonable distance or can 
    readily change employment without changing their place of 
    residence. Such an area shall be identified in accordance with 
    criteria used by the Bureau of Labor Statistics of the Department 
    of Labor in defining such areas or similar criteria established by 
    a Governor.
        (19) Literacy.--The term ``literacy'' has the meaning given the 
    term in section 203.
        (20) Local area.--The term ``local area'' means a local 
    workforce investment area designated under section 116.
        (21) Local board.--The term ``local board'' means a local 
    workforce investment board established under section 117.
        (22) Local performance measure.--The term ``local performance 
    measure'' means a performance measure established under section 
    136(c).
        (23) Local educational agency.--The term ``local educational 
    agency'' has the meaning given the term in section 14101 of the 
    Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801).
        (24) Lower living standard income level.--The term ``lower 
    living standard income level'' means that income level (adjusted 
    for regional, metropolitan, urban, and rural differences and family 
    size) determined annually by the Secretary based on the most recent 
    lower living family budget issued by the Secretary.
        (25) Low-income individual.--The term ``low-income individual'' 
    means an individual who--
            (A) receives, or is a member of a family that receives, 
        cash payments under a Federal, State, or local income-based 
        public assistance program;
            (B) received an income, or is a member of a family that 
        received a total family income, for the 6-month period prior to 
        application for the program involved (exclusive of unemployment 
        compensation, child support payments, payments described in 
        subparagraph (A), and old-age and survivors insurance benefits 
        received under section 202 of the Social Security Act (42 
        U.S.C. 402)) that, in relation to family size, does not exceed 
        the higher of--
                (i) the poverty line, for an equivalent period; or
                (ii) 70 percent of the lower living standard income 
            level, for an equivalent period;
            (C) is a member of a household that receives (or has been 
        determined within the 6-month period prior to application for 
        the program involved to be eligible to receive) food stamps 
        pursuant to the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);
            (D) qualifies as a homeless individual, as defined in 
        subsections (a) and (c) of section 103 of the Stewart B. 
        McKinney Homeless Assistance Act (42 U.S.C. 11302);
            (E) is a foster child on behalf of whom State or local 
        government payments are made; or
            (F) in cases permitted by regulations promulgated by the 
        Secretary of Labor, is an individual with a disability whose 
        own income meets the requirements of a program described in 
        subparagraph (A) or of subparagraph (B), but who is a member of 
        a family whose income does not meet such requirements.
        (26) Nontraditional employment.--The term ``nontraditional 
    employment'' refers to occupations or fields of work for which 
    individuals from one gender comprise less than 25 percent of the 
    individuals employed in each such occupation or field of work.
        (27) Offender.--The term ``offender'' means any adult or 
    juvenile--
            (A) who is or has been subject to any stage of the criminal 
        justice process, for whom services under this Act may be 
        beneficial; or
            (B) who requires assistance in overcoming artificial 
        barriers to employment resulting from a record of arrest or 
        conviction.
        (28) Older individual.--The term ``older individual'' means an 
    individual age 55 or older.
        (29) One-stop operator.--The term ``one-stop operator'' means 1 
    or more entities designated or certified under section 121(d).
        (30) One-stop partner.--The term ``one-stop partner'' means--
            (A) an entity described in section 121(b)(1); and
            (B) an entity described in section 121(b)(2) that is 
        participating, with the approval of the local board and chief 
        elected official, in the operation of a one-stop delivery 
        system.
        (31) On-the-job training.--The term ``on-the-job training'' 
    means training by an employer that is provided to a paid 
    participant while engaged in productive work in a job that--
            (A) provides knowledge or skills essential to the full and 
        adequate performance of the job;
            (B) provides reimbursement to the employer of up to 50 
        percent of the wage rate of the participant, for the 
        extraordinary costs of providing the training and additional 
        supervision related to the training; and
            (C) is limited in duration as appropriate to the occupation 
        for which the participant is being trained, taking into account 
        the content of the training, the prior work experience of the 
        participant, and the service strategy of the participant, as 
        appropriate.
        (32) Outlying area.--The term ``outlying area'' means the 
    United States Virgin Islands, Guam, American Samoa, the 
    Commonwealth of the Northern Mariana Islands, the Republic of the 
    Marshall Islands, the Federated States of Micronesia, and the 
    Republic of Palau.
        (33) Out-of-school youth.--The term ``out-of-school youth'' 
    means--
            (A) an eligible youth who is a school dropout; or
            (B) an eligible youth who has received a secondary school 
        diploma or its equivalent but is basic skills deficient, 
        unemployed, or underemployed.
        (34) Participant.--The term ``participant'' means an individual 
    who has been determined to be eligible to participate in and who is 
    receiving services (except followup services authorized under this 
    title) under a program authorized by this title. Participation 
    shall be deemed to commence on the first day, following 
    determination of eligibility, on which the individual began 
    receiving subsidized employment, training, or other services 
    provided under this title.
        (35) Postsecondary educational institution.--The term 
    ``postsecondary educational institution'' means an institution of 
    higher education, as defined in section 481 of the Higher Education 
    Act of 1965 (20 U.S.C. 1088).
        (36) Poverty line.--The term ``poverty line'' means the 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.
        (37) Public assistance.--The term ``public assistance'' means 
    Federal, State, or local government cash payments for which 
    eligibility is determined by a needs or income test.
        (38) Rapid response activity.--The term ``rapid response 
    activity'' means an activity provided by a State, or by an entity 
    designated by a State, with funds provided by the State under 
    section 134(a)(1)(A), in the case of a permanent closure or mass 
    layoff at a plant, facility, or enterprise, or a natural or other 
    disaster, that results in mass job dislocation, in order to assist 
    dislocated workers in obtaining reemployment as soon as possible, 
    with services including--
            (A) the establishment of onsite contact with employers and 
        employee representatives--
                (i) immediately after the State is notified of a 
            current or projected permanent closure or mass layoff; or
                (ii) in the case of a disaster, immediately after the 
            State is made aware of mass job dislocation as a result of 
            such disaster;
            (B) the provision of information and access to available 
        employment and training activities;
            (C) assistance in establishing a labor-management 
        committee, voluntarily agreed to by labor and management, with 
        the ability to devise and implement a strategy for assessing 
        the employment and training needs of dislocated workers and 
        obtaining services to meet such needs;
            (D) the provision of emergency assistance adapted to the 
        particular closure, layoff, or disaster; and
            (E) the provision of assistance to the local community in 
        developing a coordinated response and in obtaining access to 
        State economic development assistance.
        (39) School dropout.--The term ``school dropout'' means an 
    individual who is no longer attending any school and who has not 
    received a secondary school diploma or its recognized equivalent.
        (40) Secondary school.--The term ``secondary school'' has the 
    meaning given the term in section 14101 of the Elementary and 
    Secondary Education Act of 1965 (20 U.S.C. 8801).
        (41) Secretary.--The term ``Secretary'' means the Secretary of 
    Labor, and the term means such Secretary for purposes of section 
    503.
        (42) State.--The term ``State'' means each of the several 
    States of the United States, the District of Columbia, and the 
    Commonwealth of Puerto Rico.
        (43) State adjusted level of performance.--The term ``State 
    adjusted level of performance'' means a level described in clause 
    (iii) or (v) of section 136(b)(3)(A).
        (44) State board.--The term ``State board'' means a State 
    workforce investment board established under section 111.
        (45) State performance measure.--The term ``State performance 
    measure'' means a performance measure established under section 
    136(b).
        (46) Supportive services.--The term ``supportive services'' 
    means services such as transportation, child care, dependent care, 
    housing, and needs-related payments, that are necessary to enable 
    an individual to participate in activities authorized under this 
    title, consistent with the provisions of this title.
        (47) Unemployed individual.--The term ``unemployed individual'' 
    means an individual who is without a job and who wants and is 
    available for work. The determination of whether an individual is 
    without a job shall be made in accordance with the criteria used by 
    the Bureau of Labor Statistics of the Department of Labor in 
    defining individuals as unemployed.
        (48) Unit of general local government.--The term ``unit of 
    general local government'' means any general purpose political 
    subdivision of a State that has the power to levy taxes and spend 
    funds, as well as general corporate and police powers.
        (49) Veteran; related definition.--
            (A) Veteran.--The term ``veteran'' means an individual who 
        served in the active military, naval, or air service, and who 
        was discharged or released from such service under conditions 
        other than dishonorable.
            (B) Recently separated veteran.--The term ``recently 
        separated veteran'' means any veteran who applies for 
        participation under this title within 48 months after the 
        discharge or release from active military, naval, or air 
        service.
        (50) Vocational education.--The term ``vocational education'' 
    has the meaning given the term in section 521 of the Carl D. 
    Perkins Vocational and Applied Technology Education Act (20 U.S.C. 
    2471).
        (51) Workforce investment activity.--The term ``workforce 
    investment activity'' means an employment and training activity, 
    and a youth activity.
        (52) Youth activity.--The term ``youth activity'' means an 
    activity described in section 129 that is carried out for eligible 
    youth (or as described in section 129(c)(5)).
        (53) Youth council.--The term ``youth council'' means a council 
    established under section 117(h).

      Subtitle B--Statewide and Local Workforce Investment Systems

SEC. 106. PURPOSE.

    The purpose of this subtitle is to provide workforce investment 
activities, through statewide and local workforce investment systems, 
that increase the employment, retention, and earnings of participants, 
and increase occupational skill attainment by participants, and, as a 
result, improve the quality of the workforce, reduce welfare 
dependency, and enhance the productivity and competitiveness of the 
Nation.

                      CHAPTER 1--STATE PROVISIONS

SEC. 111. STATE WORKFORCE INVESTMENT BOARDS.

    (a) In General.--The Governor of a State shall establish a State 
workforce investment board to assist in the development of the State 
plan described in section 112 and to carry out the other functions 
described in subsection (d).
    (b) Membership.--
        (1) In general.--The State Board shall include--
            (A) the Governor;
            (B) 2 members of each chamber of the State legislature, 
        appointed by the appropriate presiding officers of each such 
        chamber; and
            (C) representatives appointed by the Governor, who are--
                (i) representatives of business in the State, who--

                    (I) are owners of businesses, chief executives or 
                operating officers of businesses, and other business 
                executives or employers with optimum policymaking or 
                hiring authority, including members of local boards 
                described in section 117(b)(2)(A)(i);
                    (II) represent businesses with employment 
                opportunities that reflect the employment opportunities 
                of the State; and
                    (III) are appointed from among individuals 
                nominated by State business organizations and business 
                trade associations;

                (ii) chief elected officials (representing both cities 
            and counties, where appropriate);
                (iii) representatives of labor organizations, who have 
            been nominated by State labor federations;
                (iv) representatives of individuals and organizations 
            that have experience with respect to youth activities;
                (v) representatives of individuals and organizations 
            that have experience and expertise in the delivery of 
            workforce investment activities, including chief executive 
            officers of community colleges and community-based 
            organizations within the State;
                (vi)(I) the lead State agency officials with 
            responsibility for the programs and activities that are 
            described in section 121(b) and carried out by one-stop 
            partners; and
                (II) in any case in which no lead State agency official 
            has responsibility for such a program, service, or 
            activity, a representative in the State with expertise 
            relating to such program, service, or activity; and
                (vii) such other representatives and State agency 
            officials as the Governor may designate, such as the State 
            agency officials responsible for economic development and 
            juvenile justice programs in the State.
        (2) Authority and regional representation of board members.--
    Members of the board that represent organizations, agencies, or 
    other entities shall be individuals with optimum policymaking 
    authority within the organizations, agencies, or entities. The 
    members of the board shall represent diverse regions of the State, 
    including urban, rural, and suburban areas.
        (3) Majority.--A majority of the members of the State Board 
    shall be representatives described in paragraph (1)(C)(i).
    (c) Chairman.--The Governor shall select a chairperson for the 
State Board from among the representatives described in subsection 
(b)(1)(C)(i).
    (d) Functions.--The State Board shall assist the Governor in--
        (1) development of the State plan;
        (2) development and continuous improvement of a statewide 
    system of activities that are funded under this subtitle or carried 
    out through a one-stop delivery system described in section 134(c) 
    that receives funds under this subtitle (referred to in this title 
    as a ``statewide workforce investment system''), including--
            (A) development of linkages in order to assure coordination 
        and nonduplication among the programs and activities described 
        in section 121(b); and
            (B) review of local plans;
        (3) commenting at least once annually on the measures taken 
    pursuant to section 113(b)(14) of the Carl D. Perkins Vocational 
    and Applied Technology Education Act (20 U.S.C 2323(b)(14));
        (4) designation of local areas as required in section 116;
        (5) development of allocation formulas for the distribution of 
    funds for adult employment and training activities and youth 
    activities to local areas as permitted under sections 128(b)(3)(B) 
    and 133(b)(3)(B);
        (6) development and continuous improvement of comprehensive 
    State performance measures, including State adjusted levels of 
    performance, to assess the effectiveness of the workforce 
    investment activities in the State as required under section 
    136(b);
        (7) preparation of the annual report to the Secretary described 
    in section 136(d);
        (8) development of the statewide employment statistics system 
    described in section 15(e) of the Wagner-Peyser Act; and
        (9) development of an application for an incentive grant under 
    section 503.
    (e) Alternative Entity.--
        (1) In general.--For purposes of complying with subsections 
    (a), (b), and (c), a State may use any State entity (including a 
    State council, State workforce development board, combination of 
    regional workforce development boards, or similar entity) that--
            (A) was in existence on December 31, 1997;
            (B)(i) was established pursuant to section 122 or title VII 
        of the Job Training Partnership Act, as in effect on December 
        31, 1997; or
            (ii) is substantially similar to the State board described 
        in subsections (a), (b), and (c); and
            (C) includes representatives of business in the State and 
        representatives of labor organizations in the State.
        (2) References.--References in this Act to a State board shall 
    be considered to include such an entity.
    (f) Conflict of Interest.--A member of a State board may not--
        (1) vote on a matter under consideration by the State board--
            (A) regarding the provision of services by such member (or 
        by an entity that such member represents); or
            (B) that would provide direct financial benefit to such 
        member or the immediate family of such member; or
        (2) engage in any other activity determined by the Governor to 
    constitute a conflict of interest as specified in the State plan.
    (g) Sunshine Provision.--The State board shall make available to 
the public, on a regular basis through open meetings, information 
regarding the activities of the State board, including information 
regarding the State plan prior to submission of the plan, information 
regarding membership, and, on request, minutes of formal meetings of 
the State board.

SEC. 112. STATE PLAN.

    (a) In General.--For a State to be eligible to receive an allotment 
under section 127 or 132, or to receive financial assistance under the 
Wagner-Peyser Act (29 U.S.C. 49 et seq.), the Governor of the State 
shall submit to the Secretary for consideration by the Secretary, a 
single State plan (referred to in this title as the ``State plan'') 
that outlines a 5-year strategy for the statewide workforce investment 
system of the State and that meets the requirements of section 111 and 
this section.
    (b) Contents.--The State plan shall include--
        (1) a description of the State board, including a description 
    of the manner in which such board collaborated in the development 
    of the State plan and a description of how the board will continue 
    to collaborate in carrying out the functions described in section 
    111(d);
        (2) a description of State-imposed requirements for the 
    statewide workforce investment system;
        (3) a description of the State performance accountability 
    system developed for the workforce investment activities to be 
    carried out through the statewide workforce investment system, that 
    includes information identifying State performance measures as 
    described in section 136(b)(3)(A)(ii);
        (4) information describing--
            (A) the needs of the State with regard to current and 
        projected employment opportunities, by occupation;
            (B) the job skills necessary to obtain such employment 
        opportunities;
            (C) the skills and economic development needs of the State; 
        and
            (D) the type and availability of workforce investment 
        activities in the State;
        (5) an identification of local areas designated in the State, 
    including a description of the process used for the designation of 
    such areas;
        (6) an identification of criteria to be used by chief elected 
    officials for the appointment of members of local boards based on 
    the requirements of section 117;
        (7) the detailed plans required under section 8 of the Wagner-
    Peyser Act (29 U.S.C. 49g);
        (8)(A) a description of the procedures that will be taken by 
    the State to assure coordination of and avoid duplication among--
            (i) workforce investment activities authorized under this 
        title;
            (ii) other activities authorized under this title;
            (iii) programs authorized under the Wagner-Peyser Act (29 
        U.S.C. 49 et seq.), title II of this Act, title I of the 
        Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.), part A of 
        title IV of the Social Security Act (42 U.S.C. 601 et seq.), 
        and section 6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 
        2015(d)(4)), activities authorized under title V of the Older 
        Americans Act of 1965 (42 U.S.C. 3056 et seq.), and 
        postsecondary vocational education activities authorized under 
        the Carl D. Perkins Vocational and Applied Technology Education 
        Act (20 U.S.C. 2301 et seq.);
            (iv) work programs authorized under section 6(o) of the 
        Food Stamp Act of 1977 (7 U.S.C. 2015(o));
            (v) activities authorized under chapter 2 of title II of 
        the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
            (vi) activities authorized under chapter 41 of title 38, 
        United States Code;
            (vii) employment and training activities carried out under 
        the Community Services Block Grant Act (42 U.S.C. 9901 et 
        seq.);
            (viii) activities authorized under the National and 
        Community Service Act of 1990 (42 U.S.C. 12501 et seq.);
            (ix) employment and training activities carried out by the 
        Department of Housing and Urban Development; and
            (x) programs authorized under State unemployment 
        compensation laws (in accordance with applicable Federal law); 
        and
        (B) a description of the common data collection and reporting 
    processes used for the programs and activities described in 
    subparagraph (A);
        (9) a description of the process used by the State, consistent 
    with section 111(g), to provide an opportunity for public comment, 
    including comment by representatives of businesses and 
    representatives of labor organizations, and input into development 
    of the plan, prior to submission of the plan;
        (10) information identifying how the State will use funds the 
    State receives under this subtitle to leverage other Federal, 
    State, local, and private resources, in order to maximize the 
    effectiveness of such resources, and to expand the participation of 
    business, employees, and individuals in the statewide workforce 
    investment system;
        (11) assurances that the State will provide, in accordance with 
    section 184 for fiscal control and fund accounting procedures that 
    may be necessary to ensure the proper disbursement of, and 
    accounting for, funds paid to the State through the allotments made 
    under sections 127 and 132;
        (12)(A) a description of the methods and factors the State will 
    use in distributing funds to local areas for youth activities and 
    adult employment and training activities under sections 
    128(b)(3)(B) and 133(b)(3)(B), including--
            (i) a description of how the individuals and entities 
        represented on the State board were involved in determining 
        such methods and factors of distribution; and
            (ii) a description of how the State consulted with chief 
        elected officials in local areas throughout the State in 
        determining such distribution;
        (B) assurances that the funds will be distributed equitably 
    throughout the State, and that no local areas will suffer 
    significant shifts in funding from year to year; and
        (C) a description of the formula prescribed by the Governor 
    pursuant to section 133(b)(2)(B) for the allocation of funds to 
    local areas for dislocated worker employment and training 
    activities;
        (13) information specifying the actions that constitute a 
    conflict of interest prohibited in the State for purposes of 
    sections 111(f) and 117(g);
        (14) with respect to the one-stop delivery systems described in 
    section 134(c) (referred to individually in this title as a ``one-
    stop delivery system''), a description of the strategy of the State 
    for assisting local areas in development and implementation of 
    fully operational one-stop delivery systems in the State;
        (15) a description of the appeals process referred to in 
    section 116(a)(5);
        (16) a description of the competitive process to be used by the 
    State to award grants and contracts in the State for activities 
    carried out under this title;
        (17) with respect to the employment and training activities 
    authorized in section 134--
            (A) a description of--
                (i) the employment and training activities that will be 
            carried out with the funds received by the State through 
            the allotment made under section 132;
                (ii) how the State will provide rapid response 
            activities to dislocated workers from funds reserved under 
            section 133(a)(2) for such purposes, including the 
            designation of an identifiable State rapid response 
            dislocated worker unit to carry out statewide rapid 
            response activities;
                (iii) the procedures the local boards in the State will 
            use to identify eligible providers of training services 
            described in section 134(d)(4) (other than on-the-job 
            training or customized training), as required under section 
            122; and
                (iv) how the State will serve the employment and 
            training needs of dislocated workers (including displaced 
            homemakers), low-income individuals (including recipients 
            of public assistance), individuals training for 
            nontraditional employment, and other individuals with 
            multiple barriers to employment (including older 
            individuals and individuals with disabilities); and
            (B) an assurance that veterans will be afforded the 
        employment and training activities by the State, to the extent 
        practicable; and
        (18) with respect to youth activities authorized in section 
    129, information--
            (A) describing the State strategy for providing 
        comprehensive services to eligible youth, particularly those 
        eligible youth who are recognized as having significant 
        barriers to employment;
            (B) identifying the criteria to be used by local boards in 
        awarding grants for youth activities, including criteria that 
        the Governor and local boards will use to identify effective 
        and ineffective youth activities and providers of such 
        activities;
            (C) describing how the State will coordinate the youth 
        activities carried out in the State under section 129 with the 
        services provided by Job Corps centers in the State (where such 
        centers exist); and
            (D) describing how the State will coordinate youth 
        activities described in subparagraph (C) with activities 
        carried out through the youth opportunity grants under section 
        169.
    (c) Plan Submission and Approval.--A State plan submitted to the 
Secretary under this section by a Governor shall be considered to be 
approved by the Secretary at the end of the 90-day period beginning on 
the day the Secretary receives the plan, unless the Secretary makes a 
written determination, during the 90-day period, that--
        (1) the plan is inconsistent with the provisions of this title; 
    and
        (2) in the case of the portion of the plan described in section 
    8(a) of the Wagner-Peyser Act (29 U.S.C. 49g(a)), the portion does 
    not satisfy the criteria for approval provided in section 8(d) of 
    such Act.
    (d) Modifications to Plan.--A State may submit modifications to a 
State plan in accordance with the requirements of this section and 
section 111 as necessary during the 5-year period covered by the plan.

                      CHAPTER 2--LOCAL PROVISIONS

SEC. 116. LOCAL WORKFORCE INVESTMENT AREAS.

    (a) Designation of Areas.--
        (1) In general.--
            (A) Process.--Except as provided in subsection (b), and 
        consistent with paragraphs (2), (3), and (4), in order for a 
        State to receive an allotment under section 127 or 132, the 
        Governor of the State shall designate local workforce 
        investment areas within the State--
                (i) through consultation with the State board; and
                (ii) after consultation with chief elected officials 
            and after consideration of comments received through the 
            public comment process as described in section 112(b)(9).
            (B) Considerations.--In making the designation of local 
        areas, the Governor shall take into consideration the 
        following:
                (i) Geographic areas served by local educational 
            agencies and intermediate educational agencies.
                (ii) Geographic areas served by postsecondary 
            educational institutions and area vocational education 
            schools.
                (iii) The extent to which such local areas are 
            consistent with labor market areas.
                (iv) The distance that individuals will need to travel 
            to receive services provided in such local areas.
                (v) The resources of such local areas that are 
            available to effectively administer the activities carried 
            out under this subtitle.
        (2) Automatic designation.--The Governor shall approve any 
    request for designation as a local area--
            (A) from any unit of general local government with a 
        population of 500,000 or more;
            (B) of the area served by a rural concentrated employment 
        program grant recipient of demonstrated effectiveness that 
        served as a service delivery area or substate area under the 
        Job Training Partnership Act, if the grant recipient has 
        submitted the request; and
            (C) of an area that served as a service delivery area under 
        section 101(a)(4)(A)(ii) of the Job Training Partnership Act 
        (as in effect on the day before the date of enactment of this 
        Act) in a State that has a population of not more than 
        1,100,000 and a population density greater than 900 persons per 
        square mile.
        (3) Temporary and subsequent designation.--
            (A) Criteria.--Notwithstanding paragraph (2)(A), the 
        Governor shall approve any request, made not later than the 
        date of submission of the initial State plan under this 
        subtitle, for temporary designation as a local area from any 
        unit of general local government (including a combination of 
        such units) with a population of 200,000 or more that was a 
        service delivery area under the Job Training Partnership Act on 
        the day before the date of enactment of this Act if the 
        Governor determines that the area--
                (i) performed successfully, in each of the last 2 years 
            prior to the request for which data are available, in the 
            delivery of services to participants under part A of title 
            II and title III of the Job Training Partnership Act (as in 
            effect on such day); and
                (ii) has sustained the fiscal integrity of the funds 
            used by the area to carry out activities under such part 
            and title.
            (B) Duration and subsequent designation.--A temporary 
        designation under this paragraph shall be for a period of not 
        more than 2 years, after which the designation shall be 
        extended until the end of the period covered by the State plan 
        if the Governor determines that, during the temporary 
        designation period, the area substantially met (as defined by 
        the State board) the local performance measures for the local 
        area and sustained the fiscal integrity of the funds used by 
        the area to carry out activities under this subtitle.
            (C) Technical assistance.--The Secretary shall provide the 
        States with technical assistance in making the determinations 
        required by this paragraph. The Secretary shall not issue 
        regulations governing determinations to be made under this 
        paragraph.
            (D) Performed successfully.--In this paragraph, the term 
        ``performed successfully'' means that the area involved met or 
        exceeded the performance standards for activities administered 
        in the area that--
                (i) are established by the Secretary for each year and 
            modified by the adjustment methodology of the State (used 
            to account for differences in economic conditions, 
            participant characteristics, and combination of services 
            provided from the combination assumed for purposes of the 
            established standards of the Secretary); and
                (ii)(I) if the area was designated as both a service 
            delivery area and a substate area under the Job Training 
            Partnership Act (as in effect on the day before the date of 
            enactment of this Act)--

                    (aa) relate to job retention and earnings, with 
                respect to activities carried out under part A of title 
                II of such Act (as in effect on such day); or
                    (bb) relate to entry into employment, with respect 
                to activities carried out under title III of such Act 
                (as in effect on such day);

                (II) if the area was designated only as a service 
            delivery area under such Act (as in effect on such day), 
            relate to the standards described in subclause (I)(aa); or
                (III) if the area was only designated as a substate 
            area under such Act (as in effect on such day), relate to 
            the standards described in subclause (I)(bb).
            (E) Sustained the fiscal integrity.--In this paragraph, the 
        term ``sustained the fiscal integrity'', used with respect to 
        funds used by a service delivery area or local area, means that 
        the Secretary has not made a final determination during any of 
        the last 3 years for which data are available, prior to the 
        date of the designation request involved, that either the grant 
        recipient or the administrative entity of the area misexpended 
        the funds due to willful disregard of the requirements of the 
        Act involved, gross negligence, or failure to observe accepted 
        standards of administration.
        (4) Designation on recommendation of state board.--The Governor 
    may approve a request from any unit of general local government 
    (including a combination of such units) for designation (including 
    temporary designation) as a local area if the State board 
    determines, taking into account the factors described in clauses 
    (i) through (v) of paragraph (1)(B), and recommends to the 
    Governor, that such area should be so designated.
        (5) Appeals.--A unit of general local government (including a 
    combination of such units) or grant recipient that requests but is 
    not granted designation of an area as a local area under paragraph 
    (2) or (3) may submit an appeal to the State board under an appeal 
    process established in the State plan. If the appeal does not 
    result in such a designation, the Secretary, after receiving a 
    request for review from the unit or grant recipient and on 
    determining that the unit or grant recipient was not accorded 
    procedural rights under the appeal process established in the State 
    plan or that the area meets the requirements of paragraph (2) or 
    (3), as appropriate, may require that the area be designated as a 
    local area under such paragraph.
    (b) Small States.--The Governor of any State that was a single 
State service delivery area under the Job Training Partnership Act as 
of July 1, 1998, may designate the State as a single State local area 
for the purposes of this title. In the case of such a designation, the 
Governor shall identify the State as a local area under section 
112(b)(5).
    (c) Regional Planning and Cooperation.--
        (1) Planning.--As part of the process for developing the State 
    plan, a State may require regional planning by local boards for a 
    designated region in the State. The State may require the local 
    boards for a designated region to participate in a regional 
    planning process that results in the establishment of regional 
    performance measures for workforce investment activities authorized 
    under this subtitle. The State may award regional incentive grants 
    to the designated regions that meet or exceed the regional 
    performance measures.
        (2) Information sharing.--The State may require the local 
    boards for a designated region to share, in feasible cases, 
    employment statistics, information about employment opportunities 
    and trends, and other types of information that would assist in 
    improving the performance of all local areas in the designated 
    region on local performance measures.
        (3) Coordination of services.--The State may require the local 
    boards for a designated region to coordinate the provision of 
    workforce investment activities authorized under this subtitle, 
    including the provision of transportation and other supportive 
    services, so that services provided through the activities may be 
    provided across the boundaries of local areas within the designated 
    region.
        (4) Interstate regions.--Two or more States that contain an 
    interstate region that is a labor market area, economic development 
    region, or other appropriate contiguous subarea of the States may 
    designate the area as a designated region for purposes of this 
    subsection, and jointly exercise the State functions described in 
    paragraphs (1) through (3).
        (5) Definitions.--In this subsection:
            (A) Designated region.--The term ``designated region'' 
        means a combination of local areas that are partly or 
        completely in a single labor market area, economic development 
        region, or other appropriate contiguous subarea of a State, 
        that is designated by the State, except as provided in 
        paragraph (4).
            (B) Local board for a designated region.--The term ``local 
        board for a designated region'' means a local board for a local 
        area in a designated region.

SEC. 117. LOCAL WORKFORCE INVESTMENT BOARDS.

    (a) Establishment.--There shall be established in each local area 
of a State, and certified by the Governor of the State, a local 
workforce investment board, to set policy for the portion of the 
statewide workforce investment system within the local area (referred 
to in this title as a ``local workforce investment system'').
    (b) Membership.--
        (1) State criteria.--The Governor of the State, in partnership 
    with the State board, shall establish criteria for use by chief 
    elected officials in the local areas for appointment of members of 
    the local boards in such local areas in accordance with the 
    requirements of paragraph (2).
        (2) Composition.--Such criteria shall require, at a minimum, 
    that the membership of each local board--
            (A) shall include--
                (i) representatives of business in the local area, 
            who--

                    (I) are owners of businesses, chief executives or 
                operating officers of businesses, and other business 
                executives or employers with optimum policymaking or 
                hiring authority;
                    (II) represent businesses with employment 
                opportunities that reflect the employment opportunities 
                of the local area; and
                    (III) are appointed from among individuals 
                nominated by local business organizations and business 
                trade associations;

                (ii) representatives of local educational entities, 
            including representatives of local educational agencies, 
            local school boards, entities providing adult education and 
            literacy activities, and postsecondary educational 
            institutions (including representatives of community 
            colleges, where such entities exist), selected from among 
            individuals nominated by regional or local educational 
            agencies, institutions, or organizations representing such 
            local educational entities;
                (iii) representatives of labor organizations (for a 
            local area in which employees are represented by labor 
            organizations), nominated by local labor federations, or 
            (for a local area in which no employees are represented by 
            such organizations), other representatives of employees;
                (iv) representatives of community-based organizations 
            (including organizations representing individuals with 
            disabilities and veterans, for a local area in which such 
            organizations are present);
                (v) representatives of economic development agencies, 
            including private sector economic development entities; and
                (vi) representatives of each of the one-stop partners; 
            and
            (B) may include such other individuals or representatives 
        of entities as the chief elected official in the local area may 
        determine to be appropriate.
        (3) Authority of board members.--Members of the board that 
    represent organizations, agencies, or other entities shall be 
    individuals with optimum policymaking authority within the 
    organizations, agencies, or entities.
        (4) Majority.--A majority of the members of the local board 
    shall be representatives described in paragraph (2)(A)(i).
        (5) Chairperson.--The local board shall elect a chairperson for 
    the local board from among the representatives described in 
    paragraph (2)(A)(i).
    (c) Appointment and Certification of Board.--
        (1) Appointment of board members and assignment of 
    responsibilities.--
            (A) In general.--The chief elected official in a local area 
        is authorized to appoint the members of the local board for 
        such area, in accordance with the State criteria established 
        under subsection (b).
            (B) Multiple units of local government in area.--
                (i) In general.--In a case in which a local area 
            includes more than 1 unit of general local government, the 
            chief elected officials of such units may execute an 
            agreement that specifies the respective roles of the 
            individual chief elected officials--

                    (I) in the appointment of the members of the local 
                board from the individuals nominated or recommended to 
                be such members in accordance with the criteria 
                established under subsection (b); and
                    (II) in carrying out any other responsibilities 
                assigned to such officials under this subtitle.

                (ii) Lack of agreement.--If, after a reasonable effort, 
            the chief elected officials are unable to reach agreement 
            as provided under clause (i), the Governor may appoint the 
            members of the local board from individuals so nominated or 
            recommended.
            (C) Concentrated employment programs.--In the case of a 
        local area designated in accordance with section 116(a)(2)(B), 
        the governing body of the concentrated employment program 
        involved shall act in consultation with the chief elected 
        official in the local area to appoint members of the local 
        board, in accordance with the State criteria established under 
        subsection (b), and to carry out any other responsibility 
        relating to workforce investment activities assigned to such 
        official under this Act.
        (2) Certification.--
            (A) In general.--The Governor shall, once every 2 years, 
        certify 1 local board for each local area in the State.
            (B) Criteria.--Such certification shall be based on 
        criteria established under subsection (b) and, for a second or 
        subsequent certification, the extent to which the local board 
        has ensured that workforce investment activities carried out in 
        the local area have enabled the local area to meet the local 
        performance measures.
            (C) Failure to achieve certification.--Failure of a local 
        board to achieve certification shall result in reappointment 
        and certification of another local board for the local area 
        pursuant to the process described in paragraph (1) and this 
        paragraph.
        (3) Decertification.--
            (A) Fraud, abuse, failure to carry out functions.--
        Notwithstanding paragraph (2), the Governor may decertify a 
        local board, at any time after providing notice and an 
        opportunity for comment, for--
                (i) fraud or abuse; or
                (ii) failure to carry out the functions specified for 
            the local board in any of paragraphs (1) through (7) of 
            subsection (d).
            (B) Nonperformance.--Notwithstanding paragraph (2), the 
        Governor may decertify a local board if a local area fails to 
        meet the local performance measures for such local area for 2 
        consecutive program years (in accordance with section 136(h)).
            (C) Plan.--If the Governor decertifies a local board for a 
        local area under subparagraph (A) or (B), the Governor may 
        require that a new local board be appointed and certified for 
        the local area pursuant to a reorganization plan developed by 
        the Governor, in consultation with the chief elected official 
        in the local area, and in accordance with the criteria 
        established under subsection (b).
        (4) Single state area.--Notwithstanding subsection (b) and 
    paragraphs (1) and (2), if a State described in section 116(b) 
    indicates in the State plan that the State will be treated as a 
    local area for purposes of the application of this title, the 
    Governor may designate the State board to carry out any of the 
    functions described in subsection (d).
    (d) Functions of Local Board.--The functions of the local board 
shall include the following:
        (1) Local plan.--Consistent with section 118, each local board, 
    in partnership with the chief elected official for the local area 
    involved, shall develop and submit a local plan to the Governor.
        (2) Selection of operators and providers.--
            (A) Selection of one-stop operators.--Consistent with 
        section 121(d), the local board, with the agreement of the 
        chief elected official--
                (i) shall designate or certify one-stop operators as 
            described in section 121(d)(2)(A); and
                (ii) may terminate for cause the eligibility of such 
            operators.
            (B) Selection of youth providers.--Consistent with section 
        123, the local board shall identify eligible providers of youth 
        activities in the local area by awarding grants or contracts on 
        a competitive basis, based on the recommendations of the youth 
        council.
            (C) Identification of eligible providers of training 
        services.--Consistent with section 122, the local board shall 
        identify eligible providers of training services described in 
        section 134(d)(4) in the local area.
            (D) Identification of eligible providers of intensive 
        services.--If the one-stop operator does not provide intensive 
        services in a local area, the local board shall identify 
        eligible providers of intensive services described in section 
        134(d)(3) in the local area by awarding contracts.
        (3) Budget and administration.--
            (A) Budget.--The local board shall develop a budget for the 
        purpose of carrying out the duties of the local board under 
        this section, subject to the approval of the chief elected 
        official.
            (B) Administration.--
                (i) Grant recipient.--

                    (I) In general.--The chief elected official in a 
                local area shall serve as the local grant recipient 
                for, and shall be liable for any misuse of, the grant 
                funds allocated to the local area under sections 128 
                and 133, unless the chief elected official reaches an 
                agreement with the Governor for the Governor to act as 
                the local grant recipient and bear such liability.
                    (II) Designation.--In order to assist in the 
                administration of the grant funds, the chief elected 
                official or the Governor, where the Governor serves as 
                the local grant recipient for a local area, may 
                designate an entity to serve as a local grant 
                subrecipient for such funds or as a local fiscal agent. 
                Such designation shall not relieve the chief elected 
                official or the Governor of the liability for any 
                misuse of grant funds as described in subclause (I).
                    (III) Disbursal.--The local grant recipient or an 
                entity designated under subclause (II) shall disburse 
                such funds for workforce investment activities at the 
                direction of the local board, pursuant to the 
                requirements of this title, if the direction does not 
                violate a provision of this Act. The local grant 
                recipient or entity designated under subclause (II) 
                shall disburse the funds immediately on receiving such 
                direction from the local board.

                (ii) Staff.--The local board may employ staff.
                (iii) Grants and donations.--The local board may 
            solicit and accept grants and donations from sources other 
            than Federal funds made available under this Act.
        (4) Program oversight.--The local board, in partnership with 
    the chief elected official, shall conduct oversight with respect to 
    local programs of youth activities authorized under section 129, 
    local employment and training activities authorized under section 
    134, and the one-stop delivery system in the local area.
        (5) Negotiation of local performance measures.--The local 
    board, the chief elected official, and the Governor shall negotiate 
    and reach agreement on local performance measures as described in 
    section 136(c).
        (6) Employment statistics system.--The local board shall assist 
    the Governor in developing the statewide employment statistics 
    system described in section 15(e) of the Wagner-Peyser Act.
        (7) Employer linkages.--The local board shall coordinate the 
    workforce investment activities authorized under this subtitle and 
    carried out in the local area with economic development strategies 
    and develop other employer linkages with such activities.
        (8) Connecting, brokering, and coaching.--The local board shall 
    promote the participation of private sector employers in the 
    statewide workforce investment system and ensure the effective 
    provision, through the system, of connecting, brokering, and 
    coaching activities, through intermediaries such as the one-stop 
    operator in the local area or through other organizations, to 
    assist such employers in meeting hiring needs.
    (e) Sunshine Provision.--The local board shall make available to 
the public, on a regular basis through open meetings, information 
regarding the activities of the local board, including information 
regarding the local plan prior to submission of the plan, and regarding 
membership, the designation and certification of one-stop operators, 
and the award of grants or contracts to eligible providers of youth 
activities, and on request, minutes of formal meetings of the local 
board.
    (f) Limitations.--
        (1) Training services.--
            (A) In general.--Except as provided in subparagraph (B), no 
        local board may provide training services described in section 
        134(d)(4).
            (B) Waivers of training prohibition.--The Governor of the 
        State in which a local board is located may, pursuant to a 
        request from the local board, grant a written waiver of the 
        prohibition set forth in subparagraph (A) (relating to the 
        provision of training services) for a program of training 
        services, if the local board--
                (i) submits to the Governor a proposed request for the 
            waiver that includes--

                    (I) satisfactory evidence that there is an 
                insufficient number of eligible providers of such a 
                program of training services to meet local demand in 
                the local area;
                    (II) information demonstrating that the board meets 
                the requirements for an eligible provider of training 
                services under section 122; and
                    (III) information demonstrating that the program of 
                training services prepares participants for an 
                occupation that is in demand in the local area;

                (ii) makes the proposed request available to eligible 
            providers of training services and other interested members 
            of the public for a public comment period of not less than 
            30 days; and
                (iii) includes, in the final request for the waiver, 
            the evidence and information described in clause (i) and 
            the comments received pursuant to clause (ii).
            (C) Duration.--A waiver granted to a local board under 
        subparagraph (B) shall apply for a period of not to exceed 1 
        year. The waiver may be renewed for additional periods of not 
        to exceed 1 year, pursuant to requests from the local board, if 
        the board meets the requirements of subparagraph (B) in making 
        the requests.
            (D) Revocation.--The Governor may revoke a waiver granted 
        under this paragraph during the appropriate period described in 
        subparagraph (C) if the State determines that the local board 
        involved has engaged in a pattern of inappropriate referrals to 
        training services operated by the local board.
        (2) Core services; intensive services; designation or 
    certification as one-stop operators.--A local board may provide 
    core services described in section 134(d)(2) or intensive services 
    described in section 134(d)(3) through a one-stop delivery system 
    described in section 134(c) or be designated or certified as a one-
    stop operator only with the agreement of the chief elected official 
    and the Governor.
        (3) Limitation on authority.--Nothing in this Act shall be 
    construed to provide a local board with the authority to mandate 
    curricula for schools.
    (g) Conflict of Interest.--A member of a local board may not--
        (1) vote on a matter under consideration by the local board--
            (A) regarding the provision of services by such member (or 
        by an entity that such member represents); or
            (B) that would provide direct financial benefit to such 
        member or the immediate family of such member; or
        (2) engage in any other activity determined by the Governor to 
    constitute a conflict of interest as specified in the State plan.
    (h) Youth Council.--
        (1) Establishment.--There shall be established, as a subgroup 
    within each local board, a youth council appointed by the local 
    board, in cooperation with the chief elected official for the local 
    area.
        (2) Membership.--The membership of each youth council--
            (A) shall include--
                (i) members of the local board described in 
            subparagraph (A) or (B) of subsection (b)(2) with special 
            interest or expertise in youth policy;
                (ii) representatives of youth service agencies, 
            including juvenile justice and local law enforcement 
            agencies;
                (iii) representatives of local public housing 
            authorities;
                (iv) parents of eligible youth seeking assistance under 
            this subtitle;
                (v) individuals, including former participants, and 
            representatives of organizations, that have experience 
            relating to youth activities; and
                (vi) representatives of the Job Corps, as appropriate; 
            and
            (B) may include such other individuals as the chairperson 
        of the local board, in cooperation with the chief elected 
        official, determines to be appropriate.
        (3) Relationship to local board.--Members of the youth council 
    who are not members of the local board described in subparagraphs 
    (A) and (B) of subsection (b)(2) shall be voting members of the 
    youth council and nonvoting members of the board.
        (4) Duties.--The duties of the youth council include--
            (A) developing the portions of the local plan relating to 
        eligible youth, as determined by the chairperson of the local 
        board;
            (B) subject to the approval of the local board and 
        consistent with section 123--
                (i) recommending eligible providers of youth 
            activities, to be awarded grants or contracts on a 
            competitive basis by the local board to carry out the youth 
            activities; and
                (ii) conducting oversight with respect to the eligible 
            providers of youth activities, in the local area;
            (C) coordinating youth activities authorized under section 
        129 in the local area; and
            (D) other duties determined to be appropriate by the 
        chairperson of the local board.
    (i) Alternative Entity.--
        (1) In general.--For purposes of complying with subsections 
    (a), (b), and (c), and paragraphs (1) and (2) of subsection (h), a 
    State may use any local entity (including a local council, regional 
    workforce development board, or similar entity) that--
            (A) is established to serve the local area (or the service 
        delivery area that most closely corresponds to the local area);
            (B) is in existence on December 31, 1997;
            (C)(i) is established pursuant to section 102 of the Job 
        Training Partnership Act, as in effect on December 31, 1997; or
            (ii) is substantially similar to the local board described 
        in subsections (a), (b), and (c), and paragraphs (1) and (2) of 
        subsection (h); and
            (D) includes--
                (i) representatives of business in the local area; and
                (ii)(I) representatives of labor organizations (for a 
            local area in which employees are represented by labor 
            organizations), nominated by local labor federations; or
                (II) (for a local area in which no employees are 
            represented by such organizations), other representatives 
            of employees in the local area.
        (2) References.--References in this Act to a local board or a 
    youth council shall be considered to include such an entity or a 
    subgroup of such an entity, respectively.

SEC. 118. LOCAL PLAN.

    (a) In General.--Each local board shall develop and submit to the 
Governor a comprehensive 5-year local plan (referred to in this title 
as the ``local plan''), in partnership with the appropriate chief 
elected official. The plan shall be consistent with the State plan.
    (b) Contents.--The local plan shall include--
        (1) an identification of--
            (A) the workforce investment needs of businesses, 
        jobseekers, and workers in the local area;
            (B) the current and projected employment opportunities in 
        the local area; and
            (C) the job skills necessary to obtain such employment 
        opportunities;
        (2) a description of the one-stop delivery system to be 
    established or designated in the local area, including--
            (A) a description of how the local board will ensure the 
        continuous improvement of eligible providers of services 
        through the system and ensure that such providers meet the 
        employment needs of local employers and participants; and
            (B) a copy of each memorandum of understanding described in 
        section 121(c) (between the local board and each of the one-
        stop partners) concerning the operation of the one-stop 
        delivery system in the local area;
        (3) a description of the local levels of performance negotiated 
    with the Governor and chief elected official pursuant to section 
    136(c), to be used to measure the performance of the local area and 
    to be used by the local board for measuring the performance of the 
    local fiscal agent (where appropriate), eligible providers, and the 
    one-stop delivery system, in the local area;
        (4) a description and assessment of the type and availability 
    of adult and dislocated worker employment and training activities 
    in the local area;
        (5) a description of how the local board will coordinate 
    workforce investment activities carried out in the local area with 
    statewide rapid response activities, as appropriate;
        (6) a description and assessment of the type and availability 
    of youth activities in the local area, including an identification 
    of successful providers of such activities;
        (7) a description of the process used by the local board, 
    consistent with subsection (c), to provide an opportunity for 
    public comment, including comment by representatives of businesses 
    and comment by representatives of labor organizations, and input 
    into the development of the local plan, prior to submission of the 
    plan;
        (8) an identification of the entity responsible for the 
    disbursal of grant funds described in section 117(d)(3)(B)(i)(III), 
    as determined by the chief elected official or the Governor under 
    section 117(d)(3)(B)(i);
        (9) a description of the competitive process to be used to 
    award the grants and contracts in the local area for activities 
    carried out under this subtitle; and
        (10) such other information as the Governor may require.
    (c) Process.--Prior to the date on which the local board submits a 
local plan under this section, the local board shall--
        (1) make available copies of a proposed local plan to the 
    public through such means as public hearings and local news media;
        (2) allow members of the local board and members of the public, 
    including representatives of business and representatives of labor 
    organizations, to submit comments on the proposed local plan to the 
    local board, not later than the end of the 30-day period beginning 
    on the date on which the proposed local plan is made available; and
        (3) include with the local plan submitted to the Governor under 
    this section any such comments that represent disagreement with the 
    plan.
    (d) Plan Submission and Approval.--A local plan submitted to the 
Governor under this section shall be considered to be approved by the 
Governor at the end of the 90-day period beginning on the day the 
Governor receives the plan, unless the Governor makes a written 
determination during the 90-day period that--
        (1) deficiencies in activities carried out under this subtitle 
    have been identified, through audits conducted under section 184 or 
    otherwise, and the local area has not made acceptable progress in 
    implementing corrective measures to address the deficiencies; or
        (2) the plan does not comply with this title.

          CHAPTER 3--WORKFORCE INVESTMENT ACTIVITIES PROVIDERS

SEC. 121. ESTABLISHMENT OF ONE-STOP DELIVERY SYSTEMS.

    (a) In General.--Consistent with the State plan, the local board 
for a local area, with the agreement of the chief elected official for 
the local area, shall--
        (1) develop and enter into the memorandum of understanding 
    described in subsection (c) with one-stop partners;
        (2) designate or certify one-stop operators under subsection 
    (d); and
        (3) conduct oversight with respect to the one-stop delivery 
    system in the local area.
    (b) One-Stop Partners.--
        (1) Required partners.--
            (A) In general.--Each entity that carries out a program or 
        activities described in subparagraph (B) shall--
                (i) make available to participants, through a one-stop 
            delivery system, the services described in section 
            134(d)(2) that are applicable to such program or 
            activities; and
                (ii) participate in the operation of such system 
            consistent with the terms of the memorandum described in 
            subsection (c), and with the requirements of the Federal 
            law in which the program or activities are authorized.
            (B) Programs and activities.--The programs and activities 
        referred to in subparagraph (A) consist of--
                (i) programs authorized under this title;
                (ii) programs authorized under the Wagner-Peyser Act 
            (29 U.S.C. 49 et seq.);
                (iii) adult education and literacy activities 
            authorized under title II;
                (iv) programs authorized under title I of the 
            Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.);
                (v) programs authorized under section 403(a)(5) of the 
            Social Security Act (42 U.S.C. 603(a)(5)) (as added by 
            section 5001 of the Balanced Budget Act of 1997);
                (vi) activities authorized under title V of the Older 
            Americans Act of 1965 (42 U.S.C. 3056 et seq.);
                (vii) postsecondary vocational education activities 
            authorized under the Carl D. Perkins Vocational and Applied 
            Technology Education Act (20 U.S.C. 2301 et seq.);
                (viii) activities authorized under chapter 2 of title 
            II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
                (ix) activities authorized under chapter 41 of title 
            38, United States Code;
                (x) employment and training activities carried out 
            under the Community Services Block Grant Act (42 U.S.C. 
            9901 et seq.);
                (xi) employment and training activities carried out by 
            the Department of Housing and Urban Development; and
                (xii) programs authorized under State unemployment 
            compensation laws (in accordance with applicable Federal 
            law).
        (2) Additional partners.--
            (A) In general.--In addition to the entities described in 
        paragraph (1), other entities that carry out a human resource 
        program described in subparagraph (B) may--
                (i) make available to participants, through the one-
            stop delivery system, the services described in section 
            134(d)(2) that are applicable to such program; and
                (ii) participate in the operation of such system 
            consistent with the terms of the memorandum described in 
            subsection (c), and with the requirements of the Federal 
            law in which the program is authorized;
        if the local board and chief elected official involved approve 
        such participation.
            (B) Programs.--The programs referred to in subparagraph (A) 
        may include--
                (i) programs authorized under part A of title IV of the 
            Social Security Act (42 U.S.C. 601 et seq.);
                (ii) programs authorized under section 6(d)(4) of the 
            Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4));
                (iii) work programs authorized under section 6(o) of 
            the Food Stamp Act of 1977 (7 U.S.C. 2015(o));
                (iv) programs authorized under the National and 
            Community Service Act of 1990 (42 U.S.C. 12501 et seq.); 
            and
                (v) other appropriate Federal, State, or local 
            programs, including programs in the private sector.
    (c) Memorandum of Understanding.--
        (1) Development.--The local board, with the agreement of the 
    chief elected official, shall develop and enter into a memorandum 
    of understanding (between the local board and the one-stop 
    partners), consistent with paragraph (2), concerning the operation 
    of the one-stop delivery system in the local area.
        (2) Contents.--Each memorandum of understanding shall contain--
            (A) provisions describing--
                (i) the services to be provided through the one-stop 
            delivery system;
                (ii) how the costs of such services and the operating 
            costs of the system will be funded;
                (iii) methods for referral of individuals between the 
            one-stop operator and the one-stop partners, for the 
            appropriate services and activities; and
                (iv) the duration of the memorandum and the procedures 
            for amending the memorandum during the term of the 
            memorandum; and
            (B) such other provisions, consistent with the requirements 
        of this title, as the parties to the agreement determine to be 
        appropriate.
    (d) One-Stop Operators.--
        (1) Designation and certification.--Consistent with paragraphs 
    (2) and (3), the local board, with the agreement of the chief 
    elected official, is authorized to designate or certify one-stop 
    operators and to terminate for cause the eligibility of such 
    operators.
        (2) Eligibility.--To be eligible to receive funds made 
    available under this subtitle to operate a one-stop center referred 
    to in section 134(c), an entity (which may be a consortium of 
    entities)--
            (A) shall be designated or certified as a one-stop 
        operator--
                (i) through a competitive process; or
                (ii) in accordance with an agreement reached between 
            the local board and a consortium of entities that, at a 
            minimum, includes 3 or more of the one-stop partners 
            described in subsection (b)(1); and
            (B) may be a public or private entity, or consortium of 
        entities, of demonstrated effectiveness, located in the local 
        area, which may include--
                (i) a postsecondary educational institution;
                (ii) an employment service agency established under the 
            Wagner-Peyser Act (29 U.S.C. 49 et seq.), on behalf of the 
            local office of the agency;
                (iii) a private, nonprofit organization (including a 
            community-based organization);
                (iv) a private for-profit entity;
                (v) a government agency; and
                (vi) another interested organization or entity, which 
            may include a local chamber of commerce or other business 
            organization.
        (3) Exception.--Elementary schools and secondary schools shall 
    not be eligible for designation or certification as one-stop 
    operators, except that nontraditional public secondary schools and 
    area vocational education schools shall be eligible for such 
    designation or certification.
    (e) Established One-Stop Delivery System.--If a one-stop delivery 
system has been established in a local area prior to the date of 
enactment of this Act, the local board, the chief elected official, and 
the Governor involved may agree to certify an entity carrying out 
activities through the system as a one-stop operator for purposes of 
subsection (d), consistent with the requirements of subsection (b), of 
the memorandum of understanding, and of section 134(c).

SEC. 122. IDENTIFICATION OF ELIGIBLE PROVIDERS OF TRAINING SERVICES.

    (a) Eligibility Requirements.--
        (1) In general.--Except as provided in subsection (h), to be 
    identified as an eligible provider of training services described 
    in section 134(d)(4) (referred to in this section as ``training 
    services'') in a local area and to be eligible to receive funds 
    made available under section 133(b) for the provision of training 
    services, a provider of such services shall meet the requirements 
    of this section.
        (2) Providers.--Subject to the provisions of this section, to 
    be eligible to receive the funds, the provider shall be--
            (A) a postsecondary educational institution that--
                (i) is eligible to receive Federal funds under title IV 
            of the Higher Education Act of 1965 (20 U.S.C. 1070 et 
            seq.); and
                (ii) provides a program that leads to an associate 
            degree, baccalaureate degree, or certificate;
            (B) an entity that carries out programs under the Act of 
        August 16, 1937 (commonly known as the ``National 
        Apprenticeship Act''; 50 Stat. 664, chapter 663; 29 U.S.C. 50 
        et seq.); or
            (C) another public or private provider of a program of 
        training services.
    (b) Initial Eligibility Determination.--
        (1) Postsecondary educational institutions and entities 
    carrying out apprenticeship programs.--To be initially eligible to 
    receive funds as described in subsection (a) to carry out a program 
    described in subparagraph (A) or (B) of subsection (a)(2), a 
    provider described in subparagraph (A) or (B), respectively, of 
    subsection (a)(2) shall submit an application, to the local board 
    for the local area in which the provider desires to provide 
    training services, at such time, in such manner, and containing 
    such information as the local board may require.
        (2) Other eligible providers.--
            (A) Procedure.--Each Governor of a State shall establish a 
        procedure for use by local boards in the State in determining 
        the initial eligibility of a provider described in subsection 
        (a)(2)(C) to receive funds as described in subsection (a) for a 
        program of training services, including the initial eligibility 
        of--
                (i) a postsecondary educational institution to receive 
            such funds for a program not described in subsection 
            (a)(2)(A); and
                (ii) a provider described in subsection (a)(2)(B) to 
            receive such funds for a program not described in 
            subsection (a)(2)(B).
            (B) Recommendations.--In developing such procedure, the 
        Governor shall solicit and take into consideration the 
        recommendations of local boards and providers of training 
        services within the State.
            (C) Opportunity to submit comments.--The Governor shall 
        provide an opportunity, during the development of the 
        procedure, for interested members of the public, including 
        representatives of business and labor organizations, to submit 
        comments on such procedure.
            (D) Requirements.--In establishing the procedure, the 
        Governor shall require that, to be initially eligible to 
        receive funds as described in subsection (a) for a program, a 
        provider described in subsection (a)(2)(C)--
                (i) shall submit an application, to the local board for 
            the local area in which the provider desires to provide 
            training services, at such time and in such manner as may 
            be required, and containing a description of the program;
                (ii) if the provider provides training services through 
            a program on the date of application, shall include in the 
            application an appropriate portion of the performance 
            information and program cost information described in 
            subsection (d) for the program, as specified in the 
            procedure, and shall meet appropriate levels of performance 
            for the program, as specified in the procedure; and
                (iii) if the provider does not provide training 
            services on such date, shall meet appropriate requirements, 
            as specified in the procedure.
    (c) Subsequent Eligibility Determination.--
        (1) Procedure.--Each Governor of a State shall establish a 
    procedure for use by local boards in the State in determining the 
    eligibility of a provider described in subsection (a)(2) to 
    continue to receive funds as described in subsection (a) for a 
    program after an initial period of eligibility under subsection (b) 
    (referred to in this section as ``subsequent eligibility'').
        (2) Recommendations.--In developing such procedure, the 
    Governor shall solicit and take into consideration the 
    recommendations of local boards and providers of training services 
    within the State.
        (3) Opportunity to submit comments.--The Governor shall provide 
    an opportunity, during the development of the procedure, for 
    interested members of the public, including representatives of 
    business and labor organizations, to submit comments on such 
    procedure.
        (4) Considerations.--In developing such procedure, the Governor 
    shall ensure that the procedure requires the local boards to take 
    into consideration, in making the determinations of subsequent 
    eligibility--
            (A) the specific economic, geographic, and demographic 
        factors in the local areas in which providers seeking 
        eligibility are located; and
            (B) the characteristics of the populations served by 
        providers seeking eligibility, including the demonstrated 
        difficulties in serving such populations, where applicable.
        (5) Requirements.--In establishing the procedure, the Governor 
    shall require that, to be eligible to continue to receive funds as 
    described in subsection (a) for a program after the initial period 
    of eligibility, a provider described in subsection (a)(2) shall--
            (A) submit the performance information and program cost 
        information described in subsection (d)(1) for the program and 
        any additional information required to be submitted in 
        accordance with subsection (d)(2) for the program annually to 
        the appropriate local board at such time and in such manner as 
        may be required; and
            (B) annually meet the performance levels described in 
        paragraph (6) for the program, as demonstrated utilizing 
        quarterly records described in section 136, in a manner 
        consistent with section 136.
        (6) Levels of performance.--
            (A) In general.--At a minimum, the procedure described in 
        paragraph (1) shall require the provider to meet minimum 
        acceptable levels of performance based on the performance 
        information referred to in paragraph (5)(A).
            (B) Higher levels of performance eligibility.--The local 
        board may require higher levels of performance than the levels 
        referred to in subparagraph (A) for subsequent eligibility to 
        receive funds as described in subsection (a).
    (d) Performance and Cost Information.--
        (1) Required information.--For a provider of training services 
    to be determined to be subsequently eligible under subsection (c) 
    to receive funds as described in subsection (a), such provider 
    shall, under subsection (c), submit--
            (A) verifiable program-specific performance information 
        consisting of--
                (i) program information, including--

                    (I) the program completion rates for all 
                individuals participating in the applicable program 
                conducted by the provider;
                    (II) the percentage of all individuals 
                participating in the applicable program who obtain 
                unsubsidized employment, which may also include 
                information specifying the percentage of the 
                individuals who obtain unsubsidized employment in an 
                occupation related to the program conducted; and
                    (III) the wages at placement in employment of all 
                individuals participating in the applicable program; 
                and

                (ii) training services information for all participants 
            who received assistance under section 134 to participate in 
            the applicable program, including--

                    (I) the percentage of participants who have 
                completed the applicable program and who are placed in 
                unsubsidized employment;
                    (II) the retention rates in unsubsidized employment 
                of participants who have completed the applicable 
                program, 6 months after the first day of the 
                employment;
                    (III) the wages received by participants who have 
                completed the applicable program, 6 months after the 
                first day of the employment involved; and
                    (IV) where appropriate, the rates of licensure or 
                certification, attainment of academic degrees or 
                equivalents, or attainment of other measures of skills, 
                of the graduates of the applicable program; and

            (B) information on program costs (such as tuition and fees) 
        for participants in the applicable program.
        (2) Additional information.--Subject to paragraph (3), in 
    addition to the performance information described in paragraph 
    (1)--
            (A) the Governor may require that a provider submit, under 
        subsection (c), such other verifiable program-specific 
        performance information as the Governor determines to be 
        appropriate to obtain such subsequent eligibility, which may 
        include information relating to--
                (i) retention rates in employment and the subsequent 
            wages of all individuals who complete the applicable 
            program;
                (ii) where appropriate, the rates of licensure or 
            certification of all individuals who complete the program; 
            and
                (iii) the percentage of individuals who complete the 
            program who attain industry-recognized occupational skills 
            in the subject, occupation, or industry for which training 
            is provided through the program, where applicable; and
            (B) the Governor, or the local board, may require a 
        provider to submit, under subsection (c), other verifiable 
        program-specific performance information to obtain such 
        subsequent eligibility.
        (3) Conditions.--
            (A) In general.--If the Governor or a local board requests 
        additional information under paragraph (2) that imposes 
        extraordinary costs on providers, or if providers experience 
        extraordinary costs in the collection of information required 
        under paragraph (1)(A)(ii), the Governor or the local board 
        shall provide access to cost-effective methods for the 
        collection of the information involved, or the Governor shall 
        provide additional resources to assist providers in the 
        collection of such information from funds made available as 
        described in sections 128(a) and 133(a)(1), as appropriate.
            (B) Higher education eligibility requirements.--The local 
        board and the designated State agency described in subsection 
        (i) may accept program-specific performance information 
        consistent with the requirements for eligibility under title IV 
        of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) 
        from a provider for purposes of enabling the provider to 
        fulfill the applicable requirements of this subsection, if such 
        information is substantially similar to the information 
        otherwise required under this subsection.
    (e) Local Identification.--
        (1) In general.--The local board shall place on a list 
    providers submitting an application under subsection (b)(1) and 
    providers determined to be initially eligible under subsection 
    (b)(2), and retain on the list providers determined to be 
    subsequently eligible under subsection (c), to receive funds as 
    described in subsection (a) for the provision of training services 
    in the local area served by the local board. The list of providers 
    shall be accompanied by any performance information and program 
    cost information submitted under subsection (b) or (c) by the 
    provider.
        (2) Submission to state agency.--On placing or retaining a 
    provider on the list, the local board shall submit, to the 
    designated State agency described in subsection (i), the list and 
    the performance information and program cost information referred 
    to in paragraph (1). If the agency determines, within 30 days after 
    the date of the submission, that the provider does not meet the 
    performance levels described in subsection (c)(6) for the program 
    (where applicable), the agency may remove the provider from the 
    list for the program. The agency may not remove from the list an 
    agency submitting an application under subsection (b)(1).
        (3) Identification of eligible providers.--A provider who is 
    placed or retained on the list under paragraph (1), and is not 
    removed by the designated State agency under paragraph (2), for a 
    program, shall be considered to be identified as an eligible 
    provider of training services for the program.
        (4) Availability.--
            (A) State list.--The designated State agency shall compile 
        a single list of the providers identified under paragraph (3) 
        from all local areas in the State and disseminate such list, 
        and the performance information and program cost information 
        described in paragraph (1), to the one-stop delivery systems 
        within the State. Such list and information shall be made 
        widely available to participants in employment and training 
        activities authorized under section 134 and others through the 
        one-stop delivery system.
            (B) Selection from state list.--Individuals eligible to 
        receive training services under section 134(d)(4) shall have 
        the opportunity to select any of the eligible providers, from 
        any of the local areas in the State, that are included on the 
        list described in subparagraph (A) to provide the services, 
        consistent with the requirements of section 134.
        (5) Acceptance of individual training accounts by other 
    states.--States may enter into agreements, on a reciprocal basis, 
    to permit eligible providers of training services in a State to 
    accept individual training accounts provided in another State.
    (f) Enforcement.--
        (1) Accuracy of information.--If the designated State agency, 
    after consultation with the local board involved, determines that 
    an eligible provider or individual supplying information on behalf 
    of the provider intentionally supplies inaccurate information under 
    this section, the agency shall terminate the eligibility of the 
    provider to receive funds described in subsection (a) for any 
    program for a period of time, but not less than 2 years.
        (2) Noncompliance.--If the designated State agency, or the 
    local board working with the State agency, determines that an 
    eligible provider described in subsection (a) substantially 
    violates any requirement under this Act, the agency, or the local 
    board working with the State agency, may terminate the eligibility 
    of such provider to receive funds described in subsection (a) for 
    the program involved or take such other action as the agency or 
    local board determines to be appropriate.
        (3) Repayment.--A provider whose eligibility is terminated 
    under paragraph (1) or (2) for a program shall be liable for 
    repayment of all funds described in subsection (a) received for the 
    program during any period of noncompliance described in such 
    paragraph.
        (4) Construction.--This subsection and subsection (g) shall be 
    construed to provide remedies and penalties that supplement, but do 
    not supplant, other civil and criminal remedies and penalties.
    (g) Appeal.--The Governor shall establish procedures for providers 
of training services to appeal a denial of eligibility by the local 
board or the designated State agency under subsection (b), (c), or (e), 
a termination of eligibility or other action by the board or agency 
under subsection (f), or a denial of eligibility by a one-stop operator 
under subsection (h). Such procedures shall provide an opportunity for 
a hearing and prescribe appropriate time limits to ensure prompt 
resolution of the appeal.
    (h) On-the-Job Training or Customized Training Exception.--
        (1) In general.--Providers of on-the-job training or customized 
    training shall not be subject to the requirements of subsections 
    (a) through (e).
        (2) Collection and dissemination of information.--A one-stop 
    operator in a local area shall collect such performance information 
    from on-the-job training and customized training providers as the 
    Governor may require, determine whether the providers meet such 
    performance criteria as the Governor may require, and disseminate 
    information identifying providers that meet the criteria as 
    eligible providers, and the performance information, through the 
    one-stop delivery system. Providers determined to meet the criteria 
    shall be considered to be identified as eligible providers of 
    training services.
    (i) Administration.--The Governor shall designate a State agency to 
make the determinations described in subsection (e)(2), take the 
enforcement actions described in subsection (f), and carry out other 
duties described in this section.

SEC. 123. IDENTIFICATION OF ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.

    From funds allocated under paragraph (2)(A) or (3) of section 
128(b) to a local area, the local board for such area shall identify 
eligible providers of youth activities by awarding grants or contracts 
on a competitive basis, based on the recommendations of the youth 
council and on the criteria contained in the State plan, to the 
providers to carry out the activities, and shall conduct oversight with 
respect to the providers, in the local area.

                      CHAPTER 4--YOUTH ACTIVITIES

SEC. 126. GENERAL AUTHORIZATION.

    The Secretary shall make an allotment under section 127(b)(1)(C) to 
each State that meets the requirements of section 112 and a grant to 
each outlying area that complies with the requirements of this title, 
to assist the State or outlying area, and to enable the State or 
outlying area to assist local areas, for the purpose of providing 
workforce investment activities for eligible youth in the State or 
outlying area and in the local areas.

SEC. 127. STATE ALLOTMENTS.

    (a) In General.--The Secretary shall--
        (1) for each fiscal year in which the amount appropriated under 
    section 137(a) exceeds $1,000,000,000, reserve a portion determined 
    under subsection (b)(1)(A) of the amount appropriated under section 
    137(a) for use under sections 167 (relating to migrant and seasonal 
    farmworker programs) and 169 (relating to youth opportunity 
    grants); and
        (2) use the remainder of the amount appropriated under section 
    137(a) for a fiscal year to make allotments and grants in 
    accordance with subparagraphs (B) and (C) of subsection (b)(1) and 
    make funds available for use under section 166 (relating to Native 
    American programs).
    (b) Allotment Among States.--
        (1) Youth activities.--
            (A) Youth opportunity grants.--
                (i) In general.--For each fiscal year in which the 
            amount appropriated under section 137(a) exceeds 
            $1,000,000,000, the Secretary shall reserve a portion of 
            the amount to provide youth opportunity grants and other 
            activities under section 169 (relating to youth opportunity 
            grants) and provide youth activities under section 167 
            (relating to migrant and seasonal farmworker programs).
                (ii) Portion.--The portion referred to in clause (i) 
            shall equal, for a fiscal year--

                    (I) except as provided in subclause (II), the 
                difference obtained by subtracting $1,000,000,000 from 
                the amount appropriated under section 137(a) for the 
                fiscal year; or
                    (II) for any fiscal year in which the amount is 
                $1,250,000,000 or greater, $250,000,000.

                (iii) Youth activities for farmworkers.--From the 
            portion described in clause (i) for a fiscal year, the 
            Secretary shall make available 4 percent of such portion to 
            provide youth activities under section 167.
                (iv) Role model academy project.--From the portion 
            described in clause (i) for fiscal year 1999, the Secretary 
            shall make available such sums as the Secretary determines 
            to be appropriate to carry out section 169(g).
            (B) Outlying areas.--
                (i) In general.--From the amount made available under 
            subsection (a)(2) for a fiscal year, the Secretary shall 
            reserve not more than \1/4\ of 1 percent of the amount 
            appropriated under section 137(a) for the fiscal year--

                    (I) to provide assistance to the outlying areas to 
                carry out youth activities and statewide workforce 
                investment activities; and
                    (II) for each of fiscal years 1999, 2000, and 2001, 
                to carry out the competition described in clause (ii), 
                except that the funds reserved to carry out such clause 
                for any such fiscal year shall not exceed the amount 
                reserved for the Freely Associated States for fiscal 
                year 1997, from amounts reserved under sections 252(a) 
                and 262(a)(1) of the Job Training Partnership Act (as 
                in effect on the day before the date of enactment of 
                this Act).

                (ii) Limitation for freely associated states.--

                    (I) Competitive grants.--The Secretary shall use 
                funds described in clause (i)(II) to award grants to 
                Guam, American Samoa, the Commonwealth of the Northern 
                Mariana Islands, and the Freely Associated States to 
                carry out youth activities and statewide workforce 
                investment activities.
                    (II) Award basis.--The Secretary shall award grants 
                pursuant to subclause (I) on a competitive basis and 
                pursuant to the recommendations of experts in the field 
                of employment and training, working through the Pacific 
                Region Educational Laboratory in Honolulu, Hawaii.
                    (III) Assistance requirements.--Any Freely 
                Associated State that desires to receive assistance 
                under this subparagraph shall submit an application to 
                the Secretary and shall include in the application for 
                assistance--

                        (aa) information demonstrating that the Freely 
                    Associated State will meet all conditions that 
                    apply to States under this title;
                        (bb) an assurance that, notwithstanding any 
                    other provision of this title, the Freely 
                    Associated State will use such assistance only for 
                    the direct provision of services; and
                        (cc) such other information and assurances as 
                    the Secretary may require.

                    (IV) Termination of eligibility.--Notwithstanding 
                any other provision of law, the Freely Associated 
                States shall not receive any assistance under this 
                subparagraph for any program year that begins after 
                September 30, 2001.
                    (V) Administrative costs.--The Secretary may 
                provide not more than 5 percent of the funds made 
                available for grants under subclause (I) to pay the 
                administrative costs of the Pacific Region Educational 
                Laboratory in Honolulu, Hawaii, regarding activities 
                assisted under this clause.

                (iii) Additional requirement.--The provisions of Public 
            Law 95-134, permitting the consolidation of grants by the 
            outlying areas, shall not apply to assistance provided to 
            those areas, including the Freely Associated States, under 
            this subparagraph.
            (C) States.--
                (i) In general.--After determining the amounts to be 
            reserved under subparagraph (A) (if any) and subparagraph 
            (B), the Secretary shall--

                    (I) from the amount referred to in subsection 
                (a)(2) for a fiscal year, make available not more than 
                1.5 percent to provide youth activities under section 
                166 (relating to Native Americans); and
                    (II) allot the remainder of the amount referred to 
                in subsection (a)(2) for a fiscal year to the States 
                pursuant to clause (ii) for youth activities and 
                statewide workforce investment activities.

                (ii) Formula.--Subject to clauses (iii) and (iv), of 
            the remainder--

                    (I) 33\1/3\ percent shall be allotted on the basis 
                of the relative number of unemployed individuals in 
                areas of substantial unemployment in each State, 
                compared to the total number of unemployed individuals 
                in areas of substantial unemployment in all States;
                    (II) 33\1/3\ percent shall be allotted on the basis 
                of the relative excess number of unemployed individuals 
                in each State, compared to the total excess number of 
                unemployed individuals in all States; and
                    (III) 33\1/3\ percent shall be allotted on the 
                basis of the relative number of disadvantaged youth in 
                each State, compared to the total number of 
                disadvantaged youth in all States, except as described 
                in clause (iii).

                (iii) Calculation.--In determining an allotment under 
            clause (ii)(III) for any State in which there is a local 
            area designated under section 116(a)(2)(B) (relating to the 
            area served by a rural concentrated employment program 
            grant recipient), the allotment shall be based on the 
            higher of--

                    (I) the number of individuals who are age 16 
                through 21 in families with an income below the low-
                income level in such area; or
                    (II) the number of disadvantaged youth in such 
                area.

                (iv) Minimum and maximum percentages and minimum 
            allotments.--In making allotments under this subparagraph, 
            the Secretary shall ensure the following:

                    (I) Minimum percentage and allotment.--Subject to 
                subclause (IV), the Secretary shall ensure that no 
                State shall receive an allotment for a fiscal year that 
                is less than the greater of--

                        (aa) an amount based on 90 percent of the 
                    allotment percentage of the State for the preceding 
                    fiscal year; or
                        (bb) 100 percent of the total of the allotments 
                    of the State under sections 252 and 262 of the Job 
                    Training Partnership Act (as in effect on the day 
                    before the date of enactment of this Act) for 
                    fiscal year 1998.

                    (II) Small state minimum allotment.-- Subject to 
                subclauses (I), (III), and (IV), the Secretary shall 
                ensure that no State shall receive an allotment under 
                this subparagraph that is less than the total of--

                        (aa) \3/10\ of 1 percent of $1,000,000,000 of 
                    the remainder described in clause (i)(II) for the 
                    fiscal year; and
                        (bb) if the remainder described in clause 
                    (i)(II) for the fiscal year exceeds $1,000,000,000, 
                    \2/5\ of 1 percent of the excess.

                    (III) Maximum percentage.--Subject to subclause 
                (I), the Secretary shall ensure that no State shall 
                receive an allotment percentage for a fiscal year that 
                is more than 130 percent of the allotment percentage of 
                the State for the preceding fiscal year.
                    (IV) Minimum funding.--In any fiscal year in which 
                the remainder described in clause (i)(II) does not 
                exceed $1,000,000,000, the minimum allotments under 
                subclauses (I) and (II) shall be calculated by the 
                methodology for calculating the corresponding 
                allotments under parts B and C of title II of the Job 
                Training Partnership Act, as in effect on July 1, 1998.

        (2) Definitions.--For the purpose of the formula specified in 
    paragraph (1)(C):
            (A) Allotment percentage.--The term ``allotment 
        percentage'', used with respect to fiscal year 2000 or a 
        subsequent fiscal year, means a percentage of the remainder 
        described in paragraph (1)(C)(i)(II) that is received through 
        an allotment made under paragraph (1)(C) for the fiscal year. 
        The term, used with respect to fiscal year 1998 or 1999, means 
        the percentage of the amounts allotted to States under sections 
        252(b) and 262(a) of the Job Training Partnership Act (as in 
        effect on the day before the date of enactment of this Act) 
        that is received under such sections by the State involved for 
        fiscal year 1998 or 1999.
            (B) Area of substantial unemployment.--The term ``area of 
        substantial unemployment'' means any area that is of sufficient 
        size and scope to sustain a program of workforce investment 
        activities carried out under this subtitle and that has an 
        average rate of unemployment of at least 6.5 percent for the 
        most recent 12 months, as determined by the Secretary. For 
        purposes of this subparagraph, determinations of areas of 
        substantial unemployment shall be made once each fiscal year.
            (C) Disadvantaged youth.--Subject to paragraph (3), the 
        term ``disadvantaged youth'' means an individual who is age 16 
        through 21 who received an income, or is a member of a family 
        that received a total family income, that, in relation to 
        family size, does not exceed the higher of--
                (i) the poverty line; or
                (ii) 70 percent of the lower living standard income 
            level.
            (D) Excess number.--The term ``excess number'' means, used 
        with respect to the excess number of unemployed individuals 
        within a State, the higher of--
                (i) the number that represents the number of unemployed 
            individuals in excess of 4.5 percent of the civilian labor 
            force in the State; or
                (ii) the number that represents the number of 
            unemployed individuals in excess of 4.5 percent of the 
            civilian labor force in areas of substantial unemployment 
            in such State.
            (E) Low-income level.--The term ``low-income level'' means 
        $7,000 with respect to income in 1969, and for any later year 
        means that amount that bears the same relationship to $7,000 as 
        the Consumer Price Index for that year bears to the Consumer 
        Price Index for 1969, rounded to the nearest $1,000.
        (3) Special rule.--For the purpose of the formula specified in 
    paragraph (1)(C), the Secretary shall, as appropriate and to the 
    extent practicable, exclude college students and members of the 
    Armed Forces from the determination of the number of disadvantaged 
    youth.
        (4) Definition.--In this subsection, the term ``Freely 
    Associated State'' means the Republic of the Marshall Islands, the 
    Federated States of Micronesia, and the Republic of Palau.
    (c) Reallotment.--
        (1) In general.--The Secretary shall, in accordance with this 
    subsection, reallot to eligible States amounts that are allotted 
    under this section for youth activities and statewide workforce 
    investment activities and that are available for reallotment.
        (2) Amount.--The amount available for reallotment for a program 
    year is equal to the amount by which the unobligated balance of the 
    State allotment under this section for such activities, at the end 
    of the program year prior to the program year for which the 
    determination under this paragraph is made, exceeds 20 percent of 
    such allotment for the prior program year.
        (3) Reallotment.--In making reallotments to eligible States of 
    amounts available pursuant to paragraph (2) for a program year, the 
    Secretary shall allot to each eligible State an amount based on the 
    relative amount allotted to such State under this section for such 
    activities for the prior program year, as compared to the total 
    amount allotted to all eligible States under this section for such 
    activities for such prior program year.
        (4) Eligibility.--For purposes of this subsection, an eligible 
    State means a State that has obligated at least 80 percent of the 
    State allotment under this section for such activities for the 
    program year prior to the program year for which the determination 
    under paragraph (2) is made.
        (5) Procedures.--The Governor of each State shall prescribe 
    uniform procedures for the obligation of funds by local areas 
    within the State in order to avoid the requirement that funds be 
    made available for reallotment under this subsection. The Governor 
    shall further prescribe equitable procedures for making funds 
    available from the State and local areas in the event that a State 
    is required to make funds available for reallotment under this 
    subsection.

SEC. 128. WITHIN STATE ALLOCATIONS.

    (a) Reservations for State Activities.--
        (1) In general.--The Governor of a State shall reserve not more 
    than 15 percent of each of the amounts allotted to the State under 
    section 127(b)(1)(C) and paragraphs (1)(B) and (2)(B) of section 
    132(b) for a fiscal year for statewide workforce investment 
    activities.
        (2) Use of funds.--Regardless of whether the reserved amounts 
    were allotted under section 127(b)(1)(C), or under paragraph (1)(B) 
    or (2)(B) of section 132(b), the Governor may use the reserved 
    amounts to carry out statewide youth activities described in 
    section 129(b) or statewide employment and training activities, for 
    adults or for dislocated workers, described in paragraph (2)(B) or 
    (3) of section 134(a).
    (b) Within State Allocation.--
        (1) Methods.--The Governor, acting in accordance with the State 
    plan, and after consulting with chief elected officials in the 
    local areas, shall allocate the funds that are allotted to the 
    State for youth activities and statewide workforce investment 
    activities under section 127(b)(1)(C) and are not reserved under 
    subsection (a), in accordance with paragraph (2) or (3).
        (2) Formula allocation.--
            (A) Youth activities.--
                (i) Allocation.--In allocating the funds described in 
            paragraph (1) to local areas, a State may allocate--

                    (I) 33\1/3\ percent of the funds on the basis 
                described in section 127(b)(1)(C)(ii)(I);
                    (II) 33\1/3\ percent of the funds on the basis 
                described in section 127(b)(1)(C)(ii)(II); and
                    (III) 33\1/3\ percent of the funds on the basis 
                described in clauses (ii)(III) and (iii) of section 
                127(b)(1)(C).

                (ii) Minimum percentage.--Effective at the end of the 
            second full fiscal year after the date on which a local 
            area is designated under section 116, the local area shall 
            not receive an allocation percentage for a fiscal year that 
            is less than 90 percent of the average allocation 
            percentage of the local area for the 2 preceding fiscal 
            years. Amounts necessary for increasing such allocations to 
            local areas to comply with the preceding sentence shall be 
            obtained by ratably reducing the allocations to be made to 
            other local areas under this subparagraph.
                (iii) Definition.--The term ``allocation percentage'', 
            used with respect to fiscal year 2000 or a subsequent 
            fiscal year, means a percentage of the funds referred to in 
            clause (i), received through an allocation made under this 
            subparagraph, for the fiscal year.
            (B) Application.--For purposes of carrying out subparagraph 
        (A)--
                (i) references in section 127(b) to a State shall be 
            deemed to be references to a local area;
                (ii) references in section 127(b) to all States shall 
            be deemed to be references to all local areas in the State 
            involved; and
                (iii) except as described in clause (i), references in 
            section 127(b)(1) to the term ``excess number'' shall be 
            considered to be references to the term as defined in 
            section 127(b)(2).
        (3) Youth discretionary allocation.--In lieu of making the 
    allocation described in paragraph (2)(A), in allocating the funds 
    described in paragraph (1) to local areas, a State may distribute--
            (A) a portion equal to not less than 70 percent of the 
        funds in accordance with paragraph (2)(A); and
            (B) the remaining portion of the funds on the basis of a 
        formula that--
                (i) incorporates additional factors (other than the 
            factors described in paragraph (2)(A)) relating to--

                    (I) excess youth poverty in urban, rural, and 
                suburban local areas; and
                    (II) excess unemployment above the State average in 
                urban, rural, and suburban local areas; and

                (ii) was developed by the State board and approved by 
            the Secretary as part of the State plan.
        (4) Limitation.--
            (A) In general.--Of the amount allocated to a local area 
        under this subsection and section 133(b) for a fiscal year, not 
        more than 10 percent of the amount may be used by the local 
        board for the administrative cost of carrying out local 
        workforce investment activities described in subsection (d) or 
        (e) of section 134 or in section 129(c).
            (B) Use of funds.--Funds made available for administrative 
        costs under subparagraph (A) may be used for the administrative 
        cost of any of the local workforce investment activities 
        described in subsection (d) or (e) of section 134 or in section 
        129(c), regardless of whether the funds were allocated under 
        this subsection or section 133(b).
            (C) Regulations.--The Secretary, after consulting with the 
        Governors, shall develop and issue regulations that define the 
        term ``administrative cost'' for purposes of this title. Such 
        definition shall be consistent with generally accepted 
        accounting principles.
    (c) Reallocation Among Local Areas.--
        (1) In general.--The Governor may, in accordance with this 
    subsection, reallocate to eligible local areas within the State 
    amounts that are allocated under paragraph (2)(A) or (3) of 
    subsection (b) for youth activities and that are available for 
    reallocation.
        (2) Amount.--The amount available for reallocation for a 
    program year is equal to the amount by which the unobligated 
    balance of the local area allocation under paragraph (2)(A) or (3) 
    of subsection (b) for such activities, at the end of the program 
    year prior to the program year for which the determination under 
    this paragraph is made exceeds 20 percent of such allocation for 
    the prior program year.
        (3) Reallocation.--In making reallocations to eligible local 
    areas of amounts available pursuant to paragraph (2) for a program 
    year, the Governor shall allocate to each eligible local area 
    within the State an amount based on the relative amount allocated 
    to such local area under subsection (b)(3) for such activities for 
    the prior program year, as compared to the total amount allocated 
    to all eligible local areas in the State under subsection (b)(3) 
    for such activities for such prior program year. For purposes of 
    this paragraph, local areas that received allocations under 
    subsection (b)(2)(A) for the prior program year shall be treated as 
    if the local areas received allocations under subsection (b)(3) for 
    such year.
        (4) Eligibility.--For purposes of this subsection, an eligible 
    local area means a local area that has obligated at least 80 
    percent of the local area allocation under paragraph (2)(A) or (3) 
    of subsection (b) for such activities, for the program year prior 
    to the program year for which the determination under paragraph (2) 
    is made.

SEC. 129. USE OF FUNDS FOR YOUTH ACTIVITIES.

    (a) Purposes.--The purposes of this section are--
        (1) to provide, to eligible youth seeking assistance in 
    achieving academic and employment success, effective and 
    comprehensive activities, which shall include a variety of options 
    for improving educational and skill competencies and provide 
    effective connections to employers;
        (2) to ensure on-going mentoring opportunities for eligible 
    youth with adults committed to providing such opportunities;
        (3) to provide opportunities for training to eligible youth;
        (4) to provide continued supportive services for eligible 
    youth;
        (5) to provide incentives for recognition and achievement to 
    eligible youth; and
        (6) to provide opportunities for eligible youth in activities 
    related to leadership, development, decisionmaking, citizenship, 
    and community service.
    (b) Statewide Youth Activities.--
        (1) In general.--Funds reserved by a Governor for a State as 
    described in sections 128(a) and 133(a)(1)--
            (A) shall be used to carry out the statewide youth 
        activities described in paragraph (2); and
            (B) may be used to carry out any of the statewide youth 
        activities described in paragraph (3),
    regardless of whether the funds were allotted to the State under 
    section 127(b)(1) or under paragraph (1) or (2) of section 132(b).
        (2) Required statewide youth activities.--A State shall use 
    funds reserved as described in sections 128(a) and 133(a)(1) 
    (regardless of whether the funds were allotted to the State under 
    section 127(b)(1) or paragraph (1) or (2) of section 132(b)) to 
    carry out statewide youth activities, which shall include--
            (A) disseminating a list of eligible providers of youth 
        activities described in section 123;
            (B) carrying out activities described in clauses (ii) 
        through (vi) of section 134(a)(2)(B), except that references in 
        such clauses to activities authorized under section 134 shall 
        be considered to be references to activities authorized under 
        this section; and
            (C) providing additional assistance to local areas that 
        have high concentrations of eligible youth to carry out the 
        activities described in subsection (c).
        (3) Allowable statewide youth activities.--A State may use 
    funds reserved as described in sections 128(a) and 133(a)(1) 
    (regardless of whether the funds were allotted to the State under 
    section 127(b)(1) or paragraph (1) or (2) of section 132(b)) to 
    carry out additional statewide youth activities, which may 
    include--
            (A) carrying out activities described in clauses (i), (ii), 
        (iii), (iv)(II), and (vi)(II) of section 134(a)(3)(A), except 
        that references in such clauses to activities authorized under 
        section 134 shall be considered to be references to activities 
        authorized under this section; and
            (B) carrying out, on a statewide basis, activities 
        described in subsection (c).
        (4) Prohibition.--No funds described in this subsection or 
    section 134(a) shall be used to develop or implement education 
    curricula for school systems in the State.
    (c) Local Elements and Requirements.--
        (1) Program design.--Funds allocated to a local area for 
    eligible youth under paragraph (2)(A) or (3), as appropriate, of 
    section 128(b) shall be used to carry out, for eligible youth, 
    programs that--
            (A) provide an objective assessment of the academic levels, 
        skill levels, and service needs of each participant, which 
        assessment shall include a review of basic skills, occupational 
        skills, prior work experience, employability, interests, 
        aptitudes (including interests and aptitudes for nontraditional 
        jobs), supportive service needs, and developmental needs of 
        such participant, except that a new assessment of a participant 
        is not required if the provider carrying out such a program 
        determines it is appropriate to use a recent assessment of the 
        participant conducted pursuant to another education or training 
        program;
            (B) develop service strategies for each participant that 
        shall identify an employment goal (including, in appropriate 
        circumstances, nontraditional employment), appropriate 
        achievement objectives, and appropriate services for the 
        participant taking into account the assessment conducted 
        pursuant to subparagraph (A), except that a new service 
        strategy for a participant is not required if the provider 
        carrying out such a program determines it is appropriate to use 
        a recent service strategy developed for the participant under 
        another education or training program; and
            (C) provide--
                (i) preparation for postsecondary educational 
            opportunities, in appropriate cases;
                (ii) strong linkages between academic and occupational 
            learning;
                (iii) preparation for unsubsidized employment 
            opportunities, in appropriate cases; and
                (iv) effective connections to intermediaries with 
            strong links to--

                    (I) the job market; and
                    (II) local and regional employers.

