[House Report 105-659]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-659
_______________________________________________________________________


 
                    WORKFORCE INVESTMENT ACT OF 1998

                                _______
                                

                 July 29, 1998.--Ordered to be printed

_______________________________________________________________________


Mr. Goodling, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                        [To accompany H.R. 1385]

      The committee of conference on the disagreeing votes of 
the two Houses on the amendment of the Senate to the bill (H.R. 
1385), to consolidate, coordinate, and improve employment, 
training, literacy, and vocational rehabilitation programs in 
the United States, and for other purposes, having met, after 
full and free conference, have agreed to recommend and do 
recommend to their respective Houses as follows:
      That the House recede from its disagreement to the 
amendment of the Senate and agree to the same with an amendment 
as follows:
      In lieu of the matter proposed to be inserted by the 
Senate amendment, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

                  TITLE I--WORKFORCE INVESTMENT SYSTEMS

              Subtitle A--Workforce Investment Definitions

Sec. 101. Definitions.

      Subtitle B--Statewide and Local Workforce Investment Systems

Sec. 106. Purpose.

                       Chapter 1--State Provisions

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

                       Chapter 2--Local Provisions

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

          Chapter 3--Workforce Investment Activities Providers

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

                       Chapter 4--Youth Activities

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

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

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

                      Chapter 6--General Provisions

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

                          Subtitle C--Job Corps

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

                      Subtitle D--National Programs

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

                       Subtitle E--Administration

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

              Subtitle F--Repeals and Conforming Amendments

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

                 TITLE II--ADULT EDUCATION AND LITERACY

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

            Subtitle A--Adult Education and Literacy Programs

                      Chapter 1--Federal Provisions

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

                       Chapter 2--State Provisions

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

                       Chapter 3--Local Provisions

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

                      Chapter 4--General Provisions

Sec. 241. Administrative provisions.
Sec. 242. National institute for literacy.
Sec. 243. National leadership activities.

                           Subtitle B--Repeals

Sec. 251. Repeals.

           TITLE III--WORKFORCE INVESTMENT-RELATED ACTIVITIES

                      Subtitle A--Wagner-Peyser Act

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

                Subtitle B--Linkages With Other Programs

Sec. 321. Trade act of 1974.
Sec. 322. Veterans' employment programs.
Sec. 323. Older americans act of 1965.

          Subtitle C--Twenty-First Century Workforce Commission

Sec. 331. Short title.
Sec. 332. Findings.
Sec. 333. Definitions.
Sec. 334. Establishment of twenty-first century workforce commission.
Sec. 335. Duties of the commission.
Sec. 336. Powers of the commission.
Sec. 337. Commission personnel matters.
Sec. 338. Termination of the commission.
Sec. 339. Authorization of appropriations.

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

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

             TITLE IV--REHABILITATION ACT AMENDMENTS OF 1998

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

                       TITLE V--GENERAL PROVISIONS

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

                 TITLE I--WORKFORCE INVESTMENT SYSTEMS

              Subtitle A--Workforce Investment Definitions

SEC. 101. DEFINITIONS.

    In this title:
            (1) Adult.--Except in sections 127 and 132, the 
        term ``adult'' means an individual who is age 18 or 
        older.
            (2) Adult education; adult education and literacy 
        activities.--The terms ``adult education'' and ``adult 
        education and literacy activities'' have the meanings 
        given the terms in section 203.
            (3) Area vocational education school.--The term 
        ``area vocational education school'' has the meaning 
        given the term in section 521 of the Carl D. Perkins 
        Vocational and Applied Technology Education Act (20 
        U.S.C. 2471).
            (4) Basic skills deficient.--The term ``basic 
        skills deficient'' means, with respect to an 
        individual, that the individual has English reading, 
        writing, or computing skills at or below the 8th grade 
        level on a generally accepted standardized test or a 
        comparable score on a criterion-referenced test.
            (5) Case management.--The term ``case management'' 
        means the provision of a client-centered approach in 
        the delivery of services, designed--
                    (A) to prepare and coordinate comprehensive 
                employment plans, such as service strategies, 
                for participants to ensure access to necessary 
                workforce investment activities and supportive 
                services, using, where feasible, computer-based 
                technologies; and
                    (B) to provide job and career counseling 
                during program participation and after job 
                placement.
            (6) Chief elected official.--The term ``chief 
        elected official'' means--
                    (A) the chief elected executive officer of 
                a unit of general local government in a local 
                area; and
                    (B) in a case in which a local area 
                includes more than 1 unit of general local 
                government, the individuals designated under 
                the agreement described in section 
                117(c)(1)(B).
            (7) Community-based organization.--The term 
        ``community-based organization'' means a private 
        nonprofit organization that is representative of a 
        community or a significant segment of a community and 
        that has demonstrated expertise and effectiveness in 
        the field of workforce investment.
            (8) Customized training.--The term ``customized 
        training'' means training--
                    (A) that is designed to meet the special 
                requirements of an employer (including a group 
                of employers);
                    (B) that is conducted with a commitment by 
                the employer to employ an individual on 
                successful completion of the training; and
                    (C) for which the employer pays for not 
                less than 50 percent of the cost of the 
                training.
            (9) Dislocated worker.--The term ``dislocated 
        worker'' means an individual who--
                    (A)(i) has been terminated or laid off, or 
                who has received a notice of termination or 
                layoff, from employment;
                    (ii)(I) is eligible for or has exhausted 
                entitlement to unemployment compensation; or
                    (II) has been employed for a duration 
                sufficient to demonstrate, to the appropriate 
                entity at a one-stop center referred to in 
                section 134(c), attachment to the workforce, 
                but is not eligible for unemployment 
                compensation due to insufficient earnings or 
                having performed services for an employer that 
                were not covered under a State unemployment 
                compensation law; and
                    (iii) is unlikely to return to a previous 
                industry or occupation;
                    (B)(i) has been terminated or laid off, or 
                has received a notice of termination or layoff, 
                from employment as a result of any permanent 
                closure of, or any substantial layoff at, a 
                plant, facility, or enterprise;
                    (ii) is employed at a facility at which the 
                employer has made a general announcement that 
                such facility will close within 180 days; or
                    (iii) for purposes of eligibility to 
                receive services other than training services 
                described in section 134(d)(4), intensive 
                services described in section 134(d)(3), or 
                supportive services, is employed at a facility 
                at which the employer has made a general 
                announcement that such facility will close;
                    (C) was self-employed (including employment 
                as a farmer, a rancher, or a fisherman) but is 
                unemployed as a result of general economic 
                conditions in the community in which the 
                individual resides or because of natural 
                disasters; or
                    (D) is a displaced homemaker.
            (10) Displaced homemaker.--The term ``displaced 
        homemaker'' means an individual who has been providing 
        unpaid services to family members in the home and who--
                    (A) has been dependent on the income of 
                another family member but is no longer 
                supported by that income; and
                    (B) is unemployed or underemployed and is 
                experiencing difficulty in obtaining or 
                upgrading employment.
            (11) Economic development agencies.--The term 
        ``economic development agencies'' includes local 
        planning and zoning commissions or boards, community 
        development agencies, and other local agencies and 
        institutions responsible for regulating, promoting, or 
        assisting in local economic development.
            (12) Eligible provider.--The term ``eligible 
        provider'', used with respect to--
                    (A) training services, means a provider who 
                is identified in accordance with section 
                122(e)(3);
                    (B) intensive services, means a provider 
                who is identified or awarded a contract as 
                described in section 134(d)(3)(B);
                    (C) youth activities, means a provider who 
                is awarded a grant or contract in accordance 
                with section 123; or
                    (D) other workforce investment activities, 
                means a public or private entity selected to be 
                responsible for such activities, such as a one-
                stop operator designated or certified under 
                section 121(d).
            (13)  Eligible youth.--Except as provided in 
        subtitles C and D, the term ``eligible youth'' means an 
        individual who--
                    (A) is not less than age 14 and not more 
                than age 21;
                    (B) is a low-income individual; and
                    (C) is an individual who is 1 or more of 
                the following:
                            (i) Deficient in basic literacy 
                        skills.
                            (ii) A school dropout.
                            (iii) Homeless, a runaway, or a 
                        foster child.
                            (iv) Pregnant or a parent.
                            (v) An offender.
                            (vi) An individual who requires 
                        additional assistance to complete an 
                        educational program, or to secure and 
                        hold employment.
            (14) Employment and training activity.--The term 
        ``employment and training activity'' means an activity 
        described in section 134 that is carried out for an 
        adult or dislocated worker.
            (15) Family.--The term ``family'' means two or more 
        persons related by blood, marriage, or decree of court, 
        who are living in a single residence, and are included 
        in one or more of the following categories:
                    (A) A husband, wife, and dependent 
                children.
                    (B) A parent or guardian and dependent 
                children.
                    (C) A husband and wife.
            (16) Governor.--The term ``Governor'' means the 
        chief executive of a State.
            (17) Individual with a disability.--
                    (A) In general.--The term ``individual with 
                a disability'' means an individual with any 
                disability (as defined in section 3 of the 
                Americans with Disabilities Act of 1990 (42 
                U.S.C. 12102)).
                    (B) Individuals with disabilities.--The 
                term ``individuals with disabilities'' means 
                more than 1 individual with a disability.
            (18) Labor market area.--The term ``labor market 
        area'' means an economically integrated geographic area 
        within which individuals can reside and find employment 
        within a reasonable distance or can readily change 
        employment without changing their place of residence. 
        Such an area shall be identified in accordance with 
        criteria used by the Bureau of Labor Statistics of the 
        Department of Labor in defining such areas or similar 
        criteria established by a Governor.
            (19) Literacy.--The term ``literacy'' has the 
        meaning given the term in section 203.
            (20) Local area.--The term ``local area'' means a 
        local workforce investment area designated under 
        section 116.
            (21) Local board.--The term ``local board'' means a 
        local workforce investment board established under 
        section 117.
            (22) Local performance measure.--The term ``local 
        performance measure'' means a performance measure 
        established under section 136(c).
            (23) Local educational agency.--The term ``local 
        educational agency'' has the meaning given the term in 
        section 14101 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 8801).
            (24) Lower living standard income level.--The term 
        ``lower living standard income level'' means that 
        income level (adjusted for regional, metropolitan, 
        urban, and rural differences and family size) 
        determined annually by the Secretary based on the most 
        recent lower living family budget issued by the 
        Secretary.
            (25) Low-income individual.--The term ``low-income 
        individual'' means an individual who--
                    (A) receives, or is a member of a family 
                that receives, cash payments under a Federal, 
                State, or local income-based public assistance 
                program;
                    (B) received an income, or is a member of a 
                family that received a total family income, for 
                the 6-month period prior to application for the 
                program involved (exclusive of unemployment 
                compensation, child support payments, payments 
                described in subparagraph (A), and old-age and 
                survivors insurance benefits received under 
                section 202 of the Social Security Act (42 
                U.S.C. 402)) that, in relation to family size, 
                does not exceed the higher of--
                            (i) the poverty line, for an 
                        equivalent period; or
                            (ii) 70 percent of the lower living 
                        standard income level, for an 
                        equivalent period;
                    (C) is a member of a household that 
                receives (or has been determined within the 6-
                month period prior to application for the 
                program involved to be eligible to receive) 
                food stamps pursuant to the Food Stamp Act of 
                1977 (7 U.S.C. 2011 et seq.);
                    (D) qualifies as a homeless individual, as 
                defined in subsections (a) and (c) of section 
                103 of the Stewart B. McKinney Homeless 
                Assistance Act (42 U.S.C. 11302);
                    (E) is a foster child on behalf of whom 
                State or local government payments are made; or
                    (F) in cases permitted by regulations 
                promulgated by the Secretary of Labor, is an 
                individual with a disability whose own income 
                meets the requirements of a program described 
                in subparagraph (A) or of subparagraph (B), but 
                who is a member of a family whose income does 
                not meet such requirements.
            (26) Nontraditional employment.--The term 
        ``nontraditional employment'' refers to occupations or 
        fields of work for which individuals from one gender 
        comprise less than 25 percent of the individuals 
        employed in each such occupation or field of work.
            (27) Offender.--The term ``offender'' means any 
        adult or juvenile--
                    (A) who is or has been subject to any stage 
                of the criminal justice process, for whom 
                services under this Act may be beneficial; or
                    (B) who requires assistance in overcoming 
                artificial barriers to employment resulting 
                from a record of arrest or conviction.
            (28) Older individual.--The term ``older 
        individual'' means an individual age 55 or older.
            (29) One-stop operator.--The term ``one-stop 
        operator'' means 1 or more entities designated or 
        certified under section 121(d).
            (30) One-stop partner.--The term ``one-stop 
        partner'' means--
                    (A) an entity described in section 
                121(b)(1); and
                    (B) an entity described in section 
                121(b)(2) that is participating, with the 
                approval of the local board and chief elected 
                official, in the operation of a one-stop 
                delivery system.
            (31) On-the-job training.--The term ``on-the-job 
        training'' means training by an employer that is 
        provided to a paid participant while engaged in 
        productive work in a job that--
                    (A) provides knowledge or skills essential 
                to the full and adequate performance of the 
                job;
                    (B) provides reimbursement to the employer 
                of up to 50 percent of the wage rate of the 
                participant, for the extraordinary costs of 
                providing the training and additional 
                supervision related to the training; and
                    (C) is limited in duration as appropriate 
                to the occupation for which the participant is 
                being trained, taking into account the content 
                of the training, the prior work experience of 
                the participant, and the service strategy of 
                the participant, as appropriate.
            (32) Outlying area.--The term ``outlying area'' 
        means the United States Virgin Islands, Guam, American 
        Samoa, the Commonwealth of the Northern Mariana 
        Islands, the Republic of the Marshall Islands, the 
        Federated States of Micronesia, and the Republic of 
        Palau.
            (33) Out-of-school youth.--The term ``out-of-school 
        youth'' means--
                    (A) an eligible youth who is a school 
                dropout; or
                    (B) an eligible youth who has received a 
                secondary school diploma or its equivalent but 
                is basic skills deficient, unemployed, or 
                underemployed.
            (34) Participant.--The term ``participant'' means 
        an individual who has been determined to be eligible to 
        participate in and who is receiving services (except 
        followup services authorized under this title) under a 
        program authorized by this title. Participation shall 
        be deemed to commence on the first day, following 
        determination of eligibility, on which the individual 
        began receiving subsidized employment, training, or 
        other services provided under this title.
            (35) Postsecondary educational institution.--The 
        term ``postsecondary educational institution'' means an 
        institution of higher education, as defined in section 
        481 of the Higher Education Act of 1965 (20 U.S.C. 
        1088).
            (36) Poverty line.--The term ``poverty line'' means 
        the poverty line (as defined by the Office of 
        Management and Budget, and revised annually in 
        accordance with section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2))) 
        applicable to a family of the size involved.
            (37) Public assistance.--The term ``public 
        assistance'' means Federal, State, or local government 
        cash payments for which eligibility is determined by a 
        needs or income test.
            (38) Rapid response activity.--The term ``rapid 
        response activity'' means an activity provided by a 
        State, or by an entity designated by a State, with 
        funds provided by the State under section 134(a)(1)(A), 
        in the case of a permanent closure or mass layoff at a 
        plant, facility, or enterprise, or a natural or other 
        disaster, that results in mass job dislocation, in 
        order to assist dislocated workers in obtaining 
        reemployment as soon as possible, with services 
        including--
                    (A) the establishment of onsite contact 
                with employers and employee representatives--
                            (i) immediately after the State is 
                        notified of a current or projected 
                        permanent closure or mass layoff; or
                            (ii) in the case of a disaster, 
                        immediately after the State is made 
                        aware of mass job dislocation as a 
                        result of such disaster;
                    (B) the provision of information and access 
                to available employment and training 
                activities;
                    (C) assistance in establishing a labor-
                management committee, voluntarily agreed to by 
                labor and management, with the ability to 
                devise and implement a strategy for assessing 
                the employment and training needs of dislocated 
                workers and obtaining services to meet such 
                needs;
                    (D) the provision of emergency assistance 
                adapted to the particular closure, layoff, or 
                disaster; and
                    (E) the provision of assistance to the 
                local community in developing a coordinated 
                response and in obtaining access to State 
                economic development assistance.
            (39) School dropout.--The term ``school dropout'' 
        means an individual who is no longer attending any 
        school and who has not received a secondary school 
        diploma or its recognized equivalent.
            (40) Secondary school.--The term ``secondary 
        school'' has the meaning given the term in section 
        14101 of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 8801).
            (41) Secretary.--The term ``Secretary'' means the 
        Secretary of Labor, and the term means such Secretary 
        for purposes of section 503.
            (42) State.--The term ``State'' means each of the 
        several States of the United States, the District of 
        Columbia, and the Commonwealth of Puerto Rico.
            (43) State adjusted level of performance.--The term 
        ``State adjusted level of performance'' means a level 
        described in clause (iii) or (v) of section 
        136(b)(3)(A).
            (44) State board.--The term ``State board'' means a 
        State workforce investment board established under 
        section 111.
            (45) State performance measure.--The term ``State 
        performance measure'' means a performance measure 
        established under section 136(b).
            (46) Supportive services.--The term ``supportive 
        services'' means services such as transportation, child 
        care, dependent care, housing, and needs-related 
        payments, that are necessary to enable an individual to 
        participate in activities authorized under this title, 
        consistent with the provisions of this title.
            (47) Unemployed individual.--The term ``unemployed 
        individual'' means an individual who is without a job 
        and who wants and is available for work. The 
        determination of whether an individual is without a job 
        shall be made in accordance with the criteria used by 
        the Bureau of Labor Statistics of the Department of 
        Labor in defining individuals as unemployed.
            (48) Unit of general local government.--The term 
        ``unit of general local government'' means any general 
        purpose political subdivision of a State that has the 
        power to levy taxes and spend funds, as well as general 
        corporate and police powers.
            (49) Veteran; related definition.--
                    (A) Veteran.--The term ``veteran'' means an 
                individual who served in the active military, 
                naval, or air service, and who was discharged 
                or released from such service under conditions 
                other than dishonorable.
                    (B) Recently separated veteran.--The term 
                ``recently separated veteran'' means any 
                veteran who applies for participation under 
                this title within 48 months after the discharge 
                or release from active military, naval, or air 
                service.
            (50) Vocational education.--The term ``vocational 
        education'' has the meaning given the term in section 
        521 of the Carl D. Perkins Vocational and Applied 
        Technology Education Act (20 U.S.C. 2471).
            (51) Workforce investment activity.--The term 
        ``workforce investment activity'' means an employment 
        and training activity, and a youth activity.
            (52) Youth activity.--The term ``youth activity'' 
        means an activity described in section 129 that is 
        carried out for eligible youth (or as described in 
        section 129(c)(5)).
            (53) Youth council.--The term ``youth council'' 
        means a council established under section 117(h).

      Subtitle B--Statewide and Local Workforce Investment Systems

SEC. 106. PURPOSE.

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

                      CHAPTER 1--STATE PROVISIONS

SEC. 111. STATE WORKFORCE INVESTMENT BOARDS.

    (a) In General.--The Governor of a State shall establish a 
State workforce investment board to assist in the development 
of the State plan described in section 112 and to carry out the 
other functions described in subsection (d).
    (b) Membership.--
            (1) In general.--The State Board shall include--
                    (A) the Governor;
                    (B) 2 members of each chamber of the State 
                legislature, appointed by the appropriate 
                presiding officers of each such chamber; and
                    (C) representatives appointed by the 
                Governor, who are--
                            (i) representatives of business in 
                        the State, who--
                                    (I) are owners of 
                                businesses, chief executives or 
                                operating officers of 
                                businesses, and other business 
                                executives or employers with 
                                optimum policymaking or hiring 
                                authority, including members of 
                                local boards described in 
                                section 117(b)(2)(A)(i);
                                    (II) represent businesses 
                                with employment opportunities 
                                that reflect the employment 
                                opportunities of the State; and
                                    (III) are appointed from 
                                among individuals nominated by 
                                State business organizations 
                                and business trade 
                                associations;
                            (ii) chief elected officials 
                        (representing both cities and counties, 
                        where appropriate);
                            (iii) representatives of labor 
                        organizations, who have been nominated 
                        by State labor federations;
                            (iv) representatives of individuals 
                        and organizations that have experience 
                        with respect to youth activities;
                            (v) representatives of individuals 
                        and organizations that have experience 
                        and expertise in the delivery of 
                        workforce investment activities, 
                        including chief executive officers of 
                        community colleges and community-based 
                        organizations within the State;
                            (vi)(I) the lead State agency 
                        officials with responsibility for the 
                        programs and activities that are 
                        described in section 121(b) and carried 
                        out by one-stop partners; and
                            (II) in any case in which no lead 
                        State agency official has 
                        responsibility for such a program, 
                        service, or activity, a representative 
                        in the State with expertise relating to 
                        such program, service, or activity; and
                            (vii) such other representatives 
                        and State agency officials as the 
                        Governor may designate, such as the 
                        State agency officials responsible for 
                        economic development and juvenile 
                        justice programs in the State.
            (2) Authority and regional representation of board 
        members.--Members of the board that represent 
        organizations, agencies, or other entities shall be 
        individuals with optimum policymaking authority within 
        the organizations, agencies, or entities. The members 
        of the board shall represent diverse regions of the 
        State, including urban, rural, and suburban areas.
            (3) Majority.--A majority of the members of the 
        State Board shall be representatives described in 
        paragraph (1)(C)(i).
    (c) Chairman.--The Governor shall select a chairperson for 
the State Board from among the representatives described in 
subsection (b)(1)(C)(i).
    (d) Functions.--The State Board shall assist the Governor 
in--
            (1) development of the State plan;
            (2) development and continuous improvement of a 
        statewide system of activities that are funded under 
        this subtitle or carried out through a one-stop 
        delivery system described in section 134(c) that 
        receives funds under this subtitle (referred to in this 
        title as a ``statewide workforce investment system''), 
        including--
                    (A) development of linkages in order to 
                assure coordination and nonduplication among 
                the programs and activities described in 
                section 121(b); and
                    (B) review of local plans;
            (3) commenting at least once annually on the 
        measures taken pursuant to section 113(b)(14) of the 
        Carl D. Perkins Vocational and Applied Technology 
        Education Act (20 U.S.C 2323(b)(14));
            (4) designation of local areas as required in 
        section 116;
            (5) development of allocation formulas for the 
        distribution of funds for adult employment and training 
        activities and youth activities to local areas as 
        permitted under sections 128(b)(3)(B) and 133(b)(3)(B);
            (6) development and continuous improvement of 
        comprehensive State performance measures, including 
        State adjusted levels of performance, to assess the 
        effectiveness of the workforce investment activities in 
        the State as required under section 136(b);
            (7) preparation of the annual report to the 
        Secretary described in section 136(d);
            (8) development of the statewide employment 
        statistics system described in section 15(e) of the 
        Wagner-Peyser Act; and
            (9) development of an application for an incentive 
        grant under section 503.
    (e) Alternative Entity.--
            (1) In general.--For purposes of complying with 
        subsections (a), (b), and (c), a State may use any 
        State entity (including a State council, State 
        workforce development board, combination of regional 
        workforce development boards, or similar entity) that--
                    (A) was in existence on December 31, 1997;
                    (B)(i) was established pursuant to section 
                122 or title VII of the Job Training 
                Partnership Act, as in effect on December 31, 
                1997; or
                    (ii) is substantially similar to the State 
                board described in subsections (a), (b), and 
                (c); and
                    (C) includes representatives of business in 
                the State and representatives of labor 
                organizations in the State.
            (2) References.--References in this Act to a State 
        board shall be considered to include such an entity.
    (f) Conflict of Interest.--A member of a State board may 
not--
            (1) vote on a matter under consideration by the 
        State board--
                    (A) regarding the provision of services by 
                such member (or by an entity that such member 
                represents); or
                    (B) that would provide direct financial 
                benefit to such member or the immediate family 
                of such member; or
            (2) engage in any other activity determined by the 
        Governor to constitute a conflict of interest as 
        specified in the State plan.
    (g) Sunshine Provision.--The State board shall make 
available to the public, on a regular basis through open 
meetings, information regarding the activities of the State 
board, including information regarding the State plan prior to 
submission of the plan, information regarding membership, and, 
on request, minutes of formal meetings of the State board.

SEC. 112. STATE PLAN.

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

                      CHAPTER 2--LOCAL PROVISIONS

SEC. 116. LOCAL WORKFORCE INVESTMENT AREAS.

    (a) Designation of Areas.--
            (1) In general.--
                    (A) Process.--Except as provided in 
                subsection (b), and consistent with paragraphs 
                (2), (3), and (4), in order for a State to 
                receive an allotment under section 127 or 132, 
                the Governor of the State shall designate local 
                workforce investment areas within the State--
                            (i) through consultation with the 
                        State board; and
                            (ii) after consultation with chief 
                        elected officials and after 
                        consideration of comments received 
                        through the public comment process as 
                        described in section 112(b)(9).
                    (B) Considerations.--In making the 
                designation of local areas, the Governor shall 
                take into consideration the following:
                            (i) Geographic areas served by 
                        local educational agencies and 
                        intermediate educational agencies.
                            (ii) Geographic areas served by 
                        postsecondary educational institutions 
                        and area vocational education schools.
                            (iii) The extent to which such 
                        local areas are consistent with labor 
                        market areas.
                            (iv) The distance that individuals 
                        will need to travel to receive services 
                        provided in such local areas.
                            (v) The resources of such local 
                        areas that are available to effectively 
                        administer the activities carried out 
                        under this subtitle.
            (2) Automatic designation.--The Governor shall 
        approve any request for designation as a local area--
                    (A) from any unit of general local 
                government with a population of 500,000 or 
                more;
                    (B) of the area served by a rural 
                concentrated employment program grant recipient 
                of demonstrated effectiveness that served as a 
                service delivery area or substate area under 
                the Job Training Partnership Act, if the grant 
                recipient has submitted the request; and
                    (C) of an area that served as a service 
                delivery area under section 101(a)(4)(A)(ii) of 
                the Job Training Partnership Act (as in effect 
                on the day before the date of enactment of this 
                Act) in a State that has a population of not 
                more than 1,100,000 and a population density 
                greater than 900 persons per square mile.
            (3) Temporary and subsequent designation.--
                    (A) Criteria.--Notwithstanding paragraph 
                (2)(A), the Governor shall approve any request, 
                made not later than the date of submission of 
                the initial State plan under this subtitle, for 
                temporary designation as a local area from any 
                unit of general local government (including a 
                combination of such units) with a population of 
                200,000 or more that was a service delivery 
                area under the Job Training Partnership Act on 
                the day before the date of enactment of this 
                Act if the Governor determines that the area--
                            (i) performed successfully, in each 
                        of the last 2 years prior to the 
                        request for which data are available, 
                        in the delivery of services to 
                        participants under part A of title II 
                        and title III of the Job Training 
                        Partnership Act (as in effect on such 
                        day); and
                            (ii) has sustained the fiscal 
                        integrity of the funds used by the area 
                        to carry out activities under such part 
                        and title.
                    (B) Duration and subsequent designation.--A 
                temporary designation under this paragraph 
                shall be for a period of not more than 2 years, 
                after which the designation shall be extended 
                until the end of the period covered by the 
                State plan if the Governor determines that, 
                during the temporary designation period, the 
                area substantially met (as defined by the State 
                board) the local performance measures for the 
                local area and sustained the fiscal integrity 
                of the funds used by the area to carry out 
                activities under this subtitle.
                    (C) Technical assistance.--The Secretary 
                shall provide the States with technical 
                assistance in making the determinations 
                required by this paragraph. The Secretary shall 
                not issue regulations governing determinations 
                to be made under this paragraph.
                    (D) Performed successfully.--In this 
                paragraph, the term ``performed successfully'' 
                means that the area involved met or exceeded 
                the performance standards for activities 
                administered in the area that--
                            (i) are established by the 
                        Secretary for each year and modified by 
                        the adjustment methodology of the State 
                        (used to account for differences in 
                        economic conditions, participant 
                        characteristics, and combination of 
                        services provided from the combination 
                        assumed for purposes of the established 
                        standards of the Secretary); and
                            (ii)(I) if the area was designated 
                        as both a service delivery area and a 
                        substate area under the Job Training 
                        Partnership Act (as in effect on the 
                        day before the date of enactment of 
                        this Act)--
                                    (aa) relate to job 
                                retention and earnings, with 
                                respect to activities carried 
                                out under part A of title II of 
                                such Act (as in effect on such 
                                day); or
                                    (bb) relate to entry into 
                                employment, with respect to 
                                activities carried out under 
                                title III of such Act (as in 
                                effect on such day);
                            (II) if the area was designated 
                        only as a service delivery area under 
                        such Act (as in effect on such day), 
                        relate to the standards described in 
                        subclause (I)(aa); or
                            (III) if the area was only 
                        designated as a substate area under 
                        such Act (as in effect on such day), 
                        relate to the standards described in 
                        subclause (I)(bb) .
                    (E) Sustained the fiscal integrity.--In 
                this paragraph, the term ``sustained the fiscal 
                integrity'', used with respect to funds used by 
                a service delivery area or local area, means 
                that the Secretary has not made a final 
                determination during any of the last 3 years 
                for which data are available, prior to the date 
                of the designation request involved, that 
                either the grant recipient or the 
                administrative entity of the area misexpended 
                the funds due to willful disregard of the 
                requirements of the Act involved, gross 
                negligence, or failure to observe accepted 
                standards of administration.
            (4) Designation on recommendation of state board.--
        The Governor may approve a request from any unit of 
        general local government (including a combination of 
        such units) for designation (including temporary 
        designation) as a local area if the State board 
        determines, taking into account the factors described 
        in clauses (i) through (v) of paragraph (1)(B), and 
        recommends to the Governor, that such area should be so 
        designated.
            (5) Appeals.--A unit of general local government 
        (including a combination of such units) or grant 
        recipient that requests but is not granted designation 
        of an area as a local area under paragraph (2) or (3) 
        may submit an appeal to the State board under an appeal 
        process established in the State plan. If the appeal 
        does not result in such a designation, the Secretary, 
        after receiving a request for review from the unit or 
        grant recipient and on determining that the unit or 
        grant recipient was not accorded procedural rights 
        under the appeal process established in the State plan 
        or that the area meets the requirements of paragraph 
        (2) or (3), as appropriate, may require that the area 
        be designated as a local area under such paragraph.
    (b) Small States.--The Governor of any State that was a 
single State service delivery area under the Job Training 
Partnership Act as of July 1, 1998, may designate the State as 
a single State local area for the purposes of this title. In 
the case of such a designation, the Governor shall identify the 
State as a local area under section 112(b)(5).
    (c) Regional Planning and Cooperation.--
            (1) Planning.--As part of the process for 
        developing the State plan, a State may require regional 
        planning by local boards for a designated region in the 
        State. The State may require the local boards for a 
        designated region to participate in a regional planning 
        process that results in the establishment of regional 
        performance measures for workforce investment 
        activities authorized under this subtitle. The State 
        may award regional incentive grants to the designated 
        regions that meet or exceed the regional performance 
        measures.
            (2) Information sharing.--The State may require the 
        local boards for a designated region to share, in 
        feasible cases, employment statistics, information 
        about employment opportunities and trends, and other 
        types of information that would assist in improving the 
        performance of all local areas in the designated region 
        on local performance measures.
            (3) Coordination of services.--The State may 
        require the local boards for a designated region to 
        coordinate the provision of workforce investment 
        activities authorized under this subtitle, including 
        the provision of transportation and other supportive 
        services, so that services provided through the 
        activities may be provided across the boundaries of 
        local areas within the designated region.
            (4) Interstate regions.--Two or more States that 
        contain an interstate region that is a labor market 
        area, economic development region, or other appropriate 
        contiguous subarea of the States may designate the area 
        as a designated region for purposes of this subsection, 
        and jointly exercise the State functions described in 
        paragraphs (1) through (3).
            (5) Definitions.--In this subsection:
                    (A) Designated region.--The term 
                ``designated region'' means a combination of 
                local areas that are partly or completely in a 
                single labor market area, economic development 
                region, or other appropriate contiguous subarea 
                of a State, that is designated by the State, 
                except as provided in paragraph (4).
                    (B) Local board for a designated region.--
                The term ``local board for a designated 
                region'' means a local board for a local area 
                in a designated region.

SEC. 117. LOCAL WORKFORCE INVESTMENT BOARDS.

    (a) Establishment.--There shall be established in each 
local area of a State, and certified by the Governor of the 
State, a local workforce investment board, to set policy for 
the portion of the statewide workforce investment system within 
the local area (referred to in this title as a ``local 
workforce investment system'').
    (b) Membership.--
            (1) State criteria.--The Governor of the State, in 
        partnership with the State board, shall establish 
        criteria for use by chief elected officials in the 
        local areas for appointment of members of the local 
        boards in such local areas in accordance with the 
        requirements of paragraph (2).
            (2) Composition.--Such criteria shall require, at a 
        minimum, that the membership of each local board--
                    (A) shall include--
                            (i) representatives of business in 
                        the local area, who--
                                    (I) are owners of 
                                businesses, chief executives or 
                                operating officers of 
                                businesses, and other business 
                                executives or employers with 
                                optimum policymaking or hiring 
                                authority;
                                    (II) represent businesses 
                                with employment opportunities 
                                that reflect the employment 
                                opportunities of the local 
                                area; and
                                    (III) are appointed from 
                                among individuals nominated by 
                                local business organizations 
                                and business trade 
                                associations;
                            (ii) representatives of local 
                        educational entities, including 
                        representatives of local educational 
                        agencies, local school boards, entities 
                        providing adult education and literacy 
                        activities, and postsecondary 
                        educational institutions (including 
                        representatives of community colleges, 
                        where such entities exist), selected 
                        from among individuals nominated by 
                        regional or local educational agencies, 
                        institutions, or organizations 
                        representing such local educational 
                        entities;
                            (iii) representatives of labor 
                        organizations (for a local area in 
                        which employees are represented by 
                        labor organizations), nominated by 
                        local labor federations, or (for a 
                        local area in which no employees are 
                        represented by such organizations), 
                        other representatives of employees;
                            (iv) representatives of community-
                        based organizations (including 
                        organizations representing individuals 
                        with disabilities and veterans, for a 
                        local area in which such organizations 
                        are present);
                            (v) representatives of economic 
                        development agencies, including private 
                        sector economic development entities; 
                        and
                            (vi) representatives of each of the 
                        one-stop partners; and
                    (B) may include such other individuals or 
                representatives of entities as the chief 
                elected official in the local area may 
                determine to be appropriate.
            (3) Authority of board members.--Members of the 
        board that represent organizations, agencies, or other 
        entities shall be individuals with optimum policymaking 
        authority within the organizations, agencies, or 
        entities.
            (4) Majority.--A majority of the members of the 
        local board shall be representatives described in 
        paragraph (2)(A)(i).
            (5) Chairperson.--The local board shall elect a 
        chairperson for the local board from among the 
        representatives described in paragraph (2)(A)(i).
    (c) Appointment and Certification of Board.--
            (1) Appointment of board members and assignment of 
        responsibilities.--
                    (A) In general.--The chief elected official 
                in a local area is authorized to appoint the 
                members of the local board for such area, in 
                accordance with the State criteria established 
                under subsection (b).
                    (B) Multiple units of local government in 
                area.--
                            (i) In general.--In a case in which 
                        a local area includes more than 1 unit 
                        of general local government, the chief 
                        elected officials of such units may 
                        execute an agreement that specifies the 
                        respective roles of the individual 
                        chief elected officials--
                                    (I) in the appointment of 
                                the members of the local board 
                                from the individuals nominated 
                                or recommended to be such 
                                members in accordance with the 
                                criteria established under 
                                subsection (b); and
                                    (II) in carrying out any 
                                other responsibilities assigned 
                                to such officials under this 
                                subtitle.
                            (ii) Lack of agreement.--If, after 
                        a reasonable effort, the chief elected 
                        officials are unable to reach agreement 
                        as provided under clause (i), the 
                        Governor may appoint the members of the 
                        local board from individuals so 
                        nominated or recommended.
                    (C) Concentrated employment programs.--In 
                the case of a local area designated in 
                accordance with section 116(a)(2)(B), the 
                governing body of the concentrated employment 
                program involved shall act in consultation with 
                the chief elected official in the local area to 
                appoint members of the local board, in 
                accordance with the State criteria established 
                under subsection (b), and to carry out any 
                other responsibility relating to workforce 
                investment activities assigned to such official 
                under this Act.
            (2) Certification.--
                    (A) In general.--The Governor shall, once 
                every 2 years, certify 1 local board for each 
                local area in the State.
                    (B) Criteria.--Such certification shall be 
                based on criteria established under subsection 
                (b) and, for a second or subsequent 
                certification, the extent to which the local 
                board has ensured that workforce investment 
                activities carried out in the local area have 
                enabled the local area to meet the local 
                performance measures.
                    (C) Failure to achieve certification.--
                Failure of a local board to achieve 
                certification shall result in reappointment and 
                certification of another local board for the 
                local area pursuant to the process described in 
                paragraph (1) and this paragraph.
            (3) Decertification.--
                    (A) Fraud, abuse, failure to carry out 
                functions.--Notwithstanding paragraph (2), the 
                Governor may decertify a local board, at any 
                time after providing notice and an opportunity 
                for comment, for--
                            (i) fraud or abuse; or
                            (ii) failure to carry out the 
                        functions specified for the local board 
                        in any of paragraphs (1) through (7) of 
                        subsection (d).
                    (B) Nonperformance.--Notwithstanding 
                paragraph (2), the Governor may decertify a 
                local board if a local area fails to meet the 
                local performance measures for such local area 
                for 2 consecutive program years (in accordance 
                with section 136(h)).
                    (C) Plan.--If the Governor decertifies a 
                local board for a local area under subparagraph 
                (A) or (B), the Governor may require that a new 
                local board be appointed and certified for the 
                local area pursuant to a reorganization plan 
                developed by the Governor, in consultation with 
                the chief elected official in the local area, 
                and in accordance with the criteria established 
                under subsection (b).
            (4) Single state area.--Notwithstanding subsection 
        (b) and paragraphs (1) and (2), if a State described in 
        section 116(b) indicates in the State plan that the 
        State will be treated as a local area for purposes of 
        the application of this title, the Governor may 
        designate the State board to carry out any of the 
        functions described in subsection (d).
    (d) Functions of Local Board.--The functions of the local 
board shall include the following:
            (1) Local plan.--Consistent with section 118, each 
        local board, in partnership with the chief elected 
        official for the local area involved, shall develop and 
        submit a local plan to the Governor.
            (2) Selection of operators and providers.--
                    (A) Selection of one-stop operators.--
                Consistent with section 121(d), the local 
                board, with the agreement of the chief elected 
                official--
                            (i) shall designate or certify one-
                        stop operators as described in section 
                        121(d)(2)(A); and
                            (ii) may terminate for cause the 
                        eligibility of such operators.
                    (B) Selection of youth providers.--
                Consistent with section 123, the local board 
                shall identify eligible providers of youth 
                activities in the local area by awarding grants 
                or contracts on a competitive basis, based on 
                the recommendations of the youth council.
                    (C) Identification of eligible providers of 
                training services.--Consistent with section 
                122, the local board shall identify eligible 
                providers of training services described in 
                section 134(d)(4) in the local area.
                    (D) Identification of eligible providers of 
                intensive services.--If the one-stop operator 
                does not provide intensive services in a local 
                area, the local board shall identify eligible 
                providers of intensive services described in 
                section 134(d)(3) in the local area by awarding 
                contracts.
            (3) Budget and administration.--
                    (A) Budget.--The local board shall develop 
                a budget for the purpose of carrying out the 
                duties of the local board under this section, 
                subject to the approval of the chief elected 
                official.
                    (B) Administration.--
                            (i) Grant recipient.--
                                    (I) In general.--The chief 
                                elected official in a local 
                                area shall serve as the local 
                                grant recipient for, and shall 
                                be liable for any misuse of, 
                                the grant funds allocated to 
                                the local area under sections 
                                128 and 133, unless the chief 
                                elected official reaches an 
                                agreement with the Governor for 
                                the Governor to act as the 
                                local grant recipient and bear 
                                such liability.
                                    (II) Designation.--In order 
                                to assist in the administration 
                                of the grant funds, the chief 
                                elected official or the 
                                Governor, where the Governor 
                                serves as the local grant 
                                recipient for a local area, may 
                                designate an entity to serve as 
                                a local grant subrecipient for 
                                such funds or as a local fiscal 
                                agent. Such designation shall 
                                not relieve the chief elected 
                                official or the Governor of the 
                                liability for any misuse of 
                                grant funds as described in 
                                subclause (I).
                                    (III) Disbursal.--The local 
                                grant recipient or an entity 
                                designated under subclause (II) 
                                shall disburse such funds for 
                                workforce investment activities 
                                at the direction of the local 
                                board, pursuant to the 
                                requirements of this title, if 
                                the direction does not violate 
                                a provision of this Act. The 
                                local grant recipient or entity 
                                designated under subclause (II) 
                                shall disburse the funds 
                                immediately on receiving such 
                                direction from the local board.
                            (ii) Staff.--The local board may 
                        employ staff.
                            (iii) Grants and donations.--The 
                        local board may solicit and accept 
                        grants and donations from sources other 
                        than Federal funds made available under 
                        this Act.
            (4) Program oversight.--The local board, in 
        partnership with the chief elected official, shall 
        conduct oversight with respect to local programs of 
        youth activities authorized under section 129, local 
        employment and training activities authorized under 
        section 134, and the one-stop delivery system in the 
        local area.
            (5) Negotiation of local performance measures.--The 
        local board, the chief elected official, and the 
        Governor shall negotiate and reach agreement on local 
        performance measures as described in section 136(c).
            (6) Employment statistics system.--The local board 
        shall assist the Governor in developing the statewide 
        employment statistics system described in section 15(e) 
        of the Wagner-Peyser Act.
            (7) Employer linkages.--The local board shall 
        coordinate the workforce investment activities 
        authorized under this subtitle and carried out in the 
        local area with economic development strategies and 
        develop other employer linkages with such activities.
            (8) Connecting, brokering, and coaching.--The local 
        board shall promote the participation of private sector 
        employers in the statewide workforce investment system 
        and ensure the effective provision, through the system, 
        of connecting, brokering, and coaching activities, 
        through intermediaries such as the one-stop operator in 
        the local area or through other organizations, to 
        assist such employers in meeting hiring needs.
    (e) Sunshine Provision.--The local board shall make 
available to the public, on a regular basis through open 
meetings, information regarding the activities of the local 
board, including information regarding the local plan prior to 
submission of the plan, and regarding membership, the 
designation and certification of one-stop operators, and the 
award of grants or contracts to eligible providers of youth 
activities, and on request, minutes of formal meetings of the 
local board.
    (f) Limitations.--
            (1) Training services.--
                    (A) In general.--Except as provided in 
                subparagraph (B), no local board may provide 
                training services described in section 
                134(d)(4).
                    (B) Waivers of training prohibition.--The 
                Governor of the State in which a local board is 
                located may, pursuant to a request from the 
                local board, grant a written waiver of the 
                prohibition set forth in subparagraph (A) 
                (relating to the provision of training 
                services) for a program of training services, 
                if the local board--
                            (i) submits to the Governor a 
                        proposed request for the waiver that 
                        includes--
                                    (I) satisfactory evidence 
                                that there is an insufficient 
                                number of eligible providers of 
                                such a program of training 
                                services to meet local demand 
                                in the local area;
                                    (II) information 
                                demonstrating that the board 
                                meets the requirements for an 
                                eligible provider of training 
                                services under section 122; and
                                    (III) information 
                                demonstrating that the program 
                                of training services prepares 
                                participants for an occupation 
                                that is in demand in the local 
                                area;
                            (ii) makes the proposed request 
                        available to eligible providers of 
                        training services and other interested 
                        members of the public for a public 
                        comment period of not less than 30 
                        days; and
                            (iii) includes, in the final 
                        request for the waiver, the evidence 
                        and information described in clause (i) 
                        and the comments received pursuant to 
                        clause (ii).
                    (C) Duration.--A waiver granted to a local 
                board under subparagraph (B) shall apply for a 
                period of not to exceed 1 year. The waiver may 
                be renewed for additional periods of not to 
                exceed 1 year, pursuant to requests from the 
                local board, if the board meets the 
                requirements of subparagraph (B) in making the 
                requests.
                    (D) Revocation.--The Governor may revoke a 
                waiver granted under this paragraph during the 
                appropriate period described in subparagraph 
                (C) if the State determines that the local 
                board involved has engaged in a pattern of 
                inappropriate referrals to training services 
                operated by the local board.
            (2) Core services; intensive services; designation 
        or certification as one-stop operators.--A local board 
        may provide core services described in section 
        134(d)(2) or intensive services described in section 
        134(d)(3) through a one-stop delivery system described 
        in section 134(c) or be designated or certified as a 
        one-stop operator only with the agreement of the chief 
        elected official and the Governor.
            (3) Limitation on authority.--Nothing in this Act 
        shall be construed to provide a local board with the 
        authority to mandate curricula for schools.
    (g) Conflict of Interest.--A member of a local board may 
not--
            (1) vote on a matter under consideration by the 
        local board--
                    (A) regarding the provision of services by 
                such member (or by an entity that such member 
                represents); or
                    (B) that would provide direct financial 
                benefit to such member or the immediate family 
                of such member; or
            (2) engage in any other activity determined by the 
        Governor to constitute a conflict of interest as 
        specified in the State plan.
    (h) Youth Council.--
            (1) Establishment.--There shall be established, as 
        a subgroup within each local board, a youth council 
        appointed by the local board, in cooperation with the 
        chief elected official for the local area.
            (2) Membership.--The membership of each youth 
        council--
                    (A) shall include--
                            (i) members of the local board 
                        described in subparagraph (A) or (B) of 
                        subsection (b)(2) with special interest 
                        or expertise in youth policy;
                            (ii) representatives of youth 
                        service agencies, including juvenile 
                        justice and local law enforcement 
                        agencies;
                            (iii) representatives of local 
                        public housing authorities;
                            (iv) parents of eligible youth 
                        seeking assistance under this subtitle;
                            (v) individuals, including former 
                        participants, and representatives of 
                        organizations, that have experience 
                        relating to youth activities; and
                            (vi) representatives of the Job 
                        Corps, as appropriate; and
                    (B) may include such other individuals as 
                the chairperson of the local board, in 
                cooperation with the chief elected official, 
                determines to be appropriate.
            (3) Relationship to local board.--Members of the 
        youth council who are not members of the local board 
        described in subparagraphs (A) and (B) of subsection 
        (b)(2) shall be voting members of the youth council and 
        nonvoting members of the board.
            (4) Duties.--The duties of the youth council 
        include--
                    (A) developing the portions of the local 
                plan relating to eligible youth, as determined 
                by the chairperson of the local board;
                    (B) subject to the approval of the local 
                board and consistent with section 123--
                            (i) recommending eligible providers 
                        of youth activities, to be awarded 
                        grants or contracts on a competitive 
                        basis by the local board to carry out 
                        the youth activities; and
                            (ii) conducting oversight with 
                        respect to the eligible providers of 
                        youth activities, in the local area;
                    (C) coordinating youth activities 
                authorized under section 129 in the local area; 
                and
                    (D) other duties determined to be 
                appropriate by the chairperson of the local 
                board.
    (i) Alternative Entity.--
            (1) In general.--For purposes of complying with 
        subsections (a), (b), and (c), and paragraphs (1) and 
        (2) of subsection (h), a State may use any local entity 
        (including a local council, regional workforce 
        development board, or similar entity) that--
                    (A) is established to serve the local area 
                (or the service delivery area that most closely 
                corresponds to the local area);
                    (B) is in existence on December 31, 1997;
                    (C)(i) is established pursuant to section 
                102 of the Job Training Partnership Act, as in 
                effect on December 31, 1997; or
                    (ii) is substantially similar to the local 
                board described in subsections (a), (b), and 
                (c), and paragraphs (1) and (2) of subsection 
                (h);
                    (D) includes--
                            (i) representatives of business in 
                        the local area; and
                            (ii)(I) representatives of labor 
                        organizations (for a local area in 
                        which employees are represented by 
                        labor organizations), nominated by 
                        local labor federations; or
                            (II) (for a local area in which no 
                        employees are represented by such 
                        organizations), other representatives 
                        of employees in the local area.
            (2) References.--References in this Act to a local 
        board or a youth council shall be considered to include 
        such an entity or a subgroup of such an entity, 
        respectively.

SEC. 118. LOCAL PLAN.

