[Senate Report 104-135]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 181
104th Congress                                                   Report
                                 SENATE

 1st Session                                                    104-135
_______________________________________________________________________


 
            ARTS, HUMANITIES, AND MUSEUMS AMENDMENTS OF 1995

                                _______


                August 30, 1995.--Ordered to be printed

 Filed  under  authority  of  the  order  of  the  Senate  of  August  
                 11  (legislative  day,  July 10), 1995

_______________________________________________________________________


   Mrs. Kassebaum, from the Committee on Labor and Human Resources, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                         [To accompany S. 856]

    The Committee on Labor and Human Resources, to which was 
referred the bill (S. 856) to amend the National Foundation on 
the Arts and the Humanities Act of 1965, the Museum Services 
Act, and the Acts and Artifacts Indemnity Act to improve and 
extend the Acts, and for other purposes, having considered the 
same, reports favorably thereon with an amendment in the nature 
of a substitute and recommends that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
  I. Introduction.....................................................2
 II. Purpose and summary of the bill..................................2
III. Background and votes in committee................................4
 IV. History of legislation...........................................6
  V. Committee views..................................................8
 VI. Cost estimate...................................................21
VII. Regulatory impact statement.....................................25
VIII.Section-by-section analysis.....................................25

 IX. Minority views..................................................46
  X. Changes in existing law.........................................53

                            I. Introduction

    S. 856 provides for a continued Federal role in supporting 
arts, humanities and museum projects for the people of this 
nation. Last reauthorized in 1990, the authority for the 
National Foundation on the Arts and Humanities Act expired in 
1993. The Subcommittee on Education, Arts and Humanities, 
therefore, took action early this session to re-evaluate the 
Government's role in funding the arts and humanities. In this 
context, the legislation not only extends the act and 
reiterates and renews the Federal Government's commitment to 
nurture its cultural heritage but makes significant and 
necessary changes to the existing statute with the goal of 
improving the act, instilling greater public confidence and 
generating greater public benefit from the agencies contained 
in the act.

                  II. Purpose and Summary of the Bill

    The bill extends the Federal commitment to the arts and 
humanities while at the same time making significant 
improvement in areas which have been of great concern to both 
the general public and the U.S. Congress. Those areas include 
changes to reduce the federal bureaucracy, increase 
accountability and share greater responsibility with the 
States.
    Toward these ends the bill provides for a 5-year 
reauthorization of the National Foundation for the Arts and 
Humanities Act of 1965 and reaffirms the Government's 
commitment to, and interest in, supporting arts and humanities 
projects throughout the nation well into the future. Much 
debate this year centered on whether government sponsorship of 
the arts and humanities is appropriate. The committee has 
determined that the agencies do provide valuable service to the 
people of the nation and should be maintained. Still, while S. 
856 does reaffirm the importance of Government leadership, it 
includes substantial and significant change in order to improve 
both the National Endowment for the Arts (NEA) and the National 
Endowment for the Humanities (NEH). The legislation reduces 
bureaucracy by merging administrative functions, capping 
administrative costs, and shrinking the National Councils. 
Provisions relating to each agency have been separated by title 
in hopes of making the legislative language easier to 
understand. Perhaps of primary importance, S. 856 includes 
provisions to further increase accountability by prohibiting 
subgranting and seasonal support, and limiting grants to 
individuals. In addition, the bill maintains language including 
the obscenity language and the strict sanctions against funding 
obscenity included during the 1990 reauthorization. Finally, S. 
856 gives greater responsibility to State arts and humanities 
councils by increasing the percentage of funds allotted to the 
States.
    Title I authorizes the establishment of the National 
Foundation on the Arts and the Humanities; provides one 
authorization of appropriations for each of the two agencies, 
outlines specific provisions regarding joint administration and 
division of funds, calls for a study of the feasibility of 
creating a true endowment that would provide supplemental 
funding and places a limit on administrative costs. The bill 
authorizes a 25-percent reduction in appropriations from fiscal 
year 1995 levels in the NEA and NEH, and level funding for the 
Institute for Museum and Library Services (IMLS).
    Four grant programs are established for the NEA: 
Partnership grants (40 percent of authorized funds), National 
Significance grants (40 percent of authorized funds), Direct 
grants (10 percent of authorized funds) and Arts Education and 
Underserved Communities grants (10 percent of authorized 
funds). The role of the advisory panels has been modified 
substantially both in terms of structure and responsibility. 
The number of members serving on the National Council on the 
Arts has decreased from 26 to 20 individuals with limitations 
placed on reappointment. The practices of subgranting and 
providing seasonal support grants have been prohibited. 
Individuals will be eligible for only two grants in a lifetime 
and no group, except for State agencies and regional groups, 
will be literature fellowships. A provision for recapturing 
funds from financially successful grants has been incorporated 
in the legislation.
    Three grant programs are established at the NEH and 
important administrative changes are made. The grant programs 
are Partnership (30 percent of authorized funds), National 
Significance (35 percent of authorized funds), and Research and 
Scholarship (35 percent of authorized funds). The number of 
members on the National Council on the Humanities has been 
reduced from 26 to 20 with limitations placed on reappointment. 
A provision for the recapture of funds from financially 
successful grants has been included in the legislation.
    Title II amends the Museum Services Act and consolidates 
the Institute of Museum Services (IMS) and the Library Services 
and Construction Act, creating the IMLS. The new Institute will 
have one director overseeing two distinct programs headed by 
two deputy directors, one for library programs and another for 
museum programs. The museum division remains fundamentally 
unchanged. The library division, as with the museum division, 
will have its own advisory board staffed by appointees of the 
National Commission on Libraries and Information Sciences. 
Appropriations for the two programs will be handed separately 
and out of different appropriations subcommittees--Labor-Health 
and Human Services and Education for the library program and 
Interior for the museum program. The library program changes 
significantly from its present form, in that the focus under 
this legislation will be on two programs areas--technology and 
access, and services to special constituencies with an emphasis 
on children in poverty. Funds for the purposes listed will be 
provided to State library administrative agencies for State 
based programming. Five to 7 percent of total appropriations 
will be set-aside for joint program between libraries and 
museums.
    Finally, title III amends the Arts and Artifacts Indemnity 
Act and expands its scope to include indemnification for 
exhibitions originating in the United States and touring the 
United States, in addition to the current practice of providing 
indemnification as part of an exchange of a domestic exhibition 
traveling abroad or for foreign exhibitions touring the United 
States. With the elimination of the Federal Council on the Arts 
and Humanities, the Arts and Artifacts Indemnity Program will 
be administered by the NEA.

                 III. Background and Votes in Committee

    On May 25, 1995, Senator Jeffords, (on behalf of himself 
and Senators Kassebaum, Kennedy, Pell, Dodd, and Simpson) 
introduced S. 856, the Arts, Humanities and Museum Amendments 
of 1995, a bill to reauthorize the National Foundation on the 
Arts and Humanities Act of 1965 and for the purposes.
    A series of four hearings were held, one by Senator 
Kassebaum in Washington, DC, by the Labor and Human Resources 
Committee and three by Senator Jeffords, two of which were held 
in Washington, DC, and one held in Alexandria, VA, by the 
Subcommittee on Education, Arts and Humanities. Testimony was 
received from 20 witnesses representing both the private and 
public sectors all of whom represented a variety of 
perspectives on the issue of continued Federal support for the 
NEA, NEH, and IMS.
    The first hearing was held on January 26, 1995, on the 
subject of reauthorizing the National Endowment for the Arts. 
The only witness appearing before the full committee was the 
chairperson of the National Endowment for the Arts, Jane 
Alexander.
    The second hearing, held on February 23, 1995, also 
addressed the topic of the reauthorization of the National 
Endowment for the Arts. Testimony was taken from those 
advocating the current agency structure, those advocating 
significant change and those advocating the merger of the 
agencies or complete elimination of the NEA. Witnesses 
included: Mr. Christopher Reeve, co-president of the Creative 
Coalition; Mr. John Ong, chairman and CEO of the B.F. Goodrich 
Co.; Hon. Joseph P. Riley, Jr., mayor of Charleston, SC; Mr. 
Harold Williams, president and chief executive officer of the 
J. Paul Getty Trust; Mr. Dean Amhaus, executive director of the 
Wisconsin Arts Board; Mr. Richard Gurin, chief executive 
officer of Binney and Smith; Mr. Leonard Garment, partner with 
Mudge Rose Guthrie Alexander & Ferdon; Mr. George White, 
president and founder of the Eugene O'Neill Theater; Dr. 
Laurence Jarvik, director, Center for the Study of Popular 
Culture; and Dr. Charles Clotfelter, professor of public policy 
at Duke University. The hearing record was held open for 
additional testimony which was submitted by Fondo del Sol 
Visual Arts Center, Jill Worzer of Montpelier, VT and Debbie 
Myers of Lexington, SC.
    On March 2, 1995, a third hearing was held to discuss the 
reauthorization of the National Endowment for the Humanities. 
Witnesses included: Chairman of the National Endowment for the 
Humanities, Sheldon Hackney; Dr. Victor Swenson, executive 
director of the Vermont Council on the Humanities; Mr. David A. 
Berry, professor of history, Essex County College and executive 
director of the Community College Humanities Association; Dr. 
Alberta Arthurs, director of arts and cultural programs for the 
Rockefeller Foundation; Dr. Walter Berns, resident scholar, 
American Enterprise Institute; and Dr. Barry Gross, national 
program officer and treasurer, National Association of 
Scholars.
    A final hearing was held on March 10, 1995, at the 
Alexandria Black History Resource Center in Alexandria, VA on 
the topic of the reauthorization of the Institute for Museum 
Services. Witnesses included: Director of the Institute for 
Museum Services, Diane Frankel; Ms. Audrey Davis, director, 
Alexandria Black History Resource Center; and Ms. Joyce Bucci, 
specialist, Office of Art for Baltimore County Public Schools. 
The hearing record was held open for additional testimony which 
was submitted by the Association of Systematics Collections, 
American Zoo and Aquarium Association, the American Association 
of Museums, Edmund Barry Gaither and Fondo del Sol Visual Arts 
Center.
    On July 19, 1995, the Labor and Human Resources Committee 
met to consider an amendment in the nature of a substitute to 
S. 856 offered by Senator Kassebaum. Following brief opening 
statements, an amendment was offered by Senator Abraham to 
privatize the NEA and NEH over a 5-year period. The amendment 
called for a reduction in the authorization level of 20 percent 
each year over 5 years with no appropriations authorized 
thereafter and allowed for a percentage of authorized funds to 
be used for fundraising. The amendment transferred the 
administration of the Arts and Artifacts Indemnity Program to 
the Institute of Museum and Library Services. Finally, the 
amendment included a resolution expressing the sense of the 
Senate that additional tax incentives for charitable donations 
should be provided, such as tax deductions for nonitemizers, 
the elimination of the cap on charitable deductions, and a 
specific tax credit for donations to the newly constituted 
national organization. The amendment was defeated by a roll 
call vote of 6 yeas to 10 nays. The vote on the amendment was 
as follows:
        YEAS                          NAYS
Coats                               Kassebaum
Gorton                              Jeffords
Frist                               Gregg
DeWine                              Kennedy
Ashcroft                            Pell
Abraham                             Dodd
                                    Simon
                                    Harkin
                                    Mikulski
                                    Wellstone

    The committee then accepted an amendment offered by Senator 
Dodd by voice vote. The amendment offered by Senator Dodd 
ordered the Chairpersons of the NEA and the NEH to jointly 
conduct or contract for a study on the feasibility of 
establishing a true endowment for the NEA and NEH in order to 
provide supplemental funding to the ongoing Federal 
appropriation.
    Senator Ashcroft, for himself and Senator Gregg, offered an 
amendment which would have reduced the authorization level by 
10 percent each year over the 5-year authorization period. The 
amendment was defeated by a roll call vote of 8 yeas to 8 nays. 
The vote on the amendment was as follows:
        YEAS                          NAYS
Kassebaum                           Jeffords
Coats                               Kennedy
Gregg                               Pell
Frist                               Dodd
DeWine                              Simon
Abraham                             Harkin
Ashcroft                            Mikulski
Gorton                              Wellstone

    The final amendment was offered by Senator Pell, for 
himself and Senators Kennedy and Dodd. The amendment would have 
broadened grants to individuals to include fellowships in 
American folk heritage or traditions, choreography, sculpture, 
architectural or urban design, jazz or other musical 
composition, painting, or works on paper. The amendment was 
defeated by a roll call vote of 7 yeas to 9 nays. The vote on 
the amendment was as follows:
        YEAS                          NAYS
Kennedy                             Kassebaum
Pell                                Jeffords
Dodd                                Coats
Simon                               Gregg
Harkin                              Frist
Mikulski                            Abraham
Wellstone                           Ashcroft
                                    DeWine
                                    Gorton

    The committee then voted for final passage of the amendment 
in the nature of a substitute to S. 856 by a vote of 12 yeas to 
4 nays. The vote was recorded as follows:
        YEAS                          NAYS
Kassebaum                           Coats
Jeffords                            Abraham
Gregg                               Ashcroft
DeWine                              Frist
Gorton
Kennedy
Pell
Dodd
Simon
Harkin
Mikulski
Wellstone

                       IV. History of Legislation

    The National Foundation on the Arts and the Humanities was 
established in 1965 by Public Law 89-209, the National 
Foundation on the Arts and the Humanities Act. Although this 
was landmark legislation, it was not the first attempt to 
establish an arts foundation. As early as the 1950's, bills 
were introduced to establish a national arts agency. In 1963, 
Special Consultant on the Arts to President Kennedy, August 
Heckscher, submitted his report on ``The Arts and the National 
Government'' that recommended an arts foundation. The original 
act of 1965 was preceded by the National Arts and Cultural 
Development Act of 1964 (Public Law 88-579), which established 
a National Council on the Arts. When the National Foundation on 
the Arts and the Humanities Act became law in 1965, the 
National Council on the Arts was transferred to the National 
Endowment for the Arts. The National Foundation on the Arts and 
the Humanities currently is composed of the NEA (and its 
National Council on the Arts), NEH (and its National Council on 
the Humanities), the Federal Council on the Arts and Humanities 
(that administers the Arts and Artifacts Indemnity Act), and 
the IMS (and its National Museum Services Board).
    The National Foundation on the Arts and the Humanities Act 
was subsequently amended in 1967 by Public Law 90-83; in 1968 
by Public Law 90-348; in 1970 by Public Law 91-346; in 1973 by 
Public Law 93-133; in 1976 by Public Law 94-462 and Public Law 
94-555; in 1980 by Public Law 96-496; in 1984 by Public Law 98-
306; in 1985 by Public Law 99-194; in 1986 by Public Law 99-
362; in 1987 by Public Law 100-202; in 1989 by Public Law 101-
121; in 1990 by Public Law 101-512; in 1993 by Public Law 103-
171; and, in 1994 by Public Law 103-382. Among the public laws 
just cited, reauthorizations occurred in 1968, 1970, 1973, 
1976, 1980, 1985, and 1990.
    The Museum Services Act was first enacted as Title II of 
the Arts, Humanities and Cultural Affairs Act of 1976 (Public 
Law 94-462). The act was subsequently amended in 1980 by Public 
Law 96-496: in 1984 by Public Law 98-306, in 1985 by Public Law 
99-194, and in 1990 by Public Law 101-512.
    The Arts and Artifacts Indemnity Act, ``an Act to provide 
indemnities for exhibitions of artistic and humanistic 
endeavors,'' was enacted in 1975 as Public Law 94-158 and 
amended by Public Law 99-194 and Public Law 101-512. The 
Federal Council on the Arts and humanities was given authority 
to make indemnity agreements against loss or damage to art 
objects and artifacts for international art exhibitions.

          The Arts, Humanities, and Museums Amendments of 1990

    The last reauthorization of the National Foundation on the 
Arts and the Humanities Act of 1965 was enacted as part of the 
Department of the Interior and Related Agencies Appropriations 
Act of 1991, (H.R. 5769) Public Law 101-512. On September 12, 
1990, this committee reported S. 2724 (S. Rept. 101-472) with 
an amendment in the nature of a substitute that would have 
reauthorized NEA, NEH, and IMS for five years. On October 11, 
1990, the House passed H.R. 4825, the Arts, Humanities, and 
Museums Amendments of 1990. On October 15, 1990, the House 
passed the appropriations measure (H.R. 5769) with the text of 
H.R. 4825 attached, providing a 3-year reauthorization of NEA, 
NEH, and IMS. On October 24, the Senate passed the 
appropriations measure including the text of H.R. 4825. 
Language was inserted to clarify the definition of 
``obscenity.'' On October 27, 1990, both House and Senate 
agreed to the Conference report on H.R. 5769. On November 5, 
1990, H.R. 5769 was signed into law as Public Law 101-512.
    Public Law 101-512 extended the authority for NEA, NEH, 
IMS, and the Arts and Artifacts Indemnity Act through fiscal 
year 1993. Among its major provisions, it increased the State 
allotment from 20 percent to 27.5 percent of NEA program funds 
in fiscal year 1993. In addition, an allotment of up to 7.5 
percent of programs funds in fiscal year 1993 was targeted to 
arts access programs in rural and inner-city areas. With regard 
to controversial grants, the act defined ``determined to be 
obscene'' as meaning deemed ``in the final judgment of a court 
of record'' to be obscene. In the event that a project was 
determined to be obscene by the courts, the Chair required 
repayment under terms deemed appropriate. In the ``Declaration 
of Purpose,'' Public Law 101-512 added that the arts must be 
``sensitive to the nature of public sponsorship.'' The law 
contained new language on the panel system, requiring wide 
geographic, ethnic and minority representation, and the use of 
lay individuals knowledgeable about the arts, but not 
associated with an arts profession or arts organizations.

                committee activity in the 103rd congress

    In the 103rd Congress, Senators Pell and Jeffords 
introduced S. 1218 (July 14, 1993), the Arts Humanities and 
Museums Amendments of 1993, a 2-year extension for the NEA, 
NEH, and IMS. This committee reported S. 1218 (S. Rept. 103-
186) on November 12, 1993, with an amendment in the nature of a 
substitute. A similar bill (H.R. 2351) was passed by the House 
on October 14, 1993. An amendment requiring comparability of 
State arts spending became part of both bills. This amendment 
withheld increases in a State's allotment of NEA funds if the 
State decreased its own funding for the arts below the average 
level of the three most recent years and if the rate of 
reduction exceeded the rate of all the State's general fund 
reductions. No further action was taken.

               the library services and construction act

    The Library Services and Construction Act (LSCA) is the 
first and largest Federal program of assistance specifically to 
libraries. It was first enacted in 1956 as the Library Services 
Act (LSA) to provide assistance for extending public library 
services to rural areas. In 1964 LSA became LSCA with the 
addition of Title II for public library construction, and with 
the addition of assistance for urban areas. Since 1966, when 
Title III for interlibrary cooperation was added, LSCA has 
provided an incentive for libraries of all kinds to link 
together and to use the technology to share resources across 
institutional, jurisdictional, and geographic boundaries on 
behalf of users.
    Most recently amended in 1990 (P.L. 101-254), the LSCA 
contains 8 titles that authorize aid to public libraries. Last 
reauthorized in 1994 by the Improving America's Schools Act, 
the LSCA programs were extended for one year through 1995 
without substantive amendment.

                           V. Committee Views

    As during past reauthorization discussions relating to the 
National Endowment for the Arts, a great deal of consideration 
was given to fundamental questions relating to the agency. The 
committee had to address issues regarding the continued 
existence of the NEA and NEH, the value and importance of 
Federal support for culture, the Federal financial commitment 
and finally, how the agencies could be more responsive to the 
public. The committee addressed legitimate questions brought up 
during oversight hearings and from the community. S. 856 is the 
result of such discussion, debate and deliberation and it makes 
changes to current law designed to provide resolution to the 
myriad of problems confronting the agencies through a 
fundamental re-evaluation of their structure and their purpose. 
It was the consensus of the committee that significant changes 
were necessary to achieve these goals. The bill assures greater 
accountability to the American people and inspires greater 
confidence in the knowledge that the agencies exist to serve 
all Americans by making arts, humanities, libraries and museums 
more accessible.
    The bill provides for a 5-year reauthorization for the 
National Endowment for the Arts, the National Endowment for the 
Humanities, the Institute for Museum and Library Services and 
the Arts and Artifacts Indemnity Act. The committee maintains 
that there is a role for the Federal Government in supporting 
our cultural heritage as well as a distinctly national purpose 
in the existence of these agencies which cannot be pursued by 
devolving all funds to the States. The intent of this bill is 
to strike a balance between Federal and State leadership with 
the goal of ensuring that the very best works in the arts and 
humanities are available to all persons of the nation. Priority 
language is included throughout the bill to emphasize 
underserved communities' access to art and culture.
    Much of the purpose section is maintained from current law, 
though additional emphasis is placed on the need to respect the 
public trust when using public moneys. The purposes have been 
clarified to reinforce the concept of partnership between 
public and private entities and to emphasize the importance of 
Federal support for the arts and humanities. Further, the 
purpose section states, ``Federal funding for the arts and 
humanities must be sensitive to the nature of public support 
and the need to use public funding in a manner that recognizes 
the responsibility of the Federal Government to the public 
good'' and that such funding ``serves the purposes defined by 
Congress and are subject to the conditions that traditionally 
govern the use of public money.'' The committee has tried to 
communicate the singularly important message that the National 
Endowment for the Arts, like other departments or agencies of 
the Federal Government, exists to provide an important service 
to the American people and must comply with rules and judgments 
governing public support and make appropriate decisions in 
providing these services.
    The bill includes specific language which prohibits the use 
of Federal funds for the purposes of lobbying or for providing 
general membership services for groups. Such use of funds is 
inappropriate and takes scarce funds away from the purposes 
outlined in the act.
    The committee directs the NEA and NEH to jointly undertake 
some administrative functions with the intent of having the 
agencies reduce the amount of funds used for administration as 
well as avoid senseless duplication of activities which clearly 
could and should be consolidated.
    The committee took further action on administrative costs 
by placing a 12-percent cap on funds available for 
administration of the NEA and NEH. In determining this level, 
the committee took into consideration their unique grant making 
functions as well as the directive that they both convene 
advisory panels--all of which entail considerable costs to the 
agencies. Such considerations were balanced with the 
committee's awareness that a significant percentage of funds 
were being used for administration. An additional 3 percent of 
appropriated funds is available to the NEA for work force 
reductions for either employee severance pay or employee buy 
out program as authorized by law. The committee includes this 
provision for the NEA as a means of managing costs associated 
with employee cutbacks due to both anticipated reductions in 
overall appropriations and the cap on administrative spending. 
Contributions from each agency's administrative budget for the 
President's Committee on the Arts and Humanities may not exceed 
$100,000. This, too, represents an effort to reduce 
administrative costs and ensure that as much money as possible 
is available for grantmaking. All actions taken relating to 
administrative spending are an effort by the committee to 
reduce bureaucracy and ensure that funds appropriated to the 
agencies are used for grantmaking.
    In addition, the committee has concerned relating to the 
percentage of Federal funds being used for the administration 
of state arts and humanities councils. While there was a great 
deal of discussion on this issue, no decision was reached by 
the committee as to how to appropriately define administrative 
costs at the same level, and no future action was taken.
    The committee also limits the amount of funds to be spent 
on official reception and representation costs. In fiscal year 
1996, not more than $100,000 from funds donated, bequeathed or 
devised to the NEA or NEH may be used for official reception 
and representation and shall not exceed $50,000 for the 
remaining fiscal years. The Jefferson Lecture in the Humanities 
is exempt from this limit.
    The legislation reduces the authorization appropriations 
level for the NEA and NEH by 5 percent per year, representing a 
25 percent reduction over the 5 year authorization period. The 
baseline level for the reduction was $162 million for the NEA 
and $172 million for the NEH, reflecting the agreed upon fiscal 
year 1995 rescinded levels. The committee recognizes the need 
for measured cutbacks in discretionary spending in the years 
ahead and has, therefore, provided for an authorization of 
appropriations which is realistic yet not punitive. The 
committee notes that the reductions in the authorization levels 
for these Endowments in no way represent an effort to begin on 
a path toward eliminating these Endowments. Instead, the 
reductions are in keeping with thoughtful and balanced efforts 
to reduce the budget deficit by the year 2002.
    In recognition of the budget realities, the committee 
adopted an amendment offered by Senator Dodd that directs the 
Chairs of the NEA and NEH to study the feasibility of creating 
a true endowment that would provide supplemental funding to the 
agencies. The amendment provides that the Chairs jointly 
conduct this study or complete it by contract and that in so 
doing they consult with experts in various fields to examine 
innovative ways of funding a true endowment.
    The committee explored several of these options at its 
hearings including private fundraising, Government support for 
an endowment and using a copyright extension to generate new 
revenues for such a trust. It became clear that, while the 
creation of a true endowment was desirable, there was little 
information on the capacity of different sources to fund the 
endowment.
    This study will explore this question as well as others 
regarding the amount of revenue necessary to fund the trust 
fund, what kind of revenue could be generated from different 
sources, and how the endowment could be administered. It is the 
committee's intent that the scope of the study should not be 
limited to the list the committee included in section 104(b), 
but should also include other innovative funding ideas as 
appropriate.
    In completing the study, the committee has instructed that 
certain experts be consulted including persons with expertise 
in the arts, humanities, business, charitable giving and 
copyright industries as well as other appropriate Federal 
agencies. It is particularly important that, as the copyright 
option is explored, persons with expertise in this area, 
including the Register of Copyrights and other government 
officials, be included. Experts in the copyright industries are 
essential to provide insight on the economic effects any 
proposal involving U.S. copyrights will have on our domestic 
copyright system or on our position in international trade 
negotiations. Beyond the requirements of the amendment, it is 
the committee's intent that experts in other areas be consulted 
as appropriate to ensure a comprehensive study.
    The amendment directs the chairs of the NEA and NEH to 
report on their study to Congress within 1 year of the passage 
of this legislation.
    Significant structural changes made by the committee are 
attempts to streamline the agencies and provide a clear outline 
and direction in which the Endowments should focus and 
distribute scarce funds. The committee has provided a framework 
which directs the NEA to move forward to ensure that the arts 
continue to be available to communities through increased 
support to States for local endeavors, support to nationally 
significant projects which have broad appeal and reach a wide 
audience, support to groups for smaller scale projects of the 
highest artistic excellence and artistic merit and finally, 
support for arts education and outreach to underserved 
communities. There is little direction given on NEA priorities 
in the current law, save for mentions of arts education and 
underserved communities. From testimony taken during the 
hearings, there was agreement that it was important to maintain 
a strong national program and a strong State program.
    Partnerships grants are a redesignation of the basic State 
grant which continues to be distributed by a formula maintained 
from current law. Partnership grants will be made to State arts 
agencies to establish local arts activities with the emphasis 
on local involvement and participation. The reservation for 
Partnership grants is 40 percent of authorized funds, which 
represents a 12.5 percent increase to the State agencies from 
current law. The committee's intent in increasing the State 
share of funds is to sustain and enhance the expansion of the 
arts in local communities and make certain that States continue 
to have a voice in how Federal funds are spent.
    National Significance grants are designed to be a category 
of grants that will reach a wide national audience. National 
Significance grants represent 40 percent of authorized funds. 
Groups eligible to apply include regional groups and groups of 
demonstrated and substantial national or regional cultural 
significance. Funds will be available for projects, productions 
and workshops that have significant merit, encourage 
professional excellence or increase the access of the people of 
the United States, especially underserved communities, to be 
best of arts and culture. The committee's intent in creating 
this category of grants is to emphasize the importance of 
providing support for activities of recognized quality and that 
have a national significance. Within this category, matching 
requirements have been increased from current law which 
requires a 1:1 or 3:1, private dollar to public dollar match to 
a 3:1 of a 5:1 ratio. A group must match at a 5:1 ratio if the 
group's annual budget is over $3 million. The increase in the 
matching requirement is included in the legislation in response 
to testimony from the Chairperson of the NEA stating the 
current matches are actually much higher in practice than 
required by law. This increased matching requirement recognizes 
what is current practice and will help to encourage greater 
participation by the private sector in support of cultural 
projects. Ten percent of funds for this grant category may be 
matched with a 1:1 ratio. Those groups eligible for the smaller 
match are those groups whose projects, productions or workshops 
have been determined by the Chairperson to be of national 
significance and because of their small annual budget, are 
unable to meet the higher matching conditions required in this 
section. National Significance grants may be made in the 
following disciplines: dance, design, literature, folk arts, 
media, museums, music, theater or visual arts. It is the 
committee's intent that priority shall be given to those 
projects, productions or workshops that increase the public's 
access, especially those in underserved communities, to culture 
and the arts. The goal of this priority language is to further 
assure that the needs of underserved communities will be fully 
considered.
    Direct grants represent a smaller category of grant funds 
designed to increase accessibility of the arts in communities. 
Direct grants make up 10 percent of the authorized funds. This 
is the only category of grants where individuals are eligible 
to apply, and only for fellowships in literature. Grants made 
in this category must be broadly representative of the cultural 
heritage of the United States and the Chairperson should ensure 
that grants are awarded to assure geographic representation of 
works of the highest artistic excellence and artistic merit. 
Federal share requirements call for a dollar for dollar match 
from nonfederal sources. The Chairperson may make available up 
to twenty percent of the funds in this category for 
distribution requiring no match from nonfederal sources, only 
after review by the National Council. Priority shall be given 
to projects, productions or workshops that will be widely 
disseminated after completion. The committee intends for grants 
within this category to be made available, or a competitive 
basis--based on artistic excellence and merit--to small or 
medium sized organizations whose projects might not yet have 
national impact.
    Action taken by the committee in limiting fellowships to 
only those for literature is a result of the committee's 
concerns over a few grants that the committee believes do not 
meet the high standards of artistic excellence and artistic 
merit. The committee recognizes that a great many of the grants 
to individuals have been for projects of superior merit and 
worth, yet the few contentious examples have forced the 
committee to take action to provide assurances that the 
Endowment will exercise good judgement consistent with the use 
of public monies.
    Finally, Arts Education and Underserved Communities grants, 
representing 10 percent of authorized funds, shall be made to 
State arts agencies or other local or regional groups for 
activities in arts education or for broadening public access to 
the arts in underserved areas. Funds provided in this category 
must be matched dollar for dollar by nonfederal sources. The 
National Endowment for the Arts has provided critical support 
in the areas of arts education and service to underserved 
communities. Since the 1990 authorization the NEA has provided 
leadership in this area and without this important Federal 
contribution many schools would be unable to support arts 
education programs which are of vital significance in enriching 
the educational opportunities of school aged children in this 
Nation. The committee intends for arts education and outreach 
to underserved communities to continue to be a central 
component of the programs supported by the NEA and has, 
therefore, included a category specifically dedicated to such 
activities. Current law provides the authority for arts 
education programs and the committee, in including an arts 
education and underserved communities category as part of the 
reauthorization, seeks to restate the value of this program. In 
addition, while the committee has made clear that a specific 
percentage of funds be spent on such activities, such outreach 
initiatives should also be a fundamental concern and 
concentration of the agency in each of the grant categories.
    In this time of budget cutting and efforts to make Federal 
programs more effective and efficient with fewer Federal 
dollars, it becomes increasingly important to prioritize. This 
is particularly important in the area of education where it is 
essential to direct funding to programs that demonstrate 
success in improving childhood development and student 
learning. The committee recognizes the real benefits of arts 
education in enhancing educational opportunities.
    For example, the committee is aware that there has been 
much research into the benefits of music education. Studies at 
the University of California, Irvine, show that music 
instruction dramatically increases children's spatial-temporal 
IQ's. Spatial-temporal ability is required in mathematics, 
physics, engineering, architecture and any subject or task 
requiring an understanding of how objects fit together in time 
and space. Music instruction can strengthen every child's 
ability to reach his or her full potential in math and science, 
as well as develop enhanced social development and cultural 
awareness.
    The committee has included language which prohibits 
seasonal support and subgranting, eliminating the possibility 
of groups receiving funding for projects, productions or 
workshops which have not been approved in the review process 
specified in statute. Both subgranting and seasonal support are 
practices which have resulted in projects receiving funds that 
have not been specifically approved by the Chairperson or the 
Council. Eliminating these practices should reduce the 
possibility of further misuse of Federal funds. The committee 
strongly believes such instances undermine overall confidence 
in the general good works of the agency. Eliminating 
subgranting and seasonal support places the control and 
responsibility of funding decisions with the NEA and ensures 
that it will be directly accountable for the grants that are 
made.
    The grant making process is three tiered, yet it has often 
been criticized for relying almost exclusively on the 
recommendations of the advisory panels. In order to address 
this criticism, the committee has redesigned the process in 
order to distinguish the separate roles of the advisory panels, 
the National Council and the Chairperson. In including changes, 
the committee seeks to shift greater responsibility to the 
National Council on the Arts whose membership is appointed by 
the President with the advice and consent of the Senate, and is 
accountable to the American public, and also increase the 
decision making responsibility of the Chairperson.
    Therefore, advisory panels has reduced authority in which 
they are able to recommend only general ranges of financial 
assistance. This represents a change from the current practice 
of advisory panels recommending specific grant amounts. In 
addition, advisory panels must recommend more applicants for 
grants than funding available. Service on advisory panels has 
been limited to five nonconsecutive years. The number of 
laypersons per advisory panel has been increased to two. 
Panelists who are employees of an organization with a pending 
application or who have direct or indirect financial interest 
in a pending application must recuse themselves from panel 
deliberation until a final decision by the Chairperson on a 
grant has been made. These changes represent an effort to 
increase the turnover on the panels, move away from charges of 
conflict of interest, and encourage greater input from lay 
individuals who represent local communities throughout the 
country.
    The committee has made significant changes to the National 
Council of the Arts in hopes of improving its function. The 
reduction in the membership of the National Council of the Arts 
will further reduce the bureaucracy at the agency. In addition, 
the smaller membership will allow for more rigorous and 
meaningful discussion and decision making. National Council 
members may make a recommendation for the specific amount of 
funding for a grant award but shall recommend more grant 
applicants for grants than funding available. Members will not 
be eligible for re-appointment unless they have served less 
than 3 years on a previous term. Again, such limits on service 
are intended to increase the breadth of representation on the 
National Council and increase the decision making 
responsibility. More clearly delineating the role of the 
Council will provide further safeguards against charges of 
``rubber stamping'' recommendations of the advisory panels.
    The bill maintains the strict provisions relating to 
sanctions and repayment for direct or indirect recipients of 
funding who have failed to satisfy the purposes for which a 
grant was made. The committee would encourage the agency to 
continue in its effort to provide sufficient follow up in this 
area and fully enforce this provision of the legislation.
    Additional limits are in place to reinforce the notion that 
a grant from the NEA should not be a guaranteed supplemental 
income for either an individual or a group. Individuals are 
limited to 2 grants and groups are limited to 3 grants in a 
year, exempting only States and regional groups. Agreements for 
administrative costs--cooperative agreements--are exempt.
    The legislation includes a provision whereby funds may be 
``recaptured'' from financially successful grants at both the 
National Endowment for the Arts and the National Endowment for 
The Humanities. The committee recognizes the enormous 
contribution that the agencies make in nurturing and supporting 
projects that often become commercial successes and believes 
that a portion of the profits from a successful project should 
be repaid to the agencies.
    In incorporating a similar structure and parallel approach 
for the National Endowment for the Humanities, the committee 
seeks to improve the agency and make it more responsive to the 
public. The committee, in establishing the three grant 
categories, intends to set funding priorities for the agency so 
that it may provide support for those projects which benefit 
the public and advance and preserve the humanities. The 
committee looked to testimony presented before the Education, 
Arts and Humanities subcommittee in making determinations as to 
the Endowment's priorities.
    Partnership Grants, representing 30 percent of appropriated 
funds, will be made to State humanities councils to support, 
promote and foster humanities studies and programs that serve 
the local community. The 30 percent reservation for State block 
grants represents an increase of 10 percent from current law. 
Teacher training services in the humanities for elementary and 
secondary education are shifted to the State level from the 
national level. In making this change, the committee recognizes 
the benefit in having the local community determine the best 
method for teacher training in the humanities and expects 
increased participation in these valuable programs to result. 
Funds to State humanities councils will be distributed by a 
formula which has been maintained from current law. All funds 
in this grant category must be matched on a dollar for dollar 
basis. The committee strongly believes that the balance between 
state and national programs is appropriate.
    National Significance grants represent 35 percent of 
appropriated funds and shall be used to support programs which 
increase public participation and education in the humanities. 
It is the intent of the committee that programs funded through 
national significance grants have a national audience and be of 
national significance. Both groups and individuals are eligible 
for these grants and the total of all funds awarded in this 
category must be matched dollar for dollar. Grant awards for 
endowment building or capital projects require a higher match 
of three nonfederal dollars to every Federal dollar awarded. It 
is the intent of the committee that National Significance 
grants include projects in museums and historical 
organizations, endowment building, projects in libraries and 
archives, public humanities projects, technology activities and 
teacher training in the humanities. Eligibility has been opened 
to State humanities councils, allowing them to compete for 
grants in this category in recognition of the extraordinary 
success many of them have had in developing innovative 
humanities programs. Generally, the creation of this grant 
category recognizes and reinforces the important impact that 
the NEH has on strengthening knowledge about our American 
culture. The benefits of such projects cross State lines and 
make a vital difference in the lives of all people in this 
nation. Therefore, these projects are an important priority to 
be pursued at the national level.
    Research and Scholarship Grants, representing 35 percent of 
appropriated funds, shall be made to groups or individuals to 
encourage the development and dissemination of significant 
scholarship in the humanities. In recognition of the important 
contribution of the NEH in encouraging study and scholarship in 
the humanities, the committee has made projects in the area of 
research and scholarship a priority for the Agency. Research 
and Scholarship grants are intended to support activities which 
may include fellowships for college and university faculty and 
independent scholars, dissertation grants, summer stipends, 
scholarly publications, reference materials, basic research, 
institutional programs, and finally, grants for preservation. 
The total costs of all activities funded in this category must 
be matched on a dollar for dollar basis, nonfederal to Federal 
funds. As with National Significance grants, State humanities 
councils will be eligible to compete for grants in the Research 
and Scholarship category, in recognition of the important 
contributions of State humanities councils. Again, as many of 
the endeavors of the NEH fundamentally benefit our nation and 
our national history, the committee believes that research and 
scholarship activities should be maintained at the national 
level. Preservation projects and research and scholarship 
projects extend beyond the boundaries of one State and can only 
be sufficiently supported by a strong national program. This 
strong national commitment is a focus of S. 856 and the 
committee maintains that the NEH should continue to have the 
capacity to make contributions in supporting and preserving the 
works of scholars and historians as well as stimulating new 
scholarship in the humanities.
    The same determinations made with reference to the National 
Council on the Arts apply to the decisions made by the 
committee to reduce the National Council on the Humanities. The 
smaller membership both reduces the bureaucracy at the agency 
and allows for more meaningful discussion and decision making. 
Members will not be eligible for re-appointment unless they 
have served less than 3 years on a previous term. Again, such 
limits on service are intended to increase the breadth of 
representation on the National Council and increase the 
Council's decision making responsibility.
    The bill maintains the strict provisions relating to 
sanctions and repayment for direct or indirect recipients of 
funding who have failed to satisfy the purposes for which a 
grant was made. The committee would encourage the agency to 
continue in its effort to provide sufficient follow up in this 
area and fully enforce this provision of the legislation.

