II

105TH CONGRESS

1ST SESSION S. 1

To provide for safe and affordable schools.

IN THE SENATE OF THE UNITED STATES

JANUARY 21, 1997

Mr. COVERDELL (for himself, Mr. COATS, Mr. GREGG, Mr. LOTT, Mr. BOND,

Mr. ABRAHAM, Mr. ALLARD, Mr. ASHCROFT, Mr. CRAIG, Mr. DEWINE,

Mr. DOMENICI, Mr. FAIRCLOTH, Mr. GORTON, Mr. GRAMS, Mr. HAGEL,

Mr. HATCH, Mrs. HUTCHISON, Mr. HUTCHINSON, Mr. KYL, Mr.

MCCAIN, Mr. MCCONNELL, Mr. MURKOWSKI, Mr. NICKLES, Mr. SMITH

of New Hampshire, Mr. THURMOND, and Mr. WARNER) introduced the

following bill; which was read twice and referred to the Committee on Finance

A BILL

To provide for safe and affordable schools.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Safe and Affordable

5 Schools Act of 1997’’.

6 SEC. 2. FINDINGS AND PURPOSE.

7 (a) FINDINGS.—Congress finds that—
2

•S 1 IS

1 (1) in too many of our Nation’s elementary and

2 secondary schools the test confronting our Nation’s

3 children is survival, not learning;

4 (2) our Nation’s schools will not be restored to

5 excellence unless parents, States, and local commu6 nities take the lead; and

7 (3) the Federal Government’s role in education

8 is quite properly to encourage, not to mandate.

9 (b) PURPOSE.—The purpose of this Act is—

10 (1) to ensure that parents, local communities

11 and States have the primary role in educating our

12 Nation’s children;

13 (2) to restore excellence to our Nation’s schools;

14 (3) to give local communities and States maxi15 mum flexibility in administering Federal education

16 programs;

17 (4) to allow education reforms to be tailored to

18 the unique needs of local communities and States;

19 (5) to place the highest priority on providing

20 our Nation’s students with safe, drug-free learning

21 environments;

22 (6) to ensure that the choice of whether to at23 tend college is to the greatest extent possible the re24 sult of individual student desire and initiative, not

25 the result of economic circumstances that leave
3

•S 1 IS

1 young parents wondering how they can best provide

2 such an education in the face of staggering college

3 tuition costs;

4 (7) to focus resources on adult education, real5 izing that education often is a lifelong process; and

6 (8) to promote literacy by attacking our Na7 tion’s unacceptably high level of illiteracy.

8 TITLE I—SAFE AND DRUG-FREE

9 SCHOOLS INITIATIVE

10 Subtitle A—Student Opportunity

11 and Safety

12 SEC. 111. SHORT TITLE.

13 This subtitle may be cited as the ‘‘Student Oppor14 tunity and Safety Act’’.

15 SEC. 112. FINDINGS AND PURPOSE.

16 (a) FINDINGS.—The Congress finds as follows:

17 (1) Violence, crime, and illegal drug activity

18 have increased significantly in our Nation’s public

19 schools.

20 (2) It is estimated that 3,000,000 violent acts

21 or thefts occur in or near schools, and that one in

22 five public high school students carries a weapon.

23 (3) The incidence of violence, and criminal and

24 illegal drug activity within public elementary and
4

•S 1 IS

1 secondary schools threatens the school environment

2 and interferes with the learning process.

3 (4) 2,000,000 more children are using drugs in

4 1997 than were doing so in 1993. For the first time

5 in the 1990s, over half of our Nation’s graduating

6 high school seniors have experimented with drugs

7 and approximately 1 out of every 4 of the students

8 have used drugs in the past month.

9 (5) After 11 years of declining marijuana use

10 among children aged 12 to 17, such use doubled be11 tween 1992 and 1995. The number of 8th graders

12 who have used marijuana in the past month has

13 more than tripled since 1991.

14 (6) More of our Nation’s school children are be15 coming involved with hard core drugs at earlier ages,

16 as use of heroin and cocaine by 8th graders has

17 more than doubled since 1991.

18 (7) Students have a right to be safe and secure

19 in their persons while attending school.

20 (8) Low-income families whose children attend

21 high poverty public schools generally lack the finan22 cial ability to enroll their children in private schools

23 or the opportunity to choose to enroll their children

24 in public schools less impacted by poverty, illegal
5

•S 1 IS

1 drugs, or violence, while such alternatives are typi2 cally available to more affluent families.

3 (9) Numerous research studies, including the

4 1993 National Assessment of the Chapter 1 Pro5 gram, have concluded that students attending high

6 poverty public schools have much lower levels of aca7 demic achievement than other students, regardless of

8 the income level of the family of such students.

9 (10) Federally supported efforts to meet the

10 educational needs of disadvantaged children attend11 ing high poverty schools have had little, if any, suc12 cess in improving student achievement, especially in

13 the highest poverty schools and school districts.

14 (11) Evidence obtained from systematic evalua15 tions of school choice demonstration projects that in16 volve public and private, including sectarian, schools

17 will make an important contribution toward resolv18 ing debates over the most effective means of improv19 ing the academic achievement of disadvantaged chil20 dren.

21 (12) It is increasingly important that children

22 from families of all income levels meet high stand23 ards of academic achievement, in order to exercise

24 the responsibilities of citizenship and to compete in

25 globally competitive markets.
6

•S 1 IS

1 (b) PURPOSE.—It is the purpose of this subtitle—

2 (1) to provide children from low-income families

3 who attend unsafe schools with the option of attend4 ing safer schools;

5 (2) to improve schools and academic programs

6 by providing certain low-income parents with in7 creased consumer power and dollars to choose safer

8 and drug-free schools and programs that such par9 ents determine best fit the needs of their children;

10 (3) to engage more fully certain low-income

11 parents in their children’s schooling;

12 (4) through families, to provide at the school

13 site new dollars that teachers and principals may use

14 to help certain children achieve high educational

15 standards; and

16 (5) to demonstrate, through a discretionary

17 demonstration grant program, the effects of projects

18 that provide certain low-income families with more

19 of the same choices regarding all schools, including

20 public, private, or sectarian schools, that wealthier

21 families have.

22 SEC. 113. DEFINITIONS.

23 As used in this subtitle—
7

•S 1 IS

1 (1) the term ‘‘choice school’’ means any public

2 or private school, including a private sectarian

3 school or a public charter school, that—

4 (A) is involved in a demonstration project

5 assisted under this subtitle; and

6 (B) is not an unsafe school;

7 (2) the term ‘‘eligible child’’ means a child in

8 any of the grades 1 through 12—

9 (A) whose family income does not exceed

10 185 percent of the poverty line; and

11 (B) who would normally be assigned to at12 tend an unsafe school in the absence of—

13 (i) a demonstration project under this

14 subtitle; or

15 (ii) participation, prior to the date of

16 enactment of this Act, in a school choice

17 program;

18 (3) the term ‘‘eligible entity’’ means a public

19 agency, institution, or organization, such as a State,

20 a State or local educational agency, a consortium of

21 public agencies, or a consortium of public and pri22 vate nonprofit organizations, that can demonstrate,

23 to the satisfaction of the Secretary, its ability to—

24 (A) receive, disburse, and account for Fed25 eral funds; and
8

•S 1 IS

1 (B) carry out the activities described in its

2 application under this subtitle;

3 (4) the term ‘‘evaluating agency’’ means any

4 academic institution, consortium of professionals, or

5 private or nonprofit organization, with demonstrated

6 experience in conducting evaluations, that is not an

7 agency or instrumentality of the Federal Govern8 ment;

9 (5) the term ‘‘local educational agency’’ has the

10 same meaning given such term in section 14101 of

11 the Elementary and Secondary Education Act of

12 1965 (20 U.S.C. 8801);

13 (6) the term ‘‘parent’’ includes a legal guardian

14 or other individual acting in loco parentis;

15 (7) the term ‘‘poverty line’’ means the poverty

16 line (as defined by the Office of Management and

17 Budget, and revised annually in accordance with sec18 tion 673(2) of the Community Services Block Grant

19 Act (42 U.S.C. 9902(2))) applicable to a family of

20 the size involved;

21 (8) the term ‘‘school’’ means a school that pro22 vides elementary education or secondary education

23 (through grade 12), as determined under State law;

24 (9) the term ‘‘Secretary’’ means the Secretary

25 of Education;
9

•S 1 IS

1 (10) the term ‘‘State’’ means each of the 50

2 States of the United States, the District of Colum3 bia, and the Commonwealth of Puerto Rico; and

4 (11) the term ‘‘unsafe school’’ means a school

5 that has serious crime, violence, illegal drug, and

6 discipline problems, as indicated by conditions that

7 may include high rates of—

8 (A) expulsions and suspensions of students

9 from school;

10 (B) referrals of students to alternative

11 schools for disciplinary reasons, to special pro12 grams or schools for delinquent youth, or to ju13 venile court;

14 (C) victimization of students or teachers by

15 criminal acts, including robbery, assault and

16 homicide;

17 (D) enrolled students who are under court

18 supervision for past criminal behavior;

19 (E) possession, use, sale or distribution of

20 illegal drugs;

21 (F) enrolled students who are attending

22 school while under the influence of illegal drugs;

23 (G) possession or use of guns or other

24 weapons;

25 (H) participation in youth gangs; or
10

•S 1 IS

1 (I) crimes against property, such as theft

2 or vandalism.

3 SEC. 114. AUTHORIZATION OF APPROPRIATIONS.

4 There are authorized to be appropriated $50,000,000

5 for the fiscal year 1998, and such sums as may be nec6 essary for each of the fiscal years 1999 through 2002, to

7 carry out this subtitle.

8 SEC. 115. PROGRAM AUTHORIZED.

9 (a) RESERVATION.—From the amount appropriated

10 pursuant to the authority of section 114 in any fiscal year,

11 the Secretary shall reserve and make available to the

12 Comptroller General of the United States 2 percent for

13 evaluation of programs assisted under this subtitle in ac14 cordance with section 121.

15 (b) GRANTS.—

16 (1) IN GENERAL.—From the amount appro17 priated pursuant to the authority of section 114 and

18 not reserved under subsection (a) for any fiscal year,

19 the Secretary shall award grants to eligible entities

20 to enable such entities to carry out at least 20, but

21 not more than 30, demonstration projects under

22 which low-income parents receive education certifi23 cates for the costs of enrolling their eligible children

24 in a choice school.
11

•S 1 IS

1 (2) AMOUNT.—The Secretary shall award

2 grants under paragraph (1) for fiscal year 1998 so

3 that—

4 (A) not more than 2 grants are awarded in

5 amounts of $5,000,000 or less; and

6 (B) grants not described in subparagraph

7 (A) are awarded in amounts of $3,000,000 or

8 less.

9 (3) CONTINUING ELIGIBILITY.—The Secretary

10 shall continue a demonstration project under this

11 subtitle by awarding a grant under paragraph (1) to

12 an eligible entity that received such a grant for a fis13 cal year preceding the fiscal year for which the de14 termination is made, if the Secretary determines

15 that such eligible entity was in compliance with this

16 subtitle for such preceding fiscal year.

17 (4) PRIORITY.—The Secretary shall give prior18 ity to awarding a grant under paragraph (1) to an

19 eligible entity that—

20 (A) is conducting a school choice program,

21 involving public or private schools, on the date

22 of enactment of this Act; and

23 (B) operates a school choice program, in24 volving public and private schools, that is au25 thorized by Federal law.
12

•S 1 IS

1 (c) USE OF GRANTS.—Grants awarded under sub2 section (b) shall be used to pay the costs of—

3 (1) providing education certificates to low-in4 come parents to enable such parents to pay the tui5 tion, the fees, the allowable costs of transportation,

6 if any, and the costs of complying with section

7 119(a)(1), if any, for their eligible children to attend

8 a choice school; and

9 (2) administration of the demonstration project,

10 which shall not exceed 15 percent of the amount re11 ceived in the first fiscal year for which the eligible

12 entity provides education certificates under this sub13 title or 10 percent in any subsequent year, includ14 ing—

15 (A) seeking the involvement of choice

16 schools in the demonstration project;

17 (B) providing information about the dem18 onstration project, and the schools involved in

19 the demonstration project, to parents of eligible

20 children;

21 (C) making determinations of eligibility for

22 participation in the demonstration project for

23 eligible children;

24 (D) selecting students to participate in the

25 demonstration project;
13

•S 1 IS

1 (E) determining the amount of, and issu2 ing, education certificates;

3 (F) compiling and maintaining such finan4 cial and programmatic records as the Secretary

5 may prescribe; and

6 (G) collecting such information about the

7 effects of the demonstration project as the eval8 uating agency may need to conduct the evalua9 tion described in section 121.

10 (d) SPECIAL RULE.—Any school participating in the

11 demonstration program under this subtitle shall comply

12 with title VI of the Civil Rights Act of 1964 (42 U.S.C.

13 2000d et seq.) and not discriminate on the basis of race,

14 color, or national origin.

15 (e) SUPPLEMENT NOT SUPPLANT.—Each eligible en16 tity receiving funds under this subtitle shall use such

17 funds to supplement and not supplant the amount of

18 funds that would, in the absence of such Federal funds,

19 be made available from other sources to carry out the ac20 tivities assisted under this subtitle.

21 (f) SUPPLEMENTATION OF FUNDING.—Each eligible

22 entity receiving funds under this section is encouraged to

23 supplement the funding received under this subtitle with

24 funding received from State, local, or private sources.

25 (g) EDUCATION CERTIFICATES.—
14

•S 1 IS

1 (1) ASSISTANCE TO FAMILIES, NOT CHOICE

2 SCHOOLS.—Education certificates provided under

3 this subtitle shall be considered to be aid to families,

4 not choice schools. A parent’s use of an education

5 certificate at a choice school under this subtitle shall

6 not be construed to be Federal financial aid or as7 sistance to that choice school.

8 (2) TAXES AND DETERMINATIONS OF ELIGI9 BILITY FOR OTHER FEDERAL PROGRAMS.—Edu10 cation certificates provided under this subtitle shall

11 not be considered as income to an eligible child or

12 the parent of such eligible child for Federal, State,

13 or local tax purposes or for determining eligibility

14 for any other Federal program.

15 SEC. 116. AUTHORIZED PROJECTS; PRIORITY.

16 (a) AUTHORIZED PROJECTS.—The Secretary may

17 award a grant under this subtitle only for a demonstration

18 project that—

19 (1) involves at least one local educational agen20 cy that—

21 (A) receives funds under section 1124A of

22 the Elementary and Secondary Education Act

23 of 1965 (20 U.S.C. 6334); and

24 (B) is among the 20 percent of local edu25 cational agencies receiving funds under section
15

•S 1 IS

1 1124A of such Act (20 U.S.C. 6334) in the

2 State and having the highest number or great3 est percentage of children described in section

4 1124(c) of such Act (20 U.S.C. 6333(c)); and

5 (2) includes the involvement of a sufficient

6 number of public and private choice schools, includ7 ing sectarian schools, to allow for a valid demonstra8 tion project.

9 (b) PRIORITY.—In awarding grants under this sub10 title, the Secretary shall give priority to demonstration

11 projects—

12 (1) in which choice schools offer an enrollment

13 opportunity to the broadest range of eligible chil14 dren;

15 (2) that involve diverse types of choice schools;

16 and

17 (3) that will contribute to the geographic diver18 sity of demonstration projects assisted under this

19 subtitle, including awarding grants for demonstra20 tion projects in States that are primarily rural and

21 awarding grants for demonstration projects in States

22 that are primarily urban.

23 SEC. 117. APPLICATIONS.

24 (a) IN GENERAL.—Any eligible entity that wishes to

25 receive a grant under this subtitle shall submit an applica-
16

•S 1 IS

1 tion to the Secretary at such time and in such manner

2 as the Secretary may prescribe.

