I

104TH CONGRESS

1ST SESSION H. R. 1883

To strengthen parental, local, and State control of education in the United

States by eliminating the Department of Education and redefining the

Federal role in education.

IN THE HOUSE OF REPRESENTATIVES

JUNE 16, 1995

Mr. SCARBOROUGH (for himself, Mr. BOEHNER, Mr. CHABOT, Mr.

BROWNBACK, Mr. ARMEY, Mr. DELAY, Mr. COX of California, Ms. MOLINARI, Mr. PAXON, Mr. BARR, Mr. BONO, Mr. CHRISTENSEN, Mr.

FORBES, Mr. FUNDERBURK, Mr. GRAHAM, Mr. HASTINGS of Washington, Mr. HOSTETTLER, Mr. HUTCHINSON, Mr. ISTOOK, Mr. SAM JOHNSON of Texas, Mr. JONES, Mr. METCALF, Mr. MILLER of Florida, Mr.

NETHERCUTT, Mr. RIGGS, Mr. SALMON, Mr. SOUDER, Mr. TALENT, Mr.

BACHUS, Mr. BAKER of California, Mr. BARTLETT of Maryland, Mr.

BARTON of Texas, Mr. BASS, Mr. BRYANT of Tennessee, Mr. BURR, Mr.

BURTON of Indiana, Mr. CAMP, Mr. CALLAHAN, Mr. CHAMBLISS, Mrs.

CHENOWETH, Mr. CANADY of Florida, Mr. CRAPO, Mr. CHRYSLER, Mr.

COBURN, Mr. CONDIT, Mr. COOLEY, Mr. CRANE, Mrs. CUBIN, Mr.

CUNNINGHAM, Mr. DREIER, Mr. DOOLITTLE, Mr. DORNAN, Mr. EMERSON, Mr. ENSIGN, Mr. FOLEY, Mr. GANSKE, Mr. GOSS, Mr.

GUTKNECHT, Mr. HANCOCK, Mr. HASTERT, Mr. HAYWORTH, Mr.

HEFLEY, Mr. HEINEMAN, Mr. HERGER, Mr. HILLEARY, Mr. HOKE, Mr.

HUNTER, Mr. INGLIS of South Carolina, Mr. KASICH, Mr. KING, Mr.

LAHOOD, Mr. LARGENT, Mr. LATHAM, Mr. LEWIS of Kentucky, Mr.

LINDER, Mr. LIVINGSTON, Mr. MANZULLO, Mr. MCCOLLUM, Mr.

MCINTOSH, Mr. MCCRERY, Mr. MICA, Mrs. MYRICK, Mr. NEUMANN, Mr.

NORWOOD, Mr. PARKER, Mr. POMBO, Mr. RADANOVICH, Mr. REGULA,

Mr. ROHRABACHER, Mr. SANFORD, Mrs. SEASTRAND, Mr. SHADEGG,

Mrs. SMITH of Washington, Mr. SMITH of Michigan, Mr. SOLOMON, Mr.

STOCKMAN, Mr. STUMP, Mr. TATE, Mr. TAYLOR of North Carolina, Mr.

THORNBERRY, Mr. TIAHRT, Mr. WATTS of Oklahoma, Mr. WELDON of

Pennsylvania, Mr. WELDON of Florida, Mr. WHITE, Mr. WHITFIELD, and

Mr. WICKER) introduced the following bill; which was referred to the

Committee on Economic and Educational Opportunities, and in addition

to the Committees on the Budget and Government Reform and Oversight,

for a period to be subsequently determined by the Speaker, in each case
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for consideration of such provisions as fall within the jurisdiction of the

committee concerned

A BILL

To strengthen parental, local, and State control of education

in the United States by eliminating the Department of

Education and redefining the Federal role in education.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Back to Basics Edu5 cation Reform Act’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Findings.

Sec. 4. Purposes.

TITLE I—ABOLITION OF DEPARTMENT OF EDUCATION

Sec. 101. Abolition of Department.

Sec. 102. Establishment and sunset of Office of Economic Opportunities in the

Department of Health and Human Services, and transfer of

functions.

Sec. 103. Principal officers.

Sec. 104. Continuation of service of Department officer.

Sec. 105. Reorganization.

Sec. 106. Plan for winding up affairs.

Sec. 107. GAO report.

Sec. 108. Conforming amendments.

Sec. 109. Effective date.

Sec. 110. Limitation on expenditures.

TITLE II—EDUCATION PROGRAMS

Subtitle A—Elementary and Secondary Education

CHAPTER 1—ELEMENTARY AND SECONDARY EDUCATION BLOCK GRANT
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Sec. 201. Goals of elementary and secondary education block grant program.

Sec. 202. Program authorized.

Sec. 203. State eligibility.

Sec. 204. General State requirements.

Sec. 205. Amount of State allotment.

Sec. 206. Local fiscal accountability.

Sec. 207. Participation of children enrolled in private schools.

Sec. 208. Definitions.

Sec. 209. Authorization of appropriations.

CHAPTER 2—OTHER ELEMENTARY AND SECONDARY EDUCATION PROGRAMS

Sec. 210. Amendments and repeals of certain education provisions.

Subtitle B—Conforming Amendments to the Individuals with Disabilities

Education Act

Sec. 211. Amendments to provisions referencing secretary of education and department of education.

Sec. 212. Amendments to definitions.

Sec. 213. Transfer of administering authority to Office of Economic Opportunities.

Sec. 214. Outreach services for certain institutions of higher education.

Subtitle C—Higher Education Programs

CHAPTER 1—ELIMINATION AND REDUCTION OF PROGRAMS

Sec. 221. Repeal of higher education laws.

Sec. 222. Amendment to the Federal Credit Reform Act.

Sec. 223. Sale of FDSL loan portfolios.

Sec. 224. Student loan program; statement of policy.

Sec. 225. Elimination of in-school interest subsidies.

CHAPTER 2—HIGHER EDUCATION BLOCK GRANT

Sec. 231. Purpose.

Sec. 232. Distribution of funds.

Sec. 233. State assurances.

Sec. 234. Use of funds.

Sec. 235. Public disclosure.

Sec. 236. Authorization of appropriations.

Sec. 237. Definitions.

Subtitle D—Miscellaneous Provisions

Sec. 241. Construction.

Sec. 242. Regulations.

