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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1020 Introduced in Senate (IS)]

105th CONGRESS
  1st Session
                                S. 1020

To amend the National Foundation on the Arts and Humanities Act of 1965 
and the Art and Artifacts Indemnity Act to improve and extend the Acts, 
                        and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 15, 1997

Mr. Jeffords (for himself, Mr. Kennedy, and Mr. Chafee) introduced the 
 following bill; which was read twice and referred to the Committee on 
                       Labor and Human Resources

_______________________________________________________________________

                                 A BILL

 
To amend the National Foundation on the Arts and Humanities Act of 1965 
and the Art and Artifacts Indemnity Act to improve and extend the Acts, 
                        and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Arts and Humanities Amendments of 
1997''.

TITLE I--NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES ACT OF 1965

SEC. 101. NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES.

    The National Foundation on the Arts and the Humanities Act of 1965 
(20 U.S.C. 951 et seq.) is amended to read as follows:

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

    ``(a) Short Title.--This Act may be cited as the `National 
Foundation on the Arts and the Humanities Act of 1965'.
    ``(b) Table of Contents.--The table of contents is as follows:

        ``Sec. 1. Short title; table of contents.
        ``Sec. 2. Purposes.
        ``Sec. 3. Definitions.
     ``TITLE I--NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES

        ``Sec. 101. Establishment of the National Foundation on the 
                            Arts and the Humanities.
        ``Sec. 102. General limitations on grants.
        ``Sec. 103. Joint administration.
        ``Sec. 104. Study on a true endowment.
        ``Sec. 105. Donations, bequests, and devises.
        ``Sec. 106. Authorization of appropriations.
              ``TITLE II--NATIONAL ENDOWMENT FOR THE ARTS

        ``Sec. 201. Definitions.
        ``Sec. 202. Establishment of the National Endowment for the 
                            Arts.
        ``Sec. 203. Application procedures.
        ``Sec. 204. Advisory panels.
        ``Sec. 205. National Council on the Arts.
        ``Sec. 206. Limitations on grants.
        ``Sec. 207. Administrative provisions.
        ``Sec. 208. Reports.
        ``Sec. 209. Sanctions and payments.
        ``Sec. 210. National Medal of Arts Awards.
           ``TITLE III--NATIONAL ENDOWMENT FOR THE HUMANITIES

        ``Sec. 301. Definitions.
        ``Sec. 302. Establishment of the National Endowment for the 
                            Humanities.
        ``Sec. 303. Application procedures.
        ``Sec. 304. Review panels.
        ``Sec. 305. National Council on the Humanities.
        ``Sec. 306. Limitations on grants.
        ``Sec. 307. Administrative provisions.
        ``Sec. 308. Reports.
        ``Sec. 309. Sanctions and payments.
        ``Sec. 310. Awards.

``SEC. 2. PURPOSES.

    ``The purposes of this Act are--
            ``(1)(A) to ensure that the arts and the humanities belong 
        to all the people of the United States; and
            ``(B) to support the arts and the humanities, which are 
        essential to social, cultural, and economic progress;
            ``(2) to encourage and support national progress and 
        scholarship in the arts and the humanities, because such 
        encouragement and support, while primarily matters for private 
        and local initiative, are also appropriate matters of concern 
        for the Federal Government;
            ``(3) to ensure that the United States, as an advanced 
        civilization, does not limit its efforts to science and 
        technology alone but gives full value and support to the other 
        great branches of scholarly and cultural activity in order to 
        achieve a better understanding of the past, a better analysis 
        of the present, and a better view of the future;
            ``(4) to further the advancement of the arts and the 
        humanities and the access of all citizens of the United States 
        to the arts and the humanities, in partnership with local, 
        State, regional, and private agencies, organizations, and 
        individuals;
            ``(5) in furthering the advancement and access described in 
        paragraph (4), to be sensitive to the nature of public support 
        and the need to use public funding in a manner that recognizes 
        the responsibility of the Federal Government to the public 
        good;
            ``(6) to ensure that public funds provided by the Federal 
        Government ultimately serve the public purposes the Congress 
        defines and are subject to the conditions that traditionally 
        govern the use of public money;
            ``(7) to ensure that--
                    ``(A) Federal support of the arts and the 
                humanities reflects the high place accorded by the 
                people of the United States to the Nation's rich 
                cultural heritage; and
                    ``(B) public funding of the arts and the humanities 
                contributes to public support for and confidence in the 
                use of taxpayer funds;
            ``(8)(A) to support the practice of art and the study of 
        the humanities, which require constant dedication and devotion; 
        and
            ``(B) while recognizing that no government can create a 
        great artist or scholar, to help create and sustain not only a 
        climate encouraging freedom of thought, imagination, and 
        inquiry, but also the material conditions facilitating the 
        release of creative talent; and
            ``(9)(A) to ensure that United States students receive in 
        school, background and preparation in the arts and the 
        humanities to enable the students to recognize and appreciate 
        the aesthetic dimensions of their lives, the cultural heritage 
        of the United States, and the full potential of artistic and 
        scholarly expression; and
            ``(B) to increase access to the arts and the humanities for 
        all persons in the United States by--
                    ``(i) encouraging and developing quality education 
                in the arts and the humanities at all levels, in 
                conjunction with programs of lifelong learning in the 
                arts and the humanities for all age groups and with 
                formal systems of elementary, secondary, and 
                postsecondary education; and
                    ``(ii) encouraging and facilitating the work of 
                scholars, artists, arts institutions, and Federal, 
                State, regional, and local agencies in the area of 
                education in the arts and the humanities.

``SEC. 3. DEFINITIONS.

    ``In this Act:
            ``(1) Arts.--The term `arts' includes--
                    ``(A) dance, design, literature, media arts, music, 
                theater, and visual arts;
                    ``(B) folk and traditional arts practiced by the 
                diverse peoples of the United States; and
                    ``(C) the presentation, performance, execution, 
                exhibition, preservation, and study of the arts 
                described in subparagraph (A) or (B), including the 
                study of the arts through apprenticeships, internships, 
                and other career oriented work-study experiences for 
                artists and art teachers, and residencies for artists 
                at all educational levels.
            ``(2) Cultural heritage.--The term `cultural heritage' 
        means the living legacy of creations, skills, and knowledge 
        handed down from prior generations--
                    ``(A) that embraces the traditional arts and ideas 
                that are developed informally and that reflect the 
                heritage, tradition, and history of American 
                communities over the centuries; and
                    ``(B) that continues to evolve as new groups 
                contribute to the American experience.
            ``(3) Grant.--The term `grant' includes a loan, a contract, 
        and a cooperative agreement.
            ``(4) Group.--The term `group' includes any State or local 
        arts agency, regional group, and any nonprofit organization or 
        institution in the United States, whether or not incorporated.
            ``(5) Humanities.--The term `humanities' includes--
                    ``(A) the study and interpretation of--
                            ``(i) language, both modern and classical, 
                        linguistics, literature, history, 
                        jurisprudence, philosophy, archaeology, 
                        comparative religion, and ethics;
                            ``(ii) the history, criticism, and theory 
                        of the arts;
                            ``(iii) folklore and folklife; and
                            ``(iv) the aspects of the social sciences 
                        that have humanistic content and employ 
                        humanistic methods; and
                    ``(B) the study and application of the humanities 
                described in subparagraph (A) to the human environment 
                with particular attention to--
                            ``(i) reflecting the heritage, traditions, 
                        and history of the United States; and
                            ``(ii) the relevance of the humanities 
                        described in subparagraph (A) to the conditions 
                        of national life.
            ``(6) Program income.--
                    ``(A) In general.--The term `program income' means 
                any money that is earned or received, by a recipient of 
                a grant made under title II or III, from an activity 
                supported by the funds made available through the grant 
                or from a product resulting from or related to an 
                activity carried out under the grant.
                    ``(B) Types of income.--The term includes--
                            ``(i) income from a fee for service 
                        performed, or from the sale of an item created, 
                        under the grant;
                            ``(ii) income from a licensing fee on a 
                        product related to an activity carried out 
                        under the grant;
                            ``(iii) a usage or rental fee for equipment 
                        or property acquired under the grant;
                            ``(iv) an admission fee for an activity 
                        carried out under the grant;
                            ``(v) income from a broadcast or 
                        distribution right for such an activity; and
                            ``(vi) a royalty on a patent or copyright 
                        for such an activity.
            ``(7) Regional group.--The term `regional group' means any 
        multistate group, whether or not representative of contiguous 
        States.
            ``(8) State.--The term `State' includes, in addition to the 
        several States of the United States, the Commonwealth of Puerto 
        Rico, the District of Columbia, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and the United 
        States Virgin Islands.
            ``(9) Underserved communities.--The term `underserved 
        communities' means those communities that have historically 
        been outside the purview of arts and humanities programs.

     ``TITLE I--NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES

``SEC. 101. ESTABLISHMENT OF THE NATIONAL FOUNDATION ON THE ARTS AND 
              THE HUMANITIES.

    ``(a) Establishment.--There is established a National Foundation on 
the Arts and the Humanities (referred to in this Act as the 
`Foundation'), which shall be composed of a National Endowment for the 
Arts, a National Endowment for the Humanities (each of which may be 
referred to in this title as an `Endowment'), and an Institute of 
Museum and Library Services.
    ``(b) Purpose.--The purpose of the Foundation shall be to develop 
and promote a national policy of support for the arts and the 
humanities in the United States.
    ``(c) Limitation.--In the administration of this Act no department, 
agency, officer, or employee of the United States shall exercise any 
direction, supervision, or control over the policy determination, 
personnel, curriculum, administration, or operation, of any school or 
other non-Federal agency, institution, organization, or association.

``SEC. 102. GENERAL LIMITATIONS ON GRANTS.

    ``None of the grants awarded under this Act shall be used for the 
purposes of lobbying or for providing general membership services for 
groups.

``SEC. 103. JOINT ADMINISTRATION.

    ``(a) Inspector General.--There shall be in the Foundation a single 
Office of the Inspector General for the National Endowment for the Arts 
and the National Endowment for the Humanities. The Office shall be 
headed by 1 Inspector General appointed in accordance with the 
Inspector General Act of 1978 (5 U.S.C. App.). The Inspector General 
shall carry out the duties prescribed in such Act, including conducting 
appropriate reviews to ensure that recipients of grants under titles II 
and III comply with the applicable regulations and procedures 
established under this Act, including regulations relating to 
accounting and financial matters.
    ``(b) Reporting.--The Inspector General for the National Endowment 
for the Arts and the National Endowment for the Humanities shall 
report--
            ``(1) to the Chairperson of the National Endowment for the 
        Arts with respect to matters relating to the National Endowment 
        for the Arts; and
            ``(2) to the Chairperson of the National Endowment for the 
        Humanities with respect to matters relating to the National 
        Endowment for the Humanities.
    ``(c) Other Functions.--The Chairperson of the National Endowment 
for the Arts and Chairperson of the National Endowment for the 
Humanities shall ensure nonduplication of administrative functions, 
such as provision of facilities and space, records management, 
contracting, procurement, printing, and provision of mail and library 
services. The Chairpersons shall enter into an interagency agreement to 
jointly carry out the functions with the minimum necessary expense.
    ``(d) Report.--Not later than 60 days after the date of enactment 
of the Arts and Humanities Amendments of 1997, the Chairperson of the 
National Endowment for the Arts and the Chairperson of the National 
Endowment for the Humanities shall jointly prepare and submit to the 
appropriate committees of Congress a report containing a plan that 
describes the manner in which the Chairpersons will jointly carry out 
the functions described in subsection (c). Not later than 180 days 
after such date of enactment, the Chairpersons shall implement the 
plan.

``SEC. 104. STUDY ON A TRUE ENDOWMENT.

    ``(a) In General.--The Chairperson of the National Endowment for 
the Arts and the Chairperson of the National Endowment for the 
Humanities, in consultation with persons with expertise in the arts, 
humanities, business, charitable giving, and copyright industries, and 
other appropriate Federal agencies, shall jointly conduct, or contract 
for, a study on the feasibility of establishing a true endowment for 
the National Endowment for the Arts and the National Endowment for the 
Humanities in order to provide supplemental funding to support the 
efforts of the National Endowment for the Arts and the National 
Endowment for the Humanities, respectively.
    ``(b) Scope of Study.--The study described in subsection (a) shall 
examine innovative methods through which a true endowment may be 
funded, including such methods as private fundraising, an extension of 
a copyright term, recapture of funds from past grants of the National 
Endowment for the Arts and the National Endowment for the Humanities 
that have proven profitable, or any other innovative methods the 
Chairpersons determine appropriate.
    ``(c) Report.--Not later than 1 year after the date on which 
funding is made available under this Act to conduct the study described 
in subsection (a), the Chairperson of the National Endowment for the 
Arts and the Chairperson of the National Endowment for the Humanities 
shall jointly prepare and submit to the appropriate committees of 
Congress a report containing recommendations on the innovative methods 
through which the true endowment may be funded to support efforts 
described in subsection (a).

``SEC. 105. DONATIONS, BEQUESTS, AND DEVISES.

