```

[Journal of the House of Representatives, 1995]
[Tuesday, September 19, 1995 (117), Para 117.20 Roll No. 670]
[Pages 1378-1403]
[From the U.S. Government Publishing Office, www.gpo.gov]

para.117.20                  [Roll No. 670]

                                AYES--231

     Abercrombie
     Ackerman
     Andrews
     Baesler
     Baker (LA)
     Baldacci
     Barcia
     Barrett (WI)
     Barton
     Becerra
     Beilenson
     Bentsen
     Berman
     Bevill
     Bishop
     Blute
     Bonior
     Borski
     Boucher
     Brewster
     Browder
     Brown (CA)
     Brown (OH)
     Bryant (TX)
     Buyer
     Cardin
     Chapman
     Chenoweth
     Clay
     Clayton
     Clement
     Clyburn
     Coble
     Coburn
     Coleman
     Collins (IL)
     Collins (MI)
     Condit
     Conyers
     Costello
     Coyne
     Cramer
     Crapo
     Cremeans
     Danner
     de la Garza
     DeFazio
     DeLauro
     Dellums
     Deutsch
     Dickey
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doyle
     Duncan
     Durbin
     Edwards
     Ehrlich
     Engel
     English
     Ensign
     Eshoo
     Evans
     Farr
     Fattah
     Fazio
     Filner
     Flake
     Flanagan
     Foglietta
     Forbes
     Ford
     Frank (MA)
     Frost
     Funderburk
     Furse
     Gejdenson
     Gephardt
     Geren
     Gibbons
     Gilchrest
     Gonzalez
     Gordon
     Green
     Gutierrez
     Hall (OH)
     Hall (TX)
     Hamilton
     Harman
     Hastings (FL)
     Hayes
     Hefner
     Heineman
     Hilliard
     Hinchey
     Hobson
     Holden
     Horn
     Hoyer
     Jackson-Lee
     Jacobs
     Johnson (SD)
     Johnson, E. B.
     Johnston
     Jones
     Kanjorski
     Kaptur
     Kennedy (MA)
     Kennedy (RI)
     Kennelly
     Kildee
     Kleczka
     Klink
     LaFalce
     Lantos
     LaTourette
     Lazio
     Leach
     Levin
     Lewis (GA)
     Lightfoot
     Lincoln
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Luther
     Maloney
     Manton
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy
     McCrery
     McDermott
     McKinney
     McNulty
     Meehan
     Meek
     Menendez
     Metcalf
     Mfume
     Miller (CA)
     Mineta
     Minge
     Mink
     Mollohan
     Montgomery
     Morella
     Murtha
     Nadler
     Neal
     Ney
     Nussle
     Obey
     Olver
     Ortiz
     Orton
     Owens
     Pallone
     Pastor
     Payne (NJ)
     Payne (VA)
     Pelosi
     Peterson (FL)
     Peterson (MN)
     Pickett
     Pomeroy
     Poshard
     Pryce
     Rahall
     Ramstad
     Rangel
     Reed
     Richardson
     Rivers
     Roemer
     Rose
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sawyer
     Schiff
     Schroeder
     Schumer
     Scott
     Serrano
     Skaggs
     Skelton
     Slaughter
     Smith (NJ)
     Spratt
     Stark
     Stenholm
     Stockman
     Stokes
     Studds
     Stupak
     Tanner
     Taylor (MS)
     Tejeda
     Thompson
     Thornton
     Thurman
     Torkildsen
     Torres
     Torricelli
     Towns
     Traficant
     Velazquez
     Vento
     Visclosky
     Waldholtz
     Ward
     Waters
     Watt (NC)
     Watts (OK)
     Waxman
     Williams
     Wilson
     Wise
     Woolsey
     Wyden
     Wynn
     Yates
     Zimmer

                                NOES--192

     Allard
     Archer
     Armey
     Bachus
     Baker (CA)
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Bass
     Bateman
     Bereuter
     Bilbray
     Bilirakis
     Bliley
     Boehlert
     Boehner
     Bonilla
     Bono
     Brownback
     Bryant (TN)
     Bunn
     Bunning
     Burr
     Burton
     Callahan
     Calvert
     Camp
     Canady
     Castle
     Chabot
     Chambliss
     Christensen
     Chrysler
     Clinger
     Collins (GA)
     Combest
     Cooley
     Cox
     Crane
     Cubin
     Cunningham
     Davis
     Deal
     DeLay
     Diaz-Balart
     Doolittle
     Dornan
     Dreier
     Dunn
     Ehlers
     Emerson
     Everett
     Ewing
     Fawell
     Foley
     Fowler
     Fox
     Franks (CT)
     Franks (NJ)
     Frelinghuysen
     Frisa
     Gallegly
     Ganske
     Gekas
     Gillmor
     Gilman
     Goodlatte
     Goodling
     Goss
     Graham
     Greenwood
     Gunderson
     Gutknecht
     Hancock
     Hansen
     Hastert
     Hastings (WA)
     Hayworth
     Hefley
     Herger
     Hilleary
     Hoekstra
     Hoke
     Hostettler
     Houghton
     Hunter
     Hutchinson
     Hyde
     Inglis
     Istook
     Johnson (CT)
     Johnson, Sam
     Kasich
     Kelly
     Kim
     King
     Kingston
     Klug
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     Laughlin
     Lewis (CA)
     Lewis (KY)
     Linder
     Livingston
     Longley
     Lucas
     Manzullo
     Martini
     McCollum
     McDade
     McHale
     McHugh
     McInnis
     McIntosh
     McKeon
     Meyers
     Mica
     Miller (FL)
     Molinari
     Moorhead
     Moran
     Myers
     Myrick
     Nethercutt
     Neumann
     Norwood
     Oxley
     Packard
     Parker
     Paxon
     Petri
     Pombo
     Porter
     Portman
     Quillen
     Quinn
     Radanovich
     Regula
     Riggs
     Roberts
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roth
     Roukema
     Royce
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaefer
     Seastrand
     Sensenbrenner
     Shadegg
     Shaw
     Shays
     Shuster
     Skeen
     Smith (MI)
     Smith (TX)
     Smith (WA)
     Solomon
     Souder
     Spence
     Stearns
     Stump
     Talent
     Tate
     Tauzin
     Taylor (NC)
     Thomas
     Thornberry
     Tiahrt
     Upton
     Vucanovich
     Walker
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     White
     Whitfield
     Wicker
     Wolf
     Young (AK)
     Young (FL)
     Zeliff

                             NOT VOTING--11

     Brown (FL)
     Fields (LA)
     Fields (TX)
     Jefferson
     Moakley
     Oberstar
     Reynolds
     Sisisky
     Tucker
     Volkmer
     Walsh
  So the amendment was agreed to.
  After some further time,
  The SPEAKER pro tempore, Mr. GILLMOR, assumed the Chair.
  When Mr. McINNIS, Chairman, pursuant to House Resolution 222, reported 
the bill back to the House with an amendment adopted by the Committee.
  The previous question having been ordered by said resolution.
  The following amendment, reported from the Committee of the Whole 
House on the state of the Union, was agreed to:

       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the--
       (1) ``Consolidated and Reformed Education, Employment, and 
     Rehabilitation Systems Act''; or
       (2) ``CAREERS Act''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Purpose.

[[Page 1379]]

Sec. 4. Authorization of appropriations.
Sec. 5. Definitions.
Sec. 6. Transition.

             TITLE I--WORKFORCE DEVELOPMENT INFRASTRUCTURE

Sec. 101. Purpose of title.

              Subtitle A--State and Local Responsibilities

Sec. 102. State requirements.
Sec. 103. Collaborative process regarding State system.
Sec. 104. Consolidated State workforce development and literacy plan.
Sec. 105. Establishment of workforce development areas.
Sec. 106. Provisions regarding local workforce development boards.
Sec. 107. Establishment of integrated career center systems.
Sec. 108. Identification of eligible education, training, and 
              vocational rehabilitation service providers.
Sec. 109. Management information systems.
Sec. 110. Performance accountability system.
Sec. 111. Limitation on Federal regulations.
Sec. 112. General provision.
Sec. 113. Liability.

              Subtitle B--Amendments to Wagner-Peyser Act

Sec. 131. General program requirements.
Sec. 132. Labor market information.

                     Subtitle C--General Provisions

Sec. 141. Worker rights.
Sec. 142. Transferability.

 TITLE II--YOUTH DEVELOPMENT AND CAREER PREPARATION CONSOLIDATION GRANT

Sec. 201. Purposes.
Sec. 202. Definitions.

                       Subtitle A--State Funding

Sec. 211. National and State funding.
Sec. 212. Within State allocation.

       Subtitle B--State Organizational, Planning, and Reporting 
                            Responsibilities

Sec. 221. State plan.
Sec. 222. State programs and State activities.
Sec. 223. Incentive awards.

         Subtitle C--Subgrants for In-School and At-Risk Youth

Sec. 231. Partnership agreements.
Sec. 232. Distribution of funds.

                       Chapter 1--In-School Youth

Sec. 241. Uses of funds for in-school youth.

                        Chapter 2--At-Risk Youth

Sec. 245. Uses of funds for at-risk youth.
Sec. 246. At-risk youth providers.

                     Subtitle D--National Programs

Sec. 251. Research activities.
Sec. 252. Assessment and data collection of youth development and 
              career preparation programs.
Sec. 253. National center or centers for research.
Sec. 254. Purchase of American-made equipment and products.

      TITLE III--ADULT EMPLOYMENT AND TRAINING CONSOLIDATION GRANT

Sec. 301. Purpose.

     Subtitle A--Adult Employment and Training Consolidation Grant

Sec. 311. Authorization.
Sec. 312. Allotment among States.
Sec. 313. Allocation within States.
Sec. 314. Additional State plan requirements.
Sec. 315. Use of amounts.

                      Subtitle B--Federal Programs

Sec. 321. National discretionary grants.
Sec. 322. Disaster relief employment assistance.
Sec. 323. Research, demonstration, evaluation, and capacity building.
Sec. 324. Workforce skills and development loans.
Sec. 325. Employment, training, and education assistance for Native 
              Americans.
Sec. 326. Employment, training, and education assistance for migrant 
              and seasonal farmworkers.

 TITLE IV--ADULT EDUCATION AND FAMILY LITERACY CONSOLIDATION GRANT AND 
          LIBRARY SERVICES AND TECHNOLOGY CONSOLIDATION GRANT

Sec. 401. Findings.
Sec. 402. Definitions.

  Subtitle A--Adult Education and Family Literacy Consolidation Grant

Sec. 411. Purposes.

                           Chapter 1--Funding

Sec. 421. Reservations from amounts appropriated.
Sec. 422. Allotment.

                      Chapter 2--Grants to States

Sec. 431. Requirement to make grants.
Sec. 432. Uses of funds.
Sec. 433. Additional grant requirements.

                      Chapter 3--National Programs

Sec. 441. National Institute for Literacy.
Sec. 442. National leadership activities.

    Subtitle B--Library Services and Technology Consolidation Grant

Sec. 451. Purposes.
Sec. 452. Authorization of appropriations.
Sec. 453. Allotments.
Sec. 454. Grants to States.
Sec. 455. Uses of funds.
Sec. 456. Annual applications.

                   TITLE V--MISCELLANEOUS PROVISIONS

Sec. 501. Effect on Rehabilitation Act of 1973.

                TITLE VI--HIGHER EDUCATION PRIVATIZATION

Sec. 601. Reorganization of the Student Loan Marketing Association 
              through the formation of a holding company.
Sec. 602. Privatization of College Construction Loan Insurance 
              Association.

               TITLE VII--REPEALERS AND OTHER AMENDMENTS

Sec. 701. Higher education provisions.
Sec. 702. Eligible institution.
Sec. 703. Carl D. Perkins Vocational and Applied Technology Education 
              Act. 
Sec. 704. Smith-Hughes Act.
Sec. 705. School-to-Work Opportunities Act of 1994.
Sec. 706. School Dropout Assistance Act.
Sec. 707. Adult Education Act.
Sec. 708. National Literacy Act.
Sec. 709. Library Services and Construction Act.
Sec. 710. Technology for Education Act of 1994.
Sec. 711. Job Training Partnership Act.
Sec. 712. Stewart B. McKinney Homeless Assistance Act.
Sec. 713. Effective date.

     SEC. 3. PURPOSE.

       The purpose of this Act is to transform the vast array of 
     Federal workforce development and literacy programs from a 
     collection of fragmented and duplicative categorical programs 
     into a streamlined, comprehensive, coherent, high-quality, 
     cost-effective, market-based, and accountable workforce 
     development and literacy system that is designed to meet the 
     education, economic, employment, and training needs of the 
     workforce and the competitiveness needs of employers of the 
     United States, both today and in the future.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated--
       (1) for title II, $2,324,600,000 for fiscal year 1997 and 
     such sums as may be necessary for each of the fiscal years 
     1998 through 2002 to carry out the programs under such title;
       (2) for title III, $2,183,000,000 for fiscal year 1997 and 
     such sums as may be necessary for each of the fiscal years 
     1998 through 2002 to carry out the programs under such title; 
     and
       (3) for subtitle A of title IV, $280,000,000 for fiscal 
     year 1997 and such sums as may be necessary for each of the 
     fiscal years 1998 through 2002 to carry out the programs 
     under such subtitle.
       (b) Program Year.--
       (1) In general.--Beginning in fiscal year 1997, and each 
     year thereafter, appropriations for any fiscal year for 
     programs and activities under titles II, III, and IV of this 
     Act 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.
       (2) Obligation.--Funds obligated for any program year under 
     titles II, III, and IV, may be expended by each recipient 
     during that program year and the two succeeding program 
     years, except that the Secretary shall, in accordance with 
     paragraph (3), reallot to eligible States the funds allotted 
     to States from funds appropriated for reallotments.
       (3) Amounts available for reallotment.--The amount 
     available for reallotment is equal to--
       (A) the amount by which the unobligated balance of the 
     State allotment at the end of the program year prior to the 
     program year for which the determination under this section 
     is made exceeds 20 percent of such allotment for the prior 
     program year; plus
       (B) the unexpended balance of the State allotment from any 
     program year prior to the program year in which there is such 
     excess.

     SEC. 5. DEFINITIONS.

       For purposes of this Act, except as otherwise provided:
       (1) Adult.--The term ``adult'' means an individual who is 
     16 years of age, or beyond the age of compulsory school 
     attendance under State law (whichever age is higher), and who 
     is not enrolled or required to be enrolled in secondary 
     school.
       (2) Adult education.--The term ``adult education'' means 
     services or instruction below the postsecondary level for 
     adults--
       (A) who are not enrolled in secondary school;
       (B) who lack sufficient mastery of basic educational skills 
     to enable them to function effectively in society or who do 
     not have a certificate of graduation from a school providing 
     secondary education and who have not achieved an equivalent 
     level of education;
       (C) who are not currently required to be enrolled in 
     school; and
       (D) whose lack of mastery of basic skills results in an 
     inability to speak, read, or write the English language which 
     constitutes a substantial impairment of their ability to get 
     or retain employment commensurate with their real ability, 
     and thus are in need of programs to help eliminate such 
     inability and raise the level of education of such 
     individuals with a view to making them less likely to become 
     dependent on others.
       (3) Area vocational education school.--The term ``area 
     vocational education school'' means--
       (A) a specialized high school used exclusively or 
     principally for the provision of vocational education to 
     individuals who are available for study in preparation for 
     entering the labor market;
       (B) the department of a high school exclusively or 
     principally used for providing vocational education in not 
     less than 5 different

[[Page 1380]]

     occupational fields to individuals who are available for 
     study in preparation for entering the labor market;
       (C) a technical institute or vocational school used 
     exclusively or principally for the provision of vocational 
     education to individuals who have completed or left high 
     school and who are available for study in preparation for 
     entering the labor market; or
       (D) the department or division of a junior college, 
     community college or university operating under the policies 
     of the State board and which provides vocational education in 
     not less than 5 different occupational fields leading to 
     immediate employment but not necessarily leading to a 
     baccalaureate degree, if, in the case of a school, 
     department, or division described in subparagraph (C) or this 
     subparagraph, it admits as regular students both individuals 
     who have completed high school and individuals who have left 
     high school.
       (4) At-risk youth.--The term ``at-risk youth'' means--
       (A) an out-of-school, at-risk youth who is an individual 
     age 24 or younger and who is not enrolled in a secondary or 
     postsecondary education program, has not received a high 
     school diploma or its equivalent and must overcome barriers 
     to employment such as lack of sufficient education or 
     vocational skills, economic disadvantages, disability, or 
     limited English proficiency; or
       (B) an in-school, at-risk youth who is an individual age 24 
     or younger who is enrolled in an accredited secondary or 
     postsecondary education program but is at risk of dropping 
     out of school or must overcome barriers to complete an 
     education program, such as economic disadvantages, 
     disability, or limited English proficiency.
       (5) Comprehensive career guidance and counseling.--The term 
     ``comprehensive career guidance and counseling'' means a 
     program--
       (A) which pertains to the body of subject matter and 
     related techniques and methods organized for the development 
     in individuals of career awareness, career planning, career 
     decisionmaking, placement skills, and knowledge and 
     understanding of local, State, and national occupational, 
     educational, and labor market needs, trends, and 
     opportunities;
       (B) which assists such individuals in making and 
     implementing informed educational and occupational choices; 
     and
       (C) which is comprehensive in nature.
       (6) Career grant.--The term ``career grant'' means a 
     voucher or a credit issued to a participant under title III 
     of this Act, or title I of the Rehabilitation Act of 1973, 
     for the purchase of education or training services from 
     certified providers of such services, in accordance with the 
     provisions of this Act, and with guidelines issued by the 
     State.
       (7) Case management.--The term ``case management'' means 
     the provision of a client-centered approach in the delivery 
     of services designed to--
       (A) empower individuals to make informed career choices;
       (B) prepare and coordinate comprehensive employment plans, 
     based upon such individual choices, such as service 
     strategies for participants, to ensure access to necessary 
     training and supportive services, using, where feasible, 
     computer-based technologies; and
       (C) provide job and career counseling during program 
     participation and after job placement.
       (8) Chief elected official.--The term ``chief elected 
     official'' means the chief elected executive officer of a 
     unit of general local government in a workforce development 
     area.
       (9) Community-based organization.--The term ``community-
     based organization'' means a private nonprofit organization 
     that is representative of a community or significant segments 
     of a community that provides or facilitates education, 
     vocational rehabilitation, job training, supportive services, 
     or internship services and programs.
       (10) Demographic characteristics.--The term ``demographic 
     characteristics'' means information on population, especially 
     with reference to size, density, distribution, and vital 
     statistics including, age, race, sex, ethnic origin, and 
     income status.
       (11) Dislocated worker.--The term ``dislocated worker'' 
     means an individual who--
       (A) has been terminated or laid off or who has received a 
     notice of termination or layoff from employment, is eligible 
     for or has exhausted entitlement to unemployment 
     compensation, and is unlikely to return to a previous 
     industry or occupation;
       (B) has been terminated, or has received a notice of 
     termination of employment, as a result of any permanent 
     closure of, or any substantial layoff at, a plant, facility, 
     or enterprise;
       (C) has been unemployed long-term and has limited 
     opportunities for employment or reemployment in the same or a 
     similar occupation in the area in which such individual 
     resides, including an older individual who may have 
     substantial barriers to employment by reason of age; or
       (D) was self-employed (including farmers and ranchers) but 
     is unemployed as a result of general economic conditions in 
     the community in which they reside or because of natural 
     disasters.
       (12) Displaced homemaker.--The term ``displaced homemaker'' 
     means an individual who--
       (A) is an adult; and
       (B)(i) has worked as an adult primarily without 
     remuneration to care for the home and family, and for that 
     reason has diminished marketable skills;
       (ii) has been dependent on public assistance or on the 
     income of a relative but is no longer supported by such 
     income; or
       (iii) is a parent whose youngest dependent child will 
     become ineligible to receive assistance under the program for 
     aid to families with dependent children under part A of title 
     IV of the Social Security Act within 2 years of the parent's 
     application for assistance under title II of this Act.
       (13) Earnings.--The term ``earnings'' means gross hourly 
     wages before any deduction, plus the estimated hourly value 
     of bonuses, tips, gratuities, commissions, and overtime pay 
     either expected or received. In the case of individuals in 
     subsidized employment, total hourly earnings include any wage 
     subsidy paid to the individual.
       (14) Economic development agencies.--The term ``economic 
     development agencies'' means State and local planning and 
     zoning commissions or boards, community development agencies, 
     and other State and local agencies and institutions 
     responsible for regulating, promoting, or assisting in State 
     and local economic development.
       (15) Economically disadvantaged.--The term ``economically 
     disadvantaged'' means an individual who--
       (A) receives, or is a member of a family which receives, 
     cash welfare payments under a Federal, State, or local 
     welfare program;
       (B) has, or is a member of a family which has, received a 
     total family income for the 6-month period prior to 
     application for the program involved (exclusive of 
     unemployment compensation, child support payments, and 
     welfare payments) which, in relation to family size, was not 
     in excess of the higher of--
       (i) the official poverty line (as defined by the Office of 
     Management and Budget, and revised annually in accordance 
     with section 673(2) of the Omnibus Budget Reconciliation Act 
     of 1981 (42 U.S.C. 9902(2)), or
       (ii) 70 percent of the lower living standard income level;
       (C) is receiving (or has been determined within the 6-month 
     period prior to the application for the program involved to 
     be eligible to receive) food stamps pursuant to the Food 
     Stamp Act of 1977;
       (D) qualifies as a homeless individual under subsections 
     (a) and (c) of section 103 of the Stewart B. McKinney 
     Homeless Assistance Act;
       (E) is a foster child on behalf of whom State or local 
     government payments are made;
       (F) in cases permitted by regulations of the Secretary, is 
     an individual with a disability whose own income meets the 
     requirements of subparagraph (A) or (B), but who is a member 
     of a family whose income does not meet such requirements; or
       (G) is an individual meeting appropriate criteria approved 
     by a State.
       (16) Educational service agency.--The term ``educational 
     service agency'' means a regional public multiservice agency 
     authorized by State statute to develop, manage, and provide 
     services or programs to local educational agencies, and is 
     recognized as an administrative agency for such State's 
     vocational or technical education schools or for vocational 
     programs within its public elementary or secondary schools. 
     Such term includes any other public institution or agency 
     having administrative control and direction over a public 
     elementary or secondary school.
       (17) Employed.--The term ``employed'' means an individual 
     who is currently--
       (A) a paid employee;
       (B) works in his or her own business, profession, or farm;
       (C) works 15 hours or more per week as an unpaid worker in 
     an enterprise operated by a family member or is one who is 
     not working, but has a job or business from which he or she 
     is temporarily absent due to illness, bad weather, vacation, 
     labor-management dispute, or personal reasons; or
       (D) on active military duty.
       (18) English literacy program.--The term ``English literacy 
     program'' means a program of instruction designed to help 
     limited English proficient adults, out-of-school youths, or 
     both, achieve full competence in the English language.
       (19) Excess number.--The term ``excess number'' means, 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, or 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.
       (20) Family and consumer sciences.--The term ``family and 
     consumer sciences'' means instructional programs, services, 
     and activities which prepare students for personal, family, 
     community, and career roles.
       (21) Governor.--The term ``Governor'' means the chief 
     executive of a State.
       (22) Individual of limited english proficiency.--The term 
     ``individual of limited English proficiency'' means an adult 
     or 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.
       (23) Individuals with disabilities.--The term ``individuals 
     with disabilities'' has the

[[Page 1381]]

     meaning given such term in the Rehabilitation Act of 1973.
       (24) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given 
     such term in section 481 of the Higher Education Act of 1965.
       (25) Job search assistance.--The term ``job search 
     assistance'' means a service that helps a job-ready 
     individual seek, locate, apply for, and obtain employment. 
     Such services may include, job-finding skills, orientation to 
     the labor market, resume preparation assistance, job finding 
     clubs, job search workshops, vocational exploration, and 
     other employability services.
       (26) 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 areas 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.
       (27) Library.--The term ``library'' includes--
       (A) a public library;
       (B) a public elementary or secondary school library;
       (C) an academic library;
       (D) a research library; and
       (E) a private library, but only if the State in which such 
     private library is located determines that the library should 
     be considered a library for purposes of this Act.
       (28) Literacy.--The term ``literacy'' means an individual's 
     ability to read, write, and speak in English, and compute and 
     solve problems, at levels of proficiency necessary--
       (A) to function on the job, in the individual's family and 
     in society;
       (B) to achieve the individual's goals; and
       (C) to develop the individual's knowledge potential.
       (29) Local educational agency.--The term ``local 
     educational agency'' has the same meaning given such term in 
     section 14101 of the Elementary and Secondary Education Act 
     of 1965.
       (30) Migrant farmworker.--The term ``migrant farmworker'' 
     means a seasonal farmworker whose farm work requires travel 
     such that the worker is unable to return to a permanent place 
     of residence within the same day.
       (31) Native american.--The term ``native American'' means 
     Indians, Alaskan natives, and Hawaiian natives.
       (32) Nontraditional employment.--The term ``nontraditional 
     employment'' as applied to women refers to occupations or 
     fields of work where women comprise less than 25 percent of 
     the individuals employed in such occupation or field of work.
       (33) On-the-job training.--The term ``on-the-job training'' 
     means training in the public or private sector that is 
     provided to a paid employee while engaged in productive work 
     that--
       (A) provides knowledge or skills essential to the full and 
     adequate performance of the job;
       (B) provides reimbursement to employers, up to 50 percent 
     of the participant's wage rate, for the extraordinary costs 
     of providing training and additional supervision; and
       (C) is based on the Occupational Employment Statistics 
     Program Dictionary.
       (34) Postsecondary educational institution.--The term 
     ``postsecondary educational institution'' means an 
     institution of higher education (as such term is defined in 
     section 481 of the Higher Education Act of 1965) which 
     continues to meet the eligibility and certification 
     requirements under title IV of such Act (20 U.S.C. 1070 et 
     seq.).
       (35) Preemployment skills training; job readiness skills 
     training.--The terms ``preemployment skills training'' and 
     ``job readiness skills training'' mean training that builds 
     on family efforts to help prepare individuals for work by 
     assuring that they are familiar with general workplace 
     expectations and exhibit work behavior and attitudes 
     necessary to compete successfully in the job market.
       (36) 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.
       (37) Rapid response.--The term ``rapid response'' means 
     assistance that is directly provided by the State, or by 
     local grantees with funds provided by the State, in the case 
     of mass layoffs or plant closures, and that establishes on-
     site contact with employer and employee representatives 
     within a short period of time (preferably 48 hours or less) 
     after becoming aware of a current or projected permanent 
     closure or substantial layoff in order to--
       (A) provide information on, and facilitate access to, 
     available public programs and services for workers losing 
     jobs as a result of such layoff or closure;
       (B) provide emergency assistance adapted to the particular 
     closure or layoff;
       (C) promote the formation of labor-management committees, 
     where appropriate;
       (D) collect information related to economic dislocation and 
     available resources within the State for dislocated workers;
       (E) provide or obtain appropriate financial and technical 
     advice and liaison with economic development agencies and 
     other organizations to assist in efforts to avert worker 
     dislocation; and
       (F) assist the local community in developing its own 
     coordinated response and in obtaining access to State 
     economic development assistance.