Sec. 243. Consolidated application.

Sec. 244. Appropriations.

Sec. 245. Federal civil rights.

TITLE III—GENERAL PROVISIONS

Sec. 301. References.

Sec. 302. Exercise of authorities.

Sec. 303. Savings provisions.

Sec. 304. Transfer of assets.
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Sec. 305. Delegation and assignment.

Sec. 306. Authority of office of management and budget with respect to functions transferred.

Sec. 307. Proposed changes in law.

Sec. 308. Definition of transfer.

Sec. 309. Definitions.

TITLE IV—STATEMENTS OF POLICY

Sec. 401. Statement of policy regarding Federal education funding.

Sec. 402. Statement of policy regarding job training programs.

Sec. 403. Statement of policy regarding Indian education.

1 SEC. 3. FINDINGS.

2 The Congress finds the following:

3 (1) Principles of federalism embodied in the

4 Constitution of the United States entrust authority

5 over issues of educational policy to the States and

6 the people and a Federal Department of Education

7 is inconsistent with such principles.

8 (2) Tradition and experience dictate that the

9 governance and management of schools in the Unit10 ed States are best performed by parents, teachers

11 and communities.

12 (3) The intrusion by the Department of Edu13 cation into education policy has not benefited the

14 quality of education in this nation.

15 (4) The Department of Education has weak16 ened the ability of parents to make essential deci17 sions about their children’s education and has un18 dermined the capacity of communities to govern

19 their schools.
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1 (5) In the 15 years of its existence, the Depart2 ment of Education has grown from 130 programs

3 and a budget of $14 billion to over 240 separately

4 authorized programs which cost almost $32 billion

5 annually. Meanwhile, education performance has

6 stagnated or deteriorated.

7 (6) Since 1980, the year the Federal role in

8 education was elevated to department status, the

9 graduation rate has dropped 1.3 percent. Only 71.2

10 percent of students who enroll in the ninth grade

11 now graduate from high school.

12 (7) The Department of Education has fostered

13 over-regulation, standardization, bureaucratization,

14 and litigation in United States education.

15 (8) The Department of Education expends

16 large amounts of money on its own maintenance and

17 overhead. As an organization, it is inefficient, ill18 managed, and wasteful.

19 (9) Recent tests reflect poor results in mathe20 matics and reading for American students compared

21 with students from other nations.

22 (10) Only through initiatives led by parents and

23 local communities with the power to act can the

24 United States elevate educational performance to25 ward an acceptable level.
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1 (11) The Department of Education has been

2 hostile to many promising reform ideas.

3 SEC. 4. PURPOSES.

4 The purposes of this Act are—

5 (1) to improve the quality of elementary and

6 secondary and higher education programs in the Na7 tion;

8 (2) to return the responsibility and authority

9 for education to parents, teachers, communities, stu10 dents, and States, and provide them greater control

11 over education spending;

12 (3) to ensure that the Federal Government does

13 not overregulate and interfere in the decisionmaking

14 of parents, local communities, teachers, and students

15 regarding education; and

16 (4) to ensure that Americans are able to com17 pete in the global economy of the 21st century.

18 TITLE I—ABOLITION OF

19 DEPARTMENT OF EDUCATION

20 SEC. 101. ABOLITION OF DEPARTMENT.

21 The Department of Education is abolished.
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1 SEC. 102. ESTABLISHMENT AND SUNSET OF OFFICE OF

2 ECONOMIC OPPORTUNITIES IN THE DEPART3 MENT OF HEALTH AND HUMAN SERVICES,

4 AND TRANSFER OF FUNCTIONS.

5 (a) ESTABLISHMENT OF OFFICE.—There is estab6 lished in the Department of Health and Human Services

7 the Office of Economic Opportunities.

8 (b) DIRECTOR.—

9 (1) IN GENERAL.—There shall be at the head

10 of the Office a Director for Economic Opportunities,

11 who shall be appointed by the President and con12 firmed with the advice and consent of the Senate.

13 The Office shall be administered under the super14 vision and direction of the Assistant Secretary for

15 the Administration for Families and Children. The

16 Director for Economic Opportunities shall receive

17 compensation at the rate prescribed for level V of

18 the Executive Schedule under section 5315 of title

19 5, United States Code.

20 (2) INITIAL APPOINTMENT OF ADMINIS21 TRATOR.—Notwithstanding any other provision of

22 this Act or any other law, the President may, at any

23 time after the date of the enactment of this Act, ap24 point an individual to serve as Director of Economic

25 Opportunities, as such position is established under

26 paragraph (1). An appointment under this para-
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1 graph may not be construed to affect the position of

2 Secretary of Education or the authority of the Sec3 retary before the effective date specified in section

4 109(a).

5 (c) DUTIES.—The Director shall be responsible for—

6 (1) the administration of all functions of the

7 Office pursuant to section 102 and other provisions

8 of law;

9 (2) the administration and wind-up of any out10 standing obligations of the Federal Government

11 under any programs terminated or repealed by this

12 Act; and

13 (3) taking such other actions as may be nec14 essary to wind up any outstanding affairs of the De15 partment of Education and the Office.

16 (d) TRANSFER OF FUNCTIONS.—Except as otherwise

17 provided in this Act, the Director shall perform all func18 tions that, immediately before the effective date of this

19 section under section 109(a), were functions of the De20 partment of Education (or any office of the Department)

21 or were performed by the Secretary of Education or any

22 other officer or employee of the Department in the capac23 ity as such officer or employee.

24 (e) ABOLITION OF OFFICE.—The Office and all of

25 its functions are abolished effective upon the expiration
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1 of the authorization for the programs under its jurisdic2 tion.

3 SEC. 103. PRINCIPAL OFFICERS.

4 (a) DIRECTORS.—There shall be in the Office—

5 (1) an Assistant Director of Childhood School6 ing; and

7 (2) an Assistant Director of Advanced School8 ing.

9 (b) APPOINTMENT.—Each of the Assistant Directors

10 in the Office of Economic Opportunities shall be appointed

11 by the Secretary of Health and Human Services.

