[Congressional Record Volume 142, Number 133 (Tuesday, September 24, 1996)]
[House]
[Pages H10783-H10802]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       GOVERNMENT-SPONSORED ENTERPRISE PRIVATIZATION ACT OF 1996

  Mr. McKEON. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 1720) to amend the Higher Education Act of 1965 to provide 
for the cessation of Federal sponsorship of two Government-sponsored 
enterprises, and for other purposes, as amended.
  The Clerk read as follows:

                               H.R. 1720

       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 
     ``Government-Sponsored Enterprise Privatization Act of 
     1996''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

               TITLE I--REORGANIZATION AND PRIVATIZATION

Sec. 101. Reorganization of the Student Loan Marketing Association 
              through the formation of a holding company.
Sec. 102. Connie Lee privatization.
Sec. 103. Eligible institution.

                    TITLE II--MUSEUMS AND LIBRARIES

Sec. 201. Museum and library services.
Sec. 202. National Commission on Libraries and Information Science.
Sec. 203. Transfer of functions from Institute of Museum Services.
Sec. 204. Service of individuals serving on date of enactment.
Sec. 205. Consideration.
Sec. 206. Transition and transfer of funds.

                    TITLE III--EXTENSION OF PROGRAMS

Sec. 301. Extension of National Literacy Act of 1991.
Sec. 302. Adult Education Act Amendments.
Sec. 303. Extension of Carl D. Perkins Vocational and Applied 
              Technology Education Act.

              TITLE IV--REPEALS AND CONFORMING AMENDMENTS

Sec. 401. Repeals.
Sec. 402. Conforming amendments.
               TITLE I--REORGANIZATION AND PRIVATIZATION

     SEC. 101. REORGANIZATION OF THE STUDENT LOAN MARKETING 
                   ASSOCIATION THROUGH THE FORMATION OF A HOLDING 
                   COMPANY.

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

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

       ``(a) Actions by the Association's Board of Directors.--The 
     Board of Directors of the Association shall take or cause to 
     be taken all such action as the Board of Directors deems 
     necessary or appropriate to effect, upon the shareholder 
     approval described in subsection (b), a restructuring of the 
     common stock ownership of the Association, as set forth in a 
     plan of reorganization adopted by the Board of Directors (the 
     terms of which shall be consistent with this section) so that 
     all of the outstanding common shares of the Association shall 
     be directly owned by a Holding Company. Such actions may 
     include, in the Board of Director's discretion, a merger of a 
     wholly owned subsidiary of the Holding Company with and into 
     the Association, which would have the effect provided in the 
     plan of reorganization and the law of the jurisdiction in 
     which such subsidiary is incorporated. As part of the 
     restructuring, the Board of Directors may cause--
       ``(1) the common shares of the Association to be converted, 
     on the reorganization effective date, to common shares of the 
     Holding Company on a one for one basis, consistent with 
     applicable State or District of Columbia law; and
       ``(2) Holding Company common shares to be registered with 
     the Securities and Exchange Commission.
       ``(b) Shareholder Approval.--The plan of reorganization 
     adopted by the Board of Directors pursuant to subsection (a) 
     shall be submitted to common shareholders of the Association 
     for their approval. The reorganization shall occur on the 
     reorganization effective date, provided that the plan of 
     reorganization has been approved by the affirmative votes, 
     cast in person or by proxy, of the holders of a majority of 
     the issued and outstanding shares of the Association common 
     stock.
       ``(c) Transition.--In the event the shareholders of the 
     Association approve the plan of reorganization under 
     subsection (b), the following provisions shall apply 
     beginning on the reorganization effective date:
       ``(1) In general.--Except as specifically provided in this 
     section, until the dissolution date the Association shall 
     continue to have all of the rights, privileges and 
     obligations set forth in, and shall be subject to all of the 
     limitations and restrictions of, section 439, and the 
     Association shall continue to carry out the purposes of such 
     section. The Holding Company and any subsidiary of the 
     Holding Company (other than the Association) shall not be 
     entitled to any of the rights, privileges, and obligations, 
     and shall not be subject to the limitations and restrictions, 
     applicable to the Association under section 439, except as 
     specifically provided in this section. The Holding Company 
     and any subsidiary of the Holding Company (other than the 
     Association or a subsidiary of the Association) shall not 
     purchase loans insured under this Act until such time as the 
     Association ceases acquiring such loans, except that the 
     Holding Company may purchase such loans if the Association is 
     merely continuing to acquire loans as a lender of last resort 
     pursuant to section 439(q) or under an agreement with the 
     Secretary described in paragraph (6).
       ``(2) Transfer of certain property.--
       ``(A) In general.--Except as provided in this section, on 
     the reorganization effective date or as soon as practicable 
     thereafter, the Association shall use the Association's best 
     efforts to transfer to the Holding Company or any subsidiary 
     of the Holding Company (or both), as directed by the Holding 
     Company, all real and personal property of the

[[Page H10784]]

     Association (both tangible and intangible) other than the 
     remaining property. Subject to the preceding sentence, such 
     transferred property shall include all right, title, and 
     interest in--
       ``(i) direct or indirect subsidiaries of the Association 
     (excluding special purpose funding companies in existence on 
     the date of enactment of this section and any interest in any 
     government-sponsored enterprise);
       ``(ii) contracts, leases, and other agreements of the 
     Association;
       ``(iii) licenses and other intellectual property of the 
     Association; and
       ``(iv) any other property of the Association.
       ``(B) Construction.--Nothing in this paragraph shall be 
     construed to prohibit the Association from transferring 
     remaining property from time to time to the Holding Company 
     or any subsidiary of the Holding Company, subject to the 
     provisions of paragraph (4).
       ``(3) Transfer of personnel.--On the reorganization 
     effective date, employees of the Association shall become 
     employees of the Holding Company (or any subsidiary of the 
     Holding Company), and the Holding Company (or any subsidiary 
     of the Holding Company) shall provide all necessary and 
     appropriate management and operational support (including 
     loan servicing) to the Association, as requested by the 
     Association. The Association, however, may obtain such 
     management and operational support from persons or entities 
     not associated with the Holding Company.
       ``(4) Dividends.--The Association may pay dividends in the 
     form of cash or noncash distributions so long as at the time 
     of the declaration of such dividends, after giving effect to 
     the payment of such dividends as of the date of such 
     declaration by the Board of Directors of the Association, the 
     Association's capital would be in compliance with the capital 
     standards and requirements set forth in section 439(r). If, 
     at any time after the reorganization effective date, the 
     Association fails to comply with such capital standards, the 
     Holding Company shall transfer with due diligence to the 
     Association additional capital in such amounts as are 
     necessary to ensure that the Association again complies with 
     the capital standards.
       ``(5) Certification prior to dividend.--Prior to the 
     payment of any dividend under paragraph (4), the Association 
     shall certify to the Secretary of the Treasury that the 
     payment of the dividend will be made in compliance with 
     paragraph (4) and shall provide copies of all calculations 
     needed to make such certification.
       ``(6) Restrictions on new business activity or acquisition 
     of assets by association.--
       ``(A) In general.--After the reorganization effective date, 
     the Association shall not engage in any new business 
     activities or acquire any additional program assets described 
     in section 439(d) other than in connection with--
       ``(i) student loan purchases through September 30, 2007;
       ``(ii) contractual commitments for future warehousing 
     advances, or pursuant to letters of credit or standby bond 
     purchase agreements, which are outstanding as of the 
     reorganization effective date;
       ``(iii) the Association serving as a lender-of-last-resort 
     pursuant to section 439(q); and
       ``(iv) the Association's purchase of loans insured under 
     this part, if the Secretary, with the approval of the 
     Secretary of the Treasury, enters into an agreement with the 
     Association for the continuation or resumption of the 
     Association's secondary market purchase program because the 
     Secretary determines there is inadequate liquidity for loans 
     made under this part.
       ``(B) Agreement.--The Secretary is authorized to enter into 
     an agreement described in clause (iv) of subparagraph (A) 
     with the Association covering such secondary market 
     activities. Any agreement entered into under such clause 
     shall cover a period of 12 months, but may be renewed if the 
     Secretary determines that liquidity remains inadequate. The 
     fee provided under section 439(h)(7) shall not apply to loans 
     acquired under any such agreement with the Secretary.
       ``(7) Issuance of debt obligations during the transition 
     period; attributes of debt obligations.--After the 
     reorganization effective date, the Association shall not 
     issue debt obligations which mature later than September 30, 
     2008, except in connection with serving as a lender-of-last-
     resort pursuant to section 439(q) or with purchasing loans 
     under an agreement with the Secretary as described in 
     paragraph (6). Nothing in this section shall modify the 
     attributes accorded the debt obligations of the Association 
     by section 439, regardless of whether such debt obligations 
     are incurred prior to, or at any time following, the 
     reorganization effective date or are transferred to a trust 
     in accordance with subsection (d).
       ``(8) Monitoring of safety and soundness.--
       ``(A) Obligation to obtain, maintain, and report 
     information.--The Association shall obtain such information 
     and make and keep such records as the Secretary of the 
     Treasury may from time to time prescribe concerning--
       ``(i) the financial risk to the Association resulting from 
     the activities of any associated person, to the extent such 
     activities are reasonably likely to have a material impact on 
     the financial condition of the Association, including the 
     Association's capital ratio, the Association's liquidity, or 
     the Association's ability to conduct and finance the 
     Association's operations; and
       ``(ii) the Association's policies, procedures, and systems 
     for monitoring and controlling any such financial risk.
       ``(B) Summary reports.--The Secretary of the Treasury may 
     require summary reports of the information described in 
     subparagraph (A) to be filed no more frequently than 
     quarterly. If, as a result of adverse market conditions or 
     based on reports provided pursuant to this subparagraph or 
     other available information, the Secretary of the Treasury 
     has concerns regarding the financial or operational condition 
     of the Association, the Secretary of the Treasury may, 
     notwithstanding the preceding sentence and subparagraph (A), 
     require the Association to make reports concerning the 
     activities of any associated person whose business activities 
     are reasonably likely to have a material impact on the 
     financial or operational condition of the Association.
       ``(C) Separate operation of corporations.--
       ``(i) In general.--The funds and assets of the Association 
     shall at all times be maintained separately from the funds 
     and assets of the Holding Company or any subsidiary of the 
     Holding Company and may be used by the Association solely to 
     carry out the Association's purposes and to fulfill the 
     Association's obligations.
       ``(ii) Books and records.--The Association shall maintain 
     books and records that clearly reflect the assets and 
     liabilities of the Association, separate from the assets and 
     liabilities of the Holding Company or any subsidiary of the 
     Holding Company.
       ``(iii) Corporate office.--The Association shall maintain a 
     corporate office that is physically separate from any office 
     of the Holding Company or any subsidiary of the Holding 
     Company.
       ``(iv) Director.--No director of the Association who is 
     appointed by the President pursuant to section 439(c)(1)(A) 
     may serve as a director of the Holding Company.
       ``(v) One officer requirement.--At least one officer of the 
     Association shall be an officer solely of the Association.
       ``(vi) Transactions.--Transactions between the Association 
     and the Holding Company or any subsidiary of the Holding 
     Company, including any loan servicing arrangements, shall be 
     on terms no less favorable to the Association than the 
     Association could obtain from an unrelated third party 
     offering comparable services.
       ``(vii) Credit prohibition.--The Association shall not 
     extend credit to the Holding Company or any subsidiary of the 
     Holding Company nor guarantee or provide any credit 
     enhancement to any debt obligations of the Holding Company or 
     any subsidiary of the Holding Company.
       ``(viii) Amounts collected.--Any amounts collected on 
     behalf of the Association by the Holding Company or any 
     subsidiary of the Holding Company with respect to the assets 
     of the Association, pursuant to a servicing contract or other 
     arrangement between the Association and the Holding Company 
     or any subsidiary of the Holding Company, shall be collected 
     solely for the benefit of the Association and shall be 
     immediately deposited by the Holding Company or such 
     subsidiary to an account under the sole control of the 
     Association.
       ``(D) Encumbrance of assets.--Notwithstanding any Federal 
     or State law, rule, or regulation, or legal or equitable 
     principle, doctrine, or theory to the contrary, under no 
     circumstances shall the assets of the Association be 
     available or used to pay claims or debts of or incurred by 
     the Holding Company. Nothing in this subparagraph shall be 
     construed to limit the right of the Association to pay 
     dividends not otherwise prohibited under this subparagraph or 
     to limit any liability of the Holding Company explicitly 
     provided for in this section.
       ``(E) Holding company activities.--After the reorganization 
     effective date and prior to the dissolution date, all 
     business activities of the Holding Company shall be conducted 
     through subsidiaries of the Holding Company.
       ``(F) Confidentiality.--Any information provided by the 
     Association pursuant to this section shall be subject to the 
     same confidentiality obligations contained in section 
     439(r)(12).
       ``(G) Definition.--For purposes of this paragraph, the term 
     `associated person' means any person, other than a natural 
     person, who is directly or indirectly controlling, controlled 
     by, or under common control with, the Association.
       ``(9) Issuance of stock warrants.--On the reorganization 
     effective date, the Holding Company shall issue to the 
     Secretary of the Treasury a number of stock warrants that is 
     equal to one percent of the outstanding shares of the 
     Association, determined as of the last day of the fiscal 
     quarter preceding the date of enactment of this section, with 
     each stock warrant entitling the holder of the stock warrant 
     to purchase from the Holding Company one share of the 
     registered common stock of the Holding Company or the Holding 
     Company's successors or assigns, at any time on or before 
     September 30, 2008. The exercise price for such warrants 
     shall be an amount equal to the average closing price of the 
     common stock of the Association for the 20 business days 
     prior to the date of enactment of this section on the 
     exchange or market which is then the primary exchange

[[Page H10785]]

     or market for the common stock of the Association. The number 
     of shares of Holding Company common stock subject to each 
     warrant and the exercise price of each warrant shall be 
     adjusted as necessary to reflect--
       ``(A) the conversion of Association common stock into 
     Holding Company common stock as part of the plan of 
     reorganization approved by the Association's shareholders; 
     and
       ``(B) any issuance or sale of stock (including issuance or 
     sale of treasury stock), stock split, recapitalization, 
     reorganization, or other corporate event, if agreed to by the 
     Secretary of the Treasury and the Association.
       ``(10) Restrictions on transfer of association shares and 
     bankruptcy of association.--After the reorganization 
     effective date, the Holding Company shall not sell, pledge, 
     or otherwise transfer the outstanding shares of the 
     Association, or agree to or cause the liquidation of the 
     Association or cause the Association to file a petition for 
     bankruptcy under title 11, United States Code, without prior 
     approval of the Secretary of the Treasury and the Secretary 
     of Education.
       ``(d) Termination of the Association.--In the event the 
     shareholders of the Association approve a plan of 
     reorganization under subsection (b), the Association shall 
     dissolve, and the Association's separate existence shall 
     terminate on September 30, 2008, after discharge of all 
     outstanding debt obligations and liquidation pursuant to this 
     subsection. The Association may dissolve pursuant to this 
     subsection prior to such date by notifying the Secretary of 
     Education and the Secretary of the Treasury of the 
     Association's intention to dissolve, unless within 60 days 
     after receipt of such notice the Secretary of Education 
     notifies the Association that the Association continues to be 
     needed to serve as a lender of last resort pursuant to 
     section 439(q) or continues to be needed to purchase loans 
     under an agreement with the Secretary described in paragraph 
     (6). On the dissolution date, the Association shall take the 
     following actions:
       ``(1) Establishment of a trust.--The Association shall, 
     under the terms of an irrevocable trust agreement that is in 
     form and substance satisfactory to the Secretary of the 
     Treasury, the Association and the appointed trustee, 
     irrevocably transfer all remaining obligations of the 
     Association to the trust and irrevocably deposit or cause to 
     be deposited into such trust, to be held as trust funds 
     solely for the benefit of holders of the remaining 
     obligations, money or direct noncallable obligations of the 
     United States or any agency thereof for which payment the 
     full faith and credit of the United States is pledged, 
     maturing as to principal and interest in such amounts and at 
     such times as are determined by the Secretary of the Treasury 
     to be sufficient, without consideration of any significant 
     reinvestment of such interest, to pay the principal of, and 
     interest on, the remaining obligations in accordance with 
     their terms. To the extent the Association cannot provide 
     money or qualifying obligations in the amount required, the 
     Holding Company shall be required to transfer money or 
     qualifying obligations to the trust in the amount necessary 
     to prevent any deficiency.
       ``(2) Use of trust assets.--All money, obligations, or 
     financial assets deposited into the trust pursuant to this 
     subsection shall be applied by the trustee to the payment of 
     the remaining obligations assumed by the trust.
       ``(3) Obligations not transferred to the trust.--The 
     Association shall make proper provision for all other 
     obligations of the Association not transferred to the trust, 
     including the repurchase or redemption, or the making of 
     proper provision for the repurchase or redemption, of any 
     preferred stock of the Association outstanding. Any 
     obligations of the Association which cannot be fully 
     satisfied shall become liabilities of the Holding Company as 
     of the date of dissolution.
       ``(4) Transfer of remaining assets.--After compliance with 
     paragraphs (1) and (3), any remaining assets of the trust 
     shall be transferred to the Holding Company or any subsidiary 
     of the Holding Company, as directed by the Holding Company.
       ``(e) Operation of the Holding Company.--In the event the 
     shareholders of the Association approve the plan of 
     reorganization under subsection (b), the following provisions 
     shall apply beginning on the reorganization effective date:
       ``(1) Holding company board of directors.--The number of 
     members and composition of the Board of Directors of the 
     Holding Company shall be determined as set forth in the 
     Holding Company's charter or like instrument (as amended from 
     time to time) or bylaws (as amended from time to time) and as 
     permitted under the laws of the jurisdiction of the Holding 
     Company's incorporation.
       ``(2) Holding company name.--The names of the Holding 
     Company and any subsidiary of the Holding Company (other than 
     the Association)--
       ``(A) may not contain the name `Student Loan Marketing 
     Association'; and
       ``(B) may contain, to the extent permitted by applicable 
     State or District of Columbia law, `Sallie Mae' or variations 
     thereof, or such other names as the Board of Directors of the 
     Association or the Holding Company deems appropriate.
       ``(3) Use of sallie mae name.--Subject to paragraph (2), 
     the Association may assign to the Holding Company, or any 
     subsidiary of the Holding Company, the `Sallie Mae' name as a 
     trademark and service mark, except that neither the Holding 
     Company nor any subsidiary of the Holding Company (other than 
     the Association or any subsidiary of the Association) may use 
     the `Sallie Mae' name on, or to identify the issuer of, any 
     debt obligation or other security offered or sold by the 
     Holding Company or any subsidiary of the Holding Company 
     (other than a debt obligation or other security issued to and 
     held by the Holding Company or any subsidiary of the Holding 
     Company). The Association shall remit to the Secretary of the 
     Treasury $5,000,000 within 60 days of the reorganization 
     effective date as compensation for the right to assign such 
     trademark or service mark.
       ``(4) Disclosure required.--Until 3 years after the 
     dissolution date, the Holding Company, and any subsidiary of 
     the Holding Company (other than the Association), shall 
     prominently display--
       ``(A) in any document offering the Holding Company's 
     securities, a statement that the obligations of the Holding 
     Company and any subsidiary of the Holding Company are not 
     guaranteed by the full faith and credit of the United States; 
     and
       ``(B) in any advertisement or promotional materials which 
     use the `Sallie Mae' name or mark, a statement that neither 
     the Holding Company nor any subsidiary of the Holding Company 
     is a government-sponsored enterprise or instrumentality of 
     the United States.
       ``(f) Strict Construction.--Except as specifically set 
     forth in this section, nothing in this section shall be 
     construed to limit the authority of the Association as a 
     federally chartered corporation, or of the Holding Company as 
     a State or District of Columbia chartered corporation.
       ``(g) Right To Enforce.--The Secretary of Education or the 
     Secretary of the Treasury, as appropriate, may request that 
     the Attorney General bring an action in the United States 
     District Court for the District of Columbia for the 
     enforcement of any provision of this section, or may, under 
     the direction or control of the Attorney General, bring such 
     an action. Such court shall have jurisdiction and power to 
     order and require compliance with this section.
       ``(h) Deadline for Reorganization Effective Date.--This 
     section shall be of no further force and effect in the event 
     that the reorganization effective date does not occur on or 
     before 18 months after the date of enactment of this section.
       ``(i) Definitions.--For purposes of this section:
       ``(1) Association.--The term `Association' means the 
     Student Loan Marketing Association.
       ``(2) Dissolution date.--The term `dissolution date' means 
     September 30, 2008, or such earlier date as the Secretary of 
     Education permits the transfer of remaining obligations in 
     accordance with subsection (d).
       ``(3) Holding company.--The term `Holding Company' means 
     the new business corporation established pursuant to this 
     section by the Association under the laws of any State of the 
     United States or the District of Columbia for the purposes of 
     the reorganization and restructuring described in subsection 
     (a).
       ``(4) Remaining obligations.--The term `remaining 
     obligations' means the debt obligations of the Association 
     outstanding as of the dissolution date.
       ``(5) Remaining property.--The term `remaining property' 
     means the following assets and liabilities of the Association 
     which are outstanding as of the reorganization effective 
     date:
       ``(A) Debt obligations issued by the Association.
       ``(B) Contracts relating to interest rate, currency, or 
     commodity positions or protections.
       ``(C) Investment securities owned by the Association.
       ``(D) Any instruments, assets, or agreements described in 
     section 439(d) (including, without limitation, all student 
     loans and agreements relating to the purchase and sale of 
     student loans, forward purchase and lending commitments, 
     warehousing advances, academic facilities obligations, 
     letters of credit, standby bond purchase agreements, 
     liquidity agreements, and student loan revenue bonds or other 
     loans).
       ``(E) Except as specifically prohibited by this section or 
     section 439, any other nonmaterial assets or liabilities of 
     the Association which the Association's Board of Directors 
     determines to be necessary or appropriate to the 
     Association's operations.
       ``(6) Reorganization.--The term `reorganization' means the 
     restructuring event or events (including any merger event) 
     giving effect to the Holding Company structure described in 
     subsection (a).
       ``(7) Reorganization effective date.--The term 
     `reorganization effective date' means the effective date of 
     the reorganization as determined by the Board of Directors of 
     the Association, which shall not be earlier than the date 
     that shareholder approval is obtained pursuant to subsection 
     (b) and shall not be later than the date that is 18 months 
     after the date of enactment of this section.
       ``(8) Subsidiary.--The term `subsidiary' means one or more 
     direct or indirect subsidiaries.''.
       (b) Technical Amendments.--
       (1) Eligible lender.--
       (A) Amendments to the higher education act.--
       (i) Definition of eligible lender.--Section 435(d)(1)(F) of 
     the Higher Education Act of 1965 (20 U.S.C. 1085(d)(1)(F)) is 
     amended by