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

          CHAPTER 3--WORKFORCE INVESTMENT ACTIVITIES PROVIDERS

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

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

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

    (a) Eligibility Requirements.--
            (1) In general.--Except as provided in subsection 
        (h), to be identified as an eligible provider of 
        training services described in section 134(d)(4) 
        (referred to in this section as ``training services'') 
        in a local area and to be eligible to receive funds 
        made available under section 133(b) for the provision 
        of training services, a provider of such services shall 
        meet the requirements of this section.
            (2) Providers.--Subject to the provisions of this 
        section, to be eligible to receive the funds, the 
        provider shall be--
                    (A) a postsecondary educational institution 
                that--
                            (i) is eligible to receive Federal 
                        funds under title IV of the Higher 
                        Education Act of 1965 (20 U.S.C. 1070 
                        et seq.); and
                            (ii) provides a program that leads 
                        to an associate degree, baccalaureate 
                        degree, or certificate;
                    (B) an entity that carries out programs 
                under the Act of August 16, 1937 (commonly 
                known as the ``National Apprenticeship Act''; 
                50 Stat. 664, chapter 663; 29 U.S.C. 50 et 
                seq.); or
                    (C) another public or private provider of a 
                program of training services.
    (b) Initial Eligibility Determination.--
            (1) Postsecondary educational institutions and 
        entities carrying out apprenticeship programs.--To be 
        initially eligible to receive funds as described in 
        subsection (a) to carry out a program described in 
        subparagraph (A) or (B) of subsection (a)(2), a 
        provider described in subparagraph (A) or (B), 
        respectively, of subsection (a)(2) shall submit an 
        application, to the local board for the local area in 
        which the provider desires to provide training 
        services, at such time, in such manner, and containing 
        such information as the local board may require.
            (2) Other eligible providers.--
                    (A) Procedure.--Each Governor of a State 
                shall establish a procedure for use by local 
                boards in the State in determining the initial 
                eligibility of a provider described in 
                subsection (a)(2)(C) to receive funds as 
                described in subsection (a) for a program of 
                training services, including the initial 
                eligibility of--
                            (i) a postsecondary educational 
                        institution to receive such funds for a 
                        program not described in subsection 
                        (a)(2)(A); and
                            (ii) a provider described in 
                        subsection (a)(2)(B) to receive such 
                        funds for a program not described in 
                        subsection (a)(2)(B).
                    (B) Recommendations.--In developing such 
                procedure, the Governor shall solicit and take 
                into consideration the recommendations of local 
                boards and providers of training services 
                within the State.
                    (C) Opportunity to submit comments.--The 
                Governor shall provide an opportunity, during 
                the development of the procedure, for 
                interested members of the public, including 
                representatives of business and labor 
                organizations, to submit comments on such 
                procedure.
                    (D) Requirements.--In establishing the 
                procedure, the Governor shall require that, to 
                be initially eligible to receive funds as 
                described in subsection (a) for a program, a 
                provider described in subsection (a)(2)(C)--
                            (i) shall submit an application, to 
                        the local board for the local area in 
                        which the provider desires to provide 
                        training services, at such time and in 
                        such manner as may be required, and 
                        containing a description of the 
                        program;
                            (ii) if the provider provides 
                        training services through a program on 
                        the date of application, shall include 
                        in the application an appropriate 
                        portion of the performance information 
                        and program cost information described 
                        in subsection (d) for the program, as 
                        specified in the procedure, and shall 
                        meet appropriate levels of performance 
                        for the program, as specified in the 
                        procedure; and
                            (iii) if the provider does not 
                        provide training services on such date, 
                        shall meet appropriate requirements, as 
                        specified in the procedure.
    (c) Subsequent Eligibility Determination.--
            (1) Procedure.--Each Governor of a State shall 
        establish a procedure for use by local boards in the 
        State in determining the eligibility of a provider 
        described in subsection (a)(2) to continue to receive 
        funds as described in subsection (a) for a program 
        after an initial period of eligibility under subsection 
        (b) (referred to in this section as ``subsequent 
        eligibility'').
            (2) Recommendations.--In developing such procedure, 
        the Governor shall solicit and take into consideration 
        the recommendations of local boards and providers of 
        training services within the State.
            (3) Opportunity to submit comments.--The Governor 
        shall provide an opportunity, during the development of 
        the procedure, for interested members of the public, 
        including representatives of business and labor 
        organizations, to submit comments on such procedure.
            (4) Considerations.--In developing such procedure, 
        the Governor shall ensure that the procedure requires 
        the local boards to take into consideration, in making 
        the determinations of subsequent eligibility--
                    (A) the specific economic, geographic, and 
                demographic factors in the local areas in which 
                providers seeking eligibility are located; and
                    (B) the characteristics of the populations 
                served by providers seeking eligibility, 
                including the demonstrated difficulties in 
                serving such populations, where applicable.
            (5) Requirements.--In establishing the procedure, 
        the Governor shall require that, to be eligible to 
        continue to receive funds as described in subsection 
        (a) for a program after the initial period of 
        eligibility, a provider described in subsection (a)(2) 
        shall--
                    (A) submit the performance information and 
                program cost information described in 
                subsection (d)(1) for the program and any 
                additional information required to be submitted 
                in accordance with subsection (d)(2) for the 
                program annually to the appropriate local board 
                at such time and in such manner as may be 
                required; and
                    (B) annually meet the performance levels 
                described in paragraph (6) for the program, as 
                demonstrated utilizing quarterly records 
                described in section 136, in a manner 
                consistent with section 136.
            (6) Levels of performance.--
                    (A) In general.--At a minimum, the 
                procedure described in paragraph (1) shall 
                require the provider to meet minimum acceptable 
                levels of performance based on the performance 
                information referred to in paragraph (5)(A).
                    (B) Higher levels of performance 
                eligibility.--The local board may require 
                higher levels of performance than the levels 
                referred to in subparagraph (A) for subsequent 
                eligibility to receive funds as described in 
                subsection (a).
    (d) Performance and Cost Information.--
            (1) Required information.--For a provider of 
        training services to be determined to be subsequently 
        eligible under subsection (c) to receive funds as 
        described in subsection (a), such provider shall, under 
        subsection (c), submit--
                    (A) verifiable program-specific performance 
                information consisting of--
                            (i) program information, 
                        including--
                                    (I) the program completion 
                                rates for all individuals 
                                participating in the applicable 
                                program conducted by the 
                                provider;
                                    (II) the percentage of all 
                                individuals participating in 
                                the applicable program who 
                                obtain unsubsidized employment, 
                                which may also include 
                                information specifying the 
                                percentage of the individuals 
                                who obtain unsubsidized 
                                employment in an occupation 
                                related to the program 
                                conducted; and
                                    (III) the wages at 
                                placement in employment of all 
                                individuals participating in 
                                the applicable program; and
                            (ii) training services information 
                        for all participants who received 
                        assistance under section 134 to 
                        participate in the applicable program, 
                        including--
                                    (I) the percentage of 
                                participants who have completed 
                                the applicable program and who 
                                are placed in unsubsidized 
                                employment;
                                    (II) the retention rates in 
                                unsubsidized employment of 
                                participants who have completed 
                                the applicable program, 6 
                                months after the first day of 
                                the employment;
                                    (III) the wages received by 
                                participants who have completed 
                                the applicable program, 6 
                                months after the first day of 
                                the employment involved; and
                                    (IV) where appropriate, the 
                                rates of licensure or 
                                certification, attainment of 
                                academic degrees or 
                                equivalents, or attainment of 
                                other measures of skills, of 
                                the graduates of the applicable 
                                program; and
                    (B) information on program costs (such as 
                tuition and fees) for participants in the 
                applicable program.
            (2) Additional information.--Subject to paragraph 
        (3), in addition to the performance information 
        described in paragraph (1)--
                    (A) the Governor may require that a 
                provider submit, under subsection (c), such 
                other verifiable program-specific performance 
                information as the Governor determines to be 
                appropriate to obtain such subsequent 
                eligibility, which may include information 
                relating to--
                            (i) retention rates in employment 
                        and the subsequent wages of all 
                        individuals who complete the applicable 
                        program;
                            (ii) where appropriate, the rates 
                        of licensure or certification of all 
                        individuals who complete the program; 
                        and
                            (iii) the percentage of individuals 
                        who complete the program who attain 
                        industry-recognized occupational skills 
                        in the subject, occupation, or industry 
                        for which training is provided through 
                        the program, where applicable; and
                    (B) the Governor, or the local board, may 
                require a provider to submit, under subsection 
                (c), other verifiable program-specific 
                performance information to obtain such 
                subsequent eligibility.
            (3) Conditions.--
                    (A) In general.--If the Governor or a local 
                board requests additional information under 
                paragraph (2) that imposes extraordinary costs 
                on providers, or if providers experience 
                extraordinary costs in the collection of 
                information required under paragraph 
                (1)(A)(ii)), the Governor or the local board 
                shall provide access to cost-effective methods 
                for the collection of the information involved, 
                or the Governor shall provide additional 
                resources to assist providers in the collection 
                of such information from funds made available 
                as described in sections 128(a) and 133(a)(1), 
                as appropriate.
                    (B) Higher education eligibility 
                requirements.--The local board and the 
                designated State agency described in subsection 
                (i) may accept program-specific performance 
                information consistent with the requirements 
                for eligibility under title IV of the Higher 
                Education Act of 1965 (20 U.S.C. 1070 et seq.) 
                from a provider for purposes of enabling the 
                provider to fulfill the applicable requirements 
                of this subsection, if such information is 
                substantially similar to the information 
                otherwise required under this subsection.
    (e) Local Identification.--
            (1) In general.--The local board shall place on a 
        list providers submitting an application under 
        subsection (b)(1) and providers determined to be 
        initially eligible under subsection (b)(2), and retain 
        on the list providers determined to be subsequently 
        eligible under subsection (c), to receive funds as 
        described in subsection (a) for the provision of 
        training services in the local area served by the local 
        board. The list of providers shall be accompanied by 
        any performance information and program cost 
        information submitted under subsection (b) or (c) by 
        the provider.
            (2) Submission to state agency.--On placing or 
        retaining a provider on the list, the local board shall 
        submit, to the designated State agency described in 
        subsection (i), the list and the performance 
        information and program cost information referred to in 
        paragraph (1). If the agency determines, within 30 days 
        after the date of the submission, that the provider 
        does not meet the performance levels described in 
        subsection (c)(6) for the program (where applicable), 
        the agency may remove the provider from the list for 
        the program. The agency may not remove from the list an 
        agency submitting an application under subsection 
        (b)(1).
            (3) Identification of eligible providers.--A 
        provider who is placed or retained on the list under 
        paragraph (1), and is not removed by the designated 
        State agency under paragraph (2), for a program, shall 
        be considered to be identified as an eligible provider 
        of training services for the program.
            (4) Availability.--
                    (A) State list.--The designated State 
                agency shall compile a single list of the 
                providers identified under paragraph (3) from 
                all local areas in the State and disseminate 
                such list, and the performance information and 
                program cost information described in paragraph 
                (1), to the one-stop delivery systems within 
                the State. Such list and information shall be 
                made widely available to participants in 
                employment and training activities authorized 
                under section 134 and others through the one-
                stop delivery system.
                    (B) Selection from state list.--Individuals 
                eligible to receive training services under 
                section 134(d)(4) shall have the opportunity to 
                select any of the eligible providers, from any 
                of the local areas in the State, that are 
                included on the list described in subparagraph 
                (A) to provide the services, consistent with 
                the requirements of section 134.
            (5) Acceptance of individual training accounts by 
        other states.--States may enter into agreements, on a 
        reciprocal basis, to permit eligible providers of 
        training services in a State to accept individual 
        training accounts provided in another State.
    (f) Enforcement.--
            (1) Accuracy of information.--If the designated 
        State agency, after consultation with the local board 
        involved, determines that an eligible provider or 
        individual supplying information on behalf of the 
        provider intentionally supplies inaccurate information 
        under this section, the agency shall terminate the 
        eligibility of the provider to receive funds described 
        in subsection (a) for any program for a period of time, 
        but not less than 2 years.
            (2) Noncompliance.--If the designated State agency, 
        or the local board working with the State agency, 
        determines that an eligible provider described in 
        subsection (a) substantially violates any requirement 
        under this Act, the agency, or the local board working 
        with the State agency, may terminate the eligibility of 
        such provider to receive funds described in subsection 
        (a) for the program involved or take such other action 
        as the agency or local board determines to be 
        appropriate.
            (3) Repayment.--A provider whose eligibility is 
        terminated under paragraph (1) or (2) for a program 
        shall be liable for repayment of all funds described in 
        subsection (a) received for the program during any 
        period of noncompliance described in such paragraph.
            (4) Construction.--This subsection and subsection 
        (g) shall be construed to provide remedies and 
        penalties that supplement, but do not supplant, other 
        civil and criminal remedies and penalties.
    (g) Appeal.--The Governor shall establish procedures for 
providers of training services to appeal a denial of 
eligibility by the local board or the designated State agency 
under subsection (b), (c), or (e), a termination of eligibility 
or other action by the board or agency under subsection (f), or 
a denial of eligibility by a one-stop operator under subsection 
(h). Such procedures shall provide an opportunity for a hearing 
and prescribe appropriate time limits to ensure prompt 
resolution of the appeal.
    (h) On-the-Job Training or Customized Training Exception.--
            (1) In general.--Providers of on-the-job training 
        or customized training shall not be subject to the 
        requirements of subsections (a) through (e).
            (2) Collection and dissemination of information.--A 
        one-stop operator in a local area shall collect such 
        performance information from on-the-job training and 
        customized training providers as the Governor may 
        require, determine whether the providers meet such 
        performance criteria as the Governor may require, and 
        disseminate information identifying providers that meet 
        the criteria as eligible providers, and the performance 
        information, through the one-stop delivery system. 
        Providers determined to meet the criteria shall be 
        considered to be identified as eligible providers of 
        training services.
    (i) Administration.--The Governor shall designate a State 
agency to make the determinations described in subsection 
(e)(2), take the enforcement actions described in subsection 
(f), and carry out other duties described in this section.

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

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

                      CHAPTER 4--YOUTH ACTIVITIES

SEC. 126. GENERAL AUTHORIZATION.

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

SEC. 127. STATE ALLOTMENTS.

    (a) In General.--The Secretary shall--
            (1) for each fiscal year in which the amount 
        appropriated under section 137(a) exceeds 
        $1,000,000,000, reserve a portion determined under 
        subsection (b)(1)(A) of the amount appropriated under 
        section 137(a) for use under sections 167 (relating to 
        migrant and seasonal farmworker programs) and 169 
        (relating to youth opportunity grants); and
            (2) use the remainder of the amount appropriated 
        under section 137(a) for a fiscal year to make 
        allotments and grants in accordance with subparagraphs 
        (B) and (C) of subsection (b)(1) and make funds 
        available for use under section 166 (relating to Native 
        American programs).
    (b) Allotment Among States.--
            (1) Youth activities.--
                    (A) Youth opportunity grants.--
                            (i) In general.--For each fiscal 
                        year in which the amount appropriated 
                        under section 137(a) exceeds 
                        $1,000,000,000, the Secretary shall 
                        reserve a portion of the amount to 
                        provide youth opportunity grants and 
                        other activities under section 169 
                        (relating to youth opportunity grants) 
                        and provide youth activities under 
                        section 167 (relating to migrant and 
                        seasonal farmworker programs).
                            (ii) Portion.--The portion referred 
                        to in clause (i) shall equal, for a 
                        fiscal year--
                                    (I) except as provided in 
                                subclause (II), the difference 
                                obtained by subtracting 
                                $1,000,000,000 from the amount 
                                appropriated under section 
                                137(a) for the fiscal year; or
                                    (II) for any fiscal year in 
                                which the amount is 
                                $1,250,000,000 or greater, 
                                $250,000,000.
                            (iii) Youth activities for 
                        farmworkers.--From the portion 
                        described in clause (i) for a fiscal 
                        year, the Secretary shall make 
                        available 4 percent of such portion to 
                        provide youth activities under section 
                        167.
                            (iv) Role model academy project.--
                        From the portion described in clause 
                        (i) for fiscal year 1999, the Secretary 
                        shall make available such sums as the 
                        Secretary determines to be appropriate 
                        to carry out section 169(g).
                    (B) Outlying areas.--
                            (i) In general.--From the amount 
                        made available under subsection (a)(2) 
                        for a fiscal year, the Secretary shall 
                        reserve not more than \1/4\ of 1 
                        percent of the amount appropriated 
                        under section 137(a) for the fiscal 
                        year--
                                    (I) to provide assistance 
                                to the outlying areas to carry 
                                out youth activities and 
                                statewide workforce investment 
                                activities; and
                                    (II) for each of fiscal 
                                years 1999, 2000, and 2001, to 
                                carry out the competition 
                                described in clause (ii), 
                                except that the funds reserved 
                                to carry out such clause for 
                                any such fiscal year shall not 
                                exceed the amount reserved for 
                                the Freely Associated States 
                                for fiscal year 1997, from 
                                amounts reserved under sections 
                                252(a) and 262(a)(1) of the Job 
                                Training Partnership Act (as in 
                                effect on the day before the 
                                date of enactment of this Act).
                            (ii) Limitation for freely 
                        associated states.--
                                    (I) Competitive grants.--
                                The Secretary shall use funds 
                                described in clause (i)(II) to 
                                award grants to Guam, American 
                                Samoa, the Commonwealth of the 
                                Northern Mariana Islands, and 
                                the Freely Associated States to 
                                carry out youth activities and 
                                statewide workforce investment 
                                activities.
                                    (II) Award basis.--The 
                                Secretary shall award grants 
                                pursuant to subclause (I) on a 
                                competitive basis and pursuant 
                                to the recommendations of 
                                experts in the field of 
                                employment and training, 
                                working through the Pacific 
                                Region Educational Laboratory 
                                in Honolulu, Hawaii.
                                    (III) Assistance 
                                requirements.--Any Freely 
                                Associated State that desires 
                                to receive assistance under 
                                this subparagraph shall submit 
                                an application to the Secretary 
                                and shall include in the 
                                application for assistance--
                                            (aa) information 
                                        demonstrating that the 
                                        Freely Associated State 
                                        will meet all 
                                        conditions that apply 
                                        to States under this 
                                        title;
                                            (bb) an assurance 
                                        that, notwithstanding 
                                        any other provision of 
                                        this title, the Freely 
                                        Associated State will 
                                        use such assistance 
                                        only for the direct 
                                        provision of services; 
                                        and
                                            (cc) such other 
                                        information and 
                                        assurances as the 
                                        Secretary may require.
                                    (IV) Termination of 
                                eligibility.--Notwithstanding 
                                any other provision of law, the 
                                Freely Associated States shall 
                                not receive any assistance 
                                under this subparagraph for any 
                                program year that begins after 
                                September 30, 2001.
                                    (V) Administrative costs.--
                                The Secretary may provide not 
                                more than 5 percent of the 
                                funds made available for grants 
                                under subclause (I) to pay the 
                                administrative costs of the 
                                Pacific Region Educational 
                                Laboratory in Honolulu, Hawaii, 
                                regarding activities assisted 
                                under this clause.
                            (iii) Additional requirement.--The 
                        provisions of Public Law 95-134, 
                        permitting the consolidation of grants 
                        by the outlying areas, shall not apply 
                        to assistance provided to those areas, 
                        including the Freely Associated States, 
                        under this subparagraph.
                    (C) States.--
                            (i) In general.--After determining 
                        the amounts to be reserved under 
                        subparagraph (A) (if any) and 
                        subparagraph (B), the Secretary shall--
                                    (I) from the amount 
                                referred to in subsection 
                                (a)(2) for a fiscal year, make 
                                available not more than 1.5 
                                percent to provide youth 
                                activities under section 166 
                                (relating to Native Americans); 
                                and
                                    (II) allot the remainder of 
                                the amount referred to in 
                                subsection (a)(2) for a fiscal 
                                year to the States pursuant to 
                                clause (ii) for youth 
                                activities and statewide 
                                workforce investment 
                                activities.
                            (ii) Formula.--Subject to clauses 
                        (iii) and (iv), of the remainder--
                                    (I) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of unemployed 
                                individuals in areas of 
                                substantial unemployment in 
                                each State, compared to the 
                                total number of unemployed 
                                individuals in areas of 
                                substantial unemployment in all 
                                States;
                                    (II) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative excess number of 
                                unemployed individuals in each 
                                State, compared to the total 
                                excess number of unemployed 
                                individuals in all States; and
                                    (III) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of 
                                disadvantaged youth in each 
                                State, compared to the total 
                                number of disadvantaged youth 
                                in all States, except as 
                                described in clause (iii).
                            (iii) Calculation.--In determining 
                        an allotment under clause (ii)(III) for 
                        any State in which there is a local 
                        area designated under section 
                        116(a)(2)(B) (relating to the area 
                        served by a rural concentrated 
                        employment program grant recipient), 
                        the allotment shall be based on the 
                        higher of--
                                    (I) the number of 
                                individuals who are age 16 
                                through 21 in families with an 
                                income below the low-income 
                                level in such area; or
                                    (II) the number of 
                                disadvantaged youth in such 
                                area.
                            (iv) Minimum and maximum 
                        percentages and minimum allotments.--In 
                        making allotments under this 
                        subparagraph, the Secretary shall 
                        ensure the following:
                                    (I) Minimum percentage and 
                                allotment.--Subject to 
                                subclause (IV), the Secretary 
                                shall ensure that no State 
                                shall receive an allotment for 
                                a fiscal year that is less than 
                                the greater of--
                                            (aa) an amount 
                                        based on 90 percent of 
                                        the allotment 
                                        percentage of the State 
                                        for the preceding 
                                        fiscal year; or
                                            (bb) 100 percent of 
                                        the total of the 
                                        allotments of the State 
                                        under sections 252 and 
                                        262 of the Job Training 
                                        Partnership Act (as in 
                                        effect on the day 
                                        before the date of 
                                        enactment of this Act) 
                                        for fiscal year 1998.
                                    (II) Small state minimum 
                                allotment.--Subject to 
                                subclauses (I), (III), and 
                                (IV), the Secretary shall 
                                ensure that no State shall 
                                receive an allotment under this 
                                subparagraph that is less than 
                                the total of--
                                            (aa) \3/10\ of 1 
                                        percent of 
                                        $1,000,000,000 of the 
                                        remainder described in 
                                        clause (i)(II) for the 
                                        fiscal year; and
                                            (bb) if the 
                                        remainder described in 
                                        clause (i)(II) for the 
                                        fiscal year exceeds 
                                        $1,000,000,000, \2/5\ 
                                        of 1 percent of the 
                                        excess.
                                    (III) Maximum percentage.--
                                Subject to subclause (I), the 
                                Secretary shall ensure that no 
                                State shall receive an 
                                allotment percentage for a 
                                fiscal year that is more than 
                                130 percent of the allotment 
                                percentage of the State for the 
                                preceding fiscal year.
                                    (IV) Minimum funding.--In 
                                any fiscal year in which the 
                                remainder described in clause 
                                (i)(II) does not exceed 
                                $1,000,000,000, the minimum 
                                allotments under subclauses (I) 
                                and (II) shall be calculated by 
                                the methodology for calculating 
                                the corresponding allotments 
                                under parts B and C of title II 
                                of the Job Training Partnership 
                                Act, as in effect on July 1, 
                                1998.
            (2) Definitions.--For the purpose of the formula 
        specified in paragraph (1)(C):
                    (A) Allotment percentage.--The term 
                ``allotment percentage'', used with respect to 
                fiscal year 2000 or a subsequent fiscal year, 
                means a percentage of the remainder described 
                in paragraph (1)(C)(i)(II) that is received 
                through an allotment made under paragraph 
                (1)(C) for the fiscal year. The term, used with 
                respect to fiscal year 1998 or 1999, means the 
                percentage of the amounts allotted to States 
                under sections 252(b) and 262(a) of the Job 
                Training Partnership Act (as in effect on the 
                day before the date of enactment of this Act) 
                that is received under such sections by the 
                State involved for fiscal year 1998 or 1999.
                    (B) Area of substantial unemployment.--The 
                term ``area of substantial unemployment'' means 
                any area that is of sufficient size and scope 
                to sustain a program of workforce investment 
                activities carried out under this subtitle and 
                that has an average rate of unemployment of at 
                least 6.5 percent for the most recent 12 
                months, as determined by the Secretary. For 
                purposes of this subparagraph, determinations 
                of areas of substantial unemployment shall be 
                made once each fiscal year.
                    (C) Disadvantaged youth.--Subject to 
                paragraph (3), the term ``disadvantaged youth'' 
                means an individual who is age 16 through 21 
                who received an income, or is a member of a 
                family that received a total family income, 
                that, in relation to family size, does not 
                exceed the higher of--
                            (i) the poverty line; or
                            (ii) 70 percent of the lower living 
                        standard income level.
                    (D) Excess number.--The term ``excess 
                number'' means, used with respect to the excess 
                number of unemployed individuals within a 
                State, the higher of--
                            (i) the number that represents the 
                        number of unemployed individuals in 
                        excess of 4.5 percent of the civilian 
                        labor force in the State; or
                            (ii) the number that represents the 
                        number of unemployed individuals in 
                        excess of 4.5 percent of the civilian 
                        labor force in areas of substantial 
                        unemployment in such State.
                    (E) Low-income level.--The term ``low-
                income level'' means $7,000 with respect to 
                income in 1969, and for any later year means 
                that amount that bears the same relationship to 
                $7,000 as the Consumer Price Index for that 
                year bears to the Consumer Price Index for 
                1969, rounded to the nearest $1,000.
            (3) Special rule.--For the purpose of the formula 
        specified in paragraph (1)(C), the Secretary shall, as 
        appropriate and to the extent practicable, exclude 
        college students and members of the Armed Forces from 
        the determination of the number of disadvantaged youth.
            (4) Definition.--In this subsection, the term 
        ``Freely Associated State'' means the Republic of the 
        Marshall Islands, the Federated States of Micronesia, 
        and the Republic of Palau.
    (c) Reallotment.--
            (1) In general.--The Secretary shall, in accordance 
        with this subsection, reallot to eligible States 
        amounts that are allotted under this section for youth 
        activities and statewide workforce investment 
        activities and that are available for reallotment.
            (2) Amount.--The amount available for reallotment 
        for a program year is equal to the amount by which the 
        unobligated balance of the State allotment under this 
        section for such activities, at the end of the program 
        year prior to the program year for which the 
        determination under this paragraph is made, exceeds 20 
        percent of such allotment for the prior program year.
            (3) Reallotment.--In making reallotments to 
        eligible States of amounts available pursuant to 
        paragraph (2) for a program year, the Secretary shall 
        allot to each eligible State an amount based on the 
        relative amount allotted to such State under this 
        section for such activities for the prior program year, 
        as compared to the total amount allotted to all 
        eligible States under this section for such activities 
        for such prior program year.
            (4) Eligibility.--For purposes of this subsection, 
        an eligible State means a State that has obligated at 
        least 80 percent of the State allotment under this 
        section for such activities for the program year prior 
        to the program year for which the determination under 
        paragraph (2) is made.
            (5) Procedures.--The Governor of each State shall 
        prescribe uniform procedures for the obligation of 
        funds by local areas within the State in order to avoid 
        the requirement that funds be made available for 
        reallotment under this subsection. The Governor shall 
        further prescribe equitable procedures for making funds 
        available from the State and local areas in the event 
        that a State is required to make funds available for 
        reallotment under this subsection.

SEC. 128. WITHIN STATE ALLOCATIONS.

    (a) Reservations for State Activities.--
            (1) In general.--The Governor of a State shall 
        reserve not more than 15 percent of each of the amounts 
        allotted to the State under section 127(b)(1)(C) and 
        paragraphs (1)(B) and (2)(B) of section 132(b) for a 
        fiscal year for statewide workforce investment 
        activities.
            (2) Use of funds.--Regardless of whether the 
        reserved amounts were allotted under section 
        127(b)(1)(C), or under paragraph (1)(B) or (2)(B) of 
        section 132(b), the Governor may use the reserved 
        amounts to carry out statewide youth activities 
        described in section 129(b) or statewide employment and 
        training activities, for adults or for dislocated 
        workers, described in paragraph (2)(B) or (3) of 
        section 134(a).
    (b) Within State Allocation.--
            (1) Methods.--The Governor, acting in accordance 
        with the State plan, and after consulting with chief 
        elected officials in the local areas, shall allocate 
        the funds that are allotted to the State for youth 
        activities and statewide workforce investment 
        activities under section 127(b)(1)(C) and are not 
        reserved under subsection (a), in accordance with 
        paragraph (2) or (3).
            (2) Formula allocation.--
                    (A) Youth activities.--
                            (i) Allocation.--In allocating the 
                        funds described in paragraph (1) to 
                        local areas, a State may allocate--
                                    (I) 33\1/3\ percent of the 
                                funds on the basis described in 
                                section 127(b)(1)(C)(ii)(I);
                                    (II) 33\1/3\ percent of the 
                                funds on the basis described in 
                                section 127(b)(1)(C)(ii)(II); 
                                and
                                    (III) 33\1/3\ percent of 
                                the funds on the basis 
                                described in clauses (ii)(III) 
                                and (iii) of section 
                                127(b)(1)(C).
                            (ii) Minimum percentage.--Effective 
                        at the end of the second full fiscal 
                        year after the date on which a local 
                        area is designated under section 116, 
                        the local area shall not receive an 
                        allocation percentage for a fiscal year 
                        that is less than 90 percent of the 
                        average allocation percentage of the 
                        local area for the 2 preceding fiscal 
                        years. Amounts necessary for increasing 
                        such allocations to local areas to 
                        comply with the preceding sentence 
                        shall be obtained by ratably reducing 
                        the allocations to be made to other 
                        local areas under this subparagraph.
                            (iii) Definition.--The term 
                        ``allocation percentage'', used with 
                        respect to fiscal year 2000 or a 
                        subsequent fiscal year, means a 
                        percentage of the funds referred to in 
                        clause (i), received through an 
                        allocation made under this 
                        subparagraph, for the fiscal year.
                    (B) Application.--For purposes of carrying 
                out subparagraph (A)--
                            (i) references in section 127(b) to 
                        a State shall be deemed to be 
                        references to a local area;
                            (ii) references in section 127(b) 
                        to all States shall be deemed to be 
                        references to all local areas in the 
                        State involved; and
                            (iii) except as described in clause 
                        (i), references in section 127(b)(1) to 
                        the term ``excess number'' shall be 
                        considered to be references to the term 
                        as defined in section 127(b)(2).
            (3) Youth discretionary allocation.--In lieu of 
        making the allocation described in paragraph (2)(A), in 
        allocating the funds described in paragraph (1) to 
        local areas, a State may distribute--
                    (A) a portion equal to not less than 70 
                percent of the funds in accordance with 
                paragraph (2)(A); and
                    (B) the remaining portion of the funds on 
                the basis of a formula that--
                            (i) incorporates additional factors 
                        (other than the factors described in 
                        paragraph (2)(A)) relating to--
                                    (I) excess youth poverty in 
                                urban, rural, and suburban 
                                local areas; and
                                    (II) excess unemployment 
                                above the State average in 
                                urban, rural, and suburban 
                                local areas; and
                            (ii) was developed by the State 
                        board and approved by the Secretary as 
                        part of the State plan.
            (4) Limitation.--
                    (A) In general.--Of the amount allocated to 
                a local area under this subsection and section 
                133(b) for a fiscal year, not more than 10 
                percent of the amount may be used by the local 
                board for the administrative cost of carrying 
                out local workforce investment activities 
                described in subsection (d) or (e) of section 
                134 or in section 129(c).
                    (B) Use of funds.--Funds made available for 
                administrative costs under subparagraph (A) may 
                be used for the administrative cost of any of 
                the local workforce investment activities 
                described in subsection (d) or (e) of section 
                134 or in section 129(c), regardless of whether 
                the funds were allocated under this subsection 
                or section 133(b).
                    (C) Regulations.--The Secretary, after 
                consulting with the Governors, shall develop 
                and issue regulations that define the term 
                ``administrative cost'' for purposes of this 
                title. Such definition shall be consistent with 
                generally accepted accounting principles.
    (c) Reallocation Among Local Areas.--
            (1) In general.--The Governor may, in accordance 
        with this subsection, reallocate to eligible local 
        areas within the State amounts that are allocated under 
        paragraph (2)(A) or (3) of subsection (b) for youth 
        activities and that are available for reallocation.
            (2) Amount.--The amount available for reallocation 
        for a program year is equal to the amount by which the 
        unobligated balance of the local area allocation under 
        paragraph (2)(A) or (3) of subsection (b) for such 
        activities, at the end of the program year prior to the 
        program year for which the determination under this 
        paragraph is made exceeds 20 percent of such allocation 
        for the prior program year.
            (3) Reallocation.--In making reallocations to 
        eligible local areas of amounts available pursuant to 
        paragraph (2) for a program year, the Governor shall 
        allocate to each eligible local area within the State 
        an amount based on the relative amount allocated to 
        such local area under subsection (b)(3) for such 
        activities for the prior program year, as compared to 
        the total amount allocated to all eligible local areas 
        in the State under subsection (b)(3) for such 
        activities for such prior program year. For purposes of 
        this paragraph, local areas that received allocations 
        under subsection (b)(2)(A) for the prior program year 
        shall be treated as if the local areas received 
        allocations under subsection (b)(3) for such year.
            (4) Eligibility.--For purposes of this subsection, 
        an eligible local area means a local area that has 
        obligated at least 80 percent of the local area 
        allocation under paragraph (2)(A) or (3) of subsection 
        (b) for such activities, for the program year prior to 
        the program year for which the determination under 
        paragraph (2) is made.

SEC. 129. USE OF FUNDS FOR YOUTH ACTIVITIES.

    (a) Purposes.--The purposes of this section are--
            (1) to provide, to eligible youth seeking 
        assistance in achieving academic and employment 
        success, effective and comprehensive activities, which 
        shall include a variety of options for improving 
        educational and skill competencies and provide 
        effective connections to employers;
            (2) to ensure on-going mentoring opportunities for 
        eligible youth with adults committed to providing such 
        opportunities;
            (3) to provide opportunities for training to 
        eligible youth;
            (4) to provide continued supportive services for 
        eligible youth;
            (5) to provide incentives for recognition and 
        achievement to eligible youth; and
            (6) to provide opportunities for eligible youth in 
        activities related to leadership, development, 
        decisionmaking, citizenship, and community service.
    (b) Statewide Youth Activities.--
            (1) In general.--Funds reserved by a Governor for a 
        State as described in sections 128(a) and 133(a)(1)--
                    (A) shall be used to carry out the 
                statewide youth activities described in 
                paragraph (2); and
                    (B) may be used to carry out any of the 
                statewide youth activities described in 
                paragraph (3),

        regardless of whether the funds were allotted to the 
        State under section 127(b)(1) or under paragraph (1) or 
        (2) of section 132(b).
            (2) Required statewide youth activities.--A State 
        shall use funds reserved as described in sections 
        128(a) and 133(a)(1) (regardless of whether the funds 
        were allotted to the State under section 127(b)(1) or 
        paragraph (1) or (2) of section 132(b)) to carry out 
        statewide youth activities, which shall include--
                    (A) disseminating a list of eligible 
                providers of youth activities described in 
                section 123;
                    (B) carrying out activities described in 
                clauses (ii) through (vi) of section 
                134(a)(2)(B), except that references in such 
                clauses to activities authorized under section 
                134 shall be considered to be references to 
                activities authorized under this section; and
                    (C) providing additional assistance to 
                local areas that have high concentrations of 
                eligible youth to carry out the activities 
                described in subsection (c).
            (3) Allowable statewide youth activities.--A State 
        may use funds reserved as described in sections 128(a) 
        and 133(a)(1) (regardless of whether the funds were 
        allotted to the State under section 127(b)(1) or 
        paragraph (1) or (2) of section 132(b)) to carry out 
        additional statewide youth activities, which may 
        include--
                    (A) carrying out activities described in 
                clauses (i), (ii), (iii), (iv)(II), and 
                (vi)(II) of section 134(a)(3)(A), except that 
                references in such clauses to activities 
                authorized under section 134 shall be 
                considered to be references to activities 
                authorized under this section; and
                    (B) carrying out, on a statewide basis, 
                activities described in subsection (c).
            (4) Prohibition.--No funds described in this 
        subsection or section 134(a) shall be used to develop 
        or implement education curricula for school systems in 
        the State.
    (c) Local Elements and Requirements.--
            (1) Program design.--Funds allocated to a local 
        area for eligible youth under paragraph (2)(A) or (3), 
        as appropriate, of section 128(b) shall be used to 
        carry out, for eligible youth, programs that--
                    (A) provide an objective assessment of the 
                academic levels, skill levels, and service 
                needs of each participant, which assessment 
                shall include a review of basic skills, 
                occupational skills, prior work experience, 
                employability, interests, aptitudes (including 
                interests and aptitudes for nontraditional 
                jobs), supportive service needs, and 
                developmental needs of such participant, except 
                that a new assessment of a participant is not 
                required if the provider carrying out such a 
                program determines it is appropriate to use a 
                recent assessment of the participant conducted 
                pursuant to another education or training 
                program;
                    (B) develop service strategies for each 
                participant that shall identify an employment 
                goal (including, in appropriate circumstances, 
                nontraditional employment), appropriate 
                achievement objectives, and appropriate 
                services for the participant taking into 
                account the assessment conducted pursuant to 
                subparagraph (A), except that a new service 
                strategy for a participant is not required if 
                the provider carrying out such a program 
                determines it is appropriate to use a recent 
                service strategy developed for the participant 
                under another education or training program; 
                and
                    (C) provide--
                            (i) preparation for postsecondary 
                        educational opportunities, in 
                        appropriate cases;
                            (ii) strong linkages between 
                        academic and occupational learning;
                            (iii) preparation for unsubsidized 
                        employment opportunities, in 
                        appropriate cases; and
                            (iv) effective connections to 
                        intermediaries with strong links to--
                                    (I) the job market; and
                                    (II) local and regional 
                                employers.
            (2) Program elements.--The programs described in 
        paragraph (1) shall provide elements consisting of--
                    (A) tutoring, study skills training, and 
                instruction, leading to completion of secondary 
                school, including dropout prevention 
                strategies;
                    (B) alternative secondary school services, 
                as appropriate;
                    (C) summer employment opportunities that 
                are directly linked to academic and 
                occupational learning;
                    (D) as appropriate, paid and unpaid work 
                experiences, including internships and job 
                shadowing;
                    (E) occupational skill training, as 
                appropriate;
                    (F) leadership development opportunities, 
                which may include community service and peer-
                centered activities encouraging responsibility 
                and other positive social behaviors during non-
                school hours, as appropriate;
                    (G) supportive services;
                    (H) adult mentoring for the period of 
                participation and a subsequent period, for a 
                total of not less than 12 months;
                    (I) followup services for not less than 12 
                months after the completion of participation, 
                as appropriate; and
                    (J) comprehensive guidance and counseling, 
                which may include drug and alcohol abuse 
                counseling and referral, as appropriate.
            (3) Additional requirements.--
                    (A) Information and referrals.--Each local 
                board shall ensure that each participant or 
                applicant who meets the minimum income criteria 
                to be considered an eligible youth shall be 
                provided--
                            (i) information on the full array 
                        of applicable or appropriate services 
                        that are available through the local 
                        board or other eligible providers or 
                        one-stop partners, including those 
                        receiving funds under this subtitle; 
                        and
                            (ii) referral to appropriate 
                        training and educational programs that 
                        have the capacity to serve the 
                        participant or applicant either on a 
                        sequential or concurrent basis.
                    (B) Applicants not meeting enrollment 
                requirements.--Each eligible provider of a 
                program of youth activities shall ensure that 
                an eligible applicant who does not meet the 
                enrollment requirements of the particular 
                program or who cannot be served shall be 
                referred for further assessment, as necessary, 
                and referred to appropriate programs in 
                accordance with subparagraph (A) to meet the 
                basic skills and training needs of the 
                applicant.
                    (C) Involvement in design and 
                implementation.--The local board shall ensure 
                that parents, participants, and other members 
                of the community with experience relating to 
                programs for youth are involved in the design 
                and implementation of the programs described in 
                paragraph (1).
            (4) Priority.--
                    (A) In general.--At a minimum, 30 percent 
                of the funds described in paragraph (1) shall 
                be used to provide youth activities to out-of-
                school youth.
                    (B) Exception.--A State that receives a 
                minimum allotment under section 127(b)(1) in 
                accordance with section 127(b)(1)(C)(iv)(II) or 
                under section 132(b)(1) in accordance with 
                section 132(b)(1)(B)(iv)(II) may reduce the 
                percentage described in subparagraph (A) for a 
                local area in the State, if--
                            (i) after an analysis of the 
                        eligible youth population in the local 
                        area, the State determines that the 
                        local area will be unable to meet the 
                        percentage described in subparagraph 
                        (A) due to a low number of out-of-
                        school youth; and
                            (ii)(I) the State submits to the 
                        Secretary, for the local area, a 
                        request including a proposed reduced 
                        percentage for purposes of subparagraph 
                        (A), and the summary of the eligible 
                        youth population analysis; and
                            (II) the request is approved by the 
                        Secretary.
            (5) Exceptions.--Not more than 5 percent of 
        participants assisted under this section in each local 
        area may be individuals who do not meet the minimum 
        income criteria to be considered eligible youth, if 
        such individuals are within 1 or more of the following 
        categories:
                    (A) Individuals who are school dropouts.
                    (B) Individuals who are basic skills 
                deficient.
                    (C) Individuals with educational attainment 
                that is 1 or more grade levels below the grade 
                level appropriate to the age of the 
                individuals.
                    (D) Individuals who are pregnant or 
                parenting.
                    (E) Individuals with disabilities, 
                including learning disabilities.
                    (F) Individuals who are homeless or runaway 
                youth.
                    (G) Individuals who are offenders.
                    (H) Other eligible youth who face serious 
                barriers to employment as identified by the 
                local board.
            (6) Prohibitions.--
                    (A) Prohibition against federal control of 
                education.--No provision of this Act shall be 
                construed to authorize any department, agency, 
                officer, or employee of the United States to 
                exercise any direction, supervision, or control 
                over the curriculum, program of instruction, 
                administration, or personnel of any educational 
                institution, school, or school system, or over 
                the selection of library resources, textbooks, 
                or other printed or published instructional 
                materials by any educational institution, 
                school, or school system.
                    (B) Nonduplication.--All of the funds made 
                available under this Act shall be used in 
                accordance with the requirements of this Act. 
                None of the funds made available under this Act 
                may be used to provide funding under the 
                School-to-Work Opportunities Act of 1994 (20 
                U.S.C. 6101 et seq.) or to carry out, through 
                programs funded under this Act, activities that 
                were funded under the School-to-Work 
                Opportunities Act of 1994, unless the programs 
                funded under this Act serve only those 
                participants eligible to participate in the 
                programs under this Act.
                    (C) Noninterference and nonreplacement of 
                regular academic requirements.--No funds 
                described in paragraph (1) shall be used to 
                provide an activity for eligible youth who are 
                not school dropouts if participation in the 
                activity would interfere with or replace the 
                regular academic requirements of the youth.
            (7) Linkages.--In coordinating the programs 
        authorized under this section, youth councils shall 
        establish linkages with educational agencies 
        responsible for services to participants as 
        appropriate.
            (8) Volunteers.--The local board shall make 
        opportunities available for individuals who have 
        successfully participated in programs carried out under 
        this section to volunteer assistance to participants in 
        the form of mentoring, tutoring, and other activities.

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

SEC. 131. GENERAL AUTHORIZATION.

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

SEC. 132. STATE ALLOTMENTS.

    (a) In General.--The Secretary shall--
            (1) make allotments and grants from the total 
        amount appropriated under section 137(b) for a fiscal 
        year in accordance with subsection (b)(1); and
            (2)(A) reserve 20 percent of the amount 
        appropriated under section 137(c) for a fiscal year for 
        use under subsection (b)(2)(A), and under sections 
        170(b) (relating to dislocated worker technical 
        assistance), 171(d) (relating to dislocated worker 
        projects), and 173 (relating to national emergency 
        grants); and
            (B) make allotments from 80 percent of the amount 
        appropriated under section 137(c) for a fiscal year in 
        accordance with subsection (b)(2)(B).
    (b) Allotment Among States.--
            (1) Adult employment and training activities.--
                    (A) Reservation for outlying areas.--
                            (i) In general.--From the amount 
                        made available under subsection (a)(1) 
                        for a fiscal year, the Secretary shall 
                        reserve not more than \1/4\ of 1 
                        percent to provide assistance to the 
                        outlying areas.
                            (ii) Applicability of additional 
                        requirements.--From the amount reserved 
                        under clause (i), the Secretary shall 
                        provide assistance to the outlying 
                        areas for adult employment and training 
                        activities and statewide workforce 
                        investment activities in accordance 
                        with the requirements of section 
                        127(b)(1)(B), except that the reference 
                        in section 127(b)(1)(B)(i)(II) to 
                        sections 252(d) and 262(a)(1) of the 
                        Job Training Partnership Act shall be 
                        deemed to be a reference to section 
                        202(a)(1) of the Job Training 
                        Partnership Act (as in effect on the 
                        day before the date of enactment of 
                        this Act).
                    (B) States.--
                            (i) In general.--After determining 
                        the amount to be reserved under 
                        subparagraph (A), the Secretary shall 
                        allot the remainder of the amount 
                        referred to in subsection (a)(1) for a 
                        fiscal year to the States pursuant to 
                        clause (ii) for adult employment and 
                        training activities and statewide 
                        workforce investment activities.
                            (ii) Formula.--Subject to clauses 
                        (iii) and (iv), of the remainder--
                                    (I) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of unemployed 
                                individuals in areas of 
                                substantial unemployment in 
                                each State, compared to the 
                                total number of unemployed 
                                individuals in areas of 
                                substantial unemployment in all 
                                States;
                                    (II) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative excess number of 
                                unemployed individuals in each 
                                State, compared to the total 
                                excess number of unemployed 
                                individuals in all States; and
                                    (III) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of 
                                disadvantaged adults in each 
                                State, compared to the total 
                                number of disadvantaged adults 
                                in all States, except as 
                                described in clause (iii).
                            (iii) Calculation.--In determining 
                        an allotment under clause (ii)(III) for 
                        any State in which there is a local 
                        area designated under section 
                        116(a)(2)(B), the allotment shall be 
                        based on the higher of--
                                    (I) the number of adults in 
                                families with an income below 
                                the low-income level in such 
                                area; or
                                    (II) the number of 
                                disadvantaged adults in such 
                                area.
                            (iv) Minimum and maximum 
                        percentages and minimum allotments.--In 
                        making allotments under this 
                        subparagraph, the Secretary shall 
                        ensure the following:
                                    (I) Minimum percentage and 
                                allotment.--Subject to 
                                subclause (IV), the Secretary 
                                shall ensure that no State 
                                shall receive an allotment for 
                                a fiscal year that is less than 
                                the greater of--
                                            (aa) an amount 
                                        based on 90 percent of 
                                        the allotment 
                                        percentage of the State 
                                        for the preceding 
                                        fiscal year; or
                                            (bb) 100 percent of 
                                        the allotment of the 
                                        State under section 202 
                                        of the Job Training 
                                        Partnership Act (as in 
                                        effect on the day 
                                        before the date of 
                                        enactment of this Act) 
                                        for fiscal year 1998.
                                    (II) Small state minimum 
                                allotment.--Subject to 
                                subclauses (I), (III), and 
                                (IV), the Secretary shall 
                                ensure that no State shall 
                                receive an allotment under this 
                                subparagraph that is less than 
                                the total of--
                                            (aa) \3/10\ of 1 
                                        percent of $960,000,000 
                                        of the remainder 
                                        described in clause (i) 
                                        for the fiscal year; 
                                        and
                                            (bb) if the 
                                        remainder described in 
                                        clause (i) for the 
                                        fiscal year exceeds 
                                        $960,000,000, \2/5\ of 
                                        1 percent of the 
                                        excess.
                                    (III) Maximum percentage.--
                                Subject to subclause (I), the 
                                Secretary shall ensure that no 
                                State shall receive an 
                                allotment percentage for a 
                                fiscal year that is more than 
                                130 percent of the allotment 
                                percentage of the State for the 
                                preceding fiscal year.
                                    (IV) Minimum funding.--In 
                                any fiscal year in which the 
                                remainder described in clause 
                                (i) does not exceed 
                                $960,000,000, the minimum 
                                allotments under subclauses (I) 
                                and (II) shall be calculated by 
                                the methodology for calculating 
                                the corresponding allotments 
                                under part A of title II of the 
                                Job Training Partnership Act, 
                                as in effect on July 1, 1998.
                            (v) Definitions.--For the purpose 
                        of the formula specified in this 
                        subparagraph:
                                    (I) Adult.--The term 
                                ``adult'' means an individual 
                                who is not less than age 22 and 
                                not more than age 72.
                                    (II) Allotment 
                                percentage.--The term 
                                ``allotment percentage'', used 
                                with respect to fiscal year 
                                2000 or a subsequent fiscal 
                                year, means a percentage of the 
                                remainder described in clause 
                                (i) that is received through an 
                                allotment made under this 
                                subparagraph for the fiscal 
                                year. The term, used with 
                                respect to fiscal year 1998 or 
                                1999, means the percentage of 
                                the amounts allotted to States 
                                under section 202(a) of the Job 
                                Training Partnership Act (as in 
                                effect on the day before the 
                                date of enactment of this Act) 
                                that is received under such 
                                section by the State involved 
                                for fiscal year 1998 or 1999.
                                    (III) Area of substantial 
                                unemployment.--The term ``area 
                                of substantial unemployment'' 
                                means any area that is of 
                                sufficient size and scope to 
                                sustain a program of workforce 
                                investment activities carried 
                                out under this subtitle and 
                                that has an average rate of 
                                unemployment of at least 6.5 
                                percent for the most recent 12 
                                months, as determined by the 
                                Secretary. For purposes of this 
                                subclause, determinations of 
                                areas of substantial 
                                unemployment shall be made once 
                                each fiscal year.
                                    (IV) Disadvantaged adult.--
                                Subject to subclause (V), the 
                                term ``disadvantaged adult'' 
                                means an adult who received an 
                                income, or is a member of a 
                                family that received a total 
                                family income, that, in 
                                relation to family size, does 
                                not exceed the higher of--
                                            (aa) the poverty 
                                        line; or
                                            (bb) 70 percent of 
                                        the lower living 
                                        standard income level.
                                    (V) Disadvantaged adult 
                                special rule.--The Secretary 
                                shall, as appropriate and to 
                                the extent practicable, exclude 
                                college students and members of 
                                the Armed Forces from the 
                                determination of the number of 
                                disadvantaged adults.
                                    (VI) Excess number.--The 
                                term ``excess number'' means, 
                                used with respect to the excess 
                                number of unemployed 
                                individuals within a State, the 
                                higher of--
                                            (aa) the number 
                                        that represents the 
                                        number of unemployed 
                                        individuals in excess 
                                        of 4.5 percent of the 
                                        civilian labor force in 
                                        the State; or
                                            (bb) the number 
                                        that represents the 
                                        number of unemployed 
                                        individuals in excess 
                                        of 4.5 percent of the 
                                        civilian labor force in 
                                        areas of substantial 
                                        unemployment in such 
                                        State.
            (2) Dislocated worker employment and training.--
                    (A) Reservation for outlying areas.--
                            (i) In general.--From the amount 
                        made available under subsection 
                        (a)(2)(A) for a fiscal year, the 
                        Secretary shall reserve not more than 
                        \1/4\ of 1 percent of the amount 
                        appropriated under section 137(c) for 
                        the fiscal year to provide assistance 
                        to the outlying areas.
                            (ii) Applicability of additional 
                        requirements.--From the amount reserved 
                        under clause (i), the Secretary shall 
                        provide assistance to the outlying 
                        areas for dislocated worker employment 
                        and training activities and statewide 
                        workforce investment activities in 
                        accordance with the requirements of 
                        section 127(b)(1)(B), except that the 
                        reference in section 
                        127(b)(1)(B)(i)(II) to sections 252(a) 
                        and 262(a)(1) of the Job Training 
                        Partnership Act shall be deemed to be a 
                        reference to section 302(e) of the Job 
                        Training Partnership Act (as in effect 
                        on the day before the date of enactment 
                        of this Act).
                    (B) States.--
                            (i) In general.--The Secretary 
                        shall allot the amount referred to in 
                        subsection (a)(2)(B) for a fiscal year 
                        to the States pursuant to clause (ii) 
                        for dislocated worker employment and 
                        training activities and statewide 
                        workforce investment activities.
                            (ii) Formula.--Of the amount--
                                    (I) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of unemployed 
                                individuals in each State, 
                                compared to the total number of 
                                unemployed individuals in all 
                                States;
                                    (II) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative excess number of 
                                unemployed individuals in each 
                                State, compared to the total 
                                excess number of unemployed 
                                individuals in all States; and
                                    (III) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of individuals 
                                in each State who have been 
                                unemployed for 15 weeks or 
                                more, compared to the total 
                                number of individuals in all 
                                States who have been unemployed 
                                for 15 weeks or more.
                            (iii) Definition.--In this 
                        subparagraph, the term ``excess 
                        number'' means, used with respect to 
                        the excess number of unemployed 
                        individuals within a State, the number 
                        that represents the number of 
                        unemployed individuals in excess of 4.5 
                        percent of the civilian labor force in 
                        the State.
            (3) Definitions.--For the purpose of the formulas 
        specified in this subsection:
                    (A) Freely associated states.--The term 
                ``Freely Associated States'' means the Republic 
                of the Marshall Islands, the Federated States 
                of Micronesia, and the Republic of Palau.
                    (B) Low-income level.--The term ``low-
                income level'' means $7,000 with respect to 
                income in 1969, and for any later year means 
                that amount that bears the same relationship to 
                $7,000 as the Consumer Price Index for that 
                year bears to the Consumer Price Index for 
                1969, rounded to the nearest $1,000.
    (c) Reallotment.--
            (1) In general.--The Secretary shall, in accordance 
        with this subsection, reallot to eligible States 
        amounts that are allotted under this section for 
        employment and training activities and statewide 
        workforce investment activities and that are available 
        for reallotment.
            (2) Amount.--The amount available for reallotment 
        for a program year is equal to the amount by which the 
        unobligated balance of the State allotments under this 
        section for such activities, at the end of the program 
        year prior to the program year for which the 
        determination under this paragraph is made, exceeds 20 
        percent of such allotments for the prior program year.
            (3) Reallotment.--In making reallotments to 
        eligible States of amounts available pursuant to 
        paragraph (2) for a program year, the Secretary shall 
        allot to each eligible State an amount based on the 
        relative amount allotted to such State under this 
        section for such activities for the prior program year, 
as compared to the total amount allotted to all eligible States under 
this section for such activities for such prior program year.
            (4) Eligibility.--For purposes of this subsection, 
        an eligible State means a State that has obligated at 
        least 80 percent of the State allotment under this 
        section for such activities for the program year prior 
        to the program year for which the determination under 
        paragraph (2) is made.
            (5) Procedures.--The Governor of each State shall 
        prescribe uniform procedures for the obligation of 
        funds by local areas within the State in order to avoid 
        the requirement that funds be made available for 
        reallotment under this subsection. The Governor shall 
        further prescribe equitable procedures for making funds 
        available from the State and local areas in the event 
        that a State is required to make funds available for 
        reallotment under this subsection.

SEC. 133. WITHIN STATE ALLOCATIONS.

    (a) Reservations for State Activities.--
            (1) Statewide workforce investment activities.--The 
        Governor of a State shall make the reservation required 
        under section 128(a).
            (2) Statewide rapid response activities.--The 
        Governor of the State shall reserve not more than 25 
        percent of the total amount allotted to the State under 
        section 132(b)(2)(B) for a fiscal year for statewide 
        rapid response activities described in section 
        134(a)(2)(A).
    (b) Within State Allocation.--
            (1) Methods.--The Governor, acting in accordance 
        with the State plan, and after consulting with chief 
        elected officials in the local areas, shall allocate--
                    (A) the funds that are allotted to the 
                State for adult employment and training 
                activities and statewide workforce investment 
                activities under section 132(b)(1)(B) and are 
                not reserved under subsection (a)(1), in 
                accordance with paragraph (2) or (3); and
                    (B) the funds that are allotted to the 
                State for dislocated worker employment and 
                training activities under section 132(b)(2)(B) 
                and are not reserved under paragraph (1) or (2) 
                of subsection (a), in accordance with paragraph 
                (2).
            (2) Formula allocations.--
                    (A) Adult employment and training 
                activities.--
                            (i) Allocation.--In allocating the 
                        funds described in paragraph (1)(A) to 
                        local areas, a State may allocate--
                                    (I) 33\1/3\ percent of the 
                                funds on the basis described in 
                                section 132(b)(1)(B)(ii)(I);
                                    (II) 33\1/3\ percent of the 
                                funds on the basis described in 
                                section 132(b)(1)(B)(ii)(II); 
                                and
                                    (III) 33\1/3\ percent of 
                                the funds on the basis 
                                described in clauses (ii)(III) 
                                and (iii) of section 
                                132(b)(1)(B).
                            (ii) Minimum percentage.--Effective 
                        at the end of the second full fiscal 
                        year after the date on which a local 
                        area is designated under section 116, 
                        the local area shall not receive an 
                        allocation percentage for a fiscal year 
                        that is less than 90 percent of the 
                        average allocation percentage of the 
                        local area for the 2 preceding fiscal 
                        years. Amounts necessary for increasing 
                        such allocations to local areas to 
                        comply with the preceding sentence 
                        shall be obtained by ratably reducing 
                        the allocations to be made to other 
                        local areas under this subparagraph.
                            (iii) Definition.--The term 
                        ``allocation percentage'', used with 
                        respect to fiscal year 2000 or a 
                        subsequent fiscal year, means a 
                        percentage of the funds referred to in 
                        clause (i), received through an 
                        allocation made under this 
                        subparagraph, for the fiscal year.
                    (B) Dislocated worker employment and 
                training activities.--
                            (i) Formula.--In allocating the 
                        funds described in paragraph (1)(B) to 
                        local areas, a State shall allocate the 
                        funds based on an allocation formula 
                        prescribed by the Governor of the 
                        State. Such formula may be amended by 
                        the Governor not more than once for 
                        each program year. Such formula shall 
                        utilize the most appropriate 
                        information available to the Governor 
                        to distribute amounts to address the 
                        State's worker readjustment assistance 
                        needs.
                            (ii) Information.--The information 
                        described in clause (i) shall include 
                        insured unemployment data, unemployment 
                        concentrations, plant closing and mass 
                        layoff data, declining industries data, 
                        farmer-rancher economic hardship data, 
                        and long-term unemployment data.
                    (C) Application.--For purposes of carrying 
                out subparagraph (A)--
                            (i) references in section 132(b) to 
                        a State shall be deemed to be 
                        references to a local area;
                            (ii) references in section 132(b) 
                        to all States shall be deemed to be 
                        references to all local areas in the 
                        State involved; and
                            (iii) except as described in clause 
                        (i), references in section 132(b)(1) to 
                        the term ``excess number'' shall be 
                        considered to be references to the term 
                        as defined in section 132(b)(1).
            (3) Adult employment and training discretionary 
        allocations.--In lieu of making the allocation 
        described in paragraph (2)(A), in allocating the funds 
        described in paragraph (1)(A) to local areas, a State 
        may distribute--
                    (A) a portion equal to not less than 70 
                percent of the funds in accordance with 
                paragraph (2)(A); and
                    (B) the remaining portion of the funds on 
                the basis of a formula that--
                            (i) incorporates additional factors 
                        (other than the factors described in 
                        paragraph (2)(A)) relating to--
                                    (I) excess poverty in 
                                urban, rural, and suburban 
                                local areas; and
                                    (II) excess unemployment 
                                above the State average in 
                                urban, rural, and suburban 
                                local areas; and
                            (ii) was developed by the State 
                        board and approved by the Secretary as 
                        part of the State plan.
            (4) Transfer authority.--A local board may 
        transfer, if such a transfer is approved by the 
        Governor, not more than 20 percent of the funds 
        allocated to the local area under paragraph (2)(A) or 
        (3), and 20 percent of the funds allocated to the local 
        area under paragraph (2)(B), for a fiscal year 
        between--
                    (A) adult employment and training 
                activities; and
                    (B) dislocated worker employment and 
                training activities.
            (5) Allocation.--
                    (A) In general.--The Governor of the State 
                shall allocate the funds described in paragraph 
                (1) to local areas under paragraphs (2) and (3) 
                for the purpose of providing a single system of 
                employment and training activities for adults 
                and dislocated workers in accordance with 
                subsections (d) and (e) of section 134.
                    (B) Additional requirements.--
                            (i) Adults.--Funds allocated under 
                        paragraph (2)(A) or (3) shall be used 
                        by a local area to contribute 
                        proportionately to the costs of the 
                        one-stop delivery system described in 
                        section 134(c) in the local area, and 
                        to pay for employment and training 
                        activities provided to adults in the 
                        local area, consistent with section 
                        134.
                            (ii) Dislocated workers.--Funds 
                        allocated under paragraph (2)(B) shall 
                        be used by a local area to contribute 
                        proportionately to the costs of the 
                        one-stop delivery system described in 
                        section 134(c) in the local area, and 
                        to pay for employment and training 
                        activities provided to dislocated 
                        workers in the local area, consistent 
                        with section 134.
    (c) Reallocation Among Local Areas.--
            (1) In general.--The Governor may, in accordance 
        with this subsection, reallocate to eligible local 
        areas within the State amounts that are allocated under 
        paragraph (2)(A) or (3) of subsection (b) for adult 
        employment and training activities and that are 
        available for reallocation.
            (2) Amount.--The amount available for reallocation 
        for a program year is equal to the amount by which the 
        unobligated balance of the local area allocation under 
        paragraph (2)(A) or (3) of subsection (b) for such 
        activities, at the end of the program year prior to the 
        program year for which the determination under this 
        paragraph is made exceeds 20 percent of such allocation 
        for the prior program year.
            (3) Reallocation.--In making reallocations to 
        eligible local areas of amounts available pursuant to 
        paragraph (2) for a program year, the Governor shall 
        allocate to each eligible local area within the State 
        an amount based on the relative amount allocated to 
        such local area under subsection (b)(3) for such 
        activities for the prior program year, as compared to 
        the total amount allocated to all eligible local areas 
        in the State under subsection (b)(3) for such 
        activities for such prior program year. For purposes of 
        this paragraph, local areas that received allocations 
        under subsection (b)(2)(A) for the prior program year 
        shall be treated as if the local areas received 
        allocations under subsection (b)(3) for such year.
            (4) Eligibility.--For purposes of this subsection, 
        an eligible local area means a local area that has 
        obligated at least 80 percent of the local area 
        allocation under paragraph (2)(A) or (3) of subsection 
        (b) for such activities, for the program year prior to 
        the program year for which the determination under 
        paragraph (2) is made.