               TITLE II--MUSEUM AND LIBRARY SERVICES ACT

    The legislation calls for a merger of the Institute for 
Museum Services and the Library Services and Construction Act 
into the Institute for Museum and Library Services. Provisions 
relating to the Institute for Museum Services have been 
maintained from current law while many of the provisions 
relating to the Library Services and Construction Act have been 
changed to reflect the prevailing needs and concerns of the 
American public as they relate to library services. The 
concentration of the library programs has been shifted to 
access and technology. The committee, in merging these 
programs, has noted the benefit to be gained by the American 
public through this closure association. The programs will also 
be strengthened from collaboration and partnership in the 
critical areas of technology and access. The committee believes 
that support for museums and libraries is vital as they are 
institutions which have proven effective in enhancing 
educational opportunities for all. By uniting the forces of 
libraries and museums in local communities, the committee 
believes that learning opportunities will be enhanced for 
individuals in those communities.
    The Director of the Institute for Museum and Library 
Services shall be appointed by the President with the advice 
and consent of the Senate for a term of 4 years. The Director 
will oversee the Office of Museum Services and the Office of 
Library Services. The expertise of the Director shall rotate 
each term between an individual who has special competence with 
regard to library and information services and an individual 
who has competence with regard to museum service in order to 
ensure a balance in administering these programs. The museum 
services program remains as it is now, with a Museum Board 
advising the director on museum policy, while the library 
program will be advised by the National Commission on Library 
and Information Sciences.
    The library program under S. 856, referred to as the 
Library Services and Technology Act, represents a marked 
departure from the current administration and focus of the 
program. The Library Services and Technology Act consolidates, 
streamlines and simplifies administration of the current 
library program with the intent of providing services more 
efficiently. The focus and priorities of the act have been 
changed to library and information access through technology 
and access to libraries and information through the provision 
of special services. In addition, the committee mandates a 
national leadership program designed to enhance the qualify of 
library services nationwide. Funds have been specifically 
reserved to provide assistance for children in poverty, Indian 
tribes and for the national leadership program in library 
science. Administration of the Federal program has been capped 
at 10 percent of authorized funds and administration at the 
State level has been capped at 5 percent of authorized funds. 
Such provisions have been incorporated to ensure that the bulk 
of the money is available to State library administrative 
agencies to serve the local community's needs.
    The committee, in highlighting the importance of 
information access through technology, has sought to afford 
States the ability to improve library and information service 
by providing access to information delivered by libraries. The 
committee intends for funds to be used to support the 
development and improvement of the technology infrastructures 
of libraries. In addition, the committee has sought to assist 
States in improving library and information services for those 
of all ages and cultures who have difficulty getting to a 
library, need special materials of services, or would benefit 
from outreach service. In providing funds to State library 
administrative agencies, the committee intends for them to 
focus on initiatives such as increasing literacy and lifelong 
learning, providing services and materials to special 
populations, and providing services and outreach to people in 
rural or urban areas. The bill provides for a reservation of 
funds to be distributed to the State agency for children in 
poverty, based on a formula of $1.50 for each preschool aged 
child and $1.00 for every school aged child. Priorities for the 
use of such funds include the development of after school 
homework support and summer and vacation reading programs, 
family literacy programs, extension of branch hours to provide 
resources for homework, peer tutoring programs, training 
programs involving library and other service providers and the 
hiring of outreach staff. The committee recognizes the 
importance and value of enhancing library services in the area 
of technology as the nation moves into the 21st century and 
has, therefore, shifted the focus of our national library 
program from construction to information technology. In 
addition, the committee agrees that the provision of special 
services and outreach to underserved communities benefits the 
nation by increasing the educational opportunities available to 
those who might not otherwise receive it.
    It is the committee's intent that the National Commission 
on Library and Information Sciences serve as an advisory board 
to the Director of the Institute for Museum and Library 
Services with respect to general policies. The Director of the 
Institute of Museum and Library Services has been included as 
an ex officio, non voting, member of the Commission. The 
committee does not intend for the Commission to have the 
responsibility to advise or direct State administrative 
agencies on matters of State or local administration of funds 
awarded under this act.
    Since the committee held no hearing on the recommended 
changes in both the structure and the administration of the 
library program, some additional background is provided. Over 
the years LSCA has evolved and changed significantly to meet 
the needs of the Nation.
    In response to the library community's work to consolidate, 
simplify, and update LSCA, the committee made significant 
changes in an effort to continue its spirit but tailor it to 
reflect the information needs of the American people into the 
next century.
    A number of factors came together to provide the momentum 
for change within the library community, including the 
impending sunset of the existing LSCA; the recommendations of 
the 1991 White House Conference on Library and Information 
Services; the emphasis within both branches of government on 
reexamining Federal priorities, increasing government 
accountability, and reinventing Government and the evolving 
information superhighway and changing technologies.
    Spearheaded by the American Library Association (ALA), a 
Task Force on LSCA Reauthorization was established in 1993 with 
representatives from ALA, the Chief Officers of State Library 
Agencies, and the Urban Libraries Council. The groups also 
opened their deliberations to participation or observation from 
the National Commission on Libraries and Information Science, 
and the Office of Library Programs in the Department of 
Education. The result was a proposal in late 1994 for a Library 
Services and Technology Act to replace current law. The 
committee has included a modified version of this proposal in 
the legislation.
    The committee bill states that strong library services are 
essential to empower people to succeed in our Nation's 
increasingly global and technological environment. Most library 
funding is local, but federal stimulus funds are concentrated 
on certain critically important and appropriate national goals. 
The State-based programs under LSTA sharpen the focus on two of 
these goals: to adapt new technologies to identify, preserve, 
and share library and information resources across 
institutional, local, and State boundaries; to ensure that all 
Americans have access to the information superhighway; and to 
extend outreach to those for whom library service requires 
extra effort to special materials (such as new readers, the 
geographically isolated, children in poverty, or people with 
disabilities).
    The committee is also concerned with additional national 
goals: to ensure that the existing information infrastructure 
of libraries is technologically equipped to perform public and 
governmental functions cost effectively, such as supporting 
literacy and lifelong learning; organizing and providing access 
to Federal, State, and local government information; 
undergirding economic development by providing jobs information 
and supporting small businesses; and providing consumer health 
information; and to support education and training in library 
and information science, research and demonstrations relating 
to improvement of library services, and preservation or 
digitization of library materials and resources. To provide 
national-level attention to these goals, the committee bill 
establishes a National Leadership Program to enhance the 
quality of library services nationwide. Of funds appropriated, 
8 percent is reserved to carry out a national leadership 
program in library science. The committee expects that, subject 
to the availability of funds, activities each year under this 
program would include education and training programs, research 
and demonstration projects, and preservation or digitization of 
library materials and resources.
    The committee bill places the administration of library 
programs in an independent agency rather than in the Department 
of Education, as is currently the case with LSCA. The 
independent agency is a combined Institute of Museum and 
Library Services. This step has been taken for a number of 
reasons. The committee believes that in moving the library 
programs from the Department of Education, it will provide an 
opportunity for enhanced stature and stability in this newly 
consolidated Institute of Museum and Library Services. The 
committee notes that fewer than half of the State library 
administrative agencies that administer LSCA funds in the 
States are located in a state department of education. 
Libraries and library agencies, cooperatives, and networks are 
engaged in information infrastructure initiatives, economic 
development initiatives, digital library and preservation 
initiatives, archival and government information activities, 
and many other State and local partnerships that extend beyond 
libraries' educational role. The committee intends that the 
Department of Education should continue its historic role in 
the collection and compilation of data about libraries and 
their users; and its support of libraries in connection with 
educational research, information dissemination, and education 
and training activities, as well as other assistance to 
educational institutions and programs at all levels.
    However, the committee sees great potential in an Institute 
that is focused on the combined roles that libraries and 
museums play in our community life, in support of research, 
learning, and entertainment, and in support of American culture 
and history. The joint museum-library projects called for in 
the committee bill could include projects in which libraries 
and museums cooperate in helping children learn and discover; 
coordinate related preservation projects; make use of 
electronic networks and digital media; or develop joint 
exhibits, to cite just a few examples.
    The committee recognizes that the Institute will need staff 
experienced in, and capable of, administering State-based and 
national library programs. The committee intends that the 
Director of the Institute should give serious consideration to 
candidates who are currently or recently employed in the Office 
of Library Programs at the Department of Education. It is the 
committee's intent that current Federal employees with 
appropriate qualifications be given every consideration in the 
staffing of the Office of Library Services at the Institute.
    In taking this step to integrate these two agencies, the 
committee has also made an effort to preserve the mission and 
integrity of each. The committee intends for the museum program 
and the library program to be equal partners in this newly 
constituted Institute. Museums and libraries are institutions 
that make enormously significant contributions to the 
community, and the committee believes strongly that an 
understanding of this balance with regard to their benefit and 
utility continue to be recognized and respected.

              Title III--Arts and Artifacts Indemnity Act

    The committee has not made significant changes to the Arts 
and Artifacts Indemnity program. Since its creation, the Arts 
and Artifacts Indemnity Act, at little cost to the Federal 
Government, has provided the insurance needed to bring 
acclaimed international exhibitions to communities throughout 
the United States. It has permitted millions of Americans to 
benefit from touring exhibitions which might otherwise be 
unavailable to them. With the extension of indemnification to 
United States exhibitions touring throughout our nation, this 
program will make American exhibitions even more widely 
available.
    The committee eliminates the Federal Council on the Arts 
and Humanities since all its functions are exercised by other 
agencies. One function that it has performed well has been in 
making decisions regarding the Arts and Artifacts Indemnity Act 
program. Thus, in passing that final decision making role to 
the Chairperson of the NEA, the committee encourages the 
Chairperson to seek the advice of the other agencies 
represented currently on the Federal Council in the review 
process for the program. The committee suggests that the NEA 
utilize such a process and receive input from individuals from 
other interested agencies when making indemnification 
decisions. The committee is aware that concerns remain 
regarding accountability and will continue to examine this 
issue.

                           VI. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 24, 1995.
Hon. Nancy Landon Kassebaum,
Chairman, Committee on Labor and Human Resources,
U.S. Senate, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 856, the Arts, 
Humanities, and Museums Amendments of 1995, as ordered reported 
by the Senate Committee on Labor and Human Resources on July 
19, 1995.
    The bill would affect direct spending and thus would be 
subject to pay-as-you-go procedures under section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

               congressional budget office cost estimate

    1. Bill number: S. 856.
    2. Bill title: Arts, Humanities, and Museums Amendments of 
1995.
    3. Bill status: As ordered reported by the Senate Committee 
on Labor and Human Resources.
    4. Bill purpose: S. 856 would extend the authorizations of 
the National Endowment for the Arts and the National Endowment 
for the Humanities through fiscal year 2000. In addition, the 
bill would establish a new Institute of Museum and Library 
Services under the Foundation on the Arts and Humanities. The 
bill would move the current Institute for Museum Services to 
the new agency and reauthorize those museum programs for fiscal 
years 1996-2000. S. 856 would repeal the current authorization 
for library programs under the Library Services and 
Construction Act and title II of the Higher Education Act of 
1965. In its place, a new Office of Library Services would be 
established within the Institute of Museum and Library 
Services. The bill would establish two new library grant 
programs which would be administered by the Office of Library 
Services and would authorize their funding for fiscal years 
1996-2000.
    5. Estimated cost to the Federal Government: The following 
table shows spending under S. 856 with adjustments for 
inflation where such sums as may be necessary are authorized. 
When inflation is considered, the authorizations for the Office 
of Museum Services and the Office of Library Services are 
estimated to grow over time.

     PROJECTED SPENDING UNDER S. 856--WITH INFLATION ADJUSTMENT FOR     
                       UNSPECIFIED AUTHORIZATIONS                       
                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                      1995     1996     1997     1998     1999     2000 
------------------------------------------------------------------------
                     National Endowment for the Arts                    
Authorizations of                                                       
 appropriations                                                         
 under current                                                          
 law:                                                                   
    Budget                                                              
     authority \1\      167  .......  .......  .......  .......  .......
    Estimated                                                           
     outlays......      166      114       34       14  .......  .......
Proposed changes:                                                       
    Authorization                                                       
     level........  .......      154      146      139      132      125
    Estimated                                                           
     outlays......  .......       47      123      132      139      132
Authorizations of                                                       
 appropriations                                                         
 under S. 856:                                                          
    Authorizations                                                      
     level \1\....      167      154      146      139      132      125
    Estimated                                                           
     outlays......      166      161      157      147      139      132
                  National Endowment for the Humanities                 
Authorizations of                                                       
 appropriations                                                         
 under current                                                          
 law:                                                                   
    Budget                                                              
     authority \1\      177  .......  .......  .......  .......  .......
    Estimated                                                           
     outlays......      185      104        4        9  .......  .......
Proposed changes:                                                       
    Authorization                                                       
     level........  .......      160      152      145      137      130
    Estimated                                                           
     outlays......  .......       69      123      143      143      136
Authorizations of                                                       
 appropriations                                                         
 under S. 856:                                                          
    Authorization                                                       
     level \1\....      177      160      152      145      137      130
    Estimated                                                           
     outlays......      185      173      163      151      143      136
                        Office of Museum Services                       
Authorizations of                                                       
 appropriations                                                         
 under current                                                          
 law:                                                                   
    Budget                                                              
     authority\1\.       29  .......  .......  .......  .......  .......
    Estimated                                                           
     outlays......       46       20  .......  .......  .......  .......
Proposed changes:                                                       
    Authorization                                                       
     level........  .......       29       30       31       32       33
    Estimated                                                           
     outlays......  .......        8       29       30       31       32
Authorizations of                                                       
 appropriations                                                         
 under S. 856:                                                          
    Authorization                                                       
     level\1\.....       29       29       30       31       32       33
    Estimated                                                           
     outlays......       46       29       29       30       31       32
                       Office of Library Services                       
Authorizations of                                                       
 appropriations                                                         
 under current                                                          
 law:                                                                   
    Budget                                                              
     authority....      144      149       12       13  .......  .......
    Estimated                                                           
     outlays......      145      146       98       48        7        3
Proposed changes:                                                       
    Repeal                                                              
     existing                                                           
     program:                                                           
        Authorizat                                                      
         ion level  .......     -149      -12      -13  .......  .......
        Estimated                                                       
         outlays..  .......      -54      -61      -48       -7       -3
    Authorize new                                                       
     programs:                                                          
        Authorizat                                                      
         ion level  .......      150      155      161      166      172
        Estimated                                                       
         outlays..  .......       60      118      156      162      167
Authorizations of                                                       
 appropriations                                                         
 under S. 856:                                                          
    Authorization                                                       
     level........      144      150      155      161      166      172
    Estimated                                                           
     outlays......      145      152      155      156      162     167 
------------------------------------------------------------------------
\1\ The 1995 figure is the amount actually appropriated for that fiscal 
  year.                                                                 
                                                                        
Notes.--Details may not add to totals due to rounding. Authorizations of
  library programs assume a one-year extension as provided under the    
  General Education Provisions Act (GEPA).                              

    The following table summarizes the estimated budgetary 
impact of the bill without adjustments for inflation where such 
sums as may be necessary are authorized. The authorizations for 
the Office of Museum Services and the Office of Library 
Services are assumed to equal the 1996 authorized levels. 
Because authorizations for the National Endowment for the Arts 
and the National Endowment for the Humanities are specified in 
the bill, the estimates for those programs are the same as in 
the table with adjustments for inflation above.

    PROJECTED SPENDING UNDER S. 856--WITH NO INFLATION ADJUSTMENT FOR   
                       UNSPECIFIED AUTHORIZATIONS                       
                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                      1995     1996     1997     1998     1999     2000 
------------------------------------------------------------------------
                     National Endowment for the Arts                    
Authorizations of                                                       
 appropriations                                                         
 under current                                                          
 law:                                                                   
    Budget                                                              
     authority \1\      167  .......  .......  .......  .......  .......
    Estimated                                                           
     outlays......      166      114       34       14  .......  .......
Proposed changes:                                                       
    Authorization                                                       
     level........  .......      154      146      139      132      125
    Estimated                                                           
     outlays......  .......       47      123      132      139      132
Authorizations of                                                       
 appropriations                                                         
 under S. 856:                                                          
    Authorization                                                       
     level \1\....      167      154      146      139      132      125
    Estimated                                                           
     outlays......      166      161      157      147      139      132
                  National Endowment for the Humanities                 
Authorizations of                                                       
 appropriations                                                         
 under current                                                          
 law:                                                                   
    Budget                                                              
     authority \1\      177  .......  .......  .......  .......  .......
    Estimated                                                           
     outlays......      185      104       40        9  .......  .......
Proposed changes:                                                       
    Authorization                                                       
     level........  .......      160      152      145      137      130
    Estimated                                                           
     outlays......  .......       69      123      143      143      136
Authorizations of                                                       
 appropriations                                                         
 under S. 856:                                                          
    Authorization                                                       
     level \1\....      177      160      152      145      137      130
    Estimated                                                           
     outlays......      185      173      163      151      143      136
                        Office of Museum Services                       
Authorizations of                                                       
 appropriations                                                         
 under current                                                          
 law:                                                                   
    Budget                                                              
     authority \1\       29  .......  .......  .......  .......  .......
    Estimated                                                           
     outlays......       46       20  .......  .......  .......  .......
Proposed changes:                                                       
    Authorization                                                       
     level \1\....  .......       29       29       29       29       29
    Estimated                                                           
     outlays......  .......        8       29       29       29       29
Authorizations of                                                       
 appropriations                                                         
 under S. 856:                                                          
    Authorization                                                       
     level........       29       29       29       29       29       29
    Estimated                                                           
     outlays......       46       29       29       29       29       29
                       Office of Library Services                       
Authorizations of                                                       
 appropriations                                                         
 under current                                                          
 law:                                                                   
    Budget                                                              
     authority....      144      144       11       11  .......  .......
    Estimated                                                           
     outlays......      145      145       96       46        7        3
Proposed changes:                                                       
    Repeal                                                              
     existing                                                           
     programs:                                                          
        Authorizat                                                      
         ion level  .......     -144      -11      -11  .......  .......
        Estimated                                                       
         outlays..  .......      -53      -59      -46       -7       -3
    Authorize new                                                       
     programs:                                                          
        Authorizat                                                      
         ion level  .......      150      150      150      150      150
        Estimated                                                       
         outlays..  .......       60      116      150      150      150
Authorizations of                                                       
 appropriations                                                         
 under S. 856:                                                          
    Authorization                                                       
     level........      144      150      150      150      150      150
    Estimated                                                           
     outlays......      145      152      153      150      150      150
------------------------------------------------------------------------
\1\ The 1995 figure is the amount actually appropriated for that fiscal 
  year.                                                                 
Notes.--Details may not add to totals due to rounding. Authorizations of
  library programs assume a one-year extension as provided under the    
  General Education Provisions Act (GEPA).                              

    The costs of this bill fall within budget function 500.
    6. Basis of Estimate: S. 856 reauthorizes through fiscal 
year 2000 the National Endowments for the Arts and Humanities. 
These programs currently are authorized only through fiscal 
year 1995. The amounts authorized for fiscal years 1996 through 
2000 are stated in the bill. The National Endowment for the 
Arts would be reauthorized for a total amount of $696 million 
over 5 years. The National Endowment for the Humanities would 
be reauthorized for a total of $724 million over the same 
period.
    S. 856 also amends the Museum Services Act (renamed the 
Museum and Library Services Act) to establish within the 
Foundation on the Arts and Humanities an Institute of Museum 
and Library Services. The Institute would consist of an Office 
of Museum Services (absorbing the existing Institute for Museum 
Services) and an Office of Library Services. The bill provides 
for a new Director of the Institute and a Deputy Director of 
the Office of Library Services. CBO estimated that the costs 
for these two new positions would be less than $500,000 each 
year.
    S. 856 authorizes the appropriation of $29 million in 1996 
for grants and projects to improve museums which would be 
administered by the Office of Museum Services. The bill would 
also authorize such sums as may be necessary for 1997 through 
2000 for these programs. Estimated outlays assume full 
appropriation of the amounts authorized and the continuation of 
the current spending pattern.
    S. 856 authorizes the appropriation of $150 million for 
fiscal year 1996 and such sums as may be necessary for 1997 
through 2000 for two new library programs to be administered by 
the newly created Office of Library Services. The Information 
Access Through Technology program, authorized at $75 million 
for fiscal year 1996, would provide grants to states to improve 
library access to information delivered through new 
technologies. The Information Empowerment Through Special 
Services program, authorized at $75 million for fiscal year 
1996, would provide grants to states to ensure access to 
library services to all persons, including children in poverty 
and individuals who live far from libraries.
    In addition, S. 856 repeals the Library Services and 
Construction Act and title II of the Higher Education Act of 
1965, which currently authorize several library programs 
administered by the Department of Education. The Library 
Services and Construction Act authorizes programs that support 
public libraries with appropriations totalling $133 million in 
1995. Title II of the Higher Education Act of 1965 authorizes 
programs that support college libraries with appropriations 
totalling $11 million in 1995. Total appropriations for 
programs under these two acts repealed by S. 856 were $144 
million in 1995.

                                receipts

Office of Library Services

    S. 856 authorizes the new Institute of Museum and Library 
Services to accept and use or dispose of gifts and donations of 
property and services in carrying out the act. Since donations 
are uncommon in other instances when agencies of these 
departments have this authority, and because no particular 
gifts are expected, CBO has not estimated any direct spending 
effects from this provision.

National Endowment for the Arts and the National Endowment for the 
        Humanities

    S. 856 authorizes the chairpersons of the two endowments to 
recapture funding to grantees who have experienced commercial 
success for their projects within 5 years after the end of the 
grant. Recaptured funds would go into the Treasury in an 
account credited to the appropriate endowment. Because it 
appears that this provision could not be applied retroactively, 
and because funds that could be recaptured under this bill are 
subject to subsequent appropriations actions, CBO estimates 
that there will be no budgetary impacts over the next 5 years.
    7. Pay-as-you-go considerations: Section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts through 1998. Because several sections of 
this bill would affect receipts and direct spending, pay-as-
you-go procedures would apply. The following table shows the 
estimated pay-as-you-go impact of this bill:

------------------------------------------------------------------------
                                        1995     1996     1997     1998 
------------------------------------------------------------------------
Change in Outlays...................        0        0        0        0
Change in Receipts..................        0        0        0        0
------------------------------------------------------------------------

    8. Estimated cost to State and local governments: The 
Federal share of grants awarded by the National Endowments for 
the Arts and Humanities under S. 856 would range from 25 to 50 
percent of the total program costs. State and local governments 
or private entities would assume the remaining costs of 
activities. Both endowments award categorical grants on a 
competitive basis.
    The Federal share of grants awarded by the Office of Museum 
Services shall not exceed 50 percent, with nonfederal sources 
paying for the other share. These grants would be categorical 
as well.
    The Federal share of the new library programs would be 50 
percent, compared to 33 percent to 66 percent (varying by 
state) for current public library programs that would be 
repealed under the bill. Funds would be distributed to States 
by formula. States and local governments that do not maintain 
their efforts in supporting the programs would have Federal 
funding reduced.
    9. Estimate comparison: None.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Justin Latus.
    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                    VII. Regulatory Impact Statement

    The committee has determined that there will be only a 
negligible increase in the regulatory burden of paperwork as a 
result of this legislation.

                   VIII. Section-by-Section Analysis

            arts, humanities, and museums amendments of 1995

    To amend the National Foundation on the Arts and the 
Humanities Act of 1965, the Museum Services Act, and the Arts 
and Artifacts Indemnity Act to improve and extend the arts, and 
for other purposes.
    The short title is presented as the Arts, Humanities and 
Museums Amendments of 1995.

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

    Section 1 of the bill amends the National Foundation on the 
Arts and the Humanities Act to provide a short title to be 
cited as the ``National Foundation on the Arts and the 
Humanities Act of 1965'' and includes a table of contents, 
indicating how current law will be reorganized, restructured, 
and replaced.
    Section 2 of the bill alters the ``Purposes'' in current 
law by changing the number of purposes from 12 to 9 with 
subparts. The ``purposes'' are reworded and reordered, but 
still include some of the same basic tenets as in current law. 
The first purpose adds a new phrase ``to support the arts and 
the humanities that are essential to social, cultural, and 
economic progress.'' The second purpose reiterates that support 
of the arts and humanities, while primarily matters for private 
and local initiative are also appropriate matters of concern 
for the Federal Government.
    Section 3 of the bill alters current law definitions and 
adds a new definition of program income. Under Section 3(1) the 
bill amends the definition of the ``arts'' to include dance, 
design, literature, media, music, theater, and visual arts; as 
well as folk and traditional arts; and the study of the arts 
through apprenticeships or work-study experiences for artists 
and art teachers. It eliminates from the current law definition 
of the ``arts'' the specific terms opera, film and video, 
graphic and craft arts, industrial design, architecture and 
allied fields, creative writing, costume and fashion design, 
painting, sculpture, and photography. Section 3(5) amends the 
current law definition of ``Humanities'' by adding the study 
and interpretation of ``folklore and folklife.'' Section 3(6) 
contains a new definition of ``program income'' to mean any 
money earned or received by a recipient of an NEA or NEH grant. 
It outlines types of income from the sale of an item created, 
from a licensing fee, a rental fee for equipment, an admission 
fee, broadcast or distribution right, or a royalty on a patent 
or copyright. This section also adds definitions of ``grant,'' 
``group,'' ``cultural heritage,'' ``regional group,'' 
``State,'' and ``underserved communities.''

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

    Section 101 of the bill authorizes the National Foundation 
on the Arts and the Humanities composed of a National Endowment 
for the Arts, a National Endowment for the Humanities, and a 
new Institute of Museum and Library Services (that replaces and 
incorporates the current institute of Museum Services), the 
purpose of which is to promote a National policy of support for 
the arts and the humanities in the United States. The bill 
keeps the same limitation as current law on Federal control. It 
defines donations, bequests, and devises, both restricted and 
unrestricted, and outlines what tax laws will affect gifts to 
the Foundation.
    Section 102 of the bill prohibits grants from being used 
for the purposes of lobbying or providing membership services 
for groups.
    Section 103 of the bill provides for joint administration 
of NEA and NEH, with the Inspector General's Office to be 
shared. This section requires the Chairperson of NEA and of NEH 
to prepare a joint administrative plan not later than 60 days 
after enactment, to be implemented in not less than 180 days.
    Section 104 of the bill provides for the Chairperson of the 
NEA and the Chairperson of the NEH, in consultation with 
persons with expertise in the arts, humanities, business, 
charitable giving and copyright, to jointly conduct or contract 
for a study on creating a true endowment that would provide 
supplemental funding to the agencies and report on their 
findings to Congress within a year.
    Section 105 of the bill provides authorizations of 
appropriations for the Foundation through fiscal year 2000. It 
authorizes total appropriations for NEA: $153,900,000 for 
fiscal year 1996, $146,205,000 for fiscal year 1997, 
$138,895,000 for fiscal year 1998, $131,950,000 for fiscal year 
1999 and $125,353,000 for fiscal year 2000. Forty percent of 
the amount appropriated is reserved for making partnership 
grants, 40 percent for national significance grants, 10 percent 
for direct grants, and 10 percent for arts education and 
undereserved communities grants. Section 105 authorizes total 
appropriations for NEH: $160,117,000 for fiscal year 1996, 
$152,111,000 for fiscal year 1997, $144,505,000 for fiscal year 
1998, $137,260,000 for fiscal year 1999, and $130,397,000 for 
fiscal year 2000. Thirty percent of the amount appropriated is 
reserved for partnership grants (with 5 percent under 
partnership grants to be reserved for activities relating to 
elementary and secondary education in the humanities); 35 
percent for national significance grants, and 35 percent for 
scholarly research grants. Section 105(c) limits administrative 
costs for NEA and NEH to not more than 12 percent of the amount 
appropriated, with not more than $100,000 available for the 
President's Committee on the Arts and the Humanities. Both are 
limited to $100,000 for official reception and representation 
expenses for fiscal year 1996 and $50,000 thereafter from 
donated funds. Up to 3 percent of total appropriations would be 
available for employee severance pay and employee buy out 
programs for the NEA only.

               TITLE II--NATIONAL ENDOWMENT FOR THE ARTS

    Section 201 of the bill defines ``developing arts 
organization,'' ``final judgment,'' ``local arts agency,'' 
``obscene,'' ``determined to be obscene,'' ``production,'' 
``project,'' ``renovation and construction,'' and ``workshop.'' 
In defining ``obscenity,'' the word ``program'' in the current 
law definition is changed with ``projects, productions, and 
workshops,'' which are used consistently throughout the 
legislation. As in current law, ``determined to be obscene'' 
means in the ``final judgment of a court of record.'' When 
defining ``production,'' the bill eliminates specific arts 
disciplines as part of the definition and defines production as 
any activity involving the execution or rendition of the arts, 
meeting such standards as may be approved by the Chairperson of 
the NEA. It adds to the term ``project'' the phrase ``to 
enhance the widest public access, knowledge and understanding 
of the arts.''
    Section 202 of the bill establishes the National Endowment 
for the Arts. It provides that the Chairperson of NEA be 
appointed by the President by and with advice and consent of 
the Senate for a 4-year term, as in current law. It allows the 
Chairperson to serve the remainder of a predecessor's term, or 
to serve until a successor is appointed, and the Chairperson is 
eligible for reappointment.
    Section 202(c) of the bill provides a new section for 
Partnership Grants, those grants to States, local and regional 
groups, for local arts activities, with preference to arts 
education and projects that reach rural and urban underserved 
communities. This section rearranges but contains similar 
language as in the current law NEA State grants-in-aid section. 
Section 202 (c) of the bill directs that funds be used for 
basic State grants and outlines types of projects funded as 
follows: first, projects that meet standards of excellence and 
artistic merit; that broaden public access to the arts in rural 
and urban underserved communities (although this section takes 
out the specific reference in current law to ``tribal 
community''); that enhance the artistic capabilities of 
developing arts organizations through staff development; and 
that provide technical assistance to improve long range fiscal 
planning. Application procedures must be in accordance with a 
State plan, designating a sole agency for the administration of 
the State plan; and providing that funds expended are solely 
for the projects approved by the State agency. Reports are 
required as they are in current law, describing the progress 
made, objectives of the plan, and most recent information on 
projects available to all people and communities in the State, 
especially to underserved communities. The Chairperson has 
final approval on whether the State plan satisfies 
requirements.
    Section 202 of the bill, as in current law, authorizes a 
minimum State allotment of $200,000. If funds are insufficient, 
then funds would be allotted in equal amounts. In the case of 
excess funds, 25 percent of funds available would be for the 
Chairperson to make grants to States and regional groups. The 
remainder of the excess would be allotted to each State in 
equal amounts, with no State receiving less than $200,000. In 
general, the Federal share pays not more than 50 percent of the 
total cost of activities, with some exceptions. For any grant 
exceeding $125,000, 100 percent of the cost may be paid. 
However, grant funds used to pay 100 percent of cost cannot 
exceed 20 percent of the total funding. There is a clause 
prohibiting supplanting of non-Federal funds. With regard to 
excess funds, ``State'' is defined as including those 
jurisdictions with a population of 200,000 or more.
    Section 202(d) of the bill provides a new separate 
authority for National Significance Grants to groups to 
increase access of all people, especially underserved 
communities, to the ``best of arts and culture'' in the United 
States. The Chairperson, with the recommendation of the 
National Council on the Arts provides grants for projects with 
national, regional or substantial artistic or cultural impact, 
including projects for long-range financial planning, increased 
community support; technology use; and access for individuals 
with disabilities, minority, or underserved populations. The 
Federal share for these grants may not exceed 25 percent with 
exceptions, or if the annual budget of an institution is in 
excess of $3 million, the Federal share is 16.67 percent. Up to 
10 percent of funds may be available to pay up to 50 percent of 
the total cost of a project, production or workshop. Generally, 
priority shall be given to those projects, productions or 
workshops that increase access to the public, especially 
underserved communities, to culture and the arts through 
touring, or national dissemination, or by geographic 
dispersion.
    Section 202(e) of the bill provides a new separate 
authority for Direct Grants to individuals and groups broadly 
representative of cultural heritage and geographically 
representative. Grants would be awarded only to individuals for 
literature fellowships. The Chairperson with the National 
Council on the Arts' recommendation provides grants to groups 
or individuals who meet the standard of artistic excellence and 
artistic merit and that fulfill the purposes of the Act. The 
Federal share is generally 50 percent with not more than 20 
percent of the funds available with an increased Federal share. 
Priority will be given to projects that will be disseminated 
widely after completion.
    Section 202(f) of the bill provides a new separate 
authority for Arts education and underserved communities 
grants. It would provide grants to State arts agencies, local, 
or regional groups to promote and improve the quality of arts 
instruction and arts education; to develop arts faculty; to 
support arts curricular development; to support 
apprenticeships, internships and work-study experiences for 
artists and arts teachers; to provide technical assistance and 
increase capacity of developing arts organizations in 
underserved communities through staff development and long-
range fiscal planning. The Federal share would be 50 percent.
    Section 203 of the bill outlines the application process 
with similar provisions to current law. Applications must be in 
accordance with regulations and procedures established by the 
Chairperson. Applications for grants must insure artistic 
excellence, be judged by advisory panels, and take into 
consideration ``general standards of decency and respect for 
the diverse beliefs and values of the public of the U.S.'' In 
selecting groups as recipients, preference would be for 
artistically underserved rural and urban areas, and artists and 
artistic groups traditionally under-represented. Regulations 
must reiterate that obscenity is without artistic merit, is not 
protected speech and will not be funded. As in current law, 
this section clarifies that the disapproval of an application 
is not to be construed as evidence that work is obscene.
    Section 204 of the bill outlines requirements for advisory 
panels. Panels would review grants on the basis of artistic 
excellence and artistic merit yet would recommend only general 
ranges of funding. Regulations must ensure that panel members 
reflect a wide geographic, ethnic and minority representation, 
as well as diverse cultural points of view. Two of the members 
would be lay individuals, with knowledge about the arts, but 
not engaged in arts as a profession or employees of artists or 
arts organizations. This section repeats the qualifications and 
report requirements as in current law. Each panel will make 
written records of meetings, and make those records available 
to the public while protecting individual applicants. This 
section permits site visits of an applicant's work being 
reviewed. One new clause directs that each panel will recommend 
more applicants for grants than are anticipated can be provided 
funding. This section requires that each panel change from year 
to year and provides that no individual serve more than 5 
years, no two of which may be consecutive years. This section 
prohibits any panel member from serving who has a conflict of 
interest, i.e., who is an employee or associated with an agency 
with a pending application or who has any direct or indirect 
financial interest in any application, until a final decision 
on the application has been reached by the Chairperson.
    Section 205 of the bill establishes the National Council on 
the Arts consisting of the Chairperson of the NEA as the Chair 
of the Council, and reduces the number from 26 (in current law) 
to 20, the other members appointed by the President, by and 
with the advice and consent of the Senate. The bill describes 
selection of members who are private citizens widely recognized 
for their broad knowledge in the arts with established records 
of service; and having achieved eminence in the arts. These may 
include practicing artists, civic cultural leaders, members of 
cultural professions and others who are professionally engaged 
in the arts; allowing an appropriate distribution of members 
among the major art fields. The bill does not mention museum 
professionals as in current law. The President may consider 
recommendations by leading national organizations in major art 
fields. There must be due regard to equitable representation of 
women, racially diverse individuals, and individuals with 
disabilities, who are involved in the arts. Members would serve 
6-year terms, but these would be staggered, expiring the third 
day of September in the year of expiration, with some serving 
the remainder of an individual's term in the case of a vacancy; 
or serving after expiration until a successor takes office. Due 
to the reduction in the size of the Council the terms of 10 
members whose terms would normally expire September 3, 1996 
would expire Jan. 1, 1996 and four members will be appointed to 
serve until Sept. 3, 2002. Compensation is changed from current 
law level of GS-18 to a fixed daily rate not to exceed a GS-15. 
The Council will meet at least twice, with 11 members 
constituting a quorum, and all policy meetings will be open to 
the public.
    Section 205 of the bill describes the Council's duties to 
advise the NEA Chairperson on policies, to review grant 
applications, and to make recommendations with respect to 
approval, funding, and criteria or artistic excellence and 
artistic merit, including the extent to which the applicant 
serves an underserved community. This section institutes a new 
provision requiring the National Council to recommend more 
applications that can be provided funding. The Council is 
required to have written records of meetings, and to make 
records available to the public while protecting the privacy of 
individual applicants for grants. The Chairperson may not 
approve or disapprove grants until it has received the 
recommendation of the Council. The section clarifies that the 
Chairperson has final authority to approve and to determine the 
final amount of funding. As in current law, the Chairperson may 
not approve an application if the Council makes a negative 
recommendation. In the case of an application or an amendment 
to an application involving $35,000 or less or a request for a 
change in a grant amount of 20 percent or less, the Chairperson 
may approve or disapprove the amendment if such delegation of 
authority does not exceed 2 percent of appropriations.
    Section 206 of the bill prohibits subgranting and seasonal 
support to groups. The Chairperson must ensure that no grants 
except those made to State or regional groups are used to make 
grants to any other organization or individual to conduct 
activity independent of the original grant recipient. This 
section also includes compliance with Department of Labor 
standards for minimum compensation for professional performers 
and related personnel, and compliance with safety and sanitary 
laws as prescribed by the Secretary of Labor. Grant awards are 
limited to two for individual and three for agencies or groups 
other than a State agency. Cooperative agreements too are 
excluded from this limit. Groups must be nonprofit. An 
individual receiving direct grants must be a citizen or other 
national of the United States; be a permanent resident or 
filing for naturalization; or be not permanently ineligible to 
become a citizen. The Chairperson distributes payments in 
installments, so that not more than two-thirds of the grant is 
disbursed at the time the grant is approved, with the remainder 
released when the Chair finds compliance. Any loan made must be 
in accordance with the terms of the Secretary of the Treasury.
    Section 207 of the bill outlines administrative provisions 
for NEA that are comparable to those in current law. The 
Chairperson must prescribe regulations for the Chairperson's 
functions. The Chairperson would solicit, accept, receive, 
invest and use money and other property bequeathed or devised; 
or could use, sell, or dispose of such property for carrying 
out activities of the endowment. The Chairperson appoints and 
pays employees, and may procure temporary and intermittent 
services of experts; utilize voluntary services; make payments, 
and rent office space. For publications, the Chairperson 
consults with the Joint Committee on Printing. The Chairperson 
coordinates the programs of NEA with other Federal agencies and 
may enter into interagency agreements. The role of the Federal 
Council on the Arts and the Humanities has been deleted.
    Section 208 of the bill outlines NEA report requirements. 
The Chairperson must submit an annual report on or before April 
15, summarizing the activities of NEA for the preceding year. 
Each applicant is required to submit financial reports, a 
timetable for completion, and assurances that standards of 
artistic excellence and artistic merit are being met. Each 
grant recipient must carry out projects as described in the 
application or justify any requested change in writing; make 
interim reports, financial reports, and final reports including 
the condition that standards of artistic excellence and 
artistic merit are being met. The Chairperson determines the 
appropriate form of interim reporting, and where practicable 
requires a copy of the project or production. The Chairman 
conducts a postaward evaluation. There will be no additional 
funding unless each recipient has submitted interim, financial 
and final reports.
    Section 209 of the bill delineates sanctions, payment 
provisions and contains a new ``recapture'' clause. If any 
recipient of a grant fails to satisfy the grant purposes, the 
Chair can deny any subsequent funding after consideration of a 
post award evaluation. Also direct or indirect recipients are 
prohibited from using the name of the endowment; and if the 
product was a publication, it is to carry a disclaimer that the 
findings, conclusions, recommendations expressed in this 
publication do not reflect the views of NEA. After determining 
noncompliance, the Chairperson, after providing reasonable 
notice and a hearing, could deny further funding and if 
compliance is impossible, the recipient must repay or arrange 
for repayment. If a determination has been made that the work 
is ``obscene,'' after reasonable notice and a hearing, the 
recipient must repay the funding and no subsequent funding 
would be provided. Funds repaid are to be deposited in the 
Treasury as miscellaneous receipts. As in current law, this 
subsection would not apply to grants made before October 1990, 
and would not apply after expiration of a 7-year period.
    Section 209 of the bill includes new language for 
``recapture'' provisions whereby a recipient shall pay one-
third to one-half of the amount of revenue generated within 5 
years after the end of the grant period, but not more than the 
amount of funding--when that recipient has derived net program 
income for a project that exceeds the lesser of $50,000 or 
twice the amount of funding. The Chairperson may increase the 
amount of funding to be paid back above the amount of the grant 
if an agreement has been reached with the grantee upon award. 
The U.S. Treasurer would deposit funds paid or repaid under 
this act in a special interest bearing account to the credit of 
the Endowment.
    Section 210 of the bill outlines provisions for the 
National Medal of Arts. The Medal of appropriate design is to 
be awarded by the President on the basis of recommendations 
from the National Council on the Arts to individuals or groups 
deserving of special recognition for their outstanding 
contribution to the excellence, growth, support, and 
availability of the arts in the United States. Awards are 
limited to 12 in any calendar year. Awards can be for 
individuals or groups if organized or incorporated in the 
United States. The ceremony is a presentation by the President. 
In addition, the Chairperson shall present an award for 
distinguished lifetime service for the Arts to former 
Chairpersons to celebrate the 30th anniversary of Endowment. 
Funding for this will come from donated funds.

