[Congressional Record Volume 144, Number 2 (Wednesday, January 28, 1998)]
[Senate]
[Pages S114-S179]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mrs. FEINSTEIN:
  S. 1576. A bill to amend the Clean Air Act to permit the exclusive 
application of California State regulations regarding reformulated 
gasoline in certain areas within the State; to the Committee on 
Environment and Public Works.


              THE MTBE CLEAN AIR ACT AMENDMENT ACT OF 1998

  Mrs. FEINSTEIN. Mr. President, I rise today to introduce legislation 
which will amend the Clean Air Act to allow California to operate its 
own reformulated gasoline program, which is stricter than the federal 
program and meets the air quality requirements set forth in the 1990 
Clean Air Act.


                           What the bill does

  The bill provides that if a state's reformulated gasoline rules 
achieve equal or greater emissions reductions than federal regulation, 
that state's rules will take precedence. This works to exempt 
California from overlapping federal oxygenate requirements.
  The bill is the Senate version of legislation introduced last year in 
the House by Congressman Brian Bilbray (R-San Diego) and cosponsored by 
46 members of the California Congressional delegation.
  The bill applies only to states which have received waivers under 
Section 209(b)(1) of the Clean Air Act, for which California is the 
only state currently eligible for such a waiver.
  By exempting California from the oxygenate requirement, this 
legislation will give gasoline manufacturers the flexibility to reduce 
or even eliminate the use of gasoline oxygenates, such as methyl 
tertiary butyl ether (MTBE)--which has been detected in alarming 
amounts in California groundwater.
  The legislation allows the companies who serve California's gasoline 
needs to continue to adopt better methods of producing California 
Cleaner Burning gasoline, without being restricted by oxygenate 
requirements.


                     california air quality history

  California's efforts to improve air quality predate similar federal 
efforts, and have achieved marked success in reducing toxic emission 
levels, resulting in the cleanest air Californians have seen in 
decades. This trend will continue with the passage of this bill.
  Since the introduction of the California Cleaner Burning Gasoline 
program, there has been a 300 ton per day decrease in ozone forming 
ingredients found in the air. This is the emission reduction equivalent 
of taking 3.5 million automobiles off the road. California reformulated 
gasoline reduces smog forming emissions from vehicles by 15 percent.
  The state has also has seen a marked decrease in first stage smog 
alerts, during which residents with respiratory ailments are encouraged 
to stay indoors.
  California Environmental Protection Agency Chairman John Dunlop, who 
supports this legislation, says:

       . . . our program has proven (to have) a significant effect 
     on California's air quality. Following the introduction of 
     California's gasoline program in the spring of 1996, monitor 
     levels of ozone . . . were reduced by 10 percent in Northern 
     California, and by 18 percent in the Los Angeles area. 
     Benzene levels (have decreased) by more than 50 percent.

  Although California has made great progress in decreasing the amount 
of toxins in the air, the overlap of federal regulations, on top of the 
strict state regulations, does not allow the state much flexibility in 
the design and implementation of its reformulated fuels program.
  This inflexibility makes it difficult for gasoline producers to 
respond effectively to unforeseen problems associated with their 
product. Such is the case with the oxygenate MTBE leaking into 
California groundwater.
  Refiners are bound by federal law to include an oxygenate in their 
gasoline, even if they can make gasoline which meets Clean Air Act 
emissions requirements without its use.
  Thus, the need for the legislation is twofold--to streamline 
overlapping federal and state regulations, and to allow gasoline 
manufacturers the flexibility to make California Cleaner Burning 
Gasoline without oxygenated fuels.


           Federal reformulated gasoline requirement history

  Federal reformulated gasoline, and the oxygenate requirement included 
in it, came as a response to the worsening air quality of many American 
cities.
  For many years major cities, including San Diego, Sacramento and Los 
Angeles, were facing serious pollution problems due to increasing 
amounts of smog and ozone in the air.
  As the air quality worsened, people around the country began 
experiencing more frequent respiratory illnesses, and increased asthma 
attacks due to the toxins in the air.
  In 1990, Congress recognized the gravity of this national problem and 
amended the Clean Air Act to ensure that our nation's most smoggy and 
polluted areas were the beneficiaries of tougher motor vehicle emission 
control standards.
  One of these amendments directed the United States Environmental 
Protection Agency (EPA) to adopt a federal reformulated gasoline 
program for urban areas with the most serious pollution problems.
  The federal reformulated gasoline program mandated that this new 
cleaner burning gasoline reduce emissions of benzene, a known human 
carcinogen, and other toxins.
  The federal program also mandated that this reformulated gasoline 
contain 2 percent by weight oxygenate, which functions to make the gas 
burn more completely and efficiently.


                    california reformulated gasoline

  By December 1994, the oxygenate requirement went into effect. In 
California, this mandate affected three cities in particular, where the 
air quality was the worst.
  Reformulated gasoline was required to be sold during the winter 
season in the greater Los Angeles, San Diego and Sacramento regions. 
This gasoline contained 11 percent MTBE, in order to meet the federal 
oxygenate requirement.
  While federal Clean Air Act regulations were being promulgated, the 
California Air Resources Board developed even tougher and more 
stringent environmental standards. However, these standards permitted 
more flexibility in how they could be achieved by California's gasoline 
manufacturers.
  By establishing a State Implementation Plan which restricts eight 
different properties that affect emissions of toxic air pollutants and 
ozone forming compounds, California's stricter regulations were 
approved by the U.S. EPA and are federally enforceable.
  Additionally, California regulations contain an innovative predictive 
model which is based on the analysis of a large number of vehicle 
emission test studies. Refiners have the option of using this model to 
produce reformulated gasoline as long as its usage results in 
equivalent or greater reductions in emissions than federal regulations. 
California EPA states that the predictive model ``shows that a 
different formulation will achieve equivalent or better air quality 
benefits.''
  While the amendments to the Clean Air Act have helped reduce 
emissions throughout the United States, they imposed limitations on the 
level of flexibility that U.S. EPA can grant to California.
  The overlapping applicability of both the federal and state 
reformulated gasoline rules has actually prohibited gasoline 
manufacturers from responding as effectively as possible to unforeseen 
problems with their product. This bill addresses exactly this type of 
situation.
  This legislation rewards California for its unique and effective 
approach in solving its own air quality problems by permitting it an 
exemption from federal oxygenate requirements as long as tough 
environmental standards are enforced.

[[Page S115]]

              mtbe contamination of california groundwater

  This legislation will allow refiners to address the problems that 
have occurred with the use of MTBE as it has leaked into groundwater 
supplies.
  Such problems were certainly not anticipated during the drafting of 
these amendments, and therefore only exemplifies the need for a 
California exemption to this requirement.
  MTBE is a highly soluble organic compound which moves quickly through 
soil and gravel, therefore posing a more rapid threat to aquifers than 
the other constituents of gasoline when leaks occur. MTBE is easily 
traced, but very difficult and expensive to clean up.
  Higher quantities of MTBE in drinking water has a smell similar to 
turpentine and a taste like paint thinner.
  Although we do not have all of the data we need to determine the 
potential damage of MTBE to our water and our health, we do know that 
it is increasingly a problem for California:
  MTBE has been detected in drinking water supplies in a number of 
cities including Santa Monica, Riverside, Anaheim, Los Angeles and San 
Francisco;
  MTBE has also been detected in numerous California reservoirs 
including Lake Shasta in Redding, San Pablo and Cherry reservoirs in 
the Bay Area, and Coyote and Anderson reservoirs in Santa Clara;
  The largest contamination occurred in the city of Santa Monica, which 
lost 75% of its ground water supply as a result of MTBE leaking out of 
shallow gas tanks beneath the surface;
  MTBE has been discovered in publicly owned wells approximately 100 
feet from City Council Chamber in South Lake Tahoe;
  In Glennvile, California, Near Bakersfield, MTBE levels have been 
detected in groundwater as high as 190,000 parts per billion--
dramatically exceeding the California Department of Health advisory of 
35 parts per billion; and
  250 underground fuel tank sites have leaked MTBE in Santa Clara 
County not far from water wells used by the residents of San Jose.
  In the face of mounting evidence of extensive MTBE contamination in 
California groundwater, several gasoline manufacturers, including 
Chevron and Tosco (Union 76), have made it clear they would like to 
have the flexibility to use only the amount and type of oxygenate 
necessary to continue to meet the environmental specifications of clean 
burning gasoline.
  Many manufacturers believe that it is possible to meet California's 
more stringent clean air standards using reduced amounts of, or in some 
cases, no oxygenate in their gasolines.
  In a recent letter to me, Chevron chairman Ken Derr expressed 
his belief that while he believes MTBE is safe if handled properly, his 
company is exploring other options. He says:

       (Chevron has) taken another look at the extensive body of 
     data that relates to fuel composition to vehicle emissions 
     and have concluded that it may be possible to make more 
     gasoline without MTBE and still meet California's cleaner 
     burning gasoline standards.

  If California refiners can meet the stricter state clean air standard 
while reducing or eliminating the use of a chemical that is 
contaminating California water, it makes good sense to give them the 
flexibility they need to solve the problem.
  By amending the Clear Air Act to waive the requirement for oxygenates 
in California, which already has in place its own stricter standards, 
this legislation does not detract in any way from the gains in emission 
reductions mandated in the Clear Air Act. It will simply allow for 
companies like Chevron to meet Clean Air Act requirements, while 
maximizing the advantages of increased flexibility in order to respond 
more efficiently and effectively to any unforseen problems encountered 
in the production of California cleaner burning gasoline.
  If exempting California from the oxygenate requirement meant 
weakening the Clear Air Act in any way, I would be the first person to 
stand up and lead the battle against such an effort.
  This bill does not weaken the Clear Air Act, but instead is a step in 
the right direction, towards sound environmental policy.
  This narrowly-targeted legislation simply makes sense. With this 
bill, California is once again taking the initiative to lead the way in 
ensuring the protection of the air we breathe, and the water we drink.
  By allowing the companies that supply our state's gasoline to utilize 
good science and sound environmental policy, we can achieve the goals 
set forth by the Clear Air Act, without sacrificing California's clean 
water.
  In short, when we pass this legislation, we will take another step 
forward in ensuring that protecting our air qualify does not come at 
the expense of safeguarding our water.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1576

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

     SECTION 1. CALIFORNIA REFORMULATED GASOLINE RULES.

       Section 211(c)(4)(B) of the Clean Air Act (42 U.S.C. 
     7545(c)(4)(B)) is amended by adding at the end the following: 
     ``If any such State that has received a waiver under section 
     209(b)(1) promulgates reformulated gasoline rules for any 
     covered area of the State (as defined in subsection (k)(10)), 
     the rules shall apply in the area in lieu of the requirements 
     of subsection (k) if the State rules will achieve equivalent 
     or greater emission reductions than would result from the 
     application of the requirements of subsection (k) in the case 
     of the aggregate mass of emissions of toxic air pollutants 
     and in the case of the aggregate mass of emissions of ozone-
     forming compounds.''.
                                 ______
                                 
      By Mr. CHAFEE (for himself, Mr. Hatch, Ms. Snowe, Mr. Roberts, 
        Mr. Specter and Ms. Collins):
  S. 1577. A bill to amend the Internal Revenue Code of 1986 to provide 
additional tax relief to families to increase the affordability of 
child care, and for other purposes; to the Committee on Finance.


                      THE CARING FOR CHILDREN ACT

  Mr. CHAFEE. Mr. President, I am pleased today to introduce the Caring 
for Children Act, legislation to help all families with their child 
care needs.

  I want to thank my colleagues who have worked so hard to put this 
bill together. Senator Hatch, who was a leader in the development of 
the child care block grant, and is always a stalwart supporter of 
children. Senator Snowe, who has worked on this issue for many years. 
Senator Roberts, who has taken an active interest in this issue. 
Senator Specter, who made an enormous contribution to the development 
of this bill. And Senator Susan Collins, who we are very fortunate to 
have on our child care proposal.
  Last night, in his State of the Union Address to the nation, 
President Clinton issued a challenge to Congress to develop child care 
legislation in a bipartisan manner with the Administration. Well, that 
is exactly what we are doing today.
  Our proposal is straightforward and far-reaching. It makes the 
current child care credit more equitable for lower and middle income 
families. And, for the first time, makes the credit available to 
families where one parent stays at home to care for the children. That 
is a critical step and an important change for families across America.
  Raising children in today's world is a true challenge. In many 
families, both parents must work in order to support the family. Often, 
the child care expenses consume all or most of one parent's income. How 
often do we hear the refrain, particularly from women, that after they 
pay for day care, there is little or nothing left of their wages.
  Another common complaint is from parents who desperately want to stay 
home and raise their children themselves--especially in those very 
critical, early years of childhood--but who simply cannot afford to 
forego that second income.
  The legislation we are introducing today responds to both of these 
concerns. We believe that parents should make their own decisions about 
who is going to care for their children. The government and the tax 
code should not be promoting one choice over another.
  By making more of the existing child care tax credit available to 
lower and middle income families, and making it available also to 
families where one parent stays at home, we are sending the message 
that the choice is yours, and we support your choice.
  Our bill makes several changes to the existing dependent care tax 
credit.

[[Page S116]]

First, the maximum credit percentage is increased from 30 percent to 50 
percent to provide more benefits to those most in need. Second, the 
income level at which the maximum credit begins to be reduced is moved 
from $10,000 to $30,000, so that more lower-income families will 
qualify for the maximum amount of assistance. Third, we propose to 
completely phase out the credit for wealthier families. Finally, 
families where one spouse stays at home to care for the children will 
be eligible for a credit similar to the one they would receive if both 
parents were working outside the home and the child was in daycare.
  We also acknowledge that we cannot solve the entire child care 
problem through the tax code alone. Many low-income families do not 
have taxable income, and therefore cannot benefit from a tax credit. 
The Child Care and Development Block Grant (CCDBG) provides critical 
funding to help these lower-income families--and I have been a strong 
supporter of the program. Recognizing the critical role CCDBG plays in 
subsidizing daycare for low-income families in the states, our proposal 
doubles the block grant over a five-year period.
  Of course, the problem with child care is not limited to just 
affordability. Many parents cannot find an available child care slot. 
Our proposal addresses this issue of accessibility by providing a tax 
credit to businesses to build or renovate on or near-site child care 
centers for their employees.
  Finally, there is the issue of quality daycare. Parents cannot be 
productive in the workplace if they are constantly worrying about the 
health and safety of their children in daycare. We have all read the 
horrifying stories in the newspapers about daycare facilities that are 
unsafe or unsanitary, about the poor record of enforcement of standards 
in many states.
  while we acknowledge that the federal government should not be 
setting standards for daycare providers, we do believe the states 
should set at least minimum health and safety standards and enforce 
them rigorously. Our legislation beefs up this enforcement by rewarding 
states with a good enforcement record and penalizing those with poor 
records.
  I am very proud of this legislation, and proud that this group was 
able to come together and produce this initiative. Child care is a 
problem that must be solved, and we are committed to doing that. I look 
forward to working with the President and my colleagues in the Congress 
to find workable, affordable solutions for all families.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1577

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

               SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

        TITLE I--TAX RELIEF TO INCREASE CHILD CARE AFFORDABILITY

Sec. 101. Expansion of dependent care tax credit.
Sec. 102. Promotion of dependent care assistance programs.
Sec. 103. Allowance of credit for employer expenses for child care 
              assistance.

                TITLE II--ENCOURAGING QUALITY CHILD CARE

   Subtitle A--Dissemination of Information About Quality Child Care

Sec. 201. Collection and dissemination of information.
Sec. 202. Grants for the development of a child care training 
              infrastructure.
Sec. 203. Authorization of appropriations.

 Subtitle B--Increased Enforcement of State Health and Safety Standards

Sec. 211. Enforcement of State health and safety standards.

  Subtitle C--Removal of Barriers to Increasing the Supply of Quality 
                               Child Care

Sec. 221. Increased authorization of appropriations for the Child Care 
              and Development Block Grant Act.
Sec. 222. Small business child care grant program.
Sec. 223. GAO report regarding the relationship between legal liability 
              concerns and the availability and affordability of child 
              care.

 Subtitle D--Quality Child Care Through Federal Facilities and Programs

Sec. 231. Providing quality child care in Federal facilities.
        TITLE I--TAX RELIEF TO INCREASE CHILD CARE AFFORDABILITY

     SEC. 101. EXPANSION OF DEPENDENT CARE TAX CREDIT.

       (a) Percentage of Employment-Related Expenses Determined by 
     Taxpayer Status.--Section 21(a)(2) of the Internal Revenue 
     Code of 1986 (defining applicable percentage) is amended to 
     read as follows:
       ``(2) Applicable percentage defined.--For purposes of 
     paragraph (1), the term `applicable percentage' means 50 
     percent reduced (but not below zero) by 1 percentage point 
     for each $1,500, or fraction thereof, by which the 
     taxpayers's adjusted gross income for the taxable year 
     exceeds $30,000.''.
       (b) Minimum Credit Allowed for Stay-at-Home Parents.--
     Section 21(e) of the Internal Revenue Code of 1986 (relating 
     to special rules) is amended by adding at the end the 
     following:
       ``(11) Minimum credit allowed for stay-at-home parents.--
     Notwithstanding subsection (d), in the case of any taxpayer 
     with one or more qualifying individuals described in 
     subsection (b)(1)(A) under the age of 4 at any time during 
     the taxable year, such taxpayer shall be deemed to have 
     employment-related expenses with respect to such qualifying 
     individuals in an amount equal to the greater of--
       ``(A) the amount of employment-related expenses incurred 
     for such qualifying individuals for the taxable year 
     (determined under this section without regard to this 
     paragraph), or
       ``(B) $150 for each month in such taxable year during which 
     such qualifying individual is under the age of 4.''.
       (c) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 1998.

     SEC. 102. PROMOTION OF DEPENDENT CARE ASSISTANCE PROGRAMS.

       (a) Promotion of Dependent Care Assistance Programs.--The 
     Secretary of Labor shall establish a program to promote 
     awareness of the use of dependent care assistance programs 
     (as described in section 129(d) of the Internal Revenue Code 
     of 1986) by employers.
       (b) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out the program under paragraph 
     (1) $1,000,000 for each of fiscal years 1999, 2000, 2001, and 
     2002.

     SEC. 103. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD 
                   CARE ASSISTANCE.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits) is amended by adding at the end the 
     following:

     ``SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.

       ``(a) Allowance of Credit.--For purposes of section 38, the 
     employer-provided child care credit determined under this 
     section for the taxable year is an amount equal to 20 percent 
     of the qualified child care expenditures of the taxpayer for 
     such taxable year.
       ``(b) Dollar Limitation.--The credit allowable under 
     subsection (a) for any taxable year shall not exceed 
     $100,000.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified child care expenditure.--
       ``(A) In general.--The term `qualified child care 
     expenditure' means any amount paid or incurred--
       ``(i) to acquire, construct, rehabilitate, or expand 
     property--

       ``(I) which is to be used as part of a qualified child care 
     facility of the taxpayer,
       ``(II) with respect to which a deduction for depreciation 
     (or amortization in lieu of depreciation) is allowable, and
       ``(III) which does not constitute part of the principal 
     residence (within the meaning of section 1034) of the 
     taxpayer or any employee of the taxpayer,

       ``(ii) for the operating costs of a qualified child care 
     facility of the taxpayer, including costs related to the 
     training of employees,
       ``(iii) under a contract with a qualified child care 
     facility to provide child care services to employees of the 
     taxpayer, or
       ``(iv) under a contract to provide child care resource and 
     referral services to employees of the taxpayer.
       ``(2) Exclusion for amounts funded by grants, etc.--The 
     term `qualified child care expenditure' shall not include any 
     amount to the extent such amount is funded by any grant, 
     contract, or otherwise by another person (or any governmental 
     entity).
       ``(3) Qualified child care facility.--
       ``(A) In general.--The term `qualified child care facility' 
     means a facility--
       ``(i) the principal use of which is to provide child care 
     assistance, and
       ``(ii) which meets the requirements of all applicable laws 
     and regulations of the State or local government in which it 
     is located, including, but not limited to, the licensing of 
     the facility as a child care facility.

     Clause (i) shall not apply to a facility which is the 
     principal residence (within the meaning of section 1034) of 
     the operator of the facility.
       ``(B) Special rules with respect to a taxpayer.--A facility 
     shall not be treated as a qualified child care facility with 
     respect to a taxpayer unless--

[[Page S117]]

       ``(i) enrollment in the facility is open to employees of 
     the taxpayer during the taxable year,
       ``(ii) the facility is not the principal trade or business 
     of the taxpayer unless at least 30 percent of the enrollees 
     of such facility are dependents of employees of the taxpayer, 
     and
       ``(iii) the use of such facility (or the eligibility to use 
     such facility) does not discriminate in favor of employees of 
     the taxpayer who are highly compensated employees (within the 
     meaning of section 414(q)).
       ``(d) Recapture of Acquisition and Construction Credit.--
       ``(1) In general.--If, as of the close of any taxable year, 
     there is a recapture event with respect to any qualified 
     child care facility of the taxpayer, then the tax of the 
     taxpayer under this chapter for such taxable year shall be 
     increased by an amount equal to the product of--
       ``(A) the applicable recapture percentage, and
       ``(B) the aggregate decrease in the credits allowed under 
     section 38 for all prior taxable years which would have 
     resulted if the qualified child care expenditures of the 
     taxpayer described in subsection (c)(1)(A) with respect to 
     such facility had been zero.
       ``(2) Applicable recapture percentage.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable recapture percentage shall be determined from the 
     following table:

                                                         The applicable
                                                              recapture
                                    ``If the recapture evpercentage is:
    Years 1-3....................................................100   
    Year 4........................................................85   
    Year 5........................................................70   
    Year 6........................................................55   
    Year 7........................................................40   
    Year 8........................................................25   
    Years 9 and 10................................................10   
    Years 11 and thereafter........................................0.  

       ``(B) Years.--For purposes of subparagraph (A), year 1 
     shall begin on the first day of the taxable year in which the 
     qualified child care facility is placed in service by the 
     taxpayer.
       ``(3) Recapture event defined.--For purposes of this 
     subsection, the term `recapture event' means--
       ``(A) Cessation of operation.--The cessation of the 
     operation of the facility as a qualified child care facility.
       ``(B) Change in ownership.--
       ``(i) In general.--Except as provided in clause (ii), the 
     disposition of a taxpayer's interest in a qualified child 
     care facility with respect to which the credit described in 
     subsection (a) was allowable.
       ``(ii) Agreement to assume recapture liability.--Clause (i) 
     shall not apply if the person acquiring such interest in the 
     facility agrees in writing to assume the recapture liability 
     of the person disposing of such interest in effect 
     immediately before such disposition. In the event of such an 
     assumption, the person acquiring the interest in the facility 
     shall be treated as the taxpayer for purposes of assessing 
     any recapture liability (computed as if there had been no 
     change in ownership).
       ``(4) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under subpart A, B, or D of this part.
       ``(C) No recapture by reason of casualty loss.--The 
     increase in tax under this subsection shall not apply to a 
     cessation of operation of the facility as a qualified child 
     care facility by reason of a casualty loss to the extent such 
     loss is restored by reconstruction or replacement within a 
     reasonable period established by the Secretary.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Aggregation rules.--All persons which are treated as 
     a single employer under subsections (a) and (b) of section 52 
     shall be treated as a single taxpayer.
       ``(2) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(3) Allocation in the case of partnerships.--In the case 
     of partnerships, the credit shall be allocated among partners 
     under regulations prescribed by the Secretary.
       ``(f) No Double Benefit.--
       ``(1) Reduction in basis.--For purposes of this subtitle--
       ``(A) In general.--If a credit is determined under this 
     section with respect to any property by reason of 
     expenditures described in subsection (c)(1)(A), the basis of 
     such property shall be reduced by the amount of the credit so 
     determined.
       ``(B) Certain dispositions.--If during any taxable year 
     there is a recapture amount determined with respect to any 
     property the basis of which was reduced under subparagraph 
     (A), the basis of such property (immediately before the event 
     resulting in such recapture) shall be increased by an amount 
     equal to such recapture amount. For purposes of the preceding 
     sentence, the term `recapture amount' means any increase in 
     tax (or adjustment in carrybacks or carryovers) determined 
     under subsection (d).
       ``(2) Other deductions and credits.--No deduction or credit 
     shall be allowed under any other provision of this chapter 
     with respect to the amount of the credit determined under 
     this section.
       ``(g) Termination.--This section shall not apply to taxable 
     years beginning after December 31, 2003.''.
       (b) Conforming Amendments.--
       (1) Section 38(b) of the Internal Revenue Code of 1986 is 
     amended--
       (A) by striking out ``plus'' at the end of paragraph (11),
       (B) by striking out the period at the end of paragraph 
     (12), and inserting a comma and ``plus'', and
       (C) by adding at the end the following new paragraph:
       ``(13) the employer-provided child care credit determined 
     under section 45D.''.
       (2) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 of such Code is amended by adding 
     at the end the following new item:

  ``Sec. 45D. Employer-provided child care credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

     TITLE II--ENCOURAGING QUALITY CHILD CARE

   Subtitle A--Dissemination of Information About Quality Child Care

     SEC. 201. COLLECTION AND DISSEMINATION OF INFORMATION.

       (a) Collection and Dissemination of Information.--The 
     Secretary of Health and Human Services shall, directly or 
     through a contract awarded on a competitive basis to a 
     qualified entity, collect and disseminate--
       (1) information concerning health and safety in various 
     child care settings that would assist--
       (A) the provision of safe and healthful environments by 
     child care providers; and
       (B) the evaluation of child care providers by parents; and
       (2) relevant findings in the field of early childhood 
     learning and development.
       (b) Information and Findings To Be Generally Available.--
       (1) Secretarial responsibility.--The Secretary of Health 
     and Human Services shall make the information and findings 
     described in subsection (a) generally available to States, 
     units of local governments, private nonprofit child care 
     organizations (including resource and referral agencies), 
     employers, child care providers, and parents.
       (2) Definition of generally available.--For purposes of 
     paragraph (1), the term ``generally available'' means that 
     the information and findings shall be distributed through 
     resources that are used by, and available to, the public, 
     including such resources as brochures, Internet web sites, 
     toll-free telephone information lines, and public and private 
     resource and referral organizations.

     SEC. 202. GRANTS FOR THE DEVELOPMENT OF A CHILD CARE TRAINING 
                   INFRASTRUCTURE.

       (a) Authority To Award Grants.--The Secretary of Health and 
     Human Services shall award grants to eligible entities to 
     develop distance learning child care training technology 
     infrastructures and to develop model technology-based 
     training courses for child care providers and child care 
     workers. The Secretary shall, to the maximum extent possible, 
     ensure that grants for the development of distance learning 
     child care training technology infrastructures are awarded in 
     those regions of the United States with the fewest training 
     opportunities for child care providers.
       (b) Eligibility Requirements.--To be eligible to receive a 
     grant under subsection (a), an entity shall--
       (1) develop the technological and logistical aspects of the 
     infrastructure described in this section and have the 
     capability of implementing and maintaining the 
     infrastructure;
       (2) to the maximum extent possible, develop partnerships 
     with secondary schools, institutions of higher education, 
     State and local government agencies, and private child care 
     organizations for the purpose of sharing equipment, technical 
     assistance, and other technological resources, including--
       (A) sites from which individuals may access the training;
       (B) conversion of standard child care training courses to 
     programs for distance learning; and
       (C) ongoing networking among program participants; and
       (3) develop a mechanism for participants to--
       (A) evaluate the effectiveness of the infrastructure, 
     including the availability and affordability of the 
     infrastructure, and the training offered the infrastructure; 
     and
       (B) make recommendations for improvements to the 
     infrastructure.
       (c) Application.--To be eligible to receive a grant under 
     subsection (a), an entity shall submit an application to the 
     Secretary at such time and in such manner as the Secretary 
     may require, and that includes--
       (1) a description of the partnership organizations through 
     which the distance learning programs will be disseminated and 
     made available;
       (2) the capacity of the infrastructure in terms of the 
     number and type of distance learning programs that will be 
     made available;
       (3) the expected number of individuals to participate in 
     the distance learning programs; and

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       (4) such additional information as the Secretary may 
     require.
       (d) Limitation On Fees.--No entity receiving a grant under 
     this section may collect fees from an individual for 
     participation in a distance learning child care training 
     program funded in whole or in part by this section that 
     exceed the pro rata share of the amount expended by the 
     entity to provide materials for the training program and to 
     develop, implement, and maintain the infrastructure (minus 
     the amount of the grant awarded by this section).
       (e) Rule of Construction.--Nothing in this section shall be 
     construed as requiring a child care provider to subscribe to 
     or complete a distance learning child care training program 
     made available by this section.

     SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated to carry out this 
     subtitle $50,000,000 for each of fiscal years 1999 through 
     2003.
 Subtitle B--Increased Enforcement of State Health and Safety Standards

     SEC. 211. ENFORCEMENT OF STATE HEALTH AND SAFETY STANDARDS.

       (a) Identification of State Inspection Rate.--
       (1) In general.--Section 658E(c)(2)(G) of the Child Care 
     and Development Block Grant Act of 1990 (42 U.S.C. 
     9858c(2)(G)) is amended by striking the period and inserting 
     ``, and provide the percentage of completed child care 
     provider inspections that were required under State law for 
     each of the 2 preceding fiscal years.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     applies to State plans under the Child Care and Development 
     Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) on and after 
     September 1, 1998.
       (b) Increased or Decreased Allotments.--Section 658O(b) of 
     the Child Care and Development Block Grant Act of 1990 (42 
     U.S.C. 9858m(b)) is amended--
       (1) in paragraph (1), in the matter preceding subparagraph 
     (A), by inserting ``, subject to paragraph (5),'' after 
     ``shall''; and
       (2) by adding at the end the following:
       ``(5) Increased or decreased allotment based on state 
     inspection rate.--
       ``(A) Increased allotment for fiscal years 1999, 2000, and 
     2001.--
       ``(i) In general.--Subject to clause (iii), for fiscal 
     years 1999, 2000, and 2001, the allotment determined for a 
     State under paragraph (1) for each such fiscal year shall be 
     increased by an amount equal to 10 percent of such allotment 
     for the fiscal year involved with respect to any State--

       ``(I) that certifies to the Secretary that the State has 
     not reduced the scope of any State child care health or 
     safety standards or requirements that were in effect in 
     calendar year 1996; and
       ``(II) that, with respect to the preceding fiscal year, had 
     a percentage of completed child care provider inspections (as 
     required to be reported under section 658E(c)(2)(G)), that 
     equaled or exceeded the target inspection and enforcement 
     percentage specified under clause (ii) for the fiscal year 
     for which the allotment is to be paid.

       ``(ii) Target inspection and enforcement percentage.--For 
     purposes of clause (i)(II), the target inspection and 
     enforcement percentage is--

       ``(I) for fiscal year 1999, 75 percent;
       ``(II) for fiscal year 2000, 80 percent; and
       ``(III) for fiscal year 2001, 100 percent.

       ``(iii) Pro rata reductions if insufficient 
     appropriations.--The Secretary shall make pro rata reductions 
     in the percentage increase otherwise required under clause 
     (i) for a State allotment for a fiscal year as necessary so 
     that the aggregate of all the allotments made under this 
     section do not exceed the amount appropriated for that fiscal 
     year under section 658B.
       ``(B) Decreased allotment for fiscal years 2000 and 2001.--
       ``(i) In general.--The allotment determined for a State 
     under paragraph (1) for each of fiscal years 2000 and 2001 
     shall be decreased by an amount equal to 10 percent of such 
     allotment for the fiscal year involved with respect to any 
     State that, with respect to the preceding fiscal year, had a 
     percentage of completed child care provider inspections (as 
     required to be reported under section 658E(c)(2)(G)) that was 
     below the minimum inspection and enforcement percentage 
     specified under clause (ii) for the fiscal year for which the 
     allotment is to be paid.
       ``(ii) Minimum inspection and enforcement percentage.--For 
     purposes of clause (i), the minimum inspection and 
     enforcement percentage is--

       ``(I) for fiscal year 2000, 50 percent; and
       ``(II) for fiscal year 2001, 75 percent.

       ``(iii) Requirement to expend State funds to replace 
     reduction.--If the allotment determined for a State for a 
     fiscal year is reduced by reason of clause (i), the State 
     shall, during the immediately succeeding fiscal year, expend 
     additional State funds under the State plan funded under this 
     subchapter by an amount equal to the amount of such 
     reduction.''.
  Subtitle C--Removal of Barriers to Increasing the Supply of Quality 
                               Child Care

     SEC. 221. INCREASED AUTHORIZATION OF APPROPRIATIONS FOR THE 
                   CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT.

       Section 658B of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858) is amended to read as follows:

     ``SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     subchapter--
       ``(1) for each of fiscal years 1996 through 1998, 
     $1,000,000,000;
       ``(2) for fiscal year 1999, $1,500,000,000;
       ``(2) for fiscal year 2000, $1,750,000,000;
       ``(2) for fiscal year 2001, $2,000,000,000;
       ``(2) for fiscal year 2002, $2,250,000,000; and
       ``(2) for fiscal year 2003, $2,500,000,000.''.

     SEC. 222. SMALL BUSINESS CHILD CARE GRANT PROGRAM.

       (a) Establishment.--The Secretary of Health and Human 
     Services (in this section referred to as the ``Secretary'') 
     shall establish a program to award grants to States to assist 
     States in providing funds to encourage the establishment and 
     operation of employer operated child care programs.
       (b) Application.--To be eligible to receive a grant under 
     this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including an assurance that the funds required under 
     subsection (e) will be provided.
       (c) Amount of Grant.--The Secretary shall determine the 
     amount of a grant to a State under this section based on the 
     population of the State as compared to the population of all 
     States.
       (d) Use of Funds.--
       (1) In general.--A State shall use amounts provided under a 
     grant awarded under this section to provide assistance to 
     small businesses located in the State to enable the small 
     businesses to establish and operate child care programs. Such 
     assistance may include--
       (A) technical assistance in the establishment of a child 
     care program;
       (B) assistance for the start up costs related to a child 
     care program;
       (C) assistance for the training of child care providers;
       (D) scholarships for low-income wage earners;
       (E) the provision of services to care for sick children or 
     to provide care to school aged children;
       (F) the entering into of contracts with local resource and 
     referral or local health departments;
       (G) care for children with disabilities; or
       (H) assistance for any other activity determined 
     appropriate by the State.
       (2) Application.--To be eligible to receive assistance from 
     a State under this section, a small business shall prepare 
     and submit to the State an application at such time, in such 
     manner, and containing such information as the State may 
     require.
       (3) Preference.--
       (A) In general.--In providing assistance under this 
     section, a State shall give priority to applicants that 
     desire to form a consortium to provide child care in 
     geographic areas within the State where such care is not 
     generally available or accessible.
       (B) Consortium.--For purposes of subparagraph (A), a 
     consortium shall be made up of 2 or more entities which may 
     include businesses, nonprofit agencies or organizations, 
     local governments, or other appropriate entities.
       (4) Limitation.--With respect to grant funds received under 
     this section, a State may not provide in excess of $100,000 
     in assistance from such funds to any single applicant.
       (e) Matching Requirement.--To be eligible to receive a 
     grant under this section a State shall provide assurances to 
     the Secretary that, with respect to the costs to be incurred 
     by an entity receiving assistance in carrying out activities 
     under this section, the entity will make available (directly 
     or through donations from public or private entities) non-
     Federal contributions to such costs in an amount equal to--
       (1) for the first fiscal year in which the entity receives 
     such assistance, not less than 50 percent of such costs ($1 
     for each $1 of assistance provided to the entity under the 
     grant);
       (2) for the second fiscal year in which an entity receives 
     such assistance, not less than 66\2/3\ percent of such costs 
     ($2 for each $1 of assistance provided to the entity under 
     the grant); and
       (3) for the third fiscal year in which an entity receives 
     such assistance, not less than 75 percent of such costs ($3 
     for each $1 of assistance provided to the entity under the 
     grant).
       (f) Requirements of Providers.--To be eligible to receive 
     assistance under a grant awarded under this section a child 
     care provider shall comply with all applicable State and 
     local licensing and regulatory requirements and all 
     applicable health and safety standards in effect in the 
     State.
       (g) Administration.--
       (1) State responsibility.--A State shall have 
     responsibility for administering the grant awarded under this 
     section and for monitoring entities that receive assistance 
     under such grant.
       (2) Audits.--A State shall require each entity receiving 
     assistance under a grant awarded under this section to 
     conduct an annual audit with respect to the activities of the 
     entity. Such audits shall be submitted to the State.
       (3) Misuse of funds.--
       (A) Repayment.--If the State determines, through an audit 
     or otherwise, that an entity receiving assistance under a 
     grant awarded under this section has misused the assistance, 
     the State shall notify the Secretary of the misuse. The 
     Secretary, upon such a notification, may seek from such an 
     entity the repayment of an amount equal to the amount of any 
     misused assistance plus interest.

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       (B) Appeals process.--The Secretary shall by regulation 
     provide for an appeals process with respect to repayments 
     under this paragraph.
       (h) Reporting Requirements.--
       (1) 2-year study.--
       (A) In general.--Not later than 2 years after the date on 
     which the Secretary first provides grants under this section, 
     the Secretary shall conduct a study to determine--
       (i) the capacity of entities to meet the child care needs 
     of communities within a State;
       (ii) the kinds of partnerships that are being formed with 
     respect to child care at the local level; and
       (iii) who is using the programs funded under this section 
     and the income levels of such individuals.
       (B) Report.--Not later than 28 months after the date of 
     enactment of this Act, the Secretary shall prepare and submit 
     to the appropriate committees of Congress a report on the 
     results of the study conducted in accordance with 
     subparagraph (A).
       (2) 4-year study.--
       (A) In general.--Not later than 4 years after the date on 
     which the Secretary first provides grants under this section, 
     the Secretary shall conduct a study to determine the number 
     of child care facilities funded through entities that 
     received assistance through a grant made under this section 
     that remain in operation and the extent to which such 
     facilities are meeting the child care needs of the 
     individuals served by such facilities.
       (B) Report.--Not later than 52 months after the date of 
     enactment of this Act, the Secretary shall prepare and submit 
     to the appropriate committees of Congress a report on the 
     results of the study conducted in accordance with 
     subparagraph (A).
       (i) Definition.--As used in this section, the term ``small 
     business'' means an employer who employed an average of at 
     least 2 but not more than 50 employees on business days 
     during the preceding calendar year.
       (j) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $60,000,000 for 
     the period of fiscal years 1999 through 2001. With respect to 
     the total amount appropriated for such period in accordance 
     with this subsection, not more than $5,000,000 of that amount 
     may be used for expenditures related to conducting 
     evaluations required under, and the administration of, this 
     section.
       (k) Termination of Program.--The program established under 
     subsection (a) shall terminate on September 30, 2002.

     SEC. 223. GAO REPORT REGARDING THE RELATIONSHIP BETWEEN LEGAL 
                   LIABILITY CONCERNS AND THE AVAILABILITY AND 
                   AFFORDABILITY OF CHILD CARE.

       Not later than 6 months after the date of enactment of this 
     Act, the Comptroller General of the United States shall 
     report to Congress regarding whether and, if so, the extent 
     to which, concerns regarding potential legal liability 
     exposure inhibit the availability and affordability of child 
     care. The report shall include an assessment of whether such 
     concerns prevent--
       (1) employers from establishing on or near-site child care 
     for their employees;
       (2) schools or community centers from allowing their 
     facilities to be used for on-site child care; and
       (3) individuals from providing professional, licensed child 
     care services in their homes.
 Subtitle D--Quality Child Care Through Federal Facilities and Programs

     SEC. 231. PROVIDING QUALITY CHILD CARE IN FEDERAL FACILITIES.

       (a) Definition.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of General Services.
       (2) Executive agency.--The term ``Executive agency'' has 
     the meaning given the term in section 105 of title 5, United 
     States Code, but does not include the Department of Defense.
       (3) Executive facility.--The term ``executive facility'' 
     means a facility that is owned or leased by an Executive 
     agency.
       (4) Federal agency.--The term ``Federal agency'' means an 
     Executive agency, a judicial office, or a legislative office.
       (5) Judicial facility.--The term ``judicial facility'' 
     means a facility that is owned or leased by a judicial 
     office.
       (6) Judicial office.--The term ``judicial office'' means an 
     entity of the judicial branch of the Federal Government.
       (7) Legislative facility.--The term ``legislative 
     facility'' means a facility that is owned or leased by a 
     legislative office.
       (8) Legislative office.--The term ``legislative office'' 
     means an entity of the legislative branch of the Federal 
     Government.
       (b) Executive Branch Standards and Enforcement.--
       (1) State and local licensing requirements.--
       (A) In general.--The Administrator shall issue regulations 
     requiring any entity operating a child care center in an 
     executive facility to comply with applicable State and local 
     licensing requirements related to the provision of child 
     care.
       (B) Compliance.--The regulations shall require that, not 
     later than 6 months after the date of enactment of this Act--
       (i) the entity shall comply, or make substantial progress 
     (as determined by the Administrator) toward complying, with 
     the requirements; and
       (ii) any contract for the operation of such a child care 
     center shall include a condition that the child care be 
     provided in accordance with the requirements.
       (2) Evaluation and enforcement.--The Administrator shall 
     evaluate the compliance of the entities described in 
     paragraph (1) with the regulations issued under that 
     paragraph. The Administrator may conduct the evaluation of 
     such an entity directly, or through an agreement with another 
     Federal agency, other than the Federal agency for which the 
     entity is providing child care. If the Administrator 
     determines, on the basis of such an evaluation, that the 
     entity is not in compliance with the regulations, the 
     Administrator shall notify the Executive agency.
       (c) Legislative Branch Standards and Enforcement.--
       (1) State and local licensing requirements and 
     accreditation standards.--The Architect of the Capitol shall 
     issue regulations for entities operating child care centers 
     in legislative facilities, which shall be the same as the 
     regulations issued by the Administrator under subsection 
     (b)(1), except to the extent that the Architect may 
     determine, for good cause shown and stated together with the 
     regulations, that a modification of such regulations would be 
     more effective for the implementation of the requirements and 
     standards described in such paragraphs.
       (2) Evaluation and enforcement.--Subsection (b)(2) shall 
     apply to the Architect of the Capitol, entities operating 
     child care centers in legislative facilities, and legislative 
     offices. For purposes of that application, references in 
     subsection (b)(2) to regulations shall be considered to be 
     references to regulations issued under this subsection.
       (d) Judicial Branch Standards and Enforcement.--
       (1) State and local licensing requirements and 
     accreditation standards.--The Director of the Administrative 
     Office of the United States Courts shall issue regulations 
     for entities operating child care centers in judicial 
     facilities, which shall be the same as the regulations issued 
     by the Administrator under subsection (b)(1), except to the 
     extent that the Director may determine, for good cause shown 
     and stated together with the regulations, that a modification 
     of such regulations would be more effective for the 
     implementation of the requirements and standards described in 
     such paragraphs.
       (2) Evaluation and enforcement.--Subsection (b)(2) shall 
     apply to the Director described in paragraph (1), entities 
     operating child care centers in judicial facilities, and 
     judicial offices. For purposes of that application, 
     references in subsection (b)(2) to regulations shall be 
     considered to be references to regulations issued under this 
     subsection.
       (e) Application.--Notwithstanding any other provision of 
     this section, if 3 or more child care centers are operated in 
     facilities owned or leased by a Federal agency, the head of 
     the Federal agency may carry out the responsibilities 
     assigned to the Administrator under subsection (b)(2), the 
     Architect of the Capitol under subsection (c)(2), or the 
     Director described in subsection (d)(2) under such 
     subsection, as appropriate.

  Mr. SPECTER. Mr. President, I have sought recognition to join my 
colleagues in introducing the ``Caring for Children Act,'' which will 
ease the financial burden of child care for American families--for 
those parents who work, and for those who choose to stay home to raise 
their children for a period of time. The sponsors of this legislation 
recognize the importance of affordable quality child care to the 
successful development of our children.
  Our bill would expand the Dependent Care tax credit to make it more 
accessible to families who need it, double the authorization for the 
Child Care Development Block Grant, and provide grants to small 
businesses to create or enhance child care facilities for their 
employees. This bill also includes provisions from the proposal I 
introduced last year with my colleague, Congressman Jon Fox, ``The 
Affordable Child Care Act,'' which provides a tax credit for employers 
who provide on-site or site-adjacent child care to their employees in 
order to reduce the child care expenses of the employee.
  Not all families choose the same option for child care. Many families 
rely on relatives, centers operated by churches and other religious 
organizations, centers at or near their workplace, or make other 
arrangements to provide care for their children while they work. In 
light of the diverse needs for child care in America, this bill 
represents a good start toward expanding the choices for American 
parents. And, any such legislation must recognize that there is a need 
to provide some relief to families where one parent stays at home.
  The need for affordable and accessible day care is critical given the 
increasing numbers of working parents and dual-income families in the 
United States. According to the Bureau of the Census, in 1975, 31 
percent of married

[[Page S120]]

mothers with a child younger than age one participated in the labor 
force. By 1995, that figure had risen to 59 percent. Almost 64 percent 
of married mothers and 53 percent of single mothers with children 
younger than age six participated in the labor force in 1995.
  The cost of child care for families is also significant. Licensed day 
care centers in some urban areas cost as much as $200 per week, and the 
disparity in costs and availability of child care between urban and 
rural grows greater every day. For families which need or choose to 
have both parents work outside the home, the burden of making child 
care decisions is great. These figures serve to underscore the need for 
action on the part of the Federal government to provide the necessary 
assistance to our nation's working families.
  As Chairman of the Labor, Health and Human Services, and Education 
Appropriations Subcommittee, I am pleased that this legislation would 
build on an existing federal child care program by authorizing an 
additional $5 billion over five years to the Child Care Development 
Block Grant program, bringing total spending for this program to $2.5 
billion annually by FY2002. The CCDBG program which works well in 
assisting low-income families acquire child care and helped over 93,000 
Pennsylvania families last year. By increasing the authorization, we 
can help even more families without creating a new entitlement program.
  Our legislation will also require States to create and enforce safety 
and health standards in child care facilities, and provide money for 
the Department of Health and Human Services to disseminate information 
to parents and providers about quality child care, through brochures, 
toll-free hotlines, the Internet, and other technological assistance.
  The ``Caring for Children Act'' complements my recent efforts to 
assist working families in the context of welfare reform and children's 
health insurance. When Congress debated welfare reform in 1995 and 
1996, I worked to ensure that adequate funds were provided for child 
care, a critical component for welfare mothers who would be required to 
work to receive new limited welfare benefits. I am pleased that the 
welfare reform bill that became law provides $20 billion in child care 
funding over a six year period. Similarly, I was pleased to participate 
in the bipartisan effort in 1997 to enact legislation to provide $24 
billion over the next five years for States to establish or broaden 
children's health insurance programs.
  In conclusion, Mr. President, I believe that it is critical that the 
105th Congress not adjourn without enacting legislation to assist 
families in their ability to afford safe, quality child care for their 
children, either at home with a parent or another arrangement. Our 
legislation will provide peace of mind to millions of American families 
struggling to balance career and child raising. I urge my colleagues to 
join me in cosponsoring this important legislation, and I urge its 
swift adoption.
  Mr. HATCH. Mr. President, eight years ago, Congress passed and 
President Bush signed the landmark Child Care and Development Block 
Grant Act. I was proud to have helped lead the effort, and I am proud 
of what our states have been able to accomplish since its 
implementation.
  But, it is also clear that we must do more to help families. In my 
home state of Utah, more than half of the children under age 6 have 
either their only parent or both parents in the workforce.
  The ``Child Care Connection,'' a four-county resource and referral 
program, reported last year that there were five major Salt Lake area 
zip codes that had zero openings for infants.
  Utah child care officials have reported that there are too few slots 
generally for infants and toddlers and for special needs children.
  It is my pleasure to be here today with Senators Chafee, Snowe, 
Roberts, and Specter, each of whom has a long track record of 
involvement in child care issues. We believe that we have developed a 
comprehensive, yet realistic, child care proposal that will augment the 
ability of the child care block grant to serve families in each state.
  Of particular note, this proposal recognizes the choice that many 
families make to have one parent remain at home as primary caregiver. 
As important as it is to assist low- and middle-income families with 
necessary out-of-home child care expenses--and our proposal will 
increase the Dependent Care Tax Credit for such families--it is also 
important for us to realize the value of a parent in the home and that 
the sacrifice of a second income is also a child care expense.
  Additionally, our proposal will not create major new programs in need 
of permanent funding. We do not intend to spend federal dollars on 
bigger bureaucracy in the name of expanding child care. We want 
available resources to be put directly in the hands of parents through 
tax credits and in the hands of states to address specific gaps in 
availability and enforcement of health and safety standards.
  Our bill takes a very balanced approach to the issues of 
affordability, availability, and quality.
  Child care costs, of course, are a significant part of a family 
budget. The average cost of child care has been estimated at over $4000 
per child. This is a substantial increase from the $3000 average it was 
when we enacted the Child Care and Development Block Grant eight years 
ago. Clearly, low- and middle-income taxpayers devote a larger share of 
their earnings to child care.
  And, at a time when we are trying to move families off of public 
assistance and into employment, child care has to be a key element of 
transitional support.
  Our bill increases the Dependent Care Tax Credit (DCTC) for working 
parents. Our bill raises the maximum credit from 30 percent to 50 
percent. And, it raises the maximum income level for the maximum credit 
from $10,000 to $30,000. No change is made in the maximum allowable 
expenses of $2400 for one child and $4800 for two or more children.
  Thus, a family in St. George, Utah, earning $30,000, with two 
children, would receive a tax credit of $2400. Under current law, this 
family's credit would be $960.
  Both our bill and the proposal made by the Clinton administration 
begin to gradually reduce the percentage of the credit at $30,000, but 
the ``Caring for Children Act'' reduces the credit at a slower rate. 
Thus, families earning between $30,000 and $75,000 will receive a 
bigger tax benefit than under either President Clinton's proposal or 
current law.
  We can afford to provide larger benefits for this income group 
because we have recommended a phase-out of the credit entirely for 
families with incomes of $105,000 or more. Under current law, there is 
no income limit for eligibility for the DCTC. This is one tax credit 
that wealthy taxpayers do not need.
  But, our bill, the ``Caring for Children Act,'' goes one step 
further. The bill I have developed along with Senators Chafee, Snowe, 
Roberts, and Specter would, for the first time, recognize child care 
provided by a parent.