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

    (a) Statewide Employment and Training Activities.--
            (1) In general.--Funds reserved by a Governor for a 
        State--
                    (A) as described in section 133(a)(2) shall 
                be used to carry out the statewide rapid 
                response activities described in paragraph 
                (2)(A); and
                    (B) as described in sections 128(a) and 
                133(a)(1)--
                            (i) shall be used to carry out the 
                        statewide employment and training 
                        activities described in paragraph 
                        (2)(B); and
                            (ii) may be used to carry out any 
                        of the statewide employment and 
                        training activities described in 
                        paragraph (3),
                regardless of whether the funds were allotted 
                to the State under section 127(b)(1) or under 
                paragraph (1) or (2) of section 132(b).
            (2) Required statewide employment and training 
        activities.--
                    (A) Statewide rapid response activities.--A 
                State shall use funds reserved as described in 
                section 133(a)(2) to carry out statewide rapid 
                response activities, which shall include--
                            (i) provision of rapid response 
                        activities, carried out in local areas 
                        by the State or by an entity designated 
                        by the State, working in conjunction 
                        with the local boards and the chief 
                        elected officials in the local areas; 
                        and
                            (ii) provision of additional 
                        assistance to local areas that 
                        experience disasters, mass layoffs or 
                        plant closings, or other events that 
                        precipitate substantial increases in 
                        the number of unemployed individuals, 
                        carried out in local areas by the State 
                        or by an entity designated by the 
                        State, working in conjunction with the 
                        local boards and the chief elected 
                        officials in the local areas.
                    (B) Other required statewide employment and 
                training activities.--A State shall use funds 
                reserved as described in sections 128(a) and 
                133(a)(1) (regardless of whether the funds were 
                allotted to the State under section 127(b)(1) 
                or paragraph (1) or (2) of section 132(b)) to 
                carry out other statewide employment and 
                training activities, which shall include--
                            (i) disseminating the State list of 
                        eligible providers of training 
                        services, including eligible providers 
                        of nontraditional training services, 
                        information identifying eligible 
                        providers of on-the-job training and 
                        customized training, and performance 
                        information and program cost 
                        information, as described in 
                        subsections (e) and (h) of section 122;
                            (ii) conducting evaluations, under 
                        section 136(e), of activities 
                        authorized in this section, in 
                        coordination with the activities 
                        carried out under section 172;
                            (iii) providing incentive grants to 
                        local areas for regional cooperation 
                        among local boards (including local 
                        boards for a designated region as 
                        described in section 116(c)), for local 
                        coordination of activities carried out 
                        under this Act, and for exemplary 
                        performance by local areas on the local 
                        performance measures;
                            (iv) providing technical assistance 
                        to local areas that fail to meet local 
                        performance measures;
                            (v) assisting in the establishment 
                        and operation of one-stop delivery 
                        systems described in subsection (c); 
                        and
                            (vi) operating a fiscal and 
                        management accountability information 
                        system under section 136(f).
            (3) Allowable statewide employment and training 
        activities.--
                    (A) In general.--A State may use funds 
                reserved as described in sections 128(a) and 
                133(a)(1) (regardless of whether the funds were 
                allotted to the State under section 127(b)(1) 
                or paragraph (1) or (2) of section 132(b)) to 
                carry out additional statewide employment and 
                training activities, which may include--
                            (i) subject to subparagraph (B), 
                        administration by the State of the 
                        activities authorized under this 
                        section;
                            (ii) provision of capacity building 
                        and technical assistance to local 
                        areas, one-stop operators, one-stop 
                        partners, and eligible providers, 
                        including the development and training 
                        of staff and the development of 
                        exemplary program activities;
                            (iii) conduct of research and 
                        demonstrations;
                            (iv)(I) implementation of 
                        innovative incumbent worker training 
                        programs, which may include the 
                        establishment and implementation of an 
                        employer loan program to assist in 
                        skills upgrading; and
                            (II) the establishment and 
                        implementation of programs targeted to 
                        empowerment zones and enterprise 
                        communities;
                            (v) support for the identification 
                        of eligible providers of training 
                        services as required under section 122;
                            (vi)(I) implementation of 
                        innovative programs for displaced 
                        homemakers, which for purposes of this 
                        subclause may include an individual who 
                        is receiving public assistance and is 
                        within 2 years of exhausting lifetime 
                        eligibility under part A of title IV of 
                        the Social Security Act (42 U.S.C. 601 
                        et seq.); and
                            (II) implementation of programs to 
                        increase the number of individuals 
                        training for and placed in 
                        nontraditional employment; and
                            (vii) carrying out other activities 
                        authorized in this section that the 
                        State determines to be necessary to 
                        assist local areas in carrying out 
                        activities described in subsection (d) 
                        or (e) through the statewide workforce 
                        investment system.
                    (B) Limitation.--
                            (i) In general.--Of the funds 
                        allotted to a State under sections 
                        127(b) and 132(b) and reserved as 
                        described in sections 128(a) and 
                        133(a)(1) for a fiscal year--
                                    (I) not more than 5 percent 
                                of the amount allotted under 
                                section 127(b)(1);
                                    (II) not more than 5 
                                percent of the amount allotted 
                                under section 132(b)(1); and
                                    (III) not more than 5 
                                percent of the amount allotted 
                                under section 132(b)(2),
                        may be used by the State for the 
                        administration of youth activities 
                        carried out under section 129 and 
                        employment and training activities 
                        carried out under this section.
                            (ii) Use of funds.--Funds made 
                        available for administrative costs 
                        under clause (i) may be used for the 
                        administrative cost of any of the 
                        statewide youth activities or statewide 
                        employment and training activities, 
                        regardless of whether the funds were 
                        allotted to the State under section 
                        127(b)(1) or paragraph (1) or (2) of 
                        section 132(b).
    (b) Local Employment and Training Activities.--Funds 
allocated to a local area for adults under paragraph (2)(A) or 
(3), as appropriate, of section 133(b), and funds allocated to 
a local area for dislocated workers under section 
133(b)(2)(B)--
            (1) shall be used to carry out employment and 
        training activities described in subsection (d) for 
        adults or dislocated workers, respectively; and
            (2) may be used to carry out employment and 
        training activities described in subsection (e) for 
        adults or dislocated workers, respectively.
    (c) Establishment of One-Stop Delivery System.--
            (1) In general.--There shall be established in a 
        State that receives an allotment under section 132(b) a 
        one-stop delivery system, which--
                    (A) shall provide the core services 
                described in subsection (d)(2);
                    (B) shall provide access to intensive 
                services and training services as described in 
                paragraphs (3) and (4) of subsection (d), 
                including serving as the point of access to 
                individual training accounts for training 
                services to participants in accordance with 
                subsection (d)(4)(G);
                    (C) shall provide access to the activities 
                carried out under subsection (e), if any;
                    (D) shall provide access to programs and 
                activities carried out by one-stop partners and 
                described in section 121(b); and
                    (E) shall provide access to the information 
                described in section 15 of the Wagner-Peyser 
                Act and all job search, placement, recruitment, 
                and other labor exchange services authorized 
                under the Wagner-Peyser Act (29 U.S.C. 49 et 
                seq.).
            (2) One-stop delivery.--At a minimum, the one-stop 
        delivery system--
                    (A) shall make each of the programs, 
                services, and activities described in paragraph 
                (1) accessible at not less than 1 physical 
                center in each local area of the State; and
                    (B) may also make programs, services, and 
                activities described in paragraph (1) 
                available--
                            (i) through a network of affiliated 
                        sites that can provide 1 or more of the 
                        programs, services, and activities to 
                        individuals; and
                            (ii) through a network of eligible 
                        one-stop partners--
                                    (I) in which each partner 
                                provides 1 or more of the 
                                programs, services, and 
                                activities to such individuals 
                                and is accessible at an 
                                affiliated site that consists 
                                of a physical location or an 
                                electronically or 
                                technologically linked access 
                                point; and
                                    (II) that assures 
                                individuals that information on 
                                the availability of the core 
                                services will be available 
                                regardless of where the 
                                individuals initially enter the 
                                statewide workforce investment 
                                system, including information 
                                made available through an 
                                access point described in 
                                subclause (I).
            (3) Specialized centers.--The centers and sites 
        described in paragraph (2) may have a specialization in 
        addressing special needs, such as the needs of 
        dislocated workers.
    (d) Required Local Employment and Training Activities.--
            (1) In general.--
                    (A) Allocated funds.--Funds allocated to a 
                local area for adults under paragraph (2)(A) or 
                (3), as appropriate, of section 133(b), and 
                funds allocated to the local area for 
                dislocated workers under section 133(b)(2)(B), 
                shall be used--
                            (i) to establish a one-stop 
                        delivery system described in subsection 
                        (c);
                            (ii) to provide the core services 
                        described in paragraph (2) to adults 
                        and dislocated workers, respectively, 
                        through the one-stop delivery system in 
                        accordance with such paragraph;
                            (iii) to provide the intensive 
                        services described in paragraph (3) to 
                        adults and dislocated workers, 
                        respectively, described in such 
                        paragraph; and
                            (iv) to provide training services 
                        described in paragraph (4) to adults 
                        and dislocated workers, respectively, 
                        described in such paragraph.
                    (B) Other funds.--A portion of the funds 
                made available under Federal law authorizing 
                the programs and activities described in 
                section 121(b)(1)(B), including the Wagner-
                Peyser Act (29 U.S.C. 49 et seq.), shall be 
                used as described in clauses (i) and (ii) of 
                subparagraph (A), to the extent not 
                inconsistent with the Federal law involved.
            (2) Core services.--Funds described in paragraph 
        (1)(A) shall be used to provide core services, which 
        shall be available to individuals who are adults or 
        dislocated workers through the one-stop delivery system 
        and shall, at a minimum, include--
                    (A) determinations of whether the 
                individuals are eligible to receive assistance 
                under this subtitle;
                    (B) outreach, intake (which may include 
                worker profiling), and orientation to the 
                information and other services available 
                through the one-stop delivery system;
                    (C) initial assessment of skill levels, 
                aptitudes, abilities, and supportive service 
                needs;
                    (D) job search and placement assistance, 
                and where appropriate, career counseling;
                    (E) provision of employment statistics 
                information, including the provision of 
                accurate information relating to local, 
                regional, and national labor market areas, 
                including--
                            (i) job vacancy listings in such 
                        labor market areas;
                            (ii) information on job skills 
                        necessary to obtain the jobs described 
                        in clause (i); and
                            (iii) information relating to local 
                        occupations in demand and the earnings 
                        and skill requirements for such 
                        occupations; and
                    (F) provision of performance information 
                and program cost information on eligible 
                providers of training services as described in 
                section 122, provided by program, and eligible 
                providers of youth activities described in 
                section 123, providers of adult education 
                described in title II, providers of 
                postsecondary vocational education activities 
                and vocational education activities available 
                to school dropouts under the Carl D. Perkins 
                Vocational and Applied Technology Education Act 
                (20 U.S.C. 2301 et seq.), and providers of 
                vocational rehabilitation program activities 
                described in title I of the Rehabilitation Act 
                of 1973 (29 U.S.C. 720 et seq.);
                    (G) provision of information regarding how 
                the local area is performing on the local 
                performance measures and any additional 
                performance information with respect to the 
                one-stop delivery system in the local area;
                    (H) provision of accurate information 
                relating to the availability of supportive 
                services, including child care and 
                transportation, available in the local area, 
                and referral to such services, as appropriate;
                    (I) provision of information regarding 
                filing claims for unemployment compensation;
                    (J) assistance in establishing eligibility 
                for--
                            (i) welfare-to-work activities 
                        authorized under section 403(a)(5) of 
                        the Social Security Act (as added by 
                        section 5001 of the Balanced Budget Act 
                        of 1997) available in the local area; 
                        and
                            (ii) programs of financial aid 
                        assistance for training and education 
                        programs that are not funded under this 
                        Act and are available in the local 
                        area; and
                    (K) followup services, including counseling 
                regarding the workplace, for participants in 
                workforce investment activities authorized 
                under this subtitle who are placed in 
                unsubsidized employment, for not less than 12 
                months after the first day of the employment, 
                as appropriate.
            (3) Intensive services.--
                    (A) In general.--Funds allocated to a local 
                area for adults under paragraph (2)(A) or (3), 
                as appropriate, of section 133(b), and funds 
                allocated to the local area for dislocated 
                workers under section 133(b)(2)(B), shall be 
                used to provide intensive services to adults 
                and dislocated workers, respectively--
                            (i)(I) who are unemployed and are 
                        unable to obtain employment through 
                        core services provided under paragraph 
                        (2); and
                            (II) who have been determined by a 
                        one-stop operator to be in need of more 
                        intensive services in order to obtain 
                        employment; or
                            (ii) who are employed, but who are 
                        determined by a one-stop operator to be 
                        in need of such intensive services in 
                        order to obtain or retain employment 
                        that allows for self-sufficiency.
                    (B) Delivery of services.--Such intensive 
                services shall be provided through the one-stop 
                delivery system--
                            (i) directly through one-stop 
                        operators identified pursuant to 
                        section 121(d); or
                            (ii) through contracts with service 
                        providers, which may include contracts 
                        with public, private for-profit, and 
                        private nonprofit service providers, 
                        approved by the local board.
                    (C) Types of services.--Such intensive 
                services may include the following:
                            (i) Comprehensive and specialized 
                        assessments of the skill levels and 
                        service needs of adults and dislocated 
                        workers, which may include--
                                    (I) diagnostic testing and 
                                use of other assessment tools; 
                                and
                                    (II) in-depth interviewing 
                                and evaluation to identify 
                                employment barriers and 
                                appropriate employment goals.
                            (ii) Development of an individual 
                        employment plan, to identify the 
                        employment goals, appropriate 
                        achievement objectives, and appropriate 
                        combination of services for the 
                        participant to achieve the employment 
                        goals.
                            (iii) Group counseling.
                            (iv) Individual counseling and 
                        career planning.
                            (v) Case management for 
                        participants seeking training services 
                        under paragraph (4).
                            (vi) Short-term prevocational 
                        services, including development of 
                        learning skills, communication skills, 
                        interviewing skills, punctuality, 
                        personal maintenance skills, and 
                        professional conduct, to prepare 
                        individuals for unsubsidized employment 
                        or training.
            (4) Training services.--
                    (A) In general.--Funds allocated to a local 
                area for adults under paragraph (2)(A) or (3), 
                as appropriate, of section 133(b), and funds 
                allocated to a local area for dislocated 
                workers under section 133(b)(2)(B) shall be 
                used to provide training services to adults and 
                dislocated workers, respectively--
                            (i) who have met the eligibility 
                        requirements for intensive services 
                        under paragraph (3)(A) and who are 
                        unable to obtain or retain employment 
                        through such services;
                            (ii) who after an interview, 
                        evaluation, or assessment, and case 
                        management, have been determined by a 
                        one-stop operator or one-stop partner, 
                        as appropriate, to be in need of 
                        training services and to have the 
                        skills and qualifications to 
                        successfully participate in the 
                        selected program of training services;
                            (iii) who select programs of 
                        training services that are directly 
                        linked to the employment opportunities 
                        in the local area involved or in 
                        another area in which the adults or 
                        dislocated workers receiving such 
                        services are willing to relocate;
                            (iv) who meet the requirements of 
                        subparagraph (B); and
                            (v) who are determined to be 
                        eligible in accordance with the 
                        priority system, if any, in effect 
                        under subparagraph (E).
                    (B) Qualification.--
                            (i) Requirement.--Except as 
                        provided in clause (ii), provision of 
                        such training services shall be limited 
                        to individuals who--
                                    (I) are unable to obtain 
                                other grant assistance for such 
                                services, including Federal 
                                Pell Grants established under 
                                title IV of the Higher 
                                Education Act of 1965 (20 
                                U.S.C. 1070 et seq.); or
                                    (II) require assistance 
                                beyond the assistance made 
                                available under other grant 
                                assistance programs, including 
                                Federal Pell Grants.
                            (ii) Reimbursements.--Training 
                        services may be provided under this 
                        paragraph to an individual who 
                        otherwise meets the requirements of 
                        this paragraph while an application for 
                        a Federal Pell Grant is pending, except 
                        that if such individual is subsequently 
                        awarded a Federal Pell Grant, 
                        appropriate reimbursement shall be made 
                        to the local area from such Federal 
                        Pell Grant.
                    (C) Provider qualification.--Training 
                services shall be provided through providers 
                identified in accordance with section 122.
                    (D) Training services.--Training services 
                may include--
                            (i) occupational skills training, 
                        including training for nontraditional 
                        employment;
                            (ii) on-the-job training;
                            (iii) programs that combine 
                        workplace training with related 
                        instruction, which may include 
                        cooperative education programs;
                            (iv) training programs operated by 
                        the private sector;
                            (v) skill upgrading and retraining;
                            (vi) entrepreneurial training;
                            (vii) job readiness training;
                            (viii) adult education and literacy 
                        activities provided in combination with 
                        services described in any of clauses 
                        (i) through (vii); and
                            (ix) customized training conducted 
                        with a commitment by an employer or 
                        group of employers to employ an 
                        individual upon successful completion 
                        of the training.
                    (E) Priority.--In the event that funds 
                allocated to a local area for adult employment 
                and training activities under paragraph (2)(A) 
                or (3) of section 133(b) are limited, priority 
                shall be given to recipients of public 
                assistance and other low-income individuals for 
                intensive services and training services. The 
                appropriate local board and the Governor shall 
                direct the one-stop operators in the local area 
                with regard to making determinations related to 
                such priority.
                    (F) Consumer choice requirements.--
                            (i) In general.--Training services 
                        provided under this paragraph shall be 
                        provided in a manner that maximizes 
                        consumer choice in the selection of an 
                        eligible provider of such services.
                            (ii) Eligible providers.--Each 
                        local board, through one-stop centers 
                        referred to in subsection (c), shall 
                        make available--
                                    (I) the State list of 
                                eligible providers of training 
                                services required under section 
                                122(e), with a description of 
                                the programs through which the 
                                providers may offer the 
                                training services, and the 
                                information identifying 
                                eligible providers of on-the-
                                job training and customized 
                                training required under section 
                                122(h); and
                                    (II) the performance 
                                information and performance 
                                cost information relating to 
                                eligible providers of training 
                                services described in 
                                subsections (e) and (h) of 
                                section 122.
                    (G) Use of individual training accounts.--
                            (i) In general.--Except as provided 
                        in clause (ii), training services 
                        provided under this paragraph shall be 
                        provided through the use of individual 
                        training accounts in accordance with 
                        this paragraph, and shall be provided 
                        to eligible individuals through the 
                        one-stop delivery system.
                            (ii) Exceptions.--Training services 
                        authorized under this paragraph may be 
                        provided pursuant to a contract for 
                        services in lieu of an individual 
                        training account if the requirements of 
                        subparagraph (F) are met and if--
                                    (I) such services are on-
                                the-job training provided by an 
                                employer or customized 
                                training;
                                    (II) the local board 
                                determines there are an 
                                insufficient number of eligible 
                                providers of training services 
                                in the local area involved 
                                (such as in a rural area) to 
                                accomplish the purposes of a 
                                system of individual training 
                                accounts; or
                                    (III) the local board 
                                determines that there is a 
                                training services program of 
                                demonstrated effectiveness 
                                offered in the local area by a 
                                community-based organization or 
                                another private organization to 
                                serve special participant 
                                populations that face multiple 
                                barriers to employment.
                            (iii) Linkage to occupations in 
                        demand.--Training services provided 
                        under this paragraph shall be directly 
                        linked to occupations that are in 
                        demand in the local area, or in another 
                        area to which an adult or dislocated 
                        worker receiving such services is 
                        willing to relocate, except that a 
                        local board may approve training 
                        services for occupations determined by 
                        the local board to be in sectors of the 
                        economy that have a high potential for 
                        sustained demand or growth in the local 
                        area.
                            (iv) Definition.--In this 
                        subparagraph, the term ``special 
                        participant population that faces 
                        multiple barriers to employment'' means 
                        a population of low-income individuals 
                        that is included in 1 or more of the 
                        following categories:
                                    (I) Individuals with 
                                substantial language or 
                                cultural barriers.
                                    (II) Offenders.
                                    (III) Homeless individuals.
                                    (IV) Other hard-to-serve 
                                populations as defined by the 
                                Governor involved.
    (e) Permissible Local Employment and Training Activities.--
            (1) Discretionary one-stop delivery activities.--
        Funds allocated to a local area for adults under 
        paragraph (2)(A) or (3), as appropriate, of section 
        133(b), and funds allocated to the local area for 
        dislocated workers under section 133(b)(2)(B), may be 
        used to provide, through one-stop delivery described in 
        subsection (c)(2)--
                    (A) customized screening and referral of 
                qualified participants in training services 
                described in subsection (d)(4) to employment; 
                and
                    (B) customized employment-related services 
                to employers on a fee-for-service basis.
            (2) Supportive services.--Funds allocated to a 
        local area for adults under paragraph (2)(A) or (3), as 
        appropriate, of section 133(b), and funds allocated to 
        the local area for dislocated workers under section 
        133(b)(2)(B), may be used to provide supportive 
        services to adults and dislocated workers, 
        respectively--
                    (A) who are participating in programs with 
                activities authorized in any of paragraphs (2), 
                (3), or (4) of subsection (d); and
                    (B) who are unable to obtain such 
                supportive services through other programs 
                providing such services.
            (3) Needs-related payments.--
                    (A) In general.--Funds allocated to a local 
                area for adults under paragraph (2)(A) or (3), 
                as appropriate, of section 133(b), and funds 
                allocated to the local area for dislocated 
                workers under section 133(b)(2)(B), may be used 
                to provide needs-related payments to adults and 
                dislocated workers, respectively, who are 
                unemployed and do not qualify for (or have 
                ceased to qualify for) unemployment 
                compensation for the purpose of enabling such 
                individuals to participate in programs of 
                training services under subsection (d)(4).
                    (B) Additional eligibility requirements.--
                In addition to the requirements contained in 
                subparagraph (A), a dislocated worker who has 
                ceased to qualify for unemployment compensation 
                may be eligible to receive needs-related 
                payments under this paragraph only if such 
                worker was enrolled in the training services--
                            (i) by the end of the 13th week 
                        after the most recent layoff that 
                        resulted in a determination of the 
                        worker's eligibility for employment and 
                        training activities for dislocated 
                        workers under this subtitle; or
                            (ii) if later, by the end of the 
                        8th week after the worker is informed 
                        that a short-term layoff will exceed 6 
                        months.
                    (C) Level of payments.--The level of a 
                needs-related payment made to a dislocated 
                worker under this paragraph shall not exceed 
                the greater of--
                            (i) the applicable level of 
                        unemployment compensation; or
                            (ii) if such worker did not qualify 
                        for unemployment compensation, an 
                        amount equal to the poverty line, for 
                        an equivalent period, which amount 
                        shall be adjusted to reflect changes in 
                        total family income.

                     CHAPTER 6--GENERAL PROVISIONS

SEC. 136. PERFORMANCE ACCOUNTABILITY SYSTEM.

    (a) Purpose.--The purpose of this section is to establish a 
comprehensive performance accountability system, comprised of 
the activities described in this section, to assess the 
effectiveness of States and local areas in achieving continuous 
improvement of workforce investment activities funded under 
this subtitle, in order to optimize the return on investment of 
Federal funds in statewide and local workforce investment 
activities.
    (b) State Performance Measures.--
            (1) In general.--For each State, the State 
        performance measures shall consist of--
                    (A)(i) the core indicators of performance 
                described in paragraph (2)(A) and the customer 
                satisfaction indicator of performance described 
                in paragraph (2)(B); and
                    (ii) additional indicators of performance 
                (if any) identified by the State under 
                paragraph (2)(C); and
                    (B) a State adjusted level of performance 
                for each indicator described in subparagraph 
                (A).
            (2) Indicators of performance.--
                    (A) Core indicators of performance.--
                            (i) In general.--The core 
                        indicators of performance for 
                        employment and training activities 
                        authorized under section 134 (except 
                        for self-service and informational 
                        activities) and (for participants who 
                        are eligible youth age 19 through 21) 
                        for youth activities authorized under 
                        section 129 shall consist of--
                                    (I) entry into unsubsidized 
                                employment;
                                    (II) retention in 
                                unsubsidized employment 6 
                                months after entry into the 
                                employment;
                                    (III) earnings received in 
                                unsubsidized employment 6 
                                months after entry into the 
                                employment; and
                                    (IV) attainment of a 
                                recognized credential relating 
                                to achievement of educational 
                                skills, which may include 
                                attainment of a secondary 
                                school diploma or its 
                                recognized equivalent, or 
                                occupational skills, by 
                                participants who enter 
                                unsubsidized employment, or by 
                                participants who are eligible 
                                youth age 19 through 21 who 
                                enter postsecondary education, 
                                advanced training, or 
                                unsubsidized employment.
                            (ii) Core indicators for eligible 
                        youth.--The core indicators of 
                        performance (for participants who are 
                        eligible youth age 14 through 18) for 
                        youth activities authorized under 
                        section 129, shall include--
                                    (I) attainment of basic 
                                skills and, as appropriate, 
                                work readiness or occupational 
                                skills;
                                    (II) attainment of 
                                secondary school diplomas and 
                                their recognized equivalents; 
                                and
                                    (III) placement and 
                                retention in postsecondary 
                                education or advanced training, 
                                or placement and retention in 
                                military service, employment, 
                                or qualified apprenticeships.
                    (B) Customer satisfaction indicators.--The 
                customer satisfaction indicator of performance 
                shall consist of customer satisfaction of 
                employers and participants with services 
                received from the workforce investment 
                activities authorized under this subtitle. 
                Customer satisfaction may be measured through 
                surveys conducted after the conclusion of 
                participation in the workforce investment 
                activities.
                    (C) Additional indicators.--A State may 
                identify in the State plan additional 
                indicators for workforce investment activities 
                authorized under this subtitle.
            (3) Levels of performance.--
                    (A) State adjusted levels of performance 
                for core indicators and customer satisfaction 
                indicator.--
                            (i) In general.--For each State 
                        submitting a State plan, there shall be 
                        established, in accordance with this 
                        subparagraph, levels of performance for 
                        each of the core indicators of 
                        performance described in paragraph 
                        (2)(A) and the customer satisfaction 
                        indicator described in paragraph (2)(B) 
                        for workforce investment activities 
                        authorized under this subtitle. The 
                        levels of performance established under 
                        this subparagraph shall, at a minimum--
                                    (I) be expressed in an 
                                objective, quantifiable, and 
                                measurable form; and
                                    (II) show the progress of 
                                the State toward continuously 
                                improving in performance.
                            (ii) Identification in state 
                        plan.--Each State shall identify, in 
                        the State plan submitted under section 
                        112, expected levels of performance for 
                        each of the core indicators of 
                        performance and the customer 
                        satisfaction indicator of performance, 
                        for the first 3 program years covered 
                        by the State plan.
                            (iii) Agreement on state adjusted 
                        levels of performance for first 3 
                        years.--In order to ensure an optimal 
                        return on the investment of Federal 
                        funds in workforce investment 
                        activities authorized under this 
                        subtitle, the Secretary and each 
                        Governor shall reach agreement on 
                        levels of performance for each of the 
                        core indicators of performance and the 
                        customer satisfaction indicator of 
                        performance, for the first 3 program 
                        years covered by the State plan, taking 
                        into account the levels identified in 
                        the State plan under clause (ii) and 
                        the factors described in clause (iv). 
                        The levels agreed to under this clause 
                        shall be considered to be the State 
                        adjusted levels of performance for the 
                        State for such years and shall be 
                        incorporated into the State plan prior 
                        to the approval of such plan.
                            (iv) Factors.--The agreement 
                        described in clause (iii) or (v) shall 
                        take into account--
                                    (I) the extent to which the 
                                levels involved will assist the 
                                State in attaining a high level 
                                of customer satisfaction;
                                    (II) how the levels 
                                involved compare with the State 
                                adjusted levels of performance 
                                established for other States, 
                                taking into account factors 
                                including differences in 
                                economic conditions, the 
                                characteristics of participants 
                                when the participants entered 
                                the program, and the services 
                                to be provided; and
                                    (III) the extent to which 
                                such levels involved promote 
                                continuous improvement in 
                                performance on the performance 
                                measures by such State and 
                                ensure optimal return on the 
                                investment of Federal funds.
                            (v) Agreement on state adjusted 
                        levels of performance for 4th and 5th 
                        years.--Prior to the fourth program 
                        year covered by the State plan, the 
                        Secretary and each Governor shall reach 
                        agreement on levels of performance for 
                        each of the core indicators of 
                        performance and the customer 
                        satisfaction indicator of performance, 
                        for the fourth and fifth program years 
                        covered by the State plan, taking into 
                        account the factors described in clause 
                        (iv). The levels agreed to under this 
                        clause shall be considered to be the 
                        State adjusted levels of performance 
                        for the State for such years and shall 
                        be incorporated into the State plan.
                            (vi) Revisions.--If unanticipated 
                        circumstances arise in a State 
                        resulting in a significant change in 
                        the factors described in clause 
                        (iv)(II), the Governor may request that 
                        the State adjusted levels of 
                        performance agreed to under clause 
                        (iii) or (v) be revised. The Secretary, 
                        after collaboration with the 
                        representatives described in subsection 
                        (i), shall issue objective criteria and 
                        methods for making such revisions.
                    (B) Levels of performance for additional 
                indicators.--The State may identify, in the 
                State plan, State levels of performance for 
                each of the additional indicators described in 
                paragraph (2)(C). Such levels shall be 
                considered to be State adjusted levels of 
                performance for purposes of this title.
    (c) Local Performance Measures.--
            (1) In general.--For each local area in a State, 
        the local performance measures shall consist of--
                    (A)(i) the core indicators of performance 
                described in subsection (b)(2)(A), and the 
                customer satisfaction indicator of performance 
                described in subsection (b)(2)(B), for 
                activities described in such subsections, other 
                than statewide workforce investment activities; 
                and
                    (ii) additional indicators of performance 
                (if any) identified by the State under 
                subsection (b)(2)(C) for activities described 
                in such subsection, other than statewide 
                workforce investment activities; and
                    (B) a local level of performance for each 
                indicator described in subparagraph (A).
            (2) Local level of performance.--The local board, 
        the chief elected official, and the Governor shall 
        negotiate and reach agreement on the local levels of 
        performance based on the State adjusted levels of 
        performance established under subsection (b).
            (3) Determinations.--In determining such local 
        levels of performance, the local board, the chief 
        elected official, and the Governor shall take into 
        account the specific economic, demographic, and other 
        characteristics of the populations to be served in the 
        local area.
    (d) Report.--
            (1) In general.--Each State that receives an 
        allotment under section 127 or 132 shall annually 
        prepare and submit to the Secretary a report on the 
        progress of the State in achieving State performance 
        measures, including information on the levels of 
        performance achieved by the State with respect to the 
        core indicators of performance and the customer 
        satisfaction indicator. The annual report also shall 
        include information regarding the progress of local 
        areas in the State in achieving local performance 
        measures, including information on the levels of 
        performance achieved by the areas with respect to the 
        core indicators of performance and the customer 
        satisfaction indicator. The report also shall include 
        information on the status of State evaluations of 
        workforce investment activities described in subsection 
        (e).
            (2) Additional information.--In preparing such 
        report, the State shall include, at a minimum, 
        information on participants in workforce investment 
        activities authorized under this subtitle relating to--
                    (A) entry by participants who have 
                completed training services provided under 
                section 134(d)(4) into unsubsidized employment 
                related to the training received;
                    (B) wages at entry into employment for 
                participants in workforce investment activities 
                who entered unsubsidized employment, including 
                the rate of wage replacement for such 
                participants who are dislocated workers;
                    (C) cost of workforce investment activities 
                relative to the effect of the activities on the 
                performance of participants;
                    (D) retention and earnings received in 
                unsubsidized employment 12 months after entry 
                into the employment;
                    (E) performance with respect to the 
                indicators of performance specified in 
                subsection (b)(2)(A) of participants in 
                workforce investment activities who received 
                the training services compared with the 
                performance of participants in workforce 
                investment activities who received only 
                services other than the training services 
                (excluding participants who received only self-
                service and informational activities); and
                    (F) performance with respect to the 
                indicators of performance specified in 
                subsection (b)(2)(A) of recipients of public 
                assistance, out-of-school youth, veterans, 
                individuals with disabilities, displaced 
                homemakers, and older individuals.
            (3) Information dissemination.--The Secretary--
                    (A) shall make the information contained in 
                such reports available to the general public 
                through publication and other appropriate 
                methods;
                    (B) shall disseminate State-by-State 
                comparisons of the information; and
                    (C) shall provide the appropriate 
                congressional committees with copies of such 
                reports.
    (e) Evaluation of State Programs.--
            (1) In general.--Using funds made available under 
        this subtitle, the State, in coordination with local 
        boards in the State, shall conduct ongoing evaluation 
        studies of workforce investment activities carried out 
        in the State under this subtitle in order to promote, 
        establish, implement, and utilize methods for 
        continuously improving the activities in order to 
        achieve high-level performance within, and high-level 
        outcomes from, the statewide workforce investment 
        system. To the maximum extent practicable, the State 
        shall coordinate the evaluations with the evaluations 
        provided for by the Secretary under section 172.
            (2) Design.--The evaluation studies conducted under 
        this subsection shall be designed in conjunction with 
        the State board and local boards and shall include 
        analysis of customer feedback and outcome and process 
        measures in the statewide workforce investment system. 
        The studies may include use of control groups.
            (3) Results.--The State shall periodically prepare 
        and submit to the State board, and local boards in the 
        State, reports containing the results of evaluation 
        studies conducted under this subsection, to promote the 
        efficiency and effectiveness of the statewide workforce 
        investment system in improving employability for 
        jobseekers and competitiveness for employers.
    (f) Fiscal and Management Accountability Information 
Systems.--
            (1) In general.--Using funds made available under 
        this subtitle, the Governor, in coordination with local 
        boards and chief elected officials in the State, shall 
        establish and operate a fiscal and management 
        accountability information system based on guidelines 
        established by the Secretary after consultation with 
        the Governors, local elected officials, and one-stop 
        partners. Such guidelines shall promote efficient 
        collection and use of fiscal and management information 
        for reporting and monitoring the use of funds made 
        available under this subtitle and for preparing the 
        annual report described in subsection (d).
            (2) Wage records.--In measuring the progress of the 
        State on State and local performance measures, a State 
        shall utilize quarterly wage records, consistent with 
        State law. The Secretary shall make arrangements, 
        consistent with State law, to ensure that the wage 
        records of any State are available to any other State 
        to the extent that such wage records are required by 
        the State in carrying out the State plan of the State 
        or completing the annual report described in subsection 
        (d).
            (3) Confidentiality.--In carrying out the 
        requirements of this Act, the State shall comply with 
        section 444 of the General Education Provisions Act (20 
        U.S.C. 1232g) (as added by the Family Educational 
        Rights and Privacy Act of 1974).
    (g) Sanctions for State Failure To Meet State Performance 
Measures.--
            (1) States.--
                    (A) Technical assistance.--If a State fails 
                to meet State adjusted levels of performance 
                relating to indicators described in 
                subparagraph (A) or (B) of subsection (b)(2) 
                for a program for any program year, the 
                Secretary shall, upon request, provide 
                technical assistance in accordance with section 
                170, including assistance in the development of 
                a performance improvement plan.
                    (B) Reduction in amount of grant.--If such 
                failure continues for a second consecutive 
                year, or if a State fails to submit a report 
                under subsection (d) for any program year, the 
                Secretary may reduce by not more than 5 
                percent, the amount of the grant that would (in 
                the absence of this paragraph) be payable to 
                the State under such program for the 
                immediately succeeding program year. Such 
                penalty shall be based on the degree of failure 
                to meet State adjusted levels of performance.
            (2) Funds resulting from reduced allotments.--The 
        Secretary shall use an amount retained, as a result of 
        a reduction in an allotment to a State made under 
        paragraph (1)(B), to provide incentive grants under 
        section 503.
    (h) Sanctions for Local Area Failure To Meet Local 
Performance Measures.--
            (1) Technical assistance.--If a local area fails to 
        meet levels of performance relating to indicators 
        described in subparagraph (A) or (B) of subsection 
        (b)(2) for a program for any program year, the 
        Governor, or upon request by the Governor, the 
        Secretary, shall provide technical assistance, which 
        may include assistance in the development of a 
        performance improvement plan, or the development of a 
        modified local plan.
            (2) Corrective actions.--
                    (A) In general.--If such failure continues 
                for a second consecutive year, the Governor 
                shall take corrective actions, which may 
                include development of a reorganization plan 
                through which the Governor may--
                            (i) require the appointment and 
                        certification of a new local board 
                        (consistent with the criteria 
                        established under section 117(b));
                            (ii) prohibit the use of eligible 
                        providers and one-stop partners 
                        identified as achieving a poor level of 
                        performance; or
                            (iii) take such other actions as 
                        the Governor determines are 
                        appropriate.
                    (B) Appeal by local area.--
                            (i) Appeal to governor.--A local 
                        area that is subject to a 
                        reorganization plan under subparagraph 
                        (A) may, not later than 30 days after 
                        receiving notice of the reorganization 
                        plan, appeal to the Governor to rescind 
                        or revise such plan. In such case, the 
                        Governor shall make a final decision 
                        not later then 30 days after the 
                        receipt of the appeal.
                            (ii) Subsequent action.--The local 
                        area may, not later than 30 days after 
                        receiving a decision from the Governor 
                        pursuant to clause (i), appeal such 
                        decision to the Secretary. In such 
                        case, the Secretary shall make a final 
                        decision not later than 30 days after 
                        the receipt of the appeal.
                    (C) Effective date.--The decision made by 
                the Governor under clause (i) of subparagraph 
                (B) shall become effective at the time the 
                Governor issues the decision pursuant to such 
                clause. Such decision shall remain effective 
                unless the Secretary rescinds or revises such 
                plan pursuant to clause (ii) of subparagraph 
                (B).
    (i) Other Measures and Terminology.--
            (1) Responsibilities.--In order to ensure 
        nationwide comparability of performance data, the 
        Secretary, after collaboration with representatives of 
        appropriate Federal agencies, and representatives of 
        States and political subdivisions, business and 
        industry, employees, eligible providers of employment 
        and training activities, educators, and participants, 
        with expertise regarding workforce investment policies 
        and workforce investment activities, shall issue--
                    (A) definitions for information required to 
                be reported under subsection (d)(2);
                    (B) terms for a menu of additional 
                indicators of performance described in 
                subsection (b)(2)(C) to assist States in 
                assessing their progress toward State workforce 
                investment goals; and
                    (C) objective criteria and methods 
                described in subsection (b)(3)(A)(vi) for 
                making revisions to levels of performance.
            (2) Definitions for core indicators.--The Secretary 
        and the representatives described in paragraph (1) 
        shall participate in the activities described in 
        section 502 concerning the issuance of definitions for 
        indicators of performance described in subsection 
        (b)(2)(A).
            (3) Assistance.--The Secretary shall make the 
        services of staff available to the representatives to 
        assist the representatives in participating in the 
        collaboration described in paragraph (1) and in the 
        activities described in section 502.

SEC. 137. AUTHORIZATION OF APPROPRIATIONS.

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

                         Subtitle C--Job Corps

SEC. 141. PURPOSES.

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

SEC. 142. DEFINITIONS.

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

SEC. 143. ESTABLISHMENT.

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

SEC. 144. INDIVIDUALS ELIGIBLE FOR THE JOB CORPS.

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

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

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

SEC. 146. ENROLLMENT.

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

SEC. 147. JOB CORPS CENTERS.

    (a) Operators and Service Providers.--
            (1) Eligible entities.--
                    (A) Operators.--The Secretary shall enter 
                into an agreement with a Federal, State, or 
                local agency, an area vocational education 
                school or residential vocational school, or a 
                private organization, for the operation of each 
                Job Corps center.
                    (B) Providers.--The Secretary may enter 
                into an agreement with a local entity to 
                provide activities described in this subtitle 
                to the Job Corps center.
            (2) Selection process.--
                    (A) Competitive basis.--Except as provided 
                in subsections (c) and (d) of section 303 of 
                the Federal Property and Administrative 
                Services Act of 1949 (41 U.S.C. 253), the 
                Secretary shall select on a competitive basis 
                an entity to operate a Job Corps center and 
                entities to provide activities described in 
                this subtitle to the Job Corps center. In 
                developing a solicitation for an operator or 
                service provider, the Secretary shall consult 
                with the Governor of the State in which the 
                center is located, the industry council for the 
                Job Corps center (if established), and the 
                applicable local board regarding the contents 
                of such solicitation, including elements that 
                will promote the consistency of the activities 
                carried out through the center with the 
                objectives set forth in the State plan or in a 
                local plan.
                    (B) Recommendations and considerations.--
                            (i) Operators.--In selecting an 
                        entity to operate a Job Corps center, 
                        the Secretary shall consider--
                                    (I) the ability of the 
                                entity to coordinate the 
                                activities carried out through 
                                the Job Corps center with 
                                activities carried out under 
                                the appropriate State plan and 
                                local plans;
                                    (II) the degree to which 
                                the vocational training that 
                                the entity proposes for the 
                                center reflects local 
                                employment opportunities in the 
                                local areas in which enrollees 
                                at the center intend to seek 
                                employment;
                                    (III) the degree to which 
                                the entity is familiar with the 
                                surrounding communities, 
                                applicable one-stop centers, 
                                and the State and region in 
                                which the center is located; 
                                and
                                    (IV) the past performance 
                                of the entity, if any, relating 
                                to operating or providing 
                                activities described in this 
                                subtitle to a Job Corps center.
                            (ii) Providers.--In selecting a 
                        service provider for a Job Corps 
                        center, the Secretary shall consider 
                        the factors described in subclauses (I) 
                        through (IV) of clause (i), as 
                        appropriate.
    (b) Character and Activities.--Job Corps centers may be 
residential or nonresidential in character, and shall be 
designed and operated so as to provide enrollees, in a well-
supervised setting, with access to activities described in this 
subtitle. In any year, no more than 20 percent of the 
individuals enrolled in the Job Corps may be nonresidential 
participants in the Job Corps.
    (c) Civilian Conservation Centers.--
            (1) In general.--The Job Corps centers may include 
        Civilian Conservation Centers operated under agreements 
        with the Secretary of Agriculture or the Secretary of 
        the Interior, located primarily in rural areas, which 
        shall provide, in addition to other vocational training 
        and assistance, programs of work experience to 
        conserve, develop, or manage public natural resources 
        or public recreational areas or to develop community 
        projects in the public interest.
            (2) Selection process.--The Secretary may select an 
        entity to operate a Civilian Conservation Center on a 
        competitive basis, as provided in subsection (a), if 
        the center fails to meet such national performance 
        standards as the Secretary shall establish.
    (d) Indian Tribes.--
            (1) General authority.--The Secretary may enter 
        into agreements with Indian tribes to operate Job Corps 
        centers for Indians.
            (2) Definitions.--In this subsection, the terms 
        ``Indian'' and ``Indian tribe'', have the meanings 
        given such terms in subsections (d) and (e), 
        respectively, of section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450b).

SEC. 148. PROGRAM ACTIVITIES.

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

SEC. 149. COUNSELING AND JOB PLACEMENT.

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

SEC. 150. SUPPORT.

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

SEC. 151. OPERATING PLAN.

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

SEC. 152. STANDARDS OF CONDUCT.

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

SEC. 153. COMMUNITY PARTICIPATION.

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

SEC. 154. INDUSTRY COUNCILS.

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

SEC. 155. ADVISORY COMMITTEES.

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

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

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

SEC. 157. APPLICATION OF PROVISIONS OF FEDERAL LAW.

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

SEC. 158. SPECIAL PROVISIONS.

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

SEC. 159. MANAGEMENT INFORMATION.

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

SEC. 160. GENERAL PROVISIONS.

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

SEC. 161. AUTHORIZATION OF APPROPRIATIONS.

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

                     Subtitle D--National Programs

SEC. 166. NATIVE AMERICAN PROGRAMS.

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

SEC. 167. MIGRANT AND SEASONAL FARMWORKER PROGRAMS.

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

SEC. 168. VETERANS' WORKFORCE INVESTMENT PROGRAMS.

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

SEC. 169. YOUTH OPPORTUNITY GRANTS.

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

SEC. 170. TECHNICAL ASSISTANCE.

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

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

    (a) Strategic Plan.--
            (1) In general.--After consultation with States, 
        localities, and other interested parties, the Secretary 
        shall, every 2 years, publish in the Federal Register, 
        a plan that describes the demonstration and pilot 
        (including dislocated worker demonstration and pilot), 
        multiservice, research, and multistate project 
        priorities of the Department of Labor concerning 
        employment and training for the 5-year period following 
        the submission of the plan. Copies of the plan shall be 
        transmitted to the appropriate committees of Congress.
            (2) Factors.--The plan published under paragraph 
        (1) shall contain strategies to address national 
        employment and training problems and take into account 
        factors such as--
                    (A) the availability of existing research 
                (as of the date of the publication);
                    (B) the need to ensure results that have 
                interstate validity;
                    (C) the benefits of economies of scale and 
                the efficiency of proposed projects; and
                    (D) the likelihood that the results of the 
                projects will be useful to policymakers and 
                stakeholders in addressing employment and 
                training problems.
    (b) Demonstration and Pilot Projects.--
            (1) In general.--Under a plan published under 
        subsection (a), the Secretary shall, through grants or 
        contracts, carry out demonstration and pilot projects 
        for the purpose of developing and implementing 
        techniques and approaches, and demonstrating the 
        effectiveness of specialized methods, in addressing 
        employment and training needs. Such projects shall 
        include the provision of direct services to individuals 
        to enhance employment opportunities and an evaluation 
        component and may include--
                    (A) the establishment of advanced 
                manufacturing technology skill centers 
                developed through local partnerships of 
                industry, labor, education, community-based 
                organizations, and economic development 
                organizations to meet unmet, high-tech skill 
                needs of local communities;
                    (B) projects that provide training to 
                upgrade the skills of employed workers who 
                reside and are employed in enterprise 
                communities or empowerment zones;
                    (C) programs conducted jointly with the 
                Department of Defense to develop training 
                programs utilizing computer-based and other 
                innovative learning technologies;
                    (D) projects that promote the use of 
                distance learning, enabling students to take 
                courses through the use of media technology 
                such as videos, teleconferencing computers, and 
                the Internet;
                    (E) projects that assist in providing 
                comprehensive services to increase the 
                employment rates of out-of-school youth 
                residing in targeted high poverty areas within 
                empowerment zones and enterprise communities;
                    (F) the establishment of partnerships with 
                national organizations with special expertise 
                in developing, organizing, and administering 
                employment and training services, for 
                individuals with disabilities, at the national, 
                State, and local levels;
                    (G) projects to assist public housing 
                authorities that provide, to public housing 
                residents, job training programs that 
                demonstrate success in upgrading the job skills 
                and promoting employment of the residents; and
                    (H) projects that assist local areas to 
                develop and implement local self-sufficiency 
                standards to evaluate the degree to which 
                participants in programs under this title are 
                achieving self-sufficiency.
            (2) Limitations.--
                    (A) Competitive awards.--Grants or 
                contracts awarded for carrying out 
                demonstration and pilot projects under this 
                subsection shall be awarded only on a 
                competitive basis, except that a noncompetitive 
                award may be made in the case of a project that 
                is funded jointly with other public or private 
                sector entities that provide a portion of the 
                funding for the project.
                    (B) Eligible entities.--Grants or contracts 
                may be awarded under this subsection only to--
                            (i) entities with recognized 
                        expertise in--
                                    (I) conducting national 
                                demonstration projects;
                                    (II) utilizing state-of-
                                the-art demonstration methods; 
                                or
                                    (III) conducting 
                                evaluations of workforce 
                                investment projects; or
                            (ii) State and local entities with 
                        expertise in operating or overseeing 
                        workforce investment programs.
                    (C) Time limits.--The Secretary shall 
                establish appropriate time limits for carrying 
                out demonstration and pilot projects under this 
                subsection.
    (c) Multiservice Projects, Research Projects, and 
Multistate Projects.--
            (1) Multiservice projects.--Under a plan published 
        under subsection (a), the Secretary shall, through 
        grants or contracts, carry out multiservice projects--
                    (A) that will test an array of approaches 
                to the provision of employment and training 
                services to a variety of targeted populations;
                    (B) in which the entity carrying out the 
                project, in conjunction with employers, 
                organized labor, and other groups such as the 
                disability community, will design, develop, and 
                test various training approaches in order to 
                determine effective practices; and
                    (C) that will assist in the development and 
                replication of effective service delivery 
                strategies for targeted populations for the 
                national employment and training system as a 
                whole.
            (2) Research projects.--
                    (A) In general.--Under a plan published 
                under subsection (a), the Secretary shall, 
                through grants or contracts, carry out research 
                projects that will contribute to the solution 
                of employment and training problems in the 
                United States.
                    (B) Formula improvement study and report.--
                            (i) Study.--The Secretary shall 
                        conduct a 2-year study concerning 
                        improvements in the formulas described 
                        in section 132(b)(1)(B) and paragraphs 
                        (2)(A) and (3) of section 133(b) 
                        (regarding distributing funds under 
                        subtitle B to States and local areas 
                        for adult employment and training 
                        activities). In conducting the study, 
                        the Secretary shall examine means of 
                        improving the formulas by--
                                    (I) developing formulas 
                                based on statistically reliable 
                                data;
                                    (II) developing formulas 
                                that are consistent with the 
                                goals and objectives of this 
                                title; and
                                    (III) developing formulas 
                                based on organizational and 
                                financial stability of State 
                                boards and local boards.
                            (ii) Report.--The Secretary shall 
                        prepare and submit to Congress a report 
                        containing the results of the study, 
                        including recommendations for improved 
                        formulas.
            (3) Multistate projects.--
                    (A) In general.--
                            (i) Authority.--Under a plan 
                        published under subsection (a), the 
                        Secretary may, through grants or 
                        contracts, carry out multistate 
                        projects that require demonstrated 
                        expertise that is available at the 
                        national level to effectively 
                        disseminate best practices and models 
                        for implementing employment and 
                        training services, address the 
                        specialized employment and training 
                        needs of particular service 
                        populations, or address industry-wide 
                        skill shortages.
                            (ii) Design of grants.--Grants or 
                        contracts awarded under this subsection 
                        shall be designed to obtain information 
                        relating to the provision of services 
                        under different economic conditions or 
                        to various demographic groups in order 
                        to provide guidance at the national and 
                        State levels about how best to 
                        administer specific employment and 
                        training services.
            (4) Limitations.--
                    (A) Competitive awards.--Grants or 
                contracts awarded for carrying out projects 
                under this subsection in amounts that exceed 
                $100,000 shall be awarded only on a competitive 
                basis, except that a noncompetitive award may 
                be made in the case of a project that is funded 
                jointly with other public or private sector 
                entities that provide a substantial portion of 
                assistance under the grant or contract for the 
                project.
                    (B) Time limits.--A grant or contract shall 
                not be awarded under this subsection to the 
                same organization for more than 3 consecutive 
                years unless such grant or contract is 
                competitively reevaluated within such period.
                    (C) Peer review.--
                            (i) In general.--The Secretary 
                        shall utilize a peer review process--
                                    (I) to review and evaluate 
                                all applications for grants in 
                                amounts that exceed $500,000 
                                that are submitted under this 
                                section; and
                                    (II) to review and 
                                designate exemplary and 
                                promising programs under this 
                                section.
                            (ii) Availability of funds.--The 
                        Secretary is authorized to use funds 
                        provided under this section to carry 
                        out peer review activities under this 
                        subparagraph.
                    (D) Priority.--In awarding grants or 
                contracts under this subsection, priority shall 
                be provided to entities with nationally 
                recognized expertise in the methods, 
                techniques, and knowledge of workforce 
                investment activities and shall include 
                appropriate time limits, established by the 
                Secretary, for the duration of such projects.
    (d) Dislocated Worker Projects.--Of the amount made 
available pursuant to section 132(a)(2)(A) for any program 
year, the Secretary shall use not more than 10 percent of such 
amount to carry out demonstration and pilot projects, 
multiservice projects, and multistate projects, relating to the 
employment and training needs of dislocated workers. Of the 
requirements of this section, such projects shall be subject 
only to the provisions relating to review and evaluation of 
applications under subsection (c)(4)(C). Such projects may 
include demonstration and pilot projects relating to promoting 
self-employment, promoting job creation, averting dislocations, 
assisting dislocated farmers, assisting dislocated fishermen, 
and promoting public works. Such projects shall be administered 
through the dislocated worker office described in section 
173(b).

SEC. 172. EVALUATIONS.

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

SEC. 173. NATIONAL EMERGENCY GRANTS.

