    [105th Congress Public Law 220]
    [From the U.S. Government Publishing Office]

    <DOC>
    [DOCID: f:publ220.105]

    [[Page 935]]

                        WORKFORCE INVESTMENT ACT OF 1998

    [[Page 112 STAT.936]]

    Public Law 105-220
    105th Congress

                                     An Act

    To consolidate, coordinate, and improve employment, training, literacy,
                                      and
     vocational rehabilitation programs in the United States, and for other
                purposes. <<NOTE: Aug. 7, 1998 -  [H.R. 1385]>>

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

    SECTION 1. SHORT TITLE; TABLE OF CONTENTS. <<NOTE: Workforce Investment
                Act of 1998.>>

        (a) <<NOTE: 20 USC 9201 note.>>  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. <<NOTE: 29 USC 2801.>>  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.

    [[Page 112 STAT.937]]

                              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.

    [[Page 112 STAT.938]]

    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.

    [[Page 112 STAT.939]]

                           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. <<NOTE: 29 USC 2801.>> 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 one 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.

    [[Page 112 STAT.940]]

                (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--

    [[Page 112 STAT.941]]

                        (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 one 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 one
                    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.

    [[Page 112 STAT.942]]

                (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--

    [[Page 112 STAT.943]]

                        (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

    [[Page 112 STAT.944]]

            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

    [[Page 112 STAT.945]]

            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. <<NOTE: 29 USC 2811.>>  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. <<NOTE: Establishment. 29 USC 2821.>>  STATE WORKFORCE
                INVESTMENT BOARDS.

        (a) In General.--The Governor of a State shall establish a State
    workforce investment board to assist in the development

    [[Page 112 STAT.946]]

    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).

    [[Page 112 STAT.947]]

        (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--

    [[Page 112 STAT.948]]

                        (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. <<NOTE: 29 USC 2822.>>  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--

    [[Page 112 STAT.949]]

                        (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

    [[Page 112 STAT.950]]

                        (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;

    [[Page 112 STAT.951]]

                        (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. <<NOTE: 29 USC 2831.>>  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.

    [[Page 112 STAT.952]]

                              (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--

    [[Page 112 STAT.953]]

                              (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.

    [[Page 112 STAT.954]]

        (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. <<NOTE: 29 USC 2832.>>  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

    [[Page 112 STAT.955]]

            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.--

    [[Page 112 STAT.956]]

                        (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

    [[Page 112 STAT.957]]

                    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

    [[Page 112 STAT.958]]

                                    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

    [[Page 112 STAT.959]]

    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.-- <<NOTE: Applicability.>> 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.

    [[Page 112 STAT.960]]

        (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.

    [[Page 112 STAT.961]]

        (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); and
                        (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. <<NOTE: 29 USC 2833.>>  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

    [[Page 112 STAT.962]]

            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.

    [[Page 112 STAT.963]]

              CHAPTER 3--WORKFORCE INVESTMENT ACTIVITIES PROVIDERS

    SEC. 121. <<NOTE: 29 USC 2841.>>  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) <<NOTE: Contracts.>>  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

    [[Page 112 STAT.964]]

                              (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

    [[Page 112 STAT.965]]

            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. <<NOTE: 29 USC 2842.>>  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

    [[Page 112 STAT.966]]

                              (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,

    [[Page 112 STAT.967]]

                          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

    [[Page 112 STAT.968]]

                    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;

    [[Page 112 STAT.969]]

                              (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.-- <<NOTE: Records.>>
                (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).

    [[Page 112 STAT.970]]

                (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) <<NOTE: Procedures.>>  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

    [[Page 112 STAT.971]]

    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. <<NOTE: 29 USC 2843.>>  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. <<NOTE: 29 USC 2851.>>  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. <<NOTE: 29 USC 2852.>>  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).

    [[Page 112 STAT.972]]

        (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) <<NOTE: Territories.>>  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,

    [[Page 112 STAT.973]]

                                    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

    [[Page 112 STAT.974]]

                                        (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.

    [[Page 112 STAT.975]]

                (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.--

    [[Page 112 STAT.976]]

                (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. <<NOTE: 29 USC 2853.>>  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.--

    [[Page 112 STAT.977]]

                              (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

    [[Page 112 STAT.978]]

                    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. <<NOTE: 29 USC 2854.>>  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;

    [[Page 112 STAT.979]]

                (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,

    [[Page 112 STAT.980]]

                    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

    [[Page 112 STAT.981]]

                    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 one 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
                    one or more grade levels below the grade level
                    appropriate to the age of the individuals.
                        (D) Individuals who are pregnant or parenting.

    [[Page 112 STAT.982]]

                        (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. <<NOTE: 29 USC 2861.>>  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.

    [[Page 112 STAT.983]]

    SEC. 132. <<NOTE: 29 USC 2862.>>  STATE ALLOTMENTS.

        (a) <<NOTE: Grants.>>  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

    [[Page 112 STAT.984]]

                                    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.

    [[Page 112 STAT.985]]

                                        (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.

    [[Page 112 STAT.986]]

                              (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

    [[Page 112 STAT.987]]

            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. <<NOTE: 29 USC 2863.>>  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.--

    [[Page 112 STAT.988]]

                        (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) <<NOTE: Effective date.>>  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

    [[Page 112 STAT.989]]

            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

    [[Page 112 STAT.990]]

            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. <<NOTE: 29 USC 2864.>>  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

    [[Page 112 STAT.991]]

                          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;

    [[Page 112 STAT.992]]

                              (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);

    [[Page 112 STAT.993]]

                        (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 one 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 one 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
                                    one 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.

    [[Page 112 STAT.994]]

                        (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

    [[Page 112 STAT.995]]

                              (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.

    [[Page 112 STAT.996]]

                (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;

    [[Page 112 STAT.997]]

                              (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

    [[Page 112 STAT.998]]

                                    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 one 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

    [[Page 112 STAT.999]]

                    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. <<NOTE: 29 USC 2871.>>  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

    [[Page 112 STAT.1000]]

                          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.

    [[Page 112 STAT.1001]]

                              (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
                          4th 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 4th
                          and 5th 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.