  Our bill would extend eligibility for the Dependent Care Tax Credit 
to families with young children in which one parent remains at home as 
caregiver. How would this work? The bill would impute monthly child 
care expenses of $150 to families with children age 3 and under. For 
example, a family in Morgan, Utah, earning $30,000 a year and having 
one or more children under age 3, would receive a $900 tax credit. It 
works this way: 50% credit $150 monthly imputed expenses 12 months = 
$900.
  I would like to see this tax break be even more generous. I will work 
toward that end. But, given our budget realities, this ground-breaking 
extension of the DCTC is feasible. And, I believe it is an essential 
component of the ``Caring for Children Act.''
  It is high time we recognize the value of stay-at-home parents. This 
tax credit in no way offsets their work or their monetary sacrifices; 
but it does, at last, give a mother or father in the home standing in 
our tax code. It transforms the Dependent Care Tax Credit from an 
employment-based credit to a child-based credit.
  These two changes to the DCTC will put money--their own money I might 
add--back into the pockets of America's families.
  The ``Caring for Children Act'' also deals with the issue of 
availability. As I mentioned, there are areas where child care--
particularly infant care,

[[Page S121]]

after school care, or care for special needs children--is tough to 
find. The substantial increase we are recommending for the Child Care 
and Development Block Grant (CCDBG) will provide states with the 
ability to address shortages as well as to increase support to low-
income families.
  President Clinton has recommended solving the availability problem by 
creating two new programs, one for after school care and one geared to 
early childhood. While I can appreciate the President's concern that 
there may be few choices out there for parents who depend on out-of-
home care, I do not believe it makes sense to create new programs when 
the CCDBG already permits such programs. I think the answer is not to 
second guess how the states have chosen to allocate their scarce 
resources under the block grant, but rather to give the states some 
additional resources so that they can better meet their own priorities.
  We are proposing a $5 billion increase in the CCDBG over five years. 
These additional resources will give states much more flexibility in 
their planning. States will be able to provide subsidies for a greater 
number of the eligible population; they will be able to finance child 
care programs in underserved areas of the state; they will be able to 
address particular shortages. And, they will be able to better enforce 
critical health and safety standards.
  I am a firm believer that states should be able to set their own 
rules and regulations for child care providers. I do not believe that 
the federal government can or should interfere with child care 
affordability in our various states by setting national standards that 
are unrealistic. Moreover, to the extent that child care standards 
reflect the values as well as the economic conditions of any given 
state, the federal government has no business micromanaging them.
  But, I also believe that states that participate in the block grant 
program--and that would be all of them--have an obligation to ensure 
that children are in safe and healthy environments. And, they have an 
obligation to see that such standards are adequately enforced. A 
sanitary standard is no standard at all if it is unenforced.
  It may not matter where you have your car washed, but it absolutely 
matters who is taking care of your child.
  Therefore, the ``Caring for Children Act'' puts some teeth into the 
requirement for inspections under the block grant. A state that 
inspects a threshold number of facilities subject to inspection will be 
eligible for a 10 percent bonus. After the second year, a state failing 
to inspect a minimum number of child care sites will be subject to a 10 
percent penalty.
  Additionally, our bill authorizes $50 million a year for HHS to 
undertake two important quality enhancing activities. First, more 
information about child care can be made available to parents. Consumer 
information about automobiles, credit cards, and well-baby care are 
available. I believe parents would welcome more information on what to 
look for in a child care center or family-based care setting. I also 
believe that parents are the best form of accountability in child care. 
Second, to assist providers and child care workers enhance the quality 
of their services, the bill would enable HHS to award grants for the 
development of a technology infrastructure for distance learning.
  Many child care providers are in rural areas. Traditional training in 
the form of workshops and college classes are not practical. Programs 
for child care providers that could be developed and made available 
through distance learning, however, could prove a viable alternative as 
well as a valued help. My home state of Utah, I might add, has been a 
leader in the distance learning arena. I have no doubt that such a 
format would be eagerly received in my state.
  The ``Caring for Children Act'' contains several other provisions of 
interest. In order to test the effectiveness of small business 
consortia as employer-based child care providers, the bill authorizes 
$60 million over three years for demonstration grants.
  To increase the awareness of the existing Dependent Care Assistance 
Program (DCAP), a tax provision that permits employees to authorize 
their employers to withhold up to $5000 of the employee's salary in a 
DCAP account for child care expenses to be paid by the employer, the 
``Caring for Children Act'' authorizes $1 million a year for the next 
five years to the Secretary of Labor to conduct outreach to both 
employers and employees about this program and its benefits.
  Finally, the bill would require that child care facilities located in 
federal buildings for federal employees be held to the same quality 
standards that apply to child care programs in the state in which the 
federal facility is located.
  I believe the measure we have introduced is a balanced approach. It 
does not depend entirely on the tax code to address child care issues, 
nor does it depend solely on federal spending.
  It does not concentrate benefits on only one income group. The DCTC 
expansion is geared particularly to assist the middle class. The 
increase in the CCDBG is targeted to subsidies for low-income families.
  It recognizes that we have to make an investment in our children, but 
it does not propose new federal mandatory spending programs that can 
become wildly expensive.
  Our bill gives careful attention to each of the three cornerstones of 
child care: affordability, availability, and quality.
  And, for the first time, federal child care legislation will not 
ignore those families who choose to forego one income to have a parent 
remain at home.
  I want to say again that I am proud to sponsor this bill with my 
colleagues, Senators Chafee, Snowe, Roberts, and Specter. I urge other 
senators to join us in this legislation.
  Mr. ROBERTS. Mr. President, I am pleased and honored to join with my 
colleagues to introduce legislation to help meet the child care 
challenges facing families around the nation. Our bill is entitled the 
``Caring for Children Act.''
  Child care, in the home when possible and outside the home when both 
parents work, goes right to the heart of keeping families strong. 
Unfortunately, finding quality, affordable child care is one of the 
most pressing problems for families in Kansas and around the country.
  The ``Caring for Children Act'' takes the first steps to address this 
challenge through a responsible approach. This legislation expands 
child care opportunities without expanded government costs or intrusion 
in our lives. This legislation builds into the existing network without 
adding more government intervention or mandates. This legislation will 
help families that have two working parents and families that have a 
stay-at-home parent. This legislation will help to increase the supply 
of quality of child care.
  First, in order to provide additional tax relief and increase 
affordability of child care, we expand the Dependent Care Tax Credit 
(DCTC) by raising the income level to $30,000 at which families become 
eligible for the maximum tax credit. We also raise the maximum 
percentage of child care expenses that parents can deduct to 50 
percent. These changes make the DCTC more realistic for families that 
face increasing child care costs.
  Increasing the income level and the percentage of child care expenses 
that are deductible will help families where both parents work. But, we 
also recognize that families who choose to have one parent remain at 
home have child care expenses as well. Therefore, we extend eligibility 
for the DCTC to families with a stay-at-home parent. This provides 
greater options to more families and leaves child care choices where 
they should be--with the family. In order to target this credit to 
parents who need it the most and meet our fiscal responsibilities, the 
credit is phased out for higher income wage earners.
  Small businesses play a critical role in providing child care options 
to millions of working parents. Unfortunately, small businesses 
generally do not have the resources required to start up and support a 
child care center. The ``Caring for Children Act'' includes a short-
term, flexible grant program to encourage small businesses to work 
together to provide child care services for employees. This program is 
more of a demonstration project that will sunset at the end of three 
years. In the meantime, small businesses will be eligible for grants up 
to $100,000 for start-up costs, training, scholarships, or other 
related activities. Businesses

[[Page S122]]

must continue to meet state quality and health standards. Businesses 
will be required to match federal funds to encourage self-sustaining 
facilities well into the future.
  ``Caring for Children'' also includes provisions to provide a tax 
credit of expenses up to $500,000 for employers who choose to 
construct, renovate, or operate on- or near-site child care facilities 
for their employees. And, ``Caring for Children'' includes funding to 
promote greater availability of the Dependent Care Assistance Program 
(DCAP) for families with children. This will allow the Department of 
Labor to conduct outreach to businesses to promote awareness of the 
DCAP program.
  All children deserve quality care. Although all states have health 
and safety standards in place, many times these regulations are not 
enforced. ``Caring for Children'' includes incentives for states to 
improve their inspection efforts and ensure that facilities are in 
compliance with their own state standards. The bill also authorizes 
funding for the Department of Health and Human Services to get more 
information in the hands of parents and help child care providers 
access child care training programs.
  Finally, we authorize additional funding for the Child Care and 
Development Block Grant. This program sends federal assistance to 
states, permitting them to allocate resources where they are most 
needed in the state. We maintain maximum flexibility and allow states 
to make decisions about how to address their own child care challenges.
  Child care is an issue that impacts each and every one of us. While 
parents continue to struggle to meet the constant demand of work and 
family, we must continue to do our part to expand child care options 
and protect our nation's most valuable resource, our children. I look 
forward to working with all of my colleagues in this important effort.
  Ms. SNOWE. Thank you, Mr. President, I am pleased to join with my 
colleagues, Senators Hatch, Roberts, Specter, and Chafee to introduce a 
bill that I believe is an historic opportunity to help ensure the well-
being of our children and by extension the very well-being of our 
nation: the Caring for Children Act.
  I come before you as a veteran on child care issues who has worked to 
address child care throughout my political life, and was the lead 
Republican cosponsor on the Act for Better Child Care in 1989--the bill 
which set the stage for the bipartisan package that was adopted by the 
101st Congress. Since that time we have advanced the ball in profound 
ways that reflect the changing nature of the American family, but our 
work must never cease when it comes to our children. We must build on 
our laurels, not rest on them: and that is precisely what this bill 
does.
  Consider the challenge: In California alone in 1997, 500,000 children 
were already on waiting lists for federal child care in--half a 
million! Now, it is estimated that, as welfare reform proceeds, some 2 
million parents across America will join the workforce and their 
children will require child care. A GAO report from May of last year 
determined that in Chicago, for example, the known supply of child care 
would only meet 14 percent of the need for infant child care in the 
first year of welfare reform implementation. And within three years, 3 
out of 4 American women with children under 5 will be working and in 
need of child care.
  With the perspective of years spent on this issue, I have come to the 
conclusion that what American parents need most are choices. The 
decision of how to care for a young child is a deeply personal and 
difficult one. Many feel handcuffed by economic concerns, others worry 
about the safety of child care, but all face different circumstances 
that make the decision making process unique.
  Given the tremendous challenges of raising children today, and the 
extraordinary range of issues facing families, I believe the federal 
government should not be in the business of encouraging one choice over 
another. Instead the government's role must be to ensure that families 
have viable options and that the basis for decisions is the best 
interests of the child. If we are to care about children we must care 
about choices, and not politicize the issue with partisanship or 
ideology.
  That is the spirit in which we crafted our bill. Because it is not 
about pitting one group against another. It is not about starting a 
``mommy war''. It is about helping parents do the best they can for 
their children--no matter what choice they make.
  The reality is that, despite our best efforts to date to make 
quality, affordable child care accessible, the myriad pressures facing 
American families today still imperil their ability to provide the best 
possible care for their children. In my home state of Maine, one out of 
every five Mainers are working multiple jobs. Across the country, 63 
percent of women with children under age six are in the workforce, and 
as a result, over 12 million children are cared for by someone other 
than a parent during working hours. In Maine, there are 42,000 women in 
the labor force with children under 6, and 64,000 with children between 
the ages of 6 and 17.
  At the same time, child care costs can range from $4,000 to $9,000 
annually--with families earning less than $14,000 per year paying more 
than one quarter of their income in child support. As a result, 
families are often forced to make a choice between two unacceptable 
options: find care for their children that may not be safe or 
appropriate, or stay home and hope that they can somehow still put food 
on the table.
  Our bill respects parents' decisions and expands the choices 
available in a number of innovative ways. By expanding the Dependent 
Care Tax Credit, we make it more affordable for parents to choose 
quality child care, but we also leave the door open for a parent to 
stay at home with their child. And we target our tax benefits to those 
who need them most: working American families.
  For two-working parent families with child care expenses, we raise 
the income level at which parents can take the maximum credit from 
$10,000 to $30,000, allowing more parents to take advantage of the 
maximum tax credit. In addition, we raise the percentage of child care 
expenses that parents can put toward their credit to 50% (up from 40% 
under current law) of expenses up to $2400 for one child, or $4800 for 
two or more children. The credit will phase down 1% for every $1500 of 
income above $30,000, phasing out completely for families earning over 
$105,000 per year. Under this new scheme, the maximum tax credit will 
be $1200 for one child (up from $720), or $2400 for two or more 
children (up from $480).
  For the first time, parents who forgo an income to stay at home to 
take care of a child between the ages of 0-3 will be able to take 
advantage of the Dependent Care Tax Credit. By attributing child care 
expenses to stay at home parents of $150 per month, they will be 
eligible for a maximum tax credit of up to $900 per year, depending on 
their income. Applying the tax credit to parents who wish to stay 
home for children ages 0-3 acknowledges that parents of infants and 
toddlers often face the toughest decisions between working or staying 
at home, particularly in light of recent research in the area of early 
childhood development which demonstrates that care from one or two 
consistent, loving and stimulating caregivers during these earliest 
years is crucial to brain development.

  The Caring for Children Act will also help defray the considerable 
costs of child care for low-income families by doubling funding for the 
Child Care and Development Block Grant, to the time of $5 billion. This 
will create more child care slots for low-income families and double 
the amount of money devoted to improving quality, again leaving more 
options for parents.
  And we also address the issue safety, because parents are still 
rightfully concerned about safety. According to a US News and World 
Report article last August, a query of all 50 states and the District 
of Columbia revealed that 76 children died in day care in 1996. The 
causes included drownings, falls, and being struck by automobiles. And 
these numbers are low because, shockingly, some states do not even 
track day care deaths. In terms of oversight, the US News report 
revealed that in Virginia, for example, the state had failed to make 
mandatory twice-a-year inspections of 722 of its 4,200 licensed 
facilities in 1996; 159 centers were not visited even once.
  No parents should have to fear for their child's safety--no parent 
should

[[Page S123]]

ever get that dreaded call that their child was hurt at day care. 
Bringing a young child to day care in the morning should not be an act 
of faith--it should be an act of confidence. While states have the 
responsibility to set health and safety standards, states need to be 
held accountable for enforcing these standards by adhering to the 
inspection-schedule that they establish under state law. Accordingly, 
our bill provides a 10 percent bonus in CCDBG funding to states that 
meet targeted inspection rates, while penalizing those by 10 percent 
that don't meet their existing responsibility to ensure health and 
safety. This gives our bill ``teeth'' to ensure that child care is safe 
and children are protected.
  Finally, we encourage more American businesses to become partners in 
child care by offering then tax credits for child care operation, 
construction and renovation expenses up to $500,000. And recognizing 
that it is not always feasible for small businesses to assist with 
child care, we offer grants to small employers to provide such care. 
Businesses already have an incentive to provide child care in that 
parents who are confident in their child care arrangements are more 
reliable, productive workers. These initiatives will not only create 
more slots and make child care more affordable for parents and 
businesses alike, but it will help literally bring care closer to more 
parents.
  In closing, let me emphasize that this bill is an investment in our 
nation's future. It is a statement by the federal government that there 
can be no greater cause--no more noble a purpose than providing for our 
children. How a nation raises its youth and the value it places on 
giving children a chance to grow up safe, happy, and healthy speaks 
volumes to its greatness. This legislation won't make decisions easier 
for parents but it will ensure that they have a full range of options 
available to them as they seek to do the very best they can for their 
children. That's why I'm proud to be here today and that's why I will 
work hard to ensure the passage of the Caring for Children Act. Thank 
you.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Coats, Mr. Faircloth and Mr. 
        Ashcroft):
  S. 1578. A bill to make available on the Internet, for purposes of 
access and retrieval by the public, certain information available 
through the Congressional Research Service web site; to the Committee 
on Rules and Administration.


               CONGRESSIONAL RESEARCH SERVICE LEGISLATION

  Mr. McCAIN. Mr. President, I would like to introduce a bill that will 
make Congressional Research Service Reports, Issue Briefs, and 
Authorization and Appropriations products available on a web site to 
the American people. Senator Coats, Senator Faircloth, and Senator 
Ashcroft are original co-sponsors to this bill. Additionally, 
Representative Shays will be introducing a companion bill over in the 
House.
  The Congressional Research Service (CRS) has a well-known reputation 
for producing high-quality reports and issue briefs that are unbiased, 
concise, and accurate. Many of us have used these CRS products to make 
decisions on a wide variety of legislative proposals and issues, 
including Amtrak, the Endangered Species Act, the Line Item Veto, and 
U.S. policy in Zambia. Also, we routinely issue these products to our 
constituents in order to help them understand the important issues of 
our time.
  This fiscal year, the American taxpayer will pay $64.6 million to 
fund the Congressional Research Service. Newspapers, such as the San 
Jose Mercury-News and the Austin American-Statesman, and watchdog 
groups, such as the Congressional Accountability Project, have recently 
asked the Congress to allow the public access to CRS resources. The 
American people have paid for these valuable resources and have a right 
to see that their money is being well spent.
  Congress can also serve two important functions by allowing public 
access to this information. First, public access to these CRS products 
will mark an important milestone in opening up the federal government. 
Our constituents will be able to see the research documents which 
influenced our decisions and understand the trade-offs and factors that 
we consider before a vote. This will give the public a more accurate 
view of the Congressional decision-making process to counter the 
prevailing cynical view of Members of Congress selling their votes to 
the highest campaign contributor.
  Also, these CRS reports will serve an important role in informing the 
public. Members of the public will be able to read these CRS products 
and receive a concise, accurate summary of the issues that concern 
them. As elected representatives, we should do what we can to promote 
an informed, educated public. The educated voter is best able to make 
decisions and petition us to do the right things here.

  The Internet provides an ideal way to inform the public while not 
distracting CRS from its primary mission to serve Congress. The 
Director of CRS can simply post CRS products on a web site, and then 
voters can look up information without any extra effort by CRS 
researchers. The public will not be allowed to write responses or 
research requests to CRS, so that valuable CRS time will not be 
diverted from helping us to do our jobs. Confidential requests by 
Members of Congress will not be released to the public. It is my intent 
that CRS establish a separate web site that will serve the public 
without otherwise causing CRS to do anything drastically different from 
its current operations when it posts CRS products on the web site 
accessible to Members of Congress.
  I recognize that there have been a few questions about this bill. 
There are concerns disseminating CRS material via the Internet will 
remove its protection under the Speech and Debate Clause. At present, 
no court case has directly addressed this issue. However, the Supreme 
Court acknowledged in its concurrence to Doe versus McMillan that a 
legislator's function in informing the public concerning matters before 
Congress should be protected by the Speech and Debate Clause, similar 
to communications which relate directly to the legislative process. 
Furthermore, my bill gives the CRS Director discretion to not release 
material that he determines is confidential. This aspect of my bill has 
been upheld in similar circumstances where the U.S. District Court 
maintained the confidentiality of the underlying research used to 
create reports by Congressional support agencies. I am including in the 
Record a letter by Mr. Stanley M. Brand, a former General Counsel to 
the House of Representatives, who agrees that my legislation will not 
threaten CRS' protection under the Speech and Debate Clause.
  I am also aware of potential copyright concerns if the CRS 
information is made accessible to the public. For example, CRS has 
informed me that it does not have a copyright agreement that will allow 
it to make the maps used in CRS products available electronically. I 
believe we can work out an equitable solution to resolve any copyright 
concerns that would prevent any CRS Report, Issue Brief, or 
Authorization or Appropriations product from being electronically 
disseminated to the public.
  Another concern has been raised about the 30 day delay between the 
release of CRS material to Members of Congress and their staff and its 
release to the public on the web site. This delay will make sure that 
CRS has carried out its primary statutory duty of informing Congress 
before releasing information the public. Also, it will allow CRS to 
verify that its products are accurate and prepare them for public 
release in order to protect CRS from liability problems and the 
American people from being misinformed.
  I would like to stress that opening up these select CRS products to 
the public will in no way compete with existing commercial information 
services. The public will have access to selected CRS products that are 
currently available only to Members of Congress and their staff. I 
firmly believe that the federal government should not be involved in 
competing with legitimate private industry.
  This bill has received popular support from across the country, and I 
am including in the Record a letter of support from many concerned 
industries and groups including America On-Line, IBM, Public Citizen, 
and the League of Women Voters of the United States. I hope that my 
colleagues will join them

[[Page S124]]

in supporting this legislation and opening up a useful source of 
information to the American people.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1578

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

     SECTION 1. AVAILABILITY OF CERTAIN CRS WEB SITE INFORMATION.

       (a) Availability of Information.--
       (1) In general.--The Director of the Congressional Research 
     Service shall make available on the Internet, for purposes of 
     access and retrieval by the public, all information that--
       (A) is available through the Congressional Research Service 
     web site;
       (B) is described in paragraph (2); and
       (C) is not confidential as determined by--
       (i) the Director; or
       (ii) the head of a Federal department or agency that 
     provided the information to the Congressional Research 
     Service.
       (2) Information.--The information referred to in paragraph 
     (1)(B) is as follows:
       (A) All Congressional Research Service Issue Briefs.
       (B) All Congressional Research Service Reports that are 
     available to Members of Congress through the Congressional 
     Research Service web site.
       (C) All Congressional Research Service Authorization of 
     Appropriations Products or Appropriations Products.
       (b) Time.--The information shall be so made available not 
     earlier than 30 days after the first day the information is 
     available to Members of Congress through the Congressional 
     Research Service web site.
       (c) Requirements.--The Director of the Congressional 
     Research Service shall make the information available in a 
     manner that the Director determines--
       (1) is practical and reasonable; and
       (2) does not permit the submission of comments from the 
     public.
                                  ____

                                      Congressional Accountability


                                                      Project,

                                 Washington, DC, January 26, 1998.
     Hon. John McCain and Daniel Coats,
     Russell Senate Office Building, U.S. Senate, Washington, DC.

       Dear Senators McCain and Coats: We happily endorse your 
     draft legislation to put Congressional Research Service (CRS) 
     reports and products on the Internet, including CRS Issue and 
     Legislative Briefs, and Authorization and Appropriation 
     products.
       CRS products are some of the finest research prepared by 
     the federal government. They are a precious source of 
     government information on a huge range of topics. In a recent 
     editorial, Roll Call described CRS reports as ``often the 
     most trenchant and useful monographs available on a 
     subject.'' Citizens, scholars, journalists, librarians, 
     businesses, and many others have long wanted access to CRS 
     reports via the Internet.
       We believe that taxpayers ought to be able to read the 
     research that we pay for. But citizens cannot obtain most CRS 
     products directly. Instead, we must purchase them from 
     private vendors, or engage in the burdensome and time-
     consuming process of requesting a member of Congress to send 
     CRS products to us. Often, citizens must wait for weeks or 
     even months before such a request is filled. This barrier to 
     obtaining CRS products serves no useful purpose, and damages 
     citizens' ability to participate in the congressional 
     legislative process.
       James Madison aptly described why the public needs 
     reliable, accurate information about current events: ``A 
     popular Government, without popular information, or the means 
     of acquiring it, is but a Prologue to a Farce or a Tragedy; 
     or, perhaps both. Knowledge will forever govern ignorance: 
     And a people who mean to be their own Governors, must arm 
     themselves with the power which knowledge gives.''
       Your bill falls squarely within the spirit of Madison's 
     honorable words. Thanks for your efforts in making CRS 
     products available on the Internet.
           Sincerely,
       American Conservative Union.
       American Protestant Health Alliance.
       America Online Corp.
       Danielle Brian, Executive Director, Project on Government 
     Oversight.
       Business Software Alliance.
       California Budget Project (CA).
       Center for Media Education.
       Center for Science in the Public Interest.
       Citizen Advocacy Center (IL).
       Timothy J. Coleman, Director, Kettle Range Conservation 
     Group (WA).
       Computer Communications Industry Association.
       Computer Professionals for Social Responsibility.
       Congressional Accountability Project.
       Consumer Project on Technology.
       Decision Matrix Inc. (OR).
       George Draffan, Director, Public Information Network (WA).
       Electronic Frontier Foundation.
       Fairness and Accuracy in Reporting.
       Federation of American Scientists.
       Ray Fenner, President, Superior Wilderness Action Network 
     (MI).
       Darlene Flowers, Executive Director, Foster Parents 
     Association of Washington State (WA).
       Forest Service Employees for Environmental Ethics.
       Government Purchasing Project.
       IBM.
       Impact Voters of America.
       Information Technology Association of America.
       Institute for Local Self-Reliance.
       Intel Corp.
       League of Women Voters of the United States.
       Marin Democratic Club (CA).
       Halsey Minor, Chief Executive Officer, CNET.
       Barbara J. Moore, Ph.D., President and CEO, Shape Up 
     America!
       National Association of Manufacturers.
       National Citizens Communications Lobby.
       Native Forest Council (OR).
       NetAction.
       Netscape Communications Corp.
       OMB Watch.
       Public Citizen.
       Public Interest Projects.
       Amy Ridenour, President, The National Center for Public 
     Policy Research.
       Greg Schuckman, Director of Public Affairs, American 
     Association of Engineering Societies.
       Peter J. Sepp, Vice-President for Communications, National 
     Taxpayers Union.
       Taxpayers for Common Sense.
       TenantNet (NY).
       Triad Healthcare Technologies, LLC (TX).
       United Democratic Clubs, Orange County, CA; Larry 
     Trullinger, President.
       United Seniors Association.
       U.S. Public Interest Research Group (PIRG).
       U.S. Term Limits.
       Russell Verney, Chairman, Reform Party.
       Virginia Journal of Law and Technology.
       Western Land Exchange Project (WA).
                                  ____



                                         Brand, Lowell & Ryan,

                                 Washington, DC, January 27, 1998.
     Hon. John McCain,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator McCain: I am writing to amplify the comments 
     that I recently made to the press concerning applicability of 
     the Speech or Debate Clause, U.S. Const. art. I, Sec. 6, cl. 
     1, to certain CRS products which your bill would, if enacted, 
     make available on the Internet. Juliet Eilperin, Memo Claims 
     That McCain Legislation to Put CRS Reports Online Could Have 
     Constitutional Problems, Roll Call, January 15, 1998, p. 8.
       First, as General Counsel to the House of Representatives I 
     litigated virtually scores of cases involving the Speech or 
     Debate Clause, including a landmark case before the Supreme 
     Court reaffirming the central function of the clause in 
     protecting the legislative branch from judicial and executive 
     branch interference, United States v. Helstoski; 442 U.S. 
     477, Helstoski v. Meanor, 442 U.S. 500 (1979); see also, 
     Vander Jagt v. O'Neill, 699 F.2d 1166 (D.C. Cir. 1983); In Re 
     Grand Jury Investigation, 587 F.2d 589 (3d Cir. 1978); United 
     States v. Eilberg, 507 F. Supp. 267 (E.D. Pa. 1980); Benford 
     v. American Broadcasting Co., 98 F.R.D. 42 (D. Md. 1983), 
     rev'd sub nom. In Re: Guthrie, 735 F.2d 634 (4th Cir. 1984). 
     Many of these cases which I litigated were cited in the CRS 
     memorandum as supporting their conclusion that publication on 
     the Internet would adversely affect the Speech or Debate 
     Clause privilege.
       I believe that the concerns expressed in the CRS memorandum 
     are either overstated, or the extent they are not, provide no 
     basis for arguing that protection of CRS works will be 
     weakened by your bill. I also want you to know that I was, 
     and remain, a strong advocate for vigorous assertion and 
     protection of the Speech or Debate Clause privilege as a 
     great bulwark of the separation of powers doctrine that 
     protects the Congress from Executive and Judicial branch 
     encroachment.
       The CRS memorandum states ``extensive involvement by CRS in 
     the informing function might cause the judiciary and 
     administrative agencies to reassess their perception of CRS 
     as playing a substantial role in the legislative process, and 
     thereby might endanger a claim of immunity even in an 
     instance in which CRS was fulfilling its legislative 
     mission.''
       This fear is simply unfounded. While the courts have 
     consistently relegated the so-called ``informing function'' 
     to non-constitutionally protected status, they have also 
     steadfastly refused to permit litigants to pierce the 
     privilege for activities that are cognate to the legislative 
     process despite later dissemination outside the Congress. So, 
     for example, in McSurely v. McClellan, 553 F.2d 1277, 1286 n. 
     3 (D.C. Cir. 1976) (en banc), the Court refused to allow a 
     litigant to question Senate aides about acts taken within the 
     Committee, even though acts of dissemination outside the 
     Congress were subject to discovery. Publication of a CRS 
     product on the Internet would no more subject CRS employees 
     to questioning about the basis for their work, consultations 
     with colleagues or the sources of that work, than would be 
     the case if the same CRS product were obtained by means other 
     than the Internet. Indeed, the fact that House and Senate 
     proceedings are televised does not alter the applicability of 
     the clause to floor speeches, committee deliberations, staff 
     consultation, or other legislative activities. Even certain 
     consultations concerning press relations are protected though 
     dissemination to the media is not protected. Mary Jacoby, 
     Hill Press Releases Protected Speech, Roll Call, April 17,

[[Page S125]]

     1995, p. 1 (the Senate Legal Counsel argued that because a 
     legislative discussion is embedded in a press release doesn't 
     entitle a litigant to question staff about the substance of 
     the legislation); see also Tavoulareas v. Piro, 527 F. Supp. 
     676, 682 (D.D.C. 1981) (court ordered congressional deponents 
     to merely identify documents disseminated outside of Congress 
     but did not permit questions regarding preparation of the 
     documents, the basis of conclusions contained therein, or the 
     sources who provided evidence relied upon in the documents), 
     Peroff v. Manual, 421 F. Supp. 570, 574 (D.D.C. 1976) 
     (preparation of a Committee witness by a congressional 
     investigator is protected because ``facially legislative in 
     character''). Under this line of caselaw, it is difficult to 
     foresee how the mere dissemination of a CRS product could 
     subject any CRS employee to inquiry concerning the 
     preparation of such a product. In short, because ``discovery 
     into alleged conduct of [legislative aides] not protected by 
     the Speech or Debate Clause can infringe the [legislative 
     aides'] right to be free from inquiry into legislative acts 
     which are so protected,'' McSurely v. McClellan, 521 F.2d 
     1024, 1033 (D.C. Cir. 1975), aff'd en banc by an equally 
     divided court, 553 F.2d 1277 (1976) courts have imposed the 
     Clause as a bar to any inquiry into acts unrelated to 
     dissemination of the congressional reports.
       In Tavaulareas v. Piro, 527 F. Supp. at 682, the court 
     ruled ``[t]he fact that the documents were ultimately 
     disseminated outside the Congress does not provide any 
     justification'' for piercing the privilege as to the staff's 
     internal use of the document. Accord McSurely v. McClellan, 
     553 F.2d at 1296-1298 (use and retention of illegally seized 
     documents by Committee not actionable); United States v. 
     Helstoski, 442 U.S. 477, 489 (1979) (clause bars introduction 
     into evidence of even non-contemporaneous discussions and 
     correspondence which merely describe and refer to legislative 
     acts in bribery prosecution of Member); Eastland v. United 
     States Serviceman's Fund, 421 U.S. at 499 n. 13 (subpoena to 
     Senate staff aide for documents and testimony quashed because 
     ``received by [the employee] pursuant to his official duties 
     as a staff employee of the Senate'' and therefore ``. . . 
     within the privilege of the Senate''). See also United States 
     v. Hoffa, 205 F. Supp. 710, 723 (S.D. Fla 1962), cert, denied 
     sub nom Hoffa v. Lieb, 371 U.S. 892 (wiretap withheld by 
     defendant by ``invocation of legislative privilege by the 
     United States Senate'').
       In the Tavoulareas case, in which I represented the House 
     deponents, part of the theory of plaintiff's case against the 
     Post was the reporter ``laundered'' the story through the 
     committee ``as a means of lending legitimacy'' to the stories 
     and information provided by other sources, Tavoulareas v. 
     Piro, 93 F.R.D. at 18. In pursuance of validating this 
     theory, the plaintiff sought to prove that the committee 
     never formally authorized the investigation, but rather that 
     the staff merely served as a conduit and engaged in no bona 
     fide investigation activity. The court ruled that ``although 
     plaintiffs have repeatedly suggested that the subject 
     investigation was not actually aimed at uncovering 
     information of valid legislative interest . . . it is clear 
     that such assertions, even if true, do not pierce the 
     legislative privilege.''
       As a practical matter, therefore, a litigant suing or 
     seeking to take testimony from a CRS employee based on 
     dissemination of a report alleged to be libelous or 
     actionable may be unable to obtain the collateral evidence 
     needed to prove such a claim--a serious impediment to 
     bringing such a case in the first place.
       Even in the case of Doe v. McMillan, 412 U.S.C. 306 (1973) 
     relied on by the CRS memorandum to support its narrow view of 
     the Clause's protection, the Court of Appeals on remand 
     stated: ``Restricting distribution of committee hearings and 
     reports to Members of Congress and the federal agencies would 
     be unthinkable.'' 566 F.2d 713, 718 (D.C. Cir. 1977). It 
     would be similarly unthinkable to subject CRS to broad 
     ranging discovery simply because its work product was made 
     available on the Internet.
       The CRS memorandum raises the specter that litigants might 
     even seek ``the files of CRS analysts'' in actions 
     challenging the privilege. It is beyond peradventure of 
     doubt, however, that publication of even alleged defamatory 
     or actionable congressional committee reports does not 
     entitle a litigant to legislative flies used to created 
     in preparing such a report. United States v. Peoples 
     Temple of the Disciples of Christ, 515 F. Supp. 246, 248-
     49 (D.D.C. 1981) In re: Guthrie, Clerk, U.S. House of 
     Representatives, 773 F.2d 634 (4th Cir. 1984), Eastland v. 
     United States Servicemen's Fund, 421 U.S. at 499, n. 13. 
     Given the foregoing caselaw, I fail to see a realistic 
     threat that CFS employees will be subjected to any 
     increased risk of liability, or discovery of their files. 
     Of course, nothing can prevent litigants from filing 
     frivolous or ill-founded suits, but their successful 
     prosecution or ability to obtain evidence from legislative 
     files seems remote and nothing in your bill would change 
     that.
       The CRS memoranda even goes so far as to suggest that 
     claims of speech or debate immunity for CRS products might 
     lead to in camera inspection of material, itself an incursion 
     into legislative branch discretion. Yet in the very case 
     cited to by CRS memo, no court ordered in camera inspection 
     of House documents. In Re: Guthrie, supra, involved no camera 
     inspection of legislation documents. These cases are 
     typically litigated on the basis of the facial validity of 
     the privilege and few, if any, courts of which I am aware 
     have even gone so far as to order in camera inspection. See 
     United States v. Dowdy, 479 F. 2d 213, 226 (4th Cir. 
     1973)(``Once it was determined, as here, that the legislative 
     function. . .was apparently being performed, the proprietary 
     and motivation for the action taken as well as the detail of 
     the acts performed, are immune from judicial inquiry''). 
     Under the Clause, courts simply do not routinely resort to in 
     camera review to resolve privilege disputes. Given the now 
     highly developed judicial analysis of the applicability of 
     the Clause to modern legislative practices it rarely occurs. 
     In one recent celebrated case cited to by the CRS, the Court 
     upheld a claim of privilege for tobacco company documents 
     obtained by Congress even though they were alleged to have 
     been stolen, without ever seeking in camera review. Brown & 
     Williamson Tobacco Corp. v. Williams, 62 F.3d 408, 417 (D.C. 
     Cir. 1995) (``Once the documents were received by Congress 
     for legislative use--at least so long as congressmen were not 
     involved in the alleged theft--an absolute constitutional ban 
     of privilege drops like a steel curtain to prevent B&W from 
     seeking discovery'').
       In an abundance of caution, and to address CRS' concerns, 
     you might consider adding the following language to the bill: 
     ``Nothing herein shall be deemed or considered to diminish, 
     qualify, condition, waive or otherwide affect applicability 
     of the Constitution's Speech or Debate Clause, or any other 
     privilege available to Congress, its agencies or their 
     employees, to any CRS product made available on the Internet 
     under this bill.''
       I appreciate the CRS sensitivity to subjecting its 
     employees, or their work product, to searching discovery by 
     litigants. Based on the very good caselaw protecting their 
     performance of legislative duties and the strong 
     institutional precedent in both the House and Senate in 
     defending CRS against such intrusions, I do not believe your 
     bill creates any greater exposure to such risks that already 
     exists.
       I hope my views are helpful in your deliberations on this 
     issue.
           Sincerely,
                                                 Stanley M. Brand.

  Mr. COATS. Mr. President, I am pleased to join the distinguished 
Senator from Arizona in introducing legislation directing the 
Congressional Research Service to make available, on-line, CRS Reports, 
Issue Briefs, and more comprehensive CRS reports on federal 
authorizations and appropriations.
  CRS is funded with over $64 million in taxpayer money every year and 
produces perhaps the most prolific and quality research available on 
policy and legislative issues. In making available information and 
materials that are used every day by Members and their staffs in 
developing policy initiatives and legislation, we will be opening a 
more informed relationship between the American people and the Congress 
that serves them.
  Beyond the tremendous value of informing the American people on the 
issues before their Congress, this legislation will help to shine some 
light on the federal government, allowing the American people to see 
the documents which influence the decision-making process.
  Mr. President, FDR once said that, ``The only bulwark of continuing 
liberty is a government strong enough to protect the interest of the 
people, and people strong enough and well enough informed to maintain 
its sovereign control over its government.'' At a time when public 
cynicism about government is at an all-time high, when government has 
encroached upon virtually every aspect of our daily lives, this 
statement is particularly poignant.
  As I have stated, CRS information briefs play a critical role in 
assisting Members of Congress in policy development and the legislative 
process. By making these products readily available to the American 
people, who pay for them, we hold out the promise of demystifying a 
legislative process that has become so complex and arcane that many 
Americans have simply tuned out.
  Mr. President, more than ever, information is power. It is my hope 
that the effect of this legislation will be to give a better informed 
public more power over their government.

[[Page S126]]

  My intention today is to keep my remarks short. As this legislation 
moves through the process, I will ask my colleagues to indulge me with 
more time to discuss the bill in detail. I would like to commend 
Senator McCain for his leadership on this issue, and to ask my 
colleagues for their support in this effort to make the Congress more 
accessible to the people. I yield the floor.
                                 ______
                                 
      By Mr. DeWINE (for himself, Mr. Jeffords, Mr. Kennedy, Mr. 
        Wellstone, Mr. Harkin, Mr. Frist, Ms. Collins, Mr. Dodd, Mr. 
        Reed, Mr. Chafee, and Mr. Bingaman):

  S. 1579. A bill to amend the Rehabilitation Act of 1973 to extend the 
authorizations of appropriations for such Act, and for other purposes; 
to the Committee on Labor and Human Resources.


               THE REHABILITATION ACT AMENDMENTS OF 1998

  Mr. DeWINE. Mr. President, on September 17, 1997, as a member of the 
Senate Labor and Human Resources Committee and as Chairman of the 
Subcommittee on Employment and Training, I introduced S. 1186, the 
Workforce Investment Partnership Act. This legislation represents a 
tremendous effort to reshape our country's job training system, 
eliminate its fragmented and ineffective programs, and prepare it for 
the new demands of the next century.

  Today, in the same spirit, I introduce the reauthorized 
Rehabilitation Act and am very pleased to be joined by Senators 
Jeffords, Kennedy, Wellstone, Harkin, Frist, Collins, Reed, and Chafee.
  The Rehabilitation Act is the country's only Federally funded job 
training program for individuals with disabilities. If we are to truly 
reshape the country's job training programs--and begin to create a 
seamless system--we must bring all the programs, including vocational 
rehabilitation, in line with each other. We must link their efforts to 
train and place individuals. And we must ensure cooperation and 
awareness among their personnel.
  Reauthorizing the Rehabilitation Act of 1973 gives us the perfect 
opportunity to ensure that the vocational rehabilitation (VR) system 
does just that.
  It links the VR system to the states' new job training systems under 
the Workforce Investment Partnership Act.
  It streamlines the VR system, and eliminates unnecessary and wasteful 
requirements on state agencies.
  It improves the provision of services that lead to more jobs and 
better jobs for individuals with disabilities.
  And it reauthorizes the Rehabilitation Act for 7 years, to mirror the 
reauthorization schedule of the Workforce Investment Partnership Act.
  Linking the VR system to states' new workforce systems should not be 
confused with compromising the integrity of the VR system. Under no 
circumstances, proposed either in this reauthorization or in S. 1186, 
will funding for VR be jeopardized or diluted. However, no one should 
underestimate the importance of cooperation and awareness between the 
two systems, and the strong statutory links that are necessary to 
ensure such cooperation.
  Mr. President, let me elaborate on some of the links included in this 
reauthorization.
  First, one member of a state's State Partnership, under S. 1186, 
would also be a member of a state's State Rehabilitation Council. State 
Rehabilitation Councils are responsible for advising state VR agencies 
and helping them develop the state plan for implementing rehabilitation 
services. Input from a State Partnership will help assure that the 
programs do not duplicate each other's efforts.
  Second, a state's VR agency is required to develop cooperative 
agreements with other components of the state's workforce investment 
system. These agreements should include: Arrangements for interagency 
staff training; arrangements to share data electronically regarding 
labor market information and information on specific job vacancies; 
arrangements to use common intake procedures, forms, and referral 
procedures; agreements to share client databases; and arrangements for 
resolving interagency disputes.
  Third, the Rehabilitation Services Agency Commissioner, who is 
required to submit a report to Congress and the President on the 
activities carried out under the Rehabilitation Act for a fiscal year, 
must now include in his report the same information required in the 
Workforce Investment Partnership Act.
  Linking the reporting requirements helps assure that VR and the state 
workforce systems will be evaluated on the same results, including 
statistics on job placement, job retention six and twelve months after 
placement, and on how many did or did not complete their training.

  Finally, the bill clearly states that its purpose is to ``assist 
states in operating statewide comprehensive, coordinated, effective, 
efficient, and accountable programs of vocational rehabilitation, each 
of which is an integral part of a statewide workforce investment 
system.''
  After establishing significant links between state workforce systems 
and state vocational rehabilitation systems, my second objective in 
this bill is to streamline the existing VR system. For example:
  First, the duplicative and wasteful requirements to develop state 
plans were removed. For example, the entire concept of a ``strategic 
plan'' requiring states to develop already existing or required goals 
and standards elsewhere is eliminated. In addition to saving time for 
state administrators, this means that states would no longer have to 
spend 1.5% of their Federal allotment on the ``strategic plan.'' In 
Ohio, this means a savings of close to 3 million dollars--savings the 
state of Ohio could now spend on providing services and getting people 
jobs.
  Second, eligibility procedures also have been simplified. Under this 
reauthorization bill, an individual could demonstrate eligibility for 
VR services based on information attained from another program with 
either the same or higher eligibility criteria. Therefore, state 
agencies would not longer have to reinvent the wheel to determine 
eligibility for individuals who can already demonstrate it.
  Mr. President, in addition to linkages and streamlining, we have 
vastly improved the VR system in several ways.
  First, all individuals eligible for VR programming would now receive 
at least basic services. Current law allows states under an ``order of 
selection'' to ignore eligible individuals who have come for job 
assistance if they do not meet the state's definition of ``most 
severely disabled.'' Now, even those disabled individuals who would not 
otherwise be served must receive at least evaluative services, job 
placement information, and referral services. A state may opt to 
provide additional services to these individuals, but not everyone will 
have access to basic assistance and information.
  Second, individuals' roles in developing their own ``Individualized 
Rehabilitation Employment Plans'' have been strengthened. Individuals 
with disabilities, who will always have the opportunity of working as a 
team with a VR counselor, will also have more choice as to what their 
plan will provide.
  Third, the dispute resolution process between clients and state 
agencies has been vastly improved, ensuring real due process for all 
parties. No longer will a state VR administrator be allowed to review 
decisions in which the state agency is always a party. Under this 
reauthorization bill, it is a state's option to have an administrative 
review of an initial decision, but this review must be conducted by 
someone not affiliated with the state VR agency.
  If a state does not have such a review, any appeals from an initial 
hearing proceed directly to civil court.
  Furthermore, assuming both parties agree, mediation is now an option 
for either the state VR agency or the individual.
  Finally, one of the most positive changes emphasizes the value of 
self-employment as a possibility for individuals with disabilities. 
Individuals with disabilities, together with their VR counselors, can 
develop plans in which their goal is to be self-employed. It is a step 
that gives VR clients more choice in how they will live their lives and 
become more independent members of their communities.
  Before I conclude, Mr. President, I would like to point out the broad 
bipartisan support for this bill and its link to the Workforce 
Investment Partnership Act enjoys. Members from both sides of the 
aisle, the Department of

[[Page S127]]

Education, and many interest groups worked together in a very open 
negotiation to produce this legislation--one that will truly improve 
the lives of millions of people.
  I thank the Chairman of the Labor Committee, Senator Jeffords; the 
Ranking Member of the Committee, Senator Kennedy; the Ranking Member of 
the Employment and Training Subcommittee, Senator Wellstone, and my 
colleague from Iowa, Senator Harkin for all the work they and their 
staffs put into this process. I also would like to thank my colleague 
from Tennessee, Senator Frist and his staff for his contribution not 
only in the 105th Congress, but also for his contributions to 
developing links to our previous workforce bill in the 104th Congress.
  Mr. President, I am hopeful the Senate will approve this legislation 
soon. Passage of this bill will create a system that will improve the 
lives of individuals with disabilities and provide opportunities for 
more jobs. This bill would streamline the VR system, making it more 
efficient and effective, and couple the vocational rehabilitation 
system's job training efforts with states' workforce systems' efforts 
to develop a seamless system of job training.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1579

       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 ``Rehabilitation Act 
     Amendments of 1998''.

     SEC. 2. TITLE.

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

     SEC. 3. GENERAL PROVISIONS.

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

``Sec. 1. Short title; table of contents.
``Sec. 2. Findings; purpose; policy.
``Sec. 3 Rehabilitation Services Administration.
``Sec. 4. Advance funding.
``Sec. 5. Joint funding.
``Sec. 7. Definitions.
``Sec. 8. Allotment percentage.
``Sec. 10. Nonduplication.
``Sec. 11. Application of other laws.
``Sec. 12. Administration of the Act.
``Sec. 13. Reports.
``Sec. 14. Evaluation.
``Sec. 15. Information clearinghouse.
``Sec. 16. Transfer of funds.
``Sec. 17. State administration.
``Sec. 18. Review of applications.
``Sec. 19. Carryover.
``Sec. 20. Client assistance information.
``Sec. 21. Traditionally underserved populations.

             ``TITLE I--VOCATIONAL REHABILITATION SERVICES

                      ``Part A--General Provisions

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

           ``Part B--Basic Vocational Rehabilitation Services

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

      ``Part C--American Indian Vocational Rehabilitation Services

``Sec. 121. Vocational rehabilitation services grants.

    ``Part D--Vocational Rehabilitation Services Client Information

``Sec. 131. Data sharing.

                   ``TITLE II--RESEARCH AND TRAINING

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

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

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

               ``TITLE IV--NATIONAL COUNCIL ON DISABILITY

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

                     ``TITLE V--RIGHTS AND ADVOCACY

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

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

``Sec. 601. Short title.

``Part A--Projects in Telecommuting and Self-Employment for Individuals 
                           with Disabilities

``Sec. 611. Findings, policies, and purposes.
``Sec. 612. Projects in telecommuting for individuals with 
              disabilities.
``Sec. 613. Projects in self-employment for individuals with 
              disabilities.
``Sec. 614. Discretionary authority for dual-purpose applications.
``Sec. 615. Authorization of appropriations.

                    ``Part B--Projects With Industry

``Sec. 621. Projects with industry.
``Sec. 622. Authorization of appropriations.

     ``Part C--Supported Employment Services for Individuals With 
                        Significant Disabilities

``Sec. 631. Purpose.
``Sec. 632. Allotments.
``Sec. 633. Availability of services.
``Sec. 634. Eligibility.
``Sec. 635. State plan.
``Sec. 636. Restriction.
``Sec. 637. Savings provision.
``Sec. 638. Authorization of appropriations.

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

         ``Chapter 1--Individuals With Significant Disabilities

                      ``Part A--General Provisions

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

                 ``Part B--Independent Living Services

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

                ``Part C--Centers for Independent Living

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

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

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


                      ``findings; purpose; policy

       ``Sec. 2. (a) Findings.--Congress finds that--
       ``(1) millions of Americans have one or more physical or 
     mental disabilities and the number of Americans with such 
     disabilities is increasing;

[[Page S128]]

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


                ``rehabilitation services administration

       ``Sec. 3. (a) There is established in the Office of the 
     Secretary a Rehabilitation Services Administration which 
     shall be headed by a Commissioner (hereinafter in this Act 
     referred to as the `Commissioner') appointed by the President 
     by and with the advice and consent of the Senate. Except for 
     titles IV and V and part A of title VI and as otherwise 
     specifically provided in this Act, such Administration shall 
     be the principal agency, and the Commissioner shall be the 
     principal officer, of such Department for carrying out this 
     Act. The Commissioner shall be an individual with substantial 
     experience in rehabilitation and in rehabilitation program 
     management. In the performance of the functions of the 
     office, the Commissioner shall be directly responsible to the 
     Secretary or to the Under Secretary or an appropriate 
     Assistant Secretary of such Department, as designated by the 
     Secretary. The functions of the Commissioner shall not be 
     delegated to any officer not directly responsible, both with 
     respect to program operation and administration, to the 
     Commissioner. Any reference in this Act to duties to be 
     carried out by the Commissioner shall be considered to be a 
     reference to duties to be carried out by the Secretary acting 
     through the Commissioner. In carrying out any of the 
     functions of the office under this Act, the Commissioner 
     shall be guided by general policies of the National Council 
     on Disability established under title IV of this Act.
       ``(b) The Secretary shall take whatever action is necessary 
     to insure that funds appropriated pursuant to this Act, as 
     well as unexpended appropriations for carrying out the 
     Vocational Rehabilitation Act (29 U.S.C. 31-42), are expended 
     only for the programs, personnel, and administration of 
     programs carried out under this Act.
       ``(c) The Secretary shall take such action as necessary to 
     ensure that--
       ``(1) the staffing of the Rehabilitation Services 
     Administration shall be in sufficient numbers to meet program 
     needs and at levels which will attract and maintain the most 
     qualified personnel; and
       ``(2) such staff includes individuals who have training and 
     experience in the provision of rehabilitation services and 
     that staff competencies meet professional standards.


                           ``advance funding

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


                            ``joint funding

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

     ``SEC. 7. DEFINITIONS.

       ``For the purposes of this Act:
       ``(1) Administrative costs.--The term `administrative 
     costs' means expenditures incurred by the designated State 
     unit in the performance of administrative functions under the 
     vocational rehabilitation program carried out under title I, 
     including expenses related to program planning, development, 
     monitoring, and evaluation, including--
       ``(A) expenses for--
       ``(i) quality assurance;
       ``(ii) budgeting, accounting, financial management, 
     information systems, and related data processing;
       ``(iii) provision of information about the program to the 
     public;
       ``(iv) technical assistance and related support services to 
     other State agencies, private nonprofit organizations, and 
     businesses and industries, except for technical assistance 
     and support services described in section 103(b)(5);
       ``(v) the State Rehabilitation Council and other entities 
     that advise the designated State unit with regard to the 
     provision of vocational rehabilitation services;
       ``(vi) removal of architectural barriers in State 
     vocational rehabilitation agency offices and State operated 
     rehabilitation facilities;
       ``(vii) operation and maintenance of designated State unit 
     facilities, equipment, and grounds;
       ``(viii) supplies; and
       ``(ix)(I) administration of the comprehensive system of 
     personnel development described in section 101(a)(7), 
     including personnel administration, and administration of 
     affirmative action plans;
       ``(II) training and staff development; and
       ``(III) administrative salaries, including clerical and 
     other support staff salaries, in support of the 
     administrative functions;
       ``(B) travel costs related to carrying out the program, 
     other than travel costs related to the provision of services;
       ``(C) costs incurred in conducting reviews of 
     rehabilitation counselor or coordinator determinations; and
       ``(D) legal expenses required in the administration of the 
     program.
       ``(2) Assessment for determining eligibility and vocational 
     rehabilitation needs.--The term `assessment for determining 
     eligibility and vocational rehabilitation needs' means, as 
     appropriate in each case--
       ``(A)(i) a review of existing data--
       ``(I) to determine whether an individual is eligible for 
     vocational rehabilitation services; and
       ``(II) to assign priority for an order of selection 
     described in section 101(a)(5)(A) in the States that use an 
     order of selection pursuant to section 101(a)(5)(A); and
       ``(ii) to the extent necessary, the provision of 
     appropriate assessment activities to obtain necessary 
     additional data to make such determination and assignment;
       ``(B) to the extent additional data is necessary to make a 
     determination of the employment outcomes, and the objectives, 
     nature, and scope of vocational rehabilitation

[[Page S129]]

     services, to be included in the individualized rehabilitation 
     employment plan of an eligible individual,, a comprehensive 
     assessment to determine the unique strengths, resources, 
     priorities, concerns, abilities, capabilities, interests, and 
     informed choice, including the need for supported employment, 
     of the eligible individual, which comprehensive assessment--
       ``(i) is limited to information that is necessary to 
     identify the rehabilitation needs of the individual and to 
     develop the individualized rehabilitation employment plan of 
     the eligible individual;
       ``(ii) uses, as a primary source of such information, to 
     the maximum extent possible and appropriate and in accordance 
     with confidentiality requirements--

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

       ``(iii) may include, to the degree needed to make such a 
     determination, an assessment of the personality, interests, 
     interpersonal skills, intelligence and related functional 
     capacities, educational achievements, work experience, 
     vocational aptitudes, personal and social adjustments, and 
     employment opportunities of the individual, and the medical, 
     psychiatric, psychological, and other pertinent vocational, 
     educational, cultural, social, recreational, and 
     environmental factors, that affect the employment and 
     rehabilitation needs of the individual; and
       ``(iv) may include, to the degree needed, an appraisal of 
     the patterns of work behavior of the individual and services 
     needed for the individual to acquire occupational skills, and 
     to develop work attitudes, work habits, work tolerance, and 
     social and behavior patterns necessary for successful job 
     performance, including the utilization of work in real job 
     situations to assess and develop the capacities of the 
     individual to perform adequately in a work environment;
       ``(C) referral, for the provision of rehabilitation 
     technology services to the individual, to assess and develop 
     the capacities of the individual to perform in a work 
     environment; and
       ``(D) an exploration of the individual's abilities, 
     capabilities, and capacity to perform in work situations, 
     through the use of trial work experiences, including 
     experiences in which the individual is provided appropriate 
     supports and training.
       ``(3) Assistive technology device.--The term `assistive 
     technology device' has the meaning given such term in section 
     3(2) of the Technology-Related Assistance for Individuals 
     With Disabilities Act of 1988 (29 U.S.C. 2202(2)), except 
     that the reference in such section to the term `individuals 
     with disabilities' shall be deemed to mean more than one 
     individual with a disability as defined in paragraph (20)(A).
       ``(4) Assistive technology service.--The term `assistive 
     technology service' has the meaning given such term in 
     section 3(3) of the Technology-Related Assistance for 
     Individuals With Disabilities Act of 1988 (29 U.S.C. 
     2202(3)), except that the reference in such section--
       ``(A) to the term `individual with a disability' shall be 
     deemed to mean an individual with a disability, as defined in 
     paragraph (20)(A); and
       ``(B) to the term `individuals with disabilities' shall be 
     deemed to mean more than one such individual.
       ``(5) Community rehabilitation program.--The term 
     `community rehabilitation program' means a program that 
     provides directly or facilitates the provision of vocational 
     rehabilitation services to individuals with disabilities, and 
     that provides, singly or in combination, for an individual 
     with a disability to enable the individual to maximize 
     opportunities for employment, including career advancement--
       ``(A) medical, psychiatric, psychological, social, and 
     vocational services that are provided under one management;
       ``(B) testing, fitting, or training in the use of 
     prosthetic and orthotic devices;
       ``(C) recreational therapy;
       ``(D) physical and occupational therapy;
       ``(E) speech, language, and hearing therapy;
       ``(F) psychiatric, psychological, and social services, 
     including positive behavior management;
       ``(G) assessment for determining eligibility and vocational 
     rehabilitation needs;
       ``(H) rehabilitation technology;
       ``(I) job development, placement, and retention services;
       ``(J) evaluation or control of specific disabilities;
       ``(K) orientation and mobility services for individuals who 
     are blind;
       ``(L) extended employment;
       ``(M) psychosocial rehabilitation services;
       ``(N) supported employment services and extended services;
       ``(O) services to family members when necessary to the 
     vocational rehabilitation of the individual;
       ``(P) personal assistance services; or
       ``(Q) services similar to the services described in one of 
     subparagraphs (A) through (P).
       ``(6) Criminal act.--The term `criminal act' means any 
     crime, including an act, omission, or possession under the 
     laws of the United States or a State or unit of general local 
     government, which poses a substantial threat of personal 
     injury, notwithstanding that by reason of age, insanity, or 
     intoxication or otherwise the person engaging in the act, 
     omission, or possession was legally incapable of committing a 
     crime.
       ``(7) Designated state agency.--The term `designated State 
     agency' means an agency designated under section 
     101(a)(2)(A).
       ``(8) Designated state unit.--The term `designated State 
     unit' means--
       ``(A) any State agency unit required under section 
     101(a)(2)(B)(ii); or
       ``(B) in cases in which no such unit is so required, the 
     State agency described in section 101(a)(2)(B)(i).
       ``(9) Disability.--The term `disability' means--
       ``(A) except as otherwise provided in subparagraph (B), a 
     physical or mental impairment that constitutes or results in 
     a substantial impediment to employment; or
       ``(B) for purposes of sections 2, 14, and 15, and titles 
     II, IV, V, and VII, a physical or mental impairment that 
     substantially limits one or more major life activities.
       ``(10) Drug and illegal use of drugs.--
       ``(A) Drug.--The term `drug' means a controlled substance, 
     as defined in schedules I through V of section 202 of the 
     Controlled Substances Act (21 U.S.C. 812).
       ``(B) Illegal use of drugs.--The term `illegal use of 
     drugs' means the use of drugs, the possession or distribution 
     of which is unlawful under the Controlled Substances Act. 
     Such term does not include the use of a drug taken under 
     supervision by a licensed health care professional, or other 
     uses authorized by the Controlled Substances Act or other 
     provisions of Federal law.
       ``(11) Employment outcome.--The term `employment outcome' 
     means, with respect to an individual--
       ``(A) entering or retaining full-time or, if appropriate, 
     part-time competitive employment in the integrated labor 
     market;
       ``(B) satisfying the vocational outcome of supported 
     employment; or
       ``(C) satisfying any other vocational outcome the Secretary 
     may determine to be appropriate (including satisfying the 
     vocational outcome of self-employment or business ownership),

     in a manner consistent with this Act.
       ``(12) Establishment of a community rehabilitation 
     program.--The term `establishment of a community 
     rehabilitation program' includes the acquisition, expansion, 
     remodeling, or alteration of existing buildings necessary to 
     adapt them to community rehabilitation program purposes or to 
     increase their effectiveness for such purposes (subject, 
     however, to such limitations as the Secretary may determine, 
     in accordance with regulations the Secretary shall prescribe, 
     in order to prevent impairment of the objectives of, or 
     duplication of, other Federal laws providing Federal 
     assistance in the construction of facilities for community 
     rehabilitation programs), and may include such additional 
     equipment and staffing as the Commissioner considers 
     appropriate.
       ``(13) Extended services.--The term `extended services' 
     means ongoing support services and other appropriate 
     services, needed to support and maintain an individual with a 
     most significant disability in supported employment, that--
       ``(A) are provided singly or in combination and are 
     organized and made available in such a way as to assist an 
     eligible individual in maintaining supported employment;
       ``(B) are based on a determination of the needs of an 
     eligible individual, as specified in an individualized 
     rehabilitation employment plan; and
       ``(C) are provided by a State agency, a nonprofit private 
     organization, employer, or any other appropriate resource, 
     after an individual has made the transition from support 
     provided by the designated State unit.
       ``(14) Federal share.--
       ``(A) In general.--Subject to subparagraph (B), the term 
     `Federal share' means 78.7 percent.
       ``(B) Relationship to expenditures by a political 
     subdivision.--For the purpose of determining the non-Federal 
     share with respect to a State, expenditures by a political 
     subdivision thereof or by a local agency shall be regarded as 
     expenditures by such State, subject to such limitations and 
     conditions as the Secretary shall by regulation prescribe.
       ``(15) Impartial hearing officer.--
       ``(A) In general.--The term `impartial hearing officer' 
     means an individual--
       ``(i) who is not an employee of a public agency (other than 
     an administrative law judge, hearing examiner, or employee of 
     an institution of higher education);
       ``(ii) who is not a member of the State Rehabilitation 
     Council described in section 105;
       ``(iii) who has not been involved previously in the 
     vocational rehabilitation of the applicant or client;
       ``(iv) who has knowledge of the delivery of vocational 
     rehabilitation services, the State plan under section 101, 
     and the Federal and State rules governing the provision of 
     such services and training with respect to the performance of 
     official duties; and
       ``(v) who has no personal or financial interest that would 
     be in conflict with the objectivity of the individual.
       ``(B) Construction.--An individual shall not be considered 
     to be an employee of a public agency for purposes of 
     subparagraph (A)(i) solely because the individual is paid by 
     the agency to serve as a hearing officer.