12 SEC. 104. CONTINUATION OF SERVICE OF DEPARTMENT OF13 FICER.

14 (a) CONTINUATION OF SERVICE OF SECRETARY.—

15 The individual serving as the Secretary of Education on

16 the effective date of this title may serve as Director until

17 the date an individual is appointed under this title to the

18 position of Director, or until the end of the 120-day period

19 provided for in section 3348 of title 5, United States Code

20 (relating to limitations on the period of time a vacancy

21 may be filled temporarily), whichever is earlier.

22 (b) COMPENSATION FOR CONTINUED SERVICE.—Any

23 individual who acts as the Director under subsection (a)

24 after the effective date of this title and before the first

25 appointment of a person to such position after such date
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1 shall be compensated pursuant to section 102(b)(1) for so

2 serving or acting.

3 SEC. 105. REORGANIZATION.

4 The Secretary of Health and Human Services may

5 allocate or reallocate any function of the Office pursuant

6 to this Act among the officers of the Office, and may, in

7 accordance with the transfer of functions by this Act, con8 solidate, alter, or discontinue in the Office any organiza9 tional entities that were entities of the Department of

10 Education, as the Secretary of Health and Human Serv11 ices considers necessary or appropriate. Notwithstanding

12 any other provision of law, the Secretary of Health and

13 Human Services may not transfer any function or person14 nel of the Office to any agency outside of the Office.

15 SEC. 106. PLAN FOR WINDING UP AFFAIRS.

16 Not later than 180 days after the date of the enact17 ment of this Act, the President shall submit to the Con18 gress a plan for winding up the affairs of the Department

19 of Education in accordance with this Act.

20 SEC. 107. GAO REPORT.

21 Not later than 180 days after the date of enactment

22 of this Act, the Comptroller General of the United States

23 shall submit to the Congress a report which shall include

24 recommendations for the most efficient means of achiev25 ing, in accordance with this Act—
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1 (1) the complete abolition of the Department of

2 Education; and

3 (2) the termination or transfer or other con4 tinuation of functions of the Department of Edu5 cation.

6 SEC. 108. CONFORMING AMENDMENTS.

7 (a) PRESIDENTIAL SUCCESSION.—Section 19(d)(1)

8 of title 3, United States Code, is amended by striking

9 ‘‘Secretary of Education,’’.

10 (b) EXECUTIVE DEPARTMENTS.—Section 101 of title

11 5, United States Code, is amended by striking the follow12 ing item:

13 ‘‘The Department of Education.’’.

14 (c) SECRETARY’S COMPENSATION.—Section 5312 of

15 title 5, United States Code, is amended by striking the

16 following item:

17 ‘‘Secretary of Education.’’.

18 (d) COMPENSATION FOR POSITIONS AT LEVEL II.—

19 Section 5313 of title 5, United States Code, is amended

20 by striking the following item:

21 ‘‘Deputy Secretary of Education.’’.

22 (e) COMPENSATION FOR POSITIONS AT LEVEL III.—

23 Section 5314 of title 5, United States Code, is amended

24 by striking the following item:

25 ‘‘Under Secretary of Education.’’;
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1 (f) COMPENSATION FOR POSITIONS AT LEVEL IV.—

2 Section 5315 of title 5, United States Code, is amended—

3 (1) by striking the following items:

4 ‘‘Assistant Secretaries of Education (10).

5 ‘‘General Counsel, Department of Education.

6 ‘‘Inspector General, Department of Edu7 cation.’’;

8 (2) by striking the following item:

9 ‘‘Chief Financial Officer, Department of Edu10 cation.’’; and

11 (3) by striking the following item:

12 ‘‘Liaison for Community and Junior Colleges,

13 Department of Education.’’.

14 (g) COMPENSATION FOR POSITIONS AT LEVEL V.—

15 Section 5316 of title 5, United States Code, is amended

16 by striking the following item:

17 ‘‘Additional officers, Department of Education

18 (4).’’.

19 (h) INSPECTOR GENERAL ACT OF 1978.—The In20 spector General Act of 1978 (5 U.S.C. App.) is

21 amended—

22 (1) in section 9(a)(1), by striking subparagraph

23 (D);

24 (2) in section 11(1), by striking ‘‘Education,’’;

25 and
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1 (3) in section 11(2), by striking ‘‘Education,’’.

2 SEC. 109. EFFECTIVE DATE.

3 Except as otherwise provided, this title shall take ef4 fect on the date that is one year after the date of enact5 ment of this Act.

6 SEC. 110. LIMITATION ON EXPENDITURES.

7 The amount expended by the United States each fis8 cal year for the administration of a function transferred

9 by this Act shall not exceed 70 percent of the total amount

10 expended for the administration of that function during

11 fiscal year 1995.

12 TITLE II—EDUCATION

13 PROGRAMS

14 Subtitle A—Elementary and

15 Secondary Education

16 CHAPTER 1—ELEMENTARY AND

17 SECONDARY EDUCATION BLOCK GRANT

18 SEC. 201. GOALS OF ELEMENTARY AND SECONDARY EDU19 CATION BLOCK GRANT PROGRAM.

20 The Director of the Office of Economic Opportunities

21 under the Administration for Children and Families in the

22 Department of Health and Human Services is authorized

23 to provide the Governor of each State that complies with

24 the requirements of section 203 a grant in an amount de25 termined under section 205.
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1 SEC. 202. PROGRAM AUTHORIZED.

2 Each State shall, subject to the requirements of this

3 Act and appropriations Acts, receive a grant under this

4 subtitle in each fiscal year to carry out the purposes of

5 this subtitle.

6 SEC. 203. STATE ELIGIBILITY.

7 (a) IN GENERAL.—To be eligible to receive a grant

8 under this subtitle, a State shall submit an application to

9 the Director of Economic Opportunities which contains

10 the assurances required by this title. Such application

11 must be submitted at such time, in such form and manner

12 as the Director may reasonably require.

13 (b) ASSURANCES.—Such application shall include the

14 following assurances:

15 (1) IMPROVE EDUCATION.—The Governor shall

16 use funds received to improve education.

17 (2) DISTRIBUTION.—The Governor shall estab18 lish a procedure to distribute funds to local edu19 cational entities or to provide services to children at20 tending local educational entities.

21 (3) ASSURANCES FROM LOCAL EDUCATIONAL

22 ENTITIES.—The Governor shall require a local edu23 cational entity that seeks funds under this title to

24 provide assurances that—

25 (A) funds will be used to improve edu26 cation;
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1 (B) parents, members of the community,

2 and community leaders will be involved in deci3 sionmaking at the local level; and

4 (C) such entity that receives funds under

5 this title will comply with Federal civil rights

6 laws.