        (2) Program elements.--The programs described in paragraph (1) 
    shall provide elements consisting of--
            (A) tutoring, study skills training, and instruction, 
        leading to completion of secondary school, including dropout 
        prevention strategies;
            (B) alternative secondary school services, as appropriate;
            (C) summer employment opportunities that are directly 
        linked to academic and occupational learning;
            (D) as appropriate, paid and unpaid work experiences, 
        including internships and job shadowing;
            (E) occupational skill training, as appropriate;
            (F) leadership development opportunities, which may include 
        community service and peer-centered activities encouraging 
        responsibility and other positive social behaviors during non-
        school hours, as appropriate;
            (G) supportive services;
            (H) adult mentoring for the period of participation and a 
        subsequent period, for a total of not less than 12 months;
            (I) followup services for not less than 12 months after the 
        completion of participation, as appropriate; and
            (J) comprehensive guidance and counseling, which may 
        include drug and alcohol abuse counseling and referral, as 
        appropriate.
        (3) Additional requirements.--
            (A) Information and referrals.--Each local board shall 
        ensure that each participant or applicant who meets the minimum 
        income criteria to be considered an eligible youth shall be 
        provided--
                (i) information on the full array of applicable or 
            appropriate services that are available through the local 
            board or other eligible providers or one-stop partners, 
            including those receiving funds under this subtitle; and
                (ii) referral to appropriate training and educational 
            programs that have the capacity to serve the participant or 
            applicant either on a sequential or concurrent basis.
            (B) Applicants not meeting enrollment requirements.--Each 
        eligible provider of a program of youth activities shall ensure 
        that an eligible applicant who does not meet the enrollment 
        requirements of the particular program or who cannot be served 
        shall be referred for further assessment, as necessary, and 
        referred to appropriate programs in accordance with 
        subparagraph (A) to meet the basic skills and training needs of 
        the applicant.
            (C) Involvement in design and implementation.--The local 
        board shall ensure that parents, participants, and other 
        members of the community with experience relating to programs 
        for youth are involved in the design and implementation of the 
        programs described in paragraph (1).
        (4) Priority.--
            (A) In general.--At a minimum, 30 percent of the funds 
        described in paragraph (1) shall be used to provide youth 
        activities to out-of-school youth.
            (B) Exception.--A State that receives a minimum allotment 
        under section 127(b)(1) in accordance with section 
        127(b)(1)(C)(iv)(II) or under section 132(b)(1) in accordance 
        with section 132(b)(1)(B)(iv)(II) may reduce the percentage 
        described in subparagraph (A) for a local area in the State, 
        if--
                (i) after an analysis of the eligible youth population 
            in the local area, the State determines that the local area 
            will be unable to meet the percentage described in 
            subparagraph (A) due to a low number of out-of-school 
            youth; and
                (ii)(I) the State submits to the Secretary, for the 
            local area, a request including a proposed reduced 
            percentage for purposes of subparagraph (A), and the 
            summary of the eligible youth population analysis; and
                (II) the request is approved by the Secretary.
        (5) Exceptions.--Not more than 5 percent of participants 
    assisted under this section in each local area may be individuals 
    who do not meet the minimum income criteria to be considered 
    eligible youth, if such individuals are within one or more of the 
    following categories:
            (A) Individuals who are school dropouts.
            (B) Individuals who are basic skills deficient.
            (C) Individuals with educational attainment that is one or 
        more grade levels below the grade level appropriate to the age 
        of the individuals.
            (D) Individuals who are pregnant or parenting.
            (E) Individuals with disabilities, including learning 
        disabilities.
            (F) Individuals who are homeless or runaway youth.
            (G) Individuals who are offenders.
            (H) Other eligible youth who face serious barriers to 
        employment as identified by the local board.
        (6) Prohibitions.--
            (A) Prohibition against federal control of education.--No 
        provision of this Act shall be construed to authorize any 
        department, agency, officer, or employee of the United States 
        to exercise any direction, supervision, or control over the 
        curriculum, program of instruction, administration, or 
        personnel of any educational institution, school, or school 
        system, or over the selection of library resources, textbooks, 
        or other printed or published instructional materials by any 
        educational institution, school, or school system.
            (B) Nonduplication.--All of the funds made available under 
        this Act shall be used in accordance with the requirements of 
        this Act. None of the funds made available under this Act may 
        be used to provide funding under the School-to-Work 
        Opportunities Act of 1994 (20 U.S.C. 6101 et seq.) or to carry 
        out, through programs funded under this Act, activities that 
        were funded under the School-to-Work Opportunities Act of 1994, 
        unless the programs funded under this Act serve only those 
        participants eligible to participate in the programs under this 
        Act.
            (C) Noninterference and nonreplacement of regular academic 
        requirements.--No funds described in paragraph (1) shall be 
        used to provide an activity for eligible youth who are not 
        school dropouts if participation in the activity would 
        interfere with or replace the regular academic requirements of 
        the youth.
        (7) Linkages.--In coordinating the programs authorized under 
    this section, youth councils shall establish linkages with 
    educational agencies responsible for services to participants as 
    appropriate.
        (8) Volunteers.--The local board shall make opportunities 
    available for individuals who have successfully participated in 
    programs carried out under this section to volunteer assistance to 
    participants in the form of mentoring, tutoring, and other 
    activities.

    CHAPTER 5--ADULT AND DISLOCATED WORKER EMPLOYMENT AND TRAINING 
                               ACTIVITIES

SEC. 131. GENERAL AUTHORIZATION.

    The Secretary shall make allotments under paragraphs (1)(B) and 
(2)(B) of section 132(b) to each State that meets the requirements of 
section 112 and a grant to each outlying area that complies with the 
requirements of this title, to assist the State or outlying area, and 
to enable the State or outlying area to assist local areas, for the 
purpose of providing workforce investment activities for adults, and 
dislocated workers, in the State or outlying area and in the local 
areas.

SEC. 132. STATE ALLOTMENTS.

    (a) In General.--The Secretary shall--
        (1) make allotments and grants from the total amount 
    appropriated under section 137(b) for a fiscal year in accordance 
    with subsection (b)(1); and
        (2)(A) reserve 20 percent of the amount appropriated under 
    section 137(c) for a fiscal year for use under subsection 
    (b)(2)(A), and under sections 170(b) (relating to dislocated worker 
    technical assistance), 171(d) (relating to dislocated worker 
    projects), and 173 (relating to national emergency grants); and
        (B) make allotments from 80 percent of the amount appropriated 
    under section 137(c) for a fiscal year in accordance with 
    subsection (b)(2)(B).
    (b) Allotment Among States.--
        (1) Adult employment and training activities.--
            (A) Reservation for outlying areas.--
                (i) In general.--From the amount made available under 
            subsection (a)(1) for a fiscal year, the Secretary shall 
            reserve not more than \1/4\ of 1 percent to provide 
            assistance to the outlying areas.
                (ii) Applicability of additional requirements.--From 
            the amount reserved under clause (i), the Secretary shall 
            provide assistance to the outlying areas for adult 
            employment and training activities and statewide workforce 
            investment activities in accordance with the requirements 
            of section 127(b)(1)(B), except that the reference in 
            section 127(b)(1)(B)(i)(II) to sections 252(d) and 
            262(a)(1) of the Job Training Partnership Act shall be 
            deemed to be a reference to section 202(a)(1) of the Job 
            Training Partnership Act (as in effect on the day before 
            the date of enactment of this Act).
            (B) States.--
                (i) In general.--After determining the amount to be 
            reserved under subparagraph (A), the Secretary shall allot 
            the remainder of the amount referred to in subsection 
            (a)(1) for a fiscal year to the States pursuant to clause 
            (ii) for adult employment and training activities and 
            statewide workforce investment activities.
                (ii) Formula.--Subject to clauses (iii) and (iv), of 
            the remainder--

                    (I) 33\1/3\ percent shall be allotted on the basis 
                of the relative number of unemployed individuals in 
                areas of substantial unemployment in each State, 
                compared to the total number of unemployed individuals 
                in areas of substantial unemployment in all States;
                    (II) 33\1/3\ percent shall be allotted on the basis 
                of the relative excess number of unemployed individuals 
                in each State, compared to the total excess number of 
                unemployed individuals in all States; and
                    (III) 33\1/3\ percent shall be allotted on the 
                basis of the relative number of disadvantaged adults in 
                each State, compared to the total number of 
                disadvantaged adults in all States, except as described 
                in clause (iii).

                (iii) Calculation.--In determining an allotment under 
            clause (ii)(III) for any State in which there is a local 
            area designated under section 116(a)(2)(B), the allotment 
            shall be based on the higher of--

                    (I) the number of adults in families with an income 
                below the low-income level in such area; or
                    (II) the number of disadvantaged adults in such 
                area.

                (iv) Minimum and maximum percentages and minimum 
            allotments.--In making allotments under this subparagraph, 
            the Secretary shall ensure the following:

                    (I) Minimum percentage and allotment.--Subject to 
                subclause (IV), the Secretary shall ensure that no 
                State shall receive an allotment for a fiscal year that 
                is less than the greater of--

                        (aa) an amount based on 90 percent of the 
                    allotment percentage of the State for the preceding 
                    fiscal year; or
                        (bb) 100 percent of the allotment of the State 
                    under section 202 of the Job Training Partnership 
                    Act (as in effect on the day before the date of 
                    enactment of this Act) for fiscal year 1998.

                    (II) Small state minimum allotment.--Subject to 
                subclauses (I), (III), and (IV), the Secretary shall 
                ensure that no State shall receive an allotment under 
                this subparagraph that is less than the total of--

                        (aa) \3/10\ of 1 percent of $960,000,000 of the 
                    remainder described in clause (i) for the fiscal 
                    year; and
                        (bb) if the remainder described in clause (i) 
                    for the fiscal year exceeds $960,000,000, \2/5\ of 
                    1 percent of the excess.

                    (III) Maximum percentage.--Subject to subclause 
                (I), the Secretary shall ensure that no State shall 
                receive an allotment percentage for a fiscal year that 
                is more than 130 percent of the allotment percentage of 
                the State for the preceding fiscal year.
                    (IV) Minimum funding.--In any fiscal year in which 
                the remainder described in clause (i) does not exceed 
                $960,000,000, the minimum allotments under subclauses 
                (I) and (II) shall be calculated by the methodology for 
                calculating the corresponding allotments under part A 
                of title II of the Job Training Partnership Act, as in 
                effect on July 1, 1998.

                (v) Definitions.--For the purpose of the formula 
            specified in this subparagraph:

                    (I) Adult.--The term ``adult'' means an individual 
                who is not less than age 22 and not more than age 72.
                    (II) Allotment percentage.--The term ``allotment 
                percentage'', used with respect to fiscal year 2000 or 
                a subsequent fiscal year, means a percentage of the 
                remainder described in clause (i) that is received 
                through an allotment made under this subparagraph for 
                the fiscal year. The term, used with respect to fiscal 
                year 1998 or 1999, means the percentage of the amounts 
                allotted to States under section 202(a) of the Job 
                Training Partnership Act (as in effect on the day 
                before the date of enactment of this Act) that is 
                received under such section by the State involved for 
                fiscal year 1998 or 1999.
                    (III) Area of substantial unemployment.--The term 
                ``area of substantial unemployment'' means any area 
                that is of sufficient size and scope to sustain a 
                program of workforce investment activities carried out 
                under this subtitle and that has an average rate of 
                unemployment of at least 6.5 percent for the most 
                recent 12 months, as determined by the Secretary. For 
                purposes of this subclause, determinations of areas of 
                substantial unemployment shall be made once each fiscal 
                year.
                    (IV) Disadvantaged adult.--Subject to subclause 
                (V), the term ``disadvantaged adult'' means an adult 
                who received an income, or is a member of a family that 
                received a total family income, that, in relation to 
                family size, does not exceed the higher of--

                        (aa) the poverty line; or
                        (bb) 70 percent of the lower living standard 
                    income level.

                    (V) Disadvantaged adult special rule.--The 
                Secretary shall, as appropriate and to the extent 
                practicable, exclude college students and members of 
                the Armed Forces from the determination of the number 
                of disadvantaged adults.
                    (VI) Excess number.--The term ``excess number'' 
                means, used with respect to the excess number of 
                unemployed individuals within a State, the higher of--

                        (aa) the number that represents the number of 
                    unemployed individuals in excess of 4.5 percent of 
                    the civilian labor force in the State; or
                        (bb) the number that represents the number of 
                    unemployed individuals in excess of 4.5 percent of 
                    the civilian labor force in areas of substantial 
                    unemployment in such State.
        (2) Dislocated worker employment and training.--
            (A) Reservation for outlying areas.--
                (i) In general.--From the amount made available under 
            subsection (a)(2)(A) for a fiscal year, the Secretary shall 
            reserve not more than \1/4\ of 1 percent of the amount 
            appropriated under section 137(c) for the fiscal year to 
            provide assistance to the outlying areas.
                (ii) Applicability of additional requirements.--From 
            the amount reserved under clause (i), the Secretary shall 
            provide assistance to the outlying areas for dislocated 
            worker employment and training activities and statewide 
            workforce investment activities in accordance with the 
            requirements of section 127(b)(1)(B), except that the 
            reference in section 127(b)(1)(B)(i)(II) to sections 252(a) 
            and 262(a)(1) of the Job Training Partnership Act shall be 
            deemed to be a reference to section 302(e) of the Job 
            Training Partnership Act (as in effect on the day before 
            the date of enactment of this Act).
            (B) States.--
                (i) In general.--The Secretary shall allot the amount 
            referred to in subsection (a)(2)(B) for a fiscal year to 
            the States pursuant to clause (ii) for dislocated worker 
            employment and training activities and statewide workforce 
            investment activities.
                (ii) Formula.--Of the amount--

                    (I) 33\1/3\ percent shall be allotted on the basis 
                of the relative number of unemployed individuals in 
                each State, compared to the total number of unemployed 
                individuals in all States;
                    (II) 33\1/3\ percent shall be allotted on the basis 
                of the relative excess number of unemployed individuals 
                in each State, compared to the total excess number of 
                unemployed individuals in all States; and
                    (III) 33\1/3\ percent shall be allotted on the 
                basis of the relative number of individuals in each 
                State who have been unemployed for 15 weeks or more, 
                compared to the total number of individuals in all 
                States who have been unemployed for 15 weeks or more.

                (iii) Definition.--In this subparagraph, the term 
            ``excess number'' means, used with respect to the excess 
            number of unemployed individuals within a State, the number 
            that represents the number of unemployed individuals in 
            excess of 4.5 percent of the civilian labor force in the 
            State.
        (3) Definitions.--For the purpose of the formulas specified in 
    this subsection:
            (A) Freely associated states.--The term ``Freely Associated 
        States'' means the Republic of the Marshall Islands, the 
        Federated States of Micronesia, and the Republic of Palau.
            (B) Low-income level.--The term ``low-income level'' means 
        $7,000 with respect to income in 1969, and for any later year 
        means that amount that bears the same relationship to $7,000 as 
        the Consumer Price Index for that year bears to the Consumer 
        Price Index for 1969, rounded to the nearest $1,000.
    (c) Reallotment.--
        (1) In general.--The Secretary shall, in accordance with this 
    subsection, reallot to eligible States amounts that are allotted 
    under this section for employment and training activities and 
    statewide workforce investment activities and that are available 
    for reallotment.
        (2) Amount.--The amount available for reallotment for a program 
    year is equal to the amount by which the unobligated balance of the 
    State allotments under this section for such activities, at the end 
    of the program year prior to the program year for which the 
    determination under this paragraph is made, exceeds 20 percent of 
    such allotments for the prior program year.
        (3) Reallotment.--In making reallotments to eligible States of 
    amounts available pursuant to paragraph (2) for a program year, the 
    Secretary shall allot to each eligible State an amount based on the 
    relative amount allotted to such State under this section for such 
    activities for the prior program year, as compared to the total 
    amount allotted to all eligible States under this section for such 
    activities for such prior program year.
        (4) Eligibility.--For purposes of this subsection, an eligible 
    State means a State that has obligated at least 80 percent of the 
    State allotment under this section for such activities for the 
    program year prior to the program year for which the determination 
    under paragraph (2) is made.
        (5) Procedures.--The Governor of each State shall prescribe 
    uniform procedures for the obligation of funds by local areas 
    within the State in order to avoid the requirement that funds be 
    made available for reallotment under this subsection. The Governor 
    shall further prescribe equitable procedures for making funds 
    available from the State and local areas in the event that a State 
    is required to make funds available for reallotment under this 
    subsection.

SEC. 133. WITHIN STATE ALLOCATIONS.

    (a) Reservations for State Activities.--
        (1) Statewide workforce investment activities.--The Governor of 
    a State shall make the reservation required under section 128(a).
        (2) Statewide rapid response activities.--The Governor of the 
    State shall reserve not more than 25 percent of the total amount 
    allotted to the State under section 132(b)(2)(B) for a fiscal year 
    for statewide rapid response activities described in section 
    134(a)(2)(A).
    (b) Within State Allocation.--
        (1) Methods.--The Governor, acting in accordance with the State 
    plan, and after consulting with chief elected officials in the 
    local areas, shall allocate--
            (A) the funds that are allotted to the State for adult 
        employment and training activities and statewide workforce 
        investment activities under section 132(b)(1)(B) and are not 
        reserved under subsection (a)(1), in accordance with paragraph 
        (2) or (3); and
            (B) the funds that are allotted to the State for dislocated 
        worker employment and training activities under section 
        132(b)(2)(B) and are not reserved under paragraph (1) or (2) of 
        subsection (a), in accordance with paragraph (2).
        (2) Formula allocations.--
            (A) Adult employment and training activities.--
                (i) Allocation.--In allocating the funds described in 
            paragraph (1)(A) to local areas, a State may allocate--

                    (I) 33\1/3\ percent of the funds on the basis 
                described in section 132(b)(1)(B)(ii)(I);
                    (II) 33\1/3\ percent of the funds on the basis 
                described in section 132(b)(1)(B)(ii)(II); and
                    (III) 33\1/3\ percent of the funds on the basis 
                described in clauses (ii)(III) and (iii) of section 
                132(b)(1)(B).

                (ii) Minimum percentage.--Effective at the end of the 
            second full fiscal year after the date on which a local 
            area is designated under section 116, the local area shall 
            not receive an allocation percentage for a fiscal year that 
            is less than 90 percent of the average allocation 
            percentage of the local area for the 2 preceding fiscal 
            years. Amounts necessary for increasing such allocations to 
            local areas to comply with the preceding sentence shall be 
            obtained by ratably reducing the allocations to be made to 
            other local areas under this subparagraph.
                (iii) Definition.--The term ``allocation percentage'', 
            used with respect to fiscal year 2000 or a subsequent 
            fiscal year, means a percentage of the funds referred to in 
            clause (i), received through an allocation made under this 
            subparagraph, for the fiscal year.
            (B) Dislocated worker employment and training activities.--
                (i) Formula.--In allocating the funds described in 
            paragraph (1)(B) to local areas, a State shall allocate the 
            funds based on an allocation formula prescribed by the 
            Governor of the State. Such formula may be amended by the 
            Governor not more than once for each program year. Such 
            formula shall utilize the most appropriate information 
            available to the Governor to distribute amounts to address 
            the State's worker readjustment assistance needs.
                (ii) Information.--The information described in clause 
            (i) shall include insured unemployment data, unemployment 
            concentrations, plant closing and mass layoff data, 
            declining industries data, farmer-rancher economic hardship 
            data, and long-term unemployment data.
            (C) Application.--For purposes of carrying out subparagraph 
        (A)--
                (i) references in section 132(b) to a State shall be 
            deemed to be references to a local area;
                (ii) references in section 132(b) to all States shall 
            be deemed to be references to all local areas in the State 
            involved; and
                (iii) except as described in clause (i), references in 
            section 132(b)(1) to the term ``excess number'' shall be 
            considered to be references to the term as defined in 
            section 132(b)(1).
        (3) Adult employment and training discretionary allocations.--
    In lieu of making the allocation described in paragraph (2)(A), in 
    allocating the funds described in paragraph (1)(A) to local areas, 
    a State may distribute--
            (A) a portion equal to not less than 70 percent of the 
        funds in accordance with paragraph (2)(A); and
            (B) the remaining portion of the funds on the basis of a 
        formula that--
                (i) incorporates additional factors (other than the 
            factors described in paragraph (2)(A)) relating to--

                    (I) excess poverty in urban, rural, and suburban 
                local areas; and
                    (II) excess unemployment above the State average in 
                urban, rural, and suburban local areas; and

                (ii) was developed by the State board and approved by 
            the Secretary as part of the State plan.
        (4) Transfer authority.--A local board may transfer, if such a 
    transfer is approved by the Governor, not more than 20 percent of 
    the funds allocated to the local area under paragraph (2)(A) or 
    (3), and 20 percent of the funds allocated to the local area under 
    paragraph (2)(B), for a fiscal year between--
            (A) adult employment and training activities; and
            (B) dislocated worker employment and training activities.
        (5) Allocation.--
            (A) In general.--The Governor of the State shall allocate 
        the funds described in paragraph (1) to local areas under 
        paragraphs (2) and (3) for the purpose of providing a single 
        system of employment and training activities for adults and 
        dislocated workers in accordance with subsections (d) and (e) 
        of section 134.
            (B) Additional requirements.--
                (i) Adults.--Funds allocated under paragraph (2)(A) or 
            (3) shall be used by a local area to contribute 
            proportionately to the costs of the one-stop delivery 
            system described in section 134(c) in the local area, and 
            to pay for employment and training activities provided to 
            adults in the local area, consistent with section 134.
                (ii) Dislocated workers.--Funds allocated under 
            paragraph (2)(B) shall be used by a local area to 
            contribute proportionately to the costs of the one-stop 
            delivery system described in section 134(c) in the local 
            area, and to pay for employment and training activities 
            provided to dislocated workers in the local area, 
            consistent with section 134.
    (c) Reallocation Among Local Areas.--
        (1) In general.--The Governor may, in accordance with this 
    subsection, reallocate to eligible local areas within the State 
    amounts that are allocated under paragraph (2)(A) or (3) of 
    subsection (b) for adult employment and training activities and 
    that are available for reallocation.
        (2) Amount.--The amount available for reallocation for a 
    program year is equal to the amount by which the unobligated 
    balance of the local area allocation under paragraph (2)(A) or (3) 
    of subsection (b) for such activities, at the end of the program 
    year prior to the program year for which the determination under 
    this paragraph is made exceeds 20 percent of such allocation for 
    the prior program year.
        (3) Reallocation.--In making reallocations to eligible local 
    areas of amounts available pursuant to paragraph (2) for a program 
    year, the Governor shall allocate to each eligible local area 
    within the State an amount based on the relative amount allocated 
    to such local area under subsection (b)(3) for such activities for 
    the prior program year, as compared to the total amount allocated 
    to all eligible local areas in the State under subsection (b)(3) 
    for such activities for such prior program year. For purposes of 
    this paragraph, local areas that received allocations under 
    subsection (b)(2)(A) for the prior program year shall be treated as 
    if the local areas received allocations under subsection (b)(3) for 
    such year.
        (4) Eligibility.--For purposes of this subsection, an eligible 
    local area means a local area that has obligated at least 80 
    percent of the local area allocation under paragraph (2)(A) or (3) 
    of subsection (b) for such activities, for the program year prior 
    to the program year for which the determination under paragraph (2) 
    is made.

SEC. 134. USE OF FUNDS FOR EMPLOYMENT AND TRAINING ACTIVITIES.

    (a) Statewide Employment and Training Activities.--
        (1) In general.--Funds reserved by a Governor for a State--
            (A) as described in section 133(a)(2) shall be used to 
        carry out the statewide rapid response activities described in 
        paragraph (2)(A); and
            (B) as described in sections 128(a) and 133(a)(1)--
                (i) shall be used to carry out the statewide employment 
            and training activities described in paragraph (2)(B); and
                (ii) may be used to carry out any of the statewide 
            employment and training activities described in paragraph 
            (3),
        regardless of whether the funds were allotted to the State 
        under section 127(b)(1) or under paragraph (1) or (2) of 
        section 132(b).
        (2) Required statewide employment and training activities.--
            (A) Statewide rapid response activities.--A State shall use 
        funds reserved as described in section 133(a)(2) to carry out 
        statewide rapid response activities, which shall include--
                (i) provision of rapid response activities, carried out 
            in local areas by the State or by an entity designated by 
            the State, working in conjunction with the local boards and 
            the chief elected officials in the local areas; and
                (ii) provision of additional assistance to local areas 
            that experience disasters, mass layoffs or plant closings, 
            or other events that precipitate substantial increases in 
            the number of unemployed individuals, carried out in local 
            areas by the State or by an entity designated by the State, 
            working in conjunction with the local boards and the chief 
            elected officials in the local areas.
            (B) Other required statewide employment and training 
        activities.--A State shall use funds reserved as described in 
        sections 128(a) and 133(a)(1) (regardless of whether the funds 
        were allotted to the State under section 127(b)(1) or paragraph 
        (1) or (2) of section 132(b)) to carry out other statewide 
        employment and training activities, which shall include--
                (i) disseminating the State list of eligible providers 
            of training services, including eligible providers of 
            nontraditional training services, information identifying 
            eligible providers of on-the-job training and customized 
            training, and performance information and program cost 
            information, as described in subsections (e) and (h) of 
            section 122;
                (ii) conducting evaluations, under section 136(e), of 
            activities authorized in this section, in coordination with 
            the activities carried out under section 172;
                (iii) providing incentive grants to local areas for 
            regional cooperation among local boards (including local 
            boards for a designated region as described in section 
            116(c)), for local coordination of activities carried out 
            under this Act, and for exemplary performance by local 
            areas on the local performance measures;
                (iv) providing technical assistance to local areas that 
            fail to meet local performance measures;
                (v) assisting in the establishment and operation of 
            one-stop delivery systems described in subsection (c); and
                (vi) operating a fiscal and management accountability 
            information system under section 136(f).
        (3) Allowable statewide employment and training activities.--
            (A) In general.--A State may use funds reserved as 
        described in sections 128(a) and 133(a)(1) (regardless of 
        whether the funds were allotted to the State under section 
        127(b)(1) or paragraph (1) or (2) of section 132(b)) to carry 
        out additional statewide employment and training activities, 
        which may include--
                (i) subject to subparagraph (B), administration by the 
            State of the activities authorized under this section;
                (ii) provision of capacity building and technical 
            assistance to local areas, one-stop operators, one-stop 
            partners, and eligible providers, including the development 
            and training of staff and the development of exemplary 
            program activities;
                (iii) conduct of research and demonstrations;
                (iv)(I) implementation of innovative incumbent worker 
            training programs, which may include the establishment and 
            implementation of an employer loan program to assist in 
            skills upgrading; and
                (II) the establishment and implementation of programs 
            targeted to empowerment zones and enterprise communities;
                (v) support for the identification of eligible 
            providers of training services as required under section 
            122;
                (vi)(I) implementation of innovative programs for 
            displaced homemakers, which for purposes of this subclause 
            may include an individual who is receiving public 
            assistance and is within 2 years of exhausting lifetime 
            eligibility under part A of title IV of the Social Security 
            Act (42 U.S.C. 601 et seq.); and
                (II) implementation of programs to increase the number 
            of individuals training for and placed in nontraditional 
            employment; and
                (vii) carrying out other activities authorized in this 
            section that the State determines to be necessary to assist 
            local areas in carrying out activities described in 
            subsection (d) or (e) through the statewide workforce 
            investment system.
            (B) Limitation.--
                (i) In general.--Of the funds allotted to a State under 
            sections 127(b) and 132(b) and reserved as described in 
            sections 128(a) and 133(a)(1) for a fiscal year--

                    (I) not more than 5 percent of the amount allotted 
                under section 127(b)(1);
                    (II) not more than 5 percent of the amount allotted 
                under section 132(b)(1); and
                    (III) not more than 5 percent of the amount 
                allotted under section 132(b)(2),

            may be used by the State for the administration of youth 
            activities carried out under section 129 and employment and 
            training activities carried out under this section.
                (ii) Use of funds.--Funds made available for 
            administrative costs under clause (i) may be used for the 
            administrative cost of any of the statewide youth 
            activities or statewide employment and training activities, 
            regardless of whether the funds were allotted to the State 
            under section 127(b)(1) or paragraph (1) or (2) of section 
            132(b).
    (b) Local Employment and Training Activities.--Funds allocated to a 
local area for adults under paragraph (2)(A) or (3), as appropriate, of 
section 133(b), and funds allocated to a local area for dislocated 
workers under section 133(b)(2)(B)--
        (1) shall be used to carry out employment and training 
    activities described in subsection (d) for adults or dislocated 
    workers, respectively; and
        (2) may be used to carry out employment and training activities 
    described in subsection (e) for adults or dislocated workers, 
    respectively.
    (c) Establishment of One-Stop Delivery System.--
        (1) In general.--There shall be established in a State that 
    receives an allotment under section 132(b) a one-stop delivery 
    system, which--
            (A) shall provide the core services described in subsection 
        (d)(2);
            (B) shall provide access to intensive services and training 
        services as described in paragraphs (3) and (4) of subsection 
        (d), including serving as the point of access to individual 
        training accounts for training services to participants in 
        accordance with subsection (d)(4)(G);
            (C) shall provide access to the activities carried out 
        under subsection (e), if any;
            (D) shall provide access to programs and activities carried 
        out by one-stop partners and described in section 121(b); and
            (E) shall provide access to the information described in 
        section 15 of the Wagner-Peyser Act and all job search, 
        placement, recruitment, and other labor exchange services 
        authorized under the Wagner-Peyser Act (29 U.S.C. 49 et seq.).
        (2) One-stop delivery.--At a minimum, the one-stop delivery 
    system--
            (A) shall make each of the programs, services, and 
        activities described in paragraph (1) accessible at not less 
        than one physical center in each local area of the State; and
            (B) may also make programs, services, and activities 
        described in paragraph (1) available--
                (i) through a network of affiliated sites that can 
            provide one or more of the programs, services, and 
            activities to individuals; and
                (ii) through a network of eligible one-stop partners--

                    (I) in which each partner provides one or more of 
                the programs, services, and activities to such 
                individuals and is accessible at an affiliated site 
                that consists of a physical location or an 
                electronically or technologically linked access point; 
                and
                    (II) that assures individuals that information on 
                the availability of the core services will be available 
                regardless of where the individuals initially enter the 
                statewide workforce investment system, including 
                information made available through an access point 
                described in subclause (I).

        (3) Specialized centers.--The centers and sites described in 
    paragraph (2) may have a specialization in addressing special 
    needs, such as the needs of dislocated workers.
    (d) Required Local Employment and Training Activities.--
        (1) In general.--
            (A) Allocated funds.--Funds allocated to a local area for 
        adults under paragraph (2)(A) or (3), as appropriate, of 
        section 133(b), and funds allocated to the local area for 
        dislocated workers under section 133(b)(2)(B), shall be used--
                (i) to establish a one-stop delivery system described 
            in subsection (c);
                (ii) to provide the core services described in 
            paragraph (2) to adults and dislocated workers, 
            respectively, through the one-stop delivery system in 
            accordance with such paragraph;
                (iii) to provide the intensive services described in 
            paragraph (3) to adults and dislocated workers, 
            respectively, described in such paragraph; and
                (iv) to provide training services described in 
            paragraph (4) to adults and dislocated workers, 
            respectively, described in such paragraph.
            (B) Other funds.--A portion of the funds made available 
        under Federal law authorizing the programs and activities 
        described in section 121(b)(1)(B), including the Wagner-Peyser 
        Act (29 U.S.C. 49 et seq.), shall be used as described in 
        clauses (i) and (ii) of subparagraph (A), to the extent not 
        inconsistent with the Federal law involved.
        (2) Core services.--Funds described in paragraph (1)(A) shall 
    be used to provide core services, which shall be available to 
    individuals who are adults or dislocated workers through the one-
    stop delivery system and shall, at a minimum, include--
            (A) determinations of whether the individuals are eligible 
        to receive assistance under this subtitle;
            (B) outreach, intake (which may include worker profiling), 
        and orientation to the information and other services available 
        through the one-stop delivery system;
            (C) initial assessment of skill levels, aptitudes, 
        abilities, and supportive service needs;
            (D) job search and placement assistance, and where 
        appropriate, career counseling;
            (E) provision of employment statistics information, 
        including the provision of accurate information relating to 
        local, regional, and national labor market areas, including--
                (i) job vacancy listings in such labor market areas;
                (ii) information on job skills necessary to obtain the 
            jobs described in clause (i); and
                (iii) information relating to local occupations in 
            demand and the earnings and skill requirements for such 
            occupations; and
            (F) provision of performance information and program cost 
        information on eligible providers of training services as 
        described in section 122, provided by program, and eligible 
        providers of youth activities described in section 123, 
        providers of adult education described in title II, providers 
        of postsecondary vocational education activities and vocational 
        education activities available to school dropouts under the 
        Carl D. Perkins Vocational and Applied Technology Education Act 
        (20 U.S.C. 2301 et seq.), and providers of vocational 
        rehabilitation program activities described in title I of the 
        Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.);
            (G) provision of information regarding how the local area 
        is performing on the local performance measures and any 
        additional performance information with respect to the one-stop 
        delivery system in the local area;
            (H) provision of accurate information relating to the 
        availability of supportive services, including child care and 
        transportation, available in the local area, and referral to 
        such services, as appropriate;
            (I) provision of information regarding filing claims for 
        unemployment compensation;
            (J) assistance in establishing eligibility for--
                (i) welfare-to-work activities authorized under section 
            403(a)(5) of the Social Security Act (as added by section 
            5001 of the Balanced Budget Act of 1997) available in the 
            local area; and
                (ii) programs of financial aid assistance for training 
            and education programs that are not funded under this Act 
            and are available in the local area; and
            (K) followup services, including counseling regarding the 
        workplace, for participants in workforce investment activities 
        authorized under this subtitle who are placed in unsubsidized 
        employment, for not less than 12 months after the first day of 
        the employment, as appropriate.
        (3) Intensive services.--
            (A) In general.--Funds allocated to a local area for adults 
        under paragraph (2)(A) or (3), as appropriate, of section 
        133(b), and funds allocated to the local area for dislocated 
        workers under section 133(b)(2)(B), shall be used to provide 
        intensive services to adults and dislocated workers, 
        respectively--
                (i)(I) who are unemployed and are unable to obtain 
            employment through core services provided under paragraph 
            (2); and
                (II) who have been determined by a one-stop operator to 
            be in need of more intensive services in order to obtain 
            employment; or
                (ii) who are employed, but who are determined by a one-
            stop operator to be in need of such intensive services in 
            order to obtain or retain employment that allows for self-
            sufficiency.
            (B) Delivery of services.--Such intensive services shall be 
        provided through the one-stop delivery system--
                (i) directly through one-stop operators identified 
            pursuant to section 121(d); or
                (ii) through contracts with service providers, which 
            may include contracts with public, private for-profit, and 
            private nonprofit service providers, approved by the local 
            board.
            (C) Types of services.--Such intensive services may include 
        the following:
                (i) Comprehensive and specialized assessments of the 
            skill levels and service needs of adults and dislocated 
            workers, which may include--

                    (I) diagnostic testing and use of other assessment 
                tools; and
                    (II) in-depth interviewing and evaluation to 
                identify employment barriers and appropriate employment 
                goals.

                (ii) Development of an individual employment plan, to 
            identify the employment goals, appropriate achievement 
            objectives, and appropriate combination of services for the 
            participant to achieve the employment goals.
                (iii) Group counseling.
                (iv) Individual counseling and career planning.
                (v) Case management for participants seeking training 
            services under paragraph (4).
                (vi) Short-term prevocational services, including 
            development of learning skills, communication skills, 
            interviewing skills, punctuality, personal maintenance 
            skills, and professional conduct, to prepare individuals 
            for unsubsidized employment or training.
        (4) Training services.--
            (A) In general.--Funds allocated to a local area for adults 
        under paragraph (2)(A) or (3), as appropriate, of section 
        133(b), and funds allocated to a local area for dislocated 
        workers under section 133(b)(2)(B) shall be used to provide 
        training services to adults and dislocated workers, 
        respectively--
                (i) who have met the eligibility requirements for 
            intensive services under paragraph (3)(A) and who are 
            unable to obtain or retain employment through such 
            services;
                (ii) who after an interview, evaluation, or assessment, 
            and case management, have been determined by a one-stop 
            operator or one-stop partner, as appropriate, to be in need 
            of training services and to have the skills and 
            qualifications to successfully participate in the selected 
            program of training services;
                (iii) who select programs of training services that are 
            directly linked to the employment opportunities in the 
            local area involved or in another area in which the adults 
            or dislocated workers receiving such services are willing 
            to relocate;
                (iv) who meet the requirements of subparagraph (B); and
                (v) who are determined to be eligible in accordance 
            with the priority system, if any, in effect under 
            subparagraph (E).
            (B) Qualification.--
                (i) Requirement.--Except as provided in clause (ii), 
            provision of such training services shall be limited to 
            individuals who--

                    (I) are unable to obtain other grant assistance for 
                such services, including Federal Pell Grants 
                established under title IV of the Higher Education Act 
                of 1965 (20 U.S.C. 1070 et seq.); or
                    (II) require assistance beyond the assistance made 
                available under other grant assistance programs, 
                including Federal Pell Grants.

                (ii) Reimbursements.--Training services may be provided 
            under this paragraph to an individual who otherwise meets 
            the requirements of this paragraph while an application for 
            a Federal Pell Grant is pending, except that if such 
            individual is subsequently awarded a Federal Pell Grant, 
            appropriate reimbursement shall be made to the local area 
            from such Federal Pell Grant.
            (C) Provider qualification.--Training services shall be 
        provided through providers identified in accordance with 
        section 122.
            (D) Training services.--Training services may include--
                (i) occupational skills training, including training 
            for nontraditional employment;
                (ii) on-the-job training;
                (iii) programs that combine workplace training with 
            related instruction, which may include cooperative 
            education programs;
                (iv) training programs operated by the private sector;
                (v) skill upgrading and retraining;
                (vi) entrepreneurial training;
                (vii) job readiness training;
                (viii) adult education and literacy activities provided 
            in combination with services described in any of clauses 
            (i) through (vii); and
                (ix) customized training conducted with a commitment by 
            an employer or group of employers to employ an individual 
            upon successful completion of the training.
            (E) Priority.--In the event that funds allocated to a local 
        area for adult employment and training activities under 
        paragraph (2)(A) or (3) of section 133(b) are limited, priority 
        shall be given to recipients of public assistance and other 
        low-income individuals for intensive services and training 
        services. The appropriate local board and the Governor shall 
        direct the one-stop operators in the local area with regard to 
        making determinations related to such priority.
            (F) Consumer choice requirements.--
                (i) In general.--Training services provided under this 
            paragraph shall be provided in a manner that maximizes 
            consumer choice in the selection of an eligible provider of 
            such services.
                (ii) Eligible providers.--Each local board, through 
            one-stop centers referred to in subsection (c), shall make 
            available--

                    (I) the State list of eligible providers of 
                training services required under section 122(e), with a 
                description of the programs through which the providers 
                may offer the training services, and the information 
                identifying eligible providers of on-the-job training 
                and customized training required under section 122(h); 
                and
                    (II) the performance information and performance 
                cost information relating to eligible providers of 
                training services described in subsections (e) and (h) 
                of section 122.

            (G) Use of individual training accounts.--
                (i) In general.--Except as provided in clause (ii), 
            training services provided under this paragraph shall be 
            provided through the use of individual training accounts in 
            accordance with this paragraph, and shall be provided to 
            eligible individuals through the one-stop delivery system.
                (ii) Exceptions.--Training services authorized under 
            this paragraph may be provided pursuant to a contract for 
            services in lieu of an individual training account if the 
            requirements of subparagraph (F) are met and if--

                    (I) such services are on-the-job training provided 
                by an employer or customized training;
                    (II) the local board determines there are an 
                insufficient number of eligible providers of training 
                services in the local area involved (such as in a rural 
                area) to accomplish the purposes of a system of 
                individual training accounts; or
                    (III) the local board determines that there is a 
                training services program of demonstrated effectiveness 
                offered in the local area by a community-based 
                organization or another private organization to serve 
                special participant populations that face multiple 
                barriers to employment.

                (iii) Linkage to occupations in demand.--Training 
            services provided under this paragraph shall be directly 
            linked to occupations that are in demand in the local area, 
            or in another area to which an adult or dislocated worker 
            receiving such services is willing to relocate, except that 
            a local board may approve training services for occupations 
            determined by the local board to be in sectors of the 
            economy that have a high potential for sustained demand or 
            growth in the local area.
                (iv) Definition.--In this subparagraph, the term 
            ``special participant population that faces multiple 
            barriers to employment'' means a population of low-income 
            individuals that is included in one or more of the 
            following categories:

                    (I) Individuals with substantial language or 
                cultural barriers.
                    (II) Offenders.
                    (III) Homeless individuals.
                    (IV) Other hard-to-serve populations as defined by 
                the Governor involved.

    (e) Permissible Local Employment and Training Activities.--
        (1) Discretionary one-stop delivery activities.--Funds 
    allocated to a local area for adults under paragraph (2)(A) or (3), 
    as appropriate, of section 133(b), and funds allocated to the local 
    area for dislocated workers under section 133(b)(2)(B), may be used 
    to provide, through one-stop delivery described in subsection 
    (c)(2)--
            (A) customized screening and referral of qualified 
        participants in training services described in subsection 
        (d)(4) to employment; and
            (B) customized employment-related services to employers on 
        a fee-for-service basis.
        (2) Supportive services.--Funds allocated to a local area for 
    adults under paragraph (2)(A) or (3), as appropriate, of section 
    133(b), and funds allocated to the local area for dislocated 
    workers under section 133(b)(2)(B), may be used to provide 
    supportive services to adults and dislocated workers, 
    respectively--
            (A) who are participating in programs with activities 
        authorized in any of paragraphs (2), (3), or (4) of subsection 
        (d); and
            (B) who are unable to obtain such supportive services 
        through other programs providing such services.
        (3) Needs-related payments.--
            (A) In general.--Funds allocated to a local area for adults 
        under paragraph (2)(A) or (3), as appropriate, of section 
        133(b), and funds allocated to the local area for dislocated 
        workers under section 133(b)(2)(B), may be used to provide 
        needs-related payments to adults and dislocated workers, 
        respectively, who are unemployed and do not qualify for (or 
        have ceased to qualify for) unemployment compensation for the 
        purpose of enabling such individuals to participate in programs 
        of training services under subsection (d)(4).
            (B) Additional eligibility requirements.--In addition to 
        the requirements contained in subparagraph (A), a dislocated 
        worker who has ceased to qualify for unemployment compensation 
        may be eligible to receive needs-related payments under this 
        paragraph only if such worker was enrolled in the training 
        services--
                (i) by the end of the 13th week after the most recent 
            layoff that resulted in a determination of the worker's 
            eligibility for employment and training activities for 
            dislocated workers under this subtitle; or
                (ii) if later, by the end of the 8th week after the 
            worker is informed that a short-term layoff will exceed 6 
            months.
            (C) Level of payments.--The level of a needs-related 
        payment made to a dislocated worker under this paragraph shall 
        not exceed the greater of--
                (i) the applicable level of unemployment compensation; 
            or
                (ii) if such worker did not qualify for unemployment 
            compensation, an amount equal to the poverty line, for an 
            equivalent period, which amount shall be adjusted to 
            reflect changes in total family income.

                     CHAPTER 6--GENERAL PROVISIONS

SEC. 136. PERFORMANCE ACCOUNTABILITY SYSTEM.

    (a) Purpose.--The purpose of this section is to establish a 
comprehensive performance accountability system, comprised of the 
activities described in this section, to assess the effectiveness of 
States and local areas in achieving continuous improvement of workforce 
investment activities funded under this subtitle, in order to optimize 
the return on investment of Federal funds in statewide and local 
workforce investment activities.
    (b) State Performance Measures.--
        (1) In general.--For each State, the State performance measures 
    shall consist of--
            (A)(i) the core indicators of performance described in 
        paragraph (2)(A) and the customer satisfaction indicator of 
        performance described in paragraph (2)(B); and
            (ii) additional indicators of performance (if any) 
        identified by the State under paragraph (2)(C); and
            (B) a State adjusted level of performance for each 
        indicator described in subparagraph (A).
        (2) Indicators of performance.--
            (A) Core indicators of performance.--
                (i) In general.--The core indicators of performance for 
            employment and training activities authorized under section 
            134 (except for self-service and informational activities) 
            and (for participants who are eligible youth age 19 through 
            21) for youth activities authorized under section 129 shall 
            consist of--

                    (I) entry into unsubsidized employment;
                    (II) retention in unsubsidized employment 6 months 
                after entry into the employment;
                    (III) earnings received in unsubsidized employment 
                6 months after entry into the employment; and
                    (IV) attainment of a recognized credential relating 
                to achievement of educational skills, which may include 
                attainment of a secondary school diploma or its 
                recognized equivalent, or occupational skills, by 
                participants who enter unsubsidized employment, or by 
                participants who are eligible youth age 19 through 21 
                who enter postsecondary education, advanced training, 
                or unsubsidized employment.

                (ii) Core indicators for eligible youth.--The core 
            indicators of performance (for participants who are 
            eligible youth age 14 through 18) for youth activities 
            authorized under section 129, shall include--

                    (I) attainment of basic skills and, as appropriate, 
                work readiness or occupational skills;
                    (II) attainment of secondary school diplomas and 
                their recognized equivalents; and
                    (III) placement and retention in postsecondary 
                education or advanced training, or placement and 
                retention in military service, employment, or qualified 
                apprenticeships.

            (B) Customer satisfaction indicators.--The customer 
        satisfaction indicator of performance shall consist of customer 
        satisfaction of employers and participants with services 
        received from the workforce investment activities authorized 
        under this subtitle. Customer satisfaction may be measured 
        through surveys conducted after the conclusion of participation 
        in the workforce investment activities.
            (C) Additional indicators.--A State may identify in the 
        State plan additional indicators for workforce investment 
        activities authorized under this subtitle.
        (3) Levels of performance.--
            (A) State adjusted levels of performance for core 
        indicators and customer satisfaction indicator.--
                (i) In general.--For each State submitting a State 
            plan, there shall be established, in accordance with this 
            subparagraph, levels of performance for each of the core 
            indicators of performance described in paragraph (2)(A) and 
            the customer satisfaction indicator described in paragraph 
            (2)(B) for workforce investment activities authorized under 
            this subtitle. The levels of performance established under 
            this subparagraph shall, at a minimum--

                    (I) be expressed in an objective, quantifiable, and 
                measurable form; and
                    (II) show the progress of the State toward 
                continuously improving in performance.

                (ii) Identification in state plan.--Each State shall 
            identify, in the State plan submitted under section 112, 
            expected levels of performance for each of the core 
            indicators of performance and the customer satisfaction 
            indicator of performance, for the first 3 program years 
            covered by the State plan.
                (iii) Agreement on state adjusted levels of performance 
            for first 3 years.--In order to ensure an optimal return on 
            the investment of Federal funds in workforce investment 
            activities authorized under this subtitle, the Secretary 
            and each Governor shall reach agreement on levels of 
            performance for each of the core indicators of performance 
            and the customer satisfaction indicator of performance, for 
            the first 3 program years covered by the State plan, taking 
            into account the levels identified in the State plan under 
            clause (ii) and the factors described in clause (iv). The 
            levels agreed to under this clause shall be considered to 
            be the State adjusted levels of performance for the State 
            for such years and shall be incorporated into the State 
            plan prior to the approval of such plan.
                (iv) Factors.--The agreement described in clause (iii) 
            or (v) shall take into account--

                    (I) the extent to which the levels involved will 
                assist the State in attaining a high level of customer 
                satisfaction;
                    (II) how the levels involved compare with the State 
                adjusted levels of performance established for other 
                States, taking into account factors including 
                differences in economic conditions, the characteristics 
                of participants when the participants entered the 
                program, and the services to be provided; and
                    (III) the extent to which such levels involved 
                promote continuous improvement in performance on the 
                performance measures by such State and ensure optimal 
                return on the investment of Federal funds.

                (v) Agreement on state adjusted levels of performance 
            for 4th and 5th years.--Prior to the 4th program year 
            covered by the State plan, the Secretary and each Governor 
            shall reach agreement on levels of performance for each of 
            the core indicators of performance and the customer 
            satisfaction indicator of performance, for the 4th and 5th 
            program years covered by the State plan, taking into 
            account the factors described in clause (iv). The levels 
            agreed to under this clause shall be considered to be the 
            State adjusted levels of performance for the State for such 
            years and shall be incorporated into the State plan.
                (vi) Revisions.--If unanticipated circumstances arise 
            in a State resulting in a significant change in the factors 
            described in clause (iv)(II), the Governor may request that 
            the State adjusted levels of performance agreed to under 
            clause (iii) or (v) be revised. The Secretary, after 
            collaboration with the representatives described in 
            subsection (i), shall issue objective criteria and methods 
            for making such revisions.
            (B) Levels of performance for additional indicators.--The 
        State may identify, in the State plan, State levels of 
        performance for each of the additional indicators described in 
        paragraph (2)(C). Such levels shall be considered to be State 
        adjusted levels of performance for purposes of this title.
    (c) Local Performance Measures.--
        (1) In general.--For each local area in a State, the local 
    performance measures shall consist of--
            (A)(i) the core indicators of performance described in 
        subsection (b)(2)(A), and the customer satisfaction indicator 
        of performance described in subsection (b)(2)(B), for 
        activities described in such subsections, other than statewide 
        workforce investment activities; and
            (ii) additional indicators of performance (if any) 
        identified by the State under subsection (b)(2)(C) for 
        activities described in such subsection, other than statewide 
        workforce investment activities; and
            (B) a local level of performance for each indicator 
        described in subparagraph (A).
        (2) Local level of performance.--The local board, the chief 
    elected official, and the Governor shall negotiate and reach 
    agreement on the local levels of performance based on the State 
    adjusted levels of performance established under subsection (b).
        (3) Determinations.--In determining such local levels of 
    performance, the local board, the chief elected official, and the 
    Governor shall take into account the specific economic, 
    demographic, and other characteristics of the populations to be 
    served in the local area.
    (d) Report.--
        (1) In general.--Each State that receives an allotment under 
    section 127 or 132 shall annually prepare and submit to the 
    Secretary a report on the progress of the State in achieving State 
    performance measures, including information on the levels of 
    performance achieved by the State with respect to the core 
    indicators of performance and the customer satisfaction indicator. 
    The annual report also shall include information regarding the 
    progress of local areas in the State in achieving local performance 
    measures, including information on the levels of performance 
    achieved by the areas with respect to the core indicators of 
    performance and the customer satisfaction indicator. The report 
    also shall include information on the status of State evaluations 
    of workforce investment activities described in subsection (e).
        (2) Additional information.--In preparing such report, the 
    State shall include, at a minimum, information on participants in 
    workforce investment activities authorized under this subtitle 
    relating to--
            (A) entry by participants who have completed training 
        services provided under section 134(d)(4) into unsubsidized 
        employment related to the training received;
            (B) wages at entry into employment for participants in 
        workforce investment activities who entered unsubsidized 
        employment, including the rate of wage replacement for such 
        participants who are dislocated workers;
            (C) cost of workforce investment activities relative to the 
        effect of the activities on the performance of participants;
            (D) retention and earnings received in unsubsidized 
        employment 12 months after entry into the employment;
            (E) performance with respect to the indicators of 
        performance specified in subsection (b)(2)(A) of participants 
        in workforce investment activities who received the training 
        services compared with the performance of participants in 
        workforce investment activities who received only services 
        other than the training services (excluding participants who 
        received only self-service and informational activities); and
            (F) performance with respect to the indicators of 
        performance specified in subsection (b)(2)(A) of recipients of 
        public assistance, out-of-school youth, veterans, individuals 
        with disabilities, displaced homemakers, and older individuals.
        (3) Information dissemination.--The Secretary--
            (A) shall make the information contained in such reports 
        available to the general public through publication and other 
        appropriate methods;
            (B) shall disseminate State-by-State comparisons of the 
        information; and
            (C) shall provide the appropriate congressional committees 
        with copies of such reports.
    (e) Evaluation of State Programs.--
        (1) In general.--Using funds made available under this 
    subtitle, the State, in coordination with local boards in the 
    State, shall conduct ongoing evaluation studies of workforce 
    investment activities carried out in the State under this subtitle 
    in order to promote, establish, implement, and utilize methods for 
    continuously improving the activities in order to achieve high-
    level performance within, and high-level outcomes from, the 
    statewide workforce investment system. To the maximum extent 
    practicable, the State shall coordinate the evaluations with the 
    evaluations provided for by the Secretary under section 172.
        (2) Design.--The evaluation studies conducted under this 
    subsection shall be designed in conjunction with the State board 
    and local boards and shall include analysis of customer feedback 
    and outcome and process measures in the statewide workforce 
    investment system. The studies may include use of control groups.
        (3) Results.--The State shall periodically prepare and submit 
    to the State board, and local boards in the State, reports 
    containing the results of evaluation studies conducted under this 
    subsection, to promote the efficiency and effectiveness of the 
    statewide workforce investment system in improving employability 
    for jobseekers and competitiveness for employers.
    (f) Fiscal and Management Accountability Information Systems.--
        (1) In general.--Using funds made available under this 
    subtitle, the Governor, in coordination with local boards and chief 
    elected officials in the State, shall establish and operate a 
    fiscal and management accountability information system based on 
    guidelines established by the Secretary after consultation with the 
    Governors, local elected officials, and one-stop partners. Such 
    guidelines shall promote efficient collection and use of fiscal and 
    management information for reporting and monitoring the use of 
    funds made available under this subtitle and for preparing the 
    annual report described in subsection (d).
        (2) Wage records.--In measuring the progress of the State on 
    State and local performance measures, a State shall utilize 
    quarterly wage records, consistent with State law. The Secretary 
    shall make arrangements, consistent with State law, to ensure that 
    the wage records of any State are available to any other State to 
    the extent that such wage records are required by the State in 
    carrying out the State plan of the State or completing the annual 
    report described in subsection (d).
        (3) Confidentiality.--In carrying out the requirements of this 
    Act, the State shall comply with section 444 of the General 
    Education Provisions Act (20 U.S.C. 1232g) (as added by the Family 
    Educational Rights and Privacy Act of 1974).
    (g) Sanctions for State Failure To Meet State Performance 
Measures.--
        (1) States.--
            (A) Technical assistance.--If a State fails to meet State 
        adjusted levels of performance relating to indicators described 
        in subparagraph (A) or (B) of subsection (b)(2) for a program 
        for any program year, the Secretary shall, upon request, 
        provide technical assistance in accordance with section 170, 
        including assistance in the development of a performance 
        improvement plan.
            (B) Reduction in amount of grant.--If such failure 
        continues for a second consecutive year, or if a State fails to 
        submit a report under subsection (d) for any program year, the 
        Secretary may reduce by not more than 5 percent, the amount of 
        the grant that would (in the absence of this paragraph) be 
        payable to the State under such program for the immediately 
        succeeding program year. Such penalty shall be based on the 
        degree of failure to meet State adjusted levels of performance.
        (2) Funds resulting from reduced allotments.--The Secretary 
    shall use an amount retained, as a result of a reduction in an 
    allotment to a State made under paragraph (1)(B), to provide 
    incentive grants under section 503.
    (h) Sanctions for Local Area Failure To Meet Local Performance 
Measures.--
        (1) Technical assistance.--If a local area fails to meet levels 
    of performance relating to indicators described in subparagraph (A) 
    or (B) of subsection (b)(2) for a program for any program year, the 
    Governor, or upon request by the Governor, the Secretary, shall 
    provide technical assistance, which may include assistance in the 
    development of a performance improvement plan, or the development 
    of a modified local plan.
        (2) Corrective actions.--
            (A) In general.--If such failure continues for a second 
        consecutive year, the Governor shall take corrective actions, 
        which may include development of a reorganization plan through 
        which the Governor may--
                (i) require the appointment and certification of a new 
            local board (consistent with the criteria established under 
            section 117(b));
                (ii) prohibit the use of eligible providers and one-
            stop partners identified as achieving a poor level of 
            performance; or
                (iii) take such other actions as the Governor 
            determines are appropriate.
            (B) Appeal by local area.--
                (i) Appeal to governor.--A local area that is subject 
            to a reorganization plan under subparagraph (A) may, not 
            later than 30 days after receiving notice of the 
            reorganization plan, appeal to the Governor to rescind or 
            revise such plan. In such case, the Governor shall make a 
            final decision not later then 30 days after the receipt of 
            the appeal.
                (ii) Subsequent action.--The local area may, not later 
            than 30 days after receiving a decision from the Governor 
            pursuant to clause (i), appeal such decision to the 
            Secretary. In such case, the Secretary shall make a final 
            decision not later than 30 days after the receipt of the 
            appeal.
            (C) Effective date.--The decision made by the Governor 
        under clause (i) of subparagraph (B) shall become effective at 
        the time the Governor issues the decision pursuant to such 
        clause. Such decision shall remain effective unless the 
        Secretary rescinds or revises such plan pursuant to clause (ii) 
        of subparagraph (B).
    (i) Other Measures and Terminology.--
        (1) Responsibilities.--In order to ensure nationwide 
    comparability of performance data, the Secretary, after 
    collaboration with representatives of appropriate Federal agencies, 
    and representatives of States and political subdivisions, business 
    and industry, employees, eligible providers of employment and 
    training activities, educators, and participants, with expertise 
    regarding workforce investment policies and workforce investment 
    activities, shall issue--
            (A) definitions for information required to be reported 
        under subsection (d)(2);
            (B) terms for a menu of additional indicators of 
        performance described in subsection (b)(2)(C) to assist States 
        in assessing their progress toward State workforce investment 
        goals; and
            (C) objective criteria and methods described in subsection 
        (b)(3)(A)(vi) for making revisions to levels of performance.
        (2) Definitions for core indicators.--The Secretary and the 
    representatives described in paragraph (1) shall participate in the 
    activities described in section 502 concerning the issuance of 
    definitions for indicators of performance described in subsection 
    (b)(2)(A).
        (3) Assistance.--The Secretary shall make the services of staff 
    available to the representatives to assist the representatives in 
    participating in the collaboration described in paragraph (1) and 
    in the activities described in section 502.

SEC. 137. AUTHORIZATION OF APPROPRIATIONS.

    (a) Youth Activities.--There are authorized to be appropriated to 
carry out the activities described in section 127(a), such sums as may 
be necessary for each of fiscal years 1999 through 2003.
    (b) Adult Employment and Training Activities.--There are authorized 
to be appropriated to carry out the activities described in section 
132(a)(1), such sums as may be necessary for each of fiscal years 1999 
through 2003.
    (c) Dislocated Worker Employment and Training Activities.--There 
are authorized to be appropriated to carry out the activities described 
in section 132(a)(2), such sums as may be necessary for each of fiscal 
years 1999 through 2003.

                         Subtitle C--Job Corps

SEC. 141. PURPOSES.

    The purposes of this subtitle are--
        (1) to maintain a national Job Corps program, carried out in 
    partnership with States and communities, to assist eligible youth 
    who need and can benefit from an intensive program, operated in a 
    group setting in residential and nonresidential centers, to become 
    more responsible, employable, and productive citizens;
        (2) to set forth standards and procedures for selecting 
    individuals as enrollees in the Job Corps;
        (3) to authorize the establishment of Job Corps centers in 
    which enrollees will participate in intensive programs of 
    activities described in this subtitle; and
        (4) to prescribe various other powers, duties, and 
    responsibilities incident to the operation and continuing 
    development of the Job Corps.

SEC. 142. DEFINITIONS.

    In this subtitle:
        (1) Applicable local board.--The term ``applicable local 
    board'' means a local board--
            (A) that provides information for a Job Corps center on 
        local employment opportunities and the job skills needed to 
        obtain the opportunities; and
            (B) that serves communities in which the graduates of the 
        Job Corps center seek employment.
        (2) Applicable one-stop center.--The term ``applicable one-stop 
    center'' means a one-stop customer service center that provides 
    services, such as referral, intake, recruitment, and placement, to 
    a Job Corps center.
        (3) Enrollee.--The term ``enrollee'' means an individual who 
    has voluntarily applied for, been selected for, and enrolled in the 
    Job Corps program, and remains with the program, but has not yet 
    become a graduate.
        (4) Former enrollee.--The term ``former enrollee'' means an 
    individual who has voluntarily applied for, been selected for, and 
    enrolled in the Job Corps program, but left the program before 
    completing the requirements of a vocational training program, or 
    receiving a secondary school diploma or recognized equivalent, as a 
    result of participation in the Job Corps program.
        (5) Graduate.--The term ``graduate'' means an individual who 
    has voluntarily applied for, been selected for, and enrolled in the 
    Job Corps program and has completed the requirements of a 
    vocational training program, or received a secondary school diploma 
    or recognized equivalent, as a result of participation in the Job 
    Corps program.
        (6) Job corps.--The term ``Job Corps'' means the Job Corps 
    described in section 143.
        (7) Job corps center.--The term ``Job Corps center'' means a 
    center described in section 147.
        (8) Operator.--The term ``operator'' means an entity selected 
    under this subtitle to operate a Job Corps center.
        (9) Region.--The term ``region'' means an area served by a 
    regional office of the Employment and Training Administration.
        (10) Service provider.--The term ``service provider'' means an 
    entity selected under this subtitle to provide services described 
    in this subtitle to a Job Corps center.

SEC. 143. ESTABLISHMENT.

    There shall be within the Department of Labor a ``Job Corps''.

SEC. 144. INDIVIDUALS ELIGIBLE FOR THE JOB CORPS.

    To be eligible to become an enrollee, an individual shall be--
        (1) not less than age 16 and not more than age 21 on the date 
    of enrollment, except that--
            (A) not more than 20 percent of the individuals enrolled in 
        the Job Corps may be not less than age 22 and not more than age 
        24 on the date of enrollment; and
            (B) either such maximum age limitation may be waived by the 
        Secretary, in accordance with regulations of the Secretary, in 
        the case of an individual with a disability;
        (2) a low-income individual; and
        (3) an individual who is one or more of the following:
            (A) Basic skills deficient.
            (B) A school dropout.
            (C) Homeless, a runaway, or a foster child.
            (D) A parent.
            (E) An individual who requires additional education, 
        vocational training, or intensive counseling and related 
        assistance, in order to participate successfully in regular 
        schoolwork or to secure and hold employment.

SEC. 145. RECRUITMENT, SCREENING, SELECTION, AND ASSIGNMENT OF 
              ENROLLEES.

    (a) Standards and Procedures.--
        (1) In general.--The Secretary shall prescribe specific 
    standards and procedures for the recruitment, screening, and 
    selection of eligible applicants for the Job Corps, after 
    considering recommendations from the Governors, local boards, and 
    other interested parties.
        (2) Methods.--In prescribing standards and procedures under 
    paragraph (1), the Secretary, at a minimum, shall--
            (A) prescribe procedures for informing enrollees that drug 
        tests will be administered to the enrollees and the results 
        received within 45 days after the enrollees enroll in the Job 
        Corps;
            (B) establish standards for recruitment of Job Corps 
        applicants;
            (C) establish standards and procedures for--
                (i) determining, for each applicant, whether the 
            educational and vocational needs of the applicant can best 
            be met through the Job Corps program or an alternative 
            program in the community in which the applicant resides; 
            and
                (ii) obtaining from each applicant pertinent data 
            relating to background, needs, and interests for 
            determining eligibility and potential assignment;
            (D) where appropriate, take measures to improve the 
        professional capability of the individuals conducting screening 
        of the applicants; and
            (E) assure that an appropriate number of enrollees are from 
        rural areas.
        (3) Implementation.--To the extent practicable, the standards 
    and procedures shall be implemented through arrangements with--
            (A) applicable one-stop centers;
            (B) community action agencies, business organizations, and 
        labor organizations; and
            (C) agencies and individuals that have contact with youth 
        over substantial periods of time and are able to offer reliable 
        information about the needs and problems of youth.
        (4) Consultation.--The standards and procedures shall provide 
    for necessary consultation with individuals and organizations, 
    including court, probation, parole, law enforcement, education, 
    welfare, and medical authorities and advisers.
        (5) Reimbursement.--The Secretary is authorized to enter into 
    contracts with and make payments to individuals and organizations 
    for the cost of conducting recruitment, screening, and selection of 
    eligible applicants for the Job Corps, as provided for in this 
    section. The Secretary shall make no payment to any individual or 
    organization solely as compensation for referring the names of 
    applicants for the Job Corps.
    (b) Special Limitations on Selection.--
        (1) In general.--No individual shall be selected as an enrollee 
    unless the individual or organization implementing the standards 
    and procedures described in subsection (a) determines that--
            (A) there is a reasonable expectation that the individual 
        considered for selection can participate successfully in group 
        situations and activities, and is not likely to engage in 
        behavior that would prevent other enrollees from receiving the 
        benefit of the Job Corps program or be incompatible with the 
        maintenance of sound discipline and satisfactory relationships 
        between the Job Corps center to which the individual might be 
        assigned and communities surrounding the Job Corps center;
            (B) the individual manifests a basic understanding of both 
        the rules to which the individual will be subject and of the 
        consequences of failure to observe the rules; and
            (C) the individual has passed a background check conducted 
        in accordance with procedures established by the Secretary.
        (2) Individuals on probation, parole, or supervised release.--
    An individual on probation, parole, or supervised release may be 
    selected as an enrollee only if release from the supervision of the 
    probation or parole official involved is satisfactory to the 
    official and the Secretary and does not violate applicable laws 
    (including regulations). No individual shall be denied a position 
    in the Job Corps solely on the basis of individual contact with the 
    criminal justice system.
    (c) Assignment Plan.--
        (1) In general.--Every 2 years, the Secretary shall develop and 
    implement an assignment plan for assigning enrollees to Job Corps 
    centers. In developing the plan, the Secretary shall, based on the 
    analysis described in paragraph (2), establish targets, applicable 
    to each Job Corps center, for--
            (A) the maximum attainable percentage of enrollees at the 
        Job Corps center that reside in the State in which the center 
        is located; and
            (B) the maximum attainable percentage of enrollees at the 
        Job Corps center that reside in the region in which the center 
        is located, and in surrounding regions.
        (2) Analysis.--In order to develop the plan described in 
    paragraph (1), the Secretary shall, every 2 years, analyze, for the 
    Job Corps center--
            (A) the size of the population of individuals eligible to 
        participate in Job Corps in the State and region in which the 
        Job Corps center is located, and in surrounding regions;
            (B) the relative demand for participation in the Job Corps 
        in the State and region, and in surrounding regions; and
            (C) the capacity and utilization of the Job Corps center, 
        including services provided through the center.
    (d) Assignment of Individual Enrollees.--
        (1) In general.--After an individual has been selected for the 
    Job Corps in accordance with the standards and procedures of the 
    Secretary under subsection (a), the enrollee shall be assigned to 
    the Job Corps center that is closest to the home of the enrollee, 
    except that the Secretary may waive this requirement if--
            (A) the enrollee chooses a vocational training program, or 
        requires an English literacy program, that is not available at 
        such center;
            (B) the enrollee would be unduly delayed in participating 
        in the Job Corps program because the closest center is 
        operating at full capacity; or
            (C) the parent or guardian of the enrollee requests 
        assignment of the enrollee to another Job Corps center due to 
        circumstances in the community of the enrollee that would 
        impair prospects for successful participation in the Job Corps 
        program.
        (2) Enrollees who are younger than 18.--An enrollee who is 
    younger than 18 shall not be assigned to a Job Corps center other 
    than the center closest to the home of the enrollee pursuant to 
    paragraph (1) if the parent or guardian of the enrollee objects to 
    the assignment.

SEC. 146. ENROLLMENT.

    (a) Relationship Between Enrollment and Military Obligations.--
Enrollment in the Job Corps shall not relieve any individual of 
obligations under the Military Selective Service Act (50 U.S.C. App. 
451 et seq.).
    (b) Period of Enrollment.--No individual may be enrolled in the Job 
Corps for more than 2 years, except--
        (1) in a case in which completion of an advanced career 
    training program under section 148(c) would require an individual 
    to participate in the Job Corps for not more than one additional 
    year; or
        (2) as the Secretary may authorize in a special case.

SEC. 147. JOB CORPS CENTERS.

    (a) Operators and Service Providers.--
        (1) Eligible entities.--
            (A) Operators.--The Secretary shall enter into an agreement 
        with a Federal, State, or local agency, an area vocational 
        education school or residential vocational school, or a private 
        organization, for the operation of each Job Corps center.
            (B) Providers.--The Secretary may enter into an agreement 
        with a local entity to provide activities described in this 
        subtitle to the Job Corps center.
        (2) Selection process.--
            (A) Competitive basis.--Except as provided in subsections 
        (c) and (d) of section 303 of the Federal Property and 
        Administrative Services Act of 1949 (41 U.S.C. 253), the 
        Secretary shall select on a competitive basis an entity to 
        operate a Job Corps center and entities to provide activities 
        described in this subtitle to the Job Corps center. In 
        developing a solicitation for an operator or service provider, 
        the Secretary shall consult with the Governor of the State in 
        which the center is located, the industry council for the Job 
        Corps center (if established), and the applicable local board 
        regarding the contents of such solicitation, including elements 
        that will promote the consistency of the activities carried out 
        through the center with the objectives set forth in the State 
        plan or in a local plan.
            (B) Recommendations and considerations.--
                (i) Operators.--In selecting an entity to operate a Job 
            Corps center, the Secretary shall consider--

                    (I) the ability of the entity to coordinate the 
                activities carried out through the Job Corps center 
                with activities carried out under the appropriate State 
                plan and local plans;
                    (II) the degree to which the vocational training 
                that the entity proposes for the center reflects local 
                employment opportunities in the local areas in which 
                enrollees at the center intend to seek employment;
                    (III) the degree to which the entity is familiar 
                with the surrounding communities, applicable one-stop 
                centers, and the State and region in which the center 
                is located; and
                    (IV) the past performance of the entity, if any, 
                relating to operating or providing activities described 
                in this subtitle to a Job Corps center.

                (ii) Providers.--In selecting a service provider for a 
            Job Corps center, the Secretary shall consider the factors 
            described in subclauses (I) through (IV) of clause (i), as 
            appropriate.
    (b) Character and Activities.--Job Corps centers may be residential 
or nonresidential in character, and shall be designed and operated so 
as to provide enrollees, in a well-supervised setting, with access to 
activities described in this subtitle. In any year, no more than 20 
percent of the individuals enrolled in the Job Corps may be 
nonresidential participants in the Job Corps.
    (c) Civilian Conservation Centers.--
        (1) In general.--The Job Corps centers may include Civilian 
    Conservation Centers operated under agreements with the Secretary 
    of Agriculture or the Secretary of the Interior, located primarily 
    in rural areas, which shall provide, in addition to other 
    vocational training and assistance, programs of work experience to 
    conserve, develop, or manage public natural resources or public 
    recreational areas or to develop community projects in the public 
    interest.
        (2) Selection process.--The Secretary may select an entity to 
    operate a Civilian Conservation Center on a competitive basis, as 
    provided in subsection (a), if the center fails to meet such 
    national performance standards as the Secretary shall establish.
    (d) Indian Tribes.--
        (1) General authority.--The Secretary may enter into agreements 
    with Indian tribes to operate Job Corps centers for Indians.
        (2) Definitions.--In this subsection, the terms ``Indian'' and 
    ``Indian tribe'', have the meanings given such terms in subsections 
    (d) and (e), respectively, of section 4 of the Indian Self-
    Determination and Education Assistance Act (25 U.S.C. 450b).

SEC. 148. PROGRAM ACTIVITIES.

    (a) Activities Provided by Job Corps Centers.--
        (1) In general.--Each Job Corps center shall provide enrollees 
    with an intensive, well organized, and fully supervised program of 
    education, vocational training, work experience, recreational 
    activities, physical rehabilitation and development, and 
    counseling. Each Job Corps center shall provide enrollees assigned 
    to the center with access to core services described in section 
    134(d)(2) and the intensive services described in section 
    134(d)(3).
        (2) Relationship to opportunities.--
            (A) In general.--The activities provided under this 
        subsection shall provide work-based learning throughout the 
        enrollment of the enrollees and assist the enrollees in 
        obtaining meaningful unsubsidized employment, participating in 
        secondary education or postsecondary education programs, 
        enrolling in other suitable vocational training programs, or 
        satisfying Armed Forces requirements, on completion of their 
        enrollment.
            (B) Link to employment opportunities.--The vocational 
        training provided shall be linked to the employment 
        opportunities in the local area in which the enrollee intends 
        to seek employment after graduation.
    (b) Education and Vocational Training.--The Secretary may arrange 
for education and vocational training of enrollees through local public 
or private educational agencies, vocational educational institutions, 
or technical institutes, whenever such entities provide education and 
training substantially equivalent in cost and quality to that which the 
Secretary could provide through other means.
    (c) Advanced Career Training Programs.--
        (1) In general.--The Secretary may arrange for programs of 
    advanced career training for selected enrollees in which the 
    enrollees may continue to participate for a period of not to exceed 
    1 year in addition to the period of participation to which the 
    enrollees would otherwise be limited. The advanced career training 
    may be provided through the eligible providers of training services 
    identified under section 122.
        (2) Benefits.--
            (A) In general.--During the period of participation in an 
        advanced career training program, an enrollee shall be eligible 
        for full Job Corps benefits, or a monthly stipend equal to the 
        average value of the residential support, food, allowances, and 
        other benefits provided to enrollees assigned to residential 
        Job Corps centers.
            (B) Calculation.--The total amount for which an enrollee 
        shall be eligible under subparagraph (A) shall be reduced by 
        the amount of any scholarship or other educational grant 
        assistance received by such enrollee for advanced career 
        training.
        (3) Demonstration.--Each year, any operator seeking to enroll 
    additional enrollees in an advanced career training program shall 
    demonstrate that participants in such program have achieved a 
    satisfactory rate of completion and placement in training-related 
    jobs before the operator may carry out such additional enrollment.
    (d) Continued Services.--The Secretary shall also provide continued 
services to graduates, including providing counseling regarding the 
workplace for 12 months after the date of graduation of the graduates. 
In selecting a provider for such services, the Secretary shall give 
priority to one-stop partners.
    (e) Child Care.--The Secretary shall, to the extent practicable, 
provide child care at or near Job Corps centers, for individuals who 
require child care for their children in order to participate in the 
Job Corps.

SEC. 149. COUNSELING AND JOB PLACEMENT.

    (a) Counseling and Testing.--The Secretary shall arrange for 
counseling and testing for each enrollee at regular intervals to 
measure progress in the education and vocational training programs 
carried out through the Job Corps.
    (b) Placement.--The Secretary shall arrange for counseling and 
testing for enrollees prior to their scheduled graduations to determine 
their capabilities and, based on their capabilities, shall make every 
effort to arrange to place the enrollees in jobs in the vocations for 
which the enrollees are trained or to assist the enrollees in obtaining 
further activities described in this subtitle. In arranging for the 
placement of graduates in jobs, the Secretary shall utilize the one-
stop delivery system to the fullest extent possible.
    (c) Status and Progress.--The Secretary shall determine the status 
and progress of enrollees scheduled for graduation and make every 
effort to assure that their needs for further activities described in 
this subtitle are met.
    (d) Services to Former Enrollees.--The Secretary may provide such 
services as the Secretary determines to be appropriate under this 
subtitle to former enrollees.

SEC. 150. SUPPORT.

    (a) Personal Allowances.--The Secretary may provide enrollees 
assigned to Job Corps centers with such personal allowances as the 
Secretary may determine to be necessary or appropriate to meet the 
needs of the enrollees.
    (b) Readjustment Allowances.--
        (1) Graduates.--The Secretary shall arrange for a readjustment 
    allowance to be paid to graduates. The Secretary shall arrange for 
    the allowance to be paid at the one-stop center nearest to the home 
    of the graduate who is returning home, or at the one-stop center 
    nearest to the location where the graduate has indicated an intent 
    to seek employment. If the Secretary uses any organization, in lieu 
    of a one-stop center, to provide placement services under this Act, 
    the Secretary shall arrange for that organization to pay the 
    readjustment allowance.
        (2) Former enrollees.--The Secretary may provide for a 
    readjustment allowance to be paid to former enrollees. The 
    provision of the readjustment allowance shall be subject to the 
    same requirements as are applicable to the provision of the 
    readjustment allowance paid to graduates under paragraph (1).

SEC. 151. OPERATING PLAN.

    (a) In General.--The provisions of the contract between the 
Secretary and an entity selected to operate a Job Corps center shall, 
at a minimum, serve as an operating plan for the Job Corps center.
    (b) Additional Information.--The Secretary may require the 
operator, in order to remain eligible to operate the Job Corps center, 
to submit such additional information as the Secretary may require, 
which shall be considered part of the operating plan.
    (c) Availability.--The Secretary shall make the operating plan 
described in subsections (a) and (b), excluding any proprietary 
information, available to the public.

SEC. 152. STANDARDS OF CONDUCT.

    (a) Provision and Enforcement.--The Secretary shall provide, and 
directors of Job Corps centers shall stringently enforce, standards of 
conduct within the centers. Such standards of conduct shall include 
provisions forbidding the actions described in subsection (b)(2)(A).
    (b) Disciplinary Measures.--
        (1) In general.--To promote the proper moral and disciplinary 
    conditions in the Job Corps, the directors of Job Corps centers 
    shall take appropriate disciplinary measures against enrollees. If 
    such a director determines that an enrollee has committed a 
    violation of the standards of conduct, the director shall dismiss 
    the enrollee from the Job Corps if the director determines that the 
    retention of the enrollee in the Job Corps will jeopardize the 
    enforcement of such standards or diminish the opportunities of 
    other enrollees.
        (2) Zero tolerance policy and drug testing.--
            (A) Guidelines.--The Secretary shall adopt guidelines 
        establishing a zero tolerance policy for an act of violence, 
        for use, sale, or possession of a controlled substance, for 
        abuse of alcohol, or for other illegal or disruptive activity.
            (B) Drug testing.--The Secretary shall require drug testing 
        of all enrollees for controlled substances in accordance with 
        procedures prescribed by the Secretary under section 145(a).
            (C) Definitions.--In this paragraph:
                (i) Controlled substance.--The term ``controlled 
            substance'' has the meaning given the term in section 102 
            of the Controlled Substances Act (21 U.S.C. 802).
                (ii) Zero tolerance policy.--The term ``zero tolerance 
            policy'' means a policy under which an enrollee shall be 
            automatically dismissed from the Job Corps after a 
            determination by the director that the enrollee has carried 
            out an action described in subparagraph (A).
    (c) Appeal.--A disciplinary measure taken by a director under this 
section shall be subject to expeditious appeal in accordance with 
procedures established by the Secretary.

SEC. 153. COMMUNITY PARTICIPATION.

    (a) Business and Community Liaison.--Each Job Corps center shall 
have a Business and Community Liaison (referred to in this Act as a 
``Liaison''), designated by the director of the center.
    (b) Responsibilities.--The responsibilities of the Liaison shall 
include--
        (1) establishing and developing relationships and networks 
    with--
            (A) local and distant employers; and
            (B) applicable one-stop centers and applicable local 
        boards,
    for the purpose of providing job opportunities for Job Corps 
    graduates; and
        (2) establishing and developing relationships with members of 
    the community in which the Job Corps center is located, informing 
    members of the community about the projects of the Job Corps center 
    and changes in the rules, procedures, or activities of the center 
    that may affect the community, and planning events of mutual 
    interest to the community and the Job Corps center.
    (c) New Centers.--The Liaison for a Job Corps center that is not 
yet operating shall establish and develop the relationships and 
networks described in subsection (b) at least 3 months prior to the 
date on which the center accepts the first enrollee at the center.

SEC. 154. INDUSTRY COUNCILS.

    (a) In General.--Each Job Corps center shall have an industry 
council, appointed by the director of the center after consultation 
with the Liaison, in accordance with procedures established by the 
Secretary.
    (b) Industry Council Composition.--
        (1) In general.--An industry council shall be comprised of--
            (A) a majority of members who shall be local and distant 
        owners of business concerns, chief executives or chief 
        operating officers of nongovernmental employers, or other 
        private sector employers, who--
                (i) have substantial management, hiring, or policy 
            responsibility; and
                (ii) represent businesses with employment opportunities 
            that reflect the employment opportunities of the applicable 
            local area;
            (B) representatives of labor organizations (where present) 
        and representatives of employees; and
            (C) enrollees and graduates of the Job Corps.
        (2) Local board.--The industry council may include members of 
    the applicable local boards who meet the requirements described in 
    paragraph (1).
    (c) Responsibilities.--The responsibilities of the industry council 
shall be--
        (1) to work closely with all applicable local boards in order 
    to determine, and recommend to the Secretary, appropriate 
    vocational training for the center;
        (2) to review all the relevant labor market information to--
            (A) determine the employment opportunities in the local 
        areas in which the enrollees intend to seek employment after 
        graduation;
            (B) determine the skills and education that are necessary 
        to obtain the employment opportunities; and
            (C) recommend to the Secretary the type of vocational 
        training that should be implemented at the center to enable the 
        enrollees to obtain the employment opportunities; and
        (3) to meet at least once every 6 months to reevaluate the 
    labor market information, and other relevant information, to 
    determine, and recommend to the Secretary, any necessary changes in 
    the vocational training provided at the center.
    (d) New Centers.--The industry council for a Job Corps center that 
is not yet operating shall carry out the responsibilities described in 
subsection (c) at least 3 months prior to the date on which the center 
accepts the first enrollee at the center.

SEC. 155. ADVISORY COMMITTEES.

    The Secretary may establish and use advisory committees in 
connection with the operation of the Job Corps program, and the 
operation of Job Corps centers, whenever the Secretary determines that 
the availability of outside advice and counsel on a regular basis would 
be of substantial benefit in identifying and overcoming problems, in 
planning program or center development, or in strengthening 
relationships between the Job Corps and agencies, institutions, or 
groups engaged in related activities.

SEC. 156. EXPERIMENTAL, RESEARCH, AND DEMONSTRATION PROJECTS.

    The Secretary may carry out experimental, research, or 
demonstration projects relating to carrying out the Job Corps program 
and may waive any provisions of this subtitle that the Secretary finds 
would prevent the Secretary from carrying out the projects.

SEC. 157. APPLICATION OF PROVISIONS OF FEDERAL LAW.

    (a) Enrollees Not Considered To Be Federal Employees.--
        (1) In general.--Except as otherwise provided in this 
    subsection and in section 8143(a) of title 5, United States Code, 
    enrollees shall not be considered to be Federal employees and shall 
    not be subject to the provisions of law relating to Federal 
    employment, including such provisions regarding hours of work, 
    rates of compensation, leave, unemployment compensation, and 
    Federal employee benefits.
        (2) Provisions relating to taxes and social security 
    benefits.--For purposes of the Internal Revenue Code of 1986 and 
    title II of the Social Security Act (42 U.S.C. 401 et seq.), 
    enrollees shall be deemed to be employees of the United States and 
    any service performed by an individual as an enrollee shall be 
    deemed to be performed in the employ of the United States.
        (3) Provisions relating to compensation to federal employees 
    for work injuries.--For purposes of subchapter I of chapter 81 of 
    title 5, United States Code (relating to compensation to Federal 
    employees for work injuries), enrollees shall be deemed to be civil 
    employees of the Government of the United States within the meaning 
    of the term ``employee'' as defined in section 8101 of title 5, 
    United States Code, and the provisions of such subchapter shall 
    apply as specified in section 8143(a) of title 5, United States 
    Code.
        (4) Federal tort claims provisions.--For purposes of the 
    Federal tort claims provisions in title 28, United States Code, 
    enrollees shall be considered to be employees of the Government.
    (b) Adjustments and Settlements.--Whenever the Secretary finds a 
claim for damages to a person or property resulting from the operation 
of the Job Corps to be a proper charge against the United States, and 
the claim is not cognizable under section 2672 of title 28, United 
States Code, the Secretary may adjust and settle the claim in an amount 
not exceeding $1,500.
    (c) Personnel of the Uniformed Services.--Personnel of the 
uniformed services who are detailed or assigned to duty in the 
performance of agreements made by the Secretary for the support of the 
Job Corps shall not be counted in computing strength under any law 
limiting the strength of such services or in computing the percentage 
authorized by law for any grade in such services.

SEC. 158. SPECIAL PROVISIONS.

    (a) Enrollment.--The Secretary shall ensure that women and men have 
an equal opportunity to participate in the Job Corps program, 
consistent with section 145.
    (b) Studies, Evaluations, Proposals, and Data.--The Secretary shall 
assure that all studies, evaluations, proposals, and data produced or 
developed with Federal funds in the course of carrying out the Job 
Corps program shall become the property of the United States.
    (c) Transfer of Property.--
        (1) In general.--Notwithstanding title II of the Federal 
    Property and Administrative Services Act of 1949 (40 U.S.C. 481 et 
    seq.) and any other provision of law, the Secretary and the 
    Secretary of Education shall receive priority by the Secretary of 
    Defense for the direct transfer, on a nonreimbursable basis, of the 
    property described in paragraph (2) for use in carrying out 
    programs under this Act or under any other Act.
        (2) Property.--The property described in this paragraph is real 
    and personal property under the control of the Department of 
    Defense that is not used by such Department, including property 
    that the Secretary of Defense determines is in excess of current 
    and projected requirements of such Department.
    (d) Gross Receipts.--Transactions conducted by a private for-profit 
or nonprofit entity that is an operator or service provider for a Job 
Corps center shall not be considered to be generating gross receipts. 
Such an operator or service provider shall not be liable, directly or 
indirectly, to any State or subdivision of a State (nor to any person 
acting on behalf of such a State or subdivision) for any gross receipts 
taxes, business privilege taxes measured by gross receipts, or any 
similar taxes imposed on, or measured by, gross receipts in connection 
with any payments made to or by such entity for operating or providing 
services to a Job Corps center. Such an operator or service provider 
shall not be liable to any State or subdivision of a State to collect 
or pay any sales, excise, use, or similar tax imposed on the sale to or 
use by such operator or service provider of any property, service, or 
other item in connection with the operation of or provision of services 
to a Job Corps center.
    (e) Management Fee.--The Secretary shall provide each operator and 
(in an appropriate case, as determined by the Secretary) service 
provider with an equitable and negotiated management fee of not less 
than 1 percent of the amount of the funding provided under the 
appropriate agreement specified in section 147.
    (f) Donations.--The Secretary may accept on behalf of the Job Corps 
or individual Job Corps centers charitable donations of cash or other 
assistance, including equipment and materials, if such donations are 
available for appropriate use for the purposes set forth in this 
subtitle.
    (g) Sale of Property.--Notwithstanding any other provision of law, 
if the Administrator of General Services sells a Job Corps center 
facility, the Administrator shall transfer the proceeds from the sale 
to the Secretary, who shall use the proceeds to carry out the Job Corps 
program.

SEC. 159. MANAGEMENT INFORMATION.

    (a) Financial Management Information System.--
        (1) In general.--The Secretary shall establish procedures to 
    ensure that each operator, and each service provider, maintains a 
    financial management information system that will provide--
            (A) accurate, complete, and current disclosures of the 
        costs of Job Corps operations; and
            (B) sufficient data for the effective evaluation of 
        activities carried out through the Job Corps program.
        (2) Accounts.--Each operator and service provider shall 
    maintain funds received under this subtitle in accounts in a manner 
    that ensures timely and accurate reporting as required by the 
    Secretary.
        (3) Fiscal responsibility.--Operators shall remain fiscally 
    responsible and control costs, regardless of whether the funds made 
    available for Job Corps centers are incrementally increased or 
    decreased between fiscal years.
    (b) Audit.--
        (1) Access.--The Secretary, the Inspector General of the 
    Department of Labor, the Comptroller General of the United States, 
    and any of their duly authorized representatives, shall have access 
    to any books, documents, papers, and records of the operators and 
    service providers described in subsection (a) that are pertinent to 
    the Job Corps program, for purposes of conducting surveys, audits, 
    and evaluations of the operators and service providers.
        (2) Surveys, audits, and evaluations.--The Secretary shall 
    survey, audit, or evaluate, or arrange for the survey, audit, or 
    evaluation of, the operators and service providers, using Federal 
    auditors or independent public accountants. The Secretary shall 
    conduct such surveys, audits, or evaluations not less often than 
    once every 3 years.
    (c) Information on Indicators of Performance.--
        (1) Establishment.--The Secretary shall, with continuity and 
    consistency from year to year, establish indicators of performance, 
    and expected levels of performance for Job Corps centers and the 
    Job Corps program, relating to--
            (A) the number of graduates and the rate of such 
        graduation, analyzed by type of vocational training received 
        through the Job Corps program and by whether the vocational 
        training was provided by a local or national service provider;
            (B) the number of graduates who entered unsubsidized 
        employment related to the vocational training received through 
        the Job Corps program and the number who entered unsubsidized 
        employment not related to the vocational training received, 
        analyzed by whether the vocational training was provided by a 
        local or national service provider and by whether the placement 
        in the employment was conducted by a local or national service 
        provider;
            (C) the average wage received by graduates who entered 
        unsubsidized employment related to the vocational training 
        received through the Job Corps program and the average wage 
        received by graduates who entered unsubsidized employment 
        unrelated to the vocational training received;
            (D) the average wage received by graduates placed in 
        unsubsidized employment after completion of the Job Corps 
        program--
                (i) on the first day of the employment;
                (ii) 6 months after the first day of the employment; 
            and
                (iii) 12 months after the first day of the employment,
        analyzed by type of vocational training received through the 
        Job Corps program;
            (E) the number of graduates who entered unsubsidized 
        employment and were retained in the unsubsidized employment--
                (i) 6 months after the first day of the employment; and
                (ii) 12 months after the first day of the employment;
            (F) the number of graduates who entered unsubsidized 
        employment--
                (i) for 32 hours per week or more;
                (ii) for not less than 20 but less than 32 hours per 
            week; and
                (iii) for less than 20 hours per week;
            (G) the number of graduates who entered post- secondary 
        education or advanced training programs, including 
        apprenticeship programs, as appropriate; and
            (H) the number of graduates who attained job readiness and 
        employment skills.
        (2) Performance of recruiters.--The Secretary shall also 
    establish performance measures, and expected performance levels on 
    the performance measures, for local and national recruitment 
    service providers serving the Job Corps program. The performance 
    measures shall relate to the number of enrollees retained in the 
    Job Corps program for 30 days and for 60 days after initial 
    placement in the program.
        (3) Report.--The Secretary shall collect, and annually submit a 
    report to the appropriate committees of Congress containing 
    information on the performance of each Job Corps center, and the 
    Job Corps program, on the core performance measures, as compared to 
    the expected performance level for each performance measure. The 
    report shall also contain information on the performance of the 
    service providers described in paragraph (2) on the performance 
    measures established under such paragraph, as compared to the 
    expected performance levels for the performance measures.
    (d) Additional Information.--The Secretary shall also collect, and 
submit in the report described in subsection (c), information on the 
performance of each Job Corps center, and the Job Corps program, 
regarding--
        (1) the number of enrollees served;
        (2) the average level of learning gains for graduates and 
    former enrollees;
        (3) the number of former enrollees and graduates who entered 
    the Armed Forces;
        (4) the number of former enrollees who entered post- secondary 
    education;
        (5) the number of former enrollees who entered unsubsidized 
    employment related to the vocational training received through the 
    Job Corps program and the number who entered unsubsidized 
    employment not related to the vocational training received;
        (6) the number of former enrollees and graduates who obtained a 
    secondary school diploma or its recognized equivalent;
        (7) the number and percentage of dropouts from the Job Corps 
    program including the number dismissed under the zero tolerance 
    policy described in section 152(b); and
        (8) any additional information required by the Secretary.
    (e) Methods.--The Secretary may collect the information described 
in subsections (c) and (d) using methods described in section 136(f)(2) 
consistent with State law.
    (f) Performance Assessments and Improvements.--
        (1) Assessments.--The Secretary shall conduct an annual 
    assessment of the performance of each Job Corps center. Based on 
    the assessment, the Secretary shall take measures to continuously 
    improve the performance of the Job Corps program.
        (2) Performance improvement plans.--With respect to a Job Corps 
    center that fails to meet the expected levels of performance 
    relating to the core performance measures specified in subsection 
    (c), the Secretary shall develop and implement a performance 
    improvement plan. Such a plan shall require action including--
            (A) providing technical assistance to the center;
            (B) changing the vocational training offered at the center;
            (C) changing the management staff of the center;
            (D) replacing the operator of the center;
            (E) reducing the capacity of the center;
            (F) relocating the center; or
            (G) closing the center.
        (3) Additional performance improvement plans.--In addition to 
    the performance improvement plans required under paragraph (2), the 
    Secretary may develop and implement additional performance 
    improvement plans. Such a plan shall require improvements, 
    including the actions described in paragraph (2), for a Job Corps 
    center that fails to meet criteria established by the Secretary 
    other than the expected levels of performance described in 
    paragraph (2).
    (g) Closure of Job Corps Center.--Prior to the closure of any Job 
Corps center, the Secretary shall ensure--
        (1) that the proposed decision to close the center is announced 
    in advance to the general public through publication in the Federal 
    Register or other appropriate means;
        (2) the establishment of a reasonable comment period, not to 
    exceed 30 days, for interested individuals to submit written 
    comments to the Secretary; and
        (3) that the Member of Congress who represents the district in 
    which such center is located is notified within a reasonable period 
    of time in advance of any final decision to close the center.