    (a) In General.--The Secretary is authorized to award 
national emergency grants in a timely manner--
            (1) to an entity described in subsection (c) to 
        provide employment and training assistance to workers 
        affected by major economic dislocations, such as plant 
        closures, mass layoffs, or closures and realignments of 
        military installations;
            (2) to provide assistance to the Governor of any 
        State within the boundaries of which is an area that 
        has suffered an emergency or a major disaster as 
        defined in paragraphs (1) and (2), respectively, of 
        section 102 of The Robert T. Stafford Disaster Relief 
        and Emergency Assistance Act (42 U.S.C. 5122 (1) and 
        (2)) (referred to in this section as the ``disaster 
        area'') to provide disaster relief employment in the 
        area; and
            (3) to provide additional assistance to a State or 
        local board for eligible dislocated workers in a case 
        in which the State or local board has expended the 
        funds provided under this section to carry out 
        activities described in paragraphs (1) and (2) and can 
        demonstrate the need for additional funds to provide 
        appropriate services for such workers, in accordance 
        with requirements prescribed by the Secretary.
    (b) Administration.--The Secretary shall designate a 
dislocated worker office to coordinate the functions of the 
Secretary under this title relating to employment and training 
activities for dislocated workers, including activities carried 
out under the national emergency grants.
    (c) Employment and Training Assistance Requirements.--
            (1) Grant recipient eligibility.--
                    (A) Application.--To be eligible to receive 
                a grant under subsection (a)(1), an entity 
                shall submit an application to the Secretary at 
                such time, in such manner, and containing such 
                information as the Secretary may require.
                    (B) Eligible entity.--In this paragraph, 
                the term ``entity'' means a State, a local 
                board, an entity described in section 166(c), 
                entities determined to be eligible by the 
                Governor of the State involved, and other 
                entities that demonstrate to the Secretary the 
                capability to effectively respond to the 
                circumstances relating to particular 
                dislocations.
            (2) Participant eligibility.--
                    (A) In general.--In order to be eligible to 
                receive employment and training assistance 
                under a national emergency grant awarded 
                pursuant to subsection (a)(1), an individual 
                shall be--
                            (i) a dislocated worker;
                            (ii) a civilian employee of the 
                        Department of Defense or the Department 
                        of Energy employed at a military 
                        installation that is being closed, or 
                        that will undergo realignment, within 
                        the next 24 months after the date of 
                        the determination of eligibility;
                            (iii) an individual who is employed 
                        in a nonmanagerial position with a 
                        Department of Defense contractor, who 
                        is determined by the Secretary of 
                        Defense to be at-risk of termination 
                        from employment as a result of 
                        reductions in defense expenditures, and 
                        whose employer is converting operations 
                        from defense to nondefense applications 
                        in order to prevent worker layoffs; or
                            (iv) a member of the Armed Forces 
                        who--
                                    (I) was on active duty or 
                                full-time National Guard duty;
                                    (II)(aa) is involuntarily 
                                separated (as defined in 
                                section 1141 of title 10, 
                                United States Code) from active 
                                duty or full-time National 
                                Guard duty; or
                                    (bb) is separated from 
                                active duty or full-time 
                                National Guard duty pursuant to 
                                a special separation benefits 
                                program under section 1174a of 
                                title 10, United States Code, 
                                or the voluntary separation 
                                incentive program under section 
                                1175 of that title;
                                    (III) is not entitled to 
                                retired or retained pay 
                                incident to the separation 
                                described in subclause (II); 
                                and
                                    (IV) applies for such 
                                employment and training 
                                assistance before the end of 
                                the 180-day period beginning on 
                                the date of that separation.
                    (B) Retraining assistance.--The individuals 
                described in subparagraph (A)(iii) shall be 
                eligible for retraining assistance to upgrade 
                skills by obtaining marketable skills needed to 
                support the conversion described in 
                subparagraph (A)(iii).
                    (C) Additional requirements.--The Secretary 
                shall establish and publish additional 
                requirements related to eligibility for 
                employment and training assistance under the 
                national emergency grants to ensure effective 
                use of the funds available for this purpose.
                    (D) Definitions.--In this paragraph, the 
                terms ``military institution'' and 
                ``realignment'' have the meanings given the 
                terms in section 2910 of the Defense Base 
                Closure and Realignment Act of 1990 (Public Law 
                101-510; 10 U.S.C. 2687 note).
    (d) Disaster Relief Employment Assistance Requirements.--
            (1) In general.--Funds made available under 
        subsection (a)(2)--
                    (A) shall be used to provide disaster 
                relief employment on projects that provide 
                food, clothing, shelter, and other humanitarian 
                assistance for disaster victims, and projects 
                regarding demolition, cleaning, repair, 
                renovation, and reconstruction of damaged and 
                destroyed structures, facilities, and lands 
                located within the disaster area;
                    (B) may be expended through public and 
                private agencies and organizations engaged in 
                such projects; and
                    (C) may be expended to provide employment 
                and training activities.
            (2) Eligibility.--An individual shall be eligible 
        to be offered disaster relief employment under 
        subsection (a)(2) if such individual is a dislocated 
        worker, is a long-term unemployed individual, or is 
        temporarily or permanently laid off as a consequence of 
        the disaster.
            (3) Limitations on disaster relief employment.--No 
        individual shall be employed under subsection (a)(2) 
        for more than 6 months for work related to recovery 
        from a single natural disaster.

SEC. 174. AUTHORIZATION OF APPROPRIATIONS.

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

                       Subtitle E--Administration

SEC. 181. REQUIREMENTS AND RESTRICTIONS.

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

SEC. 182. PROMPT ALLOCATION OF FUNDS.

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

SEC. 183. MONITORING.

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

SEC. 184. FISCAL CONTROLS; SANCTIONS.

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

SEC. 185. REPORTS; RECORDKEEPING; INVESTIGATIONS.

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

SEC. 186. ADMINISTRATIVE ADJUDICATION.

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

SEC. 187. JUDICIAL REVIEW.

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

SEC. 188. NONDISCRIMINATION.

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

SEC. 189. ADMINISTRATIVE PROVISIONS.

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

SEC. 190. REFERENCE.

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

SEC. 191. STATE LEGISLATIVE AUTHORITY.

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

SEC. 192. WORKFORCE FLEXIBILITY PLANS.

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

SEC. 193. USE OF CERTAIN REAL PROPERTY.

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

SEC. 194. CONTINUATION OF STATE ACTIVITIES AND POLICIES.

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

SEC. 195. GENERAL PROGRAM REQUIREMENTS.

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

             Subtitle F--Repeals and Conforming Amendments

SEC. 199. REPEALS.

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

SEC. 199A. CONFORMING AMENDMENTS.

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

                 TITLE II--ADULT EDUCATION AND LITERACY

SEC. 201. SHORT TITLE.

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

SEC. 202. PURPOSE.

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

SEC. 203. DEFINITIONS.

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

SEC. 204. HOME SCHOOLS.

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

SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

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

           Subtitle A--Adult Education and Literacy Programs

                     CHAPTER 1--FEDERAL PROVISIONS

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

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

SEC. 212. PERFORMANCE ACCOUNTABILITY SYSTEM.

    (a) Purpose.--The purpose of this section is to establish a 
comprehensive performance accountability system, comprised of 
the activities described in this section, to assess the 
effectiveness of eligible agencies in achieving continuous 
improvement of adult education and literacy activities funded 
under this subtitle, in order to optimize the return on 
investment of Federal funds in adult education and literacy 
activities.
    (b) Eligible Agency Performance Measures.--
            (1) In general.--For each eligible agency, the 
        eligible agency performance measures shall consist of--
                    (A)(i) the core indicators of performance 
                described in paragraph (2)(A); and
                    (ii) additional indicators of performance 
                (if any) identified by the eligible agency 
                under paragraph (2)(B); and
                    (B) an eligible agency adjusted level of 
                performance for each indicator described in 
                subparagraph (A).
            (2) Indicators of performance.--
                    (A) Core indicators of performance.--The 
                core indicators of performance shall include 
                the following:
                            (i) Demonstrated improvements in 
                        literacy skill levels in reading, 
                        writing and speaking the English 
                        language, numeracy, problem-solving, 
                        English language acquisition, and other 
                        literacy skills.
                            (ii) Placement in, retention in, or 
                        completion of, postsecondary education, 
                        training, unsubsidized employment or 
                        career advancement.
                            (iii) Receipt of a secondary school 
                        diploma or its recognized equivalent.
                    (B) Additional indicators.--An eligible 
                agency may identify in the State plan 
                additional indicators for adult education and 
                literacy activities authorized under this 
                subtitle.
            (3) Levels of performance.--
                    (A) Eligible agency adjusted levels of 
                performance for core indicators.--
                            (i) In general.--For each eligible 
                        agency submitting a State plan, there 
                        shall be established, in accordance 
                        with this subparagraph, levels of 
                        performance for each of the core 
                        indicators of performance described in 
                        paragraph (2)(A) for adult education 
                        and literacy activities authorized 
                        under this subtitle. The levels of 
                        performance established under this 
                        subparagraph shall, at a minimum--
                                    (I) be expressed in an 
                                objective, quantifiable, and 
                                measurable form; and
                                    (II) show the progress of 
                                the eligible agency toward 
                                continuously improving in 
                                performance.
                            (ii) Identification in state 
                        plan.--Each eligible agency shall 
                        identify, in the State plan submitted 
                        under section 224, expected levels of 
                        performance for each of the core 
                        indicators of performance for the first 
                        3 program years covered by the State 
                        plan.
                            (iii) Agreement on eligible agency 
                        adjusted levels of performance for 
                        first 3 years.--In order to ensure an 
                        optimal return on the investment of 
                        Federal funds in adult education and 
                        literacy activities authorized under 
                        this subtitle, the Secretary and each 
                        eligible agency shall reach agreement 
                        on levels of performance for each of 
                        the core indicators of performance, for 
                        the first 3 program years covered by 
                        the State plan, taking into account the 
                        levels identified in the State plan 
                        under clause (ii) and the factors 
                        described in clause (iv). The levels 
                        agreed to under this clause shall be 
                        considered to be the eligible agency 
                        adjusted levels of performance for the 
                        eligible agency for such years and 
                        shall be incorporated into the State 
                        plan prior to the approval of such 
                        plan.
                            (iv) Factors.--The agreement 
                        described in clause (iii) or (v) shall 
                        take into account--
                                    (I) how the levels involved 
                                compare with the eligible 
                                agency adjusted levels of 
                                performance established for 
                                other eligible agencies, taking 
                                into account factors including 
                                the characteristics of 
                                participants when the 
                                participants entered the 
                                program, and the services or 
                                instruction to be provided; and
                                    (II) the extent to which 
                                such levels involved promote 
                                continuous improvement in 
                                performance on the performance 
                                measures by such eligible 
                                agency and ensure optimal 
                                return on the investment of 
                                Federal funds.
                            (v) Agreement on eligible agency 
                        adjusted levels of performance for 4th 
                        and 5th years.--Prior to the fourth 
                        program year covered by the State plan, 
                        the Secretary and each eligible agency 
                        shall reach agreement on levels of 
                        performance for each of the core 
                        indicators of performance for the 
                        fourth and fifth program years covered 
                        by the State plan, taking into account 
                        the factors described in clause (iv). 
                        The levels agreed to under this clause 
                        shall be considered to be the eligible 
                        agency adjusted levels of performance 
                        for the eligible agency for such years 
                        and shall be incorporated into the 
                        State plan.
                            (vi) Revisions.--If unanticipated 
                        circumstances arise in a State 
                        resulting in a significant change in 
                        the factors described in clause 
                        (iv)(II), the eligible agency may 
                        request that the eligible agency 
                        adjusted levels of performance agreed 
                        to under clause (iii) or (v) be 
                        revised. The Secretary, after 
                        collaboration with the representatives 
                        described in section 136(j), shall 
                        issue objective criteria and methods 
                        for making such revisions.
                    (B) Levels of performance for additional 
                indicators.--The eligible agency may identify, 
                in the State plan, eligible agency levels of 
                performance for each of the additional 
                indicators described in paragraph (2)(B). Such 
                levels shall be considered to be eligible 
                agency adjusted levels of performance for 
                purposes of this subtitle.
    (c) Report.--
            (1) In general.--Each eligible agency that receives 
        a grant under section 211(b) shall annually prepare and 
        submit to the Secretary a report on the progress of the 
        eligible agency in achieving eligible agency 
        performance measures, including information on the 
        levels of performance achieved by the eligible agency 
        with respect to the core indicators of performance.
            (2) Information dissemination.--The Secretary--
                    (A) shall make the information contained in 
                such reports available to the general public 
                through publication and other appropriate 
                methods;
                    (B) shall disseminate State-by-State 
                comparisons of the information; and
                    (C) shall provide the appropriate 
                committees of Congress with copies of such 
                reports.

                      CHAPTER 2--STATE PROVISIONS

SEC. 221. STATE ADMINISTRATION.

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

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

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

SEC. 223. STATE LEADERSHIP ACTIVITIES.

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

SEC. 224. STATE PLAN.

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

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

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

                      CHAPTER 3--LOCAL PROVISIONS

SEC. 231. GRANTS AND CONTRACTS FOR ELIGIBLE PROVIDERS.

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

SEC. 232. LOCAL APPLICATION.

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

SEC. 233. LOCAL ADMINISTRATIVE COST LIMITS.

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

                     CHAPTER 4--GENERAL PROVISIONS

SEC. 241. ADMINISTRATIVE PROVISIONS.

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

SEC. 242. NATIONAL INSTITUTE FOR LITERACY.

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

SEC. 243. NATIONAL LEADERSHIP ACTIVITIES.

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

                          Subtitle B--Repeals

SEC. 251. REPEALS.

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

           TITLE III--WORKFORCE INVESTMENT-RELATED ACTIVITIES

                     Subtitle A--Wagner-Peyser Act

SEC. 301. DEFINITIONS.

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

SEC. 302. FUNCTIONS.

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

SEC. 303. DESIGNATION OF STATE AGENCIES.

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

SEC. 304. APPROPRIATIONS.

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

SEC. 305. DISPOSITION OF ALLOTTED FUNDS.

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

SEC. 306. STATE PLANS.

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

SEC. 307. REPEAL OF FEDERAL ADVISORY COUNCIL.

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

SEC. 308. REGULATIONS.

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

SEC. 309. EMPLOYMENT STATISTICS.

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

``SEC. 15. EMPLOYMENT STATISTICS.

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

SEC. 310. TECHNICAL AMENDMENTS.

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

SEC. 311. EFFECTIVE DATE.

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

                Subtitle B--Linkages With Other Programs

SEC. 321. TRADE ACT OF 1974.

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

SEC. 322. VETERANS' EMPLOYMENT PROGRAMS.

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

``Sec. 4110B. Coordination and nonduplication

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

SEC. 323. OLDER AMERICANS ACT OF 1965.

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

         Subtitle C--Twenty-First Century Workforce Commission

SEC. 331. SHORT TITLE.

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

SEC. 332. FINDINGS.

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

SEC. 333. DEFINITIONS.

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

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

    (a) Establishment.--There is established a commission to be 
known as the Twenty-First Century Workforce Commission.
    (b) Membership.--
            (1) Composition.--
                    (A) In general.--The Commission shall be 
                composed of 15 voting members, of which--
                            (i) 5 members shall be appointed by 
                        the President;
                            (ii) 5 members shall be appointed 
                        by the Majority Leader of the Senate; 
                        and
                            (iii) 5 members shall be appointed 
                        by the Speaker of the House of 
                        Representatives.
                    (B) Governmental representatives.--Of the 
                members appointed under this subsection, 3 
                members shall be representatives of the 
                governments of States and political 
                subdivisions of States, 1 of whom shall be 
                appointed by the President, 1 of whom shall be 
                appointed by the Majority Leader of the Senate, 
                and 1 of whom shall be appointed by the Speaker 
                of the House of Representatives.
                    (C) Educators.--Of the members appointed 
                under this subsection, 3 shall be educators who 
                are selected from among elementary, secondary, 
                vocational, and postsecondary educators--
                            (i) 1 of whom shall be appointed by 
                        the President;
                            (ii) 1 of whom shall be appointed 
                        by the Majority Leader of the Senate; 
                        and
                            (iii) 1 of whom shall be appointed 
                        by the Speaker of the House of 
                        Representatives.
                    (D) Business representatives.--
                            (i) In general.--Of the members 
                        appointed under this subsection, 8 
                        shall be representatives of business 
                        entities (at least 3 of which shall be 
                        individuals who are employed by non-
                        information technology business 
                        entities), 2 of whom shall be appointed 
                        by the President, 3 of whom shall be 
                        appointed by the Majority Leader of the 
                        Senate, and 3 of whom shall be 
                        appointed by the Speaker of the House 
                        of Representatives.
                            (ii) Size.--Members appointed under 
                        this subsection in accordance with 
                        clause (i) shall, to the extent 
                        practicable, include individuals from 
                        business entities of a size that is 
                        small or average.
                    (E) Labor representative.--Of the members 
                appointed under this subsection, 1 shall be a 
                representative of a labor organization who has 
                been nominated by a national labor federation 
                and who shall be appointed by the President.
                    (F) Ex-officio members.--The Commission 
                shall include 2 non-voting members, of which--
                            (i) 1 member shall be an officer or 
                        employee of the Department of Labor, 
                        who shall be appointed by the 
                        President; and
                            (ii) 1 member shall be an officer 
                        or employee of the Department of 
                        Education, who shall be appointed by 
                        the President.
            (2) Date.--The appointments of the members of the 
        Commission shall be made by the later of--
                    (A) October 31, 1998; or
                    (B) the date that is 45 days after the date 
                of enactment of this Act.
    (c) Period of Appointment; Vacancies.--Members shall be 
appointed for the life of the Commission. Any vacancy in the 
Commission shall not affect its powers, but shall be filled in 
the same manner as the original appointment.
    (d) Initial Meeting.--No later than 30 days after the date 
on which all members of the Commission have been appointed, the 
Commission shall hold its first meeting.
    (e) Meetings.--The Commission shall meet at the call of the 
Chairperson.
    (f) Quorum.--A majority of the members of the Commission 
shall constitute a quorum, but a lesser number of members may 
hold hearings.
    (g) Chairperson and Vice Chairperson.--The Commission shall 
select by vote a chairperson and vice chairperson from among 
its voting members.

SEC. 335. DUTIES OF THE COMMISSION.

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

SEC. 336. POWERS OF THE COMMISSION.

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

SEC. 337. COMMISSION PERSONNEL MATTERS.

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

SEC. 338. TERMINATION OF THE COMMISSION.

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

SEC. 339. AUTHORIZATION OF APPROPRIATIONS.

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

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

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

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

            TITLE IV--REHABILITATION ACT AMENDMENTS OF 1998

SEC. 401. SHORT TITLE.

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

SEC. 402. TITLE.

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

SEC. 403. GENERAL PROVISIONS.

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

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

    ``(a) Short Title.--This Act may be cited as the 
`Rehabilitation Act of 1973'.
    ``(b) Table of Contents.--The table of contents for this 
Act is as follows:

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

              ``TITLE I--VOCATIONAL REHABILITATION SERVICES

                      ``Part A--General Provisions

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

           ``Part B--Basic Vocational Rehabilitation Services

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

      ``Part C--American Indian Vocational Rehabilitation Services

``Sec. 121. Vocational rehabilitation services grants.

     ``Part D--Vocational Rehabilitation Services Client Information

``Sec. 131. Data sharing.

                    ``TITLE II--RESEARCH AND TRAINING

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

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

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

               ``TITLE IV--NATIONAL COUNCIL ON DISABILITY

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

                     ``TITLE V--RIGHTS AND ADVOCACY

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

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

``Sec. 601. Short title.

                    ``Part A--Projects With Industry

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

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

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

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

         ``Chapter 1--Individuals With Significant Disabilities

                      ``Part A--General Provisions

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

                  ``Part B--Independent Living Services

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

                ``Part C--Centers for Independent Living

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

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

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


                      ``findings; purpose; policy


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


                ``rehabilitation services administration


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


                           ``advance funding


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


                            ``joint funding


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

``SEC. 7. DEFINITIONS.

    ``For the purposes of this Act:
            ``(1) The term `administrative costs' means 
        expenditures incurred in the performance of 
        administrative functions under the vocational 
        rehabilitation program carried out under title I, 
        including expenses related to program planning, 
        development, monitoring, and evaluation, including 
        expenses for--
                    ``(A) quality assurance;
                    ``(B) budgeting, accounting, financial 
                management, information systems, and related 
                data processing;
                    ``(C) providing information about the 
                program to the public;
                    ``(D) technical assistance and support 
                services to other State agencies, private 
                nonprofit organizations, and businesses and 
                industries, except for technical assistance and 
                support services described in section 
                103(b)(5);
                    ``(E) the State Rehabilitation Council and 
                other advisory committees;
                    ``(F) professional organization membership 
                dues for designated State unit employees;
                    ``(G) the removal of architectural barriers 
                in State vocational rehabilitation agency 
                offices and State operated rehabilitation 
                facilities;
                    ``(H) operating and maintaining designated 
                State unit facilities, equipment, and grounds;
                    ``(I) supplies;
                    ``(J) administration of the comprehensive 
                system of personnel development described in 
                section 101(a)(7), including personnel 
                administration, administration of affirmative 
                action plans, and training and staff 
                development;
                    ``(K) administrative salaries, including 
                clerical and other support staff salaries, in 
                support of these administrative functions;
                    ``(L) travel costs related to carrying out 
                the program, other than travel costs related to 
                the provision of services;
                    ``(M) costs incurred in conducting reviews 
                of rehabilitation counselor or coordinator 
                determinations under section 102(c); and
                    ``(N) legal expenses required in the 
                administration of the program.
            ``(2) Assessment for determining eligibility and 
        vocational rehabilitation needs.--The term `assessment 
        for determining eligibility and vocational 
        rehabilitation needs' means, as appropriate in each 
        case--
                    ``(A)(i) a review of existing data--
                            ``(I) to determine whether an 
                        individual is eligible for vocational 
                        rehabilitation services; and
                            ``(II) to assign priority for an 
                        order of selection described in section 
                        101(a)(5)(A) in the States that use an 
                        order of selection pursuant to section 
                        101(a)(5)(A); and
                    ``(ii) to the extent necessary, the 
                provision of appropriate assessment activities 
                to obtain necessary additional data to make 
                such determination and assignment;
                    ``(B) to the extent additional data is 
                necessary to make a determination of the 
                employment outcomes, and the objectives, 
                nature, and scope of vocational rehabilitation 
                services, to be included in the individualized 
                plan for employment of an eligible individual, 
                a comprehensive assessment to determine the 
                unique strengths, resources, priorities, 
                concerns, abilities, capabilities, interests, 
                and informed choice, including the need for 
                supported employment, of the eligible 
                individual, which comprehensive assessment--
                            ``(i) is limited to information 
                        that is necessary to identify the 
                        rehabilitation needs of the individual 
                        and to develop the individualized plan 
                        for employment of the eligible 
                        individual;
                            ``(ii) uses, as a primary source of 
                        such information, to the maximum extent 
                        possible and appropriate and in 
                        accordance with confidentiality 
                        requirements--
                                    ``(I) existing information 
                                obtained for the purposes of 
                                determining the eligibility of 
                                the individual and assigning 
                                priority for an order of 
                                selection described in section 
                                101(a)(5)(A) for the 
                                individual; and
                                    ``(II) such information as 
                                can be provided by the 
                                individual and, where 
                                appropriate, by the family of 
                                the individual;
                            ``(iii) may include, to the degree 
                        needed to make such a determination, an 
                        assessment of the personality, 
                        interests, interpersonal skills, 
                        intelligence and related functional 
                        capacities, educational achievements, 
                        work experience, vocational aptitudes, 
                        personal and social adjustments, and 
                        employment opportunities of the 
                        individual, and the medical, 
                        psychiatric, psychological, and other 
                        pertinent vocational, educational, 
                        cultural, social, recreational, and 
                        environmental factors, that affect the 
                        employment and rehabilitation needs of 
                        the individual; and
                            ``(iv) may include, to the degree 
                        needed, an appraisal of the patterns of 
                        work behavior of the individual and 
                        services needed for the individual to 
                        acquire occupational skills, and to 
                        develop work attitudes, work habits, 
                        work tolerance, and social and behavior 
                        patterns necessary for successful job 
                        performance, including the utilization 
                        of work in real job situations to 
                        assess and develop the capacities of 
                        the individual to perform adequately in 
                        a work environment;
                    ``(C) referral, for the provision of 
                rehabilitation technology services to the 
                individual, to assess and develop the 
                capacities of the individual to perform in a 
                work environment; and
                    ``(D) an exploration of the individual's 
                abilities, capabilities, and capacity to 
                perform in work situations, which shall be 
                assessed periodically during trial work 
                experiences, including experiences in which the 
                individual is provided appropriate supports and 
                training.
            ``(3) Assistive technology device.--The term 
        `assistive technology device' has the meaning given 
        such term in section 3(2) of the Technology-Related 
        Assistance for Individuals With Disabilities Act of 
        1988 (29 U.S.C. 2202(2)), except that the reference in 
        such section to the term `individuals with 
        disabilities' shall be deemed to mean more than one 
        individual with a disability as defined in paragraph 
        (20)(A).
            ``(4) Assistive technology service.--The term 
        `assistive technology service' has the meaning given 
        such term in section 3(3) of the Technology-Related 
        Assistance for Individuals With Disabilities Act of 
        1988 (29 U.S.C. 2202(3)), except that the reference in 
        such section--
                    ``(A) to the term `individual with a 
                disability' shall be deemed to mean an 
                individual with a disability, as defined in 
                paragraph (20)(A); and
                    ``(B) to the term `individuals with 
                disabilities' shall be deemed to mean more than 
                one such individual.
            ``(5) Community rehabilitation program.--The term 
        `community rehabilitation program' means a program that 
        provides directly or facilitates the provision of 
        vocational rehabilitation services to individuals with 
        disabilities, and that provides, singly or in 
        combination, for an individual with a disability to 
        enable the individual to maximize opportunities for 
        employment, including career advancement--
                    ``(A) medical, psychiatric, psychological, 
                social, and vocational services that are 
                provided under one management;
                    ``(B) testing, fitting, or training in the 
                use of prosthetic and orthotic devices;
                    ``(C) recreational therapy;
                    ``(D) physical and occupational therapy;
                    ``(E) speech, language, and hearing 
                therapy;
                    ``(F) psychiatric, psychological, and 
                social services, including positive behavior 
                management;
                    ``(G) assessment for determining 
                eligibility and vocational rehabilitation 
                needs;
                    ``(H) rehabilitation technology;
                    ``(I) job development, placement, and 
                retention services;
                    ``(J) evaluation or control of specific 
                disabilities;
                    ``(K) orientation and mobility services for 
                individuals who are blind;
                    ``(L) extended employment;
                    ``(M) psychosocial rehabilitation services;
                    ``(N) supported employment services and 
                extended services;
                    ``(O) services to family members when 
                necessary to the vocational rehabilitation of 
                the individual;
                    ``(P) personal assistance services; or
                    ``(Q) services similar to the services 
                described in one of subparagraphs (A) through 
                (P).
            ``(6) Construction; cost of construction.--
                    ``(A) Construction.--The term 
                `construction' means--
                            ``(i) the construction of new 
                        buildings;
                            ``(ii) the acquisition, expansion, 
                        remodeling, alteration, and renovation 
                        of existing buildings; and
                            ``(iii) initial equipment of 
                        buildings described in clauses (i) and 
                        (ii).
                    ``(B) Cost of construction.--The term 
                ``cost of construction'' includes architects' 
                fees and the cost of acquisition of land in 
                connection with construction but does not 
                include the cost of offsite improvements.
            ``(7) Criminal act.--The term `criminal act' means 
        any crime, including an act, omission, or possession 
        under the laws of the United States or a State or unit 
        of general local government, which poses a substantial 
        threat of personal injury, notwithstanding that by 
        reason of age, insanity, or intoxication or otherwise 
        the person engaging in the act, omission, or possession 
        was legally incapable of committing a crime.
            ``(8) Designated state agency; designated state 
        unit.--
                    ``(A) Designated state agency.--The term 
                `designated State agency' means an agency 
                designated under section 101(a)(2)(A).
                    ``(B) Designated state unit.--The term 
                `designated State unit' means--
                            ``(i) any State agency unit 
                        required under section 
                        101(a)(2)(B)(ii); or
                            ``(ii) in cases in which no such 
                        unit is so required, the State agency 
                        described in section 101(a)(2)(B)(i).
            ``(9) Disability.--The term `disability' means--
                    ``(A) except as otherwise provided in 
                subparagraph (B), a physical or mental 
                impairment that constitutes or results in a 
                substantial impediment to employment; or
                    ``(B) for purposes of sections 2, 14, and 
                15, and titles II, IV, V, and VII, a physical 
                or mental impairment that substantially limits 
                one or more major life activities.
            ``(10) Drug and illegal use of drugs.--
                    ``(A) Drug.--The term `drug' means a 
                controlled substance, as defined in schedules I 
                through V of section 202 of the Controlled 
                Substances Act (21 U.S.C. 812).
                    ``(B) Illegal use of drugs.--The term 
                `illegal use of drugs' means the use of drugs, 
                the possession or distribution of which is 
                unlawful under the Controlled Substances Act. 
                Such term does not include the use of a drug 
                taken under supervision by a licensed health 
                care professional, or other uses authorized by 
                the Controlled Substances Act or other 
                provisions of Federal law.
            ``(11) Employment outcome.--The term `employment 
        outcome' means, with respect to an individual--
                    ``(A) entering or retaining full-time or, 
                if appropriate, part-time competitive 
                employment in the integrated labor market;
                    ``(B) satisfying the vocational outcome of 
                supported employment; or
                    ``(C) satisfying any other vocational 
                outcome the Secretary may determine to be 
                appropriate (including satisfying the 
                vocational outcome of self-employment, 
                telecommuting, or business ownership),
        in a manner consistent with this Act.
            ``(12) Establishment of a community rehabilitation 
        program.--The term `establishment of a community 
        rehabilitation program' includes the acquisition, 
        expansion, remodeling, or alteration of existing 
        buildings necessary to adapt them to community 
        rehabilitation program purposes or to increase their 
        effectiveness for such purposes (subject, however, to 
        such limitations as the Secretary may determine, in 
        accordance with regulations the Secretary shall 
        prescribe, in order to prevent impairment of the 
        objectives of, or duplication of, other Federal laws 
        providing Federal assistance in the construction of 
        facilities for community rehabilitation programs), and 
        may include such additional equipment and staffing as 
        the Commissioner considers appropriate.
            ``(13) Extended services.--The term `extended 
        services' means ongoing support services and other 
        appropriate services, needed to support and maintain an 
        individual with a most significant disability in 
        supported employment, that--
                    ``(A) are provided singly or in combination 
                and are organized and made available in such a 
                way as to assist an eligible individual in 
                maintaining supported employment;
                    ``(B) are based on a determination of the 
                needs of an eligible individual, as specified 
                in an individualized plan for employment; and
                    ``(C) are provided by a State agency, a 
                nonprofit private organization, employer, or 
                any other appropriate resource, after an 
                individual has made the transition from support 
                provided by the designated State unit.
            ``(14) Federal share.--
                    ``(A) In general.--Subject to subparagraph 
                (B), the term `Federal share' means 78.7 
                percent.
                    ``(B) Exception.--The term ``Federal 
                share'' means the share specifically set forth 
                in section 111(a)(3), except that with respect 
                to payments pursuant to part B of title I to 
                any State that are used to meet the costs of 
                construction of those rehabilitation facilities 
                identified in section 103(b)(2) in such State, 
                the Federal share shall be the percentages 
                determined in accordance with the provisions of 
                section 111(a)(3) applicable with respect to 
                the State.
                    ``(C) Relationship to expenditures by a 
                political subdivision.--For the purpose of 
                determining the non-Federal share with respect 
                to a State, expenditures by a political 
                subdivision thereof or by a local agency shall 
                be regarded as expenditures by such State, 
                subject to such limitations and conditions as 
                the Secretary shall by regulation prescribe.
            ``(15) Governor.--The term `Governor' means a chief 
        executive officer of a State.
            ``(16) Impartial hearing officer.--
                    ``(A) In general.--The term `impartial 
                hearing officer' means an individual--
                            ``(i) who is not an employee of a 
                        public agency (other than an 
                        administrative law judge, hearing 
                        examiner, or employee of an institution 
                        of higher education);
                            ``(ii) who is not a member of the 
                        State Rehabilitation Council described 
                        in section 105;
                            ``(iii) who has not been involved 
                        previously in the vocational 
                        rehabilitation of the applicant or 
                        client;
                            ``(iv) who has knowledge of the 
                        delivery of vocational rehabilitation 
                        services, the State plan under section 
                        101, and the Federal and State rules 
                        governing the provision of such 
                        services and training with respect to 
                        the performance of official duties; and
                            ``(v) who has no personal or 
                        financial interest that would be in 
                        conflict with the objectivity of the 
                        individual.
                    ``(B) Construction.--An individual shall 
                not be considered to be an employee of a public 
                agency for purposes of subparagraph (A)(i) 
                solely because the individual is paid by the 
                agency to serve as a hearing officer.
            ``(17) Independent living core services.--The term 
        `independent living core services' means--
                    ``(A) information and referral services;
                    ``(B) independent living skills training;
                    ``(C) peer counseling (including cross-
                disability peer counseling); and
                    ``(D) individual and systems advocacy.
            ``(18) Independent living services.--The term 
        `independent living services' includes--
                    ``(A) independent living core services; and
                    ``(B)(i) counseling services, including 
                psychological, psychotherapeutic, and related 
                services;
                    ``(ii) services related to securing housing 
                or shelter, including services related to 
                community group living, and supportive of the 
                purposes of this Act and of the titles of this 
                Act, and adaptive housing services (including 
                appropriate accommodations to and modifications 
                of any space used to serve, or occupied by, 
                individuals with disabilities);
                    ``(iii) rehabilitation technology;
                    ``(iv) mobility training;
                    ``(v) services and training for individuals 
                with cognitive and sensory disabilities, 
                including life skills training, and interpreter 
                and reader services;
                    ``(vi) personal assistance services, 
                including attendant care and the training of 
                personnel providing such services;
                    ``(vii) surveys, directories, and other 
                activities to identify appropriate housing, 
                recreation opportunities, and accessible 
                transportation, and other support services;
                    ``(viii) consumer information programs on 
                rehabilitation and independent living services 
                available under this Act, especially for 
                minorities and other individuals with 
                disabilities who have traditionally been 
                unserved or underserved by programs under this 
                Act;
                    ``(ix) education and training necessary for 
                living in a community and participating in 
                community activities;
                    ``(x) supported living;
                    ``(xi) transportation, including referral 
                and assistance for such transportation and 
                training in the use of public transportation 
                vehicles and systems;
                    ``(xii) physical rehabilitation;
                    ``(xiii) therapeutic treatment;
                    ``(xiv) provision of needed prostheses and 
                other appliances and devices;
                    ``(xv) individual and group social and 
                recreational services;
                    ``(xvi) training to develop skills 
                specifically designed for youths who are 
                individuals with disabilities to promote self-
                awareness and esteem, develop advocacy and 
                self-empowerment skills, and explore career 
                options;
                    ``(xvii) services for children;
                    ``(xviii) services under other Federal, 
                State, or local programs designed to provide 
                resources, training, counseling, or other 
                assistance, of substantial benefit in enhancing 
                the independence, productivity, and quality of 
                life of individuals with disabilities;
                    ``(xix) appropriate preventive services to 
                decrease the need of individuals assisted under 
                this Act for similar services in the future;
                    ``(xx) community awareness programs to 
                enhance the understanding and integration into 
                society of individuals with disabilities; and
                    ``(xxi) such other services as may be 
                necessary and not inconsistent with the 
                provisions of this Act.
            ``(19) Indian; american indian; indian american; 
        indian tribe.--
                    ``(A) In general.--The terms `Indian', 
                `American Indian', and `Indian American' mean 
                an individual who is a member of an Indian 
                tribe.
                    ``(B) Indian tribe.--The term `Indian 
                tribe' means any Federal or State Indian tribe, 
                band, rancheria, pueblo, colony, or community, 
                including any Alaskan native village or 
                regional village corporation (as defined in or 
                established pursuant to the Alaska Native 
                Claims Settlement Act).
            ``(20) Individual with a disability.--
                    ``(A) In general.--Except as otherwise 
                provided in subparagraph (B), the term 
                `individual with a disability' means any 
                individual who--
                            ``(i) has a physical or mental 
                        impairment which for such individual 
                        constitutes or results in a substantial 
                        impediment to employment; and
                            ``(ii) can benefit in terms of an 
                        employment outcome from vocational 
                        rehabilitation services provided 
                        pursuant to title I, III, or VI.
                    ``(B) Certain programs; limitations on 
                major life activities.--Subject to 
                subparagraphs (C), (D), (E), and (F), the term 
                `individual with a disability' means, for 
                purposes of sections 2, 14, and 15, and titles 
                II, IV, V, and VII of this Act, any person 
                who--
                            ``(i) has a physical or mental 
                        impairment which substantially limits 
                        one or more of such person's major life 
                        activities;
                            ``(ii) has a record of such an 
                        impairment; or
                            ``(iii) is regarded as having such 
                        an impairment.
                    ``(C) Rights and advocacy provisions.--
                            ``(i) In general; exclusion of 
                        individuals engaging in drug use.--For 
                        purposes of title V, the term 
                        `individual with a disability' does not 
                        include an individual who is currently 
                        engaging in the illegal use of drugs, 
                        when a covered entity acts on the basis 
                        of such use.
                            ``(ii) Exception for individuals no 
                        longer engaging in drug use.--Nothing 
                        in clause (i) shall be construed to 
                        exclude as an individual with a 
                        disability an individual who--
                                    ``(I) has successfully 
                                completed a supervised drug 
                                rehabilitation program and is 
                                no longer engaging in the 
                                illegal use of drugs, or has 
                                otherwise been rehabilitated 
                                successfully and is no longer 
                                engaging in such use;
                                    ``(II) is participating in 
                                a supervised rehabilitation 
                                program and is no longer 
                                engaging in such use; or
                                    ``(III) is erroneously 
                                regarded as engaging in such 
                                use, but is not engaging in 
                                such use;
                        except that it shall not be a violation 
                        of this Act for a covered entity to 
                        adopt or administer reasonable policies 
                        or procedures, including but not 
                        limited to drug testing, designed to 
                        ensure that an individual described in 
                        subclause (I) or (II) is no longer 
                        engaging in the illegal use of drugs.
                            ``(iii) Exclusion for certain 
                        services.--Notwithstanding clause (i), 
                        for purposes of programs and activities 
                        providing health services and services 
                        provided under titles I, II, and III, 
                        an individual shall not be excluded 
                        from the benefits of such programs or 
                        activities on the basis of his or her 
                        current illegal use of drugs if he or 
                        she is otherwise entitled to such 
                        services.
                            ``(iv) Disciplinary action.--For 
                        purposes of programs and activities 
                        providing educational services, local 
                        educational agencies may take 
                        disciplinary action pertaining to the 
                        use or possession of illegal drugs or 
                        alcohol against any student who is an 
                        individual with a disability and who 
                        currently is engaging in the illegal 
                        use of drugs or in the use of alcohol 
                        to the same extent that such 
                        disciplinary action is taken against 
                        students who are not individuals with 
                        disabilities. Furthermore, the due 
                        process procedures at section 104.36 of 
                        title 34, Code of Federal Regulations 
                        (or any corresponding similar 
                        regulation or ruling) shall not apply 
                        to such disciplinary actions.
                            ``(v) Employment; exclusion of 
                        alcoholics.--For purposes of sections 
                        503 and 504 as such sections relate to 
                        employment, the term `individual with a 
                        disability' does not include any 
                        individual who is an alcoholic whose 
                        current use of alcohol prevents such 
                        individual from performing the duties 
                        of the job in question or whose 
                        employment, by reason of such current 
                        alcohol abuse, would constitute a 
                        direct threat to property or the safety 
                        of others.
                    ``(D) Employment; exclusion of individuals 
                with certain diseases or infections.--For the 
                purposes of sections 503 and 504, as such 
                sections relate to employment, such term does 
                not include an individual who has a currently 
                contagious disease or infection and who, by 
                reason of such disease or infection, would 
                constitute a direct threat to the health or 
                safety of other individuals or who, by reason 
                of the currently contagious disease or 
                infection, is unable to perform the duties of 
                the job.
                    ``(E) Rights provisions; exclusion of 
                individuals on basis of homosexuality or 
                bisexuality.--For the purposes of sections 501, 
                503, and 504--
                            ``(i) for purposes of the 
                        application of subparagraph (B) to such 
                        sections, the term `impairment' does 
                        not include homosexuality or 
                        bisexuality; and
                            ``(ii) therefore the term 
                        `individual with a disability' does not 
                        include an individual on the basis of 
                        homosexuality or bisexuality.
                    ``(F) Rights provisions; exclusion of 
                individuals on basis of certain disorders.--For 
                the purposes of sections 501, 503, and 504, the 
                term `individual with a disability' does not 
                include an individual on the basis of--
                            ``(i) transvestism, transsexualism, 
                        pedophilia, exhibitionism, voyeurism, 
                        gender identity disorders not resulting 
                        from physical impairments, or other 
                        sexual behavior disorders;
                            ``(ii) compulsive gambling, 
                        kleptomania, or pyromania; or
                            ``(iii) psychoactive substance use 
                        disorders resulting from current 
                        illegal use of drugs.
                    ``(G) Individuals with disabilities.--The 
                term `individuals with disabilities' means more 
                than one individual with a disability.
            ``(21) Individual with a significant disability.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B) or (C), the term `individual 
                with a significant disability' means an 
                individual with a disability--
                            ``(i) who has a severe physical or 
                        mental impairment which seriously 
                        limits one or more functional 
                        capacities (such as mobility, 
                        communication, self-care, self-
                        direction, interpersonal skills, work 
                        tolerance, or work skills) in terms of 
                        an employment outcome;
                            ``(ii) whose vocational 
                        rehabilitation can be expected to 
                        require multiple vocational 
                        rehabilitation services over an 
                        extended period of time; and
                            ``(iii) who has one or more 
                        physical or mental disabilities 
                        resulting from amputation, arthritis, 
                        autism, blindness, burn injury, cancer, 
                        cerebral palsy, cystic fibrosis, 
                        deafness, head injury, heart disease, 
                        hemiplegia, hemophilia, respiratory or 
                        pulmonary dysfunction, mental 
                        retardation, mental illness, multiple 
                        sclerosis, muscular dystrophy, musculo-
                        skeletal disorders, neurological 
                        disorders (including stroke and 
                        epilepsy), paraplegia, quadriplegia, 
                        and other spinal cord conditions, 
                        sickle cell anemia, specific learning 
                        disability, end-stage renal disease, or 
                        another disability or combination of 
                        disabilities determined on the basis of 
                        an assessment for determining 
                        eligibility and vocational 
                        rehabilitation needs described in 
                        subparagraphs (A) and (B) of paragraph 
                        (2) to cause comparable substantial 
                        functional limitation.
                    ``(B) Independent living services and 
                centers for independent living.--For purposes 
                of title VII, the term `individual with a 
                significant disability' means an individual 
                with a severe physical or mental impairment 
                whose ability to function independently in the 
                family or community or whose ability to obtain, 
                maintain, or advance in employment is 
                substantially limited and for whom the delivery 
                of independent living services will improve the 
                ability to function, continue functioning, or 
                move towards functioning independently in the 
                family or community or to continue in 
                employment, respectively.
                    ``(C) Research and training.--For purposes 
                of title II, the term `individual with a 
                significant disability' includes an individual 
                described in subparagraph (A) or (B).
                    ``(D) Individuals with significant 
                disabilities.--The term `individuals with 
                significant disabilities' means more than one 
                individual with a significant disability.
                    ``(E) Individual with a most significant 
                disability.--
                            ``(i) In general.--The term 
                        `individual with a most significant 
                        disability', used with respect to an 
                        individual in a State, means an 
                        individual with a significant 
                        disability who meets criteria 
                        established by the State under section 
                        101(a)(5)(C).
                            ``(ii) Individuals with the most 
                        significant disabilities.--The term 
                        `individuals with the most significant 
                        disabilities' means more than one 
                        individual with a most significant 
                        disability.
            ``(22) Individual's representative; applicant's 
        representative.--The terms `individual's 
        representative' and `applicant's representative' mean a 
        parent, a family member, a guardian, an advocate, or an 
        authorized representative of an individual or 
        applicant, respectively.
            ``(23) Institution of higher education.--The term 
        `institution of higher education' has the meaning given 
        the term in section 1201(a) of the Higher Education Act 
        of 1965 (20 U.S.C. 1141(a)).
            ``(24) Local agency.--The term `local agency' means 
        an agency of a unit of general local government or of 
        an Indian tribe (or combination of such units or 
        tribes) which has an agreement with the designated 
        State agency to conduct a vocational rehabilitation 
        program under the supervision of such State agency in 
        accordance with the State plan approved under section 
        101. Nothing in the preceding sentence of this 
        paragraph or in section 101 shall be construed to 
        prevent the local agency from arranging to utilize 
        another local public or nonprofit agency to provide 
        vocational rehabilitation services if such an 
        arrangement is made part of the agreement specified in 
        this paragraph.
            ``(25) Local workforce investment board.--The term 
        `local workforce investment board' means a local 
        workforce investment board established under section 
        117 of the Workforce Investment Act of 1998.
            ``(26) Nonprofit.--The term `nonprofit', when used 
        with respect to a community rehabilitation program, 
        means a community rehabilitation program carried out by 
        a corporation or association, no part of the net 
        earnings of which inures, or may lawfully inure, to the 
        benefit of any private shareholder or individual and 
        the income of which is exempt from taxation under 
        section 501(c)(3) of the Internal Revenue Code of 1986.
            ``(27) Ongoing support services.--The term `ongoing 
        support services' means services--
                    ``(A) provided to individuals with the most 
                significant disabilities;
                    ``(B) provided, at a minimum, twice 
                monthly--
                            ``(i) to make an assessment, 
                        regarding the employment situation, at 
                        the worksite of each such individual in 
                        supported employment, or, under special 
                        circumstances, especially at the 
                        request of the client, off site; and
                            ``(ii) based on the assessment, to 
                        provide for the coordination or 
                        provision of specific intensive 
                        services, at or away from the worksite, 
                        that are needed to maintain employment 
                        stability; and
                    ``(C) consisting of--
                            ``(i) a particularized assessment 
                        supplementary to the comprehensive 
                        assessment described in paragraph 
                        (2)(B);
                            ``(ii) the provision of skilled job 
                        trainers who accompany the individual 
                        for intensive job skill training at the 
                        worksite;
                            ``(iii) job development, job 
                        retention, and placement services;
                            ``(iv) social skills training;
                            ``(v) regular observation or 
                        supervision of the individual;
                            ``(vi) followup services such as 
                        regular contact with the employers, the 
                        individuals, the individuals' 
                        representatives, and other appropriate 
                        individuals, in order to reinforce and 
                        stabilize the job placement;
                            ``(vii) facilitation of natural 
                        supports at the worksite;
                            ``(viii) any other service 
                        identified in section 103; or
                            ``(ix) a service similar to another 
                        service described in this subparagraph.
            ``(28) Personal assistance services.--The term 
        `personal assistance services' means a range of 
        services, provided by one or more persons, designed to 
        assist an individual with a disability to perform daily 
        living activities on or off the job that the individual 
        would typically perform if the individual did not have 
        a disability. Such services shall be designed to 
        increase the individual's control in life and ability 
        to perform everyday activities on or off the job.
            ``(29) Public or nonprofit.--The term `public or 
        nonprofit', used with respect to an agency or 
        organization, includes an Indian tribe.
            ``(30) Rehabilitation technology.--The term 
        `rehabilitation technology' means the systematic 
        application of technologies, engineering methodologies, 
        or scientific principles to meet the needs of and 
        address the barriers confronted by individuals with 
        disabilities in areas which include education, 
        rehabilitation, employment, transportation, independent 
        living, and recreation. The term includes 
        rehabilitation engineering, assistive technology 
        devices, and assistive technology services.
            ``(31) Secretary.--The term `Secretary', except 
        when the context otherwise requires, means the 
        Secretary of Education.
            ``(32) State.--The term `State' includes, in 
        addition to each of the several States of the United 
        States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the United States Virgin Islands, Guam, 
        American Samoa, and the Commonwealth of the Northern 
        Mariana Islands.
            ``(33) State workforce investment board.--The term 
        `State workforce investment board' means a State 
        workforce investment board established under section 
        111 of the Workforce Investment Act of 1998.
            ``(34) Statewide workforce investment system.--The 
        term `statewide workforce investment system' means a 
        system described in section 111(d)(2) of the Workforce 
        Investment Act of 1998.
            ``(35) Supported employment.--
                    ``(A) In general.--The term `supported 
                employment' means competitive work in 
                integrated work settings, or employment in 
                integrated work settings in which individuals 
                are working toward competitive work, consistent 
                with the strengths, resources, priorities, 
                concerns, abilities, capabilities, interests, 
                and informed choice of the individuals, for 
                individuals with the most significant 
                disabilities--
                            ``(i)(I) for whom competitive 
                        employment has not traditionally 
                        occurred; or
                            ``(II) for whom competitive 
                        employment has been interrupted or 
                        intermittent as a result of a 
                        significant disability; and
                            ``(ii) who, because of the nature 
                        and severity of their disability, need 
                        intensive supported employment services 
                        for the period, and any extension, 
                        described in paragraph (36)(C) and 
                        extended services after the transition 
                        described in paragraph (13)(C) in order 
                        to perform such work.
                    ``(B) Certain transitional employment.--
                Such term includes transitional employment for 
                persons who are individuals with the most 
                significant disabilities due to mental illness.
            ``(36) Supported employment services.--The term 
        `supported employment services' means ongoing support 
        services and other appropriate services needed to 
        support and maintain an individual with a most 
        significant disability in supported employment, that--
                    ``(A) are provided singly or in combination 
                and are organized and made available in such a 
                way as to assist an eligible individual to 
                achieve competitive employment;
                    ``(B) are based on a determination of the 
                needs of an eligible individual, as specified 
                in an individualized plan for employment; and
                    ``(C) are provided by the designated State 
                unit for a period of time not to extend beyond 
                18 months, unless under special circumstances 
                the eligible individual and the rehabilitation 
                counselor or coordinator involved jointly agree 
                to extend the time in order to achieve the 
                rehabilitation objectives identified in the 
                individualized plan for employment.
            ``(37) Transition services.--The term `transition 
        services' means a coordinated set of activities for a 
        student, designed within an outcome-oriented process, 
        that promotes movement from school to post school 
        activities, including postsecondary education, 
        vocational training, integrated employment (including 
        supported employment), continuing and adult education, 
        adult services, independent living, or community 
        participation. The coordinated set of activities shall 
        be based upon the individual student's needs, taking 
        into account the student's preferences and interests, 
        and shall include instruction, community experiences, 
        the development of employment and other post school 
        adult living objectives, and, when appropriate, 
        acquisition of daily living skills and functional 
        vocational evaluation.
            ``(38) Vocational rehabilitation services.--The 
        term `vocational rehabilitation services' means those 
        services identified in section 103 which are provided 
        to individuals with disabilities under this Act.
            ``(39) Workforce investment activities.--The term 
        `workforce investment activities' means workforce 
        investment activities, as defined in section 101 of the 
        Workforce Investment Act of 1998, that are carried out 
        under that Act.


                         ``allotment percentage


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


                            ``nonduplication


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


                      ``application of other laws


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


                      ``administration of the act


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


                               ``reports


    ``Sec. 13. (a) Not later than one hundred and eighty days 
after the close of each fiscal year, the Commissioner shall 
prepare and submit to the President and to the Congress a full 
and complete report on the activities carried out under this 
Act, including the activities and staffing of the information 
clearinghouse under section 15.
    ``(b) The Commissioner shall collect information to 
determine whether the purposes of this Act are being met and to 
assess the performance of programs carried out under this Act. 
The Commissioner shall take whatever action is necessary to 
assure that the identity of each individual for which 
information is supplied under this section is kept 
confidential, except as otherwise required by law (including 
regulation).
    ``(c) In preparing the report, the Commissioner shall 
annually collect and include in the report information based on 
the information submitted by States in accordance with section 
101(a)(10), including information on administrative costs as 
required by section 101(a)(10)(D). The Commissioner shall, to 
the maximum extent appropriate, include in the report all 
information that is required to be submitted in the reports 
described in section 136(d) of the Workforce Investment Act of 
1998 and that pertains to the employment of individuals with 
disabilities.


                              ``evaluation


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


                      ``information clearinghouse


    ``Sec. 15. (a) The Secretary shall establish a central 
clearinghouse for information and resource availability for 
individuals with disabilities which shall provide information 
and data regarding--
            ``(1) the location, provision, and availability of 
        services and programs for individuals with 
        disabilities, including such information and data 
        provided by State workforce investment boards regarding 
        such services and programs authorized under title I of 
        such Act;
            ``(2) research and recent medical and scientific 
        developments bearing on disabilities (and their 
        prevention, amelioration, causes, and cures); and
            ``(3) the current numbers of individuals with 
        disabilities and their needs.
The clearinghouse shall also provide any other relevant 
information and data which the Secretary considers appropriate.
    ``(b) The Commissioner may assist the Secretary to develop 
within the Department of Education a coordinated system of 
information and data retrieval, which will have the capacity 
and responsibility to provide information regarding the 
information and data referred to in subsection (a) of this 
section to the Congress, public and private agencies and 
organizations, individuals with disabilities and their 
families, professionals in fields serving such individuals, and 
the general public.
    ``(c) The office established to carry out the provisions of 
this section shall be known as the `Office of Information and 
Resources for Individuals with Disabilities'.
    ``(d) There are authorized to be appropriated to carry out 
this section such sums as may be necessary.


                          ``transfer of funds


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


                         ``state administration


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


                        ``review of applications


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

``SEC. 19. CARRYOVER.

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

``SEC. 20. CLIENT ASSISTANCE INFORMATION.

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

``SEC. 21. TRADITIONALLY UNDERSERVED POPULATIONS.

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

SEC. 404. VOCATIONAL REHABILITATION SERVICES.

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

             ``TITLE I--VOCATIONAL REHABILITATION SERVICES

                      ``PART A--GENERAL PROVISIONS

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

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

``SEC. 101. STATE PLANS.