[[Page H10786]]

     inserting after ``Student Loan Marketing Association'' the 
     following: ``or the Holding Company of the Student Loan 
     Marketing Association, including any subsidiary of the 
     Holding Company, created pursuant to section 440,''.
       (ii) Definition of eligible lender and federal 
     consolidation loans.--Sections 435(d)(1)(G) and 428C(a)(1)(A) 
     of such Act (20 U.S.C. 1085(d)(1)(G) and 1078-3(a)(1)(A)) are 
     each amended by inserting after ``Student Loan Marketing 
     Association'' the following: ``or the Holding Company of the 
     Student Loan Marketing Association, including any subsidiary 
     of the Holding Company, created pursuant to section 440''.
       (B) Effective date.--The amendments made by this paragraph 
     shall take effect on the reorganization effective date as 
     defined in section 440(h) of the Higher Education Act of 1965 
     (as added by subsection (a)).
       (2) Enforcement of safety and soundness requirements.--
     Section 439(r) of the Higher Education Act of 1965 (20 U.S.C. 
     1087-2(r)) is amended--
       (A) in the first sentence of paragraph (12), by inserting 
     ``or the Association's associated persons'' after ``by the 
     Association'';
       (B) by redesignating paragraph (13) as paragraph (15); and
       (C) by inserting after paragraph (12) the following new 
     paragraph:
       ``(13) Enforcement of safety and soundness requirements.--
     The Secretary of Education or the Secretary of the Treasury, 
     as appropriate, may request that the Attorney General bring 
     an action in the United States District Court for the 
     District of Columbia for the enforcement of any provision of 
     this section, or may, under the direction or control of the 
     Attorney General, bring such an action. Such court shall have 
     jurisdiction and power to order and require compliance with 
     this section.''.
       (3) Financial safety and soundness.--Section 439(r) of the 
     Higher Education Act of 1965 (20 U.S.C. 1087-2(r)) is further 
     amended--
       (A) in paragraph (1)--
       (i) by striking ``and'' at the end of subparagraph (A);
       (ii) by striking the period at the end of subparagraph (B) 
     and inserting ``; and''; and
       (iii) by adding at the end the following new subparagraph:
       ``(C)(i) financial statements of the Association within 45 
     days of the end of each fiscal quarter; and
       ``(ii) reports setting forth the calculation of the capital 
     ratio of the Association within 45 days of the end of each 
     fiscal quarter.'';
       (B) in paragraph (2)--
       (i) by striking clauses (i) and (ii) of subparagraph (A) 
     and inserting the following:
       ``(i) appoint auditors or examiners to conduct audits of 
     the Association from time to time to determine the condition 
     of the Association for the purpose of assessing the 
     Association's financial safety and soundness and to determine 
     whether the requirements of this section and section 440 are 
     being met; and
       ``(ii) obtain the services of such experts as the Secretary 
     of the Treasury determines necessary and appropriate, as 
     authorized by section 3109 of title 5, United States Code, to 
     assist in determining the condition of the Association for 
     the purpose of assessing the Association's financial safety 
     and soundness, and to determine whether the requirements of 
     this section and section 440 are being met.''; and
       (ii) by adding at the end the following new subparagraph:
       ``(D) Annual assessment.--
       ``(i) In general.--For each fiscal year beginning on or 
     after October 1, 1996, the Secretary of the Treasury may 
     establish and collect from the Association an assessment (or 
     assessments) in amounts sufficient to provide for reasonable 
     costs and expenses of carrying out the duties of the 
     Secretary of the Treasury under this section and section 440 
     during such fiscal year. In no event may the total amount so 
     assessed exceed, for any fiscal year, $800,000, adjusted for 
     each fiscal year ending after September 30, 1997, by the 
     ratio of the Consumer Price Index for All Urban Consumers 
     (issued by the Bureau of Labor Statistics) for the final 
     month of the fiscal year preceding the fiscal year for which 
     the assessment is made to the Consumer Price Index for All 
     Urban Consumers for September 1997.
       ``(ii) Deposit.--Amounts collected from assessments under 
     this subparagraph shall be deposited in an account within the 
     Treasury of the United States as designated by the Secretary 
     of the Treasury for that purpose. The Secretary of the 
     Treasury is authorized and directed to pay out of any funds 
     available in such account the reasonable costs and expenses 
     of carrying out the duties of the Secretary of the Treasury 
     under this section and section 440. None of the funds 
     deposited into such account shall be available for any 
     purpose other than making payments for such costs and 
     expenses.''; and
       (C) by inserting after paragraph (13) (as added by 
     paragraph (2)(C)) the following new paragraph:
       ``(14) Actions by secretary.--
       ``(A) In general.--For any fiscal quarter ending after 
     January 1, 2000, the Association shall have a capital ratio 
     of at least 2.25 percent. The Secretary of the Treasury may, 
     whenever such capital ratio is not met, take any one or more 
     of the actions described in paragraph (7), except that--
       ``(i) the capital ratio to be restored pursuant to 
     paragraph (7)(D) shall be 2.25 percent; and
       ``(ii) if the relevant capital ratio is in excess of or 
     equal to 2 percent for such quarter, the Secretary of the 
     Treasury shall defer taking any of the actions set forth in 
     paragraph (7) until the next succeeding quarter and may then 
     proceed with any such action only if the capital ratio of the 
     Association remains below 2.25 percent.
       ``(B) Applicability.--The provisions of paragraphs (4), 
     (5), (6), (8), (9), (10), and (11) shall be of no further 
     application to the Association for any period after January 
     1, 2000.''.
       (4) Information required; dividends.--Section 439(r) of the 
     Higher Education Act of 1965 (20 U.S.C. 1087-2(r)) is further 
     amended--
       (A) by adding at the end of paragraph (2) (as amended in 
     paragraph (3)(B)(ii)) the following new subparagraph:
       ``(E) Obligation to obtain, maintain, and report 
     information.--
       ``(i) In general.--The Association shall obtain such 
     information and make and keep such records as the Secretary 
     of the Treasury may from time to time prescribe concerning--
       ``(I) the financial risk to the Association resulting from 
     the activities of any associated person, to the extent such 
     activities are reasonably likely to have a material impact on 
     the financial condition of the Association, including the 
     Association's capital ratio, the Association's liquidity, or 
     the Association's ability to conduct and finance the 
     Association's operations; and
       ``(II) the Association's policies, procedures, and systems 
     for monitoring and controlling any such financial risk.
       ``(ii) Summary reports.--The Secretary of the Treasury may 
     require summary reports of such information to be filed no 
     more frequently than quarterly. If, as a result of adverse 
     market conditions or based on reports provided pursuant to 
     this subparagraph or other available information, the 
     Secretary of the Treasury has concerns regarding the 
     financial or operational condition of the Association, the 
     Secretary of the Treasury may, notwithstanding the preceding 
     sentence and clause (i), require the Association to make 
     reports concerning the activities of any associated person, 
     whose business activities are reasonably likely to have a 
     material impact on the financial or operational condition of 
     the Association.
       ``(iii) Definition.--For purposes of this subparagraph, the 
     term `associated person' means any person, other than a 
     natural person, directly or indirectly controlling, 
     controlled by, or under common control with the 
     Association.''; and
       (B) by adding at the end the following new paragraphs:
       ``(16) Dividends.--The Association may pay dividends in the 
     form of cash or noncash distributions so long as at the time 
     of the declaration of such dividends, after giving effect to 
     the payment of such dividends as of the date of such 
     declaration by the Board of Directors of the Association, the 
     Association's capital would be in compliance with the capital 
     standards set forth in this section.
       ``(17) Certification prior to payment of dividend.--Prior 
     to the payment of any dividend under paragraph (16), the 
     Association shall certify to the Secretary of the Treasury 
     that the payment of the dividend will be made in compliance 
     with paragraph (16) and shall provide copies of all 
     calculations needed to make such certification.''.
       (c) Sunset of the Association's Charter if No 
     Reorganization Plan Occurs.--Section 439 of the Higher 
     Education Act of 1965 (20 U.S.C. 1087-2) is amended by adding 
     at the end the following new subsection:
       ``(s) Charter Sunset.--
       ``(1) Application of provisions.--This subsection applies 
     beginning 18 months and one day after the date of enactment 
     of this subsection if no reorganization of the Association 
     occurs in accordance with the provisions of section 440.
       ``(2) Sunset plan.--
       ``(A) Plan submission by the association.--Not later than 
     July 1, 2007, the Association shall submit to the Secretary 
     of the Treasury and to the Chairman and Ranking Member of the 
     Committee on Labor and Human Resources of the Senate and the 
     Chairman and Ranking Member of the Committee on Economic and 
     Educational Opportunities of the House of Representatives, a 
     detailed plan for the orderly winding up, by July 1, 2013, of 
     business activities conducted pursuant to the charter set 
     forth in this section. Such plan shall--
       ``(i) ensure that the Association will have adequate assets 
     to transfer to a trust, as provided in this subsection, to 
     ensure full payment of remaining obligations of the 
     Association in accordance with the terms of such obligations;
       ``(ii) provide that all assets not used to pay liabilities 
     shall be distributed to shareholders as provided in this 
     subsection; and
       ``(iii) provide that the operations of the Association 
     shall remain separate and distinct from that of any entity to 
     which the assets of the Association are transferred.
       ``(B) Amendment of the plan by the association.--The 
     Association shall from time to time amend such plan to 
     reflect changed circumstances, and submit such amendments to 
     the Secretary of the Treasury and to the Chairman and Ranking 
     Minority Member of the Committee on Labor and Human Resources 
     of the Senate and Chairman and Ranking Minority Member of the 
     Committee on Economic and Educational Opportunities of the 
     House of Representatives. In no case may any amendment extend 
     the date for full implementation of the plan beyond the 
     dissolution date provided in paragraph (3).

[[Page H10787]]

       ``(C) Plan monitoring.--The Secretary of the Treasury shall 
     monitor the Association's compliance with the plan and shall 
     continue to review the plan (including any amendments 
     thereto).
       ``(D) Amendment of the plan by the secretary of the 
     treasury.--The Secretary of the Treasury may require the 
     Association to amend the plan (including any amendments to 
     the plan), if the Secretary of the Treasury deems such 
     amendments necessary to ensure full payment of all 
     obligations of the Association.
       ``(E) Implementation by the association.--The Association 
     shall promptly implement the plan (including any amendments 
     to the plan, whether such amendments are made by the 
     Association or are required to be made by the Secretary of 
     the Treasury).
       ``(3) Dissolution of the association.--The Association 
     shall dissolve and the Association's separate existence shall 
     terminate on July 1, 2013, after discharge of all outstanding 
     debt obligations and liquidation pursuant to this subsection. 
     The Association may dissolve pursuant to this subsection 
     prior to such date by notifying the Secretary of Education 
     and the Secretary of the Treasury of the Association's 
     intention to dissolve, unless within 60 days of receipt of 
     such notice the Secretary of Education notifies the 
     Association that the Association continues to be needed to 
     serve as a lender of last resort pursuant to subsection (q) 
     or continues to be needed to purchase loans under an 
     agreement with the Secretary described in paragraph (4)(A). 
     On the dissolution date, the Association shall take the 
     following actions:
       ``(A) Establishment of a trust.--The Association shall, 
     under the terms of an irrevocable trust agreement in form and 
     substance satisfactory to the Secretary of the Treasury, the 
     Association, and the appointed trustee, irrevocably transfer 
     all remaining obligations of the Association to a trust and 
     irrevocably deposit or cause to be deposited into such trust, 
     to be held as trust funds solely for the benefit of holders 
     of the remaining obligations, money or direct noncallable 
     obligations of the United States or any agency thereof for 
     which payment the full faith and credit of the United States 
     is pledged, maturing as to principal and interest in such 
     amounts and at such times as are determined by the Secretary 
     of the Treasury to be sufficient, without consideration of 
     any significant reinvestment of such interest, to pay the 
     principal of, and interest on, the remaining obligations in 
     accordance with their terms.
       ``(B) Use of trust assets.--All money, obligations, or 
     financial assets deposited into the trust pursuant to this 
     subsection shall be applied by the trustee to the payment of 
     the remaining obligations assumed by the trust. Upon the 
     fulfillment of the trustee's duties under the trust, any 
     remaining assets of the trust shall be transferred to the 
     persons who, at the time of the dissolution, were the 
     shareholders of the Association, or to the legal successors 
     or assigns of such persons.
       ``(C) Obligations not transferred to the trust.--The 
     Association shall make proper provision for all other 
     obligations of the Association, including the repurchase or 
     redemption, or the making of proper provision for the 
     repurchase or redemption, of any preferred stock of the 
     Association outstanding.
       ``(D) Transfer of remaining assets.--After compliance with 
     subparagraphs (A) and (C), the Association shall transfer to 
     the shareholders of the Association any remaining assets of 
     the Association.
       ``(4) Restrictions relating to winding up.--
       ``(A) Restrictions on new business activity or acquisition 
     of assets by the association.--
       ``(i) In general.--Beginning on July 1, 2009, the 
     Association shall not engage in any new business activities 
     or acquire any additional program assets (including acquiring 
     assets pursuant to contractual commitments) described in 
     subsection (d) other than in connection with the 
     Association--

       ``(I) serving as a lender of last resort pursuant to 
     subsection (q); and
       ``(II) purchasing loans insured under this part, if the 
     Secretary, with the approval of the Secretary of the 
     Treasury, enters into an agreement with the Association for 
     the continuation or resumption of the Association's secondary 
     market purchase program because the Secretary determines 
     there is inadequate liquidity for loans made under this part.

       ``(ii) Agreement.--The Secretary is authorized to enter 
     into an agreement described in subclause (II) of clause (i) 
     with the Association covering such secondary market 
     activities. Any agreement entered into under such subclause 
     shall cover a period of 12 months, but may be renewed if the 
     Secretary determines that liquidity remains inadequate. The 
     fee provided under subsection (h)(7) shall not apply to loans 
     acquired under any such agreement with the Secretary.
       ``(B) Issuance of debt obligations during the wind up 
     period; attributes of debt obligations.--The Association 
     shall not issue debt obligations which mature later than July 
     1, 2013, except in connection with serving as a lender of 
     last resort pursuant to subsection (q) or with purchasing 
     loans under an agreement with the Secretary as described in 
     subparagraph (A). Nothing in this subsection shall modify the 
     attributes accorded the debt obligations of the Association 
     by this section, regardless of whether such debt obligations 
     are transferred to a trust in accordance with paragraph (3).
       ``(C) Use of association name.--The Association may not 
     transfer or permit the use of the name `Student Loan 
     Marketing Association', `Sallie Mae', or any variation 
     thereof, to or by any entity other than a subsidiary of the 
     Association.''.
       (d) Discrimination in Secondary Markets Prohibited.--Part B 
     of title IV of the Higher Education Act of 1965 (20 U.S.C. 
     1071 et seq.) is amended by adding after section 440 (as 
     added by subsection (a)) the following new section:

     ``SEC. 440A. DISCRIMINATION IN SECONDARY MARKETS PROHIBITED.

       ``The Student Loan Marketing Association (and, if the 
     Association is privatized under section 440, any successor 
     entity functioning as a secondary market for loans under this 
     part, including the Holding Company described in such 
     section) shall not engage directly or indirectly in any 
     pattern or practice that results in a denial of a borrower's 
     access to loans under this part because of the borrower's 
     race, sex, color, religion, national origin, age, disability 
     status, income, attendance at a particular eligible 
     institution, length of the borrower's educational program, or 
     the borrower's academic year at an eligible institution.''.
       (e) Repeals.--
       (1) In general.--Sections 439 of the Higher Education Act 
     of 1965 (20 U.S.C. 1087-2) and 440 of such Act (as added by 
     subsection (a) of this section) are repealed.
       (2) Effective date.--The repeals made by paragraph (1) 
     shall be effective one year after--
       (A) the date on which all of the obligations of the trust 
     established under section 440(d)(1) of the Higher Education 
     Act of 1965 (as added by subsection (a)) have been 
     extinguished, if a reorganization occurs in accordance with 
     section 440 of such Act; or
       (B) the date on which all of the obligations of the trust 
     established under subsection 439(s)(3)(A) of such Act (as 
     added by subsection (c)) have been extinguished, if a 
     reorganization does not occur in accordance with section 440 
     of such Act.
       (f) Association Names.--Upon dissolution in accordance with 
     section 439(s) of the Higher Education Act of 1965 (20 U.S.C. 
     1087-2), the names ``Student Loan Marketing Association'', 
     ``Sallie Mae'', and any variations thereof may not be used by 
     any entity engaged in any business similar to the business 
     conducted pursuant to section 439 of such Act (as such 
     section was in effect on the date of enactment of this Act) 
     without the approval of the Secretary of the Treasury.
       (g) Right to Enforce.--The Secretary of Education or the 
     Secretary of the Treasury, as appropriate, may request that 
     the Attorney General bring an action in the United States 
     District Court for the District of Columbia for the 
     enforcement of any provision of subsection (f), or may, under 
     the direction or control of the Attorney General, bring such 
     an action. Such court shall have jurisdiction and power to 
     order and require compliance with subsection (f).