            TITLE III--NATIONAL ENDOWMENT FOR THE HUMANITIES

    Section 301 of the bill includes definitions of 
``project,'' ``renovation or construction'' and ``workshop.''
    Section 302 of the bill establishes the National Endowment 
for the Humanities. It provides that the Chairperson of NEH be 
appointed by the President by and with advice and consent of 
the Senate for a 4-year term. The Chair may serve the remainder 
of a predecessor's terms; or may serve until a successor is 
appointed; and the Chairperson is eligible for reappointment.
    Section 302(c) of the bill authorizes NEH partnership 
grants, grants to States agencies or State entities, to support 
programs of the humanities councils at the State and local 
level. The Chairperson of NEH acting with the recommendation of 
the National Council on the Humanities is authorized to make 
grants to assist State entities. The Federal share will be not 
more than 50 percent of the cost. Contributions from non-
Federal sources will go into a trust fund for long-term 
financial support for State activities.
    Section 302(c) of the bill provides that a state agency be 
designated as the sole agency for administration of the State 
plan. In any State agency's application for a State plan the 
chief executive officer of the State may appoint members to the 
State humanities council. These grants provide for expenditure 
from State funds an amount equal to 50 percent of the portion 
of funding through the minimum State allotment or 25 percent 
through partnership grants made, whichever is greater for the 
fiscal year involved. Funds must be expended solely on 
activities approved by the State agency to bring the humanities 
to the public. The State agency must report the progress made 
toward achieving the objectives of the State plan; including a 
written description of the level of participation by scholars 
and scholarly organizations supported; and a description of 
activities addressing the availability of the humanities to all 
people. The Chairperson may not approve an application unless 
the State plan satisfies these requirements.
    Section 302(c) of the bill authorizes grants to appropriate 
State entities, and the language is similar to that in current 
law. In any State in which the chief executive officer of the 
State fails to submit an application, the Chairperson may make 
grants to an appropriate entity in the State, if eight members 
of the council are appointed by an appropriate officer or 
agency of the State. The Officer would select members from 
among individuals who have knowledge or experience in the 
humanities. If a State fails to submit an application, any 
appropriate entity desiring to receive a grant may submit an 
application accompanied by a State plan, providing assurances 
of compliance designed to bring the humanities to the public; 
establishing a membership policy; providing for a nomination 
process; a membership rotation process; reporting procedures; 
ensuring public access to information; and making reports as 
required. The entity must provide public meetings in the State 
to allow scholars and interested organizations and the public 
to present views and make recommendations concerning the State 
plan. The plan must describe participation by scholars, and 
activities supported that address the availability of the 
humanities to all people or communities.
    Section 302(c) of the bill provides minimum State 
allotments of at least $200,000 as under current law. If funds 
are insufficient then funds will be allotted in equal amounts. 
In the case of excess funds, 34 percent of funds available will 
be for the Chairperson to make grants to State entities. Forty-
four percent will be allotted so that each state receives an 
equal amount. The remainder will be allotted so that each State 
entity receives an amount that bears the same ratio to the 
remainder as State population does to national population. In 
general, the Federal share pays not more than 50 percent of the 
total cost of activities with some exceptions. For some grants 
to State entities exceeding $125,000 a portion may pay 100 
percent of the cost. However, only 20 percent of total grants 
funds may be used to pay 100 percent of the cost. Funds shall 
not be used to supplant non-Federal funds. The Chairperson may 
not make grants to more than one entity in any State.
    Section 302(d) of the bill provides a new section with a 
separate authority for National Grants for groups, individuals 
and State agencies or entities to carry out activities relating 
to education and the public humanities that have a national 
audience, and are of national significance. Such activities 
include postsecondary education in the humanities; media 
projects, projects in museums, by historical organizations; 
projects in libraries, archives; public humanities projects; 
endowment building, and technology activities. The Chairperson 
with the National Council on the Humanities' recommendation 
makes grants to projects that meet the standard of excellence 
in the humanities and significance in the humanities. National 
grants are for the following purposes, some of which appear in 
current law: to develop a national policy to further the public 
good through public funding of the humanities; to strengthen 
research and humanities teaching; to foster information 
exchange, education, public understanding, and appreciations of 
the humanities; to support projects that promote literacy; to 
ensure the benefit of programs otherwise unavailable for 
geographic or economic reasons; to increase the range of 
contributors, provide management improvement and long-range 
financial planning for cultural institutions and organizations; 
to increase audience participation; to develop new sources of 
long-term support including renovation or construction of 
facilities; to stimulate greater cooperation among cultural 
institutions; and to foster greater citizen involvement in 
planning the cultural development of a community. The Federal 
share requirement shall be 50 percent of all activities funded 
under the paragraph, except that long-term support will be 25 
percent.
    Section 302(e) of the bill provides a new separate 
authority for research and scholarship grants to encourage the 
development and dissemination of significant scholarship in the 
humanities by groups, individuals, and State agencies or 
entities. These grants include fellowships for college and 
university faculty, and independent scholars; dissertation 
grants, summer stipends, and funds for scholarly publications, 
reference materials, basic research, institutional programs, 
and preservation. The Chairperson with the National Council on 
the Humanities' recommendation provides grants for training and 
workshops, research, and publications in the humanities that 
have substantial scholarly and cultural significance, and 
reflect the cultural heritage of the United States. This 
section also includes grants for education and public 
understanding in the humanities; increasing the range of 
contributors, management improvement, and long-range planning 
for cultural organizations.Section 302(e) describes grants for 
training, workshops, and research. A fellowship may be used for 
study or research at an appropriate nonprofit institution. In 
the case where admission charges are made to the general 
public, the total amount of any grant shall not exceed 30 
percent of the total cost of such activities. The Chairperson 
would give particular regard to scholars, and educational and 
cultural institutions that traditionally have been under-
represented. In general, the Federal share of all activities 
funded under this paragraph would be 50 percent except in cases 
where construction and capital equipment may be purchased. In 
those instances, the Federal share would be 25 percent.
    Section 303 in the bill provides application procedures 
with the Chairperson determining what information is necessary 
in the application.
    Section 304 in the bill describes NEH review panels. The 
Chairperson may select panel members who have exhibited 
expertise and leadership in specified fields being reviewed, 
are broadly representative of diverse humanistic perspectives 
and geographic factors and who broadly represent cultural 
diversity.
    Section 305 in the bill establishes the National Council on 
the Humanities, composed of the Chairperson of NEH, who chairs 
the Council, and changes from 26 (in current law) to 20 the 
number of other council members appointed by the President, by 
and with the advice and consent of the Senate. Members are 
selected from among private citizens who are recognized for 
their broad knowledge and expertise in, the humanities; have 
established records of distinguished service, or achieved 
eminence in the humanities; including scholars and others who 
are professionally engaged in the humanities; including 
scholars and others who are professionally engaged in the 
humanities. There must be an appropriate distribution of 
members among major humanities fields. The President may give 
consideration to recommendations by leading national 
organizations in the humanities field. There must be due regard 
to equitable representation of women, racially diverse 
individuals, and individuals with disabilities, who are 
involved in the humanities. Members serve 6-year terms, which 
are staggered, expiring the third day of September in the year 
of expiration, with some serving in case of a vacancy the 
remainder of an individual's term; or serving after expiration 
until a successor takes office. Due to the reduction in the 
size of the Council the terms of eight members that would 
otherwise expire on January 26, 1996, and one member whose term 
expires November 30, 1995 would expire on January 1, 1996, and 
three members will be appointed to serve until September 3, 
2002. Compensation will be changed from GS-18 in current law to 
a daily rate not to exceed a GS-15. The Council will meet at 
least twice during the year, with 11 members constituting a 
quorum. Section 305 describes the Council's duties to advise 
the Chairperson with respect to policies, and to make 
recommendations with respect to approval of grant applications. 
The Chairperson would not approve or disapprove an application 
until receiving the Council's recommendations, unless the 
Council fails to make a recommendation. In case of an 
application involving $35,000 or less, the Chairperson may 
approve or disapprove if such action is then reviewed by the 
Council, and if funds under such delegation do not exceed 3 
percent of appropriations.
    Section 306 of the bill outlines limitations on grants. It 
includes definitions of ``production entity,'' ``Group'' and 
``National of the United States.'' The Chairperson establishes 
criteria for eligibility. Any group eligible must be nonprofit. 
A production entity that is a non profit group may be eligible 
with the advice of the National Council on the Humanities, and 
if the grant will significantly advance the knowledge and 
understanding of the humanities in the United States. An 
individual may be eligible if he/she is a citizen or national 
and if the Chair determines with the National Council on the 
Humanities that providing the grant will advance understanding 
of the humanities in the United States. No grant may be made to 
an activity if direct or indirect admissions are used for 
purposes other than assisting the grant recipient to develop 
high standards of scholarly excellence or encourage greater 
appreciation of the humanities by the citizen of the United 
States. The same Labor Standards apply as listed under title 
II.
    Section 307 of the bill outlines administrative provisions 
that are similar to current law. The Chairperson must prescribe 
regulations for the Chairperson's functions. The Chairperson 
would solicit, accept, receive, invest and use money and other 
property bequeathed or devised, and would use, sell, or dispose 
of such property for carrying out activities of the endowment. 
The Chairperson appoints and pays employees, and may procure 
temporary and intermittent services of experts, utilize 
voluntary services; make payments, rent office space. For 
publications, the Chairperson would consult with the Joint 
Committee on Printing. The Chairperson would coordinate the 
programs of NEH with other Federal agencies and may enter into 
enteragency agreements. Reference to the Federal Council on the 
Arts and the Humanities has been deleted.
    Section 308 of the bill outlines NEH report requirements. 
The Chairperson must submit an annual report on or before April 
15, summarizing the activities of NEH for the proceeding year. 
Each applicant is required to submit financial reports, assure 
that the conditions of the grant are met including that the 
work assisted meet the standards of excellence in humanities 
and significance in the humanities, and if practicable a copy 
of the work resulting from the activity. Reports are due not 
later than 90 days after the work is completed. The National 
Council on the Humanities may submit an annual report 
summarizing meetings and recommendations, while protecting the 
privacy of individual applicants for grants.
    Section 309 of the bill delineates sanctions and payment 
provisions similar to current law and adds new language for 
``recapture'' provisions. If any recipient, direct or indirect 
fails to satisfy the grant purposes or in case of grant from a 
State agency fails to comply with the State plan, then the 
Chair can deny any subsequent funding, after taking into 
consideration a post-award evaluation. Also, direct and 
indirect recipients would be prohibited from using the name of 
the endowment, and a publication would carry a disclaimer that 
the funding, conclusions, and recommendations expressed in the 
publication do not reflect the views of NEH. After determining 
noncompliance the Chairperson can take action after providing 
reasonable notice and a hearing and if still found in 
noncompliance, the Chair shall provide no further funding and 
if compliance is impossible, the recipient must repay or 
arrange for repayment.
    Section 309 of the bill contains new language for 
``recapture'' authority whereby a recipient shall pay one-third 
to one-half of the amount of revenue generated within 5 years 
after the end of the grant period but not more than the amount 
of funding--when that recipient has derived net program income 
for a NEH project that exceeds the lesser of $50,000 or twice 
the amount of funding. The Chairperson may increase the amount 
of funding to be paid back above the amount of the grant if an 
agreement has been reached with the grantee upon award. The 
U.S. Treasurer shall deposit funds paid or repaid under the act 
in a special interest bearing account to the credit of the 
endowment.
    Section 310 of the bill authorizes the same awards as in 
current law. The Jefferson Lecture in the Humanities Award is 
awarded annually by the chairperson of NEH to one individual 
for distinguished intellectual achievement in the humanities. 
Each award shall not exceed $10,000. The Charles Frankel prize 
will be awarded to five individuals for their outstanding 
contribution to public understanding of the humanities at 
$5,000 each.
    Section 102 of the bill provides conforming amendments to 
the Inspector General Act of 1978. It amends section 8G of The 
Inspector General Act to allow joint appointment of an 
Inspector General by the Chairpersons of NEH and NEA.

               TITLE II--MUSEUM AND LIBRARY SERVICES ACT

    Section 201 of the bill amends the Museum Services Act to 
read, ``Title II--Museum and Library Services--Subtitle A--
General Provisions.''
    Section 201 cites the short title as the ``Museum and 
Library Services Act.'' This bill would replace the Library 
Services and Construction Act and Title II of the Higher 
Education Act, and would amend the Museum Services Act.
    Section 202 of the bill provides definitions for 
``Commission,'' ``Director,'' ``Foundation,'' ``Institute,'' 
and ``Museum Board.''
    Section 203 of the bill establishes a new ``Institute of 
Museum and Library Services,'' consisting of an Office of 
Museum Services, an Office of Library Services, and a National 
Museum Services Board in the Office of Museum Services.
    Section 204 of the bill provides for the Director of the 
Institute of Museum and Library Services to be appointed by the 
President with the advice and consent of the Senate. The 
Director would serve a 4-year term, with every second 
individual appointed having special competence in library and 
information services. Alternately, the next individual would 
have special competence with regard to museum services. The 
compensation would be at level III of Executive Schedule rate. 
The Director's duties would include awarding financial 
assistance and using not less than 5 percent or not more than 7 
percent for joint projects between Library and Information 
Services and Museum Services. The Director must coordinate 
policies within the Institute with Federal agencies including 
NEA, NEH, National Science Foundation, Department of Education, 
Library of Congress, and Smithsonian.
    Section 205 of the bill provides for a Deputy Director of 
the Office of Library Services with a graduate degree in 
library science and expertise in library and information 
services. There would be a Deputy Director for the Office of 
Museum Services with expertise in museum services. Both are to 
be compensated as ES-1 of the Senior Executive Service 
schedule.
    Section 206 of the bill allows the Director of the 
Institute to appoint and compensate personnel and to accept and 
utilize voluntary services of individuals.
    Section 207 of the bill authorizes the Institute to accept 
and invest money and property and the Director may enter such 
proceeds in a special interest bearing account to the credit of 
the Institute.

            ``Subtitle B--Library Services and Technology''

    Section 211 of the bill cites the short title as the 
``Library Services and Technology Act.''
    Section 212 of the bill states the purposes of the act are 
to stimulate excellence and promote equity and lifelong access 
to learning and information resources in all types of 
libraries; to stimulate improvement and innovation in library 
services through public-private sector partnerships; to 
establish national library service goals for the 21st century 
that will: provide access to information through international 
electronic networks; help contribute to a productive work 
force, develop reading and critical thinking for children and 
adults, provide targeted services to people of diverse 
geographic, cultural and socioeconomic backgrounds, to 
individuals with disabilities, and to people with limited 
functional literacy or information skills; to provide adequate 
hours of operation, facilities, staff, collections, and 
electronic access to information. This section also emphasizes 
Congress' recognition of the need for high quality library 
services that are essential to empower the people to succeed in 
a global technological environment.
    Section 213 of the bill provides definitions for ``Indian 
Tribe,'' ``library consortia,'' ``library entity'' ``State,'' 
``State advisory council,'' ``State library administrative 
agency,'' ``State plan,'' and ``public library.'' A ``public 
library'' serves free of charge all residents of a community, 
district, or region and receives its financial support in whole 
or in part from public funds, and may also include a research 
library, though not an integral part of an institution of 
higher learning.
    Section 214 of the bill provides the following 
authorization of appropriations: $75 million for grants to 
States (subchapter A of chapter 2) for fiscal year 1996 and 
such sums as may be necessary for each of the 4 succeeding 
fiscal years; $75 million for Special services (subchapter B of 
chapter 2) for fiscal year 1996 and such sums as may be 
necessary for each of 4 succeeding fiscal years. This section 
authorizes the Secretary of Education to transfer funds 
appropriated to the Director. It also authorizes that not less 
than 5 percent and not more than 7 percent of the funds 
appropriated be for joint projects between the Office of Museum 
Services and the Office of Library Services. It limits 
administrative funds to not more than 10 percent of 
appropriations.

Chapter 1--Basic program requirements

    Section 221 of the bill reserves 1\1/2\ percent to award 
grants for library services to Indian Tribes, and 8 percent of 
funds for a national leadership program. The minimum allotment 
to each State is $200,000 and $40,000 for each outlying area. 
If appropriations are insufficient, then funds are ratably 
reduced. After minimum allotments are met, any sums remaining 
are allotted based on the ratio of State population to national 
population.
    Section 222 of the bill provides that not more than 5 
percent of funds may be used for State administration.
    Section 223 of the bill provides that the Federal share of 
costs is 50 percent except for Puerto Rico, Guam, American 
Samoa, the Virgin Islands, Northern Mariana Islands where the 
Federal share will be 66 percent; and for the Marshall Islands, 
Micronesia, and Palau where the Federal share is 100 percent. 
Unless States have ``maintained effort,'' the payment shall be 
reduced if the level of State expenditures for the previous 
fiscal year is less than the average total expenditures for the 
preceding 3 fiscal years. A waiver may be granted due to 
uncontrollable circumstances.
    Section 224 of the bill sets up requirements for a State 
plan by the State Library Administrative Agency to be submitted 
not later than April 1, 1996 to the Director. The plan will 
cover 5 fiscal years, with revisions allowed. The plan must 
specify priorities for improvement of library services, 
providing access to information by all people through new 
technologies; must identify those in need of special series; 
specify accountability and evaluation procedures for public 
libraries; specify how funds are to be used for library 
services for children in poverty; provide that the State 
library administrative agency will involve libraries and users 
throughout the State in policy decisions, will make reports, 
keep records, and report annually on the progress in meeting 
the goals of the State plan. The State plan must also describe 
the process for need assessment within the State, including 
establishing goals for achieving special services, and 
information access through technology. Section 224 of the bill 
outlines accountability measures. Each State plan must define 
performance goals and express those goals in measurable form, 
and compare actual program results with established performance 
goals. Performance indicators include evidence of progress 
toward national library service goals, consultation with the 
State educational agency, identification of activities suitable 
for nationwide replication, and progress in improvement of 
library services for children in poverty. The Director approves 
a State plan if there are satisfactory assurances that the plan 
will be carried out. The State plan is to be made available to 
the public. If a State plan does not meet the requirements, the 
Director must notify the State library administrative agency, 
offer them a chance to revise the plan, provide technical 
assistance for the State to meet requirements, and provide 
opportunity for a hearing.

``Chapter 2--Library programs''

            Subchapter A--Information access through technology
    Section 231 of this bill provides grants to States for 
information access through technology. Its purpose is to 
improve library services to all people and give them access to 
information delivered by libraries through new technologies. 
The Director will award State allotments to States with 
approved State plans.
    Section 232 of this bill outlines the uses of grants as 
follows: to provide statewide services and subgrants to public 
libraries and other types of library consortia, library 
linkages if they provide access and delivery of information, 
lifelong learning and workforce and economic development; or 
support of technology infrastructure.
            Subchapter B--Information empowerment through special 
                    services
    Section 241 of this bill authorizes grants to States for 
special services. The purpose of this subchapter is to improve 
library and information services for persons who have 
difficulty using a library, to communities which are 
geographically disadvantaged in terms of access to libraries; 
and to people who are in need of special materials or services, 
and who will benefit from outreach services, particularly for 
families below the poverty level. (The bill does not 
specifically mention the elderly, although current law 
specifically mentions them as a group to receive special 
library services.)
    Section 242 of the bill provides that grant funds may be 
used to provide statewide services as well as subgrants to 
public libraries, library consortia or library linkages to 
increase literacy and lifelong learning and to serve persons in 
rural, underserved or inner-city areas.
    Section 243 of the bill reserves a portion of funds for a 
new program not in current law, Services for Children in 
Poverty. It reserves from the amount received by each State 
library administrative agency $1.50 for every preschooler 
(birth through age 5) in the State from a family living below 
the income official poverty line, and $1 for every child aged 
6-17 years in each State from a poverty family. With regards to 
within State distribution, each public library will receive an 
amount that bears the ratio of the number of children served by 
that library to the number served by all public libraries in 
the State. The maximum amount a state library administrative 
agency may reserve under this paragraph for any fiscal year 
shall not exceed 15 percent of the total amount such agency 
receives under this subchapter for such year. An exception may 
be made if the amount available for two or more library systems 
is too small to be effective, in which case aggregated amounts 
shall be used for library systems with $3,000 or less 
available.
    Section 243 of the bill provides an adjustment if the 
appropriations for this subtitle exceed the previous year by 
more than 10 percent, in which case the amount each State 
library administrative agency reserves would be increased by 
that percentage. A decrease would be administered the same way. 
Each public library submitting a plan must identify eligible 
children, collaborate with community representatives; and 
establish indicators of success. Priority projects may include 
after school homework support; family literacy programs; 
extension of branch hours to provide space and resources for 
homework; development of technological resources; hiring 
specialized outreach staff; development of coalitions and 
training programs involving libraries and other service 
providers and development of peer tutoring programs.

Chapter 3--Administrative provisions

            Subchapter A--State requirements
    Section 251 of the bill outlines requirements for State 
evaluations. Each State receiving a grant must annually 
evaluate activities assisted under subchapters A (access 
through technology) and B (special services) of Chapter 2. The 
evaluation should describe the effectiveness of subchapter A 
activities ensuring that every American will have affordable 
access to information resources through electronic networks; 
that every public library will be connected to national and 
international electronic networks; that every State library 
will promote planning and provide support for full library 
participation in electronic networks; that every public library 
will help people obtain information through electronic 
networks; and that every public library will be equipped with 
technology to help people obtain information in an effective 
manner. With regard to subchapter B activities, the evaluations 
should describe the condition of literacy and lifelong learning 
in each State, how activities meet target groups to be served; 
how activities serve people in rural and urban areas, 
procedures used to identify library services, description of 
needs and target groups to be served; an analysis of levels of 
success for service to target groups; and, a description of the 
current level of library service to people in rural and urban 
areas. With respect to activities to support the provision of 
special services, the State evaluation should include a report 
on serving poverty children, and an analysis of the current 
local situation. Each public library receiving assistance would 
submit to the State library any required information.
    Section 252 of the bill describes the authority of State 
advisory councils. Each State desiring assistance must 
establish a State advisory council, broadly representative of 
library entities in the State, public, school, academic, 
special and institutional libraries, and libraries serving 
individuals with disabilities. Its duties will be to consult 
with the State library administrative agency on policy matters 
involving the State plan, to assist in dissemination of 
information, evaluation of activities, and to establish bylaws 
to carry out the council's duties.
            Subchapter B--Federal requirements
    Section 261 of the bill provides services for Indian 
Tribes. (There is a set aside in current law for Indians.) This 
bill gives grants to organizations serving and representing 
Indian tribes to provide in-service or pre-service training of 
Indians as library personnel; to purchase library materials; to 
conduct special library programs for Indians; to pay salaries 
of library personnel; and transportation to enable Indians to 
have access to library services; dissemination of information 
about library services; assessment of tribal library needs; and 
contracts to provide public library services to Indians living 
on or near reservations. Funds must be administered by a 
librarian. The Director would prohibit funds from being 
received by more than one entity serving the same population. 
Each organization receiving a grant would continue to expend 
not less than the amount expended during the second fiscal year 
preceding the year for which the determination is made. Any 
organization may submit an application to the Director for 
approval.
    Section 262 of the bill, similar to current law language in 
title II of the Higher Education Act, establishes a National 
Leadership Program to enhance the quality of library services 
nationwide. Funded activities may include: education and 
training of persons in library and information science, 
particularly in new technology; research and demonstration 
projects related to the improvement of libraries, education in 
library science, enhancement of library services through new 
technologies; and preservation or digitization of library 
materials. Grants and contracts are to be awarded on a 
competitive basis to library entities, agencies or institutions 
of higher education.
    Section 263 of the bill states that these provisions do not 
interfere with State and local initiatives and responsibility 
to conduct library services. The administration of libraries is 
reserved to States and their local subdivisions.
            ``Subtitle C--Museum Services''
    Section 271 of the bill outlines the purpose of museum 
services, (using similar language to that in current law) to 
encourage and assist museums in their educational role in 
conjunction with formal systems of elementary, secondary and 
postsecondary education and with programs of nonformal 
education for all age groups; to assist museums in modernizing 
their methods and facilities to better conserve cultural, 
historic, and scientific heritage; and, to ease the financial 
burden borne by museums as a result of their increasing use by 
the public.
    Section 272 of the bill defines a ``museum'' as a public or 
private nonprofit agency or institution organized on a 
permanent basis for essentially educational or esthetic 
purposes, that utilizes a professional staff, owns, utilizes, 
cares for, and exhibits tangible objects to the public on a 
regular basis.
    Section 273 of the bill stipulates that the Director, with 
policy direction from the Museum Board, makes grants for 
increasing and improving museum services. Activities would 
include: enabling museums to construct or install displays, 
interpretations, and exhibitions in order to improve museum 
services to the public; developing and maintaining professional 
staff; meeting administrative costs in preserving and 
maintaining collections; cooperating to develop traveling 
exhibitions; conserving collections; and, carrying out 
specialized programs for specific segments of the public. The 
Director would enter contracts and cooperative agreements to 
pay the Federal share of projects to strengthen museum 
services, limiting the aggregate amount not to exceed 15 
percent of the amount appropriated, and prohibiting assistance 
being used to pay for operational expenses. The Federal share 
is 50 percent, with exceptions. No more than 20 percent of the 
funds available may be used to pay a Federal share of 100 
percent. The Director would establish procedures for grant 
review and evaluation.
    Section 274 of the bill outlines provisions for assessment. 
The Director, under policy direction by the Museum Board, would 
assess collaborative possibilities that museums can engage in 
to serve the public more effectively. The assessment will look 
at collaborative programs between museums within a community; 
with larger institutions serving as mentors to smaller 
institutions; collaborative programs between museums and 
community organizations; collaborative efforts in technology to 
reach a broader audience; investigation of opportunities for 
museums to use other community resources to serve the public 
better; and to coordinate professional and financial 
development. This section shall not apply in any fiscal year 
that the appropriation is less than $28,700,000.
    Section 275 of the bill provides for a new National Award 
for Museum Services to outstanding museums that have made 
significant contributions in services to their communities. The 
Director with advice of the Museum Board would provide this 
award annually.
    Section 276 of the bill establishes the National Museum 
Services Board, (with similar language as in current law) 
consisting of the Director of the new Institute and 14 members 
appointed by the President, by and with the advice and consent 
of the Senate. Members would be selected from the general 
public who are affiliated with curatorial, conservation, 
education and cultural resources in the United States; or are 
affiliated with various types of museums; or are recognized for 
their broad knowledge, expertise, or experience with museums or 
commitment to museums. There must be wide geographic 
representation, with no more than three members from a single 
State. The bill requires due regard to representation of women, 
minorities, and persons with disabilities who are involved with 
museums. The terms are designated as 5 years, except that 3 
would serve 5 years, 3 would serve 4 years, 3 would serve 3 
years, 2 would serve 2 years, 2 would serve 1 year, with no 
member serving more than 7 consecutive years through 
reappointment. A member shall serve until a successor takes 
office. The Museum Board is responsible for advising the 
Director on general policies with regard to financial 
assistance awarded for Museum Services, and to ensure that 
policies of the Institute for Museum and Library Services are 
coordinated with other Federal activities. The President would 
designate one of the appointive members as Chairperson of the 
Museum Board. The Board shall meet not less than three times 
each year, two times separately and once with the Commission. 
All decisions shall be by a two-thirds majority vote. A 
majority of members constitutes a quorum. In terms of 
compensation, Museum Board members would receive the daily 
equivalent of GS-15 (as compared to GS-18 in current law) with 
travel expenses including per diem.
    Section 277 of the bill authorizes appropriations for 
Museum Services of $28,700,000 for fiscal year 1996 and such 
sums as necessary for fiscal years 1997 through 2000. Not more 
than 10 percent of the funds may be used for administrative 
costs. For joint projects, not less than 5 or more than 7 
percent of appropriations may be used.
    Amendments to other Acts: Section 202 of the bill amends 
the National Commission on Libraries and Information Science 
Act to include responsibility of the Commission to advise the 
Director of the Institute of Museum and Library Services on 
general policies relating to library services, including 
financial assistance and coordination with other Federal 
activities. The Commission would meet at least once each year 
in a joint meeting with the Museum Board. All decisions would 
be made by a two-thirds majority vote of the total number of 
Commission and Museum Services Board members. A majority would 
constitute a quorum. The membership of the Commission shall 
include the Librarian of Congress, and the Director of the 
Institute who would serve as an ex officio members.
    Section 203 of the bill transfers functions from the 
Institute of Museum Services to the Institute of Museum and 
Library Services. It includes definitions of ``Federal 
agency,'' ``Office,'' and ``function.'' The Director of the 
Institute of Museum and Library Services may allocate or 
reallocate functions among the officers of the Institute and 
make such rules and regulations determined to be necessary. 
Appropriations as well as current personnel would be 
transferred. Current personnel would not be reduced in grade 
for one year after transfer. Executive Schedule positions would 
continue, provided the position has the same or comparable 
duties. Any legal documents would still be in effect. 
Rulemaking would not be affected. Section 203 of the bill 
requests that the Director of the Institute submit recommended 
legislation for conforming amendments not later than 6 months 
after the effective date.
    Section 204 of the bill refers to the individual serving as 
Director of the Institute of Museum Services as the Director of 
the Institute of Museum and Library Services.
    Section 205 of the bill requires that the Director, in 
appointing employees, give consideration to individuals with 
experience in administering State-based and national library 
and information services programs.
    Section 206 of the bill repeals the Library Services and 
Construction Act, title II of the Higher Education Act of 1965, 
and alters all references to the Library Services and 
Construction Act. It deletes references to the Institute of 
Museum Services in the Department of Education Organization Act 
and the Elementary and Secondary Education Act. It makes other 
conforming and technical amendments to reflect the change to 
the Institute of Museum and Library Services.

              TITLE III--ARTS AND ARTIFACTS INDEMNITY ACT

    Section 301 of the bill amends the Arts and Artifacts 
Indemnity Act to read as follows:
    Section 1 cites the short title as the ``Arts and Artifacts 
Indemnity Act.''
    Section 2 of the bill authorizes the Chairperson of the NEA 
to enter into agreements to indemnify against loss or damage of 
eligible items on exhibit. It removes the authority of the 
Federal Council on the Arts and Humanities that previously had 
jurisdiction over this Act. It expands indemnity coverage to 
U.S. exhibits touring the United States. The previous authority 
and jurisdiction of the Federal Council on the Arts and the 
Humanities over the arts and artifacts indemnity agreements 
would be deleted.
    Section 3 of the bill outlines the types of items covered 
by indemnity including: works of art, tapestries, painting, 
sculpture, folk arts, graphics and craft arts, manuscripts, 
rare documents, books printed or published materials; 
photography, motion pictures, audio and video tape; if these 
works have educational, cultural historical or scientific 
value, and the exhibition of which is certified (where 
appropriate) by the Secretary of State or designee as being in 
the national interest. An indemnity agreement would cover items 
on exhibition when the exhibition originates in the United 
States, and, generally when items are part of an exchange of 
exhibitions. Therefore, indemnity agreements would cover items 
in an exhibition that originates either in United States or 
outside the United States and is touring the United States.
    It defines ``on exhibition'' as including the period of 
time beginning on the date eligible items leave the premises of 
the lender and ending on the date such items are returned.
    Section 4 of the bill provides that any person, nonprofit 
agency, institution, or government desiring to enter into an 
indemnity agreement shall submit an application. Each item must 
be described and the estimated value established and verified. 
There must be evidence that the item described is the actual 
item. Policies must be set forth for preparation and exhibition 
of the item including transportation. The Chairperson of NEA 
would receive the application and enter into an indemnity 
agreement.
    Section 5 of the bill provides that the Chairperson review 
the estimated value of the items for coverage by an indemnity 
agreement. The aggregate amount of loss or damage is limited, 
as in current law, to $3 billion, and the individual amount for 
a single exhibition covering loss or damage is $300 million. 
The extent of coverage is delineated as follows: for $2 million 
or less coverage shall extend only to loss or damage in excess 
of the first $15,000; more than $2 million but less than $10 
million, coverage shall extend to loss in excess of the first 
$25,000, not less than $10 million but less than $125 million, 
coverage shall extend to loss in excess of the first $50,000; 
not less than $125 million but less than $200 million, coverage 
shall extend to loss in excess of the first $100,000, and not 
less than $200 million, coverage shall extend to loss in excess 
the first $200,000.
    Section 6 of the bill requires that the Chairperson 
prescribe regulations for claims adjustment, and in the case of 
a claim, the Chairperson must certify validity of the claim to 
the Speaker of the House and President pro tempore of the 
Senate.
    Section 7 of the bill requires that the Chairperson submit 
a report to the appropriate committees of Congress containing 
information on all claims paid, pending claims and the 
aggregate face value of contracts outstanding at the end of the 
year.
    Section 8  of the bill authorizes appropriations as ``such 
sums as may be necessary'' to carry out the Arts and Artifacts 
Indemnity Act.

            IX. MINORITY VIEWS OF MR. ABRAHAM AND MR. COATS

    We believe that the NEA and NEH are agencies in trouble. 
They are in trouble for several reasons. First, many people 
question the need to spend the taxpayers' money on such 
nonvital programs in this era of budget austerity. When funding 
for many social programs is being significantly reduced, it is 
difficult to rationalize full funding for the NEA and NEH.
    In addition, the activities of the NEA and NEH run against 
the sensitivities of many American taxpayers who are opposed to 
seeing their dollars fund projects that they find 
objectionable. It is this latter concern that has come into 
focus in recent weeks. Meanwhile, amid all the hysterical 
accounts on both sides of the debate over the Endowments, it 
seems to have been lost that these agencies actually contribute 
surprising little to the arts or the humanities in this 
country.
    For that reason, we proposed that the committee accept 
Senator Abraham's alternative reauthorization bill, co-
sponsored by Senator Coats and DeWine, which would allow for 
privatization of the Endowments over a 5-year period. The 
committee rejected that proposal, although it did win six 
votes.
    We continue to believe that the gradual, genuine 
privatization of the Endowments is the only real solution to 
replacing the 4 percent or so of funding currently provided by 
the NEA and the NEA to the arts and humanities in this country 
without implicating taxpayer in the projects so funded. Set 
forth below are the arguments for the Abraham Privatization 
bill--why we believe it is necessary, how the bill would 
accomplish privatization of the Endowments, and why we believe 
it would work.