[[Page S130]]

       ``(16) Independent living core services.--The term 
     `independent living core services' means--
       ``(A) information and referral services;
       ``(B) independent living skills training;
       ``(C) peer counseling (including cross-disability peer 
     counseling); and
       ``(D) individual and systems advocacy.
       ``(17) Independent living services.--The term `independent 
     living services' includes--
       ``(A) independent living core services; and
       ``(B)(i) counseling services, including psychological, 
     psychotherapeutic, and related services;
       ``(ii) services related to securing housing or shelter, 
     including services related to community group living, and 
     supportive of the purposes of this Act and of the titles of 
     this Act, and adaptive housing services (including 
     appropriate accommodations to and modifications of any space 
     used to serve, or occupied by, individuals with 
     disabilities);
       ``(iii) rehabilitation technology;
       ``(iv) mobility training;
       ``(v) services and training for individuals with cognitive 
     and sensory disabilities, including life skills training, and 
     interpreter and reader services;
       ``(vi) personal assistance services, including attendant 
     care and the training of personnel providing such services;
       ``(vii) surveys, directories, and other activities to 
     identify appropriate housing, recreation opportunities, and 
     accessible transportation, and other support services;
       ``(viii) consumer information programs on rehabilitation 
     and independent living services available under this Act, 
     especially for minorities and other individuals with 
     disabilities who have traditionally been unserved or 
     underserved by programs under this Act;
       ``(ix) education and training necessary for living in a 
     community and participating in community activities;
       ``(x) supported living;
       ``(xi) transportation, including referral and assistance 
     for such transportation and training in the use of public 
     transportation vehicles and systems;
       ``(xii) physical rehabilitation;
       ``(xiii) therapeutic treatment;
       ``(xiv) provision of needed prostheses and other appliances 
     and devices;
       ``(xv) individual and group social and recreational 
     services;
       ``(xvi) training to develop skills specifically designed 
     for youths who are individuals with disabilities to promote 
     self-awareness and esteem, develop advocacy and self-
     empowerment skills, and explore career options;
       ``(xvii) services for children;
       ``(xviii) services under other Federal, State, or local 
     programs designed to provide resources, training, counseling, 
     or other assistance, of substantial benefit in enhancing the 
     independence, productivity, and quality of life of 
     individuals with disabilities;
       ``(xix) appropriate preventive services to decrease the 
     need of individuals assisted under this Act for similar 
     services in the future;
       ``(xx) community awareness programs to enhance the 
     understanding and integration into society of individuals 
     with disabilities; and
       ``(xxi) such other services as may be necessary and not 
     inconsistent with the provisions of this Act.
       ``(18) Indian; american indian; indian american.--The terms 
     `Indian', `American Indian', and `Indian American' mean an 
     individual who is a member of an Indian tribe.
       ``(19) Indian tribe.--The term `Indian tribe' means any 
     Federal or State Indian tribe, band, rancheria, pueblo, 
     colony, or community, including any Alaskan native village or 
     regional village corporation (as defined in or established 
     pursuant to the Alaska Native Claims Settlement Act).
       ``(20) Individual with a disability.--
       ``(A) In general.--Except as otherwise provided in 
     subparagraph (B), the term `individual with a disability' 
     means any individual who--
       ``(i) has a physical or mental impairment which for such 
     individual constitutes or results in a substantial impediment 
     to employment; and
       ``(ii) can benefit in terms of an employment outcome from 
     vocational rehabilitation services provided pursuant to title 
     I, III, or VI.
       ``(B) Certain programs; limitations on major life 
     activities.--Subject to subparagraphs (C), (D), (E), and (F), 
     the term `individual with a disability' means, for purposes 
     of sections 2, 14, and 15, and titles II, IV, V, and VII of 
     this Act, any person who--
       ``(i) has a physical or mental impairment which 
     substantially limits one or more of such person's major life 
     activities;
       ``(ii) has a record of such an impairment; or
       ``(iii) is regarded as having such an impairment.
       ``(C) Rights and advocacy provisions.--
       ``(i) In general; exclusion of individuals engaging in drug 
     use.--For purposes of title V, the term `individual with a 
     disability' does not include an individual who is currently 
     engaging in the illegal use of drugs, when a covered entity 
     acts on the basis of such use.
       ``(ii) Exception for individuals no longer engaging in drug 
     use.--Nothing in clause (i) shall be construed to exclude as 
     an individual with a disability an individual who--

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

     except that it shall not be a violation of this Act for a 
     covered entity to adopt or administer reasonable policies or 
     procedures, including but not limited to drug testing, 
     designed to ensure that an individual described in subclause 
     (I) or (II) is no longer engaging in the illegal use of 
     drugs.
       ``(iii) Exclusion for certain services.--Notwithstanding 
     clause (i), for purposes of programs and activities providing 
     health services and services provided under titles I, II and 
     III, an individual shall not be excluded from the benefits of 
     such programs or activities on the basis of his or her 
     current illegal use of drugs if he or she is otherwise 
     entitled to such services.
       ``(iv) Disciplinary action.--For purposes of programs and 
     activities providing educational services, local educational 
     agencies may take disciplinary action pertaining to the use 
     or possession of illegal drugs or alcohol against any student 
     who is an individual with a disability and who currently is 
     engaging in the illegal use of drugs or in the use of alcohol 
     to the same extent that such disciplinary action is taken 
     against students who are not individuals with disabilities. 
     Furthermore, the due process procedures at section 104.36 of 
     title 34, Code of Federal Regulations (or any corresponding 
     similar regulation or ruling) shall not apply to such 
     disciplinary actions.
       ``(v) Employment; exclusion of alcoholics.--For purposes of 
     sections 503 and 504 as such sections relate to employment, 
     the term `individual with a disability' does not include any 
     individual who is an alcoholic whose current use of alcohol 
     prevents such individual from performing the duties of the 
     job in question or whose employment, by reason of such 
     current alcohol abuse, would constitute a direct threat to 
     property or the safety of others.
       ``(D) Employment; exclusion of individuals with certain 
     diseases or infections.--For the purposes of sections 503 and 
     504, as such sections relate to employment, such term does 
     not include an individual who has a currently contagious 
     disease or infection and who, by reason of such disease or 
     infection, would constitute a direct threat to the health or 
     safety of other individuals or who, by reason of the 
     currently contagious disease or infection, is unable to 
     perform the duties of the job.
       ``(E) Rights provisions; exclusion of individuals on basis 
     of homosexuality or bisexuality.--For the purposes of 
     sections 501, 503, and 504--
       ``(i) for purposes of the application of subparagraph (B) 
     to such sections, the term `impairment' does not include 
     homosexuality or bisexuality; and
       ``(ii) therefore the term `individual with a disability' 
     does not include an individual on the basis of homosexuality 
     or bisexuality.
       ``(F) Rights provisions; exclusion of individuals on basis 
     of certain disorders.--For the purposes of sections 501, 503, 
     and 504, the term `individual with a disability' does not 
     include an individual on the basis of--
       ``(i) transvestism, transsexualism, pedophilia, 
     exhibitionism, voyeurism, gender identity disorders not 
     resulting from physical impairments, or other sexual behavior 
     disorders;
       ``(ii) compulsive gambling, kleptomania, or pyromania; or
       ``(iii) psychoactive substance use disorders resulting from 
     current illegal use of drugs.
       ``(G) Individuals with disabilities.--The term `individuals 
     with disabilities' means more than one individual with a 
     disability.
       ``(21) Individual with a significant disability.--
       ``(A) In general.--Except as provided in subparagraph (B) 
     or (C), the term `individual with a significant disability' 
     means an individual with a disability--
       ``(i) who has a severe physical or mental impairment which 
     seriously limits one or more functional capacities (such as 
     mobility, communication, self-care, self-direction, 
     interpersonal skills, work tolerance, or work skills) in 
     terms of an employment outcome;
       ``(ii) whose vocational rehabilitation can be expected to 
     require multiple vocational rehabilitation services over an 
     extended period of time; and
       ``(iii) who has one or more physical or mental disabilities 
     resulting from amputation, arthritis, autism, blindness, burn 
     injury, cancer, cerebral palsy, cystic fibrosis, deafness, 
     head injury, heart disease, hemiplegia, hemophilia, 
     respiratory or pulmonary dysfunction, mental retardation, 
     mental illness, multiple sclerosis, muscular dystrophy, 
     musculo-skeletal disorders, neurological disorders (including 
     stroke and epilepsy), paraplegia, quadriplegia, and other 
     spinal cord conditions, sickle cell anemia, specific learning 
     disability, end-stage renal disease, or another disability or 
     combination of disabilities determined on the basis of an 
     assessment for determining eligibility and vocational 
     rehabilitation needs described in subparagraphs (A) and (B) 
     of paragraph (2) to cause comparable substantial functional 
     limitation.
       ``(B) Independent living services and centers for 
     independent living.--For purposes of title VII, the term 
     `individual with a significant disability' means an 
     individual with a severe physical or mental impairment

[[Page S131]]

     whose ability to function independently in the family or 
     community or whose ability to obtain, maintain, or advance in 
     employment is substantially limited and for whom the delivery 
     of independent living services will improve the ability to 
     function, continue functioning, or move towards functioning 
     independently in the family or community or to continue in 
     employment, respectively.
       ``(C) Research and training.--For purposes of title II, the 
     term `individual with a significant disability' includes an 
     individual described in subparagraph (A) or (B).
       ``(D) Individuals with significant disabilities.--The term 
     `individuals with significant disabilities' means more than 
     one individual with a significant disability.
       ``(E) Individual with a most significant disability.--
       ``(i) In general.--The term `individual with a most 
     significant disability', used with respect to an individual 
     in a State, means an individual with a significant disability 
     who meets criteria established by the State under section 
     101(a)(5)(C).
       ``(ii) Individuals with the most significant 
     disabilities.--The term `individuals with the most 
     significant disabilities' means more than one individual with 
     a most significant disability.
       ``(22) Individual's representative; applicant's 
     representative.--
       ``(A) Individual's representative.--The term `individual's 
     representative' used with respect to an eligible individual 
     or other individual with a disability, means--
       ``(i) any representative chosen by the eligible individual 
     or other individual with a disability, including a parent, 
     guardian, other family member, or advocate; or
       ``(ii) if a representative or legal guardian has been 
     appointed by a court to represent the eligible individual or 
     other individual with a disability, the court-appointed 
     representative or legal guardian.
       ``(B) Applicant's representative.--The term `applicant's 
     representative' means--
       ``(i) any representative described in subparagraph (A)(i) 
     chosen by the applicant; or
       ``(ii) if a representative or legal guardian has been 
     appointed by a court to represent the applicant, the court-
     appointed representative or legal guardian.
       ``(23) Institution of higher education.--The term 
     `institution of higher education' has the meaning given the 
     term in section 1201(a) of the Higher Education Act of 1965 
     (20 U.S.C. 1141(a)).
       ``(24) Local agency.--The term `local agency' means an 
     agency of a unit of general local government or of an Indian 
     tribe (or combination of such units or tribes) which has an 
     agreement with the designated State agency to conduct a 
     vocational rehabilitation program under the supervision of 
     such State agency in accordance with the State plan approved 
     under section 101. Nothing in the preceding sentence of this 
     paragraph or in section 101 shall be construed to prevent the 
     local agency from arranging to utilize another local public 
     or nonprofit agency to provide vocational rehabilitation 
     services if such an arrangement is made part of the agreement 
     specified in this paragraph.
       ``(25) Local workforce investment partnership.--The term 
     `local workforce investment partnership' means a local 
     workforce investment partnership established under section 
     308 of the Workforce Investment Partnership Act of 1998.
       ``(26) Nonprofit.--The term `nonprofit', when used with 
     respect to a community rehabilitation program, means a 
     community rehabilitation program carried out by a corporation 
     or association, no part of the net earnings of which inures, 
     or may lawfully inure, to the benefit of any private 
     shareholder or individual and the income of which is exempt 
     from taxation under section 501(c)(3) of the Internal Revenue 
     Code of 1986.
       ``(27) Ongoing support services.--The term `ongoing support 
     services' means services--
       ``(A) provided to individuals with the most significant 
     disabilities;
       ``(B) provided, at a minimum, twice monthly--
       ``(i) to make an assessment, regarding the employment 
     situation, at the worksite of each such individual in 
     supported employment, or, under special circumstances, 
     especially at the request of the client, off site; and
       ``(ii) based on the assessment, to provide for the 
     coordination or provision of specific intensive services, at 
     or away from the worksite, that are needed to maintain 
     employment stability; and
       ``(C) consisting of--
       ``(i) a particularized assessment supplementary to the 
     comprehensive assessment described in paragraph (2)(B);
       ``(ii) the provision of skilled job trainers who accompany 
     the individual for intensive job skill training at the work 
     site;
       ``(iii) job development, job retention, and placement 
     services;
       ``(iv) social skills training;
       ``(v) regular observation or supervision of the individual;
       ``(vi) followup services such as regular contact with the 
     employers, the individuals, the individuals' representatives, 
     and other appropriate individuals, in order to reinforce and 
     stabilize the job placement;
       ``(vii) facilitation of natural supports at the worksite;
       ``(viii) any other service identified in section 103; or
       ``(ix) a service similar to another service described in 
     this subparagraph.
       ``(28) Personal assistance services.--The term `personal 
     assistance services' means a range of services, provided by 
     one or more persons, designed to assist an individual with a 
     disability to perform daily living activities on or off the 
     job that the individual would typically perform if the 
     individual did not have a disability. Such services shall be 
     designed to increase the individual's control in life and 
     ability to perform everyday activities on or off the job.
       ``(29) Public or nonprofit.--The term `public or 
     nonprofit', used with respect to an agency or organization, 
     includes an Indian tribe.
       ``(30) Rehabilitation technology.--The term `rehabilitation 
     technology' means the systematic application of technologies, 
     engineering methodologies, or scientific principles to meet 
     the needs of and address the barriers confronted by 
     individuals with disabilities in areas which include 
     education, rehabilitation, employment, transportation, 
     independent living, and recreation. The term includes 
     rehabilitation engineering, assistive technology devices, and 
     assistive technology services.
       ``(31) Requires vocational rehabilitation services.--The 
     term `requires vocational rehabilitation services', used with 
     respect to an individual with a disability as defined in 
     paragraph (20)(A), means that the individual is unable to 
     prepare for, secure, retain, or regain employment consistent 
     with the strengths, resources, priorities, concerns, 
     abilities, capabilities, interests, and informed choice of 
     the individual without vocational rehabilitation services, 
     because the individual--
       ``(A) has never been employed;
       ``(B) has lost employment;
       ``(C) is underemployed;
       ``(D) is at immediate risk of losing employment; or
       ``(E) receives benefits on the basis of disability or 
     blindness pursuant to title II or XVI of the Social Security 
     Act (42 U.S.C. 401 et seq. or 1381 et seq.), in a case in 
     which the individual intends to achieve an employment outcome 
     consistent with the unique strengths, resources, priorities, 
     concerns, abilities, capabilities, interests, and informed 
     choice of the individual.
       ``(32) Secretary.--The term `Secretary', except when the 
     context otherwise requires, means the Secretary of Education.
       ``(33) State.--The term `State' includes, in addition to 
     each of the several States of the United States, the District 
     of Columbia, the Commonwealth of Puerto Rico, the United 
     States Virgin Islands, Guam, American Samoa, and the 
     Commonwealth of the Northern Mariana Islands.
       ``(34) Statewide workforce investment partnership.--The 
     term `statewide workforce investment partnership' means a 
     partnership established under section 303 of the Workforce 
     Investment Partnership Act of 1998.
       ``(35) Statewide workforce investment system.--The term 
     `statewide workforce investment system' means a system 
     described in section 301 of the Workforce Investment 
     Partnership Act of 1998.
       ``(36) Supported employment.--
       ``(A) In general.--The term `supported employment' means 
     competitive work in integrated work settings, or employment 
     in integrated work settings in which individuals are working 
     toward competitive work, consistent with the strengths, 
     resources, priorities, concerns, abilities, capabilities, 
     interests, and informed choice of the individuals, for 
     individuals with the most significant disabilities--
       ``(i)(I) for whom competitive employment has not 
     traditionally occurred; or
       ``(II) for whom competitive employment has been interrupted 
     or intermittent as a result of a significant disability; and
       ``(ii) who, because of the nature and severity of their 
     disability, need intensive supported employment services for 
     the period, and any extension, described in paragraph (37)(C) 
     and extended services after the transition described in 
     paragraph (13)(C) in order to perform such work.
       ``(B) Certain transitional employment.--Such term includes 
     transitional employment for persons who are individuals with 
     the most significant disabilities due to mental illness.
       ``(37) Supported employment services.--The term `supported 
     employment services' means ongoing support services and other 
     appropriate services needed to support and maintain an 
     individual with a most significant disability in supported 
     employment, that--
       ``(A) are provided singly or in combination and are 
     organized and made available in such a way as to assist an 
     eligible individual to achieve competitive employment;
       ``(B) are based on a determination of the needs of an 
     eligible individual, as specified in an individualized 
     rehabilitation employment plan; and
       ``(C) are provided by the designated State unit for a 
     period of time not to extend beyond 18 months, unless under 
     special circumstances the eligible individual and the 
     rehabilitation counselor or coordinator jointly agree to 
     extend the time in order to achieve the rehabilitation 
     objectives identified in the individualized rehabilitation 
     employment plan.
       ``(38) Transition services.--The term `transition services' 
     means a coordinated set of activities for a student, designed 
     within an outcome-oriented process, that promotes

[[Page S132]]

     movement from school to post school activities, including 
     postsecondary education, vocational training, integrated 
     employment (including supported employment), continuing and 
     adult education, adult services, independent living, or 
     community participation. The coordinated set of activities 
     shall be based upon the individual student's needs, taking 
     into account the student's preferences and interests, and 
     shall include instruction, community experiences, the 
     development of employment and other post school adult living 
     objectives, and, when appropriate, acquisition of daily 
     living skills and functional vocational evaluation.
       ``(39) Underemployed.--The term `underemployed', used with 
     respect to an individual with a disability, as defined in 
     paragraph (20)(A), means a situation in which the individual 
     is employed in a job that is not consistent with the 
     strengths, resources, priorities, concerns, abilities, 
     capabilities, interests, and informed choice of the 
     individual.
       ``(40) Vocational rehabilitation services.--The term 
     `vocational rehabilitation services' means those services 
     identified in section 103 which are provided to individuals 
     with disabilities under this Act.
       ``(41) Workforce investment activities.--The term 
     `workforce investment activities' has the meaning given the 
     term in section 2 of the Workforce Investment Partnership Act 
     of 1998 carried out under that Act.


                         ``allotment percentage

       ``Sec. 8. (a)(1) For purposes of section 110, the allotment 
     percentage for any State shall be 100 per centum less that 
     percentage which bears the same ratio to 50 per centum as the 
     per capita income of such State bears to the per capita 
     income of the United States, except that--
       ``(A) the allotment percentage shall in no case be more 
     than 75 per centum or less than 33\1/3\ per centum; and
       ``(B) the allotment percentage for the District of 
     Columbia, Puerto Rico, Guam, the Virgin Islands, American 
     Samoa, and the Commonwealth of the Northern Mariana Islands 
     shall be 75 per centum.
       ``(2) The allotment percentages shall be promulgated by the 
     Secretary between October 1 and December 31 of each even-
     numbered year, on the basis of the average of the per capita 
     incomes of the States and of the United States for the three 
     most recent consecutive years for which satisfactory data are 
     available from the Department of Commerce. Such promulgation 
     shall be conclusive for each of the two fiscal years in the 
     period beginning on the October 1 next succeeding such 
     promulgation.
       ``(3) The term `United States' means (but only for purposes 
     of this subsection) the fifty States and the District of 
     Columbia.
       ``(b) The population of the several States and of the 
     United States shall be determined on the basis of the most 
     recent data available, to be furnished by the Department of 
     Commerce by October 1 of the year preceding the fiscal year 
     for which funds are appropriated pursuant to statutory 
     authorizations.


                            ``nonduplication

       ``Sec. 10. In determining the amount of any State's Federal 
     share of expenditures for planning, administration, and 
     services incurred by it under a State plan approved in 
     accordance with section 101, there shall be disregarded (1) 
     any portion of such expenditures which are financed by 
     Federal funds provided under any other provision of law, and 
     (2) the amount of any non-Federal funds required to be 
     expended as a condition of receipt of such Federal funds. No 
     payment may be made from funds provided under one provision 
     of this Act relating to any cost with respect to which any 
     payment is made under any other provision of this Act, except 
     that this section shall not be construed to limit or reduce 
     fees for services rendered by community rehabilitation 
     programs.


                      ``application of other laws

       ``Sec. 11. The provisions of the Act of December 5, 1974 
     (Public Law 93-510) and of title V of the Act of October 15, 
     1977 (Public Law 95-134) shall not apply to the 
     administration of the provisions of this Act or to the 
     administration of any program or activity under this Act.


                      ``administration of the act

       ``Sec. 12. (a) In carrying out the purposes of this Act, 
     the Commissioner may--
       ``(1) provide consultative services and technical 
     assistance to public or nonprofit private agencies and 
     organizations, including assistance to enable such agencies 
     and organizations to facilitate meaningful and effective 
     participation by individuals with disabilities in workforce 
     investment activities;
       ``(2) provide short-term training and technical 
     instruction, including training for the personnel of 
     community rehabilitation programs, centers for independent 
     living, and other providers of services (including job 
     coaches);
       ``(3) conduct special projects and demonstrations;
       ``(4) collect, prepare, publish, and disseminate special 
     educational or informational materials, including reports of 
     the projects for which funds are provided under this Act; and
       ``(5) provide monitoring and conduct evaluations.
       ``(b)(1) In carrying out the duties under this Act, the 
     Commissioner may utilize the services and facilities of any 
     agency of the Federal Government and of any other public or 
     nonprofit agency or organization, in accordance with 
     agreements between the Commissioner and the head thereof, and 
     may pay therefor, in advance or by way of reimbursement, as 
     may be provided in the agreement.
       ``(2) In carrying out the provisions of this Act, the 
     Commissioner shall appoint such task forces as may be 
     necessary to collect and disseminate information in order to 
     improve the ability of the Commissioner to carry out the 
     provisions of this Act.
       ``(c) The Commissioner may promulgate such regulations as 
     are considered appropriate to carry out the Commissioner's 
     duties under this Act.
       ``(d) The Secretary shall promulgate regulations regarding 
     the requirements for the implementation of an order of 
     selection for vocational rehabilitation services under 
     section 101(a)(5)(A) if such services cannot be provided to 
     all eligible individuals with disabilities who apply for such 
     services.
       ``(e) Not later than 180 days after the date of enactment 
     of the Rehabilitation Act Amendments of 1998, the Secretary 
     shall receive public comment and promulgate regulations to 
     implement the amendments made by the Rehabilitation Act 
     Amendments of 1998.
       ``(f) In promulgating regulations to carry out this Act, 
     the Secretary shall promulgate only regulations that are 
     necessary to administer and ensure compliance with the 
     specific requirements of this Act.
       ``(g) There are authorized to be appropriated to carry out 
     this section such sums as may be necessary.


                               ``reports

       ``Sec. 13. (a) Not later than one hundred and eighty days 
     after the close of each fiscal year, the Commissioner shall 
     prepare and submit to the President and to the Congress a 
     full and complete report on the activities carried out under 
     this Act, including the activities and staffing of the 
     information clearinghouse under section 15.
       ``(b) The Commissioner shall collect information to 
     determine whether the purposes of this Act are being met and 
     to assess the performance of programs carried out under this 
     Act. The Commissioner shall take whatever action is necessary 
     to assure that the identity of each individual for which 
     information is supplied under this section is kept 
     confidential, except as otherwise required by law (including 
     regulation).
       ``(c) In preparing the report, the Commissioner shall 
     annually collect and include in the report information based 
     on the information submitted by States in accordance with 
     section 101(a)(10). The Commissioner shall, to the maximum 
     extent appropriate, include in the report all information 
     that is required to be submitted in the reports described in 
     section 321(d) of the Workforce Investment Partnership Act of 
     1998 and that pertains to the employment of individuals with 
     disabilities.


                              ``evaluation

       ``Sec. 14. (a) For the purpose of improving program 
     management and effectiveness, the Secretary, in consultation 
     with the Commissioner, shall evaluate all the programs 
     authorized by this Act, their general effectiveness in 
     relation to their cost, their impact on related programs, and 
     their structure and mechanisms for delivery of services, 
     using appropriate methodology and evaluative research 
     designs. The Secretary shall establish and use standards for 
     the evaluations required by this subsection. Such an 
     evaluation shall be conducted by a person not immediately 
     involved in the administration of the program evaluated.
       ``(b) In carrying out evaluations under this section, the 
     Secretary shall obtain the opinions of program and project 
     participants about the strengths and weaknesses of the 
     programs and projects.
       ``(c) The Secretary shall take the necessary action to 
     assure that all studies, evaluations, proposals, and data 
     produced or developed with Federal funds under this Act shall 
     become the property of the United States.
       ``(d) Such information as the Secretary may determine to be 
     necessary for purposes of the evaluations conducted under 
     this section shall be made available upon request of the 
     Secretary, by the departments and agencies of the executive 
     branch.
       ``(e)(1) To assess the linkages between vocational 
     rehabilitation services and economic and noneconomic 
     outcomes, the Secretary shall continue to conduct a 
     longitudinal study of a national sample of applicants for the 
     services.
       ``(2) The study shall address factors related to attrition 
     and completion of the program through which the services are 
     provided and factors within and outside the program affecting 
     results. Appropriate comparisons shall be used to contrast 
     the experiences of similar persons who do not obtain the 
     services.
       ``(3) The study shall be planned to cover the period 
     beginning on the application of individuals with disabilities 
     for the services, through the eligibility determination and 
     provision of services for the individuals, and a further 
     period of not less than 2 years after the termination of 
     services.
       ``(f)(1) The Commissioner shall identify and disseminate 
     information on exemplary practices concerning vocational 
     rehabilitation.
       ``(2) To facilitate compliance with paragraph (1), the 
     Commissioner shall conduct studies and analyses that identify 
     exemplary practices concerning vocational rehabilitation, 
     including studies in areas relating to providing informed 
     choice in the rehabilitation process, promoting consumer 
     satisfaction, promoting job placement and retention,

[[Page S133]]

     providing supported employment, providing services to 
     particular disability populations, financing personal 
     assistance services, providing assistive technology devices 
     and assistive technology services, entering into cooperative 
     agreements, establishing standards and certification for 
     community rehabilitation programs, converting from 
     nonintegrated to integrated employment, and providing 
     caseload management.
       ``(g) There are authorized to be appropriated to carry out 
     this section such sums as may be necessary.


                      ``information clearinghouse

       ``Sec. 15. (a) The Secretary shall establish a central 
     clearinghouse for information and resource availability for 
     individuals with disabilities which shall provide information 
     and data regarding--
       ``(1) the location, provision, and availability of services 
     and programs for individuals with disabilities, including 
     such information and data provided by statewide partnerships 
     established under section 303 of the Workforce Investment 
     Partnership Act of 1998 regarding such services and programs 
     authorized under such Act;
       ``(2) research and recent medical and scientific 
     developments bearing on disabilities (and their prevention, 
     amelioration, causes, and cures); and
       ``(3) the current numbers of individuals with disabilities 
     and their needs.

     The clearinghouse shall also provide any other relevant 
     information and data which the Secretary considers 
     appropriate.
       ``(b) The Commissioner may assist the Secretary to develop 
     within the Department of Education a coordinated system of 
     information and data retrieval, which will have the capacity 
     and responsibility to provide information regarding the 
     information and data referred to in subsection (a) of this 
     section to the Congress, public and private agencies and 
     organizations, individuals with disabilities and their 
     families, professionals in fields serving such individuals, 
     and the general public.
       ``(c) The office established to carry out the provisions of 
     this section shall be known as the `Office of Information and 
     Resources for Individuals with Disabilities'.
       ``(d) There are authorized to be appropriated to carry out 
     this section such sums as may be necessary.


                          ``transfer of funds

       ``Sec. 16. (a) Except as provided in subsection (b) of this 
     section, no funds appropriated under this Act for any 
     research program or activity may be used for any purpose 
     other than that for which the funds were specifically 
     authorized.
       ``(b) No more than 1 percent of funds appropriated for 
     discretionary grants, contracts, or cooperative agreements 
     authorized by this Act may be used for the purpose of 
     providing non-Federal panels of experts to review 
     applications for such grants, contracts, or cooperative 
     agreements.


                         ``state administration

       ``Sec. 17. The application of any State rule or policy 
     relating to the administration or operation of programs 
     funded by this Act (including any rule or policy based on 
     State interpretation of any Federal law, regulation, or 
     guideline) shall be identified as a State imposed 
     requirement.


                        ``review of applications

       ``Sec. 18. Applications for grants in excess of $100,000 in 
     the aggregate authorized to be funded under this Act, other 
     than grants primarily for the purpose of conducting 
     dissemination or conferences, shall be reviewed by panels of 
     experts which shall include a majority of non-Federal 
     members. Non-Federal members may be provided travel, per 
     diem, and consultant fees not to exceed the daily equivalent 
     of the rate of pay for level 4 of the Senior Executive 
     Service Schedule under section 5382 of title 5, United States 
     Code.

     ``SEC. 19. CARRYOVER.

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

     shall remain available for obligation and expenditure by such 
     recipients during such succeeding fiscal year.
       ``(b) Non-Federal Share.--Such funds shall remain available 
     for obligation and expenditure by a recipient as provided in 
     subsection (a) only to the extent that the recipient complied 
     with any Federal share requirements applicable to the program 
     for the fiscal year for which the funds were appropriated.

     ``SEC. 20. CLIENT ASSISTANCE INFORMATION.

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

     ``SEC. 21. TRADITIONALLY UNDERSERVED POPULATIONS.

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

     SEC. 4. VOCATIONAL REHABILITATION SERVICES.

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

[[Page S134]]

             ``TITLE I--VOCATIONAL REHABILITATION SERVICES

                      ``PART A--GENERAL PROVISIONS

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

       ``(a) Findings; Purpose; Policy.--
       ``(1) Findings.--Congress finds that--
       ``(A) work--
       ``(i) is a valued activity, both for individuals and 
     society; and
       ``(ii) fulfills the need of an individual to be productive, 
     promotes independence, enhances self-esteem, and allows for 
     participation in the mainstream of life in the United States;
       ``(B) as a group, individuals with disabilities experience 
     staggering levels of unemployment and poverty;
       ``(C) individuals with disabilities, including individuals 
     with the most significant disabilities, have demonstrated 
     their ability to achieve gainful employment in integrated 
     settings if appropriate services and supports are provided;
       ``(D) reasons for significant numbers of individuals with 
     disabilities not working, or working at levels not 
     commensurate with their abilities and capabilities, include--
       ``(i) discrimination;
       ``(ii) lack of accessible and available transportation;
       ``(iii) fear of losing health coverage under the medicare 
     and medicaid programs carried out under titles XVIII and XIX 
     of the Social Security Act (42 U.S.C. 1395 et seq. and 1396 
     et seq.) or fear of losing private health insurance; and
       ``(iv) lack of education, training, and supports to meet 
     job qualification standards necessary to secure, retain, 
     regain, or advance in employment;
       ``(E) enforcement of title V and of the Americans with 
     Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) holds the 
     promise of ending discrimination for individuals with 
     disabilities;
       ``(F) the provision of workforce investment activities and 
     vocational rehabilitation services can enable individuals 
     with disabilities, including individuals with the most 
     significant disabilities, to pursue meaningful careers by 
     securing gainful employment commensurate with their abilities 
     and capabilities; and
       ``(G) linkages between the vocational rehabilitation 
     programs established under this title and other components of 
     the statewide workforce investment system are critical to 
     ensure effective and meaningful participation by individuals 
     with disabilities in workforce investment activities.
       ``(2) Purpose.--The purpose of this title is to assist 
     States in operating statewide comprehensive, coordinated, 
     effective, efficient, and accountable programs of vocational 
     rehabilitation, each of which is--
       ``(A) an integral part of a statewide workforce investment 
     system; and
       ``(B) designed to assess, plan, develop, and provide 
     vocational rehabilitation services for individuals with 
     disabilities, consistent with their strengths, resources, 
     priorities, concerns, abilities, capabilities, interests, and 
     informed choice, so that such individuals may prepare for and 
     engage in gainful employment.
       ``(3) Policy.--It is the policy of the United States that 
     such a program shall be carried out in a manner consistent 
     with the following principles:
       ``(A) Individuals with disabilities, including individuals 
     with the most significant disabilities, are generally 
     presumed to be capable of engaging in gainful employment and 
     the provision of individualized vocational rehabilitation 
     services can improve their ability to become gainfully 
     employed.
       ``(B) Individuals with disabilities must be provided the 
     opportunities to obtain gainful employment in integrated 
     settings.
       ``(C) Individuals who are applicants for such programs or 
     eligible to participate in such programs must be active and 
     full partners, in collaboration with qualified vocational 
     rehabilitation professionals, in the vocational 
     rehabilitation process, making meaningful and informed 
     choices--
       ``(i) during assessments for determining eligibility and 
     vocational rehabilitation needs; and
       ``(ii) in the selection of employment outcomes for the 
     individuals, services needed to achieve the outcomes, 
     entities providing such services, and the methods used to 
     secure such services.
       ``(D) Families and other natural supports can play 
     important roles in the success of a vocational rehabilitation 
     program, if the individual with a disability involved 
     requests, desires, or needs such supports.
       ``(E) Vocational rehabilitation counselors that are trained 
     and prepared in accordance with State policies and procedures 
     as described in section 101(a)(7)(A)(iii) (referred to 
     individually in this title as a `qualified vocational 
     rehabilitation counselor'), other qualified rehabilitation 
     personnel, and other qualified personnel facilitate the 
     accomplishment of the employment outcomes and objectives of 
     an individual.
       ``(F) Individuals with disabilities and the individuals' 
     representatives are full partners in a vocational 
     rehabilitation program and must be involved on a regular 
     basis and in a meaningful manner with respect to policy 
     development and implementation.
       ``(G) Accountability measures must facilitate the 
     accomplishment of the goals and objectives of the program, 
     including providing vocational rehabilitation services to, 
     among others, individuals with the most significant 
     disabilities.
       ``(b) Authorization of Appropriations.--
       ``(1) In general.--For the purpose of making grants to 
     States under part B to assist States in meeting the costs of 
     vocational rehabilitation services provided in accordance 
     with State plans under section 101, there are authorized to 
     be appropriated such sums as may be necessary for fiscal 
     years 1998 through 2004, except that the amount to be 
     appropriated for a fiscal year shall not be less than the 
     amount of the appropriation under this paragraph for the 
     immediately preceding fiscal year, increased by the 
     percentage change in the Consumer Price Index determined 
     under subsection (c) for the immediately preceding fiscal 
     year.
       ``(2) Reference.--The reference in paragraph (1) to grants 
     to States under part B shall not be considered to refer to 
     grants under section 112.
       ``(c) Consumer Price Index.--
       ``(1) Percentage change.--No later than November 15 of each 
     fiscal year (beginning with fiscal year 1979), the Secretary 
     of Labor shall publish in the Federal Register the percentage 
     change in the Consumer Price Index published for October of 
     the preceding fiscal year and October of the fiscal year in 
     which such publication is made.
       ``(2) Application.--
       ``(A) Increase.--If in any fiscal year the percentage 
     change published under paragraph (1) indicates an increase in 
     the Consumer Price Index, then the amount to be appropriated 
     under subsection (b)(1) for the subsequent fiscal year shall 
     be at least the amount appropriated under subsection (b)(1) 
     for the fiscal year in which the publication is made under 
     paragraph (1) increased by such percentage change.
       ``(B) No increase or decrease.--If in any fiscal year the 
     percentage change published under paragraph (1) does not 
     indicate an increase in the Consumer Price Index, then the 
     amount to be appropriated under subsection (b)(1) for the 
     subsequent fiscal year shall be at least the amount 
     appropriated under subsection (b)(1) for the fiscal year in 
     which the publication is made under paragraph (1).
       ``(3) Definition.--For purposes of this section, the term 
     `Consumer Price Index' means the Consumer Price Index for All 
     Urban Consumers, published monthly by the Bureau of Labor 
     Statistics.
       ``(d) Extension.--
       ``(1) In general.--
       ``(A) Authorization or duration of program.--Unless the 
     Congress in the regular session which ends prior to the 
     beginning of the terminal fiscal year--
       ``(i) of the authorization of appropriations for the 
     program authorized by the State grant program under part B of 
     this title; or
       ``(ii) of the duration of the program authorized by the 
     State grant program under part B of this title;

     has passed legislation which would have the effect of 
     extending the authorization or duration (as the case may be) 
     of such program, such authorization or duration is 
     automatically extended for 1 additional year for the program 
     authorized by this title.
       ``(B) Calculation.--The amount authorized to be 
     appropriated for the additional fiscal year described in 
     subparagraph (A) shall be an amount equal to the amount 
     appropriated for such program for fiscal year 2004, increased 
     by the percentage change in the Consumer Price Index 
     determined under subsection (c) for the immediately preceding 
     fiscal year, if the percentage change indicates an increase.
       ``(2) Construction.--
       ``(A) Passage of legislation.--For the purposes of 
     paragraph (1)(A), Congress shall not be deemed to have passed 
     legislation unless such legislation becomes law.
       ``(B) Acts or determinations of commissioner.--In any case 
     where the Commissioner is required under an applicable 
     statute to carry out certain acts or make certain 
     determinations which are necessary for the continuation of 
     the program authorized by this title, if such acts or 
     determinations are required during the terminal year of such 
     program, such acts and determinations shall be required 
     during any fiscal year in which the extension described in 
     that part of paragraph (1) that follows clause (ii) of 
     paragraph (1)(A) is in effect.

     ``SEC. 101. STATE PLANS.

       ``(a) Plan Requirements.--
       ``(1) In general.--
       ``(A) Submission.--To be eligible to participate in 
     programs under this title, a State shall submit to the 
     Commissioner a State plan for vocational rehabilitation 
     services that meets the requirements of this section, on the 
     same date that the State submits a State plan under section 
     304 of the Workforce Investment Partnership Act of 1998.
       ``(B) Nonduplication.--The State shall not be required to 
     submit, in the State plan for vocational rehabilitation 
     services, policies, procedures, or descriptions required 
     under this title that have been previously submitted to the 
     Commissioner and that demonstrate that such State meets the 
     requirements of this title, including any policies, 
     procedures, or descriptions submitted under this title as in 
     effect on the day before the effective date of the 
     Rehabilitation Act Amendments of 1998.
       ``(C) Duration.--The State plan shall remain in effect 
     subject to the submission of such modifications as the State 
     determines to be necessary or as the Commissioner may require 
     based on a change in State policy, a change in Federal law 
     (including regulations), an interpretation of this Act by a

[[Page S135]]

     Federal court or the highest court of the State, or a finding 
     by the Commissioner of State noncompliance with the 
     requirements of this Act, until the State submits and 
     receives approval of a new State plan.
       ``(2) Designated state agency; designated state unit.--
       ``(A) Designated state agency.--The State plan shall 
     designate a State agency as the sole State agency to 
     administer the plan, or to supervise the administration of 
     the plan by a local agency, except that--
       ``(i) where, under State law, the State agency for 
     individuals who are blind or another agency that provides 
     assistance or services to adults who are blind is authorized 
     to provide vocational rehabilitation services to individuals 
     who are blind, that agency may be designated as the sole 
     State agency to administer the part of the plan under which 
     vocational rehabilitation services are provided for 
     individuals who are blind (or to supervise the administration 
     of such part by a local agency) and a separate State agency 
     may be designated as the sole State agency to administer or 
     supervise the administration of the rest of the State plan;
       ``(ii) the Commissioner, on the request of a State, may 
     authorize the designated State agency to share funding and 
     administrative responsibility with another agency of the 
     State or with a local agency in order to permit the agencies 
     to carry out a joint program to provide services to 
     individuals with disabilities, and may waive compliance, with 
     respect to vocational rehabilitation services furnished under 
     the joint program, with the requirement of paragraph (4) that 
     the plan be in effect in all political subdivisions of the 
     State; and
       ``(iii) in the case of American Samoa, the appropriate 
     State agency shall be the Governor of American Samoa.
       ``(B) Designated state unit.--The State agency designated 
     under subparagraph (A) shall be--
       ``(i) a State agency primarily concerned with vocational 
     rehabilitation, or vocational and other rehabilitation, of 
     individuals with disabilities; or
       ``(ii) if not such an agency, the State agency (or each 
     State agency if 2 are so designated) shall include a 
     vocational rehabilitation bureau, division, or other 
     organizational unit that--

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

       ``(C) Responsibility for services for the blind.--If the 
     State has designated only 1 State agency pursuant to 
     subparagraph (A), the State may assign responsibility for the 
     part of the plan under which vocational rehabilitation 
     services are provided for individuals who are blind to an 
     organizational unit of the designated State agency and assign 
     responsibility for the rest of the plan to another 
     organizational unit of the designated State agency, with the 
     provisions of subparagraph (B) applying separately to each of 
     the designated State units.
       ``(3) Non-federal share.--The State plan shall provide for 
     financial participation by the State, or if the State so 
     elects, by the State and local agencies, to provide the 
     amount of the non-Federal share of the cost of carrying out 
     part B.
       ``(4) Statewideness.--The State plan shall provide that the 
     plan shall be in effect in all political subdivisions of the 
     State, except that in the case of any activity that, in the 
     judgment of the Commissioner, is likely to assist in 
     promoting the vocational rehabilitation of substantially 
     larger numbers of individuals with disabilities or groups of 
     individuals with disabilities, the Commissioner may waive 
     compliance with the requirement that the plan be in effect in 
     all political subdivisions of the State to the extent and for 
     such period as may be provided in accordance with regulations 
     prescribed by the Commissioner. The Commissioner may waive 
     compliance with the requirement only if the non-Federal share 
     of the cost of the vocational rehabilitation services is 
     provided from funds made available by a local agency 
     (including, to the extent permitted by such regulations, 
     funds contributed to such agency by a private agency, 
     organization, or individual).
       ``(5) Order of selection for vocational rehabilitation 
     services.--In the event that vocational rehabilitation 
     services cannot be provided to all eligible individuals with 
     disabilities in the State who apply for the services, the 
     State plan shall--
       ``(A) show the order to be followed in selecting eligible 
     individuals to be provided vocational rehabilitation 
     services;
       ``(B) provide the justification for the order of selection;
       ``(C) include an assurance that, in accordance with 
     criteria established by the State for the order of selection, 
     individuals with the most significant disabilities will be 
     selected first for the provision of vocational rehabilitation 
     services; and
       ``(D) provide that eligible individuals, who do not meet 
     the order of selection criteria, shall have access to 
     services provided through the information and referral system 
     implemented under paragraph (20).
       ``(6) Methods for administration.--
       ``(A) In general.--The State plan shall provide for such 
     methods of administration as are found by the Commissioner to 
     be necessary for the proper and efficient administration of 
     the plan.
       ``(B) Employment of individuals with disabilities.--The 
     State plan shall provide that the designated State agency, 
     and entities carrying out community rehabilitation programs 
     in the State, who are in receipt of assistance under this 
     title shall take affirmative action to employ and advance in 
     employment qualified individuals with disabilities covered 
     under, and on the same terms and conditions as set forth in, 
     section 503.
       ``(C) Personnel and program standards for community 
     rehabilitation programs.--The State plan shall provide that 
     the designated State unit shall establish, maintain, and 
     implement minimum standards for community rehabilitation 
     programs providing services to individuals under this title, 
     including--
       ``(i) standards--

       ``(I) governing community rehabilitation programs and 
     qualified personnel utilized for the provision of vocational 
     rehabilitation services through such programs; and
       ``(II) providing, to the extent that providers of 
     vocational rehabilitation services utilize personnel who do 
     not meet the highest requirements in the State applicable to 
     a particular profession or discipline, that the providers 
     shall take steps to ensure the retraining or hiring of 
     personnel so that such personnel meet appropriate 
     professional standards in the State; and

       ``(ii) minimum standards to ensure the availability of 
     personnel, to the maximum extent feasible, trained to 
     communicate in the native language or mode of communication 
     of an individual receiving services through such programs.
       ``(D) Facilities.--The State plan shall provide that 
     facilities used in connection with the delivery of services 
     assisted under the State plan shall comply with the Act 
     entitled `An Act to insure that certain buildings financed 
     with Federal funds are so designed and constructed as to be 
     accessible to the physically handicapped', approved on August 
     12, 1968 (commonly known as the `Architectural Barriers Act 
     of 1968'), with section 504, and with the Americans with 
     Disabilities Act of 1990.
       ``(7) Comprehensive system of personnel development.--The 
     State plan shall include--
       ``(A) a description, consistent with the purposes of this 
     Act, of a comprehensive system of personnel development for 
     personnel involved in carrying out this title, which, at a 
     minimum, shall consist of--
       ``(i) a description of the procedures and activities the 
     designated State agency will implement and undertake to 
     address the current and projected needs for personnel, and 
     training needs of such personnel, in the designated State 
     unit to ensure that the personnel are adequately trained and 
     prepared;
       ``(ii) a plan to coordinate and facilitate efforts between 
     the designated State unit and institutions of higher 
     education and professional associations to recruit, prepare, 
     and retain qualified personnel, including personnel from 
     culturally or linguistically diverse backgrounds, and 
     personnel that include individuals with disabilities;
       ``(iii) a description of policies and procedures on the 
     establishment and maintenance of reasonable standards to 
     ensure that personnel, including professionals and 
     paraprofessionals, are adequately trained and prepared, 
     including--

       ``(I) standards that are consistent with any national or 
     State approved or recognized certification, licensing, 
     registration, or other comparable requirements that apply to 
     the area in which such personnel are providing vocational 
     rehabilitation services; and
       ``(II) to the extent that such standards are not based on 
     the highest requirements in the State applicable to a 
     particular profession or discipline, the steps the State will 
     take to ensure the retraining or hiring of personnel within 
     the designated State unit so that such personnel meet 
     appropriate professional standards in the State;

       ``(iv) a description of a system for evaluating the 
     performance of vocational rehabilitation counselors, 
     coordinators, and other personnel used in the State, 
     including a description of how the system facilitates the 
     accomplishment of the purpose and policy of this title, 
     including the policy of serving individuals with the most 
     significant disabilities;
       ``(v) a description of standards to ensure the availability 
     of personnel within the designated State unit who are, to the 
     maximum extent feasible, trained to communicate in the native 
     language or mode of communication of an applicant or eligible 
     individual; and
       ``(vi) a detailed description, including a budget, of how 
     the funds reserved under subparagraph (B) will be expended to 
     carry out the comprehensive system for personnel development, 
     including the provision of in-service training for personnel 
     of the designated State unit;
       ``(B) assurances that--
       ``(i) at a minimum, the State will reserve from the 
     allotment made to the State under section 110 an amount to 
     carry out the comprehensive system of personnel development, 
     including the provision of in-service training for personnel 
     of the designated State unit;

[[Page S136]]

       ``(ii) for fiscal year 1999, the amount reserved will be 
     equal to the amount of the funds the State received for 
     fiscal year 1998 to provide in-service training under section 
     302, or for any State that did not receive those funds for 
     fiscal year 1998, an amount determined by the Commissioner; 
     and
       ``(iii) for each subsequent year, the amount reserved under 
     this subparagraph will be equal to the amount reserved under 
     this subparagraph for the previous fiscal year, increased by 
     the percentage change in the Consumer Price Index published 
     under section 100(c) in such previous fiscal year, if the 
     percentage change indicates an increase; and
       ``(C) an assurance that the standards adopted by a State in 
     accordance with subparagraph (A)(iii) shall not permit 
     discrimination on the basis of disability with regard to 
     training and hiring.
       ``(8) Comparable services and benefits.--
       ``(A) Determination of availability.--
       ``(i) In general.--The State plan shall include an 
     assurance that, prior to providing any vocational 
     rehabilitation service to an eligible individual, except 
     those services specified in paragraph (5)(D) and in 
     paragraphs (1) through (4) and (14) of section 103(a), the 
     designated State unit will determine whether comparable 
     services and benefits are available under any other program 
     (other than a program carried out under this title) unless 
     such a determination would interrupt or delay--

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

       ``(ii) Awards and scholarships.--For purposes of clause 
     (i), comparable benefits do not include awards and 
     scholarships based on merit.
       ``(B) Interagency agreement.--The State plan shall include 
     an assurance that the Chief Executive Officer of the State or 
     the designee of such officer will ensure that an interagency 
     agreement or other mechanism for interagency coordination 
     takes effect between any appropriate public entity, including 
     a component of the statewide workforce investment system, and 
     the designated State unit, in order to ensure the provision 
     of vocational rehabilitation services described in 
     subparagraph (A) (other than those services specified in 
     paragraph (5)(D), and in paragraphs (1) through (4) and (14) 
     of section 103(a)), that are included in the individualized 
     rehabilitation employment plan of an eligible individual, 
     including the provision of such vocational rehabilitation 
     services during the pendency of any dispute described in 
     clause (iii). Such agreement or mechanism shall include the 
     following:
       ``(i) Agency financial responsibility.--An identification 
     of, or a description of a method for defining, the financial 
     responsibility of such public entity for providing such 
     services, and a provision stating that the financial 
     responsibility of such public entity for providing such 
     services, including the financial responsibility of the State 
     agency responsible for administering the medicaid program 
     under title XIX of the Social Security Act (42 U.S.C. 1396 et 
     seq.), other public agencies, and public institutions of 
     higher education, shall precede the financial responsibility 
     of the designated State unit especially with regard to the 
     provision of auxiliary aids and services to the maximum 
     extent allowed by law.
       ``(ii) Conditions, terms, and procedures of 
     reimbursement.--Information specifying the conditions, terms, 
     and procedures under which a designated State unit shall 
     pursue and obtain reimbursement by other public agencies for 
     providing such services.
       ``(iii) Interagency disputes.--Information specifying 
     procedures for resolving interagency disputes under the 
     agreement or other mechanism (including procedures under 
     which the designated State unit may initiate proceedings to 
     secure reimbursement from other agencies or otherwise 
     implement the provisions of the agreement or mechanism).
       ``(iv) Coordination of services procedures.--Information 
     specifying policies and procedures for agencies to determine 
     and identify the interagency coordination responsibilities of 
     each agency to promote the coordination and timely delivery 
     of vocational rehabilitation services (except those services 
     specified in paragraph (5)(D) and in paragraphs (1) through 
     (4) and (14) of section 103(a)).
       ``(C) Responsibilities of other agencies.--
       ``(i) Responsibilities under other law.--Notwithstanding 
     subparagraph (B), if any public agency other than a 
     designated State unit is obligated under Federal or State 
     law, or assigned responsibility under State policy or under 
     this paragraph, to provide or pay for any services that are 
     also considered to be vocational rehabilitation services 
     (other than those specified in paragraph (5)(D) and in 
     paragraphs (1) through (4) and (14) of section 103(a)), such 
     public agency shall fulfill that obligation or 
     responsibility, either directly or by contract or other 
     arrangement.
       ``(ii) Reimbursement.--In a case in which a public agency 
     other than the designated State unit fails to fulfill the 
     financial responsibility of the agency described in this 
     paragraph to provide services described in clause (i), the 
     designated State unit may claim reimbursement from such 
     public agency for such services. Such public agency shall 
     reimburse the designated State unit pursuant to the terms of 
     the interagency agreement or other mechanism in effect under 
     this paragraph according to the procedures established 
     pursuant to subparagraph (B)(ii).
       ``(D) Methods.--The Chief Executive Officer of a State may 
     meet the requirements of subparagraph (B) through--
       ``(i) a State statute or regulation;
       ``(ii) a signed agreement between the respective agency 
     officials that clearly identifies the responsibilities of 
     each agency relating to the provision of services; or
       ``(iii) another appropriate method, as determined by the 
     designated State unit.
       ``(9) Individualized rehabilitation employment plan.--
       ``(A) Development and implementation.--The State plan shall 
     include an assurance that an individualized rehabilitation 
     employment plan meeting the requirements of section 102(b) 
     will be developed and implemented in a timely manner for an 
     individual subsequent to the determination of the eligibility 
     of the individual for services under this title, except that 
     in a State operating under an order of selection described in 
     paragraph (5), the plan will be developed and implemented 
     only for individuals meeting the order of selection criteria 
     of the State.
       ``(B) Provision of services.--The State plan shall include 
     an assurance that such services will be provided in 
     accordance with the provisions of the individualized 
     rehabilitation employment plan.
       ``(10) Reporting requirements.--
       ``(A) In general.--The State plan shall include an 
     assurance that the designated State agency will submit 
     reports in the form and level of detail and at the time 
     required by the Commissioner regarding applicants for, and 
     eligible individuals receiving, services under this title.
       ``(B) Annual reporting.--In specifying the information to 
     be submitted in the reports, the Commissioner shall require 
     annual reporting on the eligible individuals receiving the 
     services, on those specific data elements described in 
     section 321(d)(2) of the Workforce Investment Partnership Act 
     of 1998 that are determined by the Secretary to be relevant 
     in assessing the performance of designated State units in 
     carrying out the vocational rehabilitation program 
     established under this title.
       ``(C) Additional data.--In specifying the information 
     required to be submitted in the reports, the Commissioner 
     shall require additional data with regard to applicants and 
     eligible individuals related to--
       ``(i) the number of applicants and the number of 
     individuals determined to be eligible or ineligible for the 
     program carried out under this title, including--

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

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

       ``(I) the number who received services under paragraph 
     (5)(D), but not assistance under an individualized 
     rehabilitation employment plan; and
       ``(II) the number who received assistance under an 
     individualized rehabilitation employment plan consistent with 
     section 102(b);

       ``(iii) the number of individuals receiving public 
     assistance and the amount of the public assistance on the 
     date of application and on the last date of participation in 
     the program carried out under this title;
       ``(iv) the number of individuals with disabilities who 
     ended their participation in the program and the number who 
     achieved employment outcomes after receiving vocational 
     rehabilitation services; and
       ``(v) the number of individuals who ended their 
     participation in the program and who were employed 6 months 
     and 12 months after securing or regaining employment, or, in 
     the case of individuals whose employment outcome was to 
     retain or advance in employment, who were employed 6 months 
     and 12 months after achieving their employment outcome, 
     including--

       ``(I) the number of such individuals who earned the minimum 
     wage rate specified in section 6(a)(1) of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 206(a)(1)) or another wage 
     level set by the Commissioner, during such employment;
       ``(II) the number of such individuals who received 
     employment benefits from an employer during such employment; 
     and
       ``(III) the number of such individuals whose public 
     assistance was terminated or reduced after such 
     participation;

       ``(D) Costs and results.--The Commissioner shall also 
     require that the designated State agency include in the 
     reports information on--
       ``(i) the costs under this title of conducting 
     administration, providing assessment services, counseling and 
     guidance, and other direct services provided by designated 
     State agency staff, providing services purchased under 
     individualized rehabilitation employment plans, supporting 
     small business enterprises, establishing, developing, and 
     improving community rehabilitation programs, and providing 
     other services to groups; and
       ``(ii) the results of annual evaluation by the State of 
     program effectiveness under paragraph (15)(E).