SEC. 160. GENERAL PROVISIONS.

    The Secretary is authorized to--
        (1) disseminate, with regard to the provisions of section 3204 
    of title 39, United States Code, data and information in such forms 
    as the Secretary shall determine to be appropriate, to public 
    agencies, private organizations, and the general public;
        (2) subject to section 157(b), collect or compromise all 
    obligations to or held by the Secretary and exercise all legal or 
    equitable rights accruing to the Secretary in connection with the 
    payment of obligations until such time as such obligations may be 
    referred to the Attorney General for suit or collection; and
        (3) expend funds made available for purposes of this subtitle--
            (A) for printing and binding, in accordance with applicable 
        law (including regulation); and
            (B) without regard to any other law (including regulation), 
        for rent of buildings and space in buildings and for repair, 
        alteration, and improvement of buildings and space in buildings 
        rented by the Secretary, except that the Secretary shall not 
        expend funds under the authority of this subparagraph--
                (i) except when necessary to obtain an item, service, 
            or facility, that is required in the proper administration 
            of this subtitle, and that otherwise could not be obtained, 
            or could not be obtained in the quantity or quality needed, 
            or at the time, in the form, or under the conditions in 
            which the item, service, or facility is needed; and
                (ii) prior to having given written notification to the 
            Administrator of General Services (if the expenditure would 
            affect an activity that otherwise would be under the 
            jurisdiction of the General Services Administration) of the 
            intention of the Secretary to make the expenditure, and the 
            reasons and justifications for the expenditure.

SEC. 161. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this subtitle 
such sums as may be necessary for each of the fiscal years 1999 through 
2003.

                     Subtitle D--National Programs

SEC. 166. NATIVE AMERICAN PROGRAMS.

    (a) Purpose.--
        (1) In general.--The purpose of this section is to support 
    employment and training activities for Indian, Alaska Native, and 
    Native Hawaiian individuals in order--
            (A) to develop more fully the academic, occupational, and 
        literacy skills of such individuals;
            (B) to make such individuals more competitive in the 
        workforce; and
            (C) to promote the economic and social development of 
        Indian, Alaska Native, and Native Hawaiian communities in 
        accordance with the goals and values of such communities.
        (2) Indian policy.--All programs assisted under this section 
    shall be administered in a manner consistent with the principles of 
    the Indian Self-Determination and Education Assistance Act (25 
    U.S.C. 450 et seq.) and the government-to-government relationship 
    between the Federal Government and Indian tribal governments.
    (b) Definitions.--As used in this section:
        (1) Alaska native.--The term ``Alaska Native'' means a Native 
    as such term is defined in section 3(b) of the Alaska Native Claims 
    Settlement Act (43 U.S.C. 1602(b)).
        (2) Indian, indian tribe, and tribal organization.--The terms 
    ``Indian'', ``Indian tribe'', and ``tribal organization'' have the 
    meanings given such terms in subsections (d), (e), and (l), 
    respectively, of section 4 of the Indian Self-Determination and 
    Education Assistance Act (25 U.S.C. 450b).
        (3) Native hawaiian and native hawaiian organization.--The 
    terms ``Native Hawaiian'' and ``Native Hawaiian organization'' have 
    the meanings given such terms in paragraphs (1) and (3), 
    respectively, of section 9212 of the Native Hawaiian Education Act 
    (20 U.S.C. 7912).
    (c) Program Authorized.--
        (1) In general.--The Secretary shall, on a competitive basis, 
    make grants to, or enter into contracts or cooperative agreements 
    with, Indian tribes, tribal organizations, Alaska Native entities, 
    Indian-controlled organizations serving Indians, or Native Hawaiian 
    organizations to carry out the authorized activities described in 
    subsection (d).
        (2) Exception.--The competition for grants, contracts, or 
    cooperative agreements conducted under paragraph (1) shall be 
    conducted every 2 years, except that if a recipient of such a 
    grant, contract, or agreement has performed satisfactorily, the 
    Secretary may waive the requirements for such competition on 
    receipt from the recipient of a satisfactory 2-year program plan 
    for the succeeding 2-year period of the grant, contract, or 
    agreement.
    (d) Authorized Activities.--
        (1) In general.--Funds made available under subsection (c) 
    shall be used to carry out the activities described in paragraph 
    (2) that--
            (A) are consistent with this section; and
            (B) are necessary to meet the needs of Indians or Native 
        Hawaiians preparing to enter, reenter, or retain unsubsidized 
        employment.
        (2) Workforce investment activities and supplemental 
    services.--
            (A) In general.--Funds made available under subsection (c) 
        shall be used for--
                (i) comprehensive workforce investment activities for 
            Indians or Native Hawaiians; or
                (ii) supplemental services for Indian or Native 
            Hawaiian youth on or near Indian reservations and in 
            Oklahoma, Alaska, or Hawaii.
            (B) Special rule.--Notwithstanding any other provision of 
        this section, individuals who were eligible to participate in 
        programs under section 401 of the Job Training Partnership Act 
        (29 U.S.C. 1671) (as such section was in effect on the day 
        before the date of enactment of this Act) shall be eligible to 
        participate in an activity assisted under this section.
    (e) Program Plan.--In order to receive a grant or enter into a 
contract or cooperative agreement under this section an entity 
described in subsection (c) shall submit to the Secretary a program 
plan that describes a 2-year strategy for meeting the needs of Indian, 
Alaska Native, or Native Hawaiian individuals, as appropriate, in the 
area served by such entity. Such plan shall--
        (1) be consistent with the purpose of this section;
        (2) identify the population to be served;
        (3) identify the education and employment needs of the 
    population to be served and the manner in which the activities to 
    be provided will strengthen the ability of the individuals served 
    to obtain or retain unsubsidized employment;
        (4) describe the activities to be provided and the manner in 
    which such activities are to be integrated with other appropriate 
    activities; and
        (5) describe, after the entity submitting the plan consults 
    with the Secretary, the performance measures to be used to assess 
    the performance of entities in carrying out the activities assisted 
    under this section.
    (f) Consolidation of Funds.--Each entity receiving assistance under 
subsection (c) may consolidate such assistance with assistance received 
from related programs in accordance with the provisions of the Indian 
Employment, Training and Related Services Demonstration Act of 1992 (25 
U.S.C. 3401 et seq.).
    (g) Nonduplicative and Nonexclusive Services.--Nothing in this 
section shall be construed--
        (1) to limit the eligibility of any entity described in 
    subsection (c) to participate in any activity offered by a State or 
    local entity under this Act; or
        (2) to preclude or discourage any agreement, between any entity 
    described in subsection (c) and any State or local entity, to 
    facilitate the provision of services by such entity or to the 
    population served by such entity.
    (h) Administrative Provisions.--
        (1) Organizational unit established.--The Secretary shall 
    designate a single organizational unit within the Department of 
    Labor that shall have primary responsibility for the administration 
    of the activities authorized under this section.
        (2) Regulations.--The Secretary shall consult with the entities 
    described in subsection (c) in--
            (A) establishing regulations to carry out this section, 
        including performance measures for entities receiving 
        assistance under such subsection, taking into account the 
        economic circumstances of such entities; and
            (B) developing a funding distribution plan that takes into 
        consideration previous levels of funding (prior to the date of 
        enactment of this Act) to such entities.
        (3) Waivers.--
            (A) In general.--With respect to an entity described in 
        subsection (c), the Secretary, notwithstanding any other 
        provision of law, may, pursuant to a request submitted by such 
        entity that meets the requirements established under paragraph 
        (2), waive any of the statutory or regulatory requirements of 
        this title that are inconsistent with the specific needs of the 
        entities described in such subsection, except that the 
        Secretary may not waive requirements relating to wage and labor 
        standards, worker rights, participation and protection of 
        workers and participants, grievance procedures, and judicial 
        review.
            (B) Request and approval.--An entity described in 
        subsection (c) that requests a waiver under subparagraph (A) 
        shall submit a plan to the Secretary to improve the program of 
        workforce investment activities carried out by the entity, 
        which plan shall meet the requirements established by the 
        Secretary and shall be generally consistent with the 
        requirements of section 189(i)(4)(B).
        (4) Advisory council.--
            (A) In general.--Using funds made available to carry out 
        this section, the Secretary shall establish a Native American 
        Employment and Training Council to facilitate the consultation 
        described in paragraph (2).
            (B) Composition.--The Council shall be composed of 
        individuals, appointed by the Secretary, who are 
        representatives of the entities described in subsection (c).
            (C) Duties.--The Council shall advise the Secretary on all 
        aspects of the operation and administration of the programs 
        assisted under this section, including the selection of the 
        individual appointed as the head of the unit established under 
        paragraph (1).
            (D) Personnel matters.--
                (i) Compensation of members.--Members of the Council 
            shall serve without compensation.
                (ii) Travel expenses.--The members of the Council shall 
            be allowed travel expenses, including per diem in lieu of 
            subsistence, at rates authorized for employees of agencies 
            under subchapter I of chapter 57 of title 5, United States 
            Code, while away from their homes or regular places of 
            business in the performance of services for the Council.
                (iii) Administrative support.--The Secretary shall 
            provide the Council with such administrative support as may 
            be necessary to perform the functions of the Council.
            (E) Chairperson.--The Council shall select a chairperson 
        from among its members.
            (F) Meetings.--The Council shall meet not less than twice 
        each year.
            (G) Application.--Section 14 of the Federal Advisory 
        Committee Act (5 U.S.C. App.) shall not apply to the Council.
        (5) Technical assistance.--The Secretary, acting through the 
    unit established under paragraph (1), is authorized to provide 
    technical assistance to entities described in subsection (c) that 
    receive assistance under subsection (c) to enable such entities to 
    improve the activities authorized under this section that are 
    provided by such entities.
        (6) Agreement for certain federally recognized indian tribes to 
    transfer funds to the program.--A federally recognized Indian tribe 
    that administers funds provided under this section and funds 
    provided by more than one State under other sections of this title 
    may enter into an agreement with the Secretary and the Governors of 
    the affected States to transfer the funds provided by the States to 
    the program administered by the tribe under this section.
    (i) Compliance With Single Audit Requirements; Related 
Requirement.--Grants, contracts, and cooperative agreements entered 
into under this section shall be subject to the requirements of chapter 
75 of subtitle V of title 31, United States Code (enacted by the Single 
Audit Act of 1984) and charging of costs under this section shall be 
subject to appropriate circulars issued by the Office of Management and 
Budget.
    (j) Assistance to American Samoans in Hawaii.--
        (1) In general.--Notwithstanding any other provision of law, 
    the Secretary is authorized to provide assistance to American 
    Samoans who reside in Hawaii for the co-location of federally 
    funded and State-funded workforce investment activities.
        (2) Authorization of appropriations.--There are authorized to 
    be appropriated for fiscal year 1999 such sums as may be necessary 
    to carry out this subsection.

SEC. 167. MIGRANT AND SEASONAL FARMWORKER PROGRAMS.

    (a) In General.--Every 2 years, the Secretary shall, on a 
competitive basis, make grants to, or enter into contracts with, 
eligible entities to carry out the activities described in subsection 
(d).
    (b) Eligible Entities.--To be eligible to receive a grant or enter 
into a contract under this section, an entity shall have an 
understanding of the problems of eligible migrant and seasonal 
farmworkers (including dependents), a familiarity with the area to be 
served, and the ability to demonstrate a capacity to administer 
effectively a diversified program of workforce investment activities 
(including youth activities) and related assistance for eligible 
migrant and seasonal farmworkers.
    (c) Program Plan.--
        (1) In general.--To be eligible to receive a grant or enter 
    into a contract under this section, an entity described in 
    subsection (b) shall submit to the Secretary a plan that describes 
    a 2-year strategy for meeting the needs of eligible migrant and 
    seasonal farmworkers in the area to be served by such entity.
        (2) Contents.--Such plan shall--
            (A) identify the education and employment needs of the 
        population to be served and the manner in which the services to 
        be provided will strengthen the ability of the eligible migrant 
        and seasonal farmworkers and dependents to obtain or retain 
        unsubsidized employment or stabilize their unsubsidized 
        employment;
            (B) describe the related assistance and supportive services 
        to be provided and the manner in which such assistance and 
        services are to be integrated and coordinated with other 
        appropriate services; and
            (C) describe the indicators of performance to be used to 
        assess the performance of such entity in carrying out the 
        activities assisted under this section.
        (3) Administration.--Grants and contracts awarded under this 
    section shall be centrally administered by the Department of Labor 
    and competitively awarded by the Secretary using procedures 
    consistent with standard Federal Government competitive procurement 
    policies.
        (4) Competition.--
            (A) In general.--The competition for grants made and 
        contracts entered into under this section shall be conducted 
        every 2 years.
            (B) Exception.--Notwithstanding subparagraph (A), if a 
        recipient of such a grant or contract has performed 
        satisfactorily under the terms of the grant agreement or 
        contract, the Secretary may waive the requirement for such 
        competition for such recipient upon receipt from the recipient 
        of a satisfactory 2-year plan described in paragraph (1) for 
        the succeeding 2-year grant or contract period. The Secretary 
        may exercise the waiver authority of the preceding sentence not 
        more than once during any 4-year period with respect to any 
        single recipient.
    (d) Authorized Activities.--Funds made available under this section 
shall be used to carry out workforce investment activities (including 
youth activities) and provide related assistance for eligible migrant 
and seasonal farmworkers, which may include employment, training, 
educational assistance, literacy assistance, an English language 
program, worker safety training, housing, supportive services, dropout 
prevention activities, followup services for those individuals placed 
in employment, self-employment and related business enterprise 
development education as needed by eligible migrant and seasonal 
farmworkers and identified pursuant to the plan required by subsection 
(c), and technical assistance relating to capacity enhancement in such 
areas as management information technology.
    (e) Consultation With Governors and Local Boards.--In making grants 
and entering into contracts under this section, the Secretary shall 
consult with the Governors and local boards of the States in which the 
eligible entities will carry out the activities described in subsection 
(d).
    (f) Regulations.--The Secretary shall consult with eligible migrant 
and seasonal farmworkers groups and States in establishing regulations 
to carry out this section, including performance measures for eligible 
entities that take into account the economic circumstances and 
demographics of eligible migrant and seasonal farmworkers.
    (g) Compliance With Single Audit Requirements; Related 
Requirement.--Grants and contracts entered into under this section 
shall be subject to the requirements of chapter 75 of subtitle V of 
title 31, United States Code (enacted by the Single Audit Act of 1984) 
and charging of costs under this section shall be subject to 
appropriate circulars issued by the Office of Management and Budget.
    (h) Definitions.--In this section:
        (1) Disadvantaged.--The term ``disadvantaged'', used with 
    respect to a farmworker, means a farmworker whose income, for 12 
    consecutive months out of the 24 months prior to application for 
    the program involved, does not exceed the higher of--
            (A) the poverty line (as defined in section 334(a)(2)(B)) 
        for an equivalent period; or
            (B) 70 percent of the lower living standard income level, 
        for an equivalent period.
        (2) Eligible migrant and seasonal farmworkers.--The term 
    ``eligible migrant and seasonal farmworkers'' means individuals who 
    are eligible migrant farmworkers or are eligible seasonal 
    farmworkers.
        (3) Eligible migrant farmworker.--The term ``eligible migrant 
    farmworker'' means--
            (A) an eligible seasonal farmworker described in paragraph 
        (4)(A) whose agricultural labor requires travel to a job site 
        such that the farmworker is unable to return to a permanent 
        place of residence within the same day; and
            (B) a dependent of the farmworker described in subparagraph 
        (A).
        (4) Eligible seasonal farmworker.--The term ``eligible seasonal 
    farmworker'' means--
            (A) a disadvantaged person who, for 12 consecutive months 
        out of the 24 months prior to application for the program 
        involved, has been primarily employed in agricultural labor 
        that is characterized by chronic unemployment or 
        underemployment; and
            (B) a dependent of the person described in subparagraph 
        (A).

SEC. 168. VETERANS' WORKFORCE INVESTMENT PROGRAMS.

    (a) Authorization.--
        (1) In general.--The Secretary shall conduct, directly or 
    through grants or contracts, programs to meet the needs for 
    workforce investment activities of veterans with service-connected 
    disabilities, veterans who have significant barriers to employment, 
    veterans who served on active duty in the armed forces during a war 
    or in a campaign or expedition for which a campaign badge has been 
    authorized, and recently separated veterans.
        (2) Conduct of programs.--Programs supported under this section 
    may be conducted through grants and contracts with public agencies 
    and private nonprofit organizations, including recipients of 
    Federal assistance under other provisions of this title, that the 
    Secretary determines have an understanding of the unemployment 
    problems of veterans described in paragraph (1), familiarity with 
    the area to be served, and the capability to administer effectively 
    a program of workforce investment activities for such veterans.
        (3) Required activities.--Programs supported under this section 
    shall include--
            (A) activities to enhance services provided to veterans by 
        other providers of workforce investment activities funded by 
        Federal, State, or local government;
            (B) activities to provide workforce investment activities 
        to such veterans that are not adequately provided by other 
        public providers of workforce investment activities; and
            (C) outreach and public information activities to develop 
        and promote maximum job and job training opportunities for such 
        veterans and to inform such veterans about employment, job 
        training, on-the-job training and educational opportunities 
        under this title, under title 38, United States Code, and under 
        other provisions of law, which activities shall be coordinated 
        with activities provided through the one-stop centers described 
        in section 134(c).
    (b) Administration of Programs.--
        (1) In general.--The Secretary shall administer programs 
    supported under this section through the Assistant Secretary for 
    Veterans' Employment and Training.
        (2) Additional responsibilities.--In carrying out 
    responsibilities under this section, the Assistant Secretary for 
    Veterans' Employment and Training shall--
            (A) be responsible for the awarding of grants and contracts 
        and the distribution of funds under this section and for the 
        establishment of appropriate fiscal controls, accountability, 
        and program performance measures for recipients of grants and 
        contracts under this section; and
            (B) consult with the Secretary of Veterans Affairs and take 
        steps to ensure that programs supported under this section are 
        coordinated, to the maximum extent feasible, with related 
        programs and activities conducted under title 38, United States 
        Code, including programs and activities conducted under 
        subchapter II of chapter 77 of such title, chapters 30, 31, 32, 
        and 34 of such title, and sections 1712A, 1720A, 3687, and 
        4103A of such title.

SEC. 169. YOUTH OPPORTUNITY GRANTS.

    (a) Grants.--
        (1) In general.--Using funds made available under section 
    127(b)(1)(A), the Secretary shall make grants to eligible local 
    boards and eligible entities described in subsection (d) to provide 
    activities described in subsection (b) for youth to increase the 
    long-term employment of youth who live in empowerment zones, 
    enterprise communities, and high poverty areas and who seek 
    assistance.
        (2) Definition.--In this section, the term ``youth'' means an 
    individual who is not less than age 14 and not more than age 21.
        (3) Grant period.--The Secretary may make a grant under this 
    section for a 1-year period, and may renew the grant for each of 
    the 4 succeeding years.
        (4) Grant awards.--In making grants under this section, the 
    Secretary shall ensure that grants are distributed equitably among 
    local boards and entities serving urban areas and local boards and 
    entities serving rural areas, taking into consideration the poverty 
    rate in such urban and rural areas, as described in subsection 
    (c)(3)(B).
    (b) Use of Funds.--
        (1) In general.--A local board or entity that receives a grant 
    under this section shall use the funds made available through the 
    grant to provide activities that meet the requirements of section 
    129, except as provided in paragraph (2), as well as youth 
    development activities such as activities relating to leadership 
    development, citizenship, and community service, and recreation 
    activities.
        (2) Intensive placement and followup services.--In providing 
    activities under this section, a local board or entity shall 
    provide--
            (A) intensive placement services; and
            (B) followup services for not less than 24 months after the 
        completion of participation in the other activities described 
        in this subsection, as appropriate.
    (c) Eligible Local Boards.--To be eligible to receive a grant under 
this section, a local board shall serve a community that--
        (1) has been designated as an empowerment zone or enterprise 
    community under section 1391 of the Internal Revenue Code of 1986;
        (2)(A) is a State without a zone or community described in 
    paragraph (1); and
        (B) has been designated as a high poverty area by the Governor 
    of the State; or
        (3) is 1 of 2 areas in a State that--
            (A) have been designated by the Governor as areas for which 
        a local board may apply for a grant under this section; and
            (B) meet the poverty rate criteria set forth in subsections 
        (a)(4), (b), and (d) of section 1392 of the Internal Revenue 
        Code of 1986.
    (d) Eligible Entities.--To be eligible to receive a grant under 
this section, an entity (other than a local board) shall--
        (1) be a recipient of financial assistance under section 166; 
    and
        (2) serve a community that--
            (A) meets the poverty rate criteria set forth in 
        subsections (a)(4), (b), and (d) of section 1392 of the 
        Internal Revenue Code of 1986; and
            (B) is located on an Indian reservation or serves Oklahoma 
        Indians or Alaska Native villages or Native groups (as such 
        terms are defined in section 3 of the Alaska Native Claims 
        Settlement Act (43 U.S.C. 1602)).
    (e) Application.--To be eligible to receive a grant under this 
section, a local board or entity shall submit an application to the 
Secretary at such time, in such manner, and containing such information 
as the Secretary may require, including--
        (1) a description of the activities that the local board or 
    entity will provide under this section to youth in the community 
    described in subsection (c);
        (2) a description of the performance measures negotiated under 
    subsection (f), and the manner in which the local boards or 
    entities will carry out the activities to meet the performance 
    measures;
        (3) a description of the manner in which the activities will be 
    linked to activities described in section 129; and
        (4) a description of the community support, including financial 
    support through leveraging additional public and private resources, 
    for the activities.
    (f) Performance Measures.--
        (1) In general.--The Secretary shall negotiate and reach 
    agreement with the local board or entity on performance measures 
    for the indicators of performance referred to in subparagraphs (A) 
    and (B) of section 136(b)(2) that will be used to evaluate the 
    performance of the local board or entity in carrying out the 
    activities described in subsection (b). Each local performance 
    measure shall consist of such a indicator of performance, and a 
    performance level referred to in paragraph (2).
        (2) Performance levels.--The Secretary shall negotiate and 
    reach agreement with the local board or entity regarding the levels 
    of performance expected to be achieved by the local board or entity 
    on the indicators of performance.
    (g) Role Model Academy Project.--
        (1) In general.--Using the funds made available pursuant to 
    section 127(b)(1)(A)(iv) for fiscal year 1999, the Secretary shall 
    provide assistance to an entity to carry out a project establishing 
    a role model academy for out-of-school youth.
        (2) Residential center.--The entity shall use the assistance to 
    establish an academy that consists of a residential center located 
    on the site of a military installation closed or realigned pursuant 
    to a law providing for closures and realignments of such 
    installations.
        (3) Services.--The academy established pursuant to this 
    subsection shall provide services that--
            (A) utilize a military style model that emphasizes 
        leadership skills and discipline, or another model of 
        demonstrated effectiveness; and
            (B) include vocational training, secondary school course 
        work leading to a secondary school diploma or recognized 
        equivalent, and the use of mentors who serve as role models and 
        who provide academic training and career counseling to the 
        youth.

SEC. 170. TECHNICAL ASSISTANCE.

    (a) General Technical Assistance.--
        (1) In general.--The Secretary shall provide, coordinate, and 
    support the development of, appropriate training, technical 
    assistance, staff development, and other activities, including 
    assistance in replicating programs of demonstrated effectiveness, 
    to States and localities, and, in particular, to assist States in 
    making transitions from carrying out activities under the 
    provisions of law repealed under section 199 to carry out 
    activities under this title.
        (2) Form of assistance.--In carrying out paragraph (1) on 
    behalf of a State, or recipient of financial assistance under any 
    of sections 166 through 169, the Secretary, after consultation with 
    the State or grant recipient, may award grants and enter into 
    contracts and cooperative agreements.
        (3) Limitation.--Grants or contracts awarded under paragraph 
    (1) to entities other than States or local units of government that 
    are for amounts in excess of $100,000 shall only be awarded on a 
    competitive basis.
    (b) Dislocated Worker Technical Assistance.--
        (1) Authority.--Of the amounts available pursuant to section 
    132(a)(2), the Secretary shall reserve not more than 5 percent of 
    such amounts to provide technical assistance to States that do not 
    meet the State performance measures described in section 136 with 
    respect to employment and training activities for dislocated 
    workers. Using such reserved funds, the Secretary may provide such 
    assistance to other States, local areas, and other entities 
    involved in providing assistance to dislocated workers, to promote 
    the continuous improvement of assistance provided to dislocated 
    workers, under this title.
        (2) Training.--Amounts reserved under this subsection may be 
    used to provide for the training of staff, including specialists, 
    who provide rapid response services. Such training shall include 
    instruction in proven methods of promoting, establishing, and 
    assisting labor-management committees. Such projects shall be 
    administered through the dislocated worker office described in 
    section 174(b).

SEC. 171. DEMONSTRATION, PILOT, MULTISERVICE, RESEARCH, AND MULTISTATE 
              PROJECTS.

    (a) Strategic Plan.--
        (1) In general.--After consultation with States, localities, 
    and other interested parties, the Secretary shall, every 2 years, 
    publish in the Federal Register, a plan that describes the 
    demonstration and pilot (including dislocated worker demonstration 
    and pilot), multiservice, research, and multistate project 
    priorities of the Department of Labor concerning employment and 
    training for the 5-year period following the submission of the 
    plan. Copies of the plan shall be transmitted to the appropriate 
    committees of Congress.
        (2) Factors.--The plan published under paragraph (1) shall 
    contain strategies to address national employment and training 
    problems and take into account factors such as--
            (A) the availability of existing research (as of the date 
        of the publication);
            (B) the need to ensure results that have interstate 
        validity;
            (C) the benefits of economies of scale and the efficiency 
        of proposed projects; and
            (D) the likelihood that the results of the projects will be 
        useful to policymakers and stakeholders in addressing 
        employment and training problems.
    (b) Demonstration and Pilot Projects.--
        (1) In general.--Under a plan published under subsection (a), 
    the Secretary shall, through grants or contracts, carry out 
    demonstration and pilot projects for the purpose of developing and 
    implementing techniques and approaches, and demonstrating the 
    effectiveness of specialized methods, in addressing employment and 
    training needs. Such projects shall include the provision of direct 
    services to individuals to enhance employment opportunities and an 
    evaluation component and may include--
            (A) the establishment of advanced manufacturing technology 
        skill centers developed through local partnerships of industry, 
        labor, education, community-based organizations, and economic 
        development organizations to meet unmet, high-tech skill needs 
        of local communities;
            (B) projects that provide training to upgrade the skills of 
        employed workers who reside and are employed in enterprise 
        communities or empowerment zones;
            (C) programs conducted jointly with the Department of 
        Defense to develop training programs utilizing computer-based 
        and other innovative learning technologies;
            (D) projects that promote the use of distance learning, 
        enabling students to take courses through the use of media 
        technology such as videos, teleconferencing computers, and the 
        Internet;
            (E) projects that assist in providing comprehensive 
        services to increase the employment rates of out-of-school 
        youth residing in targeted high poverty areas within 
        empowerment zones and enterprise communities;
            (F) the establishment of partnerships with national 
        organizations with special expertise in developing, organizing, 
        and administering employment and training services, for 
        individuals with disabilities, at the national, State, and 
        local levels;
            (G) projects to assist public housing authorities that 
        provide, to public housing residents, job training programs 
        that demonstrate success in upgrading the job skills and 
        promoting employment of the residents; and
            (H) projects that assist local areas to develop and 
        implement local self-sufficiency standards to evaluate the 
        degree to which participants in programs under this title are 
        achieving self-sufficiency.
        (2) Limitations.--
            (A) Competitive awards.--Grants or contracts awarded for 
        carrying out demonstration and pilot projects under this 
        subsection shall be awarded only on a competitive basis, except 
        that a noncompetitive award may be made in the case of a 
        project that is funded jointly with other public or private 
        sector entities that provide a portion of the funding for the 
        project.
            (B) Eligible entities.--Grants or contracts may be awarded 
        under this subsection only to--
                (i) entities with recognized expertise in--

                    (I) conducting national demonstration projects;
                    (II) utilizing state-of-the-art demonstration 
                methods; or
                    (III) conducting evaluations of workforce 
                investment projects; or

                (ii) State and local entities with expertise in 
            operating or overseeing workforce investment programs.
            (C) Time limits.--The Secretary shall establish appropriate 
        time limits for carrying out demonstration and pilot projects 
        under this subsection.
    (c) Multiservice Projects, Research Projects, and Multistate 
Projects.--
        (1) Multiservice projects.--Under a plan published under 
    subsection (a), the Secretary shall, through grants or contracts, 
    carry out multiservice projects--
            (A) that will test an array of approaches to the provision 
        of employment and training services to a variety of targeted 
        populations;
            (B) in which the entity carrying out the project, in 
        conjunction with employers, organized labor, and other groups 
        such as the disability community, will design, develop, and 
        test various training approaches in order to determine 
        effective practices; and
            (C) that will assist in the development and replication of 
        effective service delivery strategies for targeted populations 
        for the national employment and training system as a whole.
        (2) Research projects.--
            (A) In general.--Under a plan published under subsection 
        (a), the Secretary shall, through grants or contracts, carry 
        out research projects that will contribute to the solution of 
        employment and training problems in the United States.
            (B) Formula improvement study and report.--
                (i) Study.--The Secretary shall conduct a 2-year study 
            concerning improvements in the formulas described in 
            section 132(b)(1)(B) and paragraphs (2)(A) and (3) of 
            section 133(b) (regarding distributing funds under subtitle 
            B to States and local areas for adult employment and 
            training activities). In conducting the study, the 
            Secretary shall examine means of improving the formulas 
            by--

                    (I) developing formulas based on statistically 
                reliable data;
                    (II) developing formulas that are consistent with 
                the goals and objectives of this title; and
                    (III) developing formulas based on organizational 
                and financial stability of State boards and local 
                boards.

                (ii) Report.--The Secretary shall prepare and submit to 
            Congress a report containing the results of the study, 
            including recommendations for improved formulas.
        (3) Multistate projects.--
            (A) In general.--
                (i) Authority.--Under a plan published under subsection 
            (a), the Secretary may, through grants or contracts, carry 
            out multistate projects that require demonstrated expertise 
            that is available at the national level to effectively 
            disseminate best practices and models for implementing 
            employment and training services, address the specialized 
            employment and training needs of particular service 
            populations, or address industry-wide skill shortages.
                (ii) Design of grants.--Grants or contracts awarded 
            under this subsection shall be designed to obtain 
            information relating to the provision of services under 
            different economic conditions or to various demographic 
            groups in order to provide guidance at the national and 
            State levels about how best to administer specific 
            employment and training services.
        (4) Limitations.--
            (A) Competitive awards.--Grants or contracts awarded for 
        carrying out projects under this subsection in amounts that 
        exceed $100,000 shall be awarded only on a competitive basis, 
        except that a noncompetitive award may be made in the case of a 
        project that is funded jointly with other public or private 
        sector entities that provide a substantial portion of 
        assistance under the grant or contract for the project.
            (B) Time limits.--A grant or contract shall not be awarded 
        under this subsection to the same organization for more than 3 
        consecutive years unless such grant or contract is 
        competitively reevaluated within such period.
            (C) Peer review.--
                (i) In general.--The Secretary shall utilize a peer 
            review process--

                    (I) to review and evaluate all applications for 
                grants in amounts that exceed $500,000 that are 
                submitted under this section; and
                    (II) to review and designate exemplary and 
                promising programs under this section.

                (ii) Availability of funds.--The Secretary is 
            authorized to use funds provided under this section to 
            carry out peer review activities under this subparagraph.
            (D) Priority.--In awarding grants or contracts under this 
        subsection, priority shall be provided to entities with 
        nationally recognized expertise in the methods, techniques, and 
        knowledge of workforce investment activities and shall include 
        appropriate time limits, established by the Secretary, for the 
        duration of such projects.
    (d) Dislocated Worker Projects.--Of the amount made available 
pursuant to section 132(a)(2)(A) for any program year, the Secretary 
shall use not more than 10 percent of such amount to carry out 
demonstration and pilot projects, multiservice projects, and multistate 
projects, relating to the employment and training needs of dislocated 
workers. Of the requirements of this section, such projects shall be 
subject only to the provisions relating to review and evaluation of 
applications under subsection (c)(4)(C). Such projects may include 
demonstration and pilot projects relating to promoting self-employment, 
promoting job creation, averting dislocations, assisting dislocated 
farmers, assisting dislocated fishermen, and promoting public works. 
Such projects shall be administered through the dislocated worker 
office described in section 173(b).

SEC. 172. EVALUATIONS.

    (a) Programs and Activities Carried Out Under This Title.--For the 
purpose of improving the management and effectiveness of programs and 
activities carried out under this title, the Secretary shall provide 
for the continuing evaluation of the programs and activities, including 
those programs and activities carried out under section 171. Such 
evaluations shall address--
        (1) the general effectiveness of such programs and activities 
    in relation to their cost, including the extent to which the 
    programs and activities--
            (A) improve the employment competencies of participants in 
        comparison to comparably-situated individuals who did not 
        participate in such programs and activities; and
            (B) to the extent feasible, increase the level of total 
        employment over the level that would have existed in the 
        absence of such programs and activities;
        (2) the effectiveness of the performance measures relating to 
    such programs and activities;
        (3) the effectiveness of the structure and mechanisms for 
    delivery of services through such programs and activities;
        (4) the impact of the programs and activities on the community 
    and participants involved;
        (5) the impact of such programs and activities on related 
    programs and activities;
        (6) the extent to which such programs and activities meet the 
    needs of various demographic groups; and
        (7) such other factors as may be appropriate.
    (b) Other Programs and Activities.--The Secretary may conduct 
evaluations of other federally funded employment-related programs and 
activities under other provisions of law.
    (c) Techniques.--Evaluations conducted under this section shall 
utilize appropriate methodology and research designs, including the use 
of control groups chosen by scientific random assignment methodologies. 
The Secretary shall conduct as least 1 multisite control group 
evaluation under this section by the end of fiscal year 2005.
    (d) Reports.--The entity carrying out an evaluation described in 
subsection (a) or (b) shall prepare and submit to the Secretary a draft 
report and a final report containing the results of the evaluation.
    (e) Reports to Congress.--Not later than 30 days after the 
completion of such a draft report, the Secretary shall transmit the 
draft report to the Committee on Education and the Workforce of the 
House of Representatives and the Committee on Labor and Human Resources 
of the Senate. Not later than 60 days after the completion of such a 
final report, the Secretary shall transmit the final report to such 
committees of the Congress.
    (f) Coordination.--The Secretary shall ensure the coordination of 
evaluations carried out by States pursuant to section 136(e) with the 
evaluations carried out under this section.

SEC. 173. NATIONAL EMERGENCY GRANTS.

    (a) In General.--The Secretary is authorized to award national 
emergency grants in a timely manner--
        (1) to an entity described in subsection (c) to provide 
    employment and training assistance to workers affected by major 
    economic dislocations, such as plant closures, mass layoffs, or 
    closures and realignments of military installations;
        (2) to provide assistance to the Governor of any State within 
    the boundaries of which is an area that has suffered an emergency 
    or a major disaster as defined in paragraphs (1) and (2), 
    respectively, of section 102 of the Robert T. Stafford Disaster 
    Relief and Emergency Assistance Act (42 U.S.C. 5122 (1) and (2)) 
    (referred to in this section as the ``disaster area'') to provide 
    disaster relief employment in the area; and
        (3) to provide additional assistance to a State or local board 
    for eligible dislocated workers in a case in which the State or 
    local board has expended the funds provided under this section to 
    carry out activities described in paragraphs (1) and (2) and can 
    demonstrate the need for additional funds to provide appropriate 
    services for such workers, in accordance with requirements 
    prescribed by the Secretary.
    (b) Administration.--The Secretary shall designate a dislocated 
worker office to coordinate the functions of the Secretary under this 
title relating to employment and training activities for dislocated 
workers, including activities carried out under the national emergency 
grants.
    (c) Employment and Training Assistance Requirements.--
        (1) Grant recipient eligibility.--
            (A) Application.--To be eligible to receive a grant under 
        subsection (a)(1), an entity shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            (B) Eligible entity.--In this paragraph, the term 
        ``entity'' means a State, a local board, an entity described in 
        section 166(c), entities determined to be eligible by the 
        Governor of the State involved, and other entities that 
        demonstrate to the Secretary the capability to effectively 
        respond to the circumstances relating to particular 
        dislocations.
        (2) Participant eligibility.--
            (A) In general.--In order to be eligible to receive 
        employment and training assistance under a national emergency 
        grant awarded pursuant to subsection (a)(1), an individual 
        shall be--
                (i) a dislocated worker;
                (ii) a civilian employee of the Department of Defense 
            or the Department of Energy employed at a military 
            installation that is being closed, or that will undergo 
            realignment, within the next 24 months after the date of 
            the determination of eligibility;
                (iii) an individual who is employed in a nonmanagerial 
            position with a Department of Defense contractor, who is 
            determined by the Secretary of Defense to be at-risk of 
            termination from employment as a result of reductions in 
            defense expenditures, and whose employer is converting 
            operations from defense to nondefense applications in order 
            to prevent worker layoffs; or
                (iv) a member of the Armed Forces who--

                    (I) was on active duty or full-time National Guard 
                duty;
                    (II)(aa) is involuntarily separated (as defined in 
                section 1141 of title 10, United States Code) from 
                active duty or full-time National Guard duty; or
                    (bb) is separated from active duty or full-time 
                National Guard duty pursuant to a special separation 
                benefits program under section 1174a of title 10, 
                United States Code, or the voluntary separation 
                incentive program under section 1175 of that title;
                    (III) is not entitled to retired or retained pay 
                incident to the separation described in subclause (II); 
                and
                    (IV) applies for such employment and training 
                assistance before the end of the 180-day period 
                beginning on the date of that separation.

            (B) Retraining assistance.--The individuals described in 
        subparagraph (A)(iii) shall be eligible for retraining 
        assistance to upgrade skills by obtaining marketable skills 
        needed to support the conversion described in subparagraph 
        (A)(iii).
            (C) Additional requirements.--The Secretary shall establish 
        and publish additional requirements related to eligibility for 
        employment and training assistance under the national emergency 
        grants to ensure effective use of the funds available for this 
        purpose.
            (D) Definitions.--In this paragraph, the terms ``military 
        institution'' and ``realignment'' have the meanings given the 
        terms in section 2910 of the Defense Base Closure and 
        Realignment Act of 1990 (Public Law 101-510; 10 U.S.C. 2687 
        note).
    (d) Disaster Relief Employment Assistance Requirements.--
        (1) In general.--Funds made available under subsection (a)(2)--
            (A) shall be used to provide disaster relief employment on 
        projects that provide food, clothing, shelter, and other 
        humanitarian assistance for disaster victims, and projects 
        regarding demolition, cleaning, repair, renovation, and 
        reconstruction of damaged and destroyed structures, facilities, 
        and lands located within the disaster area;
            (B) may be expended through public and private agencies and 
        organizations engaged in such projects; and
            (C) may be expended to provide employment and training 
        activities.
        (2) Eligibility.--An individual shall be eligible to be offered 
    disaster relief employment under subsection (a)(2) if such 
    individual is a dislocated worker, is a long-term unemployed 
    individual, or is temporarily or permanently laid off as a 
    consequence of the disaster.
        (3) Limitations on disaster relief employment.--No individual 
    shall be employed under subsection (a)(2) for more than 6 months 
    for work related to recovery from a single natural disaster.

SEC. 174. AUTHORIZATION OF APPROPRIATIONS.

    (a) Native American Programs; Migrant and Seasonal Farmworker 
Programs; Veterans' Workforce Investment Programs.--
        (1) In general.--Subject to paragraph (2), there are authorized 
    to be appropriated to carry out sections 166 through 168 such sums 
    as may be necessary for each of the fiscal years 1999 through 2003.
        (2) Reservations.--Of the amount appropriated pursuant to the 
    authorization of appropriations under paragraph (1) for a fiscal 
    year, the Secretary shall--
            (A) reserve not less than $55,000,000 for carrying out 
        section 166;
            (B) reserve not less than $70,000,000 for carrying out 
        section 167; and
            (C) reserve not less than $7,300,000 for carrying out 
        section 168.
    (b) Technical Assistance; Demonstration and Pilot Projects; 
Evaluations; Incentive Grants.--
        (1) In general.--Subject to paragraph (2), there are authorized 
    to be appropriated to carry out sections 170 through 172 and 
    section 503 such sums as may be necessary for each of the fiscal 
    years 1999 through 2003.
        (2) Reservations.--Of the amount appropriated pursuant to the 
    authorization of appropriations under paragraph (1) for a fiscal 
    year, the Secretary shall--
            (A)(i) for fiscal year 1999, reserve up to 40 percent for 
        carrying out section 170 (other than subsection (b) of such 
        section);
            (ii) for fiscal year 2000, reserve up to 25 percent for 
        carrying out section 170 (other than subsection (b) of such 
        section); and
            (iii) for each of the fiscal years 2001 through 2003, 
        reserve up to 20 percent for carrying out section 170 (other 
        than subsection (b) of such section);
            (B)(i) for fiscal year 1999, reserve not less than 50 
        percent for carrying out section 171; and
            (ii) for each of the fiscal years 2000 through 2003, 
        reserve not less than 45 percent for carrying out section 171;
            (C)(i) for fiscal year 1999, reserve not less than 10 
        percent for carrying out section 172; and
            (ii) for each of the fiscal years 2000 through 2003, 
        reserve not less than 10 percent for carrying out section 172; 
        and
            (D)(i) for fiscal year 1999, reserve no funds for carrying 
        out section 503;
            (ii) for fiscal year 2000, reserve up to 20 percent for 
        carrying out section 503; and
            (iii) for each of the fiscal years 2001 through 2003, 
        reserve up to 25 percent for carrying out section 503.

                       Subtitle E--Administration

SEC. 181. REQUIREMENTS AND RESTRICTIONS.

    (a) Benefits.--
        (1) Wages.--
            (A) In general.--Individuals in on-the-job training or 
        individuals employed in activities under this title shall be 
        compensated at the same rates, including periodic increases, as 
        trainees or employees who are similarly situated in similar 
        occupations by the same employer and who have similar training, 
        experience, and skills, and such rates shall be in accordance 
        with applicable law, but in no event less than the higher of 
        the rate specified in section 6(a)(1) of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 206(a)(1)) or the applicable 
        State or local minimum wage law.
            (B) Rule of construction.--The reference in subparagraph 
        (A) to section 6(a)(1) of the Fair Labor Standards Act of 1938 
        (29 U.S.C. 206(a)(1))--
                (i) shall be deemed to be a reference to section 
            6(a)(3) of that Act for individuals in American Samoa; and
                (ii) shall not be applicable for individuals in other 
            territorial jurisdictions in which section 6 of the Fair 
            Labor Standards Act of 1938 does not apply.
        (2) Treatment of allowances, earnings, and payments.--
    Allowances, earnings, and payments to individuals participating in 
    programs under this title shall not be considered as income for the 
    purposes of determining eligibility for and the amount of income 
    transfer and in-kind aid furnished under any Federal or federally 
    assisted program based on need, other than as provided under the 
    Social Security Act (42 U.S.C. 301 et seq.).
    (b) Labor Standards.--
        (1) Limitations on activities that impact wages of employees.--
    No funds provided under this title shall be used to pay the wages 
    of incumbent employees during their participation in economic 
    development activities provided through a statewide workforce 
    investment system.
        (2) Displacement.--
            (A) Prohibition.--A participant in a program or activity 
        authorized under this title (referred to in this section as a 
        ``specified activity'') shall not displace (including a partial 
        displacement, such as a reduction in the hours of nonovertime 
        work, wages, or employment benefits) any currently employed 
        employee (as of the date of the participation).
            (B) Prohibition on impairment of contracts.--A specified 
        activity shall not impair an existing contract for services or 
        collective bargaining agreement, and no such activity that 
        would be inconsistent with the terms of a collective bargaining 
        agreement shall be undertaken without the written concurrence 
        of the labor organization and employer concerned.
        (3) Other prohibitions.--A participant in a specified activity 
    shall not be employed in a job if--
            (A) any other individual is on layoff from the same or any 
        substantially equivalent job;
            (B) the employer has terminated the employment of any 
        regular employee or otherwise reduced the workforce of the 
        employer with the intention of filling the vacancy so created 
        with the participant; or
            (C) the job is created in a promotional line that will 
        infringe in any way upon the promotional opportunities of 
        currently employed individuals (as of the date of the 
        participation).
        (4) Health and safety.--Health and safety standards established 
    under Federal and State law otherwise applicable to working 
    conditions of employees shall be equally applicable to working 
    conditions of participants engaged in specified activities. To the 
    extent that a State workers' compensation law applies, workers' 
    compensation shall be provided to participants on the same basis as 
    the compensation is provided to other individuals in the State in 
    similar employment.
        (5) Employment conditions.--Individuals in on-the-job training 
    or individuals employed in programs and activities under this 
    title, shall be provided benefits and working conditions at the 
    same level and to the same extent as other trainees or employees 
    working a similar length of time and doing the same type of work.
        (6) Opportunity to submit comments.--Interested members of the 
    public, including representatives of businesses and of labor 
    organizations, shall be provided an opportunity to submit comments 
    to the Secretary with respect to programs and activities proposed 
    to be funded under subtitle B.
        (7) No impact on union organizing.--Each recipient of funds 
    under this title shall provide to the Secretary assurances that 
    none of such funds will be used to assist, promote, or deter union 
    organizing.
    (c) Grievance Procedure.--
        (1) In general.--Each State and local area receiving an 
    allotment under this title shall establish and maintain a procedure 
    for grievances or complaints alleging violations of the 
    requirements of this title from participants and other interested 
    or affected parties. Such procedure shall include an opportunity 
    for a hearing and be completed within 60 days after the filing of 
    the grievance or complaint.
        (2) Investigation.--
            (A) In general.--The Secretary shall investigate an 
        allegation of a violation described in paragraph (1) if--
                (i) a decision relating to such violation has not been 
            reached within 60 days after the date of the filing of the 
            grievance or complaint and either party appeals to the 
            Secretary; or
                (ii) a decision relating to such violation has been 
            reached within such 60 days and the party to which such 
            decision is adverse appeals such decision to the Secretary.
            (B) Additional requirement.--The Secretary shall make a 
        final determination relating to an appeal made under 
        subparagraph (A) no later than 120 days after receiving such 
        appeal.
        (3) Remedies.--Remedies that may be imposed under this section 
    for a violation of any requirement of this title shall be limited--
            (A) to suspension or termination of payments under this 
        title;
            (B) to prohibition of placement of a participant with an 
        employer that has violated any requirement under this title;
            (C) where applicable, to reinstatement of an employee, 
        payment of lost wages and benefits, and reestablishment of 
        other relevant terms, conditions, and privileges of employment; 
        and
            (D) where appropriate, to other equitable relief.
        (4) Rule of construction.--Nothing in paragraph (3) shall be 
    construed to prohibit a grievant or complainant from pursuing a 
    remedy authorized under another Federal, State, or local law for a 
    violation of this title.
    (d) Relocation.--
        (1) Prohibition on use of funds to encourage or induce 
    relocation.--No funds provided under this title shall be used, or 
    proposed for use, to encourage or induce the relocation of a 
    business or part of a business if such relocation would result in a 
    loss of employment for any employee of such business at the 
    original location and such original location is within the United 
    States.
        (2) Prohibition on use of funds for customized or skill 
    training and related activities after relocation.--No funds 
    provided under this title for an employment and training activity 
    shall be used for customized or skill training, on-the-job 
    training, or company-specific assessments of job applicants or 
    employees, for any business or part of a business that has 
    relocated, until the date that is 120 days after the date on which 
    such business commences operations at the new location, if the 
    relocation of such business or part of a business results in a loss 
    of employment for any employee of such business at the original 
    location and such original location is within the United States.
        (3) Repayment.--If the Secretary determines that a violation of 
    paragraph (1) or (2) has occurred, the Secretary shall require the 
    State that has violated such paragraph to repay to the United 
    States an amount equal to the amount expended in violation of such 
    paragraph.
    (e) Limitation on Use of Funds.--No funds available under this 
title shall be used for employment generating activities, economic 
development activities, investment in revolving loan funds, 
capitalization of businesses, investment in contract bidding resource 
centers, and similar activities that are not directly related to 
training for eligible individuals under this title. No funds available 
under subtitle B shall be used for foreign travel.
    (f) Testing and Sanctioning for Use of Controlled Substances.--
        (1) In general.--Notwithstanding any other provision of law, a 
    State shall not be prohibited by the Federal Government from--
            (A) testing participants in programs under subtitle B for 
        the use of controlled substances; and
            (B) sanctioning such participants who test positive for the 
        use of such controlled substances.
        (2) Additional requirements.--
            (A) Period of sanction.--In sanctioning participants in 
        programs under subtitle B who test positive for the use of 
        controlled substances--
                (i) with respect to the first occurrence for which a 
            participant tests positive, a State may exclude the 
            participant from the program for a period not to exceed 6 
            months; and
                (ii) with respect to the second occurrence and each 
            subsequent occurrence for which a participant tests 
            positive, a State may exclude the participant from the 
            program for a period not to exceed 2 years.
            (B) Appeal.--The testing of participants and the imposition 
        of sanctions under this subsection shall be subject to 
        expeditious appeal in accordance with due process procedures 
        established by the State.
            (C) Privacy.--A State shall establish procedures for 
        testing participants for the use of controlled substances that 
        ensure a maximum degree of privacy for the participants.
        (4) Funding requirement.--In testing and sanctioning of 
    participants for the use of controlled substances in accordance 
    with this subsection, the only Federal funds that a State may use 
    are the amounts made available for the administration of statewide 
    workforce investment activities under section 134(a)(3)(B).

SEC. 182. PROMPT ALLOCATION OF FUNDS.

    (a) Allotments Based on Latest Available Data.--All allotments to 
States and grants to outlying areas under this title shall be based on 
the latest available data and estimates satisfactory to the Secretary. 
All data relating to disadvantaged adults and disadvantaged youth shall 
be based on the most recent satisfactory data from the Bureau of the 
Census.
    (b) Publication in Federal Register Relating to Formula Funds.--
Whenever the Secretary allots funds required to be allotted under this 
title, the Secretary shall publish in a timely fashion in the Federal 
Register the proposed amount to be distributed to each recipient of the 
funds.
    (c) Requirement for Funds Distributed by Formula.--All funds 
required to be allotted under section 127 or 132 shall be allotted 
within 45 days after the date of enactment of the Act appropriating the 
funds, except that, if such funds are appropriated in advance as 
authorized by section 189(g), such funds shall be allotted or allocated 
not later than the March 31 preceding the program year for which such 
funds are to be available for obligation.
    (d) Publication in Federal Register Relating to Discretionary 
Funds.--Whenever the Secretary utilizes a formula to allot or allocate 
funds made available for distribution at the Secretary's discretion 
under this title, the Secretary shall, not later than 30 days prior to 
such allotment or allocation, publish such formula in the Federal 
Register for comments along with the rationale for the formula and the 
proposed amounts to be distributed to each State and local area. After 
consideration of any comments received, the Secretary shall publish 
final allotments and allocations in the Federal Register.
    (e) Availability of Funds.--Funds shall be made available under 
sections 128 and 133 for a local area not later than 30 days after the 
date the funds are made available to the Governor involved, under 
section 127 or 132 (as the case may be), or 7 days after the date the 
local plan for the area is approved, whichever is later.

SEC. 183. MONITORING.

    (a) In General.--The Secretary is authorized to monitor all 
recipients of financial assistance under this title to determine 
whether the recipients are complying with the provisions of this title, 
including the regulations issued under this title.
    (b) Investigations.--The Secretary may investigate any matter the 
Secretary determines to be necessary to determine the compliance of the 
recipients with this title, including the regulations issued under this 
title. The investigations authorized by this subsection may include 
examining records (including making certified copies of the records), 
questioning employees, and entering any premises or onto any site in 
which any part of a program or activity of such a recipient is 
conducted or in which any of the records of the recipient are kept.
    (c) Additional Requirement.--For the purpose of any investigation 
or hearing conducted under this title by the Secretary, the provisions 
of section 9 of the Federal Trade Commission Act (15 U.S.C. 49) 
(relating to the attendance of witnesses and the production of 
documents) apply to the Secretary, in the same manner and to the same 
extent as the provisions apply to the Federal Trade Commission.

SEC. 184. FISCAL CONTROLS; SANCTIONS.

    (a) Establishment of Fiscal Controls by States.--
        (1) In general.--Each State shall establish such fiscal control 
    and fund accounting procedures as may be necessary to assure the 
    proper disbursal of, and accounting for, Federal funds allocated to 
    local areas under subtitle B. Such procedures shall ensure that all 
    financial transactions carried out under subtitle B are conducted 
    and records maintained in accordance with generally accepted 
    accounting principles applicable in each State.
        (2) Cost principles.--
            (A) In general.--Each State (including the Governor of the 
        State), local area (including the chief elected official for 
        the area), and provider receiving funds under this title shall 
        comply with the applicable uniform cost principles included in 
        the appropriate circulars of the Office of Management and 
        Budget for the type of entity receiving the funds.
            (B) Exception.--The funds made available to a State for 
        administration of statewide workforce investment activities in 
        accordance with section 134(a)(3)(B) shall be allocable to the 
        overall administration of workforce investment activities, but 
        need not be specifically allocable to--
                (i) the administration of adult employment and training 
            activities;
                (ii) the administration of dislocated worker employment 
            and training activities; or
                (iii) the administration of youth activities.
        (3) Uniform administrative requirements.--
            (A) In general.--Each State (including the Governor of the 
        State), local area (including the chief elected official for 
        the area), and provider receiving funds under this title shall 
        comply with the appropriate uniform administrative requirements 
        for grants and agreements applicable for the type of entity 
        receiving the funds, as promulgated in circulars or rules of 
        the Office of Management and Budget.
            (B) Additional requirement.--Procurement transactions under 
        this title between local boards and units of State or local 
        governments shall be conducted only on a cost-reimbursable 
        basis.
        (4) Monitoring.--Each Governor of a State shall conduct on an 
    annual basis onsite monitoring of each local area within the State 
    to ensure compliance with the uniform administrative requirements 
    referred to in paragraph (3).
        (5) Action by governor.--If the Governor determines that a 
    local area is not in compliance with the uniform administrative 
    requirements referred to in paragraph (3), the Governor shall--
            (A) require corrective action to secure prompt compliance; 
        and
            (B) impose the sanctions provided under subsection (b) in 
        the event of failure to take the required corrective action.
        (6) Certification.--The Governor shall, every 2 years, certify 
    to the Secretary that--
            (A) the State has implemented the uniform administrative 
        requirements referred to in paragraph (3);
            (B) the State has monitored local areas to ensure 
        compliance with the uniform administrative requirements as 
        required under paragraph (4); and
            (C) the State has taken appropriate action to secure 
        compliance pursuant to paragraph (5).
        (7) Action by the secretary.--If the Secretary determines that 
    the Governor has not fulfilled the requirements of this subsection, 
    the Secretary shall--
            (A) require corrective action to secure prompt compliance; 
        and
            (B) impose the sanctions provided under subsection (e) in 
        the event of failure of the Governor to take the required 
        appropriate action to secure compliance.
    (b) Substantial Violation.--
        (1) Action by governor.--If, as a result of financial and 
    compliance audits or otherwise, the Governor determines that there 
    is a substantial violation of a specific provision of this title, 
    and corrective action has not been taken, the Governor shall--
            (A) issue a notice of intent to revoke approval of all or 
        part of the local plan affected; or
            (B) impose a reorganization plan, which may include--
                (i) decertifying the local board involved;
                (ii) prohibiting the use of eligible providers;
                (iii) selecting an alternative entity to administer the 
            program for the local area involved;
                (iv) merging the local area into one or more other 
            local areas; or
                (v) making other such changes as the Secretary or 
            Governor determines necessary to secure compliance.
        (2) Appeal.--
            (A) In general.--The actions taken by the Governor pursuant 
        to subparagraphs (A) and (B) of paragraph (1) may be appealed 
        to the Secretary and shall not become effective until--
                (i) the time for appeal has expired; or
                (ii) the Secretary has issued a decision.
            (B) Additional requirement.--The Secretary shall make a 
        final decision under subparagraph (A) not later than 45 days 
        after the receipt of the appeal.
        (3) Action by the secretary.--If the Governor fails to promptly 
    take the actions required under paragraph (1), the Secretary shall 
    take such actions.
    (c) Repayment of Certain Amounts to the United States.--
        (1) In general.--Every recipient of funds under this title 
    shall repay to the United States amounts found not to have been 
    expended in accordance with this title.
        (2) Offset of repayment.--If the Secretary determines that a 
    State has expended funds made available under this title in a 
    manner contrary to the requirements of this title, the Secretary 
    may offset repayment of such expenditures against any other amount 
    to which the State is or may be entitled, except as provided under 
    subsection (d)(1).
        (3) Repayment from deduction by state.--If the Secretary 
    requires a State to repay funds as a result of a determination that 
    a local area of the State has expended funds contrary to the 
    requirements of this title, the Governor of the State may use an 
    amount deducted under paragraph (4) to repay the funds, except as 
    provided under subsection (e)(1).
        (4) Deduction by state.--The Governor may deduct an amount 
    equal to the misexpenditure described in paragraph (3) from 
    subsequent program year allocations to the local area from funds 
    reserved for the administrative costs of the local programs 
    involved, as appropriate.
        (5) Limitations.--A deduction made by a State as described in 
    paragraph (4) shall not be made until such time as the Governor has 
    taken appropriate corrective action to ensure full compliance 
    within such local area with regard to appropriate expenditures of 
    funds under this title.
    (d) Repayment of Amounts.--
        (1) In general.--Each recipient of funds under this title shall 
    be liable to repay the amounts described in subsection (c)(1), from 
    funds other than funds received under this title, upon a 
    determination by the Secretary that the misexpenditure of funds was 
    due to willful disregard of the requirements of this title, gross 
    negligence, failure to observe accepted standards of 
    administration, or a pattern of misexpenditure as described in 
    paragraphs (2) and (3) of subsection (c). No such determination 
    shall be made under this subsection or subsection (c) until notice 
    and opportunity for a fair hearing has been given to the recipient.
        (2) Factors in imposing sanctions.--In determining whether to 
    impose any sanction authorized by this section against a recipient 
    for violations by a subgrantee or contractor of such recipient 
    under this title (including the regulations issued under this 
    title), the Secretary shall first determine whether such recipient 
    has adequately demonstrated that the recipient has--
            (A) established and adhered to an appropriate system for 
        the award and monitoring of grants and contracts with 
        subgrantees and contractors that contains acceptable standards 
        for ensuring accountability;
            (B) entered into a written grant agreement or contract with 
        such subgrantee or contractor that established clear goals and 
        obligations in unambiguous terms;
            (C) acted with due diligence to monitor the implementation 
        of the grant agreement or contract, including the carrying out 
        of the appropriate monitoring activities (including audits) at 
        reasonable intervals; and
            (D) taken prompt and appropriate corrective action upon 
        becoming aware of any evidence of a violation of this title, 
        including regulations issued under this title, by such 
        subgrantee or contractor.
        (3) Waiver.--If the Secretary determines that the recipient has 
    demonstrated substantial compliance with the requirements of 
    paragraph (2), the Secretary may waive the imposition of sanctions 
    authorized by this section upon such recipient. The Secretary is 
    authorized to impose any sanction consistent with the provisions of 
    this title and any applicable Federal or State law directly against 
    any subgrantee or contractor for violation of this title, including 
    regulations issued under this title.
    (e) Immediate Termination or Suspension of Assistance in Emergency 
Situations.--In emergency situations, if the Secretary determines it is 
necessary to protect the integrity of the funds or ensure the proper 
operation of the program or activity involved, the Secretary may 
immediately terminate or suspend financial assistance, in whole or in 
part, to the recipient if the recipient is given prompt notice and the 
opportunity for a subsequent hearing within 30 days after such 
termination or suspension. The Secretary shall not delegate any of the 
functions or authority specified in this subsection, other than to an 
officer whose appointment is required to be made by and with the advice 
and consent of the Senate.
    (f) Discrimination Against Participants.--If the Secretary 
determines that any recipient under this title has discharged or in any 
other manner discriminated against a participant or against any 
individual in connection with the administration of the program 
involved, or against any individual because such individual has filed 
any complaint or instituted or caused to be instituted any proceeding 
under or related to this title, or has testified or is about to testify 
in any such proceeding or investigation under or related to this title, 
or otherwise unlawfully denied to any individual a benefit to which 
that individual is entitled under the provisions of this title or the 
Secretary's regulations, the Secretary shall, within 30 days, take such 
action or order such corrective measures, as necessary, with respect to 
the recipient or the aggrieved individual, or both.
    (g) Remedies.--The remedies described in this section shall not be 
construed to be the exclusive remedies available for violations 
described in this section.

SEC. 185. REPORTS; RECORDKEEPING; INVESTIGATIONS.

    (a) Reports.--
        (1) In general.--Recipients of funds under this title shall 
    keep records that are sufficient to permit the preparation of 
    reports required by this title and to permit the tracing of funds 
    to a level of expenditure adequate to ensure that the funds have 
    not been spent unlawfully.
        (2) Submission to the secretary.--Every such recipient shall 
    maintain such records and submit such reports, in such form and 
    containing such information, as the Secretary may require regarding 
    the performance of programs and activities carried out under this 
    title. Such records and reports shall be submitted to the Secretary 
    but shall not be required to be submitted more than once each 
    quarter unless specifically requested by Congress or a committee of 
    Congress, in which case an estimate may be provided.
        (3) Maintenance of standardized records.--In order to allow for 
    the preparation of the reports required under subsection (c), such 
    recipients shall maintain standardized records for all individual 
    participants and provide to the Secretary a sufficient number of 
    such records to provide for an adequate analysis of the records.
        (4) Availability to the public.--
            (A) In general.--Except as provided in subparagraph (B), 
        records maintained by such recipients pursuant to this 
        subsection shall be made available to the public upon request.
            (B) Exception.--Subparagraph (A) shall not apply to--
                (i) information, the disclosure of which would 
            constitute a clearly unwarranted invasion of personal 
            privacy; and
                (ii) trade secrets, or commercial or financial 
            information, that is obtained from a person and privileged 
            or confidential.
            (C) Fees to recover costs.--Such recipients may charge fees 
        sufficient to recover costs applicable to the processing of 
        requests for records under subparagraph (A).
    (b) Investigations of Use of Funds.--
        (1) In general.--
            (A) Secretary.--In order to evaluate compliance with the 
        provisions of this title, the Secretary shall conduct, in 
        several States, in each fiscal year, investigations of the use 
        of funds received by recipients under this title.
            (B) Comptroller general of the united states.--In order to 
        ensure compliance with the provisions of this title, the 
        Comptroller General of the United States may conduct 
        investigations of the use of funds received under this title by 
        any recipient.
        (2) Prohibition.--In conducting any investigation under this 
    title, the Secretary or the Comptroller General of the United 
    States may not request the compilation of any information that the 
    recipient is not otherwise required to compile and that is not 
    readily available to such recipient.
        (3) Audits.--
            (A) In general.--In carrying out any audit under this title 
        (other than any initial audit survey or any audit investigating 
        possible criminal or fraudulent conduct), either directly or 
        through grant or contract, the Secretary, the Inspector General 
        of the Department of Labor, or the Comptroller General of the 
        United States shall furnish to the State, recipient, or other 
        entity to be audited, advance notification of the overall 
        objectives and purposes of the audit, and any extensive 
        recordkeeping or data requirements to be met, not later than 14 
        days (or as soon as practicable), prior to the commencement of 
        the audit.
            (B) Notification requirement.--If the scope, objectives, or 
        purposes of the audit change substantially during the course of 
        the audit, the entity being audited shall be notified of the 
        change as soon as practicable.
            (C) Additional requirement.--The reports on the results of 
        such audits shall cite the law, regulation, policy, or other 
        criteria applicable to any finding contained in the reports.
            (D) Rule of construction.--Nothing contained in this title 
        shall be construed so as to be inconsistent with the Inspector 
        General Act of 1978 (5 U.S.C. App.) or government auditing 
        standards issued by the Comptroller General of the United 
        States.
    (c) Accessibility of Reports.--Each State, each local board, and 
each recipient (other than a subrecipient, subgrantee, or contractor of 
a recipient) receiving funds under this title--
        (1) shall make readily accessible such reports concerning its 
    operations and expenditures as shall be prescribed by the 
    Secretary;
        (2) shall prescribe and maintain comparable management 
    information systems, in accordance with guidelines that shall be 
    prescribed by the Secretary, designed to facilitate the uniform 
    compilation, cross tabulation, and analysis of programmatic, 
    participant, and financial data, on statewide, local area, and 
    other appropriate bases, necessary for reporting, monitoring, and 
    evaluating purposes, including data necessary to comply with 
    section 188; and
        (3) shall monitor the performance of providers in complying 
    with the terms of grants, contracts, or other agreements made 
    pursuant to this title.
    (d) Information To Be Included in Reports.--
        (1) In general.--The reports required in subsection (c) shall 
    include information regarding programs and activities carried out 
    under this title pertaining to--
            (A) the relevant demographic characteristics (including 
        race, ethnicity, sex, and age) and other related information 
        regarding participants;
            (B) the programs and activities in which participants are 
        enrolled, and the length of time that participants are engaged 
        in such programs and activities;
            (C) outcomes of the programs and activities for 
        participants, including the occupations of participants, and 
        placement for participants in nontraditional employment;
            (D) specified costs of the programs and activities; and
            (E) information necessary to prepare reports to comply with 
        section 188.
        (2) Additional requirement.--The Secretary shall ensure that 
    all elements of the information required for the reports described 
    in paragraph (1) are defined and reported uniformly.
    (e) Quarterly Financial Reports.--
        (1) In general.--Each local board in the State shall submit 
    quarterly financial reports to the Governor with respect to 
    programs and activities carried out under this title. Such reports 
    shall include information identifying all program and activity 
    costs by cost category in accordance with generally accepted 
    accounting principles and by year of the appropriation involved.
        (2) Additional requirement.--Each State shall submit to the 
    Secretary, on a quarterly basis, a summary of the reports submitted 
    to the Governor pursuant to paragraph (1).
    (f) Maintenance of Additional Records.--Each State and local board 
shall maintain records with respect to programs and activities carried 
out under this title that identify--
        (1) any income or profits earned, including such income or 
    profits earned by subrecipients; and
        (2) any costs incurred (such as stand-in costs) that are 
    otherwise allowable except for funding limitations.
    (g) Cost Categories.--In requiring entities to maintain records of 
costs by category under this title, the Secretary shall require only 
that the costs be categorized as administrative or programmatic costs.

SEC. 186. ADMINISTRATIVE ADJUDICATION.

    (a) In General.--Whenever any applicant for financial assistance 
under this title is dissatisfied because the Secretary has made a 
determination not to award financial assistance in whole or in part to 
such applicant, the applicant may request a hearing before an 
administrative law judge of the Department of Labor. A similar hearing 
may also be requested by any recipient for whom a corrective action has 
been required or a sanction has been imposed by the Secretary under 
section 184.
    (b) Appeal.--The decision of the administrative law judge shall 
constitute final action by the Secretary unless, within 20 days after 
receipt of the decision of the administrative law judge, a party 
dissatisfied with the decision or any part of the decision has filed 
exceptions with the Secretary specifically identifying the procedure, 
fact, law, or policy to which exception is taken. Any exception not 
specifically urged shall be deemed to have been waived. After the 20-
day period the decision of the administrative law judge shall become 
the final decision of the Secretary unless the Secretary, within 30 
days after such filing, has notified the parties that the case involved 
has been accepted for review.
    (c) Time Limit.--Any case accepted for review by the Secretary 
under subsection (b) shall be decided within 180 days after such 
acceptance. If the case is not decided within the 180-day period, the 
decision of the administrative law judge shall become the final 
decision of the Secretary at the end of the 180-day period.
    (d) Additional Requirement.--The provisions of section 187 shall 
apply to any final action of the Secretary under this section.

SEC. 187. JUDICIAL REVIEW.

    (a) Review.--
        (1) Petition.--With respect to any final order by the Secretary 
    under section 186 by which the Secretary awards, declines to award, 
    or only conditionally awards, financial assistance under his title, 
    or any final order of the Secretary under section 186 with respect 
    to a corrective action or sanction imposed under section 184, any 
    party to a proceeding which resulted in such final order may obtain 
    review of such final order in the United States Court of Appeals 
    having jurisdiction over the applicant or recipient of funds 
    involved, by filing a review petition within 30 days after the date 
    of issuance of such final order.
        (2) Action on petition.--The clerk of the court shall transmit 
    a copy of the review petition to the Secretary who shall file the 
    record on which the final order was entered as provided in section 
    2112 of title 28, United States Code. The filing of a review 
    petition shall not stay the order of the Secretary, unless the 
    court orders a stay. Petitions filed under this subsection shall be 
    heard expeditiously, if possible within 10 days after the date of 
    filing of a reply to the petition.
        (3) Standard and scope of review.--No objection to the order of 
    the Secretary shall be considered by the court unless the objection 
    was specifically urged, in a timely manner, before the Secretary. 
    The review shall be limited to questions of law and the findings of 
    fact of the Secretary shall be conclusive if supported by 
    substantial evidence.
    (b) Judgment.--The court shall have jurisdiction to make and enter 
a decree affirming, modifying, or setting aside the order of the 
Secretary in whole or in part. The judgment of the court regarding the 
order shall be final, subject to certiorari review by the Supreme Court 
as provided in section 1254(1) of title 28, United States Code.

SEC. 188. NONDISCRIMINATION.

    (a) In General.--
        (1) Federal financial assistance.--For the purpose of applying 
    the prohibitions against discrimination on the basis of age under 
    the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), on the 
    basis of disability under section 504 of the Rehabilitation Act of 
    1973 (29 U.S.C. 794), on the basis of sex under title IX of the 
    Education Amendments of 1972 (20 U.S.C. 1681 et seq.), or on the 
    basis of race, color, or national origin under title VI of the 
    Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), programs and 
    activities funded or otherwise financially assisted in whole or in 
    part under this Act are considered to be programs and activities 
    receiving Federal financial assistance.
        (2) Prohibition of discrimination regarding participation, 
    benefits, and employment.--No individual shall be excluded from 
    participation in, denied the benefits of, subjected to 
    discrimination under, or denied employment in the administration of 
    or in connection with, any such program or activity because of 
    race, color, religion, sex (except as otherwise permitted under 
    title IX of the Education Amendments of 1972), national origin, 
    age, disability, or political affiliation or belief.
        (3) Prohibition on assistance for facilities for sectarian 
    instruction or religious worship.--Participants shall not be 
    employed under this title to carry out the construction, operation, 
    or maintenance of any part of any facility that is used or to be 
    used for sectarian instruction or as a place for religious worship 
    (except with respect to the maintenance of a facility that is not 
    primarily or inherently devoted to sectarian instruction or 
    religious worship, in a case in which the organization operating 
    the facility is part of a program or activity providing services to 
    participants).
        (4) Prohibition on discrimination on basis of participant 
    status.--No person may discriminate against an individual who is a 
    participant in a program or activity that receives funds under this 
    title, with respect to the terms and conditions affecting, or 
    rights provided to, the individual, solely because of the status of 
    the individual as a participant.
        (5) Prohibition on discrimination against certain 
    noncitizens.--Participation in programs and activities or receiving 
    funds under this title shall be available to citizens and nationals 
    of the United States, lawfully admitted permanent resident aliens, 
    refugees, asylees, and parolees, and other immigrants authorized by 
    the Attorney General to work in the United States.
    (b) Action of Secretary.--Whenever the Secretary finds that a State 
or other recipient of funds under this title has failed to comply with 
a provision of law referred to in subsection (a)(1), or with paragraph 
(2), (3), (4), or (5) of subsection (a), including an applicable 
regulation prescribed to carry out such provision or paragraph, the 
Secretary shall notify such State or recipient and shall request that 
the State or recipient comply. If within a reasonable period of time, 
not to exceed 60 days, the State or recipient fails or refuses to 
comply, the Secretary may--
        (1) refer the matter to the Attorney General with a 
    recommendation that an appropriate civil action be instituted; or
        (2) take such other action as may be provided by law.
    (c) Action of Attorney General.--When a matter is referred to the 
Attorney General pursuant to subsection (b)(1), or whenever the 
Attorney General has reason to believe that a State or other recipient 
of funds under this title is engaged in a pattern or practice of 
discrimination in violation of a provision of law referred to in 
subsection (a)(1) or in violation of paragraph (2), (3), (4), or (5) of 
subsection (a), the Attorney General may bring a civil action in any 
appropriate district court of the United States for such relief as may 
be appropriate, including injunctive relief.
    (d) Job Corps.--For the purposes of this section, Job Corps members 
shall be considered as the ultimate beneficiaries of Federal financial 
assistance.
    (e) Regulations.--The Secretary shall issue regulations necessary 
to implement this section not later than one year after the date of the 
enactment of the Workforce Investment Act of 1998. Such regulations 
shall adopt standards for determining discrimination and procedures for 
enforcement that are consistent with the Acts referred to in a 
subsection (a)(1), as well as procedures to ensure that complaints 
filed under this section and such Acts are processed in a manner that 
avoids duplication of effort.

SEC. 189. ADMINISTRATIVE PROVISIONS.

    (a) In General.--The Secretary may, in accordance with chapter 5 of 
title 5, United States Code, prescribe rules and regulations to carry 
out this title only to the extent necessary to administer and ensure 
compliance with the requirements of this title. Such rules and 
regulations may include provisions making adjustments authorized by 
section 204 of the Intergovernmental Cooperation Act of 1968. All such 
rules and regulations shall be published in the Federal Register at 
least 30 days prior to their effective dates. Copies of each such rule 
or regulation shall be transmitted to the appropriate committees of 
Congress on the date of such publication and shall contain, with 
respect to each material provision of such rule or regulation, a 
citation to the particular substantive section of law that is the basis 
for the provision.
    (b) Acquisition of Certain Property and Services.--The Secretary is 
authorized, in carrying out this title, to accept, purchase, or lease 
in the name of the Department of Labor, and employ or dispose of in 
furtherance of the purposes of this title, any money or property, real, 
personal, or mixed, tangible or intangible, received by gift, devise, 
bequest, or otherwise, and to accept voluntary and uncompensated 
services notwithstanding the provisions of section 1342 of title 31, 
United States Code.
    (c) Authority To Enter Into Certain Agreements and To Make Certain 
Expenditures.--The Secretary may make such grants, enter into such 
contracts or agreements, establish such procedures, and make such 
payments, in installments and in advance or by way of reimbursement, or 
otherwise allocate or expend such funds under this title, as may be 
necessary to carry out this title, including making expenditures for 
construction, repairs, and capital improvements, and including making 
necessary adjustments in payments on account of over-payments or 
underpayments.
    (d) Annual Report.--The Secretary shall prepare and submit to 
Congress an annual report regarding the programs and activities carried 
out under this title. The Secretary shall include in such report--
        (1) a summary of the achievements, failures, and problems of 
    the programs and activities in meeting the objectives of this 
    title;
        (2) a summary of major findings from research, evaluations, 
    pilot projects, and experiments conducted under this title in the 
    fiscal year prior to the submission of the report;
        (3) recommendations for modifications in the programs and 
    activities based on analysis of such findings; and
        (4) such other recommendations for legislative or 
    administrative action as the Secretary determines to be 
    appropriate.
    (e) Utilization of Services and Facilities.--The Secretary is 
authorized, in carrying out this title, under the same procedures as 
are applicable under subsection (c) or to the extent permitted by law 
other than this title, to accept and use the services and facilities of 
departments, agencies, and establishments of the United States. The 
Secretary is also authorized, in carrying out this title, to accept and 
use the services and facilities of the agencies of any State or 
political subdivision of a State, with the consent of the State or 
political subdivision.
    (f) Obligational Authority.--Notwithstanding any other provision of 
this title, the Secretary shall have no authority to enter into 
contracts, grant agreements, or other financial assistance agreements 
under this title except to such extent and in such amounts as are 
provided in advance in appropriations Acts.
    (g) Program Year.--
        (1) In general.--
            (A) Program year.--Except as provided in subparagraph (B), 
        appropriations for any fiscal year for programs and activities 
        carried out under this title shall be available for obligation 
        only on the basis of a program year. The program year shall 
        begin on July 1 in the fiscal year for which the appropriation 
        is made.
            (B) Youth activities.--The Secretary may make available for 
        obligation, beginning April 1 of any fiscal year, funds 
        appropriated for such fiscal year to carry out youth activities 
        under subtitle B.
        (2) Availability.--Funds obligated for any program year for a 
    program or activity carried out under this title may be expended by 
    each State receiving such funds during that program year and the 2 
    succeeding program years. Funds obligated for any program year for 
    a program or activity carried out under section 171 or 172 shall 
    remain available until expended. Funds received by local areas from 
    States under this title during a program year may be expended 
    during that program year and the succeeding program year. No amount 
    of the funds described in this paragraph shall be deobligated on 
    account of a rate of expenditure that is consistent with a State 
    plan, an operating plan described in section 151, or a plan, grant 
    agreement, contract, application, or other agreement described in 
    subtitle D, as appropriate.
    (h) Enforcement of Military Selective Service Act.--The Secretary 
shall ensure that each individual participating in any program or 
activity established under this title, or receiving any assistance or 
benefit under this title, has not violated section 3 of the Military 
Selective Service Act (50 U.S.C. App. 453) by not presenting and 
submitting to registration as required pursuant to such section. The 
Director of the Selective Service System shall cooperate with the 
Secretary to enable the Secretary to carry out this subsection.
    (i) Waivers and Special Rules.--
        (1) Existing waivers.--With respect to a State that has been 
    granted a waiver under the provisions relating to training and 
    employment services of the Department of Labor in title I of the 
    Departments of Labor, Health and Human Services, and Education, and 
    Related Agencies Appropriations Act, 1997 (Public Law 104-208; 110 
    Stat. 3009-234), the authority provided under such waiver shall 
    continue in effect and apply, and include a waiver of the related 
    provisions of subtitle B and this subtitle, for the duration of the 
    initial waiver.
        (2) Special rule regarding designated areas.--A State that has 
    enacted, not later than December 31, 1997, a State law providing 
    for the designation of service delivery areas for the delivery of 
    workforce investment activities, may use such areas as local areas 
    under this title, notwithstanding section 116.
        (3) Special rule regarding sanctions.--A State that enacts, not 
    later than December 31, 1997, a State law providing for the 
    sanctioning of such service delivery areas for failure to meet 
    performance measures for workforce investment activities, may use 
    the State law to sanction local areas for failure to meet State 
    performance measures under this title.
        (4) General waivers of statutory or regulatory requirements.--
            (A) General authority.--Notwithstanding any other provision 
        of law, the Secretary may waive for a State, or a local area in 
        a State, pursuant to a request submitted by the Governor of the 
        State (in consultation with appropriate local elected 
        officials) that meets the requirements of subparagraph (B)--
                (i) any of the statutory or regulatory requirements of 
            subtitle B or this subtitle (except for requirements 
            relating to wage and labor standards, including 
            nondisplacement protections, worker rights, participation 
            and protection of workers and participants, grievance 
            procedures and judicial review, nondiscrimination, 
            allocation of funds to local areas, eligibility of 
            providers or participants, the establishment and functions 
            of local areas and local boards, and procedures for review 
            and approval of plans); and
                (ii) any of the statutory or regulatory requirements of 
            sections 8 through 10 of the Wagner-Peyser Act (29 U.S.C. 
            49g through 49i) (excluding requirements relating to the 
            provision of services to unemployment insurance claimants 
            and veterans, and requirements relating to universal access 
            to basic labor exchange services without cost to 
            jobseekers).
            (B) Requests.--A Governor requesting a waiver under 
        subparagraph (A) shall submit a plan to the Secretary to 
        improve the statewide workforce investment system that--
                (i) identifies the statutory or regulatory requirements 
            that are requested to be waived and the goals that the 
            State or local area in the State, as appropriate, intends 
            to achieve as a result of the waiver;
                (ii) describes the actions that the State or local 
            area, as appropriate, has undertaken to remove State or 
            local statutory or regulatory barriers;
                (iii) describes the goals of the waiver and the 
            expected programmatic outcomes if the request is granted;
                (iv) describes the individuals impacted by the waiver; 
            and
                (v) describes the process used to monitor the progress 
            in implementing such a waiver, and the process by which 
            notice and an opportunity to comment on such request has 
            been provided to the local board.
            (C) Conditions.--Not later than 90 days after the date of 
        the original submission of a request for a waiver under 
        subparagraph (A), the Secretary shall provide a waiver under 
        this paragraph if and only to the extent that--
                (i) the Secretary determines that the requirements 
            requested to be waived impede the ability of the State or 
            local area, as appropriate, to implement the plan described 
            in subparagraph (B); and
                (ii) the State has executed a memorandum of 
            understanding with the Secretary requiring such State to 
            meet, or ensure that the local area meets, agreed-upon 
            outcomes and to implement other appropriate measures to 
            ensure accountability.

SEC. 190. REFERENCE.

    Effective on the date of the enactment of the Workforce Investment 
Act of 1998, all references in any other provision of law (other than 
section 665 of title 18, United States Code) to the Comprehensive 
Employment and Training Act, or to the Job Training Partnership Act, as 
the case may be, shall be deemed to refer to the ``Workforce Investment 
Act of 1998.''.

SEC. 191. STATE LEGISLATIVE AUTHORITY.

    (a) Authority of State Legislature.--Nothing in this title shall be 
interpreted to preclude the enactment of State legislation providing 
for the implementation, consistent with the provisions of this title, 
of the activities assisted under this title. Any funds received by a 
State under this title shall be subject to appropriation by the State 
legislature, consistent with the terms and conditions required under 
this title.
    (b) Interstate Compacts and Cooperative Agreements.--In the event 
that compliance with provisions of this title would be enhanced by 
compacts and cooperative agreements between States, the consent of 
Congress is given to States to enter into such compacts and agreements 
to facilitate such compliance, subject to the approval of the 
Secretary.

SEC. 192. WORKFORCE FLEXIBILITY PLANS.

    (a) Plans.--A State may submit to the Secretary, and the Secretary 
may approve, a workforce flexibility plan under which the State is 
authorized to waive, in accordance with the plan--
        (1) any of the statutory or regulatory requirements applicable 
    under this title to local areas, pursuant to applications for such 
    waivers from the local areas, except for requirements relating to 
    the basic purposes of this title, wage and labor standards, 
    grievance procedures and judicial review, nondiscrimination, 
    eligibility of participants, allocation of funds to local areas, 
    establishment and functions of local areas and local boards, review 
    and approval of local plans, and worker rights, participation, and 
    protection;
        (2) any of the statutory or regulatory requirements applicable 
    under sections 8 through 10 of the Wagner-Peyser Act (29 U.S.C. 49g 
    through 49i), to the State, except for requirements relating to the 
    provision of services to unemployment insurance claimants and 
    veterans, and to universal access to basic labor exchange services 
    without cost to jobseekers; and
        (3) any of the statutory or regulatory requirements applicable 
    under the Older Americans Act of 1965 (42 U.S.C. 3001 et seq.), to 
    State agencies on aging with respect to activities carried out 
    using funds allotted under section 506(a)(3) of such Act (42 U.S.C. 
    3056d(a)(3)), except for requirements relating to the basic 
    purposes of such Act, wage and labor standards, eligibility of 
    participants in the activities, and standards for agreements.
    (b) Content of Plans.--A workforce flexibility plan implemented by 
a State under subsection (a) shall include descriptions of--
        (1)(A) the process by which local areas in the State may submit 
    and obtain approval by the State of applications for waivers of 
    requirements applicable under this title; and
        (B) the requirements described in subparagraph (A) that are 
    likely to be waived by the State under the plan;
        (2) the requirements applicable under sections 8 through 10 of 
    the Wagner-Peyser Act that are proposed to be waived, if any;
        (3) the requirements applicable under the Older Americans Act 
    of 1965 that are proposed to be waived, if any;
        (4) the outcomes to be achieved by the waivers described in 
    paragraphs (1) through (3); and
        (5) other measures to be taken to ensure appropriate 
    accountability for Federal funds in connection with the waivers.
    (c) Periods.--The Secretary may approve a workforce flexibility 
plan for a period of not more than 5 years.
    (d) Opportunity for Public Comments.--Prior to submitting a 
workforce flexibility plan to the Secretary for approval, the State 
shall provide to all interested parties and to the general public 
adequate notice and a reasonable opportunity for comment on the waiver 
requests proposed to be implemented pursuant to such plan.

SEC. 193. USE OF CERTAIN REAL PROPERTY.

    (a) In General.--Notwithstanding any other provision of law, the 
Governor may authorize a public agency to make available, for the use 
of a one-stop service delivery system within the State which is carried 
out by a consortium of entities that includes the public agency, real 
property in which, as of the date of the enactment of the Workforce 
Investment Act of 1998, the Federal Government has acquired equity 
through the use of funds provided under title III of the Social 
Security Act (42 U.S.C. 501 et seq.), section 903(c) of such Act (42 
U.S.C. 1103(c)), or the Wagner-Peyser Act (29 U.S.C. 49 et seq.).
    (b) Use of Funds.--Subsequent to the commencement of the use of the 
property described in subsection (a) for the functions of a one-stop 
service delivery system, funds provided under the provisions of law 
described in subsection (a) may only be used to acquire further equity 
in such property, or to pay operating and maintenance expenses relating 
to such property in proportion to the extent of the use of such 
property attributable to the activities authorized under such 
provisions of law.

SEC. 194. CONTINUATION OF STATE ACTIVITIES AND POLICIES.

    (a) In General.--Notwithstanding any other provision of this title, 
the Secretary may not deny approval of a State plan for a covered 
State, or an application of a covered State for financial assistance, 
under this title or find a covered State (including a State board or 
Governor), or a local area (including a local board or chief elected 
official) in a covered State, in violation of a provision of this 
title, on the basis that--
        (1)(A) the State proposes to allocate or disburse, allocates, 
    or disburses, within the State, funds made available to the State 
    under section 127 or 132 in accordance with the allocation formula 
    for the type of activities involved, or in accordance with a 
    disbursal procedure or process, used by the State under prior 
    consistent State laws; or
        (B) a local board in the State proposes to disburse, or 
    disburses, within the local area, funds made available to a State 
    under section 127 or 132 in accordance with a disbursal procedure 
    or process used by a private industry council under prior 
    consistent State law;
        (2) the State proposes to carry out or carries out a State 
    procedure through which local areas use, as fiscal agents for funds 
    made available to the State under section 127 or 132 and allocated 
    within the State, fiscal agents selected in accordance with a 
    process established under prior consistent State laws;
        (3) the State proposes to carry out or carries out a State 
    procedure through which the local board in the State (or the local 
    boards, the chief elected officials in the State, and the Governor) 
    designate or select the one-stop partners and one-stop operators of 
    the statewide system in the State under prior consistent State 
    laws, in lieu of making the designation, or certification described 
    in section 121 (regardless of the date the one-stop delivery 
    systems involved have been established);
        (4) the State proposes to carry out or carries out a State 
    procedure through which the persons responsible for selecting 
    eligible providers for purposes of subtitle B are permitted to 
    determine that a provider shall not be selected to provide both 
    intake services under section 134(d)(2) and training services under 
    section 134(d)(4), under prior consistent State laws;
        (5) the State proposes to designate or designates a State 
    board, or proposes to assign or assigns functions and roles of the 
    State board (including determining the time periods for development 
    and submission of a State plan required under section 112), for 
    purposes of subtitle B in accordance with prior consistent State 
    laws; or
        (6) a local board in the State proposes to use or carry out, 
    uses, or carries out a local plan (including assigning functions 
    and roles of the local board) for purposes of subtitle B in 
    accordance with the authorities and requirements applicable to 
    local plans and private industry councils under prior consistent 
    State laws.
    (b) Definition.--In this section:
        (1) Covered state.--The term ``covered State'' means a State 
    that enacted State laws described in paragraph (2).
        (2) Prior consistent state laws.--The term ``prior consistent 
    State laws'' means State laws, not inconsistent with the Job 
    Training Partnership Act or any other applicable Federal law, that 
    took effect on September 1, 1993, September 1, 1995, and September 
    1, 1997.

SEC. 195. GENERAL PROGRAM REQUIREMENTS.