    ``(a) Plan Requirements.--
            ``(1) In general.--
                    ``(A) Submission.--To be eligible to 
                participate in programs under this title, a 
                State shall submit to the Commissioner a State 
                plan for vocational rehabilitation services 
                that meets the requirements of this section, on 
                the same date that the State submits a State 
                plan under section 112 of the Workforce 
                Investment Act of 1998.
                    ``(B) Nonduplication.--The State shall not 
                be required to submit, in the State plan for 
                vocational rehabilitation services, policies, 
                procedures, or descriptions required under this 
                title that have been previously submitted to 
                the Commissioner and that demonstrate that such 
                State meets the requirements of this title, 
                including any policies, procedures, or 
                descriptions submitted under this title as in 
                effect on the day before the effective date of 
                the Rehabilitation Act Amendments of 1998.
                    ``(C) Duration.--The State plan shall 
                remain in effect subject to the submission of 
                such modifications as the State determines to 
                be necessary or as the Commissioner may require 
                based on a change in State policy, a change in 
                Federal law (including regulations), an 
                interpretation of this Act by a Federal court 
                or the highest court of the State, or a finding 
                by the Commissioner of State noncompliance with 
                the requirements of this Act, until the State 
                submits and receives approval of a new State 
                plan.
            ``(2) Designated state agency; designated state 
        unit.--
                    ``(A) Designated state agency.--The State 
                plan shall designate a State agency as the sole 
                State agency to administer the plan, or to 
                supervise the administration of the plan by a 
                local agency, except that--
                            ``(i) where, under State law, the 
                        State agency for individuals who are 
                        blind or another agency that provides 
                        assistance or services to adults who 
                        are blind is authorized to provide 
                        vocational rehabilitation services to 
                        individuals who are blind, that agency 
                        may be designated as the sole State 
                        agency to administer the part of the 
                        plan under which vocational 
                        rehabilitation services are provided 
                        for individuals who are blind (or to 
                        supervise the administration of such 
                        part by a local agency) and a separate 
                        State agency may be designated as the 
                        sole State agency to administer or 
                        supervise the administration of the 
                        rest of the State plan;
                            ``(ii) the Commissioner, on the 
                        request of a State, may authorize the 
                        designated State agency to share 
                        funding and administrative 
                        responsibility with another agency of 
                        the State or with a local agency in 
                        order to permit the agencies to carry 
                        out a joint program to provide services 
                        to individuals with disabilities, and 
                        may waive compliance, with respect to 
                        vocational rehabilitation services 
                        furnished under the joint program, with 
                        the requirement of paragraph (4) that 
                        the plan be in effect in all political 
                        subdivisions of the State; and
                            ``(iii) in the case of American 
                        Samoa, the appropriate State agency 
                        shall be the Governor of American 
                        Samoa.
                    ``(B) Designated state unit.--The State 
                agency designated under subparagraph (A) shall 
                be--
                            ``(i) a State agency primarily 
                        concerned with vocational 
                        rehabilitation, or vocational and other 
                        rehabilitation, of individuals with 
                        disabilities; or
                            ``(ii) if not such an agency, the 
                        State agency (or each State agency if 2 
                        are so designated) shall include a 
                        vocational rehabilitation bureau, 
                        division, or other organizational unit 
                        that--
                                    ``(I) is primarily 
                                concerned with vocational 
                                rehabilitation, or vocational 
                                and other rehabilitation, of 
                                individuals with disabilities, 
                                and is responsible for the 
                                vocational rehabilitation 
                                program of the designated State 
                                agency;
                                    ``(II) has a full-time 
                                director;
                                    ``(III) has a staff 
                                employed on the rehabilitation 
                                work of the organizational unit 
                                all or substantially all of 
                                whom are employed full time on 
                                such work; and
                                    ``(IV) is located at an 
                                organizational level and has an 
                                organizational status within 
                                the designated State agency 
                                comparable to that of other 
                                major organizational units of 
                                the designated State agency.
                    ``(C) Responsibility for services for the 
                blind.--If the State has designated only 1 
                State agency pursuant to subparagraph (A), the 
                State may assign responsibility for the part of 
                the plan under which vocational rehabilitation 
                services are provided for individuals who are 
                blind to an organizational unit of the 
                designated State agency and assign 
                responsibility for the rest of the plan to 
                another organizational unit of the designated 
                State agency, with the provisions of 
                subparagraph (B) applying separately to each of 
                the designated State units.
            ``(3) Non-federal share.--The State plan shall 
        provide for financial participation by the State, or if 
        the State so elects, by the State and local agencies, 
        to provide the amount of the non-Federal share of the 
        cost of carrying out part B.
            ``(4) Statewideness.--The State plan shall provide 
        that the plan shall be in effect in all political 
        subdivisions of the State, except that--
                    ``(A) in the case of any activity that, in 
                the judgment of the Commissioner, is likely to 
                assist in promoting the vocational 
                rehabilitation of substantially larger numbers 
                of individuals with disabilities or groups of 
                individuals with disabilities, the Commissioner 
                may waive compliance with the requirement that 
                the plan be in effect in all political 
                subdivisions of the State to the extent and for 
                such period as may be provided in accordance 
                with regulations prescribed by the 
                Commissioner, but only if the non-Federal share 
                of the cost of the vocational rehabilitation 
                services involved is met from funds made 
                available by a local agency (including funds 
                contributed to such agency by a private agency, 
                organization, or individual); and
                    ``(B) in a case in which earmarked funds 
                are used toward the non-Federal share and such 
                funds are earmarked for particular geographic 
                areas within the State, the earmarked funds may 
                be used in such areas if the State notifies the 
                Commissioner that the State cannot provide the 
                full non-Federal share without such funds.
            ``(5) Order of selection for vocational 
        rehabilitation services.--In the event that vocational 
        rehabilitation services cannot be provided to all 
        eligible individuals with disabilities in the State who 
        apply for the services, the State plan shall--
                    ``(A) show the order to be followed in 
                selecting eligible individuals to be provided 
                vocational rehabilitation services;
                    ``(B) provide the justification for the 
                order of selection;
                    ``(C) include an assurance that, in 
                accordance with criteria established by the 
                State for the order of selection, individuals 
                with the most significant disabilities will be 
                selected first for the provision of vocational 
                rehabilitation services; and
                    ``(D) provide that eligible individuals, 
                who do not meet the order of selection 
                criteria, shall have access to services 
                provided through the information and referral 
                system implemented under paragraph (20).
            ``(6) Methods for administration.--
                    ``(A) In general.--The State plan shall 
                provide for such methods of administration as 
                are found by the Commissioner to be necessary 
                for the proper and efficient administration of 
                the plan.
                    ``(B) Employment of individuals with 
                disabilities.--The State plan shall provide 
                that the designated State agency, and entities 
                carrying out community rehabilitation programs 
                in the State, who are in receipt of assistance 
                under this title shall take affirmative action 
                to employ and advance in employment qualified 
                individuals with disabilities covered under, 
                and on the same terms and conditions as set 
                forth in, section 503.
                    ``(C) Facilities.--The State plan shall 
                provide that facilities used in connection with 
                the delivery of services assisted under the 
                State plan shall comply with the Act entitled 
                `An Act to insure that certain buildings 
                financed with Federal funds are so designed and 
                constructed as to be accessible to the 
                physically handicapped', approved on August 12, 
                1968 (commonly known as the `Architectural 
                Barriers Act of 1968'), with section 504, and 
                with the Americans with Disabilities Act of 
                1990.
            ``(7) Comprehensive system of personnel 
        development.--The State plan shall--
                    ``(A) include a description (consistent 
                with the purposes of this Act) of a 
                comprehensive system of personnel development, 
                which shall include--
                            ``(i) a description of the 
                        procedures and activities the 
                        designated State agency will undertake 
                        to ensure an adequate supply of 
                        qualified State rehabilitation 
                        professionals and paraprofessionals for 
                        the designated State unit, including 
                        the development and maintenance of a 
                        system for determining, on an annual 
                        basis--
                                    ``(I) the number and type 
                                of personnel that are employed 
                                by the designated State unit in 
                                the provision of vocational 
                                rehabilitation services, 
                                including ratios of qualified 
                                vocational rehabilitation 
                                counselors to clients; and
                                    ``(II) the number and type 
                                of personnel needed by the 
                                State, and a projection of the 
                                numbers of such personnel that 
                                will be needed in 5 years, 
                                based on projections of the 
                                number of individuals to be 
                                served, the number of such 
                                personnel who are expected to 
                                retire or leave the vocational 
                                rehabilitation field, and other 
                                relevant factors;
                            ``(ii) where appropriate, a 
                        description of the manner in which 
                        activities will be undertaken under 
                        this section to coordinate the system 
                        of personnel development with personnel 
                        development activities under the 
                        Individuals with Disabilities Education 
                        Act (20 U.S.C. 1400 et seq.);
                            ``(iii) a description of the 
                        development and maintenance of a system 
                        of determining, on an annual basis, 
                        information on the programs of 
                        institutions of higher education within 
                        the State that are preparing 
                        rehabilitation professionals, 
                        including--
                                    ``(I) the numbers of 
                                students enrolled in such 
                                programs; and
                                    ``(II) the number of such 
                                students who graduated with 
                                certification or licensure, or 
                                with credentials to qualify for 
                                certification or licensure, as 
                                a rehabilitation professional 
                                during the past year;
                            ``(iv) a description of the 
                        development, updating, and 
                        implementation of a plan that--
                                    ``(I) will address the 
                                current and projected 
                                vocational rehabilitation 
                                services personnel training 
                                needs for the designated State 
                                unit; and
                                    ``(II) provides for the 
                                coordination and facilitation 
                                of efforts between the 
                                designated State unit, 
                                institutions of higher 
                                education, and professional 
                                associations to recruit, 
                                prepare, and retain qualified 
                                personnel, including personnel 
                                from minority backgrounds, and 
                                personnel who are individuals 
                                with disabilities; and
                            ``(v) a description of the 
                        procedures and activities the 
                        designated State agency will undertake 
                        to ensure that all personnel employed 
                        by the designated State unit are 
                        appropriately and adequately trained 
                        and prepared, including--
                                    ``(I) a system for the 
                                continuing education of 
                                rehabilitation professionals 
                                and paraprofessionals within 
                                the designated State unit, 
                                particularly with respect to 
                                rehabilitation technology; and
                                    ``(II) procedures for 
                                acquiring and disseminating to 
                                rehabilitation professionals 
                                and paraprofessionals within 
                                the designated State unit 
                                significant knowledge from 
                                research and other sources, 
                                including procedures for 
                                providing training regarding 
                                the amendments to this Act made 
                                by the Rehabilitation Act 
                                Amendments of 1998;
                    ``(B) set forth policies and procedures 
                relating to the establishment and maintenance 
                of standards to ensure that personnel, 
                including rehabilitation professionals and 
                paraprofessionals, needed within the designated 
                State unit to carry out this part are 
                appropriately and adequately prepared and 
                trained, including--
                            ``(i) the establishment and 
                        maintenance of standards that are 
                        consistent with any national or State 
                        approved or recognized certification, 
                        licensing, registration, or other 
                        comparable requirements that apply to 
                        the area in which such personnel are 
                        providing vocational rehabilitation 
                        services; and
                            ``(ii) to the extent that such 
                        standards are not based on the highest 
                        requirements in the State applicable to 
                        a specific profession or discipline, 
                        the steps the State is taking to 
                        require the retraining or hiring of 
                        personnel within the designated State 
                        unit that meet appropriate professional 
                        requirements in the State; and
                    ``(C) contain provisions relating to the 
                establishment and maintenance of minimum 
                standards to ensure the availability of 
                personnel within the designated State unit, to 
                the maximum extent feasible, trained to 
                communicate in the native language or mode of 
                communication of an applicant or eligible 
                individual.
            ``(8) Comparable services and benefits.--
                    ``(A) Determination of availability.--
                            ``(i) In general.--The State plan 
                        shall include an assurance that, prior 
                        to providing any vocational 
                        rehabilitation service to an eligible 
                        individual, except those services 
                        specified in paragraph (5)(D) and in 
                        paragraphs (1) through (4) and (14) of 
                        section 103(a), the designated State 
                        unit will determine whether comparable 
                        services and benefits are available 
                        under any other program (other than a 
                        program carried out under this title) 
                        unless such a determination would 
                        interrupt or delay--
                                    ``(I) the progress of the 
                                individual toward achieving the 
                                employment outcome identified 
                                in the individualized plan for 
                                employment of the individual in 
                                accordance with section 102(b);
                                    ``(II) an immediate job 
                                placement; or
                                    ``(III) the provision of 
                                such service to any individual 
                                at extreme medical risk.
                            ``(ii) Awards and scholarships.--
                        For purposes of clause (i), comparable 
                        benefits do not include awards and 
                        scholarships based on merit.
                    ``(B) Interagency agreement.--The State 
                plan shall include an assurance that the 
                Governor of the State, in consultation with the 
                entity in the State responsible for the 
                vocational rehabilitation program and other 
                appropriate agencies, will ensure that an 
                interagency agreement or other mechanism for 
                interagency coordination takes effect between 
                any appropriate public entity, including the 
                State entity responsible for administering the 
                State medicaid program, a public institution of 
                higher education, and a component of the 
                statewide workforce investment system, and the 
                designated State unit, in order to ensure the 
                provision of vocational rehabilitation services 
                described in subparagraph (A) (other than those 
                services specified in paragraph (5)(D), and in 
                paragraphs (1) through (4) and (14) of section 
                103(a)), that are included in the 
                individualized plan for employment of an 
                eligible individual, including the provision of 
                such vocational rehabilitation services during 
                the pendency of any dispute described in clause 
                (iii). Such agreement or mechanism shall 
                include the following:
                            ``(i) Agency financial 
                        responsibility.--An identification of, 
                        or a description of a method for 
                        defining, the financial responsibility 
                        of such public entity for providing 
                        such services, and a provision stating 
                        the financial responsibility of such 
                        public entity for providing such 
                        services.
                            ``(ii) Conditions, terms, and 
                        procedures of reimbursement.--
                        Information specifying the conditions, 
                        terms, and procedures under which a 
                        designated State unit shall be 
                        reimbursed by other public entities for 
                        providing such services, based on the 
                        provisions of such agreement or 
                        mechanism.
                            ``(iii) Interagency disputes.--
                        Information specifying procedures for 
                        resolving interagency disputes under 
                        the agreement or other mechanism 
                        (including procedures under which the 
                        designated State unit may initiate 
                        proceedings to secure reimbursement 
                        from other public entities or otherwise 
                        implement the provisions of the 
                        agreement or mechanism).
                            ``(iv) Coordination of services 
                        procedures.--Information specifying 
                        policies and procedures for public 
                        entities to determine and identify the 
                        interagency coordination 
                        responsibilities of each public entity 
                        to promote the coordination and timely 
                        delivery of vocational rehabilitation 
                        services (except those services 
                        specified in paragraph (5)(D) and in 
                        paragraphs (1) through (4) and (14) of 
                        section 103(a)).
                    ``(C) Responsibilities of other public 
                entities.--
                            ``(i) Responsibilities under other 
                        law.--Notwithstanding subparagraph (B), 
                        if any public entity other than a 
                        designated State unit is obligated 
                        under Federal or State law, or assigned 
                        responsibility under State policy or 
                        under this paragraph, to provide or pay 
                        for any services that are also 
                        considered to be vocational 
                        rehabilitation services (other than 
                        those specified in paragraph (5)(D) and 
                        in paragraphs (1) through (4) and (14) 
                        of section 103(a)), such public entity 
                        shall fulfill that obligation or 
                        responsibility, either directly or by 
                        contract or other arrangement.
                            ``(ii) Reimbursement.--If a public 
                        entity other than the designated State 
                        unit fails to provide or pay for the 
                        services described in clause (i) for an 
                        eligible individual, the designated 
                        State unit shall provide or pay for 
                        such services to the individual. Such 
                        designated State unit may claim 
                        reimbursement for the services from the 
                        public entity that failed to provide or 
                        pay for such services. Such public 
                        entity shall reimburse the designated 
                        State unit pursuant to the terms of the 
                        interagency agreement or other 
                        mechanism described in this paragraph 
                        according to the procedures established 
                        in such agreement or mechanism pursuant 
                        to subparagraph (B)(ii).
                    ``(D) Methods.--The Governor of a State may 
                meet the requirements of subparagraph (B) 
                through--
                            ``(i) a State statute or 
                        regulation;
                            ``(ii) a signed agreement between 
                        the respective officials of the public 
                        entities that clearly identifies the 
                        responsibilities of each public entity 
                        relating to the provision of services; 
                        or
                            ``(iii) another appropriate method, 
                        as determined by the designated State 
                        unit.
            ``(9) Individualized plan for employment.--
                    ``(A) Development and implementation.--The 
                State plan shall include an assurance that an 
                individualized plan for employment meeting the 
                requirements of section 102(b) will be 
                developed and implemented in a timely manner 
                for an individual subsequent to the 
                determination of the eligibility of the 
                individual for services under this title, 
                except that in a State operating under an order 
                of selection described in paragraph (5), the 
                plan will be developed and implemented only for 
                individuals meeting the order of selection 
                criteria of the State.
                    ``(B) Provision of services.--The State 
                plan shall include an assurance that such 
                services will be provided in accordance with 
                the provisions of the individualized plan for 
                employment.
            ``(10) Reporting requirements.--
                    ``(A) In general.--The State plan shall 
                include an assurance that the designated State 
                agency will submit reports in the form and 
                level of detail and at the time required by the 
                Commissioner regarding applicants for, and 
                eligible individuals receiving, services under 
                this title.
                    ``(B) Annual reporting.--In specifying the 
                information to be submitted in the reports, the 
                Commissioner shall require annual reporting on 
                the eligible individuals receiving the 
                services, on those specific data elements 
                described in section 136(d)(2) of the Workforce 
                Investment Act of 1998 that are determined by 
                the Secretary to be relevant in assessing the 
                performance of designated State units in 
                carrying out the vocational rehabilitation 
                program established under this title.
                    ``(C) Additional data.--In specifying the 
                information required to be submitted in the 
                reports, the Commissioner shall require 
                additional data with regard to applicants and 
                eligible individuals related to--
                            ``(i) the number of applicants and 
                        the number of individuals determined to 
                        be eligible or ineligible for the 
                        program carried out under this title, 
                        including--
                                    ``(I) the number of 
                                individuals determined to be 
                                ineligible because they did not 
                                require vocational 
                                rehabilitation services, as 
                                provided in section 102(a); and
                                    ``(II) the number of 
                                individuals determined, on the 
                                basis of clear and convincing 
                                evidence, to be too severely 
                                disabled to benefit in terms of 
                                an employment outcome from 
                                vocational rehabilitation 
                                services;
                            ``(ii) the number of individuals 
                        who received vocational rehabilitation 
                        services through the program, 
                        including--
                                    ``(I) the number who 
                                received services under 
                                paragraph (5)(D), but not 
                                assistance under an 
                                individualized plan for 
                                employment;
                                    ``(II) of those recipients 
                                who are individuals with 
                                significant disabilities, the 
                                number who received assistance 
                                under an individualized plan 
                                for employment consistent with 
                                section 102(b); and
                                    ``(III) of those recipients 
                                who are not individuals with 
                                significant disabilities, the 
                                number who received assistance 
                                under an individualized plan 
                                for employment consistent with 
                                section 102(b);
                            ``(iii) of those applicants and 
                        eligible recipients who are individuals 
                        with significant disabilities--
                                    ``(I) the number who ended 
                                their participation in the 
                                program carried out under this 
                                title and the number who 
                                achieved employment outcomes 
                                after receiving vocational 
                                rehabilitation services; and
                                    ``(II) the number who ended 
                                their participation in the 
                                program and who were employed 6 
                                months and 12 months after 
                                securing or regaining 
                                employment, or, in the case of 
                                individuals whose employment 
                                outcome was to retain or 
                                advance in employment, who were 
                                employed 6 months and 12 months 
                                after achieving their 
                                employment outcome, including--
                                            ``(aa) the number 
                                        who earned the minimum 
                                        wage rate specified in 
                                        section 6(a)(1) of the 
                                        Fair Labor Standards 
                                        Act of 1938 (29 U.S.C. 
                                        206(a)(1)) or another 
                                        wage level set by the 
                                        Commissioner, during 
                                        such employment; and
                                            ``(bb) the number 
                                        who received employment 
                                        benefits from an 
                                        employer during such 
                                        employment; and
                            ``(iv) of those applicants and 
                        eligible recipients who are not 
                        individuals with significant 
                        disabilities--
                                    ``(I) the number who ended 
                                their participation in the 
                                program carried out under this 
                                title and the number who 
                                achieved employment outcomes 
                                after receiving vocational 
                                rehabilitation services; and
                                    ``(II) the number who ended 
                                their participation in the 
                                program and who were employed 6 
                                months and 12 months after 
                                securing or regaining 
                                employment, or, in the case of 
                                individuals whose employment 
                                outcome was to retain or 
                                advance in employment, who were 
                                employed 6 months and 12 months 
                                after achieving their 
                                employment outcome, including--
                                            ``(aa) the number 
                                        who earned the minimum 
                                        wage rate specified in 
                                        section 6(a)(1) of the 
                                        Fair Labor Standards 
                                        Act of 1938 (29 U.S.C. 
                                        206(a)(1)) or another 
                                        wage level set by the 
                                        Commissioner, during 
                                        such employment; and
                                            ``(bb) the number 
                                        who received employment 
                                        benefits from an 
                                        employer during such 
                                        employment.
                    ``(D) Costs and results.--The Commissioner 
                shall also require that the designated State 
                agency include in the reports information on--
                            ``(i) the costs under this title of 
                        conducting administration, providing 
                        assessment services, counseling and 
                        guidance, and other direct services 
                        provided by designated State agency 
                        staff, providing services purchased 
                        under individualized plans for 
                        employment, supporting small business 
                        enterprises, establishing, developing, 
                        and improving community rehabilitation 
                        programs, providing other services to 
                        groups, and facilitating use of other 
                        programs under this Act and title I of 
                        the Workforce Investment Act of 1998 by 
                        eligible individuals; and
                            ``(ii) the results of annual 
                        evaluation by the State of program 
                        effectiveness under paragraph (15)(E).
                    ``(E) Additional information.--The 
                Commissioner shall require that each designated 
                State unit include in the reports additional 
                information related to the applicants and 
                eligible individuals, obtained either through a 
                complete count or sampling, including--
                            ``(i) information on--
                                    ``(I) age, gender, race, 
                                ethnicity, education, category 
                                of impairment, severity of 
                                disability, and whether the 
                                individuals are students with 
                                disabilities;
                                    ``(II) dates of 
                                application, determination of 
                                eligibility or ineligibility, 
                                initiation of the 
                                individualized plan for 
                                employment, and termination of 
                                participation in the program;
                                    ``(III) earnings at the 
                                time of application for the 
                                program and termination of 
                                participation in the program;
                                    ``(IV) work status and 
                                occupation;
                                    ``(V) types of services, 
                                including assistive technology 
                                services and assistive 
                                technology devices, provided 
                                under the program;
                                    ``(VI) types of public or 
                                private programs or agencies 
                                that furnished services under 
                                the program; and
                                    ``(VII) the reasons for 
                                individuals terminating 
                                participation in the program 
                                without achieving an employment 
                                outcome; and
                            ``(ii) information necessary to 
                        determine the success of the State in 
                        meeting--
                                    ``(I) the State performance 
                                measures established under 
                                section 136(b) of the Workforce 
                                Investment Act of 1998, to the 
                                extent the measures are 
                                applicable to individuals with 
                                disabilities; and
                                    ``(II) the standards and 
                                indicators established pursuant 
                                to section 106.
                    ``(F) Completeness and confidentiality.--
                The State plan shall include an assurance that 
                the information submitted in the reports will 
                include a complete count, except as provided in 
                subparagraph (E), of the applicants and 
                eligible individuals, in a manner permitting 
                the greatest possible cross-classification of 
                data and that the identity of each individual 
                for which information is supplied under this 
                paragraph will be kept confidential.
            ``(11) Cooperation, collaboration, and 
        coordination.--
                    ``(A) Cooperative agreements with other 
                components of statewide workforce investment 
                systems.--The State plan shall provide that the 
                designated State unit or designated State 
                agency shall enter into a cooperative agreement 
                with other entities that are components of the 
                statewide workforce investment system of the 
                State, regarding the system, which agreement 
                may provide for--
                            ``(i) provision of intercomponent 
                        staff training and technical assistance 
                        with regard to--
                                    ``(I) the availability and 
                                benefits of, and information on 
                                eligibility standards for, 
                                vocational rehabilitation 
                                services; and
                                    ``(II) the promotion of 
                                equal, effective, and 
                                meaningful participation by 
                                individuals with disabilities 
                                in workforce investment 
                                activities in the State through 
                                the promotion of program 
                                accessibility, the use of 
                                nondiscriminatory policies and 
                                procedures, and the provision 
                                of reasonable accommodations, 
                                auxiliary aids and services, 
                                and rehabilitation technology, 
                                for individuals with 
                                disabilities;
                            ``(ii) use of information and 
                        financial management systems that link 
                        all components of the statewide 
                        workforce investment system, that link 
                        the components to other electronic 
                        networks, including nonvisual 
                        electronic networks, and that relate to 
                        such subjects as employment statistics, 
                        and information on job vacancies, 
                        career planning, and workforce 
                        investment activities;
                            ``(iii) use of customer service 
                        features such as common intake and 
                        referral procedures, customer 
                        databases, resource information, and 
                        human services hotlines;
                            ``(iv) establishment of cooperative 
                        efforts with employers to--
                                    ``(I) facilitate job 
                                placement; and
                                    ``(II) carry out any other 
                                activities that the designated 
                                State unit and the employers 
                                determine to be appropriate;
                            ``(v) identification of staff 
                        roles, responsibilities, and available 
                        resources, and specification of the 
                        financial responsibility of each 
                        component of the statewide workforce 
                        investment system with regard to paying 
                        for necessary services (consistent with 
                        State law and Federal requirements); 
                        and
                            ``(vi) specification of procedures 
                        for resolving disputes among such 
                        components.
                    ``(B) Replication of cooperative 
                agreements.--The State plan shall provide for 
                the replication of such cooperative agreements 
                at the local level between individual offices 
                of the designated State unit and local entities 
                carrying out activities through the statewide 
                workforce investment system.
                    ``(C) Interagency cooperation with other 
                agencies.--The State plan shall include 
                descriptions of interagency cooperation with, 
                and utilization of the services and facilities 
                of, Federal, State, and local agencies and 
                programs, including programs carried out by the 
                Under Secretary for Rural Development of the 
                Department of Agriculture and State use 
                contracting programs, to the extent that such 
                agencies and programs are not carrying out 
                activities through the statewide workforce 
                investment system.
                    ``(D) Coordination with education 
                officials.--The State plan shall contain plans, 
                policies, and procedures for coordination 
                between the designated State agency and 
                education officials responsible for the public 
                education of students with disabilities, that 
                are designed to facilitate the transition of 
                the students with disabilities from the receipt 
                of educational services in school to the 
                receipt of vocational rehabilitation services 
                under this title, including information on a 
                formal interagency agreement with the State 
                educational agency that, at a minimum, provides 
                for--
                            ``(i) consultation and technical 
                        assistance to assist educational 
                        agencies in planning for the transition 
                        of students with disabilities from 
                        school to post-school activities, 
                        including vocational rehabilitation 
                        services;
                            ``(ii) transition planning by 
                        personnel of the designated State 
                        agency and educational agency personnel 
                        for students with disabilities that 
                        facilitates the development and 
                        completion of their individualized 
                        education programs under section 614(d) 
                        of the Individuals with Disabilities 
                        Education Act (as added by section 101 
                        of Public Law 105-17);
                            ``(iii) the roles and 
                        responsibilities, including financial 
                        responsibilities, of each agency, 
                        including provisions for determining 
                        State lead agencies and qualified 
                        personnel responsible for transition 
                        services; and
                            ``(iv) procedures for outreach to 
                        and identification of students with 
                        disabilities who need the transition 
                        services.
                    ``(E) Coordination with statewide 
                independent living councils and independent 
                living centers.--The State plan shall include 
                an assurance that the designated State unit, 
                the Statewide Independent Living Council 
                established under section 705, and the 
                independent living centers described in part C 
                of title VII within the State have developed 
                working relationships and coordinate their 
                activities.
                    ``(F) Cooperative agreement with recipients 
                of grants for services to american indians.--In 
                applicable cases, the State plan shall include 
                an assurance that the State has entered into a 
                formal cooperative agreement with each grant 
                recipient in the State that receives funds 
                under part C. The agreement shall describe 
                strategies for collaboration and coordination 
                in providing vocational rehabilitation services 
                to American Indians who are individuals with 
                disabilities, including--
                            ``(i) strategies for interagency 
                        referral and information sharing that 
                        will assist in eligibility 
                        determinations and the development of 
                        individualized plans for employment;
                            ``(ii) procedures for ensuring that 
                        American Indians who are individuals 
                        with disabilities and are living near a 
                        reservation or tribal service area are 
                        provided vocational rehabilitation 
                        services; and
                            ``(iii) provisions for sharing 
                        resources in cooperative studies and 
                        assessments, joint training activities, 
                        and other collaborative activities 
                        designed to improve the provision of 
                        services to American Indians who are 
                        individuals with disabilities.
            ``(12) Residency.--The State plan shall include an 
        assurance that the State will not impose a residence 
        requirement that excludes from services provided under 
        the plan any individual who is present in the State.
            ``(13) Services to american indians.--The State 
        plan shall include an assurance that, except as 
        otherwise provided in part C, the designated State 
        agency will provide vocational rehabilitation services 
        to American Indians who are individuals with 
        disabilities residing in the State to the same extent 
        as the designated State agency provides such services 
        to other significant populations of individuals with 
        disabilities residing in the State.
            ``(14) Annual review of individuals in extended 
        employment or other employment under special 
        certificate provisions of the fair labor standards act 
        of 1938.--The State plan shall provide for--
                    ``(A) an annual review and reevaluation of 
                the status of each individual with a disability 
                served under this title who has achieved an 
                employment outcome either in an extended 
                employment setting in a community 
                rehabilitation program or any other employment 
                under section 14(c) of the Fair Labor Standards 
                Act (29 U.S.C. 214(c)) for 2 years after the 
                achievement of the outcome (and thereafter if 
                requested by the individual or, if appropriate, 
                the individual's representative), to determine 
                the interests, priorities, and needs of the 
                individual with respect to competitive 
                employment or training for competitive 
                employment;
                    ``(B) input into the review and 
                reevaluation, and a signed acknowledgment that 
                such review and reevaluation have been 
                conducted, by the individual with a disability, 
                or, if appropriate, the individual's 
                representative; and
                    ``(C) maximum efforts, including the 
                identification and provision of vocational 
                rehabilitation services, reasonable 
                accommodations, and other necessary support 
                services, to assist the individuals described 
                in subparagraph (A) in engaging in competitive 
                employment.
            ``(15) Annual state goals and reports of 
        progress.--
                    ``(A) Assessments and estimates.--The State 
                plan shall--
                            ``(i) include the results of a 
                        comprehensive, statewide assessment, 
                        jointly conducted by the designated 
                        State unit and the State Rehabilitation 
                        Council (if the State has such a 
                        Council) every 3 years, describing the 
                        rehabilitation needs of individuals 
                        with disabilities residing within the 
                        State, particularly the vocational 
                        rehabilitation services needs of--
                                    ``(I) individuals with the 
                                most significant disabilities, 
                                including their need for 
                                supported employment services;
                                    ``(II) individuals with 
                                disabilities who are minorities 
                                and individuals with 
                                disabilities who have been 
                                unserved or underserved by the 
                                vocational rehabilitation 
                                program carried out under this 
                                title; and
                                    ``(III) individuals with 
                                disabilities served through 
                                other components of the 
                                statewide workforce investment 
                                system (other than the 
                                vocational rehabilitation 
                                program), as identified by such 
                                individuals and personnel 
                                assisting such individuals 
                                through the components;
                            ``(ii) include an assessment of the 
                        need to establish, develop, or improve 
                        community rehabilitation programs 
                        within the State; and
                            ``(iii) provide that the State 
                        shall submit to the Commissioner a 
                        report containing information regarding 
                        updates to the assessments, for any 
                        year in which the State updates the 
                        assessments.
                    ``(B) Annual estimates.--The State plan 
                shall include, and shall provide that the State 
                shall annually submit a report to the 
                Commissioner that includes, State estimates 
                of--
                            ``(i) the number of individuals in 
                        the State who are eligible for services 
                        under this title;
                            ``(ii) the number of such 
                        individuals who will receive services 
                        provided with funds provided under part 
                        B and under part B of title VI, 
                        including, if the designated State 
                        agency uses an order of selection in 
                        accordance with paragraph (5), 
                        estimates of the number of individuals 
                        to be served under each priority 
                        category within the order; and
                            ``(iii) the costs of the services 
                        described in clause (i), including, if 
                        the designated State agency uses an 
                        order of selection in accordance with 
                        paragraph (5), the service costs for 
                        each priority category within the 
                        order.
                    ``(C) Goals and priorities.--
                            ``(i) In general.--The State plan 
                        shall identify the goals and priorities 
                        of the State in carrying out the 
                        program. The goals and priorities shall 
                        be jointly developed, agreed to, and 
                        reviewed annually by the designated 
                        State unit and the State Rehabilitation 
                        Council, if the State has such a 
                        Council. Any revisions to the goals and 
                        priorities shall be jointly agreed to 
                        by the designated State unit and the 
                        State Rehabilitation Council, if the 
                        State has such a Council. The State 
                        plan shall provide that the State shall 
                        submit to the Commissioner a report 
                        containing information regarding 
                        revisions in the goals and priorities, 
                        for any year in which the State revises 
                        the goals and priorities.
                            ``(ii) Basis.--The State goals and 
                        priorities shall be based on an 
                        analysis of--
                                    ``(I) the comprehensive 
                                assessment described in 
                                subparagraph (A), including any 
                                updates to the assessment;
                                    ``(II) the performance of 
                                the State on the standards and 
                                indicators established under 
                                section 106; and
                                    ``(III) other available 
                                information on the operation 
                                and the effectiveness of the 
                                vocational rehabilitation 
                                program carried out in the 
                                State, including any reports 
                                received from the State 
                                Rehabilitation Council, under 
                                section 105(c) and the findings 
                                and recommendations from 
                                monitoring activities conducted 
                                under section 107.
                            ``(iii) Service and outcome goals 
                        for categories in order of selection.--
                        If the designated State agency uses an 
                        order of selection in accordance with 
                        paragraph (5), the State shall also 
                        identify in the State plan service and 
                        outcome goals and the time within which 
                        these goals may be achieved for 
                        individuals in each priority category 
                        within the order.
                    ``(D) Strategies.--The State plan shall 
                contain a description of the strategies the 
                State will use to address the needs identified 
                in the assessment conducted under subparagraph 
                (A) and achieve the goals and priorities 
                identified in subparagraph (C), including--
                            ``(i) the methods to be used to 
                        expand and improve services to 
                        individuals with disabilities, 
                        including how a broad range of 
                        assistive technology services and 
                        assistive technology devices will be 
                        provided to such individuals at each 
                        stage of the rehabilitation process and 
                        how such services and devices will be 
                        provided to such individuals on a 
                        statewide basis;
                            ``(ii) outreach procedures to 
                        identify and serve individuals with 
                        disabilities who are minorities and 
                        individuals with disabilities who have 
                        been unserved or underserved by the 
                        vocational rehabilitation program;
                            ``(iii) where necessary, the plan 
                        of the State for establishing, 
                        developing, or improving community 
                        rehabilitation programs;
                            ``(iv) strategies to improve the 
                        performance of the State with respect 
                        to the evaluation standards and 
                        performance indicators established 
                        pursuant to section 106; and
                            ``(v) strategies for assisting 
                        entities carrying out other components 
                        of the statewide workforce investment 
                        system (other than the vocational 
                        rehabilitation program) in assisting 
                        individuals with disabilities.
                    ``(E) Evaluation and reports of progress.--
                The State plan shall--
                            ``(i) include the results of an 
                        evaluation of the effectiveness of the 
                        vocational rehabilitation program, and 
                        a joint report by the designated State 
                        unit and the State Rehabilitation 
                        Council, if the State has such a 
                        Council, to the Commissioner on the 
                        progress made in improving the 
                        effectiveness from the previous year, 
                        which evaluation and report shall 
                        include--
                                    ``(I) an evaluation of the 
                                extent to which the goals 
                                identified in subparagraph (C) 
                                were achieved;
                                    ``(II) a description of 
                                strategies that contributed to 
                                achieving the goals;
                                    ``(III) to the extent to 
                                which the goals were not 
                                achieved, a description of the 
                                factors that impeded that 
                                achievement; and
                                    ``(IV) an assessment of the 
                                performance of the State on the 
                                standards and indicators 
                                established pursuant to section 
                                106; and
                            ``(ii) provide that the designated 
                        State unit and the State Rehabilitation 
                        Council, if the State has such a 
                        Council, shall jointly submit to the 
                        Commissioner an annual report that 
                        contains the information described in 
                        clause (i).
            ``(16) Public comment.--The State plan shall--
                    ``(A) provide that the designated State 
                agency, prior to the adoption of any policies 
                or procedures governing the provision of 
                vocational rehabilitation services under the 
                State plan (including making any amendment to 
                such policies and procedures), shall conduct 
                public meetings throughout the State, after 
                providing adequate notice of the meetings, to 
                provide the public, including individuals with 
                disabilities, an opportunity to comment on the 
                policies or procedures, and actively consult 
                with the Director of the client assistance 
                program carried out under section 112, and, as 
                appropriate, Indian tribes, tribal 
                organizations, and Native Hawaiian 
                organizations on the policies or procedures; 
                and
                    ``(B) provide that the designated State 
                agency (or each designated State agency if 2 
                agencies are designated) and any sole agency 
                administering the plan in a political 
                subdivision of the State, shall take into 
                account, in connection with matters of general 
                policy arising in the administration of the 
                plan, the views of--
                            ``(i) individuals and groups of 
                        individuals who are recipients of 
                        vocational rehabilitation services, or 
                        in appropriate cases, the individuals' 
                        representatives;
                            ``(ii) personnel working in 
                        programs that provide vocational 
                        rehabilitation services to individuals 
                        with disabilities;
                            ``(iii) providers of vocational 
                        rehabilitation services to individuals 
                        with disabilities;
                            ``(iv) the director of the client 
                        assistance program; and
                            ``(v) the State Rehabilitation 
                        Council, if the State has such a 
                        Council.
            ``(17) Use of funds for construction of 
        facilities.--The State plan shall provide that if, 
        under special circumstances, the State plan includes 
        provisions for the construction of facilities for 
        community rehabilitation programs--
                    ``(A) the Federal share of the cost of 
                construction for the facilities for a fiscal 
                year will not exceed an amount equal to 10 
                percent of the State's allotment under section 
                110 for such year;
                    ``(B) the provisions of section 306 (as in 
                effect on the day before the date of enactment 
                of the Rehabilitation Act Amendments of 1998) 
                shall be applicable to such construction and 
                such provisions shall be deemed to apply to 
                such construction; and
                    ``(C) there shall be compliance with 
                regulations the Commissioner shall prescribe 
                designed to assure that no State will reduce 
                its efforts in providing other vocational 
                rehabilitation services (other than for the 
                establishment of facilities for community 
                rehabilitation programs) because the plan 
                includes such provisions for construction.
            ``(18) Innovation and expansion activities.--The 
        State plan shall--
                    ``(A) include an assurance that the State 
                will reserve and use a portion of the funds 
                allotted to the State under section 110--
                            ``(i) for the development and 
                        implementation of innovative approaches 
                        to expand and improve the provision of 
                        vocational rehabilitation services to 
                        individuals with disabilities under 
                        this title, particularly individuals 
                        with the most significant disabilities, 
                        consistent with the findings of the 
                        statewide assessment and goals and 
                        priorities of the State as described in 
                        paragraph (15); and
                            ``(ii) to support the funding of--
                                    ``(I) the State 
                                Rehabilitation Council, if the 
                                State has such a Council, 
                                consistent with the plan 
                                prepared under section 
                                105(d)(1); and
                                    ``(II) the Statewide 
                                Independent Living Council, 
                                consistent with the plan 
                                prepared under section 
                                705(e)(1);
                    ``(B) include a description of how the 
                reserved funds will be utilized; and
                    ``(C) provide that the State shall submit 
                to the Commissioner an annual report containing 
                a description of how the reserved funds will be 
                utilized.
            ``(19) Choice.--The State plan shall include an 
        assurance that applicants and eligible individuals or, 
        as appropriate, the applicants' representatives or 
        individuals' representatives, will be provided 
        information and support services to assist the 
        applicants and individuals in exercising informed 
        choice throughout the rehabilitation process, 
        consistent with the provisions of section 102(d).
            ``(20) Information and referral services.--
                    ``(A) In general.--The State plan shall 
                include an assurance that the designated State 
                agency will implement an information and 
                referral system adequate to ensure that 
                individuals with disabilities will be provided 
                accurate vocational rehabilitation information 
                and guidance, using appropriate modes of 
                communication, to assist such individuals in 
                preparing for, securing, retaining, or 
                regaining employment, and will be appropriately 
                referred to Federal and State programs (other 
                than the vocational rehabilitation program 
                carried out under this title), including other 
                components of the statewide workforce 
                investment system in the State.
                    ``(B) Referrals.--An appropriate referral 
                made through the system shall--
                            ``(i) be to the Federal or State 
                        programs, including programs carried 
                        out by other components of the 
                        statewide workforce investment system 
                        in the State, best suited to address 
                        the specific employment needs of an 
                        individual with a disability; and
                            ``(ii) include, for each of these 
                        programs, provision to the individual 
                        of--
                                    ``(I) a notice of the 
                                referral by the designated 
                                State agency to the agency 
                                carrying out the program;
                                    ``(II) information 
                                identifying a specific point of 
                                contact within the agency 
                                carrying out the program; and
                                    ``(III) information and 
                                advice regarding the most 
                                suitable services to assist the 
                                individual to prepare for, 
                                secure, retain, or regain 
                                employment.
            ``(21) State independent consumer-controlled 
        commission; state rehabilitation council.--
                    ``(A) Commission or council.--The State 
                plan shall provide that either--
                            ``(i) the designated State agency 
                        is an independent commission that--
                                    ``(I) is responsible under 
                                State law for operating, or 
                                overseeing the operation of, 
                                the vocational rehabilitation 
                                program in the State;
                                    ``(II) is consumer-
                                controlled by persons who--
                                            ``(aa) are 
                                        individuals with 
                                        physical or mental 
                                        impairments that 
                                        substantially limit 
                                        major life activities; 
                                        and
                                            ``(bb) represent 
                                        individuals with a 
                                        broad range of 
                                        disabilities, unless 
                                        the designated State 
                                        unit under the 
                                        direction of the 
                                        commission is the State 
                                        agency for individuals 
                                        who are blind;
                                    ``(III) includes family 
                                members, advocates, or other 
                                representatives, of individuals 
                                with mental impairments; and
                                    ``(IV) undertakes the 
                                functions set forth in section 
                                105(c)(4); or
                            ``(ii) the State has established a 
                        State Rehabilitation Council that meets 
                        the criteria set forth in section 105 
                        and the designated State unit--
                                    ``(I) in accordance with 
                                paragraph (15), jointly 
                                develops, agrees to, and 
                                reviews annually State goals 
                                and priorities, and jointly 
                                submits annual reports of 
                                progress with the Council;
                                    ``(II) regularly consults 
                                with the Council regarding the 
                                development, implementation, 
                                and revision of State policies 
                                and procedures of general 
                                applicability pertaining to the 
                                provision of vocational 
                                rehabilitation services;
                                    ``(III) includes in the 
                                State plan and in any revision 
                                to the State plan, a summary of 
                                input provided by the Council, 
                                including recommendations from 
                                the annual report of the 
                                Council described in section 
                                105(c)(5), the review and 
                                analysis of consumer 
                                satisfaction described in 
                                section 105(c)(4), and other 
                                reports prepared by the 
                                Council, and the response of 
                                the designated State unit to 
                                such input and recommendations, 
                                including explanations for 
                                rejecting any input or 
                                recommendation; and
                                    ``(IV) transmits to the 
                                Council--
                                            ``(aa) all plans, 
                                        reports, and other 
                                        information required 
                                        under this title to be 
                                        submitted to the 
                                        Secretary;
                                            ``(bb) all 
                                        policies, and 
                                        information on all 
                                        practices and 
                                        procedures, of general 
                                        applicability provided 
                                        to or used by 
                                        rehabilitation 
                                        personnel in carrying 
                                        out this title; and
                                            ``(cc) copies of 
                                        due process hearing 
                                        decisions issued under 
                                        this title, which shall 
                                        be transmitted in such 
                                        a manner as to ensure 
                                        that the identity of 
                                        the participants in the 
                                        hearings is kept 
                                        confidential.
                    ``(B) More than 1 designated state 
                agency.--In the case of a State that, under 
                section 101(a)(2), designates a State agency to 
                administer the part of the State plan under 
                which vocational rehabilitation services are 
                provided for individuals who are blind (or to 
                supervise the administration of such part by a 
                local agency) and designates a separate State 
                agency to administer the rest of the State 
                plan, the State shall either establish a State 
                Rehabilitation Council for each of the 2 
                agencies that does not meet the requirements in 
                subparagraph (A)(i), or establish 1 State 
                Rehabilitation Council for both agencies if 
                neither agency meets the requirements of 
                subparagraph (A)(i).
            ``(22) Supported employment state plan 
        supplement.--The State plan shall include an assurance 
        that the State has an acceptable plan for carrying out 
        part B of title VI, including the use of funds under 
        that part to supplement funds made available under part 
        B of this title to pay for the cost of services leading 
        to supported employment.
            ``(23) Annual updates.--The plan shall include an 
        assurance that the State will submit to the 
        Commissioner reports containing annual updates of the 
        information required under paragraph (7) (relating to a 
        comprehensive system of personnel development) and any 
        other updates of the information required under this 
        section that are requested by the Commissioner, and 
        annual reports as provided in paragraphs (15) (relating 
        to assessments, estimates, goals and priorities, and 
        reports of progress) and (18) (relating to innovation 
        and expansion), at such time and in such manner as the 
        Secretary may determine to be appropriate.
            ``(24) Certain contracts and cooperative 
        agreements.--
                    ``(A) Contracts with for-profit 
                organizations.--The State plan shall provide 
                that the designated State agency has the 
                authority to enter into contracts with for-
                profit organizations for the purpose of 
                providing, as vocational rehabilitation 
                services, on-the-job training and related 
                programs for individuals with disabilities 
                under part A of title VI, upon a determination 
                by such agency that such for-profit 
                organizations are better qualified to provide 
                such rehabilitation services than nonprofit 
                agencies and organizations.
                    ``(B) Cooperative agreements with private 
                nonprofit organizations.--The State plan shall 
                describe the manner in which cooperative 
                agreements with private nonprofit vocational 
                rehabilitation service providers will be 
                established.
    ``(b) Approval; Disapproval of the State Plan.--
            ``(1) Approval.--The Commissioner shall approve any 
        plan that the Commissioner finds fulfills the 
        conditions specified in this section, and shall 
        disapprove any plan that does not fulfill such 
        conditions.
            ``(2) Disapproval.--Prior to disapproval of the 
        State plan, the Commissioner shall notify the State of 
        the intention to disapprove the plan and shall afford 
        the State reasonable notice and opportunity for a 
        hearing.