                         i. why it is necessary

    Shortly before the first scheduled Labor Committee mark-up 
of the NEA and NEH, there were several critical news accounts 
of the summer schedule at ``Highways,'' an NEA-funded 
performance art center in California. The theater's brochure 
listed acts intended ``to push the right wing into spiritual 
contortions.'' Performances included ``Dyke Night,'' described 
as ``our series of hot nights with hot dykes,'' and ``Boys `R' 
Us,'' similarly billed as ``our continuing series of hot summer 
nights with hog fags.'' Another number, titled ``Not For 
Republicans,'' included a comedienne's discourse on ``sex with 
Newt Gingrich's mother.''
    The NEA's response to public criticism of this NEA grant? 
``[Highways] is consistent with the Endowment's congressionally 
mandated mission of fostering `mutual respect for the diverse 
beliefs and values of all persons and groups,' '' wrote the 
current NEA Chairperson, Jane Alexander, in a letter to various 
Senators dated June 26, 1995. Alexander went on to describe her 
alarm, not a Highways' ``Ecco Lesbo-Ecco Homo'' summer program, 
but at criticisms leveled at these NEA-funded performances: ``I 
am concerned that once again the Endowment is being criticized 
for supporting an institution that serves its community well--
this time, one that supports the work of homosexual and 
minority artists. * * * '' She dismissed criticisms of the 
``sex with Newt Gringrich's mother'' routine as being 
politically motivated: ``I am also concerned that we are being 
criticized for Highways having presented comedienne Marga Gomez 
because her stand-up routine pokes fun at the current 
Congressional leadership.''
    While much of the public objects to taxpayer-supported 
performances like these, that is not the only quarter from 
which opposition to Federal funding of the NEA has come. The 
Progressive Policy Institute, for example, (an offshoot of the 
Democratic Leadership Council) stated in its 1993 ``Mandate for 
Change'' that there should be ``no federal role'' in the arts. 
In a Lou Harris poll taken in January 1995, the NEA was at the 
top of the list of Federal programs Americans would like 
abolished--ahead of the Department of Housing and Urban 
Development, Public Broadcasting Service, and the Energy 
Department. (43 percent of respondents wanted the Endowment 
eliminated.)
    Long before the ``Ecco Lesbo-Ecco Homo'' summer program at 
Highways, there was Mapplethorpe and ``Piss Christ'' and the 
performance art of Karen Finley and Ron Athey, to name just a 
few of the more notorious NEA-funded projects. Provocations 
like these may be a small percentage overall, but each such 
sensational affronts adds to the growing list of people 
irrevocably opposed to the Endowment. Citizens who are offended 
by having their tax revenues supporting the likes of 
Mapplethorpe do not forget that offense just because the 
Endowment manages to avoid funding another offensive project 
for a short while. And Chairman Alexander's reaction to this 
latest public outcry demonstrates pretty clearly that the NEA 
is out of touch with the public's concerns.
    The NEH is no less out of touch with the public whose tax 
dollars it consumes. Though less outrageous--and less suitable 
for sound-bites--the NEH's projects may well have a longer 
lasting impact than the NEA's, because they infect American 
education rather than only its art museums and theaters. The 
national history standards released last January by a group at 
UCLA were the product of an NEH grant. Though intended to 
improve the education of all U.S. students, so objectionable 
were the standards that, before the ink was dry, 99 Senators 
voted in favor of a Sense of the Senate resolution denouncing 
the standards.
    Perhaps there are still enough votes in the Congress to 
save the NEA and the NEH in their present form for a few more 
years. But that will not end the disquietude and rancor 
surrounding the agencies. And that will do nothing to prevent 
any new NEA or NEH-funded affronts, each one adding to the 
growing list of citizens opposed to the Endowments. Sooner or 
later the Endowments are going to fund one more project so 
offensive that the public will rise up and demand their 
elimination. And then, there will be no time to assemble an 
alternative mechanism to fund the arts and humanities on a 
national level. Many of our States have arts and humanities 
institutions that are not going to be able to survive a 
withdrawal of federal funds cold turkey.
    We shirk our obligation to the arts and humanities as well 
as our obligation to the people if we refuse to acknowledge 
that these are Federal programs teetering toward abolition. Now 
is the time to reconfigure the agencies in a way that is built 
to last. The following proposal does just that. The proposed 
bill combines a gradual phaseout of direct Federal funding with 
inducements to privatization, such as earmarking a portion of 
the funds for private fundraising and proposing additional tax 
incentives for charitable gifts to the arts and humanities.
    One thing that the history of the endowments proves is that 
no matter who runs the organizations, maddening Government 
grants to the arts will continue to be made. Virtually since 
the Endowment's first grant in 1965, the organization has 
inspired opposition. In 1967, congressional hearings were held 
in response to public outcry over NEA-funded projects. More 
recently, controversies in the late eighties begot not 
quietude, but the Ron Athey performance \1\ in 1994--long after 
``Piss Christ.'' Endowment supporters are whistling past the 
Endowments' graveyards if they operate on the assumption that 
the affronts can be entirely eliminated with a series of 
statutory restrictions. There will be more controversies. Those 
interested in the NEA have considered a variety of 
modifications to the Endowment's granting authority intended to 
circumvent the problems. Across the board and without question, 
these are doomed to failure.
    \1\ Athey's performance consisted of slicing the back of another 
man with razors, blotting the blood, and sending the bloodied towels 
over audience members' heads. This caused some consternation among the 
audience members, many of whom fled the room. Athey and, it was 
assumed, his artistic companion, are HIV-positive.
---------------------------------------------------------------------------
    Eliminating individual grants, for example, will not stem 
offensive projects. A number of the more notorious Endowment-
supported projects have, in fact, been made possible by 
Endowment grants to museums and other institutions, rather than 
directly to the offending artists themselves. These include NEA 
grants to the Walker Art Center in Minneapolis and to P.S. 122, 
a theater in New York City, both of which used NEA grant money 
to fund Ron Athey's performance. In addition, the Whitney 
Museum of Art in New York used a portion of its $200,000 NEA 
grant to sponsor ``Abject Art: Repulsion and Desire in Art,'' 
which exhibited excrement, dead animals, and similar objects to 
make the artistic statement of: degrading the purity of an art 
museum. These exhibits and others will not be affected by a ban 
on individual grants.
    Block granting endowment money to the States also fails to 
prevent the use of Federal dollars on dubious or potentially 
objectionable art. Indeed, many of the institutions which have 
taken part in controversial projects are also recipients of 
moneys allocated by State arts councils. Thus, for example, 
both the Walker and Whitney Museums have been the beneficiaries 
of State and municipal arts funding, the latter receiving 
$134,952 from the New York State government and $5,000 from the 
city government in 1994. Since New York will undoubtedly 
continue to receive a disproportionate amount of Endowment 
money, taxpayers in Tennessee, Ohio, and Illinois will 
essentially be subsidizing art in New York. There is no reason 
to think New York State arts panels will suddenly begin to use 
Endowment money only to fund that which will play in Peoria.
    An across-the-board reduction in the NEA and NEH's budgets 
doesn't make sense. Some have suggested punishing the NEA and 
NEH for their irresponsible funding projects by cutting the 
endowments' budgets by some arbitrary percentage. But the NEA 
and NEH are either beneficial in their current structures or 
they aren't. The better solution is to attempt to preserve both 
a national arts foundation and a national humanities foundation 
at appropriate funding levels, but without requiring the 
taxpayers' involuntary contributions.
    Direct Federal funding of the arts forces the Federal 
Government into the thankless role of playing either censor on 
one hand or obscenity-promoter on the other. Since the actual 
monetary value of NEA funding is virtually negligible compared 
to private giving to the arts, the principal argument for 
Endowment grants is their tremendous influence. This, however, 
is a risky role. On one side we have constituents who are upset 
that its tax dollars are subsidizing work that they find 
aggressively offensive. And it bears repeating that since 
1967--2 years after the NEA's creation--its grants have been 
inciting controversy.
    On the other side we have artists who believe the 
Government is engaging in censorship. One recipient of NEA 
grants, Leonard Koscianski, has written that the NEA ``excludes 
whole categories of art * * * from serious consideration,'' 
citing watercolors as one of the categories that has received 
very few NEA grants. Moreover, the NEA was recently forced to 
settle a case for $252,000 brought by four performance 
artists--Karen Finley, John Fleck, Holly Hughes, and Tim 
Miller--who claimed they had been denied Endowment grants on 
political grounds. Many other artists will not even apply for 
an NEA grant because of the paperwork involved. Reed Zitting, 
an instructor of theater arts and design at the Interlochen 
School in Michigan, has observed that the bureaucratic 
necessities of governments are antithetical to the creative 
processes of art.
    The more the Congress tries to respond to taxpayer 
complaints about their money funding obscene art--by imposing a 
variety of restrictions on endowment grants--the more artists 
will have legitimate grounds to complain about Federal 
Government censorship. Rules such as requiring theaters to 
submit a complete and immutable schedule of the entire season's 
events are unworkable, excessive and intrusive. Another 
proposal has been to jettison seasonal grants altogether. While 
that measure would provide the Federal Government with a needed 
measure of control over Government grant money, it would also 
deprive an important segment of the arts community of any grant 
money whatsoever.
    It is simply impossible for the Federal Government to 
design an organization to fund the arts staffed with Federal 
bureaucrats that does not in some sense engage in censorship 
through its regulation. It doesn't help that the NEA has a tin 
ear with respect to the public's concerns with projects such as 
Highways' ``Ecco Lesbo-Ecco Homo'' summer program. Furthermore, 
the much vaunted power of an NEA grant places the Federal 
Government in a highly questionable role: Why should the 
Federal Government be the arbiter of what is and is not art and 
which artists will be famously successful and which will wait 
tables?
    The Federal Government's direct funding of the NEA and NEH 
also subjects it to claims of discrimination by certain States 
and areas of the country. Some States' citizens are clearly 
short-changed by the Federal Government's current distribution 
of NEA and NEH grant money. In 1994, for example, New York City 
alone received about 15 percent of the NEA's total budget, 
about 10-20 times the amount the NEA gave certain States. 
Further, many believe that rural areas are short-changed by the 
Endowments. Privately funded Endowments remove the Government 
as the decisionmaker--and the Federal taxpayers as the funding 
source--from a selection process that inevitably strikes some 
as unfair.

           II. How The Abraham Privatization Bill Would Work

    Private Endowments awarding grantees money from private 
donors will preserve the good things about the Endowment such 
as the imprimatur of a national organization and the financial 
support for the arts and humanities. Meanwhile, though, the 
Government will be out of the business of using taxpayer money 
either to support obscenity or to censor artists.
    The Abraham bill would reduce the budgets of the Endowments 
gradually over a 5-year period and also would allow the 
Endowments to use a portion of their budgets for the express 
purpose of promoting private fundraising activities during the 
phase-out period.
    At the end of 5 years, the Endowments' charter with the 
Federal Government would end. The ``Endowments''--or as we 
suggest, ``the American Arts and Humanities Endowment''--would 
then be free of Government bureaucrats either as censors or as 
tax collectors for the arts. The newly free arts and humanities 
organizations could reconfigure themselves as a single tax 
deductible organization, as two separate organizations, or in 
any manner their private boards of directors deem desirable.
    The Abraham bill would provide for a gradual and 
progressive decrease in the NEA and NEH's Federal budgets, 
using the 1995 fiscal year appropriations as the base line. The 
Endowments' budgets would be reduced by 20 percent each year 
over a 5-year period. This approach permits a gradual, orderly 
transition from Government-sponsored organs to private 
entities.
    In addition to these absolute decreases, the Privatization 
bill provides for a specific set-aside for fundraising. We 
authorize the Endowments to use an amount of their 
appropriations equal to 10 percent of the cut amount for 
fundraising purposes alone. This amounts to 2 percent of each 
Endowment's 1995 appropriation the first year, 4 percent the 
second year, and so on. Thus, for example, in the first year 
the NEH will be permitted over $3.5 million (2 percent of $175 
million) Federal dollars for the sole purpose of encouraging 
private fundraising on behalf of the humanities endowment.
    Finally, the Abraham privatization bill includes a Sense of 
the Senate resolution tax incentives for donations to the arts 
and humanities. We propose a return to tax deductions for 
nonitemizers, elimination of the cap on deductions for 
charitable contributions, and other tax benefits for charitable 
donations. Since amending the tax code to encourage charitable 
giving is not within the purview of the labor committee, the 
Sense of the Senate resolution appended to the Endowment 
Privatization bill would simply make the point that the 
committee favors creating additional tax incentives for 
charitable giving to the arts and humanities (and all 
501(c)(3)s), in lieu of direct Government funding of the NEA 
and NEH.

              III. The Abraham Privatization Bill Can Work

    Although raising money is always hard, the NEA and NEH 
budgets are a very small part of the Nation's total arts and 
humanities budget. Some have expressed doubt that private 
donations can take up the slack in Government funding. It bears 
mentioning at the outset then, that the NEA and NEH do not, in 
fact, constitute a significant proportion of funding for the 
arts and humanities in this country. It is difficult to isolate 
``the humanities'' for calculating private donations because it 
encompasses such a wide range of prospective philanthropies--
museums, colleges and universities, music academies, writing 
workshops, to name a few. Private donations to the arts, 
however, are easily quantifiable.
    In 1993, private giving to the arts totalled $9.57 billion. 
Meanwhile, the NEA's total budget for 1995 is $167.4 million. 
Thus, private giving to the arts in this country dwarfs the 
NEA's contribution 50 times over. Not only does the NEA's total 
annual funding of the arts amount to less than 1.7 percent of 
private donations to the arts, but it is also less than the 
States' contributions to the arts. In 1994, State legislatures 
gave $265 million to the arts. Perhaps the more striking 
comparison is to the annual operating budget of the Lincoln 
Center for the Performing Arts in New York City. Its budget for 
1995 is almost twice that of the NEA's: $316 million. Moreover, 
looked at from the perspective of the recipient arts 
organization, the NEA's contributions are still relatively 
insignificant. Thus, the Federal Government provides only 2.6 
percent of the income for all the country's nonprofit theaters.
    Leaving the taxpayer out of the equation does not reduce a 
National Endowment's prestige. Since the actual monetary value 
of arts and humanities funding provided by the NEA and NEH is 
very small compared to private giving to the arts, the 
principal argument for NEA and NEH grants is their glamour--the 
imprimatur or excellence an Endowment grant provides. According 
to NEA Chairman Jane Alexander, ``[T]he prestige of getting a 
grant from the Endowment is often critical in leveraging 
legislatures to provide additional funding.'' The prestige 
associated with a grant from a national arts organization will 
not be lost under a privately funded Endowment. Indeed, the 
glamour of an NEA grant will most likely expand because of the 
private interests involved: Corporate sponsors will want to 
publicize the results of their philanthropy--as will the 
privately funded Endowment itself, in order to attract more 
private dollars.

                             IV. Conclusion

    Through a 5-year privatization of the NEA and NEH, the 
Abraham bill permits the growth of private giving to the arts 
(with Government-supported fundraising during the transition). 
The Abraham approach also proposes tax incentives for 
charitable donations to create broad-based opportunity for 
private giving; reinstatement of tax deductions for 
nonitemizers may very well engender increased funding of the 
arts.
    More importantly though, we believe privatization has the 
distinct advantage of allowing the citizenry to direct those 
funds more efficiently and without controversy. Simply 
decreasing Federal funding of the Endowments or providing for 
increased block grants to the States fails to resolve the 
fundamental problem associated with today's NEA and NEH. By 
contrast, privatization removes the Government from the 
unwinnable task of balancing censorship and obscenity, once and 
for all.
    Federal bureaucracies on every level are being scaled back 
or eliminated entirely. Government programs, particularly non 
essential ones like the NEA and NEH, that can be replaced with 
privately run entities, must be. The manifest support from an 
array of celebrities and arts patrons for the arts and 
humanities makes clear that a reconstituted NEA and NEH will 
thrive. In short, a privately funded ``American Endowment for 
the Arts'' and an ``American Endowment for the Humanities'' can 
provide as much support for artists and writers without the 
attendant, ongoing disputes faced by a government-managed 
entity.
    The people we have heard from in support of the NEA and 
NEH--art enthusiasts, philanthropists, actors, and singers--
will want to contribute to private arts and humanities 
foundations. Assuming their belief in a national organization 
supporting the arts and humanities is as ardent as they claim 
when they lobby Congress, there will be a wellspring of support 
for private endowments.

                                   Spencer Abraham.
                                   Dan Coats.

                       X. Changes in Existing Law

    In compliance with rule XXVI, paragraph 12, of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

            Arts, Humanities, and Museums Amendments of 1995

                      TITLE 20, UNITED STATES CODE

     National Foundation on the Arts and the Humanities Act of 1965

    [Sec. 951. Declaration of Findings and Purposes.--The 
Congress finds and declares the following:
          [(1) The arts and the humanities belong to all the 
        people of the United States.
          [(2) The encouragement and support of national 
        progress and scholarship in the humanities and the 
        arts, while primarily a matter for private and local 
        initiative, are also appropriate matters of concern to 
        the Federal Government.
          [(3) An advanced civilization must not limit its 
        efforts to science and technology alone, but must give 
        full value and support to the other great branches of 
        scholarly and cultural activity in order to achieve a 
        better understanding of the past, a better analysis of 
        the present, and a better view of the future.
          [(4) Democracy demands wisdom and vision in its 
        citizens. It must therefore foster and support a form 
        of education, and access to the arts and the 
        humanities, designed to make people of all backgrounds 
        and wherever located masters of their technology and 
        not its unthinking servants.
          [(5) It is necessary and appropriate for the Federal 
        Government to complement, assist, and add to the 
        programs for the advancement of the humanities and the 
        arts by local, State, regional, and private agencies 
        and their organizations. In doing so, the Government 
        must be sensitive to the nature of public sponsorship. 
        Public funding of the arts and humanities is subject to 
        the conditions that traditionally govern the use of 
        public money. Such funding should contribute to public 
        support and confidence in the use of taxpayer funds. 
        Public funds provided by the Federal Government must 
        ultimately serve public purposes the Congress defines.
          [(6) The arts and the humanities reflect the high 
        place accorded by the American people to the nation's 
        rich cultural heritage and to the fostering of mutual 
        respect for the diverse beliefs and values of all 
        persons and groups.
          [(7) The practice of art and the study of the 
        humanities require constant dedication and devotion. 
        While no government can call a great artist or scholar 
        into existence, it is necessary and appropriate for the 
        Federal Government to help create and sustain not only 
        a climate encouraging freedom of thought, imagination, 
        and inquiry but also the material conditions 
        facilitating the release of this creative talent.
          [(8) The world leadership which has come to the 
        United States cannot rest solely upon superior power, 
        wealth, and technology, but must be solidly founded 
        upon worldwide respect and admiration for the Nation's 
        high qualities as a leader in the realm of ideas and of 
        the spirit.
          [(9) Americans should receive in school, background 
        and preparation in the arts and humanities to enable 
        them to recognize and appreciate the aesthetic 
        dimensions of our lives, the diversity of excellence 
        that comprises our cultural heritage, and artistic and 
        scholarly expression.
          [(10) It is vital to a democracy to honor and 
        preserve its multicultural artistic heritage as well as 
        support new ideas, and therefore it is essential to 
        provide financial assistance to its artists and the 
        organizations that support their work.
          [(11) To fulfill its educational mission, achieve an 
        orderly continuation of free society, and provide 
        models of excellence to the American people, the 
        Federal Government must transmit the achievement and 
        values of civilization from the past via the present to 
        the future, and make widely available the greatest 
        achievements of art.
          [(12) In order to implement these findings and 
        purposes, it is desirable to establish a National 
        Foundation on the Arts and the Humanities.
    [Sec. 952. Definitions.--As used in this Act--
    [(a) The term ``humanities'' includes, but is not limited 
to, the study and interpretation of the following: language, 
both modern and classical; linguistics; literature; history; 
jurisprudence; philosophy; archaeology; comparative religion; 
ethics; the history, criticism, and theory of the arts; those 
aspects of the social sciences which have humanistic content 
and employ humanistic methods; and the study and application of 
the humanities to the human environment with particular 
attention to reflecting our diverse heritage, traditions, and 
history and to the relevance of the humanities to the current 
conditions of national life.
    [(b) The term ``the arts'' includes, but is not limited to, 
music (instrumental and vocal), dance, drama, folk art, 
creative writing, architecture and allied fields, painting, 
sculpture, photography, graphic and craft arts, industrial 
design, costume and fashion design, motion pictures, 
television, radio, film, video, tape and sound recording, the 
arts related to the presentation, performance, execution, and 
exhibition of such major art forms, all those traditional arts 
practiced by the diverse peoples of this country and the study 
and application of the arts to the human environment.
    [(c) The term ``production'' means plays (with or without 
music), ballet, dance and choral performances, concerts, 
recitals, operas, exhibitions, readings, motion pictures, 
television, radio, film, video, and tape and sound recordings, 
and any other activities involving the execution or rendition 
of the arts and meeting such standards as may be approved by 
the National Endowment for the Arts established by section 5 of 
this Act.
    [(d) The term ``project'' means programs organized to carry 
out the purposes of this Act, including programs to foster 
American artistic creativity, to commission works of art, to 
create opportunities for individuals to develop artistic 
talents when carried on as a part of a program otherwise 
included in this definition, and to develop and enhance the 
widest public knowledge and understanding of the arts, and 
includes, where appropriate, rental or purchase of facilities, 
purchase or rental of land, and acquisition of equipment. Such 
term also includes--
          [(1) the renovation of facilities if--
                  [(A) the amount of the expenditure of Federal 
                funds for such purpose in the case of any 
                project does not exceed $250,000, or--
                  [(B) two-thirds of the members of the 
                National Council on the Arts or the National 
                Council on Humanities, as the case may be (who 
                are present and voting), approve of the grant 
                or contract involving an expenditure for such 
                purpose; and
          [(2) for purposes of sections 5(p), 7(c), (10) and 
        8(h) the construction of facilities if--
                  [(A) such construction is for demonstration 
                purposes or under unusual circumstances where 
                there is no other manner in which to accomplish 
                an artistic or humanistic purpose, and--
                  [(B) two-thirds of the members of the 
                National Council on the Arts and the National 
                Council on the Humanities, as the case may be, 
                (who are present and voting) approve of the 
                grant or contract involving an expenditure for 
                such purpose.
    [(e) The term ``group'' includes any State or other public 
agency, and any nonprofit society, institution, organization, 
association, museum, or establishment in the United States, 
whether or not incorporated.
    [(f) The term ``workshop'' means an activity the primary 
purpose of which is to encourage the artistic development or 
enjoyment of amateur, student, or other nonprofessional 
participants, or to promote scholarship and teaching among the 
participants.
    [(g) The term ``State'' includes, in addition to the 
several States of the Union, the Commonwealth of Puerto Rico, 
the District of Columbia, Guam, American Samoa, the Northern 
Mariana Islands, and the Virgin Islands.
    [(h) The term ``local arts agency'' means a community 
organization, or an agency of local government, that primarily 
provides financial support, services, or other programs for a 
variety of artists and arts organizations, for the benefit of 
the community as a whole.
    [(i) The term ``developing arts organization'' means a 
local arts organization of high artistic promise which--
          [(1) serves as an important source of local arts 
        programming in a community; and
          [(2) has the potential to develop artistically and 
        institutionally to broaden public access to the arts in 
        rural and innercity areas and other areas that are 
        underserved artistically.
    [(j) The term ``determined to be obscene'' means 
determined, in a final judgment of a court of record and of 
competent jurisdiction in the United States, to be obscene.
    [(k) The term ``final judgment'' means a judgment that is 
either--
          [(1) not reviewed by any other court that has 
        authority to review such judgment; or
          [(2) is not reviewable by any other court.
    [(l) The term ``obscene'' means with respect to a project, 
production, workshop, or program that--
          [(1) the average person, applying contemporary 
        community standards, would find that such project, 
        production, workshop, or program, when taken as a 
        whole, appeals to the prurient interest;
          [(2) such project, production, workshop, or program 
        depicts or describes sexual conduct in a patently 
        offensive way; and
          [(3) such project, production, workshop, or program, 
        when taken as a whole, lacks serious literary, 
        artistic, political, or scientific value.
    [Sec. 953. National Foundation on the Arts and the 
Humanities.--
    [(a) Establishment; Composition.--There is established a 
National Foundation on the Arts and the Humanities (hereinafter 
referred to as the ``Foundation''), which shall be composed of 
a National Endowment for the Arts, a National Endowment for the 
Humanities, a Federal Council on the Arts and the Humanities, 
and an Institute of Museum Services.
    [(b) Purpose.--The purpose of the Foundation shall be to 
develop and promote a broadly conceived national policy of 
support for the humanities and the arts in the United States, 
and for institutions which preserve the cultural heritage of 
the United States pursuant to this Act.
    [(c) Prohibition Against Federal Supervision Over Policy 
Determination, Personnel, or Curriculum, or Administration or 
Operation of any School or Other Non-Federal Body.--In the 
administration of this Act no department, agency, officer, or 
employee of the United States shall exercise any direction, 
supervision, or control over the policy determination, 
personnel, or curriculum, or the administration or operation of 
any school or other non-Federal agency, institution, 
organization, or association.
    [Sec. 954. National Endowment for the Arts.--
    [(a) Establishment.--There is established within the 
Foundation a National Endowment for the Arts.
    [(b) Chairperson of the Endowment; Term of Office; 
Vacancies.--(1) The Endowment shall be headed by a chairperson, 
to be known as the Chairperson of the National Endowment for 
the Arts, who shall be appointed by the President, by and with 
the advice and consent of the Senate.
    [(2) The term of office of the Chairperson shall be four 
years and the Chairperson shall be eligible for reappointment. 
The provisions of this subsection shall apply to any person 
appointed to fill a vacancy in the office of the Chairperson. 
Upon expiration of his term of office the Chairperson shall 
serve until the Chairperson's successor shall have been 
appointed and shall have qualified.
    [(c) Program of Contracts, Grants-in-Aid, or Loans to 
Groups and Individuals for Projects and Productions; 
Traditionally Underrepresented Recipients of Financial 
Assistance.--The Chairperson, with the advice of the National 
Council on the Arts, is authorized to establish and carry out a 
program of contracts with, or grants-in-aid or loans to, groups 
or, in appropriate cases, individuals of exceptional talent 
engaged in or concerned with the arts, for the purpose of 
enabling them to provide or support--
          [(1) projects and productions which have substantial 
        national or international artistic and cultural 
        significance, giving emphasis to American creativity 
        and cultural diversity and to the maintenance and 
        encouragement of professional excellence;
          [(2) projects productions, meeting professional 
        standards or standards of authenticity or tradition, 
        irrespective of origin, which are of significant merit 
        and which, without such assistance, would otherwise be 
        unavailable to our citizens for geographic or economic 
        reasons;
          [(3) projects productions that will encourage and 
        assist artists and enable them to achieve wider 
        distribution of their works, to work in residence at an 
        educational or cultural institution, or standards of 
        professional excellence;
          [(4) projects and productions which have substantial 
        artistic and cultural significance and that reach, or 
        reflect the culture of, a minority, inner city, rural, 
        or tribal community;
          [(5) projects and productions that will encourage 
        public knowledge, education, understanding, and 
        appreciation of the arts;
          [(6) workshops that will encourage and develop the 
        appreciation and enjoyment of the arts by our citizens;
          [(7) programs for the arts at the local level;
          [(8) projects that enhance managerial and 
        organizational skills and capabilities;
          [(9) projects, productions, and workshops of the 
        kinds described in paragraphs (1) through (8) through 
        film, radio, video, and similar media, for the purpose 
        of broadening public access to the arts; and'', and
          [(10) other relevant projects, including surveys, 
        research, planning, and publications relating to the 
        purposes of this subsection.
In the case of publications under clause (8) of this subsection 
such publications may be supported without regard for the 
provisions of section 501 of title 44, United States Code, only 
if the chairperson consults with the Joint Committee on 
Printing of the Congress and the Chairperson submits to the 
Committee on Labor and Human Resources of the Senate and the 
Committee on Education and Labor of the House of 
Representatives a report justifying any exemption from such 
section 501. Any loans made by the Chairperson under this 
subsection shall be made in accordance with terms and 
conditions approved by the Secretary of the Treasury. In 
selecting individuals and groups of exceptional talent as 
recipients of financial assistance to be provided under this 
subsection, the Chairperson shall give particular regard to 
artists and artistic groups that have traditionally been 
underrepresented.
    [(d) Application for Payment; Regulations and Procedures.--
No payment shall be made under this section except upon 
application therefore which is submitted to the National 
Endowment for the Arts in accordance with regulations issued 
and procedures established by the Chairperson. In establishing 
such regulations and procedures, the Chairperson shall ensure 
that--
          [(1) artistic excellence and artistic merit are the 
        criteria by which applications are judged, taking into 
        consideration general standards of decency and respect 
        for the diverse beliefs and values of the American 
        public; and
          [(2) applications are consistent with the purpose of 
        this section. such regulations and procedures shall 
        clearly indicate that obscenity is without artistic 
        merit, is not protected speech, and shall not be 
        funded. Projects, productions, workshops, and programs 
        that are determined to be obscene are prohibited from 
        receiving financial assistance under this Act from the 
        National Endowment for the Arts. The disapproval or 
        approval of an application by the Chairperson shall not 
        be construed to mean, and shall not be considered as 
        evidence that, the project, production, workshop, or 
        program for which the applicant requested financial 
        assistance is or is not obscene.
    [(e) Limitation on Amount of Grant to Group; Grants and 
Contracts of the National Endowment for the Arts.--The total 
amount of any grant to any group pursuant to subsection (c) of 
this section shall not exceed 50 per centum of the total cost 
of such project or production, except that not more than 20 per 
centum of the funds allotted by the National Endowment for the 
Arts for the purposes of subsection (c) for any fiscal year may 
be available for grants and contracts in that fiscal year 
without regard to such limitation.
    [(f) Eligibility for Financial Assistance.--Any group shall 
be eligible for financial assistance pursuant to this section 
only if--
          [(1) no part of its net earnings inures to the 
        benefit of any private stockholder or stockholders, or 
        individual or individuals, and
          [(2) donations to such group are allowable as a 
        charitable contribution under the standards of 
        subsection (c) of section 170 of the Internal Revenue 
        Code of 1986.
    [(g) Grants to States for Projects and Productions; 
Applications; Terms and Conditions of State Plans; Minimum 
Allotments; Excess Appropriations; Cost Limitations; Grants to 
Regional Groups; Non-Federal Funding; Definitions.--
          [(1) The Chairperson, with the advice of the National 
        Council on the Arts, is authorized to establish and 
        carry out a program of grants-in-aid to assist the 
        several States in supporting existing projects and 
        productions which meet the standards enumerated in 
        section 5(c) of this Act (subsec. (c) of this section), 
        and in developing projects and productions in the arts 
        in such a manner as will furnish adequate programs, 
        facilities, and services in the arts to all the people 
        and communities in each of the several States.
          [(2) In order to receive assistance under this 
        subsection in any fiscal year, a State shall submit an 
        application for such grants at such time as shall be 
        specified by the Chairperson and accompany such 
        application with a plan which the Chairperson finds--
                  [(A) designates or provides for the 
                establishment of a State agency (hereinafter in 
                this section referred to as the ``State 
                agency'') as the sole agency for the 
                administration of the State plan;
                  [(B) provides that funds paid to the State 
                under this subsection will be expended solely 
                on projects and productions approved by the 
                State agency which carry out one or more of the 
                objectives of subsection (c);
                  [(C) provides that the State agency will make 
                such reports, in such form and containing such 
                information, as the Chairperson may from time 
                to time require, including a description of the 
                progress made toward achieving the goals of the 
                State plan;
                  [(D) provides--
                          [(i) assurances that the State agency 
                        has held, after reasonable notice, 
                        public meetings in the State to allow 
                        all groups of artists, interested 
                        organizations, and the public to 
                        present views and make recommendations 
                        regarding the State plan; and
                          [(ii) a summary of such 
                        recommendations and the State agency's 
                        response to such recommendations; and
                  [(E) contains--
                          [(i) a description of the level of 
                        participation during the most recent 
                        preceding year for which information is 
                        available by artists, artists' 
                        organizations, and arts organizations 
                        in projects and productions for which 
                        financial assistance is provided under 
                        this subsection;
                          [(ii) for the most recent preceding 
                        year for which information is 
                        available, a description of the extent 
                        projects and productions receiving 
                        financial assistance from the State 
                        arts agency are available to all people 
                        and communities in the State; and
                          [(iii) a description of projects and 
                        productions receiving financial 
                        assistance under this subsection that 
                        exist or are being developed to secure 
                        wider participation of artists, 
                        artists' organizations, and arts 
                        organizations identified under clause 
                        (i) of this subparagraph or that 
                        address the availability of the arts to 
                        all people or communities identified 
                        under clause (ii) of this subparagraph. 
                        No application may be approved unless 
                        the accompanying plan satisfies the 
                        requirements specified in this 
                        subsection.
          [(3) Of the sums available to carry out this 
        subsection for any fiscal year, each State which has a 
        plan approved by the Chairperson shall be allotted at 
        least $200,000. If the sums appropriated are 
        insufficient to make the allotments under the preceding 
        sentence in full, such sums shall be allotted among 
        such States in equal amounts. In any case where the 
        sums available to carry out this subsection for any 
        fiscal year are in excess of the amount required to 
        make the allotments under the first sentence of this 
        paragraph--
                  [(A) the amount of such excess which is no 
                greater than 25 per centum of the sums 
                available to carry out this subsection for any 
                fiscal year shall be available only to the 
                Chairperson for making grants under this 
                subsection to States and regional groups, and
                  [(B) the amount of such excess, if any, which 
                remains after reserving in full for the 
                Chairperson the amount required under clause 
                (A) shall be allotted among the States which 
                have plans approved by the Chairperson in equal 
                amounts
        but in no event shall any State be allotted less than 
        $200,000.
          [(4)(A) The amount of each allotment to a State for 
        any fiscal year under this subsection shall be 
        available to each State, which has a plan approved by 
        the Chairperson in effect on the first day of such 
        fiscal year, to pay not more than 50 per centum of the 
        total cost of any project or production described in 
        paragraph (1). The amount of any allotment made under 
        paragraph (3) for any fiscal year which exceeds 
        $125,000 shall be available, at the discretion of the 
        Chairperson, to pay up to 100 per centum of such cost 
        of projects and productions if such projects and 
        productions would otherwise be unavailable to the 
        residents of that State: Provided, That the total 
        amount of any such allotment for any fiscal year which 
        is exempted from such 50 per centum limitation shall 
        not exceed 20 per centum of the total of such allotment 
        for such fiscal year.
          [(B) Any amount allotted to a State under the first 
        sentence of paragraph (3) for any fiscal year which is 
        not obligated by the State prior to 60 days prior to 
        the end of the fiscal year for which such sums are 
        appropriated shall be available for making grants to 
        regional groups.
          [(C) Funds made available under this subsection shall 
        not be used to supplant non-Federal funds.
          [(D) For the purpose of paragraph (3) and paragraph 
        (4) of this section the term `regional group' means any 
        multi-state group, whether or not representative of 
        contiguous States.
          [(E) For purposes of paragraph (3)(B), the term 
        ``State'' includes, in addition to the several States 
        of the Union, only those special jurisdictions 
        specified in section 3(g) which have a population of 
        200,000 or more, according to the latest decennial 
        census.
          [(5) All amounts allotted or made available under 
        paragraph (3) for a fiscal year which are not granted 
        to a State during such year shall be available at the 
        end of such year to the National Endowment for the Arts 
        for the purpose of carrying out section 5(c) (subsec. 
        (c) of this section).
    [(h) Suspension of Grants for Defaults, Noncompliance With 
Provisions and Plans, and Diversion of Funds; Repayment of 
Funds.--Whenever the Chairperson, after reasonable notice and 
opportunity for hearing, finds that--
          [(1) a group is not complying substantially with the 
        provisions of this section;
          [(2) a State agency is not complying substantially 
        with the terms and conditions of its State plan 
        approved under this section; or
          [(3) any funds granted to a group or State agency 
        under this section have been diverted from the purposes 
        for which they were allotted or paid,
the Chairperson shall immediately notify the Secretary of the 
Treasury and the group or State agency with respect to which 
such finding was made that no further grants will be made under 
this section to such group or agency until there is no longer 
any default or failure to comply or the diversion has been 
corrected, or, if compliance or correction is impossible, until 
such group or agency repays or arranges the repayment of the 
Federal funds which have been improperly diverted or expended.
    [(i) Application for Financial Assistance; Requirements.--
It shall be a condition of the receipt of financial assistance 
provided under this section by the Chairperson or the State 
agency that the applicant for such assistance include in its 
application--
          [(1) a detailed description of the proposed project, 
        production, workshop, or program for which the 
        applicant requests such assistance;
          [(2) a timetable for the completion of such proposed 
        project, production, workshop, or program;
          [(3) an assurance that the applicant will submit--
                  [(A) interim reports describing the 
                applicant's--
                          [(i) progress in carrying out such 
                        project, production, workshop, or 
                        program; and
                          [(ii) compliance with this Act and 
                        the conditions of receipt of such 
                        assistance;
                  [(B) if such proposed project, production, 
                workshop, or program will be carried out during 
                a period exceeding 1 year, an annual report 
                describing the applicant's--
                          [(i) progress in carrying out such 
                        project, production, workshop, or 
                        program; and
                          [(ii) compliance with this Act and 
                        the conditions of receipt of such 
                        assistance; and
                  [(C) not later than 90 days after--
                          [(i) the end of the period for which 
                        the applicant receives such assistance; 
                        or
                          [(ii) the completion of such project, 
                        production, workshop, or program; 
                        whichever occurs earlier, a final 
                        report to the Chairperson or the State 
                        agency (as the case may be) describing 
                        the applicant's compliance with this 
                        Act and the conditions of receipt of 
                        such assistance; and
          [(4) an assurance that the project, production, 
        workshop, or program for which assistance is requested 
        will meet the standards of artistic excellence and 
        artistic merit required by this Act.
    [(j) Regulations for Distribution of Financial Assistance 
in Installments; Implementation.--The Chairperson shall issue 
regulations to provide for the distribution of financial 
assistance to recipients in installments except in those cases 
where the Chairperson determines that installments are not 
practicable. In implementing any such installments, the 
Chairperson shall ensure that--
          [(1) not more than two-thirds of such assistance may 
        be provided at the time such applications is approved; 
        and
          [(2) the remainder of such assistance may not be 
        provided until the Chairperson finds that the recipient 
        of such assistance is complying substantially with this 
        section and with the conditions under which such 
        assistance is provided to such recipient.
    [(k) Reviews to Ensure Compliance With Regulations.--The 
Inspector General of the Endowment shall conduct appropriate 
reviews to ensure that recipients of financial assistance under 
this section comply with the regulations under this Act that 
apply with respect to such assistance, including regulations 
relating to accounting and financial matters.
    [(l) Use of Financial Assistance for Obscene Projects, 
Production, etc.; Repayment of Assistance; Exceptions.--
          [(1) If, after reasonable notice and opportunity for 
        a hearing on the record, the Chairperson determines 
        that a recipient of financial assistance provided under 
        this section by the Chairperson or any non-Federal 
        entity, used such financial assistance for a project, 
        production, workshop, or program that is determined to 
        be obscene, then the Chairperson shall require that 
        until such recipient repays such assistance (in such 
        amount, and under such terms and conditions, as the 
        Chairperson determines to be appropriate) to the 
        Endowment; no subsequent financial assistance to be 
        provided under this section to such recipient.
          [(2) Financial assistance repaid under this section 
        to the Endowment shall be deposited in the Treasury of 
        the United States and credited as miscellaneous 
        receipts.
          [(3)(A) This subsection shall not apply with respect 
        to financial assistance provided before the effective 
        date of this subsection.
          [(B) This subsection shall not apply with respect to 
        a project, production, workshop, or program after the 
        expiration of the 7-year period beginning on the latest 
        date on which financial assistance is provided under 
        this section for such project, production, workshop, or 
        program.
    [(m) Labor Standards of Professional Performers and 
Personnel; Healthy and Safe Working Conditions.--It shall be a 
condition of the receipt of any grant under this section that 
the group or individual of exceptional talent or the State or 
State agency receiving such grant furnish adequate assurances 
to the Secretary of Labor that--
          [(1) all professional performers and related or 
        supporting professional personnel (other than laborers 
        and mechanics with respect to whom labor standards are 
        prescribed in subsection (k) of this section) employed 
        on projects or productions which are financed in whole 
        or in part under this section will be paid, without 
        subsequent deduction or rebate on any account, not less 
        than the minimum compensation as determined by the 
        Secretary of Labor to be the prevailing minimum 
        compensation for persons employed in similar 
        activities; and
          [(2) no part of any project or production which is 
        financed in whole or in part under this section will be 
        performed or engaged in under working conditions which 
        are unsanitary or hazardous or dangerous to the health 
        and safety of the employees engaged in such project or 
        production. Compliance with the safety and sanitary 
        laws of the State in which the performance or part 
        thereof is to take place shall be prima facie evidence 
        of compliance. The Secretary of Labor shall have the 
        authority to prescribe standards, regulations, and 
        procedures as the Secretary of Labor may deem necessary 
        or appropriate to carry out the provisions of this 
        subsection.
    [(n) Labor Standards of Laborers and Mechanics.--It shall 
be a condition of the receipt of any grant under this section 
that the group or individual of exceptional talent or the State 
or State agency receiving such grant furnish adequate 
assurances to the Secretary of Labor that all laborers and 
mechanics employed by contractors or subcontractors on 
construction projects assisted under this section shall be paid 
wages at rates not less than those prevailing on similar 
construction in the locality as determined by the Secretary of 
Labor in accordance with the Davis-Bacon Act, as amended (40 
USC 276a et seq.). The Secretary of Labor shall have with 
respect to the labor standards specified in this subsection the 
authority and functions set forth in Reorganization Plan 
Numbered 14 of 1950 (15 FR 3176) and section 2 of the Act of 
June 13, 1934, as amended (40 USC 276c).
    [(o) Correlation and Development of Endowment Programs With 
Other Federal and Non-Federal Programs; Expenditure of 
Appropriations.--The Chairperson shall correlate the programs 
of the National Endowment for the Arts insofar as practicable, 
with existing Federal programs and with those undertaken by 
other public agencies or private groups, and shall develop the 
programs of the Endowment with due regard to the contribution 
to the objectives of this Act which can be made by other 
Federal agencies under existing programs. The Chairperson may 
enter into interagency agreements to promote or assist with the 
arts-related activities of other Federal agencies, on a 
reimbursable or nonreimbursable basis, and may use funds 
authorized to be appropriated for the purposes of subsection 
(c) for the costs of such activities.
    [(p) Program of Contracts or Grants-in-aid to Public 
Agencies and Private Nonprofit Organizations; Limitation on 
Payments; Authority of Chairperson.--
          [(1) The Chairperson of the National Endowment for 
        the Arts, with the advice of the National Council on 
        the Arts, is authorized, in accordance with the 
        provisions of this subsection, to establish and carry 
        out a program of contracts with, or grants-in-aid to, 
        public agencies and private nonprofit organizations, on 
        a national, State, or local level for the purpose of 
        strengthening quality by--
                  [(A) enabling cultural organizations and 
                institutions to increase the levels of 
                continuing support and to increase the range of 
                contributors to the programs of such 
                organizations or institutions;
                  [(B) providing administrative and management 
                improvements for cultural organizations and 
                institutions, particularly in the field of 
                long-range financial planning;
                  [(C) enabling cultural organizations and 
                institutions to increase audience participation 
                in, and appreciation of, programs sponsored by 
                such organizations and institutions;
                  [(D) providing additional support for 
                cooperative efforts undertaken by State arts 
                agencies with local arts groups and local arts 
                agencies to promote effective arts activity at 
                the State and local level, including--
                          [(i) support of professional artists 
                        in community based residences;
                          [(ii) support of rural arts 
                        development;
                          [(iii) support of and models for 
                        regional, statewide, or local 
                        organizations to provide technical 
                        assistance to cultural organizations 
                        and institutions;
                          [(iv) support of and models for 
                        visual and performing arts touring; and
                          [(v) support of and models for 
                        professional staffing of arts 
                        organizations and for stabilizing and 
                        broadening the financial base for arts 
                        organizations;
                  [(E) stimulating greater cooperation among 
                cultural organizations and institutions 
                especially designed to serve better the 
                communities in which such organizations or 
                institutions are located;
                  [(F) fostering greater citizen involvement in 
                planning the cultural development of a 
                community; and
                  [(G) stimulating artistic activity and 
                awareness which are in keeping with the varied 
                cultural traditions of this Nation.
          [(2)(A) The Chairperson of the National Endowment for 
        the Arts, with the advice of the National Council on 
        the Arts, is authorized in accordance with this 
        subsection, to establish and carry out a program of 
        contracts with, or grants to, States for the purposes 
        of--
                  [(i) raising the artistic capabilities of 
                developing arts organizations by providing 
                for--
                          [(I) artistic and programmatic 
                        development to enhance artistic 
                        capabilities, including staff 
                        development; and
                          [(II) technical assistance to improve 
                        managerial and organizational skills, 
                        financial systems management, and long-
                        range fiscal planning; and
                  [(ii) stimulating artistic activity and 
                awareness and broadening public access to the 
                arts in rural and innercity areas and other 
                areas that are underserved artistically.
          [(B) For purposes of providing financial assistance 
        under this paragraph, the Chairperson shall give 
        priority to the activities described in subparagraph 
        (A)(i).
          [(C) The Chairperson may not provide financial 
        assistance under this paragraph to a particular 
        applicant in more than 3 fiscal years for the purpose 
        specified in subparagraph (A)(i).
          [(3) The total amount of any payment made under this 
        subsection for a program or project may not exceed 50 
        per centum of the cost of such program or project.
          [(4) In carrying out the program authorized by this 
        subsection, the Chairperson of the National Endowment 
        for the Arts shall have the same authority as is 
        established in subsection (c) and section 10.
    [(q) National Information and Data Collection System on the 
Arts, Artists and Art Groups, and Audiences; Development and 
Implementation Plan; State of the Arts Reports.--The 
Chairperson of the National Endowment for the Arts shall, in 
ongoing consultation with State and local agencies, relevant 
organizations, and relevant Federal agencies, continue to 
develop and implement a practical system of national 
information and data collection and public dissemination on the 
arts, artists and arts groups, and their audiences. Such system 
shall include artistic and financial trends in the various 
artistic fields, trends in audience participation, and trends 
in arts education on national, regional, and State levels. Such 
system shall also include information regarding the 
availability of the arts to various audience segments, 
including rural communities. Such system shall be used, along 
with a summary of the data submitted with State plans under 
subsection (g), to prepare a periodic report on the state of 
the arts in the Nation. The state of the arts report shall 
include a description of the availability of the Endowment's 
programs to emerging, rural, and culturally diverse artists, 
arts organizations, and communities and of the participation by 
such artists, organizations, and communities in such programs. 
The state of the arts report shall be submitted to the 
President and the Congress, and provided to the States, not 
later than October 1, 1992, and quadrennially thereafter.