    [[Page 112 STAT.1002]]

                          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

    [[Page 112 STAT.1003]]

                    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) <<NOTE: Publication.>>  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) <<NOTE: Reports.>>  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) <<NOTE: Guidelines.>>  In general.--Using funds made
            available under this subtitle, the Governor, in coordination
            with local boards and

    [[Page 112 STAT.1004]]

            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.--

    [[Page 112 STAT.1005]]

                        (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) <<NOTE: Deadlines.>>  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).

    [[Page 112 STAT.1006]]

                (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. <<NOTE: 29 USC 2872.>>  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. <<NOTE: 29 USC 2881.>>  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. <<NOTE: 29 USC 2882.>>  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

    [[Page 112 STAT.1007]]

            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. <<NOTE: 29 USC 2883.>>  ESTABLISHMENT.

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

    SEC. 144. <<NOTE: 29 USC 2884.>>  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 one 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. <<NOTE: 29 USC 2885.>>  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--

    [[Page 112 STAT.1008]]

                        (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) <<NOTE: Contracts.>>  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;

    [[Page 112 STAT.1009]]

                        (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.

    [[Page 112 STAT.1010]]

                (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. <<NOTE: 29 USC 2886.>>  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 one
            additional year; or
                (2) as the Secretary may authorize in a special case.

    SEC. 147. <<NOTE: 29 USC 2887.>>  JOB CORPS CENTERS.

        (a) Operators and Service Providers.--
                (1) Eligible entities.--
                        (A) <<NOTE: Contracts.>>  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;

    [[Page 112 STAT.1011]]

                                        (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. <<NOTE: 29 USC 2888.>>  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

    [[Page 112 STAT.1012]]

                    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. <<NOTE: 29 USC 2889.>>  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

    [[Page 112 STAT.1013]]

    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. <<NOTE: 29 USC 2890.>>  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. <<NOTE: 29 USC 2891.>>  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. <<NOTE: 29 USC 2892.>>  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.--

    [[Page 112 STAT.1014]]

                (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. <<NOTE: 29 USC 2893.>>  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.

    [[Page 112 STAT.1015]]

    SEC. 154. <<NOTE: 29 USC 2894.>>  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. <<NOTE: 29 USC 2895.>>  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.

    [[Page 112 STAT.1016]]

    SEC. 156. <<NOTE: 29 USC 2896.>>  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. <<NOTE: 29 USC 2897.>>  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. <<NOTE: 29 USC 2898.>>  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

    [[Page 112 STAT.1017]]

    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 Department
            of 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. <<NOTE: Procedures. 29 USC 2899.>>  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

    [[Page 112 STAT.1018]]

                        (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,

    [[Page 112 STAT.1019]]

                    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 post-
                    secondary 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 post-
            secondary 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;

    [[Page 112 STAT.1020]]

                (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) <<NOTE: Federal Register, publication.>>  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. <<NOTE: 29 USC 2900.>>  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

    [[Page 112 STAT.1021]]

            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. <<NOTE: 29 USC 2901.>>  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. <<NOTE: 29 USC 2911.>>  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:

    [[Page 112 STAT.1022]]

                (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 <<NOTE: Grants. Contracts.>> 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

    [[Page 112 STAT.1023]]

    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

    [[Page 112 STAT.1024]]

                    (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) <<NOTE: Establishment.>>  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 one 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

    [[Page 112 STAT.1025]]

    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. <<NOTE: Grants. Contracts. 29 USC 2912.>>  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.

    [[Page 112 STAT.1026]]

                        (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 to 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, followup 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--

    [[Page 112 STAT.1027]]

                        (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. <<NOTE: Grants. Contracts. 29 USC 2913.>>  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.

    [[Page 112 STAT.1028]]

                (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. <<NOTE: 29 USC 2914.>>  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--

    [[Page 112 STAT.1029]]

                (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.--

    [[Page 112 STAT.1030]]

                (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. <<NOTE: 29 USC 2915.>>  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 carry
            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).

    [[Page 112 STAT.1031]]

    SEC. 171. <<NOTE: 29 USC 2916.>>  DEMONSTRATION, PILOT, MULTISERVICE,
                RESEARCH, AND MULTISTATE PROJECTS.

        (a) Strategic Plan.--
                (1) <<NOTE: Federal Register, publication.>>  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) <<NOTE: Grants. Contracts.>>  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,

    [[Page 112 STAT.1032]]

                    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) <<NOTE: Grants. Contracts.>>  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.--

    [[Page 112 STAT.1033]]

                              (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

    [[Page 112 STAT.1034]]

                                        (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. <<NOTE: 29 USC 2917.>>  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.

    [[Page 112 STAT.1035]]

        (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) <<NOTE: Deadlines.>>  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. <<NOTE: 29 USC 2918.>>  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.

    [[Page 112 STAT.1036]]

                        (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) <<NOTE: Publication.>>  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

    [[Page 112 STAT.1037]]

                    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. <<NOTE: 29 USC 2919.>>  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);

    [[Page 112 STAT.1038]]

                        (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. <<NOTE: 29 USC 2931.>>  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.).

    [[Page 112 STAT.1039]]

        (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.--

    [[Page 112 STAT.1040]]

                (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) <<NOTE: Deadline.>>  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

    [[Page 112 STAT.1041]]

            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) <<NOTE: Procedures.>>  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. <<NOTE: 29 USC 2932.>>  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.

    [[Page 112 STAT.1042]]

        (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) <<NOTE: Deadline.>>  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) <<NOTE: Deadline.>>  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) <<NOTE: Deadline.>>  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. <<NOTE: 29 USC 2933.>>  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. <<NOTE: 29 USC 2934.>>  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

    [[Page 112 STAT.1043]]

            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).