3 (b) CONTENTS.—Each application described in sub4 section (a) shall contain—

5 (1) information demonstrating the eligibility for

6 participation in the demonstration program of the

7 eligible entity;

8 (2) a description of how the eligible entity will

9 determine a school to be a unsafe school in accord10 ance with section 113(11);

11 (3) with respect to choice schools—

12 (A) a description of the types of potential

13 choice schools that will be involved in the dem14 onstration project;

15 (B)(i) a description of the procedures used

16 to encourage public and private schools to be

17 involved in the demonstration project; and

18 (ii) a description of how the eligible entity

19 will annually determine the number of spaces

20 available for eligible children in each choice

21 school;

22 (C) an assurance that each choice school

23 will not impose higher standards for admission

24 or participation in its programs and activities

25 for eligible children provided education certifi-
17

•S 1 IS

1 cates under this subtitle than the choice school

2 does for other children;

3 (D) an assurance that the eligible entity

4 will terminate the involvement of any choice

5 school that fails to comply with the conditions

6 of its involvement in the demonstration project;

7 and

8 (E) a description of the extent to which

9 choice schools will accept education certificates

10 under this subtitle as full or partial payment

11 for tuition and fees;

12 (4) with respect to the participation in the dem13 onstration project of eligible children—

14 (A) a description of the procedures to be

15 used to make a determination of eligibility for

16 participation in the demonstration project for

17 an eligible child;

18 (B) a description of the procedures to be

19 used to ensure that, in selecting eligible chil20 dren to participate in the demonstration

21 project, the eligible entity will—

22 (i) apply the same criteria to both

23 public and private school eligible children;

24 and
18

•S 1 IS

1 (ii) give priority to eligible children

2 from the lowest income families;

3 (C) a description of the procedures to be

4 used to ensure maximum choice of schools for

5 participating eligible children; and

6 (D) a description of the procedures to be

7 used to ensure compliance with section

8 119(a)(1), which may include—

9 (i) the direct provision of services by

10 a local educational agency; and

11 (ii) arrangements made by a local

12 educational agency with other service pro13 viders;

14 (5) with respect to the operation of the dem15 onstration project—

16 (A) a description of the procedures to be

17 used for the issuance and redemption of edu18 cation certificates under this subtitle;

19 (B) a description of the procedures by

20 which a choice school will make a pro rata re21 fund of the education certificate under this sub22 title for any participating eligible child who

23 withdraws from the school for any reason, be24 fore completing 75 percent of the school attend-
19

•S 1 IS

1 ance period for which the education certificate

2 was issued;

3 (C) a description of the procedures to be

4 used to provide the parental notification de5 scribed in section 120;

6 (D) an assurance that the eligible entity

7 will place all funds received under this subtitle

8 into a separate account, and that no other

9 funds will be placed in such account;

10 (E) an assurance that the eligible entity

11 will cooperate with the Comptroller General of

12 the United States and the evaluating agency in

13 carrying out the evaluations described in section

14 121; and

15 (F) an assurance that the eligible entity

16 will—

17 (i) maintain such records as the Sec18 retary may require; and

19 (ii) comply with reasonable requests

20 from the Secretary for information; and

21 (6) such other assurances and information as

22 the Secretary may require.

23 SEC. 118. EDUCATION CERTIFICATES.

24 (a) EDUCATION CERTIFICATES.—
20

•S 1 IS

1 (1) AMOUNT.—The amount of an eligible

2 child’s education certificate under this subtitle shall

3 be determined by the eligible entity, but shall be an

4 amount that provides to the recipient of the edu5 cation certificate the maximum degree of choice in

6 selecting the choice school the eligible child will at7 tend.

8 (2) CONSIDERATIONS.—

9 (A) IN GENERAL.—Subject to such regula10 tions as the Secretary shall prescribe, in deter11 mining the amount of an education certificate

12 under this subtitle an eligible entity shall con13 sider—

14 (i) the additional reasonable costs of

15 transportation directly attributable to the

16 eligible child’s participation in the dem17 onstration project; and

18 (ii) the cost of complying with section

19 119(a)(1).

20 (B) SCHOOLS CHARGING TUITION.—If an

21 eligible child participating in a demonstration

22 project under this subtitle was attending a pub23 lic or private school that charged tuition for the

24 year preceding the first year of such participa25 tion, then in determining the amount of an edu-
21

•S 1 IS

1 cation certificate for such eligible child under

2 this subtitle the eligible entity shall consider—

3 (i) the tuition charged by such school

4 for such eligible child in such preceding

5 year; and

6 (ii) the amount of the education cer7 tificates under this subtitle that are pro8 vided to other eligible children.

9 (3) SPECIAL RULE.—An eligible entity may pro10 vide an education certificate under this subtitle to

11 the parent of an eligible child who chooses to attend

12 a school that does not charge tuition or fees, to pay

13 the additional reasonable costs of transportation di14 rectly attributable to the eligible child’s participation

15 in the demonstration project or the cost of comply16 ing with section 119(a)(1).

17 (b) ADJUSTMENT.—The amount of the education cer18 tificate for a fiscal year may be adjusted in the second

19 and third years of an eligible child’s participation in a

20 demonstration project under this subtitle to reflect any in21 crease or decrease in the tuition, fees, or transportation

22 costs directly attributable to that eligible child’s continued

23 attendance at a choice school, but shall not be increased

24 for this purpose by more than 10 percent of the amount

25 of the education certificate for the fiscal year preceding
22

•S 1 IS

1 the fiscal year for which the determination is made. The

2 amount of the education certificate may also be adjusted

3 in any fiscal year to comply with section 119(a)(1).

4 (c) MAXIMUM AMOUNT.—Notwithstanding any other

5 provision of this section, the amount of an eligible child’s

6 education certificate shall not exceed the per pupil expend7 iture for elementary or secondary education, as appro8 priate, by the local educational agency in which the public

9 school to which the eligible child would normally be as10 signed is located for the fiscal year preceding the fiscal

11 year for which the determination is made.

12 SEC. 119. EFFECT ON OTHER PROGRAMS.

13 (a) EFFECT ON OTHER PROGRAMS.—

14 (1) IN GENERAL.—An eligible child participat15 ing in a demonstration project under this subtitle,

16 who, in the absence of such a demonstration project,

17 would have received services under part A of title I

18 of the Elementary and Secondary Education Act of

19 1965 (20 U.S.C. 6311 et seq.) shall be provided

20 such services.

21 (2) PART B OF THE INDIVIDUALS WITH DIS22 ABILITIES EDUCATION ACT.—Nothing in this sub23 title shall be construed to affect the requirements of

24 part B of the Individuals with Disabilities Education

25 Act (20 U.S.C. 1411 et seq.).
23

•S 1 IS

1 (b) COUNTING OF ELIGIBLE CHILDREN.—Notwith2 standing any other provision of law, any local educational

3 agency participating in a demonstration project under this

4 subtitle may count eligible children who, in the absence

5 of such a demonstration project, would attend the schools

6 of such agency, for purposes of receiving funds under any

7 program administered by the Secretary.

8 (c) SECTARIAN INSTITUTIONS.—Nothing in this sub9 title shall be construed to supersede or modify any provi10 sion of a State constitution that prohibits the expenditure

11 of public funds in or by sectarian institutions.

12 SEC. 120. PARENTAL NOTIFICATION.

13 Each eligible entity receiving a grant under this sub14 title shall provide timely notice of the demonstration

15 project to parents of eligible children residing in the area

16 to be served by the demonstration project. At a minimum,

17 such notice shall—

18 (1) describe the demonstration project;

19 (2) describe the eligibility requirements for par20 ticipation in the demonstration project;

21 (3) describe the information needed to make a

22 determination of eligibility for participation in the

23 demonstration project for an eligible child;

24 (4) describe the selection procedures to be used

25 if the number of eligible children seeking to partici-
24

•S 1 IS

1 pate in the demonstration project exceeds the num2 ber that can be accommodated in the demonstration

3 project;

4 (5) provide information about each choice

5 school, including information about any admission

6 requirements or criteria for each choice school par7 ticipating in the demonstration project; and

8 (6) include the schedule for parents to apply for

9 their eligible children to participate in the dem10 onstration project.

11 SEC. 121. EVALUATION.

12 (a) ANNUAL EVALUATION.—

13 (1) CONTRACT.—The Comptroller General of

14 the United States shall enter into a contract, with

15 an evaluating agency that has demonstrated experi16 ence in conducting evaluations, for the conduct of an

17 ongoing rigorous evaluation of the demonstration

18 program under this subtitle.

19 (2) ANNUAL EVALUATION REQUIREMENT.—The

20 contract described in paragraph (1) shall require the

21 evaluating agency entering into such contract to an22 nually evaluate each demonstration project under

23 this subtitle in accordance with the evaluation cri24 teria described in subsection (b).
25

•S 1 IS

1 (3) TRANSMISSION.—The contract described in

2 paragraph (1) shall require the evaluating agency

3 entering into such contract to transmit to the Comp4 troller General of the United States—

5 (A) the findings of each annual evaluation

6 under paragraph (1); and

7 (B) a copy of each report received pursu8 ant to section 122(a) for the applicable year.

9 (b) EVALUATION CRITERIA.—The Comptroller Gen10 eral of the United States, in consultation with the Sec11 retary, shall establish minimum criteria for evaluating the

12 demonstration program under this subtitle. Such criteria

13 shall provide for—

14 (1) a description of the implementation of each

15 demonstration project under this subtitle and the

16 demonstration project’s effects on all participants,

17 schools, and communities in the demonstration

18 project area, with particular attention given to the

19 effect of parent participation in the life of the school

20 and the level of parental satisfaction with the dem21 onstration program; and

22 (2) a comparison of the educational achieve23 ment of, and the incidences of violence and drug ac24 tivity related to, all students in the demonstration

25 project area, including a comparison of similar—
26

•S 1 IS

1 (A) students receiving education certifi2 cates under this subtitle; and

3 (B) students not receiving education cer4 tificates under this subtitle.

5 SEC. 122. REPORTS.

6 (a) REPORT BY GRANT RECIPIENT.—Each eligible

7 entity receiving a grant under this subtitle shall submit

8 to the evaluating agency entering into the contract under

9 section 121(a)(1) an annual report regarding the dem10 onstration project under this subtitle. Each such report

11 shall be submitted at such time, in such manner, and ac12 companied by such information, as such evaluating agency

13 may require.

14 (b) REPORTS BY COMPTROLLER GENERAL.—

15 (1) ANNUAL REPORTS.—The Comptroller Gen16 eral of the United States shall report annually to the

17 Congress on the findings of the annual evaluation

18 under section 121(a)(2) of each demonstration

19 project under this subtitle. Each such report shall

20 contain a copy of—

21 (A) the annual evaluation under section

22 121(a)(2) of each demonstration project under

23 this subtitle; and

24 (B) each report received under subsection

25 (a) for the applicable year.
27

•S 1 IS

1 (2) FINAL REPORT.—The Comptroller General

2 shall submit a final report to the Congress within 6

3 months after the conclusion of the demonstration

4 program under this subtitle that summarizes the

5 findings of the annual evaluations conducted pursu6 ant to section 121(a)(2).

7 Subtitle B—Common Sense School

8 Safety

9 SEC. 141. SHORT TITLE.

10 This subtitle may be cited as the ‘‘Common Sense

11 School Safety Act’’.

12 CHAPTER I—PUPIL SAFETY AND FAMILY

13 CHOICE

14 SEC. 151. PUPIL SAFETY AND FAMILY SCHOOL CHOICE.

15 Subpart 1 of part A of title I of the Elementary and

16 Secondary Education Act of 1965 (20 U.S.C. 6311 et

17 seq.) is amended by inserting after section 1115A of such

18 Act (20 U.S.C. 6316) the following:

19 ‘‘SEC. 1115B. PUPIL SAFETY AND FAMILY SCHOOL CHOICE.

20 ‘‘(a) IN GENERAL.—If a student is eligible to be

21 served under section 1115(b), or attends a school eligible

22 for a schoolwide program under section 1114, and be23 comes a victim of a violent criminal offense while in or

24 on the grounds of a public elementary school or secondary

25 school that the student attends and that receives assist-
28

•S 1 IS

1 ance under this part, then the local educational agency

2 may use funds provided under this part to pay the supple3 mentary costs for such student to attend another school.

4 The agency may use the funds to pay for the supple5 mentary costs of such student to attend any other public

6 or private elementary school or secondary school, including

7 a sectarian school, in the same State as the school where

8 the criminal offense occurred, that is selected by the stu9 dent’s parent. The State educational agency shall deter10 mine what actions constitute a violent criminal offense for

11 purposes of this section.

12 ‘‘(b) SUPPLEMENTARY COSTS.—The supplementary

13 costs referred to in subsection (a) shall not exceed—

14 ‘‘(1) in the case of a student for whom funds

15 under this section are used to enable the student to

16 attend a public elementary school or secondary

17 school served by a local educational agency that also

18 serves the school where the violent criminal offense

19 occurred, the costs of supplementary educational

20 services and activities described in section 1114(b)

21 or 1115(c) that are provided to the student;

22 ‘‘(2) in the case of a student for whom funds

23 under this section are used to enable the student to

24 attend a public elementary school or secondary

25 school served by a local educational agency that does
29

•S 1 IS

1 not serve the school where the violent criminal of2 fense occurred but is located in the same State—

3 ‘‘(A) the costs of supplementary edu4 cational services and activities described in sec5 tion 1114(b) or 1115(c) that are provided to

6 the student; and

7 ‘‘(B) the reasonable costs of transportation

8 for the student to attend the school selected by

9 the student’s parent; and

10 ‘‘(3) in the case of a student for whom funds

11 under this section are used to enable the student to

12 attend a private elementary school or secondary

13 school, including a sectarian school, the costs of tui14 tion, required fees, and the reasonable costs of such

15 transportation.

16 ‘‘(c) CONSTRUCTION.—Nothing in this Act or any

17 other Federal law shall be construed to prevent a parent

18 assisted under this section from selecting the public or pri19 vate elementary school or secondary school that a child

20 of the parent will attend within the State.

21 ‘‘(d) CONSIDERATION OF ASSISTANCE.—Assistance

22 used under this section to pay the costs for a student to

23 attend a private school shall not be considered to be Fed24 eral aid to the school, and the Federal Government shall

25 have no authority to influence or regulate the operations
30

•S 1 IS

1 of a private school as a result of assistance received under

2 this section.

3 ‘‘(e) CONTINUING ELIGIBILITY.—A student assisted

4 under this section shall remain eligible to continue receiv5 ing assistance under this section for at least 3 academic

6 years without regard to whether the student is eligible for

7 assistance under section 1114 or 1115(b).

8 ‘‘(f) STATE LAW.—All actions undertaken under this

9 section shall be undertaken in accordance with State law

10 and may be undertaken only to the extent such actions

11 are permitted under State law.

12 ‘‘(g) TUITION CHARGES.—Assistance under this sec13 tion may not be used to pay tuition or required fees at

14 a private elementary school or secondary school in an

15 amount that is greater than the tuition and required fees

16 paid by students not assisted under this section at such

17 school.

18 ‘‘(h) SPECIAL RULE.—Any school receiving assist19 ance provided under this section shall comply with title

20 VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et

21 seq.) and not discriminate on the basis of race, color, or

22 national origin.

23 ‘‘(i) ASSISTANCE; TAXES AND OTHER FEDERAL PRO24 GRAMS.—
31

•S 1 IS

1 ‘‘(1) ASSISTANCE TO FAMILIES, NOT

2 SCHOOLS.—Assistance provided under this section

3 shall be considered to be aid to families, not schools.

4 Use of such assistance at a school shall not be con5 strued to be Federal financial aid or assistance to

6 that school.

7 ‘‘(2) TAXES AND DETERMINATIONS OF ELIGI8 BILITY FOR OTHER FEDERAL PROGRAMS.—Assist9 ance provided under this section to a student shall

10 not be considered to be income of the student or the

11 parent of such student for Federal, State, or local

12 tax purposes or for determining eligibility for any

13 other Federal program.

14 ‘‘(j) PART B OF THE INDIVIDUALS WITH DISABIL15 ITIES EDUCATION ACT.—Nothing in this section shall be

16 construed to affect the requirements of part B of the Indi17 viduals with Disabilities Education Act (20 U.S.C. 1411

18 et seq.).

19 ‘‘(k) SECTARIAN INSTITUTIONS.—Nothing in this

20 section shall be construed to supersede or modify any pro21 vision of a State constitution that prohibits the expendi22 ture of public funds in or by sectarian institutions.