       (38) Registered apprenticeship.--The term ``registered 
     apprenticeship'' means a program registered by the Bureau of 
     Apprenticeship and Training in the United States Department 
     of Labor, or a State Apprenticeship Agency recognized and 
     approved by the Bureau of Apprenticeship and Training as the 
     appropriate body for State registration or approval of local 
     apprenticeship programs and agreements.
       (39) School dropout.--The term ``school dropout'' means a 
     youth who is no longer attending any school and who has not 
     received a secondary school diploma or a certificate from a 
     program of equivalency for such a diploma.
       (40) Seasonal farmworker.--The term ``seasonal farmworker'' 
     means a person who during the eligibility determination 
     period (12 consecutive months out of 24 months prior to 
     application) has been primarily employed in farm work that is 
     characterized by chronic unemployment or under employment.
       (41) Skill certificate.--The term ``skill certificate'' 
     means a portable, industry-recognized credential achieved 
     through programs authorized under this Act, that certifies 
     that an individual has mastered occupational skills at levels 
     that are at least as challenging as skill standards endorsed 
     by the National Skill Standards Board, except that until such 
     skill standards are developed, the term ``skill certificate'' 
     means a credential issued under a process endorsed by the 
     State, based upon established industry standards and 
     benchmarks.
       (42) State.--The term ``State'' means any of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, American Samoa, Guam, and the 
     Commonwealth of the Northern Mariana Islands.
       (43) State educational agency.--The term ``State 
     educational agency'' has the meaning given such term in 
     section 14101 of the Elementary and Secondary Education Act 
     of 1965.
       (44) State library administrative agency.--The term ``State 
     library administrative agency'' means the official agency of 
     a State charged by the law of the State with the extension 
     and development of public library services throughout the 
     State.
       (45) Supportive services.--The term ``supportive services'' 
     means services which are necessary to enable an individual 
     eligible for training under this Act, but who cannot afford 
     to pay for such services, to participate in a training or 
     vocational rehabilitation program or job search activities 
     funded under this Act. Such supportive services may include 
     transportation, individual and family counseling, child care 
     and dependent care, meals, temporary shelter, financial 
     counseling, needs-based payments, and other reasonable 
     expenses required for participation in a training, job 
     preparation, or job placement program. Such services may be 
     provided in-kind or through cash assistance, except that such 
     services will be provided with funds provided under this Act 
     only after alternative funding sources specifically 
     designated for such services have been exhausted.
       (46) Unemployed.--The term ``unemployed'' refers to an 
     individual who is not employed, who is available for work, 
     and who has made specific efforts to find a job within the 
     prior 4 weeks. Included as unemployed are individuals who are 
     not working, are available for work, and are waiting to be 
     called back to a job from which they have been laid off.
       (47) Unit of general local government.--The term ``unit of 
     general local government'' means any general purpose 
     political subdivision of a State which has the power to levy 
     taxes and spend funds, as well as general corporate and 
     police powers.
       (48) Veteran.--The term ``veteran'' has the meaning given 
     such term in section 101(2) of title 38, United States Code.
       (49) Work experience.--The term ``work experience'' means a 
     time-limited work activity that provides an individual with 
     the opportunity to acquire the general skills and knowledge 
     necessary to obtain employment.
       (50) Workplace mentor.--The term ``workplace mentor'' means 
     an employee or other individual, approved by the employer at 
     a workplace, who possesses the skills and knowledge to be 
     mastered by a student or program participant, and who 
     instructs, critiques the performance, and challenges the 
     student or program participant to perform well, and works in 
     consultation with classroom teachers, training providers, 
     parents, and the employer of the student or program 
     participant.
       (51) Youth.--The term ``youth'' means an individual under 
     the age of 24.

     SEC. 6. TRANSITION.

       The Secretary of Education and the Secretary of Labor shall 
     take such steps as they determine to be appropriate to 
     provide for the orderly transition from any authority under 
     provisions of statutes amended or repealed by this Act or any 
     related authority under provisions of this Act.
             TITLE I--WORKFORCE DEVELOPMENT INFRASTRUCTURE

     SEC. 101. PURPOSE OF TITLE.

       The purpose of this title is to provide for the 
     establishment of an infrastructure within States on which to 
     build a comprehensive system of workforce development and 
     literacy.

[[Page 1382]]

              Subtitle A--State and Local Responsibilities

     SEC. 102. STATE REQUIREMENTS.

       (a) In General.--For fiscal year 1997 and subsequent fiscal 
     years, a State that desires to receive a grant under one or 
     more of the programs specified in subsection (b) shall--
       (1) establish a collaborative process, pursuant to section 
     103;
       (2) develop a State workforce development and literacy 
     plan, pursuant to section 104; and
       (3) otherwise comply with the requirements of this Act.
       (b) Workforce Development and Literacy Programs.--
       (1) In general.--The programs referred to in subsection (a) 
     are the following:
       (A) The program under title II, the Youth Development and 
     Career Preparation Consolidation Grant.
       (B) The program under title III, the Adult Employment and 
     Training Consolidation Grant.
       (C) The program under subtitle A of title IV, the Adult 
     Education and Family Literacy Consolidation Grant.
       (D) The program amended by subtitle A of title V (relating 
     to title I of the Rehabilitation Act of 1973).
       (2) Definition.--For purposes of this Act, the term 
     ``Workforce Development and Literacy programs'' means the 
     programs specified in paragraph (1).

     SEC. 103. COLLABORATIVE PROCESS REGARDING STATE SYSTEM.

       (a) In General.--The Governor of a State that desires to 
     receive a grant under one or more of the programs specified 
     in section 102(b) shall certify to the Secretary of Education 
     and the Secretary of Labor that a collaborative process, as 
     described in subsection (b) or (c), has been used in 
     complying with the applicable provisions of this Act.
       (b) Collaborative Process.--The collaborative process 
     referred to in subsection (a) is a process for making 
     decisions which includes as participants, at a minimum, the 
     Governor and--
       (1) representatives of (which representatives are appointed 
     by the Governor)--
       (A) business and industry;
       (B) local chief elected officials (representing both cities 
     and counties);
       (C) local educational agencies (including vocational 
     educators);
       (D) postsecondary institutions (including community and 
     technical colleges);
       (E) the State rehabilitation advisory council;
       (F) organizations representing individuals served by 
     programs established under this Act (including community-
     based organizations);
       (G) employees;
       (H) parents; and
       (I) providers of workforce development services (including 
     private-for-profit sector providers);
       (2) the lead State agency and entity official or officials 
     for--
       (A) the State educational agency or agencies (including the 
     lead official or officials for vocational education, adult 
     education and literacy, and libraries);
       (B) the State agency responsible for economic development;
       (C) the State agency or agencies responsible for employment 
     security and for job training;
       (D) the State agency responsible for postsecondary 
     education;
       (E) the State agency responsible for vocational 
     rehabilitation, and where applicable, the State agency 
     providing vocational rehabilitation services for the blind;
       (F) the State agency responsible for administering welfare 
     benefits;
       (G) the representative of the Veterans' Service assigned to 
     the State under section 4103 of title 38, United States Code; 
     and
       (H) the State entity responsible for setting education 
     policies, consistent with State law, on the date preceding 
     the date of the enactment of this Act; and
       (3) representatives of the State legislature.
       (c) Rule of Construction.--With respect to compliance with 
     subsection (b)--
       (1) a State may use any existing State process (including 
     any council or similar entity) that substantially meets the 
     purposes of such subsection; or
       (2) if prior to the date of enactment of this Act, a State 
     has developed a one-stop career center system or a school-to-
     work system through a collaborative process substantially 
     similar to the process described in subsection (b), the State 
     may use such process.
       (d) Authority of Governor.--
       (1) Final authority.--If, after a reasonable effort, a 
     Governor is unable to obtain agreement through the 
     collaborative process described in subsection (b) or (c), the 
     Governor shall have final authority to make decisions and to 
     submit the State plan as described under section 104.
       (2) Exception.--Nothing in this Act shall be construed to 
     negate or supersede the legal authority, under State law of 
     any State agency, State entity, or State public official over 
     programs that are under the jurisdiction of the agency, 
     entity, or official. Nothing in this Act shall be construed 
     to interfere with the authority of such agency, entity, or 
     official to enter into a contract under any provision of law.
       (3) Disagreement.--The Governor shall accept and include 
     with the State plan submitted under section 104, any 
     disagreeing views submitted by a participant of the 
     collaborative process if such views represent disagreement in 
     the area in which such participant was selected for 
     representation.

     SEC. 104. CONSOLIDATED STATE WORKFORCE DEVELOPMENT AND 
                   LITERACY PLAN.

       (a) In General.--The Governor of a State that desires to 
     receive a grant under one or more of the programs specified 
     in section 102(b) shall submit a strategic State workforce 
     development and literacy plan that provides policy guidance 
     with respect to workforce development programs operated in 
     the State, and that meets the requirements of this section to 
     the Secretary of Education and the Secretary of Labor.
       (b) Contents.--A State workforce development and literacy 
     plan shall include the following:
       (1) A description of the collaborative process under 
     section 103 used in developing the plan.
       (2) A statement of the goals of the State workforce 
     development and literacy system, that includes--
       (A) a description of how the State will progress toward 
     achieving the goals and purpose of this Act as established in 
     sections 3(a)(5) and 3(b);
       (B) an assessment of the needs of the State with regard to 
     current and projected demands for workers by occupation, the 
     skills and education levels of the workforce, the vocational 
     rehabilitation needs of individuals with severe disabilities 
     residing in the State, the skill and economic development 
     needs of the State, and an assessment of the type and 
     availability of youth development and career preparation, 
     workforce development, adult education, vocational 
     rehabilitation, and literacy programs and services in the 
     State; and
       (C) the identification of progress indicators, based on the 
     core indicators of performance described in section 110(f), 
     built upon a model of continuous improvement, that the State 
     will use to measure progress made by the State, local 
     workforce development boards, and other applicable local 
     entities who are recipients of financial assistance under 
     this Act in meeting such goals;
       (3) A description of how the State has complied, or will 
     comply, with the provisions of sections 105 through 108.
       (4) A description of how a State will participate in the 
     national labor market information system under title II of 
     the Wagner-Peyser Act, as added by section 132 of this Act.
       (5) Any information required to be included in the plan 
     under any of titles II through IV, and title I of the 
     Rehabilitation Act of 1973 (in the case of a State that 
     desires to receive a grant under any such title).
       (6) A description of the measures that will be taken by the 
     State to ensure coordination and consistency and avoid 
     duplication among programs receiving assistance under this 
     Act, including a description of common data collection and 
     reporting processes.
       (7) A description of the process used by the State to 
     provide an opportunity for public comment, and input into the 
     development of the plan, prior to submission of the plan.
       (8) A description of the process used by the State to 
     consult with representatives of business and industry with 
     respect to the requirements of subparagraphs (A), (B), and 
     (C) of paragraph (2) of this subsection.
       (9) Assurances that the State will provide 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 under this Act.
       (10) A description of the sanctions which the State may 
     impose (including restrictions from future participation or 
     consideration for funding) in instances where recipients of 
     funds under this Act fail to achieve agreed upon expected 
     performance levels, fail to adhere to State mandated fiscal 
     control and funds accounting procedures, or take or fail to 
     take other actions required under the State plan, contracts, 
     or other agreements.
       (c) Modifications to Plan.--A plan submitted by a State in 
     accordance with this section remains in effect until the 
     State submits to the Secretary such modifications as the 
     State determines necessary. This section applies to the 
     modifications to the same extent and in the same manner as 
     this section applies to the original plan.

     SEC. 105. ESTABLISHMENT OF WORKFORCE DEVELOPMENT AREAS.

       The Governor of a State that desires to receive a grant 
     under one or more of the programs specified in section 102(b) 
     shall, through the collaborative process established under 
     section 103 and after consultation with local chief elected 
     officials, and after consideration of comments received 
     through the public participation process as described in the 
     State plan, designate local workforce development areas 
     within the State taking into consideration the following:
       (1) Existing labor market areas.
       (2) Units of general local government.
       (3) Geographic areas served by local educational agencies 
     and intermediate educational agencies.
       (4) Geographic areas served by postsecondary institutions 
     and area vocational education schools.
       (5) Service delivery areas established under section 101 of 
     the Job Training Partnership Act (29 U.S.C. 1511) (as such 
     Act was in effect on the day before the date of the enactment 
     of this Act).
       (6) The distance that individuals will need to travel to 
     receive services from integrated career centers.

     SEC. 106. PROVISIONS REGARDING LOCAL WORKFORCE DEVELOPMENT 
                   BOARDS.

       (a) In General.--The Governor of a State that desires to 
     receive a grant under one or

[[Page 1383]]

     more of the programs specified in section 102(b) shall ensure 
     the establishment of a local workforce development board in 
     each local workforce development area within the State.
       (b) State Criteria.--The Governor, through the 
     collaborative process described under section 103, is 
     authorized to establish criteria for use by local chief 
     elected officials in the workforce development area, in the 
     selection of members of local workforce development boards, 
     in accordance with requirements prescribed under subsections 
     (c) and (d).
       (c) Representation Requirement.--Such criteria shall 
     require, at a minimum, that a local workforce development 
     board consist of--
       (1) a majority of members who are representatives of 
     business and industry, including individuals who are owners 
     of businesses, chief executives or chief operating officers 
     of private business, and other business executives with 
     optimum policymaking authority in local businesses, selected 
     from among nominees submitted by local business organizations 
     and trade associations;
       (2) an individual or individuals with disabilities, who 
     have special knowledge or expertise in the area of vocational 
     rehabilitation;
       (3) representatives of education and training, including 
     academic and vocational administrators, members of local 
     school boards, principals, teachers, postsecondary and other 
     adult education administrators and instructors, including 
     community colleges, local educational agencies, postsecondary 
     education institutions, and providers of job training and 
     workforce development services, selected from among 
     individuals nominated by regional or local educational 
     agencies, vocational education institutions, institutions of 
     postsecondary education (including community colleges), 
     providers of job training and workforce development services 
     (including private-for-profit providers), within the 
     workforce development area; and
       (4) representatives of community-based organizations, 
     employees, and veterans as nominated or recommended to the 
     board through a process established by the Governors through 
     the collaborative process.
       (d) Establishment of Board.--
       (1) Selection of board members.--
       (A) Single unit of local government in area.--In the case 
     of a workforce development area that is comprised of only one 
     unit of general local government, the chief elected official 
     of such unit is authorized to select the members of the local 
     workforce development board for such area, in accordance with 
     the State criteria developed pursuant to subsection (b).
       (B) Multiple units in area.--In the case of a workforce 
     development area that is comprised of more than one unit of 
     general local government, the chief elected officials of such 
     units are authorized to select the members of the local 
     workforce development board from the individuals so nominated 
     or recommended for such area in accordance with an agreement 
     entered into by such officials and with the State criteria 
     developed under subsection (b). In the absence of such an 
     agreement, the appointments are authorized to be made by the 
     Governor, through the collaborative process, from the 
     individuals so nominated or recommended.
       (2) Certification.--The Governor is authorized to 
     biennially certify one local workforce development board for 
     each workforce development area.
       (3) Exception.--In any case in which a local workforce 
     development area is a State, the individuals comprising the 
     Governor's collaborative process as described in section 103, 
     may be reconstituted to meet the requirements of this 
     section.
       (e) Duties of Local Workforce Development Board.--
       (1) Local workforce development plan.--Each local workforce 
     development board shall develop a biennial strategic plan and 
     provide policy guidance with respect to workforce development 
     programs operated within their respective workforce 
     development areas. Such strategic plan shall be consistent 
     with the State's collaborative workforce development and 
     literacy plan, be approved by the appropriate chief elected 
     official or officials, and be submitted to the Governor for 
     approval. If after a reasonable effort, a local workforce 
     development board is unable to obtain the approval of the 
     chief elected official or officials, the Board has the 
     authority to forward the plan, with the comments of the chief 
     elected official or officials, to the Governor for final 
     approval or disapproval. Such local plan shall include the 
     following:
       (A) Both short-term and long-term goals, and related 
     strategies, to ensure that workforce preparation and 
     development programs, including programs established pursuant 
     to this Act, title I of the Rehabilitation Act of 1973, and 
     the Wagner-Peyser Act, contribute to a coherent workforce 
     development system in the workforce development area.
       (B) A description of the performance measures to be used by 
     the local workforce development board for measuring the 
     performance of local service providers under chapter 2 of 
     title II, title III, and title I of the Rehabilitation Act of 
     1973, and the performance of integrated career center system 
     operators, with whom the Board contracts.
       (C) A description of the local integrated career center 
     system to be established in the workforce development area, 
     including--
       (i) a description of the process the local workforce 
     development board will use to designate or establish a career 
     center system which ensures that the most effective and 
     efficient service providers are chosen;
       (ii) an identification of the roles of individual workforce 
     development programs and programs authorized by the Wagner-
     Peyser Act; and
       (iii) a description of the funding sources to be used in 
     the operation of the career center system.
       (D) A description of strategies the local workforce 
     development board will undertake to fully involve local 
     employers, local educational agencies, postsecondary 
     education institutions, adult education and literacy 
     providers, local service providers, parents and other 
     consumers, including individuals with disabilities, and older 
     workers in the development of the workforce development 
     system.
       (E) Such other information as requested by the State.
       (2) Identification of occupations in demand and training 
     needs.--The local workforce development board shall use 
     available labor market information and other appropriate 
     methods in order to identify and assess the needs of the 
     workforce development area.
       (3) Budget and program oversight.--
       (A) Budgeting.--
       (i) The local workforce development board, working through 
     the State administrative agent, shall develop a budget for 
     the purpose of carrying out local programs established under 
     chapter 2 of title II, title III, and title I of the 
     Rehabilitation Act of 1973, and for integrated career center 
     systems established or designated under section 107 with the 
     exception of funds made available under the Wagner-Peyser 
     Act.
       (ii) Such budget shall be subject to the approval of the 
     appropriate chief elected official or officials in the 
     workforce development area.
       (B) Program oversight.--The local workforce development 
     board, in partnership with the chief elected official or 
     officials in the workforce development area, shall conduct 
     oversight of the workforce development programs listed in 
     subparagraph (A), and of the integrated career center system 
     established under this title.
       (4) Administration.--
       (A) Fiscal agent.--
       (i) The local workforce development board may receive and 
     disburse funds made available for carrying out programs 
     authorized under chapter 2 of title II, title III, and title 
     I of the Rehabilitation Act of 1973 of this Act, or the local 
     workforce development board may designate a fiscal agent 
     (which may include the State through a mutual agreement 
     between the local board and the State), for the purpose of 
     disbursement of funds to career centers and other service 
     providers, as designated by the local workforce development 
     board.
       (ii) The Board may employ its own staff, independent of 
     local programs and service providers, and may solicit or 
     accept grants and contributions from sources other than from 
     this Act.
       (B) Limitation.--The workforce development board, or 
     employees of such board, may not operate programs established 
     under this Act. The Governor is authorized to prohibit the 
     employees of agencies providing staff support to such local 
     workforce development boards from providing workforce 
     development services to individuals served through the use of 
     funds authorized under this Act, and under title I of the 
     Rehabilitation Act of 1973.
       (C) Conflict of interest.--A member of a workforce 
     development board may not--
       (i) discuss or participate in board consideration; or
       (ii) cast a vote;
     regarding the provision of services by such member (or by an 
     organization that such member represents) or regarding any 
     matter that would provide direct financial benefit to such 
     member. The Governor may enforce more rigorous conflict of 
     interest standards, as determined appropriate.
       (D) Independent authority.--
       (i) The Board shall elect its own chairperson from among 
     the members of the board.
       (ii) The board may adopt bylaws and other operating 
     procedures as consistent with the purposes of this Act, and 
     with the policies established in the State workforce 
     development and literacy plan.
       (5) Other.--The Governor may require local workforce 
     development boards to carry out such other duties as 
     determined to be appropriate by the Governor and the 
     individuals and entities described in section 103, through 
     the collaborative process described in the State plan.

     SEC. 107. ESTABLISHMENT OF INTEGRATED CAREER CENTER SYSTEMS.

       (a) In General.--The Governor of a State that desires to 
     receive a grant under one or more of the programs specified 
     in section 102(b) shall ensure that each local workforce 
     development board establish or designate an integrated career 
     center system in the workforce development area of such 
     board, consistent with criteria established under subsection 
     (b).
       (b) State Criteria.--The Governor, through the 
     collaborative process described under section 103, is 
     authorized to establish statewide criteria for use by local 
     workforce development boards in the designation or 
     establishment of integrated career center systems to ensure 
     that the most effective and efficient service providers are 
     chosen, con

[[Page 1384]]

     sistent with the requirements prescribed under subsection 
     (c).
       (c) Integrated Career Center System Requirements.--At a 
     minimum, integrated career center systems shall include--
       (1) common intake;
       (2) preliminary assessment;
       (3) integrated job search assistance;
       (4) to the extent practicable, as determined by the 
     Governor, unified and linked computer systems, including the 
     availability of labor market information as described under 
     title II of the Wagner-Peyser Act, as added by section 132 of 
     this Act, and linkages through uniform management information 
     systems; and
       (5) to the extent practicable, as determined by the 
     Governor, at least one physical, co-located site which 
     provides comprehensive and fully integrated workforce 
     development services to any individual seeking such services.
     Local workforce development areas are encouraged to establish 
     a network of comprehensive and fully-integrated co-located 
     career centers to provide the services described in 
     subsection (f), supplemented with multiple affiliated sites 
     or satellites that provide one or more of such services and 
     are linked through electronic and technological access 
     points. Such affiliated sites may include entities designated 
     as having a specialization in addressing special needs, such 
     as the needs of individuals with disabilities.
       (d) Common Access.--Information pertaining to the labor 
     market which is compiled pursuant to title II of the Wagner-
     Peyser Act, as added by section 132 of this Act, shall be 
     available, to the extent practicable, through integrated 
     electronic networks, at all integrated career centers and 
     affiliated sites.
       (e) Eligibility for Designation.--Any entity or consortium 
     of entities located in the workforce development area may be 
     designated by the local workforce development board to 
     operate an integrated career center or to participate in an 
     integrated career center system. Such entities may include 
     the following:
       (1) Institutions of higher education.
       (2) Area vocational education schools.
       (3) Local employment service offices, established under the 
     Wagner-Peyser Act.
       (4) Private nonprofit organizations, (including community-
     based organizations).
       (5) Private for-profit entities.
       (6) Agencies of local governments.
       (7) Other interested organizations and entities of 
     demonstrated effectiveness, including local chambers of 
     commerce and other business organizations, consistent with 
     State criteria established pursuant to subsection (b).
       (f) Duties.--Each integrated career center system shall, to 
     the extent practicable as determined by the Governor, carry 
     out the following duties:
       (1) Provision of core services.--An integrated career 
     center system shall make available the following information 
     and core services to individuals on a universal and 
     nondiscriminatory basis, with reasonable accommodations to 
     address the needs of individuals with disabilities, in the 
     workforce development area in which such center is located:
       (A) Outreach and intake for services provided under chapter 
     2 of title II, title III, subtitle A of title IV, and title I 
     of the Rehabilitation Act of 1973.
       (B) A preliminary assessment of the skill levels and the 
     need for services of the individual for programs under 
     chapter 2 of title II, title III, subtitle A of title IV, and 
     title I of the Rehabilitation Act of 1973 of individuals, 
     which may include such factors as basic skills, occupational 
     skills, career development skills, prior work experience, 
     employability, interests, aptitudes, vocational 
     rehabilitation needs, and supportive service needs.
       (C) Labor market information relating to local and State, 
     and if appropriate, to regional or national, occupations in 
     demand and skill requirements for such occupations, including 
     job listings for the local labor market.
       (D) Information relating to youth services, including 
     information on at-risk youth development and career 
     preparation programs authorized under title II, on vocational 
     education and school-to-work opportunities, and on youth 
     apprenticeship opportunities.
       (E) Career counseling and career planning based on a 
     preliminary assessment of the individual.
       (F) Job search assistance.
       (G) Information related to vocational rehabilitation 
     services, as provided for in title I of the Rehabilitation 
     Act of 1973.
       (H) Information relating to federally funded education and 
     job training programs (including registered apprenticeships), 
     and student aid programs, including the eligibility 
     requirements of and services provided by such programs.
       (I) Information on, and assistance in accessing referral to 
     additional services through programs providing adult 
     education and literacy services, vocational rehabilitation, 
     youth and adult workforce preparation and development, and 
     supportive services, including those programs authorized in 
     titles II through IV, title I of the Rehabilitation Act of 
     1973, available in the workforce development area.
       (J) Information on the extent to which the services 
     provided under titles II and III, subtitle A of title IV, and 
     title I of the Rehabilitation Act of 1973, meet or exceed the 
     expected levels of performance described in the State and 
     local plans, and the performance-based information provided 
     by the State to local workforce development boards on 
     certified providers of education and training, as required 
     under section 108(d)(3).
       (K) Acceptance of applications for unemployment 
     compensation.
       (L) Other appropriate activities to assist individuals into 
     employment.
       (2) Distribution of career grants.--A center or an 
     affiliated site may serve as the point of distribution of 
     career grants for education, training, and vocational 
     rehabilitation services to eligible individuals in accordance 
     with section 108.
       (3) Special arrangements.--For the purpose of providing 
     core services to individuals with severe disabilities in the 
     most effective and efficient manner possible, the integrated 
     career center system may arrange to have such core services 
     provided to an individual by a certified provider or the 
     State either on a contract basis or through the use of career 
     grants.
       (g) Additional Services.--Integrated career center systems, 
     may provide customized workforce development services to 
     employers on a fee-for-service basis, as determined by the 
     local workforce development board.
       (h) Alternative State Strategy.--Through the collaborative 
     process described in section 103, the Governor has the 
     authority to develop alternative strategies to the integrated 
     career center system, which are designed to accomplish the 
     full integration of workforce development programs. These 
     alternative strategies shall be described in a proposal to 
     the Secretaries of Education and Labor for joint review and 
     approval or disapproval not later than 60 days after the date 
     of receipt of such proposal.

     SEC. 108. IDENTIFICATION OF ELIGIBLE EDUCATION, TRAINING, AND 
                   VOCATIONAL REHABILITATION SERVICE PROVIDERS.

       (a) Eligibility Requirements.--A program offered by a 
     provider of education and training services shall be eligible 
     to receive funds under title III, and title I of the 
     Rehabilitation Act of 1973 through the receipt of career 
     grants, or through contract, if such program and provider--
       (1) is either--
       (A) eligible to participate in title IV of the Higher 
     Education Act of 1965, or
       (B) determined to be eligible under the procedures 
     described in subsection (b); and
       (2) provides the performance-based information required 
     pursuant to subsection (c), except that providers eligible 
     under subparagraph (A) only have to provide information for 
     programs other than programs leading to a degree.