     SEC. 102. CONNIE LEE PRIVATIZATION.

       (a) Status of the Corporation and Corporate Powers; 
     Obligations Not Federally Guaranteed.--
       (1) Status of the corporation.--The Corporation shall not 
     be an agency, instrumentality, or establishment of the United 
     States Government, nor a Government corporation, nor a 
     Government controlled corporation, as such terms are defined 
     in section 103 of title 5, United States Code. No action 
     under section 1491 of title 28, United States Code (commonly 
     known as the Tucker Act) shall be allowable against the 
     United States based on the actions of the Corporation.
       (2) Corporate powers.--The Corporation shall be subject to 
     the provisions of this section, and, to the extent not 
     inconsistent with this section, to the District of Columbia 
     Business Corporation Act (or the comparable law of another 
     State, if applicable). The Corporation shall have the powers 
     conferred upon a corporation by the District of Columbia 
     Business Corporation Act (or such other applicable State law) 
     as from time to time in effect in order to conduct the 
     Corporation's affairs as a private, for-profit corporation 
     and to carry out the Corporation's purposes and activities 
     incidental thereto. The Corporation shall have the power to 
     enter into contracts, to execute instruments, to incur 
     liabilities, to provide products and services, and to do all 
     things as are necessary or incidental to the proper 
     management of the Corporation's affairs and the efficient 
     operation of a private, for-profit business.
       (3) Limitation on ownership of stock.--
       (A) Secretary of the treasury.--The Secretary of the 
     Treasury, in completing the sale of stock pursuant to 
     subsection (c), may not sell or issue the stock held by the 
     Secretary of Education to an agency, instrumentality, or 
     establishment of the United States Government, or to a 
     Government corporation or a Government controlled 
     corporation, as such terms are defined in section 103 of 
     title 5, United States Code, or to a government-sponsored 
     enterprise as such term is defined in section 3 of the 
     Congressional Budget Act of 1974 (2 U.S.C. 622).
       (B) Student loan marketing association.--The Student Loan 
     Marketing Association shall not increase its share of the 
     ownership of the Corporation in excess of 42 percent of the 
     shares of stock of the Corporation outstanding on the date of 
     enactment of this Act. The Student Loan Marketing Association 
     shall not control the operation of the Corporation, except 
     that the Student Loan Marketing Association may participate 
     in the election of directors as a shareholder, and may 
     continue to exercise the Student

[[Page H10788]]

     Loan Marketing Association's right to appoint directors under 
     section 754 of the Higher Education Act of 1965 (20 U.S.C. 
     1132f-3) as long as that section is in effect.
       (C) Prohibition.--Until such time as the Secretary of the 
     Treasury sells the stock of the Corporation owned by the 
     Secretary of Education pursuant to subsection (c), the 
     Student Loan Marketing Association shall not provide 
     financial support or guarantees to the Corporation.
       (D) Financial support or guarantees.--After the Secretary 
     of the Treasury sells the stock of the Corporation owned by 
     the Secretary of Education pursuant to subsection (c), the 
     Student Loan Marketing Association may provide financial 
     support or guarantees to the Corporation, if such support or 
     guarantees are subject to terms and conditions that are no 
     more advantageous to the Corporation than the terms and 
     conditions the Student Loan Marketing Association provides to 
     other entities, including, where applicable, other monoline 
     financial guaranty corporations in which the Student Loan 
     Marketing Association has no ownership interest.
       (4) No federal guarantee.--
       (A) Obligations insured by the corporation.--
       (i) Full faith and credit of the united states.--No 
     obligation that is insured, guaranteed, or otherwise backed 
     by the Corporation shall be deemed to be an obligation that 
     is guaranteed by the full faith and credit of the United 
     States.
       (ii) Student loan marketing association.--No obligation 
     that is insured, guaranteed, or otherwise backed by the 
     Corporation shall be deemed to be an obligation that is 
     guaranteed by the Student Loan Marketing Association.
       (iii) Special rule.--This paragraph shall not affect the 
     determination of whether such obligation is guaranteed for 
     purposes of Federal income taxes.
       (B) Securities offered by the corporation.--No debt or 
     equity securities of the Corporation shall be deemed to be 
     guaranteed by the full faith and credit of the United States.
       (5) Definition.--The term ``Corporation'' as used in this 
     section means the College Construction Loan Insurance 
     Association as in existence on the day before the date of 
     enactment of this Act, and any successor corporation.
       (b) Related Privatization Requirements.--
       (1) Notice requirements.--
       (A) In general.--During the six-year period following the 
     date of enactment of this Act, the Corporation shall include, 
     in each of the Corporation's contracts for the insurance, 
     guarantee, or reinsurance of obligations, and in each 
     document offering debt or equity securities of the 
     Corporation, a prominent statement providing notice that--
       (i) such obligations or such securities, as the case may 
     be, are not obligations of the United States, nor are such 
     obligations or such securities, as the case may be, 
     guaranteed in any way by the full faith and credit of the 
     United States; and
       (ii) the Corporation is not an instrumentality of the 
     United States.
       (B) Additional notice.--During the five-year period 
     following the sale of stock pursuant to subsection (c)(1), in 
     addition to the notice requirements in subparagraph (A), the 
     Corporation shall include, in each of the contracts and 
     documents referred to in such subparagraph, a prominent 
     statement providing notice that the United States is not an 
     investor in the Corporation.
       (2) Corporate charter.--The Corporation's charter shall be 
     amended as necessary and without delay to conform to the 
     requirements of this section.
       (3) Corporate name.--The name of the Corporation, or of any 
     direct or indirect subsidiary thereof, may not contain the 
     term ``College Construction Loan Insurance Association'', or 
     any substantially similar variation thereof.
       (4) Articles of incorporation.--The Corporation shall amend 
     the Corporation's articles of incorporation without delay to 
     reflect that one of the purposes of the Corporation shall be 
     to guarantee, insure, and reinsure bonds, leases, and other 
     evidences of debt of educational institutions, including 
     Historically Black Colleges and Universities and other 
     academic institutions which are ranked in the lower 
     investment grade category using a nationally recognized 
     credit rating system.
       (5) Requirements until stock sale.--Notwithstanding 
     subsection (d), the requirements of sections 754 and 760 of 
     the Higher Education Act of 1965 (20 U.S.C. 1132f-3 and 
     1132f-9), as such sections were in effect on the day before 
     the date of enactment of this Act, shall continue to be 
     effective until the day immediately following the date of 
     closing of the purchase of the Secretary of Education's stock 
     (or the date of closing of the final purchase, in the case of 
     multiple transactions) pursuant to subsection (c)(1) of this 
     Act.
       (c) Sale of Federally Owned Stock.--
       (1) Sale of stock required.--The Secretary of the Treasury 
     shall sell, pursuant to section 324 of title 31, United 
     States Code, the stock of the Corporation owned by the 
     Secretary of Education as soon as possible after the date of 
     enactment of this Act, but not later than six months after 
     such date.
       (2) Purchase by the corporation.--In the event that the 
     Secretary of the Treasury is unable to sell the stock, or any 
     portion thereof, at a price acceptable to the Secretary of 
     Education and the Secretary of the Treasury, the Corporation 
     shall purchase, within six months after the date of enactment 
     of this Act, such stock at a price determined by the 
     Secretary of the Treasury and acceptable to the Corporation 
     based on the independent appraisal of one or more nationally 
     recognized financial firms, except that such price shall not 
     exceed the value of the Secretary of Education's stock as 
     determined by the Congressional Budget Office in House Report 
     104-153, dated June 22, 1995.
       (3) Reimbursement of costs of sale.--The Secretary of the 
     Treasury shall be reimbursed from the proceeds of the sale of 
     the stock under this subsection for all reasonable costs 
     related to such sale, including all reasonable expenses 
     relating to one or more independent appraisals under this 
     subsection.
       (4) Assistance by the corporation.--The Corporation shall 
     provide such assistance as the Secretary of the Treasury and 
     the Secretary of Education may require to facilitate the sale 
     of the stock under this subsection.
       (d) Repeal of Statutory Restrictions and Related 
     Provisions.--Part D of title VII of the Higher Education Act 
     of 1965 (20 U.S.C. 1001 et seq.) is repealed.

     SEC. 103. ELIGIBLE INSTITUTION.

       (a) Amendment.--Section 481(b) of the Higher Education Act 
     of 1965 (20 U.S.C. 1088(b)) is amended by inserting after the 
     end of the first sentence the following new sentence: ``For 
     the purposes of determining whether an institution meets the 
     requirements of clause (6), the Secretary shall not consider 
     the financial information of any institution for a fiscal 
     year that began on or before April 30, 1994.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to any determination made on or after July 1, 
     1994, by the Secretary of Education pursuant to section 
     481(b)(6) of the Higher Education Act of 1965 (20 U.S.C. 
     1088(b)(6)).
                    TITLE II--MUSEUMS AND LIBRARIES

     SEC. 201. MUSEUM AND LIBRARY SERVICES.

       The Museum Services Act (20 U.S.C. 961 et seq.) is amended 
     to read as follows:
                ``TITLE II--MUSEUM AND LIBRARY SERVICES
                    ``Subtitle A--General Provisions

     ``SEC. 201. SHORT TITLE.

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

     ``SEC. 202. GENERAL DEFINITIONS.

       ``As used in this title:
       ``(1) Commission.--The term `Commission' means the National 
     Commission on Libraries and Information Science established 
     under section 3 of the National Commission on Libraries and 
     Information Sciences Act (20 U.S.C. 1502).
       ``(2) Director.--The term `Director' means the Director of 
     the Institute appointed under section 204.
       ``(3) Institute.--The term `Institute' means the Institute 
     of Museum and Library Services established under section 203.
       ``(4) Museum board.--The term `Museum Board' means the 
     National Museum Services Board established under section 275.

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

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

     ``SEC. 204. DIRECTOR OF THE INSTITUTE.

       ``(a) Appointment.--
       ``(1) In general.--The Institute shall be headed by a 
     Director, appointed by the President, by and with the advice 
     and consent of the Senate.
       ``(2) Term.--The Director shall serve for a term of 4 
     years.
       ``(3) Qualifications.--Beginning with the first individual 
     appointed to the position of Director after the date of the 
     enactment of the Government-Sponsored Enterprise 
     Privatization Act of 1996, every second individual so 
     appointed shall be appointed from among individuals who have 
     special competence with regard to library and information 
     services. Beginning with the second individual appointed to 
     the position of Director after the date of enactment of the 
     Government-Sponsored Enterprise Privatization Act of 1996, 
     every second individual so appointed shall be appointed from 
     among individuals who have special competence with regard to 
     museum services.
       ``(b) Compensation.--The Director may be compensated at the 
     rate provided for level III of the Executive Schedule under 
     section 5314 of title 5, United States Code.
       ``(c) Duties and Powers.--The Director shall perform such 
     duties and exercise such powers as may be prescribed by law, 
     including awarding financial assistance for activities 
     described in this title.
       ``(d) Nondelegation.--The Director shall not delegate any 
     of the functions of the Director to any person who is not an 
     officer or employee of the Institute.
       ``(e) Coordination.--The Director shall ensure coordination 
     of the policies and activities of the Institute with the 
     policies and activities of other agencies and offices of the 
     Federal Government having interest in and responsibilities 
     for the improvement of museums and libraries and information 
     services.

[[Page H10789]]

     ``SEC. 205. DEPUTY DIRECTORS.

       ``The Office of Library Services shall be headed by a 
     Deputy Director, who shall be appointed by the Director from 
     among individuals who have a graduate degree in library 
     science and expertise in library and information services. 
     The Office of Museum Services shall be headed by a Deputy 
     Director, who shall be appointed by the Director from among 
     individuals who have expertise in museum services.

     ``SEC. 206. PERSONNEL.

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

     ``SEC. 207. CONTRIBUTIONS.

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

     ``SEC. 211. SHORT TITLE.

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

     ``SEC. 212. PURPOSE.

       ``It is the purpose of this subtitle--
       ``(1) to consolidate Federal library service programs;
       ``(2) to stimulate excellence and promote access to 
     learning and information resources in all types of libraries 
     for individuals of all ages;
       ``(3) to promote library services that provide all users 
     access to information through State, regional, national and 
     international electronic networks;
       ``(4) to provide linkages among and between libraries; and
       ``(5) to promote targeted library services to people of 
     diverse geographic, cultural, and socioeconomic backgrounds, 
     to individuals with disabilities, and to people with limited 
     functional literacy or information skills.

     ``SEC. 213. DEFINITIONS.

       ``As used in this subtitle:
       ``(1) Indian tribe.--The term `Indian tribe' means any 
     tribe, band, nation, or other organized group or community, 
     including any Alaska native village, regional corporation, or 
     village corporation, as defined in or established pursuant to 
     the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
     seq.), which is recognized by the Secretary of the Interior 
     as eligible for the special programs and services provided by 
     the United States to Indians because of their status as 
     Indians.
       ``(2) Library.--The term `library' includes--
       ``(A) a public library;
       ``(B) a public elementary school or secondary school 
     library;
       ``(C) an academic library;
       ``(D) a research library, which for the purposes of this 
     subtitle means a library that--
       ``(i) makes publicly available library services and 
     materials suitable for scholarly research and not otherwise 
     available to the public; and
       ``(ii) is not an integral part of an institution of higher 
     education; and
       ``(E) a private library, but only if the State in which 
     such private library is located determines that the library 
     should be considered a library for purposes of this subtitle.
       ``(3) Library consortium.--The term `library consortium' 
     means any local, statewide, regional, interstate, or 
     international cooperative association of library entities 
     which provides for the systematic and effective coordination 
     of the resources of school, public, academic, and special 
     libraries and information centers, for improved services for 
     the clientele of such library entities.
       ``(4) State.--The term `State', unless otherwise specified, 
     includes each of the 50 States of the United States, the 
     District of Columbia, the Commonwealth of Puerto Rico, 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.
       ``(5) State library administrative agency.--The term `State 
     library administrative agency' means the official agency of a 
     State charged by the law of the State with the extension and 
     development of public library services throughout the State.
       ``(6) State plan.--The term `State plan' means the document 
     which gives assurances that the officially designated State 
     library administrative agency has the fiscal and legal 
     authority and capability to administer all aspects of this 
     subtitle, provides assurances for establishing the State's 
     policies, priorities, criteria, and procedures necessary to 
     the implementation of all programs under this subtitle, 
     submits copies for approval as required by regulations 
     promulgated by the Director, identifies a State's library 
     needs, and sets forth the activities to be taken toward 
     meeting the identified needs supported with the assistance of 
     Federal funds made available under this subtitle.

     ``SEC. 214. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     $150,000,000 for fiscal year 1997 and such sums as may be 
     necessary for each of the fiscal years 1998 through 2002 to 
     carry out this subtitle.
       ``(2) Transfer.--The Secretary of Education shall--
       ``(A) transfer any funds appropriated under the authority 
     of paragraph (1) to the Director to enable the Director to 
     carry out this subtitle; and
       ``(B) not exercise any authority concerning the 
     administration of this title other than the transfer 
     described in subparagraph (A).
       ``(b) Forward Funding.--
       ``(1) In general.--To the end of affording the responsible 
     Federal, State, and local officers adequate notice of 
     available Federal financial assistance for carrying out 
     ongoing library activities and projects, appropriations for 
     grants, contracts, or other payments under any program under 
     this subtitle are authorized to be included in the 
     appropriations Act for the fiscal year preceding the fiscal 
     year during which such activities and projects shall be 
     carried out.
       ``(2) Additional authorization of appropriations.--In order 
     to effect a transition to the timing of appropriation action 
     authorized by subsection (a), the application of this section 
     may result in the enactment, in a fiscal year, of separate 
     appropriations for a program under this subtitle (whether in 
     the same appropriations Act or otherwise) for two consecutive 
     fiscal years.
       ``(c) Administration.--Not more than 3 percent of the funds 
     appropriated under this section for a fiscal year may be used 
     to pay for the Federal administrative costs of carrying out 
     this subtitle.

                ``CHAPTER 1--BASIC PROGRAM REQUIREMENTS

     ``SEC. 221. RESERVATIONS AND ALLOTMENTS.

       ``(a) Reservations.--
       ``(1) In general.--From the amount appropriated under the 
     authority of section 214 for any fiscal year, the Director--
       ``(A) shall reserve 1\1/2\ percent to award grants in 
     accordance with section 261; and
       ``(B) shall reserve 4 percent to award national leadership 
     grants or contracts in accordance with section 262.
       ``(2) Special rule.--If the funds reserved pursuant to 
     paragraph (1)(B) for a fiscal year have not been obligated by 
     the end of such fiscal year, then such funds shall be 
     allotted in accordance with subsection (b) for the fiscal 
     year succeeding the fiscal year for which the funds were so 
     reserved.
       ``(b) Allotments.--
       ``(1) In general.--From the sums appropriated under the 
     authority of section 214 and not reserved under subsection 
     (a) for any fiscal year, the Director shall award grants from 
     minimum allotments, as determined under paragraph (3), to 
     each State. Any sums remaining after minimum allotments are 
     made for such year shall be allotted in the manner set forth 
     in paragraph (2).
       ``(2) Remainder.--From the remainder of any sums 
     appropriated under the authority of section 214 that are not 
     reserved under subsection (a) and not allotted under 
     paragraph (1) for any fiscal year, the Director shall award 
     grants to each State in an amount that bears the same 
     relation to such remainder as the population of the State 
     bears to the population of all States.
       ``(3) Minimum allotment.--
       ``(A) In general.--For the purposes of this subsection, the 
     minimum allotment for each State shall be $340,000, except 
     that the minimum allotment shall be $40,000 in the case of 
     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.
       ``(B) Ratable reductions.--If the sum appropriated under 
     the authority of section 214 and not reserved under 
     subsection (a) for any fiscal year is insufficient to fully 
     satisfy the aggregate of the minimum allotments for all 
     States for that purpose for such year, each of such minimum 
     allotments shall be reduced ratably.
       ``(C) Special rule.--
       ``(i) In general.--Notwithstanding any other provision of 
     this subsection and using funds allotted for the Republic of 
     the Marshall Islands, the Federated States of Micronesia, and 
     the Republic of Palau under this subsection, the Director 
     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 
     Director determines are not inconsistent with this 
     subparagraph.
       ``(ii) Award basis.--The Director shall award grants 
     pursuant to clause (i) on a competitive basis and pursuant to 
     recommendations from the Pacific Region Educational 
     Laboratory in Honolulu, Hawaii.
       ``(iii) 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

[[Page H10790]]

     this subtitle for any fiscal year that begins after September 
     30, 2001.
       ``(iv) Administrative costs.--The Director may provide not 
     more than 5 percent of the funds made available for grants 
     under this subparagraph to pay the administrative costs of 
     the Pacific Region Educational Laboratory regarding 
     activities assisted under this subparagraph.
       ``(4) Data.--The population of each State and of all the 
     States shall be determined by the Director on the basis of 
     the most recent data available from the Bureau of the Census.

     ``SEC. 222. ADMINISTRATION.