[[Page S137]]

       ``(E) Additional information.--The Commissioner shall 
     require that each designated State unit include in the 
     reports additional information related to the applicants and 
     eligible individuals, obtained either through a complete 
     count or sampling, including--
       ``(i) information on--

       ``(I) age, gender, race, ethnicity, education, type of 
     impairment, severity of disability, and whether the 
     individuals are students described in clause (i) or (ii)(II) 
     of paragraph (11)(D);
       ``(II) dates of application, determination of eligibility 
     or ineligibility, initiation of the individualized 
     rehabilitation employment plan, and termination of 
     participation in the program;
       ``(III) earnings at the time of application for the program 
     and termination of participation in the program;
       ``(IV) work status and occupation;
       ``(V) types of services, including assistive technology 
     services and assistive technology devices, provided under the 
     program;
       ``(VI) types of public or private programs or agencies that 
     furnished services under the program; and
       ``(VII) the reasons for individuals terminating 
     participation in the program without achieving an employment 
     outcome; and

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

       ``(I) the State performance measures established under 
     section 321(b) of the Workforce Investment Partnership Act of 
     1998 to the extent the measures are applicable to individuals 
     with disabilities; and
       ``(II) the standards and indicators established pursuant to 
     section 106.

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

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

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

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

       ``(v) identification of staff roles, responsibilities, and 
     available resources, and specification of the financial 
     responsibility of each component of the statewide workforce 
     investment system with regard to paying for necessary 
     services (consistent with State law and Federal 
     requirements); and
       ``(vi) specification of procedures for resolving disputes 
     among such components.
       ``(B) Replication of cooperative agreements.--The State 
     plan shall provide for the replication of such cooperative 
     agreements at the local level between individual offices of 
     the designated State unit and local entities carrying out 
     activities through the statewide workforce investment system.
       ``(C) Interagency cooperation with other agencies.--The 
     State plan shall include descriptions of interagency 
     cooperation with, and utilization of the services and 
     facilities of, the Federal, State, and local agencies and 
     programs that are not carrying out activities through the 
     statewide workforce investment system.
       ``(D) Coordination with education officials.--The State 
     plan shall contain plans, policies, and procedures for 
     coordination between the designated State agency and 
     education officials that are designed to facilitate the 
     transition of students who are individuals with disabilities 
     described in section 7(20)(B) from the receipt of educational 
     services in school to the receipt of vocational 
     rehabilitation services under this title, including 
     information on a formal interagency agreement with the State 
     educational agency that, at a minimum, provides for--
       ``(i) consultation and technical assistance to assist 
     educational agencies in planning for the transition of 
     students who are individuals with disabilities described in 
     section 7(20)(B) from school to post-school activities, 
     including vocational rehabilitation services;
       ``(ii)(I) transition planning by personnel of the 
     designated State agency and educational agency personnel for 
     students with disabilities described in clause (i) that 
     facilitates the development and completion of their 
     individualized education programs under section 614(d) of the 
     Individuals with Disabilities Education Act (as added by 
     section 101 of Public Law 105-17); and
       ``(II) transition planning and services for students who 
     are eligible to receive services under this title and who 
     will be exiting school in the school year in which the 
     planning and services are provided;
       ``(iii) the roles and responsibilities, including financial 
     responsibilities, of each agency, including provisions for 
     determining State lead agencies and qualified personnel 
     responsible for the transition services described in clause 
     (ii)(II); and
       ``(iv) procedures for outreach to and identification of 
     students with disabilities described in clause (ii)(II) who 
     need the transition services.
       ``(E) Coordination with statewide independent living 
     councils and independent living centers.--The State plan 
     shall include an assurance that the designated State unit, 
     the Statewide Independent Living Council established under 
     section 705, and the independent living centers described in 
     part C of title VII within the State have developed working 
     relationships and coordinate their activities.
       ``(F) Cooperative agreement with recipients of grants for 
     services to american indians.--In applicable cases, the State 
     plan shall include an assurance that the State has entered 
     into a formal cooperative agreement with each grant recipient 
     in the State that receives funds under part C. The agreement 
     shall describe strategies for collaboration and coordination 
     in providing vocational rehabilitation services to American 
     Indians who are individuals with disabilities, including--
       ``(i) strategies for interagency referral and information 
     sharing that will assist in eligibility determinations and 
     the development of individualized rehabilitation employment 
     plans;
       ``(ii) procedures for ensuring that American Indians who 
     are individuals with disabilities and are living near a 
     reservation or tribal service area are provided vocational 
     rehabilitation services; and
       ``(iii) provisions for sharing resources in cooperative 
     studies and assessments, joint training activities, and other 
     collaborative activities designed to improve the provision of 
     services to American Indians who are individuals with 
     disabilities.
       ``(12) Residency.--The State plan shall include an 
     assurance that the State will not impose a residence 
     requirement that excludes from services provided under the 
     plan any individual who is present in the State.
       ``(13) Services to american indians.--The State plan shall 
     include an assurance that, except as otherwise provided in 
     part C, the designated State agency will provide vocational 
     rehabilitation services to American Indians who are 
     individuals with disabilities residing in the State to the 
     same extent as the designated State agency provides such 
     services to other significant populations of individuals with 
     disabilities residing in the State.
       ``(14) Annual review of individuals in extended employment 
     or other employment under special certificate provisions of 
     the fair labor standards Act of 1938.--The State plan shall 
     provide for--
       ``(A) an annual review and reevaluation of the status of 
     each individual with a disability served under this title who 
     has achieved an employment outcome either in an extended 
     employment setting in a community rehabilitation program or 
     any other employment under section 14(c) of the Fair Labor 
     Standards Act (29 U.S.C. 214(c)) for 2 years after the 
     achievement of the outcome (and annually thereafter if 
     requested by the individual or, if appropriate, the 
     individual's representative), to determine the interests, 
     priorities, and needs of the individual with respect to 
     competitive employment or training for competitive 
     employment;
       ``(B) input into the review and reevaluation, and a signed 
     acknowledgement that such review and reevaluation have been 
     conducted, by the individual with a disability, or, if 
     appropriate, the individual's representative; and
       ``(C) maximum efforts, including the identification and 
     provision of vocational rehabilitation services, reasonable 
     accommodations, and other necessary support services, to 
     assist the individuals described in subparagraph (A) in 
     engaging in competitive employment.
       ``(15) Annual state goals and reports of progress.--
       ``(A) Assessments and estimates.--The State plan shall--
       ``(i) include the results of a comprehensive, statewide 
     assessment, jointly conducted by the designated State unit 
     and the State Rehabilitation Council (if the State has such a 
     Council) every 3 years, describing the rehabilitation needs 
     of individuals with disabilities residing within the State, 
     particularly the vocational rehabilitation services needs 
     of--

[[Page S138]]

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

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

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

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

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

       ``(ii) provide that the designated State unit and the State 
     Rehabilitation Council, if the State has such a Council, 
     shall jointly submit to the Commissioner an annual report 
     that contains the information described in clause (i).
       ``(16) Public comment.--The State plan shall--
       ``(A) provide that the designated State agency, prior to 
     the adoption of any policies or procedures governing the 
     provision of vocational rehabilitation services under the 
     State plan (including making any amendment to such policies 
     and procedures), shall conduct public meetings throughout the 
     State, after providing adequate notice of the meetings, to 
     provide the public, including individuals with disabilities, 
     an opportunity to comment on the policies or procedures, and 
     actively consult with the Director of the client assistance 
     program carried out under section 112, and, as appropriate, 
     Indian tribes, tribal organizations, and Native Hawaiian 
     organizations on the policies or procedures; and
       ``(B) provide that the designated State agency (or each 
     designated State agency if 2 agencies are designated) and any 
     sole agency administering the plan in a political subdivision 
     of the State, shall take into account, in connection with 
     matters of general policy arising in the administration of 
     the plan, the views of--
       ``(i) individuals and groups of individuals who are 
     recipients of vocational rehabilitation services, or in 
     appropriate cases, the individuals' representatives;
       ``(ii) personnel working in programs that provide 
     vocational rehabilitation services to individuals with 
     disabilities;
       ``(iii) providers of vocational rehabilitation services to 
     individuals with disabilities;
       ``(iv) the director of the client assistance program; and
       ``(v) the State Rehabilitation Council, if the State has 
     such a Council.
       ``(17) Prohibition on use of funds for construction of 
     facilities.--The State plan shall contain an assurance that 
     the State will not use any funds made available under this 
     title for the construction of facilities.
       ``(18) Innovation and expansion activities.--The State plan 
     shall--
       ``(A) include an assurance that the State will reserve and 
     use a portion of the funds allotted to the State under 
     section 110--
       ``(i) for the development and implementation of innovative 
     approaches to expand and improve the provision of vocational 
     rehabilitation services to individuals with disabilities 
     under this title, particularly individuals with the most 
     significant disabilities, consistent with the findings of the 
     statewide assessment and goals and priorities of the State as 
     described in paragraph (15); and
       ``(ii) to support the funding of--

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

       ``(B) include a description of how the reserved funds will 
     be utilized; and
       ``(C) provide that the State shall submit to the 
     Commissioner an annual report containing a description of how 
     the reserved funds will be utilized.
       ``(19) Choice.--The State plan shall include an assurance 
     that applicants and eligible individuals or, as appropriate, 
     the applicants' representatives or individuals' 
     representatives, will be provided information and support 
     services to assist the applicants and individuals in 
     exercising informed choice throughout the rehabilitation 
     process, consistent with the provisions of section 102(d).
       ``(20) Information and referral services.--
       ``(A) In general.--The State plan shall include an 
     assurance that the designated State agency will implement an 
     information and referral system adequate to ensure that 
     individuals with disabilities will be provided accurate 
     vocational rehabilitation information, using appropriate 
     modes of communication, to assist such individuals in 
     preparing for, securing, retaining, or regaining employment, 
     and will be appropriately referred to Federal and State 
     programs (other than the vocational rehabilitation program 
     carried out under this title), including other components of 
     the statewide workforce investment system in the State.
       ``(B) Services.--In providing activities through the system 
     established under subparagraph (A), the State may include 
     services consisting of the provision of individualized 
     counseling and guidance, individualized vocational 
     exploration, supervised job placement referrals, and 
     assistance in securing reasonable accommodations for eligible 
     individuals who do not meet the order of selection criteria 
     used by the State, to the extent that such services are not 
     purchased by the designated State unit.
       ``(21) State independent consumer-controlled commission; 
     state rehabilitation council.--
       ``(A) Commission or council.--The State plan shall provide 
     that either--
       ``(i) the designated State agency is an independent 
     commission that--

[[Page S139]]

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

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

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

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

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

       ``(aa) all plans, reports, and other information required 
     under this title to be submitted to the Secretary;
       ``(bb) all policies, and information on all practices and 
     procedures, of general applicability provided to or used by 
     rehabilitation personnel in carrying out this title; and
       ``(cc) copies of due process hearing decisions issued under 
     this title, which shall be transmitted in such a manner as to 
     ensure that the identity of the participants in the hearings 
     is kept confidential.
       ``(B) More than 1 designated state agency.--In the case of 
     a State that, under section 101(a)(2), designates a State 
     agency to administer the part of the State plan under which 
     vocational rehabilitation services are provided for 
     individuals who are blind (or to supervise the administration 
     of such part by a local agency) and designates a separate 
     State agency to administer the rest of the State plan, the 
     State shall either establish a State Rehabilitation Council 
     for each of the 2 agencies that does not meet the 
     requirements in subparagraph (A)(i), or establish 1 State 
     Rehabilitation Council for both agencies if neither agency 
     meets the requirements of subparagraph (A)(i).
       ``(22) Supported employment state plan supplement.--The 
     State plan shall include an assurance that the State has an 
     acceptable plan for carrying out part C of title VI, 
     including the use of funds under that part to supplement 
     funds made available under part B of this title to pay for 
     the cost of services leading to supported employment.
       ``(23) Electronic and information technology regulations.--
     The State plan shall include an assurance that the State, and 
     any recipient or subrecipient of funds made available to the 
     State under this title--
       ``(A) will comply with the requirements of section 508, 
     including the regulations established under that section; and
       ``(B) will designate an employee to coordinate efforts to 
     comply with section 508 and will adopt grievance procedures 
     that incorporate due process standards and provide for the 
     prompt and equitable resolution of complaints concerning such 
     requirements.
       ``(24) Annual updates.--The plan shall include an assurance 
     that the State will submit to the Commissioner reports 
     containing annual updates of the information required under 
     paragraph (7) (relating to a comprehensive system of 
     personnel development) and any other updates of the 
     information required under this section that are requested by 
     the Commissioner, and annual reports as provided in 
     paragraphs (15) (relating to assessments, estimates, goals 
     and priorities, and reports of progress) and (18) (relating 
     to innovation and expansion), at such time and in such manner 
     as the Secretary may determine to be appropriate.
       ``(b) Approval; Disapproval of the State Plan.--
       ``(1) Approval.--The Commissioner shall approve any plan 
     that the Commissioner finds fulfills the conditions specified 
     in this section, and shall disapprove any plan that does not 
     fulfill such conditions.
       ``(2) Disapproval.--Prior to disapproval of the State plan, 
     the Commissioner shall notify the State of the intention to 
     disapprove the plan and shall afford the State reasonable 
     notice and opportunity for a hearing.

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

       ``(a) Eligibility.--
       ``(1) Criterion for eligibility.--An individual is eligible 
     for assistance under this title if the individual--
       ``(A) is an individual with a disability under section 
     7(20)(A); and
       ``(B) requires vocational rehabilitation services to 
     prepare for, secure, retain, or regain employment.
       ``(2) Presumption of benefit.--
       ``(A) Demonstration.--For purposes of this section, an 
     individual shall be presumed to be an individual that can 
     benefit in terms of an employment outcome from vocational 
     rehabilitation services under section 7(20)(A), unless the 
     designated State unit involved can demonstrate by clear and 
     convincing evidence that such individual is incapable of 
     benefiting in terms of an employment outcome from vocational 
     rehabilitation services due to the severity of the disability 
     of the individual.
       ``(B) Methods.--In making the demonstration required under 
     subparagraph (A), the designated State unit shall explore the 
     individual's abilities, capabilities, and capacity to perform 
     in work situations, through the use of trial work 
     experiences, as described in section 7(2)(D), with 
     appropriate supports provided through the designated State 
     unit, except under limited circumstances when an individual 
     can not take advantage of such experiences. Such experiences 
     shall be of sufficient variety and over a sufficient period 
     of time to determine the eligibility of the individual or to 
     determine the existence of clear and convincing evidence that 
     the individual is incapable of benefiting in terms of an 
     employment outcome from vocational rehabilitation services 
     due to the severity of the disability of the individual.
       ``(3) Presumption of eligibility.--For purposes of this 
     section, an individual who has a disability or is blind as 
     determined pursuant to title II or title XVI of the Social 
     Security Act (42 U.S.C. 401 et seq. and 1381 et seq.) shall 
     be--
       ``(A) considered to be an individual with a significant 
     disability under section 7(21)(A); and
       ``(B) presumed to be eligible for vocational rehabilitation 
     services under this title (provided that the individual 
     intends to achieve an employment outcome consistent with the 
     unique strengths, resources, priorities, concerns, abilities, 
     capabilities, interests, and informed choice of the 
     individual) unless the designated State unit involved can 
     demonstrate by clear and convincing evidence that such 
     individual is incapable of benefiting in terms of an 
     employment outcome from vocational rehabilitation services 
     due to the severity of the disability of the individual in 
     accordance with paragraph (2).
       ``(4) Use of existing information.--
       ``(A) In general.--To the maximum extent appropriate and 
     consistent with the requirements of this part, for purposes 
     of determining the eligibility of an individual for 
     vocational rehabilitation services under this title and 
     developing the individualized rehabilitation employment plan 
     described in subsection (b) for the individual, the 
     designated State unit shall use information that is existing 
     and current (as of the date of the determination of 
     eligibility or of the development of the individualized 
     rehabilitation employment plan), including information 
     available from other programs and providers, particularly 
     information used by education officials and the Social 
     Security Administration, information provided by the 
     individual and the family of the individual, and information 
     obtained under the assessment for determining eligibility and 
     vocational rehabilitation needs.
       ``(B) Determinations by officials of other agencies.--
     Determinations made by officials of other agencies, 
     particularly education officials described in section 
     101(a)(11)(D), regarding whether an individual satisfies 1 or 
     more factors relating to whether an individual is an 
     individual with a disability under section 7(20)(A) or an 
     individual with a significant disability under section 
     7(21)(A) shall be used, to the extent appropriate and 
     consistent with the requirements of this part, in assisting 
     the designated State unit in making such determinations.
       ``(C) Basis.--The determination of eligibility for 
     vocational rehabilitation services shall be based on--
       ``(i) the review of existing data described in section 
     7(2)(A)(i); and
       ``(ii) to the extent that such data is unavailable or 
     insufficient for determining eligibility, the provision of 
     assessment activities described in section 7(2)(A)(ii).
       ``(5) Determination of ineligibility.--If an individual who 
     applies for services under this title is determined, based on 
     the review of existing data and, to the extent necessary, the 
     assessment activities described in section 7(2)(A)(ii), not 
     to be eligible for the services, or if an eligible individual 
     receiving services under an individualized rehabilitation 
     employment plan is determined to be no longer eligible for 
     the services--
       ``(A) the ineligibility determination involved shall be 
     made only after providing an opportunity for full 
     consultation with the individual or, as appropriate, the 
     individual's representative;
       ``(B) the individual or, as appropriate, the individual's 
     representative, shall be informed in writing (supplemented as 
     necessary by other appropriate modes of communication 
     consistent with the informed choice of the individual) of the 
     ineligibility determination, including--
       ``(i) the reasons for the determination; and
       ``(ii) a description of the means by which the individual 
     may express, and seek a remedy for, any dissatisfaction with 
     the determination, including the procedures for review by an 
     impartial hearing officer under subsection (c);

[[Page S140]]

       ``(C) the individual shall be provided with a description 
     of services available from the client assistance program 
     under section 112 and information on how to contact that 
     program; and
       ``(D) any ineligibility determination that is based on a 
     finding that the individual is incapable of benefiting in 
     terms of an employment outcome shall be reviewed--
       ``(i) within 12 months; and
       ``(ii) annually thereafter, if such a review is requested 
     by the individual or, if appropriate, by the individual's 
     representative.
       ``(6) Timeframe for making an eligibility determination.--
     The designated State unit shall determine whether an 
     individual is eligible for vocational rehabilitation services 
     under this title within a reasonable period of time, not to 
     exceed 60 days, after the individual has submitted an 
     application for the services unless--
       ``(A) exceptional and unforeseen circumstances beyond the 
     control of the designated State unit preclude making an 
     eligibility determination within 60 days and the designated 
     State unit and the individual agree to a specific extension 
     of time; or
       ``(B) the designated State unit is exploring an 
     individual's abilities, capabilities, and capacity to perform 
     in work situations under paragraph (2)(B).
       ``(b) Development of an Individualized Rehabilitation 
     Employment Plan.--
       ``(1) Options for developing an individualized 
     rehabilitation employment plan.--If an individual is 
     determined to be eligible for vocational rehabilitation 
     services as described in subsection (a), the designated State 
     unit shall complete the assessment for determining 
     eligibility and vocational rehabilitation needs, as 
     appropriate, and shall provide the eligible individual or the 
     individual's representative, in writing and in an appropriate 
     mode of communication, with information on the individual's 
     options for developing an individualized rehabilitation 
     employment plan, including--
       ``(A) information on the availability of assistance, to the 
     extent determined to be appropriate by the eligible 
     individual, from a qualified vocational rehabilitation 
     counselor in developing all or part of the individualized 
     rehabilitation employment plan for the individual, and the 
     availability of technical assistance in developing all or 
     part of the individualized rehabilitation employment plan for 
     the individual;
       ``(B) a description of the full range of components that 
     shall be included in an individualized rehabilitation 
     employment plan;
       ``(C) as appropriate--
       ``(i) an explanation of agency guidelines and criteria 
     associated with financial commitments concerning an 
     individualized rehabilitation employment plan;
       ``(ii) additional information the eligible individual 
     requests or the designated State unit determines to be 
     necessary; and
       ``(iii) information on the availability of assistance in 
     completing designated State agency forms required in 
     developing an individualized rehabilitation employment plan; 
     and
       ``(D)(i) a description of the rights and remedies available 
     to such an individual including, if appropriate, recourse to 
     the processes set forth in subsection (c); and
       ``(ii) a description of the availability of a client 
     assistance program established pursuant to section 112 and 
     information about how to contact the client assistance 
     program.
       ``(2) Mandatory procedures.--
       ``(A) Written document.--An individualized rehabilitation 
     employment plan shall be a written document prepared on forms 
     provided by the designated State unit.
       ``(B) Informed choice.--An individualized rehabilitation 
     employment plan shall be developed and implemented in a 
     manner that affords eligible individuals the opportunity to 
     exercise informed choice in selecting an employment outcome, 
     the specific vocational rehabilitation services to be 
     provided under the plan, the entity that will provide the 
     vocational rehabilitation services, and the methods used to 
     procure the services, consistent with subsection (d).
       ``(C) Signatories.--An individualized rehabilitation 
     employment plan shall be--
       ``(i) agreed to, and signed by, such eligible individual 
     or, as appropriate, the individual's representative; and
       ``(ii) approved and signed by a qualified vocational 
     rehabilitation counselor employed by the designated State 
     unit.
       ``(D) Copy.--A copy of the individualized rehabilitation 
     employment plan for an eligible individual shall be provided 
     to the individual or, as appropriate, to the individual's 
     representative, in writing and, if appropriate, in the native 
     language or mode of communication of the individual or, as 
     appropriate, of the individual's representative.
       ``(E) Review and amendment.--The individualized 
     rehabilitation employment plan shall be--
       ``(i) reviewed at least annually by--

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

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

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

       ``(iii) the responsibilities of other entities as the 
     result of arrangements made pursuant to comparable services 
     or benefits requirements as described in section 101(a)(8);
       ``(F) for an eligible individual with the most significant 
     disabilities for whom an employment outcome in a supported 
     employment setting has been determined to be appropriate, 
     information identifying--
       ``(i) the extended services needed by the eligible 
     individual; and
       ``(ii) the source of extended services or, to the extent 
     that the source of the extended services cannot be identified 
     at the time of the development of the individualized 
     rehabilitation employment plan, a description of the basis 
     for concluding that there is a reasonable expectation that 
     such source will become available; and
       ``(G) as determined to be necessary, a statement of 
     projected need for post-employment services.
       ``(c) Procedures.--
       ``(1) In general.--Each State shall establish procedures 
     for mediation of, and procedures for review through an 
     impartial due process hearing of, determinations made by 
     personnel of the designated State unit that affect the 
     provision of vocational rehabilitation services to applicants 
     or eligible individuals.
       ``(2) Notification.--
       ``(A) Rights and assistance.--The procedures shall provide 
     that an applicant or an eligible individual or, as 
     appropriate, the applicant's representative or individual's 
     representative shall be notified of--
       ``(i) the right to obtain review of determinations 
     described in paragraph (1) in an impartial due process 
     hearing under paragraph (5);
       ``(ii) the right to pursue mediation with respect to the 
     determinations under paragraph (4); and
       ``(iii) the availability of assistance from the client 
     assistance program under section 112.
       ``(B) Timing.--Such notification shall be provided in 
     writing--
       ``(i) at the time an individual applies for vocational 
     rehabilitation services provided under this title;
       ``(ii) at the time the individualized rehabilitation 
     employment plan for the individual is developed; and
       ``(iii) upon reduction, suspension, or cessation of 
     vocational rehabilitation services for the individual.
       ``(3) Evidence and representation.--The procedures required 
     under this subsection shall, at a minimum--
       ``(A) provide an opportunity for an applicant or an 
     eligible individual, or, as appropriate, the applicant's 
     representative or individual's representative, to submit at 
     the mediation session or hearing evidence and information to 
     support the position of the applicant or eligible individual; 
     and
       ``(B) include provisions to allow an applicant or an 
     eligible individual to be represented in the mediation 
     session or hearing

[[Page S141]]

     by a person selected by the applicant or eligible individual.
       ``(4) Mediation.--
       ``(A) Procedures.--Each State shall ensure that procedures 
     are established and implemented under this subsection to 
     allow parties described in paragraph (1) to disputes 
     involving any determination described in paragraph (1) to 
     resolve such disputes through a mediation process that, at a 
     minimum, shall be available whenever a hearing is requested 
     under this subsection.
       ``(B) Requirements.--Such procedures shall ensure that the 
     mediation process--
       ``(i) is voluntary on the part of the parties;
       ``(ii) is not used to deny or delay the right of an 
     individual to a hearing under this subsection, or to deny any 
     other right afforded under this title; and
       ``(iii) is conducted by a qualified and impartial mediator 
     who is trained in effective mediation techniques.
       ``(C) List of mediators.--The State shall maintain a list 
     of individuals who are qualified mediators and knowledgeable 
     in laws (including regulations) relating to the provision of 
     vocational rehabilitation services under this title, from 
     which the mediators described in subparagraph (B) shall be 
     selected.
       ``(D) Cost.--The State shall bear the cost of the mediation 
     process.
       ``(E) Scheduling.--Each session in the mediation process 
     shall be scheduled in a timely manner and shall be held in a 
     location that is convenient to the parties to the dispute.
       ``(F) Agreement.--An agreement reached by the parties to 
     the dispute in the mediation process shall be set forth in a 
     written mediation agreement.
       ``(G) Confidentiality.--Discussions that occur during the 
     mediation process shall be confidential and may not be used 
     as evidence in any subsequent due process hearing or civil 
     proceeding. The parties to the mediation process may be 
     required to sign a confidentiality pledge prior to the 
     commencement of such process.
       ``(H) Construction.--Nothing in this subsection shall be 
     construed to preclude the parties to such a dispute from 
     informally resolving the dispute prior to proceedings under 
     this paragraph or paragraph (5), if the informal process used 
     is not used to deny or delay the right of the applicant or 
     eligible individual to a hearing under this subsection or to 
     deny any other right afforded under this title.
       ``(5) Hearings.--
       ``(A) Officer.--A due process hearing described in 
     paragraph (2) shall be conducted by an impartial hearing 
     officer who shall issue a decision based on the provisions of 
     the approved State plan, this Act (including regulations 
     implementing this Act), and State regulations and policies 
     that are consistent with the Federal requirements specified 
     in this title. The officer shall provide the decision in 
     writing to the applicant or eligible individual, or, as 
     appropriate, the applicant's representative or individual's 
     representative, and to the designated State unit.
       ``(B) List.--The designated State unit shall maintain a 
     list of qualified impartial hearing officers who are 
     knowledgeable in laws (including regulations) relating to the 
     provision of vocational rehabilitation services under this 
     title from which the officer described in subparagraph (A) 
     shall be selected. For the purposes of maintaining such list, 
     impartial hearing officers shall be identified jointly by--
       ``(i) the designated State unit; and
       ``(ii) members of the Council or commission, as 
     appropriate, described in section 101(a)(21).
       ``(C) Selection.--Such an impartial hearing officer shall 
     be selected to hear a particular case relating to a 
     determination--
       ``(i) on a random basis; or
       ``(ii) by agreement between--

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

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

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

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

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

       ``(C) Confidentiality.--The confidentiality of records of 
     applicants and eligible individuals maintained by the 
     designated State unit shall not preclude the access of the 
     Commissioner to those records for the purposes described in 
     subparagraph (A).

[[Page S142]]

       ``(d) Policies and Procedures.--Each designated State 
     agency, in consultation with the State Rehabilitation 
     Council, if the State has such a council, shall, consistent 
     with section 100(a)(3)(C), develop and implement written 
     policies and procedures that enable each individual who is an 
     applicant for or eligible to receive vocational 
     rehabilitation services under this title to exercise informed 
     choice throughout the vocational rehabilitation process 
     carried out under this title, including policies and 
     procedures that require the designated State agency--
       ``(1) to inform each such applicant and eligible individual 
     (including students with disabilities described in section 
     101(a)(11)(D)(ii)(II) who are making the transition from 
     programs under the responsibility of an educational agency to 
     programs under the responsibility of the designated State 
     unit), through appropriate modes of communication, about the 
     availability of, and opportunities to exercise, informed 
     choice, including the availability of support services for 
     individuals with cognitive or other disabilities who require 
     assistance in exercising informed choice, throughout the 
     vocational rehabilitation process;
       ``(2) to assist applicants and eligible individuals in 
     exercising informed choice in decisions related to the 
     provision of assessment services under this title;
       ``(3) to develop and implement flexible procurement 
     policies and methods that facilitate the provision of 
     services, and that afford eligible individuals meaningful 
     choices among the methods used to procure services, under 
     this title;
       ``(4) to provide or assist eligible individuals in 
     acquiring information that enables those individuals to 
     exercise informed choice under this title in the selection 
     of--
       ``(A) the employment outcome;
       ``(B) the specific vocational rehabilitation services 
     needed to achieve the employment outcome;
       ``(C) the entity that will provide the services;
       ``(D) the employment setting and the settings in which the 
     services will be provided; and
       ``(E) the methods available for procuring the services; and
       ``(5) to ensure that the availability and scope of informed 
     choice provided under this section is consistent with the 
     obligations of the designated State agency under this title.

     ``SEC. 103. VOCATIONAL REHABILITATION SERVICES.

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

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

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

     ``SEC. 105. STATE REHABILITATION COUNCIL.

       ``(a) Establishment.--

[[Page S143]]

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

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

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

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

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

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

       ``(2) Ex officio member.--The Director of the designated 
     State unit shall be an ex officio, nonvoting member of the 
     Council.
       ``(3) Appointment.--Members of the Council shall be 
     appointed by the Governor. In the case of a State that, under 
     State law, vests appointment authority in an entity in lieu 
     of, or in conjunction with, the Governor, such as one or more 
     houses of the State legislature, or an independent board that 
     has general appointment authority, that entity shall make the 
     appointments. The appointing authority shall select members 
     after soliciting recommendations from representatives of 
     organizations representing a broad range of individuals with 
     disabilities and organizations interested in individuals with 
     disabilities. In selecting members, the appointing authority 
     shall consider, to the greatest extent practicable, the 
     extent to which minority populations are represented on the 
     Council.
       ``(4) Qualifications.--A majority of Council members shall 
     be persons who are--
       ``(A) individuals with disabilities described in section 
     7(20)(A); and
       ``(B) not employed by the designated State unit.
       ``(5) Chairperson.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Council shall select a chairperson from among the 
     membership of the Council.
       ``(B) Designation by governor.--In States in which the 
     Governor does not have veto power pursuant to State law, the 
     Governor shall designate a member of the Council to serve as 
     the chairperson of the Council or shall require the Council 
     to so designate such a member.
       ``(6) Terms of appointment.--
       ``(A) Length of term.--Each member of the Council shall 
     serve for a term of not more than 3 years, except that--
       ``(i) a member appointed to fill a vacancy occurring prior 
     to the expiration of the term for which a predecessor was 
     appointed, shall be appointed for the remainder of such term; 
     and
       ``(ii) the terms of service of the members initially 
     appointed shall be (as specified by the appointing authority) 
     for such fewer number of years as will provide for the 
     expiration of terms on a staggered basis.
       ``(B) Number of terms.--No member of the Council, other 
     than a representative described in clause (iii) or (ix) of 
     paragraph (1)(A), or clause (iii) or (x) of paragraph (1)(B), 
     may serve more than two consecutive full terms.
       ``(7) Vacancies.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any vacancy occurring in the membership of the Council shall 
     be filled in the same manner as the original appointment. The 
     vacancy shall not affect the power of the remaining members 
     to execute the duties of the Council.
       ``(B) Delegation.--The Governor (including an entity 
     described in paragraph (3)) may delegate the authority to 
     fill such a vacancy to the remaining members of the Council 
     after making the original appointment.
       ``(c) Functions of Council.--The Council shall, after 
     consulting with the statewide workforce investment 
     partnership--
       ``(1) review, analyze, and advise the designated State unit 
     regarding the performance of the responsibilities of the unit 
     under this title, particularly responsibilities relating to--
       ``(A) eligibility (including order of selection);
       ``(B) the extent, scope, and effectiveness of services 
     provided; and
       ``(C) functions performed by State agencies that affect or 
     that potentially affect the ability of individuals with 
     disabilities in achieving employment outcomes under this 
     title;
       ``(2) in partnership with the designated State unit--
       ``(A) develop, agree to, and review State goals and 
     priorities in accordance with section 101(a)(15)(C); and
       ``(B) evaluate the effectiveness of the vocational 
     rehabilitation program and submit reports of progress to the 
     Commissioner in accordance with section 101(a)(15)(E);
       ``(3) advise the designated State agency and the designated 
     State unit regarding activities authorized to be carried out 
     under this title, and assist in the preparation of the State 
     plan and amendments to the plan, applications, reports, needs 
     assessments, and evaluations required by this title;
       ``(4) to the extent feasible, conduct a review and analysis 
     of the effectiveness of, and consumer satisfaction with--
       ``(A) the functions performed by the designated State 
     agency;
       ``(B) vocational rehabilitation services provided by State 
     agencies and other public and private entities responsible 
     for providing vocational rehabilitation services to 
     individuals with disabilities under this Act; and
       ``(C) employment outcomes achieved by eligible individuals 
     receiving services under this title, including the 
     availability of health and other employment benefits in 
     connection with such employment outcomes;
       ``(5) prepare and submit an annual report to the Governor 
     or appropriate State entity and the Commissioner on the 
     status of vocational rehabilitation programs operated within 
     the State, and make the report available to the public;
       ``(6) to avoid duplication of efforts and enhance the 
     number of individuals served, coordinate activities with the 
     activities of other councils within the State, including the 
     Statewide Independent Living Council established under 
     section 705, the advisory panel established under section 
     612(a)(21) of the Individual with Disabilities Education Act 
     (as amended by section 101 of the Individuals with 
     Disabilities Education Act Amendments of 1997; Public Law 
     105-17), the State Developmental Disabilities Council 
     described in section 124 of the Developmental

[[Page S144]]

     Disabilities Assistance and Bill of Rights Act (42 U.S.C. 
     6024), the State mental health planning council established 
     under section 1914(a) of the Public Health Service Act (42 
     U.S.C. 300x-4(a)), and the statewide workforce investment 
     partnership;
       ``(7) provide for coordination and the establishment of 
     working relationships between the designated State agency and 
     the Statewide Independent Living Council and centers for 
     independent living within the State; and
       ``(8) perform such other functions, consistent with the 
     purpose of this title, as the State Rehabilitation Council 
     determines to be appropriate, that are comparable to the 
     other functions performed by the Council.
       ``(d) Resources.--
       ``(1) Plan.--The Council shall prepare, in conjunction with 
     the designated State unit, a plan for the provision of such 
     resources, including such staff and other personnel, as may 
     be necessary and sufficient to carry out the functions of the 
     Council under this section. The resource plan shall, to the 
     maximum extent possible, rely on the use of resources in 
     existence during the period of implementation of the plan.
       ``(2) Resolution of disagreements.--To the extent that 
     there is a disagreement between the Council and the 
     designated State unit in regard to the resources necessary to 
     carry out the functions of the Council as set forth in this 
     section, the disagreement shall be resolved by the Governor 
     or appointing agency consistent with paragraph (1).
       ``(3) Supervision and evaluation.--Each Council shall, 
     consistent with State law, supervise and evaluate such staff 
     and other personnel as may be necessary to carry out its 
     functions under this section.
       ``(4) Personnel conflict of interest.--While assisting the 
     Council in carrying out its duties, staff and other personnel 
     shall not be assigned duties by the designated State unit or 
     any other agency or office of the State, that would create a 
     conflict of interest.
       ``(e) Conflict of Interest.--No member of the Council shall 
     cast a vote on any matter that would provide direct financial 
     benefit to the member or otherwise give the appearance of a 
     conflict of interest under State law.
       ``(f) Meetings.--The Council shall convene at least 4 
     meetings a year in such places as it determines to be 
     necessary to conduct Council business and conduct such forums 
     or hearings as the Council considers appropriate. The 
     meetings, hearings, and forums shall be publicly announced. 
     The meetings shall be open and accessible to the general 
     public unless there is a valid reason for an executive 
     session.
       ``(g) Compensation and Expenses.--The Council may use funds 
     allocated to the Council by the designated State unit under 
     this title (except for funds appropriated to carry out the 
     client assistance program under section 112 and funds 
     reserved pursuant to section 110(c) to carry out part C) to 
     reimburse members of the Council for reasonable and necessary 
     expenses of attending Council meetings and performing Council 
     duties (including child care and personal assistance 
     services), and to pay compensation to a member of the 
     Council, if such member is not employed or must forfeit wages 
     from other employment, for each day the member is engaged in 
     performing the duties of the Council.
       ``(h) Hearings and Forums.--The Council is authorized to 
     hold such hearings and forums as the Council may determine to 
     be necessary to carry out the duties of the Council.

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

       ``(a) Establishment.--
       ``(1) In general.--
       ``(A) Establishment of standards and indicators.--The 
     Commissioner shall, not later than September 30, 1998, 
     establish and publish evaluation standards and performance 
     indicators for the vocational rehabilitation program carried 
     out under this title.
       ``(B) Review and revision.--Effective September 30, 1998, 
     the Commissioner shall review and, if necessary, revise the 
     evaluation standards and performance indicators every 3 
     years. Any revisions of the standards and indicators shall be 
     developed with input from State vocational rehabilitation 
     agencies, related professional and consumer organizations, 
     recipients of vocational rehabilitation services, and other 
     interested parties. Any revisions of the standards and 
     indicators shall be subject to the publication, review, and 
     comment provisions of paragraph (3).
       ``(C) Bases.--Effective July 1, 1999, to the maximum extent 
     practicable, the standards and indicators shall be consistent 
     with the core indicators of performance established under 
     section 321(b) of the Workforce Investment Partnership Act of 
     1998.
       ``(2) Measures.--The standards and indicators shall include 
     outcome and related measures of program performance that 
     facilitate the accomplishment of the purpose and policy of 
     this title.
       ``(3) Comment.--The standards and indicators shall be 
     developed with input from State vocational rehabilitation 
     agencies, related professional and consumer organizations, 
     recipients of vocational rehabilitation services, and other 
     interested parties. The Commissioner shall publish in the 
     Federal Register a notice of intent to regulate regarding the 
     development of proposed standards and indicators. Proposed 
     standards and indicators shall be published in the Federal 
     Register for review and comment. Final standards and 
     indicators shall be published in the Federal Register.
       ``(b) Compliance.--
       ``(1) State reports.--In accordance with regulations 
     established by the Secretary, each State shall report to the 
     Commissioner after the end of each fiscal year the extent to 
     which the State is in compliance with the standards and 
     indicators.
       ``(2) Program improvement.--
       ``(A) Plan.--If the Commissioner determines that the 
     performance of any State is below established standards, the 
     Commissioner shall provide technical assistance to the State 
     and the State and the Commissioner shall jointly develop a 
     program improvement plan outlining the specific actions to be 
     taken by the State to improve program performance.
       ``(B) Review.--The Commissioner shall--
       ``(i) review the program improvement efforts of the State 
     on a biannual basis and, if necessary, request the State to 
     make further revisions to the plan to improve performance; 
     and
       ``(ii) continue to conduct such reviews and request such 
     revisions until the State sustains satisfactory performance 
     over a period of more than 1 year.
       ``(c) Withholding.--If the Commissioner determines that a 
     State whose performance falls below the established standards 
     has failed to enter into a program improvement plan, or is 
     not complying substantially with the terms and conditions of 
     such a program improvement plan, the Commissioner shall, 
     consistent with subsections (c) and (d) of section 107, 
     reduce or make no further payments to the State under this 
     program, until the State has entered into an approved program 
     improvement plan, or satisfies the Commissioner that the 
     State is complying substantially with the terms and 
     conditions of such a program improvement plan, as 
     appropriate.
       ``(d) Report to Congress.--Beginning in fiscal year 1999, 
     the Commissioner shall include in each annual report to the 
     Congress under section 13 an analysis of program performance, 
     including relative State performance, based on the standards 
     and indicators.

     ``SEC. 107. MONITORING AND REVIEW.

       ``(a) In General.--
       ``(1) Duties.--In carrying out the duties of the 
     Commissioner under this title, the Commissioner shall--
       ``(A) provide for the annual review and periodic onsite 
     monitoring of programs under this title; and
       ``(B) determine whether, in the administration of the State 
     plan, a State is complying substantially with the provisions 
     of such plan and with evaluation standards and performance 
     indicators established under section 106.
       ``(2) Procedures for reviews.--In conducting reviews under 
     this section the Commissioner shall consider, at a minimum--
       ``(A) State policies and procedures;
       ``(B) guidance materials;
       ``(C) decisions resulting from hearings conducted in 
     accordance with due process;
       ``(D) State goals established under section 101(a)(15) and 
     the extent to which the State has achieved such goals;
       ``(E) plans and reports prepared under section 106(b);
       ``(F) consumer satisfaction reviews and analyses described 
     in section 105(c)(4);
       ``(G) information provided by the State Rehabilitation 
     Council established under section 105, if the State has such 
     a Council, or by the commission described in section 
     101(a)(21)(A)(i), if the State has such a commission;
       ``(H) reports; and
       ``(I) budget and financial management data.
       ``(3) Procedures for monitoring.--In conducting monitoring 
     under this section the Commissioner shall conduct--
       ``(A) onsite visits, including onsite reviews of records to 
     verify that the State is following requirements regarding the 
     order of selection set forth in section 101(a)(5)(A);
       ``(B) public hearings and other strategies for collecting 
     information from the public;
       ``(C) meetings with the State Rehabilitation Council, if 
     the State has such a Council or with the commission described 
     in section 101(a)(21)(A)(i), if the State has such a 
     commission;
       ``(D) reviews of individual case files, including 
     individualized rehabilitation employment plans and 
     ineligibility determinations; and
       ``(E) meetings with rehabilitation counselors and other 
     personnel.
       ``(4) Areas of inquiry.--In conducting the review and 
     monitoring, the Commissioner shall examine--
       ``(A) the eligibility process;
       ``(B) the provision of services, including, if applicable, 
     the order of selection;
       ``(C) whether the personnel evaluation system described in 
     section 101(a)(7)(A)(iv) facilitates the accomplishments of 
     the program;
       ``(D) such other areas as may be identified by the public 
     or through meetings with the State Rehabilitation Council, if 
     the State has such a Council or with the commission described 
     in section 101(a)(21)(A)(i), if the State has such a 
     commission; and
       ``(E) such other areas of inquiry as the Commissioner may 
     consider appropriate.
       ``(5) Reports.--If the Commissioner issues a report 
     detailing the findings of an annual review or onsite 
     monitoring conducted under

[[Page S145]]

     this section, the report shall be made available to the State 
     Rehabilitation Council, if the State has such a Council.
       ``(b) Technical Assistance.--The Commissioner shall--
       ``(1) provide technical assistance to programs under this 
     title regarding improving the quality of vocational 
     rehabilitation services provided; and
       ``(2) provide technical assistance and establish a 
     corrective action plan for a program under this title if the 
     Commissioner finds that the program fails to comply 
     substantially with the provisions of the State plan, or with 
     evaluation standards or performance indicators established 
     under section 106, in order to ensure that such failure is 
     corrected as soon as practicable.
       ``(c) Failure To Comply With Plan.--
       ``(1) Withholding payments.--Whenever the Commissioner, 
     after providing reasonable notice and an opportunity for a 
     hearing to the State agency administering or supervising the 
     administration of the State plan approved under section 101, 
     finds that--
       ``(A) the plan has been so changed that it no longer 
     complies with the requirements of section 101(a); or
       ``(B) in the administration of the plan there is a failure 
     to comply substantially with any provision of such plan or 
     with an evaluation standard or performance indicator 
     established under section 106,

     the Commissioner shall notify such State agency that no 
     further payments will be made to the State under this title 
     (or, in the discretion of the Commissioner, that such further 
     payments will be reduced, in accordance with regulations the 
     Commissioner shall prescribe, or that further payments will 
     not be made to the State only for the projects under the 
     parts of the State plan affected by such failure), until the 
     Commissioner is satisfied there is no longer any such 
     failure.
       ``(2) Period.--Until the Commissioner is so satisfied, the 
     Commissioner shall make no further payments to such State 
     under this title (or shall reduce payments or limit payments 
     to projects under those parts of the State plan in which 
     there is no such failure).
       ``(3) Disbursal of withheld funds.--The Commissioner may, 
     in accordance with regulations the Secretary shall prescribe, 
     disburse any funds withheld from a State under paragraph (1) 
     to any public or nonprofit private organization or agency 
     within such State or to any political subdivision of such 
     State submitting a plan meeting the requirements of section 
     101(a). The Commissioner may not make any payment under this 
     paragraph unless the entity to which such payment is made has 
     provided assurances to the Commissioner that such entity will 
     contribute, for purposes of carrying out such plan, the same 
     amount as the State would have been obligated to contribute 
     if the State received such payment.
       ``(d) Review.--
       ``(1) Petition.--Any State that is dissatisfied with a 
     final determination of the Commissioner under section 101(b) 
     or subsection (c) may file a petition for judicial review of 
     such determination in the United States Court of Appeals for 
     the circuit in which the State is located. Such a petition 
     may be filed only within the 30-day period beginning on the 
     date that notice of such final determination was received by 
     the State. The clerk of the court shall transmit a copy of 
     the petition to the Commissioner or to any officer designated 
     by the Commissioner for that purpose. In accordance with 
     section 2112 of title 28, United States Code, the 
     Commissioner shall file with the court a record of the 
     proceeding on which the Commissioner based the determination 
     being appealed by the State. Until a record is so filed, the 
     Commissioner may modify or set aside any determination made 
     under such proceedings.
       ``(2) Submissions and determinations.--If, in an action 
     under this subsection to review a final determination of the 
     Commissioner under section 101(b) or subsection (c), the 
     petitioner or the Commissioner applies to the court for leave 
     to have additional oral submissions or written presentations 
     made respecting such determination, the court may, for good 
     cause shown, order the Commissioner to provide within 30 days 
     an additional opportunity to make such submissions and 
     presentations. Within such period, the Commissioner may 
     revise any findings of fact, modify or set aside the 
     determination being reviewed, or make a new determination by 
     reason of the additional submissions and presentations, and 
     shall file such modified or new determination, and any 
     revised findings of fact, with the return of such submissions 
     and presentations. The court shall thereafter review such new 
     or modified determination.
       ``(3) Standards of review.--
       ``(A) In general.--Upon the filing of a petition under 
     paragraph (1) for judicial review of a determination, the 
     court shall have jurisdiction--
       ``(i) to grant appropriate relief as provided in chapter 7 
     of title 5, United States Code, except for interim relief 
     with respect to a determination under subsection (c); and
       ``(ii) except as otherwise provided in subparagraph (B), to 
     review such determination in accordance with chapter 7 of 
     title 5, United States Code.
       ``(B) Substantial evidence.--Section 706 of title 5, United 
     States Code, shall apply to the review of any determination 
     under this subsection, except that the standard for review 
     prescribed by paragraph (2)(E) of such section 706 shall not 
     apply and the court shall hold unlawful and set aside such 
     determination if the court finds that the determination is 
     not supported by substantial evidence in the record of the 
     proceeding submitted pursuant to paragraph (1), as 
     supplemented by any additional submissions and presentations 
     filed under paragraph (2).

     ``SEC. 108. EXPENDITURE OF CERTAIN AMOUNTS.

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

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

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

           ``Part B--Basic Vocational Rehabilitation Services


                           ``state allotments

       ``Sec. 110. (a)(1) Subject to the provisions of subsection 
     (c), for each fiscal year beginning before October 1, 1978, 
     each State shall be entitled to an allotment of an amount 
     bearing the same ratio to the amount authorized to be 
     appropriated under section 100(b)(1) for allotment under this 
     section as the product of--
       ``(A) the population of the State; and
       ``(B) the square of its allotment percentage,

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

[[Page S146]]

     shall reserve from the amount appropriated under section 
     100(b)(1) for allotment under this section a sum, determined 
     under paragraph (2), to carry out the purposes of part C.
       ``(2) The sum referred to in paragraph (1) shall be, as 
     determined by the Secretary--
       ``(A) not less than three-quarters of 1 percent and not 
     more than 1.5 percent of the amount referred to in paragraph 
     (1), for fiscal year 1998; and
       ``(B) not less than 1 percent and not more than 1.5 percent 
     of the amount referred to in paragraph (1), for each of 
     fiscal years 1999 through 2004.


                          ``payments to states

       ``Sec. 111. (a)(1) Except as provided in paragraph (2), 
     from each State's allotment under this part for any fiscal 
     year, the Commissioner shall pay to a State an amount equal 
     to the Federal share of the cost of vocational rehabilitation 
     services under the plan for that State approved under section 
     101, including expenditures for the administration of the 
     State plan.
       ``(2)(A) The total of payments under paragraph (1) to a 
     State for a fiscal year may not exceed its allotment under 
     subsection (a) of section 110 for such year.
       ``(B) For fiscal year 1994 and each fiscal year thereafter, 
     the amount otherwise payable to a State for a fiscal year 
     under this section shall be reduced by the amount by which 
     expenditures from non-Federal sources under the State plan 
     under this title for the previous fiscal year are less than 
     the total of such expenditures for the second fiscal year 
     preceding the previous fiscal year.
       ``(C) The Commissioner may waive or modify any requirement 
     or limitation under paragraphs (A) and (B) if the 
     Commissioner determines that a waiver or modification is an 
     equitable response to exceptional or uncontrollable 
     circumstances affecting the State.
       ``(b) The method of computing and paying amounts pursuant 
     to subsection (a) shall be as follows:
       ``(1) The Commissioner shall, prior to the beginning of 
     each calendar quarter or other period prescribed by the 
     Commissioner, estimate the amount to be paid to each State 
     under the provisions of such subsection for such period, such 
     estimate to be based on such records of the State and 
     information furnished by it, and such other investigation as 
     the Commissioner may find necessary.
       ``(2) The Commissioner shall pay, from the allotment 
     available therefor, the amount so estimated by the 
     Commissioner for such period, reduced or increased, as the 
     case may be, by any sum (not previously adjusted under this 
     paragraph) by which the Commissioner finds that the estimate 
     of the amount to be paid the State for any prior period under 
     such subsection was greater or less than the amount which 
     should have been paid to the State for such prior period 
     under such subsection. Such payment shall be made prior to 
     audit or settlement by the General Accounting Office, shall 
     be made through the disbursing facilities of the Treasury 
     Department, and shall be made in such installments as the 
     Commissioner may determine.


                      ``client assistance program

       ``Sec. 112. (a) From funds appropriated under subsection 
     (h), the Secretary shall, in accordance with this section, 
     make grants to States to establish and carry out client 
     assistance programs to provide assistance in informing and 
     advising all clients and client applicants of all available 
     benefits under this Act, and, upon request of such clients or 
     client applicants, to assist and advocate for such clients or 
     applicants in their relationships with projects, programs, 
     and services provided under this Act, including assistance 
     and advocacy in pursuing legal, administrative, or other 
     appropriate remedies to ensure the protection of the rights 
     of such individuals under this Act and to facilitate access 
     to the services funded under this Act through individual and 
     systemic advocacy. The client assistance program shall 
     provide information on the available services and benefits 
     under this Act and title I of the Americans with Disabilities 
     Act of 1990 (42 U.S.C. 12111 et seq.) to individuals with 
     disabilities in the State, especially with regard to 
     individuals with disabilities who have traditionally been 
     unserved or underserved by vocational rehabilitation 
     programs. In providing assistance and advocacy under this 
     subsection with respect to services under this title, a 
     client assistance program may provide the assistance and 
     advocacy with respect to services that are directly related 
     to facilitating the employment of the individual.
       ``(b) No State may receive payments from its allotment 
     under this Act in any fiscal year unless the State has in 
     effect not later than October 1, 1984, a client assistance 
     program which--
       ``(1) has the authority to pursue legal, administrative, 
     and other appropriate remedies to ensure the protection of 
     rights of individuals with disabilities who are receiving 
     treatments, services, or rehabilitation under this Act within 
     the State; and
       ``(2) meets the requirements of designation under 
     subsection (c).
       ``(c)(1)(A) The Governor shall designate a public or 
     private agency to conduct the client assistance program under 
     this section. Except as provided in the last sentence of this 
     subparagraph, the Governor shall designate an agency which is 
     independent of any agency which provides treatment, services, 
     or rehabilitation to individuals under this Act. If there is 
     an agency in the State which has, or had, prior to the date 
     of enactment of the Rehabilitation Amendments of 1984, served 
     as a client assistance agency under this section and which 
     received Federal financial assistance under this Act, the 
     Governor may, in the initial designation, designate an agency 
     which provides treatment, services, or rehabilitation to 
     individuals with disabilities under this Act.
       ``(B)(i) The Governor may not redesignate the agency 
     designated under subparagraph (A) without good cause and 
     unless--
       ``(I) the Governor has given the agency 30 days notice of 
     the intention to make such redesignation, including 
     specification of the good cause for such redesignation and an 
     opportunity to respond to the assertion that good cause has 
     been shown;
       ``(II) individuals with disabilities or the individuals' 
     representatives have timely notice of the redesignation and 
     opportunity for public comment; and
       ``(III) the agency has the opportunity to appeal to the 
     Commissioner on the basis that the redesignation was not for 
     good cause.
       ``(ii) If, after the date of enactment of the 
     Rehabilitation Act Amendments of 1998--
       ``(I) a designated State agency undergoes any change in the 
     organizational structure of the agency that results in the 
     creation of 1 or more new State agencies or departments or 
     results in the merger of the designated State agency with 1 
     or more other State agencies or departments; and
       ``(II) an agency (including an office or other unit) within 
     the designated State agency was conducting a client 
     assistance program before the change under the last sentence 
     of subparagraph (A),

     the Governor shall redesignate the agency conducting the 
     program. In conducting the redesignation, the Governor shall 
     designate to conduct the program an agency that is 
     independent of any agency that provides treatment, services, 
     or rehabilitation to individuals with disabilities under this 
     Act.
       ``(2) In carrying out the provisions of this section, the 
     Governor shall consult with the director of the State 
     vocational rehabilitation agency, the head of the 
     developmental disability protection and advocacy agency, and 
     with representatives of professional and consumer 
     organizations serving individuals with disabilities in the 
     State.
       ``(3) The agency designated under this subsection shall be 
     accountable for the proper use of funds made available to the 
     agency.
       ``(4) For the purpose of this subsection, the term 
     `Governor' means the chief executive of the State.
       ``(d) The agency designated under subsection (c) of this 
     section may not bring any class action in carrying out its 
     responsibilities under this section.
       ``(e)(1)(A) The Secretary shall allot the sums appropriated 
     for each fiscal year under this section among the States on 
     the basis of relative population of each State, except that 
     no State shall receive less than $50,000.
       ``(B) The Secretary shall allot $30,000 each to American 
     Samoa, Guam, the Virgin Islands, and the Commonwealth of the 
     Northern Mariana Islands.
       ``(C) For the purpose of this paragraph, the term `State' 
     does not include American Samoa, Guam, the Virgin Islands, 
     and the Commonwealth of the Northern Mariana Islands.
       ``(D)(i) In any fiscal year that the funds appropriated for 
     such fiscal year exceed $7,500,000, the minimum allotment 
     shall be $100,000 for States and $45,000 for territories.
       ``(ii) For any fiscal year in which the total amount 
     appropriated under subsection (h) exceeds the total amount 
     appropriated under such subsection for the preceding fiscal 
     year, the Secretary shall increase each of the minimum 
     allotments under clause (i) by a percentage that shall not 
     exceed the percentage increase in the total amount 
     appropriated under such subsection between the preceding 
     fiscal year and the fiscal year involved.
       ``(2) The amount of an allotment to a State for a fiscal 
     year which the Secretary determines will not be required by 
     the State during the period for which it is available for the 
     purpose for which allotted shall be available for reallotment 
     by the Secretary at appropriate times to other States with 
     respect to which such a determination has not been made, in 
     proportion to the original allotments of such States for such 
     fiscal year, but with such proportionate amount for any of 
     such other States being reduced to the extent it exceeds the 
     sum the Secretary estimates such State needs and will be able 
     to use during such period, and the total of such reduction 
     shall be similarly reallotted among the States whose 
     proportionate amounts were not so reduced. Any such amount so 
     reallotted to a State for a fiscal year shall be deemed to be 
     a part of its allotment for such fiscal year.
       ``(3) Except as specifically prohibited by or as otherwise 
     provided in State law, the Secretary shall pay to the agency 
     designated under subsection (c) the amount specified in the 
     application approved under subsection (f).
       ``(f) No grant may be made under this section unless the 
     State submits an application to the Secretary at such time, 
     in such manner, and containing or accompanied by such 
     information as the Secretary deems necessary to meet the 
     requirements of this section.
       ``(g) The Secretary shall prescribe regulations applicable 
     to the client assistance program which shall include the 
     following requirements:
       ``(1) No employees of such programs shall, while so 
     employed, serve as staff or consultants of any rehabilitation 
     project, program,

[[Page S147]]

     or facility receiving assistance under this Act in the State.
       ``(2) Each program shall be afforded reasonable access to 
     policymaking and administrative personnel in the State and 
     local rehabilitation programs, projects, or facilities.
       ``(3)(A) Each program shall contain provisions designed to 
     assure that to the maximum extent possible alternative means 
     of dispute resolution are available for use at the discretion 
     of an applicant or client of the program prior to resorting 
     to litigation or formal adjudication to resolve a dispute 
     arising under this section.
       ``(B) In subparagraph (A), the term `alternative means of 
     dispute resolution' means any procedure, including good faith 
     negotiation, conciliation, facilitation, mediation, fact 
     finding, and arbitration, and any combination of procedures, 
     that is used in lieu of litigation in a court or formal 
     adjudication in an administrative forum, to resolve a dispute 
     arising under this section.
       ``(4) For purposes of any periodic audit, report, or 
     evaluation of the performance of a client assistance program 
     under this section, the Secretary shall not require such a 
     program to disclose the identity of, or any other personally 
     identifiable information related to, any individual 
     requesting assistance under such program.
       ``(h) There are authorized to be appropriated such sums as 
     may be necessary for fiscal years 1998 through 2004 to carry 
     out the provisions of this section.