    ``(a) Donations, Bequests, and Devises to the Foundation Without 
Designation.--
            ``(1) In general.--In any case in which any money or other 
        property is donated, bequeathed, or devised to the Foundation 
        without designation of the Endowment for the benefit of which 
        the money or property is intended, each Chairperson of an 
        Endowment shall have authority to receive such money or 
        property.
            ``(2) Unrestricted donations, bequests, and devises.--
        Except as provided in paragraph (3), unless the Chairpersons of 
        the Endowments agree otherwise, the money or property described 
        in paragraph (1) shall be deemed to have been donated, 
        bequeathed, or devised in equal shares to each Endowment.
            ``(3) Restricted donations, bequests, and devises.--In any 
        case in which any money or property is donated, bequeathed, or 
        devised to the Foundation with a condition or restriction, such 
        money or property shall be deemed to have been donated, 
        bequeathed, or devised to the Endowment whose function it is to 
        carry out the purposes of the condition or restriction.
    ``(b) Donations, Bequests, and Devises to the Endowments.--
            ``(1) Chairperson of the national endowments for the 
        arts.--
                    ``(A) In general.--The Chairperson of the National 
                Endowment for the Arts (referred to in this paragraph 
                as the `Chairperson'), in carrying the functions of the 
                Chairperson, shall have authority--
                            ``(i) to solicit, accept, receive, invest, 
                        and use money and other property donated, 
                        bequeathed, or devised to the Endowment, either 
                        absolutely or in trust, with or without a 
                        condition or restriction, including a condition 
                        that the Chairperson use other funds of the 
                        Endowment for the purposes of the donation, 
                        bequest, or devise; and
                            ``(ii) to sell or otherwise dispose of such 
                        property,
                to carry out the activities of the Endowment under 
                title II.
                    ``(B) Proceeds.--
                            ``(i) Receipt of proceeds.--Any proceeds 
                        from a donation, bequest, or devise under 
                        subparagraph (A) shall be paid by the donor or 
                        the representative of the donor to the 
                        Chairperson. Any proceeds from any sale or 
                        disposition of property under subparagraph (A) 
                        shall be retained by the Chairperson.
                            ``(ii) Investment of proceeds.--The 
                        Chairperson shall invest the proceeds described 
                        in clause (i) that are not required to carry 
                        out subsection (c) and section 210. Such 
                        investments shall be made only in interest-
                        bearing accounts to the credit of the National 
                        Endowment for the Arts, of which only 50 
                        percent of the accumulated interest may be used 
                        for the purposes of carrying out the activities 
                        of the Endowment under title II.
                    ``(C) Notwithstanding subparagraphs (A) and 
                (B)(ii), any money and other property donated, 
                bequeathed, or devised under subparagraph (A)(i) with a 
                condition or restriction shall be used, expended, or 
                invested subject to such condition or restriction.
            ``(2) Chairperson of the national endowments for the 
        humanities.--
                    ``(A) In general.--The Chairperson of the National 
                Endowment for the Humanities (referred to in this 
                paragraph as the `Chairperson'), in carrying the 
                functions of the Chairperson, shall have authority--
                            ``(i) to solicit, accept, receive, invest, 
                        and use money and other property donated, 
                        bequeathed, or devised to the Endowment, either 
                        absolutely or in trust, with or without a 
                        condition or restriction, including a condition 
                        that the Chairperson use other funds of the 
                        Endowment for the purposes of the donation, 
                        bequest, or devise; and
                            ``(ii) to sell or otherwise dispose of such 
                        property,
                for purposes of carrying out the activities of the 
                Endowment under title III.
                    ``(B) Proceeds.--
                            ``(i) Receipt of proceeds.--Any proceeds 
                        from a donation, bequest, or devise under 
                        subparagraph (A) shall be paid by the donor or 
                        the representative of the donor to the 
                        Chairperson. Any proceeds from any sale or 
                        disposition of property under subparagraph (A) 
                        shall be retained by the Chairperson.
                            ``(ii) Investment of proceeds.--The 
                        Chairperson shall invest the proceeds described 
                        in clause (i) that are not required to carry 
                        out subsection (c) and section 310(a). Such 
                        investments shall be made only in interest-
                        bearing accounts to the credit of the National 
                        Endowment for the Humanities, of which only 50 
                        percent of the accumulated interest may be used 
                        for the purposes of carrying out the activities 
                        of the Endowment under title III.
                    ``(C) Notwithstanding subparagraphs (A) and 
                (B)(ii), any money and other property donated, 
                bequeathed, or devised under subparagraph (A)(i) with a 
                condition or restriction shall be used, expended, or 
                invested subject to such condition or restriction.
    ``(c) Use of Donations, Bequests, and Devises for Certain 
Administrative Expenses.--
            ``(1) In general.--The Chairperson of the National 
        Endowment for the Arts and the Chairperson of the National 
        Endowment for the Humanities shall each use from the amounts 
        received under subsection (b)--
                    ``(A) not more than $100,000 for fiscal year 1998 
                for official reception and representation expenses; and
                    ``(B) not more than $50,000 for each subsequent 
                fiscal year for such expenses.
            ``(2) Exception.--The requirement of paragraph (1) shall 
        not apply to expenses associated with the award established 
        under section 310(a).
    ``(d) Tax Laws.--For the purposes of the income tax, gift tax, and 
estate tax laws of the United States, any money or other property 
donated, bequeathed, or devised to the Foundation or one of the 
Endowments and received by the Chairperson of an Endowment pursuant to 
this section shall be deemed to have been donated, bequeathed, or 
devised to or for the use of the United States.

``SEC. 106. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) National Endowment for the Arts.--
            ``(1) In general.--
                    ``(A) Total authorization.--There are authorized to 
                be appropriated to carry out the activities of the 
                National Endowment for the Arts under this Act 
                $175,000,000 for fiscal year 1998, and such sums as are 
                necessary for the fiscal years 1999 through 2002.
                    ``(B) Reservation for administration.--Of the 
                amount appropriated for a fiscal year under 
                subparagraph (A), there shall be reserved amounts 
                sufficient to carry out subsection (c)(1).
                    ``(C) Special reservation for arts education and 
                underserved communities grants.--In a fiscal year in 
                which the aggregate amount appropriated under 
                subparagraph (A) exceeds $99,494,000, the amount that 
                exceeds such aggregate amount shall be reserved for 
                making grants under section 202(f) to carry out 
                activities described in subsection (f)(2)(B) of such 
                section.
                    ``(D) Reservation for partnership grants.--40 
                percent of the amount appropriated for a fiscal year 
                under subparagraph (A) and remaining after amounts are 
                reserved under subparagraphs (B) and (C) shall be 
                reserved for making grants under section 202(c).
                    ``(E) Reservation for national significance 
                grants.--40 percent of the amount appropriated for a 
                fiscal year under subparagraph (A) and remaining after 
                amounts are reserved under subparagraphs (B) and (C) 
                shall be reserved for making grants under section 
                202(d).
                    ``(F) Reservation for direct grants.--10 percent of 
                the amount appropriated for a fiscal year under 
                subparagraph (A) and remaining after amounts are 
                reserved under subparagraphs (B) and (C) shall be 
                reserved for making grants under section 202(e).
                    ``(G) Reservation for arts education and 
                underserved communities grants.--10 percent of the 
                amount appropriated for a fiscal year under 
                subparagraph (A) and remaining after amounts are 
                reserved under subparagraphs (B) and (C) shall be 
                reserved for making grants under section 202(f).
            ``(2) Sums remaining available.--Sums appropriated pursuant 
        to paragraph (1) for any fiscal year shall remain available for 
        obligation until expended.
    ``(b) National Endowment for the Humanities.--
            ``(1) In general.--
                    ``(A) Total authorization.--There are authorized to 
                be appropriated to carry out the activities of the 
                National Endowment for the Humanities under this Act 
                $175,000,000 for fiscal year 1998, and such sums as are 
                necessary for fiscal years 1999 through 2002.
                    ``(B) Reservation for administration.--There shall 
                be reserved amounts sufficient to carry out subsection 
                (c)(2).
                    ``(C) Reservation for partnership grants.--30 
                percent of the amount appropriated for a fiscal year 
                under subparagraph (A) and remaining after amounts are 
                reserved under subparagraph (B) shall be reserved for 
                making grants under section 302(c). Of the amount 
                reserved under this subparagraph, 5 percent of such 
                amount shall be made available for activities relating 
                to elementary and secondary education in the 
                humanities.
                    ``(D) Reservation for national grants.--35 percent 
                of the amount appropriated for a fiscal year under 
                subparagraph (A) and remaining after amounts are 
                reserved under subparagraph (B) shall be reserved for 
                making grants under section 302(d).
                    ``(E) Reservation for research and scholarship 
                grants.--35 percent of the amount appropriated for a 
                fiscal year under subparagraph (A) and remaining after 
                amounts are reserved under subparagraph (B) shall be 
                reserved for making grants under section 302(e).
            ``(2) Sums remaining available.--Sums appropriated pursuant 
        to paragraph (1) for any fiscal year shall remain available for 
        obligation until expended.
    ``(c) Administration.--
            ``(1) National endowment for the arts.--
                    ``(A) Percentage based on funding under 
                $150,000,000.--In a case in which the amount 
                appropriated for a fiscal year under subsection 
                (a)(1)(A) is less than $150,000,000, not more than 17 
                percent of the amount appropriated for a fiscal year 
                under subsection (a)(1)(A) may be made available for 
                the costs of administering title II, or any other 
                program for which the Chairperson of the National 
                Endowment for the Arts is responsible, of which not 
                more than $100,000 shall be made available for the 
                President's Committee on the Arts and the Humanities, 
                none of which may be used to reimburse members of the 
                Committee for travel and related expenses.
                    ``(B) Percentage based on funding over 
                $150,000,000.--In a case in which the amount 
                appropriated for a fiscal year under subsection 
                (a)(1)(A) is $150,000,000 or greater, not more than 12 
                percent of the amount appropriated for a fiscal year 
                under subsection (a)(1)(A) may be made available for 
                the costs of administering title II, or any other 
                program for which the Chairperson of the National 
                Endowment for the Arts is responsible, of which not 
                more than $100,000 shall be made available for the 
                President's Committee on the Arts and the Humanities, 
                none of which may be used to reimburse members of the 
                Committee for travel and related expenses.
            ``(2) National endowment for the humanities.--
                    ``(A) Percentage based on funding under 
                $150,000,000.--In a case in which the amount 
                appropriated for a fiscal year under subsection 
                (b)(1)(A) is less than $150,000,000, not more than 17 
                percent of the amount appropriated for a fiscal year 
                under subsection (b)(1)(A) may be made available for 
                the costs of administering title III, or any other 
                program for which the Chairperson of the National 
                Endowment for the Humanities is responsible, of which 
                not more than $100,000 shall be made available for the 
                President's Committee on the Arts and the Humanities, 
                none of which may be used to reimburse members of the 
                Committee for travel and related expenses.
                    ``(B) Percentage based on funding over 
                $150,000,000.--In a case in which the amount 
                appropriated for a fiscal year under subsection 
                (b)(1)(A) is $150,000,000 or greater, not more than 12 
                percent of such amount may be made available for the 
                costs of administering title III, or any other program 
                for which the Chairperson of the National Endowment for 
                the Humanities is responsible, of which not more than 
                $100,000 shall be made available for the President's 
                Committee on the Arts and the Humanities, none of which 
                may be used to reimburse members of the Committee for 
                travel and related expenses.

              ``TITLE II--NATIONAL ENDOWMENT FOR THE ARTS

``SEC. 201. DEFINITIONS.

    ``In this title:
            ``(1) Developing arts organization.--The term `developing 
        arts organization' means a local arts organization of high 
        artistic promise that--
                    ``(A) serves as an important source of local arts 
                programming in a community; and
                    ``(B) has the potential to broaden public access to 
                the arts in rural and urban underserved communities.
            ``(2) Final judgment.--The term `final judgment' means a 
        judgment that is either--
                    ``(A) not reviewed by any other court that has 
                authority to review such judgment; or
                    ``(B) is not reviewable by any other court.
            ``(3) Local arts agency.--The term `local arts agency' 
        means a community organization, or an agency of local 
        government, that primarily provides financial support, 
        services, or other programs for artists and arts organizations, 
        for the benefit of the community as a whole.
            ``(4) Obscene; determined to be obscene.--
                    ``(A) Obscene.--The term `obscene' means, with 
                respect to a project, production, or workshop, that--
                            ``(i) the average person, applying 
                        contemporary community standards, would find 
                        that such project, production, or workshop, 
                        when taken as a whole, appeals to the prurient 
                        interest;
                            ``(ii) such project, production, or 
                        workshop depicts or describes sexual conduct in 
                        a patently offensive way; and
                            ``(iii) such project, production, or 
                        workshop, when taken as a whole, lacks serious 
                        literary, artistic, political or scientific 
                        value.
                    ``(B) Determined to be obscene.--The term 
                `determined to be obscene' means determined, in a final 
                judgment of a court of record and of competent 
                jurisdiction in the United States, to be obscene.
            ``(5) Production.--The term `production' means any activity 
        involving the execution or rendition of the arts and meeting 
        such standards as may be approved by the Chairperson of the 
        Endowment.
            ``(6) Project.--
                    ``(A) In general.--The term `project' means a 
                program organized to carry out the objectives of this 
                Act, including a program to foster United States 
                artistic creativity, to commission a work of art, or to 
                develop and enhance the widest public access, 
                knowledge, and understanding of the arts, and includes, 
                where appropriate, rental or purchase of a facility, 
                rental or purchase of land, and acquisition of 
                equipment.
                    ``(B) Renovation or construction.--Such term also 
                includes--
                            ``(i) the renovation of a facility if--
                                    ``(I) the amount of the expenditure 
                                of Federal funds for such purpose in 
                                the case of any facility does not 
                                exceed $250,000; and
                                    ``(II) two-thirds of the members of 
                                the National Council on the Arts (who 
                                are present and voting) recommend a 
                                grant involving an expenditure for such 
                                purpose; and
                            ``(ii) with respect to a grant under 
                        section 202(d), the construction of a facility, 
                        if--
                                    ``(I) such construction is for 
                                demonstration purposes or under unusual 
                                circumstances in which there is no 
                                other manner by which to accomplish an 
                                artistic purpose; and
                                    ``(II) two-thirds of the members of 
                                the National Council on the Arts (who 
                                are present and voting) recommend a 
                                grant involving an expenditure for such 
                                purpose.
            ``(7) Workshop.--The term `workshop' means a program the 
        primary purpose of which is to encourage the artistic 
        development or enjoyment of amateur, student, or other 
        participants.

``SEC. 202. ESTABLISHMENT OF THE NATIONAL ENDOWMENT FOR THE ARTS.