7 SEC. 204. GENERAL STATE REQUIREMENTS.

8 (a) FUNDS FOR LOCAL USE.—

9 (1) IN GENERAL.—Not less than 98 percent of

10 the amount of funds received by a State under this

11 title shall be made available to local educational enti12 ties.

13 (2) LOCAL DISCRETION.—A local educational

14 entity that receives funds from a State will have the

15 discretion to spend funds received from the State to

16 develop programs that improve education.

17 (b) ADMINISTRATIVE COSTS.—Not more than 2 per18 cent of funds received under this title may be used by a

19 State or a local educational entity for administrative pur20 poses.

21 SEC. 205. AMOUNT OF STATE ALLOTMENT.

22 (a) IN GENERAL.—Except as provided in subsections

23 (b) and (c), there shall be allotted to each State, which

24 for purposes of this section shall not include the terri25 tories, an amount which bears the same ratio to the
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1 amount of funds appropriated for this title in any fiscal

2 year as the population of children, aged 5 through 17

3 years of age, of such State bears to the population of such

4 children of all the States.

5 (b) STATE MINIMUM.—Of the total amount appro6 priated to carry out this subtitle in any fiscal year each

7 State shall receive not less than one quarter of one percent

8 of such amounts.

9 (c) SET-ASIDE FOR TERRITORIES.—Of the amount

10 allotted under subsection (a), the Director shall allot not

11 more than one quarter of one percent among Puerto Rico,

12 the Commonwealth of the Northern Mariana Islands,

13 American Samoa, Guam, and the Virgin Islands.

14 SEC. 206. LOCAL FISCAL ACCOUNTABILITY.

15 A local educational entity that receives funds from

16 a State under this subtitle in any fiscal year shall be re17 quired to make reasonably available—

18 (1) a proposed budget regarding how such

19 funds shall be used;

20 (2) an accounting of the actual use of such

21 funds at the end of such entity’s fiscal year.

22 SEC. 207. PARTICIPATION OF CHILDREN ENROLLED IN PRI23 VATE SCHOOLS.

24 (a) SECULAR, NEUTRAL, NONIDEOLOGICAL.—Any

25 educational services or other benefits, including materials
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1 and equipment, provided to children enrolled in private

2 schools shall be secular, neutral, and nonideological.

3 (b) BYPASS.—

4 (1) IN GENERAL.—If under law a State is pro5 hibited from providing for the participation under

6 this chapter of eligible children enrolled in private el7 ementary and secondary schools, the Office of Eco8 nomic Opportunities, at the request of the Governor,

9 shall arrange for services for such children to the ex10 tent consistent with the number of eligible children

11 identified under section 205 in a local educational

12 agency who are enrolled in private elementary and

13 secondary schools.

14 (2) EQUITABLE SERVICES.—Services provided

15 under this section shall be equitable in comparison

16 to services and other benefits provided for public

17 school children participating in programs under this

18 chapter.

19 (3) REDUCTION.—The amount of funds appro20 priated to the State pursuant to section 205 shall be

21 reduced by the amount necessary to carry out this

22 section.

23 SEC. 208. DEFINITIONS.

24 Except as otherwise provided, for the purposes of this

25 subtitle, the following terms have the following meanings:
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1 (1) DIRECTOR.—The term ‘‘Director’’ means

2 the Director of Economic Opportunities under the

3 Administration for Children and Families in the De4 partment of Health and Human Services.

5 (2) LOCAL EDUCATIONAL ENTITY.—The term

6 ‘‘local educational entity’’ means a local educational

7 agency or a public or private elementary or second8 ary school.

9 (3) STATE.—The term ‘‘State’’ means any of

10 the several States, the District of Columbia, the

11 Commonwealth of Puerto Rico, the Virgin Islands,

12 American Samoa, Guam, and the Commonwealth of

13 the Northern Mariana Islands.

14 SEC. 209. AUTHORIZATION OF APPROPRIATIONS.

15 There are authorized to be appropriated

16 $9,000,000,000 for each of the fiscal years 1998 through

17 2000 to carry out the programs authorized under this sub18 title.

19 CHAPTER 2—OTHER ELEMENTARY AND

20 SECONDARY EDUCATION PROGRAMS

21 SEC. 210. AMENDMENTS AND REPEALS OF CERTAIN EDU22 CATION PROVISIONS.

23 (a) ELEMENTARY AND SECONDARY EDUCATION ACT

24 OF 1965.—
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1 (1) IN GENERAL.—Titles I, II, III, IV, V, VI,

2 VII, X, XI, XII, XIII, XIV, and parts B and C of

3 title IX of the Elementary and Secondary Education

4 Act of 1965 are repealed.

5 (2) IMPACT AID.—(A) Section 8003 of the Ele6 mentary and Secondary Education Act of 1965 (20

7 U.S.C. 7703) is amended by striking subsection (e)

8 of such section.

9 (B) Except as provided under subparagraph

10 (A), the programs provided under title VIII of the

11 Elementary and Secondary Education Act of 1965

12 shall be administered by the Department of Defense

13 through the Assistant Secretary for Force Manage14 ment Policy.

15 (3) INDIAN EDUCATION.—Part A of title IX of

16 the Elementary and Secondary Education Act of

17 1965 shall be administered by the Department of

18 the Interior through the Assistant Secretary for In19 dian Affairs.

20 (b) GOALS 2000: EDUCATE AMERICA ACT.—Goals

21 2000: Educate America Act is repealed.

22 (c) SCHOOL-TO-WORK OPPORTUNITIES ACT.—The

23 School-to-Work Opportunities Act is repealed.

24 (d) GENERAL EDUCATION PROVISIONS ACT.—Parts

25 D and F, sections 422, 424, 425, 427, 428, 429, 433,
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1 439, and 443, and paragraph (3) of section 431(a) of the

2 General Education Provisions Act are repealed.

3 (e) NATIONAL EDUCATION STATISTICS ACT OF

4 1994.—The National Education Statistics Act of 1994 is

5 repealed.

6 (f) EFFECTIVE DATE.—The repeals and transfers

7 made by subsections (a), (b), (c), (d), and (e) shall take

8 effect on the date that is one year after the date of enact9 ment of this Act.