      ``Part C--American Indian Vocational Rehabilitation Services


              ``vocational rehabilitation services grants

       ``Sec. 121. (a) The Commissioner, in accordance with the 
     provisions of this part, may make grants to the governing 
     bodies of Indian tribes located on Federal and State 
     reservations (and consortia of such governing bodies) to pay 
     90 percent of the costs of vocational rehabilitation services 
     for American Indians who are individuals with disabilities 
     residing on such reservations. The non-Federal share of such 
     costs may be in cash or in kind, fairly valued, and the 
     Commissioner may waive such non-Federal share requirement in 
     order to carry out the purposes of this Act.
       ``(b)(1) No grant may be made under this part for any 
     fiscal year unless an application therefor has been submitted 
     to and approved by the Commissioner. The Commissioner may not 
     approve an application unless the application--
       ``(A) is made at such time, in such manner, and contains 
     such information as the Commissioner may require;
       ``(B) contains assurances that the rehabilitation services 
     provided under this part to American Indians who are 
     individuals with disabilities residing on a reservation in a 
     State shall be, to the maximum extent feasible, comparable to 
     rehabilitation services provided under this title to other 
     individuals with disabilities residing in the State and that, 
     where appropriate, may include services traditionally used by 
     Indian tribes; and
       ``(C) contains assurances that the application was 
     developed in consultation with the designated State unit of 
     the State.
       ``(2) The provisions of sections 5, 6, 7, and 102(a) of the 
     Indian Self-Determination and Education Assistance Act shall 
     be applicable to any application submitted under this part. 
     For purposes of this paragraph, any reference in any such 
     provision to the Secretary of Education or to the Secretary 
     of the Interior shall be considered to be a reference to the 
     Commissioner.
       ``(3) Any application approved under this part shall be 
     effective for not more than 60 months, except as determined 
     otherwise by the Commissioner pursuant to prescribed 
     regulations. The State shall continue to provide vocational 
     rehabilitation services under its State plan to American 
     Indians residing on a reservation whenever such State 
     includes any such American Indians in its State population 
     under section 110(a)(1).
       ``(4) In making grants under this part, the Secretary shall 
     give priority consideration to applications for the 
     continuation of programs which have been funded under this 
     part.
       ``(5) Nothing in this section may be construed to authorize 
     a separate service delivery system for Indian residents of a 
     State who reside in non-reservation areas.
       ``(c) The term `reservation' includes Indian reservations, 
     public domain Indian allotments, former Indian reservations 
     in Oklahoma, and land held by incorporated Native groups, 
     regional corporations, and village corporations under the 
     provisions of the Alaska Native Claims Settlement Act.

    ``Part D--Vocational Rehabilitation Services Client Information

     ``SEC. 131. DATA SHARING.

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

     SEC. 5. RESEARCH AND TRAINING.

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

                   ``TITLE II--RESEARCH AND TRAINING


                        ``declaration of purpose

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

     to rehabilitation professionals, individuals with 
     disabilities, and other interested parties, including the 
     general public;
       ``(5) identify effective strategies that enhance the 
     opportunities of individuals with disabilities to engage in 
     employment, including employment involving telecommuting and 
     self-employment; and
       ``(6) increase opportunities for researchers who are 
     members of traditionally underserved populations, including 
     researchers who are members of minority groups and 
     researchers who are individuals with disabilities.


                   ``authorization of appropriations

       ``Sec. 201. (a) There are authorized to be appropriated--
       ``(1) for the purpose of providing for the expenses of the 
     National Institute on Disability and Rehabilitation Research 
     under section 202, which shall include the expenses of the 
     Rehabilitation Research Advisory Council under section 205, 
     and shall not include the expenses of such Institute to carry 
     out section 204, such sums as may be necessary for each of 
     fiscal years 1998 through 2004; and
       ``(2) to carry out section 204, such sums as may be 
     necessary for each of fiscal years 1998 through 2004.
       ``(b) Funds appropriated under this title shall remain 
     available until expended.

     ``national institute on disability and rehabilitation research

       ``Sec. 202. (a)(1) There is established within the 
     Department of Education a National Institute on Disability 
     and Rehabilitation Research (hereinafter in this title 
     referred to as the `Institute'), which shall be headed by a 
     Director (hereinafter in this title referred to as the 
     `Director'), in order to--
       ``(A) promote, coordinate, and provide for--
       ``(i) research;
       ``(ii) demonstration projects and training; and
       ``(iii) related activities,

     with respect to individuals with disabilities;
       ``(B) more effectively carry out activities through the 
     programs under section 204 and activities under this section;
       ``(C) widely disseminate information from the activities 
     described in subparagraphs (A) and (B); and
       ``(D) provide leadership in advancing the quality of life 
     of individuals with disabilities.
       ``(2) In the performance of the functions of the office, 
     the Director shall be directly responsible to the Secretary 
     or to the same Under Secretary or Assistant Secretary of the 
     Department of Education to whom the Commissioner is 
     responsible under section 3(a).
       ``(b) The Director, through the Institute, shall be 
     responsible for--

[[Page S148]]

       ``(1) administering the programs described in section 204 
     and activities under this section;
       ``(2) widely disseminating findings, conclusions, and 
     recommendations, resulting from research, demonstration 
     projects, training, and related activities (referred to in 
     this title as `covered activities') funded by the Institute, 
     to--
       ``(A) other Federal, State, tribal, and local public 
     agencies;
       ``(B) private organizations engaged in research relating to 
     rehabilitation or providing rehabilitation services;
       ``(C) rehabilitation practitioners; and
       ``(D) individuals with disabilities and the individuals' 
     representatives;
       ``(3) coordinating, through the Interagency Committee 
     established by section 203 of this Act, all Federal programs 
     and policies relating to research in rehabilitation;
       ``(4) widely disseminating educational materials and 
     research results, concerning ways to maximize the full 
     inclusion and integration into society, employment, 
     independent living, family support, and economic and social 
     self-sufficiency of individuals with disabilities, to--
       ``(A) public and private entities, including--
       ``(i) elementary and secondary schools (as defined in 
     section 14101 of the Elementary and Secondary Education Act 
     of 1965; and
       ``(ii) institutions of higher education;
       ``(B) rehabilitation practitioners;
       ``(C) individuals with disabilities (especially such 
     individuals who are members of minority groups or of 
     populations that are unserved or underserved by programs 
     under this Act); and
       ``(D) the individuals' representatives for the individuals 
     described in subparagraph (C);
       ``(5)(A) conducting an education program to inform the 
     public about ways of providing for the rehabilitation of 
     individuals with disabilities, including information relating 
     to--
       ``(i) family care;
       ``(ii) self-care; and
       ``(iii) assistive technology devices and assistive 
     technology services; and
       ``(B) as part of the program, disseminating engineering 
     information about assistive technology devices;
       ``(6) conducting conferences, seminars, and workshops 
     (including in-service training programs and programs for 
     individuals with disabilities) concerning advances in 
     rehabilitation research and rehabilitation technology 
     (including advances concerning the selection and use of 
     assistive technology devices and assistive technology 
     services), pertinent to the full inclusion and integration 
     into society, employment, independent living, family support, 
     and economic and social self-sufficiency of individuals with 
     disabilities;
       ``(7) taking whatever action is necessary to keep the 
     Congress fully and currently informed with respect to the 
     implementation and conduct of programs and activities carried 
     out under this title, including dissemination activities;
       ``(8) producing, in conjunction with the Department of 
     Labor, the National Center for Health Statistics, the Bureau 
     of the Census, the Health Care Financing Administration, the 
     Social Security Administration, the Bureau of Indian Affairs, 
     the Indian Health Service, and other Federal departments and 
     agencies, as may be appropriate, statistical reports and 
     studies on the employment, health, income, and other 
     demographic characteristics of individuals with disabilities, 
     including information on individuals with disabilities who 
     live in rural or inner-city settings, with particular 
     attention given to underserved populations, and widely 
     disseminating such reports and studies to rehabilitation 
     professionals, individuals with disabilities, the 
     individuals' representatives, and others to assist in the 
     planning, assessment, and evaluation of vocational and other 
     rehabilitation services for individuals with disabilities;
       ``(9) conducting research on consumer satisfaction with 
     vocational rehabilitation services for the purpose of 
     identifying effective rehabilitation programs and policies 
     that promote the independence of individuals with 
     disabilities and achievement of long-term vocational goals;
       ``(10) conducting research to examine the relationship 
     between the provision of specific services and successful, 
     sustained employment outcomes, including employment outcomes 
     involving self-employment; and
       ``(11) coordinating activities with the Attorney General 
     regarding the provision of information, training, or 
     technical assistance regarding the Americans with 
     Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) to ensure 
     consistency with the plan for technical assistance required 
     under section 506 of such Act (42 U.S.C. 12206).
       ``(c)(1) The Director, acting through the Institute or 1 or 
     more entities funded by the Institute, shall provide for the 
     development and dissemination of models to address consumer-
     driven information needs related to assistive technology 
     devices and assistive technology services.
       ``(2) The development and dissemination of models may 
     include--
       ``(A) convening groups of individuals with disabilities, 
     family members and advocates of such individuals, commercial 
     producers of assistive technology, and entities funded by the 
     Institute to develop, assess, and disseminate knowledge about 
     information needs related to assistive technology;
       ``(B) identifying the types of information regarding 
     assistive technology devices and assistive technology 
     services that individuals with disabilities find especially 
     useful;
       ``(C) evaluating current models, and developing new models, 
     for transmitting the information described in subparagraph 
     (B) to consumers and to commercial producers of assistive 
     technology; and
       ``(D) disseminating through 1 or more entities funded by 
     the Institute, the models described in subparagraph (C) and 
     findings regarding the information described in subparagraph 
     (B) to consumers and commercial producers of assistive 
     technology.
       ``(d)(1) The Director of the Institute shall be appointed 
     by the Secretary. The Director shall be an individual with 
     substantial experience in rehabilitation and in research 
     administration. The Director shall be compensated at the rate 
     payable for level V of the Executive Schedule under section 
     5316 of title 5, United States Code. The Director shall not 
     delegate any of his functions to any officer who is not 
     directly responsible to the Director.
       ``(2) There shall be a Deputy Director of the Institute 
     (referred to in this section as the `Deputy Director') who 
     shall be appointed by the Secretary. The Deputy Director 
     shall be an individual with substantial experience in 
     rehabilitation and in research administration. The Deputy 
     Director shall be compensated at the rate of pay for level 4 
     of the Senior Executive Service Schedule under section 5382 
     of title 5, United States Code, and shall act for the 
     Director during the absence of the Director or the inability 
     of the Director to perform the essential functions of the 
     job, exercising such powers as the Director may prescribe. In 
     the case of any vacancy in the office of the Director, the 
     Deputy Director shall serve as Director until a Director is 
     appointed under paragraph (1). The position created by this 
     paragraph shall be a Senior Executive Service position, as 
     defined in section 3132 of title 5, United States Code.
       ``(3) The Director, subject to the approval of the 
     President, may appoint, for terms not to exceed three years, 
     without regard to the provisions of title 5, United States 
     Code, governing appointment in the competitive service, and 
     may compensate, without regard to the provisions of chapter 
     51 and subchapter III of chapter 53 of such title relating to 
     classification and General Schedule pay rates, such technical 
     and professional employees of the Institute as the Director 
     determines to be necessary to accomplish the functions of the 
     Institute and also appoint and compensate without regard to 
     such provisions, in a number not to exceed one-fifth of the 
     number of full-time, regular technical and professional 
     employees of the Institute.
       ``(4) The Director may obtain the services of consultants, 
     without regard to the provisions of title 5, United States 
     Code, governing appointments in the competitive service.
       ``(e) The Director, pursuant to regulations which the 
     Secretary shall prescribe, may establish and maintain 
     fellowships with such stipends and allowances, including 
     travel and subsistence expenses provided for under title 5, 
     United States Code, as the Director considers necessary to 
     procure the assistance of highly qualified research fellows, 
     including individuals with disabilities, from the United 
     States and foreign countries.
       ``(f)(1) The Director shall, pursuant to regulations that 
     the Secretary shall prescribe, provide for scientific peer 
     review of all applications for financial assistance for 
     research, training, and demonstration projects over which the 
     Director has authority. The Director shall provide for the 
     review by utilizing, to the maximum extent possible, 
     appropriate peer review panels established within the 
     Institute. The panels shall be standing panels if the grant 
     period involved or the duration of the program involved is 
     not more than 3 years. The panels shall be composed of 
     individuals who are not Federal employees, who are scientists 
     or other experts in the rehabilitation field (including the 
     independent living field), including knowledgeable 
     individuals with disabilities, and the individuals' 
     representatives, and who are competent to review applications 
     for the financial assistance.
       ``(2) The Federal Advisory Committee Act (5 U.S.C. App.) 
     shall not apply to the panels.
       ``(3) The Director shall solicit nominations for such 
     panels from the public and shall publish the names of the 
     individuals selected. Individuals comprising each panel shall 
     be selected from a pool of qualified individuals to 
     facilitate knowledgeable, cost-effective review.
       ``(4) In providing for such scientific peer review, the 
     Secretary shall provide for training, as necessary and 
     appropriate, to facilitate the effective participation of 
     those individuals selected to participate in such review.
       ``(g) Not less than 90 percent of the funds appropriated 
     under this title for any fiscal year shall be expended by the 
     Director to carry out activities under this title through 
     grants, contracts, or cooperative agreements. Up to 10 
     percent of the funds appropriated under this title for any 
     fiscal year may be expended directly for the purpose of 
     carrying out the functions of the Director under this 
     section.
       ``(h)(1) The Director shall--
       ``(A) by October 1, 1998 and every fifth October 1 
     thereafter, prepare and publish in the Federal Register for 
     public comment a draft of a 5-year plan that outlines 
     priorities for rehabilitation research, demonstration 
     projects, training, and related activities and explains the 
     basis for such priorities;

[[Page S149]]

       ``(B) by June 1, 1999, and every fifth June 1 thereafter, 
     after considering public comments, submit the plan in final 
     form to the appropriate committees of Congress;
       ``(C) at appropriate intervals, prepare and submit 
     revisions in the plan to the appropriate committees of 
     Congress; and
       ``(D) annually prepare and submit progress reports on the 
     plan to the appropriate committees of Congress.
       ``(2) Such plan shall--
       ``(A) identify any covered activity that should be 
     conducted under this section and section 204 respecting the 
     full inclusion and integration into society of individuals 
     with disabilities, especially in the area of employment;
       ``(B) determine the funding priorities for covered 
     activities to be conducted under this section and section 
     204;
       ``(C) specify appropriate goals and timetables for covered 
     activities to be conducted under this section and section 
     204;
       ``(D) be developed by the Director--
       ``(i) after consultation with the Rehabilitation Research 
     Advisory Council established under section 205;
       ``(ii) in coordination with the Commissioner;
       ``(iii) after consultation with the National Council on 
     Disability established under title IV, the Secretary of 
     Education, officials responsible for the administration of 
     the Developmental Disabilities Assistance and Bill of Rights 
     Act (42 U.S.C. 6000 et seq.), and the Interagency Committee 
     on Disability Research established under section 203; and
       ``(iv) after full consideration of the input of individuals 
     with disabilities and the individuals' representatives, 
     organizations representing individuals with disabilities, 
     providers of services furnished under this Act, researchers 
     in the rehabilitation field, and any other persons or 
     entities the Director considers to be appropriate;
       ``(E) specify plans for widespread dissemination of the 
     results of covered activities, in accessible formats, to 
     rehabilitation practitioners, individuals with disabilities, 
     and the individuals' representatives; and
       ``(F) specify plans for widespread dissemination of the 
     results of covered activities that concern individuals with 
     disabilities who are members of minority groups or of 
     populations that are unserved or underserved by programs 
     carried out under this Act.
       ``(i) In order to promote cooperation among Federal 
     departments and agencies conducting research programs, the 
     Director shall consult with the administrators of such 
     programs, and with the Interagency Committee established by 
     section 203, regarding the design of research projects 
     conducted by such entities and the results and applications 
     of such research.
       ``(j)(1) The Director shall take appropriate actions to 
     provide for a comprehensive and coordinated research program 
     under this title. In providing such a program, the Director 
     may undertake joint activities with other Federal entities 
     engaged in research and with appropriate private entities. 
     Any Federal entity proposing to establish any research 
     project related to the purposes of this Act shall consult, 
     through the Interagency Committee established by section 203, 
     with the Director as Chairperson of such Committee and 
     provide the Director with sufficient prior opportunity to 
     comment on such project.
       ``(2) Any person responsible for administering any program 
     of the National Institutes of Health, the Department of 
     Veterans Affairs, the National Science Foundation, the 
     National Aeronautics and Space Administration, the Office of 
     Special Education and Rehabilitative Services, or of any 
     other Federal entity, shall, through the Interagency 
     Committee established by section 203, consult and cooperate 
     with the Director in carrying out such program if the program 
     is related to the purposes of this title.
       ``(k) The Director shall make grants to institutions of 
     higher education for the training of rehabilitation 
     researchers, including individuals with disabilities, with 
     particular attention to research areas that support the 
     implementation and objectives of this Act and that improve 
     the effectiveness of services authorized under this Act.

                        ``interagency committee

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

                ``research and other covered activities

       ``Sec. 204. (a)(1) To the extent consistent with priorities 
     established in the 5-year plan described in section 202(h), 
     the Director may make grants to and contracts with States and 
     public or private agencies and organizations, including 
     institutions of higher education, Indian tribes, and tribal 
     organizations, to pay part of the cost of projects for the 
     purpose of planning and conducting research, demonstration 
     projects, training, and related activities, the purposes of 
     which are to develop methods, procedures, and rehabilitation 
     technology, that maximize the full inclusion and integration 
     into society, employment, independent living, family support, 
     and economic and social self-sufficiency of individuals with 
     disabilities, especially individuals with the most 
     significant disabilities, and improve the effectiveness of 
     services authorized under this Act.
       ``(2)(A) In carrying out this section, the Director shall 
     emphasize projects that support the implementation of titles 
     I, III, V, VI, and VII, including projects addressing the 
     needs described in the State plans submitted under section 
     101 or 704 by State agencies.
       ``(B) Such projects, as described in the State plans 
     submitted by State agencies, may include--
       ``(i) medical and other scientific, technical, 
     methodological, and other investigations into the nature of 
     disability, methods of analyzing it, and restorative 
     techniques, including basic research where related to 
     rehabilitation techniques or services;
       ``(ii) studies and analysis of industrial, vocational, 
     social, recreational, psychiatric, psychological, economic, 
     and other factors affecting rehabilitation of individuals 
     with disabilities;
       ``(iii) studies and analysis of special problems of 
     individuals who are homebound and individuals who are 
     institutionalized;
       ``(iv) studies, analyses, and demonstrations of 
     architectural and engineering design adapted to meet the 
     special needs of individuals with disabilities;
       ``(v) studies, analyses, and other activities related to 
     supported employment;
       ``(vi) related activities which hold promise of increasing 
     knowledge and improving methods in the rehabilitation of 
     individuals with disabilities and individuals with the most 
     significant disabilities, particularly individuals with 
     disabilities, and individuals with the most significant 
     disabilities, who are members of populations that are 
     unserved or underserved by programs under this Act; and
       ``(vii) studies, analyses, and other activities related to 
     job accommodations, including the use of rehabilitation 
     engineering and assistive technology.
       ``(b)(1) In addition to carrying out projects under 
     subsection (a), the Director may make grants under this 
     subsection (referred to in this subsection as `research 
     grants') to pay part or all of the cost of the research or 
     other specialized covered activities described in paragraphs 
     (2) through (18). A research grant made under any of 
     paragraphs (2) through (18) may only be used in a manner 
     consistent with priorities established in the 5-year plan 
     described in section 202(h).
       ``(2)(A) Research grants may be used for the establishment 
     and support of Rehabilitation Research and Training Centers, 
     for the purpose of providing an integrated program of 
     research, which Centers shall--
       ``(i) be operated in collaboration with institutions of 
     higher education or providers of rehabilitation services or 
     other appropriate services; and
       ``(ii) serve as centers of national excellence and national 
     or regional resources for providers and individuals with 
     disabilities and the individuals' representatives.
       ``(B) The Centers shall conduct research and training 
     activities by--
       ``(i) conducting coordinated and advanced programs of 
     research in rehabilitation targeted toward the production of 
     new knowledge that will improve rehabilitation methodology 
     and service delivery systems, alleviate or stabilize 
     disabling conditions, and promote maximum social and economic 
     independence of individuals with disabilities, especially 
     promoting the ability of the individuals to prepare for, 
     secure, retain, regain, or advance in employment;
       ``(ii) providing training (including graduate, pre-service, 
     and in-service training) to assist individuals to more 
     effectively provide rehabilitation services;
       ``(iii) providing training (including graduate, pre-
     service, and in-service training) for rehabilitation research 
     personnel and other rehabilitation personnel; and
       ``(iv) serving as an informational and technical assistance 
     resource to providers, individuals with disabilities, and the 
     individuals' representatives, through conferences, workshops, 
     public education programs, in-service training programs, and 
     similar activities.
       ``(C) The research to be carried out at each such Center 
     may include--

[[Page S150]]

       ``(i) basic or applied medical rehabilitation research;
       ``(ii) research regarding the psychological and social 
     aspects of rehabilitation, including disability policy;
       ``(iii) research related to vocational rehabilitation;
       ``(iv) continuation of research that promotes the 
     emotional, social, educational, and functional growth of 
     children who are individuals with disabilities;
       ``(v) continuation of research to develop and evaluate 
     interventions, policies, and services that support families 
     of those children and adults who are individuals with 
     disabilities; and
       ``(vi) continuation of research that will improve services 
     and policies that foster the productivity, independence, and 
     social integration of individuals with disabilities, and 
     enable individuals with disabilities, including individuals 
     with mental retardation and other developmental disabilities, 
     to live in their communities.
       ``(D) Training of students preparing to be rehabilitation 
     personnel shall be an important priority for such a Center.
       ``(E) The Director shall make grants under this paragraph 
     to establish and support both comprehensive centers dealing 
     with multiple disabilities and centers primarily focused on 
     particular disabilities.
       ``(F) Grants made under this paragraph may be used to 
     provide funds for services rendered by such a Center to 
     individuals with disabilities in connection with the research 
     and training activities.
       ``(G) Grants made under this paragraph may be used to 
     provide faculty support for teaching--
       ``(i) rehabilitation-related courses of study for credit; 
     and
       ``(ii) other courses offered by the Centers, either 
     directly or through another entity.
       ``(H) The research and training activities conducted by 
     such a Center shall be conducted in a manner that is 
     accessible to and usable by individuals with disabilities.
       ``(I) The Director shall encourage the Centers to develop 
     practical applications for the findings of the research of 
     the Centers.
       ``(J) In awarding grants under this paragraph, the Director 
     shall take into consideration the location of any proposed 
     Center and the appropriate geographic and regional allocation 
     of such Centers.
       ``(K) To be eligible to receive a grant under this 
     paragraph, each such institution or provider described in 
     subparagraph (A) shall--
       ``(i) be of sufficient size, scope, and quality to 
     effectively carry out the activities in an efficient manner 
     consistent with appropriate State and Federal law; and
       ``(ii) demonstrate the ability to carry out the training 
     activities either directly or through another entity that can 
     provide such training.
       ``(L) The Director shall make grants under this paragraph 
     for periods of 5 years, except that the Director may make a 
     grant for a period of less than 5 years if--
       ``(i) the grant is made to a new recipient; or
       ``(ii) the grant supports new or innovative research.
       ``(M) Grants made under this paragraph shall be made on a 
     competitive basis. To be eligible to receive a grant under 
     this paragraph, a prospective grant recipient shall submit an 
     application to the Director at such time, in such manner, and 
     containing such information as the Director may require.
       ``(N) In conducting scientific peer review under section 
     202(f) of an application for the renewal of a grant made 
     under this paragraph, the peer review panel shall take into 
     account the past performance of the applicant in carrying out 
     the grant and input from individuals with disabilities and 
     the individuals' representatives.
       ``(O) An institution or provider that receives a grant 
     under this paragraph to establish such a Center may not 
     collect more than 15 percent of the amount of the grant 
     received by the Center in indirect cost charges.
       ``(3)(A) Research grants may be used for the establishment 
     and support of Rehabilitation Engineering Research Centers, 
     operated by or in collaboration with institutions of higher 
     education or nonprofit organizations, to conduct research or 
     demonstration activities, and training activities, regarding 
     rehabilitation technology, including rehabilitation 
     engineering, assistive technology devices, and assistive 
     technology services, for the purposes of enhancing 
     opportunities for better meeting the needs of, and addressing 
     the barriers confronted by, individuals with disabilities in 
     all aspects of their lives.
       ``(B) In order to carry out the purposes set forth in 
     subparagraph (A), such a Center shall carry out the research 
     or demonstration activities by--
       ``(i) developing and disseminating innovative methods of 
     applying advanced technology, scientific achievement, and 
     psychological and social knowledge to--
       ``(I) solve rehabilitation problems and remove 
     environmental barriers through planning and conducting 
     research, including cooperative research with public or 
     private agencies and organizations, designed to produce new 
     scientific knowledge, and new or improved methods, equipment, 
     and devices; and
       ``(II) study new or emerging technologies, products, or 
     environments, and the effectiveness and benefits of such 
     technologies, products, or environments;
       ``(ii) demonstrating and disseminating--
       ``(I) innovative models for the delivery, to rural and 
     urban areas, of cost-effective rehabilitation technology 
     services that promote utilization of assistive technology 
     devices; and
       ``(II) other scientific research to assist in meeting the 
     employment and independent living needs of individuals with 
     significant disabilities; or
       ``(iii) conducting research or demonstration activities 
     that facilitate service delivery systems change by 
     demonstrating, evaluating, documenting, and disseminating--
       ``(I) consumer responsive and individual and family-
     centered innovative models for the delivery to both rural and 
     urban areas, of innovative cost-effective rehabilitation 
     technology services that promote utilization of 
     rehabilitation technology; and
       ``(II) other scientific research to assist in meeting the 
     employment and independent living needs of, and addressing 
     the barriers confronted by, individuals with disabilities, 
     including individuals with significant disabilities.
       ``(C) To the extent consistent with the nature and type of 
     research or demonstration activities described in 
     subparagraph (B), each Center established or supported 
     through a grant made available under this paragraph shall--
       ``(i) cooperate with programs established under the 
     Technology-Related Assistance for Individuals With 
     Disabilities Act of 1988 (29 U.S.C. 2201 et seq.) and other 
     regional and local programs to provide information to 
     individuals with disabilities and the individuals' 
     representatives to--
       ``(I) increase awareness and understanding of how 
     rehabilitation technology can address their needs; and
       ``(II) increase awareness and understanding of the range of 
     options, programs, services, and resources available, 
     including financing options for the technology and services 
     covered by the area of focus of the Center;
       ``(ii) provide training opportunities to individuals, 
     including individuals with disabilities, to become 
     researchers of rehabilitation technology and practitioners of 
     rehabilitation technology in conjunction with institutions of 
     higher education and nonprofit organizations; and
       ``(iii) respond, through research or demonstration 
     activities, to the needs of individuals with all types of 
     disabilities who may benefit from the application of 
     technology within the area of focus of the Center.
       ``(D)(i) In establishing Centers to conduct the research or 
     demonstration activities described in subparagraph (B)(iii), 
     the Director may establish one Center in each of the 
     following areas of focus:
       ``(I) Early childhood services, including early 
     intervention and family support.
       ``(II) Education at the elementary and secondary levels, 
     including transition from school to postschool activities.
       ``(III) Employment, including supported employment, and 
     reasonable accommodations and the reduction of environmental 
     barriers as required by the Americans with Disabilities Act 
     of 1990 (42 U.S.C. 12101 et seq.) and title V.
       ``(IV) Independent living, including transition from 
     institutional to community living, maintenance of community 
     living on leaving the work force, self-help skills, and 
     activities of daily living.
       ``(ii) Each Center conducting the research or demonstration 
     activities described in subparagraph (B)(iii) shall have an 
     advisory committee, of which the majority of members are 
     individuals with disabilities who are users of rehabilitation 
     technology, and the individuals' representatives.
       ``(E) Grants made under this paragraph shall be made on a 
     competitive basis and shall be for a period of 5 years, 
     except that the Director may make a grant for a period of 
     less than 5 years if--
       ``(i) the grant is made to a new recipient; or
       ``(ii) the grant supports new or innovative research.
       ``(F) To be eligible to receive a grant under this 
     paragraph, a prospective grant recipient shall submit an 
     application to the Director at such time, in such manner, and 
     containing such information as the Director may require.
       ``(G) Each Center established or supported through a grant 
     made available under this paragraph shall--
       ``(i) cooperate with State agencies and other local, State, 
     regional, and national programs and organizations developing 
     or delivering rehabilitation technology, including State 
     programs funded under the Technology-Related Assistance for 
     Individuals With Disabilities Act of 1988 (29 U.S.C. 2201 et 
     seq.); and
       ``(ii) prepare and submit to the Director as part of an 
     application for continuation of a grant, or as a final 
     report, a report that documents the outcomes of the program 
     of the Center in terms of both short- and long-term impact on 
     the lives of individuals with disabilities, and such other 
     information as may be requested by the Director.
       ``(4)(A) Research grants may be used to conduct a program 
     for spinal cord injury research, including conducting such a 
     program by making grants to public or private agencies and 
     organizations to pay part or all of the costs of special 
     projects and demonstration projects for spinal cord injuries, 
     that will--
       ``(i) ensure widespread dissemination of research findings 
     among all Spinal Cord Injury Centers, to rehabilitation 
     practitioners, individuals with spinal cord injury, the 
     individuals' representatives, and organizations receiving 
     financial assistance under this paragraph;

[[Page S151]]

       ``(ii) provide encouragement and support for initiatives 
     and new approaches by individual and institutional 
     investigators; and
       ``(iii) establish and maintain close working relationships 
     with other governmental and voluntary institutions and 
     organizations engaged in similar efforts in order to unify 
     and coordinate scientific efforts, encourage joint planning, 
     and promote the interchange of data and reports among spinal 
     cord injury investigations.
       ``(B) Any agency or organization carrying out a project or 
     demonstration project assisted by a grant under this 
     paragraph that provides services to individuals with spinal 
     cord injuries shall--
       ``(i) establish, on an appropriate regional basis, a 
     multidisciplinary system of providing vocational and other 
     rehabilitation services, specifically designed to meet the 
     special needs of individuals with spinal cord injuries, 
     including acute care as well as periodic inpatient or 
     outpatient followup and services;
       ``(ii) demonstrate and evaluate the benefits to individuals 
     with spinal cord injuries served in, and the degree of cost 
     effectiveness of, such a regional system;
       ``(iii) demonstrate and evaluate existing, new, and 
     improved methods and rehabilitation technology essential to 
     the care, management, and rehabilitation of individuals with 
     spinal cord injuries; and
       ``(iv) demonstrate and evaluate methods of community 
     outreach for individuals with spinal cord injuries and 
     community education in connection with the problems of such 
     individuals in areas such as housing, transportation, 
     recreation, employment, and community activities.
       ``(C) In awarding grants under this paragraph, the Director 
     shall take into account the location of any proposed Spinal 
     Cord Injury Center and the appropriate geographic and 
     regional allocation of such Centers.
       ``(5) Research grants may be used to conduct a program for 
     end-stage renal disease research, to include support of 
     projects and demonstrations for providing special services 
     (including transplantation and dialysis), artificial kidneys, 
     and supplies necessary for the rehabilitation of individuals 
     with such disease and which will--
       ``(A) insure dissemination of research findings;
       ``(B) provide encouragement and support for initiatives and 
     new approaches by individuals and institutional 
     investigators; and
       ``(C) establish and maintain close working relationships 
     with other governmental and voluntary institutions and 
     organizations engaged in similar efforts,

     in order to unify and coordinate scientific efforts, 
     encourage joint planning, and promote the interchange of data 
     and reports among investigators in the field of end-stage 
     renal disease. No person shall be selected to participate in 
     such program who is eligible for services for such disease 
     under any other provision of law.
       ``(6) Research grants may be used to conduct a program for 
     international rehabilitation research, demonstration, and 
     training for the purpose of developing new knowledge and 
     methods in the rehabilitation of individuals with 
     disabilities in the United States, cooperating with and 
     assisting in developing and sharing information found useful 
     in other nations in the rehabilitation of individuals with 
     disabilities, and initiating a program to exchange experts 
     and technical assistance in the field of rehabilitation of 
     individuals with disabilities with other nations as a means 
     of increasing the levels of skill of rehabilitation 
     personnel.
       ``(7) Research grants may be used to conduct a research 
     program concerning the use of existing telecommunications 
     systems (including telephone, television, satellite, radio, 
     and other similar systems) which have the potential for 
     substantially improving service delivery methods, and the 
     development of appropriate programing to meet the particular 
     needs of individuals with disabilities.
       ``(8) Research grants may be used to conduct a program of 
     joint projects with the National Institutes of Health, the 
     National Institute of Mental Health, the Health Services 
     Administration, the Administration on Aging, the National 
     Science Foundation, the Veterans' Administration, the 
     Department of Health and Human Services, the National 
     Aeronautics and Space Administration, other Federal agencies, 
     and private industry in areas of joint interest involving 
     rehabilitation.
       ``(9) Research grants may be used to conduct a program of 
     research related to the rehabilitation of children, or older 
     individuals, who are individuals with disabilities, including 
     older American Indians who are individuals with disabilities. 
     Such research program may include projects designed to assist 
     the adjustment of, or maintain as residents in the community, 
     older workers who are individuals with disabilities on 
     leaving the work force.
       ``(10) Research grants may be used to conduct a research 
     program to develop and demonstrate innovative methods to 
     attract and retain professionals to serve in rural areas in 
     the rehabilitation of individuals with disabilities, 
     including individuals with significant disabilities.
       ``(11) Research grants may be used to conduct a model 
     research and demonstration project designed to assess the 
     feasibility of establishing a center for producing and 
     distributing to individuals who are deaf or hard of hearing 
     captioned video cassettes providing a broad range of 
     educational, cultural, scientific, and vocational programing.
       ``(12) Research grants may be used to conduct a model 
     research and demonstration program to develop innovative 
     methods of providing services for preschool age children who 
     are individuals with disabilities, including the--
       ``(A) early intervention, assessment, parent counseling, 
     infant stimulation, early identification, diagnosis, and 
     evaluation of children who are individuals with significant 
     disabilities up to the age of five, with a special emphasis 
     on children who are individuals with significant disabilities 
     up to the age of three;
       ``(B) such physical therapy, language development, 
     pediatric, nursing, psychological, and psychiatric services 
     as are necessary for such children; and
       ``(C) appropriate services for the parents of such 
     children, including psychological and psychiatric services, 
     parent counseling, and training.
       ``(13) Research grants may be used to conduct a model 
     research and training program under which model training 
     centers shall be established to develop and use more advanced 
     and effective methods of evaluating and addressing the 
     employment needs of individuals with disabilities, including 
     programs which--
       ``(A) provide training and continuing education for 
     personnel involved with the employment of individuals with 
     disabilities;
       ``(B) develop model procedures for testing and evaluating 
     the employment needs of individuals with disabilities;
       ``(C) develop model training programs to teach individuals 
     with disabilities skills which will lead to appropriate 
     employment;
       ``(D) develop new approaches for job placement of 
     individuals with disabilities, including new followup 
     procedures relating to such placement;
       ``(E) provide information services regarding education, 
     training, employment, and job placement for individuals with 
     disabilities; and
       ``(F) develop new approaches and provide information 
     regarding job accommodations, including the use of 
     rehabilitation engineering and assistive technology.
       ``(14) Research grants may be used to conduct a 
     rehabilitation research program under which financial 
     assistance is provided in order to--
       ``(A) test new concepts and innovative ideas;
       ``(B) demonstrate research results of high potential 
     benefits;
       ``(C) purchase prototype aids and devices for evaluation;
       ``(D) develop unique rehabilitation training curricula; and
       ``(E) be responsive to special initiatives of the Director.

     No single grant under this paragraph may exceed $50,000 in 
     any fiscal year and all payments made under this paragraph in 
     any fiscal year may not exceed 5 percent of the amount 
     available for this section to the National Institute on 
     Disability and Rehabilitation Research in any fiscal year. 
     Regulations and administrative procedures with respect to 
     financial assistance under this paragraph shall, to the 
     maximum extent possible, be expedited.
       ``(15) Research grants may be used to conduct studies of 
     the rehabilitation needs of American Indian populations and 
     of effective mechanisms for the delivery of rehabilitation 
     services to Indians residing on and off reservations.
       ``(16) Research grants may be used to conduct a 
     demonstration program under which one or more projects 
     national in scope shall be established to develop procedures 
     to provide incentives for the development, manufacturing, and 
     marketing of orphan technological devices, including 
     technology transfer concerning such devices, designed to 
     enable individuals with disabilities to achieve independence 
     and access to gainful employment.
       ``(17)(A) Research grants may be used to conduct a research 
     program related to quality assurance in the area of 
     rehabilitation technology.
       ``(B) Activities carried out under the research program may 
     include--
       ``(i) the development of methodologies to evaluate 
     rehabilitation technology products and services and the 
     dissemination of the methodologies to consumers and other 
     interested parties;
       ``(ii) identification of models for service provider 
     training and evaluation and certification of the 
     effectiveness of the models;
       ``(iii) identification and dissemination of outcome 
     measurement models for the assessment of rehabilitation 
     technology products and services; and
       ``(iv) development and testing of research-based tools to 
     enhance consumer decisionmaking about rehabilitation 
     technology products and services.
       ``(C) The Director shall develop the quality assurance 
     research program after consultation with representatives of 
     all types of organizations interested in rehabilitation 
     technology quality assurance.
       ``(18) Research grants may be used to provide for research 
     and demonstration projects and related activities that 
     explore the use and effectiveness of specific alternative or 
     complementary medical practices for individuals with 
     disabilities. Such projects and activities may include 
     projects and activities designed to--
       ``(A) determine the use of specific alternative or 
     complementary medical practices

[[Page S152]]

     among individuals with disabilities and the perceived 
     effectiveness of the practices;
       ``(B) determine the specific information sources, 
     decisionmaking methods, and methods of payment used by 
     individuals with disabilities who access alternative or 
     complementary medical services;
       ``(C) develop criteria to screen and assess the validity of 
     research studies of such practices for individuals with 
     disabilities; and
       ``(D) determine the effectiveness of specific alternative 
     or complementary medical practices that show promise for 
     promoting increased functioning, prevention of secondary 
     disabilities, or other positive outcomes for individuals with 
     certain types of disabilities, by conducting controlled 
     research studies.
       ``(c)(1) In carrying out evaluations of covered activities 
     under this section, the Director is authorized to make 
     arrangements for site visits to obtain information on the 
     accomplishments of the projects.
       ``(2) The Director shall not make a grant under this 
     section which exceeds $499,999 unless the peer review of the 
     grant application has included a site visit.


               ``rehabilitation research advisory council

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

     SEC. 6. PROFESSIONAL DEVELOPMENT AND SPECIAL PROJECTS AND 
                   DEMONSTRATIONS.

       Title III of the Rehabilitation Act of 1973 (29 U.S.C. 770 
     et seq.) is amended to read as follows:
    ``TITLE III--PROFESSIONAL DEVELOPMENT AND SPECIAL PROJECTS AND 
                             DEMONSTRATIONS

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

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

     ``SEC. 302. TRAINING.

       ``(a) Grants and Contracts for Personnel Training.--
       ``(1) Authority.--The Commissioner shall make grants to, 
     and enter into contracts with, States and public or nonprofit 
     agencies and organizations (including institutions of higher 
     education) to pay part of the cost of projects to provide 
     training, traineeships, and related activities, including the 
     provision of technical assistance, that are designed to 
     assist in increasing the numbers of, and upgrading the skills 
     of, qualified personnel (especially rehabilitation 
     counselors) who are trained in providing vocational, medical, 
     social, and psychological rehabilitation services, who are 
     trained to assist individuals with communication and related 
     disorders, who are trained to provide other services provided 
     under this Act, to individuals with disabilities, and who may 
     include--
       ``(A) personnel specifically trained in providing 
     employment assistance to individuals with disabilities 
     through job development and job placement services;
       ``(B) personnel specifically trained to identify, assess, 
     and meet the individual rehabilitation needs of individuals 
     with disabilities, including needs for rehabilitation 
     technology;
       ``(C) personnel specifically trained to deliver services to 
     individuals who may benefit from receiving independent living 
     services;
       ``(D) personnel specifically trained to deliver services in 
     the client assistance programs;
       ``(E) personnel specifically trained to deliver services, 
     through supported employment programs, to individuals with a 
     most significant disability;
       ``(F) personnel providing vocational rehabilitation 
     services specifically trained in the use of braille, the 
     importance of braille literacy, and in methods of teaching 
     braille; and
       ``(G) personnel trained in performing other functions 
     necessary to the provision of vocational, medical, social, 
     and psychological rehabilitation services, and other services 
     provided under this Act.
       ``(2) Authority to provide scholarships.--Grants and 
     contracts under paragraph (1) may be expended for 
     scholarships and may include necessary stipends and 
     allowances.
       ``(3) Related federal statutes.--In carrying out this 
     subsection, the Commissioner may make grants to and enter 
     into contracts with States and public or nonprofit agencies 
     and organizations, including institutions of higher 
     education, to furnish training regarding related Federal 
     statutes (other than this Act).
       ``(4) Training for statewide workforce systems personnel.--
     The Commissioner may make grants to and enter into contracts 
     under this subsection with States and public or nonprofit 
     agencies and organizations, including institutions of higher 
     education, to furnish training to personnel providing 
     services to individuals with disabilities under the Workforce 
     Investment Partnership Act of 1998. Under this paragraph, 
     personnel may be trained--
       ``(A) in evaluative skills to determine whether an 
     individual with a disability may be served by the State 
     vocational rehabilitation program or another component of the 
     statewide workforce investment system; or
       ``(B) to assist individuals with disabilities seeking 
     assistance through one-stop customer service centers 
     established under section 315 of the Workforce Investment 
     Partnership Act of 1998.
       ``(5) Joint funding.--Training and other activities 
     provided under paragraph (4) for personnel may be jointly 
     funded with the Department of Labor, using funds made 
     available under title III of the Workforce Investment 
     Partnership Act of 1998.
       ``(b) Grants and Contracts for Academic Degrees and 
     Academic Certificate Granting Training Projects.--
       ``(1) Authority.--

[[Page S153]]

       ``(A) In general.--The Commissioner may make grants to, and 
     enter into contracts with, States and public or nonprofit 
     agencies and organizations (including institutions of higher 
     education) to pay part of the costs of academic training 
     projects to provide training that leads to an academic degree 
     or academic certificate. In making such grants or entering 
     into such contracts, the Commissioner shall target funds to 
     areas determined under subsection (e) to have shortages of 
     qualified personnel.
       ``(B) Types of projects.--Academic training projects 
     described in this subsection may include--
       ``(i) projects to train personnel in the areas of 
     vocational rehabilitation counseling, rehabilitation 
     technology, rehabilitation medicine, rehabilitation nursing, 
     rehabilitation social work, rehabilitation psychiatry, 
     rehabilitation psychology, rehabilitation dentistry, physical 
     therapy, occupational therapy, speech pathology and 
     audiology, physical education, therapeutic recreation, 
     community rehabilitation programs, or prosthetics and 
     orthotics;
       ``(ii) projects to train personnel to provide--

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

       ``(iii) projects to train personnel in other fields 
     contributing to the rehabilitation of individuals with 
     disabilities; and
       ``(iv) projects to train personnel in the use, 
     applications, and benefits of rehabilitation technology.
       ``(2) Application.--No grant shall be awarded or contract 
     entered into under this subsection unless the applicant has 
     submitted to the Commissioner an application at such time, in 
     such form, in accordance with such procedures, and including 
     such information as the Secretary may require, including--
       ``(A) a description of how the designated State unit or 
     units will participate in the project to be funded under the 
     grant or contract, including, as appropriate, participation 
     on advisory committees, as practicum sites, in curriculum 
     development, and in other ways so as to build closer 
     relationships between the applicant and the designated State 
     unit and to encourage students to pursue careers in public 
     vocational rehabilitation programs;
       ``(B) the identification of potential employers that would 
     meet the requirements of paragraph (4)(A)(i); and
       ``(C) an assurance that data on the employment of graduates 
     or trainees who participate in the project is accurate.
       ``(3) Limitation.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     no grant or contract under this subsection may be used to 
     provide any one course of study to an individual for a period 
     of more than 4 years.
       ``(B) Exception.--If a grant or contract recipient under 
     this subsection determines that an individual has a 
     disability which seriously affects the completion of training 
     under this subsection, the grant or contract recipient may 
     extend the period referred to in subparagraph (A).
       ``(4) Required agreements.--
       ``(A) In general.--A recipient of a grant or contract under 
     this subsection shall provide assurances to the Commissioner 
     that each individual who receives a scholarship, for the 
     first academic year after the date of enactment of the 
     Rehabilitation Act Amendments of 1998, utilizing funds 
     provided under such grant or contract shall enter into an 
     agreement with the recipient under which the individual 
     shall--
       ``(i) maintain employment--

       ``(I) with an employer that is a State rehabilitation or 
     other agency or organization (including a professional 
     corporation or practice group) that provides services to 
     individuals with disabilities under this Act, or with an 
     institution of higher education or other organization that 
     conducts rehabilitation education, training, or research 
     under this Act;
       ``(II) on a full- or part-time basis; and
       ``(III) for a period of not less than the full-time 
     equivalent of 2 years for each year for which assistance 
     under this subsection was received by the individual, within 
     a period, beginning after the recipient completes the 
     training for which the scholarship was awarded, of not more 
     than the sum of the number of years in the period described 
     in this subclause and 2 additional years;

       ``(ii) directly provide or administer services, conduct 
     research, or furnish training, funded under this Act; and
       ``(iii) repay all or part of the amount of any scholarship 
     received under the grant or contract, plus interest, if the 
     individual does not fulfill the requirements of clauses (i) 
     and (ii), except that the Commissioner may by regulation 
     provide for repayment exceptions and deferrals.
       ``(B) Enforcement.--The Commissioner shall be responsible 
     for the enforcement of each agreement entered into under 
     subparagraph (A) upon the completion of the training involved 
     with respect to such agreement.
       ``(c) Grants to Historically Black Colleges and 
     Universities.--The Commissioner, in carrying out this 
     section, shall make grants to Historically Black Colleges and 
     Universities and other institutions of higher education whose 
     minority student enrollment is at least 50 percent of the 
     total enrollment of the institution.
       ``(d) Application.--A grant may not be awarded to a State 
     or other organization under this section unless the State or 
     organization has submitted an application to the Commissioner 
     at such time, in such form, in accordance with such 
     procedures, and containing such information as the 
     Commissioner may require, including a detailed description of 
     strategies that will be utilized to recruit and train 
     individuals so as to reflect the diverse populations of the 
     United States as part of the effort to increase the number of 
     individuals with disabilities, and individuals who are from 
     linguistically and culturally diverse backgrounds, who are 
     available to provide rehabilitation services.
       ``(e) Evaluation and Collection of Data.--The Commissioner 
     shall evaluate the impact of the training programs conducted 
     under this section, and collect information on the training 
     needs of, and data on shortages of qualified personnel 
     necessary to provide services to individuals with 
     disabilities.
       ``(f) Grants for the Training of Interpreters.--
       ``(1) Authority.--
       ``(A) In general.--For the purpose of training a sufficient 
     number of qualified interpreters to meet the communications 
     needs of individuals who are deaf or hard of hearing, and 
     individuals who are deaf-blind, the Commissioner, acting 
     through a Federal office responsible for deafness and 
     communicative disorders, may award grants to public or 
     private nonprofit agencies or organizations to pay part of 
     the costs--
       ``(i) for the establishment of interpreter training 
     programs; or
       ``(ii) to enable such agencies or organizations to provide 
     financial assistance for ongoing interpreter training 
     programs.
       ``(B) Geographic areas.--The Commissioner shall award 
     grants under this subsection for programs in geographic areas 
     throughout the United States that the Commissioner considers 
     appropriate to best carry out the objectives of this section.
       ``(C) Priority.--In awarding grants under this subsection, 
     the Commissioner shall give priority to public or private 
     nonprofit agencies or organizations with existing programs 
     that have a demonstrated capacity for providing interpreter 
     training services.
       ``(D) Funding.--The Commissioner may award grants under 
     this subsection through the use of--
       ``(i) amounts appropriated to carry out this section; or
       ``(ii) pursuant to an agreement with the Director of the 
     Office of the Special Education Program (established under 
     section 603 of the Individuals with Disabilities Education 
     Act (as amended by section 101 of the Individuals with 
     Disabilities Education Act Amendments of 1997 (Public Law 
     105-17))), amounts appropriated under section 686 of the 
     Individuals with Disabilities Education Act.
       ``(2) Application.--A grant may not be awarded to an agency 
     or organization under paragraph (1) unless the agency or 
     organization has submitted an application to the Commissioner 
     at such time, in such form, in accordance with such 
     procedures, and containing such information as the 
     Commissioner may require, including--
       ``(A) a description of the manner in which an interpreter 
     training program will be developed and operated during the 5-
     year period following the date on which a grant is received 
     by the applicant under this subsection;
       ``(B) a demonstration of the applicant's capacity or 
     potential for providing training for interpreters for 
     individuals who are deaf or hard of hearing, and individuals 
     who are deaf-blind;
       ``(C) assurances that any interpreter trained or retrained 
     under a program funded under the grant will meet such minimum 
     standards of competency as the Commissioner may establish for 
     purposes of this subsection; and
       ``(D) such other information as the Commissioner may 
     require.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of the fiscal years 1998 
     through 2004.
       ``(h) Provision of Information.--The Commissioner, subject 
     to the provisions of section 306, may require that recipients 
     of grants or contracts under this section provide 
     information, including data, with regard to the impact of 
     activities funded under this section.

     ``SEC. 303. SPECIAL DEMONSTRATION PROGRAM.

       ``(a) Authority.--The Commissioner, subject to the 
     provisions of section 306, may award grants or contracts to 
     eligible entities to pay all or part of the cost of programs 
     that expand and improve the provision of rehabilitation and 
     other services authorized under this Act or that further the 
     purposes of the Act, including related research and 
     evaluation activities.
       ``(b) Eligible Entities and Terms and Conditions.--
       ``(1) Eligible entities.--To be eligible to receive a grant 
     or contract under subsection

[[Page S154]]

     (a), an entity shall be a State vocational rehabilitation 
     agency, community rehabilitation program, Indian tribe or 
     tribal organization, or other public or nonprofit agency or 
     organization, or as the Commissioner determines appropriate, 
     a for-profit organization. The Commissioner may limit 
     competitions to 1 or more types of organizations described in 
     this paragraph.
       ``(2) Terms and conditions.--Awards under this section 
     shall contain such terms and conditions as the Commissioner 
     may require.
       ``(c) Application.--An eligible entity that desires to 
     receive an award under this section shall submit an 
     application to the Secretary at such time, in such form, and 
     containing such information and assurances as the 
     Commissioner may require, including, if the Commissioner 
     determines appropriate, a description of how the proposed 
     project or demonstration program--
       ``(1) is based on current research findings, which may 
     include research conducted by the National Institute on 
     Disability and Rehabilitation Research, the National 
     Institutes of Health, and other public or private 
     organizations; and
       ``(2) is of national significance.
       ``(d) Types of Projects.--The programs that may be funded 
     under this section include--
       ``(1) special projects and demonstrations of service 
     delivery;
       ``(2) model demonstration projects;
       ``(3) technical assistance projects;
       ``(4) systems change projects;
       ``(5) special studies and evaluations; and
       ``(6) dissemination and utilization activities.
       ``(e) Priority for Competitions.--
       ``(1) In general.--In announcing competitions for grants 
     and contracts under this section, the Commissioner shall give 
     priority consideration to--
       ``(A) projects to provide training, information, and 
     technical assistance that will enable individuals with 
     disabilities and the individuals' representatives, to 
     participate more effectively in meeting the vocational, 
     independent living, and rehabilitation needs of the 
     individuals with disabilities;
       ``(B) special projects and demonstration programs of 
     service delivery for adults who are either low-functioning 
     and deaf or low-functioning and hard of hearing;
       ``(C) innovative methods of promoting consumer choice in 
     the rehabilitation process;
       ``(D) supported employment, including community-based 
     supported employment programs to meet the needs of 
     individuals with the most significant disabilities or to 
     provide technical assistance to States and community 
     organizations to improve and expand the provision of 
     supported employment services; and
       ``(E) model transitional planning services for youths with 
     disabilities;
       ``(2) Eligibility and coordination.--
       ``(A) Eligibility.--Eligible applicants for grants and 
     contracts under this section for projects described in 
     paragraph (1)(A) include--
       ``(i) Parent Training and Information Centers funded under 
     section 682 of the Individuals with Disabilities Education 
     Act (as amended by section 101 of the Individuals with 
     Disabilities Education Act Amendments of 1997 (Public Law 
     105-17));
       ``(ii) organizations that meet the definition of a parent 
     organization in section 682 of such Act; and
       ``(iii) private nonprofit organizations assisting parent 
     training and information centers.
       ``(B) Coordination.--Recipients of grants and contracts 
     under this section for projects described in paragraph (1)(A) 
     shall, to the extent practicable, coordinate training and 
     information activities with Centers for Independent Living.
       ``(3) Additional competitions.--In announcing competitions 
     for grants and contracts under this section, the Commissioner 
     may require that applicants address 1 or more of the 
     following:
       ``(A) Age ranges.
       ``(B) Types of disabilities.
       ``(C) Types of services.
       ``(D) Models of service delivery.
       ``(E) Stage of the rehabilitation process.
       ``(F) The needs of--
       ``(i) underserved populations;
       ``(ii) unserved and underserved areas;
       ``(iii) individuals with significant disabilities;
       ``(iv) low-incidence disability populations; and
       ``(v) individuals residing in federally designated 
     empowerment zones and enterprise communities.
       ``(G) Expansion of employment opportunities for individuals 
     with disabilities.
       ``(H) Systems change projects to promote meaningful access 
     of individual with disabilities to employment related 
     services under the Workforce Investment Partnership Act of 
     1998 and under other Federal laws.
       ``(I) Innovative methods of promoting the achievement of 
     high-quality employment outcomes.
       ``(J) The demonstration of the effectiveness of early 
     intervention activities in improving employment outcomes.
       ``(K) Alternative methods of providing affordable 
     transportation services to individuals with disabilities who 
     are employed, seeking employment, or receiving vocational 
     rehabilitation services from public or private organizations 
     and who reside in geographic areas in which public 
     transportation or paratransit service is not available.
       ``(f) Use of Funds for Continuation Awards.--The 
     Commissioner may use funds made available to carry out this 
     section for continuation awards for projects that were funded 
     under sections 12 and 311 (as such sections were in effect on 
     the day prior to the date of the enactment of the 
     Rehabilitation Act Amendments of 1998).
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of the fiscal years 1998 
     through 2004.