    ``(a) Establishment.--There is established within the Foundation a 
National Endowment for the Arts (referred to in this title as the 
`Endowment').
    ``(b) Chairperson.--
            ``(1) Appointment.--The Endowment shall be headed by a 
        chairperson, to be known as the Chairperson of the Endowment 
        (referred to in this title as the `Chairperson'), who shall be 
        appointed by the President, by and with the advice and consent 
        of the Senate.
            ``(2) Term.--
                    ``(A) In general.--The term of office of the 
                Chairperson shall be 4 years, except that any 
                Chairperson appointed to fill a vacancy shall serve for 
                the remainder of the term for which the predecessor of 
                the Chairperson was appointed. Notwithstanding any 
                other provision of this subparagraph, on the expiration 
                of the term of office of the Chairperson, the 
                Chairperson shall serve until the successor to the 
                Chairperson is appointed and has qualified.
                    ``(B) Reappointment.--The Chairperson shall be 
                eligible for reappointment.
    ``(c) Partnership Grants.--
            ``(1) Purpose.--The purpose of this subsection is to make 
        grants to States and regional groups to support arts 
        activities, with preference to arts education and projects that 
        reach rural and urban underserved communities.
            ``(2) Grants to states.--
                    ``(A) Authority.--Using the funds reserved under 
                section 106(a)(1)(D), the Chairperson, acting on the 
                recommendation of the National Council on the Arts, 
                shall establish and carry out a program of basic State 
                grants to assist States--
                            ``(i)(I) in supporting projects, 
                        productions, or workshops that meet the 
                        standard of artistic excellence and artistic 
                        merit and that fulfill the purposes of this 
                        Act; and
                            ``(II) in developing projects, productions, 
                        or workshops that will furnish programs, 
                        facilities, and services in the arts to people 
                        and communities in each of the States; and
                            ``(ii) in carrying out activities that--
                                    ``(I) stimulate artistic activity 
                                and awareness, and broaden public 
                                access to the arts, in rural and urban 
                                underserved communities;
                                    ``(II) enhance the artistic 
                                capabilities of developing arts 
                                organizations through artistic, 
                                programmatic, and staff development; or
                                    ``(III) provide technical 
                                assistance to developing arts 
                                organizations to improve managerial and 
                                organizational skills, financial 
                                systems management, and long-range 
                                fiscal planning.
                    ``(B) Application.--In order to receive a grant 
                under this paragraph for any fiscal year, a State shall 
                submit an application described in section 203 for such 
                grant at such time and in such manner as shall be 
                specified by the Chairperson and accompany such 
                application with a State plan that the Chairperson 
                finds--
                            ``(i) designates or provides for the 
                        establishment of a State agency (referred to in 
                        this section as the `State agency') as the sole 
                        agency for the administration of the State 
                        plan;
                            ``(ii) provides that funds paid to the 
                        State under this paragraph will be expended 
                        solely on projects, productions, or workshops 
                        described in subparagraph (A) and approved by 
                        the State agency;
                            ``(iii) provides that the State agency will 
                        make such reports, in such manner and 
                        containing such information, as the Chairperson 
                        may from time to time require, including a 
                        description of the progress made toward 
                        achieving the objectives of the State plan;
                            ``(iv) provides--
                                    ``(I) an assurance that the State 
                                agency has held, after reasonable 
                                notice, public meetings in the State to 
                                allow the public, interested groups, 
                                and groups of artists to present views 
                                and make recommendations regarding the 
                                State plan; and
                                    ``(II) a summary of such 
                                recommendations and the response of the 
                                State agency to such recommendations; 
                                and
                            ``(v) contains--
                                    ``(I) for the most recent preceding 
                                year for which information is 
                                available, a description of the level 
                                of participation by artists, artists' 
                                organizations, and arts groups in 
                                projects, productions, or workshops 
                                supported by funding from the State 
agency under this paragraph, and a description of the extent to which 
projects, productions, or workshops supported by funding from the State 
agency under this paragraph were available to all people and 
communities in the State, especially underserved communities; and
                                    ``(II) a description of projects, 
                                productions, or workshops supported by 
                                funding from the State agency under 
                                this paragraph that exist or are being 
                                developed to address the availability 
                                of the arts to all people or 
                                communities described in subclause (I) 
                                or to secure wider participation of 
                                artists and arts organizations 
                                described in subclause (I).
                    ``(C) Approval.--The Chairperson may not approve an 
                application described in subparagraph (B) unless the 
                accompanying State plan satisfies the requirements 
                specified in subparagraph (B).
                    ``(D) Allotments.--
                            ``(i) In general.--Of the sums available to 
                        carry out this paragraph for any fiscal year, 
                        each State that has an application approved by 
                        the Chairperson shall be allotted at least 
                        $200,000.
                            ``(ii) Insufficient funds.--If the sums 
                        available to carry out this paragraph for any 
                        fiscal year are insufficient to make the 
                        allotments under clause (i) in full, such sums 
                        shall be allotted so that each such State 
                        receives an equal amount.
                            ``(iii) Excess funds.--In any case in which 
                        the sums available to carry out this paragraph 
                        for any fiscal year are in excess of the amount 
                        required to make the allotments under clause 
                        (i)--
                                    ``(I) the amount of such excess 
                                that is not greater than 25 percent of 
                                the sums available to carry out this 
                                paragraph for such fiscal year shall be 
                                available to the Chairperson for making 
                                grants under this paragraph to States 
                                and, in accordance with subparagraph 
                                (H), regional groups; and
                                    ``(II) the amount of such excess 
                                for such fiscal year, if any, that 
                                remains after reserving in full for the 
                                Chairperson the amount required under 
                                subclause (I) shall be allotted so that 
                                each State that has an application 
                                approved by the Chair receives an equal 
                                amount;
                        but in no event shall any State be allotted 
                        less than $200,000 under this paragraph.
                    ``(E) Federal share.--
                            ``(i) In general.--Funding provided through 
                        a grant made under this paragraph to a State 
                        for any fiscal year shall be available to each 
                        State that has an application approved by the 
                        Chairperson, and has the State plan 
                        accompanying the application in effect on the 
                        first day of such fiscal year, to pay not more 
                        than 50 percent of the total cost of carrying 
                        out any activity described in subparagraph (A).
                            ``(ii) Excess portion.--Except as provided 
                        in clause (iii), the portion of the funding 
                        provided through any grant made under 
                        subparagraph (D)(i) to a State for any fiscal 
                        year that exceeds $125,000 shall be available, 
                        at the discretion of the Chairperson, to pay 
                        not more than 100 percent of such cost of 
                        carrying out an activity under this paragraph 
                        if such activity would be unavailable to the 
                        residents of the State without such portion.
                            ``(iii) Percentage of grant funds.--The 
                        portion of the funding described in clause (ii) 
                        for any fiscal year that is available to pay 
                        not more than 100 percent of such cost, as 
                        described in clause (ii), shall not exceed 20 
                        percent of the total funding provided through 
                        such grant for such fiscal year.
                    ``(F) Prohibition on supplanting non-federal 
                funds.--Funds made available under this paragraph shall 
                be used to supplement, and shall not supplant, non-
                Federal funds expended for supporting activities 
                described in subparagraph (A).
                    ``(G) Unobligated funds.--Any amount allotted to a 
                State under subparagraph (D)(i) for any fiscal year 
                that is not obligated by the State earlier than 60 days 
                prior to the end of the fiscal year for which the 
                amount is appropriated shall be available for making 
                grants to regional groups.
                    ``(H) Special rule.--The provisions of this 
                paragraph (other than subparagraph (D)) shall apply to 
                regional groups receiving grants under this paragraph 
                in such manner, and to such extent, as the Chairperson 
                shall by regulation prescribe.
                    ``(I) Definition.--In subparagraph (D)(iii)(II) and 
                notwithstanding section 3(8), the term `State' 
                includes, in addition to the several States of the 
                United States, only the jurisdictions specified in such 
                section that have a population of 200,000 or more, 
                according to the latest decennial census.
    ``(d) National Significance Grants.--
            ``(1) Purpose.--The purpose of this subsection is to make 
        grants to groups of demonstrated and substantial artistic and 
        cultural importance, for projects, productions, and workshops 
        that will increase the access of all the people of the United 
        States, especially underserved communities, to the best of the 
        arts and culture of the United States.
            ``(2) In general.--Using funds reserved under section 
        106(a)(1)(E), the Chairperson, acting on the recommendation of 
        the National Council on the Arts, may establish and carry out a 
        program of grants to groups who meet the standard of artistic 
        excellence and artistic merit and who are engaged in or 
        concerned with the arts, for the purpose of paying for the 
        Federal share of the cost of--
                    ``(A) enabling the groups to provide or support 
                projects, productions, or workshops described in 
                paragraph (3) that will have a national, regional, or 
                otherwise substantial artistic or cultural impact;
                    ``(B) providing administrative and management 
                improvements for the groups, particularly in the field 
                of long-range financial planning, including increasing 
                levels of community support and the range of 
                contributors to the programs of such groups; or
                    ``(C) enabling the groups to provide or support 
                projects, productions, or workshops that will serve as 
                models for arts education.
            ``(3) Projects, productions, and workshops.--
                    ``(A) Required elements.--Each such project, 
                production, or workshop shall--
                            ``(i) have substantial national or regional 
                        cultural significance, and encourage 
                        professional excellence; or
                            ``(ii)(I) have significant merit; and
                            ``(II) be a project, production, or 
                        workshop that, if such a group did not receive 
                        a grant, might otherwise be unavailable to 
                        citizens for geographic or economic reasons.
                    ``(B) Permissible elements.--Each such project, 
                production, or workshop may--
                            ``(i) encourage access to, education in, 
                        and knowledge, understanding, enjoyment, and 
                        appreciation of, the arts by the public;
                            ``(ii) enhance managerial and 
                        organizational skills and capabilities;
                            ``(iii) use technology to broaden public 
                        access to the arts;
                            ``(iv) expand access to the arts for 
                        individuals with disabilities; or
                            ``(v) promote access to the arts for 
                        minority or underserved populations.
            ``(4) Federal share requirement.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), in the case of any grant 
                made under this subsection, the Federal share described 
                in paragraph (2) shall be 25 percent.
                    ``(B) Certain groups.--In the case of any grant 
                made under this subsection to a group with an annual 
                budget in excess of $3,000,000, the Federal share 
                described in paragraph (2) shall be 16.67 percent.
                    ``(C) Adjustments.--The Chairperson may increase 
                the Federal share applicable under this subsection for 
                a designated grant recipient, with review and approval 
                by the National Council on the Arts. The Chairperson 
                shall not increase the Federal share above 50 percent 
                for the recipient. Not more than 10 percent of the 
                funds made available by the Endowment for grants under 
                this subsection for any fiscal year may be available 
                for grants for the fiscal year for which the 
                Chairperson increases the applicable Federal share.
            ``(5) Priority.--In awarding grants under this subsection, 
        the Chairperson shall give priority to projects, productions, 
        and workshops that increase the access of the public of the 
        United States, especially underserved communities, to culture 
        and the arts, including access by touring, by regional or 
        national dissemination, or by geographic dispersion.
    ``(e) Direct Grants.--
            ``(1) Purpose.--The purpose of this subsection is to make 
        grants to groups, and individuals, that are broadly 
        representative of the cultural heritage of the United States 
        and broadly geographically representative, for projects, 
        productions, and workshops of the highest artistic excellence 
        and artistic merit.
            ``(2) In general.--Using funds reserved under section 
        106(a)(1)(F), the Chairperson, acting on the recommendation of 
        the National Council on the Arts, may establish and carry out a 
        program of grants to groups, or individuals who are engaged in 
        or concerned with the arts, to pay for the Federal share of the 
        cost of projects, productions, or workshops that meet the 
        standard of artistic excellence and artistic merit and that 
        fulfill the purposes of this Act.
            ``(3) Federal share requirement.--The Federal share 
        described in paragraph (2) shall be 50 percent.
            ``(4) Priority.--In awarding grants under this subsection, 
        the Chairperson shall give priority to projects, productions, 
        and workshops that will be disseminated widely after 
        completion.
            ``(5) Adjustments.--The Chairperson may increase the 
        Federal share applicable under this subsection for a designated 
        grant recipient, with review and approval by the National 
        Council on the Arts. Not more than 20 percent of the funds made 
        available by the Endowment for grants under this subsection for 
        any fiscal year may be available for grants for the fiscal year 
        for which the Chairperson increases the applicable Federal 
        share.
            ``(6) Special rule for grants to individuals.--The 
        Chairperson shall only award a grant in accordance with this 
        subsection to an individual described in paragraph (2) if such 
        grant is awarded to such individual for a literature 
        fellowship, a National Heritage Fellowship, or a Jazz Masters 
        Fellowship.
    ``(f) Arts Education and Underserved Communities Grants.--
            ``(1) Purpose.--The purpose of this subsection is to make 
        grants to State arts agencies and other groups to carry out 
        activities in arts education and to carry out arts-related 
        activities in underserved communities.
            ``(2) In general.--Using the funds reserved under section 
        subparagraphs (C) (as may be appropriate) and (G) of section 
        106(a)(1), the Chairperson, acting on the recommendation of the 
        National Council on the Arts, may establish and carry out a 
        program of grants to State arts agencies or other groups to pay 
        for the Federal share of the cost of carrying out activities 
        that--
                    ``(A) promote and improve the availability of arts 
                instruction, and improve the quality of arts education, 
                through support of lifelong learning in the arts;
                    ``(B) provide--
                            ``(i) instruction in the arts by 
                        integrating and incorporating the arts in the 
                        teaching of English, math, science, foreign 
                        languages, civics and government, economics, 
                        history, and geography; or
                            ``(ii) courses in the arts through school 
                        programs;
                    ``(C) enhance the quality of arts instruction in 
                programs of teacher education;
                    ``(D) develop arts faculty resources and talents;
                    ``(E) support and encourage the development of 
                improved curriculum materials in the arts;
                    ``(F) support apprenticeships, internships, and 
                other career oriented work-study experiences for 
                artists and arts teachers, and encourage residencies of 
                artists at all educational levels;
                    ``(G) stimulate artistic activity and awareness, 
                and broaden public access to the arts, in underserved 
                communities;
                    ``(H) enhance the artistic capabilities of 
                developing arts organizations in underserved 
                communities through artistic, programmatic, and staff 
                development; or
                    ``(I) provide technical assistance to developing 
                arts organizations in underserved communities to 
                improve managerial and organizational skills, financial 
                systems management, and long-range fiscal planning.
            ``(3) Federal share.--The Federal share described in 
        paragraph (2) shall be 50 percent.
            ``(4) Evaluation and reports for certain activities.--
                    ``(A) In general.--Each State arts agency or other 
                group that receives a grant under this subsection to 
                carry out the activity described in paragraph (2)(B) 
                shall conduct an ongoing evaluation of the activity.
                    ``(B) Evaluation components.--In conducting the 
                evaluation under subparagraph (A), a State arts agency 
or other group shall, in the case of students who participate in an 
activity described in paragraph (2)(B), monitor the progress of the 
student participants throughout the period of participation.
                    ``(C) Report to chairperson.--Not later than 60 
                days after the date of the completion of an activity by 
                a State arts agency or other group under subparagraph 
                (A), the State arts agency or other group shall prepare 
                and submit to the Chairperson a report on the 
                evaluation conducted under subparagraph (A).
                    ``(D) Report to congress.--Not later than 60 days 
                after the date of the submission of the report under 
                subparagraph (C), the Chairperson shall prepare and 
                submit to Congress a report on--
                            ``(i) the activities funded under paragraph 
                        (2)(B); and
                            ``(ii) the evaluations conducted by 
                        recipients under subparagraph (A).

``SEC. 203. APPLICATION PROCEDURES.