23 ‘‘(l) MAXIMUM AMOUNT.—Notwithstanding any

24 other provision of this section, the amount of assistance

25 provided under this part for a student shall not exceed
32

•S 1 IS

1 the per pupil expenditure for elementary or secondary edu2 cation, as appropriate, by the local educational agency

3 that serves the school where the criminal offense occurred

4 for the fiscal year preceding the fiscal year for which the

5 determination is made.’’.

6 SEC. 152. TRANSFER OF REVENUES.

7 (a) IN GENERAL.—Notwithstanding any other provi8 sion of Federal law, a State, a State educational agency,

9 or a local educational agency may transfer any non-Fed10 eral public funds associated with the education of a stu11 dent who is a victim of a violent criminal offense while

12 in or on the grounds of a public elementary school or sec13 ondary school served by a local educational agency to an14 other local educational agency or to a private elementary

15 school or secondary school, including a sectarian school.

16 (b) DEFINITIONS.—For the purpose of subsection

17 (a), the terms ‘‘elementary school’’, ‘‘secondary school’’,

18 ‘‘local educational agency’’, and ‘‘State educational agen19 cy’’ have the meanings given such terms in section 14101

20 of the Elementary and Secondary Education Act of 1965

21 (20 U.S.C. 8801).
33

•S 1 IS

1 CHAPTER II—VICTIM ASSISTANCE

2 PROGRAMS

3 SEC. 161. AMENDMENTS TO VICTIMS OF CRIME ACT OF

4 1984.

5 (a) VICTIM COMPENSATION.—Section 1403 of the

6 Victims of Crime Act of 1984 (42 U.S.C. 10602) is

7 amended by adding at the end the following:

8 ‘‘(f) VICTIMS OF SCHOOL VIOLENCE.—Notwithstand9 ing any other provision of law, an eligible crime victim

10 compensation program may expend funds granted under

11 this section to offer compensation to elementary and sec12 ondary school students who are victims of elementary and

13 secondary school violence (as school violence is defined

14 under applicable State law).’’.

15 (b) VICTIM AND WITNESS ASSISTANCE.—Section

16 1404(c) of the Victims of Crime Act of 1984 (42 U.S.C.

17 10603(c)) is amended by adding at the end the following:

18 ‘‘(4) ASSISTANCE FOR VICTIMS OF AND WIT19 NESSES TO SCHOOL VIOLENCE.—Notwithstanding

20 any other provision of law, the Director may make

21 a grant under this section for a demonstration

22 project or for training and technical assistance serv23 ices to a program that assists local educational agen24 cies (as local educational agency is defined in section

25 14101 of the Elementary and Secondary Education
34

•S 1 IS

1 Act of 1965 (20 U.S.C. 8801)) in developing, estab2 lishing, and operating programs that are designed to

3 protect victims of and witnesses to incidents of ele4 mentary and secondary school violence (as school vi5 olence is defined under applicable State law), includ6 ing programs designed to protect witnesses testifying

7 in school disciplinary proceedings.’’.

8 CHAPTER III—INNOVATIVE PROGRAMS TO

9 IMPROVE UNSAFE SCHOOLS

10 SEC. 171. FINDINGS AND PURPOSE.

11 (a) FINDINGS.—Congress finds that—

12 (1) the continued presence in schools of violent

13 students who are a thereat to both teachers and

14 other students is incompatible with a safe learning

15 environment;

16 (2) unsafe school environments place students

17 who are already at risk of school failure for other

18 reasons in further jeopardy;

19 (3) recently, over one-fourth of high school stu20 dents surveyed reported being threatened at school;

21 (4) 2,000,000 more children are using drugs in

22 1997 than were doing so a few short years prior to

23 1997;

24 (5) nearly 1 out of every 20 students in 6th

25 through 12th grade uses drugs on school grounds;
35

•S 1 IS

1 (6) more of our children are becoming involved

2 with hard drugs at earlier ages, as use of heroin and

3 cocaine by 8th graders has more than doubled since

4 1991; and

5 (7) greater cooperation between schools, par6 ents, law enforcement, the courts, and the commu7 nity is essential to making our schools safe from

8 drugs and violence.

9 SEC. 172. PURPOSE.

10 It is the purpose of this chapter—

11 (1) to urge States, State educational agencies,

12 and local educational agencies to provide comprehen13 sive services to victims and witnesses of school vio14 lence;

15 (2) to urge States, State educational agencies,

16 and local educational agencies to remove violent and

17 drug selling student offenders from school premises;

18 (3) to urge States, State educational agencies,

19 and local educational agencies to report violent

20 crimes and drug dealing on school grounds to appro21 priate law enforcement authorities;

22 (4) to provide incentive grants for States, State

23 educational agencies, and local educational agencies

24 to involve parents, former armed forces personnel,
36

•S 1 IS

1 and community volunteers in efforts to improve

2 school safety; and

3 (5) to provide incentive grants to States, State

4 educational agencies, and local educational agencies

5 to develop innovative programs to improve the safety

6 of our Nation’s schools and to better serve at-risk

7 students.

8 SEC. 173. DEFINITIONS.

9 In this chapter:

10 (1) ELEMENTARY SCHOOL, LOCAL EDU11 CATIONAL AGENCY, SECONDARY SCHOOL, AND STATE

12 EDUCATIONAL AGENCY.—The terms ‘‘elementary

13 school’’, ‘‘local educational agency’’, ‘‘secondary

14 school’’, and ‘‘State educational agency’’ have the

15 meanings given the terms in section 14101 of the

16 Elementary and Secondary Education Act of 1965

17 (20 U.S.C. 8801).

18 (2) SECRETARY.—The term ‘‘Secretary’’ means

19 the Secretary of Education.

20 SEC. 174. AUTHORIZATION OF APPROPRIATIONS.

21 There are authorized to be appropriated such sums

22 as may be necessary to carry out this chapter.

23 SEC. 175. PROGRAM AUTHORIZED.

24 (a) IN GENERAL.—The Secretary is authorized to

25 award grants to States, State educational agencies, and
37

•S 1 IS

1 local educational agencies to develop, establish, or conduct

2 innovative programs to improve unsafe elementary schools

3 or secondary schools.

4 (b) PRIORITY.—The Secretary shall give priority to

5 awarding grants under subsection (a) to—

6 (1) programs that provide parent and teacher

7 notification of crimes or drug activity occurring at

8 school;

9 (2) programs that provide for the suspension,

10 delay, or restriction of driving privileges of persons

11 under the age of 18 who have a conviction, an adju12 dication in a juvenile proceeding, or a finding in a

13 school disciplinary proceeding, involving illegal

14 drugs;

15 (3) programs that link local educational agen16 cies with community-based mentoring programs in

17 order to link individual at-risk youth with respon18 sible, individual adults who serve as mentors for the

19 purpose of—

20 (A) discouraging at-risk youth from—

21 (i) using illegal drugs;

22 (ii) violence;

23 (iii) using dangerous weapons;

24 (iv) criminal activity; and

25 (v) involvement in gangs;
38

•S 1 IS

1 (B) increasing youth participation in, and

2 enhancing the ability of such youth to benefit

3 from, elementary and secondary education;

4 (C) promoting personal and social respon5 sibility;

6 (D) encouraging at-risk youth participation

7 in community service and community activities;

8 and

9 (E) providing general guidance to at-risk

10 youth;

11 (4) programs that include cooperative efforts

12 between the Secretary and the Secretary of Defense

13 to share the training and salary costs of former

14 members of the Armed Forces who are hired as

15 teachers and assigned to teach in public elementary

16 schools and secondary schools, especially those pro17 grams located in communities that are adversely af18 fected by the recent closing or substantial

19 downsizing of a military base or facility; and

20 (5) programs to enhance school security meas21 ures that may include—

22 (A) equipping schools with metal detectors,

23 fences, closed circuit cameras, and other phys24 ical security measures;
39

•S 1 IS

1 (B) providing increased police patrols in

2 and around elementary schools and secondary

3 schools, including canine patrols;

4 (C) mailings to parents at the beginning of

5 the school year stating that the possession of a

6 gun or other weapon, or the sale of drugs in

7 school, will not be tolerated by school authori8 ties; and

9 (D) gun hotlines.

10 SEC. 176. APPLICATION.

11 (a) IN GENERAL.—Each State, State educational

12 agency, or local educational agency desiring a grant under

13 this chapter shall submit an application to the Secretary

14 at such time, in such manner, and accompanied by such

15 information as the Secretary may require.

16 (b) CONTENTS.—Each application submitted under

17 subsection (a) shall contain an assurance that the State

18 or agency has implemented or will implement policies

19 that—

20 (1) provide protections for victims and wit21 nesses to school crime, including protections for at22 tendance at school disciplinary proceedings;

23 (2) expel students who, on school grounds, sell

24 drugs, or who commit a violent offense that causes
40

•S 1 IS

1 serious bodily injury of another student or teacher;

2 and

3 (3) require referral to law enforcement authori4 ties or juvenile authorities of any student who on

5 school grounds—

6 (A) commits a violent offense resulting in

7 serious bodily injury; or

8 (B) sells drugs.

9 (c) SPECIAL RULE.—For purposes of paragraphs (2)

10 and (3) of subsection (b), State law shall determine what

11 constitutes a violent offense or serious bodily injury.

12 CHAPTER IV—NOTIFICATION FOR JUVE13 NILE JUSTICE AND LAW ENFORCE14 MENT PURPOSES

15 SEC. 181. NOTIFICATION FOR JUVENILE JUSTICE AND LAW

16 ENFORCEMENT PURPOSES.

17 The Secretary of Education, not later than 90 days

18 after the date of enactment of this Act, shall prepare and

19 distribute to State educational agencies and local edu20 cational agencies a notice regarding the extent of permis21 sible disclosure of educational records under subpara22 graphs (E) and (J) of section 444(b) of the General Edu23 cation Provisions Act (20 U.S.C. 1232g), including under

24 the regulations issued pursuant to such subparagraphs.
41

•S 1 IS

1 TITLE II—AMENDMENTS TO THE

2 ELEMENTARY AND SECOND3 ARY EDUCATION ACT OF 1965

4 SEC. 201. SHORT TITLE.

5 This title may be cited as the ‘‘State Education Flexi6 bility Act’’.

7 SEC. 202. AMENDMENTS TO ESEA.

8 Subsection (b) of section 6301 of the Elementary and

9 Secondary Education Act of 1965 (20 U.S.C. 7351) is

10 amended—

11 (1) in paragraph (7), by striking ‘‘and’’ after

12 the semicolon;

13 (2) in paragraph (8), by striking the period and

14 inserting a semicolon; and

15 (3) by adding at the end the following:

16 ‘‘(9) programs using scholarships or vouchers

17 provided to a parent by a local educational agency

18 that permit the parent to select the public or pri19 vate, including sectarian, school that the parent’s

20 child will attend, which programs may be similar to

21 the program assisted under title I of the Safe and

22 Affordable Schools Act of 1997, except that the pro23 visions of sections 6402 and 14507, and any gen24 erally applicable provision relating to a prohibition

25 against the use of Federal funds for religious wor-
42

•S 1 IS

1 ship or instruction, shall not apply to any program

2 operated pursuant to this paragraph;

3 ‘‘(10) education reform projects that provide

4 same gender schools, as long as comparable edu5 cational opportunities are offered for students of

6 both sexes; and

7 ‘‘(11) education reform projects that reward

8 teachers, administrators, and schools with cash bo9 nuses and other incentives for significantly improv10 ing the academic performance of their students.’’.

11 TITLE III—TAX INCENTIVES FOR

12 HIGHER EDUCATION

13 SEC. 300. SHORT TITLE; AMENDMENT OF 1986 CODE.

14 (a) SHORT TITLE.—This title may be cited as the

15 ‘‘Affordable College Act’’.

16 (b) AMENDMENT OF 1986 CODE.—Except as other17 wise expressly provided, whenever in this title an amend18 ment or repeal is expressed in terms of an amendment

19 to, or repeal of, a section or other provision, the reference

20 shall be considered to be made to a section or other provi21 sion of the Internal Revenue Code of 1986.

22 SEC. 301. BOB DOLE EDUCATION INVESTMENT ACCOUNTS.

23 (a) IN GENERAL.—Part VIII of subchapter F of

24 chapter 1 (relating to qualified State tuition programs)

25 is amended by adding at the end the following new section:
43

•S 1 IS

1 ‘‘SEC. 530. BOB DOLE EDUCATION INVESTMENT ACCOUNTS.

2 ‘‘(a) GENERAL RULE.—A Bob Dole education invest3 ment account (hereafter in this section referred to as an

4 ‘education investment account’) shall be exempt from tax5 ation under this subtitle. Notwithstanding the preceding

6 sentence, the education investment account shall be sub7 ject to the taxes imposed by section 511 (relating to impo8 sition of tax on unrelated business income of charitable

9 organizations).

10 ‘‘(b) LIMITATIONS ON ACCOUNTS.—

11 ‘‘(1) ACCOUNT MAY NOT BE ESTABLISHED FOR

12 BENEFIT OF MORE THAN 1 INDIVIDUAL.—An edu13 cation investment account may not be established for

14 the benefit of more than 1 individual.

15 ‘‘(2) SPECIAL RULE WHERE MORE THAN 1 AC16 COUNT.—If, at any time during a calendar year, 2

17 or more education investment accounts are main18 tained for the benefit of an individual, only the ac19 count first established shall be treated as a Bob

20 Dole education investment account for purposes of

21 this section. This paragraph shall not apply to the

22 extent more than 1 account exists solely by reason

23 of a rollover contribution.

24 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur25 poses of this section—
44

•S 1 IS

1 ‘‘(1) BOB DOLE EDUCATION INVESTMENT AC2 COUNT.—The term ‘Bob Dole education investment

3 account’ means a trust created or organized in the

4 United States exclusively for the purpose of paying

5 the qualified higher education expenses of the ac6 count holder, but only if the written governing in7 strument creating the trust meets the following re8 quirements:

9 ‘‘(A) No contribution will be accepted—

10 ‘‘(i) unless it is in cash,

11 ‘‘(ii) except in the case of rollover con12 tributions from another education invest13 ment account, in excess of $1,000 for any

14 calendar year, and

15 ‘‘(iii) after the date on which the ac16 count holder attains age 18.

17 ‘‘(B) The trustee is a bank (as defined in

18 section 408(n)) or another person who dem19 onstrates to the satisfaction of the Secretary

20 that the manner in which that person will ad21 minister the trust will be consistent with the re22 quirements of this section.

23 ‘‘(C) No part of the trust assets will be in24 vested in life insurance contracts (other than

25 contracts the beneficiary of which is the trust
45

•S 1 IS

1 and the face amount of which does not exceed

2 the amount by which the maximum amount

3 which can be contributed to the education in4 vestment account exceeds the sum of the

5 amounts contributed to the account for all tax6 able years).

7 ‘‘(D) The assets of the trust shall not be

8 commingled with other property except in a

9 common trust fund or common investment

10 fund.

11 ‘‘(E) Any balance in the education invest12 ment account on the day after the date on

13 which the individual for whose benefit the trust

14 is established attains age 30 (or, if earlier, the

15 date on which such individual dies) shall be dis16 tributed within 30 days of such date to the ac17 count holder (or in the case of death, the bene18 ficiary).

19 ‘‘(2) TIME WHEN CONTRIBUTIONS DEEMED

20 MADE.—A taxpayer shall be deemed to have made a

21 contribution on the last day of the preceding taxable

22 year if the contribution is made on account of such

23 taxable year and is made not later than the time

24 prescribed by law for filing the return for such tax25 able year (including extensions thereof).
46

•S 1 IS

1 ‘‘(3) QUALIFIED HIGHER EDUCATION EX2 PENSES.—

3 ‘‘(A) IN GENERAL.—The term ‘qualified

4 higher education expenses’ has the same mean5 ing given such term by section 529(e)(3), ex6 cept that such expenses shall be reduced by any

7 amount described in section 135(d)(1) (relating

8 to certain scholarships and veterans benefits).

9 ‘‘(B) STATE TUITION PLANS.—Such term

10 shall include amounts paid or incurred to pur11 chase tuition credits or certificates, or to make

12 contributions to an account, under a qualified

13 State tuition program (as defined in section

14 529(b)).