    Except as otherwise provided in this title, the following 
conditions are applicable to all programs under this title:
        (1) Each program under this title shall provide employment and 
    training opportunities to those who can benefit from, and who are 
    most in need of, such opportunities. In addition, efforts shall be 
    made to develop programs which contribute to occupational 
    development, upward mobility, development of new careers, and 
    opportunities for nontraditional employment.
        (2) Funds provided under this title shall only be used for 
    activities that are in addition to those that would otherwise be 
    available in the local area in the absence of such funds.
        (3)(A) Any local area may enter into an agreement with another 
    local area (including a local area that is a city or county within 
    the same labor market) to pay or share the cost of educating, 
    training, or placing individuals participating in programs assisted 
    under this title, including the provision of supportive services.
        (B) Such agreement shall be approved by each local board 
    providing guidance to the local area and shall be described in the 
    local plan under section 118.
        (4) On-the-job training contracts under this title shall not be 
    entered into with employers who have received payments under 
    previous contracts and have exhibited a pattern of failing to 
    provide on-the-job training participants with continued long-term 
    employment as regular employees with wages and employment benefits 
    (including health benefits) and working conditions at the same 
    level and to the same extent as other employees working a similar 
    length of time and doing the same type of work.
        (5) No person or organization may charge an individual a fee 
    for the placement or referral of the individual in or to a 
    workforce investment activity under this title.
        (6) The Secretary shall not provide financial assistance for 
    any program under this title that involves political activities.
        (7)(A) Income under any program administered by a public or 
    private nonprofit entity may be retained by such entity only if 
    such income is used to continue to carry out the program.
        (B) Income subject to the requirements of subparagraph (A) 
    shall include--
            (i) receipts from goods or services (including conferences) 
        provided as a result of activities funded under this title;
            (ii) funds provided to a service provider under this title 
        that are in excess of the costs associated with the services 
        provided; and
            (iii) interest income earned on funds received under this 
        title.
        (C) For purposes of this paragraph, each entity receiving 
    financial assistance under this title shall maintain records 
    sufficient to determine the amount of such income received and the 
    purposes for which such income is expended.
        (8)(A) The Secretary shall notify the Governor and the 
    appropriate local board and chief elected official of, and consult 
    with the Governor and such board and official concerning, any 
    activity to be funded by the Secretary under this title within the 
    corresponding State or local area.
        (B) The Governor shall notify the appropriate local board and 
    chief elected official of, and consult with such board and official 
    concerning, any activity to be funded by the Governor under this 
    title within the corresponding local area.
        (9)(A) All education programs for youth supported with funds 
    provided under chapter 4 of subtitle B shall be consistent with 
    applicable State and local educational standards.
        (B) Standards and procedures with respect to awarding academic 
    credit and certifying educational attainment in programs conducted 
    under such chapter shall be consistent with the requirements of 
    applicable State and local law, including regulation.
        (10) No funds available under this title may be used for public 
    service employment except as specifically authorized under this 
    title.
        (11) The Federal requirements governing the title, use, and 
    disposition of real property, equipment, and supplies purchased 
    with funds provided under this title shall be the Federal 
    requirements generally applicable to Federal grants to States and 
    local governments.
        (12) Nothing in this title shall be construed to provide an 
    individual with an entitlement to a service under this title.
        (13) Services, facilities, or equipment funded under this title 
    may be used, as appropriate, on a fee-for-service basis, by 
    employers in a local area in order to provide employment and 
    training activities to incumbent workers--
            (A) when such services, facilities, or equipment are not in 
        use for the provision of services for eligible participants 
        under this title;
            (B) if such use for incumbent workers would not have an 
        adverse affect on the provision of services to eligible 
        participants under this title; and
            (C) if the income derived from such fees is used to carry 
        out the programs authorized under this title.

             Subtitle F--Repeals and Conforming Amendments

SEC. 199. REPEALS.

    (a) General Immediate Repeals.--The following provisions are 
repealed:
        (1) Section 204 of the Immigration Reform and Control Act of 
    1986 (8 U.S.C. 1255a note).
        (2) Title II of Public Law 95-250 (92 Stat. 172).
        (3) The Displaced Homemakers Self-Sufficiency Assistance Act 
    (29 U.S.C. 2301 et seq.).
        (4) Section 211 of the Appalachian Regional Development Act of 
    1965 (40 U.S.C. App. 211).
        (5) Subtitle C of title VII of the Stewart B. McKinney Homeless 
    Assistance Act (42 U.S.C. 11441 et seq.), except section 738 of 
    such title (42 U.S.C. 11448).
        (6) Subchapter I of chapter 421 of title 49, United States 
    Code.
    (b) Subsequent Repeals.--The following provisions are repealed:
        (1) Title VII of the Stewart B. McKinney Homeless Assistance 
    Act (42 U.S.C. 11421 et seq.), except subtitle B and section 738 of 
    such title (42 U.S.C. 11431 et seq. and 11448).
        (2) The Job Training Partnership Act (29 U.S.C. 1501 et seq.).
    (c) Effective Dates.--
        (1) Immediate repeals.--The repeals made by subsection (a) 
    shall take effect on the date of enactment of this Act.
        (2) Subsequent repeals.--
            (A) Stewart b. mckinney homeless assistance act.--The 
        repeal made by subsection (b)(1) shall take effect on July 1, 
        1999.
            (B) Job training partnership act.--The repeal made by 
        subsection (b)(2) shall take effect on July 1, 2000.

SEC. 199A. CONFORMING AMENDMENTS.

    (a) Preparation.--After consultation with the appropriate 
committees of Congress and the Director of the Office of Management and 
Budget, the Secretary shall prepare recommended legislation containing 
technical and conforming amendments to reflect the changes made by this 
subtitle.
    (b) Submission to Congress.--Not later than 6 months after the date 
of enactment of this Act, the Secretary shall submit to Congress the 
recommended legislation referred to under subsection (a).
    (c) References.--All references in any other provision of law to a 
provision of the Comprehensive Employment and Training Act, or of the 
Job Training Partnership Act, as the case may be, shall be deemed to 
refer to the corresponding provision of this title.

                 TITLE II--ADULT EDUCATION AND LITERACY

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Adult Education and Family 
Literacy Act''.

SEC. 202. PURPOSE.

    It is the purpose of this title to create a partnership among the 
Federal Government, States, and localities to provide, on a voluntary 
basis, adult education and literacy services, in order to--
        (1) assist adults to become literate and obtain the knowledge 
    and skills necessary for employment and self-sufficiency;
        (2) assist adults who are parents to obtain the educational 
    skills necessary to become full partners in the educational 
    development of their children; and
        (3) assist adults in the completion of a secondary school 
    education.

SEC. 203. DEFINITIONS.

    In this subtitle:
        (1) Adult education.--The term ``adult education'' means 
    services or instruction below the postsecondary level for 
    individuals--
            (A) who have attained 16 years of age;
            (B) who are not enrolled or required to be enrolled in 
        secondary school under State law; and
            (C) who--
                (i) lack sufficient mastery of basic educational skills 
            to enable the individuals to function effectively in 
            society;
                (ii) do not have a secondary school diploma or its 
            recognized equivalent, and have not achieved an equivalent 
            level of education; or
                (iii) are unable to speak, read, or write the English 
            language.
        (2) Adult education and literacy activities.--The term ``adult 
    education and literacy activities'' means activities described in 
    section 231(b).
        (3) Educational service agency.--The term ``educational service 
    agency'' means a regional public multiservice agency authorized by 
    State statute to develop and manage a service or program, and to 
    provide the service or program to a local educational agency.
        (4) Eligible agency.--The term ``eligible agency'' means the 
    sole entity or agency in a State or an outlying area responsible 
    for administering or supervising policy for adult education and 
    literacy in the State or outlying area, respectively, consistent 
    with the law of the State or outlying area, respectively.
        (5) Eligible provider.--The term ``eligible provider'' means--
            (A) a local educational agency;
            (B) a community-based organization of demonstrated 
        effectiveness;
            (C) a volunteer literacy organization of demonstrated 
        effectiveness;
            (D) an institution of higher education;
            (E) a public or private nonprofit agency;
            (F) a library;
            (G) a public housing authority;
            (H) a nonprofit institution that is not described in any of 
        subparagraphs (A) through (G) and has the ability to provide 
        literacy services to adults and families; and
            (I) a consortium of the agencies, organizations, 
        institutions, libraries, or authorities described in any of 
        subparagraphs (A) through (H).
        (6) English literacy program.--The term ``English literacy 
    program'' means a program of instruction designed to help 
    individuals of limited English proficiency achieve competence in 
    the English language.
        (7) Family literacy services.--The term ``family literacy 
    services'' means services that are of sufficient intensity in terms 
    of hours, and of sufficient duration, to make sustainable changes 
    in a family, and that integrate all of the following activities:
            (A) Interactive literacy activities between parents and 
        their children.
            (B) Training for parents regarding how to be the primary 
        teacher for their children and full partners in the education 
        of their children.
            (C) Parent literacy training that leads to economic self-
        sufficiency.
            (D) An age-appropriate education to prepare children for 
        success in school and life experiences.
        (8) Governor.--The term ``Governor'' means the chief executive 
    officer of a State or outlying area.
        (9) Individual with a disability.--
            (A) In general.--The term ``individual with a disability'' 
        means an individual with any disability (as defined in section 
        3 of the Americans with Disabilities Act of 1990 (42 U.S.C. 
        12102)).
            (B) Individuals with disabilities.--The term ``individuals 
        with disabilities'' means more than one individual with a 
        disability.
        (10) Individual of limited english proficiency.--The term 
    ``individual of limited English proficiency'' means an adult or 
    out-of-school youth who has limited ability in speaking, reading, 
    writing, or understanding the English language, and--
            (A) whose native language is a language other than English; 
        or
            (B) who lives in a family or community environment where a 
        language other than English is the dominant language.
        (11) Institution of higher education.--The term ``institution 
    of higher education'' has the meaning given the term in section 
    1201 of the Higher Education Act of 1965 (20 U.S.C. 1141).
        (12) Literacy.--The term ``literacy'' means an individual's 
    ability to read, write, and speak in English, compute, and solve 
    problems, at levels of proficiency necessary to function on the 
    job, in the family of the individual, and in society.
        (13) Local educational agency.--The term ``local educational 
    agency'' has the meaning given the term in section 14101 of the 
    Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801).
        (14) Outlying area.--The term ``outlying area'' has the meaning 
    given the term in section 101.
        (15) Postsecondary educational institution.--The term 
    ``postsecondary educational institution'' means--
            (A) an institution of higher education that provides not 
        less than a 2-year program of instruction that is acceptable 
        for credit toward a bachelor's degree;
            (B) a tribally controlled community college; or
            (C) a nonprofit educational institution offering 
        certificate or apprenticeship programs at the postsecondary 
        level.
        (16) Secretary.--The term ``Secretary'' means the Secretary of 
    Education.
        (17) State.--The term ``State'' means each of the several 
    States of the United States, the District of Columbia, and the 
    Commonwealth of Puerto Rico.
        (18) Workplace literacy services.--The term ``workplace 
    literacy services'' means literacy services that are offered for 
    the purpose of improving the productivity of the workforce through 
    the improvement of literacy skills.

SEC. 204. HOME SCHOOLS.

    Nothing in this subtitle shall be construed to affect home schools, 
or to compel a parent engaged in home schooling to participate in an 
English literacy program, family literacy services, or adult education.

SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this subtitle 
such sums as may be necessary for each of the fiscal years 1999 through 
2003.

           Subtitle A--Adult Education and Literacy Programs

                     CHAPTER 1--FEDERAL PROVISIONS

SEC. 211. RESERVATION OF FUNDS; GRANTS TO ELIGIBLE AGENCIES; 
              ALLOTMENTS.

    (a) Reservation of Funds.--From the sum appropriated under section 
205 for a fiscal year, the Secretary--
        (1) shall reserve 1.5 percent to carry out section 242, except 
    that the amount so reserved shall not exceed $8,000,000;
        (2) shall reserve 1.5 percent to carry out section 243, except 
    that the amount so reserved shall not exceed $8,000,000; and
        (3) shall make available, to the Secretary of Labor, 1.72 
    percent for incentive grants under section 503.
    (b) Grants to Eligible Agencies.--
        (1) In general.--From the sum appropriated under section 205 
    and not reserved under subsection (a) for a fiscal year, the 
    Secretary shall award a grant to each eligible agency having a 
    State plan approved under section 224 in an amount equal to the sum 
    of the initial allotment under subsection (c)(1) and the additional 
    allotment under subsection (c)(2) for the eligible agency for the 
    fiscal year, subject to subsections (f) and (g), to enable the 
    eligible agency to carry out the activities assisted under this 
    subtitle.
        (2) Purpose of grants.--The Secretary may award a grant under 
    paragraph (1) only if the eligible entity involved agrees to expend 
    the grant for adult education and literacy activities in accordance 
    with the provisions of this subtitle.
    (c) Allotments.--
        (1) Initial allotments.--From the sum appropriated under 
    section 205 and not reserved under subsection (a) for a fiscal 
    year, the Secretary shall allot to each eligible agency having a 
    State plan approved under section 224(f)--
            (A) $100,000, in the case of an eligible agency serving an 
        outlying area; and
            (B) $250,000, in the case of any other eligible agency.
        (2) Additional allotments.--From the sum appropriated under 
    section 205, not reserved under subsection (a), and not allotted 
    under paragraph (1), for a fiscal year, the Secretary shall allot 
    to each eligible agency that receives an initial allotment under 
    paragraph (1) an additional amount that bears the same relationship 
    to such sum as the number of qualifying adults in the State or 
    outlying area served by the eligible agency bears to the number of 
    such adults in all States and outlying areas.
    (d) Qualifying Adult.--For the purpose of subsection (c)(2), the 
term ``qualifying adult'' means an adult who--
        (1) is at least 16 years of age, but less than 61 years of age;
        (2) is beyond the age of compulsory school attendance under the 
    law of the State or outlying area;
        (3) does not have a secondary school diploma or its recognized 
    equivalent; and
        (4) is not enrolled in secondary school.
    (e) Special Rule.--
        (1) In general.--From amounts made available under subsection 
    (c) for the Republic of the Marshall Islands, the Federated States 
    of Micronesia, and the Republic of Palau, the Secretary shall award 
    grants to Guam, American Samoa, the Commonwealth of the Northern 
    Mariana Islands, the Republic of the Marshall Islands, the 
    Federated States of Micronesia, or the Republic of Palau to carry 
    out activities described in this subtitle in accordance with the 
    provisions of this subtitle that the Secretary determines are not 
    inconsistent with this subsection.
        (2) Award basis.--The Secretary shall award grants pursuant to 
    paragraph (1) on a competitive basis and pursuant to 
    recommendations from the Pacific Region Educational Laboratory in 
    Honolulu, Hawaii.
        (3) Termination of eligibility.--Notwithstanding any other 
    provision of law, the Republic of the Marshall Islands, the 
    Federated States of Micronesia, and the Republic of Palau shall not 
    receive any funds under this subtitle for any fiscal year that 
    begins after September 30, 2001.
        (4) Administrative costs.--The Secretary may provide not more 
    than 5 percent of the funds made available for grants under this 
    subsection to pay the administrative costs of the Pacific Region 
    Educational Laboratory regarding activities assisted under this 
    subsection.
    (f) Hold-Harmless.--
        (1) In general.--Notwithstanding subsection (c)--
            (A) for fiscal year 1999, no eligible agency shall receive 
        an allotment under this subtitle that is less than 90 percent 
        of the payments made to the State or outlying area of the 
        eligible agency for fiscal year 1998 for programs for which 
        funds were authorized to be appropriated under section 313 of 
        the Adult Education Act (as such Act was in effect on the day 
        before the date of the enactment of the Workforce Investment 
        Act of 1998); and
            (B) for fiscal year 2000 and each succeeding fiscal year, 
        no eligible agency shall receive an allotment under this 
        subtitle that is less than 90 percent of the allotment the 
        eligible agency received for the preceding fiscal year under 
        this subtitle.
        (2) Ratable reduction.--If for any fiscal year the amount 
    available for allotment under this subtitle is insufficient to 
    satisfy the provisions of paragraph (1), the Secretary shall 
    ratably reduce the payments to all eligible agencies, as necessary.
    (g) Reallotment.--The portion of any eligible agency's allotment 
under this subtitle for a fiscal year that the Secretary determines 
will not be required for the period such allotment is available for 
carrying out activities under this subtitle, shall be available for 
reallotment from time to time, on such dates during such period as the 
Secretary shall fix, to other eligible agencies in proportion to the 
original allotments to such agencies under this subtitle for such year.

SEC. 212. PERFORMANCE ACCOUNTABILITY SYSTEM.

    (a) Purpose.--The purpose of this section is to establish a 
comprehensive performance accountability system, comprised of the 
activities described in this section, to assess the effectiveness of 
eligible agencies in achieving continuous improvement of adult 
education and literacy activities funded under this subtitle, in order 
to optimize the return on investment of Federal funds in adult 
education and literacy activities.
    (b) Eligible Agency Performance Measures.--
        (1) In general.--For each eligible agency, the eligible agency 
    performance measures shall consist of--
            (A)(i) the core indicators of performance described in 
        paragraph (2)(A); and
            (ii) additional indicators of performance (if any) 
        identified by the eligible agency under paragraph (2)(B); and
            (B) an eligible agency adjusted level of performance for 
        each indicator described in subparagraph (A).
        (2) Indicators of performance.--
            (A) Core indicators of performance.--The core indicators of 
        performance shall include the following:
                (i) Demonstrated improvements in literacy skill levels 
            in reading, writing, and speaking the English language, 
            numeracy, problem solving, English language acquisition, 
            and other literacy skills.
                (ii) Placement in, retention in, or completion of, 
            postsecondary education, training, unsubsidized employment 
            or career advancement.
                (iii) Receipt of a secondary school diploma or its 
            recognized equivalent.
            (B) Additional indicators.--An eligible agency may identify 
        in the State plan additional indicators for adult education and 
        literacy activities authorized under this subtitle.
        (3) Levels of performance.--
            (A) Eligible agency adjusted levels of performance for core 
        indicators.--
                (i) In general.--For each eligible agency submitting a 
            State plan, there shall be established, in accordance with 
            this subparagraph, levels of performance for each of the 
            core indicators of performance described in paragraph 
            (2)(A) for adult education and literacy activities 
            authorized under this subtitle. The levels of performance 
            established under this subparagraph shall, at a minimum--

                    (I) be expressed in an objective, quantifiable, and 
                measurable form; and
                    (II) show the progress of the eligible agency 
                toward continuously improving in performance.

                (ii) Identification in state plan.--Each eligible 
            agency shall identify, in the State plan submitted under 
            section 224, expected levels of performance for each of the 
            core indicators of performance for the first 3 program 
            years covered by the State plan.
                (iii) Agreement on eligible agency adjusted levels of 
            performance for first 3 years.--In order to ensure an 
            optimal return on the investment of Federal funds in adult 
            education and literacy activities authorized under this 
            subtitle, the Secretary and each eligible agency shall 
            reach agreement on levels of performance for each of the 
            core indicators of performance, for the first 3 program 
            years covered by the State plan, taking into account the 
            levels identified in the State plan under clause (ii) and 
            the factors described in clause (iv). The levels agreed to 
            under this clause shall be considered to be the eligible 
            agency adjusted levels of performance for the eligible 
            agency for such years and shall be incorporated into the 
            State plan prior to the approval of such plan.
                (iv) Factors.--The agreement described in clause (iii) 
            or (v) shall take into account--

                    (I) how the levels involved compare with the 
                eligible agency adjusted levels of performance 
                established for other eligible agencies, taking into 
                account factors including the characteristics of 
                participants when the participants entered the program, 
                and the services or instruction to be provided; and
                    (II) the extent to which such levels involved 
                promote continuous improvement in performance on the 
                performance measures by such eligible agency and ensure 
                optimal return on the investment of Federal funds.

                (v) Agreement on eligible agency adjusted levels of 
            performance for 4th and 5th years.--Prior to the fourth 
            program year covered by the State plan, the Secretary and 
            each eligible agency shall reach agreement on levels of 
            performance for each of the core indicators of performance 
            for the fourth and fifth program years covered by the State 
            plan, taking into account the factors described in clause 
            (iv). The levels agreed to under this clause shall be 
            considered to be the eligible agency adjusted levels of 
            performance for the eligible agency for such years and 
            shall be incorporated into the State plan.
                (vi) Revisions.--If unanticipated circumstances arise 
            in a State resulting in a significant change in the factors 
            described in clause (iv)(II), the eligible agency may 
            request that the eligible agency adjusted levels of 
            performance agreed to under clause (iii) or (v) be revised. 
            The Secretary, after collaboration with the representatives 
            described in section 136(j), shall issue objective criteria 
            and methods for making such revisions.
            (B) Levels of performance for additional indicators.--The 
        eligible agency may identify, in the State plan, eligible 
        agency levels of performance for each of the additional 
        indicators described in paragraph (2)(B). Such levels shall be 
        considered to be eligible agency adjusted levels of performance 
        for purposes of this subtitle.
    (c) Report.--
        (1) In general.--Each eligible agency that receives a grant 
    under section 211(b) shall annually prepare and submit to the 
    Secretary a report on the progress of the eligible agency in 
    achieving eligible agency performance measures, including 
    information on the levels of performance achieved by the eligible 
    agency with respect to the core indicators of performance.
        (2) Information dissemination.--The Secretary--
            (A) shall make the information contained in such reports 
        available to the general public through publication and other 
        appropriate methods;
            (B) shall disseminate State-by-State comparisons of the 
        information; and
            (C) shall provide the appropriate committees of Congress 
        with copies of such reports.

                      CHAPTER 2--STATE PROVISIONS

SEC. 221. STATE ADMINISTRATION.

    Each eligible agency shall be responsible for the State or outlying 
area administration of activities under this subtitle, including--
        (1) the development, submission, and implementation of the 
    State plan;
        (2) consultation with other appropriate agencies, groups, and 
    individuals that are involved in, or interested in, the development 
    and implementation of activities assisted under this subtitle; and
        (3) coordination and nonduplication with other Federal and 
    State education, training, corrections, public housing, and social 
    service programs.

SEC. 222. STATE DISTRIBUTION OF FUNDS; MATCHING REQUIREMENT.

    (a) State Distribution of Funds.--Each eligible agency receiving a 
grant under this subtitle for a fiscal year--
        (1) shall use not less than 82.5 percent of the grant funds to 
    award grants and contracts under section 231 and to carry out 
    section 225, of which not more than 10 percent of the 82.5 percent 
    shall be available to carry out section 225;
        (2) shall use not more than 12.5 percent of the grant funds to 
    carry out State leadership activities under section 223; and
        (3) shall use not more than 5 percent of the grant funds, or 
    $65,000, whichever is greater, for the administrative expenses of 
    the eligible agency.
    (b) Matching Requirement.--
        (1) In general.--In order to receive a grant from the Secretary 
    under section 211(b) each eligible agency shall provide, for the 
    costs to be incurred by the eligible agency in carrying out the 
    adult education and literacy activities for which the grant is 
    awarded, a non-Federal contribution in an amount equal to--
            (A) in the case of an eligible agency serving an outlying 
        area, 12 percent of the total amount of funds expended for 
        adult education and literacy activities in the outlying area, 
        except that the Secretary may decrease the amount of funds 
        required under this subparagraph for an eligible agency; and
            (B) in the case of an eligible agency serving a State, 25 
        percent of the total amount of funds expended for adult 
        education and literacy activities in the State.
        (2) Non-Federal contribution.--An eligible agency's non-Federal 
    contribution required under paragraph (1) may be provided in cash 
    or in kind, fairly evaluated, and shall include only non-Federal 
    funds that are used for adult education and literacy activities in 
    a manner that is consistent with the purpose of this subtitle.

SEC. 223. STATE LEADERSHIP ACTIVITIES.

    (a) In General.--Each eligible agency shall use funds made 
available under section 222(a)(2) for one or more of the following 
adult education and literacy activities:
        (1) The establishment or operation of professional development 
    programs to improve the quality of instruction provided pursuant to 
    local activities required under section 231(b), including 
    instruction incorporating phonemic awareness, systematic phonics, 
    fluency, and reading comprehension, and instruction provided by 
    volunteers or by personnel of a State or outlying area.
        (2) The provision of technical assistance to eligible providers 
    of adult education and literacy activities.
        (3) The provision of technology assistance, including staff 
    training, to eligible providers of adult education and literacy 
    activities to enable the eligible providers to improve the quality 
    of such activities.
        (4) The support of State or regional networks of literacy 
    resource centers.
        (5) The monitoring and evaluation of the quality of, and the 
    improvement in, adult education and literacy activities.
        (6) Incentives for--
            (A) program coordination and integration; and
            (B) performance awards.
        (7) Developing and disseminating curricula, including curricula 
    incorporating phonemic awareness, systematic phonics, fluency, and 
    reading comprehension.
        (8) Other activities of statewide significance that promote the 
    purpose of this title.
        (9) Coordination with existing support services, such as 
    transportation, child care, and other assistance designed to 
    increase rates of enrollment in, and successful completion of, 
    adult education and literacy activities, to adults enrolled in such 
    activities.
        (10) Integration of literacy instruction and occupational skill 
    training, and promoting linkages with employers.
        (11) Linkages with postsecondary educational institutions.
    (b) Collaboration.--In carrying out this section, eligible agencies 
shall collaborate where possible, and avoid duplicating efforts, in 
order to maximize the impact of the activities described in subsection 
(a).
    (c) State-Imposed Requirements.--Whenever a State or outlying area 
implements any rule or policy relating to the administration or 
operation of a program authorized under this subtitle that has the 
effect of imposing a requirement that is not imposed under Federal law 
(including any rule or policy based on a State or outlying area 
interpretation of a Federal statute, regulation, or guideline), the 
State or outlying area shall identify, to eligible providers, the rule 
or policy as being State- or outlying area-imposed.

SEC. 224. STATE PLAN.

    (a) 5-Year Plans.--
        (1) In general.--Each eligible agency desiring a grant under 
    this subtitle for any fiscal year shall submit to, or have on file 
    with, the Secretary a 5-year State plan.
        (2) Comprehensive plan or application.--The eligible agency may 
    submit the State plan as part of a comprehensive plan or 
    application for Federal education assistance.
    (b) Plan Contents.--In developing the State plan, and any revisions 
to the State plan, the eligible agency shall include in the State plan 
or revisions--
        (1) an objective assessment of the needs of individuals in the 
    State or outlying area for adult education and literacy activities, 
    including individuals most in need or hardest to serve;
        (2) a description of the adult education and literacy 
    activities that will be carried out with any funds received under 
    this subtitle;
        (3) a description of how the eligible agency will evaluate 
    annually the effectiveness of the adult education and literacy 
    activities based on the performance measures described in section 
    212;
        (4) a description of the performance measures described in 
    section 212 and how such performance measures will ensure the 
    improvement of adult education and literacy activities in the State 
    or outlying area;
        (5) an assurance that the eligible agency will award not less 
    than one grant under this subtitle to an eligible provider who 
    offers flexible schedules and necessary support services (such as 
    child care and transportation) to enable individuals, including 
    individuals with disabilities, or individuals with other special 
    needs, to participate in adult education and literacy activities, 
    which eligible provider shall attempt to coordinate with support 
    services that are not provided under this subtitle prior to using 
    funds for adult education and literacy activities provided under 
    this subtitle for support services;
        (6) an assurance that the funds received under this subtitle 
    will not be expended for any purpose other than for activities 
    under this subtitle;
        (7) a description of how the eligible agency will fund local 
    activities in accordance with the considerations described in 
    section 231(e);
        (8) an assurance that the eligible agency will expend the funds 
    under this subtitle only in a manner consistent with fiscal 
    requirements in section 241;
        (9) a description of the process that will be used for public 
    participation and comment with respect to the State plan;
        (10) a description of how the eligible agency will develop 
    program strategies for populations that include, at a minimum--
            (A) low-income students;
            (B) individuals with disabilities;
            (C) single parents and displaced homemakers; and
            (D) individuals with multiple barriers to educational 
        enhancement, including individuals with limited English 
        proficiency;
        (11) a description of how the adult education and literacy 
    activities that will be carried out with any funds received under 
    this subtitle will be integrated with other adult education, career 
    development, and employment and training activities in the State or 
    outlying area served by the eligible agency; and
        (12) a description of the steps the eligible agency will take 
    to ensure direct and equitable access, as required in section 
    231(c)(1).
    (c) Plan Revisions.--When changes in conditions or other factors 
require substantial revisions to an approved State plan, the eligible 
agency shall submit the revisions to the State plan to the Secretary.
    (d) Consultation.--The eligible agency shall--
        (1) submit the State plan, and any revisions to the State plan, 
    to the Governor of the State or outlying area for review and 
    comment; and
        (2) ensure that any comments by the Governor regarding the 
    State plan, and any revision to the State plan, are submitted to 
    the Secretary.
    (e) Peer Review.--The Secretary shall establish a peer review 
process to make recommendations regarding the approval of State plans.
    (f) Plan Approval.--A State plan submitted to the Secretary shall 
be approved by the Secretary unless the Secretary makes a written 
determination, within 90 days after receiving the plan, that the plan 
is inconsistent with the specific provisions of this subtitle.

SEC. 225. PROGRAMS FOR CORRECTIONS EDUCATION AND OTHER 
              INSTITUTIONALIZED INDIVIDUALS.

    (a) Program Authorized.--From funds made available under section 
222(a)(1) for a fiscal year, each eligible agency shall carry out 
corrections education or education for other institutionalized 
individuals.
    (b) Uses of Funds.--The funds described in subsection (a) shall be 
used for the cost of educational programs for criminal offenders in 
correctional institutions and for other institutionalized individuals, 
including academic programs for--
        (1) basic education;
        (2) special education programs as determined by the eligible 
    agency;
        (3) English literacy programs; and
        (4) secondary school credit programs.
    (c) Priority.--Each eligible agency that is using assistance 
provided under this section to carry out a program for criminal 
offenders in a correctional institution shall give priority to serving 
individuals who are likely to leave the correctional institution with 5 
years of participation in the program.
    (d) Definition of Criminal Offender.--
        (1) Criminal offender.--The term ``criminal offender'' means 
    any individual who is charged with or convicted of any criminal 
    offense.
        (2) Correctional institution.--The term ``correctional 
    institution'' means any--
            (A) prison;
            (B) jail;
            (C) reformatory;
            (D) work farm;
            (E) detention center; or
            (F) halfway house, community-based rehabilitation center, 
        or any other similar institution designed for the confinement 
        or rehabilitation of criminal offenders.

                      CHAPTER 3--LOCAL PROVISIONS

SEC. 231. GRANTS AND CONTRACTS FOR ELIGIBLE PROVIDERS.

    (a) Grants and Contracts.--From grant funds made available under 
section 211(b), each eligible agency shall award multiyear grants or 
contracts, on a competitive basis, to eligible providers within the 
State or outlying area to enable the eligible providers to develop, 
implement, and improve adult education and literacy activities within 
the State.
    (b) Required Local Activities.--The eligible agency shall require 
that each eligible provider receiving a grant or contract under 
subsection (a) use the grant or contract to establish or operate one or 
more programs that provide services or instruction in one or more of 
the following categories:
        (1) Adult education and literacy services, including workplace 
    literacy services.
        (2) Family literacy services.
        (3) English literacy programs.
    (c) Direct and Equitable Access; Same Process.--Each eligible 
agency receiving funds under this subtitle shall ensure that--
        (1) all eligible providers have direct and equitable access to 
    apply for grants or contracts under this section; and
        (2) the same grant or contract announcement process and 
    application process is used for all eligible providers in the State 
    or outlying area.
    (d) Special Rule.--Each eligible agency awarding a grant or 
contract under this section shall not use any funds made available 
under this subtitle for adult education and literacy activities for the 
purpose of supporting or providing programs, services, or activities 
for individuals who are not individuals described in subparagraphs (A) 
and (B) of section 203(1), except that such agency may use such funds 
for such purpose if such programs, services, or activities are related 
to family literacy services. In providing family literacy services 
under this subtitle, an eligible provider shall attempt to coordinate 
with programs and services that are not assisted under this subtitle 
prior to using funds for adult education and literacy activities under 
this subtitle for activities other than adult education activities.
    (e) Considerations.--In awarding grants or contracts under this 
section, the eligible agency shall consider--
        (1) the degree to which the eligible provider will establish 
    measurable goals for participant outcomes;
        (2) the past effectiveness of an eligible provider in improving 
    the literacy skills of adults and families, and, after the 1-year 
    period beginning with the adoption of an eligible agency's 
    performance measures under section 212, the success of an eligible 
    provider receiving funding under this subtitle in meeting or 
    exceeding such performance measures, especially with respect to 
    those adults with the lowest levels of literacy;
        (3) the commitment of the eligible provider to serve 
    individuals in the community who are most in need of literacy 
    services, including individuals who are low-income or have minimal 
    literacy skills;
        (4) whether or not the program--
            (A) is of sufficient intensity and duration for 
        participants to achieve substantial learning gains; and
            (B) uses instructional practices, such as phonemic 
        awareness, systematic phonics, fluency, and reading 
        comprehension that research has proven to be effective in 
        teaching individuals to read;
        (5) whether the activities are built on a strong foundation of 
    research and effective educational practice;
        (6) whether the activities effectively employ advances in 
    technology, as appropriate, including the use of computers;
        (7) whether the activities provide learning in real life 
    contexts to ensure that an individual has the skills needed to 
    compete in the workplace and exercise the rights and 
    responsibilities of citizenship;
        (8) whether the activities are staffed by well-trained 
    instructors, counselors, and administrators;
        (9) whether the activities coordinate with other available 
    resources in the community, such as by establishing strong links 
    with elementary schools and secondary schools, postsecondary 
    educational institutions, one-stop centers, job training programs, 
    and social service agencies;
        (10) whether the activities offer flexible schedules and 
    support services (such as child care and transportation) that are 
    necessary to enable individuals, including individuals with 
    disabilities or other special needs, to attend and complete 
    programs;
        (11) whether the activities maintain a high-quality information 
    management system that has the capacity to report participant 
    outcomes and to monitor program performance against the eligible 
    agency performance measures; and
        (12) whether the local communities have a demonstrated need for 
    additional English literacy programs.

SEC. 232. LOCAL APPLICATION.

    Each eligible provider desiring a grant or contract under this 
subtitle shall submit an application to the eligible agency containing 
such information and assurances as the eligible agency may require, 
including--
        (1) a description of how funds awarded under this subtitle will 
    be spent; and
        (2) a description of any cooperative arrangements the eligible 
    provider has with other agencies, institutions, or organizations 
    for the delivery of adult education and literacy activities.

SEC. 233. LOCAL ADMINISTRATIVE COST LIMITS.

    (a) In General.--Subject to subsection (b), of the amount that is 
made available under this subtitle to an eligible provider--
        (1) not less than 95 percent shall be expended for carrying out 
    adult education and literacy activities; and
        (2) the remaining amount, not to exceed 5 percent, shall be 
    used for planning, administration, personnel development, and 
    interagency coordination.
    (b) Special Rule.--In cases where the cost limits described in 
subsection (a) are too restrictive to allow for adequate planning, 
administration, personnel development, and interagency coordination, 
the eligible provider shall negotiate with the eligible agency in order 
to determine an adequate level of funds to be used for noninstructional 
purposes.

                     CHAPTER 4--GENERAL PROVISIONS

SEC. 241. ADMINISTRATIVE PROVISIONS.

    (a) Supplement Not Supplant.--Funds made available for adult 
education and literacy activities under this subtitle shall supplement 
and not supplant other State or local public funds expended for adult 
education and literacy activities.
    (b) Maintenance of Effort.--
        (1) In general.--
            (A) Determination.--An eligible agency may receive funds 
        under this subtitle for any fiscal year if the Secretary finds 
        that the fiscal effort per student or the aggregate 
        expenditures of such eligible agency for adult education and 
        literacy activities, in the second preceding fiscal year, was 
        not less than 90 percent of the fiscal effort per student or 
        the aggregate expenditures of such eligible agency for adult 
        education and literacy activities, in the third preceding 
        fiscal year.
            (B) Proportionate reduction.--Subject to paragraphs (2), 
        (3), and (4), for any fiscal year with respect to which the 
        Secretary determines under subparagraph (A) that the fiscal 
        effort or the aggregate expenditures of an eligible agency for 
        the preceding program year were less than such effort or 
        expenditures for the second preceding program year, the 
        Secretary--
                (i) shall determine the percentage decreases in such 
            effort or in such expenditures; and
                (ii) shall decrease the payment made under this 
            subtitle for such program year to the agency for adult 
            education and literacy activities by the lesser of such 
            percentages.
        (2) Computation.--In computing the fiscal effort and aggregate 
    expenditures under paragraph (1), the Secretary shall exclude 
    capital expenditures and special one-time project costs.
        (3) Decrease in federal support.--If the amount made available 
    for adult education and literacy activities under this subtitle for 
    a fiscal year is less than the amount made available for adult 
    education and literacy activities under this subtitle for the 
    preceding fiscal year, then the fiscal effort per student and the 
    aggregate expenditures of an eligible agency required in order to 
    avoid a reduction under paragraph (1)(B) shall be decreased by the 
    same percentage as the percentage decrease in the amount so made 
    available.
        (4) Waiver.--The Secretary may waive the requirements of this 
    subsection for 1 fiscal year only, if the Secretary determines that 
    a waiver would be equitable due to exceptional or uncontrollable 
    circumstances, such as a natural disaster or an unforeseen and 
    precipitous decline in the financial resources of the State or 
    outlying area of the eligible agency. If the Secretary grants a 
    waiver under the preceding sentence for a fiscal year, the level of 
    effort required under paragraph (1) shall not be reduced in the 
    subsequent fiscal year because of the waiver.

SEC. 242. NATIONAL INSTITUTE FOR LITERACY.

    (a) Purpose.--The purpose of this section is to establish a 
National Institute for Literacy that--
        (1) provides national leadership regarding literacy;
        (2) coordinates literacy services and policy; and
        (3) serves as a national resource for adult education and 
    literacy programs by--
            (A) providing the best and most current information 
        available, including the work of the National Institute of 
        Child Health and Human Development in the area of phonemic 
        awareness, systematic phonics, fluency, and reading 
        comprehension, to all recipients of Federal assistance that 
        focuses on reading, including programs under titles I and VII 
        of the Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 6301 et seq. and 7401 et seq.), the Head Start Act (42 
        U.S.C. 9831 et seq.), the Individuals with Disabilities 
        Education Act (20 U.S.C. 1400 et seq.), and this Act; and
            (B) supporting the creation of new ways to offer services 
        of proven effectiveness.
    (b) Establishment.--
        (1) In general.--There is established the National Institute 
    for Literacy (in this section referred to as the ``Institute''). 
    The Institute shall be administered under the terms of an 
    interagency agreement entered into by the Secretary of Education 
    with the Secretary of Labor and the Secretary of Health and Human 
    Services (in this section referred to as the ``Interagency 
    Group''). The Interagency Group may include in the Institute any 
    research and development center, institute, or clearinghouse 
    established within the Department of Education, the Department of 
    Labor, or the Department of Health and Human Services the purpose 
    of which is determined by the Interagency Group to be related to 
    the purpose of the Institute.
        (2) Offices.--The Institute shall have offices separate from 
    the offices of the Department of Education, the Department of 
    Labor, and the Department of Health and Human Services.
        (3) Recommendations.--The Interagency Group shall consider the 
    recommendations of the National Institute for Literacy Advisory 
    Board (in this section referred to as the ``Board'') established 
    under subsection (e) in planning the goals of the Institute and in 
    the implementation of any programs to achieve the goals. If the 
    Board's recommendations are not followed, the Interagency Group 
    shall provide a written explanation to the Board concerning actions 
    the Interagency Group takes that are inconsistent with the Board's 
    recommendations, including the reasons for not following the 
    Board's recommendations with respect to the actions. The Board may 
    also request a meeting of the Interagency Group to discuss the 
    Board's recommendations.
        (4) Daily operations.--The daily operations of the Institute 
    shall be administered by the Director of the Institute.
    (c) Duties.--
        (1) In general.--In order to provide leadership for the 
    improvement and expansion of the system for delivery of literacy 
    services, the Institute is authorized--
            (A) to establish a national electronic data base of 
        information that disseminates information to the broadest 
        possible audience within the literacy and basic skills field, 
        and that includes--
                (i) effective practices in the provision of literacy 
            and basic skills instruction, including instruction in 
            phonemic awareness, systematic phonics, fluency, and 
            reading comprehension, and the integration of literacy and 
            basic skills instruction with occupational skills training;
                (ii) public and private literacy and basic skills 
            programs, and Federal, State, and local policies, affecting 
            the provision of literacy services at the national, State, 
            and local levels;
                (iii) opportunities for technical assistance, meetings, 
            conferences, and other opportunities that lead to the 
            improvement of literacy and basic skills services; and
                (iv) a communication network for literacy programs, 
            providers, social service agencies, and students;
            (B) to coordinate support for the provision of literacy and 
        basic skills services across Federal agencies and at the State 
        and local levels;
            (C) to coordinate the support of reliable and replicable 
        research and development on literacy and basic skills in 
        families and adults across Federal agencies, especially with 
        the Office of Educational Research and Improvement in the 
        Department of Education, and to carry out basic and applied 
        research and development on topics that are not being 
        investigated by other organizations or agencies, such as the 
        special literacy needs of individuals with learning 
        disabilities;
            (D) to collect and disseminate information on methods of 
        advancing literacy that show great promise, including phonemic 
        awareness, systematic phonics, fluency, and reading 
        comprehension based on the work of the National Institute of 
        Child Health and Human Development;
            (E) to provide policy and technical assistance to Federal, 
        State, and local entities for the improvement of policy and 
        programs relating to literacy;
            (F) to fund a network of State or regional adult literacy 
        resource centers to assist State and local public and private 
        nonprofit efforts to improve literacy by--
                (i) encouraging the coordination of literacy services;
                (ii) enhancing the capacity of State and local 
            organizations to provide literacy services; and
                (iii) serving as a link between the Institute and 
            providers of adult education and literacy activities for 
            the purpose of sharing information, data, research, 
            expertise, and literacy resources;
            (G) to coordinate and share information with national 
        organizations and associations that are interested in literacy 
        and workforce investment activities;
            (H) to advise Congress and Federal departments and agencies 
        regarding the development of policy with respect to literacy 
        and basic skills; and
            (I) to undertake other activities that lead to the 
        improvement of the Nation's literacy delivery system and that 
        complement other such efforts being undertaken by public and 
        private agencies and organizations.
        (2) Grants, contracts, and cooperative agreements.--The 
    Institute may award grants to, or enter into contracts or 
    cooperative agreements with, individuals, public or private 
    institutions, agencies, organizations, or consortia of such 
    institutions, agencies, or organizations to carry out the 
    activities of the Institute.
    (d) Literacy Leadership.--
        (1) In general.--The Institute, in consultation with the Board, 
    may award fellowships, with such stipends and allowances that the 
    Director considers necessary, to outstanding individuals pursuing 
    careers in adult education or literacy in the areas of instruction, 
    management, research, or innovation.
        (2) Fellowships.--Fellowships awarded under this subsection 
    shall be used, under the auspices of the Institute, to engage in 
    research, education, training, technical assistance, or other 
    activities to advance the field of adult education or literacy, 
    including the training of volunteer literacy providers at the 
    national, State, or local level.
        (3) Interns and volunteers.--The Institute, in consultation 
    with the Board, may award paid and unpaid internships to 
    individuals seeking to assist the Institute in carrying out its 
    mission. Notwithstanding section 1342 of title 31, United States 
    Code, the Institute may accept and use voluntary and uncompensated 
    services as the Institute determines necessary.
    (e) National Institute for Literacy Advisory Board.--
        (1) Establishment.--
            (A) In general.--There shall be a National Institute for 
        Literacy Advisory Board (in this section referred to as the 
        ``Board''), which shall consist of 10 individuals appointed by 
        the President with the advice and consent of the Senate.
            (B) Composition.--The Board shall be comprised of 
        individuals who are not otherwise officers or employees of the 
        Federal Government and who are representative of entities such 
        as--
                (i) literacy organizations and providers of literacy 
            services, including nonprofit providers, providers of 
            English literacy programs and services, social service 
            organizations, and eligible providers receiving assistance 
            under this subtitle;
                (ii) businesses that have demonstrated interest in 
            literacy programs;
                (iii) literacy students, including literacy students 
            with disabilities;
                (iv) experts in the area of literacy research;
                (v) State and local governments;
                (vi) State Directors of adult education; and
                (vii) representatives of employees, including 
            representatives of labor organizations.
        (2) Duties.--The Board shall--
            (A) make recommendations concerning the appointment of the 
        Director and staff of the Institute;
            (B) provide independent advice on the operation of the 
        Institute; and
            (C) receive reports from the Interagency Group and the 
        Director.
        (3) Federal advisory committee act.--Except as otherwise 
    provided, the Board established by this subsection shall be subject 
    to the provisions of the Federal Advisory Committee Act (5 U.S.C. 
    App.).
        (4) Appointments.--
            (A) In general.--Each member of the Board shall be 
        appointed for a term of 3 years, except that the initial terms 
        for members may be 1, 2, or 3 years in order to establish a 
        rotation in which one-third of the members are selected each 
        year. Any such member may be appointed for not more than 2 
        consecutive terms.
            (B) Vacancies.--Any member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
        member's predecessor was appointed shall be appointed only for 
        the remainder of that term. A member may serve after the 
        expiration of that member's term until a successor has taken 
        office.
        (5) Quorum.--A majority of the members of the Board shall 
    constitute a quorum but a lesser number may hold hearings. Any 
    recommendation of the Board may be passed only by a majority of the 
    Board's members present.
        (6) Election of officers.--The Chairperson and Vice Chairperson 
    of the Board shall be elected by the members of the Board. The term 
    of office of the Chairperson and Vice Chairperson shall be 2 years.
        (7) Meetings.--The Board shall meet at the call of the 
    Chairperson or a majority of the members of the Board.
    (f) Gifts, Bequests, and Devises.--
        (1) In general.--The Institute may accept, administer, and use 
    gifts or donations of services, money, or property, whether real or 
    personal, tangible or intangible.
        (2) Rules.--The Board shall establish written rules setting 
    forth the criteria to be used by the Institute in determining 
    whether the acceptance of contributions of services, money, or 
    property whether real or personal, tangible or intangible, would 
    reflect unfavorably upon the ability of the Institute or any 
    employee to carry out the responsibilities of the Institute or 
    employee, or official duties, in a fair and objective manner, or 
    would compromise the integrity or the appearance of the integrity 
    of the Institute's programs or any official involved in those 
    programs.
    (g) Mails.--The Board and the Institute may use the United States 
mails in the same manner and under the same conditions as other 
departments and agencies of the United States.
    (h) Staff.--The Interagency Group, after considering 
recommendations made by the Board, shall appoint and fix the pay of a 
Director.
    (i) Applicability of Certain Civil Service Laws.--The Director and 
staff of the Institute may be appointed without regard to the 
provisions of title 5, United States Code, governing appointments in 
the competitive service, and may be paid without regard to the 
provisions of chapter 51 and subchapter III of chapter 53 of that title 
relating to classification and General Schedule pay rates, except that 
an individual so appointed may not receive pay in excess of the annual 
rate of basic pay payable for level IV of the Executive Schedule.
    (j) Experts and Consultants.--The Institute may procure temporary 
and intermittent services under section 3109(b) of title 5, United 
States Code.
    (k) Report.--The Institute shall submit a report biennially to the 
Committee on Education and the Workforce of the House of 
Representatives and the Committee on Labor and Human Resources of the 
Senate. Each report submitted under this subsection shall include--
        (1) a comprehensive and detailed description of the Institute's 
    operations, activities, financial condition, and accomplishments in 
    the field of literacy for the period covered by the report;
        (2) a description of how plans for the operation of the 
    Institute for the succeeding 2 fiscal years will facilitate 
    achievement of the goals of the Institute and the goals of the 
    literacy programs within the Department of Education, the 
    Department of Labor, and the Department of Health and Human 
    Services; and
        (3) any additional minority, or dissenting views submitted by 
    members of the Board.
    (l) Funding.--Any amounts appropriated to the Secretary, the 
Secretary of Labor, the Secretary of Health and Human Services, or any 
other department that participates in the Institute for purposes that 
the Institute is authorized to perform under this section may be 
provided to the Institute for such purposes.

SEC. 243. NATIONAL LEADERSHIP ACTIVITIES.

    The Secretary shall establish and carry out a program of national 
leadership activities to enhance the quality of adult education and 
literacy programs nationwide. Such activities may include the 
following:
        (1) Technical assistance, including--
            (A) assistance provided to eligible providers in developing 
        and using performance measures for the improvement of adult 
        education and literacy activities, including family literacy 
        services;
            (B) assistance related to professional development 
        activities, and assistance for the purposes of developing, 
        improving, identifying, and disseminating the most successful 
        methods and techniques for providing adult education and 
        literacy activities, including family literacy services, based 
        on scientific evidence where available; and
            (C) assistance in distance learning and promoting and 
        improving the use of technology in the classroom.
        (2) Funding national leadership activities that are not 
    described in paragraph (1), either directly or through grants, 
    contracts, or cooperative agreements awarded on a competitive basis 
    to or with postsecondary educational institutions, public or 
    private organizations or agencies, or consortia of such 
    institutions, organizations, or agencies, such as--
            (A) developing, improving, and identifying the most 
        successful methods and techniques for addressing the education 
        needs of adults, including instructional practices using 
        phonemic awareness, systematic phonics, fluency, and reading 
        comprehension, based on the work of the National Institute of 
        Child Health and Human Development;
            (B) increasing the effectiveness of, and improving the 
        qualify of, adult education and literacy activities, including 
        family literacy services;
            (C) carrying out research, such as estimating the number of 
        adults functioning at the lowest levels of literacy 
        proficiency;
            (D)(i) carrying out demonstration programs;
            (ii) developing and replicating model and innovative 
        programs, such as the development of models for basic skill 
        certificates, identification of effective strategies for 
        working with adults with learning disabilities and with 
        individuals with limited English proficiency who are adults, 
        and workplace literacy programs; and
            (iii) disseminating best practices information, including 
        information regarding promising practices resulting from 
        federally funded demonstration programs;
            (E) providing for the conduct of an independent evaluation 
        and assessment of adult education and literacy activities 
        through studies and analyses conducted independently through 
        grants and contracts awarded on a competitive basis, which 
        evaluation and assessment shall include descriptions of--
                (i) the effect of performance measures and other 
            measures of accountability on the delivery of adult 
            education and literacy activities, including family 
            literacy services;
                (ii) the extent to which the adult education and 
            literacy activities, including family literacy services, 
            increase the literacy skills of adults (and of children, in 
            the case of family literacy services), lead the 
            participants in such activities to involvement in further 
            education and training, enhance the employment and earnings 
            of such participants, and, if applicable, lead to other 
            positive outcomes, such as reductions in recidivism in the 
            case of prison-based adult education and literacy 
            activities;
                (iii) the extent to which the provision of support 
            services to adults enrolled in adult education and family 
            literacy programs increase the rate of enrollment in, and 
            successful completion of, such programs; and
                (iv) the extent to which eligible agencies have 
            distributed funds under section 231 to meet the needs of 
            adults through community-based organizations;
            (F) supporting efforts aimed at capacity building at the 
        State and local levels, such as technical assistance in program 
        planning, assessment, evaluation, and monitoring of activities 
        carried out under this subtitle;
            (G) collecting data, such as data regarding the improvement 
        of both local and State data systems, through technical 
        assistance and development of model performance data collection 
        systems; and
            (H) other activities designed to enhance the quality of 
        adult education and literacy activities nationwide.

                          Subtitle B--Repeals

SEC. 251. REPEALS.

    (a) Repeals.--
        (1) Adult education act.--The Adult Education Act (20 U.S.C. 
    1201 et seq.) is repealed.
        (2) National literacy act of 1991.--The National Literacy Act 
    of 1991 (20 U.S.C. 1201 note) is repealed.
    (b) Conforming Amendments.--
        (1) Refugee education assistance act.--Subsection (b) of 
    section 402 of the Refugee Education Assistance Act of 1980 (8 
    U.S.C. 1522 note) is repealed.
        (2) Elementary and secondary education act of 1965.--
            (A) Section 1202 of esea.--Section 1202(c)(1) of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        6362(c)(1)) is amended by striking ``Adult Education Act'' and 
        inserting ``Adult Education and Family Literacy Act''.
            (B) Section 1205 of esea.--Section 1205(8)(B) of such Act 
        (20 U.S.C. 6365(8)(B)) is amended by striking ``Adult Education 
        Act'' and inserting ``Adult Education and Family Literacy 
        Act''.
            (C) Section 1206 of esea.--Section 1206(a)(1)(A) of such 
        Act (20 U.S.C. 6366(a)(1)(A)) is amended by striking ``an adult 
        basic education program under the Adult Education Act'' and 
        inserting ``adult education and literacy activities under the 
        Adult Education and Family Literacy Act''.
            (D) Section 3113 of esea.--Section 3113(1) of such Act (20 
        U.S.C. 6813(1)) is amended by striking ``section 312 of the 
        Adult Education Act'' and inserting ``section 203 of the Adult 
        Education and Family Literacy Act''.
            (E) Section 9161 of esea.--Section 9161(2) of such Act (20 
        U.S.C. 7881(2)) is amended by striking ``section 312(2) of the 
        Adult Education Act'' and inserting ``section 203 of the Adult 
        Education and Family Literacy Act''.
        (3) Older americans act of 1965.--Section 203(b)(8) of the 
    Older Americans Act of 1965 (42 U.S.C. 3013(b)(8)) is amended by 
    striking ``Adult Education Act'' and inserting ``Adult Education 
    and Family Literacy Act''.

           TITLE III--WORKFORCE INVESTMENT-RELATED ACTIVITIES
                     Subtitle A--Wagner-Peyser Act

SEC. 301. DEFINITIONS.

    Section 2 of the Wagner-Peyser Act (29 U.S.C. 49a) is amended--
        (1) in paragraph (1)--
            (A) by striking ``or officials''; and
            (B) by striking ``Job Training Partnership Act'' and 
        inserting ``Workforce Investment Act of 1998'';
        (2) by striking paragraphs (2) and (4);
        (3) by redesignating paragraph (3) as paragraph (4);
        (4) by inserting after paragraph (1) the following:
        ``(2) the term `local workforce investment board' means a local 
    workforce investment board established under section 117 of the 
    Workforce Investment Act of 1998;
        ``(3) the term `one-stop delivery system' means a one-stop 
    delivery system described in section 134(c) of the Workforce 
    Investment Act of 1998;''; and
        (5) in paragraph (4) (as redesignated in paragraph (3)), by 
    striking the semicolon and inserting ``; and''.

SEC. 302. FUNCTIONS.

    (a) In General.--Section 3 of the Wagner-Peyser Act (29 U.S.C. 49b) 
is amended--
        (1) in subsection (a), by striking ``United States Employment 
    Service'' and inserting ``Secretary''; and
        (2) by adding at the end the following:
    ``(c) The Secretary shall--
        ``(1) assist in the coordination and development of a 
    nationwide system of public labor exchange services, provided as 
    part of the one-stop customer service systems of the States;
        ``(2) assist in the development of continuous improvement 
    models for such nationwide system that ensure private sector 
    satisfaction with the system and meet the demands of jobseekers 
    relating to the system; and
        ``(3) ensure, for individuals otherwise eligible to receive 
    unemployment compensation, the provision of reemployment services 
    and other activities in which the individuals are required to 
    participate to receive the compensation.''.
    (b) Conforming Amendments.--Section 508(b)(1) of the Unemployment 
Compensation Amendments of 1976 (42 U.S.C. 603a(b)(1)) is amended--
        (1) by striking ``the third sentence of section 3(a)'' and 
    inserting ``section 3(b)''; and
        (2) by striking ``49b(a)'' and inserting ``49b(b)''.

SEC. 303. DESIGNATION OF STATE AGENCIES.

    Section 4 of the Wagner-Peyser Act (29 U.S.C. 49c) is amended--
        (1) by striking ``, through its legislature,'' and inserting 
    ``, pursuant to State statute,'';
        (2) by inserting after ``the provisions of this Act and'' the 
    following: ``, in accordance with such State statute, the Governor 
    shall''; and
        (3) by striking ``United States Employment Service'' and 
    inserting ``Secretary''.

SEC. 304. APPROPRIATIONS.

    Section 5(c) of the Wagner-Peyser Act (29 U.S.C. 49d(c)) is amended 
by striking paragraph (3).

SEC. 305. DISPOSITION OF ALLOTTED FUNDS.

    Section 7 of the Wagner-Peyser Act (29 U.S.C. 49f) is amended--
        (1) in subsection (b)(2), by striking ``private industry 
    council'' and inserting ``local workforce investment board'';
        (2) in subsection (c)(2), by striking ``any program under'' and 
    all that follows and inserting ``any workforce investment activity 
    carried out under the Workforce Investment Act of 1998.'';
        (3) in subsection (d)--
            (A) by striking ``United States Employment Service'' and 
        inserting ``Secretary''; and
            (B) by striking ``Job Training Partnership Act'' and 
        inserting ``Workforce Investment Act of 1998''; and
        (4) by adding at the end the following:
    ``(e) All job search, placement, recruitment, labor employment 
statistics, and other labor exchange services authorized under 
subsection (a) shall be provided, consistent with the other 
requirements of this Act, as part of the one-stop delivery system 
established by the State.''.

SEC. 306. STATE PLANS.

    Section 8 of the Wagner-Peyser Act (29 U.S.C. 49g) is amended--
        (1) in subsection (a) to read as follows:
    ``(a) Any State desiring to receive assistance under this Act shall 
submit to the Secretary, as part of the State plan submitted under 
section 112 of the Workforce Investment Act of 1998, detailed plans for 
carrying out the provisions of this Act within such State.'';
        (2) by striking subsections (b) and (c);
        (3) by redesignating subsection (d) as subsection (b);
        (4) by inserting after subsection (b) (as redesignated by 
    paragraph (3)) the following:
    ``(c) The part of the State plan described in subsection (a) shall 
include the information described in paragraphs (8) and (14) of section 
112(b) of the Workforce Investment Act of 1998.'';
        (5) by redesignating subsection (e) as subsection (d); and
        (6) in subsection (d) (as redesignated in paragraph (5)), by 
    striking ``such plans'' and inserting ``such detailed plans''.

SEC. 307. REPEAL OF FEDERAL ADVISORY COUNCIL.

    Section 11 of the Wagner-Peyser Act (29 U.S.C. 49j) is amended--
        (1) by striking ``11.'' and all that follows through ``(b) In'' 
    and inserting ``11. In''; and
        (2) by striking ``Director'' and inserting ``Secretary''.

SEC. 308. REGULATIONS.

    Section 12 of the Wagner-Peyser Act (29 U.S.C. 49k) is amended by 
striking ``The Director, with the approval of the Secretary of Labor,'' 
and inserting ``The Secretary''.

SEC. 309. EMPLOYMENT STATISTICS.

    The Wagner-Peyser Act is amended--
        (1) by redesignating section 15 (29 U.S.C. 49 note) as section 
    16; and
        (2) by inserting after section 14 (29 U.S.C. 49l-1) the 
    following:

``SEC. 15. EMPLOYMENT STATISTICS.

    ``(a) System Content.--
        ``(1) In general.--The Secretary, in accordance with the 
    provisions of this section, shall oversee the development, 
    maintenance, and continuous improvement of a nationwide employment 
    statistics system of employment statistics that includes--
            ``(A) statistical data from cooperative statistical survey 
        and projection programs and data from administrative reporting 
        systems that, taken together, enumerate, estimate, and project 
        employment opportunities and conditions at national, State, and 
        local levels in a timely manner, including statistics on--
                ``(i) employment and unemployment status of national, 
            State, and local populations, including self-employed, 
            part-time, and seasonal workers;
                ``(ii) industrial distribution of occupations, as well 
            as current and projected employment opportunities, wages, 
            benefits (where data is available), and skill trends by 
            occupation and industry, with particular attention paid to 
            State and local conditions;
                ``(iii) the incidence of, industrial and geographical 
            location of, and number of workers displaced by, permanent 
            layoffs and plant closings; and
                ``(iv) employment and earnings information maintained 
            in a longitudinal manner to be used for research and 
            program evaluation;
            ``(B) information on State and local employment 
        opportunities, and other appropriate statistical data related 
        to labor market dynamics, which--
                ``(i) shall be current and comprehensive;
                ``(ii) shall meet the needs identified through the 
            consultations described in subparagraphs (A) and (B) of 
            subsection (e)(2); and
                ``(iii) shall meet the needs for the information 
            identified in section 134(d);
            ``(C) technical standards (which the Secretary shall 
        publish annually) for data and information described in 
        subparagraphs (A) and (B) that, at a minimum, meet the criteria 
        of chapter 35 of title 44, United States Code;
            ``(D) procedures to ensure compatibility and additivity of 
        the data and information described in subparagraphs (A) and (B) 
        from national, State, and local levels;
            ``(E) procedures to support standardization and aggregation 
        of data from administrative reporting systems described in 
        subparagraph (A) of employment-related programs;
            ``(F) analysis of data and information described in 
        subparagraphs (A) and (B) for uses such as--
                ``(i) national, State, and local policymaking;
                ``(ii) implementation of Federal policies (including 
            allocation formulas);
                ``(iii) program planning and evaluation; and
                ``(iv) researching labor market dynamics;
            ``(G) wide dissemination of such data, information, and 
        analysis in a user-friendly manner and voluntary technical 
        standards for dissemination mechanisms; and
            ``(H) programs of--
                ``(i) training for effective data dissemination;
                ``(ii) research and demonstration; and
                ``(iii) programs and technical assistance.
        ``(2) Information to be confidential.--
            ``(A) In general.--No officer or employee of the Federal 
        Government or agent of the Federal Government may--
                ``(i) use any submission that is furnished for 
            exclusively statistical purposes under the provisions of 
            this section for any purpose other than the statistical 
            purposes of this section for which the submission is 
            furnished;
                ``(ii) make any publication or media transmittal of the 
            data contained in the submission described in clause (i) 
            that permits information concerning individual subjects to 
            be reasonably inferred by either direct or indirect means; 
            or
                ``(iii) permit anyone other than a sworn officer, 
            employee, or agent of any Federal department or agency, or 
            a contractor (including an employee of a contractor) of 
            such department or agency, to examine an individual 
            submission described in clause (i);
        without the consent of the individual, agency, or other person 
        who is the subject of the submission or provides that 
        submission.
            ``(B) Immunity from legal process.--Any submission 
        (including any data derived from the submission) that is 
        collected and retained by a Federal department or agency, or an 
        officer, employee, agent, or contractor of such a department or 
        agency, for exclusively statistical purposes under this section 
        shall be immune from the legal process and shall not, without 
        the consent of the individual, agency, or other person who is 
        the subject of the submission or provides that submission, be 
        admitted as evidence or used for any purpose in any action, 
        suit, or other judicial or administrative proceeding.
            ``(C) Rule of construction.--Nothing in this section shall 
        be construed to provide immunity from the legal process for 
        such submission (including any data derived from the 
        submission) if the submission is in the possession of any 
        person, agency, or entity other than the Federal Government or 
        an officer, employee, agent, or contractor of the Federal 
        Government, or if the submission is independently collected, 
        retained, or produced for purposes other than the purposes of 
        this Act.
    ``(b) System Responsibilities.--
        ``(1) In general.--The employment statistics system described 
    in subsection (a) shall be planned, administered, overseen, and 
    evaluated through a cooperative governance structure involving the 
    Federal Government and States.
        ``(2) Duties.--The Secretary, with respect to data collection, 
    analysis, and dissemination of labor employment statistics for the 
    system, shall carry out the following duties:
            ``(A) Assign responsibilities within the Department of 
        Labor for elements of the employment statistics system 
        described in subsection (a) to ensure that all statistical and 
        administrative data collected is consistent with appropriate 
        Bureau of Labor Statistics standards and definitions.
            ``(B) Actively seek the cooperation of other Federal 
        agencies to establish and maintain mechanisms for ensuring 
        complementarity and nonduplication in the development and 
        operation of statistical and administrative data collection 
        activities.
            ``(C) Eliminate gaps and duplication in statistical 
        undertakings, with the systemization of wage surveys as an 
        early priority.
            ``(D) In collaboration with the Bureau of Labor Statistics 
        and States, develop and maintain the elements of the employment 
        statistics system described in subsection (a), including the 
        development of consistent procedures and definitions for use by 
        the States in collecting the data and information described in 
        subparagraphs (A) and (B) of subsection (a)(1).
            ``(E) Establish procedures for the system to ensure that--
                ``(i) such data and information are timely;
                ``(ii) paperwork and reporting for the system are 
            reduced to a minimum; and
                ``(iii) States and localities are fully involved in the 
            development and continuous improvement of the system at all 
            levels, including ensuring the provision, to such States 
            and localities, of budget information necessary for 
            carrying out their responsibilities under subsection (e).
    ``(c) Annual Plan.--The Secretary, working through the Bureau of 
Labor Statistics, and in cooperation with the States, and with the 
assistance of other appropriate Federal agencies, shall prepare an 
annual plan which shall be the mechanism for achieving cooperative 
management of the nationwide employment statistics system described in 
subsection (a) and the statewide employment statistics systems that 
comprise the nationwide system. The plan shall--
        ``(1) describe the steps the Secretary has taken in the 
    preceding year and will take in the following 5 years to carry out 
    the duties described in subsection (b)(2);
        ``(2) include a report on the results of an annual consumer 
    satisfaction review concerning the performance of the system, 
    including the performance of the system in addressing the needs of 
    Congress, States, localities, employers, jobseekers, and other 
    consumers;
        ``(3) evaluate the performance of the system and recommend 
    needed improvements, taking into consideration the results of the 
    consumer satisfaction review, with particular attention to the 
    improvements needed at the State and local levels;
        ``(4) justify the budget request for annual appropriations by 
    describing priorities for the fiscal year succeeding the fiscal 
    year in which the plan is developed and priorities for the 5 
    subsequent fiscal years for the system;
        ``(5) describe current (as of the date of the submission of the 
    plan) spending and spending needs to carry out activities under 
    this section, including the costs to States and localities of 
    meeting the requirements of subsection (e)(2); and
        ``(6) describe the involvement of States in the development of 
    the plan, through formal consultations conducted by the Secretary 
    in cooperation with representatives of the Governors of every 
    State, and with representatives of local workforce investment 
    boards, pursuant to a process established by the Secretary in 
    cooperation with the States.
    ``(d) Coordination With the States.--The Secretary, working through 
the Bureau of Labor Statistics, and in cooperation with the States, 
shall--
        ``(1) develop the annual plan described in subsection (c) and 
    address other employment statistics issues by holding formal 
    consultations, at least once each quarter (beginning with the 
    calendar quarter in which the Workforce Investment Act of 1998 is 
    enacted) on the products and administration of the nationwide 
    employment statistics system; and
        ``(2) hold the consultations with representatives from each of 
    the 10 Federal regions of the Department of Labor, elected 
    (pursuant to a process established by the Secretary) by and from 
    the State employment statistics directors affiliated with the State 
    agencies that perform the duties described in subsection (e)(2).
    ``(e) State Responsibilities.--
        ``(1) Designation of state agency.--In order to receive Federal 
    financial assistance under this section, the Governor of a State 
    shall--
            ``(A) designate a single State agency to be responsible for 
        the management of the portions of the employment statistics 
        system described in subsection (a) that comprise a statewide 
        employment statistics system and for the State's participation 
        in the development of the annual plan; and
            ``(B) establish a process for the oversight of such system.
        ``(2) Duties.--In order to receive Federal financial assistance 
    under this section, the State agency shall--
            ``(A) consult with State and local employers, participants, 
        and local workforce investment boards about the labor market 
        relevance of the data to be collected and disseminated through 
        the statewide employment statistics system;
            ``(B) consult with State educational agencies and local 
        educational agencies concerning the provision of employment 
        statistics in order to meet the needs of secondary school and 
        postsecondary school students who seek such information;
            ``(C) collect and disseminate for the system, on behalf of 
        the State and localities in the State, the information and data 
        described in subparagraphs (A) and (B) of subsection (a)(1);
            ``(D) maintain and continuously improve the statewide 
        employment statistics system in accordance with this section;
            ``(E) perform contract and grant responsibilities for data 
        collection, analysis, and dissemination for such system;
            ``(F) conduct such other data collection, analysis, and 
        dissemination activities as will ensure an effective statewide 
        employment statistics system;
            ``(G) actively seek the participation of other State and 
        local agencies in data collection, analysis, and dissemination 
        activities in order to ensure complementary, compatibility, and 
        usefulness of data;
            ``(H) participate in the development of the annual plan 
        described in subsection (c); and
            ``(I) utilize the quarterly records described in section 
        136(f)(2) of the Workforce Investment Act of 1998 to assist the 
        State and other States in measuring State progress on State 
        performance measures.
        ``(3) Rule of construction.--Nothing in this section shall be 
    construed as limiting the ability of a State agency to conduct 
    additional data collection, analysis, and dissemination activities 
    with State funds or with Federal funds from sources other than this 
    section.
    ``(f) Nonduplication Requirement.--None of the functions and 
activities carried out pursuant to this section shall duplicate the 
functions and activities carried out under the Carl D. Perkins 
Vocational and Applied Technology Education Act (20 U.S.C. 2301 et 
seq.).
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of the fiscal years 1999 through 2004.
    ``(h) Definition.--In this section, the term `local area' means the 
smallest geographical area for which data can be produced with 
statistical reliability.''.

SEC. 310. TECHNICAL AMENDMENTS.

    Sections 3(b), 6(b)(1), and 7(d) of the Wagner-Peyser Act (29 
U.S.C. 49b(b), 49e(b)(1), and 49f(d)) are amended by striking 
``Secretary of Labor'' and inserting ``Secretary''.

SEC. 311. EFFECTIVE DATE.

    The amendments made by this subtitle shall take effect on July 1, 
1999.

                Subtitle B--Linkages With Other Programs

SEC. 321. TRADE ACT OF 1974.

    Section 239 of the Trade Act of 1974 (19 U.S.C. 2311) is amended by 
adding at the end the following:
    ``(g) In order to promote the coordination of workforce investment 
activities in each State with activities carried out under this 
chapter, any agreement entered into under this section shall provide 
that the State shall submit to the Secretary, in such form as the 
Secretary may require, the description and information described in 
paragraphs (8) and (14) of section 112(b) of the Workforce Investment 
Act of 1998.''.

SEC. 322. VETERANS' EMPLOYMENT PROGRAMS.

    Chapter 41 of title 38, United States Code, is amended by adding at 
the end the following:

``Sec. 4110B. Coordination and nonduplication

    ``In carrying out this chapter, the Secretary shall require that an 
appropriate administrative entity in each State enter into an agreement 
with the Secretary regarding the implementation of this Act that 
includes the description and information described in paragraphs (8) 
and (14) of section 112(b) of the Workforce Investment Act of 1998.''.

SEC. 323. OLDER AMERICANS ACT OF 1965.

    Section 502(b)(1) of the Older Americans Act of 1965 (42 U.S.C. 
3056(b)(1)) is amended--
        (1) in subparagraph (O), by striking ``; and'' and inserting a 
    semicolon;
        (2) in subparagraph (P), by striking the period and inserting 
    ``; and''; and
        (3) by adding at the end the following subparagraph:
            ``(Q) will provide to the Secretary the description and 
        information described in paragraphs (8) and (14) of section 
        112(b) of the Workforce Investment Act of 1998.''.

         Subtitle C--Twenty-First Century Workforce Commission

SEC. 331. SHORT TITLE.

    This subtitle may be cited as the ``Twenty-First Century Workforce 
Commission Act''.

SEC. 332. FINDINGS.

    Congress finds that--
        (1) information technology is one of the fastest growing areas 
    in the United States economy;
        (2) the United States is a world leader in the information 
    technology industry;
        (3) the continued growth and prosperity of the information 
    technology industry is important to the continued prosperity of the 
    United States economy;
        (4) highly skilled employees are essential for the success of 
    business entities in the information technology industry and other 
    business entities that use information technology;
        (5) employees in information technology jobs are highly paid;
        (6) as of the date of enactment of this Act, these employees 
    are in high demand in all industries and all regions of the United 
    States; and
        (7) through a concerted effort by business entities, the 
    Federal Government, the governments of States and political 
    subdivisions of States, and educational institutions, more 
    individuals will gain the skills necessary to enter into a 
    technology-based job market, ensuring that the United States 
    remains the world leader in the information technology industry.

SEC. 333. DEFINITIONS.

    In this subtitle:
        (1) Business entity.--The term ``business entity'' means a 
    firm, corporation, association, partnership, consortium, joint 
    venture, or other form of enterprise.
        (2) Commission.--The term ``Commission'' means the Twenty-First 
    Century Workforce Commission established under section 334.
        (3) Information technology.--The term ``information 
    technology'' has the meaning given that term in section 5002 of the 
    Information Technology Management Reform Act of 1996 (110 Stat. 
    679).
        (4) State.--The term ``State'' means each of the several States 
    of the United States and the District of Columbia.

SEC. 334. ESTABLISHMENT OF TWENTY-FIRST CENTURY WORKFORCE COMMISSION.

    (a) Establishment.--There is established a commission to be known 
as the Twenty-First Century Workforce Commission.
    (b) Membership.--
        (1) Composition.--
            (A) In general.--The Commission shall be composed of 15 
        voting members, of which--
                (i) five members shall be appointed by the President;
                (ii) five members shall be appointed by the Majority 
            Leader of the Senate; and
                (iii) five members shall be appointed by the Speaker of 
            the House of Representatives.
            (B) Governmental representatives.--Of the members appointed 
        under this subsection, three members shall be representatives 
        of the governments of States and political subdivisions of 
        States, one of whom shall be appointed by the President, one of 
        whom shall be appointed by the Majority Leader of the Senate, 
        and one of whom shall be appointed by the Speaker of the House 
        of Representatives.
            (C) Educators.--Of the members appointed under this 
        subsection, three shall be educators who are selected from 
        among elementary, secondary, vocational, and postsecondary 
        educators--
                (i) one of whom shall be appointed by the President;
                (ii) one of whom shall be appointed by the Majority 
            Leader of the Senate; and
                (iii) one of whom shall be appointed by the Speaker of 
            the House of Representatives.
            (D) Business representatives.--
                (i) In general.--Of the members appointed under this 
            subsection, eight shall be representatives of business 
            entities (at least three of which shall be individuals who 
            are employed by noninformation technology business 
            entities), two of whom shall be appointed by the President, 
            three of whom shall be appointed by the Majority Leader of 
            the Senate, and three of whom shall be appointed by the 
            Speaker of the House of Representatives.
                (ii) Size.--Members appointed under this subsection in 
            accordance with clause (i) shall, to the extent 
            practicable, include individuals from business entities of 
            a size that is small or average.
            (E) Labor representative.--Of the members appointed under 
        this subsection, one shall be a representative of a labor 
        organization who has been nominated by a national labor 
        federation and who shall be appointed by the President.
            (F) Ex officio members.--The Commission shall include two 
        nonvoting members, of which--
                (i) one member shall be an officer or employee of the 
            Department of Labor, who shall be appointed by the 
            President; and
                (ii) one member shall be an officer or employee of the 
            Department of Education, who shall be appointed by the 
            President.
        (2) Date.--The appointments of the members of the Commission 
    shall be made by the later of--
            (A) October 31, 1998; or
            (B) the date that is 45 days after the date of enactment of 
        this Act.
    (c) Period of Appointment; Vacancies.--Members shall be appointed 
for the life of the Commission. Any vacancy in the Commission shall not 
affect its powers, but shall be filled in the same manner as the 
original appointment.
    (d) Initial Meeting.--No later than 30 days after the date on which 
all members of the Commission have been appointed, the Commission shall 
hold its first meeting.
    (e) Meetings.--The Commission shall meet at the call of the 
Chairperson.
    (f) Quorum.--A majority of the members of the Commission shall 
constitute a quorum, but a lesser number of members may hold hearings.
    (g) Chairperson and Vice Chairperson.--The Commission shall select 
by vote a chairperson and vice chairperson from among its voting 
members.

SEC. 335. DUTIES OF THE COMMISSION.

    (a) Study.--
        (1) In general.--The Commission shall conduct a thorough study 
    of all matters relating to the information technology workforce in 
    the United States.
        (2) Matters studied.--The matters studied by the Commission 
    shall include an examination of--
            (A) the skills necessary to enter the information 
        technology workforce;
            (B) ways to expand the number of skilled information 
        technology workers; and
            (C) the relative efficacy of programs in the United States 
        and foreign countries to train information technology workers, 
        with special emphasis on programs that provide for secondary 
        education or postsecondary education in a program other than a 
        4-year baccalaureate program (including associate degree 
        programs and graduate degree programs).
        (3) Public hearings.--As part of the study conducted under this 
    subsection, the Commission shall hold public hearings in each 
    region of the United States concerning the issues referred to in 
    subparagraphs (A) and (B) of paragraph (2).
        (4) Existing information.--To the extent practicable, in 
    carrying out the study under this subsection, the Commission shall 
    identify and use existing information related to the issues 
    referred to in subparagraphs (A) and (B) of paragraph (2).
        (5) Consultation with chief information officers council.--In 
    carrying out the study under this subsection, the Commission shall 
    consult with the Chief Information Officers Council established 
    under Executive Order No. 13011.
    (b) Report.--Not later than 6 months after the first meeting of the 
Commission, the Commission shall submit a report to the President and 
the Congress that shall contain a detailed statement of the findings 
and conclusions of the Commission resulting from the study, together 
with its recommendations for such legislation and administrative 
actions as the Commission considers to be appropriate.
    (c) Facilitation of Exchange of Information.--In carrying out the 
study under subsection (a), the Commission shall, to the extent 
practicable, facilitate the exchange of information concerning the 
issues that are the subject of the study among--
        (1) officials of the Federal Government and the governments of 
    States and political subdivisions of States; and
        (2) educators from Federal, State, and local institutions of 
    higher education and secondary schools.

SEC. 336. POWERS OF THE COMMISSION.

    (a) Hearings.--The Commission may hold such hearings, sit and act 
at such times and places, take such testimony, and receive such 
evidence as the Commission considers advisable to carry out the 
purposes of this subtitle.
    (b) Information From Federal Agencies.--The Commission may secure 
directly from any Federal department or agency such information as the 
Commission considers necessary to carry out the provisions of this 
subtitle. Upon request of the Chairperson of the Commission, the head 
of such department or agency shall furnish such information to the 
Commission.
    (c) Postal Services.--The Commission may use the United States 
mails in the same manner and under the same conditions as other 
departments and agencies of the Federal Government.
    (d) Gifts.--The Commission may accept, use, and dispose of gifts or 
donations of services or property.

SEC. 337. COMMISSION PERSONNEL MATTERS.

    (a) Compensation of Members.--Except as provided in subsection (b), 
each member of the Commission who is not an officer or employee of the 
Federal Government shall serve without compensation. All members of the 
Commission who are officers or employees of the United States shall 
serve without compensation in addition to that received for their 
services as officers or employees of the United States.
    (b) Travel Expenses.--The members of the Commission shall be 
allowed travel expenses, including per diem in lieu of subsistence, at 
rates authorized for employees of agencies under subchapter I of 
chapter 57 of title 5, United States Code, while away from their homes 
or regular places of business in the performance of services for the 
Commission.
    (c) Staff.--
        (1) In general.--The Chairperson of the Commission may, without 
    regard to the civil service laws and regulations, appoint and 
    terminate an executive director and such other additional personnel 
    as may be necessary to enable the Commission to perform its duties. 
    The employment of an executive director shall be subject to 
    confirmation by the Commission.
        (2) Compensation.--The Chairperson of the Commission may fix 
    the compensation of the executive director and other personnel 
    without regard to the provisions of chapter 51 and subchapter III 
    of chapter 53 of title 5, United States Code, relating to 
    classification of positions and General Schedule pay rates, except 
    that the rate of pay for the executive director and other personnel 
    may not exceed the rate payable for level V of the Executive 
    Schedule under section 5316 of such title.
    (d) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Commission without reimbursement, and 
such detail shall be without interruption or loss of civil service 
status or privilege.
    (e) Procurement of Temporary and Intermittent Services.--The 
Chairperson of the Commission may procure temporary and intermittent 
services under section 3109(b) of title 5, United States Code, at rates 
for individuals that do not exceed the daily equivalent of the annual 
rate of basic pay prescribed for level V of the Executive Schedule 
under section 5316 of such title.

SEC. 338. TERMINATION OF THE COMMISSION.

    The Commission shall terminate on the date that is 90 days after 
the date on which the Commission submits its report under section 
335(b).

SEC. 339. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated such sums 
as may be necessary for fiscal year 1999 to the Commission to carry out 
the purposes of this subtitle.
    (b) Availability.--Any sums appropriated under the authorization 
contained in this section shall remain available, without fiscal year 
limitation, until expended.

 Subtitle D--Application of Civil Rights and Labor-Management Laws to 
                      the Smithsonian Institution

SEC. 341. APPLICATION OF CIVIL RIGHTS AND LABOR-MANAGEMENT LAWS TO THE 
              SMITHSONIAN INSTITUTION.

    (a) Prohibition on Employment Discrimination on Basis of Race, 
Color, Religion, Sex, and National Origin.--Section 717(a) of the Civil 
Rights Act of 1964 (42 U.S.C. 2000e-16(a)) is amended by inserting ``in 
the Smithsonian Institution,'' before ``and in the Government Printing 
Office,''.
    (b) Prohibition on Employment Discrimination on Basis of Age.--
Section 15(a) of the Age Discrimination in Employment Act of 1967 (29 
U.S.C. 633a(a)) is amended by inserting ``in the Smithsonian 
Institution,'' before ``and in the Government Printing Office,''.
    (c) Prohibition on Employment Discrimination on Basis of 
Disability.--Section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 
791) is amended--
        (1) in the fourth sentence of subsection (a), in paragraph (1), 
    by inserting ``and the Smithsonian Institution'' after 
    ``Government'';
        (2) in the first sentence of subsection (b)--
            (A) by inserting ``and the Smithsonian Institution'' after 
        ``in the executive branch''; and
            (B) by striking ``such department, agency, or 
        instrumentality'' and inserting ``such department, agency, 
        instrumentality, or Institution''; and
        (3) in subsection (d), by inserting ``and the Smithsonian 
    Institution'' after ``instrumentality''.
    (d) Application.--The amendments made by subsections (a), (b), and 
(c) shall take effect on the date of enactment of this Act and shall 
apply to and may be raised in any administrative or judicial claim or 
action brought before such date of enactment but pending on such date, 
and any administrative or judicial claim or action brought after such 
date regardless of whether the claim or action arose prior to such 
date, if the claim or action was brought within the applicable statute 
of limitations.
    (e) Labor-Management Laws.--Section 7103(a)(3) of title 5, United 
States Code, is amended--
        (1) by striking ``and'' after ``Library of Congress,''; and
        (2) by inserting ``and the Smithsonian Institution'' after 
    ``Government Printing Office,''.

            TITLE IV--REHABILITATION ACT AMENDMENTS OF 1998

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Rehabilitation Act Amendments of 
1998''.

SEC. 402. TITLE.

    The title of the Rehabilitation Act of 1973 is amended by striking 
``to establish special responsibilities'' and all that follows and 
inserting the following: ``to create linkage between State vocational 
rehabilitation programs and workforce investment activities carried out 
under title I of the Workforce Investment Act of 1998, to establish 
special responsibilities for the Secretary of Education for 
coordination of all activities with respect to individuals with 
disabilities within and across programs administered by the Federal 
Government, and for other purposes.''.

SEC. 403. GENERAL PROVISIONS.

    The Rehabilitation Act of 1973 is amended by striking the matter 
preceding title I and inserting the following:


                     ``short title; table of contents

    ``Sec. 1. (a) Short Title.--This Act may be cited as the 
`Rehabilitation Act of 1973'.
    ``(b) Table of Contents.--The table of contents for this Act is as 
follows:
``Sec.  1. Short title; table of contents.
``Sec.  2. Findings; purpose; policy.
``Sec.  3. Rehabilitation Services Administration.
``Sec.  4. Advance funding.
``Sec.  5. Joint funding.
``Sec.  6. Definitions.
``Sec.  7. Allotment percentage.
``Sec.  8. Nonduplication.
``Sec.  9. Application of other laws.
``Sec. 10. Administration of the Act.
``Sec. 11. Reports.
``Sec. 12. Evaluation.
``Sec. 13. Information clearinghouse.
``Sec. 14. Transfer of funds.
``Sec. 15. State administration.
``Sec. 16. Review of applications.
``Sec. 17. Carryover.
``Sec. 18. Client assistance information.
``Sec. 19. Traditionally underserved populations.

              ``TITLE I--VOCATIONAL REHABILITATION SERVICES

                      ``Part A--General Provisions

``Sec. 100. Declaration of policy; authorization of appropriations.
``Sec. 101. State plans.
``Sec. 102. Eligibility and individualized plan for employment.
``Sec. 103. Vocational rehabilitation services.
``Sec. 104. Non-Federal share for establishment of program.
``Sec. 105. State Rehabilitation Council.
``Sec. 106. Evaluation standards and performance indicators.
``Sec. 107. Monitoring and review.
``Sec. 108. Expenditure of certain amounts.
``Sec. 109. Training of employers with respect to Americans with 
          Disabilities Act of 1990.

           ``Part B--Basic Vocational Rehabilitation Services

``Sec. 110. State allotments.
``Sec. 111. Payments to States.
``Sec. 112. Client assistance program.

      ``Part C--American Indian Vocational Rehabilitation Services

``Sec. 121. Vocational rehabilitation services grants.

     ``Part D--Vocational Rehabilitation Services Client Information

``Sec. 131. Data sharing.

                    ``TITLE II--RESEARCH AND TRAINING

``Sec. 200. Declaration of purpose.
``Sec. 201. Authorization of appropriations.
``Sec. 202. National Institute on Disability and Rehabilitation 
          Research.
``Sec. 203. Interagency Committee.
``Sec. 204. Research and other covered activities.
``Sec. 205. Rehabilitation Research Advisory Council.

     ``TITLE III--PROFESSIONAL DEVELOPMENT AND SPECIAL PROJECTS AND 
                             DEMONSTRATIONS

``Sec. 301. Declaration of purpose and competitive basis of grants and 
          contracts.
``Sec. 302. Training.
``Sec. 303. Demonstration and training programs.
``Sec. 304. Migrant and seasonal farmworkers.
``Sec. 305. Recreational programs.
``Sec. 306. Measuring of project outcomes and performance.

               ``TITLE IV--NATIONAL COUNCIL ON DISABILITY

``Sec. 400. Establishment of National Council on Disability.
``Sec. 401. Duties of National Council.
``Sec. 402. Compensation of National Council members.
``Sec. 403. Staff of National Council.
``Sec. 404. Administrative powers of National Council.
``Sec. 405. Authorization of Appropriations.

                     ``TITLE V--RIGHTS AND ADVOCACY

``Sec. 501. Employment of individuals with disabilities.
``Sec. 502. Architectural and Transportation Barriers Compliance Board.
``Sec. 503. Employment under Federal contracts.
``Sec. 504. Nondiscrimination under Federal grants and programs.
``Sec. 505. Remedies and attorneys' fees.
``Sec. 506. Secretarial responsibilities.
``Sec. 507. Interagency Disability Coordinating Council.
``Sec. 508. Electronic and information technology regulations.
``Sec. 509. Protection and advocacy of individual rights.

 ``TITLE VI--EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS WITH DISABILITIES

``Sec. 601. Short title.

                    ``Part A--Projects With Industry

``Sec. 611. Projects with industry.
``Sec. 612. Authorization of appropriations.

 ``Part B--Supported Employment Services for Individuals With the Most 
                        Significant Disabilities

``Sec. 621. Purpose.
``Sec. 622. Allotments.
``Sec. 623. Availability of services.
``Sec. 624. Eligibility.
``Sec. 625. State plan.
``Sec. 626. Restriction.
``Sec. 627. Savings provision.
``Sec. 628. Authorization of appropriations.

  ``TITLE VII--INDEPENDENT LIVING SERVICES AND CENTERS FOR INDEPENDENT 
                                 LIVING

         ``Chapter 1--Individuals With Significant Disabilities

                      ``Part A--General Provisions

``Sec. 701. Purpose.
``Sec. 702. Definitions.
``Sec. 703. Eligibility for receipt of services.
``Sec. 704. State plan.
``Sec. 705. Statewide Independent Living Council.
``Sec. 706. Responsibilities of the Commissioner.

                  ``Part B--Independent Living Services

``Sec. 711. Allotments.
``Sec. 712. Payments to States from allotments.
``Sec. 713. Authorized uses of funds.
``Sec. 714. Authorization of appropriations.

                ``Part C--Centers for Independent Living

``Sec. 721. Program authorization.
``Sec. 722. Grants to centers for independent living in States in which 
          Federal funding exceeds State funding.
``Sec. 723. Grants to centers for independent living in States in which 
          State funding equals or exceeds Federal funding.
``Sec. 724. Centers operated by State agencies.
``Sec. 725. Standards and assurances for centers for independent living.
``Sec. 726. Definitions.
``Sec. 727. Authorization of appropriations.

 ``Chapter 2--Independent Living Services for Older Individuals Who Are 
                                  Blind

``Sec. 751. Definition.
``Sec. 752. Program of grants.
``Sec. 753. Authorization of appropriations.


                       ``findings; purpose; policy

    ``Sec. 2. (a) Findings.--Congress finds that--
        ``(1) millions of Americans have one or more physical or mental 
    disabilities and the number of Americans with such disabilities is 
    increasing;
        ``(2) individuals with disabilities constitute one of the most 
    disadvantaged groups in society;
        ``(3) disability is a natural part of the human experience and 
    in no way diminishes the right of individuals to--
            ``(A) live independently;
            ``(B) enjoy self-determination;
            ``(C) make choices;
            ``(D) contribute to society;
            ``(E) pursue meaningful careers; and
            ``(F) enjoy full inclusion and integration in the economic, 
        political, social, cultural, and educational mainstream of 
        American society;
        ``(4) increased employment of individuals with disabilities can 
    be achieved through implementation of statewide workforce 
    investment systems under title I of the Workforce Investment Act of 
    1998 that provide meaningful and effective participation for 
    individuals with disabilities in workforce investment activities 
    and activities carried out under the vocational rehabilitation 
    program established under title I, and through the provision of 
    independent living services, support services, and meaningful 
    opportunities for employment in integrated work settings through 
    the provision of reasonable accommodations;
        ``(5) individuals with disabilities continually encounter 
    various forms of discrimination in such critical areas as 
    employment, housing, public accommodations, education, 
    transportation, communication, recreation, institutionalization, 
    health services, voting, and public services; and
        ``(6) the goals of the Nation properly include the goal of 
    providing individuals with disabilities with the tools necessary 
    to--
            ``(A) make informed choices and decisions; and
            ``(B) achieve equality of opportunity, full inclusion and 
        integration in society, employment, independent living, and 
        economic and social self-sufficiency, for such individuals.
    ``(b) Purpose.--The purposes of this Act are--
        ``(1) to empower individuals with disabilities to maximize 
    employment, economic self-sufficiency, independence, and inclusion 
    and integration into society, through--
            ``(A) statewide workforce investment systems implemented in 
        accordance with title I of the Workforce Investment Act of 1998 
        that include, as integral components, comprehensive and 
        coordinated state-of-the-art programs of vocational 
        rehabilitation;
            ``(B) independent living centers and services;
            ``(C) research;
            ``(D) training;
            ``(E) demonstration projects; and
            ``(F) the guarantee of equal opportunity; and
        ``(2) to ensure that the Federal Government plays a leadership 
    role in promoting the employment of individuals with disabilities, 
    especially individuals with significant disabilities, and in 
    assisting States and providers of services in fulfilling the 
    aspirations of such individuals with disabilities for meaningful 
    and gainful employment and independent living.
    ``(c) Policy.--It is the policy of the United States that all 
programs, projects, and activities receiving assistance under this Act 
shall be carried out in a manner consistent with the principles of--
        ``(1) respect for individual dignity, personal responsibility, 
    self-determination, and pursuit of meaningful careers, based on 
    informed choice, of individuals with disabilities;
        ``(2) respect for the privacy, rights, and equal access 
    (including the use of accessible formats), of the individuals;
        ``(3) inclusion, integration, and full participation of the 
    individuals;
        ``(4) support for the involvement of an individual's 
    representative if an individual with a disability requests, 
    desires, or needs such support; and
        ``(5) support for individual and systemic advocacy and 
    community involvement.