    ``(a) Application Requirement.--No grant shall be made under this 
title to any person unless the person submits an application to the 
Chairperson in accordance with regulations and procedures established 
by the Chairperson.
    ``(b) Procedures.--
            ``(1) In general.--
                    ``(A) Considerations.--In establishing such 
                regulations and procedures for applications, the 
                Chairperson shall ensure that--
                            ``(i) artistic excellence and artistic 
                        merit of the projects, productions, and 
                        workshops described in the application are the 
                        criteria by which the applications are judged 
                        by advisory panels described in section 204, 
                        taking into consideration general standards of 
                        decency and respect for the diverse beliefs and 
                        values of the public of the United States;
                            ``(ii) in selecting groups as recipients of 
                        grants under section 202, the Chairperson shall 
                        give preference to artistically rural and urban 
                        underserved communities and artists and 
                        artistic groups that have traditionally been 
                        underrepresented in the arts; and
                            ``(iii) the projects, productions, and 
                        workshops described in the applications, and 
                        awards of grants under this title, are 
                        consistent with the objectives of section 202 
                        and this section.
                    ``(B) Obscenity provisions.--Such regulations and 
                procedures shall clearly indicate that obscenity is 
                without artistic merit, is not protected speech, and 
                shall not be funded under this title. Projects, 
                productions, and workshops that are determined to be 
                obscene shall be prohibited from receiving grants under 
                this title from the Endowment.
            ``(2) Considerations for the chairperson.--In considering 
        an application for a grant under this title, the Chairperson 
        shall consider the extent to which the projects, productions, 
        and workshops described in the application fulfill the purposes 
        of this Act, as well as their artistic excellence and artistic 
        merit, as determined by the Chairperson.
            ``(3) Construction.--The disapproval or approval by the 
        Chairperson of an application for a grant under this title 
        shall not be construed to mean, and shall not be considered to 
        be evidence that, the project, production, or workshop, for 
        which the applicant requested a grant, is or is not obscene.

``SEC. 204. ADVISORY PANELS.

    ``(a) In General.--The Chairperson shall utilize review by advisory 
panels--
            ``(1) as the first step in the review of applications 
        submitted under this Act; and
            ``(2) to make recommendations to the National Council on 
        the Arts in all cases involving requests for grants authorized 
        under this title, except cases in which the Chairperson 
        exercises authority delegated under section 205(f)(2).
    ``(b) Procedures.--
            ``(1) Criteria.--In reviewing the applications, such panels 
        shall recommend applications for projects, productions, and 
        workshops on the basis of artistic excellence and artistic 
        merit, consistent with section 203(b)(1)(A)(i).
            ``(2) Amounts.--The panels may recommend only general 
        ranges of funding to be provided through the grants and may not 
        recommend specific amounts of such funding.
            ``(3) Regulations and procedures.--The Chairperson shall 
        issue regulations and establish procedures to--
                    ``(A) ensure that all the panels are composed, to 
                the extent practicable, of individuals providing a wide 
                geographic, ethnic, and minority representation as well 
                as individuals reflecting diverse artistic and cultural 
                points of view;
                    ``(B) ensure that all the panels include at least 2 
                members representing lay individuals who are--
                            ``(i) knowledgeable about the arts;
                            ``(ii) not engaged in the arts as a 
                        profession; and
                            ``(iii) not employees of either artists' 
                        organizations or arts organizations;
                    ``(C) ensure that, when feasible, the procedures 
                used by the panels to carry out their responsibilities 
                are standardized;
                    ``(D) require each such panel--
                            ``(i) to create written records 
                        summarizing--
                                    ``(I) all meetings and discussions 
                                of such panel; and
                                    ``(II) the recommendations made by 
                                such panel to the Council; and
                            ``(ii) to make such records available to 
                        the public in a manner that protects the 
                        privacy of individual applicants and panel 
                        members;
                    ``(E) permit, when necessary and feasible, a site 
                visit to view the work of an applicant and deliver a 
                written report on the work being reviewed, in order to 
                assist panelists in making their recommendations;
                    ``(F)(i) require that the membership of each such 
                panel change substantially from year to year; and
                    ``(ii) provide that no individual be eligible to 
                serve on such a panel for more than 5 years, no 2 of 
                which may be consecutive; and
                    ``(G) ensure that the panels recommend more 
                applicants for grants than are anticipated can be 
                provided funding through the grants with available 
                funds.
            ``(4) Prohibition on conflicts of interest.--
                    ``(A) In general.--In making appointments to the 
                panels, the Chairperson shall ensure that an individual 
                who has a pending application for a grant authorized 
                under this title, who is an employee or agent of an 
                organization with such a pending application, or who 
                has a direct or indirect financial interest in any 
                application under consideration by such a panel, does 
                not serve as a member of any panel before which such 
                application is pending.
                    ``(B) Duration.--The prohibition described in 
                subparagraph (A) shall commence with respect to such 
                individual beginning on the date such application is 
                submitted, and shall continue until a final decision on 
                the application has been reached by the Chairperson.

``SEC. 205. NATIONAL COUNCIL ON THE ARTS.

    ``(a) Establishment.--There is established within the Endowment a 
National Council on the Arts (referred to in this section as the 
`Council').
    ``(b) Composition.--
            ``(1) In general.--The Council shall be composed of the 
        Chairperson of the Endowment, who shall be the Chairperson of 
        the Council, and 20 other members appointed by the President, 
        by and with the advice and consent of the Senate, who shall be 
        selected--
                    ``(A) from among private citizens of the United 
                States who--
                            ``(i) are widely recognized for their broad 
                        knowledge of, or expertise in, the arts; and
                            ``(ii) have established records of 
                        distinguished service, or achieved eminence, in 
                        the arts;
                    ``(B) so as to include practicing artists, members 
                of cultural professions, educators, civic cultural 
                leaders, and others who are professionally engaged in 
                the arts; and
                    ``(C) so as collectively to provide an appropriate 
                distribution of members among the major art fields.
            ``(2) Qualifications.--The President may, in making such 
        appointments, give consideration to such recommendations as 
        may, from time to time, be submitted to the President by 
        leading national organizations in the major art fields. In 
        making such appointments, the President shall give due regard 
        to equitable representation of women, racially and ethnically 
        diverse individuals, and individuals with disabilities, who are 
        involved in the arts. Members of the Council shall be appointed 
        so as to represent equitably geographical areas in the United 
        States, including rural and urban underserved communities.
    ``(c) Terms.--
            ``(1) In general.--
                    ``(A) Staggered terms.--Each member of the Council 
                shall serve for a term of 6 years, and the terms shall 
                be staggered.
                    ``(B) Expiration.--Except as provided in paragraph 
                (2), the terms of all Council members shall expire on 
                the third day of September in the year of expiration.
                    ``(C) Reappointment after partial term.--Each 
                member who has served on the Council for 1 term of less 
                than 3 years shall be eligible for reappointment for 1 
                term of 6 years.
                    ``(D) Vacancy appointments.--Any member appointed 
                to fill a vacancy shall serve for the remainder of the 
                term for which the predecessor of the member was 
                appointed.
                    ``(E) Holdover service.--Notwithstanding any other 
                provision of this subsection, a member of the Council 
                shall serve after the expiration of the term of the 
                member until the successor to the member takes office.
            ``(2) Adjustment to reduce council.--
                    ``(A) Members whose terms expired in 1996 but 
                continue to serve.--
                            ``(i) In general.--The terms of 10 members 
                        of the Council whose terms expired on September 
                        3, 1996 and who continue to serve because a 
                        successor has not been appointed shall be 
                        deemed to expire on the date of enactment of 
                        the Arts and Humanities Amendments of 1997.
                            ``(ii) Successors.--The President shall 
                        appoint 7 members of the Council to succeed 
                        members whose terms are deemed to expire as 
                        described in clause (i). The terms of the 
                        successors shall expire on September 3, 2002.
                    ``(B) Members whose terms expire in 1998.--The 
                President shall appoint 6 members of the Council to 
                succeed the 8 members of the Council whose terms expire 
                on September 3, 1998. The terms of the successors shall 
                expire on September 3, 2004.
                    ``(C) Members whose terms expire in 2000.--The 
                President shall appoint 7 members of the Council to 
                succeed the 8 members of the Council whose terms expire 
                on September 3, 2000. The terms of the successors shall 
                expire on September 3, 2006.
    ``(d) Compensation.--Members of the Council shall receive 
compensation at a rate to be fixed by the Chairperson but not to exceed 
the daily equivalent of the maximum rate authorized for a position 
above grade GS-15 of the General Schedule under section 5108 of title 
5, United States Code, and be allowed travel expenses including per 
diem in lieu of subsistence, in the same amounts and to the same 
extent, as authorized under section 5703 of title 5, United States 
Code, for persons employed intermittently in Federal Government 
service.
    ``(e) Meetings and Duties.--
            ``(1) Meetings.--The Council shall meet at the call of the 
        Chairperson but not less often than twice during each calendar 
        year. Eleven members of the Council shall constitute a quorum. 
        All policy meetings of the Council shall be open to the public.
            ``(2) Duties.--The Council shall--
                    ``(A) advise the Chairperson with respect to 
                policies, programs, and procedures for carrying out the 
                functions of the Chairperson under this title;
                    ``(B) review applications for grants authorized 
                under this title and make recommendations to the 
                Chairperson with respect to--
                            ``(i) whether to approve particular 
                        applications for grants authorized under this 
                        title that have been determined by advisory 
                        panels to have artistic excellence and artistic 
                        merit; and
                            ``(ii) the amount of funding that the 
                        Chairperson should provide through such a grant 
                        with respect to each such application the 
                        Council recommends for approval;
                    ``(C) use as criteria for the recommendations of 
                the Council--
                            ``(i) the extent to which the works 
                        described in the applications fulfill the 
                        purposes of this Act and the requirements under 
                        the provisions of this Act;
                            ``(ii) the artistic excellence and artistic 
                        merit of the works described in the 
                        applications; and
                            ``(iii) the extent to which the applicant 
                        serves an underserved community,
                as determined by each Council member;
                    ``(D) recommend more applications for funding 
                through grants than are anticipated can be provided 
                funding through the grants with available funds;
                    ``(E) create written records summarizing--
                            ``(i) all meetings and discussions of the 
                        Council; and
                            ``(ii) recommendations made by the Council 
                        to the Chairperson; and
                    ``(F) make such records available to the public in 
                a manner that protects the privacy of individual 
                applicants for grants authorized under this title, 
                advisory panel members, and Council members.
    ``(f) Actions by Chairperson.--
            ``(1) In general.--The Chairperson shall not approve or 
        disapprove any application for a grant authorized under this 
        title until the Chairperson has received the recommendation of 
        the Council on such application. The Chairperson shall have 
        final authority to approve each such application, and shall 
        determine the final amount of funding through any grant 
        awarded. The Chairperson may not approve an application with 
        respect to which the Council makes a negative recommendation.
            ``(2) Delegations.--In the case of an application, or 
        amendment of an application, submitted under this title and 
        involving $35,000 or less, or a request for change in a grant 
        amount of 20 percent or less, the Chairperson may approve or 
        disapprove such application, amendment, or request, if such 
        action is taken pursuant to the terms of an express and direct 
        delegation of authority from the Council to the Chairperson, 
        and if each such action by the Chairperson is reported to the 
        Council at the next regularly scheduled meeting of the Council. 
        Such action by the Chairperson shall be used with discretion 
        and shall not become a normal practice of providing funding 
        through a grant authorized under this title. The terms of any 
        such delegation of authority shall not permit obligations for 
        expenditure of funds under such delegation for any fiscal year 
        that exceed an amount equal to 2 percent of the sums 
        appropriated for the fiscal year pursuant to section 
        106(a)(1)(A).

``SEC. 206. LIMITATIONS ON GRANTS.

    ``(a) Prohibition on Subgrants.--The Chairperson shall establish 
procedures to ensure that no funding provided through a grant under 
this title, except a grant made to a State agency, a regional group, or 
a local arts agency that is an agency of local government, may be used 
to make a grant to any other organization or individual to conduct 
activity independent of the direct grant recipient. Nothing in this 
subsection shall prohibit payments made in exchange for goods or 
services rendered.
    ``(b) Prohibition on Seasonal Support.--No grant awarded under this 
title shall be used for seasonal support to a group, unless the 
application submitted by the group for such a grant specifically 
identifies the content of each activity to be carried out under such a 
grant for the season involved, including a specific identification of 
any project, production, or workshop.
    ``(c) Use of Funds for Projects, Productions, and Workshops in 
Specified Disciplines.--Each project, production, or workshop funded 
under this title shall relate to arts, as defined in section 3.
    ``(d) Labor Standards.--
            ``(1) In general.--It shall be a condition of the receipt 
        of any grant under this title that the grant recipient furnish 
        adequate assurances to the Secretary of Labor that--
                    ``(A) all professional performers and related or 
                supporting professional personnel employed on projects 
                or productions, or in workshops, that are financed in 
                whole or in part under this title will be paid, without 
                subsequent deduction or rebate on any account, not less 
                than the minimum compensation as determined by the 
                Secretary of Labor to be the prevailing minimum 
                compensation for persons employed in similar 
                activities; and
                    ``(B) no part of any project, production, or 
                workshop that is financed in whole or in part under 
                this title will be performed or engaged in under 
                working conditions that are unsanitary or hazardous or 
                dangerous to the health and safety of the employees 
                engaged in such project, production, or workshop.
            ``(2) Evidence.--Compliance with the safety and sanitary 
        laws of the State in which the project, production, or workshop 
        described in paragraph (1)(B) is to take place shall be prima 
        facie evidence of compliance with the assurance described in 
        paragraph (1)(B).
            ``(3) Standards, regulations, and procedures.--The 
        Secretary of Labor shall have the authority to prescribe such 
        standards, regulations, and procedures as the Secretary of 
        Labor may determine to be necessary or appropriate to carry out 
        this subsection.
    ``(e) Limitation on Grant Award.--
            ``(1) Individuals.--No individual may receive more than 2 
        grant awards under this title.
            ``(2) Agencies and organizations.--No group, other than a 
        State arts agency, may receive more than 3 grant awards in a 
        fiscal year under this title, except that this paragraph shall 
        not apply to a group that has entered into a cooperative 
        agreement with the Endowment to receive assistance under this 
        title.
    ``(f) Requirements for Groups.--A group shall be eligible for a 
grant under this title if--
            ``(1) no part of the net earnings of the group inures to 
        the benefit of any private stockholder, or individual; and
            ``(2) a donation to such group is allowable as a charitable 
        contribution under section 170(c) of the Internal Revenue Code 
        of 1986.
    ``(g) Citizenship Requirements for Individuals.--An individual 
shall be eligible to receive a direct grant under this title if at the 
time such grant is received such individual--
            ``(1) is a citizen or other national of the United States; 
        or
            ``(2) is an alien lawfully admitted to the United States 
        for permanent residence who--
                    ``(A) has filed an application for naturalization 
                in the manner prescribed by section 334 of the 
                Immigration and Nationality Act (8 U.S.C. 1445); and
                    ``(B) is not permanently ineligible to become a 
                citizen of the United States.
    ``(h) Installments.--The Chairperson shall establish procedures to 
provide for the distribution of funding provided through grants made 
under this title to recipients in installments except in exceptional 
cases in which the Chairperson determines that installments are not 
practicable. In providing any such installments to a recipient of a 
grant under this title, the Chairperson shall ensure that--
            ``(1) not more than two-thirds of such funding may be 
        provided at the time the application for the grant is approved; 
        and
            ``(2) the remainder of such funding may not be provided 
        until the Chairperson finds that the recipient of such grant is 
        complying substantially with this Act and with the conditions 
        under which such funding is provided to such recipient.
    ``(i) Loans.--Any loan made by the Chairperson under this title 
shall be made in accordance with terms and conditions approved by the 
Secretary of the Treasury.