       (b) Alternative Eligibility Procedure.--
       (1) In general.--The Governor shall establish an 
     alternative eligibility procedure for providers of education, 
     training, and vocational rehabilitation services (which may 
     include private sector, for profit and nonprofit providers of 
     such services) in any State desiring to receive funds under 
     title III of this Act and title I of the Rehabilitation Act 
     of 1973, but that are not eligible to participate in title IV 
     of the Higher Education Act of 1965. Such procedure shall 
     establish minimum acceptable levels of performance for such 
     providers, and be based on guidelines developed by the 
     Secretaries of Labor and Education. The Governor may utilize 
     such criteria to certify service providers as having the 
     ability to meet occupational skill standards promoted by the 
     National Skill Standards Board, or to meet, high, industry-
     recognized standards that result in a portable skill 
     certificate in the subject, occupation, or industry for which 
     training is provided, except where such standards are not 
     appropriate for the services rendered. The Governor shall 
     utilize the local workforce development boards, for the 
     identification of eligible qualified providers of education, 
     training, and vocational rehabilitation services. During a 
     transition period, not to exceed 2 years, identification of 
     eligible programs and providers under this subsection may be 
     based on the performance of such programs and providers under 
     the Job Training Partnership Act, the Rehabilitation Act of 
     1973, or other objective measures of previous performance, 
     such as employer evaluations.
       (2) Notwithstanding paragraph (1), if the participation of 
     an institution of higher education in any of the programs 
     under such title of such Act is terminated, such institution 
     shall not be eligible to receive funds under this Act for a 
     period of not less than two years.
       (c) Performance-Based Information.--The State shall 
     identify performance-based information that is to be 
     submitted by providers of services for programs to be 
     eligible under this section. Such information may include 
     information, relating to--
       (1) the percentage of students completing the programs 
     conducted by the provider;
       (2) the rates of licensure of graduates of the programs 
     conducted by the provider;
       (3) the percentage of graduates of the programs meeting 
     industry-recognized skill standards and certification 
     requirements that are at least as challenging as skill 
     standards endorsed by the National Skill Standards Board, 
     once such standards are available;
       (4) measures of program effectiveness such as the rates of 
     placement and retention in employment, and the earnings of 
     graduates of programs conducted by the provider, employer 
     evaluations of provider services, and adherence to accepted 
     industry quality standards (where available) by such 
     providers;
       (5) the percentage of students who obtained employment in 
     an occupation related to the program conducted by the 
     provider;

[[Page 1385]]

       (6) the warranties or guarantees provided by such provider 
     relating to the skill levels or employment to be attained by 
     students;
       (7) other information for providers of services under title 
     I of the Rehabilitation Act of 1973 that reflects the 
     priority of serving individuals with severe disabilities; and
       (8) the percentage of students who, as a result of 
     participation in the program demonstrate significant gains in 
     literacy and basic skills.
       (d) Administration.--
       (1) State agency.--The Governor is authorized to designate 
     a State agency to collect, verify, and disseminate the 
     performance-based information submitted pursuant to 
     subsection (c).
       (2) Application.--A provider of education and training 
     services that desires to be eligible to receive funds under 
     this title shall submit the information required under 
     subsection (c) to the State agency designated under paragraph 
     (1) of this subsection at such time and in such form as such 
     State agency may require.
       (3) List of eligible providers.--The State agency shall 
     compile a list of eligible programs and providers, 
     accompanied by the performance-based information submitted, 
     and disseminate such list and information to the local 
     workforce development boards and integrated career center 
     systems within the State.
       (4) Accuracy of information.--
       (A) In general.--If the State agency determines that 
     information concerning a provider is inaccurate, such 
     provider shall be disqualified from receiving funds under 
     this title for a period of not less than two years, unless 
     such provider can demonstrate to the satisfaction of the 
     Governor or his or her designee, that the information was 
     provided in good faith.
       (B) Appeal.--The Governor shall establish a procedure for a 
     service provider to appeal a determination by a State agency 
     that results in a disqualification under subparagraph (A). 
     Such procedure shall provide an opportunity for a hearing and 
     prescribe appropriate time limits to ensure prompt resolution 
     of the appeal.
       (5) Assistance in developing information.--The State agency 
     established pursuant to paragraph (1) may provide technical 
     assistance to education, training, and vocational 
     rehabilitation providers in developing the information 
     required under subsection (b). Such assistance may include 
     facilitating the utilization of State administrative records, 
     such as unemployment compensation wage records, and other 
     appropriate coordination activities.
       (e) On-The-Job Training Exception.--
       (1) In general.--Providers of on-the-job training are not 
     subject to the requirements of subsections (a), (b), (c), and 
     (d).
       (2) Collection and dissemination of information.--The 
     Workforce Development Board shall collect such performance-
     based information from on-the-job training providers as the 
     Governor may require, and disseminate such information to the 
     local integrated career center systems.
       (f) Rule of Construction Regarding State as Provider of 
     Services.--This section does not prohibit a State from being 
     a provider of education and training services under title 
     III, or under title I of the Rehabilitation Act of 1973, 
     subject to the State meeting the requirements of this section 
     for serving as such a provider.

     SEC. 109. MANAGEMENT INFORMATION SYSTEMS.

       (a) In General.--Each State is authorized to use a portion 
     of the funds it receives under this Act to design a unified 
     management information system that is in accordance with 
     guidelines established jointly by the Secretaries in 
     consultation with the Governors.
       (b) Requirements.--Each unified management information 
     system shall, to the extent practicable as determined by the 
     Governor--
       (1) be utilized for federally required fiscal reporting and 
     monitoring for each of the programs authorized under this 
     Act;
       (2) be used by all agencies involved in workforce 
     development activities, including integrated career center 
     systems which shall have the capability to track the overall 
     public investments within the State and workforce development 
     areas, and to inform policymakers as to the results being 
     achieved and the demographic characteristics of the 
     individuals served through that investment;
       (3) contain a common structure of financial reporting 
     requirements, fiscal systems and monitoring for all workforce 
     development expenditures included in the workforce 
     development system that shall utilize common data elements 
     and the definitions included in section 5;
       (4) support local efforts to establish workforce 
     development systems, including intake and eligibility 
     determination for all services; and
       (5) contain data on the demographic characteristics on the 
     participants served by programs authorized under this Act, 
     which shall be collected, produced, and published by the 
     Secretaries.
       (c) Privacy.--Nothing in this Act shall violate the 
     provisions of the Family Education Rights and Privacy Act 
     under section 444 of the General Education Provisions Act and 
     the privacy and confidentiality provisions under section 
     22(b) of title II of the Wagner Peyser Act as amended by this 
     Act.

     SEC. 110. PERFORMANCE ACCOUNTABILITY SYSTEM.

       (a) In General.--In order to promote high levels of 
     performance and to ensure an appropriate return on the 
     Nation's investment in the workforce development and literacy 
     system, each State receiving funds under this Act shall 
     develop, or have developed, a statewide performance 
     accountability system in accordance with the provisions of 
     this section.
       (b) Indicators of Performance.--
       (1) In general.--Each State receiving funds under this Act 
     shall identify indicators of performance for each of the 
     programs established under titles II through IV of this Act 
     and title I of the Rehabilitation Act of 1973, consistent 
     with State goals as described in the State plan in accordance 
     with section 104. Such indicators shall, at a minimum, 
     include the core indicators described in subsection (f), and 
     be expressed in an objective, quantifiable, and measurable 
     form. Such indicators may also include post-program surveys 
     measuring the satisfaction of both employers and program 
     participants.
       (2) Technical definitions of core indicators.--In order to 
     ensure nationwide comparability of performance data, the 
     Secretary of Labor and the Secretary of Education, in 
     collaboration with the States and with representatives of 
     business and industry, employees, educational agencies, 
     service providers, participants, parents and other interested 
     parties, shall promulgate technical definitions of each of 
     the core indicators described in subsection (f), to be used 
     under this Act in measuring performance.
       (c) Expected Levels of Performance.--
       (1) In general.--(A) Each State shall identify the level of 
     performance, consistent with State goals described under 
     section 104, that is expected for local workforce development 
     areas and other applicable local administrative entities 
     under this Act. In determining such levels, the State shall 
     take into account the challenging levels identified under 
     paragraph (2), and initially develop baseline levels of 
     performance upon which the State must demonstrate continuous 
     improvement.
       (B) The Governor, through the collaborative process, may 
     adjust the expected level of performance with respect to each 
     local area taking into account specific economic, 
     demographic, and geographic factors, and the characteristics 
     of the population to be served.
       (2) Challenging levels of performance.--In order to 
     encourage high levels of performance and advance the Nation's 
     competitiveness in the global economy, the Secretary of Labor 
     and the Secretary of Education, in collaboration with the 
     States and with representatives of business and industry, 
     employees, educational agencies, service providers, 
     participants, parents and other interested parties, shall 
     identify challenging levels of performance with respect to 
     the core indicators described in subsection (f). Where 
     applicable, such challenging levels of performance shall 
     reflect industry-recognized skill standards.
       (d) Report on Performance.--
       (1) In general.--The State shall report to the Secretary of 
     Labor and the Secretary of Education, the levels of 
     performance achieved by local workforce development areas and 
     other applicable local administrative entities with respect 
     to the indicators identified pursuant to subsection (b)(1) 
     for each program year. The Secretaries shall make such 
     information available to the general public through 
     publication and other appropriate methods, and shall 
     disseminate State-by-State comparisons, and comparisons with 
     other industrialized nations (where appropriate).
       (2) Reporting options.--In the collection and reporting of 
     such data, States are encouraged to utilize administrative 
     reporting data on quarterly earnings, establishment and 
     industry affiliation, and geographic location of employment, 
     such as unemployment insurance wage-data records.
       (e) Consequences for Poor Performance.--
       (1) Criteria.--The Governor, through the collaborative 
     process, is authorized to establish criteria for determining 
     whether local workforce development areas and other 
     applicable local administrative entities have failed to meet 
     expected levels of performance with respect to programs under 
     this Act.
       (2) Consequences for poor performance.--
       (A) State consequences.--If a State fails to meet expected 
     levels of performance for a program for any program year as 
     established pursuant to subsection (a), the Secretary of 
     Education or the Secretary of Labor, as appropriate to the 
     particular program, may provide technical assistance, 
     including assistance in the development of a performance 
     improvement plan. If such failure continues for a second 
     consecutive year, the appropriate 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 
     expected levels of performance.
       (B) Local consequences.--(i) If a local workforce 
     development area, or other applicable local administrative 
     entity, fails to meet expected levels of performance for a 
     program for any program year under the criteria established 
     in paragraph (1), the Governor, through the collaborative 
     process, may provide technical assistance, including the 
     development of a performance improvement plan.
       (ii) If such failure continues for a second consecutive 
     year, the Governor may take corrective actions, such as the 
     withholding of funds, the redesignation of a local 
     administrative entity, or such other actions as the Governor, 
     through the collaborative process,

[[Page 1386]]

     determines are appropriate, consistent with State law, 
     section 104(c)(3) of this Act, and the requirements of this 
     Act.
       (f) Core Indicators of Performance.--
       (1) Common core indicators for adults.--In addition to the 
     core indicators of performance described in paragraph (2), 
     common core indicators of performance for programs conducted 
     under titles III and IV of this Act, and under title I of the 
     Vocational Rehabilitation Act of 1973 shall be weighted and 
     applied to each of the individual programs, according to the 
     purposes of such titles, and include measures of--
       (A) placement in unsubsidized employment;
       (B) retention in unsubsidized employment for not less than 
     6 months and for not less than 12 months, respectively;
       (C) increases in earnings, or in earnings in combination 
     with employer-assisted benefits;
       (D) attainment of industry-recognized occupational skills, 
     including basic workplace competencies and industry-
     recognized skill standards, which may include the acquisition 
     of a skill certificate in the occupation for which the 
     individual has been prepared;
       (E) attainment of a high school diploma, a general 
     equivalency diploma, or a certificate of completion of a 
     program authorized under the Rehabilitation Act of 1973; and
       (F) such other measures of performance that the State may 
     wish to collect.
       (2) Additional core indicators for adults.--
       (A) Adult employment and training programs.--In addition to 
     the common core indicators described in paragraph (1), the 
     core indicators of performance for programs conducted under 
     title III shall include measures of the success of 
     individuals with barriers to employment, including dislocated 
     workers, economically disadvantaged individuals, older 
     workers, individuals with disabilities, displaced homemakers, 
     veterans, and individuals who are basic skills deficient, in 
     achieving performance goals established pursuant to this Act.
       (B) Adult education and family literacy programs.--In 
     addition to the common core indicators described in paragraph 
     (1), the core indicators of performance for programs 
     conducted under title IV shall include measures of--
       (i) the number of individuals who, as a result of 
     participation in programs funded under this Act, demonstrate 
     significant gains in literacy skills; and
       (ii) such other measures of performance that the State may 
     wish to collect, including measures of the success of family 
     literacy programs, increased English language skills, and 
     increased community involvement.
       (C) Programs established under title i of the 
     rehabilitation act of 1973.--In addition to the common core 
     indicators described in paragraph (1), the core indicators of 
     performance for programs conducted under title I of the 
     Rehabilitation Act of 1973 shall include measures of the 
     success of individuals with severe disabilities, including 
     those individuals determined to have a disability under title 
     II or title XVI of the Social Security Act, in achieving 
     performance goals established pursuant to this Act.
       (3) Core indicators for youth development and career 
     preparation programs.--The core indicators of performance for 
     programs conducted under title II shall include measures of--
       (A) attainment of challenging State academic standards;
       (B) attainment of a high school diploma or a general 
     equivalency diploma;
       (C) attainment of industry-recognized occupational skills, 
     including basic workplace competencies and industry-
     recognized skill standards, which may include the acquisition 
     of a skill certificate in the occupation for which the 
     individual has been prepared; if such skill certificate is 
     acquired in addition to or in combination with a high school 
     diploma or general equivalency diploma;
       (D) reduction in school dropout rates;
       (E) positive results such as placement in postsecondary 
     education or advanced training, military service, employment, 
     or registered apprenticeships;
       (F) the success of individuals described under section 
     201(12) in achieving performance goals established pursuant 
     to this Act, including placement in nontraditional training 
     and employment; and
       (G) such other measures of performance that the State may 
     wish to collect.

     SEC. 111. LIMITATION ON FEDERAL REGULATIONS.

       The Secretary of the Department of Labor and the Secretary 
     of the Department of Education shall issue regulations under 
     this Act only to the extent that such regulations are 
     necessary to ensure that there is compliance with the 
     specific requirements of this Act.

     SEC. 112. GENERAL PROVISION.

       Nothing in this Act shall mandate that any individual, 
     particularly youth served under title II of this Act, be 
     required to choose a specific career path or major or to meet 
     federally funded or endorsed industry-recognized skill 
     standards or attain federally funded or endorsed skill 
     certificates.

     SEC. 113. LIABILITY.

       Expenditures that are disallowed by the Secretary of Labor 
     or the Secretary of Education, as the case may be (except in 
     the case of fraud, embezzlement, or other criminal 
     activities), under chapter 2 of title II, title III, or under 
     title I of the Rehabilitation Act of 1973, may be repaid from 
     funds allocated under such chapter or title for which such 
     disallowance occurs, in subsequent program years or fiscal 
     years, as appropriate, after the year in which such 
     disallowance occurred. The amount of funds repaid should be 
     equal to the amount of funds disallowed.
              Subtitle B--Amendments to Wagner-Peyser Act

     SEC. 131. GENERAL PROGRAM REQUIREMENTS.

       (a) Definitions.--Section 2 of the Act of June 6, 1933 
     (commonly known as the ``Wagner-Peyser Act'') (29 U.S.C. 49a) 
     is amended--
       (1) in paragraph (1), by striking ``Job Training 
     Partnership Act'' and inserting ``Consolidated and Reformed 
     Education, Employment, and Rehabilitation Systems Act'';
       (2) in paragraph (2) to read as follows:
       ``(2) the term `local workforce development board' means a 
     local workforce development board established under title I 
     of the Consolidated and Reformed Education, Employment, and 
     Rehabilitation Systems Act;'';
       (3) in paragraph (4) to read as follows:
       ``(4) the term `local workforce development area' means a 
     local workforce development area established under title I of 
     the Consolidated and Reformed Education, Employment, and 
     Rehabilitation Systems Act;'';
       (4) in paragraph (5), by striking the period at the end and 
     inserting a semicolon; and
       (5) by adding at the end the following new paragraphs:
       ``(6) the term `public employment office' means an office 
     which provides employment services to the general public as 
     part of an integrated career center system; and
       ``(7) the term `integrated career center system' means an 
     integrated career center system established under title I of 
     the Consolidated and Reformed Education, Employment, and 
     Rehabilitation Systems Act.''.
       (b) Duties.--Section 3(a) of such Act (29 U.S.C. 49b(a)) is 
     amended to read as follows:
       ``(a) The Secretary of Labor shall, pursuant to title II of 
     this Act--
       ``(1) assist in the coordination and development of a 
     nationwide system of labor exchange services for the general 
     public, which, to the extent practicable, shall be done 
     through the private sector;
       ``(2) assist in the development of performance standards, 
     benchmarks, and continuous improvement models for such 
     nationwide system which ensures private sector satisfaction 
     and meets the demands of jobseekers; and
       ``(3) ensure the continued services for individuals 
     receiving unemployment compensation.''.
       (c) Requirements for Receipt of Funds.--Section 4 of such 
     Act (29 U.S.C. 49c) is amended by striking ``a State shall, 
     through its legislature'' and inserting ``the Governor of a 
     State shall, through the collaborative process described in 
     title I of the Consolidated and Reformed Education, 
     Employment, and Rehabilitation Systems Act''.
       (d) Authorization of Appropriations.--Section 5 of such Act 
     (29 U.S.C. 49d) is amended by inserting before the period at 
     the end the following: ``, of which not less than 25 percent 
     shall be for carrying out both section 14 and title II of 
     this Act''.
       (e) Use of Funds Under This Act.--Section 7(c)(2) of such 
     Act (29 U.S.C. 49f(c)(2)) is amended by striking ``any of the 
     following provisions of law'' and all that follows and 
     inserting ``the Consolidated and Reformed Education, 
     Employment, and Rehabilitation Systems Act.''.
       (f) State Plan.--Section 8 of such 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 
     workforce development and literacy plan authorized under 
     title I of the Consolidated and Reformed Education, 
     Employment, and Rehabilitation Systems Act, detailed plans 
     for carrying out the provisions of this Act within such 
     State.'';
       (2) by striking subsections (b), (c), and (e); and
       (3) by redesignating subsection (d) as subsection (b).
       (g) Elimination of Federal Advisory Council.--Section 11 of 
     such Act (29 U.S.C. 49j) is hereby repealed.
       (h) Conforming Amendments.--
       (1) Such Act is amended by inserting after section 2 the 
     following new heading:
               ``TITLE I--GENERAL PROGRAM REQUIREMENTS''.
       (2) Section 4 of such Act is amended by striking ``United 
     States Employment Service'' and inserting ``Secretary of 
     Labor''.
       (3) Section 7(b)(2) of such Act is amended by striking 
     ``private industry council'' and inserting ``local workforce 
     development board''.
       (4) Section 7(d) of such Act is amended--
       (A) by striking ``United States Employment Service'' and 
     inserting ``Secretary of Labor''; and
       (B) by striking ``Job Training Partnership Act'' and 
     inserting ``Consolidated and Reformed Education, Employment, 
     and Rehabilitation Systems Act''.
       (5) Section 12 of such Act is amended by striking ``The 
     Director, with the approval of the Secretary of Labor,'' and 
     inserting ``The Secretary of Labor''.

     SEC. 132. LABOR MARKET INFORMATION.

       The Act of June 6, 1933 (commonly known as the ``Wagner-
     Peyser Act''; 29 U.S.C. 49), as amended by section 131, is 
     further amended by adding at the end the following new title:
                  ``TITLE II--LABOR MARKET INFORMATION

     ``SEC. 21. PURPOSE.

       ``The purpose of this title is to ensure a comprehensive 
     and coordinated system of labor market information which will 
     provide locally based, accurate, up-to-date, easily ac

[[Page 1387]]

     cessible, and user friendly labor market information through 
     a cooperative Federal, State, and local governance structure 
     which includes partnerships with the private sector at all 
     levels.

     ``SEC. 22. SYSTEM CONTENT.

       ``(a) In General.--The Secretary of Labor, in accordance 
     with the provisions of this title, shall oversee the 
     development, maintenance, and continuous improvement of a 
     nationwide system of labor market information using 
     statistically valid data, which include--
       ``(1) statistical data from survey and projection programs 
     and data from administrative reporting systems, which, taken 
     together, enumerate, estimate, and project the supply and 
     demand for labor at Federal, State, and local levels in a 
     timely manner, including data, which may be aggregated by 
     demographic characteristics, on--
       ``(A) the socioeconomic characteristics, and current 
     employment status of the population, including self-employed, 
     part-time, and seasonal workers, and individuals with severe 
     disabilities, as such data are available from the Bureau of 
     Census and other sources;
       ``(B) job vacancies, education and training requirements, 
     skills, wages, benefits, working conditions, and industrial 
     distribution of occupations, as well as current and projected 
     employment opportunities and trends by industry and 
     occupation;
       ``(C) the educational attainment, training, skills, skill 
     levels, and occupations of the population aggregates, as such 
     data area are available from the Bureau of Census and other 
     sources;
       ``(D) information (such as unemployment insurance wage data 
     records) maintained in a longitudinal manner on the quarterly 
     earnings, establishment and industry affiliation, and 
     geographic location of employment; and
       ``(E) the incidence, industrial and geographical location, 
     and number of workers displaced by permanent layoffs and 
     plant closings;
       ``(2) State and local employment and consumer information 
     on--
       ``(A) job openings, locations, hiring requirements, and 
     application procedures, as well as profiles of employers in 
     the local labor market describing the nature of work 
     performed, employment requirements, wages, benefits, and 
     hiring patterns as such information is volunteered by 
     employers;
       ``(B) aggregate data on job seekers, including their 
     education and training, skills, skill levels, employment 
     experience, and employment goals; and
       ``(C) education courses, training programs, job placement 
     programs, and vocational rehabilitation programs (where 
     appropriate), including--
       ``(i) program performance information as required by this 
     Act, such as summary data on program completion, acquisition 
     of industry-recognized skill standards, job placement, 
     earnings, and the level of satisfaction of the participants 
     and their employers; and
       ``(ii) descriptive information on programs, such as 
     eligibility requirements, costs, financial support, or other 
     supportive services, and other appropriate information which 
     may be available with these courses and programs;
       ``(3) technical standards for data and information that 
     will--
       ``(A) as a minimum guarantor of data usefulness and 
     quality, ensure compatibility and additivity of data and 
     information to enable comparisons among localities and 
     States;
       ``(B) support standardization and aggregation of data and 
     information from the administrative reporting systems of 
     employment-related programs; and
       ``(C) include--
       ``(i) classification and coding systems for industries, 
     occupations, skills, programs, and courses;
       ``(ii) nationally standardized definitions of terms;
       ``(iii) a common system for designating geographic areas;
       ``(iv) quality control mechanisms for data collection and 
     analysis; and
       ``(v) common schedules for data collection and 
     dissemination;
       ``(4) analysis of data and information for uses including--
       ``(A) Federal, State, and local economic policymaking;
       ``(B) the implementation of Federal policies, including the 
     allocation of Federal funds to States and localities and the 
     facilitation of job search and hiring in local labor markets;
       ``(C) Federal, State, and local program planning and 
     evaluation; and
       ``(D) research on labor market dynamics;
       ``(5) dissemination mechanisms for data and analysis, 
     including mechanisms which may be standardized among the 
     States and technical standards in the design of automated 
     databases, and the design of user interfaces and 
     communications protocols;
       ``(6) programs of technical assistance for States and 
     localities in the development, maintenance, and utilization 
     of data, analysis, and dissemination mechanisms, including 
     assistance in adopting and utilizing automated systems and 
     improving the access, through electronic and other means, of 
     youth, adults, and employers to labor market information for 
     localities, States, and the Nation;
       ``(7) programs of research and demonstration, which may be 
     carried out by States and other public or private entities, 
     on ways to improve the products and processes authorized in 
     this title; and
       ``(8) objective performance measures, which will allow for 
     the continuous monitoring of the progress of the labor market 
     information system at national, State, and local levels.
       ``(b) Information To Be Confidential.--
       ``(1) In general.--No officer or employee of the Federal 
     Government or agent of the Federal Government may--
       ``(A) use the information furnished under the provisions of 
     this title for any purpose other than the statistical 
     purposes for which it is supplied;
       ``(B) make any publication whereby the data contained in 
     the information so furnished under this title can be used to 
     identify any individual; or
       ``(C) permit anyone other than the sworn officers and 
     employees of any Federal department or agency to examine the 
     individual reports.
       ``(2) Immunity from legal process.--Any information which 
     is collected and retained for purposes under this title shall 
     be immune from the legal process and shall not, without the 
     consent of the individual concerned, be admitted as evidence 
     or used for any purpose in any action, suit, or other 
     judicial or administrative proceeding.

     ``SEC. 23. FEDERAL RESPONSIBILITIES.

       ``(a) In General.--The Nation's labor market information 
     system shall be planned, administered, overseen, and 
     evaluated by a cooperative governance structure involving the 
     Federal Government, States, and local entities.
       ``(b) Duties.--The Secretary, with respect to data 
     collection, analysis, and dissemination of labor market 
     information, shall carry out the following duties:
       ``(1) Ensure that all statistical and administrative data 
     collection activities within the Department of Labor, 
     including the Employment and Training Administration, 
     Veterans' Employment and Training Service, Employment 
     Standards Administration, and the Occupational Health and 
     Safety Administration, are consistent with those of the 
     Bureau of Labor Statistics.
       ``(2) Assign responsibilities, as appropriate, to agencies 
     such as the Employment and Training Administration to work 
     with the Bureau of Labor Statistics in the collection, 
     analysis and, particularly, in the dissemination of labor 
     market information, and in the provision of training and 
     technical assistance to users of information, including the 
     States, employers, youth, and adults.
       ``(3) In cooperation with other Federal agencies, including 
     the Department of Commerce, Department of Defense, Department 
     of the Treasury, Department of Education, Department of 
     Health and Human Services, Department of Agriculture, 
     Department of Veterans' Affairs, and the Office of Management 
     and Budget, establish and maintain mechanisms for ensuring 
     complementarity and nonduplication in the development and 
     operation of statistical and administrative data collection 
     activities, in order to ensure a comprehensive labor market 
     information system.
       ``(4) Actively seek the participation of other Federal 
     agencies, particularly the National Center for Education 
     Statistics and the Division of Adult and Vocational 
     Education, and the Rehabilitation Services Administration of 
     the Department of Education, the Veterans' Employment and 
     Training Service of the Department of Labor and the 
     Department of Veterans' Affairs with respect to vocational 
     rehabilitation programs in the design and provision of 
     standardized information to the States to support section 
     22(2), and in the dissemination of labor market information.
       ``(5) Establish confidentiality standards for the labor 
     market information system at Federal, State, and local 
     levels, including such provisions as may be necessary, to be 
     taken in coordination with the States, to ensure that privacy 
     and confidentiality protections are guaranteed with respect 
     to individuals and firm data.