15 ‘‘(4) ELIGIBLE EDUCATIONAL INSTITUTION.—

16 The term ‘eligible educational institution’ has the

17 meaning given such term by section 135(c)(3).

18 ‘‘(5) ACCOUNT HOLDER.—The term ‘account

19 holder’ means the individual for whose benefit the

20 education investment account is established.

21 ‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.—

22 ‘‘(1) IN GENERAL.—Except as otherwise pro23 vided in this subsection, any amount paid or distrib24 uted out of an education investment account shall be

25 included in gross income of the payee or distributee
47

•S 1 IS

1 for the taxable year in the manner prescribed by sec2 tion 72. For purposes of the preceding sentence,

3 rules similar to the rules of section 408(d)(2) shall

4 apply.

5 ‘‘(2) DISTRIBUTION USED TO PAY EDU6 CATIONAL EXPENSES.—Paragraph (1) shall not

7 apply to any payment or distribution out of an edu8 cation investment account to the extent such pay9 ment or distribution is used exclusively to pay the

10 qualified higher education expenses of the account

11 holder.

12 ‘‘(3) SPECIAL RULE FOR APPLYING SECTION

13 2503.—If any payment or distribution from an edu14 cation investment account is used exclusively for the

15 payment to an eligible educational institution of the

16 qualified higher education expenses of the account

17 holder, such payment shall be treated as a qualified

18 transfer for purposes of section 2503(e).

19 ‘‘(4) ADDITIONAL TAX FOR DISTRIBUTIONS NOT

20 USED FOR EDUCATIONAL EXPENSES.—

21 ‘‘(A) IN GENERAL.—The tax imposed by

22 this chapter for any taxable year on any tax23 payer who receives a payment or distribution

24 from an education investment account which is

25 includible in gross income under paragraph (1)
48

•S 1 IS

1 shall be increased by 10 percent of the amount

2 which is so includible.

3 ‘‘(B) EXCEPTION FOR DISABILITY, DEATH,

4 OR SCHOLARSHIP.—Subparagraph (A) shall not

5 apply if the payment or distribution is—

6 ‘‘(i) made on account of the death or

7 disability of the account holder, or

8 ‘‘(ii) made on account of a scholarship

9 (or allowance or payment described in sec10 tion 135(d)(1) (B) or (C)) received by the

11 account holder to the extent the amount of

12 the payment or distribution does exceed

13 the amount of the scholarship, allowance,

14 or payment.

15 ‘‘(C) EXCESS CONTRIBUTIONS RETURNED

16 BEFORE DUE DATE OF RETURN.—Subpara17 graph (A) shall not apply to the distribution to

18 a contributor of any contribution paid during a

19 taxable year to an education investment account

20 to the extent that such contribution, when

21 added to previous contributions to the account

22 during the taxable year, exceeds $1,000 if—

23 ‘‘(i) such distribution is received on or

24 before the day prescribed by law (including
49

•S 1 IS

1 extensions of time) for filing such contribu2 tor’s return for such taxable year, and

3 ‘‘(ii) such distribution is accompanied

4 by the amount of net income attributable

5 to such excess contribution.

6 Any net income described in clause (ii) shall be

7 included in the gross income of the contributor

8 for the taxable year in which such excess con9 tribution was made.

10 ‘‘(5) ROLLOVER CONTRIBUTIONS.—Paragraph

11 (1) shall not apply to any amount paid or distrib12 uted from an education investment account to the

13 extent that the amount received is paid into another

14 education investment account for the benefit of the

15 account holder not later than the 60th day after the

16 day on which the holder receives the payment or dis17 tribution. The preceding sentence shall not apply to

18 any payment or distribution if it applied to any prior

19 payment or distribution during the 12-month period

20 ending on the date of the payment or distribution.

21 ‘‘(6) SPECIAL RULES FOR DEATH AND DI22 VORCE.—Rules similar to the rules of section 220(f)

23 (7) and (8) shall apply.

24 ‘‘(e) TAX TREATMENT OF ACCOUNTS.—Rules similar

25 to the rules of paragraphs (2) and (4) of section 408(e)
50

•S 1 IS

1 shall apply to any education investment account, and any

2 amount treated as distributed under such rules shall be

3 treated as not used to pay qualified higher education ex4 penses.

5 ‘‘(f) COMMUNITY PROPERTY LAWS.—This section

6 shall be applied without regard to any community property

7 laws.

8 ‘‘(g) CUSTODIAL ACCOUNTS.—For purposes of this

9 section, a custodial account shall be treated as a trust if

10 the assets of such account are held by a bank (as defined

11 in section 408(n)) or another person who demonstrates,

12 to the satisfaction of the Secretary, that the manner in

13 which he will administer the account will be consistent

14 with the requirements of this section, and if the custodial

15 account would, except for the fact that it is not a trust,

16 constitute an account described in subsection (b)(1). For

17 purposes of this title, in the case of a custodial account

18 treated as a trust by reason of the preceding sentence,

19 the custodian of such account shall be treated as the trust20 ee thereof.

21 ‘‘(h) REPORTS.—The trustee of an education invest22 ment account shall make such reports regarding such ac23 count to the Secretary and to the account holder with re24 spect to contributions, distributions, and such other mat25 ters as the Secretary may require under regulations. The
51

•S 1 IS

1 reports required by this subsection shall be filed at such

2 time and in such manner and furnished to such individuals

3 at such time and in such manner as may be required by

4 those regulations.’’

5 (b) TAX ON PROHIBITED TRANSACTIONS.—Section

6 4975 (relating to prohibited transactions) is amended—

7 (1) by adding at the end of subsection (c) the

8 following new paragraph:

9 ‘‘(5) SPECIAL RULE FOR EDUCATION INVEST10 MENT ACCOUNTS.—An individual for whose benefit

11 an education investment account is established and

12 any contributor to such account shall be exempt

13 from the tax imposed by this section with respect to

14 any transaction concerning such account (which

15 would otherwise be taxable under this section) if,

16 with respect to such transaction, the account ceases

17 to be an education investment account by reason of

18 the application of section 530 to such account.’’; and

19 (2) in subsection (e)(1), by striking ‘‘or’’ at the

20 end of subparagraph (D), by redesignating subpara21 graph (E) as subparagraph (F), and by inserting

22 after subparagraph (D) the following new subpara23 graph:

24 ‘‘(E) an education investment account de25 scribed in section 530, or’’.
52

•S 1 IS

1 (c) FAILURE TO PROVIDE REPORTS ON EDUCATION

2 INVESTMENT ACCOUNTS.—Section 6693 (relating to fail3 ure to provide reports on individual retirement accounts

4 or annuities) is amended—

5 (1) by inserting ‘‘OR ON EDUCATION IN6 VESTMENT ACCOUNTS’’ after ‘‘ANNUITIES’’ in

7 the heading of such section, and

8 (2) in subsection (a)(2), by striking ‘‘and’’ at

9 the end of subparagraph (A), by striking the period

10 at the end of subparagraph (B) and inserting ‘‘,

11 and’’, and by adding at the end the following new

12 subparagraph:

13 ‘‘(C) section 530(h) (relating to education

14 investment accounts).’’

15 (d) COORDINATION WITH SAVINGS BOND EXCLU16 SION.—Section 135(d)(1) is amended by striking ‘‘or’’ at

17 the end of subparagraph (C), by striking the period at the

18 end of subparagraph (D) and inserting ‘‘, or’’, and by in19 serting at the end the following new subparagraph:

20 ‘‘(E) a payment or distribution from an

21 education investment account (as defined in

22 section 530).’’

23 (e) CLERICAL AMENDMENTS.—
53

•S 1 IS

1 (1) The table of sections for part VIII of sub2 chapter F of chapter 1 is amended by adding at the

3 end the following new item:

‘‘Sec. 530. Bob Dole education investment accounts.’’

4 (2)(A) The heading for part VIII of subchapter

5 F of chapter 1 is amended to read as follows:

6 ‘‘PART VIII—HIGHER EDUCATION SAVINGS

7 ENTITIES’’.

8 (B) The table of parts for subchapter F of

9 chapter 1 is amended by striking the item relating

10 to part VIII and inserting:

‘‘Part VIII. Higher education savings entities.’’

11 (3) The table of sections for subchapter B of

12 chapter 68 is amended by striking the item relating

13 to section 6693 and inserting the following new

14 item:

‘‘Sec. 6693. Failure to provide reports on individual retirement

accounts or annuities or on education investment

accounts.’’

15 (f) EFFECTIVE DATE.—The amendments made by

16 this section shall apply to taxable years beginning after

17 December 31, 1996.

18 SEC. 302. EMPLOYER-PROVIDED EDUCATIONAL ASSIST19 ANCE PROGRAMS.

20 (a) PERMANENT EXTENSION.—Section 127 of the

21 Internal Revenue Code of 1986 (relating to exclusion for

22 educational assistance programs) is amended by striking
54

•S 1 IS

1 subsection (d) and by redesignating subsection (e) as sub2 section (d).

3 (b) REPEAL OF LIMITATION ON GRADUATE EDU4 CATION.—The last sentence of section 127(c)(1) of such

5 Code is amended by striking ‘‘, and such term also does

6 not include any payment for, or the provision of any bene7 fits with respect to, any graduate level course of a kind

8 normally taken by an individual pursuing a program lead9 ing to a law, business, medical, or other advanced aca10 demic or professional degree’’.

11 (c) EFFECTIVE DATES.—

12 (1) EXTENSION.—The amendments made by

13 subsection (a) shall apply to taxable years beginning

14 after December 31, 1996.

15 (2) GRADUATE EDUCATION.—The amendment

16 made by subsection (b) shall apply with respect to

17 expenses relating to courses beginning after June

18 30, 1996.

19 SEC. 303. MODIFICATIONS OF TAX TREATMENT OF QUALI20 FIED STATE TUITION PROGRAMS.

21 (a) EXCLUSION OF DISTRIBUTIONS USED FOR EDU22 CATIONAL PURPOSES.—Subparagraph (B) of section

23 529(c)(3) is amended to read as follows:

24 ‘‘(B) DISTRIBUTIONS FOR QUALIFIED

25 HIGHER EDUCATION EXPENSES.—Subpara-
55

•S 1 IS

1 graph (A) shall not apply to any distribution to

2 the extent—

3 ‘‘(i) the distribution is used exclusively

4 to pay qualified higher education expenses

5 of the distributee, or

6 ‘‘(ii) the distribution consists of pro7 viding a benefit to the distributee which, if

8 paid for by the distributee, would con9 stitute payment of a qualified higher edu10 cation expense.’’

11 (b) QUALIFIED HIGHER EDUCATION EXPENSES TO

12 INCLUDE ROOM AND BOARD.—Section 529(e)(3) is

13 amended to read as follows:

14 ‘‘(3) QUALIFIED HIGHER EDUCATION EX15 PENSES.—The term ‘qualified higher education ex16 penses’ means the cost of attendance (within the

17 meaning of section 472 of the Higher Education Act

18 of 1965 (20 U.S.C. 1087ll), as in effect on the date

19 of the enactment of the Affordable College Act) of

20 a designated beneficiary at an eligible educational

21 institution (as defined in section 135(c)(3)).’’

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to taxable years beginning after

24 December 31, 1996.
56

•S 1 IS

1 SEC. 304. DEDUCTION FOR INTEREST ON EDUCATION

2 LOANS.

3 (a) IN GENERAL.—Part VII of subchapter B of chap4 ter 1 (relating to additional itemized deductions for indi5 viduals) is amended by redesignating section 221 as sec6 tion 222 and by inserting after section 220 the following

7 new section:

8 ‘‘SEC. 221. INTEREST ON EDUCATION LOANS.

9 ‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an

10 individual, there shall be allowed as a deduction for the

11 taxable year an amount equal to the interest paid by the

12 taxpayer during the taxable year on any qualified edu13 cation loan.

14 ‘‘(b) MAXIMUM DEDUCTION.—

15 ‘‘(1) IN GENERAL.—Except as provided in para16 graph (2), the deduction allowed by subsection (a)

17 for the taxable year shall not exceed $2,500.

18 ‘‘(2) LIMITATION BASED ON MODIFIED AD19 JUSTED GROSS INCOME.—

20 ‘‘(A) IN GENERAL.—If the modified ad21 justed gross income of the taxpayer for the tax22 able year exceeds $45,000 ($65,000 in the case

23 of a joint return), the amount which would (but

24 for this paragraph) be allowable as a deduction

25 under this section shall be reduced (but not

26 below zero) by the amount which bears the
57

•S 1 IS

1 same ratio to the amount which would be so al2 lowable as such excess bears to $20,000.

3 ‘‘(B) MODIFIED ADJUSTED GROSS IN4 COME.—The term ‘modified adjusted gross in5 come’ means adjusted gross income deter6 mined—

7 ‘‘(i) without regard to this section and

8 sections 135, 911, 931, and 933, and

9 ‘‘(ii) after application of sections 86,

10 219, and 469.

11 For purposes of sections 86, 135, 219, and

12 469, adjusted gross income shall be determined

13 without regard to the deduction allowed under

14 this section.

15 ‘‘(C) INFLATION ADJUSTMENT.—In the

16 case of any taxable year beginning after 1997,

17 the $45,000 and $65,000 amounts referred to

18 in subparagraph (A) shall be increased by an

19 amount equal to—

20 ‘‘(i) such dollar amount, multiplied by

21 ‘‘(ii) the cost-of-living adjustment de22 termined under section (1)(f)(3) for the

23 calendar year in which the taxable year be24 gins, by substituting ‘1996’ for ‘1992’.
58

•S 1 IS

1 ‘‘(D) ROUNDING.—If any amount as ad2 justed under subparagraph (C) is not a multiple

3 of $50, such amount shall be rounded to the

4 nearest multiple of $50.

5 ‘‘(c) DEPENDENTS NOT ELIGIBLE FOR DEDUC6 TION.—No deduction shall be allowed by this section to

7 an individual for the taxable year if a deduction under sec8 tion 151 with respect to such individual is allowed to an9 other taxpayer for the taxable year beginning in the cal10 endar year in which such individual’s taxable year begins.

11 ‘‘(d) LIMIT ON PERIOD DEDUCTION ALLOWED.—A

12 deduction shall be allowed under this section only with re13 spect to interest paid on any qualified education loan dur14 ing the first 60 months (whether or not consecutive) in

15 which interest payments are required. For purposes of this

16 paragraph, any loan and all refinancings of such loan shall

17 be treated as 1 loan.

18 ‘‘(e) DEFINITIONS.—For purposes of this section—

19 ‘‘(1) QUALIFIED EDUCATION LOAN.—The term

20 ‘qualified education loan’ means any indebtedness

21 incurred to pay qualified higher education ex22 penses—

23 ‘‘(A) which are incurred on behalf of the

24 taxpayer, the taxpayer’s spouse, or any depend-
59

•S 1 IS

1 ent of the taxpayer as of the time the indebted2 ness was incurred,

3 ‘‘(B) which are paid or incurred within a

4 reasonable period of time before or after the in5 debtedness is incurred, and

6 ‘‘(C) which are attributable to education

7 furnished during a period during which the re8 cipient was at least a half-time student.

9 Such term includes indebtedness used to refinance

10 indebtedness which qualifies as a qualified education

11 loan. The term ‘qualified education loan’ shall not

12 include any indebtedness owed to a person who is re13 lated (within the meaning of section 267(b) or

14 707(b)(1)) to the taxpayer.

15 ‘‘(2) QUALIFIED HIGHER EDUCATION EX16 PENSES.—The term ‘qualified higher education ex17 penses’ means the cost of attendance (as defined in

18 section 472 of the Higher Education Act of 1965,

19 20 U.S.C. 1087ll, as in effect on the day before the

20 date of the enactment of this Act) of the taxpayer

21 or the taxpayer’s spouse at an eligible educational

22 institution, reduced by the sum of—

23 ‘‘(A) the amount excluded from gross in24 come under section 135 by reason of such ex25 penses, and
60

•S 1 IS

1 ‘‘(B) the amount of the reduction de2 scribed in section 135(d)(1).

3 For purposes of the preceding sentence, the term ‘el4 igible educational institution’ has the same meaning

5 given such term by section 135(c)(3), except that

6 such term shall also include an institution conduct7 ing an internship or residency program leading to a

8 degree or certificate awarded by an institution of

9 higher education, a hospital, or a health care facility

10 which offers postgraduate training.