     ``SEC. 304. MIGRANT AND SEASONAL FARMWORKERS.

       ``(a) Grants.--
       ``(1) Authority.--The Commissioner, subject to the 
     provisions of section 306, may make grants to eligible 
     entities to pay up to 90 percent of the cost of projects or 
     demonstration programs for the provision of vocational 
     rehabilitation services to individuals with disabilities who 
     are migrant or seasonal farmworkers, as determined in 
     accordance with rules prescribed by the Secretary of Labor, 
     and to the family members who are residing with such 
     individuals (whether or not such family members are 
     individuals with disabilities).
       ``(2) Eligible entities.--To be eligible to receive a grant 
     under paragraph (1), an entity shall be--
       ``(A) a State designated agency;
       ``(B) a nonprofit agency working in collaboration with a 
     State agency described in subparagraph (A); or
       ``(C) a local agency working in collaboration with a State 
     agency described in subparagraph (A).
       ``(3) Maintenance and transportation.--
       ``(A) In general.--Amounts provided under a grant under 
     this section may be used to provide for the maintenance of 
     and transportation for individuals and family members 
     described in paragraph (1) as necessary for the 
     rehabilitation of such individuals.
       ``(B) Requirement.--Maintenance payments under this 
     paragraph shall be provided in a manner consistent with any 
     maintenance payments provided to other individuals with 
     disabilities in the State under this Act.
       ``(4) Assurance of cooperation.--To be eligible to receive 
     a grant under this section an entity shall provide assurances 
     (satisfactory to the Commissioner) that in the provision of 
     services under the grant there will be appropriate 
     cooperation between the grantee and other public or nonprofit 
     agencies and organizations having special skills and 
     experience in the provision of services to migrant or 
     seasonal farmworkers or their families.
       ``(5) Coordination with other programs.--The Commissioner 
     shall administer this section in coordination with other 
     programs serving migrant and seasonal farmworkers, including 
     programs under title I of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6301 et seq.), section 330 
     of the Public Health Service Act (42 U.S.C. 254b), the 
     Migrant and Seasonal Agricultural Worker Protection Act (29 
     U.S.C. 1801 et seq.), and the Workforce Investment 
     Partnership Act of 1998.
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out this section, for each of the fiscal years 1998 
     through 2004.

     ``SEC. 305. RECREATIONAL PROGRAMS.

       ``(a) Grants.--
       ``(1) Authority.--
       ``(A) In general.--The Commissioner, subject to the 
     provisions of section 306, shall make grants to States, 
     public agencies, and nonprofit private organizations to pay 
     the Federal share of the cost of the establishment and 
     operation of recreation programs to provide individuals with 
     disabilities with recreational activities and related 
     experiences to aid in the employment, mobility, 
     socialization, independence, and community integration of 
     such individuals.
       ``(B) Recreation programs.--The recreation programs that 
     may be funded using assistance provided under a grant under 
     this section may include vocational skills development, 
     leisure education, leisure networking, leisure resource 
     development, physical education and sports, scouting and 
     camping, 4-H activities, music, dancing, handicrafts, art, 
     and homemaking. When possible and appropriate, such programs 
     and activities should be provided in settings with peers who 
     are not individuals with disabilities.
       ``(C) Design of program.--Programs and activities carried 
     out under this section shall be designed to demonstrate ways 
     in which such programs assist in maximizing the independence 
     and integration of individuals with disabilities.
       ``(2) Maximum term of grant.--A grant under this section 
     shall be made for a period of not more than 3 years.
       ``(3) Availability of non grant resources.--
       ``(A) In general.--A grant may not be made to an applicant 
     under this section unless the applicant provides assurances 
     that, with respect to costs of the recreation program to be 
     carried out under the grant, the applicant, to the maximum 
     extent practicable, will make available non-Federal resources 
     (in cash or in-kind) to pay the non-Federal share of such 
     costs.
       ``(B) Federal share.--The Federal share of the costs of the 
     recreation programs carried out under this section shall be--
       ``(i) with respect to the first year in which assistance is 
     provided under a grant under this section, 100 percent;

[[Page S155]]

       ``(ii) with respect to the second year in which assistance 
     is provided under a grant under this section, 75 percent; and
       ``(iii) with respect to the third year in which assistance 
     is provided under a grant under this section, 50 percent.
       ``(4) Application.--To be eligible to receive a grant under 
     this section, a State, agency, or organization shall submit 
     an application to the Commissioner at such time, in such 
     manner, and containing such information as the Commissioner 
     may require, including a description of--
       ``(A) the manner in which the findings and results of the 
     project to be funded under the grant, particularly 
     information that facilitates the replication of the results 
     of such projects, will be made generally available; and
       ``(B) the manner in which the service program funded under 
     the grant will be continued after Federal assistance ends.
       ``(5) Level of services.--Recreation programs funded under 
     this section shall maintain, at a minimum, the same level of 
     services over a 3-year project period.
       ``(6) Reports by grantees.--
       ``(A) Requirement.--The Commissioner shall require that 
     each recipient of a grant under this section annually prepare 
     and submit to the Commissioner a report concerning the 
     results of the activities funded under the grant.
       ``(B) Limitation.--The Commissioner may not make financial 
     assistance available to a grant recipient for a subsequent 
     year until the Commissioner has received and evaluated the 
     annual report of the recipient under subparagraph (A) for the 
     current year.
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, such 
     sums as may be necessary for each of the fiscal years 1998 
     through 2004.

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

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

     SEC. 7. NATIONAL COUNCIL ON DISABILITY.

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

               ``TITLE IV--NATIONAL COUNCIL ON DISABILITY


           ``establishment of national council on disability

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


                      ``duties of national council

       ``Sec. 401. (a) The National Council shall--
       ``(1) provide advice to the Director with respect to the 
     policies and conduct of the National Institute on Disability 
     and Rehabilitation Research, including ways to improve 
     research concerning individuals with disabilities and the 
     methods of collecting and disseminating findings of such 
     research;
       ``(2) provide advice to the Commissioner with respect to 
     the policies of and conduct of the Rehabilitation Services 
     Administration;
       ``(3) advise the President, the Congress, the Commissioner, 
     the appropriate Assistant Secretary of the Department of 
     Education, and the Director of the National Institute on 
     Disability and Rehabilitation Research on the development of 
     the programs to be carried out under this Act;
       ``(4) provide advice regarding priorities for the 
     activities of the Interagency Disability Coordinating Council 
     and review the recommendations of such Council for 
     legislative and administrative changes to ensure that such 
     recommendations are consistent with the purposes of the 
     Council to promote the full integration, independence, and 
     productivity of individuals with disabilities;
       ``(5) review and evaluate on a continuing basis--
       ``(A) policies, programs, practices, and procedures 
     concerning individuals with disabilities conducted or 
     assisted by Federal departments and agencies, including 
     programs established or assisted under this Act or under the 
     Developmental Disabilities Assistance and Bill of Rights Act; 
     and
       ``(B) all statutes and regulations pertaining to Federal 
     programs which assist such individuals with disabilities;

     in order to assess the effectiveness of such policies, 
     programs, practices, procedures, statutes, and regulations in 
     meeting the needs of individuals with disabilities;
       ``(6) assess the extent to which such policies, programs, 
     practices, and procedures facilitate or impede the promotion 
     of the policies set forth in subparagraphs (A) and (B) of 
     section 400(a)(2);
       ``(7) gather information about the implementation, 
     effectiveness, and impact of the Americans with Disabilities 
     Act of 1990 (42 U.S.C. 12101 et seq.);
       ``(8) make recommendations to the President, the Congress, 
     the Secretary, the Director of the National Institute on 
     Disability and Rehabilitation Research, and other officials 
     of Federal agencies or other Federal entities, respecting 
     ways to better promote the policies set forth in section 
     400(a)(2);
       ``(9) provide to the Congress on a continuing basis advice, 
     recommendations, legislative proposals, and any additional 
     information which the National Council or the Congress deems 
     appropriate; and
       ``(10) review and evaluate on a continuing basis new and 
     emerging disability policy issues affecting individuals with 
     disabilities at the international, Federal, State, and local 
     levels, and in the private sector, including the need for and 
     coordination of adult services, access to personal assistance 
     services, school reform efforts and the impact of such 
     efforts on individuals with disabilities, access to health 
     care, and policies that operate as disincentives for the 
     individuals to seek and retain employment.
       ``(b)(1) Not later than July 26, 1998, and annually 
     thereafter, the National Council shall prepare and submit to 
     the President and the appropriate committees of the Congress 
     a report entitled `National Disability Policy: A Progress 
     Report'.
       ``(2) The report shall assess the status of the Nation in 
     achieving the policies set forth in section 400(a)(2), with 
     particular focus on the new and emerging issues impacting on 
     the lives of individuals with disabilities. The report shall 
     present, as appropriate, available data on health, housing, 
     employment, insurance, transportation, recreation, training, 
     prevention, early intervention, and education. The report 
     shall include recommendations for policy change.
       ``(3) In determining the issues to focus on and the 
     findings, conclusions, and recommendations to include in the 
     report, the National Council shall seek input from the 
     public, particularly individuals with disabilities, 
     representatives of organizations representing a broad range 
     of individuals with disabilities, and organizations and 
     agencies interested in individuals with disabilities.


               ``compensation of national council members

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

[[Page S156]]

     services for the National Council, members of the National 
     Council shall be allowed travel expenses, including per diem 
     in lieu of subsistence, in the same manner as persons 
     employed intermittently in the Government service are allowed 
     expenses under section 5703 of title 5, United States Code.


                      ``staff of national council

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


              ``administrative powers of national council

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


                   ``authorization of appropriations

       ``Sec. 405. There are authorized to be appropriated to 
     carry out this title such sums as may be necessary for each 
     of the fiscal years 1998 through 2004.''.

     SEC. 8. RIGHTS AND ADVOCACY.

       (a) Conforming Amendments to Rights and Advocacy 
     Provisions.--
       (1) Employment.--Section 501 (29 U.S.C. 791) is amended--
       (A) in the third sentence of subsection (a), by striking 
     ``President's Committees on Employment of the Handicapped'' 
     and inserting ``President's Committees on Employment of 
     People With Disabilities''; and
       (B) in subsection (e), by striking ``individualized written 
     rehabilitation program'' and inserting ``individualized 
     rehabilitation employment plan''.
       (2) Access board.--Section 502 (29 U.S.C. 792) is amended--
       (A) in subsection (b)--
       (i) in paragraph (9), by striking ``; and'' and inserting a 
     semicolon;
       (ii) in paragraph (10), by striking the period and 
     inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(11) carry out the responsibilities specified for the 
     Access Board in section 508'';
       (B) in subsection (d)(2)(A), by inserting before the 
     semicolon the following: ``and section 508(d)(2)(C)'';
       (C) in subsection (g)(2), by striking ``Committee on 
     Education and Labor'' and inserting ``Committee on Education 
     and the Workforce''; and
       (D) in subsection (i), by striking ``fiscal years 1993 
     through 1997'' and inserting ``fiscal years 1998 through 
     2004''.
       (3) Federal grants and contracts.--Section 504(a) (29 
     U.S.C. ) is amended in the first sentence by striking 
     ``section 7(8)'' and inserting ``section 7(20)''.
       (4) Secretarial responsibilities.--Section 506(a) (29 
     U.S.C. 794b(a)) is amended--
       (A) by striking the second sentence and inserting the 
     following: ``Any concurrence of the Access Board under 
     paragraph (2) shall reflect its consideration of cost studies 
     carried out by States.''; and
       (B) in the second sentence of subsection (c), by striking 
     ``provided under this paragraph'' and inserting ``provided 
     under this subsection''.
       (b) Electronic and Information Technology Regulations.--
     Section 508 (29 U.S.C. 794d) is amended to read as follows:

     ``SEC. 508. ELECTRONIC AND INFORMATION TECHNOLOGY 
                   REGULATIONS.

       ``(a) Definition.--In this section, the term `electronic 
     and information technology' includes--
       ``(1) any equipment, software, interface system, operating 
     system, or interconnected system or subsystem of equipment, 
     whether or not accessed remotely, that is used in the 
     acquisition, storage, manipulation, management, movement, 
     control, display, switching, interchange, transmission, or 
     reception of data or information; and
       ``(2) any related service (including a support service) and 
     any related resource.
       ``(b) Promulgation of Rules and Regulations.--
       ``(1) Procurement, maintenance, and use of electronic and 
     information technology.--Consistent with paragraph (2), each 
     Federal agency shall procure, maintain, and use electronic 
     and information technology that allows, regardless of the 
     type of medium of the technology, individuals with 
     disabilities to produce information and data, and have access 
     to information and data, comparable to the information and 
     data, and access, respectively, of individuals who are not 
     individuals with disabilities.
       ``(2) Regulations.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of the Rehabilitation Act Amendments of 1998, the 
     Access Board, after consultation with the Secretary of 
     Education, the Administrator of the General Services 
     Administration, and the head of any other Federal agency that 
     the Access Board may determine to be appropriate, and after 
     consultation with the electronic and information technology 
     industry and appropriate public or nonprofit agencies or 
     organizations, shall issue regulations, including criteria 
     for procurement of accessible electronic and information 
     technology, to implement this section.
       ``(B) Criteria.--The Access Board shall consult with the 
     Director of the National Institute on Disability and 
     Rehabilitation Research and the heads of other Federal 
     agencies that conduct applicable research, regarding relevant 
     research findings to assist the Access Board in developing 
     and updating the criteria for procurement of accessible 
     technology required under subparagraph (A).
       ``(C) Reviews and amendments.--The Access Board shall 
     review and amend the regulations periodically to reflect 
     technological advances or changes in electronic and 
     information technology.
       ``(c) Technical Assistance.--The Access Board shall provide 
     technical assistance to individuals and Federal agencies 
     concerning the rights and responsibilities provided under 
     this section. The Administrator of the General Services 
     Administration shall provide technical assistance to Federal 
     agencies concerning the rights and responsibilities provided 
     under this section, in coordination with the activities of 
     the Access Board.
       ``(d) Compliance.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of the Rehabilitation Act Amendments of 1998, the 
     Access Board shall establish, by regulation issued under 
     subsection (b), procedures for ensuring the compliance of 
     Federal agencies with this section (including the 
     regulation).
       ``(2) Procedures.--At a minimum the regulation shall 
     establish procedures by which--
       ``(A) the head of each Federal agency shall assess the 
     compliance of the agency with this section and report 
     periodically to the Access Board and the Director of the 
     Office of Management and Budget on such compliance;
       ``(B) any aggrieved person may file a complaint with the 
     Access Board regarding noncompliance by a Federal agency with 
     this section; and
       ``(C) the Access Board may, after providing notice and an 
     opportunity for a hearing, issue an order requiring 
     compliance with this section, which shall be final and 
     binding on the affected Federal agency.
       ``(3) Office of management and budget oversight.--
       ``(A) Oversight and coordination.--The Director of the 
     Office of Management and Budget shall oversee and coordinate 
     the procurement, financial management, information, and 
     regulatory policies of the executive

[[Page S157]]

     branch of the Federal Government relating to electronic and 
     information technology.
       ``(B) Issuance of policies.--In issuing circulars, 
     bulletins, directives, memoranda, and other policies 
     affecting the procurement, maintenance, and use of electronic 
     and information technology, by Federal agencies, as 
     appropriate, the Director of the Office of Management and 
     Budget shall require compliance with this section, including 
     the regulations and criteria described in subsection (b).
       ``(e) Relationship to Other Laws.--This section shall not 
     be construed to limit a remedy, right, or procedure available 
     under any other provision of Federal law (including title V 
     and the Americans with Disabilities Act of 1990), or State or 
     local law (including State common law) that provides greater 
     or equal protection for the rights of individuals with 
     disabilities.''.
       (c) Protection and Advocacy of Individual Rights.--Section 
     509 (29 U.S.C. 794e) is amended to read as follows:

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

       ``(a) Purpose.--The purpose of this section is to support a 
     system in each State to protect the legal and human rights of 
     individuals with disabilities who--
       ``(1) need services that are beyond the scope of services 
     authorized to be provided by the client assistance program 
     under section 112; and
       ``(2) are ineligible for protection and advocacy programs 
     under part C of the Developmental Disabilities Assistance and 
     Bill of Rights Act (42 U.S.C. 6041 et seq.) because the 
     individuals do not have a developmental disability, as 
     defined in section 102 of such Act (42 U.S.C. 6002) and the 
     Protection and Advocacy for Mentally Ill Individuals Act of 
     1986 (42 U.S.C. 10801 et seq.) because the individuals are 
     not individuals with mental illness, as defined in section 
     102 of such Act (42 U.S.C. 10802).
       ``(b) Appropriations Less Than $5,500,000.--For any fiscal 
     year in which the amount appropriated to carry out this 
     section is less than $5,500,000, the Commissioner may make 
     grants from such amount to eligible systems within States to 
     plan for, develop outreach strategies for, and carry out 
     protection and advocacy programs authorized under this 
     section for individuals with disabilities who meet the 
     requirements of paragraphs (1) and (2) of subsection (a).
       ``(c) Appropriations of $5,500,000 or More.--
       ``(1) Reservations.--
       ``(A) Technical assistance.--For any fiscal year in which 
     the amount appropriated to carry out this section equals or 
     exceeds $5,500,000, the Commissioner shall set aside not less 
     than 1.8 percent and not more than 2.2 percent of the amount 
     to provide training and technical assistance to the systems 
     established under this section.
       ``(B) Grant for the eligible system serving the american 
     indian consortium.--For any fiscal year in which the amount 
     appropriated to carry out this section equals or exceeds 
     $10,500,000, the Commissioner shall reserve a portion, and 
     use the portion to make a grant for the eligible system 
     serving the American Indian consortium. The Commission shall 
     make the grant in an amount of not less than $50,000 for the 
     fiscal year.
       ``(2) Allotments.--For any such fiscal year, after the 
     reservations required by paragraph (1) have been made, the 
     Commissioner shall make allotments from the remainder of such 
     amount in accordance with paragraph (3) to eligible systems 
     within States to enable such systems to carry out protection 
     and advocacy programs authorized under this section for such 
     individuals.
       ``(3) Systems within states.--
       ``(A) Population basis.--Except as provided in subparagraph 
     (B), from such remainder for each such fiscal year, the 
     Commissioner shall make an allotment to the eligible system 
     within a State of an amount bearing the same ratio to such 
     remainder as the population of the State bears to the 
     population of all States.
       ``(B) Minimums.--Subject to the availability of 
     appropriations to carry out this section, and except as 
     provided in paragraph (4), the allotment to any system under 
     subparagraph (A) shall be not less than $100,000 or one-third 
     of one percent of the remainder for the fiscal year for which 
     the allotment is made, whichever is greater, and the 
     allotment to any system under this section for any fiscal 
     year that is less than $100,000 or one-third of one percent 
     of such remainder shall be increased to the greater of the 
     two amounts.
       ``(4) Systems within other jurisdictions.--
       ``(A) In general.--For the purposes of paragraph (3)(B), 
     Guam, American Samoa, the United States Virgin Islands, and 
     the Commonwealth of the Northern Mariana Islands shall not be 
     considered to be States.
       ``(B) Allotment.--The eligible system within a jurisdiction 
     described in subparagraph (A) shall be allotted under 
     paragraph (3)(A) not less than $50,000 for the fiscal year 
     for which the allotment is made.
       ``(5) Adjustment for inflation.--For any fiscal year, 
     beginning in fiscal year 1999, in which the total amount 
     appropriated to carry out this section exceeds the total 
     amount appropriated to carry out this section for the 
     preceding fiscal year, the Commissioner shall increase each 
     of the minimum grants or allotments under paragraphs (1)(B), 
     (3)(B), and (4)(B) by a percentage that shall not exceed the 
     percentage increase in the total amount appropriated to carry 
     out this section between the preceding fiscal year and the 
     fiscal year involved.
       ``(d) Proportional Reduction.--To provide minimum 
     allotments to systems within States (as increased under 
     subsection (c)(5)) under subsection (c)(3)(B), or to provide 
     minimum allotments to systems within States (as increased 
     under subsection (c)(5)) under subsection (c)(4)(B), the 
     Commissioner shall proportionately reduce the allotments of 
     the remaining systems within States under subsection (c)(3), 
     with such adjustments as may be necessary to prevent the 
     allotment of any such remaining system within a State from 
     being reduced to less than the minimum allotment for a system 
     within a State (as increased under subsection (c)(5)) under 
     subsection (c)(3)(B), or the minimum allotment for a State 
     (as increased under subsection (c)(5)) under subsection 
     (c)(4)(B), as appropriate.
       ``(e) Reallotment.--Whenever the Commissioner determines 
     that any amount of an allotment to a system within a State 
     for any fiscal year described in subsection (c)(1) will not 
     be expended by such system in carrying out the provisions of 
     this section, the Commissioner shall make such amount 
     available for carrying out the provisions of this section to 
     one or more of the systems that the Commissioner determines 
     will be able to use additional amounts during such year for 
     carrying out such provisions. Any amount made available to a 
     system for any fiscal year pursuant to the preceding sentence 
     shall, for the purposes of this section, be regarded as an 
     increase in the allotment of the system (as determined under 
     the preceding provisions of this section) for such year.
       ``(f) Application.--In order to receive assistance under 
     this section, an eligible system shall submit an application 
     to the Commissioner, at such time, in such form and manner, 
     and containing such information and assurances as the 
     Commissioner determines necessary to meet the requirements of 
     this section, including assurances that the eligible system 
     will--
       ``(1) have in effect a system to protect and advocate the 
     rights of individuals with disabilities;
       ``(2) have the same general authorities, including access 
     to records and program income, as are set forth in part C of 
     the Developmental Disabilities Assistance and Bill of Rights 
     Act (42 U.S.C. 6041 et seq.);
       ``(3) have the authority to pursue legal, administrative, 
     and other appropriate remedies or approaches to ensure the 
     protection of, and advocacy for, the rights of such 
     individuals within the State or the American Indian 
     consortium who are individuals described in subsection (a);
       ``(4) provide information on and make referrals to programs 
     and services addressing the needs of individuals with 
     disabilities in the State or the American Indian consortium;
       ``(5) develop a statement of objectives and priorities on 
     an annual basis, and provide to the public, including 
     individuals with disabilities and, as appropriate, the 
     individuals' representatives, an opportunity to comment on 
     the objectives and priorities established by, and activities 
     of, the system including--
       ``(A) the objectives and priorities for the activities of 
     the system for each year and the rationale for the 
     establishment of such objectives and priorities; and
       ``(B) the coordination of programs provided through the 
     system under this section with the advocacy programs of the 
     client assistance program under section 112, the State long-
     term care ombudsman program established under the Older 
     Americans Act of 1965 (42 U.S.C. 3001 et seq.), the 
     Developmental Disabilities Assistance and Bill of Rights Act 
     (42 U.S.C. 6000 et seq.), and the Protection and Advocacy for 
     Mentally Ill Individuals Act of 1986 (42 U.S.C. 10801 et 
     seq.);
       ``(6) establish a grievance procedure for clients or 
     prospective clients of the system to ensure that individuals 
     with disabilities are afforded equal opportunity to access 
     the services of the system;
       ``(7) provide assurances to the Commissioner that funds 
     made available under this section will be used to supplement 
     and not supplant the non-Federal funds that would otherwise 
     be made available for the purpose for which Federal funds are 
     provided; and
       ``(8) not use allotments or grants provided under this 
     section in a manner inconsistent with section 5 of the 
     Assisted Suicide Funding Restriction Act of 1997.
       ``(g) Carryover and Direct Payment.--
       ``(1) Direct payment.--Notwithstanding any other provision 
     of law, the Commissioner shall pay directly to any system 
     that complies with the provisions of this section, the amount 
     of the allotment of the State or the grant for the eligible 
     system that serves the American Indian consortium involved 
     under this section, unless the State or American Indian 
     consortium provides otherwise.
       ``(2) Carryover.--Any amount paid to an eligible system 
     that serves a State or American Indian consortium for a 
     fiscal year that remains unobligated at the end of such year 
     shall remain available to such system that serves the State 
     or American Indian consortium for obligation during the next 
     fiscal year for the purposes for which such amount was paid.
       ``(h) Limitation on Disclosure Requirements.--For purposes 
     of any audit, report, or evaluation of the performance of the 
     program established under this section, the Commissioner 
     shall not require such a program to disclose the identity of, 
     or any other personally identifiable information related

[[Page S158]]

     to, any individual requesting assistance under such program.
       ``(i) Administrative Cost.--In any State in which an 
     eligible system is located within a State agency, a State may 
     use a portion of any allotment under subsection (c) for the 
     cost of the administration of the system required by this 
     section. Such portion may not exceed 5 percent of the 
     allotment.
       ``(j) Delegation.--The Commissioner may delegate the 
     administration of this program to the Commissioner of the 
     Administration on Developmental Disabilities within the 
     Department of Health and Human Services.
       ``(k) Report.--The Commissioner shall annually prepare and 
     submit to the Committee on Education and the Workforce of the 
     House of Representatives and the Committee on Labor and Human 
     Resources of the Senate a report describing the types of 
     services and activities being undertaken by programs funded 
     under this section, the total number of individuals served 
     under this section, the types of disabilities represented by 
     such individuals, and the types of issues being addressed on 
     behalf of such individuals.
       ``(l) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of the fiscal years 1998 
     through 2004.
       ``(m) Definitions.--As used in this section:
       ``(1) Eligible system.--The term `eligible system' means a 
     protection and advocacy system that is established under part 
     C of the Developmental Disabilities Assistance and Bill of 
     Rights Act (42 U.S.C. 6041 et seq.) and that meets the 
     requirements of subsection (f).
       ``(2) American Indian consortium.--The term `American 
     Indian consortium' means a consortium established as 
     described in section 142 of the Developmental Disabilities 
     Assistance and Bill of Rights Act (42 U.S.C. 6042).''.

     SEC. 9. EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS WITH 
                   DISABILITIES.

       Title VI of the Rehabilitation Act of 1973 (29 U.S.C. 795 
     et seq.) is amended to read as follows:
 ``TITLE VI--EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS WITH DISABILITIES

     ``SEC. 601. SHORT TITLE.

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

``PART A--PROJECTS IN TELECOMMUTING AND SELF-EMPLOYMENT FOR INDIVIDUALS 
                           WITH DISABILITIES

     ``SEC. 611. FINDINGS, POLICIES, AND PURPOSES.

       ``(a) Findings.--Congress makes the following findings:
       ``(1) It is in the best interest of the United States to 
     identify and promote increased employment opportunities for 
     individuals with disabilities.
       ``(2) Telecommuting is one of the most rapidly expanding 
     forms of employment. In 1990 there were 4,000,000 
     telecommuters and that number has risen to 11,100,000 in 
     1997.
       ``(3) It is in the best interest of the United States to 
     ensure that individuals with disabilities have access to 
     telecommuting employment opportunities. It has been estimated 
     that 10 percent of individuals with disabilities, who are 
     unemployed, could benefit from telecommuting opportunities.
       ``(4) It is in the interest of employers to recognize that 
     individuals with disabilities are excellent candidates for 
     telecommuting employment opportunities.
       ``(5) Individuals with disabilities, especially those 
     living in rural areas, often do not have access to accessible 
     transportation, and in such cases telecommuting presents an 
     excellent opportunity for the employment of such individuals.
       ``(6) It is in the best interests of economic development 
     agencies, venture capitalists, and financial institutions for 
     the Federal Government to demonstrate that individuals with 
     disabilities, who wish to become or who are self-employed, 
     can meet the criteria for assistance, investment of capital, 
     and business that other entrepreneurs meet.
       ``(b) Policies.--It is the policy of the United States to--
       ``(1) promote opportunities for individuals with 
     disabilities to--
       ``(A) secure, retain, regain, or advance in employment 
     involving telecommuting;
       ``(B) gain access to employment opportunities; and
       ``(C) demonstrate their abilities, capabilities, interests, 
     and preferences regarding employment in positions that are 
     increasingly being offered to individuals in the workplace; 
     and
       ``(2) promote opportunities for individuals with 
     disabilities to engage in self-employment enterprises that 
     permit these individuals to achieve significant levels of 
     independence, participate in and contribute to the life of 
     their communities, and offer employment opportunities to 
     others.
       ``(c) Purposes.--It is the purpose of this part to--
       ``(1) through the awarding of 1-time, time-limited grants, 
     contracts, or cooperative agreements to public and private 
     entities--
       ``(A) provide funds, in accordance with section 612, to 
     enable individuals with disabilities to identify and secure 
     employment opportunities involving telecommuting; and
       ``(B) encourage employers to become partners in providing 
     telecommuting placements for individuals with disabilities 
     through the involvement of such employers in telecommuting 
     projects that continue and expand opportunities for the 
     provision of telecommuting placements to individuals with 
     disabilities beyond those opportunities that are currently 
     facilitated by the telecommuting projects; and
       ``(2) through the awarding of 1-time, time-limited grants, 
     contracts, cooperative agreements, or other appropriate 
     mechanisms of providing assistance to public or private 
     entities--
       ``(A) assist individuals with disabilities to engage in 
     self-employment enterprises in accordance with section 613; 
     and
       ``(B) encourage entities to assist more individuals with 
     disabilities to engage in self-employment enterprises.

     ``SEC. 612. PROJECTS IN TELECOMMUTING FOR INDIVIDUALS WITH 
                   DISABILITIES.

       ``(a) In General.--The Commissioner shall, on a competitive 
     basis, award 1-time, time-limited grants, contracts, or 
     cooperative agreements to eligible entities for the 
     establishment and operation of projects in telecommuting for 
     individuals with disabilities.
       ``(b) Eligible Entities.--To be eligible to receive a 
     grant, contract, or cooperative agreement under subsection 
     (a) an entity shall--
       ``(1) be--
       ``(A) an entity carrying out a Project With Industry 
     described in part B;
       ``(B) a designated State agency;
       ``(C) a statewide workforce investment partnership or local 
     workforce investment partnership;
       ``(D) a public educational agency;
       ``(E) a training institution, which may include an 
     institution of higher education;
       ``(F) a private organization, with priority given to 
     organizations of or for individuals with disabilities;
       ``(G) a public or private employer;
       ``(H) any other entity that the Commissioner determines to 
     be appropriate; or
       ``(I) a combination or consortium of the entities described 
     in subparagraphs (A) through (H);
       ``(2) have 3 or more years of experience in assisting 
     individuals with disabilities in securing, retaining, 
     regaining, or advancing in employment;
       ``(3) demonstrate that such entity has the capacity to 
     secure full- and part-time employment involving telecommuting 
     for individuals with disabilities; and
       ``(4) submit an application that meets the requirements of 
     subsection (c).
       ``(c) Application Requirements.--To be eligible to receive 
     a grant, contract, or cooperative agreement under subsection 
     (a), an entity shall submit to the Commissioner at such time, 
     in such manner, and containing such information concerning 
     the telecommuting project to be funded under the grant, 
     contract, or agreement as the Commissioner may require, 
     including--
       ``(1) a description of how and the extent to which the 
     applicant meets the requirement of subsection (b)(2);
       ``(2) with respect to any partners who will participate in 
     the implementation of activities under the telecommuting 
     project, a description of--
       ``(A) the identity of such partners; and
       ``(B) the roles and responsibilities of each partner in 
     preparing the application, and if funded, the roles and 
     responsibility of each partner during the telecommuting 
     project;
       ``(3) a description of the geographic region that will be 
     the focus of activity under the telecommuting project;
       ``(4) a projection for each year of a 3-year period of the 
     grant, contract, or agreement, of the number of individuals 
     with disabilities who will be employed as the result of the 
     assistance provided by the telecommuting project;
       ``(5) with respect to any employers that have indicated an 
     interest in offering telecommuting employment opportunities 
     to individuals with disabilities, a description of--
       ``(A) the identity of such employers; and
       ``(B) the manner in which additional employers would be 
     recruited under the telecommuting project;
       ``(6) a description of the manner in which individuals with 
     disabilities will be identified and selected to participate 
     in the telecommuting project;
       ``(7) a description of the jobs that will be targeted by 
     the telecommuting project;
       ``(8) a description of the process by which individuals 
     with disabilities will be matched with employers for 
     telecommuting placements;
       ``(9) a description of the manner in which the project will 
     become self-sustaining in the third year of the telecommuting 
     project; and
       ``(10) a description of the nature and amount of funding, 
     including in-kind support, other than funds received under 
     this part, that will be available to be used by the 
     telecommuting project.
       ``(d) Use of Funds.--Amounts received under a grant, 
     contract, or cooperative agreement under subsection (a) shall 
     be used for--
       ``(1) the recruitment of individuals with disabilities for 
     telecommuting placements;
       ``(2) the conduct of marketing activities with respect to 
     employers;
       ``(3) the purchase of training services for an individual 
     with a disability who is going to assume a telecommuting 
     placement;
       ``(4) the purchase of equipment, materials, telephone 
     lines, auxiliary aids, and services related to telecommuting 
     placements;
       ``(5) the provision of orientation services and training to 
     the supervisors of employers participating in the project and 
     to co-workers of individuals with disabilities who are 
     selected for telecommuting placements;

[[Page S159]]

       ``(6) the provision of technical assistance to employers, 
     including technical assistance regarding reasonable 
     accommodations with regard to individuals with disabilities 
     participating in telecommuting placements; and
       ``(7) other uses determined appropriate by the 
     Commissioner.
       ``(e) Project Requirements.--Telecommuting projects funded 
     under this section shall--
       ``(1) establish criteria for safety with regard to the 
     telecommuting work space, which at a minimum meet guidelines 
     established by the Occupational Safety and Health 
     Administration for a work space of comparable size and 
     function;
       ``(2) on an annual basis, enter into agreements with the 
     Commissioner that contain goals concerning the number of 
     individuals with disabilities that the project will place in 
     telecommuting positions;
       ``(3) establish procedures for ensuring that prospective 
     employers and individuals with disabilities, who are to 
     assume telecommuting placements, have a clear understanding 
     of how the individual's work performance will be monitored 
     and evaluated by the employer;
       ``(4) identify and make available support services for 
     individuals with disabilities in telecommuting placements;
       ``(5) develop procedures that allow the telecommuting 
     project, the employer, and the individual with a disability 
     to reach agreement on their respective responsibilities with 
     regard to establishing and maintaining the telecommuting 
     placement;
       ``(6) for each year of a telecommuting project, submit an 
     annual report to the Commissioner concerning--
       ``(A) the number of individuals with disabilities placed in 
     telecommuting positions and whether the goal described in the 
     agreement entered into paragraph (2) was met;
       ``(B) the number of individuals with disabilities employed 
     as salaried employees and their annual salaries;
       ``(C) the number of individuals with disabilities employed 
     as independent contractors and their annual incomes;
       ``(D) the number of individuals with disabilities that 
     received benefits from their employers;
       ``(E) the number of individuals with disabilities in 
     telecommuting placements still working after--
       ``(i) 6 months; and
       ``(ii) 12 months; and
       ``(F) any reports filed with the Occupational Safety and 
     Health Administration.
       ``(f) Limitations.--
       ``(1) Period of award.--A grant, contract, or cooperative 
     agreement under subsection (a) shall be for a 3-year period.
       ``(2) Amount.--The amount of a grant, contract, or 
     cooperative agreement under subsection (a) shall not be less 
     than $250,000 nor more than $1,000,000.

     ``SEC. 613. PROJECTS IN SELF-EMPLOYMENT FOR INDIVIDUALS WITH 
                   DISABILITIES.

       ``(a) In General.--The Commissioner shall, on a competitive 
     basis, award 1-time, time-limited grants, contracts, or 
     cooperative agreements to eligible entities for the 
     establishment and operation of projects in self-employment 
     for individuals with disabilities.
       ``(b) Eligible Entities.--To be eligible to receive a 
     grant, contract, or cooperative agreement under subsection 
     (a) an entity shall--
       ``(1) be--
       ``(A) a financial institution;
       ``(B) an economic development agency;
       ``(C) a venture capitalist;
       ``(D) an entity carrying out a Project With Industry 
     described in part B;
       ``(E) a designated State agency, or other public entity;
       ``(F) a private organization, including employers and 
     organizations related to individuals with disabilities;
       ``(G) any other entity that the Commissioner determines to 
     be appropriate; or
       ``(H) a combination or consortium of the entities described 
     in subparagraphs (A) through (G);
       ``(2) demonstrate that such entity has the capacity to 
     assist clients, including clients with disabilities, to 
     successfully engage in self-employment enterprises; and
       ``(3) submit an application that meets the requirements of 
     subsection (c).
       ``(c) Application Requirements.--To be eligible to receive 
     a grant, contract, or cooperative agreement under subsection 
     (a), an entity shall submit to the Commissioner at such time, 
     in such manner, and containing such information concerning 
     the self-employment project to be funded under the grant, 
     contract, or agreement as the Commissioner may require, 
     including--
       ``(1) a description of how and the extent to which the 
     applicant has assisted individuals, including individuals 
     with disabilities, if appropriate, to successfully engage in 
     self-employment enterprises;
       ``(2) with respect to any partners who will participate in 
     the implementation of activities under the self-employment 
     project, a description of--
       ``(A) the identity of such partners; and
       ``(B) the roles and responsibilities of each partner in 
     preparing the application, and if funded, the roles and 
     responsibility of each partner during the self-employment 
     project;
       ``(3) a description of the geographic region that will be 
     the focus of activity in the self-employment project;
       ``(4) a projection for each year of a 3-year period of the 
     grant, contract, or agreement, of the number of clients who 
     will be assisted to engage in self-employment enterprises 
     through the self-employment project;
       ``(5) a description of the manner in which potential 
     clients will be identified and selected to be assisted by the 
     self-employment project;
       ``(6) a description of the manner in which self-employment 
     enterprises (or market niches) will be identified for the 
     geographic areas to be targeted in the self-employment 
     project;
       ``(7) a description of the process by which prospective 
     clients will be matched with self-employment opportunities;
       ``(8) a description of the manner in which the project will 
     become self-sustaining in the third year of the self-
     employment project; and
       ``(9) a description of the nature and amount of funding, 
     including in-kind support, other than funds received under 
     this part, that will be available to be used during the self-
     employment project.
       ``(d) Use of Funds.--Amounts received under a grant, 
     contract, or cooperative agreement under subsection (a) shall 
     be used--
       ``(1) for the preparation of marketing analyses to identify 
     self-employment opportunities;
       ``(2) for the conduct of marketing activities with respect 
     to financial institutions or venture capitalists concerning 
     the benefits of investing in individuals with disabilities 
     who are engaged in self-employment enterprises;
       ``(3) for the conduct of marketing activities with respect 
     to potential clients who engage in or might engage in self-
     employment enterprises;
       ``(4) for the provision of training for clients to be 
     assisted through the project who seek to engage or are 
     engaging in self-employment enterprises;
       ``(5) to cover the costs of business expenses specifically 
     related to an individual's disability;
       ``(6) to provide assistance for clients in developing 
     business plans for capital investment;
       ``(7) to provide assistance for clients in securing capital 
     to engage in a self-employment enterprise;
       ``(8) to provide technical assistance to clients engaged in 
     self-employment enterprises who seek such assistance in order 
     to sustain or expand their enterprises; and
       ``(9) for other uses as determined appropriate by the 
     Commissioner.
       ``(e) Project Requirements.--Self-employment projects 
     funded under this section shall--
       ``(1) establish criteria for and apply such criteria in 
     selecting clients to be assisted through the project;
       ``(2) on an annual basis, enter into agreements with the 
     Commissioner that contain goals concerning the number of 
     individuals with disabilities that the project will assist in 
     starting and sustaining self-employment enterprises;
       ``(3) establish and apply criteria to determine whether an 
     enterprise is a viable option in which to invest project 
     funds;
       ``(4) establish and apply criteria to determine when and if 
     the project would provide assistance in sustaining an ongoing 
     enterprise engaged in by a client or potential client;
       ``(5) establish and apply criteria to determine when and if 
     the project would provide assistance in expanding an ongoing 
     enterprise engaged in by a client or potential client;
       ``(6) establish and apply procedures to ensure that a 
     potential client has a clear understanding of the scope and 
     limits of assistance from the project that will be applicable 
     in such client's case;
       ``(7) develop procedures, which include a written 
     agreement, that provides for the documentation of the 
     respective responsibilities of the self-employment project 
     and any client with regard to the creation, maintenance, or 
     expansion of the client's self-employment enterprise; and
       ``(8) with respect to the project, submit a report to the 
     Commissioner--
       ``(A) for each project year, concerning the number of 
     clients assisted by the project who are engaging in self-
     employment enterprises and whether the goal described in the 
     agreement entered into under paragraph (2) was met; and
       ``(B) the number of clients assisted by the project who are 
     still engaged in such an enterprise on the date that is--
       ``(i) 6 months after the date on which assistance provided 
     by the project was terminated; and
       ``(ii) 12 months after the date of which assistance 
     provided by the project was terminated.
       ``(f) Duration of Awards.--A grant, contract, or 
     cooperative agreement under subsection (a) shall be for a 3-
     year period.
       ``(g) Definition.--For the purpose of this section, the 
     term `client' means 1 or more individuals with disabilities 
     who engage in or seek to engage in a self-employment 
     enterprise.

     ``SEC. 614. DISCRETIONARY AUTHORITY FOR DUAL-PURPOSE 
                   APPLICATIONS.

       ``(a) In General.--The Commissioner may establish 
     procedures to permit applicants for grants, contracts, or 
     cooperative agreements under this part to submit applications 
     that serve dual purposes, so long as such applications meet 
     the requirements of sections 612 and section 613.
       ``(b) Amount of Assistance.--In a case described in 
     subsection (a), the minimum

[[Page S160]]

     amount of a grant, contract, or cooperative agreement awarded 
     under a dual-purpose application may, at the discretion of 
     the Commissioner, exceed the limitations described in section 
     612(f)(2).

     ``SEC. 615. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     part, $10,000,000 for fiscal year 1998, and such sums as may 
     be necessary for each of the fiscal years 1999 through 2004.

                    ``Part B--Projects With Industry


                        ``projects with industry

       ``Sec. 621. (a)(1) The purpose of this part is to create 
     and expand job and career opportunities for individuals with 
     disabilities in the competitive labor market by engaging the 
     talent and leadership of private industry as partners in the 
     rehabilitation process, to identify competitive job and 
     career opportunities and the skills needed to perform such 
     jobs, to create practical job and career readiness and 
     training programs, and to provide job placements and career 
     advancement.
       ``(2) The Commissioner, in consultation with the Secretary 
     of Labor and with designated State units, may award grants to 
     individual employers, community rehabilitation program 
     providers, labor unions, trade associations, Indian tribes, 
     tribal organizations, designated State units, and other 
     entities to establish jointly financed Projects With Industry 
     to create and expand job and career opportunities for 
     individuals with disabilities, which projects shall--
       ``(A) provide for the establishment of business advisory 
     councils, which shall--
       ``(i) be comprised of--
       ``(I) representatives of private industry, business 
     concerns, and organized labor;
       ``(II) individuals with disabilities and representatives of 
     individuals with disabilities; and
       ``(III) a representative of the appropriate designated 
     State unit;
       ``(ii) identify job and career availability within the 
     community, consistent with the current and projected local 
     employment opportunities identified by the local workforce 
     investment partnership for the community under section 
     308(e)(6) of the Workforce Investment Partnership Act of 
     1998;
       ``(iii) identify the skills necessary to perform the jobs 
     and careers identified; and
       ``(iv) prescribe training programs designed to develop 
     appropriate job and career skills, or job placement programs 
     designed to identify and develop job placement and career 
     advancement opportunities, for individuals with disabilities 
     in fields related to the job and career availability 
     identified under clause (ii);;
       ``(B) provide job development, job placement, and career 
     advancement services;
       ``(C) to the extent appropriate, provide for--
       ``(i) training in realistic work settings in order to 
     prepare individuals with disabilities for employment and 
     career advancement in the competitive market; and
       ``(ii) the modification of any facilities or equipment of 
     the employer involved that are used primarily by individuals 
     with disabilities, except that a project shall not be 
     required to provide for such modification if the modification 
     is required as a reasonable accommodation under the Americans 
     with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.); and
       ``(D) provide individuals with disabilities with such 
     support services as may be required in order to maintain the 
     employment and career advancement for which the individuals 
     have received training under this part.
       ``(3)(A) An individual shall be eligible for services 
     described in paragraph (2) if the individual is determined to 
     be an individual described in section 102(a)(1), and if the 
     determination is made in a manner consistent with section 
     102(a).
       ``(B) Such a determination may be made by the recipient of 
     a grant under this part, to the extent the determination is 
     appropriate and available and consistent with the 
     requirements of section 102(a).
       ``(4) The Commissioner shall enter into an agreement with 
     the grant recipient regarding the establishment of the 
     project. Any agreement shall be jointly developed by the 
     Commissioner, the grant recipient, and, to the extent 
     practicable, the appropriate designated State unit and the 
     individuals with disabilities (or the individuals' 
     representatives) involved. Such agreements shall specify the 
     terms of training and employment under the project, provide 
     for the payment by the Commissioner of part of the costs of 
     the project (in accordance with subsection (c)), and contain 
     the items required under subsection (b) and such other 
     provisions as the parties to the agreement consider to be 
     appropriate.
       ``(5) Any agreement shall include a description of a plan 
     to annually conduct a review and evaluation of the operation 
     of the project in accordance with standards developed by the 
     Commissioner under subsection (d), and, in conducting the 
     review and evaluation, to collect data and information of the 
     type described in subparagraphs (A) through (C) of section 
     101(a)(10), as determined to be appropriate by the 
     Commissioner.
       ``(6) The Commissioner may include, as part of agreements 
     with grant recipients, authority for such grant recipients to 
     provide technical assistance to--
       ``(A) assist employers in hiring individuals with 
     disabilities; or
       ``(B) improve or develop relationships between--
       ``(i) grant recipients or prospective grant recipients; and
       ``(ii) employers or organized labor; or
       ``(C) assist employers in understanding and meeting the 
     requirements of the Americans with Disabilities Act of 1990 
     (42 U.S.C. 12101 et seq.) as the Act relates to employment of 
     individuals with disabilities.
       ``(b) No payment shall be made by the Commissioner under 
     any agreement with a grant recipient entered into under 
     subsection (a) unless such agreement--
       ``(1) provides an assurance that individuals with 
     disabilities placed under such agreement shall receive at 
     least the applicable minimum wage;
       ``(2) provides an assurance that any individual with a 
     disability placed under this part shall be afforded terms and 
     benefits of employment equal to terms and benefits that are 
     afforded to the similarly situated nondisabled co-workers of 
     the individual, and that such individuals with disabilities 
     shall not be segregated from their co-workers; and
       ``(3) provides an assurance that an annual evaluation 
     report containing information specified under subsection 
     (a)(5) shall be submitted as determined to be appropriate by 
     the Commissioner.
       ``(c) Payments under this section with respect to any 
     project may not exceed 80 per centum of the costs of the 
     project.
       ``(d)(1) The Commissioner shall develop standards for the 
     evaluation described in subsection (a)(5) and shall review 
     and revise the evaluation standards as necessary, subject to 
     paragraphs (2) and (3).
       ``(2) In revising the standards for evaluation to be used 
     by the grant recipients, the Commissioner shall obtain and 
     consider recommendations for such standards from State 
     vocational rehabilitation agencies, current and former grant 
     recipients, professional organizations representing business 
     and industry, organizations representing individuals with 
     disabilities, individuals served by grant recipients, 
     organizations representing community rehabilitation program 
     providers, and labor organizations.
       ``(3) No standards may be established under this subsection 
     unless the standards are approved by the National Council on 
     Disability. The Council shall be afforded adequate time to 
     review and approve the standards.
       ``(e)(1)(A) A grant may be awarded under this section for a 
     period of up to 5 years and such grant may be renewed.
       ``(B) Grants under this section shall be awarded on a 
     competitive basis. To be eligible to receive such a grant, a 
     prospective grant recipient shall submit an application to 
     the Commissioner at such time, in such manner, and containing 
     such information as the Commissioner may require.
       ``(2) The Commissioner shall to the extent practicable 
     ensure an equitable distribution of payments made under this 
     section among the States. To the extent funds are available, 
     the Commissioner shall award grants under this section to new 
     projects that will serve individuals with disabilities in 
     States, portions of States, Indian tribes, or tribal 
     organizations, that are currently unserved or underserved by 
     projects.
       ``(f)(1) The Commissioner shall, as necessary, develop and 
     publish in the Federal Register in final form indicators of 
     what constitutes minimum compliance consistent with the 
     evaluation standards under subsection (d)(1).
       ``(2) Each grant recipient shall report to the Commissioner 
     at the end of each project year the extent to which the grant 
     recipient is in compliance with the evaluation standards.
       ``(3)(A) The Commissioner shall annually conduct on-site 
     compliance reviews of at least 15 percent of grant 
     recipients. The Commissioner shall select grant recipients 
     for review on a random basis.
       ``(B) The Commissioner shall use the indicators in 
     determining compliance with the evaluation standards.
       ``(C) The Commissioner shall ensure that at least one 
     member of a team conducting such a review shall be an 
     individual who--
       ``(i) is not an employee of the Federal Government; and
       ``(ii) has experience or expertise in conducting projects.
       ``(D) The Commissioner shall ensure that--
       ``(i) a representative of the appropriate designated State 
     unit shall participate in the review; and
       ``(ii) no person shall participate in the review of a grant 
     recipient if--
       ``(I) the grant recipient provides any direct financial 
     benefit to the reviewer; or
       ``(II) participation in the review would give the 
     appearance of a conflict of interest.
       ``(4) In making a determination concerning any subsequent 
     grant under this section, the Commissioner shall consider the 
     past performance of the applicant, if applicable. The 
     Commissioner shall use compliance indicators developed under 
     this subsection that are consistent with program evaluation 
     standards developed under subsection (d) to assess minimum 
     project performance for purposes of making continuation 
     awards in the third, fourth, and fifth years.
       ``(5) Each fiscal year the Commissioner shall include in 
     the annual report to Congress required by section 13 an 
     analysis of the extent to which grant recipients have 
     complied with the evaluation standards. The Commissioner may 
     identify individual grant recipients in the analysis. In 
     addition, the Commissioner shall report the results of on-
     site compliance reviews, identifying individual grant 
     recipients.
       ``(g) The Commissioner may provide, directly or by way of 
     grant, contract, or cooperative agreement, technical 
     assistance to--

[[Page S161]]

       ``(1) entities conducting projects for the purpose of 
     assisting such entities in--
       ``(A) the improvement of or the development of 
     relationships with private industry or labor; or
       ``(B) the improvement of relationships with State 
     vocational rehabilitation agencies; and
       ``(2) entities planning the development of new projects.
       ``(h) As used in this section:
       ``(1) The term `agreement' means an agreement described in 
     subsection (a)(4).
       ``(2) The term `project' means a Project With Industry 
     established under subsection (a)(2).
       ``(3) The term `grant recipient' means a recipient of a 
     grant under subsection (a)(2).


                   ``authorization of appropriations

       ``Sec. 622. There are authorized to be appropriated to 
     carry out the provisions of this part, such sums as may be 
     necessary for each of fiscal years 1998 through 2004.

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

     ``SEC. 631. PURPOSE.

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

     ``SEC. 632. ALLOTMENTS.

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

     ``SEC. 633. AVAILABILITY OF SERVICES.

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

     ``SEC. 634. ELIGIBILITY.

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

     ``SEC. 635. STATE PLAN.

       ``(a) State Plan Supplements.--To be eligible for an 
     allotment under this part, a State shall submit to the 
     Commissioner, as part of the State plan under section 101, a 
     State plan supplement for providing supported employment 
     services authorized under this Act to individuals who are 
     eligible under this Act to receive the services. Each State 
     shall make such annual revisions in the plan supplement as 
     may be necessary.
       ``(b) Contents.--Each such plan supplement shall--
       ``(1) designate each designated State agency as the agency 
     to administer the program assisted under this part;
       ``(2) summarize the results of the comprehensive, statewide 
     assessment conducted under section 101(a)(15)(A)(i), with 
     respect to the rehabilitation needs of individuals with 
     significant disabilities and the need for supported 
     employment services, including needs related to coordination;
       ``(3) describe the quality, scope, and extent of supported 
     employment services authorized under this Act to be provided 
     to individuals who are eligible under this Act to receive the 
     services and specify the goals and plans of the State with 
     respect to the distribution of funds received under section 
     632;
       ``(4) demonstrate evidence of the efforts of the designated 
     State agency to identify and make arrangements (including 
     entering into cooperative agreements) with other State 
     agencies and other appropriate entities to assist in the 
     provision of supported employment services;
       ``(5) demonstrate evidence of the efforts of the designated 
     State agency to identify and make arrangements (including 
     entering into cooperative agreements) with other public or 
     nonprofit agencies or organizations within the State, 
     employers, natural supports, and other entities with respect 
     to the provision of extended services;
       ``(6) provide assurances that--
       ``(A) funds made available under this part will only be 
     used to provide supported employment services authorized 
     under this Act to individuals who are eligible under this 
     part to receive the services;
       ``(B) the comprehensive assessments of individuals with 
     significant disabilities conducted under section 102(b)(1) 
     and funded under title I will include consideration of 
     supported employment as an appropriate employment outcome;
       ``(C) an individualized rehabilitation employment plan, as 
     required by section 102, will be developed and updated using 
     funds under title I in order to--
       ``(i) specify the supported employment services to be 
     provided;
       ``(ii) specify the expected extended services needed; and
       ``(iii) identify the source of extended services, which may 
     include natural supports, or to the extent that it is not 
     possible to identify the source of extended services at the 
     time the individualized rehabilitation employment plan is 
     developed, a statement describing the basis for concluding 
     that there is a reasonable expectation that such sources will 
     become available;
       ``(D) the State will use funds provided under this part 
     only to supplement, and not supplant, the funds provided 
     under title I, in providing supported employment services 
     specified in the individualized rehabilitation employment 
     plan;
       ``(E) services provided under an individualized 
     rehabilitation employment plan will be coordinated with 
     services provided under other individualized plans 
     established under other Federal or State programs;
       ``(F) to the extent jobs skills training is provided, the 
     training will be provided on-site; and
       ``(G) supported employment services will include placement 
     in an integrated setting for the maximum number of hours 
     possible based on the unique strengths, resources, 
     priorities, concerns, abilities, capabilities, interests, and 
     informed choice of individuals with the most significant 
     disabilities;
       ``(7) provide assurances that the State agencies designated 
     under paragraph (1) will expend not more than 5 percent of 
     the allotment of the State under this part for administrative 
     costs of carrying out this part; and
       ``(8) contain such other information and be submitted in 
     such manner as the Commissioner may require.