``SEC. 207. ADMINISTRATIVE PROVISIONS.

    ``(a) Authorities of Chairperson.--In addition to any authorities 
vested in the Chairperson by other provisions of this Act, the 
Chairperson, in carrying out the functions of the Chairperson, shall 
have authority--
            ``(1) to prescribe such regulations and procedures as the 
        Chairperson determines to be necessary, governing the manner in 
        which the functions of the Chairperson shall be carried out;
            ``(2) to appoint and determine the compensation of such 
        employees, subject to title 5, United States Code, as may be 
        necessary to carry out the functions of the Chairperson, to 
        define the duties of such employees, and to supervise and 
        direct the activities of such employees;
            ``(3) to procure the temporary and intermittent services of 
        experts and consultants, including panels of experts, and 
        compensate the experts and consultants in accordance with 
        section 3109 of title 5, United States Code;
            ``(4) to accept and utilize the voluntary services of 
        individuals and reimburse the individuals for travel expenses, 
        including per diem in lieu of subsistence, in the same amounts 
        and to the same extent as authorized under section 5703 of 
        title 5, United States Code, for persons employed 
        intermittently in Federal Government service;
            ``(5) to make advance, progress, and other payments without 
        regard to section 3324 of title 31, United States Code;
            ``(6) to rent office space in the District of Columbia; and
            ``(7) to make other necessary expenditures.
    ``(b) Publications.--Official publications of the Endowment under 
this title may be supported without regard to the provisions of section 
501 of title 44, United States Code, if the Chairperson consults with 
the Joint Committee on Printing of the Congress.
    ``(c) Coordination.--The Chairperson shall coordinate the programs 
of the Endowment, insofar as practicable, with other Federal programs 
and programs undertaken by other public agencies or private groups, and 
shall develop the programs of the Endowment with due regard to the 
contribution to the objectives of this title that can be made by other 
Federal agencies under the existing programs. The Chairperson may enter 
into interagency agreements to promote or assist with the arts-related 
activities of other Federal agencies, on a reimbursable or 
nonreimbursable basis, and may use funds authorized to be appropriated 
to carry out this title to pay for the costs of such promotion or 
assistance.

``SEC. 208. REPORTS.

    ``(a) Annual Report of Chairperson.--The Chairperson shall submit 
an annual report to the President for submission to the appropriate 
committees of Congress on or before the 15th day of April of each year. 
The report shall summarize the activities of the Endowment for the 
preceding year, and shall include such recommendations as the 
Chairperson determines to be appropriate.
    ``(b) Financial Reports and Compliance.--
            ``(1) In general.--It shall be a condition of the receipt 
        of a grant made under this title by the Chairperson that--
                    ``(A) each applicant for such grant include in the 
                application described in section 203--
                            ``(i) a detailed description of the 
                        proposed project, production, or workshop for 
                        which the grant is requested;
                            ``(ii) a timetable for the completion of 
                        such proposed project, production, or workshop; 
                        and
                            ``(iii) an assurance that the applicant 
                        will meet the standards of artistic excellence 
                        and artistic merit;
                    ``(B)(i) each grant recipient under this title 
                carry out the proposal consistent with the description 
                contained in the application, as approved by the 
                Chairperson for funding through the grant; and
                    ``(ii) each such grant recipient seeking to change 
                the activities carried out under the grant justify the 
                requested change by a written request subject to 
                approval by the Chairperson; and
                    ``(C) each such grant recipient agree to and comply 
                with requirements to submit to the Chairperson--
                            ``(i) interim reports, including an annual 
                        report for each project, production, or 
                        workshop carried out under the grant during a 
                        period exceeding 1 year, describing the 
                        progress of the grant recipient in carrying out 
                        such project, production, or workshop and 
                        compliance by the grant recipient with the 
                        conditions of receipt of such grant;
                            ``(ii) financial reports containing such 
                        information as the Chairperson determines to be 
                        necessary to ensure that the funding made 
                        available through the grant is expended in 
                        accordance with the terms and conditions under 
                        which the grant is made;
                            ``(iii) a final report describing the 
                        project, production, or workshop carried out 
                        with the funding provided through the grant and 
                        the compliance by the grant recipient with the 
                        conditions of receipt of such grant, including 
                        the condition that the work assisted meet the 
                        standards of artistic excellence and artistic 
                        merit; and
                            ``(iv) in the case of a project or 
                        production, and if practicable, as determined 
                        by the Chairperson, a copy of such project or 
                        production.
            ``(2) Report requirements.--The Chairperson shall determine 
        the appropriate form and timing of interim reporting described 
        in paragraph (1)(C)(i) for a grant recipient under this title. 
        The reports and copy described in clauses (ii), (iii), and (iv) 
        of paragraph (1)(C) shall be due not later than 90 days after 
        the end of the period for which such grant recipient receives 
        funding through the grant or 90 days after the completion of 
        the project, production, or workshop, whichever occurs earlier. 
        The Chairperson may extend the 90-day period if the recipient 
        shows good cause why such an extension should be granted.
    ``(c) Evaluation.--The Chairperson shall conduct a post-award 
evaluation of activities for which grants are made by the Chairperson 
under this title. Such evaluation may include an audit to determine the 
accuracy of the reports required to be submitted by grant recipients 
under subsection (b).
    ``(d) Reports.--The Chairperson shall establish procedures to 
require that no additional funding shall be provided to a recipient of 
a grant authorized under this title unless such recipient has submitted 
to the Chairperson all required interim, financial, and final reports 
under subsection (b).

``SEC. 209. SANCTIONS AND PAYMENTS.

    ``(a) Failure To Satisfy Purposes.--If any recipient of a grant 
made under this title, or an indirect recipient of funding provided 
through the grant, substantially fails to satisfy the purposes for 
which such grant is made, as determined by the Chairperson, the 
Chairperson may--
            ``(1) for purposes of determining whether to make any 
        subsequent funding to the direct or indirect recipient under 
        this title, take into consideration the results of the post-
        award evaluation conducted under section 208(c);
            ``(2) prohibit the direct and indirect recipients from 
        using the name of, or in any way associating the project, 
        production, or workshop for which the grant was received with, 
        the Endowment; and
            ``(3) if such project, production, or workshop is 
        published, require that the publication contain the following 
        statement: `The opinions, findings, conclusions, and 
        recommendations expressed in this publication do not reflect 
        the views of the National Endowment for the Arts.'.
    ``(b) Noncompliance.--
            ``(1) In general.--The Chairperson shall take the actions 
        described in paragraph (2) whenever the Chairperson, after 
        providing reasonable notice and an opportunity for hearing, 
        finds that--
                    ``(A) a direct recipient of a grant under this 
                title, or an indirect recipient of funding provided 
                through the grant, is not complying substantially with 
                the provisions of this title;
                    ``(B) a State agency or regional group that 
                received a grant under this title, or an indirect 
                recipient of funding provided through the grant, is not 
                complying substantially with the terms and conditions 
                of the State plan accompanying the application approved 
                for the grant under this title; or
                    ``(C) any funding provided under this title to a 
                recipient, State agency, or regional group described in 
                subparagraph (A) or (B) has been diverted from the 
                purposes for which such funding was provided.
            ``(2) Actions.--On making the finding described in 
        paragraph (1), the Chairperson shall immediately notify the 
        direct recipient, State agency, or regional group that received 
        the funding at issue that--
                    ``(A) no further funding will be provided under 
                this title to such recipient, agency, or group until 
                there is no longer any default or failure to comply or 
                the diversion is corrected; or
                    ``(B) if compliance or correction is impossible, 
                until such recipient, agency, or group repays or 
                arranges the repayment of the Federal funds that were 
                improperly diverted or expended.
    ``(c) Obscene Works.--
            ``(1) Determination.--If, after providing reasonable notice 
        and opportunity for a hearing on the record, the Chairperson 
        determines that a direct recipient of a grant under this title, 
        or an indirect recipient of funding provided through the grant, 
        used the funding for a project, production, or workshop that is 
        determined to be obscene, the Chairperson shall require that 
        until the direct recipient repays such funding (in such amount, 
        and under such terms and conditions, as the Chairperson 
        determines to be appropriate) to the Endowment, no subsequent 
        funding shall be provided under this title to such recipient.
            ``(2) Crediting.--Funds repaid under this subsection to the 
        Endowment shall be deposited in the Treasury of the United 
        States and credited as miscellaneous receipts.
            ``(3) Application.--
                    ``(A) Timing.--This subsection shall not apply with 
                respect to grants made before October 1, 1990.
                    ``(B) Duration.--This subsection shall not apply 
                with respect to a project, production, or workshop 
                after the expiration of the 7-year period beginning on 
                the latest date on which a grant is made under this 
                title for such project, production, or workshop.
    ``(d) Recapture.--
            ``(1) In general.--A recipient of funding under this title 
        shall pay the amount described in paragraph (2) to the 
        Endowment if the Chairperson finds that the recipient has 
        derived net program income in excess of the match required 
        under the terms of the agreement from a commercially successful 
        project, production, or workshop funded that exceeds the lesser 
        of--
                    ``(A) $50,000; or
                    ``(B) twice the amount of the funding.
            ``(2) Amount.--At the discretion of the Chairperson, the 
        amount referred to in paragraph (1) is not less than \1/3\ and 
        not more than \1/2\ of the amount of the net program income 
        generated within 5 years after the end of the grant period, but 
        not more than the amount of the funding, unless the Chairperson 
        has reached an agreement with the grantee upon the award of a 
        grant that the amount referred to in paragraph (1) shall exceed 
        the amount of the grant.
    ``(e) Account.--Except as otherwise provided in this Act, the 
Treasurer of the United States shall deposit funds paid under 
subsection (d), or repaid under this Act, in a special interest bearing 
account to the credit of the Endowment.

``SEC. 210. NATIONAL MEDAL OF ARTS AWARDS.

    ``(a) National Medal of Arts Awards.--
            ``(1) Establishment.--There is established a National Medal 
        of Arts, which shall be a medal of such design as is determined 
        to be appropriate by the President, on the basis of 
        recommendations submitted by the National Council on the Arts, 
        and which shall be awarded as provided in this subsection.
            ``(2) Awards.--The President shall from time to time award 
        the National Medal of Arts, on the basis of recommendations 
        from the National Council on the Arts, to individuals or groups 
        who in the judgment of the President are deserving of special 
        recognition by reason of their outstanding contributions to the 
        excellence, growth, support, and availability of the arts in 
        the United States.
            ``(3) Number of medals.--Not more than 12 of such medals 
        may be awarded in any calendar year.
            ``(4) Qualifications.--An individual may be awarded the 
        National Medal of Arts if at the time such award is made such 
        individual meets the requirements of section 206(g).
            ``(5) Groups.--A group may be awarded the National Medal of 
        Arts if such group is organized or incorporated in the United 
        States.
            ``(6) Ceremonies.--The presentation of the National Medal 
        of Arts shall be made by the President with such ceremonies as 
        the President may determine to be appropriate, including 
        attendance by appropriate Members of Congress.
    ``(b) Funds.--The Chairperson shall use amounts received by the 
National Endowment for the Arts under section 105(b)(1)(A) to carry out 
this section.

           ``TITLE III--NATIONAL ENDOWMENT FOR THE HUMANITIES

``SEC. 301. DEFINITIONS.

    ``In this title:
            ``(1) Project.--
                    ``(A) In general.--The term `project' means an 
                activity organized to carry out the objectives of this 
                title.
                    ``(B) Renovation or construction.--Such term also 
                includes--
                            ``(i) the renovation of a facility if--
                                    ``(I) the amount of the expenditure 
                                of Federal funds for such purpose in 
                                the case of any facility does not 
                                exceed $250,000; and
                                    ``(II) two-thirds of the members of 
                                the National Council on the Humanities 
                                (who are present and voting) recommend 
                                a grant involving an expenditure for 
                                such purpose; and
                            ``(ii) for purposes of subsections (d) and 
                        (e) of section 302, the construction of a 
                        facility if--
                                    ``(I) such construction is for 
                                demonstration purposes or under unusual 
                                circumstances in which there is no 
                                other manner by which to accomplish a 
                                humanistic purpose; and
                                    ``(II) two-thirds of the members of 
                                the National Council on the Humanities 
                                (who are present and voting) recommend 
                                a grant involving an expenditure for 
                                such purpose.
            ``(2) Workshop.--The term `workshop' means an activity the 
        primary purpose of which is to promote scholarship and teaching 
        among the participants.

``SEC. 302. ESTABLISHMENT OF THE NATIONAL ENDOWMENT FOR THE HUMANITIES.