11 ‘‘(3) HALF-TIME STUDENT.—The term ‘half12 time student’ means any individual who would be a

13 student as defined in section 151(c)(4) if ‘half-time’

14 were substituted for ‘full-time’ each place it appears

15 in such section.

16 ‘‘(4) DEPENDENT.—The term ‘dependent’ has

17 the meaning given such term by section 152.

18 ‘‘(f) SPECIAL RULES.—

19 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc20 tion shall be allowed under this section for any

21 amount for which a deduction is allowable under any

22 other provision of this chapter.

23 ‘‘(2) MARRIED COUPLES MUST FILE JOINT RE24 TURN.—If the taxpayer is married at the close of

25 the taxable year, the deduction shall be allowed
61

•S 1 IS

1 under subsection (a) only if the taxpayer and the

2 taxpayer’s spouse file a joint return for the taxable

3 year.

4 ‘‘(3) MARITAL STATUS.—Marital status shall be

5 determined in accordance with section 7703.’’.

6 (b) DEDUCTION ALLOWED WHETHER OR NOT TAX7 PAYER ITEMIZES OTHER DEDUCTIONS.—Subsection (a)

8 of section 62 is amended by inserting after paragraph (16)

9 the following new paragraph:

10 ‘‘(17) INTEREST ON EDUCATION LOANS.—The

11 deduction allowed by section 221.’’

12 (c) REPORTING REQUIREMENT.—

13 (1) IN GENERAL.—Subpart B of part III of

14 subchapter A of chapter 61 (relating to information

15 concerning transactions with other persons) is

16 amended by inserting after section 6050R the fol17 lowing new section:

18 ‘‘SEC. 6050S. RETURNS RELATING TO EDUCATION LOAN IN19 TEREST RECEIVED IN TRADE OR BUSINESS

20 FROM INDIVIDUALS.

21 ‘‘(a) EDUCATION LOAN INTEREST OF $600 OR

22 MORE.—Any person—

23 ‘‘(1) who is engaged in a trade or business, and

24 ‘‘(2) who, in the course of such trade or busi25 ness, receives from any individual interest aggregat-
62

•S 1 IS

1 ing $600 or more for any calendar year on 1 or

2 more qualified education loans,

3 shall make the return described in subsection (b) with re4 spect to each individual from whom such interest was re5 ceived at such time as the Secretary may by regulations

6 prescribe.

7 ‘‘(b) FORM AND MANNER OF RETURNS.—A return

8 is described in this subsection if such return—

9 ‘‘(1) is in such form as the Secretary may pre10 scribe,

11 ‘‘(2) contains—

12 ‘‘(A) the name, address, and TIN of the

13 individual from whom the interest described in

14 subsection (a)(2) was received,

15 ‘‘(B) the amount of such interest received

16 for the calendar year, and

17 ‘‘(C) such other information as the Sec18 retary may prescribe.

19 ‘‘(c) APPLICATION TO GOVERNMENTAL UNITS.—For

20 purposes of subsection (a)—

21 ‘‘(1) TREATED AS PERSONS.—The term ‘per22 son’ includes any governmental unit (and any agency

23 or instrumentality thereof).
63

•S 1 IS

1 ‘‘(2) SPECIAL RULES.—In the case of a govern2 mental unit or any agency or instrumentality there3 of—

4 ‘‘(A) subsection (a) shall be applied with5 out regard to the trade or business requirement

6 contained therein, and

7 ‘‘(B) any return required under subsection

8 (a) shall be made by the officer or employee ap9 propriately designated for the purpose of mak10 ing such return.

11 ‘‘(d) STATEMENTS TO BE FURNISHED TO INDIVID12 UALS WITH RESPECT TO WHOM INFORMATION IS RE13 QUIRED.—Every person required to make a return under

14 subsection (a) shall furnish to each individual whose name

15 is required to be set forth in such return a written state16 ment showing—

17 ‘‘(1) the name and address of the person re18 quired to make such return, and

19 ‘‘(2) the aggregate amount of interest described

20 in subsection (a)(2) received by the person required

21 to make such return from the individual to whom

22 the statement is required to be furnished.

23 The written statement required under the preceding sen24 tence shall be furnished on or before January 31 of the
64

•S 1 IS

1 year following the calendar year for which the return

2 under subsection (a) was required to be made.

3 ‘‘(e) QUALIFIED EDUCATION LOAN DEFINED.—For

4 purposes of this section, except as provided in regulations

5 prescribed by the Secretary, the term ‘qualified education

6 loan’ has the meaning given such term by section

7 221(e)(1).

8 ‘‘(f) RETURNS WHICH WOULD BE REQUIRED TO BE

9 MADE BY 2 OR MORE PERSONS.—Except to the extent

10 provided in regulations prescribed by the Secretary, in the

11 case of interest received by any person on behalf of an12 other person, only the person first receiving such interest

13 shall be required to make the return under subsection

14 (a).’’.

15 (2) ASSESSABLE PENALTIES.—Section 6724(d)

16 (relating to definitions) is amended—

17 (A) in paragraph (1)(B), by redesignating

18 clauses (x) through (xv) as clauses (xi) through

19 (xvi), respectively, and by inserting after clause

20 (ix) the following new clause:

21 ‘‘(x) section 6050S (relating to re22 turns relating to education loan interest re23 ceived in trade or business from individ24 uals),’’, and
65

•S 1 IS

1 (B) in paragraph (2), by striking ‘‘or’’ at

2 the end of the next to last subparagraph, by

3 striking the period at the end of the last sub4 paragraph and inserting ‘‘, or’’, and by adding

5 at the end the following new subparagraph:

6 ‘‘(Z) section 6050S(d) (relating to returns

7 relating to education loan interest received in

8 trade or business from individuals).’’

9 (d) CLERICAL AMENDMENT.—The table of sections

10 for part VII of subchapter B of chapter 1 is amended by

11 striking the last item and inserting the following new

12 items:

‘‘Sec. 221. Interest on education loans.

‘‘Sec. 222. Cross reference.’’.

13 (e) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to any qualified education loan (as

15 defined in section 221(e)(1) of the Internal Revenue Code

16 of 1986, as added by this section) incurred on, before, or

17 after the date of the enactment of this Act, but only with

18 respect to any loan interest payment due after December

19 31, 1996.

20 SEC. 305. EXCLUSION OF FEDERAL WORK STUDY PAY21 MENTS.

22 (a) IN GENERAL.—Section 117 (relating to exclusion

23 of qualified scholarships) is amended by adding at the end

24 the following new subsection:
66

•S 1 IS

1 ‘‘(e) EXCLUSION FOR WORK STUDY PAYMENTS.—

2 Notwithstanding any other provision of this section, gross

3 income does not include any amount received for services

4 performed under a Federal work study program operated

5 under section 441 of the Higher Education Act of 1965

6 (42 U.S.C. 2751), as in effect on the date of the enact7 ment of this subsection.’’

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

9 this section shall apply to taxable years beginning after

10 December 31, 1996.

11 TITLE IV—FUNDING FOR PART B

12 OF THE INDIVIDUALS WITH

13 DISABILITIES EDUCATION

14 ACT

15 SEC. 401. FUNDING FOR PART B OF THE INDIVIDUALS WITH

16 DISABILITIES EDUCATION ACT.

17 Section 611(h) of the Individuals with Disabilities

18 Education Act (20 U.S.C. 1411(h)) is amended by strik19 ing ‘‘such sums as may be necessary’’ and inserting ‘‘not

20 less than $4,107,522 for fiscal year 1998, not less than

21 $5,607,522 for fiscal year 1999, not less than $7,107,522

22 for fiscal year 2000, not less than $8,607,522 for fiscal

23 year 2001, not less than $10,107,522 for fiscal year 2002,

24 not less than $11,607,522 for fiscal year 2003, not less
67

•S 1 IS

1 than $13,107,522 for fiscal year 2004, and such sums as

2 may be necessary for each succeeding fiscal year.’’.

3 TITLE V—ADULT EDUCATION

4 AND FAMILY LITERACY

5 Subtitle A—Adult Education Act

6 SEC. 511. AUTHORIZATION OF ADULT EDUCATION ACT.

7 The Adult Education Act (20 U.S.C. 1201 et seq.)

8 is amended to read as follows:

9 ‘‘TITLE III—ADULT EDUCATION

10 PROGRAMS

11 ‘‘SEC. 301. SHORT TITLE.

12 ‘‘This title may be cited as the ‘Adult Education Act’.

13 ‘‘SEC. 302. STATEMENT OF PURPOSE.

14 ‘‘It is the purpose of this title to assist the States

15 and the outlying areas to provide—

16 ‘‘(1) to adults, the basic educational skills nec17 essary for employment and self-sufficiency; and

18 ‘‘(2) to adults who are parents, the educational

19 skills necessary to be full partners in the educational

20 development of their children.

21 ‘‘SEC. 303. DEFINITIONS.

22 ‘‘As used in this title:

23 ‘‘(1) ADULT EDUCATION.—The term ‘adult edu24 cation’ means services or instruction below the post25 secondary level for individuals—
68

•S 1 IS

1 ‘‘(A) who have attained 16 years of age;

2 ‘‘(B) who are not enrolled or required to be

3 enrolled in secondary school;

4 ‘‘(C)(i) who lack sufficient mastery of basic

5 educational skills to enable the individuals to

6 function effectively in society; or

7 ‘‘(ii) who do not have a certificate of grad8 uation from a school providing secondary edu9 cation and who have not achieved an equivalent

10 level of education; and

11 ‘‘(D) who lack a mastery of basic skills

12 and are therefore unable to speak, read, or

13 write the English language.

14 ‘‘(2) ADULT EDUCATION AND LITERACY ACTIVI15 TIES.—The term ‘adult education and literacy activi16 ties’ means the activities authorized in section 315.

17 ‘‘(3) COMMUNITY-BASED ORGANIZATION.—The

18 term ‘community-based organization’ means a pri19 vate nonprofit organization of demonstrated effec20 tiveness that is representative of a community or a

21 significant segment of a community.

22 ‘‘(4) ELIGIBLE AGENCY.—The term ‘eligible

23 agency’ means—

24 ‘‘(A) the individual, entity, or agency in a

25 State or an outlying area responsible for admin-
69

•S 1 IS

1 istering or setting policies for adult education

2 and literacy services in such State or outlying

3 area pursuant to the law of the State or outly4 ing area; or

5 ‘‘(B) if no individual, entity, or agency is

6 responsible for administering or setting such

7 policies pursuant to the law of the State or out8 lying area, the individual, entity, or agency in

9 a State or outlying area responsible for admin10 istering or setting policies for adult education

11 and literacy services in such State or outlying

12 area on the date of enactment of this Act.

13 ‘‘(5) ELIGIBLE PROVIDER.—The term ‘eligible

14 provider’, used with respect to adult education and

15 literacy activities described in section 315(b), means

16 a provider determined to be eligible for assistance in

17 accordance with section 314.

18 ‘‘(6) ENGLISH LITERACY PROGRAM.—The term

19 ‘English literacy program’ means a program of in20 struction designed to help individuals of limited

21 English proficiency achieve full competence in the

22 English language.

23 ‘‘(7) FAMILY LITERACY SERVICES.—The term

24 ‘family literacy services’ means services that are of

25 sufficient intensity in terms of hours, and of suffi-
70

•S 1 IS

1 cient duration, to make sustainable changes in a

2 family and that integrate all of the following activi3 ties:

4 ‘‘(A) Interactive literacy activities between

5 parents and their children.

6 ‘‘(B) Training for parents on how to be the

7 primary teacher for their children and full part8 ners in the education of their children.

9 ‘‘(C) Parent literacy training.

10 ‘‘(D) An age-appropriate education pro11 gram for children.

12 ‘‘(8) INDIVIDUAL OF LIMITED ENGLISH PRO13 FICIENCY.—The term ‘individual of limited English

14 proficiency’ means an individual—

15 ‘‘(A) who has limited ability in speaking,

16 reading, or writing the English language; and

17 ‘‘(B)(i) whose native language is a lan18 guage other than English; or

19 ‘‘(ii) who lives in a family or community

20 environment where a language other than Eng21 lish is the dominant language.

22 ‘‘(9) INDIVIDUAL WITH A DISABILITY.—

23 ‘‘(A) IN GENERAL.—The term ‘individual

24 with a disability’ means an individual with any

25 disability (as defined in section 3 of the Ameri-
71

•S 1 IS

1 cans with Disabilities Act of 1990 (42 U.S.C.

2 12102)).

3 ‘‘(B) INDIVIDUALS WITH DISABILITIES.—

4 The term ‘individuals with disabilities’ means

5 more than 1 individual with a disability.

6 ‘‘(10) LITERACY.—The term ‘literacy’, used

7 with respect to an individual, means the ability of

8 the individual to speak, read, and write English, and

9 compute and solve problems, at levels of proficiency

10 necessary—

11 ‘‘(A) to function on the job, in the family

12 of the individual, and in society;

13 ‘‘(B) to achieve the goals of the individual;

14 and

15 ‘‘(C) to develop the knowledge potential of

16 the individual.

17 ‘‘(11) LOCAL EDUCATIONAL AGENCY.—The

18 term ‘local educational agency’ has the meaning

19 given such term in section 14101 of the Elementary

20 and Secondary Education Act of 1965 (20 U.S.C.

21 8801).

22 ‘‘(12) OUTLYING AREA.—The term ‘outlying

23 area’ means the United States Virgin Islands,

24 Guam, American Samoa, the Commonwealth of the

25 Northern Mariana Islands, the Republic of the Mar-
72

•S 1 IS

1 shall Islands, the Federated States of Micronesia,

2 and the Republic of Palau.

3 ‘‘(13) POSTSECONDARY EDUCATIONAL INSTITU4 TION.—The term ‘postsecondary educational institu5 tion’ means an institution of higher education (as

6 such term is defined in section 481 of the Higher

7 Education Act of 1965 (20 U.S.C. 1088)) that con8 tinues to meet the eligibility and certification re9 quirements under title IV of such Act (20 U.S.C.

10 1070 et seq.).

11 ‘‘(14) SECRETARY.—The term ‘Secretary’

12 means the Secretary of Education.

13 ‘‘(15) STATE.—The term ‘State’ means each of

14 the several States of the United States, the District

15 of Columbia, and the Commonwealth of Puerto Rico.

16 ‘‘SEC. 304. AUTHORIZATION OF APPROPRIATIONS.

17 ‘‘(a) IN GENERAL.—There are authorized to be ap18 propriated to carry out this title (except section 321)

19 $400,000,000 for fiscal year 1998, and such sums as may

20 be necessary for each of the fiscal years 1999 through

21 2003.

22 ‘‘(b) RESERVATION OF FUNDS FOR NATIONAL LEAD23 ERSHIP ACTIVITIES.—For any fiscal year, the Secretary

24 may reserve not more than $4,500,000 of the amount ap25 propriated under subsection (a) to establish and carry out
73

•S 1 IS

1 the program of national leadership and evaluation activi2 ties described in section 322.

3 ‘‘(c) PROGRAM YEAR.—Appropriations for any fiscal

4 year for programs and activities carried out under part

5 A shall be available for obligation only on the basis of a

6 program year. The program year shall begin on July 1

7 in the fiscal year for which the appropriation is made.

8 ‘‘PART A—GRANTS TO ELIGIBLE

9 AGENCIES

10 ‘‘SEC. 311. AUTHORITY TO MAKE GRANTS.

11 ‘‘(a) IN GENERAL.—In the case of each eligible agen12 cy that in accordance with section 313 submits to the Sec13 retary a plan for a fiscal year, the Secretary shall make

14 a grant for the year to the eligible agency for the purpose

15 specified in subsection (b). The grant shall consist of the

16 initial and additional allotments determined for the eligible

17 agency under section 312.

18 ‘‘(b) PURPOSE OF GRANTS.—The Secretary may

19 make a grant under subsection (a) only if the applicant

20 involved agrees to expend the grant for adult education

21 and literacy activities in accordance with the provisions

22 of this part.

23 ‘‘SEC. 312. ALLOTMENTS.