     ``SEC. 636. RESTRICTION.

       ``Each State agency designated under section 635(b)(1) 
     shall collect the information required by section 101(a)(10) 
     separately for eligible individuals receiving supported 
     employment services under this part and for eligible 
     individuals receiving supported employment services under 
     title I.

     ``SEC. 637. SAVINGS PROVISION.

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

     ``SEC. 638. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part such sums as may be necessary for each of fiscal years 
     1998 through 2004.''.

     SEC. 10. INDEPENDENT LIVING SERVICES AND CENTERS FOR 
                   INDEPENDENT LIVING.

       Title VII of the Rehabilitation Act of 1973 (29 U.S.C. 796 
     et seq.) is amended to read as follows:
 ``TITLE VII--INDEPENDENT LIVING SERVICES AND CENTERS FOR INDEPENDENT 
                                 LIVING

         ``CHAPTER 1--INDIVIDUALS WITH SIGNIFICANT DISABILITIES

                      ``PART A--GENERAL PROVISIONS

     ``SEC. 701. PURPOSE.

       ``The purpose of this chapter is to promote a philosophy of 
     independent living, including a philosophy of consumer 
     control, peer support, self-help, self-determination, equal 
     access, and individual and system advocacy, in order to 
     maximize the leadership, empowerment, independence, and 
     productivity of individuals with disabilities, and the 
     integration and full inclusion of individuals with

[[Page S162]]

     disabilities into the mainstream of American society, by--
       ``(1) providing financial assistance to States for 
     providing, expanding, and improving the provision of 
     independent living services;
       ``(2) providing financial assistance to develop and support 
     statewide networks of centers for independent living; and
       ``(3) providing financial assistance to States for 
     improving working relationships among State independent 
     living rehabilitation service programs, centers for 
     independent living, Statewide Independent Living Councils 
     established under section 705, State vocational 
     rehabilitation programs receiving assistance under title I, 
     State programs of supported employment services receiving 
     assistance under part C of title VI, client assistance 
     programs receiving assistance under section 112, programs 
     funded under other titles of this Act, programs funded under 
     other Federal law, and programs funded through non-Federal 
     sources.

     ``SEC. 702. DEFINITIONS.

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

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

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

     ``SEC. 704. STATE PLAN.

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

     ``SEC. 705. STATEWIDE INDEPENDENT LIVING COUNCIL.

       ``(a) Establishment.--To be eligible to receive financial 
     assistance under this chapter, each State shall establish a 
     Statewide Independent Living Council (referred to in this 
     section as the `Council'). The Council shall not be 
     established as an entity within a State agency.
       ``(b) Composition and Appointment.--
       ``(1) Appointment.--Members of the Council shall be 
     appointed by the Governor or the appropriate entity within 
     the State responsible for making appointments. The appointing 
     authority shall select members after soliciting 
     recommendations from representatives of organizations 
     representing a broad

[[Page S163]]

     range of individuals with disabilities and organizations 
     interested in individuals with disabilities.
       ``(2) Composition.--The Council shall include--
       ``(A) at least one director of a center for independent 
     living chosen by the directors of centers for independent 
     living within the State;
       ``(B) as ex officio, nonvoting members--
       ``(i) a representative from the designated State unit; and
       ``(ii) representatives from other State agencies that 
     provide services for individuals with disabilities; and
       ``(C) in a State in which 1 or more projects are carried 
     out under section 121, at least 1 representative of the 
     directors of the projects.
       ``(3) Additional members.--The Council may include--
       ``(A) other representatives from centers for independent 
     living;
       ``(B) parents and guardians of individuals with 
     disabilities;
       ``(C) advocates of and for individuals with disabilities;
       ``(D) representatives from private businesses;
       ``(E) representatives from organizations that provide 
     services for individuals with disabilities; and
       ``(F) other appropriate individuals.
       ``(4) Qualifications.--
       ``(A) In general.--The Council shall be composed of 
     members--
       ``(i) who provide statewide representation;
       ``(ii) who represent a broad range of individuals with 
     disabilities from diverse backgrounds;
       ``(iii) who are knowledgeable about centers for independent 
     living and independent living services; and
       ``(iv) a majority of whom are persons who are--

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

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

     ``SEC. 706. RESPONSIBILITIES OF THE COMMISSIONER.

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

                 ``PART B--INDEPENDENT LIVING SERVICES

     ``SEC. 711. ALLOTMENTS.

       ``(a) In General.--
       ``(1) States.--
       ``(A) Population basis.--Except as provided in 
     subparagraphs (B) and (C), from sums appropriated for each 
     fiscal year to carry out this part, the Commissioner shall 
     make an allotment to each State whose State plan has been 
     approved under section 706 of an amount bearing the same 
     ratio to such sums as the population of the State bears to 
     the population of all States.
       ``(B) Maintenance of 1992 amounts.--Subject to the 
     availability of appropriations to carry out this part, the 
     amount of any allotment made under subparagraph (A) to a 
     State for a fiscal year shall not be less than the amount of 
     an allotment made to the State for fiscal year 1992 under 
     part A of this title, as in effect on the day before the date 
     of enactment of the Rehabilitation Act Amendments of 1992.
       ``(C) Minimums.--Subject to the availability of 
     appropriations to carry out this part,

[[Page S164]]

     and except as provided in subparagraph (B), the allotment to 
     any State under subparagraph (A) shall be not less than 
     $275,000 or one-third of one percent of the sums made 
     available for the fiscal year for which the allotment is 
     made, whichever is greater, and the allotment of any State 
     under this section for any fiscal year that is less than 
     $275,000 or one-third of one percent of such sums shall be 
     increased to the greater of the two amounts.
       ``(2) Certain territories.--
       ``(A) In general.--For the purposes of paragraph (1)(C), 
     Guam, American Samoa, the United States Virgin Islands, and 
     the Commonwealth of the Northern Mariana Islands shall not be 
     considered to be States.
       ``(B) Allotment.--Each jurisdiction described in 
     subparagraph (A) shall be allotted under paragraph (1)(A) not 
     less than one-eighth of one percent of the amounts made 
     available for purposes of this part for the fiscal year for 
     which the allotment is made.
       ``(3) Adjustment for inflation.--For any fiscal year, 
     beginning in fiscal year 1999, in which the total amount 
     appropriated to carry out this part exceeds the total amount 
     appropriated to carry out this part for the preceding fiscal 
     year, the Commissioner shall increase the minimum allotment 
     under paragraph (1)(C) by a percentage that shall not exceed 
     the percentage increase in the total amount appropriated to 
     carry out this part between the preceding fiscal year and the 
     fiscal year involved.
       ``(b) Proportional Reduction.--To provide allotments to 
     States in accordance with subsection (a)(1)(B), to provide 
     minimum allotments to States (as increased under subsection 
     (a)(3)) under subsection (a)(1)(C), or to provide minimum 
     allotments to States under subsection (a)(2)(B), the 
     Commissioner shall proportionately reduce the allotments of 
     the remaining States under subsection (a)(1)(A), with such 
     adjustments as may be necessary to prevent the allotment of 
     any such remaining State from being reduced to less than the 
     amount required by subsection (a)(1)(B).
       ``(c) Reallotment.--Whenever the Commissioner determines 
     that any amount of an allotment to a State for any fiscal 
     year will not be expended by such State in carrying out the 
     provisions of this part, the Commissioner shall make such 
     amount available for carrying out the provisions of this part 
     to one or more of the States that the Commissioner determines 
     will be able to use additional amounts during such year for 
     carrying out such provisions. Any amount made available to a 
     State for any fiscal year pursuant to the preceding sentence 
     shall, for the purposes of this section, be regarded as an 
     increase in the allotment of the State (as determined under 
     the preceding provisions of this section) for such year.

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

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

     ``SEC. 713. AUTHORIZED USES OF FUNDS.

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

     ``SEC. 714. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part such sums as may be necessary for each of the fiscal 
     years 1998 through 2004.

                ``PART C--CENTERS FOR INDEPENDENT LIVING

     ``SEC. 721. PROGRAM AUTHORIZATION.

       ``(a) In General.--From the funds appropriated for fiscal 
     year 1998 and for each subsequent fiscal year to carry out 
     this part, the Commissioner shall allot such sums as may be 
     necessary to States and other entities in accordance with 
     subsections (b) through (d).
       ``(b) Training.--
       ``(1) Grants; contracts; other arrangements.--For any 
     fiscal year in which the funds appropriated to carry out this 
     part exceed the funds appropriated to carry out this part for 
     fiscal year 1993, the Commissioner shall first reserve from 
     such excess, to provide training and technical assistance to 
     eligible agencies, centers for independent living, and 
     Statewide Independent Living Councils for such fiscal year, 
     not less than 1.8 percent, and not more than 2 percent, of 
     the funds appropriated to carry out this part for the fiscal 
     year involved.
       ``(2) Allocation.--From the funds reserved under paragraph 
     (1), the Commissioner shall make grants to, and enter into 
     contracts and other arrangements with, entities who have 
     experience in the operation of centers for independent living 
     to provide such training and technical assistance with 
     respect to planning, developing, conducting, administering, 
     and evaluating centers for independent living.
       ``(3) Funding priorities.--The Commissioner shall conduct a 
     survey of Statewide Independent Living Councils and centers 
     for independent living regarding training and technical 
     assistance needs in order to determine funding priorities for 
     such grants, contracts, and other arrangements.
       ``(4) Review.--To be eligible to receive a grant or enter 
     into a contract or other arrangement under this subsection, 
     such an entity shall submit an application to the 
     Commissioner at such time, in such manner, and containing a 
     proposal to provide such training and technical assistance, 
     and containing such additional information as the 
     Commissioner may require. The Commissioner shall provide for 
     peer review of grant applications by panels that include 
     persons who are not government employees and who have 
     experience in the operation of centers for independent 
     living.
       ``(5) Prohibition on combined funds.--No funds reserved by 
     the Commissioner under this subsection may be combined with 
     funds appropriated under any other Act or part of this Act if 
     the purpose of combining funds is to make a single 
     discretionary grant or a single discretionary payment, unless 
     such funds appropriated under this chapter are separately 
     identified in such grant or payment and are used for the 
     purposes of this chapter.
       ``(c) In General.--
       ``(1) States.--
       ``(A) Population basis.--After the reservation required by 
     subsection (b) has been made, and except as provided in 
     subparagraphs (B) and (C), from the remainder of the amounts 
     appropriated for each such fiscal year to carry out this 
     part, the Commissioner shall make an allotment to each State 
     whose State plan has been approved under section 706 of an 
     amount bearing the same ratio to such remainder as the 
     population of the State bears to the population of all 
     States.
       ``(B) Maintenance of 1992 amounts.--Subject to the 
     availability of appropriations to carry out this part, the 
     amount of any allotment made under subparagraph (A) to a 
     State for a fiscal year shall not be less than the amount of 
     financial assistance received by centers for independent 
     living in the State for fiscal year 1992 under part B of this 
     title, as in effect on the day before the date of enactment 
     of the Rehabilitation Act Amendments of 1992.
       ``(C) Minimums.--Subject to the availability of 
     appropriations to carry out this part and except as provided 
     in subparagraph (B), for a fiscal year in which the amounts 
     appropriated to carry out this part exceed the amounts 
     appropriated for fiscal year 1992 to carry out part B of this 
     title, as in effect on the day before the date of enactment 
     of the Rehabilitation Act Amendments of 1992--
       ``(i) if such excess is not less than $8,000,000, the 
     allotment to any State under subparagraph (A) shall be not 
     less than $450,000 or one-third of one percent of the sums 
     made available for the fiscal year for which the allotment is 
     made, whichever is greater, and the allotment of any State 
     under this section for any fiscal year that is less than 
     $450,000 or one-third of one percent of such sums shall be 
     increased to the greater of the two amounts;
       ``(ii) if such excess is not less than $4,000,000 and is 
     less than $8,000,000, the allotment to any State under 
     subparagraph (A) shall be not less than $400,000 or one-third 
     of one percent of the sums made available for the fiscal year 
     for which the allotment is made, whichever is greater, and 
     the allotment of any State under this section for any fiscal 
     year that is less than $400,000 or one-third of one percent 
     of such sums shall be increased to the greater of the two 
     amounts; and
       ``(iii) if such excess is less than $4,000,000, the 
     allotment to any State under subparagraph (A) shall approach, 
     as nearly as possible, the greater of the two amounts 
     described in clause (ii).
       ``(2) Certain territories.--
       ``(A) In general.--For the purposes of paragraph (1)(C), 
     Guam, American Samoa,

[[Page S165]]

     the United States Virgin Islands, and the Commonwealth of the 
     Northern Mariana Islands shall not be considered to be 
     States.
       ``(B) Allotment.--Each jurisdiction described in 
     subparagraph (A) shall be allotted under paragraph (1)(A) not 
     less than one-eighth of one percent of the remainder for the 
     fiscal year for which the allotment is made.
       ``(3) Adjustment for inflation.--For any fiscal year, 
     beginning in fiscal year 1999, in which the total amount 
     appropriated to carry out this part exceeds the total amount 
     appropriated to carry out this part for the preceding fiscal 
     year, the Commissioner shall increase the minimum allotment 
     under paragraph (1)(C) by a percentage that shall not exceed 
     the percentage increase in the total amount appropriated to 
     carry out this part between the preceding fiscal year and the 
     fiscal year involved.
       ``(4) Proportional reduction.--To provide allotments to 
     States in accordance with paragraph (1)(B), to provide 
     minimum allotments to States (as increased under paragraph 
     (3)) under paragraph (1)(C), or to provide minimum allotments 
     to States under paragraph (2)(B), the Commissioner shall 
     proportionately reduce the allotments of the remaining States 
     under paragraph (1)(A), with such adjustments as may be 
     necessary to prevent the allotment of any such remaining 
     State from being reduced to less than the amount required by 
     paragraph (1)(B).
       ``(d) Reallotment.--Whenever the Commissioner determines 
     that any amount of an allotment to a State for any fiscal 
     year will not be expended by such State for carrying out the 
     provisions of this part, the Commissioner shall make such 
     amount available for carrying out the provisions of this part 
     to one or more of the States that the Commissioner determines 
     will be able to use additional amounts during such year for 
     carrying out such provisions. Any amount made available to a 
     State for any fiscal year pursuant to the preceding sentence 
     shall, for the purposes of this section, be regarded as an 
     increase in the allotment of the State (as determined under 
     the preceding provisions of this section) for such year.

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

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

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

       ``(a) Establishment.--
       ``(1) In general.--
       ``(A) Initial year.--
       ``(i) Determination.--The director of a designated State 
     unit, as provided in paragraph (2), or the Commissioner, as 
     provided in paragraph (3), shall award grants under this 
     section for an initial fiscal year if the Commissioner 
     determines that the amount of State funds that were earmarked 
     by a State for a preceding fiscal year to support the general 
     operation of centers for independent living meeting the 
     requirements of this part equaled or exceeded the amount of 
     funds allotted to the State under subsection (c) or (d) of 
     section 721 for such year.
       ``(ii) Grants.--The director or the Commissioner, as 
     appropriate, shall award such grants, from the amount of 
     funds so allotted for the initial fiscal year, to eligible 
     agencies in the State for the planning, conduct, 
     administration, and evaluation of centers for independent 
     living that comply with the standards and assurances set 
     forth in section 725.
       ``(iii) Regulation.--The Commissioner shall by regulation 
     specify the preceding fiscal year with respect to which the 
     Commissioner will make the determinations described in clause 
     (i) and subparagraph (B), making such adjustments as may be 
     necessary to accommodate State funding cycles such as 2-year 
     funding cycles or State fiscal years that do not coincide 
     with the Federal fiscal year.
       ``(B) Subsequent years.--For each year subsequent to the 
     initial fiscal year described in subparagraph (A), the 
     director of the designated State unit shall continue to have 
     the authority to award such grants under this section if the 
     Commissioner determines that the State continues to earmark 
     the amount of State funds described in subparagraph (A)(i). 
     If the State does not continue to earmark such an amount for 
     a fiscal year, the State shall be ineligible to make grants 
     under this section after a final year following such fiscal 
     year, as defined in accordance with regulations established 
     by the Commissioner, and for each subsequent fiscal year.
       ``(2) Grants by designated state units.--In order for the 
     designated State unit to be eligible to award the grants 
     described in paragraph (1) and carry out this section for a 
     fiscal year with respect to a State, the designated State 
     agency shall submit an application to the Commissioner at 
     such time, and in such manner as the Commissioner may 
     require, including information about

[[Page S166]]

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

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

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

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

       ``(a) In General.--Each center for independent living that 
     receives assistance under this part shall comply with the 
     standards set out in subsection (b) and provide and comply 
     with the assurances set out in subsection (c) in order to 
     ensure that all programs and activities under this part are 
     planned, conducted, administered, and evaluated in a manner 
     consistent with the purposes of this chapter and the 
     objective of providing assistance effectively and 
     efficiently.
       ``(b) Standards.--
       ``(1) Philosophy.--The center shall promote and practice 
     the independent living philosophy of--
       ``(A) consumer control of the center regarding 
     decisionmaking, service delivery, management, and 
     establishment of the policy and direction of the center;
       ``(B) self-help and self-advocacy;
       ``(C) development of peer relationships and peer role 
     models; and
       ``(D) equal access of individuals with significant 
     disabilities to society and to all services, programs, 
     activities, resources, and facilities, whether public or 
     private and regardless of the funding source.
       ``(2) Provision of services.--The center shall provide 
     services to individuals with a range of significant 
     disabilities. The center shall provide services on a cross-
     disability basis (for individuals with all different types of 
     significant disabilities, including individuals with 
     significant disabilities who are members of populations that 
     are unserved or underserved by programs under this title). 
     Eligibility for services at any center for independent living 
     shall be determined by the center, and shall not be based on 
     the presence of any one or more specific significant 
     disabilities.

[[Page S167]]

       ``(3) Independent living goals.--The center shall 
     facilitate the development and achievement of independent 
     living goals selected by individuals with significant 
     disabilities who seek such assistance by the center.
       ``(4) Community options.--The center shall work to increase 
     the availability and improve the quality of community options 
     for independent living in order to facilitate the development 
     and achievement of independent living goals by individuals 
     with significant disabilities.
       ``(5) Independent living core services.--The center shall 
     provide independent living core services and, as appropriate, 
     a combination of any other independent living services.
       ``(6) Activities to increase community capacity.--The 
     center shall conduct activities to increase the capacity of 
     communities within the service area of the center to meet the 
     needs of individuals with significant disabilities.
       ``(7) Resource development activities.--The center shall 
     conduct resource development activities to obtain funding 
     from sources other than this chapter.
       ``(c) Assurances.--The eligible agency shall provide at 
     such time and in such manner as the Commissioner may require, 
     such satisfactory assurances as the Commissioner may require, 
     including satisfactory assurances that--
       ``(1) the applicant is an eligible agency;
       ``(2) the center will be designed and operated within local 
     communities by individuals with disabilities, including an 
     assurance that the center will have a Board that is the 
     principal governing body of the center and a majority of 
     which shall be composed of individuals with significant 
     disabilities;
       ``(3) the applicant will comply with the standards set 
     forth in subsection (b);
       ``(4) the applicant will establish clear priorities through 
     annual and 3-year program and financial planning objectives 
     for the center, including overall goals or a mission for the 
     center, a work plan for achieving the goals or mission, 
     specific objectives, service priorities, and types of 
     services to be provided, and a description that shall 
     demonstrate how the proposed activities of the applicant are 
     consistent with the most recent 3-year State plan under 
     section 704;
       ``(5) the applicant will use sound organizational and 
     personnel assignment practices, including taking affirmative 
     action to employ and advance in employment qualified 
     individuals with significant disabilities on the same terms 
     and conditions required with respect to the employment of 
     individuals with disabilities under section 503;
       ``(6) the applicant will ensure that the majority of the 
     staff, and individuals in decisionmaking positions, of the 
     applicant are individuals with disabilities;
       ``(7) the applicant will practice sound fiscal management, 
     including making arrangements for an annual independent 
     fiscal audit, notwithstanding section 7502(a)(2)(A) of title 
     31, United States Code;
       ``(8) the applicant will conduct annual self-evaluations, 
     prepare an annual report, and maintain records adequate to 
     measure performance with respect to the standards, containing 
     information regarding, at a minimum--
       ``(A) the extent to which the center is in compliance with 
     the standards;
       ``(B) the number and types of individuals with significant 
     disabilities receiving services through the center;
       ``(C) the types of services provided through the center and 
     the number of individuals with significant disabilities 
     receiving each type of service;
       ``(D) the sources and amounts of funding for the operation 
     of the center;
       ``(E) the number of individuals with significant 
     disabilities who are employed by, and the number who are in 
     management and decisionmaking positions in, the center; and
       ``(F) a comparison, when appropriate, of the activities of 
     the center in prior years with the activities of the center 
     in the most recent year;
       ``(9) individuals with significant disabilities who are 
     seeking or receiving services at the center will be notified 
     by the center of the existence of, the availability of, and 
     how to contact, the client assistance program;
       ``(10) aggressive outreach regarding services provided 
     through the center will be conducted in an effort to reach 
     populations of individuals with significant disabilities that 
     are unserved or underserved by programs under this title, 
     especially minority groups and urban and rural populations;
       ``(11) staff at centers for independent living will receive 
     training on how to serve such unserved and underserved 
     populations, including minority groups and urban and rural 
     populations;
       ``(12) the center will submit to the Statewide Independent 
     Living Council a copy of its approved grant application and 
     the annual report required under paragraph (8);
       ``(13) the center will prepare and submit a report to the 
     designated State unit or the Commissioner, as the case may 
     be, at the end of each fiscal year that contains the 
     information described in paragraph (8) and information 
     regarding the extent to which the center is in compliance 
     with the standards set forth in subsection (b); and
       ``(14) an independent living plan described in section 
     704(e) will be developed unless the individual who would 
     receive services under the plan signs a waiver stating that 
     such a plan is unnecessary.

     ``SEC. 726. DEFINITIONS.

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

     ``SEC. 727. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part such sums as may be necessary for each of the fiscal 
     years 1998 through 2004.

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

     ``SEC. 751. DEFINITION.

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

     ``SEC. 752. PROGRAM OF GRANTS.

       ``(a) In General.--
       ``(1) Authority for grants.--Subject to subsections (b) and 
     (c), the Commissioner may make grants to States for the 
     purpose of providing the services described in subsection (d) 
     to older individuals who are blind.
       ``(2) Designated state agency.--The Commissioner may not 
     make a grant under subsection (a) unless the State involved 
     agrees that the grant will be administered solely by the 
     agency described in section 101(a)(2)(A)(i).
       ``(b) Contingent Competitive Grants.--Beginning with fiscal 
     year 1993, in the case of any fiscal year for which the 
     amount appropriated under section 753 is less than 
     $13,000,000, grants made under subsection (a) shall be--
       ``(1) discretionary grants made on a competitive basis to 
     States; or
       ``(2) grants made on a noncompetitive basis to pay for the 
     continuation costs of activities for which a grant was 
     awarded--
       ``(A) under this chapter; or
       ``(B) under part C, as in effect on the day before the date 
     of enactment of the Rehabilitation Act Amendments of 1992.
       ``(c) Contingent Formula Grants.--
       ``(1) In general.--In the case of any fiscal year for which 
     the amount appropriated under section 753 is equal to or 
     greater than $13,000,000, grants under subsection (a) shall 
     be made only to States and shall be made only from allotments 
     under paragraph (2).
       ``(2) Allotments.--For grants under subsection (a) for a 
     fiscal year described in paragraph (1), the Commissioner 
     shall make an allotment to each State in an amount determined 
     in accordance with subsection (j), and shall make a grant to 
     the State of the allotment made for the State if the State 
     submits to the Commissioner an application in accordance with 
     subsection (i).
       ``(d) Services Generally.--The Commissioner may not make a 
     grant under subsection (a) unless the State involved agrees 
     that the grant will be expended only for purposes of--
       ``(1) providing independent living services to older 
     individuals who are blind;
       ``(2) conducting activities that will improve or expand 
     services for such individuals; and
       ``(3) conducting activities to help improve public 
     understanding of the problems of such individuals.
       ``(e) Independent Living Services.--Independent living 
     services for purposes of subsection (d)(1) include--
       ``(1) services to help correct blindness, such as--
       ``(A) outreach services;
       ``(B) visual screening;
       ``(C) surgical or therapeutic treatment to prevent, 
     correct, or modify disabling eye conditions; and
       ``(D) hospitalization related to such services;
       ``(2) the provision of eyeglasses and other visual aids;
       ``(3) the provision of services and equipment to assist an 
     older individual who is blind to become more mobile and more 
     self-sufficient;
       ``(4) mobility training, Braille instruction, and other 
     services and equipment to help an older individual who is 
     blind adjust to blindness;
       ``(5) guide services, reader services, and transportation;
       ``(6) any other appropriate service designed to assist an 
     older individual who is blind in coping with daily living 
     activities, including supportive services and rehabilitation 
     teaching services;
       ``(7) independent living skills training, information and 
     referral services, peer counseling, and individual advocacy 
     training; and
       ``(8) other independent living services.
       ``(f) Matching Funds.--
       ``(1) In general.--The Commissioner may not make a grant 
     under subsection (a) unless the State involved agrees, with 
     respect to the costs of the program to be carried out by the 
     State pursuant to such subsection, to make available 
     (directly or through donations from public or private 
     entities) non-Federal contributions toward such costs in an 
     amount that is not less than $1 for each $9 of Federal funds 
     provided in the grant.
       ``(2) Determination of amount contributed.--Non-Federal 
     contributions required in paragraph (1) may be in cash or in 
     kind, fairly evaluated, including plant, equipment, or 
     services. Amounts provided by the Federal Government, or 
     services assisted or subsidized to any significant extent by 
     the Federal Government, may not be included in determining 
     the amount of such non-Federal contributions.

[[Page S168]]

       ``(g) Certain Expenditures of Grants.--A State may expend a 
     grant under subsection (a) to carry out the purposes 
     specified in subsection (d) through grants to public and 
     nonprofit private agencies or organizations.
       ``(h) Requirement Regarding State Plan.--The Commissioner 
     may not make a grant under subsection (a) unless the State 
     involved agrees that, in carrying out subsection (d)(1), the 
     State will seek to incorporate into the State plan under 
     section 704 any new methods and approaches relating to 
     independent living services for older individuals who are 
     blind.
       ``(i) Application for Grant.--
       ``(1) In general.--The Commissioner may not make a grant 
     under subsection (a) unless an application for the grant is 
     submitted to the Commissioner and the application is in such 
     form, is made in such manner, and contains such agreements, 
     assurances, and information as the Commissioner determines to 
     be necessary to carry out this section (including agreements, 
     assurances, and information with respect to any grants under 
     subsection (j)(4)).
       ``(2) Contents.--An application for a grant under this 
     section shall contain--
       ``(A) an assurance that the agency described in subsection 
     (a)(2) will prepare and submit to the Commissioner a report, 
     at the end of each fiscal year, with respect to each project 
     or program the agency operates or administers under this 
     section, whether directly or through a grant or contract, 
     which report shall contain, at a minimum, information on--
       ``(i) the number and types of older individuals who are 
     blind and are receiving services;
       ``(ii) the types of services provided and the number of 
     older individuals who are blind and are receiving each type 
     of service;
       ``(iii) the sources and amounts of funding for the 
     operation of each project or program;
       ``(iv) the amounts and percentages of resources committed 
     to each type of service provided;
       ``(v) data on actions taken to employ, and advance in 
     employment, qualified individuals with significant 
     disabilities, including older individuals who are blind; and
       ``(vi) a comparison, if appropriate, of prior year 
     activities with the activities of the most recent year;
       ``(B) an assurance that the agency will--
       ``(i) provide services that contribute to the maintenance 
     of, or the increased independence of, older individuals who 
     are blind; and
       ``(ii) engage in--

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

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

     ``SEC. 753. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     chapter such sums as may be necessary for each of the fiscal 
     years 1998 through 2004.''.

     SEC. 11. HELEN KELLER NATIONAL CENTER ACT.

       (a) General Authorization of Appropriations.--The first 
     sentence of section 205(a) of the Helen Keller National 
     Center Act (29 U.S.C. 1904(a)) is amended by striking ``1993 
     through 1997'' and inserting ``1998 through 2000''.
       (b) Helen Keller National Center Federal Endowment Fund.--
     The first sentence of section 208(h) of such Act (29 U.S.C. 
     1907(h)) is amended by striking ``1993 through 1997'' and 
     inserting ``1998 through 2000''.
       (c) Registry.--Such Act (29 U.S.C. 1901 et seq.) is amended 
     by adding at the end the following:

     ``SEC. 209. NATIONAL REGISTRY AND AUTHORIZATION OF 
                   APPROPRIATIONS.

       ``(a) The Center shall establish and maintain a national 
     registry of individuals who are deaf-blind, using funds made 
     available under subsection (b).
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out subsection (a) 
     such sums as may be necessary for each of fiscal years 1998 
     through 2000.''.

     SEC. 12. PRESIDENT'S COMMITTEE ON NATIONAL EMPLOY THE 
                   PHYSICALLY HANDICAPPED WEEK.

       Section 2(2) of the Joint Resolution entitled ``Joint 
     Resolution authorizing an appropriation for the work of the 
     President's Committee on National Employ the Physically 
     Handicapped Week'', approved July 11, 1949 (36 U.S.C. 
     155b(2)) is amended by inserting ``solicit,'' before 
     ``accept,''.

     SEC. 13. PEER REVIEW.

       Part B of title IV of the Department of Education 
     Organization Act (20 U.S.C. 3471 et seq.) is amended by 
     inserting before section 427 the following:

     ``SEC. 426A. PEER REVIEW.

       ``The Federal Advisory Committee Act (5 U.S.C. App.) shall 
     not apply to peer review panels established by the Secretary 
     to evaluate applications for financial assistance awarded on 
     a competitive basis.''.

     SEC. 14. CONFORMING AMENDMENTS.

       (a) Preparation.--After consultation with the appropriate 
     committees of Congress and the Director of the Office of 
     Management and Budget, the Secretary of Education shall 
     prepare recommended legislation containing technical and 
     conforming amendments to reflect the changes made by this 
     Act.
       (b) Submission to Congress.--Not later than 6 months after 
     the date of enactment of this Act, the Secretary of Education 
     shall submit to Congress the recommended legislation referred 
     to under subsection (a).

  Mr. JEFFORDS. Mr. President, I am pleased to join my colleagues 
Senators DeWine, Kennedy, Wellstone, Harkin, Frist, Collins, Chafee, 
and Reed in introducing the Rehabilitation Act Amendments of 1998. We 
began the process of drafting this bipartisan, consensus-based 
legislation shortly after completing the reauthorization of the 
Individuals with Disabilities Education Act (IDEA). Just as we sought 
the assistance of the disability community and professionals who serve 
individuals with disabilities in determining the direction we took in 
drafting the IDEA legislation, so we did with this bill. Just as we 
welcomed the assistance of the Administration in drafting the IDEA 
legislation, so we did with this bill.
  As a result, this legislation will open up more employment 
opportunities to individuals with disabilities. It will also provide 
State vocational rehabilitation agencies and others who provide 
employment-related assistance to individuals with disabilities with the 
tools they need to provide appropriate, timely help to individuals with 
disabilities who want to work. The combination of the 1997 
reauthorization of IDEA and this reauthorization brings us closer to a 
seamless system in which parents of children with disabilities will 
envision and expect greater opportunities for their children to have 
productive and satisfying lives as adults.
  The Rehabilitation Act Amendments of 1997 will increase opportunities 
for individuals with disabilities to prepare for, secure, maintain, and 
regain employment by linking vocational rehabilitation services to 
those services that are available under current State workforce systems 
and those that will be available under the Workforce Investment 
Partnership Act of 1997. It will simplify access to vocational 
rehabilitation services and streamline the administration of the 
vocational rehabilitation program. It makes additional improvements in 
discretionary

[[Page S169]]

programs related to personnel training, research, and demonstration 
projects and consumer-controlled Centers for Independent Living. It 
provides greater access to information technology. The reauthorization 
will extend through fiscal year 2004.
  The bill includes extensive links between vocational rehabilitation 
agencies and State workforce systems. For example, amendments related 
to linkage are found throughout the bill in sections pertaining to the 
findings and purposes of the legislation, definitions, program 
administration, reports, information dissemination, and State plan 
requirements, including those concerning data reporting. Complementary 
and parallel provisions to promote linkage between vocational 
rehabilitation agencies and State workforce systems also are included 
in the Workforce Investment Partnership Act of 1997.
  The bill makes important changes in title I of the Act. The State 
plan requirements have been rewritten to simplify administration of the 
vocational rehabilitation program and reinforce its intent, helping 
individuals secure employment. The amendments reduce the 36 State plan 
requirements in current law to 24 and require the submission of one 
State plan, with amendments thereafter under certain circumstances. The 
bill allows, when a State is operating under an order of selection, for 
core services to be available to individuals with disabilities who do 
not meet a State's criteria for full services from the vocational 
rehabilitation agency. The legislation gives vocational rehabilitation 
agencies the ability to secure financial support from other entities 
who could or should pay for certain services needed by an individual 
with a disability, who is being assisted by the vocational 
rehabilitation agency to prepare for or secure a job. The bill requires 
State vocational rehabilitation agencies and State Rehabilitation 
Councils to jointly develop and conduct a comprehensive needs 
assessment every three years. Based on such an assessment, they will 
annually set and report on progress in achieving employment goals set 
for individuals with disability. The bill simplifies procedures for 
establishing eligibility, by requiring consideration of existing 
evaluating information in determining an individual's eligibility for 
vocational rehabilitation services. The bill strengthens eligible 
individuals' roles in developing their individualized rehabilitation 
employment plans. Such individuals will be given greater flexibility in 
how they develop their plans. The amendments give all States dollars 
for inservice training, and State allotments for training dollars will 
increase with increases in the Consumer Price Index. The bill requires 
that voluntary mediation be available for resolving disputes between 
vocational rehabilitation agencies and individuals with disabilities.

  The bill selectively amends other titles in the Rehabilitation Act. 
Title II, which authorizes the National Institute on Disability and 
Rehabilitation Research, is amended to require that all funding 
priorities of the Institute be derived from a five-year plan that will 
be subjected to public comment and then submitted to Congress. The bill 
expands the authority of the Institute to allow funding of initiatives 
related to the quality assurance of assistive technology and the 
effectiveness of alternative medicine when used to treat individuals 
with disabilities. The legislation streamlines and updates title III of 
the Act, which authorizes training and demonstration activities, by 
clearly delineating funding priorities, simplifying the notification of 
interested parties about upcoming grant opportunities, and permitting 
funding for training of personnel in one-stop centers so that they will 
be more able to appropriately and effectively assist individuals with 
disabilities seeking employment-related assistance through such 
centers.
  With guidance from Senator Dodd, we strengthened the provisions in 
title V of the Act pertaining to the accessibility of electronic and 
information technology for individuals with disabilities by designating 
that the Access Board to write regulations and by requiring the Office 
of Management and Budget to oversee Federal agencies' compliance with 
such regulations. The legislation amends title VI of the Act by adding 
a new initiative, Projects in Telecommuting and Self-Employment for 
Individuals with Disabilities, and by permitting Projects with Industry 
to assist eligible individuals without waiting for referrals or 
eligibility status determinations from vocational rehabilitation 
agencies and to provide training and/or placement services.
  These amendments build on and complement those that were enacted in 
1992. The 1992 amendments to the Rehabilitation Act had a significant, 
positive effect in my State, Vermont.
  There, one out of every eight residents is disabled. The Division of 
Vocational Rehabilitation has enabled many Vermonters with disabilities 
to exercise the choices the 1992 amendments triggered, to become 
employed, and to live successfully in their communities. In 1996, 
Vermont's vocational rehabilitation program provided an array of 
services to almost 5,000 Vermonters, while directly assisting 850 
individuals with disabilities to become successfully employed.

  The benefits of Vermont's efforts are many. Most important is the 
fact that Vermont consumers of vocational rehabilitation services who 
secure employment enjoy an average increase in income exceeding $8,000 
per year. Seventy-three percent of these individuals enter the 
workforce earning more than minimum wage. Seventy-eight percent of 
those Vermonters who were assisted by the Vermont Division of 
Rehabilitation in 1996 remain employed today. In addition, the Vermont 
Consumer Choice Project, made possible by the 1992 amendments, has 
allowed my State to create organizational structures, policies and 
practices that have resulted in a greater degree of informed choice for 
individuals seeking and receiving vocational rehabilitation services.
  The Rehabilitation Act Amendments of 1998 truly reflect a team effort 
by committed Senators, their staff, Federal officials, individuals with 
disabilities, rehabilitation professionals and others who know through 
experience that for individuals with disabilities, as for other 
individuals, having a job and liking it are the bottom line. Through 
these amendments we have secured and extended that bottom line for 
individuals with disabilities--more jobs, better jobs--into the next 
century.
  Mr. KENNEDY. Mr. President, I was proud to be a sponsor of the 
Rehabilitation Act Amendments of 1992, and I am proud to support the 
current reauthorization. I commend Senator Jeffords, Senator DeWine, 
and Senator Wellstone for their leadership in expediting our 
consideration of this important legislation. And I commend all the 
staff members for their skillful work in making this a successful 
bipartisan consensus bill. I especially thank Senator Tom Harkin for 
his leadership and continued commitment to individuals with 
disabilities in this country.
  The Rehabilitation Amendments of 1992 developed the foundation for a 
rehabilitation system which recognizes competence and choice, and which 
gives individuals with disabilities the services and support they need 
to live, work and participate as fully as possible in their 
communities. For millions of individuals with disabilities, vocational 
rehabilitation has meant the difference between dependence and 
independence, between lost potential and productive careers.
  Most important, the vocational rehabilitation in this country 
provides the necessary skills and support to keep the promise of the 
Americans with Disabilities Act--so that all individuals with 
disabilities, especially those with significant disabilities, will have 
the opportunity to achieve their full potential and be part of the 
mainstream of American life.
  The bill being introduced today builds on the gains of the past two 
decades, by strengthening employment possibilities, encouraging self-
employment, providing better outreach to underserved populations, and 
streamlining the role of the government. This bill also establishes a 
stronger linkage between vocational rehabilitation and the larger 
statewide job training system.
  I look forward to working with my colleagues in Congress to enact 
this important legislation, so that the talents, strengths, competence 
and interests of all individuals with disabilities will be recognized, 
enhanced, and fairly rewarded in communities and workplaces across the 
nation.

[[Page S170]]

  Mr. HARKIN. Mr. President, I am pleased to join my colleagues in co-
sponsoring the Rehabilitation Act Amendments of 1998. I particularly 
wish to thank my Republican colleagues, Senators DeWine and Jeffords, 
for developing this bill in a bipartisan manner. The bill that we 
introduce today represents the work of Republicans, Democrats, and the 
Administration. I am pleased that our work together continues the long 
history of bipartisanship in developing legislation that addresses the 
needs of persons with disabilities.
  The State Vocational Rehabilitation Service Program provides $2.2 
billion in formula grant assistance to States to help individuals with 
disabilities prepare for an engage in gainful employment. Since 
established by the Smith-Fess Act 75 years ago, state vocational 
rehabilitation programs have served some nine million people. This 
program promotes economic independence for persons with disabilities, 
and the numbers reflect that:
  The percentage of individuals who reported that their income was 
their primary source of support increased from 18% at the time of 
application to 71% at the time of exit from the program;
  The percentage of individuals with earned income of any kind 
increased from 22% at application to 93% at program exit; and
  The number of individuals working at or above the Federal minimum 
wage rate increased from 18% at application to 86% at closure.
  In 1992, Congress made major changes to the Act, namely, increasing 
consumer participation, streamlining processes, and reducing 
unnecessary paperwork. In the bill we introduce today, we have built on 
the `92 amendments. The bill preserves and strengthens the themes of 
the `92 amendments while fine-tuning and aligning the Act with other 
workforce reforms so that individuals with disabilities can benefit 
from them.
  This bill strengthens the role of the consumer throughout the 
vocational rehabilitation process, particularly in the development of 
the individual's employment plan. It reduces unnecessary burdens on 
State VR agencies by streamlining the State plan. The bill also 
refocuses the State plan on improving outcomes for individuals with 
disabilities by requiring States to develop, jointly with the State 
Rehabilitation Council, annual goals and strategies for improving 
results.
  The due process protections provided in the State Grant program to VR 
applicants and clients are strengthened by eliminating State VR agency 
review of decisions by impartial hearing officers. The bill would also 
require States to provide for voluntary mediation (modeled on the 
provisions in IDEA) as another mechanism to resolve disputes.
  Access of Social Security beneficiaries to VR services if 
facilitated, and unnecessary gatekeeping is eliminated, by making SSI 
and SSDI beneficiaries presumptively eligible for services under the VR 
State Grants program. This change would eliminate the need for the VR 
agency to determine on a case-by-case basis whether these individuals 
``require'' VR services in order to gain employment.
  Of particular interest to me and to Senator Dodd are the changes to 
Section 508 of the Act which pertain to electronic and information 
technology accessibility. This bill strengthens the provisions 
regarding procurement by Federal agencies of technology that is 
accessible to individuals with disabilities.
  I am pleased to co-sponsor this bill and look forward to its passage.
  Mr. FRIST. Mr. President. I am pleased to join the Chairman of the 
Employment and Training Subcommittee, Senator DeWine and the Chairman 
of the Labor and Human Resources Committee Senator Jeffords in 
introducing the Rehabilitation Act Amendments of 1998. I am grateful 
for their strong leadership in drafting this important legislation.
  The vocational rehabilitation program was begun in 1921 to help 
disabled war veterans obtain rehabilitation and employment assistance. 
Today it is a major source of employment assistance for many 
individuals with disabilities, including individuals with severe 
disabilities. Vocational rehabilitation programs, although operated by 
State vocational rehabilitation agencies are located throughout a 
State. These programs help about a million individuals with 
disabilities a year, about 20 percent of whom enter the competitive 
labor market within 12 months. The average cost per person aided is 
about $2,500.
  The Tennessee Vocational Rehabilitation Program provides one example 
of what can happen when the focus of an agency is clear--getting people 
with disabilities jobs. In 1996, this program in my State served 26,032 
individuals with disabilities of which 81 percent were severely 
disabled. Of the individuals served 5,820 were successfully employed 
with 90.4 percent of them working in the competitive labor market. The 
annualized income of these 5,820 individuals, once they entered the 
work force increased from $8.732 million to $64.233 million. I am proud 
of this record, while realizing that more can and should be done.
  The main goal of the reauthorization, which has previously been 
discussed in detail today by Senators DeWine and Jeffords is to 
increase opportunities for individuals with disabilities to prepare 
for, secure, maintain, and regain employment. There is also a great 
effort to simplify access to vocational rehabilitation services, while 
reducing costs and increasing effectiveness through streamlining the 
administration of the vocational rehabilitation program.
  Also included in this reauthorization is the effort that I began as 
Chairman of the Subcommittee on Disability Policy in the 104th 
Congress, the linking of vocational rehabilitation programs to a new 
state system of work force development. The intention is to create a 
seamless system of increasing employment assistance for individuals 
with disabilities with a new state workforce system. The 
reauthorization of the Rehabilitation Act includes this important goal 
by linking vocational rehabilitation services to those that will be 
available under the Workforce Investment Partnership Act of 1997.
  I would like to acknowledge the bipartisan effort brought forth to 
build the consensus that is evident by this bill. I am pleased to see 
the tradition of bipartisanship corporation on disability policy issues 
continued through this effort. I would especially like to recognize 
Aaron Grau with Senator DeWine, and Dr. Patricia Morrissey with Senator 
Jeffords for their hard work and dedication which has made legislation 
a reality.
  I am confident that the Rehabilitation Act Amendments of 1998 will 
take this seventy-seven year old program into the next century as a 
strong and integral part of providing opportunities for individuals 
with disabilities to prepare for, secure, maintain, and regain 
employment.
  Ms. COLLINS. Mr. President, I am pleased to join my distinguished 
colleagues as one of the original cosponsors of the Rehabilitation Act 
Amendments of 1998. The Rehabilitation Act, originally adopted almost 
80 years ago, has developed during succeeding years into one of this 
country's most important efforts assisting disabled persons in 
achieving their potentials for employment.
  This law authorizes programs helping persons with disabilities attain 
their full employment potential as self-supporting, contributing 
members of society. It provides supported employment services for 
persons who cannot work independently and offers the services disabled 
persons need to lead independent lives even if an individual is not 
capable of working. Through the Rehabilitation Act, federal-state 
programs provide comprehensive services that help persons with physical 
and mental disabilities become employable, achieve independence, and 
participate more fully in society.
  The Rehabilitation Amendments of 1998, which we are introducing 
today, reaffirm the commitment of the federal government to its 
disabled citizens and continues the progress we have seen in previous 
reauthorizations. This bill advances Federal-State rehabilitation 
efforts in numerous ways. This morning I want to mention three of the 
changes I believe are the most significant: first, the linking of 
vocational rehabilitation services to other workforce investment 
programs; second, the authorization of core services to individuals not 
eligible for services under an order of selection; and third, the 
simplification of access to vocational rehabilitation services.

[[Page S171]]

  This bill, which will be incorporated into the S. 1186, the Workforce 
Investment Partnership Act, will be functionally linked to the state 
workforce, job training, and vocational and adult education systems 
authorized by S. 1186. The Rehabilitation Act will thereby become part 
of the effort by Congress to replace a fragmented array of programs 
with an integrated federal system of workforce development without 
sacrificing the integrity and effectiveness of the vocational 
rehabilitation program. This process is already underway in Maine 
through the Maine Department of Labor's one stop career centers. This 
legislation will make it easier for Maine and other states to create a 
seamless system of employment assistance for our disabled citizens.
  The second improvement is the authorization of core services to all 
eligible disabled persons. Because the Rehabilitation Act requires the 
states to serve the most severely disabled individuals, large numbers 
of individuals with lesser disabilities have been cut off from 
services. The Rehabilitation Act Amendments of 1998 will permit a state 
to provide core services to those individuals who are not eligible for 
full services under the state's criteria for order of selection. Under 
this provision of the law the states may provide individualized 
counseling and guidance, individualized vocational exploration, 
supervised job placement referrals, and assistance obtaining reasonable 
accommodations even if the individual does not qualify for actual 
rehabilitation services. This will extend important and highly 
effective services to a large, deserving population and should greatly 
enhance these individuals' success in obtaining employment.
  A third advance is the simplification of the procedures by which 
eligibility for rehabilitation is established. Under these amendments, 
individuals receiving Supplemental Security Income or Social Security 
Disability Income are presumed to be eligible for services providing 
they intend to seek employment and have an impediment to employment 
caused by their disability.
  In addition to these significant changes that directly affect the 
clients of the vocational rehabilitation program, this act makes 
important changes that will make the administration of the vocational 
rehabilitation program more efficient and reduce a state's 
administrative burden. One example of this is the coordination of a 
states vocational rehabilitation plan with the submission of the other 
job training plans submitted under the Workforce Investment Partnership 
Act. This will help to eliminate duplicative provisions, submissions 
and reports.
  Another is the requirement for cooperation and collaboration through 
cooperative agreements among the state's vocational rehabilitation 
agency and other components of a state's workforce investment system. 
While these agreements will be most visible as they affect access and 
delivery of services, they will also bring about coordination of 
information and financial management systems leading to simplified and 
improved management of a state's job training efforts.
  I am proud to cosponsor the reauthorization of an act which has 
helped so many disabled individuals achieve employment and independent 
lives.
                                 ______
                                 
      By Mr. SHELBY:

       S. 1580. A bill to amend the Balanced Budget Act of 1997 to 
     place an 18-month moratorium on the prohibition of payment 
     under the medicare program for home health services 
     consisting of venipuncture solely for the purpose of 
     obtaining a blood sample, and to require the Secretary of 
     Health and Human Services to study potential fraud and abuse 
     under such program with respect to such services; to the 
     Committee on Finance.


            The Medicare Venipuncture Assessment Act of 1998

  Mr. SHELBY. Mr. President, the Balanced Budget Act (BBA) of 1997 took 
important steps to begin to combat the financial problems that have 
plagued the Medicare system for some time. However, the BBA included a 
provision that may disqualify Medicare beneficiaries who receive home 
health care stemming from their need for venipuncture services. Many 
Alabamians who rely on the Medicare home health care program have 
contacted me expressing their concern with this provision. Much of the 
concern has resulted from a lack of information as to the true effects 
of this provision.
  Therefore, I rise today to offer the Medicare Venipuncture Assessment 
Act of 1998. This legislation will provide an eighteen month moratorium 
on the venipuncture provision included in last year's BBA, and direct 
the Secretary of Health and Human Services (HHS) to conduct a study to 
determine what the specific effects will be of doing away with 
venipuncture as a qualifying skill for home health care.
  In addition, this legislation provides a window of time for Congress 
to address any problems found by HHS, and craft an appropriate solution 
that protects the seniors who receive home health care, without 
perpetuating fraud and abuse in the system. But perhaps the most 
important aspect of the Medicare Venipuncture Assessment Act is that it 
will provide much needed piece of mind to many of our seniors. Mr. 
President, we owe it to our constituents to separate fact from fiction 
with regard to this matter, and fully inform them of the effects of the 
venipuncture provision contained in last year's BBA.
  If administered correctly, home health care can be a cost effective 
alternative to nursing home and hospital based care. This legislation 
protects the Medicare home health care system by providing specific 
statutory action to root out fraud and abuse in the program, while 
ensuring that the seniors who truly need home care receive it. I 
strongly encourage my colleagues to join me in this effort by 
cosponsoring the Medicare Venipuncture Assessment Act of 1998.
                                 ______
                                 
      By Mr. LUGAR (for himself, Mr. Harkin, Mr. McConnell and Mr. 
        Leahy):

  S. 1581. A bill to reauthorize child nutrition programs, and for 
other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.


            THE CHILD NUTRITION REAUTHORIZATION ACT OF 1998

  Mr. LUGAR. Mr. President, I rise today to introduce legislation to 
reauthorize those child nutrition provisions expiring in 1998. The 
child nutrition programs have been critically important in helping meet 
the nutritional needs of our children. Although not all child nutrition 
programs need to be reauthorized, this process gives us the opportunity 
to review all programs under the National School Lunch Act and the 
Child Nutrition Act of 1966.
  As an Indianapolis school board member and the city's mayor in the 
late 1960's and early 1970's, I saw firsthand the need to provide 
nutritional assistance to children. Since that time, the child 
nutrition programs have changed in many ways. Today's programs have 
been successful in ensuring that our nation's children have access to 
nutritious foods, providing a critical safety net for children. 
Although the programs may need some fine tuning, the programs have 
ensured that America's school children, in a country of abundance, have 
a chance to eat. This is fundamental and something we must preserve.
  Some of the larger programs that must be reauthorized include: 1) the 
Special Supplemental Nutrition Program for Women, Infants and Children, 
often referred to as the WIC program; 2) State Administrative Expenses, 
a program which provides grants to states to help cover general 
administrative costs associated with child nutrition programs; 3) the 
WIC Farmers' Market program which allows states and tribal 
organizations to offer special WIC vouchers to buy fresh produce; 4) 
the Summer Food Service program which provides reimbursements for meals 
served to children in summer programs operated in lower-income areas; 
and 5) the requirement to use certain funds to purchase commodities to 
maintain commodity assistance for child nutrition programs. In 
addition, there are a few other expiring provisions that must be 
reauthorized. This bill extends all expiring programs through 2003. 
Although it is not necessary to reauthorize the National School Lunch 
and Breakfast Programs, we hope to review and improve those programs 
during this reauthorization process.
  The child nutrition programs continue to successfully feed our 
nation's children to help them prepare for the future. In 1997, 
approximately 89,000 schools enrolling 46 million children participated 
in the National School Lunch program. Although participation in the 
school breakfast program is

[[Page S172]]

not as large as that in the school lunch program, it has continued to 
grow. Since 1994, school breakfast participation has increased about 
13% so that now over 70% of schools operating a school lunch program 
also operate a school breakfast program.
  The WIC program, which provides nutritious foods and other support to 
lower-income infants and children (up to age 5), and pregnant, 
postpartum, and breast-feeding women, has been successful at reducing 
the number of low-birth-weight babies. Its success has led to strong 
support over the years. In 1997, average monthly WIC participation was 
7.4 million persons. In many states, the program has reached the long 
sought after goal of full funding. This year as we reauthorize the 
program, we will look to see if there are ways to make this successful 
program run even better.
  Senators Harkin, McConnell and Leahy have joined with me today to 
introduce this important bill. I wish to stress that this bill is a 
starting point for debate on child nutrition reauthorization. I am sure 
that the Ranking Minority Member of the Committee as well as the 
Chairman and Ranking Minority Member of the subcommittee have 
additional ideas to improve these programs. Nutrition programs in the 
Congress have a long history of bipartisan support and cooperation and 
I am certain that we will continue that tradition. I look forward to 
working with them and other members of the Agriculture Committee, on 
both sides of the aisle, to craft a thoughtful and sensible bill to 
reauthorize the child nutrition programs.
  I ask unanimous consent that the text of the bill be printed in full 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1581

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

               SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Child 
     Nutrition Reauthorization Act of 1998''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

               TITLE I--SCHOOL LUNCH AND RELATED PROGRAMS

Sec. 101. Grants to integrate food and nutrition projects with 
              elementary school curricula.
Sec. 102. Summer food service program for children.
Sec. 103. Commodity distribution program.
Sec. 104. Child and adult care food program.
Sec. 105. Pilot projects.
Sec. 106. Training, technical assistance, and food service management 
              institute.
Sec. 107. Compliance and accountability.
Sec. 108. Information clearinghouse.
Sec. 109. Guidance and grants for accommodating special dietary needs 
              of children with disabilities.

            TITLE II--SCHOOL BREAKFAST AND RELATED PROGRAMS

Sec. 201. State administrative expenses.
Sec. 202. Special supplemental nutrition program for women, infants, 
              and children.
Sec. 203. Nutrition education and training.

               TITLE I--SCHOOL LUNCH AND RELATED PROGRAMS

     SEC. 101. GRANTS TO INTEGRATE FOOD AND NUTRITION PROJECTS 
                   WITH ELEMENTARY SCHOOL CURRICULA.

       Section 12(m) of the National School Lunch Act (42 U.S.C. 
     1760(m)) is amended by striking ``1998'' each place it 
     appears and inserting ``2003''.

     SEC. 102. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

       Section 13(q) of the National School Lunch Act (42 U.S.C. 
     1761(q)) is amended by striking ``1998'' and inserting 
     ``2003''.