       ``(c) Additional Duties.--The Secretary, in collaboration 
     with the Bureau of Labor Statistics, with the assistance of 
     other agencies of the Department where appropriate, shall--
       ``(1) establish and maintain, with the cooperation of the 
     States, elements of the system described in sections 22(a)(1) 
     and 22(a)(3);
       ``(2) develop and promulgate standards, definitions, 
     formats, collection methodologies, and other necessary system 
     elements for the use of the States in their assembling and 
     presentation of the employment information specified in 
     section 22(a)(2);
       ``(3) eliminate gaps and duplication in statistical 
     undertakings, with the systemization of wage surveys as an 
     early priority;
       ``(4) recommend any needed improvements in administrative 
     reporting systems to support the development of labor market 
     information from their data; and
       ``(5) ensure that--
       ``(A) data are sufficiently timely relevant to employers 
     and other users, and locally detailed for uses including 
     those specified in section 22(a)(4);
       ``(B) administrative records are standardized to facilitate 
     the aggregation of data from local to State and national 
     levels and to support the creation of new statistical series 
     from program records; and
       ``(C) paperwork and reporting requirements on employers and 
     individuals are reduced.

     ``SEC. 24. ANNUAL PLAN.

       ``(a) In General.--The Secretary of Labor, in collaboration 
     with the Bureau of Labor Statistics, and with assistance of 
     other ap

[[Page 1388]]

     propriate Federal agencies, shall prepare an annual plan to 
     be the operational mechanism for achieving a cooperative 
     Federal/State governance structure for labor market 
     information and provide the written justification for the 
     Department of Labor's budget request to Congress by 
     describing the activities and priorities of the Bureau of 
     Labor Statistics, other offices within the Department of 
     Labor, and other Federal agencies with regard to data 
     collection, analysis, and dissemination of labor market 
     information for fiscal years succeeding the fiscal year in 
     which the plan is developed and shall include--
       ``(1) the results of a periodic review of users' needs and 
     priorities, including the identification of new employment 
     issues and the attendant emergence of new needs, on the part 
     of Congress, the States, employers, youth, and adults, for 
     data, analysis, and dissemination;
       ``(2) an evaluation, including the results of objective 
     measures, of the performance of the labor market information 
     system in meeting these needs and the steps to be taken to 
     overcome deficiencies;
       ``(3) a summary of ongoing data programs and activities 
     under section 22 and a description of the development of new 
     data programs, analytical techniques, definitions and 
     standards, dissemination mechanisms, training and technical 
     assistance, governance mechanisms, and funding processes to 
     meet new needs; and
       ``(4) the results of an annual review of the costs to the 
     States of meeting contract requirements for data production 
     under this title, including a description of how the 
     Secretary's requested budget will cover these costs.
       ``(b) Cooperation With the States.--The Secretary and the 
     Bureau of Labor Statistics, in cooperation with the States, 
     shall develop the plan by--
       ``(1) establishing procedures and mechanisms for holding 
     formal and periodic consultations on products and 
     administration of the system, at least once each quarter, 
     with representatives of employers as well as with 
     representatives of the States from each of the 10 Federal 
     regions of the Department of Labor, elected by and from among 
     the State directors of labor market information, according to 
     a process set forth by the Secretary; and
       ``(2) incorporating in the annual plan, for its submission 
     to Congress, the results of these consultations, including 
     any supplementary or dissenting views from representatives of 
     the States.
       ``(c) Representatives of States Deemed To Be Federal 
     Employees.--For purposes of the development of the annual 
     plan and to meet the provisions of Office of Management and 
     Budget Circular A-11, the representatives of the States, in 
     accordance with subsection (b)(1), shall be considered to be 
     employees of the Department of Labor.

     ``SEC. 25. GOVERNOR'S RESPONSIBILITIES.

       ``(a) Designation of State Agency.--The Governor of each 
     State shall designate a single State agency to be the agency 
     responsible for the management and oversight of a statewide 
     comprehensive labor market information system and for the 
     State's participation in the cooperative Federal/State 
     governance structure for the nationwide labor market 
     information system.
       ``(b) Duties.--In order to receive Federal financial 
     assistance under this Act, the State agency shall--
       ``(1) develop, maintain, and continuously improve a 
     comprehensive labor market information system, which shall--
       ``(A) include all the elements specified in section 22; and
       ``(B) be responsive to the needs of the State and its 
     localities for planning and evaluative data, including 
     employment and economic analyses and projections, as required 
     by this Act, the Consolidated and Reformed Education, 
     Employment, and Rehabilitation Systems Act, the Social 
     Security Act, and other provisions of law which require the 
     use of labor market information;
       ``(2) ensure the performance of contract and grant 
     responsibilities for data collection, analysis, and 
     dissemination;
       ``(3) conduct such other data collection, analysis, and 
     dissemination activities as will ensure comprehensive State 
     and local labor market information;
       ``(4) actively seek the participation of other State and 
     local agencies, with particular attention to State education, 
     economic development, human services, and welfare agencies, 
     in data collection, analysis, and dissemination activities in 
     order to ensure complementarity and compatibility among data; 
     and
       ``(5) participate in the development of the national annual 
     plan.''.
                     Subtitle C--General Provisions

     SEC. 141. WORKER RIGHTS.

       The following requirements shall apply to programs under 
     titles II and III of this Act:
       (1) Prohibition on displacement.--A participant in a 
     program under titles II or III shall not displace any 
     currently employed worker (including a partial displacement, 
     such as a reduction in the hours of non-overtime work, wages, 
     or employment benefits).
       (2) Prohibition on impairment of contracts.--A program 
     under title II or III shall not impair existing contracts for 
     services or collective bargaining agreements, and no such 
     program 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) Prohibition on replacement.--A participant in a program 
     under title II or III shall not be employed--
       (A) when any other individual is on temporary layoff, with 
     the clear possibility of recall, from the same or any 
     substantially equivalent job with the participating employer; 
     or
       (B) when 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 student.
       (4) Workplaces.--A participant in a program under title II 
     or III shall be provided with adequate and safe equipment and 
     safe and healthful workplaces in conformity with all health 
     and safety requirements of Federal, State, and local law.
       (5) Effect on other laws.--Nothing in this Act shall be 
     construed to modify or affect any Federal or State law 
     prohibiting discrimination on the basis of race, religion, 
     color, ethnicity, national origin, gender, age, or 
     disability, or to modify or affect any right to enforcement 
     of this Act that may exist under other Federal laws, except 
     as expressly provided by this Act.

     SEC. 142. TRANSFERABILITY.

       The Governor, through the collaborative process, has the 
     authority to transfer not more than 10 percent of the total 
     allotment to a State under title II or title III of this Act, 
     between such titles. Funds transferred under this authority 
     must be distributed to local providers in accordance with the 
     provisions of title II and III of this Act.
 TITLE II--YOUTH DEVELOPMENT AND CAREER PREPARATION CONSOLIDATION GRANT

     SEC. 201. PURPOSES.

       It is the purpose of this title to provide States and local 
     communities maximum flexibility in designing youth 
     development and career preparation programs that--
       (1) help youth attain the academic foundation and 
     occupational skills needed to be successful in a competitive 
     economy and to complete a high school diploma or general 
     equivalency diploma;
       (2) best suit the needs of in-school and at-risk youth in 
     their communities;
       (3) promote strong connections between in-school and at-
     risk programs, to ensure that youth are prepared for further 
     education opportunities and good jobs, and promote youth 
     development and career preparation programs that provide 
     opportunities for youth to receive postsecondary education 
     and occupational training;
       (4) promote the formation of education and business 
     partnerships that are dedicated to linking the worlds of 
     school and work; and
       (5) promote high academic and occupational standards and 
     quality vocational-technical education, including improved 
     secondary and postsecondary programs, by focusing resources 
     on program improvement initiatives that help prepare youth 
     for further education, training, and high-wage jobs in high-
     performance workplaces.

     SEC. 202. DEFINITIONS.

       For purposes of this title:
       (1) The term ``administration'' means activities of a State 
     necessary for the proper and efficient performance of its 
     duties under this title, including supervision, but does not 
     include curriculum development activities, personnel 
     development, or research activities.
       (2) The term ``all aspects of the industry'' means strong 
     experience in, and understanding of, all aspects of the 
     industry that youth are preparing to enter, including 
     planning, management, finances, technical and production 
     skills, underlying principles of technology, labor issues, 
     and health and safety.
       (3) The term ``articulation agreement'' means a commitment 
     to a program designed to provide students with a 
     nonduplicative sequence of progressive coursework in 
     secondary and postsecondary education.
       (4) The term ``cooperative education'' means a method of 
     instruction of education for youth who, through written 
     cooperative arrangements between the school and employers, 
     receive instruction, including required academic courses and 
     related instruction by alternation of study in school with a 
     job in any occupational field. Such alternation shall be 
     planned and supervised by the school and employers so that 
     each contributes to the youth's education and employability. 
     Work periods and school attendance may be on alternate half 
     days, full days, weeks, or other periods of time in 
     fulfilling the cooperative program.
       (5) The term ``corrections vocational education'' means 
     programs administered by the State to assist juvenile and 
     adult criminal offenders in correctional institutions in the 
     State, including correctional institutions operated by local 
     authorities.
       (6) The term ``curricula'' means instructional and related 
     or supportive material, including materials using advanced 
     learning technology, in any occupational field which is 
     designed to strengthen the academic foundation and prepare 
     youth for employment at the entry level or to upgrade 
     occupational competencies of those previously or presently 
     employed in any occupational field, and appropriate 
     counseling and guidance material.
       (7) Except as otherwise provided, the term ``eligible 
     institution'' means a local educational agency, an area 
     vocational education school, an intermediate educational 
     agency, an institution of higher education (as such term is 
     defined in section 1201(a) of the Higher Education Act of 
     1965), a State corrections educational agency, or consortia 
     of such entities.

[[Page 1389]]

       (8) The term ``partnership'' means a local entity that is 
     responsible for local youth development and career 
     preparation programs and may consist of parents, employers, 
     representatives of local educational agencies and local 
     postsecondary educational institutions (including 
     representatives of area vocational education schools, where 
     applicable), local educators (such as teachers, counselors, 
     or administrators), representative employee organizations, 
     students, and may include other entities.
       (9) The term ``Secretary'' means the Secretary of 
     Education.
       (10) The term ``sequential course of study'' means an 
     integrated series of courses which are directly related to 
     the educational and occupational skill preparation of youth 
     for jobs, or preparation for postsecondary education.
       (11) The term ``single parent'' means an individual who--
       (A) is unmarried or legally separated from a spouse; and
       (B)(i) has a minor child or children for whom the parent 
     has either custody or joint custody; or
       (ii) is pregnant.
       (12) The term ``special populations'' includes individuals 
     with disabilities, economically disadvantaged individuals, 
     individuals of limited English proficiency, and individuals 
     who are eligible for nontraditional training and employment.
       (13) The term ``tech-prep education program'' means a 
     program of study which--
       (A) combines at least 2 years of secondary and 2 years of 
     postsecondary education in a nonduplicative sequential course 
     of study;
       (B) integrates academic and vocational instruction;
       (C) provides technical preparation in at least 1 field of 
     engineering technology, applied science, mechanical, 
     industrial, or practical arts or trade, or agriculture, 
     health occupations, or business;
       (D) builds student competence in mathematics, science, 
     communications, and workplace skills, through applied 
     academics and integrated instruction in a coherent sequence 
     of courses;
       (E) leads to an associate degree or certificate in a 
     specific career field;
       (F) leads to placement in appropriate employment or further 
     education; and
       (G) enables a student to fulfill a career relating to labor 
     market needs.
       (14) The term ``vocational education'' means organized 
     educational programs offering a sequence of courses which are 
     directly related to the preparation of youth in paid or 
     unpaid employment in current or emerging occupations, 
     including nonbaccalaureate certificate and degree programs 
     and baccalaureate vocational degree programs. Such programs 
     include competency-based applied learning which contributes 
     to a youth's academic knowledge, higher-order reasoning, and 
     problem-solving skills, work attitudes, general employability 
     skills, and the occupational-specific skills necessary for 
     economic independence as a productive and contributing member 
     of society. Such term also includes applied technology 
     education.
       (15) The term ``vocational student organizations'' means 
     those organizations for individuals enrolled in vocational 
     education programs which engage in activities as an integral 
     part of the instructional program. Such organizations may 
     have State and national units which aggregate the work and 
     purposes of instruction in vocational education at the local 
     level.
                       Subtitle A--State Funding

     SEC. 211. NATIONAL AND STATE FUNDING.

       (a) National Programs.--In each fiscal year, of the amounts 
     made available under section 4, the Secretary is authorized 
     to reserve 20 percent or $25,000,000, whichever is less, to 
     carry out the provisions of subtitle D.
       (b) State Allotment.--
       (1) In general.--Of the funds remaining after the 
     reservation under subsection (a), the Secretary shall allot 
     to each State for each fiscal year an amount based on that 
     State's allotment percentage.
       (2) Allotment percentage.--(A) Except as provided in 
     subparagraph (B), the allotment percentage of a State for a 
     fiscal year shall be the same percentage of funds allotted to 
     the State under this section in the preceding fiscal year.
       (B) The allotment percentage of a State for fiscal year 
     1996 shall be the percentage of funds allotted to the State 
     in fiscal year 1995 under--
       (i) section 101, 101A, or 343(b), of the Carl D. Perkins 
     Vocational and Applied Technology Education Act as such Act 
     was in effect on the day before the date of the enactment of 
     this Act; and
       (ii) the funding allotted in fiscal year 1995 under section 
     252 and 262 of the Job Training Partnership Act as such Act 
     was in effect on the day before the date of the enactment of 
     this Act.
       (3) State minimum.--Notwithstanding any other provision of 
     law and subject to paragraph (1), any fiscal year for which 
     the amounts appropriated for programs authorized by this 
     title exceed the amounts available under subparagraph (B) for 
     fiscal year 1995, a State shall receive not less than one-
     quarter of one percent of the amount available for each such 
     program for that fiscal year under this subsection. Amounts 
     necessary for increasing such payments to States to comply 
     with the preceding sentence shall be obtained by ratably 
     reducing the amounts to be paid to other States.
       (4) Federal funds to supplement, not supplant, non-federal 
     funds.--Funds received under this title shall be used only to 
     supplement the amount of funds that would, in the absence of 
     such Federal funds, be made available from non-Federal 
     sources for the education of youth participating in programs 
     assisted under this title, and not to supplant such funds.
       (5) Definition.--For the purposes of this subsection the 
     term ``State'' means, in addition to the several States, the 
     District of Columbia, the Commonwealth of Puerto Rico, the 
     Virgin Islands, Guam, American Samoa, and the Northern 
     Mariana Islands.
       (c) Funding for State Programs.--Of the funds allotted to a 
     State under subsection (b) for each fiscal year, the 
     Governor, through the collaborative process, shall--
       (1) make available not less than 90 percent to local 
     providers;
       (2) make available not more than 8 percent for State 
     programs described in section 222; and
       (3) make available not more than 2 percent for 
     administrative purposes at the State level.
       (d) Proviso.--None of the funds made available under this 
     title shall be used to compel any youth to pursue a specific 
     career or to attain a federally funded or endorsed skill 
     certificate. Youth participating in programs under this title 
     shall be eligible to change their course of study and 
     training.

     SEC. 212. WITHIN STATE ALLOCATION.

       (a) In General.--
       (1) Allocation of funds.--From the amounts made available 
     pursuant to section 211(c)(1), the Governor, through the 
     collaborative process, shall--
       (A) allocate to eligible institutions an amount equal to 
     not less than 40 percent of such amount for in-school youth 
     programs described in section 241; and
       (B) allocate to local workforce development boards an 
     amount equal to not less than 40 percent of such amount for 
     at-risk youth programs described in section 245.
       (2) Discretionary funds.--From the amounts made available 
     pursuant to section 211(c)(1), the Governor, through the 
     collaborative process, is authorized to provide 10 percent of 
     such amounts for discretionary purposes, as determined by the 
     Governor, to eligible institutions or local workforce 
     development boards for in-school and at-risk youth.
       (3) Remainder of funds.--From the remainder of amounts made 
     available pursuant to section 211(c)(1) and distributed 
     pursuant to paragraphs (1) and (2) of this subsection, the 
     Governor, through the collaborative process, shall allocate 
     the remainder of any such amounts to carry out the purposes 
     of subparagraphs (A) or (B) of paragraph (1).
       (b) Within State Formula.--
       (1) Establishment.--The Governor, through the collaborative 
     process, and after consultation with local chief elected 
     officials in the local workforce development area and, where 
     appropriate, local educators in such area, shall develop a 
     formula for the allocation of funds in accordance with 
     paragraph (1) of subsection (a). Such formula shall take into 
     account--
       (A) poverty rates within each local community, as 
     determined by the State;
       (B) the proportion of the State's youth population residing 
     within each local community; and
       (C) such other factors as considered appropriate.
       (2) Additional factors.--In establishing such formula, the 
     Governor shall ensure that funds are distributed equitably 
     throughout the State, and that the factors described in 
     paragraph (1) do not receive disproportionate weighting.
       (c) Minimum Grant Amounts.--
       (1) Local educational agencies.--A local educational agency 
     or consortium of such agencies that receives a subgrant from 
     a State under paragraph (1) of subsection (a) for any fiscal 
     year shall receive not less than $15,000.
       (2) Postsecondary institutions.--A postsecondary 
     institution or consortium of such institutions that receives 
     a subgrant from a State under paragraph (1) of subsection (a) 
     for any fiscal year shall receive not less than $50,000.
       (3) Local development board.--A local development board 
     that receives a subgrant from a State under paragraph (1) of 
     subsection (a) for any fiscal year shall receive not less 
     than $15,000.
       (4) Secondary-postsecondary consortia.--One or more local 
     educational agencies and one or more eligible institutions 
     may enter into a consortium agreement. A consortium formed 
     pursuant to this paragraph that receives a subgrant from a 
     State under this subtitle shall receive not less than $50,000 
     in any fiscal year.
       (d) Funds to Consortium.--Funds allocated to a consortium 
     formed to meet the requirements of subsection (c) shall be 
     used only for purposes and activities that are mutually 
     beneficial to all members of the consortium. Such funds may 
     not be reallocated to individual members of the consortium 
     for purposes or activities benefiting only one member of the 
     consortium.
       (e) Waiver.--The State may waive the application of 
     subsection (c) in any case in which a grant recipient--
       (1) is located in a rural, sparsely-populated area; and
       (2) demonstrates an inability to enter into a consortium 
     for purposes of providing services under this title.

[[Page 1390]]

       Subtitle B--State Organizational, Planning, and Reporting 
                            Responsibilities

     SEC. 221. STATE PLAN.

       In addition to the requirements described in title I, a 
     State that desires to receive funds for any fiscal year under 
     this title shall, as part of the State Workforce Development 
     and Literacy Plan under title I, submit to the Secretary of 
     Education information that includes--
       (1) a description of the State's plan to develop the 
     academic and occupational skills of youth and provide the 
     attainment of challenging vocational-technical education 
     standards, including industry-approved skill standards and 
     workplace competencies;
       (2) a description of how the State will improve 
     comprehensive career guidance and counseling which may 
     include linkages to career exploration and guidance 
     counseling outside of the school system and shall describe 
     how the State will effectively demonstrate the system of 
     career preparation for youth, which includes elements such as 
     professional development, and secondary-postsecondary 
     collaborations;
       (3) a description of the strategy of the State for 
     integrating academic, vocational, and work-based learning, 
     including a description of how the State will promote 
     collaboration between secondary and postsecondary 
     occupational and academic programs and institutions and 
     incorporating learning in all aspects of the industry;
       (4) a description of how the State will promote the active 
     involvement of parents and business (including small- and 
     medium-sized businesses) in the planning, development, and 
     implementation of youth development and career preparation 
     programs authorized under this title; and
       (5) a description of how the State will serve single 
     parents, displaced homemakers, and single pregnant women and 
     promote the elimination of sex bias. Nothing in this Act 
     shall be construed to mandate an amount be set-aside for 
     these purposes.

     SEC. 222. STATE PROGRAMS AND STATE ACTIVITIES.

       (a) General Authority.--From amounts made available to a 
     State under section 211(c)(2), each State shall, consistent 
     with State law, conduct State programs and activities.
       (b) Uses of Funds.--The programs and activities described 
     in subsection (a) may include--
       (1) an assessment of programs conducted with assistance 
     under this title, including the development of--
       (A) performance indicators and measures for such programs; 
     and
       (B) program improvement and accountability with respect to 
     such programs;
       (2) the support for tech-prep education;
       (3) support for workforce preparation programs for single 
     parents, displaced homemakers, and single pregnant women;
       (4) support for corrections vocational education;
       (5) professional development activities for vocational 
     teachers, academic teachers, school administrators, 
     counselors, workplace mentors, and local providers regarding 
     integration of vocational, academic, and work-based 
     curricula, including--
       (A) inservice and preservice training of teachers and 
     faculty in state-of-the-art programs and techniques and 
     nontraditional training and employment; and
       (B) support of public teacher-education programs to ensure 
     vocational teachers stay current with the needs, 
     expectations, and methods of industry to meet employer 
     standards;
       (6) development, dissemination, and field testing of 
     curricula, especially--
       (A) curricula that integrate vocational, academic, and 
     work-based methodologies;
       (B) curricula that provide a coherent sequence of courses 
     through which academic and occupational skills may be 
     measured; and
       (C) curricula for work-based learning;
       (7) leadership and instructional programs in technology 
     education;
       (8) support for cooperative education;
       (9) support for family and consumer science programs;
       (10) creative use of technologies, including professional 
     development in the use of such technologies for instructional 
     purposes and to increase counselor's and youth's knowledge 
     of, and use of, additional information resources;
       (11) support for vocational student organizations; and
       (12) improving comprehensive career guidance and 
     counseling.

     SEC. 223. INCENTIVE AWARDS.

       The State, may, from the amount made available under 
     section 211(c)(2) for any fiscal year make performance awards 
     to 1 or more eligible institutions or local providers that 
     have--
       (1) exceeded in the performance goals described in section 
     110(f)(3);
       (2) implemented exemplary youth development and career 
     preparation programs at the local level in accordance with 
     the purposes described in section 201; or
       (3) provided exemplary education services and activities 
     for at-risk youth.
         Subtitle C--Subgrants for In-School and At-Risk Youth

     SEC. 231. PARTNERSHIP AGREEMENTS.

       (a) Partnership.--A local workforce development board and 
     eligible institutions that desire to receive a subgrant from 
     a State under this subtitle in any fiscal year shall form a 
     partnership for the purposes of collaborative planning, 
     coordination of in-school and at-risk programs, and effective 
     public participation.
       (b) Plan.--
       (1) In general.--The partnership referred to in subsection 
     (a) shall, in collaboration, develop and submit for approval 
     to the Governor through the State collaborative process a 
     comprehensive youth development and career preparation plan 
     for in-school and at-risk youth. Such plan shall describe how 
     the youth development and career preparation system meets the 
     requirements of sections 241 and 245 and shall address 
     comments received through the collaborative process.
       (2) Collaborative process.--The partnership shall assure 
     the involvement of parents, teachers, and the community in 
     the collaborative planning process which involves design of 
     the indicators, strategies, articulation, and cooperative 
     agreements, assessments, and evaluation of program 
     activities.
       (3) Disputes.--(A) In the event a partnership cannot come 
     to agreement on the content of local plans, the Governor, 
     through the collaborative process, is authorized to develop 
     procedures for the resolution of issues in dispute.
       (B) If procedures are not in place for the resolution of 
     disputes an eligible institution of such partnership may 
     apply directly to the State for a grant to carry out in-
     school youth programs described in section 241.

     SEC. 232. DISTRIBUTION OF FUNDS.

       (a) In-School Programs.--Based upon an application 
     submitted according to the requirements described in section 
     231, a State shall distribute funds made available in a 
     fiscal year as provided in section 212(a)(1)(A) to eligible 
     institutions to carry out in-school youth programs described 
     in section 241.
       (b) At-Risk Youth Programs.--A State shall distribute funds 
     made available in any fiscal year as provided in section 
     212(a)(1)(B) to local workforce development boards to carry 
     out at-risk youth programs described in section 245.

                       CHAPTER 1--IN-SCHOOL YOUTH

     SEC. 241. USES OF FUNDS FOR IN-SCHOOL YOUTH.

       (a) General Authority.--Each eligible institution that 
     receives a subgrant under this chapter shall use funds 
     provided under such grant to improve youth development and 
     career preparation programs.
       (b) Requirements for Uses of Funds.--Funds provided by a 
     State pursuant to section 212(a)(1)(A) shall be used to 
     provide in-school youth development and career preparation 
     programs that--
       (1) are of such size, scope, and quality as to be 
     effective;
       (2) integrate academic, vocational, and work-based 
     learning, stressing applied and contextual learning, through 
     a coherent sequence of courses so that youth achieve both 
     academic and occupational competencies and have strong 
     experience in, and understanding of, all aspects of the 
     industry;
       (3) involve employers and parents in the design and 
     implementation of programs;
       (4) establish effective linkages with at-risk youth 
     programs, secondary and postsecondary education;
       (5) provide work-based learning experiences with adult 
     mentoring where appropriate; and
       (6) provide comprehensive career guidance and counseling, 
     including exploration in the practical arts or trade.
       (c) Additional Uses of Funds.--In carrying out the 
     provisions of subsection (b), funds may be used by an 
     eligible institution for in-school youth activities such as--
       (1) purchasing, leasing, or upgrading of equipment, 
     including instructional aids and material;
       (2) inservice training of vocational instructors, academic 
     instructors, employers, and workplace mentors, to integrate 
     academic and vocational education, and provide high-quality 
     school-based and work-based learning experiences;
       (3) tech-prep education programs;
       (4) supplementary services designed to meet the needs of 
     special populations;
       (5) adaptation of equipment;
       (6) apprenticeship programs;
       (7) comprehensive mentoring programs in institutions of 
     higher education offering comprehensive programs in teacher 
     preparation which seek to fully use the skills and work 
     experiences of individuals currently or formerly employed in 
     business and industry, who are interested in becoming 
     classroom instructors, and to meet the need of vocational 
     educators who wish to upgrade their teaching competencies;
       (8) local education and business partnerships for 
     developing and implementing school-based youth development 
     and career preparation systems;
       (9) support for vocational student organizations;
       (10) establishing effective activities and procedures to 
     enable program participants and their parents to participate 
     directly in decisions that influence the character of 
     programs, including providing information and assistance 
     needed for informed and effective participation; and
       (11) support for programs which prepare youth with skills 
     for personal and family life management, work, and leadership 
     in the community and the Nation.

                        CHAPTER 2--AT-RISK YOUTH

     SEC. 245. USES OF FUNDS FOR AT-RISK YOUTH.

       (a) General Authority.--Each local workforce development 
     board that receives a subgrant under this chapter shall use 
     funds provided under such grant to improve youth development 
     and career preparation programs.