                 ``rehabilitation services administration

    ``Sec. 3. (a) There is established in the Office of the Secretary a 
Rehabilitation Services Administration which shall be headed by a 
Commissioner (hereinafter in this Act referred to as the 
`Commissioner') appointed by the President by and with the advice and 
consent of the Senate. Except for titles IV and V and as otherwise 
specifically provided in this Act, such Administration shall be the 
principal agency, and the Commissioner shall be the principal officer, 
of such Department for carrying out this Act. The Commissioner shall be 
an individual with substantial experience in rehabilitation and in 
rehabilitation program management. In the performance of the functions 
of the office, the Commissioner shall be directly responsible to the 
Secretary or to the Under Secretary or an appropriate Assistant 
Secretary of such Department, as designated by the Secretary. The 
functions of the Commissioner shall not be delegated to any officer not 
directly responsible, both with respect to program operation and 
administration, to the Commissioner. Any reference in this Act to 
duties to be carried out by the Commissioner shall be considered to be 
a reference to duties to be carried out by the Secretary acting through 
the Commissioner. In carrying out any of the functions of the office 
under this Act, the Commissioner shall be guided by general policies of 
the National Council on Disability established under title IV of this 
Act.
    ``(b) The Secretary shall take whatever action is necessary to 
ensure that funds appropriated pursuant to this Act are expended only 
for the programs, personnel, and administration of programs carried out 
under this Act.


                            ``advance funding

    ``Sec. 4. (a) For the purpose of affording adequate notice of 
funding available under this Act, appropriations under this Act are 
authorized to be included in the appropriation Act for the fiscal year 
preceding the fiscal year for which they are available for obligation.
    ``(b) In order to effect a transition to the advance funding method 
of timing appropriation action, the authority provided by subsection 
(a) of this section shall apply notwithstanding that its initial 
application will result in the enactment in the same year (whether in 
the same appropriation Act or otherwise) of two separate 
appropriations, one for the then current fiscal year and one for the 
succeeding fiscal year.


                             ``joint funding

    ``Sec. 5. Pursuant to regulations prescribed by the President, and 
to the extent consistent with the other provisions of this Act, where 
funds are provided for a single project by more than one Federal agency 
to an agency or organization assisted under this Act, the Federal 
agency principally involved may be designated to act for all in 
administering the funds provided, and, in such cases, a single non-
Federal share requirement may be established according to the 
proportion of funds advanced by each agency. When the principal agency 
involved is the Rehabilitation Services Administration, it may waive 
any grant or contract requirement (as defined by such regulations) 
under or pursuant to any law other than this Act, which requirement is 
inconsistent with the similar requirements of the administering agency 
under or pursuant to this Act.


                              ``definitions

    ``Sec. 6. For the purposes of this Act:
        ``(1) The term `administrative costs' means expenditures 
    incurred in the performance of administrative functions under the 
    vocational rehabilitation program carried out under title I, 
    including expenses related to program planning, development, 
    monitoring, and evaluation, including expenses for--
            ``(A) quality assurance;
            ``(B) budgeting, accounting, financial management, 
        information systems, and related data processing;
            ``(C) providing information about the program to the 
        public;
            ``(D) technical assistance and support services to other 
        State agencies, private nonprofit organizations, and businesses 
        and industries, except for technical assistance and support 
        services described in section 103(b)(5);
            ``(E) the State Rehabilitation Council and other advisory 
        committees;
            ``(F) professional organization membership dues for 
        designated State unit employees;
            ``(G) the removal of architectural barriers in State 
        vocational rehabilitation agency offices and State operated 
        rehabilitation facilities;
            ``(H) operating and maintaining designated State unit 
        facilities, equipment, and grounds;
            ``(I) supplies;
            ``(J) administration of the comprehensive system of 
        personnel development described in section 101(a)(7), including 
        personnel administration, administration of affirmative action 
        plans, and training and staff development;
            ``(K) administrative salaries, including clerical and other 
        support staff salaries, in support of these administrative 
        functions;
            ``(L) travel costs related to carrying out the program, 
        other than travel costs related to the provision of services;
            ``(M) costs incurred in conducting reviews of 
        rehabilitation counselor or coordinator determinations under 
        section 102(c); and
            ``(N) legal expenses required in the administration of the 
        program.
        ``(2) Assessment for determining eligibility and vocational 
    rehabilitation needs.--The term `assessment for determining 
    eligibility and vocational rehabilitation needs' means, as 
    appropriate in each case--
            ``(A)(i) a review of existing data--
                ``(I) to determine whether an individual is eligible 
            for vocational rehabilitation services; and
                ``(II) to assign priority for an order of selection 
            described in section 101(a)(5)(A) in the States that use an 
            order of selection pursuant to section 101(a)(5)(A); and
            ``(ii) to the extent necessary, the provision of 
        appropriate assessment activities to obtain necessary 
        additional data to make such determination and assignment;
            ``(B) to the extent additional data is necessary to make a 
        determination of the employment outcomes, and the objectives, 
        nature, and scope of vocational rehabilitation services, to be 
        included in the individualized plan for employment of an 
        eligible individual, a comprehensive assessment to determine 
        the unique strengths, resources, priorities, concerns, 
        abilities, capabilities, interests, and informed choice, 
        including the need for supported employment, of the eligible 
        individual, which comprehensive assessment--
                ``(i) is limited to information that is necessary to 
            identify the rehabilitation needs of the individual and to 
            develop the individualized plan for employment of the 
            eligible individual;
                ``(ii) uses, as a primary source of such information, 
            to the maximum extent possible and appropriate and in 
            accordance with confidentiality requirements--

                    ``(I) existing information obtained for the 
                purposes of determining the eligibility of the 
                individual and assigning priority for an order of 
                selection described in section 101(a)(5)(A) for the 
                individual; and
                    ``(II) such information as can be provided by the 
                individual and, where appropriate, by the family of the 
                individual;

                ``(iii) may include, to the degree needed to make such 
            a determination, an assessment of the personality, 
            interests, interpersonal skills, intelligence and related 
            functional capacities, educational achievements, work 
            experience, vocational aptitudes, personal and social 
            adjustments, and employment opportunities of the 
            individual, and the medical, psychiatric, psychological, 
            and other pertinent vocational, educational, cultural, 
            social, recreational, and environmental factors, that 
            affect the employment and rehabilitation needs of the 
            individual; and
                ``(iv) may include, to the degree needed, an appraisal 
            of the patterns of work behavior of the individual and 
            services needed for the individual to acquire occupational 
            skills, and to develop work attitudes, work habits, work 
            tolerance, and social and behavior patterns necessary for 
            successful job performance, including the utilization of 
            work in real job situations to assess and develop the 
            capacities of the individual to perform adequately in a 
            work environment;
            ``(C) referral, for the provision of rehabilitation 
        technology services to the individual, to assess and develop 
        the capacities of the individual to perform in a work 
        environment; and
            ``(D) an exploration of the individual's abilities, 
        capabilities, and capacity to perform in work situations, which 
        shall be assessed periodically during trial work experiences, 
        including experiences in which the individual is provided 
        appropriate supports and training.
        ``(3) Assistive technology device.--The term `assistive 
    technology device' has the meaning given such term in section 3(2) 
    of the Technology-Related Assistance for Individuals With 
    Disabilities Act of 1988 (29 U.S.C. 2202(2)), except that the 
    reference in such section to the term `individuals with 
    disabilities' shall be deemed to mean more than one individual with 
    a disability as defined in paragraph (20)(A).
        ``(4) Assistive technology service.--The term `assistive 
    technology service' has the meaning given such term in section 3(3) 
    of the Technology-Related Assistance for Individuals With 
    Disabilities Act of 1988 (29 U.S.C. 2202(3)), except that the 
    reference in such section--
            ``(A) to the term `individual with a disability' shall be 
        deemed to mean an individual with a disability, as defined in 
        paragraph (20)(A); and
            ``(B) to the term `individuals with disabilities' shall be 
        deemed to mean more than one such individual.
        ``(5) Community rehabilitation program.--The term `community 
    rehabilitation program' means a program that provides directly or 
    facilitates the provision of vocational rehabilitation services to 
    individuals with disabilities, and that provides, singly or in 
    combination, for an individual with a disability to enable the 
    individual to maximize opportunities for employment, including 
    career advancement--
            ``(A) medical, psychiatric, psychological, social, and 
        vocational services that are provided under one management;
            ``(B) testing, fitting, or training in the use of 
        prosthetic and orthotic devices;
            ``(C) recreational therapy;
            ``(D) physical and occupational therapy;
            ``(E) speech, language, and hearing therapy;
            ``(F) psychiatric, psychological, and social services, 
        including positive behavior management;
            ``(G) assessment for determining eligibility and vocational 
        rehabilitation needs;
            ``(H) rehabilitation technology;
            ``(I) job development, placement, and retention services;
            ``(J) evaluation or control of specific disabilities;
            ``(K) orientation and mobility services for individuals who 
        are blind;
            ``(L) extended employment;
            ``(M) psychosocial rehabilitation services;
            ``(N) supported employment services and extended services;
            ``(O) services to family members when necessary to the 
        vocational rehabilitation of the individual;
            ``(P) personal assistance services; or
            ``(Q) services similar to the services described in one of 
        subparagraphs (A) through (P).
        ``(6) Construction; cost of construction.--
            ``(A) Construction.--The term `construction' means--
                ``(i) the construction of new buildings;
                ``(ii) the acquisition, expansion, remodeling, 
            alteration, and renovation of existing buildings; and
                ``(iii) initial equipment of buildings described in 
            clauses (i) and (ii).
            ``(B) Cost of construction.--The term `cost of 
        construction' includes architects' fees and the cost of 
        acquisition of land in connection with construction but does 
        not include the cost of offsite improvements.
        ``(7) Criminal act.--The term `criminal act' means any crime, 
    including an act, omission, or possession under the laws of the 
    United States or a State or unit of general local government, which 
    poses a substantial threat of personal injury, notwithstanding that 
    by reason of age, insanity, or intoxication or otherwise the person 
    engaging in the act, omission, or possession was legally incapable 
    of committing a crime.
        ``(8) Designated state agency; designated state unit.--
            ``(A) Designated state agency.--The term `designated State 
        agency' means an agency designated under section 101(a)(2)(A).
            ``(B) Designated state unit.--The term `designated State 
        unit' means--
                ``(i) any State agency unit required under section 
            101(a)(2)(B)(ii); or
                ``(ii) in cases in which no such unit is so required, 
            the State agency described in section 101(a)(2)(B)(i).
        ``(9) Disability.--The term `disability' means--
            ``(A) except as otherwise provided in subparagraph (B), a 
        physical or mental impairment that constitutes or results in a 
        substantial impediment to employment; or
            ``(B) for purposes of sections 2, 14, and 15, and titles 
        II, IV, V, and VII, a physical or mental impairment that 
        substantially limits one or more major life activities.
        ``(10) Drug and illegal use of drugs.--
            ``(A) Drug.--The term `drug' means a controlled substance, 
        as defined in schedules I through V of section 202 of the 
        Controlled Substances Act (21 U.S.C. 812).
            ``(B) Illegal use of drugs.--The term `illegal use of 
        drugs' means the use of drugs, the possession or distribution 
        of which is unlawful under the Controlled Substances Act. Such 
        term does not include the use of a drug taken under supervision 
        by a licensed health care professional, or other uses 
        authorized by the Controlled Substances Act or other provisions 
        of Federal law.
        ``(11) Employment outcome.--The term `employment outcome' 
    means, with respect to an individual--
            ``(A) entering or retaining full-time or, if appropriate, 
        part-time competitive employment in the integrated labor 
        market;
            ``(B) satisfying the vocational outcome of supported 
        employment; or
            ``(C) satisfying any other vocational outcome the Secretary 
        may determine to be appropriate (including satisfying the 
        vocational outcome of self-employment, telecommuting, or 
        business ownership),
    in a manner consistent with this Act.
        ``(12) Establishment of a community rehabilitation program.--
    The term `establishment of a community rehabilitation program' 
    includes the acquisition, expansion, remodeling, or alteration of 
    existing buildings necessary to adapt them to community 
    rehabilitation program purposes or to increase their effectiveness 
    for such purposes (subject, however, to such limitations as the 
    Secretary may determine, in accordance with regulations the 
    Secretary shall prescribe, in order to prevent impairment of the 
    objectives of, or duplication of, other Federal laws providing 
    Federal assistance in the construction of facilities for community 
    rehabilitation programs), and may include such additional equipment 
    and staffing as the Commissioner considers appropriate.
        ``(13) Extended services.--The term `extended services' means 
    ongoing support services and other appropriate services, needed to 
    support and maintain an individual with a most significant 
    disability in supported employment, that--
            ``(A) are provided singly or in combination and are 
        organized and made available in such a way as to assist an 
        eligible individual in maintaining supported employment;
            ``(B) are based on a determination of the needs of an 
        eligible individual, as specified in an individualized plan for 
        employment; and
            ``(C) are provided by a State agency, a nonprofit private 
        organization, employer, or any other appropriate resource, 
        after an individual has made the transition from support 
        provided by the designated State unit.
        ``(14) Federal share.--
            ``(A) In general.--Subject to subparagraph (B), the term 
        `Federal share' means 78.7 percent.
            ``(B) Exception.--The term `Federal share' means the share 
        specifically set forth in section 111(a)(3), except that with 
        respect to payments pursuant to part B of title I to any State 
        that are used to meet the costs of construction of those 
        rehabilitation facilities identified in section 103(b)(2) in 
        such State, the Federal share shall be the percentages 
        determined in accordance with the provisions of section 
        111(a)(3) applicable with respect to the State.
            ``(C) Relationship to expenditures by a political 
        subdivision.--For the purpose of determining the non-Federal 
        share with respect to a State, expenditures by a political 
        subdivision thereof or by a local agency shall be regarded as 
        expenditures by such State, subject to such limitations and 
        conditions as the Secretary shall by regulation prescribe.
        ``(15) Governor.--The term `Governor' means a chief executive 
    officer of a State.
        ``(16) Impartial hearing officer.--
            ``(A) In general.--The term `impartial hearing officer' 
        means an individual--
                ``(i) who is not an employee of a public agency (other 
            than an administrative law judge, hearing examiner, or 
            employee of an institution of higher education);
                ``(ii) who is not a member of the State Rehabilitation 
            Council described in section 105;
                ``(iii) who has not been involved previously in the 
            vocational rehabilitation of the applicant or client;
                ``(iv) who has knowledge of the delivery of vocational 
            rehabilitation services, the State plan under section 101, 
            and the Federal and State rules governing the provision of 
            such services and training with respect to the performance 
            of official duties; and
                ``(v) who has no personal or financial interest that 
            would be in conflict with the objectivity of the 
            individual.
            ``(B) Construction.--An individual shall not be considered 
        to be an employee of a public agency for purposes of 
        subparagraph (A)(i) solely because the individual is paid by 
        the agency to serve as a hearing officer.
        ``(17) Independent living core services.--The term `independent 
    living core services' means--
            ``(A) information and referral services;
            ``(B) independent living skills training;
            ``(C) peer counseling (including cross-disability peer 
        counseling); and
            ``(D) individual and systems advocacy.
        ``(18) Independent living services.--The term `inde- pendent 
    living services' includes--
            ``(A) independent living core services; and
            ``(B)(i) counseling services, including psychological, 
        psychotherapeutic, and related services;
            ``(ii) services related to securing housing or shelter, 
        including services related to community group living, and 
        supportive of the purposes of this Act and of the titles of 
        this Act, and adaptive housing services (including appropriate 
        accommodations to and modifications of any space used to serve, 
        or occupied by, individuals with disabilities);
            ``(iii) rehabilitation technology;
            ``(iv) mobility training;
            ``(v) services and training for individuals with cognitive 
        and sensory disabilities, including life skills training, and 
        interpreter and reader services;
            ``(vi) personal assistance services, including attendant 
        care and the training of personnel providing such services;
            ``(vii) surveys, directories, and other activities to 
        identify appropriate housing, recreation opportunities, and 
        accessible transportation, and other support services;
            ``(viii) consumer information programs on rehabilitation 
        and independent living services available under this Act, 
        especially for minorities and other individuals with 
        disabilities who have traditionally been unserved or 
        underserved by programs under this Act;
            ``(ix) education and training necessary for living in a 
        community and participating in community activities;
            ``(x) supported living;
            ``(xi) transportation, including referral and assistance 
        for such transportation and training in the use of public 
        transportation vehicles and systems;
            ``(xii) physical rehabilitation;
            ``(xiii) therapeutic treatment;
            ``(xiv) provision of needed prostheses and other appliances 
        and devices;
            ``(xv) individual and group social and recreational 
        services;
            ``(xvi) training to develop skills specifically designed 
        for youths who are individuals with disabilities to promote 
        self-awareness and esteem, develop advocacy and self-
        empowerment skills, and explore career options;
            ``(xvii) services for children;
            ``(xviii) services under other Federal, State, or local 
        programs designed to provide resources, training, counseling, 
        or other assistance, of substantial benefit in enhancing the 
        independence, productivity, and quality of life of individuals 
        with disabilities;
            ``(xix) appropriate preventive services to decrease the 
        need of individuals assisted under this Act for similar 
        services in the future;
            ``(xx) community awareness programs to enhance the 
        understanding and integration into society of individuals with 
        disabilities; and
            ``(xxi) such other services as may be necessary and not 
        inconsistent with the provisions of this Act.
        ``(19) Indian; american indian; indian american; indian 
    tribe.--
            ``(A) In general.--The terms `Indian', `American Indian', 
        and `Indian American' mean an individual who is a member of an 
        Indian tribe.
            ``(B) Indian tribe.--The term `Indian tribe' means any 
        Federal or State Indian tribe, band, rancheria, pueblo, colony, 
        or community, including any Alaskan native village or regional 
        village corporation (as defined in or established pursuant to 
        the Alaska Native Claims Settlement Act).
        ``(20) Individual with a disability.--
            ``(A) In general.--Except as otherwise provided in 
        subparagraph (B), the term `individual with a disability' means 
        any individual who--
                ``(i) has a physical or mental impairment which for 
            such individual constitutes or results in a substantial 
            impediment to employment; and
                ``(ii) can benefit in terms of an employment outcome 
            from vocational rehabilitation services provided pursuant 
            to title I, III, or VI.
            ``(B) Certain programs; limitations on major life 
        activities.--Subject to subparagraphs (C), (D), (E), and (F), 
        the term `individual with a disability' means, for purposes of 
        sections 2, 14, and 15, and titles II, IV, V, and VII of this 
        Act, any person who--
                ``(i) has a physical or mental impairment which 
            substantially limits one or more of such person's major 
            life activities;
                ``(ii) has a record of such an impairment; or
                ``(iii) is regarded as having such an impairment.
            ``(C) Rights and advocacy provisions.--
                ``(i) In general; exclusion of individuals engaging in 
            drug use.--For purposes of title V, the term `individual 
            with a disability' does not include an individual who is 
            currently engaging in the illegal use of drugs, when a 
            covered entity acts on the basis of such use.
                ``(ii) Exception for individuals no longer engaging in 
            drug use.--Nothing in clause (i) shall be construed to 
            exclude as an individual with a disability an individual 
            who--

                    ``(I) has successfully completed a supervised drug 
                rehabilitation program and is no longer engaging in the 
                illegal use of drugs, or has otherwise been 
                rehabilitated successfully and is no longer engaging in 
                such use;
                    ``(II) is participating in a supervised 
                rehabilitation program and is no longer engaging in 
                such use; or
                    ``(III) is erroneously regarded as engaging in such 
                use, but is not engaging in such use;

            except that it shall not be a violation of this Act for a 
            covered entity to adopt or administer reasonable policies 
            or procedures, including but not limited to drug testing, 
            designed to ensure that an individual described in 
            subclause (I) or (II) is no longer engaging in the illegal 
            use of drugs.
                ``(iii) Exclusion for certain services.--
            Notwithstanding clause (i), for purposes of programs and 
            activities providing health services and services provided 
            under titles I, II, and III, an individual shall not be 
            excluded from the benefits of such programs or activities 
            on the basis of his or her current illegal use of drugs if 
            he or she is otherwise entitled to such services.
                ``(iv) Disciplinary action.--For purposes of programs 
            and activities providing educational services, local 
            educational agencies may take disciplinary action 
            pertaining to the use or possession of illegal drugs or 
            alcohol against any student who is an individual with a 
            disability and who currently is engaging in the illegal use 
            of drugs or in the use of alcohol to the same extent that 
            such disciplinary action is taken against students who are 
            not individuals with disabilities. Furthermore, the due 
            process procedures at section 104.36 of title 34, Code of 
            Federal Regulations (or any corresponding similar 
            regulation or ruling) shall not apply to such disciplinary 
            actions.
                ``(v) Employment; exclusion of alcoholics.--For 
            purposes of sections 503 and 504 as such sections relate to 
            employment, the term `individual with a disability' does 
            not include any individual who is an alcoholic whose 
            current use of alcohol prevents such individual from 
            performing the duties of the job in question or whose 
            employment, by reason of such current alcohol abuse, would 
            constitute a direct threat to property or the safety of 
            others.
            ``(D) Employment; exclusion of individuals with certain 
        diseases or infections.--For the purposes of sections 503 and 
        504, as such sections relate to employment, such term does not 
        include an individual who has a currently contagious disease or 
        infection and who, by reason of such disease or infection, 
        would constitute a direct threat to the health or safety of 
        other individuals or who, by reason of the currently contagious 
        disease or infection, is unable to perform the duties of the 
        job.
            ``(E) Rights provisions; exclusion of individuals on basis 
        of homosexuality or bisexuality.--For the purposes of sections 
        501, 503, and 504--
                ``(i) for purposes of the application of subparagraph 
            (B) to such sections, the term `impairment' does not 
            include homosexuality or bisexuality; and
                ``(ii) therefore the term `individual with a 
            disability' does not include an individual on the basis of 
            homosexuality or bisexuality.
            ``(F) Rights provisions; exclusion of individuals on basis 
        of certain disorders.--For the purposes of sections 501, 503, 
        and 504, the term `individual with a disability' does not 
        include an individual on the basis of--
                ``(i) transvestism, transsexualism, pedophilia, 
            exhibitionism, voyeurism, gender identity disorders not 
            resulting from physical impairments, or other sexual 
            behavior disorders;
                ``(ii) compulsive gambling, kleptomania, or pyromania; 
            or
                ``(iii) psychoactive substance use disorders resulting 
            from current illegal use of drugs.
            ``(G) Individuals with disabilities.--The term `individuals 
        with disabilities' means more than one individual with a 
        disability.
        ``(21) Individual with a significant disability.--
            ``(A) In general.--Except as provided in subparagraph (B) 
        or (C), the term `individual with a significant disability' 
        means an individual with a disability--
                ``(i) who has a severe physical or mental impairment 
            which seriously limits one or more functional capacities 
            (such as mobility, communication, self-care, self-
            direction, interpersonal skills, work tolerance, or work 
            skills) in terms of an employment outcome;
                ``(ii) whose vocational rehabilitation can be expected 
            to require multiple vocational rehabilitation services over 
            an extended period of time; and
                ``(iii) who has one or more physical or mental 
            disabilities resulting from amputation, arthritis, autism, 
            blindness, burn injury, cancer, cerebral palsy, cystic 
            fibrosis, deafness, head injury, heart disease, hemiplegia, 
            hemophilia, respiratory or pulmonary dysfunction, mental 
            retardation, mental illness, multiple sclerosis, muscular 
            dystrophy, musculo-skeletal disorders, neurological 
            disorders (including stroke and epilepsy), paraplegia, 
            quadriplegia, and other spinal cord conditions, sickle cell 
            anemia, specific learning disability, end-stage renal 
            disease, or another disability or combination of 
            disabilities determined on the basis of an assessment for 
            determining eligibility and vocational rehabilitation needs 
            described in subparagraphs (A) and (B) of paragraph (2) to 
            cause comparable substantial functional limitation.
            ``(B) Independent living services and centers for 
        independent living.--For purposes of title VII, the term 
        `individual with a significant disability' means an individual 
        with a severe physical or mental impairment whose ability to 
        function independently in the family or community or whose 
        ability to obtain, maintain, or advance in employment is 
        substantially limited and for whom the delivery of independent 
        living services will improve the ability to function, continue 
        functioning, or move toward functioning independently in the 
        family or community or to continue in employment, respectively.
            ``(C) Research and training.--For purposes of title II, the 
        term `individual with a significant disability' includes an 
        individual described in subparagraph (A) or (B).
            ``(D) Individuals with significant disabilities.--The term 
        `individuals with significant disabilities' means more than one 
        individual with a significant disability.
            ``(E) Individual with a most significant disability.--
                ``(i) In general.--The term `individual with a most 
            significant disability', used with respect to an individual 
            in a State, means an individual with a significant 
            disability who meets criteria established by the State 
            under section 101(a)(5)(C).
                ``(ii) Individuals with the most significant 
            disabilities.--The term `individuals with the most 
            significant disabilities' means more than one individual 
            with a most significant disability.
        ``(22) Individual's representative; applicant's 
    representative.--The terms `individual's representative' and 
    `applicant's representative' mean a parent, a family member, a 
    guardian, an advocate, or an authorized representative of an 
    individual or applicant, respectively.
        ``(23) Institution of higher education.--The term `institution 
    of higher education' has the meaning given the term in section 
    1201(a) of the Higher Education Act of 1965 (20 U.S.C. 1141(a)).
        ``(24) Local agency.--The term `local agency' means an agency 
    of a unit of general local government or of an Indian tribe (or 
    combination of such units or tribes) which has an agreement with 
    the designated State agency to conduct a vocational rehabilitation 
    program under the supervision of such State agency in accordance 
    with the State plan approved under section 101. Nothing in the 
    preceding sentence of this paragraph or in section 101 shall be 
    construed to prevent the local agency from arranging to utilize 
    another local public or nonprofit agency to provide vocational 
    rehabilitation services if such an arrangement is made part of the 
    agreement specified in this paragraph.
        ``(25) Local workforce investment board.--The term `local 
    workforce investment board' means a local workforce investment 
    board established under section 117 of the Workforce Investment Act 
    of 1998.
        ``(26) Nonprofit.--The term `nonprofit', when used with respect 
    to a community rehabilitation program, means a community 
    rehabilitation program carried out by a corporation or association, 
    no part of the net earnings of which inures, or may lawfully inure, 
    to the benefit of any private shareholder or individual and the 
    income of which is exempt from taxation under section 501(c)(3) of 
    the Internal Revenue Code of 1986.
        ``(27) Ongoing support services.--The term `ongoing support 
    services' means services--
            ``(A) provided to individuals with the most significant 
        disabilities;
            ``(B) provided, at a minimum, twice monthly--
                ``(i) to make an assessment, regarding the employment 
            situation, at the worksite of each such individual in 
            supported employment, or, under special circumstances, 
            especially at the request of the client, off site; and
                ``(ii) based on the assessment, to provide for the 
            coordination or provision of specific intensive services, 
            at or away from the worksite, that are needed to maintain 
            employment stability; and
            ``(C) consisting of--
                ``(i) a particularized assessment supplementary to the 
            comprehensive assessment described in paragraph (2)(B);
                ``(ii) the provision of skilled job trainers who 
            accompany the individual for intensive job skill training 
            at the worksite;
                ``(iii) job development, job retention, and placement 
            services;
                ``(iv) social skills training;
                ``(v) regular observation or supervision of the 
            individual;
                ``(vi) followup services such as regular contact with 
            the employers, the individuals, the individuals' 
            representatives, and other appropriate individuals, in 
            order to reinforce and stabilize the job placement;
                ``(vii) facilitation of natural supports at the 
            worksite;
                ``(viii) any other service identified in section 103; 
            or
                ``(ix) a service similar to another service described 
            in this subparagraph.
        ``(28) Personal assistance services.--The term `personal 
    assistance services' means a range of services, provided by one or 
    more persons, designed to assist an individual with a disability to 
    perform daily living activities on or off the job that the 
    individual would typically perform if the individual did not have a 
    disability. Such services shall be designed to increase the 
    individual's control in life and ability to perform everyday 
    activities on or off the job.
        ``(29) Public or nonprofit.--The term `public or nonprofit', 
    used with respect to an agency or organization, includes an Indian 
    tribe.
        ``(30) Rehabilitation technology.--The term `rehabilitation 
    technology' means the systematic application of technologies, 
    engineering methodologies, or scientific principles to meet the 
    needs of and address the barriers confronted by individuals with 
    disabilities in areas which include education, rehabilitation, 
    employment, transportation, independent living, and recreation. The 
    term includes rehabilitation engineering, assistive technology 
    devices, and assistive technology services.
        ``(31) Secretary.--The term `Secretary', except when the 
    context otherwise requires, means the Secretary of Education.
        ``(32) State.--The term `State' includes, in addition to each 
    of the several States of the United States, the District of 
    Columbia, the Commonwealth of Puerto Rico, the United States Virgin 
    Islands, Guam, American Samoa, and the Commonwealth of the Northern 
    Mariana Islands.
        ``(33) State workforce investment board.--The term `State 
    workforce investment board' means a State workforce investment 
    board established under section 111 of the Workforce Investment Act 
    of 1998.
        ``(34) Statewide workforce investment system.--The term 
    `statewide workforce investment system' means a system described in 
    section 111(d)(2) of the Workforce Investment Act of 1998.
        ``(35) Supported employment.--
            ``(A) In general.--The term `supported employment' means 
        competitive work in integrated work settings, or employment in 
        integrated work settings in which individuals are working 
        toward competitive work, consistent with the strengths, 
        resources, priorities, concerns, abilities, capabilities, 
        interests, and informed choice of the individuals, for 
        individuals with the most significant disabilities--
                ``(i)(I) for whom competitive employment has not 
            traditionally occurred; or
                ``(II) for whom competitive employment has been 
            interrupted or intermittent as a result of a significant 
            disability; and
                ``(ii) who, because of the nature and severity of their 
            disability, need intensive supported employment services 
            for the period, and any extension, described in paragraph 
            (36)(C) and extended services after the transition 
            described in paragraph (13)(C) in order to perform such 
            work.
            ``(B) Certain transitional employment.--Such term includes 
        transitional employment for persons who are individuals with 
        the most significant disabilities due to mental illness.
        ``(36) Supported employment services.--The term `supported 
    employment services' means ongoing support services and other 
    appropriate services needed to support and maintain an individual 
    with a most significant disability in supported employment, that--
            ``(A) are provided singly or in combination and are 
        organized and made available in such a way as to assist an 
        eligible individual to achieve competitive employment;
            ``(B) are based on a determination of the needs of an 
        eligible individual, as specified in an individualized plan for 
        employment; and
            ``(C) are provided by the designated State unit for a 
        period of time not to extend beyond 18 months, unless under 
        special circumstances the eligible individual and the 
        rehabilitation counselor or coordinator involved jointly agree 
        to extend the time in order to achieve the rehabilitation 
        objectives identified in the individualized plan for 
        employment.
        ``(37) Transition services.--The term `transition services' 
    means a coordinated set of activities for a student, designed 
    within an outcome-oriented process, that promotes movement from 
    school to post school activities, including postsecondary 
    education, vocational training, integrated employment (including 
    supported employment), continuing and adult education, adult 
    services, independent living, or community participation. The 
    coordinated set of activities shall be based upon the individual 
    student's needs, taking into account the student's preferences and 
    interests, and shall include instruction, community experiences, 
    the development of employment and other post school adult living 
    objectives, and, when appropriate, acquisition of daily living 
    skills and functional vocational evaluation.
        ``(38) Vocational rehabilitation services.--The term 
    `vocational rehabilitation services' means those services 
    identified in section 103 which are provided to individuals with 
    disabilities under this Act.
        ``(39) Workforce investment activities.--The term `workforce 
    investment activities' means workforce investment activities, as 
    defined in section 101 of the Workforce Investment Act of 1998, 
    that are carried out under that Act.


                          ``allotment percentage

    ``Sec. 7. (a)(1) For purposes of section 110, the allotment 
percentage for any State shall be 100 per centum less that percentage 
which bears the same ratio to 50 per centum as the per capita income of 
such State bears to the per capita income of the United States, except 
that--
        ``(A) the allotment percentage shall in no case be more than 75 
    per centum or less than 33\1/3\ per centum; and
        ``(B) the allotment percentage for the District of Columbia, 
    Puerto Rico, Guam, the Virgin Islands, American Samoa, and the 
    Commonwealth of the Northern Mariana Islands shall be 75 per 
    centum.
    ``(2) The allotment percentages shall be promulgated by the 
Secretary between October 1 and December 31 of each even-numbered year, 
on the basis of the average of the per capita incomes of the States and 
of the United States for the three most recent consecutive years for 
which satisfactory data are available from the Department of Commerce. 
Such promulgation shall be conclusive for each of the 2 fiscal years in 
the period beginning on the October 1 next succeeding such 
promulgation.
    ``(3) The term `United States' means (but only for purposes of this 
subsection) the 50 States and the District of Columbia.
    ``(b) The population of the several States and of the United States 
shall be determined on the basis of the most recent data available, to 
be furnished by the Department of Commerce by October 1 of the year 
preceding the fiscal year for which funds are appropriated pursuant to 
statutory authorizations.


                             ``nonduplication

    ``Sec. 8. In determining the amount of any State's Federal share of 
expenditures for planning, administration, and services incurred by it 
under a State plan approved in accordance with section 101, there shall 
be disregarded: (1) any portion of such expenditures which are financed 
by Federal funds provided under any other provision of law; and (2) the 
amount of any non-Federal funds required to be expended as a condition 
of receipt of such Federal funds. No payment may be made from funds 
provided under one provision of this Act relating to any cost with 
respect to which any payment is made under any other provision of this 
Act, except that this section shall not be construed to limit or reduce 
fees for services rendered by community rehabilitation programs.


                       ``application of other laws

    ``Sec. 9. The provisions of the Act of December 5, 1974 (Public Law 
93-510) and of title V of the Act of October 15, 1977 (Public Law 95-
134) shall not apply to the administration of the provisions of this 
Act or to the administration of any program or activity under this Act.


                       ``administration of the act

    ``Sec. 10. (a) In carrying out the purposes of this Act, the 
Commissioner may--
        ``(1) provide consultative services and technical assistance to 
    public or nonprofit private agencies and organizations, including 
    assistance to enable such agencies and organizations to facilitate 
    meaningful and effective participation by individuals with 
    disabilities in workforce investment activities;
        ``(2) provide short-term training and technical instruction, 
    including training for the personnel of community rehabilitation 
    programs, centers for independent living, and other providers of 
    services (including job coaches);
        ``(3) conduct special projects and demonstrations;
        ``(4) collect, prepare, publish, and disseminate special 
    educational or informational materials, including reports of the 
    projects for which funds are provided under this Act; and
        ``(5) provide monitoring and conduct evaluations.
    ``(b)(1) In carrying out the duties under this Act, the 
Commissioner may utilize the services and facilities of any agency of 
the Federal Government and of any other public or nonprofit agency or 
organization, in accordance with agreements between the Commissioner 
and the head thereof, and may pay therefor, in advance or by way of 
reimbursement, as may be provided in the agreement.
    ``(2) In carrying out the provisions of this Act, the Commissioner 
shall appoint such task forces as may be necessary to collect and 
disseminate information in order to improve the ability of the 
Commissioner to carry out the provisions of this Act.
    ``(c) The Commissioner may promulgate such regulations as are 
considered appropriate to carry out the Commissioner's duties under 
this Act.
    ``(d) The Secretary shall promulgate regulations regarding the 
requirements for the implementation of an order of selection for 
vocational rehabilitation services under section 101(a)(5)(A) if such 
services cannot be provided to all eligible individuals with 
disabilities who apply for such services.
    ``(e) Not later than 180 days after the date of enactment of the 
Rehabilitation Act Amendments of 1998, the Secretary shall receive 
public comment and promulgate regulations to implement the amendments 
made by the Rehabilitation Act Amendments of 1998.
    ``(f) In promulgating regulations to carry out this Act, the 
Secretary shall promulgate only regulations that are necessary to 
administer and ensure compliance with the specific requirements of this 
Act.
    ``(g) There are authorized to be appropriated to carry out this 
section such sums as may be necessary.


                                ``reports

    ``Sec. 11. (a) Not later than one hundred and eighty days after the 
close of each fiscal year, the Commissioner shall prepare and submit to 
the President and to the Congress a full and complete report on the 
activities carried out under this Act, including the activities and 
staffing of the information clearinghouse under section 15.
    ``(b) The Commissioner shall collect information to determine 
whether the purposes of this Act are being met and to assess the 
performance of programs carried out under this Act. The Commissioner 
shall take whatever action is necessary to assure that the identity of 
each individual for which information is supplied under this section is 
kept confidential, except as otherwise required by law (including 
regulation).
    ``(c) In preparing the report, the Commissioner shall annually 
collect and include in the report information based on the information 
submitted by States in accordance with section 101(a)(10), including 
information on administrative costs as required by section 
101(a)(10)(D). The Commissioner shall, to the maximum extent 
appropriate, include in the report all information that is required to 
be submitted in the reports described in section 136(d) of the 
Workforce Investment Act of 1998 and that pertains to the employment of 
individuals with disabilities.


                               ``evaluation

    ``Sec. 12. (a) For the purpose of improving program management and 
effectiveness, the Secretary, in consultation with the Commissioner, 
shall evaluate all the programs authorized by this Act, their general 
effectiveness in relation to their cost, their impact on related 
programs, and their structure and mechanisms for delivery of services, 
using appropriate methodology and evaluative research designs. The 
Secretary shall establish and use standards for the evaluations 
required by this subsection. Such an evaluation shall be conducted by a 
person not immediately involved in the administration of the program 
evaluated.
    ``(b) In carrying out evaluations under this section, the Secretary 
shall obtain the opinions of program and project participants about the 
strengths and weaknesses of the programs and projects.
    ``(c) The Secretary shall take the necessary action to assure that 
all studies, evaluations, proposals, and data produced or developed 
with Federal funds under this Act shall become the property of the 
United States.
    ``(d) Such information as the Secretary may determine to be 
necessary for purposes of the evaluations conducted under this section 
shall be made available upon request of the Secretary, by the 
departments and agencies of the executive branch.
    ``(e)(1) To assess the linkages between vocational rehabilitation 
services and economic and noneconomic outcomes, the Secretary shall 
continue to conduct a longitudinal study of a national sample of 
applicants for the services.
    ``(2) The study shall address factors related to attrition and 
completion of the program through which the services are provided and 
factors within and outside the program affecting results. Appropriate 
comparisons shall be used to contrast the experiences of similar 
persons who do not obtain the services.
    ``(3) The study shall be planned to cover the period beginning on 
the application of individuals with disabilities for the services, 
through the eligibility determination and provision of services for the 
individuals, and a further period of not less than 2 years after the 
termination of services.
    ``(f)(1) The Commissioner shall identify and disseminate 
information on exemplary practices concerning vocational 
rehabilitation.
    ``(2) To facilitate compliance with paragraph (1), the Commissioner 
shall conduct studies and analyses that identify exemplary practices 
concerning vocational rehabilitation, including studies in areas 
relating to providing informed choice in the rehabilitation process, 
promoting consumer satisfaction, promoting job placement and retention, 
providing supported employment, providing services to particular 
disability populations, financing personal assistance services, 
providing assistive technology devices and assistive technology 
services, entering into cooperative agreements, establishing standards 
and certification for community rehabilitation programs, converting 
from nonintegrated to integrated employment, and providing caseload 
management.
    ``(g) There are authorized to be appropriated to carry out this 
section such sums as may be necessary.


                       ``information clearinghouse

    ``Sec. 13. (a) The Secretary shall establish a central 
clearinghouse for information and resource availability for individuals 
with disabilities which shall provide information and data regarding--
        ``(1) the location, provision, and availability of services and 
    programs for individuals with disabilities, including such 
    information and data provided by State workforce investment boards 
    regarding such services and programs authorized under title I of 
    such Act;
        ``(2) research and recent medical and scientific developments 
    bearing on disabilities (and their prevention, amelioration, 
    causes, and cures); and
        ``(3) the current numbers of individuals with disabilities and 
    their needs.
The clearinghouse shall also provide any other relevant information and 
data which the Secretary considers appropriate.
    ``(b) The Commissioner may assist the Secretary to develop within 
the Department of Education a coordinated system of information and 
data retrieval, which will have the capacity and responsibility to 
provide information regarding the information and data referred to in 
subsection (a) of this section to the Congress, public and private 
agencies and organizations, individuals with disabilities and their 
families, professionals in fields serving such individuals, and the 
general public.
    ``(c) The office established to carry out the provisions of this 
section shall be known as the `Office of Information and Resources for 
Individuals with Disabilities'.
    ``(d) There are authorized to be appropriated to carry out this 
section such sums as may be necessary.


                           ``transfer of funds

    ``Sec. 14. (a) Except as provided in subsection (b) of this 
section, no funds appropriated under this Act for any program or 
activity may be used for any purpose other than that for which the 
funds were specifically authorized.
    ``(b) No more than 1 percent of funds appropriated for 
discretionary grants, contracts, or cooperative agreements authorized 
by this Act may be used for the purpose of providing non-Federal panels 
of experts to review applications for such grants, contracts, or 
cooperative agreements.


                          ``state administration

    ``Sec. 15. The application of any State rule or policy relating to 
the administration or operation of programs funded by this Act 
(including any rule or policy based on State interpretation of any 
Federal law, regulation, or guideline) shall be identified as a State 
imposed requirement.


                         ``review of applications

    ``Sec. 16. Applications for grants in excess of $100,000 in the 
aggregate authorized to be funded under this Act, other than grants 
primarily for the purpose of conducting dissemination or conferences, 
shall be reviewed by panels of experts which shall include a majority 
of non-Federal members. Non-Federal members may be provided travel, per 
diem, and consultant fees not to exceed the daily equivalent of the 
rate of pay for level 4 of the Senior Executive Service Schedule under 
section 5382 of title 5, United States Code.


                               ``carryover

    ``Sec. 17. (a) In General.--Except as provided in subsection (b), 
and notwithstanding any other provision of law--
        ``(1) any funds appropriated for a fiscal year to carry out any 
    grant program under part B of title I, section 509 (except as 
    provided in section 509(b)), part B of title VI, part B or C of 
    chapter 1 of title VII, or chapter 2 of title VII (except as 
    provided in section 752(b)), including any funds reallotted under 
    any such grant program, that are not obligated and expended by 
    recipients prior to the beginning of the succeeding fiscal year; or
        ``(2) any amounts of program income, including reimbursement 
    payments under the Social Security Act (42 U.S.C. 301 et seq.), 
    received by recipients under any grant program specified in 
    paragraph (1) that are not obligated and expended by recipients 
    prior to the beginning of the fiscal year succeeding the fiscal 
    year in which such amounts were received,
shall remain available for obligation and expenditure by such 
recipients during such succeeding fiscal year.
    ``(b) Non-Federal Share.--Such funds shall remain available for 
obligation and expenditure by a recipient as provided in subsection (a) 
only to the extent that the recipient complied with any Federal share 
requirements applicable to the program for the fiscal year for which 
the funds were appropriated.


                     ``client assistance information

    ``Sec. 18. All programs, including community rehabilitation 
programs, and projects, that provide services to individuals with 
disabilities under this Act shall advise such individuals who are 
applicants for or recipients of the services, or the applicants' 
representatives or individuals' representatives, of the availability 
and purposes of the client assistance program under section 112, 
including information on means of seeking assistance under such 
program.


                 ``traditionally underserved populations

    ``Sec. 19. (a) Findings.--With respect to the programs authorized 
in titles II through VII, the Congress finds as follows:
        ``(1) Racial profile.--The racial profile of America is rapidly 
    changing. While the rate of increase for white Americans is 3.2 
    percent, the rate of increase for racial and ethnic minorities is 
    much higher: 38.6 percent for Latinos, 14.6 percent for African-
    Americans, and 40.1 percent for Asian-Americans and other ethnic 
    groups. By the year 2000, the Nation will have 260,000,000 people, 
    one of every three of whom will be either African-American, Latino, 
    or Asian-American.
        ``(2) Rate of disability.--Ethnic and racial minorities tend to 
    have disabling conditions at a disproportionately high rate. The 
    rate of work-related disability for American Indians is about one 
    and one-half times that of the general population. African-
    Americans are also one and one-half times more likely to be 
    disabled than whites and twice as likely to be significantly 
    disabled.
        ``(3) Inequitable treatment.--Patterns of inequitable treatment 
    of minorities have been documented in all major junctures of the 
    vocational rehabilitation process. As compared to white Americans, 
    a larger percentage of African-American applicants to the 
    vocational rehabilitation system are denied acceptance. Of 
    applicants accepted for service, a larger percentage of African-
    American cases are closed without being rehabilitated. Minorities 
    are provided less training than their white counterparts. 
    Consistently, less money is spent on minorities than on their white 
    counterparts.
        ``(4) Recruitment.--Recruitment efforts within vocational 
    rehabilitation at the level of preservice training, continuing 
    education, and in-service training must focus on bringing larger 
    numbers of minorities into the profession in order to provide 
    appropriate practitioner knowledge, role models, and sufficient 
    manpower to address the clearly changing demography of vocational 
    rehabilitation.
    ``(b) Outreach to Minorities.--
        ``(1) In general.--For each fiscal year, the Commissioner and 
    the Director of the National Institute on Disability and 
    Rehabilitation Research (referred to in this subsection as the 
    `Director') shall reserve 1 percent of the funds appropriated for 
    the fiscal year for programs authorized under titles II, III, VI, 
    and VII to carry out this subsection. The Commissioner and the 
    Director shall use the reserved funds to carry out one or more of 
    the activities described in paragraph (2) through a grant, 
    contract, or cooperative agreement.
        ``(2) Activities.--The activities carried out by the 
    Commissioner and the Director shall include one or more of the 
    following:
            ``(A) Making awards to minority entities and Indian tribes 
        to carry out activities under the programs authorized under 
        titles II, III, VI, and VII.
            ``(B) Making awards to minority entities and Indian tribes 
        to conduct research, training, technical assistance, or a 
        related activity, to improve services provided under this Act, 
        especially services provided to individuals from minority 
        backgrounds.
            ``(C) Making awards to entities described in paragraph (3) 
        to provide outreach and technical assistance to minority 
        entities and Indian tribes to promote their participation in 
        activities funded under this Act, including assistance to 
        enhance their capacity to carry out such activities.
        ``(3) Eligibility.--To be eligible to receive an award under 
    paragraph (2)(C), an entity shall be a State or a public or private 
    nonprofit agency or organization, such as an institution of higher 
    education or an Indian tribe.
        ``(4) Report.--In each fiscal year, the Commissioner and the 
    Director shall prepare and submit to Congress a report that 
    describes the activities funded under this subsection for the 
    preceding fiscal year.
        ``(5) Definitions.--In this subsection:
            ``(A) Historically black college or university.--The term 
        `historically Black college or university' means a part B 
        institution, as defined in section 322(2) of the Higher 
        Education Act of 1965 (20 U.S.C. 1061(2)).
            ``(B) Minority entity.--The term `minority entity' means an 
        entity that is a historically Black college or university, a 
        Hispanic-serving institution of higher education, an American 
        Indian tribal college or university, or another institution of 
        higher education whose minority student enrollment is at least 
        50 percent.
    ``(c) Demonstration.--In awarding grants, or entering into 
contracts or cooperative agreements under titles I, II, III, VI, and 
VII, and section 509, the Commissioner and the Director, in appropriate 
cases, shall require applicants to demonstrate how the applicants will 
address, in whole or in part, the needs of individuals with 
disabilities from minority backgrounds.''.

SEC. 404. VOCATIONAL REHABILITATION SERVICES.

    Title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.) 
is amended to read as follows:

             ``TITLE I--VOCATIONAL REHABILITATION SERVICES

                      ``PART A--GENERAL PROVISIONS

``SEC. 100. DECLARATION OF POLICY; AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Findings; Purpose; Policy.--
        ``(1) Findings.--Congress finds that--
            ``(A) work--
                ``(i) is a valued activity, both for individuals and 
            society; and
                ``(ii) fulfills the need of an individual to be 
            productive, promotes independence, enhances self-esteem, 
            and allows for participation in the mainstream of life in 
            the United States;
            ``(B) as a group, individuals with disabilities experience 
        staggering levels of unemployment and poverty;
            ``(C) individuals with disabilities, including individuals 
        with the most significant disabilities, have demonstrated their 
        ability to achieve gainful employment in integrated settings if 
        appropriate services and supports are provided;
            ``(D) reasons for significant numbers of individuals with 
        disabilities not working, or working at levels not commensurate 
        with their abilities and capabilities, include--
                ``(i) discrimination;
                ``(ii) lack of accessible and available transportation;
                ``(iii) fear of losing health coverage under the 
            medicare and medicaid programs carried out under titles 
            XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et 
            seq. and 1396 et seq.) or fear of losing private health 
            insurance; and
                ``(iv) lack of education, training, and supports to 
            meet job qualification standards necessary to secure, 
            retain, regain, or advance in employment;
            ``(E) enforcement of title V and of the Americans with 
        Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) holds the 
        promise of ending discrimination for individuals with 
        disabilities;
            ``(F) the provision of workforce investment activities and 
        vocational rehabilitation services can enable individuals with 
        disabilities, including individuals with the most significant 
        disabilities, to pursue meaningful careers by securing gainful 
        employment commensurate with their abilities and capabilities; 
        and
            ``(G) linkages between the vocational rehabilitation 
        programs established under this title and other components of 
        the statewide workforce investment systems are critical to 
        ensure effective and meaningful participation by individuals 
        with disabilities in workforce investment activities.
        ``(2) Purpose.--The purpose of this title is to assist States 
    in operating statewide comprehensive, coordinated, effective, 
    efficient, and accountable programs of vocational rehabilitation, 
    each of which is--
            ``(A) an integral part of a statewide workforce investment 
        system; and
            ``(B) designed to assess, plan, develop, and provide 
        vocational rehabilitation services for individuals with 
        disabilities, consistent with their strengths, resources, 
        priorities, concerns, abilities, capabilities, interests, and 
        informed choice, so that such individuals may prepare for and 
        engage in gainful employment.
        ``(3) Policy.--It is the policy of the United States that such 
    a program shall be carried out in a manner consistent with the 
    following principles:
            ``(A) Individuals with disabilities, including individuals 
        with the most significant disabilities, are generally presumed 
        to be capable of engaging in gainful employment and the 
        provision of individualized vocational rehabilitation services 
        can improve their ability to become gainfully employed.
            ``(B) Individuals with disabilities must be provided the 
        opportunities to obtain gainful employment in integrated 
        settings.
            ``(C) Individuals who are applicants for such programs or 
        eligible to participate in such programs must be active and 
        full partners in the vocational rehabilitation process, making 
        meaningful and informed choices--
                ``(i) during assessments for determining eligibility 
            and vocational rehabilitation needs; and
                ``(ii) in the selection of employment outcomes for the 
            individuals, services needed to achieve the outcomes, 
            entities providing such services, and the methods used to 
            secure such services.
            ``(D) Families and other natural supports can play 
        important roles in the success of a vocational rehabilitation 
        program, if the individual with a disability involved requests, 
        desires, or needs such supports.
            ``(E) Vocational rehabilitation counselors that are trained 
        and prepared in accordance with State policies and procedures 
        as described in section 101(a)(7)(B) (referred to individually 
        in this title as a `qualified vocational rehabilitation 
        counselor'), other qualified rehabilitation personnel, and 
        other qualified personnel facilitate the accomplishment of the 
        employment outcomes and objectives of an individual.
            ``(F) Individuals with disabilities and the individuals' 
        representatives are full partners in a vocational 
        rehabilitation program and must be involved on a regular basis 
        and in a meaningful manner with respect to policy development 
        and implementation.
            ``(G) Accountability measures must facilitate the 
        accomplishment of the goals and objectives of the program, 
        including providing vocational rehabilitation services to, 
        among others, individuals with the most significant 
        disabilities.
    ``(b) Authorization of Appropriations.--
        ``(1) In general.--For the purpose of making grants to States 
    under part B to assist States in meeting the costs of vocational 
    rehabilitation services provided in accordance with State plans 
    under section 101, there are authorized to be appropriated such 
    sums as may be necessary for fiscal years 1999 through 2003, except 
    that the amount to be appropriated for a fiscal year shall not be 
    less than the amount of the appropriation under this paragraph for 
    the immediately preceding fiscal year, increased by the percentage 
    change in the Consumer Price Index determined under subsection (c) 
    for the immediately preceding fiscal year.
        ``(2) Reference.--The reference in paragraph (1) to grants to 
    States under part B shall not be considered to refer to grants 
    under section 112.
    ``(c) Consumer Price Index.--
        ``(1) Percentage change.--No later than November 15 of each 
    fiscal year (beginning with fiscal year 1979), the Secretary of 
    Labor shall publish in the Federal Register the percentage change 
    in the Consumer Price Index published for October of the preceding 
    fiscal year and October of the fiscal year in which such 
    publication is made.
        ``(2) Application.--
            ``(A) Increase.--If in any fiscal year the percentage 
        change published under paragraph (1) indicates an increase in 
        the Consumer Price Index, then the amount to be appropriated 
        under subsection (b)(1) for the subsequent fiscal year shall be 
        at least the amount appropriated under subsection (b)(1) for 
        the fiscal year in which the publication is made under 
        paragraph (1) increased by such percentage change.
            ``(B) No increase or decrease.--If in any fiscal year the 
        percentage change published under paragraph (1) does not 
        indicate an increase in the Consumer Price Index, then the 
        amount to be appropriated under subsection (b)(1) for the 
        subsequent fiscal year shall be at least the amount 
        appropriated under subsection (b)(1) for the fiscal year in 
        which the publication is made under paragraph (1).
        ``(3) Definition.--For purposes of this section, the term 
    `Consumer Price Index' means the Consumer Price Index for All Urban 
    Consumers, published monthly by the Bureau of Labor Statistics.
    ``(d) Extension.--
        ``(1) In general.--
            ``(A) Authorization or duration of program.--Unless the 
        Congress in the regular session which ends prior to the 
        beginning of the terminal fiscal year--
                ``(i) of the authorization of appropriations for the 
            program authorized by the State grant program under part B 
            of this title; or
                ``(ii) of the duration of the program authorized by the 
            State grant program under part B of this title;
        has passed legislation which would have the effect of extending 
        the authorization or duration (as the case may be) of such 
        program, such authorization or duration is automatically 
        extended for 1 additional year for the program authorized by 
        this title.
            ``(B) Calculation.--The amount authorized to be 
        appropriated for the additional fiscal year described in 
        subparagraph (A) shall be an amount equal to the amount 
        appropriated for such program for fiscal year 2003, increased 
        by the percentage change in the Consumer Price Index determined 
        under subsection (c) for the immediately preceding fiscal year, 
        if the percentage change indicates an increase.
        ``(2) Construction.--
            ``(A) Passage of legislation.--For the purposes of 
        paragraph (1)(A), Congress shall not be deemed to have passed 
        legislation unless such legislation becomes law.
            ``(B) Acts or determinations of commissioner.--In any case 
        where the Commissioner is required under an applicable statute 
        to carry out certain acts or make certain determinations which 
        are necessary for the continuation of the program authorized by 
        this title, if such acts or determinations are required during 
        the terminal year of such program, such acts and determinations 
        shall be required during any fiscal year in which the extension 
        described in that part of paragraph (1) that follows clause 
        (ii) of paragraph (1)(A) is in effect.

``SEC. 101. STATE PLANS.

    ``(a) Plan Requirements.--
        ``(1) In general.--
            ``(A) Submission.--To be eligible to participate in 
        programs under this title, a State shall submit to the 
        Commissioner a State plan for vocational rehabilitation 
        services that meets the requirements of this section, on the 
        same date that the State submits a State plan under section 112 
        of the Workforce Investment Act of 1998.
            ``(B) Nonduplication.--The State shall not be required to 
        submit, in the State plan for vocational rehabilitation 
        services, policies, procedures, or descriptions required under 
        this title that have been previously submitted to the 
        Commissioner and that demonstrate that such State meets the 
        requirements of this title, including any policies, procedures, 
        or descriptions submitted under this title as in effect on the 
        day before the effective date of the Rehabilitation Act 
        Amendments of 1998.
            ``(C) Duration.--The State plan shall remain in effect 
        subject to the submission of such modifications as the State 
        determines to be necessary or as the Commissioner may require 
        based on a change in State policy, a change in Federal law 
        (including regulations), an interpretation of this Act by a 
        Federal court or the highest court of the State, or a finding 
        by the Commissioner of State noncompliance with the 
        requirements of this Act, until the State submits and receives 
        approval of a new State plan.
        ``(2) Designated state agency; designated state unit.--
            ``(A) Designated state agency.--The State plan shall 
        designate a State agency as the sole State agency to administer 
        the plan, or to supervise the administration of the plan by a 
        local agency, except that--
                ``(i) where, under State law, the State agency for 
            individuals who are blind or another agency that provides 
            assistance or services to adults who are blind is 
            authorized to provide vocational rehabilitation services to 
            individuals who are blind, that agency may be designated as 
            the sole State agency to administer the part of the plan 
            under which vocational rehabilitation services are provided 
            for individuals who are blind (or to supervise the 
            administration of such part by a local agency) and a 
            separate State agency may be designated as the sole State 
            agency to administer or supervise the administration of the 
            rest of the State plan;
                ``(ii) the Commissioner, on the request of a State, may 
            authorize the designated State agency to share funding and 
            administrative responsibility with another agency of the 
            State or with a local agency in order to permit the 
            agencies to carry out a joint program to provide services 
            to individuals with disabilities, and may waive compliance, 
            with respect to vocational rehabilitation services 
            furnished under the joint program, with the requirement of 
            paragraph (4) that the plan be in effect in all political 
            subdivisions of the State; and
                ``(iii) in the case of American Samoa, the appropriate 
            State agency shall be the Governor of American Samoa.
            ``(B) Designated state unit.--The State agency designated 
        under subparagraph (A) shall be--
                ``(i) a State agency primarily concerned with 
            vocational rehabilitation, or vocational and other 
            rehabilitation, of individuals with disabilities; or
                ``(ii) if not such an agency, the State agency (or each 
            State agency if 2 are so designated) shall include a 
            vocational rehabilitation bureau, division, or other 
            organizational unit that--

                    ``(I) is primarily concerned with vocational 
                rehabilitation, or vocational and other rehabilitation, 
                of individuals with disabilities, and is responsible 
                for the vocational rehabilitation program of the 
                designated State agency;
                    ``(II) has a full-time director;
                    ``(III) has a staff employed on the rehabilitation 
                work of the organizational unit all or substantially 
                all of whom are employed full time on such work; and
                    ``(IV) is located at an organizational level and 
                has an organizational status within the designated 
                State agency comparable to that of other major 
                organizational units of the designated State agency.

            ``(C) Responsibility for services for the blind.--If the 
        State has designated only 1 State agency pursuant to 
        subparagraph (A), the State may assign responsibility for the 
        part of the plan under which vocational rehabilitation services 
        are provided for individuals who are blind to an organizational 
        unit of the designated State agency and assign responsibility 
        for the rest of the plan to another organizational unit of the 
        designated State agency, with the provisions of subparagraph 
        (B) applying separately to each of the designated State units.
        ``(3) Non-federal share.--The State plan shall provide for 
    financial participation by the State, or if the State so elects, by 
    the State and local agencies, to provide the amount of the non-
    Federal share of the cost of carrying out part B.
        ``(4) Statewideness.--The State plan shall provide that the 
    plan shall be in effect in all political subdivisions of the State, 
    except that--
            ``(A) in the case of any activity that, in the judgment of 
        the Commissioner, is likely to assist in promoting the 
        vocational rehabilitation of substantially larger numbers of 
        individuals with disabilities or groups of individuals with 
        disabilities, the Commissioner may waive compliance with the 
        requirement that the plan be in effect in all political 
        subdivisions of the State to the extent and for such period as 
        may be provided in accordance with regulations prescribed by 
        the Commissioner, but only if the non-Federal share of the cost 
        of the vocational rehabilitation services involved is met from 
        funds made available by a local agency (including funds 
        contributed to such agency by a private agency, organization, 
        or individual); and
            ``(B) in a case in which earmarked funds are used toward 
        the non-Federal share and such funds are earmarked for 
        particular geographic areas within the State, the earmarked 
        funds may be used in such areas if the State notifies the 
        Commissioner that the State cannot provide the full non-Federal 
        share without such funds.
        ``(5) Order of selection for vocational rehabilitation 
    services.--In the event that vocational rehabilitation services 
    cannot be provided to all eligible individuals with disabilities in 
    the State who apply for the services, the State plan shall--
            ``(A) show the order to be followed in selecting eligible 
        individuals to be provided vocational rehabilitation services;
            ``(B) provide the justification for the order of selection;
            ``(C) include an assurance that, in accordance with 
        criteria established by the State for the order of selection, 
        individuals with the most significant disabilities will be 
        selected first for the provision of vocational rehabilitation 
        services; and
            ``(D) provide that eligible individuals, who do not meet 
        the order of selection criteria, shall have access to services 
        provided through the information and referral system 
        implemented under paragraph (20).
        ``(6) Methods for administration.--
            ``(A) In general.--The State plan shall provide for such 
        methods of administration as are found by the Commissioner to 
        be necessary for the proper and efficient administration of the 
        plan.
            ``(B) Employment of individuals with disabilities.--The 
        State plan shall provide that the designated State agency, and 
        entities carrying out community rehabilitation programs in the 
        State, who are in receipt of assistance under this title shall 
        take affirmative action to employ and advance in employment 
        qualified individuals with disabilities covered under, and on 
        the same terms and conditions as set forth in, section 503.
            ``(C) Facilities.--The State plan shall provide that 
        facilities used in connection with the delivery of services 
        assisted under the State plan shall comply with the Act 
        entitled `An Act to insure that certain buildings financed with 
        Federal funds are so designed and constructed as to be 
        accessible to the physically handicapped', approved on August 
        12, 1968 (commonly known as the `Architectural Barriers Act of 
        1968'), with section 504, and with the Americans with 
        Disabilities Act of 1990.
        ``(7) Comprehensive system of personnel development.--The State 
    plan shall--
            ``(A) include a description (consistent with the purposes 
        of this Act) of a comprehensive system of personnel 
        development, which shall include--
                ``(i) a description of the procedures and activities 
            the designated State agency will undertake to ensure an 
            adequate supply of qualified State rehabilitation 
            professionals and paraprofessionals for the designated 
            State unit, including the development and maintenance of a 
            system for determining, on an annual basis--

                    ``(I) the number and type of personnel that are 
                employed by the designated State unit in the provision 
                of vocational rehabilitation services, including ratios 
                of qualified vocational rehabilitation counselors to 
                clients; and
                    ``(II) the number and type of personnel needed by 
                the State, and a projection of the numbers of such 
                personnel that will be needed in 5 years, based on 
                projections of the number of individuals to be served, 
                the number of such personnel who are expected to retire 
                or leave the vocational rehabilitation field, and other 
                relevant factors;

                ``(ii) where appropriate, a description of the manner 
            in which activities will be undertaken under this section 
            to coordinate the system of personnel development with 
            personnel development activities under the Individuals with 
            Disabilities Education Act (20 U.S.C. 1400 et seq.);
                ``(iii) a description of the development and 
            maintenance of a system of determining, on an annual basis, 
            information on the programs of institutions of higher 
            education within the State that are preparing 
            rehabilitation professionals, including--

                    ``(I) the numbers of students enrolled in such 
                programs; and
                    ``(II) the number of such students who graduated 
                with certification or licensure, or with credentials to 
                qualify for certification or licensure, as a 
                rehabilitation professional during the past year;

                ``(iv) a description of the development, updating, and 
            implementation of a plan that--

                    ``(I) will address the current and projected 
                vocational rehabilitation services personnel training 
                needs for the designated State unit; and
                    ``(II) provides for the coordination and 
                facilitation of efforts between the designated State 
                unit, institutions of higher education, and 
                professional associations to recruit, prepare, and 
                retain qualified personnel, including personnel from 
                minority backgrounds, and personnel who are individuals 
                with disabilities; and

                ``(v) a description of the procedures and activities 
            the designated State agency will undertake to ensure that 
            all personnel employed by the designated State unit are 
            appropriately and adequately trained and prepared, 
            including--

                    ``(I) a system for the continuing education of 
                rehabilitation professionals and paraprofessionals 
                within the designated State unit, particularly with 
                respect to rehabilitation technology; and
                    ``(II) procedures for acquiring and disseminating 
                to rehabilitation professionals and paraprofessionals 
                within the designated State unit significant knowledge 
                from research and other sources, including procedures 
                for providing training regarding the amendments to this 
                Act made by the Rehabilitation Act Amendments of 1998;

            ``(B) set forth policies and procedures relating to the 
        establishment and maintenance of standards to ensure that 
        personnel, including rehabilitation professionals and 
        paraprofessionals, needed within the designated State unit to 
        carry out this part are appropriately and adequately prepared 
        and trained, including--
                ``(i) the establishment and maintenance of standards 
            that are consistent with any national or State approved or 
            recognized certification, licensing, registration, or other 
            comparable requirements that apply to the area in which 
            such personnel are providing vocational rehabilitation 
            services; and
                ``(ii) to the extent that such standards are not based 
            on the highest requirements in the State applicable to a 
            specific profession or discipline, the steps the State is 
            taking to require the retraining or hiring of personnel 
            within the designated State unit that meet appropriate 
            professional requirements in the State; and
            ``(C) contain provisions relating to the establishment and 
        maintenance of minimum standards to ensure the availability of 
        personnel within the designated State unit, to the maximum 
        extent feasible, trained to communicate in the native language 
        or mode of communication of an applicant or eligible 
        individual.
        ``(8) Comparable services and benefits.--
            ``(A) Determination of availability.--
                ``(i) In general.--The State plan shall include an 
            assurance that, prior to providing any vocational 
            rehabilitation service to an eligible individual, except 
            those services specified in paragraph (5)(D) and in 
            paragraphs (1) through (4) and (14) of section 103(a), the 
            designated State unit will determine whether comparable 
            services and benefits are available under any other program 
            (other than a program carried out under this title) unless 
            such a determination would interrupt or delay--

                    ``(I) the progress of the individual toward 
                achieving the employment outcome identified in the 
                individualized plan for employment of the individual in 
                accordance with section 102(b);
                    ``(II) an immediate job placement; or
                    ``(III) the provision of such service to any 
                individual at extreme medical risk.

                ``(ii) Awards and scholarships.--For purposes of clause 
            (i), comparable benefits do not include awards and 
            scholarships based on merit.
            ``(B) Interagency agreement.--The State plan shall include 
        an assurance that the Governor of the State, in consultation 
        with the entity in the State responsible for the vocational 
        rehabilitation program and other appropriate agencies, will 
        ensure that an interagency agreement or other mechanism for 
        interagency coordination takes effect between any appropriate 
        public entity, including the State entity responsible for 
        administering the State medicaid program, a public institution 
        of higher education, and a component of the statewide workforce 
        investment system, and the designated State unit, in order to 
        ensure the provision of vocational rehabilitation services 
        described in subparagraph (A) (other than those services 
        specified in paragraph (5)(D), and in paragraphs (1) through 
        (4) and (14) of section 103(a)), that are included in the 
        individualized plan for employment of an eligible individual, 
        including the provision of such vocational rehabilitation 
        services during the pendency of any dispute described in clause 
        (iii). Such agreement or mechanism shall include the following:
                ``(i) Agency financial responsibility.--An 
            identification of, or a description of a method for 
            defining, the financial responsibility of such public 
            entity for providing such services, and a provision stating 
            the financial responsibility of such public entity for 
            providing such services.
                ``(ii) Conditions, terms, and procedures of 
            reimbursement.--Information specifying the conditions, 
            terms, and procedures under which a designated State unit 
            shall be reimbursed by other public entities for providing 
            such services, based on the provisions of such agreement or 
            mechanism.
                ``(iii) Interagency disputes.--Information specifying 
            procedures for resolving interagency disputes under the 
            agreement or other mechanism (including procedures under 
            which the designated State unit may initiate proceedings to 
            secure reimbursement from other public entities or 
            otherwise implement the provisions of the agreement or 
            mechanism).
                ``(iv) Coordination of services procedures.--
            Information specifying policies and procedures for public 
            entities to determine and identify the interagency 
            coordination responsibilities of each public entity to 
            promote the coordination and timely delivery of vocational 
            rehabilitation services (except those services specified in 
            paragraph (5)(D) and in paragraphs (1) through (4) and (14) 
            of section 103(a)).
            ``(C) Responsibilities of other public entities.--
                ``(i) Responsibilities under other law.--
            Notwithstanding subparagraph (B), if any public entity 
            other than a designated State unit is obligated under 
            Federal or State law, or assigned responsibility under 
            State policy or under this paragraph, to provide or pay for 
            any services that are also considered to be vocational 
            rehabilitation services (other than those specified in 
            paragraph (5)(D) and in paragraphs (1) through (4) and (14) 
            of section 103(a)), such public entity shall fulfill that 
            obligation or responsibility, either directly or by 
            contract or other arrangement.
                ``(ii) Reimbursement.--If a public entity other than 
            the designated State unit fails to provide or pay for the 
            services described in clause (i) for an eligible 
            individual, the designated State unit shall provide or pay 
            for such services to the individual. Such designated State 
            unit may claim reimbursement for the services from the 
            public entity that failed to provide or pay for such 
            services. Such public entity shall reimburse the designated 
            State unit pursuant to the terms of the interagency 
            agreement or other mechanism described in this paragraph 
            according to the procedures established in such agreement 
            or mechanism pursuant to subparagraph (B)(ii).
            ``(D) Methods.--The Governor of a State may meet the 
        requirements of subparagraph (B) through--
                ``(i) a State statute or regulation;
                ``(ii) a signed agreement between the respective 
            officials of the public entities that clearly identifies 
            the responsibilities of each public entity relating to the 
            provision of services; or
                ``(iii) another appropriate method, as determined by 
            the designated State unit.
        ``(9) Individualized plan for employment.--
            ``(A) Development and implementation.--The State plan shall 
        include an assurance that an individualized plan for employment 
        meeting the requirements of section 102(b) will be developed 
        and implemented in a timely manner for an individual subsequent 
        to the determination of the eligibility of the individual for 
        services under this title, except that in a State operating 
        under an order of selection described in paragraph (5), the 
        plan will be developed and implemented only for individuals 
        meeting the order of selection criteria of the State.
            ``(B) Provision of services.--The State plan shall include 
        an assurance that such services will be provided in accordance 
        with the provisions of the individualized plan for employment.
        ``(10) Reporting requirements.--
            ``(A) In general.--The State plan shall include an 
        assurance that the designated State agency will submit reports 
        in the form and level of detail and at the time required by the 
        Commissioner regarding applicants for, and eligible individuals 
        receiving, services under this title.
            ``(B) Annual reporting.--In specifying the information to 
        be submitted in the reports, the Commissioner shall require 
        annual reporting on the eligible individuals receiving the 
        services, on those specific data elements described in section 
        136(d)(2) of the Workforce Investment Act of 1998 that are 
        determined by the Secretary to be relevant in assessing the 
        performance of designated State units in carrying out the 
        vocational rehabilitation program established under this title.
            ``(C) Additional data.--In specifying the information 
        required to be submitted in the reports, the Commissioner shall 
        require additional data with regard to applicants and eligible 
        individuals related to--
                ``(i) the number of applicants and the number of 
            individuals determined to be eligible or ineligible for the 
            program carried out under this title, including--

                    ``(I) the number of individuals determined to be 
                ineligible because they did not require vocational 
                rehabilitation services, as provided in section 102(a); 
                and
                    ``(II) the number of individuals determined, on the 
                basis of clear and convincing evidence, to be too 
                severely disabled to benefit in terms of an employment 
                outcome from vocational rehabilitation services;

                ``(ii) the number of individuals who received 
            vocational rehabilitation services through the program, 
            including--

                    ``(I) the number who received services under 
                paragraph (5)(D), but not assistance under an 
                individualized plan for employment;
                    ``(II) of those recipients who are individuals with 
                significant disabilities, the number who received 
                assistance under an individualized plan for employment 
                consistent with section 102(b); and
                    ``(III) of those recipients who are not individuals 
                with significant disabilities, the number who received 
                assistance under an individualized plan for employment 
                consistent with section 102(b);

                ``(iii) of those applicants and eligible recipients who 
            are individuals with significant disabilities--

                    ``(I) the number who ended their participation in 
                the program carried out under this title and the number 
                who achieved employment outcomes after receiving 
                vocational rehabilitation services; and
                    ``(II) the number who ended their participation in 
                the program and who were employed 6 months and 12 
                months after securing or regaining employment, or, in 
                the case of individuals whose employment outcome was to 
                retain or advance in employment, who were employed 6 
                months and 12 months after achieving their employment 
                outcome, including--

                        ``(aa) the number who earned the minimum wage 
                    rate specified in section 6(a)(1) of the Fair Labor 
                    Standards Act of 1938 (29 U.S.C. 206(a)(1)) or 
                    another wage level set by the Commissioner, during 
                    such employment; and
                        ``(bb) the number who received employment 
                    benefits from an employer during such employment; 
                    and
                ``(iv) of those applicants and eligible recipients who 
            are not individuals with significant disabilities--

                    ``(I) the number who ended their participation in 
                the program carried out under this title and the number 
                who achieved employment outcomes after receiving 
                vocational rehabilitation services; and
                    ``(II) the number who ended their participation in 
                the program and who were employed 6 months and 12 
                months after securing or regaining employment, or, in 
                the case of individuals whose employment outcome was to 
                retain or advance in employment, who were employed 6 
                months and 12 months after achieving their employment 
                outcome, including--

                        ``(aa) the number who earned the minimum wage 
                    rate specified in section 6(a)(1) of the Fair Labor 
                    Standards Act of 1938 (29 U.S.C. 206(a)(1)) or 
                    another wage level set by the Commissioner, during 
                    such employment; and
                        ``(bb) the number who received employment 
                    benefits from an employer during such employment.
            ``(D) Costs and results.--The Commissioner shall also 
        require that the designated State agency include in the reports 
        information on--
                ``(i) the costs under this title of conducting 
            administration, providing assessment services, counseling 
            and guidance, and other direct services provided by 
            designated State agency staff, providing services purchased 
            under individualized plans for employment, supporting small 
            business enterprises, establishing, developing, and 
            improving community rehabilitation programs, providing 
            other services to groups, and facilitating use of other 
            programs under this Act and title I of the Workforce 
            Investment Act of 1998 by eligible individuals; and
                ``(ii) the results of annual evaluation by the State of 
            program effectiveness under paragraph (15)(E).
            ``(E) Additional information.--The Commissioner shall 
        require that each designated State unit include in the reports 
        additional information related to the applicants and eligible 
        individuals, obtained either through a complete count or 
        sampling, including--
                ``(i) information on--

                    ``(I) age, gender, race, ethnicity, education, 
                category of impairment, severity of disability, and 
                whether the individuals are students with disabilities;
                    ``(II) dates of application, determination of 
                eligibility or ineligibility, initiation of the 
                individualized plan for employment, and termination of 
                participation in the program;
                    ``(III) earnings at the time of application for the 
                program and termination of participation in the 
                program;
                    ``(IV) work status and occupation;
                    ``(V) types of services, including assistive 
                technology services and assistive technology devices, 
                provided under the program;
                    ``(VI) types of public or private programs or 
                agencies that furnished services under the program; and
                    ``(VII) the reasons for individuals terminating 
                participation in the program without achieving an 
                employment outcome; and

                ``(ii) information necessary to determine the success 
            of the State in meeting--

                    ``(I) the State performance measures established 
                under section 136(b) of the Workforce Investment Act of 
                1998, to the extent the measures are applicable to 
                individuals with disabilities; and
                    ``(II) the standards and indicators established 
                pursuant to section 106.

            ``(F) Completeness and confidentiality.--The State plan 
        shall include an assurance that the information submitted in 
        the reports will include a complete count, except as provided 
        in subparagraph (E), of the applicants and eligible 
        individuals, in a manner permitting the greatest possible 
        cross-classification of data and that the identity of each 
        individual for which information is supplied under this 
        paragraph will be kept confidential.
        ``(11) Cooperation, collaboration, and coordination.--
            ``(A) Cooperative agreements with other components of 
        statewide workforce investment systems.--The State plan shall 
        provide that the designated State unit or designated State 
        agency shall enter into a cooperative agreement with other 
        entities that are components of the statewide workforce 
        investment system of the State, regarding the system, which 
        agreement may provide for--
                ``(i) provision of intercomponent staff training and 
            technical assistance with regard to--

                    ``(I) the availability and benefits of, and 
                information on eligibility standards for, vocational 
                rehabilitation services; and
                    ``(II) the promotion of equal, effective, and 
                meaningful participation by individuals with 
                disabilities in workforce investment activities in the 
                State through the promotion of program accessibility, 
                the use of nondiscriminatory policies and procedures, 
                and the provision of reasonable accommodations, 
                auxiliary aids and services, and rehabilitation 
                technology, for individuals with disabilities;

                ``(ii) use of information and financial management 
            systems that link all components of the statewide workforce 
            investment system, that link the components to other 
            electronic networks, including nonvisual electronic 
            networks, and that relate to such subjects as employment 
            statistics, and information on job vacancies, career 
            planning, and workforce investment activities;
                ``(iii) use of customer service features such as common 
            intake and referral procedures, customer databases, 
            resource information, and human services hotlines;
                ``(iv) establishment of cooperative efforts with 
            employers to--

                    ``(I) facilitate job placement; and
                    ``(II) carry out any other activities that the 
                designated State unit and the employers determine to be 
                appropriate;

                ``(v) identification of staff roles, responsibilities, 
            and available resources, and specification of the financial 
            responsibility of each component of the statewide workforce 
            investment system with regard to paying for necessary 
            services (consistent with State law and Federal 
            requirements); and
                ``(vi) specification of procedures for resolving 
            disputes among such components.
            ``(B) Replication of cooperative agreements.--The State 
        plan shall provide for the replication of such cooperative 
        agreements at the local level between individual offices of the 
        designated State unit and local entities carrying out 
        activities through the statewide workforce investment system.
            ``(C) Interagency cooperation with other agencies.--The 
        State plan shall include descriptions of interagency 
        cooperation with, and utilization of the services and 
        facilities of, Federal, State, and local agencies and programs, 
        including programs carried out by the Under Secretary for Rural 
        Development of the Department of Agriculture and State use 
        contracting programs, to the extent that such agencies and 
        programs are not carrying out activities through the statewide 
        workforce investment system.
            ``(D) Coordination with education officials.--The State 
        plan shall contain plans, policies, and procedures for 
        coordination between the designated State agency and education 
        officials responsible for the public education of students with 
        disabilities, that are designed to facilitate the transition of 
        the students with disabilities from the receipt of educational 
        services in school to the receipt of vocational rehabilitation 
        services under this title, including information on a formal 
        interagency agreement with the State educational agency that, 
        at a minimum, provides for--
                ``(i) consultation and technical assistance to assist 
            educational agencies in planning for the transition of 
            students with disabilities from school to post-school 
            activities, including vocational rehabilitation services;
                ``(ii) transition planning by personnel of the 
            designated State agency and educational agency personnel 
            for students with disabilities that facilitates the 
            development and completion of their individualized 
            education programs under section 614(d) of the Individuals 
            with Disabilities Education Act (as added by section 101 of 
            Public Law 105-17);
                ``(iii) the roles and responsibilities, including 
            financial responsibilities, of each agency, including 
            provisions for determining State lead agencies and 
            qualified personnel responsible for transition services; 
            and
                ``(iv) procedures for outreach to and identification of 
            students with disabilities who need the transition 
            services.
            ``(E) Coordination with statewide independent living 
        councils and independent living centers.--The State plan shall 
        include an assurance that the designated State unit, the 
        Statewide Independent Living Council established under section 
        705, and the independent living centers described in part C of 
        title VII within the State have developed working relationships 
        and coordinate their activities.
            ``(F) Cooperative agreement with recipients of grants for 
        services to american indians.--In applicable cases, the State 
        plan shall include an assurance that the State has entered into 
        a formal cooperative agreement with each grant recipient in the 
        State that receives funds under part C. The agreement shall 
        describe strategies for collaboration and coordination in 
        providing vocational rehabilitation services to American 
        Indians who are individuals with disabilities, including--
                ``(i) strategies for interagency referral and 
            information sharing that will assist in eligibility 
            determinations and the development of individualized plans 
            for employment;
                ``(ii) procedures for ensuring that American Indians 
            who are individuals with disabilities and are living near a 
            reservation or tribal service area are provided vocational 
            rehabilitation services; and
                ``(iii) provisions for sharing resources in cooperative 
            studies and assessments, joint training activities, and 
            other collaborative activities designed to improve the 
            provision of services to American Indians who are 
            individuals with disabilities.
        ``(12) Residency.--The State plan shall include an assurance 
    that the State will not impose a residence requirement that 
    excludes from services provided under the plan any individual who 
    is present in the State.
        ``(13) Services to american indians.--The State plan shall 
    include an assurance that, except as otherwise provided in part C, 
    the designated State agency will provide vocational rehabilitation 
    services to American Indians who are individuals with disabilities 
    residing in the State to the same extent as the designated State 
    agency provides such services to other significant populations of 
    individuals with disabilities residing in the State.
        ``(14) Annual review of individuals in extended employment or 
    other employment under special certificate provisions of the fair 
    labor standards act of 1938.--The State plan shall provide for--
            ``(A) an annual review and reevaluation of the status of 
        each individual with a disability served under this title who 
        has achieved an employment outcome either in an extended 
        employment setting in a community rehabilitation program or any 
        other employment under section 14(c) of the Fair Labor 
        Standards Act (29 U.S.C. 214(c)) for 2 years after the 
        achievement of the outcome (and thereafter if requested by the 
        individual or, if appropriate, the individual's 
        representative), to determine the interests, priorities, and 
        needs of the individual with respect to competitive employment 
        or training for competitive employment;
            ``(B) input into the review and reevaluation, and a signed 
        acknowledgment that such review and reevaluation have been 
        conducted, by the individual with a disability, or, if 
        appropriate, the individual's representative; and
            ``(C) maximum efforts, including the identification and 
        provision of vocational rehabilitation services, reasonable 
        accommodations, and other necessary support services, to assist 
        the individuals described in subparagraph (A) in engaging in 
        competitive employment.
        ``(15) Annual state goals and reports of progress.--
            ``(A) Assessments and estimates.--The State plan shall--
                ``(i) include the results of a comprehensive, statewide 
            assessment, jointly conducted by the designated State unit 
            and the State Rehabilitation Council (if the State has such 
            a Council) every 3 years, describing the rehabilitation 
            needs of individuals with disabilities residing within the 
            State, particularly the vocational rehabilitation services 
            needs of--

                    ``(I) individuals with the most significant 
                disabilities, including their need for supported 
                employment services;
                    ``(II) individuals with disabilities who are 
                minorities and individuals with disabilities who have 
                been unserved or underserved by the vocational 
                rehabilitation program carried out under this title; 
                and
                    ``(III) individuals with disabilities served 
                through other components of the statewide workforce 
                investment system (other than the vocational 
                rehabilitation program), as identified by such 
                individuals and personnel assisting such individuals 
                through the components;

                ``(ii) include an assessment of the need to establish, 
            develop, or improve community rehabilitation programs 
            within the State; and
                ``(iii) provide that the State shall submit to the 
            Commissioner a report containing information regarding 
            updates to the assessments, for any year in which the State 
            updates the assessments.
            ``(B) Annual estimates.--The State plan shall include, and 
        shall provide that the State shall annually submit a report to 
        the Commissioner that includes, State estimates of--
                ``(i) the number of individuals in the State who are 
            eligible for services under this title;
                ``(ii) the number of such individuals who will receive 
            services provided with funds provided under part B and 
            under part B of title VI, including, if the designated 
            State agency uses an order of selection in accordance with 
            paragraph (5), estimates of the number of individuals to be 
            served under each priority category within the order; and
                ``(iii) the costs of the services described in clause 
            (i), including, if the designated State agency uses an 
            order of selection in accordance with paragraph (5), the 
            service costs for each priority category within the order.
            ``(C) Goals and priorities.--
                ``(i) In general.--The State plan shall identify the 
            goals and priorities of the State in carrying out the 
            program. The goals and priorities shall be jointly 
            developed, agreed to, and reviewed annually by the 
            designated State unit and the State Rehabilitation Council, 
            if the State has such a Council. Any revisions to the goals 
            and priorities shall be jointly agreed to by the designated 
            State unit and the State Rehabilitation Council, if the 
            State has such a Council. The State plan shall provide that 
            the State shall submit to the Commissioner a report 
            containing information regarding revisions in the goals and 
            priorities, for any year in which the State revises the 
            goals and priorities.
                ``(ii) Basis.--The State goals and priorities shall be 
            based on an analysis of--

                    ``(I) the comprehensive assessment described in 
                subparagraph (A), including any updates to the 
                assessment;
                    ``(II) the performance of the State on the 
                standards and indicators established under section 106; 
                and
                    ``(III) other available information on the 
                operation and the effectiveness of the vocational 
                rehabilitation program carried out in the State, 
                including any reports received from the State 
                Rehabilitation Council, under section 105(c) and the 
                findings and recommendations from monitoring activities 
                conducted under section 107.

                ``(iii) Service and outcome goals for categories in 
            order of selection.--If the designated State agency uses an 
            order of selection in accordance with paragraph (5), the 
            State shall also identify in the State plan service and 
            outcome goals and the time within which these goals may be 
            achieved for individuals in each priority category within 
            the order.
            ``(D) Strategies.--The State plan shall contain a 
        description of the strategies the State will use to address the 
        needs identified in the assessment conducted under subparagraph 
        (A) and achieve the goals and priorities identified in 
        subparagraph (C), including--
                ``(i) the methods to be used to expand and improve 
            services to individuals with disabilities, including how a 
            broad range of assistive technology services and assistive 
            technology devices will be provided to such individuals at 
            each stage of the rehabilitation process and how such 
            services and devices will be provided to such individuals 
            on a statewide basis;
                ``(ii) outreach procedures to identify and serve 
            individuals with disabilities who are minorities and 
            individuals with disabilities who have been unserved or 
            underserved by the vocational rehabilitation program;
                ``(iii) where necessary, the plan of the State for 
            establishing, developing, or improving community 
            rehabilitation programs;
                ``(iv) strategies to improve the performance of the 
            State with respect to the evaluation standards and 
            performance indicators established pursuant to section 106; 
            and
                ``(v) strategies for assisting entities carrying out 
            other components of the statewide workforce investment 
            system (other than the vocational rehabilitation program) 
            in assisting individuals with disabilities.
            ``(E) Evaluation and reports of progress.--The State plan 
        shall--
                ``(i) include the results of an evaluation of the 
            effectiveness of the vocational rehabilitation program, and 
            a joint report by the designated State unit and the State 
            Rehabilitation Council, if the State has such a Council, to 
            the Commissioner on the progress made in improving the 
            effectiveness from the previous year, which evaluation and 
            report shall include--

                    ``(I) an evaluation of the extent to which the 
                goals identified in subparagraph (C) were achieved;
                    ``(II) a description of strategies that contributed 
                to achieving the goals;
                    ``(III) to the extent to which the goals were not 
                achieved, a description of the factors that impeded 
                that achievement; and
                    ``(IV) an assessment of the performance of the 
                State on the standards and indicators established 
                pursuant to section 106; and

                ``(ii) provide that the designated State unit and the 
            State Rehabilitation Council, if the State has such a 
            Council, shall jointly submit to the Commissioner an annual 
            report that contains the information described in clause 
            (i).
        ``(16) Public comment.--The State plan shall--
            ``(A) provide that the designated State agency, prior to 
        the adoption of any policies or procedures governing the 
        provision of vocational rehabilitation services under the State 
        plan (including making any amendment to such policies and 
        procedures), shall conduct public meetings throughout the 
        State, after providing adequate notice of the meetings, to 
        provide the public, including individuals with disabilities, an 
        opportunity to comment on the policies or procedures, and 
        actively consult with the Director of the client assistance 
        program carried out under section 112, and, as appropriate, 
        Indian tribes, tribal organizations, and Native Hawaiian 
        organizations on the policies or procedures; and
            ``(B) provide that the designated State agency (or each 
        designated State agency if two agencies are designated) and any 
        sole agency administering the plan in a political subdivision 
        of the State, shall take into account, in connection with 
        matters of general policy arising in the administration of the 
        plan, the views of--
                ``(i) individuals and groups of individuals who are 
            recipients of vocational rehabilitation services, or in 
            appropriate cases, the individuals' representatives;
                ``(ii) personnel working in programs that provide 
            vocational rehabilitation services to individuals with 
            disabilities;
                ``(iii) providers of vocational rehabilitation services 
            to individuals with disabilities;
                ``(iv) the director of the client assistance program; 
            and
                ``(v) the State Rehabilitation Council, if the State 
            has such a Council.
        ``(17) Use of funds for construction of facilities.--The State 
    plan shall provide that if, under special circumstances, the State 
    plan includes provisions for the construction of facilities for 
    community rehabilitation programs--
            ``(A) the Federal share of the cost of construction for the 
        facilities for a fiscal year will not exceed an amount equal to 
        10 percent of the State's allotment under section 110 for such 
        year;
            ``(B) the provisions of section 306 (as in effect on the 
        day before the date of enactment of the Rehabilitation Act 
        Amendments of 1998) shall be applicable to such construction 
        and such provisions shall be deemed to apply to such 
        construction; and
            ``(C) there shall be compliance with regulations the 
        Commissioner shall prescribe designed to assure that no State 
        will reduce its efforts in providing other vocational 
        rehabilitation services (other than for the establishment of 
        facilities for community rehabilitation programs) because the 
        plan includes such provisions for construction.
        ``(18) Innovation and expansion activities.--The State plan 
    shall--
            ``(A) include an assurance that the State will reserve and 
        use a portion of the funds allotted to the State under section 
        110--
                ``(i) for the development and implementation of 
            innovative approaches to expand and improve the provision 
            of vocational rehabilitation services to individuals with 
            disabilities under this title, particularly individuals 
            with the most significant disabilities, consistent with the 
            findings of the statewide assessment and goals and 
            priorities of the State as described in paragraph (15); and
                ``(ii) to support the funding of--

                    ``(I) the State Rehabilitation Council, if the 
                State has such a Council, consistent with the plan 
                prepared under section 105(d)(1); and
                    ``(II) the Statewide Independent Living Council, 
                consistent with the plan prepared under section 
                705(e)(1);

            ``(B) include a description of how the reserved funds will 
        be utilized; and
            ``(C) provide that the State shall submit to the 
        Commissioner an annual report containing a description of how 
        the reserved funds will be utilized.
        ``(19) Choice.--The State plan shall include an assurance that 
    applicants and eligible individuals or, as appropriate, the 
    applicants' representatives or individuals' representatives, will 
    be provided information and support services to assist the 
    applicants and individuals in exercising informed choice throughout 
    the rehabilitation process, consistent with the provisions of 
    section 102(d).
        ``(20) Information and referral services.--
            ``(A) In general.--The State plan shall include an 
        assurance that the designated State agency will implement an 
        information and referral system adequate to ensure that 
        individuals with disabilities will be provided accurate 
        vocational rehabilitation information and guidance, using 
        appropriate modes of communication, to assist such individuals 
        in preparing for, securing, retaining, or regaining employment, 
        and will be appropriately referred to Federal and State 
        programs (other than the vocational rehabilitation program 
        carried out under this title), including other components of 
        the statewide workforce investment system in the State.
            ``(B) Referrals.--An appropriate referral made through the 
        system shall--
                ``(i) be to the Federal or State programs, including 
            programs carried out by other components of the statewide 
            workforce investment system in the State, best suited to 
            address the specific employment needs of an individual with 
            a disability; and
                ``(ii) include, for each of these programs, provision 
            to the individual of--

                    ``(I) a notice of the referral by the designated 
                State agency to the agency carrying out the program;
                    ``(II) information identifying a specific point of 
                contact within the agency carrying out the program; and
                    ``(III) information and advice regarding the most 
                suitable services to assist the individual to prepare 
                for, secure, retain, or regain employment.