10 Subtitle B—Conforming Amend11 ments to the Individuals with

12 Disabilities Education Act

13 SEC. 211. AMENDMENTS TO PROVISIONS REFERENCING

14 SECRETARY OF EDUCATION AND DEPART15 MENT OF EDUCATION.

16 (a) TRANSFER OF AUTHORITY FROM SECRETARY OF

17 EDUCATION TO SECRETARY OF HEALTH AND HUMAN

18 SERVICES.—The Individuals with Disabilities Education

19 Act (20 U.S.C. 1400 et seq.) is amended in sections

20 602(a)(14), 611(f), and 684(b)(5) by striking ‘‘Secretary

21 of Education’’ each place such term appears and inserting

22 ‘‘Secretary of Health and Human Services’’.

23 (b) TRANSFER OF AUTHORITY FROM DEPARTMENT

24 OF EDUCATION TO DEPARTMENT OF HEALTH AND

25 HUMAN SERVICES.—The Individuals with Disabilities
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1 Education Act (20 U.S.C. 1400 et seq.) is amended in

2 sections 610 and 621(a)(3) by striking ‘‘Department of

3 Education’’ each place such term appears and inserting

4 ‘‘Department of Health and Human Services’’.

5 SEC. 212. AMENDMENTS TO DEFINITIONS.

6 (a) DEFINITION OF EXCESS COSTS.—Subparagraph

7 (A) of section 602(a)(21) of the Individuals with Disabil8 ities Education Act (20 U.S.C. 1401(a)(21)(A)) is amend9 ed to read as follows:

10 ‘‘(A) amounts received—

11 ‘‘(i) under this part, or

12 ‘‘(ii) under subtitle A of title II of the

13 Back to Basics Education Act, and’’.

14 (b) DEFINITION OF NATIVE LANGUAGE.—Paragraph

15 (22) of section 602(a) of the Individuals with Disabilities

16 Education Act (20 U.S.C. 1401(a)(22)) is amended to

17 read as follows:

18 ‘‘(22) The term ‘native language’, when used

19 with reference to an individual of limited-English

20 proficiency, means the language normally used by

21 the individual, or in the case of an individual aged

22 3 through 21, the language normally used by the

23 parents of the individual.’’.
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1 SEC. 213. TRANSFER OF ADMINISTERING AUTHORITY TO

2 OFFICE OF ECONOMIC OPPORTUNITIES.

3 The Individuals with Disabilities Education Act (20

4 U.S.C. 1400 et seq.) is amended—

5 (1) by striking section 603 and inserting the

6 following:

7 ‘‘OFFICE OF ECONOMIC OPPORTUNITIES

8 ‘‘SEC. 603. The Secretary of Health and Human

9 Services, acting through the Director for Economic Oppor10 tunities, shall administer and carry out this Act. The Of11 fice of Economic Opportunities shall be the principal agen12 cy in the Department of Health and Human Services for

13 administering and carrying out programs and activities

14 concerning the education and training of individuals with

15 disabilities.’’;

16 (2) in section 621(f)(1), by striking ‘‘Office of

17 Special Education Programs’’ and inserting ‘‘Office

18 of Economic Opportunities’’; and

19 (3) in section 685(b)(1), by striking ‘‘Office of

20 Special Education Programs;’’ and inserting ‘‘Office

21 of Economic Opportunities;’’.

22 SEC. 214. OUTREACH SERVICES FOR CERTAIN INSTITU23 TIONS OF HIGHER EDUCATION.

24 Subclause (II) of section 610(j)(2)(C)(ii) of the Indi25 viduals with Disabilities Education Act (20 U.S.C.

26 1409(j)(2)(C)(ii)(II)) is amended to read as follows:
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1 ‘‘(II) institutions of higher education which

2 have an enrollment which includes a substantial

3 percentage of needy students (as determined by

4 the Director) and the average educational and

5 general expenditures of which are low, per full6 time equivalent undergraduate student, in com7 parison with the average educational and gen8 eral expenditures per full-time equivalent under9 graduate student of institutions that offer simi10 lar instruction;’’.

11 Subtitle C—Higher Education

12 Programs

13 CHAPTER 1—ELIMINATION AND

14 REDUCTION OF PROGRAMS

15 SEC. 221. REPEAL OF HIGHER EDUCATION LAWS.

16 (a) IN GENERAL.—Except as provided in subsection

17 (b) and (c), the Higher Education Act of 1965 (20 U.S.C.

18 1001) is repealed effective one year after the date of the

19 enactment of this Act.

20 (b) EXCEPTIONS.—Subsection (a) shall not apply to

21 the following:

22 (1) The first section, containing the short title

23 of such Act.

24 (2) Subpart 1 of part A of title IV, relating to

25 Pell Grants.
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1 (3) Part B of such title, relating to the Federal

2 Family Education Loan Program.

3 (4) Part E of such title, relating to Perkins

4 Loans.

5 (5) Parts F, G, and H of such title, relating to

6 needs analysis, general provisions, and the program

7 integrity triad.

8 (6) Section 1201, relating to definitions.

9 (c) CONTINUING AUTHORITY TO COLLECT LOANS.—

10 Subsection (a) shall not affect the authority of the United

11 States to collect any loan made under any provision re12 pealed by such subsection.

13 (d) PERKINS LOANS.—Section 461(b) of the Higher

14 Education Act of 1965 is amended to read as follows:

15 ‘‘(b) CONTRIBUTIONS DISCONTINUED.—No funds

16 are authorized to be appropriated for fiscal year 1997 or

17 any succeeding year for the purpose of making contribu18 tions to student loan funds established under this part.’’.

19 (e) LIMITATION ON FUNDS FOR HOWARD UNIVER20 SITY.—Section 8 of the Act of March 2, 1867 is

21 amended—

22 (1) by inserting ‘‘(a)’’ after ‘‘SEC. 8.’’; and

23 (2) by adding at the end the following new sub24 section:
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1 ‘‘(b) Notwithstanding subsection (a) and any provi2 sion of the Howard University Endowment Act, the total

3 amount that is authorized to be appropriated pursuant to

4 this section and such Endowment Act shall not exceed the

5 total amount appropriated pursuant to this section and

6 such Endowment Act for fiscal year 1995, and of such

7 total amount—

8 ‘‘(1) not less than 30 percent of the amount ap9 propriated for fiscal year 1998 shall be appropriated

10 for purposes of such Endowment Act;

11 ‘‘(2) not less than 60 percent of the amount ap12 propriated for fiscal year 1999 shall be appropriated

13 for purposes of such Endowment Act; and

14 ‘‘(3) not less than 100 percent of the amount

15 appropriated for fiscal year 2000 shall be appro16 priated for purposes of such Endowment Act.