    [[Page 112 STAT.1044]]

                (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 one 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 <<NOTE: Deadline.>> 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

    [[Page 112 STAT.1045]]

            (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
            in paragraphs (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

    [[Page 112 STAT.1046]]

    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 30 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. <<NOTE: 29 USC 2935.>>  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

    [[Page 112 STAT.1047]]

                              (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) <<NOTE: Guidelines.>>  shall prescribe and maintain
            comparable management information systems, in accordance with
            guidelines that shall

    [[Page 112 STAT.1048]]

            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
            otherwiseallowable 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. <<NOTE: 29 USC 2936.>>  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

    [[Page 112 STAT.1049]]

    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) <<NOTE: Applicability.>>  Additional Requirement.--The
    provisions of section 187 shall apply to any final action of the
    Secretary under this section.

    SEC. 187. <<NOTE: 29 USC 2937.>>  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. <<NOTE: 29 USC 2938.>>  NONDISCRIMINATION.

        (a) In General.--

    [[Page 112 STAT.1050]]

                (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) <<NOTE: Notification.>>  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.

    [[Page 112 STAT.1051]]

        (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) <<NOTE: Deadline.>>  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. <<NOTE: 29 USC 2939.>>  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. <<NOTE: Federal Register, publication.>>  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--

    [[Page 112 STAT.1052]]

                (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

    [[Page 112 STAT.1053]]

    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) <<NOTE: Deadline.>>  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) <<NOTE: Deadline.>>  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;

    [[Page 112 STAT.1054]]

                              (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. <<NOTE: Effective date. 29 USC 2940.>>  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 the ``Workforce Investment
    Act of 1998.''.

    SEC. 191. <<NOTE: 29 USC 2941.>>  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. <<NOTE: 29 USC 2942.>>  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

    [[Page 112 STAT.1055]]

            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. <<NOTE: 29 USC 2943.>>  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

    [[Page 112 STAT.1056]]

    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. <<NOTE: 29 USC 2944.>>  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

    [[Page 112 STAT.1057]]

            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. <<NOTE: 29 USC 2945.>>  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.
                (6) The Secretary shall not provide financial assistance for
            any program under this title that involves political activities.
                (7)(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

    [[Page 112 STAT.1058]]

                        (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.
                (8)(A) <<NOTE: Notification.>>  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.
                (9)(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.
                (10) No funds available under this title may be used for
            public service employment except as specifically authorized
            under this title.
                (11) 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.
                (12) Nothing in this title shall be construed to provide an
            individual with an entitlement to a service under this title.
                (13) 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 affect 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).

    [[Page 112 STAT.1059]]

                (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) <<NOTE: 49 USC 42101 et seq.>>  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) <<NOTE: 29 USC 2301 note.>>  Immediate repeals.--The
            repeals made by subsection (a) shall take effect on the date of
            enactment of this Act.
                (2) Subsequent repeals.--
                        (A) <<NOTE: 42 USC 11421 note.>>  Stewart b.
                    mckinney homeless assistance act.--The repeal made by
                    subsection (b)(1) shall take effect on July 1, 1999.
                        (B) <<NOTE: 29 USC 1501 note.>>  Job training
                    partnership act.--The repeal made by subsection (b)(2)
                    shall take effect on July 1, 2000.

    SEC. 199A. <<NOTE: 29 USC 2940 note.>>  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) <<NOTE: Deadline.>>  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-- <<NOTE: Adult Education and Family Literacy Act. Inter-
    governmental relations.>> ADULT EDUCATION AND LITERACY

    SEC. 201. <<NOTE: 20 USC 9201 note.>>  SHORT TITLE.

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

    SEC. 202. <<NOTE: 20 USC 9201.>>  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;

    [[Page 112 STAT.1060]]

                (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. <<NOTE: 20 USC 9202.>>  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.

    [[Page 112 STAT.1061]]

                (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 one
                    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.

    [[Page 112 STAT.1062]]

                (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. <<NOTE: 20 USC 9203.>>  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. <<NOTE: 20 USC 9204.>>  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. <<NOTE: 20 USC 9211.>>  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; and
                        (B) $250,000, in the case of any other eligible
                    agency.

    [[Page 112 STAT.1063]]

                (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

    [[Page 112 STAT.1064]]

                    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. <<NOTE: 20 USC 9212.>>  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

    [[Page 112 STAT.1065]]

                          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

    [[Page 112 STAT.1066]]

                          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) <<NOTE: Publication.>>  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. <<NOTE: 20 USC 9221.>>  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. <<NOTE: 20 USC 9222.>>  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.--

    [[Page 112 STAT.1067]]

                (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. <<NOTE: 20 USC 9223.>>  STATE LEADERSHIP ACTIVITIES.

        (a) In General.--Each eligible agency shall use funds made available
    under section 222(a)(2) for one 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.

    [[Page 112 STAT.1068]]

                (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. <<NOTE: 20 USC 9224.>>  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 one 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;

    [[Page 112 STAT.1069]]

                (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. <<NOTE: 20 USC 9225.>>  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;

    [[Page 112 STAT.1070]]

                (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. <<NOTE: 20 USC 9241.>>  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 one or
    more programs that provide services or instruction in one 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

    [[Page 112 STAT.1071]]

    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.

    [[Page 112 STAT.1072]]

    SEC. 232. <<NOTE: 20 USC 9242.>>  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. <<NOTE: 20 USC 9243.>>  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. <<NOTE: 20 USC 9251.>>  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

    [[Page 112 STAT.1073]]

                          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. <<NOTE: 20 USC 9252.>>  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

    [[Page 112 STAT.1074]]

            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
            theimprovement 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;

    [[Page 112 STAT.1075]]

                        (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) <<NOTE: President.>>  In general.--There shall
                    be a National Institute for Literacy Advisory Board (in
                    this section referred to

    [[Page 112 STAT.1076]]

                    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 one-third 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.--

    [[Page 112 STAT.1077]]

                (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.

    [[Page 112 STAT.1078]]

    SEC. 243. <<NOTE: 20 USC 9253.>>  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 qualify 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;

    [[Page 112 STAT.1079]]

                              (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''.

    [[Page 112 STAT.1080]]

                        (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.''.