        ``(21) State independent consumer-controlled commission; state 
    rehabilitation council.--
            ``(A) Commission or council.--The State plan shall provide 
        that either--
                ``(i) the designated State agency is an independent 
            commission that--

                    ``(I) is responsible under State law for operating, 
                or overseeing the operation of, the vocational 
                rehabilitation program in the State;
                    ``(II) is consumer-controlled by persons who--

                        ``(aa) are individuals with physical or mental 
                    impairments that substantially limit major life 
                    activities; and
                        ``(bb) represent individuals with a broad range 
                    of disabilities, unless the designated State unit 
                    under the direction of the Commission is the State 
                    agency for individuals who are blind;

                    ``(III) includes family members, advocates, or 
                other representatives, of individuals with mental 
                impairments; and
                    ``(IV) undertakes the functions set forth in 
                section 105(c)(4); or

                ``(ii) the State has established a State Rehabilitation 
            Council that meets the criteria set forth in section 105 
            and the designated State unit--

                    ``(I) in accordance with paragraph (15), jointly 
                develops, agrees to, and reviews annually State goals 
                and priorities, and jointly submits annual reports of 
                progress with the Council;
                    ``(II) regularly consults with the Council 
                regarding the development, implementation, and revision 
                of State policies and procedures of general 
                applicability pertaining to the provision of vocational 
                rehabilitation services;
                    ``(III) includes in the State plan and in any 
                revision to the State plan, a summary of input provided 
                by the Council, including recommendations from the 
                annual report of the Council described in section 
                105(c)(5), the review and analysis of consumer 
                satisfaction described in section 105(c)(4), and other 
                reports prepared by the Council, and the response of 
                the designated State unit to such input and 
                recommendations, including explanations for rejecting 
                any input or recommendation; and
                    ``(IV) transmits to the Council--

                        ``(aa) all plans, reports, and other 
                    information required under this title to be 
                    submitted to the Secretary;
                        ``(bb) all policies, and information on all 
                    practices and procedures, of general applicability 
                    provided to or used by rehabilitation personnel in 
                    carrying out this title; and
                        ``(cc) copies of due process hearing decisions 
                    issued under this title, which shall be transmitted 
                    in such a manner as to ensure that the identity of 
                    the participants in the hearings is kept 
                    confidential.
            ``(B) More than one designated state agency.--In the case 
        of a State that, under section 101(a)(2), designates a State 
        agency to administer the part of the State plan under which 
        vocational rehabilitation services are provided for individuals 
        who are blind (or to supervise the administration of such part 
        by a local agency) and designates a separate State agency to 
        administer the rest of the State plan, the State shall either 
        establish a State Rehabilitation Council for each of the two 
        agencies that does not meet the requirements in subparagraph 
        (A)(i), or establish one State Rehabilitation Council for both 
        agencies if neither agency meets the requirements of 
        subparagraph (A)(i).
        ``(22) Supported employment state plan supplement.--The State 
    plan shall include an assurance that the State has an acceptable 
    plan for carrying out part B of title VI, including the use of 
    funds under that part to supplement funds made available under part 
    B of this title to pay for the cost of services leading to 
    supported employment.
        ``(23) Annual updates.--The plan shall include an assurance 
    that the State will submit to the Commissioner reports containing 
    annual updates of the information required under paragraph (7) 
    (relating to a comprehensive system of personnel development) and 
    any other updates of the information required under this section 
    that are requested by the Commissioner, and annual reports as 
    provided in paragraphs (15) (relating to assessments, estimates, 
    goals and priorities, and reports of progress) and (18) (relating 
    to innovation and expansion), at such time and in such manner as 
    the Secretary may determine to be appropriate.
        ``(24) Certain contracts and cooperative agreements.--
            ``(A) Contracts with for-profit organizations.--The State 
        plan shall provide that the designated State agency has the 
        authority to enter into contracts with for-profit organizations 
        for the purpose of providing, as vocational rehabilitation 
        services, on-the-job training and related programs for 
        individuals with disabilities under part A of title VI, upon a 
        determination by such agency that such for-profit organizations 
        are better qualified to provide such rehabilitation services 
        than nonprofit agencies and organizations.
            ``(B) Cooperative agreements with private nonprofit 
        organizations.--The State plan shall describe the manner in 
        which cooperative agreements with private nonprofit vocational 
        rehabilitation service providers will be established.
    ``(b) Approval; Disapproval of the State Plan.--
        ``(1) Approval.--The Commissioner shall approve any plan that 
    the Commissioner finds fulfills the conditions specified in this 
    section, and shall disapprove any plan that does not fulfill such 
    conditions.
        ``(2) Disapproval.--Prior to disapproval of the State plan, the 
    Commissioner shall notify the State of the intention to disapprove 
    the plan and shall afford the State reasonable notice and 
    opportunity for a hearing.

``SEC. 102. ELIGIBILITY AND INDIVIDUALIZED PLAN FOR EMPLOYMENT.

    ``(a) Eligibility.--
        ``(1) Criterion for eligibility.--An individual is eligible for 
    assistance under this title if the individual--
            ``(A) is an individual with a disability under section 
        7(20)(A); and
            ``(B) requires vocational rehabilitation services to 
        prepare for, secure, retain, or regain employment.
        ``(2) Presumption of benefit.--
            ``(A) Demonstration.--For purposes of this section, an 
        individual shall be presumed to be an individual that can 
        benefit in terms of an employment outcome from vocational 
        rehabilitation services under section 7(20)(A), unless the 
        designated State unit involved can demonstrate by clear and 
        convincing evidence that such individual is incapable of 
        benefiting in terms of an employment outcome from vocational 
        rehabilitation services due to the severity of the disability 
        of the individual.
            ``(B) Methods.--In making the demonstration required under 
        subparagraph (A), the designated State unit shall explore the 
        individual's abilities, capabilities, and capacity to perform 
        in work situations, through the use of trial work experiences, 
        as described in section 7(2)(D), with appropriate supports 
        provided through the designated State unit, except under 
        limited circumstances when an individual cannot take advantage 
        of such experiences. Such experiences shall be of sufficient 
        variety and over a sufficient period of time to determine the 
        eligibility of the individual or to determine the existence of 
        clear and convincing evidence that the individual is incapable 
        of benefiting in terms of an employment outcome from vocational 
        rehabilitation services due to the severity of the disability 
        of the individual.
        ``(3) Presumption of eligibility.--
            ``(A) In general.--For purposes of this section, an 
        individual who has a disability or is blind as determined 
        pursuant to title II or title XVI of the Social Security Act 
        (42 U.S.C. 401 et seq. and 1381 et seq.) shall be--
                ``(i) considered to be an individual with a significant 
            disability under section 7(21)(A); and
                ``(ii) presumed to be eligible for vocational 
            rehabilitation services under this title (provided that the 
            individual intends to achieve an employment outcome 
            consistent with the unique strengths, resources, 
            priorities, concerns, abilities, capabilities, interests, 
            and informed choice of the individual) unless the 
            designated State unit involved can demonstrate by clear and 
            convincing evidence that such individual is incapable of 
            benefiting in terms of an employment outcome from 
            vocational rehabilitation services due to the severity of 
            the disability of the individual in accordance with 
            paragraph (2).
            ``(B) Construction.--Nothing in this paragraph shall be 
        construed to create an entitlement to any vocational 
        rehabilitation service.
        ``(4) Use of existing information.--
            ``(A) In general.--To the maximum extent appropriate and 
        consistent with the requirements of this part, for purposes of 
        determining the eligibility of an individual for vocational 
        rehabilitation services under this title and developing the 
        individualized plan for employment described in subsection (b) 
        for the individual, the designated State unit shall use 
        information that is existing and current (as of the date of the 
        determination of eligibility or of the development of the 
        individualized plan for employment), including information 
        available from other programs and providers, particularly 
        information used by education officials and the Social Security 
        Administration, information provided by the individual and the 
        family of the individual, and information obtained under the 
        assessment for determining eligibility and vocational 
        rehabilitation needs.
            ``(B) Determinations by officials of other agencies.--
        Determinations made by officials of other agencies, 
        particularly education officials described in section 
        101(a)(11)(D), regarding whether an individual satisfies one or 
        more factors relating to whether an individual is an individual 
        with a disability under section 7(20)(A) or an individual with 
        a significant disability under section 7(21)(A) shall be used, 
        to the extent appropriate and consistent with the requirements 
        of this part, in assisting the designated State unit in making 
        such determinations.
            ``(C) Basis.--The determination of eligibility for 
        vocational rehabilitation services shall be based on--
                ``(i) the review of existing data described in section 
            7(2)(A)(i); and
                ``(ii) to the extent that such data is unavailable or 
            insufficient for determining eligibility, the provision of 
            assessment activities described in section 7(2)(A)(ii).
        ``(5) Determination of ineligibility.--If an individual who 
    applies for services under this title is determined, based on the 
    review of existing data and, to the extent necessary, the 
    assessment activities described in section 7(2)(A)(ii), not to be 
    eligible for the services, or if an eligible individual receiving 
    services under an individualized plan for employment is determined 
    to be no longer eligible for the services--
            ``(A) the ineligibility determination involved shall be 
        made only after providing an opportunity for full consultation 
        with the individual or, as appropriate, the individual's 
        representative;
            ``(B) the individual or, as appropriate, the individual's 
        representative, shall be informed in writing (supplemented as 
        necessary by other appropriate modes of communication 
        consistent with the informed choice of the individual) of the 
        ineligibility determination, including--
                ``(i) the reasons for the determination; and
                ``(ii) a description of the means by which the 
            individual may express, and seek a remedy for, any 
            dissatisfaction with the determination, including the 
            procedures for review by an impartial hearing officer under 
            subsection (c);
            ``(C) the individual shall be provided with a description 
        of services available from the client assistance program under 
        section 112 and information on how to contact that program; and
            ``(D) any ineligibility determination that is based on a 
        finding that the individual is incapable of benefiting in terms 
        of an employment outcome shall be reviewed--
                ``(i) within 12 months; and
                ``(ii) thereafter, if such a review is requested by the 
            individual or, if appropriate, by the individual's 
            representative.
        ``(6) Timeframe for making an eligibility determination.--The 
    designated State unit shall determine whether an individual is 
    eligible for vocational rehabilitation services under this title 
    within a reasonable period of time, not to exceed 60 days, after 
    the individual has submitted an application for the services 
    unless--
            ``(A) exceptional and unforeseen circumstances beyond the 
        control of the designated State unit preclude making an 
        eligibility determination within 60 days and the designated 
        State unit and the individual agree to a specific extension of 
        time; or
            ``(B) the designated State unit is exploring an 
        individual's abilities, capabilities, and capacity to perform 
        in work situations under paragraph (2)(B).
    ``(b) Development of an Individualized Plan for Employment.--
        ``(1) Options for developing an individualized plan for 
    employment.--If an individual is determined to be eligible for 
    vocational rehabilitation services as described in subsection (a), 
    the designated State unit shall complete the assessment for 
    determining eligibility and vocational rehabilitation needs, as 
    appropriate, and shall provide the eligible individual or the 
    individual's representative, in writing and in an appropriate mode 
    of communication, with information on the individual's options for 
    developing an individualized plan for employment, including--
            ``(A) information on the availability of assistance, to the 
        extent determined to be appropriate by the eligible individual, 
        from a qualified vocational rehabilitation counselor in 
        developing all or part of the individualized plan for 
        employment for the individual, and the availability of 
        technical assistance in developing all or part of the 
        individualized plan for employment for the individual;
            ``(B) a description of the full range of components that 
        shall be included in an individualized plan for employment;
            ``(C) as appropriate--
                ``(i) an explanation of agency guidelines and criteria 
            associated with financial commitments concerning an 
            individualized plan for employment;
                ``(ii) additional information the eligible individual 
            requests or the designated State unit determines to be 
            necessary; and
                ``(iii) information on the availability of assistance 
            in completing designated State agency forms required in 
            developing an individualized plan for employment; and
            ``(D)(i) a description of the rights and remedies available 
        to such an individual including, if appropriate, recourse to 
        the processes set forth in subsection (c); and
            ``(ii) a description of the availability of a client 
        assistance program established pursuant to section 112 and 
        information about how to contact the client assistance program.
        ``(2) Mandatory procedures.--
            ``(A) Written document.--An individualized plan for 
        employment shall be a written document prepared on forms 
        provided by the designated State unit.
            ``(B) Informed choice.--An individualized plan for 
        employment shall be developed and implemented in a manner that 
        affords eligible individuals the opportunity to exercise 
        informed choice in selecting an employment outcome, the 
        specific vocational rehabilitation services to be provided 
        under the plan, the entity that will provide the vocational 
        rehabilitation services, and the methods used to procure the 
        services, consistent with subsection (d).
            ``(C) Signatories.--An individualized plan for employment 
        shall be--
                ``(i) agreed to, and signed by, such eligible 
            individual or, as appropriate, the individual's 
            representative; and
                ``(ii) approved and signed by a qualified vocational 
            rehabilitation counselor employed by the designated State 
            unit.
            ``(D) Copy.--A copy of the individualized plan for 
        employment for an eligible individual shall be provided to the 
        individual or, as appropriate, to the individual's 
        representative, in writing and, if appropriate, in the native 
        language or mode of communication of the individual or, as 
        appropriate, of the individual's representative.
            ``(E) Review and amendment.--The individualized plan for 
        employment shall be--
                ``(i) reviewed at least annually by--

                    ``(I) a qualified vocational rehabilitation 
                counselor; and
                    ``(II) the eligible individual or, as appropriate, 
                the individual's representative; and

                ``(ii) amended, as necessary, by the individual or, as 
            appropriate, the individual's representative, in 
            collaboration with a representative of the designated State 
            agency or a qualified vocational rehabilitation counselor 
            (to the extent determined to be appropriate by the 
            individual), if there are substantive changes in the 
            employment outcome, the vocational rehabilitation services 
            to be provided, or the service providers of the services 
            (which amendments shall not take effect until agreed to and 
            signed by the eligible individual or, as appropriate, the 
            individual's representative, and by a qualified vocational 
            rehabilitation counselor employed by the designated State 
            unit).
        ``(3) Mandatory components of an individualized plan for 
    employment.--Regardless of the approach selected by an eligible 
    individual to develop an individualized plan for employment, an 
    individualized plan for employment shall, at a minimum, contain 
    mandatory components consisting of--
            ``(A) a description of the specific employment outcome that 
        is chosen by the eligible individual, consistent with the 
        unique strengths, resources, priorities, concerns, abilities, 
        capabilities, interests, and informed choice of the eligible 
        individual, and, to the maximum extent appropriate, results in 
        employment in an integrated setting;
            ``(B)(i) a description of the specific vocational 
        rehabilitation services that are--
                ``(I) needed to achieve the employment outcome, 
            including, as appropriate, the provision of assistive 
            technology devices and assistive technology services, and 
            personal assistance services, including training in the 
            management of such services; and
                ``(II) provided in the most integrated setting that is 
            appropriate for the service involved and is consistent with 
            the informed choice of the eligible individual; and
            ``(ii) timelines for the achievement of the employment 
        outcome and for the initiation of the services;
            ``(C) a description of the entity chosen by the eligible 
        individual or, as appropriate, the individual's representative, 
        that will provide the vocational rehabilitation services, and 
        the methods used to procure such services;
            ``(D) a description of criteria to evaluate progress toward 
        achievement of the employment outcome;
            ``(E) the terms and conditions of the individualized plan 
        for employment, including, as appropriate, information 
        describing--
                ``(i) the responsibilities of the designated State 
            unit;
                ``(ii) the responsibilities of the eligible individual, 
            including--

                    ``(I) the responsibilities the eligible individual 
                will assume in relation to the employment outcome of 
                the individual;
                    ``(II) if applicable, the participation of the 
                eligible individual in paying for the costs of the 
                plan; and
                    ``(III) the responsibility of the eligible 
                individual with regard to applying for and securing 
                comparable benefits as described in section 101(a)(8); 
                and

                ``(iii) the responsibilities of other entities as the 
            result of arrangements made pursuant to comparable services 
            or benefits requirements as described in section 101(a)(8);
            ``(F) for an eligible individual with the most significant 
        disabilities for whom an employment outcome in a supported 
        employment setting has been determined to be appropriate, 
        information identifying--
                ``(i) the extended services needed by the eligible 
            individual; and
                ``(ii) the source of extended services or, to the 
            extent that the source of the extended services cannot be 
            identified at the time of the development of the 
            individualized plan for employment, a description of the 
            basis for concluding that there is a reasonable expectation 
            that such source will become available; and
            ``(G) as determined to be necessary, a statement of 
        projected need for post-employment services.
    ``(c) Procedures.--
        ``(1) In general.--Each State shall establish procedures for 
    mediation of, and procedures for review through an impartial due 
    process hearing of, determinations made by personnel of the 
    designated State unit that affect the provision of vocational 
    rehabilitation services to applicants or eligible individuals.
        ``(2) Notification.--
            ``(A) Rights and assistance.--The procedures shall provide 
        that an applicant or an eligible individual or, as appropriate, 
        the applicant's representative or individual's representative 
        shall be notified of--
                ``(i) the right to obtain review of determinations 
            described in paragraph (1) in an impartial due process 
            hearing under paragraph (5);
                ``(ii) the right to pursue mediation with respect to 
            the determinations under paragraph (4); and
                ``(iii) the availability of assistance from the client 
            assistance program under section 112.
            ``(B) Timing.--Such notification shall be provided in 
        writing--
                ``(i) at the time an individual applies for vocational 
            rehabilitation services provided under this title;
                ``(ii) at the time the individualized plan for 
            employment for the individual is developed; and
                ``(iii) upon reduction, suspension, or cessation of 
            vocational rehabilitation services for the individual.
        ``(3) Evidence and representation.--The procedures required 
    under this subsection shall, at a minimum--
            ``(A) provide an opportunity for an applicant or an 
        eligible individual, or, as appropriate, the applicant's 
        representative or individual's representative, to submit at the 
        mediation session or hearing evidence and information to 
        support the position of the applicant or eligible individual; 
        and
            ``(B) include provisions to allow an applicant or an 
        eligible individual to be represented in the mediation session 
        or hearing by a person selected by the applicant or eligible 
        individual.
        ``(4) Mediation.--
            ``(A) Procedures.--Each State shall ensure that procedures 
        are established and implemented under this subsection to allow 
        parties described in paragraph (1) to disputes involving any 
        determination described in paragraph (1) to resolve such 
        disputes through a mediation process that, at a minimum, shall 
        be available whenever a hearing is requested under this 
        subsection.
            ``(B) Requirements.--Such procedures shall ensure that the 
        mediation process--
                ``(i) is voluntary on the part of the parties;
                ``(ii) is not used to deny or delay the right of an 
            individual to a hearing under this subsection, or to deny 
            any other right afforded under this title; and
                ``(iii) is conducted by a qualified and impartial 
            mediator who is trained in effective mediation techniques.
            ``(C) List of mediators.--The State shall maintain a list 
        of individuals who are qualified mediators and knowledgeable in 
        laws (including regulations) relating to the provision of 
        vocational rehabilitation services under this title, from which 
        the mediators described in subparagraph (B) shall be selected.
            ``(D) Cost.--The State shall bear the cost of the mediation 
        process.
            ``(E) Scheduling.--Each session in the mediation process 
        shall be scheduled in a timely manner and shall be held in a 
        location that is convenient to the parties to the dispute.
            ``(F) Agreement.--An agreement reached by the parties to 
        the dispute in the mediation process shall be set forth in a 
        written mediation agreement.
            ``(G) Confidentiality.--Discussions that occur during the 
        mediation process shall be confidential and may not be used as 
        evidence in any subsequent due process hearing or civil 
        proceeding. The parties to the mediation process may be 
        required to sign a confidentiality pledge prior to the 
        commencement of such process.
            ``(H) Construction.--Nothing in this subsection shall be 
        construed to preclude the parties to such a dispute from 
        informally resolving the dispute prior to proceedings under 
        this paragraph or paragraph (5), if the informal process used 
        is not used to deny or delay the right of the applicant or 
        eligible individual to a hearing under this subsection or to 
        deny any other right afforded under this title.
        ``(5) Hearings.--
            ``(A) Officer.--A due process hearing described in 
        paragraph (2) shall be conducted by an impartial hearing 
        officer who shall issue a decision based on the provisions of 
        the approved State plan, this Act (including regulations 
        implementing this Act), and State regulations and policies that 
        are consistent with the Federal requirements specified in this 
        title. The officer shall provide the decision in writing to the 
        applicant or eligible individual, or, as appropriate, the 
        applicant's representative or individual's representative, and 
        to the designated State unit.
            ``(B) List.--The designated State unit shall maintain a 
        list of qualified impartial hearing officers who are 
        knowledgeable in laws (including regulations) relating to the 
        provision of vocational rehabilitation services under this 
        title from which the officer described in subparagraph (A) 
        shall be selected. For the purposes of maintaining such list, 
        impartial hearing officers shall be identified jointly by--
                ``(i) the designated State unit; and
                ``(ii) members of the Council or commission, as 
            appropriate, described in section 101(a)(21).
            ``(C) Selection.--Such an impartial hearing officer shall 
        be selected to hear a particular case relating to a 
        determination--
                ``(i) on a random basis; or
                ``(ii) by agreement between--

                    ``(I) the Director of the designated State unit and 
                the individual with a disability; or
                    ``(II) in appropriate cases, the Director and the 
                individual's representative.

            ``(D) Procedures for seeking review.--A State may establish 
        procedures to enable a party involved in a hearing under this 
        paragraph to seek an impartial review of the decision of the 
        hearing officer under subparagraph (A) by--
                ``(i) the chief official of the designated State agency 
            if the State has established both a designated State agency 
            and a designated State unit under section 101(a)(2); or
                ``(ii) an official from the office of the Governor.
            ``(E) Review request.--If the State establishes impartial 
        review procedures under subparagraph (D), either party may 
        request the review of the decision of the hearing officer 
        within 20 days after the decision.
            ``(F) Reviewing official.--The reviewing official described 
        in subparagraph (D) shall--
                ``(i) in conducting the review, provide an opportunity 
            for the submission of additional evidence and information 
            relevant to a final decision concerning the matter under 
            review;
                ``(ii) not overturn or modify the decision of the 
            hearing officer, or part of the decision, that supports the 
            position of the applicant or eligible individual unless the 
            reviewing official concludes, based on clear and convincing 
            evidence, that the decision of the impartial hearing 
            officer is clearly erroneous on the basis of being contrary 
            to the approved State plan, this Act (including regulations 
            implementing this Act) or any State regulation or policy 
            that is consistent with the Federal requirements specified 
            in this title; and
                ``(iii) make a final decision with respect to the 
            matter in a timely manner and provide such decision in 
            writing to the applicant or eligible individual, or, as 
            appropriate, the applicant's representative or individual's 
            representative, and to the designated State unit, including 
            a full report of the findings and the grounds for such 
            decision.
            ``(G) Finality of hearing decision.--A decision made after 
        a hearing under subparagraph (A) shall be final, except that a 
        party may request an impartial review if the State has 
        established procedures for such review under subparagraph (D) 
        and a party involved in a hearing may bring a civil action 
        under subparagraph (J).
            ``(H) Finality of review.--A decision made under 
        subparagraph (F) shall be final unless such a party brings a 
        civil action under subparagraph (J).
            ``(I) Implementation.--If a party brings a civil action 
        under subparagraph (J) to challenge a final decision of a 
        hearing officer under subparagraph (A) or to challenge a final 
        decision of a State reviewing official under subparagraph (F), 
        the final decision involved shall be implemented pending review 
        by the court.
            ``(J) Civil action.--
                ``(i) In general.--Any party aggrieved by a final 
            decision described in subparagraph (I), may bring a civil 
            action for review of such decision. The action may be 
            brought in any State court of competent jurisdiction or in 
            a district court of the United States of competent 
            jurisdiction without regard to the amount in controversy.
                ``(ii) Procedure.--In any action brought under this 
            subparagraph, the court--

                    ``(I) shall receive the records relating to the 
                hearing under subparagraph (A) and the records relating 
                to the State review under subparagraphs (D) through 
                (F), if applicable;
                    ``(II) shall hear additional evidence at the 
                request of a party to the action; and
                    ``(III) basing the decision of the court on the 
                preponderance of the evidence, shall grant such relief 
                as the court determines to be appropriate.

        ``(6) Hearing board.--
            ``(A) In general.--A fair hearing board, established by a 
        State before January 1, 1985, and authorized under State law to 
        review determinations or decisions under this Act, is 
        authorized to carry out the responsibilities of the impartial 
        hearing officer under this subsection.
            ``(B) Application.--The provisions of paragraphs (1), (2), 
        and (3) that relate to due process hearings do not apply, and 
        paragraph (5) (other than subparagraph (J)) does not apply, to 
        any State to which subparagraph (A) applies.
        ``(7) Impact on provision of services.--Unless the individual 
    with a disability so requests, or, in an appropriate case, the 
    individual's representative, so requests, pending a decision by a 
    mediator, hearing officer, or reviewing officer under this 
    subsection, the designated State unit shall not institute a 
    suspension, reduction, or termination of services being provided 
    for the individual, including evaluation and assessment services 
    and plan development, unless such services have been obtained 
    through misrepresentation, fraud, collusion, or criminal conduct on 
    the part of the individual, or the individual's representative.
        ``(8) Information collection and report.--
            ``(A) In general.--The Director of the designated State 
        unit shall collect information described in subparagraph (B) 
        and prepare and submit to the Commissioner a report containing 
        such information. The Commissioner shall prepare a summary of 
        the information furnished under this paragraph and include the 
        summary in the annual report submitted under section 13. The 
        Commissioner shall also collect copies of the final decisions 
        of impartial hearing officers conducting hearings under this 
        subsection and State officials conducting reviews under this 
        subsection.
            ``(B) Information.--The information required to be 
        collected under this subsection includes--
                ``(i) a copy of the standards used by State reviewing 
            officials for reviewing decisions made by impartial hearing 
            officers under this subsection;
                ``(ii) information on the number of hearings and 
            reviews sought from the impartial hearing officers and the 
            State reviewing officials, including the type of complaints 
            and the issues involved;
                ``(iii) information on the number of hearing decisions 
            made under this subsection that were not reviewed by the 
            State reviewing officials; and
                ``(iv) information on the number of the hearing 
            decisions that were reviewed by the State reviewing 
            officials, and, based on such reviews, the number of 
            hearing decisions that were--

                    ``(I) sustained in favor of an applicant or 
                eligible individual;
                    ``(II) sustained in favor of the designated State 
                unit;
                    ``(III) reversed in whole or in part in favor of 
                the applicant or eligible individual; and
                    ``(IV) reversed in whole or in part in favor of the 
                designated State unit.

            ``(C) Confidentiality.--The confidentiality of records of 
        applicants and eligible individuals maintained by the 
        designated State unit shall not preclude the access of the 
        Commissioner to those records for the purposes described in 
        subparagraph (A).
    ``(d) Policies and Procedures.--Each designated State agency, in 
consultation with the State Rehabilitation Council, if the State has 
such a council, shall, consistent with section 100(a)(3)(C), develop 
and implement written policies and procedures that enable each 
individual who is an applicant for or eligible to receive vocational 
rehabilitation services under this title to exercise informed choice 
throughout the vocational rehabilitation process carried out under this 
title, including policies and procedures that require the designated 
State agency--
        ``(1) to inform each such applicant and eligible individual 
    (including students with disabilities who are making the transition 
    from programs under the responsibility of an educational agency to 
    programs under the responsibility of the designated State unit), 
    through appropriate modes of communication, about the availability 
    of, and opportunities to exercise, informed choice, including the 
    availability of support services for individuals with cognitive or 
    other disabilities who require assistance in exercising informed 
    choice, throughout the vocational rehabilitation process;
        ``(2) to assist applicants and eligible individuals in 
    exercising informed choice in decisions related to the provision of 
    assessment services under this title;
        ``(3) to develop and implement flexible procurement policies 
    and methods that facilitate the provision of services, and that 
    afford eligible individuals meaningful choices among the methods 
    used to procure services, under this title;
        ``(4) to provide or assist eligible individuals in acquiring 
    information that enables those individuals to exercise informed 
    choice under this title in the selection of--
            ``(A) the employment outcome;
            ``(B) the specific vocational rehabilitation services 
        needed to achieve the employment outcome;
            ``(C) the entity that will provide the services;
            ``(D) the employment setting and the settings in which the 
        services will be provided; and
            ``(E) the methods available for procuring the services; and
        ``(5) to ensure that the availability and scope of informed 
    choice provided under this section is consistent with the 
    obligations of the designated State agency under this title.

``SEC. 103. VOCATIONAL REHABILITATION SERVICES.

    ``(a) Vocational Rehabilitation Services for Individuals.--
Vocational rehabilitation services provided under this title are any 
services described in an individualized plan for employment necessary 
to assist an individual with a disability in preparing for, securing, 
retaining, or regaining an employment outcome that is consistent with 
the strengths, resources, priorities, concerns, abilities, 
capabilities, interests, and informed choice of the individual, 
including--
        ``(1) an assessment for determining eligibility and vocational 
    rehabilitation needs by qualified personnel, including, if 
    appropriate, an assessment by personnel skilled in rehabilitation 
    technology;
        ``(2) counseling and guidance, including information and 
    support services to assist an individual in exercising informed 
    choice consistent with the provisions of section 102(d);
        ``(3) referral and other services to secure needed services 
    from other agencies through agreements developed under section 
    101(a)(11), if such services are not available under this title;
        ``(4) job-related services, including job search and placement 
    assistance, job retention services, followup services, and follow-
    along services;
        ``(5) vocational and other training services, including the 
    provision of personal and vocational adjustment services, books, 
    tools, and other training materials, except that no training 
    services provided at an institution of higher education shall be 
    paid for with funds under this title unless maximum efforts have 
    been made by the designated State unit and the individual to secure 
    grant assistance, in whole or in part, from other sources to pay 
    for such training;
        ``(6) to the extent that financial support is not readily 
    available from a source (such as through health insurance of the 
    individual or through comparable services and benefits consistent 
    with section 101(a)(8)(A)), other than the designated State unit, 
    diagnosis and treatment of physical and mental impairments, 
    including--
            ``(A) corrective surgery or therapeutic treatment necessary 
        to correct or substantially modify a physical or mental 
        condition that constitutes a substantial impediment to 
        employment, but is of such a nature that such correction or 
        modification may reasonably be expected to eliminate or reduce 
        such impediment to employment within a reasonable length of 
        time;
            ``(B) necessary hospitalization in connection with surgery 
        or treatment;
            ``(C) prosthetic and orthotic devices;
            ``(D) eyeglasses and visual services as prescribed by 
        qualified personnel who meet State licensure laws and who are 
        selected by the individual;
            ``(E) special services (including transplantation and 
        dialysis), artificial kidneys, and supplies necessary for the 
        treatment of individuals with end-stage renal disease; and
            ``(F) diagnosis and treatment for mental and emotional 
        disorders by qualified personnel who meet State licensure laws;
        ``(7) maintenance for additional costs incurred while 
    participating in an assessment for determining eligibility and 
    vocational rehabilitation needs or while receiving services under 
    an individualized plan for employment;
        ``(8) transportation, including adequate training in the use of 
    public transportation vehicles and systems, that is provided in 
    connection with the provision of any other service described in 
    this section and needed by the individual to achieve an employment 
    outcome;
        ``(9) on-the-job or other related personal assistance services 
    provided while an individual is receiving other services described 
    in this section;
        ``(10) interpreter services provided by qualified personnel for 
    individuals who are deaf or hard of hearing, and reader services 
    for individuals who are determined to be blind, after an 
    examination by qualified personnel who meet State licensure laws;
        ``(11) rehabilitation teaching services, and orientation and 
    mobility services, for individuals who are blind;
        ``(12) occupational licenses, tools, equipment, and initial 
    stocks and supplies;
        ``(13) technical assistance and other consultation services to 
    conduct market analyses, develop business plans, and otherwise 
    provide resources, to the extent such resources are authorized to 
    be provided through the statewide workforce investment system, to 
    eligible individuals who are pursuing self-employment or 
    telecommuting or establishing a small business operation as an 
    employment outcome;
        ``(14) rehabilitation technology, including telecommunications, 
    sensory, and other technological aids and devices;
        ``(15) transition services for students with disabilities, that 
    facilitate the achievement of the employment outcome identified in 
    the individualized plan for employment;
        ``(16) supported employment services;
        ``(17) services to the family of an individual with a 
    disability necessary to assist the individual to achieve an 
    employment outcome; and
        ``(18) specific post-employment services necessary to assist an 
    individual with a disability to, retain, regain, or advance in 
    employment.
    ``(b) Vocational Rehabilitation Services for Groups of 
Individuals.--Vocational rehabilitation services provided for the 
benefit of groups of individuals with disabilities may also include the 
following:
        ``(1) In the case of any type of small business operated by 
    individuals with significant disabilities the operation of which 
    can be improved by management services and supervision provided by 
    the designated State agency, the provision of such services and 
    supervision, along or together with the acquisition by the 
    designated State agency of vending facilities or other equipment 
    and initial stocks and supplies.
        ``(2)(A) The establishment, development, or improvement of 
    community rehabilitation programs, including, under special 
    circumstances, the construction of a facility. Such programs shall 
    be used to provide services that promote integration and 
    competitive employment.
        ``(B) The provision of other services, that promise to 
    contribute substantially to the rehabilitation of a group of 
    individuals but that are not related directly to the individualized 
    plan for employment of any 1 individual with a disability.
        ``(3) The use of telecommunications systems (including 
    telephone, television, satellite, radio, and other similar systems) 
    that have the potential for substantially improving delivery 
    methods of activities described in this section and developing 
    appropriate programming to meet the particular needs of individuals 
    with disabilities.
        ``(4)(A) Special services to provide nonvisual access to 
    information for individuals who are blind, including the use of 
    telecommunications, Braille, sound recordings, or other appropriate 
    media.
        ``(B) Captioned television, films, or video cassettes for 
    individuals who are deaf or hard of hearing.
        ``(C) Tactile materials for individuals who are deaf-blind.
        ``(D) Other special services that provide information through 
    tactile, vibratory, auditory, and visual media.
        ``(5) Technical assistance and support services to businesses 
    that are not subject to title I of the Americans with Disabilities 
    Act of 1990 (42 U.S.C. 12111 et seq.) and that are seeking to 
    employ individuals with disabilities.
        ``(6) Consultative and technical assistance services to assist 
    educational agencies in planning for the transition of students 
    with disabilities from school to post-school activities, including 
    employment.

``SEC. 104. NON-FEDERAL SHARE FOR ESTABLISHMENT OF PROGRAM OR 
              CONSTRUCTION.

    ``For the purpose of determining the amount of payments to States 
for carrying out part B (or to an Indian tribe under part C), the non-
Federal share, subject to such limitations and conditions as may be 
prescribed in regulations by the Commissioner, shall include 
contributions of funds made by any private agency, organization, or 
individual to a State or local agency to assist in meeting the costs of 
establishment of a community rehabilitation program or construction, 
under special circumstances, of a facility for such a program, which 
would be regarded as State or local funds except for the condition, 
imposed by the contributor, limiting use of such funds to establishment 
of such a program or construction of such a facility.

``SEC. 105. STATE REHABILITATION COUNCIL.

    ``(a) Establishment.--
        ``(1) In general.--Except as provided in section 
    101(a)(21)(A)(i), to be eligible to receive financial assistance 
    under this title a State shall establish a State Rehabilitation 
    Council (referred to in this section as the `Council') in 
    accordance with this section.
        ``(2) Separate agency for individuals who are blind.--A State 
    that designates a State agency to administer the part of the State 
    plan under which vocational rehabilitation services are provided 
    for individuals who are blind under section 101(a)(2)(A)(i) may 
    establish a separate Council in accordance with this section to 
    perform the duties of such a Council with respect to such State 
    agency.
    ``(b) Composition and Appointment.--
        ``(1) Composition.--
            ``(A) In general.--Except in the case of a separate Council 
        established under subsection (a)(2), the Council shall be 
        composed of--
                ``(i) at least one representative of the Statewide 
            Independent Living Council established under section 705, 
            which representative may be the chairperson or other 
            designee of the Council;
                ``(ii) at least one representative of a parent training 
            and information center established pursuant to section 
            682(a) of the Individuals with Disabilities Education Act 
            (as added by section 101 of the Individuals with 
            Disabilities Education Act Amendments of 1997; Public Law 
            105-17);
                ``(iii) at least one representative of the client 
            assistance program established under section 112;
                ``(iv) at least one qualified vocational rehabilitation 
            counselor, with knowledge of and experience with vocational 
            rehabilitation programs, who shall serve as an ex officio, 
            nonvoting member of the Council if the counselor is an 
            employee of the designated State agency;
                ``(v) at least one representative of community 
            rehabilitation program service providers;
                ``(vi) four representatives of business, industry, and 
            labor;
                ``(vii) representatives of disability advocacy groups 
            representing a cross section of--

                    ``(I) individuals with physical, cognitive, 
                sensory, and mental disabilities; and
                    ``(II) individuals' representatives of individuals 
                with disabilities who have difficulty in representing 
                themselves or are unable due to their disabilities to 
                represent themselves;

                ``(viii) current or former applicants for, or 
            recipients of, vocational rehabilitation services;
                ``(ix) in a State in which one or more projects are 
            carried out under section 121, at least one representative 
            of the directors of the projects;
                ``(x) at least one representative of the State 
            educational agency responsible for the public education of 
            students with disabilities who are eligible to receive 
            services under this title and part B of the Individuals 
            with Disabilities Education Act; and
                ``(xi) at least one representative of the State 
            workforce investment board.
            ``(B) Separate council.--In the case of a separate Council 
        established under subsection (a)(2), the Council shall be 
        composed of--
                ``(i) at least one representative described in 
            subparagraph (A)(i);
                ``(ii) at least one representative described in 
            subparagraph (A)(ii);
                ``(iii) at least one representative described in 
            subparagraph (A)(iii);
                ``(iv) at least one vocational rehabilitation counselor 
            described in subparagraph (A)(iv), who shall serve as 
            described in such subparagraph;
                ``(v) at least one representative described in 
            subparagraph (A)(v);
                ``(vi) four representatives described in subparagraph 
            (A)(vi);
                ``(vii) at least one representative of a disability 
            advocacy group representing individuals who are blind;
                ``(viii) at least one individual's representative, of 
            an individual who--

                    ``(I) is an individual who is blind and has 
                multiple disabilities; and
                    ``(II) has difficulty in representing himself or 
                herself or is unable due to disabilities to represent 
                himself or herself;

                ``(ix) applicants or recipients described in 
            subparagraph (A)(viii);
                ``(x) in a State described in subparagraph (A)(ix), at 
            least one representative described in such subparagraph;
                ``(xi) at least one representative described in 
            subparagraph (A)(x); and
                ``(xii) at least one representative described in 
            subparagraph (A)(xi).
            ``(C) Exception.--In the case of a separate Council 
        established under subsection (a)(2), any Council that is 
        required by State law, as in effect on the date of enactment of 
        the Rehabilitation Act Amendments of 1992, to have fewer than 
        15 members shall be deemed to be in compliance with 
        subparagraph (B) if the Council--
                ``(i) meets the requirements of subparagraph (B), other 
            than the requirements of clauses (vi) and (ix) of such 
            subparagraph; and
                ``(ii) includes at least--

                    ``(I) one representative described in subparagraph 
                (B)(vi); and
                    ``(II) one applicant or recipient described in 
                subparagraph (B)(ix).

        ``(2) Ex officio member.--The Director of the designated State 
    unit shall be an ex officio, nonvoting member of the Council.
        ``(3) Appointment.--Members of the Council shall be appointed 
    by the Governor. The Governor shall select members after soliciting 
    recommendations from representatives of organizations representing 
    a broad range of individuals with disabilities and organizations 
    interested in individuals with disabilities. In selecting members, 
    the Governor shall consider, to the greatest extent practicable, 
    the extent to which minority populations are represented on the 
    Council.
        ``(4) Qualifications.--
            ``(A) In general.--A majority of Council members shall be 
        persons who are--
                ``(i) individuals with disabilities described in 
            section 7(20)(A); and
                ``(ii) not employed by the designated State unit.
            ``(B) Separate council.--In the case of a separate Council 
        established under subsection (a)(2), a majority of Council 
        members shall be persons who are--
                ``(i) blind; and
                ``(ii) not employed by the designated State unit.
        ``(5) Chairperson.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the Council shall select a chairperson from among the 
        membership of the Council.
            ``(B) Designation by governor.--In States in which the 
        chief executive officer does not have veto power pursuant to 
        State law, the Governor shall designate a member of the Council 
        to serve as the chairperson of the Council or shall require the 
        Council to so designate such a member.
        ``(6) Terms of appointment.--
            ``(A) Length of term.--Each member of the Council shall 
        serve for a term of not more than 3 years, except that--
                ``(i) a member appointed to fill a vacancy occurring 
            prior to the expiration of the term for which a predecessor 
            was appointed, shall be appointed for the remainder of such 
            term; and
                ``(ii) the terms of service of the members initially 
            appointed shall be (as specified by the Governor) for such 
            fewer number of years as will provide for the expiration of 
            terms on a staggered basis.
            ``(B) Number of terms.--No member of the Council, other 
        than a representative described in clause (iii) or (ix) of 
        paragraph (1)(A), or clause (iii) or (x) of paragraph (1)(B), 
        may serve more than two consecutive full terms.
        ``(7) Vacancies.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        any vacancy occurring in the membership of the Council shall be 
        filled in the same manner as the original appointment. The 
        vacancy shall not affect the power of the remaining members to 
        execute the duties of the Council.
            ``(B) Delegation.--The Governor may delegate the authority 
        to fill such a vacancy to the remaining members of the Council 
        after making the original appointment.
    ``(c) Functions of Council.--The Council shall, after consulting 
with the State workforce investment board--
        ``(1) review, analyze, and advise the designated State unit 
    regarding the performance of the responsibilities of the unit under 
    this title, particularly responsibilities relating to--
            ``(A) eligibility (including order of selection);
            ``(B) the extent, scope, and effectiveness of services 
        provided; and
            ``(C) functions performed by State agencies that affect or 
        that potentially affect the ability of individuals with 
        disabilities in achieving employment outcomes under this title;
        ``(2) in partnership with the designated State unit--
            ``(A) develop, agree to, and review State goals and 
        priorities in accordance with section 101(a)(15)(C); and
            ``(B) evaluate the effectiveness of the vocational 
        rehabilitation program and submit reports of progress to the 
        Commissioner in accordance with section 101(a)(15)(E);
        ``(3) advise the designated State agency and the designated 
    State unit regarding activities authorized to be carried out under 
    this title, and assist in the preparation of the State plan and 
    amendments to the plan, applications, reports, needs assessments, 
    and evaluations required by this title;
        ``(4) to the extent feasible, conduct a review and analysis of 
    the effectiveness of, and consumer satisfaction with--
            ``(A) the functions performed by the designated State 
        agency;
            ``(B) vocational rehabilitation services provided by State 
        agencies and other public and private entities responsible for 
        providing vocational rehabilitation services to individuals 
        with disabilities under this Act; and
            ``(C) employment outcomes achieved by eligible individuals 
        receiving services under this title, including the availability 
        of health and other employment benefits in connection with such 
        employment outcomes;
        ``(5) prepare and submit an annual report to the Governor and 
    the Commissioner on the status of vocational rehabilitation 
    programs operated within the State, and make the report available 
    to the public;
        ``(6) to avoid duplication of efforts and enhance the number of 
    individuals served, coordinate activities with the activities of 
    other councils within the State, including the Statewide 
    Independent Living Council established under section 705, the 
    advisory panel established under section 612(a)(21) of the 
    Individual with Disabilities Education Act (as amended by section 
    101 of the Individuals with Disabilities Education Act Amendments 
    of 1997; Public Law 105-17), the State Developmental Disabilities 
    Council described in section 124 of the Developmental Disabilities 
    Assistance and Bill of Rights Act (42 U.S.C. 6024), the State 
    mental health planning council established under section 1914(a) of 
    the Public Health Service Act (42 U.S.C. 300x-4(a)), and the State 
    workforce investment board;
        ``(7) provide for coordination and the establishment of working 
    relationships between the designated State agency and the Statewide 
    Independent Living Council and centers for independent living 
    within the State; and
        ``(8) perform such other functions, consistent with the purpose 
    of this title, as the State Rehabilitation Council determines to be 
    appropriate, that are comparable to the other functions performed 
    by the Council.
    ``(d) Resources.--
        ``(1) Plan.--The Council shall prepare, in conjunction with the 
    designated State unit, a plan for the provision of such resources, 
    including such staff and other personnel, as may be necessary and 
    sufficient to carry out the functions of the Council under this 
    section. The resource plan shall, to the maximum extent possible, 
    rely on the use of resources in existence during the period of 
    implementation of the plan.
        ``(2) Resolution of disagreements.--To the extent that there is 
    a disagreement between the Council and the designated State unit in 
    regard to the resources necessary to carry out the functions of the 
    Council as set forth in this section, the disagreement shall be 
    resolved by the Governor consistent with paragraph (1).
        ``(3) Supervision and evaluation.--Each Council shall, 
    consistent with State law, supervise and evaluate such staff and 
    other personnel as may be necessary to carry out its functions 
    under this section.
        ``(4) Personnel conflict of interest.--While assisting the 
    Council in carrying out its duties, staff and other personnel shall 
    not be assigned duties by the designated State unit or any other 
    agency or office of the State, that would create a conflict of 
    interest.
    ``(e) Conflict of Interest.--No member of the Council shall cast a 
vote on any matter that would provide direct financial benefit to the 
member or otherwise give the appearance of a conflict of interest under 
State law.
    ``(f) Meetings.--The Council shall convene at least four meetings a 
year in such places as it determines to be necessary to conduct Council 
business and conduct such forums or hearings as the Council considers 
appropriate. The meetings, hearings, and forums shall be publicly 
announced. The meetings shall be open and accessible to the general 
public unless there is a valid reason for an executive session.
    ``(g) Compensation and Expenses.--The Council may use funds 
allocated to the Council by the designated State unit under this title 
(except for funds appropriated to carry out the client assistance 
program under section 112 and funds reserved pursuant to section 110(c) 
to carry out part C) to reimburse members of the Council for reasonable 
and necessary expenses of attending Council meetings and performing 
Council duties (including child care and personal assistance services), 
and to pay compensation to a member of the Council, if such member is 
not employed or must forfeit wages from other employment, for each day 
the member is engaged in performing the duties of the Council.
    ``(h) Hearings and Forums.--The Council is authorized to hold such 
hearings and forums as the Council may determine to be necessary to 
carry out the duties of the Council.

``SEC. 106. EVALUATION STANDARDS AND PERFORMANCE INDICATORS.

    ``(a) Establishment.--
        ``(1) In general.--
            ``(A) Establishment of standards and indicators.--The 
        Commissioner shall, not later than July 1, 1999, establish and 
        publish evaluation standards and performance indicators for the 
        vocational rehabilitation program carried out under this title.
            ``(B) Review and revision.--Effective July 1, 1999, the 
        Commissioner shall review and, if necessary, revise the 
        evaluation standards and performance indicators every 3 years. 
        Any revisions of the standards and indicators shall be 
        developed with input from State vocational rehabilitation 
        agencies, related professional and consumer organizations, 
        recipients of vocational rehabilitation services, and other 
        interested parties. Any revisions of the standards and 
        indicators shall be subject to the publication, review, and 
        comment provisions of paragraph (3).
            ``(C) Bases.--Effective July 1, 1999, to the maximum extent 
        practicable, the standards and indicators shall be consistent 
        with the core indicators of performance established under 
        section 136(b) of the Workforce Investment Act of 1998.
        ``(2) Measures.--The standards and indicators shall include 
    outcome and related measures of program performance that facilitate 
    the accomplishment of the purpose and policy of this title.
        ``(3) Comment.--The standards and indicators shall be developed 
    with input from State vocational rehabilitation agencies, related 
    professional and consumer organizations, recipients of vocational 
    rehabilitation services, and other interested parties. The 
    Commissioner shall publish in the Federal Register a notice of 
    intent to regulate regarding the development of proposed standards 
    and indicators. Proposed standards and indicators shall be 
    published in the Federal Register for review and comment. Final 
    standards and indicators shall be published in the Federal 
    Register.
    ``(b) Compliance.--
        ``(1) State reports.--In accordance with regulations 
    established by the Secretary, each State shall report to the 
    Commissioner after the end of each fiscal year the extent to which 
    the State is in compliance with the standards and indicators.
        ``(2) Program improvement.--
            ``(A) Plan.--If the Commissioner determines that the 
        performance of any State is below established standards, the 
        Commissioner shall provide technical assistance to the State, 
        and the State and the Commissioner shall jointly develop a 
        program improvement plan outlining the specific actions to be 
        taken by the State to improve program performance.
            ``(B) Review.--The Commissioner shall--
                ``(i) review the program improvement efforts of the 
            State on a biannual basis and, if necessary, request the 
            State to make further revisions to the plan to improve 
            performance; and
                ``(ii) continue to conduct such reviews and request 
            such revisions until the State sustains satisfactory 
            performance over a period of more than 1 year.
    ``(c) Withholding.--If the Commissioner determines that a State 
whose performance falls below the established standards has failed to 
enter into a program improvement plan, or is not complying 
substantially with the terms and conditions of such a program 
improvement plan, the Commissioner shall, consistent with subsections 
(c) and (d) of section 107, reduce or make no further payments to the 
State under this program, until the State has entered into an approved 
program improvement plan, or satisfies the Commissioner that the State 
is complying substantially with the terms and conditions of such a 
program improvement plan, as appropriate.
    ``(d) Report to Congress.--Beginning in fiscal year 1999, the 
Commissioner shall include in each annual report to the Congress under 
section 13 an analysis of program performance, including relative State 
performance, based on the standards and indicators.

``SEC. 107. MONITORING AND REVIEW.

    ``(a) In General.--
        ``(1) Duties.--In carrying out the duties of the Commissioner 
    under this title, the Commissioner shall--
            ``(A) provide for the annual review and periodic onsite 
        monitoring of programs under this title; and
            ``(B) determine whether, in the administration of the State 
        plan, a State is complying substantially with the provisions of 
        such plan and with evaluation standards and performance 
        indicators established under section 106.
        ``(2) Procedures for reviews.--In conducting reviews under this 
    section the Commissioner shall consider, at a minimum--
            ``(A) State policies and procedures;
            ``(B) guidance materials;
            ``(C) decisions resulting from hearings conducted in 
        accordance with due process;
            ``(D) State goals established under section 101(a)(15) and 
        the extent to which the State has achieved such goals;
            ``(E) plans and reports prepared under section 106(b);
            ``(F) consumer satisfaction reviews and analyses described 
        in section 105(c)(4);
            ``(G) information provided by the State Rehabilitation 
        Council established under section 105, if the State has such a 
        Council, or by the commission described in section 
        101(a)(21)(A)(i), if the State has such a commission;
            ``(H) reports; and
            ``(I) budget and financial management data.
        ``(3) Procedures for monitoring.--In conducting monitoring 
    under this section the Commissioner shall conduct--
            ``(A) onsite visits, including onsite reviews of records to 
        verify that the State is following requirements regarding the 
        order of selection set forth in section 101(a)(5)(A);
            ``(B) public hearings and other strategies for collecting 
        information from the public;
            ``(C) meetings with the State Rehabilitation Council, if 
        the State has such a Council or with the commission described 
        in section 101(a)(21)(A)(i), if the State has such a 
        commission;
            ``(D) reviews of individual case files, including 
        individualized plans for employment and ineligibility 
        determinations; and
            ``(E) meetings with qualified vocational rehabilitation 
        counselors and other personnel.
        ``(4) Areas of inquiry.--In conducting the review and 
    monitoring, the Commissioner shall examine--
            ``(A) the eligibility process;
            ``(B) the provision of services, including, if applicable, 
        the order of selection;
            ``(C) such other areas as may be identified by the public 
        or through meetings with the State Rehabilitation Council, if 
        the State has such a Council or with the commission described 
        in section 101(a)(21)(A)(i), if the State has such a 
        commission; and
            ``(D) such other areas of inquiry as the Commissioner may 
        consider appropriate.
        ``(5) Reports.--If the Commissioner issues a report detailing 
    the findings of an annual review or onsite monitoring conducted 
    under this section, the report shall be made available to the State 
    Rehabilitation Council, if the State has such a Council, for use in 
    the development and modification of the State plan described in 
    section 101.
    ``(b) Technical Assistance.--The Commissioner shall--
        ``(1) provide technical assistance to programs under this title 
    regarding improving the quality of vocational rehabilitation 
    services provided; and
        ``(2) provide technical assistance and establish a corrective 
    action plan for a program under this title if the Commissioner 
    finds that the program fails to comply substantially with the 
    provisions of the State plan, or with evaluation standards or 
    performance indicators established under section 106, in order to 
    ensure that such failure is corrected as soon as practicable.
    ``(c) Failure To Comply With Plan.--
        ``(1) Withholding payments.--Whenever the Commissioner, after 
    providing reasonable notice and an opportunity for a hearing to the 
    State agency administering or supervising the administration of the 
    State plan approved under section 101, finds that--
            ``(A) the plan has been so changed that it no longer 
        complies with the requirements of section 101(a); or
            ``(B) in the administration of the plan there is a failure 
        to comply substantially with any provision of such plan or with 
        an evaluation standard or performance indicator established 
        under section 106,
    the Commissioner shall notify such State agency that no further 
    payments will be made to the State under this title (or, in the 
    discretion of the Commissioner, that such further payments will be 
    reduced, in accordance with regulations the Commissioner shall 
    prescribe, or that further payments will not be made to the State 
    only for the projects under the parts of the State plan affected by 
    such failure), until the Commissioner is satisfied there is no 
    longer any such failure.
        ``(2) Period.--Until the Commissioner is so satisfied, the 
    Commissioner shall make no further payments to such State under 
    this title (or shall reduce payments or limit payments to projects 
    under those parts of the State plan in which there is no such 
    failure).
        ``(3) Disbursal of withheld funds.--The Commissioner may, in 
    accordance with regulations the Secretary shall prescribe, disburse 
    any funds withheld from a State under paragraph (1) to any public 
    or nonprofit private organization or agency within such State or to 
    any political subdivision of such State submitting a plan meeting 
    the requirements of section 101(a). The Commissioner may not make 
    any payment under this paragraph unless the entity to which such 
    payment is made has provided assurances to the Commissioner that 
    such entity will contribute, for purposes of carrying out such 
    plan, the same amount as the State would have been obligated to 
    contribute if the State received such payment.
    ``(d) Review.--
        ``(1) Petition.--Any State that is dissatisfied with a final 
    determination of the Commissioner under section 101(b) or 
    subsection (c) may file a petition for judicial review of such 
    determination in the United States Court of Appeals for the circuit 
    in which the State is located. Such a petition may be filed only 
    within the 30-day period beginning on the date that notice of such 
    final determination was received by the State. The clerk of the 
    court shall transmit a copy of the petition to the Commissioner or 
    to any officer designated by the Commissioner for that purpose. In 
    accordance with section 2112 of title 28, United States Code, the 
    Commissioner shall file with the court a record of the proceeding 
    on which the Commissioner based the determination being appealed by 
    the State. Until a record is so filed, the Commissioner may modify 
    or set aside any determination made under such proceedings.
        ``(2) Submissions and determinations.--If, in an action under 
    this subsection to review a final determination of the Commissioner 
    under section 101(b) or subsection (c), the petitioner or the 
    Commissioner applies to the court for leave to have additional oral 
    submissions or written presentations made respecting such 
    determination, the court may, for good cause shown, order the 
    Commissioner to provide within 30 days an additional opportunity to 
    make such submissions and presentations. Within such period, the 
    Commissioner may revise any findings of fact, modify or set aside 
    the determination being reviewed, or make a new determination by 
    reason of the additional submissions and presentations, and shall 
    file such modified or new determination, and any revised findings 
    of fact, with the return of such submissions and presentations. The 
    court shall thereafter review such new or modified determination.
        ``(3) Standards of review.--
            ``(A) In general.--Upon the filing of a petition under 
        paragraph (1) for judicial review of a determination, the court 
        shall have jurisdiction--
                ``(i) to grant appropriate relief as provided in 
            chapter 7 of title 5, United States Code, except for 
            interim relief with respect to a determination under 
            subsection (c); and
                ``(ii) except as otherwise provided in subparagraph 
            (B), to review such determination in accordance with 
            chapter 7 of title 5, United States Code.
            ``(B) Substantial evidence.--Section 706 of title 5, United 
        States Code, shall apply to the review of any determination 
        under this subsection, except that the standard for review 
        prescribed by paragraph (2)(E) of such section 706 shall not 
        apply and the court shall hold unlawful and set aside such 
        determination if the court finds that the determination is not 
        supported by substantial evidence in the record of the 
        proceeding submitted pursuant to paragraph (1), as supplemented 
        by any additional submissions and presentations filed under 
        paragraph (2).

``SEC. 108. EXPENDITURE OF CERTAIN AMOUNTS.

    ``(a) Expenditure.--Amounts described in subsection (b) may not be 
expended by a State for any purpose other than carrying out programs 
for which the State receives financial assistance under this title, 
under part B of title VI, or under title VII.
    ``(b) Amounts.--The amounts referred to in subsection (a) are 
amounts provided to a State under the Social Security Act (42 U.S.C. 
301 et seq.) as reimbursement for the expenditure of payments received 
by the State from allotments under section 110 of this Act.

``SEC. 109. TRAINING OF EMPLOYERS WITH RESPECT TO AMERICANS WITH 
              DISABILITIES ACT OF 1990.

    ``A State may expend payments received under section 111--
        ``(1) to carry out a program to train employers with respect to 
    compliance with the requirements of title I of the Americans with 
    Disabilities Act of 1990 (42 U.S.C. 12111 et seq.); and
        ``(2) to inform employers of the existence of the program and 
    the availability of the services of the program.

           ``Part B--Basic Vocational Rehabilitation Services

``SEC. 110. STATE ALLOTMENTS.

    ``(a)(1) Subject to the provisions of subsection (c), for each 
fiscal year beginning before October 1, 1978, each State shall be 
entitled to an allotment of an amount bearing the same ratio to the 
amount authorized to be appropriated under section 100(b)(1) for 
allotment under this section as the product of--
        ``(A) the population of the State; and
        ``(B) the square of its allotment percentage,
bears to the sum of the corresponding products for all the States.
    ``(2)(A) For each fiscal year beginning on or after October 1, 
1978, each State shall be entitled to an allotment in an amount equal 
to the amount such State received under paragraph (1) for the fiscal 
year ending September 30, 1978, and an additional amount determined 
pursuant to subparagraph (B) of this paragraph.
    ``(B) For each fiscal year beginning on or after October 1, 1978, 
each State shall be entitled to an allotment, from any amount 
authorized to be appropriated for such fiscal year under section 
100(b)(1) for allotment under this section in excess of the amount 
appropriated under section 100(b)(1)(A) for the fiscal year ending 
September 30, 1978, in an amount equal to the sum of--
        ``(i) an amount bearing the same ratio to 50 percent of such 
    excess amount as the product of the population of the State and the 
    square of its allotment percentage bears to the sum of the 
    corresponding products for all the States; and
        ``(ii) an amount bearing the same ratio to 50 percent of such 
    excess amount as the product of the population of the State and its 
    allotment percentage bears to the sum of the corresponding products 
    for all the States.
    ``(3) The sum of the payment to any State (other than Guam, 
American Samoa, the Virgin Islands, and the Commonwealth of the 
Northern Mariana Islands) under this subsection for any fiscal year 
which is less than \1/3\ of 1 percent of the amount appropriated under 
section 100(b)(1), or $3,000,000, whichever is greater, shall be 
increased to that amount, the total of the increases thereby required 
being derived by proportionately reducing the allotment to each of the 
remaining such States under this subsection, but with such adjustments 
as may be necessary to prevent the sum of the allotments made under 
this subsection to any such remaining State from being thereby reduced 
to less than that amount.
    ``(b)(1) Not later than 45 days prior to the end of the fiscal 
year, the Commissioner shall determine, after reasonable opportunity 
for the submission to the Commissioner of comments by the State agency 
administering or supervising the program established under this title, 
that any payment of an allotment to a State under section 111(a) for 
any fiscal year will not be utilized by such State in carrying out the 
purposes of this title.
    ``(2) As soon as practicable but not later than the end of the 
fiscal year, the Commissioner shall make such amount available for 
carrying out the purposes of this title to one or more other States to 
the extent the Commissioner determines such other State will be able to 
use such additional amount during that fiscal year or the subsequent 
fiscal year for carrying out such purposes. The Commissioner shall make 
such amount available only if such other State will be able to make 
sufficient payments from non-Federal sources to pay for the non-Federal 
share of the cost of vocational rehabilitation services under the State 
plan for the fiscal year for which the amount was appropriated.
    ``(3) For the purposes of this part, any amount made available to a 
State for any fiscal year pursuant to this subsection shall be regarded 
as an increase of such State's allotment (as determined under the 
preceding provisions of this section) for such year.
    ``(c)(1) For fiscal year 1987 and for each subsequent fiscal year, 
the Commissioner shall reserve from the amount appropriated under 
section 100(b)(1) for allotment under this section a sum, determined 
under paragraph (2), to carry out the purposes of part C.
    ``(2) The sum referred to in paragraph (1) shall be, as determined 
by the Secretary--
        ``(A) not less than three-quarters of 1 percent and not more 
    than 1.5 percent of the amount referred to in paragraph (1), for 
    fiscal year 1999; and
        ``(B) not less than 1 percent and not more than 1.5 percent of 
    the amount referred to in paragraph (1), for each of fiscal years 
    2000 through 2003.

``SEC. 111. PAYMENTS TO STATES.

    ``(a)(1) Except as provided in paragraph (2), from each State's 
allotment under this part for any fiscal year, the Commissioner shall 
pay to a State an amount equal to the Federal share of the cost of 
vocational rehabilitation services under the plan for that State 
approved under section 101, including expenditures for the 
administration of the State plan.
    ``(2)(A) The total of payments under paragraph (1) to a State for a 
fiscal year may not exceed its allotment under subsection (a) of 
section 110 for such year.
    ``(B) For fiscal year 1994 and each fiscal year thereafter, the 
amount otherwise payable to a State for a fiscal year under this 
section shall be reduced by the amount by which expenditures from non-
Federal sources under the State plan under this title for the previous 
fiscal year are less than the total of such expenditures for the second 
fiscal year preceding the previous fiscal year.
    ``(C) The Commissioner may waive or modify any requirement or 
limitation under subparagraph (B) or section 101(a)(17) if the 
Commissioner determines that a waiver or modification is an equitable 
response to exceptional or uncontrollable circumstances affecting the 
State.
    ``(3)(A) Except as provided in subparagraph (B), the amount of a 
payment under this section with respect to any construction project in 
any State shall be equal to the same percentage of the cost of such 
project as the Federal share that is applicable in the case of 
rehabilitation facilities (as defined in section 645(g) of the Public 
Health Service Act (42 U.S.C. 291o(a))), in such State.
    ``(B) If the Federal share with respect to rehabilitation 
facilities in such State is determined pursuant to section 645(b)(2) of 
such Act (42 U.S.C. 291o(b)(2)), the percentage of the cost for 
purposes of this section shall be determined in accordance with 
regulations prescribed by the Commissioner designed to achieve as 
nearly as practicable results comparable to the results obtained under 
such section.
    ``(b) The method of computing and paying amounts pursuant to 
subsection (a) shall be as follows:
        ``(1) The Commissioner shall, prior to the beginning of each 
    calendar quarter or other period prescribed by the Commissioner, 
    estimate the amount to be paid to each State under the provisions 
    of such subsection for such period, such estimate to be based on 
    such records of the State and information furnished by it, and such 
    other investigation as the Commissioner may find necessary.
        ``(2) The Commissioner shall pay, from the allotment available 
    therefor, the amount so estimated by the Commissioner for such 
    period, reduced or increased, as the case may be, by any sum (not 
    previously adjusted under this paragraph) by which the Commissioner 
    finds that the estimate of the amount to be paid the State for any 
    prior period under such subsection was greater or less than the 
    amount which should have been paid to the State for such prior 
    period under such subsection. Such payment shall be made prior to 
    audit or settlement by the General Accounting Office, shall be made 
    through the disbursing facilities of the Treasury Department, and 
    shall be made in such installments as the Commissioner may 
    determine.

``SEC. 112. CLIENT ASSISTANCE PROGRAM.

    ``(a) From funds appropriated under subsection (h), the Secretary 
shall, in accordance with this section, make grants to States to 
establish and carry out client assistance programs to provide 
assistance in informing and advising all clients and client applicants 
of all available benefits under this Act, and, upon request of such 
clients or client applicants, to assist and advocate for such clients 
or applicants in their relationships with projects, programs, and 
services provided under this Act, including assistance and advocacy in 
pursuing legal, administrative, or other appropriate remedies to ensure 
the protection of the rights of such individuals under this Act and to 
facilitate access to the services funded under this Act through 
individual and systemic advocacy. The client assistance program shall 
provide information on the available services and benefits under this 
Act and title I of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12111 et seq.) to individuals with disabilities in the State, 
especially with regard to individuals with disabilities who have 
traditionally been unserved or underserved by vocational rehabilitation 
programs. In providing assistance and advocacy under this subsection 
with respect to services under this title, a client assistance program 
may provide the assistance and advocacy with respect to services that 
are directly related to facilitating the employment of the individual.
    ``(b) No State may receive payments from its allotment under this 
Act in any fiscal year unless the State has in effect not later than 
October 1, 1984, a client assistance program which--
        ``(1) has the authority to pursue legal, administrative, and 
    other appropriate remedies to ensure the protection of rights of 
    individuals with disabilities who are receiving treatments, 
    services, or rehabilitation under this Act within the State; and
        ``(2) meets the requirements of designation under subsection 
    (c).
    ``(c)(1)(A) The Governor shall designate a public or private agency 
to conduct the client assistance program under this section. Except as 
provided in the last sentence of this subparagraph, the Governor shall 
designate an agency which is independent of any agency which provides 
treatment, services, or rehabilitation to individuals under this Act. 
If there is an agency in the State which has, or had, prior to the date 
of enactment of the Rehabilitation Amendments of 1984, served as a 
client assistance agency under this section and which received Federal 
financial assistance under this Act, the Governor may, in the initial 
designation, designate an agency which provides treatment, services, or 
rehabilitation to individuals with disabilities under this Act.
    ``(B)(i) The Governor may not redesignate the agency designated 
under subparagraph (A) without good cause and unless--
        ``(I) the Governor has given the agency 30 days notice of the 
    intention to make such redesignation, including specification of 
    the good cause for such redesignation and an opportunity to respond 
    to the assertion that good cause has been shown;
        ``(II) individuals with disabilities or the individuals' 
    representatives have timely notice of the redesignation and 
    opportunity for public comment; and
        ``(III) the agency has the opportunity to appeal to the 
    Commissioner on the basis that the redesignation was not for good 
    cause.
    ``(ii) If, after the date of enactment of the Rehabilitation Act 
Amendments of 1998--
        ``(I) a designated State agency undergoes any change in the 
    organizational structure of the agency that results in the creation 
    of one or more new State agencies or departments or results in the 
    merger of the designated State agency with one or more other State 
    agencies or departments; and
        ``(II) an agency (including an office or other unit) within the 
    designated State agency was conducting a client assistance program 
    before the change under the last sentence of subparagraph (A),
the Governor shall redesignate the agency conducting the program. In 
conducting the redesignation, the Governor shall designate to conduct 
the program an agency that is independent of any agency that provides 
treatment, services, or rehabilitation to individuals with disabilities 
under this Act.
    ``(2) In carrying out the provisions of this section, the Governor 
shall consult with the director of the State vocational rehabilitation 
agency, the head of the developmental disability protection and 
advocacy agency, and with representatives of professional and consumer 
organizations serving individuals with disabilities in the State.
    ``(3) The agency designated under this subsection shall be 
accountable for the proper use of funds made available to the agency.
    ``(d) The agency designated under subsection (c) of this section 
may not bring any class action in carrying out its responsibilities 
under this section.
    ``(e)(1)(A) The Secretary shall allot the sums appropriated for 
each fiscal year under this section among the States on the basis of 
relative population of each State, except that no State shall receive 
less than $50,000.
    ``(B) The Secretary shall allot $30,000 each to American Samoa, 
Guam, the Virgin Islands, and the Commonwealth of the Northern Mariana 
Islands.
    ``(C) For the purpose of this paragraph, the term `State' does not 
include American Samoa, Guam, the Virgin Islands, and the Commonwealth 
of the Northern Mariana Islands.
    ``(D)(i) In any fiscal year that the funds appropriated for such 
fiscal year exceed $7,500,000, the minimum allotment shall be $100,000 
for States and $45,000 for territories.
    ``(ii) For any fiscal year in which the total amount appropriated 
under subsection (h) exceeds the total amount appropriated under such 
subsection for the preceding fiscal year, the Secretary shall increase 
each of the minimum allotments under clause (i) by a percentage that 
shall not exceed the percentage increase in the total amount 
appropriated under such subsection between the preceding fiscal year 
and the fiscal year involved.
    ``(2) The amount of an allotment to a State for a fiscal year which 
the Secretary determines will not be required by the State during the 
period for which it is available for the purpose for which allotted 
shall be available for reallotment by the Secretary at appropriate 
times to other States with respect to which such a determination has 
not been made, in proportion to the original allotments of such States 
for such fiscal year, but with such proportionate amount for any of 
such other States being reduced to the extent it exceeds the sum the 
Secretary estimates such State needs and will be able to use during 
such period, and the total of such reduction shall be similarly 
reallotted among the States whose proportionate amounts were not so 
reduced. Any such amount so reallotted to a State for a fiscal year 
shall be deemed to be a part of its allotment for such fiscal year.
    ``(3) Except as specifically prohibited by or as otherwise provided 
in State law, the Secretary shall pay to the agency designated under 
subsection (c) the amount specified in the application approved under 
subsection (f).
    ``(f) No grant may be made under this section unless the State 
submits an application to the Secretary at such time, in such manner, 
and containing or accompanied by such information as the Secretary 
deems necessary to meet the requirements of this section.
    ``(g) The Secretary shall prescribe regulations applicable to the 
client assistance program which shall include the following 
requirements:
        ``(1) No employees of such programs shall, while so employed, 
    serve as staff or consultants of any rehabilitation project, 
    program, or facility receiving assistance under this Act in the 
    State.
        ``(2) Each program shall be afforded reasonable access to 
    policymaking and administrative personnel in the State and local 
    rehabilitation programs, projects, or facilities.
        ``(3)(A) Each program shall contain provisions designed to 
    assure that to the maximum extent possible alternative means of 
    dispute resolution are available for use at the discretion of an 
    applicant or client of the program prior to resorting to litigation 
    or formal adjudication to resolve a dispute arising under this 
    section.
        ``(B) In subparagraph (A), the term `alternative means of 
    dispute resolution' means any procedure, including good faith 
    negotiation, conciliation, facilitation, mediation, factfinding, 
    and arbitration, and any combination of procedures, that is used in 
    lieu of litigation in a court or formal adjudication in an 
    administrative forum, to resolve a dispute arising under this 
    section.
        ``(4) For purposes of any periodic audit, report, or evaluation 
    of the performance of a client assistance program under this 
    section, the Secretary shall not require such a program to disclose 
    the identity of, or any other personally identifiable information 
    related to, any individual requesting assistance under such 
    program.
    ``(h) There are authorized to be appropriated such sums as may be 
necessary for fiscal years 1999 through 2003 to carry out the 
provisions of this section.

      ``Part C--American Indian Vocational Rehabilitation Services

``SEC. 121. VOCATIONAL REHABILITATION SERVICES GRANTS.

    ``(a) The Commissioner, in accordance with the provisions of this 
part, may make grants to the governing bodies of Indian tribes located 
on Federal and State reservations (and consortia of such governing 
bodies) to pay 90 percent of the costs of vocational rehabilitation 
services for American Indians who are individuals with disabilities 
residing on or near such reservations. The non-Federal share of such 
costs may be in cash or in kind, fairly valued, and the Commissioner 
may waive such non-Federal share requirement in order to carry out the 
purposes of this Act.
    ``(b)(1) No grant may be made under this part for any fiscal year 
unless an application therefor has been submitted to and approved by 
the Commissioner. The Commissioner may not approve an application 
unless the application--
        ``(A) is made at such time, in such manner, and contains such 
    information as the Commissioner may require;
        ``(B) contains assurances that the rehabilitation services 
    provided under this part to American Indians who are individuals 
    with disabilities residing on or near a reservation in a State 
    shall be, to the maximum extent feasible, comparable to 
    rehabilitation services provided under this title to other 
    individuals with disabilities residing in the State and that, where 
    appropriate, may include services traditionally used by Indian 
    tribes; and
        ``(C) contains assurances that the application was developed in 
    consultation with the designated State unit of the State.
    ``(2) The provisions of sections 5, 6, 7, and 102(a) of the Indian 
Self-Determination and Education Assistance Act shall be applicable to 
any application submitted under this part. For purposes of this 
paragraph, any reference in any such provision to the Secretary of 
Education or to the Secretary of the Interior shall be considered to be 
a reference to the Commissioner.
    ``(3) Any application approved under this part shall be effective 
for not more than 60 months, except as determined otherwise by the 
Commissioner pursuant to prescribed regulations. The State shall 
continue to provide vocational rehabilitation services under its State 
plan to American Indians residing on or near a reservation whenever 
such State includes any such American Indians in its State population 
under section 110(a)(1).
    ``(4) In making grants under this part, the Secretary shall give 
priority consideration to applications for the continuation of programs 
which have been funded under this part.
    ``(5) Nothing in this section may be construed to authorize a 
separate service delivery system for Indian residents of a State who 
reside in non-reservation areas.
    ``(c) The term `reservation' includes Indian reservations, public 
domain Indian allotments, former Indian reservations in Oklahoma, and 
land held by incorporated Native groups, regional corporations, and 
village corporations under the provisions of the Alaska Native Claims 
Settlement Act.

    ``Part D--Vocational Rehabilitation Services Client Information

``SEC. 131. DATA SHARING.

    ``(a) In General.--
        ``(1) Memorandum of understanding.--The Secretary of Education 
    and the Secretary of Health and Human Services shall enter into a 
    memorandum of understanding for the purposes of exchanging data of 
    mutual importance--
            ``(A) that concern clients of designated State agencies; 
        and
            ``(B) that are data maintained either by--
                ``(i) the Rehabilitation Services Administration, as 
            required by section 13; or
                ``(ii) the Social Security Administration, from its 
            Summary Earnings and Records and Master Beneficiary 
            Records.
        ``(2) Employment statistics.--The Secretary of Labor shall 
    provide the Commissioner with employment statistics specified in 
    section 15 of the Wagner-Peyser Act, that facilitate evaluation by 
    the Commissioner of the program carried out under part B, and allow 
    the Commissioner to compare the progress of individuals with 
    disabilities who are assisted under the program in securing, 
    retaining, regaining, and advancing in employment with the progress 
    made by individuals who are assisted under title I of the Workforce 
    Investment Act of 1998.
    ``(b) Treatment of Information.--For purposes of the exchange 
described in subsection (a)(1), the data described in subsection 
(a)(1)(B)(ii) shall not be considered return information (as defined in 
section 6103(b)(2) of the Internal Revenue Code of 1986) and, as 
appropriate, the confidentiality of all client information shall be 
maintained by the Rehabilitation Services Administration and the Social 
Security Administration.''.

SEC. 405. RESEARCH AND TRAINING.

    Title II of the Rehabilitation Act of 1973 (29 U.S.C. 760 et seq.), 
is amended to read as follows:

                   ``TITLE II--RESEARCH AND TRAINING


                         ``declaration of purpose

    ``Sec. 200. The purpose of this title is to--
        ``(1) provide for research, demonstration projects, training, 
    and related activities to maximize the full inclusion and 
    integration into society, employment, independent living, family 
    support, and economic and social self-sufficiency of individuals 
    with disabilities of all ages, with particular emphasis on 
    improving the effectiveness of services authorized under this Act;
        ``(2) provide for a comprehensive and coordinated approach to 
    the support and conduct of such research, demonstration projects, 
    training, and related activities and to ensure that the approach is 
    in accordance with the 5-year plan developed under section 202(h);
        ``(3) promote the transfer of rehabilitation technology to 
    individuals with disabilities through research and demonstration 
    projects relating to--
            ``(A) the procurement process for the purchase of 
        rehabilitation technology;
            ``(B) the utilization of rehabilitation technology on a 
        national basis;
            ``(C) specific adaptations or customizations of products to 
        enable individuals with disabilities to live more 
        independently; and
            ``(D) the development or transfer of assistive technology;
        ``(4) ensure the widespread distribution, in usable formats, of 
    practical scientific and technological information--
            ``(A) generated by research, demonstration projects, 
        training, and related activities; and
            ``(B) regarding state-of-the-art practices, improvements in 
        the services authorized under this Act, rehabilitation 
        technology, and new knowledge regarding disabilities,
    to rehabilitation professionals, individuals with disabilities, and 
    other interested parties, including the general public;
        ``(5) identify effective strategies that enhance the 
    opportunities of individuals with disabilities to engage in 
    employment, including employment involving telecommuting and self-
    employment; and
        ``(6) increase opportunities for researchers who are members of 
    traditionally underserved populations, including researchers who 
    are members of minority groups and researchers who are individuals 
    with disabilities.


                    ``authorization of appropriations

    ``Sec. 201. (a) There are authorized to be appropriated--
        ``(1) for the purpose of providing for the expenses of the 
    National Institute on Disability and Rehabilitation Research under 
    section 202, which shall include the expenses of the Rehabilitation 
    Research Advisory Council under section 205, and shall not include 
    the expenses of such Institute to carry out section 204, such sums 
    as may be necessary for each of fiscal years 1999 through 2003; and
        ``(2) to carry out section 204, such sums as may be necessary 
    for each of fiscal years 1999 through 2003.
    ``(b) Funds appropriated under this title shall remain available 
until expended.


      ``national institute on disability and rehabilitation research

    ``Sec. 202. (a)(1) There is established within the Department of 
Education a National Institute on Disability and Rehabilitation 
Research (hereinafter in this title referred to as the `Institute'), 
which shall be headed by a Director (hereinafter in this title referred 
to as the `Director'), in order to--
        ``(A) promote, coordinate, and provide for--
            ``(i) research;
            ``(ii) demonstration projects and training; and
            ``(iii) related activities,
    with respect to individuals with disabilities;
        ``(B) more effectively carry out activities through the 
    programs under section 204 and activities under this section;
        ``(C) widely disseminate information from the activities 
    described in subparagraphs (A) and (B); and
        ``(D) provide leadership in advancing the quality of life of 
    individuals with disabilities.
    ``(2) In the performance of the functions of the office, the 
Director shall be directly responsible to the Secretary or to the same 
Under Secretary or Assistant Secretary of the Department of Education 
to whom the Commissioner is responsible under section 3(a).
    ``(b) The Director, through the Institute, shall be responsible 
for--
        ``(1) administering the programs described in section 204 and 
    activities under this section;
        ``(2) widely disseminating findings, conclusions, and 
    recommendations, resulting from research, demonstration projects, 
    training, and related activities (referred to in this title as 
    `covered activities') funded by the Institute, to--
            ``(A) other Federal, State, tribal, and local public 
        agencies;
            ``(B) private organizations engaged in research relating to 
        rehabilitation or providing rehabilitation services;
            ``(C) rehabilitation practitioners; and
            ``(D) individuals with disabilities and the individuals' 
        representatives;
        ``(3) coordinating, through the Interagency Committee 
    established by section 203 of this Act, all Federal programs and 
    policies relating to research in rehabilitation;
        ``(4) widely disseminating educational materials and research 
    results, concerning ways to maximize the full inclusion and 
    integration into society, employment, independent living, family 
    support, and economic and social self-sufficiency of individuals 
    with disabilities, to--
            ``(A) public and private entities, including--
                ``(i) elementary and secondary schools (as defined in 
            section 14101 of the Elementary and Secondary Education Act 
            of 1965; and
                ``(ii) institutions of higher education;
            ``(B) rehabilitation practitioners;
            ``(C) individuals with disabilities (especially such 
        individuals who are members of minority groups or of 
        populations that are unserved or underserved by programs under 
        this Act); and
            ``(D) the individuals' representatives for the individuals 
        described in subparagraph (C);
        ``(5)(A) conducting an education program to inform the public 
    about ways of providing for the rehabilitation of individuals with 
    disabilities, including information relating to--
            ``(i) family care;
            ``(ii) self-care; and
            ``(iii) assistive technology devices and assistive 
        technology services; and
        ``(B) as part of the program, disseminating engineering 
    information about assistive technology devices;
        ``(6) conducting conferences, seminars, and workshops 
    (including in-service training programs and programs for 
    individuals with disabilities) concerning advances in 
    rehabilitation research and rehabilitation technology (including 
    advances concerning the selection and use of assistive technology 
    devices and assistive technology services), pertinent to the full 
    inclusion and integration into society, employment, independent 
    living, family support, and economic and social self-sufficiency of 
    individuals with disabilities;
        ``(7) taking whatever action is necessary to keep the Congress 
    fully and currently informed with respect to the implementation and 
    conduct of programs and activities carried out under this title, 
    including dissemination activities;
        ``(8) producing, in conjunction with the Department of Labor, 
    the National Center for Health Statistics, the Bureau of the 
    Census, the Health Care Financing Administration, the Social 
    Security Administration, the Bureau of Indian Affairs, the Indian 
    Health Service, and other Federal departments and agencies, as may 
    be appropriate, statistical reports and studies on the employment, 
    self-employment, telecommuting, health, income, and other 
    demographic characteristics of individuals with disabilities, 
    including information on individuals with disabilities who live in 
    rural or inner-city settings, with particular attention given to 
    underserved populations, and widely disseminating such reports and 
    studies to rehabilitation professionals, individuals with 
    disabilities, the individuals' representatives, and others to 
    assist in the planning, assessment, and evaluation of vocational 
    and other rehabilitation services for individuals with 
    disabilities;
        ``(9) conducting research on consumer satisfaction with 
    vocational rehabilitation services for the purpose of identifying 
    effective rehabilitation programs and policies that promote the 
    independence of individuals with disabilities and achievement of 
    long-term vocational goals;
        ``(10) conducting research to examine the relationship between 
    the provision of specific services and successful, sustained 
    employment outcomes, including employment outcomes involving self-
    employment and telecommuting; and
        ``(11) coordinating activities with the Attorney General 
    regarding the provision of information, training, or technical 
    assistance regarding the Americans with Disabilities Act of 1990 
    (42 U.S.C. 12101 et seq.) to ensure consistency with the plan for 
    technical assistance required under section 506 of such Act (42 
    U.S.C. 12206).
    ``(c)(1) The Director, acting through the Institute or one or more 
entities funded by the Institute, shall provide for the development and 
dissemination of models to address consumer-driven information needs 
related to assistive technology devices and assistive technology 
services.
    ``(2) The development and dissemination of models may include--
        ``(A) convening groups of individuals with disabilities, family 
    members and advocates of such individuals, commercial producers of 
    assistive technology, and entities funded by the Institute to 
    develop, assess, and disseminate knowledge about information needs 
    related to assistive technology;
        ``(B) identifying the types of information regarding assistive 
    technology devices and assistive technology services that 
    individuals with disabilities find especially useful;
        ``(C) evaluating current models, and developing new models, for 
    transmitting the information described in subparagraph (B) to 
    consumers and to commercial producers of assistive technology; and
        ``(D) disseminating through one or more entities funded by the 
    Institute, the models described in subparagraph (C) and findings 
    regarding the information described in subparagraph (B) to 
    consumers and commercial producers of assistive technology.
    ``(d)(1) The Director of the Institute shall be appointed by the 
Secretary. The Director shall be an individual with substantial 
experience in rehabilitation and in research administration.
    ``(2) The Director, subject to the approval of the President, may 
appoint, for terms not to exceed three years, without regard to the 
provisions of title 5, United States Code, governing appointment in the 
competitive service, and may compensate, without regard to the 
provisions of chapter 51 and subchapter III of chapter 53 of such title 
relating to classification and General Schedule pay rates, such 
technical and professional employees of the Institute as the Director 
determines to be necessary to accomplish the functions of the Institute 
and also appoint and compensate without regard to such provisions, in a 
number not to exceed one-fifth of the number of full-time, regular 
technical and professional employees of the Institute.
    ``(3) The Director may obtain the services of consultants, without 
regard to the provisions of title 5, United States Code, governing 
appointments in the competitive service.
    ``(e) The Director, pursuant to regulations which the Secretary 
shall prescribe, may establish and maintain fellowships with such 
stipends and allowances, including travel and subsistence expenses 
provided for under title 5, United States Code, as the Director 
considers necessary to procure the assistance of highly qualified 
research fellows, including individuals with disabilities, from the 
United States and foreign countries.
    ``(f)(1) The Director shall provide for scientific peer review of 
all applications for financial assistance for research, training, and 
demonstration projects over which the Director has authority. The 
scientific peer review shall be conducted by individuals who are not 
Federal employees, who are scientists or other experts in the 
rehabilitation field (including the independent living field), 
including knowledgeable individuals with disabilities, and the 
individuals' representatives, and who are competent to review 
applications for the financial assistance.
    ``(2) In providing for such scientific peer review, the Secretary 
shall provide for training, as necessary and appropriate, to facilitate 
the effective participation of those individuals selected to 
participate in such review.
    ``(g) Not less than 90 percent of the funds appropriated under this 
title for any fiscal year shall be expended by the Director to carry 
out activities under this title through grants, contracts, or 
cooperative agreements. Up to 10 percent of the funds appropriated 
under this title for any fiscal year may be expended directly for the 
purpose of carrying out the functions of the Director under this 
section.
    ``(h)(1) The Director shall--
        ``(A) by October 1, 1998, and every fifth October 1 thereafter, 
    prepare and publish in the Federal Register for public comment a 
    draft of a 5-year plan that outlines priorities for rehabilitation 
    research, demonstration projects, training, and related activities 
    and explains the basis for such priorities;
        ``(B) by June 1, 1999, and every fifth June 1 thereafter, after 
    considering public comments, submit the plan in final form to the 
    appropriate committees of Congress;
        ``(C) at appropriate intervals, prepare and submit revisions in 
    the plan to the appropriate committees of Congress; and
        ``(D) annually prepare and submit progress reports on the plan 
    to the appropriate committees of Congress.
    ``(2) Such plan shall--
        ``(A) identify any covered activity that should be conducted 
    under this section and section 204 respecting the full inclusion 
    and integration into society of individuals with disabilities, 
    especially in the area of employment;
        ``(B) determine the funding priorities for covered activities 
    to be conducted under this section and section 204;
        ``(C) specify appropriate goals and timetables for covered 
    activities to be conducted under this section and section 204;
        ``(D) be developed by the Director--
            ``(i) after consultation with the Rehabilitation Research 
        Advisory Council established under section 205;
            ``(ii) in coordination with the Commissioner;
            ``(iii) after consultation with the National Council on 
        Disability established under title IV, the Secretary of 
        Education, officials responsible for the administration of the 
        Developmental Disabilities Assistance and Bill of Rights Act 
        (42 U.S.C. 6000 et seq.), and the Interagency Committee on 
        Disability Research established under section 203; and
            ``(iv) after full consideration of the input of individuals 
        with disabilities and the individuals' representatives, 
        organizations representing individuals with disabilities, 
        providers of services furnished under this Act, researchers in 
        the rehabilitation field, and any other persons or entities the 
        Director considers to be appropriate;
        ``(E) specify plans for widespread dissemination of the results 
    of covered activities, in accessible formats, to rehabilitation 
    practitioners, individuals with disabilities, and the individuals' 
    representatives; and
        ``(F) specify plans for widespread dissemination of the results 
    of covered activities that concern individuals with disabilities 
    who are members of minority groups or of populations that are 
    unserved or underserved by programs carried out under this Act.
    ``(i) In order to promote cooperation among Federal departments and 
agencies conducting research programs, the Director shall consult with 
the administrators of such programs, and with the Interagency Committee 
established by section 203, regarding the design of research projects 
conducted by such entities and the results and applications of such 
research.
    ``(j)(1) The Director shall take appropriate actions to provide for 
a comprehensive and coordinated research program under this title. In 
providing such a program, the Director may undertake joint activities 
with other Federal entities engaged in research and with appropriate 
private entities. Any Federal entity proposing to establish any 
research project related to the purposes of this Act shall consult, 
through the Interagency Committee established by section 203, with the 
Director as Chairperson of such Committee and provide the Director with 
sufficient prior opportunity to comment on such project.
    ``(2) Any person responsible for administering any program of the 
National Institutes of Health, the Department of Veterans Affairs, the 
National Science Foundation, the National Aeronautics and Space 
Administration, the Office of Special Education and Rehabilitative 
Services, or of any other Federal entity, shall, through the 
Interagency Committee established by section 203, consult and cooperate 
with the Director in carrying out such program if the program is 
related to the purposes of this title.
    ``(3) The Director shall support, directly or by grant or contract, 
a center associated with an institution of higher education, for 
research and training concerning the delivery of vocational 
rehabilitation services to rural areas.
    ``(k) The Director shall make grants to institutions of higher 
education for the training of rehabilitation researchers, including 
individuals with disabilities, with particular attention to research 
areas that support the implementation and objectives of this Act and 
that improve the effectiveness of services authorized under this Act.