17 Notwithstanding subsection (a) and any provision of the

18 Howard University Endowment Act, no funds are author19 ized to be appropriated pursuant to this section or such

20 Endowment Act for fiscal year 2001 or any succeeding

21 fiscal year.’’.

22 SEC. 222. AMENDMENT TO THE FEDERAL CREDIT REFORM

23 ACT.

24 (a) AMENDMENT.—Section 502(5)(B) of the Con25 gressional Budget Act is amended to read as follows:
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1 ‘‘(B) The cost of a direct loan shall be the

2 net present value, at the time when the direct

3 loan is disbursed, of the following cash flows for

4 the estimated life of the loan—

5 ‘‘(i) loan disbursements;

6 ‘‘(ii) repayments of principal;

7 ‘‘(iii) payments of interest and other

8 payments by or to the Government over

9 the life of the loan after adjusting for esti10 mated defaults, prepayments, fees, pen11 alties and other recoveries; and

12 ‘‘(iv) in the case of a direct loan made

13 pursuant to a program for which the Office

14 of Management and Budget estimates that

15 for the coming fiscal year (or for any prior

16 fiscal year) loan commitments will equal or

17 exceed $5,000,000,000, direct expenses, in18 cluding but not limited to the following: ex19 penses arising from activities related to

20 credit extension; loan origination; loan

21 servicing; technical assistance; training;

22 program promotion; payments to contrac23 tors, other government entities, and pro24 gram participants; collection of delinquent
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1 loans; and write-off and close-out of

2 loans.’’.

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall apply to all fiscal years beginning on

5 or after October 1, 1995, and to statutory changes made

6 on or after the date of enactment of this Act.

7 SEC. 223. SALE OF FDSL LOAN PORTFOLIOS.

8 The Higher Education Act of 1965 Act (20 U.S.C.

9 1087h) is amended by inserting after section 458 the fol10 lowing new section:

11 ‘‘SEC. 459. SALE OF FEDERAL DIRECT STUDENT LOAN

12 PORTFOLIOS.

13 ‘‘(a) AUCTION SALES OF LOAN PORTFOLIOS.—The

14 Secretary shall conduct auctions to sell the outstanding

15 portfolio of loans made pursuant to this part. Such auc16 tions shall consist of sales of portfolios representative of

17 the overall characteristics of the direct loans held by the

18 Secretary. Auctions shall be held for portfolios of not less

19 than $40,000,000 of loans per sale. The first sale of loans

20 shall take place not later than 120 days after the date

21 of enactment of this section, and shall not include Federal

22 guarantees or reinsurance against the contingency of bor23 rower default, death, or disability.

24 ‘‘(b) LOAN TERMS SUBJECT TO PROMISSORY

25 NOTE.—Such loans shall be subject to the terms and con-
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1 ditions as specified in the borrower promissory note, and

2 shall not be subject to further Federal regulations pursu3 ant to this Act.

4 ‘‘(c) DISPOSITION OF PROCEEDS.—All proceeds re5 ceived as a result of the auctions conducted pursuant to

6 this part shall be returned to the United States Depart7 ment of the Treasury after deduction of expenses incurred

8 by the Department of Education in connection with the

9 auctions required pursuant to this section.’’.

10 SEC. 224. STUDENT LOAN PROGRAM; STATEMENT OF

11 POLICY.

12 The Congress finds that the Federal student loan

13 programs should be reviewed to evaluate whether reforms

14 need to be made to the programs based on the principles

15 of risk sharing, market-based orientation, privatization,

16 and deregulation.

17 SEC. 225. ELIMINATION OF IN-SCHOOL INTEREST SUB18 SIDIES.

19 (a) GUARANTEED LOANS.—Section 428(a) of the

20 Higher Education Act of 1965 (20 U.S.C. 1078(a)) is

21 amended by adding at the end the following new para22 graph:

23 ‘‘(8) TERMINATION OF INTEREST SUBSIDIES.—

24 Notwithstanding paragraph (3), no portion of the in25 terest shall be paid by the Secretary under this sub-
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1 section on any loan made on or after October 1,

2 1995. Interest on the unpaid principal amount of

3 any such loan—

4 ‘‘(A) which accrues prior to the beginning

5 of the repayment period of the loan, or

6 ‘‘(B) which accrues during a period in

7 which principal need not be paid (whether or

8 not such principal is in fact paid) by reason of

9 a provision described in subsection (b)(1)(M) of

10 this section or in section 427(a)(2)(C),

11 shall, at the option of the borrower—

12 ‘‘(i) be paid monthly or quarterly, or

13 ‘‘(ii) be added by the lender to the prin14 cipal amount of the loan at the commencement

15 of the repayment period.’’.

16 CHAPTER 2—HIGHER EDUCATION BLOCK

17 GRANT

18 SEC. 231. PURPOSE.

19 It is the purpose of this part to authorize block grants

20 to States to assist institutions of higher education in order

21 to improve access to higher education and to improve the

22 quality of educational programs.

23 SEC. 232. DISTRIBUTION OF FUNDS.

24 (a) IN GENERAL.—From the funds appropriated

25 under section 236, the Director shall allocate to the Gov-
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1 ernor of each State that has submitted the assurances re2 quired by section 233 an amount that bears the same ratio

3 to the amount so appropriated as the number of students

4 enrolled in institutions of higher education in such State

5 bears to the total number of students so enrolled in all

6 the States.

7 (b) EXCEPTION FOR SMALL STATES.—Notwithstand8 ing subsection (a), no State shall be allocated less than

9 0.25 percent of the funds appropriated under section 236.

10 (c) DETERMINATION OF NUMBER OF STUDENTS.—

11 The Director shall determine the number of students in

12 each State on the basis of a certification from the Gov13 ernor of each State.