       ``(a) In General.--Not more than 4 percent of the total 
     amount of funds received under this subtitle for any fiscal 
     year by a State may be used for administrative costs.
       ``(b) Construction.--Nothing in this section shall be 
     construed to limit spending for evaluation costs under 
     section 224(c) from sources other than this subtitle.

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

       ``(a) Payments.--Subject to appropriations provided 
     pursuant to section 214, the Director shall pay to each State 
     library administrative agency having a State plan approved 
     under section 224 the Federal share of the cost of the 
     activities described in the State plan.
       ``(b) Federal Share.--
       ``(1) In general.--The Federal share shall be 66 percent.
       ``(2) Non-federal share.--The non-Federal share of payments 
     shall be provided from non-Federal, State, or local sources.
       ``(c) Maintenance of Effort.--
       ``(1) State expenditures.--
       ``(A) Requirement.--
       ``(i) In general.--The amount otherwise payable to a State 
     for a fiscal year pursuant to an allotment under this chapter 
     shall be reduced if the level of State expenditures, as 
     described in paragraph (2), for the previous fiscal year is 
     less than the average of the total of such expenditures for 
     the 3 fiscal years preceding that previous fiscal year. The 
     amount of the reduction in allotment for any fiscal year 
     shall be equal to the amount by which the level of such State 
     expenditures for the fiscal year for which the determination 
     is made is less than the average of the total of such 
     expenditures for the 3 fiscal years preceding the fiscal year 
     for which the determination is made.
       ``(ii) Calculation.--Any decrease in State expenditures 
     resulting from the application of subparagraph (B) shall be 
     excluded from the calculation of the average level of State 
     expenditures for any 3-year period described in clause (i).
       ``(B) Decrease in federal support.--If the amount made 
     available under this subtitle for a fiscal year is less than 
     the amount made available under this subtitle for the 
     preceding fiscal year, then the expenditures required by 
     subparagraph (A) for such preceding fiscal year shall be 
     decreased by the same percentage as the percentage decrease 
     in the amount so made available.
       ``(2) Level of state expenditures.--The level of State 
     expenditures for the purposes of paragraph (1) shall include 
     all State dollars expended by the State library 
     administrative agency for library programs that are 
     consistent with the purposes of this subtitle. All funds 
     included in the maintenance of effort calculation under this 
     subsection shall be expended during the fiscal year for which 
     the determination is made, and shall not include capital 
     expenditures, special one-time project costs, or similar 
     windfalls.
       ``(3) Waiver.--The Director may waive the requirements of 
     paragraph (1) if the Director determines that such a waiver 
     would be equitable due to exceptional or uncontrollable 
     circumstances such as a natural disaster or a precipitous and 
     unforeseen decline in the financial resources of the State.

     ``SEC. 224. STATE PLANS.

       ``(a) State Plan Required.--
       ``(1) In general.--In order to be eligible to receive a 
     grant under this subtitle, a State library administrative 
     agency shall submit a State plan to the Director not later 
     than April 1, 1997.
       ``(2) Duration.--The State plan shall cover a period of 5 
     fiscal years.
       ``(3) Revisions.--If a State library administrative agency 
     makes a substantive revision to its State plan, then the 
     State library administrative agency shall submit to the 
     Director an amendment to the State plan containing such 
     revision not later than April 1 of the fiscal year preceding 
     the fiscal year for which the amendment will be effective.
       ``(b) Contents.--The State plan shall--
       ``(1) establish goals, and specify priorities, for the 
     State consistent with the purposes of this subtitle;
       ``(2) describe activities that are consistent with the 
     goals and priorities established under paragraph (1), the 
     purposes of this subtitle, and section 231, that the State 
     library administrative agency will carry out during such year 
     using such grant;
       ``(3) describe the procedures that such agency will use to 
     carry out the activities described in paragraph (2);
       ``(4) describe the methodology that such agency will use to 
     evaluate the success of the activities established under 
     paragraph (2) in achieving the goals and meeting the 
     priorities described in paragraph (1);
       ``(5) describe the procedures that such agency will use to 
     involve libraries and library users throughout the State in 
     policy decisions regarding implementation of this subtitle; 
     and
       ``(6) provide assurances satisfactory to the Director that 
     such agency will make such reports, in such form and 
     containing such information, as the Director may reasonably 
     require to carry out this subtitle and to determine the 
     extent to which funds provided under this subtitle have been 
     effective in carrying out the purposes of this subtitle.
       ``(c) Evaluation and Report.--Each State library 
     administrative agency receiving a grant under this subtitle 
     shall independently evaluate, and report to the Director 
     regarding, the activities assisted under this subtitle, prior 
     to the end of the 5-year plan.
       ``(d) Information.--Each library receiving assistance under 
     this subtitle shall submit to the State library 
     administrative agency such information as such agency may 
     require to meet the requirements of subsection (c).
       ``(e) Approval.--
       ``(1) In general.--The Director shall approve any State 
     plan under this subtitle that meets the requirements of this 
     subtitle and provides satisfactory assurances that the 
     provisions of such plan will be carried out.
       ``(2) Public availability.--Each State library 
     administrative agency receiving a grant under this subtitle 
     shall make the State plan available to the public.
       ``(3) Administration.--If the Director determines that the 
     State plan does not meet the requirements of this section, 
     the Director shall--
       ``(A) immediately notify the State library administrative 
     agency of such determination and the reasons for such 
     determination;
       ``(B) offer the State library administrative agency the 
     opportunity to revise its State plan;
       ``(C) provide technical assistance in order to assist the 
     State library administrative agency in meeting the 
     requirements of this section; and
       ``(D) provide the State library administrative agency the 
     opportunity for a hearing.

                     ``CHAPTER 2--LIBRARY PROGRAMS

     ``SEC. 231. GRANTS TO STATES.

       ``(a) In General.--Of the funds provided to a State library 
     administrative agency under section 214, such agency shall 
     expend, either directly or through subgrants or cooperative 
     agreements, at least 96 percent of such funds for--
       ``(1) establishing or enhancing electronic linkages among 
     or between libraries and library consortia; and
       ``(2) targeting library and information services to persons 
     having difficulty using a library and to underserved urban 
     and rural communities, including children (from birth through 
     age 17) from families with incomes below 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.
       ``(b) Special Rule.--Each State library administrative 
     agency receiving funds under this chapter may apportion the 
     funds available for the purposes described in subsection (a) 
     between the two purposes described in paragraphs (1) and (2) 
     of such subsection, as appropriate, to meet the needs of the 
     individual State.

                 ``CHAPTER 3--ADMINISTRATIVE PROVISIONS

                   ``Subchapter A--State Requirements

     ``SEC. 251. STATE ADVISORY COUNCILS.

       ``Each State desiring assistance under this subtitle may 
     establish a State advisory council which is broadly 
     representative of the library entities in the State, 
     including public, school, academic, special, and 
     institutional libraries, and libraries serving individuals 
     with disabilities.

                  ``Subchapter B--Federal Requirements

     ``SEC. 261. SERVICES FOR INDIAN TRIBES.

       ``From amounts reserved under section 221(a)(1)(A) for any 
     fiscal year the Director shall award grants to organizations 
     primarily serving and representing Indian tribes to enable 
     such organizations to carry out the activities described in 
     section 231.

     ``SEC. 262. NATIONAL LEADERSHIP GRANTS OR CONTRACTS.

       ``(a) In General.--From the amounts reserved under section 
     221(a)(1)(B) for any fiscal year the Director shall establish 
     and carry out a program awarding national leadership grants 
     or contracts to enhance the quality of library services 
     nationwide and to provide coordination between libraries and 
     museums. Such grants or contracts shall be used for 
     activities that may include--
       ``(1) education and training of persons in library and 
     information science, particularly in areas of new technology 
     and other critical needs, including graduate fellowships, 
     traineeships, institutes, or other programs;
       ``(2) research and demonstration projects related to the 
     improvement of libraries, education in library and 
     information science, enhancement of library services through 
     effective and efficient use of new technologies, and 
     dissemination of information derived from such projects;
       ``(3) preservation or digitization of library materials and 
     resources, giving priority to projects emphasizing 
     coordination, avoidance of duplication, and access by 
     researchers beyond the institution or library entity 
     undertaking the project; and
       ``(4) model programs demonstrating cooperative efforts 
     between libraries and museums.
       ``(b) Grants or Contracts.--
       ``(1) In general.--The Director may carry out the 
     activities described in subsection (a)

[[Page H10791]]

     by awarding grants to, or entering into contracts with, 
     libraries, agencies, institutions of higher education, or 
     museums, where appropriate.
       ``(2) Competitive basis.--Grants and contracts under this 
     section shall be awarded on a competitive basis.
       ``(c) Special Rule.--The Director shall make every effort 
     to ensure that activities assisted under this section are 
     administered by appropriate library and museum professionals 
     or experts.

     ``SEC. 263. STATE AND LOCAL INITIATIVES.

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

     ``SEC. 271. PURPOSE.

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

     ``SEC. 272. DEFINITIONS.

       ``As used in this subtitle:
       ``(1) Museum.--The term `museum' means a public or private 
     nonprofit agency or institution organized on a permanent 
     basis for essentially educational or aesthetic purposes, that 
     utilizes a professional staff, owns or utilizes tangible 
     objects, cares for the tangible objects, and exhibits the 
     tangible objects to the public on a regular basis.
       ``(2) State.--The term `State' means each of the 50 States 
     of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, 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.

     ``SEC. 273. MUSEUM SERVICES ACTIVITIES.

       ``(a) Grants.--The Director, subject to the policy 
     direction of the Museum Board, may make grants to museums to 
     pay for the Federal share of the cost of increasing and 
     improving museum services, through such activities as--
       ``(1) programs that enable museums to construct or install 
     displays, interpretations, and exhibitions in order to 
     improve museum services provided to the public;
       ``(2) assisting museums in developing and maintaining 
     professionally trained or otherwise experienced staff to meet 
     the needs of the museums;
       ``(3) assisting museums in meeting the administrative costs 
     of preserving and maintaining the collections of the museums, 
     exhibiting the collections to the public, and providing 
     educational programs to the public through the use of the 
     collections;
       ``(4) assisting museums in cooperating with each other in 
     developing traveling exhibitions, meeting transportation 
     costs, and identifying and locating collections available for 
     loan;
       ``(5) assisting museums in the conservation of their 
     collections;
       ``(6) developing and carrying out specialized programs for 
     specific segments of the public, such as programs for urban 
     neighborhoods, rural areas, Indian reservations, and penal 
     and other State institutions; and
       ``(7) model programs demonstrating cooperative efforts 
     between libraries and museums.
       ``(b) Contracts and Cooperative Agreements.--
       ``(1) Projects to strengthen museum services.--The 
     Director, subject to the policy direction of the Museum 
     Board, is authorized to enter into contracts and cooperative 
     agreements with appropriate entities, as determined by the 
     Director, to pay for the Federal share of enabling the 
     entities to undertake projects designed to strengthen museum 
     services, except that any contracts or cooperative agreements 
     entered into pursuant to this subsection shall be effective 
     only to such extent or in such amounts as are provided in 
     appropriations acts.
       ``(2) Limitation on amount.--The aggregate amount of 
     financial assistance made available under this subsection for 
     a fiscal year shall not exceed 15 percent of the amount 
     appropriated under this subtitle for such fiscal year.
       ``(3) Operational expenses.--No financial assistance may be 
     provided under this subsection to pay for operational 
     expenses.
       ``(c) Federal Share.--
       ``(1) 50 percent.--Except as provided in paragraph (2), the 
     Federal share described in subsections (a) and (b) shall be 
     not more than 50 percent.
       ``(2) Greater than 50 percent.--The Director may use not 
     more than 20 percent of the funds made available under this 
     subtitle for a fiscal year to make grants under subsection 
     (a), or enter into contracts or agreements under subsection 
     (b), for which the Federal share may be greater than 50 
     percent.
       ``(d) Review and Evaluation.--The Director shall establish 
     procedures for reviewing and evaluating grants, contracts, 
     and cooperative agreements made or entered into under this 
     subtitle. Procedures for reviewing grant applications or 
     contracts and cooperative agreements for financial assistance 
     under this subtitle shall not be subject to any review 
     outside of the Institute.

     ``SEC. 274. AWARD.

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

     ``SEC. 275. NATIONAL MUSEUM SERVICES BOARD.

       ``(a) Establishment.--There is established in the Institute 
     a National Museum Services Board.
       ``(b) Composition and Qualifications.--
       ``(1) Composition.--The Museum Board shall consist of the 
     Director and 14 members appointed by the President, by and 
     with the advice and consent of the Senate.
       ``(2) Qualifications.--The appointive members of the Museum 
     Board shall be selected from among citizens of the United 
     States--
       ``(A) who are members of the general public;
       ``(B) who are or have been affiliated with--
       ``(i) resources that, collectively, are broadly 
     representative of the curatorial, conservation, educational, 
     and cultural resources of the United States; or
       ``(ii) museums that, collectively, are broadly 
     representative of various types of museums, including museums 
     relating to science, history, technology, art, zoos, and 
     botanical gardens; and
       ``(C) who are recognized for their broad knowledge, 
     expertise, or experience in museums or commitment to museums.
       ``(3) Geographic and other representation.--Members of the 
     Museum Board shall be appointed to reflect persons from 
     various geographic regions of the United States. The Museum 
     Board may not include, at any time, more than 3 members from 
     a single State. In making such appointments, the President 
     shall give due regard to equitable representation of women, 
     minorities, and persons with disabilities who are involved 
     with museums.
       ``(c) Terms.--
       ``(1) In general.--Each appointive member of the Museum 
     Board shall serve for a term of 5 years, except that--
       ``(A) of the members first appointed, 3 shall serve for 
     terms of 5 years, 3 shall serve for terms of 4 years, 3 shall 
     serve for terms of 3 years, 3 shall serve for terms of 2 
     years, and 2 shall serve for terms of 1 year, as designated 
     by the President at the time of nomination for appointment; 
     and
       ``(B) any member appointed to fill a vacancy shall serve 
     for the remainder of the term for which the predecessor of 
     the member was appointed.
       ``(2) Reappointment.--No member of the Museum Board who has 
     been a member for more than 7 consecutive years shall be 
     eligible for reappointment.
       ``(3) Service until successor takes office.--
     Notwithstanding any other provision of this subsection, a 
     member of the Museum Board shall serve after the expiration 
     of the term of the member until the successor to the member 
     takes office.
       ``(d) Duties and Powers.--The Museum Board shall have the 
     responsibility to advise the Director on general policies 
     with respect to the duties, powers, and authority of the 
     Institute relating to museum services, including general 
     policies with respect to--
       ``(1) financial assistance awarded under this subtitle for 
     museum services; and
       ``(2) projects described in section 262(a)(4).
       ``(e) Chairperson.--The President shall designate 1 of the 
     appointive members of the Museum Board as Chairperson of the 
     Museum Board.
       ``(f) Meetings.--
       ``(1) In general.--The Museum Board shall meet--
       ``(A) not less than 3 times each year, including--
       ``(i) not less than 2 times each year separately; and
       ``(ii) not less than 1 time each year in a joint meeting 
     with the Commission, convened for purposes of making general 
     policies with respect to financial assistance for projects 
     described in section 262(a)(4); and
       ``(B) at the call of the Director.
       ``(2) Vote.--All decisions by the Museum Board with respect 
     to the exercise of the duties and powers of the Museum Board 
     shall be made by a majority vote of the members of the Museum 
     Board who are present. All decisions by the Commission and 
     the Museum Board with respect to the policies described in 
     paragraph (1)(A)(ii) shall be made by a \2/3\ majority vote 
     of the total number of the members of the Commission and the 
     Museum Board who are present.
       ``(g) Quorum.--A majority of the members of the Museum 
     Board shall constitute a quorum for the conduct of business 
     at official meetings of the Museum Board, but a lesser number 
     of members may hold hearings. A majority of the members of 
     the Commission and a majority of the members of the Museum 
     Board shall constitute a quorum for the conduct of business 
     at official joint meetings of the Commission and the Museum 
     Board.
       ``(h) Compensation and Travel Expenses.--

[[Page H10792]]

       ``(1) Compensation.--Each member of the Museum Board who is 
     not an officer or employee of the Federal Government may be 
     compensated at a rate to be fixed by the President, but not 
     to exceed the daily equivalent of the maximum rate authorized 
     for a position above grade GS-15 of the General Schedule 
     under section 5108 of title 5, United States Code, for each 
     day (including travel time) during which such member is 
     engaged in the performance of the duties of the Museum Board. 
     All members of the Museum Board who are officers or employees 
     of the Federal Government shall serve without compensation in 
     addition to compensation received for their services as 
     officers or employees of the Federal Government.
       ``(2) Travel expenses.--The members of the Museum Board may 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, in the same amounts and to the same extent, as 
     authorized under section 5703 of title 5, United States Code, 
     for persons employed intermittently in Federal Government 
     service.
       ``(i) Coordination.--The Museum Board, with the advice of 
     the Director, shall take steps to ensure that the policies 
     and activities of the Institute are coordinated with other 
     activities of the Federal Government.

     ``SEC. 276. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) Grants.--For the purpose of carrying out this 
     subtitle, there are authorized to be appropriated to the 
     Director $28,700,000 for the fiscal year 1997, and such sums 
     as may be necessary for each of the fiscal years 1998 through 
     2002.
       ``(b) Administration.--Not more than 10 percent of the 
     funds appropriated under this section for a fiscal year may 
     be used to pay for the administrative costs of carrying out 
     this subtitle.
       ``(c) Sums Remaining Available.--Sums appropriated pursuant 
     to subsection (a) for any fiscal year shall remain available 
     for obligation until expended.''.

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

       (a) Functions.--Section 5 of the National Commission on 
     Libraries and Information Science Act (20 U.S.C. 1504) is 
     amended--
       (1) by redesignating subsections (b) through (d) as 
     subsections (d) through (f), respectively; and
       (2) by inserting after subsection (a) the following:
       ``(b) The Commission shall have the responsibility to 
     advise the Director of the Institute of Museum and Library 
     Services on general policies with respect to the duties, 
     powers, and authority of the Institute of Museum and Library 
     Services relating to library services, including--
       ``(1) general policies with respect to--
       ``(A) financial assistance awarded under the Museum and 
     Library Services Act for library services; and
       ``(B) projects described in section 262(a)(4) of such Act; 
     and
       ``(2) measures to ensure that the policies and activities 
     of the Institute of Museum and Library Services are 
     coordinated with other activities of the Federal Government.
       ``(c)(1) The Commission shall meet not less than 1 time 
     each year in a joint meeting with the National Museum 
     Services Board, convened for purposes of providing advice on 
     general policy with respect to financial assistance for 
     projects described in section 262(a)(4) of such Act.
       ``(2) All decisions by the Commission and the National 
     Museum Services Board with respect to the advice on general 
     policy described in paragraph (1) shall be made by a \2/3\ 
     majority vote of the total number of the members of the 
     Commission and the National Museum Services Board who are 
     present.
       ``(3) A majority of the members of the Commission and a 
     majority of the members of the National Museum Services Board 
     shall constitute a quorum for the conduct of business at 
     official joint meetings of the Commission and the National 
     Museum Services Board.''.
       (b) Membership.--Section 6 of the National Commission on 
     Libraries and Information Science Act (20 U.S.C. 1505) is 
     amended--
       (1) in subsection (a)--
       (A) in the first sentence, by striking ``Librarian of 
     Congress'' and inserting ``Librarian of Congress, the 
     Director of the Institute of Museum and Library Services (who 
     shall serve as an ex officio, nonvoting member),'';
       (B) in the second sentence--
       (i) by striking ``special competence or interest in'' and 
     inserting ``special competence in or knowledge of''; and
       (ii) by inserting before the period the following: ``and at 
     least one other of whom shall be knowledgeable with respect 
     to the library and information service and science needs of 
     the elderly'';
       (C) in the third sentence, by inserting ``appointive'' 
     before ``members''; and
       (D) in the last sentence, by striking ``term and at least'' 
     and all that follows and inserting ``term.''; and
       (2) in subsection (b), by striking ``the rate specified'' 
     and all that follows through ``and while'' and inserting 
     ``the daily equivalent of the maximum rate authorized for a 
     position above grade GS-15 of the General Schedule under 
     section 5108 of title 5, United States Code, for each day 
     (including traveltime) during which the members are engaged 
     in the business of the Commission. While''.