                         ``interagency committee

    ``Sec. 203. (a)(1) In order to promote coordination and cooperation 
among Federal departments and agencies conducting rehabilitation 
research programs, there is established within the Federal Government 
an Interagency Committee on Disability Research (hereinafter in this 
section referred to as the `Committee'), chaired by the Director and 
comprised of such members as the President may designate, including the 
following (or their designees): the Director, the Commissioner of the 
Rehabilitation Services Administration, the Assistant Secretary for 
Special Education and Rehabilitative Services, the Secretary of 
Education, the Secretary of Veterans Affairs, the Director of the 
National Institutes of Health, the Director of the National Institute 
of Mental Health, the Administrator of the National Aeronautics and 
Space Administration, the Secretary of Transportation, the Assistant 
Secretary of the Interior for Indian Affairs, the Director of the 
Indian Health Service, and the Director of the National Science 
Foundation.
    ``(2) The Committee shall meet not less than four times each year.
    ``(b) After receiving input from individuals with disabilities and 
the individuals' representatives, the Committee shall identify, assess, 
and seek to coordinate all Federal programs, activities, and projects, 
and plans for such programs, activities, and projects with respect to 
the conduct of research related to rehabilitation of individuals with 
disabilities.
    ``(c) The Committee shall annually submit to the President and to 
the appropriate committees of the Congress a report making such 
recommendations as the Committee deems appropriate with respect to 
coordination of policy and development of objectives and priorities for 
all Federal programs relating to the conduct of research related to 
rehabilitation of individuals with disabilities.


                 ``research and other covered activities

    ``Sec. 204. (a)(1) To the extent consistent with priorities 
established in the 5-year plan described in section 202(h), the 
Director may make grants to and contracts with States and public or 
private agencies and organizations, including institutions of higher 
education, Indian tribes, and tribal organizations, to pay part of the 
cost of projects for the purpose of planning and conducting research, 
demonstration projects, training, and related activities, the purposes 
of which are to develop methods, procedures, and rehabilitation 
technology, that maximize the full inclusion and integration into 
society, employment, independent living, family support, and economic 
and social self-sufficiency of individuals with disabilities, 
especially individuals with the most significant disabilities, and 
improve the effectiveness of services authorized under this Act.
    ``(2)(A) In carrying out this section, the Director shall emphasize 
projects that support the implementation of titles I, III, V, VI, and 
VII, including projects addressing the needs described in the State 
plans submitted under section 101 or 704 by State agencies.
    ``(B) Such projects, as described in the State plans submitted by 
State agencies, may include--
        ``(i) medical and other scientific, technical, methodological, 
    and other investigations into the nature of disability, methods of 
    analyzing it, and restorative techniques, including basic research 
    where related to rehabilitation techniques or services;
        ``(ii) studies and analysis of industrial, vocational, social, 
    recreational, psychiatric, psychological, economic, and other 
    factors affecting rehabilitation of individuals with disabilities;
        ``(iii) studies and analysis of special problems of individuals 
    who are homebound and individuals who are institutionalized;
        ``(iv) studies, analyses, and demonstrations of architectural 
    and engineering design adapted to meet the special needs of 
    individuals with disabilities;
        ``(v) studies, analyses, and other activities related to 
    supported employment;
        ``(vi) related activities which hold promise of increasing 
    knowledge and improving methods in the rehabilitation of 
    individuals with disabilities and individuals with the most 
    significant disabilities, particularly individuals with 
    disabilities, and individuals with the most significant 
    disabilities, who are members of populations that are unserved or 
    underserved by programs under this Act; and
        ``(vii) studies, analyses, and other activities related to job 
    accommodations, including the use of rehabilitation engineering and 
    assistive technology.
    ``(b)(1) In addition to carrying out projects under subsection (a), 
the Director may make grants under this subsection (referred to in this 
subsection as `research grants') to pay part or all of the cost of the 
research or other specialized covered activities described in 
paragraphs (2) through (18). A research grant made under any of 
paragraphs (2) through (18) may only be used in a manner consistent 
with priorities established in the 5-year plan described in section 
202(h).
    ``(2)(A) Research grants may be used for the establishment and 
support of Rehabilitation Research and Training Centers, for the 
purpose of providing an integrated program of research, which Centers 
shall--
        ``(i) be operated in collaboration with institutions of higher 
    education or providers of rehabilitation services or other 
    appropriate services; and
        ``(ii) serve as centers of national excellence and national or 
    regional resources for providers and individuals with disabilities 
    and the individuals' representatives.
    ``(B) The Centers shall conduct research and training activities 
by--
        ``(i) conducting coordinated and advanced programs of research 
    in rehabilitation targeted toward the production of new knowledge 
    that will improve rehabilitation methodology and service delivery 
    systems, alleviate or stabilize disabling conditions, and promote 
    maximum social and economic independence of individuals with 
    disabilities, especially promoting the ability of the individuals 
    to prepare for, secure, retain, regain, or advance in employment;
        ``(ii) providing training (including graduate, pre-service, and 
    in-service training) to assist individuals to more effectively 
    provide rehabilitation services;
        ``(iii) providing training (including graduate, pre-service, 
    and in-service training) for rehabilitation research personnel and 
    other rehabilitation personnel; and
        ``(iv) serving as an informational and technical assistance 
    resource to providers, individuals with disabilities, and the 
    individuals' representatives, through conferences, workshops, 
    public education programs, in-service training programs, and 
    similar activities.
    ``(C) The research to be carried out at each such Center may 
include--
        ``(i) basic or applied medical rehabilitation research;
        ``(ii) research regarding the psychological and social aspects 
    of rehabilitation, including disability policy;
        ``(iii) research related to vocational rehabilitation;
        ``(iv) continuation of research that promotes the emotional, 
    social, educational, and functional growth of children who are 
    individuals with disabilities;
        ``(v) continuation of research to develop and evaluate 
    interventions, policies, and services that support families of 
    those children and adults who are individuals with disabilities; 
    and
        ``(vi) continuation of research that will improve services and 
    policies that foster the productivity, independence, and social 
    integration of individuals with disabilities, and enable 
    individuals with disabilities, including individuals with mental 
    retardation and other developmental disabilities, to live in their 
    communities.
    ``(D) Training of students preparing to be rehabilitation personnel 
shall be an important priority for such a Center.
    ``(E) The Director shall make grants under this paragraph to 
establish and support both comprehensive centers dealing with multiple 
disabilities and centers primarily focused on particular disabilities.
    ``(F) Grants made under this paragraph may be used to provide funds 
for services rendered by such a Center to individuals with disabilities 
in connection with the research and training activities.
    ``(G) Grants made under this paragraph may be used to provide 
faculty support for teaching--
        ``(i) rehabilitation-related courses of study for credit; and
        ``(ii) other courses offered by the Centers, either directly or 
    through another entity.
    ``(H) The research and training activities conducted by such a 
Center shall be conducted in a manner that is accessible to and usable 
by individuals with disabilities.
    ``(I) The Director shall encourage the Centers to develop practical 
applications for the findings of the research of the Centers.
    ``(J) In awarding grants under this paragraph, the Director shall 
take into consideration the location of any proposed Center and the 
appropriate geographic and regional allocation of such Centers.
    ``(K) To be eligible to receive a grant under this paragraph, each 
such institution or provider described in subparagraph (A) shall--
        ``(i) be of sufficient size, scope, and quality to effectively 
    carry out the activities in an efficient manner consistent with 
    appropriate Federal and State law; and
        ``(ii) demonstrate the ability to carry out the training 
    activities either directly or through another entity that can 
    provide such training.
    ``(L) The Director shall make grants under this paragraph for 
periods of 5 years, except that the Director may make a grant for a 
period of less than 5 years if--
        ``(i) the grant is made to a new recipient; or
        ``(ii) the grant supports new or innovative research.
    ``(M) Grants made under this paragraph shall be made on a 
competitive basis. To be eligible to receive a grant under this 
paragraph, a prospective grant recipient shall submit an application to 
the Director at such time, in such manner, and containing such 
information as the Director may require.
    ``(N) In conducting scientific peer review under section 202(f) of 
an application for the renewal of a grant made under this paragraph, 
the peer review panel shall take into account the past performance of 
the applicant in carrying out the grant and input from individuals with 
disabilities and the individuals' representatives.
    ``(O) An institution or provider that receives a grant under this 
paragraph to establish such a Center may not collect more than 15 
percent of the amount of the grant received by the Center in indirect 
cost charges.
    ``(3)(A) Research grants may be used for the establishment and 
support of Rehabilitation Engineering Research Centers, operated by or 
in collaboration with institutions of higher education or nonprofit 
organizations, to conduct research or demonstration activities, and 
training activities, regarding rehabilitation technology, including 
rehabilitation engineering, assistive technology devices, and assistive 
technology services, for the purposes of enhancing opportunities for 
better meeting the needs of, and addressing the barriers confronted by, 
individuals with disabilities in all aspects of their lives.
    ``(B) In order to carry out the purposes set forth in subparagraph 
(A), such a Center shall carry out the research or demonstration 
activities by--
        ``(i) developing and disseminating innovative methods of 
    applying advanced technology, scientific achievement, and 
    psychological and social knowledge to--
            ``(I) solve rehabilitation problems and remove 
        environmental barriers through planning and conducting 
        research, including cooperative research with public or private 
        agencies and organizations, designed to produce new scientific 
        knowledge, and new or improved methods, equipment, and devices; 
        and
            ``(II) study new or emerging technologies, products, or 
        environments, and the effectiveness and benefits of such 
        technologies, products, or environments;
        ``(ii) demonstrating and disseminating--
            ``(I) innovative models for the delivery, to rural and 
        urban areas, of cost-effective rehabilitation technology 
        services that promote utilization of assistive technology 
        devices; and
            ``(II) other scientific research to assist in meeting the 
        employment and independent living needs of individuals with 
        significant disabilities; or
        ``(iii) conducting research or demonstration activities that 
    facilitate service delivery systems change by demonstrating, 
    evaluating, documenting, and disseminating--
            ``(I) consumer responsive and individual and family-
        centered innovative models for the delivery to both rural and 
        urban areas, of innovative cost-effective rehabilitation 
        technology services that promote utilization of rehabilitation 
        technology; and
            ``(II) other scientific research to assist in meeting the 
        employment and independent living needs of, and addressing the 
        barriers confronted by, individuals with disabilities, 
        including individuals with significant disabilities.
    ``(C) To the extent consistent with the nature and type of research 
or demonstration activities described in subparagraph (B), each Center 
established or supported through a grant made available under this 
paragraph shall--
        ``(i) cooperate with programs established under the Technology-
    Related Assistance for Individuals With Disabilities Act of 1988 
    (29 U.S.C. 2201 et seq.) and other regional and local programs to 
    provide information to individuals with disabilities and the 
    individuals' representatives to--
            ``(I) increase awareness and understanding of how 
        rehabilitation technology can address their needs; and
            ``(II) increase awareness and understanding of the range of 
        options, programs, services, and resources available, including 
        financing options for the technology and services covered by 
        the area of focus of the Center;
        ``(ii) provide training opportunities to individuals, including 
    individuals with disabilities, to become researchers of 
    rehabilitation technology and practitioners of rehabilitation 
    technology in conjunction with institutions of higher education and 
    nonprofit organizations; and
        ``(iii) respond, through research or demonstration activities, 
    to the needs of individuals with all types of disabilities who may 
    benefit from the application of technology within the area of focus 
    of the Center.
    ``(D)(i) In establishing Centers to conduct the research or 
demonstration activities described in subparagraph (B)(iii), the 
Director may establish one Center in each of the following areas of 
focus:
        ``(I) Early childhood services, including early intervention 
    and family support.
        ``(II) Education at the elementary and secondary levels, 
    including transition from school to postschool activities.
        ``(III) Employment, including supported employment, and 
    reasonable accommodations and the reduction of environmental 
    barriers as required by the Americans with Disabilities Act of 1990 
    (42 U.S.C. 12101 et seq.) and title V.
        ``(IV) Independent living, including transition from 
    institutional to community living, maintenance of community living 
    on leaving the workforce, self-help skills, and activities of daily 
    living.
    ``(ii) Each Center conducting the research or demonstration 
activities described in subparagraph (B)(iii) shall have an advisory 
committee, of which the majority of members are individuals with 
disabilities who are users of rehabilitation technology, and the 
individuals' representatives.
    ``(E) Grants made under this paragraph shall be made on a 
competitive basis and shall be for a period of 5 years, except that the 
Director may make a grant for a period of less than 5 years if--
        ``(i) the grant is made to a new recipient; or
        ``(ii) the grant supports new or innovative research.
    ``(F) To be eligible to receive a grant under this paragraph, a 
prospective grant recipient shall submit an application to the Director 
at such time, in such manner, and containing such information as the 
Director may require.
    ``(G) Each Center established or supported through a grant made 
available under this paragraph shall--
        ``(i) cooperate with State agencies and other local, State, 
    regional, and national programs and organizations developing or 
    delivering rehabilitation technology, including State programs 
    funded under the Technology-Related Assistance for Individuals With 
    Disabilities Act of 1988 (29 U.S.C. 2201 et seq.); and
        ``(ii) prepare and submit to the Director as part of an 
    application for continuation of a grant, or as a final report, a 
    report that documents the outcomes of the program of the Center in 
    terms of both short- and long-term impact on the lives of 
    individuals with disabilities, and such other information as may be 
    requested by the Director.
    ``(4)(A) Research grants may be used to conduct a program for 
spinal cord injury research, including conducting such a program by 
making grants to public or private agencies and organizations to pay 
part or all of the costs of special projects and demonstration projects 
for spinal cord injuries, that will--
        ``(i) ensure widespread dissemination of research findings 
    among all Spinal Cord Injury Centers, to rehabilitation 
    practitioners, individuals with spinal cord injury, the 
    individuals' representatives, and organizations receiving financial 
    assistance under this paragraph;
        ``(ii) provide encouragement and support for initiatives and 
    new approaches by individual and institutional investigators; and
        ``(iii) establish and maintain close working relationships with 
    other governmental and voluntary institutions and organizations 
    engaged in similar efforts in order to unify and coordinate 
    scientific efforts, encourage joint planning, and promote the 
    interchange of data and reports among spinal cord injury 
    investigations.
    ``(B) Any agency or organization carrying out a project or 
demonstration project assisted by a grant under this paragraph that 
provides services to individuals with spinal cord injuries shall--
        ``(i) establish, on an appropriate regional basis, a 
    multidisciplinary system of providing vocational and other 
    rehabilitation services, specifically designed to meet the special 
    needs of individuals with spinal cord injuries, including acute 
    care as well as periodic inpatient or outpatient followup and 
    services;
        ``(ii) demonstrate and evaluate the benefits to individuals 
    with spinal cord injuries served in, and the degree of cost-
    effectiveness of, such a regional system;
        ``(iii) demonstrate and evaluate existing, new, and improved 
    methods and rehabilitation technology essential to the care, 
    management, and rehabilitation of individuals with spinal cord 
    injuries; and
        ``(iv) demonstrate and evaluate methods of community outreach 
    for individuals with spinal cord injuries and community education 
    in connection with the problems of such individuals in areas such 
    as housing, transportation, recreation, employment, and community 
    activities.
    ``(C) In awarding grants under this paragraph, the Director shall 
take into account the location of any proposed Spinal Cord Injury 
Center and the appropriate geographic and regional allocation of such 
Centers.
    ``(5) Research grants may be used to conduct a program for end-
stage renal disease research, to include support of projects and 
demonstrations for providing special services (including 
transplantation and dialysis), artificial kidneys, and supplies 
necessary for the rehabilitation of individuals with such disease and 
which will--
        ``(A) ensure dissemination of research findings;
        ``(B) provide encouragement and support for initiatives and new 
    approaches by individuals and institutional investigators; and
        ``(C) establish and maintain close working relationships with 
    other governmental and voluntary institutions and organizations 
    engaged in similar efforts,
in order to unify and coordinate scientific efforts, encourage joint 
planning, and promote the interchange of data and reports among 
investigators in the field of end-stage renal disease. No person shall 
be selected to participate in such program who is eligible for services 
for such disease under any other provision of law.
    ``(6) Research grants may be used to conduct a program for 
international rehabilitation research, demonstration, and training for 
the purpose of developing new knowledge and methods in the 
rehabilitation of individuals with disabilities in the United States, 
cooperating with and assisting in developing and sharing information 
found useful in other nations in the rehabilitation of individuals with 
disabilities, and initiating a program to exchange experts and 
technical assistance in the field of rehabilitation of individuals with 
disabilities with other nations as a means of increasing the levels of 
skill of rehabilitation personnel.
    ``(7) Research grants may be used to conduct a research program 
concerning the use of existing telecommunications systems (including 
telephone, television, satellite, radio, and other similar systems) 
which have the potential for substantially improving service delivery 
methods, and the development of appropriate programming to meet the 
particular needs of individuals with disabilities.
    ``(8) Research grants may be used to conduct a program of joint 
projects with the National Institutes of Health, the National Institute 
of Mental Health, the Health Services Administration, the 
Administration on Aging, the National Science Foundation, the Veterans' 
Administration, the Department of Health and Human Services, the 
National Aeronautics and Space Administration, other Federal agencies, 
and private industry in areas of joint interest involving 
rehabilitation.
    ``(9) Research grants may be used to conduct a program of research 
related to the rehabilitation of children, or older individuals, who 
are individuals with disabilities, including older American Indians who 
are individuals with disabilities. Such research program may include 
projects designed to assist the adjustment of, or maintain as residents 
in the community, older workers who are individuals with disabilities 
on leaving the workforce.
    ``(10) Research grants may be used to conduct a research program to 
develop and demonstrate innovative methods to attract and retain 
professionals to serve in rural areas in the rehabilitation of 
individuals with disabilities, including individuals with significant 
disabilities.
    ``(11) Research grants may be used to conduct a model research and 
demonstration project designed to assess the feasibility of 
establishing a center for producing and distributing to individuals who 
are deaf or hard of hearing captioned video cassettes providing a broad 
range of educational, cultural, scientific, and vocational programming.
    ``(12) Research grants may be used to conduct a model research and 
demonstration program to develop innovative methods of providing 
services for preschool age children who are individuals with 
disabilities, including--
        ``(A) early intervention, assessment, parent counseling, infant 
    stimulation, early identification, diagnosis, and evaluation of 
    children who are individuals with significant disabilities up to 
    the age of five, with a special emphasis on children who are 
    individuals with significant disabilities up to the age of three;
        ``(B) such physical therapy, language development, pediatric, 
    nursing, psychological, and psychiatric services as are necessary 
    for such children; and
        ``(C) appropriate services for the parents of such children, 
    including psychological and psychiatric services, parent 
    counseling, and training.
    ``(13) Research grants may be used to conduct a model research and 
training program under which model training centers shall be 
established to develop and use more advanced and effective methods of 
evaluating and addressing the employment needs of individuals with 
disabilities, including programs that--
        ``(A) provide training and continuing education for personnel 
    involved with the employment of individuals with disabilities;
        ``(B) develop model procedures for testing and evaluating the 
    employment needs of individuals with disabilities;
        ``(C) develop model training programs to teach individuals with 
    disabilities skills which will lead to appropriate employment;
        ``(D) develop new approaches for job placement of individuals 
    with disabilities, including new followup procedures relating to 
    such placement;
        ``(E) provide information services regarding education, 
    training, employment, and job placement for individuals with 
    disabilities; and
        ``(F) develop new approaches and provide information regarding 
    job accommodations, including the use of rehabilitation engineering 
    and assistive technology.
    ``(14) Research grants may be used to conduct a rehabilitation 
research program under which financial assistance is provided in order 
to--
        ``(A) test new concepts and innovative ideas;
        ``(B) demonstrate research results of high potential benefits;
        ``(C) purchase prototype aids and devices for evaluation;
        ``(D) develop unique rehabilitation training curricula; and
        ``(E) be responsive to special initiatives of the Director.
No single grant under this paragraph may exceed $50,000 in any fiscal 
year and all payments made under this paragraph in any fiscal year may 
not exceed 5 percent of the amount available for this section to the 
National Institute on Disability and Rehabilitation Research in any 
fiscal year. Regulations and administrative procedures with respect to 
financial assistance under this paragraph shall, to the maximum extent 
possible, be expedited.
    ``(15) Research grants may be used to conduct studies of the 
rehabilitation needs of American Indian populations and of effective 
mechanisms for the delivery of rehabilitation services to Indians 
residing on and off reservations.
    ``(16) Research grants may be used to conduct a demonstration 
program under which one or more projects national in scope shall be 
established to develop procedures to provide incentives for the 
development, manufacturing, and marketing of orphan technological 
devices, including technology transfer concerning such devices, 
designed to enable individuals with disabilities to achieve 
independence and access to gainful employment.
    ``(17)(A) Research grants may be used to conduct a research program 
related to quality assurance in the area of rehabilitation technology.
    ``(B) Activities carried out under the research program may 
include--
        ``(i) the development of methodologies to evaluate 
    rehabilitation technology products and services and the 
    dissemination of the methodologies to consumers and other 
    interested parties;
        ``(ii) identification of models for service provider training 
    and evaluation and certification of the effectiveness of the 
    models;
        ``(iii) identification and dissemination of outcome measurement 
    models for the assessment of rehabilitation technology products and 
    services; and
        ``(iv) development and testing of research-based tools to 
    enhance consumer decisionmaking about rehabilitation technology 
    products and services.
    ``(18) Research grants may be used to provide for research and 
demonstration projects and related activities that explore the use and 
effectiveness of specific alternative or complementary medical 
practices for individuals with disabilities. Such projects and 
activities may include projects and activities designed to--
        ``(A) determine the use of specific alternative or 
    complementary medical practices among individuals with disabilities 
    and the perceived effectiveness of the practices;
        ``(B) determine the specific information sources, 
    decisionmaking methods, and methods of payment used by individuals 
    with disabilities who access alternative or complementary medical 
    services;
        ``(C) develop criteria to screen and assess the validity of 
    research studies of such practices for individuals with 
    disabilities; and
        ``(D) determine the effectiveness of specific alternative or 
    complementary medical practices that show promise for promoting 
    increased functioning, prevention of secondary disabilities, or 
    other positive outcomes for individuals with certain types of 
    disabilities, by conducting controlled research studies.
    ``(c)(1) In carrying out evaluations of covered activities under 
this section, the Director is authorized to make arrangements for site 
visits to obtain information on the accomplishments of the projects.
    ``(2) The Director shall not make a grant under this section that 
exceeds $500,000 unless the peer review of the grant application has 
included a site visit.


                ``rehabilitation research advisory council

    ``Sec. 205. (a) Establishment.--Subject to the availability of 
appropriations, the Secretary shall establish in the Department of 
Education a Rehabilitation Research Advisory Council (referred to in 
this section as the `Council') composed of 12 members appointed by the 
Secretary.
    ``(b) Duties.--The Council shall advise the Director with respect 
to research priorities and the development and revision of the 5-year 
plan required by section 202(h).
    ``(c) Qualifications.--Members of the Council shall be generally 
representative of the community of rehabilitation professionals, the 
community of rehabilitation researchers, the community of individuals 
with disabilities, and the individuals' representatives. At least one-
half of the members shall be individuals with disabilities or the 
individuals' representatives.
    ``(d) Terms of Appointment.--
        ``(1) Length of term.--Each member of the Council shall serve 
    for a term of up to 3 years, determined by the Secretary, except 
    that--
            ``(A) a member appointed to fill a vacancy occurring prior 
        to the expiration of the term for which a predecessor was 
        appointed, shall be appointed for the remainder of such term; 
        and
            ``(B) the terms of service of the members initially 
        appointed shall be (as specified by the Secretary) for such 
        fewer number of years as will provide for the expiration of 
        terms on a staggered basis.
        ``(2) Number of terms.--No member of the Council may serve more 
    than two consecutive full terms. Members may serve after the 
    expiration of their terms until their successors have taken office.
    ``(e) Vacancies.--Any vacancy occurring in the membership of the 
Council shall be filled in the same manner as the original appointment 
for the position being vacated. The vacancy shall not affect the power 
of the remaining members to execute the duties of the Council.
    ``(f) Payment and Expenses.--
        ``(1) Payment.--Each member of the Council who is not an 
    officer or full-time employee of the Federal Government shall 
    receive a payment of $150 for each day (including travel time) 
    during which the member is engaged in the performance of duties for 
    the Council. All members of the Council who are officers or full-
    time employees of the United States shall serve without 
    compensation in addition to compensation received for their 
    services as officers or employees of the United States.
        ``(2) Travel expenses.--Each member of the Council may receive 
    travel expenses, including per diem in lieu of subsistence, as 
    authorized by section 5703 of title 5, United States Code, for 
    employees serving intermittently in the Government service, for 
    each day the member is engaged in the performance of duties away 
    from the home or regular place of business of the member.
    ``(g) Detail of Federal Employees.--On the request of the Council, 
the Secretary may detail, with or without reimbursement, any of the 
personnel of the Department of Education to the Council to assist the 
Council in carrying out its duties. Any detail shall not interrupt or 
otherwise affect the civil service status or privileges of the Federal 
employee.
    ``(h) Technical Assistance.--On the request of the Council, the 
Secretary shall provide such technical assistance to the Council as the 
Council determines to be necessary to carry out its duties.
    ``(i) Termination.--Section 14 of the Federal Advisory Committee 
Act (5 U.S.C. App.) shall not apply with respect to the Council.''.

SEC. 406. PROFESSIONAL DEVELOPMENT AND SPECIAL PROJECTS AND 
              DEMONSTRATIONS.

    Title III of the Rehabilitation Act of 1973 (29 U.S.C. 770 et seq.) 
is amended to read as follows:

    ``TITLE III--PROFESSIONAL DEVELOPMENT AND SPECIAL PROJECTS AND 
                             DEMONSTRATIONS

``SEC. 301. DECLARATION OF PURPOSE AND COMPETITIVE BASIS OF GRANTS AND 
              CONTRACTS.

    ``(a) Purpose.--It is the purpose of this title to authorize grants 
and contracts to--
        ``(1)(A) provide academic training to ensure that skilled 
    personnel are available to provide rehabilitation services to 
    individuals with disabilities through vocational, medical, social, 
    and psychological rehabilitation programs (including supported 
    employment programs), through economic and business development 
    programs, through independent living services programs, and through 
    client assistance programs; and
        ``(B) provide training to maintain and upgrade basic skills and 
    knowledge of personnel (including personnel specifically trained to 
    deliver services to individuals with disabilities whose employment 
    outcome is self-employment or telecommuting) employed to provide 
    state-of-the-art service delivery and rehabilitation technology 
    services;
        ``(2) conduct special projects and demonstrations that expand 
    and improve the provision of rehabilitation and other services 
    (including those services provided through community rehabilitation 
    programs) authorized under this Act, or that otherwise further the 
    purposes of this Act, including related research and evaluation;
        ``(3) provide vocational rehabilitation services to individuals 
    with disabilities who are migrant or seasonal farmworkers;
        ``(4) initiate recreational programs to provide recreational 
    activities and related experiences for individuals with 
    disabilities to aid such individuals in employment, mobility, 
    socialization, independence, and community integration; and
        ``(5) provide training and information to individuals with 
    disabilities and the individuals' representatives, and other 
    appropriate parties to develop the skills necessary for individuals 
    with disabilities to gain access to the rehabilitation system and 
    statewide workforce investment systems and to become active 
    decisionmakers in the rehabilitation process.
    ``(b) Competitive Basis of Grants and Contracts.--The Secretary 
shall ensure that all grants and contracts are awarded under this title 
on a competitive basis.

``SEC. 302. TRAINING.

    ``(a) Grants and Contracts for Personnel Training.--
        ``(1) Authority.--The Commissioner shall make grants to, and 
    enter into contracts with, States and public or nonprofit agencies 
    and organizations (including institutions of higher education) to 
    pay part of the cost of projects to provide training, traineeships, 
    and related activities, including the provision of technical 
    assistance, that are designed to assist in increasing the numbers 
    of, and upgrading the skills of, qualified personnel (especially 
    rehabilitation counselors) who are trained in providing vocational, 
    medical, social, and psychological rehabilitation services, who are 
    trained to assist individuals with communication and related 
    disorders, who are trained to provide other services provided under 
    this Act, to individuals with disabilities, and who may include--
            ``(A) personnel specifically trained in providing 
        employment assistance to individuals with disabilities through 
        job development and job placement services;
            ``(B) personnel specifically trained to identify, assess, 
        and meet the individual rehabilitation needs of individuals 
        with disabilities, including needs for rehabilitation 
        technology;
            ``(C) personnel specifically trained to deliver services to 
        individuals who may benefit from receiving independent living 
        services;
            ``(D) personnel specifically trained to deliver services in 
        the client assistance programs;
            ``(E) personnel specifically trained to deliver services, 
        through supported employment programs, to individuals with a 
        most significant disability; and
            ``(F) personnel specifically trained to deliver services to 
        individuals with disabilities pursuing self-employment, 
        business ownership, and telecommuting; and
            ``(G) personnel trained in performing other functions 
        necessary to the provision of vocational, medical, social, and 
        psychological rehabilitation services, and other services 
        provided under this Act.
        ``(2) Authority to provide scholarships.--Grants and contracts 
    under paragraph (1) may be expended for scholarships and may 
    include necessary stipends and allowances.
        ``(3) Related federal statutes.--In carrying out this 
    subsection, the Commissioner may make grants to and enter into 
    contracts with States and public or nonprofit agencies and 
    organizations, including institutions of higher education, to 
    furnish training regarding provisions of Federal statutes, 
    including section 504, title I of the Americans with Disabilities 
    Act of 1990 (42 U.S.C. 12111 et seq.), and the provisions of titles 
    II and XVI of the Social Security Act (42 U.S.C. 401 et seq. and 
    1381 et seq.), that are related to work incentives for individuals 
    with disabilities.
        ``(4) Training for statewide workforce systems personnel.--The 
    Commissioner may make grants to and enter into contracts under this 
    subsection with States and public or nonprofit agencies and 
    organizations, including institutions of higher education, to 
    furnish training to personnel providing services to individuals 
    with disabilities under title I of the Workforce Investment Act of 
    1998. Under this paragraph, personnel may be trained--
            ``(A) in evaluative skills to determine whether an 
        individual with a disability may be served by the State 
        vocational rehabilitation program or another component of a 
        statewide workforce investment system; or
            ``(B) to assist individuals with disabilities seeking 
        assistance through one-stop delivery systems described in 
        section 134(c) of the Workforce Investment Act of 1998.
        ``(5) Joint funding.--Training and other activities provided 
    under paragraph (4) for personnel may be jointly funded with the 
    Department of Labor, using funds made available under title I of 
    the Workforce Investment Act of 1998.
    ``(b) Grants and Contracts for Academic Degrees and Academic 
Certificate Granting Training Projects.--
        ``(1) Authority.--
            ``(A) In general.--The Commissioner may make grants to, and 
        enter into contracts with, States and public or nonprofit 
        agencies and organizations (including institutions of higher 
        education) to pay part of the costs of academic training 
        projects to provide training that leads to an academic degree 
        or academic certificate. In making such grants or entering into 
        such contracts, the Commissioner shall target funds to areas 
        determined under subsection (e) to have shortages of qualified 
        personnel.
            ``(B) Types of projects.--Academic training projects 
        described in this subsection may include--
                ``(i) projects to train personnel in the areas of 
            assisting and supporting individuals with disabilities 
            pursuing self-employment, business ownership, and 
            telecommuting, and of vocational rehabilitation counseling, 
            rehabilitation technology, rehabilitation medicine, 
            rehabilitation nursing, rehabilitation social work, 
            rehabilitation psychiatry, rehabilitation psychology, 
            rehabilitation dentistry, physical therapy, occupational 
            therapy, speech pathology and audiology, physical 
            education, therapeutic recreation, community rehabilitation 
            programs, or prosthetics and orthotics;
                ``(ii) projects to train personnel to provide--

                    ``(I) services to individuals with specific 
                disabilities or individuals with disabilities who have 
                specific impediments to rehabilitation, including 
                individuals who are members of populations that are 
                unserved or underserved by programs under this Act;
                    ``(II) job development and job placement services 
                to individuals with disabilities;
                    ``(III) supported employment services, including 
                services of employment specialists for individuals with 
                disabilities;
                    ``(IV) specialized services for individuals with 
                significant disabilities; or
                    ``(V) recreation for individuals with disabilities;

                ``(iii) projects to train personnel in other fields 
            contributing to the rehabilitation of individuals with 
            disabilities; and
                ``(iv) projects to train personnel in the use, 
            applications, and benefits of rehabilitation technology.
        ``(2) Application.--No grant shall be awarded or contract 
    entered into under this subsection unless the applicant has 
    submitted to the Commissioner an application at such time, in such 
    form, in accordance with such procedures, and including such 
    information as the Secretary may require, including--
            ``(A) a description of how the designated State unit or 
        units will participate in the project to be funded under the 
        grant or contract, including, as appropriate, participation on 
        advisory committees, as practicum sites, in curriculum 
        development, and in other ways so as to build closer 
        relationships between the applicant and the designated State 
        unit and to encourage students to pursue careers in public 
        vocational rehabilitation programs;
            ``(B) the identification of potential employers that 
        provide employment that meets the requirements of paragraph 
        (5)(A)(i); and
            ``(C) an assurance that data on the employment of graduates 
        or trainees who participate in the project is accurate.
        ``(3) Limitation.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        no grant or contract under this subsection may be used to 
        provide any one course of study to an individual for a period 
        of more than 4 years.
            ``(B) Exception.--If a grant or contract recipient under 
        this subsection determines that an individual has a disability 
        which seriously affects the completion of training under this 
        subsection, the grant or contract recipient may extend the 
        period referred to in subparagraph (A).
        ``(4) Authority to provide scholarships.--Grants and contracts 
    under paragraph (1) may be expanded to provide services that 
    include the provision of scholarships and necessary stipends and 
    allowances.
        ``(5) Agreements.--
            ``(A) Contents.--A recipient of a grant or contract under 
        this subsection shall provide assurances to the Commissioner 
        that each individual who receives a scholarship, for any 
        academic year beginning after June 1, 1992, utilizing funds 
        provided under such grant or contract shall enter into an 
        agreement with the recipient under which the individual shall--
                ``(i) maintain employment--

                    ``(I) in a nonprofit rehabilitation agency or 
                related agency or in a State rehabilitation agency or 
                related agency, including a professional corporation or 
                professional practice group through which the 
                individual has a service arrangement with the 
                designated State agency;
                    ``(II) on a full- or part-time basis; and
                    ``(III) for a period of not less than the full-time 
                equivalent of 2 years for each year for which 
                assistance under this section was received by the 
                individual,

            within a period, beginning after the recipient completes 
            the training for which the scholarship was awarded, of not 
            more than the sum of the number of years in the period 
            described in subclause (III) and 2 additional years; and
                ``(ii) repay all or part of any scholarship received, 
            plus interest, if the individual does not fulfill the 
            requirements of clause (i),
        except as the Commissioner by regulation may provide for 
        repayment exceptions and deferrals.
            ``(B) Enforcement.--The Commissioner shall be responsible 
        for the enforcement of each agreement entered into under 
        subparagraph (A) upon completion of the training involved under 
        such subparagraph.
    ``(c) Grants to Historically Black Colleges and Universities.--The 
Commissioner, in carrying out this section, shall make grants to 
historically Black colleges and universities and other institutions of 
higher education whose minority student enrollment is at least 50 
percent of the total enrollment of the institution.
    ``(d) Application.--A grant may not be awarded to a State or other 
organization under this section unless the State or organization has 
submitted an application to the Commissioner at such time, in such 
form, in accordance with such procedures, and containing such 
information as the Commissioner may require. Any such application shall 
include a detailed description of strategies that will be utilized to 
recruit and train individuals so as to reflect the diverse populations 
of the United States as part of the effort to increase the number of 
individuals with disabilities, and individuals who are from 
linguistically and culturally diverse backgrounds, who are available to 
provide rehabilitation services.
    ``(e) Evaluation and Collection of Data.--The Commissioner shall 
evaluate the impact of the training programs conducted under this 
section, and collect information on the training needs of, and data on 
shortages of qualified personnel necessary to provide services to 
individuals with disabilities. The Commissioner shall prepare and 
submit to Congress, by September 30 of each fiscal year, a report 
setting forth and justifying in detail how the funds made available for 
training under this section for the fiscal year prior to such 
submission are allocated by professional discipline and other program 
areas. The report shall also contain findings on such personnel 
shortages, how funds proposed for the succeeding fiscal year will be 
allocated under the President's budget proposal, and how the findings 
on personnel shortages justify the allocations.
    ``(f) Grants for the Training of Interpreters.--
        ``(1) Authority.--
            ``(A) In general.--For the purpose of training a sufficient 
        number of qualified interpreters to meet the communications 
        needs of individuals who are deaf or hard of hearing, and 
        individuals who are deaf-blind, the Commissioner, acting 
        through a Federal office responsible for deafness and 
        communicative disorders, may award grants to public or private 
        nonprofit agencies or organizations to pay part of the costs--
                ``(i) for the establishment of interpreter training 
            programs; or
                ``(ii) to enable such agencies or organizations to 
            provide financial assistance for ongoing interpreter 
            training programs.
            ``(B) Geographic areas.--The Commissioner shall award 
        grants under this subsection for programs in geographic areas 
        throughout the United States that the Commissioner considers 
        appropriate to best carry out the objectives of this section.
            ``(C) Priority.--In awarding grants under this subsection, 
        the Commissioner shall give priority to public or private 
        nonprofit agencies or organizations with existing programs that 
        have a demonstrated capacity for providing interpreter training 
        services.
            ``(D) Funding.--The Commissioner may award grants under 
        this subsection through the use of--
                ``(i) amounts appropriated to carry out this section; 
            or
                ``(ii) pursuant to an agreement with the Director of 
            the Office of the Special Education Program (established 
            under section 603 of the Individuals with Disabilities 
            Education Act (as amended by section 101 of the Individuals 
            with Disabilities Education Act Amendments of 1997 (Public 
            Law 105-17))), amounts appropriated under section 686 of 
            the Individuals with Disabilities Education Act.
        ``(2) Application.--A grant may not be awarded to an agency or 
    organization under paragraph (1) unless the agency or organization 
    has submitted an application to the Commissioner at such time, in 
    such form, in accordance with such procedures, and containing such 
    information as the Commissioner may require, including--
            ``(A) a description of the manner in which an interpreter 
        training program will be developed and operated during the 5-
        year period following the date on which a grant is received by 
        the applicant under this subsection;
            ``(B) a demonstration of the applicant's capacity or 
        potential for providing training for interpreters for 
        individuals who are deaf or hard of hearing, and individuals 
        who are deaf-blind;
            ``(C) assurances that any interpreter trained or retrained 
        under a program funded under the grant will meet such minimum 
        standards of competency as the Commissioner may establish for 
        purposes of this subsection; and
            ``(D) such other information as the Commissioner may 
        require.
    ``(g) Technical Assistance and In-Service Training.--
        ``(1) Technical assistance.--The Commissioner is authorized to 
    provide technical assistance to State designated agencies and 
    community rehabilitation programs, directly or through contracts 
    with State designated agencies or nonprofit organizations.
        ``(2) Compensation.--An expert or consultant appointed or 
    serving under contract pursuant to this section shall be 
    compensated at a rate, subject to approval of the Commissioner, 
    that shall not exceed the daily equivalent of the rate of pay for 
    level 4 of the Senior Executive Service Schedule under section 5382 
    of title 5, United States Code. Such an expert or consultant may be 
    allowed travel and transportation expenses in accordance with 
    section 5703 of title 5, United States Code.
        ``(3) In-service training of rehabilitation personnel.--
            ``(A) Projects.--Subject to subparagraph (B), at least 15 
        percent of the sums appropriated to carry out this section 
        shall be allocated to designated State agencies to be used, 
        directly or indirectly, for projects for in-service training 
        for rehabilitation personnel, consistent with the needs 
        identified through the comprehensive system for personnel 
        development required by section 101(a)(7), including projects 
        designed--
                ``(i) to address recruitment and retention of qualified 
            rehabilitation professionals;
                ``(ii) to provide for succession planning;
                ``(iii) to provide for leadership development and 
            capacity building; and
                ``(iv) for fiscal years 1999 and 2000, to provide 
            training regarding the Workforce Investment Act of 1998 and 
            the amendments to this Act made by the Rehabilitation Act 
            Amendments of 1998.
            ``(B) Limitation.--If the allocation to designated State 
        agencies required by subparagraph (A) would result in a lower 
        level of funding for projects being carried out on the date of 
        enactment of the Rehabilitation Act Amendments of 1998 by other 
        recipients of funds under this section, the Commissioner may 
        allocate less than 15 percent of the sums described in 
        subparagraph (A) to designated State agencies for such in-
        service training.
    ``(h) Provision of Information.--The Commissioner, subject to the 
provisions of section 306, may require that recipients of grants or 
contracts under this section provide information, including data, with 
regard to the impact of activities funded under this section.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of the fiscal years 1999 through 2003.

``SEC. 303. DEMONSTRATION AND TRAINING PROGRAMS.

    ``(a) Demonstration Projects To Increase Client Choice.--
        ``(1) Grants.--The Commissioner may make grants to States and 
    public or nonprofit agencies and organizations to pay all or part 
    of the costs of projects to demonstrate ways to increase client 
    choice in the rehabilitation process, including the selection of 
    providers of vocational rehabilitation services.
        ``(2) Use of funds.--An entity that receives a grant under this 
    subsection shall use the grant only--
            ``(A) for activities that are directly related to planning, 
        operating, and evaluating the demonstration projects; and
            ``(B) to supplement, and not supplant, funds made available 
        from Federal and non-Federal sources for such projects.
        ``(3) Application.--Any eligible entity that desires to receive 
    a grant under this subsection shall submit an application at such 
    time, in such manner, and containing such information and 
    assurances as the Commissioner may require, including--
            ``(A) a description of--
                ``(i) how the entity intends to promote increased 
            client choice in the rehabilitation process, including a 
            description, if appropriate, of how an applicant will 
            determine the cost of any service or product offered to an 
            eligible client;
                ``(ii) how the entity intends to ensure that any 
            vocational rehabilitation service or related service is 
            provided by a qualified provider who is accredited or meets 
            such other quality assurance and cost-control criteria as 
            the State may establish; and
                ``(iii) the outreach activities to be conducted by the 
            applicant to obtain eligible clients; and
            ``(B) assurances that a written plan will be established 
        with the full participation of the client, which plan shall, at 
        a minimum, include--
                ``(i) a statement of the vocational rehabilitation 
            goals to be achieved;
                ``(ii) a statement of the specific vocational 
            rehabilitation services to be provided, the projected dates 
            for their initiation, and the anticipated duration of each 
            such service; and
                ``(iii) objective criteria, an evaluation procedure, 
            and a schedule, for determining whether such goals are 
            being achieved.
        ``(4) Award of grants.--In selecting entities to receive grants 
    under paragraph (1), the Commissioner shall take into 
    consideration--
            ``(A) the diversity of strategies used to increase client 
        choice, including selection among qualified service providers;
            ``(B) the geographic distribution of projects; and
            ``(C) the diversity of clients to be served.
        ``(5) Records.--Entities that receive grants under paragraph 
    (1) shall maintain such records as the Commissioner may require and 
    comply with any request from the Commissioner for such records.
        ``(6) Direct services.--At least 80 percent of the funds 
    awarded for any project under this subsection shall be used for 
    direct services, as specifically chosen by eligible clients.
        ``(7) Evaluation.--The Commissioner may conduct an evaluation 
    of the demonstration projects with respect to the services 
    provided, clients served, client outcomes obtained, implementation 
    issues addressed, the cost-effectiveness of the project, and the 
    effects of increased choice on clients and service providers. The 
    Commissioner may reserve funds for the evaluation for a fiscal year 
    from the amounts appropriated to carry out projects under this 
    section for the fiscal year.
        ``(8) Definitions.--For the purposes of this subsection:
            ``(A) Direct services.--The term `direct services' means 
        vocational rehabilitation services, as described in section 
        103(a).
            ``(B) Eligible client.--The term `eligible client' means an 
        individual with a disability, as defined in section 7(20)(A), 
        who is not currently receiving services under an individualized 
        plan for employment established through a designated State 
        unit.
    ``(b) Special Demonstration Programs.--
        ``(1) Grants; contracts.--The Commissioner, subject to the 
    provisions of section 306, may provide grants to, or enter into 
    contracts with, eligible entities to pay all or part of the cost of 
    programs that expand and improve the provision of rehabilitation 
    and other services authorized under this Act or that further the 
    purposes of the Act, including related research and evaluation 
    activities.
        ``(2) Eligible entities; terms and conditions.--
            ``(A) Eligible entities.--To be eligible to receive a 
        grant, or enter into a contract, under paragraph (1), an entity 
        shall be a State vocational rehabilitation agency, community 
        rehabilitation program, Indian tribe or tribal organization, or 
        other public or nonprofit agency or organization, or as the 
        Commissioner determines appropriate, a for-profit organization. 
        The Commissioner may limit competitions to one or more types of 
        organizations described in this subparagraph.
            ``(B) Terms and conditions.--A grant or contract under 
        paragraph (1) shall contain such terms and conditions as the 
        Commissioner may require.
        ``(3) Application.--An eligible entity that desires to receive 
    a grant, or enter into a contract, under paragraph (1) shall submit 
    an application to the Secretary at such time, in such form, and 
    containing such information and assurances as the Commissioner may 
    require, including, if the Commissioner determines appropriate, a 
    description of how the proposed project or demonstration program--
            ``(A) is based on current research findings, which may 
        include research conducted by the National Institute on 
        Disability and Rehabilitation Research, the National Institutes 
        of Health, and other public or private organizations; and
            ``(B) is of national significance.
        ``(4) Types of projects.--The programs that may be funded under 
    this subsection may include--
            ``(A) special projects and demonstrations of service 
        delivery;
            ``(B) model demonstration projects;
            ``(C) technical assistance projects;
            ``(D) systems change projects;
            ``(E) special studies and evaluations; and
            ``(F) dissemination and utilization activities.
        ``(5) Priority for competitions.--
            ``(A) In general.--In announcing competitions for grants 
        and contracts under this subsection, the Commissioner shall 
        give priority consideration to--
                ``(i) special projects and demonstration programs of 
            service delivery for adults who are either low-functioning 
            and deaf or low-functioning and hard of hearing;
                ``(ii) supported employment, including community-based 
            supported employment programs to meet the needs of 
            individuals with the most significant disabilities or to 
            provide technical assistance to States and community 
            organizations to improve and expand the provision of 
            supported employment services; and
                ``(iii) model transitional planning services for youths 
            with disabilities.
            ``(B) Additional competitions.--In announcing competitions 
        for grants and contracts under this subsection, the 
        Commissioner may require that applicants address one or more of 
        the following:
                ``(i) Age ranges.
                ``(ii) Types of disabilities.
                ``(iii) Types of services.
                ``(iv) Models of service delivery.
                ``(v) Stage of the rehabilitation process.
                ``(vi) The needs of underserved populations, unserved 
            and underserved areas, individuals with significant 
            disabilities, low-incidence disability population or 
            individuals residing in federally designated empowerment 
            zones and enterprise communities.
                ``(vii) Expansion of employment opportunities for 
            individuals with disabilities.
                ``(viii) Systems change projects to promote meaningful 
            access of individuals with disabilities to employment-
            related services under title I of the Workforce Investment 
            Act of 1998 and under other Federal laws.
                ``(ix) Innovative methods of promoting achievement of 
            high-quality employment outcomes.
                ``(x) The demonstration of the effectiveness of early 
            intervention activities in improving employment outcomes.
                ``(xi) Alternative methods of providing affordable 
            transportation services to individuals with disabilities 
            who are employed, seeking employment, or receiving 
            vocational rehabilitation services from public or private 
            organizations and who reside in geographic areas in which 
            public transportation or paratransit service is not 
            available.
        ``(6) Use of funds for continuation awards.--The Commissioner 
    may use funds made available to carry out this section for 
    continuation awards for projects that were funded under sections 12 
    and 311 (as such sections were in effect on the day before the date 
    of the enactment of the Rehabilitation Act Amendments of 1998).
    ``(c) Parent Information and Training Program.--
        ``(1) Grants.--The Commissioner is authorized to make grants to 
    private nonprofit organizations for the purpose of establishing 
    programs to provide training and information to enable individuals 
    with disabilities, and the parents, family members, guardians, 
    advocates, or other authorized representatives of the individuals 
    to participate more effectively with professionals in meeting the 
    vocational, independent living, and rehabilitation needs of 
    individuals with disabilities. Such grants shall be designed to 
    meet the unique training and information needs of the individuals 
    described in the preceding sentence, who live in the area to be 
    served, particularly those who are members of populations that have 
    been unserved or underserved by programs under this Act.
        ``(2) Use of grants.--An organization that receives a grant to 
    establish training and information programs under this subsection 
    shall use the grant to assist individuals with disabilities, and 
    the parents, family members, guardians, advocates, or authorized 
    representatives of the individuals--
            ``(A) to better understand vocational rehabilitation and 
        independent living programs and services;
            ``(B) to provide followup support for transition and 
        employment programs;
            ``(C) to communicate more effectively with transition and 
        rehabilitation personnel and other relevant professionals;
            ``(D) to provide support in the development of the 
        individualized plan for employment;
            ``(E) to provide support and expertise in obtaining 
        information about rehabilitation and independent living 
        programs, services, and resources that are appropriate; and
            ``(F) to understand the provisions of this Act, 
        particularly provisions relating to employment, supported 
        employment, and independent living.
        ``(3) Award of grants.--The Commissioner shall ensure that 
    grants under this subsection--
            ``(A) shall be distributed geographically to the greatest 
        extent possible throughout all States; and
            ``(B) shall be targeted to individuals with disabilities, 
        and the parents, family members, guardians, advocates, or 
        authorized representatives of the individuals, in both urban 
        and rural areas or on a State or regional basis.
        ``(4) Eligible organizations.--In order to receive a grant 
    under this subsection, an organization--
            ``(A) shall submit an application to the Commissioner at 
        such time, in such manner, and containing such information as 
        the Commissioner may require, including information 
        demonstrating the capacity and expertise of the organization--
                ``(i) to coordinate training and information activities 
            with Centers for Independent Living;
                ``(ii) to coordinate and work closely with parent 
            training and information centers established pursuant to 
            section 682(a) of the Individuals with Disabilities 
            Education Act (as added by section 101 of the Individuals 
            with Disabilities Education Act Amendments of 1997; Public 
            Law 105-17); and
                ``(iii) to effectively conduct the training and 
            information activities authorized under this subsection;
            ``(B)(i) shall be governed by a board of directors--
                ``(I) that includes professionals in the field of 
            vocational rehabilitation; and
                ``(II) on which a majority of the members are 
            individuals with disabilities or the parents, family 
            members, guardians, advocates, or authorized 
            representatives of the individuals; or
            ``(ii)(I) shall have a membership that represents the 
        interests of individuals with disabilities; and
            ``(II) shall establish a special governing committee that 
        meets the requirements specified in subclauses (I) and (II) of 
        clause (i) to operate a training and information program under 
        this subsection; and
            ``(C) shall serve individuals with a full range of 
        disabilities, and the parents, family members, guardians, 
        advocates, or authorized representatives of the individuals.
        ``(5) Consultation.--Each organization carrying out a program 
    receiving assistance under this subsection shall consult with 
    appropriate agencies that serve or assist individuals with 
    disabilities, and the parents, family members, guardians, 
    advocates, or authorized representatives of the individuals, 
    located in the jurisdiction served by the program.
        ``(6) Coordination.--The Commissioner shall provide 
    coordination and technical assistance by grant or cooperative 
    agreement for establishing, developing, and coordinating the 
    training and information programs. To the extent practicable, such 
    assistance shall be provided by the parent training and information 
    centers established pursuant to section 682(a) of the Individuals 
    with Disabilities Education Act (as added by section 101 of the 
    Individuals with Disabilities Education Act Amendments of 1997; 
    Public Law 105-17).
        ``(7) Review.--
            ``(A) Quarterly review.--The board of directors or special 
        governing committee of an organization receiving a grant under 
        this subsection shall meet at least once in each calendar 
        quarter to review the training and information program, and 
        each such committee shall directly advise the governing board 
        regarding the views and recommendations of the committee.
            ``(B) Review for grant renewal.--If a nonprofit private 
        organization requests the renewal of a grant under this 
        subsection, the board of directors or the special governing 
        committee shall prepare and submit to the Commissioner a 
        written review of the training and information program 
        conducted by the organization during the preceding fiscal year.
    ``(d) Braille Training Programs.--
        ``(1) Establishment.--The Commissioner shall make grants to, 
    and enter into contracts with, States and public or nonprofit 
    agencies and organizations, including institutions of higher 
    education, to pay all or part of the cost of training in the use of 
    braille for personnel providing vocational rehabilitation services 
    or educational services to youth and adults who are blind.
        ``(2) Projects.--Such grants shall be used for the 
    establishment or continuation of projects that may provide--
            ``(A) development of braille training materials;
            ``(B) in-service or pre-service training in the use of 
        braille, the importance of braille literacy, and methods of 
        teaching braille to youth and adults who are blind; and
            ``(C) activities to promote knowledge and use of braille 
        and nonvisual access technology for blind youth and adults 
        through a program of training, demonstration, and evaluation 
        conducted with leadership of experienced blind individuals, 
        including the use of comprehensive, state-of-the-art 
        technology.
        ``(3) Application.--To be eligible to receive a grant, or enter 
    into a contract, under paragraph (1), an agency or organization 
    shall submit an application to the Commissioner at such time, in 
    such manner, and containing such information as the Commissioner 
    may require.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of the fiscal years 1999 through 2003.

``SEC. 304. MIGRANT AND SEASONAL FARMWORKERS.

    ``(a) Grants.--
        ``(1) Authority.--The Commissioner, subject to the provisions 
    of section 306, may make grants to eligible entities to pay up to 
    90 percent of the cost of projects or demonstration programs for 
    the provision of vocational rehabilitation services to individuals 
    with disabilities who are migrant or seasonal farmworkers, as 
    determined in accordance with rules prescribed by the Secretary of 
    Labor, and to the family members who are residing with such 
    individuals (whether or not such family members are individuals 
    with disabilities).
        ``(2) Eligible entities.--To be eligible to receive a grant 
    under paragraph (1), an entity shall be--
            ``(A) a State designated agency;
            ``(B) a nonprofit agency working in collaboration with a 
        State agency described in subparagraph (A); or
            ``(C) a local agency working in collaboration with a State 
        agency described in subparagraph (A).
        ``(3) Maintenance and transportation.--
            ``(A) In general.--Amounts provided under a grant under 
        this section may be used to provide for the maintenance of and 
        transportation for individuals and family members described in 
        paragraph (1) as necessary for the rehabilitation of such 
        individuals.
            ``(B) Requirement.--Maintenance payments under this 
        paragraph shall be provided in a manner consistent with any 
        maintenance payments provided to other individuals with 
        disabilities in the State under this Act.
        ``(4) Assurance of cooperation.--To be eligible to receive a 
    grant under this section an entity shall provide assurances 
    (satisfactory to the Commissioner) that in the provision of 
    services under the grant there will be appropriate cooperation 
    between the grantee and other public or nonprofit agencies and 
    organizations having special skills and experience in the provision 
    of services to migrant or seasonal farmworkers or their families.
        ``(5) Coordination with other programs.--The Commissioner shall 
    administer this section in coordination with other programs serving 
    migrant and seasonal farmworkers, including programs under title I 
    of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
    6301 et seq.), section 330 of the Public Health Service Act (42 
    U.S.C. 254b), the Migrant and Seasonal Agricultural Worker 
    Protection Act (29 U.S.C. 1801 et seq.), and the Workforce 
    Investment Act of 1998.
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section, 
for each of the fiscal years 1999 through 2003.

``SEC. 305. RECREATIONAL PROGRAMS.

    ``(a) Grants.--
        ``(1) Authority.--
            ``(A) In general.--The Commissioner, subject to the 
        provisions of section 306, shall make grants to States, public 
        agencies, and nonprofit private organizations to pay the 
        Federal share of the cost of the establishment and operation of 
        recreation programs to provide individuals with disabilities 
        with recreational activities and related experiences to aid in 
        the employment, mobility, socialization, independence, and 
        community integration of such individuals.
            ``(B) Recreation programs.--The recreation programs that 
        may be funded using assistance provided under a grant under 
        this section may include vocational skills development, leisure 
        education, leisure networking, leisure resource development, 
        physical education and sports, scouting and camping, 4-H 
        activities, construction of facilities for aquatic 
        rehabilitation therapy, music, dancing, handicrafts, art, and 
        homemaking. When possible and appropriate, such programs and 
        activities should be provided in settings with peers who are 
        not individuals with disabilities.
            ``(C) Design of program.--Programs and activities carried 
        out under this section shall be designed to demonstrate ways in 
        which such programs assist in maximizing the independence and 
        integration of individuals with disabilities.
        ``(2) Maximum term of grant.--A grant under this section shall 
    be made for a period of not more than 3 years.
        ``(3) Availability of nongrant resources.--
            ``(A) In general.--A grant may not be made to an applicant 
        under this section unless the applicant provides assurances 
        that, with respect to costs of the recreation program to be 
        carried out under the grant, the applicant, to the maximum 
        extent practicable, will make available non-Federal resources 
        (in cash or in-kind) to pay the non-Federal share of such 
        costs.
            ``(B) Federal share.--The Federal share of the costs of the 
        recreation programs carried out under this section shall be--
                ``(i) with respect to the first year in which 
            assistance is provided under a grant under this section, 
            100 percent;
                ``(ii) with respect to the second year in which 
            assistance is provided under a grant under this section, 75 
            percent; and
                ``(iii) with respect to the third year in which 
            assistance is provided under a grant under this section, 50 
            percent.
        ``(4) Application.--To be eligible to receive a grant under 
    this section, a State, agency, or organization shall submit an 
    application to the Commissioner at such time, in such manner, and 
    containing such information as the Commissioner may require, 
    including a description of--
            ``(A) the manner in which the findings and results of the 
        project to be funded under the grant, particularly information 
        that facilitates the replication of the results of such 
        projects, will be made generally available; and
            ``(B) the manner in which the service program funded under 
        the grant will be continued after Federal assistance ends.
        ``(5) Level of services.--Recreation programs funded under this 
    section shall maintain, at a minimum, the same level of services 
    over a 3-year project period.
        ``(6) Reports by grantees.--
            ``(A) Requirement.--The Commissioner shall require that 
        each recipient of a grant under this section annually prepare 
        and submit to the Commissioner a report concerning the results 
        of the activities funded under the grant.
            ``(B) Limitation.--The Commissioner may not make financial 
        assistance available to a grant recipient for a subsequent year 
        until the Commissioner has received and evaluated the annual 
        report of the recipient under subparagraph (A) for the current 
        year.
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for each of the fiscal years 1999 through 2003.

``SEC. 306. MEASURING OF PROJECT OUTCOMES AND PERFORMANCE.

    ``The Commissioner may require that recipients of grants under this 
title submit information, including data, as determined by the 
Commissioner to be necessary to measure project outcomes and 
performance, including any data needed to comply with the Government 
Performance and Results Act.''.

SEC. 407. NATIONAL COUNCIL ON DISABILITY.

    Title IV of the Rehabilitation Act of 1973 (29 U.S.C. 780 et seq.) 
is amended to read as follows:

               ``TITLE IV--NATIONAL COUNCIL ON DISABILITY


            ``establishment of national council on disability

    ``Sec. 400. (a)(1)(A) There is established within the Federal 
Government a National Council on Disability (hereinafter in this title 
referred to as the `National Council'), which shall be composed of 
fifteen members appointed by the President, by and with the advice and 
consent of the Senate.
    ``(B) The President shall select members of the National Council 
after soliciting recommendations from representatives of--
        ``(i) organizations representing a broad range of individuals 
    with disabilities; and
        ``(ii) organizations interested in individuals with 
    disabilities.
    ``(C) The members of the National Council shall be individuals with 
disabilities, parents or guardians of individuals with disabilities, or 
other individuals who have substantial knowledge or experience relating 
to disability policy or programs. The members of the National Council 
shall be appointed so as to be representative of individuals with 
disabilities, national organizations concerned with individuals with 
disabilities, providers and administrators of services to individuals 
with disabilities, individuals engaged in conducting medical or 
scientific research relating to individuals with disabilities, business 
concerns, and labor organizations. A majority of the members of the 
National Council shall be individuals with disabilities. The members of 
the National Council shall be broadly representative of minority and 
other individuals and groups.
    ``(2) The purpose of the National Council is to promote policies, 
programs, practices, and procedures that--
        ``(A) guarantee equal opportunity for all individuals with 
    disabilities, regardless of the nature or severity of the 
    disability; and
        ``(B) empower individuals with disabilities to achieve economic 
    self-sufficiency, independent living, and inclusion and integration 
    into all aspects of society.
    ``(b)(1) Each member of the National Council shall serve for a term 
of 3 years, except that the terms of service of the members initially 
appointed after the date of enactment of the Rehabilitation, 
Comprehensive Services, and Developmental Disabilities Amendments of 
1978 shall be (as specified by the President) for such fewer number of 
years as will provide for the expiration of terms on a staggered basis.
    ``(2)(A) No member of the National Council may serve more than two 
consecutive full terms beginning on the date of commencement of the 
first full term on the Council. Members may serve after the expiration 
of their terms until their successors have taken office.
    ``(B) As used in this paragraph, the term `full term' means a term 
of 3 years.
    ``(3) Any member appointed to fill a vacancy occurring before the 
expiration of the term for which such member's predecessor was 
appointed shall be appointed only for the remainder of such term.
    ``(c) The President shall designate the Chairperson from among the 
members appointed to the National Council. The National Council shall 
meet at the call of the Chairperson, but not less often than four times 
each year.
    ``(d) Eight members of the National Council shall constitute a 
quorum and any vacancy in the National Council shall not affect its 
power to function.


                       ``duties of national council

    ``Sec. 401. (a) The National Council shall--
        ``(1) provide advice to the Director with respect to the 
    policies and conduct of the National Institute on Disability and 
    Rehabilitation Research, including ways to improve research 
    concerning individuals with disabilities and the methods of 
    collecting and disseminating findings of such research;
        ``(2) provide advice to the Commissioner with respect to the 
    policies of and conduct of the Rehabilitation Services 
    Administration;
        ``(3) advise the President, the Congress, the Commissioner, the 
    appropriate Assistant Secretary of the Department of Education, and 
    the Director of the National Institute on Disability and 
    Rehabilitation Research on the development of the programs to be 
    carried out under this Act;
        ``(4) provide advice regarding priorities for the activities of 
    the Interagency Disability Coordinating Council and review the 
    recommendations of such Council for legislative and administrative 
    changes to ensure that such recommendations are consistent with the 
    purposes of the Council to promote the full integration, 
    independence, and productivity of individuals with disabilities;
        ``(5) review and evaluate on a continuing basis--
            ``(A) policies, programs, practices, and procedures 
        concerning individuals with disabilities conducted or assisted 
        by Federal departments and agencies, including programs 
        established or assisted under this Act or under the 
        Developmental Disabilities Assistance and Bill of Rights Act; 
        and
            ``(B) all statutes and regulations pertaining to Federal 
        programs which assist such individuals with disabilities;
    in order to assess the effectiveness of such policies, programs, 
    practices, procedures, statutes, and regulations in meeting the 
    needs of individuals with disabilities;
        ``(6) assess the extent to which such policies, programs, 
    practices, and procedures facilitate or impede the promotion of the 
    policies set forth in subparagraphs (A) and (B) of section 
    400(a)(2);
        ``(7) gather information about the implementation, 
    effectiveness, and impact of the Americans with Disabilities Act of 
    1990 (42 U.S.C. 12101 et seq.);
        ``(8) make recommendations to the President, the Congress, the 
    Secretary, the Director of the National Institute on Disability and 
    Rehabilitation Research, and other officials of Federal agencies or 
    other Federal entities, respecting ways to better promote the 
    policies set forth in section 400(a)(2);
        ``(9) provide to the Congress on a continuing basis advice, 
    recommendations, legislative proposals, and any additional 
    information that the National Council or the Congress deems 
    appropriate; and
        ``(10) review and evaluate on a continuing basis new and 
    emerging disability policy issues affecting individuals with 
    disabilities at the Federal, State, and local levels, and in the 
    private sector, including the need for and coordination of adult 
    services, access to personal assistance services, school reform 
    efforts and the impact of such efforts on individuals with 
    disabilities, access to health care, and policies that operate as 
    disincentives for the individuals to seek and retain employment.
    ``(b)(1) Not later than October 31, 1998, and annually thereafter, 
the National Council shall prepare and submit to the President and the 
appropriate committees of the Congress a report entitled `National 
Disability Policy: A Progress Report'.
    ``(2) The report shall assess the status of the Nation in achieving 
the policies set forth in section 400(a)(2), with particular focus on 
the new and emerging issues impacting on the lives of individuals with 
disabilities. The report shall present, as appropriate, available data 
on health, housing, employment, insurance, transportation, recreation, 
training, prevention, early intervention, and education. The report 
shall include recommendations for policy change.
    ``(3) In determining the issues to focus on and the findings, 
conclusions, and recommendations to include in the report, the National 
Council shall seek input from the public, particularly individuals with 
disabilities, representatives of organizations representing a broad 
range of individuals with disabilities, and organizations and agencies 
interested in individuals with disabilities.


                ``compensation of national council members

    ``Sec. 402. (a) Members of the National Council shall be entitled 
to receive compensation at a rate equal to the rate of pay for level 4 
of the Senior Executive Service Schedule under section 5382 of title 5, 
United States Code, including travel time, for each day they are 
engaged in the performance of their duties as members of the National 
Council.
    ``(b) Members of the National Council who are full-time officers or 
employees of the United States shall receive no additional pay on 
account of their service on the National Council except for 
compensation for travel expenses as provided under subsection (c) of 
this section.
    ``(c) While away from their homes or regular places of business in 
the performance of services for the National Council, members of the 
National Council shall be allowed travel expenses, including per diem 
in lieu of subsistence, in the same manner as persons employed 
intermittently in the Government service are allowed expenses under 
section 5703 of title 5, United States Code.


                       ``staff of national council

    ``Sec. 403. (a)(1) The Chairperson of the National Council may 
appoint and remove, without regard to the provisions of title 5, United 
States Code, governing appointments, the provisions of chapter 75 of 
such title (relating to adverse actions), the provisions of chapter 77 
of such title (relating to appeals), or the provisions of chapter 51 
and subchapter III of chapter 53 of such title (relating to 
classification and General Schedule pay rates), an Executive Director 
to assist the National Council to carry out its duties. The Executive 
Director shall be appointed from among individuals who are experienced 
in the planning or operation of programs for individuals with 
disabilities.
    ``(2) The Executive Director is authorized to hire technical and 
professional employees to assist the National Council to carry out its 
duties.
    ``(b)(1) The National Council may procure temporary and 
intermittent services to the same extent as is authorized by section 
3109(b) of title 5, United States Code (but at rates for individuals 
not to exceed the daily equivalent of the rate of pay for level 4 of 
the Senior Executive Service Schedule under section 5382 of title 5, 
United States Code).
    ``(2) The National Council may--
        ``(A) accept voluntary and uncompensated services, 
    notwithstanding the provisions of section 1342 of title 31, United 
    States Code;
        ``(B) in the name of the Council, solicit, accept, employ, and 
    dispose of, in furtherance of this Act, any money or property, real 
    or personal, or mixed, tangible or nontangible, received by gift, 
    devise, bequest, or otherwise; and
        ``(C) enter into contracts and cooperative agreements with 
    Federal and State agencies, private firms, institutions, and 
    individuals for the conduct of research and surveys, preparation of 
    reports and other activities necessary to the discharge of the 
    Council's duties and responsibilities.
    ``(3) Not more than 10 per centum of the total amounts available to 
the National Council in each fiscal year may be used for official 
representation and reception.
    ``(c) The Administrator of General Services shall provide to the 
National Council on a reimbursable basis such administrative support 
services as the Council may request.
    ``(d)(1) It shall be the duty of the Secretary of the Treasury to 
invest such portion of the amounts made available under subsection 
(a)(2)(B) as is not, in the Secretary's judgment, required to meet 
current withdrawals. Such investments may be made only in interest-
bearing obligations of the United States or in obligations guaranteed 
as to both principal and interest by the United States.
    ``(2) The amounts described in paragraph (1), and the interest on, 
and the proceeds from the sale or redemption of, the obligations 
described in paragraph (1) shall be available to the National Council 
to carry out this title.


               ``administrative powers of national council

    ``Sec. 404. (a) The National Council may prescribe such bylaws and 
rules as may be necessary to carry out its duties under this title.
    ``(b) The National Council may hold such hearings, sit and act at 
such times and places, take such testimony, and receive such evidence 
as it deems advisable.
    ``(c) The National Council may appoint advisory committees to 
assist the National Council in carrying out its duties. The members 
thereof shall serve without compensation.
    ``(d) The National Council may use the United States mails in the 
same manner and upon the same conditions as other departments and 
agencies of the United States.
    ``(e) The National Council may use, with the consent of the 
agencies represented on the Interagency Disability Coordinating 
Council, and as authorized in title V, such services, personnel, 
information, and facilities as may be needed to carry out its duties 
under this title, with or without reimbursement to such agencies.


                    ``authorization of appropriations

    ``Sec. 405. There are authorized to be appropriated to carry out 
this title such sums as may be necessary for each of the fiscal years 
1999 through 2003.''.

SEC. 408. RIGHTS AND ADVOCACY.

    (a) Conforming Amendments to Rights and Advocacy Provisions.--
        (1) Employment.--Section 501 (29 U.S.C. 791) is amended--
            (A) in the third sentence of subsection (a), by striking 
        ``President's Committees on Employment of the Handicapped'' and 
        inserting ``President's Committees on Employment of People With 
        Disabilities''; and
            (B) in subsection (e), by striking ``individualized written 
        rehabilitation program'' and inserting ``individualized plan 
        for employment''.
        (2) Access board.--Section 502 (29 U.S.C. 792) is amended--
            (A) in subsection (a)(1), in the sentence following 
        subparagraph (B), by striking ``Chairperson'' and inserting 
        ``chairperson'';
            (B) in subsection (b)--
                (i) in paragraph (2), by striking ``guidelines'' and 
            inserting ``information'';
                (ii) by striking paragraph (3) and inserting the 
            following:
        ``(3) establish and maintain--
            ``(A) minimum guidelines and requirements for the standards 
        issued pursuant to the Act commonly known as the Architectural 
        Barriers Act of 1968;
            ``(B) minimum guidelines and requirements for the standards 
        issued pursuant to titles II and III of the Americans with 
        Disabilities Act of 1990;
            ``(C) guidelines for accessibility of telecommunications 
        equipment and customer premises equipment under section 255 of 
        the Telecommunications Act of 1934 (47 U.S.C. 255); and
            ``(D) standards for accessible electronic and information 
        technology under section 508;'';
                (iii) in paragraph (9), by striking ``; and'' and 
            inserting a semicolon;
                (iv) in paragraph (10), by striking the period and 
            inserting ``; and''; and
                (v) by adding at the end the following:
        ``(11) carry out the responsibilities specified for the Access 
    Board in section 508.'';
            (C) in subsection (d)(1), by striking ``procedures under 
        this section'' and inserting ``procedures under this 
        subsection'';
            (D) in subsection (g)(2), by striking ``Committee on 
        Education and Labor'' and inserting ``Committee on Education 
        and the Workforce'';
            (E) in subsection (h)(2)(A), by striking ``paragraphs (5) 
        and (7)'' and inserting ``paragraphs (2) and (4)''; and
            (F) in subsection (i), by striking ``fiscal years 1993 
        through 1997'' and inserting ``fiscal years 1999 through 
        2003''.
        (3) Federal grants and contracts.--Section 504(a) (29 U.S.C. 
    794(a)) is amended in the first sentence by striking ``section 
    7(8)'' and inserting ``section 7(20)''.
        (4) Secretarial responsibilities.--Section 506(a) (29 U.S.C. 
    794b(a)) is amended--
            (A) by striking the second sentence and inserting the 
        following: ``Any concurrence of the Access Board under 
        paragraph (2) shall reflect its consideration of cost studies 
        carried out by States.''; and
            (B) in the second sentence of subsection (c), by striking 
        ``provided under this paragraph'' and inserting ``provided 
        under this subsection''.
    (b) Electronic and Information Technology Regulations.--Section 508 
(29 U.S.C. 794d) is amended to read as follows:

``SEC. 508. ELECTRONIC AND INFORMATION TECHNOLOGY.

    ``(a) Requirements for Federal Departments and Agencies.--
        ``(1) Accessibility.--
            ``(A) Development, procurement, maintenance, or use of 
        electronic and information technology.--When developing, 
        procuring, maintaining, or using electronic and information 
        technology, each Federal department or agency, including the 
        United States Postal Service, shall ensure, unless an undue 
        burden would be imposed on the department or agency, that the 
        electronic and information technology allows, regardless of the 
        type of medium of the technology--
                ``(i) individuals with disabilities who are Federal 
            employees to have access to and use of information and data 
            that is comparable to the access to and use of the 
            information and data by Federal employees who are not 
            individuals with disabilities; and
                ``(ii) individuals with disabilities who are members of 
            the public seeking information or services from a Federal 
            department or agency to have access to and use of 
            information and data that is comparable to the access to 
            and use of the information and data by such members of the 
            public who are not individuals with disabilities.
            ``(B) Alternative means efforts.--When development, 
        procurement, maintenance, or use of electronic and information 
        technology that meets the standards published by the Access 
        Board under paragraph (2) would impose an undue burden, the 
        Federal department or agency shall provide individuals with 
        disabilities covered by paragraph (1) with the information and 
        data involved by an alternative means of access that allows the 
        individual to use the information and data.
        ``(2) Electronic and information technology standards.--
            ``(A) In general.--Not later than 18 months after the date 
        of enactment of the Rehabilitation Act Amendments of 1998, the 
        Architectural and Transportation Barriers Compliance Board 
        (referred to in this section as the `Access Board'), after 
        consultation with the Secretary of Education, the Administrator 
        of General Services, the Secretary of Commerce, the Chairman of 
        the Federal Communications Commission, the Secretary of 
        Defense, and the head of any other Federal department or agency 
        that the Access Board determines to be appropriate, including 
        consultation on relevant research findings, and after 
        consultation with the electronic and information technology 
        industry and appropriate public or nonprofit agencies or 
        organizations, including organizations representing individuals 
        with disabilities, shall issue and publish standards setting 
        forth--
                ``(i) for purposes of this section, a definition of 
            electronic and information technology that is consistent 
            with the definition of information technology specified in 
            section 5002(3) of the Clinger-Cohen Act of 1996 (40 U.S.C. 
            1401(3)); and
                ``(ii) the technical and functional performance 
            criteria necessary to implement the requirements set forth 
            in paragraph (1).
            ``(B) Review and amendment.--The Access Board shall 
        periodically review and, as appropriate, amend the standards 
        required under subparagraph (A) to reflect technological 
        advances or changes in electronic and information technology.
        ``(3) Incorporation of standards.--Not later than 6 months 
    after the Access Board publishes the standards required under 
    paragraph (2), the Federal Acquisition Regulatory Council shall 
    revise the Federal Acquisition Regulation and each Federal 
    department or agency shall revise the Federal procurement policies 
    and directives under the control of the department or agency to 
    incorporate those standards. Not later than 6 months after the 
    Access Board revises any standards required under paragraph (2), 
    the Council shall revise the Federal Acquisition Regulation and 
    each appropriate Federal department or agency shall revise the 
    procurement policies and directives, as necessary, to incorporate 
    the revisions.
        ``(4) Acquisition planning.--In the event that a Federal 
    department or agency determines that compliance with the standards 
    issued by the Access Board under paragraph (2) relating to 
    procurement imposes an undue burden, the documentation by the 
    department or agency supporting the procurement shall explain why 
    compliance creates an undue burden.
        ``(5) Exemption for national security systems.--This section 
    shall not apply to national security systems, as that term is 
    defined in section 5142 of the Clinger-Cohen Act of 1996 (40 U.S.C. 
    1452).
        ``(6) Construction.--
            ``(A) Equipment.--In a case in which the Federal Government 
        provides access to the public to information or data through 
        electronic and information technology, nothing in this section 
        shall be construed to require a Federal department or agency--
                ``(i) to make equipment owned by the Federal Government 
            available for access and use by individuals with 
            disabilities covered by paragraph (1) at a location other 
            than that where the electronic and information technology 
            is provided to the public; or
                ``(ii) to purchase equipment for access and use by 
            individuals with disabilities covered by paragraph (1) at a 
            location other than that where the electronic and 
            information technology is provided to the public.
            ``(B) Software and peripheral devices.--Except as required 
        to comply with standards issued by the Access Board under 
        paragraph (2), nothing in paragraph (1) requires the 
        installation of specific accessibility-related software or the 
        attachment of a specific accessibility-related peripheral 
        device at a workstation of a Federal employee who is not an 
        individual with a disability.
    ``(b) Technical Assistance.--The Administrator of General Services 
and the Access Board shall provide technical assistance to individuals 
and Federal departments and agencies concerning the requirements of 
this section.
    ``(c) Agency Evaluations.--Not later than 6 months after the date 
of enactment of the Rehabilitation Act Amendments of 1998, the head of 
each Federal department or agency shall evaluate the extent to which 
the electronic and information technology of the department or agency 
is accessible to and usable by individuals with disabilities described 
in subsection (a)(1), compared to the access to and use of the 
technology by individuals described in such subsection who are not 
individuals with disabilities, and submit a report containing the 
evaluation to the Attorney General.
    ``(d) Reports.--
        ``(1) Interim report.--Not later than 18 months after the date 
    of enactment of the Rehabilitation Act Amendments of 1998, the 
    Attorney General shall prepare and submit to the President a report 
    containing information on and recommendations regarding the extent 
    to which the electronic and information technology of the Federal 
    Government is accessible to and usable by individuals with 
    disabilities described in subsection (a)(1).
        ``(2) Biennial reports.--Not later than 3 years after the date 
    of enactment of the Rehabilitation Act Amendments of 1998, and 
    every 2 years thereafter, the Attorney General shall prepare and 
    submit to the President and Congress a report containing 
    information on and recommendations regarding the state of Federal 
    department and agency compliance with the requirements of this 
    section, including actions regarding individual complaints under 
    subsection (f).
    ``(e) Cooperation.--Each head of a Federal department or agency 
(including the Access Board, the Equal Employment Opportunity 
Commission, and the General Services Administration) shall provide to 
the Attorney General such information as the Attorney General 
determines is necessary to conduct the evaluations under subsection (c) 
and prepare the reports under subsection (d).
    ``(f) Enforcement.--
        ``(1) General.--
            ``(A) Complaints.--Effective 2 years after the date of 
        enactment of the Rehabilitation Act Amendments of 1998, any 
        individual with a disability may file a complaint alleging that 
        a Federal department or agency fails to comply with subsection 
        (a)(1) in providing electronic and information technology.
            ``(B) Application.--This subsection shall apply only to 
        electronic and information technology that is procured by a 
        Federal department or agency not less than 2 years after the 
        date of enactment of the Rehabilitation Act Amendments of 1998.
        ``(2) Administrative complaints.--Complaints filed under 
    paragraph (1) shall be filed with the Federal department or agency 
    alleged to be in noncompliance. The Federal department or agency 
    receiving the complaint shall apply the complaint procedures 
    established to implement section 504 for resolving allegations of 
    discrimination in a federally conducted program or activity.
        ``(3) Civil actions.--The remedies, procedures, and rights set 
    forth in sections 505(a)(2) and 505(b) shall be the remedies, 
    procedures, and rights available to any individual with a 
    disability filing a complaint under paragraph (1).
    ``(g) Application to Other Federal Laws.--This section shall not be 
construed to limit any right, remedy, or procedure otherwise available 
under any provision of Federal law (including sections 501 through 505) 
that provides greater or equal protection for the rights of individuals 
with disabilities than this section.''.
    (c) Protection and Advocacy of Individual Rights.--Section 509 (29 
U.S.C. 794e) is amended to read as follows:

``SEC. 509. PROTECTION AND ADVOCACY OF INDIVIDUAL RIGHTS.

    ``(a) Purpose and Construction.--
        ``(1) Purpose.--The purpose of this section is to support a 
    system in each State to protect the legal and human rights of 
    individuals with disabilities who--
            ``(A) need services that are beyond the scope of services 
        authorized to be provided by the client assistance program 
        under section 112; and
            ``(B)(i) are ineligible for protection and advocacy 
        programs under part C of the Developmental Disabilities 
        Assistance and Bill of Rights Act (42 U.S.C. 6041 et seq.) 
        because the individuals do not have a developmental disability, 
        as defined in section 102 of such Act (42 U.S.C. 6002); and
            ``(ii) are ineligible for services under the Protection and 
        Advocacy for Mentally Ill Individuals Act of 1986 (42 U.S.C. 
        10801 et seq.) because the individuals are not individuals with 
        mental illness, as defined in section 102 of such Act (42 
        U.S.C. 10802).
        ``(2) Construction.--This section shall not be construed to 
    require the provision of protection and advocacy services that can 
    be provided under the Technology-Related Assistance for Individuals 
    With Disabilities Act of 1988 (42 U.S.C. 2201 et seq.).
    ``(b) Appropriations Less Than $5,500,000.--For any fiscal year in 
which the amount appropriated to carry out this section is less than 
$5,500,000, the Commissioner may make grants from such amount to 
eligible systems within States to plan for, develop outreach strategies 
for, and carry out protection and advocacy programs authorized under 
this section for individuals with disabilities who meet the 
requirements of subparagraphs (A) and (B) of subsection (a)(1).
    ``(c) Appropriations of $5,500,000 or More.--
        ``(1) Reservations.--
            ``(A) Technical assistance.--For any fiscal year in which 
        the amount appropriated to carry out this section equals or 
        exceeds $5,500,000, the Commissioner shall set aside not less 
        than 1.8 percent and not more than 2.2 percent of the amount to 
        provide training and technical assistance to the systems 
        established under this section.
            ``(B) Grant for the eligible system serving the american 
        indian consortium.--For any fiscal year in which the amount 
        appropriated to carry out this section equals or exceeds 
        $10,500,000, the Commissioner shall reserve a portion, and use 
        the portion to make a grant for the eligible system serving the 
        American Indian consortium. The Commission shall make the grant 
        in an amount of not less than $50,000 for the fiscal year.
        ``(2) Allotments.--For any such fiscal year, after the 
    reservations required by paragraph (1) have been made, the 
    Commissioner shall make allotments from the remainder of such 
    amount in accordance with paragraph (3) to eligible systems within 
    States to enable such systems to carry out protection and advocacy 
    programs authorized under this section for individuals referred to 
    in subsection (b).
        ``(3) Systems within states.--
            ``(A) Population basis.--Except as provided in subparagraph 
        (B), from such remainder for each such fiscal year, the 
        Commissioner shall make an allotment to the eligible system 
        within a State of an amount bearing the same ratio to such 
        remainder as the population of the State bears to the 
        population of all States.
            ``(B) Minimums.--Subject to the availability of 
        appropriations to carry out this section, and except as 
        provided in paragraph (4), the allotment to any system under 
        subparagraph (A) shall be not less than $100,000 or \1/3\ of 1 
        percent of the remainder for the fiscal year for which the 
        allotment is made, whichever is greater, and the allotment to 
        any system under this section for any fiscal year that is less 
        than $100,000 or \1/3\ of 1 percent of such remainder shall be 
        increased to the greater of the two amounts.
        ``(4) Systems within other jurisdictions.--
            ``(A) In general.--For the purposes of paragraph (3)(B), 
        Guam, American Samoa, the United States Virgin Islands, and the 
        Commonwealth of the Northern Mariana Islands shall not be 
        considered to be States.
            ``(B) Allotment.--The eligible system within a jurisdiction 
        described in subparagraph (A) shall be allotted under paragraph 
        (3)(A) not less than $50,000 for the fiscal year for which the 
        allotment is made.
        ``(5) Adjustment for inflation.--For any fiscal year, beginning 
    in fiscal year 1999, in which the total amount appropriated to 
    carry out this section exceeds the total amount appropriated to 
    carry out this section for the preceding fiscal year, the 
    Commissioner shall increase each of the minimum grants or 
    allotments under paragraphs (1)(B), (3)(B), and (4)(B) by a 
    percentage that shall not exceed the percentage increase in the 
    total amount appropriated to carry out this section between the 
    preceding fiscal year and the fiscal year involved.
    ``(d) Proportional Reduction.--To provide minimum allotments to 
systems within States (as increased under subsection (c)(5)) under 
subsection (c)(3)(B), or to provide minimum allotments to systems 
within States (as increased under subsection (c)(5)) under subsection 
(c)(4)(B), the Commissioner shall proportionately reduce the allotments 
of the remaining systems within States under subsection (c)(3), with 
such adjustments as may be necessary to prevent the allotment of any 
such remaining system within a State from being reduced to less than 
the minimum allotment for a system within a State (as increased under 
subsection (c)(5)) under subsection (c)(3)(B), or the minimum allotment 
for a State (as increased under subsection (c)(5)) under subsection 
(c)(4)(B), as appropriate.
    ``(e) Reallotment.--Whenever the Commissioner determines that any 
amount of an allotment to a system within a State for any fiscal year 
described in subsection (c)(1) will not be expended by such system in 
carrying out the provisions of this section, the Commissioner shall 
make such amount available for carrying out the provisions of this 
section to one or more of the systems that the Commissioner determines 
will be able to use additional amounts during such year for carrying 
out such provisions. Any amount made available to a system for any 
fiscal year pursuant to the preceding sentence shall, for the purposes 
of this section, be regarded as an increase in the allotment of the 
system (as determined under the preceding provisions of this section) 
for such year.
    ``(f) Application.--In order to receive assistance under this 
section, an eligible system shall submit an application to the 
Commissioner, at such time, in such form and manner, and containing 
such information and assurances as the Commissioner determines 
necessary to meet the requirements of this section, including 
assurances that the eligible system will--
        ``(1) have in effect a system to protect and advocate the 
    rights of individuals with disabilities;
        ``(2) have the same general authorities, including access to 
    records and program income, as are set forth in part C of the 
    Developmental Disabilities Assistance and Bill of Rights Act (42 
    U.S.C. 6041 et seq.);
        ``(3) have the authority to pursue legal, administrative, and 
    other appropriate remedies or approaches to ensure the protection 
    of, and advocacy for, the rights of such individuals within the 
    State or the American Indian consortium who are individuals 
    described in subsection (a)(1);
        ``(4) provide information on and make referrals to programs and 
    services addressing the needs of individuals with disabilities in 
    the State or the American Indian consortium;
        ``(5) develop a statement of objectives and priorities on an 
    annual basis, and provide to the public, including individuals with 
    disabilities and, as appropriate, the individuals' representatives, 
    an opportunity to comment on the objectives and priorities 
    established by, and activities of, the system including--
            ``(A) the objectives and priorities for the activities of 
        the system for each year and the rationale for the 
        establishment of such objectives and priorities; and
            ``(B) the coordination of programs provided through the 
        system under this section with the advocacy programs of the 
        client assistance program under section 112, the State long-
        term care ombudsman program established under the Older 
        Americans Act of 1965 (42 U.S.C. 3001 et seq.), the 
        Developmental Disabilities Assistance and Bill of Rights Act 
        (42 U.S.C. 6000 et seq.), and the Protection and Advocacy for 
        Mentally Ill Individuals Act of 1986 (42 U.S.C. 10801 et seq.);
        ``(6) establish a grievance procedure for clients or 
    prospective clients of the system to ensure that individuals with 
    disabilities are afforded equal opportunity to access the services 
    of the system; and
        ``(7) provide assurances to the Commissioner that funds made 
    available under this section will be used to supplement and not 
    supplant the non-Federal funds that would otherwise be made 
    available for the purpose for which Federal funds are provided.
    ``(g) Carryover and Direct Payment.--
        ``(1) Direct payment.--Notwithstanding any other provision of 
    law, the Commissioner shall pay directly to any system that 
    complies with the provisions of this section, the amount of the 
    allotment of the State or the grant for the eligible system that 
    serves the American Indian consortium involved under this section, 
    unless the State or American Indian consortium provides otherwise.
        ``(2) Carryover.--Any amount paid to an eligible system that 
    serves a State or American Indian consortium for a fiscal year that 
    remains unobligated at the end of such year shall remain available 
    to such system that serves the State or American Indian consortium 
    for obligation during the next fiscal year for the purposes for 
    which such amount was paid.
    ``(h) Limitation on Disclosure Requirements.--For purposes of any 
audit, report, or evaluation of the performance of the program 
established under this section, the Commissioner shall not require such 
a program to disclose the identity of, or any other personally 
identifiable information related to, any individual requesting 
assistance under such program.
    ``(i) Administrative Cost.--In any State in which an eligible 
system is located within a State agency, a State may use a portion of 
any allotment under subsection (c) for the cost of the administration 
of the system required by this section. Such portion may not exceed 5 
percent of the allotment.
    ``(j) Delegation.--The Commissioner may delegate the administration 
of this program to the Commissioner of the Administration on 
Developmental Disabilities within the Department of Health and Human 
Services.
    ``(k) Report.--The Commissioner shall annually prepare and submit 
to the Committee on Education and the Workforce of the House of 
Representatives and the Committee on Labor and Human Resources of the 
Senate a report describing the types of services and activities being 
undertaken by programs funded under this section, the total number of 
individuals served under this section, the types of disabilities 
represented by such individuals, and the types of issues being 
addressed on behalf of such individuals.
    ``(l) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of the fiscal years 1999 through 2003.
    ``(m) Definitions.--As used in this section:
        ``(1) Eligible system.--The term `eligible system' means a 
    protection and advocacy system that is established under part C of 
    the Developmental Disabilities Assistance and Bill of Rights Act 
    (42 U.S.C. 6041 et seq.) and that meets the requirements of 
    subsection (f).
        ``(2) American indian consortium.--The term `American Indian 
    consortium' means a consortium established as described in section 
    142 of the Developmental Disabilities Assistance and Bill of Rights 
    Act (42 U.S.C. 6042).''.

SEC. 409. EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS WITH DISABILITIES.