            [access to the arts through support of education

    [Sec. 954a. (a) Purpose.--The purposes of this section 
are--
          [(1) to increase accessibility to the arts through 
        providing education to all Americans, including diverse 
        cultures, urban and rural populations by encouraging 
        and developing quality education in the arts at all 
        levels, in conjunction with programs of nonformal 
        education for all age groups, with formal systems of 
        elementary, secondary, and postsecondary education;
          [(2) to develop and stimulate research to teach 
        quality education in the arts; and
          [(3) to encourage and facilitate the work of artists, 
        arts institutions, and Federal, State, regional, and 
        local agencies in the area of education in the arts.
    [(b) Program of Contracts or Grants.--The Chairperson of 
the National Endowment for the Arts, is authorized to establish 
and carry out a program of contracts with, or grants to any 
State or other public agency, individual, artist, any nonprofit 
society, performing and nonperforming arts and educational 
institution or organization, association, or museum in the 
United States, in order to foster and encourage exceptional 
talent, public knowledge, understanding, and appreciation of 
the arts, and to support the education, training, and 
development of this Nation's artists, through such activities 
as projects that will--
          [(1) promote and improve the availability of arts 
        instruction for American youth and life-long learning 
        in the arts;
          [(2) enhance the quality of arts instruction in 
        programs of teacher education;
          [(3) develop arts faculty resources and talents;
          [(4) support and encourage the development of 
        improved curriculum materials in the arts;
          [(5) improve evaluation and assessment of education 
        in the arts programs and instruction;
          [(6) foster cooperative programs with the Department 
        of Education and encourage partnerships between arts 
        and education agencies at State and local levels, arts 
        organizations, business colleges and universities;
          [(7) support apprenticeships, internships, and other 
        career oriented work-study experiences for artists and 
        arts teachers, and encourage residences of artists at 
        all educational levels;
          [(8) support the use of technology and improved 
        facilities and resources in education in the arts 
        programs at all levels; and
          [(9) foster the development of demonstration 
        projects, demonstration productions, demonstration 
        workshops, and demonstration programs in arts education 
        and collect, and make available to the public, 
        information on their implementation and effectiveness.
    [(c) Advisory Council on Arts Education.--In order to 
provide advice and counsel concerning arts education, the 
Chairperson shall appoint an advisory council on arts 
education.
    [Sec. 955. National Council on the Arts.--
    [(a) Inclusion Within the National Endowment for the 
Arts.--There shall be, within the National Endowment for the 
Arts, a National Council on the Arts (hereinafter in this 
section referred to as the ``Council'').
    [(b) Appointment and Compensation of Council.--The Council 
shall be composed of the Chairperson of the National Endowment 
for the Arts, who shall be Chairperson of the Council, and 
twenty-six other members appointed by the President, by and 
with the advice and consent of the Senate, who shall be 
selected--
          [(1) from among private citizens of the United States 
        who (A) are widely recognized for their broad knowledge 
        of, or expertise in, or for their profound interest in, 
        the arts and (B) have established records of 
        distinguished service, or achieved eminence, in the 
        arts;
          [(2) so as to include practicing artists, civic 
        cultural leaders, members of the museum profession, and 
        others who are professionally engaged in the arts; and
          [(3) so as collectively to provide an appropriate 
        distribution of membership among the major art fields.
The President is requested, in the making of such appointments, 
to give consideration to such recommendations as may, from time 
to time, be submitted to the President by leading national 
organizations in these fields. In making such appointments, the 
President shall give due regard to equitable representation of 
women, minorities, and individuals with disabilities who are 
involved in the arts. Members of the Council shall be appointed 
so as to represent equitably all geographical areas in the 
United States.
    [(c) Terms of Office; Vacancies.--Each member shall hold 
office for a term of six years, and the terms of office shall 
be staggered. The terms of office of all Council members shall 
expire on the third day of September in the year of expiration. 
No member shall be eligible for reappointment during the two-
year period following the expiration of such member's term. Any 
member appointed to fill a vacancy shall serve for the 
remainder of the term for which such member's predecessor was 
appointed. Notwithstanding any other provision of this 
subsection, a member shall serve after the expiration of such 
member's term until his successor takes office.
    [(d) Meetings of Council; Quorum; Written Records.--
          [(1) The Council shall meet at the call of the 
        Chairperson but not less often than twice during each 
        calendar year. Fourteen members of the Council shall 
        constitute a quorum. All policy meetings of the Council 
        shall be open to the public.
          [(2) The council shall--
                  [(A) create written records summarizing--
                          [(i) all meetings and discussions of 
                        the Council; and
                          [(ii) the recommendations made by the 
                        Council to the Chairperson; and
                  [(B) make such records available to the 
                public in a manner that protects the privacy of 
                individual applicants, panel members, and 
                Council members.
    [(e) Compensation of Members.--Members shall receive 
compensation at a rate to be fixed by the Chairperson but not 
to exceed the per diem equivalent of the rate authorized for 
grade GS-18 by section 5332 of title 5 of the United States 
Code and be allowed travel expenses including per diem in lieu 
of subsistence, as authorized by law (5 U.S.C. 5703) for 
persons in the Government service employed intermittently.
    [(f) Advisory Functions; Policies, Programs, and 
Procedures; Recommendations; Authority of Chairperson; Action 
by Chairperson Pursuant to Delegation of Authority.--The 
Council shall advise the Chairperson with respect to policies, 
programs, and procedures for carrying out the Chairperson's 
functions, duties, or responsibilities under this Act, and 
review applications for financial assistance under this Act and 
make recommendations to the Chairperson with respect to the 
approval of each application and the amount of financial 
assistance (if any) to provide to each applicant. The Council 
shall make recommendations to the Chairperson concerning--
          [(1) whether to approve particular applications for 
        financial assistance under subsections (c) and (p) of 
        section 5 that are determined by panels under section 
        10(c) to have artistic excellence and artistic merit; 
        and
          [(2) the amount of financial assistance the 
        Chairperson should provide with respect to each such 
        application the Council recommends for approval.
The Chairperson shall not approve or disapprove any such 
application until the Chairperson has received the 
recommendation of the Council on such application. The 
Chairperson shall have final authority to approve each 
application, except that the Chairperson may only provide to an 
applicant the amount of financial assistance recommended by the 
Council and may not approve an application with respect to 
which the Council makes a negative recommendation. In the case 
of an application involving $30,000, or less, the Chairperson 
may approve or disapprove such request if such action is taken 
pursuant to the terms of expressed and direct delegation of 
authority from the Council to the Chairperson, and provided 
that each such action by the Chairperson shall be reviewed by 
the Council, and that such action shall be used with discretion 
and shall not become a normal practice of providing assistance 
under such subsections, except that the terms of any such 
delegation of authority shall not permit obligations for 
expenditure of funds under such delegation for any fiscal year 
which exceed an amount equal to 10 per centum of the sums 
appropriate for that fiscal year pursuant to subparagraph (A) 
of paragraphs (1) of section 11(a)
    [Sec. 956. National Endowment for the Humanities.--
    [(a) Establishment.--There is established within the 
Foundation the National Endowment for the Humanities.
    [(b) Chairperson of the Endowment; Appointment, Terms, 
Reappointment; Vacancy; Expiration of Term.--
          [(1) The Endowment shall be headed by a chairperson, 
        who shall be appointed by the President, by and with 
        the advice and consent of the Senate.
          [(2) The term of office of the Chairperson shall be 
        four years, and the Chairperson shall be eligible for 
        reappointment. The provisions of this paragraph shall 
        apply to any person appointed to fill a vacancy in the 
        office of the Chairperson. Upon expiration of the 
        Chairperson's term of office the Chairperson shall 
        serve until the Chairperson's successor shall have been 
        appointed and shall have qualified.
    [(c) Functions of the Endowment; Publications; 
Traditionally Underrepresented Recipients of Financial 
Assistance.--The Chairperson, with the advice of the National 
Council of the Humanities (hereinafter established), is 
authorized to enter into arrangements, including contracts, 
grants, loans, and other forms of assistance, to--
          [(1) develop and encourage the pursuit of a national 
        policy for the promotion of progress and scholarships 
        in the humanities;
          [(2) initiate and support research and programs to 
        strengthen the research and teaching potential of the 
        United States in the humanities by making arrangements 
        with individuals or groups to support such activities; 
        any loans made by the Endowment shall be made in 
        accordance with terms and conditions approved by the 
        Secretary of the Treasury;
          [(3) initiate and support training and workshops in 
        the humanities by making arrangements with institutions 
        or individuals (fellowships awarded to individuals 
        under this authority may be for the purpose of study or 
        research at appropriate nonprofits selected by the 
        recipient of such aid, for stated periods of time);
          [(4) initiate and support programs and research which 
        have substantial scholarly and cultural significance 
        and that reach, or reflect the diversity and richness 
        of our American cultural heritage, including the 
        culture of, a minority, inner city, rural, or tribal 
        community;
          [(5) foster international programs and exchanges;
          [(6) foster the interchange of information in the 
        humanities;
          [(7) foster, with groups, education in, and public 
        understanding and appreciation of the humanities;
          [(8) support the publication of scholarly works in 
        the humanities;
          [(9) insure that the benefit of its programs will 
        also be available to our citizens where such programs 
        would otherwise be unavailable due to geographic or 
        economic reasons; and
          [(10) foster programs and projects that provide 
        access to, and preserve materials important to 
        research, education, and public understanding of, the 
        humanities.
In the case of publications under clause (8) of this subsection 
such publications may be supported without regard for the 
provisions of section 501 of title 44, United States Code, only 
if the Chairman consults with the Joint Committee on Printing 
of the Congress and the Chairman submits to the Committee on 
Labor and Human Resources of the Senate and the Committee on 
Education and Labor of the House of Representatives a report 
justifying any exemption from such section 501. In selecting 
individuals and groups of exceptional talent as recipients of 
financial assistance to be provided under this subsection, the 
Chairperson shall give particular regard to scholars, and 
educational and cultural institutions, that have traditionally 
been underrepresented.
    [(d) Coordination and Development of Endowment Programs 
With Other Federal and Non-Federal Programs.--The Chairperson 
shall coordinate the programs of the National Endowment for the 
Humanities, insofar as practicable, with existing Federal 
programs, designated State humanities agencies and with those 
undertaken by other public agencies or private groups, and 
shall develop the programs of the Endowment with due regard to 
the contribution to the objectives of this Act which can be 
made by other Federal agencies under existing programs.
    [(e) Limitation on Amount of Grant for Workshop Activities 
for Which an Admission or Other Charge Is Made to the General 
Public.--The total amount of any grant under subsection (c)(3) 
of this section to any group engaging in workshop activities 
for which an admission or other charge is made to the general 
public shall not exceed 30 per centum of the total cost of such 
activities.
    [(f) Grants-in-Aid Programs; Designation of State 
Administrative Agency; Matching Funds; Applications and Plans; 
Allotments; Cost Limitations; Grants to Regional Groups; Non-
Federal Funding; Definitions; Suspension of Grants; Single 
Entity Limitation.--
          [(1) The Chairperson, with the advice of the National 
        Council on the Humanities, is authorized, in accordance 
        with the provisions of this subsection, to establish 
        and carry out a program of grants-in-aid in each of the 
        several States in order to support not more than 50 per 
        centum of the cost of existing activities which meet 
        the standards enumerated in subsection (c) of this 
        section, and in order to develop a program in the 
        humanities in such a manner as will furnish adequate 
        programs in the humanities in each of the several 
        States.
          [(2)(A) Whenever a State desires to designate or to 
        provide for the establishment of a State agency as the 
        sole agency for the administration of the State plan, 
        such State shall designate the humanities council in 
        existence on the date as the State agency, and shall 
        match from State funds a sum equal to 50 per centum of 
        that portion of Federal financial assistance received 
        by such State under this subsection which is described 
        in the first sentence of paragraph (4) relating to the 
        minimum State grant, or 25 per centum of the total 
        amount of Federal financial assistance received by such 
        State under this subsection, whichever is greater, for 
        the fiscal year involved. In any State in which the 
        State selects the option described in this 
        subparagraph, the State shall submit, before the 
        beginning of each fiscal year, an application for 
        grants and accompany such application with a plan which 
        the Chairperson finds--
                  [(i) designates or provides for the 
                establishment of a state agency (hereinafter in 
                this section referred to as the ``State 
                agency'') as the sole agency for the 
                administration of State plan;
                  [(ii) provides that the chief executive 
                officer of the State will appoint new members 
                to the State humanities council designated 
                under the provisions of this subparagraph, as 
                vacancies occur as a result of the expiration 
                of the terms of members of such council, until 
                the chief executive officer has appointed all 
                of the members of such council;
                  [(iii) provides, from State funds, an amount 
                equal to 50 per centum of that portion of 
                Federal financial assistance received by such 
                State under this subsection which is described 
                in the first sentence of paragraph (4) relating 
                to the minimum State grant, or 25 per centum of 
                the total amount of Federal financial 
                assistance received by such State under this 
                subsection, whichever is greater, for the 
                fiscal year involved;
                  [(iv) provides that funds paid to the State 
                under this subsection will be expended solely 
                on programs approved by the State agency which 
                carry out the objectives of subsection (c) and 
                which are designed to bring the humanities to 
                the public;
                  [(v) provides assurances that State funds 
                will be newly appropriated for the purpose of 
                meeting the requirements of this subparagraph.
                  [(vi) provides that the State agency will 
                make such reports, in such form and containing 
                such information, as the Chairperson may 
                require, including a description of the 
                progress made toward achieving the goals of the 
                State plan;
                  [(vii) provides--
                          [(I) assurances that the State agency 
                        has held, after reasonable notice, 
                        public meetings in the State to allow 
                        scholars, interested organizations, and 
                        the public to present views and make 
                        recommendations regarding the State 
                        plan; and
                          [(II) a summary of such 
                        recommendations and of the response of 
                        the State agency to such 
                        recommendations; and
                  [(viii) contains--
                          [(I) a description of the level of 
                        participation during the most recent 
                        preceding year for which information is 
                        available by scholars and scholarly 
                        organizations in programs receiving 
                        financial assistance under this 
                        subsection;
                          [(II) for the most recent preceding 
                        year for which information is 
                        available, a description of the extent 
                        to which the programs receiving 
                        financial assistance under this 
                        subsection are available to all people 
                        and communities in the State; and
                          [(III) a description of programs 
                        receiving financial assistance under 
                        this subsection that exist or are being 
                        developed to secure wider participation 
                        of scholars and scholarly organizations 
                        identified under subclause (I) of this 
                        clause or that address the availability 
                        of the humanities to all people or 
                        communities identified under subclause 
                        (II) of this clause.
                No application may be approved unless the 
                accompanying plan satisfies the requirements 
                specified in this subsection.
          [(B) In any State in which the chief executive 
        officer of the State fails to submit an application 
        under subparagraph (A), the grant recipient in such 
        State shall--
                  [(i) establish a procedure which assures that 
                six members of the governing body of such grant 
                recipient shall be appointed by an appropriate 
                officer or agency of such State, except that in 
                no event may the number of such members exceed 
                25 per centum of the total membership of such 
                governing body; and
                  [(ii) provide, from any source, an amount 
                equal to the amount of Federal financial 
                assistance received by such grant recipient 
                under this subsection for the fiscal year 
                involved.
          [(3) Whenever a State selects to receive Federal 
        financial assistance under this subsection for any 
        fiscal year under paragraph (2)(B), any appropriate 
        entity desiring to receive such assistance shall submit 
        an application for such assistance at such time as 
        shall be specified by the Chairperson. Each such 
        application shall be accompanied by a plan which the 
        Chairperson finds--
                  [(A) provides assurances that the grant 
                recipient will comply with the requirements of 
                paragraph (2)(B);
                  [(B) provides that funds paid to the grant 
                recipient will be expended solely on programs 
                which carry out the objectives of subsection 
                (c);
                  [(C) establishes a membership policy which is 
                designed to assure broad public representation 
                with respect to programs administered by such 
                grant recipient;
                  [(D) provides a nomination process which 
                assures opportunities for nomination to 
                membership from various groups within the State 
                involved and from a variety of segments of the 
                population of such State, and including 
                individuals who by reason of their achievement, 
                scholarship, or creativity in the humanities, 
                are especially qualified to serve;
                  [(E) provides for a membership rotation 
                process which assures the regular rotation of 
                the membership and officers of such grant 
                recipient;
                  [(F) establishes reporting procedures which 
                are designed to inform the chief executive 
                officer of the State involved, and other 
                appropriate officers and agencies, of the 
                activities of such grant recipient;
                  [(G) establishes procedures to assure public 
                access to information relating to such 
                activities;
                  [(H) provides that such recipient will make 
                reports to the Chairperson, in such form, at 
                such times, and containing such information, as 
                the Chairperson may require, including a 
                description of the progress made toward 
                achieving the goals of the plan;
                  [(I) provides--
                          [(i) assurances that the grant 
                        recipient has held, after reasonable 
                        notice, public meetings in the State to 
                        allow scholars, interested 
                        organizations, and the public to 
                        present views and make recommendations 
                        regarding the plan; and
                          [(ii) a summary of such 
                        recommendations and of the response of 
                        the grant recipient to such 
                        recommendations; and
                  [(J) contains--
                          [(i) a description of the level of 
                        participation during the most recent 
                        preceding year for which information is 
                        available by scholars and scholarly 
                        organizations in programs receiving 
                        financial assistance under this 
                        subsection;
                          [(ii) for the most recent preceding 
                        year for which information is 
                        available, a description of the extent 
                        to which the programs receiving 
                        financial assistance under this 
                        subsection are available to all people 
                        and communities in the State; and
                          [(iii) a description of programs 
                        receiving financial assistance under 
                        this subsection that exist or are being 
                        developed to secure wider participation 
                        of scholars and scholarly organizations 
                        identified under clause (i) of this 
                        subparagraph or that address the 
                        availability of the humanities to all 
                        people or communities identified under 
                        clause (ii) of this subparagraph.
                No application may be approved unless the 
                accompanying plan satisfies the requirements 
                specified in this subsection.
          [(4) Of the sums available to carry out this 
        subsection for any fiscal year, each State and each 
        grant recipient which has a plan approved by the 
        Chairperson shall be allotted at least $200,000. If the 
        sums appropriated are insufficient to make the 
        allotments under the preceding sentence in full, such 
        sums shall be allotted among such States and grant 
        recipients in equal amounts. In any case where the sums 
        available to carry out this subsection for any fiscal 
        year are in excess of the amount required to make the 
        allotments under the first sentence of this paragraph--
                  [(A) 34 per centum of the amount of such 
                excess for such fiscal year shall be available 
                to the Chairperson for making grants under this 
                subsection to States and regional groups and 
                entities applying for such grants;
                  [(B) 44 per centum of the amount of such 
                excess for such fiscal year shall be allotted 
                in equal amounts among the States and grant 
                recipients which have plans approved by the 
                Chairperson; and
                  [(C) 22 per centum of the amount of such 
                excess for such fiscal year shall be allotted 
                among the States and grant recipients which 
                have plans approved by the Chairperson in 
                amounts which bear the same ratio to such 
                excess as the population of the State for which 
                the plan is approved (or, in the case of a 
                grant recipient other than a State, the 
                population of the State in which such grant 
                recipient is located) bears to the population 
                of all the States.
          [(5)(A) The amount of each allotment to a State for 
        any fiscal year under this subsection shall be 
        available to each State or grant recipient, which has a 
        plan or application approved by the Chairperson in 
        effect on the first day of such fiscal year, to pay not 
        more than 50 per centum of the total cost of any 
        project or production described in paragraph (1). The 
        amount of any allotment made under paragraph (4) for 
        any fiscal year--
                  [(i) which exceeds $125,000, but
                  [(ii) which does not exceed 20 per centum of 
                such allotment, shall be available, at the 
                discretion of the Chairperson, to pay up to 100 
                per centum of the cost of programs under this 
                subsection if such programs would otherwise be 
                unavailable to the residents of that State.
          [(B) Any amount allotted to a State under the first 
        sentence of paragraph (4) for any fiscal year which is 
        not obligated by the State agency or grant recipient 
        prior to sixty days prior to the end of the fiscal year 
        for which such sums are appropriated shall be available 
        to the Chairperson for making grants to regional 
        groups.
          [(C) Funds made available under this subsection shall 
        not be used to supplant non-Federal funds.
          [(D) For the purposes of this paragraph, the term 
        ``regional group'' means any multistate group, whether 
        or not representative of contiguous States.
          [(E) For purposes of paragraph (4)(B), the term 
        ``State'' and the term ``grant recipient'' include, in 
        addition to the several States of the Union, only those 
        special jurisdictions specified in section 3(g) which 
        have a population of 200,000 or more, according to the 
        latest decennial census.
          [(6) All amounts allotted or made available under 
        paragraph (4) for a fiscal year which are not granted 
        to any entity during such fiscal year shall be 
        available to the National Endowment for the Humanities 
        for the purpose of carrying out subsection (c).
          [(7) Whenever the Chairperson, after reasonable 
        notice and opportunity for hearing, finds that--
                  [(A) a group or grant recipient is not 
                complying substantially with the provisions of 
                this subsection;
                  [(B) a State agency or grant recipient is not 
                complying substantially with terms and 
                conditions of its State plan or grant recipient 
                application approved under this subsection; or
                  [(C) any funds granted to any group or State 
                agency or grant recipient under this subsection 
                have been diverted from the purposes for which 
                they are allotted or paid, the Chairperson 
                shall immediately notify the Secretary of the 
                Treasury and the group, State agency, or grant 
                recipient with respect to which such finding 
                was made that no further grants will be made 
                under this subsection to such group, State 
                agency, or grant recipient until there is no 
                longer a default or failure to comply or the 
                diversion has been corrected, or, if the 
                compliance or correction is impossible, until 
                such group, State agency, or grant recipient 
                repays or arranges the repayment of the Federal 
                funds which have been improperly diverted or 
                expended.
          [(8) Except as provided in the third sentence of 
        paragraph (4), and paragraphs (5) and (6), the 
        Chairperson may not make grants under this subsection 
        to more than one entity in any State.
    [(g) Payment of Performers and Supporting Personnel; 
Standards, Regulations, and Procedures.--It shall be a 
condition of the receipt of any grant under this section that 
the group, individual, or State agency or entity receiving such 
grant furnish adequate assurances to the Secretary of Labor 
that--
          [(1) all professional performers and related or 
        supporting professional personnel employed on projects 
        or productions which are financed in whole or in part 
        under this section will be paid, without subsequent 
        deduction or rebate on any account, not less than the 
        minimum compensation as determined by the Secretary of 
        Labor to be the prevailing minimum compensation for 
        persons employed in similar activites; and
          [(2) no part of any project or production which is 
        financed in whole or in part under this section will be 
        performed or engaged in under working conditions which 
        are unsanitary or hazardous or dangerous to the health 
        and safety of the employees engaged in such project or 
        production. Compliance with the safety and sanitary 
        laws of the State in which the performance or part 
        thereof is to take place shall be prima facie evidence 
        of compliance. The Secretary of Labor shall prescribe 
        standards, regulations, and procedures necessary to 
        carry out this subsection.
    [(h) Program of Contracts or Grants-in-Aid to Public 
Agencies and Private Nonprofit Organizations; Limitation on 
Payments.--
          [(1) The Chairperson of the National Endowment for 
        the Humanities, with the advice of the National Council 
        on the Humanities, is authorized, in accordance with 
        the provisions of this subsection, to establish and 
        carry out a program of contracts with, or grants-in-aid 
        to, public agencies and private nonprofit organizations 
        for the purpose of--
                  [(A) enabling cultural organizations and 
                institutions to increase the levels of 
                continuing support and to increase the range of 
                contributors to the program of such 
                organizations or institutions;
                  [(B) providing administrative and management 
                improvements for cultural organizations and 
                institutions, particularly in the field of 
                long-range financial planning;
                  [(C) enabling cultural organizations and 
                institutions to increase audience participation 
                in, and appreciation of, programs sponsored by 
                such organizations and institutions;
                  [(D) stimulating greater cooperation among 
                cultural organizations and institutions 
                especially designed to serve better the 
                communities in which such organizations or 
                institutions are located;
                  [(E) fostering greater citizen involvement in 
                planning the cultural development of a 
                community; and
                  [(F) for bicentennial programs, assessing 
                where our society and Government stand in 
                relation to the founding principles of the 
                Republic, primarily focused on projects which 
                will bring together the public and private 
                citizen sectors in an effort to find new 
                processes for solving problems facing our 
                Nation in its third century.
          [(2)(A) Except as provided in subparagraph (B) of 
        this paragraph, the total amount of any payment made 
        under this subsection for a program or project may not 
        exceed 50 per centum of the cost of such program or 
        project.
          [(B) The Chairperson, with the advice of the Council, 
        may waive all or part of the requirement of matching 
        funds provided in subparagraph (A) of this paragraph, 
        but only for the purposes described in clause (F) of 
        paragraph (1), whenever he determines that highly 
        meritorious proposals for grants and contracts under 
        such clause, could not otherwise be supported from non-
        Federal sources or from Federal sources other than 
        funds authorized by section 11(a)(3), unless such 
        matching requirement is waived. Such waiver may not 
        exceed 15 per centum of the amount appropriated in any 
        fiscal year and available to the National Endowment for 
        the Humanities for the purpose of this subsection.
          [(3) In carrying out the program authorized by this 
        subsection, the Chairperson of the National Endowment 
        for the Humanities shall have the same authority as is 
        established in section 7(c) and section 10.
    [(i) Interagency Agreements.--The Chairperson may enter 
into interagency agreements to promote or assist with the 
humanities-related activities of other Federal agencies, on 
either a reimbursable or nonreimbursable basis, and may use 
funds authorized to be appropriated for the purposes of 
subsection (c) for the costs of such activities.
    [(j) Payment of Wages at Prevailing Rates; Authority of 
Secretary of Labor.--It shall be a condition of the receipt of 
any grant under this section that the group or individual of 
exceptional talent or the State, State agency, or entity 
receiving such grant furnish adequate assurances to the 
Secretary of Labor that all laborers and mechanics employed by 
contractors or subcontractors on construction projects assisted 
under this section shall be paid wages at rates not less than 
those prevailing on similar construction in the locality, as 
determined by the Secretary of Labor in accordance with the 
Davis-Bacon Act, as amended (40 U.S.C. 276a-276a-5). The 
Secretary of Labor shall have, with respect to the labor 
standards specified in this subsection, the authority and 
functions set forth in Reorganization Plan Numbered 14 of 1950 
(15 F.R. 3176; 5 U.S.C. 133z-15) and section 2 of the Act of 
June 13, 1934, as amended (40 U.S.C. 276c).
    [(k) National Information and Data Collection System on 
Humanities, Scholars, Educational and Cultural Groups, and 
Audiences; Development and Implementation Plan; State of the 
Humanities Reports.--The Chairperson of the National Endowment 
for the Humanities shall, in ongoing consultation with State 
and local agencies, other relevant organizations, and relevant 
Federal agencies, continue to develop and implement a practical 
system of national information and data collection and public 
dissemination on the humanities, scholars, educational and 
cultural groups, and their audiences. Such system shall include 
cultural and financial trends in the various humanities fields, 
trends in audience participation, and trends in humanities 
education on national, regional, and State levels. Such system 
shall be used, along with a summary of the data submitted with 
plans under subsection (f), to prepare a report on the state of 
the humanities in the Nation. The state of the humanities 
report shall include a description of the availability of the 
Endowment's programs to emerging and culturally diverse 
scholars, cultural and educational organizations, and 
communities and of the participation of such scholars, 
organizations, and communities in such programs. The state of 
the humanities report shall be submitted to the President and 
the Congress, and provided the States, not later than October 
1, 1992, and quadrennially thereafter.
    [(l) Eligibility of Group for Financial Assistance.--Any 
group shall be eligible for financial assistance under this 
section only if--
          [(1) no part of its net earnings inures to the 
        benefit of any private stockholder or stockholders, or 
        individual or individuals; and
          [(2) donations to such group are allowable as a 
        charitable contribution under the standards of section 
        170(c) of the Internal Revenue Code of 1986.
    [(m) Annual Awards.--The Chairperson, with the advice of 
the National Council on the Humanities, is authorized to make 
the following annual awards:
          [(1) The Jefferson Lecture in the Humanities Award to 
        one individual for distinguished intellectual 
        achievement in the humanities. The annual award shall 
        not exceed $10,000.
          [(2) The Charles Frankel Prize to honor individuals 
        who have made outstanding contributions to the public 
        understanding of the humanities. Not more than 5 
        individuals may receive such prize each year. Each 
        prize shall not exceed $5,000.
    [Sec. 957. National Council on the Humanities.--
    [(a) Establishment.--There is established in the National 
Endowment for the Humanities a National Council on the 
Humanities.
    [(b) Composition; Basis for Selection of Members; 
Representation of Interests; Recommendations of National 
Organizations.--The Council shall be composed of the 
Chairperson of the National Endowment for the Humanities, who 
shall be the Chairperson of the Council, and twenty-six other 
members appointed by the President, by and with the advice and 
consent of the Senate, from private life. Such members shall be 
individuals who (1) are selected from among private citizens of 
the United States who are recognized for their broad knowledge 
of, expertise in, or commitment to the humanities, and (2) have 
established records of distinguished service and scholarship or 
creativity and in a manner which will provide a comprehensive 
representation of the views of scholars and professional 
practitioners in the humanities and of the public throughout 
the United States. The President is requested in the making of 
such appointments to give consideration to such recommendations 
as may from time to time be submitted to him by leading 
national organizations concerned with the humanities. In making 
such appointments, the President shall give due regard to 
equitable representation of women, minorities, and individuals 
with disabilities who are involved in the humanities.
    [(c) Term of Office; Vacancies; Reappointment.--Each member 
shall hold office for a term of six years, except that (1) the 
members first taking office shall serve, as designated by the 
President, nine for terms of two years, nine for terms of four 
years, and eight for terms of six years, and (2) any member 
appointed to fill a vacancy shall serve for the remainder of 
the terms for which such member's predecessor was appointed. No 
member shall be eligible for reappointment during the two-year 
period following the expiration of such member's term. 
Notwithstanding any other provisions of this subsection, a 
member shall serve after the expiration of such member's term 
until such member's successor takes office.
    [(d) Meetings; Quorum.--The Council shall meet at the call 
of the Chairperson but not less often than twice during each 
calendar year. Fourteen members of the Council shall constitute 
a quorum.
    [(e) Compensation and Travel Expenses.--Members shall 
receive compensation at a rate to be fixed by the Chairperson 
but not to exceed the per diem equivalent of the rate 
authorized for grade GS-18 by section 5332 of title 5 of the 
United States Code and be allowed travel expenses including per 
diem in lieu of subsistence, as authorized by law (5 U.S.C. 
5703) for persons in the Government service employed 
intermittently.
    [(f) Advisory Functions; Policies, Programs, and 
Procedures; Review of Applications for Financial Support; 
Recommendations Prerequisite to Action of the Chairperson; 
Unilateral Action by Chairperson Pursuant to Delegation of 
Authority.--The Council shall (1) advise the Chairperson with 
respect to policies, programs, and procedures for carrying out 
the Chairperson's functions, and (2) shall review applications 
for financial support and make recommendations thereon to the 
Chairperson. The Chairperson shall not approve or disapprove 
any such application until the Chairperson has received the 
recommendation of the Council on such application, unless the 
Council fails to make a recommendation thereon within a 
reasonable time. In the case of any application involving 
$30,000 or less, the Chairperson may approve or disapprove such 
request if such action is taken pursuant to the terms of a 
delegation of authority from the Council to the Chairperson, 
and provided that each such action by the Chairperson shall be 
reviewed by the Council: Provided, That the terms of any such 
delegation of authority shall not permit obligations for 
expenditure of funds under such delegation for any fiscal year 
which exceed an amount equal to 10 per centum of the sums 
appropriated for that fiscal year pursuant to subparagraph (B) 
of paragraph (1) of section 11(c).
    [Sec. 958. Federal Council on the Arts and the 
Humanities.--
    [(a) Establishment.--There is established within the 
Foundation a Federal Council on the Arts and the Humanities.
    [(b) Composition; Chairperson, Designation by President; 
Changes in Membership To Meet Changes in Programs or Executive 
Branch Organization.--The Council shall be composed of the 
Chairperson of the National Endowment for the Arts, the 
Chairperson of the National Endowment for the Humanities, the 
Director of the Institute of Museum Services, the Secretary of 
Education, the Secretary of the Smithsonian Institution, the 
Director of the National Science Foundation, the Librarian of 
Congress, the Director of the National Gallery of Art, the 
Chairman of the Commission of Fine Arts, the Archivist of the 
United States, the Commissioner, Public Buildings Service, 
General Services Administration, the Assistant Secretary for 
Aging, a member designated by the Secretary of State, and a 
member designated by the Secretary of the Interior, a member 
designated by the Chairman of the Senate Commission on Art and 
Antiquities, and a member designated by the Speaker of the 
House. The President shall designate the presiding officer of 
the Council from among the members. The President is authorized 
to change the membership of the Council from time to time as 
the President deems necessary to meet changes in Federal 
programs or executive branch organization.
    [(c) Functions.--The Council shall--
          [(1) advise and consult with the Chairperson of the 
        National Endowment for the Arts and the Chairperson of 
        the National Endowment for the Humanities on major 
        problems arising in carrying out the purposes of the 
        Foundation;
          [(2) Advise and consult with the National Museum 
        Services Board and with the Director of the Institute 
        of Museum Services on major problems arising in 
        carrying out the purposes of such Institute;
          [(3) coordinate, by advice and consultation, so far 
        as is practicable, the policies and operations of the 
        National Endowment for the Arts, the National Endowment 
        for the Humanities and the Institute of Museum 
        Services, including joint support of activities, as 
        appropriate;
          [(4) promote coordination between the programs and 
        activities of the Foundation and related programs and 
        activities of other Federal agencies;
          [(5) plan and coordinate appropriate participation 
        (including productions and projects) in major and 
        historic national events;
          [(6) undertake studies and make reports which address 
        the state of the arts and humanities, particularly with 
        respect to their economic needs and problems; and
          [(7) encourage an ongoing dialogue in support of the 
        arts and the humanities among Federal agencies.
    [Sec. 959. Administrative Provisions.--
    [(a) General Authority of Chairpersons.--In addition to any 
authorities vested in them by other provisions of this Act, the 
Chairperson of the National Endowment for the Arts and the 
Chairperson of the National Endowment for the Humanities in 
carrying out their respective functions, shall each have 
authority--
          [(1) to prescribe such regulations as the Chairperson 
        deems necessary governing the manner in which the 
        Chairperson's functions shall be carried out;
          [(2) in the discretion of the Chairperson of an 
        Endowment, after receiving the recommendation of the 
        National Council of that Endowment, to receive money 
        and other property donated, bequeathed, or devised to 
        that Endowment with or without a condition or 
        restriction, including a condition that the Chairperson 
        use other funds of that Endowment for the purposes of 
        the gift; except that a Chairperson may receive a gift 
        without a recommendation from the Council to provide 
        support for any application or project which can be 
        approved without Council recommendation under the 
        provisions of sections 6(f) and 8(f), and may receive a 
        gift of $15,000, or less without Council recommendation 
        in the event the Council fails to provide such 
        recommendation within a reasonable period of time and 
        to use, sell, or otherwise dispose of such property for 
        the purpose of carrying out sections 5(c) and 7(c);
          [(3) to appoint employees, subject to the civil 
        service laws, as necessary to carry out the 
        Chairperson's functions, define their duties, and 
        supervise and direct their activities;
          [(4) to utilize experts and consultants, including 
        panels of experts, who may be employed as authorized by 
        section 3109 of title 5, United States Code;
          [(5) to accept and utilize the services of voluntary 
        and uncompensated personnel and reimburse them for 
        travel expenses, including per diem, as authorized by 
        law (5 USC 73b-2) for persons in the Government, 
        service employed without compensation;
          [(6) to make advance, progress, and other payments 
        without regard to section 3324 of title 31, United 
        States Code;
          [(7) to rent office space in the District of 
        Columbia; and
          [(8) to make other necessary expenditures.
    [(b) Rules for Distribution of Donations, Bequests, and 
Devises; Gifts With or Without Conditions; Transfers for Tax 
Purposes.--
          [(1) In any case in which any money or other property 
        is donated, bequeathed, or devised to the Foundation 
        without designation of the Endowment for the benefit of 
        which such property is intended, and without condition 
        or restriction other than that it be used for the 
        purposes of the Foundation, such property shall be 
        deemed to have been donated, bequeathed, or devised in 
        equal shares to each Endowment and each Chairperson of 
        an Endowment shall have authority to receive such 
        property.
          [(2) In any case in which any money or other property 
        is donated, bequeathed, or devised to the Foundation 
        with a condition or restriction, such property shall be 
        deemed to have been donated, bequeathed, or devised to 
        that Endowment whose function it is to carry out the 
        purpose or purposes described or referred to by the 
        terms of such condition or restriction, and each 
        Chairperson of an Endowment shall have authority to 
        receive such property.
          [(3) For the purposes of the preceding sentence, if 
        one or more of the purposes of such a condition or 
        restriction is covered by the functions of both 
        Endowments, or if some of the purposes of such a 
        condition or restriction are covered by the functions 
        of one Endowment and other of the purposes of such a 
        condition or restriction are covered by the functions 
        of the other Endowment, the Federal Council on the Arts 
        and the Humanities shall determine an equitable manner 
        for distribution between each of the Endowments of the 
        property so donated, bequeathed, or devised.
          [(4) For the purpose of the income tax, gift tax, and 
        estate tax laws of the United States, any money or 
        other property donated, bequeathed, or devised to the 
        Foundation or one of its Endowments and received by the 
        Chairperson of an Endowment pursuant to authority 
        derived under this subsection shall be deemed to have 
        been donated, bequeathed, or devised to or for the use 
        of the United States.
    [(c) Advisory Panels; Membership; Procedures.--The 
Chairperson of the National Endowment for the Arts shall 
utilize advisory panels to review applications, and to make 
recommendations to the National Council on the Arts in all 
cases except cases in which the Chairperson exercises authority 
delegated under section 6(f). When reviewing applications, such 
panels shall recommend applications for projects, productions, 
and workshops solely on the basis of artistic excellence and 
artistic merit. The Chairperson shall issue regulations and 
establish procedures--
          [(1) to ensure that all panels are composed, to the 
        extent practicable, of individuals reflecting a wide 
        geographic, ethnic, and minority representation as well 
        as individuals reflecting diverse artistic and cultural 
        points of view;
          [(2) to ensure that all panels include representation 
        of lay individuals who are knowledgeable about the arts 
        but who are not engaged in the arts as a profession and 
        are not members of either artists' organizations or 
        arts organizations;
          [(3) to ensure that, when feasible, the procedures 
        used by panels to carry out their responsibilities are 
        standardized;
          [(4) to require panels--
                  [(A) to create written records summarizing--
                          [(i) all meetings and discussions of 
                        such panel; and
                          [(ii) the recommendations made by 
                        such panel to the Council; and
                  [(B) to make such records available to the 
                public in a manner that protects the privacy of 
                individual applicants and panel members;
          [(5) to require, when necessary and feasible, the use 
        of site visitations to view the work of the applicant 
        and deliver a written report on the work being 
        reviewed, in order to assist panelists in making their 
        recommendations; and
          [(6) to require that the membership of each panel 
        change substantially from year to year and to provide 
        that each individual is ineligible to serve on a panel 
        for more than 3 consecutive years. In making 
        appointments to panels, the Chairperson shall ensure 
        that an individual who has a pending application for 
        financial assistance under this Act, or who is an 
        employee or agent of an organization with a pending 
        application, does not serve as a member of any panel 
        before which such application is pending. The 
        prohibition described in the preceding sentence shall 
        commence with respect to such individual beginning on 
        the date such application is submitted and shall 
        continue for so long as such application is pending.
    [(d) Endowment Activities; Reports.--The Chairperson of the 
National Endowment for the Arts and the Chairperson of the 
National Endowment for the Humanities shall each submit an 
annual report to the President for transmittal to the Congress 
on or before the 15th day of April of each year. The report 
shall summarize the activities of the Endowment for the 
preceding year, and may include such recommendations as the 
Chairman deems appropriate.
    [(e) Council Activities; Reports.--The National Council on 
the Arts and the National Council on the Humanities, 
respectively, may each submit an annual report to the President 
for transmittal to the Congress on or before the 15th day of 
April of each year setting forth a summary of its activities 
during the preceding year or its recommendations for any 
measures which it considers necessary or desirable.
    [(f) Post-Award Evaluation of Assisted Projects, 
Productions, and Programs; Reports; Extension of Time for 
Compliance; Failure to Satisfy Purposes of Assistance.--
          [(1) The Chairperson of the National Endowment for 
        the Arts and the Chairperson of the National Endowment 
        for the Humanities shall conduct a post-award 
        evaluation of projects, productions, and programs for 
        which financial assistance is provided by their 
        respective Endowments under sections 5(c) and 7(c). 
        Such evaluation may include an audit to determine the 
        accuracy of the reports required to be submitted by 
        recipients under clauses (i) and (ii) of paragraph 
        (2)(A). As a condition of receiving such financial 
        assistance, a recipient shall comply with the 
        requirements specified in paragraph (2) that are 
        applicable to the project, production, or program for 
        which such financial assistance is received.
          [(2)(A) The recipient of financial assistance 
        provided by either of the Endowments shall submit to 
        the Chairperson of the Endowment involved--
                  [(i) a financial report containing such 
                information as the Chairperson deems necessary 
                to ensure that such financial assistance is 
                expended in accordance with the terms and 
                conditions under which it is provided;
                  [(ii) a report describing the project, 
                production, or program carried out with such 
                financial assistance; and
                  [(iii) if practicable, as determined by the 
                Chairperson, a copy of such project, 
                production, or program.
          [(B) Such recipient shall comply with the 
        requirements of hits paragraph not later than 90 days 
        after the end of the period for which such financial 
        assistance is provided. The Chairperson may extend the 
        90-day period only if the recipient shows good cause 
        why such an extension should be granted.
          [(3) If such recipient substantially fails to satisfy 
        the purposes for which such financial assistance is 
        provided and the criteria specified in subsection 
        (c)(3)(A), as determined by the Chairperson of the 
        Endowment that provided such financial assistance, then 
        such Chairperson may--
                  [(A) for purposes of determining whether to 
                provide any subsequent financial assistance, 
                take into consideration the results of the 
                post-award evaluation conducted under this 
                subsection;
                  [(B) prohibit the recipient of such financial 
                assistance to use the name of, or in any way 
                associate such project, production, or program 
                with the Endowment that provided such financial 
                assistance; and
                  [(C) if such project, production, or program 
                is published, require that the publication 
                contain the following statement: ``The 
                opinions, findings, conclusions, and 
                recommendations expressed herein do not reflect 
                the views of the National Endowment for the 
                Arts or the National Endowment for the 
                Humanities.''
    [Sec. 960. Authorization of Appropriations.--
    [(a) Contracts, Grants-in-Aid, and Loans to Groups, 
Individuals, Public Agencies, and Private Nonprofit 
Organizations; Availability of Appropriations; Guidelines.--
          [(1)(A)(i) For the purpose of carrying out section 
        5(c), there are authorized to be appropriated to the 
        National Endowment for the Arts $125,800,000 for fiscal 
        year 1991 and such sums as may be necessary for fiscal 
        years 1992 and 1993.
          [(ii) For fiscal years--
                  [(I) 1991 and 1992 not less than 25 percent 
                of the amount appropriated for the respective 
                fiscal year; and
                  [(II) 1993 not less than 27.5 percent of the 
                amount appropriated for such fiscal year; shall 
                be for carrying out section 5(g).
          [(iii) For fiscal years--
                  [(I) 1991 and 1992 not less than 5 percent of 
                the amount appropriated for the respective 
                fiscal year; and
                  [(II) 1993 not less than 7.5 percent of the 
                amount appropriated for such fiscal year;
        shall be for carrying out programs under section 
        5(p)(2) (relating to programs to expand public access 
        to the arts in rural and innercity areas) Not less than 
        50 percent of the funds required by this clause to be 
        used for carrying out such programs shall be used for 
        carrying out such programs in rural areas.
          [(B) For the purpose of carrying out section 7(c), 
        there are authorized to be appropriated to the National 
        Endowment for the Humanities $119,900,000 for fiscal 
        year 1991 and such sums as may be necessary for fiscal 
        year 1992 and 1993. Of the sums so appropriated for any 
        fiscal year, not less than 20 per centum shall be for 
        carrying out section 7(f).
          [(2)(A) There are authorized to be appropriated for 
        each fiscal year ending before October 1, 1993, to the 
        National Endowment for the Arts an amount equal to the 
        sum of--
                  [(i) the total amounts received by such 
                Endowment under section 10(a)(2), including the 
                value of property donated, bequeathed, or 
                devised to such Endowment; and
                  [(ii) the total amounts received by the 
                grantees of such Endowment from non-Federal 
                sources, including the value of property 
                donated, bequeathed, or devised to such 
                grantees, for use in carrying out projects and 
                other activities under paragraph (1) through 
                paragraph (10) of section 5(c);
        except that the amounts so appropriated to the National 
        Endowment for the Arts shall not exceed $13,000,000 for 
        fiscal year 1991 and such sums as may be necessary for 
        fiscal years 1992 and 1993.
          [(B) There are authorized to be appropriated for each 
        fiscal year ending October 1, 1993, to the National 
        Endowment for the Humanities an amount equal to the sum 
        of--
                  [(i) the total amounts received by such 
                Endowment under section 10(a)(2), including the 
                value of property donated bequeathed, or 
                devised to such Endowment; and
                  [(ii) the total amounts received by the 
                grantees and subgrantees of such Endowment from 
                non-Federal sources, including the value of 
                property donated, bequeathed, or devised to 
                such grantees and subgrantees for use in 
                carrying out activities under paragraph (1) 
                through paragraph (10) of section 7(c);
        except that the amounts so appropriated to the National 
        Endowment for the Humanities shall not exceed 
        $12,000,000 for fiscal year 1991 and such sums as may 
        be necessary for fiscal years 1992 and 1993.
          [(3)(A) There are authorized to be appropriated for 
        each fiscal year ending before October 1, 1993, to the 
        National Endowment for the Arts an amount equal to the 
        sum of--
                  [(i) the total amounts received by such 
                Endowment, for the purposes set forth in 
                section 5(p)(1) pursuant to the authority of 
                section 10(a)(2); and
                  [(ii) the total amounts received by the 
                grantees of such Endowment from non-Federal 
                sources, including the value of property 
                donated, bequeathed, or devised to such 
                grantees, for use in carrying out activities 
                under subparagraph (A) through subparagraph (F) 
                of section 5(l)(1); except that the amounts so 
                appropriated to such Endowment shall not exceed 
                $15,000,000 for fiscal year 1991 and such sums 
                as may be necessary for fiscal years 1992 and 
                1993.
          [(B) There are authorized to be appropriated for each 
        fiscal year ending before October 1, 1993, to the 
        National Endowment for the Humanities an amount equal 
        to the sum of--
                  [(i) the total amounts received by such 
                Endowment, including the value of property 
                donated, bequeathed, or devised to such 
                Endowment, for the purposes set forth in 
                section 7(h)(1) pursuant to the authority of 
                section (10)(a)(2); and
                  [(ii) the total amounts received by the 
                grantees of such Endowment from non-Federal 
                sources, including the value of property 
                donated, bequeathed, or devised to such 
                grantees, for use in carrying out activities 
                under subparagraph (A) through subparagraph (F) 
                of section 7(h)(l); except that the amounts so 
                appropriated to such Endowment shall not exceed 
                $15,150,000 for fiscal year 1991 and such sums 
                as may be necessary for fiscal years 1992 and 
                1993.
          [(C) Sums appropriated pursuant to subparagraph (A) 
        and subparagraph (B) for any fiscal year shall remain 
        available for obligation and expenditure until 
        expended.
          [(4) The Chairperson of the National Endowment for 
        the Arts and the Chairperson of the National Endowment 
        for the Humanities, as the case may be, shall issue 
        guidelines to implement the provisions of paragraph (2) 
        and paragraph (3). Such guidelines shall be consistent 
        with the requirements of section 5(p)(1) section 7(f), 
        and section 7(h)(2), as the case may be, regarding 
        total Federal support of activities, programs, 
        projects, or productions carried out under authority of 
        this Act.
    [(b) Availability of Appropriated Unexpended Funds; Notice 
of Availability of Funds by Advance Appropriation.--
          [(1) Sums appropriated pursuant to subsection (a) for 
        any fiscal year shall remain available for obligation 
        and expenditure until expended.
          [(2) In order to afford adequate notice to interested 
        persons of available assistance under this Act, 
        appropriations authorized under subsection (a) are 
        authorized to be included in the measure making 
        appropriations for the fiscal year preceding the fiscal 
        year for which such appropriations become available for 
        obligation.
    [(c) Administrative Appropriations.--
          [(1) There are authorized to be appropriated to the 
        National Endowment for the Arts $21,200,200 for fiscal 
        year 1991 and such sums as may be necessary for fiscal 
        years 1992 and 1993, to administer the provisions of 
        this Act, or any other program for which the 
        Chairperson of the National Endowment for the Arts is 
        responsible, including not to exceed $100,000 for each 
        such fiscal year for official reception and 
        representation expenses. The total amount which may be 
        obligated or expended for such expenses for fiscal year 
        1995 through the use of appropriated funds or any other 
        source of funds shall not exceed $100,000.
          [(2) There are authorized to be appropriated to the 
        National Endowment for the Humanities $17,950,000 for 
        fiscal year 1991 and such sums as may be necessary for 
        fiscal years 1992 and 1993, to administer the 
        provisions of this Act, or any other program for which 
        the Chairperson of the National Endowment for the 
        Humanities is responsible, including not to exceed 
        $100,000 for each such fiscal year for official 
        reception and representation expenses. The total amount 
        which may be obligated or expended for such expenses 
        for fiscal year 1995 through the use of appropriated 
        funds or any other source of funds shall not exceed 
        $100,000.
    [(d) Total Amount of Appropriations.--
          [(1) The total amount of appropriations to carry out 
        the activities of the National Endowment for the Arts 
        shall not exceed--
                  [(A) $167,060,000 for fiscal year 1986,
                  [(B) $170,206,400 for fiscal year 1987, and
                  [(C) $177,014,656 for fiscal year 1988.
          [(2) The total amount of appropriations to carry out 
        the activities for the National Endowment for the 
        Humanities shall not exceed--
                  [(A) $139,878,000 for fiscal year 1986,
                  [(B) $145,057,120 for fiscal year 1987, and
                  [(C) $150,859,405 for fiscal year 1988.
    [(e) Prohibition of Grants to Production Workshops Using 
Admission Proceeds for Unauthorized Purposes.--No grant shall 
be made to a workshop (other than a workshop conducted by a 
school, college, or university) for a production for which a 
direct or indirect admission charge is asked if the proceeds, 
after deducting reasonable costs, are used for purposes other 
than assisting the grantee to develop high standards of 
artistic excellence or encourage greater appreciation of the 
arts and humanities by our citizens.
    [(f) Availability of Appropriations for Arts Education.--
          [(1) Subject to subparagraph (2), in any fiscal year 
        in which the aggregate amount appropriated to the 
        National Endowment for the Arts exceeds $175,000,000, 
        50 percent of such excess shall be available to carry 
        out section 5A.
          [(2) In each fiscal year, the amount made available 
        to carry out section 5A shall not exceed $40,000,000, 
        in the aggregate.
          [(3) Funds made available to carry out section 5A 
        shall remain available until expended.]