    [[Page 112 STAT.1081]]

        (b) Conforming Amendments.--Section 508(b)(1) of the Unemployment
    Compensation Amendments of 1976 (42 U.S.C. 603a(b)(1)) <<NOTE: 42 USC
    655a.>> 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.'';

    [[Page 112 STAT.1082]]

                (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. <<NOTE: 29 USC 49l-2.>>  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

    [[Page 112 STAT.1083]]

                              ``(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 in
                    subparagraphs (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

    [[Page 112 STAT.1084]]

                    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) <<NOTE: Procedures.>>  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

    [[Page 112 STAT.1085]]

    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) <<NOTE: Reports.>>  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--

    [[Page 112 STAT.1086]]

                        ``(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
                    complementary, 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. <<NOTE: 29 USC 49a note.>>  EFFECTIVE DATE.

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

    [[Page 112 STAT.1087]]

                    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-- <<NOTE: Twenty-First Century Workforce Commission Act. 29
    USC 2701 note.>> 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;

    [[Page 112 STAT.1088]]

                (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) <<NOTE: President. Congress.>>  Composition.--
                        (A) In general.--The Commission shall be composed of
                    15 voting members, of which--
                              (i) five members shall be appointed by the
                          President;
                              (ii) five members shall be appointed by the
                          Majority Leader of the Senate; and
                              (iii) five members shall be appointed by the
                          Speaker of the House of Representatives.
                        (B) Governmental representatives.--Of the members
                    appointed under this subsection, three members shall be
                    representatives of the governments of States and
                    political subdivisions of States, one of whom shall be
                    appointed by the President, one of whom shall be
                    appointed by the Majority Leader of the Senate, and one
                    of whom shall be appointed by the Speaker of the House
                    of Representatives.
                        (C) Educators.--Of the members appointed under this
                    subsection, three shall be educators who are selected
                    from among elementary, secondary, vocational, and
                    postsecondary educators--

    [[Page 112 STAT.1089]]

                              (i) one of whom shall be appointed by the
                          President;
                              (ii) one of whom shall be appointed by the
                          Majority Leader of the Senate; and
                              (iii) one 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, eight shall be
                          representatives of business entities (at least
                          three of which shall be individuals who are
                          employed by noninformation technology business
                          entities), two of whom shall be appointed by the
                          President, three of whom shall be appointed by the
                          Majority Leader of the Senate, and three 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, one 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 two nonvoting members, of which--
                              (i) one member shall be an officer or employee
                          of the Department of Labor, who shall be appointed
                          by the President; and
                              (ii) one member shall be an officer or
                          employee of the Department of Education, who shall
                          be appointed by the President.
                (2) <<NOTE: Deadline.>>  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) <<NOTE: Deadline.>>   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 theCommission 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.--

    [[Page 112 STAT.1090]]

                (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) <<NOTE: Deadline.>>   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.

    [[Page 112 STAT.1091]]

        (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.

    [[Page 112 STAT.1092]]

    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) <<NOTE: Effective date. 29 USC 633a note.>>  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-- <<NOTE: Rehabilitation Act Amendments of
    1998.>> REHABILITATION ACT AMENDMENTS OF 1998

    SEC. 401. <<NOTE: 29 USC 701 note.>>  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 <<NOTE: 29 USC 701 note
    prec.>>  is amended by striking ``to establish special
    responsibilities'' and all that follows

    [[Page 112 STAT.1093]]

    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 <<NOTE: 29 USC 701 and note, 702-707,
    709-718, 718a, 718b.>>  is amended by striking the matter preceding
    title I and inserting the following:

                        ``short title; table of contents

        ``Sec. 1. <<NOTE: 29 USC 701 note.>>  (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.  6. Definitions.
    ``Sec.  7. Allotment percentage.
    ``Sec.  8. Nonduplication.
    ``Sec.  9. Application of other laws.
    ``Sec. 10. Administration of the Act.
    ``Sec. 11. Reports.
    ``Sec. 12. Evaluation.
    ``Sec. 13. Information clearinghouse.
    ``Sec. 14. Transfer of funds.
    ``Sec. 15. State administration.
    ``Sec. 16. Review of applications.
    ``Sec. 17. Carryover.
    ``Sec. 18. Client assistance information.
    ``Sec. 19. 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.

    [[Page 112 STAT.1094]]

    ``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.

    [[Page 112 STAT.1095]]

    ``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. <<NOTE: 29 USC 701.>>  (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--

    [[Page 112 STAT.1096]]

                ``(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. <<NOTE: Establishment. President. 29 USC 702.>>  (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

    [[Page 112 STAT.1097]]

    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. <<NOTE: 29 USC 703.>>  (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. <<NOTE: Regulations. 29 USC 704.>>  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.

                                  ``definitions

        ``Sec. 6. <<NOTE: 29 USC 705.>>  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);

    [[Page 112 STAT.1098]]

                        ``(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--

    [[Page 112 STAT.1099]]

                                        ``(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

    [[Page 112 STAT.1100]]

            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

    [[Page 112 STAT.1101]]

                              ``(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) <<NOTE: Regulations.>>  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

    [[Page 112 STAT.1102]]

                        ``(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) <<NOTE: Regulations.>>  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 `inde-
            pendent living services' includes--
                        ``(A) independent living core services; and

    [[Page 112 STAT.1103]]

                        ``(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.--

    [[Page 112 STAT.1104]]

                        ``(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.

    [[Page 112 STAT.1105]]

                              ``(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;

    [[Page 112 STAT.1106]]

                              ``(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 toward 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.--

    [[Page 112 STAT.1107]]

                              ``(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--

    [[Page 112 STAT.1108]]

                              ``(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.--

    [[Page 112 STAT.1109]]

                        ``(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.

    [[Page 112 STAT.1110]]

                ``(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. 7. <<NOTE: 29 USC 706.>>  (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 2 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 50 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. 8. <<NOTE: 29 USC 707.>>  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. 9. <<NOTE: 29 USC 708.>>  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.

    [[Page 112 STAT.1111]]

                           ``administration of the act

        ``Sec. 10. <<NOTE: 29 USC 709.>>  (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) <<NOTE: Regulations.>>  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) <<NOTE: Deadline. Regulations.>>  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) <<NOTE: Appropriation authorization.>>  There are authorized
    to be appropriated to carry out this section such sums as may be
    necessary.