24 ‘‘(a) INITIAL ALLOTMENTS.—From the sums avail25 able for the purpose of making grants under this part for
74

•S 1 IS

1 any fiscal year, the Secretary shall allot to each eligible

2 agency that in accordance with section 313 submits to the

3 Secretary a plan for the year an initial amount as follows:

4 ‘‘(1) $100,000, in the case of an eligible agency

5 of the United States Virgin Islands, Guam, Amer6 ican Samoa, the Commonwealth of the Northern

7 Mariana Islands, the Republic of the Marshall Is8 lands, the Federated States of Micronesia, and the

9 Republic of Palau.

10 ‘‘(2) $250,000, in the case of any other eligible

11 agency.

12 ‘‘(b) ADDITIONAL ALLOTMENTS.—

13 ‘‘(1) IN GENERAL.—From the remainder avail14 able for the purpose of making grants under this

15 part for any fiscal year after the application of sub16 section (a), the Secretary shall allot to each eligible

17 agency that receives an initial allotment under such

18 subsection an additional amount that bears the same

19 relationship to such remainder as the number of

20 qualifying adults in the State or outlying area of the

21 agency bears to the number of such adults in all

22 States and outlying areas.

23 ‘‘(2) QUALIFYING ADULT.—For purposes of

24 this subsection, the term ‘qualifying adult’ means an

25 adult who—
75

•S 1 IS

1 ‘‘(A) is at least 16 years of age, but less

2 than 61 years of age;

3 ‘‘(B) is beyond the age of compulsory

4 school attendance under the law of the State or

5 outlying area;

6 ‘‘(C) does not have a certificate of gradua7 tion from a school providing secondary edu8 cation and has not achieved an equivalent level

9 of education; and

10 ‘‘(D) is not currently enrolled in secondary

11 school.

12 ‘‘(c) SPECIAL RULE.—

13 ‘‘(1) IN GENERAL.—Notwithstanding any other

14 provision of this section and using funds allotted for

15 the Republic of the Marshall Islands, the Federated

16 States of Micronesia, and the Republic of Palau

17 under this section, the Secretary shall award grants

18 to Guam, American Samoa, the Commonwealth of

19 the Northern Mariana Islands, the Republic of the

20 Marshall Islands, the Federated States of Microne21 sia, or the Republic of Palau to carry out activities

22 described in this part in accordance with the provi23 sions of this part that the Secretary determines are

24 not inconsistent with this subsection.
76

•S 1 IS

1 ‘‘(2) AWARD BASIS.—The Secretary shall award

2 grants pursuant to paragraph (1) on a competitive

3 basis and pursuant to recommendations from the

4 Pacific Region Educational Laboratory in Honolulu,

5 Hawaii.

6 ‘‘(3) TERMINATION OF ELIGIBILITY.—Notwith7 standing any other provision of law, the Republic of

8 the Marshall Islands, the Federated States of Micro9 nesia, and the Republic of Palau shall not receive

10 any funds under this part for any fiscal year that

11 begins after September 30, 2001.

12 ‘‘(4) ADMINISTRATIVE COSTS.—The Secretary

13 may provide not more than 5 percent of the funds

14 made available for grants under this subsection to

15 pay the administrative costs of the Pacific Region

16 Educational Laboratory regarding activities assisted

17 under this subsection.

18 ‘‘SEC. 313. AGENCY PLAN.

19 ‘‘For an eligible agency to be eligible to receive a

20 grant under this part for any fiscal year, the agency shall

21 submit to the Secretary a plan for the year that includes

22 the following:

23 ‘‘(1) A description of the adult education and

24 literacy activities that will be carried out with funds

25 received under the grant.
77

•S 1 IS

1 ‘‘(2) A description of how such activities will be

2 integrated with other adult education and career de3 velopment activities in the State or outlying area of

4 the agency.

5 ‘‘(3) A description of how the eligible agency

6 annually will evaluate the effectiveness of the adult

7 education and literacy activities that are carried out

8 with funds received under the grant.

9 ‘‘(4) A description of the benchmarks required

10 under section 317 and how such benchmarks will en11 sure continuous improvement of adult education and

12 literacy services in the State or outlying area of the

13 agency.

14 ‘‘(5) An assurance that the funds received

15 under the grant will not be expended for any pur16 pose other than the activities described in sections

17 314 and 315.

18 ‘‘(6) An assurance that the eligible agency will

19 expend the funds received under the grant only in a

20 manner consistent with the fiscal requirements in

21 section 316.

22 ‘‘SEC. 314. USE OF FUNDS.

23 ‘‘(a) IN GENERAL.—Of the sum that is made avail24 able under this part to an eligible agency for any program

25 year—
78

•S 1 IS

1 ‘‘(1) not less than 85 percent shall be made

2 available to award grants in accordance with this

3 section to carry out adult education and literacy ac4 tivities;

5 ‘‘(2) not more than 10 percent shall be made

6 available to carry out activities described in section

7 315(a); and

8 ‘‘(3) subject to paragraph (1), not more than 5

9 percent, or $50,000, whichever is greater, shall be

10 made available for administrative expenses at the

11 State level (or the level of the outlying area).

12 ‘‘(b) GRANTS.—

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graph (2), from the amount made available to an eli15 gible agency for adult education and literacy under

16 subsection (a)(1) for a program year, such agency

17 shall award grants, on a competitive basis, to local

18 educational agencies, correctional education agen19 cies, community-based organizations of dem20 onstrated effectiveness, volunteer literacy organiza21 tions, libraries, public or private nonprofit agencies,

22 postsecondary educational institutions, public hous23 ing authorities, and other nonprofit institutions, that

24 have the ability to provide literacy services to adults

25 and families, or consortia of agencies, organizations,
79

•S 1 IS

1 or institutions described in this subsection, to enable

2 such agencies, organizations, institutions, and con3 sortia to carry out adult education and literacy ac4 tivities.

5 ‘‘(2) CONSORTIA.—An eligible agency may

6 award a grant under this section to a consortium

7 that includes a provider described in paragraph (1)

8 and a for-profit agency, organization, or institution,

9 if such agency, organization, or institution—

10 ‘‘(A) can make a significant contribution

11 to carrying out the objectives of this title; and

12 ‘‘(B) enters into a contract with such pro13 vider to carry out adult education and literacy

14 activities.

15 ‘‘(c) GRANT REQUIREMENTS.—

16 ‘‘(1) REQUIRED LOCAL ACTIVITIES.—An eligible

17 agency shall require that each provider receiving a

18 grant under this section use the grant in accordance

19 with section 315(b).

20 ‘‘(2) EQUITABLE ACCESS.—Each eligible agency

21 awarding a grant under this section for adult edu22 cation and literacy activities shall ensure that the

23 providers described in subsection (b) will be provided

24 direct and equitable access to all Federal funds pro25 vided under this section.
80

•S 1 IS

1 ‘‘(3) SPECIAL RULE.—Each eligible agency

2 awarding a grant under this section shall not use

3 any funds made available under this title for adult

4 education and literacy activities for the purpose of

5 supporting or providing programs, services, or activi6 ties for individuals who are not individuals described

7 in subparagraphs (A) and (B) of section 303(1), ex8 cept that such agency may use such funds for such

9 purpose if such programs, services, or activities are

10 related to family literacy services.

11 ‘‘(4) CONSIDERATIONS.—In awarding grants

12 under this section, the eligible agency shall con13 sider—

14 ‘‘(A) the past effectiveness of a provider

15 described in subsection (b) in providing services

16 (especially with respect to recruitment and re17 tention of educationally disadvantaged adults

18 and the learning gains demonstrated by such

19 adults);

20 ‘‘(B) the degree to which the provider will

21 coordinate services with other literacy and so22 cial services available in the community; and

23 ‘‘(C) the commitment of the provider to

24 serve individuals in the community who are

25 most in need of literacy services.
81

•S 1 IS

1 ‘‘(d) LOCAL ADMINISTRATIVE COST LIMITS.—

2 ‘‘(1) IN GENERAL.—Except as provided in para3 graph (2), of the funds provided under this section

4 by an eligible agency to a provider described in sub5 section (b), not less than 95 percent shall be ex6 pended for provision of adult education and literacy

7 activities. The remainder shall be used for planning,

8 administration, personnel development, and inter9 agency coordination.

10 ‘‘(2) SPECIAL RULE.—In cases where the cost

11 limits described in paragraph (1) will be too restric12 tive to allow for adequate planning, administration,

13 personnel development, and interagency coordination

14 supported under this section, the eligible agency

15 shall negotiate with the provider described in sub16 section (b) in order to determine an adequate level

17 of funds to be used for noninstructional purposes.

18 ‘‘SEC. 315. ADULT EDUCATION AND LITERACY ACTIVITIES.

19 ‘‘(a) PERMISSIBLE AGENCY ACTIVITIES.—An eligible

20 agency may use not more than 10 percent of the funds

21 made available to the eligible agency under this part for

22 activities that may include—

23 ‘‘(1) the establishment or operation of profes24 sional development programs to improve the quality

25 of instruction provided pursuant to local activities
82

•S 1 IS

1 required under subsection (b), including instruction

2 provided by volunteers or by personnel of a State or

3 outlying area;

4 ‘‘(2) the provision of technical assistance to eli5 gible providers of activities authorized in this sec6 tion;

7 ‘‘(3) the provision of technology assistance to

8 eligible providers of activities authorized in this sec9 tion to enable the providers to improve the quality

10 of such activities;

11 ‘‘(4) the support of State or regional networks

12 of literacy resource centers; and

13 ‘‘(5) the monitoring and evaluation of the qual14 ity of and the improvement in activities authorized

15 in this section.

16 ‘‘(b) REQUIRED LOCAL ACTIVITIES.—The eligible

17 agency shall require that each eligible provider receiving

18 a grant under section 314 use the grant to establish or

19 operate 1 or more programs that provide instruction or

20 services in 1 or more of the following categories:

21 ‘‘(1) Adult education and literacy services.

22 ‘‘(2) Family literacy services.

23 ‘‘(3) English literacy programs.
83

•S 1 IS

1 ‘‘SEC. 316. FISCAL REQUIREMENTS AND RESTRICTIONS RE2 LATED TO USE OF FUNDS.

3 ‘‘(a) SUPPLEMENT NOT SUPPLANT.—Funds made

4 available under this part for adult education and literacy

5 activities shall supplement, and may not supplant, other

6 public funds expended to carry out activities described in

7 section 315.

8 ‘‘(b) MAINTENANCE OF EFFORT.—

9 ‘‘(1) DETERMINATION.—

10 ‘‘(A) IN GENERAL.—Except as provided in

11 subparagraphs (B) and (C), and paragraph (2),

12 no payments shall be made under this part for

13 any program year to an eligible agency for

14 adult education and literacy activities unless the

15 Secretary of Education determines that the fis16 cal effort per student or the aggregate expendi17 tures of such eligible agency for activities de18 scribed in section 315 for the program year pre19 ceding the program year for which the deter20 mination is made, equaled or exceeded such ef21 fort or expenditures for activities described in

22 such section for the second program year pre23 ceding the fiscal year for which the determina24 tion is made.

25 ‘‘(B) COMPUTATION.—In computing the

26 fiscal effort or aggregate expenditures pursuant
84

•S 1 IS

1 to subparagraph (A), the Secretary of Edu2 cation shall exclude capital expenditures, special

3 one-time project costs, and similar windfalls.

4 ‘‘(C) DECREASE IN FEDERAL SUPPORT.—

5 If the amount made available for adult edu6 cation and literacy activities under this part for

7 a fiscal year is less than the amount made

8 available for adult education and literacy activi9 ties under this part for the preceding fiscal

10 year, then the fiscal effort per student or the

11 aggregate expenditures of an eligible agency re12 quired by subparagraph (A) for such preceding

13 fiscal year shall be decreased by the same per14 centage as the percentage decrease in the

15 amount so made available.

16 ‘‘(2) WAIVER.—The Secretary of Education

17 may waive the requirements of paragraph (1) (with

18 respect to not more than 5 percent of expenditures

19 required for the preceding fiscal year by any eligible

20 agency) for 1 program year only, after making a de21 termination that such waiver would be equitable due

22 to exceptional or uncontrollable circumstances affect23 ing the ability of the eligible agency to meet such re24 quirements, such as a natural disaster or an unfore25 seen and precipitous decline in financial resources.
85

•S 1 IS

1 No level of funding permitted under such a waiver

2 may be used as the basis for computing the fiscal ef3 fort or aggregate expenditures required under this

4 subsection for years subsequent to the year covered

5 by such waiver. The fiscal effort or aggregate ex6 penditures for the subsequent years shall be com7 puted on the basis of the level of funding that would,

8 but for such waiver, have been required.

9 ‘‘(c) EXPENDITURES OF NON-FEDERAL FUNDS FOR

10 ADULT EDUCATION AND LITERACY ACTIVITIES.—For

11 any program year for which a grant is made to an eligible

12 agency under this part, the eligible agency shall expend,

13 on programs and activities relating to adult education and

14 literacy activities, an amount, derived from sources other

15 than the Federal Government, equal to 25 percent of the

16 amount made available to the eligible agency under this

17 part for adult education and literacy activities.

18 ‘‘SEC. 317. ACCOUNTABILITY AND CONTINUOUS IMPROVE19 MENT.

20 ‘‘(a) GOAL.—Each eligible agency that receives a

21 grant under this part shall use such grant to meet the

22 goal of enhancing and developing more fully the literacy

23 skills of the adult population in the State or outlying area

24 of the agency.
86

•S 1 IS

1 ‘‘(b) BENCHMARKS.—To be eligible to receive a grant

2 under this part, an eligible agency shall develop and iden3 tify in the agency plan, submitted under section 313, pro4 posed quantifiable benchmarks to measure the progress of

5 the eligible agency toward meeting the goal described in

6 subsection (a) throughout the State or outlying area of

7 the agency, which shall include, at a minimum, measures

8 for participants of—

9 ‘‘(1) demonstrated improvements in literacy

10 skill levels;

11 ‘‘(2) attainment of secondary school diplomas

12 or general equivalency diplomas;

13 ‘‘(3) placement in, retention in, or completion

14 of, postsecondary education, training, or employ15 ment; and

16 ‘‘(4) attainment of the literacy skills and knowl17 edge individuals need to be productive and respon18 sible citizens and to become more actively involved in

19 the education of their children.

20 ‘‘(c) POPULATIONS.—

21 ‘‘(1) PERFORMANCE MEASURES.—In developing

22 and identifying measures of progress of the eligible

23 agency toward meeting the goal described in sub24 section (a), an eligible agency shall develop and iden25 tify in the agency plan, in addition to the bench-
87

•S 1 IS

1 marks described in subsection (b), proposed quantifi2 able benchmarks for populations that include, at a

3 minimum—

4 ‘‘(A) low-income individuals;

5 ‘‘(B) at-risk youth and young adults;

6 ‘‘(C) individuals with disabilities; and

7 ‘‘(D) individuals of limited literacy, as de8 termined by the eligible agency.

9 ‘‘(2) ADDITIONAL MEASURES.—In addition to

10 the benchmarks described in paragraph (1), an eligi11 ble agency may develop and identify in the agency

12 plan proposed quantifiable benchmarks to measure

13 the progress of the eligible agency toward meeting

14 the goal described in subsection (a) for populations

15 with multiple barriers to educational enhancement.

16 ‘‘PART B—NATIONAL PROGRAMS

17 ‘‘SEC. 321. NATIONAL INSTITUTE FOR LITERACY.

18 ‘‘(a) ESTABLISHMENT.—

19 ‘‘(1) IN GENERAL.—There is established the

20 National Institute for Literacy (in this section re21 ferred to as the ‘Institute’). The Institute shall be

22 administered under the terms of an interagency

23 agreement entered into by the Secretary of Edu24 cation with the Secretary of Labor and the Secretary

25 of Health and Human Services (in this section re-
88

•S 1 IS

1 ferred to as the ‘Interagency Group’). The Inter2 agency Group may include in the Institute any re3 search and development center, institute, or clear4 inghouse established within the Department of Edu5 cation, the Department of Labor, or the Department

6 of Health and Human Services whose purpose is de7 termined by the Interagency Group to be related to

8 the purpose of the Institute.