[[Page 1391]]

       (b) Requirements for Uses of Funds.--Funds provided by a 
     State pursuant to section 212(1)(B) shall be used to provide 
     youth development and career preparation programs for at-risk 
     youth that--
       (1) are of such size, scope, and quality as to be 
     effective;
       (2) integrate academic, vocational, and work-based 
     learning, stressing applied and contextual learning, through 
     a coherent sequence of courses so that in-school and at-risk 
     youth achieve both academic and occupational competencies;
       (3) involve employers and parents in the design and 
     implementation of programs;
       (4) establish effective linkages with in-school youth 
     programs, and secondary and postsecondary education;
       (5) provide work-based learning experiences, including 
     experiences in the practical arts or trade, if applicable;
       (6) provide adult mentoring as a core component of the 
     program;
       (7) provide an objective assessment of the academic level, 
     skill level, and service needs of each participant; and
       (8) provide comprehensive career guidance and counseling.
       (c) Additional Uses of Funds.--In carrying out the 
     provisions of subsection (b), providers of at-risk youth 
     programs, as selected by the local workforce development 
     board, may provide activities such as--
       (1) tutoring, study skills training and instruction leading 
     to completion of high school;
       (2) alternative high school services;
       (3) training or education that is combined with community 
     service, and service learning opportunities;
       (4) paid and unpaid work experience, including limited 
     internships, entry-employment experience programs, and summer 
     employment opportunities, that are integrated with year-
     round, school-based, or alternative school-based programs;
       (5) dropout prevention strategies, strategies to encourage 
     at-risk youth to reenter high school or alternative high 
     school programs, and programs that encourage pregnant and 
     parenting youth to stay in school;
       (6) preemployment and work maturity skills training;
       (7) peer-centered activities encouraging responsibility and 
     other positive social behaviors during non-school hours; and
       (8) training-related supportive services.
       (d) Limitations on Use of Funds.--Not more than 10 percent 
     of the funds provided under this chapter to a local workforce 
     development board may be used for administrative purposes.

     SEC. 246. AT-RISK YOUTH PROVIDERS.

       (a) Role of Local Workforce Development Board.--A local 
     workforce development board that receives funds under this 
     chapter shall not operate programs, but shall contract with 
     eligible providers of demonstrated effectiveness, or with 
     eligible providers utilizing service methodologies with 
     demonstrated effectiveness in serving the youth development 
     and career preparation needs of at-risk youth, for the 
     purpose of providing services under this chapter.
       (b) Eligible Providers.--For purposes of this chapter, 
     eligible providers may include--
       (1) an ``eligible institution'' as defined under section 
     202(7);
       (2) a unit of local government;
       (3) a private, nonprofit organization (including community-
     based organizations);
       (4) a private, for profit entity; or
       (5) other organizations or entities of demonstrated 
     effectiveness and approved by the local workforce development 
     board.
                     Subtitle D--National Programs

     SEC. 251. RESEARCH ACTIVITIES.

       (a) General Authority.--
       (1) In general.--In order to carry out the purpose of this 
     title, the Secretary may, directly or through grants, 
     contracts, or cooperative agreements, carry out research, 
     development, dissemination, replication of model programs, 
     demonstration programs, evaluation, capacity-building, and 
     technical assistance activities with regard to the services 
     and activities carried out under this title.
       (2) Information systems.--Activities carried out under this 
     section may include support for occupational and career 
     information systems.
       (b) Dissemination.--The Secretary shall establish a system 
     for disseminating information resulting from research and 
     development activities carried out under this title.

     SEC. 252. ASSESSMENT AND DATA COLLECTION OF YOUTH DEVELOPMENT 
                   AND CAREER PREPARATION PROGRAMS.

       (a) In General.--The Secretary, through the Office of 
     Educational Research and Improvement, shall conduct a 
     biennial assessment of services and activities assisted under 
     this title, through studies and analyses conducted 
     independently through competitive awards.
       (b) Contents.--The assessment required under subsection (a) 
     shall examine the extent to which services and activities 
     assisted under this title have achieved their intended 
     purposes and results, including the extent to which--
       (1) State and local services and activities have developed, 
     implemented, or improved youth development and career 
     preparation systems established under this title;
       (2) services and activities assisted under this title 
     succeed in preparing youth, including youth who are members 
     of special populations, for postsecondary education, further 
     learning, or entry into high-skill, high-wage careers;
       (3) youth who participate in services and activities 
     supported under this title succeed in meeting challenging 
     State academic and industry-based skill standards; and
       (4) the system improvement, participation, local and State 
     assessment, and accountability provisions of this title, 
     including the performance goals and indicators established 
     under section 110(f)(3), are effective.

     SEC. 253. NATIONAL CENTER OR CENTERS FOR RESEARCH.

       (a) General Authority.--
       (1) National center.--The Secretary may, through a grant or 
     contract, establish one or more national centers for 
     conducting applied research, development, dissemination, and 
     technical assistance activities which would focus on 
     improving the development and career preparation of youth. 
     The Secretary shall consult with States prior to establishing 
     one or more such centers.
       (2) Eligibility.--Entities eligible to receive funds under 
     this section are institutions of higher education, other 
     public or private nonprofit organizations or agencies, and 
     consortia of such institutions, organizations, or agencies.
       (3) Previous center.--The national center in existence on 
     the day before the date of the enactment of the this Act 
     shall continue to receive assistance under this section in 
     accordance with the terms of its current award.
       (b) Activities.--
       (1) In general.--The applied research, development, 
     dissemination, and technical assistance activities carried 
     out by the national center or centers shall include--
       (A) activities that assist recipients of funds under this 
     title to meet the requirements of section 110(f)(3);
       (B) research and development of activities that combine 
     academic, vocational-technical education, and work-based 
     learning;
       (C) developing new models for remediation of basic academic 
     skills which incorporate appropriate instructional methods;
       (D) identifying ways to establish effective linkages among 
     educational and job training activities at the State and 
     local levels;
       (E) new models for comprehensive career guidance and 
     counseling;
       (F) studies providing longitudinal information or formative 
     evaluation on programs funded under this title, including an 
     analysis of the effectiveness of youth development and career 
     preparation programs in serving at-risk youth; and
       (G) such other activities as the Secretary determines to be 
     appropriate to achieve the purposes of this Act.
       (2) Duties.--The center or centers shall--
       (A) provide assistance to States and local recipients in 
     developing and using systems of performance measures and 
     indicators for improvement of youth development and career 
     preparation programs and services; and
       (B) provide technical assistance and outreach.
       (3) Summary.--The center or centers conducting the 
     activities described in paragraph (1) shall annually prepare 
     a summary of key research findings of such center or centers 
     and shall submit copies of the summary to the Secretaries of 
     Education and Labor. The Secretary shall submit that summary 
     to the Committee on Labor and Human Resources of the Senate, 
     and the Committee on Economic and Educational Opportunities 
     of the House of Representatives.
       (c) Clearinghouse.--The center or centers shall maintain a 
     clearinghouse that will provide data and information to 
     Federal, State, and local organizations and agencies about 
     the condition of youth development and career preparation 
     systems and programs funded under this title.

     SEC. 254. PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS.

       (a) Sense of the Congress.--It is the sense of the Congress 
     that, to the greatest extent practicable, all equipment and 
     products purchased with funds made available under this Act 
     should be American-made.
       (b) Notice Requirement.--In providing financial assistance 
     to, or entering into any contract with, any entity using 
     funds made available under this Act, the head of each Federal 
     agency, to the greatest extent practicable, shall provide to 
     such entity a notice describing the statement made in 
     subsection (a) by the Congress.
      TITLE III--ADULT EMPLOYMENT AND TRAINING CONSOLIDATION GRANT

     SEC. 301. PURPOSE.

       The purpose of this title is to establish an efficient, 
     high-quality, and equitable system of employment, job 
     training, and related assistance designed to facilitate the 
     transition of adults into productive, high skills, private 
     sector employment.
     Subtitle A--Adult Employment and Training Consolidation Grant

     SEC. 311. AUTHORIZATION.

       (a) In General.--In the case of each State that in 
     accordance with the requirements of section 102 submits to 
     the Secretary of Labor (hereinafter in this title referred to 
     as the ``Secretary'') a State workforce development and 
     literacy plan under section 104, the Secretary shall provide 
     a grant to the State for the purpose of providing employment, 
     job training, and related assistance for adults in the State.
       (b) Amount.--The grant shall consist of the allotment 
     determined for the State under section 312.

     SEC. 312. ALLOTMENT AMONG STATES.

       (a) In General.--Of the amount appropriated pursuant to 
     section 4(a)(2) to carry out this title for a fiscal year, 
     the Secretary shall--

[[Page 1392]]

       (1) allot 85 percent of such amounts in accordance with 
     subsection (b); and
       (2) reserve 15 percent for use under subtitle B.
       (b) Allotment Among States.--
       (1) Reservation for the territories.--Of the amount 
     allotted under subsection (a)(1), the Secretary shall allot 
     not more than one quarter of one percent among the 
     Commonwealth of the Northern Mariana Islands, American Samoa, 
     Guam, and the Virgin Islands.
       (2) States.--After determining the amount to be allotted 
     under paragraph (1), the Secretary shall allot the remaining 
     amount to the remaining States so that each State receives an 
     amount that bears the same proportion to such remaining 
     amount as--
       (A) the amount allotted to each such State from allotments 
     under sections 202 and 302 of the Job Training Partnership 
     Act (29 U.S.C. 1602 and 1652) (as in effect before the date 
     of the enactment of this Act) for fiscal year 1995; bears to
       (B) the aggregate of the amounts allotted to all such 
     States from allotments under such sections for such fiscal 
     year.
       (c) Minimum Allotment.--No State shall receive less than 
     one-quarter of one percent of the amount available under this 
     title for a fiscal year. Amounts necessary for increasing 
     such payments to States to comply with the preceding sentence 
     shall be obtained by ratably reducing the amounts to be paid 
     to other States.

     SEC. 313. ALLOCATION WITHIN STATES.

       (a) Reservations for State Activities.--
       (1) In general.--The Governor of the State shall reserve 
     not more than 20 percent of the amount allotted to the State 
     under section 312(b) for a fiscal year for statewide 
     activities for employment, job training, and related 
     assistance for adults.
       (2) Mandatory activities.--Such activities shall include--
       (A) rapid response activities; and
       (B) additional assistance to areas that experience 
     disasters, mass layoffs or plant closings, or other events 
     which precipitate substantial increases in the number of 
     unemployed workers, to be expended in accordance with the 
     local plan of the relevant workforce development area.
       (3) Discretionary activities.--
       (A) In general.--Such activities may include--
       (i) subject to subparagraph (B), administration by the 
     State of programs under this subtitle;
       (ii) capacity building and technical assistance to local 
     workforce development areas, integrated career center 
     systems, and service providers, including the development and 
     training of staff and the development of exemplary program 
     activities;
       (iii) incentives for program coordination, performance 
     awards, and research and demonstrations;
       (iv) implementation of innovative incumbent worker training 
     programs, which may include the establishment and 
     implementation of an employer loan program to assist in 
     skills upgrading (in accordance with the requirements of 
     section 324);
       (v) implementation of experimentation, model activities, 
     pilot projects, and demonstration projects which further the 
     goals and purposes of this Act;
       (vi) additional assistance for the development and 
     implementation of the integrated career center system of the 
     State established in accordance with title I;
       (vii) support for a common management information system as 
     described in section 109; and
       (viii) implementation of innovative programs to increase 
     the number of individuals trained and placed in 
     nontraditional employment.
       (B) Limitation.--Not more than 25 percent of the amount 
     reserved by the Governor under paragraph (1) may be used for 
     administration by the State of programs under this subtitle.
       (b) Within State Allocation.--
       (1) In general.--The Governor of the State shall allocate 
     the remainder of the amount allotted to the State under 
     section 312(b) to workforce development areas designated 
     under title I of this Act, in accordance with paragraphs (1) 
     and (2) of such section, for the purpose of providing 
     employment, job training, and related services for adults in 
     accordance with section 315.
       (2) Within state formula.--
       (A) Establishment.--The Governor, through the collaborative 
     process under section 103 of this Act, and after consultation 
     with local chief elected officials in the local workforce 
     development area, shall develop a formula for the allocation 
     of 90 percent of the remainder of funds described in 
     paragraph (1), to workforce development areas, taking into 
     account--
       (i) poverty rates within each local workforce development 
     area, as determined by the State;
       (ii) unemployment rates within each local workforce 
     development area;
       (iii) the proportion of the State's adult population 
     residing within each local workforce development area; and
       (iv) such other factors as considered appropriate.
       (B) Additional factors.--In establishing such formula, the 
     Governor shall ensure that funds are distributed equitably 
     throughout the State, and that the factors described in 
     subparagraph (A) do not receive disproportionate weighting.
       (3) Within state discretionary allocation.--In addition, 
     the Governor is authorized to allocate 10 percent of the 
     remainder of funds described in paragraph (1) to workforce 
     development areas designated under title I of this Act. 
     Amounts may be allocated to such areas as determined by the 
     Governor.

     SEC. 314. ADDITIONAL STATE PLAN REQUIREMENTS.

       The State shall, as part of the State workforce development 
     and literacy plan under title I of this Act, submit to the 
     Secretary the following additional information:
       (1) A description of how the State will serve the 
     employment and training needs of dislocated workers, 
     economically disadvantaged individuals, older workers, 
     individuals with disabilities, displaced homemakers, 
     veterans, and individuals with multiple barriers to 
     employment (as determined by the State), including 
     individuals who are basic skills deficient and individuals 
     seeking to enter nontraditional employment.
       (2) A description of how the State will provide rapid 
     response assistance to workers experiencing dislocation as a 
     result of mass layoffs and plant closings, either through the 
     direct provision of services or through the transfer of funds 
     to local workforce development areas for the provision of 
     such services.

     SEC. 315. USE OF AMOUNTS.

       (a) Core Services.--Amounts allocated under section 313(b) 
     shall be used to provide core services to adults through 
     integrated career center systems in accordance with title I 
     of this Act.
       (b) Intensive Services.--
       (1) In general.--Amounts allocated under section 313(b) 
     shall be used to provide intensive services to adults--
       (A) who are unable to obtain employment through core 
     services under subsection (a); and
       (B) who have been determined to be in need of more 
     intensive services in order to gain employment.
       (2) Delivery of services.--Such intensive services shall be 
     provided--
       (A) directly through integrated career center systems in 
     accordance with title I of this Act; or
       (B) through contracts through such systems with service 
     providers approved by the local workforce development board, 
     which may include private, for-profit providers.
       (3) Types of services.--Such intensive services may include 
     the following:
       (A) Comprehensive and specialized assessments of the skill 
     levels and service needs of adults, which may include--
       (i) diagnostic testing and other assessment tools; and
       (ii) in-depth interviewing and evaluation to identify 
     employment barriers and appropriate employment goals.
       (B) Development of an individual employment plan, to 
     identify the employment goals, appropriate achievement 
     objectives, and the appropriate combination of services for 
     the adult to achieve the employment goal.
       (C) Group counseling.
       (D) Individual counseling and career planning.
       (E) Case management for adults receiving education and 
     training services under subsection (c) or supportive services 
     under subsection (d).
       (F) Follow-up counseling for adults placed in training or 
     employment, for up to 1 year.
       (c) Education and Training Services.--
       (1) In general.--Amounts allocated under section 313(b) 
     shall be used to provide education and training services to 
     adults--
       (A) who are unable to obtain employment through core 
     services under subsection (a);
       (B) who are in need of education and training services in 
     order to gain employment as a result of determinations made 
     through--
       (i) preliminary assessments under section 107(f)(1)(B) of 
     this Act; or
       (ii) comprehensive and specialized assessments under 
     subsection (b)(3)(A); and
       (C) who are unable to obtain other grant assistance for 
     such services, such as through Federal Pell Grants 
     established under title IV of the Higher Education Act of 
     1965.
       (2) Delivery of services.--Such education and training 
     services shall be provided through education and training 
     providers certified in accordance with title I of this Act.
       (3) Types of services.--Such education and training 
     services may include the following:
       (A) Basic skills training, including remedial education, 
     literacy training, and English literacy program instruction.
       (B) Occupational skills training, including training for 
     nontraditional employment.
       (C) On-the-job training.
       (D) Programs that combine workplace training with related 
     instruction.
       (E) Training programs operated by the private sector.
       (F) Skill upgrading and retraining.
       (G) Entrepreneurial training.
       (H) Employability training to enhance basic workplace 
     competencies.
       (I) Customized training conducted with a commitment by an 
     employer or group of employers to employ an individual upon 
     successful completion of the training.
       (4) Additional requirements.--
       (A) Use of career grants.--
       (i) In general.--Except as provided in clause (ii) and 
     clause (iii), education and training services under this 
     section shall be provided through the use of career grants in 
     accordance with this subsection, and shall be distributed to 
     eligible individuals through integrated career centers or 
     affiliated sites as described in section 107, and in 
     accordance with section 108 regarding the identification of 
     eligible education and training providers.
       (ii) Exceptions.--Education and training services 
     authorized under this title may be

[[Page 1393]]

     provided pursuant to a contract for services in lieu of a 
     career grant if--

       (I) such services are on-the-job training provided by an 
     employer;
       (II) the local workforce development board determines there 
     are an insufficient number of certified providers of 
     education and training services in the workforce development 
     area to accomplish the purposes of a career grant system;
       (III) the local workforce development board determines that 
     the certified providers of education and training in the 
     workforce development area are unable to provide effective 
     services to special participant populations; or
       (IV) the local workforce development board decides to enter 
     into a direct training contract with a community based 
     organization serving special participant populations.

       (iii) Transition.--States shall within three years from the 
     date of enactment of this Act fully implement the 
     requirements of clause (i), but nothing shall prohibit States 
     from beginning such implementation at an earlier date.
       (B) Linkage to occupations in demand.--Education and 
     training services under this subsection shall be directly 
     linked to occupations for which there is a demand in the 
     local workforce development area, or in another area to which 
     an adult receiving such services is willing to relocate.
       (d) Additional Services.--
       (1) Supportive services.--Supportive services may be 
     provided for individuals--
       (A) who are receiving assistance under any of subsections 
     (a) through (c); and
       (B) who are unable to receive such services through other 
     programs providing such services.
       (2) Needs-related payments.--
       (A) In general.--Amounts allocated under section 313(b) may 
     be used to provide needs-related payments to adults who are 
     unemployed and do not qualify for (or have ceased to qualify 
     for) unemployment compensation for the purpose of enabling 
     such adults to participate in education and training programs 
     under subsection (c).
       (B) Additional eligibility requirements.--In addition to 
     the requirements contained in subparagraph (A), a dislocated 
     worker who has exhausted unemployment insurance benefits may 
     be eligible to receive needs-related payments under this 
     paragraph only if such worker was enrolled in education or 
     training by the end of the 8th week of the worker's initial 
     unemployment compensation benefit period, or, if later, by 
     the end of the 8th week after the worker is informed that a 
     short-term layoff will in fact exceed 6 months.
       (e) Priority.--Local workforce development boards shall 
     establish a process through which priority is given to 
     dislocated workers and economically disadvantaged 
     individuals, for receipt of services provided under 
     subsections (b) and (c), in the event that funds are limited 
     within the workforce development area.
       (f) Prohibition on Private Right of Action.--Nothing in 
     this section may be construed to establish a right for a 
     participant to bring an action to obtain services under a 
     program established under this section.
       (g) Limitations on Use of Funds.--Not more than 10 percent 
     of the funds provided under this title to a local workforce 
     development board may be used for administrative purposes.
                      Subtitle B--Federal Programs

     SEC. 321. NATIONAL DISCRETIONARY GRANTS.

       (a) Grants for Dislocated Workers.--
       (1) In general.--From amounts reserved under section 
     312(a)(2) for any fiscal year, the Secretary is authorized to 
     award national discretionary grants to address major economic 
     dislocations that result from plant closures, base closures, 
     or mass layoffs.
       (2) Application.--To receive a grant under this section, an 
     eligible entity shall submit an application to the Secretary 
     at such time, in such manner, and accompanied by such 
     information as the Secretary determines is appropriate.
       (3) Eligible entities.--Grants under this section may be 
     awarded to--
       (A) the State;
       (B) a local workforce development board administering 
     assistance under this Act;
       (C) employers and employer associations;
       (D) worker-management transition assistance committees and 
     other employer-employee entities;
       (E) representatives of employees;
       (F) community development corporations and community-based 
     organizations; and
       (G) industry consortia.
       (b) Incentive Grants.--From amounts reserved under section 
     312(a)(2) for any fiscal year, the Secretary may provide 
     awards to States--
       (1) to assist in the implementation of exemplary statewide 
     workforce development system designs; and
       (2) for the achievement of exceptional performance in the 
     statewide workforce development system.

     SEC. 322. DISASTER RELIEF EMPLOYMENT ASSISTANCE.

       (a) In General.--From amounts reserved under section 
     312(a)(2) for any fiscal year, the Secretary may provide 
     assistance to the Governor of any State within which is 
     located 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 (referred to in this section as the 
     ``disaster area'').
       (b) Use of Funds.--
       (1) Projects restricted to disaster areas.--Funds made 
     available under this section--
       (A) shall be used exclusively to provide employment on 
     projects to provide food, clothing, shelter, and other 
     humanitarian assistance for disaster victims and on projects 
     regarding demolition, cleanup, repair, renovation, and 
     reconstruction of damaged and destroyed structures, 
     facilities, and lands located within the disaster area; and
       (B) may be expended through public and private agencies and 
     organizations engaged in such projects.
       (2) Eligibility requirements.--An individual shall be 
     eligible to be offered disaster employment under this section 
     if such individual is a dislocated worker 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 this part for more than 6 
     months for work related to recovery from a single natural 
     disaster.

     SEC. 323. RESEARCH, DEMONSTRATION, EVALUATION, AND CAPACITY 
                   BUILDING.

       (a) In General.--From amounts reserved under section 
     312(a)(2) for any fiscal year, the Secretary is authorized to 
     establish and carry out research, demonstration, and capacity 
     building activities in accordance with this section.
       (b) Activities.--The Secretary is authorized to carry out 
     the following activities under this section:
       (1) Research.--The Secretary is authorized to conduct 
     continuing research, which may include studies and other 
     methods and techniques, that will aid in the solution of the 
     employment and training problems of the United States. Such 
     studies may include the extent to which individuals who 
     participate in programs established under this title achieve 
     self-sufficiency as a result of such participation, including 
     the identification by State and locality, to the extent 
     practicable, of indicators measuring such self-sufficiency.
       (2) Demonstrations.--The Secretary is authorized to conduct 
     pilot and demonstration projects for the purpose of 
     developing and improving methods and techniques for 
     addressing employment and training needs which may include--
       (A) projects conducted jointly with the Department of 
     Defense to develop training programs utilizing computer-based 
     and other innovative learning technologies. The Secretary may 
     award grants and enter into contracts with appropriate 
     entities to carry out such projects; and
       (B) Projects which 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.
       (3) Evaluation.--
       (A) Activities.--
       (i) Job training activities.--The Secretary shall provide 
     for the continuing evaluation of activities conducted under 
     this Act, including the use of controlled experiments using 
     experimental and control groups chosen by scientific random 
     assignment, and at a minimum, determine whether job training 
     and job placement programs effectively raise the hourly wage 
     rates of individuals receiving training through such 
     programs.
       (ii) Other programs.--The Secretary may conduct evaluations 
     of other federally funded employment-related activities 
     including programs administered under--

       (I) the Wagner-Peyser Act (29 U.S.C. 49 et seq.);
       (II) the National Apprenticeship Act (29 U.S.C. 50 et 
     seq.);
       (III) the Older Americans Act of 1965 (42 U.S.C. 3001 et 
     seq.); and
       (IV) the Federal unemployment insurance program under 
     titles III, IX, and XII of the Social Security Act (42 U.S.C. 
     501 et seq., 1101 et seq., and 1321 et seq.).

       (B) Effectiveness.--The Secretary shall evaluate the 
     effectiveness of programs authorized under this Act with 
     respect to--
       (i) the statutory goals; and
       (ii) the extent to which such programs enhance the 
     employment and earnings of participants, reduce income 
     support costs, improve the employment competencies of 
     participants in comparison to comparable persons who did not 
     participate in such programs, and to the extent feasible, 
     increase the level of total employment over the level that 
     would have existed in the absence of such programs.
       (4) National partnership and special training.--The 
     Secretary may award special grants to eligible entities to 
     carry out activities that are most appropriately administered 
     at the national level. Such activities may include--
       (A) partnerships with national organizations with special 
     expertise in developing, organizing, and administering 
     employment and training services at the national, State, and 
     local levels, such as industry and labor associations, public 
     interests groups, community-based organizations 
     representative of groups that encounter special difficulties 
     in the labor market, in education and training; and
       (B) activities that--
       (i) address industry-wide skill shortages;
       (ii) meet training needs that are best addressed on a 
     multistate basis;
       (iii) further the goals of increasing the competitiveness 
     of the United States labor force;
       (iv) require technical expertise available at the national 
     level to serve the needs of particular client groups that 
     encounter significant barriers to employment and who the

[[Page 1394]]

     Secretary determines require special assistance; and
       (v) promote and experiment with model activities, pilot 
     projects, and demonstration projects which further the goals 
     and purposes of this Act.
       (5) Capacity building and technical assistance.--
       (A) In general.--The Secretary shall provide, through 
     grants, contracts, or other arrangements, staff training and 
     technical assistance to States, local workforce development 
     boards, career centers, communities, business and labor 
     organizations, service providers, industry consortia, and 
     other entities, to enhance their capacity to develop and 
     deliver effective employment and training services.
       (B) Activities.--The staff training and technical 
     assistance authorized under subparagraph (A) may include--
       (i) development of management information systems;
       (ii) development and maintenance of a national capacity 
     building, information and dissemination network; and
       (iii) grants for the replication of successful employment 
     and training models and activities.

     SEC. 324. WORKFORCE SKILLS AND DEVELOPMENT LOANS.

       (a) Authorization.--
       (1) In general.--From amounts reserved under section 
     312(a)(2) for any fiscal year, the Secretary of Labor may use 
     a portion of such amounts to provide grants to States to 
     provide loans to eligible entities described in paragraph (2) 
     to assist such entities in providing skills upgrading.
       (2) Eligible entities.--An eligible entity described in 
     this paragraph is--
       (A) an employer;
       (B) a representative of employees;
       (C) a business association;
       (D) a trade organization; or
       (E) a consortium consisting of--
       (i) more than 1 of the entities described in subparagraphs 
     (A) through (D); or
       (ii) an institution of higher education (as such term is 
     defined in section 481 of the Higher Education Act of 1965 
     (20 U.S.C. 1088) which continues to meet the eligibility and 
     certification requirements under section 498 of such Act) and 
     1 or more of the entities described in subparagraphs (A) 
     through (D).
       (b) Application.--The Secretary may provide a grant to a 
     State under subsection (a) only if such State submits to the 
     Secretary an application which contains such information as 
     the Secretary may reasonably require.