                                    ``reports

        ``Sec. 11. <<NOTE: Deadline. 29 USC 710.>>  (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.

    [[Page 112 STAT.1112]]

        ``(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. 12. <<NOTE: 29 USC 711.>>  (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. <<NOTE: Standards.>>  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.

    [[Page 112 STAT.1113]]

        ``(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) <<NOTE: Appropriation authorization.>>  There are authorized
    to be appropriated to carry out this section such sums as may be
    necessary.

                           ``information clearinghouse

        ``Sec. 13. <<NOTE: Establishment. 29 USC 712.>>  (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. 14. <<NOTE: 29 USC 713.>>  (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.

    [[Page 112 STAT.1114]]

                             ``state administration

        ``Sec. 15. <<NOTE: 29 USC 714.>>  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. 16. <<NOTE: 29 USC 715.>>  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.

                                   ``carryover

        ``Sec. 17. <<NOTE: 29 USC 716.>>  (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
    requirementsapplicable to the program for the fiscal year for which the
    funds were appropriated.

                         ``client assistance information

        ``Sec. 18. <<NOTE: 29 USC 717.>>  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.

    [[Page 112 STAT.1115]]

                     ``traditionally underserved populations

        ``Sec. 19. <<NOTE: 29 USC 718.>>  (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 are denied
            acceptance. Of applicants accepted for service, a larger
            percentage of African-American cases are 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 one
            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 one 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.

    [[Page 112 STAT.1116]]

                        ``(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. <<NOTE: 29 USC 720.>>  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

    [[Page 112 STAT.1117]]

                    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

    [[Page 112 STAT.1118]]

                    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) <<NOTE: Deadline. Federal Register, publication.>>
            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

    [[Page 112 STAT.1119]]

                    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. <<NOTE: 29 USC 721.>>  STATE PLANS.

        ``(a) Plan Requirements.--
                ``(1) In general.--

    [[Page 112 STAT.1120]]

                        ``(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.

    [[Page 112 STAT.1121]]

                        ``(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,

    [[Page 112 STAT.1122]]

                    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,

    [[Page 112 STAT.1123]]

                                    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

    [[Page 112 STAT.1124]]

                    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

    [[Page 112 STAT.1125]]

                    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

    [[Page 112 STAT.1126]]

                          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;

    [[Page 112 STAT.1127]]

                              ``(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

    [[Page 112 STAT.1128]]

                                            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.

    [[Page 112 STAT.1129]]

                        ``(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.

    [[Page 112 STAT.1130]]

                        ``(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

    [[Page 112 STAT.1131]]

                    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--

    [[Page 112 STAT.1132]]

                              ``(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) <<NOTE: Reports.>>  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) <<NOTE: Reports.>>  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. <<NOTE: Reports.>>  The State plan shall
                          provide that the State shall submit

    [[Page 112 STAT.1133]]

                          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,

    [[Page 112 STAT.1134]]

                          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 two 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--

    [[Page 112 STAT.1135]]

                        ``(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) <<NOTE: Regulations.>>  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) <<NOTE: Reports.>>  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

    [[Page 112 STAT.1136]]

                    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;

    [[Page 112 STAT.1137]]

                                        ``(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) <<NOTE: Reports.>>  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 one 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 two agencies that does not meet the requirements
                    in subparagraph (A)(i), or establish one 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) <<NOTE: Reports.>>  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.--

    [[Page 112 STAT.1138]]

                        ``(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) <<NOTE: Notification.>>  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. <<NOTE: 29 USC 722.>>  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 cannot 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

    [[Page 112 STAT.1139]]

                    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
                    determined pursuant to title II or title XVI of the
                    Social Security Act (42 U.S.C. 401 et seq. and 1381 et
                    seq.) shall be--
                              ``(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 one 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

    [[Page 112 STAT.1140]]

                              ``(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,

    [[Page 112 STAT.1141]]

            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

    [[Page 112 STAT.1142]]

                    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;

    [[Page 112 STAT.1143]]

                              ``(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

    [[Page 112 STAT.1144]]

                              ``(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

    [[Page 112 STAT.1145]]

                    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

    [[Page 112 STAT.1146]]

                          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) <<NOTE: Courts.>>  Procedure.--In any
                          action brought under this subparagraph, the
                          court--
                                        ``(I) <<NOTE: Records.>>  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))

    [[Page 112 STAT.1147]]

                    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

    [[Page 112 STAT.1148]]

    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. <<NOTE: 29 USC 723.>>  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;

    [[Page 112 STAT.1149]]

                ``(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;

    [[Page 112 STAT.1150]]

                ``(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

    [[Page 112 STAT.1151]]

            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. <<NOTE: 29 USC 724.>>  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. <<NOTE: 29 USC 725.>>  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;

    [[Page 112 STAT.1152]]

                              ``(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

    [[Page 112 STAT.1153]]

                              ``(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

    [[Page 112 STAT.1154]]

                          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) <<NOTE: Reports.>>  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

    [[Page 112 STAT.1155]]

            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 four 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

    [[Page 112 STAT.1156]]

    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. <<NOTE: 29 USC 726.>>  EVALUATION STANDARDS AND PERFORMANCE
                INDICATORS.

        ``(a) Establishment.--
                ``(1) In general.--
                        ``(A) <<NOTE: Deadline. Publication.>>
                    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) <<NOTE: Effective date.>>  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) <<NOTE: Effective date.>>  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) <<NOTE: Federal Register, publications.>>  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) <<NOTE: Regulations.>>  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,

    [[Page 112 STAT.1157]]

                    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) <<NOTE: Effective date.>>  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. <<NOTE: 29 USC 727.>>  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.

    [[Page 112 STAT.1158]]

                ``(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) <<NOTE: Notification.>>  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,

    [[Page 112 STAT.1159]]

            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) <<NOTE: Regulations.>>  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) <<NOTE: Courts.>>  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. <<NOTE: Records.>>  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.

    [[Page 112 STAT.1160]]

                ``(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. <<NOTE: 29 USC 728.>>  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. <<NOTE: 29 USC 728a.>>  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

    ``SEC. 110. <<NOTE: 29 USC 730.>>  STATE ALLOTMENTS.

