[Congressional Record Volume 143, Number 100 (Tuesday, July 15, 1997)]
[Senate]
[Pages S7486-S7503]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. SPECTER:
  S. 1017. A bill to amend title 38, United States Code, to establish a 
presumption of total disability for certain individuals for purposes of 
nonservice-connected disability pension; to the Committee on Veterans' 
Affairs.


                         VETERANS' LEGISLATION

  Mr. SPECTER. Mr. President, as Chairman of the Committee on Veterans' 
Affairs, I have today introduced, at the request of the Secretary of 
Veterans Affairs, S. 1017, a proposed bill to establish a presumption 
of total disability for certain individuals for purposes of nonservice-
connected disability pension. The Secretary of Veterans Affairs 
submitted this legislation to the President of the Senate by letter 
dated June 16, 1997.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all administration-proposed draft legislation referred to the 
Committee on Veterans' Affairs. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record, together with the transmittal letter which 
accompanied it.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1017

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
       That that portion of subsection (a) of section 1502 of 
     title 38, United States Code, preceding paragraph (1) is 
     amended to read as follows:
       ``(a) For purposes of this chapter, a person shall be 
     considered to be permanently and totally disabled if such 
     person is 65 years of age or older and is a patient in a 
     nursing home or, regardless of age, is unemployable as a 
     result of a disability reasonably certain to continue 
     throughout the life of the disabled person, or is suffering 
     from--''.
                                                                    ____



                            The Secretary of Veterans Affairs,

                                        Washington, June 16, 1997.
     Hon. Albert Gore,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: Transmitted herewith is a draft bill to 
     amend section 1502(a) of title 38, United States Code, to 
     establish a presumption of total disability for certain 
     individuals for purposes of the nonservice-connected 
     disability pension program. I request that this draft bill be 
     referred to the appropriate committee for prompt 
     consideration and enactment.
       The draft bill would amend section 1502(a) of title 38, 
     United States Code, to establish a presumption of total 
     disability in the case of a person who is age 65 or older and 
     who is a patient in a nursing home, for purposes of 
     establishing basic eligibility under the Department of 
     Veterans Affairs' (VA) nonservice-connected disability 
     pension program.
       For many years, former section 502(a) (redesignated as 
     section 1502(a)) of title 38, United States Code, provided 
     that a person was presumed to be permanently and totally 
     disabled at age 65 for the purpose of establishing basic 
     pension eligibility. However, in 1990 Congress amended this 
     provision via the Omnibus Budget Reconciliation Act of 1990 
     (Pub. L. No. 101-508, Sec. 8002) to eliminate the presumption 
     of total disability at age 65 for claims filed after October 
     31, 1990. Consequently, it is now necessary that a rating 
     decision be rendered on the issue of permanent and total 
     disability before pension can be paid to any person, 
     regardless of age or circumstances.
       Under current law, an incongruous situation arises in the 
     case of a pension claimant who is a patient in a nursing 
     home. Pursuant to 38 U.S.C. Sec. 1502(b), such a person would 
     be considered to be in need of regular aid and attendance (a 
     level of disability which assumes the existence of permanent 
     and total disability) and, therefore, entitled to pension at 
     a higher rate. Nonetheless, the person could not establish 
     eligibility for any pension until a determination is made 
     through a rating activity that the person is permanently and 
     totally disabled. Consequently, under current law, if an 85-
     year old veteran in a nursing home were to file an 
     original pension claim, it would still be necessary to 
     prepare a rating decision on the issue of permanent and 
     total disability to establish the veterans' basic pension 
     eligibility under section 1502(a), although the veteran 
     would, once determined to be eligible, be considered under 
     section 1502(b) to be eligible for a higher payment of 
     pension based on the need for regular aid and attendance.
       Enactment of the proposed amendment to section 1502(a) 
     would be advantageous to VA and to claimants for pension and 
     other benefits administered by VA. Processing times for 
     original and reopened pension claims would be reduced because 
     development of medical evidence of a nursing home patient's 
     level of disability would no longer be necessary. This 
     improvement in efficiency would have a salutary effect on the 
     processing of other types of claims because rating 
     specialists and development personnel would have more time to 
     devote to other activities, including adjudication of 
     service-connected disability compensation claims.
       The proposed amendment would not threaten the integrity of 
     the pension program. An individual age 65 years or older who 
     is a patient in a nursing home would almost certainly qualify 
     as being permanently and totally disabled under 38 U.S.C. 
     Sec. 1502(a) as it is currently worded. The likelihood that 
     such an individual would eventually leave the nursing home is 
     slim. However, procedures are already in place for 
     reevaluating aid and attendance entitlement when a notice of 
     discharge from a nursing home is received in the case of a 
     veteran whose aid and attendance benefit is based on nursing-
     home-patient status. These procedures will be adapted to 
     require a rating decision upon a person's discharge from a 
     nursing home if the basic eligibility determination was 
     premised on the person's status as a patient in a nursing 
     home.
       Enactment of this proposal would merely speed the 
     processing of claims of persons who would otherwise qualify 
     for pension.
       This draft bill would affect direct spending; therefore, it 
     is subject to the pay-as-you-go requirement of the Omnibus 
     Budget Reconciliation Act of 1990. The Office of Management 
     and Budget (OMB) estimates that the pay-as-you-go effect of 
     this proposal is zero.
       OMB advises that there is no objection from the standpoint 
     of the Administration's program to the submission of this 
     proposal to Congress.
           Sincerely yours,
                                                      Jesse Brown.
                                 ______
                                 
      By Mr. SPECTER (by request):
  S. 1018. A bill to amend provisions of law governing benefits for 
certain children of Vietnam veterans who are born with spina bifida, 
and for other purposes; to the Committee on Veterans' Affairs.


                         Veterans' Legislation

  Mr. SPECTER. Mr. President, as Chairman of the Committee on Veterans' 
Affairs, I have today introduced, at the request of the Secretary of 
Veterans Affairs, S. 1018, a proposed bill to amend provisions of law 
governing benefits for certain children of Vietnam veterans who are 
born with spina bifida, and for other purposes. The Secretary of 
Veterans Affairs submitted this legislation to the President of the 
Senate by letter dated June 18, 1997.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all administration-proposed draft legislation referred to the 
Committee on Veterans' Affairs. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.

[[Page S7487]]

  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record, together with the transmittal letter which 
accompanied it.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1018

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. REFERENCES TO TITLE 38, UNITED STATES CODE.

       Except as otherwise expressly provided, whenever in this 
     Act an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of title 38, United States Code.

     SEC. 2. AMENDMENTS TO DEFINITIONS.

       Section 1801 is amended to read as follows:
       ``For the purposes of this chapter--
       ``(1) The term `child', with respect to a Vietnam veteran, 
     means a natural child of a Vietnam veteran, regardless of age 
     or marital status, who was conceived after the date on which 
     the Vietnam veteran first entered the Republic of Vietnam 
     during the period beginning on January 9, 1962, and ending on 
     May 7, 1975.
       ``(2) The term `Vietnam veteran' means an individual who 
     performed active military, naval, or air service in the 
     Republic of Vietnam during the period beginning on January 9, 
     1962, and ending on May 7, 1975, without regard to the 
     character of such individual's service.''.

     SEC. 3. APPLICATION OF CERTAIN ADMINISTRATIVE PROVISIONS TO 
                   CHAPTER 18.

       Section 1806 is amended to read as follows:
       ``The provisions of sections 5101(c), 5110 (a), (b)(2), 
     (g), and (i), 5111, and 5112 (a), (b)(1), (b)(6), (b)(9), and 
     (b)(10) of this title shall be deemed to apply to benefits 
     under this chapter in the same manner in which they apply to 
     veterans' disability compensation.''.

     SEC. 4. AMENDMENTS TO VOCATIONAL REHABILITATION PROVISIONS.

       (a) Section 1804(c)(1)(B) is amended by striking out 
     ``institution of higher education'' and inserting in lieu 
     thereof ``institution of higher learning''.
       (b) Section 1804(d) is amended by adding after paragraph 
     (2) the following new paragraph:
       ``(3) A vocational training program under this section may 
     begin on the child's eighteenth birthday, or on the 
     successful completion of the child's secondary schooling, 
     whichever first occurs, except that, if the child is above 
     the age of compulsory school attendance under applicable 
     State law, and the Secretary determines that the child's best 
     interests will be served thereby, the vocational training 
     program may begin before the child's eighteenth birthday.''

     SEC. 5. CONFORMING CHANGES TO EFFECTIVE DATE PROVISIONS.

       (a) Section 421(d) of Public Law 104-204, 110 Stat. 2926, 
     is amended by striking out ``January 1, 1997'' and inserting 
     in lieu thereof ``October 1, 1997''.
       (b) Section 422(b)(1) of Public Law 104-204, 110 Stat. 
     2927, is amended by striking out ``October 1, 1996'' and 
     inserting in lieu thereof ``October 1, 1997''.
       (c) Section 422(c) of Public Law 104-204, 110 Stat. 2927, 
     is repealed.

     SEC. 6. EFFECTIVE DATE.

       The amendments made by this Act shall be effective on 
     October 1, 1997.
                                                                    ____



                            The Secretary of Veterans Affairs,

                                        Washington, June 18, 1997.
     Hon. Albert Gore,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: I am pleased to transmit the enclosed 
     draft bill to amend title 38, United States Code, to ``amend 
     provisions of law governing benefits for certain children of 
     Vietnam veterans who are born with spina bifida, and for 
     other purposes.'' I request that this draft bill be referred 
     to the appropriate committee for prompt consideration and 
     enactment.
       Section 2 of the draft bill would amend new section 1801 of 
     title 38, United States Code (as added by section 421(b)(1) 
     of Pub. L. No. 104-204, effective October 1, 1997). Section 
     1801 sets forth definitions of certain terms for purposes of 
     new chapter 18 of that title, which authorizes benefits for 
     children of Vietnam veterans who are born with spina bifida. 
     The definitions of ``child'' and ``Vietnam veteran'' would be 
     amended by section 2 of the draft bill.
       Pursuant to section 1801(1) as added by Pub. L. No. 104-
     204, the term ``child'' is defined for purposes of new 
     chapter 18 to mean ``a natural child of the Vietnam veteran . 
     . . who was conceived after the date on which the veteran 
     first entered the Republic of Vietnam during the Vietnam 
     era.'' (Emphasis added.) At the time of enactment of that 
     statute, the term ``Vietnam era'' was defined in 38 U.S.C. 
     Sec. 101(29) as the period beginning August 5, 1964, and 
     ending on May 7, 1975. Subsequently, however, section 505(a) 
     of Pub. L. No. 104-275 (effective January 1, 1997) amended 
     the definition of that term to mean either the period 
     beginning on February 28, 1961, and ending on May 7, 1975, in 
     the case of a veteran who served in the Republic of Vietnam 
     during that period, or the period beginning on August 5, 
     1964, and ending on May 7, 1975, in all other cases. In 
     addition, section 505(b) ob Pub. L. No. 104-275 amended 38 
     U.S.C. Sec. 1116(a) by striking out references to the 
     ``Vietnam era'' and substituting references to ``the period 
     beginning on January 9, 1962, and ending on May 7, 1975,'' 
     for the purposes of a statutory presumption of service 
     connection for certain disabilities based on exposure to 
     herbicide agents in the case of a veteran who served in the 
     Republic of Vietnam during that period. January 9, 1962, is 
     the earliest date herbicide agents were known to have been 
     used in the Republic of Vietnam in connection with the 
     armed conflict.
       Since the purpose of new chapter 18 is to address 
     disabilities resulting from the birth defect spina bifida 
     which may be associated with a parent's exposure to herbicide 
     agents while serving in the Republic of Vietnam, we believe 
     it would be appropriate for references to the applicable time 
     period in section 1801 to be consistent with the time period 
     now set forth in 38 U.S.C. Sec. 1116(a). Accordingly, the 
     term ``child'' with respect to a Vietnam veteran would be 
     defined to mean a natural child of a Vietnam veteran, 
     regardless of age or marital status, who was conceived after 
     the date on which the Vietnam veteran first entered the 
     Republic of Vietnam during the period beginning on January 9, 
     1962, and ending on May 7, 1975. A similar conforming change 
     would be made to the definition of ``Vietnam veteran'' in 
     section 1801(2), which currently uses the term ``Vietnam 
     era''.
       Section 1801(2) of title 38, United States Code, as added 
     by Pub. L. No. 104-204, defines the term ``Vietnam veteran'' 
     as a ``veteran'' who performed active service in the Republic 
     of Vietnam during the Vietnam era. We believe use of the term 
     ``veteran'' in the definition of the term ``Vietnam veteran'' 
     may precipitate, in a small number of cases, an unnecessary 
     eligibility determination, relating not to the child, but to 
     the parent, in that 38 U.S.C. Sec. 101(2) defines the term 
     ``veteran,'' mean ``a person who served in the active 
     military, naval, or air service, and who was discharged or 
     released therefrom under conditions other than 
     dishonorable.'' (Emphasis added.) As a result of the 
     character-of-discharge component in the definition of 
     ``veteran,'' there may be some instances in which a parent 
     may fail to attain veteran status based on character of 
     discharge, thus precluding his or her child's eligibility for 
     benefits under chapter 18. Authorization of benefits and 
     services for children of Vietnam veterans who suffer from 
     spina bifida, pursuant to Pub. L. No. 104-204, represents the 
     first instance in which the Department of Veterans Affairs 
     (VA) will be authorized to provide benefits to a child of a 
     veteran based on a direct injury to the child rather than the 
     parent. We do not believe that a child's eligibility for 
     benefits and services under chapter 18 for a physical injury 
     suffered by the child should be premised on a parent's 
     eligibility for veteran's benefits. Therefore, we propose to 
     clarify the definition of the term ``Vietnam veteran'' to 
     indicate that the relevant factor for consideration is the 
     physical presence of the child's parent in the Republic of 
     Vietnam on military service during a period of time when use 
     of herbicide agents was documented, not the character of that 
     parent's military service. Accordingly, the term ``Vietnam 
     veteran'' would be defined to mean an individual who 
     performed active military, naval, or air service in the 
     Republic of Vietnam during the period beginning on January 
     9, 1962, and ending on May 7, 1975, without regard to the 
     character of such individual's service.
       Section 3 of the draft bill would amend 38 U.S.C. Sec. 1806 
     to provide for the applicability to the provision of benefits 
     under chapter 18 of certain existing administrative 
     provisions which are applicable to the service-connected 
     disability compensation program. Section 1806, as amended by 
     this section, would make applicable, for purposes of the 
     administration of benefits under chapter 18, references to 
     the following sections of title 38, United States Code: 
     5101(c) (regarding the furnishing of Social Security 
     numbers); 5110(a) (regarding the general effective-date rule 
     for an original benefit award); 5510(b)(2) (regarding the 
     effective date of an award of increased benefits); 5110(g) 
     regarding effective dates of awards based on Acts or 
     administrative issues); 5110(i) (regarding allowance of a 
     reopened claim based on the correction of military records); 
     5111 (regarding the commencement of the period of payment of 
     benefits); and 5112(a), 5112(b)(1), 5112(b)(6), 5112(b)(9), 
     and 5112(b)(10) (regarding the effective date of a reduction 
     or discontinuance of benefits on certain bases). We believe 
     the applicability of these sections to new chapter 18 is 
     necessary to assure equitable and consistent administration 
     of benefits under that chapter in a manner similar to the 
     administration of the compensation program.
       Section 4 of the draft bill would make no changes 
     concerning vocational training and rehabilitation benefits 
     for children of Vietnam veterans who are born with spina 
     bifida. First, subsection (a) of this section would amend 38 
     U.S.C. Sec. 1804(c)(1)(B) by replacing the term ``institution 
     of higher education'' with the term ``institution of higher 
     learning''. The latter is a term of art defined in 38 U.S.C. 
     Sec. 3452(f), as meaning, generally, a college, university, 
     or similar institution, including a technical or business 
     school, offering postsecondary level academic instruction 
     that leads to an associate or higher degree if the school is 
     empowered by state law to grant an associate or higher degree 
     or otherwise is accredited for degree programs by a 
     recognized accrediting agency. The term,