    ``(a) Establishment.--There is established within the Foundation a 
National Endowment for the Humanities (referred to in this title as the 
`Endowment').
    ``(b) Chairperson.--
            ``(1) Appointment.--The Endowment shall be headed by a 
        chairperson, to be known as the Chairperson of the Endowment 
        (referred to in this title as the `Chairperson'), who shall be 
        appointed by the President, by and with the advice and consent 
        of the Senate.
            ``(2) Term.--
                    ``(A) In general.--The term of office of the 
                Chairperson shall be 4 years, except that any 
                Chairperson appointed to fill a vacancy shall serve for 
                the remainder of the term for which the predecessor of 
                the Chairperson was appointed. Notwithstanding any 
                other provision of this subparagraph, on the expiration 
                of the term of office of the Chairperson, the 
                Chairperson shall serve until the successor to the 
                Chairperson is appointed and has qualified.
                    ``(B) Reappointment.--The Chairperson shall be 
                eligible for reappointment.
    ``(c) Partnership Grants.--
            ``(1) Purpose.--The purpose of this subsection is to 
        support programs of humanities councils at the State and local 
        levels.
            ``(2) Definition.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in this subsection, the term `State 
                entity' means--
                            ``(i) a State that obtains approval of an 
                        application submitted under paragraph (4); or
                            ``(ii) in a case in which a State fails to 
                        submit an application under paragraph (4), an 
                        appropriate entity that obtains approval of an 
                        application submitted under paragraph (5).
                    ``(B) Jurisdiction.--
                            ``(i) State entity.--In paragraph 
                        (6)(C)(ii), the term `State entity' means a 
                        State entity, as defined in subparagraph (A), 
                        for a State.
                            ``(ii) State.--In clause (i), and 
                        notwithstanding section 3(8), the term `State', 
                        includes, in addition to the several States of 
                        the United States, only the jurisdictions 
                        specified in such section that have a 
                        population of 200,000 or more, according to the 
                        latest decennial census.
            ``(3) General authority.--Using funds reserved under 
        section 106(b)(1)(C), the Chairperson, acting on the 
        recommendation of the National Council on the Humanities, is 
        authorized, in accordance with the provisions of this 
        subsection, to establish and carry out a program of grants to 
        assist State entities--
                    ``(A) in paying for not more than 50 percent of the 
                cost (except as otherwise provided in this subsection) 
                of supporting activities that achieve the objectives 
                described in subparagraphs (A) through (F) of 
                subsection (d)(2) and in subparagraphs (A) and (B) of 
                subsection (e)(2); or
                    ``(B) in matching contributions from non-Federal 
                sources made to a trust fund the purpose of which is to 
                provide long-term financial support for such 
                activities.
            ``(4) Grants through state agencies.--
                    ``(A) Designation.--In order to receive a grant 
                under this subsection for any fiscal year, if a State 
                desires to designate or to provide for the 
                establishment of a State agency (referred to in this 
                section as a `State agency') as the sole agency for the 
                administration of the State plan referred to in 
                subparagraph (B) relating to the grant, such State 
                shall designate as the State agency the humanities 
                council or shall provide for the establishment of such 
                a council.
                    ``(B) Application and state plan.--In any State 
                that designates or provides for the establishment of a 
                State agency as described in subparagraph (A), the 
                chief executive officer of the State shall submit, 
                before the beginning of each fiscal year, an 
                application for a grant and accompany such application 
                with a State plan that the Chairperson finds--
                            ``(i) designates or provides for the 
                        establishment of a State agency;
                            ``(ii) provides that the chief executive 
                        officer of the State will appoint new members 
                        to the State humanities council designated or 
                        established under subparagraph (A), as 
                        vacancies occur as a result of the expiration 
                        of the terms of members of such council, until 
                        the chief executive officer has appointed all 
                        of the members of such council;
                            ``(iii) provides for the expenditure, from 
                        State funds, of an amount equal to 50 percent 
                        of the portion of the funding received by such 
                        State through a grant made under paragraph 
                        (6)(A) (relating to the minimum State 
                        allotment), or 25 percent of the total amount 
                        of funding received by such State through 
                        grants made under this subsection, whichever is 
                        greater, for the fiscal year involved (except 
                        as otherwise provided in paragraph (7));
                            ``(iv) provides that funds paid to the 
                        State under this subsection will be expended 
                        solely on activities, approved by the State 
                        agency, that--
                                    ``(I) achieve the objectives 
                                described in subparagraphs (A) through 
                                (F) of subsection (d)(2) and 
                                subparagraphs (A) and (B) of subsection 
                                (e)(2); and
                                    ``(II) are designed to bring the 
                                humanities to the public;
                            ``(v) provides assurances that State funds 
                        will be made available for the purpose of 
                        meeting the requirements of this subparagraph;
                            ``(vi) provides that the State agency will 
                        make such reports, in such manner and 
                        containing such information, as the Chairperson 
                        may from time to time require, including a 
                        description of the progress made toward 
                        achieving the objectives of the State plan;
                            ``(vii) provides--
                                    ``(I) an assurance that the State 
                                agency has held, after reasonable 
                                notice, public meetings in the State to 
                                allow the public, interested 
                                organizations, and scholars to present 
                                views and make recommendations 
                                regarding the State plan; and
                                    ``(II) a summary of such 
                                recommendations and of the response of 
                                the State agency to such 
                                recommendations; and
                            ``(viii) contains--
                                    ``(I) for the most recent preceding 
                                year for which information is 
                                available, a description of the extent 
                                to which the activities supported by 
                                funding from the State agency under 
                                this subsection were available to all 
                                people and communities in the State and 
                                a description of the level of 
                                participation by scholars and scholarly 
                                organizations in activities supported 
                                by funding from the State agency under 
                                this subsection; and
                                    ``(II) a description of activities 
                                supported by funding from the State 
                                agency under this subsection that exist 
                                or are being developed to address the 
                                availability of the humanities to all 
                                people or communities described in 
                                subclause (I) or to secure wider 
                                participation of scholars and scholarly 
                                organizations described in subclause 
                                (I).
                    ``(C) Approval.--The Chairperson may not approve an 
                application described in subparagraph (B) unless the 
                accompanying State plan satisfies the requirements 
                specified in subparagraph (B).
            ``(5) Grants to appropriate entities.--
                    ``(A) Designation.--In any State in which the chief 
                executive officer of the State fails to submit an 
                application under paragraph (4)(B) for a fiscal year, 
                the Chairperson may make grants under paragraph (3) to 
                an appropriate entity in the State, and each such 
                entity shall establish a procedure that ensures that 8 
                members of the governing body of such entity shall be 
                appointed by an appropriate officer or agency of such 
                State, except that in no event may the number of such 
                members exceed \1/3\ of the total membership of such 
                governing body. The officer or agency shall select the 
                members from among individuals who have knowledge of or 
                experience in the humanities.
                    ``(B) Application and plan.--If a State fails to 
                submit an application under paragraph (4)(B) for a 
                fiscal year, any appropriate entity in the State 
                desiring to receive a grant under this subsection for 
                the fiscal year shall submit an application for such 
                grant at such time and in such manner as shall be 
                specified by the Chairperson, and accompany such 
                application with a State plan that the Chairperson 
                finds--
                            ``(i) provides assurances that such entity 
                        will comply with the requirements of 
                        subparagraph (A);
                            ``(ii) provides that funds paid to such 
                        entity under this paragraph will be expended 
                        solely on activities that--
                                    ``(I) achieve the objectives 
                                described in subparagraphs (A) through 
                                (F) of subsection (d)(2) and 
                                subparagraphs (A) and (B) of subsection 
                                (e)(2); and
                                    ``(II) are designed to bring the 
                                humanities to the public;
                            ``(iii) establishes a membership policy 
                        that is designed to ensure broad public 
                        representation with respect to activities 
                        administered by such entity;
                            ``(iv) provides for a nomination process 
                        that ensures opportunities for nomination to 
                        membership in the governing body from various 
                        groups in such State and from a variety of 
                        segments of the population of such State, 
                        including individuals who by reason of their 
                        achievement, scholarship, or creativity in the 
                        humanities, are especially qualified to serve 
                        as members of the body;
                            ``(v) provides for a membership rotation 
                        process that ensures the regular rotation of 
                        the membership and officers of such entity;
                            ``(vi) establishes reporting procedures 
                        that are designed to inform the chief executive 
                        officer of such State, and other appropriate 
                        officers and agencies, of the activities of 
                        such entity;
                            ``(vii) establishes procedures to ensure 
                        public access to information relating to such 
                        activities;
                            ``(viii) provides that such entity will 
                        make such reports, at such times, in such 
                        manner, and containing such information, as the 
                        Chairperson may require, including a 
                        description of the progress made toward 
                        achieving the objectives of the State plan;
                            ``(ix) provides--
                                    ``(I) an assurance that the entity 
                                has held, after reasonable notice, 
                                public meetings in the State to allow 
                                the public, interested organizations, 
                                and scholars to present views and make 
                                recommendations regarding the State 
                                plan; and
                                    ``(II) a summary of such 
                                recommendations and of the response of 
                                the entity to such recommendations; and
                            ``(x) contains--
                                    ``(I) for the most recent preceding 
                                year for which information is 
                                available, a description of the extent 
                                to which activities supported by 
                                funding from the entity under this 
                                subsection were available to all people 
                                and communities in the State and a 
                                description of the level of 
                                participation by scholars and scholarly 
                                organizations in activities supported 
                                by funding from the entity under this 
                                subsection; and
                                    ``(II) a description of activities 
                                supported by funding from the entity 
                                under this subsection that exist or are 
                                being developed to address the 
                                availability of the humanities to all 
                                people or communities described in 
                                subclause (I) or to secure wider 
                                participation of scholars and scholarly 
                                organizations described in subclause 
                                (I).
                    ``(C) Approval.--The Chairperson may not approve an 
                application described in subparagraph (B) unless the 
                accompanying plan satisfies the requirements specified 
                in subparagraph (B).
            ``(6) Allotments.--
                    ``(A) In general.--Of the sums available to carry 
                out this subsection for any fiscal year, each State 
                entity shall be allotted at least $200,000.
                    ``(B) Insufficient sums.--If the sums available to 
                carry out this subsection for any fiscal year are 
                insufficient to make the allotments under subparagraph 
                (A) in full, such sums shall be allotted so that each 
                State entity receives an equal amount.
                    ``(C) Excess funds.--In any case in which the sums 
                available to carry out this subsection for any fiscal 
                year are in excess of the amount required to make the 
                allotments under subparagraph (A)--
                            ``(i) 34 percent of the amount of such 
                        excess for such fiscal year shall be available 
                        to the Chairperson for making grants under this 
                        subsection to State entities;
                            ``(ii) 44 percent of the amount of such 
                        excess for such fiscal year shall be allotted 
                        so that each State entity receives an equal 
                        amount; and
                            ``(iii) the remainder of the amount of such 
                        excess for such fiscal year shall be allotted 
                        so that each State entity receives an amount 
                        that bears the same ratio to such remainder as 
                        the population of the State for which the 
                        application is approved bears to the population 
                        of all the States.
            ``(7) Limitations.--
                    ``(A) Federal share.--
                            ``(i) In general.--Funding provided through 
                        a grant made under this subsection to a State 
                        entity for any fiscal year shall be available 
                        to each State entity that has an application 
                        approved by the Chairperson, and has the State 
                        plan accompanying the application in effect on 
                        the first day of such fiscal year, to pay not 
                        more than 50 percent of the total cost of 
                        carrying out any activity described in 
                        paragraph (3).
                            ``(ii) Excess portion.--Except as provided 
                        in clause (iii), the portion of the funding 
                        provided through any grant made under paragraph 
                        (6)(A) to a State entity for any fiscal year 
                        that exceeds $125,000 shall be available, at 
                        the discretion of the Chairperson, to pay not 
                        more than 100 percent of such cost of carrying 
                        out an activity under this subsection if such 
                        activity would be unavailable to the residents 
                        of the State without such portion.
                            ``(iii) Percentage of grant funds.--The 
                        portion of the funding described in clause (ii) 
                        for any fiscal year that is available to pay 
                        not more than 100 percent of such cost, as 
                        described in clause (ii), shall not exceed 20 
                        percent of the total of the funding provided 
                        through such grant for such fiscal year.
                    ``(B) Prohibition on supplanting non-federal 
                funds.--Funds made available under this subsection 
                shall be used to supplement, and shall not supplant, 
                non-Federal funds expended for supporting activities 
                described in paragraph (3).
            ``(8) Unobligated funds.--Any amount allotted to a State 
        entity under paragraph (6) for any fiscal year that is not 
        obligated by the State entity earlier than 60 days prior to the 
        end of the fiscal year for which the amount is appropriated 
        shall be available for making grants under subsections (d) and 
        (e).
            ``(9) Limitation on multiple entities.--The Chairperson may 
        not make grants under this subsection to more than 1 entity in 
        any State.
    ``(d) National Grants.--
            ``(1) Purpose.--The purpose of this subsection is to 
        provide support for grants to groups, individuals, and State 
        agencies or entities to carry out activities relating to 
        education and the public humanities that have a national 
        audience and are of national significance, such as activities 
        relating to education in the humanities, media projects, 
        projects in museums and by historical organizations, projects 
        in libraries and archives, public humanities projects, 
        endowment building, and technology activities.
            ``(2) General authority.--Using funds reserved under 
        section 106(b)(1)(D), the Chairperson, acting on the 
        recommendation of the National Council on the Humanities, may 
        establish and carry out a program of grants to groups, or in 
        appropriate cases individuals, who or which meet the standard 
        of excellence in the humanities and significance in the 
        humanities, or State agencies or entities, to pay for the 
        Federal share of the cost of activities, in accordance with 
        subsection (f), to--
                    ``(A) develop and encourage the pursuit of a 
                national policy to further the public good through 
                public funding of the humanities;
                    ``(B) initiate and support research and programs to 
                strengthen the research and teaching potential of the 
                United States in the humanities;
                    ``(C) foster the exchange of information in the 
                humanities;
                    ``(D) foster education in, and public understanding 
                and appreciation of, the humanities;
                    ``(E) support projects that foster or promote 
                literacy;
                    ``(F) ensure that the benefit of the programs of 
                the Endowment will also be available to the citizens of 
                the United States where such programs would otherwise 
                be unavailable due to geographic or economic reasons;
                    ``(G) enable the groups to increase the levels of 
                continuing support and to increase the range of 
                contributors to the program of the groups;
                    ``(H) provide administrative and management 
                improvements for the groups, particularly in the field 
                of long-range financial planning;
                    ``(I) enable the groups to increase audience 
                participation in, and appreciation of, programs 
                sponsored by the groups;
                    ``(J) develop new sources of long-term support for 
                educational, scholarly, and public programs in the 
                humanities, including renovating or constructing 
                facilities, augmenting or establishing endowment funds, 
                and purchasing capital equipment to ensure financial 
                stability;
                    ``(K) stimulate greater cooperation among the 
                groups especially designed to serve better the 
                communities in which the groups are located; and
                    ``(L) foster greater citizen involvement in 
                planning the cultural development of a community.
    ``(e) Research and Scholarship Grants.--
            ``(1) Purpose.--The purpose of this subsection is to 
        encourage the development and dissemination of significant 
        scholarship in the humanities by groups, individuals, and State 
        agencies or entities by such means as fellowships for college 
        and university faculty and independent scholars, dissertation 
        grants, summer stipends, and funds for scholarly publications, 
        reference materials, basic research, institutional programs, 
        and preservation.
            ``(2) General authority.--Using funds reserved under 
        section 106(b)(1)(E), the Chairperson, acting on the 
        recommendation of the National Council on the Humanities, may 
        establish and carry out a program of grants to groups, 
        individuals, State agencies, and State entities for the purpose 
        of paying for the Federal share of the cost, in accordance with 
        subsection (f), of--
                    ``(A) initiating and supporting (including 
                supporting through fellowships) training, workshops, 
                programs, research, and publications, in the 
                humanities, that have substantial scholarly and 
                cultural significance and that reach or reflect the 
                cultural heritage of the United States;
                    ``(B) fostering projects that provide access to, 
                and preserving materials important to research, 
                education, and public understanding regarding, the 
                humanities;
                    ``(C) enabling the groups to increase the levels of 
                continuing support and to increase the range of 
                contributors to the program of the groups;
                    ``(D) providing administrative and management 
                improvements for the groups, particularly in the field 
                of long-range financial planning; and
                    ``(E) developing new sources of long-term support 
                for educational, scholarly, and public programs in the 
                humanities, including renovating or constructing 
                facilities, augmenting or establishing endowment funds, 
                and purchasing capital equipment to ensure financial 
                stability.
            ``(3) Training; workshops; research.--A fellowship awarded 
        to an individual under paragraph (2)(A) may be used for the 
        purpose of supporting study or research at an appropriate 
        nonprofit institution selected by the individual, for a stated 
        period of time. The total amount of any grant under paragraph 
        (2)(A) to any group engaging in workshop activities for which 
        an admission or other charge is made to the general public 
        shall not exceed 30 percent of the total cost of such 
        activities.
            ``(4) Considerations.--In selecting a group or individual 
        as a recipient of a grant to be made under this subsection, the 
        Chairperson shall give particular regard to scholars, and 
        educational and cultural institutions, that traditionally have 
        been underrepresented in the humanities.
    ``(f) Federal Share and Non-Federal Share for National Grants and 
Research and Scholarship Grants.--
            ``(1) Federal share.--
                    ``(A) In general.--Except as provided in paragraph 
                (3), and subject to subparagraph (B), the Federal share 
                described subsection (d)(2) or (e)(2) shall be 
                determined by the Chairperson, after recommendation 
                from the Council.
                    ``(B) Special rule.--With respect to a fiscal year, 
                the Chairperson shall ensure that the aggregate amount 
of funding provided by the Chairperson through grants under subsections 
(d)(2) and (e)(2) for that fiscal year shall equal the aggregate amount 
of non-Federal contributions made for that fiscal year, in accordance 
with paragraph (2), by recipients of grants awarded under subsections 
(d)(2) and (e)(2).
            ``(2) Non-federal share.--
                    ``(A) In general.--Except as provided in paragraph 
                (3) and subject to subparagraph (B), the Chairperson 
                shall have the discretion in determining the amount of 
                non-Federal contribution that a recipient of a grant 
                under subsection (d)(2) or (e)(2) shall be required to 
                make toward the cost of an activity funded under the 
                grant.
                    ``(B) Special rule.--With respect to a fiscal year, 
                the Chairperson shall ensure that the aggregate amount 
                of non-Federal contributions provided by recipients of 
                grants under subsections (d)(2) and (e)(2) for that 
                fiscal year shall equal the aggregate amount of funding 
                that the Chairperson provided through grants under 
                subsections (d)(2) and (e)(2) for that fiscal year.
            ``(3) Special rules for activities relating to new sources 
        of long-term support.--
                    ``(A) Federal share.--The Federal share described 
                in subsection (d)(2) or (e)(2) for an activity 
                described in subsection (d)(2)(J) or (e)(2)(E) shall be 
                an amount equal to 25 percent of the cost of the 
                activity.
                    ``(B) Non-federal share.--A recipient that receives 
                a grant under subsection (d) to carry out an activity 
                described in paragraph (2)(J) of such subsection, or 
                subsection (e) to carry out an activity described in 
                paragraph (2)(E) of such subsection, shall make 
                available non-Federal contributions toward the costs of 
                the activity in an amount equal to 75 percent of such 
                costs ($3 for each $1 of Federal funds provided in the 
                grant).