       (c) Use of Amounts.--A State shall use amounts received 
     from a grant under subsection (a) to establish a loan 
     guarantee program to assist eligible entities described in 
     paragraph (2) of such subsection to provide skills upgrading. 
     In carrying out such program, the State shall meet the 
     following requirements:
       (1) Establishment of reserve fund for loan guarantees.--The 
     State shall establish a reserve fund from amounts received 
     from such grant for the purpose of making commitments to 
     guarantee the payment of principal and interest on loans made 
     by financial institutions to such eligible entities to 
     provide skills upgrading.
       (2) Criteria for loan guarantees.--The State, in 
     conjunction with appropriate financial institutions, shall 
     establish and publish criteria for providing loan guarantees 
     to eligible entities under the program, including criteria 
     that provides for the following:
       (A) A loan guarantee may be issued under the program only 
     if, at the time such guarantee is issued the eligible entity 
     agrees to pay as an insurance premium an amount equal to 1 
     percent of the principal received by such entity under the 
     loan to the State's reserve fund.
       (B)(i) Subject to clause (ii), the eligible entity will use 
     amounts received from the loan to provide skills upgrading 
     for mid- and lower-level employees, which may include--
       (I) training in total quality management, statistical 
     process control, production techniques, office automation, 
     materials resource planning; and
       (II) training to improve basic skills, including reading, 
     writing, and arithmetic.
       (ii) In providing such skills upgrading, the eligible 
     entity shall give priority to employees who--
       (I) directly produce or deliver goods or services; or
       (II) are in danger of being terminated or laid off as a 
     result of modernization in the workplace, corporate 
     downsizing, foreign or domestic competition, or Federal 
     policies adversely affecting 1 or more industries.
       (C) Amounts from a loan shall not be used to pay the wages 
     or other benefits of any employee receiving assistance under 
     the program.
       (3) Payment by state to financial institutions in cases of 
     default.--
       (A) In general.--In accordance with criteria developed by 
     the Secretary, the State shall make payments from the State's 
     reserve fund to financial institutions that have provided 
     loans to eligible entities that have defaulted on such loans 
     for the purpose of reimbursing such institutions for the 
     amount of principal and interest remaining unpaid to the 
     institutions by reason of such default.
       (B) No full faith and credit of the united states.--Loans 
     provided by financial institutions to eligible entities under 
     loan guarantee programs under this section shall not be 
     obligations of, or guaranteed in any respect by, the United 
     States.
       (4) Interest from amounts in reserve fund.--Any interest 
     earned from amounts in the State's reserve fund shall be 
     credited to such fund.
       (d) Federal and State Share.--
       (1) Federal share.--The Federal share under this section 
     may not exceed 50 percent of the total cost of the program 
     established under subsection (c) for any fiscal year.
       (2) State share.--The State share shall be provided from 
     non-Federal sources and may be in cash or in-kind, fairly 
     evaluated.

     SEC. 325. EMPLOYMENT, TRAINING, AND EDUCATION ASSISTANCE FOR 
                   NATIVE AMERICANS.

       (a) Authorization.--From amounts reserved under section 
     4(a)(2) for any fiscal year, there shall be reserved 4 
     percent, or $85,000,000, whichever is less, to provide grants 
     to, or enter into contracts or cooperative agreements with, 
     Indian tribes and tribal organizations, tribally-controlled 
     colleges, tribally-controlled postsecondary vocational 
     institutions, Indian-controlled organizations serving off-
     reservation areas, Alaska Native village and regional 
     entities serving areas as described in the Alaska Native 
     Claims Settlement Act and Hawaiian Native-controlled 
     organizations to provide employment, training, vocational 
     rehabilitation, library services, and education assistance 
     for Native Americans.
       (b) Transfer of Authority for Vocational Education 
     Activities.--In carrying out subsection (a), the Secretary of 
     Labor may enter into an agreement with the Secretary of 
     Education to carry out any portion of assistance under such 
     subsection devoted to vocational educational activities, 
     including support for the United Tribes Technical College and 
     Crownpoint Institute of Technology.
       (c) Consolidation of Funds.--Entities receiving assistance 
     under subsection (a) 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 (Public Law 102-477).
       (d) Regulations.--The Secretary shall consult with Indian, 
     Alaska Native and Hawaiian Native groups in establishing 
     regulations to carry out this section, including performance 
     standards for entities receiving assistance under subsection 
     (a), taking into account the economic circumstances of such 
     groups.

     SEC. 326. EMPLOYMENT, TRAINING, AND EDUCATION ASSISTANCE FOR 
                   MIGRANT AND SEASONAL FARMWORKERS.

       (a) Authorization.--
       (1) In general.--From amounts reserved under section 
     4(a)(2) for any fiscal year, there shall be reserved 4 
     percent, or $85,000,000, whichever is less, to provide grants 
     to, or enter into contracts or cooperative agreements with, 
     entities described in paragraph (2) to provide employment, 
     training, and education assistance for migrant and seasonal 
     farmworkers.
       (2) Entities described.--An entity described in this 
     paragraph is an entity the Secretary determines to have the 
     capacity to administer effectively a diversified workforce 
     development program for migrant and seasonal farmworkers.
       (b) Use of Amounts.--An entity shall use amounts received 
     under subsection (a) to provide employment, training, 
     educational development, high school equivalency, 
     postsecondary education assistance, vocational 
     rehabilitation, literacy, English as a second language, work-
     based education and development, worker safety training, 
     employability enhancements, emergency or other disaster 
     relief, housing, technical assistance, outreach, intake, 
     assessment, follow-up, stipend support, supportive services, 
     other needs-based assistance, self-employment and related 
     business enterprise development education, and the management 
     of a database on participating migrant and seasonal 
     farmworkers.
       (c) Regulations.--The Secretary shall consult with seasonal 
     and migrant farmworker groups in establishing regulations to 
     carry out this section, including performance standards for 
     entities receiving assistance under subsection (a)(2), taking 
     into account the economic circumstances of such groups.
 TITLE IV--ADULT EDUCATION AND FAMILY LITERACY CONSOLIDATION GRANT AND 
          LIBRARY SERVICES AND TECHNOLOGY CONSOLIDATION GRANT

     SEC. 401. FINDINGS.

       The Congress finds as follows:
       (1) According to the 1990 census, 21 percent of our 
     Nation's adults (more than 38 million persons) lack a high 
     school credential or are limited English proficient.
       (2) The National Adult Literacy Survey, conducted under the 
     Adult Education Act, found that 20 percent of all adults in 
     the United States, or about 40 million people, have minimal 
     levels of literacy skills and that the lack of such skills is 
     related to unemployment, low wages, and fewer weeks worked.
       (3) The success of State efforts to reform and improve 
     public education are dependent on the ability of the United 
     States to break intergenerational cycles of illiteracy and 
     inadequate education by ensuring that parents possess a 
     strong educational foundation and, as the first and most 
     continuous teachers of their children, model for, and instill 
     in, their children a commitment to family literacy and life-
     long learning.
       (4) Generations of immigrants have contributed to our 
     communities and our economy, but for them to continue to do 
     so given recent technologies and the competitive global 
     economy, they must master English as rapidly as possible.

[[Page 1395]]

       (5) Studies have found that incarcerated adults are twice 
     as likely as nonincarcerated adults to lack a good education 
     and that such lack is a significant statistical indicator of 
     recidivism.
       (6) Certain short-term and long-term goals of the Nation 
     may not be met unless the United States improves its current 
     system of adult education and life-long learning through 
     Federal leadership.

     SEC. 402. DEFINITIONS.

       As used in this title:
       (1) Correctional education agency.--The term ``correctional 
     education agency'' means an entity that provides programs for 
     criminal offenders in corrections institutions and for other 
     institutionalized individuals which include academic programs 
     for basic education, special education, bilingual or English 
     language instruction, vocational training, library 
     development, corrections education programs, guidance and 
     counseling, and other supportive services for criminal 
     offenders which may emphasize coordination of educational 
     services with educational institutions, community-based 
     organizations of demonstrative effectiveness, and the private 
     sector, designed to provide education and training.
       (2) Educationally disadvantaged adult.--The term 
     ``educationally disadvantaged adult'' means an adult who--
       (A) demonstrates basic skills equivalent to or below that 
     of students at the fifth grade level; or
       (B) has been placed in the lowest or beginning level of an 
     adult education program when that program does not use grade 
     level equivalencies as a measure of students' basic skills.
       (3) 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 on how to be their children's 
     primary teacher and full partners in the education of their 
     children.
       (C) Parent literacy training.
       (D) An age-appropriate education program for children.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
  Subtitle A--Adult Education and Family Literacy Consolidation Grant

     SEC. 411. PURPOSES.

       The purposes of this subtitle are to assist States to 
     provide--
       (1) to adults, the basic educational skills necessary for 
     employment and self-sufficiency;
       (2) to adults who are parents, the educational skills 
     necessary to be full partners in the educational development 
     of their children;
       (3) to adults, the basic English language skills necessary 
     to participate in the civic, social, and economic life of the 
     United States; and
       (4) to adults, the opportunity to attain a high school 
     degree or its equivalent in order to permit them to pursue 
     further education and training or improve their family and 
     work situations.

                           CHAPTER 1--FUNDING

     SEC. 421. RESERVATIONS FROM AMOUNTS APPROPRIATED.

       (a) National Institute for Literacy.--For any fiscal year, 
     the Secretary shall reserve $4,500,000 of the amount 
     appropriated under section 4(a)(3) to carry out the 
     activities of the National Institute for Literacy described 
     in section 441.
       (b) National Leadership Activities.--For any fiscal year, 
     the Secretary shall reserve $4,500,000 of the amount 
     appropriated under section 4(a)(3) to establish and carry out 
     the program of national leadership and evaluation activities 
     described in section 442.

     SEC. 422. ALLOTMENT.

       (a) Initial Allotment.--From the sums available for the 
     purpose of making grants under chapter 2 for any fiscal year, 
     the Secretary shall allot--
       (1) $100,000 each to Guam, American Samoa, the Commonwealth 
     of the Northern Mariana Islands, and the Virgin Islands; and
       (2) $250,000 to each of the other States.
       (b) Additional Allotment.--
       (1) In general.--From the remainder of the sums described 
     in subsection (a) after the application of the subsection, 
     the Secretary shall allot to each State an amount which bears 
     the same ratio to such remainder as the number of qualifying 
     adults in the State bears to the number of such adults in all 
     States.
       (2) Qualifying adult.--For purposes of this subsection, the 
     term ``qualifying adult'' means an adult who--
       (A) is at least 16 years of age, but less than 61 years of 
     age;
       (B) is beyond the age of compulsory school attendance under 
     State law;
       (C) does not have a certificate of graduation from a school 
     providing secondary education (or its equivalent); and
       (D) is not currently enrolled in elementary or secondary 
     school.

                      CHAPTER 2--GRANTS TO STATES

     SEC. 431. REQUIREMENT TO MAKE GRANTS.

       For fiscal year 1997 and subsequent fiscal years, the 
     Secretary shall make a grant to a State in an amount equal to 
     the initial and additional allotments of the State for the 
     year if the State--
       (1) has satisfied the requirements of title I and section 
     433(a)(1);
       (2) agrees not to expend the grant for any purpose other 
     than in accordance with section 432;
       (3) agrees to satisfy the grant requirements in section 
     433(a)(2) and 433(b); and
       (4) agrees not to expend the grant for the purpose of 
     supporting or providing programs, services, or activities for 
     individuals who are not adults, except if such programs, 
     services, or activities are related to family literacy 
     services.

     SEC. 432. USES OF FUNDS.

       (a) State Uses of Funds.--
       (1) Grants to serve target populations.--
       (A) In general.--Of the funds paid to a State under this 
     title for fiscal year 1998 and subsequent fiscal years, 3 
     percent shall be distributed as performance grants made by 
     the State on a competitive basis, and consistent with 
     subsection (b) and section 433(b)(2), to local service 
     providers that have provided, during the immediately 
     preceding fiscal year, adult education or family literacy 
     services to the target populations described in subparagraph 
     (C).
       (B) Local service providers.--The local service providers 
     referred to in subparagraph (A) may include the following:
       (i) Local educational agencies.
       (ii) Correctional educational agencies.
       (iii) Community-based organizations.
       (iv) Public or private nonprofit agencies.
       (v) Institutions of higher education.
       (vi) Libraries.
       (vii) Other institutions that the State determines to have 
     the ability to provide literacy services to adults and 
     families.
       (C) Target populations.--The target populations referred to 
     in subparagraph (A) are the following:
       (i) Adults with more than one barrier to self-sufficiency, 
     such as being unemployed or an educationally disadvantaged 
     adult.
       (ii) Families on public assistance (as determined by the 
     State).
       (iii) Parents who are educationally disadvantaged adults 
     and who have a child who is less than 8 years of age.
       (iv) Adults who are individuals with disabilities or who 
     have similar special needs.
       (2) Grants to local service providers.--Of the funds paid 
     to a State under this subtitle for any fiscal year that 
     remain after the application of paragraph (1), at least 85 
     percent shall be distributed as grants made by the State on a 
     competitive basis, and consistent with subsection (b) and 
     section 433(b)(2), to local service providers to establish, 
     conduct, or expand programs, services, or activities to 
     achieve a purpose of this subtitle. Such local service 
     providers may include the local service providers described 
     in paragraph (1)(B).
       (3) Other state activities.--A State may use not more than 
     12 percent of the funds paid to the State under this subtitle 
     for any fiscal year that remain after the application of 
     paragraph (1) for one or more of the following purposes:
       (A) The establishment or operation of professional 
     development programs to improve the quality of instruction 
     provided in local adult education and literacy programs, 
     including instruction provided by volunteers.
       (B) The provision of technical assistance to local service 
     providers.
       (C) The provision of technology assistance to local service 
     providers to enable them to improve the quality of their 
     programs, services, and activities that achieve a purpose of 
     this subtitle, including--
       (i) providing hardware and software;
       (ii) paying for service connection fees associated with 
     gaining access to computerized databases; and
       (iii) upgrading the technological capabilities of local 
     service providers to improve the quality of their services 
     and to assist them in providing services on a flexible 
     schedule that meets the needs of diverse populations.
       (D) The support of State or regional networks of literacy 
     resource centers that--
       (i) enhance the coordination of literacy services across 
     public and private programs and State agencies;
       (ii) enhance the capacity of the State and local service 
     providers to provide literacy services through the diffusion 
     and adoption of state-of-the-art teaching methods and 
     technologies;
       (iii) provide linkages between the National Institute for 
     Literacy established under section 441 and local service 
     providers for the sharing of literacy information, research, 
     and resources;
       (iv) encourage government and industry partnerships; and
       (v) provide training and technical assistance to literacy 
     instructors in reading instruction, the use of state-of-the-
     art methodologies, instructional materials, and technologies, 
     and professional development.
       (E) Monitoring and evaluating the quality of, and the 
     improvement in, services and activities conducted with 
     Federal financial assistance under this subtitle, including 
     carrying out section 433(a)(2).
       (F) The support of a common management information system 
     as described in section 109.
       (G) Carrying out other activities of statewide significance 
     that promote the purposes of this Act.
       (4) Administrative expenses.--For any fiscal year, a State 
     may use not more than 3 percent of the funds paid to the 
     State under this subtitle that remain after the application 
     of paragraph (1) or $50,000, whichever is greater, for--
       (A) planning, administration, and interagency coordination 
     associated with a grant under this subtitle; and

[[Page 1396]]

       (B) support for integrated career center systems described 
     in section 107.
       (b) Local Uses of Funds.--A State shall require that a 
     local service provider that receives a grant from the State 
     under paragraph (1) or (2) of subsection (a) use the grant to 
     establish or operate one or more programs that provide 
     instruction or services within one or more of the following 
     categories:
       (1) Adult basic education that is designed for an adult 
     who--
       (A) has minimal competence in reading, writing, or 
     computation;
       (B) is not sufficiently competent in reading, writing, or 
     computation to meet the requirements of adult life in the 
     United States; or
       (C) is not sufficiently competent in speaking, reading, or 
     writing the English language to obtain employment 
     commensurate with the adult's intellectual abilities.
       (2) Adult secondary education that is designed for an adult 
     who is literate and can function in everyday life, but who--
       (A) has not acquired basic educational skills, including 
     reading, writing, and computation; or
       (B) does not have a certificate of graduation from a school 
     providing education to students in grade 12, or its 
     equivalent.
       (3) English literacy instruction that is designed for an 
     adult--
       (A) who--
       (i) has limited ability in speaking, reading, writing, or 
     understanding the English language and whose native language 
     is a language other than English; or
       (ii) lives in a family or community environment where a 
     language other than English is the dominant language; and
       (B) who, by reason of a condition described in subparagraph 
     (A), has sufficient difficulty reading, writing, or 
     understanding the English language that the adult is unable--
       (i) to learn successfully in a classroom where the language 
     of instruction is English; or
       (ii) to participate fully in the society of the United 
     States.
       (4) Family literacy services.
       (c) Authorization To Receive Payments From Other 
     Programs.--A local service provider that receives a grant 
     from a State under paragraph (1) or (2) of subsection (a), 
     and that provides adult education and literacy services to an 
     adult who was referred to the provider by a program supported 
     under title II or III, may receive payment for the services 
     from the program, either in the form of a career grant or by 
     some other means.

     SEC. 433. ADDITIONAL GRANT REQUIREMENTS.

       (a) Goals, Progress Indicators, Performance Measures.--
       (1) Planning requirements.--A State that desires to receive 
     a grant under this subtitle shall accomplish the following:
       (A) Establish, through the collaborative process described 
     in section 103, measurable goals for improving literacy 
     levels, retention in literacy programs, and long-term 
     learning gains of individuals in the State.
       (B) Based on such goals and the performance measures 
     described in section 110(f), establish, through such 
     collaborative process, progress indicators to be used to 
     evaluate the performance of local service providers receiving 
     a grant under paragraph (1) or (2) of section 432(a).
       (C) Describe such goals and progress indicators in the 
     State workforce development and literacy plan submitted to 
     the Secretary under section 104.
       (2) Implementation requirements.--A State that receives a 
     grant under this subtitle shall accomplish the following:
       (A) With respect to each local service provider receiving a 
     grant under paragraph (1) or (2) of section 432(a), based on 
     the goals and progress indicators established under paragraph 
     (1), measure the performance measures described in section 
     110(f) and use the data produced by such measurement to 
     improve the quality of services provided to program 
     participants or service recipients.
       (B) Beginning on the date that is 2 years after the first 
     date that a local service provider receives a grant under 
     paragraph (1) or (2) of section 432(a), annually assess the 
     degree to which the provider is meeting or exceeding the 
     progress indicators applicable to the provider.
       (C) Annually report to the Secretary on the performance 
     measures described in section 434 for each category described 
     in such section.
       (b) Other Requirements.--A State that receives a grant 
     under this subtitle shall ensure the following:
       (1) Expenditures of non-federal funds.--For any fiscal year 
     for which a grant is made to the State under this subtitle, 
     the State shall expend, on programs and activities relating 
     to adult education and family literacy services, an amount, 
     derived from sources other than the Federal Government, equal 
     to 25 percent of the State's initial and additional 
     allotments for the year.
       (2) Priority for planning with boards and systems.--In 
     awarding grants to local service providers under paragraph 
     (1) or (2) of section 432(a), the State shall give priority 
     to providers that demonstrate joint planning with local 
     workforce development boards and integrated career center 
     systems.
       (3) Equitable access.--Local educational agencies, public 
     or private nonprofit agencies, community-based organizations, 
     correctional education agencies, institutions of higher 
     education, libraries, and institutions which serve 
     educationally disadvantaged adults shall be provided direct 
     and equitable access to Federal funds provided under this 
     subtitle in accordance with this subtitle.
       (4) Payments by local workforce development boards to local 
     service providers.--A local service provider that receives a 
     grant from a State under paragraph (1) or (2) of section 
     432(a) may negotiate with a local workforce development board 
     with respect to receipt of payments for adult education and 
     literacy services provided by the provider to adults referred 
     to the provider by a program supported under title II or III.

                      CHAPTER 3--NATIONAL PROGRAMS

     SEC. 441. NATIONAL INSTITUTE FOR LITERACY.

       (a) Establishment.--
       (1) In general.--There shall be established a 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 Secretary may 
     include in the Institute any research and development center, 
     institute, or clearinghouse established within the Department 
     of Education whose purpose is determined by the Secretary to 
     be related to the purpose of the Institute.
       (2) Board 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 (d) in planning the 
     goals of the Institute and in the implementation of any 
     programs to achieve such goals.
       (3) Daily operations.--The daily operations of the 
     Institute shall be carried out by the Director of the 
     Institute appointed under subsection (g).
       (b) Duties.--
       (1) In general.--The Institute shall--
       (A) provide national leadership for the improvement and 
     expansion of the system for delivery of literacy services;
       (B) coordinate the delivery of such services;
       (C) support the creation of new methods of offering 
     improved services;
       (D) serve as a national resource for adult education and 
     family literacy services by providing to the public the best 
     and most current information available on the subjects; and
       (E) assist States in developing levels of performance.
       (2) Authorized activities.--In order to carry out the 
     duties described in paragraph (1), the Institute may--
       (A) establish a national electronic database of information 
     that includes--
       (i) information on--

       (I) effective practices in the provision of literacy and 
     basic skills instruction;
       (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; and
       (III) technical assistance, meetings, conferences, and 
     other opportunities that lead to the improvement of literacy 
     and basic skills services; and

       (ii) a communication network for literacy programs, 
     providers, and students;
       (B) coordinate support for the provision of literacy and 
     basic skills services across Federal agencies and at the 
     State and local level;
       (C) coordinate the support of research and development on 
     literacy and basic skills in families and adults across 
     Federal agencies and carry out basic and applied research and 
     development on topics that are not being investigated by 
     other organizations or agencies;
       (D) collect and disseminate information on methods of 
     advancing literacy that show promise of success; and
       (E) assist in the development of policy with respect to 
     literacy and basic skills.
       (3) Grants, contracts, and agreements.--The Institute may 
     enter into contracts or cooperative agreements with, or make 
     grants to, individuals, public or private institutions, 
     agencies, organizations, or consortia of such institutions, 
     agencies, or organizations to carry out the activities of the 
     Institute. Such grants, contracts, or agreements shall be 
     subject to the laws and regulations that generally apply to 
     grants, contracts, or agreements entered into by Federal 
     agencies.
       (c) Literacy Leadership.--
       (1) Fellowships.--The Institute, in consultation with the 
     Board, may award fellowships, with such stipends and 
     allowances as the Director considers necessary, to 
     outstanding individuals pursuing careers in adult education 
     or literacy in the areas of instruction, management, 
     research, or innovation.
       (2) Use of 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.

[[Page 1397]]

       (d) National Institute for Literacy Advisory Board.--
       (1) Establishment.--
       (A) In general.--There shall be a National Institute for 
     Literacy Advisory Board. The Board shall consist of 10 
     individuals appointed by the President with the advice and 
     consent of the Senate from individuals who--
       (i) are not otherwise officers or employees of the Federal 
     Government; and
       (ii) are representative of entities or groups described in 
     subparagraph (B).
       (B) Entities or groups described.--The entities or groups 
     referred to in subparagraph (A) are--
       (i) literacy organizations and providers of literacy 
     services, including--

       (I) nonprofit providers of literacy services;
       (II) providers of programs and services involving English 
     language instruction; and
       (III) providers of services receiving assistance under this 
     subtitle;

       (ii) businesses that have demonstrated interest in literacy 
     programs;
       (iii) literacy students;
       (iv) experts in the area of literacy research;
       (v) State and local governments; and
       (vi) representatives of employees.
       (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) Terms.--
       (A) In general.--Each member of the Board shall be 
     appointed for a term of 3 years, except that the initial 
     terms for members may be 1, 2, or 3 years in order to 
     establish a rotation in which \1/3\ of the members are 
     selected each year.
       (B) Vacancy appointments.--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 members' term until a successor has 
     taken office. A vacancy in the Board shall be filled in the 
     manner in which the original appointment was made. A vacancy 
     in the Board shall not affect the powers of the Board.
       (4) Quorum.--A majority of the members of the Board shall 
     constitute a quorum but a lesser number may hold hearings. 
     Any recommendation may be passed only by a majority of its 
     members present.
       (5) Chairperson and vice chairperson.--The chairperson and 
     vice chairperson of the Board shall be elected by the 
     members. The term of office of the chairperson and vice 
     chairperson shall be 1 year.
       (6) Meetings.--The Board shall meet at the call of the 
     chairperson or a majority of its members.
       (e) Gifts, Bequests, and Devises.--The Institute may 
     accept, administer, and use gifts or donations of services, 
     money, or property, both real and personal.
       (f) 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.
       (g) Staff.--The Interagency Group, after considering 
     recommendations made by the Board, shall appoint and fix the 
     pay of a Director.
       (h) 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 
     maximum rate payable under section 5376 of title 5, United 
     States Code.
       (i) Experts and Consultants.--The Board and the Institute 
     may procure temporary and intermittent services under section 
     3109(b) of title 5, United States Code.
       (j) Report.--The Institute shall submit a biennial report 
     to the Interagency Group and the Congress.

     SEC. 442. NATIONAL LEADERSHIP ACTIVITIES.

       (a) In General.--The Secretary shall establish and carry 
     out a program of national leadership and evaluation 
     activities to enhance the quality of adult education and 
     family literacy programs nationwide.
       (b) Required Activity.--
       (1) In general.--The program of national leadership and 
     evaluation activities under subsection (a) shall include a 
     national evaluation, conducted by the Secretary, of the 
     programs and activities carried out by States and local 
     service providers with Federal funds received under this 
     subtitle. Such evaluation shall include information on the 
     following:
       (A) The manner in which States and local service providers 
     use Federal funds, including the manner in which States 
     allocate such funds among such providers.
       (B) The manner in which States establish goals and 
     performance standards and use such goals and standards to 
     manage and improve programs.
       (C) The effectiveness of the funds used under subparagraphs 
     (B) and (C) of section 432(a)(3).
       (D) The manner in which economically disadvantaged 
     individuals and educationally disadvantaged adults are being 
     served by States and local service providers.
       (E) The coordination between programs and activities 
     carried out with Federal funds received under titles II and 
     III and programs and activities carried out with Federal 
     funds received under this subtitle.
       (F) The percentage of individuals receiving a service from 
     an integrated career center system who are referred by such 
     system to a local service provider providing adult education 
     or literacy services.
       (2) Report.--Not later than September 30, 2001, the 
     Secretary shall provide to the Congress and publicly publish 
     the results of the evaluation conducted under paragraph (1).
       (c) Authorized Activities.--
       (1) In general.--The program of national leadership and 
     evaluation activities under subsection (a) may include the 
     following:
       (A) Assisting States in developing levels of performance.
       (B) Research and development.
       (C) Demonstration of model and innovative programs.
       (D) Evaluations, including independent evaluations of adult 
     education and family literacy programs carried out with 
     financial assistance received pursuant to this subtitle.
       (E) Data collection.
       (F) Professional development.
       (G) Technical assistance to States and local service 
     providers receiving Federal financial assistance pursuant to 
     this subtitle.