     SEC. 103. COMMODITY DISTRIBUTION PROGRAM.

       Section 14(a) of the National School Lunch Act (42 U.S.C. 
     1762a(a)) is amended by striking ``1998'' and inserting 
     ``2003''.

     SEC. 104. CHILD AND ADULT CARE FOOD PROGRAM.

       Section 17 of the National School Lunch Act (42 U.S.C. 
     1766) is amended--
       (1) in subsection (c)(6)(B), by striking ``1997'' and 
     inserting ``2003''; and
       (2) in subsection (p), by striking ``1998'' each place it 
     appears and inserting ``2003''.

     SEC. 105. PILOT PROJECTS.

       Section 18 of the National School Lunch Act (42 U.S.C. 
     1769) is amended--
       (1) in subsection (c), by striking ``1998'' each place it 
     appears and inserting ``2003'';
       (2) in subsection (e)(5), by striking ``and 1998'' and 
     inserting ``through 2003'';
       (3) in subsections (g)(5) and (h)(5), by striking ``1997'' 
     each place it appears and inserting ``2003''; and
       (4) in subsection (i)(8), by striking ``1998'' and 
     inserting ``2003''.

     SEC. 106. TRAINING, TECHNICAL ASSISTANCE, AND FOOD SERVICE 
                   MANAGEMENT INSTITUTE.

       Section 21(e)(1) of the National School Lunch Act (42 
     U.S.C. 1769b-1(e)(1)) is amended by striking ``1998'' and 
     inserting ``2003''.

     SEC. 107. COMPLIANCE AND ACCOUNTABILITY.

       Section 22(d) of the National School Lunch Act (42 U.S.C. 
     1769c(d)) is amended by striking ``1996'' and inserting 
     ``2003''.

     SEC. 108. INFORMATION CLEARINGHOUSE.

       Section 26(d) of the National School Lunch Act (42 U.S.C. 
     1769g(d)) is amended in the first sentence by striking 
     ``fiscal year 1998'' and inserting ``each of fiscal years 
     1998 through 2003''.

     SEC. 109. GUIDANCE AND GRANTS FOR ACCOMMODATING SPECIAL 
                   DIETARY NEEDS OF CHILDREN WITH DISABILITIES.

       Section 27(c)(6) of the National School Lunch Act (42 
     U.S.C. 1769h(c)(6)) is amended by striking ``1998'' and 
     inserting ``2003''.
            TITLE II--SCHOOL BREAKFAST AND RELATED PROGRAMS

     SEC. 201. STATE ADMINISTRATIVE EXPENSES.

       Section 7(g) of the Child Nutrition Act of 1966 (42 U.S.C. 
     1776(g)) is amended by striking ``1998'' and inserting 
     ``2003''.

     SEC. 202. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, 
                   INFANTS, AND CHILDREN.

       Section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 
     1786) is amended in subsections (g)(1), (h)(2)(A), 
     (h)(10)(A), and (m)(9)(A) by striking ``1998'' each place it 
     appears and inserting ``2003''.

     SEC. 203. NUTRITION EDUCATION AND TRAINING.

       Section 19(i)(3) of the Child Nutrition Act of 1966 (42 
     U.S.C. 1788(i)(3)) is amended--
       (1) in the paragraph heading, by striking ``2002'' and 
     inserting ``2003''; and
       (2) in subparagraph (A), by striking ``2002'' and inserting 
     ``2003''.

  Mr. HARKIN. Mr. President, I am pleased to have this opportunity to 
join Chairman Lugar, Senator McConnell and Senator Leahy in introducing 
legislation to reauthorize several programs, primarily relating to 
nutrition assistance for children, whose authorizations are set to end 
this year. These programs are vitally important to our nation, and I 
applaud the introduction of this legislation as a clear demonstration 
of our strong support for them in the Agriculture, Nutrition, and 
Forestry Committee and our commitment to reenacting authorizing 
legislation this year.
  The bill introduced today is a simple extension of expiring 
authorizations, without amendments or modifications, and thus only 
marks the beginning of the legislative process. As Chairman Lugar has 
indicated, the Committee will complete the normal child nutrition 
reauthorization process, as in past years, allowing for full discussion 
and consideration of the programs requiring reauthorization as well as 
those having permanent authorizations. I look forward to working with 
colleagues on the Committee, in this body, and in the House of 
Representatives on this very important legislation.
  An essential part of our work on this reauthorization bill involves 
examining the child nutrition programs to ensure they are functioning 
well, particularly in responding to changing circumstances and new 
demands. Another, no less important, part of our efforts must focus on 
making the programs more effective by finding better ways to address 
longstanding unmet needs and reach individuals who are not adequately 
served by the programs in their present form. Of course, we must always 
be alert to opportunities for streamlining, paring paperwork and 
reducing administrative burdens. A number of thoughtful proposals for 
improvements and modifications have already been made, and I know that 
we will receive more of them as work on the legislation proceeds.
  All of the programs involved in this reauthorization are important, 
but I want to mention specifically a few of my priorities. We should 
strengthen the school breakfast program in order to reach students who 
need school breakfasts but do not currently have access to them. We 
also should improve the child nutrition programs in ways that enhance 
their effectiveness in helping families obtain quality child care. And 
we need to ensure that the summer food program is adequately serving 
kids who without it are quite vulnerable once school is out for the 
summer. In addition to reauthorizing the Iowa and Kentucky child care 
nutrition pilot project, we ought to examine its positive results for 
guidance in shaping our national approach to child care nutrition 
assistance. With respect to the Special Supplemental Nutrition Program 
for Women, Infants, and Children, it is important to continue an 
effective competitive bidding system for

[[Page S173]]

infant formula and to extend and strengthen the WIC farmers market 
program.
  Nothing is more important to the future of our nation than its 
children, and nothing is more important to children than the sound 
nutrition they need each day. It is beyond dispute that good nutrition 
is critical to physical growth, intellectual development and lives that 
are healthy, productive and happy. Trying to educate children who are 
hungry or malnourished is just as foolish as trying to build a house on 
a crumbling foundation. Federal child nutrition programs constitute 
investments in the future--of our children and our nation. This 
legislation will ensure that we continue to reap the immeasurable 
dividends of those wise investments.
  Mr. McCONNELL. Mr. President, I rise in strong support of the Child 
Nutrition Reauthorization Act of 1998 being introduced today by the 
Chairman of the Agriculture, Nutrition and Forestry Committee, Senator 
Lugar; Ranking Member Harkin; and Ranking Member Leahy, of the 
Research, Nutrition, and General Legislation and myself as Chairman of 
that Subcommittee.
  In the past, nutrition programs under the jurisdiction of the 
Agriculture Committee have been fashioned in a bipartisan manner. 
Today's introduction of legislation to reauthorize those child 
nutrition programs expiring in 1998, is a starting point.
  Our Child Nutrition Programs have played an essential role in 
promoting the long-term health of our children. These programs provide 
a vital link between diet and health, ensuring that our children have 
access to nutritious food.
  Mr. President, Chairman Lugar has described the programs that must be 
reauthorized and the critical importance these programs serve in 
providing a safety net for children. While, I agree that these programs 
must be reauthorized, we must not overlook the opportunity to review 
the existing structure of these programs, review priorities, and 
determine if improvements and streamlining can enhance their 
effectiveness.
  One area of particular interest to me is a provision expiring under 
the National School Lunch Act which required a two state pilot project 
for for-profit day care centers in the Child and Adult Care Food 
Program. The two states were Kentucky and Iowa. In Kentucky, 242 for-
profit child care centers participate in the demonstration project, 
providing meals to over 10,500 children each day.
  Many of these child centers are in rural areas or in lower income 
municipalities. Without the demonstration project, fees would increase 
placing a greater financial burden on parents and some smaller centers 
may be forced to close. This demonstration project provides needed 
nutritional assistance to financially disadvantaged children. I believe 
that continued operation and possible expansion of this type of 
demonstration project is essential as we consider policies to help 
working families with children.
  I am sure Members will have many ideas and changes to improve these 
programs.
  Mr. President, everyone agrees how critical good nutrition is to our 
children's ability to learn. This reauthorization represents our 
opportunity to work together to craft a thoughtful bill that will be 
the building block to our children's successful learning so they can 
have a healthy and productive future.
  Mr. LEAHY. Mr. President, I am pleased to join with my colleagues on 
the Agriculture, Nutrition, and Forestry Committee, as I have done many 
times before on nutrition issues, to introduce a bill that begins the 
child nutrition reauthorization process.
  For many years on the Committee, when I was Chairman, and later 
Ranking Member, we always tried to make our nutrition efforts consensus 
bills--agreed to by all members of the Committee. Now as Ranking Member 
of the nutrition subcommittee I look forward to working with the 
Committee to report out a strong child nutrition reauthorization bill.
  The bill I cosponsor today extends existing programs but does not 
include improvements which I will discuss with other Committee members 
and the Secretary in the near future.
  Last November, I introduced the ``Child Nutrition Initiatives Act'' 
which contained a number of changes that I will discuss with my 
colleagues. That was not a reauthorization bill but rather an effort 
that I hope will be carefully looked at by my colleagues in the Senate 
and in the House.
  I intend to meet with representatives of the various nutrition 
programs as I work with other Members to help craft a good bill. I look 
forward to meeting with Under Secretary Shirley Watkins who has a 
number a great ideas to improve our child nutrition programs. In 
addition, I will carefully review Senator Johnson's school breakfast 
bill which has been strongly endorsed by many groups at that national 
and local level.
  I will also gain input from Vermont nutrition leaders, Vermont 
program directors, community leaders and program participants.
  My November 13 statement explains the basis for my bill--I am hopeful 
that many of those provisions will be supported by the Committee and 
the Senate as a whole.
                                 ______
                                 
      By Mr. ROBB:

  S. 1582. A bill to provide market transition assistance for quota 
holders, active tobacco producers, and tobacco-growing counties, to 
authorize a private Tobacco Production Control Corporation and tobacco 
loan associations to control the production and marketing and ensure 
the quality of tobacco in the United States, and for other purposes; to 
the Committee on Agriculture, Nutrition, and Forestry.


                   THE TOBACCO MARKET TRANSITION ACT

  Mr. ROBB. Mr. President, on behalf of many tobacco growers with whom 
I have worked, I rise today to introduce the Tobacco Market Transition 
Act. The comprehensive tobacco settlement announced on June 20 of last 
year simply did not include provisions for tobacco growers. This 
provision is designed to fill that void.
  This legislation is truly the result of a grassroots effort and 
elaborates the concepts I discussed in the Chamber on November 3. 
Tobacco-dependent regions realize that their lives will be directly 
affected by comprehensive tobacco legislation and they want to prepare 
for that future.
  Key members of my staff and I have worked with tobacco growers, 
leaders in tobacco growing communities and members of the public health 
community to develop legislation which will provide a soft landing to 
those regions that have so long depended on the production of tobacco.
  In short, because Government action is about to erode the value of 
quota, there would be a buyout of existing quota at $8 a pound. A 
privatized tobacco program limiting supply would be reinstituted, 
providing growers with a license to grow tobacco based on historical 
average production for that grower. To provide long-term economic 
security in tobacco communities, $250 million will be provided annually 
for economic development. Finally, a transition payment would be 
offered to growers as the system changes from its present form to a new 
one.
  Tobacco quota, Mr. President, represents the amount of tobacco 
allowed to be produced domestically. Over the years, individuals have 
accumulated the right to grow a certain proportion of that total quota. 
This individual quota, this right to produce, has liquid value that can 
be bought or sold or leased. Many have acquired quota over the years 
and planned to retire or in some cases have retired on the funds 
received from selling or leasing quota. When the Government depresses 
demand for tobacco, it depresses the value of that asset.
  The legislation I am introducing recognizes the value of that quota 
asset by paying quota holders $8 a pound for the quota they own over 5 
years. Once the quota holder has been made whole, a new supply-limiting 
program would be instituted giving licenses to grow tobacco to actual 
producers of tobacco. Unlike the present system, those licenses would 
not cost money to acquire. Eliminating the crushing cost of quota, 
which adds 40 cents a pound to the cost of producing flue-cured 
tobacco, will allow these growers to become more competitive even as 
demand declines in the United States as a result of any comprehensive 
bill that we pass. By becoming more competitive with imported tobacco, 
U.S. growers could keep the demand for their

[[Page S174]]

product from declining as steeply as demand for cigarettes and other 
finished products if we pass comprehensive legislation.
  The legislation also provides a transition payment for existing 
tobacco producers as we move into the new system and provides $250 
million annually to tobacco-growing communities for economic 
development. These economic development funds can be used for local 
communities to improve education, enhance transportation, promote small 
business incubators or develop high technology infrastructure. In 
short, these economic development funds will help keep these 
communities from exporting their most valuable asset, and that is their 
children.
  Finally, this proposal recognizes the benefits of a supply-limiting 
program for tobacco. A supply-limiting program is absolutely essential 
to stabilize the income of tobacco farmers and to protect tobacco-
growing communities from the utter destruction that would follow if the 
program is totally eliminated.
  A supply-limiting program is also appropriate in the unique 
circumstance of tobacco. Unlike other commodities where we are trying 
to lower the cost to consumers, pending Federal legislation is designed 
to do just the opposite. Every comprehensive tobacco proposal I have 
seen would increase the cost of tobacco products to lower demand. 
Indeed, the President said last night that he would approve something 
up to $1.50 a pack.
  There has been much healthy discussion in tobacco growing communities 
about whether to retain the current Federal tobacco program or to avoid 
the annual battles that threaten it and privatize the program, allowing 
growers and others to operate it.
  This is an important debate. The Federal program has served tobacco-
growing communities well for over 60 years, and it is my judgment--and 
the judgment of many, many with whom I have consulted--that it should 
not be dismantled cavalierly.
  The question we face is how best to maintain a supply-limiting 
program that protects tobacco communities. If we could guarantee that 
the Federal program would remain intact for the next 25 years, that may 
be the best way to proceed. But I have detected a great deal of unease 
about whether we can keep the program, and I think many on both sides 
of this issue are growing tired of annual fights which, if we lose, 
will destroy many tobacco-growing regions.
  That is why this legislation contains provisions to privatize the 
tobacco program. For those who have questions about how this program 
will work, I invite them to assist in answering those questions and 
improving this legislation. For those who are nervous about such a 
change, I can say I appreciate their apprehension. It is easier to 
understand the world as it is rather than how it could be. But I 
believe this offers us the best opportunity to retain a supply-limiting 
program over the long term.
  I look forward to working with my colleagues to pass legislation that 
will protect the communities that will be devastated if we fail to act, 
and will, in the words of the President, make growers and their 
communities ``whole.''
  I ask unanimous consent that the full text of the legislation as well 
as the section-by-section summary be printed in the Record following my 
remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1582

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Tobacco 
     Market Transition Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Purposes.

          Title I--Tobacco Community Revitalization Trust Fund

Sec. 101. Tobacco Community Revitalization Trust Fund.

             Title II--Tobacco Market Transition Assistance

Sec. 201. Compensation to quota holders for loss of tobacco quota asset 
              value.
Sec. 202. Transition payments for active tobacco producers.
Sec. 203. Tobacco loan associations.
Sec. 204 Tobacco community economic development grants.
Sec. 205. Tax treatment of compensation and transition payments.

 Title III--Establishment of Private Tobacco Production Adjustment and 
                       Quality Assurance Programs

Sec. 301. Tobacco Production Control Corporation.
Sec. 302. Tobacco loan associations.
Sec. 303. Tobacco price support levels.
Sec. 304. Penalties.
Sec. 305. Referenda.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Active tobacco producer.--The term ``active tobacco 
     producer'' means a person that--
       (A) is the actual producer, as determined by the Secretary, 
     of tobacco on a farm where tobacco is produced pursuant to a 
     tobacco farm marketing quota or farm acreage allotment 
     established under the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1281 et seq.) for the 1997 crop year; and
       (B) planted the crop, or is considered to have planted the 
     crop under that Act, in 1997.
       (2) Quota holder.--The term ``quota holder'' means an owner 
     of a farm on January 1, 1998 for which a tobacco farm 
     marketing quota or farm acreage allotment was established 
     under the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 
     et seq.).
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (4) Tobacco loan association.--The term ``Association'' 
     means a producer-owned cooperative marketing association.
       (5) Tobacco production control corporation.--The term 
     ``Corporation'' means the Tobacco Production Control 
     Corporation established by section 301.
       (6) Trust fund.--The term ``Trust Fund'' means the Tobacco 
     Community Revitalization Trust Fund established by section 
     101.

     SEC. 3. PURPOSES.

       It is the purpose of this Act to--
       (1) dismantle the existing federal tobacco program and 
     establish a private program to ensure the stability of the 
     price and supply of domestically produced tobacco;
       (2) compensate quota holders for the value of assets that 
     may be diminished as a result of this legislation;
       (3) provide targeted economic development funds to tobacco 
     dependent communities for the creation of jobs, training of 
     individuals, and long-term economic development of the 
     communities;
       (4) reduce the operating costs of tobacco producers by 
     eliminating expenses associated with buying or leasing 
     tobacco quota; and
       (5) make domestically produced tobacco more competitive 
     with tobacco produced in other countries.

          TITLE I--TOBACCO COMMUNITY REVITALIZATION TRUST FUND

     SEC. 101. TOBACCO COMMUNITY REVITALIZATION TRUST FUND.

       (a) In General.--There is established in the Treasury of 
     the United States a trust fund to be known as the ``Tobacco 
     Community Revitalization Trust Fund'', consisting of such 
     amounts as may be appropriated or credited to the Trust Fund. 
     The Trust Fund shall be administered by the Corporation.
       (b) Transfers to Trust Fund.--There are appropriated and 
     transferred to the Trust Fund, from amounts made available to 
     the Trust Fund out of funds allocated through national 
     tobacco settlement legislation, $3,500,000,000 for each of 
     fiscal years 1999 through 2003 and $265,000,000 for each of 
     fiscal years 2004 through 2023.
       (c) Repayable Advances.--
       (1) Authorization.--There are authorized to be appropriated 
     to the Trust Fund, as repayable advances, such sums as may 
     from time to time be necessary to make expenditures under 
     subsection (d).
       (2) Repayment with interest.--Repayable advances made to 
     the Trust Fund shall be repaid, and interest on the advances 
     shall be paid, to the general fund of the Treasury when the 
     Secretary of the Treasury determines that moneys are 
     available in the Trust Fund to make the payments.
       (3) Rate of interest.--Interest on an advance made under 
     this subsection shall be at a rate determined by the 
     Secretary of Treasury (as of the close of the calendar month 
     preceding the month in which the advance is made) that is 
     equal to the current average market yield on outstanding 
     marketable obligations of the United States with remaining 
     period to maturity comparable to the anticipated period 
     during which the advance will be outstanding.
       (d) Expenditures From Trust Fund.--Amounts in the Trust 
     Fund shall be available for making expenditures to defray--
       (1) the costs of providing compensation to quota holders 
     for the loss of tobacco quota asset value under section 201;
       (2) the costs of making transition payments to active 
     tobacco producers under section 202;
       (3) the costs of forgiving loans and transferring title to 
     inventories of tobacco and funds to Associations under 
     section 203;
       (4) the costs of making tobacco community economic 
     development grants under section 204, but not to exceed 
     $250,000,000 for each of fiscal years 1999 through 2003 and 
     an amount

[[Page S175]]

     determined by the Corporation to be appropriate for each of 
     fiscal years 2004 through 2023;
       (5) the costs of carrying out the duties of the Corporation 
     and the Associations, including assuring the quality and 
     controlling the production and marketing of domestic tobacco 
     and otherwise carrying out title III;
       (6) the costs to the Secretary of enforcing title III;
       (7) the costs of providing crop insurance to tobacco 
     producers; and
       (8) any other costs incurred by the Department of 
     Agriculture associated with tobacco.

             TITLE II--TOBACCO MARKET TRANSITION ASSISTANCE

     SEC. 201. COMPENSATION TO QUOTA HOLDERS FOR LOSS OF TOBACCO 
                   QUOTA ASSET VALUE.

       (a) In General.--The Corporation shall make payments for 
     tobacco quota to eligible quota holders.
       (b) Eligibility.--To be eligible to receive payments under 
     this section, a quota holder shall prepare and submit to the 
     Corporation an application at such time, in such manner, and 
     containing such information as the Corporation may require, 
     including information sufficient to demonstrate to the 
     satisfaction of the Corporation that the person was a quota 
     holder on January 1, 1998.
       (c) Base Quota Level.--
       (1) In general.--The Secretary shall determine, for each 
     quota holder, the base quota level for the 1995 through 1997 
     marketing years.
       (2) Level.--The base quota level for a quota holder shall 
     be equal to the average tobacco farm marketing quota 
     established for the 1995 through 1997 marketing years for the 
     farm owned by the quota holder on January 1, 1998.
       (3) Marketing quotas other than poundage quotas.--For each 
     kind of tobacco for which there is a marketing quota or 
     allotment (on an acreage basis), the base quota level for 
     each quota holder shall be determined in accordance with this 
     subsection (based on a poundage conversion) in an amount 
     equal to the product obtained by multiplying--
       (A) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; by
       (B) the average county yield per acre for the county in 
     which the farm is located for the kind of tobacco for the 
     marketing years.
       (d) Payments.--The Corporation shall make payments to each 
     quota holder that is eligible under subsection (b) in 5 equal 
     installments, 1 for each of the 1999 through 2003 crops of 
     tobacco, in an aggregate amount that is equal to the product 
     obtained by multiplying--
       (1) $8 per pound; by
       (2) the base quota level established for the quota holder 
     under subsection (c).

     SEC. 202. TRANSITION PAYMENTS FOR ACTIVE TOBACCO PRODUCERS.

       (a) In General.--The Corporation shall make transition 
     payments to eligible active tobacco producers.
       (b) Eligibility.--To be eligible to receive payments under 
     this section, an active tobacco producer shall--
       (1) prepare and submit to the Corporation an application at 
     such time, in such manner, and containing such information as 
     the Corporation may require, including information sufficient 
     to make the demonstration required under paragraph (2); and
       (2) demonstrate to the satisfaction of the Corporation 
     that, the person planted, or is considered to have planted, a 
     1997 crop of tobacco.
       (c) Payment Quantity.--
       (1) In general.--The Secretary shall determine and provide 
     to the Corporation, for each active tobacco producer, the 
     production quantity eligible for payment for the 1995 through 
     1997 marketing years.
       (2) Eligible production quantity.--The production quantity 
     eligible for payment for an active tobacco producer shall be 
     equal to the average number of pounds of tobacco quota 
     established for a farm for the 1995 through 1997 marketing 
     years for which the producer was the actual producer of the 
     tobacco on the farm.
       (3) Marketing quotas other than poundage quotas.--For each 
     kind of tobacco for which there is a marketing quota or 
     allotment (on an acreage basis), the production quantity 
     eligible for payment for each active tobacco producer 
     shall be determined in accordance with this subsection 
     (based on a poundage conversion) in an amount equal to the 
     product obtained by multiplying--
       (A) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; by
       (B) the average county yield per acre for the county in 
     which the farm is located for the kind of tobacco for the 
     marketing years.
       (d) Payments.--The Corporation shall make payments for each 
     of the 1999 through 2003 crops of tobacco to each active 
     tobacco producer that is eligible under subsection (b) in an 
     amount that is equal to the product obtained by multiplying--
       (1) $0.40 per pound; by
       (2) the payment quantity established for the producer under 
     subsection (c).
       (e) Death of Active Tobacco Producer.--If an active tobacco 
     producer who is entitled to payments under this section dies 
     and is survived by a spouse or 1 or more dependents, the 
     right to receive the payments shall transfer to the surviving 
     spouse of, if there is no surviving spouse, to the estate of 
     the producer.

     SEC. 203. TOBACCO LOAN ASSOCIATIONS.

       (a) Prior Loans.--The Secretary shall forgive each loan 
     made to an Association under section 106A or 106B of the 
     Agricultural Act of 1949 (7 U.S.C. 1445 1, 1445 2) that is 
     outstanding on the date of enactment of this Act.
       (b) Transfer of Title for Loan Inventories.--The Secretary 
     shall transfer to each Association described in subsection 
     (a) the title to all inventories of tobacco held by the 
     Secretary to secure loans made to the Association under 
     section 106A or 106B of the Agricultural Act of 1949 (7 
     U.S.C. 1445 1, 1445 2).
       (c) No Net Cost Tobacco Funds.--Notwithstanding sections 
     106A(f) and 106b(g) of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1(f) and 1445-2(g)), all funds held in a No Net Cost 
     Tobacco Fund or No Net Cost Tobacco Account on behalf of an 
     Association under section 106A or 106B of that Act (1445-1, 
     1445-2) on the date of enactment of this Act shall be the 
     property of the Association.

     SEC. 204. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.

       (a) Authority.--The Corporation shall make grants to 
     eligible tobacco-growing political subdivisions in accordance 
     with this section to enable the political subdivisions to 
     carry out economic development activities.
       (b) Eligibility.--To be eligible to receive payments under 
     this section, a political subdivisions in a State shall--
       (1) have in excess of $100,000 in gross income from sales 
     of tobacco produced within the political subdivision during 1 
     or more of the 1995 and 1997 marketing years, as determined 
     by the Corporation;
       (2) prepare and submit to the Corporation an application at 
     such time, in such manner, and containing such information as 
     the Corporation may require, including--
       (A) a description of the activities that the political 
     subdivision will carry out using amounts received under the 
     grant;
       (B) a designation of an appropriate political subdivision 
     agency to administer amounts received under the grant;
       (C) a description of the steps to be taken to ensure that 
     the funds are distributed in accordance with subsection (e); 
     and
       (D) an economic development plan, approved by a regional 
     authority authorized to coordinate economic development 
     efforts in the region where the political subdivision is 
     located, or approved by the State if no such regional 
     authority exists, that described the activities that the 
     political subdivision will carry out using amounts received 
     under the grant. Where a political subdivision ineligible to 
     receive payments under subsection (b)(1) is surrounded within 
     the State by a political subdivision eligible to receive 
     payments under subsection (b)(1), an economic development 
     plan shall not be approved unless submitted jointly by 
     both jurisdictions.
       (c) Amount of Grant.--
       (1) In general.--From the amounts available to carry out 
     this section for a fiscal year, the Corporation shall allot 
     to each eligible tobacco-growing political subdivision an 
     amount that bears the same ratio to the total funds available 
     as the total income of the tobacco-growing political 
     subdivision derived from the production of tobacco within the 
     political subdivision during the 1995 through 1997 marketing 
     years (as determined under paragraph (2)) bears to the total 
     income of all tobacco-growing political subdivisions derived 
     from the production of tobacco during the 1995 through 1997 
     marketing years.
       (2) Tobacco income.--For the 1995 through 1997 marketing 
     years, the Secretary shall determine and provide to the 
     Corporation the amount of income derived from the production 
     of tobacco in each tobacco-growing political subdivision and 
     in all tobacco-growing political subdivisions.
       (d) Payments.--
       (1) In general.--A tobacco-growing political subdivision 
     that has an application approved by the Corporation under 
     subsection (b) shall be entitled to a payment under this 
     section in an amount that is equal to its allotment under 
     subsection (c).
       (2) Form of payments.--The Corporation may make payments 
     under this section to a tobacco-growing political subdivision 
     in installments, and in advance or by way of reimbursement, 
     with necessary adjustments on account of overpayments or 
     underpayments, as the Corporation may determine.
       (3) Reallotments.--Any portion of the allotment of a 
     political subdivision under subsection (c) that the 
     Corporation determines will not be used to carry out this 
     section in accordance with an approved political subdivision 
     application required under subsection (b), shall be 
     reallotted by the Corporation to other tobacco-growing 
     political subdivisions in proportion to the original 
     allotments to the other tobacco-growing political 
     subdivisions.
       (e) Use and Distribution of Funds.--
       (1) In general.--Amounts received by a tobacco-growing 
     political subdivision under this section shall be used to 
     carry out economic development activities, including--
       (A) activities designed to help create productive farm or 
     off-farm employment in rural areas to provide a more viable 
     economic base and enhance opportunities for improved incomes, 
     living standards, and contributions by rural individuals to 
     the economic and social development of tobacco communities;
       (B) activities designed to provide training and transition 
     assistance to quota holders and active tobacco producers to 
     enable the holders and producers to produce alternative 
     agricultural commodities or obtain alternative employment;

[[Page S176]]

       (C) activities to improve the quality of education in 
     tobacco communities;
       (D) activities to promote tourism in tobacco communities 
     through natural resource protection;
       (E) activities to construct advanced manufacturing centers, 
     industrial parks, water and sewer facilities, and 
     transportation improvements in tobacco communities;
       (F) activities to establish small business incubators in 
     tobacco communities;
       (G) activities to install high technology infrastructure 
     improvement in tobacco communities;
       (H) rural business enterprise activities described in 
     subsections (c) and (e) of section 310B of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1932);
       (I) down payment loan assistance programs that are similar 
     to the program described in section 310E of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1935);
       (J) activities that expand existing infrastructure, 
     facilities, and services to capitalize on opportunities to 
     diversify economies in tobacco communities and that support 
     the development of new industries or commercial ventures;
       (K) activities by agricultural organizations that provide 
     assistance directly to quota holders and active tobacco 
     producers to assist in developing other agricultural 
     activities that supplement tobacco-producing activities;
       (L) initiatives designed to create or expand locally owned 
     value-added processing and marketing operations in tobacco 
     communities; and
       (M) technical assistance activities by persons to support 
     farmer-owned enterprises, or agriculture-based rural 
     development enterprises, of the type described in section 252 
     or 253 of the Trade Act of 1974 (19 U.S.C. 2342, 2343).
       (2) Maintenance of effort.--The political subdivision and 
     the State shall provide assurances to the Corporation that 
     funds provided to the political subdivision under this 
     section will be used only to supplement, not to supplant, the 
     amount of Federal, State, and local funds otherwise expended 
     for economic development activities in the political 
     subdivision.

     SEC. 205. TAX TREATMENT OF TOBACCO QUOTA HOLDER COMPENSATION 
                   AND TRANSITION PAYMENTS.

       (a) In General.--Part II of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to items 
     specifically included in gross income) is amended by adding 
     at the end the following:

     ``SEC. 91. CERTAIN TOBACCO PROGRAM PAYMENTS.

       ``(a) General Rule.--Gross income includes amounts received 
     under section 201 or 202 of the Tobacco Market Transition 
     Act.
       ``(b) Exception for Amounts Transferred During Reinvestment 
     Period.--
       ``(1) In general.--Subsection (a) shall not apply to any 
     amount if during reinvestment period such amount is--
       ``(A) used to make a qualified debt repayment, or
       ``(B) transferred to a tobacco farmer individual retirement 
     account established under section 522.
       ``(2) Qualified debt repayment.--For purposes of paragraph 
     (1), the term `qualified debt repayment' means the payment of 
     debt incurred directly by the taxpayer to produce tobacco 
     prior to January 1, 1998.
       ``(c) Character of Income.--For purposes of this subtitle--
       ``(1) any amount received under section 201 of the Tobacco 
     Market Assistance Act and included in gross income under this 
     section shall be treated as long-term capital gain, and
       ``(2) any amount received under section 202 of such Act and 
     so included in gross income shall be treated as ordinary 
     income.''.
       (b) Tobacco Farmer Individual Retirement Accounts.--Part IV 
     of subchapter F of chapter 1 of the Internal Revenue Code of 
     1986 (relating to farmers' cooperatives) is amended by adding 
     at the end the following:

     ``SEC. 522. TOBACCO FARMER INDIVIDUAL RETIREMENT ACCOUNTS.

       ``(a) General Rule.--Except as provided in this section, a 
     tobacco farmer individual retirement account shall be treated 
     for purposes of this title in the same manner as an 
     individual retirement plan.
       ``(b) Definitions and Special Rules.--For purposes of this 
     title--
       ``(1) Tobacco farmer individual retirement account.--The 
     term `tobacco farmer individual retirement account' means an 
     individual retirement plan (as defined in section 
     7701(a)(37)) other than a Roth IRA which is designated (in 
     such manner as the Corporation may prescribe) at the time of 
     establishment of the plan as a tobacco farmer individual 
     retirement account.
       ``(2) Treatment of contributions.--
       ``(A) Cash only.--No contribution will be accepted unless 
     it is in cash.
       ``(B) Source of contributions.--The only contributions 
     which will be accepted are--
       ``(i) payments under section 201 or 202 of the Tobacco 
     Market Transition Act, and
       (ii) trustee-to-trustee transfers to such trust from 
     another tobacco farmer individual retirement account of the 
     account beneficiary.
       ``(C) No deduction allowed.--No deduction shall be allowed 
     under section 219 for a contribution to a tobacco farmer 
     individual retirement account.
       ``(D) No rollover contributions allowed.--No rollover 
     contribution may be made to or from a tobacco farmer 
     individual retirement account.
       ``(3) Tax treatment of distributions.--Any amount 
     distributed from a tobacco farmer individual retirement 
     account attributable to payments made under section 201 or 
     202 of the Tobacco Market Transition Act (including earnings 
     thereon) shall be includible in the gross income of the 
     distributee under the rules described in section 91(c). Any 
     such distribution shall be made first from amounts in such 
     account (if any) attributable to payments under such section 
     202 (and earnings thereon).
       ``(4) Coordination with individual retirement accounts.--
     Section 408(d)(2) shall be applied separately with respect to 
     tobacco farmer individual retirement accounts and other 
     individual retirement plans.''.
       ``(c) Conforming Amendments.--
       (1) The table of sections for part II of subchapter B of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following: ``Sec. 91. Certain tobacco 
     program payments.''.
       (2) The table of sections for part IV of subchapter 1 of 
     such Code is amended by adding at the end the following: 
     ``Sec. 522. Tobacco farmer individual retirement accounts.''.
       (3) The heading for part IV of subchapter F of chapter 1 of 
     such code is amended by striking

     ``FARMERS' COOPERATIVES'' and inserting ``CERTAIN FARMER 
     ENTITIES''.
       (4) The table of parts for subchapter F of chapter 1 of 
     such Code is amended by striking ``Farmers' cooperatives'' 
     and inserting ``Certain farmer entities''. Effective Date.--
     The amendments made by this section shall apply to taxable 
     years beginning after December 31, 1997.

 TITLE III--ESTABLISHMENT OF PRIVATE TOBACCO PRODUCTION ADJUSTMENT AND 
                       QUALITY ASSURANCE PROGRAM

     SEC. 301. TOBACCO PRODUCTION CONTROL CORPORATION.

       (a) Establishment.--There is established a corporation to 
     be known as the ``Tobacco Production Control Corporation'', 
     which shall be a federally chartered instrumentality of the 
     United States.
       (b) Duties.--Effective for the 1999 and each subsequent 
     crop of each kind of tobacco, on at least a \2/3\-vote of the 
     Board of Directors of the Corporation, the Corporation 
     shall--
       (1) promulgate rules that govern the production, marketing, 
     importation, exportation, and consumer quality assurances for 
     each kind of tobacco;
       (2) establish a licensing system that provides for the 
     orderly production and marketing of tobacco in the United 
     States under which--
       (A) the Corporation shall issue a license to each active 
     tobacco producer, or other person that meets requirements 
     established by the Corporation, initially based upon the 
     eligible production quantity determined for each producer 
     under section 202(c)(1);
       (B) the licensee shall surrender the license to the 
     Corporation if the licensee fails to actively engage in the 
     production of tobacco;
       (C) the sale or marketing of a type of tobacco which prior 
     to the date of enactment was produced pursuant to a tobacco 
     farm marketing quota or farm acreage allotment issued under 
     the Agricultural Act of 1938 is prohibited without a license;
       (D) the sale, lease, or other transfer of a license shall 
     be prohibited except pursuant to subsection (c); and
       (E) the Corporation shall issue marketing licenses to 
     tobacco marketing facilities and tobacco purchasing entities;
       (3) ensure compliance, through whatever means is available, 
     of all persons with any license, regulation, rule, 
     limitation, or guideline issued under, or in order to carry 
     out, this Act;
       (3) offer crop insurance for tobacco producers;
       (4) establish a system that will provide assurance to 
     consumers of the quality of all tobacco marketed in the 
     United States and that, at a minimum--
       (A) provides for the inspection and grading of domestically 
     produced tobacco and imported tobacco;
       (B) determines and describes the physical characteristics 
     of domestically produced tobacco and imported tobacco;
       (C) ensures the physical and chemical integrity of 
     domestically produced tobacco and imported tobacco;
       (5) carry out its duties, functions, and determinations 
     through loan associations and local committees, to the extent 
     practicable and appropriate, and
       (6) continue to maintain and carry out a tobacco program in 
     accordance with the rules and regulations contained in 
     Chapter 7 of the C.F.R. unless and until rules are 
     promulgated under subsection (c).
       (c) Transfer of License.--
       (1) Right of survivorship.--
       (A) In general.--In the case of the death of a person to 
     whom a license has been issued under this section, the 
     license shall transfer to the surviving spouse of the person 
     or, if there is no surviving spouse, to surviving direct 
     descendants of the persons.
       (B) Hardship.--In the case of the death of a person to whom 
     a license has been issued under this section and whose 
     descendants are temporarily unable to produce a crop of 
     tobacco, the Corporation may hold the license in the name of 
     the descendants for a period of not more than 18 months, at 
     the discretion of the Corporation.

[[Page S177]]

       (2) Lifetime transfer.--A person that is eligible to obtain 
     a license under this section may at any time transfer all or 
     part of the license to the person's spouse or direct 
     descendants that are actively engaged in the production of 
     tobacco.
       (d) Board of Directors.--
       (1) In general.--The powers of the Corporation shall be 
     vested in a Board of Directors.
       (2) Members.--The Board of Directors shall consist of 25 
     members as follows:
       (A) The Secretary of Agriculture.
       (B) The Secretary of Health and Human Services.
       (C) The Administrator of the Environmental Protection 
     Agency.
       (D) The United States Trade Representative.
       (E) 1 member from each state that produces more than 
     50,000,000 pounds of tobacco. All members appointed under 
     this subparagraph shall be actively engaged in the production 
     of tobacco and shall be elected by the tobacco producers from 
     each respective state.
       (F) 3 members appointed by the flue-cured tobacco 
     association and 2 members appointed by the burley tobacco 
     associations, all such members to be licensees under this 
     Act.
       (G) 1 member appointed by tobacco associations other than 
     those specified in subparagraph (F), on a rotating basis.
       (H) 3 members representing public health interests, 
     appointed by the Secretary of Health and Human Services.
       (I) 1 member representing domestic cigarette manufacturers.
       (J) 1 member representing domestic export leaf dealers, 
     appointed by the Leaf Tobacco Exporters Association (LTEA).
       (K) 2 members representing tobacco marketing facilities, 1 
     each appointed by the Bright Belt Warehouse Association 
     (BBWA) and the Burley Auction Warehouse Association (BAWA).
       (L) 1 member that is the person responsible for operating 
     the quality assurance system of the Corporation described in 
     subsection (b)(4).
       (M) 1 member who is a Dean of Agriculture of a Land Grant 
     University from a tobacco producing state.
       (3) Membership qualifications.--A member of the Board shall 
     not hold any Federal, State, or local elected office.
       (4) Chairpersons.--The Secretary of Agriculture shall serve 
     as chairperson of the Board.
       (5) Executive director.--
       (A) Appointment.--The Board shall appoint an Executive 
     Director.
       (B) Duties.--The Executive Director shall be the chief 
     executive officer of the Corporation, with such power and 
     authority as may be conferred by the Board.
       (C) Compensation.--The Executive Director shall receive 
     basic pay at the rate provided for level IV of the Executive 
     Schedule under section 5315 of title 5, United States Code.
       (6) Officers.--The Board shall establish the offices and 
     appoint the officers of the Corporation, including a 
     Secretary, and define the duties of the officers in a manner 
     consistent with this section.
       (7) Meetings.--
       (A) In general.--The Board shall meet at least 3 times each 
     fiscal year at the call of a Chairperson or at the request of 
     the Executive Director.
       (B) Location.--The location of a meeting shall be subject 
     to approval of the Executive Director.
       (C) Quorum.--A quorum of the Board shall consist of a 
     majority of the members.
       (8) Term; vacancies.--
       (A) Term.--The term of office of a member of the Board 
     appointed under any of subparagraphs (E) through (K) of 
     paragraph (2) shall be 4 years.
       (B) Vacancies.--A vacancy on the Board shall be filled in 
     the same manner as the original appointment was made.
       (9) Compensation.--
       (A) Federal members.--A member of the Board who is an 
     officer or employee of the United States shall not receive 
     any additional compensation by reason of service on the 
     Board.
       (B) Non-federal members.--Any other member shall receive 
     compensation, for each day (including travel time) that the 
     member is engaged in the performance of the functions of the 
     Board, at a rate determined appropriate by the Board.
       (C) Expenses.--A member of the Board shall be reimbursed 
     for travel, subsistence, and other necessary expenses 
     incurred by the member in the performance of the duties of 
     the member.
       (10) Conflict of interest; financial disclosure.--
       (A) Conflict of interest.--Except as provided in 
     subparagraph (C), a member of the Board shall not vote on any 
     matter concerning any application, contract, or claim, or 
     other particular matter pending before the Corporation, in 
     which, to the knowledge of the member, the member, spouse, or 
     child of the member, partner of the member, or organization 
     in which the member is serving as officer, director, trustee, 
     partner, or employee, or any person or organization with 
     which the member is negotiating or has any arrangement 
     concerning prospective employment, has a financial interest.
       (B) Violations.--Violation of subparagraph (A) by a member 
     of the Board shall be cause for removal of the member, but 
     shall not impair or otherwise affect the validity of any 
     otherwise lawful action by the Corporation in which the 
     member participated.
       (C) Exceptions.--The prohibitions contained in subparagraph 
     (A) shall not apply to a member of the Board that is a 
     tobacco producer if the member advises the Board of the 
     nature of the particular matter in which the member proposes 
     to participate, and if the member makes a full disclosure of 
     the financial interest, prior to any participation.
       (D) Financial disclosure.--A Board member shall be subject 
     to the financial disclosure requirements of subchapter B of 
     chapter XVI of title 5, Code of Federal Regulations (or any 
     corresponding or similar regulation or ruling), applicable to 
     a special Government employee (as defined in section 202(a) 
     of title 18, United States Code).
       (E) Representation.--No member of the Board shall receive 
     compensation from more than one interest represented on the 
     Board.
       (11) Bylaws.--The Board shall adopt, and may from time to 
     time amend, any bylaw that is necessary for the proper 
     management and functioning of the Corporation.
       (12) Personnel.--The Corporation may select and appoint 
     officers, attorneys, employees, and agents, who shall be 
     vested with such powers and duties as the Corporation may 
     determine.
       (e) General Powers.--In addition to any other powers 
     granted to the Corporation under this title, the 
     Corporation--
       (1) shall have succession in its corporate name;
       (2) may adopt, alter, and rescind any bylaw and adopt and 
     alter a corporate seal, which shall be judicially noticed;
       (3) may enter into any agreement or contract with a person 
     or private or governmental agency;
       (4) may lease, purchase, accept a gift or donation of, or 
     otherwise acquire, use, own, hold, improve, or otherwise deal 
     in or with, and sell, convey, mortgage, pledge, lease, 
     exchange, or otherwise dispose of, any property or interest 
     in property, as the Corporation considers necessary in the 
     transaction of the business of the Corporation;
       (5) may sue and be sued in the corporate name of the 
     Corporation, except that--
       (A) no attachment, injunction, garnishment, or similar 
     process shall be issued against the Corporation or property 
     of the Corporation; and
       (B) exclusive original jurisdiction shall reside in the 
     district courts of the United States, and the Corporation may 
     intervene in any court in any suit, action, or proceeding in 
     which the Corporation has an interest;
       (6) may independently retain legal representation;
       (7) may provide for and designate such committees, and the 
     functions of the committees, as the Board considers necessary 
     or desirable;
       (8) may indemnify officers of the Corporation, as the Board 
     considers necessary and desirable, except that the officers 
     shall not be indemnified for an act outside the scope of 
     employment;
       (9) may, with the consent of any board, commission, 
     independent establishment, or executive department of the 
     Federal Government, including any field service, use 
     information, services, facilities, officials, and employees 
     in carrying out this section, and pay for the use, which 
     payments shall be transferred to the applicable appropriation 
     account that incurred the expense;
        (10) may obtain the services and fix the compensation of 
     any consultant and otherwise procure temporary and 
     intermittent services under section 3109(b) of title 5, 
     United States Code;
       (11) shall have the rights, privileges, and immunities of 
     the United States with respect to the right to priority of 
     payment with respect to debts due from bankrupt, insolvent, 
     or deceased creditors;
       (12) may collect or compromise any obligations assigned to 
     or held by the Corporation, including any legal or equitable 
     rights accruing to the Corporation;
       (13) shall determine the character of, and necessity for, 
     obligations and expenditures of the Corporation and the 
     manner in which the obligations and expenditures shall be 
     incurred, allowed, and paid, subject to provisions of law 
     specifically applicable to Government corporations;
       (14) may make final and conclusive settlement and 
     adjustment of any claim by or against the Corporation or a 
     fiscal officer of the Corporation;
       (15) may sell assets, loans, and equity interests acquired 
     in connection with the financing of projects funded by the 
     Corporation; and
       (16) may exercise all other lawful powers necessarily or 
     reasonably related to the establishment of the Corporation to 
     carry out this title and the powers, purposes, functions, 
     duties, and authorized activities of the Corporation.

     SEC. 302. TOBACCO LOAN ASSOCIATIONS.

       The Corporation shall enter into an agreement with 
     producer-owned cooperative marketing loan associations for 
     each kind of tobacco to--
       (1) make price support available to producers of the kind 
     of tobacco;
       (2) carry out the licensing system established under 
     subsection (b)(2);
       (3) arrange for financing and the administration of price 
     supports for the kind of tobacco; and
       (4) receive, process, store, and sell any domestically 
     produced tobacco received as collateral for a price support 
     loan.

     SEC. 303. TOBACCO PRICE SUPPORT LEVELS.

       (a) Initial Level.--Effective for the 1999 crop of each 
     kind of tobacco, the support

[[Page S178]]

     level in cents per pound established under this title shall 
     be equal to--
       (1) the simple average price received by producers of the 
     kind of tobacco, as determined by the Corporation, during the 
     marketing years for the immediately preceding 5 crops of the 
     kind of tobacco; less
       (2) the average return to quota for 1994 through 1998 crops 
     of the kind of tobacco, as determined by the Corporation.
       (b) Subsequent Adjustment.--The Corporation, in 
     consultation with the Associations, shall adjust and 
     establish the support level for each kind of tobacco at an 
     appropriate level for each year after 1999.

     SEC. 304. PENALTIES.

       (a) In General.--The violation of any provision of this 
     Act, or any rule or regulation issued to carry out this Act, 
     or the terms of any license issued under this Act, by a 
     person (including the marketing of any kind of tobacco 
     without a license issued under this title or in excess of the 
     quantity permitted under such a license) shall subject the 
     person to revocation or suspension of the person's license, a 
     penalty of 75 percent of the average market price (calculated 
     to the nearest whole cent) for the kind of tobacco for the 
     immediately preceding marketing year, or both, in the 
     discretion of the Secretary.
       (b) Payor.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the penalty shall be paid by the person who 
     acquired the tobacco from the producer.
       (2) Deduction from price.--An amount equivalent to the 
     penalty may be deducted by the buyer from the price paid to 
     the producer in any case in which the tobacco is marketed by 
     sale.
       (3) Warehouseman or agent.--If the tobacco is marketed by 
     the producer through a warehouseman or other agent, the 
     penalty shall be paid by the warehouseman or agent who may 
     deduct an amount equivalent to the penalty from the price 
     paid to the producer.
       (4) Direct marketing outside United States.--In any case in 
     which tobacco is marketed directly to any person outside the 
     United States, the penalty shall be paid and remitted by the 
     producer.
       (c) False Statement or Omission.--If any producer falsely 
     identifies or fails to account for the disposition of any 
     tobacco--
       (1) an amount of tobacco equal to the normal yield of the 
     number of acres harvested in excess of the quantity permitted 
     under a license issued under this title shall be considered 
     to have been marketed in excess of the license for the farm; 
     and
       (2) the penalty for the excess marketing shall be paid and 
     remitted by the producer.
       (d) Carryover.--Tobacco carried over by the producer of the 
     tobacco from 1 marketing year to another marketing year may 
     be marketed without payment of the penalty imposed by this 
     section if--
       (1) the total quantity of tobacco available for marketing 
     from the farm in the marketing year from which the tobacco is 
     carried over does not exceed the quantity that may be 
     marketed under a license issued for the farm for the 
     marketing year; or
       (2) the quantity of tobacco carried over does not exceed 
     the normal production of that number of acres by which the 
     harvested acreage of tobacco in the calendar year in which 
     the marketing year begins is less than the quantity that may 
     be marketed under the license.
       (e) Tobacco Marketed Prior to Marketing Year.--Tobacco 
     produced in a calendar year for the marketing year beginning 
     during the calendar year shall be subject to licenses issued 
     for the marketing year even though the tobacco is marketed 
     prior to the date on which the marketing year begins.
       (f) Proportional Payments.--The Secretary shall require 
     collection of the penalty on a proportion of each lot of 
     tobacco marketed from the farm equal to the proportion that 
     the tobacco available for marketing from the farm in excess 
     of the quantity that may be marketed under a license is of 
     the total quantity of tobacco available for marketing from 
     the farm if satisfactory proof is not furnished as to the 
     disposition to be made of the excess tobacco prior to the 
     marketing of any tobacco from the farm.
       (g) Lien.--Until the amount of the penalty provided by this 
     section is paid, a lien on the tobacco with respect to which 
     the penalty is incurred, and on any subsequent tobacco 
     subject to licenses issued under this title in which the 
     person liable for payment of the penalty has an interest, 
     shall be in effect in favor of the Corporation for the amount 
     of the penalty.

     SEC. 305. PROGRAM REFERENDA.

       (a) Initial Referendum.--Not later than 3 years after the 
     date of enactment of this Act, the Corporation shall conduct 
     a referendum among licensees engaged in the production of 
     each kind of tobacco to determine whether such producers are 
     in favor of continuing the operation of the program 
     established under this Act with respect to that kind of 
     tobacco. If more than one half of the licensees voting oppose 
     the continuation of the program, the Corporation shall 
     announce the result and shall conduct a second referendum one 
     year later. If more than one half of the licensees voting in 
     the second referendum also oppose the continuation of the 
     program, the Corporation shall announce the result and the 
     program shall cease to be in effect for that kind of tobacco.
       (b) Subsequent Referenda.--The Corporation may conduct 
     subsequent referenda from time to time as the Corporation 
     deems appropriate to determine whether producers are in favor 
     of continuing the program established under this Act, the use 
     of marketing allotments and quotas, limitations on transfer 
     of quota, or any other aspect of the program.
       (c) Effective Date.--This section shall be effective 1 year 
     after the date of enactment of this Act.
                                  ____



  Section-by-Section Summary of The ``Tobacco Market Transition Act''

       These are the highlights of each section of the 
     legislation:
       Section 1. Table of Contents.
       Section 2. Definitions.
       This section includes the definition of an ``active tobacco 
     producer'' (who will be eligible to receive transition 
     payments and a license to grow tobacco) and a ``quota 
     holder'' (who will be eligible for the quota asset buyout). 
     An ``active tobacco producer'' is a person who was the actual 
     producer of tobacco planted in 1997. A ``quota holder'' is a 
     person who owned a farm on January 1, 1998 which carried a 
     tobacco farm marketing quota or farm acreage allotment.
       Section 3. Purposes.
       Section 101. Tobacco Community Revitalization Trust Fund.
       This section establishes a trust fund which will compensate 
     quota holders, make transition payments to growers, fund the 
     privatized tobacco production limiting program, pay for 
     tobacco crop insurance, and provide community development 
     grants. From the funds generated as a result of comprehensive 
     tobacco legislation, the trust fund would receive $3.5 
     billion for the first five years, and $265 million each 
     succeeding year.
       Section 201. Compensation to Quota Holders for Loss of 
     Tobacco Quota Asset Value.
       A quota holder would receive $8/pound based on the average 
     tobacco farm marketing quota established for the 1995 through 
     1997 marketing years for the farm owned by the quota holder 
     on January 1, 1998. The payments would be made in 5 equal 
     annual installments beginning in 1999.
       Section 202. Transition Payments for Active Tobacco 
     Producers.
       Tobacco producers who grew tobacco in 1997 would be 
     eligible to receive 40 cents/pound for five years based on 
     the average number of pounds of tobacco quota established for 
     a farm for the 1995 through 1997 marketing years for which 
     the grower was the actual producer of tobacco on the farm.
       Section 203. Tobacco Loan Associations.
       To extricate the federal government from the tobacco 
     program and assist tobacco loan associations make the 
     transition to the privatized program, this section forgives 
     various loans made to the associations by the Department of 
     Agriculture, transfers title to the loan associations of 
     tobacco held in inventory by the Department of Agriculture, 
     and transfers to the loan associations the funds held in the 
     No Net Cost Tobacco Fund and the No Net Cost Tobacco Account 
     held on behalf of the associations.
       Section 204. Tobacco Community Economic Development Grants.
       The Corporation will award $250 million annually to 
     tobacco-dependent counties to aid community development 
     efforts. The funds can be used for various purposes, 
     including education, small business incubators, technology 
     infrastructure enhancement, transportation improvements and 
     water projects.
       Section 205. Tax Treatment of Tobacco Quota Holder 
     Compensation and Transition Payments.
       Compensation funds to quota holders and transition payments 
     to tobacco producers will not be taxed if placed in a 
     qualified retirement account or if used to retire debt 
     directly associated with tobacco production incurred prior to 
     January 1, 1998.
       Section 301. Tobacco Production Control Corporation.
       This section creates the privatized Tobacco Production 
     Control Corporation, which will undertake the duties 
     previously performed by the federal government. These duties 
     will include:
       Governing the production, marketing, importation, 
     exportation, and consumer quality assurance for each kind of 
     tobacco;
       Offering crop insurance;
       Establishing a quality assurance system that provides for 
     the inspection and grading of tobacco marketed in the U.S., 
     determines and describes the physical characteristics of 
     domestic and imported tobacco, and ensures the physical and 
     chemical integrity of domestic and imported tobacco; and
       Creating a licensing system to limit the production of 
     tobacco, replacing the current quota system. Licenses would 
     be issued by the Corporation at no cost to the producer and 
     no tobacco could be sold without a license. Initially, 
     licenses would be issued to active tobacco producers and 
     would be surrendered to the Corporation if the producer 
     ceases growing tobacco. Licenses could not be sold, leased or 
     transferred except to a licensee's spouse or children 
     actively engaged in the production of tobacco.
       Section 302. Tobacco Loan Associations.
       This section requires the Corporation to enter into 
     agreements with producer-owned loan associations for each 
     kind of tobacco to make price support available, carry out 
     the licensing system, arrange for financing and 
     administration of price supports and handle any domestically 
     produced tobacco received as collateral for a price support 
     loan.
       Section 303. Tobacco Price Support Levels.
       For the 1999 crop year, the price support shall be the 
     simple average price received by

[[Page S179]]

     producers for the preceding 5 years less the average return 
     to quota for 1994 through 1998 crops. This eliminates from 
     the price of tobacco an amount equal to the previous cost of 
     acquiring quota.
       Section 304. Penalties.
       This section sets forth the penalties for those who sell 
     tobacco without a license or in violation of a license, and 
     for those who purchase tobacco which is not licensed or 
     violates a license.
       Section 305. Program Referenda.
       This section allows producers to vote periodically on 
     whether to retain the new privatized program.

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