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

       (a) Definitions.--For purposes of this section, unless 
     otherwise provided or indicated by the context--
       (1) the term ``Federal agency'' has the meaning given to 
     the term ``agency'' by section 551(1) of title 5, United 
     States Code;
       (2) the term ``function'' means any duty, obligation, 
     power, authority, responsibility, right, privilege, activity, 
     or program; and
       (3) the term ``office'' includes any office, 
     administration, agency, institute, unit, organizational 
     entity, or component thereof.
       (b) Transfer of Functions From the Institute of Museum 
     Services and the Library Program Office.--There are 
     transferred to the Director of the Institute of Museum and 
     Library Services established under section 203 of the Museum 
     and Library Services Act--
       (1) all functions that the Director of the Institute of 
     Museum Services exercised before the date of enactment of 
     this section (including all related functions of any officer 
     or employee of the Institute of Museum Services); and
       (2) all functions that the Director of Library Programs in 
     the Office of Educational Research and Improvement in the 
     Department of Education exercised before the date of 
     enactment of this section and any related function of any 
     officer or employee of the Department of Education.
       (c) Determinations of Certain Functions by the Office of 
     Management and Budget.--If necessary, the Office of 
     Management and Budget shall make any determination of the 
     functions that are transferred under subsection (b).
       (d) Delegation and Assignment.--Except where otherwise 
     expressly prohibited by law or otherwise provided by this 
     section, the Director of the Institute of Museum and Library 
     Services may delegate any of the functions transferred to the 
     Director of the Institute of Museum and Library Services by 
     this section and any function transferred or granted to such 
     Director of the Institute of Museum and Library Services 
     after the effective date of this section to such officers and 
     employees of the Institute of Museum and Library Services as 
     the Director of the Institute of Museum and Library Services 
     may designate, and may authorize successive redelegations of 
     such functions as may be necessary or appropriate, except 
     that any delegation of any such functions with respect to 
     libraries shall be made to the Deputy Director of the Office 
     of Library Services and with respect to museums shall be made 
     to the Deputy Director of the Office of Museum Services. No 
     delegation of functions by the Director of the Institute of 
     Museum and Library Services under this section or under any 
     other provision of this section shall relieve such Director 
     of the Institute of Museum and Library Services of 
     responsibility for the administration of such functions.
       (e) Reorganization.--The Director of the Institute of 
     Museum and Library Services may allocate or reallocate any 
     function transferred under subsection (b) among the officers 
     of the Institute of Museum and Library Services, and may 
     establish, consolidate, alter, or discontinue such 
     organizational entities in the Institute of Museum and 
     Library Services as may be necessary or appropriate.
       (f) Rules.--The Director of the Institute of Museum and 
     Library Services may prescribe, in accordance with chapters 5 
     and 6 of title 5, United States Code, such rules and 
     regulations as the Director of the Institute of Museum and 
     Library Services determines to be necessary or appropriate to 
     administer and manage the functions of the Institute of 
     Museum and Library Services.
       (g) Transfer and Allocations of Appropriations and 
     Personnel.--Except as otherwise provided in this section, the 
     personnel employed in connection with, and the assets, 
     liabilities, contracts, property, records, and unexpended 
     balances of appropriations, authorizations, allocations, and 
     other funds employed, used, held, arising from, available to, 
     or to be made available in connection with the functions 
     transferred by this section, subject to section 1531 of title 
     31, United States Code, shall be transferred to the Institute 
     of Museum and Library Services. Unexpended funds transferred 
     pursuant to this subsection shall be used only for the 
     purposes for which the funds were originally authorized and 
     appropriated.
       (h) Incidental Transfers.--The Director of the Office of 
     Management and Budget, at such time or times as the Director 
     shall provide, may make such determinations as may be 
     necessary with regard to the functions transferred by this 
     section, and make such additional incidental dispositions of 
     personnel, assets, liabilities, grants, contracts, property, 
     records, and unexpended balances of appropriations, 
     authorizations, allocations, and other funds held, used, 
     arising from, available to, or to be made available in 
     connection with such functions, as may be necessary to carry 
     out this section. The Director of the Office of Management 
     and Budget shall provide for the termination of the affairs 
     of all entities terminated by this section and for such 
     further measures and dispositions as may be necessary to 
     effectuate the purposes of this section.
       (i) Effect on Personnel.--
       (1) In general.--Except as otherwise provided by this 
     section, the transfer pursuant to this section of full-time 
     personnel (except special Government employees) and part-time 
     personnel holding permanent positions shall not cause any 
     such employee to be separated or reduced in grade or 
     compensation for 1 year after the date of transfer of such 
     employee under this section.
       (2) Executive schedule positions.--Except as otherwise 
     provided in this section, any

[[Page H10793]]

     person who, on the day preceding the effective date of this 
     section, held a position compensated in accordance with the 
     Executive Schedule prescribed in chapter 53 of title 5, 
     United States Code, and who, without a break in service, is 
     appointed in the Institute of Museum and Library Services to 
     a position having duties comparable to the duties performed 
     immediately preceding such appointment shall continue to be 
     compensated in such new position at not less than the rate 
     provided for such previous position, for the duration of the 
     service of such person in such new position.
       (j) Savings Provisions.--
       (1) Continuing effect of legal documents.--All orders, 
     determinations, rules, regulations, permits, agreements, 
     grants, contracts, certificates, licenses, registrations, 
     privileges, and other administrative actions--
       (A) that have been issued, made, granted, or allowed to 
     become effective by the President, any Federal agency or 
     official of a Federal agency, or by a court of competent 
     jurisdiction, in the performance of functions that are 
     transferred under this section; and
       (B) that were in effect before the effective date of this 
     section, or were final before the effective date of this 
     section and are to become effective on or after the effective 
     date of this section;

     shall continue in effect according to their terms until 
     modified, terminated, superseded, set aside, or revoked in 
     accordance with law by the President, the Director of the 
     Institute of Museum and Library Services or other authorized 
     official, a court of competent jurisdiction, or by operation 
     of law.
       (2) Proceedings not affected.--This section shall not 
     affect any proceedings, including notices of proposed 
     rulemaking, or any application for any license, permit, 
     certificate, or financial assistance pending before the 
     Institute of Museum Services on the effective date of this 
     section, with respect to functions transferred by this 
     section. Such proceedings and applications shall be 
     continued. Orders shall be issued in such proceedings, 
     appeals shall be taken from the orders, and payments shall be 
     made pursuant to the orders, as if this section had not been 
     enacted, and orders issued in any such proceedings shall 
     continue in effect until modified, terminated, superseded, or 
     revoked by a duly authorized official, by a court of 
     competent jurisdiction, or by operation of law. Nothing in 
     this paragraph shall be construed to prohibit the 
     discontinuance or modification of any such proceeding under 
     the same terms and conditions and to the same extent that 
     such proceeding could have been discontinued or modified if 
     this section had not been enacted.
       (3) Suits not affected.--This section shall not affect 
     suits commenced before the effective date of this section, 
     and in all such suits, proceedings shall be had, appeals 
     taken, and judgments rendered in the same manner and with the 
     same effect as if this section had not been enacted.
       (4) Nonabatement of actions.--No suit, action, or other 
     proceeding commenced by or against the Institute of Museum 
     Services, or by or against any individual in the official 
     capacity of such individual as an officer of the Institute of 
     Museum Services, shall abate by reason of the enactment of 
     this section.
       (5) Administrative actions relating to promulgation of 
     regulations.--Any administrative action relating to the 
     preparation or promulgation of a regulation by the Institute 
     of Museum Services relating to a function transferred under 
     this section may be continued by the Institute of Museum and 
     Library Services with the same effect as if this section had 
     not been enacted.
       (k) Transition.--The Director of the Institute of Museum 
     and Library Services may utilize--
       (1) the services of such officers, employees, and other 
     personnel of the Institute of Museum Services with respect to 
     functions transferred to the Institute of Museum and Library 
     Services by this section; and
       (2) funds appropriated to such functions for such period of 
     time as may reasonably be needed to facilitate the orderly 
     implementation of this section.
       (l) References.--A reference in any other Federal law, 
     Executive order, rule, regulation, or delegation of 
     authority, or any document of or relating to--
       (1) the Director of the Institute of Museum Services with 
     regard to functions transferred under subsection (b), shall 
     be deemed to refer to the Director of the Institute of Museum 
     and Library Services; and
       (2) the Institute of Museum Services with regard to 
     functions transferred under subsection (b), shall be deemed 
     to refer to the Institute of Museum and Library Services.
       (m) Additional Conforming Amendments.--
       (1) Recommended legislation.--After consultation with the 
     appropriate committees of Congress and the Director of the 
     Office of Management and Budget, the Director of the 
     Institute of Museum and Library Services shall prepare and 
     submit to the appropriate committees of Congress recommended 
     legislation containing technical and conforming amendments to 
     reflect the changes made by this section.
       (2) Submission to congress.--Not later than 6 months after 
     the effective date of this section, the Director of the 
     Institute of Museum and Library Services shall submit to the 
     appropriate committees of Congress the recommended 
     legislation referred to under paragraph (1).

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

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

     SEC. 205. CONSIDERATION.

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

     SEC. 206. TRANSITION AND TRANSFER OF FUNDS.

       (a) Transition.--The Director of the Office of Management 
     and Budget shall take appropriate measures to ensure an 
     orderly transition from the activities previously 
     administered by the Director of Library Programs in the 
     Office of Educational Research and Improvement in the 
     Department of Education to the activities administered by the 
     Institute for Museum and Library Services under this title. 
     Such measures may include the transfer of appropriated funds.
       (b) Transfer.--The Secretary of Education shall transfer to 
     the Director the amount of funds necessary to ensure the 
     orderly transition from activities previously administered by 
     the Director of the Office of Library Programs in the Office 
     of Educational Research and Improvement in the Department of 
     Education to the activities administered by the Institute for 
     Museum and Library Services. In no event shall the amount of 
     funds transferred pursuant to the preceding sentence be less 
     than $200,000.
                    TITLE III--EXTENSION OF PROGRAMS

     SEC. 301. EXTENSION OF NATIONAL LITERACY ACT OF 1991.

       (a) National Workforce Literacy Assistance Collaborative.--
     Subsection (c) of section 201 of the National Literacy Act of 
     1991 (20 U.S.C. 1211-1(c)) is amended by striking 
     ``$5,000,000'' and all that follows through the period and 
     inserting ``such sums as may be necessary for fiscal year 
     1997.''.
       (b) Functional Literacy and Life Skills Program for State 
     and Local Prisoners.--Paragraph (3) of section 601(i) of the 
     National Literacy Act of 1991 (20 U.S.C. 1211-2(i)) is 
     amended by striking ``$10,000,000'' and all that follows 
     through the period and inserting ``such sums as may be 
     necessary for fiscal year 1997.''.

     SEC. 302. ADULT EDUCATION ACT AMENDMENTS.

       The Adult Education Act (20 U.S.C. 1201 et seq.) is 
     amended--
       (1) in section 312--
       (A) in each of subparagraphs (A) and (B) of paragraph (11), 
     by moving the margins two ems to the right;
       (B) in each of paragraphs (11) through (15), by moving the 
     margins two ems to the right; and
       (C) by adding at the end the following:
       ``(16) The term `family literacy services' means services 
     that are of sufficient intensity in terms of hours, and of 
     sufficient duration, to make sustainable changes in a family 
     and that integrate all of the following activities:
       ``(A) Interactive literacy activities between parents and 
     their children.
       ``(B) Training for parents on how to be the primary teacher 
     for their children and full partners in the education of 
     their children.
       ``(C) Parent literacy training.
       ``(D) An age-appropriate education program for children.'';
       (2) in section 313(a), by striking ``the fiscal year 
     1991,'' and all that follows through ``1995'' and inserting 
     ``fiscal year 1997'';
       (3) in section 321, by inserting ``and family literacy 
     services'' after ``and activities'';
       (4) in the first sentence of section 322(a)(1), by 
     inserting ``and family literacy services'' after ``adult 
     education programs'';
       (5) in section 341(a), by inserting ``and for family 
     literacy services'' after ``adult education'';
       (6) in section 356(k), by striking ``$25,000,000'' and all 
     that follows through the period and inserting ``such sums as 
     may be necessary for fiscal year 1997.'';
       (7) in section 371(e)(1), by striking ``the fiscal year 
     1991,'' and all that follows through the period and inserting 
     ``fiscal year 1997.'';
       (8) in section 384, by striking subsections (c) through 
     (n); and
       (9) by adding at the end the following:

     ``SEC. 386. NATIONAL INSTITUTE FOR LITERACY.

       ``(a) 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

[[Page H10794]]

     Department of Education, the Department of Labor, or the 
     Department of Health and Human Services whose purpose 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) Board recommendations.--The Interagency Group shall 
     consider the recommendations of the National Institute for 
     Literacy Advisory Board (in this section referred to as the 
     `Board') established under subsection (d) in planning the 
     goals of the Institute and in the implementation of any 
     programs to achieve such goals.
       ``(4) Daily operations.--The daily operations of the 
     Institute shall be carried out by the Director of the 
     Institute appointed under subsection (g).
       ``(b) Duties.--
       ``(1) In general.--The Institute shall improve the quality 
     and accountability of the adult basic skills and literacy 
     delivery system by--
       ``(A) providing national leadership for the improvement and 
     expansion of the system for delivery of literacy services;
       ``(B) coordinating the delivery of such services across 
     Federal agencies;
       ``(C) identifying effective models of basic skills and 
     literacy education for adults and families that are essential 
     to success in job training, work, the family, and the 
     community;
       ``(D) supporting the creation of new methods of offering 
     improved literacy services;
       ``(E) funding 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) carrying out evaluations of the effectiveness of 
     adult education and literacy activities;
       ``(iii) enhancing the capacity of State and local 
     organizations to provide literacy services; and
       ``(iv) serving as a reciprocal link between the Institute 
     and providers of adult education and literacy activities for 
     the purpose of sharing information, data, research, 
     expertise, and literacy resources;
       ``(F) supporting the development of models at the State and 
     local level of accountability systems that consist of goals, 
     performance measures, benchmarks, and assessments that can be 
     used to improve the quality of adult education and literacy 
     activities;
       ``(G) providing information, and other program improvement 
     activities to national, State, and local organizations, such 
     as--
       ``(i) improving the capacity of national, State, and local 
     public and private organizations that provide literacy and 
     basic skills services, professional development, and 
     technical assistance, such as the State or regional adult 
     literacy resource centers referred to in subparagraph (E); 
     and
       ``(ii) establishing a national literacy electronic database 
     and communications network;
       ``(H) working with the Interagency Group, Federal agencies, 
     and the Congress to ensure that such Group, agencies, and the 
     Congress have the best information available on literacy and 
     basic skills programs in formulating Federal policy with 
     respect to the issues of literacy, basic skills, and 
     workforce and career development; and
       ``(I) assisting with the development of policy with respect 
     to literacy and basic skills.
       ``(2) Grants, contracts, and agreements.--The Institute may 
     make 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. Such grants, contracts, or agreements shall be 
     subject to the laws and regulations that generally apply to 
     grants, contracts, or agreements entered into by Federal 
     agencies.
       ``(c) Literacy Leadership.--
       ``(1) Fellowships.--The Institute, in consultation with the 
     Board, may award fellowships, with such stipends and 
     allowances as the Director considers necessary, to 
     outstanding individuals pursuing careers in adult education 
     or literacy in the areas of instruction, management, 
     research, or innovation.
       ``(2) Use of fellowships.--Fellowships awarded under this 
     subsection shall be used, under the auspices of the 
     Institute, to engage in research, education, training, 
     technical assistance, or other activities to advance the 
     field of adult education or literacy, including the training 
     of volunteer literacy providers at the national, State, or 
     local level.
       ``(3) Interns and volunteers.--The Institute, in 
     consultation with the Board, may award paid and unpaid 
     internships to individuals seeking to assist the Institute in 
     carrying out its mission. Notwithstanding section 1342 of 
     title 31, United States Code, the Institute may accept and 
     use voluntary and uncompensated services as the Institute 
     determines necessary.
       ``(d) National Institute for Literacy Advisory Board.--
       ``(1) Establishment.--
       ``(A) In general.--There is established a National 
     Institute for Literacy Advisory Board. The Board shall 
     consist of 10 individuals appointed by the President, with 
     the advice and consent of the Senate, from individuals who--
       ``(i) are not otherwise officers or employees of the 
     Federal Government; and
       ``(ii) are representative of entities or groups described 
     in subparagraph (B).
       ``(B) Entities or groups described.--The entities or groups 
     referred to in subparagraph (A) are--
       ``(i) literacy organizations and providers of literacy 
     services, including--

       ``(I) nonprofit providers of literacy services;
       ``(II) providers of programs and services involving English 
     language instruction; and
       ``(III) providers of services receiving assistance under 
     this title;

       ``(ii) businesses that have demonstrated interest in 
     literacy programs;
       ``(iii) literacy students;
       ``(iv) experts in the area of literacy research;
       ``(v) State and local governments; and
       ``(vi) representatives of employees.
       ``(2) Duties.--The Board--
       ``(A) shall make recommendations concerning the appointment 
     of the Director and staff of the Institute;
       ``(B) shall provide independent advice on the operation of 
     the Institute; and
       ``(C) shall 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) Terms.--
       ``(A) In general.--Each member of the Board shall be 
     appointed for a term of 3 years, except that the initial 
     terms for members may be 1, 2, or 3 years in order to 
     establish a rotation in which \1/3\ of the members are 
     selected each year. Any such member may be appointed for not 
     more than 2 consecutive terms.
       ``(B) Vacancy appointments.--Any member appointed to fill a 
     vacancy occurring before the expiration of the term for which 
     the member's predecessor was appointed shall be appointed 
     only for the remainder of that term. A member may serve after 
     the expiration of that member's term until a successor has 
     taken office. A vacancy in the Board shall be filled in the 
     manner in which the original appointment was made. A vacancy 
     in the Board shall not affect the powers of the Board.
       ``(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.
       ``(e) Gifts, Bequests, and Devises.--The Institute may 
     accept, administer, and use gifts or donations of services, 
     money, or property, both real and personal.
       ``(f) Mails.--The Board and the Institute may use the 
     United States mails in the same manner and under the same 
     conditions as other departments and agencies of the Federal 
     Government.
       ``(g) Director.--The Interagency Group, after considering 
     recommendations made by the Board, shall appoint and fix the 
     pay of a Director.
       ``(h) Applicability of Certain Civil Service Laws.--The 
     Director and staff of the Institute may be appointed without 
     regard to the provisions of title 5, United States Code, 
     governing appointments in the competitive service, and may be 
     paid without regard to the provisions of chapter 51 and 
     subchapter III of chapter 53 of that title relating to 
     classification and General Schedule pay rates, except that an 
     individual so appointed may not receive pay in excess of the 
     maximum rate payable under section 5376 of title 5, United 
     States Code.
       ``(i) Experts and Consultants.--The Board and the Institute 
     may procure temporary and intermittent services under section 
     3109(b) of title 5, United States Code.
       ``(j) Report.--The Institute shall submit a report 
     biennially to the Committee on Economic and Educational 
     Opportunities 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 two 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.
       ``(k) Funding.--Any amounts appropriated to the Secretary 
     of Education, the Secretary of Labor, or the Secretary of 
     Health and Human Services for purposes that the Institute is 
     authorized to perform under this section may be provided to 
     the Institute for such purposes.
       ``(l) Authorization of Appropriations.--There are 
     authorized to be appropriated

[[Page H10795]]

     $10,000,000 for fiscal year 1997 and such sums as may be 
     necessary for each of the fiscal years 1998 through 2002 to 
     carry out this section.''.