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.

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

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

                TITLE II--NATIONAL ENDOWMENT FOR THE ARTS

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

            TITLE III--NATIONAL ENDOWMENT FOR THE HUMANITIES

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

SEC 2. PURPOSES.

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

SEC. 3. DEFINITIONS.

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

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

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

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

SEC. 102. GENERAL LIMITATIONS ON GRANTS.

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

SEC. 103. JOINT ADMINISTRATION.

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

SEC. 104. STUDY ON A TRUE ENDOWMENT.

    (a) In General.--The Chairperson of the National Endowment 
for the Arts and the Chairperson of the National Endowment for 
the Humanities, in consultation with persons with expertise in 
the arts, humanities, business, charitable giving, and 
copyright industries, and other appropriate Federal agencies, 
shall jointly conduct, or contract for, a study on the 
feasibility of establishing a true endowment for the National 
Endowment for the Arts and the National Endowment for the 
Humanities in order to provide supplemental funding to support 
the efforts of the National Endowment for the Arts and the 
National Endowment for the Humanities, respectively.
    (b) Scope of the Study.--The study described in subsection 
(a) shall examine innovative methods through which a true 
endowment may be funded, including such methods as private 
fundraising, an extension of a copyright term, recapture of 
funds from past grants of the National Endowment for the Arts 
and the National Endowment for the Humanities that have proven 
profitable, or any other innovative methods the Chairpersons 
determine appropriate.
    (c) Report.--No later than 1 year after the date on which 
funding is made available under the Act to conduct the study 
described in subsection (a), the Chairperson of the National 
Endowment for the Arts and the Chairperson for the National 
Endowment for the Humanities shall jointly prepare and submit 
to the appropriate committees of Congress a report containing 
recommendations on the innovative methods through which the 
true endowment may be funded to support efforts described in 
subsection (a).

SEC. 105. AUTHORIZATION OF APPROPRIATIONS.

    (a) National Endowment for the Arts.--
          (1) In general.--
                  (A) Total authorization.--There are 
                authorized to be appropriated to carry out the 
                activities of the National Endowment for the 
                Arts under this Act $153,900,000 for fiscal 
                year 1996, $145,205,000 for fiscal year 1997, 
                $138,895,000 for fiscal year 1998, $131,950,000 
                for fiscal year 1999, and $125,353,000 for 
                fiscal year 2000.
                  (B) General reservations.--There shall be 
                reserved amounts sufficient to carry out 
                subsection (c)(1).
                  (C) Reservation for partnership grants.--40 
                percent of the amount appropriated for a fiscal 
                year under subparagraph (A) and remaining after 
                amounts are reserved under subparagraph (B) 
                shall be reserved for making grants under 
                section 202(c).
                  (D) Reservation for national significance 
                grants.--40 percent of the amount appropriated 
                for a fiscal year under subparagraph (A) and 
                remaining after amounts are reserved under 
                subparagraph (B) shall be reserved for making 
                grants under section 202(d).
                  (E) Reservation for direct grants.--10 
                percent of the amount appropriated for a fiscal 
                year under subparagraph (A) and remaining after 
                amounts are reserved under subparagraph (B) 
                shall be reserved for making grants under 
                section 202(e).
                  (F) Reservation for arts education and 
                underserved communities grants.--10 percent of 
                the amount appropriated for a fiscal year under 
                subparagraph (A) and remaining after amounts 
                are reserved under subparagraph (B) shall be 
                reserved for making grants under section 
                202(f).
          (2) Sums remaining available.--Sums appropriated 
        pursuant to paragraph (1) for any fiscal year shall 
        remain available for obligation until expended.
    (b) National Endowment for the Humanities.--
          (1) In general.--
                  (A) Total authorization.--There are 
                authorized to be appropriated to carry out the 
                activities of the National Endowment for the 
                Humanities under this Act $160,117,000 for 
                fiscal year 1996, $152,111,000 for fiscal year 
                1997, $144,505,000 for fiscal year 1998, 
                $137,260,000 for fiscal year 1999, and 
                $130,397,000 for fiscal year 2000.
                  (B) General reservations.--There shall be 
                reserved amounts sufficient to carry out 
                subsection (c)(2).
                  (C) Reservation for partnership grants.--30 
                percent of the amount appropriated for a fiscal 
                year under subparagraph (A) and remaining after 
                amounts are reserved under subparagraph (B) 
                shall be reserved for making grants under 
                section 302(c). Of the amount reserved under 
                this subparagraph, 5 percent of such amount 
                shall be available for activities relating to 
                elementary and secondary education in the 
                humanities.
                  (D) Reservation for national grants.--35 
                percent of the amount appropriated for a fiscal 
                year under subparagraph (A) and remaining after 
                amounts are reserved under subparagraph (B) 
                shall be reserved for making grants under 
                section 302(d).
                  (E) Reservation for research and scholarship 
                grants.--35 percent of the amount appropriated 
                for a fiscal year under subparagraph (A) and 
                remaining after amounts are reserved under 
                subparagraph (B) shall be reserved for making 
                grants under section 302(e).
          (2) Sums remaining available.--Sums appropriated 
        pursuant to paragraph (1) for any fiscal year shall 
        remain available for obligation until expended.
    (c) Administration.--
          (1) National endowment for the arts.--
                  (A) In general.--Not more than 12 percent of 
                the amount appropriated for a fiscal year under 
                subsection (a)(1)(A) may be made available for 
                the costs of administering title II, or any 
                other program for which the Chairperson of the 
                National Endowment for the Arts is responsible, 
                of which--
                          (i) not more than $100,000 shall be 
                        made available for the President's 
                        Committee on the Arts and the 
                        Humanities, none of which may be used 
                        to reimburse members of the Committee 
                        for travel and related expenses; and
                          (ii) not to exceed $100,000 shall be 
                        made available for fiscal year 1996 
                        from amounts received under section 
                        207(a)(2) for official reception and 
                        representation expenses and not to 
                        exceed $50,000 shall be made available 
                        for each subsequent fiscal year from 
                        such amounts for such expenses.
                  (B) Reductions.--In addition to the amount 
                reserved in subparagraph (A), not more than 3 
                percent of the amount appropriated for a fiscal 
                year under subsection (a)(1)(A) may be made 
                available solely for the costs of carrying out 
                the payment of--
                          (i) employee severance pay under 
                        section 5595 of title 5, United States 
                        Code, or employee severance pay under 
                        any other provision of law; and
                          (ii) employee buy out programs as 
                        authorized by law.
          (2) National endowment for the humanities.--Not more 
        than 12 percent of the amount appropriated for a fiscal 
        year under subsection (b)(1)(A) may be made available 
        for the costs of administering title III, or any other 
        program for which the Chairperson of the National 
        Endowment for the Humanities is responsible, of which--
                  (A) not more than $100,000 shall be made 
                available for the President's Committee on the 
                Arts and the Humanities, none of which may be 
                used to reimburse members of the Committee for 
                travel and related expenses; and
                  (B) not to exceed $100,000 shall be made 
                available for fiscal year 1996 from amounts 
                received under section 307(a)(2) for official 
                reception and representation expenses and not 
                to exceed $50,000 shall be made available for 
                each subsequent fiscal year from such amounts 
                for such expenses, except that this paragraph 
                shall not apply to expenses associated with the 
                award established under section 310(1).

               TITLE II--NATIONAL ENDOWMENT FOR THE ARTS

SEC. 201. DEFINITIONS.

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

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

    (a) Establishment.--There is established within the 
Foundation a National Endowment for the Arts (referred to in 
this title as the ``Endowment'').
    (b) Chairperson.--
          (1) Appointment.--The Endowment shall be headed by a 
        chairperson, to be known as the Chairperson of the 
        Endowment (referred to in this title as the 
        ``Chairperson''), who shall be appointed by the 
        President, by and with the advice and consent of the 
        Senate.
          (2) Term.--
                  (A) In general.--The term of office of the 
                Chairperson shall be 4 years, except that any 
                Chairperson appointed to fill a vacancy shall 
                serve for the remainder of the term for which 
                the predecessor of the Chairperson was 
                appointed. Notwithstanding any other provision 
                of this subparagraph, on the expiration of the 
                term of office of the Chairperson, the 
                Chairperson shall serve until the successor to 
                the Chairperson is appointed and has qualified.
                  (B) Reappointment.--The Chairperson shall be 
                eligible for reappointment.
    (c) Partnership Grants.--
          (1) Purposes.--The purpose of this subsection is to 
        make grants to States and local and regional groups to 
        establish local arts activities, with preference to 
        arts education and projects that reach rural and urban 
        underserved communities.
          (2) Grants to states.--
                  (A) Authority.--Using funds reserved under 
                section 105(a)(1)(C), the Chairperson, acting 
                on the recommendation of the National Council 
                on the Arts, shall establish and carry out a 
                program of basic State grants to assist 
                States--
                          (i)(I) in supporting projects, 
                        productions, or workshops that meet the 
                        standard of artistic excellence and 
                        artistic merit and that fulfill the 
                        purposes of this Act; and
                          (II) in developing projects, 
                        productions, or workshops that will 
                        furnish programs, facilities, and 
                        services in the arts to people and 
                        communities in each of the States; and
                          (ii) in carrying out activities 
                        that--
                                  (I) stimulate artistic 
                                activity and awareness, and 
                                broaden public access to the 
                                arts, in rural and urban 
                                underserved communities;
                                  (II) enhance the artistic 
                                capabilities of developing arts 
                                organizations through artistic, 
                                programmatic, and staff 
                                development; or
                                  (III) provide technical 
                                assistance to developing arts 
                                organizations to improve 
                                managerial and organizational 
                                skills, financial systems 
                                management, and long-range 
                                fiscal planning.
                  (B) Application.--In order to receive a grant 
                under this paragraph for any fiscal year, a 
                State shall submit an application described in 
                section 203 for such grant at such time and in 
                such manner as shall be specified by the 
                Chairperson and accompany such application with 
                a State plan that the Chairperson finds--
                          (i) designates or provides for the 
                        establishment of a State agency 
                        (referred to in this section as the 
                        `State agency') as the sole agency for 
                        the administration of the State plan;
                          (ii) provides that funds paid to the 
                        State under this paragraph will be 
                        expended solely on projects, 
                        productions, or workshops described in 
                        subparagraph (A) and approved by the 
                        State agency;
                          (iii) provides that the State agency 
                        will make such reports, in such manner 
                        and containing such information, as the 
                        Chairperson may from time to time 
                        require, including a description of the 
                        progress made toward achieving the 
                        objectives of the State plan;
                          (iv) provides--
                                  (I) an assurance that the 
                                State agency has held, after 
                                reasonable notice, public 
                                meetings in the State to allow 
                                groups of artists, interested 
                                groups, and the public to 
                                present views and make 
                                recommendations regarding the 
                                State plan; and
                                  (II) a summary of such 
                                recommendations and the 
                                response of the State agency to 
                                such recommendations; and
                          (v) contains--
                                  (I) for the most recent 
                                preceding year for which 
                                information is available, a 
                                description of the level of 
                                participation by artists, 
                                artists' organizations, and 
                                arts groups in projects, 
                                productions, or workshops 
                                supported by funding from the 
                                State agency under this 
                                paragraph, and a description of 
                                the extent to which projects, 
                                productions, or workshops 
                                supported by funding from the 
                                State agency under this 
                                paragraph were available to all 
                                people and communities in the 
                                State, especially underserved 
                                communities; and
                                  (II) a description of 
                                projects, productions, or 
                                workshops supported by funding 
                                from the State agency under 
                                this paragraph that exist or 
                                are being developed to secure 
                                wider participation of artists, 
                                artists' organizations, and 
                                arts organizations described in 
                                subclause (I) or that address 
                                the availability of the arts to 
                                all people or communities 
                                described in subclause (I).
                  (C) Approval.--The Chairperson may not 
                approve an application described in 
                subparagraph (B) unless the accompanying State 
                plan satisfies the requirements specified in 
                subparagraph (B).
                  (D) Allotments.--
                          (i) In general.--Of the sums 
                        available to carry out this paragraph 
                        for any fiscal year, each State that 
                        has an application approved by the 
                        Chairperson shall be allotted at least 
                        $200,000.
                          (ii) Insufficient funds.--If the sums 
                        available to carry out this paragraph 
                        for any fiscal year are insufficient to 
                        make the allotments under clause (i) in 
                        full, such sums shall be allotted so 
                        that each such State receives an equal 
                        amount.
                          (iii) Excess funds.--In any case in 
                        which the sums available to carry out 
                        this paragraph for any fiscal year are 
                        in excess of the amount required to 
                        make the allotments under clause (i)--
                                  (I) the amount of such excess 
                                that is not greater than 25 
                                percent of the sums available 
                                to carry out this paragraph for 
                                such fiscal year shall be 
                                available to the Chairperson 
                                for making grants under this 
                                paragraph to States and, in 
                                accordance with subparagraph 
                                (H), regional groups; and
                                  (II) the amount of such 
                                excess for such fiscal year, if 
                                any, that remains after 
                                reserving in full for the 
                                Chairperson the amount required 
                                under subclause (I) shall be 
                                allotted so that each State 
                                that has an application 
                                approved by the Chair receives 
                                an equal amount; but in no 
                                event shall any State be 
                                allotted less than $200,000 
                                under this paragraph.
                  (E) Federal share.--
                          (i) In general.--Funding provided 
                        through a grant made under this 
                        paragraph to a State for any fiscal 
                        year shall be available to each State 
                        that has an application approved by the 
                        Chairperson, and has the State plan 
                        accompanying the application in effect 
                        on the first day of such fiscal year, 
                        to pay not more than 50 percent of the 
                        total cost of carrying out any activity 
                        described in subparagraph (A).
                          (ii) Excess portion.--Except as 
                        provided in clause (iii), the portion 
                        of the funding provided through any 
                        grant made under subparagraph (D)(i) to 
                        a State for any fiscal year that 
                        exceeds $125,000 shall be available, at 
                        the discretion of the Chairperson, to 
                        pay not more than 100 percent of such 
                        cost of carrying out an activity under 
                        this paragraph if such activity would 
                        be unavailable to the residents of the 
                        State without such portion.
                          (iii) Percentage of grant funds.--The 
                        portion of the funding described in 
                        clause (ii) for any fiscal year that is 
                        available to pay not more than 100 
                        percent of such cost, as described in 
                        clause (ii), shall not exceed 20 
                        percent of the total funding provided 
                        through such grant for such fiscal 
                        year.
                  (F) Prohibition on supplanting non-federal 
                funds.--Funds made available under this 
                paragraph shall be used to supplement, and 
                shall not supplant, non-Federal funds expended 
                for supporting activities described in 
                subparagraph (A).
                  (G) Unobligated funds.--Any amount allotted 
                to a State under subparagraph (D)(i) for any 
                fiscal year that is not obligated by the State 
                earlier than 60 days prior to the end of the 
                fiscal year for which the amount is 
                appropriated shall be available for making 
                grants to regional groups.
                  (H) Special rule.--The provisions of this 
                paragraph (other than subparagraph (D)) shall 
                apply to regional groups receiving grants under 
                this paragraph in such manner, and to such 
                extent, as the Chairperson shall by regulation 
                prescribe.
                  (I) Defintion.--As used in subparagraph 
                (D)(iii)(II) and notwithstanding section 3(8), 
                the term ``State'' includes, in addition to the 
                several States of the United States, only the 
                jurisdictions specified in such section that 
                have a population of 200,000 or more, according 
                to the latest decennial census.
    (d) National Significance Grants.--
          (1) Purpose.--The purpose of this subsection is to 
        make grants to groups, including regional groups, of 
        demonstrated and substantial artistic and cultural 
        importance, for projects, productions, and workshops 
        that will increase the access of all the people of the 
        United States, especially underserved communities, to 
        the best of the arts and culture of the United States.
          (2) In general.--Using funds reserved under section 
        105(a)(1)(D), the Chairperson, acting on the 
        recommendation of the National Council on the Arts, may 
        establish and carry out a program of grants to groups 
        who meet the standard of artistic excellence and 
        artistic merit and who are engaged in or concerned with 
        the arts, for the purpose of paying for the Federal 
        share of the cost of--
                  (A) enabling the groups to provide or support 
                projects, productions, or workshops described 
                in paragraph (3) that will have a national, 
                regional, or otherwise substantial artistic or 
                cultural impact; or
                  (B) providing administrative and management 
                improvements for the groups, particularly in 
                the field of long-range financial planning, 
                including increasing levels of community 
                support and the range of contributors to the 
                programs of such groups.
          (3) Projects, productions, and workshops.--
                  (A) Required elements.--Each such project, 
                production, or workshop shall--
                          (i) have substantial national or 
                        regional cultural significance, and 
                        encourage professional excellence; or
                          (ii)(I) have significant merit; and
                          (II) be a project, production, or 
                        workshop that, if such a group did not 
                        receive a grant, might otherwise be 
                        unavailable to citizens for geographic 
                        or economic reasons.
                  (B) Permissible elements.--Each such project, 
                production, or workshop may--
                          (i) encourage access to, education 
                        in, and knowledge, understanding, 
                        enjoyment, and appreciation of, the 
                        arts of the public;
                          (ii) enhance managerial and 
                        organizational skills and capabilities;
                          (iii) use technology to broaden 
                        public access to the arts;
                          (iv) expand access to the arts for 
                        individuals with disabilities; or
                          (v) promote access to the arts for 
                        minority or underserved populations.
          (4) Federal share requirement.--
                  (A) In general.--Except as provided in 
                subparagraphs (B) and (C), in the case of any 
                grant made under this subsection, the Federal 
                share described in paragraph (2) shall be 25 
                percent.
                  (B) Certain groups.--In the case of any grant 
                made under this subsection to a group with an 
                annual budget in excess of $3,000,000, the 
                Federal share described in paragraph (2) shall 
                be 16.67 percent.
                  (C) Adjustments.--The Chairperson may 
                increase the Federal share applicable under 
                this subsection for a designated grant 
                recipient, with review by the National Council 
                on the Arts. The Chairperson shall not increase 
                the Federal share above 50 percent for the 
                recipient. Not more than 10 percent of the 
                funds made available by the Endowment for 
                grants under this subsection for any fiscal 
                year may be available for grants for the fiscal 
                year for which the chairperson increases the 
                applicable Federal share.
          (5) Priority.--In awarding grants under this 
        subsection, the Chairperson shall give priority to 
        projects, productions, and workshops that increase the 
        access of the public of the United States, especially 
        underserved communities, to culture and the arts, 
        including access by touring, by regional or national 
        dissemination, or by geographic dispersion.
    (e) Direct Grants.--
          (1) Purpose.--The purpose of this subsection is to 
        make grants to groups, and individuals, that are 
        broadly representative of the cultural heritage of the 
        United States and broadly geographically 
        representative, for projects, productions, and 
        workshops of the highest artistic excellence and 
        artistic merit.
          (2) In general.--Using funds reserved under section 
        105(a)(1)(E), the Chairperson, acting on the 
        recommendation of the National Council on the Arts, may 
        establish and carry out a program of grants to groups, 
        or individuals who meet the standard of artistic 
        excellence and artistic merit and who are engaged in or 
        concerned with the arts, to pay for the Federal share 
        of the cost of projects, productions, or workshops that 
        meet the standard of artistic excellence and artistic 
        merit and that fulfill the purposes of this Act.
          (3) Federal share requirement.--The Federal share 
        described in paragraph (2) shall be 50 percent.
          (4) Priority.--In awarding grants under this 
        subsection, the Chairperson shall give priority to 
        projects, productions, and workshops that will be 
        disseminated widely after completion.
          (5) Adjustments.--The Chairperson may increase the 
        Federal share applicable under this subsection for a 
        designated grant recipient, with review by the National 
        Council on the Arts. Not more than 20 percent of the 
        funds made available by the Endowment for grants under 
        this subsection for any fiscal year may be available 
        for grants for the fiscal year for which the 
        Chairperson increases the applicable Federal share.
          (6) Special rule for grants to individuals.--The 
        Chairperson shall only award a grant in accordance with 
        this section to an individual described in paragraph 
        (2) if such grant is awarded to such individual for a 
        literature fellowship.
    (f) Arts Education and Underserved Communities Grants.--
          (1) In general--Using the funds reserved under 
        section 105(d)(1)(F), the Chairperson acting on the 
        recommendation of the National Council on the Arts, may 
        establish and carry out a program of grants to State 
        arts agencies, or other local or regional group, to pay 
        for the Federal share of the cost of carrying out 
        activities that--
                  (A) promote and improve the availability of 
                arts instruction, and improve the quality of 
                arts education, through support of lifelong 
                learning in the arts;
                  (B) enhance the quality of arts instruction 
                in programs of teacher education;
                  (C) develop arts faculty resources and 
                talents;
                  (D) support and encourage the development of 
                improved curriculum materials in the arts;
                  (E) support apprenticeships internships, and 
                other career oriented work-study experiences 
                for artists and arts teachers, and encourage 
                residencies of artists at all educational 
                levels;
                  (F) stimulate artistic activity and 
                awareness, and broaden public access to the 
                arts, in underserved communities;
                  (G) enhance the artistic capabilities of 
                developing arts organizations in underserved 
                communities through artistic, programmatic, and 
                staff development; or
                  (H) provide technical assistance to 
                developing arts organizations in underserved 
                communities to improve managerial and 
                organizational skills, financial systems 
                management, and long-range fiscal planning.
          (2) Application.--In order to receive a grant under 
        this paragraph for any fiscal year, a State arts 
        agency, or regional or local group shall submit an 
        application described in section 203 for such grant at 
        such time, in such manner, and accompanied by such 
        information, as shall be specified by the Chairperson.
          (3) Federal share.--The Federal share described in 
        paragraph (1) shall be 50 percent.

SEC. 203. APPLICATION PROCEDURES.

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

SEC. 204. ADVISORY PANELS.

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

SEC. 205. NATIONAL COUNCIL ON THE ARTS.

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

SEC. 206. LIMITATIONS ON GRANTS.

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

SEC. 207. ADMINISTRATIVE PROVISIONS.

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

SEC. 208. REPORTS.

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

SEC. 209. SANCTIONS AND PAYMENTS.

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

SEC. 210. AWARDS.

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

            TITLE III--NATIONAL ENDOWMENT FOR THE HUMANITIES

SEC. 301. DEFINITIONS.

    As used in this title:
          (1) Project.--
                  (A) In general.--The term ``project'' means 
                an activity organized to carry out the 
                objectives of this title.
                  (B) Renovation or construction.--Such term 
                also includes--
                          (i) the renovation of a facility if--
                                  (I) the amount of the 
                                expenditure of Federal funds 
                                for such purpose in the case of 
                                any facility does not exceed 
                                $25,000; and
                                  (II) two-thirds of the 
                                members of the National Council 
                                on the Humanities (who are 
                                present and voting) recommend a 
                                grant involving an expenditure 
                                for such purpose; and
                          (ii) for purposes of section 302(d), 
                        the construction of a facility if--
                                  (I) such construction is for 
                                demonstration purposes or under 
                                unusual circumstances in which 
                                there is no other manner by 
                                which to accomplish a 
                                humanistic purpose; and
                                  (II) two-thirds of the 
                                members of the National Council 
                                on the Humanities (who are 
                                present and voting) approve of 
                                a grant involving an 
                                expenditure for such purpose.
          (2) Workshop.--The term ``workshop'' means an 
        activity the primary purpose of which is to promote 
        scholarship and teaching among the participants.