       (H) Making grants to State or regional networks of literacy 
     resource centers described in section 432(a)(3)(D).
       (I) Other activities to enhance the quality of adult 
     education and family literacy programs nationwide.
       (2) Grants, contracts, and cooperative agreements.--The 
     Secretary may carry out the activities described in paragraph 
     (1) directly or through grants, contracts, and cooperative 
     agreements.
    Subtitle B--Library Services and Technology Consolidation Grant

     SEC. 451. PURPOSES.

       The purposes of this subtitle are--
       (1) to consolidate Federal library service programs;
       (2) to improve public access to information through 
     electronic networks; and
       (3) to provide linkages among and between libraries and 
     integrated career center systems.

     SEC. 452. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated to 
     carry out this subtitle $110,000,000 for each of the fiscal 
     years 1997 through 2002.
       (b) Advance Notice of Funding.--For the purpose of 
     affording adequate notice of funding available under this 
     subtitle, an appropriation to carry out this subtitle is 
     authorized to be included in an appropriation Act for the 
     fiscal year preceding the fiscal year for which such 
     appropriation is first available for obligation.

     SEC. 453. ALLOTMENTS.

       (a) Initial Allotments.--
       (1) In general.--From the sums appropriated under section 
     452 for any fiscal year, the Secretary shall allot--
       (A) $40,000 each to Guam, American Samoa, the Commonwealth 
     of the Northern Mariana Islands, and the Virgin Islands; and
       (B) $200,000 to each of the other States.
       (2) Ratable reduction.--If the sums appropriated under 
     section 452 for any fiscal year are insufficient to pay all 
     of the allotments under paragraph (1), each such allotment 
     shall be ratably reduced.
       (b) Additional Allotments.--
       (1) In general.--From the remainder of the sums 
     appropriated under section 452 for any fiscal year after the 
     application of subsection (a), the Secretary shall allot to 
     each State an amount which bears the same ratio to such 
     remainder as the population of the State bears to the 
     population of all States.
       (2) Determination of population of states.--For the purpose 
     of this subsection, the population of each State, and the 
     total population of all States, shall be determined by the 
     Secretary on the basis of the most recent census data 
     available to the Secretary, and the Secretary shall use for 
     such purpose, if available, the annual interim current census 
     data produced by the Secretary of Commerce pursuant to 
     section 181 of title 13, United States Code.

     SEC. 454. GRANTS TO STATES.

       (a) In General.--The Secretary shall make a grant for a 
     fiscal year to a State if the State--
       (1) has submitted to the Secretary for the year an annual 
     application that has been approved by the Secretary under 
     section 456; and
       (2) has entered into a written agreement with the Secretary 
     that--
       (A) the State will provide 100 percent of the funds paid to 
     the State under this subtitle for the year to the State 
     library administrative agency for the State;
       (B) such agency will be required to use such funds to carry 
     out activities that--
       (i) are described in such annual application;
       (ii) achieve the purposes of this subtitle; and
       (iii) satisfy the requirements of section 455;
       (C) there will be available from State and local sources 
     for expenditure by such agency to carry out such activities 
     an amount that equals or exceeds 25 percent of the total cost 
     (as determined by the Secretary) of carrying out such 
     activities for the year; and
       (D) such agency has the fiscal and legal authority and 
     capability to administer all aspects of such activities.

[[Page 1398]]

       (b) Amount of Grants.--The amount of a grant to a State 
     under subsection (a) for a fiscal year shall equal the lesser 
     of the following:
       (1) The sum of the initial and additional allotments of the 
     State for the year.
       (2) 75 percent of the total cost (as determined by the 
     Secretary) of carrying out the activities described in 
     subsection (a)(2)(B) for the year.

     SEC. 455. USES OF FUNDS.

       (a) In General.--Of the funds provided to a State library 
     administrative agency under section 454(a)(2)(A), the agency 
     shall expend (either directly or through subgrants or 
     cooperative agreements) at least 97 percent for one or more 
     of the following purposes:
       (1) Electronically connecting libraries with integrated 
     career center systems designated or established under section 
     107 and local service providers receiving grants under 
     paragraph (1) or (2) of section 432(a).
       (2) Establishing or enhancing linkages among libraries.
       (3) Assisting libraries in accessing information through 
     electronic networks.
       (4) Encouraging libraries in different Federal, State, and 
     local jurisdictions, and different types of libraries, to 
     establish consortia and share resources.
       (5) Paying costs for libraries to acquire or share computer 
     systems and telecommunications technologies.
       (6) Improving library and information services for 
     individuals who have difficulty using a library or who need 
     special library materials or services, including individuals 
     under the age of 18.
       (b) Administrative Expenses.--In any fiscal year, a State 
     library administrative agency may use not more than 3 percent 
     of the funds provided to the agency under section 
     454(a)(2)(A) for planning, administration, evaluations, and 
     interagency coordination associated with a grant under this 
     subtitle.

     SEC. 456. ANNUAL APPLICATIONS.

       (a) Submission.--A State that desires to receive a grant 
     under this subtitle for a fiscal year shall submit to the 
     Secretary, in such form and manner and before such deadline 
     as the Secretary shall specify in regulations, an application 
     for such year. Such application shall--
       (1) establish goals, and specify priorities, for the State 
     consistent with the purposes of this subtitle;
       (2) describe activities that are consistent with such goals 
     and priorities, the purposes of this subtitle, and the 
     requirements of section 455 that the State library 
     administrative agency will carry out during such year using 
     such grant;
       (3) describe the procedures that such agency will use to 
     carry out such activities;
       (4) describe the methodology that such agency will use to 
     evaluate the success of such activities in achieving such 
     goals and meeting such priorities;
       (5) describe procedures that such agency will use to 
     involve libraries and library users throughout the State in 
     policy decisions regarding implementation of this subtitle; 
     and
       (6) provide assurances satisfactory to the Secretary that 
     such agency will make such reports, in such form and 
     containing such information, as the Secretary may reasonably 
     require to carry out this subtitle and to determine the 
     extent to which funds provided under this subtitle have been 
     effective in carrying out its purposes.
       (b) Approval.--
       (1) In general.--The Secretary shall approve each 
     application submitted under subsection (a) that satisfies the 
     requirements of the subsection.
       (2) Rights of states upon disapproval.--If the Secretary 
     determines that an application submitted by a State under 
     subsection (a) does not satisfy the requirements of such 
     subsection, the Secretary shall--
       (A) immediately notify the State of such determination and 
     the reasons for such determination; and
       (B) offer the State an opportunity to revise its 
     application to correct any deficiencies.
                   TITLE V--MISCELLANEOUS PROVISIONS

     SEC. 501. EFFECT ON REHABILITATION ACT OF 1973.

       Notwithstanding any other provision of this Act, this Act 
     does not have any legal effect on any program under the 
     Rehabilitation Act of 1973.
                TITLE VI--HIGHER EDUCATION PRIVATIZATION

     SEC. 601. REORGANIZATION OF THE STUDENT LOAN MARKETING 
                   ASSOCIATION THROUGH THE FORMATION OF A HOLDING 
                   COMPANY.

       (a) Amendment.--Part B of title IV of the Higher Education 
     Act of 1965 (20 U.S.C. 1071 et seq.) is amended by inserting 
     after section 439 (20 U.S.C. 1087-2) the following new 
     section:

     ``SEC. 440. REORGANIZATION OF THE STUDENT LOAN MARKETING 
                   ASSOCIATION THROUGH THE FORMATION OF A HOLDING 
                   COMPANY.

       ``(a) Actions by the Association's Board of Directors.--The 
     Board of Directors of the Association shall take or cause to 
     be taken all such action as it deems necessary or appropriate 
     to effect, upon the shareholder approval described in 
     subsection (b), a restructuring of the common stock ownership 
     of the Association, as set forth in a plan of reorganization 
     adopted by the Board of Directors (the terms of which shall 
     be consistent with this Act) so that all of the outstanding 
     common shares shall be directly owned by an ordinary business 
     corporation chartered under State or District of Columbia law 
     (the `Holding Company'), as the Board of Directors may 
     determine. Such actions may include, in the Board's 
     discretion, a merger of a wholly owned subsidiary of the 
     Holding Company with and into the Association, which would 
     have the effect provided in the plan of reorganization and 
     the law of the jurisdiction in which such subsidiary is 
     incorporated. As part of the restructuring, the Board of 
     Directors may cause (1) the common shares of the Association 
     to be converted, at the reorganization effective date, to 
     common shares of the Holding Company on a one for one basis, 
     consistent with applicable State or District of Columbia law, 
     and (2) Holding Company common shares to be registered with 
     the Securities and Exchange Commission.
       ``(b) Shareholder Approval.--The plan of reorganization 
     adopted by the Board of Directors pursuant to subsection (a) 
     shall be submitted to common stockholders of the Association 
     for their approval. The reorganization shall occur at the 
     reorganization effective date, provided that the plan of 
     reorganization has been approved by the affirmative votes, 
     cast in person or by proxy, of the holders of a majority of 
     the issued and outstanding shares of the Association common 
     stock.
       ``(c) Transition.--
       ``(1) In general.--Except as specifically provided in this 
     section, until the dissolution date the Association shall 
     continue to have all of the rights, privileges and 
     obligations set forth in, and shall be subject to all of the 
     limitations and restrictions of, section 439 of this Act as 
     in effect on the effective date of this section, and the 
     Association shall continue to carry out the purposes of such 
     section. The Holding Company and its affiliates other than 
     the Association shall not be entitled to any of the rights, 
     privileges and obligations, and shall not be subject to the 
     limitations and restrictions, applicable to the Association 
     under section 439 of this Act as in effect on the effective 
     date of this section, except as specifically provided in this 
     section. The Holding Company and its subsidiaries (other than 
     the Association) shall not purchase loans insured under this 
     Act until such time as the Association ceases acquiring such 
     loans, except that the Association shall continue to acquire 
     loans as a lender of last resort pursuant to section 439(q) 
     of this Act or under an agreement with the Secretary 
     described in section 440(c)(6).
       ``(2) Transfer of certain property.--Except as specifically 
     provided in this section, at the reorganization effective 
     date or as soon as practicable thereafter, the Association 
     shall use its best efforts to transfer to the Holding Company 
     or its subsidiaries (or both), in each case, as directed by 
     the Holding Company, all real and personal property of the 
     Association (both tangible and intangible) other than the 
     remaining property. Without limiting the preceding sentence, 
     such transferred property shall include all right, title and 
     interest in (A) direct or indirect subsidiaries of the 
     Association (excluding any interest in any government 
     sponsored enterprise), (B) contracts, leases, and other 
     agreements, (C) licenses and other intellectual property, and 
     (D) any other property of the Association. Notwithstanding 
     the preceding provisions of this paragraph, nothing in this 
     paragraph shall be construed to prohibit the Association from 
     transferring remaining property from time to time to the 
     Holding Company or its subsidiaries, subject to the 
     provisions of paragraph (4).
       ``(3) Transfer of personnel.--At the reorganization 
     effective date, employees of the Association shall become 
     employees of the Holding Company (or of the subsidiaries), 
     and the Holding Company (or the subsidiaries or both) shall 
     provide all necessary and appropriate management and 
     operational support (including loan servicing) to the 
     Association, as requested by the Association. The Association 
     may, however, obtain such management and operational support 
     from other persons or entities.
       ``(4) Dividends.--The Association may pay dividends in the 
     form of cash or noncash distributions so long as at the time 
     of the declaration of such dividends, after giving effect to 
     the payment of such dividends as of the date of such 
     declaration by the Board of Directors of the Association, the 
     Association's capital would be in compliance with the capital 
     standards set forth in section 439(r) of this Act. If, at any 
     time after the reorganization effective date, the Association 
     fails to comply with such capital standards, the Holding 
     Company shall be obligated to transfer to the Association 
     additional capital in such amounts as are necessary to ensure 
     that the Association again complies with the capital 
     standards.
       ``(5) Valuation of noncash distributions.--After the 
     reorganization effective date, any distribution of noncash 
     assets by the Association to the Holding Company shall be 
     valued at book value on the date the Association's Board of 
     Directors approved such distribution for purposes of 
     calculating compliance with section 439(r) of this Act.
       ``(6) Restrictions on new business activity or acquisition 
     of assets by association.--After the reorganization effective 
     date, the Association shall not engage in any new business 
     activities or acquire any additional program assets described 
     in section 439(d) of the Act other than--
       ``(A) in connection with (i) student loan purchases through 
     September 30, 2005, and (ii) contractual commitments for 
     future warehousing advances or pursuant to letters of credit 
     or standby bond purchase agreements which are outstanding as 
     of the reorganization effective date;

[[Page 1399]]

       ``(B) in connection with its serving as a lender-of-last-
     resort pursuant to section 439 of this Act; and
       ``(C) in connection with its purchase of loans insured 
     under this part, if the Secretary, with the approval of the 
     Secretary of the Treasury, enters into an agreement with the 
     Association for the continuation or resumption of its 
     secondary market purchase program because the Secretary 
     determines there is inadequate liquidity for loans made under 
     this part.
     The Secretary is authorized to enter into an agreement 
     described in subparagraph (C) with the Association covering 
     such secondary market activities.
     Any agreement entered into under subparagraph (C) shall cover 
     a period of 12 months, but may be renewed if the Secretary 
     determines that liquidity remains inadequate. The fee 
     provided under section 439(h)(7) shall not apply to loans 
     acquired under any such agreement with the Secretary.
       ``(7) Issuance of debt obligations during the transition 
     period; attributes of debt obligations.--After the 
     reorganization effective date, the Association shall not 
     issue debt obligations which mature later than September 30, 
     2009, except in connection with serving as a lender-of-last-
     resort pursuant to section 439 of this Act or with purchasing 
     loans under an agreement with the Secretary as described in 
     paragraph (6) of this subsection. Nothing in this subsection 
     shall modify the attributes accorded the debt obligations of 
     the Association by section 439, regardless of whether such 
     debt obligations are incurred prior to, or at any time 
     following, the reorganization effective date or are 
     transferred to a trust in accordance with subsection (d).
       ``(8) Monitoring of safety and soundness.--
       ``(A) Obligation to obtain, maintain, and report 
     information.--The Association shall obtain such information 
     and make and keep such records as the Secretary of the 
     Treasury may from time to time prescribe concerning (i) the 
     financial risk to the Association resulting from the 
     activities of any of its associated persons, to the extent 
     such activities are reasonably likely to have a material 
     impact on the financial condition of the Association, 
     including its capital ratio, its liquidity, or its ability to 
     conduct and finance its operations, and (ii) the 
     Association's policies, procedures, and systems for 
     monitoring and controlling any such financial risk. The 
     Association's obligations under this subsection with respect 
     to any associated person which is a third party servicer (as 
     defined in 34 C.F.R. 682.200(b)) shall be limited to 
     providing to the Secretary of the Treasury copies of any 
     reports or other information provided to the Secretary of 
     Education pursuant to 34 C.F.R. 682.200 et seq. The Secretary 
     of the Treasury may require summary reports of such 
     information to be filed no more frequently than quarterly. 
     For purposes of this paragraph, the term `associated person' 
     shall mean any person, other than a natural person, directly 
     or indirectly controlling, controlled by, or under common 
     control with the Association.
       ``(B) Separate operation of corporations.--
       ``(i) The funds and assets of the Association shall at all 
     times be maintained separately from the funds and assets of 
     the Holding Company or any of its other subsidiaries and may 
     be used solely by the Association to carry out its purposes 
     and to fulfill its obligations.
       ``(ii) The Association shall maintain books and records 
     that clearly reflect the assets and liabilities of the 
     Association, separate from the assets and liabilities of the 
     Holding Company or any of its other subsidiaries.
       ``(iii) The Association shall maintain a corporate office 
     that is physically separate from any office of the Holding 
     Company or any of its subsidiaries.
       ``(iv) No director of the Association that is appointed by 
     the President pursuant to section 439(c)(1)(A) may serve as a 
     director of the Holding Company.
       ``(v) At least one officer of the Association shall remain 
     an officer solely of the Association.
       ``(vi) Transactions between the Association and the Holding 
     Company or its other subsidiaries, including any loan 
     servicing arrangements, shall be on terms no less favorable 
     to the Association than the Association could obtain from an 
     unrelated third party offering comparable services.
       ``(vii) The Association shall not extend credit to the 
     Holding Company or any of its affiliates, nor guarantee or 
     provide any credit enhancement to any debt obligations of the 
     Holding Company or any of its affiliates.
       ``(viii) Any amounts collected on behalf of the Association 
     by the Holding Company or any of its other subsidiaries with 
     respect to the assets of the Association, pursuant to a 
     servicing contract or other arrangement between the 
     Association and the Holding Company or any of its other 
     direct or indirect subsidiaries, shall be collected solely 
     for the benefit of the Association and shall be immediately 
     deposited by the Holding Company or such other subsidiary to 
     an account under the sole control of the Association.
       ``(C) Encumbrance of assets.--Notwithstanding any otherwise 
     applicable Federal or State law, rule, or regulation, or 
     legal or equitable principle, doctrine, or theory to the 
     contrary, under no circumstances shall the assets of the 
     Association be available or used to pay claims or debts of or 
     incurred by the Holding Company. Nothing in this subparagraph 
     shall limit the right of the Association to pay dividends not 
     otherwise prohibited hereunder or limit any liability of the 
     Holding Company explicitly provided for in this part.
       ``(D) Holding company activities.--After the reorganization 
     effective date and prior to the dissolution of the 
     Association in accordance with section 440(d), Holding 
     Company activities shall be limited to ownership of the 
     Association and any other subsidiaries. All business 
     activities shall be conducted through subsidiaries.
       ``(9) Association board of directors.--Notwithstanding any 
     other provision of part B of this title, after the 
     reorganization effective date, the 14 directors of the 
     Association elected by the Association's stockholders (which 
     immediately after the reorganization effective date shall be 
     the Holding Company) shall no longer be required to meet the 
     eligibility requirements set forth in section 439(c).
       ``(10) Issuance of stock warrants.--At the reorganization 
     effective date, the Holding Company shall issue to the 
     Secretary of the Treasury 200,000 stock warrants, each 
     entitling the holder of the stock warrant to purchase from 
     the Holding Company one share of the registered common stock 
     of the Holding Company at any time on or before September 30, 
     2009. The exercise price for such warrants shall be an amount 
     equal to the average closing price of the common stock of the 
     Association for the 20 business days prior to and including 
     the date of enactment of this section on the exchange or 
     market which is then the primary exchange or market for the 
     common stock of the Association, subject to any adjustments 
     necessary to reflect the conversion of Association common 
     stock into Holding Company common stock as part of the plan 
     of reorganization approved by the Association's shareholders.
       ``(11) Restrictions on transfer of association shares and 
     bankruptcy of association.--After the reorganization 
     effective date, the Holding Company shall not sell, pledge, 
     or otherwise transfer the outstanding shares of the 
     Association, or agree to or cause the liquidation of the 
     Association or cause the Association to file a petition for 
     bankruptcy under title 11, United States Code, without prior 
     approval of the Secretary of the Treasury and the Secretary 
     of Education.
       ``(d) Termination of the Association.--The Association 
     shall dissolve, and its separate existence shall terminate on 
     September 30, 2009, after discharge of all outstanding debt 
     obligations and liquidation pursuant to this subsection. The 
     Association may dissolve pursuant to this subsection prior to 
     such date by notifying the Secretary of Education and the 
     Secretary of the Treasury of its intention to dissolve, 
     unless within 60 days of receipt of such notice the Secretary 
     of Education notifies the Association that it continues to be 
     needed to serve as a lender of last resort pursuant to 
     section 439(q) of this Act or continues to be needed to 
     purchase loans under an agreement with the Secretary 
     described in subsection (c)(6) of this section. On the 
     dissolution date, the Association shall take the following 
     actions:
       ``(1) Establishment of a trust.--The Association shall, 
     under the terms of an irrevocable trust agreement in form and 
     substance satisfactory to the Secretary of the Treasury, the 
     Association and the appointed trustee, irrevocably transfer 
     all remaining obligations of the Association to the trust and 
     irrevocably deposit or cause to be deposited into such trust, 
     to be held as trust funds solely for the benefit of holders 
     of the remaining obligations, money or direct noncallable 
     obligations of the United States of America or any agency 
     thereof for which payment the full faith and credit of the 
     United States is pledged, maturing as to principal and 
     interest in such amounts and at such times as are determined 
     by the Secretary of the Treasury to be sufficient, without 
     consideration of any significant reinvestment of such 
     interest, to pay the principal of, and interest on, the 
     remaining obligations in accordance with their terms. To the 
     extent the Association cannot provide money or qualifying 
     obligations in the amount required, the Holding Company shall 
     be required to transfer money or qualifying obligations to 
     the trust in the amount necessary to prevent any deficiency.
       ``(2) Use of trust assets.--All money, obligations, or 
     financial assets deposited into the trust pursuant to this 
     subsection shall be applied by the trustee to the payment of 
     the remaining obligations assumed by the trust. Upon the 
     fulfillment of the trustee's duties under the trust, any 
     remaining assets of the trust shall be transferred to the 
     Holding Company or its subsidiaries, or both, as directed by 
     the Holding Company.
       ``(3) Obligations not transferred to the trust.--The 
     Association shall make proper provision for all other 
     obligations of the Association, including the repurchase or 
     redemption, or the making of proper provision for the 
     repurchase or redemption, of any preferred stock of the 
     Association then outstanding. Any obligations of the 
     Association which cannot be fully satisfied shall become 
     liabilities of the Holding Company as of the date of 
     dissolution.
       ``(4) Transfer of remaining assets.--After compliance with 
     paragraphs (1), and (3), the Association shall transfer to 
     the Holding Company any remaining assets of the Association.
       ``(e) Operation of the Holding Company.--
       ``(1) Holding company board of directors.--The number and 
     composition of the Board of Directors of the Holding Company 
     shall be determined as set forth in the Hold

[[Page 1400]]

     ing Company's charter or like instrument (as amended from 
     time to time) or bylaws (as amended from time to time) and as 
     permissible under the laws of the jurisdiction of its 
     incorporation.
       ``(2) Holding company name.--The names of the Holding 
     Company and any subsidiary of the Holding Company other than 
     the Association--
       ``(A) may not contain the name `Student Loan Marketing 
     Association'; and
       ``(B) may contain, to the extent permitted by applicable 
     State or District of Columbia law, `Sallie Mae', or 
     variations thereof or such other names as the Board of 
     Directors of the Association of the Holding Company shall 
     deem appropriate.
       ``(3) Use of sallie mae name.--Without limiting paragraph 
     (2), the Association may assign to the Holding Company, or 
     any other subsidiary of the Holding Company, the `Sallie Mae' 
     name as a trademark and service mark, except that neither the 
     Holding Company nor any subsidiary of the Holding Company 
     other than the Association or a subsidiary of the Association 
     may use the `Sallie Mae' name on, or to identify the issuer 
     of, any debt obligation or other security offered or sold by 
     the Holding Company or any such subsidiary. The Association 
     shall remit to the Secretary of Treasury $5,000,000 during 
     fiscal year 1996 as compensation for the right to assign such 
     trademark or service mark.
       ``(4) Disclosure required.--Until 3 years after the 
     dissolution date, the Holding Company, and any subsidiary of 
     the Holding Company other than the Association, shall 
     prominently display--
       ``(A) in any document offering its securities, that the 
     obligations of the Holding Company and any such subsidiary 
     are not guaranteed by the full faith and credit of the United 
     States; and
       ``(B) in any advertisement or promotional materials which 
     use the `Sallie Mae' name or mark, a statement that neither 
     the Holding Company nor any such subsidiary is a Government-
     sponsored enterprise or instrumentality of the United States.
       ``(f) Strict Construction.--Except as specifically set 
     forth in this section, nothing contained in this section 
     shall be construed to limit the authority of the Association 
     as a federally chartered corporation, or of the Holding 
     Company as a State or District of Columbia chartered 
     corporation.
       ``(g) Right To Enforce.--The Secretary of Education or the 
     Secretary of the Treasury, as appropriate, may request the 
     Attorney General of the United States to bring an action in 
     the United States District Court for the District of Columbia 
     for the enforcement of any provisions of this section, or 
     may, under the direction or control of the Attorney General, 
     bring such an action. Such court shall have jurisdiction and 
     power to order and require compliance with this section.
       ``(h) Deadline for Reorganization Effective Date.--This 
     section shall be of no further force and effect in the event 
     that the reorganization effective date does not occur on or 
     before 18 months after the date of enactment of this section.
       ``(i) Definitions.--For purposes of this section:
       ``(1) The term `Association' means the Student Loan 
     Marketing Association.
       ``(2) The term `dissolution date' shall mean September 30, 
     2009, or such earlier date as the Secretary of Education 
     permits the transfer of remaining obligations in accordance 
     with subsection (d) of this section.
       ``(3) The term `reorganization effective date' means the 
     effective date of the reorganization as determined by the 
     Board of Directors of the Association, which shall not be 
     earlier than the date that stockholder approval is obtained 
     pursuant to subsection (b) of this section and shall not be 
     later than the date that is 18 months after the date of 
     enactment of this section.
       ``(4) The term `Holding Company' means the new business 
     corporation formed pursuant to this section by the 
     Association under the laws of any State of the United States 
     or the District of Columbia.
       ``(5) The term `remaining obligations' shall mean the debt 
     obligations of the Association outstanding as of the 
     dissolution date.
       ``(6) The term `remaining property' shall mean the 
     following assets and liabilities of the Association which are 
     outstanding as of the reorganization effective date: (A) debt 
     obligations issued by the Association, (B) contracts relating 
     to interest rate, currency, or commodity positions or 
     protections, (C) investment securities owned by the 
     Association, (D) any instruments, assets, or agreements 
     described in section 439(d) of this Act (including without 
     limitation all student loans, forward purchase and lending 
     commitments, warehousing advances, academic facilities 
     obligations, letters of credit, standby bond purchase 
     agreements, liquidity agreements, and student loan revenue 
     bonds or other loans), and (E) except as specifically 
     prohibited by this Act, any other nonmaterial assets or 
     liabilities of the Association which the Association's Board 
     of Directors determines to be necessary or appropriate to its 
     operations.
       ``(7) The term `reorganization' means the restructuring 
     event or events (including any merger event) giving effect to 
     the holding company structure described in subsection (a) of 
     this section.
       ``(8) The term `subsidiary' or `subsidiaries' shall mean 
     one or more direct or indirect subsidiaries of the Holding 
     Company.''.
       (b) Technical Amendments.--
       (1) Amendments to the higher education act.--Effective on 
     the reorganization effective date (as defined in section 
     440(h)(3) of the Higher Education Act of 1965, as added by 
     subsection (a))--
       (A) section 435(d)(1)(F) of such Act (20 U.S.C. 
     1085(d)(1)(F)) is amended by inserting after ``Student Loan 
     Marketing Association'' the following: ``or the Holding 
     Company of the Student Loan Marketing Association, including 
     all subsidiaries of such Holding Company, created pursuant to 
     section 440 of this Act,''; and
       (B) sections 435(d)(1)(G) and 428C(a)(1)(A) of such Act (20 
     U.S.C. 1085(d)(1)(G); 1078-3(a)(1)(A)) are each amended by 
     inserting after ``Student Loan Marketing Association'' the 
     following: ``or the Holding Company of the Student Loan 
     Marketing Association, including all subsidiaries of such 
     Holding Company, created pursuant to section 440 of this 
     Act''.