14 SEC. 233. STATE ASSURANCES.

15 Any State seeking to obtain an allocation under sec16 tion 232 shall submit to the Director an application that

17 contains the following assurances:

18 (1) The Governor of such State will establish a

19 procedure for the distribution of funds to participat20 ing institutions of higher education.

21 (2) The Governor will use the funds obtained

22 under this part only for the improvement of higher

23 education.

24 (3) The Governor will require each participating

25 institution to submit assurances to the State that
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1 they will use funds obtained under this part only for

2 the improvement of higher education.

3 (4) The Governor will require each participating

4 institution to submit assurances that the institution

5 will comply with Federal civil rights laws.

6 SEC. 234. USE OF FUNDS.

7 (a) IN GENERAL.—Any funds obtained by a partici8 pating institution under this part may, subject to the pro9 visions of this part, be used for any existing or new pro10 gram.

11 (b) LIMITATION ON ADMINISTRATIVE COSTS.—Not

12 more than 2 percent of the funds allocated to any State

13 or institution under this chapter may be used for adminis14 trative costs.

15 SEC. 235. PUBLIC DISCLOSURE.

16 Institutions receiving funding under this chapter

17 shall make reasonably available to the community, par18 ents, and students a listing of the uses of such funds.

19 SEC. 236. AUTHORIZATION OF APPROPRIATIONS.

20 There are authorized to be appropriated to carry out

21 this subtitle $2,000,000,000 for each of fiscal years 1998

22 through 2000.

23 SEC. 237. DEFINITIONS.

24 As used in this subtitle—
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1 (1) unless otherwise provided, the terms used in

2 this part that are defined in section 1201 of the

3 Higher Education Act of 1965 have the meanings

4 provided in such section;

5 (2) the term ‘‘State’’ means the several States

6 and the District of Columbia; and

7 (3) the term ‘‘Director’’ means the Director of

8 Economic Opportunities in the Department of

9 Health and Human Services.

10 Subtitle D—Miscellaneous

11 Provisions

12 SEC. 241. CONSTRUCTION.

13 Notwithstanding the provisions of this Act, nothing

14 in this Act shall be construed to affect continued funding

15 for Galludet University, the American Printing House for

16 the Blind, or the National Institute for the Deaf at fiscal

17 year 1995 levels through fiscal year 2000.

18 SEC. 242. REGULATIONS.

19 For purposes of this title, the Secretary of Health

20 and Human Services shall consult with Congress before

21 issuing regulations regarding the grants provided under

22 chapter 1 of subtitle A and chapter 2 of subtitle C of this

23 title and shall only issue regulations that are necessary

24 for the timely distribution of funds to the States.
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1 SEC. 243. CONSOLIDATED APPLICATION.

2 The Secretary of Health and Human Services shall

3 provide for a consolidated application for grants provided

4 under chapter 1 of subtitle A and chapter 2 of subtitle

5 C of this title. Consolidated applications also shall be per6 mitted at the local level.

7 SEC. 244. APPROPRIATIONS.

8 The amount that is authorized to be appropriated for

9 programs under chapter 2 of subtitle A, subtitle B, and

10 chapter 1 of subtitle C shall not exceed the amount appro11 priated for such programs for fiscal year 1995. Such pro12 grams shall be authorized through fiscal year 2000.

13 SEC. 245. FEDERAL CIVIL RIGHTS.

14 (a) IN GENERAL.—

15 (1) APPLICABILITY.—Nothing in this title shall

16 be construed to affect the applicability of civil rights

17 laws relating to any program established, trans18 ferred, or consolidated under this Act.

19 (2) DUTIES.—The Secretary of Health and

20 Human Services shall be responsible for carrying out

21 any other civil rights functions performed by the

22 Secretary of Education as such functions were per23 formed on the day before the date of the enactment

24 of this Act.

25 (b) HEALTH AND HUMAN SERVICES.—The Director

26 of the Office of Civil Rights of the Department of Health
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1 and Human Services shall submit a report annually to the

2 Secretary of Health and Human Services, the President,

3 and the appropriate committees of Congress summarizing

4 the compliance and enforcement activities of the Office of

5 Civil Rights as such activities pertain to the Office of Eco6 nomic Opportunities. The report shall identify significant

7 civil rights or compliance problems for which the Office

8 of Civil Rights has made a recommendation for corrective

9 action and which, in the judgment of the Director of the

10 Office of Civil Rights, adequate progress is not being

11 made.

12 (c) DEPARTMENT OF JUSTICE.—The Assistant At13 torney General in charge of the Civil Rights Division of

14 the Department of Justice shall submit annually a report

15 to the Attorney General, the President, and the appro16 priate committees of Congress summarizing the activities

17 of the Civil Rights Division as such activities pertain to

18 the grantees of programs authorized by this Act.

19 TITLE III—GENERAL

20 PROVISIONS

21 SEC. 301. REFERENCES.

22 Any reference in any other Federal law, Executive

23 order, rule, regulation, or delegation of authority, or any

24 document of or pertaining to an office from which a func25 tion is transferred by this Act—
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1 (1) to the Secretary of Education or an officer

2 of the Department of Education, is deemed to refer

3 to the head of the department or office to which

4 such function is transferred; or

5 (2) to the Department of Education is deemed

6 to refer to the department or office to which such

7 function is transferred.

8 SEC. 302. EXERCISE OF AUTHORITIES.

9 Except as otherwise provided by law, a Federal offi10 cial to whom a function is transferred by this Act may,

11 for purposes of performing the function, exercise all au12 thorities under any other provision of law that were avail13 able with respect to the performance of that function to

14 the official responsible for the performance of the function

15 immediately before the transfer of the function under this

16 Act.

17 SEC. 303. SAVINGS PROVISIONS.

18 (a) LEGAL DOCUMENTS.—All orders, determinations,

19 rules, regulations, permits, grants, loans, contracts, agree20 ments, certificates, licenses, and privileges—

21 (1) that have been issued, made, granted, or al22 lowed to become effective by the President, the Sec23 retary of Education, any officer or employee of any

24 office transferred by this Act, or any other Govern25 ment official, or by a court of competent jurisdic-
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1 tion, in the performance of any function that is

2 transferred by this Act, and

3 (2) that are in effect on the date of such trans4 fer (or become effective after such date pursuant to

5 their terms as in effect on the date of such transfer),

6 shall continue in effect according to their terms until

7 modified, terminated, superseded, set aside, or revoked in

8 accordance with law by the President, any other author9 ized official, a court of competent jurisdiction, or operation

10 of law.