9 ‘‘(2) OFFICES.—The Institute shall have offices

10 separate from the offices of the Department of Edu11 cation, the Department of Labor, and the Depart12 ment of Health and Human Services.

13 ‘‘(3) BOARD RECOMMENDATIONS.—The Inter14 agency Group shall consider the recommendations of

15 the National Institute for Literacy Advisory Board

16 (in this section referred to as the ‘Board’) estab17 lished under subsection (d) in planning the goals of

18 the Institute and in the implementation of any pro19 grams to achieve such goals.

20 ‘‘(4) DAILY OPERATIONS.—The daily operations

21 of the Institute shall be carried out by the Director

22 of the Institute appointed under subsection (g).

23 ‘‘(b) DUTIES.—
89

•S 1 IS

1 ‘‘(1) IN GENERAL.—The Institute shall improve

2 the quality and accountability of the adult basic

3 skills and literacy delivery system by—

4 ‘‘(A) providing national leadership for the

5 improvement and expansion of the system for

6 delivery of literacy services;

7 ‘‘(B) coordinating the delivery of such

8 services across Federal agencies;

9 ‘‘(C) identifying effective models of basic

10 skills and literacy education for adults and fam11 ilies that are essential to success in job train12 ing, work, the family, and the community;

13 ‘‘(D) supporting the creation of new meth14 ods of offering improved literacy services;

15 ‘‘(E) funding a network of State or re16 gional adult literacy resource centers to assist

17 State and local public and private nonprofit ef18 forts to improve literacy by—

19 ‘‘(i) encouraging the coordination of

20 literacy services;

21 ‘‘(ii) carrying out evaluations of the

22 effectiveness of adult education and lit23 eracy activities;
90

•S 1 IS

1 ‘‘(iii) enhancing the capacity of State

2 and local organizations to provide literacy

3 services; and

4 ‘‘(iv) serving as a reciprocal link be5 tween the Institute and providers of adult

6 education and literacy activities for the

7 purpose of sharing information, data, re8 search, expertise, and literacy resources;

9 ‘‘(F) supporting the development of models

10 at the State and local level of accountability

11 systems that consist of goals, performance

12 measures, benchmarks, and assessments that

13 can be used to improve the quality of adult edu14 cation and literacy activities;

15 ‘‘(G) providing technical assistance, infor16 mation, and other program improvement activi17 ties to national, State, and local organizations,

18 such as—

19 ‘‘(i) improving the capacity of na20 tional, State, and local public and private

21 organizations that provide literacy and

22 basic skills services, professional develop23 ment, and technical assistance, such as the

24 State or regional adult literacy resource
91

•S 1 IS

1 centers referred to in subparagraph (E);

2 and

3 ‘‘(ii) establishing a national literacy

4 electronic database and communications

5 network;

6 ‘‘(H) working with the Interagency Group,

7 Federal agencies, and the Congress to ensure

8 that such Group, agencies, and the Congress

9 have the best information available on literacy

10 and basic skills programs in formulating Fed11 eral policy with respect to the issues of literacy,

12 basic skills, and workforce and career develop13 ment; and

14 ‘‘(I) assisting with the development of pol15 icy with respect to literacy and basic skills.

16 ‘‘(2) GRANTS, CONTRACTS, AND AGREE17 MENTS.—The Institute may make grants to, or

18 enter into contracts or cooperative agreements with,

19 individuals, public or private institutions, agencies,

20 organizations, or consortia of such institutions,

21 agencies, or organizations to carry out the activities

22 of the Institute. Such grants, contracts, or agree23 ments shall be subject to the laws and regulations

24 that generally apply to grants, contracts, or agree25 ments entered into by Federal agencies.
92

•S 1 IS

1 ‘‘(c) LITERACY LEADERSHIP.—

2 ‘‘(1) FELLOWSHIPS.—The Institute, in con3 sultation with the Board, may award fellowships,

4 with such stipends and allowances as the Director

5 considers necessary, to outstanding individuals pur6 suing careers in adult education or literacy in the

7 areas of instruction, management, research, or inno8 vation.

9 ‘‘(2) USE OF FELLOWSHIPS.—Fellowships

10 awarded under this subsection shall be used, under

11 the auspices of the Institute, to engage in research,

12 education, training, technical assistance, or other ac13 tivities to advance the field of adult education or lit14 eracy, including the training of volunteer literacy

15 providers at the national, State, or local level.

16 ‘‘(3) INTERNS AND VOLUNTEERS.—The Insti17 tute, in consultation with the Board, may award

18 paid and unpaid internships to individuals seeking to

19 assist the Institute in carrying out its mission. Not20 withstanding section 1342 of title 31, United States

21 Code, the Institute may accept and use voluntary

22 and uncompensated services as the Institute deter23 mines necessary.

24 ‘‘(d) NATIONAL INSTITUTE FOR LITERACY ADVISORY

25 BOARD.—
93

•S 1 IS

1 ‘‘(1) ESTABLISHMENT.—

2 ‘‘(A) IN GENERAL.—There is established a

3 National Institute for Literacy Advisory Board.

4 The Board shall consist of 10 individuals ap5 pointed by the President, with the advice and

6 consent of the Senate, from individuals who—

7 ‘‘(i) are not otherwise officers or em8 ployees of the Federal Government; and

9 ‘‘(ii) are representative of entities or

10 groups described in subparagraph (B).

11 ‘‘(B) ENTITIES OR GROUPS DESCRIBED.—

12 The entities or groups referred to in subpara13 graph (A) are—

14 ‘‘(i) literacy organizations and provid15 ers of literacy services, including—

16 ‘‘(I) nonprofit providers of lit17 eracy services;

18 ‘‘(II) providers of programs and

19 services involving English language in20 struction; and

21 ‘‘(III) providers of services re22 ceiving assistance under this title;

23 ‘‘(ii) businesses that have dem24 onstrated interest in literacy programs;

25 ‘‘(iii) literacy students;
94

•S 1 IS

1 ‘‘(iv) experts in the area of literacy re2 search;

3 ‘‘(v) State and local governments; and

4 ‘‘(vi) representatives of employees.

5 ‘‘(2) DUTIES.—The Board—

6 ‘‘(A) shall make recommendations concern7 ing the appointment of the Director and staff

8 of the Institute;

9 ‘‘(B) shall provide independent advice on

10 the operation of the Institute; and

11 ‘‘(C) shall receive reports from the Inter12 agency Group and the Director.

13 ‘‘(3) FEDERAL ADVISORY COMMITTEE ACT.—

14 Except as otherwise provided, the Board established

15 by this subsection shall be subject to the provisions

16 of the Federal Advisory Committee Act (5 U.S.C.

17 App.).

18 ‘‘(4) TERMS.—

19 ‘‘(A) IN GENERAL.—Each member of the

20 Board shall be appointed for a term of 3 years,

21 except that the initial terms for members may

22 be 1, 2, or 3 years in order to establish a rotation in which 1 23 ⁄3 of the members are selected

24 each year. Any such member may be appointed

25 for not more than 2 consecutive terms.
95

•S 1 IS

1 ‘‘(B) VACANCY APPOINTMENTS.—Any

2 member appointed to fill a vacancy occurring

3 before the expiration of the term for which the

4 member’s predecessor was appointed shall be

5 appointed only for the remainder of that term.

6 A member may serve after the expiration of

7 that member’s term until a successor has taken

8 office. A vacancy in the Board shall be filled in

9 the manner in which the original appointment

10 was made. A vacancy in the Board shall not af11 fect the powers of the Board.

12 ‘‘(5) QUORUM.—A majority of the members of

13 the Board shall constitute a quorum but a lesser

14 number may hold hearings. Any recommendation of

15 the Board may be passed only by a majority of the

16 Board’s members present.

17 ‘‘(6) ELECTION OF OFFICERS.—The Chair18 person and Vice Chairperson of the Board shall be

19 elected by the members of the Board. The term of

20 office of the Chairperson and Vice Chairperson shall

21 be 2 years.

22 ‘‘(7) MEETINGS.—The Board shall meet at the

23 call of the Chairperson or a majority of the members

24 of the Board.
96

•S 1 IS

1 ‘‘(e) GIFTS, BEQUESTS, AND DEVISES.—The Insti2 tute may accept, administer, and use gifts or donations

3 of services, money, or property, both real and personal.

4 ‘‘(f) MAILS.—The Board and the Institute may use

5 the United States mails in the same manner and under

6 the same conditions as other departments and agencies of

7 the Federal Government.

8 ‘‘(g) DIRECTOR.—The Interagency Group, after con9 sidering recommendations made by the Board, shall ap10 point and fix the pay of a Director.

11 ‘‘(h) APPLICABILITY OF CERTAIN CIVIL SERVICE

12 LAWS.—The Director and staff of the Institute may be

13 appointed without regard to the provisions of title 5, Unit14 ed States Code, governing appointments in the competitive

15 service, and may be paid without regard to the provisions

16 of chapter 51 and subchapter III of chapter 53 of that

17 title relating to classification and General Schedule pay

18 rates, except that an individual so appointed may not re19 ceive pay in excess of the maximum rate payable under

20 section 5376 of title 5, United States Code.

21 ‘‘(i) EXPERTS AND CONSULTANTS.—The Board and

22 the Institute may procure temporary and intermittent

23 services under section 3109(b) of title 5, United States

24 Code.
97

•S 1 IS

1 ‘‘(j) REPORT.—The Institute shall submit a report bi2 ennially to the Committee on Education and the

3 Workforce of the House of Representatives and the Com4 mittee on Labor and Human Resources of the Senate.

5 Each report submitted under this subsection shall in6 clude—

7 ‘‘(1) a comprehensive and detailed description

8 of the Institute’s operations, activities, financial con9 dition, and accomplishments in the field of literacy

10 for the period covered by the report;

11 ‘‘(2) a description of how plans for the oper12 ation of the Institute for the succeeding two fiscal

13 years will facilitate achievement of the goals of the

14 Institute and the goals of the literacy programs

15 within the Department of Education, the Depart16 ment of Labor, and the Department of Health and

17 Human Services; and

18 ‘‘(3) any additional minority, or dissenting

19 views submitted by members of the Board.

20 ‘‘(k) FUNDING.—Any amounts appropriated to the

21 Secretary of Education, the Secretary of Labor, or the

22 Secretary of Health and Human Services for purposes

23 that the Institute is authorized to perform under this sec24 tion may be provided to the Institute for such purposes.
98

•S 1 IS

1 ‘‘(l) AUTHORIZATION OF APPROPRIATIONS.—There

2 are authorized to be appropriated $10,000,000 for fiscal

3 year 1998 and such sums as may be necessary for each

4 of the fiscal years 1999 through 2003 to carry out this

5 section.

6 ‘‘SEC. 322. NATIONAL LEADERSHIP ACTIVITIES.

7 ‘‘The Secretary shall establish and carry out a pro8 gram of national leadership activities to enhance the qual9 ity of adult education and family literacy programs nation10 wide. Such activities shall include the following:

11 ‘‘(1) Providing technical assistance to recipients

12 of assistance under part A in developing and using

13 benchmarks and performance measures for improve14 ment of adult education and literacy activities, in15 cluding family literacy services.

16 ‘‘(2) Awarding grants, on a competitive basis,

17 to an institution of higher education, a public or pri18 vate organization or agency, or a consortium of such

19 institutions, organizations, or agencies to carry out

20 research and technical assistance—

21 ‘‘(A) for the purpose of developing, improv22 ing, and identifying the most successful meth23 ods and techniques for addressing the education

24 needs of adults; and
99

•S 1 IS

1 ‘‘(B) to increase the effectiveness of, and

2 improve the quality of, adult education and lit3 eracy activities, including family literacy serv4 ices.

5 ‘‘(3) Providing for the conduct of an independ6 ent evaluation and assessment of adult education

7 and literacy activities, through studies and analyses

8 conducted independently through grants and con9 tracts awarded on a competitive basis. Such evalua10 tion and assessment shall include descriptions of—

11 ‘‘(A) the effect of benchmarks, perform12 ance measures, and other measures of account13 ability on the delivery of adult education and

14 literacy activities, including family literacy serv15 ices;

16 ‘‘(B) the extent to which the adult edu17 cation and literacy activities, including family

18 literacy services, increase the literacy skills of

19 adults (and of children, in the case of family lit20 eracy services), lead the participants in such ac21 tivities to involvement in further education and

22 training, enhance the employment and earnings

23 of such participants, and, if applicable, lead to

24 other positive outcomes, such as reductions in
100

•S 1 IS

1 recidivism in the case of prison-based adult edu2 cation and literacy services; and

3 ‘‘(C) the extent to which eligible agencies

4 have distributed funds part A to meet the needs

5 of adults through community-based organiza6 tions.

7 ‘‘(4) Carrying out demonstration programs,

8 replicating model programs, disseminating best prac9 tices information, and providing technical assistance,

10 for the purposes of developing, improving, and iden11 tifying the most successful methods and techniques

12 for providing the activities assisted under part A.’’.

13 SEC. 512. EXTENSION OF FUNCTIONAL LITERACY AND LIFE

14 SKILLS PROGRAM FOR STATE AND LOCAL

15 PRISONERS.

16 Paragraph (3) of section 601(i) of the National Lit17 eracy Act of 1991 (20 U.S.C. 1211–2(i)) is amended—

18 (1) by striking ‘‘1994, and’’ and inserting

19 ‘‘1994,’’; and

20 (2) by inserting ‘‘, and such sums as may be

21 necessary for each of the fiscal years 1998, 1999,

22 2000, 2001, 2002, and 2003’’ before the period.
101

•S 1 IS

1 SEC. 513. CONFORMING ADULT EDUCATION ACT AMEND2 MENTS.

3 (a) REFUGEE EDUCATION ASSISTANCE ACT.—Sub4 section (b) of section 402 of the Refugee Education Assist5 ance Act of 1980 (8 U.S.C. 1522 note) is repealed.

6 (b) ELEMENTARY AND SECONDARY EDUCATION ACT

7 OF 1965.—

8 (1) SECTION 1206 OF ESEA.—Section

9 1206(a)(1)(A) of the Elementary and Secondary

10 Education Act of 1965 (20 U.S.C. 6366(a)(1)(A)) is

11 amended by striking ‘‘an adult basic education pro12 gram’’ and inserting ‘‘adult education and literacy

13 activities’’.

14 (2) SECTION 3113 OF ESEA.—Section 3113(1)

15 of such Act (20 U.S.C. 6813(1)) is amended by

16 striking ‘‘section 312’’ and inserting ‘‘section 303’’.

17 (3) SECTION 9161 OF ESEA.—Section 9161(2)

18 of such Act (20 U.S.C. 7881(2)) is amended by

19 striking ‘‘section 312(2)’’ and inserting ‘‘section

20 303’’.
102

•S 1 IS

1 Subtitle B—Demonstration Pro2 grams and Projects To Promote

3 Literacy

4 SEC. 521. SHORT TITLE.

5 Title X of the Elementary and Secondary Education

6 Act of 1965 (20 U.S.C. 8001 et seq.) is amended by add7 ing at the end the following:

8 ‘‘PART N—DEMONSTRATION PROGRAMS AND

9 PROJECTS TO PROMOTE LITERACY

10 ‘‘SEC. 10996. DEMONSTRATION PARTNERSHIPS TO PRO11 MOTE LITERACY.

12 ‘‘(a) TRAINING DEMONSTRATION PROGRAMS AND

13 PROJECTS.—The Secretary is authorized to make grants

14 to, and enter into contracts and cooperative agreements

15 with, State educational agencies, local educational agen16 cies, institutions of higher education, and other public and

17 private agencies, organizations, and institutions to—

18 ‘‘(1) provide in-service training for teachers,

19 and, where appropriate, other staff such as teacher’s

20 aides, in language acquisition skills and systematic

21 phonics;

22 ‘‘(2) provide pre-service training for teachers,

23 and, where appropriate, other staff, in language ac24 quisition skills and systematic phonics; and
103

•S 1 IS

1 ‘‘(3) provide training opportunities for parents,

2 community volunteers, and other persons interested

3 in obtaining language acquisition and systematic

4 phonics skills for the purpose of improving their lit5 eracy or the literacy skills of children or other

6 adults.