[[Page S7488]]

     which also includes a hospital offering educational programs 
     at the postsecondary level, has a long history of usage by VA 
     in its administration of the various GI Bill and other 
     educational assistance programs for eligible veterans and 
     dependents, as well as the chapter 31 vocational 
     rehabilitation program for certain service disabled veterans 
     with employment handicaps. By contract, the term 
     ``institution of higher education'' is not found in title 38 
     and has no accepted meaning with regard to administration of 
     veterans' benefits under that title. In view of this, and 
     since we know of no substantive basis for use of different 
     terminology for purposes of section 1804, we believe this 
     proposed change will promote ease of understanding and 
     administration of section 1804.
       Subsection (b) of section 4 would amend section 1804(d) to 
     add a new provision to specify that an eligible child may 
     enter a vocational training program under that section as of 
     the child's eighteenth birthday or on completion of secondary 
     schooling, whichever first occurs. The Secretary could grant 
     an exception that would permit entry into the program before 
     age 18 when in the best interest of a child above the age of 
     compulsory school attendance. This change addresses an 
     omission in the statute by putting a reasonable floor on the 
     age when a child can be evaluated for the feasibility of 
     achieving a vocational goal and can commence training toward 
     that objective. Vocational training normally is initiated 
     upon completion of secondary or high school education, and 
     this change recognizes that fact. It also would encourage a 
     child's completion of secondary education where feasible, 
     while allowing for exceptions where completion is not 
     feasible. In this regard, it may be noted that this proposal 
     is patterned after a provision applicable to commencement of 
     educational assistance for an eligible child under chapter 35 
     of title 38, the Survivors' and Dependents' Educational 
     Assistance program. Fixing the beginning of eligibility for 
     commencement of a program in this manner is similarly 
     appropriate for children afforded assistance under section 
     1804.
       Section 5 is intended to eliminate apparent inconsistencies 
     between the respective January 1, 1997, and October 1, 1996, 
     effective dates set forth in sections 421(d) and 422(b)(1) of 
     Pub. L. No. 104-204 and an overriding October 1, 1997, 
     effective date provision in section 422(c) of that law. 
     Enactment of this section would not result in a substantive 
     change in the operative October 1, 1997, effective date, but 
     will eliminate the potential for confusion regarding the 
     various effective dates and insure that each of the subject 
     amendments will become effective simultaneously.
       Pursuant to section 422(c) of Pub. L. No. 104-204, 
     notwithstanding sections 421(d) or 422(b)(1) of that law, the 
     effective date for the amendments made by section 421(b) 
     (which adds new chapter 18) and section 422(a) (which amends 
     38 U.S.C. Sec. 1151), is October 1, 1997. Section 421(d) 
     otherwise would have established a January 1, 1997, effective 
     date for new chapter 18, and section 422(b)(1) would have 
     established October 1, 1996, as the effective date for the 
     amendments to section 1151. Section 5(a) would amend section 
     421(d) of Pub. L. No. 104-204 by striking out ``January 1, 
     1997'' and substituting ``October 1, 1997'' in its place. In 
     addition, section 5(b) would amend section 422(b)(1) of 
     that public law to specify an effective date of October 1, 
     1997, for the amendments made by section 422(a) to 38 
     U.S.C. Sec. 1151, in place of October 1, 1996. Finally, 
     section 5(c) would repeal section 422(c) of Pub. L. No. 
     104-204, as that section would no longer be needed.
       In addition to simplifying the effective date provisions 
     applicable to sections 421 and 422 of Pub. L. No. 104-204, 
     this change would avoid an anomaly in the application of the 
     amendment to 38 U.S.C. Sec. 1151 made by section 422(a). In 
     part to assure that any benefit costs associated with new 
     chapter 18 would be fully offset by cost savings, section 
     422(a) amended section 1151 to provide, in general, that 
     compensation and dependency and indemnity compensation on the 
     basis of disability or death as a result of VA medical 
     treatment would be payable only where disability or death was 
     due to fault on the part of VA or an event not reasonably 
     foreseeable. Although section 422(c) currently provides that 
     section 422 shall not take effect until October 1, 1997, 
     section 422(b)(2) states that the amended section 1151 shall 
     govern determinations of eligibility ``made with respect to 
     claims filed on or after the effective date set forth in 
     paragraph (1)'' of section 422(b), i.e., October 1, 1996. 
     This suggests that, although the amendments to section 1151 
     made by section 422 do not take effect until October 1, 1997, 
     when they do, any claims filed between October 1, 1996, and 
     October 1, 1997, but not yet decided by October 1, 1997, 
     would be subject to the more narrow provisions of amended 
     section 1151. The criteria applicable to eligibility 
     determinations should not be dependent on how long it takes 
     VA to adjudicate a particular section-1151 claim. The 
     amendments proposed in section 5 of the draft bill would 
     avoid this result by clarifying that the changes to section 
     1151 apply only with respect to claims filed on or after 
     October 1, 1997, as we believe was intended.
       Section 6 of the draft bill would provide that the 
     effective date for the amendments made by the draft bill 
     shall be October 1, 1997. This provision is necessary to 
     assure that the amendments proposed in this draft bill will 
     have the same effective date as the amendments to title 38, 
     United States Code, applicable to children of Vietnam 
     veterans who are born with spina bifida enacted as part of 
     Pub. L. No. 104-204.
       This proposal would affect direct spending; therefore it is 
     subject to the pay-as-you-go requirement of the Omnibus 
     Budget Reconciliation Act of 1990. The Office of Management 
     and Budget (OMB) estimates that the pay-as-you-go effect of 
     this proposal would be zero.
       OMB advises that there is no objection from the standpoint 
     of the Administration's program to the submission of this 
     proposal to the Congress.
           Sincerely yours,
                                                      Jesse Brown.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Kennedy, and Mr. Chafee):
  S. 1020. A bill to amend the National Foundation on the Arts and 
Humanities Act of 1965 and the Art and Artifacts Indemnity Act to 
improve and extend the acts, and for other purposes; to the Committee 
on Labor and Human Resources.


               the arts and humanities amendments of 1997

  Mr. JEFFORDS. Mr. President, I rise today to introduce the Arts and 
Humanities Amendments of 1997 along with my colleague from 
Massachusetts, Senator Kennedy and my colleague from Rhode Island, 
Senator Chafee. This legislation provides an authorization for the 
National Endowment for the Arts [NEA] and the National Endowment for 
the Humanities [NEH]--agencies which I believe contribute a great deal 
to the wealth and richness of our Nation.
  The bill that we are introducing today is based closely on the bill 
that was passed out of the Senate Labor and Human Resources Committee 
last Congress by a solid bipartisan vote of 12 to 4. The legislation 
reflected ideas and consideration from Senators on both sides of the 
aisle. The result of that collaboration was a strong bill, which makes 
substantial and needed changes to the agencies while allowing the 
agencies to continue what they do best--provide support for the arts 
and humanities in communities throughout this Nation.
  We began the reauthorization process this Congress in May with a 
hearing which focused on education programs in the arts and humanities. 
It was clear to me from that hearing that arts education programs and 
education programs in the humanities make a real difference in the 
lives of individuals of all ages and from all corners of the country.
  As a result of what I learned at the hearing, the bill that I am 
introducing today directs the NEA to use any funds appropriated above 
the fiscal year 1997 level for arts education programs, especially 
those innovative programs that integrate the arts in the teaching of 
other core academic subjects. The arts are important to ensuring the 
future academic success of our Nation's students. In fact, according to 
college board figures, students of the arts outperform their nonarts 
peers on the SAT. In 1995, those who had studied the arts for 4 or more 
years scored 59 points higher in the verbal and 44 points higher in the 
math portions of the SAT compared with students with no course work or 
experience in the arts.
  I have only to look in my backyard to understand the importance and 
value of the NEA and NEH. The benefits of NEA and NEH funding in 
Vermont are significant and far reaching. Thanks in part to a $30,000 
grant from the NEA, folks in 26 Vermont communities will be able to 
hear the magnificent music of the Vermont Symphony Orchestra. The 
Vermont Symphony will perform for 12,000 school children as part of a 
school partnership program, opening their worlds to the magic and 
wonder of music, many for the first time. Our Vermont Arts Council, 
through the funds it receives from NEA will support a wide range of 
arts programs benefiting all Vermonters. The NEH makes a significant 
and positive difference in the State of Vermont, too. The Vermont 
Council on the Humanities is a national leader in creating literacy 
programs which reach individuals of all reading levels and all ages as 
a result of the funding provided by the NEH. The University of Vermont 
received a grant from the NEH to catalogue and preserve our State's 
local newspapers. This grant is part of a national initiative 
spearheaded by the NEH to ensure that the local papers which chronicle 
the history of our State and the Nation are available to future 
generations.
  This bill makes substantial improvement to the way these agencies do

[[Page S7489]]

business. In addition, the legislation makes it clear that these 
agencies are meant to serve the American public, especially those who 
would not otherwise have the arts and humanities available to them.
  This bill proposes significant changes to current law. The changes 
are far reaching and go the fundamental operations of both the NEA and 
NEH. It is our hope that these changes will provide guidance and set 
priorities for funding for projects in an effort to increase access to 
programs and projects which are of the highest caliber.
  The legislation imposes a new structure on the NEA and NEH, and 
increases the percentage of funds made available to State councils. It 
places greater emphasis on ensuring Endowment programs reach 
underserved communities.
  The bill calls for a merging of many of the administrative functions 
of the Endowments with the intent of eliminating costly and unnecessary 
duplication. Administrative funds are capped on a sliding scale. In an 
effort to further streamline the agencies and cut bureaucracy, the 
number of members on the National Councils have been decreased. A 
provision has been included which empowers the NEA and NEH to recapture 
funds from grants that have gone on to commercial and financial 
success. Both Endowments are explicitly prohibited from using funds for 
purposes of lobbying or general membership services.
  Some changes apply only to the NEA. The legislation prohibits the NEA 
from making nonspecific seasonal support grants. It eliminates 
subgranting--only States, regional groups, and local arts agencies 
which are agencies of local government would have the authority to 
subgrant under this legislation. it restricts grants to individuals to 
the categories of literature, National Heritage, and Jazz Master 
fellowships. Non-Federal matching requirements are increased in the 
National Significance grant category to 3:1 and in some cases, 5:1. We 
have increased turnover in the panel system and increased lay person 
participation to ensure greater community involvement and input. In 
addition, panels are prohibited from recommending specific amounts of 
grants and will be required to recommend more grants than funding 
available. The Council, too, will have to recommend approval for more 
applications than there are funds available. These provision give the 
chair greater decisionmaking responsibility and make the chair more 
accountable for grants the agency makes.
  Lastly, but in my opinion one of the most important changes to this 
bill is the expansion of the Arts and Artifact Indemnity Act. This 
change will enable extraordinary domestic exhibitions to be eligible 
for Federal indemnification and afford more Americans access to the 
great artistic treasures of this Nation.
  Many of my colleagues in the House do not feel that there is a 
Federal role for the arts, but I do not agree with that position. The 
role of the States in distributing NEA funds is very important, and for 
that reasons, this legislation does increase the percentage of funds 
available to State arts and agencies and State humanities 
organizations. Still, in my view, there is an important national role 
that must be preserved. The New York-based Chamber Music America 
received an NEA grant of $145,000 for a residency program which 
benefited rural communities in Arkansas, California, Pennsylvania, 
Texas, Kentucky, Maine, and Oregon. The NEA made a grant to the YMCA in 
Chicago, IL, for its National Readings Tour of the National Writer's 
Voice project which established literary arts centers in YMCA's in New 
Mexico, South Dakota, New Jersey, California, North Carolina, New 
Hampshire, and Florida. Both these grants benefited people far beyond 
the boundary of the State that received the grant. They are just two 
examples of extraordinary arts programs that would not longer be 
available to people in my State or any other State if all NEA funds 
were block granted.
  In setting clear priorities for the NEA and NEH, and striking a 
balance between leadership at the State level and leadership at the 
national level, I am confident that both agencies will be even better 
able to serve their constituency--all the people of this country. I ask 
unanimous consent that a copy of the legislation be included as part of 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1020

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Arts and Humanities 
     Amendments of 1997''.
TITLE I--NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES ACT OF 1965

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

       The National Foundation on the Arts and the Humanities Act 
     of 1965 (20 U.S.C. 951 et seq.) is amended to read as 
     follows:

     ``SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       ``(a) Short Title.--This Act may be cited as the `National 
     Foundation on the Arts and the Humanities Act of 1965'.
       ``(b) Table of Contents.--The table of contents is as 
     follows:
``Sec. 1. Short title; table of contents.
``Sec. 2. Purposes.
``Sec. 3. Definitions.

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

``Sec. 101. Establishment of the National Foundation on the Arts and 
              the Humanities.
``Sec. 102. General limitations on grants.
``Sec. 103. Joint administration.
``Sec. 104. Study on a true endowment.
``Sec. 105. Donations, bequests, and devises.
``Sec. 106. Authorization of appropriations.

              ``TITLE II--NATIONAL ENDOWMENT FOR THE ARTS

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

           ``TITLE III--NATIONAL ENDOWMENT FOR THE HUMANITIES

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

     ``SEC. 2. PURPOSES.

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

[[Page S7490]]

       ``(B) to increase access to the arts and the humanities for 
     all persons in the United States by--
       ``(i) encouraging and developing quality education in the 
     arts and the humanities at all levels, in conjunction with 
     programs of lifelong learning in the arts and the humanities 
     for all age groups and with formal systems of elementary, 
     secondary, and postsecondary education; and
       ``(ii) encouraging and facilitating the work of scholars, 
     artists, arts institutions, and Federal, State, regional, and 
     local agencies in the area of education in the arts and the 
     humanities.

     ``SEC. 3. DEFINITIONS.

       ``In this Act:
       ``(1) Arts.--The term `arts' includes--
       ``(A) dance, design, literature, media arts, music, 
     theater, and visual arts;
       ``(B) folk and traditional arts practiced by the diverse 
     peoples of the United States; and
       ``(C) the presentation, performance, execution, exhibition, 
     preservation, and study of the arts described in subparagraph 
     (A) or (B), including the study of the arts through 
     apprenticeships, internships, and other career oriented work-
     study experiences for artists and art teachers, and 
     residencies for artists at all educational levels.
       ``(2) Cultural heritage.--The term `cultural heritage' 
     means the living legacy of creations, skills, and knowledge 
     handed down from prior generations--
       ``(A) that embraces the traditional arts and ideas that are 
     developed informally and that reflect the heritage, 
     tradition, and history of American communities over the 
     centuries; and
       ``(B) that continues to evolve as new groups contribute to 
     the American experience.
       ``(3) Grant.--The term `grant' includes a loan, a contract, 
     and a cooperative agreement.
       ``(4) Group.--The term `group' includes any State or local 
     arts agency, regional group, and any nonprofit organization 
     or institution in the United States, whether or not 
     incorporated.
       ``(5) Humanities.--The term `humanities' includes--
       ``(A) the study and interpretation of--
       ``(i) language, both modern and classical, linguistics, 
     literature, history, jurisprudence, philosophy, archaeology, 
     comparative religion, and ethics;
       ``(ii) the history, criticism, and theory of the arts;
       ``(iii) folklore and folklife; and
       ``(iv) the aspects of the social sciences that have 
     humanistic content and employ humanistic methods; and
       ``(B) the study and application of the humanities described 
     in subparagraph (A) to the human environment with particular 
     attention to--
       ``(i) reflecting the heritage, traditions, and history of 
     the United States; and
       ``(ii) the relevance of the humanities described in 
     subparagraph (A) to the conditions of national life.
       ``(6) Program income.--
       ``(A) In general.--The term `program income' means any 
     money that is earned or received, by a recipient of a grant 
     made under title II or III, from an activity supported by the 
     funds made available through the grant or from a product 
     resulting from or related to an activity carried out under 
     the grant.
       ``(B) Types of income.--The term includes--
       ``(i) income from a fee for service performed, or from the 
     sale of an item created, under the grant;
       ``(ii) income from a licensing fee on a product related to 
     an activity carried out under the grant;
       ``(iii) a usage or rental fee for equipment or property 
     acquired under the grant;
       ``(iv) an admission fee for an activity carried out under 
     the grant;
       ``(v) income from a broadcast or distribution right for 
     such an activity; and
       ``(vi) a royalty on a patent or copyright for such an 
     activity.
       ``(7) Regional group.--The term `regional group' means any 
     multistate group, whether or not representative of contiguous 
     States.
       ``(8) State.--The term `State' includes, in addition to the 
     several States of the United States, the Commonwealth of 
     Puerto Rico, the District of Columbia, Guam, American Samoa, 
     the Commonwealth of the Northern Mariana Islands, and the 
     United States Virgin Islands.
       ``(9) Underserved communities.--The term `underserved 
     communities' means those communities that have historically 
     been outside the purview of arts and humanities programs.
     ``TITLE I--NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES

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

       ``(a) Establishment.--There is established a National 
     Foundation on the Arts and the Humanities (referred to in 
     this Act as the `Foundation'), which shall be composed of a 
     National Endowment for the Arts, a National Endowment for the 
     Humanities (each of which may be referred to in this title as 
     an `Endowment'), and an Institute of Museum and Library 
     Services.
       ``(b) Purpose.--The purpose of the Foundation shall be to 
     develop and promote a national policy of support for the arts 
     and the humanities in the United States.
       ``(c) Limitation.--In the administration of this Act no 
     department, agency, officer, or employee of the United States 
     shall exercise any direction, supervision, or control over 
     the policy determination, personnel, curriculum, 
     administration, or operation, of any school or other non-
     Federal agency, institution, organization, or association.