11 (b) PROCEEDINGS.—This Act shall not affect any

12 proceedings or any application for any benefits, service,

13 license, permit, certificate, or financial assistance pending

14 on the effective date of this title with respect to a function

15 transferred by this Act, but such proceedings and applica16 tions shall be continued. Orders shall be issued in such

17 proceedings, appeals shall be taken therefrom, and pay18 ments shall be made pursuant to such orders, as if this

19 Act had not been enacted, and orders issued in any such

20 proceeding shall continue in effect until modified, termi21 nated, superseded, or revoked by a duly authorized official,

22 by a court of competent jurisdiction, or by operation of

23 law. Nothing in this subsection shall be considered to pro24 hibit the discontinuance or modification of any such pro25 ceeding under the same terms and conditions and to the
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1 same extent that such proceeding could have been discon2 tinued or modified if this Act had not been enacted.

3 (c) SUITS.—This Act shall not affect suits com4 menced before the effective date of this title and in all

5 such suits, proceeding shall be had, appeals taken, and

6 judgments rendered in the same manner and with the

7 same effect as if this Act had not been enacted.

8 (d) NONABATEMENT OF ACTIONS.—No suit, action,

9 or other proceeding commenced by or against the Depart10 ment of Education or the Secretary of Education, or by

11 or against any individual in the official capacity of such

12 individual as an officer or employee of an office trans13 ferred by this Act, shall abate by reason of the enactment

14 of this Act.

15 (e) CONTINUANCE OF SUITS.—If, before the effective

16 date of this title, any officer of the Department of Edu17 cation in the official capacity of such officer is party to

18 a suit with respect to a function of the officer, and under

19 this Act such function is transferred to any other officer

20 or office, then such suit shall be continued with the other

21 officer or the head of such other office, as applicable, sub22 stituted or added as a party.

23 SEC. 304. TRANSFER OF ASSETS.

24 Except as otherwise provided in this Act, so much

25 of the personnel, property, records, and unexpended bal-
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1 ances of appropriations, allocations, and other funds em2 ployed, used, held, available, or to be made available in

3 connection with a function transferred to an official by

4 this Act shall be available to the official at such time or

5 times as the President directs for use in connection with

6 the functions transferred.

7 SEC. 305. DELEGATION AND ASSIGNMENT.

8 Except as otherwise expressly prohibited by law or

9 otherwise provided in this Act, an official to whom func10 tions are transferred under this Act (including the head

11 of any office to which functions are transferred under this

12 Act) may delegate any of the functions so transferred to

13 such officers and employees of the office of the official as

14 the official may designate, and may authorize successive

15 redelegations of such functions as may be necessary or ap16 propriate. No delegation of functions under this section

17 or under any other provision of this Act shall relieve the

18 official to whom a function is transferred under this Act

19 of responsibility for the administration of the function.

20 SEC. 306. AUTHORITY OF OFFICE OF MANAGEMENT AND

21 BUDGET WITH RESPECT TO FUNCTIONS

22 TRANSFERRED.

23 (a) DETERMINATIONS.—If necessary, the Director of

24 the Office of Management and Budget shall make any de-
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1 termination of the functions that are transferred under

2 this Act.

3 (b) INCIDENTAL TRANSFERS.—The Director of the

4 Office of Management and Budget, at such time or times

5 as the Director shall provide, may make such determina6 tions as may be necessary with regard to the functions

7 transferred by this Act, and to make such additional inci8 dental dispositions of personnel, assets, liabilities, grants,

9 contracts, property, records, and unexpended balances of

10 appropriations, authorizations, allocations, and other

11 funds held, used, arising from, available to, or to be made

12 available in connection with such functions, as may be nec13 essary to carry out the provisions of this Act. The Director

14 of the Office of Management and Budget shall provide for

15 the termination of the affairs of all entities terminated by

16 this Act and for such further measures and dispositions

17 as may be necessary to effectuate the purposes of this Act.

18 SEC. 307. PROPOSED CHANGES IN LAW.

19 Not later than 90 days before the effective date speci20 fied in section 109, the Director of the Office of Manage21 ment and Budget shall submit to the Congress a descrip22 tion of any changes in Federal law necessary to reflect

23 abolishments, transfers, terminations, and disposals under

24 this Act.
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1 SEC. 308. DEFINITION OF TRANSFER.

2 For purposes of this title, the vesting of a function

3 in a department or office pursuant to reestablishment of

4 an office shall be considered to be the transfer of the func5 tion.

6 SEC. 309. DEFINITIONS.

7 For purposes of this title, the following definitions

8 shall apply:

9 (1) DIRECTOR.—The term ‘‘Director’’ means

10 the Director for Economic Opportunities in the Ad11 ministration for Families and Children in the De12 partment of Health and Human Services, estab13 lished under section 102(a).

14 (2) FUNCTION.—The term ‘‘function’’ includes

15 any duty, obligation, power, authority, responsibility,

16 right, privilege, activity, or program.

17 (3) OFFICE.—The term ‘‘Office’’ means the Of18 fice of Economic Opportunities in the Department of

19 Health and Human Services, established under sec20 tion 102(a).

21 TITLE IV—STATEMENTS OF

22 POLICY

23 SEC. 401. STATEMENT OF POLICY REGARDING FEDERAL

24 EDUCATION FUNDING.

25 Congress finds that there should be a review and eval26 uation as to the feasibility of further enhancing the ability
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1 of States and local communities to fund education by re2 ducing the Federal tax burden and commensurately elimi3 nating Federal Government involvement in providing

4 grants for education programs.

5 SEC. 402. STATEMENT OF POLICY REGARDING JOB TRAIN6 ING PROGRAMS.

7 The Congress finds that all job training programs

8 under the jurisdiction of the Department of Education—

9 (1) should be reviewed and transferred to the

10 Department of Labor; and

11 (2) should be consolidated into one or more

12 block grants.

13 SEC. 403. STATEMENT OF POLICY REGARDING INDIAN EDU14 CATION.

15 Congress finds that any program transferred as a re16 sult of this Act to the Department of the Interior should

17 be reviewed by Congress to ensure that such programs

18 benefit Native American children that live on reservations.

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