    Title VI of the Rehabilitation Act of 1973 (29 U.S.C. 795 et seq.) 
is amended to read as follows:

 ``TITLE VI--EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS WITH DISABILITIES


                              ``short title

    ``Sec. 601. This title may be cited as the `Employment 
Opportunities for Individuals With Disabilities Act'.

                    ``Part A--Projects With Industry


                         ``projects with industry

    ``Sec. 611. (a)(1) The purpose of this part is to create and expand 
job and career opportunities for individuals with disabilities in the 
competitive labor market by engaging the talent and leadership of 
private industry as partners in the rehabilitation process, to identify 
competitive job and career opportunities and the skills needed to 
perform such jobs, to create practical job and career readiness and 
training programs, and to provide job placements and career 
advancement.
    ``(2) The Commissioner, in consultation with the Secretary of Labor 
and with designated State units, may award grants to individual 
employers, community rehabilitation program providers, labor unions, 
trade associations, Indian tribes, tribal organizations, designated 
State units, and other entities to establish jointly financed Projects 
With Industry to create and expand job and career opportunities for 
individuals with disabilities, which projects shall--
        ``(A) provide for the establishment of business advisory 
    councils, that shall--
            ``(i) be comprised of--
                ``(I) representatives of private industry, business 
            concerns, and organized labor;
                ``(II) individuals with disabilities and 
            representatives of individuals with disabilities; and
                ``(III) a representative of the appropriate designated 
            State unit;
            ``(ii) identify job and career availability within the 
        community, consistent with the current and projected local 
        employment opportunities identified by the local workforce 
        investment board for the community under section 118(b)(1)(B) 
        of the Workforce Investment Act of 1998;
            ``(iii) identify the skills necessary to perform the jobs 
        and careers identified; and
            ``(iv) prescribe training programs designed to develop 
        appropriate job and career skills, or job placement programs 
        designed to identify and develop job placement and career 
        advancement opportunities, for individuals with disabilities in 
        fields related to the job and career availability identified 
        under clause (ii);
        ``(B) provide job development, job placement, and career 
    advancement services;
        ``(C) to the extent appropriate, provide for--
            ``(i) training in realistic work settings in order to 
        prepare individuals with disabilities for employment and career 
        advancement in the competitive market; and
            ``(ii) to the extent practicable, the modification of any 
        facilities or equipment of the employer involved that are used 
        primarily by individuals with disabilities, except that a 
        project shall not be required to provide for such modification 
        if the modification is required as a reasonable accommodation 
        under the Americans with Disabilities Act of 1990 (42 U.S.C. 
        12101 et seq.); and
        ``(D) provide individuals with disabilities with such support 
    services as may be required in order to maintain the employment and 
    career advancement for which the individuals have received training 
    under this part.
    ``(3)(A) An individual shall be eligible for services described in 
paragraph (2) if the individual is determined to be an individual 
described in section 102(a)(1), and if the determination is made in a 
manner consistent with section 102(a).
    ``(B) Such a determination may be made by the recipient of a grant 
under this part, to the extent the determination is appropriate and 
available and consistent with the requirements of section 102(a).
    ``(4) The Commissioner shall enter into an agreement with the grant 
recipient regarding the establishment of the project. Any agreement 
shall be jointly developed by the Commissioner, the grant recipient, 
and, to the extent practicable, the appropriate designated State unit 
and the individuals with disabilities (or the individuals' 
representatives) involved. Such agreements shall specify the terms of 
training and employment under the project, provide for the payment by 
the Commissioner of part of the costs of the project (in accordance 
with subsection (c)), and contain the items required under subsection 
(b) and such other provisions as the parties to the agreement consider 
to be appropriate.
    ``(5) Any agreement shall include a description of a plan to 
annually conduct a review and evaluation of the operation of the 
project in accordance with standards developed by the Commissioner 
under subsection (d), and, in conducting the review and evaluation, to 
collect data and information of the type described in subparagraphs (A) 
through (C) of section 101(a)(10), as determined to be appropriate by 
the Commissioner.
    ``(6) The Commissioner may include, as part of agreements with 
grant recipients, authority for such grant recipients to provide 
technical assistance to--
        ``(A) assist employers in hiring individuals with disabilities; 
    or
        ``(B) improve or develop relationships between--
            ``(i) grant recipients or prospective grant recipients; and
            ``(ii) employers or organized labor; or
        ``(C) assist employers in understanding and meeting the 
    requirements of the Americans with Disabilities Act of 1990 (42 
    U.S.C. 12101 et seq.) as the Act relates to employment of 
    individuals with disabilities.
    ``(b) No payment shall be made by the Commissioner under any 
agreement with a grant recipient entered into under subsection (a) 
unless such agreement--
        ``(1) provides an assurance that individuals with disabilities 
    placed under such agreement shall receive at least the applicable 
    minimum wage;
        ``(2) provides an assurance that any individual with a 
    disability placed under this part shall be afforded terms and 
    benefits of employment equal to terms and benefits that are 
    afforded to the similarly situated nondisabled co-workers of the 
    individual, and that such individuals with disabilities shall not 
    be segregated from their co-workers; and
        ``(3) provides an assurance that an annual evaluation report 
    containing information specified under subsection (a)(5) shall be 
    submitted as determined to be appropriate by the Commissioner.
    ``(c) Payments under this section with respect to any project may 
not exceed 80 per centum of the costs of the project.
    ``(d)(1) The Commissioner shall develop standards for the 
evaluation described in subsection (a)(5) and shall review and revise 
the evaluation standards as necessary, subject to paragraph (2).
    ``(2) In revising the standards for evaluation to be used by the 
grant recipients, the Commissioner shall obtain and consider 
recommendations for such standards from State vocational rehabilitation 
agencies, current and former grant recipients, professional 
organizations representing business and industry, organizations 
representing individuals with disabilities, individuals served by grant 
recipients, organizations representing community rehabilitation program 
providers, and labor organizations.
    ``(e)(1)(A) A grant may be awarded under this section for a period 
of up to 5 years and such grant may be renewed.
    ``(B) Grants under this section shall be awarded on a competitive 
basis. To be eligible to receive such a grant, a prospective grant 
recipient shall submit an application to the Commissioner at such time, 
in such manner, and containing such information as the Commissioner may 
require.
    ``(2) The Commissioner shall, to the extent practicable, ensure an 
equitable distribution of payments made under this section among the 
States. To the extent funds are available, the Commissioner shall award 
grants under this section to new projects that will serve individuals 
with disabilities in States, portions of States, Indian tribes, or 
tribal organizations, that are currently unserved or underserved by 
projects.
    ``(f)(1) The Commissioner shall, as necessary, develop and publish 
in the Federal Register, in final form, indicators of what constitutes 
minimum compliance consistent with the evaluation standards under 
subsection (d)(1).
    ``(2) Each grant recipient shall report to the Commissioner at the 
end of each project year the extent to which the grant recipient is in 
compliance with the evaluation standards.
    ``(3)(A) The Commissioner shall annually conduct onsite compliance 
reviews of at least 15 percent of grant recipients. The Commissioner 
shall select grant recipients for review on a random basis.
    ``(B) The Commissioner shall use the indicators in determining 
compliance with the evaluation standards.
    ``(C) The Commissioner shall ensure that at least one member of a 
team conducting such a review shall be an individual who--
        ``(i) is not an employee of the Federal Government; and
        ``(ii) has experience or expertise in conducting projects.
    ``(D) The Commissioner shall ensure that--
        ``(i) a representative of the appropriate designated State unit 
    shall participate in the review; and
        ``(ii) no person shall participate in the review of a grant 
    recipient if--
            ``(I) the grant recipient provides any direct financial 
        benefit to the reviewer; or
            ``(II) participation in the review would give the 
        appearance of a conflict of interest.
    ``(4) In making a determination concerning any subsequent grant 
under this section, the Commissioner shall consider the past 
performance of the applicant, if applicable. The Commissioner shall use 
compliance indicators developed under this subsection that are 
consistent with program evaluation standards developed under subsection 
(d) to assess minimum project performance for purposes of making 
continuation awards in the third, fourth, and fifth years.
    ``(5) Each fiscal year the Commissioner shall include in the annual 
report to Congress required by section 13 an analysis of the extent to 
which grant recipients have complied with the evaluation standards. The 
Commissioner may identify individual grant recipients in the analysis. 
In addition, the Commissioner shall report the results of onsite 
compliance reviews, identifying individual grant recipients.
    ``(g) The Commissioner may provide, directly or by way of grant, 
contract, or cooperative agreement, technical assistance to--
        ``(1) entities conducting projects for the purpose of assisting 
    such entities in--
            ``(A) the improvement of or the development of 
        relationships with private industry or labor; or
            ``(B) the improvement of relationships with State 
        vocational rehabilitation agencies; and
        ``(2) entities planning the development of new projects.
    ``(h) As used in this section:
        ``(1) The term `agreement' means an agreement described in 
    subsection (a)(4).
        ``(2) The term `project' means a Project With Industry 
    established under subsection (a)(2).
        ``(3) The term `grant recipient' means a recipient of a grant 
    under subsection (a)(2).

                    ``authorization of appropriations

    ``Sec. 612. There are authorized to be appropriated to carry out 
the provisions of this part, such sums as may be necessary for each of 
fiscal years 1999 through 2003.

 ``Part B--Supported Employment Services for Individuals With the Most 
                        Significant Disabilities


                                ``purpose

    ``Sec. 621. It is the purpose of this part to authorize allotments, 
in addition to grants for vocational rehabilitation services under 
title I, to assist States in developing collaborative programs with 
appropriate entities to provide supported employment services for 
individuals with the most significant disabilities to enable such 
individuals to achieve the employment outcome of supported employment.


                               ``allotments

        ``Sec. 622. (a) In General.--
        ``(1) States.--The Secretary shall allot the sums appropriated 
    for each fiscal year to carry out this part among the States on the 
    basis of relative population of each State, except that--
            ``(A) no State shall receive less than $250,000, or \1/3\ 
        of 1 percent of the sums appropriated for the fiscal year for 
        which the allotment is made, whichever is greater; and
            ``(B) if the sums appropriated to carry out this part for 
        the fiscal year exceed by $1,000,000 or more the sums 
        appropriated to carry out this part in fiscal year 1992, no 
        State shall receive less than $300,000, or \1/3\ of 1 percent 
        of the sums appropriated for the fiscal year for which the 
        allotment is made, whichever is greater.
        ``(2) Certain territories.--
            ``(A) In general.--For the purposes of this subsection, 
        Guam, American Samoa, the United States Virgin Islands, and the 
        Commonwealth of the Northern Mariana Islands shall not be 
        considered to be States.
            ``(B) Allotment.--Each jurisdiction described in 
        subparagraph (A) shall be allotted not less than one-eighth of 
        one percent of the amounts appropriated for the fiscal year for 
        which the allotment is made.
    ``(b) Reallotment.--Whenever the Commissioner determines that any 
amount of an allotment to a State for any fiscal year will not be 
expended by such State for carrying out the provisions of this part, 
the Commissioner shall make such amount available for carrying out the 
provisions of this part to one or more of the States that the 
Commissioner determines will be able to use additional amounts during 
such year for carrying out such provisions. Any amount made available 
to a State for any fiscal year pursuant to the preceding sentence 
shall, for the purposes of this section, be regarded as an increase in 
the allotment of the State (as determined under the preceding 
provisions of this section) for such year.


                        ``availability of services

    ``Sec. 623. Funds provided under this part may be used to provide 
supported employment services to individuals who are eligible under 
this part. Funds provided under this part, or title I, may not be used 
to provide extended services to individuals who are eligible under this 
part or title I.


                              ``eligibility

    ``Sec. 624. An individual shall be eligible under this part to 
receive supported employment services authorized under this Act if--
        ``(1) the individual is eligible for vocational rehabilitation 
    services;
        ``(2) the individual is determined to be an individual with a 
    most significant disability; and
        ``(3) a comprehensive assessment of rehabilitation needs of the 
    individual described in section 7(2)(B), including an evaluation of 
    rehabilitation, career, and job needs, identifies supported 
    employment as the appropriate employment outcome for the 
    individual.


                               ``state plan

    ``Sec. 625. (a) State Plan Supplements.--To be eligible for an 
allotment under this part, a State shall submit to the Commissioner, as 
part of the State plan under section 101, a State plan supplement for 
providing supported employment services authorized under this Act to 
individuals who are eligible under this Act to receive the services. 
Each State shall make such annual revisions in the plan supplement as 
may be necessary.
    ``(b) Contents.--Each such plan supplement shall--
        ``(1) designate each designated State agency as the agency to 
    administer the program assisted under this part;
        ``(2) summarize the results of the comprehensive, statewide 
    assessment conducted under section 101(a)(15)(A)(i), with respect 
    to the rehabilitation needs of individuals with significant 
    disabilities and the need for supported employment services, 
    including needs related to coordination;
        ``(3) describe the quality, scope, and extent of supported 
    employment services authorized under this Act to be provided to 
    individuals who are eligible under this Act to receive the services 
    and specify the goals and plans of the State with respect to the 
    distribution of funds received under section 622;
        ``(4) demonstrate evidence of the efforts of the designated 
    State agency to identify and make arrangements (including entering 
    into cooperative agreements) with other State agencies and other 
    appropriate entities to assist in the provision of supported 
    employment services;
        ``(5) demonstrate evidence of the efforts of the designated 
    State agency to identify and make arrangements (including entering 
    into cooperative agreements) with other public or nonprofit 
    agencies or organizations within the State, employers, natural 
    supports, and other entities with respect to the provision of 
    extended services;
        ``(6) provide assurances that--
            ``(A) funds made available under this part will only be 
        used to provide supported employment services authorized under 
        this Act to individuals who are eligible under this part to 
        receive the services;
            ``(B) the comprehensive assessments of individuals with 
        significant disabilities conducted under section 102(b)(1) and 
        funded under title I will include consideration of supported 
        employment as an appropriate employment outcome;
            ``(C) an individualized plan for employment, as required by 
        section 102, will be developed and updated using funds under 
        title I in order to--
                ``(i) specify the supported employment services to be 
            provided;
                ``(ii) specify the expected extended services needed; 
            and
                ``(iii) identify the source of extended services, which 
            may include natural supports, or to the extent that it is 
            not possible to identify the source of extended services at 
            the time the individualized plan for employment is 
            developed, a statement describing the basis for concluding 
            that there is a reasonable expectation that such sources 
            will become available;
            ``(D) the State will use funds provided under this part 
        only to supplement, and not supplant, the funds provided under 
        title I, in providing supported employment services specified 
        in the individualized plan for employment;
            ``(E) services provided under an individualized plan for 
        employment will be coordinated with services provided under 
        other individualized plans established under other Federal or 
        State programs;
            ``(F) to the extent jobs skills training is provided, the 
        training will be provided on site; and
            ``(G) supported employment services will include placement 
        in an integrated setting for the maximum number of hours 
        possible based on the unique strengths, resources, priorities, 
        concerns, abilities, capabilities, interests, and informed 
        choice of individuals with the most significant disabilities;
        ``(7) provide assurances that the State agencies designated 
    under paragraph (1) will expend not more than 5 percent of the 
    allotment of the State under this part for administrative costs of 
    carrying out this part; and
        ``(8) contain such other information and be submitted in such 
    manner as the Commissioner may require.


                              ``restriction

    ``Sec. 626. Each State agency designated under section 625(b)(1) 
shall collect the information required by section 101(a)(10) separately 
for eligible individuals receiving supported employment services under 
this part and for eligible individuals receiving supported employment 
services under title I.


                           ``savings provision

    ``Sec. 627. (a) Supported Employment Services.--Nothing in this Act 
shall be construed to prohibit a State from providing supported 
employment services in accordance with the State plan submitted under 
section 101 by using funds made available through a State allotment 
under section 110.
    ``(b) Postemployment Services.--Nothing in this part shall be 
construed to prohibit a State from providing discrete postemployment 
services in accordance with the State plan submitted under section 101 
by using funds made available through a State allotment under section 
110 to an individual who is eligible under this part.


                    ``authorization of appropriations

    ``Sec. 628. There are authorized to be appropriated to carry out 
this part such sums as may be necessary for each of fiscal years 1999 
through 2003.''.

SEC. 410. INDEPENDENT LIVING SERVICES AND CENTERS FOR INDEPENDENT 
              LIVING.

    Title VII of the Rehabilitation Act of 1973 (29 U.S.C. 796 et seq.) 
is amended to read as follows:

 ``TITLE VII--INDEPENDENT LIVING SERVICES AND CENTERS FOR INDEPENDENT 
                                 LIVING

         ``CHAPTER 1--INDIVIDUALS WITH SIGNIFICANT DISABILITIES

                      ``PART A--GENERAL PROVISIONS

``SEC. 701. PURPOSE.

    ``The purpose of this chapter is to promote a philosophy of 
independent living, including a philosophy of consumer control, peer 
support, self-help, self-determination, equal access, and individual 
and system advocacy, in order to maximize the leadership, empowerment, 
independence, and productivity of individuals with disabilities, and 
the integration and full inclusion of individuals with disabilities 
into the mainstream of American society, by--
        ``(1) providing financial assistance to States for providing, 
    expanding, and improving the provision of independent living 
    services;
        ``(2) providing financial assistance to develop and support 
    statewide networks of centers for independent living; and
        ``(3) providing financial assistance to States for improving 
    working relationships among State independent living rehabilitation 
    service programs, centers for independent living, Statewide 
    Independent Living Councils established under section 705, State 
    vocational rehabilitation programs receiving assistance under title 
    I, State programs of supported employment services receiving 
    assistance under part B of title VI, client assistance programs 
    receiving assistance under section 112, programs funded under other 
    titles of this Act, programs funded under other Federal law, and 
    programs funded through non-Federal sources.

``SEC. 702. DEFINITIONS.

    ``As used in this chapter:
        ``(1) Center for independent living.--The term `center for 
    independent living' means a consumer-controlled, community-based, 
    cross-disability, nonresidential private nonprofit agency that--
            ``(A) is designed and operated within a local community by 
        individuals with disabilities; and
            ``(B) provides an array of independent living services.
        ``(2) Consumer control.--The term `consumer control' means, 
    with respect to a center for independent living, that the center 
    vests power and authority in individuals with disabilities.

``SEC. 703. ELIGIBILITY FOR RECEIPT OF SERVICES.

    ``Services may be provided under this chapter to any individual 
with a significant disability, as defined in section 7(21)(B).

``SEC. 704. STATE PLAN.

    ``(a) In General.--
        ``(1) Requirement.--To be eligible to receive financial 
    assistance under this chapter, a State shall submit to the 
    Commissioner, and obtain approval of, a State plan containing such 
    provisions as the Commissioner may require, including, at a 
    minimum, the provisions required in this section.
        ``(2) Joint development.--The plan under paragraph (1) shall be 
    jointly developed and signed by--
            ``(A) the director of the designated State unit; and
            ``(B) the chairperson of the Statewide Independent Living 
        Council, acting on behalf of and at the direction of the 
        Council.
        ``(3) Periodic review and revision.--The plan shall provide for 
    the review and revision of the plan, not less than once every 3 
    years, to ensure the existence of appropriate planning, financial 
    support and coordination, and other assistance to appropriately 
    address, on a statewide and comprehensive basis, needs in the State 
    for--
            ``(A) the provision of State independent living services;
            ``(B) the development and support of a statewide network of 
        centers for independent living; and
            ``(C) working relationships between--
                ``(i) programs providing independent living services 
            and independent living centers; and
                ``(ii) the vocational rehabilitation program 
            established under title I, and other programs providing 
            services for individuals with disabilities.
        ``(4) Date of submission.--The State shall submit the plan to 
    the Commissioner 90 days before the completion date of the 
    preceding plan. If a State fails to submit such a plan that 
    complies with the requirements of this section, the Commissioner 
    may withhold financial assistance under this chapter until such 
    time as the State submits such a plan.
    ``(b) Statewide Independent Living Council.--The plan shall provide 
for the establishment of a Statewide Independent Living Council in 
accordance with section 705.
    ``(c) Designation of State Unit.--The plan shall designate the 
designated State unit of such State as the agency that, on behalf of 
the State, shall--
        ``(1) receive, account for, and disburse funds received by the 
    State under this chapter based on the plan;
        ``(2) provide administrative support services for a program 
    under part B, and a program under part C in a case in which the 
    program is administered by the State under section 723;
        ``(3) keep such records and afford such access to such records 
    as the Commissioner finds to be necessary with respect to the 
    programs; and
        ``(4) submit such additional information or provide such 
    assurances as the Commissioner may require with respect to the 
    programs.
    ``(d) Objectives.--The plan shall--
        ``(1) specify the objectives to be achieved under the plan and 
    establish timelines for the achievement of the objectives; and
        ``(2) explain how such objectives are consistent with and 
    further the purpose of this chapter.
    ``(e) Independent Living Services.--The plan shall provide that the 
State will provide independent living services under this chapter to 
individuals with significant disabilities, and will provide the 
services to such an individual in accordance with an independent living 
plan mutually agreed upon by an appropriate staff member of the service 
provider and the individual, unless the individual signs a waiver 
stating that such a plan is unnecessary.
    ``(f) Scope and Arrangements.--The plan shall describe the extent 
and scope of independent living services to be provided under this 
chapter to meet such objectives. If the State makes arrangements, by 
grant or contract, for providing such services, such arrangements shall 
be described in the plan.
    ``(g) Network.--The plan shall set forth a design for the 
establishment of a statewide network of centers for independent living 
that comply with the standards and assurances set forth in section 725.
    ``(h) Centers.--In States in which State funding for centers for 
independent living equals or exceeds the amount of funds allotted to 
the State under part C, as provided in section 723, the plan shall 
include policies, practices, and procedures governing the awarding of 
grants to centers for independent living and oversight of such centers 
consistent with section 723.
    ``(i) Cooperation, Coordination, and Working Relationships Among 
Various Entities.--The plan shall set forth the steps that will be 
taken to maximize the cooperation, coordination, and working 
relationships among--
        ``(1) the independent living rehabilitation service program, 
    the Statewide Independent Living Council, and centers for 
    independent living; and
        ``(2) the designated State unit, other State agencies 
    represented on such Council, other councils that address the needs 
    of specific disability populations and issues, and other public and 
    private entities determined to be appropriate by the Council.
    ``(j) Coordination of Services.--The plan shall describe how 
services funded under this chapter will be coordinated with, and 
complement, other services, in order to avoid unnecessary duplication 
with other Federal, State, and local programs.
    ``(k) Coordination Between Federal and State Sources.--The plan 
shall describe efforts to coordinate Federal and State funding for 
centers for independent living and independent living services.
    ``(l) Outreach.--With respect to services and centers funded under 
this chapter, the plan shall set forth steps to be taken regarding 
outreach to populations that are unserved or underserved by programs 
under this title, including minority groups and urban and rural 
populations.
    ``(m) Requirements.--The plan shall provide satisfactory assurances 
that all recipients of financial assistance under this chapter will--
        ``(1) notify all individuals seeking or receiving services 
    under this chapter about the availability of the client assistance 
    program under section 112, the purposes of the services provided 
    under such program, and how to contact such program;
        ``(2) take affirmative action to employ and advance in 
    employment qualified individuals with disabilities on the same 
    terms and conditions required with respect to the employment of 
    such individuals under the provisions of section 503;
        ``(3) adopt such fiscal control and fund accounting procedures 
    as may be necessary to ensure the proper disbursement of and 
    accounting for funds paid to the State under this chapter;
        ``(4)(A) maintain records that fully disclose--
            ``(i) the amount and disposition by such recipient of the 
        proceeds of such financial assistance;
            ``(ii) the total cost of the project or undertaking in 
        connection with which such financial assistance is given or 
        used; and
            ``(iii) the amount of that portion of the cost of the 
        project or undertaking supplied by other sources;
        ``(B) maintain such other records as the Commissioner 
    determines to be appropriate to facilitate an effective audit;
        ``(C) afford such access to records maintained under 
    subparagraphs (A) and (B) as the Commissioner determines to be 
    appropriate; and
        ``(D) submit such reports with respect to such records as the 
    Commissioner determines to be appropriate;
        ``(5) provide access to the Commissioner and the Comptroller 
    General or any of their duly authorized representatives, for the 
    purpose of conducting audits and examinations, of any books, 
    documents, papers, and records of the recipients that are pertinent 
    to the financial assistance received under this chapter; and
        ``(6) provide for public hearings regarding the contents of the 
    plan during both the formulation and review of the plan.
    ``(n) Evaluation.--The plan shall establish a method for the 
periodic evaluation of the effectiveness of the plan in meeting the 
objectives established in subsection (d), including evaluation of 
satisfaction by individuals with disabilities.

``SEC. 705. STATEWIDE INDEPENDENT LIVING COUNCIL.

    ``(a) Establishment.--To be eligible to receive financial 
assistance under this chapter, each State shall establish a Statewide 
Independent Living Council (referred to in this section as the 
`Council'). The Council shall not be established as an entity within a 
State agency.
    ``(b) Composition and Appointment.--
        ``(1) Appointment.--Members of the Council shall be appointed 
    by the Governor. The Governor shall select members after soliciting 
    recommendations from representatives of organizations representing 
    a broad range of individuals with disabilities and organizations 
    interested in individuals with disabilities.
        ``(2) Composition.--The Council shall include--
            ``(A) at least one director of a center for independent 
        living chosen by the directors of centers for independent 
        living within the State;
            ``(B) as ex officio, nonvoting members--
                ``(i) a representative from the designated State unit; 
            and
                ``(ii) representatives from other State agencies that 
            provide services for individuals with disabilities; and
            ``(C) in a State in which one or more projects are carried 
        out under section 121, at least one representative of the 
        directors of the projects.
        ``(3) Additional members.--The Council may include--
            ``(A) other representatives from centers for independent 
        living;
            ``(B) parents and guardians of individuals with 
        disabilities;
            ``(C) advocates of and for individuals with disabilities;
            ``(D) representatives from private businesses;
            ``(E) representatives from organizations that provide 
        services for individuals with disabilities; and
            ``(F) other appropriate individuals.
        ``(4) Qualifications.--
            ``(A) In general.--The Council shall be composed of 
        members--
                ``(i) who provide statewide representation;
                ``(ii) who represent a broad range of individuals with 
            disabilities from diverse backgrounds;
                ``(iii) who are knowledgeable about centers for 
            independent living and independent living services; and
                ``(iv) a majority of whom are persons who are--

                    ``(I) individuals with disabilities described in 
                section 7(20)(B); and
                    ``(II) not employed by any State agency or center 
                for independent living.

            ``(B) Voting members.--A majority of the voting members of 
        the Council shall be--
                ``(i) individuals with disabilities described in 
            section 7(20)(B); and
                ``(ii) not employed by any State agency or center for 
            independent living.
        ``(5) Chairperson.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the Council shall select a chairperson from among the voting 
        membership of the Council.
            ``(B) Designation by governor.--In States in which the 
        Governor does not have veto power pursuant to State law, the 
        Governor shall designate a voting member of the Council to 
        serve as the chairperson of the Council or shall require the 
        Council to so designate such a voting member.
        ``(6) Terms of appointment.--
            ``(A) Length of term.--Each member of the Council shall 
        serve for a term of 3 years, except that--
                ``(i) a member appointed to fill a vacancy occurring 
            prior to the expiration of the term for which a predecessor 
            was appointed, shall be appointed for the remainder of such 
            term; and
                ``(ii) the terms of service of the members initially 
            appointed shall be (as specified by the Governor) for such 
            fewer number of years as will provide for the expiration of 
            terms on a staggered basis.
            ``(B) Number of terms.--No member of the Council may serve 
        more than two consecutive full terms.
        ``(7) Vacancies.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        any vacancy occurring in the membership of the Council shall be 
        filled in the same manner as the original appointment. The 
        vacancy shall not affect the power of the remaining members to 
        execute the duties of the Council.
            ``(B) Delegation.--The Governor may delegate the authority 
        to fill such a vacancy to the remaining voting members of the 
        Council after making the original appointment.
    ``(c) Duties.--The Council shall--
        ``(1) jointly develop and sign (in conjunction with the 
    designated State unit) the State plan required in section 704;
        ``(2) monitor, review, and evaluate the implementation of the 
    State plan;
        ``(3) coordinate activities with the State Rehabilitation 
    Council established under section 105, if the State has such a 
    Council, or the commission described in section 101(a)(21)(A), if 
    the State has such a commission, and councils that address the 
    needs of specific disability populations and issues under other 
    Federal law;
        ``(4) ensure that all regularly scheduled meetings of the 
    Statewide Independent Living Council are open to the public and 
    sufficient advance notice is provided; and
        ``(5) submit to the Commissioner such periodic reports as the 
    Commissioner may reasonably request, and keep such records, and 
    afford such access to such records, as the Commissioner finds 
    necessary to verify such reports.
    ``(d) Hearings and Forums.--The Council is authorized to hold such 
hearings and forums as the Council may determine to be necessary to 
carry out the duties of the Council.
    ``(e) Plan.--
        ``(1) In general.--The Council shall prepare, in conjunction 
    with the designated State unit, a plan for the provision of such 
    resources, including such staff and personnel, as may be necessary 
    and sufficient to carry out the functions of the Council under this 
    section, with funds made available under this chapter, and under 
    section 110 (consistent with section 101(a)(18)), and from other 
    public and private sources. The resource plan shall, to the maximum 
    extent possible, rely on the use of resources in existence during 
    the period of implementation of the plan.
        ``(2) Supervision and evaluation.--Each Council shall, 
    consistent with State law, supervise and evaluate such staff and 
    other personnel as may be necessary to carry out the functions of 
    the Council under this section.
        ``(3) Conflict of interest.--While assisting the Council in 
    carrying out its duties, staff and other personnel shall not be 
    assigned duties by the designated State agency or any other agency 
    or office of the State, that would create a conflict of interest.
    ``(f) Compensation and Expenses.--The Council may use such 
resources to reimburse members of the Council for reasonable and 
necessary expenses of attending Council meetings and performing Council 
duties (including child care and personal assistance services), and to 
pay compensation to a member of the Council, if such member is not 
employed or must forfeit wages from other employment, for each day the 
member is engaged in performing Council duties.

``SEC. 706. RESPONSIBILITIES OF THE COMMISSIONER.

    ``(a) Approval of State Plans.--
        ``(1) In general.--The Commissioner shall approve any State 
    plan submitted under section 704 that the Commissioner determines 
    meets the requirements of section 704, and shall disapprove any 
    such plan that does not meet such requirements, as soon as 
    practicable after receiving the plan. Prior to such disapproval, 
    the Commissioner shall notify the State of the intention to 
    disapprove the plan, and shall afford such State reasonable notice 
    and opportunity for a hearing.
        ``(2) Procedures.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the provisions of subsections (c) and (d) of section 107 shall 
        apply to any State plan submitted to the Commissioner under 
        section 704.
            ``(B) Application.--For purposes of the application 
        described in subparagraph (A), all references in such 
        provisions--
                ``(i) to the Secretary shall be deemed to be references 
            to the Commissioner; and
                ``(ii) to section 101 shall be deemed to be references 
            to section 704.
    ``(b) Indicators.--Not later than October 1, 1993, the Commissioner 
shall develop and publish in the Federal Register indicators of minimum 
compliance consistent with the standards set forth in section 725.
    ``(c) Onsite Compliance Reviews.--
        ``(1) Reviews.--The Commissioner shall annually conduct onsite 
    compliance reviews of at least 15 percent of the centers for 
    independent living that receive funds under section 722 and shall 
    periodically conduct such a review of each such center. The 
    Commissioner shall annually conduct onsite compliance reviews of at 
    least one-third of the designated State units that receive funding 
    under section 723, and, to the extent necessary to determine the 
    compliance of such a State unit with subsections (f) and (g) of 
    section 723, centers that receive funding under section 723 in such 
    State. The Commissioner shall select the centers and State units 
    described in this paragraph for review on a random basis.
        ``(2) Qualifications of employees conducting reviews.--The 
    Commissioner shall--
            ``(A) to the maximum extent practicable, carry out such a 
        review by using employees of the Department who are 
        knowledgeable about the provision of independent living 
        services;
            ``(B) ensure that the employee of the Department with 
        responsibility for supervising such a review shall have such 
        knowledge; and
            ``(C) ensure that at least one member of a team conducting 
        such a review shall be an individual who--
                ``(i) is not a government employee; and
                ``(ii) has experience in the operation of centers for 
            independent living.
    ``(d) Reports.--The Commissioner shall include, in the annual 
report required under section 13, information on the extent to which 
centers for independent living receiving funds under part C have 
complied with the standards and assurances set forth in section 725. 
The Commissioner may identify individual centers for independent living 
in the analysis. The Commissioner shall report the results of onsite 
compliance reviews, identifying individual centers for independent 
living and other recipients of assistance under this chapter.

                 ``PART B--INDEPENDENT LIVING SERVICES

``SEC. 711. ALLOTMENTS.

    ``(a) In General.--
        ``(1) States.--
            ``(A) Population basis.--Except as provided in 
        subparagraphs (B) and (C), from sums appropriated for each 
        fiscal year to carry out this part, the Commissioner shall make 
        an allotment to each State whose State plan has been approved 
        under section 706 of an amount bearing the same ratio to such 
        sums as the population of the State bears to the population of 
        all States.
            ``(B) Maintenance of 1992 amounts.--Subject to the 
        availability of appropriations to carry out this part, the 
        amount of any allotment made under subparagraph (A) to a State 
        for a fiscal year shall not be less than the amount of an 
        allotment made to the State for fiscal year 1992 under part A 
        of this title, as in effect on the day before the date of 
        enactment of the Rehabilitation Act Amendments of 1992.
            ``(C) Minimums.--Subject to the availability of 
        appropriations to carry out this part, and except as provided 
        in subparagraph (B), the allotment to any State under 
        subparagraph (A) shall be not less than $275,000 or \1/3\ of 1 
        percent of the sums made available for the fiscal year for 
        which the allotment is made, whichever is greater, and the 
        allotment of any State under this section for any fiscal year 
        that is less than $275,000 or \1/3\ of 1 percent of such sums 
        shall be increased to the greater of the two amounts.
        ``(2) Certain territories.--
            ``(A) In general.--For the purposes of paragraph (1)(C), 
        Guam, American Samoa, the United States Virgin Islands, and the 
        Commonwealth of the Northern Mariana Islands shall not be 
        considered to be States.
            ``(B) Allotment.--Each jurisdiction described in 
        subparagraph (A) shall be allotted under paragraph (1)(A) not 
        less than \1/8\ of 1 percent of the amounts made available for 
        purposes of this part for the fiscal year for which the 
        allotment is made.
        ``(3) Adjustment for inflation.--For any fiscal year, beginning 
    in fiscal year 1999, in which the total amount appropriated to 
    carry out this part exceeds the total amount appropriated to carry 
    out this part for the preceding fiscal year, the Commissioner shall 
    increase the minimum allotment under paragraph (1)(C) by a 
    percentage that shall not exceed the percentage increase in the 
    total amount appropriated to carry out this part between the 
    preceding fiscal year and the fiscal year involved.
    ``(b) Proportional Reduction.--To provide allotments to States in 
accordance with subsection (a)(1)(B), to provide minimum allotments to 
States (as increased under subsection (a)(3)) under subsection 
(a)(1)(C), or to provide minimum allotments to States under subsection 
(a)(2)(B), the Commissioner shall proportionately reduce the allotments 
of the remaining States under subsection (a)(1)(A), with such 
adjustments as may be necessary to prevent the allotment of any such 
remaining State from being reduced to less than the amount required by 
subsection (a)(1)(B).
    ``(c) Reallotment.--Whenever the Commissioner determines that any 
amount of an allotment to a State for any fiscal year will not be 
expended by such State in carrying out the provisions of this part, the 
Commissioner shall make such amount available for carrying out the 
provisions of this part to one or more of the States that the 
Commissioner determines will be able to use additional amounts during 
such year for carrying out such provisions. Any amount made available 
to a State for any fiscal year pursuant to the preceding sentence 
shall, for the purposes of this section, be regarded as an increase in 
the allotment of the State (as determined under the preceding 
provisions of this section) for such year.

``SEC. 712. PAYMENTS TO STATES FROM ALLOTMENTS.

    ``(a) Payments.--From the allotment of each State for a fiscal year 
under section 711, the State shall be paid the Federal share of the 
expenditures incurred during such year under its State plan approved 
under section 706. Such payments may be made (after necessary 
adjustments on account of previously made overpayments or 
underpayments) in advance or by way of reimbursement, and in such 
installments and on such conditions as the Commissioner may determine.
    ``(b) Federal Share.--
        ``(1) In general.--The Federal share with respect to any State 
    for any fiscal year shall be 90 percent of the expenditures 
    incurred by the State during such year under its State plan 
    approved under section 706.
        ``(2) Non-federal share.--The non-Federal share of the cost of 
    any project that receives assistance through an allotment under 
    this part may be provided in cash or in kind, fairly evaluated, 
    including plant, equipment, or services.

``SEC. 713. AUTHORIZED USES OF FUNDS.

    ``The State may use funds received under this part to provide the 
resources described in section 705(e), relating to the Statewide 
Independent Living Council, and may use funds received under this 
part--
        ``(1) to provide independent living services to individuals 
    with significant disabilities;
        ``(2) to demonstrate ways to expand and improve independent 
    living services;
        ``(3) to support the operation of centers for independent 
    living that are in compliance with the standards and assurances set 
    forth in subsections (b) and (c) of section 725;
        ``(4) to support activities to increase the capacities of 
    public or nonprofit agencies and organizations and other entities 
    to develop comprehensive approaches or systems for providing 
    independent living services;
        ``(5) to conduct studies and analyses, gather information, 
    develop model policies and procedures, and present information, 
    approaches, strategies, findings, conclusions, and recommendations 
    to Federal, State, and local policymakers in order to enhance 
    independent living services for individuals with disabilities;
        ``(6) to train individuals with disabilities and individuals 
    providing services to individuals with disabilities and other 
    persons regarding the independent living philosophy; and
        ``(7) to provide outreach to populations that are unserved or 
    underserved by programs under this title, including minority groups 
    and urban and rural populations.

``SEC. 714. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
such sums as may be necessary for each of the fiscal years 1999 through 
2003.

                ``PART C--CENTERS FOR INDEPENDENT LIVING

``SEC. 721. PROGRAM AUTHORIZATION.

    ``(a) In General.--From the funds appropriated for fiscal year 1999 
and for each subsequent fiscal year to carry out this part, the 
Commissioner shall allot such sums as may be necessary to States and 
other entities in accordance with subsections (b) through (d).
    ``(b) Training.--
        ``(1) Grants; contracts; other arrangements.--For any fiscal 
    year in which the funds appropriated to carry out this part exceed 
    the funds appropriated to carry out this part for fiscal year 1993, 
    the Commissioner shall first reserve from such excess, to provide 
    training and technical assistance to eligible agencies, centers for 
    independent living, and Statewide Independent Living Councils for 
    such fiscal year, not less than 1.8 percent, and not more than 2 
    percent, of the funds appropriated to carry out this part for the 
    fiscal year involved.
        ``(2) Allocation.--From the funds reserved under paragraph (1), 
    the Commissioner shall make grants to, and enter into contracts and 
    other arrangements with, entities that have experience in the 
    operation of centers for independent living to provide such 
    training and technical assistance with respect to planning, 
    developing, conducting, administering, and evaluating centers for 
    independent living.
        ``(3) Funding priorities.--The Commissioner shall conduct a 
    survey of Statewide Independent Living Councils and centers for 
    independent living regarding training and technical assistance 
    needs in order to determine funding priorities for such grants, 
    contracts, and other arrangements.
        ``(4) Review.--To be eligible to receive a grant or enter into 
    a contract or other arrangement under this subsection, such an 
    entity shall submit an application to the Commissioner at such 
    time, in such manner, and containing a proposal to provide such 
    training and technical assistance, and containing such additional 
    information as the Commissioner may require. The Commissioner shall 
    provide for peer review of grant applications by panels that 
    include persons who are not government employees and who have 
    experience in the operation of centers for independent living.
        ``(5) Prohibition on combined funds.--No funds reserved by the 
    Commissioner under this subsection may be combined with funds 
    appropriated under any other Act or part of this Act if the purpose 
    of combining funds is to make a single discretionary grant or a 
    single discretionary payment, unless such funds appropriated under 
    this chapter are separately identified in such grant or payment and 
    are used for the purposes of this chapter.
    ``(c) In General.--
        ``(1) States.--
            ``(A) Population basis.--After the reservation required by 
        subsection (b) has been made, and except as provided in 
        subparagraphs (B) and (C), from the remainder of the amounts 
        appropriated for each such fiscal year to carry out this part, 
        the Commissioner shall make an allotment to each State whose 
        State plan has been approved under section 706 of an amount 
        bearing the same ratio to such remainder as the population of 
        the State bears to the population of all States.
            ``(B) Maintenance of 1992 amounts.--Subject to the 
        availability of appropriations to carry out this part, the 
        amount of any allotment made under subparagraph (A) to a State 
        for a fiscal year shall not be less than the amount of 
        financial assistance received by centers for independent living 
        in the State for fiscal year 1992 under part B of this title, 
        as in effect on the day before the date of enactment of the 
        Rehabilitation Act Amendments of 1992.
            ``(C) Minimums.--Subject to the availability of 
        appropriations to carry out this part and except as provided in 
        subparagraph (B), for a fiscal year in which the amounts 
        appropriated to carry out this part exceed the amounts 
        appropriated for fiscal year 1992 to carry out part B of this 
        title, as in effect on the day before the date of enactment of 
        the Rehabilitation Act Amendments of 1992--
                ``(i) if such excess is not less than $8,000,000, the 
            allotment to any State under subparagraph (A) shall be not 
            less than $450,000 or \1/3\ of 1 percent of the sums made 
            available for the fiscal year for which the allotment is 
            made, whichever is greater, and the allotment of any State 
            under this section for any fiscal year that is less than 
            $450,000 or \1/3\ of 1 percent of such sums shall be 
            increased to the greater of the 2 amounts;
                ``(ii) if such excess is not less than $4,000,000 and 
            is less than $8,000,000, the allotment to any State under 
            subparagraph (A) shall be not less than $400,000 or \1/3\ 
            of 1 percent of the sums made available for the fiscal year 
            for which the allotment is made, whichever is greater, and 
            the allotment of any State under this section for any 
            fiscal year that is less than $400,000 or \1/3\ of 1 
            percent of such sums shall be increased to the greater of 
            the 2 amounts; and
                ``(iii) if such excess is less than $4,000,000, the 
            allotment to any State under subparagraph (A) shall 
            approach, as nearly as possible, the greater of the 2 
            amounts described in clause (ii).
        ``(2) Certain territories.--
            ``(A) In general.--For the purposes of paragraph (1)(C), 
        Guam, American Samoa, the United States Virgin Islands, and the 
        Commonwealth of the Northern Mariana Islands shall not be 
        considered to be States.
            ``(B) Allotment.--Each jurisdiction described in 
        subparagraph (A) shall be allotted under paragraph (1)(A) not 
        less than \1/8\ of 1 percent of the remainder for the fiscal 
        year for which the allotment is made.
        ``(3) Adjustment for inflation.--For any fiscal year, beginning 
    in fiscal year 1999, in which the total amount appropriated to 
    carry out this part exceeds the total amount appropriated to carry 
    out this part for the preceding fiscal year, the Commissioner shall 
    increase the minimum allotment under paragraph (1)(C) by a 
    percentage that shall not exceed the percentage increase in the 
    total amount appropriated to carry out this part between the 
    preceding fiscal year and the fiscal year involved.
        ``(4) Proportional reduction.--To provide allotments to States 
    in accordance with paragraph (1)(B), to provide minimum allotments 
    to States (as increased under paragraph (3)) under paragraph 
    (1)(C), or to provide minimum allotments to States under paragraph 
    (2)(B), the Commissioner shall proportionately reduce the 
    allotments of the remaining States under paragraph (1)(A), with 
    such adjustments as may be necessary to prevent the allotment of 
    any such remaining State from being reduced to less than the amount 
    required by paragraph (1)(B).
    ``(d) Reallotment.--Whenever the Commissioner determines that any 
amount of an allotment to a State for any fiscal year will not be 
expended by such State for carrying out the provisions of this part, 
the Commissioner shall make such amount available for carrying out the 
provisions of this part to one or more of the States that the 
Commissioner determines will be able to use additional amounts during 
such year for carrying out such provisions. Any amount made available 
to a State for any fiscal year pursuant to the preceding sentence 
shall, for the purposes of this section, be regarded as an increase in 
the allotment of the State (as determined under the preceding 
provisions of this section) for such year.

``SEC. 722. GRANTS TO CENTERS FOR INDEPENDENT LIVING IN STATES IN WHICH 
              FEDERAL FUNDING EXCEEDS STATE FUNDING.

    ``(a) Establishment.--
        ``(1) In general.--Unless the director of a designated State 
    unit awards grants under section 723 to eligible agencies in a 
    State for a fiscal year, the Commissioner shall award grants under 
    this section to such eligible agencies for such fiscal year from 
    the amount of funds allotted to the State under subsection (c) or 
    (d) of section 721 for such year.
        ``(2) Grants.--The Commissioner shall award such grants, from 
    the amount of funds so allotted, to such eligible agencies for the 
    planning, conduct, administration, and evaluation of centers for 
    independent living that comply with the standards and assurances 
    set forth in section 725.
    ``(b) Eligible Agencies.--In any State in which the Commissioner 
has approved the State plan required by section 704, the Commissioner 
may make a grant under this section to any eligible agency that--
        ``(1) has the power and authority to carry out the purpose of 
    this part and perform the functions set forth in section 725 within 
    a community and to receive and administer funds under this part, 
    funds and contributions from private or public sources that may be 
    used in support of a center for independent living, and funds from 
    other public and private programs;
        ``(2) is determined by the Commissioner to be able to plan, 
    conduct, administer, and evaluate a center for independent living 
    consistent with the standards and assurances set forth in section 
    725; and
        ``(3) submits an application to the Commissioner at such time, 
    in such manner, and containing such information as the Commissioner 
    may require.
    ``(c) Existing Eligible Agencies.--In the administration of the 
provisions of this section, the Commissioner shall award grants to any 
eligible agency that has been awarded a grant under this part by 
September 30, 1997, unless the Commissioner makes a finding that the 
agency involved fails to meet program and fiscal standards and 
assurances set forth in section 725.
    ``(d) New Centers for Independent Living.--
        ``(1) In general.--If there is no center for independent living 
    serving a region of the State or a region is underserved, and the 
    increase in the allotment of the State is sufficient to support an 
    additional center for independent living in the State, the 
    Commissioner may award a grant under this section to the most 
    qualified applicant proposing to serve such region, consistent with 
    the provisions in the State plan setting forth the design of the 
    State for establishing a statewide network of centers for 
    independent living.
        ``(2) Selection.--In selecting from among applicants for a 
    grant under this section for a new center for independent living, 
    the Commissioner--
            ``(A) shall consider comments regarding the application, if 
        any, by the Statewide Independent Living Council in the State 
        in which the applicant is located;
            ``(B) shall consider the ability of each such applicant to 
        operate a center for independent living based on--
                ``(i) evidence of the need for such a center;
                ``(ii) any past performance of such applicant in 
            providing services comparable to independent living 
            services;
                ``(iii) the plan for satisfying or demonstrated success 
            in satisfying the standards and the assurances set forth in 
            section 725;
                ``(iv) the quality of key personnel and the involvement 
            of individuals with significant disabilities;
                ``(v) budgets and cost-effectiveness;
                ``(vi) an evaluation plan; and
                ``(vii) the ability of such applicant to carry out the 
            plans; and
            ``(C) shall give priority to applications from applicants 
        proposing to serve geographic areas within each State that are 
        currently unserved or underserved by independent living 
        programs, consistent with the provisions of the State plan 
        submitted under section 704 regarding establishment of a 
        statewide network of centers for independent living.
        ``(3) Current centers.--Notwithstanding paragraphs (1) and (2), 
    a center for independent living that receives assistance under part 
    B for a fiscal year shall be eligible for a grant for the 
    subsequent fiscal year under this subsection.
    ``(e) Order of Priorities.--The Commissioner shall be guided by the 
following order of priorities in allocating funds among centers for 
independent living within a State, to the extent funds are available:
        ``(1) The Commissioner shall support existing centers for 
    independent living, as described in subsection (c), that comply 
    with the standards and assurances set forth in section 725, at the 
    level of funding for the previous year.
        ``(2) The Commissioner shall provide for a cost-of-living 
    increase for such existing centers for independent living.
        ``(3) The Commissioner shall fund new centers for independent 
    living, as described in subsection (d), that comply with the 
    standards and assurances set forth in section 725.
    ``(f) Nonresidential Agencies.--A center that provides or manages 
residential housing after October 1, 1994, shall not be considered to 
be an eligible agency under this section.
    ``(g) Review.--
        ``(1) In general.--The Commissioner shall periodically review 
    each center receiving funds under this section to determine whether 
    such center is in compliance with the standards and assurances set 
    forth in section 725. If the Commissioner determines that any 
    center receiving funds under this section is not in compliance with 
    the standards and assurances set forth in section 725, the 
    Commissioner shall immediately notify such center that it is out of 
    compliance.
        ``(2) Enforcement.--The Commissioner shall terminate all funds 
    under this section to such center 90 days after the date of such 
    notification unless the center submits a plan to achieve compliance 
    within 90 days of such notification and such plan is approved by 
    the Commissioner.

``SEC. 723. GRANTS TO CENTERS FOR INDEPENDENT LIVING IN STATES IN WHICH 
              STATE FUNDING EQUALS OR EXCEEDS FEDERAL FUNDING.

    ``(a) Establishment.--
        ``(1) In general.--
            ``(A) Initial year.--
                ``(i) Determination.--The director of a designated 
            State unit, as provided in paragraph (2), or the 
            Commissioner, as provided in paragraph (3), shall award 
            grants under this section for an initial fiscal year if the 
            Commissioner determines that the amount of State funds that 
            were earmarked by a State for a preceding fiscal year to 
            support the general operation of centers for independent 
            living meeting the requirements of this part equaled or 
            exceeded the amount of funds allotted to the State under 
            subsection (c) or (d) of section 721 for such year.
                ``(ii) Grants.--The director or the Commissioner, as 
            appropriate, shall award such grants, from the amount of 
            funds so allotted for the initial fiscal year, to eligible 
            agencies in the State for the planning, conduct, 
            administration, and evaluation of centers for independent 
            living that comply with the standards and assurances set 
            forth in section 725.
                ``(iii) Regulation.--The Commissioner shall by 
            regulation specify the preceding fiscal year with respect 
            to which the Commissioner will make the determinations 
            described in clause (i) and subparagraph (B), making such 
            adjustments as may be necessary to accommodate State 
            funding cycles such as 2-year funding cycles or State 
            fiscal years that do not coincide with the Federal fiscal 
            year.
            ``(B) Subsequent years.--For each year subsequent to the 
        initial fiscal year described in subparagraph (A), the director 
        of the designated State unit shall continue to have the 
        authority to award such grants under this section if the 
        Commissioner determines that the State continues to earmark the 
        amount of State funds described in subparagraph (A)(i). If the 
        State does not continue to earmark such an amount for a fiscal 
        year, the State shall be ineligible to make grants under this 
        section after a final year following such fiscal year, as 
        defined in accordance with regulations established by the 
        Commissioner, and for each subsequent fiscal year.
        ``(2) Grants by designated state units.--In order for the 
    designated State unit to be eligible to award the grants described 
    in paragraph (1) and carry out this section for a fiscal year with 
    respect to a State, the designated State agency shall submit an 
    application to the Commissioner at such time, and in such manner as 
    the Commissioner may require, including information about the 
    amount of State funds described in paragraph (1) for the preceding 
    fiscal year. If the Commissioner makes a determination described in 
    subparagraph (A)(i) or (B), as appropriate, of paragraph (1), the 
    Commissioner shall approve the application and designate the 
    director of the designated State unit to award the grant and carry 
    out this section.
        ``(3) Grants by commissioner.--If the designated State agency 
    of a State described in paragraph (1) does not submit and obtain 
    approval of an application under paragraph (2), the Commissioner 
    shall award the grant described in paragraph (1) to eligible 
    agencies in the State in accordance with section 722.
    ``(b) Eligible Agencies.--In any State in which the Commissioner 
has approved the State plan required by section 704, the director of 
the designated State unit may award a grant under this section to any 
eligible agency that--
        ``(1) has the power and authority to carry out the purpose of 
    this part and perform the functions set forth in section 725 within 
    a community and to receive and administer funds under this part, 
    funds and contributions from private or public sources that may be 
    used in support of a center for independent living, and funds from 
    other public and private programs;
        ``(2) is determined by the director to be able to plan, 
    conduct, administer, and evaluate a center for independent living, 
    consistent with the standards and assurances set forth in section 
    725; and
        ``(3) submits an application to the director at such time, in 
    such manner, and containing such information as the head of the 
    designated State unit may require.
    ``(c) Existing Eligible Agencies.--In the administration of the 
provisions of this section, the director of the designated State unit 
shall award grants under this section to any eligible agency that has 
been awarded a grant under this part by September 30, 1997, unless the 
director makes a finding that the agency involved fails to comply with 
the standards and assurances set forth in section 725.
    ``(d) New Centers for Independent Living.--
        ``(1) In general.--If there is no center for independent living 
    serving a region of the State or the region is unserved or 
    underserved, and the increase in the allotment of the State is 
    sufficient to support an additional center for independent living 
    in the State, the director of the designated State unit may award a 
    grant under this section from among eligible agencies, consistent 
    with the provisions of the State plan under section 704 setting 
    forth the design of the State for establishing a statewide network 
    of centers for independent living.
        ``(2) Selection.--In selecting from among eligible agencies in 
    awarding a grant under this part for a new center for independent 
    living--
            ``(A) the director of the designated State unit and the 
        chairperson of, or other individual designated by, the 
        Statewide Independent Living Council acting on behalf of and at 
        the direction of the Council, shall jointly appoint a peer 
        review committee that shall rank applications in accordance 
        with the standards and assurances set forth in section 725 and 
        criteria jointly established by such director and such 
        chairperson or individual;
            ``(B) the peer review committee shall consider the ability 
        of each such applicant to operate a center for independent 
        living, and shall recommend an applicant to receive a grant 
        under this section, based on--
                ``(i) evidence of the need for a center for independent 
            living, consistent with the State plan;
                ``(ii) any past performance of such applicant in 
            providing services comparable to independent living 
            services;
                ``(iii) the plan for complying with, or demonstrated 
            success in complying with, the standards and the assurances 
            set forth in section 725;
                ``(iv) the quality of key personnel of the applicant 
            and the involvement of individuals with significant 
            disabilities by the applicant;
                ``(v) the budgets and cost-effectiveness of the 
            applicant;
                ``(vi) the evaluation plan of the applicant; and
                ``(vii) the ability of such applicant to carry out the 
            plans; and
            ``(C) the director of the designated State unit shall award 
        the grant on the basis of the recommendations of the peer 
        review committee if the actions of the committee are consistent 
        with Federal and State law.
        ``(3) Current centers.--Notwithstanding paragraphs (1) and (2), 
    a center for independent living that receives assistance under part 
    B for a fiscal year shall be eligible for a grant for the 
    subsequent fiscal year under this subsection.
    ``(e) Order of Priorities.--Unless the director of the designated 
State unit and the chairperson of the Council or other individual 
designated by the Council acting on behalf of and at the direction of 
the Council jointly agree on another order of priority, the director 
shall be guided by the following order of priorities in allocating 
funds among centers for independent living within a State, to the 
extent funds are available:
        ``(1) The director of the designated State unit shall support 
    existing centers for independent living, as described in subsection 
    (c), that comply with the standards and assurances set forth in 
    section 725, at the level of funding for the previous year.
        ``(2) The director of the designated State unit shall provide 
    for a cost-of-living increase for such existing centers for 
    independent living.
        ``(3) The director of the designated State unit shall fund new 
    centers for independent living, as described in subsection (d), 
    that comply with the standards and assurances set forth in section 
    725.
    ``(f) Nonresidential Agencies.--A center that provides or manages 
residential housing after October 1, 1994, shall not be considered to 
be an eligible agency under this section.
    ``(g) Review.--
        ``(1) In general.--The director of the designated State unit 
    shall periodically review each center receiving funds under this 
    section to determine whether such center is in compliance with the 
    standards and assurances set forth in section 725. If the director 
    of the designated State unit determines that any center receiving 
    funds under this section is not in compliance with the standards 
    and assurances set forth in section 725, the director of the 
    designated State unit shall immediately notify such center that it 
    is out of compliance.
        ``(2) Enforcement.--The director of the designated State unit 
    shall terminate all funds under this section to such center 90 days 
    after--
            ``(A) the date of such notification; or
            ``(B) in the case of a center that requests an appeal under 
        subsection (i), the date of any final decision under subsection 
        (i),
    unless the center submits a plan to achieve compliance within 90 
    days and such plan is approved by the director, or if appealed, by 
    the Commissioner.
    ``(h) Onsite Compliance Review.--The director of the designated 
State unit shall annually conduct onsite compliance reviews of at least 
15 percent of the centers for independent living that receive funding 
under this section in the State. Each team that conducts onsite 
compliance review of centers for independent living shall include at 
least one person who is not an employee of the designated State agency, 
who has experience in the operation of centers for independent living, 
and who is jointly selected by the director of the designated State 
unit and the chairperson of or other individual designated by the 
Council acting on behalf of and at the direction of the Council. A copy 
of this review shall be provided to the Commissioner.
    ``(i) Adverse Actions.--If the director of the designated State 
unit proposes to take a significant adverse action against a center for 
independent living, the center may seek mediation and conciliation to 
be provided by an individual or individuals who are free of conflicts 
of interest identified by the chairperson of or other individual 
designated by the Council. If the issue is not resolved through the 
mediation and conciliation, the center may appeal the proposed adverse 
action to the Commissioner for a final decision.

``SEC. 724. CENTERS OPERATED BY STATE AGENCIES.

    ``A State that receives assistance for fiscal year 1993 with 
respect to a center in accordance with subsection (a) of this section 
(as in effect on the day before the date of enactment of the 
Rehabilitation Act Amendments of 1998) may continue to receive 
assistance under this part for fiscal year 1994 or a succeeding fiscal 
year if, for such fiscal year--
        ``(1) no nonprofit private agency--
            ``(A) submits an acceptable application to operate a center 
        for independent living for the fiscal year before a date 
        specified by the Commissioner; and
            ``(B) obtains approval of the application under section 722 
        or 723; or
        ``(2) after funding all applications so submitted and approved, 
    the Commissioner determines that funds remain available to provide 
    such assistance.

``SEC. 725. STANDARDS AND ASSURANCES FOR CENTERS FOR INDEPENDENT 
              LIVING.

    ``(a) In General.--Each center for independent living that receives 
assistance under this part shall comply with the standards set out in 
subsection (b) and provide and comply with the assurances set out in 
subsection (c) in order to ensure that all programs and activities 
under this part are planned, conducted, administered, and evaluated in 
a manner consistent with the purposes of this chapter and the objective 
of providing assistance effectively and efficiently.
    ``(b) Standards.--
        ``(1) Philosophy.--The center shall promote and practice the 
    independent living philosophy of--
            ``(A) consumer control of the center regarding 
        decisionmaking, service delivery, management, and establishment 
        of the policy and direction of the center;
            ``(B) self-help and self-advocacy;
            ``(C) development of peer relationships and peer role 
        models; and
            ``(D) equal access of individuals with significant 
        disabilities to society and to all services, programs, 
        activities, resources, and facilities, whether public or 
        private and regardless of the funding source.
        ``(2) Provision of services.--The center shall provide services 
    to individuals with a range of significant disabilities. The center 
    shall provide services on a cross-disability basis (for individuals 
    with all different types of significant disabilities, including 
    individuals with significant disabilities who are members of 
    populations that are unserved or underserved by programs under this 
    title). Eligibility for services at any center for independent 
    living shall be determined by the center, and shall not be based on 
    the presence of any one or more specific significant disabilities.
        ``(3) Independent living goals.--The center shall facilitate 
    the development and achievement of independent living goals 
    selected by individuals with significant disabilities who seek such 
    assistance by the center.
        ``(4) Community options.--The center shall work to increase the 
    availability and improve the quality of community options for 
    independent living in order to facilitate the development and 
    achievement of independent living goals by individuals with 
    significant disabilities.
        ``(5) Independent living core services.--The center shall 
    provide independent living core services and, as appropriate, a 
    combination of any other independent living services.
        ``(6) Activities to increase community capacity.--The center 
    shall conduct activities to increase the capacity of communities 
    within the service area of the center to meet the needs of 
    individuals with significant disabilities.
        ``(7) Resource development activities.--The center shall 
    conduct resource development activities to obtain funding from 
    sources other than this chapter.
    ``(c) Assurances.--The eligible agency shall provide at such time 
and in such manner as the Commissioner may require, such satisfactory 
assurances as the Commissioner may require, including satisfactory 
assurances that--
        ``(1) the applicant is an eligible agency;
        ``(2) the center will be designed and operated within local 
    communities by individuals with disabilities, including an 
    assurance that the center will have a Board that is the principal 
    governing body of the center and a majority of which shall be 
    composed of individuals with significant disabilities;
        ``(3) the applicant will comply with the standards set forth in 
    subsection (b);
        ``(4) the applicant will establish clear priorities through 
    annual and 3-year program and financial planning objectives for the 
    center, including overall goals or a mission for the center, a work 
    plan for achieving the goals or mission, specific objectives, 
    service priorities, and types of services to be provided, and a 
    description that shall demonstrate how the proposed activities of 
    the applicant are consistent with the most recent 3-year State plan 
    under section 704;
        ``(5) the applicant will use sound organizational and personnel 
    assignment practices, including taking affirmative action to employ 
    and advance in employment qualified individuals with significant 
    disabilities on the same terms and conditions required with respect 
    to the employment of individuals with disabilities under section 
    503;
        ``(6) the applicant will ensure that the majority of the staff, 
    and individuals in decisionmaking positions, of the applicant are 
    individuals with disabilities;
        ``(7) the applicant will practice sound fiscal management, 
    including making arrangements for an annual independent fiscal 
    audit, notwithstanding section 7502(a)(2)(A) of title 31, United 
    States Code;
        ``(8) the applicant will conduct annual self-evaluations, 
    prepare an annual report, and maintain records adequate to measure 
    performance with respect to the standards, containing information 
    regarding, at a minimum--
            ``(A) the extent to which the center is in compliance with 
        the standards;
            ``(B) the number and types of individuals with significant 
        disabilities receiving services through the center;
            ``(C) the types of services provided through the center and 
        the number of individuals with significant disabilities 
        receiving each type of service;
            ``(D) the sources and amounts of funding for the operation 
        of the center;
            ``(E) the number of individuals with significant 
        disabilities who are employed by, and the number who are in 
        management and decisionmaking positions in, the center; and
            ``(F) a comparison, when appropriate, of the activities of 
        the center in prior years with the activities of the center in 
        the most recent year;
        ``(9) individuals with significant disabilities who are seeking 
    or receiving services at the center will be notified by the center 
    of the existence of, the availability of, and how to contact, the 
    client assistance program;
        ``(10) aggressive outreach regarding services provided through 
    the center will be conducted in an effort to reach populations of 
    individuals with significant disabilities that are unserved or 
    underserved by programs under this title, especially minority 
    groups and urban and rural populations;
        ``(11) staff at centers for independent living will receive 
    training on how to serve such unserved and underserved populations, 
    including minority groups and urban and rural populations;
        ``(12) the center will submit to the Statewide Independent 
    Living Council a copy of its approved grant application and the 
    annual report required under paragraph (8);
        ``(13) the center will prepare and submit a report to the 
    designated State unit or the Commissioner, as the case may be, at 
    the end of each fiscal year that contains the information described 
    in paragraph (8) and information regarding the extent to which the 
    center is in compliance with the standards set forth in subsection 
    (b); and
        ``(14) an independent living plan described in section 704(e) 
    will be developed unless the individual who would receive services 
    under the plan signs a waiver stating that such a plan is 
    unnecessary.

``SEC. 726. DEFINITIONS.

    ``As used in this part, the term `eligible agency' means a 
consumer-controlled, community-based, cross-disability, nonresidential 
private nonprofit agency.

``SEC. 727. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
such sums as may be necessary for each of the fiscal years 1999 through 
2003.

``CHAPTER 2--INDEPENDENT LIVING SERVICES FOR OLDER INDIVIDUALS WHO ARE 
                                 BLIND

``SEC. 751. DEFINITION.

    ``For purposes of this chapter, the term `older individual who is 
blind' means an individual age 55 or older whose significant visual 
impairment makes competitive employment extremely difficult to attain 
but for whom independent living goals are feasible.

``SEC. 752. PROGRAM OF GRANTS.

    ``(a) In General.--
        ``(1) Authority for grants.--Subject to subsections (b) and 
    (c), the Commissioner may make grants to States for the purpose of 
    providing the services described in subsection (d) to older 
    individuals who are blind.
        ``(2) Designated state agency.--The Commissioner may not make a 
    grant under subsection (a) unless the State involved agrees that 
    the grant will be administered solely by the agency described in 
    section 101(a)(2)(A)(i).
    ``(b) Contingent Competitive Grants.--Beginning with fiscal year 
1993, in the case of any fiscal year for which the amount appropriated 
under section 753 is less than $13,000,000, grants made under 
subsection (a) shall be--
        ``(1) discretionary grants made on a competitive basis to 
    States; or
        ``(2) grants made on a noncompetitive basis to pay for the 
    continuation costs of activities for which a grant was awarded--
            ``(A) under this chapter; or
            ``(B) under part C, as in effect on the day before the date 
        of enactment of the Rehabilitation Act Amendments of 1992.
    ``(c) Contingent Formula Grants.--
        ``(1) In general.--In the case of any fiscal year for which the 
    amount appropriated under section 753 is equal to or greater than 
    $13,000,000, grants under subsection (a) shall be made only to 
    States and shall be made only from allotments under paragraph (2).
        ``(2) Allotments.--For grants under subsection (a) for a fiscal 
    year described in paragraph (1), the Commissioner shall make an 
    allotment to each State in an amount determined in accordance with 
    subsection (j), and shall make a grant to the State of the 
    allotment made for the State if the State submits to the 
    Commissioner an application in accordance with subsection (i).
    ``(d) Services Generally.--The Commissioner may not make a grant 
under subsection (a) unless the State involved agrees that the grant 
will be expended only for purposes of--
        ``(1) providing independent living services to older 
    individuals who are blind;
        ``(2) conducting activities that will improve or expand 
    services for such individuals; and
        ``(3) conducting activities to help improve public 
    understanding of the problems of such individuals.
    ``(e) Independent Living Services.--Independent living services for 
purposes of subsection (d)(1) include--
        ``(1) services to help correct blindness, such as--
            ``(A) outreach services;
            ``(B) visual screening;
            ``(C) surgical or therapeutic treatment to prevent, 
        correct, or modify disabling eye conditions; and
            ``(D) hospitalization related to such services;
        ``(2) the provision of eyeglasses and other visual aids;
        ``(3) the provision of services and equipment to assist an 
    older individual who is blind to become more mobile and more self-
    sufficient;
        ``(4) mobility training, braille instruction, and other 
    services and equipment to help an older individual who is blind 
    adjust to blindness;
        ``(5) guide services, reader services, and transportation;
        ``(6) any other appropriate service designed to assist an older 
    individual who is blind in coping with daily living activities, 
    including supportive services and rehabilitation teaching services;
        ``(7) independent living skills training, information and 
    referral services, peer counseling, and individual advocacy 
    training; and
        ``(8) other independent living services.
    ``(f) Matching Funds.--
        ``(1) In general.--The Commissioner may not make a grant under 
    subsection (a) unless the State involved agrees, with respect to 
    the costs of the program to be carried out by the State pursuant to 
    such subsection, to make available (directly or through donations 
    from public or private entities) non-Federal contributions toward 
    such costs in an amount that is not less than $1 for each $9 of 
    Federal funds provided in the grant.
        ``(2) Determination of amount contributed.--Non-Federal 
    contributions required in paragraph (1) may be in cash or in kind, 
    fairly evaluated, including plant, equipment, or services. Amounts 
    provided by the Federal Government, or services assisted or 
    subsidized to any significant extent by the Federal Government, may 
    not be included in determining the amount of such non-Federal 
    contributions.
    ``(g) Certain Expenditures of Grants.--A State may expend a grant 
under subsection (a) to carry out the purposes specified in subsection 
(d) through grants to public and nonprofit private agencies or 
organizations.
    ``(h) Requirement Regarding State Plan.--The Commissioner may not 
make a grant under subsection (a) unless the State involved agrees 
that, in carrying out subsection (d)(1), the State will seek to 
incorporate into the State plan under section 704 any new methods and 
approaches relating to independent living services for older 
individuals who are blind.
    ``(i) Application for Grant.--
        ``(1) In general.--The Commissioner may not make a grant under 
    subsection (a) unless an application for the grant is submitted to 
    the Commissioner and the application is in such form, is made in 
    such manner, and contains such agreements, assurances, and 
    information as the Commissioner determines to be necessary to carry 
    out this section (including agreements, assurances, and information 
    with respect to any grants under subsection (j)(4)).
        ``(2) Contents.--An application for a grant under this section 
    shall contain--
            ``(A) an assurance that the agency described in subsection 
        (a)(2) will prepare and submit to the Commissioner a report, at 
        the end of each fiscal year, with respect to each project or 
        program the agency operates or administers under this section, 
        whether directly or through a grant or contract, which report 
        shall contain, at a minimum, information on--
                ``(i) the number and types of older individuals who are 
            blind and are receiving services;
                ``(ii) the types of services provided and the number of 
            older individuals who are blind and are receiving each type 
            of service;
                ``(iii) the sources and amounts of funding for the 
            operation of each project or program;
                ``(iv) the amounts and percentages of resources 
            committed to each type of service provided;
                ``(v) data on actions taken to employ, and advance in 
            employment, qualified individuals with significant 
            disabilities, including older individuals who are blind; 
            and
                ``(vi) a comparison, if appropriate, of prior year 
            activities with the activities of the most recent year;
            ``(B) an assurance that the agency will--
                ``(i) provide services that contribute to the 
            maintenance of, or the increased independence of, older 
            individuals who are blind; and
                ``(ii) engage in--

                    ``(I) capacity-building activities, including 
                collaboration with other agencies and organizations;
                    ``(II) activities to promote community awareness, 
                involvement, and assistance; and
                    ``(III) outreach efforts; and

            ``(C) an assurance that the application is consistent with 
        the State plan for providing independent living services 
        required by section 704.
    ``(j) Amount of Formula Grant.--
        ``(1) In general.--Subject to the availability of 
    appropriations, the amount of an allotment under subsection (a) for 
    a State for a fiscal year shall be the greater of--
            ``(A) the amount determined under paragraph (2); or
            ``(B) the amount determined under paragraph (3).
        ``(2) Minimum allotment.--
            ``(A) States.--In the case of the several States, the 
        District of Columbia, and the Commonwealth of Puerto Rico, the 
        amount referred to in subparagraph (A) of paragraph (1) for a 
        fiscal year is the greater of--
                ``(i) $225,000; or
                ``(ii) an amount equal to \1/3\ of 1 percent of the 
            amount appropriated under section 753 for the fiscal year 
            and available for allotments under subsection (a).
            ``(B) Certain territories.--In the case of Guam, American 
        Samoa, the United States Virgin Islands, and the Commonwealth 
        of the Northern Mariana Islands, the amount referred to in 
        subparagraph (A) of paragraph (1) for a fiscal year is $40,000.
        ``(3) Formula.--The amount referred to in subparagraph (B) of 
    paragraph (1) for a State for a fiscal year is the product of--
            ``(A) the amount appropriated under section 753 and 
        available for allotments under subsection (a); and
            ``(B) a percentage equal to the quotient of--
                ``(i) an amount equal to the number of individuals 
            residing in the State who are not less than 55 years of 
            age; divided by
                ``(ii) an amount equal to the number of individuals 
            residing in the United States who are not less than 55 
            years of age.
        ``(4) Disposition of certain amounts.--
            ``(A) Grants.--From the amounts specified in subparagraph 
        (B), the Commissioner may make grants to States whose 
        population of older individuals who are blind has a substantial 
        need for the services specified in subsection (d) relative to 
        the populations in other States of older individuals who are 
        blind.
            ``(B) Amounts.--The amounts referred to in subparagraph (A) 
        are any amounts that are not paid to States under subsection 
        (a) as a result of--
                ``(i) the failure of any State to submit an application 
            under subsection (i);
                ``(ii) the failure of any State to prepare within a 
            reasonable period of time such application in compliance 
            with such subsection; or
                ``(iii) any State informing the Commissioner that the 
            State does not intend to expend the full amount of the 
            allotment made for the State under subsection (a).
            ``(C) Conditions.--The Commissioner may not make a grant 
        under subparagraph (A) unless the State involved agrees that 
        the grant is subject to the same conditions as grants made 
        under subsection (a).

``SEC. 753. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this chapter 
such sums as may be necessary for each of the fiscal years 1999 through 
2003.''.

SEC. 411. REPEAL.

    Title VIII of the Rehabilitation Act of 1973 (29 U.S.C. 797 et 
seq.) is repealed.

SEC. 412. HELEN KELLER NATIONAL CENTER ACT.

    (a) General Authorization of Appropriations.--The first sentence of 
section 205(a) of the Helen Keller National Center Act (29 U.S.C. 
1904(a)) is amended by striking ``1993 through 1997'' and inserting 
``1999 through 2003''.
    (b) Helen Keller National Center Federal Endowment Fund.--The first 
sentence of section 208(h) of such Act (29 U.S.C. 1907(h)) is amended 
by striking ``1993 through 1997'' and inserting ``1999 through 2003''.
    (c) Registry.--Such Act (29 U.S.C. 1901 et seq.) is amended by 
adding at the end the following:

``SEC. 209. REGISTRY.

    ``(a) In General.--To assist the Center in providing services to 
individuals who are deaf-blind, the Center may establish and maintain 
registries of such individuals in each of the regional field offices of 
the network of the Center.
    ``(b) Voluntary Provision of Information.--No individual who is 
deaf-blind may be required to provide information to the Center for any 
purpose with respect to a registry established under subsection (a).
    ``(c) Nondisclosure.--The Center (including the network of the 
Center) may not disclose information contained in a registry 
established under subsection (a) to any individual or organization that 
is not affiliated with the Center, unless the individual to whom the 
information relates provides specific written authorization for the 
Center to disclose the information.
    ``(d) Privacy Rights.--The requirements of section 552a of title 5, 
United States Code (commonly known as the `Privacy Act of 1974') shall 
apply to personally identifiable information contained in the 
registries established by the Center under subsection (a), in the same 
manner and to the same extent as such requirements apply to a record of 
an agency.
    ``(e) Removal of Information.--On the request of an individual, the 
Center shall remove all information relating to the individual from any 
registry established under subsection (a).''.

SEC. 413. PRESIDENT'S COMMITTEE ON EMPLOYMENT OF PEOPLE WITH 
              DISABILITIES.

    Section 2(2) of the joint resolution approved July 11, 1949 (63 
Stat. 409, chapter 302; 36 U.S.C. 155b(2)) is amended by inserting 
``solicit,'' before ``accept,''.

SEC. 414. CONFORMING AMENDMENTS.

    (a) Randolph-Sheppard Act.--Section 2(e) of the Act of June 20, 
1936 (commonly known as the ``Randolph-Sheppard Act'') (49 Stat. 1559, 
chapter 638; 20 U.S.C. 107a(e)) is amended by striking ``section 
101(a)(1)(A)'' and inserting ``section 101(a)(2)(A)''.
    (b) Technology-Related Assistance for Individuals With Disabilities 
Act of 1988.--
        (1) Section 101(b) of the Technology-Related Assistance for 
    Individuals With Disabilities Act of 1988 (29 U.S.C. 2211(b)) is 
    amended--
            (A) in paragraph (7)(A)(ii)(II), by striking 
        ``individualized written rehabilitation program'' and inserting 
        ``individualized plan for employment''; and
            (B) in paragraph (9)(B), by striking ``(as defined in 
        section 7(25) of such Act (29 U.S.C. 706(25)))'' and inserting 
        ``(as defined in section 7 of such Act)''.
        (2) Section 102(e)(23)(A) of such Act (29 U.S.C. 
    2212(e)(23)(A)) is amended by striking ``the assurance provided by 
    the State in accordance with section 101(a)(36) of the 
    Rehabilitation Act of 1973 (29 U.S.C. 721(a)(36))'' and inserting 
    ``the portion of the State plan provided by the State in accordance 
    with section 101(a)(21) of the Rehabilitation Act of 1973''.
    (c) Title 38, United States Code.--Sections 3904(b) and 7303(b) of 
title 38, United States Code, are amended by striking ``section 
204(b)(2) of the Rehabilitation Act of 1973 (29 U.S.C. 762(b)(2)) 
(relating to the establishment and support of Rehabilitation 
Engineering Research Centers)'' and inserting ``section 204(b)(3) of 
the Rehabilitation Act of 1973 (relating to the establishment and 
support of Rehabilitation Engineering Research Centers)''.
    (d) National School Lunch Act.--Section 27(a)(1)(B) of the National 
School Lunch Act (42 U.S.C. 1769h(a)(1)(B)) is amended by striking 
``section 7(8) of the Rehabilitation Act of 1973 (29 U.S.C. 706(8))'' 
and inserting ``section 7 of the Rehabilitation Act of 1973''.
    (e) Domestic Volunteer Service Act of 1973.--Section 421(11) of the 
Domestic Volunteer Service Act of 1973 (42 U.S.C. 5061(11)) is amended 
by striking ``section 7(8)(B) of the Rehabilitation Act of 1973 (29 
U.S.C. 706(8)(B))'' and inserting ``section 7(20)(B) of the 
Rehabilitation Act of 1973''.
    (f) Energy Conservation and Production Act.--Section 412(5) of the 
Energy Conservation and Production Act (42 U.S.C. 6862(5)) is amended 
by striking ``a handicapped individual as defined in section 7(7) of 
the Rehabilitation Act of 1973'' and inserting ``an individual with a 
disability, as defined in section 7 of the Rehabilitation Act of 
1973''.
    (g) National and Community Service Act of 1990.--Section 101(12) of 
the National and Community Service Act of 1990 (42 U.S.C. 12511(12)) is 
amended by striking ``section 7(8)(B) of the Rehabilitation Act of 1973 
(29 U.S.C. 706(8)(B))'' and inserting ``section 7(20)(B) of the 
Rehabilitation Act of 1973''.

                      TITLE V--GENERAL PROVISIONS

SEC. 501. STATE UNIFIED PLAN.

    (a) Definition of Appropriate Secretary.--In this section, the term 
``appropriate Secretary'' means the head of the Federal agency who 
exercises administrative authority over an activity or program 
described in subsection (b).
    (b) State Unified Plan.--
        (1) In general.--A State may develop and submit to the 
    appropriate Secretaries a State unified plan for 2 or more of the 
    activities or programs set forth in paragraph (2), except that the 
    State may include in the plan the activities described in paragraph 
    (2)(A) only with the prior approval of the legislature of the 
    State. The State unified plan shall cover one or more of the 
    activities set forth in subparagraphs (A) through (D) of paragraph 
    (2) and may cover one or more of the activities set forth in 
    subparagraphs (E) through (O) of paragraph (2).
        (2) Activities.--The activities and programs referred to in 
    paragraph (1) are as follows:
            (A) Secondary vocational education programs authorized 
        under the Carl D. Perkins Vocational and Applied Technology 
        Education Act (20 U.S.C. 2301 et seq.).
            (B) Postsecondary vocational education programs authorized 
        under the Carl D. Perkins Vocational and Applied Technology 
        Education Act (20 U.S.C. 2301 et seq.).
            (C) Activities authorized under title I.
            (D) Activities authorized under title II.
            (E) Programs authorized under section 6(d) of the Food 
        Stamp Act of 1977 (7 U.S.C. 2015(d)).
            (F) Work programs authorized under section 6(o) of the Food 
        Stamp Act of 1977 (7 U.S.C. 2015(o)).
            (G) Activities authorized under chapter 2 of title II of 
        the Trade Act of 1974 (19 U.S.C. 2271 et seq.).
            (H) Programs authorized under the Wagner-Peyser Act (29 
        U.S.C. 49 et seq.).
            (I) Programs authorized under title I of the Rehabilitation 
        Act of 1973 (29 U.S.C. 720 et seq.), other than section 112 of 
        such Act (29 U.S.C. 732).
            (J) Activities authorized under chapter 41 of title 38, 
        United States Code.
            (K) Programs authorized under State unemployment 
        compensation laws (in accordance with applicable Federal law).
            (L) Programs authorized under part A of title IV of the 
        Social Security Act (42 U.S.C. 601 et seq.).
            (M) Programs authorized under title V of the Older 
        Americans Act of 1965 (42 U.S.C. 3056 et seq.).
            (N) Training activities carried out by the Department of 
        Housing and Urban Development.
            (O) Programs authorized under the Community Services Block 
        Grant Act (42 U.S.C. 9901 et seq.).
    (c) Requirements.--
        (1) In general.--The portion of a State unified plan covering 
    an activity or program described in subsection (b) shall be subject 
    to the requirements, if any, applicable to a plan or application 
    for assistance under the Federal statute authorizing the activity 
    or program.
        (2) Additional submission not required.--A State that submits a 
    State unified plan covering an activity or program described in 
    subsection (b) that is approved under subsection (d) shall not be 
    required to submit any other plan or application in order to 
    receive Federal funds to carry out the activity or program.
        (3) Coordination.--A State unified plan shall include--
            (A) a description of the methods used for joint planning 
        and coordination of the programs and activities included in the 
        unified plan; and
            (B) an assurance that the methods included an opportunity 
        for the entities responsible for planning or administering such 
        programs and activities to review and comment on all portions 
        of the unified plan.
    (d) Approval by the Appropriate Secretaries.--
        (1) Jurisdiction.--The appropriate Secretary shall have the 
    authority to approve the portion of the State unified plan relating 
    to the activity or program over which the appropriate Secretary 
    exercises administrative authority. On the approval of the 
    appropriate Secretary, the portion of the plan relating to the 
    activity or program shall be implemented by the State pursuant to 
    the applicable portion of the State unified plan.
        (2) Approval.--
            (A) In general.--A portion of the State unified plan 
        covering an activity or program described in subsection (b) 
        that is submitted to the appropriate Secretary under this 
        section shall be considered to be approved by the appropriate 
        Secretary at the end of the 90-day period beginning on the day 
        the appropriate Secretary receives the portion, unless the 
        appropriate Secretary makes a written determination, during the 
        90-day period, that the portion is not consistent with the 
        requirements of the Federal statute authorizing the activity or 
        program including the criteria for approval of a plan or 
        application, if any, under such statute or the plan is not 
        consistent with the requirements of subsection (c)(3).
            (B) Special rule.--In subparagraph (A), the term ``criteria 
        for approval of a State plan'', relating to activities carried 
        out under title I or II or under the Carl D. Perkins Vocational 
        and Applied Technology Education Act (20 U.S.C. 2301 et seq.), 
        includes a requirement for agreement between the State and the 
        appropriate Secretary regarding State performance measures, 
        including levels of performance.

SEC. 502. DEFINITIONS FOR INDICATORS OF PERFORMANCE.

    (a) In General.--In order to ensure nationwide comparability of 
performance data, the Secretary of Labor and the Secretary of 
Education, after consultation with the representatives described in 
subsection (b), shall issue definitions for indicators of performance 
and levels of performance established under titles I and II.
    (b) Representatives.--The representatives referred to in subsection 
(a) are representatives of States (as defined in section 101) and 
political subdivisions, business and industry, employees, eligible 
providers of employment and training activities (as defined in section 
101), educators, participants in activities carried out under this Act, 
State Directors of adult education, providers of adult education, 
providers of literacy services, individuals with expertise in serving 
the employment and training needs of eligible youth (as defined in 
section 101), parents, and other interested parties, with expertise 
regarding activities authorized under this Act.

SEC. 503. INCENTIVE GRANTS.

    (a) In General.--Beginning on July 1, 2000, the Secretary shall 
award a grant to each State that exceeds the State adjusted levels of 
performance for title I, the expected levels of performance for title 
II, and the levels of performance for programs under Public Law 88-210 
(as amended; 20 U.S.C. 2301 et seq.), for the purpose of carrying out 
an innovative program consistent with the requirements of any one or 
more of the programs within title I, title II, or such Public Law, 
respectively.
    (b) Application.--
        (1) In general.--The Secretary may provide a grant to a State 
    under subsection (a) only if the State submits an application to 
    the Secretary for the grant that meets the requirements of 
    paragraph (2).
        (2) Requirements.--The Secretary may review an application 
    described in paragraph (1) only to ensure that the application 
    contains the following assurances:
            (A) The legislature of the State was consulted with respect 
        to the development of the application.
            (B) The application was approved by the Governor, the 
        eligible agency (as defined in section 203), and the State 
        agency responsible for programs established under Public Law 
        88-210 (as amended; 20 U.S.C. 2301 et seq.).
            (C) The State and the eligible agency, as appropriate, 
        exceeded the State adjusted levels of performance for title I, 
        the expected levels of performance for title II, and the levels 
        of performance for programs under Public Law 88-210 (as 
        amended; 20 U.S.C. 2301 et seq.).
    (c) Amount.--
        (1) Minimum and maximum grant amounts.--Subject to paragraph 
    (2), a grant provided to a State under subsection (a) shall be 
    awarded in an amount that is not less than $750,000 and not more 
    than $3,000,000.
        (2) Proportionate reduction.--If the amount available for 
    grants under this section for a fiscal year is insufficient to 
    award a grant to each State or eligible agency that is eligible for 
    a grant, the Secretary shall reduce the minimum and maximum grant 
    amount by a uniform percentage.

SEC. 504. PRIVACY.

    (a) Section 144 of the General Education Provisions Act.--Nothing 
in this Act shall be construed to supersede the privacy protections 
afforded parents and students under section 444 of the General 
Education Provisions Act (20 U.S.C. 1232g), as added by the Family 
Educational Rights and Privacy Act of 1974 (section 513 of Public Law 
93-380; 88 Stat. 571).
    (b) Prohibition on Development of National Database.--
        (1) In general.--Nothing in this Act shall be construed to 
    permit the development of a national database of personally 
    identifiable information on individuals receiving services under 
    title I of this Act.
        (2) Limitation.--Nothing in paragraph (1) shall be construed to 
    prevent the proper administration of national programs under 
    subtitles C and D of title I of this Act or to carry out program 
    management activities consistent with title I of this Act.

SEC. 505. BUY-AMERICAN REQUIREMENTS.

    (a) Compliance With Buy American Act.--None of the funds made 
available in this Act may be expended by an entity unless the entity 
agrees that in expending the funds the entity will comply with the Buy 
American Act (41 U.S.C. 10a et seq.).
    (b) Sense of the Congress; Requirement Regarding Notice.--
        (1) Purchase of american-made equipment and products.--In the 
    case of any equipment or product that may be authorized to be 
    purchased with financial assistance provided using funds made 
    available under this Act, it is the sense of the Congress that 
    entities receiving the assistance should, in expending the 
    assistance, purchase only American-made equipment and products.
        (2) Notice to recipients of assistance.--In providing financial 
    assistance using funds made available under this Act, the head of 
    each Federal agency shall provide to each recipient of the 
    assistance a notice describing the statement made in paragraph (1) 
    by Congress.
    (c) Prohibition of Contracts With Persons Falsely Labeling Products 
as Made in America.--If it has been finally determined by a court or 
Federal agency that any person intentionally affixed a label bearing a 
``Made in America'' inscription, or any inscription with the same 
meaning, to any product sold in or shipped to the United States that is 
not made in the United States, the person shall be ineligible to 
receive any contract or subcontract made with funds made available in 
this subtitle, pursuant to the debarment, suspension, and ineligibility 
procedures described in sections 9.400 through 9.409 of title 48, Code 
of Federal Regulations, as such sections are in effect on the date of 
enactment of this Act, or pursuant to any successor regulations.

SEC. 506. TRANSITION PROVISIONS.

    (a) Workforce Investment Systems.--The Secretary of Labor shall 
take such actions as the Secretary determines to be appropriate to 
provide for the orderly transition from any authority under the Job 
Training Partnership Act (29 U.S.C. 1501 et seq.) to the workforce 
investment systems established under title I of this Act. Such actions 
shall include the provision of guidance relating to the designation of 
State workforce investment boards, local workforce investment areas, 
and local workforce investment boards described in such title.
    (b) Adult Education and Literacy Programs.--
        (1) In general.--The Secretary of Education shall take such 
    actions as the Secretary determines to be appropriate to provide 
    for the transition from any authority under the Adult Education Act 
    (20 U.S.C. 1201 et seq.) to any authority under the Adult Education 
    and Family Literacy Act (as added by title II of this Act).
        (2) Limitation.--The authority to take actions under paragraph 
    (1) shall apply only for the 1-year period beginning on the date of 
    the enactment of this Act.
    (c) Regulations.--
        (1) Interim final regulations.--Not later than 180 days after 
    the date of the enactment of this Act, the Secretary of Labor shall 
    develop and publish in the Federal Register interim final 
    regulations relating to the transition to, and implementation of, 
    this Act.
        (2) Final regulations.--Not later than December 31, 1999, the 
    Secretary shall develop and publish in the Federal Register final 
    regulations relating to the transition to, and implementation of, 
    this Act.
    (d) Expenditure of Funds During Transition.--
        (1) In general.--Subject to paragraph (2) and in accordance 
    with regulations developed under subsection (b), States, grant 
    recipients, administrative entities, and other recipients of 
    financial assistance under the Job Training Partnership Act (29 
    U.S.C. 1501 et seq.) or under this Act may expend funds received 
    under the Job Training Partnership Act or under this Act, prior to 
    July 1, 2000, in order to plan and implement programs and 
    activities authorized under this Act.
        (2) Additional requirements.--Not to exceed 2 percent of any 
    allotment to any State from amounts appropriated under the Job 
    Training Partnership Act or under this Act for fiscal year 1998 or 
    1999 may be made available to carry out paragraph (1) and not less 
    than 50 percent of any such amount used to carry out paragraph (1) 
    shall be made available to local entities for the purposes 
    described in such paragraph.
    (e) Reorganization.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Labor shall reorganize and 
align functions within the Department of Labor and within the 
Employment and Training Administration in order to carry out the duties 
and responsibilities required by this Act (and related laws) in an 
effective and efficient manner.

SEC. 507. EFFECTIVE DATE.

    Except as otherwise provided in this Act, this Act and the 
amendments made by this Act, shall take effect on the date of the 
enactment of this Act.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.