     ``SEC. 102. GENERAL LIMITATIONS ON GRANTS.

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

     ``SEC. 103. JOINT ADMINISTRATION.

       ``(a) Inspector General.--There shall be in the Foundation 
     a single Office of the Inspector General for the National 
     Endowment for the Arts and the National Endowment for the 
     Humanities. The Office shall be headed by 1 Inspector General 
     appointed in accordance with the Inspector General Act of 
     1978 (5 U.S.C. App.). The Inspector General shall carry out 
     the duties prescribed in such Act, including conducting 
     appropriate reviews to ensure that recipients of grants under 
     titles II and III comply with the applicable regulations and 
     procedures established under this Act, including regulations 
     relating to accounting and financial matters.
       ``(b) Reporting.--The Inspector General for the National 
     Endowment for the Arts and the National Endowment for the 
     Humanities shall report--
       ``(1) to the Chairperson of the National Endowment for the 
     Arts with respect to matters relating to the National 
     Endowment for the Arts; and
       ``(2) to the Chairperson of the National Endowment for the 
     Humanities with respect to matters relating to the National 
     Endowment for the Humanities.
       ``(c) Other Functions.--The Chairperson of the National 
     Endowment for the Arts and Chairperson of the National 
     Endowment for the Humanities shall ensure nonduplication of 
     administrative functions, such as provision of facilities and 
     space, records management, contracting, procurement, 
     printing, and provision of mail and library services. The 
     Chairpersons shall enter into an interagency agreement to 
     jointly carry out the functions with the minimum necessary 
     expense.
       ``(d) Report.--Not later than 60 days after the date of 
     enactment of the Arts and Humanities Amendments of 1997, the 
     Chairperson of the National Endowment for the Arts and the 
     Chairperson of the National Endowment for the Humanities 
     shall jointly prepare and submit to the appropriate 
     committees of Congress a report containing a plan that 
     describes the manner in which the Chairpersons will jointly 
     carry out the functions described in subsection (c). Not 
     later than 180 days after such date of enactment, the 
     Chairpersons shall implement the plan.

     ``SEC. 104. STUDY ON A TRUE ENDOWMENT.

       ``(a) In General.--The Chairperson of the National 
     Endowment for the Arts and the Chairperson of the National 
     Endowment for the Humanities, in consultation with persons 
     with expertise in the arts, humanities, business, charitable 
     giving, and copyright industries, and other appropriate 
     Federal agencies, shall jointly conduct, or contract for, a 
     study on the feasibility of establishing a true endowment for 
     the National Endowment for the Arts and the National 
     Endowment for the Humanities in order to provide supplemental 
     funding to support the efforts of the National Endowment for 
     the Arts and the National Endowment for the Humanities, 
     respectively.
       ``(b) Scope of Study.--The study described in subsection 
     (a) shall examine innovative methods through which a true 
     endowment may be funded, including such methods as private 
     fundraising, an extension of a copyright term, recapture of 
     funds from past grants of the National Endowment for the Arts 
     and the National Endowment for the Humanities that have 
     proven profitable, or any other innovative methods the 
     Chairpersons determine appropriate.
       ``(c) Report.--Not later than 1 year after the date on 
     which funding is made available under this Act to conduct the 
     study described in subsection (a), the Chairperson of the 
     National Endowment for the Arts and the Chairperson of the 
     National Endowment for the Humanities shall jointly prepare 
     and submit to the appropriate committees of Congress a report 
     containing recommendations on the innovative methods through 
     which the true endowment may be funded to support efforts 
     described in subsection (a).

     ``SEC. 105. DONATIONS, BEQUESTS, AND DEVISES.

       ``(a) Donations, Bequests, and Devises to the Foundation 
     Without Designation.--
       ``(1) In general.--In any case in which any money or other 
     property is donated, bequeathed, or devised to the Foundation 
     without designation of the Endowment for the benefit of which 
     the money or property is intended, each Chairperson of an 
     Endowment shall have authority to receive such money or 
     property.
       ``(2) Unrestricted donations, bequests, and devises.--
     Except as provided in paragraph (3), unless the Chairpersons 
     of the Endowments agree otherwise, the money or property 
     described in paragraph (1) shall be deemed to have been 
     donated, bequeathed, or devised in equal shares to each 
     Endowment.
       ``(3) Restricted donations, bequests, and devises.--In any 
     case in which any money or property is donated, bequeathed, 
     or devised to the Foundation with a condition or restriction, 
     such money or property shall be deemed to have been donated, 
     bequeathed, or devised to the Endowment whose function it is 
     to carry out the purposes of the condition or restriction.

[[Page S7491]]

       ``(b) Donations, Bequests, and Devises to the Endowments.--
       ``(1) Chairperson of the national endowments for the 
     arts.--
       ``(A) In general.--The Chairperson of the National 
     Endowment for the Arts (referred to in this paragraph as the 
     `Chairperson'), in carrying the functions of the Chairperson, 
     shall have authority--
       ``(i) to solicit, accept, receive, invest, and use money 
     and other property donated, bequeathed, or devised to the 
     Endowment, either absolutely or in trust, with or without a 
     condition or restriction, including a condition that the 
     Chairperson use other funds of the Endowment for the purposes 
     of the donation, bequest, or devise; and
       ``(ii) to sell or otherwise dispose of such property,

     to carry out the activities of the Endowment under title II.
       ``(B) Proceeds.--
       ``(i) Receipt of proceeds.--Any proceeds from a donation, 
     bequest, or devise under subparagraph (A) shall be paid by 
     the donor or the representative of the donor to the 
     Chairperson. Any proceeds from any sale or disposition of 
     property under subparagraph (A) shall be retained by the 
     Chairperson.
       ``(ii) Investment of proceeds.--The Chairperson shall 
     invest the proceeds described in clause (i) that are not 
     required to carry out subsection (c) and section 210. Such 
     investments shall be made only in interest-bearing accounts 
     to the credit of the National Endowment for the Arts, of 
     which only 50 percent of the accumulated interest may be used 
     for the purposes of carrying out the activities of the 
     Endowment under title II.
       ``(C) Notwithstanding subparagraphs (A) and (B)(ii), any 
     money and other property donated, bequeathed, or devised 
     under subparagraph (A)(i) with a condition or restriction 
     shall be used, expended, or invested subject to such 
     condition or restriction.
       ``(2) Chairperson of the national endowments for the 
     humanities.--
       ``(A) In general.--The Chairperson of the National 
     Endowment for the Humanities (referred to in this paragraph 
     as the `Chairperson'), in carrying the functions of the 
     Chairperson, shall have authority--
       ``(i) to solicit, accept, receive, invest, and use money 
     and other property donated, bequeathed, or devised to the 
     Endowment, either absolutely or in trust, with or without a 
     condition or restriction, including a condition that the 
     Chairperson use other funds of the Endowment for the purposes 
     of the donation, bequest, or devise; and
       ``(ii) to sell or otherwise dispose of such property,
     for purposes of carrying out the activities of the Endowment 
     under title III.
       ``(B) Proceeds.--
       ``(i) Receipt of proceeds.--Any proceeds from a donation, 
     bequest, or devise under subparagraph (A) shall be paid by 
     the donor or the representative of the donor to the 
     Chairperson. Any proceeds from any sale or disposition of 
     property under subparagraph (A) shall be retained by the 
     Chairperson.
       ``(ii) Investment of proceeds.--The Chairperson shall 
     invest the proceeds described in clause (i) that are not 
     required to carry out subsection (c) and section 310(a). Such 
     investments shall be made only in interest-bearing accounts 
     to the credit of the National Endowment for the Humanities, 
     of which only 50 percent of the accumulated interest may be 
     used for the purposes of carrying out the activities of the 
     Endowment under title III.
       ``(C) Notwithstanding subparagraphs (A) and (B)(ii), any 
     money and other property donated, bequeathed, or devised 
     under subparagraph (A)(i) with a condition or restriction 
     shall be used, expended, or invested subject to such 
     condition or restriction.
       ``(c) Use of Donations, Bequests, and Devises for Certain 
     Administrative Expenses.--
       ``(1) In general.--The Chairperson of the National 
     Endowment for the Arts and the Chairperson of the National 
     Endowment for the Humanities shall each use from the amounts 
     received under subsection (b)--
       ``(A) not more than $100,000 for fiscal year 1998 for 
     official reception and representation expenses; and
       ``(B) not more than $50,000 for each subsequent fiscal year 
     for such expenses.
       ``(2) Exception.--The requirement of paragraph (1) shall 
     not apply to expenses associated with the award established 
     under section 310(a).
       ``(d) Tax Laws.--For the purposes of the income tax, gift 
     tax, and estate tax laws of the United States, any money or 
     other property donated, bequeathed, or devised to the 
     Foundation or one of the Endowments and received by the 
     Chairperson of an Endowment pursuant to this section shall be 
     deemed to have been donated, bequeathed, or devised to or for 
     the use of the United States.

     ``SEC. 106. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) National Endowment for the Arts.--
       ``(1) In general.--
       ``(A) Total authorization.--There are authorized to be 
     appropriated to carry out the activities of the National 
     Endowment for the Arts under this Act $175,000,000 for fiscal 
     year 1998, and such sums as are necessary for the fiscal 
     years 1999 through 2002.
       ``(B) Reservation for administration.--Of the amount 
     appropriated for a fiscal year under subparagraph (A), there 
     shall be reserved amounts sufficient to carry out subsection 
     (c)(1).
       ``(C) Special reservation for arts education and 
     underserved communities grants.--In a fiscal year in which 
     the aggregate amount appropriated under subparagraph (A) 
     exceeds $99,494,000, the amount that exceeds such aggregate 
     amount shall be reserved for making grants under section 
     202(f) to carry out activities described in subsection 
     (f)(2)(B) of such section.
       ``(D) Reservation for partnership grants.--40 percent of 
     the amount appropriated for a fiscal year under subparagraph 
     (A) and remaining after amounts are reserved under 
     subparagraphs (B) and (C) shall be reserved for making grants 
     under section 202(c).
       ``(E) Reservation for national significance grants.--40 
     percent of the amount appropriated for a fiscal year under 
     subparagraph (A) and remaining after amounts are reserved 
     under subparagraphs (B) and (C) shall be reserved for making 
     grants under section 202(d).
       ``(F) Reservation for direct grants.--10 percent of the 
     amount appropriated for a fiscal year under subparagraph (A) 
     and remaining after amounts are reserved under subparagraphs 
     (B) and (C) shall be reserved for making grants under section 
     202(e).
       ``(G) Reservation for arts education and underserved 
     communities grants.--10 percent of the amount appropriated 
     for a fiscal year under subparagraph (A) and remaining after 
     amounts are reserved under subparagraphs (B) and (C) shall be 
     reserved for making grants under section 202(f).
       ``(2) Sums remaining available.--Sums appropriated pursuant 
     to paragraph (1) for any fiscal year shall remain available 
     for obligation until expended.
       ``(b) National Endowment for the Humanities.--
       ``(1) In general.--
       ``(A) Total authorization.--There are authorized to be 
     appropriated to carry out the activities of the National 
     Endowment for the Humanities under this Act $175,000,000 for 
     fiscal year 1998, and such sums as are necessary for fiscal 
     years 1999 through 2002.
       ``(B) Reservation for administration.--There shall be 
     reserved amounts sufficient to carry out subsection (c)(2).
       ``(C) Reservation for partnership grants.--30 percent of 
     the amount appropriated for a fiscal year under subparagraph 
     (A) and remaining after amounts are reserved under 
     subparagraph (B) shall be reserved for making grants under 
     section 302(c). Of the amount reserved under this 
     subparagraph, 5 percent of such amount shall be made 
     available for activities relating to elementary and secondary 
     education in the humanities.
       ``(D) Reservation for national grants.--35 percent of the 
     amount appropriated for a fiscal year under subparagraph (A) 
     and remaining after amounts are reserved under subparagraph 
     (B) shall be reserved for making grants under section 302(d).
       ``(E) Reservation for research and scholarship grants.--35 
     percent of the amount appropriated for a fiscal year under 
     subparagraph (A) and remaining after amounts are reserved 
     under subparagraph (B) shall be reserved for making grants 
     under section 302(e).
       ``(2) Sums remaining available.--Sums appropriated pursuant 
     to paragraph (1) for any fiscal year shall remain available 
     for obligation until expended.
       ``(c) Administration.--
       ``(1) National endowment for the arts.--
       ``(A) Percentage based on funding under $150,000,000.--In a 
     case in which the amount appropriated for a fiscal year under 
     subsection (a)(1)(A) is less than $150,000,000, not more than 
     17 percent of the amount appropriated for a fiscal year under 
     subsection (a)(1)(A) may be made available for the costs of 
     administering title II, or any other program for which the 
     Chairperson of the National Endowment for the Arts is 
     responsible, of which not more than $100,000 shall be made 
     available for the President's Committee on the Arts and the 
     Humanities, none of which may be used to reimburse members of 
     the Committee for travel and related expenses.
       ``(B) Percentage based on funding over $150,000,000.--In a 
     case in which the amount appropriated for a fiscal year under 
     subsection (a)(1)(A) is $150,000,000 or greater, not more 
     than 12 percent of the amount appropriated for a fiscal year 
     under subsection (a)(1)(A) may be made available for the 
     costs of administering title II, or any other program for 
     which the Chairperson of the National Endowment for the Arts 
     is responsible, of which not more than $100,000 shall be made 
     available for the President's Committee on the Arts and the 
     Humanities, none of which may be used to reimburse members of 
     the Committee for travel and related expenses.
       ``(2) National endowment for the humanities.--
       ``(A) Percentage based on funding under $150,000,000.--In a 
     case in which the amount appropriated for a fiscal year under 
     subsection (b)(1)(A) is less than $150,000,000, not more than 
     17 percent of the amount appropriated for a fiscal year under 
     subsection (b)(1)(A) may be made available for the costs of 
     administering title III, or any other program for which the 
     Chairperson of the National Endowment for the Humanities is 
     responsible, of which not more than $100,000 shall be made 
     available for the President's Committee on the Arts and the 
     Humanities, none of which may be used to reimburse members of 
     the Committee for travel and related expenses.