     SEC. 303. EXTENSION OF CARL D. PERKINS VOCATIONAL AND APPLIED 
                   TECHNOLOGY EDUCATION ACT.

       Subsection (a) of section 3 of the Carl D. Perkins 
     Vocational and Applied Technology Act is amended by striking 
     ``appropriated'' and all that follows through ``1995'' and 
     inserting ``appropriated for fiscal year 1997 such sums as 
     may be necessary''.
              TITLE IV--REPEALS AND CONFORMING AMENDMENTS

     SEC. 401. 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 Library Services and Construction Act (20 U.S.C. 
     351 et seq.).
       (4) Part F of the Technology for Education Act of 1994 
     (contained in title III of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 7001 et seq.)).
       (5) Section 211 of the Appalachian Regional Development Act 
     of 1965 (40 U.S.C. App. 211).
       (6) 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).
       (b) Immediate Repeal of Higher Education Act of 1965 
     Provisions.--The following provisions of the Higher Education 
     Act of 1965 (20 U.S.C. 1001 et seq.) are repealed:
       (1) Part B of title I (20 U.S.C. 1011 et seq.), relating to 
     articulation agreements.
       (2) Part C of title I (20 U.S.C. 1015 et seq.), relating to 
     access and equity to education for all Americans through 
     telecommunications.
       (3) Title II (20 U.S.C. 1021 et seq.), relating to academic 
     libraries and information services.
       (4) Chapter 3 of subpart 2 of part A of title IV (20 U.S.C. 
     1070a-31 et seq.), relating to presidential access 
     scholarships.
       (5) Chapter 4 of subpart 2 of part A of title IV (20 U.S.C. 
     1070a-41 et seq.), relating to model program community 
     partnerships and counseling grants.
       (6) Section 409B (20 U.S.C. 1070a-52), relating to an early 
     awareness information program.
       (7) Chapter 8 of subpart 2 of part A of title IV (20 U.S.C. 
     1070a-81), relating to technical assistance for teachers and 
     counselors.
       (8) Subpart 8 of part A of title IV (20 U.S.C. 1070f), 
     relating to special child care services for disadvantaged 
     college students.
       (9) Section 428J (20 U.S.C. 1078-10), relating to loan 
     forgiveness for teachers, individuals performing national 
     community service and nurses.
       (10) Section 486 (20 U.S.C. 1093), relating to training in 
     financial aid services.
       (11) Subpart 1 of part H of title IV (20 U.S.C. 1099a et 
     seq.) relating to State postsecondary review programs.
       (12) Part A of title V (20 U.S.C. 1102 et seq.), relating 
     to State and local programs for teacher excellence.
       (13) Part B of title V (20 U.S.C. 1103 et seq.), relating 
     to national teacher academies.
       (14) Subpart 1 of part C of title V (20 U.S.C. 1104 et 
     seq.), relating to Paul Douglas teacher scholarships.
       (15) Subpart 3 of part C of title V (20 U.S.C. 1106 et 
     seq.), relating to the teacher corps.
       (16) Subpart 3 of part D of title V (20 U.S.C. 1109 et 
     seq.), relating to class size demonstration grants.
       (17) Subpart 4 of part D of title V (20 U.S.C. 1110 et 
     seq.), relating to middle school teaching demonstration 
     programs.
       (18) Subpart 1 of part E of title V (20 U.S.C. 1111 et 
     seq.), relating to new teaching careers.
       (19) Subpart 1 of part F of title V (20 U.S.C. 1113), 
     relating to the national mini corps programs.
       (20) Section 586 (20 U.S.C. 1114), relating to 
     demonstration grants for critical language and area studies.
       (21) Section 587 (20 U.S.C. 1114a), relating to development 
     of foreign languages and cultures instructional materials.
       (22) Subpart 4 of part F of title V (20 U.S.C. 1116), 
     relating to faculty development grants.
       (23) Section 597 and subsection (b) of section 599 (20 
     U.S.C. 1117a and 1117c), relating to early childhood staff 
     training and professional enhancement.
       (24) Section 605 (20 U.S.C. 1124a), relating to intensive 
     summer language institutes.
       (25) Section 607 (20 U.S.C. 1125a), relating to periodicals 
     and other research material published outside the United 
     States.
       (26) Part A of title VII (20 U.S.C. 1132b et seq.), 
     relating to improvement of academic and library facilities.
       (27) Title VIII (20 U.S.C. 1133 et seq.), relating to 
     cooperative education programs.
       (28) Part D of title X (20 U.S.C. 1135f), relating to the 
     Dwight D. Eisenhower leadership program.
       (c) Immediate Repeal of Education Amendments of 1986 
     Provisions.--The following provisions of the Higher Education 
     Amendments of 1986 are repealed:
       (1) Part D of title XIII (20 U.S.C. 1029 note), relating to 
     library resources.
       (2) Part E of title XIII (20 U.S.C. 1221-1 note), relating 
     to a National Academy of Science study.
       (3) Part B of title XV (20 U.S.C. 4441 et seq.), relating 
     to Native Hawaiian and Alaska Native culture and art 
     development.
       (d) Immediate Repeal of Education Amendments of 1974 
     Provision.--Section 519 of the Education Amendments of 1974 
     (20 U.S.C. 1221i) is repealed.
       (e) Immediate Repeal of Education Amendments of 1992 
     Provisions.--The following provisions of the Higher Education 
     Amendments of 1992 are repealed:
       (1) Part F of title XIII (25 U.S.C. 3351 et seq.), relating 
     to American Indian postsecondary economic development 
     scholarships.
       (2) Part G of title XIII (25 U.S.C. 3371), relating to 
     American Indian teacher training.
       (3) Section 1406 (20 U.S.C. 1221e-1 note), relating to a 
     national survey of factors associated with participation.
       (4) Section 1409 (20 U.S.C. 1132a note), relating to a 
     study of environmental hazards in institutions of higher 
     education.
       (5) Section 1412 (20 U.S.C. 1101 note), relating to a 
     national job bank for teacher recruitment.
       (6) Part B of title XV (20 U.S.C. 1452 note), relating to a 
     national clearinghouse for postsecondary education materials.
       (7) Part C of title XV (20 U.S.C. 1101 note), relating to a 
     school-based decisionmakers demonstration program.
       (8) Part D of title XV (20 U.S.C. 1145h note), relating to 
     grants for sexual offenses education.
       (9) Part E of title XV (20 U.S.C. 1070 note), relating to 
     Olympic scholarships.
       (10) Part G of title XV (20 U.S.C. 1070a-11 note), relating 
     to advanced placement fee payment programs.

     SEC. 402. CONFORMING AMENDMENTS.

       (a) References to Section 204 of the Immigration Reform and 
     Control Act of 1986.--The table of contents for the 
     Immigration Reform and Control Act of 1986 is amended by 
     striking the item relating to section 204 of such Act.
       (b) References to Title II of Public Law 95-250.--Section 
     103 of Public Law 95-250 (16 U.S.C. 79l) is amended--
       (1) by striking the second sentence of subsection (a); and
       (2) by striking the second sentence of subsection (b).
       (c) References to Library Services and Construction Act.--
       (1) Technology for education act of 1994.--The Technology 
     for Education Act of 1994 (20 U.S.C. 6801 et seq.) is amended 
     in section 3113(10) by striking ``section 3 of the Library 
     Services and Construction Act;'' and inserting ``section 213 
     of the Library Services and Technology Act;''.
       (2) Omnibus education reconciliation act of 1981.--Section 
     528 of the Omnibus Education Reconciliation Act of 1981 (20 
     U.S.C. 3489) is amended--
       (A) by striking paragraph (12); and
       (B) by redesignating paragraphs (13) through (15) as 
     paragraphs (12) through (14), respectively.
       (3) Elementary and secondary education act of 1965.--
     Section 3113(10) of the Elementary and Secondary Education 
     Act of 1965 (20 U.S.C. 6813(10)) is amended by striking 
     ``section 3 of the Library Services and Construction Act'' 
     and inserting ``section 213 of the Library Services and 
     Technology Act''.
       (4) Community improvement volunteer act of 1994.--Section 
     7305 of the Community Improvement Volunteer Act of 1994 (40 
     U.S.C. 276d-3) is amended--
       (A) by striking paragraph (1); and
       (B) by redesignating paragraphs (2) through (6) as 
     paragraphs (1) through (5), respectively.
       (5) Appalachian regional development act of 1965.--Section 
     214(c) of the Appalachian Regional Development Act of 1965 
     (40 U.S.C. App. 214(c)) is amended by striking ``Library 
     Services and Construction Act;''.
       (6) Demonstration cities and metropolitan development act 
     of 1966.--Section 208(2) of the Demonstration Cities and 
     Metropolitan Development Act of 1966 (42 U.S.C. 3338(2)) is 
     amended by striking ``title II of the Library Services and 
     Construction Act;''.
       (7) Public law 87-688.--Subsection (c) of the first section 
     of the Act entitled ``An Act to extend the application of 
     certain laws to American Samoa'', approved September 25, 1962 
     (48 U.S.C. 1666(c)) is amended by striking ``the Library 
     Services Act (70 Stat. 293; 20 U.S.C. 351 et seq.),''.
       (8) Communications act of 1934.--Paragraph (4) of section 
     254(h) of the Communications Act of 1934 (47 U.S.C. 
     254(h)(4)) is amended by striking ``library not eligible for 
     participation in State-based plans for funds under title III 
     of the Library Services and Construction Act (20 U.S.C. 335c 
     et seq.)'' and inserting ``library or library consortium not 
     eligible for assistance from a State library administrative 
     agency under the Library Services and Technology Act''.
       (d) Reference to School Dropout Assistance Act.--Section 
     441 of the General Education Provisions Act (42 U.S.C. 
     1232d), as amended by section 261(f) of the Improving 
     America's Schools Act of 1994, is further amended by striking 
     ``(subject to the provisions of part C of title V of the 
     Elementary and Secondary Education Act of 1965)''.
       (e) References to Title VII of the Stewart B. McKinney 
     Homeless Assistance Act.--
       (1) Table of contents.--The table of contents of the 
     Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 1142 
     et seq.) is amended by striking the items relating to title 
     VII of such Act, except subtitle B and section 738 of such 
     title.
       (2) Title 31, united states code.--Section 6703(a) of title 
     31, United States Code, is amended--

[[Page H10796]]

       (A) by striking paragraph (15); and
       (B) by redesignating paragraphs (16) through (19) as 
     paragraphs (15) through (18), respectively.
       (f) References to Institute of Museum Services.--
       (1) Title 5, united states code.--Section 5315 of title 5, 
     United States Code, is amended by striking the following:
       ``Director of the Institute of Museum Services.'' and 
     inserting the following:
       ``Director of the Institute of Museum and Library 
     Services.''.
       (2) Department of education organization act.--Section 301 
     of the Department of Education Organization Act (20 U.S.C. 
     3441) is amended--
       (A) in subsection (a)--
       (i) by striking paragraph (5); and
       (ii) by redesignating paragraphs (6) and (7) as paragraphs 
     (5) and (6), respectively; and
       (B) in subsection (b)--
       (i) by striking paragraph (4); and
       (ii) by redesignating paragraphs (5) through (7) as 
     paragraphs (4) through (6), respectively.
       (3) Elementary and secondary education act of 1965.--
       (A) Sections 2101(b), 2205(c)(1)(D), 2208(d)(1)(H)(v), and 
     2209(b)(1)(C)(vi), and subsections (d)(6) and (e)(2) of 
     section 10401 of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6621(b), 6645(c)(1)(D), 6648(d)(1)(H)(v), 
     6649(b)(1)(C)(vi), and 8091 (d)(6) and (e)(2)) are amended by 
     striking ``the Institute of Museum Services'' and inserting 
     ``the Institute of Museum and Library Services''.
       (B) Section 10412(b) of such Act (20 U.S.C. 8102(b)) is 
     amended--
       (i) in paragraph (2), by striking ``the Director of the 
     Institute of Museum Services,'' and inserting ``the Director 
     of the Institute of Museum and Library Services,''; and
       (ii) in paragraph (7), by striking ``the Director of the 
     Institute of Museum Services,'' and inserting ``the Director 
     of the Institute of Museum and Library Services,''.
       (C) Section 10414(a)(2)(B) of such Act (20 U.S.C. 
     8104(a)(2)(B)) is amended by striking clause (iii) and 
     inserting the following new clause:
       ``(iii) the Institute of Museum and Library Services.''.
       (g) References to Office of Libraries and Learning 
     Resources.--Section 413(b)(1) of the Department of Education 
     Organization Act (20 U.S.C. 3473(b)(1)) is amended--
       (1) by striking subparagraph (H); and
       (2) by redesignating subparagraphs (I) through (M) as 
     subparagraphs (H) through (L), respectively.
       (h) References to State Postsecondary Review Entity 
     Programs.--The Higher Education Act of 1965 is amended--
       (1) in section 356(b)(2) (20 U.S.C. 10696(b)), by striking 
     ``II,'';
       (2) in section 453(c)(2) (20 U.S.C. 1087c(c)(2))--
       (A) by striking subparagraph (E); and
       (B) by redesignating subparagraphs (F) through (H) as 
     subparagraphs (E) through (G), respectively;
       (3) in section 487(a)(3) (20 U.S.C. 1094(a)(3)), by 
     striking subparagraph (B) and redesignating subparagraphs (C) 
     and (D) as subparagraphs (B) and (C), respectively;
       (4) in section 487(a)(15) (20 U.S.C. 1094(a)(15)), by 
     striking ``the Secretary of Veterans Affairs, and State 
     review entities under subpart 1 of part H'' and inserting 
     ``and the Secretary of Veterans Affairs'';
       (5) in section 487(a)(21) (20 U.S.C. 1094(a)(21)), by 
     striking ``, State postsecondary review entities,'';
       (6) in section 487(c)(1)(A)(i) (20 U.S.C. 
     1094(c)(1)(A)(i)), by striking ``State agencies, and the 
     State review entities referred to in subpart 1 of part H'' 
     and inserting ``and State agencies'';
       (7) in section 487(c)(4) (20 U.S.C. 1094(c)(4)), by 
     striking ``, after consultation with each State review entity 
     designated under subpart 1 of part H,'';
       (8) in section 487(c)(5) (20 U.S.C. 1094(c)(5)), by 
     striking ``State review entities designated under subpart 1 
     of part H,'';
       (9) in section 496(a)(7) (20 U.S.C. 1099b(a)(7)), by 
     striking ``and the appropriate State postsecondary review 
     entity'';
       (10) in section 496(a)(8) (20 U.S.C. 1099b(a)(8)), by 
     striking ``and the State postsecondary review entity of the 
     State in which the institution of higher education is 
     located'';
       (11) in section 498(g)(2) (20 U.S.C. 1099c(g)(2)), by 
     striking everything after the first sentence;
       (12) in section 498A(a)(2)(D) (20 U.S.C. 1099c-1(a)(2)(D)), 
     by striking ``by the appropriate State postsecondary review 
     entity designated under subpart 1 of this part or'';
       (13) in section 498A(a)(2) (20 U.S.C. 1099c-1(a)(2))--
       (A) by inserting ``and'' after the semicolon at the end of 
     subparagraph (E);
       (B) by striking subparagraph (F); and
       (C) by redesignating subparagraph (G) as subparagraph (F); 
     and
       (14) in section 498A(a)(3) (20 U.S.C. 1099c-1(a)(3))--
       (A) by inserting ``and'' after the semicolon at the end of 
     subparagraph (C);
       (B) by striking ``; and'' at the end of subparagraph (D) 
     and inserting a period; and
       (C) by striking subparagraph (E).

  The SPEAKER pro tempore (Ms. Greene of Utah). Pursuant to the rule, 
the gentleman from California [Mr. McKeon] and the gentleman from 
Missouri [Mr. Clay] each will control 20 minutes.
  The Chair recognizes the gentleman from California [Mr. McKeon].
  Mr. MCKEON. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I rise today in support of H.R. 1720, the Government 
Sponsored Enterprise Privatization Act of 1996.
  This important legislation will: privatize two government sponsored 
enterprises, Sallie Mae and Connie Lee; eliminate over 40 unfunded 
higher education programs including the State Postsecondary Review 
Entities or SPREE's; consolidate and improve Federal library and museum 
programs; and extend for 1 year the National Literacy Act, the Adult 
Education and Literacy Act, and the Carl D. Perkins Vocational and 
Applied Technology Education Act, which otherwise will expire on 
September 30 of this year.
  I would like to focus my remarks on the higher education provisions 
in this legislation, and in particular the privatization of Sallie Mae 
and Connie Lee.
  The Student Loan Marketing Association, or Sallie Mae, was 
established in 1972 under a Federal charter authorized by part B of 
title IV of the Higher Education Act. At that time, there was a 
tremendous need for a secondary market that would purchase student 
loans from lenders, freeing up capital so that those lenders could 
continue to make student loans. Under it Federal charter, Sallie Mae 
gained certain advantages, including the ability to raise large amounts 
of capital in a cost effective way. People across the nation invested 
in this public-private partnership, knowing that their investment was 
also fostering access to higher education.
  However, times have changed. Today, there is an extremely competitive 
secondary market for student loans, and the practice of securitization 
has made it far easier for financial institutions to raise capital for 
student loans. Now there is ample private capital available for student 
loans, and virtually every eligible student has access to student 
loans. The Federal charter which initially helped Sallie Mae assist 
students is now hampering Sallie Mae's ability to put its expertise to 
work in the private market to provide services outside of the student 
loan arena. Clearly the time has come when it is advantageous to both 
the taxpayer and Sallie Mae to allow Sallie Mae to become a fully 
private company with no Federal ties and no government sponsored 
advantages.
  The legislation before us today gives Sallie Mae's stockholders the 
right to vote to reorganize and become a private company. Upon voting 
to reorganize, the existing Government Sponsored Enterprise [GSE] will 
continue to purchase student loans until September 30, 2007. On 
September 30, 2008, the GSE will dissolve, and 1 year later the charter 
legislation found in the Higher Education Act will be repealed. In the 
event Sallie Mae's stockholders vote against reorganization, Sallie Mae 
will have until July 1, 2013 to wind down its business and dissolve the 
GSE.
  In privatizing Sallie Mae, both the taxpayer and Sallie Mae are 
clearly winners. Sallie Mae is freed from a burdensome Federal charter 
and allowed to apply its expertise to compete in new markets. And, as 
Sallie Mae profits, so will the taxpayer. Upon privatization, Sallie 
Mae will be required to pay for the use of the Sallie Mae name. In 
addition, the Government will receive stock warrants from Sallie Mae. 
If a new and private Sallie Mae is successful and the price of its 
stock rises, the Treasury will be able to cash in these warrants, and 
the taxpayer will profit along with the new company.
  As with Sallie Mae, the College Construction Loan Insurance 
Association, or Connie Lee, is another example of a successful public-
private partnership which has served its purpose. Connie Lee was 
created by Congress under title VII of the Higher Education Amendments 
of 1986. At that time, the deterioration of physical infrastructure 
such as buildings and physical plants was a pressing problem for 
institutions of higher education, and financing facilities improvements 
was an option only for schools of the highest credit caliber. Connie 
Lee was created to underwrite the financing of these needed 
improvements; leveraging large amounts of capital with little risk to 
the government.