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

    ``(a) Eligibility.--
            ``(1) Criterion for eligibility.--An individual is 
        eligible for assistance under this title if the 
        individual--
                    ``(A) is an individual with a disability 
                under section 7(20)(A); and
                    ``(B) requires vocational rehabilitation 
                services to prepare for, secure, retain, or 
                regain employment.
            ``(2) Presumption of benefit.--
                    ``(A) Demonstration.--For purposes of this 
                section, an individual shall be presumed to be 
                an individual that can benefit in terms of an 
                employment outcome from vocational 
                rehabilitation services under section 7(20)(A), 
                unless the designated State unit involved can 
                demonstrate by clear and convincing evidence 
                that such individual is incapable of benefiting 
                in terms of an employment outcome from 
                vocational rehabilitation services due to the 
                severity of the disability of the individual.
                    ``(B) Methods.--In making the demonstration 
                required under subparagraph (A), the designated 
                State unit shall explore the individual's 
                abilities, capabilities, and capacity to 
                perform in work situations, through the use of 
                trial work experiences, as described in section 
                7(2)(D), with appropriate supports provided 
                through the designated State unit, except under 
                limited circumstances when an individual can 
                not take advantage of such experiences. Such 
                experiences shall be of sufficient variety and 
                over a sufficient period of time to determine 
                the eligibility of the individual or to 
                determine the existence of clear and convincing 
                evidence that the individual is incapable of 
                benefiting in terms of an employment outcome 
                from vocational rehabilitation services due to 
                the severity of the disability of the 
                individual.
            ``(3) Presumption of eligibility.--
                    ``(A) In general.--For purposes of this 
                section, an individual who has a disability or 
                is blind as determinedpursuant to title II or 
title XVI of the Social Security Act (42 U.S.C. 401 et seq. and 1381 et 
seq.) shall be--
                            ``(i) considered to be an 
                        individual with a significant 
                        disability under section 7(21)(A); and
                            ``(ii) presumed to be eligible for 
                        vocational rehabilitation services 
                        under this title (provided that the 
                        individual intends to achieve an 
                        employment outcome consistent with the 
                        unique strengths, resources, 
                        priorities, concerns, abilities, 
                        capabilities, interests, and informed 
                        choice of the individual) unless the 
                        designated State unit involved can 
                        demonstrate by clear and convincing 
                        evidence that such individual is 
                        incapable of benefiting in terms of an 
                        employment outcome from vocational 
                        rehabilitation services due to the 
                        severity of the disability of the 
                        individual in accordance with paragraph 
                        (2).
                    ``(B) Construction.--Nothing in this 
                paragraph shall be construed to create an 
                entitlement to any vocational rehabilitation 
                service.
            ``(4) Use of existing information.--
                    ``(A) In general.--To the maximum extent 
                appropriate and consistent with the 
                requirements of this part, for purposes of 
                determining the eligibility of an individual 
                for vocational rehabilitation services under 
                this title and developing the individualized 
                plan for employment described in subsection (b) 
                for the individual, the designated State unit 
                shall use information that is existing and 
                current (as of the date of the determination of 
                eligibility or of the development of the 
                individualized plan for employment), including 
                information available from other programs and 
                providers, particularly information used by 
                education officials and the Social Security 
                Administration, information provided by the 
                individual and the family of the individual, 
                and information obtained under the assessment 
                for determining eligibility and vocational 
                rehabilitation needs.
                    ``(B) Determinations by officials of other 
                agencies.--Determinations made by officials of 
                other agencies, particularly education 
                officials described in section 101(a)(11)(D), 
                regarding whether an individual satisfies 1 or 
                more factors relating to whether an individual 
                is an individual with a disability under 
                section 7(20)(A) or an individual with a 
                significant disability under section 7(21)(A) 
                shall be used, to the extent appropriate and 
                consistent with the requirements of this part, 
                in assisting the designated State unit in 
                making such determinations.
                    ``(C) Basis.--The determination of 
                eligibility for vocational rehabilitation 
                services shall be based on--
                            ``(i) the review of existing data 
                        described in section 7(2)(A)(i); and
                            ``(ii) to the extent that such data 
                        is unavailable or insufficient for 
                        determining eligibility, the provision 
                        of assessment activities described in 
                        section 7(2)(A)(ii).
            ``(5) Determination of ineligibility.--If an 
        individual who applies for services under this title is 
        determined, based on the review of existing data and, 
        to the extent necessary, the assessment activities 
        described in section 7(2)(A)(ii), not to be eligible 
        for the services, or if an eligible individual 
        receiving services under an individualized plan for 
        employment is determined to be no longer eligible for 
        the services--
                    ``(A) the ineligibility determination 
                involved shall be made only after providing an 
                opportunity for full consultation with the 
                individual or, as appropriate, the individual's 
                representative;
                    ``(B) the individual or, as appropriate, 
                the individual's representative, shall be 
                informed in writing (supplemented as necessary 
                by other appropriate modes of communication 
                consistent with the informed choice of the 
                individual) of the ineligibility determination, 
                including--
                            ``(i) the reasons for the 
                        determination; and
                            ``(ii) a description of the means 
                        by which the individual may express, 
                        and seek a remedy for, any 
                        dissatisfaction with the determination, 
                        including the procedures for review by 
                        an impartial hearing officer under 
                        subsection (c);
                    ``(C) the individual shall be provided with 
                a description of services available from the 
                client assistance program under section 112 and 
                information on how to contact that program; and
                    ``(D) any ineligibility determination that 
                is based on a finding that the individual is 
                incapable of benefiting in terms of an 
                employment outcome shall be reviewed--
                            ``(i) within 12 months; and
                            ``(ii) thereafter, if such a review 
                        is requested by the individual or, if 
                        appropriate, by the individual's 
                        representative.
            ``(6) Timeframe for making an eligibility 
        determination.--The designated State unit shall 
        determine whether an individual is eligible for 
        vocational rehabilitation services under this title 
        within a reasonable period of time, not to exceed 60 
        days, after the individual has submitted an application 
        for the services unless--
                    ``(A) exceptional and unforeseen 
                circumstances beyond the control of the 
                designated State unit preclude making an 
                eligibility determination within 60 days and 
                the designated State unit and the individual 
                agree to a specific extension of time; or
                    ``(B) the designated State unit is 
                exploring an individual's abilities, 
                capabilities, and capacity to perform in work 
                situations under paragraph (2)(B).
    ``(b) Development of an Individualized Plan for 
Employment.--
            ``(1) Options for developing an individualized plan 
        for employment.--If an individual is determined to be 
        eligible for vocational rehabilitation services as 
        described in subsection (a), the designated State unit 
        shall complete the assessment for determining 
        eligibility and vocational rehabilitation needs, as 
        appropriate, and shall provide the eligible individual 
        or the individual's representative, in writing and in 
        an appropriate mode of communication, with information 
        on the individual's options for developing an 
        individualized plan for employment, including--
                    ``(A) information on the availability of 
                assistance, to the extent determined to be 
                appropriate by the eligible individual, from a 
                qualified vocational rehabilitation counselor 
                in developing all or part of the individualized 
                plan for employment for the individual, and the 
                availability of technical assistance in 
                developing all or part of the individualized 
                plan for employment for the individual;
                    ``(B) a description of the full range of 
                components that shall be included in an 
                individualized plan for employment;
                    ``(C) as appropriate--
                            ``(i) an explanation of agency 
                        guidelines and criteria associated with 
                        financial commitments concerning an 
                        individualized plan for employment;
                            ``(ii) additional information the 
                        eligible individual requests or the 
                        designated State unit determines to be 
                        necessary; and
                            ``(iii) information on the 
                        availability of assistance in 
                        completing designated State agency 
                        forms required in developing an 
                        individualized plan for employment; and
                    ``(D)(i) a description of the rights and 
                remedies available to such an individual 
                including, if appropriate, recourse to the 
                processes set forth in subsection (c); and
                    ``(ii) a description of the availability of 
                a client assistance program established 
                pursuant to section 112 and information about 
                how to contact the client assistance program.
            ``(2) Mandatory procedures.--
                    ``(A) Written document.--An individualized 
                plan for employment shall be a written document 
                prepared on forms provided by the designated 
                State unit.
                    ``(B) Informed choice.--An individualized 
                plan for employment shall be developed and 
                implemented in a manner that affords eligible 
                individuals the opportunity to exercise 
                informed choice in selecting an employment 
                outcome, the specific vocational rehabilitation 
                services to be provided under the plan, the 
                entity that will provide the vocational 
                rehabilitation services, and the methods used 
                to procure the services, consistent with 
                subsection (d).
                    ``(C) Signatories.--An individualized plan 
                for employment shall be--
                            ``(i) agreed to, and signed by, 
                        such eligible individual or, as 
                        appropriate, the individual's 
                        representative; and
                            ``(ii) approved and signed by a 
                        qualified vocational rehabilitation 
                        counselor employed by the designated 
                        State unit.
                    ``(D) Copy.--A copy of the individualized 
                plan for employment for an eligible individual 
                shall be provided to the individual or, as 
                appropriate, to the individual's 
                representative, in writing and, if appropriate, 
                in the native language or mode of communication 
                of the individual or, as appropriate, of the 
                individual's representative.
                    ``(E) Review and amendment.--The 
                individualized plan for employment shall be--
                            ``(i) reviewed at least annually 
                        by--
                                    ``(I) a qualified 
                                vocational rehabilitation 
                                counselor; and
                                    ``(II) the eligible 
                                individual or, as appropriate, 
                                the individual's 
                                representative; and
                            ``(ii) amended, as necessary, by 
                        the individual or, as appropriate, the 
                        individual's representative, in 
                        collaboration with a representative of 
                        the designated State agency or a 
                        qualified vocational rehabilitation 
                        counselor (to the extent determined to 
                        be appropriate by the individual), if 
                        there are substantive changes in the 
                        employment outcome, the vocational 
                        rehabilitation services to be provided, 
                        or the service providers of the 
                        services (which amendments shall not 
                        take effect until agreed to and signed 
                        by the eligible individual or, as 
                        appropriate, the individual's 
                        representative, and by a qualified 
                        vocational rehabilitation counselor 
                        employed by the designated State unit).
            ``(3) Mandatory components of an individualized 
        plan for employment.--Regardless of the approach 
        selected by an eligible individual to develop an 
        individualized plan for employment, an individualized 
        plan for employment shall, at a minimum, contain 
        mandatory components consisting of--
                    ``(A) a description of the specific 
                employment outcome that is chosen by the 
                eligible individual, consistent with the unique 
                strengths, resources, priorities, concerns, 
                abilities, capabilities, interests, and 
                informed choice of the eligible individual, 
                and, to the maximum extent appropriate, results 
                in employment in an integrated setting;
                    ``(B)(i) a description of the specific 
                vocational rehabilitation services that are--
                            ``(I) needed to achieve the 
                        employment outcome, including, as 
                        appropriate, the provision of assistive 
                        technology devices and assistive 
                        technology services, and personal 
                        assistance services, including training 
                        in the management of such services; and
                            ``(II) provided in the most 
                        integrated setting that is appropriate 
                        for the service involved and is 
                        consistent with the informed choice of 
                        the eligible individual; and
                    ``(ii) timelines for the achievement of the 
                employment outcome and for the initiation of 
                the services;
                    ``(C) a description of the entity chosen by 
                the eligible individual or, as appropriate, the 
                individual's representative, that will provide 
                the vocational rehabilitation services, and the 
                methods used to procure such services;
                    ``(D) a description of criteria to evaluate 
                progress toward achievement of the employment 
                outcome;
                    ``(E) the terms and conditions of the 
                individualized plan for employment, including, 
                as appropriate, information describing--
                            ``(i) the responsibilities of the 
                        designated State unit;
                            ``(ii) the responsibilities of the 
                        eligible individual, including--
                                    ``(I) the responsibilities 
                                the eligible individual will 
                                assume in relation to the 
                                employment outcome of the 
                                individual;
                                    ``(II) if applicable, the 
                                participation of the eligible 
                                individual in paying for the 
                                costs of the plan; and
                                    ``(III) the responsibility 
                                of the eligible individual with 
                                regard to applying for and 
                                securing comparable benefits as 
                                described in section 101(a)(8); 
                                and
                            ``(iii) the responsibilities of 
                        other entities as the result of 
                        arrangements made pursuant to 
                        comparable services or benefits 
                        requirements as described in section 
                        101(a)(8);
                    ``(F) for an eligible individual with the 
                most significant disabilities for whom an 
                employment outcome in a supported employment 
                setting has been determined to be appropriate, 
                information identifying--
                            ``(i) the extended services needed 
                        by the eligible individual; and
                            ``(ii) the source of extended 
                        services or, to the extent that the 
                        source of the extended services cannot 
                        be identified at the time of the 
                        development of the individualized plan 
                        for employment, a description of the 
                        basis for concluding that there is a 
                        reasonable expectation that such source 
                        will become available; and
                    ``(G) as determined to be necessary, a 
                statement of projected need for post-employment 
                services.
    ``(c) Procedures.--
            ``(1) In general.--Each State shall establish 
        procedures for mediation of, and procedures for review 
        through an impartial due process hearing of, 
        determinations made by personnel of the designated 
        State unit that affect the provision of vocational 
        rehabilitation services to applicants or eligible 
        individuals.
            ``(2) Notification.--
                    ``(A) Rights and assistance.--The 
                procedures shall provide that an applicant or 
                an eligible individual or, as appropriate, the 
                applicant's representative or individual's 
                representative shall be notified of--
                            ``(i) the right to obtain review of 
                        determinations described in paragraph 
                        (1) in an impartial due process hearing 
                        under paragraph (5);
                            ``(ii) the right to pursue 
                        mediation with respect to the 
                        determinations under paragraph (4); and
                            ``(iii) the availability of 
                        assistance from the client assistance 
                        program under section 112.
                    ``(B) Timing.--Such notification shall be 
                provided in writing--
                            ``(i) at the time an individual 
                        applies for vocational rehabilitation 
                        services provided under this title;
                            ``(ii) at the time the 
                        individualized plan for employment for 
                        the individual is developed; and
                            ``(iii) upon reduction, suspension, 
                        or cessation of vocational 
                        rehabilitation services for the 
                        individual.
            ``(3) Evidence and representation.--The procedures 
        required under this subsection shall, at a minimum--
                    ``(A) provide an opportunity for an 
                applicant or an eligible individual, or, as 
                appropriate, the applicant's representative or 
                individual's representative, to submit at the 
                mediation session or hearing evidence and 
                information to support the position of the 
                applicant or eligible individual; and
                    ``(B) include provisions to allow an 
                applicant or an eligible individual to be 
                represented in the mediation session or hearing 
                by a person selected by the applicant or 
                eligible individual.
            ``(4) Mediation.--
                    ``(A) Procedures.--Each State shall ensure 
                that procedures are established and implemented 
                under this subsection to allow parties 
                described in paragraph (1) to disputes 
                involving any determination described in 
                paragraph (1) to resolve such disputes through 
                a mediation process that, at a minimum, shall 
                be available whenever a hearing is requested 
                under this subsection.
                    ``(B) Requirements.--Such procedures shall 
                ensure that the mediation process--
                            ``(i) is voluntary on the part of 
                        the parties;
                            ``(ii) is not used to deny or delay 
                        the right of an individual to a hearing 
                        under this subsection, or to deny any 
                        other right afforded under this title; 
                        and
                            ``(iii) is conducted by a qualified 
                        and impartial mediator who is trained 
                        in effective mediation techniques.
                    ``(C) List of mediators.--The State shall 
                maintain a list of individuals who are 
                qualified mediators and knowledgeable in laws 
                (including regulations) relating to the 
                provision of vocational rehabilitation services 
                under this title, from which the mediators 
                described in subparagraph (B) shall be 
                selected.
                    ``(D) Cost.--The State shall bear the cost 
                of the mediation process.
                    ``(E) Scheduling.--Each session in the 
                mediation process shall be scheduled in a 
                timely manner and shall be held in a location 
                that is convenient to the parties to the 
                dispute.
                    ``(F) Agreement.--An agreement reached by 
                the parties to the dispute in the mediation 
                process shall be set forth in a written 
                mediation agreement.
                    ``(G) Confidentiality.--Discussions that 
                occur during the mediation process shall be 
                confidential and may not be used as evidence in 
                any subsequent due process hearing or civil 
                proceeding. The parties to the mediation 
                process may be required to sign a 
                confidentiality pledge prior to the 
                commencement of such process.
                    ``(H) Construction.--Nothing in this 
                subsection shall be construed to preclude the 
                parties to such a dispute from informally 
                resolving the dispute prior to proceedings 
                under this paragraph or paragraph (5), if the 
                informal process used is not used to deny or 
                delay the right of the applicant or eligible 
                individual to a hearing under this subsection 
                or to deny any other right afforded under this 
                title.
            ``(5) Hearings.--
                    ``(A) Officer.--A due process hearing 
                described in paragraph (2) shall be conducted 
                by an impartial hearing officer who shall issue 
                a decision based on the provisions of the 
                approved State plan, this Act (including 
                regulations implementing this Act), and State 
                regulations and policies that are consistent 
                with the Federal requirements specified in this 
                title. The officer shall provide the decision 
                in writing to the applicant or eligible 
                individual, or, as appropriate, the applicant's 
                representative or individual's representative, 
                and to the designated State unit.
                    ``(B) List.--The designated State unit 
                shall maintain a list of qualified impartial 
                hearing officers who are knowledgeable in laws 
                (including regulations) relating to the 
                provision of vocational rehabilitation services 
                under this title from which the officer 
                described in subparagraph (A) shall be 
                selected. For the purposes of maintaining such 
                list, impartial hearing officers shall be 
                identified jointly by--
                            ``(i) the designated State unit; 
                        and
                            ``(ii) members of the Council or 
                        commission, as appropriate, described 
                        in section 101(a)(21).
                    ``(C) Selection.--Such an impartial hearing 
                officer shall be selected to hear a particular 
                case relating to a determination--
                            ``(i) on a random basis; or
                            ``(ii) by agreement between--
                                    ``(I) the Director of the 
                                designated State unit and the 
                                individual with a disability; 
                                or
                                    ``(II) in appropriate 
                                cases, the Director and the 
                                individual's representative.
                    ``(D) Procedures for seeking review.--A 
                State may establish procedures to enable a 
                party involved in a hearing under this 
                paragraph to seek an impartial review of the 
                decision of the hearing officer under 
                subparagraph (A) by--
                            ``(i) the chief official of the 
                        designated State agency if the State 
                        has established both a designated State 
                        agency and a designated State unit 
                        under section 101(a)(2); or
                            ``(ii) an official from the office 
                        of the Governor.
                    ``(E) Review request.--If the State 
                establishes impartial review procedures under 
                subparagraph (D), either party may request the 
                review of the decision of the hearing officer 
                within 20 days after the decision.
                    ``(F) Reviewing official.--The reviewing 
                official described in subparagraph (D) shall--
                            ``(i) in conducting the review, 
                        provide an opportunity for the 
                        submission of additional evidence and 
                        information relevant to a final 
                        decision concerning the matter under 
                        review;
                            ``(ii) not overturn or modify the 
                        decision of the hearing officer, or 
                        part of the decision, that supports the 
                        position of the applicant or eligible 
                        individual unless the reviewing 
                        official concludes, based on clear and 
                        convincing evidence, that the decision 
                        of the impartial hearing officer is 
                        clearly erroneous on the basis of being 
                        contrary to the approved State plan, 
                        this Act (including regulations 
                        implementing this Act) or any State 
                        regulation or policy that is consistent 
                        with the Federal requirements specified 
                        in this title; and
                            ``(iii) make a final decision with 
                        respect to the matter in a timely 
                        manner and provide such decision in 
                        writing to the applicant or eligible 
                        individual, or, as appropriate, the 
                        applicant's representative or 
                        individual's representative, and to the 
                        designated State unit, including a full 
                        report of the findings and the grounds 
                        for such decision.
                    ``(G) Finality of hearing decision.--A 
                decision made after a hearing under 
                subparagraph (A) shall be final, except that a 
                party may request an impartial review if the 
                State has established procedures for such 
                review under subparagraph (D) and a party 
                involved in a hearing may bring a civil action 
                under subparagraph (J).
                    ``(H) Finality of review.--A decision made 
                under subparagraph (F) shall be final unless 
                such a party brings a civil action under 
                subparagraph (J).
                    ``(I) Implementation.--If a party brings a 
                civil action under subparagraph (J) to 
                challenge a final decision of a hearing officer 
                under subparagraph (A) or to challenge a final 
                decision of a State reviewing official under 
                subparagraph (F), the final decision involved 
                shall be implemented pending review by the 
                court.
                    ``(J) Civil action.--
                            ``(i) In general.--Any party 
                        aggrieved by a final decision described 
                        in subparagraph (I), may bring a civil 
                        action for review of such decision. The 
                        action may be brought in any State 
                        court of competent jurisdiction or in a 
                        district court of the United States of 
                        competent jurisdiction without regard 
                        to the amount in controversy.
                            ``(ii) Procedure.--In any action 
                        brought under this subparagraph, the 
                        court--
                                    ``(I) shall receive the 
                                records relating to the hearing 
                                under subparagraph (A) and the 
                                records relating to the State 
                                review under subparagraphs (D) 
                                through (F), if applicable;
                                    ``(II) shall hear 
                                additional evidence at the 
                                request of a party to the 
                                action; and
                                    ``(III) basing the decision 
                                of the court on the 
                                preponderance of the evidence, 
                                shall grant such relief as the 
                                court determines to be 
                                appropriate.
            ``(6) Hearing board.--
                    ``(A) In general.--A fair hearing board, 
                established by a State before January 1, 1985, 
                and authorized under State law to review 
                determinations or decisions under this Act, is 
                authorized to carry out the responsibilities of 
                the impartial hearing officer under this 
                subsection.
                    ``(B) Application.--The provisions of 
                paragraphs (1), (2), and (3) that relate to due 
                process hearings do not apply, and paragraph 
                (5) (other than subparagraph (J)) does not 
                apply, to any State to which subparagraph (A) 
                applies.
            ``(7) Impact on provision of services.--Unless the 
        individual with a disability so requests, or, in an 
        appropriate case, the individual's representative, so 
        requests, pending a decision by a mediator, hearing 
        officer, or reviewing officer under this subsection, 
        the designated State unit shall not institute a 
        suspension, reduction, or termination of services being 
        provided for the individual, including evaluation and 
        assessment services and plan development, unless such 
        services have been obtained through misrepresentation, 
        fraud, collusion, or criminal conduct on the part of 
        the individual, or the individual's representative.
            ``(8) Information collection and report.--
                    ``(A) In general.--The Director of the 
                designated State unit shall collect information 
                described in subparagraph (B) and prepare and 
                submit to the Commissioner a report containing 
                such information. The Commissioner shall 
                prepare a summary of the information furnished 
                under this paragraph and include the summary in 
                the annual report submitted under section 13. 
                The Commissioner shall also collect copies of 
                the final decisions of impartial hearing 
                officers conducting hearings under this 
                subsection and State officials conducting 
                reviews under this subsection.
                    ``(B) Information.--The information 
                required to be collected under this subsection 
                includes--
                            ``(i) a copy of the standards used 
                        by State reviewing officials for 
                        reviewing decisions made by impartial 
                        hearing officers under this subsection;
                            ``(ii) information on the number of 
                        hearings and reviews sought from the 
                        impartial hearing officers and the 
                        State reviewing officials, including 
                        the type of complaints and the issues 
                        involved;
                            ``(iii) information on the number 
                        of hearing decisions made under this 
                        subsection that were not reviewed by 
                        the State reviewing officials; and
                            ``(iv) information on the number of 
                        the hearing decisions that were 
                        reviewed by the State reviewing 
                        officials, and, based on such reviews, 
                        the number of hearing decisions that 
                        were--
                                    ``(I) sustained in favor of 
                                an applicant or eligible 
                                individual;
                                    ``(II) sustained in favor 
                                of the designated State unit;
                                    ``(III) reversed in whole 
                                or in part in favor of the 
                                applicant or eligible 
                                individual; and
                                    ``(IV) reversed in whole or 
                                in part in favor of the 
                                designated State unit.
                    ``(C) Confidentiality.--The confidentiality 
                of records of applicants and eligible 
                individuals maintained by the designated State 
                unit shall not preclude the access of the 
                Commissioner to those records for the purposes 
                described in subparagraph (A).
    ``(d) Policies and Procedures.--Each designated State 
agency, in consultation with the State Rehabilitation Council, 
if the State has such a council, shall, consistent with section 
100(a)(3)(C), develop and implement written policies and 
procedures that enable each individual who is an applicant for 
or eligible to receive vocational rehabilitation services under 
this title to exercise informed choice throughout the 
vocational rehabilitation process carried out under this title, 
including policies and procedures that require the designated 
State agency--
            ``(1) to inform each such applicant and eligible 
        individual (including students with disabilities who 
        are making the transition from programs under the 
        responsibility of an educational agency to programs 
        under the responsibility of the designated State unit), 
        through appropriate modes of communication, about the 
        availability of, and opportunities to exercise, 
        informed choice, including the availability of support 
        services for individuals with cognitive or other 
        disabilities who require assistance in exercising 
        informed choice, throughout the vocational 
        rehabilitation process;
            ``(2) to assist applicants and eligible individuals 
        in exercising informed choice in decisions related to 
        the provision of assessment services under this title;
            ``(3) to develop and implement flexible procurement 
        policies and methods that facilitate the provision of 
        services, and that afford eligible individuals 
        meaningful choices among the methods used to procure 
        services, under this title;
            ``(4) to provide or assist eligible individuals in 
        acquiring information that enables those individuals to 
        exercise informed choice under this title in the 
        selection of--
                    ``(A) the employment outcome;
                    ``(B) the specific vocational 
                rehabilitation services needed to achieve the 
                employment outcome;
                    ``(C) the entity that will provide the 
                services;
                    ``(D) the employment setting and the 
                settings in which the services will be 
                provided; and
                    ``(E) the methods available for procuring 
                the services; and
            ``(5) to ensure that the availability and scope of 
        informed choice provided under this section is 
        consistent with the obligations of the designated State 
        agency under this title.

``SEC. 103. VOCATIONAL REHABILITATION SERVICES.

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

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

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

``SEC. 105. STATE REHABILITATION COUNCIL.

    ``(a) Establishment.--
            ``(1) In general.--Except as provided in section 
        101(a)(21)(A)(i), to be eligible to receive financial 
        assistance under this title a State shall establish a 
        State Rehabilitation Council (referred to in this 
        section as the `Council') in accordance with this 
        section.
            ``(2) Separate agency for individuals who are 
        blind.--A State that designates a State agency to 
        administer the part of the State plan under which 
        vocational rehabilitation services are provided for 
        individuals who are blind under section 101(a)(2)(A)(i) 
        may establish a separate Council in accordance with 
        this section to perform the duties of such a Council 
        with respect to such State agency.
    ``(b) Composition and Appointment.--
            ``(1) Composition.--
                    ``(A) In general.--Except in the case of a 
                separate Council established under subsection 
                (a)(2), the Council shall be composed of--
                            ``(i) at least one representative 
                        of the Statewide Independent Living 
                        Council established under section 705, 
                        which representative may be the 
                        chairperson or other designee of the 
                        Council;
                            ``(ii) at least one representative 
                        of a parent training and information 
                        center established pursuant to section 
                        682(a) of the Individuals with 
                        Disabilities Education Act (as added by 
                        section 101 of the Individuals with 
                        Disabilities Education Act Amendments 
                        of 1997; Public Law 105-17);
                            ``(iii) at least one representative 
                        of the client assistance program 
                        established under section 112;
                            ``(iv) at least one qualified 
                        vocational rehabilitation counselor, 
                        with knowledge of and experience with 
                        vocational rehabilitation programs, who 
                        shall serve as an ex officio, nonvoting 
                        member of the Council if the counselor 
                        is an employee of the designated State 
                        agency;
                            ``(v) at least one representative 
                        of community rehabilitation program 
                        service providers;
                            ``(vi) four representatives of 
                        business, industry, and labor;
                            ``(vii) representatives of 
                        disability advocacy groups representing 
                        a cross section of--
                                    ``(I) individuals with 
                                physical, cognitive, sensory, 
                                and mental disabilities; and
                                    ``(II) individuals' 
                                representatives of individuals 
                                with disabilities who have 
                                difficulty in representing 
                                themselves or are unable due to 
                                their disabilities to represent 
                                themselves;
                            ``(viii) current or former 
                        applicants for, or recipients of, 
                        vocational rehabilitation services;
                            ``(ix) in a State in which one or 
                        more projects are carried out under 
                        section 121, at least one 
                        representative of the directors of the 
                        projects;
                            ``(x) at least one representative 
                        of the State educational agency 
                        responsible for the public education of 
                        students with disabilities who are 
                        eligible to receive services under this 
                        title and part B of the Individuals 
                        with Disabilities Education Act; and
                            ``(xi) at least one representative 
                        of the State workforce investment 
                        board.
                    ``(B) Separate council.--In the case of a 
                separate Council established under subsection 
                (a)(2), the Council shall be composed of--
                            ``(i) at least one representative 
                        described in subparagraph (A)(i);
                            ``(ii) at least one representative 
                        described in subparagraph (A)(ii);
                            ``(iii) at least one representative 
                        described in subparagraph (A)(iii);
                            ``(iv) at least one vocational 
                        rehabilitation counselor described in 
                        subparagraph (A)(iv), who shall serve 
                        as described in such subparagraph;
                            ``(v) at least one representative 
                        described in subparagraph (A)(v);
                            ``(vi) four representatives 
                        described in subparagraph (A)(vi);
                            ``(vii) at least one representative 
                        of a disability advocacy group 
                        representing individuals who are blind;
                            ``(viii) at least one individual's 
                        representative, of an individual who--
                                    ``(I) is an individual who 
                                is blind and has multiple 
                                disabilities; and
                                    ``(II) has difficulty in 
                                representing himself or herself 
                                or is unable due to 
                                disabilities to represent 
                                himself or herself;
                            ``(ix) applicants or recipients 
                        described in subparagraph (A)(viii);
                            ``(x) in a State described in 
                        subparagraph (A)(ix), at least one 
                        representative described in such 
                        subparagraph;
                            ``(xi) at least one representative 
                        described in subparagraph (A)(x); and
                            ``(xii) at least one representative 
                        described in subparagraph (A)(xi).
                    ``(C) Exception.--In the case of a separate 
                Council established under subsection (a)(2), 
                any Council that is required by State law, as 
                in effect on the date of enactment of the 
                Rehabilitation Act Amendments of 1992, to have 
                fewer than 15 members shall be deemed to be in 
                compliance with subparagraph (B) if the 
                Council--
                            ``(i) meets the requirements of 
                        subparagraph (B), other than the 
                        requirements of clauses (vi) and (ix) 
                        of such subparagraph; and
                            ``(ii) includes at least--
                                    ``(I) one representative 
                                described in subparagraph 
                                (B)(vi); and
                                    ``(II) one applicant or 
                                recipient described in 
                                subparagraph (B)(ix).
            ``(2) Ex officio member.--The Director of the 
        designated State unit shall be an ex officio, nonvoting 
        member of the Council.
            ``(3) Appointment.--Members of the Council shall be 
        appointed by the Governor. The Governor shall select 
        members after soliciting recommendations from 
        representatives of organizations representing a broad 
        range of individuals with disabilities and 
        organizations interested in individuals with 
        disabilities. In selecting members, the Governor shall 
        consider, to the greatest extent practicable, the 
        extent to which minority populations are represented on 
        the Council.
            ``(4) Qualifications.--
                    ``(A) In general.--A majority of Council 
                members shall be persons who are--
                            ``(i) individuals with disabilities 
                        described in section 7(20)(A); and
                            ``(ii) not employed by the 
                        designated State unit.
                    ``(B) Separate council.--In the case of a 
                separate Council established under subsection 
                (a)(2), a majority of Council members shall be 
                persons who are--
                            ``(i) blind; and
                            ``(ii) not employed by the 
                        designated State unit.
            ``(5) Chairperson.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Council shall select a 
                chairperson from among the membership of the 
                Council.
                    ``(B) Designation by governor.--In States 
                in which the chief executive officer does not 
                have veto power pursuant to State law, the 
                Governor shall designate a member of the 
                Council to serve as the chairperson of the 
                Council or shall require the Council to so 
                designate such a member.
            ``(6) Terms of appointment.--
                    ``(A) Length of term.--Each member of the 
                Council shall serve for a term of not more than 
                3 years, except that--
                            ``(i) a member appointed to fill a 
                        vacancy occurring prior to the 
                        expiration of the term for which a 
                        predecessor was appointed, shall be 
                        appointed for the remainder of such 
                        term; and
                            ``(ii) the terms of service of the 
                        members initially appointed shall be 
                        (as specified by the Governor) for such 
                        fewer number of years as will provide 
                        for the expiration of terms on a 
                        staggered basis.
                    ``(B) Number of terms.--No member of the 
                Council, other than a representative described 
                in clause (iii) or (ix) of paragraph (1)(A), or 
                clause (iii) or (x) of paragraph (1)(B), may 
                serve more than two consecutive full terms.
            ``(7) Vacancies.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any vacancy occurring in the 
                membership of the Council shall be filled in 
                the same manner as the original appointment. 
                The vacancy shall not affect the power of the 
                remaining members to execute the duties of the 
                Council.
                    ``(B) Delegation.--The Governor may 
                delegate the authority to fill such a vacancy 
                to the remaining members of the Council after 
                making the original appointment.
    ``(c) Functions of Council.--The Council shall, after 
consulting with the State workforce investment board--
            ``(1) review, analyze, and advise the designated 
        State unit regarding the performance of the 
        responsibilities of the unit under this title, 
        particularly responsibilities relating to--
                    ``(A) eligibility (including order of 
                selection);
                    ``(B) the extent, scope, and effectiveness 
                of services provided; and
                    ``(C) functions performed by State agencies 
                that affect or that potentially affect the 
                ability of individuals with disabilities in 
                achieving employment outcomes under this title;
            ``(2) in partnership with the designated State 
        unit--
                    ``(A) develop, agree to, and review State 
                goals and priorities in accordance with section 
                101(a)(15)(C); and
                    ``(B) evaluate the effectiveness of the 
                vocational rehabilitation program and submit 
                reports of progress to the Commissioner in 
                accordance with section 101(a)(15)(E);
            ``(3) advise the designated State agency and the 
        designated State unit regarding activities authorized 
        to be carried out under this title, and assist in the 
        preparation of the State plan and amendments to the 
        plan, applications, reports, needs assessments, and 
        evaluations required by this title;
            ``(4) to the extent feasible, conduct a review and 
        analysis of the effectiveness of, and consumer 
        satisfaction with--
                    ``(A) the functions performed by the 
                designated State agency;
                    ``(B) vocational rehabilitation services 
                provided by State agencies and other public and 
                private entities responsible for providing 
                vocational rehabilitation services to 
                individuals with disabilities under this Act; 
                and
                    ``(C) employment outcomes achieved by 
                eligible individuals receiving services under 
                this title, including the availability of 
                health and other employment benefits in 
                connection with such employment outcomes;
            ``(5) prepare and submit an annual report to the 
        Governor and the Commissioner on the status of 
        vocational rehabilitation programs operated within the 
        State, and make the report available to the public;
            ``(6) to avoid duplication of efforts and enhance 
        the number of individuals served, coordinate activities 
        with the activities of other councils within the State, 
        including the Statewide Independent Living Council 
        established under section 705, the advisory panel 
        established under section 612(a)(21) of the Individual 
        with Disabilities Education Act (as amended by section 
        101 of the Individuals with Disabilities Education Act 
        Amendments of 1997; Public Law 105-17), the State 
        Developmental Disabilities Council described in section 
        124 of the Developmental Disabilities Assistance and 
        Bill of Rights Act (42 U.S.C. 6024), the State mental 
        health planning council established under section 
        1914(a) of the Public Health Service Act (42 U.S.C. 
        300x-4(a)), and the State workforce investment board;
            ``(7) provide for coordination and the 
        establishment of working relationships between the 
        designated State agency and the Statewide Independent 
        Living Council and centers for independent living 
        within the State; and
            ``(8) perform such other functions, consistent with 
        the purpose of this title, as the State Rehabilitation 
        Council determines to be appropriate, that are 
        comparable to the other functions performed by the 
        Council.
    ``(d) Resources.--
            ``(1) Plan.--The Council shall prepare, in 
        conjunction with the designated State unit, a plan for 
        the provision of such resources, including such staff 
        and other personnel, as may be necessary and sufficient 
        to carry out the functions of the Council under this 
        section. The resource plan shall, to the maximum extent 
        possible, rely on the use of resources in existence 
        during the period of implementation of the plan.
            ``(2) Resolution of disagreements.--To the extent 
        that there is a disagreement between the Council and 
        the designated State unit in regard to the resources 
        necessary to carry out the functions of the Council as 
        set forth in this section, the disagreement shall be 
        resolved by the Governor consistent with paragraph (1).
            ``(3) Supervision and evaluation.--Each Council 
        shall, consistent with State law, supervise and 
        evaluate such staff and other personnel as may be 
        necessary to carry out its functions under this 
        section.
            ``(4) Personnel conflict of interest.--While 
        assisting the Council in carrying out its duties, staff 
        and other personnel shall not be assigned duties by the 
        designated State unit or any other agency or office of 
        the State, that would create a conflict of interest.
    ``(e) Conflict of Interest.--No member of the Council shall 
cast a vote on any matter that would provide direct financial 
benefit to the member or otherwise give the appearance of a 
conflict of interest under State law.
    ``(f) Meetings.--The Council shall convene at least 4 
meetings a year in such places as it determines to be necessary 
to conduct Council business and conduct such forums or hearings 
as the Council considers appropriate. The meetings, hearings, 
and forums shall be publicly announced. The meetings shall be 
open and accessible to the general public unless there is a 
valid reason for an executive session.
    ``(g) Compensation and Expenses.--The Council may use funds 
allocated to the Council by the designated State unit under 
this title (except for funds appropriated to carry out the 
client assistance program under section 112 and funds reserved 
pursuant to section 110(c) to carry out part C) to reimburse 
members of the Council for reasonable and necessary expenses of 
attending Council meetings and performing Council duties 
(including child care and personal assistance services), and to 
pay compensation to a member of the Council, if such member is 
not employed or must forfeit wages from other employment, for 
each day the member is engaged in performing the duties of the 
Council.
    ``(h) Hearings and Forums.--The Council is authorized to 
hold such hearings and forums as the Council may determine to 
be necessary to carry out the duties of the Council.

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

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

``SEC. 107. MONITORING AND REVIEW.

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

``SEC. 108. EXPENDITURE OF CERTAIN AMOUNTS.

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

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

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

           ``Part B--Basic Vocational Rehabilitation Services


                           ``state allotments


    ``Sec. 110. (a)(1) Subject to the provisions of subsection 
(c), for each fiscal year beginning before October 1, 1978, 
each State shall be entitled to an allotment of an amount 
bearing the same ratio to the amount authorized to be 
appropriated under section 100(b)(1) for allotment under this 
section as the product of--
            ``(A) the population of the State; and
            ``(B) the square of its allotment percentage,
bears to the sum of the corresponding products for all the 
States.
    ``(2)(A) For each fiscal year beginning on or after October 
1, 1978, each State shall be entitled to an allotment in an 
amount equal to the amount such State received under paragraph 
(1) for the fiscal year ending September 30, 1978, and an 
additional amount determined pursuant to subparagraph (B) of 
this paragraph.
    ``(B) For each fiscal year beginning on or after October 1, 
1978, each State shall be entitled to an allotment, from any 
amount authorized to be appropriated for such fiscal year under 
section 100(b)(1) for allotment under this section in excess of 
the amount appropriated under section 100(b)(1)(A) for the 
fiscal year ending September 30, 1978, in an amount equal to 
the sum of--
            ``(i) an amount bearing the same ratio to 50 
        percent of such excess amount as the product of the 
        population of the State and the square of its allotment 
        percentage bears to the sum of the corresponding 
        products for all the States; and
            ``(ii) an amount bearing the same ratio to 50 
        percent of such excess amount as the product of the 
        population of the State and its allotment percentage 
        bears to the sum of the corresponding products for all 
        the States.
    ``(3) The sum of the payment to any State (other than Guam, 
American Samoa, the Virgin Islands, and the Commonwealth of the 
Northern Mariana Islands) under this subsection for any fiscal 
year which is less than one-third of 1 percent of the amount 
appropriated under section 100(b)(1), or $3,000,000, whichever 
is greater, shall be increased to that amount, the total of the 
increases thereby required being derived by proportionately 
reducing the allotment to each of the remaining such States 
under this subsection, but with such adjustments as may be 
necessary to prevent the sum of the allotments made under this 
subsection to any such remaining State from being thereby 
reduced to less than that amount.
    ``(b)(1) Not later than forty-five days prior to the end of 
the fiscal year, the Commissioner shall determine, after 
reasonable opportunity for the submission to the Commissioner 
of comments by the State agency administering or supervising 
the program established under this title, that any payment of 
an allotment to a State under section 111(a) for any fiscal 
year will not be utilized by such State in carrying out the 
purposes of this title.
    ``(2) As soon as practicable but not later than the end of 
the fiscal year, the Commissioner shall make such amount 
available for carrying out the purposes of this title to one or 
more other States to the extent the Commissioner determines 
such other State will be able to use such additional amount 
during that fiscal year or the subsequent fiscal year for 
carrying out such purposes. The Commissioner shall make such 
amount available only if such other State will be able to make 
sufficient payments from non-Federal sources to pay for the 
non-Federal share of the cost of vocational rehabilitation 
services under the State plan for the fiscal year for which the 
amount was appropriated.
    ``(3) For the purposes of this part, any amount made 
available to a State for any fiscal year pursuant to this 
subsection shall be regarded as an increase of such State's 
allotment (as determined under the preceding provisions of this 
section) for such year.
    ``(c)(1) For fiscal year 1987 and for each subsequent 
fiscal year, the Commissioner shall reserve from the amount 
appropriated under section 100(b)(1) for allotment under this 
section a sum, determined under paragraph (2), to carry out the 
purposes of part C.
    ``(2) The sum referred to in paragraph (1) shall be, as 
determined by the Secretary--
            ``(A) not less than three-quarters of 1 percent and 
        not more than 1.5 percent of the amount referred to in 
        paragraph (1), for fiscal year 1999; and
            ``(B) not less than 1 percent and not more than 1.5 
        percent of the amount referred to in paragraph (1), for 
        each of fiscal years 2000 through 2003.


                          ``payments to states


    ``Sec. 111. (a)(1) Except as provided in paragraph (2), 
from each State's allotment under this part for any fiscal 
year, the Commissioner shall pay to a State an amount equal to 
the Federal share of the cost of vocational rehabilitation 
services under the plan for that State approved under section 
101, including expenditures for the administration of the State 
plan.
    ``(2)(A) The total of payments under paragraph (1) to a 
State for a fiscal year may not exceed its allotment under 
subsection (a) of section 110 for such year.
    ``(B) For fiscal year 1994 and each fiscal year thereafter, 
the amount otherwise payable to a State for a fiscal year under 
this section shall be reduced by the amount by which 
expenditures from non-Federal sources under the State plan 
under this title for the previous fiscal year are less than the 
total of such expenditures for the second fiscal year preceding 
the previous fiscal year.
    ``(C) The Commissioner may waive or modify any requirement 
or limitation under subparagraph (B) or section 101(a)(17) if 
the Commissioner determines that a waiver or modification is an 
equitable response to exceptional or uncontrollable 
circumstances affecting the State.
    ``(3)(A) Except as provided in subparagraph (B), the amount 
of a payment under this section with respect to any 
construction project in any State shall be equal to the same 
percentage of the cost of such project as the Federal share 
that is applicable in the case of rehabilitation facilities (as 
defined in section 645(g) of the Public Health Service Act (42 
U.S.C. 291o(a))), in such State.
    ``(B) If the Federal share with respect to rehabilitation 
facilities in such State is determined pursuant to section 
645(b)(2) of such Act (42 U.S.C. 291o(b)(2)), the percentage of 
the cost for purposes of this section shall be determined in 
accordance with regulations prescribed by the Commissioner 
designed to achieve as nearly as practicable results comparable 
to the results obtained under such section.
    ``(b) The method of computing and paying amounts pursuant 
to subsection (a) shall be as follows:
            ``(1) The Commissioner shall, prior to the 
        beginning of each calendar quarter or other period 
        prescribed by the Commissioner, estimate the amount to 
        be paid to each State under the provisions of such 
        subsection for such period, such estimate to be based 
        on such records of the State and information furnished 
        by it, and such other investigation as the Commissioner 
        may find necessary.
            ``(2) The Commissioner shall pay, from the 
        allotment available therefor, the amount so estimated 
        by the Commissioner for such period, reduced or 
        increased, as the case may be, by any sum (not 
        previously adjusted under this paragraph) by which the 
        Commissioner finds that the estimate of the amount to 
        be paid the State for any prior period under such 
        subsection was greater or less than the amount which 
        should have been paid to the State for such prior 
        period under such subsection. Such payment shall be 
        made prior to audit or settlement by the General 
        Accounting Office, shall be made through the disbursing 
        facilities of the Treasury Department, and shall be 
        made in such installments as the Commissioner may 
        determine.


                      ``client assistance program


    ``Sec. 112. (a) From funds appropriated under subsection 
(h), the Secretary shall, in accordance with this section, make 
grants to States to establish and carry out client assistance 
programs to provide assistance in informing and advising all 
clients and client applicants of all available benefits under 
this Act, and, upon request of such clients or client 
applicants, to assist and advocate for such clients or 
applicants in their relationships with projects, programs, and 
services provided under this Act, including assistance and 
advocacy in pursuing legal, administrative, or other 
appropriate remedies to ensure the protection of the rights of 
such individuals under this Act and to facilitate access to the 
services funded under this Act through individual and systemic 
advocacy. The client assistance program shall provide 
information on the available services and benefits under this 
Act and title I of the Americans with Disabilities Act of 1990 
(42 U.S.C. 12111 et seq.) to individuals with disabilities in 
the State, especially with regard to individuals with 
disabilities who have traditionally been unserved or 
underserved by vocational rehabilitation programs. In providing 
assistance and advocacy under this subsection with respect to 
services under this title, a client assistance program may 
provide the assistance and advocacy with respect to services 
that are directly related to facilitating the employment of the 
individual.
    ``(b) No State may receive payments from its allotment 
under this Act in any fiscal year unless the State has in 
effect not later than October 1, 1984, a client assistance 
program which--
            ``(1) has the authority to pursue legal, 
        administrative, and other appropriate remedies to 
        ensure the protection of rights of individuals with 
        disabilities who are receiving treatments, services, or 
        rehabilitation under this Act within the State; and
            ``(2) meets the requirements of designation under 
        subsection (c).
    ``(c)(1)(A) The Governor shall designate a public or 
private agency to conduct the client assistance program under 
this section. Except as provided in the last sentence of this 
subparagraph, the Governor shall designate an agency which is 
independent of any agency which provides treatment, services, 
or rehabilitation to individuals under this Act. If there is an 
agency in the State which has, or had, prior to the date of 
enactment of the Rehabilitation Amendments of 1984, served as a 
client assistance agency under this section and which received 
Federal financial assistance under this Act, the Governor may, 
in the initial designation, designate an agency which provides 
treatment, services, or rehabilitation to individuals with 
disabilities under this Act.
    ``(B)(i) The Governor may not redesignate the agency 
designated under subparagraph (A) without good cause and 
unless--
            ``(I) the Governor has given the agency 30 days 
        notice of the intention to make such redesignation, 
        including specification of the good cause for such 
        redesignation and an opportunity to respond to the 
        assertion that good cause has been shown;
            ``(II) individuals with disabilities or the 
        individuals' representatives have timely notice of the 
        redesignation and opportunity for public comment; and
            ``(III) the agency has the opportunity to appeal to 
        the Commissioner on the basis that the redesignation 
        was not for good cause.
    ``(ii) If, after the date of enactment of the 
Rehabilitation Act Amendments of 1998--
            ``(I) a designated State agency undergoes any 
        change in the organizational structure of the agency 
        that results in the creation of 1 or more new State 
        agencies or departments or results in the merger of the 
        designated State agency with 1 or more other State 
        agencies or departments; and
            ``(II) an agency (including an office or other 
        unit) within the designated State agency was conducting 
        a client assistance program before the change under the 
        last sentence of subparagraph (A),
the Governor shall redesignate the agency conducting the 
program. In conducting the redesignation, the Governor shall 
designate to conduct the program an agency that is independent 
of any agency that provides treatment, services, or 
rehabilitation to individuals with disabilities under this Act.
    ``(2) In carrying out the provisions of this section, the 
Governor shall consult with the director of the State 
vocational rehabilitation agency, the head of the developmental 
disability protection and advocacy agency, and with 
representatives of professional and consumer organizations 
serving individuals with disabilities in the State.
    ``(3) The agency designated under this subsection shall be 
accountable for the proper use of funds made available to the 
agency.
    ``(d) The agency designated under subsection (c) of this 
section may not bring any class action in carrying out its 
responsibilities under this section.
    ``(e)(1)(A) The Secretary shall allot the sums appropriated 
for each fiscal year under this section among the States on the 
basis of relative population of each State, except that no 
State shall receive less than $50,000.
    ``(B) The Secretary shall allot $30,000 each to American 
Samoa, Guam, the Virgin Islands, and the Commonwealth of the 
Northern Mariana Islands.
    ``(C) For the purpose of this paragraph, the term `State' 
does not include American Samoa, Guam, the Virgin Islands, and 
the Commonwealth of the Northern Mariana Islands.
    ``(D)(i) In any fiscal year that the funds appropriated for 
such fiscal year exceed $7,500,000, the minimum allotment shall 
be $100,000 for States and $45,000 for territories.
    ``(ii) For any fiscal year in which the total amount 
appropriated under subsection (h) exceeds the total amount 
appropriated under such subsection for the preceding fiscal 
year, the Secretary shall increase each of the minimum 
allotments under clause (i) by a percentage that shall not 
exceed the percentage increase in the total amount appropriated 
under such subsection between the preceding fiscal year and the 
fiscal year involved.
    ``(2) The amount of an allotment to a State for a fiscal 
year which the Secretary determines will not be required by the 
State during the period for which it is available for the 
purpose for which allotted shall be available for reallotment 
by the Secretary at appropriate times to other States with 
respect to which such a determination has not been made, in 
proportion to the original allotments of such States for such 
fiscal year, but with such proportionate amount for any of such 
other States being reduced to the extent it exceeds the sum the 
Secretary estimates such State needs and will be able to use 
during such period, and the total of such reduction shall be 
similarly reallotted among the States whose proportionate 
amounts were not so reduced. Any such amount so reallotted to a 
State for a fiscal year shall be deemed to be a part of its 
allotment for such fiscal year.
    ``(3) Except as specifically prohibited by or as otherwise 
provided in State law, the Secretary shall pay to the agency 
designated under subsection (c) the amount specified in the 
application approved under subsection (f).
    ``(f) No grant may be made under this section unless the 
State submits an application to the Secretary at such time, in 
such manner, and containing or accompanied by such information 
as the Secretary deems necessary to meet the requirements of 
this section.
    ``(g) The Secretary shall prescribe regulations applicable 
to the client assistance program which shall include the 
following requirements:
            ``(1) No employees of such programs shall, while so 
        employed, serve as staff or consultants of any 
        rehabilitation project, program, or facility receiving 
        assistance under this Act in the State.
            ``(2) Each program shall be afforded reasonable 
        access to policymaking and administrative personnel in 
        the State and local rehabilitation programs, projects, 
        or facilities.
            ``(3)(A) Each program shall contain provisions 
        designed to assure that to the maximum extent possible 
        alternative means of dispute resolution are available 
        for use at the discretion of an applicant or client of 
        the program prior to resorting to litigation or formal 
        adjudication to resolve a dispute arising under this 
        section.
            ``(B) In subparagraph (A), the term `alternative 
        means of dispute resolution' means any procedure, 
        including good faith negotiation, conciliation, 
        facilitation, mediation, factfinding, and arbitration, 
        and any combination of procedures, that is used in lieu 
        of litigation in a court or formal adjudication in an 
        administrative forum, to resolve a dispute arising 
        under this section.
            ``(4) For purposes of any periodic audit, report, 
        or evaluation of the performance of a client assistance 
        program under this section, the Secretary shall not 
        require such a program to disclose the identity of, or 
        any other personally identifiable information related 
        to, any individual requesting assistance under such 
        program.
    ``(h) There are authorized to be appropriated such sums as 
may be necessary for fiscal years 1999 through 2003 to carry 
out the provisions of this section.

      ``Part C--American Indian Vocational Rehabilitation Services


              ``vocational rehabilitation services grants


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

    ``Part D--Vocational Rehabilitation Services Client Information

``SEC. 131. DATA SHARING.

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

SEC. 405. RESEARCH AND TRAINING.

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

                   ``TITLE II--RESEARCH AND TRAINING


                        ``declaration of purpose


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


                   ``authorization of appropriations


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


     ``national institute on disability and rehabilitation research


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


                        ``interagency committee


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


                ``research and other covered activities


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


               ``rehabilitation research advisory council


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

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

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

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

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

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

``SEC. 302. TRAINING.

    ``(a) Grants and Contracts for Personnel Training.--
            ``(1) Authority.--The Commissioner shall make 
        grants to, and enter into contracts with, States and 
        public or nonprofit agencies and organizations 
        (including institutions of higher education) to pay 
        part of the cost of projects to provide training, 
        traineeships, and related activities, including the 
        provision of technical assistance, that are designed to 
        assist in increasing the numbers of, and upgrading the 
        skills of, qualified personnel (especially 
        rehabilitation counselors) who are trained in providing 
        vocational, medical, social, and psychological 
        rehabilitation services, who are trained to assist 
        individuals with communication and related disorders, 
        who are trained to provide other services provided 
        under this Act, to individuals with disabilities, and 
        who may include--
                    ``(A) personnel specifically trained in 
                providing employment assistance to individuals 
                with disabilities through job development and 
                job placement services;
                    ``(B) personnel specifically trained to 
                identify, assess, and meet the individual 
                rehabilitation needs of individuals with 
                disabilities, including needs for 
                rehabilitation technology;
                    ``(C) personnel specifically trained to 
                deliver services to individuals who may benefit 
                from receiving independent living services;
                    ``(D) personnel specifically trained to 
                deliver services in the client assistance 
                programs;
                    ``(E) personnel specifically trained to 
                deliver services, through supported employment 
                programs, to individuals with a most 
                significant disability; and
                    ``(F) personnel specifically trained to 
                deliver services to individuals with 
                disabilities pursuing self-employment, business 
                ownership, and telecommuting; and
                    ``(G) personnel trained in performing other 
                functions necessary to the provision of 
                vocational, medical, social, and psychological 
                rehabilitation services, and other services 
                provided under this Act.
            ``(2) Authority to provide scholarships.--Grants 
        and contracts under paragraph (1) may be expended for 
        scholarships and may include necessary stipends and 
        allowances.
            ``(3) Related federal statutes.--In carrying out 
        this subsection, the Commissioner may make grants to 
        and enter into contracts with States and public or 
        nonprofit agencies and organizations, including 
        institutions of higher education, to furnish training 
        regarding provisions of Federal statutes, including 
        section 504, title I of the Americans with Disabilities 
        Act of 1990 (42 U.S.C. 12111 et seq.), and the 
        provisions of titles II and XVI of the Social Security 
        Act (42 U.S.C. 401 et seq. and 1381 et seq.), that are 
        related to work incentives for individuals with 
        disabilities.
            ``(4) Training for statewide workforce systems 
        personnel.--The Commissioner may make grants to and 
        enter into contracts under this subsection with States 
        and public or nonprofit agencies and organizations, 
        including institutions of higher education, to furnish 
        training to personnel providing services to individuals 
        with disabilities under title I of the Workforce 
        Investment Act of 1998. Under this paragraph, personnel 
        may be trained--
                    ``(A) in evaluative skills to determine 
                whether an individual with a disability may be 
                served by the State vocational rehabilitation 
                program or another component of a statewide 
                workforce investment system; or
                    ``(B) to assist individuals with 
                disabilities seeking assistance through one-
                stop delivery systems described in section 
                134(c) of the Workforce Investment Act of 1998.
            ``(5) Joint funding.--Training and other activities 
        provided under paragraph (4) for personnel may be 
        jointly funded with the Department of Labor, using 
        funds made available under title I of the Workforce 
        Investment Act of 1998.
    ``(b) Grants and Contracts for Academic Degrees and 
Academic Certificate Granting Training Projects.--
            ``(1) Authority.--
                    ``(A) In general.--The Commissioner may 
                make grants to, and enter into contracts with, 
                States and public or nonprofit agencies and 
                organizations (including institutions of higher 
                education) to pay part of the costs of academic 
                training projects to provide training that 
                leads to an academic degree or academic 
                certificate. In making such grants or entering 
                into such contracts, the Commissioner shall 
                target funds to areas determined under 
                subsection (e) to have shortages of qualified 
                personnel.
                    ``(B) Types of projects.--Academic training 
                projects described in this subsection may 
                include--
                            ``(i) projects to train personnel 
                        in the areas of assisting and 
                        supporting individuals with 
                        disabilities pursuing self-employment, 
                        business ownership, and telecommuting, 
                        and of vocational rehabilitation 
                        counseling, rehabilitation technology, 
                        rehabilitation medicine, rehabilitation 
                        nursing, rehabilitation social work, 
                        rehabilitation psychiatry, 
                        rehabilitation psychology, 
                        rehabilitation dentistry, physical 
                        therapy, occupational therapy, speech 
                        pathology and audiology, physical 
                        education, therapeutic recreation, 
                        community rehabilitation programs, or 
                        prosthetics and orthotics;
                            ``(ii) projects to train personnel 
                        to provide--
                                    ``(I) services to 
                                individuals with specific 
                                disabilities or individuals 
                                with disabilities who 
havespecific impediments to rehabilitation, including individuals who 
are members of populations that are unserved or underserved by programs 
under this Act;
                                    ``(II) job development and 
                                job placement services to 
                                individuals with disabilities;
                                    ``(III) supported 
                                employment services, including 
                                services of employment 
                                specialists for individuals 
                                with disabilities;
                                    ``(IV) specialized services 
                                for individuals with 
                                significant disabilities; or
                                    ``(V) recreation for 
                                individuals with disabilities;
                            ``(iii) projects to train personnel 
                        in other fields contributing to the 
                        rehabilitation of individuals with 
                        disabilities; and
                            ``(iv) projects to train personnel 
                        in the use, applications, and benefits 
                        of rehabilitation technology.
            ``(2) Application.--No grant shall be awarded or 
        contract entered into under this subsection unless the 
        applicant has submitted to the Commissioner an 
        application at such time, in such form, in accordance 
        with such procedures, and including such information as 
        the Secretary may require, including--
                    ``(A) a description of how the designated 
                State unit or units will participate in the 
                project to be funded under the grant or 
                contract, including, as appropriate, 
                participation on advisory committees, as 
                practicum sites, in curriculum development, and 
                in other ways so as to build closer 
                relationships between the applicant and the 
                designated State unit and to encourage students 
                to pursue careers in public vocational 
                rehabilitation programs;
                    ``(B) the identification of potential 
                employers that provide employment that meets 
                the requirements of paragraph (5)(A)(i); and
                    ``(C) an assurance that data on the 
                employment of graduates or trainees who 
                participate in the project is accurate.
            ``(3) Limitation.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no grant or contract under 
                this subsection may be used to provide any one 
                course of study to an individual for a period 
                of more than 4 years.
                    ``(B) Exception.--If a grant or contract 
                recipient under this subsection determines that 
                an individual has a disability which seriously 
                affects the completion of training under this 
                subsection, the grant or contract recipient may 
                extend the period referred to in subparagraph 
                (A).
            ``(4) Authority to provide scholarships.--Grants 
        and contracts under paragraph (1) may be expanded to 
        provide services that include the provision of 
        scholarships and necessary stipends and allowances.
            ``(5) Agreements.--
                    ``(A) Contents.--A recipient of a grant or 
                contract under this subsection shall provide 
                assurances to the Commissioner that each 
                individual who receives a scholarship, for any 
                academic year beginning after June 1, 1992, 
                utilizing funds provided under such grant or 
                contract shall enter into an agreement with the 
                recipient under which the individual shall--
                            ``(i) maintain employment--
                                    ``(I) in a nonprofit 
                                rehabilitation agency or 
                                related agency or in a State 
                                rehabilitation agency or 
                                related agency, including a 
                                professional corporation or 
                                professional practice group 
                                through which the individual 
                                has a service arrangement with 
                                the designated State agency;
                                    ``(II) on a full- or part-
                                time basis; and
                                    ``(III) for a period of not 
                                less than the full-time 
                                equivalent of 2 years for each 
                                year for which assistance under 
                                this section was received by 
                                the individual,
                        within a period, beginning after the 
                        recipient completes the training for 
                        which the scholarship was awarded, of 
                        not more than the sum of the number of 
                        years in the period described in 
                        subclause (III) and 2 additional years; 
                        and
                            ``(ii) repay all or part of any 
                        scholarship received, plus interest, if 
                        the individual does not fulfill the 
                        requirements of clause (i),
                except as the Commissioner by regulation may 
                provide for repayment exceptions and deferrals.
                    ``(B) Enforcement.--The Commissioner shall 
                be responsible for the enforcement of each 
                agreement entered into under subparagraph (A) 
                upon completion of the training involved under 
                such subparagraph.
    ``(c) Grants to Historically Black Colleges and 
Universities.--The Commissioner, in carrying out this section, 
shall make grants to historically Black colleges and 
universities and other institutions of higher education whose 
minority student enrollment is at least 50 percent of the total 
enrollment of the institution.
    ``(d) Application.--A grant may not be awarded to a State 
or other organization under this section unless the State or 
organization has submitted an application to the Commissioner 
at such time, in such form, in accordance with such procedures, 
and containing such information as the Commissioner may 
require. Any such application shall include a detailed 
description of strategies that will be utilized to recruit and 
train individuals so as to reflect the diverse populations of 
the United States as part of the effort to increase the number 
of individuals with disabilities, and individuals who are from 
linguistically and culturally diverse backgrounds, who are 
available to provide rehabilitation services.
    ``(e) Evaluation and Collection of Data.--The Commissioner 
shall evaluate the impact of the training programs conducted 
under this section, and collect information on the training 
needs of, and data on shortages of qualified personnel 
necessary to provide services to individuals with disabilities. 
The Commissioner shall prepare and submit to Congress, by 
September 30 of each fiscal year, a report setting forth and 
justifying in detail how the funds made available for training 
under this section for the fiscal year prior to such submission 
are allocated by professional discipline and other program 
areas. The report shall also contain findings on such personnel 
shortages, how funds proposed for the succeeding fiscal year 
will be allocated under the President's budget proposal, and 
how the findings on personnel shortages justify the 
allocations.
    ``(f) Grants for the Training of Interpreters.--
            ``(1) Authority.--
                    ``(A) In general.--For the purpose of 
                training a sufficient number of qualified 
                interpreters to meet the communications needs 
                of individuals who are deaf or hard of hearing, 
                and individuals who are deaf-blind, the 
                Commissioner, acting through a Federal office 
                responsible for deafness and communicative 
                disorders, may award grants to public or 
                private nonprofit agencies or organizations to 
                pay part of the costs--
                            ``(i) for the establishment of 
                        interpreter training programs; or
                            ``(ii) to enable such agencies or 
                        organizations to provide financial 
                        assistance for ongoing interpreter 
                        training programs.
                    ``(B) Geographic areas.--The Commissioner 
                shall award grants under this subsection for 
                programs in geographic areas throughout the 
                United States that the Commissioner considers 
                appropriate to best carry out the objectives of 
                this section.
                    ``(C) Priority.--In awarding grants under 
                this subsection, the Commissioner shall give 
                priority to public or private nonprofit 
                agencies or organizations with existing 
                programs that have a demonstrated capacity for 
                providing interpreter training services.
                    ``(D) Funding.--The Commissioner may award 
                grants under this subsection through the use 
                of--
                            ``(i) amounts appropriated to carry 
                        out this section; or
                            ``(ii) pursuant to an agreement 
                        with the Director of the Office of the 
                        Special Education Program (established 
                        under section 603 of the Individuals 
                        with Disabilities Education Act (as 
                        amended by section 101 of the 
                        Individuals with Disabilities Education 
                        Act Amendments of 1997 (Public Law 105-
                        17))), amounts appropriated under 
                        section 686 of the Individuals with 
                        Disabilities Education Act.
            ``(2) Application.--A grant may not be awarded to 
        an agency or organization under paragraph (1) unless 
        the agency or organization has submitted an application 
        to the Commissioner at such time, in such form, in 
        accordance with such procedures, and containing such 
        information as the Commissioner may require, 
        including--
                    ``(A) a description of the manner in which 
                an interpreter training program will be 
                developed and operated during the 5-year period 
                following the date on which a grant is received 
                by the applicant under this subsection;
                    ``(B) a demonstration of the applicant's 
                capacity or potential for providing training 
                for interpreters for individuals who are deaf 
                or hard of hearing, and individuals who are 
                deaf-blind;
                    ``(C) assurances that any interpreter 
                trained or retrained under a program funded 
                under the grant will meet such minimum 
                standards of competency as the Commissioner may 
                establish for purposes of this subsection; and
                    ``(D) such other information as the 
                Commissioner may require.
    ``(g) Technical Assistance and In-Service Training.--
            ``(1) Technical assistance.--The Commissioner is 
        authorized to provide technical assistance to State 
        designated agencies and community rehabilitation 
        programs, directly or through contracts with State 
        designated agencies or nonprofit organizations.
            ``(2) Compensation.--An expert or consultant 
        appointed or serving under contract pursuant to this 
        section shall be compensated at a rate, subject to 
        approval of the Commissioner, that shall not exceed the 
        daily equivalent of the rate of pay for level 4 of the 
        Senior Executive Service Schedule under section 5382 of 
        title 5, United States Code. Such an expert or 
        consultant may be allowed travel and transportation 
        expenses in accordance with section 5703 of title 5, 
        United States Code.
            ``(3) In-service training of rehabilitation 
        personnel.--
                    ``(A) Projects.--Subject to subparagraph 
                (B), at least 15 percent of the sums 
                appropriated to carry out this section shall be 
                allocated to designated State agencies to be 
                used, directly or indirectly, for projects for 
                in-service training for rehabilitation 
                personnel, consistent with the needs identified 
                through the comprehensive system for personnel 
                development required by section 101(a)(7), 
                including projects designed--
                            ``(i) to address recruitment and 
                        retention of qualified rehabilitation 
                        professionals;
                            ``(ii) to provide for succession 
                        planning;
                            ``(iii) to provide for leadership 
                        development and capacity building; and
                            ``(iv) for fiscal years 1999 and 
                        2000, to provide training regarding the 
                        Workforce Investment Act of 1998 and 
                        the amendments to this Act made by the 
                        Rehabilitation Act Amendments of 1998.
                    ``(B) Limitation.--If the allocation to 
                designated State agencies required by 
                subparagraph (A) would result in a lower level 
                of funding for projects being carried out on 
                the date of enactment of the Rehabilitation Act 
                Amendments of 1998 by other recipients of funds 
                under this section, the Commissioner may 
                allocate less than 15 percent of the sums 
                described in subparagraph (A) to designated 
                State agencies for such in-service training.
    ``(h) Provision of Information.--The Commissioner, subject 
to the provisions of section 306, may require that recipients 
of grants or contracts under this section provide information, 
including data, with regard to the impact of activities funded 
under this section.
    ``(i) Authorization of Appropriations.--There are 
authorized to be appropriated to carry out this section such 
sums as may be necessary for each of the fiscal years 1999 
through 2003.