[[Page S7492]]

       ``(B) Percentage based on funding over $150,000,000.--In a 
     case in which the amount appropriated for a fiscal year under 
     subsection (b)(1)(A) is $150,000,000 or greater, not more 
     than 12 percent of such amount may be made available for the 
     costs of administering title III, or any other program for 
     which the Chairperson of the National Endowment for the 
     Humanities is responsible, of which not more than $100,000 
     shall be made available for the President's Committee on the 
     Arts and the Humanities, none of which may be used to 
     reimburse members of the Committee for travel and related 
     expenses.
              ``TITLE II--NATIONAL ENDOWMENT FOR THE ARTS

     ``SEC. 201. DEFINITIONS.

       ``In this title:
       ``(1) Developing arts organization.--The term `developing 
     arts organization' means a local arts organization of high 
     artistic promise that--
       ``(A) serves as an important source of local arts 
     programming in a community; and
       ``(B) has the potential to broaden public access to the 
     arts in rural and urban underserved communities.
       ``(2) Final judgment.--The term `final judgment' means a 
     judgment that is either--
       ``(A) not reviewed by any other court that has authority to 
     review such judgment; or
       ``(B) is not reviewable by any other court.
       ``(3) Local arts agency.--The term `local arts agency' 
     means a community organization, or an agency of local 
     government, that primarily provides financial support, 
     services, or other programs for artists and arts 
     organizations, for the benefit of the community as a whole.
       ``(4) Obscene; determined to be obscene.--
       ``(A) Obscene.--The term `obscene' means, with respect to a 
     project, production, or workshop, that--
       ``(i) the average person, applying contemporary community 
     standards, would find that such project, production, or 
     workshop, when taken as a whole, appeals to the prurient 
     interest;
       ``(ii) such project, production, or workshop depicts or 
     describes sexual conduct in a patently offensive way; and
       ``(iii) such project, production, or workshop, when taken 
     as a whole, lacks serious literary, artistic, political or 
     scientific value.
       ``(B) Determined to be obscene.--The term `determined to be 
     obscene' means determined, in a final judgment of a court of 
     record and of competent jurisdiction in the United States, to 
     be obscene.
       ``(5) Production.--The term `production' means any activity 
     involving the execution or rendition of the arts and meeting 
     such standards as may be approved by the Chairperson of the 
     Endowment.
       ``(6) Project.--
       ``(A) In general.--The term `project' means a program 
     organized to carry out the objectives of this Act, including 
     a program to foster United States artistic creativity, to 
     commission a work of art, or to develop and enhance the 
     widest public access, knowledge, and understanding of the 
     arts, and includes, where appropriate, rental or purchase of 
     a facility, rental or purchase of land, and acquisition of 
     equipment.
       ``(B) Renovation or construction.--Such term also 
     includes--
       ``(i) the renovation of a facility if--

       ``(I) the amount of the expenditure of Federal funds for 
     such purpose in the case of any facility does not exceed 
     $250,000; and
       ``(II) two-thirds of the members of the National Council on 
     the Arts (who are present and voting) recommend a grant 
     involving an expenditure for such purpose; and

       ``(ii) with respect to a grant under section 202(d), the 
     construction of a facility, if--

       ``(I) such construction is for demonstration purposes or 
     under unusual circumstances in which there is no other manner 
     by which to accomplish an artistic purpose; and
       ``(II) two-thirds of the members of the National Council on 
     the Arts (who are present and voting) recommend a grant 
     involving an expenditure for such purpose.

       ``(7) Workshop.--The term `workshop' means a program the 
     primary purpose of which is to encourage the artistic 
     development or enjoyment of amateur, student, or other 
     participants.

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

       ``(a) Establishment.--There is established within the 
     Foundation a National Endowment for the Arts (referred to in 
     this title as the `Endowment').
       ``(b) Chairperson.--
       ``(1) Appointment.--The Endowment shall be headed by a 
     chairperson, to be known as the Chairperson of the Endowment 
     (referred to in this title as the `Chairperson'), who shall 
     be appointed by the President, by and with the advice and 
     consent of the Senate.
       ``(2) Term.--
       ``(A) In general.--The term of office of the Chairperson 
     shall be 4 years, except that any Chairperson appointed to 
     fill a vacancy shall serve for the remainder of the term for 
     which the predecessor of the Chairperson was appointed. 
     Notwithstanding any other provision of this subparagraph, on 
     the expiration of the term of office of the Chairperson, the 
     Chairperson shall serve until the successor to the 
     Chairperson is appointed and has qualified.
       ``(B) Reappointment.--The Chairperson shall be eligible for 
     reappointment.
       ``(c) Partnership Grants.--
       ``(1) Purpose.--The purpose of this subsection is to make 
     grants to States and regional groups to support arts 
     activities, with preference to arts education and projects 
     that reach rural and urban underserved communities.
       ``(2) Grants to states.--
       ``(A) Authority.--Using the funds reserved under section 
     106(a)(1)(D), the Chairperson, acting on the recommendation 
     of the National Council on the Arts, shall establish and 
     carry out a program of basic State grants to assist States--
       ``(i)(I) in supporting projects, productions, or workshops 
     that meet the standard of artistic excellence and artistic 
     merit and that fulfill the purposes of this Act; and
       ``(II) in developing projects, productions, or workshops 
     that will furnish programs, facilities, and services in the 
     arts to people and communities in each of the States; and
       ``(ii) in carrying out activities that--

       ``(I) stimulate artistic activity and awareness, and 
     broaden public access to the arts, in rural and urban 
     underserved communities;
       ``(II) enhance the artistic capabilities of developing arts 
     organizations through artistic, programmatic, and staff 
     development; or
       ``(III) provide technical assistance to developing arts 
     organizations to improve managerial and organizational 
     skills, financial systems management, and long-range fiscal 
     planning.

       ``(B) Application.--In order to receive a grant under this 
     paragraph for any fiscal year, a State shall submit an 
     application described in section 203 for such grant at such 
     time and in such manner as shall be specified by the 
     Chairperson and accompany such application with a State plan 
     that the Chairperson finds--
       ``(i) designates or provides for the establishment of a 
     State agency (referred to in this section as the `State 
     agency') as the sole agency for the administration of the 
     State plan;
       ``(ii) provides that funds paid to the State under this 
     paragraph will be expended solely on projects, productions, 
     or workshops described in subparagraph (A) and approved by 
     the State agency;
       ``(iii) provides that the State agency will make such 
     reports, in such manner and containing such information, as 
     the Chairperson may from time to time require, including a 
     description of the progress made toward achieving the 
     objectives of the State plan;
       ``(iv) provides--

       ``(I) an assurance that the State agency has held, after 
     reasonable notice, public meetings in the State to allow the 
     public, interested groups, and groups of artists to present 
     views and make recommendations regarding the State plan; and
       ``(II) a summary of such recommendations and the response 
     of the State agency to such recommendations; and

       ``(v) contains--

       ``(I) for the most recent preceding year for which 
     information is available, a description of the level of 
     participation by artists, artists' organizations, and arts 
     groups in projects, productions, or workshops supported by 
     funding from the State agency under this paragraph, and a 
     description of the extent to which projects, productions, or 
     workshops supported by funding from the State agency under 
     this paragraph were available to all people and communities 
     in the State, especially underserved communities; and
       ``(II) a description of projects, productions, or workshops 
     supported by funding from the State agency under this 
     paragraph that exist or are being developed to address the 
     availability of the arts to all people or communities 
     described in subclause (I) or to secure wider participation 
     of artists and arts organizations described in subclause (I).

       ``(C) Approval.--The Chairperson may not approve an 
     application described in subparagraph (B) unless the 
     accompanying State plan satisfies the requirements specified 
     in subparagraph (B).
       ``(D) Allotments.--
       ``(i) In general.--Of the sums available to carry out this 
     paragraph for any fiscal year, each State that has an 
     application approved by the Chairperson shall be allotted at 
     least $200,000.
       ``(ii) Insufficient funds.--If the sums available to carry 
     out this paragraph for any fiscal year are insufficient to 
     make the allotments under clause (i) in full, such sums shall 
     be allotted so that each such State receives an equal amount.
       ``(iii) Excess funds.--In any case in which the sums 
     available to carry out this paragraph for any fiscal year are 
     in excess of the amount required to make the allotments under 
     clause (i)--

       ``(I) the amount of such excess that is not greater than 25 
     percent of the sums available to carry out this paragraph for 
     such fiscal year shall be available to the Chairperson for 
     making grants under this paragraph to States and, in 
     accordance with subparagraph (H), regional groups; and
       ``(II) the amount of such excess for such fiscal year, if 
     any, that remains after reserving in full for the Chairperson 
     the amount required under subclause (I) shall be allotted so 
     that each State that has an application approved by the Chair 
     receives an equal amount;

     but in no event shall any State be allotted less than 
     $200,000 under this paragraph.
       ``(E) Federal share.--
       ``(i) In general.--Funding provided through a grant made 
     under this paragraph to a State for any fiscal year shall be 
     available to each State that has an application

[[Page S7493]]

     approved by the Chairperson, and has the State plan 
     accompanying the application in effect on the first day of 
     such fiscal year, to pay not more than 50 percent of the 
     total cost of carrying out any activity described in 
     subparagraph (A).
       ``(ii) Excess portion.--Except as provided in clause (iii), 
     the portion of the funding provided through any grant made 
     under subparagraph (D)(i) to a State for any fiscal year that 
     exceeds $125,000 shall be available, at the discretion of the 
     Chairperson, to pay not more than 100 percent of such cost of 
     carrying out an activity under this paragraph if such 
     activity would be unavailable to the residents of the State 
     without such portion.
       ``(iii) Percentage of grant funds.--The portion of the 
     funding described in clause (ii) for any fiscal year that is 
     available to pay not more than 100 percent of such cost, as 
     described in clause (ii), shall not exceed 20 percent of the 
     total funding provided through such grant for such fiscal 
     year.
       ``(F) Prohibition on supplanting non-federal funds.--Funds 
     made available under this paragraph shall be used to 
     supplement, and shall not supplant, non-Federal funds 
     expended for supporting activities described in subparagraph 
     (A).
       ``(G) Unobligated funds.--Any amount allotted to a State 
     under subparagraph (D)(i) for any fiscal year that is not 
     obligated by the State earlier than 60 days prior to the end 
     of the fiscal year for which the amount is appropriated shall 
     be available for making grants to regional groups.
       ``(H) Special rule.--The provisions of this paragraph 
     (other than subparagraph (D)) shall apply to regional groups 
     receiving grants under this paragraph in such manner, and to 
     such extent, as the Chairperson shall by regulation 
     prescribe.
       ``(I) Definition.--In subparagraph (D)(iii)(II) and 
     notwithstanding section 3(8), the term `State' includes, in 
     addition to the several States of the United States, only the 
     jurisdictions specified in such section that have a 
     population of 200,000 or more, according to the latest 
     decennial census.
       ``(d) National Significance Grants.--
       ``(1) Purpose.--The purpose of this subsection is to make 
     grants to groups of demonstrated and substantial artistic and 
     cultural importance, for projects, productions, and workshops 
     that will increase the access of all the people of the United 
     States, especially underserved communities, to the best of 
     the arts and culture of the United States.
       ``(2) In general.--Using funds reserved under section 
     106(a)(1)(E), the Chairperson, acting on the recommendation 
     of the National Council on the Arts, may establish and carry 
     out a program of grants to groups who meet the standard of 
     artistic excellence and artistic merit and who are engaged in 
     or concerned with the arts, for the purpose of paying for the 
     Federal share of the cost of--
       ``(A) enabling the groups to provide or support projects, 
     productions, or workshops described in paragraph (3) that 
     will have a national, regional, or otherwise substantial 
     artistic or cultural impact;
       ``(B) providing administrative and management improvements 
     for the groups, particularly in the field of long-range 
     financial planning, including increasing levels of community 
     support and the range of contributors to the programs of such 
     groups; or
       ``(C) enabling the groups to provide or support projects, 
     productions, or workshops that will serve as models for arts 
     education.
       ``(3) Projects, productions, and workshops.--
       ``(A) Required elements.--Each such project, production, or 
     workshop shall--
       ``(i) have substantial national or regional cultural 
     significance, and encourage professional excellence; or
       ``(ii)(I) have significant merit; and
       ``(II) be a project, production, or workshop that, if such 
     a group did not receive a grant, might otherwise be 
     unavailable to citizens for geographic or economic reasons.
       ``(B) Permissible elements.--Each such project, production, 
     or workshop may--
       ``(i) encourage access to, education in, and knowledge, 
     understanding, enjoyment, and appreciation of, the arts by 
     the public;
       ``(ii) enhance managerial and organizational skills and 
     capabilities;
       ``(iii) use technology to broaden public access to the 
     arts;
       ``(iv) expand access to the arts for individuals with 
     disabilities; or
       ``(v) promote access to the arts for minority or 
     underserved populations.
       ``(4) Federal share requirement.--
       ``(A) In general.--Except as provided in subparagraphs (B) 
     and (C), in the case of any grant made under this subsection, 
     the Federal share described in paragraph (2) shall be 25 
     percent.
       ``(B) Certain groups.--In the case of any grant made under 
     this subsection to a group with an annual budget in excess of 
     $3,000,000, the Federal share described in paragraph (2) 
     shall be 16.67 percent.
       ``(C) Adjustments.--The Chairperson may increase the 
     Federal share applicable under this subsection for a 
     designated grant recipient, with review and approval by the 
     National Council on the Arts. The Chairperson shall not 
     increase the Federal share above 50 percent for the 
     recipient. Not more than 10 percent of the funds made 
     available by the Endowment for grants under this subsection 
     for any fiscal year may be available for grants for the 
     fiscal year for which the Chairperson increases the 
     applicable Federal share.
       ``(5) Priority.--In awarding grants under this subsection, 
     the Chairperson shall give priority to projects, productions, 
     and workshops that increase the access of the public of the 
     United States, especially underserved communities, to culture 
     and the arts, including access by touring, by regional or 
     national dissemination, or by geographic dispersion.
       ``(e) Direct Grants.--
       ``(1) Purpose.--The purpose of this subsection is to make 
     grants to groups, and individuals, that are broadly 
     representative of the cultural heritage of the United States 
     and broadly geographically representative, for projects, 
     productions, and workshops of the highest artistic excellence 
     and artistic merit.
       ``(2) In general.--Using funds reserved under section 
     106(a)(1)(F), the Chairperson, acting on the recommendation 
     of the National Council on the Arts, may establish and carry 
     out a program of grants to groups, or individuals who are 
     engaged in or concerned with the arts, to pay for the Federal 
     share of the cost of projects, productions, or workshops that 
     meet the standard of artistic excellence and artistic merit 
     and that fulfill the purposes of this Act.
       ``(3) Federal share requirement.--The Federal share 
     described in paragraph (2) shall be 50 percent.
       ``(4) Priority.--In awarding grants under this subsection, 
     the Chairperson shall give priority to projects, productions, 
     and workshops that will be disseminated widely after 
     completion.
       ``(5) Adjustments.--The Chairperson may increase the 
     Federal share applicable under this subsection for a 
     designated grant recipient, with review and approval by the 
     National Council on the Arts. Not more than 20 percent of the 
     funds made available by the Endowment for grants under this 
     subsection for any fiscal year may be available for grants 
     for the fiscal year for which the Chairperson increases the 
     applicable Federal share.
       ``(6) Special rule for grants to individuals.--The 
     Chairperson shall only award a grant in accordance with this 
     subsection to an individual described in paragraph (2) if 
     such grant is awarded to such individual for a literature 
     fellowship, a National Heritage Fellowship, or a Jazz Masters 
     Fellowship.
       ``(f) Arts Education and Underserved Communities Grants.--
       ``(1) Purpose.--The purpose of this subsection is to make 
     grants to State arts agencies and other groups to carry out 
     activities in arts education and to carry out arts-related 
     activities in underserved communities.
       ``(2) In general.--Using the funds reserved under section 
     subparagraphs (C) (as may be appropriate) and (G) of section 
     106(a)(1), the Chairperson, acting on the recommendation of 
     the National Council on the Arts, may establish and carry out 
     a program of grants to State arts agencies or other groups to 
     pay for the Federal share of the cost of carrying out 
     activities that--
       ``(A) promote and improve the availability of arts 
     instruction, and improve the quality of arts education, 
     through support of lifelong learning in the arts;
       ``(B) provide--
       ``(i) instruction in the arts by integrating and 
     incorporating the arts in the teaching of English, math, 
     science, foreign languages, civics and government, economics, 
     history, and geography; or
       ``(ii) courses in the arts through school programs;
       ``(C) enhance the quality of arts instruction in programs 
     of teacher education;
       ``(D) develop arts faculty resources and talents;
       ``(E) support and encourage the development of improved 
     curriculum materials in the arts;
       ``(F) support apprenticeships, internships, and other 
     career oriented work-study experiences for artists and arts 
     teachers, and encourage residencies of artists at all 
     educational levels;
       ``(G) stimulate artistic activity and awareness, and 
     broaden public access to the arts, in underserved 
     communities;
       ``(H) enhance the artistic capabilities of developing arts 
     organizations in underserved communities through artistic, 
     programmatic, and staff development; or
       ``(I) provide technical assistance to developing arts 
     organizations in underserved communities to improve 
     managerial and organizational skills, financial systems 
     management, and long-range fiscal planning.
       ``(3) Federal share.--The Federal share described in 
     paragraph (2) shall be 50 percent.
       ``(4) Evaluation and reports for certain activities.--
       ``(A) In general.--Each State arts agency or other group 
     that receives a grant under this subsection to carry out the 
     activity described in paragraph (2)(B) shall conduct an 
     ongoing evaluation of the activity.
       ``(B) Evaluation components.--In conducting the evaluation 
     under subparagraph (A), a State arts agency or other group 
     shall, in the case of students who participate in an activity 
     described in paragraph (2)(B), monitor the progress of the 
     student participants throughout the period of participation.
       ``(C) Report to chairperson.--Not later than 60 days after 
     the date of the completion of an activity by a State arts 
     agency or other group under subparagraph (A), the State arts 
     agency or other group shall prepare and submit to the 
     Chairperson a report on the evaluation conducted under 
     subparagraph (A).