        ``(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.

    [[Page 112 STAT.1161]]

        ``(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
    \1/3\ 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) <<NOTE: Deadlines.>>  Not later than 45 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

    [[Page 112 STAT.1162]]

                ``(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.

    ``SEC. 111. <<NOTE: 29 USC 731.>>  PAYMENTS TO STATES.

        ``(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

    [[Page 112 STAT.1163]]

            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.

    ``SEC. 112. <<NOTE: 29 USC 732.>>  CLIENT ASSISTANCE PROGRAM.

        ``(a) <<NOTE: Grants.>>  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;

    [[Page 112 STAT.1164]]

                ``(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 one or more new State agencies or departments or
            results in the merger of the designated State agency with one 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

    [[Page 112 STAT.1165]]

    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) <<NOTE: Regulations.>>  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) <<NOTE: Appropriation authorization.>>  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.

    [[Page 112 STAT.1166]]

          ``Part C--American Indian Vocational Rehabilitation Services

    ``SEC. 121. <<NOTE: 29 USC 741.>>  VOCATIONAL REHABILITATION SERVICES
                GRANTS.

        ``(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.

    [[Page 112 STAT.1167]]

         ``Part D--Vocational Rehabilitation Services Client Information

    ``SEC. 131. <<NOTE: 29 USC 751.>>  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. <<NOTE: 29 USC 760.>>  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--

    [[Page 112 STAT.1168]]

                        ``(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. <<NOTE: 29 USC 761.>>  (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. <<NOTE: Establishment. 29 USC 762.>>  (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

    [[Page 112 STAT.1169]]

                ``(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

    [[Page 112 STAT.1170]]

            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 one 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

    [[Page 112 STAT.1171]]

                ``(D) disseminating through one 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) <<NOTE: Regulations.>>  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) <<NOTE: Deadlines.>>  The Director shall--
                ``(A) <<NOTE: Federal Register, publication.>>  by October
            1, 1998, and every fifth October 1 thereafter, prepare and
            publish in the Federal Register for public comment a draft of a
            5-year plan that outlines priorities for rehabilitation
            research, demonstration projects, training, and related
            activities and explains the basis for such priorities;

    [[Page 112 STAT.1172]]

                ``(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) <<NOTE: Reports.>>  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

    [[Page 112 STAT.1173]]

    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) <<NOTE: Grants. Contracts.>>  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) <<NOTE: Grants.>>  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. <<NOTE: Establishment. 29 USC 763.>>  (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) <<NOTE: Reports.>>  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. <<NOTE: 29 USC 764.>>  (a)(1) To the extent consistent
    with priorities established in the 5-year plan described in section
    202(h), the Director

    [[Page 112 STAT.1174]]

    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

    [[Page 112 STAT.1175]]

                ``(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) <<NOTE: Grants.>>  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.

    [[Page 112 STAT.1176]]

        ``(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
    practicalapplications 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 Federal and State law; and
                ``(ii) demonstrate the ability to carry out the training
            activities either directly or through another entity that can
            provide such training.

        ``(L) <<NOTE: Grants.>>  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,

    [[Page 112 STAT.1177]]

                    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.

    [[Page 112 STAT.1178]]

                ``(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 workforce, 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) <<NOTE: Reports.>>  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

    [[Page 112 STAT.1179]]

            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.

    [[Page 112 STAT.1180]]

        ``(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 workforce.
        ``(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;

    [[Page 112 STAT.1181]]

                ``(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

    [[Page 112 STAT.1182]]

                ``(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. <<NOTE: 29 USC 765.>>  (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

    [[Page 112 STAT.1183]]

                    fewer number of years as will provide for the expiration
                    of terms on a staggered basis.
                ``(2) Number of terms.--No member of the Council may serve
            more than two consecutive full terms. Members may serve after
            the expiration of their terms until their successors have taken
            office.

        ``(e) Vacancies.--Any vacancy occurring in the membership of the
    Council shall be filled in the same manner as the original appointment
    for the position being vacated. The vacancy shall not affect the power
    of the remaining members to execute the duties of the Council.
        ``(f ) Payment and Expenses.--
                ``(1) Payment.--Each member of the Council who is not an
            officer or full-time employee of the Federal Government shall
            receive a payment of $150 for each day (including travel time)
            during which the member is engaged in the performance of duties
            for the Council. All members of the Council who are officers or
            full-time employees of the United States shall serve without
            compensation in addition to compensation received for their
            services as officers or employees of the United States.
                ``(2) Travel expenses.--Each member of the Council may
            receive travel expenses, including per diem in lieu of
            subsistence, as authorized by section 5703 of title 5, United
            States Code, for employees serving intermittently in the
            Government service, for each day the member is engaged in the
            performance of duties away from the home or regular place of
            business of the member.

        ``(g) Detail of Federal Employees.--On the request of the Council,
    the Secretary may detail, with or without reimbursement, any of the
    personnel of the Department of Education to the Council to assist the
    Council in carrying out its duties. Any detail shall not interrupt or
    otherwise affect the civil service status or privileges of the Federal
    employee.
        ``(h) Technical Assistance.--On the request of the Council, the
    Secretary shall provide such technical assistance to the Council as the
    Council determines to be necessary to carry out its duties.
        ``(i) Termination.--Section 14 of the Federal Advisory Committee Act
    (5 U.S.C. App.) shall not apply with respect to the Council.''.