``SEC. 303. DEMONSTRATION AND TRAINING PROGRAMS.

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

``SEC. 304. MIGRANT AND SEASONAL FARMWORKERS.

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

``SEC. 305. RECREATIONAL PROGRAMS.

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

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

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

SEC. 407. NATIONAL COUNCIL ON DISABILITY.

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

               ``TITLE IV--NATIONAL COUNCIL ON DISABILITY


           ``establishment of national council on disability


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


                      ``duties of national council


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


               ``compensation of national council members


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


                      ``staff of national council


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


              ``administrative powers of national council


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


                   ``authorization of appropriations


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

SEC. 408. RIGHTS AND ADVOCACY.

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

``SEC. 508. ELECTRONIC AND INFORMATION TECHNOLOGY.

    ``(a) Requirements for Federal Departments and Agencies.--
            ``(1) Accessibility.--
                    ``(A) Development, procurement, 
                maintenance, or use of electronic and 
                information technology.--When developing, 
                procuring, maintaining, or using electronic and 
                information technology, each Federal department 
                or agency, including the United States Postal 
                Service, shall ensure, unless an undue burden 
                would be imposed on the department or agency, 
                that the electronic and information technology 
                allows, regardless of the type of medium of the 
                technology--
                            ``(i) individuals with disabilities 
                        who are Federal employees to have 
                        access to and use of information and 
                        data that is comparable to the access 
                        to and use of the information and data 
                        by Federal employees who are not 
                        individuals with disabilities; and
                            ``(ii) individuals with 
                        disabilities who are members of the 
                        public seeking information or services 
                        from a Federal department or agency to 
                        have access to and use of information 
                        and data that is comparable to the 
                        access to and use of the information 
                        and data by such members of the public 
                        who are not individuals with 
                        disabilities.
                    ``(B) Alternative means efforts.--When 
                development, procurement, maintenance, or use 
                of electronic and information technology that 
                meets the standards published by the Access 
                Board under paragraph (2) would impose an undue 
                burden, the Federal department or agency shall 
                provide individuals with disabilities covered 
                by paragraph (1) with the information and data 
                involved by an alternative means of access that 
                allows the individual to use the information 
                and data.
            ``(2) Electronic and information technology 
        standards.--
                    ``(A) In general.--Not later than 18 months 
                after the date of enactment of the 
                Rehabilitation Act Amendments of 1998, the 
                Architectural and Transportation Barriers 
                Compliance Board (referred to in this section 
                as the `Access Board'), after consultation with 
                the Secretary of Education, the Administrator 
                of General Services, the Secretary of Commerce, 
                the Chairman of the Federal Communications 
                Commission, the Secretary of Defense, and the 
                head of any other Federal department or agency 
                that the Access Board determines to be 
                appropriate, including consultation on relevant 
                research findings, and after consultation with 
                the electronic and information technology 
                industry and appropriate public or nonprofit 
                agencies or organizations, including 
                organizations representing individuals with 
                disabilities, shall issue and publish standards 
                setting forth--
                            ``(i) for purposes of this section, 
                        a definition of electronic and 
                        information technology that is 
                        consistent with the definition of 
                        information technology specified in 
                        section 5002(3) of the Clinger-Cohen 
                        Act of 1996 (40 U.S.C. 1401(3)); and
                            ``(ii) the technical and functional 
                        performance criteria necessary to 
                        implement the requirements set forth in 
                        paragraph (1).
                    ``(B) Review and amendment.--The Access 
                Board shall periodically review and, as 
                appropriate, amend the standards required under 
                subparagraph (A) to reflect technological 
                advances or changes in electronic and 
                information technology.
            ``(3) Incorporation of standards.--Not later than 6 
        months after the Access Board publishes the standards 
        required under paragraph (2), the Federal Acquisition 
        Regulatory Council shall revise the Federal Acquisition 
        Regulation and each Federal department or agency shall 
        revise the Federal procurement policies and directives 
        under the control of the department or agency to 
        incorporate those standards. Not later than 6 months 
        after the Access Board revises any standards required 
        under paragraph (2), the Council shall revise the 
        Federal Acquisition Regulation and each appropriate 
        Federal department or agency shall revise the 
        procurement policies and directives, as necessary, to 
        incorporate the revisions.
            ``(4) Acquisition planning.--In the event that a 
        Federal department or agency determines that compliance 
        with the standards issued by the Access Board under 
        paragraph (2) relating to procurement imposes an undue 
        burden, the documentation by the department or agency 
        supporting the procurement shall explain why compliance 
        creates an undue burden.
            ``(5) Exemption for national security systems.--
        This section shall not apply to national security 
        systems, as that term is defined in section 5142 of the 
        Clinger-Cohen Act of 1996 (40 U.S.C. 1452).
            ``(6) Construction.--
                    ``(A) Equipment.--In a case in which the 
                Federal Government provides access to the 
                public to information or data through 
                electronic and information technology, nothing 
                in this section shall be construed to require a 
                Federal department or agency--
                            ``(i) to make equipment owned by 
                        the Federal Government available for 
                        access and use by individuals with 
                        disabilities covered by paragraph (1) 
                        at a location other than that where the 
                        electronic and information technology 
                        is provided to the public; or
                            ``(ii) to purchase equipment for 
                        access and use by individuals with 
                        disabilities covered by paragraph (1) 
                        at a location other than that where the 
                        electronic and information technology 
                        is provided to the public.
                    ``(B) Software and peripheral devices.-- 
                Except as required to comply with standards 
                issued by the Access Board under paragraph (2), 
                nothing in paragraph (1) requires the 
                installation of specific accessibility-related 
                software or the attachment of a specific 
                accessibility-related peripheral device at a 
                workstation of a Federal employee who is not an 
                individual with a disability.
    ``(b) Technical Assistance.--The Administrator of General 
Services and the Access Board shall provide technical 
assistance to individuals and Federal departments and agencies 
concerning the requirements of this section.
    ``(c) Agency Evaluations.--Not later than 6 months after 
the date of enactment of the Rehabilitation Act Amendments of 
1998, the head of each Federal department or agency shall 
evaluate the extent to which the electronic and information 
technology of the department or agency is accessible to and 
usable by individuals with disabilities described in subsection 
(a)(1), compared to the access to and use of the technology by 
individuals described in such subsection who are not 
individuals with disabilities, and submit a report containing 
the evaluation to the Attorney General.
    ``(d) Reports.--
            ``(1) Interim report.--Not later than 18 months 
        after the date of enactment of the Rehabilitation Act 
        Amendments of 1998, the Attorney General shall prepare 
        and submit to the President a report containing 
        information on and recommendations regarding the extent 
        to which the electronic and information technology of 
        the Federal Government is accessible to and usable by 
        individuals with disabilities described in subsection 
        (a)(1).
            ``(2) Biennial reports.--Not later than 3 years 
        after the date of enactment of the Rehabilitation Act 
        Amendments of 1998, and every 2 years thereafter, the 
        Attorney General shall prepare and submit to the 
        President and Congress a report containing information 
        on and recommendations regarding the state of Federal 
        department and agency compliance with the requirements 
        of this section, including actions regarding individual 
        complaints under subsection (f).
    ``(e) Cooperation.--Each head of a Federal department or 
agency (including the Access Board, the Equal Employment 
Opportunity Commission, and the General Services 
Administration) shall provide to the Attorney General such 
information as the Attorney General determines is necessary to 
conduct the evaluations under subsection (c) and prepare the 
reports under subsection (d).
    ``(f) Enforcement.--
            ``(1) General.--
                    ``(A) Complaints.--Effective 2 years after 
                the date of enactment of the Rehabilitation Act 
                Amendments of 1998, any individual with a 
                disability may file a complaint alleging that a 
                Federal department or agency fails to comply 
                with subsection (a)(1) in providing electronic 
                and information technology.
                    ``(B) Application.--This subsection shall 
                apply only to electronic and information 
                technology that is procured by a Federal 
                department or agency not less than 2 years 
                after the date of enactment of the 
                Rehabilitation Act Amendments of 1998.
            ``(2) Administrative complaints.--Complaints filed 
        under paragraph (1) shall be filed with the Federal 
        department or agency alleged to be in noncompliance. 
        The Federal department or agency receiving the 
        complaint shall apply the complaint procedures 
        established to implement section 504 for resolving 
        allegations of discrimination in a federally conducted 
        program or activity.
            ``(3) Civil actions.--The remedies, procedures, and 
        rights set forth in sections 505(a)(2) and 505(b) shall 
        be the remedies, procedures, and rights available to 
        any individual with a disability filing a complaint 
        under paragraph (1).
    ``(g) Application to Other Federal Laws.--This section 
shall not be construed to limit any right, remedy, or procedure 
otherwise available under any provision of Federal law 
(including sections501 through 505) that provides greater or 
equal protection for the rights of individuals with disabilities than 
this section.''.
    (c) Protection and Advocacy of Individual Rights.--Section 
509 (29 U.S.C. 794e) is amended to read as follows:

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

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

SEC. 409. EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS WITH DISABILITIES.

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

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

``SEC. 601. SHORT TITLE.

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

                    ``Part A--Projects With Industry


                        ``projects with industry


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


                   ``authorization of appropriations


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

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

``SEC. 621. PURPOSE.

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

``SEC. 622. ALLOTMENTS.

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

``SEC. 623. AVAILABILITY OF SERVICES.

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

``SEC. 624. ELIGIBILITY.

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

``SEC. 625. STATE PLAN.

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

``SEC. 626. RESTRICTION.

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

``SEC. 627. SAVINGS PROVISION.

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

``SEC. 628. AUTHORIZATION OF APPROPRIATIONS.

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

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

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

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

         ``CHAPTER 1--INDIVIDUALS WITH SIGNIFICANT DISABILITIES

                      ``PART A--GENERAL PROVISIONS

``SEC. 701. PURPOSE.

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

``SEC. 702. DEFINITIONS.

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

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

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

``SEC. 704. STATE PLAN.

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

``SEC. 705. STATEWIDE INDEPENDENT LIVING COUNCIL.

    ``(a) Establishment.--To be eligible to receive financial 
assistance under this chapter, each State shall establish a 
Statewide Independent Living Council (referred to in this 
section as the `Council'). The Council shall not be established 
as an entity within a State agency.
    ``(b) Composition and Appointment.--
            ``(1) Appointment.--Members of the Council shall be 
        appointed by the Governor. The Governor shall select 
        members after soliciting recommendations from 
        representatives of organizations representing a broad 
        range of individuals with disabilities and 
        organizations interested in individuals with 
        disabilities.
            ``(2) Composition.--The Council shall include--
                    ``(A) at least one director of a center for 
                independent living chosen by the directors of 
                centers for independent living within the 
                State;
                    ``(B) as ex officio, nonvoting members--
                            ``(i) a representative from the 
                        designated State unit; and
                            ``(ii) representatives from other 
                        State agencies that provide services 
                        for individuals with disabilities; and
                    ``(C) in a State in which 1 or more 
                projects are carried out under section 121, at 
                least 1 representative of the directors of the 
                projects.
            ``(3) Additional members.--The Council may 
        include--
                    ``(A) other representatives from centers 
                for independent living;
                    ``(B) parents and guardians of individuals 
                with disabilities;
                    ``(C) advocates of and for individuals with 
                disabilities;
                    ``(D) representatives from private 
                businesses;
                    ``(E) representatives from organizations 
                that provide services for individuals with 
                disabilities; and
                    ``(F) other appropriate individuals.
            ``(4) Qualifications.--
                    ``(A) In general.--The Council shall be 
                composed of members--
                            ``(i) who provide statewide 
                        representation;
                            ``(ii) who represent a broad range 
                        of individuals with disabilities from 
                        diverse backgrounds;
                            ``(iii) who are knowledgeable about 
                        centers for independent living and 
                        independent living services; and
                            ``(iv) a majority of whom are 
                        persons who are--
                                    ``(I) individuals with 
                                disabilities described in 
                                section 7(20)(B); and
                                    ``(II) not employed by any 
                                State agency or center for 
                                independent living.
                    ``(B) Voting members.--A majority of the 
                voting members of the Council shall be--
                            ``(i) individuals with disabilities 
                        described in section 7(20)(B); and
                            ``(ii) not employed by any State 
                        agency or center for independent 
                        living.
            ``(5) Chairperson.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Council shall select a 
                chairperson from among the voting membership of 
                the Council.
                    ``(B) Designation by governor.--In States 
                in which the Governor does not have veto power 
                pursuant to State law, the Governor shall 
                designate a voting member of the Council to 
                serve as the chairperson of the Council or 
                shall require the Council to so designate such 
                a voting member.
            ``(6) Terms of appointment.--
                    ``(A) Length of term.--Each member of the 
                Council shall serve for a term of 3 years, 
                except that--
                            ``(i) a member appointed to fill a 
                        vacancy occurring prior to the 
                        expiration of the term for which a 
                        predecessor was appointed, shall be 
                        appointed for the remainder of such 
                        term; and
                            ``(ii) the terms of service of the 
                        members initially appointed shall be 
                        (as specified by the Governor) for such 
                        fewer number of years as will provide 
                        for the expiration of terms on a 
                        staggered basis.
                    ``(B) Number of terms.--No member of the 
                Council may serve more than two consecutive 
                full terms.
            ``(7) Vacancies.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any vacancy occurring in the 
                membership of the Council shall be filled in 
                the same manner as the original appointment. 
                The vacancy shall not affect the power of the 
                remaining members to execute the duties of the 
                Council.
                    ``(B) Delegation.--The Governor may 
                delegate the authority to fill such a vacancy 
                to the remaining voting members of the Council 
                after making the original appointment.
    ``(c) Duties.--The Council shall--
            ``(1) jointly develop and sign (in conjunction with 
        the designated State unit) the State plan required in 
        section 704;
            ``(2) monitor, review, and evaluate the 
        implementation of the State plan;
            ``(3) coordinate activities with the State 
        Rehabilitation Council established under section 105, 
        if the State has such a Council, or the commission 
        described in section 101(a)(21)(A), if the State has 
        such a commission, and councils that address the needs 
        of specific disability populations and issues under 
        other Federal law;
            ``(4) ensure that all regularly scheduled meetings 
        of the Statewide Independent Living Council are open to 
        the public and sufficient advance notice is provided; 
        and
            ``(5) submit to the Commissioner such periodic 
        reports as the Commissioner may reasonably request, and 
        keep such records, and afford such access to such 
        records, as the Commissioner finds necessary to verify 
        such reports.
    ``(d) Hearings and Forums.--The Council is authorized to 
hold such hearings and forums as the Council may determine to 
be necessary to carry out the duties of the Council.
    ``(e) Plan.--
            ``(1) In general.--The Council shall prepare, in 
        conjunction with the designated State unit, a plan for 
        the provision of such resources, including such staff 
        and personnel, as may be necessary and sufficient to 
        carry out the functions of the Council under this 
        section, with funds made available under this chapter, 
        and under section 110 (consistent with section 
        101(a)(18)), and from other public and private sources. 
        The resource plan shall, to the maximum extent 
        possible, rely on the use of resources in existence 
        during the period of implementation of the plan.
            ``(2) Supervision and evaluation.--Each Council 
        shall, consistent with State law, supervise and 
        evaluate such staff and other personnel as may be 
        necessary to carry out the functions of the Council 
        under this section.
            ``(3) Conflict of interest.--While assisting the 
        Council in carrying out its duties, staff and other 
        personnel shall not be assigned duties by the 
        designated State agency or any other agency or office 
        of the State, that would create a conflict of interest.
    ``(f) Compensation and Expenses.--The Council may use such 
resources to reimburse members of the Council for reasonable 
and necessary expenses of attending Council meetings and 
performing Council duties (including child care and personal 
assistance services), and to pay compensation to a member of 
the Council, if such member is not employed or must forfeit 
wages from other employment, for each day the member is engaged 
in performing Council duties.

``SEC. 706. RESPONSIBILITIES OF THE COMMISSIONER.

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

                 ``PART B--INDEPENDENT LIVING SERVICES

``SEC. 711. ALLOTMENTS.

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

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

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

``SEC. 713. AUTHORIZED USES OF FUNDS.

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

``SEC. 714. AUTHORIZATION OF APPROPRIATIONS.

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

                ``PART C--CENTERS FOR INDEPENDENT LIVING

``SEC. 721. PROGRAM AUTHORIZATION.

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

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

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

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

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

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

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

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

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

``SEC. 726. DEFINITIONS.

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

``SEC. 727. AUTHORIZATION OF APPROPRIATIONS.

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

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

``SEC. 751. DEFINITION.

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

``SEC. 752. PROGRAM OF GRANTS.

    ``(a) In General.--
            ``(1) Authority for grants.--Subject to subsections 
        (b) and (c), the Commissioner may make grants to States 
        for the purpose of providing the services described in 
        subsection (d) to older individuals who are blind.
            ``(2) Designated state agency.--The Commissioner 
        may not make a grant under subsection (a) unless the 
        State involved agrees that the grant will be 
        administered solely by the agency described in section 
        101(a)(2)(A)(i).
    ``(b) Contingent Competitive Grants.--Beginning with fiscal 
year 1993, in the case of any fiscal year for which the amount 
appropriated under section 753 is less than $13,000,000, grants 
made under subsection (a) shall be--
            ``(1) discretionary grants made on a competitive 
        basis to States; or
            ``(2) grants made on a noncompetitive basis to pay 
        for the continuation costs of activities for which a 
        grant was awarded--
                    ``(A) under this chapter; or
                    ``(B) under part C, as in effect on the day 
                before the date of enactment of the 
                Rehabilitation Act Amendments of 1992.
    ``(c) Contingent Formula Grants.--
            ``(1) In general.--In the case of any fiscal year 
        for which the amount appropriated under section 753 is 
        equal to or greater than $13,000,000, grants under 
        subsection (a) shall be made only to States and shall 
        be made only from allotments under paragraph (2).
            ``(2) Allotments.--For grants under subsection (a) 
        for a fiscal year described in paragraph (1), the 
        Commissioner shall make an allotment to each State in 
        an amount determined in accordance with subsection (j), 
        and shall make a grant to the State of the allotment 
        made for the State if the State submits to the 
        Commissioner an application in accordance with 
        subsection (i).
    ``(d) Services Generally.--The Commissioner may not make a 
grant under subsection (a) unless the State involved agrees 
that the grant will be expended only for purposes of--
            ``(1) providing independent living services to 
        older individuals who are blind;
            ``(2) conducting activities that will improve or 
        expand services for such individuals; and
            ``(3) conducting activities to help improve public 
        understanding of the problems of such individuals.
    ``(e) Independent Living Services.--Independent living 
services for purposes of subsection (d)(1) include--
            ``(1) services to help correct blindness, such as--
                    ``(A) outreach services;
                    ``(B) visual screening;
                    ``(C) surgical or therapeutic treatment to 
                prevent, correct, or modify disabling eye 
                conditions; and
                    ``(D) hospitalization related to such 
                services;
            ``(2) the provision of eyeglasses and other visual 
        aids;
            ``(3) the provision of services and equipment to 
        assist an older individual who is blind to become more 
        mobile and more self-sufficient;
            ``(4) mobility training, braille instruction, and 
        other services and equipment to help an older 
        individual who is blind adjust to blindness;
            ``(5) guide services, reader services, and 
        transportation;
            ``(6) any other appropriate service designed to 
        assist an older individual who is blind in coping with 
        daily living activities, including supportive services 
        and rehabilitation teaching services;
            ``(7) independent living skills training, 
        information and referral services, peer counseling, and 
        individual advocacy training; and
            ``(8) other independent living services.
    ``(f) Matching Funds.--
            ``(1) In general.--The Commissioner may not make a 
        grant under subsection (a) unless the State involved 
        agrees, with respect to the costs of the program to be 
        carried out by the State pursuant to such subsection, 
        to make available (directly or through donations from 
        public or private entities) non-Federal contributions 
        toward such costs in an amount that is not less than $1 
        for each $9 of Federal funds provided in the grant.
            ``(2) Determination of amount contributed.--Non-
        Federal contributions required in paragraph (1) may be 
        in cash or in kind, fairly evaluated, including plant, 
        equipment, or services. Amounts provided by the Federal 
        Government, or services assisted or subsidized to any 
        significant extent by the Federal Government, may not 
        be included in determining the amount of such non-
        Federal contributions.
    ``(g) Certain Expenditures of Grants.--A State may expend a 
grant under subsection (a) to carry out the purposes specified 
in subsection (d) through grants to public and nonprofit 
private agencies or organizations.
    ``(h) Requirement Regarding State Plan.--The Commissioner 
may not make a grant under subsection (a) unless the State 
involved agrees that, in carrying out subsection (d)(1), the 
State will seek to incorporate into the State plan under 
section 704 any new methods and approaches relating to 
independent living services for older individuals who are 
blind.
    ``(i) Application for Grant.--
            ``(1) In general.--The Commissioner may not make a 
        grant under subsection (a) unless an application for 
        the grant is submitted to the Commissioner and the 
        application is in such form, is made in such manner, 
        and contains such agreements, assurances, and 
        information as the Commissioner determines to be 
        necessary to carry out this section (including 
        agreements, assurances, and information with respect to 
        any grants under subsection (j)(4)).
            ``(2) Contents.--An application for a grant under 
        this section shall contain--
                    ``(A) an assurance that the agency 
                described in subsection (a)(2) will prepare and 
                submit to the Commissioner a report, at the end 
                of each fiscal year, with respect to each 
                project or program the agency operates or 
                administers under this section, whether 
                directly or through a grant or contract, which 
                report shall contain, at a minimum, information 
                on--
                            ``(i) the number and types of older 
                        individuals who are blind and are 
                        receiving services;
                            ``(ii) the types of services 
                        provided and the number of older 
                        individuals who are blind and are 
                        receiving each type of service;
                            ``(iii) the sources and amounts of 
                        funding for the operation of each 
                        project or program;
                            ``(iv) the amounts and percentages 
                        of resources committed to each type of 
                        service provided;
                            ``(v) data on actions taken to 
                        employ, and advance in employment, 
                        qualified individuals with significant 
                        disabilities, including older 
                        individuals who are blind; and
                            ``(vi) a comparison, if 
                        appropriate, of prior year activities 
                        with the activities of the most recent 
                        year;
                    ``(B) an assurance that the agency will--
                            ``(i) provide services that 
                        contribute to the maintenance of, or 
                        the increased independence of, older 
                        individuals who are blind; and
                            ``(ii) engage in--
                                    ``(I) capacity-building 
                                activities, including 
                                collaboration with other 
                                agencies and organizations;
                                    ``(II) activities to 
                                promote community awareness, 
                                involvement, and assistance; 
                                and
                                    ``(III) outreach efforts; 
                                and
                    ``(C) an assurance that the application is 
                consistent with the State plan for providing 
                independent living services required by section 
                704.
    ``(j) Amount of Formula Grant.--
            ``(1) In general.--Subject to the availability of 
        appropriations, the amount of an allotment under 
        subsection (a) for a State for a fiscal year shall be 
        the greater of--
                    ``(A) the amount determined under paragraph 
                (2); or
                    ``(B) the amount determined under paragraph 
                (3).
            ``(2) Minimum allotment.--
                    ``(A) States.--In the case of the several 
                States, the District of Columbia, and the 
                Commonwealth of Puerto Rico, the amount 
                referred to in subparagraph (A) of paragraph 
                (1) for a fiscal year is the greater of--
                            ``(i) $225,000; or
                            ``(ii) an amount equal to one-third 
                        of one percent of the amount 
                        appropriated under section 753 for the 
                        fiscal year and available for 
                        allotments under subsection (a).
                    ``(B) Certain territories.--In the case of 
                Guam, American Samoa, the United States Virgin 
                Islands, and the Commonwealth of the Northern 
                Mariana Islands, the amount referred to in 
                subparagraph (A) of paragraph (1) for a fiscal 
                year is $40,000.
            ``(3) Formula.--The amount referred to in 
        subparagraph (B) of paragraph (1) for a State for a 
        fiscal year is the product of--
                    ``(A) the amount appropriated under section 
                753 and available for allotments under 
                subsection (a); and
                    ``(B) a percentage equal to the quotient 
                of--
                            ``(i) an amount equal to the number 
                        of individuals residing in the State 
                        who are not less than 55 years of age; 
                        divided by
                            ``(ii) an amount equal to the 
                        number of individuals residing in the 
                        United States who are not less than 55 
                        years of age.
            ``(4) Disposition of certain amounts.--
                    ``(A) Grants.--From the amounts specified 
                in subparagraph (B), the Commissioner may make 
                grants to States whose population of older 
                individuals who are blind has a substantial 
                need for the services specified in subsection 
                (d) relative to the populations in other States 
                of older individuals who are blind.
                    ``(B) Amounts.--The amounts referred to in 
                subparagraph (A) are any amounts that are not 
                paid to States under subsection (a) as a result 
                of--
                            ``(i) the failure of any State to 
                        submit an application under subsection 
                        (i);
                            ``(ii) the failure of any State to 
                        prepare within a reasonable period of 
                        time such application in compliance 
                        with such subsection; or
                            ``(iii) any State informing the 
                        Commissioner that the State does not 
                        intend to expend the full amount of the 
                        allotment made for the State under 
                        subsection (a).
                    ``(C) Conditions.--The Commissioner may not 
                make a grant under subparagraph (A) unless the 
                State involved agrees that the grant is subject 
                to the same conditions as grants made under 
                subsection (a).

``SEC. 753. AUTHORIZATION OF APPROPRIATIONS.

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

SEC. 411. REPEAL.

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

SEC. 412. HELEN KELLER NATIONAL CENTER ACT.

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

``SEC. 209. REGISTRY.

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

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

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

SEC. 414. CONFORMING AMENDMENTS.

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

                      TITLE V--GENERAL PROVISIONS

SEC. 501. STATE UNIFIED PLAN.

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

SEC. 502. DEFINITIONS FOR INDICATORS OF PERFORMANCE.

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

SEC. 503. INCENTIVE GRANTS.

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

SEC. 504. PRIVACY.

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

SEC. 505. BUY-AMERICAN REQUIREMENTS.

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

SEC. 506. TRANSITION PROVISIONS.

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

SEC. 507. EFFECTIVE DATE.

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

                                   Bill Goodling.
                                   Howard ``Buck'' McKeon.
                                   Frank Riggs.
                                   Lindsey Graham.
                                   Bob Schaffer.
                                   W.L. Clay.
                                   M.G. Martinez.
                                   Dale Kildee.
                                 Managers on the Part of the House.

                                   Jim Jeffords.
                                   Dan Coats.
                                   Judd Gregg.
                                   Bill Frist.
                                   Mike DeWine.
                                   Michael B. Enzi.
                                   Tim Hutchinson.
                                   Susan Collins.
                                   John Warner.
                                   Mitch McConnell.
                                   Edward M. Kennedy.
                                   Chris Dodd.
                                   Paul Wellstone.
                                   Jack Reed.
                                Managers on the Part of the Senate.
       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and the Senate at 
the conference on the disagreeing votes of the two Houses on 
the amendment of the Senate to the bill (H.R. 1385) to 
consolidate, coordinate, and improve employment, training, 
literacy, and vocational rehabilitation programs in the United 
States, and for other purposes, submit the following joint 
statement to the House and the Senate in explanation of the 
effect of the action agreed upon by the managers and 
recommended in the accompanying conference report:

                 TITLE I--WORKFORCE INVESTMENT SYSTEMS

                    Workforce Investment Definitions

      The House bill provides definitions of the following 
terms: `adult education and literacy activities'; `basic skills 
deficient'; `case management'; `chief elected official'; 
`citizenship skills'; `community based organization'; 
`dislocated worker'; `displaced homemaker'; `economic 
development agencies'; `employment, training, and literacy 
programs'; `English literacy program'; `family'; `family 
literacy services'; `full service eligible provider'; 
`Governor'; `human resource programs'; `individual of limited 
English proficiency'; `individual with a disability'; 
`institution of higher education'; `labor market area'; 
`literacy'; `local benchmarks'; `local board'; `local 
educational agency'; `local workforce development area'; `lower 
living standard income level'; `nontraditional employment'; 
`offender'; `on-the-job training'; `outlying area'; 
`participant'; `postsecondary institution'; `public 
assistance'; `rapid response assistance'; `representatives of 
employees'; `school dropout'; `Secretaries'; `skill grant'; 
`appropriate Secretary'; `State'; `State adjusted benchmarks'; 
`State benchmark'; `State educational agency'; `statewide 
system'; `supportive services'; `termination'; `unemployed 
individuals'; `unit of general local government'; `veteran'; 
`vocational education'; and `youth corps program'.
      The Senate amendment provides definitions of the 
following terms: `adult'; `adult education'; `area vocational 
education school'; `chief elected official'; `disadvantaged 
adult'; `dislocated worker'; `displaced homemaker'; `economic 
development agencies'; `educational service agency'; 
`elementary school'; `local educational agency'; `eligible 
agency'; `eligible institution'; `eligible provider'; 
`employment and training activity'; `English literacy program'; 
`Governor'; `individual of limited English proficiency'; 
`individual with a disability'; `institution of higher 
education'; `literacy'; `local area'; `local partnership'; 
`local performance measure'; `low-income individual'; `lower 
living standard income level'; `nontraditional employment'; 
`on-the-job-training'; `out-of-school youth'; `outlying area'; 
`participant'; `postsecondary educational institution'; 
`poverty line'; `public assistance'; `rapid response activity'; 
`school dropout'; `secondary school'; `Secretary'; `State'; 
`State educational agency'; `State performance measure'; 
`statewide partnership'; `supportive services'; `tribally 
controlled community college'; `unit of general local 
government'; `veteran'; `vocational education'; `vocational 
rehabilitation program'; `vocational student organization'; 
`welfare recipient'; `workforce investment activity'; `youth'; 
`youth activity'; and `youth partnership'.
      In the Conference agreement, the House recedes on the 
definition of `adult' with an amendment to change the age from 
22 to 18; the Senate recedes on the definition of `adult 
education'; the Senate recedes on the definition of `area 
vocational education schools'; the Senate recedes on the 
definition of `basic skills deficient' with an amendment to add 
writing to the definition; the Senate recedes on the definition 
of `case management'; the House recedes on the definition of 
`chief elected official'; the House recedes on the definition 
of `citizenship skills'; the Senate recedes on the definition 
of `community-based organization' with an amendment to clarify 
that the community-based organization has demonstrated 
effectiveness in the field of workforce development; the House 
and Senate add a definition of `customized training'; the House 
recedes on the definition of `disadvantaged adult'; the House 
recedes on the definition of `dislocated worker'; the House recedes on 
the definition of `displaced homemaker'; the Senate recedes on the 
definition of `economic development agencies'; the House recedes on the 
definition of `educational service agency'; the Senate recedes on the 
definition of `elementary school'; the House recedes on the definition 
of `eligible agency'; the Senate recedes on part A, and the House 
recedes on part B of the definition of `eligible provider'; the House 
and Senate have the same definition of `employment and training 
activity'; the House recedes on the definition of `English literacy 
program'; the Senate recedes on the definition of `family'; the Senate 
recedes on the definition of `family literacy Services'; the House 
recedes on the definition of `full service eligible providers'; the 
Senate recedes on the definition of `Governor'; the House recedes on 
the definition of `human resource programs'; the House recedes on the 
definition of `individual of limited English proficiency'; the House 
recedes on the definition of `individual with a disability'; the House 
and Senate have the same definition of `institution of higher 
education'; the Senate recedes on the definition of `labor market 
area'; the House recedes on the definition of `literacy'; the House 
recedes on the definition of `local area'; the Senate recedes on the 
definition of `local board' with an amendment to change the term to 
`local workforce investment board'; the House recedes on the definition 
of `local benchmarks' with an amendment to change the term to `local 
performance measures'; the Senate recedes on the definition of `local 
educational agency'; the Senate recedes on the definition of `local 
partnership'; the House recedes on the definition of `low-income 
individual'; the House recedes on the definition of `lower living 
standard income level'; the House and Senate agree to use the current 
law definition of an older individual to define `older worker'; the 
House recedes on the definition of `nontraditional employment' with an 
amendment to strike `in titles I and III' from the definition; the 
Senate recedes on the definition of `offender'; the Senate recedes on 
the definition of `on-the-job training'; the House recedes on the 
definition of `out-of-schoolyouth' with an amendment to remove literacy 
from the list; the House recedes on the definition of `outlying area'; 
the Senate recedes on the definition of `participant'; the House 
recedes on the definition of `postsecondary educational institutions'; 
the House recedes on the definition of `poverty line'; the Senate 
recedes on the definition of `public assistance'; the House recedes on 
the definition of `rapid response activity'; the House recedes on the 
definition of `representatives of employees'; the House recedes on the 
definition of `school dropout'; the Senate recedes on the definition of 
`Secretary' with an amendment to not include the Secretary of 
Education; the House recedes on the definition of `secondary school' 
with an amendment; the House recedes on the definition of `skill 
grant'; the Senate recedes on the definition of `State'; the House 
recedes on the definition of `State adjusted benchmarks'; the House 
recedes on the definition of `State benchmark'; the Senate recedes on 
the definition of `State educational agency'; the House recedes on the 
definition of `State performance measure'; the House recedes on the 
definition of `Statewide partnership' with an amendment to change the 
term to `State board'; the House recedes on the definition of 
`Statewide system'; the Senate recedes on the definition of `supportive 
services' with an amendment to add housing; the Senate recedes on the 
definition of `termination'; the House recedes on the definition of 
`tribally controlled community college'; the Senate recedes on the 
definition of `unemployed individuals'; the House recedes on the 
definition of `unit of general local government'; the House recedes on 
the definition of `veteran'; the House and Senate recede to strike the 
definition of `vocational education'; the House recedes on the 
definition of `vocational rehabilitation program'; the Senate recedes 
on the definition of `vocational student organization'; the Senate 
recedes on the definition of `welfare recipient'; the House recedes on 
the definition of `workforce investment activity'; the House recedes on 
the definition of `youth' with an amendment to change the term to 
`eligible youth'; the House recedes on the definition of `youth 
activity'; the House recedes on the definition of `youth corps 
program'; the House recedes with an amendment to the definition of 
`youth partnership' to change the term to `youth council'.

                            State Provisions

State workforce investment boards
      The House bill requires States to establish a 
collaborative process consisting of the Governor, 
representatives of the State legislature, and representatives 
appointed by the Governor, with: business; local elected 
officials; local education agencies; postsecondary 
institutions; organizations representing participants 
(including community-based organizations); service providers; 
parents; employers; State Education Agency; State agencies 
responsible for vocational rehabilitation; welfare; vocational, 
adult and postsecondary education; such other agency officials 
as the Governor may designate (including economic development); 
and the Veterans' Employment and Training Service, to develop a 
single State plan for the three block grants, for programs 
authorized under the Wagner-Peyser Act, and a performance 
measurement system for the three block grants. The 
collaborative process would also be used to carry out other 
duties including designation of local workforce development 
areas, development of criteria for appointment of local 
workforce development boards, and development of criteria for 
the Statewide full-service employment and training delivery 
system.
      The Senate amendment establishes a Statewide partnership 
with composition similar to the House provision except: (1) it 
adds individuals with experience relating to youth activities; 
it expands the illustrative list of additional State agencies 
to include the Employment Service and others; refers to 
representatives of ``labor organizations'' rather than 
``employees'', and (2) it does not include representatives of 
local educational agencies, postsecondary institutions, 
organizations representing participants, service providers, 
parents, or the State agency responsible for welfare or 
veterans. In addition, the Senate requires that the chair of 
the partnership be a representative of business.
      The Conference agreement establishes a State Workforce 
Investment Board composed of the Governor; members of the State 
legislature; a majority of representatives of business; chief 
elected officials; representatives of individuals with 
experience relating to youth activities; representatives of 
labor organizations (who have been nominated by State labor 
federations); representatives of individuals with experience 
and expertise in the delivery of workforce investment 
activities (including chief executive officers of community 
colleges and community-based organizations); and officials of 
the lead State agency with responsibility for programs, 
services, and activities carried out by one-stop partners. The 
Conference agreement adds a conflict of interest provision 
which prohibits members of the State board from voting on 
matters regarding the provision of services by such member, 
matters that would provide direct financial benefit to such 
member or their immediate family, and other activities 
considered in conflict of interest by the Governor. 
Additionally, the Conference agreement contains a sunshine 
provision that requires information regarding activities of the 
State board, the plan prior to submission, its membership, and 
minutes of its formal meetings, to be made available to the 
public.
State plan
      The House bill requires States to submit a 3-year plan 
that describes the statewide system as well as activities under 
the Wagner-Peyser Act and the Adult Education Act. The State 
plan must include long-term goals for the workforce development 
system and benchmarks for achieving those goals and ensuring 
continuous improvement.
      With respect to approval of the State plan, the House 
bill provides that the State plan be approved unless the 
appropriate Secretary makes a written determination within 90 
days of receipt that the plan is inconsistent with a specific 
provision of the Act.
      The Senate amendment contains provisions similar to the 
House bill, except that the plan does not include Adult 
Education or reference to long-term goals. The Senate amendment 
includes similar plan controls regarding the identification and 
description of the State workforce system, descriptions and 
assurances on criteria for appointments, processes for public 
comment, and data and reporting.
      With respect to approval of the State plan, the Senate 
amendment provides that the State plan be approved unless the 
appropriate Secretary makes a written determination within 60 
days of receipt that the plan is: (1) inconsistent with the 
provisions of the title; (2) in the case of the Wagner-Peyser 
portion of the plan, does not meet the plan approval standard 
under that Act; or (3) the State and the Secretary have not 
reached agreement on the expected levels of performance.
      The Conference agreement requires States to submit a plan 
that outlines a 5-year strategy for the statewide workforce 
investment system, including activities under Wagner-Peyser. 
The contents of the State plan follow the House and Senate 
provisions, specifically with respect to a description of the 
State board, performance accountability, state workforce and 
economic development information, and identification of local 
areas. Additionally, States are given the authority to require 
regional planning by workforce development areas in a single 
labor market area, economic development region or other 
appropriate contiguous sub-area of the state.
      With respect to approval of the State plan, the 
Conference agreement generally follows the Senate amendment 
except to provide that State plans are considered approved 
unless the Secretary makes a written determination within 90 
days of receipt of the State plan that the plan is inconsistent 
with the provisions of the title.

                            Local Provisions

Local workforce investment areas
      The House bill requires that States desiring to receive a 
grant under this Act, designate local geographic areas, called 
workforce development areas, for the purpose of distributing 
funds. The House bill allows Governors to determine where 
geographic lines are drawn to form local workforce areas and 
guarantees automatic designation of single local units of 
government with populations of 500,000 or more who apply for 
designation.
      The Senate amendment follows the House bill, with the 
exceptions that units of government with populations of 500,000 
or more may request designation only with the agreement of the 
political subdivisions within the county with populations of 
200,000 or more. Additionally, single units of general local 
government with populations of 200,000 or more that were 
previously Service Delivery Areas under the Job Training 
Partnership Act (JTPA) are given an automatic right to request 
designation as local areas. Such areas may appeal a denial of 
designation to the Secretary, who may grant the designation if 
the local area has demonstrated effectiveness and meets certain 
other criteria.
      The Conference agreement requires States to designate 
local workforce areas through the process described in the 
State plan, and after consultation which chief elected 
officials. In making such designations, the Governor must take 
into consideration several factors such as labor market areas. 
The Conference agreement also requires the Governor to approve 
a request for designation from any single unit of general local 
government with a population of 500,000 or more. Additionally, 
Governors are required to approve a request for temporary 
designation, as a local area, from any unit, or combination of 
units, of local governments with a population of 200,000 or 
more that was a service delivery area under JTPA and performed 
successfully and has sustained fiscal integrity. Such temporary 
designation is limited to 2 years, after which the designation 
is to be extended until the end of the duration of the State plan if, 
for the period of the temporary designation, the Governor determines 
the area substantially met (as defined by the State board) the local 
performance measures for the area and sustained the fiscal integrity of 
the program. A process for appeal to the Secretary of Labor is 
outlined. Additionally, the Governor may approve any request from any 
unit, or combination of units, of local government, based upon a 
recommendation of the State board.
Local workforce investment boards
      The House bill establishes local workforce development 
boards which are comprised of a majority of representatives of 
business; representatives of local educational entities; 
representatives of community-based organizations, 
representatives of employees (which may include labor); and 
other representatives of the public (which may include program 
participants, parents, individuals with disabilities, older 
workers, veterans, or organizations serving such individuals). 
Boards may also include representatives of local welfare 
agencies, economic development agencies, and the local 
employment services system.
      With respect to functions of local workforce investment 
boards, the House bill includes development of the local plan, 
selection of one-stop providers, identification of training 
providers, budgeting, program oversight, designation of 
administrative entity, and negotiation of local benchmarks. 
Additionally, local boards are authorized to act as the fiscal 
agent to receive and disburse funds, or may designate an 
alternate administrative entity to serve as the fiscal agent.
      The Senate amendment establishes local workforce 
investment partnerships which are comprised of a majority of 
representatives of business; chief officers of postsecondary, 
adult and vocational education; chief officers of labor 
organizations; and chief officers of economic development 
agencies. Boards may also include chief officers from one-stop 
partners and other individuals or entities.
      With respect to functions of local workforce investment 
boards, the Senate amendment adds to the House provisions: (1) 
promotion of the participation of private sector employment and 
the use of intermediaries to assist employers in meeting hiring 
needs; (2) coordination of the workforce investment activities 
with economic development strategies; and (3) assistance in the 
development of the labor market information system as functions 
of the local partnership. The Senate amendment does not include 
the designation of an administrative entity as a function of 
the local workforce investment board. Additionally, although 
the chief local elected official is the fiscal agent for funds 
allocated to the local area, the fiscal agent is required to 
disburse funds for workforce investment activities at the 
direction of the local partnerships.
      In addition, the Senate amendment establishes a youth 
partnership in each local area to work, with the approval of 
the local partnership, on planning, awarding and oversight of 
grants for the youth programs. The youth partnerships are 
required to include parents as well as representatives of the 
local partnership, youth service agencies, public housing 
authorities, youth organizations, business, and Job Corps.
      The Conference agreement establishes local workforce 
investment boards whose members are appointed by the chief 
elected officials and which are comprised of a majority of 
representatives of business; representatives of local 
educational entities; representatives of labor organizations; 
representatives of community-based organizations; 
representatives of economic development agencies; and 
representatives of each of the one-stop partners. Boards may 
also include others as determined by the local elected 
official. The Conference agreement includes language to require 
the actions of the Board to be available to the public and 
includes conflict of interest language for members of the 
Board.
      In the Conference agreement, Governors may require 
regional planning, sharing of employment statistics, 
arrangements of the delivery of service, and performance 
measurements across labor market areas, regardless of workforce 
investment area designation, in order to ensure maximum 
efficiency in the delivery of employment and training services.
      With respect to functions of local workforce investment 
boards, the Conference agreement generally follows the House 
and Senate provisions to include: development of the local 
plan; designation, certification and oversight of one-stop 
operators; the provision of grants for youth activities; 
identification of eligible providers of intensive and training 
services; development and entry into memorandums of 
understanding with one-stop partners; development of a budget; 
negotiation of local performance measures; program oversight 
and assistance in development of a statewide employment 
statistics system; and coordination of employer linkages with 
workforce investment activities and promotion of the 
participation of private employers with the statewide workforce 
investment system.
      With respect to youth partnerships, the Conference 
agreement establishes a ``youth council'' similar to the youth 
partnership established by the Senate amendment. The youth 
council would operate as a subgroup within each local workforce 
investment board and would be responsible for the selection and 
oversight of local youth programs.
Local plan
      The House bill requires the local workforce development 
board and the local elected official to develop a 3-year local 
strategic plan to be submitted to the Governor for approval, 
describing the employment and job skills needs of the local 
area, the employment and training activities to be funded, 
local performance measures, and the local full service 
employment and training delivery system. The House bill also 
includes specific provisions relating to involving others in 
development of disadvantaged youth programs.
      The Senate amendment requires the local workforce 
investment partnership, in partnership with the local elected 
official, to develop a local plan similar to that in the House 
bill, to be submitted to the Governor for approval.
      The Conference agreement follows the House and Senate 
provisions with the exception to allow for development of a 5-
year local plan. The submitted local plan is required to 
include an identification of the workforce investment and job 
skill needs of the local area; a description of the one-stop 
delivery system; the local levels of performance; the type and 
availability of adult and dislocated worker employment and 
training activities; a description of how the local board will 
coordinate statewide rapid response activities; a description 
of available local youth activities; a description of the 
process for providing for public comment; identification of the 
local fiscal agent; and other such information required by the 
Governor.

               Workforce Investment Activities Providers

Establishment of one-stop delivery systems
      The House bill requires local workforce development areas 
to establish a full service employment and training delivery 
system to provide both individuals and employers access to services 
through a network of eligible providers. Services are available to 
participants regardless of where they initially enter the full-service 
system. The design of the full service system is determined by States 
and local communities, and requires that there be at least one physical 
location in each local workforce development area where participants 
can receive all of the core services, and through which they may access 
more intensive employment and training services. Any entity located in 
a local area may be designated by the local board to provide services. 
Such entities may include institutions of higher education; local 
employment services offices established under the Wagner-Peyser Act; 
private, nonprofit organizations (including community-based 
organizations); private for-profit entities; agencies of local 
government; and other organizations of demonstrated effectiveness 
(which may include local chambers of commerce).
      The Senate amendment requires States to establish at 
least one one-stop customer service center in each local area 
where the activities of the local participating entities must 
be accessible to all individuals seeking assistance. One-stop 
partners are designated by the local partnership and local 
chief elected official. Each one-stop partner must enter into 
an operating agreement with the local partnership and the one-
stop operator. One-stop operators are selected by the local 
partnership and the chief elected official and may be public or 
private entities. One-stop centers administer the individual 
training accounts and provide core services. Entities eligible 
to be designated as providers of services are similar to those 
in the House bill except that nontraditional public secondary 
schools and area vocational education schools are eligible for 
designation.
      The Conference agreement requires there be established a 
one-stop delivery system in each local workforce investment 
area. Such local systems shall provide core services, and 
access to intensive services, training and related services. 
Programs carried out by one-stop partners are required to make 
available to participants, through such system, the core 
services applicable to such programs administered by the one-
stop partner or additional partners. The local board, chief 
elected official, and Governor are encouraged to retain 
existing one-stop delivery systems where such systems have been 
established and are effectively and efficiently meeting the 
workforce investment needs of the local area, and are 
performing to the satisfaction of the local board, chief 
elected official and the Governor. Additionally, the Conference 
agreement prohibits the designation or certification of 
elementary and secondary schools as one-stop operators.
Identification of eligible providers of training services
      The House bill requires eligible providers of adult or 
dislocated worker services to submit specified performance-
based information relating to outcomes of their participants, 
such as completion rates, and placement. Any eligible provider 
may lose eligibility if they fail to meet performance criteria 
established by the Governor. Additionally providers of on-the-
job training and apprenticeship programs registered with the 
National Apprenticeship Act are exempt from certain 
requirements.
      The Senate amendment is similar to the House bill, but 
does not include an exemption for registered apprenticeship 
programs from certain requirements.
      In the Conference agreement local boards would be 
authorized to identify providers of training services at the 
local level based upon minimum criteria established by the 
Governor. To be eligible, providers submit an application to 
the local workforce investment board which includes performance 
and cost information. The local workforce investment board 
submits the list of such providers to the State, which may 
remove a provider in the event such provider fails to meet 
minimum levels of performance. Otherwise, such provider is 
considered an eligible provider. A participant with an 
Individual Training Account (ITA) may attend any provider on 
the State list. A program operated under title IV, and 
apprenticeship programs (registered with the National 
Apprenticeship Act), are automatically eligible for the first 
year, and may remain on such State list unless they fail to 
meet the specified performance levels.
Identification of eligible providers of youth activities
      The House bill authorizes the local workforce investment 
board to identify eligible providers of youth activities. Adult 
mentoring is required as an element of youth programs.
      The Senate amendment authorizes the youth partnership to 
identify providers of youth activities.
      The Conference agreement authorizes the local youth 
council, working through the local workforce investment board, 
to competitively award grants or contract to eligible youth 
providers.

                            Youth Activities

Authorization/State allotments
      The House bill reserves .25 percent for outlying areas. 
The remaining 99.75 percent is allotted to States under a 
formula based on \1/3\ unemployment individuals in areas of 
substantial unemployment (greater than 6.5 percent), \1/3\ 
excess number of unemployed individuals (greater than 4.5 
percent), and \1/3\ disadvantaged youth. No State is allowed to 
receive less than 90 percent or more than 130 percent of the 
amount they received in the preceding fiscal year. A minimum 
allotment of .25 percent applies for small states.
      The Senate amendment contains a trigger when 
appropriations exceed $1 billion. If the funding level is less 
than $1 billion, the first .25 percent is reserved for outlying 
areas. Of the remaining 99.75 percent, the first $15 million is 
reserved for Native American youth activities. The remaining 
funds are then allotted to States under a formula based on \1/
3\ unemployed individuals in areas of substantial unemployment, 
\1/3\ excess number of unemployed individuals, and \1/3\ 
economically disadvantaged youth. If the funding level is in 
excess of $1 billion, before any amounts are reserved or 
allotted to States, up to $250 million is assigned for Youth 
Opportunity grants, $10 million for migrant youth activities, 
and $10 million for youth academies. The remainder is then 
allotted per the above specifications. No State is allowed to 
receive less than 90 percent or more than 130 percent of the 
amount they received in the preceding fiscal year. A minimum 
allotment of .40 percent applies for small states.
      The Conference agreement generally follows the Senate 
amendment with the exception that, from funding dedicated for 
Youth Opportunity grants ($250 million in grants for high-
poverty areas when State block grant funding exceeds $1 
billion), 4 percent is guaranteed for migrant youth programs. 
Additionally, the Conference agreement holds all States 
harmless at 100 percent of their FY 1998 funding allotments. A 
small State minimum of .3 percent would apply, as long as 
States receive their FY 1998 allotted levels. For new funds in 
excess of the FY 1998 funding levels, a .4 percent small State 
minimum would apply. However, ``small States'' are limited to 
those defined as ``small States'' under JTPA.
Within State allocations
      The House bill reserves 25 percent of youth funds at the 
State level, 15 percent of which is for State youth activities 
with the remaining 10 percent to be used to make matching 
grants for school dropouts. The remaining 75 percent of State 
grant funds would be driven to the local level. Of that amount 
70 percent, or more, would be disbursed based on a formula of 
\1/3\ unemployed, \1/3\ excess unemployed, and \1/3\ 
economically disadvantaged adults. The remaining 30 percent, or 
less, would be disbursed by a method determined through the 
State collaborative process.
      The Senate amendment sends 85 percent of youth State 
grant funds to the local level in one of two ways as determined 
by the State. Either all 85 percent of the funds are driven to 
the local level through a formula based on \1/3\ unemployed 
individuals in areas of substantial unemployment, \1/3\ excess 
number of unemployed individuals, \1/3\ disadvantaged adults 
(min. 90%); or States can choose to send 70 percent or more of 
those funds through the above formula with up to the remaining 
30 percent being disbursed through a formula incorporating 
other factors relating to excess poverty and employment. This 
optional formula would be developed through the Statewide 
partnership and approved by the Secretary. The remaining 15 
percent is reserved for Statewide activities. States may 
reserve not more than 15 percent from each of the three funding 
streams for statewide activities, with no more than 5 percent 
of that amount being used for administration. Funds from all 
three funding streams reserved for statewide activities and 
administration would be pooled at the state level, with 
statewide activities benefiting adults, dislocated workers, and 
youth.
      The Conference agreement generally follows the Senate 
amendment except that consideration of rural, urban and 
suburban areas are included in the factors relating to excess 
poverty and employment used in the alternative formula.
Use of funds
      The House bill requires programs providing youth 
activities to include summer employment linked directly to 
academic and occupational learning; postsecondary educational 
or training opportunities; an objective assessment of the 
academic and skill levels and service needs of each 
participant; service strategies that identify the employment 
goal; adult mentoring; the integration of academic, 
occupational and work-based learning opportunities; 
comprehensive guidance and counseling; and the involvement of 
employers and parents in the design and implementation of such 
programs.
      The Senate amendment requires youth activities to include 
a summer jobs program; tutoring and instruction leading to the 
completion of secondary school; dropout prevention; and 
alternative secondary school for out-of-school youth in 
addition to employment skills training.
      The Conference agreement program requirements for youth 
activities follow the House bill and Senate amendment. Program 
elements shall consist of tutoring, study skills training, and 
instruction leading to completion of secondary school 
(including dropout prevention strategies) alternative secondary 
school services; summer employment opportunities directly 
linked to academic and occupational learning; paid and unpaid 
work experiences as appropriate (including internships and job 
shadowing); occupational skill training; leadership development 
opportunities; supportive services; adult mentoring; follow-up 
services; and comprehensive guidance and counseling (which may 
include drug and alcohol abuse counseling and referral). 
Additionally, at least 30 percent of youth funds must be used 
to provide services to out-of-school youth.
Youth opportunity grants
      The House bill authorizes, as a demonstration activity, 
projects that assist in providing comprehensive services to 
increase the employment rates of out-of-school youth residing 
in targeted high-poverty areas within Empowerment Zones and 
Enterprise Communities. In addition, the House bill reserves 10 
percent of youth funds at the State level to be used for out-
of-school youth projects in high-poverty areas.
      The Senate amendment reserves amounts appropriated for 
youth in excess of $1 billion (up to $250 million) for Youth 
Opportunity grants, which the Secretary may provide to assist 
youth in high-poverty areas located in Empowerment Zones/
Enterprise Communities, high-poverty areas located on Indian 
reservations, or other high-poverty areas designated by the 
States.
      The Conference agreement follows the Senate amendment.