``SEC. 303. APPLICATION PROCEDURES.

    ``To be eligible to receive a grant under this title, a State, 
group, individual, agency, or, organization shall submit an application 
to the Chairperson at such time, in such manner, and containing such 
information as the Chairperson may prescribe.

``SEC. 304. REVIEW PANELS.

    ``The Chairperson may select panels of experts under section 
307(a)(3) to review and make recommendations with respect to the 
approval of applications for grants authorized under this title. In 
selecting the panels, the Chairperson shall appoint individuals who 
have exhibited expertise and leadership in the field under review, who 
broadly represent diverse humanistic perspectives and geographic 
factors, and who broadly represent cultural diversity.

``SEC. 305. NATIONAL COUNCIL ON THE HUMANITIES.

    ``(a) Establishment.--There is established within the Endowment a 
National Council on the Humanities (referred to in this section as the 
`Council').
    ``(b) Composition.--
            ``(1) In general.--The Council shall be composed of the 
        Chairperson of the Endowment, who shall be the Chairperson of 
        the Council, and 20 other members appointed by the President, 
        by and with the advice and consent of the Senate, who shall be 
        selected--
                    ``(A) from among private citizens of the United 
                States who--
                            ``(i) are recognized for their broad 
                        knowledge of, or expertise in, the humanities; 
                        and
                            ``(ii) have established records of 
                        distinguished service, or achieved eminence, in 
                        the humanities;
                    ``(B) so as to include scholars and others who are 
                professionally engaged in the humanities; and
                    ``(C) so as collectively to provide an appropriate 
                distribution of members among the major humanities 
                fields.
            ``(2) Qualifications.--The President may, in making such 
        appointments, give consideration to such recommendations as 
        may, from time to time, be submitted to the President by 
        leading national organizations in the major humanities fields. 
        In making such appointments, the President shall give due 
        regard to equitable representation of women, racially and 
        ethnically diverse individuals, and individuals with 
        disabilities, who are involved in the humanities. Members of 
        the Council shall be appointed so as to represent equitably 
        geographical areas in the United States.
    ``(c) Terms.--
            ``(1) In general.--
                    ``(A) Staggered terms.--Each member of the Council 
                shall serve for a term of 6 years, and the terms shall 
                be staggered.
                    ``(B) Expiration.--Except as provided in paragraph 
                (2), the terms of all Council members shall expire on 
                the third day of September in the year of expiration.
                    ``(C) Reappointment after partial term.--Each 
                member who has served on the Council for 1 term of less 
                than 3 years shall be eligible for reappointment for 1 
                term of 6 years.
                    ``(D) Vacancy appointments.--Any member appointed 
                to fill a vacancy shall serve for the remainder of the 
                term for which the predecessor of the member was 
                appointed.
                    ``(E) Holdover service.--Notwithstanding any other 
                provision of this subsection, a member of the Council 
                shall serve after the expiration of the term of the 
                member until the successor to the member takes office.
            ``(2) Adjustment to reduce council.--
                    ``(A) Members whose terms expired in 1996 but 
                continue to serve.--
                            ``(i) In general.--The terms of 6 members 
                        of the Council whose terms expired on September 
                        3, 1996 and who continue to serve because a 
                        successor has not been appointed shall be 
                        deemed to expire on the date of enactment of 
                        the Arts and Humanities Amendments of 1997.
                            ``(ii) Successors.--The President shall 
                        appoint 3 members of the Council to succeed 
                        members whose terms are deemed to expire as 
                        described in clause (i).
                    ``(B) Members whose terms expire in 2000.--
                            ``(i) In general.--The terms of 2 members 
                        of the Council whose terms expire on September 
                        3, 2000 shall be deemed to expire on September 
                        3, 2002.
                            ``(ii) Successors.--The President shall not 
                        appoint any members to succeed the members 
                        whose terms are deemed to expire as described 
                        in clause (i).
    ``(d) Compensation.--Members of the Council shall receive 
compensation at a rate to be fixed by the Chairperson but not to exceed 
the daily equivalent of the maximum rate authorized for a position 
above grade GS-15 of the General Schedule under section 5108 of title 
5, United States Code, and be allowed travel expenses including per 
diem in lieu of subsistence, as authorized under section 5703 of title 
5, United States Code, for persons employed intermittently in Federal 
Government service.
    ``(e) Meetings and Duties.--
            ``(1) Meetings.--The Council shall meet at the call of the 
        Chairperson but not less often than twice during each calendar 
        year. Eleven members of the Council shall constitute a quorum.
            ``(2) Duties.--The Council shall--
                    ``(A) advise the Chairperson with respect to 
                policies, programs, and procedures for carrying out the 
                functions of the Chairperson under this title; and
                    ``(B) review applications for grants authorized 
                under this title and make recommendations to the 
                Chairperson with respect to the approval of each 
                application.
    ``(f) Actions by Chairperson.--
            ``(1) In general.--The Chairperson shall not approve or 
        disapprove any application for a grant authorized under this 
        title until the Chairperson has received the recommendation of 
        the Council on such application, unless the Council fails to 
        make a recommendation on the application within a reasonable 
        time.
            ``(2) Delegations.--In the case of an application submitted 
        under this title and involving $35,000 or less, the Chairperson 
        may approve or disapprove such application if such action is 
        taken pursuant to the terms of an express and direct delegation 
        of authority from the Council to the Chairperson, and if each 
        such action by the Chairperson is reviewed by the Council. The 
        terms of any such delegation of authority shall not permit 
        obligations for expenditure of funds under such delegation for 
        any fiscal year that exceed an amount equal to 3 percent of the 
        sums appropriated for the fiscal year pursuant to section 
        106(b)(1)(A).

``SEC. 306. LIMITATIONS ON GRANTS.

    ``(a) Criteria for Eligibility for Grants.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Production entity.--The term `production 
                entity' means any partnership, corporation, business 
                enterprise, or other organization engaged in the 
                production of a film or publication.
                    ``(B) Group.--The term `group' includes any State 
                or local government, State or local public agency, 
                Indian tribe, or nonprofit association, organization, 
                institution, or society.
                    ``(C) National of the united states.--The term 
                `national of the United States' means a citizen of the 
                United States or a person who owes permanent allegiance 
                to the United States.
            ``(2) Criteria.--The Chairperson, with the advice of the 
        National Council on the Humanities, shall establish criteria 
        for eligibility for grants made under this title. The criteria 
        shall provide the following:
                    ``(A) Group.--A group shall be eligible to receive 
                a grant under this title if--
                            ``(i) no part of the net earnings of the 
                        group inures to the benefit of any private 
                        stockholder, or individual; and
                            ``(ii) a donation to such group is 
                        allowable as a charitable contribution under 
                        section 170(c) of the Internal Revenue Code of 
                        1986.
                    ``(B) Production entity.--A production entity that 
                is a nonprofit group shall be eligible to receive a 
                grant under this title if the Chairperson, with the 
                advice of the National Council on the Humanities, 
                determines that providing such a grant will 
                significantly advance the knowledge or understanding of 
                the humanities in the United States.
                    ``(C) Individual.--An individual shall be eligible 
                to receive a grant under this title if--
                            ``(i) the individual is a citizen or 
                        national of the United States; and
                            ``(ii) the Chairperson, with the advice of 
                        the National Council on the Humanities, 
                        determines that providing the grant will 
                        significantly advance the knowledge or 
                        understanding of the humanities in the United 
                        States.
    ``(b) Admission Charges.--No grant shall be made under this title 
for an activity (other than an activity conducted by a school, college, 
or university) for which a direct or an indirect admission charge is 
requested if the proceeds, after deducting reasonable costs, are used 
for purposes other than assisting the grant recipient to develop high 
standards of scholarly excellence or encourage greater appreciation of 
the humanities by the citizens of the United States.
    ``(c) Labor Standards.--The provisions of section 206(d) shall 
apply to activities financed under this title in the same manner and to 
the same extent as the provisions apply to activities financed under 
title II.

``SEC. 307. ADMINISTRATIVE PROVISIONS.

    ``(a) Authorities of Chairperson.--In addition to any authorities 
vested in the Chairperson by other provisions of this Act, the 
Chairperson, in carrying out the functions of the Chairperson, shall 
have authority--
            ``(1) to prescribe such regulations and procedures as the 
        Chairperson determines to be necessary, governing the manner in 
        which the functions of the Chairperson shall be carried out;
            ``(2) to appoint and determine the compensation of such 
        employees, subject to title 5, United States Code, as may be 
        necessary to carry out the functions of the Chairperson, to 
        define the duties of such employees, and to supervise and 
        direct the activities of such employees;
            ``(3) to procure the temporary and intermittent services of 
        experts and consultants, including panels of experts, and 
        compensate the experts and consultants in accordance with 
        section 3109 of title 5, United States Code;
            ``(4) to accept and utilize the voluntary services of 
        individuals and reimburse the individuals for travel expenses, 
        including per diem in lieu of subsistence, in the same amounts 
        and to the same extent as authorized under section 5703 of 
        title 5, United States Code, for persons employed 
        intermittently in Federal Government service;
            ``(5) to make advance, progress, and other payments without 
        regard to section 3324 of title 31, United States Code;
            ``(6) to rent office space in the District of Columbia; and
            ``(7) to make other necessary expenditures.
    ``(b) Publications.--Official publications of the Endowment under 
this title may be supported without regard to the provisions of section 
501 of title 44, United States Code, if the Chairperson consults with 
the Joint Committee on Printing of the Congress.
    ``(c) Coordination.--The Chairperson shall coordinate the programs 
of the Endowment, insofar as practicable, with other Federal programs, 
programs of designated State humanities agencies, and programs 
undertaken by other public agencies or private groups, and shall 
develop the programs of the Endowment with due regard to the 
contribution to the objectives of this title that can be made by other 
Federal agencies under the existing programs. The Chairperson may enter 
into interagency agreements to promote or assist with the humanities-
related activities of other Federal agencies, on a reimbursable or 
nonreimbursable basis, and may use funds authorized to be appropriated 
to carry out this title to pay for the costs of such promotion or 
assistance.

``SEC. 308. REPORTS.

    ``(a) Annual Report of Chairperson.--The Chairperson shall submit 
an annual report to the President for submission to the appropriate 
committees of Congress on or before the 15th day of April of each year. 
The report shall summarize the activities of the Endowment for the 
preceding year, and may include such evaluations and other reports as 
the Chairperson determines to be appropriate.
    ``(b) Financial Reports and Compliance.--
            ``(1) In general.--It shall be a condition of the receipt 
        of a grant made under this title by the Chairperson that each 
        such grant recipient agree to and comply with requirements to 
        submit to the Chairperson--
                    ``(A) financial reports containing such information 
                as the Chairperson determines to be necessary to ensure 
                that the funding provided through the grant is expended 
                in accordance with the terms and conditions under which 
                the grant is made;
                    ``(B) a report describing the activity carried out 
                with the funding provided through the grant and the 
                compliance by the grant recipient with the conditions 
                of receipt of such grant, including the condition that 
                the work assisted meets the standards of excellence in 
                humanities and significance in the humanities; and
                    ``(C) if practicable, as determined by the 
                Chairperson, a copy of the work resulting from the 
                activity.
            ``(2) Reports.--The reports and copy described in paragraph 
        (1) shall be due not later than 90 days after the end of the 
        period for which such grant recipient receives funding through 
        the grant or 90 days after the completion of the work, 
        whichever occurs earlier. The Chairperson may extend the 90-day 
        period if the recipient shows good cause why such an extension 
        should be granted.
    ``(c) Evaluation.--The Chairperson shall conduct a post-award 
evaluation of activities for which grants are made by the Chairperson 
under this title. Such evaluation may include an audit to determine the 
accuracy of the reports required to be submitted by grant recipients 
under subsection (b).
    ``(d) Annual Report of National Council on the Humanities.--
            ``(1) In general.--The National Council on the Humanities 
        may submit an annual report to the President for submission to 
        the appropriate committees of Congress on or before the 15th 
        day of April of each year.
            ``(2) Contents.--The report shall include written records 
        summarizing--
                    ``(A) all meetings and discussions of the Council; 
                and
                    ``(B) recommendations made by the Council to the 
                Chairperson.
            ``(3) Privacy.--The Council shall ensure that the 
        information contained in the report will be presented in a 
        manner that protects the privacy of individual applicants for 
        grants authorized under this title and Council members.