       (2) Enforcement of safety and soundness requirements.--
     Section 439(r) of the Higher Education Act of 1965 (20 U.S.C. 
     1087-2(r)) is amended--
       (A) by redesignating paragraph (13) as paragraph (15); and
       (B) by inserting after paragraph (12) the following new 
     paragraph:
       ``(13) Enforcement of safety and soundness requirements.--
     The Secretary of Education or the Secretary of the Treasury, 
     as appropriate, may request the Attorney General of the 
     United States to bring an action in the United States 
     District Court for the District of Columbia for the 
     enforcement of any provisions of this subsection, or may, 
     under the direction or control of the Attorney General, bring 
     such an action. Such court shall have jurisdiction and power 
     to order and require compliance with this subsection.''.
       (3) Capital ratio amendments.--Section 439(r) of the Higher 
     Education Act of 1965 is further amended--
       (A) in paragraph (1)--
       (i) by striking ``and'' at the end of subparagraph (A);
       (ii) by striking the period at the end of subparagraph (B) 
     and inserting ``; and''; and
       (iii) by adding at the end the following new subparagraph:
       ``(C) within 45 days of the end of each fiscal quarter, (i) 
     financial statements of the Association, and (ii) a report 
     setting forth the calculation of the capital ratio of the 
     Association.'';
       (B) in paragraph (11), by striking ``paragraphs (4) and 
     (6)(A)'' and inserting ``paragraphs (4), (6)(A), and (14)''; 
     and
       (C) by inserting after paragraph (13) (as added by 
     paragraph (2) of this subsection) the following new 
     paragraph:
       ``(14) Actions by secretary.--If the shareholders of the 
     Association shall have approved a reorganization plan in 
     accordance with section 440(b) and, for any fiscal quarter 
     ended after January 1, 2000, the Association shall have a 
     capital ratio of less than 2.25 percent, the Secretary of the 
     Treasury may, until such capital ratio is met, take any one 
     or more of the actions described in paragraph (7), except 
     that--
       ``(A) the capital ratio to be restored pursuant to 
     paragraph (7)(D) shall be 2.25 percent; and
       ``(B) if the relevant capital ratio is in excess of or 
     equal to 2 percent for such quarter, the Secretary of the 
     Treasury shall defer taking any of the actions set forth in 
     paragraph (7) until the next succeeding quarter and may then 
     proceed with any such action only if the capital ratio of the 
     Association remains below 2.25 percent.
     Upon approval by the shareholders of the Association of a 
     reorganization plan in accordance with section 440(b) for any 
     period after January 1, 2000, the provisions of paragraphs 
     (4), (5), (6), (8), (9), and (10) shall be of no further 
     application to the Association.''.
       (4) Repeal of the association's charter.--Effective on the 
     dissolution date (as defined in section 440(h)(2) of the 
     Higher Education Act of 1965, as added by subsection (a)), 
     section 439 of such Act (20 U.S.C. 1087-2) is repealed.

     SEC. 602. PRIVATIZATION OF COLLEGE CONSTRUCTION LOAN 
                   INSURANCE ASSOCIATION.

       (a) Repeal of Statutory Restrictions.--Part D of title VII 
     of the Higher Education Act of 1965 (20 U.S.C. 1132f et seq.) 
     is repealed.
       (b) Status of the Corporation.--
       (1) Status of the corporation.--The Corporation shall not 
     be an agency, instrumentality, or establishment of the United 
     States Government and shall not be a ``Government 
     corporation'' nor a ``Government controlled corporation'' as 
     defined in section 103 of title 5, United States Code. No 
     action under section 1491 of title 28, United States Code 
     (commonly known as the Tucker Act) shall be allowable against 
     the United States based on the actions of the Corporation.
       (2) Corporate powers.--The Corporation shall have the power 
     to engage in any business or other activities for which 
     corporations may be organized under the laws of any State of 
     the United States or the District of Columbia. The 
     Corporation shall have the power to enter into contracts, to 
     execute instruments, to incur liabilities, to provide 
     products and services, and to do all things as are necessary 
     or incidental to the proper management of its affairs and the 
     efficient operation of a private, for-profit business.
       (3) Limitation on ownership of stock.--Except as provided 
     in subsection (d)(2) of this section, no stock of the 
     Corporation may be sold or issued to an agency, 
     instrumentality, or establishment of the United States 
     Government, to a Government corporation or a Government 
     controlled corporation (as such terms are defined in section 
     103 of title 5,

[[Page 1401]]

     United States Code), or to a Government sponsored enterprise 
     (as such term is defined in section 622 of title 2, United 
     States Code). The Student Loan Marketing Association shall 
     not own any stock of the Corporation, except that it may 
     retain the stock it owns on the date of enactment. The 
     Student Loan Marketing Association shall not control the 
     operation of the Corporation, except that the Student Loan 
     Marketing Association may participate in the election of 
     directors as a shareholder, and may continue to exercise its 
     right to appoint directors under section 754 of the Higher 
     Education Act of 1965 as long as that section is in effect. 
     The Student Loan Marketing Association shall not provide 
     financial support or guarantees to the Corporation. 
     Notwithstanding the prohibitions in this subsection, the 
     United States may pursue any remedy against a holder of the 
     Corporation's stock to which it would otherwise be entitled.
       (c) Related Privatization Requirements.--
       (1) Notice requirements.--During the 5-year period 
     following the date of the enactment of this Act, the 
     Corporation shall include in any document offering the 
     Corporation's securities, in any contracts for insurance, 
     guarantee, or reinsurance of obligations, and in any 
     advertisement or promotional material, a statement that--
       (A) the Corporation is not a Government-sponsored 
     enterprise or instrumentality of the United States; and
       (B) the Corporation's obligations are not guaranteed by the 
     full faith and credit of the United States.
       (2) Corporate charter.--The Corporation's charter shall be 
     amended as necessary and without delay to conform the 
     requirements of this Act.
       (3) Corporate name.--The name of the Corporation, or of any 
     direct or indirect subsidiary thereof, may not contain the 
     term ``College Construction Loan Insurance Association''.
       (4) Articles of incorporation.--The Corporation shall amend 
     its articles of incorporation without delay to reflect that 
     one of the purposes of the Corporation shall be to guarantee, 
     insure and reinsure bonds, leases, and other evidences of 
     debt of educational institutions, including Historically 
     Black Colleges and Universities and other academic 
     institutions which are ranked in the lower investment grade 
     category using a nationally recognized credit rating system.
       (5) Transition requirements.--
       (A) Requirements until stock sale.--Notwithstanding 
     subsection (a), the requirements of section 754 of the Higher 
     Education Act of 1965 (20 U.S.C. 1132f-3), as in existence as 
     of the day before enactment of this Act, shall continue to be 
     effective until the day immediately following the date of 
     closing of the purchase of the Secretary's stock (or the date 
     of closing of the final purchase, in the case of multiple 
     transactions) pursuant to subsection (d) of this section.
       (B) Reports after stock sale.--The Corporation shall, not 
     later than March 30 of the first full calendar year 
     immediately following the sale pursuant to subsection (d), 
     and each of the 2 succeeding years, submit to the Secretary 
     of Education a report describing the Corporation's efforts to 
     assist in the financing of education facilities projects, 
     including projects for elementary, secondary, and 
     postsecondary educational institution infrastructure, and 
     detailing, on a project-by-project basis, the Corporation's 
     business dealings with educational institutions that are 
     rated by a nationally recognized statistical rating 
     organization at or below the organization's third highest 
     ratings.
       (d) Sale of Federally Owned Stock.--
       (1) Sale of stock required.--The Secretary of the Treasury 
     shall make every effort to sell, pursuant to section 324 of 
     title 31, United States Code, the stock of the Corporation 
     owned by the Secretary of Education not later than 6 months 
     after the date of the enactment of this Act.
       (2) Purchase by the corporation.--In the event that the 
     Secretary of the Treasury is unable to sell the stock, or any 
     portion thereof, at a price acceptable to the Secretary of 
     Education and the Secretary of the Treasury, the Corporation 
     shall purchase, within the period specified in paragraph (1), 
     such stock at a price determined by the Secretary of the 
     Treasury and acceptable to the Corporation based on 
     independent appraisal by one or more nationally recognized 
     financial firms, however, such price shall not exceed the 
     value of the Secretary's stock as determined by the 
     Congressional Budget Office in House Report 104-153 dated 
     June 22, 1995. Such firms shall be selected by the Secretary 
     of the Treasury in consultation with the Secretary of 
     Education and the Corporation.
       (e) Assistance by the Corporation.--The Corporation shall 
     provide such assistance as the Secretary of the Treasury and 
     the Secretary of Education may require to facilitate the sale 
     of the stock under this section.
       (f) Definition.--As used in this section, the term 
     ``Corporation'' means the Corporation established pursuant to 
     the provision of law repealed by subsection (a).
               TITLE VII--REPEALERS AND OTHER AMENDMENTS

     SEC. 701. HIGHER EDUCATION PROVISIONS.

       (a) Higher Education Act of 1965 Provisions.--The following 
     provisions of the Higher Education Act of 1965 are repealed:
       (1) Part B of title I (20 U.S.C. 1011 et seq.), relating to 
     articulation agreements.
       (2) Part C of title I (20 U.S.C. 1015 et seq.), relating to 
     access and equity to education for all Americans through 
     telecommunications.
       (3) Title II (20 U.S.C. 1021 et seq.), relating to academic 
     libraries and information services.
       (4) Chapter 2 of subpart 2 of part A of title IV (20 U.S.C. 
     1070a-21 et seq.), relating to national early intervention 
     scholarships.
       (5) Chapter 3 of subpart 2 of part A of title IV (20 U.S.C. 
     1070a-31 et seq.), relating to presidential access 
     scholarships.
       (6) Chapter 4 of subpart 2 of part A of title IV (20 U.S.C. 
     1070a-41 et seq.), relating to model program community 
     partnerships and counseling grants.
       (7) Chapter 5 of subpart 2 of part A of title IV (20 U.S.C. 
     1070a-52 et seq.), relating to an early awareness information 
     program.
       (8) Chapter 8 of subpart 2 of part A of title IV (20 U.S.C. 
     1070a-81), relating to technical assistance for teachers and 
     counselors.
       (9) Subpart 8 of part A of title IV (20 U.S.C. 1070f), 
     relating to special child care services for disadvantaged 
     college students.
       (10) Section 428J (20 U.S.C. 1078-10), relating to loan 
     forgiveness for teachers, individuals performing national 
     community service and nurses.
       (11) Section 486 (20 U.S.C. 1093), relating to training in 
     financial aid services.
       (12) Subpart 1 of part H of title IV (20 U.S.C. 1099a et 
     seq.) relating to State postsecondary review entity programs.
       (13) Part A of title V (20 U.S.C. 1102 et seq.), relating 
     to State and local programs for teacher excellence.
       (14) Part B of title V (20 U.S.C. 1103 et seq.), relating 
     to national teacher academies.
       (15) Subpart 1 of part C of title V (20 U.S.C. 1104 et 
     seq.), relating to Douglas teacher scholarships.
       (16) Subpart 3 of part C of title V (20 U.S.C. 1106 et 
     seq.), relating to the teacher corps.
       (17) Subpart 3 of part D of title V (20 U.S.C. 1109 et 
     seq.), relating to class size demonstration grants.
       (18) Subpart 4 of part D of title V (20 U.S.C. 1110 et 
     seq.), relating to middle school teaching demonstration 
     programs.
       (19) Subpart 1 of part E of title V (20 U.S.C. 1111 et 
     seq.), relating to new teaching careers.
       (20) Subpart 1 of part F of title V (20 U.S.C. 1113 et 
     seq.), relating to the national mini corps programs.
       (21) Section 586 (20 U.S.C. 1114), relating to 
     demonstration grants for critical language and area studies.
       (22) Section 587 (20 U.S.C. 1114a), relating to development 
     of foreign languages and cultures instructional materials.
       (23) Subpart 3 of part F of title V (20 U.S.C. 1115), 
     relating to small State teaching initiatives.
       (24) Subpart 4 of part F of title V (20 U.S.C. 1116), 
     relating to faculty development grants.
       (25) Section 597 and section 599(b) (20 U.S.C. 1117a, 
     1117c(b)), relating to early childhood staff training and 
     professional enhancement.
       (26) Section 605 (20 U.S.C. 1124a), relating to intensive 
     summer language institutes.
       (27) Section 607 (20 U.S.C. 1125a), relating to foreign 
     language periodicals.
       (28) Part A of title VII (20 U.S.C. 11326 et seq.), 
     relating to academic and library facilities.
       (29) Title VIII (20 U.S.C. 1133 et seq.), relating to 
     cooperative education programs.
       (30) Part A of title IX (20 U.S.C. 1134a et seq.), relating 
     to women and minority participation in graduate education.
       (31) Part B of title IX (20 U.S.C. 1134d et seq.), relating 
     to Harris fellowships.
       (32) Part C of title IX (20 U.S.C. 1134h et seq.), relating 
     to Javits fellowships.
       (33) Part E of title IX (20 U.S.C. 1134r et seq.), relating 
     to the faculty development fellowship program.
       (34) Part F of title IX (20 U.S.C. 1134s et seq.), relating 
     to legal training for the disadvantaged.
       (35) Part G of title IX (20 U.S.C. 1134u et seq.), relating 
     to law school clinical programs.
       (36) Section 1011 (20 U.S.C. 1135a-11), relating to special 
     projects in areas of national need.
       (37) Subpart 2 of part B of title X (20 U.S.C. 1135c et 
     seq.), relating to science and engineering access programs.
       (38) Part C of title X (20 U.S.C. 1135e et seq.), relating 
     to women and minorities science and engineering outreach 
     demonstration programs.
       (39) Part D of title X (20 U.S.C. 1135f), relating to 
     Eisenhower leadership programs.
       (40) Title XI (20 U.S.C. 1136 et seq.), relating to 
     community service programs.
       (b) Education Amendments of 1986 Provisions.--The following 
     provisions of the Higher Education Amendments of 1986 are 
     repealed:
       (1) Part E of title XIII (20 U.S.C. 1221-1 note), relating 
     to a National Academy of Science study.
       (2) Part B of title XV (20 U.S.C. 4441 et seq.), relating 
     to Native Hawaiian culture and art development.
       (c) Education Amendments of 1992 Provisions.--The following 
     provisions of the Higher Education Amendments of 1992 are 
     repealed:
       (1) Part F of title XIII (25 U.S.C. 3351 et seq.), relating 
     to American Indian postsecondary economic development 
     scholarships.
       (2) Part G of title XIII (25 U.S.C. 3371), relating to 
     American Indian teacher training.
       (3) Section 1406 (20 U.S.C. 1221e-1 note), relating to a 
     national survey of factors associated with participation.
       (4) Section 1409 (20 U.S.C. 1132a note), relating to a 
     study of environmental hazards in institutions of higher 
     education.

[[Page 1402]]

       (5) Section 1412 (20 U.S.C. 1101 note), relating to a 
     national job bank for teacher recruitment.
       (6) Part B of title XV (20 U.S.C. 1452 note), relating to a 
     national clearinghouse for postsecondary education materials.
       (7) Part C of title XV (20 U.S.C. 1101 note), relating to 
     school-based decisionmakers.
       (8) Part D of title XV (20 U.S.C. 1145h note), relating to 
     grants for sexual offenses education.
       (9) Part E of title XV (20 U.S.C. 1070 note), relating to 
     Olympic scholarships.
       (10) Part G of title XV (20 U.S.C. 1070a-11 note), relating 
     to advanced placement fee payment programs.
       (d) Conforming Amendments.--the Higher Education Act of 
     1965 is amended--
       (1) in section 453(c)(2)--
       (A) by striking subparagraph (E); and
       (B) by redesignating subparagraphs (F) through (H) as 
     subparagraphs (E) through (G), respectively;
       (2) in section 487(a)(3), by striking subparagraph (B) and 
     redesignating subparagraphs (C) and (D) as subparagraphs (B) 
     and (C), respectively;
       (3) in section 487(a)(15), by striking ``the Secretary of 
     Veterans Affairs, and State review entities under subpart 1 
     of part H'' and inserting ``and the Secretary of Veterans 
     Affairs'';
       (4) in section 487(a)(21), by striking ``, State 
     postsecondary review entities,'';
       (5) in section 487(c)(1)(A)(i), by striking ``State 
     agencies, and the State review entities referred to in 
     subpart 1 of part H'' and inserting ``and State agencies'';
       (6) in section 487(c)(4), by striking ``, after 
     consultation with each State review entity designated under 
     subpart 1 of part H,'';
       (7) in section 487(c)(5), by striking ``State review 
     entities designated under subpart 1 of part H,'';
       (8) in section 496(a)(7), by striking ``and the appropriate 
     State postsecondary review entity'';
       (9) in section 496(a)(8), by striking ``and the State 
     postsecondary review entity of the State in which the 
     institution of higher education is located'';
       (10) in section 498(g)(2), by striking everything after the 
     first sentence;
       (11) in section 498A(a)(2)(D), by striking ``by the 
     appropriate State postsecondary review entity designated 
     under subpart 1 of this part or'';
       (12) in section 498A(a)(2)--
       (A) by inserting ``and'' after the semicolon at the end of 
     subparagraph (E);
       (B) by striking subparagraph (F); and
       (C) by redesignating subparagraph (G) as subparagraph (F); 
     and
       (13) in section 498A(a)(3)--
       (A) by inserting ``and'' after the semicolon at the end of 
     subparagraph (C);
       (B) by striking ``; and'' at the end of subparagraph (D) 
     and inserting a period; and
       (C) by striking subparagraph (E).

     SEC. 702. ELIGIBLE INSTITUTION.

       (a) Amendments.--Section 481(b) of the Higher Education Act 
     of 1965 (20 U.S.C. 1088(b)) is amended--
       (1) by inserting before the period at the end of the first 
     sentence the following: ``on the basis of a review by the 
     institution's independent auditor using generally accepted 
     accounting principles''; and
       (2) by inserting after the end of such first sentence the 
     following new sentences: ``For the purposes of clause (6), 
     revenues from sources that are not derived from funds 
     provided under this title include revenues from programs of 
     education or training that do not meet the definition of an 
     eligible program in subsection (e), but are provided on a 
     contractual basis under Federal, State, or local training 
     programs, or to business and industry. For the purposes of 
     determining whether an institution meets the requirements of 
     clause (6), the Secretary shall not consider the financial 
     information of any institution for a fiscal year began on or 
     before April 30, 1994.''.
       (b) Effective Date.--Notwithstanding section 713 of this 
     Act, the amendments made by subsection (a) shall apply to any 
     determination made on or after July 1, 1994, by the Secretary 
     of Education pursuant to section 481(b)(6) of the Higher 
     Education Act of 1965.

     SEC. 703. CARL D. PERKINS VOCATIONAL AND APPLIED TECHNOLOGY 
                   EDUCATION ACT.

       The Carl D. Perkins Vocational and Applied Technology 
     Education Act (20 U.S.C. 2301 et seq.) is repealed.

     SEC. 704. SMITH-HUGHES ACT.

       (a) Repeal.--The Smith-Hughes Act (39 Stat. 929 as amended 
     (20 U.S.C. 11-15, 16-28)) is repealed.
       (b) Effective Date.--Notwithstanding section 713 of this 
     Act, the repeal in subsection (a) of this section shall take 
     effect on October 1, 1995.

     SEC. 705. SCHOOL-TO-WORK OPPORTUNITIES ACT OF 1994.

        The School-to-Work Opportunities Act of 1994 (20 U.S.C. 
     6101 et seq.) is repealed.

     SEC. 706. SCHOOL DROPOUT ASSISTANCE ACT.

       The School Dropout Assistance Act, (part C of title V of 
     the Elementary and Secondary Education Act (20 U.S.C. 7261)) 
     is repealed.

     SEC. 707. ADULT EDUCATION ACT.

       (a) In General.--The Adult Education Act (20 U.S.C. 1201 et 
     seq.) is repealed.
       (b) Conforming Amendments.--
       (1) ESEA.--The Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 6301 et seq.) is amended--
       (A) in section 1202(c)(1), by striking ``the Adult 
     Education Act,'' and inserting ``title IV of the CAREERS 
     Act,'';
       (B) in section 1205(8)(B), by striking ``the Adult 
     Education Act,'' and inserting ``title IV of the CAREERS 
     Act,'';
       (C) in section 1206(a)(1)(A), by striking ``the Adult 
     Education Act;'' and inserting ``title IV of the CAREERS 
     Act;''; and
       (D) in section 9161(2), by striking ``section 312(2) of the 
     Adult Education Act.'' and inserting ``section 5 of the 
     CAREERS Act.''.
       (2) Technology for education act.--The Technology for 
     Education Act of 1994 (20 U.S.C. 6801 et seq.) is amended in 
     section 3113(1) by striking ``section 312 of the Adult 
     Education Act;'' and inserting ``section 5 of the CAREERS 
     Act;'';

     SEC. 708. NATIONAL LITERACY ACT.

       The National Literacy Act of 1991, except section 101 of 
     such Act, is repealed.

     SEC. 709. LIBRARY SERVICES AND CONSTRUCTION ACT.

       (a) In General.--The Library Services and Construction Act 
     (20 U.S.C. 351 et seq.) is repealed.
       (b) Conforming Amendment.--The Technology for Education Act 
     of 1994 (20 U.S.C. 6801 et seq.) is amended in section 
     3113(10) by striking ``section 3 of the Library Services and 
     Construction Act;'' and inserting ``section 5 of the CAREERS 
     Act;''.

     SEC. 710. TECHNOLOGY FOR EDUCATION ACT OF 1994.

       Part F of the Technology for Education Act of 1994 
     (contained in title III of the Elementary and Secondary 
     Education Act (20 U.S.C. 7001 et seq.)) is repealed.

     SEC. 711. JOB TRAINING PARTNERSHIP ACT.

       (a) In General.--The Job Training Partnership Act (29 
     U.S.C. 1501 et seq.), except section 1, sections 421 through 
     439 (relating to the Job Corps), and section 441 of such Act 
     (relating to veterans' employment programs), is hereby 
     repealed.
       (b) Conforming Amendments.--
       (1) Short title.--Section 1 of the Job Training Partnership 
     Act (29 U.S.C. 1501, note) is amended--
       (A) in the heading, by striking ``; table of contents''; 
     and
       (B) by striking all that follows after ``Job Training 
     Partnership Act''.
       (2) Job corps.--Such Act (29 U.S.C. 1501 et seq.), as 
     amended by this section, is further amended--
       (A) by redesignating sections 421 through 439 as sections 2 
     through 21, respectively;
       (B) in section 2 (as redesignated), by striking ``part'' 
     each place it appears and inserting ``Act'';
       (C) in section 4(4) (as redesignated), by striking 
     ``sections 424 and 425'' and inserting ``sections 5 and 6'';
       (D) in section 5 (as redesignated)--
       (i) in subsection (a), by striking ``entities administering 
     programs under title II of this Act,''; and
       (ii) in subsection (b), by striking ``part'' and inserting 
     ``Act'';
       (E) in section 7 (as redesignated)--
       (i) in subsection (a), by striking ``section 428'' and 
     inserting ``section 9''; and
       (ii) by striking subsection (d);
       (F) in section 8 (as redesignated)--
       (i) by striking subsection (b); and
       (ii) by redesignating subsection (c) as subsection (b);
       (G) in section 14 (as redesignated)--
       (i) in subsection (a)(4), by striking ``part'' and 
     inserting ``Act'';
       (ii) in subsection (c)(1), by striking ``and activities 
     authorized under sections 452 and 453''; and
       (iii) in subsection (e), by striking ``section 431'' and 
     inserting ``section 12'';
       (H) in section 15 (as redesignated)--
       (i) in subsection (a)--

       (I) in the matter preceding paragraph (1), by striking 
     ``section 427'' and inserting ``section 8''; and
       (II) in paragraph (4)(A), by striking ``section 428'' and 
     inserting ``section 9'';

       (ii) in subsection (c)(3), by striking ``section 423'' and 
     inserting ``section 4'';
       (iii) in subsection (d), by striking ``sections 424 and 
     425'' and inserting ``sections 5 and 6''; and
       (iv) in subsection (e), by striking ``, pursuant to section 
     452(d),'';
       (I) in section 17 (as redesignated), by striking ``purpose 
     of this part'' each place it appears and inserting ``purpose 
     of this Act'';
       (J) in section 20 (as redesignated), by striking ``part'' 
     each place it appears and inserting ``Act''; and
       (K) in section 21 (as redesignated), by striking ``part'' 
     and inserting ``Act''.
       (3) Veterans' employment programs.--Such Act (29 U.S.C. 
     1501 et seq.), as amended by this section, is further 
     amended--
       (A) by redesignating section 441 as section 22;
       (B) by striking the heading of such section 22 (as 
     redesignated), and inserting the following:

                 ``VETERANS' EMPLOYMENT PROGRAMS''; and

       (C) in such section 22, by striking ``part'' each place it 
     appears and inserting ``section''.
       (4) Authorization of appropriations.--Such Act (29 U.S.C. 
     1501 et seq.), as amended by this section, is further amended 
     by adding at the end the following new section:

                   ``AUTHORIZATION OF APPROPRIATIONS

       ``Sec. 23. There are authorized to be appropriated such 
     sums as are necessary to carry out this Act.''.

     SEC. 712. STEWART B. MCKINNEY HOMELESS ASSISTANCE ACT.

       (a) Adult Education.--

[[Page 1403]]

       (1) In general.--Subtitle A of title VII of the Stewart B. 
     McKinney Homeless Assistance Act (42 U.S.C. 11421 et seq.) is 
     repealed.
       (2) Table of contents.--The table of contents of such Act 
     is amended by striking the items relating to subtitle A of 
     title VII of such Act.
       (b) Subtitle C.--
       (1) In general.--Subtitle C of title VII of the Stewart B. 
     McKinney Homeless Assistance Act (42 U.S.C. 11441 et seq.), 
     except section 738, is hereby repealed.
       (2) Table of contents.--The table of contents of such Act 
     is amended--
       (A) by striking the item relating to subtitle C of title 
     VII of such Act; and
       (B) by striking the items relating to sections 731 through 
     737 and sections 739 through 741.

     SEC. 713. EFFECTIVE DATE.

       The repeals and amendments made by this Act shall take 
     effect on July 1, 1997, except for amendments to the 
     Rehabilitation Act of 1973.

  The bill, as amended, was ordered to be engrossed and read a third 
time, was read a third time by title.
  The question being put, viva voce,
  Will the House pass said bill?
  The SPEAKER pro tempore, Mr. GILLMOR, announced that the yeas had it.
  Mr. RIGGS demanded a recorded vote on passage of said bill, which 
demand was supported by one-fifth of a quorum, so a recorded vote was 
ordered.
  The vote was taken by electronic device.

It was decided in the

Yeas

345

affirmative

Nays

79
```