[[Page S7494]]

       ``(D) Report to congress.--Not later than 60 days after the 
     date of the submission of the report under subparagraph (C), 
     the Chairperson shall prepare and submit to Congress a report 
     on--
       ``(i) the activities funded under paragraph (2)(B); and
       ``(ii) the evaluations conducted by recipients under 
     subparagraph (A).

     ``SEC. 203. APPLICATION PROCEDURES.

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

     ``SEC. 204. ADVISORY PANELS.

       ``(a) In General.--The Chairperson shall utilize review by 
     advisory panels--
       ``(1) as the first step in the review of applications 
     submitted under this Act; and
       ``(2) to make recommendations to the National Council on 
     the Arts in all cases involving requests for grants 
     authorized under this title, except cases in which the 
     Chairperson exercises authority delegated under section 
     205(f)(2).
       ``(b) Procedures.--
       ``(1) Criteria.--In reviewing the applications, such panels 
     shall recommend applications for projects, productions, and 
     workshops on the basis of artistic excellence and artistic 
     merit, consistent with section 203(b)(1)(A)(i).
       ``(2) Amounts.--The panels may recommend only general 
     ranges of funding to be provided through the grants and may 
     not recommend specific amounts of such funding.
       ``(3) Regulations and procedures.--The Chairperson shall 
     issue regulations and establish procedures to--
       ``(A) ensure that all the panels are composed, to the 
     extent practicable, of individuals providing a wide 
     geographic, ethnic, and minority representation as well as 
     individuals reflecting diverse artistic and cultural points 
     of view;
       ``(B) ensure that all the panels include at least 2 members 
     representing lay individuals who are--
       ``(i) knowledgeable about the arts;
       ``(ii) not engaged in the arts as a profession; and
       ``(iii) not employees of either artists' organizations or 
     arts organizations;
       ``(C) ensure that, when feasible, the procedures used by 
     the panels to carry out their responsibilities are 
     standardized;
       ``(D) require each such panel--
       ``(i) to create written records summarizing--

       ``(I) all meetings and discussions of such panel; and
       ``(II) the recommendations made by such panel to the 
     Council; and

       ``(ii) to make such records available to the public in a 
     manner that protects the privacy of individual applicants and 
     panel members;
       ``(E) permit, when necessary and feasible, a site visit to 
     view the work of an applicant and deliver a written report on 
     the work being reviewed, in order to assist panelists in 
     making their recommendations;
       ``(F)(i) require that the membership of each such panel 
     change substantially from year to year; and
       ``(ii) provide that no individual be eligible to serve on 
     such a panel for more than 5 years, no 2 of which may be 
     consecutive; and
       ``(G) ensure that the panels recommend more applicants for 
     grants than are anticipated can be provided funding through 
     the grants with available funds.
       ``(4) Prohibition on conflicts of interest.--
       ``(A) In general.--In making appointments to the panels, 
     the Chairperson shall ensure that an individual who has a 
     pending application for a grant authorized under this title, 
     who is an employee or agent of an organization with such a 
     pending application, or who has a direct or indirect 
     financial interest in any application under consideration by 
     such a panel, does not serve as a member of any panel before 
     which such application is pending.
       ``(B) Duration.--The prohibition described in subparagraph 
     (A) shall commence with respect to such individual beginning 
     on the date such application is submitted, and shall continue 
     until a final decision on the application has been reached by 
     the Chairperson.

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

       ``(a) Establishment.--There is established within the 
     Endowment a National Council on the Arts (referred to in this 
     section as the `Council').
       ``(b) Composition.--
       ``(1) In general.--The Council shall be composed of the 
     Chairperson of the Endowment, who shall be the Chairperson of 
     the Council, and 20 other members appointed by the President, 
     by and with the advice and consent of the Senate, who shall 
     be selected--
       ``(A) from among private citizens of the United States 
     who--
       ``(i) are widely recognized for their broad knowledge of, 
     or expertise in, the arts; and
       ``(ii) have established records of distinguished service, 
     or achieved eminence, in the arts;
       ``(B) so as to include practicing artists, members of 
     cultural professions, educators, civic cultural leaders, and 
     others who are professionally engaged in the arts; and
       ``(C) so as collectively to provide an appropriate 
     distribution of members among the major art fields.
       ``(2) Qualifications.--The President may, in making such 
     appointments, give consideration to such recommendations as 
     may, from time to time, be submitted to the President by 
     leading national organizations in the major art fields. In 
     making such appointments, the President shall give due regard 
     to equitable representation of women, racially and ethnically 
     diverse individuals, and individuals with disabilities, who 
     are involved in the arts. Members of the Council shall be 
     appointed so as to represent equitably geographical areas in 
     the United States, including rural and urban underserved 
     communities.
       ``(c) Terms.--
       ``(1) In general.--
       ``(A) Staggered terms.--Each member of the Council shall 
     serve for a term of 6 years, and the terms shall be 
     staggered.
       ``(B) Expiration.--Except as provided in paragraph (2), the 
     terms of all Council members shall expire on the third day of 
     September in the year of expiration.
       ``(C) Reappointment after partial term.--Each member who 
     has served on the Council for 1 term of less than 3 years 
     shall be eligible for reappointment for 1 term of 6 years.
       ``(D) Vacancy appointments.--Any member appointed to fill a 
     vacancy shall serve for the remainder of the term for which 
     the predecessor of the member was appointed.
       ``(E) Holdover service.--Notwithstanding any other 
     provision of this subsection, a member of the Council shall 
     serve after the expiration of the term of the member until 
     the successor to the member takes office.
       ``(2) Adjustment to reduce council.--
       ``(A) Members whose terms expired in 1996 but continue to 
     serve.--
       ``(i) In general.--The terms of 10 members of the Council 
     whose terms expired on September 3, 1996 and who continue to 
     serve because a successor has not been appointed shall be 
     deemed to expire on the date of enactment of the Arts and 
     Humanities Amendments of 1997.
       ``(ii) Successors.--The President shall appoint 7 members 
     of the Council to succeed members whose terms are deemed to 
     expire as described in clause (i). The terms of the 
     successors shall expire on September 3, 2002.
       ``(B) Members whose terms expire in 1998.--The President 
     shall appoint 6 members of the Council to succeed the 8 
     members of the Council whose terms expire on September 3, 
     1998. The terms of the successors shall expire on September 
     3, 2004.
       ``(C) Members whose terms expire in 2000.--The President 
     shall appoint 7 members of the Council to succeed the 8 
     members of the Council whose terms expire on September 3, 
     2000. The terms of the successors shall expire on September 
     3, 2006.
       ``(d) Compensation.--Members of the Council shall receive 
     compensation at a rate to be fixed by the Chairperson but not 
     to exceed the daily equivalent of the maximum rate authorized 
     for a position above grade GS-15 of the General Schedule 
     under section 5108 of title 5, United States Code, and be 
     allowed travel expenses including per diem in lieu of 
     subsistence, in the same amounts and to the same extent, as 
     authorized under section 5703 of title 5, United States Code, 
     for persons employed intermittently in Federal Government 
     service.
       ``(e) Meetings and Duties.--
       ``(1) Meetings.--The Council shall meet at the call of the 
     Chairperson but not less often than twice during each 
     calendar year. Eleven members of the Council shall constitute 
     a quorum. All policy meetings of the Council shall be open to 
     the public.

[[Page S7495]]

       ``(2) Duties.--The Council shall--
       ``(A) advise the Chairperson with respect to policies, 
     programs, and procedures for carrying out the functions of 
     the Chairperson under this title;
       ``(B) review applications for grants authorized under this 
     title and make recommendations to the Chairperson with 
     respect to--
       ``(i) whether to approve particular applications for grants 
     authorized under this title that have been determined by 
     advisory panels to have artistic excellence and artistic 
     merit; and
       ``(ii) the amount of funding that the Chairperson should 
     provide through such a grant with respect to each such 
     application the Council recommends for approval;
       ``(C) use as criteria for the recommendations of the 
     Council--
       ``(i) the extent to which the works described in the 
     applications fulfill the purposes of this Act and the 
     requirements under the provisions of this Act;
       ``(ii) the artistic excellence and artistic merit of the 
     works described in the applications; and
       ``(iii) the extent to which the applicant serves an 
     underserved community,

     as determined by each Council member;
       ``(D) recommend more applications for funding through 
     grants than are anticipated can be provided funding through 
     the grants with available funds;
       ``(E) create written records summarizing--
       ``(i) all meetings and discussions of the Council; and
       ``(ii) recommendations made by the Council to the 
     Chairperson; and
       ``(F) make such records available to the public in a manner 
     that protects the privacy of individual applicants for grants 
     authorized under this title, advisory panel members, and 
     Council members.
       ``(f) Actions by Chairperson.--
       ``(1) In general.--The Chairperson shall not approve or 
     disapprove any application for a grant authorized under this 
     title until the Chairperson has received the recommendation 
     of the Council on such application. The Chairperson shall 
     have final authority to approve each such application, and 
     shall determine the final amount of funding through any grant 
     awarded. The Chairperson may not approve an application with 
     respect to which the Council makes a negative recommendation.
       ``(2) Delegations.--In the case of an application, or 
     amendment of an application, submitted under this title and 
     involving $35,000 or less, or a request for change in a grant 
     amount of 20 percent or less, the Chairperson may approve or 
     disapprove such application, amendment, or request, if such 
     action is taken pursuant to the terms of an express and 
     direct delegation of authority from the Council to the 
     Chairperson, and if each such action by the Chairperson is 
     reported to the Council at the next regularly scheduled 
     meeting of the Council. Such action by the Chairperson shall 
     be used with discretion and shall not become a normal 
     practice of providing funding through a grant authorized 
     under this title. The terms of any such delegation of 
     authority shall not permit obligations for expenditure of 
     funds under such delegation for any fiscal year that exceed 
     an amount equal to 2 percent of the sums appropriated for the 
     fiscal year pursuant to section 106(a)(1)(A).

     ``SEC. 206. LIMITATIONS ON GRANTS.

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

     ``SEC. 207. ADMINISTRATIVE PROVISIONS.

       ``(a) Authorities of Chairperson.--In addition to any 
     authorities vested in the Chairperson by other provisions of 
     this Act, the Chairperson, in carrying out the functions of 
     the Chairperson, shall have authority--
       ``(1) to prescribe such regulations and procedures as the 
     Chairperson determines to be necessary, governing the manner 
     in which the functions of the Chairperson shall be carried 
     out;
       ``(2) to appoint and determine the compensation of such 
     employees, subject to title 5, United States Code, as may be 
     necessary to carry out the functions of the Chairperson, to 
     define the duties of such employees, and to supervise and 
     direct the activities of such employees;
       ``(3) to procure the temporary and intermittent services of 
     experts and consultants, including panels of experts, and 
     compensate the experts and consultants in accordance with 
     section 3109 of title 5, United States Code;
       ``(4) to accept and utilize the voluntary services of 
     individuals and reimburse the individuals for travel 
     expenses, including per diem in lieu of subsistence, in the 
     same amounts and to the same extent as authorized under 
     section 5703 of title 5, United States Code, for persons 
     employed intermittently in Federal Government service;
       ``(5) to make advance, progress, and other payments without 
     regard to section 3324 of title 31, United States Code;
       ``(6) to rent office space in the District of Columbia; and
       ``(7) to make other necessary expenditures.
       ``(b) Publications.--Official publications of the Endowment 
     under this title may be supported without regard to the 
     provisions of section 501 of title 44, United States Code, if 
     the Chairperson consults with the Joint Committee on Printing 
     of the Congress.
       ``(c) Coordination.--The Chairperson shall coordinate the 
     programs of the Endowment, insofar as practicable, with other 
     Federal programs and programs undertaken by other public 
     agencies or private groups, and shall develop the programs of 
     the Endowment with due regard to the contribution to the 
     objectives of this title that can be made by other Federal 
     agencies under the existing programs. The Chairperson may 
     enter into interagency agreements to promote or assist with 
     the arts-related activities of other Federal agencies, on a 
     reimbursable or nonreimbursable basis, and may use funds 
     authorized to be appropriated to carry out this title to pay 
     for the costs of such promotion or assistance.

     ``SEC. 208. REPORTS.

       ``(a) Annual Report of Chairperson.--The Chairperson shall 
     submit an annual report to

[[Page S7496]]

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

     ``SEC. 209. SANCTIONS AND PAYMENTS.