[[Page H10797]]

  However, Connie Lee has never enjoyed the advantages of most 
government sponsored enterprises. In fact, the only Government help 
Connie Lee has received was start-up capital, in return for which 
Government received stock in Connie Lee. And, the law which created 
Connie Lee also narrowly limited the business activities which Connie 
Lee could pursue. Clearly, Connie Lee was always meant to be a private 
company.
  For Connie Lee, privatization means the ability to determine its own 
destiny. Privatization will allow Connie Lee to use its expertise in 
facilities underwriting to help secure funding for elementary and 
secondary schools, higher education facilities, and local municipal 
projects. In return, the taxpayer is relieved of any implicit risk, 
should Connie Lee have future financial difficulties.
  This legislation simply repeals the authorizing legislation which 
created Connie Lee, thereby freeing Connie Lee of from the restrictions 
of the Higher Education Act which limit the types of business in which 
Connie Lee can engage. The Treasury is directed to sell the stock 
currently owned by the U.S. Government within a set period of time in 
order to fully sever all Federal ties. In the event that the Treasury 
Department is unable to sell this stock, this legislation requires 
Connie Lee to buy it back at a price that is fair to both Connie Lee 
and the taxpayer. Connie Lee will no longer have any Federal charter or 
any ties to the Federal Government.
  Privatizing Sallie Mae and Connie Lee is simply good government for 
the 1990's. This legislation frees the American taxpayer from 
subsidizing activities which will flourish long after government 
sponsorship has ceased. It also shows a willingness on the part of this 
Congress to take a public-private partnership and turn it into a fully 
private venture when Government support is no longer necessary. This 
legislation represents a carefully crafted compromise between Connie 
Lee and Sallie Mae, the administration, and the potential competitors 
of these newly privatized firms. In the process, it paves the way to a 
future of smaller, less intrusive government. Both of these companies 
want to be fully private firms. It is time for us as a Congress to 
sever our ties to them.
  In addition to privatizing two Government sponsored enterprises, the 
legislation before us today begins to streamline the Higher Education 
Act by eliminating over 40 programs which are completely unfunded. I am 
pleased to note that among these programs is the State Postsecondary 
Review Entities, or SPREEs, which creates excessive and burdensome 
paperwork requirements for schools, represents an unwarranted State 
intrusion into their campuses, and in some cases poses a threat to 
their educational missions. As with the SPREEs, all of these programs 
were enacted with the best of intentions. However, eliminating these 
unfunded provisions will simplify our higher education law and help 
reduce the size of government.
  Unfortunately, the legislation before us today represents only a 
fraction of the reform in the area of job training and education that 
I, along with other members on the Opportunities Committee, worked so 
hard in moving forward during the last 2 years. Under H.R. 1617, 
otherwise referred to as the Careers Act, over 120 programs would have 
been consolidated into block grants to States and localities; 
communities would have had more flexibility to target resources where 
they were most needed; and thousands of Americans would have been able 
to secure training vouchers in order to upgrade their skills at 
educational institutions of their choosing. Unfortunately, change is 
always difficult, and there was a ground swell of support for the 
status quo--which is why today we are able to move only a small portion 
of the original Careers legislation. But let me make this very clear. I 
fully intend to continue this endeavor. I will push forward with a job 
training system which provides flexibility to States; maintains 
accountability and empowers individuals to learn.
  Madam Speaker, the Government Sponsored Enterprise Privatization Act 
is straight-forward, commonsense legislation. It represents a modest 
but earnest effort to reduce the size and scope of government, and it 
does so in a way that benefits both the taxpayer and private 
enterprise. This legislation does not cost the government or the 
taxpayer a dime, and in fact it will save money, but it will also pave 
the way to a future of smaller, less intrusive government. I urge my 
colleagues to support this legislation and vote ``yes'' on H.R. 1720.
  Madam Speaker, I reserve the balance of my time.
  Mr. CLAY. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I reluctantly rise in support of H.R. 1720 which 
provides straight reauthorizations for three education programs 
scheduled to expire at the end of this year. Those programs are the 
National Literacy Act, the Adult Education Act, and the Carl D. Perkins 
Vocational and Applied Technology Education Act. The 1-year extensions 
included in this bill will help add some certainty to these programs as 
they continue to compete for funding through the appropriations 
process.
  In addition, the legislation includes changes to other programs that 
were worked out through bipartisan negotiations involving both the 
House and the Senate earlier this year.
  This bill provides for the privatization of two Government-sponsored 
enterprises, Sallie Mae and Connie Lee. I have already voted in support 
of privatization and will do so again today, but, as I said, with 
reluctance. Let me explain my apprehension.
  Last Thursday, in response to a request by a member of my staff for 
harmless information from Sallie Mae regarding privatization revenue, 
Sallie Mae mistakenly faxed him a document which strongly suggests 
possible partisan work by Sallie Mae officials on behalf of the 
Republicans.
  There are at least two very disturbing things about the document. 
First, the document is referred to as a ``candidate's package,'' and it 
is a highly charged, partisan document that will help Republicans 
attack the direct loan program and gives them ammunition to defend 
themselves against the accurate charges that they have tried to cut 
student loans.
  The second alarming thing about the fax is that it includes a cover 
page showing that the document was sent to a Republican representative, 
the gentleman from Virginia, Mr. Tom Davis, by one of Sallie Mae's 
House lobbyists. That fax page has a note on it to Mr. Davis that says, 
and I quote, ``Here's the full candidate's package.'' Other details 
about this bizarre and potentially illegal activity are described in 
this morning's Washington Post.
  However, I might say in defense of Sallie Mae that the president and 
chief executive officer wrote a letter to me dated September 18, where 
he says that, and I quote, ``The document which I have subsequently 
read is completely inappropriate in its language and tone, and I am at 
a loss to express my disappointment that this should have happened. 
This material was not sanctioned nor reviewed by either myself or 
senior management.''
  Also, the chairman of the board wrote to President Clinton and he 
noted that he had directed that an internal investigation be conducted 
and that appropriate disciplinary action be taken against those 
individuals responsible for this document.
  Madam Speaker, I think that the appropriate agencies and 
congressional committees have an obligation to fully investigate this 
matter, and until that happens, a dark cloud will hang over the issue 
of Sallie Mae's privatization.
  Madam Speaker, I reserve the balance of my time.
  Mr. McKEON. Madam Speaker, I yield 2 minutes to the gentleman from 
Wisconsin [Mr. Gunderson], a strong supportive member of the committee.
  (Mr. GUNDERSON asked and was given permission to revise and extend 
his remarks.)
  Mr. GUNDERSON. Madam Speaker, I regret we are not here passing a 
comprehensive careers bill. I regret, like Mr. Clay, that there was any 
political activity that was in any way involved in this, and I think we 
all ought to make sure that does not happen again.
  But having said all that, I rise in strong support of this bill 
because if this is the best that we can do this session, then this is 
exactly what we should do.
  Many of us are aware that we tried to define priorities in this 
Congress, balancing the budget, figuring out what programs ought to 
still be a primary Federal role and which ones ought not.

[[Page H10798]]

  I think there is little doubt in this body on a bipartisan basis that 
we have come to that point in time when Sallie Mae and Connie Lee no 
longer justify being Government-sponsored enterprises. More than that, 
they do not want to continue to be Government-sponsored enterprises 
constrained by those restrictions. And, more than that, by privatizing 
them, we actually can make some money that we can direct toward other 
human resource programs that are so important.

                              {time}  1330

  So we have done that in this bill, we have done it with Sallie Mae 
over a period of time, making sure that before the year 2005 they would 
continue to use Sallie Mae for its primary purposes. Any other business 
activities would have to occur by a separately created business 
enterprise.
  Likewise with Connie Lee. We have made it clear that, as we look at 
the changing dynamics in school construction certainly on the higher 
education level, that they ought to be freed up once they disavow 
themselves of any Federal Government bonds to go into that private 
sector and provide that kind of insurance.
  But this bill also does some other things that everyone ought to be 
for. For example, we not only reauthorize the library and museum 
programs, but we move them into important incentives for distance 
learning and the Internet use. We target funds for the disabled and the 
illiterate, and we limit administrative expenses so that more dollars 
can actually be spent on services and delivery of services to people.
  Finally, as was mentioned by our leader, the gentleman from 
California [Mr. McKeon], we do important things in adult education and 
literacy. I encourage all of my colleagues to vote for this bill.
  Mr. CLAY. Madam Speaker, I yield 2 minutes to the gentleman from 
Florida [Mr. Deutsch].
  Mr. DEUTSCH. Madam Speaker, I rise in support of this legislation. As 
all of us are aware, the existence of the direct student loan program 
is limiting the market for guaranteed student loans. Sallie Mae's 
restrictive Federal charter provides it with no viable option for 
replacing business loss to direct lending and to other student loan 
financing vehicles and to the other 40 or more secondary markets. These 
factors dim Sallie Mae's future financial prospects. Sallie Mae's 
privatization will relieve taxpayers of over $50 billion in implicit 
liabilities.
  On September 20, in a speech in Portland, OR, President Clinton said, 
and I quote:

       ``We're going to privatize organizations that can now work 
     better in the private sector, like Sallie Mae. We've got the 
     direct student loan program. They need to be able to do some 
     other things as well.''

  In return for its privatization, Sallie Mae will pay to the 
Government $5 million for the use of the Sallie Mae name and issue 
500,000 stock warrants to the Government, allowing taxpayers to benefit 
from the future success of the fully private Sallie Mae; subsidizing an 
effort that will no longer need subsidizing; and making the Government 
more efficient.
  Madam Speaker, I urge the support of the bill.
  Mr. McKEON. Madam Speaker, I yield 2 minutes to the gentleman from 
Wisconsin [Mr. Klug].
  Mr. KLUG. Madam Speaker, I thank my colleague from California for 
yielding me this time and congratulate him and also the chairman of the 
full committee, the gentleman from Pennsylvania [Mr. Goodling] for this 
important piece of legislation on privatizing Sallie Mae.
  When the Speaker asked me at the beginning of the last session of 
Congress to lay out a number of targets of opportunity for 
privatization, this was high on everyone's list, and we have actually 
had a fair amount of success this Congress with the naval petroleum 
reserves and selling off the United States Enrichment Corporation, 
getting the National Weather Service out in some specialty crop 
forecasting, asking the IRS to use private debt collection firms to 
augment its collection of outstanding taxpayer bills. But this piece of 
legislation today I think is extraordinarily important for one major 
reason, and that is for the first time in history we have a Government-
sponsored enterprise stepping forward and saying we no longer want any 
ties with the Government; we want the ability to stand on our own.
  And it makes sense because when Sallie Mae was first established in 
1972 to create a secondary market for federally guaranteed student 
loans, there was a huge shortage in the marketplace. But since that 
time there are now 47 different participants and thousands of lenders 
nationwide who are now originating loans and financing them in a 
variety of ways.
  Madam Speaker, Sallie Mae at this point is essentially handicapped 
from being able to enter new lines of business. It is a Government-
sponsored enterprise which is withering on the vine. Today we will get 
the Government regulations out of the way and allow Sallie Mae and also 
Connie Lee to compete in the private sector, and perhaps fundamentally 
more important, we will remove nearly $50 billion, that is $50 billion, 
in implicit liabilities now insured by U.S. taxpayers.
  I know that my colleagues on the Committee on Economic and 
Educational Opportunities were disappointed that they could not move 
forward a comprehensive career bill, but I think at the end of the day, 
privatizing Sallie Mae is a tremendous accomplishment for both the 
committee itself and also this Congress as a whole.
  Mr. CLAY. Madam Speaker, I yield 4 minutes to the gentlewoman from 
Florida [Mrs. Meek].
  Mrs. MEEK of Florida. Madam Speaker, I rise to sort of prick the 
Congress' conscience about some of the things that happen in H.R. 1720.
  I was one of the 79 people on this floor who voted against this bill 
when it came before us before, and today, as I read the conference 
report on the Privatization Act, I do not see too many changes in the 
concerns which I had the very first time.
  I voted against the bill at that time not because of the Sallie Mae 
situation, in that I thought that was a progressive move to try to 
consolidate and to try to make the entire program move more smoothly, 
but I cannot sit here and not tell my colleagues that some of the 
things that they left out of this bill which were so appealing and so 
begged for in their committee, they still did not make any changes this 
time.
  First of all, I disagree vehemently about the way they decided to 
close out some of the programs which are currently funded as if they 
were just by Topsy, be able to adjust themselves to the changes which 
they have made or did not make in 1790 that were so many.
  First of all, I want to give my colleagues just a little bit of 
information. I worked in higher education for 40 odd years straight 
through, and I saw how these Federal programs worked as far as the 
scholarship programs, financial aid, all of them worked. Many of them 
worked very haphazardly, and many students were left out, but at least 
we did much better than we are doing in 1720 because in 1720 we are 
stopping most of these programs; I think about 40 of them have been 
eliminated. I may have that figure wrong, but about 53 of them have 
been eliminated according to their report here.
  Now I call Members' attention to the fellowships which allow many 
students to not be able to continue. I also call their attention to the 
fact that they have completely ignored the needs of disabled students 
who desire and who really must have some access to higher education. 
Disabled students have their rights. They passed the American 
Disabilities Act some time ago, so these disabled students really need 
the rights which they had in the first in the beginning, and they 
decided to eliminate those at this time. They repeal the development 
grants which would allow faculty people to be trained so that they 
could work with disabled students. There are many, many disabled 
students throughout the colleges and institutions in this country could 
benefit if they had faculty members who were trained to the point that 
they could help these students. Disabled students, I want my colleagues 
to understand, desire and need the ability to have good teaching and 
good instruction as well as any other students. So they do need 
teachers who are trained to teach them how to read, just as one would 
any other students.

[[Page H10799]]

  I thought some of the dissenting views at the back of this bill 
really incorporated the kinds of things that I am calling to my 
colleagues' attention this morning, and there will be others this 
morning who will disagree and not support this bill, not because of the 
privatization of Sallie Mae. That is not why. But they will because 
they failed to pay any attention to the needs of students throughout 
this country.
  Now if it were not for some of the minority education programs that 
they have funded in the past, many minorities and women would not have 
received postgraduate education. It is because they really received 
some Federal aid in terms of education. So there is a reciprocal reward 
for people having received graduate education and how to be able to 
train women to teach women and to do minorities and to allow them to 
get the professional training and graduate training which they need to 
carry this on.
  I could go on and on because of the 53 programs that they cut out, 
but I cannot sit down without appealing a little bit for the libraries 
of this country. My colleagues have heard, and I know my time is out so 
I will say, by their repealing 53 programs, they made no attempt to put 
them back is not a good thing.
  Mr. McKEON. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, just in response to my dear friend from Florida, let 
me just say that this maybe is a different version of the bill than she 
has seen. Of the 41 programs on the list that we have in this bill, 
four of them did receive a total of $8.8 million in fiscal year 1995. 
However, in 1996 the administration did not request any funds for these 
four programs nor were funds requested for fiscal year 1997, and none 
were provided. So there is no funding for any of the programs that we 
have cut.
  Madam Speaker, I yield 1\1/2\ minutes to the gentleman from Illinois 
[Mr. Hastert] who has been very supportive in getting this bill to the 
floor.
  Mr. HASTERT. Madam Speaker, I wish to thank the majority leader, the 
gentleman from Texas [Mr. Armey], the Committee on Economic and 
Educational Opportunity chairman, the gentleman from Pennsylvania [Mr. 
Goodling], and certainly the opportunity to work with the chairman of 
the opportunity subcommittee in answering my request in bring 
legislation to authorize library services to the House floor. H.R. 
1720, the Government sponsored Enterprise Privatization Act improves 
the provisions of the Library Services and Technology Act. This bill 
authorizes $150 million for library services for fiscal year 1977 and 
insures the authorization necessary for fiscal years 1998 through the 
year 2002.
  Madam Speaker, the program has wide bipartisan support in both houses 
of congress, and it is important that we continue it. I am very pleased 
it will be continued. Many local libraries have used these funds to 
assist them with expansion projects and to purchase new equipment. This 
legislation will make these programs even more effective by making 
these programs more flexible and easier to use. At the same time it 
will give libraries the ability to keep up with the information age 
with access to new technologies and allowing them to share resources.
  Communities in my district have greatly benefitted from this program. 
In the past year along Elgin, Aurora, and Mendota have greatly improved 
their community services in libraries in addition to towns like Geneva 
and St. Charles and Warrenville in order to better serve the needs of 
its residents. Because of these grants, Mendota Graves Hume Public 
Library is proceeding with its Multi-county Rural Cooperative 
Collection Management program. This program allows libraries to fill 
specific needs for one another; Aurora public library's implementing 
its changing resources and changing world, and in Elgin, the public 
library's district resources through shared technology.
  Madam Speaker, I ask for a positive vote on this bill.
  Mr. CLAY. Madam Speaker, I yield 3 minutes to the gentleman from 
Pennsylvania [Mr. Kanjorski].
  Mr. KANJORSKI. Madam Speaker, first of all may I congratulate both 
the gentlemen on the majority side and minority side for taking up in 
the closing moments of the 104th Congress a very important piece of 
legislation that will allow for the privatizing of Sallie Mae. There 
are members of the minority such as the gentleman from Florida [Mr. 
Peterson] and the gentleman from Texas [Mr. Edwards] and myself who 
have worked diligently during this session of the Congress to promote 
privatization of Sallie Mae. It is an institution that has matured, and 
under this legislation it will meet new needs of college students and 
colleges and universities after the privatization of both Sallie Mae 
and Connie Lee. It is an effort that we can all move forward with 
pride.
  It is, I think, a very good example of the privatization from the 
standpoint that I think what the American people really want us to do 
is to recognize when organizations become mature and can be self-
sufficient and can enter into the private market to assume risks that 
government no longer has to underwrite. This is a perfect example of 
this accomplishment. It also allows for direct lending to continue, but 
it provides that Sallie Mae, by being able to enter into other 
activities, can make itself much more self-sufficient and supportive of 
the obligations that presently exist in the marketplace and otherwise 
would have to be guaranteed by the United States Government.
  To my friend from Florida, I should say, ``Dr. Meek,'' we are remiss 
if we did not call to her attention that some of the programs that have 
been left out of this bill pending on the floor are only programs that 
have been unfunded and they are being now deauthorized, but this 
legislation will not have an adverse impact and is nothing nearly as 
severe as what previously came out of the committee.
  What is now being offered is a very streamlined bill. It provides 
primarily for privatization, of Sallie Mae and Connie Lee, and then it 
does reauthorize some programs and, of course, provides for the 
development of a program for library services.
  I would urge my colleagues both on the minority side and the majority 
side, in the spirit of the statements of the gentleman from Wisconsin 
[Mr. Gunderson] to the full House just a few minutes ago to the effect 
that here is an opportunity for all of us in a very mature manner who 
have studied this for a long period of time to see something done 
right. Passage of this bill does mean reform or change, and it means 
privatization, but in none of those instances is it radical or extreme. 
It is using the marketplace and the free market system to perform what 
government had to perform before, and it does so in a very positive, 
straightforward and open method.
  So I simply compliment the leadership on the majority side and the 
minority side for having attained this compromise, and I urge my 
colleagues to support the bill, in spite of the fact that there were 
some political problems that did arise. None of us are innocent of 
those kinds of problems. Sometimes our staff and some of our friends 
have excesses, we have to allow for that, but I think everybody on both 
sides of the aisle and the White House are comfortable with this bill. 
I urge all my colleagues to support its passage.