7 ‘‘(b) OTHER DEMONSTRATION PROGRAMS AND

8 PROJECTS.—The Secretary is authorized to make grants

9 to, and enter into contracts with, State educational agen10 cies, local educational agencies, and private nonprofit

11 agencies or organizations that use practices determined by

12 replicated experimental research to be effective in prevent13 ing and responding to illiteracy in children and adults.

14 Such grants shall be awarded for time-limited, demonstra15 tion programs and projects as follows:

16 ‘‘(1) FAMILY LITERACY PROGRAMS.—The Sec17 retary shall award grants for programs that encour18 age parental involvement with their children in fam19 ily literacy services (as defined in section 303 of the

20 Adult Education Act). Such programs may combine

21 literacy activities with parent training, in order to

22 emphasize the parent’s role as their child’s primary

23 teacher.

24 ‘‘(2) SCHOOL AND COMMUNITY PARTNER25 SHIPS.—The Secretary shall award grants to local
104

•S 1 IS

1 educational agencies and private nonprofit organiza2 tions for the development of partnerships among

3 schools, parents, private, nonprofit community vol4 unteer organizations, and other community associa5 tions. Such partnerships shall demonstrate in the

6 application submitted under subsection (c) the part7 nership’s commitment to, and participation in, pro8 grams involving voluntary tutoring sessions for—

9 ‘‘(A) children in kindergarten through 4th

10 grade; and

11 ‘‘(B) the parents of such children, where

12 requested by the parent.

13 ‘‘(c) APPLICATION.—Each entity desiring assistance

14 under this section shall submit an application to the Sec15 retary, at such time, in such manner, and accompanied

16 by such information as the Secretary may require.

17 ‘‘(d) ANNUAL EVALUATION.—

18 ‘‘(1) IN GENERAL.—In making grants and en19 tering into contracts and cooperative agreements for

20 demonstration programs and projects under this sec21 tion, the Secretary, in cooperation with the Comp22 troller General, shall require all such programs and

23 projects to be evaluated for their effectiveness using

24 nationally recognized standardized assessments

25 which measure reading achievement.
105

•S 1 IS

1 ‘‘(2) FUNDING.—The Secretary may provide

2 funding for the evaluations described in paragraph

3 (1) through—

4 ‘‘(A) a stated percentage of funds awarded

5 under a grant or contracted under this sub6 section; or

7 ‘‘(B) a separate grant made by the Sec8 retary for evaluating an individual demonstra9 tion program or project, or group of demonstra10 tion programs or projects.

11 ‘‘(3) RESERVATION.—The Secretary is author12 ized to reserve not more than 2 percent of the

13 amount appropriated under subsection (e) for each

14 fiscal year to fund the evaluations under this sub15 section.

16 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There

17 are authorized to be appropriated $100,000,000 for fiscal

18 year 1998 and such sums as may be necessary for each

19 of the 4 succeeding fiscal years.’’.

20 Subtitle C—National Commission

21 on Literacy

22 SEC. 531. SHORT TITLE.

23 This subtitle may be cited as the ‘‘National Commis24 sion on Literacy’’.
106

•S 1 IS

1 SEC. 532. FINDINGS.

2 Congress finds as follows:

3 (1) Since 1965, the United States has spent

4 over $500,000,000,000 on Federal education pro5 grams, yet 66 percent of 17-year olds do not read

6 at a proficient level and reading scores have been de7 clining for 3 decades. More over 75 percent of 4th

8 graders, nationally, scored below the proficient level

9 of reading.

10 (2) 85 percent of juvenile delinquents cannot

11 read.

12 (3) American businesses are spending more

13 than $30,000,000,000 in retraining employees, pri14 marily because the employees cannot read at an

15 adult level.

16 (4) In most junior colleges, at least one-third of

17 the students must take remedial English because the

18 students are not able to read at college level.

19 SEC. 533. NATIONAL COMMISSION ON LITERACY.

20 (a) ESTABLISHMENT.—There is hereby established a

21 commission to be known as the ‘‘National Commission on

22 Literacy’’ (in this subtitle referred to as the ‘‘Commis23 sion’’).

24 (b) MEMBERSHIP.—

25 (1) IN GENERAL.—The Commission shall con26 sist of—
107

•S 1 IS

1 (A) 5 members to be appointed by the

2 President of the United States;

3 (B) 5 members to be appointed by the

4 Speaker of the House of Representatives; and

5 (C) 5 members to be appointed by the Ma6 jority Leader of the Senate.

7 (2) APPOINTMENTS.—

8 (A) IN GENERAL.—The President, the

9 Speaker of the House of Representatives, and

10 the Majority Leader of the Senate shall each

11 appoint as members of the Commission any

12 United States citizen, including educators and

13 other professionals involved in the research,

14 study, and analysis of illiteracy.

15 (B) PROHIBITION.—An individual with a

16 direct financial interest in the outcome of the

17 Commission shall not be appointed to the Com18 mission.

19 (3) CONSULTATION.—The appointments made

20 pursuant to subparagraphs (B) and (C) of para21 graph (1) shall be made in consultation with the

22 chairpersons of the Committee on Education and the

23 Workplace of the House of Representatives and the

24 Committee on Labor and Human Resources of the

25 Senate.
108

•S 1 IS

1 (c) DUTIES.—

2 (1) IN GENERAL.—The Commission shall—

3 (A) conduct a comprehensive review of the

4 social and economic impact of illiteracy in the

5 United States and any correlation between such

6 impact and welfare costs, juvenile delinquency,

7 special education, adult literacy programs, drug

8 addiction, and underemployment;

9 (B) examine matters including—

10 (i) a review of—

11 (I) requirements set for prospec12 tive reading teachers studying at col13 leges of education; and

14 (II) whether such requirements

15 include obtaining knowledge about di16 rect, intensive, and systematic phonics

17 with decodable text as an important

18 step in reading instruction;

19 (ii) a review of the available testing

20 instruments that determine whether, and

21 to what extent, children can decode the

22 English language;

23 (iii) an assessment of the extent to

24 which the use of experimentally unverified
109

•S 1 IS

1 methods and teaching materials contrib2 utes to illiteracy;

3 (iv) a review of medical and neuro4 logical evidence regarding how individuals

5 acquire the skill of reading;

6 (v) a review of the cost of illiteracy to

7 business and industry;

8 (vi) an assessment of the negative im9 pact of illiteracy on the economy in gen10 eral, and in particular the impact of illit11 eracy on economically depressed areas; and

12 (vii) other issues that a majority of

13 the members of the Commission deem ap14 propriate to investigate in accordance with

15 this subtitle.

16 (2) PUBLIC HEARINGS.—The Commission (and

17 any committees the Commission may form) shall

18 conduct public hearings in different geographic areas

19 of the United States, both urban and rural, in order

20 to receive the views of a broad spectrum of the pub21 lic on the issue of literacy and on ways to enhance

22 the reading proficiency of children, adults, and fami23 lies in the United States.
110

•S 1 IS

1 (3) TESTIMONY.—The Commission is author2 ized to receive testimony from individuals, includ3 ing—

4 (A) representatives of public and private

5 organizations and institutions with an interest

6 in the literacy of children, adults, and families

7 in the United States;

8 (B) educators;

9 (C) religious leaders;

10 (D) providers of social services;

11 (E) representatives of organizations with

12 children as members;

13 (F) elected and appointed public officials;

14 and

15 (G) other individuals speaking on their

16 own behalf.

17 (d) INTERIM AND FINAL REPORTS TO PRESIDENT

18 AND CONGRESS; RECOMMENDATIONS.—

19 (1) INTERIM REPORTS.—The Commission may

20 submit to the President, the Committee on Labor

21 and Human Resources of the Senate, the Committee

22 on Education and the Workplace of the House of

23 Representatives, and to the public, interim reports

24 regarding the duties of the Commission undertaken

25 pursuant to subsection (c).
111

•S 1 IS

1 (2) FINAL REPORT.—The Commission shall

2 submit to the President, the Committee on Labor

3 and Human Resources of the Senate, and the Com4 mittee on Education and the Workplace of the

5 House of Representatives a final report no later

6 than September 30, 2000. The final report shall set

7 forth recommendations regarding the findings of the

8 Commission.

9 (3) AVAILABILITY.—Copies of interim reports

10 and the final report of the Commission shall be

11 made available in sufficient quantity for public re12 view.

13 (e) TIME OF APPOINTMENT OF MEMBERS; VACAN14 CIES; SELECTION OF CHAIRMAN; QUORUM; CALLING OF

15 MEETINGS; NUMBER OF MEETINGS; VOTING; COMPENSA16 TION AND EXPENSES.—

17 (1) IN GENERAL.—The President, the Speaker

18 of the House of Representatives, and the Majority

19 Leader of the Senate shall make their respective ap20 pointments to the Commission not later than 60

21 days after the date of enactment of this Act, for

22 terms ending 60 days after the Commission issues

23 its final report.

24 (2) VACANCY.—Any vacancy that occurs during

25 the life of the Commission shall not affect the pow-
112

•S 1 IS

1 ers of the Commission, and shall be filled in the

2 same manner as the original appointment not later

3 than 30 days after the vacancy occurs.

4 (3) CHAIRMAN.—The Majority Leader of the

5 Senate, in consultation with the Speaker of the

6 House of Representatives and with the President

7 shall designate one member of the Commission as

8 Chairman of the Commission no later than 60 days

9 after the establishment of the Commission.

10 (4) QUORUM.—A majority of the members of

11 the Commission shall constitute a quorum for the

12 transaction of business, but the Commission may es13 tablish a lesser quorum for conducting hearings

14 scheduled by the Commission.

15 (5) MEETINGS.—The Commission shall meet at

16 the call of the Chairman of the Commission, or at

17 the call of a majority of the members of the Com18 mission. The initial meeting of the Commission shall

19 be conducted no later than 30 days after the ap20 pointment of the last member of the Commission, or

21 no later than 30 days after the date on which funds

22 are made available for the Commission.

23 (6) VOTING.—Decisions of the Commission

24 shall be according to the vote of a simple majority
113

•S 1 IS

1 of the members of the Commission present and vot2 ing at a properly called meeting.

3 (7) RULES.—The Commission may establish by

4 majority vote any other rules for the conduct of the

5 Commission’s business, if such rules are not incon6 sistent with this subtitle or other applicable law.

7 (8) COMPENSATION.—Each member of the

8 Commission who is not an officer or employee of the

9 Federal Government, or whose compensation as a

10 member of the Commission is not precluded by a

11 Federal, State, or local law, shall be compensated at

12 a rate equal to the daily equivalent of the annual

13 rate of basic pay prescribed for Level IV of the Ex14 ecutive Schedule under section 5315 of title 5, Unit15 ed States Code, for each day (including travel time)

16 during which such member is engaged in the per17 formance of the duties of the Commission. All mem18 bers of the Commission who are officers or employ19 ees of the United States shall serve without com20 pensation in addition to the compensation received

21 for their services as officers or employees of the

22 United States.

23 (9) TRAVEL EXPENSES.—The members of the

24 Commission shall be allowed travel expenses, includ25 ing per diem in lieu of subsistence, at rates author-
114

•S 1 IS

1 ized for employees of agencies under subchapter I of

2 chapter 57 of title 5, United States Code, while

3 away from their homes or regular places of business

4 in the performance of service for the Commission.

5 (f) EXECUTIVE DIRECTOR AND ADDITIONAL PER6 SONNEL; APPOINTMENT AND COMPENSATION; CONSULT7 ANTS.—

8 (1) EXECUTIVE DIRECTOR AND ADDITIONAL

9 PERSONNEL.—The Commission may appoint an Ex10 ecutive Director of the Commission, and the Com11 mission may appoint and fix the compensation of

12 such personnel as the Commission deems advisable.

13 The Executive Director shall be compensated at a

14 rate not to exceed the rate payable for Level V of

15 the Executive Schedule under section 5316 of title

16 5, United States Code. Compensation of other per17 sonnel may be set without regard to the provisions

18 of such title 5 that govern appointments in the com19 petitive services, and the provisions of chapter 51

20 and subchapter III of chapter 53 of such title 5 that

21 relate to classifications and the General Schedule

22 pay rates, except that the rate of pay for such per23 sonnel may not exceed the rate payable for Level

24 V of the Executive Schedule under section 5316 of

25 such title.
115

•S 1 IS

1 (2) DETAILEES.—Any Federal Government em2 ployee, with the approval of the head of the appro3 priate Federal agency, may be detailed to the Com4 mission without reimbursement, and such detail

5 shall be without interruption or loss of civil service

6 status, benefits, or privilege.

7 (3) TEMPORARY OR INTERMITTENT SERV8 ICES.—The Commission may procure temporary and

9 intermittent services under section 3109(b) of title

10 5, United States Code, at rates for individuals not

11 to exceed the daily equivalent of the annual rate of

12 basic pay prescribed for Level V of the Executive

13 Schedule under section 5316 of such title.

14 (4) CONSTRUCTION.—Nothing in this section

15 shall be construed to limit the ability of the Commis16 sion to enter into contracts with public or private or17 ganizations, for research necessary to carry out the

18 Commission’s duties under subsection (c).

19 (g) TIME AND PLACE OF HEARINGS AND NATURE

20 OF TESTIMONY AUTHORIZED.—

21 (1) IN GENERAL.—The Commission may hold

22 such hearings, sit and act at such times and places,

23 administer such oaths, take such testimony, and re24 ceive such evidence as the Commission considers ad25 visable.
116

•S 1 IS

1 (2) WITNESSES.—Witnesses requested to ap2 pear before the Commission shall be paid the same

3 fees as are paid to witnesses under section 1821 of

4 title 28, United States Code. The per diem and mile5 age allowances for witnesses shall be paid from

6 funds appropriated to the Commission.

7 (3) SUBPOENAS.—If a person fails to supply in8 formation requested by the Commission, the Com9 mission may by majority vote require by subpoena

10 the production of any written or recorded informa11 tion, document, report, answer, record, account,

12 paper, computer file, or other data or documentary

13 evidence necessary to carry out its duties under sub14 section (c).

15 (4) INFORMATION.—The Commission may se16 cure directly from any Federal department or agency

17 such information as the Commission considers nec18 essary to carry out its duties under subsection (c).

19 Upon the request of the Commission, the head of

20 such department or agency may furnish such infor21 mation to the Commission.

22 (5) DISCLOSURE OF CONFIDENTIAL INFORMA23 TION.—The Commission shall be considered an

24 agency of the Federal Government for purposes of

25 section 1905 of title 18, United States Code, and
117

•S 1 IS

1 any individual employed by an entity or organization

2 under contract to the Commission shall be subject to

3 such section. Information obtained by the Commis4 sion, other than information available to the public,

5 shall not be disclosed to any person in any manner,

6 except—

7 (A) to Commission employees or employees

8 of any individual, entity, or organization under

9 contract to the Commission under subsection (f)

10 for the purpose of receiving, reviewing, or proc11 essing such information;

12 (B) upon court order; or

13 (C) when publicly released by the Commis14 sion in an aggregate or summary form that

15 does not directly or indirectly disclose—

16 (i) the identity of any person or busi17 ness entity; or

18 (ii) any information which could not

19 be released under section 1905 of title 18,

20 United States Code.

21 (h) SUPPORT SERVICES.—The Comptroller General

22 shall provide to the Commission, on a reimbursable basis,

23 such administrative support services as the Commission

24 may request.

25 (i) DEFINITIONS.—In this subtitle:
118

•S 1 IS

1 (1) ILLITERACY.—The term ‘‘illiteracy’’ means

2 the lack of ability to read and write competently.

3 (2) STATE.—The term ‘‘State’’ means each of

4 the several States of the United States, the District

5 of Columbia, the Commonwealth of Puerto Rico, the

6 United States Virgin Islands, Guam, American

7 Samoa, and the Commonwealth of the Northern

8 Mariana Islands.

9 (3) SYSTEMATIC PHONICS.—The term ‘‘system10 atic phonics’’ means the direct teaching of a pre11 planned sequence of relationships between speech

12 sounds and all their letter equivalents.

13 (j) AUTHORIZATION OF APPROPRIATIONS.—There

14 are authorized to be appropriated for each of the fiscal

15 years 1998, 1999, and 2000, such sums as may be nec16 essary to carry out this section.

Æ