       ``(a) Failure To Satisfy Purposes.--If any recipient of a 
     grant made under this title, or an indirect recipient of 
     funding provided through the grant, substantially fails to 
     satisfy the purposes for which such grant is made, as 
     determined by the Chairperson, the Chairperson may--
       ``(1) for purposes of determining whether to make any 
     subsequent funding to the direct or indirect recipient under 
     this title, take into consideration the results of the post-
     award evaluation conducted under section 208(c);
       ``(2) prohibit the direct and indirect recipients from 
     using the name of, or in any way associating the project, 
     production, or workshop for which the grant was received 
     with, the Endowment; and
       ``(3) if such project, production, or workshop is 
     published, require that the publication contain the following 
     statement: `The opinions, findings, conclusions, and 
     recommendations expressed in this publication do not reflect 
     the views of the National Endowment for the Arts.'.
       ``(b) Noncompliance.--
       ``(1) In general.--The Chairperson shall take the actions 
     described in paragraph (2) whenever the Chairperson, after 
     providing reasonable notice and an opportunity for hearing, 
     finds that--
       ``(A) a direct recipient of a grant under this title, or an 
     indirect recipient of funding provided through the grant, is 
     not complying substantially with the provisions of this 
     title;
       ``(B) a State agency or regional group that received a 
     grant under this title, or an indirect recipient of funding 
     provided through the grant, is not complying substantially 
     with the terms and conditions of the State plan accompanying 
     the application approved for the grant under this title; or
       ``(C) any funding provided under this title to a recipient, 
     State agency, or regional group described in subparagraph (A) 
     or (B) has been diverted from the purposes for which such 
     funding was provided.
       ``(2) Actions.--On making the finding described in 
     paragraph (1), the Chairperson shall immediately notify the 
     direct recipient, State agency, or regional group that 
     received the funding at issue that--
       ``(A) no further funding will be provided under this title 
     to such recipient, agency, or group until there is no longer 
     any default or failure to comply or the diversion is 
     corrected; or
       ``(B) if compliance or correction is impossible, until such 
     recipient, agency, or group repays or arranges the repayment 
     of the Federal funds that were improperly diverted or 
     expended.
       ``(c) Obscene Works.--
       ``(1) Determination.--If, after providing reasonable notice 
     and opportunity for a hearing on the record, the Chairperson 
     determines that a direct recipient of a grant under this 
     title, or an indirect recipient of funding provided through 
     the grant, used the funding for a project, production, or 
     workshop that is determined to be obscene, the Chairperson 
     shall require that until the direct recipient repays such 
     funding (in such amount, and under such terms and conditions, 
     as the Chairperson determines to be appropriate) to the 
     Endowment, no subsequent funding shall be provided under this 
     title to such recipient.
       ``(2) Crediting.--Funds repaid under this subsection to the 
     Endowment shall be deposited in the Treasury of the United 
     States and credited as miscellaneous receipts.
       ``(3) Application.--
       ``(A) Timing.--This subsection shall not apply with respect 
     to grants made before October 1, 1990.
       ``(B) Duration.--This subsection shall not apply with 
     respect to a project, production, or workshop after the 
     expiration of the 7-year period beginning on the latest date 
     on which a grant is made under this title for such project, 
     production, or workshop.
       ``(d) Recapture.--
       ``(1) In general.--A recipient of funding under this title 
     shall pay the amount described in paragraph (2) to the 
     Endowment if the Chairperson finds that the recipient has 
     derived net program income in excess of the match required 
     under the terms of the agreement from a commercially 
     successful project, production, or workshop funded that 
     exceeds the lesser of--
       ``(A) $50,000; or
       ``(B) twice the amount of the funding.
       ``(2) Amount.--At the discretion of the Chairperson, the 
     amount referred to in paragraph (1) is not less than \1/3\ 
     and not more than \1/2\ of the amount of the net program 
     income generated within 5 years after the end of the grant 
     period, but not more than the amount of the funding, unless 
     the Chairperson has reached an agreement with the grantee 
     upon the award of a grant that the amount referred to in 
     paragraph (1) shall exceed the amount of the grant.
       ``(e) Account.--Except as otherwise provided in this Act, 
     the Treasurer of the United States shall deposit funds paid 
     under subsection (d), or repaid under this Act, in a special 
     interest bearing account to the credit of the Endowment.

     ``SEC. 210. NATIONAL MEDAL OF ARTS AWARDS.

       ``(a) National Medal of Arts Awards.--
       ``(1) Establishment.--There is established a National Medal 
     of Arts, which shall be a medal of such design as is 
     determined to be appropriate by the President, on the basis 
     of recommendations submitted by the National Council on the 
     Arts, and which shall be awarded as provided in this 
     subsection.
       ``(2) Awards.--The President shall from time to time award 
     the National Medal of Arts, on the basis of recommendations 
     from the National Council on the Arts, to individuals or 
     groups who in the judgment of the President are deserving of 
     special recognition by reason of their outstanding 
     contributions to the excellence, growth, support, and 
     availability of the arts in the United States.
       ``(3) Number of medals.--Not more than 12 of such medals 
     may be awarded in any calendar year.
       ``(4) Qualifications.--An individual may be awarded the 
     National Medal of Arts if at the time such award is made such 
     individual meets the requirements of section 206(g).
       ``(5) Groups.--A group may be awarded the National Medal of 
     Arts if such group is organized or incorporated in the United 
     States.
       ``(6) Ceremonies.--The presentation of the National Medal 
     of Arts shall be made by the President with such ceremonies 
     as the President may determine to be appropriate, including 
     attendance by appropriate Members of Congress.
       ``(b) Funds.--The Chairperson shall use amounts received by 
     the National Endowment for the Arts under section 
     105(b)(1)(A) to carry out this section.
           ``TITLE III--NATIONAL ENDOWMENT FOR THE HUMANITIES

     ``SEC. 301. DEFINITIONS.

       ``In this title:
       ``(1) Project.--
       ``(A) In general.--The term `project' means an activity 
     organized to carry out the objectives of this title.
       ``(B) Renovation or construction.--Such term also 
     includes--
       ``(i) the renovation of a facility if--

[[Page S7497]]

       ``(I) the amount of the expenditure of Federal funds for 
     such purpose in the case of any facility does not exceed 
     $250,000; and
       ``(II) two-thirds of the members of the National Council on 
     the Humanities (who are present and voting) recommend a grant 
     involving an expenditure for such purpose; and

       ``(ii) for purposes of subsections (d) and (e) of section 
     302, the construction of a facility if--

       ``(I) such construction is for demonstration purposes or 
     under unusual circumstances in which there is no other manner 
     by which to accomplish a humanistic purpose; and
       ``(II) two-thirds of the members of the National Council on 
     the Humanities (who are present and voting) recommend a grant 
     involving an expenditure for such purpose.

       ``(2) Workshop.--The term `workshop' means an activity the 
     primary purpose of which is to promote scholarship and 
     teaching among the participants.

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

       ``(a) Establishment.--There is established within the 
     Foundation a National Endowment for the Humanities (referred 
     to in this title as the `Endowment').
       ``(b) Chairperson.--
       ``(1) Appointment.--The Endowment shall be headed by a 
     chairperson, to be known as the Chairperson of the Endowment 
     (referred to in this title as the `Chairperson'), who shall 
     be appointed by the President, by and with the advice and 
     consent of the Senate.
       ``(2) Term.--
       ``(A) In general.--The term of office of the Chairperson 
     shall be 4 years, except that any Chairperson appointed to 
     fill a vacancy shall serve for the remainder of the term for 
     which the predecessor of the Chairperson was appointed. 
     Notwithstanding any other provision of this subparagraph, on 
     the expiration of the term of office of the Chairperson, the 
     Chairperson shall serve until the successor to the 
     Chairperson is appointed and has qualified.
       ``(B) Reappointment.--The Chairperson shall be eligible for 
     reappointment.
       ``(c) Partnership Grants.--
       ``(1) Purpose.--The purpose of this subsection is to 
     support programs of humanities councils at the State and 
     local levels.
       ``(2) Definition.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     in this subsection, the term `State entity' means--
       ``(i) a State that obtains approval of an application 
     submitted under paragraph (4); or
       ``(ii) in a case in which a State fails to submit an 
     application under paragraph (4), an appropriate entity that 
     obtains approval of an application submitted under paragraph 
     (5).
       ``(B) Jurisdiction.--
       ``(i) State entity.--In paragraph (6)(C)(ii), the term 
     `State entity' means a State entity, as defined in 
     subparagraph (A), for a State.
       ``(ii) State.--In clause (i), and notwithstanding section 
     3(8), the term `State', includes, in addition to the several 
     States of the United States, only the jurisdictions specified 
     in such section that have a population of 200,000 or more, 
     according to the latest decennial census.
       ``(3) General authority.--Using funds reserved under 
     section 106(b)(1)(C), the Chairperson, acting on the 
     recommendation of the National Council on the Humanities, is 
     authorized, in accordance with the provisions of this 
     subsection, to establish and carry out a program of grants to 
     assist State entities--
       ``(A) in paying for not more than 50 percent of the cost 
     (except as otherwise provided in this subsection) of 
     supporting activities that achieve the objectives described 
     in subparagraphs (A) through (F) of subsection (d)(2) and in 
     subparagraphs (A) and (B) of subsection (e)(2); or
       ``(B) in matching contributions from non-Federal sources 
     made to a trust fund the purpose of which is to provide long-
     term financial support for such activities.
       ``(4) Grants through state agencies.--
       ``(A) Designation.--In order to receive a grant under this 
     subsection for any fiscal year, if a State desires to 
     designate or to provide for the establishment of a State 
     agency (referred to in this section as a `State agency') as 
     the sole agency for the administration of the State plan 
     referred to in subparagraph (B) relating to the grant, such 
     State shall designate as the State agency the humanities 
     council or shall provide for the establishment of such a 
     council.
       ``(B) Application and state plan.--In any State that 
     designates or provides for the establishment of a State 
     agency as described in subparagraph (A), the chief executive 
     officer of the State shall submit, before the beginning of 
     each fiscal year, an application for a grant and accompany 
     such application with a State plan that the Chairperson 
     finds--
       ``(i) designates or provides for the establishment of a 
     State agency;
       ``(ii) provides that the chief executive officer of the 
     State will appoint new members to the State humanities 
     council designated or established under subparagraph (A), as 
     vacancies occur as a result of the expiration of the terms of 
     members of such council, until the chief executive officer 
     has appointed all of the members of such council;
       ``(iii) provides for the expenditure, from State funds, of 
     an amount equal to 50 percent of the portion of the funding 
     received by such State through a grant made under paragraph 
     (6)(A) (relating to the minimum State allotment), or 25 
     percent of the total amount of funding received by such State 
     through grants made under this subsection, whichever is 
     greater, for the fiscal year involved (except as otherwise 
     provided in paragraph (7));
       ``(iv) provides that funds paid to the State under this 
     subsection will be expended solely on activities, approved by 
     the State agency, that--

       ``(I) achieve the objectives described in subparagraphs (A) 
     through (F) of subsection (d)(2) and subparagraphs (A) and 
     (B) of subsection (e)(2); and
       ``(II) are designed to bring the humanities to the public;

       ``(v) provides assurances that State funds will be made 
     available for the purpose of meeting the requirements of this 
     subparagraph;
       ``(vi) provides that the State agency will make such 
     reports, in such manner and containing such information, as 
     the Chairperson may from time to time require, including a 
     description of the progress made toward achieving the 
     objectives of the State plan;
       ``(vii) provides--

       ``(I) an assurance that the State agency has held, after 
     reasonable notice, public meetings in the State to allow the 
     public, interested organizations, and scholars to present 
     views and make recommendations regarding the State plan; and
       ``(II) a summary of such recommendations and of the 
     response of the State agency to such recommendations; and

       ``(viii) contains--

       ``(I) for the most recent preceding year for which 
     information is available, a description of the extent to 
     which the activities supported by funding from the State 
     agency under this subsection were available to all people and 
     communities in the State and a description of the level of 
     participation by scholars and scholarly organizations in 
     activities supported by funding from the State agency under 
     this subsection; and
       ``(II) a description of activities supported by funding 
     from the State agency under this subsection that exist or are 
     being developed to address the availability of the humanities 
     to all people or communities described in subclause (I) or to 
     secure wider participation of scholars and scholarly 
     organizations described in subclause (I).

       ``(C) Approval.--The Chairperson may not approve an 
     application described in subparagraph (B) unless the 
     accompanying State plan satisfies the requirements specified 
     in subparagraph (B).
       ``(5) Grants to appropriate entities.--
       ``(A) Designation.--In any State in which the chief 
     executive officer of the State fails to submit an application 
     under paragraph (4)(B) for a fiscal year, the Chairperson may 
     make grants under paragraph (3) to an appropriate entity in 
     the State, and each such entity shall establish a procedure 
     that ensures that 8 members of the governing body of such 
     entity shall be appointed by an appropriate officer or agency 
     of such State, except that in no event may the number of such 
     members exceed \1/3\ of the total membership of such 
     governing body. The officer or agency shall select the 
     members from among individuals who have knowledge of or 
     experience in the humanities.
       ``(B) Application and plan.--If a State fails to submit an 
     application under paragraph (4)(B) for a fiscal year, any 
     appropriate entity in the State desiring to receive a grant 
     under this subsection for the fiscal year shall submit an 
     application for such grant at such time and in such manner as 
     shall be specified by the Chairperson, and accompany such 
     application with a State plan that the Chairperson finds--
       ``(i) provides assurances that such entity will comply with 
     the requirements of subparagraph (A);
       ``(ii) provides that funds paid to such entity under this 
     paragraph will be expended solely on activities that--

       ``(I) achieve the objectives described in subparagraphs (A) 
     through (F) of subsection (d)(2) and subparagraphs (A) and 
     (B) of subsection (e)(2); and
       ``(II) are designed to bring the humanities to the public;

       ``(iii) establishes a membership policy that is designed to 
     ensure broad public representation with respect to activities 
     administered by such entity;
       ``(iv) provides for a nomination process that ensures 
     opportunities for nomination to membership in the governing 
     body from various groups in such State and from a variety of 
     segments of the population of such State, including 
     individuals who by reason of their achievement, scholarship, 
     or creativity in the humanities, are especially qualified to 
     serve as members of the body;
       ``(v) provides for a membership rotation process that 
     ensures the regular rotation of the membership and officers 
     of such entity;
       ``(vi) establishes reporting procedures that are designed 
     to inform the chief executive officer of such State, and 
     other appropriate officers and agencies, of the activities of 
     such entity;
       ``(vii) establishes procedures to ensure public access to 
     information relating to such activities;
       ``(viii) provides that such entity will make such reports, 
     at such times, in such manner, and containing such 
     information, as the Chairperson may require, including a 
     description of the progress made toward achieving the 
     objectives of the State plan;
       ``(ix) provides--

       ``(I) an assurance that the entity has held, after 
     reasonable notice, public meetings in

[[Page S7498]]

     the State to allow the public, interested organizations, and 
     scholars to present views and make recommendations regarding 
     the State plan; and
       ``(II) a summary of such recommendations and of the 
     response of the entity to such recommendations; and

       ``(x) contains--

       ``(I) for the most recent preceding year for which 
     information is available, a description of the extent to 
     which activities supported by funding from the entity under 
     this subsection were available to all people and communities 
     in the State and a description of the level of participation 
     by scholars and scholarly organizations in activities 
     supported by funding from the entity under this subsection; 
     and
       ``(II) a description of activities supported by funding 
     from the entity under this subsection that exist or are being 
     developed to address the availability of the humanities to 
     all people or communities described in subclause (I) or to 
     secure wider participation of scholars and scholarly 
     organizations described in subclause (I).