``SEC. 309. SANCTIONS AND PAYMENTS.

    ``(a) Failure To Satisfy Purposes.--If any recipient of a grant 
made under this title, or an indirect recipient of funding provided 
through the grant, substantially fails to satisfy the purposes for 
which such grant is made, as determined by the Chairperson, the 
Chairperson may--
            ``(1) for purposes of determining whether to make any 
        subsequent funding to the direct or indirect recipient under 
        this title, take into consideration the results of the post-
award evaluation conducted under section 308(c);
            ``(2) prohibit the direct and indirect recipients from 
        using the name of, or in any way associating the project, 
        production, or workshop for which the grant was received with, 
        the Endowment; and
            ``(3) if such project, production, or workshop is 
        published, require that the publication contain the following 
        statement: `The opinions, findings, conclusions, and 
        recommendations expressed in this publication do not reflect 
        the views of the National Endowment for the Humanities.'.
    ``(b) Noncompliance.--
            ``(1) In general.--The Chairperson shall take the actions 
        described in paragraph (2) whenever the Chairperson, after 
        providing reasonable notice and an opportunity for hearing, 
        finds that--
                    ``(A) a direct recipient of a grant under this 
                title, or an indirect recipient of funding provided 
                through the grant, is not complying substantially with 
                the provisions of this title;
                    ``(B) a State agency or entity that received a 
                grant under this title, or an indirect recipient of 
                funding provided through the grant, is not complying 
                substantially with terms and conditions of the State 
                plan accompanying the application approved for the 
                grant under this title; or
                    ``(C) any funding provided under this title to a 
                recipient or State agency or entity described in 
                subparagraph (A) or (B) has been diverted from the 
                purposes for which such funding was provided.
            ``(2) Actions.--On making the finding described in 
        paragraph (1), the Chairperson shall immediately notify the 
        direct recipient, or State agency or entity, that received the 
        funding at issue that--
                    ``(A) no further funding will be provided under 
                this title to such recipient or State agency or entity 
                until there is no longer any default or failure to 
                comply or the diversion is corrected; or
                    ``(B) if compliance or correction is impossible, 
                until such recipient or State agency or entity repays 
                or arranges the repayment of the Federal funds that 
                were improperly diverted or expended.
    ``(c) Recapture.--
            ``(1) In general.--A recipient of funding under this title 
        shall pay the amount described in paragraph (2) to the 
        Endowment if the Chairperson finds that the recipient has 
        derived net program income in excess of the match required 
        under the terms of the agreement from the commercially 
        successful activities funded that exceeds the lesser of--
                    ``(A) $50,000; or
                    ``(B) twice the amount of the funding.
            ``(2) Amount.--At the discretion of the Chairperson, the 
        amount referred to in paragraph (1) is not less than \1/3\ and 
        not more than \1/2\ of the amount of the net program income 
        generated within 5 years after the end of the grant period, but 
        not more than the amount of the funding, unless the Chairperson 
        has reached an agreement with the grantee upon the award of a 
        grant that the amount referred to in paragraph (1) shall exceed 
        the amount of the grant.
    ``(d) Account.--Except as otherwise provided in this Act, the 
Treasurer of the United States shall deposit funds paid under 
subsection (c), or repaid under this Act, in a special interest bearing 
account to the credit of the Endowment.

``SEC. 310. AWARDS.

    ``(a) Jefferson Lecture in the Humanities Award.--The Chairperson 
may award annually the Jefferson Lecture in the Humanities Award to 1 
individual for distinguished intellectual achievement in the 
humanities. Each such award shall not exceed $10,000.
    ``(b) National Humanities Medal.--
            ``(1) In general.--The President may award the National 
        Humanities Medal to individuals or groups whose work--
                    ``(A) has expanded the understanding of citizens of 
                the United States in the area of humanities;
                    ``(B) has broadened such citizens engagement with 
                the humanities; or
                    ``(C) has helped preserve and expand the access of 
                such citizens to important resources in the humanities.
            ``(2) Number of medals.--Not more than 12 of such medals 
        may be awarded in any calendar year.
            ``(3) Ceremonies.--The presentation of the National 
        Humanities Medal shall be made by the President with such 
        ceremonies as the President may determine to be appropriate, 
        including attendance by appropriate Members of Congress.''.

SEC. 102. CONFORMING AMENDMENTS.

    Section 8G of the Inspector General Act of 1978 (5 U.S.C. App.) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``the National 
                Endowment for the Arts, the National Endowment for the 
                Humanities,'' and inserting ``the portion of the 
                National Foundation on the Arts and the Humanities 
                consisting of the National Endowment for the Arts and 
                the National Endowment for the Humanities,''; and
                    (B) in paragraph (4)--
                            (i) in subparagraph (A), by striking at the 
                        end ``and'';
                            (ii) in subparagraph (B), by inserting 
                        after the semicolon ``and''; and
                            (iii) by adding at the end the following:
                    ``(C) with respect to the National Endowment for 
                the Arts and the National Endowment for the Humanities, 
                the term means the Chairperson of the National 
                Endowment for the Arts with respect to matters relating 
                to the National Endowment for the Arts and the 
                Chairperson of the National Endowment for the 
                Humanities with respect to matters relating to the 
                Chairperson of the National Endowment for the 
                Humanities;'';
            (2) in subsection (c), by inserting before the period the 
        following: ``, except that the Inspector General for the 
        National Endowment for the Arts and the National Endowment for 
        the Humanities shall be jointly appointed by the Chairperson of 
        the National Endowment for the Arts and the Chairperson of the 
        National Endowment for the Humanities''; and
            (3) in the first sentence of subsection (d), by inserting 
        before the period the following: ``, except as provided in 
        section 103 of the National Foundation on the Arts and the 
        Humanities Act of 1965''.

               TITLE II--ARTS AND ARTIFACTS INDEMNITY ACT

SEC. 201. ARTS AND ARTIFACTS.

    The Arts and Artifacts Indemnity Act (20 U.S.C. 971 et seq.) is 
amended to read as follows:

``SECTION 1. SHORT TITLE.

    ``This Act may be cited as the `Arts and Artifacts Indemnity Act'.

``SEC. 2. INDEMNITY FOR EXHIBITIONS OF ARTS AND ARTIFACTS.

    ``The Federal Council on the Arts and Humanities (referred to in 
this Act as the `Council') established under section 8, may enter into 
agreements to indemnify against loss or damage such items as may be 
eligible for such indemnity agreements under section 3--
            ``(1) in accordance with the provisions of this Act; and
            ``(2) on such terms and conditions as the Council shall 
        prescribe, by regulation, in order to achieve the objectives of 
        this Act and, consistent with such objectives, to protect the 
        financial interest of the United States.

``SEC. 3. ELIGIBLE ITEMS.

    ``(a) Types of Items.--The Council may enter into an indemnity 
agreement under section 2 with respect to items--
            ``(1) that are--
                    ``(A) works of art, including tapestries, 
                paintings, sculpture, folk art, and graphics and craft 
                arts;
                    ``(B) manuscripts, rare documents, books, or other 
                printed or published materials;
                    ``(C) other artifacts or objects; or
                    ``(D) photographs, motion pictures, or audio and 
                video tape;
            ``(2) that are of educational, cultural, historical, or 
        scientific value; and
            ``(3) the exhibition of which is certified (where 
        appropriate) by the Secretary of State or the designee of the 
        Secretary of State as being in the national interest.
    ``(b) Items on Exhibition.--
            ``(1) Scope.--An indemnity agreement made under this Act 
        shall cover eligible items while on exhibition, generally when 
        the items are part of an exchange of exhibitions. An item 
        described in subsection (a) that is part of an exhibition that 
        originates either in the United States or outside the United 
        States and that is touring the United States shall be 
        considered to be an eligible item.
            ``(2) Definition.--For purposes of this subsection, the 
        term `on exhibition' includes the period of time beginning on 
        the date the eligible items leave the premises of the lender or 
        place designated by the lender and ending on the date such 
        items are returned to the premises of the lender or place 
        designated by the lender.

``SEC. 4. APPLICATIONS.

    ``(a) In General.--Any person, nonprofit agency, institution, or 
government desiring to enter into an indemnity agreement for eligible 
items under this Act shall submit an application to the Council at such 
time, in such manner and in accordance with such procedures, as the 
Council shall, by regulation, prescribe.
    ``(b) Contents.--An application submitted under subsection (a) 
shall--
            ``(1) describe each item to be covered by the agreement 
        (including an estimated value of such item);
            ``(2) show evidence that the item is an item described in 
        section 3(a); and
            ``(3) set forth policies, procedures, techniques, and 
        methods with respect to preparation for, and conduct of, 
        exhibition of the item, and any transportation related to such 
        item.
    ``(c) Approval.--On receipt of an application under this section, 
the Council shall review the application as described in section 5 and, 
if the Council agrees with the estimated value described in the 
application and if such application conforms with the requirements of 
this Act, approve the application and enter into an indemnity agreement 
with the applicant under section 2. On such approval, the agreement 
shall constitute a contract between the Council and the applicant 
pledging the full faith and credit of the United States to pay any 
amount for which the Council becomes liable under such agreement. The 
Council, for such purpose, is authorized to pledge the full faith and 
credit of the United States.

``SEC. 5. INDEMNITY AGREEMENT.

    ``(a) Review.--On receipt of an application meeting the 
requirements of subsections (a) and (b) of section 4, the Council shall 
review the estimated value of the items for which coverage by an 
indemnity agreement is sought. If the Council agrees with such 
estimated value, for the purposes of this Act, the Council shall, after 
approval of the application as provided for in subsection (c) of 
section 4, make an indemnity agreement.
    ``(b) Aggregate Amount of Loss or Damage.--The aggregate amount of 
loss or damage covered by indemnity agreements made under this Act 
shall not exceed $3,000,000,000, at any one time.
    ``(c) Individual Amount of Loss or Damage.--No indemnity agreement 
for a single exhibition shall cover loss or damage in excess of 
$300,000,000.
    ``(d) Extent of Coverage.--If the estimated value of the items 
covered by an indemnity agreement for a single exhibition is--
            ``(1) $2,000,000 or less, then coverage under this Act 
        shall extend only to loss or damage in excess of the first 
        $15,000 of loss or damage to the items covered;
            ``(2) more than $2,000,000 but less than $10,000,000, then 
        coverage under this Act shall extend only to loss or damage in 
        excess of the first $25,000 of loss or damage to the items 
        covered;
            ``(3) not less than $10,000,000 but less than $125,000,000, 
        then coverage under this Act shall extend only to loss or 
        damage in excess of the first $50,000 of loss or damage to the 
        items covered;
            ``(4) not less than $125,000,000 but less than 
        $200,000,000, then coverage under this Act shall extend only to 
        loss or damage in excess of the first $100,000 of loss or 
        damage to the items covered; or
            ``(5) $200,000,000 or more, then coverage under this Act 
        shall extend only to loss or damage in excess of the first 
        $200,000 of loss or damage to the items covered.

``SEC. 6. REGULATIONS AND CERTIFICATION.

    ``(a) Regulations.--The Council shall prescribe regulations 
providing for prompt adjustment of valid claims for loss or damage to 
items that are covered by an agreement entered into pursuant to section 
2, including provision for arbitration of issues relating to the dollar 
value of damages involving less than total loss or destruction of such 
covered items.
    ``(b) Certification.--In the case of a claim of loss or damage with 
respect to an item that is covered by an agreement entered into 
pursuant to section 2, the Council shall certify the validity of the 
claim and the amount of the loss to the Speaker of the House of 
Representatives and the President pro tempore of the Senate.

``SEC. 7. REPORT.

    ``The Council shall prepare, and submit at the end of each fiscal 
year to the appropriate committees of Congress, a report containing 
information on--
            ``(1) all claims paid pursuant to this Act during such 
        year;
            ``(2) pending claims against the Council under this Act as 
        of the end of such year; and
            ``(3) the aggregate face value of contracts entered into by 
        the Council that are outstanding at the end of such year.

``SEC. 8. ESTABLISHMENT OF THE FEDERAL COUNCIL ON THE ARTS AND THE 
              HUMANITIES.

    ``(a) Establishment.--
            ``(1) In general.--There is established a Federal Council 
        on the Arts and the Humanities.
            ``(2) Status as an agency.--For the purposes of this Act, 
        the Council shall be an agency within the meaning of the 
        appropriate definitions of such term in title 5, United States 
        Code.
    ``(b) Membership.--
            ``(1) In general.--The Council shall be composed of the 
        Chairperson of the National Endowment for the Arts, the 
        Chairperson of the National Endowment for the Humanities, the 
        Director of the Institute of Museum and Library Services, the 
        Secretary of Education, the Secretary of the Smithsonian 
        Institution, the Director of the National Science Foundation, 
        the Librarian of Congress, the Director of the National Gallery 
        of Art, the Chairman of the Commission of Fine Arts, the 
        Archivist of the United States, the Commissioner, Public 
        Buildings Service, General Services Administration, the 
        Assistant Secretary for Aging, a member designated by the 
        Secretary of State, and a member designated by the Secretary of 
        the Interior, a member designated by the Chairman of the Senate 
        Commission on Art and Antiquities, and a member designated by 
        the Speaker of the House of Representatives.
            ``(2) Designation of presiding officer.-- The President 
        shall designate the presiding officer of the Council from among 
        the members.
            ``(3) Authority to change the membership.--The President is 
        authorized to change the membership of the Council as the 
        President deems necessary to meet changes in Federal programs 
        or executive branch organization.
    ``(c) Functions.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Council shall--
                    ``(A) carry out the functions of the Council 
                described in sections 1 through 7;
                    ``(B) promote coordination between the programs and 
                activities of the National Foundation on the Arts and 
                Humanities and related programs and activities of other 
                Federal agencies; and
                    ``(C) encourage an ongoing dialogue in support of 
                the arts and the humanities among Federal agencies.
            ``(2) Restrictions.--The following members of the Council 
        shall not carry out the functions described in paragraph 
        (1)(A):
                    ``(A) The Secretary of the Smithsonian Institution.
                    ``(B) The Director of the National Gallery of Art.
                    ``(C) The member of the Council designated by the 
                Chairman of the Senate Commission on Art and 
                Antiquities.
                    ``(D) The member of the Council designated by the 
                Speaker of the House of Representatives.
            ``(3) Limitation on use of employees.--No employee (other 
        than a member of the Council) of the Council may carry out the 
        activities described in subparagraphs (B) and (C) of paragraph 
        (1).

``SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated such sums as may be 
necessary--
            ``(1) to enable the Council to carry out the functions 
        (except the functions described in subparagraphs (B) and (C) of 
        section 8(c)(1)) of the Council under this Act; and
            ``(2) to pay claims certified pursuant to section 6(b).''.
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