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


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[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.

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