    SEC. 406. <<NOTE: Grants. Contracts.>>  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. <<NOTE: 29 USC 771.>>  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

    [[Page 112 STAT.1184]]

            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. <<NOTE: 29 USC 772.>>  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;

    [[Page 112 STAT.1185]]

                        ``(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

    [[Page 112 STAT.1186]]

                    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 have specific
                                    impediments to rehabilitation, including
                                    individuals who are members of
                                    populations that are unserved or
                                    underserved by programs under this Act;
                                        ``(II) job development and job
                                    placement services to individuals with
                                    disabilities;
                                        ``(III) supported employment
                                    services, including services of
                                    employment specialists for individuals
                                    with disabilities;
                                        ``(IV) specialized services for
                                    individuals with significant
                                    disabilities; or
                                        ``(V) recreation for individuals
                                    with disabilities;
                              ``(iii) projects to train personnel in other
                          fields contributing to the rehabilitation of
                          individuals with disabilities; and
                              ``(iv) projects to train personnel in the use,
                          applications, and benefits of rehabilitation
                          technology.
                ``(2) Application.--No grant shall be awarded or contract
            entered into under this subsection unless the applicant has
            submitted to the Commissioner an application at such time, in
            such form, in accordance with such procedures, and including
            such information as the Secretary may require, including--
                        ``(A) a description of how the designated State unit
                    or units will participate in the project to be funded
                    under the grant or contract, including, as appropriate,
                    participation on advisory committees, as practicum
                    sites, in curriculum development, and in other ways so
                    as to build closer relationships between the applicant
                    and the designated State unit and to encourage students
                    to pursue careers in public vocational rehabilitation
                    programs;
                        ``(B) the identification of potential employers that
                    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

    [[Page 112 STAT.1187]]

                    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

    [[Page 112 STAT.1188]]

    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. <<NOTE: Reports.>>  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

    [[Page 112 STAT.1189]]

            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

    [[Page 112 STAT.1190]]

                    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. <<NOTE: 29 USC 773.>>  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.

    [[Page 112 STAT.1191]]

                ``(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 one 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

    [[Page 112 STAT.1192]]

            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 one 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.

    [[Page 112 STAT.1193]]

                              ``(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,

    [[Page 112 STAT.1194]]

                    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

    [[Page 112 STAT.1195]]

                    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. <<NOTE: 29 USC 774.>>  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).

    [[Page 112 STAT.1196]]

                ``(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. <<NOTE: 29 USC 775.>>  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

    [[Page 112 STAT.1197]]

                    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. <<NOTE: 29 USC 776.>>  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

    [[Page 112 STAT.1198]]

    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. <<NOTE: President. 29 USC 780.>>  (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.

    [[Page 112 STAT.1199]]

        ``(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) <<NOTE: President.>>  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. <<NOTE: 29 USC 781.>>  (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

    [[Page 112 STAT.1200]]

            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) <<NOTE: Deadline. Reports.>>  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. <<NOTE: 29 USC 782.>>  (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. <<NOTE: 29 USC 783.>>  (a)(1) The Chairperson of the
    National Council may appoint and remove, without regard to the
    provisions of title 5,

    [[Page 112 STAT.1201]]

    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. <<NOTE: 29 USC 784.>>  (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.

    [[Page 112 STAT.1202]]

        ``(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. <<NOTE: 29 USC 785.>>  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:

    [[Page 112 STAT.1203]]

                ``(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

    [[Page 112 STAT.1204]]

                    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) <<NOTE: Deadline. Publication.>>  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) <<NOTE: Deadlines. Regulations.>>  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

    [[Page 112 STAT.1205]]

            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) <<NOTE: Deadline. Reports.>>  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) <<NOTE: Deadlines.>>  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

    [[Page 112 STAT.1206]]

    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) <<NOTE: Effective date.>>  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 sections 501 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

    [[Page 112 STAT.1207]]

            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 \1/3\ of 1 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 \1/3\ of 1 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

    [[Page 112 STAT.1208]]

                    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;

    [[Page 112 STAT.1209]]

                ``(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) <<NOTE: Procedures.>>  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

    [[Page 112 STAT.1210]]

    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-- <<NOTE: Employment Opportunities for Individuals With
       Disabilities Act.>> EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS WITH
    DISABILITIES

                                  ``short title

        ``Sec. 601. <<NOTE: 29 USC 701 note.>>  This title may be cited as
    the `Employment Opportunities for Individuals With Disabilities Act'.

                        ``Part A--Projects With Industry

                            ``projects with industry

        ``Sec. 611. <<NOTE: 29 USC 795.>>  (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;

    [[Page 112 STAT.1211]]

                              ``(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) <<NOTE: Contracts.>>  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

    [[Page 112 STAT.1212]]

    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) <<NOTE: Standards.>>  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) <<NOTE: Grants.>>  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,

    [[Page 112 STAT.1213]]

    Indian tribes, or tribal organizations, that are currently unserved or
    underserved by projects.
        ``(f )(1) <<NOTE: Federal Register, publication.>>  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) <<NOTE: Reports.>>  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) <<NOTE: Reports.>>  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).

    [[Page 112 STAT.1214]]

                        ``authorization of appropriations

        ``Sec. 612. <<NOTE: 29 USC 795a.>>  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

                                    ``purpose

        ``Sec. 621. <<NOTE: 29 USC 795g.>>  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.

                                  ``allotments

                ``Sec. 622. <<NOTE: 29 USC 795h.>>  (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
                    \1/3\ of 1 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
                    \1/3\ of 1 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.

    [[Page 112 STAT.1215]]

                           ``availability of services

        ``Sec. 623. <<NOTE: 29 USC 795i.>>  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.

                                  ``eligibility

        ``Sec. 624. <<NOTE: 29 USC 795j.>>  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.

                                  ``state plan

        ``Sec. 625. <<NOTE: 29 USC 795k.>>  (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--

    [[Page 112 STAT.1216]]

                        ``(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.

                                  ``restriction

        ``Sec. 626. <<NOTE: 29 USC 795l.>>  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.

                               ``savings provision

        ``Sec. 627. <<NOTE: 29 USC 795m.>>  (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

    [[Page 112 STAT.1217]]

    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.

                        ``authorization of appropriations

        ``Sec. 628. <<NOTE: 29 USC 795n.>>  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. <<NOTE: 29 USC 796.>>  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.

    [[Page 112 STAT.1218]]

    ``SEC. 702. <<NOTE: 29 USC 796a.>>  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. <<NOTE: 29 USC 796b.>>  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. <<NOTE: 29 USC 796c.>>  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.