                              {time}  1345

  Mr. CLAY. Madam Speaker, I yield back the balance of my time.
  Mr. McKEON. Madam Speaker, I yield 2 minutes to the gentleman from 
California [Mr. Cunningham], a good friend who is chairman of the 
Subcommittee on Early Childhood, Youth, and Families, and has 
responsibility for the library portion of the bill.
  [Mr. CUNNINGHAM asked and was given permission to add extraneous 
materials.)
  Mr. CUNNINGHAM. Madam Speaker, I rise in support of H.R. 1720. Let me 
tell the Members why. I think especially there are three main parts: 
The creation of the Institute for Museum and Library Services; adult 
education and literacy programs; privatization of Sallie Mae.
  We had a monumental debate here on the House floor with the issue of 
85-15, which I believe will be resolved in this particular case. Rather 
than speak from my notes, Madam Speaker, let me tell the Members why I 
think it is even more important.
  In education we have less than 12 percent of our schools that have 
even a

[[Page H10800]]

single phone jack. If we are going to prepare our children for the 21st 
century, there must be the fiber optics and the modernization. Even 
there the schools do not have library services enough to meet those 
needs.
  If we can link up those libraries in our colleges, our public 
libraries, and yes, even here in Washington, DC, think about how that 
will help this country. When we talk about the delta, the difference 
between the successful and the poor, the answer is education. We will 
find chronologically gifted folks at libraries; we will find the very 
young at libraries, as well. Whether it is through job training or 
whether it is through education services, this bill goes a long way to 
help that.
  I think the telecommunications bill that we passed encourages that, 
and I think there are ways we can work with Members on the other side 
of the aisle as far as reform in our tax system, to where we can 
encourage those private enterprises that will invest in our children, 
which is a way of investing in the future. Part of that is our library 
services and our job training.
  Perhaps we have not gone far enough in this particular Congress in 
job training. I will give that to my colleagues on the other side of 
the aisle. But I think there is an area which we can work on in the 
next Congress that will be beneficial as far as the libraries.
  The library portion was being threatened because it was in a portion 
of the bill that we placed it in that may not make it through by the 
end of this Congress. This legislation, I think, helps remedy that. It 
has bipartisan support. I would like to thank the gentlemen on both 
sides of the aisle.
  Madam Speaker, I rise in support of H.R. 1720. I would like to bring 
attention to four important parts of this legislation: The creation of 
the Institute for Museum and Library Services, the renewal of certain 
adult education and literacy programs, the privatization of Sallie Mae, 
and the resolution of the so-called 85-15 issue.
  The Institute of Museum and Library Services:
  With the close help of America's museum and library communities, this 
legislation creates an Institute of Museum and Library Services. It 
merges the Institute of Museum Services and our Federal Library 
Services and Construction Act programs into one organization. We do 
this for three reasons.
  First, museums and libraries are first and foremost deliverers of 
information. Through books and exhibits, microfiche, video, and the 
Internet, they can and do work together for the benefit of citizens and 
communities.
  Second, the advance of the information age is transforming how people 
obtain information. So we have placed a new focus on the Federal role 
in these programs toward electronically linking libraries and museums 
to one another, to other agencies and services, and to communities, 
schools, and citizens. We all know that the printing press 
revolutionized Europe in the Middle Ages by making books available to 
everyone. Today's Internet has that same potential: to bring people and 
information together from a whole world apart, with the simple point 
and click of a mouse.
  And third, the IMLS simplifies the administration of Federal museum 
and library programs, while maintaining their unique and useful 
character. Its leadership will alternate from leaders in libraries or 
museums. The IMLS library division will make simplified grants to State 
library agencies. And the IMLS museum portion will continue awarding 
grants to local museum organizations.
  At this point, I would like to include for the Record letters of 
support from California.
  Madam Speaker, our libraries and museums are a national treasure. 
They are a free and open institution of learning for every American, 
regardless of wealth or background. They provide information, help 
people find jobs, offer entertainment, and unite our communities. They 
represent the best in America. In short, they work. And while most of 
their funding is from local, State, and private resources, the Federal 
Government has a role. By adopting this legislation, we provide the 
catalyst to help bring our museums and libraries into the 21st century.
  Renewal of adult education and literacy programs:
  H.R. 1720 also continues the authorization for our Federal adult 
education and literacy programs. Adult education provides individuals 
who lack the most basic skills--such as literacy, English proficiency, 
or a high school equivalency diploma--the tools they need to have a 
fighting chance at the American dream. An individual who cannot read or 
perform basic math cannot hope to find a good job, or to benefit from 
job training.
  Simply put, our investment in effective adult education transforms 
those who are dependent upon society into contributors to society. Like 
the library and museum portion of H.R. 1720, these provisions were 
included in the CAREERS legislation which is stalled in the Senate. It 
deserves our support.
  Privatizing Sallie Mae:
  Sallie Mae, the Student Loan Marketing Association, is a Government-
sponsored enterprise, owned by private stockholders, that provides a 
secondary market for student loan financing. When President Clinton 
advanced his direct lending initiative, it limited Sallie Mae's 
traditional market, and impacted Sallie Mae stockholders.
  I oppose President Clinton's direct lending plan because, over 7 
years, it costs taxpayers $1 billion more to provide the same number of 
student loans as private markets. And while the President has sought to 
have direct lending replace private markets, Congress has limited the 
growth of direct lending. Nevertheless, direct lending is a fact of 
life today. Its existence unfairly impacts the thousands of senior 
citizens, private pensions, and other Americans who own stock in Sallie 
Mae.
  Allowing Sallie Mae stockholders the opportunity to vote to privatize 
is simply a matter of fairness. The legislation structures any 
privatization carefully, so taxpayers and citizens alike get their 
money's worth.
  Partial resolution of 85-15:
  This legislation also contains a partial resolution of the so-called 
85-15 issue. The 85-15 policy enacted by Congress has been implemented 
retroactively on for-profit institutions of higher learning. Such 
schools are made responsible for their compliance with regulations 
before they were published on May 1, 1994. This kind of retroactive 
enforcement is simply un-American.
  Our bill ends retroactive, preregulatory enforcement of the 85-15 
rule.
  Unfortunately, H.R. 1720 does not make a further necessary reform 
which I support. The measure does not exclude Federal training money 
from the 15 percent of a for-profit school's income coming from sources 
other than the Higher Education Act. As we all know, Federal training 
programs are not authorized by the Higher Education Act. They are 
authorized under other legislation. But the Department of Education has 
been enforcing 85-15 contrary to the will and intent of Congress. I am 
confident we will revisit this issue.
  Support H.R. 1720:
  I urge all of my colleagues to support H.R. 1720. It's good for 
libraries and museums, for our children and our seniors, for students, 
and for many of our excellent for-profit educational institutions.
  Madam Speaker, I include for the Record the following letters:


                                     California State Library,

                               Sacramento, CA, September 23, 1996.
     Hon. Randy ``Duke'' Cunningham,
     U.S. House of Representatives, Washington, DC.
       Dear Congressman Cunningham: The California State Library 
     applauds your initiatives to pass the successor to the 
     Library Services and Construction Act (LSCA) with the forward 
     thinking Library Services and Technology Act (LSTA), and we 
     support the passage of H.R. 1720 to achieve this goal.
       Thank you for your continued efforts on behalf of 
     California library users.
           Yours sincerely,
                                                  Dr. Kevin Starr,
                                    State Librarian of California.
       P.S.--You have become the champion of public libraries! All 
     of us are grateful to you for you vision and leadership!
     KS.
                                                                    ____

                                             California Library of


                                               Services Board,

                               Sacramento, CA, September 23, 1996.
     Hon. Randy ``Duke'' Cunningham,
     U.S. House of Representatives, Washington, DC.
       Dear Congressman Cunningham: On behalf of the public 
     libraries of California, I support the Library Services and 
     Technology Act that is in H.R. 1720. This Act will provide 
     much needed assistance to our libraries using state based 
     priorities. Our libraries support your efforts to help our 
     children be lifelong readers, and to incorporate the new 
     technologies in their development as productive adults in our 
     society.
           Sincerely,
                                               Joan K. Kallenberg,
     President.
                                                                    ____



                                     Escondido Public Library,

                                Escondido, CA, September 23, 1996.
       Dear Congressman Cunningham: The Escondido Public Library 
     applauds your initiatives to pass the successor to the 
     Library Services and Construction Act (LSCA) with the 
     forward-thinking Library Services and Technology Act (LSTA). 
     We would appreciate a ``yes'' vote for the passage of H.R. 
     1720 to achieve this goal.
       Thank you for continued efforts on behalf of California 
     Library users.
           Sincerely.
                                                Barbara L. Loomis,
                                         Assistant City Librarian.

  Mr. McKEON. Madam Speaker, I yield 3 minutes to my friend, the 
gentleman from Virginia, Mr. Tom Davis.
  (Mr. DAVIS asked and was given permission to revise and extend his 
remarks.)
  Mr. DAVIS. Madam Speaker, let me first say that I think the incident 
the

[[Page H10801]]

gentleman from Missouri [Mr. Clay] has referred to was regrettable. We 
know it was not sanctioned from Sallie Mae. It was not requested from 
our office, I can tell the gentleman, in terms of a candidate package. 
We obviously are always happy to hear from our corporate constituents 
over any issue of concern, but somebody I think acted a little 
overzealously.
  I want to thank the gentleman from Missouri for the way he has 
handled this and note how, on our side, when there were efforts to take 
away the tax exemption from the NEA, I was one of the Republicans who 
do not believe in getting even with your enemies, and am in support of 
their continued tax exemption, and the same with the PIRGS. In that 
spirit, we are moving ahead and staying with the issue.
  Sallie Mae has permanent roots within the 11th Congressional 
District. When I was chairman of the county board we helped move their 
permanent headquarters out there, and they have been a great corporate 
citizen. I have seen the kind of partner they have been to our northern 
Virginia community, bringing hundreds of high technology jobs to our 
community and the promise of stable employment for years to come.
  But they bring a lot with it. Already, their work in the Reston 
community with the Reston Interfaith Center and the Embry Rucker 
Shelter are legendary. I know their employees will touch many more 
northern Virginia charities as time goes on.
  Sallie Mae is about to embark upon a great new adventure as a 
corporation, which will benefit northern Virginia and the American 
people. For northern Virginia, privatization will mean more jobs as 
Sallie Mae expands its business beyond student loans. It means that the 
state-of-the-art Reston technology center is a resource for more than 
just students and parents, but for more of Virginia's and America's 
families and businesses.
  Congress should not miss this historic opportunity to recharter a 
Government-sponsored enterprise as a fully private company, but it must 
act while the company is still healthy and before it encounters further 
economic uncertainties. Sallie Mae is a company on the cutting edge of 
technology with a rare knowledge of the higher education community. I 
am confident that by allowing the company to build upon its student 
loan business, it will serve a number of public needs that could not be 
anticipated by this Congress or the next.
  We should not pass up the chance to relieve the American taxpayer of 
nearly $50 billion or more in implicit liability for Sallie Mae's 
obligations. I therefore urge passage of this bill.
  Madam Speaker, I would express my thanks to the chairman, the 
gentleman from California [Mr. McKeon], the gentleman from California 
[Mr. Cunningham], the gentleman from Missouri [Mr. Clay], and all those 
concerned.
  Mr. McKEON. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I want to take this time to thank the gentleman from 
Missouri [Mr. Clay], ranking Member of the full committee, for his 
leadership and support in helping bring this bill to the floor, even 
though there were problems that have been discussed. I think he is to 
be commended for that. I appreciate it on a personal note.
  Madam Speaker, I would like to urge a strong ``yes'' vote for this 
bill.
  Mr. GOODLING. Mr. Speaker, today I rise in support of H.R. 1720, the 
Government-sponsored Enterprise Privatization Act of 1996. This 
legislation will privatize two Government-sponsored enterprises, the 
Student Loan Marketing Association ``Sallie Mae'' and the College 
Construction Loan Insurance Association ``Connie Lee''. In addition, it 
provides for the elimination of more than 40 unfunded programs found in 
the Higher Education Act, consolidates and improves Federal library and 
museum programs, and provides extensions for the National Literacy Act, 
the Adult Education and Literacy Act, and the Carl D. Perkins 
Vocational and Applied Technology Act.
  Sallie Mae and Connie Lee are both Government-sponsored enterprises 
chartered under the Higher Education Act. Both are for-profit, 
stockholder owned companies which have successfully fulfilled their 
intended purposes. After more than a year of discussions with the 
Treasury Department with respect to privatization, I am happy to 
support this bill that paves the way for a smooth transition to private 
sector status which works for Sallie Mae, Connie Lee, and the Federal 
Government.
  The bill before us also extends the Adult Education Act for 1 year 
and although it does not make major improvements to the act, we have 
included one important change. H.R. 1720 clarifies that funds under the 
Adult Education Act may be used for family literacy programs.
  If we are going to effectively reduce the number of adults who are 
illiterate, we must work with families. Children with parents who can 
help them with their school work have a greater likelihood of 
succeeding in school. Family literacy programs provide adults with the 
education and parenting skills necessary to help their children succeed 
in school. At the same time, they work with children to improve their 
academic skills. While some States do use their adult education funds 
for family literacy programs, it is important that we amend current law 
to clarify that this is an allowable use of funds.
  Finally, this legislation extends the authorization for the National 
Institute for Literacy and revises current law to allow the Institute 
to more effectively assist with national efforts to improve the 
literacy level of our country's citizens.
  My one regret about H.R. 1720, is that it represents only a small 
fraction of the reform in the area of job training and education that I 
have pushed for during this Congress. My committee devoted a huge 
amount of time to consolidating job training programs into block grants 
to States and localities that would have resulted in greater 
flexibility in this Country's efforts to enhance our job training 
system. Unfortunately, the Senate has been unable to bring H.R. 1617, 
the full CAREERS legislation, to the Senate floor, so today we are 
considering a small portion of that legislation.
  With that one regret, I strongly support passage of H.R. 1720.
  Mr. CUNNINGHAM. Madam Speaker, I rise in support of H.R. 1720. I 
would like to bring attention to four important parts of this 
legislation: the creation of the Institute for Museum and Library 
Services, the renewal of certain adult education and literacy programs, 
the privatization of Sallie Mae, and the resolution of the so-called 
85-15 issue.


              the institute of museum and library services

  With the close help of America's museum and library communities, this 
legislation creates an Institute of Museum and Library Services. It 
merges the Institute of Museum Services and our Federal Library 
Services and Construction Act programs into one organization. We do 
this for three reasons.
  First, museums and libraries are first and foremost delivers of 
information. Through books and exhibits, microfiche, video, and the 
Internet, they can and do work together for the benefit of citizens and 
communities.
  Second, the advance of the Information Age is transforming how people 
obtain information. So we have placed a new focus on the Federal role 
in these programs--toward electronically linking libraries and museums 
to one another, to other agencies and services, and to communities, 
schools, and citizens. We all know that the printing press 
revolutionized Europe in the Middle Ages by making books available to 
everyone. Today's Internet has that same potential--to bring people and 
information together from a whole world apart, with the simple point 
and click of a mouse.
  And third, the IMLS simplifies the administration of Federal museum 
and library programs, while maintaining their unique and useful 
character. Its leadership will alternate from leaders in libraries or 
museums. The IMLS library division will make simplified grants to State 
library agencies. And the IMLS museums portion will continue awarding 
grants to local museum organizations.
  I have already included for the Record letters of support from the 
California State Libraries, and others.
  Mr. Speaker, our libraries and museums are a national treasure. They 
are a free and open institution of learning for every American, 
regardless of wealth or background. They provide information, help 
people find jobs, offer entertainment, and unite our communities. They 
represent the best in America. In short, they work. And while most of 
their funding is from local, State and private resources, the Federal 
Government has a role. By adopting this legislation, we provide the 
catalyst to help bring our museums and libraries into the 21st Century.


            renewal of adult education and literacy programs

  H.R. 1720 also continues the authorization for our Federal adult 
education and literacy programs. Adult education provides individuals 
who lack the most basic skills--such as literacy, English proficiency, 
or a high school equivalency diploma--the tools they need to have a 
fighting chance at the American dream. An individual who cannot read or 
perform basic math cannot hope to find a good job, or to benefit from 
job training.
  Simply put, our investment in effective adult eduation transforms 
those who are dependent

[[Page H10802]]

upon society into contributors to society. Like the library and museum 
portion of H.R. 1720, these provisions were included in the CAREERS 
legislation which is stalled in the Senate. It deserves our support.


                         privatizing sallie mae

  Sallie Mae, the Student Loan Marketing Association, is a Government-
sponsored enterprise, owned by private stockholders, that provides a 
secondary market for student loan financing. When President Clinton 
advanced his Direct Lending initiative, it limited Sallie Mae's 
traditional market, and impacted Sallie Mae stockholders.
  I oppose President Clinton's direct lending plan because, over 7 
years, it costs taxpayers $1 billion more to provide the same number of 
student loans as private markets. And while the President has sought to 
have direct lending replace private markets, Congress has limited the 
growth of direct lending. Nevertheless, direct lending is a fact of 
life today. Its existence unfairly impacts the thousands of senior 
citizens, private pensions, and other Americans who own stock in Sallie 
Mae.
  Allowing Sallie Mae stockholders the opportunity to vote to privatize 
is simply a matter of fairness. The legislation structures any 
privatization carefully, so taxpayers and citizens alike get their 
money's worth.


                      partial resolution of 85-15

  This legislation also contains a partial resolution of the so-called 
85-15 issue. The 85-15 policy enacted by Congress has been implemented 
retroactively on for-profit institutions of higher learning. Such 
schools are made responsible for their compliance with regulations 
before they were published on May 1, 1994. This kind of retroactive 
enforcement is simply un-American.
  Our bill ends retroactive, preregulatory enforcement of the 85-15 
rule.
  Unfortunately, H.R. 1720 does not make a further necessary reform 
which I support. The measure does not exclude Federal training money 
from the 15 percent of a forprofit school's income coming from sources 
other than the Higher Education Act. As we all know, Federal training 
programs are not authorized by the Higher Education Act. They are 
authorized under other legislation. But the Department of Education has 
been enforcing 85-15 contrary to the will and intent of Congress. I am 
confident we will revisit this issue.


                            support of 1720

  I urge all my colleagues to support H.R. 1720. It is good for 
libraries and museums, for our children and our seniors, for students, 
and for many of our excellent forprofit educational institutions. Thank 
you, and I yield back the balance of my time.
  Mr. ROBERTS. Madam Speaker, I rise in support of H.R. 1720, the 
Government-Sponsored Enterprise Privatization Act of 1996. In 
particular, I am pleased that H.R. 1720 includes the privatization of 
the Student Loan Marketing Association, or Sallie Mae.
  Sallie Mae has fulfilled the mission of its Federal charter. However, 
as a for-profit, stockholder owned company, Sallie Mae wishes to 
continue to operate without the support of U.S. taxpayers and without 
restrictions from the U.S. Government. Sallie Mae's interest in 
privatization clearly shows that it remains committed to continuing its 
strong record in providing student loan servicing for hundreds of 
thousands of Americans.
  H.R. 1720 is an excellent example of how a properly managed 
Government program can use Federal resources to serve the American 
public and successfully make the transition to private business without 
Government assistance.
  Mr. McKEON. Madam Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore (Ms. Greene of Utah). The question is on the 
motion offered by the gentleman from California [Mr. McKeon], that the 
House suspend the rules and pass the bill, H.R. 1720, as amended.
  The question was taken; and (two-thirds of those having voted in 
favor thereof) the rules were suspended and the bill as amended, was 
passed.
  The title was amended so as to read: ``A bill to reorganize the 
Student Loan Marketing Association, to privatize the College 
Construction Loan Insurance Association, to amend the Museum Services 
Act to include provisions improving and consolidating Federal library 
service programs, and for other purposes.''
  A motion to reconsider was laid on the table.

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