     Adult and Dislocated Worker Employment and Training Activities

Authorization/State allotments
      The House bill establishes a single delivery system for 
all adults and dislocated workers while maintaining separate 
funding streams for each. For the Adult funding, .25 percent is 
reserved for outlying areas. The remaining 99.75 percent is 
allotted to States under a formula based on \1/3\ unemployed 
individuals in areas of substantial unemployment, \1/3\ excess 
number of unemployed individuals and \1/3\ economically 
disadvantaged adults. No State is allowed to receive less than 
90 percent or more than 130 percent of the amount they received 
in the preceding fiscal year. A minimum allotment of .25 
percent applies for small states.
      For dislocated workers, the House bill allots 80 percent 
to States, first reserving .25 percent for outlying areas, 
under a formula based on \1/3\ unemployed individuals in areas 
of substantial unemployment, \1/3\ excess number of 
unemployment individuals, and \1/3\ long-term unemployment. No 
State is allowed to receive less than 90 percent or more than 
130 percent of the amount they received in the preceding fiscal 
year. A minimum allotment of .25 percent applies for small 
states. The Department of Labor reserves the remaining 20 
percent for skill upgrading and emergency grants.
      The Senate amendment reserves .25 percent for outlying 
areas for adult activities. The remaining 99.75 percent is 
disbursed to States under a formula based on \1/3\ unemployed 
individuals in areas of substantial unemployment, \1/3\ excess 
number of unemployed individuals, and \1/3\ disadvantaged 
adults. No State is allowed to receive less than 90 percent or 
more than 130 percent of the amount they received in the 
preceding fiscal year. A minimum allotment of .40 percent 
applies for small states.
      For dislocated workers, States receive 80 percent of 
funds disbursed under a formula based on \1/3\ unemployed 
individuals in areas of substantial unemployment, \1/3\ excess 
unemployed individuals and \1/3\ long-term (15 weeks or more) 
unemployment. The Department of Labor is allowed to reserve 20 
percent of the amount available for allotment to States for 
outlying areas, dislocated worker demonstration projects, 
emergency grants, and dislocated worker activities technical 
assistance.
      The Conference agreement generally follows the Senate 
amendment except that the Conference agreement holds all States 
harmless at 100 percent of their FY 1998 funding allotments. A 
small State minimum of .3 percent would apply, as long as 
States receive their FY 1998 allotted levels. For new funds in 
excess of the FY 1998 funding levels, a .4 percent small State 
minimum would apply. However, ``small States'' are limited to 
those defined as ``small States'' under JTPA.
Within State allocations
      The House bill separately allocates funds to local 
workforce development areas for both adult and dislocated 
worker funding streams based upon State-determined formulas. 
Under the Adult funding stream, 15 percent of funds would be 
held at the State level for adult activities only. The 
remaining 85 percent of funds would go to the local level. Of 
that amount, 70 percent or more would be disbursed based on a 
formula based on \1/3\ unemployed, \1/3\ excess unemployed and 
\1/3\ economically disadvantaged adults. The remaining 30 
percent, or less, would be disbursed by a method determined 
through the State collaborative process. The House bill 
includes a cap of 10 percent for local administration. 
Additionally, 20 percent of funds may be transferred between 
the adult and dislocated workers streams with approval of the 
Governor.
      For dislocated workers, the House bill allows the State 
to reserve up to 30 percent for dislocated worker activities. 
The remaining 70 percent, or more, would be driven to the local 
level. Of that amount, 70 percent would be disbursed based on a 
formula of \1/3\ unemployed, \1/3\ excess unemployed, and \1/3\ 
economically disadvantaged adults. The remaining 30 percent, or 
less, would be disbursed by a method determined through the 
State collaborative process.
      The Senate amendment sends 85 percent of adult State 
grant funds to the local level in one of two ways that the 
State determines. Either all 85 percent of the funds are driven 
to the local level through a formula based on \1/3\ unemployed 
individuals in areas of substantial unemployment (greater than 
6.5 percent), \1/3\ excess number of unemployed individuals, 
and \1/3\ disadvantaged adults (min. 90%); or States can choose 
to send 70 percent, or more, of those funds through the above 
formula with up to the remaining 30 percent being disbursed 
through a formula incorporating other factors relating to 
excess poverty and employment. This optional formula would be 
developed through the Statewide partnership and approved by the 
Secretary. The remaining 15 percent is reserved for Statewide 
activities.
      For dislocated workers, the Senate amendments sends 60 
percent of State grant funds to the local level under a formula 
determined by the Governor to be based on: (1) insured 
unemployment data, (2) unemployment concentrations, (3) plant 
closings and mass layoff data, (4) declining industries data, 
(5) farmer-rancher economic hardship data, and (6) long-term 
unemployment data. Twenty-five percent of the State grant is to 
be used for rapid response activities. The remaining 15 percent 
is reserved for Statewide activities. The Senate amendment 
allows a 20 percent transfer, at the local level, between the 
Adult and Dislocated Worker funding streams.
      Additionally, the Senate amendment allows States to 
reserve not more than 15 percent from each of the three funding 
streams (adult, dislocated and youth) for statewide activities, 
with no more than 5 percent of that amount being used for 
administration. Funds from all three funding streams reserved 
for statewide activities and administration would be pooled at 
the State level, with Statewide activities benefiting adults, 
dislocated workers and youth.
      The Conference agreement generally follows the Senate 
amendment except that consideration of rural, urban and 
suburban areas is included in the factors relating to excess 
poverty and employment used in the alternative formula.
Use of funds
      In the House bill, services available to adults and 
dislocated workers at the local level include core services and 
training services. Training services include basic skills 
training; occupational skills training; on-the-job training; 
customized training; programs that combine workplace training 
with related instruction, which may include cooperative 
education programs; private sector operated training programs; 
skill upgrading and retraining; entrepreneurial training; 
employability training; and customized training conducted with 
a commitment by an employer to employ an individual upon 
successful completion of the training. Additionally, 
participants unable to obtain employment through the core 
services may receive intensive services. (Intensive services 
include specialized assessments; individuals counseling and 
career planning; case management; and follow-up services.)
      In the Senate amendment, services available to adults and 
dislocated workers at the local level include employment skills 
training; on-the-job training; job readiness training; adult 
education when combined with one of the other training 
activities; and other services deemed appropriate by the local 
partnership. Additionally, core services are provided through 
the one-stop customer service system. The Senate amendment 
provides no distinction for intensive services.
      The Conference agreement generally follows the House bill 
including distinguishing intensive services from other types of 
services provided.
Rapid response activities
      The House bill requires rapid response assistance to be 
provided by the State through an entity designated by the 
State. The House bill generally follows current law with 
respect to the activities under rapid response.
      The Senate amendment generally follows the House bill 
with respect to rapid response.
      The Conference agreement follows House and Senate 
provisions.
Individual training accounts
      The House bill requires, for adult training, the use of 
career grants, which are defined as a voucher or credit, 
through which a participant chooses training among qualified 
providers. The House bill specifies four exceptions where 
training may be provided by contract in lieu of career grants: 
(1) on-the-job training; (2) where there are an insufficient 
number of qualified providers; (3) where qualified providers 
are unable to provide effective services to special 
populations; or (4) where training is to be provided by 
community-based organizations. Even where there are exceptions, 
it is required that participants be provided customer choice to 
the extent possible.
      The Senate amendment contains provisions similar to the 
House bill regarding requirements for customer choice, except 
the term ``Individual Training Account'' is used in lieu of 
career grant. The two exceptions allowing the use of 
contracting for training services are (1) on-the-job training; 
and (2) where the Governor issues a written waiver based on 
evidence that there are no available private or public 
providers.
      The Conference agreement includes Individual Training 
Accounts (ITAs). The Conference agreement makes an exception to 
the use of Individual Training Accounts for on-the-job 
training; customized training; training services not provided 
by an eligible provider within the local workforce investment 
area; and training services offered by community-based 
organizations or other private organizations that serve 
``special participant populations'', defined as those who face 
multiple barriers to employment (including individuals with 
substantial language or cultural barriers, offenders, or 
homeless).

                           General Provisions

Performance accountability system
      The House bill establishes indicators of performance for 
all adult, dislocated workers, and youth programs to be applied 
to States as well as local areas. There are six core indicators 
relating to adult and dislocated worker programs, and four core 
indicators relating to the youth program. The Secretary of 
Labor is required to negotiate the expected levels of 
performance for each indicator with each State. States then 
negotiate expected levels of performance with each local area. 
Negotiations are to take into account special economic and 
demographic factors. Technical assistance, sanctions, and 
incentive funds are tied to actual performance.
      The Senate amendment is similar to current law and 
establishes four core indicators of performance that apply to 
States and local areas. Indicators of performance apply 
separately to dislocated workers, economically disadvantaged 
adults, and youth. Additionally, the Senate amendment specifies 
performance-related information that is to be reported 
annually.
      The Conference agreement generally follows the House bill 
and Senate amendment. The Conference agreement establishes four 
core indicators of performance relating to adults and 
dislocated workers and three core indicators of performance 
relating to activities for eligible youth. The process for 
negotiating expected levels of performance is similar to the 
process outlined in the House bill. States failing to meet 
expected performance levels after one year may request 
technical assistance or assistance in the development of a 
performance improvement plan. For States failing to meet 
expected performance levels for two consecutive years, the 
Secretary may reduce the amount of that State's grant by up to 
5 percent. Funds resulting from such a reduction are to be used 
to provide financial incentives for States exceeding expected 
levels of performance.

                               Job Corps

      The House bill retains Job Corps as a national program, 
but raises the minimum age to 16. The Secretary is required to 
consult with States and localities prior to establishing 
procedures for selecting center operators. As part of the 
selection process, applicants would need to pass a background 
check. Selection would be based, in part, on previous 
performance. The House bill outlines some procedures regarding 
the closure of centers, as well as provisions regarding the 
``zero tolerance'' policy.
      The Senate amendment strengthens linkages among Job Corps 
centers and the State workforce development systems and the 
local communities in which they are located. Assures that 
applicants are assigned to Job Corps centers nearest to where 
they reside, with certain exceptions. The Senate amendment also 
assures that Job Corps students would learn occupational skills 
in demand in their ``home'' labor market areas. Job Corps 
Center performance standards would be established for 
placement, retention, earning and skill gains of graduates, and 
students would be provided with follow-up counseling for up to 
12 months after graduation.
      The Conference agreement generally follows the Senate 
amendment.

                           National Programs

Native American programs
      The House bill generally follows current law and 
authorizes programs for Native Americans which can include 
comprehensive workforce and career development activities and 
supplemental services.
      The Senate amendment generally follows the House bill, 
with the exception that it maintains the Native American 
Employment and Training Council from current law.
      The Conference agreement generally follows the House and 
Senate provisions.
Migrant and seasonal farmworker programs
      The House bill authorizes a program for migrant and 
seasonal farmworkers from current law which is authorized to 
provide comprehensive workforce and career development 
activities and related services which may include employment, 
training, educational assistance, literacy assistance, an 
English literacy program, worker safety training, housing, 
supportive services, and the continuation of the case 
management database.
      The Senate amendment generally follows the House bill 
except that it authorizes additional activities, includes 
dropout prevention activities, follow-up services for employed 
individuals, self-employment and related business enterprise 
development education, and technical assistance relating to 
capacity enhancement. The Senate amendment does not include the 
provision of housing as an authorized activity.
      The Conference agreement follows the Senate amendment 
with the exception that the provision of housing remains as an 
authorized activity.
Veterans
      The House bill retains the current law which authorizes 
the Secretary of Labor to conduct programs to meet the needs of 
``Vietnam era veterans'' as well as veterans with service-
connected disabilities, and veterans who are recently separated 
from military service.
      The Senate amendment broadens the eligibility provision 
to add veterans with significant barriers to employment and 
veterans who served on active duty during war or campaign for 
which badges have been authorized.
      The Conference agreement follows the Senate amendment.
Demonstration, pilot, multiservice, research, multistate projects and 
        evaluations
      The House bill contains provisions relating to technical 
assistance, national partnership grants, research, pilots and 
demonstration grants, and evaluations, that are similar to 
current law.
      The Senate amendment requires the Secretary to develop a 
strategic plan for setting priorities for demonstrations, 
pilots, multiservice, research, multistate projects. Requires 
grants and contracts, under this section, to be awarded through 
a peer review process for awards over $100,000. Dislocated 
worker projects are separately authorized; not more than 10 
percent of dislocated worker funds reserved for the national 
emergency grants may be used for such projects.
      The Conference agreement generally follows the Senate 
amendment with the exception that the peer review process 
applies only to applications for awards in excess of $500,000.
National emergency grants
      The House bill makes National Emergency Grants available 
to provide assistance to dislocated workers.
      The Senate amendment expands eligibility for services 
under the Emergency Grants to include, in addition to 
dislocated workers, members of the armed forces and certain 
defense employees that are eligible for services under the 
current Defense Diversification Program.
      The Conference agreement follows the Senate amendment.
Civil rights/labor standards
      The House bill generally incorporates the current law 
provisions for nondiscrimination; and provisions relating to 
wages, benefits, health and safety, non-displacement, and 
grievance procedures.
      The Senate amendment also generally incorporates the 
current law provisions but adds title IX exemptions to the 
prohibition on sex discrimination and modifies the religious 
facility exemption consistent with the National and Community 
Service Act regulations. The Senate amendment also similarly 
incorporates many of the labor standards from current law.
      The Conference agreement generally follows the House and 
Senate provisions.
Waivers
      The House bill includes authority for the Secretary to 
waive any statutory or regulatory requirements of the adult and 
youth training provisions of the Act and Wagner-Peyser, with 
exceptions for labor standards, nondiscrimination, and related 
provisions.
      The Senate amendment clarifies that waivers previously 
granted to States may continue to be in effect under this Act 
for the duration of the waiver. Additionally, the Senate 
amendment includes provisions similar to the House bill with 
respect to general waivers of statutory or regulatory 
requirements. The Senate amendment also authorizes workforce 
flexibility plans to allow States to submit to the Secretary 
plans under which the State may provide waivers to local areas.
      The Conference agreement follows the Senate amendment 
except for striking all references to ``partnership''.
Drug testing provision
      The House bill has no provision.
      The Senate amendment requires each eligible provider of 
training services to administer a drug test (1) on a random 
basis to individuals who apply to participate in training 
services, and (2) to participants in training where there is a 
reasonable suspicion of drug use. Each applicant must agree to 
submit to such tests and be dismissed from participation if 
they fail the test.
      The Conference agreement strikes the Senate provision and 
replaces it with language to clarify that States shall not be 
prohibited from testing job training participants for the use 
of controlled substances. The Conference agreement stipulates 
that States may sanction individuals who test positive, as 
follows: 1) a six month ban from the program for the first 
positive test; and 2) similar to the Senate amendment, a 2-year 
ban from the program for subsequent positive tests. 
Additionally, if States use funds from this Act for such 
testing, the Conference agreement stipulates that such funds 
must come from State administrative expenses, which are limited 
to 5 percent of the total State training allotment.

                               Repealers

      The House bill repeals Parts F, G, H, I, and J of title 
IV of the Job Training Partnership Act; title V of the Job 
Training Partnership Act; the National Literacy Act of 1991; 
and sections 303, 304, 305, and 306 of the Rehabilitation Act 
of 1973.
      The Senate amendment repeals the Adult Education Act (20 
U.S.C. 1201); Section 204 of the Immigration Reform and Control 
Act of 1986 (8 U.S.C. 1255a note); title II of Public Law 95-
250 (92 Stat. 172); the Displaced Homemakers Self-Sufficiency 
Assistance Act (29 U.S.C. 2301 et seq.); Section 211 of the 
Appalachian Regional Development Act of 1965 (40 U.S.C. App. 
211); subtitle C of title VII of the Stewart B. McKinney 
Homeless Assistance Act (42 U.S.C. 11441 et seq.) except 
section 738 of such title (42 U.S.C. 11448); subchapter I of 
chapter 421 of title 49, United States Code; the Job Training 
Partnership Act (29 U.S.C. 1501 et seq.); title VII of the 
Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11421 et 
seq.), except subtitle B and section 738 of such title (42 
U.S.C. 11431 et seq. and 11448).
      The Conference agreement follows the Senate amendment.

         TITLE II--ADULT EDUCATION AND FAMILY LITERACY PROGRAMS

Title
      The House bill names this Act the ``Adult Education and 
Family Literacy Act''.
      The Senate amendment names this Act the ``Adult Education 
and Literacy Act''.
      The Conference agreement adopts the House title.
Purpose
      The purpose of the House bill is to assist the States to 
provide educational skills for adults necessary for employment 
and self-sufficiency, as well as the skills necessary for the 
educational development of their children.
      The purpose of the Senate amendment is to assist the 
States to provide education and literacy services to adults to 
enable them to become literate, complete a secondary education, 
and obtain the education skills necessary for the educational 
development of their children.
      The Conference agreement blends the purposes in the House 
and Senate bills. It provides that the purpose is to assist 
adults to become literate and obtain the knowledge and skills 
necessary for employment and self-sufficiency, assist adults 
who are parents to obtain the educational skills necessary to 
become full partners in the educational development of their 
children and assist adults in the completion of a secondary 
school education.
Allocation of funds to eligible agencies
      The House bill provides an initial allotment of $100,000 
for each outlying area and $250,000 for each eligible agency. 
The additional allotment would be distributed on the basis of a 
population age 16 through 60, who are without a high school 
diploma or the equivalent, who are not currently required to be 
enrolled in school, and who are not currently enrolled in 
secondary school. No eligible agency allotment would be less 
than 90 percent of its allotment in the preceding year.
      The Senate amendment provides for initial allotments 
identical to those in the House bill. Remaining funds are to be 
distributed on the basis of population age 16 and over, who are 
without a high school diploma, or the equivalent, who are not 
currently required to be enrolled in school, and who are not 
currently enrolled in secondary school.
      The Conference agreement adopts the House provisions.
Eligible recipients
      The House bill specifies those entities eligible to 
receive grants from the eligible agency. Grants are to be made 
on a competitive basis and all eligible entities are to have 
direct and equitable access to funds.
      The Senate amendment also specifies those entities 
eligible to receive grants from the eligible agency and 
includes language regarding direct and equitable access.
      The Conference agreement blends the two lists and 
specifies the following as entities eligible to receive grants 
from the eligible agency: a local educational agency; a 
community-based organization of demonstrated effectiveness; an 
institution of higher education; volunteer literacy 
organizations of demonstrated effectiveness; a public or 
private nonprofit agency; other nonprofit institutions which 
have an ability to provide literacy services to adults and 
families; a library; public housing authorities; and a 
consortium of such agencies; organizations or institutions. The 
agreement adopts the House language requiring grants to be made 
on a competitive basis and includes language regarding direct 
and equitable access to eligible providers, including the use 
of the same announcement and application process.
Use of funds by eligible agency
      The House bill provides that the eligible agency 
responsible for the administration of adult education and 
literacy programs would be authorized to spend funds directly 
for both program administration and other permissible 
activities. Other uses of eligible agency funds would include: 
professional development programs; technical assistance; State 
or regional literacy resource centers; monitoring and 
evaluation; incentives for coordination and performance awards; 
curriculum development; other Statewide activities for adult 
education and literacy; and support services such as 
transportation and child care. The House bill would require 
eligible agencies to use not less than 85 percent of available 
funds for local grants and allows them to reserve not more than 
15 percent for State level activities, of which no more than 5 
percent or $50,000 could be used for administrative expenses.
      The Senate amendment provides that the eligible agency 
responsible for the administration of adult education and 
literacy programs would be authorized to spend funds directly 
for program administration, State leadership activities, and 
programs for corrections education and other institutionalized 
persons. State leadership activities would include: 
professional development, curriculum development, monitoring 
and evaluation, development of performance measures, 
integration of literacy instruction with occupational skill 
training, developing linkages with postsecondary institutions, 
State or regional literacy resource centers, and other 
Statewide activities for adult education and literacy. The 
Senate would require eligible agencies to use not less than 80 
percent of available funds for local grants and allows States 
to use not more than 20 percent for State leadership 
activities, of which no more than 5 percent or $80,000 could be 
used for administrative expenses. Of the 80 percent reserved 
for local grants, the Senate amendment requires that eligible 
agencies make available not more than 10 percent of the funds 
reserved for grants to local providers for programs for 
corrections education and other institutionalized individuals.
      The Conference agreement blends the two lists of 
activities and would include: the establishment or operation of 
professional development programs to improve the quality of 
instruction; the provision of technical assistance to eligible 
providers; the provision of technology assistance, including 
staff training, to eligible providers; support of State or 
regional networks of literacy resource centers; monitoring and 
evaluation of the quality of and the improvement in, activities 
and services authorized under this section; developing and 
disseminating curricula; integration of literacy instruction 
and occupational skill training and promoting linkages with 
employers; linkages with postsecondary institutions; incentives 
for coordination and performance awards; other activities of 
Statewide significance, and coordination with existing support 
services designed to increase enrollment in, and successful 
completion of, adult education and literacy activities. It 
requires eligible agencies to collaborate where possible and 
avoid duplicating efforts in order to maximize the impact of 
activities carried out under this Act. The agreement would 
require eligible agencies to use not less than 82.5 percent of 
available funds for local grants, and allow eligible agencies 
to use not more than 12.5 percent for State leadership 
activities and not more than 5 percent or $65,000 for 
administrative expenses. The agreement adopts the Senate 
reservation for corrections education but modifies the program 
description to encourage dollars to be spent on criminal 
offenders who will be released within five years and to change 
the reference to bilingual programs to English literacy 
programs.
Priorities and preferences
      The House bill requires eligible agencies to consider a 
variety of factors in awarding grants to local providers.
      The Senate amendment sets forth a list of priorities and 
preferences eligible agencies are to consider in funding local 
adult education and literacy activities.
      The Conference agreement merges the two provisions and 
requires the following factors to be considered when awarding 
grants to provide: whether or not they are based on sound 
research; the past effectiveness of the provider in improving 
the literacy skills of adults and families; the commitment of 
the provider to serve those most in need of services; whether 
or not the program is of sufficient intensity and duration for 
participants to achieve substantial learning gains, and whether 
the program effectively employs technology, provides learning 
in real-life contexts, is staffed by well trained personnel, is 
coordinated with other available resources, maintains a high-
quality information management system, funds communities that 
have a demonstrated need for English literacy programs, and 
establishes measurable goals for client outcomes.
Use of funds by eligible recipients
      The House bill requires eligible recipients receiving a 
grant to conduct one of the following activities: adult 
education and literacy services, including services provided on 
a work site; family literacy services, and English literacy 
programs. It limits to 5 percent the amount of the grant 
available for planning, administration, personnel development 
and interagency coordination.
      The Senate amendment requires grants and contracts to 
eligible recipients to be used for programs or services that 
meet the purposes of the Adult Education and Literacy Act, such 
as adult education and literacy services and English literacy 
programs. It limits to 5 percent the amount recipients could 
use for planning, administration, personnel development and 
interagency coordination.
      The Conference agreement adopts the House language but 
modifies it slightly to specifically reference workplace 
literacy services. Adoption of the House language would, for 
the first time, specifically allow the use of funds for family 
literacy programs.
Eligible agency fiscal requirements
      The House bill requires eligible agencies to use their 
federal grants to supplement and not supplant other public 
funds spent for adult education and literacy activities. It 
requires the fiscal effort per student or the aggregate 
expenditures for adult education and literacy activities within 
the State to be maintained at a level not less than 90 percent 
of the previous year. Grants to eligible agencies would be 
reduced in proportion to the amount the eligible agency failed 
to meet this requirement. One quarter of the federal grant to 
each eligible agency would be required to be matched with non-
federal funds used for adult education and literacy activities.
      The Senate amendment contains similar supplement, not 
supplant language. It requires aggregate expenditures for adult 
education and literacy to be maintained at a level not less 
than 90 percent of the previous year but would not permit 
grants to any eligible agency failing to reach that level. The 
Senate amendment requires eligible agencies to provide an 
amount equal to 25 percent of the total amount of funds 
expended for adult education in the State from non-federal 
sources. The Senate amendment allows that eligible agency's 
share to be in cash or in kind, fairly evaluated.
      The Conference agreement adopts the House language on 
maintenance of effort but amends it to prevent an eligible 
agency reduction from bringing the per capita expenditure below 
the national average. The House recedes to the Senate language 
on supplement not supplant and the State share.
Eligible agency plan requirements
      The House bill requires the eligible agency plan to 
include assurances for the coordination of adult education and 
job training programs within the State, describe the assessment 
to determine adult education needs, the use of funds, and an 
evaluation of program effectiveness. It would also provide 
assurances concerning direct and equitable access to all 
eligible recipients and an assurance regarding fiscal 
requirements of the program. Finally, it requires an assurance 
that at least one grant will be awarded to providers who offer 
flexible schedules and necessary support services to enable 
individuals to participate in adult education and literacy 
activities.
      The Senate amendment would require eligible agencies to 
submit plans for a 3-year period. Such plans are to include an 
assessment to determine adult education needs and descriptions 
of the use of funds, evaluation procedures, the method of 
selecting local recipients, the measures to be taken to 
coordinate and avoid duplication of services among various 
federal education, training and human services programs, a 
description of the process to be used for public participation 
and comment with respect to the eligible agency plan and a 
description of how the eligible agency will develop program 
strategies for populations such as low-income students, 
individuals with disabilities, single parents, etc. Each plan 
would have to provide assurances regarding the fiscal 
requirements of the program.
      The Conference agreement blends the provisions of the 
House and Senate bills. It adopts language requiring the 
submission of a 5-year plan. Plan components would include an 
assessment to determine adult education needs, a description of 
the use of funds, evaluation procedures, a description of how 
the eligible agency will develop program strategies for 
populations such as low-income students, individuals with 
disabilities, single parents, etc., assurances for the 
coordination of adult education and job training programs 
within the State. It adopts House language requiring an 
assurance that at least one grant will be awarded to providers 
who offer flexible schedules and necessary support services to 
enable individuals to participate in adult education and 
literacy activities except that it is amended to require that 
an effort be made to coordinate funds for support services 
prior to paying for them with adult education dollars.
      It would also provide assurances concerning direct and 
equitable access to all eligible recipients and an assurance 
regarding fiscal requirements of the program. The eligible 
agency plan would also be required to describe the process used 
for public participation and comment consistent with the Senate 
amendment.
Use of phonics
      The House bill contains numerous references to the use of 
instructional practices using phonemic awareness and systematic 
phonics.
      The Senate amendment does not contain similar references.
      The Conference agreement adopts the House language but 
amends such references to include fluency and reading 
comprehension as well.
National Institute for Literacy
      The House bill continues the National Institute for 
Literacy for purposes of providing national literacy 
leadership, coordinating literacy services, and serving as a 
national resource for adult education and family literacy by 
disseminating information and supporting more effective 
services. Activities are similar to current law but place an 
emphasis on support for a national electronic database of 
information and for a network of State or regional adult 
literacy resource centers. The administrative structure would 
remain the same, except that the name of the National Institute 
Board would be changed to the National Institute for Literacy 
Advisory Board. The House bill requires the Secretary to 
reserve 1.5 percent of the amount appropriated, but not more 
than $6,500,000, for the Institute.
      The Senate amendment contains provisions similar to those 
in the House bill but does not cap funding for the Institute.
      The Conference agreement would continue the National 
Institute for Literacy based on provisions in the House and 
Senate bills. There are few changes from current law. The 
Conferees are especially interested in the Institute taking a 
leadership role in improving reading instruction for youth and 
adults based on recent research supported by the National 
Institute for Health and identified by the National Academy of 
Sciences. The agreement requires the Secretary to reserve 1.5 
percent of the amount appropriated, but not more than 
$8,000,000, for the Institute.
National activities--Department of Education
      The House bill would authorize the Secretary to carry out 
national activities to enhance the quality of adult education 
and family literacy nationwide, including technical assistance 
to States for developing and using performance measures, 
research on adult education methods and effectiveness, 
evaluation and assessment, and demonstration programs. The 
House bill would reserve 1.5 percent of the amount 
appropriated, but not more than $6,500,000 to establish and 
carry out national leadership and evaluation activities.
      The Senate amendment would authorize the Secretary to 
carry out national leadership and evaluation activities to 
enhance the quality of adult education and literacy nationwide, 
including research, demonstration, dissemination, evaluations 
and assessments, capacity building at the State and local 
levels, data collection, professional development and technical 
assistance. The Senate amendment would reserve 1.5 percent of 
the amount appropriated for national leadership and evaluation 
activities, but does not cap the amount available.
      The Conference agreement blends the House and Senate 
national leadership activities. Authorized activities would 
include: technical assistance, dissemination of information on 
successful practices, improving the quality of adult education 
and literacy activities, research, demonstration programs, 
carrying out an independent evaluation and assessment of adult 
education and literacy activities, support efforts aimed at 
capacity building, collecting data and other activities to 
enhance the quality of adult education and literacy nationwide. 
The agreement requires the Secretary to reserve 1.5 percent of 
the amount appropriated, but not more than $8,000,000, for 
national leadership and evaluation activities.
Accountability
      The House bill requires eligible agencies receiving funds 
under the Adult Education title to identify, in their plan, 
indicators and related levels of performance to be used to 
measure the State's progress in meeting the State's long-term 
goals. Upon submission of the plan, the Secretary of Education 
is authorized to negotiate with each eligible agency, the 
expected levels of performance to be achieved.
      The core indicators of performance for adult education 
and family literacy programs to include measures of achievement 
in the areas of reading, writing, language acquisition, problem 
solving, etc.; receipt of a high school diploma or its 
equivalent; entry into a postsecondary school, job retraining 
program, employment or career advancement; attainment of the 
literacy skills and knowledge individuals need to be productive 
and responsible citizens and become more actively involved with 
the education of their children, and such other measures as the 
eligible agency may wish to collect.
      Eligible agencies that exceed the benchmarks or 
demonstrate continuing progress toward meeting them are 
eligible to receive incentive grant funds.
      The Senate amendment contains a similar list of 
performance measures, including demonstrated improvements in 
literacy skill levels; attainment of secondary school diplomas 
or their equivalent, and placement in, retention in, or 
completion of postsecondary education, training, or 
unsubsidized employment.
      The Conference agreement follows the House bill, although 
it uses the term ``performance measures'' instead of 
``benchmarks.'' It merges the two lists of specific indicators, 
except that language referring to the literacy skills and 
knowledge individuals need to be productive and responsible 
citizens is dropped and ``measures of the success of family 
literacy programs'' is listed among the other measures eligible 
agencies may wish to collect.

           TITLE III--WORKFORCE INVESTMENT-RELATED ACTIVITIES

                           Wagner-Peyser Act

Amendments to Wagner-Peyser
      The House bill retains a separate authorization and 
funding stream for Wagner-Peyser. It requires public labor 
exchange activities to be part of the one-stop system, 
integrates the Wagner-Peyser plan into the State Workforce 
Development plan, and amends several sections of the Wagner-
Peyser Act.
      The Senate amendment also retains a separate 
authorization and funding stream for Wagner-Peyser and 
integrates the labor exchange activities and plan into the 
workforce development system.
      The Conference agreement generally follows the House bill 
and Senate amendment. The Conference agreement follows the 
Senate amendment with respect to function of the Secretary and 
approval of the plan.
Employment Statistics
      The House bill retains the current labor market 
information provisions under JTPA.
      The Senate amendment streamlines current provisions 
related to labor market statistics (LMI), strengthening the 
role of States and localities, and makes such information 
beneficial to individuals seeking employment.
      The Conference agreement generally follows the Senate 
amendment except it renames the section as ``Employment 
Statistics''.
21st Century Workforce Commission
      The House bill contains no provision.
      The Senate amendment establishes the 21st Century 
Workforce Commission to conduct a study of all matters relating 
to the information technology workforce in the United States. 
Composed of 21 members, the Commission is required to submit to 
the President and Congress their report within 6 months of 
their first meeting, and terminate within 90 days of that 
submission.
      The Conference Agreement generally follows the Senate 
amendment with modifications to limit the number of Commission 
members to 15 (8 business, 1 labor, 2 State and local 
officials, 3 education, and 1 representing the research 
community in the field of information technology). The 
Secretaries of Education and Labor would be ex-officio members 
of the Commission.
Prohibitions
      The House bills includes provisions that no provisions 
under this Act may be construed to exercise any direction, 
supervision, or control over the curriculum, program of 
instruction, administration, or personnel of any educational 
institution, school, or school system. The House bill further 
includes a provision clarifying that nothing in this Act shall 
be construed to provide a local workforce investment board with 
the authority to mandate curricula for schools.
      The Senate agreement includes a prohibition that none of 
the funds under the Act may be used for activities authorized 
under the School to Work Opportunities Act. The Senate bill 
also includes a provision clarifying that no funds under this 
Act may be used to provide an activity for eligible youth who 
are not school dropouts if participation in the activity would 
interfere with or replace the regular academic requirements of 
the youth.
      The Conference agreement generally contains both the 
House and Senate provisions. Specifically the Conference 
agreement includes language that ``None of the funds made 
available under this Act may be used to provide funding under 
the School-to-Work Opportunities Act of 1994 or to carry out, 
through programs funded under this Act, activities that were 
funded under the School-to-Work Opportunities Act of 1994, 
unless the programs funded under this Act serve only those 
participants eligible to participate in the programs under this 
Act.''

            TITLE IV--REHABILITATION ACT AMENDMENTS OF 1998

                           General Provisions

      The House bill addresses several definitions including 
administrative costs, employment outcome, and public safety 
officer.
      The Senate amendment addresses each definition considered 
by the House and several more definitions including: assessment 
for determining eligibility and vocational rehabilitation 
needs, construction, extended services, federal share, 
independent living core services and independent living 
services, individual with a disability, individual with a most 
significant disability, individual's representative/applicant's 
representative, local workforce investment board, the term 
``requires vocational rehabilitation services'', significant 
disability, statewide workforce investment board, supported 
employment, supported employment services, underemployed, and 
workforce investment activities.
      The Conference agreement accepts the Senate amendment on 
a majority of definitions with the following few exceptions or 
qualifications: 1) ``administrative costs'' will be the 
definition in the current Department of Education regulations; 
2) ``construction'' remains unchanged from current law; 3) 
``individual's representative/applicant's representative'' does 
not include the descriptor `advocate'; 4) the term ``requires 
vocational rehabilitation services'' is deleted; and 5) the 
definition of the term ``underemployed'' is eliminated. Those 
definitions relating back to other titles of the Workforce 
Investment Act mirror the meanings and definitions given them 
in those titles.

              Reports on Program Outcomes and Evaluations

      The House bill requires that the annual report on 
vocational rehabilitation include data on the administrative 
costs for the Title I program.
      The Senate amendment expands the performance and 
accountability information that is collected and reported on 
the vocational rehabilitation programs. The Senate amendment 
also requires the Commissioner to conduct studies and make 
analyses to identify exemplary practices in vocational 
rehabilitation. These studies would focus on subjects such as 
informed client choice, customer satisfaction, job placement 
and retention, assistive technology, and integrated employment.
      The Conference agreement includes the requirement for 
reporting administrative costs contained in the House bill as 
well as the additional reporting requirements in the Senate 
amendment. The Conferees urge the Commissioner to direct 
current evaluation activities on identifying what works well, 
rather than continuing to seek to define, or in many cases, 
redefine, the chronic problems connected to the employment of 
individuals with disabilities.

                   Vocational Rehabilitation Services

Statewideness
      The House bill clarifies that the requirement for the 
State plan to be in effect in all political subdivisions of the 
State does not apply to cases in which private earmarked funds 
are used as state matching funds for particular geographic 
regions of the State, and is permitted without a waiver by the 
Commissioner.
      The Senate amendment makes no change to current law.
      The Conference agreement follows the clarifications in 
the House bill. These clarifications are necessary in light of 
recent Department of Education interpretations of these 
statutory provisions that are contrary to the legislative 
intent. The Conference agreement provides that earmarking of 
private funds for service delivery in particular geographic 
areas of the State is permitted without a waiver of the State's 
statewideness obligations by the Commissioner if State funds 
are unavailable for the Federal match. This exception to the 
statewideness requirements in section 101(a)(4)(B) is intended 
to allow States to use funds earmarked for a particular 
geographic location within the State as part of the State's 
non-Federal share under title I without obtaining a waiver of 
Statewideness from the Commissioner.
      In making these changes, the Conferees reaffirm the 
original purposes of the statewideness provisions and the 
earmarked funds exception of Title I. The statewideness 
provision is intended to ensure that, in general, State efforts 
are not purposely skewed to particular areas of a State, 
without approval from the Department of Education.

  Information for Individuals Not Covered Under the State's Order of 
                           Selection Criteria

      The House bill makes no change to current law.
      The Senate amendment requires that all individuals 
eligible for vocational rehabilitation services, including 
those who do not receive services because the State is under an 
order of selection, receive at least information and referral 
services regarding access to the State workforce development 
system and other information to help the individual prepare 
for, secure, retain, or regain a job. A State may also provide 
additional counseling and guidance services.
      The Conference agreement deletes the allowable State 
activities (but maintains the authority to provide additional 
counseling and guidance services), expands the required 
information and referral services to include guidance, and 
specifies what a proper referral must be. The Conferees intend 
to alleviate the backlog of eligible individuals who do not 
receive services from the State vocational rehabilitation 
program because they do not meet the State's order of selection 
criteria. Many of these individuals do not receive services 
from the State workforce system and are inappropriately 
referred back to the State vocational rehabilitation program 
because they have a disability. The Conferees expect that 
through the changes made throughout the Conference agreement in 
integrating the State workforce system, States will serve 
individuals with disabilities throughout the entire State 
workforce system, not only through State vocational 
rehabilitation program.

               Comprehensive System of Personnel Training

      The House bill modifies the requirements in current law 
for a comprehensive personnel development system.
      The Senate amendment adopts the majority of changes in 
the House bill and adds several additional requirements.
      The Conference agreement maintains the requirements 
contained in current law. The Conferees believe that there is a 
continued need for a comprehensive system of personnel 
development, which was included in the Rehabilitation 
Amendments of 1992, in order to ensure that individuals with 
disabilities receive assistance from qualified vocational 
rehabilitation personnel.
Interagency agreements
      The House bill makes no changes to current law.
      The Senate amendment requires a State's Governor to 
ensure that the State's vocational rehabilitation agency enters 
into interagency agreements with appropriate public entities, 
including the State's workforce investment system, to provide 
vocational rehabilitation services more efficiently and 
comprehensibly, to ensure cooperation among agencies which 
provide vocational rehabilitation services, and to ensure no 
duplication of services. While the Senate amendment does not 
detail what the agreements must contain or with whom they must 
be made, it does include requirements that the agreements 
contain a dispute resolution process and methods for defining 
financial responsibility.
      The Conference agreement modifies the Senate amendment by 
1) allowing the State's vocational rehabilitation chief 
administrator to consult with the Governor regarding the 
agreements and 2) specifying certain entities with which the 
State vocational rehabilitation agency must establish 
agreements. These entities include public institutions of 
higher education. The Conferees recognize that colleges and 
universities already have a responsibility to provide certain 
services under the Americans with Disabilities Act (ADA). The 
Conferees encourage State vocational rehabilitation agencies 
and public institutions of higher education, in developing 
interagency agreements, to consider the requirements of the ADA 
and other laws as well as agreements that may currently be in 
place. However, State vocational rehabilitation agencies should 
not interpret these ``interagency agreement'' provisions as 
shifting the obligation for paying for specific vocational 
rehabilitation services to colleges and universities. State 
vocational rehabilitation agencies still have that 
responsibility. Moreover, public institutions of higher 
education, as parties in interagency agreements, must agree to 
the terms of the interagency agreements, including the services 
that they are expected to provide.
Cooperative agreements with other components of State workforce 
        investment system
      The House bill makes no changes to current law.
      The Senate amendment provides for cooperative agreements 
with other parts of a State's workforce investment system to 
allow for activities such as: staff training and technical 
assistance regarding vocational rehabilitation services and 
eligibility, common customer service procedures such as intake 
and human services hot lines, common dispute resolution 
procedures, and electronic links to share employment statistics 
and employment opportunities.
      The Conference agreement mirrors the Senate amendment. 
The Conferees do not intend that this provision be confused 
with the provision outlining ``Interagency Agreements.'' 
Interagency agreements are designed to assure cooperation not 
only among agencies within a State's workforce investment 
system, but more importantly outside the system. Interagency 
agreements also have specific provisions regarding the payment 
of services among these agencies. This section is designed to 
make the State vocational rehabilitation system more compatible 
with the State's workforce system and to underscore the links 
between the two systems.
Coordination with education officials
      The House bill changed references in the area of 
transition services for students with disabilities from 
Individualized Written Rehabilitation Plan (IWRP) to 
Individualized Education Program (IEP) so that transition 
services may be provided under an IEP without requiring the 
development of a separate IWRP, or Individual Plan for 
Employment (IPE) as it is referred to in the House bill.
      The Senate amendment requires the State plan to contain 
plans, policies and procedures for coordination between the 
vocational rehabilitation agency and local and State education 
officials in facilitating the transition of students with 
disabilities from secondary school to the workforce through 
vocational rehabilitation services.
      The Conference agreement blends the House and Senate 
provisions. First, the Conference agreement specifically allows 
transition planning to be provided under an IEP without 
requiring the development of a separate IPE. Second, the 
Conferees also reaffirm the intent of the transition services 
provisions in the 1992 Vocational Rehabilitation Amendments, 
which according to the Senate report, was not ``to shift the 
responsibility of service delivery from education to 
rehabilitation during the transition years'' but rather to 
define the role of the rehabilitation system as ``primarily one 
of planning for the student's years after leaving school.'' The 
Conference agreement encourages State vocational rehabilitation 
agencies to assist schools in identifying transition services 
in the development of the IEP (including participation in IEP 
meetings), and to participate in the cost of transition 
services for any student with a disability so long as those 
students have been determined eligible to receive vocational 
rehabilitation services. The nature of these services and the 
roles and responsibilities of each party are to be determined 
at the State or local level. However, State vocational 
rehabilitation agencies should not interpret the ``interagency 
agreement'' provisions as shifting the obligation for paying 
for specific transition services normally provided by those 
agencies to local school districts. State vocational 
rehabilitation agencies still have that responsibility. 
Further, school districts are parties in interagency 
agreements, and must agree to the terms of the interagency 
agreements and the services that they are expected to provide.
      The Conferees intend for transition services to cover a 
wide range of activities that facilitate the transition of 
secondary school students with disabilities from school to 
post-school activities.
Presumption of eligibility for recipients of SSDI and SSI
      The House bill makes no changes to current law.
      The Senate amendment adds new language making individuals 
who receive SSI or SSDI benefits to be automatically eligible 
for vocational rehabilitation services.
      The Conference agreement follows the Senate amendment. 
However, the Conferees do not intend to create any sort of 
entitlement to vocational rehabilitation services for 
individuals receiving SSI or SSDI benefits. To actually receive 
services, a person must have a disability and require 
vocational rehabilitation services to prepare for, secure, 
retain, or regain employment. The ``presumption of 
eligibility'' is only the first step in the overall evaluation 
of whether or not an individual with a disability will receive 
vocational rehabilitation services. People receiving SSI or 
SSDI have already met a much stricter standard as to whether 
they have a disability. Therefore there is no need to 
reestablish their eligibility in that regard for vocational 
rehabilitation. SSI and SSDI recipients must still, however, 
demonstrate their desire to work in order to receive vocational 
rehabilitation services. Moreover, the decision on whether an 
individual actually receives vocational rehabilitation services 
is based on the availability of funds in accordance with the 
State's order of selection criteria.
Individual plans
      The House bill renames the Individualized Written 
Rehabilitation Plan (IWRP) as the Individual Plan for 
Employment (IPE). The bill enhances client control by requiring 
that clients have the opportunity to exercise informed choice 
in the development and implementation of their plans by 
selecting employment goals, services, providers, and methods to 
procure services, as well as providing for extended services.
      The Senate amendment renames the IWRP as the Individual 
Rehabilitation Employment Plan (IREP), and follows the House 
bill in providing for informed client choice and extended 
services. The Senate amendment also establishes mandatory 
procedures and components for individual plans.
      The Conference agreement follows the Senate amendment, 
except for adopting the House term of Individual Plan for 
Employment. The Conference agreement reflects the need to 
provide greater choice and involvement of vocational 
rehabilitation clients in developing their service plans. The 
Conferees expect that these changes will fundamentally change 
the role of the client-counselor relationship, and that in many 
cases counselors will serve more as facilitators of plan 
development.
Improved and enhanced consumer choice
      The House bill strongly emphasize improved and enhanced 
consumer choice, especially through new language regarding the 
vocational rehabilitation consumer's role in his or her 
Individual Employment Plan.
      The Senate amendment also emphasizes improved and 
enhanced consumer choice and requires assurances that 
vocational rehabilitation consumers or their appropriate 
representative be provided information and support services to 
assist the consumers in exercising informed choice throughout 
the rehabilitation process.
      The Conference agreement adopts these views and expands 
the role of vocational rehabilitation consumers in the 
decisions regarding their job training. The Conferees believe 
that a consumer-driven program is most effective in getting 
people jobs. Therefore, the Conferees endorse increased 
independence for individuals with disabilities to informed 
choice.
State Rehabilitation Council
      The House bill makes no changes to current law.
      The Senate amendment expands the membership of the 
Council, increases the responsibilities of the Council, and 
adds additional functions. The Senate amendment also makes 
several changes to better integrate and coordinate vocational 
rehabilitation services in the State Workforce system.
      The Conference agreement follows the Senate amendment. In 
doing so, the Conferees preserve the Council's advisory 
functions. The Conference agreement adds additional function 
that follow the Senate amendment in requiring that the Council 
and State agency jointly develop, agree to, and review State 
goals and priorities.
American Indian vocational rehabilitation services
      The House bill makes no changes to current law.
      The Senate amendment gives the Rehabilitation Services 
Administration the flexibility to make decisions about the 
duration of individual grants, but also allows for long-term 
grants that will contribute to the stability and effectiveness 
of services.
      The Conference agreement follows the Senate amendment and 
adds language giving tribal vocational rehabilitation agencies 
the authority to provide vocational rehabilitation services to 
Native Americans who reside either on or near reservations. 
However, the Conferees do not intend this authority to require 
tribal vocational rehabilitation agencies to serve Native 
Americans not living on a reservation. It merely allows the 
agencies to do so if they choose.

                         Research and Training

Research and training improvements
      The House bill eliminates the references to the 
compensation rate for the Director of the National Institute 
for Disability and Rehabilitation Research (NIDRR), and 
eliminates provisions related to the Deputy Director.
      The Senate amendment follows the House bill regarding the 
appointment of the Director but retains references to the 
Deputy Director; eliminates provisions that requires the 
awarding of funds for pediatric rehabilitation and other areas, 
adds provisions that allow research grants to be made for 
research programs on the effectiveness of medical practices and 
on quality assurance in rehabilitation technology, and makes 
other improvements in focusing research funds on critical 
areas.
      The Conference agreement follows the House bill regarding 
the appointment of the Director and Deputy Director of NIDRR. 
The Conference agreement follows the Senate amendment regarding 
the elimination of provisions requiring funding for specific 
projects and in allowing for grants in designated emerging 
research areas. The Conferees intend that information and 
findings from work funded by the Institute be effectively 
disseminated so that it is more accessible to the public, 
including individuals with disabilities. The Conferees also 
recognize that individuals with disabilities lack access to 
uniform, useful information about assistive technology devices 
and services. The Conferees urge NIDRR to assume a leadership 
role in promoting the identification, use, and acceptance of 
uniform information about common devices and services that 
permit individuals with disabilities to make informed decisions 
about such devices and services. However, the Conferees believe 
that it would be inappropriate for NIDRR to contemplate or set 
standards for such devices and services.

    Professional Development and Special Projects and Demonstrations

Transfer and elimination of programs
      The House bill eliminates 22 programs by repealing 
sections 303 through 306 in Title III of current law and 
repealing authorized but unfunded programs in Title VIII.
      The Senate amendment also repeals sections 303 to 306 in 
Title III, as well as the currently funded Reader Services and 
Interpreter Services programs, and all programs in Title VIII.
      The Conference agreement consolidates into Title III the 
currently funded programs authorized under Title VIII. It also 
retains the currently funded Reader Services and Interpreter 
Services programs in Title III, and transfers the Grants for 
Demonstration Projects to Increase Choice, Braille Training Projects 
and Parent Information and Training Programs from Title VIII to Title 
III. Title VIII is repealed completely. Many of these programs were 
authorized for more than twenty years yet were never funded. The 
changes in the Conference agreement streamline the training and 
demonstration projects by consolidating them into a single section with 
flexible authority to address changing and emerging needs.

                     National Council on Disability

Duties and administration of the National Council on Disability
      The House bill makes no changes to current law regarding 
the National Council on Disability, other than extending the 
authorization for the Council.
      The Senate amendment expands the membership of the 
Council, modifies the duties of the Council, and makes other 
changes related to the administration of the Council.
      The Conference agreement follows the Senate amendment, 
but strikes the expansion of duties at the international level.

                          Rights and Advocacy

Electronic and information technology regulations
      The House bill requires that the Director of the Office 
of Management and Budget establish procedures for each federal 
agency to provide written certification by September 30 of each 
year that it is in compliance with the accessibility 
guidelines, and to oversee agencies in complying with the 
requirements. The House bill, however, makes no changes to the 
guidelines for electronic and information technology 
accessibility.
      The Senate amendment makes significant changes to current 
law in the areas of accessibility and electronic and 
information technology standards. These changes include 
requiring Federal agencies to procure, maintain, and use 
electronic and information technology that provides individuals 
with disabilities with comparable access to what is available 
to individuals without disabilities. The Senate amendment also 
requires that the Architectural and Transportation Barriers 
Compliance Board with issuing electronic and information 
technology standards, establishes reporting requirements for 
Federal agencies, establishes, complaint procedures, and 
clarifies individual rights of action relative to section 505 
of the Act.
      The Conference agreement follows the Senate amendment 
with several changes. The Conference agreement clarifies 
provisions in order to be consistent with the Clinger-Cohen Act 
of 1996, clarifies procedures relating to the extent of the 
Federal government's responsibilities in providing public 
access to information, and modifies the procedures for filing 
complaints.

       Employment Opportunities for Individuals With Disabilities

Expanding employment opportunities
      The House bill makes no changes to current law.
      The Senate amendment emphasizes expanded employment 
opportunities for individuals with disabilities by authorizing 
funding for two new types of projects: projects in 
telecommuting and projects in self-employment.
      The Conference agreement deletes the authority related to 
the new projects in the Senate amendments, reflecting the 
Conferees' intention to streamline and consolidate programs in 
the Rehabilitation Act. However, the Conferees agree and fully 
intend that telecommuting and self-employment be viable 
employment outcomes for recipients of vocational rehabilitation 
services who want such opportunities. These amendments are 
supported by amendments to Title I of the Act.

     Independent Living Services and Centers for Independent Living

State Independent Living Councils
      The House bill makes no changes to current law.
      The Senate amendment adds at least one representative of 
the directors of projects serving American Indians with 
disabilities to the State Independent Living Councils and 
clarifies the means by which the minimum allotments are 
adjusted for inflation, and other technical changes.
      The Conference agreement adopts the Senate amendments.

                      TITLE V--GENERAL PROVISIONS

Unified plan
      The House bill contains no provision.
      The Senate amendment allows States to submit a unified 
plan to the Secretary to fulfill the State plan requirements of 
training activities for adults, dislocated workers and youth; 
adult education; and secondary and postsecondary vocational 
education.
      The Conference agreement generally follows the Senate 
amendment with the exception that the State legislature must 
approve the inclusion of secondary vocational education in the 
unified plan.
Incentive grants
      The House bill authorizes the Secretary of Labor to award 
incentive grants to States that: (1) exceed levels of 
performance; (2) demonstrate continuing progress towards 
exceeding benchmarks; and (3) demonstrate significant progress 
in the coordination and integration of programs.
      The Senate amendment authorizes the Secretary of Labor to 
award incentive grants to States that exceed the expected 
levels of performance for performance measures established 
under the workforce development and adult education titles and 
vocational education. Special consideration is to be given to 
States achieving the highest level of performance related to 
employment retention and earnings. Funds are to be used for 
innovative projects.
      The Conference agreement generally follows the Senate 
amendment except that States must apply for such incentive 
grants, and are only eligible to receive incentive grants if 
they consult with their State legislature in development of 
their application. The application must have the approval of 
the Governor, the State agency responsible for adult education, 
and the State agency responsible for vocational education. 
Grant funds would be required to be spent to carry out 
innovative training, adult education, or vocational education 
programs consistent with the requirements of this Act and the 
Carl D. Perkins Vocational Education Act accordingly. 
Applications would be developed with the assistance of the 
State board.
Authorization of appropriations/Effective date/Transition
      The House bill authorizes such sums for five years (FY 
1999-FY 2003). The House bill takes effect July 1, 1998. The 
Secretaries are authorized to take such steps as they determine 
appropriate to provide for an orderly transition from 
authorities amended or repealed by the Act.
      The Senate amendment authorizes such sums for six years 
(FY 1999-FY 2004). In general, the Senate amendment takes 
effect July 1, 1999 (except for the 21st Century Workforce 
Commission authority which takes effect upon enactment). The 
Secretary of Labor is authorized to take steps to provide for 
the orderly transition to the authority of the bill. 
Additionally, the Governor may use funds made available under 
any provision of law repealed by the bill to implement the bill 
prior to its effective date.
      The Conference agreement takes effect upon the date of 
enactment, unless otherwise set forth in the Act and authorizes 
such sums for five years (FY 1999-FY 2003). The Conference 
agreement generally follows the House bill and Senate amendment 
with respect to transition.

                                   Bill Goodling.
                                   Howard ``Buck'' McKeon.
                                   Frank Riggs.
                                   Lindsey Graham.
                                   Bob Schaffer.
                                   W.L. Clay.
                                   M.G. Martinez.
                                   Dale Kildee.
                                 Managers on the Part of the House.

                                   Jim Jeffords.
                                   Dan Coats.
                                   Judd Gregg.
                                   Bill Frist.
                                   Mike DeWine.
                                   Michael B. Enzi.
                                   Tim Hutchinson.
                                   Susan Collins.
                                   John Warner.
                                   Mitch McConnell.
                                   Edward M. Kennedy.
                                   Chris Dodd.
                                   Paul Wellstone.
                                   Jack Reed.
                                Managers on the Part of the Senate.

                                
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