    [[Page 112 STAT.1219]]

        ``(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) <<NOTE: Records.>>  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

    [[Page 112 STAT.1220]]

    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) <<NOTE: Notification.>>  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) <<NOTE: Records.>>  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) <<NOTE: Reports.>>  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. <<NOTE: 29 USC 796d.>>  STATEWIDE INDEPENDENT LIVING
                COUNCIL.

        ``(a) Establishment.--To be eligible to receive financial assistance
    under this chapter, each State shall establish a Statewide

    [[Page 112 STAT.1221]]

    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 one or more projects are
                    carried out under section 121, at least one
                    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.

    [[Page 112 STAT.1222]]

                        ``(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) <<NOTE: Reports. Records.>>  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

    [[Page 112 STAT.1223]]

            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. <<NOTE: 29 USC 796d-1.>>  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. <<NOTE: Notification.>>  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

    [[Page 112 STAT.1224]]

            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. <<NOTE: 29 USC 796e.>>  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 \1/3\ of 1 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 \1/3\ of 1 percent

    [[Page 112 STAT.1225]]

                    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 \1/8\ of 1 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. <<NOTE: 29 USC 796e-1.>>  PAYMENTS TO STATES FROM
                ALLOTMENTS.

        ``(a) Payments.--From the allotment of each State for a fiscal year
    under section 711, the State shall be paid the Federal share of the
    expenditures incurred during such year under its State plan approved
    under section 706. Such payments may be made (after necessary
    adjustments on account of previously made overpayments or underpayments)
    in advance or by way of reimbursement, and in such installments and on
    such conditions as the Commissioner may determine.
        ``(b) Federal Share.--
                ``(1) In general.--The Federal share with respect to any
            State for any fiscal year shall be 90 percent of the
            expenditures incurred by the State during such year under its
            State plan approved under section 706.

    [[Page 112 STAT.1226]]

                ``(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. <<NOTE: 29 USC 796e-2.>>  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. <<NOTE: 29 USC 796e-3.>>  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. <<NOTE: 29 USC 796f.>>  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

    [[Page 112 STAT.1227]]

            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

    [[Page 112 STAT.1228]]

                    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 \1/3\ of 1 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 \1/3\ of 1 percent
                          of such sums shall be increased to the greater of
                          the 2 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 \1/3\ of 1
                          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 \1/3\ of 1 percent of such sums shall
                          be increased to the greater of the 2 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 2 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 \1/8\ of 1 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

    [[Page 112 STAT.1229]]

    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. <<NOTE: 29 USC 796f-1.>>  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--

    [[Page 112 STAT.1230]]

                        ``(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. <<NOTE: Notification.>>  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) <<NOTE: Termination date.>>  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

    [[Page 112 STAT.1231]]

            to achieve compliance within 90 days of such notification and
            such plan is approved by the Commissioner.

    ``SEC. 723. <<NOTE: 29 USC 796f-2.>>  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

    [[Page 112 STAT.1232]]

            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;

    [[Page 112 STAT.1233]]

                        ``(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

    [[Page 112 STAT.1234]]

            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. <<NOTE: 29 USC 796f-3.>>  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. <<NOTE: 29 USC 796f-4.>>  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

    [[Page 112 STAT.1235]]

    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;

    [[Page 112 STAT.1236]]

                ``(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) <<NOTE: Reports. Records.>>  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;

    [[Page 112 STAT.1237]]

                ``(12) <<NOTE: Reports.>>  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) <<NOTE: Reports.>>  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. <<NOTE: 29 USC 796f-5.>>  DEFINITIONS.

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

    ``SEC. 727. <<NOTE: 29 USC 796f-6.>>  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. <<NOTE: 29 USC 796j.>>  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. <<NOTE: 29 USC 796k.>>  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.--

    [[Page 112 STAT.1238]]

                ``(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

    [[Page 112 STAT.1239]]

            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

    [[Page 112 STAT.1240]]

                                        ``(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 \1/3\ of 1 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

    [[Page 112 STAT.1241]]

                    agrees that the grant is subject to the same conditions
                    as grants made under subsection (a).

    ``SEC. 753. <<NOTE: 29 USC 796l.>>  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. <<NOTE: 29 USC 1908.>>  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) <<NOTE: Applicability.>>  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

    [[Page 112 STAT.1242]]

    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. <<NOTE: 20 USC 9271.>>  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.--

    [[Page 112 STAT.1243]]

                (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 one
            or more of the activities set forth in subparagraphs (A) through
            (D) of paragraph (2) and may cover one 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--

    [[Page 112 STAT.1244]]

                        (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. <<NOTE: 20 USC 9272.>>  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. <<NOTE: 20 USC 9273.>>  INCENTIVE GRANTS.

        (a) <<NOTE: Effective date.>>  In General.--Beginning on July 1,
    2000, the Secretary shall award a grant to each State that exceeds the
    State adjusted

    [[Page 112 STAT.1245]]

    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 one 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. <<NOTE: 20 USC 9274.>>  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. <<NOTE: 20 USC 9275.>>  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

    [[Page 112 STAT.1246]]

    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 the 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 the 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. <<NOTE: 20 USC 9276.>>  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) <<NOTE: Applicability.>>  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) <<NOTE: Deadlines. Federal Register, publications.>>
    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

    [[Page 112 STAT.1247]]

            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) <<NOTE: Deadline.>>  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. <<NOTE: 20 USC 9201 note.>>  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.

        Approved August 7, 1998.

    LEGISLATIVE HISTORY--H.R. 1385 (S. 1186):
    ---------------------------------------------------------------------------

    HOUSE REPORTS: Nos. 105-93 (Comm. on Education and the Workforce) and
    105-659 (Comm. of Conference).
    SENATE REPORTS: No. 105-109 accompanying S. 1186 (Comm. on Labor and
    Human Resources).
    CONGRESSIONAL RECORD:
                                                            Vol. 143 (1997):
                                        May 16, considered and passed House.
                                                            Vol. 144 (1998):
                                        May 1, 5, considered and passed
                                            Senate, amended.
                                        July 30, Senate agreed to conference
                                            report.
                                        July 31, House agreed to conference
                                            report.
    WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 34 (1998):
                Aug. 7, Presidential remarks.

                                      <all>