       ``(C) Approval.--The Chairperson may not approve an 
     application described in subparagraph (B) unless the 
     accompanying plan satisfies the requirements specified in 
     subparagraph (B).
       ``(6) Allotments.--
       ``(A) In general.--Of the sums available to carry out this 
     subsection for any fiscal year, each State entity shall be 
     allotted at least $200,000.
       ``(B) Insufficient sums.--If the sums available to carry 
     out this subsection for any fiscal year are insufficient to 
     make the allotments under subparagraph (A) in full, such sums 
     shall be allotted so that each State entity receives an equal 
     amount.
       ``(C) Excess funds.--In any case in which the sums 
     available to carry out this subsection for any fiscal year 
     are in excess of the amount required to make the allotments 
     under subparagraph (A)--
       ``(i) 34 percent of the amount of such excess for such 
     fiscal year shall be available to the Chairperson for making 
     grants under this subsection to State entities;
       ``(ii) 44 percent of the amount of such excess for such 
     fiscal year shall be allotted so that each State entity 
     receives an equal amount; and
       ``(iii) the remainder of the amount of such excess for such 
     fiscal year shall be allotted so that each State entity 
     receives an amount that bears the same ratio to such 
     remainder as the population of the State for which the 
     application is approved bears to the population of all the 
     States.
       ``(7) Limitations.--
       ``(A) Federal share.--
       ``(i) In general.--Funding provided through a grant made 
     under this subsection to a State entity for any fiscal year 
     shall be available to each State entity that has an 
     application approved by the Chairperson, and has the State 
     plan accompanying the application in effect on the first day 
     of such fiscal year, to pay not more than 50 percent of the 
     total cost of carrying out any activity described in 
     paragraph (3).
       ``(ii) Excess portion.--Except as provided in clause (iii), 
     the portion of the funding provided through any grant made 
     under paragraph (6)(A) to a State entity for any fiscal year 
     that exceeds $125,000 shall be available, at the discretion 
     of the Chairperson, to pay not more than 100 percent of such 
     cost of carrying out an activity under this subsection if 
     such activity would be unavailable to the residents of the 
     State without such portion.
       ``(iii) Percentage of grant funds.--The portion of the 
     funding described in clause (ii) for any fiscal year that is 
     available to pay not more than 100 percent of such cost, as 
     described in clause (ii), shall not exceed 20 percent of the 
     total of the funding provided through such grant for such 
     fiscal year.
       ``(B) Prohibition on supplanting non-federal funds.--Funds 
     made available under this subsection shall be used to 
     supplement, and shall not supplant, non-Federal funds 
     expended for supporting activities described in paragraph 
     (3).
       ``(8) Unobligated funds.--Any amount allotted to a State 
     entity under paragraph (6) for any fiscal year that is not 
     obligated by the State entity earlier than 60 days prior to 
     the end of the fiscal year for which the amount is 
     appropriated shall be available for making grants under 
     subsections (d) and (e).
       ``(9) Limitation on multiple entities.--The Chairperson may 
     not make grants under this subsection to more than 1 entity 
     in any State.
       ``(d) National Grants.--
       ``(1) Purpose.--The purpose of this subsection is to 
     provide support for grants to groups, individuals, and State 
     agencies or entities to carry out activities relating to 
     education and the public humanities that have a national 
     audience and are of national significance, such as activities 
     relating to education in the humanities, media projects, 
     projects in museums and by historical organizations, projects 
     in libraries and archives, public humanities projects, 
     endowment building, and technology activities.
       ``(2) General authority.--Using funds reserved under 
     section 106(b)(1)(D), the Chairperson, acting on the 
     recommendation of the National Council on the Humanities, may 
     establish and carry out a program of grants to groups, or in 
     appropriate cases individuals, who or which meet the standard 
     of excellence in the humanities and significance in the 
     humanities, or State agencies or entities, to pay for the 
     Federal share of the cost of activities, in accordance with 
     subsection (f), to--
       ``(A) develop and encourage the pursuit of a national 
     policy to further the public good through public funding of 
     the humanities;
       ``(B) initiate and support research and programs to 
     strengthen the research and teaching potential of the United 
     States in the humanities;
       ``(C) foster the exchange of information in the humanities;
       ``(D) foster education in, and public understanding and 
     appreciation of, the humanities;
       ``(E) support projects that foster or promote literacy;
       ``(F) ensure that the benefit of the programs of the 
     Endowment will also be available to the citizens of the 
     United States where such programs would otherwise be 
     unavailable due to geographic or economic reasons;
       ``(G) enable the groups to increase the levels of 
     continuing support and to increase the range of contributors 
     to the program of the groups;
       ``(H) provide administrative and management improvements 
     for the groups, particularly in the field of long-range 
     financial planning;
       ``(I) enable the groups to increase audience participation 
     in, and appreciation of, programs sponsored by the groups;
       ``(J) develop new sources of long-term support for 
     educational, scholarly, and public programs in the 
     humanities, including renovating or constructing facilities, 
     augmenting or establishing endowment funds, and purchasing 
     capital equipment to ensure financial stability;
       ``(K) stimulate greater cooperation among the groups 
     especially designed to serve better the communities in which 
     the groups are located; and
       ``(L) foster greater citizen involvement in planning the 
     cultural development of a community.
       ``(e) Research and Scholarship Grants.--
       ``(1) Purpose.--The purpose of this subsection is to 
     encourage the development and dissemination of significant 
     scholarship in the humanities by groups, individuals, and 
     State agencies or entities by such means as fellowships for 
     college and university faculty and independent scholars, 
     dissertation grants, summer stipends, and funds for scholarly 
     publications, reference materials, basic research, 
     institutional programs, and preservation.
       ``(2) General authority.--Using funds reserved under 
     section 106(b)(1)(E), the Chairperson, acting on the 
     recommendation of the National Council on the Humanities, may 
     establish and carry out a program of grants to groups, 
     individuals, State agencies, and State entities for the 
     purpose of paying for the Federal share of the cost, in 
     accordance with subsection (f), of--
       ``(A) initiating and supporting (including supporting 
     through fellowships) training, workshops, programs, research, 
     and publications, in the humanities, that have substantial 
     scholarly and cultural significance and that reach or reflect 
     the cultural heritage of the United States;
       ``(B) fostering projects that provide access to, and 
     preserving materials important to research, education, and 
     public understanding regarding, the humanities;
       ``(C) enabling the groups to increase the levels of 
     continuing support and to increase the range of contributors 
     to the program of the groups;
       ``(D) providing administrative and management improvements 
     for the groups, particularly in the field of long-range 
     financial planning; and
       ``(E) developing new sources of long-term support for 
     educational, scholarly, and public programs in the 
     humanities, including renovating or constructing facilities, 
     augmenting or establishing endowment funds, and purchasing 
     capital equipment to ensure financial stability.
       ``(3) Training; workshops; research.--A fellowship awarded 
     to an individual under paragraph (2)(A) may be used for the 
     purpose of supporting study or research at an appropriate 
     nonprofit institution selected by the individual, for a 
     stated period of time. The total amount of any grant under 
     paragraph (2)(A) to any group engaging in workshop activities 
     for which an admission or other charge is made to the general 
     public shall not exceed 30 percent of the total cost of such 
     activities.
       ``(4) Considerations.--In selecting a group or individual 
     as a recipient of a grant to be made under this subsection, 
     the Chairperson shall give particular regard to scholars, and 
     educational and cultural institutions, that traditionally 
     have been underrepresented in the humanities.
       ``(f) Federal Share and Non-Federal Share for National 
     Grants and Research and Scholarship Grants.--
       ``(1) Federal share.--
       ``(A) In general.--Except as provided in paragraph (3), and 
     subject to subparagraph (B), the Federal share described 
     subsection (d)(2) or (e)(2) shall be determined by the 
     Chairperson, after recommendation from the Council.
       ``(B) Special rule.--With respect to a fiscal year, the 
     Chairperson shall ensure that the aggregate amount of funding 
     provided by the Chairperson through grants under subsections 
     (d)(2) and (e)(2) for that fiscal year shall equal the 
     aggregate amount of non-Federal contributions made for that 
     fiscal year, in accordance with paragraph (2), by

[[Page S7499]]

     recipients of grants awarded under subsections (d)(2) and 
     (e)(2).
       ``(2) Non-federal share.--
       ``(A) In general.--Except as provided in paragraph (3) and 
     subject to subparagraph (B), the Chairperson shall have the 
     discretion in determining the amount of non-Federal 
     contribution that a recipient of a grant under subsection 
     (d)(2) or (e)(2) shall be required to make toward the cost of 
     an activity funded under the grant.
       ``(B) Special rule.--With respect to a fiscal year, the 
     Chairperson shall ensure that the aggregate amount of non-
     Federal contributions provided by recipients of grants under 
     subsections (d)(2) and (e)(2) for that fiscal year shall 
     equal the aggregate amount of funding that the Chairperson 
     provided through grants under subsections (d)(2) and (e)(2) 
     for that fiscal year.
       ``(3) Special rules for activities relating to new sources 
     of long-term support.--
       ``(A) Federal share.--The Federal share described in 
     subsection (d)(2) or (e)(2) for an activity described in 
     subsection (d)(2)(J) or (e)(2)(E) shall be an amount equal to 
     25 percent of the cost of the activity.
       ``(B) Non-federal share.--A recipient that receives a grant 
     under subsection (d) to carry out an activity described in 
     paragraph (2)(J) of such subsection, or subsection (e) to 
     carry out an activity described in paragraph (2)(E) of such 
     subsection, shall make available non-Federal contributions 
     toward the costs of the activity in an amount equal to 75 
     percent of such costs ($3 for each $1 of Federal funds 
     provided in the grant).

     ``SEC. 303. APPLICATION PROCEDURES.

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

     ``SEC. 304. REVIEW PANELS.

       ``The Chairperson may select panels of experts under 
     section 307(a)(3) to review and make recommendations with 
     respect to the approval of applications for grants authorized 
     under this title. In selecting the panels, the Chairperson 
     shall appoint individuals who have exhibited expertise and 
     leadership in the field under review, who broadly represent 
     diverse humanistic perspectives and geographic factors, and 
     who broadly represent cultural diversity.

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

       ``(a) Establishment.--There is established within the 
     Endowment a National Council on the Humanities (referred to 
     in this section as the `Council').
       ``(b) Composition.--
       ``(1) In general.--The Council shall be composed of the 
     Chairperson of the Endowment, who shall be the Chairperson of 
     the Council, and 20 other members appointed by the President, 
     by and with the advice and consent of the Senate, who shall 
     be selected--
       ``(A) from among private citizens of the United States 
     who--
       ``(i) are recognized for their broad knowledge of, or 
     expertise in, the humanities; and
       ``(ii) have established records of distinguished service, 
     or achieved eminence, in the humanities;
       ``(B) so as to include scholars and others who are 
     professionally engaged in the humanities; and
       ``(C) so as collectively to provide an appropriate 
     distribution of members among the major humanities fields.
       ``(2) Qualifications.--The President may, in making such 
     appointments, give consideration to such recommendations as 
     may, from time to time, be submitted to the President by 
     leading national organizations in the major humanities 
     fields. In making such appointments, the President shall give 
     due regard to equitable representation of women, racially and 
     ethnically diverse individuals, and individuals with 
     disabilities, who are involved in the humanities. Members of 
     the Council shall be appointed so as to represent equitably 
     geographical areas in the United States.
       ``(c) Terms.--
       ``(1) In general.--
       ``(A) Staggered terms.--Each member of the Council shall 
     serve for a term of 6 years, and the terms shall be 
     staggered.
       ``(B) Expiration.--Except as provided in paragraph (2), the 
     terms of all Council members shall expire on the third day of 
     September in the year of expiration.
       ``(C) Reappointment after partial term.--Each member who 
     has served on the Council for 1 term of less than 3 years 
     shall be eligible for reappointment for 1 term of 6 years.
       ``(D) Vacancy appointments.--Any member appointed to fill a 
     vacancy shall serve for the remainder of the term for which 
     the predecessor of the member was appointed.
       ``(E) Holdover service.--Notwithstanding any other 
     provision of this subsection, a member of the Council shall 
     serve after the expiration of the term of the member until 
     the successor to the member takes office.
       ``(2) Adjustment to reduce council.--
       ``(A) Members whose terms expired in 1996 but continue to 
     serve.--
       ``(i) In general.--The terms of 6 members of the Council 
     whose terms expired on September 3, 1996 and who continue to 
     serve because a successor has not been appointed shall be 
     deemed to expire on the date of enactment of the Arts and 
     Humanities Amendments of 1997.
       ``(ii) Successors.--The President shall appoint 3 members 
     of the Council to succeed members whose terms are deemed to 
     expire as described in clause (i).
       ``(B) Members whose terms expire in 2000.--
       ``(i) In general.--The terms of 2 members of the Council 
     whose terms expire on September 3, 2000 shall be deemed to 
     expire on September 3, 2002.
       ``(ii) Successors.--The President shall not appoint any 
     members to succeed the members whose terms are deemed to 
     expire as described in clause (i).
       ``(d) Compensation.--Members of the Council shall receive 
     compensation at a rate to be fixed by the Chairperson but not 
     to exceed the daily equivalent of the maximum rate authorized 
     for a position above grade GS-15 of the General Schedule 
     under section 5108 of title 5, United States Code, and be 
     allowed travel expenses including per diem in lieu of 
     subsistence, as authorized under section 5703 of title 5, 
     United States Code, for persons employed intermittently in 
     Federal Government service.
       ``(e) Meetings and Duties.--
       ``(1) Meetings.--The Council shall meet at the call of the 
     Chairperson but not less often than twice during each 
     calendar year. Eleven members of the Council shall constitute 
     a quorum.
       ``(2) Duties.--The Council shall--
       ``(A) advise the Chairperson with respect to policies, 
     programs, and procedures for carrying out the functions of 
     the Chairperson under this title; and
       ``(B) review applications for grants authorized under this 
     title and make recommendations to the Chairperson with 
     respect to the approval of each application.
       ``(f) Actions by Chairperson.--
       ``(1) In general.--The Chairperson shall not approve or 
     disapprove any application for a grant authorized under this 
     title until the Chairperson has received the recommendation 
     of the Council on such application, unless the Council fails 
     to make a recommendation on the application within a 
     reasonable time.
       ``(2) Delegations.--In the case of an application submitted 
     under this title and involving $35,000 or less, the 
     Chairperson may approve or disapprove such application if 
     such action is taken pursuant to the terms of an express and 
     direct delegation of authority from the Council to the 
     Chairperson, and if each such action by the Chairperson is 
     reviewed by the Council. The terms of any such delegation of 
     authority shall not permit obligations for expenditure of 
     funds under such delegation for any fiscal year that exceed 
     an amount equal to 3 percent of the sums appropriated for the 
     fiscal year pursuant to section 106(b)(1)(A).

     ``SEC. 306. LIMITATIONS ON GRANTS.

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

[[Page S7500]]

     ``SEC. 307. ADMINISTRATIVE PROVISIONS.

       ``(a) Authorities of Chairperson.--In addition to any 
     authorities vested in the Chairperson by other provisions of 
     this Act, the Chairperson, in carrying out the functions of 
     the Chairperson, shall have authority--
       ``(1) to prescribe such regulations and procedures as the 
     Chairperson determines to be necessary, governing the manner 
     in which the functions of the Chairperson shall be carried 
     out;
       ``(2) to appoint and determine the compensation of such 
     employees, subject to title 5, United States Code, as may be 
     necessary to carry out the functions of the Chairperson, to 
     define the duties of such employees, and to supervise and 
     direct the activities of such employees;
       ``(3) to procure the temporary and intermittent services of 
     experts and consultants, including panels of experts, and 
     compensate the experts and consultants in accordance with 
     section 3109 of title 5, United States Code;
       ``(4) to accept and utilize the voluntary services of 
     individuals and reimburse the individuals for travel 
     expenses, including per diem in lieu of subsistence, in the 
     same amounts and to the same extent as authorized under 
     section 5703 of title 5, United States Code, for persons 
     employed intermittently in Federal Government service;
       ``(5) to make advance, progress, and other payments without 
     regard to section 3324 of title 31, United States Code;
       ``(6) to rent office space in the District of Columbia; and
       ``(7) to make other necessary expenditures.
       ``(b) Publications.--Official publications of the Endowment 
     under this title may be supported without regard to the 
     provisions of section 501 of title 44, United States Code, if 
     the Chairperson consults with the Joint Committee on Printing 
     of the Congress.
       ``(c) Coordination.--The Chairperson shall coordinate the 
     programs of the Endowment, insofar as practicable, with other 
     Federal programs, programs of designated State humanities 
     agencies, and programs undertaken by other public agencies or 
     private groups, and shall develop the programs of the 
     Endowment with due regard to the contribution to the 
     objectives of this title that can be made by other Federal 
     agencies under the existing programs. The Chairperson may 
     enter into interagency agreements to promote or assist with 
     the humanities-related activities of other Federal agencies, 
     on a reimbursable or nonreimbursable basis, and may use funds 
     authorized to be appropriated to carry out this title to pay 
     for the costs of such promotion or assistance.

     ``SEC. 308. REPORTS.

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

     ``SEC. 309. SANCTIONS AND PAYMENTS.