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

    (a) Establishment.--There is established within the 
Foundation a National Endowment for the Humanities (referred to 
in this title as the ``Endowment'').
    (b) Chairperson.--
          (1) Appointment.--The Endowment shall be headed by a 
        chairperson, to be known as the Chairperson of the 
        Endowment (referred to in this title as the 
        ``Chairperson''), who shall be appointed by the 
        President, by and with the advice and consent of the 
        Senate.
          (2) Term.--
                  (A) In general.--The term of office of the 
                Chairperson shall be 4 years, except that any 
                Chairperson appointed to fill a vacancy shall 
                serve for the remainder of the term for which 
                the predecessor of the Chairperson was 
                appointed. Notwithstanding any other provision 
                of this subparagraph, on the expiration of the 
                term of office of the Chairperson, the 
                Chairperson shall serve until the successor to 
                the Chairperson is appointed and has qualified.
                  (B) Reappointment.--The Chairperson shall be 
                eligible for reappointment.
      (c) Partnership Grants.--
          (1) Purpose.--The purpose of this subsection is to 
        support programs of humanities councils at the State 
        and local levels.
          (2) Definition.--
                  (A) In general.--Except as provided in 
                subparagraph (B), as used in this subsection, 
                the term ``State entity'' means--
                          (i) a State that obtains approval of 
                        an application submitted under 
                        paragraph (4); or
                          (ii) in a case in which a State fails 
                        to submit an application under 
                        paragraph (4), an appropriate entity 
                        that obtains approval of an application 
                        submitted under paragraph (5).
                  (B) Jurisdiction.--
                          (i) State entity.--As used in 
                        paragraph (6)(C)(ii), the term ``State 
                        entity'' means a State entity, as 
                        defined in subparagraph (A), for a 
                        State.
                          (ii) State.--As used in clause (i), 
                        and notwithstanding section 3(8), the 
                        term ``State'', includes, in addition 
                        to the several States of the United 
                        States, only the jurisdictions 
                        specified in such section that have a 
                        population of 200,000 or more, 
                        according to the latest decennial 
                        census.
          (3) General authority.--Using funds reserved under 
        section 105(b)(1)(C), the Chairperson, acting on the 
        recommendation of the National Council on the 
        Humanities, is authorized, in accordance with the 
        provisions of this subsection, to establish and carry 
        out a program of grants to assist State entities--
                  (A) in paying for not more than 50 percent of 
                the cost (except as otherwise provided in this 
                subsection) of supporting activities that 
                achieve the objectives described in 
                subparagraphs (A) through (F) of subsection 
                (d)(2) and in subparagraphs (A) and (B) of 
                subsection (e)(2); or
                  (B) in matching contributions from non-
                Federal sources made to a trust fund the 
                purpose of which is to provide long-term 
                financial support for such activities.
          (4) Grants through state agencies.--
                  (A) Designation.--In order to receive a grant 
                under this subsection for any fiscal year, if a 
                State desires to designate or to provide for 
                the establishment of a State agency (referred 
                to in this section as a `State agency') as the 
                sole agency for the administration of the State 
                plan referred to in subparagraph (B) relating 
                to the grant, such State shall designate as the 
                State agency the humanities council or shall 
                provide for the establishment of such a 
                council.
                  (B) Application and state plan.--In any State 
                that designates or provides for the 
                establishment of a State agency as described in 
                subparagraph (A), the chief executive officer 
                of the State shall submit, before the beginning 
                of each fiscal year, an application for a grant 
                and accompany such application with a State 
                plan that the Chairperson finds--
                          (i) designates or provides for the 
                        establishment of a State agency;
                          (ii) provides that the chief 
                        executive officer of the State will 
                        appoint new members to the State 
                        humanities council designated or 
                        established under subparagraph (A), as 
                        vacancies occur as a result of the 
                        expiration of the terms of members of 
                        such council, until the chief executive 
                        officer has appointed all of the 
                        members of such council;
                          (iii) provides for the expenditure, 
                        from State funds, of an amount equal to 
                        50 percent of the portion of the 
                        funding received by such State through 
                        a grant made under paragraph (6)(A) 
                        (relating to the minimum State 
                        allotment), or 25 percent of the total 
                        amount of funding received by such 
                        State through grants made under this 
                        subsection, whichever is greater, for 
                        the fiscal year involved (except as 
                        otherwise provided in paragraph (7));
                          (iv) provides that funds paid to the 
                        State under this subsection will be 
                        expended solely on activities, approved 
                        by the State agency, that--
                                  (I) achieve the objectives 
                                described in subparagraphs (A) 
                                through (F) of subsection 
                                (d)(2) and subparagraphs (A) 
                                and (B) of subsection (e)(2); 
                                and
                                  (II) are designed to bring 
                                the humanities to the public;
                          (v) provides assurances that State 
                        funds will be made available for the 
                        purpose of meeting the requirements of 
                        this subparagraph:
                          (vi) provides that the State agency 
                        will make such reports, in such manner 
                        and containing such information, as the 
                        Chairperson may from time to time 
                        require, including a description of the 
                        progress made toward achieving the 
                        objectives of the State plan;
                          (vii) provides--
                                  (I) an assurance that the 
                                State agency has held, after 
                                reasonable notice, public 
                                meetings in the State to allow 
                                scholars, interested 
                                organizations, and the public 
                                to present views and make 
                                recommendations regarding the 
                                State plan; and
                                  (II) a summary of such 
                                recommendations and of the 
                                response of the State agency to 
                                such recommendations; and
                          (viii) contains--
                                  (I) for the most recent 
                                preceding year for which 
                                information is available, a 
                                description of the level of 
                                participation by scholars and 
                                scholarly organizations in 
                                activities supported by funding 
                                from the State agency under 
                                this subsection and a 
                                description of the extent to 
                                which the activities supported 
                                by funding from the State 
                                agency under this subsection 
                                were available to all people 
                                and communities in the State; 
                                and
                                  (II) a description of 
                                activities supported by funding 
                                from the State agency under 
                                this subsection that exist or 
                                are being developed to secure 
                                wider participation of scholars 
                                and scholarly organizations 
                                described in subclause (I) or 
                                that address the availability 
                                of the humanities to all people 
                                or communities described in 
                                subclause (I).
                  (C) Approval.--The Chairperson may not 
                approve an application described in 
                subparagraph (B) unless the accompanying State 
                plan satisfies the requirements specified in 
                subparagraph (B).
          (5) Grants to appropriate entities.--
                  (A) Designation.--In any State in which the 
                chief executive officer of the State fails to 
                submit an application under paragraph (4)(B) 
                for a fiscal year, the Chairperson may make 
                grants under paragraph (3) to an appropriate 
                entity in the State, and each such entity shall 
                establish a procedure that ensures that 8 
                members of the governing body of such entity 
                shall be appointed by an appropriate officer or 
                agency of such State, except that in no event 
                may the number of such members exceed 113 of 
                the total membership of such governing body. 
                The officer or agency shall select the members 
                from among individuals who have knowledge of or 
                experience in the humanities.
                  (B) Application and plan.--If a State fails 
                to submit an application under paragraph (4)(B) 
                for a fiscal year, any appropriate entity in 
                the State desiring to receive a grant under 
                this subsection for the fiscal year shall 
                submit an application for such grant at such 
                time and in such manner as shall be specified 
                by the Chairperson, and accompany such 
                application with a State plan that the 
                Chairperson finds--
                          (i) provides assurances that such 
                        entity will comply with the 
                        requirements of subparagraph (A);
                          (ii) provides that funds paid to such 
                        entity under this paragraph will be 
                        expended solely on activities that--
                                  (I) achieve the objectives 
                                described in subparagraphs (A) 
                                through (F) of subsection 
                                (d)(2) and subparagraphs (A) 
                                and (B) of subsection (e)(2); 
                                and
                                  (II) are designed to bring 
                                the humanities to the public;
                          (iii) establishes a membership policy 
                        that is designed to ensure broad public 
                        representation with respect to 
                        activities administered by such entity;
                          (iv) provides for a nomination 
                        process that ensures opportunities for 
                        nomination to membership in the 
                        governing body from various groups in 
                        such State and from a variety of 
                        segments of the population of such 
                        State, including individuals who by 
                        reason of their achievement, 
                        scholarship, or creativity in the 
                        humanities, are especially qualified to 
                        serve as members of the body;
                          (v) provides for a membership 
                        rotation process that ensures the 
                        regular rotation of the membership and 
                        officers of such entity;
                          (vi) establishes reporting procedures 
                        that are designed to inform the chief 
                        executive officer of such State, and 
                        other appropriate officers and 
                        agencies, of the activities of such 
                        entity;
                          (vii) establishes procedures to 
                        ensure public access to information 
                        relating to such activities;
                          (viii) provides that such entity will 
                        make such reports, at such times, in 
                        such manner, and containing such 
                        information, as the Chairperson may 
                        require, including a description of the 
                        progress made toward achieving the 
                        objectives of the State plan;
                          (ix) provides--
                                  (I) an assurance that the 
                                entity has held, after 
                                reasonable, public meetings in 
                                the State to allow scholars, 
                                interested organizations, and 
                                the public to present views and 
                                make recommendations regarding 
                                the State plan; and
                                  (II) a summary of such 
                                recommendations and of the 
                                response of the entity to such 
                                recommendations; and
                          (x) contains--
                                  (I) for the most recent 
                                preceding year for which 
                                information is available, a 
                                description of the level of 
                                participation by scholars and 
                                scholarly organizations in 
                                activities supported by funding 
                                from the entity under this 
                                subsection, and a description 
                                of the extent to which 
                                activities supported by funding 
                                from the entity under this 
                                subsection were available to 
                                all people and communities in 
                                the State; and
                                  (II) a description of 
                                activities supported by funding 
                                from the entity under this 
                                subsection that exist or are 
                                being developed to secure wider 
                                participation of scholars and 
                                scholarly organizations 
                                described in subclause (I) or 
                                that address the availability 
                                of the humanities to all people 
                                or communities described in 
                                subclause (I).
                  (C) Approval.--The Chairperson may not 
                approve an application described in 
                subparagraph (B) unless the accompanying plan 
                satisfies the requirements specified in 
                subparagraph (B).
          (6) Allotments.--
                  (A) In general.--Of the sums available to 
                carry out this subsection for any fiscal year, 
                each State entity shall be allotted at least 
                $200,000.
                  (B) Insufficient sums.--If the sums available 
                to carry out this subsection for any fiscal 
                year are insufficient to make the allotments 
                under subparagraph (A) in full, such sums shall 
                be allotted so that each State entity receives 
                an equal amount.
                  (C) Excess funds.--In any case in which the 
                sums available to carry out this subsection for 
                any fiscal year are in excess of the amount 
                required to make the allotments under 
                subparagraph (A)--
                          (i) 34 percent of the amount of such 
                        excess for such fiscal year shall be 
                        available to the Chairperson for making 
                        grants under this subsection to State 
                        entities;
                          (ii) 44 percent of the amount of such 
                        excess for such fiscal year shall be 
                        allotted so that each State entity 
                        receives an equal amount; and
                          (iii) the remainder of the amount of 
                        such excess for such fiscal year shall 
                        be allotted so that each State entity 
                        receives an amount that bears the same 
                        ratio to such remainder as the 
                        population of the State for which the 
                        application is approved bears to the 
                        population of all the States.
          (7) Limitations.--
                  (A) Federal share.--
                          (i) In general.--Funding provided 
                        through a grant made under this 
                        subsection to a State entity for any 
                        fiscal year shall be available to each 
                        State entity that has an application 
                        approved by the Chairperson, and has 
                        the State plan accompanying the 
                        application in effect on the first day 
                        of such fiscal year, to pay not more 
                        than 50 percent of the total cost of 
                        carrying out any activity described in 
                        paragraph (3).
                          (ii) Excess portion.--Except as 
                        provided in clause (iii), the portion 
                        of the funding provided through any 
                        grant made under paragraph (6)(A) to a 
                        State entity for any fiscal year that 
                        exceeds $125,000 shall be available, at 
                        the discretion of the Chairperson, to 
                        pay not more than 100 percent of such 
                        cost of carrying out an activity under 
                        this subsection if such activity would 
                        be unavailable to the residents of the 
                        State without such portion.
                          (iii) Percentage of grant funds.--The 
                        portion of the funding described in 
                        clause (ii) of any fiscal year that is 
                        available to pay not more than 100 
                        percent of such cost, as described in 
                        clause (ii), shall not exceed 20 
                        percent of the total of the funding 
                        provided through such grant for such 
                        fiscal year.
                  (B) Prohibition on supplanting non-federal 
                funds.--Funds made available under this 
                subsection shall be used to supplement, and 
                shall not supplant, non-Federal funds expended 
                for supporting activities described in 
                paragraph (3).
          (8) Unobligated funds.--Any amount allotted to a 
        State entity under paragraph (6) for any fiscal year 
        that is not obligated by the State entity earlier than 
        60 days prior to the end of the fiscal year for which 
        the amount is appropriated shall be available for 
        making grants under subsection (d) and (e).
          (9) Limitation on multiple entities.--The Chairperson 
        may not make grants under this subsection to more than 
        1 entity in any State.
    (d) National Grants.--
          (1) Purpose.--The purpose of this subsection is to 
        provide support for grants to groups, individuals, and 
        State agencies or entities to carry out activities 
        relating to education and the public humanities that 
        have a national audience and are of national 
        significance, such as activities relating to 
        postsecondary education in the humanities, media 
        projects, projects in museums and by historical 
        organizations, projects in libraries and archives, 
        public humanities projects, endowment building, and 
        technology activities.
          (2) General authority.--Using funds reserved under 
        section 105(b)(1)(D), the Chairperson, acting on the 
        recommendation of the National Council on the 
        Humanities, may establish and carry out a program of 
        grants to groups, or in appropriate cases, individuals, 
        which or who meet the standard of excellence in the 
        humanities and significance in the humanities, or State 
        agencies or entities, to pay for the Federal share of 
        the cost of activities to--
                  (A) develop and encourage the pursuit of a 
                national policy to further the public good 
                through public funding of the humanities;
                  (B) initiate and support research and 
                programs to strengthen the research and 
                teaching potential of the United States in the 
                humanities;
                  (C) foster the exchange of information in the 
                humanities;
                  (D) foster education in, and public 
                understanding and appreciation of, the 
                humanities;
                  (E) support projects that foster or promote 
                literacy;
                  (F) ensure that the benefit of the programs 
                of the Endowment will also be available to the 
                citizens of the United States where such 
                programs would otherwise by unavailable due to 
                geographic or economic reasons;
                  (G) enable groups and institutions to 
                increase the levels of continuing support and 
                to increase the range of contributors to the 
                program of such organizations or institutions;
                  (H) provide administrative and management 
                improvements for groups and institutions, 
                particularly in the field of long-range 
                financial planning;
                  (I) enable groups and institutions to 
                increase audience participation in, and 
                appreciation of, programs sponsored by such 
                organizations and institutions;
                  (J) develop new sources of long-term support 
                for educational, scholarly, and public programs 
                in the humanities, including renovating or 
                constructing facilities, augmenting or 
                establishing endowment funds, and purchasing 
                capital equipment to ensure financial 
                stability;
                  (K) stimulate greater cooperation among 
                cultural organizations and institutions 
                especially designed to serve better the 
                communities in which such organizations or 
                institutions are located; and
                  (L) foster greater citizen involvement in 
                planning the cultural development of a 
                community.
          (3) Federal share requirement.--
                  (A) In general.--With respect to the total 
                cost of all activities funded under paragraph 
                (2), the Federal share shall be 50 percent.
                  (B) Special rule.--With respect to each of 
                the activities described in paragraph (2), the 
                Chairperson shall determine the portion of the 
                Federal share to be provided to a group or an 
                individual described in paragraph (2).
                  (C) Adjustment.--Notwithstanding subparagraph 
                (B), with respect to an activity described in 
                paragraph (2)(J), the portion of the Federal 
                share of the cost of such activity shall be 25 
                percent.
      (e) Research and Scholarship Grants.--
          (1) Purpose.--The purpose of this subsection is to 
        encourage the development and dissemination of 
        significant scholarship in the humanities by groups, 
        individuals, and State agencies or entities such as 
        fellowships for college and university faculty and 
        independent scholars, dissertation grants, summer 
        stipends, and funds for scholarly publications, 
        reference materials, basic research, institutional 
        programs, and preservation.
          (2) General authority.--Using funds reserved under 
        section 105(b)(1)(E), the Chairperson, acting on the 
        recommendation of the National Council on the 
        Humanities, may establish and carry out a program of 
        grants to groups, individuals, State agencies, and 
        State entities for the purpose of paying for the 
        Federal share of the cost of--
                  (A) initiating and supporting (including 
                supporting through fellowships) training, 
                workshops, programs, research, and 
                publications, in the humanities, that have 
                substantial scholarly and cultural significance 
                and that reach or reflect the cultural heritage 
                of the United States;
                  (B) fostering projects that provide access 
                to, and preserving materials important to 
                research, education, and public understanding 
                regarding, the humanities;
                  (C) enabling groups and institutions to 
                increase the levels of continuing support and 
                to increase the range of contributors to the 
                program of such group or institutions;
                  (D) providing administrative and management 
                improvements for cultural organizations and 
                institutions, particularly in the field of 
                long-range financial planning; and
                  (E) developing new sources of long-term 
                support for educational, scholarly, and public 
                programs in the humanities, including 
                renovating or constructing facilities, 
                augmenting or establishing endowment funds, and 
                purchasing capital equipment to ensure 
                financial stability.
          (3) Training; workshops; research.--A fellowship 
        awarded to an individual under paragraph (2)(A) may be 
        used for the purpose of supporting study or research at 
        an appropriate nonprofit institution selected by the 
        individual, for a stated period of time. The total 
        amount of any grant under paragraph (2)(A) to any group 
        engaging in workshop activities for which an admission 
        or other charge is made to the general public shall not 
        exceed 30 percent of the total cost of such activities.
          (4) Considerations.--In selecting a group or 
        individual as a recipient of a grant to be made under 
        this subsection, the Chairperson shall give particular 
        regard to scholars, and educational and cultural 
        institutions, that traditionally have been 
        underrepresented in the humanities.
          (5) Federal share.--
                  (A) In general.--With respect the total cost 
                of all activities funded under paragraph (2), 
                the Federal share shall be 50 percent.
                  (B) Special rule.--With respect to each of 
                the activities described in paragraph (2), the 
                Chairperson shall determine the portion of the 
                Federal share to be provided to a group or 
                individual described in paragraph (2).
                  (C) Adjustment.--Notwithstanding subparagraph 
                (B), with respect to an activity described in 
                paragraph (2)(E), the portion of the Federal 
                share of the cost of such activity shall be 25 
                percent.

SEC. 303. APPLICATION PROCEDURES.

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

SEC. 304. REVIEW PANELS.

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

SEC. 305. NATIONAL COUNCIL ON THE HUMANITIES.

    (a) Establishment.--There is established within the 
Endowment a National Council on the Humanities (referred to in 
this section as the ``Council'').
    (b) Composition.--
          (1) In general.--The Council shall be composed of the 
        Chairperson of the Endowment, who shall be the 
        Chairperson of the Council, and 20 other members 
        appointed by the President, by and with the advice and 
        consent of the Senate, who shall be selected--
                  (A) from among private citizens of the United 
                States who--
                          (i) are recognized for their broad 
                        knowledge of, or expertise in, the 
                        humanities; and
                          (ii) have established records of 
                        distinguished service, or achieved 
                        eminence, in the humanities;
                  (B) so as to include scholars and others who 
                are professionally engaged in the humanities; 
                and
                  (C) so as collectively to provide an 
                appropriate distribution of members among the 
                major humanities fields.
          (2) Qualifications.--The President may, in making 
        such appointments, give consideration to such 
        recommendations as may, from time to time, be submitted 
        to the President by leading national organizations in 
        the major humanities fields. In making such 
        appointments, the President shall give due regard to 
        equitable representation of women, racially and 
        ethnically diverse individuals, and individuals with 
        disabilities, who are involved in the humanities. 
        Members of the Council shall be appointed so as to 
        represent equitably geographical areas in the United 
        States.
    (c) Terms.--
          (1) In general.--
                  (A) Staggered terms.--Each member of the 
                Council shall serve for a term of 6 years, and 
                the terms shall be staggered.
                  (B) Expiration.--Except as provided in 
                paragraph (2), the terms of all Council members 
                shall expire on the third day of September in 
                the year of expiration.
                  (C) Reappointment after partial term.--Each 
                member who has served on the Council for 1 term 
                of less than 3 years shall be eligible for 
                reappointment for 1 term of 6 years.
                  (D) Vacancy appointments.--Any member 
                appointed to fill a vacancy shall serve for the 
                remainder of the term for which the predecessor 
                of the member was appointed.
                  (E) Holdover service.--Notwithstanding any 
                other provision of this subsection, a member of 
                the Council shall serve after the expiration of 
                the term of the member until the successor to 
                the member takes office.
          (2) Adjustment to reduce council.--
                  (A) Expiration of terms.--The terms of--
                          (i) 8 members of the Council whose 
                        terms would otherwise expire on January 
                        26, 1996; and
                          (ii) 1 member of the Council whose 
                        term expired on November 30, 1995; 
                        shall be deemed to expire on January 1, 
                        1996.
                  (B) Terms.--The President shall appoint 3 
                members of the Council to succeed members whose 
                terms are deemed to expire as described in 
                subparagraph (A). The terms of the successors 
                shall expire on September 3, 2002.
    (d) Compensation.--Members of the Council shall receive 
compensation at a rate to be fixed by the Chairperson but not 
to exceed the daily equivalent of the maximum rate authorized 
for a position above grade GS-15 of the General Schedule under 
section 5108 of title 5, United States Code, and be allowed 
travel expenses including per diem in lieu of subsistence, as 
authorized under section 5703 of title 5, United States Code, 
for persons employed intermittently in Federal Government 
service.
    (e) Meetings and Duties.--
          (1) Meetings.--The Council shall meet at the call of 
        the Chairperson but not less often than twice during 
        each calendar year. Eleven members of the Council shall 
        constitute a quorum.
          (2) Duties.--The Council shall--
                  (A) advise the Chairperson with respect to 
                policies, programs, and procedures for carrying 
                out the functions of the Chairperson under this 
                title; and
                  (B) review applications for grants authorized 
                under this title and make recommendations to 
                the Chairperson with respect to the approval of 
                each application.
    (f) Actions by Chairperson.--
          (1) In general.--The Chairperson shall not approve or 
        disapprove any application for a grant authorized under 
        this title until the Chairperson has received the 
        recommendation of the Council on such application, 
        unless the Council fails to make a recommendation on 
        the application within a reasonable time.
          (2) Delegations.--In the case of an application 
        submitted under this title and involving $35,000 or 
        less, the Chairperson may approve or disapprove such 
        application if such action is taken pursuant to the 
        terms of an express and direct delegation of authority 
        from the Council to the Chairperson, and if each such 
        action by the Chairperson is reviewed by the Council. 
        The terms of any such delegation of authority shall not 
        permit obligations for expenditure of funds under such 
        delegation for any fiscal year that exceed an amount 
        equal to 3 percent of the sums appropriated for the 
        fiscal year pursuant to section 105(b)(1).

SEC. 306. LIMITATIONS ON GRANTS.

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

SEC. 307. ADMINISTRATIVE PROVISIONS.

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

SEC. 308. REPORTS.

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

SEC. 309. SANCTIONS AND PAYMENTS.

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

SEC. 310. AWARDS.

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

                      TITLE 20, UNITED STATES CODE

                          MUSEUM SERVICES ACT

          * * * * * * *
    [Sec. 961. Declaration of Purpose.--
    [It is the purpose of this title to encourage and assist 
museums in their educational role, in conjunction with formal 
systems of elementary, secondary, and post-secondary education 
and with programs of nonformal education for all age groups; to 
assist museums in modernizing their methods and facilities so 
that they may be better able to conserve our cultural, 
historic, and scientific heritage; and to ease the financial 
burden borne by museums as a result of their increasing use by 
the public.
    [Sec. 962. Institute of Museum Services; Establishment.--
    [There is hereby established within the National Foundation 
on the Arts and the Humanities, an Institute of Museum 
Services. The Institute shall consist of a National Museum 
Services Board and a Director of the Institute.
    [Sec. 963. National Museum Services Board.--
    [(a) Appointment of Voting and Nonvoting Members.--
    [(1) The Board shall consist of fifteen members appointed 
by the President, by and with the advice and consent of the 
Senate. Such members shall be selected from among citizens of 
the United States who are members of the general public and who 
are--
          [(A) broadly representative of the various museums, 
        including museums relating to science, history, 
        technology, art, zoos, and botanical gardens, and of 
        the curatorial, conservation, educational, and cultural 
        resources of the United States; and
          [(B) recognized for their broad knowledge, expertise, 
        or experience in museums or commitment to museums.
Members shall be appointed to reflect various geographical 
regions of the United States. The Board may not include, at any 
time, more than three members from a single State. In making 
such appointments, the President shall give due regard to 
equitable representation of women, minorities, and persons with 
disabilities who are involved in such museums.
    [(2)(A) In addition to members appointed by the President 
under paragraph (1), the following persons shall serve as 
members of the Board--
          [(i) the Chairperson of the National Endowment for 
        the Arts;
          [(ii) the Chairperson of the National Endowment for 
        the Humanities;
          [(iii) the secretary of the Smithsonian Institution; 
        and
          [(iv) the Director of the National Science 
        Foundation.
    [(B) The members of the Board listed in clause (i) through 
clause (iv) of subparagraph (A) shall be nonvoting members.
    [(b) Term of Office; Vacancies; Reappointment.--The term of 
office of the appointed members of the Board shall be five 
years, except that--
          [(1) any such member appointed to fill a vacancy 
        shall serve only such portion of a term as shall not 
        have expired at the time of such appointment; and
          [(2) in the case of initial members, three shall 
        serve for terms of five years, three shall serve for 
        terms of four years, three shall serve for terms of 
        three years, three shall serve for terms of two years, 
        and three shall serve for terms of one year, as 
        designated by the President at the time of nomination 
        for appointment. Any appointed member who has been a 
        member of the Board for more than seven consecutive 
        years shall thereafter be ineligible for reappointment 
        to the Board during the three-year period following the 
        expiration of the last such consecutive year. 
        Notwithstanding any other provision of this subsection, 
        a member shall serve after the expiration of such 
        member's term of office until such member's successor 
        takes office.
    [(c) Designation of Chairperson; Quorum.--The Chairperson 
of the Board shall be designated by the President from among 
the appointed members of the Board. Except as provided in 
subsection (d)(2), eight appointed members of the Board shall 
constitute a quorum.
    [(d) Meetings of Board.--The Board shall meet at the call 
of the Chairperson, except that--
          [(1) it shall meet not less than three times each 
        year; and
          [(2) it shall meet whenever one-third of the 
        appointed members request a meeting in writing, in 
        which event seven of the appointed members shall 
        constitute a quorum.
    [(e) Compensation and Travel Expenses of Members.--Members 
of the Board who are not in the regular full-time employ of the 
United States shall receive, while engaged in the business of 
the Board, compensation for service at a rate to be fixed by 
the President, except that such rate shall not exceed the rate 
specified at the time of such service for grade GS-18 set forth 
in section 5332 of title 5, United States Code, including 
traveltime, and, while so serving away from their homes or 
regular places of business, they may be allowed travel 
expenses, including per diem in lieu of subsistence, as 
authorized by section 5703 of title 5, United States Code, for 
person employed in Government service.
    [(f) General Policies.--The Board shall have the 
responsibility for the general policies with respect to the 
powers, duties, and authorities vested in the Institute under 
this title. The Director shall make available to the Board such 
information and assistance as may be necessary to enable the 
Board to carry out its functions.
    [(g) Coordination With Activities of Federal Government.--
The Board shall, with the advice of the Director, take steps to 
assure that the policies and purposes of the Institute are 
coordinated with other activities of the Federal Government.
    [Sec. 964. Director of Institute.--
    [(a) Appointment and Compensation; Delegation of 
Functions.--
          [(1) The Director of the Institute shall be appointed 
        by the President, by and with the advice and consent of 
        the Senate, and shall serve at the pleasure of the 
        President. The Director shall perform such duties and 
        exercise such powers as the Board may prescribe.
          [(2) The Director shall not delegate any of the 
        Director's functions to any other officer who is not 
        directly responsible to the Director.
    [(b) Coordination With Federal Agencies and 
Organizations.--The Director shall advise the Board regarding 
policies of the Institute to assure coordination of the 
Institute's activities with other agencies and organizations of 
the Federal Government having interest in and responsibilities 
for the improvement of museums. Such Government agencies shall 
include the National Endowment for the Arts, the National 
Endowment for the Humanities, the National Science Foundation, 
appropriate units in the Department of Education, the Library 
of Congress, and the Smithsonian Institution and related 
organizations.
    [(c) Appointment and Compensation of Technical and 
Professional Employees.--The Director may appoint without 
regard to the provisions of tile 5, United States Code, 
governing appointment in the competitive service and may 
compensate without regard to the provisions of chapter 51 or 
subchapter III of chapter 53 of such title relating to 
classification and General Schedule pay rates not to exceed 
one-fifth of the number of full-time regular technical or 
professional employees of the Institute. The rate of basic 
compensation for such employees may not equal or exceed the 
rate prescribed for GS-16 of the General Schedule under Section 
5332 of title 5, United States Code.
    [Sec. 965. Grants to Museums to Increase and Improve 
Services.--
    [(a) Authorized Activities.--The Director, subject to the 
policy direction of the Board, is authorized to make grants to 
museums to increase and improve museum services, through such 
activities as--
          [(1) programs to enable museums to construct or 
        install displays, interpretations, and exhibitions in 
        order to improve their services to the public;
          [(2) assisting them in developing and maintaining 
        professionally-trained or other wise experienced staff 
        to meet their needs;
          [(3) assisting them to meet their administrative 
        costs in preserving and maintaining their collections, 
        exhibiting them to the public, and providing 
        educational programs to the public through the use of 
        their collections;
          [(4) assisting museums in cooperation with each other 
        in the development of traveling exhibitions, meeting 
        transportation costs, and identifying and locating 
        collections available for loan;
          [(5) assisting them in conservation of their 
        collections; and
          [(6) developing and carrying out specialized programs 
        for specific segments of the public, such as programs 
        for urban neighborhoods, rural areas, Indian 
        reservations, and penal and other State institutions.
    [(b) Contracts and Cooperative Agreements.--
          [(1) The Director, subject to the policy direction of 
        the National Museum Services Board, is authorized to 
        enter into contracts and cooperative agreements to 
        provide financial assistance in order to undertake 
        projects designed to strengthen museum services, except 
        that any contracts or cooperative agreements entered 
        into pursuant to this subsection shall be effective 
        only to such extent or in such amounts as are provided 
        in appropriations Acts.
          [(2) No financial assistance may be provided under 
        this subsection to pay for operational expenses.
          [(3) The aggregate amount of financial assistance 
        made under this subsection shall not exceed 5 percent 
        of the amount appropriated under this Act for such 
        fiscal year.
    [(c) Cost Limitation.--Grants, contracts, and cooperative 
agreements under this section for any fiscal year may not 
exceed 50 per centum of the cost of the program for which the 
grant or financial assistance is made, except that not more 
than 20 per centum of the funds available under this section 
for any fiscal year may be available for grants or financial 
assistance in such fiscal year without regard to such 
limitation.
    [(d) Review and Evaluation Procedures.--The Director shall 
establish procedures for reviewing and evaluating grants, 
contracts, and cooperative agreements made or entered into 
under this section. Procedures for reviewing grant applications 
or contracts and cooperative agreements for financial 
assistance under this section shall not be subject to any 
review outside of the Institute.
    [Sec. 966. Contributions.--
    [The Institute shall have authority to accept in the name 
of the United States, grants, gifts, or bequests of money for 
immediate disbursement in furtherance of the functions of the 
Institute. Such grants, gifts, or bequests, after acceptance by 
the Institute, shall be paid by the donor or his representative 
to the Treasurer of the United States whose receipt shall be 
their acquittance. The Treasurer of the United States shall 
enter them in a special account to the credit of the Institute 
for the purposes in each case specified.
    [Sec. 967. Authorization of Appropriations.--
    [(a) For the purpose of making grants under section 206(a), 
there are authorized to be appropriated $24,000,000 for fiscal 
year 1991 and such sums as may be necessary for fiscal years 
1992 and 1993.
    [(b) There are authorized to be appropriated such sums as 
may be necessary to administer the provisions of this title.
    [(c) Sums appropriated pursuant to subsection (a) for any 
fiscal year shall remain available for obligation and 
expenditure until expended.
    [(d) For the purpose of enabling the Institute to carry out 
its functions under this title, there is authorized to be 
appropriated for each fiscal year ending before October 1, 
1993, an amount equal to the amount contributed during such 
fiscal year to the Institute under section 207.
    [(e)(1) Subject to paragraph (2), there are authorized to 
be appropriated $1,000,000 for each of two fiscal years to 
carry out section 211.
    [(2) Paragraph (1) shall not be effective for any fiscal 
year for which the amount appropriated under subsection (a) is 
less than $24,000,000.
    [Sec. 968. Definitions.--
    [For the purpose of this title, the term--
          [(1) ``Board'' means the National Museum Services 
        Board established under section 203;
          [(2) ``Director'' means the Director of the Institute 
        established under section 203;
          [(3) ``Institute'' means the Institute of Museum 
        Services established under section 203; and
          [(4) ``museum'' means a public or private nonprofit 
        agency or institution organized on a permanent basis 
        for essentially educational or esthetic purposes, 
        which, utilizing a professional staff, owns or utilizes 
        tangible objects, cares for them, and exhibits them to 
        the public on a regular basis.
    [Sec. 969. Assessment of Needs of Small, Emerging, 
Minority, and Rural Museums.--
    [(a) The Director, subject to the policy direction of the 
Board and in consultation with appropriate representatives of 
the museum and cultural communities shall undertake an 
assessment of the needs of small, emerging, minority, and rural 
museums. The assessment, to be completed and presented to 
Congress with two years of enactment, shall include but not 
necessarily be limited to, the following subjects:
          [(1) The need for resources to identify, collect, 
        document, research, preserve and interpret tangible and 
        nontangible collections and to communicate with and 
        involve their own communities and the general public.
          [(2) The personnel staffing and training needs for 
        small, emerging, minority, and rural museums, including 
        needs for professional positions and for the community 
        persons employed or utilized by museums who are expert 
        in the history, culture, customs, and other human 
        resources of the communities.
          [(3) The building and construction needs, including 
        impediments to accessing Federal and non-Federal funds 
        for this purpose.
          [(4) The maintenance, operation and repair needs, 
        including impediments to accessing Federal and non-
        Federal funds for these purposes.
          [(5) The status of the museums' current collections 
        and the museums' interest in accessing, through gift, 
        purchase, repatriation or borrowing, objects now held 
        privately or in public collections.
    [(b) As used in this subsection--
          [(1) the term ``small, emerging, minority, and rural 
        museums'' includes tribal museums and museums of other 
        ethnic and cultural groups; and
          [(2) the term ``Indian tribe'' has the meaning given 
        in the Indian Self-Determination and Education 
        Assistance Act.]

               TITLE II--MUSEUM AND LIBRARY SERVICES ACT

                     Subtitle A--General Provisions

SEC. 201. SHORT TITLE.

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

SEC. 202. GENERAL DEFINITIONS.

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

SEC. 203. INSTITUTE OF MUSEUM AND LIBRARY SERVICES.

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

SEC. 204. DIRECTOR OF THE INSTITUTE.

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

SEC. 205. DEPUTY DIRECTORS.

    (a) Appointment.--The Office of Library Services shall be 
headed by a Deputy Director, who shall be appointed by the 
Director from among individuals who have a graduate degree in 
library science and expertise in library and information 
services. The Office of Museum Services shall be headed by a 
Deputy Director, who shall be appointed by the Director from 
among individuals who have expertise in museum services.
    (b) Compensation.--Each such position of Deputy Director 
shall be a Senior Executive Service position, which shall be 
paid at a rate of pay for a position at ES-1 of the Senior 
Executive Service schedule.

SEC. 206. PERSONNEL.

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

SEC. 207. CONTRIBUTIONS.

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

              Subtitle B--Library Services and Technology

SEC. 211. SHORT TITLE.

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

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

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

SEC. 213. DEFINITIONS.

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

SEC. 214. AUTHORIZATION OF APPROPRIATIONS.

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

                 CHAPTER 1--BASIC PROGRAM REQUIREMENTS

SEC. 221. RESERVATIONS AND ALLOTMENTS.

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

SEC. 222. ADMINISTRATION AND EVALUATION.

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

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

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

SEC. 224. STATE PLANS.

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

                      CHAPTER 2--LIBRARY PROGRAMS

          Subchapter A--Information Access Through Technology

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

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

SEC. 232. AUTHORIZED ACTIVITIES.

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

     Subchapter B--Information Empowerment Through Special Services

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

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

SEC. 242. AUTHORIZED ACTIVITIES.

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

SEC. 243. SERVICES FOR CHILDREN IN POVERTY.

    (a) State Level Reservation.--
          (1) In general.--Except as provided in subsection 
        (c), from the total amount that each State library 
        administrative agency receives under this subchapter 
        for a fiscal year, such agency shall reserve the amount 
        of funds determined under paragraph (2) to provide 
        assistance to public libraries in the State to enable 
        such libraries to enhance the provision of special 
        services to children described in such paragraph who 
        are served by such libraries.
          (2) Amount.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the amount of funds a State 
                library administrative agency shall reserve 
                under paragraph (1) shall be equal to the sum 
                of--
                          (i) $1.50 for every preschooler 
                        (birth through age 5) in the State from 
                        a family living below the income 
                        official poverty line (as defined by 
                        the Office of Management and Budget, 
                        and revised annually in accordance with 
                        section 673(2) of the Community 
                        Services Block Grant Act (42 U.S.C. 
                        9902(2)) applicable to a family of the 
                        size involved); and
                          (ii) $1.00 for every school-age child 
                        (ages 6 and 17) in the State from such 
                        a family.
                  (B) Maximum.--The maximum amount that a State 
                library administrative agency may reserve under 
                paragraph (1) for any fiscal year shall not 
                exceed 15 percent of the total amount such 
                agency receives under this subchapter for such 
                year.
    (b) Within State Distribution.--
          (1) In general.--Except as provided in paragraph (2), 
        each public library in a State shall receive under this 
        section for a fiscal year an amount that bears the same 
        relation to the amount the State library administrative 
        agency reserves under subsection (a) for such year as 
        the number of children described in subsection (a)(2) 
        served by such public library for the preceding fiscal 
        year bears to the number of such children served by all 
        public libraries in the State for such preceding fiscal 
        year.
          (2) Exception.--
                  (A) In general.--If a State library 
                administrative agency determines that the 
                amount available under paragraph (1) for a 
                fiscal year for 2 or more public libraries is 
                too small to be effective, then such agency may 
                aggregate such amounts for such year.
                  (B) Requirements.--Each State library 
                administrative agency aggregating amounts under 
                subparagraph (A) for a fiscal year--
                          (i) shall only aggregate the amount 
                        available under paragraph (1) for a 
                        public library for a fiscal year if the 
                        amount so available for such year is 
                        $3,000 of less; and
                          (ii) shall use such aggregated 
                        amounts to enhance the library services 
                        provided to the children described in 
                        subsection (a)(2) served by the public 
                        libraries for which such agency 
                        aggregated such amounts for such year.
    (c) Adjustments.--
          (1) Appropriations increase.--For any fiscal year for 
        which the amount appropriated to carry out this 
        subtitle is greater than the amount appropriated to 
        carry out this subtitle for the preceding fiscal year 
        by a percentage that equals or exceeds 10 percent, the 
        amount each State library administrative agency shall 
        reserve under subsection (a)(2) for the fiscal year for 
        which the determination is made shall be increased by 
        the same such percentage.
          (2) Appropriations decrease.--For any fiscal year for 
        which the amount appropriated to carry out this 
        subtitle is less than the amount appropriated to carry 
        out this subtitle for the preceding fiscal year by a 
        percentage that equals or exceeds 10 percent, the 
        amount each State library administrative agency shall 
        reserve under subsection (a)(2) for the fiscal year for 
        which the determination is made shall be decreased by 
        the same such percentage.
    (d) Plan.--Each public library desiring assistance under 
this section shall submit a plan for the expenditure of funds 
under this section to the State library administrative agency. 
Such plan shall include a description of how the library will--
          (1) identify the children described in subsection 
        (a)(2);
          (2) collaborate with community representatives to 
        ensure planning and implementation of appropriate, 
        helpful library services; and
          (3) establish indicators of success.
    (e) Priorities.--Priorities for the use of funds under this 
section may include activities for children described in 
subsection (a)(2) such as--
          (1) development of after-school homework support and 
        summer and vacation reading programs;
          (2) development of family literacy programs;
          (3) extension of branch hours to provide space and 
        resources for homework;
          (4) development of coalitions and training programs 
        involving libraries and other service providers in the 
        State;
          (5) development of technological resources;
          (6) hiring specialized outreach staff; and
          (7) development of peer tutoring programs.