       ``(a) Failure To Satisfy Purposes.--If any recipient of a 
     grant made under this title, or an indirect recipient of 
     funding provided through the grant, substantially fails to 
     satisfy the purposes for which such grant is made, as 
     determined by the Chairperson, the Chairperson may--
       ``(1) for purposes of determining whether to make any 
     subsequent funding to the direct or indirect recipient under 
     this title, take into consideration the results of the post-
     award evaluation conducted under section 308(c);
       ``(2) prohibit the direct and indirect recipients from 
     using the name of, or in any way associating the project, 
     production, or workshop for which the grant was received 
     with, the Endowment; and
       ``(3) if such project, production, or workshop is 
     published, require that the publication contain the following 
     statement: `The opinions, findings, conclusions, and 
     recommendations expressed in this publication do not reflect 
     the views of the National Endowment for the Humanities.'.
       ``(b) Noncompliance.--
       ``(1) In general.--The Chairperson shall take the actions 
     described in paragraph (2) whenever the Chairperson, after 
     providing reasonable notice and an opportunity for hearing, 
     finds that--
       ``(A) a direct recipient of a grant under this title, or an 
     indirect recipient of funding provided through the grant, is 
     not complying substantially with the provisions of this 
     title;
       ``(B) a State agency or entity that received a grant under 
     this title, or an indirect recipient of funding provided 
     through the grant, is not complying substantially with terms 
     and conditions of the State plan accompanying the application 
     approved for the grant under this title; or
       ``(C) any funding provided under this title to a recipient 
     or State agency or entity described in subparagraph (A) or 
     (B) has been diverted from the purposes for which such 
     funding was provided.
       ``(2) Actions.--On making the finding described in 
     paragraph (1), the Chairperson shall immediately notify the 
     direct recipient, or State agency or entity, that received 
     the funding at issue that--
       ``(A) no further funding will be provided under this title 
     to such recipient or State agency or entity until there is no 
     longer any default or failure to comply or the diversion is 
     corrected; or
       ``(B) if compliance or correction is impossible, until such 
     recipient or State agency or entity repays or arranges the 
     repayment of the Federal funds that were improperly diverted 
     or expended.
       ``(c) Recapture.--
       ``(1) In general.--A recipient of funding under this title 
     shall pay the amount described in paragraph (2) to the 
     Endowment if the Chairperson finds that the recipient has 
     derived net program income in excess of the match required 
     under the terms of the agreement from the commercially 
     successful activities funded that exceeds the lesser of--
       ``(A) $50,000; or
       ``(B) twice the amount of the funding.
       ``(2) Amount.--At the discretion of the Chairperson, the 
     amount referred to in paragraph (1) is not less than \1/3\ 
     and not more than \1/2\ of the amount of the net program 
     income generated within 5 years after the end of the grant 
     period, but not more than the amount of the funding, unless 
     the Chairperson has reached an agreement with the grantee 
     upon the award of a grant that the amount referred to in 
     paragraph (1) shall exceed the amount of the grant.
       ``(d) Account.--Except as otherwise provided in this Act, 
     the Treasurer of the United States shall deposit funds paid 
     under subsection (c), or repaid under this Act, in a special 
     interest bearing account to the credit of the Endowment.

     ``SEC. 310. AWARDS.

       ``(a) Jefferson Lecture in the Humanities Award.--The 
     Chairperson may award annually the Jefferson Lecture in the 
     Humanities Award to 1 individual for distinguished 
     intellectual achievement in the humanities. Each such award 
     shall not exceed $10,000.
       ``(b) National Humanities Medal.--
       ``(1) In general.--The President may award the National 
     Humanities Medal to individuals or groups whose work--
       ``(A) has expanded the understanding of citizens of the 
     United States in the area of humanities;
       ``(B) has broadened such citizens engagement with the 
     humanities; or
       ``(C) has helped preserve and expand the access of such 
     citizens to important resources in the humanities.
       ``(2) Number of medals.--Not more than 12 of such medals 
     may be awarded in any calendar year.
       ``(3) Ceremonies.--The presentation of the National 
     Humanities Medal shall be made by the President with such 
     ceremonies as the President may determine to be appropriate, 
     including attendance by appropriate Members of Congress.''.

     SEC. 102. CONFORMING AMENDMENTS.

       Section 8G of the Inspector General Act of 1978 (5 U.S.C. 
     App.) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2), by striking ``the National Endowment 
     for the Arts, the National Endowment for the Humanities,'' 
     and inserting ``the portion of the National Foundation on the 
     Arts and the Humanities consisting of the National Endowment 
     for the Arts and

[[Page S7501]]

     the National Endowment for the Humanities,''; and
       (B) in paragraph (4)--
       (i) in subparagraph (A), by striking at the end ``and'';
       (ii) in subparagraph (B), by inserting after the semicolon 
     ``and''; and
       (iii) by adding at the end the following:
       ``(C) with respect to the National Endowment for the Arts 
     and the National Endowment for the Humanities, the term means 
     the Chairperson of the National Endowment for the Arts with 
     respect to matters relating to the National Endowment for the 
     Arts and the Chairperson of the National Endowment for the 
     Humanities with respect to matters relating to the 
     Chairperson of the National Endowment for the Humanities;'';
       (2) in subsection (c), by inserting before the period the 
     following: ``, except that the Inspector General for the 
     National Endowment for the Arts and the National Endowment 
     for the Humanities shall be jointly appointed by the 
     Chairperson of the National Endowment for the Arts and the 
     Chairperson of the National Endowment for the Humanities''; 
     and
       (3) in the first sentence of subsection (d), by inserting 
     before the period the following: ``, except as provided in 
     section 103 of the National Foundation on the Arts and the 
     Humanities Act of 1965''.
               TITLE II--ARTS AND ARTIFACTS INDEMNITY ACT

     SEC. 201. ARTS AND ARTIFACTS.

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

     ``SECTION 1. SHORT TITLE.

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

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

       ``The Federal Council on the Arts and Humanities (referred 
     to in this Act as the `Council') established under section 8, 
     may enter into agreements to indemnify against loss or damage 
     such items as may be eligible for such indemnity agreements 
     under section 3--
       ``(1) in accordance with the provisions of this Act; and
       ``(2) on such terms and conditions as the Council shall 
     prescribe, by regulation, in order to achieve the objectives 
     of this Act and, consistent with such objectives, to protect 
     the financial interest of the United States.

     ``SEC. 3. ELIGIBLE ITEMS.

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

     ``SEC. 4. APPLICATIONS.

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

     ``SEC. 5. INDEMNITY AGREEMENT.

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

     ``SEC. 6. REGULATIONS AND CERTIFICATION.

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

     ``SEC. 7. REPORT.

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

     ``SEC. 8. ESTABLISHMENT OF THE FEDERAL COUNCIL ON THE ARTS 
                   AND THE HUMANITIES.

       ``(a) Establishment.--
       ``(1) In general.--There is established a Federal Council 
     on the Arts and the Humanities.
       ``(2) Status as an agency.--For the purposes of this Act, 
     the Council shall be an agency within the meaning of the 
     appropriate definitions of such term in title 5, United 
     States Code.
       ``(b) Membership.--
       ``(1) In general.--The Council shall be composed of the 
     Chairperson of the National Endowment for the Arts, the 
     Chairperson of the National Endowment for the Humanities, the 
     Director of the Institute of Museum and Library Services, the 
     Secretary of Education, the Secretary of the Smithsonian 
     Institution, the Director of the National Science Foundation, 
     the Librarian of Congress, the Director of the National 
     Gallery of Art, the Chairman of the Commission of Fine Arts, 
     the Archivist of the United States, the Commissioner, Public 
     Buildings Service, General Services Administration, the 
     Assistant Secretary for Aging, a member designated by the 
     Secretary of State, and a member designated by the Secretary 
     of the Interior, a member designated by the Chairman of the 
     Senate Commission on Art and Antiquities, and a member 
     designated by the Speaker of the House of Representatives.
       ``(2) Designation of presiding officer.-- The President 
     shall designate the presiding officer of the Council from 
     among the members.
       ``(3) Authority to change the membership.--The President is 
     authorized to change the membership of the Council as the 
     President deems necessary to meet changes in Federal programs 
     or executive branch organization.
       ``(c) Functions.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Council shall--
       ``(A) carry out the functions of the Council described in 
     sections 1 through 7;
       ``(B) promote coordination between the programs and 
     activities of the National

[[Page S7502]]

     Foundation on the Arts and Humanities and related programs 
     and activities of other Federal agencies; and
       ``(C) encourage an ongoing dialogue in support of the arts 
     and the humanities among Federal agencies.
       ``(2) Restrictions.--The following members of the Council 
     shall not carry out the functions described in paragraph 
     (1)(A):
       ``(A) The Secretary of the Smithsonian Institution.
       ``(B) The Director of the National Gallery of Art.
       ``(C) The member of the Council designated by the Chairman 
     of the Senate Commission on Art and Antiquities.
       ``(D) The member of the Council designated by the Speaker 
     of the House of Representatives.
       ``(3) Limitation on use of employees.--No employee (other 
     than a member of the Council) of the Council may carry out 
     the activities described in subparagraphs (B) and (C) of 
     paragraph (1).

     ``SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated such sums as may 
     be necessary--
       ``(1) to enable the Council to carry out the functions 
     (except the functions described in subparagraphs (B) and (C) 
     of section 8(c)(1)) of the Council under this Act; and
       ``(2) to pay claims certified pursuant to section 6(b).''.

  Mr. KENNEDY. Mr. President, it is an honor to be a sponsor of this 5-
year reauthorization of the National Endowments for the Arts and 
Humanities. I commend Chairman Jeffords for his leadership in support 
of these two important Endowments. We intend to do all we can to 
support them and keep them active because of their well-known success 
in enhancing the cultural life of the Nation.
  The arts and humanities have, and deserve to have, a central role in 
the life of America. The National Endowments for the Arts and 
Humanities have contributed immensely to that role. They encourage the 
growth and development of the arts and humanities in communities across 
the Nation, giving new emphasis and vitality to American creativity and 
scholarship, and to the cultural diversity that is one of America's 
greatest strengths.
  Americans have a great deal to celebrate--and also to learn--about 
our extraordinary cultural traditions, our complex modern society, and 
our country's many possibilities for the future. The arts and 
humanities are essential parts of this experience. If we shortchange 
the arts and humanities, we shortchange America itself.
  There are critics who continue to seek the elimination of the 
Endowments--despite the fact that the American people themselves want 
the arts to be an active and significant part of their lives, and 
despite the recognized need for greater support to enable people from 
all walks of life to have realistic opportunities to enjoy America's 
artistic and scholarly traditions and innovations.
  Unfortunately, the critics gained undeserved strength with the 
Republican takeover of Congress in 1994. The Arts Endowment is 
currently under intense ideological attack by Republican leaders in the 
House of Representatives who are bent on eliminating the agency.
  One of the few gratifying aspects of the current debate is the 
outrage the House assault has created in communities across the 
country. As last week's 217 to 216 vote demonstrated, the House 
Republican leadership was forced into an embarrassing public display of 
arm-twisting to salvage its untenable position. The reason is obvious. 
Angry citizens are contacting Congress. Editorials and opinion pieces 
supporting the Endowment are proliferating in newspapers large and 
small across the country, labeling this threat for what it is--a 
frontal assault on the arts in America.
  These citizens and these communities understand the importance and 
the success of the Arts Endowment. As a result of its leadership over 
the past three decades, the country now has double the number of 
community orchestras, 11 times the number of community dance companies, 
and 50 times the number of community arts agencies. Clearly, the crass 
Republican attempt to mug the Arts Endowment is doomed to fail. I am 
confident that sanity will return to the House of Representatives 
before the debate is ultimately over. There is simply too much at 
stake.
  The arts and humanities are vital and essential parts of our national 
experience, and Congress has an obligation to ensure that they are more 
accessible, not less accessible, to all Americans in every community.
  The current legislation which we introduce today to reauthorize the 
Endowments is well designed to increase access to arts programs and 
cultural programs in underserved communities and areas that do not yet 
have such access on a regular or widespread basis, but that would be 
greatly enriched by these programs.
  In addition, under the legislation, arts education grants will 
provide funds to make the arts more accessible in schools, where they 
are increasingly becoming an effective way to strengthen education. 
Young people deserve to have music, theater, dance, poetry, and the 
other arts as basic parts of their school years. These investments in 
students and schools will bring major long-term benefits to the nation.
  Students receive short-term benefits too. According to a recent 
study, high school students who took an arts course in each year of 
high school scored 59 points higher on the verbal portion of the SAT 
and 44 points higher on the math portion than students with no courses 
in the arts.
  Unfortunately, in spite of these obvious and very tangible benefits, 
the arts and humanities must now exist in an environment where there 
are fewer public dollars and greater competition for private support. 
Adequate Federal funding for the Endowments is more important than 
ever. Our bill, therefore, authorizes $175 million for the Arts 
Endowment and $175 million for the Humanities Endowment for the next 
fiscal year, compared to appropriations of $99.5 million for the Arts 
Endowment and $110 million for the Humanities Endowment in the current 
fiscal year. Authorizations for the following 4 fiscal years are open-
ended; our bill specifies ``such sums as may be necessary.''
  President Kennedy understood the importance of the arts in our daily 
lives. As he said in 1963:

       I look forward to an America which will reward achievement 
     in the arts as we reward achievement in business or 
     statecraft. I look forward to an American which will steadily 
     raise the standard of artistic accomplishment and which will 
     steadily enlarge cultural opportunities for all of our 
     citizens. And I look forward to an America which commands 
     respect throughout the world not only for its strength but 
     also for its civilization as well.

  Preserving and supporting the Arts and Humanities Endowments are 
among one of the most important and effective ways that Congress can 
help to make this vision a reality.
  Throughout history, governments have recognized their responsibility 
to support and encourage the arts and humanities. In times of rapid 
change, it is particularly important for us to find effective ways to 
celebrate our common American community and our shared cultural 
heritage and values.
  Again, I commend Chairman Jeffords for his commitment to the 
Endowments. This legislation deserves broad bipartisan support in 
Congress, and I look forward to its enactment.
  Mr. CHAFEE. Mr. President, I am delighted to join with the chairman 
and ranking member of the Senate Labor and Human Resources Committee, 
Senators Jeffords and Kennedy, in introducing legislation to 
reauthorize the National Endowment for the Arts and the National 
Endowment for the Humanities. Later this month, we will vote on funding 
for the Endowments, and it is my sincere hope that the Senate will show 
its determination to continue Federal support for the arts, as it has 
in years past.
  Although other countries have long histories of government support 
for cultural activities, Federal support for artists in the United 
States began during the Great Depression, when the WPA hired scores of 
writers, musicians, painters, sculptors, and other artists to work on 
public art projects. But that support was short lived. It wasn't until 
1964 that the National Endowment for the Arts first was created. The 
NEA saw profound growth during the Nixon and Ford administrations.
  Regrettably, its funding has been reduced by about 40 percent over 
the past few years primarily because of a few grants that were deemed 
to have been obscene and inappropriate. With regard to this issue of 
obscene art, I believe that any such debate should be framed in terms 
of the overall record of the NEA, not in terms of a few grants that may 
have escaped appropriate scrutiny. Of the more than 100,000 grants

[[Page S7503]]

provided by the NEA in its almost 30-year history, only a handful have 
been the subject of controversy. That is an excellent track record, and 
I do not believe that those few grants should be used as the yardstick 
by which the Endowment is judged.
  Mr President, the public's support for the NEA and NEH is very 
strong. In Rhode Island, we have a vigorous and growing arts community. 
The Rhode Island School of Design is among the most prestigious fine 
arts and design schools in the Nation. It attracts the most talented 
students and teachers who often make Rhode Island their permanent home. 
Many Rhode Islanders, and people in the city of Providence in 
particular, are enormously enthusiastic about the arts community, which 
has contributed greatly to our economic redevelopment efforts.
  The NEA and NEH support a wide array of artists, writers, actors, 
musicians, and other artists. During the past several weeks, I have 
heard from a number of Rhode Island artists. I would like to share an 
excerpt from a Rhode Island musician with you. Rebecca Truitt, a 
cellist in the Rhode Island Philharmonic, wrote to me on March 8. This 
is what she said:

       The declining state of public support for the arts in 
     America is of great concern to me. . . . Equally critical is 
     the possibility that our cultural agencies may fail to 
     receive authorization for Fiscal Year 1998. Should that 
     happen, it would be an embarrassing day for the United 
     States, making us unique among cultured nations by 
     eliminating the arts from our priorities. Whether all 
     orchestras, including my orchestra, the Rhode Island 
     Philharmonic Orchestra, receive funding or not, one thing is 
     clear, the NEA has helped raise the standard of all 
     professional performing groups in the U.S., catapulting 
     American music and musicians to the forefront of the 
     international music scene. Moreover, the NEA has helped to 
     promote and sustain American jobs.

  Throughout my years in the Senate, I have supported funding for both 
the National Endowment for the Arts and the National Endowment for the 
Humanities. Once again, I am delighted to introduce this 
reauthorization bill with Senators Jeffords and Kennedy.

                          ____________________