                  CHAPTER 3--ADMINISTRATIVE PROVISIONS

                    Subchapter A--State Requirements

SEC. 251. STATE EVALUATION.

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

SEC. 252. STATE ADVISORY COUNCILS.

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

                   Subchapter B--Federal Requirements

SEC. 261. SERVICES FOR INDIAN TRIBES.

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

SEC. 262. NATIONAL LEADERSHIP PROGRAM.

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

SEC. 263. STATE AND LOCAL INITIATIVES.

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

                      Subtitle C--Museum Services

SEC. 271. PURPOSE.

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

SEC. 272. DEFINITIONS.

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

SEC. 273. MUSEUM SERVICES ACTIVITIES.

    (a) Grants.--The Director, subject to the policy direction 
of the Museum Board, may make grants to museums to pay for the 
Federal share of the cost of increasing and improving museum 
services, through such activities as--
          (1) programs to enable museums to construct or 
        install displays, interpretations, and exhibitions in 
        order to improve museum services to the public;
          (2) assisting museums in developing and maintaining 
        professionally trained or otherwise experienced staff 
        to meet their needs;
          (3) assisting museums in meeting their administrative 
        costs in preserving and maintaining their collections, 
        exhibiting the collections to the public, and providing 
        educational programs to the public through the use of 
        the collections;
          (4) assisting museums in cooperating with each other 
        in developing traveling exhibitions, meeting 
        transportation costs, and identifying and locating 
        collections available for loan;
          (5) assisting museums in conservation of their 
        collections; and
          (6) developing and carrying out specialized programs 
        for specific segments of the public, such as programs 
        for urban neighborhoods, rural areas, Indian 
        reservations, and penal and other State institutions.
    (b) Contracts and Cooperative Agreements.--
          (1) Projects to strengthen museum services.--The 
        Director, subject to the policy direction of the Museum 
        Board, is authorized to enter into contracts and 
        cooperative agreements with appropriate entities to pay 
        for the Federal share of enabling the entities to 
        undertake projects designed to strengthen museum 
        services, except that any contracts or cooperative 
        agreements entered into pursuant to this subsection 
        shall be effective only to such extent or in such 
        amounts as are provided in appropriations Acts.
          (2) Limitation on amount.--The aggregate amount of 
        financial assistance made available under this 
        subsection for a fiscal year shall not exceed 15 
        percent of the amount appropriated under this subtitle 
        for such fiscal year.
          (3) Operational expenses.--No financial assistance 
        may be provided under this subsection to pay for 
        operational expenses.
    (c) Federal Share.--
          (1) 50 percent.--Except as provided in paragraph (2), 
        the Federal share described in subsections (a) and (b) 
        shall be not more than 50 percent.
          (2) 100 percent.--The Director may use not more than 
        20 percent of the funds made available under this 
        section for a fiscal year to make grants under 
        subsection (a), or enter into contracts or agreements 
        under subsection (b), for which the Federal share may 
        be 100 percent.
    (d) Review and Evaluation.--The Director shall establish 
procedures for reviewing and evaluating grants, contracts, and 
cooperative agreements made or entered into under this section. 
Procedures for reviewing grant applications or contracts and 
cooperative agreements for financial assistance under this 
section shall not be subject to any review outside of the 
Institute.

SEC. 274. ASSESSMENTS.

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

SEC. 275. AWARD.

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

SEC. 276. NATIONAL MUSEUM SERVICES BOARD.

    (a) Establishment.--There is established in the Institute a 
National Museum Services Board.
    (b) Composition and Qualifications.--
          (1) Composition.--The Museum Board shall consist of 
        the Director and 14 members appointed by the President, 
        by and with the advice and consent of the Senate.
          (2) Qualifications.--The appointive members of the 
        Museum Board shall be selected from among citizens of 
        the United States--
                  (A) who are members of the general public;
                  (B) who are or have been affiliated with--
                          (i) resources that, collectively, are 
                        broadly representative of the 
                        curatorial, conservation, educational, 
                        and cultural resources of the United 
                        States; and
                          (ii) museums that, collectively, are 
                        broadly representative of various types 
                        of museums, including museums relating 
                        to science, history, technology, and 
                        art, zoos, and botanical gardens; and
                  (C) who are recognized for their broad 
                knowledge, expertise, or experience in museums 
                or commitment to museums.
          (3) Geographic and other representation.--Members of 
        the Museum Board shall be appointed to reflect persons 
        from various geographic regions of the United States. 
        The Museum Board may not include, at any time, more 
        than 3 members from a single State. In making such 
        appointments, the President shall give due regard to 
        equitable representation of women, minorities, and 
        persons with disabilities who are involved with 
        museums.
    (c) Terms.--
          (1) In general.--Each appointive member of the Museum 
        Board shall serve for a term of 5 years, except that--
                  (A) of the members first appointed, 3 shall 
                serve for terms of 5 years, 3 shall serve for 
                terms of 4 years, 3 shall serve for terms of 3 
                years, 3 shall serve for terms of 2 years, and 
                2 shall serve for terms of 1 year, as 
                designated by the President at the time of 
                nomination for appointment; and
                  (B) any member appointed to fill a vacancy 
                shall serve for the remainder of the term for 
                which the predecessor of the member was 
                appointed.
          (2) Reappointment.--No member of the Museum Board who 
        has been a member for more than 7 consecutive years 
        shall be eligible for reappointment.
          (3) Service until successor takes office.--
        Notwithstanding any other provision of this subsection, 
        a member shall serve after the expiration of the term 
        of the member until the successor to the member takes 
        office.
    (d) Duties and Powers.--The Museum Board shall have the 
responsibility for general policies with respect to the duties, 
powers and authorities vested in the Institute relating to 
museum services, including general policies with respect to--
          (1) financial assistance awarded under this title for 
        museum services;
          (2) projects described in section 204(c)(2); and
          (3) measures to ensure that the policies and 
        activities of the Institute for Museum and Library 
        Services are coordinated with other activities of the 
        Federal Government.
    (e) Chairperson.--The President shall designate 1 of the 
appointive members of the Museum Board as Chairperson of the 
Museum Board.
    (f) Meetings.--
          (1) In general.--The Museum Board shall meet--
                  (A) not less than 3 times each year, 
                including--
                          (i) not less than 2 times each year 
                        separately; and
                          (ii) not less than 1 time each year 
                        in a joint meeting with the Commission, 
                        convened for purposes of making general 
                        policies with respect to financial 
                        assistance for projects described in 
                        section 204(c)(2); and
                  (B) at the call of the Director.
          (2) Vote.--All decisions by the Museum Board with 
        respect to the exercise of the duties and powers of the 
        Museum Board shall be made by a majority vote of the 
        members of the Museum Board who are present. All 
        decisions by the Commission and the Museum Board with 
        respect to the policies described in paragraph 
        (1)(A)(ii) shall be made by a 213 majority vote of the 
        total number of the members of the Commission and the 
        Museum Board who are present.
    (g) Quorum.--A majority of the members of the Museum Board 
shall constitute a quorum for the conduct of business at 
official meetings of the Museum Board, but a lesser number of 
members may hold hearings. A majority of the members of the 
Commission and a majority of the members of the Museum Board 
shall constitute a quorum for the conduct of business at 
official joint meetings of the Commission and the Museum Board.
    (h) Compensation and Travel Expenses.--
          (1) Compensation.--Each member of the Museum Board 
        who is not an officer or employee of the Federal 
        Government shall be compensated at a rate to be fixed 
        by the President, but not to exceed the daily 
        equivalent of the maximum rate authorized for a 
        position above grade GS-15 of the General Schedule 
        under section 5108 of title 5, United States Code, for 
        each day (including travel time) during which such 
        member is engaged in the performance of the duties of 
        the Museum Board. All members of the Museum Board who 
        are officers or employees of the Federal Government 
        shall serve without compensation in addition to 
        compensation received for their services as officers or 
        employees of the Federal Government.
          (2) Travel expenses.--The members of the Museum Board 
        shall be allowed travel expenses, including per diem in 
        lieu of subsistence, in the same amounts and to the 
        same extent, as authorized under section 5703 of title 
        5, United States Code, for persons employed 
        intermittently in Federal Government service.
    (i) Coordination.--The Museum Board, with the advice of the 
Director, shall take steps to ensure that the policies and 
activities of the Institute are coordinated with other 
activities of the Federal Government.

SEC. 277. AUTHORIZATION OF APPROPRIATIONS.

    (a) Grants.--For the purpose of carrying out this subtitle, 
there are authorized to be appropriated to the Director 
$28,700,000 for the fiscal year 1996, and such sums as may be 
necessary for each of the fiscal years 1997 through 2000.
    (b) Administration.--Not more than 10 percent of the funds 
appropriated under this section for a fiscal year may be used 
to pay for the administrative costs of carrying out this 
subtitle.
    (c) Joint Projects.--Not less than 5 percent and not more 
than 7 percent of the funds appropriated under this section for 
a fiscal year may be made available for projects described in 
section 204(c)(2) for the fiscal year.
    (d) Sums Remaining Available.--Sums appropriated pursuant 
to subsection (a) for any fiscal year shall remain available 
for obligation until expended.
          * * * * * * *

                      TITLE 20, UNITED STATES CODE

      NATIONAL COMMISSION ON LIBRARIES AND INFORMATION SCIENCE ACT

SEC. 1504. * * *

    (a) * * *
          * * * * * * *
    (b) The Commission shall have the responsibility to advise 
the Director of the Institute of Museum and Library Services on 
general policies with respect to the duties and powers vested 
in the Institute of Museum and Library Services relating to 
library services, including--
          (1) general policies with respect to--
                  (A) financial assistance awarded under the 
                Museum and Library Services Act for library 
                services; and
                  (B) projects described in section 204(c)(2) 
                of such Act; and
          (2) measures to ensure that the policies and 
        activities of the Institute of Museum and Library 
        Services are coordinated with other activities of the 
        Federal Government.
    (c)(1) The Commission shall meet not less than 1 time each 
year in a joint meeting with the National Museum Services 
Board, convened for purposes of providing advice on general 
policy with respect to financial assistance for projects 
described in section 204(c)(2) of such Act.
    (2) All decisions by the Commission and the National Museum 
Services Board with respect to the advice on general policy 
described in paragraph (1) shall be made by a \2/3\ majority 
vote of the total number of the members of the Commission and 
the National Museum Services Board who are present.
    (3) A majority of the members of the Commission and a 
majority of the members of the National Museum Services Board 
shall constitute a quorum for the conduct of business at 
official joint meetings of the Commission and the National 
Museum Services Board.
    [(b)] (d) Contract Authority.--The Commission is authorized 
to contract with Federal agencies and other public and private 
agencies to carry out any of its functions under subsection (a) 
and to publish and disseminate such reports, findings, studies, 
and records as it deems appropriate.
    [(c)] (e) Hearings.--The Commission is further authorized 
to conduct such hearings at such times and places as it deems 
appropriate for carrying out the purposes of this Act.
    [(d)] (f) Cooperation With Other Agencies.--The heads of 
all Federal agencies are, to the extent not prohibited by law, 
directed to cooperate with the Commission in carrying out the 
purposes of this Act.
    Sec. 1505. Membership.--
    (a) Appointment; Terms of Office; Chairman; Vacancies.--The 
Commission shall be composed of the [Librarian of Congress] 
Librarian of Congress, the Director of the Institute of Museum 
and Library Services (who shall serve as an ex officio, 
nonvoting member), and fourteen members appointed by the 
President, by and with the advice and consent of the Senate. 
Five members of the Commission shall be professional librarians 
or information specialists, and the remainder shall be persons 
having [special competence or interest in] special competence 
in or knowledge of the needs of our society for library and 
information services, at least one of whom shall be 
knowledgeable with respect to the technological aspects of 
library and information services and sciences and at least one 
other of whom shall be knowledgeable with respect to the 
library and information service and science needs of the 
elderly. One of the appointive members of the Commission shall 
be designated by the President as Chairman of the Commission. A 
majority of members of the Commission shall constitute a quorum 
for conduct of business at official meetings of the Commission. 
The terms of office of the appointive members of the Commission 
shall be five years, except that (1) the term of office of any 
member of the Commission shall continue until the earlier of 
(A) the date on which the member's successor has been appointed 
by the President; or (B) July 19 of the year succeeding the 
year in which the member's appointed term of office shall 
expire, and (2) a member appointed to fill a vacancy occurring 
prior to the expiration of the term for which his predecessor 
was appointed shall be appointed only for the remainder of such 
[term, and at least one other of whom shall be knowledgeable 
with respect to the library and information service and science 
needs of the elderly] term.
    (b) Compensation; travel expenses. Members of the 
Commission who are not in the regular full-time employ of the 
United States shall, while attending meetings or conferences of 
the Commission or otherwise engaged in the business of the 
Commission, be entitled to receive compensation at a rate fixed 
by the Chairman, but not exceeding [the rate specified at the 
time of such service for grade GS-18 in section 5332 of title 
5, United States Code, including traveltime, and while] the 
daily equivalent of the maximum rate authorized for a position 
above grade GS-15 of the General Schedule under section 5108 of 
title 5, United States Code, for each day (including 
traveltime) during which the members are engaged in the 
business of the Commission. While so serving on the business of 
the Commission away from their homes or regular places of 
business, they may be allowed travel expenses, including per 
diem in lieu of subsistence, as authorized by section 5703 of 
title 5, United States Code, for persons employed 
intermittently in the Government service.
          * * * * * * *

                      TITLE 20, UNITED STATES CODE

                 LIBRARY SERVICES AND CONSTRUCTION ACT

          * * * * * * *
    [Sec. 351. Declaration of Policy.--
    [(a) It is the purpose of this Act to assist the States in 
the extension and improvement of public library services to 
areas and populations of the States which are without such 
services or to which such services are inadequate and to assist 
Indian tribes in planning and developing library services to 
meet their needs. It is the further purpose of this Act to 
assist with--
          [(1) public library construction and renovation;
          [(2) improving State and local public library 
        services for older Americans, and for handicapped, 
        institutionalized, and other disadvantaged individuals;
          [(3) strengthening State library administrative 
        agencies;
          [(4) promoting interlibrary cooperation and resource 
        sharing among all types of libraries;
          [(5) strengthening major urban resource libraries; 
        and
          [(6) increasing the capacity of libraries to keep up 
        with rapidly changing information technology.
    [(b) Nothing in this Act shall be construed to interfere 
with State and local initiative and responsibility in the 
conduct of library services. The administration of libraries, 
the selection of personnel and library books and materials, 
and, insofar as consistent with the purposes of this Act, the 
determination of the best uses of the funds provided under this 
Act shall be reserved to the States and their local 
subdivisions and Indian tribes.]
          * * * * * * *

                      TITLE 20, UNITED STATES CODE

                          HIGHER EDUCATION ACT

          * * * * * * *
    [Sec. 1021. Purpose; Authorization.--
    [(a) Purpose.--The Secretary shall carry out a program to 
assist--
          [(1) college and university libraries in acquiring 
        technological equipment and in conducting research in 
        information technology in accordance with part A
          [(2) in the education and training of persons in 
        library and information science and to encourage 
        research and development relating to improvement of 
        libraries (including the promotion of economical and 
        effective information delivery, cooperative efforts, 
        and developmental projects) in accordance with part B;
          [(3) the Nation's major research libraries, in 
        maintaining and strengthening their collections, and in 
        making information resources available to other 
        libraries whose users have need for research materials 
        in accordance with part C;
          [(4) historically black colleges and universities and 
        other minority-serving institutions with programs in 
        library and information sciences to train and educate 
        African-Americans and other underrepresented racial, 
        national origin, and ethnic minorities in such programs 
        in accordance with part D.
    [(b) Authorization of Appropriations.--
          [(1) Part A. There are authorized to be appropriated 
        to carry out part A $20,000,000 for fiscal year 1993 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          [(2) Part B. There are authorized to be appropriated 
        to carry out part B $10,000,000 for fiscal year 1993 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          [(3) Part C. There are authorized to be appropriated 
        to carry out part C $20,000,000 for fiscal year 1993 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          [(4) Part D. There are authorized to be appropriated 
        to carry out part D $15,000,000 for fiscal year 1993 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.]
          * * * * * * *

                      TITLE 20, UNITED STATES CODE

              OMNIBUS EDUCATION RECONCILIATION ACT OF 1981

          * * * * * * *
    Sec. 3489. * * *
          * * * * * * *
          [(12) the Library Services and Construction Act;]
          [(13)] (12) the Navajo Community College Act and the 
        Tribally Controlled Community College Assistance Act of 
        1978;
          [(14)] (13) part C of title IX of the Elementary and 
        Secondary Education Act of 1965, relating to Women's 
        Educational Equity; and
          [(15)] (14) title VII of the Elementary and Secondary 
        Education Act of 1965.
          * * * * * * *

                      TITLE 20, UNITED STATES CODE

             ELEMENTARY AND SECONDARY EDUCATION ACT OF 1965

    Sec. 6813. * * *
          * * * * * * *
          (10) the term ``State library administrative agency'' 
        has the same meaning given to such term in [section 3 
        of the Library Services and Construction Act] section 
        213(7) of the Library Services and Technology Act; and
          * * * * * * *

                      TITLE 40, UNITED STATES CODE

              COMMUNITY IMPROVEMENT VOLUNTEER ACT OF 1994

          * * * * * * *
    Sec. 276d-3. Contracts Affected.--
    For purposes of sections 7303 and 7304, the Acts or 
provisions described in this section are--
          [(1) the Library Services and Construction Act;]
          [(2)] (1) the Indian Self-Determination and Education 
        Assistance Act;
          [(3)] (2) section 329 of the Public Health Service 
        Act;
          [(4)] (3) section 330 of the Public Health Service 
        Act;
          [(5)] (4) the Indian Health Care Improvement Act; and
          [(6)] (5) the Housing and Community Development Act 
        of 1974.
          * * * * * * *

                     TITLE, 42, UNITED STATES CODE

     DEMONSTRATION CITIES AND METROPOLITAN DEVELOPMENT ACT OF 1966

          * * * * * * *
    Sec. 3338. * * *
          * * * * * * *
    (2) ``Areawide development project'' means a project 
assisted or to be assisted under section 702 of the Housing and 
Urban Development Act of 1965; [title II of the Library 
Services and Construction Act;] section 606 of the Public 
Health Service Act; section 8 of the Federal Water Pollution 
Control Act; section 120(a) of title 23, United States Code; 
section 12 of the Federal Airport Act; section 19 of the 
Airport and Airway Development Act of 1970; section 3 of the 
Urban Mass Transportation Act of 1964; title VII of the Housing 
Act of 1961; or section 5(e) of the Land and Water Conservation 
Fund Act of 1965; or under section 101(a)(1) of the Public 
Works and Economic Development Act of 1965 (for a project of a 
type which the Secretary determines to be eligible for 
assistance under any of the other provisions listed above).
          * * * * * * *

                      TITLE 48, UNITED STATES CODE

                           PUBLIC LAW 87-688

          * * * * * * *
    Sec. 1666. * * *
          * * * * * * *
    (c) The Secretary of Health, Education, and Welfare may 
extend to American Samoa the benefits of the Vocational 
Education Act of 1946 (60 Stat. 775; 20 U.S.C. 15i et seq.), 
[the Library Services Act (70 Stat. 293; 20 U.S.C. 351 et 
seq.),] the Hospital Survey and Construction Act (Act of August 
13, 1946; 60 Stat, 1040; 42 U.S.C. 291 et. seq.), and section 
314 of the Public Health Service Act (58 Stat. 693; 42 U.S.C. 
246), all as amended.
          * * * * * * *

                      TITLE 5, UNITED STATES CODE

          * * * * * * *
    Sec. 5315. * * *
          * * * * * * *

                      TITLE 5, UNITED STATES CODE

                     INSPECTOR GENERAL ACT OF 1978

          * * * * * * *

SEC. 8G. REQUIREMENTS FOR FEDERAL ENTITIES AND DESIGNATED FEDERAL 
                    ENTITIES.

    (a) Notwithstanding section 11 of this Act, as used in this 
section--
          (1) * * *
          * * * * * * *
          (2) the term ``designated Federal entity'' means 
        Amtrak, the Appalachian Regional Commission, the Board 
        of Governors of the Federal Reserve System, the Board 
        for International Broadcasting, the Commodity Futures 
        Trading Commission, the Consumer Product Safety 
        Commission, the Corporation for Public Broadcasting, 
        the Equal Employment Opportunity Commission, the Farm 
        Credit Administration, the Federal Communications 
        Commission, the Federal Deposit Insurance Corporation, 
        the Federal Election Commission, the Federal Housing 
        Finance Board, the Federal Labor Relations Authority, 
        the Federal Maritime Commission, the Federal Trade 
        Commission, the Interstate Commerce Commission, the 
        Legal Services Corporation, the National Archives and 
        Records Administration, the National Credit Union 
        Administration, [the National Endowment for the Arts, 
        the National Endowment for the Humanities,] the portion 
        of the National Foundation on the Arts and the 
        Humanities consisting of the National Endowment for the 
        Arts and the National Endowment for the Humanities, the 
        National Labor Relations Board, the National Science 
        Foundation, the Panama Canal Commission, the Peace 
        Corps, the Pension Benefit Guaranty Corporation, the 
        Securities and Exchange Commission, the Smithsonian 
        Institution, the Tennessee Valley Authority, the United 
        States International Trade Commission, and the United 
        States Postal Service;
          * * * * * * *
          (4) the term ``head of the designated Federal 
        entity'' means any person or persons designated by 
        statute as the head of a designated Federal entity and 
        if no such designation exists, the chief policymaking 
        officer or board of a designated Federal entity as 
        identified in the list published pursuant to subsection 
        (h)(1) of this section, [except that with respect to 
        the National Science Foundation, such term means the 
        National Science Board;] except that--
                  (A) with respect to the National Science 
                Foundation, such term means the National 
                Science Board; and
                  (B) with respect to the National Endowment 
                for the Arts and the National Endowment for the 
                Humanities, the term means the Chairperson of 
                the National Endowment for the Arts with 
                respect to matters relating to the National 
                Endowment for the Arts and the Chairperson of 
                the National Endowment for the Humanities with 
                respect to matters relating to the Chairperson 
                of the National Endowment for the Humanities;
          * * * * * * *
    (c) Except as provided under subsection (f) of this 
section, the Inspector General shall be appointed by the head 
of the designated Federal entity in accordance with the 
applicable laws and regulations governing appointments within 
the designated Federal entity, except that the Inspector 
General for the National Endowment for the Arts and the 
National Endowment for the Humanities shall be jointly 
appointed by the Chairperson of the National Endowment for the 
Arts and the Chairperson of the National Endowment for the 
Humanities.
    (d) Each Inspector General shall report to and be under the 
general supervision of the head of the designated Federal 
entity, but shall not report to, or be subject to supervision 
by, any other officer or employee of such designated Federal 
entity, except as provided in section 103 of the National 
Foundation on the Arts and the Humanities Act of 1965. The head 
of the designated Federal entity shall not prevent or prohibit 
the Inspector General from initiating, carrying out, or 
completing any audit or investigation, or from issuing any 
subpoena during the course of any audit or investigation.
          * * * * * * *
    [Director of the Institute of Museum Services.] Director of 
the Institute of Museum and Library Services.
          * * * * * * *

                      TITLE 5, UNITED STATES CODE

                DEPARTMENT OF EDUCATION ORGANIZATION ACT

          * * * * * * *
    Sec. 3441. * * *
    (a) * * *
          * * * * * * *
          [(5) all functions of the Institute of Museum 
        Services of the Department of Health, Education, and 
        Welfare, and of the Director thereof;]
          [(6)] (5) all functions of the Advisory Council on 
        Education Statistics; and
          [(7)] (6) all functions of the Federal Education Data 
        Acquisition Council.
          * * * * * * *
    (b) * * *
          * * * * * * *
          [(4) the Institute of Museum Services of the 
        Department of Health, Education, and Welfare;]
          [(5)] (4) the Advisory Council on Education 
        Statistics;
          [(6)] (5) the Federal Education Data Acquisition 
        Council; and
          [(7)] (6) any advisory committee of the Department of 
        Health, Education, and Welfare giving advice or making 
        recommendations that primarily concern education 
        functions transferred by this section.
          * * * * * * *

                      TITLE 20, UNITED STATES CODE

             ELEMENTARY AND SECONDARY EDUCATION ACT OF 1965

          * * * * * * *
    Sec. 6621. * * *
          * * * * * * *
    (b) Requirements.--In carrying out the activities described 
in subsection (a), the Secretary shall coordinate professional 
development programs within the Department, particularly with 
those programs within the Office of Educational Research and 
Improvement and the Office of Special Education and 
Rehabilitative Services, and shall consult and coordinate with 
the National Science Foundation, the National Endowment for the 
Humanities, the National Endowment for the Arts, the [Institute 
of Museum Services] Institute of Museum and Library Services, 
and other appropriate Federal agencies and entities.
          * * * * * * *
    Sec. 6645. * * *
          * * * * * * *
    (c) * * *
          (1) * * *
          * * * * * * *
                  (D) funds received from other Federal 
                agencies, such as the National Science 
                Foundation, the Departments of Commerce, 
                Energy, and Health and Human Services, the 
                National Endowment for the Arts, the [Institute 
                of Museum Services,] Institute of Museum and 
                Library Services, and the National Endowment 
                for the Humanities; and
          * * * * * * *
    Sec. 6648. * * *
          * * * * * * *
    (d) * * *
          * * * * * * *
          (1) * * *
          * * * * * * *
                  (H) * * *
          * * * * * * *
                          (v) funds or programming from other 
                        Federal agencies, such as the National 
                        Science Foundation, the Department of 
                        Energy, the Department of Health and 
                        Human Services, the [Institute of 
                        Museum Services] Institute of Museum 
                        and Library Services, the National 
                        Endowment for the Humanities, and the 
                        National Endowment for the Arts;
          * * * * * * *
    Sec. 6649. * * *
          * * * * * * *
    (b) * * *
          (1) * * *
          * * * * * * *
                  (C) * * *
          * * * * * * *
                          (vi) programs that are related to the 
                        purposes of this Act that are 
                        administered by other Federal agencies, 
                        including the National Science 
                        Foundation, the National Endowment for 
                        the Humanities, the National Endowment 
                        for the Arts, the [Institute of Museum 
                        Services] Institute of Museum and 
                        Library Services, and the Department of 
                        Energy.
          * * * * * * *
    Sec. 8091. * * *
          * * * * * * *
    (d) * * *
          * * * * * * *
          (6) supporting collaborative activities with other 
        Federal agencies or institutions involved in arts 
        education, such as the National Endowment for the Arts, 
        the [Institute of Museum Services] Institute of Museum 
        and Library Services, the John F. Kennedy Center for 
        the Performing Arts, Very Special Arts, and the 
        National Gallery of Art;
          * * * * * * *
    (e) * * *
          * * * * * * *
          (2) Special rule.--In carrying out this subpart, the 
        Secretary shall coordinate with the National Endowment 
        for the Arts, the [Institute of Museum Services] 
        Institute of Museum and Library Services, the John F. 
        Kennedy Center for the Performing Arts, Very Special 
        Arts, and the National Gallery of Art.
          * * * * * * *
    Sec. 8102. * * *
          * * * * * * *
    (b) * * *
          * * * * * * *
          (2) Partnership.--An interagency partnership 
        comprised of the Secretary of Education, [the Chairman 
        of the National Endowment for the Humanities, the 
        Chairman of the National Endowment for the Arts, and 
        the Director of the Institute of Museum Services,] the 
        Chairperson of the National Endowment for the 
        Humanities, the Chairperson of the National Endowment 
        for the Arts, and the Institute of Museum and Library 
        Services, or their designees, shall establish criteria 
        and procedures for awarding grants, including the 
        establishment of panels to review the applications, and 
        shall administer the grants program authorized by this 
        section. The Secretary shall publish such criteria and 
        procedures in the Federal Register.
          * * * * * * *
          (7) Models.--The Secretary, in consultation with [the 
        Chairman of the National Endowment for the Humanities, 
        the Chairman of the National Endowment for the Arts and 
        the Director of the Institute of Museum Services,] the 
        Chairperson of the National Endowment for the 
        Humanities, the Chairperson of the National Endowment 
        for the Arts, and the Institute of Museum and Library 
        Services, or their designees, shall submit successful 
        models under this title to the National Diffusion 
        Network for review.
          * * * * * * *
    Sec. 8104. * * *
    (a) * * *
          * * * * * * *
          (2) * * *
          * * * * * * *
                  (B)
          * * * * * * *
                          [(iii) the Institute of Museum 
                        Services.] (iii) the Institute of 
                        Museum and Library Services.
          * * * * * * *

                      TITLE 20, UNITED STATES CODE

                      HIGHER EDUCATION ACT OF 1965

          * * * * * * *
    [Sec. 1221i. Office of Libraries and Learning Resources.--
    [(a) Establishment; Administration of Specified Programs.--
There is established, in the Office of Education, an Office of 
Libraries and Learning Resources (hereafter in this section 
referred to as the ``Office''), through which the Commissioner 
shall administer all programs in the Office of Education 
related to assistance for, and encouragement of, libraries and 
information centers and education technology.
    [(b) Director of Office; Delegation of Functions.--The 
Office shall be headed by a Director, to whom the Commissioner 
shall delegate his delegable functions with respect to the 
programs administered through the Office.]
          * * * * * * *

                      TITLE 20, UNITED STATES CODE

                DEPARTMENT OF EDUCATION ORGANIZATION ACT

          * * * * * * *
    Sec. 3473.
          * * * * * * *
    (b) * * *
          (1) * * *
          * * * * * * *
                  [(H) the Office of Libraries and Learning 
                Resources;]
                  [(I)] (H) the Office of Indian Education;
                  [(J)] (I) the Office of Career Education;
                  [(K)] (J) the Office of Non-Public Education;
                  [(L)] (K) the bureau for the education and 
                training for the handicapped; and
                  [(M)] (L) the administrative units for 
                guidance an counseling programs, the veterans' 
                cost of instruction program, and the program 
                for the gifted and talented children.
          * * * * * * *

                      TITLE 20, UNITED STATES CODE

                    ARTS AND ARTIFACTS INDEMNITY ACT

          * * * * * * *
    [Sec. 971. Agreements to Indemnify Against Loss or 
Damage.--
    [(a) Authorization of Federal Council on the Arts and 
Humanities.--The Federal Council on the Arts and Humanities 
(hereinafter in this Act referred to as the ``Council''), 
established under section 9 of the National Foundation on the 
Arts and the Humanities Act of 1965. 958, is authorized to make 
agreements to indemnify against loss or damage such items as 
may be eligible for such indemnity agreements under section 3--
          [(1) in accordance with the provisions of this Act; 
        and
          [(2) on such terms and conditions as the Council 
        shall prescribe, by regulation, in order to achieve the 
        purposes of this Act and, consistent with such 
        purposes, to protect the financial interest of the 
        United States.
    [(b) Council as ``agency''.
    [(1) For purposes of this Act, the Council shall be an 
``agency'' within the meaning of the appropriate definitions of 
such term in title 5, United States Code.
    [(2) For purposes of this Act, the Secretary of the 
Smithsonian Institution, the Director of the National Galley of 
Art, the member designated by the Chairman of the Senate 
Commission of Art and Antiquities and the member designated by 
the Speaker of the House of Representatives shall not serve as 
members of the Council.
    [Sec. 972. Items Eligible for Indemnity Agreements.--
    [(a) Works of Art; Printed or Published Materials; Other 
Artifacts or Objects; Photographs, Motion Pictures, or Tapes.--
The Council may make an indemnity agreement under this Act with 
respect to--
          [(1) works of art, including tapestries, paintings, 
        sculpture, folk art, graphics, and craft arts;
          [(2) manuscripts, rate documents, books, and other 
        printed or published materials;
          [(3) other artifacts or objects; and
          [(4) photographs, motion pictures, or audio and video 
        tape; which are (A) of educational, cultural, 
        historical, or scientific value, and (B) the exhibition 
        of which is certified by the Secretary of State or his 
        designee as being in the national interest.
    [(b) Extension of Coverage; ``on Exhibition'' Defined.--
          [(1) An indemnity agreement made under this Act shall 
        cover eligible items while on exhibition in the United 
        States or elsewhere preferably when part of an exchange 
        of exhibitions.
          [(2) Four purposes of this subsection, the term ``on 
        exhibition'' includes that period of time beginning on 
        the date the eligible items leave the premises of the 
        lender or place designated by lender and ending on the 
        date such items are returned to the premises of the 
        lender or place designated by the lender.
    [Sec. 973. Application for Indemnity Agreement.--
    [(a) Parties.--Any person, nonprofit agency, institution, 
or government desiring to make an indemnity agreement for 
eligible items under this Act shall make application therefor 
in accordance with such procedures, in such form, and in such 
manner as the Council shall, by regulation, prescribe.
    [(b) Contents.--An application under subsection (a) shall--
          [(1) describe each item to be covered by the 
        agreement (including an estimated value of such item);
          [(2) show evidence that the items are eligible under 
        section 3(a); and
          [(3) set forth policies, procedures, techniques, and 
        methods with respect to preparation for, and conduct 
        of, exhibition of the items, and any transportation 
        related to such items.
    [(c) Approval.--Upon receipt of an application under this 
section, the Council shall, if such application conforms with 
the requirements of this Act, approve the application and make 
an indemnity agreement with the applicant. Upon such approval, 
the agreement shall constitute a contract between the Council 
and the applicant pledging the full faith and credit of the 
United States to pay any amount for which the Council becomes 
liable under such agreement. The Council, for such purpose, is 
hereby authorized to pledge the full faith and credit of the 
United States.
    [Sec. 974. Indemnity Limits.--
    [(a) Approval of Estimated Values.--Upon receipt of an 
application meeting the requirements of subsections (a) and (b) 
of section 4, the Council shall review the estimated value of 
the items for which coverage by an indemnity agreement is 
sought. If the Council agrees with such estimated value, for 
the purposes of this Act, the Council shall, after approval of 
the application as provided in subsection (c) of section 4, 
make an indemnity agreement.
    [(b) Maximum Limits of Coverage.--The aggregate of loss or 
damages covered by indemnity agreements made under this Act 
shall not exceed $3,000,000,000 at any one time.
    [(c) Limit for Single Exhibition.--No indemnity agreement 
for a single exhibition shall cover loss or damage in excess of 
$300,000,000.
    [(d) Deductible Limit.--If the estimated value of the items 
covered by an indemnity agreement for a single exhibition is--
          [(1) $2,000,000 or less, then coverage under this Act 
        shall extend only to loss or damage in excess of the 
        first $15,000 of loss or damage to items covered;
          [(2) more than $2,000,000 but less than $10,000,000, 
        then coverage under this Act shall extend only to loss 
        or damage in excess of the first $25,000 of loss or 
        damage to items covered;
          [(3) not less than $10,000,000 but less than 
        $125,000,000, then coverage under this Act shall extend 
        to loss or damage in excess of the first $50,000 of 
        loss or damage to items covered;
          [(4) not less than $125,000,000 but less than 
        $200,000, then coverage under this Act shall extend to 
        loss or damage in excess of the first $100,000 of loss 
        or damage to items covered; or
          [(5) $200,000,000 or more, then coverage under the 
        Act shall extend only to loss or damage in excess of 
        the first $200,000, of loss or damage to items covered.
    [Sec. 975. Claims for Losses.--
    [(a) Regulations for Prompt Adjustments.--The Council shall 
prescribe regulations providing for prompt adjustment of valid 
claims for losses which are covered by an agreement made 
pursuant to section 5 including provision for arbitration of 
issues relating to the dollar value of damages involving less 
than total loss or destruction of such covered objects.
    [(b) Certification.--In the case of a claim of loss with 
respect to an item which is covered by an agreement made 
pursuant to section 5, the Council shall certify the validity 
of the claim and the amount of the loss to the Speaker of the 
House of Representatives and the President pro tempore of the 
Senate.
    [Sec. 976. Authorization of Appropriations.--
    [There are hereby authorized to be appropriated such sums 
as may be necessary (1) to enable the Council to carry out its 
functions under this Act, and (2) pay claims certified pursuant 
to section 6(b)
    [Sec. 977. Annual Report to Congress.--
    [The Council shall report annually to the Congress (1) all 
claims actually paid pursuant to this Act during the preceding 
fiscal year, (2) pending claims against the Council under this 
Act as of the close of that fiscal year, and (3) the aggregate 
face value of contracts entered into by the Council which are 
outstanding at the close of that fiscal year.]

SECTION. 1. SHORT TITLE.

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

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

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

SEC. 3. ELIGIBLE ITEMS.

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

SEC. 4. APPLICATIONS.

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

SEC. 5. INDEMNITY AGREEMENT.

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

SEC. 6. REGULATIONS AND CERTIFICATION.

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

SEC. 7. REPORT.

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

SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

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

                TITLE 20--UNITED STATES CODE--1029 NOTE

                  HIGHER EDUCATION AMENDMENTS OF 1986

          * * * * * * *

                       [Part D--Library Resources

[SEC. 1331. STUDY OF THE EFFECTIVENESS OF THE NEEDS CRITERIA FOR THE 
                    COLLEGE LIBRARY RESOURCE PROGRAM AUTHORIZED.

    [(a) Study Required.--The National Commission on Libraries 
and Information Sciences shall conduct a study on the 
effectiveness in directing assistance to libraries with the 
greatest need of the needs criteria specified in section 211 of 
the Act.
    [(b) Report to Congress.--The National Commission on 
Libraries and Information Sciences shall prepare and submit a 
report to the Congress not later than 3 years after the 
conclusion of the first fiscal year in which appropriations are 
made for the College Library Resource Program authorized by 
section 211 of the Act, together with such recommendations as 
the Commission on Libraries and Information Sciences deems 
appropriate.]
          * * * * * * *

                      TITLE 40--UNITED STATES CODE

              APPALACHIAN REGIONAL DEVELOPMENT ACT OF 1965

          * * * * * * *
    Sec. 214. (a) * * *
          * * * * * * *
    (c) The term ``Federal grant-in-aid programs'' as used in 
this section means those Federal grant-in-aid programs 
authorized on or before December 31, 1980, by this Act and Acts 
other than this Act for the acquisition or development of land, 
the construction or equipment of facilities, or other community 
or economic development or economic adjustment activities, 
including but not limited to grant-in-aid programs authorized 
by the following Acts: Federal Water Pollution Control Act; 
Watershed Protection and Flood Prevention Act; Titles VI and 
XVI of the Public Health Services Act; Carl D. Perkins 
Vocational Education Act; [Library Services and Construction 
Act;] Federal Airport Act; Airport and Airway Development Act 
of 1970; part IV of Title III of the Communications Act of 
1934; Title VI (part A) and VII of the Higher Education Act of 
1965; Land and Water Conservation Fund Act of 1965; National 
Defense Education Act of 1958; Consolidated Farm and Rural 
Development Act; Titles I and IX of the Public Works and 
Economic Development Act of 1965; the housing repair program 
for homeowners authorized by section 1319 of Title 42 United 
States Code; grants under the Indian Health Service Act (42 
Stat. 208); and Title I of the Housing and Community 
Development Act of 1974. The term shall not include (A) the 
program for the construction of the development highway system 
authorized by section 201 of this Act or any other program 
relating to highway or road construction, or (B) any other 
program for which loans or other Federal financial assistance, 
except a grant-in-aid program, is authorized by this or any 
other Act. For the purpose of this section, any sewage 
treatment works constructed pursuant to section 8(c) of the 
Federal Water Pollution Control Act without Federal grant-in-
aid assistance under such section shall be granted as if 
constructed with such assistance.
          * * * * * * *